The government owned and controlled corporations (GOCC) are self-sufficient enterprises that provide goods and services at reasonable cost in areas where private providers either will not or should not enter. These were created under Section 2 of Presidential Decree 2029. Its review represents the number 9 promise of President Benigno Aquino III during the campaign period.
The GOCCs/GFIs are under oversight responsibility of the Office of the President
To-date there are 143 GOCCs operating, and 14 of these are losing money for years.
All under-performing GOCCs received a cut in their 2011 budget allocation. [Source: Norman Bordadora: "Aquino gov't gives zero budget to anti-smuggling, anti-graft bodies," Philippine Daily Inquirer 31 August 2010]
GOCCs on the Red
The Senate Development Budget Coordinating Committee uncovered on 13 September 2010 that 43 percent of our national debt came from the GOCCs. The government is monitoring 14 GOCCs that are in the red, namely: Philippine Economic Zone Authority (PEZA), Local Water Utility Administration (LWUA), Light Rail Transit Authority (LRTA), Metropolitan Waterworks and Sewerage System (MWSS), National Development Corp. (NDC), National Electrification Administration (NEA), National Food Authority (NFA), National Housing Authority (NHA), National Irrigation Administration (NIA), National Power Corp. (NPC), Philippine National Oil Co. (PNOC), Philippine National Railways (PNR), Philippine Ports Authority (PPA) and the Home Guaranty Corp. (HGC). [Source: Marvin Sy: "Senate probe reveals: HGC, not city government, owns Manila City Jail," The Philippine Star 14 September 2010]
To-date there are 143 GOCCs operating, and 14 of these are losing money for years.
IMPORTANT MEASURES
2011 National Expenditure ProgramAll under-performing GOCCs received a cut in their 2011 budget allocation. [Source: Norman Bordadora: "Aquino gov't gives zero budget to anti-smuggling, anti-graft bodies," Philippine Daily Inquirer 31 August 2010]
GOCCs on the Red
The Senate Development Budget Coordinating Committee uncovered on 13 September 2010 that 43 percent of our national debt came from the GOCCs. The government is monitoring 14 GOCCs that are in the red, namely: Philippine Economic Zone Authority (PEZA), Local Water Utility Administration (LWUA), Light Rail Transit Authority (LRTA), Metropolitan Waterworks and Sewerage System (MWSS), National Development Corp. (NDC), National Electrification Administration (NEA), National Food Authority (NFA), National Housing Authority (NHA), National Irrigation Administration (NIA), National Power Corp. (NPC), Philippine National Oil Co. (PNOC), Philippine National Railways (PNR), Philippine Ports Authority (PPA) and the Home Guaranty Corp. (HGC). [Source: Marvin Sy: "Senate probe reveals: HGC, not city government, owns Manila City Jail," The Philippine Star 14 September 2010]
ANOMALIES
OverviewOn 8 September 2010, the Senate Finance Committed (headed by Senator Franklin Drilon) discovered that GOCCs still owe the national government P24 billion from their P74 billion total earnings in 2008 alone. Apparently this is the tip of the iceberg of excessive self-granted bonuses of members of their board of directors. An otherwise profitable government business took losses as these companies spent more than what they earn on executive perks, which in Sen. Drilon's word are in a "scandalous" level. [Source: Mario B. Casayuran: "143 GOCCs owed GOv't P24 Billion," Manila Bulletin 8 September 2010]
Power Sector Assets and Liabilities Management Corporation (PSALM)
MISHANDLING OF NAPOCOR PRIVATIZATION ASSETS SALE INCOME
13 September 2010---The PSALM generated $10.65 billion from the privatization of Napocor assets. In 2009, it obtained $2.2 billion loans and another P30 billion loan in 2010. Despite these financial resources, the House Committee on Appropriations uncovered that PSALM only paid a total of $4 billion to service the Napocor debts.
The EPIRA Law mandates that all proceeds from teh sale of Napocor assets should be used in paying its debts so that the liabilities of Napocor will not be souldered by the consumers by way of increases in electricity rates, said Eastern Samar Rep. Ben Evardone.
