Noynoy mulls abolition of NFA, other GOCCs

MANILA, Philippines - The administration is mulling the abolition of the National Food Authority (NFA)and other non-performing government-owned and controlled corporations (GOCCs).

A briefer prepared by the Department of Budget and Management showed that budget allocations for GOCCs for next year were cut by as much as P35.8 billion, from P59.1 billion this year.

The administration is no longer keen on backing the programs of GOCCs in the red, among them the NFA, the Light Rail Transit Authority and the Metro Rail Transit Corp., according to the document.

“The support for corporations will decline significantly by about half, with the rethinking of national government support to the programs of problematic GOCCs like the NFA, LRTA, MRTC and other GOCCs,” read the DBM briefer.

The NFA’s P8-billion rice subsidy for rice procurement was already removed and will be diverted to the rice subsidies for the poor program of the Department of Social Welfare and Development, according to the document.

“We can reduce the tax subsidies for rice importation given the plan to deregulate rice importation to the private sector and let NFA take care only of buffer stocking and regulation,” read the document.

Presidential spokesman Edwin Lacierda said the Aquino administration is determined to cut the bonuses, perks and privileges of GOCC executives, and put a uniform cap on their salaries and other emoluments.

“This administration is serious about cutting fat – that’s part of our reform agenda,” he said.

“We’d like to promote good governance and part of it is really to determine which GOCCs are performing and which GOCCs are underperforming.”

Lacierda said the administration has no problem with the salaries and benefits of executives of GOCCs that perform well. Unlike in the case of, say MWSS, which is underperforming yet the officials get numerous perks.

“In the case of MWSS, it has heavy obligations, it is not performing well and yet officials give themselves huge bonuses,” he said in Filiino.

Drilon: Regulate GOCC wages

Sen. Franklin Drilon wants Congress to pass a law to govern the salaries and benefits of officials and employees of GOCCs.

“Our objective is to come up with a law that will provide guidelines and the mechanism by which GOCC executives can be reasonably compensated but without the possibility of the abuses that we saw, because we cannot just pay them the minimum wage,” he said.

Drilon also wants a law requiring GOCC executives to turn over to the government bonuses they receive from private companies where they sit in the board of directors.

“They are there because of the investment of the government agency, and yet the bonuses which run to millions are pocketed by these directors,” he said.

Drilon said the Senate committee on finance, which he chairs, has set public hearings on excessive salaries and benefits of GOCC executives on Tuesday next week.

“I am saying that precisely why we are having a budget hearing to find out what is the reasonable regulation that we can come up with so that while we are able, while we would have the capacity to attract the talent that would be needed to run these GOCCs, at the same time have a reasonable restriction so that there would be no abuses,” he said.

Drilon said lawmakers are looking at a general law to cover all GOCC charters.

“I am not even saying standardization because different GOCCs require different talent,” he said.

“We are just saying that we must have reasonable standards, we cannot set into law what is the salary of these people but we can delegate such authority to the president, provided that delegation of such authority will impose reasonable standards so that abuses can be prevented.”

Drilon rejected claims that the rationale for the high salaries of GOCC executives was to make them competitive with those of the private sector and prevent brain drain.

“Well, I don’t think that’s a valid reason, these are public funds,” he said.

“I’m certain that whether one would want to go abroad or not is not influenced by being able or not being able to join a GOCC.”

In a hearing last Tuesday, the Legislative Budget Research and Monitoring Office told the Senate finance committee that the projected earmarked revenue from government corporations this year amounted to P47 billion. – With Christina Mendez