The Republic Vol. I, No. 6 (1-31 December 1975)

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Part of The Republic

Title: The Republic Vol. I, No. 6 (1-31 December 1975)
Issue Date: Vol. I, No. 6 (1-31 December 1975)
Year: 1975
Language: English
Rights
Source: Volume I (Issue No. 6) 1-31 December 1975
extracted text: THE REPUBLIC Isang bansa, Isang diwa__________ Performance is the yardstick THE INCREASED emphasis that is being placed on “performance” for government management and govern ment funds was highlighted by President Marcos in a speech read before the Phil ippine Council of Management in Manila on November 24. Here is an excerpt: IN the Philippines, where the public service has been designated as the cadres for carrying out a peaceful social revolution, we cannot but regard the development of an adequate public man agement as a keystone of our total de velopment strategy. This is now the time to extend to the public sector the catalytic and li berating impact of modern manage ment. In spite of significant reforms, the Career Executive Service of the Govern ment and the Civil Service organization as a whole still remain encrusted with habits of the past, disposed to obstruct rather than facilitate action. This out look must now be cast aside and re placed by a new commitment and reso lution to facilitate action—to release energy and realize performance. This in turn will require the sharp ening of tools of management control, especially measurement of goals and performance, in the public service. In the private sector, the test of economic per formance, or the market test, if you will, normally suffices as a means of manage ment control. In the public service in stitutions, we must resolutei develop tests of performance that will substitute for the economic test. Thus every program area must be governed by a realistic and effective man agement information system. I AM today directing the Budget Com mission in the exercise of its manage ment function to require that every de partment and agency of the Govern ment submit within one month the man agement information system appropriate to each program area as contained in the budget, complete with indicators of goals and performance during the budget year. Such management information sys tems should be monitored by the Bud get Commission and made the basis of a genuine performance budget. QUITE apart from the public service as such, there are about a hundred government corporations in existence, only a minuscule number of which are viable and profitable. I hereby direct the Budget Com mission and the Reorganization Com mission to conduct a management audit of these corporations and recommend the reorganization of those that deserve to be reorganized, re-created’ or abol ished. ANOTHER critical area in public man. agement is the procurement of equipment and supplies for the Govern ment, which is characterized by ram pant red tape, duplicity, and corrup tion. I hereby direct the Budget Com mission to conduct a study of how gov ernment procurement methods can be streamlined, delays eliminated, payments immediately made, overpricing com pletely eliminated and punished, and economies of scale availed of to gen erate savings and efficiency. In this connection, the Budget Com mission shall consult with the Commis sion on Audit on the streamlining of auditing procedures to eliminate red tape and graft, in procurement activi ties. We have dismissed numerous audit ors who have been verified to engage in this kind of red tape. If there are any auditors who are found to obstruct payment to suppliers of the government, in order to create a leverage for self-aggrandizement, such auditors must be reported immediately to the Chairman of the Commission on Audit or to the Office of the President. THE Development Academy of the Philippines is at this time engaged in the training and development of public managers.' It is my desire that they prepare programmed courses that will enable the respective departments and agencies of the Government to conduct their own management development programs simultaneously in addition to the DAPs own direct programs. In this regard, other facilities for management training, such as the Asian Institute of Management and the grad uate schools of the leading universities should be increasingly linked up with the government’s own management de velopment programs, under the direc tion and guidance of the Development Academy of the Philippines. IT is also my hope that managers in the private and public sectors will inter act more closely and more frequently in the interest of advancing the com mon frontier of management knowledge and expertise. The private sector of the economy will continue to be the main engine of economic growth. But the public sector must be an engine of facilitation of growth. The management erf both sectors must therefore merge their respective strengths to be able to realize the real funclicn of management: namely, to convert human strength to productive strength. In the context of Southeast Asia, there is no question in my mind that economic and social development, which is another name for nation-building, will remain the joint responsibility of the private and the public managers. If management is a strategy for the strategic and optimal use of opportuni ties and resources, then there is no alter native to the fullest possible cooperation and coordination of public administra tion and private sector management. It is in the merger of their respec tive excellences and strengths that we shall derive the optimum vigor and wis dom for national development—the abil ity to free our peoples from the scourge of mass poverty and lead them to the threshold of substantial freedom, a bet ter and fuller life. □ ^lf there are any auditors found to obstruct payment to suppliers of the government, in order to create a leverage for self-aggrandizement, such auditors must be reported immediately to the Chairman of the Commission on Audit or to the Office of the President. POSTERS from the Commission on Audit are going up in government offices us part of the President’s drive to improve government management. Updating the budget ASIDE from any cutbacks that might arise from the austerity written into the 1976 budget, a separate longerterm factor is likely to help reorient many government programs in the com ing year. This other factor is the Budgetary Review of Programs and Projects which proceeded quietly through December and is likely to culminate in January or February with recommendations to President Marcos. The seven divisions of the Budget Commission have been constituted into task forces, some of them including technical experts from the private sector. Their task is to review whether the bud get document accurately reflects what each agency is actually doing-or alter natively whether each agency is doing what the budget document says its P.2,3 P. 4,5 P. 6 P. 7, 8, 9 P. 10, 11 P. 12 P. 13 P. 15 funds are for. The Budget Commission set out the following objectives for the intensive series of discussions: Re-examine the Program and Pro ject structure of all agencies of the Na tional Government under Performance Budget and to install a performance type budget for those without the system; Realign and eliminate redundant, duplicating or unecessary Program(s) and establish those which are relevant to the Department and/or agency func tions in pursuit of the National Gov ernment goals; Re-examine the validity and/or use fulness of appropriation language, spe cial and general provisions in terms of their contribution to budgetary effecSee next page The new budgetary emphasis Behind the energy drive Scrutiny of localofficials Looking at the corporations Fresh approaches to auditing Revamp of President's office Presidential decrees Setting standards for jobs 2 1-31 December1975 r THE REPUBLIC Sharpening the budgetary tool HERE are parts of the background briefing which Dr. Jaime Lay a, the acting Commissioner of the Budget, deli vered to budget officers of various agen cies on December 2 to launch the Com mission’s Budgetary Review of Programs and Projects. OUR BUDGET this year is about 24 billion pesos, which is some thing like 15 percent of the gross na tional product. It has been estimated that the current program of governmeht expenditures will result in a deficit of around five billion pesos. In his concern about this financial picture, the President has directed the various government agencies to produce savings that hope fully will reduce this deficit and result in a realignment of government expenditures. This review of projects and pro grams is being done at the time the 1976 budget is being completed. We are trying to ask ourselves: Does the pro gram and project structure need some modification so that the budget for 1977 financial year will be more con sistent with our developmental pro grams? All of us of course have heard about the budget being the tool of de velopment and development being the primary form of government activity, and so on. But apparently wc have not really sat down and figured out exactly how the budget fits into the whole concept and approach to development. This past year, many of you have probably participated in, or at least have been aware of, a series of what was called sectoral planning enterprises c nductett'by NED A, the ^Central Bank, the Budget Commission, the Develop ment Academy of the Philippines and other government agencies. The planning requirements of the following sectors were looked into: food, agriculture, industry, housing, education, health, social welfare, tour ism, foreign trade, and infrastructure in the villages. Representatives of govern ment agencies and of the private sector sat down and tried to assess the nqeds of the population in each of those sectors. The whole idea, of course, is to try to ensure that the more than 100 government agencies are really working From page 1 tiveness; Re-examine the validity, both in terms of actual output/services being delivered and, for purposes of estima tion of future requirements, the units of work measurements for each Program and Project or both ; Establish the new performance standards, the concepts underlying them, their validity as measures of output/ services delivered, and their integrity and internal consistency. During the talks, the Commission is stressing that it is not conducting budget hearings or a reorganization. Exclusive emphasis is on the program/project list ings in the budget document, and how these are consistent with the priorities of the President and the New Society. The task forces will make recom mendations to a Review Board which must take a final stand on all recom mendations. These will be embodied in a terminal report to the Commissioner of the Budget who will report to the President. While the Budget Commission em phasizes it is not engaged in a reorgani zation, agencies have noted that re orientation would have to come if exces sive duplication or redundancy were found among the wide array of govern ment services. together and not at cross purposes in their different activities. Really, the government has just a few tools at its command. The national government budget is only something like 15 percent of the GNP. Therefore the remaining 85 percent is in the hands of the private sector. The whole idea is: What can the government do with this 15 percent that will both adequately satisfy and support the needs of the private sector in the remaining 85 per cent? How can the 15 percent help the 85 percent to do a much better job? We begin by an assessment of the programs and projects which are con tained in the government budget docu ment. It consists of a listing of expendi ture outlets, a listing of programs, some special provisions which sometimes read rather funny. This is what we would like to review-the listing of programs and projects contained in the budget document. Do these make sense in the light of the objectives of the New Society? Do these make sense in the light of what we want to dp in national govern ment as well as sectoral and regional planning? Do these make sense? Are there any redundant, dupljeative or un necessary programs? Are some of these programs already superseded? Is the performance type of budget really in operation? Is the language used in the budget document suitable? Is there any delay in implementation of the budget process? Are there any new performance budgeting standards that we must In the early days of the hearings, the task forces started coming across line items in the budget allocating funds for projects that had obviously ceased or that had changed their nature, such as research into long-solved problems. One result may be to bring the wording of the budget into line with what those particular funds are being used for now. BUT perhaps the greatest long-term impact will come from the renewed emphasis on the long-existing concept of Performance Budget. In ordering the current review, President Marcos said the information thus gathered should be “made the basis of a genuine perform ance budget”. The concept of performance bud geting was introduced in the Philippines in the early 1950s, incorporated in the Revised Budget Act (RA 992) of 1954 and spelled out in great detail in Budget Circular 41 dated August 1, 1956. How ever, almost no government agency is operating fully on a Pefformance Bud get, and high officials are disappointed at how little is understood of the concept. While emphasis on the word per formance is not new in Philippine gov ernment circles, it is clear that it will gain extra prominence in the coming year. □ look at? This is the purpose of the series of meetings conducted between agencies and the Budget Commission throughout the month of December. The different programs and projects in the budget document have been with us for quite some time. I do not know when some of them were first promul gated. However, at the time some of these programs and projects were first designed, they were probably the most appropriate approach possible. However, times of course have changed. Foremost, of course, are the ob jectives of the New Society in terms of uplifting the welfare of the common man. Does the budget in fact result in such a program? A second major approach concerns the reorganization plan. This was one of the first thrusts of the New Society. Is the budget fully consistent with the spirit of the re organization plan? Probably not, be cause one of the major innovations of the reorganization plan is the concept Budget backgrounder UNTIL 1954 the Philippine govern ment’s established financial policy had been to hold expenditures to a min imum, to cover expenditures by current taxation and to retire debt as rapidly as‘ possible. This simple approach re quired little knowledge of the theory of taxation, expenditure policy or debt management. As in most emerging nations, the national government in the Philippines is the only entity large enough to exert any considerable influence on the entire economy. A general awareness of the significance of this fact developed some time prior to the enactment of the Re vised Budget Act in 1954 and is reflect ed in the Act’s progressive budgetary provisions. These in fact recognized that the government can, by means of fiscal pol icy, set the country on the road to eco nomic development much as the more advanced nations utilize this instrument to maintain economic stability and full employment. A high priority was therefore placed on the task of transforming the national budget from a mere list of receipts and expenditures into a major instrument of fiscal policy—to become a basic tool for managing the nation’s economy I^HIS modern thinking was crystallized in the nation’s first five-year fiscal plan, covering 1957 and 1961, based on the following fiscal guidelines: First, the government would main tain a balanced budget for general oper ations and would make every effort to obtain revenues sufficient to meet plan ned obligations. Deficit financing for current operations was not to be resort ed to; instead, commitments were to be reduced accordingly. Second, a policy of judicious pub lic bonowing would be observed in order to finance economic development with out causing price disruptions. Proceeds from borrowing would be used exclusive ly for income-creating or other produc tive capital expenditures having indus trial and agricultural potential. Further, the use of the national credit was to be reduced as rapidly as development needs were met or other resources became available. Third, every proposed expenditure of public funds would be tested against the touchstone of national interest. Fourth, taxation would be geared to the essential financial requirement of government for general operations and development purposes. The tax struc ture would emphasize the progressive factor of ability-to-pay without impair ing legitimate business incentives. Fifth, public debt would not be al lowed to exceed a level consistent with the country’s economic growth. Amor of regionalization. To be honest, the budget document does not dwell much on regional aspects. In November, we in the Budget Commission had limited discussions with some regional directors. The feedback we got is rather disappointing. It seems the needs of the regions are forgotten not only in budget formulations but also in the budget operational process. Perhaps we might look at our structure of programs and projects to ensure the regional component. One measure of development which we may have taken for granted is the expanding role of government corpora tions and the agencies of government wiiich have been outside the civil serv ice. We have at present something like 125 government corporations doing one thing or another. And these affect really the whole range of activities. Things crop up in these corporations that con sistently indicate that there might be some deficiency-some areas that we could look at and improve in the bud getary process. □ tization and interest payments against the public debt were to be kept on sched ule and the necessary sinking funds for their ultimate retirement would continue to be established. Sixth, tariffs would be employed to provide reasonable protection to do mestic producers where such measures appeared economically sound and in the national interest. The primary function of tariffs would, however, continue to be the production of revenue to finance government programs. FISCAL planning was predicated on a careful appraisal of all available re sources in which the sequence of deci sions ran from available revenues and other resources to expenditures, instead of from expenditures to resources. Not only were the usual revenues and public borrowings considered, but also estimated income from reparations and other sources which could be ap plied to the financing of governmentsponsored development projects. After the maximum feasible re sources had been ascertained, they were allocated to the numerous government activities on the basis of a scrupulous application of priority standards. These particularly included a system of indus trial priorities which governed the allo cation of foreign exchange, the adminis tration of the government’s fiscal oper ations and the extension of credit. The entire governmental establish ment was embraced in this planning. It covered not only the usual general bud get, but also public works for all pur poses, subscriptions to capital stock of government corporations, financial in vestments, loans and other obligations of the government. The plans embodied in the five-year fiscal plan were comprehensive both in their expenditures and their financing aspects. The ultimate goal was to achieve broader employment, greater production and higher standards of living for the Filipino people generally. Throughout the attendant planning operation, the fiscal, monetary and eco nomic planning agencies of the national government worked in close collabora tion to produce a plan in which the over all level of government spending and the utilization of financial resources were appropriately balanced in terms of: Effect on money supply; relation to national income; foreign exchange re quirements; programs for capital forma tion; future tax resources; effect on price levels. The first five-year fiscal plan thus not only presented a long-range financial plan but integrated within fiscal plan ning the monetary and economic impli cations of and policies governing au thorized programs and projects. □ 1-31 December 1975 3 How to budget for performance The President's renewed demand for performance budgeting goes back to RA 992 of 1954 which requires all agency budgets to stress "functions, activities and projects in terms of ex pected results.” Yet most agencies still use simple “line item" budgets today. Tlfe following excerpts from Budget Circular 41 of August 1, 1956, remain authoritative on performance budgeting. PERFORMANCE budget is one em phasizing the program or services conducted. It is based on functions, ac tivities and projects which focus atten tion on the general character and nature of the work to be done, or on the services to be rendered, rather than upon the things to be acquired, such as personal services. Budgeting is essentially a planning process. It is the determination for a future period of time of: 1. What is to be done; 2. What is to be accomplished; 3. The manner in which it is'to be done;and 4. The cost of doing it. It requires that the broad objectives of the agency be broken down into de tailed work plans for each project and for each unit of the organization. Thus, each responsible official and supervisor in the agency will have a plan of action, which if successfully followed and combined with similar efforts in all organization units, should result in the agency meeting its over-all objectives. The budget, therefore, is a mone tary definition of the future plans of the agency. MODERN management concepts hold to the principle that mana gers, regardless of their level in the or ganizational structure, should participate in planning agency operations and then should be held responsible for achieving the goals set. The finally-established performance budget is in effect a contract between these responsible managers and the pre sident calling for specific perform ance for the funds appropriated. To achieve the broad participation of responsible officials and to secure the necessary supporting material for making budget estimates, a high degree of plan ning, coordinating, and scheduling the work of budget a preparation is required. THE budget process in government agencies has four phases: 1. Planning—Establishing perfor mance objectives; 2. Estimating—Determining the amount of personnel, materials, services and facilities required to meet these ob jectives and the amounts needed to pay for them; 3. Reviewing—Ascertaining that the basic objectives, resource require ments and amounts are accurate and conform to overall guides and limjts; 4. Operating—Accomplishing ap proved objectives within the amounts provided by the budget. Planning performance budgets is a management planning process which in volves all officials and supervisors of an agency. Satisfactory results can be ob tained only if: 1. All responsible officials and su pervisors participate in planning agency operations; and 2. Each official and supervisor ac cepts full responsibility for achieving the goals established. THE responsibilities for planning per formance budget are: OFFICE OF THE PRESIDENT 1. The President will normally issue a fiscal policy statement establishing broad budgetary limits, areas of major program emphases, and such other mat ters as he feels are necessary for the guidance of the agencies in planning their budgets. 