House panel OKs Salary Standardization Law

MANILA – The House of Representatives Appropriations Committee approved in just one hearing the proposed Salary Standardization Law (SSL) of 2015 amid a scuffle involving government employees and a tense exchange between Budget Secretary Butch Abad and Alliance of Concerned Teachers (ACT) party-list Rep. Antonio Tinio.

Joy Martinez, a public school teacher from Malabon and an official of ACT-National Capital Region, led some of her colleagues in protesting the wage increase, which they felt was too small compared to the increase in the salaries of higher-ranking officials of government.

During the hearing of the panel, the group said they prefer an increase in salaries instead of higher benefits. The group chanted and raised paper placards calling for a higher salary increase.

They were escorted out by House security.

Earlier in the hearing, Tinio and Abad had a tense exchange over the matter of the salary hike contained in the proposed SSL of 2015.

Tinio took up the cudgels for the teachers and other employees and insisted that higher salaries, instead of higher benefits, would be better.

Abad had insisted that, currently, government workers are paid 45 percent below the market rates though the lower salary grades 1-10 are paid close to prevailing market levels while the salaries of the higher ranked officials differ vastly from their private-sector counterparts.

Abad maintained that 89 percent of the salary increase package worth P226 billion will go to the lower-ranking workers.

Tinio had pointed out that the actual basic salary of government workers will rise only by 11.89 percent.

“‘Yung figure na pinapalaganap sa media is not true, ‘yung mababang percentage increase, they [those covered] make up two-thirds of the bureaucracy,” he said.

Abad said, “I don’t think the presentation is complete. The 11.89 percent is only the salary increase…huwag natin sabihing 11.89 percent because you’re also going to get mid-year [bonus] and performance-based bonus (PBB). Let’s be factual about it.”

Tinio answered, “Mawalang galang na po. This is not wrong, this is factually correct. Sinasabi natin salary increases, we’re talking about salary, actual na increase sa basic pay.”

Abad then replied, “Since they are exempted from taxes, the take- home pay includes 14th month and PBB, ang iuuwi nila ‘di lang 11.89 percent kung ‘di 30 percent.”

Tinio, however, explained that increases in the basic salaries affect retirement benefits since retirement is based on the salary, not the bonuses.

In a subsequent ambush interview, Abad explained, “Mukhang hindi naman talaga sila sinasabihan sa ano talaga magiging epekto nung SSL of 2015, kasi katulad ng pinakaita kanina ni Congressman Tinio, alam lang nila salary increase, which is about 12 percent, pero sa totoo lang, the package isn’t limited to salary increase, which is 12 percent on top of the salary increase, may 14th month pay, which will add 8 percent, which will make it 20 percent. Dagdag pa diyan ang performance-based bonus which is another 10 percent. So ang kabuuang increase na tatanggapin ng mga guro ay 30 percent, hindi 12 percent.”

Abad added they considered that employees would rather have a larger take-home pay, one they won’t get if they increase salaries without the benefits.

Asked if the salary hike will be more meaningful with lower income tax rates, Abad said, “‘Yan ang kailangan pag-aralan, but definitely what we can say is for the lower salary grades, the additional benefits will be fully 100 percent tax-exempt. Hindi na saklaw ‘yan ng mandate kasi Joint Resolution 4 tells us to review the competitiveness of government pay in relation to the private sector and on that basis, put together a strategy to bring government pay closer to the market. ‘Yun lang ang aming mandate, ‘di na kasama sa amin ‘yung income tax.”

Abad explained though that the law raising to P82,000 the tax exemption for bonuses would mean that the 13th month, 14th month and the performance-based bonus would be tax-free and would thus become part of the take-home pay. This is why SSL 2015, according to Abad, raises government workers’ pay by about 45 percent on average.

Likewise, Abad appeared to justify the increase in the salaries of the President and other higher ranking officials.

“The salary of the President is P120,000 and the President doesn’t get anything else. In the private sector, what’s the equivalent of P120,000? P120,000 pays for the salaries of an operations manager of a consumer or manufacturing company or IT manager of BPO or project manager of tech company. We have raised the salary, which will bring it up to P388,000. That’s about it. No 14th month pay, no PBB. In the private sector, who gets P388,000?” said Abad.

According to the Department of Budget and Management (DBM), in the private sector, the positions of Teacher I to III are paid P13,135. The government pays P19,218 for Teacher I position, or 146 percent of the market. For Teacher II positions, the government pays P20,660 or 157 percent of the market. For Teacher III positions, the government pays P22,209 or 169 percent of the market.

Abad said SSL 2015 will increase Teacher I salary to P20,754; Teacher II to P22,938; and Teacher III to P25,232. This will make their monthly pay two times more than their private sector counterparts.

“Under SSL 2015, the total annual guaranteed compensation of Teacher I will be P329,556, up from the current P280,137. Teacher II will get P360,132 from the current P298,220, while Teacher III will receive P392,248 from the current P317,668. This annual guaranteed compensation does not include the PBB, which is contingent on performance and is equivalent to 1.25 month’s salary for SG 11-24. As Teacher I-III is ranked as SG 11-13, that is an additional 1.25 month’s pay for Teacher I to III positions,” Abad said.

Meanwhile, the budget chief pointed out that private sector nurses receive pay ranging from P13,033 (Nurse I), P14,083 (Nurse II), to P22,125 (Nurse III). Their government counterparts receive higher salaries with P19,218, P25,878, and P35,207 respectively. Under the SSL 2015, the total guaranteed compensation of Nurse I will go up to P344,074, while Nurse II will receive P485,670 and Nurse III will get P710,804.

The number of unfilled positions in government is 191,988 or 12.53 percent of total authorized positions. The proposed compensation plan is composed of across the board salary increase plus a mid-year bonus equivalent to one month basic salary and the new PBB as an added bonus contingent on performance. The mid-year bonus, in addition to the present year-end bonus or 13th month pay, will account for an 8 percent increase in annual salary. The PBB is equivalent to 1 to 2 months basic salary or an 8 to 16 percent increase depending on the position.

DBM announced plans on Wednesday for a new round of compensation adjustments that would raise the basic salaries and benefits of the 1.3 million government workers by up to 45 percent. The proposed pay hike shall be implemented in four tranches over four years starting January 2016 and, upon full implementation, will bring the compensation of all government workers to at least 70 percent of the market rate.

Implementing the SSL of 2015 will cost around P225.8 billion in four years. For the first tranche, the amount of P58 billion is included in the proposed 2016 budget.

Of the total cost of P225.8 billion, only 3.9 percent will go to government executives or those in salary grades 29 to 33. Sub-professionals will get 4.28 percent; professionals 60.4 percent; middle managers 8.26 percent; and military and uniformed Personnel 23.16 percent.

Abad stressed that considering the tax exemption provided under the law for gross benefits not exceeding P82,000, the full mid-year bonus and the full PBB shall, in effect, be tax-exempt for salary grades 1 to 11. And the mid-year bonus will be tax-exempt for salary grades 12 to 16. This will make for higher take-home pay for the majority of government personnel.

President Aquino will not benefit from the increase.

Abad said the plan is to implement the SSL 2015 effective January 1, 2016. However, the Constitution provides that incumbent senators and members of Congress approving compensation increases, as well as the President and Vice-President, shall not benefit from the proposed compensation adjustment. The implementation of the proposed compensation adjustment with respect to these officials, including the regular members of the Cabinet, shall be effective July 1, 2016. -RG Cruz, ABS-CBN News