THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
Fs - 
S. No. 
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In recent days, much displeasure has emanated from the public disclosure of 
GOCC officials' salaries and wages - particularly at a time when the current 
fiscal crisis experienced by the country is attributed primarily to gross 
mismanagement of GOCC finances and operations. 
Outstanding public sector debt by end 2003 was already PhP5.9 trillion. Of the 
total public sector debt, GOCCs' share was PhP1.6 trillion. 
National 
government debt -was P4.06 trillion. This NG debt figure further includes the 
debts of GOCCs it has assumed. 
Of the 14 GOCCs monitored by the government, only 4 posted surpluses by 
end 2003. Even then, their aggregate surplus is 2.41% of the aggregate deficit 
of the other 10 GOCCs. 
A Commission of Audit report for 200 1 and 2002 yielded annual salary figures 
of GOCC heads at PhP 9.0 million or as much as Php 750,000.00 monthly 
salary for an individual. 
The National Power Corporation (NPC)'s President and Chief Executive fficer 
receives a monthly salary of PhP 107,000.00, excluding other allow 
ces. 
Napocor has a 2003 debt stock figure of P1.4 trillion, and a financing deficit 
(total receipts net of current .and capital expenditures) of PhP. 47.62 bill'on by 
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end 2003. 
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Defenders of GOCC salaries explain that the high rates serves as incentives for 
private sector managers to join government. 
This does the Filipino an 
injustice; public sector work involves commitment to serve the country above 
all. 
This proposed Bill seeks to address the disadvantages brought about by the, 
unchecked high GOCC wage rates. This Bill effectively repeals in art the GOCC 
charters, particularly the relevant portions establishing their current salary 
structures. No government official should receive a salary higher than that of 
the President of the Republic. 
Other remunerations may be considered 
pending the financial performance of the GOCC managed and upon approval of 
the supervising Department Secretary in consultation with the Department of 
Budget and Management Secretary. 
Early passage of this bill is earnestly sought. 
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THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
Pf fa 
e. -, 
S. No. 
INTRODUCED BY HON. MANUEL B. VJLLAR, J R .  
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-PEALING 
RELEVANT ~ ~ O ~ S I O ~ S  
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AND CONTOLLED C O R ~ O ~ T I ~ N  
G ~ N T I N G  
A B S ~ ~ U T E  
A 
DETERMINE SALARIES AND WAGES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. - This Act shall be known as the “GOCC Salary Cap of 
2004.” 
SECTION 2. Statement of Policy - It is the policy of the State to promote the 
time hon0j.e.d principle ,that public office is a public trust. 
Public officers and 
employees must at all times be accountable to the people, serve them with utmost 
responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and 
lead modest lives. The foregoing applies to all public servants, elected or otherwise, 
Government Owned and Controlled Corporations (GOCC) and government financial 
institutions included. In line with this, the State shall endeavor to abandon salary 
structures abhorrent to the very essence of a public trust. 
SECTION 
3. Coverage. - The provisions of this Act shall a ply to all 
OCCs 
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and 
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positions, on full or part-time basis, now existing or hereafter created in 
government financial institutions. 
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The term “CCOCC and government financial institutions” shall include all 
corporations and financial institutions owned or controlled by the National 
Government, whether such corporations and financial institutions perform 
governmental or proprietary functions. 
SECTION 4. Salary Standardization; Exemption.- The rates of pay of all officers 
and employees of GOCC’s and government financial institutions shall be governed by 
the provisions of Republic Act No. 6758, as amended, otherwise known as the 
“Compensation and Classification Act of 1989. Provided, that GOCCs and government 
financial institutions whose respective charters provide for exemption from the 


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as closely as possible with the principles under Republic Act No. 6758, as 
Provided, finally that no GOCC or government financial institution officer or 
shall receive a salary higher than that of the President of the Republic. 
amended. 
employee 
For the purpose of this Act, Miscellaneous Allowance shall include Inflationary 
Allowance, Rice Allowance, Clothing Allowance, Grocery Allowance, Longevity 
Allowance, Medical Assistance and such other similar allowances and benefits, 
monetary or otherwise, not otherwise related to the productivity or performlance of the 
GOCC or government financial institution or its officers and employees. 
SECTION 6. Other Remunerations. - Remuneration other than those covered by the 
preceding sections may be considered pending the financial performance of the GOCC 
or government financial institution managed. 
Said additional remuneration shall 
require the approval' of the supervising Department Secretary in consultation with the 
Secretary.Qf.the DepaFtment of Budget and Management (DBM). 
SECTION 7. - Honoraria and Per Diem.- Honoraria and per diem granted to all 
government officers and employees, GOCC and government financial institutions 
included, who sit in their ex-officio capacity as board members to any GQCG or 
government financial institution shall inure as income to the respective, agencies to 
which said government officers and employees belong. 
SECTION 8. Salaries of Incumbents. - Incumbents of positions present y receiving 
salaries and additional compensation/fringe benefits and other emolu ents, . the 
aggregate of which exceeds the standardized salary rate as herein presc I' 
ibed, shall 
continue to receive such excess compensation, which shall be referred to as transition 
allowance. The transition allowance shall be reduced by the amount of salary 
adjustment that the incumbent shall receive in the future. 
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The transition allowance referred to herein shall be treated as part of the basic 
salary for purposes of computing retirement pay, year-end bonus and other similar 
benefits. 


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SECTION 9. Implementing Rules and Regulations. - The DBM shall, within 
three (3) months from the effectivity of this Act shall formulate its Implementmg Rules 
and Regulations (IRR). 
SECTION 10.Repealing Clause. - GOCC and government financial institution 
Charter provisions granting absolute authority on salary structure of said GOCC or 
government financial institution are hereby expressly repealed. 
All laws, degrees, orders, rules and regulations, and all. other iss 
parts thereof, which are inconsistent with this Act are hereby repealed. 
SECTION 11. Separability Clause. - If any part or provisions of this Act is held 
unconstitutional or invalid, other parts of provisions hereof which are not affected 
thereby shall continue to be in full force and effect. 
SECTION 12. Effectivity. This Act shall take effect after fifteen (15) days 
following its complete publication in at least two (2) newspapers of general circulation. 
Approved,