2. The Budget Commission will, in the “Call for Estimates’*, set forth specific guides and policies to govern the preparation of agency budgets. THE DEPARTMENT 1. The Secretary will establish a broad program for his department in ac cordance with the President’s policies. 2. The Secretary will require each Bureau Chief to submit to him a sum mary of plans and objectives of his bu reau for the coming year, based upon the broad program established by the Secretary. 3. The Secretary will review these with the bureau director, and make necessary decisions regarding the objec tives, the emphasis desired relative to other department programs, and the limits governing bureau programs for the budget year. 4. The Department Budget Officer will assist the Secretary in planning and implementing. THE BUREAU 1. The Bureau Director will plan and develop with each division chief the detailed objectives and work pro grams to serve as the basis of estimates for the budget year. Consideration must be given to: a. Changes in emphasis and goals for the budget year; b. Reduction of specific backlogs; c. Changes in ra(e of work due to improved methods; d. Programs expanded in line with policy; e. Programs contracted in line with policy. 2. The Bureau Budget Officer as sists the director in planning, and is res ponsible for securing and presenting factual data on work progress, rates of production, cost information, and per sonnel data; 3. In assisting the director, each Division Chief is expected to have read ily available such information as: a. Analysis of the present status of work; b. Analysis of the rates of produc tion; c. Estimates of progress for the rest of the period; d. Projected work programs for the budget year; e. Statements to support his fore cast. ESTIMATING is that part of the bud get process during which the re sources required to carry out the plan are determined and the amounts to be requested are established. The Budget Officer is the key person responsible for the satisfactory prepara tion of the estimate. His responsibil ity includes the technical preparation of the budget and coordination and scheduling of all activities concerned with estimating. 1. The Budget Officer will develop instructions specifically for the Division Chiefs and others concerned with the estimates, indicating the material each must prepare, and the form and manner in which it is to be submitted. 2. The Budget Officer will designate the portion of the work to be done by each responsible official. 3. The Budget Officer will prepare a detailed step-by-step schedule for ac complishing the work allowing time for necessary review and adjustment. 4. The Budget Officer will follow progress closely to make certain that schedules for the production of various types of data are adhered to. He will keep the Bureau Director informed of 5. The Budget Officer will check all material for completeness and con formance to instructions. He will guide and assist in any reworking of materials that may be necessary to integrate the various sections into the final submission. 6. The Division Chief and other supervisors as instructed will prepare material for detailed schedules and will draft justification statements covering their areas of responsibility. The ade quacy and soundness of material devel oped at this time is basic to the ac ceptance of the budget proposals during the reviewing phase. REVIEWING performance budgets is . that part of the budget process in which successively higher levels of the government management examine the results of the planning and estimating phases. These multiple reviews are the means whereby the final national budget is “shaped into a harmonious program and fiscal policy for the executive branch as a whole” as stated in the Revised Budget Act, Republic Act No. 992. Data are rechecked for accuracy and conformance to established guides and limits. Analyses are made to evaluate statements of resources required. Pro grams and projects are evaluated in terms of the over-all needs of the gov ernment and the resources available. RESPONSIBILITIES FOR BUREAU REVIEW 1. The Bureau Budget Officer will make detailed analyses and recommenda tions to the Bureau Director concerning estimates, pointing out any weaknesses, unrealistic estimates or non-conformance to plans or policies. The Budget Officer will schedule meetings between the Bu reau Director and the Division Chiefs for review and reconciliation of differ ences. At the conclusion of the Bureau Director’s review and upon approval of the final items to be included, the Bud get Officer is responsible for insuring that the bureau submission is technically sound, is mathematically accurate, and reflects the program and project deci sions made by the Bureau Director. 2. The Bureau Director reviews the entire estimate. The Division Chiefs will explain and defend their requests. The bureau Director will cause such changes as he believes necessary and will approve the bureau estimate for submission to the Department Secretary. RESPONSIBILITIES FOR DEPART MENT REVIEW / 1. The Department Budget Officer will analyze budgets and evaluate bureau budgets according to the Secretary’s policy guides or fiscal limitations. He will discuss questionable items with the bureaus, schedule hearings and reviews of each bureau’s budget by the Secre tary, make recommendations and prepare the transmittal document for the Secre tary to forward the department’s budgets to the Budget Commission. 2. The Secretary will conduct hear ings for each bureau’s estimates, decide on changes, and transmit the estimates to the Budget Commission together with a supporting statement covering the department’s program and explaining shifts in program emphasis. - 3. The Bureau Director and his Budget officer will explain the bureau’s budget in the scheduled hearings. The Bureau Director will accept responsibil ity for defending and carrying out the plans of the finally approved estimate submitted by the Secretary to the Bud get Commissioner. EXECUTIVE REVIEW ' The Secretary and Bureau Directors will explain and' defend the budgets to the Budget Commission. The Depart mental and Bureau Budget Officers will assist as requested and maintain liaison with the Budget Commission. OPERATING is that part of the bud get process during which action is taken to accomplish established objec tives within the approved resources. M^jor responsibilities in this phase are assigned as follows: THE BUREAU 1. The Budget Officer will realign amounts allotted and objectives agreed upon for bureau programs and projects into operating budgets for each respon sible organization unit. He will prepare periodic reports to the Bureau Director and Department Secretary on the status of the works and the funds utilized. 2. Division Chiefs will conduct operations so as to attain approved objectives in accordance with their operating budgets. 3. The Bureau Director will receive timely reports about the work in prog ress and through these reports identify problem areas. He will be responsible to the Secretary for significant deviations from planned accomplishments. THE DEPARTMENT The Secretary will receive reports on the work status and will take neces sary remedial actions. He will be respon sible to the President for significant deviations from planned expenditures and accomplishments. □ THE REPUBLIC Energy: some blunt facts about sources... THE power situation in the Philip pines is much worse than we have always thought it was. We always said before that fossilfired generators or generators of ma chines that produce electricity consti tute 75 percent to 85 percent of our sources of energy. That is not true. What is true is that 94 percent of our energy or our electricity is right now produced by fossil-fired generators. And it will serve no purpose for anyone, in any way, to mislead our people. It is now necessary to inform our people pointblank, frankly, and can didly, that only six percent is produced from hydroelectric power. And it is now the program of government to move as fast as possible into the generation of electricity from hydroelectric sources as well as from the geothermal sources that we are developing right now. There have been optimistic fore casts about our converting our entire country into consumers of electricity that would come from non-fossil fired generators by 1985. This just isn’t pos sible. It is not possible to convert the entire country into a country that will utilize only hydroelectric and geother mal power within the next 10 years. Even if we were to bankrupt our selves—bankrupt the government and the private sector—we could not do it. The most reasonable and feasible solu tion—the compromise that we may ar rive at—would be to reduce the fossilfired generators from 94 percent to 75 percent by 1985. That’s quite a big letdown isn’t it? But I thought it necessary and wise to - e'ur pccpk ci. the '". .is. I’m al ways horrified when I read that there are ambitious government-programs to con vert the sources of electric power by 1985 into non-fossil fired generators. This raises false hopes among our people. We must accept the reality that while we were paying P2.2 billion be... and about savings LAND transportation and industry ac count for 35 percent and 32 percent, respectively, of all petroleum consumed in the country. > Power generation accounts for 18 per cent. Meralco alone consumes 14 percent of the 18 percent. Shipping, aviation, fishing, and other sectors account for less than 10 per cent of the balance. Thus, the greatest savings in energy use will come through eliminating waste ful consumption of petroleum fuels in cars, trucks, and buses as one class; sec ondly in industry; and thirdly, by con serving electricity, particularly in the Metropolitan Manila area. These three sectors together account for over 80 per cent of all petroleum use in the country. Simple, isn’t it? Eighty per cent of all the petroleum consumed in the coun try is in the hands of those who drive cars, trucks, and buses; in the hands of those who are in industry; and of those who live in Greater or Metro Manila. This would make it simple for any one to plan and say: “All right, all of you therefore, cut consumption by 10 per cent or, say, 50.per cent.” But the plans are easier to make than to imple ment. There are many steps that can be taken by everyone right now to elimi nate wasteful consumption of petroleum. The momentum of the energy con servation movement—which was, of course, started way back in 1973 when we had the system of allocation of gas fore the oil crisis, we are now paying P7.2 billion every year. From $200 mil lion, we are now paying $840 million. And before the next year is over, we will be paying about $1 billion. These are sobering facts. In fact, all those who study these figures cer tainly are shocked into the realization that we are tardy in taking precautions against this problem getting out of hand. While we are in the process of ex ploiting our geothermal and hydroelec tric potential, we are also moving into nuclear power generation. We are pres ently studying the impact of a costly nuclear power plant which may cost as much as $100 million or $1 billion inso far as it may curtail other projects in our country. For, while our credit is good, we can borrow only so much ev ery year. And this year, it may be necessary to allocate these credits to various projects we have in mind. One happy development is that we have now discovered nuclear deposits or uranium deposits in the Philippines. The Philippine Atomic Energy Commission has successfully processed Philippine uranium ore and produced the formula of u-38 by a completely Filipino team. The potential sources of uranium in the Philippines on geology considera tions are: (1) Camarines Norte, (2) Sa mar, (3) Ilocos Norte, (4) others, like Negros and Mindanao. For every 600 megawatt nuclear power plant, we need 60 tons of urani um per year. It costs presently $32 per pound, and the price is still on the rise. Whether it is oil, uranium, or even the machinery for geothermal units for hydroelectric power, the production cost of energy is going up. Across this broad terrain of escalating prices, therefore, the logic of conservation becomes more valid and urgent. - PRESIDENT MARCOS at launching of ENERCON movement —was somehow lost. And now it is nec essary to regain the momentum. National demand for petroleum in 1974 was successfully reduced to 65 million barrels which was five million barrels less than 1973. But I am inform ed by the Philippine National Oil Com pany that the country will consume about 72 million barrels in 1975, which will be 10 percent more than 1974. And consumption in 1976 is projected to grow by another 11 per cent to 80 million barrels, unless the energy conser vation program is successful. Let us remember that every barrel of oil saved means over $ 12 of import savings and every percentage of con sumption that is saved means over a $9 million for the country. 1 appeal to everyone for their fullhearted participation for the national economic reasons that I have already mentioned, knowing that each individ ual effort at saving of energy redounds to his own benefit as well as that of the country. I am prepared to implement appro priate economic sanctions against those who waste energy, but 1 hope that this can be kept to a minimum. It is best that the State and the government do not step in, but that our people develop the capability to face up to a challenge and to a crisis without proddings or the coercive power of government. - PRESIDENT MARCOS at launching of ENERCON movement new oil laws HE thrust of the governmerit’s oil conservation measures is to offset the additional $ 100 million in the coun try’s oil bill as a result of the OPEC oil price increases. To achieve this, President Marcos has issued the following directives: Letter of instructions No. 328 (Issued on 27 October 1975) Under this Letter of Instructions, all government agencies were required to: —reduce their oil, electricity, and power consumption by at least five per cent except in cases where it would prejudice the national interest; —desist from putting up Christmas displays or lights that consume electri city; —avoid the purchase and use of big cars which are heavy users of gas and oil; and —shut off all neon, advertising, and building lights not later than midnight daily except those that are needed for the protection and security of their premises. LOI 328 also specified tasks for the following government agencies: THE DEPARTMENT OF INDUSTRY a. To direct all industrial plants, factories, commercial establishments and other entities consuming at least P3-million worth of fuel, oil and power yearly to formulate and submit compre hensive programs of power and energy conservation, the administration and im plementation of which the DOI shall monitor. b. To study, formulate, and rec ommend to the President, standards on energy use for industrial plants and fac tories. c. To review the country’s national development plans and attune these to available energy resources, in collabora tion with the National Economic Devel opment Authority and the Board of In vestments. THE PHILIPPINE NATIONAL OIL COMPANY, THE NATIONAL POWER CORPORATION, AND THE NATION AL ELECTRIFICATION ADMINIS TRATION. To organize a pool of engineers and combustion efficiency experts to assist industrial concerns and factories in de veloping their conservation programs THE DEPARTMENT OF FINANCE To review and study taxes for items considered significant power-users —such as big automobiles, sports cars, gasoline-powered trucks and luxury ap pliances—and recommend to the Presi dent the necessary imposition of taxes and policies to discourage the use of uneconomic machines. The LTC was to . review the registration fees and require ments for such cars and trucks, and n^ake recommendations to the President. THE DEPARTMENT OF TRADE To study and promulgate regula tions on the use of all types of lighted advertising signs, particularly neon lights. Initially, the Trade Secretary was to prohibit the operation of all types of lighted advertising beyond midnight THE LAND TRANSPORTATION COM MISSION The LTC, the Philippine Constabu lary and all police agencies were to strict ly enforce all laws and regulations pro hibiting the operation of dilapidated, unroadworthy and inefficient motor vehicles and to intensify traffic-flow improvement campaigns. The Defense Secretary was to make available the authority and resources of his office to other government agencies to insure that power conservation and efficient fuel and energy utilization programs, regulations and directives are enforced. Letter of Instructions No. 329 (Issued on 27 October 1975) This decree enjoined the entire country to conserve fuel and energy, or face gas rationing. It also directed the Commission on Audit to inform govern ment officials and drivers that the un authorized use of government vehicles is punishable with the arrest of violators. Letter of Instructions No. 339 (Issued on 20 November 1975) Under this LOI, the President di rected the Philippine National Oil Com pany to be responsible for implementing the government’s comprehensive pro grams for the development and use of the country’s coal resources as an alter native source of energy. ON 11 December 1975, President Marcos launched the “Energy Con servation Movement” in Malacanang. This is a loose organization of private corporations and associations organized by the Philippine National Oil Company. On launching the movement, the President issued three Presidential de crees designed to deter wasteful and uneconomic use of fuel. Presidential Decree No. 843 Under this, the annual registration fees for private automobiles were fixed in accordance with their factory or seat ing weight, as follows: Presidential Decree No. 844 PD 844 imposed an energy tax on private non-commercial aircraft. Presidential Decree No. 845 This decree imposed energy tax on motorized watercraft used for pleasure and recreation. It also amended the the Tariff and Customs code. On the same occasion the Presi dent also issued Presidential Decree 846 which required all sectors of mass media to participate actively in the in formation and educational campaign for the conservation of fuel by providing for free space and time in their newspapers or on radio and television stations. □ Rising cost oS electricity MERALCO, which consumes about 14 percent of the Philippines’ total oil imports, paid only $1.68 per barrel (C & F) for our oil imports in 1960. In 1972, the cost per barrel had risen to only $2.15. In 1973, it rose to $3.00 or P26.15 per barrel. In March of 1974, it had risen to $9.55 or P83.62 per barrel. Up to October of 1975, the price had escalated to over $ 11.00 per barrel, and now it is more than $12.00 per barrel. The Philippines is in the unhappy position of depending almost entirely on imported oil to propel its economy. We have large rivers and waterfalls, and coal of low heating value, but all those contribute only eight per cent of the energy we need. In 1964, we were importing only 30.8 million barrels of oil. In 1973, oil imports rose to 65.9 million barrels. In 