Budget Secretary Florencio Abad. INQUIRER FILE PHOTO
MANILA, Philippines — Government expenses for personal services, including salaries and benefits of those working for national agencies, increased by 7.6 percent to P212 billion in the first five months of 2012.
Budget Secretary Florencio B. Abad said the increase would be maintained in the remainder of the year due to mandated wage hikes as well as payment on claims of those retiring early.
“Personal services spending is expected to further increase this year due to the fourth tranche of the Salary Standarization Law III and expected claims of voluntary early retirees under the rationalization plan (for the bureaucracy),” Abad said.
From January to May, expenses for personal services accounted for almost a third of the P688.4 billion total expenditures for the period, which was 13.1 percent higher year-on-year.
Abad expressed confidence that disbursements in the second quarter would sustain the gains of the first quarter, when public spending was a key driver of the 6.4-percent growth in gross domestic product.
He added that spending would be “more robust” in June due to the early implementation of salary increases under the fourth tranche of the SSL III, payments of conditional cash transfers, as well as expenditures in preparation for the opening of classes.
Earlier, the budget chief said a total of P24.7 billion has been earmarked to fund the fourth installment of pay increases provided for in SSL III.
Of the total amount, P21.7 billion comes from the miscellaneous personnel benefits fund of the General Appropriations Act of 2012 while P2.7 billion will be charged against savings from the national budget.
Abad clarified that individuals and groups engaged through job orders, contracts of service, and other similar agreements would not be covered by the salary hike.
Also excluded are civilian personnel in government institutions that are exempt from the Compensation and Position Classification Act of 1989. These institutions are authorized by law to adopt and implement their own compensation and position classification systems, provided that the Office of the President approves such systems.
Also, Abad said pay hikes for employees of government-owned or -controlled corporations (GOCCs) and government financial institutions (GFIs) would be charged against their respective corporate funds in their approved corporate operating budgets.
On the other hand, the pay increase for those working for local government units will be charged against the respective local government funds.