SC upholds COA findings vs PSALM incentive pay to employees

MANILA, Philippines—The Supreme Court on Tuesday upheld the Commission on Audit (COA) decision disapproving the Power Assets and Liabilities Management Corp.’s (PSALM) grant of an incentive pay to its employees in 2008 without approval from the President.

PSALM, the state-owned corporation tasked to dispose of the assets of the debt-strapped National Power Corp. and use the  proceeds to pay off its debts, granted its employees a corporate performance-based incentive equivalent to five and a half months of basic pay, net of tax.

In its weekly en banc meeting, the high court dismissed outright the petition of the PSALM seeking to nullify the COA decision affirming the notice of disallowance it issued against the state agency.

According to Theodore Te, the high court spokesman, PSALM’s grant of the incentive pay was done without the approval of the President, which is expressly required under Section 64 of the Electric Power Industry Reform Act (Epira), or Republic Act No. 9136, which provided for the creation of Psalm.

Te said the COA audit observation report noted that PSALM was taxed for the incentive pay that it granted, but the agency did not withhold the taxes from the employees.

He said PSALM “belatedly” got presidential approval for the incentive pay in 2009, retroactive to 2008.

This belated approval prompted the COA audit team to issue a notice of disallowance on the grant, citing lack of presidential approval and violation of the government’s austerity policy.—Christine O. Avendaño