1964, the country’s oil bill was only about $61 million dollars. In 1973, it was $198 million dollars. In 1974, it had risen to $750 million dollars. In 1975, it will be about $840 mil lion dollars; and in 1976, it is estimated to escalate to $980 million dollars at present OPEC prices. Considering that our country’s total foreign trade in 1974 was about $5.8 billion dollars, of which $3.1 billion dollars was for imports, oil represented about 24 per cent of our import bill. In 1975, the cost of oil is about 27 per cent of our import expenses. In 1976, it will represent about 32 per cent. □ 1-31 December 1975 5 Asiong Aksaya. Matakawsailaw. Gov’t offices get moving on conservation programs ENERCON manifesto HERE are some examples of how var ious government offices are in volved in the campaign to conserve en ergy. The Department of Industries, for instance, is conducting a nationwide en ergy audit among private industries which consume at least Pl million worth of fuel and electricity a year. The Energy Conservation Council of the Philippine National Oil Company is designated to collate these energy audit reports from the private industries. The scope of the audit goes back as far as nine months ago. Private oil companies are being used by the Energy Conservation Council to get accurate data on petroleum products and power consumption of private industries. , The Department of Industries has set a deadline of January 15, 1976, for submission of completed energy audit forms. In addition to the energy audit, the DOI is also requiring all private indus tries to submit monthly statistical energy consumption reports beginning from next month. The DOI has directed the private oil companies to gather these monthly reports from their client indus tries. The aim is to enable the govern ment to monitor the energy requirements of the country and to assist the govern ment to institute any appropriate meas ures. On the other hand, the Philippine National Oil Company has embarked on the development of coal as an alterna tive source of fuel for the mining and cement industries. According to the PNOC, the private industrial sector consumes 32 percent of the country’s total oil consumption. Of this 32 percent, the mining industry accounts for five percent and the cement industry for 4.8 percent. If all the ce ment and mining industries in the coun try converted their power sources to coal, the government could save at least $84 million annually. An attempt to instill the value of conservation among students and youth has been initiated by the Department of Education and Culture. The DEC was directed, through LOI 329, together with the Department of Local Government and Community Development and the Department of Public Information, to conduct an edu Asiong Aksaya. Waldas sa gas. cational campaign on fuel conservation. As defined by the DEC, resources conservation involves the most econom ical use of all materials such as paper, lumber, tin and other metal, cloth, water, and energy. To propagate this concept of re sources conservation, the DEC intends to hold nationwide seminars of teachers in all levels. In DEC Memorandum 190, Educa tion Secretary Juan Manuel directed all schools to conduct seminars on re sources conservation and to integrate this subject in such disciplines as Sci ence, Social Studies, and practical arts. All heads of schools and officials have been charged with the responsibility of conducting the seminars. In addition, vocational and tech nical schools were directed to include in their curricula courses in the conserva tion and efficient utilization of fuels, electricity, power and other sources of energy. Another aspect is the information and educational campaign being coor dinated by the Department of Public Information. All conscious efforts to conserve fuel—such as people seeing bus and jeepney operators holding down on un necessary trips, owners and managers of big industrial establishments exhort ing their employees to use energy judi ciously, and governors and mayors con ducting seminars on how to conserve energy—are information in themselves. But these are being complemented by a DPI information program on energy conservation. This information campaign of the Department of Public Information is di rected to newspaper readers and radio TV listeners rather than to the big en ergy users. The rationale is: “Any rise in oil prices affects mainly the consumer. It is he who feels the brunt of higher oil prices. The DPI’s energy conservation information effort, therefore, is direct ed at him, not at the big users who can be made to comply with state regula-. tions without accompanying publicity gimmicks or information programs. We are telling the citizens to save gas to minimize the impact of higher oil prices. If, in the end, the oil crunch does not THE energy crisis is real. It is world wide. It is here. The Philippines is totally dependent on foreign sources of crude oil. Until we strike oil, we will continue to im port our increasing requirements. As a developing country, we need crude oil to fuel our economic develop ment; but our energy requirements are so huge and the price of oil is so high that the value of our peso can further deteriorate. This will mean higher pro duction costs for industry. This will mean higher prices of basic consumer goods and services. The price of crude oil has been drastically increased by the oil export ing countries. We cannot afford to continue our ever increasing pattern of oil consump tion. We cannot afford to pay the in creased cost of our oil requirements. We realize, however, that we cannot do much about the increased prices of crude oil. But we can and we must do some thing about wasteful energy consump tion. Unless we begin to conserve energy now, we may have to face such disrup tions and inconveniences as brownouts and rationing. We have heard the call of President Marcos for a national energy conservacorfie, then the public will credit the favorable result to the efforts of govern ment which had warned them of dire consequences. If it comes, however, the people will realize they have been properly informed.” The task of keeping the citizen continuously aware of the need to con serve fuel is not easy. However, by com bining orthodox and unorthodox com munication approaches one may per haps be effective. For this purpose, the DPI has po pularized the cartoon character “Asiong Aksaya”, a despicable slob who goes about his wasteful way. “Asiong Ak saya” was designed to highlight tidbits on how or how not to conserve energy. This is complemented by straightforward information through features, news, and editorials—with the assistance of the private print and broadcast media. Information machinery for energy conservation, involving the private me dia, has been set up by the DPI. Editors of the major dailies, as well as members of the Kapisanan ng mga Brodkaster ng Pilipinas, were formed into a Media Committee for Print and a Media Com mittee for Broadcast. Through these two media committees, information and how-to tips on oil conservation are be ing disseminated. Additionally, there has been the or ganization of “Energy Conservation Of ficers’1 in the private and government sectors. These “Enercon Officers” in each organization are responsible for seeing that the government’s energy con servation measures are complied with down to grassroots level. □ tion effort. To lead the effort, the Presi dent has mobilized the government ma chinery towards energy conservation. But government efforts must be complemented by the private sector. The success of a national energy con servation program depends on the sup port of the private sector. It is for this reason that we are now launching the Energy Conservation (Enercon) Movement. The Enercon Movement is a manifestation of a na tional determination to do something about the energy crisis. The Enercon Movement will bring together all sectors of the community in a concerted effort to conserve energy. Working together in the Enercon Movement, we pledge to dedicate our selves to generate greater awareness among our people, of the need to con serve energy. We will promote discipline in our people’s energy consumption habits. We will bring the message of Energy Conservation to every home and citizen. We call upon our people to join us in a unified effort to conserve en ergy. Let us work together to save our country from the energy crisis. Save Energy. Save Yourself. □ Private sector gets involved IN RESPONSE to the President’s call, private sector leaders from civic, in dustry, transport, arid'oonsumer groupT organized on November 26 1975, the Energy Conservation Movement. Its ob jectives are: 1. To generate public awareness of the urgent need for energy conservation and efficient fuel utilization. 2. To promote sustained involve ment in the project by energy users. 3. To establish energy conserva tion guidelines and standards. 4. To encourage energy conserva tion through a system of incentives and sanctions. The Steering Committee is com posed of Mr. Abello, Chairman; Dr. Ma nuel Lim and Mr. Petronilo Guevara, Vice-Chairmen, with Messrs. Cesar Bue naventura, Fred J. Elizalde, Manuel Ar royo, and Atty. Rogelio Quiambao as Members. SERVING as the secretariat coordina ting and monitoring body of the Movement is the PNOC Energy Council (ENERCON). Headed by Petrophil VicePresident, Pablo V. Malixi, ENERCON also performs th6 following: 1. Develops energy conservation guidelines and standards. 2. Develops and evaluates energy conservation programs. 3. Conducts energy audit and es tablishes monitoring system. 4. Provides technical assistance to industries through technical pools, in cooperation with government/private power companies, oil industry and relat ed sectors. 5. Undertakes public information program, in cooperation with the De partment of Public Information, Na tional Media Production Center, Depart ment of Education and Culture, and the Department of Local Government. 6. Liaisons with civic, trade, pro fessional, and consumer groups. 7. Reviews industries’ capital/expense budget towards providing incen tives and assistance concerning energy equipment. ENERCON may be contacted at the Petrophil Building,7901 Makati Ave nue, Makati, Rizal, Tel. No. 88-03-31. □ THE REPUBLIC How the local officials were audited IWhat is being done now about the audit of local officials'! The information gathering phase was finished on August 31 and now the President himself is going over the audit results. All the information is on file and we provide the President with par ticular information he wants at any time. To help the President, moreover, a set of recommendations has been sub mitted to him by the cabinet coordina ting committee composed of the 12 cab inet members of the audit team. 2 Did the audit teams do a thorough job! Or, should they have had more time? In our opinion, they did their job extremely well. We have about IS,200 local government officials. We audited 14,380. About 600 officials were un audited and 200 local positions were vacant. For a three or four month pro ject, the audit was rather well done and and I think there was no need for more time. 3 Why were 600 officials unaudited? Some had died. Others were out of the country. A few were sick at the time. We verified claims of sickness. Others were simply inaccessible, as in troubled areas in the South which we could not penetrate. However, in these areas, the local officials were surveyed by other groups composed of, for in stance, military people in the troubled areas. Such surveys were not audits, strictly speaking, but were inventories which were also a part of the audit’s functions. The inventories on the offi cials contain general personal informa tion, the general opinion of the people about the officials, cooperation with na tional projects, and other such general matters. A-Did the performance audit teams T1 meet obstacles to an efficient check up of local officials? Did they, for in stance meet any threats, bribery or con cealing of records? In any undertaking of this nature, operational problems are encountered. However, I think that, because of the cooperation of the participating agen cies, the exercise went rather smoothly. There were no reported threats. There were, I think, one or two isolated reports of apparent efforts to influence the au dit teams; but when we received such reports, all of the audit reports of the audit teams involved were invalidated. And then new audits were called for. 5 What guarantees are there that the audit teams have not been offset by local officials' attempts to hide any possible bad marks? In the structure of the exercise, we had built-in cross-checking systems. First, we conducted research on the programs the national agencies had conducted on the local level. The national agencies gave us their ratings of local officials’ participation in their programs. Second ly, we required spot checks of claimed projects. The people who made spot checks certified the existence of claimed projects so that, in case of any problems, we would know whom to ask about the projects. Thirdly, we conducted a rec ords check on the local level. We check ed municipal records and conducted in terviews to check on claimed projects. We also made what are called exception reports. The exception reports were done by the regional audit teams. These exception reports included such infor mation as they thought were material to the evaluation of local officials but which could not really be substantiated by the norms of formal evidence. In other words, matters of common knowl edge: everybody knows, for example, that the governor is like this, the mayor is like that; things like these were in cluded to be verified later on. Reports of citizens came intq these exception reports. There were two types of excep tion reports: those done by the regions themselves and those based on reports An interview with Ronaldo V. Puno, who directed the Local Government Performance Audit for the DLGCD. CABINET members confer while helping in the audit. given directly to the department or to other national agencies. The second type was done here in the central office, based on reports received from citizens through letters and the like: Newspapers, backfiles, etc., were studied to see if there were any anomalies or problems unearthed by the press in any particular area. All this data was evaluated and classified as positive or negative. These were also classified on the basis of the strength of evidence involved in the alle gations. 6 Some say that the citizens should have a chance to audit their own of ficials. Will there be a citizen's opinion poll? As I mentioned earlier, the reports of citizens were all included in the files on local officials. We did consider a cit izens’ opinion poll sometime last May. But, based on studies, such an opinion poll would require a minimum of 300,000 respondents. This was not really feasible. There were such problems as getting trained interviewers and a selec tion of sampling. In any case, there were very difficult problems. If, for example, we worked on this for a year or two, then we might have done a more detailed survey. But in a seven-month period, it was not possible. A citizens’ opinion poll is generally impressionistic; we feel there are other indications of popular support, which are, of course, what a citizens* opinion poll is meant to measure. Other signs of popular support, for example, would be the nature of cooperation of the people concerned in the projects of the local official, and the support given by the barangays to a particular local official since the barangays also represent the grassroots of our society. 7 Were barangay officials included in auditing the officials? Not as a rule; but there were some barangays that,'on their own, wrote us formal resolutions and made judgments on local officials. In other areas where there were clear signs that we had to measure further the popular support en joyed by local officials, we did ask some barangays. 8 What kind of information did the ba rangays give? Barangay officials are normally close to what the people say. You cannot expect a barangay captain to tell you, for example, what are the development projects of the mayor because he would MR. RONALDO V. PUNO briefs cabinet members involved in the audit. not have access to this information. But he would have access to the opinion of the people in his particular barangay, as to whether or not they like of dislike their mayor. Inquiries on reports, for in stance, that a mayor is an absentee or is oppressive were directed to the ba rangays. 9 What were the bases for evaluating an official? The premises for rating an official were integrity, efforts at peace and or der, development projects implemented, and social concern or efforts exerted to uplift the quality of life of the local cit izens. Through these, it is clear that the president wanted a lucid view of per formance, not popularity. When the per formance of an official appeared inde finite—when we could not say, one way or the other, how his performance had been on the basis of records (and there were many cases which were in the gray area)—then we turned to the peo ple. If we could not decide on perform ance, then we went to other things like popular support. Popular support be comes more important in such cases. However, some people believe that even if an official has popular support, if he does not improve the life of the citizens, then he should be reminded that his job is to be concerned about the quality of life of his people. So, at the very least, this is basically what will happen—that they shall be reminded. How were local citizens consulted? We consulted them through the ba rangays. We maintained contact with the barangays through the office of the Federation of Barangays. On the local level, we did not call for assemblies. We just conducted infor mation-gathering, usually directed to the barangay captain. A barangay captain lives in his ba rangay. So he is in constant touch with his people. I suppose he would be know ledgeable about what the people think. This should be noted: Barangay officials are an additional source of informa tion. The information of local officials was by no means limited to what the ba rangay said. The accent of the audit was on performance. UHow were you able to measure in tegrity? The absolute measure was made in terms of cases filed ^gainst the local offcial. We had a file on all criminal and administrative cases of all local officials. However, there were qualitative meas ures of integrity and these came in the form of the exception reports made by the audit teams. How were the cases evaluated? They were, as noted earlier, divid ed into criminal and administrative cas es. Then the cases were rated as to whether they were pending, dropped, exonerated, appealed or whether the penalty was served. Most of the pend ing cases, except for criminal cases, were filed here with the DLGCD. When ever they were filed with us, a survey of the evidence was conducted. This has been going on for some time now. For audit purposes, we did a survey of all cases with us and the results of this are included in the information given to the president. With respect to the other cases, crim inal cases for example, we have not as yet had a complete file on the evidence related to such cases. We just dealt with criminal cases according to the status of each. A pending case, for example, would be more serious than one from which the official has been exonerated. How did you deal with local offi cials whose performance records before martial alw were bad but who improved during martial law? Our audit covers the period from January 1, 1972, to May 31, 1975. So what they were before January 1, 1972, would not matter much anymore. If he was bad then, and then changed upon the advent of martial law, we think that were the audit teams com! so that each facet of an officials’ performance would be effec tively audited? The regional audit teams were com posed of the regional directors of the 12 member departments. These included the regional director’s for highways, the re gional director’s for public works, the re gional development council chairmen for NEDA, the PRODs, of each region, the DLGCD regional directors, the NBI regional directors, the DND representa tives. The audit teams were very com petent groups on that level. Then on the provincial level, a similar composition. Then we put in a restriction that nobody assinged to a particular place could audit the same place. He had to au dit another place. This was to remove the possibility that he had friends in the area he would audit. Nobody was al lowed to audit his place to station. How many teams were fielded? All in all, we had about 2,200 who actually were involved in the audit teams. Aside from this, we had 144 regional audit team members. Then we had a central office staff of about 80 who were conducting the research in the agencies. And then, of course, the na tional computer' center had a large com plement of people who were handling the computerization of data. IZC Did you have enough cooperation IO from the other agencies? More than enough, actually. I think that their cooperation was overwhelm ing. Frankly, I was surprised with the help we got. We thought that we would have to rely on our field people, but this was not the. case. Everybody helped. Another thing that was very notable was that each agency shouldered its own