Palace sets control of workers’ money

MANILA — President  Benigno Aquino III has notified Congress that starting Jan. 1, 2014, the Palace will put almost P700 billion in salaries of 1.2 million state workers under a centralized payroll system, even for co-equal and fiscally autonomous branches like the House, the Senate and the Supreme Court.

The President, in his budget message to lawmakers, said the administration would set up a single bank account from which the salaries would be released to all state workers and employees, including those in local government units and state universities and colleges.

The new scheme triggered protests from the agencies and one lawmaker, who said employees would be deprived of their year-end bonuses coming from savings from their respective budgets.

Navotas Rep. Toby Tiangco, secretary general of the opposition United Nationalist Alliance, said the Palace plan to control the payroll would undermine the principle of checks and balances in government.

“That cannot be. What does the Palace want? Are they sending the message across: ‘Do not bite the hands that feed you’?” Tiangco said.

In the last three years, 3,943 House employees have received P50,000 each annually through a “Speaker’s bonus,” while 2,174 Senate employees were given up to P120,000 each by the Senate President at the end of the year.

But in the 2014 national budget, the President has set a “cash year-end bonus” of P5,000 for all agencies, including constitutional bodies that are supposed to enjoy fiscal autonomy.

The new budget also carries special provisions that all savings must revert to the National Treasury and that the heads of agencies must first seek the Budget Department’s and the President’s approval before they can realign funds to other projects or allocations, such as bonuses.

“In 2014, we will start the implementation of another important reform: the Treasury Single Account, which will inject more transparency and predictability in treasury cash management,” the President said in the message that accompanied the proposed P2.268-trillion national budget for 2014.

“With this reform, some 9,500 agency bank accounts will be consolidated into a highly manageable number by 2014. This provides government with clear visibility on the bank balances of agencies on a daily basis. Ultimately, this will lead to savings of about P1.5 billion to P3 billion from interest costs on borrowings,” the President said.

“We start next year the implementation of the digitization process of the operations of the government. For example we start next year the process of what is called the national payroll system where the salaries of our government people will no longer be coming from their respective agencies but will be released from the Treasury all the way to their bank accounts,” Budget Secretary Florencio Abad told a news conference during the budget turnover.

On top of the P689.4-billion payroll, which used to fall under the Personnel Services, Abad said the government would also take care of the remittances of the Bureau of Internal Revenue withholding taxes as well as GSIS premiums that will come direct from the Treasury.

“So, we avoid a lot of the paperwork as well as delays. We are introducing the Treasury single account system, where the government will practically have a single bank account and so the government will be able to determine how much money it has at the end of the day and how much money it has to borrow,” Abad said.

Abad said some P720 million was set aside to set up and implement the major information and communication technology projects for public financial management, including the integrated Public Financial Management System and the National Payroll System.

But a House employee who has been in government service for more than 20 years called the plan “digitized and centralized corruption.”

“With P689.4 billion in a single account, a single delay in releasing the payroll would mean millions in interest,” said the employee, who asked not to be named for fear of reprisals from the Palace.

“If the House experiences two or up to three days delay on payday when we are just fewer than 4,000 employees, what’s the guarantee is there that the Palace can do better when it has more than a million employees to send the money to?” the source added.

“So if the single bank goes offline, the government should expect very angry state workers all at once,” she said.

“If the government wants to earn or save money, it should purge its ranks of incompetent employees who got the job because of padrino system at the expense of career-service eligible employees. It is demoralizing. The President wants the workers to be happy, then he should show us respect and stop insulting us by experimenting on us because a lot of experiments have already been done and failed,” she said.