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Alig 1.0 2022

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

NINETEENTH CONGRESS
First Regular Ses. yn

Ne, 3473.

HOUSE BILL No. _~

Introduced by REPRESENTATIVE JONATH = “N KEITH T. FLORES:

Explanatory Note

President Ferdinand R. Marcos, Jr. in his first State of the Nation Address (SONA) on 25 July
2022 declared the National Government Rightsizing Program as his administration's priority
legislation. This measure seeks to enhance the government’ institutional capacity to perform and
provide better services by purging redundant and inefficient government bodies.

The Department of Budget and Management (DBM), one of the lead agencies that will be part of
the Committee on Rightsizing as mentioned in this bill discoursed that the government can save
up to P14.8 billion in a year if redundant positions in government agencies are removed. The
savings can be spent on social welfare programs instead. This would be done by minimizing and
eliminating overlaps and duplication, and rationalizing delivery and support systems,
organizational structures and staffing within department/agency to focus government efforts on its
vital functions and channel resources to these core public services. Doing this will ensure the
effectiveness, efficiency, responsiveness and progressiveness in the delivery of government goods
and services (DBM 2017)'.

Based on the DBM Staffing Summary of the National Government for FY 2015 and FY 2022
respectively, the number of filled permanent positions has ballooned from 1,244,931 in 2015 to
1,721,753 in 2022 or a growth of 38.3% in seven (7) years.

Consequently, the corresponding expenditure for personnel services (PS) also bloated. The budget
allocation for PS in 2015 amounted to Php 682.62 billion, while in 2022 the budget for PS reached
Php 1.45 trillion (BESF 2022 p. 91), or an equivalent of 113%.

According to the Economic Principles for Rightsizing Government by Charlotte Justine Diokno-
Sucat, studies have shown that the existing governmental organization is bloated and overstaffed,
with redundant offices and overlapping or fragmented or ambiguous functions. The situation calls
for the rightsizing of the bureaucracy to promote effectiveness, efficiency and economy in the
delivery of services to the people. Streamlining the operations of departments/agencies is needed
to achieve the government's goal of maintaining a well-functioning system of governance. There
is a need to rationalize the existing machinery, reconfigure the organization, contain the costs and
expenditures, and streamline operations in order to fulfill the constitutional mandate of the civil
service and maximize the role of the public sector in national development.

The National Rightsizing Program shall cover all the executive branch, including departments,
bureaus, offices, commissions, boards, councils, and all other entities attached to or under their

* PIDS, Economic Principles of Rightsizing Government



administrative supervision, government-owned or controlled corporations (GOCCs) not covered
by Republic Act No. 10149 or 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 the bill.

Local Government Units (LGUs) may also rightsize their respective offices, consistent with the
governing principles and guidelines as contained in the approved measure and the provisions of
RA No. 7160 or the Local Government Code of 1991, and subject to their financial capability.

‘The Governance Commission for GOCCs (GCG) shall continue to exercise its authority under RA
No. 10149 to reorganize, merge, streamline, abolish, or privatize any GOCC, in consultation with
the department ot agency to which the GOCC is attached.

One of the salient features of this proposed measure is that it gives the President authority to
rightsize the operations of the Executive Branch. Furthermore, a Committee on Rightsizing the
Executive Branch will be created to oversee the implementation of the Rightsizing Program. Said
Committee shall be organized within fifteen (15) days from the effectivity of this proposed
measure. However, a sunset provision is likewise provided which states that “the authority given
to the President, as well as the existence of the Committee on Rightsizing the Executive Branch,
shall end three (3) years after the effectivity of this Act.”

To address displaced workers from this reform, the Rightsizing bill provides either retirement
benefits and separation incentives with a condition that the personnel who availed such package
shall not be reemployed in any agency of the Executive Branch, including GOCCs, for a period of
five (5) years, except teaching or medical staff in educational institutions and hospitals.
respectively.

As the current Rightsizing program intends to cut across departments and National Government
Agencies to enhance efficiency and productivity, a smaller but more effective bureaucracy that is
active and responsive to the demands of the modern times will be achieved.

In view of the foregoing, immediate passage of this important measure is eamestly sought.

REP. JONATI '. FLORES
Bukidnon


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

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL No. 3473

Introduced by REPRESENTATIVE JONATHAN KEITH T. FLORES

AN ACT
RIGHTSIZING THE NATIONAL GOVERNMENT TO IMPROVE PUBLIC SERVICE
DELIVERY

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 “Rightsizing the National
Government Act.”

SEC. 2. Declaration of Policy. - It is hereby declared the 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 societal 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
operations and simplify 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, and all other entities attached to or
under their administrative supervision, government-owned or controlled corporations (GOCCs)
not covered by Republic Act No. 10149 or 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 RA No.
7160 or the Local Government Code of 1991, and subject to their financial capability.

The Governance Commission for GOCCs (GCG) shall continue to exercise its authority
under RA No. 10149 to reorganize, merge, streamline, abolish, or privatize any GOCC, in

consultation with the department or agency to which the GOCC is attached.


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

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 socio-
economic 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;

©) 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 modemized 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 productivity of the public sector;

2) 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 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
stipulated 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/sub-sector
outcomes of the agency;

2) Scale down, phase out, eliminate or discontinue functions, programs, projects that
can better be 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.


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b) —_Toundertake the following organizational actions:

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

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

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

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

5) Abolish agencies (i) which 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 and/or outlived their purposes.

c) To undertake other functional/organizational actions, as necessary, consistent with
the policies, principles, framework, 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;

e) 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 Rightsizing the Executive Branch. - A Committee
on Rightsizing 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, as members.

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

‘The 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 participatory 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;

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

4) — To develop and prepare the overall change management program, including
communication plans, to effectively manage the transition and ensure the 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 of the President;

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

2) To engage the services of experts/consultants, through the DBM, to assist the
Committee and its Sub-Committees 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 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
Implementing Rules and Regulations (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 by the President: Provided, That assistance in the preparation of
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 retirement benefits under existing laws, if qualified:


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1) Retirement gratuity provided under Republic Act No. 1616 (An Act Further
Amending Section 12 of Commonwealth Act No. 186, 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 No. 186 or “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 Presidential Decree 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 personne! 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 (%) 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 fourth (%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 (1°) 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 be entitled to avail of 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 to age fifty-nine (59) and a fraction
thereof shall be counted. Government service starting at the age 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

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Republic Act No. 8291, the portability scheme 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 shall 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 personne! who will avail of the separation incentives under 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 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 in 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 re-employed within the
prohibited period shall refund the separation incentives received under Section 10.b of this Act on
a pro-rated 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.


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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 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 the 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 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 guideline, 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 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 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 current General
Appropriations Act. Subsequent amount needed to continue the implementation of the Executive
Branch Rightsizing Program in the Executive Branch 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, decrees, executive orders, rules and regulations,

and other issuances or parts thereof which are inconsistent with this Act are hereby repealed,

amended or modified accordingly.


a SEC. 23. Effectivity. - This Act shall take effect take effect fifteen (15) days after its
2 publication in the Official Gazette or in any newspaper of general circulation.

3 Approved,