expense. They did not give us any pro blem about logistics. nDid you also have enough coopera tion on the national level? Definitely. The cabinet members themselves spent a lot of time delibera ting on the audit. The deliberation hours were even divided into two phases: the sub-team hearings and then the en banc hearings. For the sub-team hearings, the 12 cabinet members divided themselves into committees of three. Each com mittee tackled specific regions of the audit. Each committee dealt witn a region from which none of the mem bers originated. □ 1-31 December 1975 7 Checking up on the corporations THE 100 or so government corpora tions—which up to now have been on various fringes of government con trol—are starting to feel the effects of the overall effort to improve manage ment of public resources and public servants. As a first step, the Civil Service Commission acted to bring the estima ted 165,000 employees of these corporaA reminder from the CSC THE Civil Service Commission sent this letter to the heads of those government corporations which are not yet complying with the Civil Service Rules: We wish to call your attention to the provision of the Constitution which places every government-owned and con trolled corporation within the ambit of the Civil Service. This provision is re iterated in Presidential Decree No. 807, the Civil Service Decree of the Philip pines, specifically, under Section 4 which states as follows: "The Civil Service embraces ev ery branch, agency, subdivision, and instrumentality of the government, including every government-owned or controlled corporation whether per forming governmental or proprietary function. ’’ We realize, however, that most cor porations were not governed by Civil Service Law and rules in the past so that it is possible that not all their res pective personnel can meet squarely the merit requirements of the Civil Ser vice. We wish to allay any apprehen sion, however, that Civil Service cover age of corporations would result in a sweeping change in the personnel struc ture of these corporations. On the con trary, Presidential Decree No. 807 in its Section 56, provides for a transition that would allow personnel of govern ment-owned or controlled corporations whose positions are not embraced in the Civil Service to continue in the ser vice until they have been given a chance to qualify in an appropriate civil service examination. In this connection, it is our wish that we could reach a working arrange ment to facilitate the conduct of such examinations, or any other selection de vice to achieve our collective goals. Meanwhile we expect that you would now submit to us all new appoint ments of that corporation,original and promotional, for appropriate action, and that these shall be made in accordance with Civil Service Law and rules. We also wish to call your attention to Section 9 of Presidential Decree No. 807 which provides that an appoint ment shall take effect immediately upon issuance by the appointing authority if the appointee assumes his duties imme diately and shall remain effective until disapproved by the Commission; with the appointee being paid at once. As you will note, this provision seeks to facilitate immediate payment of em ployees and, consequently, lead to a greater motivation for work. However, all appointing officials are required to submit all appointments to the Commission within thirty (30) days from issuance, otherwise, these appointments become ineffective. It is also requested that you furnish us a copy of the plantilia of personnel for our records. □ Very truly yours, JACOBO C. CLAVE Acting Chairman tions into the orbit of the civil service rules. In a separate directive, President Marcos ordered the Budget Commission and the Reorganization Commission to review the corporations and make rec ommendations including reorganization and abolition if necessary. Ever since this category of govern ment-owned or controlled corporations started cropping up early in this cen tury, many have had ambiguous rela tions with the Civil Service. Addition ally, some have created an image of im provising their functions as they go along. It is generally assumed that, unlike a government bureau, a corporation should operate in a commercial way. However, President Marcos noted that only a miniscule number are viable and profitable. Differences over terminology and categorization make it hard to get the exact number of government-owned or controlled corporations. The ■Civil Ser vice Commission puts the count at 75. Some other government sources put it at nearer 125. The Audit Commission, in its reckonings, divides them into Gov-, emment financing corporations; govern ment utility corporations; government utility corporations; government devel opmental and other corporations; and self-governing boards, commissions and agencies. During November, the Civil Service Commission sent letters to the corpora tions pointing out that they were now part of the Civil Service proper. It re quired that future staff appointments be submitted to the Commission (see letter in Column One). According to the Civil Service Com mission’s statistics, 28 of these corpora tions were already submitting their ap pointments and other personnel actions while 47 were not. One obvious question that crops up is pay differentials, since it is known that many people in government cor porations get higher. salaries and more fringe benefits than their counterparts in the government proper. Such matters are likely to be con sidered during a transition period which is provided for. Government staff plan ners consider that, in principle, it would clearly be more positive to bring the pay of those in the government proper into line with scales existing in the cor porations rather than the other way around. However, they concede this cannot be done overnight. The review of government corpora tions, which the President ordered, ob viously cannot be done overnight either. According to Director R. de Castro of the Budget Commission’s Manage ment Bureau: “This is a tremendous task if we are going into a real in-depth management audit.” He said that at present guidelines were being drawn up for the review, and probably some corporations would be singled out for immediate attention. □ Everyone stands to benefit THE public corporations, the govern ment and the nation as a whole gains a number of benefits from the Ci vil Service coverage of the government corporations. Firstly, it means uniform applica tion of the merit system and the elimi nation of the “padrino” or “palakasan” system in the appointment process. This will spare the corporations the discom fort they have had to suffer in trying to please and accommodate the proteges of the powers that be. The participation of the Civil Ser vice Commission in the appointment, HERE is the background to the status of government corporations. The 1935 Constitution said: "A Civil Service embracing all bran ches and subdivisions of the government shall be provided by law." It was silent on government corpo rations. Perhaps this was intentional by the 1934 Constitutional Convention, considering that most government-own ed at controlled corporations were then organized and operated, like any other private corporation, by a group or groups of persons, the government being then just a majority shareholder in them. The Convention’s obsession at that time was to include in the Constitution provisions regarding the merit system as a necessity in modem times. This was to check the proclivity of political leaders, department heads and bureau directors to extend temporary appoint ments and to make numerous exemp tions from the examination require ments. On January 6, 1950, Republic Act 422 authorized the President to reor ganize executive departments, bureaus, offices, agencies and other instrumental ities, including the corporations owned and controlled by it. , Executive Order 319 on May 25, 1950, said: "The officers and employees of the Department of Economic Coordi nation and of the different corpora tions and agencies under it that may hereafter be employed shall be sub ject to the application of the Civil Service rules and regulations as in the case of other officers and em ployees of the government. ” On January 5, 1951, Executive Or: der 399, known as the Uniform Charter for Government Corporations, said in Section 14: "All officers and employees of the corporations shall be subject to the Civil Service Law, Rules and Re gulations, except those whose posi tion may, upon recommendation of the Board of Directors and the Administrator of Economic Coordi nation, be declared by the President of the Philippines as policy determin ing, primarily confidential or tech nical in nature." To implement this, appointments of officers and employees who were taken on thereafter were submitted to the CSC for approval. Those who had been earlier appointed but were non-eligibles could not be promoted or receive salary in creases without losing their permanent status unless they qualified in an appro priate examination. DESPITE these executive orders, of ficers and employees of some gov ernment corporations maintained their exemption from CSC coverage- namely corporations with primarily proprietary functions and whose personnel were cov ered by collective bargaining agreements. Some others who were under Civil examination, promotion, discipline and other personnel processes will insure adherence to, and uniform application of, the Civil Service law and rules. But this benefit has its attendant cost. It means the public corporations must give up part of their autonomy in personnel policies and programs. The cor poration heads no longer have absolute say in recruitment, examination, pro motion, administrative discipline and the like. However, the Civil Service Commis sion does not, and will not, stand in the way of the efficient, economical and Service coverage—operating in corpora tions but performing purely government functions-tried to be excluded. Exam ples were personnel of the General Au diting Office (now Commission on Audit) assigned to government corporations. The Civil Service Act of 1959 (Rep ublic Act 2260 of June 19) said in Section 3: "The Philippine Civil Service shall embrace all branches, subdivisions, and instrumentalities of the govern ment, including government-owned or controlled corporations." Interpreting this, the Secretary of Justice said in Opinion 238 of 1959: ‘The law does not make a dis tinction between those corporations performing governmental functions and those performing proprietary functions. Where the statute .» ex pressed in general language, it should be applied in all cases witMn its terms, and its meaning may not, by construction, be restricted or qual ified. Consequently, governmentowned or controlled corporations per forming proprietary functions and their employees are within the scope of the new Civil Service Law." REACTING to the Civjl Service Act . of 1959, government corporations with collective bargaining agreements demanded recognition of the agreements. A court action was filed to compel the Ci vil Service Commission to recognize col lective bargaining agreement with man agement. Pending resolution, the CSC issued Memorandum Circulars Nos. 1 and 3 of 1964 declaring that officers and em ployees of government-owned or eon trolled corporations performing proprie tary functions were exempted from the Civil Service Law and Rules; and that the status of their employment shall be governed by the terms and conditions of their collective bargaining agreements. In other words, they were considered contractual employees in the exempt service under Sec. 6 (c) of Republic Act 2260. * This status was recognized in Rep ublic Act 6040, which amended Rep. Act 2260. Sec. 6 (c): The Exempt Service —The exempt service shall consist of the following: xxx xxx xxx "(c) Persons employed on con tract basis xxx and those in govern ment-owned or controlled corpora tions performing primarily proprie tary functions with collective bargain ing agreements." However, the promulgation of the New Constitution cut short this exemp tion from the coverage of the Civil Ser vice. To quote: i "The Civil Service embraces every branch, agency, subdivision, and ins trumentality of the government, in cluding every government-owned or controlled corporation." □ profitable operation of these corpora tions. The new leadership of the Com mission has inaugurated the so-called “facilitative service” rather than bu reaucratic control. Hence there can be a more meaningful and fruitful relation ship between the Commission and the various agencies of government, includ ing public corporations, to realize the government’s development goals. The standardization of salaries in all government offices will minimize fre quent turnover of employees which has resulted in overstaffing some offices while paralyzing others. □ I. GOVERNMENT FINANCING CORPORATIONS 1. Central Bank of the Philippine* Established under Republic Act 265 of January 1949 to administer the monetary, banking and credit system of the Philippines. Departments and offices are consolidated in five sectors, each under a Deputy Governor: a) International Operations; b) Domestic Operations; c) Supervision and Examination; d) Re search; and e) Administrative Management. Principal sources of funds are income from foreign exchange, foreign investments, domestic loans and advances, domestic investments and other miscellaneous sources. 2. Development Bank of the Philippines Established primarily to provide credit facilities for rehabilitation, development and expansion of agri culture and industries, the broadening and diversifica tion of the national economy, and to promote the establishment of private development banks in the provinces and cities. Established under RA 2081 ap proved on June 14, 1958, sources of funds are collec tions on loans and investments, collection on guaran tee advances and networth increment. 3. Philippine National Bank In operation since July 22, 1916. It has nine overseas offices, 72 metropolitan and provincial branches, 33 agencies, 23 sub-branches and 32 exten sion offices and units. Its corporate existence, with authorized capital stock ot Pl billion, is provided for under RA 1300 as further amended by Presidential Decree No. 64 dated November 20, 1972 and Presidentail Decree No. 171 dated April 10,. 1973 other wise known as the Revised Charter of the PNB. Has a leading role in the Masagana 99 rice program as financing channel and furnishing the services of its credit technicians. 4. Government Service Insurance System A non-stock corporation with main office in Manila and 14 regional agency or extension offices. Primary objectives are to promote the efficiency and welfare of government employees and to replace the old pension system. Created under Commonwealth Act 186, it was approved on November 14, 1936, and started operation on May 31, 1937. The System administers 5 funds: Life Insurance Fund, Retirement Insurance Fund, Property Insurance Fund, Medicare Insurance Fund, and Pension Fund. GSIS has a massive low-cost housing program. It administers Medicare Funds for the welfare of members of the system. It pays dividends to members twice a year. It is governed by a Board of Trustees with 8 members. 5. Land Bank of the Philippines Created under Republic Act 3844 otherwise known as the Agricultural Land Reform Code of 1963. Its purpose is to finance the acquisition by the government of landed estates for subdivision and resale to tenant fanners. Management is vested in the Board of Trustees composed of a chairman and four members. 6. Social Security System The Social Security System establishes, de velops, promotes and perfects a sound and viable tax-exempt social security service suitable to the needs of the people throughout the Philippines. It provides protection to covered employees and their families against disability, sickness, old age and death, with a view to promoting their well-being in the spirit of social justice. The System was created under RA 1161, the Social Security Act of 1954. Im plementation of the Act was only on September 1, 1957, after it was amended by RA No. 1792, Presi dential Decree Nos. 24 and 177. II. GOVERNMENT PUBLIC UTILITY CORPORATIONS 7. National Power Corporation Created under Commonwealth Act 120 on November 3, 1936, to undertake the development of hydro-electric power and production of electricity from nuclear, geothermal and other sources as well as the transmission of electric power on a nationwide basis for industrial development and rural electrifica tion. Converted into a stock corporation in June 1962 under RA 2641 with initial capitalization of Pl00 million, increased to P250 million in May 1961, and to P300 million in May 1967. 8. Philippine National Railways First known as Manila Railway Company Ltd., an English company, Philippine Government acquired ownership on January 8, 1917. Under Republic Act 4156 of June 20, 1964, PNR acquired all the assets and liabilities. Authorized capital stock was increased to P250 million with P92.5 million government ob ligations converted to subscribed capital stock. RA No. 6366, enacted on August 20, 1971, further in creased the authorized capital stock to P650 million 9. Metropolitan Waterworks and Sewerage System Created under RA 6234 approved on June 19, 1971, which abolished the then National Waterworks and Sewerage Authority (NAWASA). The new law is pursuant to declared policy that the establishment, operation and maintenance of the water works sys tem must be supervised by the state. MWSS has jurisdiction, supervision and control over all waterworks and sewerage systems in the Greater Manila area. 10. Communications and Electricity Development Authority Established in 1957 under RA 2046 as amended by RA 2235 and 4186 with the major objective of full electrification of barrios and rural areas covered by its operation.' 11. Manila Gas Corporation Started operations on September 27, 1912, under a franchise granted by Act 2039 of the Phil ippine Legislature for a 50-year period beginning January 2, 1912. The MGC franchise was extended for another 50-year period by RA 2278 which took effect on June 19, 1959. It has since expanded its services to include distribution of bottled gas to places not reached by pipelines. A glance at . the gov’t corp 111. GOVERNMENT DEVELOPMENTAL AND OTHER CORPORATIONS 12. Philippine Tobacco Administration Created by Republic Act 1135 on June 16, 1953. Primary objectives are: to promote effective merchandising of leaf tobacco in domestic and foreign markets, to conduct research on tobacco and tobacco products, to improve existing methods of manufac ture, to insure permanent and balanced production of tobacco leaves, to create warehousing and marketing facilities, to supervise and control the classifica tion and grading of leaf tobacco, and to improve the living and economic conditions of the laborers en gaged in the tobacco industry. 13. National Grains Authority Created under Presidential Decree No. 4 of Sept. 26, 1972, to encourage, among others, in creased production of rice, corn and other grains, and to promote systems that will improve the quality and reduce the costs of production, processing and marketing of the grains to keep their prices within reach of the common masses. 14. Philippine Coconut Administration Established under Republic Act 1145.PHILCOA aims to insure the steady and orderly development of the coconut industry; stabilize and strengthen its position in the world market; promote the effective merchandising of copra, coconut oil, coconut prod ucts and by-products in domestic and foreign mar kets; improve the relations between coconut proprie tors and tenants; and encourage the invention of useful machinery that will hasten the development of the coconut industry. 15. Philippine Virginia Tobacco Administration Organized in 1960 by RA 2265 to promote the effective merchandising of Philippine Virginia tobacco in domestic and foreign markets; to establish and maintain balanced production and consumption of Virginia tobacco and its manufacturing products; and to improve the living and economic conditions of those engaged in the industry. 16. Fertilizer Industry Authority Created under Persidential Decree 135 which took effect on February 22, 1973, the Fertilizer In dustry Authority helps the Masagana 99 program to procure fertilizer through equal distribution of ferti lizer to the. farmers, regulates the manufacture of fertilizer, controls prices and distribution channels through the manufacturers, and helps fertilizer manu facturers in the importation of raw materials. 17. Greater Manila Terminal Food Market, Inc. GMTFM was formed on April 30, 1968 and was registered with the Securities and Exchange Com mission on May 3, 1968, with the Chairman, members of the Board and the Chief Legal Counsel of-the De velopment Bank of the Philippines, in their individual capacities as incorporators, directors and subscribers of the Corporation. It aims to provide an outlet and distribution system for prime commodities in the country. 18. Cebu Portland Cement Company Incorporated in 1922 by a Mr. Massey for the purpose of engaging in the manufacture, develop ment, exploitation and sale of cement. The Philippine Government took over control and management in 1924. Articles of Incorporation were amended in December 1940 to include the manufacture, develop ment, exploitation and sale of marble and other building materials. In 1964, the Articles of Incor poration were again amended to change the name to CEPOC Industries, Inc. and to enable the cor poration to engage in various activities, among which is coal mining. 