Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

House Bill No.__2959

Introduced by AKBAYAN Representatives
Ibarra M. Gutierrez III and Walden F, Bello

EXPLANATORY NOTE

‘The 1987 Philippine Constitution was promulgated through the active and sovereign role
of the Filipino people. As authors, the people gave the legislature the authority to make,
alter and repeal laws with the primary limitation that the provisions of legislative

enactments are in consonant with the Constitution,

Republic Act No. 10149, otherwise known as “GOCC Governance Adt of 2011,” was signed
into law on 06 June 2011. It advances the policy of the State to actively exercise its
ownership rights in government-owned and ~controlled corporations (“GOCCs”) and to
promote growth by ensuring that operations of GOCCs are consistent with national
development policies and progeams. RA 10149 empowers the Governance Commission
for Government-Owned or —Controlled Corporations (“GCG”) to develop a
Compensation and Position Classification System (CPCS) which is made to apply to all
officers and employees of GOCCs whether under Republic Act No. 6758, otherwise

known as the “Salary Standardization Law,” ox exempt therefrom,

‘The Saluy Standardization Law was passed pursuant to Section 8, Article IX-B of the

Constitution, which states that Congeess shall provide for the standacdization of
compensation of government officials and employees, including those in government-
owned of controlled corporation with original charters. Clearly, this constitutional

provision expressly limits the power of Congress to set the compensation of government

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officials and employees in GOCCs with original charters and excluded therefrom

Congress’ power to set compensation of officials and employees of GOCCs without
original charters, or those created under Batas Pambansa Bilang No. 68 otherwise known
as “The Corporation Code of the Philippines?”

There is a need to clarify the effects of RA 10149 to officials and employees of GOCCs
without original charters in order to comply with the provisions of the Constitution.
Particularly, there is a need to clarify that the CPCS is applicable only to employees of
GOCCs with original charters. By amending RA 10149, the mandate and supremacy of

the Constitution will be upheld.

In view of the foregoing, the passage of this bill is earnestly sought,

arta M. Gutfe

i,

Walden F. Bello


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metto Manila

teenth Congress

First Regular Session

2959

House Bill No.

Introduced by AKBAYAN Representatives
Ibarra M. Gutierrez ITI and Walden F, Bello

AN ACT
AMENDING REPUBLIC ACT NO. 10149
OTHERWISE KNOWN AS
‘THE “GOCC GOVERNANCE AMENDMENTS ACT OF 2011”

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Title, - ‘This Act shall be known as the “GOCC Governance Amendments Adt
of 2013”

SECTION 2, Amendatory Provisions —

(@) Section 3 of Republic Act No. 10149 is hereby amended to read as follows

“Section 3, Definition of Terms

a wing terms shall used and understood a

follows:

Hor purposes of this Act

(@) “Affiliate” refers to a corporation fifty percent
(50%) of less of the outstanding capital stock of which is
owned or controlled, directly or indirectly, by the

GOCC.


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(©) “Appointive Director” sefers to: (1) In the case of
chartered GOCCs, all members of its Board of
Directors/Trustees who are not ex offio members
thereof, (2) In the case of nonchartered GOCCs,
members of its Board of Directors/‘Trustees whom the
State is entided to nominate, to the extent of its
percentage sharcholdings in such GOCG; and (3) In the
case of subsidiaries and affiliates, members of its Board
of Directors/Iiustees whom the GOCC is entitled to
nominate to the extent of its percentage shareholdings in

such subsidiary or affiliate.

(©) “Board of Directors/"Trustees? of “Boar? refers to
the governing body that exercises the corporate powers

of aGOCC,

(2) “Breakshrowgh Results? refer to the achievement of
corporate goals or other performance indicators as

determined by the GOCC or its supervising department.

(©) “Charter Statement” refers to a statement of the

GOCC’s vision, mission and core values,

© “Chartered GOCC” refers to 2 GOCC, including
Government Financial Institutions, created and vested

with functions by special law.

(“Chief Executive Offer (CHO) refers to the
highest-ranking corporate executive, who could be the
President or the General Manager, Chaieman or the

Administrator of a GOCC.

()) “Department? refers to an executive department


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created by law, This shall include any instrumentality
having or assigned the rank of a department, regardless

of its name or designation.

© “Bxyplyee” sefers to any individual employed by a
3OCC whoo pies. wagerial,

supervisory or cand-file position and who is not

member_of the Board of Directors/Trustees_or_an

Officer, as these terms are defined herei

@) “Ex Offcio Board Member” refers to any individual
who sits or acts as a member of the Board of
Directors/‘Trustees by virtue of one’s title to another

office, and without further warrant or appointment

(“Fit and Proper Rule? ref

determining whether a member of the Board of

rs to the standard for

Directors/Trustees or CEO is fit and proper to hold a
position in a GOCC which shall include, but not be
limited 0, standards on integrity, experience, education,

training and competence.

“Government Agengy? refers to any of the various
units of the Government of the Republic of the
Philippines, including a department, bureau, office,
instrumentality or GOCC, or a local government or

district unit therein.

(mm) “Gotwrnment Corporate Governance Standards” sefer
to a set of principles derived from law and practices,
rules and standards prescribed by the Governance
Commission for Government-Owned or —Controlled
Corporation (GCG) that generate long-tem and desirable

economic value for the State, It shall also refer to a


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system whereby shareholders, creditors, employees,
personnel, and other stakeholders of a corporation
ensure that management enhances the value of the
corporation as it competes in an increasingly global

market place,

(8) “Gawmment Financial Institutions (GEIs)? refer to
financial institutions or corporations in which the
government directly or indirectly owns majority of the
capital stock and, which are either: (1) registered with or
directly supervised by the Bangko Sentral ng Pilipinas; or
Q) collecting or transacting funds or contributions from
the public and places them in financial instruments or
assets such as deposits, loans, bonds and equity
including, but not limited to, the Government Service

Insurance System and the Social Security System.

