Congressmen in double time: Gov't salary hike must be ready Jan 1
MANILA, Philippines (UPDATED) – The lower house has approved on second reading the proposed measure to increase the salary of government employees late Wednesday, November 11.
The approval came on the same day the House committee on appropriations accepted the legislation endorsed by President Benigno Aquino III.
It was earlier expected that House Bill 6268 would pass the 2nd and 3rd reading on the same day, should a certification as urgent from Malacañang was issued.
"I believe we consider this urgent to take effect in January 1 [next year]. This was already included in the 2016 budget," appropriations committee chairperson Representative Isidro Ungab said earlier in the day. (READ: Aquino pushes bill to raise gov't workers' salaries)
But as of passage, no certification has been released.
Increase basic salary for pension
Voted on viva voce, the proposal was only contested by ACT Party-list Representative Antonio Tinio, who is seeking for a higher basic pay for workers classified under lower salary grades.
He argued before the committee that workers belonging in salary grades (SG) 8 to 11 will only receive less than 12% increase in their wages, which only amounts to about P500 increase per year. (READ: Only ranking officials will benefit from gov't salary hike – congressman)
Budget Secretary Florencio Abad refuted Tinio's claim. He said that those specific grades will receive as much as 30% increase if bonuses, which are tax-exempt, will be credited.
"Their take home pay includes the 14th month pay and the performance-based bonus (PBB), so in effect they would bring home 30 percent and not just 11.89 percent," Abad explained in a mix of English and Filipino.
While Tinio acknowledged the added benefits of the bonuses, he stressed that workers still need a bigger basic pay to secure their retirement.
"The salary increase, unlike the bonus, will have an implication not only for their immediate needs but for the retirement as well," the lawmaker noted.
"'Yung tatanggaping pension ng guro o government employee will be based on basic pay and not the bonus." (The value of the pension a teacher or a government employee will receive will be based on the basic pay and not the bonus.)
He then suggested eliminating or reducing the amount allocated for the performance-based bonus to accommodate increase in the base salary.
"Baka po bawasan natin ang performance-based bonus, at ilagay sa basic salary. Our position in ACT, wala na dapat ang PBB lahat ilagay sa basic salary."
(Maybe we can reduce the performancebased bonus and put it instead to the basic salary. Our position stands for the abolition of PBB and allocate everything to the basic salary.)
"Bakit di na lang gawin na one month na lang 'yung maximum ng PBB and the other one month will be placed in the basic salary," he also recommended.
(Or why not just give one month's worth of PBB and allocate the other month's worth of salary to the basic pay.)
Bring gov't pay closer to market rates
But the budget secretary said they were "reluctant" to grant ACT's proposal because this would affect the higher salary grades.
"The only way that we can really bring the pay of the higher salary grades close to 70% is by providing them with an enhanced performance-based bonus," Abad said.
If they reduce the PBB, the net salaries of high-ranking posts, may not reach 70 percent of the market rates, which will contradict with their mandate based on Joint Resolution Number 4.
"Joint Resolution No. 4 just simply tells us to review the competitiveness of government pay in relation to the private sector and to put together a strategy to bring government pay closer to the market,” he explained.
He also noted that the current proposal seeks a more "balanced" compensation package for the workers, mentioning that the previous SSL 3 placed all augmentation to the basic pay that lead to an increase in the income tax charge.
"Kapag 'yung 14th month pay at 'yung PBB sinama mo dun sa basic pay hindi siya exempted from tax kaya 'yan."
(When you include the 14th month pay and performance-based bonus in the basic pay, it won't be exempted from tax.) – Rappler.com