COA: DBP perks in 2005-06 had no legal basis

MANILA, Philippines – There is no legal basis for bonuses and perks given by the Development Bank of the Philippines (DBP) to its employees and officials, the Commission on Audit (COA) ruled Thursday, January 16.

The COA ruling covers P151.7 million worth of bonuses and perks given to officials and staff of the government-owned and -controlled corporation between 2005 and 2006.

These benefits were:

• Officer’s Allowance (OA), P38.26 million
• Economic Allowance (EA), P54.15 million
• Merit Increase, P14.18 million
• Amelioration Allowance, P45.1 million

In 2007, these allowances were disallowed by the DBP’s supervising auditor, but the company filed an appeal with the COA. There were two separate rulings: one covering the first three perks, and another on the Amelioration Allowance.

“The grant of additional compensation to the DBP officers and employees clearly lacks legal basis… that said personnel benefits were not specifically authorized by existing laws as the same stemmed only from the Resolutions of the DBP [Board of Directors],” the first ruling read.

In 2010, then-President Gloria Macapagal-Arroyo, via a memorandum, affirmed the DBP board’s authority to determine the corporation’s compensation plan based on a 1999 DBP board resolution, but this, the COA said, did not cover the granting of new perks.

The COA said the board should have had “the approval of the President on the grant of additional compensation or allowance [and] not merely the authority of its board to fix the compensation of DBP officials and employees.”

In addition, Arroyo’s approval was in a memorandum issued April 22, 2010, which was within the election period ban in connection with the 2010 national and local elections, making it illegal. “Hence since the approval was illegal, there was thus no approval at all,” the COA said in its ruling.

Meanwhile, the Amelioration Allowance was covered in a separate ruling. It was first reinstated, with the DBP citing “good faith.”

The COA reversed the reinstatement, saying it was disallowed under a 2001 Department of Budget and Management (DBM) memorandum.

DBM Circular 2001-03, which states there should be no allowances that are tied to inflation, was “disregarded” by the DBP, and the COA said they did not believe the company’s claim that the error was made in good faith.

Both rulings said the officials and employees given the perks should reimburse the government of the amounts given to them.

The cases were reviewed by COA Chair Ma. Gracia Pulido-Tan along with Commissioners Rowena Guanzon and Heidi Mendoza. – Rappler.com