EDITORIAL - Rich rewards

Once again, government-owned and controlled corporations are under fire for hefty bonuses and allowances. The Commission on Audit has ordered 31 GOCCs to refund P2.313 billion in bonuses and allowances paid in 2012.

Similar questions have been raised in the past about the propriety of granting executives and employees of GOCCs bonuses and allowances that are much higher than those in the bureaucracy. The questions prompted President Aquino to issue an executive order at the start of his term, imposing a moratorium on the financial perks. In 2011, the Governance Commission for GOCCs was created amid criticism of the hefty bonuses.

GOCCs ignored President Aquino’s Executive Order No. 7 and preferred to go along with an order issued by Gloria Macapagal Arroyo in 2007 during her presidency, when she gave state corporations autonomy in determining their compensation framework. Executives of certain GOCCs argued that they could not cut the bonuses enjoyed for six years by their officials and employees. There can be no diminution of benefits, the executives said.

Defenders of the hefty bonuses are reportedly planning to take the case to the Supreme Court. Malacañang is going along with this, saying the issue is best left to the courts.

While waiting for such a case to be filed, and for a final resolution that may take a decade, the government can consider executive measures and legislation that will rationalize compensation in state firms. GOCCs have long maintained that they need top-rate managers, and the best ones typically don’t come cheap. The private sector beckons for the best and brightest in whatever profession. One way for the government to entice good talent is by promising salaries and perks that can compete with those offered in the private sector.

The same can be said, however, of the numerous executive departments, but their officials and employees do not reward themselves with fat bonuses. What makes running a state firm more deserving of a fat paycheck than, say, running a cash-strapped public education or health care system? Salaries and bonuses need to be rationalized throughout government service. That includes GOCCs.