Press Release
November 2, 2010


A proposed legislation seeking to rationalize the operations of government-owned or controlled corporations (GOCCs) will eliminate political patronage and horse trading in appointing officials in state firms, a practice which has been abused by the Arroyo administration during its nine-year reign.

Senator Franklin Drilon, author of Senate Bill No. 2566 or the proposed GOCC Governance Act of 2010, said that the remedial measure aimed at eliminating abuses in state enterprises will see to it that only "fit and proper" individuals will be appointed to the governing boards of government-run corporations.

"Integrity, experience, education, training and competence are crucial factors in determining who will sit in the various governing boards of GOCCs. This standard should be properly observed by the President so he will not be accused of political accommodation, just like what happened in the past administration," said Drilon, chairman of the Senate Finance Committee that conducted an investigation into the excessive bonuses of officials of state firms.

Further, Drilon said that the "fit and proper rule" will see to it that only qualified individuals will get involved in state firms, as patronage job is susceptible to widespread inefficiency and corruption.

"We need to institute reforms in the government because we want the people to have full confidence with our leaders," he said, denouncing former President Arroyo's "politicized and arbitrary" appointment and retention of non-performing appointive directors and trustees in state enterprises.

Under Section 13 of the bill, an appointive director shall be appointed by the President of the Philippines from a shortlist prepared by the Governance Council for GOCCs, an advisory and monitoring body which is also mandated to set new pay schemes for state enterprises.

The monitoring council is mandated under the measure to identify the necessary skills and qualifications required for appointive directors or trustees, and taking into consideration the requirements set by a particular GOCC.

No person who is not included in the shortlist prepared by the monitoring body may become an appointive director.

The term of the appointive director shall be one year, but still subject to reappointment by the President. Appointment to any vacancy shall be only for the unexpired term of the predecessor.

Likewise, the directors or trustees have the legal obligation and duty to act in the best interest of the GOCC, especially in dealing with property and monies.

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