Aquino could issue executive order if Congress fails to pass latest SSL–solon

The House of Representatives leadership said President Benigno Aquino III could issue an executive order in case Congress fails to pass the latest Salary Standardization Law (SSL).

But Majority leader Neptali Gonzales II on Monday said Congress remains confident it would be able to ratify the latest government pay hike in May when it resumes from its break which would start on Feb. 5.

The SSL got into a deadlock in its first bicameral conference over a provision on indexation of the pension for retired military personnel.

While the House version sought to suspend the indexation because of a lack of budget, the Senate wants to include this in the current SSL.

Gonzales said the SSL could suspend the indexation of the pension of retired military personnel until government find the funds to finance the retired military’s pension.

He said should Congress fail to merge its two versions of the SSL, the president can issue an executive order instead to increase the salary of government employees.

“’Pag magkaroon ng failure, and I hope not, dahil may budget na (ang SSL), nothing prevents the president from issuing an executive order … na magkaroon ng salary adjustment,” Gonzales said.

Gonzales said Congress had included the P57.9 billion budget for the first year of implementation of the SSL in the 2016 General Appropriations Act.

Gonzales also said the House wants to suspend the indexation because it would cost government an additional P122 billion in its full four year implementation.

The budget for the full implementation of the SSL for the 1.5 million government employees and active uniformed personnel would cost P225.8 billion already, he added.

Including the indexation for retired military personnel would thus cost government a total of almost P350 billion.

Senate proposed an including of a provision that the indexation should be subject to availability of funds.

But the House maintained to suspend the indexation until government finds the source of funds for the retired military personnel’s pension, Gonzales said.

“Hindi na kami magkaintindihan, kaya in the meantime, nag-suspend muna kami. I really don’t know kung kailan kami mag-resume. Hopefully we’ll be able to thresh this out before we adjourn,” Gonzales said.

Gonzales said the Senate civil service committee headed by Senator Antonio Trillanes IV seemed to have overlooked the impact of the additional cost in SSL to government deficit.

Gonzales added that the indexation of retired military personnel could result in a three percent deficit.

“In the House, ang nag-sponsor ng bill is appropriations. Kaya may mga studies kami kung ano ang budgetary implication niyan, ano ang magiging effect nito sa deficit,” Gonzales said.

“In the Senate, ang nag-sponsor is the Committee on Civil Service chaired by Senator Trillanes. Kaya palagay ko wala silang pag-aaral sa budgetary effect, unlike sa House na appropriations ang (nag-sponsor),” he added.

Gonzales said the position of the House is to prioritize first the pay hike of government employees and uniformed personnel over the retired military personnel’s pension.

But Gonzales said he understands the position of Trillanes, a former soldier, in considering the retired military personnel’s pension.

“Let’s consider first the greater number of our civil employees… There are only about 211,000 na mga retired uniformed employees, as compared to about 1.53 million government employees, including active men in uniform,” Gonzales said.

Gonzales vowed that Congress would be able to ratify the SSL in May.

“I’m pretty confident naman that both the highest leaders of both Houses of Congress would be talking to each other on how to break the impasse, para before we adjourn mayroon na kami ma-ratify na reconciled version of SSL,” Gonzales said.

Pay hike

Militant solons criticized the SSL 2015 for giving paltry sums to ordinary workers while granting hefty increases to higher-ranking officials like the President.

READ: House leaders defend hefty pay, paltry sums under salary law 

The compensation package is composed of a salary increase, a mid-year 14th month pay, and an enhanced performance-based bonus (PBB) system.

The salary hike would increase the basic Salary Grade 1 from P9,000 to P11,068 a month.

The bill seeks to increase the basic salary of covered employees by an average of 27 percent. The 14th month pay will increase compensation by eight percent.

Meanwhile, the enhanced PBB is equivalent to one to two months’ salary or an average of 10 percent increase in salary.

The bill also seeks to bridge the gap between the pay of employees in the public sector with their counterparts in the private sector.

Under the bill, the lowest salary grade, Salary Grade 1, will be raised to about 154 percent of the market, while the highest salary grade belonging to the President will be about 70 percent of the market.

Government compensation in the average is estimated to increase by 45 percent and should be around 84 percent of private sector pay at the end of the four tranches. The average government pay now is 55 percent of the market rate.

Under the bill, the new compensation level for all salary grades will be at least 70 percent of the market; there will be no salary overlaps; and the link between pay and performance will be strengthened.

Due to the enactment of Republic Act 10653, which raised the tax exemption cap to P82,000, the 14th month pay and PBB will be tax-exempt for employees belonging to Salary Grades 1 to 11 who only receive the tax-exempt 13th month pay, the cash gift and the productivity enhancement incentive (PEI).

Meanwhile, only the 14th month pay will be tax-exempt for employees under Salary Grade 12 to 16 who receive the existing tax-exempt 13th month pay, cash gift and PEI.

The first tranche of the pay hike will take effect on Jan. 1, 2016 and thereafter until the final tranche in 2019.

Under the SSL, the pay for Teacher 1 would increase to P19,077 in the first year of implementation in 2016, P19,620 in 2017, P20,179 in 2018, and P20,754 in 2019.

The most basic Salary Grade 1 would also be increased from P9,000 to P11,068 a month.

Meanwhile, the President’s salary is increased from the current P120,000 to as much as P388,096. The Vice President, Speaker of the House, Senate President, and Chief Justice’s salary would be increased to as much as P353,470 after four years.

The bill would only increase the salaries of the President and Vice President upon the expiration of their terms. This means President Benigno Aquino III and Vice President Jejomar Binay would not benefit from the salary hike.