Still on the National government's debt to GSIS.

This is an addendum to my post yesterday regarding the debt that the DepEd owes the GSIS representing arrears in premium on the insurance coverage of teachers and other personnel.

Practically, the entire bureaucracy including LGUs have incurred prior years' obligation with the GSIS since 1997. How did these obligations came about? In the case of national government agencies (I'll make a post on the case of LGUs later)- that "utang" was attributed to the 2.5% increase in the national government share in the premium rate from 9.5% to 12.5% starting July 1997 to December 1998. The premium deficiency was not paid because the appropriations in the GAA during the said period for the Retirement and Life Insurance Premium (RLIP) of state employees were computed at the rate of 9.5% only.

The reconciliation as to the actual amount of deficiency went on for several years. When the figures were finally established, the mode of settlement became another issue. The first option was for the DOF to issue a fixed rate treasury bond in favor of the GSIS. A MOA to that effect was executed between the DOF and DBM representing the national government, and the GSIS. For undisclosed reasons, the settlement did not push through. The second option which also did not materialize was for the national government to turn over to the GSIS a governmnent-owned property in exchange for the writing off of the debt. On the third settlement attempt, Congress agreed to appropriate the amount of P3,299,791,000 as part of the supplemental appropriation for 2006 through RA 9358 (the national government then was operating on a reenacted budget).

Joint Memorandum Circular No. 2007-1 signed by GSIS President Winston Garcia and DBM Secretary Rolando Andaya, Jr., was issued to implement the said appropriation. In gist, the joint circular prescribes that:

1) The DBM shall release the appropriated amount of P3,299,791,000 to the GSIS as payment of the deficiency in government share on the premium contribution from July 1997 to December 1998. The GSIS shall apply said payment on the principal amount only, not on any interest that it has imposed thereon;

2) The DBM shall post in its website the amount of increase in RLIP per agency as computed by the GSIS;

3) The GSIS shall post to the individual account of the GSIS retirees and members the said payment. Any interest imposed by the GSIS shall not be charged against the retiree/member but shall be subject to separate discussion by the DBM and GSIS;

4) The GSIS shall pay the members the amount pertaining to the adjustment in retirement benefits and basic monthly pension as well as refund the full amount deducted from the active members whose matured policies and salary/policy loans were reduced.

The issue of the settlement of the RLIP deficiency (principal amount) should be put to rest, that is, if the GSIS has fully complied with its commitment as drawn in the joint circular. But the matter of the interest imposed by the GSIS that it insists should be paid by the national government, is left hanging as negotiation between the former and the DBM has not been finalized yet.

Since this is a government to government negotiation, why can't the GSIS condone the said interest charges? The HDMF (PagIBIG) has resorted to this time and again.

Thinking aloud, but disturb: the DepEd debt to GSIS.

The perenial problem on the unremitted GSIS premium contributions of DepEd has again resurfaced. Inquirer.net ran this story on this debt which already balloned per GSIS estimates, to P21.3 B. Said debt consisted of unpaid insurance premiums of P7.39 B and corresponding interest charges of P13.9 billion for the period July 1997 to December 2007.

DepEd has refuted the claim saying that the figures were incorrect. And so the impasse remains to the detriment of DepEd personnel most specially, the teachers who have consequently bore the brunt of deductions from their salary loans including those who have already retired, in which case, the proceeds of their retirement benefits have likewise been emasculated.

The story did not mention whether there was partial settlement of the disputed debt. But I supposed this was in part paid off (at least insofar as the unpaid premiums are concerned) by the P3.299 B which the DBM has remitted to the GSIS in 2007. As can be recalled, in year 2006, Congress appropriated through a supplemental budget (RA 9358), the said amount to cover the deficiency in premium contributions (principal only) from July 1991 to December 1998. The penalties (interests and surcharges) will be settled separately between the DBM and the GSIS.

Update on EO 366

As of June, 2009 the DBM has approved the Rationalization Plans (RPs) of 54 agencies consisting of seven (7) department-level entities; 18 attached agencies; 15 executive offices; and 14 GOCCs. The seven (7) departments with approved RPs are CSC (among the first to implement in 2006), Office of the President, Office of the Vice President, DOLE, DOST DOT, and DBM (RP approved on May 8th).

The RPs of eight (8) departments with complete submission namely: DAR, DepEd, DOH, DND, DPWH, DTI, NEDA, OPS - are still under evaluation. In addition six (6) other departments: DA, DENR, DOF, DOJ, DILG and DOTC have partially submitted their respective RPs. DFA, DOE and DSWD are not required to submit their RPs as these departments have already implemented their own rationalization programs prior to EO 366.

The long-awaited SSL3 - NOW NA!

The President, before leaving for an official visit to Japan on June 17th, signed two (2) very important issuances: Joint Resolution No. 4 and Executive Order No. 811. Both issuances dwell on the same subject matter - the Modified Compensation and Position Classification System commonly referred to as SSL 3.

Joint Resolution No. 4 is the the duly enacted harmonized version (after having gone through the Congressional bicameral conference committee) of Joint Resolution No. 36 of the House of Representatives and Joint Resolution No. 26 of the Senate. EO No. 811, on the other hand, implements the first tranche of the rounds of salary increases authorized under JR No. 4.

