Budget Secretary Florencio Abad on Tuesday countered reports on “bloated” salaries for the Administration’s Cabinet secretaries, adding that the figures touted as their annual pay included items outside their take-home wages.

Abad’s statement comes in the heels of news stories alleging that Cabinet secretaries received overblown salaries and perks in 2011, based on a September 2012 report by the Commission on Audit (COA).

“In the COA report, the final computation of our yearly pay actually includes large items that are not part of our take-home wages. Our salaries look high on paper, but a good chunk of the total figure is actually for agency- or work-related expenses, which require exhaustive liquidation reports and a lot of accountability from our end,” Abad said.

He, however, said that at Salary Grade 31, Cabinet secretaries receive a net pay of approximately P77,000 a month under the Fourth Tranche of the Salary Standardization Law 3.
The annual figures in the Audit report, however, also accounted for Cabinet secretaries’ Extraordinary and Miscellaneous Expenses (EMEs)—amounting to P220,000 and P72,000 a year, respectively—which are not considered as compensation for Cabinet secretaries.

Abad said that, under the COA rules, EMEs are strictly designated for official or work-related items—including membership associations, yearly subscriptions to key journals and publications and other purposes specified in the General Provisions of the General Appropriations Act—and are subject to scrutiny and liquidation.

The basic salary of a Cabinet secretary is also subject to monthly deductions, such as remittances to PhilHealth and Pag-IBIG and life and retirement insurance premiums, totalling to about P8,512.

Shrunken pay
In addition, income tax deductions can also climb to 32 percent of their gross monthly pay, further shrinking a Cabinet secretary’s take-home salary.

This brings the average gross annual compensation of a Cabinet member to approximately P1,336,000, with average annual deductions worth P403,353.72. The net annual total compensation, on average, is approximated at P932.646.28, sharply contrasting the benefits received by top officials in government-owned or -controlled corporations (GOCCs), Abad said.

“Our yearly wages don’t even come close to the salary of, say, the CEO [chief executive
officer] of a private company or GOCC officials. Maganda nga sana kung take-home pay namin ‘yung nakalagay sa report! The reality, however, is that we get to take home much less than what the report indicates,” Abad said.

He added that, while Cabinet secretaries receive the same bonuses as all other government
employees—including the 13th month pay, P5,000 Cash Gift and Productivity Enhancement Incentives—they do not receive the monthly transportation allowance of P11,000 if they use an official government vehicle.

“The values of transparency and accountability are the bedrock of President [Benigno] Aquino [3rd]’s good governance agenda. We cannot lose sight of these principles—especially in the context of our wages—because our role as Cabinet members brings us to the very forefront of these reforms. The last thing we want is to make a joke out of our own campaign for clean and honest leadership.

“In the end, what matters to us is that we ensure the efficient and effective delivery of crucial services to all Filipinos, and that we fulfill our respective mandates under the President’s Social Contract with the Filipino People,” Abad said.

With a report from John Constantine G. Cordon