The Governance Commission for Government-Owned and -Controlled Corporations said Monday it will supervise United Coconut Planters Bank as a state-run company pending a Supreme Court order restraining the bank’s privatization.
The GCG said with the effectivity of the temporary restraining order against the UCPB’s privatization, the agency would begin regulating the bank as a GOCC following the Republic Act 10149, or the GOCC governance Act of 2011.
The SC issued the TRO on June 30 last year putting on hold the implementation of executive orders 179 and 180 signed by President Benigno Aquino III on March 2015.
President Aquino approved the privatization of the bank and the reconveyance of about P74.3 billion in coco levy funds to the government.
The court issued the order on the petition filed by the Confederation of Coconut Farmers’ Organizations of the Philippines Inc., which alleged that the privatization would deny the right of the coconut farmers over the coco levy funds.
UCPB was originally under the supervision of the Presidential Commission on Good Government when the agency was still litigating matters involving the bank.
President Aquino approved the bank’s privatization following a seperate Supreme Court ruling on Jan 24, 2012 declaring UCPB a GOCC.
The GCG said until the privatization was implemented, UCPB would remain a GOCC that must comply with the corporate governance requirements of R.A. No. 10149.
“The members of the bank’s governing board will be appointed by the President of the Philippines to the extent of the State’s ownership and its performance will be closely monitored and evaluated by the Governance Commission,” the GCG said.
“In particular, regulation will focus on safeguarding the interests of coco farmers, among others,” it said.
The compensation of UCPB personnel will also be regulated under the Compensation and Position Classification System for GOCCs once approved by the President.
The bank will also have to comply with the Government Procurement Reform Act and will be covered by the examination of the Commission on Audit like all other GOCCs. .
The regulation of UCPB as a GOCC will be done gradually over a two-year transition period since UCPB has been operating as a private corporation.
The transition period aims to allow a possible resolution of the TRO before implementing major changes in the internal governance set-up of UCPB.