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Compensation system for GOCCs approved

March 23, 2016 (http://www.gov.ph/2016/03/23/cpcs-goccs/)

President Benigno S. Aquino III has approved the Compensation and Position Classi cation
System (CPCS) for government-owned and -controlled corporations (GOCCs) through Executive
Order No. 203 (http://www.gov.ph/2016/03/22/executive-order-no-203-s-2016/), standardizing
compensation and bene ts in all GOCCs under the jurisdiction of the Governance Commission for
GOCCs (GCG).

Scroll down for the full infographic.

The issuance of EO 203 was mandated under the GOCC Governance Act of 2011
(http://www.gov.ph/2011/06/06/republic-act-no-10149/) (Republic Act No. 10149), which
directed the GCG to undertake a compensation study and recommend for approval by the
President a CPCS for the GOCC sector that is reasonable and competitive with the private
sector.

[Download a Q and A issued by the GCG (http://www.gov.ph/downloads/2016/Questions-andAnswers-on-the-CPCS-2-Mar.pdf)]

It will be recalled that in September 2010, President Aquino issued Executive Order No. 7 that
provided for a moratorium on increases in salaries, allowances, incentives and other bene ts, to
allow the then Task Force for Corporate Compensation (TFCC) to undertake a rationalization
and compensation and position classi cation in GOCCs and GFIs in accordance with the
guidelines provided therein. In July 2011, R.A. No. 10149 was enacted into law which mandated
that the GCG, after conducting a compensation study, shall develop a Compensation and
Position Classi cation System which shall apply to all of cers and employees of the GOCCs
whether under SSL or exempt therefrom, and once approved by the President shall be
mandatory on all GOCCs, notwithstanding any law to the contrary.
The CPCS was developed by GCG to bring GOCCs closer to the median of the market based on
a compensation study done with Towers Watson, which study benchmarked GOCC positions
with 6,000 comparable jobs across over 240 companies in the private sector. Based on the
study, compensation in GOCCs generally fell below the median of the comparable pay in private
sector, especially for decision-makers in the higher job levels. Towers Watson also served as the
same consultant in establishing the rates under SSL 4 for the National Government Agencies.
The CPCS brings all GOCCs into a common compensation framework limited to four basic
types, namely: (a) basic salary; (b) standard allowances and bene ts; (c) Speci c Purpose
Allowance that depends on the job; and (d) Variable Pay or Performance-Based Bonus (PBB).
For better transparency, the bulk of compensation has been re ected in the basic salary, and the
number of allowances have been streamlined to 5 types. The CPCS also increases the pressure
on GOCCs to meet the performance targets negotiated with GCG as a signi cant portion of
compensation has been allocated to the PBB.
The implementation of the CPCS is estimated to costP4.6 billion or 0.026% of the average total
corporate income of GOCCs from 2012-2015. FromP81.55 billion dividend remittances in 2002
to 2010, GOCC dividend remittances reached P96.84 billion from 2011 to 2014. The
implementation of the CPCS shall be subject to each GOCCs capacity to pay, ensuring the
corporations nancial viability.
With the implementation of the CPCS, the Governance Commission intends to raise the
standards even higher on performance targets from GOCCs, especially with respect to their
long-term breakthrough results.

 From the Governance Commission for Government Owned or Controlled Corporations

(http://www.gcg.gov.ph)

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