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Title SALIENT FEATURES OF THE GOCC GOVERNANCE ACT (R.A. 10149) Comm. Rainier B. Butalid 7 February 2013.

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Presentation on theme: "Title SALIENT FEATURES OF THE GOCC GOVERNANCE ACT (R.A. 10149) Comm. Rainier B. Butalid 7 February 2013."— Presentation transcript:

1 Title SALIENT FEATURES OF THE GOCC GOVERNANCE ACT (R.A ) Comm. Rainier B. Butalid 7 February 2013

2 2 Slide Title GOCC SECTOR PROFILE Size of Philippine SOE Sector 1.There are currently 158 SOEs 84 Chartered 74 registered under the SEC Assets Base: Total Assets have reached over P4.9 Trillion or US$113.4 Billion

3 3 Slide Title GOCC SECTOR PROFILE Size of Philippine GOCC Sector SECTOR 2010 TOTAL ASSETS Government Financial Institutions 55,465,413,422 Social Services and Housing 1,442,082,924 Land and Water Resources 5,531,355,722 Power 39,792,630,457 Support Services 94,003,678 Commercial, Trade and Tourism 1,151,889,102 Transport, Infra and Communications 9,909,122,409 TOTAL US$ 113,386,497,714

4 4 Slide Title Government Financial Support to GOCCs Takes Three (3) Forms: B. SUPPORT2011 AMOUNT Subsidy1,248,953,488 Equity67,186,047 Net Lending419,883,721 TOTALUS$ 1,736,023,256 GOCC SECTOR PROFILE

5 5 Slide Title GOCC GOVERNANCE ACT OF 2011 A N A CT TO P ROMOTE F INANCIAL V IABILITY AND F ISCAL D ISCIPLINE IN G OVERNMENT -O WNED OR – C ONTROLLED C ORPORATIONS AND TO S TRENGTHEN THE R OLE OF THE S TATE IN ITS G OVERNANCE AND M ANAGEMENT TO M AKE T HEM M ORE R ESPONSIVE TO THE N EEDS OF P UBLIC I NTEREST AND FOR O THER P URPOSES

6 6 Slide Title COVERAGE Applicable to all GOCCs, GICPs/GCEs, and government financial institutions, including their subsidiaries, but excluding: (a) The Bangko Sentral ng Pilipinas; (b) State Universities and Colleges; (c) Cooperatives; (d) Local Water Districts; (e) Economic Zone Authorities; and (f) Research Institutions.

7 7 Slide Title THRUSTS OF THE NEW PARADIGM 1.Directors and Officers of GOCCs as fiduciaries of the State 2.Standard of Extraordinary Diligence 3.One (1) Year Term; with Holdover 4.Clear accountability of the CEO/Management to the Governing Board 5.Uniform Compensation System for all GOCCs 6.Power to Restructure the GOCC Sector

8 8 Slide Title MANDATES & PROGRAMS A.Rationalization of the Government Corporate Sector B.Compensation and Position Classification System (CPCS) C.Performance Evaluation Systems (Performance Scorecards) D.Shortlisting of Prospective Appointive Directors in GOCCs

9 9 Slide Title RATIONALIZING THE GOCC SECTOR The GCG has the power and function to ascertain whether a GOCC should be: (a)Reorganized; (b)Merged; (c)Streamlined; (d)Abolished; or (e)Privatized

10 10 Slide Title RATIONALIZING THE GOCC SECTOR (i)Implement the reorganization, merger or streamlining of the GOCC, unless otherwise directed by the President; (ii)Recommend to the President the abolition or privatization of the GOCC, and upon approval of the President, implement such abolition or privatization.

11 11 Slide Title COMPENSATION AND POSITION CLASSIFICATION SYSTEM (CPCS) Shall apply to all officers and employees of GOCCs whether under the Salary Standardization Law or exempt therefrom. Any law to the contrary notwithstanding, no GOCC shall be exempt from the coverage of the CPCS.

