Press Release
September 13, 2010


DRILON: We have already finished the hearings of the Committee on Finance on the GOCCs. We conducted a total of 6 hearings--24 offices. We called 19 GOCCs and 5 GFIs. Apart from these personal appearances of these resource persons, we also sent out questionnaires to all of the GOCCs, wherein we sought information on certain aspects of their operation.

We shall now start the process of crafting the recommended legislation. We will propose to the Senate and the House a Public Enterprise Corporate Governance Act. This proposed legislation will review all 157 GOCCs and GFIs. We will have a Government Corporate Monitoring and Coordinating Council, which will be tasked to review the mandates of the 157 GOCCs. They will have the delegated authority to either dissolve or merge the mandates of the different GOCCs. They will have the authority to impose certain standards of performance for the appointment of the board of directors, so that we can have rules on the qualifications of the directors in the different GOCCs. We will also ask the proposed Government Corporate Monitoring and Coordinating Council with a review of the salary structure and compensation system of the GOCCs. This is our opportunity to make a review of the GOCCs because they constitute a major major sector of our government. As testified here, 43% of our national debt is owed to creditors because of the GOCCs. We have asked the DoF to submit to us the total assets of all the GOCCs; what is the total subsidy of the national government through the General Appropriations Act would be given to them; what are their annual revenues and how much of their revenues is remitted to the national government as dividends; and what is their total expenditure, because we are talking of a huge operation.

In India, they even have a Department of Public Enterprises. We don't intend to create a department which will monitor all of these GOCCs. In Singapore, they have a Temasek. It's a state-owned enterprise which in effect is the equivalent of a holding company in a private corporation. We will not even do that. We will just institute measures so that the abuses that we have seen will hopefully not be repeated, or at the very least be minimized. We will impose certain sanctions for failure to comply with the standards that the monitoring and coordinating council will come up with.

We have not decided on the composition of the monitoring and coordinating council. This is not new before it was there. This is a council that existed but it was toothless at that time and therefore nobody was following. We will intend to provide this monitoring council with teeth so that they can impose standards of performance. Compensation will be based on a set of performance standards that we will come up in the law or in the implementing regulations.

Hopefully before the month is over or before we adjourn for October 15, we should be able to submit this proposed legislation to the Senate and start the debate. Hopefully by the first half of next year, we should have a law already in place.

Q: Magkano yung 43% debt?

DRILON: I don't have the figure but that's the statement made by Mr. Estanislao and I will get a more definite figure once we have the data from the DoF.

Q: inaudible

DRILON: The sovereign guarantees are found in their charters. There are certain safeguards but these safeguards are not being followed.

Q: Should they need congressional approval...?

DRILON: I would not go to that extent, requiring congressional approval for every debt incurred. But certainly we must impose certain approval processes that must be followed. Not with Congress. I think the Monetary Board is tasked under our laws or our Constitution to approve all these sovereign guarantees.

Q: (on the Manila City Jail being part of the assets of HGC)

DRILON: It is so unusual that the City Jail is part of the assets of the Home Guaranty Corp. how they ended up with those assets and how they valued these assets in their books is something that would have to be examined closely.

Q: Nagsabi si Thelmo Cunanan na file cases against him...

DRILON: The function of this committee is not to file charges. It is clear that we are getting all this data in order to prepare a comprehensive legislation that will govern the behavior of our public enterprises. It is not my plan, it's not plan of our mandate to file charges against these people. There is nothing personal about this. Mr. Cunanan just happened to be there when we examined all of this remuneration, these abuses on the government coffers. We do not intend to file charges against them. That is not the mandate of the hearings. Our mandate is to come up with legislation. The SSS legal department itself has said that these bonuses are illegal. Now, it is the duty of the SSS to file charges in order to recover these amounts that were improperly allocated and appropriated by the commissioners when it should go to the coffers of the SSS.

Q: inaudible

DRILON: I don't want to get into a debate. There is nothing personal about this. We started these hearings on August 17 and principally dictated by the fact that the President has mentioned MWSS as among the agencies whose abuses were noted. Therefore we conducted these hearings also consistent with the plan of the administration not to impose taxes. It is only right that we look for ways and means by which we can reduce the deficit without asking for new taxes to be imposed. Among these, the achievements of the committee: we were able to influence the BSP to remit P9.3 billion to the national coffers as additional dividends; the DBP will declare additional dividends in view of their P18 billion retained earnings; I think the Clark Int'l Airport Authority has also a substantial retained earnings and has agreed to remit dividends to the national government. This is the purpose of the investigation.

Q: Sabi ni Cunanan personal money niya ang pinambili ng stocks sa Philex.

DRILON: Immaterial. Philex itself says that these are directors' fees. The difference between the market price in the stock market and the option price is considered as directors' fees per the by-laws and audited financial statements of Philex. The fact that he used his own funds is beside the point because he is not entitled to the gains arising from exercise of the stock option plan.

Q: inaudible

DRILON: It is quite obvious that a number of them, per CoA report, their allowances have been excessive. I don't have to repeat all of that. It's on the record.

Q: They should all refund?

DRILON: No. The reason why SSS is being the subject of the discussion is because this compensation came from companies where SSS had investments. It is on that basis that the SSS legal department issued that opinion. There can be some questions as to the propriety of the payments made to the board in other public enterprises, but that they are required to refund is something that I am not prepared to express an opinion on.

Q: Bakit toothless ang government monitoring council back then?

DRILON: There was no penalty for refusal to follow the directives of this monitoring group before. They can just be ignored especially since these companies were exempted from the Salary Standardization Law. So they took the position that their corporate operating budgets were not subject to any review by the DBM. The worse is MECO, where they simply had refused to have their books audited by the CoA. It was audited by a private firm. That's totally unacceptable. They performed consular services and charged fees but they never remitted a single centavo to the national coffers. That's unacceptable. That one is criminal.

Q: Who will compose the monitoring body?

DRILON: We have not yet decided but on the top of my head, I was thinking of the DoF Secretary, DBM, NEDA and some other secretaries. But we must have a strong executive director... The mandate of the monitoring committee will not only be on the compensation but a wider mandate.

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