Executives of Pag-IBIG Fund have clarified the pay raise for its officers and employees was not an increase in salary rates, which require approval from Malacañang—but merely salary step increments to address years of inflation, in accordance with Pag-IBIG’s Compensation Plan.
This, in response to the observation issued by the Commission on Audit on the general increase implemented by the Fund last year.
COA has called the attention of Pag-IBIG’s Home Development Mutual Fund for P248 million in employees’ wage hike without a presidential approval.
In a 2018 annual audit report, the agency challenged HDMF’s pay increases amounting to P248.319 million, saying the hike was illegal.
State auditors told HDMF to stop the grant of the salary increases.
COA said the wage increase represented a 21.67-percent hike against the wages of Pag-IBIG personnel in 2017, a violation of the protocol in the grant of added compensation.
“The implementation of the general increase in salaries for the officers and employees in the absence of approval from the Office of the President constitutes illegal disbursements,” it noted.
The commission cited the late President Ferdinand Marcos’ Presidential Decree 1597, a COA circular, and a Department of Budget and Management rule to justify that the salary increases for the workers without the President’s approval was considered as an illegal expenditure.
The COA said the institution’s board approved a P255.527 supplemental budget to cover salaries and wages, year-end bonuses, 13th-month pay, and contributions to the Government Service Insurance System, PhilHealth and Employees’ Provident Program for 3,561 employees and officials, excluding presidential appointees.
Secretary Eduardo del Rosario, Chairman of the Housing and Urban Development Coordinating Council and of Pag-IBIG Fund’s Board of Trustees, said that they did not increase the salary rates of officers and employees in 2018 but merely granted salary step increments similar to those implemented by government agencies covered by the Salary Standardization Law.
He added while step increments among employees of other agencies are granted automatically every three years on the basis of longevity of service, the step increments granted to Pag-IBIG employees were intended to address the effects of inflation over the years.
The grant of such step increments is within the powers of its Board based on Pag-IBIG’s Compensation Plan. Since there was no increase in salary rates nor new benefits granted, Presidential approval is not required.
Del Rosario said: “I want to assure the public that the grant of step increments in 2018 was proper, done according to the right process and, most importantly, was not excessive.
“We have only adjusted the salaries of Pag-IBIG Fund officers and employees to be, more or less, on the same level of SSL4, which is currently being received by employees of other government institutions. We would like to assure all, our members in particular, that we continue to adhere to the directive of President Rodrigo Roa Duterte in safeguarding the workers’ fund.”
He added the Fund also adjusted the salary rates of all covered contractors and job order personnel to be comparable with positions in government and granted them a premium rate of 20 percent, in compliance with the Joint Circular 1 issued in November 2018 by COA, the Civil Service Commission, and the Department of Budget and Management. In complying with the circular, the Pag-IBIG Fund Board agreed with the rationale of the three agencies calling for equal pay among permanent employees and job order personnel in government, pegged at the prevailing rates of the fourth tranche of the SSL4.
Del Rosario stated that the Pag-IBIG Fund Board had the same intention in granting the step increments to employees and officers of Pag-IBIG Fund last year, even while the step increments applied to the salaries of a majority of its employees still resulted to a lower rate than the prevailing rates of the third tranche of the SSL4.
Pag-IBIG Fund CEO Acmad Rizaldy Moti also clarified that the agency’s Board went through all the requisite processes and ensured that all conditions were met prior to the granting of the step increments.
“The Board considered all bases when the step increments were granted in 2018. The intention behind the grant of step increments under the Compensation Plan of Pag-IBIG Fund was not to raise the salaries of officers and employees—but rather to maintain the purchasing power and value that they had in 2009 or 10 years ago when the Fund’s Compensation Plan was first adopted,” Moti said.