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In light of Philippines Inquirer’s recent expose on fat pay check of CDC President Ricafort, congress starts probe on scandalous emoluments.

Solons seek cuts in fat gov’t pay

MANILA, Philippines—Congress will investigate the “excessive” salaries and allowances of executives of government-owned and -controlled corporations (GOCCs) as it seeks to rein in fat paychecks, which one lawmaker describes as “scandalous” amid the poverty and the rising incidence of hunger.

The Senate is scheduled to start its probe on Aug. 17.

Sen. Franklin Drilon, chair of the committee on finance, said the Senate would initially summon officials of the Commission on Audit, Department of Budget and Management and the Office of the Executive Secretary to shed light on the compensation of executives in government.

“We will look at the magnitude of the abuse and we will ask them to explain how they happen to have huge allowances. We want to know how we can harness their excess funds for the government,” Drilon said on Tuesday.

He proposed that the GOCCs be compelled to put a cap on their salaries and perks, and impose a mandatory declaration of dividends to the government every year.

The calls for investigations came after the Inquirer ran a report by the Commission on Audit listing the top executives receiving huge salaries and allowances in 2009.

Arreza’s P26.9 million

Topping the list was Administrator Armand Arreza of the Subic Bay Metropolitan Authority (SBMA), with P26.9 million.

He was followed by Benigno Ricafort, chief executive officer of Clark Development Corp., with P14.5 million; Edgardo F. Garcia, deputy executive officer of the Development Bank of the Philippines, P12.7 million; Bangko Sentral Governor Amando Tetangco Jr., P10.8 million; and DBP executive vice president Benedicto Ernesto Bitonio Jr., P9.3 million.

Others topping the list were executives of the Metropolitan Waterworks and Sewerage System (MWSS), Social Security System and Land Bank of the Philippines.

Declare earnings

Senate President Juan Ponce Enrile said senators were planning to adopt a resolution to compel the GOCCs to justify their expenditures and declare all their earnings so that they could be used for the good of the entire country and not just their board and workforce.

“The board of directors of these GOCCs control their own money which is outside the scrutiny of Congress, which ought to handle the raising of money and budgeting of funds according to the request of the President,” Enrile said Tuesday at a meeting of the Senate committee on finance.

Enrile also pushed for the abolition of GOCCs that were a financial burden to the government.

House resolution on inquiry

In the House of Representatives, Cavite Rep. Elpidio Barzaga Jr. filed Tuesday House Resolution No. 178 calling for an inquiry, saying that the financial performance of GOCCs did not warrant the grant of “excessive emoluments.”

Majority Leader Neptali M. Gonzales II filed House Resolution No. 179 seeking a congressional review of the pay scales and other emoluments of government executives.

In his resolution, Gonzales, representative of Mandaluyong City, urged the committees on good government and on government enterprises to investigate the “excessive salaries, allowances and other benefits” granted to top executives of GOCCs.

“Placed in the context of poverty, rising levels of hunger and destitution, the country’s burgeoning budget deficit, and the long struggle to hurdle the economic crisis gripping the country, the granting of excessive and scandalous salaries, allowances and benefits to officials of GOCCs is scandalous at the very least,” he said.

“This manifests an apparent insensitivity to, and a betrayal of public trust by officials who are mandated to be responsible fiduciary agents of the people,” Gonzales said.

Exacting transparency

Gonzales said that the joint committee “in whose shoulders lie the responsibility of being the keepers of public funds to exact transparency and accountability from all public officials” should undertake the inquiry as soon as possible.

After ascertaining the extent of benefits granted to GOCC executives and board officials, the joint committee should propose “legislative measures that will rationalize the salaries, allowances and benefits of all executives and board officials of GOCCs in keeping with the maxim of public office as a public trust, and the principles of transparency and accountability,” he said.

Barzaga, for his part, called on Congress to monitor these salaries and perks and review or amend the existing Salary Standardization Law.

He said the MWSS should also be covered by the inquiry.

Case-to-case basis

Although the rationale for the high salaries was to make them competitive with those of the private sector and prevent brain drain, Barzaga said that public service and the government’s financial capability should be the “foremost consideration.”

The charters of the GOCCs should curtail the practice of the grant of excessive allowances, bonuses and other benefits, he added.

Aurora Rep. Juan Edgardo Angara supported the inquiry even as he advocated putting a cap on the financial package earmarked yearly for all executives and board directors of GOCCs.

Angara said Congress could not just allow salaries and allowances shooting through the roof, but made it clear that the pay ceiling should be set on a case-by-case basis, depending on the revenues generated by a government corporation.

Denial, clarification

For his part, Arreza is denying reports that he is the highest paid government executive.

In a statement issued Tuesday, the SBMA administrator again said his monthly take-home pay was equivalent to only P95,449, from a gross monthly income of P130,888.77. In addition, he received a representation allowance of P8,700 a month.

Computed for the entire year, his total salary should come up to a little less than P1.68 million, including the monthly representation allowance.

He said the list that came out in the media, which showed him earning a salary of P26.9 million a year, or more than P2.24 million a month, included in the computation some SBMA operational funds that did not form part of his personal earnings from the government firm.

Intelligence fund

The SBMA operational funds that Arreza said were erroneously factored into the computation included the P15-million intelligence fund, which the Office of the President had to approve each year, and the P18 million to P19 million extraordinary and miscellaneous expenses item.

Arreza said the P15-million intelligence fund was split among the Presidential Anti-Smuggling Group based in the Subic Bay Freeport Zone (P10 million) and his and SBMA Chair Feliciano Salonga’s offices (P5 million).

The P2.5 million of the intelligence fund that was earmarked for his office, he said, went to the SBMA Law Enforcement Department and the Intelligence and Investigation Office.

“This setup has been in place since 2004. We have not added to this fund, and, in fact, the amount has remained the same until now,” he said.

Arreza said the extraordinary and miscellaneous expenses, which amounted to P18 million to P19 million last year, went to advertising and promotions, including sponsorships of big events in the free port, like the recent Philippine Advertising Congress.

Arreza said that since the SBMA was mandated to boost investments in the free port, it was necessary for the agency to spend on advertising and promotions.

Part of these extraordinary and miscellaneous expenses also went to aiding nearby communities during times of calamity, he added.

“My salary is the same as my predecessors’ rate. I have not added a single centavo to what they have been receiving since 2000—during the time of former SBMA chair and administrator Felicito Payumo. I have not made myself rich,” he said. With a report from Abigail L. Ho

By Gil C. Cabacungan Jr., Michael Lim Ubac
Philippine Daily Inquirer