COA reports

Refund P92M in illegal pay increases, COA tells SEC execs, employees

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Refund P92M in illegal pay increases, COA tells SEC execs, employees

FORMER SEC Chair Teresita Herbosa at a Senate hearing. Photo by Angie de Silva/Rappler


The Commission on Audit tells former SEC chairperson Teresita Herbosa, 4 other officials, and all affected personnel to refund the pay raise

MANILA, Philippines – “With finality,” state auditors disallowed the P92.74-million salary increases that former Securities and Exchange Commission (SEC) officials and employees gave themselves in 2012, drawing them from the agency’s retained income. 

The Commission on Audit (COA) refused to reconsider its earlier ruling to disallow the pay hike authorized by the following SEC officials: 

  • Teresita Herbosa, former chairperson 
  • Eladio M. Jala, former commissioner 
  • Adelaida C. Navarro-Banaria, Financial Management Division director 
  • Thoureth S. dela Cruz, Budget Division director
  • Renato A. Santos, Accounting Division director
  • SEC officials and employees who received the salary increases

In a four-page resolution, the COA Commission Proper told the SEC officials and employees to refund the P92.74 million.

The SEC executives and personnel claimed that their commission had the full authority to determine their compensation package, and didn’t need to secure the Philippine president’s prior approval for such.  

They also tried to justify drawing the salary increases from SEC’s retained income, saying that nothing in the Securities Regulation Code prohibited it.

COA, however, cited a later law and Supreme Court decision to debunk SEC’s rehashed arguments. 

It said the special provisions of the 2012 budget law – the year SEC granted those salary increases – in fact specified that SEC salary adjustments were “subject to the approval of the President, upon the recommendation of the DBM” or the Department of Budget and Management. 

“Thus, the argument that the SEC has full authority to create its own compensation and position classification system and qualification standards necessarily fails,” the COA said. 

In 2021, the High Court already ruled in the case filed by the SEC against COA that it was improper for the SEC to charge personal services against its retained income. –

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