19. Philippine Deposit Insurance Corporation Created June 22, 1963, by Republic Act 3591. This was amended by RA 6037, which compels all the country’s banking institutions to insure their liabilities with the PD1C. Presidential Decree 120 issued January 29, 1973, increased the permanent insurance fund of the Corporation from P5 million to P20 million. Its two major objectives are: 1) to protect bank depositors against loss of their deposits; and 2) to instill public trust and confidence in the Philippine banking system. 20. Philippine Charity Sweepstakes Office Formally organized under Legislative Act 4130 enacted October 30, 1934, later amended by Republic Act 1169, which placed the direction and management of sweepstakes and lottery draws under PCSO with the objective of providing money for essential health and welfare activities. THE REPUBLIC 9 Corporations 21. Pamantasan ng Lungsod ng Maynila Established as a government corporation under Republic Act 1965 approved June 19, 1964. Objec tives are to advance human knowledge through basic study and research; to develop the Filipino intellect and promote Filipino welfare; to give professional training in public affairs and in scientific, cultural, technological, industrial and vocational fields; and to introduce in its curricula studies which do not at present receive sufficient emphasis in existing institu tions of higher learning in the country. 22. Philippine Normal College Formerly Philippine Normal School, PNC was created under Act 74 of the Philippine Commission and formally opened on September 1, 1901. This Act underwent various amendments. The latest, Republic Act 6515, authorizes the College to offer advance degree programs. The m^jor objectives are to train teachers as leaders in the community school move ment, for field service, as instructors in regional and normal schools, as specialists in various fields, to render professional service, and to undertake re searches and studies in various fields. 23. National Electrification Administration Ultimate objective is to achieve total electrifica tion of the country. Created by Republic Act 6038 which took effect August 4, 1969. It first started as the Electrification Administration (EA), which was repealed by the same act that replaced it with the NEA. some of •orations 24. National Irrigation Administration Created under Republic Act 3601 which abo lished the Irrigation Division of the Bureau of Public Works. It became a separate entity from the Public Works Bureau on October 1, 1964. Major objectives are to survey, study, improve, construct and adminis ter all national irrigation systems; to survey all possible water resources for irrigation purposes; and to collect from users of each irrigation system such fees as may be necessary to sustain its operation. 25. Laguna Lake Development Authority Began operations on January 1, 1970, with authorized capital stock of Pl00 million divided into 700,000 common shares (voting) and 300,000 pre ferred shares (non-voting), of which 143,000 and 60,000 common shares are subscribed by Rizal and Laguna provinces respectively. The LLDA has led, promoted and accelerated the development and growth of the Laguna Lake Area and the surrounding provinces, cities and towns within the context of the national plans and policies for social and economic development. Also included in its development plan are: tourism, recreation, manpower, infrastructure, social development and land-use program. 26. Export Processing Zone Authority Created under Presidential Decree 66, dated Nov. 20, 1972, converting the Foreign Trade Zone Authority created under RA 5490, into corporate organization under the direct supervision of the Office of the President. Its objectives are to encourage and promote foreign commerce as a means of making the Philippines a center of international trade. 27. Bicol Development Company BIDECO was organized under RA 4690 starting operations on Sept. 29, 1966. Major objectives, among others, are: to implement the approved plans and programs of the National Economic Council (NEC) for the agro-industrial development of the Bicol Region; to formulate plans and programs for the region within the context of national policies and to implement other plans and programs. 28. San Fernando Port Authority Created under Republic Act 4567 which took effect on June 19, 1965, to administer, develop, improve, coordinate and mobilize terminal facilities within the Port District of San Fernando, La Union. 29. Agricultural Credit Administration Created under RA 3844 on Aug. 8, 1963, to align its activities with the requirements and objectives of agrarian reform. The agency was en visioned to assist small farmers in securing liberal credit and to promote the groupings of fanners into cooperative associations to enable them to, market their products and ultimately improve their standard of living. It coordinates and cooperates with the Department of Agrarian Reform as its credit arm and devotes its resources to agrarian reforms. Formerly known as the Agricultural Credit Cooperative Finan cing Administration (ACCFA). 30. Central Luzon-Cagayan Valley Authority Created under RA 3054 on June 17, 1961, to provide irrigation systems for agricultural lands in Central Luzon and Cagayan Valley; to provide elec tricity to home industry; to provide inland navigation and to control floods in these areas. 31. Cultural Center of the Philippines First created under Executive Order 30, series of 1966, as a trust. Under Presidential Decree 15, dated October 5, 1972, the CCP was transformed to a non-municipal public corporation to promote, enhance' and develop Philippine culture. The Center presents cultural shows in association with Geothe House, the British Council, embassies and various Philippine cultural and art groups. It aims to develop artistic talent by way of special assistance to younger artists particularly to enable them to work on art pro jects. A gallery and museum was put up to encourage artists to exhibit their works in groups or in one-man shows. The Center has likewise a library of its collec tion of books on art. The Center holds workshops and conferences and gives scholarships to promising artists. IV. SELF-GOVERNING BOARDS, COMMIS SIONS AND AGENCIES 32. National Cottage Industries Development Authority NACIDA was created under Republic Act 3270, approved June 17, 1962, to encourage the growth and development of cottage industries. With regional institutes throughout the country, its mar keting activities have taken account of the increased demands of foreign buyers for Philippine cottage products. It has participated in international trade fairs, mostly in continental Europe. Acceptance among foreign buyers of Philippine cottage products has been beyond expectations. 33. Board of Investments Created under Republic Act No. 5186 approved on September 16, 1967, to administer and control investment and export incentive plans. BOI is headed by a five-member Board of Governors. It is under the Office of the President. Principal sources of funds are the National Government and a share in the Stahiliza. tion Tax on Exports. 34. Oil Industry Commission Created on April 30, 1971, under HA 6173. Major objectives are, among others, to assure the country of adequate and continuous supply of crude oil and refined petroleum products; to assure the public of reasonable prices, and to induce and effect the, participation of Filipino capital, labor and management. 35. National Science Development Board Set up by the Science Act of 1958 (RA 2067) it coordinates and promotes cooperation in the scientific research and development activities of government agencies and private enterprises, and establishes a system of priorities for scientific and technological projects. NSDB has three organic agen cies: 1) NSDB proper; 2) National Institute of Science and Technology; and 3) Philippine Atomic Energy Commission. The Philippine Inventors Com mission, the Philippine Coconut Research Institute, and the Forest Products Research and Industries Development Commission are attached to the NSDB. 36. Philippine Medical Care Commission Created by Republic Act 6111 to extend medical care to all residents in an evolutionary way within the nation’s economic means and capability, and to provide practical means of helping people to pay for adequate medical care. The Commission has three branches: Administration; Plans and Programs and Service Operations. 37. Philippine Inventors Commission Established under Republic Act 3850, approved April 13, 1964, to provide technical, financial and legal assistance to Philippine inventors. Program in cludes the development of creativeness and the or ganization of inventors’ clubs; publication and dis semination of creative and scientific information thru publication of magazines for the promotion of inventors; assistance to local fabrication of Philippine inventions, and annual celebration of a National Inventors’ Week to encourage inventors to make known their* inventions, and give awards for patented inventions. 38. National Water and Air Pollution Control Commission Created by Republic Act 3931 to maintain reasonable standards of purity for the waters and air of the country to enhance their utilization for domestic, agricultural, industrial and other legitimate purposes. 39. Philippine Atomic Energy Commission PAEC takes charge of the establishment of laboratories for nuclear research training. It conducts or encourages the performance of research and development relating to nuclear processes and tech niques, processes, materials and other radio-active material for commercial, industrial, medical, biolog ical, agricultural or other peaceful purposes. It has five divisions and research centers, and operates eight departments. 40. National Institute of Science and Technology NIST, under the supervision of the National Science Development Board, was established pri marily to implement and conduct scientific and technological research and development; to cooperate with private enterprise in research activities relating to scientific and technological problems of industry, agriculture, medicine, engineering, mathematics and the natural, biological and social sciences; and to conduct studies through its research centers on in dustrial, agricultural, medical, biological and related fields. 41. Metals Industry Research and Development Center Established as a semi-government, semi-private organization under Republic Act 4724 on June 18, 1966. Republic Act 6428 on May 21, 1972, con verted it into a government corporation. Its principal program is scientific and technological promotion, research and development. 42. Reparations Commission Created under Republic Act 1789 to implement the Reparations’ Agreement between the Philippines and Japan entered into on May 9, 1956. The Agree ment provides for Japan to pay to the Philippines, by way of war damage reparations, a total of P55O million worth of Japanese goods and services. 43. Science Foundation of the Philippines A public corporation created under Republic Act 770 which took effect June 20, 1952. Significant purposes are to initiate, promote, stimulate, solicit, encourage and support basic and applied scientific research in the mathematical, physical, medical, biological, engineering and other sciences. It aims to promote science-consciousness among the youth and the general public. 10 1-31 December 1975 THE REPUBLIC Audit: before or after the act? by ARTURO V. BESANA Auditor, Commission on Audit A SUBJECT of debate these days is t whether the auditing function to control disbursements is best exercised before or after the transactions go through. The accountability of government, at all turns of fiscal administration, is today a necessary check on freedom of administrative function. The multifari ous acts of government—right through from their initial planning stage to their implementation and thereafter, and the appraisal of their results—need a broad and continuous process of control. Various forms of control exercised before the consummation of an act or series of acts of administration are pre audit, a priori control. Postaudit or a posteriori control is what takes place afterwards. The General Accounting Office of the United States, for example, exer cises essentially a postaudit function. The Comptroller General, however, re tains certain powers regarding proposed receipts and expenditures. He is required by law to render ad vance opinions on the legality of pro posed expenditures at the request of heads of departments and establish ments, disbursing officers and certifying officers. He likewise has the power to settle claims by and against the Govern ment. While these powers are not exer - cised automatically on the Comptroller’s own initiative, but only at the request of the parties interested, extensive use is in fact made of them. In many cases, disbursing officers, who are personally liable for their administrative actions, frequently seek to ascertain in advance the legality of proposed expenditures. The result is that each year thou sands of decisions are given on an ex tremely wide range of subjects, binding the administration and constituting an impressive code of precedent, guiding it in its future activities. In Russia, audit of government agen cies is subdivided as regards the time and way it is applied: into preaudit, cur rent audit or audit at the titne of per formance, and postaudit. Preaudit is done at the time of prep aration of the budget and during discus sion of allocations for projects, first of all, from the point of view of correct ness of allocation. Preaudit entails exam ining whether, and to what extent, allo cations accord with the plans and proj ects, and also their conformity to legal terms of reference. This form of audit also imposes examination of the correctness of cal culations and the necessity of each item of expenditure separately. Great im portance is attached to this form of au dit since every unit obtains for its bud get only such amount of expenditure as is approved by the audit service which can refuse to support allocations (hat are found to be unjustified or unneces sary. A specific category of preaudit which is of particular importance is the the audit of individual salaries in ac cordance with grading and of the final amount to be allocated for salary pur poses and for administration and man agement expenses. In this field the question of finan cial discipline is considered seriously, and government adopts a number of resolutions aimed at intensifying audit over expenditure on salaries and over administrative expenses. Budget funds for salaries are super vised most strictly and any violation involves financial penalties. The agen cies and institutions may only make use of allocations in accordance with the actual number of employees for each month individually, and not in accord ance with the initially authorized estab lishment. When any agencies wish to get funds for the payment of salaries, they are required to submit monthly a list of employees signed by the head of the agency and the chief accountant. The auditors examine the efficiency of the establishment, the need for the ed number of posts and the level of sala ries. This duty is to question unneces sary increase in staff. Current audit which is made at the time of performance has some element of preaudit. It is made in the agencies at the time when financial transactions are made or expenditures are incurred. Current audit is applied during the im plementation of the revenue and expen diture parts of the budget to make sure, through checking of accounts kept by agencies, that the expenditure from the budget keeps pace with the fulfillment of operating and production plans, and corresponds to the actual amount pro grammed for those establishments. Postaudit is used to examine the legality of financial operations. With the help of postaudit, the economic effi ciency of financial transactions and cor rect allocations of budget funds are verified and unused resources of govern ment institutions are conserved. This covers examination of balance sheets and financial reports and checking doc uments. In Austria, the system is postaudit. There are, however, specified exception al cases in which preaudit is exercised. In cases where expenditures are known co be against what is provided in the budget in amount or purpose, these ex penditures are examined by the audit or. Proposed expenditures of this kind are accordingly brought to the auditor’s attention before being entered into, un less the subject of special legislation or relating to a case of extreme urgency. In these cases, the auditor examines whether‘conditions justifying deviations from budgetary provisions are present and, if necessary, makes his observations to the management. The observations do not bind the management, and the auditor is not entitled to reject the pro posed expenditure but can only report the matter to the legislature. HAVING gained ideas on some audit ing systems in vogue in highly de veloped countries, we inevitably come to the point of asking: Should the auditing body perform both preaudit and post audit? Should preaudit be exercised by the audit body or should it be based on internal checks within the management itself? Which system would best be ap plied in the Philippines? A combination of postaudit and preaudit should be adopted in the Phil ippines. There is no doubt that postaudit has its advantages. It does not inter fere with administration in the way pre audit often does. An auditor under the postaudit system can exercise his func tion independently and objectively and avoid being blamed for red tape if he slows down operations. The efficacy of postaudit as a wea pon for detecting irregularities, and pre cluding them, has been proven by pro gram auditing, which is a comprehensive type of postaudit. In view, however, of the values and orientation of our public administrators at this stage of development, it is felt that the administration of some govern ment agencies is not yet ready for its full adoption. The need for some form of preaudit is widely recognized and accepted. Italy, Greece, Romania, Venezuela, Belgium, Russia and most of the Socialist states make extensive use of preaudit. Austria, the Netherlands, United States, France, West Germany, Spain, Britain, Israel, Japan and Norway adopt postaudit. As a general rule, every adminis trative act should be subject to the prior examination of two independent factors: The executive agency directly respon sible for implementation; and An ex ternal factor, acting primarily as a re straining influence and concerned, in par ticular, with legal, financial and admin istrative regularity of the proposed act. There is no reason why this latter function should not be entrusted to the management itself. If it is imposed on the auditing service to have an active role in the ad ministrative process to disallow or dis approve decisions of the executive pow er, it thereby bears in effect some of the responsibility for administration. □ HEADQUARTERS of the Commission on Audit in Quezon City. Professionals needed IN reorganizing the Commission on Audit, qualified, honest and develop ment-oriented personnel must be found as a priority, according to Macario G. Sevilla, the new Secretary to the Com mission. Of the task ahead, he says: The goal of professionalizing the audit service will require that approved positions qualification standards be close ly adhered to. Comprehensive Training programs will be undertaken to upgrade the technical competence of employees who, although without the requisite formal educational background for the jobs they now occupy, have proven by past performance that some formal training will help them meet the de mands of their positions. Many may have to be shifted to positions for which their formal education has pre pared them. The major reason for the ineffec tiveness of the Commission is the sim ple fact that most of those holding audit ing positions are not Certified Public Accountants. This situation must be changed radically. Beyond the need for developing technical expertise, the Commission perceives the necessity to re-orient the thinking and attitudes of all its officials and employees. The Commission must be perceived not as a mere continuation of the Gen eral Auditing Office, but as a complete ly new personality with well defined goals and objectives. Every official and employee of the Commission must be imbued with the realization that while the Commission must be imbued with the realization that while the Commission does in fact in dependently appriase the operations of all government agencies, the primary purpose of the evaluation function is not fault-finding; it is rather to assist government to achieve more efficient and economical operations, and for mulate and implement programs that will most effectively attain the avowed social and economic development goals of the country. GOVERNMENT accounting and re porting systems are to be studied thoroughly so that accounting reports will become more useful for economic planning and program implementation. Accounting principles, rules, and regulations which might have served their purposes well twenty years ago need to be examined