Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City ry

EIGHTEENTH CONGRESS
First Regular Session

House BILL No, 3258

Introduced by Representative Ferdinand L. Hernandez

AN ACT RIGHTSIZING THE GOVERNMENT TO IMPROVE PUBLIC SERVICE
DELIVERY

EXPLANATORY NOTE

The President, during his inaugural speech, directed all departments and agencies to
streamline their operations, in order to produce quicker results, and to save time and money.
Streamlining may require the creation, abolishing, merging, transferring, or deactivation of
offices for purposes of economy, to avoid redundancies in the function of government, and
allow it to accomplish its purpose and respond to the needs of the time.

This bill aims to delegate to the President the power to reorganize, or to be more precise,
rightsize, the national government, which includes the power to create, abolish, deactivate,
integrate, or split departments, bureaus, commissions, boards, and councils, and to transfer
offices, functions, programs, and projects. Keeping in mind the consequences of such
reorganization as to government employees, the bill also creates safety nets for their welfare, in
line with other social legislation benefits. A Committee on Rightsizing the Government
including the Executive Secretary, the DBM Secretary, and the Chairperson of the CSC, among
others, shall recommend to the President the appropriate size and organization for each
Department or Bureau.

This bill, which was approved on 3" Reading by the House of Representatives in the 17
Congress, also allows the Legislature, the Judiciary, State Colleges and Universities, and LGUs

to reorganize themselves in accordance with the guidelines of this bill.

Considering the rationale stated above, the approval of this Bill is earr(e3tly sought.

Ree REPRE

(PREC IVE
oare. YUL 3 2 2019


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

3258

HOUSE BILL NO.

Introduced by Representative Ferdinand L. Hernandez

AN ACT RIGHTSIZING THE GOVERNMENT TO IMPROVE PUBLIC SERVICE
DELIVERY

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

SECTION 1. Short Title. - This Act shall be known as the “Rightsizing the National
Government Act.”

SEC. 2. Declaration of Policy. ~ It is the declared policy of the State to promote and
maintain effectiveness, efficiency, and economy in the government, and enhance institutional
capacity to improve public service delivery, and to ensure the attainment of the country’s social
and economic development goals and objectives. Consistent with this, the government shall
focus its functions and resources on the essential role, scope, and level of governance, and
minimize, if not eliminate, redundancies, overlaps, and duplication in its rules and regulations,
systems, and processes.

SEC. 3. Coverage. - This Act shall cover all agencies of the executive branch, including,
departments, bureaus, offices, commissions, boards, councils, all other entities attached to or
under their administrative supervision, and government-owned and controlled corporations
(GOCCS) not covered by Republic Act No. 10149, also known as the “GOCC Governance Act of
2011”.

‘The Legislature, the Judiciary, the Constitutional Commissions, and the Office of the
Ombudsman may, within their respective authorized appropriations, likewise rightsize their
respective offices, consistent with the principles and guidelines contained in this Act.

Local Government Units (LGUs) may also rightsize their respective offices, consistent
with the governing principles and guidelines contained in this Act and the provisions of
Republic Act No. 7160, also known as the “Local Government Code of 1991”, within their


financial capabilities.

The Governance Commission for GOCCs (GCC) shall continue to exercise its authority
under RA 10149 to reorganize, merge, streamline, abolish, or privatize any GOCC, in
consultation with the department or agency to which the GOCC is attached.

SEC. 4. Principles and Guidelines. - The National Government shall implement a
Rightsizing Program in accordance with the following guidelines and principles:

a) The role of government, and the scope, level, and prioritization of government
activities shall be determined in accordance with the constitutional mandate,
political and socioeconomic objectives of the government, and available resources;

b) The government shall establish a conducive policy environment to encourage active
private sector engagement in the production and delivery of goods and services;

©) The delineation of responsibilities between the National Government and the LGUs
in the provision, production, and delivery of goods and services shall be clearly
defined;

d) A whole-of-government approach shall be adopted to ensure seamless operations of
agencies within and across sectors and to be more responsive to public needs;

e) Government operations shall be simplified so that the departments/ agencies can
focus on the performance of their core functions and implementation of programs
and projects that will lead to the attainment of the desired sectoral and national goals
and outcomes;

£) Government systems and processes shall be simplified and modernized to facilitate
the delivery and upgrade the quality of frontline services, as well as to improve
policy formulation, planning, and performance evaluation, and raise overall
effectivity of the public sector;

g) Government rules, procedures, and requirements shall be rationalized to reduce the
regulatory burden on citizens, businesses, and other stakeholders, as well as reduce
the administrative burden on the part of the government; and

h) The organizational structure of an agency shall be designed to facilitate the effective,
efficient, and economical implementation of programs and projects, and the
attainment of organizational outputs and outcomes; rightsized, and the appropriate
staffing mix shall be determined based on the skills and competencies required to
effectively and efficiently carry out the agency’s mandate and functions.

