Malacañang household bills: P2.4-B tab on taxpayers money in 2006

The Office of the President, seat and fount of power in the land, requires piles of money to maintain. Keeping house for Malacañang under President Gloria Macapagal Arroyo cost taxpayers a cool P2.36 billion in 2006, according to reports of the Commission on Audit. The annual housekeeping tab for the Palace on average amounted to P196 million a month, or P6.5 million a day, or P273,148 every hour. But basic housekeeping expenses – food, water, utilities, medicines, personnel services, etc. – are not the only bills that Filipinos have to shoulder to sustain the presidential household. On average, the Palace spent P44 million a month to cover the salaries, benefits and bonuses of its regular employees, apart from an average P5 million a month in fees for consultants. And because Mrs Arroyo traveled three times more in 2006 than she did in 2005, she incurred an average of P40 million a month for various domestic and international trips. Press Secretary Ignacio Bunye told GMANews.TV that he was "not in a position to comment" on these matters, that are the concerns of Malacanang's finance and administration officials. Still, Mrs Arroyo’s household compares better, in terms of transparency and clarity of expenses, than the Malacañang household of ousted President Joseph Estrada. The COA’s report for 2000, last full year in office of the Estrada presidency, suffered from a paucity of data. Malacañang under Estrada, COA noted, spent P2.37 billion in personal services and MOOE (maintenance and other operating expenses), but for nearly all transactions failed to show receipts, purchase orders and disbursement records. Estrada’s presidency likewise failed to submit detailed financial statements. Household expenses By all indications, Malacanang has grown into a super-sized household that is conversely super-expensive to maintain. In 2006, the Office of the President-Proper incurred average monthly bills of P7 million for food, and P5 million in electric bills. On top of this, it paid out an average of P3 million a month on gas, P1.3 million in landline phone bills, about P1 million in mobile phone bills, and P1.2 million for drugs and medicines every month. Millions of pesos went as well to cover many other expenses – including payment for casual employees; additional compensation, “other bonuses and allowances;" foreign and local travel; fuel, and consultancy services. Ironically, it was Mrs Arroyo herself who launched austerity measures through Administrative Order 103 in 2004. Through the AO, she exhorted all government officials to avoid wasteful spending amid an imminent economic crisis and a widening budget deficit. Malacañang employees say the AO remains in force, citing that at certain times of the day, the Palace household turns off lights and air-conditioning units. The AO directed government agencies to reduce consumption by at least 10 percent of fuel, water, office supplies, electricity and other utilities. As well, agencies were required to install and use energy-efficient lights and fixtures, and to optimize the utilization of internet facilities especially for long-distance communications. Food, fuel, forms and pills But the COA report for 2006 showed that the Office of the President paid out more than P85 million on food supplies, or about P7 million a month. Food supplies account for the highest expense under the “supplies and materials" group. It increased by almost P16 million, compared to 2005. Gasoline, oil and lubricants expenses were worth almost P36 million or almost P3 million monthly. It increased by almost P11 million from 2005. The OP spent more on food and fuel, compared to office supplies, which totaled P21 million in 2006. “Other supplies expenses" that are unspecified were recorded at P31 million. The OP spent P14.5 million on drugs and medicines expenses in 2006, or P1.2 million a month on average. Utilities, communication, repairs Altogether, the Arroyo presidency’s water, electricity and cooking gas bill in 2006 amounted to P84 million, or P4 million less than its total bill for 2005. This means that it paid an average of P7 million monthly for utilities. Electricity consumption accounted for the bulk, at an estimated P65 million or 5.4 million a monthly. The annual bill is still lower by almost P3 million compared to 2005. Water expenses also dropped by more than P1 million but was still recorded at P18.5 million or roughly P1.5 million a month. What the presidency saved in water and electric bills, was eroded just the same by a significant increase in communication expenses. In 2006, this was recorded at P3 million a month on average. The most significant increase was on mobile phone expenses, that rose by P3 million to P11.5 million in 2006, from P8.6 million in 2005. Maintaining and repairing office buildings and other structures; office equipment and furniture; motor vehicles and aircraft cost the presidency P166 million in 2006, up by P61 million from 2005. The bulk of the cost came from the maintenance of aircraft and aircraft ground equipment at P138 million. Whether these equipment exist in fact is hard to establish. The same COA report for 2006, however, took note of a discrepancy between the booked and the physical inventory of these so-called “aircraft and aircraft ground equipment." Austerity? In 2005, Mrs Arroyo listed among her accomplishments the millions of pesos that her administration reportedly saved through the adoption by all government agencies of austerity measures prescribed under AO 103. Yet financial statements for 2005 her office submitted showed the contrary. The presidency’s expenses for 2005, the supposed year of austerity measures, amounted to over half a billion pesos