closely, recast, and restructured to meet the develop mental thrust of government operations. The timeliness of these reports is of vital concern to government users. Systematic evaluation and revision of government accounting and report ing systems will require the cooperative efforts of the executive branch, the leg islature, local government units, and the Commission. Auditing rules and regulations have been criticized as unwieldy, onerous, and impractical. In a lot of cases they are, because the formulation of rules has been principally control-oriented with an almost coinplete disregard for the needs of government agencies to speed up their operations. Rules and regulations are never meant to fetter the hands of agency management; they are intended instead to provide management with an accept able degree of assurance that agency operations are being conducted in ac cordance with management's plans and policies. A complete reexamination of exist ing auditing rules and regulations will be undertaken by the Commission in con sultation with the heads of government agencies. THE overall objective is to enable the Commission, more efficiently and effectively, to attain its goals and to keep abreast of the accelerated social and economic development goals of the country. More specifically, the reorganiza tion plan aims: 1. To restructure the Commission on Audit so that its organization, pol icies, rules, and regulations are develop ment-oriented ; 2. To enable the Commission to plan and implement its programs with a greater degree of effectiveness, effi ciency, and economy; and 3. To strengthen and intensify the decentralization of the Commission to make’lt more responsive to the demands for organized auditing services in all areas. □ 1-31 December 1975 11 An interview with the audit chief What is the biggest problem facing the Commission on Audit? It is the matter of our image. For example, a few months ago one of the most go-ahead agencies of government denounced our auditor who was detailed there as counter-progressive. Three hun dred in that agency drew up a protest petition against him, but before they could submit it the auditor happened to get axed in the purge. That removed one problem, but there are other similar ones. In this case, the man belonged to the old school and he was auditing an office of highly-degreed specialized peo ple. With the combination of obsolete auditing rules, an old man, and a very progressive office, it was not really surprising he was called counter-progres sive. On the broader scene, we cannot deny that several auditing people really have gone wrong. Some have taken advantage of their office to delay papers so they can solicit certain percentages of payments. Some were just downright dishonest. Many have been purged and I trust that the purge is not yet over. OW can you overcome thia image problem? We started by looking into our personnel and organizational structures. We have almost 10,000 staff in about 700 offices. We had to start by trying to find out exactly how many people we had. The staff lineup reads like a comedy. While not decrying anyone's personal merits, one sees high auditing positions held by dentists, music grad uates, educationalists, literature special ists. Usually a man is an exception when he climbs high in a field other than his own specialty, but here it became al most a norm. Not one half of the pro vincial auditors can read a trial balance. The first question of many new auditors has been: “Up to what limit can I sign checks? " Personally I still cannot see why auditors are signing checks in government agencies. It seems to me that is a management rather than audit function. does the staffing structure seem so inappropriate? In the past, the first consideration in promotion was to protect the insiders. It is only now that outsiders have started coming in to top positions. I was the first of them, although I must admit I am essentially a lawyer. In the past no premium was given to qualified people. If a CPA joined, he would take his place at the end of the promotions queue. An opening would go to the next in line. The CPA took his turn. Now we’re suffering the ill effects of the padrino system and the erroneous appli cation of the Civil Service Laws. Where the rules specified such-and-such eligibi lity for a certain post, correct eligibility was not necessarily combined with cor rect educational background. As a gen eral rule, if you pit a poor CPA against a good pharmacist in an auditing job, the CPA is still likely to be ahead. To gether with poor salary scales there was the additional drawback of no par ticular advancement opportunities for well-qualified people. In hiring we could not compete against, say, the Central Bank or private business. Of our 132 senior auditors, only 13 (9.85 percent) are CPAs, 14 (slightly over 10 percent) are members of the bar. Twenty one per cent have no degrees, while 15 per cent are qualified educationalists. Over all, only 5.87 percent.of Manila-based employees of the Commission are CPAs. On a nationwide basis, only two or three percent of the Commission on Audit staff are CPAs. New pay scales promulgated by the President this month are very heartening, however. We were also heartened to get over 150 applica tions immediately after releasing a call for CPAs. Maybe the Commission’s image is not so bad after all. FRANCISCO S. TANTUICO, new. acting chairman of the Commission on Audit, was appointed a Judge of the CFI in Cebu City in 1968 and became a Justice of the Court of Appeals in 1973. He has authored books on taxation and on the history of his home province of Leyte. What other organizational reforms do you plan? Aside from professionalizing our staff and creating appropriate training programs, we must update our laws and regulations. Once we codify them, and if we get Presidential approval, we ex pect to manualize them. One manual would cover government banks, another the government universities, another for provincial auditors, and so on. In the process we will be updating all these rules that appear in a vast array of old circulars etc. In the past the regulations have been too control-oriented. This has laid auditors open to accusations of impeding the flow of work. Because of too much control, agencies blame our office for snarl ups. In addition to professionalizing and manualizing, we are pressing ahead with regionalization to get closer to the people. We have to es tablish regional directors because there is great lack of coordination in the field. Whether or not we have the facilities or funds, we must go ahead with these re gional offices. Ar E there short-term remedies for any of these snarl ups? Sometimes its hard to find remedies for human weaknesses, but we have taken some stop-gap measures. We are currently placing bright red posters in government offices quoting President Marcos at the Management Council of the Philippines last month: “If there are any auditors found to obstruct pay ment to suppliers of the government, in order to create a leverage for selfaggrandizement, such auditors must be reported immediately to the Chairman of the Commission on Audit or to the Office of the President.” Our phone number is 99-99-66. I also instructed auditors not to hold vouchers for longer than 24 hours. From the time the auditor receives the requisition, he should count 24 hours straight-and in that time approve, disapprove or attach a memo to the vouchers stating why action cannot be taken. Then the supplier and the office concerned immediately know the result. Some who are lazy, or are out to make it difficult, have some times let vouchers lie idle for months in the worst instances. ^^IGHT some of the auditing func tions undergo change? Yes, particularly those that seem to belong more to management than to audit. Personally I think that the signing of checks probably falls in the manage ment category. But I must give this more serious thought because recom mending a change would be an important decision. Another area is having auditors sitting on bidding and award committees. PD 562 recently removed this function from provincial and city auditors but strictly there is nothing that forbids na tional auditors from continuing to do so. But in regional conferences I Have been stressing that what applies in PD 562 might as well apply to national auditors too. These, we believe, are management functions. The basic function of an auditor is to establish controls after transactions are consummated. It is, of course, our duty to prevent unneces sary and excessive expenses, which may be done through pre-audit. But by and large our main function should be post audit. D<> you foresee a move away from pre-audit towards more post-audit em phasis? The practice in many progressive countries is not to pre-audit. Many of them do not even have resident audi tors in government offices like we do. All they have are roving auditors who make surprise audits. But in our present stage of management quality this would be asking for the moon. We probably need many years to reach this point. It is already 90 per cent agreed among us here in the Commission that we should withdraw more and more from the pre audit function. A lot depends on how the auditing is done. Up to now the concentration has been on the control of overpricing and oversupply. These are only matters of expenditure audit. Even our own people misunderstand their function. They confine themselves to expenditure audit, not to performance audit. They do not concentrate on the management of money, on whether the money is efficiently used. There should also be more revenue audit. Is the gov ernment collecting all the money it should be getting from fees, licenses, taxes etc? In what areas could you start relaxing the pre-audit function ? The first field I would withdraw would be regular payrolls and regular expenses incun-ed. But we would have to do this in stages. Aside from just with drawing, we would have to find out whether management will put in more responsibility as we phase out from this activity. Under existing laws, manage ment of government agencies and bu reaus is supposed to establsih internal audits responsible only to the manage ment people, not to our Commission auditors. This is consistent with the prin ciple that fiscal responsibility is primar ily management responsibility. But ex perience shows that very few government offices, agencies or corporations have es tablished internal audit, despite the fact that there is a 10-year-old law requiring it. What do you think are the reasons they have not done so? I would say that a tendency of many managers is to make the Commis sion’s auditors fully responsible for fir nancial audits. Even in discussions on the virtues of pre-audit and post-audit, many government offices prefer pre audit because they are not willing to assume responsibility. Some offices want to throw everything on the auditor. And then I was told that many executive of ficers were under the wrong impression that the internal audit unit would be under the Commission on Audit. They thought we were expanding our domain by asking that internal audit units be established. But this is not so. Internal auditing units are staff offices of man agement. How objectively detached are your auditors from the offices where they are assigned? Our Commission on Audit is one of the strongest government audit bodies in the world because it is an indepen dent constitutional body. In some gov ernments, the auditing office is only a government bureau. Our Constitution has provided for a very strong Commis sion. Nonetheless there are compromis ing situations. Over long periods, some government auditors develop closer at tachments to their place of work than they do to us. Moreover, in greater Man ila many audit offices have more casuals hired by management than they have regular auditing personnel of the Com mission. But we have to put up with this compromising position because bud get restraints mean we cannot appoint additional personnel and it is humanly impossible for our existing force to cope with the work. Additionally, we have a very awkward set-up with the govern ment corporations who actually pay the salaries of our auditors. .^^.RE your men appointed by the cor porations? No, the corporation appoints them but in most cases there is a proviso that the appointments are subject to approv al by the corporation’s board and this practically negates the appointing pow er of the Commission. This is especially true when one considers that it is the corporation being audited that pays their salaries. Yet these auditors are technical ly members of the Commission. At pres ent we’re looking into an integrated ap proach to hiring and paying Commission personnel. Perhaps something could be devised along commercial audit lines, where the agency or corporation pays au dit fees to the Commission waich, in turn, pays its own auditors fully—mean ing they do not get paid anything di rectly by the body they are assigned to audit. What is your ideal for the audit role? This is provided for by the Consti tution. In practice, I would say the ideal set-up wuuld be the least amount of pre-audit and a very efficient program of surprise visits or surprise audits, plus a very strong and consummate post audit systems. This could take years to achieve but I hope it can come within my term. □ 12 1-31 December 1975 J THE REPUBLIC Unburdening the President’s office IN view of President Marcos’ decision to change the nature of the Office of the President, it is interesting to note what the Reorganization Commission headed by Armand Fabella said about the matter in its report in 1972. The first item of the report stated: The Office of the President shall be freed as much as possible from unneces sary detail by reducing the number of agencies reporting directly to the Presi dent-through abolition, merger or transfer, and by decreasing the routin ary or minor items now requiring ap proval by the President personally or the Executive Secretary. As a general rule, only those agen cies which meet any of the following criteria shall be retained in the Office of the President: a. the agency is a purely advisory or consultative body to the President; b. the agency provides staff assis tance to the President; c. the functions of the agency in volve several departments or entities; or d. the functions of the agency re quire the personal attention of the Pres ident. In every case, the criteria shall apply to agencies operating at a level of im portance that merits the attention of the President. ATER, the report says: It is recog nized that the Executive Office of Office of the President must conto be fully responsive to the spec ific needs and requriements of the PresConsolidating the funds THE President through Letter of Im plementation No. 29 dated Dec. 5, 1975, directed the Budget Commission to take over some budgetary functions formerly referred to the deftinct office of the executive secretary. This followed Letter of Implementation No. 28 plac ing the commission under the Office of the President. ■The President directed Budget Com missioner Jaime C. Laya “to take final action on the following budgetary matters’*. 1. Approval of lump sum appropria tions under Section 7-1(4), Common wealth Act No. 246, as amended, through soecial budgets: provided that: (a) in each instance, the total amount approved does not exceed the amount authorized in the approved program of expenditure, and (b) releases of funds are subject to other limitations as the President may impose; 2. Use of savings under the Special and General Provisions of the General Appropriations Decree; provided that: (a) the total expenditure ceiling of the individual agency is not exceeded; (b) savings are used only for non-recurring expenditures; and (c) purposes are not for those requiring Presidential approval; 3. Augmentation of fund appropria tion items used within a department/ agency; provided that funds used are obtained from other authorized pro grams of the same department/agency, subject to guidelines on percentage limits as provided by law or as may be prescribed by the President; 4. Release of funds for optional retirement gratuities under Republic Act 1616, as amended; prdvided it is within the approved program of expenditure and subject to existing policies as are or may be prescribed; 5. Approval of requests for exemp tion from Memorandum Circular No. 593 dated Aug. 8, 1972, of the Office of the President, relative to: a) author izing expenditures in connection with attendance in meetings, seminars, work shops, conventions, or the like; b) filling ident, and therefore he shall have com plete authority to reorganize the various functions and units of the Executive Office to meet the exigencies of the ser vice, and to abolish and create as many positions as may be necessary including those of assistant executive secretaries and presidential assistants; provided that incumbent personnel who belong to the career service in the Executive Office shall not be reduced in rank, decreased in salary or dismissed except for cause, as a result of any such reorganization; provided, further, that any such reorgan ization shall be undertaken within the limits of available appropriations and subject to civil service laws and rules. HE report also notes: There are at present around 160 entities (as of 1972) under the administrative supervision of the Office of the President. The Office is now overburdened with many referrals and other routinary matters, a situation stemming largely from the proliferation of agencies re porting directly to the President and the many matters requiring presidential approval under existing laws and rules. In the past, many agencies had pre ferred to be under the Office of the Pres ident since that Office had neither the staff nor the capability to monitor these agencies, much less supervise them. Decentralization is necessary to free the Office of such detail to enable it to concentrate on policy formulation and decision-making on the more substantial issues. □ of vacant positions; and c) purchase of necessary and essential furniture and office equipment, subject to guidelines prepared by the Budget Commission and approved by the President; and 6. Payment of overtime compensa tion under Section 7-1(32) of CA. No. 246, as amended, subject to guidelines prepared by the commission and ap proved by the President. The budget commissioner is to sub mit to the President a regular monthly report of these actions taken. It was also stated that nothing in the delegation of authority shall be construed as a limitation to the power of the President to review or overrule any action taken by the budget comPresident on Dec, 11 ordered the lition of 10 agencies and the transfer of 34 others from the Office of the President to other government agencies. The order, in Letters of Implemen tation Nos. 30 to 34, instructed aboli tion of the following: Bl. Board of Visitors on Education; 2. Joint Committee on Financial Management Improvement; 3. Philip pin e-J span Joint Commis sion; 4. Peace and Order Coordinating Council; 5. Philippine National Committee on Freedom from Hunger Campaign; 6. Social Defense Planning Com mittee; 7. Presidential Census Coordinating Board; 8. Congressional Accounts Liquida tion Office; 9. Complaints and Investigation Office; 10. Board of Liquidators. BHowever, the functions of the Board of Liquidators, including applicable ap propriations, records, equipment, pro perty, and personnel, are transferred, to the Department of General Services or its successor agency, the General Service Administration. AGENCIES ordered transferred from /A. the Office of the President to other agencies or departments are: L. Inter-Agency Task Force to the National Housing Authority. The trans fer includes applicable appropriations, records, equipment, property, and personnel. The National Housing Authority shall undertake the administration of the relocation and resettlement projects with the assistance of the Inter-Agency Task Force. 2. Philippine Amanah Bank, Philip pine Guarantee Corp., and the Fiscal pine Loan Guarantee Corp., and the Fis cal Incentives Review Board to the De partment of Finance. 3. Typhoon Moderation Research F the 11 agencies abolished, three and Development Council, PAGASA to will remain in operation until thp the Department of National Defense, completion of their tasks, after which The transfer also includes applicable ap- their abolition shall take effect, propriations, records, equipment, pro- They are: 1) Presidential Census Coperty, and personnel. ordinating Board, upon the completion 4. National Computer Center to the of the 1975 economic census. Department of National Defense. 2)iThe Congressional Accounts Li5. Committee on State Visits to the quidation Office, until the completion Department of Foreign Affairs. of its task. 6. Metropolitan Waterworks and 3) The Complaintsand Investigation Sewerage System, National Electrifica- Office upon the creation of the Tanodtion Administration, Farm Systems Dev- bayan pursuant to the new Constitution. elopraent Corp., Manila Transit Corp., Philippine National Railways, Philippine Ports Authority, National Housing Au thority, Local Water Utilities Adminis tration, National Power Corp., and Phil ippine Aerospace Development Corp, to the Department of Public Works, Trans portation and Communications. 7. Maritime Industry Authority and Power Development Council to the De partment of Public Works, Transporta tion and Communications. 