Three years since the Commission on Audit ordered 31 government-owned and -controlled corporations (GOCCs) in January 2014 to return P2.3 billion in unauthorized allowances and bonuses received by their executives, the government has yet to see that money back in the state coffers. This fact underscores the failure and inadequacy of the corporate governance system that was introduced as a much-ballyhooed reform under the administration of former President Benigno Aquino 3rd.
When Aquino assumed office on June 30, 2010, he made a big show and a big noise by questioning the allowances and benefits that were being paid by the GOCCs to their directors and executives. He turned them into prime examples of mismanagement and corruption under the previous administration of President Gloria Macapagal Arroyo. He made it a key part of his Tuwid na Daan (Straight Path) campaign
As a result of Aquino’s incessant barking, the 15th Congress, which came to office at the same time Aquino began his term, made a big effort to pass the “GOCC Governance Act of 2011,” RA No. 10149, which was designed to bring under control and rationalize the compensation and benefits system for executives and employees in government corporations.
The law established the Governance Commission for government-owned and -controlled corporations (GCG) under the Office of the President to implement the new governance system, design the rules and regulations, and apply the rules on all GOCCs.
As things have turned out, RA 10149 has not worked. The governance mechanism has not stopped the looting of public coffers; indeed, it abets looting by approving the financial schemes devised by the GOCCs.
Based on COA’s findings, the Aquino administration did not control the practices that Aquino railed against. The GCG proved to be the opposite of what was envisioned by RA 10149. Judging by the extensive violations and uncontrolled growth of executive benefits and allowances, the commission appears to have tolerated the looting, because the GOCC decisions on benefits and allowances could not be implemented without prior approval by the Office of the President.
In the face of the COA report, the GCG has done nothing to tell the GOCCs to comply with the COA demands. It has no clue on how the corporations can be forced to comply with the COA’s order to return the illegal bonuses and allowances.
According to COA, the top 10 GOCCs that received bonuses in excess of what was considered legal are:
• Philippine Health Insurance Corp, or Philhealth (P1,651,084,000)
• Development Bank of the Philippines (P216,801,000)
• Region 7 Water Districts (P186,584,000)
• Philippine Charity Sweepstakes Office (P54,829,000)
• Philippine Economic Zone Authority (P48,500,000)
• Home Development Mutual Fund, or Pag-IBIG Fund (P37,636,000)
• Butuan City Water District (P28,243,000)
• Development Academy of the Philippines (P23,838,000)
• Philippine National Oil Co.–Exploration Corp., or PNOC-EC (P14,518,000)
• Mactan-Cebu International Airport Authority, or MCIAA (P14,406,000).
There are many more in violation of the rules and regulations. The list includes some of the most vital organizations in our government system.
COA cited the case of Philhealth, which approved 22 allowances and benefits for its executives and personnel, even without approval from the Office of the President. Among the executives was Ms. Risa Hontiveros, who made a successful run for the Senate in 2016.
The point we want to make here is that milking the GOCCs has been tolerated by past administrations without letup, so much so that it has become part of the culture. The obscene practices implemented by the Social Security System (SSS) to benefit its top officials was just the tip of the iceberg; other corporations did as much, or worse.
The question now is whether this corrupt system will be tolerated and will continue under President Duterte.
We submit that the practice should stop now. Duterte should declare that the looting will stop during his term.
The 17th Congress should take time to revise the toothless creation of the 15th Congress – Republic Act No. 10149.