The waiting is over: DBM to pay deficiency in GSIS premiums.

The bureaucratic volleyball between the DBM and GSIS on how to resolve the issue of unremitted government share in premium of national government employees from July 1997 to December 1998 may be over.

To recall, the national government owed the GSIS a sizeable amount corresponding to the deficiency in the government share on the premiums contributions of national government employees from July 1997 to December 1998. Such deficiency was due to the increase in contributions from 9.5% to 12% as mandated in the GSIS Act. After a series of reconciliation, the deficiency was finally established and negotiations between the two agencies went on for quite sometime.

The first option to settle the obligation was for the Bureau of the Treasury to issue a fixed rate treasury bond redeemable over a period of six years. Despite the MOA executed between the GSIS, DOF and DBM during Isidro Camacho's stint with the DOF, the agreed settlement never pushed through. The second option was the "debt-to-equity" swap in which national government-owned land be turned over to the GSIS as payment of the "utang". But this never materialize as well. The third and more practical option was for GSIS to request for an appropriation cover equivalent to the reconciled unpaid premiums.

Finally, in October last year, Congress passed a supplemental appropriations (RA 9358) setting aside among others, the amount of Php 3,299,791,000 to cover payment of said deficiencies. Last month this year, the DBM and the GSIS issued Joint Memorandum Circular No. 2007-1 implementing the said supplemental appropriation.

The joint circular prescribes that the DBM shall release to GSIS the appropriated amount and post in its website the amount to be paid broken down by agency or office.

Here are the other salient provisions of the joint circular:

- the amount paid the GSIS shall cover only the principal; the interest due thereon shall be resolved separately by the DBM and GSIS;
- NGA personnel who already availed of retirement benefits from the time GSIS began deducting increase premiums shalll be entitled to corresponding benefits;
- deductions made by GSIS and applied as payment of premium deficiency shall be refunded to the employees.