Huge GOCC salaries without legal basis - lawmakers

MANILA, Philippines - Congressmen discovered yesterday that the huge salaries and allowances in at least two government-owned and controlled corporations (GOCCs) are without legal basis.

During a hearing of the House committee on good government, top officials of the Subic Bay Metropolitan Authority (SBMA) and Clark Development Corp. (CDC) testified that the laws creating their agencies do not provide for their compensation package.

On the other hand, the law creating the Bases Conversion and Development Authority (BCDA) specifically provides that compensation for its officers should be patterned after that of officials of the Bangko Sentral ng Pilipinas (BSP).

Responding to questions raised by Cagayan de Oro City Rep. Rufus Rodriguez, SBMA administrator Armand Arreza admitted that the SBMA charter “is silent on compensation.”

Because of this, Arreza said SBMA followed the Salary Standardization Law, which prescribes the salary rates in the entire bureaucracy, from 1992 to 1998.

“In 1999, we obtained authority from the Office of the President to adopt a compensation package at par with the BCDA. So in 1999, we followed the BCDA rates,” he said.

In 2008, Arreza said SBMA received approval from Malacañang to adjust their salaries based on 2005 BCDA pay scales.

Separate resolutions filed by Rodriguez and Representatives Elpidio Barzaga Jr. of Dasmariñas City in Cavite, Mitos Magsaysay of Zambales and Bernadette Herrera of the party-list group Bagong Henerasyon prompted the inquiry into GOCC salaries.

For his part, CDC chairman Benigno Ricafort told the good government committee that though the law creating CDC does not mention their compensation, they opted to follow salary rates in private companies since the corporation is registered with the Securities and Exchange Commission.

Rodriguez said the admissions of Arreza and Ricafort meant that huge GOCC salaries and allowances are highly questionable and unconscionable, if not illegal.

Quoting a Commission on Audit (COA) report, he said Arreza and Ricafort received total compensation amounting to P26.8 million and P14.5 million, respectively, in 2009.

However, the SBMA administrator clarified that the COA included P18 million in “extraordinary and miscellaneous expenses” and P5 million in “intelligence expenses” of his office as part of his salary and allowances.

“My compensation amounted only to P1.8 million,” he said.

Ricafort, on the other hand, said his supposed 2009 salary of P14.5 million included P10 million in “extraordinary and miscellaneous expenses.”

Ricafort admitted that he received more than P4 million in total salaries and allowances, including P1.3 million as a member of the board of Clark International Airport Corp.

Still, Rodriguez said the more than P4 million and P1.8 million that Ricafort and Arreza received last year are huge compared to pay levels in the rest of the bureaucracy.

He said the COA should be “more precise” in reporting GOCC compensation in the future.

COA representatives admitted lumping the extraordinary, miscellaneous and intelligence expenses with the salaries and allowances of GOCC officers.

Ricafort and Arreza are appointees of former President Gloria Macapagal-Arroyo.