12 12 Slide Title COMPENSATION AND POSITION CLASSIFICATION SYSTEM (CPCS) The Charters of each GOCC to the contrary notwithstanding, the compensation, per diems, allowances and incentives of the members of the Board of Directors/Trustees of GOCCs shall be determined by the GCG.

13 13 Slide Title PERFORMANCE EVALUATION SYSTEM Establish the performance evaluation systems which shall apply to all GOCCs. Performance Scorecards containing the following perspectives: (a) Social Impact (b) Stakeholders (c) Finance (d) Internal Process (e) Learning & Growth

14 14 Slide Title PERFORMANCE EVALUATION SYSTEM The GCG may recommend to the President, incentives for certain position titles in consideration of the good performance of the GOCC. GCG Memo. Circ “Interim Performance-Based Bonus (PBB) for GOCCs Covered by R.A ”

15 15 Slide Title SHORTLISTING An Appointive Director shall be appointed by the President of the Philippines from a shortlist prepared by the GCG. GCG Memo. Circ “Fit and Proper Rule for Appointive Directors and CEOs of GOCCs”

16 16 Slide Title O RGANIC D OCUMENTS 1.Ownership and Operations Manual for GOCCs 2.Code of Corporate Governance for GOCCs 3.The Fit and Proper Rule

17 17 Slide Title ORGANIC DOCUMENTS 1.Ownership and Operations Manual for GOCCs a.Provides for the Governing Principles and Objectives of the State as an “Active Owner” of the GOCCs; b.Defines the Role and Relationship of the State, its agencies and instrumentalities, vis-à-vis the GOCCs as “significant tools for national development”; c.Provides for the roles and responsibilities of GOCCs and the Primacy of the Boards of Directors/Trustees in the governance of the GOCCs; d.Provides Guidelines the in the Monitoring and Evaluation of the GOCCs and their Governing Boards; e.Provides for the Policy Framework for Tasking GOCCs to Undertake Non- Commercial Activities.

18 18 Slide Title ORGANIC DOCUMENTS 2.Code of Corporate Governance for GOCCs a.The Role and Responsibilities of the Governing Boards, and the Individual Directors; b.Disclosure and transparency requirements; c.Code of Ethics of Directors and Officers; d.Creation of Board committees and similar oversight bodies; e.Providing for an Integrated Corporate Reporting System; and f.CSR Statement and the Role of Stakeholders.

19 19 Slide Title ORGANIC DOCUMENTS 3.Fit and Proper Rule a.Primary mechanism through which the Commission ensures the integrity and competence of Directors/Trustees of GOCC Boards b.Codification of tried and tested standards already implemented by other agencies, with the qualification that the highest standard shall apply in the event more than one apply in a given situation

20 20 Slide Title COORDINATION WITH AGENCIES Office of the Ombudsman All members of the Board, CEO, and officers of GOCCs shall be qualified by the Fit & Proper Rule Persons with derogatory records as certified by the Ombudsman shall be temporarily disqualified from appointment in a GOCC. (GCG Memo. Circ. No )

21 21 Slide Title COORDINATION WITH AGENCIES Commission on Audit (COA) Restitution by a member of the Board or Officer of a GOCC shall be made upon determination and report of the COA. The Chairman of the GCG may direct at any time a special COA audit of any GOCC. Permanent disqualification from appointment in a GOCC by virtue of a final and executory Notice of Disallowance. Directors and Officers Liability Insurance (DOLI) (GCG Memo. Circ. No )

22 22 Slide Title COORDINATION WITH AGENCIES Civil Service Commission (CSC) The CPCS shall consist of classes of positions grouped into such categories as the GCG may determine. Involves the allocation of proper position titles and salary grades.

23 23 Slide Title COORDINATION WITH AGENCIES Securities and Exchange Commission (SEC) The SEC shall not register the articles of incorporation and by-laws of a proposed GOCC or Related Corporation, unless the application for registration is accompanied by an endorsement from the GCG stating that the President has approved the same.

24 24 Slide Title Rm 479, Mabini Hall, Malacañang Compound, Manila, Philippines 1005 Tel No. (632) loc 4940/4970 Fax No. (632) loc 4719


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