There has not been enough realization of the important role of the Governance Commission for GOCCs (GCG) in implementing reforms in our government-owned and -controlled corporations (GOCCs), so we continue to call attention to the accomplishments so far of this government agency. The GOCC sector, after all, represents P6.1 trillion of assets and P2.8 trillion of net worth (as of 2014). It’s the GCG that oversees, monitors and evaluates GOCCs (108 of them, as of mid-2016), exercising these functions on behalf of the State as owner.
One of the more challenging tasks that the GCG embarked on is to introduce and engender a performance-oriented culture in the GOCC sector. This objective was driven by the scandalous abuses of self-compensation and mismanagement committed by certain GOCCs, which led, in fact, to the enactment of the law, the GOCC Governance Act of 2011.
After an accelerated study and preparation, the GCG established in 2013 the Performance Evaluation System (PES), backed by a corresponding Performance-Based Bonus and Incentive System. “The PES allows the Governance Commission to assess the operations of GOCCs,” GCG Director Rybigael L. Lao explains, “and utilize such evaluation in determining the eligibility of GOCCs for their bonus for the year. Concretely, the PES is pursued through annual Performance Agreement Negotiations [PAN] between the GCG and the Governing Boards and Management of GOCCs, which ultimately lead to the establishment of the GOCCs’ Performance Scorecards.”
If this sounds a bit tedious and complicated, it is. But this was the rational way to do away with, as Lao comments, “the unbridled Board autonomy” that GOCCs exercised to disburse all manner of remuneration so misaligned with the national government budget system. The result was to have varying budget systems among GOCCs, “hindering comparative analysis and effective oversight over the budgets of GOCCs.”
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