GMA to GOCC heads: Cut pay or get fired

President Arroyo yesterday warned the heads of government-owned and controlled corporations (GOCCs) they would be fired if they did not cut their pay and implement her strict austerity program.

The Palace said in a statement this was part of the government’s effort to avoid a fiscal crisis caused by a growing deficit and ballooning government debts.

As part of this effort, the Arroyo administration would have a "compliance scorecard on pay cuts and austerity measures among government-owned or controlled corporations," the statement said.

This compliance scorecard is part of Administrative Order 103 issued by Mrs. Arroyo on Aug. 31 imposing austerity measures on all national government agencies, including state universities and colleges (SUCs), GOCCs, government financial institutions (GFIs) and other government corporate entities (OGCEs) "and other instrumentalities under the Executive department, whether or not they receive funding support through the General Appropriations Act."

"This will be a tool for deciding who among the presidential appointees would stay or leave," it warned.

The President last month imposed such austerity measures on government agencies as banning non-essential foreign travel and ordering government offices to trim their use of fuel and electricity by 10 percent.

Mrs. Arroyo said Friday that executives of GOCCs had agreed to take "voluntary pay cuts while reorienting their respective organizations to the imperatives of discipline and effectiveness."

"A lot of those who came forward were the ones telling me they’ve been complying," the President said. "The (others) have suggestions on cost-cutting, like big employees, rationalization of their organizations."

She also said over the weekend that a number of GOCC and GFI executives said they have complied with the pay ceilings she set in Executive Order 20, which she issued in June 2001 setting a salary cap of P100,000 for the heads and executives of these agencies.

"Compliance has begun and has been commended by the President," Presidential Spokesman Ignacio Bunye said, adding that this compliance scorecard will be used in the President’s ongoing revamp and streamlining of government. "This will be a tool deciding who among the Presidential appointees would stay or leave."

The President also announced that she has already instructed Budget Secretary Emilia Boncodin to determine who among her presidential appointees have deliberately "disobeyed" her directives to rationalize the pay scale of GOCC and GFI executives.

"I told (Boncodin) if they (GOCCs) defy my authority, then they are disobeying, which could be a ground for removal," the President said.

She also said she has given Boncodin the authority, as Budget secretary, to go over "GOCC-to-GOCC." Boncodin now assumes the functions of the abolished Presidential Commission on Effective Governance (PCEG) under Executive order 355, which Mrs. Arroyo signed on Sept. 8.

A number of legislators have criticized the President for granting excessively high salaries and other perks to these executives, all of whom were appointed by the President.

Mrs. Arroyo is trying to convince legislators to pass new tax measures to avoid the fiscal crisis but many lawmakers as well as much of the public are against these new taxes.

Although these GOCCs and GFIs have been blamed for much of the budget deficit problems due to heavy operational losses, the President said this is not the root of the fiscal problem.

"The most important thing(s) right now (are) revenue measures because, if you are going to talk about the numerical value of these supposed excess (salaries or allowances), they are a fraction (of the budget deficit) - but it is the ethic that is behind it that we must address," the President said.

"The issue of good governance (is that) everybody is being asked to share in the pain and, therefore, the GOCCs, many of (which) have not really been suffering pain to say the least, must share the pain," she said.

These GOCCS, the President added, "may be suffering in their bottom lines, but not necessarily the individuals — especially the board members."

Pay standardization sought

Meanwhile, Sen. Manuel Villar Jr. sought the standardization of the salaries of GOCC executives so that their paychecks will not exceed that drawn by the President.

Since GOCC executives are exempt from the Salary Standardization Law (SSL), the charters of these organizations must be amended to rationalize pay scales, Villar, who heads the Senate committee on finance, said.

He also said the exemption of GOCCs from the SSL should not be used as an excuse for the unjustifiably fat paychecks of GOCC executives.

"No government official should receive a salary higher than that of the President," Villar said.

He said limiting GOCC executives’ salaries to less than the salary the President gets will help the government address the looming fiscal crisis.

He cited Commission on Audit (COA) reports showing that for 2001 and 2002, the salaries of GOCC heads reached P9 million, or at a rate of P800,000 a month.

"GOCCs have incurred financial obligations and losses that worsen the outstanding public sector debt and aggravated the country’s fiscal woes," he said. "So why are their salaries soaring?"

He laid blame for the looming fiscal crisis on the mismanagement of these GOCCs.

Villar said that of the total public sector debt in 2003 of P5.3 trillion, GOCCs account for P1.6 trillion and the debts of the national government amounted to P4.6 trillion.

"It is also not fair to say that GOCC salaries are high in order to attract private sector managers to join government service," he added. ""Public sector work involves commitment to serve the country. That is why it is called public service." — With Jose Rodel Clapano