Ex-DBM chief Abad: Gov’t pay hike for 2019 can be implemented despite reenacted budget

Former Budget Secretary Florencio Abad. INQUIRER file photo

MANILA, Philippines–For former Budget Secretary Florencio Abad, the scheduled fourth tranche of salary hike supposed to be enjoyed by civilian government workers at the start of the year can be implemented even with a reenacted budget in place after Congress failed to pass the proposed P3.757-trillion 2019 national budget.

It was under Abad’s watch at the Department of Budget and Management (DBM) when then President Benigno Aquino III issued Executive Order (EO) No. 201, which provided for salary increases to civilian government employees yearly between 2016 and 2019.

With a reenacted budget, Budget Secretary Benjamin Diokno had said they cannot implement yet the scheduled pay increase for 2019, citing Section 11 of EO 201, which stated that the annual wage hikes were “subject to appropriations by Congress.”

In a text message to the Inquirer last Tuesday, Abad noted that “under regular circumstances (when the budget is approved on time), the source of the funding for the increase is the budget that is enacted on the year the increase is authorized.”

“The current situation is different there being no new budget enacted yet. So the question then is where will you source the pay increase? Since our Constitution provides for the automatic reenactment of the previous budget, then a source can be the reenacted GAA [General Appropriations Act] of 2018, which has an item called the Miscellaneous Personal Benefit Fund (MPBF),” Abad told the Inquirer.

“By its nature, the MPBF is used to fund authorized personnel and benefit items in the budget, like increases in pay. The key word there is ‘authorized.’ So where is the authority for release and payment of the pay increases? It is EO 201, which was issued by President Benigno Aquino III on Feb. 19, 2016,” Abad explained.

“Section 11 of said EO provides that the implementation of said adjustment in pay is ‘subject to appropriation by Congress.’ In this instance, the non-enactment of the 2019 GAA does not prevent the grant of the increase as the appropriation is provided by the reenactment of the 2018 GAA. Section 15 also of the said EO authorizes the DBM to ‘implement or adjust the compensation corresponding to the appropriation provided in the GAA’ (in this instance the reenacted 2018 GAA),” Abad added.

“What is the legal basis of EO 201, which is a mere executive issuance? The basis is the Joint Resolution (JR) of Congress issued in 2009,” according to Abad.

Diokno nonetheless earlier said that the MPBF allocated under the 2018 budget cannot supposedly be utilized to fund the wage adjustments, as that allocation could only cover salaries last year.

But Abad said that if that was the case, then the same rules should have applied in the reenacted items of the 2018 GAA, such as miscellaneous and other operating expenses (MOOE) as well as capital outlays (CO).

In the case of the 2018 MOOE and CO allocations, Diokno had said their validity had been extended by the Congress Joint Resolution No. 3, series of 2018.

But for Abad, “since the 2018 GAA has been reenacted, the portion of the MPBF allocated for 2018 salaries has also been reenacted together with other items in the MPBF.”

As such, Abad said the MPBF can fund the salary increase while the 2019 budget was yet to be approved.

“The next question that may be asked is: The 2019 salaries are much bigger than the 2018 salaries, how can the 2018 allocation in the reenacted GAA cover the pay requirements for 2019? We are not talking about the requirements for the whole year. What is needed is just for the period when there is as of yet no GAA. I think Congress is committed to passing the budget within the first quarter, or we’re really talking of just a partial reenactment. In which case, there is ample funding in the reenacted 2018 GAA to support the initial requirements of the increase,” Abad said. /jpv

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