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1/13

Published: Thu, January 16, 2014

Pag-IBIG, PCSO execs: Fund releases were legal

By Joyce Ilas

Two government-owned and controlled corporations (GOCCs) told Solar News on Tuesday that their disbursements,

which are being questioned by the Commission of Audit (COA), were all allowed by the law.

According to a COA report, the following GOCCs paid bonuses, allowances, and benefits to members of their board

of directors and employees that were excessive or without legal basis:
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Philippine Health Insurance Corp. (PhilHealth) - P1,651,084,000

Development Bank of the Philippines (DBP) - P216,801,000

Region 7 Water Districts - P186,584,000

Philippine Charity Sweepstakes Office - P54,829,000

Philippine Economic Zone Authority - P48,500,000

Home Development Mutual Fund - P37,636,000

Butuan City Water District - P28,243,000

Development Academy of the Philippines - P23,838,000

Philippine National Oil Co. Exploration Corp. - P14,518,000

Mactan-Cebu International Airport Authority - P14,406,000

COA had earlier asked officials and employees of 31 GOCCs to return to the government their bonuses and

allowances in 2012, saying the release of the amounts was unauthorized.

Among these GOCCs was the Home Development Mutual Fund, or Pag-IBIG Fund.

But Pag-IBIG Chief Executive Officer Darlene Berberabe, insisted that all disbursements her agency made were

authorized under existing laws.

She also clarified that the more than P37.5 million disbursement that COA disallowed were not bonuses but were part

of early retirement packages given to employees.

Berberabe added tha the Pag-IBIG Fund early retirement package could not be considered as double-retirement

compensation, as mentioned in the COA report.

Some Pag-IBIG Fund employees applied and received the agency's early retirement package before getting another

retirement package from the Government Service Insurance System (GSIS).

Berberabe said what should be questioned is the grant of a retirement package by the GSIS not Pag-IBIG's.

Under the GOCC Governance Act of 2011 all modes of compensation for government employees should be

approved by the Governance Commission on GOCCs.

But Berberabe explained that Pag-IBIG's charter was approved in 2009, and that it was among the three GOCCs

exempted from the new law.

She said Pag-IBIG would move for a reconsideration of the notice of disallowance.

Likewise, the PCSO said its almost P55 million worth of allowances and bonuses being questioned by COA is

allowed under the law.

PCSO General Manager Jose Ferdinand Rojas II detailed how the P55 million was disbursed:

More than P25 million was given as weekly draw allowances for those manning the daily lottery draw.

About P24 million went to the employees' cost of living allowance.

More than P2 million was paid to the board of directors for their per diem differential

More than P1 million went to other allowances.


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Rojas said, however, that the cost-of-living allowance and the benefits and allowance of the PCSO board of directors

had already been discontinued, starting in 2012.

This is the third time COA had called the attention of the PCSO over its use of funds.

But should COA finally rule that their disbursements were illegal, Rojas said the board of directors and their

employees would be willing to return the money to the national coffers through salary deductions.

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http://www.solarnews.ph/news/business/2014/01/16/pag-ibig-pcso-execs-fund-releases-were-

legal#.UveRJr2wrIU

Published: Wed, January 15, 2014

GOCCs stand pat in face of COA disallowances
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4/13

By Joyce Ilas

Several government-owned and controlled corporations (GOCC) say their disbursements being questioned by the

Commission of Audit (COA) were all allowed by law.

COA earlier asked officials and employees of 31 GOCCs to return to the government their bonuses and al lowances in

2012, saying the release of the amounts was unauthorized.
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5/13

Based on the COA report, these GOCCs paid bonuses, allowances and benefits to members of their board of

directors and employees that were excessive or without legal basis.

Among these GOCCs was the Home Development Mutual Fund, or Pagibig Fund.

Pagibig Chief Executive Officer Darlene Berberabe, however, insists that all disbursements that her agency made

were authorized under existing laws.

She also clarifies that the more than P37.5 million disbursement that COA disallowed were not bonuses but were part

of early retirement packages

given to employees.

Berberabe adds that the Pagibig early retirement package can not be considered as double retirement compensationas mentioned in the COA report.

Some Pagibig fund employees applied for, and received, the agency's early retirement package before obtaining

another retirement package from the Government Service Insurance System.

Berberabe points out that what should be questioned is GSIS' grant of their retirement package, not PAGIBIG's.