more than that of 2004. The picture is a mix of less and more expenses for various reasons. Mrs Arroyo’s presidency spent significantly more on personal services (PS), less on MOOE, and slightly more on “financial expenses." Her total expenses in 2005 amounted to P2.55 billion, higher than the P2.36 billion in 2006. The financial statements were submitted to the Commission on Audit and are part of COA’s 2006 annual report on the Office of the President. It should be noted that the COA has not spared the presidency measured scolding in a series of qualified reports from 2004. State auditors usually tell off government agencies that might have been spending excessively, or well beyond their budgets. But what is excessive? A ranking COA official said it is up to the state auditor concerned to define if an agency’s expense is excessive, taking into account the particular circumstances of the office. “It is up to the professional judgment of the auditor. We cannot set a uniform rate. Depende sa opisina, titingnan kung ano ang ginagawa ng ahensya na yun. Kung necessary ba yung ginastos," the official said. State auditor Samuel Sison, resident auditor of the Office of the President, declined requests for interviews of GMA News Research. Personal services vs MOOE The bulk or about 77 percent of the presidency’s expenses are attributed to MOOE, and only 23 percent, personal services. MOOE accounts include expenses necessary for the regular operations of an agency including, among others, traveling expenses, training and seminar expenses, water, electricity, supplies expense, maintenance of property, plant and equipment, and other maintenance and operating expenses. Personal services consist of provisions for the payment of salaries, wages and other compensation (e.g., merit, salary increase, cost of living allowances, honoraria and commutable allowances) of permanent, temporary, contractual and casual employees of the government. Curiously, while the bulk of the presidency’s expenses in 2006 fall under MOOE, the increase in the expenditures was attributed to personal services. The 2006 MOOE decreased by 11 percent while the bill for personal services increased by 8 percent. (Table) Bonuses At the very least, Mrs Arroyo seems like a generous employer to her personnel. She paid them more in terms of salaries and bonuses, but also hired additional contractual and casual personnel and consultants. In 2006, she incurred a 46-percent increase in bonuses – or P37.8 million from the previous year – that went to salaries and wages of casual employees. Ironically, DBM guidelines in the preparation of the 2006 agency budget proposals prohibit the creation of additional casual and contractual positions. The presidency reported a P22-million increase in “other bonuses and allowances" and increased byP20 million “additional compensation" or adcom, the P500/month provision covering all national government personnel occupying itemized positions. Against her vaunted austerity program, in February 2006, Mts Arroyo issued Administrative Order 144 granting a P1,000 across-the-board monthly compensation to national government employees, retroactive to January 1, 2006. In issuing the AO, she noted that the total monthly compensation of national government employees has not been increased since July 2001, despite periodic wage adjustments in the private sector and increases in prices of basic commodities. As a Christmas gift, she issued in December 2006 Administrative Order 164 granting a performance bonus of P6,000 to all employees of the national government. The amount is P1,000 more than the P5,000 incentive granted to civil servants in 2005. Again in March this year, Mrs Arroyo issued Executive Order 611 granting a 10-percent increase in the basic salary of government employees. Uniformed personnel were granted a P30 per day increase in their subsistence allowance, and a P120 per month increase in their hazard pay. Just like before, the President noted that the basic salary of government workers has not been increased since July 2001, and cited that the subsistence allowance of the military and uniformed personnel was last adjusted in 1998, while the hazard pay has remained at P120/month since its initial grant in 1987. On account of her issuances, clothing/uniform allowance rose to P4,000 yearly per employee, or a whopping jump of 2,200 percent. Productivity incentive allowance, worth P2,000 per employee, rose 658 percent. Overtime and night pay increased by 504 percent, from P201,805.33 in 2005 to P1.2 million in 2006. AO 103 suspended the grant of new or additional benefits to full-time officials and employees. It also deferred the expansion of offices and creation or positions and ordered the reduction of at least 10 percent in the cost of services of contractual and casual employees. But nothing seems to stop the presidency from spending on what it deems important. Mrs Arroyo, through a presidential issuance, can and has chosen to circumvent the AO. It ordered the adoption of a scheme that will allow employees rendering overtime to be paid through time/days off work instead of overtime pay. Still, it must be stressed that the total amount the presidency spent for salaries and wages decreased in 2006 by P5.8 million. This resulted from a substantial drop in payments for regular (minus P32.8 million) and contractual employees (minus P10.8 million). Salaries and wages for regular employees accounted for 32 percent of personal services. While PS items under "other compensation" increased significantly by P47 million, hazard pay decreased by more than P5 million. Items under "fixed personnel expenditures" decreased, including insurance and Pag-Ibig contributions. With reports from Mary Ann Señir, GMA News Research