Government eyes ‘billions’ in savings in national payroll scheme

Budget Secretary Florencio B. Abad. INQUIRER FILE PHOTO

The government expects to save “billions of pesos” with the implementation starting next year of a national payroll system (NPS) that envisages  employees of the national government receiving their salaries straight from the Treasury through their bank accounts.

“This will allow us to save in administrative expenses and avoid leakages, particularly by (eradicating) the problem of ‘ghost’ employees,” Budget Secretary Florencio B. Abad said Thursday.

Abad announced the plan at the National Competitiveness Council’s “Dialogues” forum held at the InterContinental Manila in Makati City, where he was the keynote speaker.

The budget chief disclosed that the Department of Budget and Management (DBM), the Bureau of Treasury  (BTr) and the Commission on Audit (COA) had  been working on the NPS for the past two years.

He added that the pay scheme was expected to be implemented by 2013, starting with the entire Department of Education (DepEd) system, following pilot tests in which select school divisions ran through the NPS.

Of about one million employees of the national government, the DepEd’s workforce accounts for the biggest chunk with about 579,000 people.

The uniformed services follow, with some 146,000 people working for the Philippine National

Police and 125,000 at the Armed Forces of the Philippines.

Abad said that with the NPS, agencies would only have to prepare the payroll and no longer handle funds.

With the DBM authorizing the release of funds based on the payroll submitted, the BTr distributes salaries through banks.

Abad said that, in effect, there would be a single roster of employees through which the DBM could check if workforce numbers add up.

“Aside from that, people need to open bank accounts (to get their salaries) which ghost employees cannot do,” he added.

Abad also said implementation of the NPS would help avoid the nonremittance of premium payments to the Government Service Insurance System, the state-run pension fund, and make more efficient the Bureau of Internal Revenue’s collection of the withholding tax on salaries.

The NPS is a key component of a planned Government Integrated Financial Management Information System (Gifmis), which according to Abad is intended to provide real-time information on financial transactions.

“This Gifmis will not only harmonize the information systems of DBM, BTr and COA but will also be rolled out eventually to the implementing departments,” Abad said.