The Committee also learned that PSALM paid $2.1 million (approx. P98.7 million) for its $300-million Principal-Only-Swap (POS) transaction with the bankrupt Lehman Brothers Corp. PSALM OIC Maria Luz Caminero confirmed the transaction.
Status: Investigation, ongoing. [Source: Charissa M. Luchi: "PSALM Invested $2.1 Millioni in Lehman Brothers," Manila Bulletin 13 September 2010]
Local Water Utilities Administration (LWUA)
VERY HIGH CHAIRMAN PERKS
17 August 2010---A Senate investigation launched today reported that LWUA is losing money every year, and yet LWUA chairman Prospero Pichay Jr. reportedly earned around P 450,000 a month in perks alone both as head of LWUA and director of its subsidiary, LYWUA Consult. He receives P 250,000 monthly allowance form LWUA, and another P 200,000 from LWUA Consult. And supposedly can spend another P 2.5 million in intelligence funds.
Pechay appointed himself as director of LWUA Consult, which reportedly handle the same functions and job loads before it started providing monthly allowances to its officials.
Action taken: LWUA employee Rusty Tutol brought the anomaly for quick resolution. [Henry Omaga-Diaz: "Pichay under fire for fat paycheck," abs-cbnNEWS.com 17 August 2010]
Metropolitan Waterworks and Sewerage System (MWSS)
MISHANDLING OF NAPOCOR PRIVATIZATION ASSETS SALE INCOME
The EPIRA Law mandates that all proceeds from teh sale of Napocor assets should be used in paying its debts so that the liabilities of Napocor will not be souldered by the consumers by way of increases in electricity rates, said Eastern Samar Rep. Ben Evardone.
The Committee also learned that PSALM paid $2.1 million (approx. P98.7 million) for its $300-million Principal-Only-Swap (POS) transaction with the bankrupt Lehman Brothers Corp. PSALM OIC Maria Luz Caminero confirmed the transaction.
Status: Investigation, ongoing. [Source: Charissa M. Luchi: "PSALM Invested $2.1 Millioni in Lehman Brothers," Manila Bulletin 13 September 2010]
Local Water Utilities Administration (LWUA)
VERY HIGH CHAIRMAN PERKS
17 August 2010---A Senate investigation launched today reported that LWUA is losing money every year, and yet LWUA chairman Prospero Pichay Jr. reportedly earned around P 450,000 a month in perks alone both as head of LWUA and director of its subsidiary, LYWUA Consult. He receives P 250,000 monthly allowance form LWUA, and another P 200,000 from LWUA Consult. And supposedly can spend another P 2.5 million in intelligence funds.
Pechay appointed himself as director of LWUA Consult, which reportedly handle the same functions and job loads before it started providing monthly allowances to its officials.
Action taken: LWUA employee Rusty Tutol brought the anomaly for quick resolution. [Henry Omaga-Diaz: "Pichay under fire for fat paycheck," abs-cbnNEWS.com 17 August 2010]
Metropolitan Waterworks and Sewerage System (MWSS)
ILLEGAL TOP MANAGEMENT PERKS
WATER CHARGES FOR PROJECTS NOT IMPLEMENTED
WATER CHARGES FOR PROJECTS NOT IMPLEMENTED
BONUSES
25-Month Bonus. This bonuse is based on the employee's gross monthly salary but on time of its monthly salary, bringing the total compensation received to 37 months of salary in a year.
Calamity Financial/Economic Assistance. It is a one-time bonus but is equivalent to two months gross pay.
Performance Enhancement Pay. It is equivalent to a one-month gross pay, enjoyed since 2007.
CNA Incentive. It is equivalent to a one-month gross pay.
Corporate Christmas Bonus. It is given in a form of gift check initially amounting to P10,000, but later increased to P30,000.
13th Month Pay with Cash Gift. It is gross basic pay plus P5,000 cash gift.