Under the GOCC Governance Act of 2011, all modes of compensation for government employees should be

approved by the Governance Commission on GOCCs.

But Berberabe explains, Pagibig was among the three GOCCs exempted from the new law, and so, would move for a

reconsideration of the notice of disallowance.

Likewise, the Philippine Charity Sweepstakes Office (PCSO) says its almost P55 million worth of allowances and

bonuses being questioned by COA was allowed under the law.

Jose Ferdinand Rojas II, PCSO General Manager, points out that there was an approval from the Office of thePresident. The charter of PCSO states that compensation of its board of directors is under the Office of the President.

Rojas says that, of the P55 million, more than P25 million was given as weekly draw allowances for those manning

the daily lottery draw, and about P24 million went to the employees' cost of living allowance (COLA). More than P2

million was paid to the board of directors for their per diem differentials, and more than P1 million went to other

allowances.


6/13

Rojas clarifies, though, that the PCSO COLA and board of directors' benefits and allowance have already been

discontinued since 2012.

This is already the third time COA called PCSO's attention over its use of funds.

But if COA finally rules that their disbursements were illegal, Rojas says, the members of the board of directors and

their employees are willing to return the money to the national coffers via salary deduction.

http://www.solarnews.ph/news/2014/01/15/goccs-stand-pat-in-face-of-coa-

disallowances#.UveS8L2wrIU

2013 national budget: Big bonuses await productive government workers

ByMichael Lim Ubac

Read more:http://newsinfo.inquirer.net/226760/p10b-earmarked-for-performance-incentives-for-

govt-employees#ixzz2spvhOqFb

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Budget Secretary Florencio Butch Abad. INQUIRER FILE PHOTO

State employees and officials will be among those who will benefit from the biggest national budget ever proposed bya sitting president to Congress.
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7/13

The General Appropriations Act (GAA) for 2013, which will be transmitted to Congress a day after the state of thenation address (Sona) of President Benigno Aquino on July 23, allots some P9 billion to P10 billion for theperformance-based incentives of the one million-strong bureaucracy.

Malacaang hopes the performance-based incentive system will strengthen accountability and encourageproductivity in state agencies.

In a press conference, Budget Secretary Florencio Butch Abad said the Aquino administration was working toharmonize all performance management systems in government and to deepen performance-based budgeting.

The performance scheme will reward agencies and public servants who meet and even surpass their performancetargets.

If approved, the first wave of performance bonuses will be granted in early 2013, with amounts ranging from P15,000to P35,000, depending on an employees productivity.

The performance bonuses will be on top of their existing productivity enhancement incentive bonuses which aresourced from the savings of individual agencies.

Abad said the incentive and bonus systems of government-owned and -controlled corporations (GOCCs) will also be

streamlined due to abuses in the past.

According to the budget chief, the Governance Commission for GOCCs (GCG) are in the process of preparing anincentive system for GOCC employees, which will be separate from the performance-based system of nationalgovernment agencies.

He noted that President Aquino had cited the situation at the Metropolitan Waterworks and SewerageAdministration, the Local and Water Utilities Administration, among other agencies, where they really abused theuse of government funds to grant themselves so many allowances and bonuses that actually had no legal basis.

Abad said the GCG was now reviewing these allowances, and limiting them to what was authorized under an existingexecutive order.

The proposed P2-trillion national budget for 2013 is 10.5 percent higher than the P1.816-trillion budget for the currentfiscal year. With Ronnel W. Domin go

Originally posted: 8:37 pm | Tuesday, July 10th, 2012

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http://newsinfo.inquirer.net/226760/p10b-earmarked-for-performance-incentives-for-govt-employees

Govt pay review may be neededRecto

ByNorman Bordadora

Philippine Daily Inquirer

5:27 am | Sunday, August 4th, 2013

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8/13

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Senate President Pro Tempore Ralph Recto: We may end up with no one warning us of incoming typhoon. INQUIRER FILE PHOTO

MANILA, PhilippinesIf the new appropriation for hazard benefits proposed in the P2.26-trillion 2014 national budgetisnt enough to keep the countrys weather men from leaving for better pay abroad, it may be time to review thegovernments salary structure, Sen. Ralph Recto said Saturday.

Recto, the Senate President Pro Tempore, said the proposed budget for next year already provides for substantiallyincreased hazard pay for civilian government employees and hiked benefits under the Magna Carta for Science andTechnology.

