Press Release
October 14, 2010


DRILON: Yesterday we filed SB 2566, this is the GOCC Corporate Governance Act of 2010. This bill is the result of the hearings we conducted on the excessive pay of the GOCC board and executives and is designed to correct the malpractices we had seen. Under SB 2566, once it becomes law, such excessive bonuses of the BOD can no longer happen because their pay scale will all be rationalized. Insofar as the BOD is concerned, we have provided that the board will be entitled to per diems, reasonable reimbursement of transportation and representation allowances and a bonus of two months' salary of the highest executive. Just to emphasize that executive in a GOCC is a president or the general manager as the case may be, the general manager will receive the basic salary. The bonuses of the director should not be beyond two months' basic salary of the president or the general manager, the reason being that the board members would only come to the board meetings once or twice a month. On the other hand, a president or general manager would be a full time personnel of the GOCC. So we pegged the GOCC board of directors to a bonus equivalent of two months salary of the chief executive.

Apart from that, a principal feature of the bill is the creation of a Governing Council for the GOCCs--157 of them right now are 157 independent republics. So it will consist of five members--3 ex officio (the DBM secretary, the DoF secretary and the NEDA secretary) and 2 representing the private sector. We will have a executive director who will be of Cabinet rank and will be in charge of the day-to-day monitoring and evaluation of the performance of these GOCCs. The council will also be given the task of rationalizing the pay structure of these GOCCs and the very existence of the GOCCs. They will review whether the mandate of a particular GOCC is still valid, whether it duplicates the work of other agencies, whether it should be merged, etc. They are given 3 years to do their job, so that after 3 years, the power to reorganize goes back to Congress and the power to set the salaries of these GOCCs goes back to Congress.

These are some of the principal features of the GOCC Governance Act that we have filed. We are confident that once organized and once the law becomes effective, this will put a stop to the abuses that we saw in the compensation scheme of the GOCCs. Any benefit that the BOD of the GOCCs earned in the subsidiaries or affiliate companies will pertain to the GOCC. Example, the amounts which Messrs. Cunanan and Neri earned in Philex out of the stock option or the profit sharing, under the proposed bill, this will now become part of the funds of SSS. We will call a public hearing on this... first week when we come back. We will ask for the comments of the DBM, DoF and others who would be affected by this bill.

Q: Pano yung creation ng too many kinds of bonuses like MWSS?

DRILON: Yes, that will be part of the review of the governing council that we formed. But under the law, we have already limited it to two months the pay of the chief executive.

Q: Employees din kasama don.

DRILON: The employee' compensation will be part of the review by the council this time. But we have set the cap for the pay of the board of directors--which is reasonable per diem, reimbursement of transportation and representation expense, and bonus equivalent of two months of the salary of the highest executive. Of course it does not prevent the President from granting additional bonus for the good performance of a particular GOCC. The reorganization of the GOCCs and the rationalization of the salaries will be all effective only upon the approval of the President. The council is only recommendatory. The power to come up with a salary standardization plan for the GOCCs will be with the President, upon the recommendation of the council.

Q: Hindi na ba kailangang i-amend ang mga laws...?

DRILON: No. We have delegated to the Governing Council for GOCCs the authority to review these charters, recommend the abolition or merger of GOCCs to the President under a set of standards which we have enumerated in the law. The reorganization will be effective upon the approval of the President. The period to reorganize will be limited, in other words it is not perpetual. So I think after 3 years.

Q: May timetable ba kayo kung kalian ipapasa ang batas?

DRILON: I will be finishing the budget for the rest of the year. I think the reasonable target will be the first quarter of next year.

Q: Pending the approval by the President of the recommendations of the Governance Council, yung mga GOCCs na may charters, can they continue to determine their own allowances?

DRILON: Unfortunately, that is the legal situation. Although insofar as the board is concerned, the President has suspended their bonuses but not the employees.

Q: May penal provision ba sa bill?

DRILON: There is a provision on the restitution. I don't think there is any imprisonment.

Q: inaudible

DRILON: Because the authority to reorganize GOCCs with charters would pertain to Congress, and we are just delegating this to the Governing Council and the President under a reasonable set of standards. The setting of pay scales is basically a function of the legislature, but again we can't delegate this to the council or the President upon certain reasonable set of standards and for a temporary period.

Q: How about the charters. How would you address that? Sweeping na ba ang authority?

DRILON: We have provided that the Governing Council of GOCCs is given the power to rationalize the existence these GOCCs--to merge them when their functions are duplicates--and that their charter notwithstanding, because in this particular case, the council and the President would act as if they are Congress. They will exercise legislative authority limited in a period of time and only upon certain standards. In other words, under certain jurisprudence, Congress may delegate its authority to amend the GOCC charter to the President, as we have done in this particular case.

