President Benigno Aquino 3rd has endorsed to Congress the passage of a salary standardization bill that would increase the average basic pay of government workers by 45 percent.
The state workers would also get to enjoy an 8-percent increase in their mid-year 14th month pay and an enhanced performance-based bonus (PBB) system.
This means that a Salary Grade 1 employee who is at present receiving P9,000 a month in basic salary will take home P P11,068 in January next year.
Public school teachers who serve as members of the Board of Election (BEI) Inspectors stand to receive P25,000 from the P19,000 at present.
The country’s next President, whose pay is classified as Salary Grade 33, will be getting P399,000 in basic salary when he gets his first pay in July next year.
Aquino, whose current basic monthly salary is P120,000, is not covered by the proposed salary adjustment as the Constitution bars the giving of salary increases to the President, Vice President and members of Congress.
The first cycle of the adjustment is set to take effect on January 1, 2016– an election year–with the subsequent three tranches taking effect every succeeding January 1 until 2019.
Davao City Rep. Isidro Ungab said the administration-friendly House of Representatives is expected to act swiftly on Aquino’s proposed measure.
Ungab, chairman of the House Committee on Appropriations, added that he expects the bill to be approved in a single hearing.
The measure was scheduled for first reading on Monday or a few hours after the President publicly endorsed its passage to Congress.
“We’ll only have one hearing on this measure. I’m sure everybody will support the proposal. I don’t see any objection to this,” Ungab told reporters.
“We received a letter addressed to Speaker [Feliciano] Belmonte [Jr.] from the executive department and [Budget] Secretary [Florencio] Abad on the 2015 SSL [Salary Standardization Law]. We will act upon it immediately. We agreed to pass it on first reading this afternoon and the House appropriations committee will start hearing it this Wednesday,” Ungab said.
President Aquino announced the move as he spoke at Monday’s awards ceremony of the 2015 Search for Outstanding Public Officials and Employees Awards in Malacañang.
The President said the pay and benefit increases are contained in the proposed 2015 SSL, a measure that would mandate a four-year P226-billion compensation increase for the national government’s 1.53 million civilian, military and uniformed personnel.
“Because we have a reliable civil service, we have the guts to propose to Congress the passage of the Salary Standardization Law 4. Congress, under the leadership of Senate President Frank Drilon and Speaker Belmonte, also has the guts to firm this up,” Aquino pointed out in a speech delivered in Filipino.
“It is our desire to give our employees reasonable wages and make their pay and benefits in government get as near as what their counterparts in the private sector get,” the President said.
Budget Secretary Abad said the proposed enhancement of the performance-based benefit system would be equivalent to an average 10 percent increase in salary.
“Government personnel who play a greater role and carry a heavier responsibility in improving government performance will receive a higher bonus,” he added in a statement.
After four tranches, Abad said, government pay “on a weighted average basis” is seen to increase by 45 percent or be around 84 percent of private sector pay.
The lowest salary grade, Salary Grade 1, will be about 154 percent of the market, while the highest, Salary Grade 33, which covers the President, will be about 70 percent of the market
At present, government pay on the average is only 55 percent of prevailing market rates.
Abad said the adjustment of government salaries is in accordance with Joint Resolution 4 of Congress of 2009, “which provided for a review of the compensation and position classification system after three years from the last year of the adjustment [which was June 1, 2012].”
He added that it is a move to measure “the competitiveness of government pay in relation to the private sector” and “the compensation strategy to bring government pay closer to market rates.”
Human resource consulting firm Towers Watson was tapped by the Department of Budget and Management to study the proposal, which was completed in July 2015.
“In structuring the compensation adjustment, we were guided by five parameters:  The minimum basic salary–Salary Grade –shall be raised from P9,000 to P11,068 a month;  To attract and retain competent and committed personnel, the new compensation level for all salary grades shall be at least 70 percent of the market;  To recognize differences in duties and responsibilities, there shall be no salary overlaps;  The link between pay and performance shall be strengthened, especially for those in the higher salary grades and  The structure of the adjustment should temper the cost of benefits [i.e. GSIS premiums and PhilHealth contributions] and allow for higher take-home pay, especially for those in the lower salary grades,” Abad said.
