Thursday, June 28, 2007

How do you solve a problem like the Iloilo Airport?

As a member of the Regional Project Monitoring Committee (RPMC), I take pride in having participated in several problem solving sessions during the construction of the New Iloilo Airport (NIA). The litany of problems are quite enormous - from the relocation of affected families, quarry sources, and right of way, which unduly setback the construction timetable to revision of scope of work and unprecedented price escalation.

Touted as the most modern and sophisticated airport in the country outside of Metro Manila, the NIA is only 15 days in operation as of this post but the problem of maintaining the new edifice, other facilities and grounds of this 188 hectare complex seems insurmountable.

ATO estimates that the monthly cost of the airport's upkeep would run to Php 10 M. The electricity alone with the sophisticated equipment in operation would cost between Php 2.3 M to Php 2.7 M per month. ATO Iloilo's budget for 2007 does not yet include the additional requirement for the new airport. It's MOOE is at the level of the maintenance cost of the old airport in Mandurriao. To add to its woes, no new personnel has been added to its work force as the staffing pattern will depend on the approval of the agency's rationalization plan pursuant to EO 366.

Friday, June 22, 2007

Big boost . . , Part 2

This is a continuation of my post yesterday (June 21st) on the implementation of the 10% salary adjustment effective July 1st. Here we will clarify and amplify some of the salient provisions of NBC 511 and LBC 86.

Basis of computation - the 10% adjustment shall be based on the basic monthly salary of incumbents as of June 30, 2007, inclusive of transition allowance. No adjustment shall be made on PERA, AdCom and RATA. But the year-end bonus, RLIP, PAG-IBIG, PHILHEALTH, and ECIP shall be correspondingly adjusted. Those receiving transition allowance, meaning that their basic salaries have exceeded the salary pertaining to the 8th step of the salary grade allocation of their position, are no longer entitled to the 10% adjustment but they will be allowed to receive such excess.

Funding source - the amount needed to implement the 10% adjustment of NG civilian personnel including the increase in subsistence and hazard pay of uniformed personnel shall be charged against the appropriate funds (Miscellaneous Personnel Benefits Fund/Compensation Adjustment Fund). The requirement for adjustment of non-permanent employees shall be taken from the lump-sum appropriation for salaries/wages of concerned NGAs. GOOCs, GFIs and LGUs shall defray the cost of implementing the salary adjustment out of their respective funds. If funds are insufficient, these entities may partially implement the said adjustment provided these shall be uniform and proportionate for all their personnel.

Specific for LGUs:

Adoption of Salary Schedule - in implementing EO 611, LGUs shall adopt the Salary Schedule (SS) prescribed under LBC 86 (Annexes "A1" to "A8") corresponding to their economic classification. Pursuant to RA 6758 (the original SSL), the salary levels of LGU personnel are pegged to a certain percentage of the national salary schedule depending on the income class of the LGU as categorized by the DOF/BLGF. Thus, the salary schedule of a first class province or city is equivalent to that of NGAs, while a second class one is 90% of the national SS. The SS of a 6th class municipality is only 65% of the national SS.
However, an earlier DBM issuance has given LGUs the flexibility to adopt the SS of their mother LGU, which means that a 5th class municipality can adopt the SS of its mother province provided it has the funds and has not exceeded the personal services limitation (45%-55%) prescribed under Section 325 of the 1991 Local Government Code.

Adopting a higher Salary Schedule - LGUs which have implemented the salary schedule of a higher income class LGU (i.e. the SS of a mother province), can adopt the revised SS pertaining to that of the higher income LGU. If funds are nor enough, the said LGU may opt to revert to the SS of its own income class.

PS cap waiver - the PS cost to implement the adjustment if the LGU is implementing the SS corresponding to its income class is exempt (or waived?) from the personal services limitation. However, the PS differential as a result of the adoption of the higher SS is subject to the said limitation.

Applicability to Barangays - the honoraria of barangay officials and employees maybe adjusted accordingly by adopting the new SS being implemented by the mother city or municipality. Under LBC 63 circa 1996, the maximum honoraria of Punong Barangays were pegged at the 1st step of Salary Grade 14 in the SS of the mother city or municipality, while that of the Sangguniang Barangay members, Treasurer and Secretary at the 1st step of Salary Grade 10. The said adjustment is exempt from the PS cap (55% limitation) prescribed under Section 331(b) of the 1991 Local Government Code. This exemption is still subject to clarification as this seems to contradict with Section 85, General Provisions of the 2007 General Appropriations Act, which provides that only the minimum honoraria (Php 1,000 for the Punong Barangay and Php 600 for the other officials) are waived from the PS cap.

Thursday, June 21, 2007

A big boost to the morale of government personnel!

Looks like the long awaited salary adjustment will become a reality comes July 1st. The DBM has issued last June 18th, two (2) circulars to implement Executive Order No. 611, authorizing the grant of ten percent (10%) salary adjustment to government personnel as well as the adjustment in subsistence allowance and hazard pay of uniformed personnel.

Here's the gist of the two implementing circulars:

National Budget Circular No. 511 - applicable to National Government Personnel and covers the following compensation adjustment:

- 10% Salary Adjustment for Civilian Government Personnel whether permanent, contractual, casual, appointive or elective, on full-time or part-time basis. The adjustment shall be computed at 10% (rounded off) based on the incumbent personnel's basic pay as of June 30, 2007. To facilitate computation, the DBM has prescribed a new salary schedule. Those covered are personnel of National Government Agencies (NGAs), Government-owned and Controlled Corporations (GOCCs), and Government Financial Institutions (GFIs). For NGAs, the funding requirement shall be sourced from the 2007 General Appropriations Act, and the initial release shall cover the period July to September. For GOOCs and GFIs, the amount needed shall come from their own respective corporate funds.

- Subsistence Allowance and Hazard pay of military and uniformed personnel of the AFP, PNP, BFP, BJMP, Coast Guard, and NAMRIA. For subsistence allowance, the adjustment shall be from Php 60 to Php 90 per day while hazard pay will be increased from Php 120 to Php 240 per month.

Local Budget Circular No. 86 - Applicable to personnel of local government units including local elective officials. The DBM has prescribed separate salary schedules for each economic class of LGUs and the adjustment of each incumbent personnel shall correspond to the designated salary step in the salary grade allocation of their position as of June 20, 2007.

The last time that government personnel had their salary increase was five years ago in July 2001, and the this adjustment comes next month will certainly be a big boost to their already sagging morale.

Friday, June 01, 2007

1st Quarter GDP strongest ever in 17 years!

The President while on state visit in Australia Thursday revealed that our Gross Domestic Product (GDP) grew by an unprecedented 6.9% for the first quarter of 2007.

This level of growth was the strongest in over 17 years. The biggest quarterly economic growth we had experienced before was in 1989 when GDP was recorded at 7.4%. This reported economic figure puts the Philippines as the third best performer in Asia behind China (11.1%)and Vietnam (7.7%). What attribute to this remarkable growth performance? Economic officials cited the following: sustained gains in the country's fiscal position where we incurred a lower-than-targeted deficit in 2006 (from Php125 B to Php 64 B) - leading to a resurgence of investors confidence; more foreign direct investments (FDIs) pushing the stock market to a 80-year high; low inflation; strong peso as a result of FDIs, increased OFW remittances, and business process outsourcing (BPO) revenues; brisk exports despite the strong peso. Of course, not to be overlooked is increased consumer spending due to OFW remittances and election spending.

Barring all other unforeseen negative factors it seems that the 6.1%-6.7% full year GDP target for 2007 is unreachable.