Press Release
December 10, 2019

Senate President Pro Tempore Ralph G. Recto
10 December 2019

Mr. President, dear colleagues, fellow workers in government:

This bill is not a gift of one person, nor the result of the generosity of one institution.

It springs from the grace of taxpayers who will ultimately pick up the P310 billion, four-year tab of this bill.

It will come from tax on the water they flush down their toilet, on the phone calls they make, on the gas they will buy.

I have to bring up this very important point because I believe those who will provide cash must get the rightful credit.

We are here to merely serve as midwives of this bill, birthing this legislation that will come from pockets of the sovereign.

Having said that, let me express my thanks to the President, to the DBM Secretary, to the two Senator Bongs, and to all of us here on both sides of the aisle, for working as one on this bill.

The legislative tradition, Mr. President, is that when it comes to the appropriations bill, we only sponsor and highlight the expenditures. We seldom sponsor the revenues it would entail.

So let me provide that perspective--a fact-based one--so we will come to learn not just the price tag of this bill, but also trace the historical rise of one of government's biggest expenses, the PS or Personnel Services.

Our PS this year is P1.138 trillion. It accounts for 31 percent of the national budget. Or 31 centavos for every budget peso.

Daily, we spend about P3.117 billion. Or about P130 million every hour. That is how fast the needle in our payroll meter moves.

Next year, PS will increase by P117.6 billion.

Compare this to our PS a decade ago, in 2009, which was P396 billion. Conclusion: PS has tripled in 10 years.

What could be the reason for this PS explosion?

We should know because we authorized this creeping increase through the years.

One, for the past 13 years since 2006, there were 11 annual pay hikes in the public sector, 8 years of which were by virtue of the two Salary Standardization Laws.

Actually there were 13, if we include the increases granted in two annual "gives" to the uniformed sector during the present administration.

So if we were to put the presidents responsible on a scoreboard a la SEA Games, it would show this tally: GMA: 7, Aquino: 4, and Duterte: 2 half-points.

Because if this bill would be a slam dunk, then it is a forgone conclusion that 5 will be credited to President Duterte.

The second culprit is our expanding population. More people means more government personnel to serve them. For example, a 500 increase in population triggers the hiring of 1 policeman, in order to meet the ideal citizen-to-cop ratio.

An addition of a mere 40 students to the national school population already obligates the employment of 1 new teacher.

But we are producing babies in industrial proportion, despite the fact that millennials, in acts of romantic patriotism, are marrying and having children late, thus decelerating the yearly population growth to below 1.5 percent.

But these are still 1.480 million new Filipinos a year waving their tiny fists, and because each one must be fed, schooled, kept safe, and given health care, they are giving our economic managers a post-partum headache of the fiscal kind.

And who wouldn't, when the authorized national government workforce has ballooned to 1,863,361 positions, of which, thankfully, only 1,664,586 are filled this year.

The impact of demographics on expenditures brings me to my theory of 'The 4Ps in Budgeting.' The Ps stand for the pressures--or make them powerful pressures, on the budget.

Allow me to tick them off: Population. Price increase or inflation. Payroll. Popular, or pogi points measures.

A 2 percent increase in population compels us to raise the budget by the same percentage, meaning, using 2020, figures, by P84 billion a year.

If inflation is 3 percent, then the corresponding increase in expenditures would be P126 billion.

Payroll and pension is a cost driver, to the tune of P140.6 billion in additional spending a year, using the average growth of the past three years.

Popular measures, whose titles bear the standard seductive suffix "free " - Free Health Care, Free College, Free Irrigation, Free Social Pensions plus the mega-billion CCT--boost our spending by at least half a billion a year.

And then there's the 5th P - public works - the shortage of which must be addressed and erased.

So when the taxmen cometh to the Senate, the primary motive of their sales pitch is not the health of the people, but of the nation's fiscal health, whose charts have long been in the red.

I actually sympathize with them because they have to raise the cash for the programs we love to take credit for.

But the SSL V is different. It is neither an entitlement, nor a handout. It is not for people on welfare, but for working people in the government.

In fact, I have my reservations on the rates in this bill, and I am advocating for higher pay for those in the lower ranks.

My duty, however, to champion for higher compensation for public sector employees carries with it the responsibility, in the interest of transparency, to fully disclose to the taxpayers what it would cost.

Sa darating pong taon, ang lahat po ng VAT collection at excise tax, pagsamahin niyo na sila, hindi pa rin kayang punuin ang kailangan para sa PS.

BIR collection on taxes on domestic goods and services programmed to hit P1.008 trillion in 2020, is P248 billion short of the full-year PS requirement of P1.256 billion.

Lahat ng individual income tax payments ng milyung-milyong Pilipino sa 2020, na aabot ng P422 million, apat na buwan lang na pasweldo at papensyon ng pamahalaan.

Ang projected Bureau of Customs collection na P731 billion, kasama na ang lahat nang makokolektang buwis sa langis, wala pang kalahating taon na pa-sweldo at pa-pensyon.

That's the macro overview. Let me give you a micro snapshot of the PS burden on the taxpayer.

If one Barangay Ginebra, for example, in Batangas would hire one policeman using their tax payments on their favorite drink, then they will have to down 25,719 bottles of the famous "stainless na bilog" to be able to raise a PO1's P415,623 annual base pay.

Kung mayroong isang pinabili lang ng suka pero naging Assistant Secretary, at kung kukunin sa excise tax sa gasolina ang buwanang sweldo niyang P155,000, aba eh kailangang magpa-full tank ang 41,341 na motorsiklo para makalikom ng pampasweldo niya sa isang taon.

At kung ang isang bayan naman ay kukuha ng isang guro at ang gagamiting pangsweldo sa kanya ay VAT at excise tax sa yosi, then the people will have to cough up taxes, and fumigate their surroundings, from 6,357 packs of cigarettes, to raise the annual base pay of a Teacher 1.

And speaking of these LGUs, my question is: If in this bill we are imposing the mandate for them to raise the pay of their employees, with the rates in this bill as guide, are we giving them the resources to comply?

Kung i-o-obliga natin ang mga lalawigan, mga lungsod at mga bayan na itaas ang sweldo ng kanilang mga kawani, hindi po ba dapat at makatwiran lang na bigyan natin sila ng kakayahan para sundin ito?

Hindi po ba dapat na kagyat na ibigay na sa kanila ang kanilang 50 percent share from all internal revenue collections, alinsunod sa desisyong ipinalabas at ipinagtibay muli ng Korte Suprema?

A rising tide should raise all ships.

However, it appears that it is only the NG that is enjoying the financial buoyancy brought about by new and higher taxes--taxes which the constituents of the local governments also pay.

Mr. President:

As I have said, I do not fully endorse the rates here, but I join the sponsors in bringing this measure to the floor in the hope that like proposals that have been here before, it can be improved by our collective wisdom.

Let me also put on record my call to the executive branch to revamp the position classification system so that items will be properly compensated based on the work done, experience required, competence involved and difficulty in execution.

Like computer programs, the public sector plantilla needs an upgrade, to reflect the changes in the skills-market conditions.

Thank you, Mr. President.

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