He also mentioned four new appropriations for hazard and hardship benefits.

At the rate weather forecasters are leaving the Philippine area of responsibility, we may end up with no one alarmingus that a typhoon is coming, Recto said.

Recto, also the chair of the Senate committee on science and technology, made the statement after anotherforecaster, Ricky Fabregas, was reported to have left the weather bureau Pagasa to accept a P100,000-a-month jobin the Congo.

If the problem is in the delay of the release of the benefits of Pagasa people, then I am confident that the[Department of Budget and Management], being the main preacher of the gospel against red tape, will resolve itsoonest, he said.

Recto said the 2013 budget provided for P51.8 million in hazard pay for government personnel outside the uniformedservices and P183.7 million in benefits under the Magna Carta for Science and Technology.

He added that under the proposed 2014 budget, the benefits would increase substantially with the total allocation forhazard pay rising to P832 million and the Magna Carta for Science and Technology benefits up to P224.6 million.

The good news is that four new hazard and hardship allowances for civilian employees have been created in the2014 budget, Recto said.
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9/13


10/13

An agency overseeing the compensation in government-owned and -controlled corporations (GOCCs) said theCommission on Audit (COA) had not issued a final notice of disallowance to 31 GOCCs that gave a total of P2.313billion in bonuses and allowances to executives and employees in 2012.

In a report, the COA said the GOCCs paid bonus(es) and allowances and benefits to the board of directors andemployees without or in excess of legal basis or proper authority.

The Governance Commission for GOCCs (GCG) said in a statement that the GOCCs had amply explained to theCOA the bonuses and allowances.

Several GOCCs, including Philippine Health Insurance Corp. (PhilHealth), contacted by the Inquirer said the bonuseswere aboveboard.

But the unauthorized bonuses prompted an opposition senator to cast doubt on the good governance platform of theAquino administration.

Sen. Joseph Victor Ejercito, chair of the Senate committee on economic affairs, blamed the GCG for allowing thebonuses that state auditors found inappropriate.

After all that the GOCCs went through and despite the promises made by P-Noy [President Aquinos nickname] in

his first Sona [State of the Nation Address], it turns out that the path has yet to be straightened out, Ejercito said in atext message.

The windfall of bonuses given to GOCCs during the Arroyo presidency was one of the issues addressed by theAquino administration shortly after it came to power in 2010.

GOCC Governance Act

A Senate inquiry into the huge 36-month compensation package at the Metropolitan Waterworks and SewerageSystem during the Arroyo administration eventually led to the crafting of the GOCC Governance Act of 2011,principally authored by Sen. Franklin Drilon.

The law created the GCG that oversees the compensation of GOCC executives and employees.

The problem is the implementation, the violation committed by authorizing the release of bonuses, Ejercito said.

It seems there is nothing wrong with the GOCC law. What needs to be done is how to ensure that the governancecommission strictly follows the law and at the same time considers the plight of the rank-and-file employees of theGOCC, Ejercito added.

Rehash

PhilHealth president and CEO Alex Padilla said the issue raised by the COA was a rehash of the same controversya few months ago, which we have responded to then.

Padilla said these are benefits which are granted since six or sevenyears ago, before my time. There are no new

ones.

He explained that some of these benefits were either magna carta benefits for health workers or a collectivenegotiation agreement (CNA).

The [CNA] is the counterpart of the collective bargaining agreement in the private sector. The CNA is a contractbetween the management and the workers which has a life span of three years. It cannot be breached, otherwise itsa violation of the contract, he said.


11/13

Padilla cited the PhilHealth law which, he said, allowed the agency to decide on its own the compensation of itspersonnel so long as it was approved by the board.

It does not require presidential approval, he said.

The PhilHealth official also questioned the amount the COA was asking the agency to return. I dont know where theP1.6 billion came from. Were still talking here of the same amount, which is P1.4 billion.

That P1.4 billion was distributed to 5,900 employees. Were actually in the lower bracket of compensation comparedto other GOCCs and the private sector. I hope we put this in the right perspective. PhilHealth has been giving P1.2billion a week in benefits to PhilHealth members, he said.

Difference in opinion

There is obviously a difference in the opinion of the COA and PhilHealth. This is a question of interpretation of thelaw. They have their own interpretation, we have our own, he said, adding that they intend to challenge in court thefindings of the COA.

