MANILA, Philippines—The P302.8 million in bonuses the Philippine Charity Sweepstakes Office (PCSO) allegedly gave its employees in 2011 went to pay their “unpaid taxes and other benefits,” PCSO chairperson Margarita Juico said on Monday.
Juico denied the Inquirer story on Monday that quoted a Commission on Audit (COA) report released in December as stating the PCSO used its employees retirement fund to “grant (them) excessive benefits and allowances” in 2011.
The COA report said “the 2011 grant of grocery and Christmas assistance, as well as rice and (lotto) draw allowances and medicines in the total amount of P302,795,557.71” had violated COA Circular No. 85-55-A.
Juico said the appropriations were not bonuses, but were used to pay “unpaid” taxes and other benefits of PCSO employees.
“Since 2007, the PCSO has not (been) paying taxes—including VAT and e-VAT—on the employees’ benefits. We incurred billions of debt on taxes alone,” Juico said, adding that “if the taxes and the other benefits were subtracted (from their pay), the employees (would) have nothing to earn anymore.”
Juico, who took office in 2010, said that during her first year at the PCSO, almost P1.9 billion was paid for taxes, including for documentary stamps.
She said the request to use the employees’ provident fund for their unpaid taxes had come from PCSO union president Christopher Bautista, who expressed the union’s concern to PCSO director Aleta Tolentino, a member of the Committee on Financial Audit.
In a statement to the Inquirer, Bautista said the employee benefits in question were “not excessive nor irregular because they have been given to PCSO employees since 1995.”
The statement added the amount had not been increased during Juico’s term “in compliance with Executive Order No. 7 prohibiting an increase (in) benefits.”
According to the PCSO union’s statement, “proper authority for the allowances has always been obtained. Since the time of President Fidel V. Ramos, PCSO employee benefits have always been approved by the Palace post facto.”
Although the COA has said that the PCSO should “discontinue using the PCSO Provident Fund” in granting benefits to its employees because (the fund is intended) for the employees’ retirement, the union said that it had replied to the COA Audit Observation Memorandum on the matter, saying that the Provident Fund provides not only retirement benefits but also makes available “financial assistance to meet (the) immediate needs (of employees) in times of financial difficulty.”
In the union statement, Bautista said the release of employee incentives such as grocery and Christmas bonuses through the Provident Fund “is in consonance with the Collective Negotiations Agreement registered with the Civil Service Commission (CSC).”
The statement also clarified that using the PCSO’s Charity Fund for the employees’ health benefits was in accordance with a law mandating that companies provide health benefits to their employees.
The union statement said that in 1998, the PCSO under Justice Cecilia Muñoz-Palma created a PCSO employees’ health and medical assistance program, with expenses charged to the agency’s Charity Fund as allowed under EO 180.
“We are not taking away anything from our beneficiaries,” said Bautista in the statement. “The amount allotted for charity is being given to (PCSO beneficiaries) and (is) increasing each year. Meanwhile, all employee allowances are aboveboard.”