Can Corona use hefty allowances for personal use?

The answer is yes - and no

MANILA, Philippines – The issue involving the allowances of Chief Justice Renato Corona is not about the amount but on how these are supposed to be spent.

As the impeachment trial against Corona resumed on Tuesday, March 12, the defense was set to prove that aside from his monthly salary, Corona received allowances that enabled him to have millions of pesos in multiple bank accounts and buy posh properties.

Some of these allowances, however, are reimbursable and to be used only for purposes related to his work.

According to the 2010 Commission on Audit report on salaries and allowances, Corona received P334, 615 in allowances and an additional P170,967 as chairman of the presidential electoral tribunal (PET).

As chief justice, he was given P291,999 for extraordinary and miscellanous expenses or EME and another P192,000 EME as PET chairman, for a total of 483,999 for 2010.

Bank documents submitted to the impeachment court showed that Corona had P32-M in his 3 accounts with the Philippine Savings Bank (PSBank) as of December 2011. This was not declared in any of his Statement of Assets, Liabilities and Net Worth.

This is on top of properties in Makati and Taguig that he also failed to disclose in his SALN.

Regardless of how much the EME is the General Appropriations Act mandates that this should only be used for the following:

    • Meetings, seminars and conferences

    • Official entertainments

    • Public relations

    • Educational, athletic and cultural activities

    • Subscriptions to professional technical journals and informative magazines, library books and materials

    • Contributions to civic and charitable institutions

    • Membership in government associations, national professional organizations duly accredited by the Professional Regulations Commission, and in the Integrated Bar of the Philippines

    • Other similar expenses not supported by the regular budget allocation

There is no strict definition for other “similar” expenses.

But the expenses under EME are reimbursable and required receipts.

Receipts submitted by Corona, according to the prosecution, showed that he used some of the EME for a P132-meal at Mcdonalds and to purchase P100,000 worth of Christmas gifts. 

COA circular No. 2006-001 provides additional guidelines on the use of EME:

• The amount of extraordinary and miscellaneous expenses would be the ceiling in the disbursements of funds. Where no such authority is granted in the corporate charter and the authority to grant the extraordinary and miscellaneous expenses is derived from the GAA, the amounts fixed thereunder would be the ceiling in the disbursement.

• Payments of these expenditures would be strictly on non-commutable or reimbursable basis.

• The claim for reimbursement of such expenses would be supported by receipts and/or other documents evidencing disbursements.

By the way it’s defined, EME could not be used for personal investments such as properties. The GAA also said that “no portion of the amounts authorized herein shall be used for salaries, wages, allowances, confidential and intelligence expenses.”

Another allowance received by the Chief Justice – the representation and transportation allowance of P22,000 monthly or P264,000 annually – is also reimbursable.

According to the the Department of Budget and Management (DBM) Manual on Position Classification and Compensation, RATA are “privileges or benefits in the form of reimbursement of expense.”

But RATA was allowed as expenses related to the discharge of official functions. The SC itself cited this in an en banc decision in Galang v. Land Bank of the Philippines. 

Transportation allowance, for example, is not extended to government officials who already have been provided a government vehicle. 

OK for personal use

So what allowances could a chief justice spend – or save – for personal use?

Aside from the P170,000 incentive he gets as PET chairman, he also receives a separate compensation as ex-oficio chairman of the Judicial and Bar Council, the body that vets aspirants to the judiciary to the president, the appointing authority.

The 2010 COA report, however, did not specify how much he is entitled to as JBC head. We tried to ask a retired chief justice about this, but he has not replied to us.

Other members of the JBC though (the JBC has 8 members) receive compensation equal to that of a Court of Appeals Justice. This is equivalent to around P98,000, monthy, including allowances.

The Chief Justice, like other justices, also received a special allowance equal to his salary; it is non-taxable. 

Enacted in October 2003, RA 9227 created the so-called special allowances for judges or SAJ, which is equivalent to 100% of the basic monthly salary of the judges.

The law, however, has a curious provision: it also stipulates that “upon implementation of any subsequent increase in the salary rates provided under RA 6758 [the SSL], as amended, all special allowances granted under this Act…shall be considered as an implementation of the said salary increases.”

In the event of such salary increases, “the special allowance equivalent to the increase in the basic salary as may be provided by law shall be converted as part of basic salary.”  

Consequently, because the allowances had been converted to salaries, they in effect became part of taxable income.

Salary raise

When he was appointed chief justice in 2010, Corona was entitled to a monthly salary of P54, 579. By 2011, when the third tranche of the salary increase for government employees was implemented, Corona’s salary – which is equal to that of the Senate President – rose to P91,226. 

The Chief Justice is also entitled to a personal emergency relief allowance worth P2,000 or P24,000 annually. PERA, which used to be the cost of living allowance, is given to help government employees cope with the rising cost of living. 

In 2010, Corona also received P517,045 in “bonus, incentives and benefits.” 

According to the 2010 COA report on salaries and allowances, Corona received P2,195, 588 all in all – P170,967 for compensation as PET chairman, P344, 615 in allowances, P24,000 for RATA, P654, 959 for salary, P517,045 in bonus, incentives and benefits and P483,999 in EME.

Out of this P2.1-M, P507,999 are for reimbursable expenses and should have been used for activities related to work. 

A tax expert who asked not be named said that allowances exceeding P30,000 are taxable. She said P30,000 is the cap for fringe benefits, which according to Revenue Regulations 10-0, cover medical cash allowance and rice subsidy, among others.

Corona was appointed SC associate justice in 2002. As early as then, he was entitled to benefits and allowances similar to that of a chief justice, minus the compensation provided for being a JBC member.

An associate justice has a salary grade of 31, equivalent to that of a senator and congressman. The monthly salary for government officials with that salary grade is P35,000, but by the time Corona was appointed chief justice in 2010, the salary of an associate justice had increased to P51,390.

COA reports on salaries and allowances in 2009 and 2002 did not include those received by SC justices. We asked COA for reports that contain these, but our request was submitted for evaluation. We also sent a request to the SC to no avail.


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