SEC. 5. Authority of the President of the Philippines to Rightsize the Operations of
the Executive Branch. ~ Pursuant to the governing rules, policies, standards, and guidelines
established in this Act, the President of the Philippines is hereby granted the following
authority in the rightsizing of the operations of the different agencies of the Executive Branch:

a) To pursue the following functional shifts/ modifications:
1) Strengthen functions of the agency which directly contribute to the


targeted ultimate societal outcomes of the National Government
and/or the targeted sector/subsector outcomes of the agency;

2) Scale down, phase out, eliminate, or discontinue functions, programs,
and projects that can be better carried out or undertaken by the
private sector, or have already been devolved to LGUs consistent with
the governing principles provided in this Act; and

3) Transfer/ integrate functions from one agency to another which can
better perform the same.

b) To undertake the following organization actions:

1). Regularize ad hoc offices whose functions are vital and significant, and
thus must be continually undertaken by the government;

2) Merge and consolidate agencies whose functions are necessarily
overlapping or duplicating and can be undertaken by a single entity,
or whose clients are similar or related, to rationalize the use of
government resources;

3) Split agencies with multifarious functions which are deemed and
serve equally important aspects of governance;

4) Transfer functions to other agencies wherein their functions are more
aligned;

5) Abolish agencies: i) whose functions are already redundant or no
longer relevant or necessary, or better undertaken by another entity;
ii) which are no longer achieving the objectives and purposes for
which these were originally created; iii) which are not cost-effective
since these do not generate the desired levels of outputs and
outcomes vis-a-vis the resource inputs; and/or iv) which have already
become non-operational, dormant, or outlived their purposes.

©) To undertake other functional/ organizational actions, as necessary,
consistent with the policies, principles, frameworks, and standards of
this Act;

d) To develop and provide safety nets, including their implementation
strategies, for employees of departments/ agencies who may be
affected by the government's rightsizing efforts; and

¢) To formulate an organizational development program to strengthen
the institutional capacity of the agencies and improve productivity of
employees.

SEC. 6. Creation of a Committee on the Rightsizing of the Executive Branch. - A
Committee on the Rightsizing of the Executive Branch is hereby created to oversee the
implementation of the rightsizing program, in accordance with the provisions of this Act.

The Committee shall be composed of the Executive Secretary as Chairperson, and the
Secretary of the Department of Budget and Management (DBM) as Co-chairperson, with the
Secretary of Socio-Economic Planning, Chairperson of the Civil Service Commission (CSC), and


the Head of the Presidential Management Staff (PMS), as members.

The Committee shall be organized within fifteen (15) days from the effectivity of this
Act.

This Committee shall also organize subcommittees composed of experts on government
operations, organizational development, and human resource management to assist in the
performance of its functions.

The DBM shall provide the necessary secretariat services to the Committee and its
subcommittees.

In the spirit of transparency and participative governance, the Committee shall consult
the departments/ agencies concerned and accredited public sector unions, and other
stakeholders, relative to the implementation of the Executive Branch Rightsizing Program.

SEC. 7. Powers and Functions of the Committee on Rightsizing the Executive Branch.
~The Committee shall have the following powers and functions:

a) To develop the policies, framework, strategies, and mechanisms to be adopted in the
implementation of the Executive Branch Rightsizing Program;

b) To conduct studies on the functions, programs, projects, operations, structure, and
manpower complement of the different departments/agencies;

©) To develop and prepare the rightsized organizational structure of
departments/agencies concerned and the corresponding executive issuances for
approval by the President;

d) To develop and prepare the overall change management program, including
communication plans, to effectively manage the transition and ensure smooth
implementation of the Rightsizing Program;

¢) To formulate the mechanisms to safeguard the welfare of employees who may be
affected by the rightsizing efforts, as well as the appropriate organizational
development program, for approval by the President;

f) To monitor the implementation by the different agencies of their respective
Rightsizing Plans, and report to the President any issue that must be addressed;

g) To engage the services of experts/consultants, through the DBM, to assist the
Committee and its subcommittees in the performance of their functions; and

h) To formulate the implementing rules and regulations (IRR) of this Act.

