Senate passes bill on GOCC governance

MANILA, Philippines - The Senate has passed on third and final reading the government-owned and controlled corporations (GOCC) governance bill, which paves the way for the creation of a body with the power to reorganize, merge or abolish a GOCC.

Senate Bill No. 2640 was approved Tuesday with 18 votes in favor and one against, a few days after it was passed on second reading.

Under the bill, a Governance Commission for GOCCs (GCG) will be created, composed of three members, one of which would have a Cabinet rank.

Sen. Franklin Drilon, the sponsor and one of the principal authors of the bill, said that the GCG would be a permanent body composed of three full-time members to be appointed by the President.

He said the GCG would have broad powers, including the right to reorganize, merge and, with the approval of the President, abolish or privatize GOCCs.

Originally, the GCG was conceptualized as a temporary body that would review the mandates and performance of all 157 GOCCs and would exercise legislative authority limited to a period of time and only upon certain standards.

Drilon noted that an amendment was introduced by Sen. Joker Arroyo, making the GCG a continuing body.

Unlike Congress, whose power to reorganize or abolish agencies is plenary or would not require any standards, Drilon said that the GCG could only exercise the power to abolish on the basis of definite standards.

He explained that the GCG would have to study the mandate and performance of the GOCC concerned and if it determines that it has already outlived its mandate or is no longer operational, then it may exercise its power to reorganize, merge or abolish the agency.

“Supervision will be with the President because the head of the GCG has a Cabinet rank. (There will be) two undersecretaries so the three-member GCG would consist of the chair with the rank of secretary and two members with rank of undersecretary. So the three of them would constitute the collegial body,” Drilon said.

Arroyo, the lone senator who voted against the bill, explained that the powers of the GCG would exceed even that of the constitutionally mandated Civil Service Commission.

He said that “the understated impact of the bill is the blanket authority for mass layoff of the GOCCs’ chief executive officers and directors.”

“The CEOs don’t have to be informed or removed, all that needs to be done is to appoint their successor and pronto, their terms of office automatically end,” Arroyo said.

“Translated, this is a patronage bill. 1,570 positions for directors will be in the altar for distribution. The prize catches—the 157 positions for CEO,” he added.

The bill was introduced following revelations made during previous Senate hearings about the abuses committed by the members of the boards of the various GOCCs.

During the hearings, it was revealed that almost all of the boards of the GOCCs and government financial institutions in the country receive substantial allowances and other benefits, some running to the millions annually.