MANILA, Philippines (UPDATED) – When President Rodrigo Duterte expressed frustration over excessive salaries and bonuses received by officials and personnel of government-owned and controlled corporations (GOCCs) in his second State of the Nation Address (SONA), he signed an executive order (EO) 4 days later on Friday, July 28, effectively suspending the Compensation and Position Classification System (CPCS) outlining salaries of GOCC officials.
"Increases will have to pass by my office and I am not inclined to increase your allowances, bonus, and salary at this time,” said Duterte during his SONA.
He added, “You cannot do it on your own, you have to direct it through the Executive Secretary.”
Here is what you need to know.
EO No. 36 cited a need to review the current compensation scheme of GOCCs “to eliminate any excessive, unauthorized, illegal and/or unconscionable allowances, incentives, and benefits.”
It likewise said that the Governance Commission for Government Owned and Controlled Corporations (GCG) “finds compelling reasons to revisit and/or reevaluate the CPCS.”
Some of the GOCC’s highest paid officials earn millions annually. In 2016, the top 10 highest paid GOCC officials included those from the Bangko Sentral ng Pilipinas (BSP), Government Service Insurance System (GSIS), and Securities and Exchange Commission (SEC):
According to the GCG, there is a total of 212 GOCCs as of April 17. However, not all corporations are affected by the new order.
EO 201 lays out the salary schedule of the 21 GOCCs not covered by the GCG as outlined in Republic Act 10149, otherwise known as the GOCC Governance Act of 2011. Included among the 21 GOCCs are:
Prior to Duterte’s order, GOCCs covered by the GCG did not follow the same compensation scheme. Some GOCCs supervised by the GCG were covered by the Salary Standardization Law (SSL), while others were exempt.
EO 36, signed by Duterte, suspends EO 203 and the different compensation schemes of GOCCs covered by the GCG.
In effect, all 97 active GOCCs covered by the GCG will follow a uniform CPCS once drafted by the governance commission.
These are the 97 GOCCs affected by Duterte's suspension order:
In the meantime, SSL-covered GOCCs are to adopt the modified salary schedule including allowances and benefits laid out in EO 201, once approved by the GCG.
SSL-exempt GOCCs covered by the GCG have the option to either maintain the current salary scheme in place in their corporation or follow the salary schedule under EO 201, subject to approval of the GCG.
SSL-exempt GOCCs that choose to adopt the compensation scheme of EO 201, are also limited to giving special provisions on benefits, allowances, and incentives under Joint Resolution Number 4.
Interim measures outlined in Duterte’s EO also state that officials and personnel of these GOCCs who have rendered at least 4 months of service may receive mid-year bonuses equivalent to one month’s salary, not earlier than May 15. Meanwhile, year-end bonuses and cash gifts shall be given in November of every year.
The GCG will also have the authority to review and revise the salary scheme of SSL-exempt GOCCs that choose to adopt EO 201.
35 GOCCs are also transitioning to full coverage under the GCG.
These GOCCs are currently supervised by the Presidential Commission on Good Governance or are companies under the Coconut Industry Investment Fund.
Once the GCG fully covers these GOCCs, they will follow the CPCS and EO 36. Until then, these GOCCs will continue following their own compensation frameworks.
These are the 35 GOCCs in transition:
Duterte's EO is not applicable to the remaning 58 GOCCs covered by the GCG.
According to the GCG, these GOCCs are currently undergoing abolition, privatization, or liquidation.
GOCCs classified as realty holding companies are also not affected as these are considered part of the National Development Company's assets and have no operations or personnel involved.