Those strange government allowances

The impeachment trial can also be educational. The Filipino public is just now getting a glimpse of the strange life of government employees. The Supreme Court’s chief disbursement officer rattled off the various allowances paid to Chief Justice Renato Corona: Rata (or representation allowance/travel allowance), Pera (or personnel economic relief allowance), “productivity enhancement benefit, Christmas cash gift, additional Christmas cash gift and yearend cash gift.” And we thought only government corporations were running out of names for the bonuses they give their executives!

The reactions have been varied. Some people are surprised that government salaries and benefits can be decent, after all. Some are aghast that allowances are paid at all for additional work. The prosecution asks that allowances be supported by receipts showing that they have been used only for their specified purpose. Following that logic, if someone collects his travel allowance, why should he still use an official car and all its accompanying perks, like a driver, fuel, insurance and maintenance—all at government expense? That’s like having your travel allowance and eating it, too. But again, if we apply that test to the Chief Justice, maybe we should apply the same test to all the Supreme Court justices, and for that matter, all government officials across the board without exception!

It may look weird to the public that the salary is just a fraction of the Chief Justice’s take-home pay, that his allowances can be very substantial, and that some of them are paid regardless of their designated purpose. But why has it become the practice, as the high court’s chief disbursement officer testified? It’s all because salaries are fixed under the rules on salary standardization, while the Supreme Court’s constitutionally protected “fiscal autonomy” gives it more flexibility with its budget and allows it to convert its unspent funds into all sorts of bonuses for its staff. Thus the earlier tiff between Malacañang and the Supreme Court. The budget department noticed that personnel positions in the judiciary were being left unfilled and their budget reallocated for bonuses. Accordingly, it insisted that judiciary personnel funds be released only as each vacancy was filled.

In a way, it’s also a strategy to avoid the taxman, and this is something that the government merely picked up from the private sector. By thus characterizing the moneys as allowances, the government enables its employees to reduce their tax payments and indirectly augments their income even more. Finally, since allowances are not governed by the strict rules on promotions and salaries, the gods in each government office are able to custom-tailor the benefits as they wish. This is a perennial source of grievance of rank-and-file judiciary employees: that those closer to the gods in Padre Faura actually get a much heftier share of the funds each time.

What the public can learn from the Corona trial is the inner structure of incentives and rewards. Who would have thought that those House and Senate electoral tribunals paid allowances that dwarfed the monthly salaries of other professional staffs in government? On the other hand, is it realistic for us to think that the Chief Justice actually performed the social obligations of his post on his measly representation allowance? The impeachment trial has thus far resulted in a more detailed statement of assets, liabilities and net worth—far too detailed and burdensome, our congressmen say. Perhaps one legacy of this trial is a thorough review of these allowances, a more frank description of their nature and purposes, and a more candid approach to fixing the perks of government office. In other words, if in the end, we really pay, say, P200,000 a month for a high-level government official, and if after all funds have always been available to sustain those payments, why go through the fiction of paying them small salaries, and then paying the rest in allowances and bonuses of all sorts?

Singapore is surely wealthier than the Philippines but it has openly declared that its top government officials are paid salaries that match those of top executives in their leading corporations. This guarantees that they are able to recruit high-quality leaders to the top echelons of the government and who, once in office, would have no incentive to steal or cheat.

(On the other hand, note the downside. A dissident Singaporean lawyer, a former solicitor general [now in exile in Cambridge, Massachusetts], has written that Singapore’s chief justice is the highest paid chief justice in the whole world and that, in effect, it is built-in corruption. It’s like the bribe is tucked into his salary and, once appointed, he has no incentive whatsoever to rock the boat.)

The tragedy of the allowance/bonus regime is that the government ends up paying big amounts, just the same, but the government official still thinks he’s getting paid too little. A straightforward salary regime would be more forthright. It will be easier to administer. It will be more transparent and will be better regulated as a systemic reward for good performance, and not as a personal gift from a well-placed patron.

At least, with the “Christmas cash gift, additional Christmas cash gift and yearend cash gift,” the labels themselves were telling, in the sense of a surprise present for the Christmas holidays. It’s the less candid “allowances” that are more troubling, and that dare the impeachment court to accept the legal fictions of life in the Philippines, or to insist that the Chief Justice respect the labels as binding in fact and in law.

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