Salary hike for Pag-IBIG Fund employees illegal, unauthorized — COA

MANILA, Philippines – Salary increases for employees of the Home Development Mutual Fund (HDMF) or Pag-IBIG Fund worth P248.3 million were implemented without authorization from the Office of the President (OP), the Commission on Audit (COA) said.

In a report made public on June 11, COA asked Pag-IBIG’s management to stop paying wage increases and refund the paid amounts as the disbursements violated Presidential Decree 1597 and a Memorandum Order issued in 2001.

Pag-IBIG’s Board of Trustees implemented a general increase in salaries of all personnel except appointees of President Rodrigo Duterte, according to COA.

“The grant which took effect on August 1, 2018, was based on Section 8.2 of the 2009 HDMF Compensation System for Employees,” it said.

“The Board approved a supplemental budget of P255.527 million to cover the general salary increase of the employees who would be entitled in CY 2018,” it added.

Pag-IBIG’s management explained that the hikes — done through the salary step increment system or regular adjustments for government employees — do not need the president’s approval. Under the system, the salary grades of employees remain the same but are given increases after a certain time.

However, COA cited a Supreme Court ruling where it ruled that government-owned and/or controlled corporations like Pag-IBIG are covered by PD 1597.

“The SC has already ruled that GOCCs, such as HDMF, are covered by the provisions of PD No. 1597 and other presidential issuance such as MO No. 20 series of 2001,” COA noted.

“As held in Philippine Economic Zone Authority v. COA, G.R. No. 210903, October 11, 2016: Section 6 of PD No. 1597 specifically requires the exempted government agencies to report to the President, through the DBM, on their position classification and compensation plans, policies, rates and other related details following such specifications as may be prescribed by the President,” COA added. (Editor: Eden Estopace)