Palace tosses GOCC bonus issue to courts

MANILA, Philippines - Amid conflicting opinions, Malacañang will wait for the courts to settle the legality of bonuses in government-owned and controlled corporations (GOCCs).

Presidential spokesman Edwin Lacierda cited reports that the Philippine Health Insurance Corp. (PhilHealth) would bring to the Supreme Court the Commission on Audit (COA)’s order to refund bonuses and allowances of GOCC executives and employees.

The COA has ordered 31 GOCCs to refund the government bonuses and allowances totaling P2.313 billion given in 2012, saying this was deemed unauthorized by the commission.

The COA also disallowed the extra compensation, bonuses and allowances that officials and employees of PhilHealth and Development Bank of the Philippines (DBP) rewarded themselves between 2003 and 2006.

Lacierda told radio station dzRB yesterday that PhilHealth and COA have conflicting opinions on the matter.

“Our understanding based on the ad placement (of PhilHealth) is that they’re going to just raise it before the courts, let the courts decide,” Lacierda said.

“There is a process. There is a notice of disallowance, either you agree or you disagree, there is a right to question that finding. So I think they are going through the legal process... the courts will resolve this issue,” he added.

At present, GOCCs like PhilHealth cannot raise compensation, bonuses and allowances because of a moratorium issued by President Aquino through Executive Order No. 7, according to Governance Commission for GOCCs (GCG) chairman Cesar Villanueva, who holds a Cabinet rank.

But PhilHealth was citing former President Gloria Macapagal-Arroyo’s approval for them to exercise autonomy in determining their compensation framework since 2007, which was also presented to COA. “This is a carryover,” Villanueva told a press briefing last Friday.

“And as you know, PhilHealth president, Attorney Alex Padilla, has issued a press statement that they will defend such legal position all the way to the Supreme Court,” Villanueva added.

The GCG is an oversight and policymaking body in charge of GOCCs. The agency was created in October 2011, following controversies over hefty bonuses received by GOCC officials in the past administration.

Villanueva also cited a principle in both public and private sectors on “non-diminution of benefits” that were already there when the new administration came in.

“In other words, once it has been granted and there’s every legal indication that it has been granted legally, which is the position of PhilHealth because there’s an OP (Office of the President’s) approval that they had (during the time of Arroyo). They don’t want to undermine that principle, the doctrine is... the rank-and-file will rebel because that is already there.  They’ve been enjoying it for more than six years,” he explained.

Villanueva also clarified that the GCG’s task is only to provide a benchmark for the emoluments of GOCC officials and employees to avoid excesses of perks like in past administrations.

“We look at the GOCC sector and determine what are the proper rates,” he said, adding that this would mean “the proper mix of compensation and performance incentive.”

Villanueva disclosed a benchmark for the pay scale of all GOCC personnel had already been made, but its approval by President Aquino was sidelined due to the focus on the calamities the country suffered in late 2013.

“We were hoping to roll that out through presidential approval before the year ended but things happen. We have had disasters,” Villanueva said.

“One of our major mandates is to remedy that so that there is uniformity within the GOCC sector. That mandate appears in the approval by the President of a compensation and position classification system (CPCS) that will cover all GOCCs.

“Once the CPCS comes into play, it has been vetted properly, it has been compared with NGO salaries, and it has been compared with private sector salary. This will now bind all of the GOCCs,” he added.

But Villanueva admitted that it would not automatically invalidate the non-diminution of benefits rule.

He said the benefits and bonuses that continued over from the Arroyo administration could no longer be decreased for those currently in position. It is only when the posts are vacated and occupied by new people that the new compensation as dictated by the current government can be applied.

However, he said those found to have no legal basis for the release of their bonuses could be demanded by COA to pay the money back.

“We would like to say that we are not here to defend the GOCCs against COA findings, far from it. In fact, when we are constituted, we actually met with the chairperson and the commissioners to tell her that one of the things we intend to do is that when COA issues notice of disallowances or audit observation, we made sure that we would bring it to the governing boards,” Villanueva added.