Four-gives starting July 1st for NG personnel. This means national government personnel are already assured of the first tranche of their pay hike starting July 1st this year. EO 811 has prescribed a salary schedule for this. The salary differential is computed: adjusted salary rate in the modified salary schedule (same grade, same step) minus salary rate as of June 30, 2009 divided by 4.

Why January 1, 2010 for LGU personnel? The sponsorship speech of Senator Angara on the Senate version of the joint resolution revealed that local officials themselves lobbied before Congress for the deferment of the implementation of SSL 3 to January 1st of 2010.

The details of how EO 811 will be implemented shall be spelled out by the DBM in the corresponding budget circulars.

SSL 3 in the offing.

Congress has finally completed the finishing touches on the Modified Compensation and Position Classification System or SSL 3, shortly before its scheduled recess on June 5th.

The salary standardization measure officially known as Joint Resolution No. 36, was passed by the House of Representatives on May 21st. The same measure was passed by the Senate on May 28th with a few but significant revisions. After which the bicameral conference committee met to harmonize both versions of the Joint Resolution. The bicameral conference committee report by June 3rd.

Here are some of the most important features of the Joint Resolution:

Title - "JOINT RESOLUTION AUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO MODIFY THE COMPENSATION AND POSITION CLASSIFICATION SYSTEM IN THE GOVERNMENT AND TO IMPLEMENT THE SAME INITIALLY EFFECTIVE JULY 1, 2009, AND FOR OTHER PURPOSES". The word "AUTHORIZING" was inserted in lieu of "URGING" as originally proposed, the reason being that the power to prescribed a standardized compensation scheme is vested with Congress but is being delegated to the President.

Salary Schedule - The 33 salary grade system is maintained with the same eight (8) steps per salary grade (SG-1 is just the same, allocated to Utility Worker 1 and SG-33 being assigned to the President). From the original proposal of P8,000 monthly minimum rate, JR 36 increases said minimum rate to P9,000 per month.

Effectivity - For the national government, GOCCs and GFIs, the salary increase takes effect July 1, 2009. For LGUs, the effectivity is moved to January 1, 2010. This is surprisingly different from the DBM proposal as contained in the draft joint resolution which is July 1st.

Mode of Implementation - For the national government, the implementation of the salary difference (present rate of the incumbent vis-a-vis the adjusted rate in the same step and salary grade in the revised salary schedule) shall be spread equally in four (4) years. In the case of GOCCs, GFIs and LGUs, the same computation of salary differential shall be applied except that the implementation period shall be dependent on their finances but should at least be carried out in four (4) years. This means that GOCC, GFI and LGU personnel would be able to receive in full their salary increase beyond the four- year period as their finances warrant and that the salary differentials may vary from year to year.

Total Compensation Framework - The joint resolution classifies the compensation received by government personnel into four (4) categories namely: Basic Pay including Step Increments, Standard Allowances and Benefits, Specific-Purpose Allowances and Benefits and Incentives.

No diminution in pay - The joint resolution guarantees that there will be no diminution in benefits being received and those yet to be received by government personnel. Some benefits however, such as hazard pay, need to be rationalized.

Reinvention of some benefits - The step increment due to meritorious performance shall be revived but the Productivity Incentive Bonus (PIB) will be done away with. In the same manner, the "Extra Cash Gift" or "Performance Bonus" shall be replaced by "performance Enhancement Incentive". The CNA incentive is retained but this will no longer be charged against savings. As introduced by Sen. Mar Roxas, the funds needed to pay CNA Incentive shall be provided for in the yearly budget.

Bad news for LGUs - As initiated in the House of Representatives and concurred by the Senate, the salaries of LGU personnel shall be determined by their respective Sanggunians, and if their finances warrant, salary or wage increase may be granted subject to the personal services limitation prescribed in the 1991 Local Government Code.

UBOM 2008 Edition Roll-out

The Department of Budget and Management Regional Office VI in coordination with the Association of Local Budget Officers (ALBO VI) is conducting a series of Seminar-Workshop on the roll-out of the Updated Budget Operations Manual (UBOM) for LGUs.

The seminar-workshop is being conducted for municipalities by province. A similar training will be conducted separately for provinces and cities combined. Invited to participate are members of the Local Finance Committee (LFC), Accountants, Sanggunian members and department heads. Schedule of the seminar-workshop are as follows:

- Iloilo municipalities -- May 6-8
- Negros Occ. municipalities -- May 12-14
- Aklan and Capiz municipalities -- May 19-21
- Antique and Guimaras municipalities -- May 26-28
- Provinces and cities -- June 3-5

Invited participants may coordinate with the DBM Regional Office VI or the Provincial Budget Office, Province of Iloilo for further information.

Reflections for the Lenten season.

The Lenten season marks a forty day period. It begins on Ash Wednesday and ends on Good Friday for Protestants while Catholics end the season on the Thursday before Easter.

Lent is the season of fasting, self-denial, Christian growth, penitence, conversion, and simplicity. Lent, which comes from the Teutonic (Germanic) word for springtime, can be viewed as a spiritual spring cleaning: a time for taking spiritual inventory and then cleaning out those things which hinder our corporate and personal relationships with Jesus Christ and our service to him.

eHow.com has come up with a few suggestions that Christians like us can do to observe the lenten season. Just click this link.