President Rodrigo Duterte has suspended an Aquino administration order which mandates the implementation of a compensation and position classification system and the index of occupational services as part of efforts “to eliminate any excessive, unauthorized, illegal and/or unconscionable allowances, incentives and benefits” for state-owned corporations.
In his Executive Order No. 36 signed Friday, July 28 but released only on Monday, July 31, Duterte suspended the implementation of Executive Order No. 203, which adjusted compensations for employees of government-owned and controlled corporations (GOCCs) issued by former President Benigno Aquino III in March 22, 2016.
“When the new administration came, there was a felt need to review this so that any excessive bonuses and allowances will have to go. And it appears that some government agencies also could not comply with the requirements under EO 203, maybe for some requirements like rationalization or the budgetary requirements and so forth and so on,” Senior Deputy Executive Secretary Menardo Guevarra said in a Palace news briefing.
In the interim, the compensation framework of GOCCs, including their subsidiaries, will be covered by the new measures under EO 36, subject to the approval of the Governance Commission for GOCCs (GCG)—the central policy-making and regulatory body that monitors and oversees GOCCs' operations.
For GOCCs covered under the Salary Standardization Law, the GOCC will adopt the Modified Salary Schedule and authorized benefits.
But for those SSL-covered GOCCs who have insufficient funds, partial implementation of the Modified Salary Schedule and authorized benefits will be allowed provided that it will be at uniformed percentage across all positions for every GOCC.
Meanwhile, GOCCs exempted in the SSL may maintain their current compensation framework or adopt the Modified Salary Schedule.
SSL-exempt GOCCs which adopted the Modified Salary Schedule have limited benefits and allowances, their compensation framework subject to conversion or revision (i.e., from job grade to salary grade), and their mid-year and year-end bonuses subject to GCG guidelines.
However, authorized salaries of incumbent officers and employees and collective bargaining or negotiation agreements in the GOCC sector will not be affected.
The interim measure will be retroactive to Jan. 1, 2017.
During his State of the Nation Address last week, Duterte said that he would not approve requests to raise salaries, allowances and benefits in government companies, calling them “excessive.”
“I am not inclined to give increases right now, maybe 7 years from now,” Duterte said in his annual address to Congress.
“I expect speedy reforms along this line. We will rightsize the government. Let’s trim the excess fat and add more muscle through the expeditious passage of the act rightsizing the national government to improve public service” he said.