8. Pasig River Development Council to the Department of Public Works, Transportation and Communications. 9. Development Academy of the Philippines to the Civil Service Com mission. 10. Philippine-Australian Develop ment Assistance Program (PADAP) to the Department of Public Highways. The DPH shall be assisted by the inter-agency technical staff created under Memoran dum Order No. 455, promulgated Sept. 23, 1973. The transfer also includes ap propriations, records, equipment, pro perty and personnel of the administra tion. 11. Export Processing Zone Author ity and National Development Co. to the Department of Industry. 12. Leyte Sab-A Basic Development Authority, the Southern Philippines Development Administration, and the Special Committee on Scholarships to the National Economic and Develop ment Authority. 13. Palayan ng Bayan National Ad visory Council and Presidential Commit tee on Agricultural Credit to the Depart ment of Agriculture. 14. Philippine Sugar Commission (when it is activated) and the Green Re volution Expanded Program Action volution Expanded Program Action Committee to the Department of Agri culture. 15. Commission on Population and National Nutrition Council to the De partment of Health. THE REPUBLIC 11 Laws 1-31 December 1975 13 Pay scale of exec* LETTER of Instructions 345 ordered , salary increases for government posi tions covered by the Wage and Position Classification Office (WAPCO) of the Budget Commission. The order includes government positions under the Career Executive Service. The President directed the budget commissioner, the Civil Service Commis sion chairman and the Commission on Audit Chairman to increase salaries ac cording to the following guidelines: 1) 4 to 6 ranges for technical positions, 3 ranges for teaching positions and 3 ranges for teaching positions, labor, trades, crafts, clerical and sub-profes sional positions; 2) increases in the salaries of the CES shall be in accordance with the approved Compensation Scheme for the service, to be initially imple mented to the extent of 30 percent of the increase indicated scales. PD 847 adopts a Compensation Scheme for CES members. Salary increases are effective Jan uary 1, 1976. For members of the Career Exec utive Service Board, the President or dered the adoption of a Compensation Scheme through Presidential Decree 847 dated December 16, 1975. The Career Executive Service, created under Presidential Decree No. 1 (Integrated Reorganization Plan), is intended “to form a continuing pool of well-selected and development oriented career ad ministrators who shall provide compe tent and faithful service.” Under the decree, the President upon recommendation of the Career Executive Service Board, will issue orig inal and promotional appointments to the appropriate rank, grade and salary in the service. As a general rule, according to PD 847, the salaries of CES officers shall start at Grade 2 of the corresponding rank in the Compensation Scheme, while those of the incumbents and of the new appointees to positions, who are not officers, shall start at Grade 1 of the corresponding rank. The decree, however, provides that subsequent salary increases and/or rank promotions may be granted to incum bents who are not CES members only after satisfactory completion of the CES Development Program and after compliance with such requirements as the board may set. PD 847 provides that nothing in the decree shall reduce any salary received by any incumbent of any CES position, as a result of the implementation of the Compensation Scheme, except that the salary of his successor shall be in con formity with the scheme. In appointments to the CES of individuals possessing specialized skills and exceptional talent, the President may authorize a salary higher than the salary provided for in the scheme. Under PD 847, the Compensation Scheme shall govern salaries of all exist ing positions within the CES, of all positions that may be created within the CES, and of all positions as determined to be of the same category by the CESB. 13-month bonuses PRESIDENT Marcos, through PD 851 December 16 ordered payment of a 13-month instead of 12-month annual salary for all workers receiving less than Pl,000 a month. It takes effect from December 22, 1975. For purposes of 13-month pay for 1975, it applies to those who were em ployees as of December 16, 1975. Ac cording to Department of Labor regula tions implementing PD 851: 1. All employers covered by PD 851 shall pay to eligible employees the thirteenth-month pay not later than Decem ber 24 every year. 2. “Thirteenth-month pay” means one twelfth of the basic salary of an em ployee in a calendar year. 3. “Basic salary” includes all pay ments made by an employer to an em ployee for services rendered but may not include cost-of-living allowances granted pursuant to PD 525 of LOI 174, profitsharing payments, and all allowances and monetary benefits not considered part of the regular or basic salary at the time of the promulgation of PD 851. 4. The decree does not apply to: a) Distressed employers, such as (1) those currently incurring substantial los ses or (2) non-profit institutions and organizations, whose income, from do nations, contributions, grants and other earnings from any source, has consistent ly declined by more than 40 percent of their normal income for the past 2 years; b) The government and any of its political subdivisions, including govern ment-owned and controlled corporations, except corporations operating essentially as private subsidiaries of the government; c) Employers already paying their employees 13-month pay or more in a calendar year or its equivalent at the time of this issuance; The term “its equivalent” used here includes Christmas bonus, mid-year bonus, profit-sharing payments and other cash bonuses amounting to not less than one-twelfth of the basic salary, but not cash and stock dividends, cost of living allowances and all other allowances regularly en joyed by the employee. If an employer pays less than one-twelfth of the em ployee’s basic salary, the employer shall pay the difference. d) Employers of household helpers and persons in the personal service of another in relation to such workers. e) Employers of those paid purely on commission, boundary, or task basis, and who are paid a fixed amount for per forming a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned. Workers paid on a piece-rate basis are those paid a standard amount for every piece or unit or work produced that is more or less regularly replicated, without regard to the time spent in producing the same. 5. All employees of covered em ployers are entitled to the benefit if they are not receiving more than Pl ,000 a month, regardless of their position, designation or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one month during the calendar year. 6. A covered employer may pay one-half of the 13-month pay before the opening of the regular school year and the other half on or before the 24th day of December of eVery year. If an estab lishment contains a recognized union, the periodicity or frequency of payment of the 13th month pay may be tire sub ject of agreement. 7. The decree does not prevent employers from giving the benefits it stipulates to employees receiving more than one thousand pesos a month or benefits higher than those provided by the decree. 8. The benefits granted by the de cree should not be credited as part of the regular wage of the employees for purposes of determining overtime and premium pay fringe benefits, as well as premium contributions to the State In surance Fund, social security, medicare, private welfare and retirement plans. 9. Distressed employers shall qualify for exemption if authorized by the Sec retary of Labor. Petitions for exemp tions may be filed with the nearest regional office having jurisdiction over the employers not later than January 15, 1976. 10. Every covered employer shall make a report to the nearest regional labor office not later than January 15 of each year. The report shall contain: a) name of establishment; b) address; c) principal product or business; d) total employment; e) total number of workers benefited; f) amount granted per em ployee; g) total amount of benefits granted; h) name, position and tel. no. of person giving information. 11. Non payment of the 13-month pay shall be treated in the same way as money claims cases and shall be proces sed according to the Labor Code and the rules of the National Labor Relations Commission. 12. The decree does not authorize any employer to eliminate, or diminish in any way, supplements, or other em ployee benefits being enjoyed by the employee at the time of promulgation of the decree or the regulations. Two towns abolished B ASILAN CITY and two other towns of Basilan province were abolished by Pres ident Marcos through Presidential De cree No. 840 “to render its territorial partition more responsive to the peace, rehabilitation and total development of the area.” The capital of the province has been transferred to the municipality of Isa bela. Basilan province still comprises the whole island of Basilan and other ad jacent island. Under the decree, Basilan province has now seven municipalities, namely: 1. Isabela, which will occupy areas covered by the former city of Basilan and by the towns of Isabela and Malajnawi; 2. Lantawan, which will cover its present area and that of the former mu nicipality of Pilas; 3. Sumisip, which will occupy its present area and the former municipality of Tapiantana; 4. Maluso; 5. Tipo-Tipo; 6. Lamitan;and 7. Tuburan. Thev Regional Commissioner of Re gion IX is authorised under the decree to reappoint and reassign provincial and municipal government employes. He is also authorized to recommend to the President the reappointment and reas signment of incumbent elective officials so that the governmental framework will remain unimpaired and effective. Employes of the national govern ment assigned in Basilan province will be reappointed or reassigned according to the provisions of the law. To carry out its purpose, PD 840 appropriates an initial Pl.7 million from funds in the National Treasury not yet appropriated; Helping the courts UNDER Presidential Decree No. 828 dated November 19, President Marcos formed an Office of the Court Adminis trator (OCA) in the Supreme Court to assist the high court in the exercise of its administrative supervision over all courts. Under Article X, Section 6 of the new Constitution, the administrative su pervision over all courts has been trans ferred from the Department of Justice to the Supreme Court. The new office will be headed by a court administrator and will have three deputy court administrators. The ad ministrator shall have the same rank privileges and compensation and quali fication as the presiding justice of the Court of Appeals while the deputy ad ministrators will have the same ranks as the associate justices of the Appeals Body. The Supreme Court shall deter mine and define the powers, functions and responsibilities of the court admintrator and his deputies. It shall also create such- offices, services, divisions and other units in the OCA as it may deem necessary. For this purpose, the chief justice is authorized to adopt and carry out the corresponding staffing patterns. The court administrators of the new office in the Supreme Court shall be appointed by the Chief Justice of the high tribunal and shall serve until they reach the age of 65 years or become incapacitated to discharge the duties of their office. However, these administra tors may be removed or relieved for just cause by a vote of not less than eight justices of the Supreme Court. The new decree also provides that the chief justice may appoint or detail any member of the judiciary with the proper qualifications to the position of court administrator or deputy court ad ministrator. It, however, provides that any member of the judiciary so appoint ed or detailed shall not be deemed to have relinquished his judicial position, nor lost his seniority, precedence, ben efits and other privileges. PD 828 provides that the position titles and salaries of personnel shall be in accordance with the Judiciary Position Classification and Pay Plans. The salaries of the court administrator and his de puties shall not be decreased during their continuance in office. Until otherwise provided by law, however, their salaries shall be P56,000 and P52,400 each, respectively. All subordinates, officials and em ployees to be appointed under PD 828 shall belong to the classified service and shall be governed by the Civil Service Law, except those whose positions are highly technical or primarily confiden tial. To carry out its purposes, PD 828 appropriates an initial sum of P2.000,000. The appropriations for succeeding fiscal years shall be included in the An nual General Appropriations Decree. □ 14 1-31 December 1975 l] Special Section THE REPUBLIC Liberty and government in the New Society by Onofre D. Corpuz (Continued from previous issue) overwhelming majority of schooled Filipinos ZX teach and read foreign literature in English, and this language has fatefully conveyed and established in our national life in Anglo-Saxon tradition surviving from the seventeenth and eighteenth centuries. The conspicuous endurance and power of this tradition in the Philippines are easily shown. Out constitution repeats, virtually verbatim, one of the limitations imposed in the English revolution of 1688 upon William III: “Excessive bail ought not to be required, nor excessive fines be imposed, nor cruel and unusual punishments be inflicted.” It is a sure bet that William II could never have imagined that this condition imposed upon him by Englishmen to protect Englishmen's rights almost three centuries ago would be adopted in convention by Englishspeaking members of a nation of the brown race in Asia. These and other precepts of the Anglo-Saxon tradition are established in Philippine courts today as parts of the rights of accused Filipinos and as part of the fundamentals of justice. When the late Laurel presented his draft bill of rights, largely lifted from an American statute, to the Philippine constitutional convention qf 1934-193S, he justified it as an adequate safeguard of Filipino citizens against abuses by their government. This again is a faithful restate ment of the Locke-Jefferson tradition. Even today, many schooled Filipinos cannot conceive of liberty except in terms of the proposition that liberty exists only when governmental authority is curbed or limited. John Locke is certainly the intellectual inspiration of the members of the Civil Liberties Union of the Philippines, whether they be aware of him or not, as he is of the American Civil Liberties Union, both of which regard the bill of rights as the principal, if not the sole, definition of liberty. The civil liberties tradition, in particular, tends to believe that there can be no true liberty except with the broadest possible constitutional and statutory guarantees of the rights of free expression and political dissent. If we are to create a new society based on a vision of the future, we are bound by our duty to that vision to review and reassess the old concepts that our vision seeks to replace, in order that we not dis card sound principles and adopt others of inferior validity. Let us therefore re-examine the notion of liberty, a fundamental concept in our political educa tion, and assess it in the light of our efforts and aspira tions as a nation, to broaden the enjoyment of justice, to enhance our people’s welfare, and to secure our future in the New Society. Let us dispose of one problem immediately. Locke’s view of liberty is political liberty, that is, a view that regards liberty only in terms of the relations between citizens and the government. This view, so crucial to Locke, secures the welfare of Englishmen against abuses emanating from tne monarchy or government. As such, it is a priceless human tradi tion to which we may properly assent, although it by no means commands universal agreement, especially outside the political perspectives of the western world. It is amply the basic tradition underlying modern constitutional government, which is precisely what is meant by limited government. It is still per haps the most 'civilized' arrangement ever devised against capricious and arbitrary abuse of political power, so that the imposition of constitutional re straint on government has been adopted by most civilized nations. But the political liberty that is persuasively justified by Locke conceals a dangerous trap. This is clearly shown by a brief review of its historico-sociological context. It is 1690, and when Locke writes of the people, he by no means refers to the people in our sense. When he writes of the relations between the government and the citizens, he was referring to the monarchy on the one hand, and the English aris tocracy and upper classes on the other. To Locke it was the life, liberty, and property of the privileged classes of English society, not of all Englishmen, that were endangered by the monarchy and its government. The proof of this is the fact that the constitutional political system that Locke justified included only a small portion of English society. Locke saw no pro blem in tHe fact that the middle classes were not yet enfranchised in 1690; it was only in 1832 that English parliamentary reform extended the suffrage to them. The 1867 reform law still excluded English farm workers from the vote. And Englishwomen did not qualify for suffrage until 1918, when electoral reform finally enfranchised them, provided they were at least thirty years old. That the government should represent the people, that the people are sovereign, and that the consent of the governed is the basis governmental power-all critical elements in Locke’s political principles-have meaning in Locke’s political thought only because he equated the privi leged classes to the people. It was the same thing, for a long time, in Amer ica. The founding fathers proclaimed their conviction that God created all men equal. They pledged that ho min be denied the equal protection of the laws, but many of them, including Jefferson and Washing ton, were slaveowners. Slavery continued to be an American institution until the end of the Civil War, protected by the doctrine of political liberty, if in consistent with the idea of human equality. U.S. blacks remained less-than-equal under the separateand-equal principle until the historic 1954 decision of the U.S. Supreme Court. In short, the intellectuals of the Anglo-Saxon tradition during the seventeenth and eighteenth cen turies were thinking of the liberty and welfare of the privileged classes, not the liberty and welfare of the people; they were protecting the liberty of the few against the powers of the government. There is no more powerful or respectable justification in western political thought of the oligarchic domination of so ciety than the doctrine of political liberty. The elitist bias in Locke’s “life, liberty, and property” (1690) and in the American founding fathers’ “life, liberty, and the pursuit of happiness” (1776) likewise becomes evident once we read these formulations alongside of the French Declaration of the Rights of Man concept of “liberty, equality, fraternity” (1789). The Anglo-Saxon claim to liberty »s a special claim, made in behalf of the privileged classes. The French claim to liberty is a general claim to a right inhering in all of mankind, and therefore in every man by virtue of humanity alone, uncon taminated by any consideration of estate, race, or other condition created in society. This is why political liberty alone is not enough. Republican government, popular sovereignty, consent of the gov erned, and democracy have no meaning when polit ical liberty is the possession of the few, and not vouch safed for all. Liberty, indeed, is debased by those who claim it for themselves without claiming it for all of their countrymen, for then they claim it as a prerogative of birth, or race, or religion, or some other special circumstance, instead of as a universal human right. And this is why no national society can be truly free, unless there is equality in the enjoyment and possession of liberty. Moreover, the view of liberty which regards gov ernment as an actual or potential threat to the cit izens, and therefore prescribes restraints or prohibi tions on government as the answer to that threat, ought not to be pushed to its logical conclusion. The proposition should not be stretched to mean, for instance, that the welfare of citizens is secured only by keeping the government weak. This form of the proposition, paradoxically, undercuts its own force in two important respects. In the first place, the maximum of political liberty in this sense will always be less than the amount of liberty needed for the fulfillment and dignity of persons, either as indi vidual human beings or as citizens in a national society. I will demonstrate this later. In the second place, it is not operationally sound. President Marcos has said, simply and I think validly, that the first duty of government is to govern, and if it is to govern it must govern well, for a government that cannot govern well has no claim to either the physical obedience or the moral allegiance of the people. Worse, a govern ment that is weak and cannot govern well is itself a threat