PEZA pay plan illegal – Miriam


SENATOR Miriam Defensor-Santiago wants the Senate to investigate the high salaries being given to officials and employees of the Philippine Economic Zone Authority (PEZA), saying the agency’s compensation plan is illegal.

Santiago, in filing Resolution 1563, asked the concerned Senate committee to look into the P678-million compensation that PEZA paid its personnel in excess for the past six years, a move that was red-flagged by the Commission on Audit (COA).

“The PEZA should have no delusions: Pending the approval of the President through the DBM [Department of Budget and Management], it should discontinue the implementation of salary adjustments and the use of new salary rates in the computation of benefits and premiums,” the senator said.

At the same time, she called on her colleagues to come up with measures that will give more teeth to COA’s notices of disallowance.

Santiago noted that PEZA, while appealing notices of disallowance from 2009 to 2013, continued to overpay its employees.

“On the other hand, we must consider legislation that will mandate the COA to immediately resolve appeals on notices of disallowance in order to make such notices final and enforceable,” the senator said.

In 2014, PEZA overpaid its personnel by P165 million by using a salary scheme that was not approved by President Benigno Aquino 3rd.

“In other words, PEZA has been illegally paying its employees for six years,” Santiago said.
She explained that while PEZA is allowed to promulgate its own compensation scheme, it is still subject to the approval of the President.

Santiago cited Section 6 of Presidential Decree (PD) 1597, which states, “Agencies shall report to the President, through the Budget Commission, on their position classification and compensation plans, policies, rates and other related details following such specifications as may be prescribed by the President.”

COA, in its report on PEZA that was released recently, cited the 1999 case of Intia v. Commission on Audit where the Supreme Court ruled that PD 1597, Section 6, applies even to government corporations whose charters allow them to fix their own compensation system.

In that case, the Supreme Court agreed with COA that payments for representation and transportation allowances (RATA) fixed under rates approved through a board resolution of the Philippine Postal Corp. must be disallowed for failure to submit the same for review and approval of the DBM.


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  1. You think of any kind or scheme of corruption, you will find it accepted and tolerated by this administration. You also find gov’t officials thinking only of their own or interest to benefit their businesses like the case of BERT LINA. If ever he will be confirmed as the Com. of BOC, Our country will go to the dogs. DIYOS KO MAAWA KAYO SA MGA PILIPINO.