“As a consequence of Republic Act [RA] 10653, which raised the amount of benefits exempted from tax to P82,000, for majority of civilian employees, those belonging to Salary Grades 1-11, and who are only receiving the existing tax-exempt 13th month pay, the cash gift and the productivity enhancement incentive (PEI), their full 14th month pay and full PBB will also be exempt from tax. For those belonging to Salary Grades 12-16, who also are only receiving the existing tax-exempt 13th month pay, cash gift and PEI, only their full 14th month pay will be exempt from tax,” he added.
Incumbent government officials, particularly those occupying elective positions, will not benefit from the proposed measure.
Under the Constitution, increases in the President and Vice President’s salaries will only take effect after the incumbent’s term expires. The same applies to members of Congress.
Unless they get reappointed by the next administration, Aquino’s Cabinet members will not benefit from the proposal since the adjustment for Cabinet members will take effect on July 1, 2016, or after Aquino’s term ends.
Senate okays SSS pension raise
The Senate on Monday approved on third and final reading a bill granting an across-the-board P2,000 increase in the monthly pension of Social Security System (SSS) pensioners.
Voting 15-1, the Senate passed House Bill 5842 or the Social Security Act, seeking to amend Section 12 of RA 1161 or the Social Security Act of 1997.
Senate Minority Floor Leader Juan Ponce Enrile voted against the passage of the bill, saying the granting of the ‘generous benefit’ to the estimated 1.9 million pensioners would eventually lead to the “bankruptcy” of the SSS.
”We should not allow our future generation inherit a bankrupt SSS,” the 91-year-old Enrile said.
House Bill 5842 was sponsored in the Senate by Senator Cynthia Villar, Senate President Pro-Tempore Ralph Recto and Senators Teofisto Guingona 3rd, Joseph Victor Ejercito, Ramon Revilla Jr., Francisco Escudero, Jinggoy Ejercito Estrada, Ferdinand Marcos Jr. and Deputy Minority Leader Vicente Sott 3rd.
Villar, chairman of the Senate Committee on Government Corporations and Public Enterprises and principal sponsor of the bill, said, “Given the rising cost of living, it is high time we give our retirees and their family a monthly pension that will allow them to at least live with dignity.”
Since the Senate adopted the House version of the bill, she noted that there will be no need to approve the proposed bill at the bicameral conference committee.
At the House of Representatives, the bill was introduced by Representatives Neri Colmenares, Carlos Isagani Zarate, Mark Villar, Jesus Sacdalan, Marlyn Primicias-Agabas, Cresente Paez, Agapito Guanlao, Edgardo Masongsong, Leah Paquiz and Antonio Tinio.
“While the SSS provided a five percent across-the-board pension increase for its retired members in 2014, it is admitted that such 5 percent increase is definitely inadequate and not sufficient to cover the rising cost of living for the past 18 years,” Villar said.
She cited data from the National Statistical Coordinating Board, which pegged monthly poverty threshold for a family of five at P8,022 per month.
Poverty threshold refers to the minimum income a family or individual must earn in order to be considered “not poor.”
Villar said that average SSS pensioner receives P3,169, which is below the poverty threshold.
”I do not think that the basis for which the SSS was established, that of promoting social justice and providing meaningful protection to its members and their beneficiaries against the hazards of old age, loss of income, among others, is at work,” she added.
Recto said roughly 1.5 million of the SSS pensioners of about 81.5 percent received a monthly pension below P4,000 in 2012.
The amount is less than the daily minimum wage and was below the poverty line set by government.
Under the proposed bill, those receiving the minimum SSS pension of P1,200 per month will now receive P3,200 under this bill and those who are getting P3,169 a month will receive an additional P2,000.
Recto said the increase in monthly SSS pension will not result in underspending since pensioners will spend their money and boost the domestic economy.