Excess PhilHealth, GOCC funds to bankroll gov’t workers salary hike, benefits —DBM

The billions of pesos in excess funds of state-run corporations to be diverted back to the Treasury, including PhilHealth’s P89.9 billion, will fund the salary increases and benefits of government workers this year, based on the list of priority programs under unprogrammed appropriations provided by the Department of Budget and Management (DBM).

The list enumerating the items that will be covered by 2024 unprogrammed appropriations showed that a total of P67.6 billion were earmarked for Personnel Benefits and Salary Standardization Law VI (SSL 6).

In March, the DOF issued Circular No. 003-2024 which directed GOCCs, such as PhilHealth, to remit excess funds back to the Treasury to allow the government to fund unprogrammed appropriations.

In particular, P40 billion will be allocated for the salary adjustments of about 1.8 million workers in the bureaucracy.

The DBM earlier announced that the first wave of the Marcos administration’s four-tranche salary hikes —retroactive from January 2024— will commence this year after it issued the guidelines of the Executive Order No. 64, which increased the salaries and granted additional allowance to workers in government.

The Budget Department said the cost of implementing the first tranche of SSL 6 this year at about P36 billion would be sourced from available funds under Fiscal Year 2024 General Appropriations Act (GAA), such as the miscellaneous personnel benefits fund (MPBF) and unprogrammed appropriations.

EXPLAINER: How much will adjusted gov't workers' salaries be under EO 64?

Under the first tranche, the average rate of salary adjustments for all salary grade levels (from SG 1 to SG 31) will be 4.41%. 

Meanwhile, the list also showed that a total of P27.6 billion would cover the requirement to pay government personnel benefits such as performance-based bonus, allowances, medical expenses, compensation adjustments, staffing modifications, among others.

Due to the issuance of the DOF Circular No. 003-2024, the PhilHealth was mandated to remit P89.9 billion in excess subsidies—P20 billion of which was already remitted as early as the first quarter of the year and was used to fund the more than P27-billion unpaid 5.04 million claims of COVID-19 pandemic era service allowances or health emergency allowances (HEA) of frontliners.

As of August 21, the state health insurer remitted another P10 billion to the Treasury.

Apart from PhilHealth, the Philippine Deposit Insurance Corp. (PDIC) was also tasked to remit about P117 billion — P80 billion of which was already transferred to the Treasury.

In total, P203.1 billion worth of unprogrammed items or 11 priority programs and projects—including the salary hikes and benefits of government workers—are set to be funded by excess funds from government-owned and -controlled corporations (GOCCs).

The complete list of priority projects and programs under unprogrammed appropriations to be funded by excess GOCC funds are as follows:

• Government counterpart of foreign-assisted projects - P51.7 billion
• Personnel benefits - P27.6 billion
• Public Health Emergency Benefits and Allowances for Health Care and Non-healthcare Workers - P27.7 billion
• NEDA-PSA: Community-Based Monitoring System - P3.6 billion
• Payment of right-of-way - P3 billion
• Maintenance, repair, and rehabilitation of infrastructure facilities (routine maintenance of national roads) - P6 billion
• Proposed Salary Standardization Law VI - P40 billion
• Fiscal support arrearages for Comprehensive Automotive Resurgence Strategy (CARS) Program - P415 million
• Support to Barangay Development Program of NTF-ELCAG - P6.5 billion
• Department of Public Works and Highway’s various projects - P26.6 billion
• Revised Armed Forces of the Philippines Modernization Program - P10 billion

The Philippine Medical Association, Senator Aquilino "Koko" Pimentel III, former Finance undersecretary Cielo Magno, Dr. Ma. Dominga Padilla, and the Sentro ng mga Nagkakaisa at Progresibong Manggagawa, among others, filed a petition with the Supreme Court blocking the transfer of P89.9 billion in excess funds of PhilHealth to the Treasury to fund unprogrammed appropriations this year.

Last week, the High Court ordered several senior government officials to submit their comments to a petition blocking the transfer of excess funds of PhilHealth.

Amid criticisms on the government’s diversion of state-firms idle funds, Finance Secretary Ralph Recto said that the move has legal basis and was only in accordance with the orders of Congress, as provided under 2024 GAA.

Recto also emphasized the need to mobilize unused funds to bankroll priority health, education, and infrastructure programs. — BM, GMA Integrated News