Making the headache go away

The View from Taft

BusinessWorld

October 30, 2013

EVERY NOW and then, public outrage over compensation at high places in government corporations and agencies erupts. It was the Government Service Insurance System (GSIS) in the middle of a pay storm in 2010 when it was reported that the president and board members of the state pension fund were each earning at least P6 million a year. Around the same time, the media reported Senate findings that the board of trustees, officials, and employees of water utility Metropolitan Waterworks and Sewerage System (MWSS) received close to P400 million in bonuses and allowances the previous year. President Aquino found the MWSS situation so bothersome that he singled out the utility as an example of bad pay practices in his 2010 State of the Nation Address.

In 2011, the government responded by passing RA 10149 or the GOCC (Government-owned and -controlled corporation) Governance Act, which created the Governance Commission for GOCCs (GCG). The President explained that the new law “serves as the standard for integrity, credibility, and accountability in the management of our GOCCs.” The GCG is attached to the Office of the President and has broad oversight powers over government corporations, including over all forms of compensation for executives and board members.

Recently, in deja vu fashion, the leadership of the MWSS and Social Security System (SSS) found themselves in the compensation hot seat over bonuses granted to board members. The head of the pension fund has defended the bonuses, about P1 million each, as legal and moral. Malacañang has also defended the bonuses, saying they are within the parameters of the law and are justified by the financial conditions of these entities.

The columnists and pundits have weighed in, and they see the bonus issue differently, with some saying that such bonuses are legally deserved rewards for performance and others insisting that they are grossly inappropriate. Still others see the issue as merely one of bad timing because of the public’s current furor over allegations that the people’s money is being misused by fake NGOs to fund ghost projects.

With RA 10149in place and a newly created Commission overseeing the pay situation like a hawk, why won’t the government’s headache about corporate top-level pay go away? Why does President Aquino, busy attending to calamities and other pressing matters of State, have to spend time and precious political capital defending the pay of board directors? Aren’t these people, experienced as they are and having the probity and integrity expected of directorship, capable of making the discerning decisions that will stand the scrutiny of media and the people?

I think that RA 10149 means well and is a definite improvement over the past situation in which government corporations had practically complete freedom over top-level pay -- without limits and without regard for the corporation’s financial condition. But it should become clear to Malacañang and its chosen government board directors by now that the people’s expectation is much higher than what the law requires. The people consider the law as the moral floor below which no one in a government position should fall. But the law is hardly the moral standard that can be used to justify pay, especially for board directors -- who are expected to be as much a beacon of selfless public service and delicadeza (sense of propriety) as, well, President Aquino himself.

Perhaps the law will need fine-tuning to reflect this higher moral standard, though given its newness, its earnest implementation should be the first priority. The required posting of total compensation packages for board members in the GOCC website seems to have been overlooked. This needs to be rectified quickly.

More importantly, government board directors will need to rise above the law to set the moral tone at the very top of government corporations. They need to pursue the Constitutional principle of public service as a public trust to the highest level and to embody President Aquino’s doctrine of walang wang-wang (no sirens) to its logical implication. They should simply accept the per diems and forego the bonuses that the public understandably perceives as self-serving. Only then will the headache go away, replaced by the people’s admiration and gratitude.