Press Release
October 5, 2011


Republic Act 10149, or the GOCC Governance Act of 2011, principally authored by Senator Franklin Drilon, has recently been cited by credit rating agencies as a landmark piece of legislation that would instill discipline among state entreprises.

Finance Secretary Cesar Purisima and Bangko Sentral ng Pilipinas Governor Amando Tetangco met with officials of credit rating agencies and discussed the law at the sidelines of the meetings of the International Monetary Fund and World Bank held in Washington, DC last month.

"I authored this law to curb the abuses that hounded the governing boards of government-owned or controlled corporations for many years. Now, we can see the light of day in terms of good fiscal management and make GOCCs as significant tools for economic development," said Drilon.

During the meeting, Tetangco cited the benefits of the GOCC Governance Act, saying its implementation would reduce, if not totally eliminate leakages on the part of state-owned enterprises. He said the law will certainly improve business confidence in the country.

Drilon, chairman of the Senate Finance Committee that conducted an investigation on the excessive pay and perks being enjoyed by the board of directors and trustees of state enterprises, authored the law that imposes a limit on per diems, allowances and bonuses that directors and trustees receive.

Drilon had authored the legislation to address the seeming lack of sustained effort of the government to closely monitor the performance of GOCCs. He said the law was passed to renew the Philippine's commitment for an improved corporate governance in the public sector.

The law creates a Governance Commission for GOCCs (GCG) which will develop a new position and classification system that will apply to all officers and employees of GOCCs, whether covered by the Salary Standardization Law or exempt from it.

The GCG is given the delegated authority of Congress to review the operations of the GOCCs so that they can determine whether the GOCCs should be abolished, merged or privatized, without prejudice to the power of Congress to reorganize a state firm.

The law, Drilon said, tracks President Aquino's reform agenda and anti-corruption campaign. The President even certified the bill as an urgent administration measure.

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