Ochoa: GOCC law strengthens fiscal prudence and discipline in governance

Press Release
June 6, 2011

MALACAÑANG  –  Executive Secretary Paquito N. Ochoa Jr. said on Monday that the GOCC Governance Act of 2011 institutionalizes the administration's policy for fiscal prudence and discipline in government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs) that will protect public coffers and ensure delivery of social services to the people.

Ochoa said the enactment of the GOCC Governance Act of 2011 or Republic Act 10149, which President Benigno Aquino III signed earlier, ushers in a new era of running the affairs of the state in terms of fiscal discipline.

"The President certified this measure as urgent because he wants GOCCs and GFIs to remain true to their purpose, that of earning additional income for government coffers. Such income can be used to fund government programs and projects for our people rather than being used for excessive pay and perks and benefits of GOCC and GFI officials and personnel," Ochoa said.

"The passage of the GOCC Governance Act of 2011 is a significant milestone as this is the first Republic Act signed into law by the President as chairman of the Good Governance and Anti-Corruption Cluster," the Executive Secretary noted.

Ochoa explained that while the Chief Executive had earlier issued Executive Order No. 24 to rein in the excessive pay and perks of GOCC and GFI executives, the new law puts in place regulations that ensure that compensation rates for board members and trustees will be reasonable.

Ochoa underscored the crucial role GOCCs and GFIs play as tools for economic growth and development, and with the new law, their operations will be aligned with the national policies and program, and their assets and resources used efficiently.

"The impact of this measure will be felt not only during this administration but also in the years to come. This represents the kind of far-reaching governance reforms the President is resolved to implement during his term," Ochoa said.

Under the new law, the Governance Commission for GOCCs (GCG) will be created attached to the Office of the President to serve as an advisory, monitoring and oversight body. Among GCG's key responsibilities are to evaluate the performance and relevance of the state firms, and reorganize, merge and streamline the operations and structures of the GOCCs. It can also recommend the abolition or privatization of any state-owned company.

The GCG is also tasked to conduct a compensation study and develop a Compensation and Position Classification System and Fit and Proper Rule to maintain the quality of management of the GOCCs and GFIs.