Other Bonuses. Educational Assistance, OGCC Incentive, Financial Assistance, Efficiency Incentive Bonus, Traditional Christmas Bonus, Rate-Rebasing Bonus, Privatization Anniversary Bonus, Productivity Incentive Bonus, Year-End Financial Assistance, Mid-Year Financial Assistance, and Anniversary Bonus.
ALLOWANCES
Family Day Allowance. This allowance granted to each employee and officer came from the required five-percent share of its net income intended for "gender advocate and development" program.
Other Allowances. PERA and Adcom, Rata, Rice and Meal Allowance, Longevity Allowance, Children's Allowance, and Hazard Pay.
Its chairman of the board Oscar Garcia received P5.4 million alone for attending 47 meetings (usually five meetings in a month). [Source: Maila Ager: "Water execs admit 25-month bonuses," INQUIRER.net 31 August 2010; "Water execs willing to cut 13 bonuses," INQUIRER.net 21 August 2010]
10 August 2010, Tuesday---The CoA released a decision declaring the amount representing medical allowances, anniversary bonuses and other financial benefits were illegal and should be returned to the government. This decision pertains to the appeal of MWSS Administrator Orlando Honrade to the 2002 CoA Legal and Adjudication Office decision disallowing the payment of P 8,740,837.56 benefits to MWSS employees in 2000. These concerned benefits include the--2000 mid-year and year-end fiancial assistance/Bigay Pala anniversarry bonus, medical allowances, productivity incentive bonus, and representation and transportation allowances.
CoA said these financial assistance and bonuses did not have the approval of the Office of the President.
Moreover, in its annual audit report on MWSS finances in 2008, CoA confirmed that the board of trustees has made MWSS a virtual milking cow. It found at least nine irregularities in the disbursement of funds, mostly expenditures covering unauthorized incentives and perks, including expenses for executive medical check up, for its officials and employees. [Source: Ben Rosario: "Return P8.7-million illegal perks, CoA tells MWSS," Manila Bulletin 10 August 2010]
ILLEGAL INSERTION OF WATER CHARGES
8 September 2010, Wednesday---The Senate Finance Committee uncovered that MWSS had been allowing its two concessionaires--Manila Water Company (MWC) and Maynilad Water Services Inc (MWSI)--to finance improvement projects that have yet to be implemented. Metro Manila consumers also paid billions of pesos on charges supposedly meant for earthquake contingencies. It also allowed the collection of 10 percent environmental fee even if they are only serving 10 of Metro Manila with the sewerage system.
These charges resulted to exhorbitant increase in water rates--from P4.02 pcm in 1997 to P30.34 pcm today in MWC; from P7.21 pcm to P30.34 in teh same period in Maynilad. The rationale used was the so-called rate rebasing scheme that allowed charges to recover past expenditures and provide sufficient funding for their future projects, that MWSS approved. [Source: Mario B. Casayuran: "143 GOCCs owe Gov't P24 Billion," Manila Bulletin 8 September 2010]
ILLEGAL INSERTION OF WATER CHARGES
8 September 2010, Wednesday---The Senate Finance Committee uncovered that MWSS had been allowing its two concessionaires--Manila Water Company (MWC) and Maynilad Water Services Inc (MWSI)--to finance improvement projects that have yet to be implemented. Metro Manila consumers also paid billions of pesos on charges supposedly meant for earthquake contingencies. It also allowed the collection of 10 percent environmental fee even if they are only serving 10 of Metro Manila with the sewerage system.
These charges resulted to exhorbitant increase in water rates--from P4.02 pcm in 1997 to P30.34 pcm today in MWC; from P7.21 pcm to P30.34 in teh same period in Maynilad. The rationale used was the so-called rate rebasing scheme that allowed charges to recover past expenditures and provide sufficient funding for their future projects, that MWSS approved. [Source: Mario B. Casayuran: "143 GOCCs owe Gov't P24 Billion," Manila Bulletin 8 September 2010]