to welfare, for such a government certainly cannot redress wrongs, and therefore cannot promote rights. Locke’s preoccupation with political liberty is quite natural, given the circumstances of the revolu tion of 1688. It is also quite understandable, given his lack of sociological sensitivity. Quite apart from these, an undue fodus on political liberty often tends to confer undue importance upon the method for ensuring it-that is, on the bill of rights. Discussions on the bill of rights, especially judicial decisions, lawyers* briefs, and high school compositions tend to be couched in noble and outspoken language, be cause the enumeration of rights never fails to suffuse the reader with a reassuring sense of importance and potency. The bill of rights, when read at face value, is a symbolic mantle of protection available to the humblest and the highest in society, against which the vast and awesome powers of government cannot pre vail. From here arises the view that the bill of rights is the primary, if not the exclusive, source and guarantee of our liberty, security, and welfare. (To be concluded) ni LADISLAO BELLA SUBANG Inutil Man Ay May Puwang Din Sa Alinmang Lipunan IKINAGALAK NG mga magsasaka sa bansa ang utos kamakailan ng Presidente sa Court of Agrarian Relation, na idaos sa mga baryo ang pagdinig at paglilitis sa mga magsasakang nasasakdal dahilan sa lupa. Ang layon ng liderato ay mapabilis ang paggagawad ng katarungan at mabawasan pati ang mga alalahanin ng pamilya ng nasasakdal. Lalong nagalak ang mga magbubukid nang ihayag ng Presidente na bibigyan niya ng aksiyon ang rekumendasyon ng Free Farmers na pagkalooban ng tunay na kalayaan ang mga magsasakang Pilipino, pati ang pagtitiwalag sa mga hukom ng CAR na nakikipagtulungan sa mga may-ari ng lupa sa kapinsalaan ng mga magsasaka. Sa hakbang na ito ni Presidente Marcos ay isang katotohanan ang masasalamin ng lahat — na talagang kaibigan ng mga magsasaka at manggagawa ang puno ng Republika ng Pilipinas. Ngayon, ang tanging hinihintay ng Presidente ay tulong ng publiko sa lahat ng programa nito sa kaayusan, katahimikan at pagpapaunlad ng ekonomiya, laluna ang tulong ng mga kabataan. SIMBULO at inspirasyon ng mga kababaihang Filipino ang First Lady, Ginang Imelda RomualdezMarcos. Simbulo rin siya ng lahing kayumanggi sa bagong panahon. Ito ang bigay-katuturan ni Luis C. Diez, isang mataas na opisyal ng Second Bulacan Development Bank sa Meycauayan, sa larawan at katauhan ng First Lady, base sa tinungkol na maseselang misyon sa ibang bansa, at bilang espesyal na sugo ng Presidente, na naipagtagumpay na lahat. Sa lokal na pagsasakit, ang mga kilusang pangkawanggawa, mga kilusang bayan na laging ang masa ang nagtatamasa ng mga bunga, ay isang tagumpay na maisasama sa istorya ng Pilipinas. “Ngayong tang gapin niya ang pagiging gobemador ng Metro Manila”, THE REPUBLIC Isang Bansa, Isang Diwa Board of Editors Chairman: Francisco S. Tatad; Vice-Chairman: Reuben R. Canoy; Members: Lorenzo J. Cruz, Florentino S. Dauz Managing Editor: Luis V. Ople; Editorial Staff: Juanita G. Trinidad, Marcos D. Agayo, Gloria Jane Bayion, Rosalinda G. Roxas Art Director: Micaelita C. Almendral; Art Con sultant: Larry Z. Alcala; Photo Editor: Wilfredo G. Avila; Production Manager: Marcelino N. Palisoc■,Production Assistant: Cesar B. Tablason THE REPUBLIC is published fortnightly by the Department of Public Information, Malacanang, Manila, for government managers. The Editors welcome contributions of manuscripts and photographs which should be sent to THE REPUBLIC, Tuason-Gonzalez Bldg., Intramuros, Manila. While they will take reasonable care, the Editors assume no responsibility for the re turn of unsolicited manuscripts. Entered as a second-class mail matter on March 5, 1973 at the Manila Central Post Office. sabi ni Ginoong Diez, “ay tinitiyak ko, na ang pinagsakitan ng maraming nagdaang ehekutibo ng mga siyudad at bayang saklaw ng Metro Manila, ay magkakaroon ng kaganapan. Sa pagkakataong ito ay mangungusap ang kahulugan ng bayanihan o pagtutulungan.” Isang malungkot na rebelasyon ang aking tinanggap kamakailan. Na, marami sa mga magsasaka sa Northern at Central Luzon na nakautang sa programa ng Masagana 99, ang nakademanda at inuusig ng Gobyerno dahilan sa hindi pagbabayad kahit ma raming taon na ang nagdaraan. Narito ang isang anggulo ng katotohanan sa pagkakautang ng mga magsa saka. Ang iba ay hindi magsasaka, nguni’tnakautang, magsasakang nakautang, ngunit hindi nakababayad . . . at ang iba ay dahilan sa “Lucky 9”, isang uri ng sugal na sinasabing siyang bumiktima sa mga magsasaka. Ito ang isang “tip” na kailangang gawing anggulo sa muling pagsisiyasat ng mga maykapangyarihan sa mga hindi nakababayad na magsasaka. Ngunit kung tala gang ang dahilan nang hindi pagbabayad ay ang hindi pag-aani sa kagagawan ng bagyo at baha, bigyan pa sila ng maraming pagkakataon. At sa mga nagpabaya The truth behind the purge by TEODORO F. VALENCIA THAT COMPUTER which was supposed to say who were to be dismissed or forced into retirement in the on-going government clean-up failed. The com puter, after all, is just a processing factory. You get what you feed into the robot thinker. It does not think like humans but it adds, subtracts and divide perfectly. You feed it garbage, and you get garbage even if the product is deodorized. Now, we’re looking for scape-goats. The people who were entrusted the job of im plementing the President’s LOI 309 to rid the govern ment of corrupt and undesirable employes goofed. The error started with the lists prepared by heads of offices. This, in turn, we attributed to a communications gap. They did not know by what standards they were to go in the preparation of those lists. Charges were lumped regardless of their nature and motivations. The computer, as we know, cannot evaluate. Not all government personnel who had been previously charged or are facing charges deserve to be dismissed. Some such employes are among the best —that’s why they are charged. Minor charges, no matter how many, do not call for dismissals. Many charges are without basis or, even if true, do not constitute misbehavior. You all know that often, when an employe is exonerated, he is commended by the investigating panel. The people who fed the computers made no distinctions among light charges, heavy charges, charges generated by active pursuit of duties, etc., etc. Many agencies were reluctant to submit names of employes with pending charges, but they were told to do so; mechanically obeying, they lumped all those with charges. The instructions were explicit that the names of these government personnel were to be included —the form was prepared for them just to fill. Many who submitted names tried to categorize charges saying, for instance, that the employes had already been exonerated of those charges. But the computer, which did the rest of'the job, was not programmed to take these factors into consideration. The lists, therefore, turned out to be completely mechanical. The names of officials and employes purged did not all come from the official lists required in LOI 309. Many names were supplied via telephone, via anonymous letters and telegrams. To fit the operations of the computer, a points system was adopted to evaluate and give relative naman, kailangan ay ibilanggo at bawian ng karapatan sa pagmamay-ari o pamumuwisan ng lupa. ISANG uri ng sakit ang nagiging tatak ng mga nagiging bilanggo . .. sakit na pinandidirihan at aayaw pagtiwalaan. Ngunit sila’y tao ring katulad natin nagkakasala at nagsisisi pagkatapos. Isang eksperto sa kriminalidad, si Komisyunado Teodulo C. Natividad ng National Police Commission, ang nagsabi sa akin ng ganito: “Dapat na tulungan sa pagbabagumbuhay ang mga naging bilanggo.” Tama. Karamihan sa kanila ay may pamilya na dapat na buhayin. Ngunit dahilan sa naging bilanggo sila ay walang ibig na magbigay ng trabaho upang kumita ng marangal. Napapanahon nang dapat na repormahin ang ugaling ito ng Sinauna. Kapag ang kanilang pagbabagumbuhay at pagtitika ay hindi natin kinilala, pinahalagahan at tinanggap, ang ibig sabihin ay itinutulak natin sila upang maging masama uli. At kapag nagkagayon, ang pang arap ni Presidente Marcos na pagpapairal ng kaayusan at katahimikan sa lahat ng dako ng bansa ay hindi matutupad. Maituturing pa ring tayo’y kalaban ng mga nagpapakabuti. Alalahanin natin si Maria Magdalena. Bakit siya naging Santa? □ weight to various sources. Thus, an actual administra tive charge was given 10 points, a telephone call was given five points, a telegram was given four points and an anonymous letter 2.5 points, etc. After an employe accumulated a certain fixed number of points, he was earmarked for “slaughter.” Now, the victims know how they were decapitated. The names announced by President Marcos at the Quirino Grandstand Sept. 19, 1975, came from that computer. Necessarily, there were spectacular hits and spectacular misses. They could have done better if they had not relied on the computer. But they did this to make it appear impersonal. So nobody was hurt. But the end-result was worse—too many inno cent people were slaughtered, in a manner of speaking. Since that dramatic announcement of Sept. 19, 1975, many who were among those “purged” havereturned to their old jobs. They were innocent from the start. The effect has been negative for the President— it now appears that they are being returned surrepti tiously when, as a matter of fact, they are being vin dicated. No announcement is being made to hide the original mistake. The effect is far from what had been anticipated. We’ve learned a lot from the mistakes of that in ternal computer. One, that the computer can’t really think—can’t evaluate and is incapable of an opinion; two, that while the universal clamor is for weeding out the bad eggs in government, people will not stand for injustice. The strong public opinion against the manner the computer worked was fanned by the scattered examples (all over the country) of men of integrity and honesty who were included among those fired for graft, corruption or dishonesty. A few mistakes negated the overall plan. The government cleanup drive has been slowed down. We learned, too, that some people who are do ing their jobs with courage are the ones who get the most number of anonymous denunciations, ugly ru mors, administrative charges. Even the bosses of the upright employes often don’t like them, specially if these bosses are crooked. If such employes were ever included among those fed to the computer for evaluation, they would be the first to go. That computer fiasco was unfortunate but some good happened because of it. Now, we shall be more careful. Now, we will no longer entrust to a robot the job of evaluating public service efficiency and honesty. O Not So Funny - Larry Alcala 16 1-31 December 1975 A think-tank (or staff problems TO HELP improve personnel policies throughout the government, a new oitice will start cropping up in govern ment agencies during the coming year. It will be known as “Civil Service Staff’ and it aims to help personnel to give their best performance and to assist the government agency, at the same time, to get the best performance out of them. The name “Civil Service Staff” was chosen because some government agen cies already have various types of Civil Service Offices or Civil Service Units. Thus a new name was needed. Planners at the CS Commission note, however, that the word “'-.taff ’ also has the happy connotation of being something you can lean on, or get help from, on a journey. At the start, many of them will be manned by existing personnel and ad ministrative officers of the agency con cerned, but the Civil Service Commission will hire and train its own permanent specialists. It is hoped these units will have their own private offices with easy and confidential access within the agen cies. Presidential Decree 807, which ear lier this year redefined the powers and functions of the Civil Service Commis sion, specifically called for the organi zation of a Civil Service Staff in every department, bureau, agency, office, cor poration, and in provincial and city gov ernments. The terms of reference are specific: It shall provide technical assistance in all aspects of personnel management; Monitor and periodically audit the personnel practices and performance of the department or agency concerned as well as those of its officers and em-pioyees; Determine agency compliance with Civil Service laws and rules; and Welcome and receive any sugges tions, observations or complaints from the public pertaining to the conduct of public officers and employees. These functions may not appear to differ much from what the Civil Service Commission, as the government’s cen tral personnel agency, has already been doing. But there is a big difference: Instead of acting from afar, the Civil Service Staff will be within the main stream of agency operations. Therefore it can determine more effectively the type and form of assistance to be ren dered. The rationale behind this stems from the Commission’s desire to be right where the action is. Personnel manage ment is so inherent a function, and so permeates every single activity in an organization, that assistance must be on a timely and continuing basis. In the past, personnel management has often been overlooked and regarded as a peripheral activity. One important thing about the Civil Service Staff: It is not intended to do any “police” function. The Commis sion, in fact, is trying to get away from its old image of “policeman”. The new chairman of the Civil Ser vice Commission, Secretary Jacobo C. Clave, says: “We want to capture the imagination of the department and agen cy heads and of their personnel so that they will be more wholeheartedly com mitted to the cause of good personnel administration. It is not our intention to use this device to catch violators of Civil Service laws and rules.” To back up the contention that the CSC Staff is not intended as a covert policing operation, the Commission hopes each unit will be prominently accomrtiodated and signposted in its own room with easy accessibility. The Commission contends that if the aim were to catch wrongdoers, this probably could be more effectively done if the Commission were to conduct sur prise raids. ' j/ HE sheer bulk of work is one of the reasons why the Civil Service Staffs have become necessary. The Commission, which oversees a total government work force of 650,000, has 613 personnel. This means it has been unable to exer cise its assistance function to the fullest. In local governments, for example, there is great need to launch more in formation campaigns on the policies of the Commission, more training seminars, position clarification programs, and other personnel matters. Under LOI 319, the head of the Civil Service Staff in each agency shall be appointed by the Civil Service Com mission. But additional personnel and other logistical support is to be provided by the agency concerned. The Commis sion will have to recruit people, and put them through training courses, to fill the positions. But at the same time the Commission has the opportunity to avail of manpower support from the agencies. By so doing, the Commission has a better means of multiplying its efforts. As a transitional measure while ob taining the personnel who will head the CSC Staffs, the Commission has depu tized the existing personnel officers or, in some cases, administrative officers to head them. As the system started getting underway during the past month, around 50 agencies had already res ponded. Not only have they designated officers for deputization, but they have also allocated' other personnel to the Staff. Some personnel officers, however, express apprehension that their dual roles might be incompatible. But the Civil Service Commission asserts: Since the two roles are each concerned with the effective implementation of person nel programs and of the merit system, how can conflict arise? Personnel officers of various agen cies have already held meetings at the Civil Service Commission to discuss details. One thing to emerge so far is that standards may well vary from agen cy to agency and even for the same type of job within an agency. For example, some typing positions may require speed rather than an artistically laid-out re sult, while others may require the op posite. The CSC Staffs will take this in to account when setting out standards. An important factor is that each agency will play a leading role in setting its standards, monitoring them, and giv ing timely assistance to any employee who does not meet them. The Civil Service Commission em phasizes that the main task of the new unitsis to give assistance to staff and not to act as a fifth column in their midst. □ Guidelines for the Civil Service Stuff units HERE are the guidelines which the Civil Service Commission distrib uted to government agencies for setting up internal “Civil Service Staff’ units to evaluate personnel performance: Objectives: 1. To further improve the perfor mance of government officials and em ployees and enhance the contribution of the civil service to national develop ment; 2! To establish measures or indi cators of performance of government personnel.; 3. To recognize deserving personnel through honorary or monetary awards and to provide opportunities for the im provement of the performance of the least satisfactory or unsatisfactory per sonnel; 4. To promote a closer working re lationship between the Civil Service Commission and other agencies of the government in the common pursuit of providing effective _ public services through better personnel performance; and 5. To assure the effective utiliza tion of government personnel. Responsibility for the Program: Responsibility for the successful achievement of these program objectives rests upon the Civil Service Commission, the department/agency concerned, and the Civil Service Staff. Methodology: 1. The Civil Service, Commission shall be responsible for: (a) Formulation of policies, stand ards and guidelines relative to the estab lishment of the Performance Appraisal System. (b) Training of instructors on how to develop effective raters, with partic ular emphasis on the performance standards/requirements. (c) Institution of an effective re porting system for the monitoring and evaluation of overall personnel perfor mance in the government. (d) Preparation of integrated reports to higher authorities with emphasis upon the recognition of those with exemplary performance and the institu tion of remedial measures for the least deserving. 2. The Department/Agency shall take charge of: (a) Implementation of the Perform ance Appraisal System. This means that the agency supervisors at every level of the hierarchy shall determine, jointly with their employees, performance standards for particular jobs. They shall accordingly use these standards as bases for rating employee performance and shall provide feedback to the employees regarding their respective strengths and weaknesses. (b) Preparation of semi-annual re ports on the performance of the agency employees which shall be submitted to the Personnel Officer for evaluation and reference. A copy of such reports shall be given to the Civil Service Staff. 3. For its part, the Civil Service Staff shall: (a) Extend assistance in the proper implementation of- the Performance Ap praisal System. To carry this out, he may act as resource person in training pro grams to be held by the agency for the purpose and shall at all times be avail able for consultation. (b) Initiate the establishment of performance standards for each organi zational unit in the agency and give active asssitance when these are being established. (c) Receive copies of semi-annual reports of employee performance ratings and prepare a consolidated report on the same every year for submission to the Office of Personnel Planning and Program Evaluation, Civil Service Com mission, in August each year. Such re port shall call attention to the outstand ing employees and to the least satisfac tory or unsatisfactory. The following documents shall be attached to the report: —Performance rating forms reflect ing the ratings of the employees for the last two rating periods; —Performance standards established for the positions occupied by the em ployees concerned; —Records of performance of the employees concerned which would show that they have exceeded/met/not met such standards; —Justification for outstanding per formance by some employees, if any. (d) When an employee has been rated as “Unsatisfactory”, the Civil Ser vice Staff shall determine whether or not such employee has received prior no tice of unsatisfactory performance and has been given the opportunity to im prove such performance. If this has not been done, the Civil Service Staff shall: —Consider giving the employee op portunity to improve himself, with the assistance and encouragement of his supervisor, and the official report on his performance shall be held in abeyance for a period not exceeding two months or 60 days; and —Take steps to emphasize this as pect of the rating system in training programs on Performance Appraisal of the agency. The head of the agency and other officials concerned shall be furnished copies of such reports. (e) Any recommendations made by the Commission affecting both outstand ing and least satisfactory employees shall be communicated by the Civil Service Staff to the agency head who shall take appropriate steps to implement them.