The PES allows the Governance Commission to assess the operations of Government-owned or-controlled Corporations (GaCCs) and utilize such evaluation in determining the eligibility of GaCCs for their bonuses for the year. Concretely, the PES is pursued through annual Performance Agreement Negotiations (PAN) between the GCG and the Governing Boards and Management of GaCCs, which ullimately leads to the establishment of the GaCCs' Performance Scorecards. The following are the phases and steps of the PES:

Phase 1
- GaCC submits proposals for Performance Negotiation
- GCG checks completion of proposals and requests lacking documents
- Performance Agreement Negotiation is held between GCG and the GaCC Governing Board
Performance Agreement Negotiations
GaCCs are authorized to grant Performance-Based Bonuses (PBB) and Performance-Based Incentive (PBI) only if they achieve breakthrough resulls. GCG negotiates Performance Scorecards with each GaCC Board to identify breakthrough resulls that will push GaCCs to go beyond their day-to-day operations and achieve outcomes that have a significant impact on their customers and stakeholders while maintaining financial viability. Negotiations are done on the basis of historical performance, benchmarking with the private sector, and feedback from the public on the Scorecards. The Performance Agreement consists of the GaCC's long-term mission and vision based on its Charter, supported
by a Performance Scorecard system that was adopted with some modifications from the Balanced Scorecard, a D37performance tool developed in Harvard University and considered a best practice in the private sector. The vision, in turn, is supported by a strategy map identifying the different objectives that must be achieved in order to realize the breakthrough resulls embodied in the vision statement. Progress in executing the strategy, in turn, is measured through the Performance Scorecard consisting of 8-20 measures across 4-5 perspectives, namely: 1. Social Impact, which is an additional perspective added by the Governance Commission in cases where the outcomes for customers or stakeholders are separate and distinct from the outcomes to society; 2. Customers / Stakeholders, which contains performance measures that focus on the provision of products and services meant to enhance the capabilities of the stakeholders or customers of the GaCC; 3. Financial, which highlights the performance measures that ensures the financial sustainability and viability of the GaCC;
4. Internal Process, which identifies performance measures for enhancing or strengthening the internal
processes required to produce the outcomes identified in the Social Impact, Customers/Stakeholders
and Financial perspectives; and 5. Learning and Growth, which focuses on performance measures that create development among organizational resources such as people, structure, and knowledge, with the goal of improving both the individual and the corporation. Annual targets for each performance measures are negotiated each year, and each measure is assigned a corresponding weight based on importance relative to the other measures. The total weight of performance measures relating to Social Impact and Customers/Stakeholders ranges from 30% to 40%, and a GaCC must achieve a weighted-score of 90% in order to be eligible to grant performance bonuses to its employees.

Phase 2 PBB
- GOCC submits performance monitoring report, PBB application, and other required documents
- GCG reviews the reported achievements and compliance with Good Governance Conditions IATF
certifies compliance wtth Good Governance Condttions GOCCs who meet at least 90% of its committed targets are authorized to release the PBB to their officers and employees. The performance reports of GOCCs at the end of each calendar year are subjected to a performance audit by GCG. Performance analysis is also conducted during the audit, and the findings are used in the next performance negotiation. In addition to meeting the 90% requirement, GOCCs must also comply wtth Good Governance Conditions set by the Governance Commission and the Inter-agency Task Force (IATF) on Performance Monitoring created under Administrative Order No. 25, s. 2011. These Conditions are meant to ensure that GOCCs pursue their performance targets while ensuring that their operations are transparent and responsive to the principles of good governance.

Phase 3 PBI
- The PBI Application only begins if the PBB is successfully granted
- GOCC Board submits PBI application
- GCG validates Appointive Director's attendance to 90% of Board and Committee meetings
- PBI to Appointive Director is granted only if GCG issues authority

The following are the documents that the GOCCs are required to submit to GCG:

1. PBB Memorandum Circular Requirements

2. IATF Good Governance Conditions
- Transparency Seal
- PhilGEPS Posting
- Report on Ageing of Cash Advances
- Cttizen's Charter
- SALN Submission
- ISO Certification/Operations Manual
- Posting of Guidelines of Rating and Ranking
- APP
- APCPI

3. GCG Good Governance Conditions
- Payment of all statutory liabilities
- Concrete and Time bound Action plans for COA
- Manual of Corporate Governance
- No Gift Policy
- Disclosure Requirements