Saturday, September 28, 2013

CDC bonuses legal

 CLARK FREEPORT – The Performance-Based Incentives (PBIs) released to Clark Development Corporation (CDC) officials are “in accordance with applicable laws, rules and regulations.”

The CDC maintained that the amount of the PBI that were released to some of its Board of Directors and other officials is in line with GCG Memorandum Circular No. 2012-14 or the “Interim Performance-Based Incentive (IPBI) system for appointive Directors/Trustees of GOCCs covered by R.A. NO. 10149).” 

Republic Act 10149 is otherwise known as “An act to promote financial viability and fiscal discipline in Government-Owned or Controlled Corporations and to strengthen the role of the state in its governance and management to make them more responsive to the needs of public interest and for other purposes.” 

According to the GCG (Governance Commission for Government-Owned and Controlled Corporations) memorandum, “Section 23 of RA 10149 mandates the Commission to determine the ‘compensation, per diem, allowances and incentives of the members of the Board of Directors/Trustees of the GOCCs…, using as a reference, among others, Executive Order No. 24 dated February 10, 2011.’” 

The CDC clarified that EO 24, or the “Prescribing rules to govern the compensation of members of the Board of Directors/Trustees in Government-Owned or Controlled Corporations including government financial institutions,” was the basis for the amount of the PBI released to some of its officials. 

“It was not the CDC but existing government laws that had determined the amount of the PBI given to our directors and other officials,” the CDC stressed. 

In Item 1.1 (a) of the GCG memorandum, or the Conditions Precedent to Entitlement to PBI, the PBI shall only be allowed if “The GOCCs have met the requisite 90% rating in their MFOs (major final output) for Year 2012, which shall be validated pursuant to certifications issued by the GOCCs under the sworn signatures of their Chairpersons and Presidents, to be submitted not later than 30 November 2012.” 

In relation to this, Item 2 (Entitlement), states that “The grant of the PBI shall be based on a percentage of the Total Actual Annual Authorized per diems as provided under Sections 9 and 10 of EO 24 (s. 2011) received by a Director/Trustee…” 

According to Item 2, if the Major Final Output (MFO) Target Achievement is 100%, the Incentive Entitlement per Director/Trustee is 100% of the Total Actual Annual Authorized per diems received; for a 95% MFO rating, the incentive given is 90%; a 90% MFO corresponds to only 80%. No incentive entitlements would be given to those who got an MFO rating which is below 90%. 

As for the CDC, the corporation’s MFO rating is 96.82%, which allows its officials to get a 90% incentive entitlement. 

Aside from the 96.82% MFO rating, the other CDC performance targets include employment, 94.29%; economic development, 132.85%; Corporate Social Responsibility, 63.33%; support to operations, 97.50%; and general administration and support services, 830.76%.  
On the Key Result Area of National Government, the CDC accomplishments rated 105.27% in economic development and 98% on human development and poverty alleviation.

Notwithstanding the MFO ratings, the CDC also stressed that the corporation has submitted documents required by EO 24, which includes a “Board resolution authorizing the grant of IPBI to the GOCC’s appointive Directors/Trustees in accordance with applicable laws, rules and regulations,” among others.

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