SEC. 8. Submission of the Rightsized Organizational Structure and Proposed
Executive Issuances to the President. - The Committee on Rightsizing of the Executive Branch
shall submit to the President the rightsized organizational structure of agencies concerned and
the corresponding executive issuances within two hundred fifty (250) days from the effectivity
of the IRR of this Act.


SEC. 9. Submission of the Detailed Organizational Structure and Staffing to the
DBM. ~ The heads of agencies shall prepare and submit to the DBM the detailed organizational
structure and staffing of their respective agencies within ninety (90) days after the approval of
the proposed executive issuances of the President: Provided, that assistance in the preparation of
the organizational structure and staffing pattern has been extended to the agency by the DBM
and the CSC.

SEC. 10. Retirement Benefits and Separation Incentives for Personnel Who May Be
Affected by the Executive Branch Rightsizing Program. — The affected personnel hired on a
permanent basis and with appointments attested by the CSC, shall be entitled to retirement
benefits and separation incentives.

a) The affected personnel shall be given the option to avail themselves of any of the
following benefits under existing laws, if qualified:

1) Retirement gratuity provided under Republic Act No. 1616 (An Act Further
Amending Section Twelve of Commonwealth Act Numbered One Hundred Eighty-
Six, as Amended, by Prescribing Two Other Modes of Retirement and for Other
Purposes), as amended; or

2) Retirement benefit under Republic Act No. 660 (An Act to Amend Commonwealth
Act Numbered One Hundred Eighty-Six Entitled “An Act to Create and Establish a
Government Service Insurance System, to Provide for its Administration, and to
Appropriate the Necessary Funds Therefor,” and to Provide Retirement Insurance
and for Other Purposes); or

3) Retirement, separation, or unemployment benefit provided under Republic Act No.

8291 (An Act Amending Republic Act No. 1146, as Amended, Expanding and
Increasing the Coverage and Benefits of the Government Service Insurance System,
Instituting Reforms Therein, and for Other Purposes).
‘The retirement gratuity benefit of affected personnel who are qualified and shall
avail of Republic Act No. 1616 shall be paid by the Government Service Insurance
System (GSIS). The GSIS shall no longer pay the refund of retirement premiums
(both personnel and government shares) of the affected personnel who shall avail of
Republic Act No. 1616 benefits.

b) In addition to said retirement benefits, the affected personnel who would opt to
retire or be separated shall be entitled to the following applicable separation
incentives:

1) One half (1/2) of the actual monthly basic salary for every year of government
service, for those who have rendered less than eleven (11) years of service;

2) Three fourths (3/4) of the actual monthly basic salary for every year of government
service, computed starting from the first (1*) year, for those who have rendered
eleven (11) to less than twenty-one (21) years of service;

3) The actual monthly basic salary for every year of government service, computed
starting from the first (1*) year, for those who have rendered twenty-one (21) to less


than thirty-one (31) years of service; and

4) One and one fourth (1 %) of the actual monthly basic salary for every year of
government service, computed starting from the first (I) year, for those who have
rendered thirty-one (31) years of service and above.

The actual monthly basic salary shall refer to the salary of the affected personnel as
of the date of approval of the agency’s detailed organizational structure and staffing
by the DBM.

A minimum of five (5) years of government service is required in order for an
affected personnel to the Program's separation incentives under Section 10(b) of this
Act; Provided, that for the purpose of computing the total amount of separation
incentives, that an affected personnel shall receive, only the government service up
age fifty-nine (59) and a fraction thereof shall be counted. Government service
starting at the age of sixty (60) shall no longer be subject to the separation incentives
provided herein, without affecting the original incentive factor determined as
applicable based on the actual years of service of the affected personnel; Provided,
further, that for the purpose of complying with the required number of years of
service under Republic Act No. 7699 (An Act Instituting Limited Portability Scheme
in the Social Security Insurance Systems by Totalizing the Workers’ Creditable
Services or Contributions in Each of the Systems) may be applied, subject to existing
policies and guidelines.

The affected personnel, if with permanent appointment attested by the CSC, who
will not opt to retire from the service will be placed in a manpower pool to be
organized and administered by the CSC. The CSC, in coordination with other
government agencies and relevant private institutions, shall retool the subject
personnel and deploy them to agencies which require their qualifications, skills, and
competencies.