Q: Hindi kaya ma-contest ito sa Supreme Court?

DRILON: We are confident... We have studied this very well and we have made sure that the principle of delegation of legislative authority under a reasonable set of standards is met. In effect we have delegated the authority to amend the charter of these GOCCs and the power to standardize their salaries.

Q: Can a general law amend a specific charter?

DRILON: Yes, but that's a completely different issue. The issue here is 'are there reasonable standards upon which the power of the President can be delegated'?

Q: Wala talagang sanction... yung mga directors ayaw nang ibalik ang kinita nila?

DRILON: The provision here is that excessive allowances are held in trust by the board of directors in behalf of the GOCCs, to which the excess allowances belong. When you say held in trust, that means that you are supposed to return it, and if you do not return it after demand, there can be estafa.

Q: You need not specify that?

DRILON: No, because precisely, when you classified the fund as being held in trust, you create a relationship of a trustor-trustee. Therefore, the money does not belong to you, you are only holding it in trust. If you do not return it upon demand, you can be charged with estafa or malversation of public funds.

Q: How did you address the losing GOCCs?

DRILON: Well, the Governing Council may make a judgment that the losses being incurred by the GOCC would justify its abolition. With all the questions that you have raised, you will see that Congress cannot go per charter. You will never be able to do it. There are 157 GOCCs and I do not know how many are there with individual charters.

Q: Wala nang habol kina Neri et al?

DRILON: My view is that even without this law, they are under obligation to return the amounts that they have received.

Q: Sila Cunanan, lahat sila?

DRILON: Yes, because it is obvious that they received this by virtue of the investments of the SSS in these companies.

Q: Wala pa diyan ang GSIS. Meron ding GSIS members na nakaupo sa boards?

DRILON: None. They do not have board seats. Noon siguro meron yung sa Meralco, but they disposed of that. We expect some lively debate here. The GOCCs have assets of about P4 trillion and their total expenses for salaries and MOOE is equivalent to one-third of the public expenditure in the government. And yet, nobody is empowered to look at their operations because the directors have become independent Congresses themselves. So they have in effect appropriated public funds for the operation of the GOCCs, nobody monitors them, they do not come to Congress and they even ignore the DBM.

Q: May provision ba rito na requiring them to remit 50% of their net earnings?

DRILON: We did not touch on that because that's an existing law.

Q: Pero hindi nai-implement yon?

DRILON: You do not amend a law if it's not being implemented. It's a question of Malacanang implementing it. But in this law, that will be part of the function of the Governing Council. Somebody will really monitor their compliance with remittance of dividends.

Q: On 2011 budget

DRILON: We have finished for all intents and purposes the hearings of the various departments for the 2011 budget, except for the DoF which was scheduled today, but because of the illness of the secretary, it was postponed to November 8. Other than that, all the departments' budgets have been examined and heard by the committee. We are confidence that we are going to meet the deadline. We expect the General Appropriations Bill to be sent to the Senate the week to 15th of November. Thereafter, we will be looking at the GAB as passed in the House and we will see what major revisions were done. We will either call for one hearing or just prepare the report on the basis of the GAB that we will receive. We expect to sponsor the measure on the floor by the 3rd week of November. We will finish the debates before the end of November and have it approved on second and third reading on the 1st Thursday or Friday of December--either December 1 or 2. And we will go to bicam on December 6. We are confident that by mid-December, we shall be able to approve the bicameral committee report on the General Appropriation s Act of 2011, so that by January 1, 2011, we will have a new budget.

Q: Yung final version, before you adjourn in December?

DRILON: Yes. Signing na lang (ng President). One of the highlights of our budget hearing is our discovery of the amount of funds in the various treasuries of the different government agencies and GFIs--the amount of funds in savings and current accounts, which can be better utilized. Indeed, there is basis for the confidence of President Aquino that we do not need new taxes. First, the budget removed the excessive fat. Number 2, we concentrated on finding funds in the different accounts of the national government agencies and indeed, we have discovered that there are a lot of unutilized budget in the hands of these government agencies. Yesterday, as you have noted in our hearings of the Supreme Court, the projected savings because of unfilled positions is P5 billion and there is over P1.2 billion in JDF and special allowances for justices and justices which are unutilized, which could be used for MOOE and allowances of judges. So the complaint about the reduction of the proposed budget for 2011 is more apparent than real. If you examine the accounts of these agencies, you will discover that there are unutilized releases to these departments. The issue is the absorptive capacity of the departments to utilize the funds that are made available to them. The DFA is warning, again, there was admission that there are in fact funds that are available to them but they have not utilized.

