MANILA, Philippines - After being singled out by President Benigno Aquino III in his first State of the Nation Address (SONA), officials of the Metropolitan Waterworks and Sewerage System (MWSS) took the hot seat on Tuesday’s continuation of the Senate probe into the alleged excessive salaries and benefits of executives of government-owned and –controlled corporations (GOCC) and government financial institutions (GFI).

At the hearing, MWSS Officer-in-Charge Macra Cruz admitted receiving 25-month bonuses, which she and her fellow employees get apart from their monthly salaries. In 2009, Cruz earned more than P4 million in salary and perks.

Allowances and bonuses for MWSS employees and officials include:

• an anniversary bonus,
• mid-year financial assistance,
• yearend financial assistance,
• productivity bonus,
• GOCC incentive,
• CNA incentive,
• performance bonus,
• educational assistance,
• rate rebasing bonus,
• privatization bonus,
• efficiency incentive,
• performance enhancement bonus,
• corporate Christmas package,
• traditional Christmas package,
• calamity financial assistance,
• scholarship allowance, and
• family week allowance, among others.

“Wala ba kayong National Heroes’ Day bonus?” asked Senate finance committee chair Franklin Drilon, eliciting laughter from the audience.

“Wala po,” Cruz replied.

All in all, MWSS officials received more than P384 million in bonuses and allowances last year, according to company documents.

“That’s 37 months’ pay in one year,” Drilon said. “25 months of bonus in 2009 plus their 12 months basic salary is really obscene by any language.”

The perks include a per diem of P14,000 for attending board meetings.

Drilon noted that MWSS board chairman Oscar Garcia earned P658,000 in 2009 just for attending such meetings. Based on company documents, Drilon said board meetings last year were held almost once a week - and sometimes twice a day, which also means twice the pay.

He added that MWSS officials are violating a memorandum order issued by the previous administration, which limits the salaries of GOCC executives to twice that of Cabinet secretaries.

P3.5-B loss in 2008

The bonuses are given even as MWSS is losing money, Drilon said. In 2008, it lost P3.5 billion. The year after that, however, Garcia earned a total of P5.4 million.

"What is the basis for MWSS to provide bonuses when they are operating at a loss?" said Sen. Ralph Recto, chair of the government corporations and public enterprises committee.

Department of Budget and Management (DBM) director Mary Grace Chua told senators that aside from DBM’s recommendation, GOCC bonuses also have to be approved by the Office of the President. Among other things, she said a GOCC’s financial standing is examined before perks are approved.

Jamie Naranjo of the Commission on Audit (COA) said that in 2009, the agency had disallowed P156 million of the bonuses of MWSS for lack of legal basis. The MWSS has appealed COA’s decision, but if denied, Drilon said employees must return some of the bonuses they had received.

Cruz said she has already recommended to President Aquino that their bonuses be reduced from 25 to seven. This would give them savings of up to P179 million, she told reporters after the hearing.

Aside from scrutinizing the perks its employees receive, senators also want the MWSS to pay the national government P258.6 million in unremitted earnings.

RA 7656 requires all GOCCs to remit 50 percent of their dividends to national coffers.

“They have not remitted it but they have declared gargantuan bonuses,” Drilon told reporters, referring to MWSS executives.

Cruz said, however, that they are prepared to remit half of the amount after paying the retirement claims of former MWSS employees.