140 GOCCS up for review

metro rail
A June 6, 2011 press release by the Department of Budget and Management
New law gives the president a free hand to review, retain or replace GOCC officials
Budget and Management Secretary Florencio B. Abad today said more than 140 Government-Owned or -Controlled Corporations (GOCCs) will be examined by the Governance Commissions for GOCCs (GCG) now that the GOCC Governance Act of 2011 has been signed by the President into law.
Abad said the GCG will have sufficient powers to examine the relevance, performance and organizational structures of GOCCs, as well as the qualifications, performance and compensation of their officials and staff.
“Finally, governance of GOCCs is now lodged in an agency with a clear and effective mandate to pursue much-needed reforms in this sector,” he said.
“The GCG will have the power to pursue the reorganization, merger, streamlining, privatization or even the abolition of agencies. It will also have the power to establish a fair and equitable Compensation and Position Classification System for GOCCs and set the compensation, per diems, allowances and bonuses of their board members,” he said.
Abad also said that upon the effectivity of the law, the President, through the GCG, will have a free hand to review the current roster of GOCC appointive board members and chief executive officers (CEOs), for retention or replacement with more qualified and reform-oriented persons.
According to a provision of the law that is about to be signed, “Any provision of law to the contrary notwithstanding, all incumbent CEOs and appointive members of the Board of GOCCs shall, upon approval of this act, have a term of office until June 30, 2011, unless sooner replaced by the President.”
He said the GCG will be tasked to identify necessary skills and qualifications required for Appointive Directors and recommend to the President a shortlist of suitable and qualified candidates for such positions.
The GOCC Governance Act will be applicable to all GOCCs, Government Instrumentalities with Corporate Powers, Government Corporate Entities and Government Financial Institutions, including their subsidiaries, but excluding the Bangko Sentral ng Pilipinas, state universities and colleges, cooperatives, local water districts and research institutions.
GCG will have the authority to classify GOCCs based on parameters as it may find relevant, and adopt within 180 days from its constitution an ownership and operations manual and the government corporate standards governing GOCCs. Abad said GCG will be also tasked to prepare a semi-annual progress report to be submitted to the President and Congress detailing the performance assessment of GOCCs and recommend clear and specific actions.
Abad also said that the measure addresses the urgent need to establish qualifications-based parameters on the appointment of GOCC board members and officers, as well as their fiduciary responsibility to act in the best interest of the government and the people.
“Ultimately, the existence of GOCCs and the appointment of their officials should be for the sole purpose of achieving social and economic development,” he said.