Q: You agree with GMA's position on conditional cash transfer... that the DSWD has no capacity...?

DRILON: We have confidence that while in the past administration indeed did not have the absorptive capacity, Secretary Dinky Soliman is well equipped to be able to discharge the burden of making this CCT successful.

Q: Have you asked the SC to give you an accounting of the use of the JDF?

DRILON: I did ask for the particulars, but insofar that the JDF is concerned, we saw that it was P800 million. The JDF funds are in high-yielding savings account, instead of being utilized for MOOE.

Q: San napupunta yung interest non?

DRILON: Sa Supreme Court din.

Q: Hindi binibigay sa mga judges?

DRILON: It was brought up during the hearing and this is found in the CoA report in 2008. It is there. Their balance sheet would indicate the sums of money available for MOOE and allowances of judges amounting to about P1.2 billion.

Q: Kaya ba nila nilabanan yung midnight appointment?

DRILON: Hindi ko na alam (laughs)

Q: Dun sa amnesty, I think you were among those who asked na kailangang magkaroon pa ng hearing instead of going straight to the plenary?

DRILON: Yes I asked for a hearing because we have to find out... for example why are officers not allowed to go back to the active service, whereas ordinary soldiers are? How many would be entitled to this? Are any of those charged in the previous coup d'etat disqualified? I signed the resolution supporting the amnesty program but we would like to find out what are the parameters of this amnesty. And in the past, amnesty proclamations are subject to hearings.

Q: Other senators are saying that everybody knows about this...

DRILON: I respect their views but I have certain questions to ask and I think I am entitled to ask these questions and I am entitled to know the answers. I also have to cast a vote and I want to cast a vote on educated information. I don't think the Senate should be a stamping pad of Malacanang. To the question for example why are the officers disqualified for reinstatement to the Armed Forces, is a question that has never been asked. Maybe in the course of the public hearing, we will be able to judge whether it was justified that the officers should not be brought back to the active service. Maybe as a result of the public hearing, we may even come to the conclusion that the amnesty should be amended to allow officers to be reinstated. I think the public hearing will serve a purpose. It's unfortunate that the amnesty was signed as we are about to go on legislative break, because if not for the break, we would have finished this.

Q: Will that not pre-empt the promulgation of the decision of the court?

DRILON: No. Amnesty is a political act. And it's a political act of the President and Congress--the President proclaims the amnesty, Congress concurs. The Judiciary, it has nothing to do with the innocence or guilt of those charged with coup d'etat. That is a matter that is completely separate as an issue.

Q: The court can convict them even if there's already an amnesty?

DRILON: The moment the amnesty is approved and the moment those charged have applied under the amnesty and their applications have been accepted, then they can no longer be convicted. The amnesty has the effect of extinguishing whatever criminal liability there is.

Q: The promulgation is scheduled on October 28, you will resume to concur November 8. So pwede silang i-convict and then wala na?

DRILON: That's correct. Even assuming that they are convicted, the conviction is not final and therefore the amnesty will make the conviction academic.

Q: Hindi interference of the court?

DRILON: No. Of course it is not an interference. In fact, the RTC where Senator Trillanes is being tried should accord due respect to the legislative branch and the executive branch and defer the decision on this issue. I call on the judge to defer the promulgation of any decision and accord respect to Congress and allow Congress time to work on the amnesty and concur or reject the amnesty. I think it is in good taste for the Judiciary to defer action on this and give due deference to the President and Congress insofar as this issue is concerned... by postponing any decision on this issue. In other words, postpone the promulgation.

Q: What if the decision is for acquittal?

DRILON: The amnesty, insofar as those accused are concerned, becomes academic.

Q: inaudible

DRILON: Whether or not it is for acquittal or for conviction... but the act itself of deciding on the case is a matter that we are asking deferment on because the matter of the amnesty is before Congress.

Q: Is there a need for Malacanang to notify the court on the amnesty?

DRILON: The accused can make that formal motion.

Q: May right bang mag demand ng reinstatement ang mga natanggal na midnight appointees because of the status quo ante order ng of SC?

DRILON: From what I read in the papers, the spokesman of the court that this applies only to the petitioner. Unless the other midnight appointees may go there, they may be differently situated. Remember that in this particular case of the Office o Muslim Affairs, their appointment came about during the ban on midnight appointments... and because the law became effective during the ban. So the petitioners are not necessarily similarly situated as the others.

Q: May position po ba kayo sa reinstatement ng military officers for those incidents?

DRILON: I want to listen, that's why I want a public hearing.

Q: inaudible

DRILON: The President can amend it. After the hearing, a consensus can be developed and it's up to the President to do this.

Q: Kung isang chamber lang?

DRILON: Wala rin.

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