This should be settled by the court at the appropriate time, he said.

Padilla also said that the PhilHealth board never received a single centavo in bonuses.

PhilHealth has 17 directors, 13 of whom are from the government so they receive nothing because that would bedouble compensation. The four others only receive representation allowances, he said.

COA report 4-month-old

Lawyer Paolo Salvosa, GCG spokesperson, noted that the order of the COA to refund questionable bonuses andallowances was based on a four-month-old COA report.

Acting on the report, the GCG still required the GOCCs to address COAs observations.

Nonetheless, by virtue of the PDI (Philippine Daily Inquirer) news item, all the GOCCs mentioned have been directedto submit to the GCG a concrete response and reply thereto within the next 24 hours. The GCG will be issuing withina few days the final responses of the GOCCs and the commissions own evaluation for the guidance of the generalpublic, Salvosa said.

Before Aquino administration

Replay Ad

He also noted that the amounts in the report covered various items that were already being granted without legalbasis before the Aquino administration.

As the current administration has been firm on its policy of not granting post facto approvals, many of these findings

have therefore been recurring in COA reports, he said.

Salvosa said the GCG had reviewed the COA reports and discussed the findings with the GOCCs concerned(excluding local water districts and economic zone authorities that are not within the jurisdiction of the commission).

(E)xcept for three GOCCs, none of the other GOCCs covered in the COA report have been issued notices ofdisallowance, he said.

In fact, after conferring with the COA, no final notice of disallowance has yet been issued against the GOCCsmentioned in the report, he said.


12/13

Puzzled

The management of the airport operator Mactan-Cebu International Airport Authority (MCIAA) said it was puzzled bythe COA report.

Nigel Paul Villarete, general manager of MCIAA, said the performance-based bonuses that the government-runcompany distributed to its employees for their 2012 performance was authorized by the GCG.

We [MCIAA] are perplexed by the report that we distributed unauthorized bonuses. The bonuses we gave out werebased on the guidelines issued by the GCG, Villarete claimed.

Authorized bonus

In fact, he said, the GCG issued the authorization for the distribution of the performance bonuses earlier this month.

Villarete said he had a copy of the authorization and was willing to show it to respond to inquiries.

He said MCIAA did not distribute other bonuses besides the performance-based bonus authorized by the GCG, themandated 13th month pay, and the cash gift that was common for all government employees worth P5,000 each.

A media relations officer for the Development Bank of the Philippines (DBP) said the state-owned financial institutiondistributed bonuses to its employees using guidelines set by the GCG.

The DBP source said the bank did not want to give any further comment on the matter.

The Philippine Economic Zone Authority (Peza) also declined to comment on the issue as of press time.

Aboveboard

At the Clark Freeport in Pampanga province, an official of Clark International Airport Corp. (CIAC) said the bonusesthat the agencys officials and employees received in 2012 were all aboveboard.

Victor Jose Luciano, CIAC president and chief executive officer, issued this statement in reaction to the COA orderfor 31 GOCCs, including the CIAC, to return P2.313 billion in bonuses and allowances.

It is not true; all bonuses of CIAC are aboveboard, in compliance with the [requirements of the GCG], Luciano saidin a statement.

The COA report said the CIAC released P23.9 million in bonuses and other benefits to its officials and employees in2012.

These, according to the COA, included the performance-based bonus of P4.1 million and performance enhancementincentives of P1.7 million. The GCG authorized these for that year, Luciano said.

He said the Labor Code mandated the 13th month pay while the 14th month pay was part of the agencysemployment compensation package.

Water districts, Peza

Contacted by the Inquirer, presidential spokesman Edwin Lacierda said the three GOCCs that were mentioned in theCOA report but beyond the jurisdiction of GCG were Region 7 water districts, Butuan City Water District and Peza.

The GCG law excluded local water districts and economic zone authorities, said Lacierda, quoting GCGCommissioner Angela Ignacio.


13/13

The GCG, however, still required all GOCCs in their 2013 performance agreements to submit concrete and time-bound action plans for addressing COAs observations.

This is to ascertain that the fitness of the members of the governing boards may already be evaluated pending theevaluation by the COA and the courts on whether a notice of disallowance should be issued, Salvosa said.With areport f rom Tonet te Orejas, Inquirer Central Luzon

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