Aquino proposals for centralized procurement, payroll problematic


MANILA – Can the efficiency of government services improve with the implementation of misplaced austerity measures?

The Confederation for the Unity, Recognition and Advancement of Government Employees (COURAGE) says no. The group is against the Aquino administration’s recent proposals for austerity measures, among them the implementation of a centralized procurement system and a centralized payroll system for state workers.

In a statement, Courage national president Ferdinand R. Gaite said these new proposals will do nothing to improve efficiency in the delivery of the government’s services to the public as it involves cutbacks on the maintenance and other operating expenses (MOOE) of government agencies. Gaite said slashing the allocations for maintenance will impact negatively not only state employees but on public service as well.

Earlier, the Aquino administration’s Budget Secretary Florencio Abad said the government will adopt a central payroll system by 2012 where 1.3 million state workers will get their salaries direct from their bank accounts. This is a shift from the current system wherein state workers receive their salaries through their individual agencies. Abad said the changes will cut red tape and lessen bureaucratic corruption. In the new system, the National Treasury office will deposit the salaries to the bank accounts of the employees.

According to Abad, the new scheme will also put an end to the problem of non-remittances to the Government Service Insurance System. Based on reports, non-remittances have already amounted to a shocking P9 billion (US$209,302,325) matched with an equivalent of P15 billion (US$348,837,209) in penalties.

Abad also said there will be a new procurement card wherein liquidation of government transactions and cash releases will be instant. He explained that it will be something like a debit card but with more features.

“All account officers and officials who handle money will have the limits to what they can spend and what they can spend the money for. With the procurement cards, everything will be reflected,” he said.

He further explained that under the new system, money won’t be going to any other agency that its not supposed to. Account officials of the various agencies will prepare the payroll and send it to the Department of Budget and Management (DBM) and the DBM will give the go signal to the treasury to pay the employees.

This proposed system is already what the Aquino government is using when releasing funds from the P21 billion (US$348,837,209) conditional cash transfer program through the Department of Social Welfare and Development.

Pens that won’t write, paper that disintegrates

For all of Abad’s positive spin on the new system, government employees under Courage are not convinced.

“If the government is sincere in its’ desire to cut back on expenses in order to fund social services, it should instead decrease the amount allocated for foreign debt servicing which amounts to P823 billion for 2011,” Gaite said.

The labor leader said the amount that could be saved from a moratorium on foreign debt payments is staggering compared to the P14 billion($325 million) in projected savings from the proposed austerity measures.

“It’s not unlikely that Aquino’s cost-cutting measures will gradually lead to conditions similar to the harsh austerity measures implemented in Greece, the United Kingdom and France,” Gaite said, referring to Greek Prime Minister George Papandreou’s plan to reduce Greece’s budget deficit by cutting government spending.

Papandrenou’s strategy however eventually bred higher taxes and steep cuts on social services. The worsening living conditions in Greece led to massive protests and demonstrations from citizens denouncing the government’s anti-people policies.

Gaite said Aquino’s predecessors also institutionalized austerity measures. “But these all resulted to difficult working conditions, pay cuts and benefits withheld for employees. In the end, services were also affected because of the less number of work hours, scant resources and lessened accessibility for the public,” he said.

Gaite said the proposed implementation of a centralized procurement system for government agencies is already an old proposal that has already been proven to be unworkable.

“The centralized procurement system has already failed miserably under the Ramos administration. Agencies bought substandard office equipment and machinery and these were eventually discarded because of poor quality. In the end, it was a waste of government resources and a trigger for protests among employees who had to use the said poor equipment. There were ballpens that one could not use for writing; pencils that had no lead, and paper that easily disintegrated. We have encountered all of this before,” said Gaite.

According to the Directorate for Public Governance and Territorial Development, public procurement is the government activity most vulnerable to waste, fraud and corruption due to its complexity, the size of the financial flows it generates and the close interaction between the public and the private sectors.

Accoring to Courage, if the government adopts a flawed design of centralized procurement mechanism, there will be even more corruption than there already is under the current decentralized system.

Solve GSIS problems

He also also criticized Abad’s statement that the centralized payroll system will improve the GSIS remittance system.

“This proposal is indicative of how this administration has become out of touch with reality. If implemented, this will make it more difficult for overworked and underpaid government employees, especially those in far-flung areas to get their salaries. What about employees in remote areas where there are no banks, much less bank accounts?” he reasoned out.

Gaite also said a centralized payroll system could very well promote a centralized and systematized corruption, since government funds for personnel services are pooled into a single pay master.

“It’s insulting that instead of prosecuting corrupt government officials responsible for the non-remittance of our GSIS contributions, Aquino and his economic managers opt to placate us with another complicated scheme that will, without doubt, breed more problems. We challenge Aquino to intervene regarding the problems confronting the GSIS and to prove his sincerity in going after corrupt officials within the bureaucracy,”he said. (

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