(©) “Goverment Insirumentaites with Corporate Powers
(GCIP)/ Government Corporate Entities (GCE)? tefer to
instramentalities within the departmental framework but
vested by law with special functions or jurisdiction,
endowed with some if not all corporate powers,
administering special funds, and enjoying operational
autonomy usually through a charter including, but not
limited to, the following: the Manila International
import Authority (MIA), the Philippine Ports
Authority (PPA), the Philippine Deposit Insurance
Corporation (PDIC), the Metropolitan Waterworks and
Sewerage System (MWS), the Laguna Lake
Development Authority (LLDA), the Philippine

Fisheries Development Authority (PFDA), the Bases

Conversion and Development Authority (BCDA), the
Cebu Port Authority (CPA), the Cagayan de Oro Port

Authority, the San Fernando Port Authority, the Local


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‘Water Utilities Administration (LWUA) and the Asian
Productivity Organization (APO).

(©) “Government-Owned or —Cantralled Corporation
(GOCC)” ‘refers to any—ageney a_chartered or
nonchartered GOCC, as defined herein, organized either
as a stock or nonstock corporation, vested with
functions relating to public needs whether governmental
or proprietary in nature, and owned by the Government
of the Republic of the Philippines directly or through its
instrumentalities, either wholly or, where applicable, as in
the case of stock corporation, to the extent of at least a
majority of its outstanding capital stock: Provided, howerer,
That for purposes of this Act, the term “GOCC” shall
include “GICP/GCE and GFT" as defined herein:

defined herein.

© — “Nonchartered GOCC’ refers to a GOCC
organized and operating under Batas Pambansa Bilang
68, of the Corporation Code of the Philippines.

(9) “Offers” refer to corporate officers of the
GOCC as provided in its charter or bylaws, such as the
CEO, Chief Financial Officer, Chief Investment Officer,
President, Vice President, General Manager, Treasurer
and Corporate Secretary.


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(“Ownership Manualt” eefer to guidelines and rules
pertaining to the ownership by the State or corporations
and enterprises or the exercise of such ownership

governing the GOCCs or any classification thereof.

(0) “Per Divms” refer 0 the compensation granted to
members of the Board of Directors or ‘Trustees of

GOCC for actual attendance in meetings.

() “Performance Evaluation System” refers to the
process of appraising the accomplishments of GOCCs
in a given fiscal year based on set performance criteria,

targets and weights.

(8) “Performance Scorecard? refers to 2 governance and
management tool forming part of the performance
evaluation system which consists of a set of measures,
targets and initiatives that facilitate the achievement of
breakthrough results and performance through the
effective and efficient monitoring and coordination of

the strategic objectives of the GOCC.

(8) “President? refers co the Presicent of the Republic

of the Philippines.

(Y) “Related Corporation” refers to a subsidiaey or
affiliate of a GOCC.

(@) — “Seeretayy” refers to the person vested with the
authority and responsibility for the exercise of the
mandate of the Department, for the discharge of its
powers and functions, and who shall have supervision

and control of the Department.


(aa) “Strategy Map” xefers to an integrated set of
strategic choices or objectives drawn by the governing
body, the successful execution of which results in the

achievement of the GOCC’s vision in relation to its

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mission or purpose for having been created.

(bb) “Subsidiary? refers to a corporation where at least

a majority of the outstanding capital stock is owned or

controlled, direetly or indircetly, through one or more

uW intermediaries, by the GOCC.”

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13. (b)_ Anew provision after Section 4, denominated as “Section 4-1” is hereby added:
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15 “ Section 4-1, Inteppretation—No provision of this Act shall
16 be interpreted to deny a member of the personnel of a
17 1 3OCC or an employee of a_nonchartered
18 GO cl c personnel or employee
19 ccupying supervis. ancl

20 entities covered in Section 4 hereof, the right 10 security
21 of tenure, right to self-organize and right to collective
2 bargaining and negotiations,”

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24 (©) Section 8 is hereby amended to read as follows:

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26 “Section 8. Coverage of the Compensation and Pasition
27 Classification System—The GCG, after conducting a
28 compensation study, shall develop a Compensation and
29 Position Classification System which shall apply to all
30 officers and employees of the chartered GOCCs whether
31 der —the—Salany oe "
32 therefrom and shall consist of classes of positions
33 grouped into such categories as the GCG may detetmine,

4 subject to the approval of the President: Prouided, ‘That the


compensation of employees of nonchartered_GOCCs
shall be ser in accordance with the Articles 244, 252 253,
253-A_and_250 of the Presidential Decree No. 442
otherwise known as the ‘Labor Code of the Philippines’

SECTION 3, Separability Clause—If for any reason, any provision of this Act is
declared invalid or unconstitutional, the remaining provisions not affected thereby shall

continue to be in force and effect.

SECTION 4. Repealing Clause-—All laws, decrees, executive orders, proclamations,
rules and regulations, and other issuances, or part or parts thereof, particularly of
Republic Act No. 10149, otherwise known as the “GOCC Governance Act of 2011,” and of
Executive Order No. 7 series of 2010, which are inconsistent with the provisions of this,

Act are hereby repealed or modified accordingly.

SECTION 5. Effectivity Clause—This Act shall take effect fifteen (15) days after the

completion of its publication in the Ofticial Ga

tte or at least two (2) newspapers of

general circulation,

Approved,