Press Release
March 9, 2006


From House-approved P1,000 to P2,000 effective July 1, 2006

Senator Manny Villar as Chairman of the Senate Committee on Finance led the approval of the Senate version of the House Bill 5013 increasing the allowances of around 1.2 million government workers yesterday (March 8). Instead of the House-recommended P1,000 however, the senators approved a P2,000 increase effective July 1, 2006.

We decided to double the increase in the allowance of government workers because we feel that P1,000 is not enough considering the high inflation rate and the fact that since 2001, it is only now that they would be getting salary increases, cites Villar.

Villar adds, Also, we feel that given that we have significant revenues from the tax reforms that we have implemented, the government workforce should benefit from these as well. Overall, this would be good for everyone.

According to Villar, the Senate-approved version of the bill will cost the government P19 billion this year since it will take effect only on July 1st, but on the succeeding years, the funds needed for it will be around P26 billion. Our version of the bill will only cost P13 billion starting July 1 but the President issued an administrative order granting a P1,000 increase from January 1 to June 30, which will cost about P6.5 billion. Our bill costs P13 billion plus that P6.5 billion, so roughly about P19 billion for this year, says Villar.

As for the sources of funds for the said increases, according to Villar, In the budget presented to us for 2006, the P13 billion item for salary increases is already included there, so thats covered. We only need around P6.5 billion more over the planned appropriation in the budget. We can raise this from the items that we are planning to realign in the proposed budget.

The bill grants government employees including military and uniformed personnel an additional monthly allowance of P2,000 starting July 1, 2006 and will give government-owned and controlled corporations (GOCCs) and local government units (LGUs) the authority to grant such additional allowance, charged against their respective funds.

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