The number of personnel who will avail of the separation incentives provided in
Section 10 of this Act shall in no case exceed the number of positions declared for
abolition.

The specific guidelines to carry out the provisions of this Section shall be prescribed
in the IRR of this Act.

SEC. 11. Other Benefits of Retired/Separated Personnel. ~ The affected personnel who
retire or are separated shall, in addition to the applicable benefits above, be entitled to the
following:

a) Refund of Pag-IBIG Contributions, both personal and government, of all affected
members, pursuant to existing rules and regulations of the Home Development
Mutual Fund; and


b) Commutation of unused vacation and sick leave credits of the affected personnel in
accordance with existing rules and regulations.

SEC. 12. Period of Availability of the Retirement Benefits and Separation Incentives.
~ The retirement benefits and separation incentives provided in this Act shall be available
within sixty (60) days upon approval by the DBM of the detailed rightsized organizational
structure and staffing of the departments/ agencies concerned.

SEC. 13. Prohibition on Reemployment of Personnel Retired/ Separated from the
Service. - Personnel who retire or are separated from the service as a result of the
implementation of the Rightsizing Program shall not be reemployed in any agency of the
Executive Branch, including GOCCs, for a period of five (5) years, except as teaching or medical
staff in educational institutions and hospitals, respectively.

The retired/ separated personnel under the Program, who are reemployed within the
prohibited period, shall refund the separation benefits received under Section 10(b) on a
prorated basis.

The retired/ separated personnel under the Program who undertake in consultancy
services for the government shall be governed by Section 7 of Republic Act No. 6713 (Code of
Conduct and Ethical Standards for Public Officials and Employees).

SEC. 14, Joint Congressional Oversight Committee on the Rightsizing Program. ~
There is hereby created an oversight committee to oversee, monitor, and evaluate the
implementation of this Act.

The oversight committee shall be composed of five (5) members each from the Senate
and the House of Representatives which shall include members of the Senate Committee on
Civil Service, Government Reorganization and Professional Regulation, the Senate Committee
on Finance, the House Committee on Government Reorganization, and the House Committee
on Appropriations.

SEC. 15. Conduct of an Impact Assessment. - The DBM shall commission the conduct
of an independent impact assessment on the Executive Branch Rightsizing Program three (3)
years from its completion to, among others, determine the effects of, and gains from, the
implementation of this Program.

SEC. 16. Report to Congress. - The President shall submit a report to Congress on the
results of the Program after the completion of its implementation.

SEC. 17. Sunset Provision. ~ The authority given to the President under this Act, as well
as the existence of the Committee on the Rightsizing the Executive Branch, shall end three (3)
years after the effectivity of this Act.


SEC. 18. Implementing Rules and Regulations. ~ The Committee on Rightsizing, the
Executive Branch shall formulate the necessary IRR within thirty (30) days from the
organization of the Committee. The IRR shall take effect fifteen (15) days after its publication in
a newspaper of general circulation.

SEC. 19. Provisions Applicable to Other Branches of Government, Constitutional
Commissions, Office of the Ombudsman, and the LGUs. ~ The governing principles, policies,
standards, and guidelines, as well as the conditions and limitations provided in this Act, shall
be followed in the implementation of the Rightsizing Program by other branches of the
government, Constitutional Commissions, Office of the Ombudsman, and the LGUs.

The heads of offices shall issue their respective IRR and furnish a copy thereof to the
Joint Congressional Oversight Committee on the Rightsizing Program and the DBM.

SEC. 20. Funding Requirements. — The amount necessary for the initial implementation
of this Act shall be sourced against any applicable appropriation items under the General
Appropriations Act. Subsequent amounts needed to continue the implementation of the
Executive Branch Rightsizing Program shall be included in the succeeding appropriations.

In the event that the Legislature, Judiciary, Constitutional Commissions, and the Office
of the Ombudsman implement the rightsizing under this Act, the funding requirements shall be
included in the succeeding appropriations.

SEC. 21. Separability Clause. — If any provision of this Act is declared unconstitutional
or invalid, the other provisions not otherwise affected shall remain in full force and effect.

SEC. 22. Repealing Clause. - All laws, presidential decrees, executive orders, rules, and
regulations contrary to or inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SEC. 23. Effectivity. - This Act shall take effect fifteen (15) days after its publication in

the Official Gazette or in at least two (2) newspapers of general circulation.

Approved.