South Korea's government said Friday that it will raise wages of state-run companies by a maximum 3 percent in 2012 to reflect the general rise in living expenses.

   The finance ministry said a committee governing public sector management passed the increase motion after reviewing demands raised by all parties and the need to control inflationary pressure.

   It added that bonuses that are given to companies which have performed well and met management targets will be withheld from those that have done poorly in comprehensive reviews.

   "All bonuses will be given based on performance and results, with more government oversight on who gets the extra money," the ministry said

   The move comes after Seoul said salaries of public servants working for ministries, agencies and provincial governments will be raised by 3.5 percent in the new year.

   In addition, the finance ministry said that it plans to get public companies and organizations that have assets in excess of 2 trillion won (US$1.7 billion) to establish more rigorous accounting regimes to ensure financial health of the public sector as the country tightens control over unnecessary spending.

(Yonhap News)