Press Release
September 4, 2015


Sen. Miriam Defensor Santiago on Friday urged her colleagues to investigate the Philippine Economic Zone Authority (PEZA) for allegedly overpaying its officials and employees by a total of P687 million from 2009 to 2014.

Santiago, laureate of the Ramon Magsaysay Award for government service, filed proposed Senate Resolution No. 1563, based on the recently released Commission on Audit (COA) report that red-flagged PEZA salaries, allowances, and benefits.

"It is appalling that in 2014 alone, the PEZA overpaid its personnel by P165 million by using a salary scheme that was not approved by the President. In other words, the PEZA has been illegally paying its employees for six years," the senator said.

The PEZA is the agency tasked with the development of ready-for-occupancy economic zones in the country in a bid to attract more foreign investments. Republic Act No. 7916, otherwise known as the "Special Economic Zone Act of 1995," as amended, allows the PEZA to promulgate its own compensation scheme.

Santiago, agreed with the COA, however, that such compensation scheme is still subject to the approval of the President. She cited Presidential Decree No. 1597, or a decree "further rationalizing the system of compensation and position classification in the National Government," Section 6, which states that:

.... Exemptions notwithstanding, agencies shall report to the President, through the Budget Commission, on their position classification and compensation plans, policies, rates and other related details following such specifications as may be prescribed by the President.

The COA also noted that in the 1999 case of Intia v. Commission on Audit, the Supreme Court ruled that P.D. No. 1597, Section 6, applies even to government corporations whose charters allow them to fix their own compensation system.

The Court in Intia agreed with the COA that payments for representation and transportation allowances (RATA) fixed under rates approved through a board resolution of the Philippine Postal Corporation must be disallowed for failure to submit the same for review and approval of the Department of Budget and Management.

"The PEZA should have no delusions: Pending the approval of the President through the DBM, it should discontinue the implementation of salary adjustments and the use of new salary rates in the computation of benefits and premiums," Santiago said.

She also urged her colleagues to put in place measures that would give more teeth to COA notices of disallowance. Santiago noted that the PEZA, while appealing notices of disallowance from 2009 to 2013, continued to overpay its employees.

"On the other hand, we must consider legislation that will mandate the COA to immediately resolve appeals on notices of disallowance in order to make such notices final and enforceable," the senator said.

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