State TV execs give themselves unauthorized pay hikes, fail to remit taxes

In addition to its failure to remit value-added and withheld income taxes, the state-owned Intercontinental Broadcasting Corp. (IBC) also gave its officers in 2020 a P1.933-million salary hike that the Commission on Audit (COA) deemed illegal, government auditors said in a report.

The salary increases were in the form of representation and transportation allowances (Rata), 13th month differentials and bonus differentials.

They were given to the network’s president and chief executive officer, production manager, finance department manager, internal audit manager, on-air and traffic manager, and engineering manager.

The network explained that the salary hikes were approved by IBC board of directors, which also approved for themselves the payment of a separate P463,094 Rata.

Contractual production staff were also given Rata although government budget rules provide that only those who have a position in an agency’s staffing pattern may receive the allowances.

The network argued that the increase was supported by the Office of the Government Corporate Counsel, whose representatives were also given Rata even though they were not network employees.

IBC also explained that they sent a request for approval of the salary increases to Executive Secretary Salvador Medialdea and Budget Secretary Wendel Avisado on July 30, 2020, but there was no indication the approval was given.

“The payments of such salary increase, 13th month pay differential and bonus differential to IBC-13 officers in the total amount of P1.933 million were without legal basis, thus, disallowable in audit,” a 2020 audit report said.

The COA said the state media agency’s failure to comply with Presidential Decree No. 1597 meant the salary increases should be refunded.

The network became a government-owned and -controlled corporation after it was seized from the family of Roberto Benedicto and is now under the control of the Presidential Communications Operations Office.

Even before the salary increases, IBC was already in trouble for its failure to remit P160.8 million in net value-added and withholding taxes, depriving the government of needed funding for its programs.

The COA said the state media corporation’s failure to remit said revenues to the government might lead to penalties as stated in the National Internal Revenue Code. INQ