MANILA, Philippines—An executive order (EO) putting in place more competitive pay for workers in state-run corporations to make it at par with its private sector counterpart and possibly entice applicants will be out this week, the Governance Commission for GOCCs (GCG) said on Monday (Oct. 4).
At the hearing of the GCG’s proposed 2022 budget, its chair Samuel Dagpin Jr. said the draft EO for the new compensation and position classification system (CPCS) earlier submitted to the Office of the President “will be signed, and they promised me that it will be published within this week.”
Dagpin said the GCG already drafted the updated CPCS’s implementing rules and regulations (IRR) and will sync it with the upcoming EO.
Back in May, the proposed CPCS was approved by the GCG en banc after consultations with two departments—budget and finance—which has two seats in the GCG.
The GCG had said that the long-delayed CPCS was aimed at establishing a competitive compensation and remuneration system to attract and retain talent while allowing government-owned and/or controlled corporations (GOCCs) to be financially sound and sustainable.
But DBM officials told the Inquirer in 2020 that the CPCS had taken a backseat to the huge funding requirements of pandemic response.
GCG director Karen Pascasio explained to Sen. Sherwin Gatchalian that the CPCS will standardize the salaries of GOCCs, whether currently covered by the Salary Standardization Law (SSL) or exempt from it.
Pascasio said the GCG’s proposal will categorize GOCCs into three types based on their size, which will then be assigned corresponding CPCS rates.
Category one GOCCs will include those which have been receiving subsidies from the national government and would also include state-run firms in the red or posting losses, Pascasio said. These will have compensation rates similar to currently SSL-covered agencies, she said.
“The other benefits, incentives and allowances will now be standardized such that [those] being received by GOCCs that were not previously approved by the President will have to be standardized as well,” she added.
Category two will cover GOCCs which perform non-commercial activities. GOCCs with commercial functions and compete with the private sector will be included in category three.
This categories will allow the GCG to assign market-competitive compensation depending on GOCCs’ functions, Pascasio said.
Pascasio said GOCCs will also be classified according to financial performance, specifically their assets and revenues.
All GOCCs will be eligible to apply for CPCS, Pascasio added.
“We intend that those who are receiving below the SSL of the national government will be at par… at the very least,” Pascasio said, while GOCCs which already pay high salaries will be untouched due to the principle of non-diminution of benefits.
However, the hefty but unauthorized benefits, incentives and allowances which some GOCCs receive will be “standardized,” she added.
Employees of national government departments and agencies have been enjoying increasing pay yearly under the SSL, the fifth tranche of which began last year. Until 2023, P130.5 billion will be spent by the government for these pay hikes.
The GCG did not say how much will be set aside for adjustments under the forthcoming CPCS.
TSB