State workers protest against DAP, new taxes

By Satur C. Ocampo
At Ground Level | The Philippine Star

They’re vexed, and justly they protest.

After President Aquino warned of a clash between the executive and the judiciary— vehemently defending his Disbursement Acceleration Program and assailing the Supreme Court’s unanimous ruling declaring it unconstitutional — court employees publicly protested to defend judicial independence.

Subsequently the court employees redoubled their protest by opposing another executive move: a BIR memorandum-order in June, imposing withholding taxes on their fringe benefits (allowances, bonuses, etc.). Their protest spread fast nationwide among the rank-and-file workers in other government offices.

They are raging against two issues:1) in 2011-2013 the Department of Budget and Management scooped up portions of their benefits as “savings” and put these in the DAP, while denying their clamor for salary increases; and 2) now, with pay raises still uncertain, the BIR is taxing their fringe benefits.

Last Wednesday, 12 state employees associations and the confederation of public-sector unions, Courage (Confederation for Unity, Recognition and Advancement of Government Employees), filed a petition at the Supreme Court to seek relief. They asked the Court to stop the implementation of the BIR memo-order and to nullify some of its key provisions.

Former Senate President Aquilino Pimentel Jr. has taken up their case as pro bono lawyer.He explained to the media:

“Today, we filed a petition to fight what we think is oppressive taxation that BIR is doing, collecting taxes on allowances, bonuses and other fringe benefits of government employees and officials throughout the nation.”

Describing the fringe benefits as pantawid-gutom — additional money to tide over the state employees through hunger, implying the inadequacy of their regular compensations — Pimentel said it’s wrong for the BIR to tax these benefits.

One of the petitioners, Manny Baclogon, national president of the Social Welfare Employees Association of the Philippines, remonstrated against the BIR move:

“We are not against taxes.But they are bleeding us, making us their scapegoat. If they have a tax deficit problem, why don’t they review their tax incentives system, go after big tax evaders, smugglers?”

Alluding to P-Noy’s verbal assaults on the SC, the president of the Judiciary Employees Association of the Philippines, Jojo Guerrero, remarked:

“We hope that (BIR Commissioner Kim Henares) doesn’t take from us what she needs to fill her revenue quota. We have very little pay. But I don’t know, it seems she’s doing this just to prove that the executive is more powerful than other branches of government.”

The petition reflects such sentiment.It says that the implementation of the BIR memo-order amounts to an “over-stretched exercise of power and authority by the respondents of what is justifiable under the law.”

Thus, the petitioners urge the SC to nullify these portions of the memo-order:

Section 3, which obligates the withholding authorities to tax all forms of compensation across the bureaucracy; Section 4, which calls for taxing bonuses above P30,000; Section 6, which requires treasurers and accountants from provincial, municipal and barangay governments to withhold the taxes; and Section 7, which sets penal provisions (fines and imprisonment) on authorized officials who fail to withhold the taxes.

Correlating the new taxation with the DAP and the Priority Development Assistance Fund (earlier declared unconstitutional), Courage president Ferdinand Gaite averred:

“The government keeps on imposing taxes and they just go to the DAP and PDAF, violating the (principle of) separation of powers. We will continue to fight for a living wage and against oppressive tax measures of the government.”

At the budget hearing in the House of Representatives, Rep. Antonio Tinio (ACT Teachers partylist) voiced out the state workers’ pervasive complaint: unjust deprivation of what’s due them in salary increases and fringe benefits.

He dismissed as a “pittance” Budget Secretary Butch Abad’s inclusion of a provision in the 2015 budget granting state workers a P5,000 performance-incentive bonus plus one-month salary in lieu of salary upgrades.

Tinio noted that in the 2015 budget the DBM seeks to continue the practice under the DAP of “depriving salaries and benefits due to government employees by inserting a provision allowing the augmentation of priority projects, activities and programs from savings derived from personal services budget (payrolls and fringe benefits).”

Previous to 2011 (when the DAP was created), Tinio pointed out, themain priorities set in the annual budgets for using savings were the government workers’ compensation, yearend bonus, cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans, and other benefits.

But now “out of the billions of pesos worth of DAP projects, only an insignificant portion has the slightest relation to salaries and benefits of government employees,” Tinio observed, adding: “The bulk went to projects that are of doubtful benefit to the people.”

Tinio may find it worthwhile looking deeper into what the Philippine Center for Investigative Journalism has found out from DBM records:

Of P30 billion in DAP funds requested by legislators, local officials and national government agencies, at least P11.34B “went mostly to the bailiwicks or hometowns of legislators and local officials belonging to the Liberal Party and allied parties in the LP-led ruling coalition.” Some P8.8B disbursed wasn’t itemized.

The three biggest recipients: Mandaluyong City, P203.5M (Rep. Neptali Gonzales); Cavite’s first district, P186.2M (Rep. Joseph Abaya); and Batanes, P133M (Rep. Henedina Abad).

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Published in Philippine Star
August 9, 2014

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