July 1, 2014
Recto: Additional PERA now, SSL IV later
Senator Ralph Recto today proposed a “two-step” process in raising public sector pay which would allow state workers to cope with the rise in the cost of living without jeopardizing the government’s ability to fund critical social programs.
Under Recto’s proposal, government would first increase the Personnel Economic Relief Allowance (PERA) of its workers by P2,000 to P4,000 a month.
“This is just an interim measure to allow government workers to cope with the rise in prices of food, basic goods and utilities,” Recto said.
The next step, according to Recto, is the passage of “the fourth edition” of the Salary Standardization Law (SSL).
“PERA is tactical. SSL IV is strategic,” explained Recto.
Recto said the enactment of an SSL IV should be done after a thorough review and broad consultation to include government workers themselves.
“One critical aspect is the funding—clear sources of funds must be identified. It is easy to pick a figure out of thin air. The challenge is to back rhetoric with cash,” he said.
Recto has filed a bill seeking to increase the PERA, and a resolution asking the Senate committees on finance and on civil service to review the current government pay scale “with the end in view of crafting a new Salary Standardization Law.”
At present, the government’s “Compensation and Position Classification System” has 33 salary grades. Except for the top level, each salary grade has eight steps.
“So there are a total of 257 pay categories which must be studied and adjusted. There must be distinctions and differentiation between and within the salary grades,” Recto said.
“What makes the job harder is that all of these 257 pay categories must be accommodated within a ceiling, which at present is P120,000 a month, the salary the President gets,” Recto said.
At the other end of the spectrum is the P9,000 monthly salary of a Salary Grade 1, Step 1 holder, the entry-level post in government. This, however, is augmented by allowances such as the PERA.
Recto explained that increasing the PERA by P2,000 a month would in effect raise the minimum wage in the government to P11,000 a month. “Other benefits of increasing the PERA during the transition period towards an SSL IV is that the PERA is not taxable and is not subject to payroll taxes such as PhilHealth and GSIS premium contributions,” Recto said.
Noting that the P2,000 PERA hike translates to a P66 increase per day, Recto said this amount is reasonable and affordable on the part of the government.
“This will just allow them to get by, not get rich,” he said.
With 1,202,364 filled items in the national government plantilla, a P2,000 increase in the monthly PERA will cost government P28 billion a year.
Recto said this can be financed in part from the P25 billion annual savings from the scrapping of the congressional pork barrel.
He said there are “other terminated projects and non-recurring expenses” in the national budget whose funding can be diverted to “pay envelopes of our teachers, policemen and soldiers.”
Recto said these professions make up 82 percent of the national government workforce.
“They’re mostly clustered around the Salary Grade 11 to 13 brackets. They get a basic monthly pay of between P18,549 to P21,436. These are the people who are in need of a salary hike,” he said.
According to Recto, a comprehensive SSL review is the road to take because a piecemeal approach, or one that singles out a profession, will result in an uneven and distorted classification scheme.
“The need for a pay hike is clearly across-the-board,” he stressed.
Recto said a careful study that is participated by all will allow government to peg “forward budgetary estimates.”
“In doing the exercise, we should be mindful of the fact that any increase in the salaries of government workers will be shouldered ultimately by their employers – the people,” Recto said.
Government “payroll, pension and premium” expenses will reach almost P680 billion this year.
The last government salary hike was through SSL III, which was given in four annual tranches from July 2009 to July 2012.
But Recto said in his sponsored resolution that “inflation from May 2009 to May 2013 had eroded 15 percent of their pay.”