Creative accounting

They call it creative accounting which just means that certain bonuses or payments to officers of the Development Bank of the Philippines (DBP) are hidden as discretionary or miscellaneous expenses. In the AFP, PNP and SSS, they are charged to intelligence funds, no receipts necessary.

Before Christmas day, DBP Chairman Patricia Sto. Tomas received a P10 million Christmas bonus while DBP members of the Board of Directors and principal officers received from P2 to P5 million each.

Since they are not recorded as bonus payments, no withholding tax was collected. The DBP officers who received may be held liable for technical malversation, falsification, tax evasion, anti-graft and violation of the ethical standard law.

To his credit, president Rey David tried to stop the bonus payments and did not get any himself but chairman Patricia Sto. Tomas insisted and even berated him for listening to objections of DBP rank and file employees, and for listening to this columnist. She also berated DBP employees for complaining about lack of salary increases since they are so blessed compared to salaries in DoLE where she used to be the secretary. DBP employees are angry that while no increases have been given to them, the chairman and directors received so much in bonuses and other monthly allowances.

The talk at DBP is that Sto. Tomas insisted on the huge bonus to buy a condominium.

At GSIS, the officers and directors gave themselves a Christmas bonus of P500,000 each. This is reasonable because GSIS recorded a record profit of P50 billion in 2008. DBP recorded huge loses including $80 million invested in Lehman Brothers investments. At the SSS, president Romulo Neri received P750,000 while commissioners got P450,000 each. At Pagcor, directors and officers got P100,000 each as Christmas gift while employees got P40,000 each.

This is grossly unfair to the thousands of government employees in other offices who are receiving low salaries and struggling to make both ends meet.

What is bad is the fact that the Commission on Audit and the Bangko Sentral ng Pilipinas have not acted to stop these excessive bonuses and allowances in government financial institutions which are violative of a Presidential Administrative Order.

I used to be a governor of DBP under then president Jesus Estanislao. During our time, no Christmas bonuses were paid to members of the board of governors.

In ordinary government offices, creative accounting takes the form of charging the expenses of the secretary or head of agency to the “Intelligence fund.” Ghost travels are also used to release funds. And this includes the Office of the President which has a P650 million intelligence fund, a P2 billion contingent and a P2 billion social fund from Pagcor.

Now you know why year after year, the government records a huge deficit under GMA, which is projected to reach P195 billion this year.–Amb. Ernesto Maceda, Daily Tribune