Pag-IBIG clarifies COA report on illegal allowances, says that no double payment was made on separation pay

PAG-IBIG FUND PRESIDENT & CHIEF EXECUTIVE Officer, Atty. Darlene Marie B. Berberabe, has clarified that the payment of separation pay to employees who were separated from service with the Fund pursuant to its Board-approved reorganization program is above-board and valid, and does not constitute 'illegal payment' of personnel allowances and bonuses. "The amounts referred to are actually the separation pay under Pag-IBIG Fund's Early Retirement Incentive Plan (ERIP) given to employees affected by our reorganization. These are not additional personnel allowances and bonuses," Atty. Berberabe said

Atty. Berberabe also emphasized that no less than the Governance Commission for GOCCs (GCG) had earlier stated that payments made under the program should not be lumped together with the compensation bonuses and benefits received by Pag-IBIG Fund officers and employees. The GCG made this clarification before the Malacañang Press Corp as early as January 17, 2014 when the issue first cropped up.

The clarification was made after news reports on the Commission on Audit (COA) finding in its 2013 Annual Financial Report of Government-Owned and Controlled Corporations (GOCCs) tagged Pag-IBIG Fund as one of 30 GOCCs that supposedly granted its officers and employees unauthorized allowances and bonuses. "This is actually an old issue that Pag-IBIG Fund has since appealed to the COA. There is here absolutely no issue of unauthorized allowances or bonuses. At issue is the separation pay paid to separated employees of Pag-IBIG Fund pursuant to our restructuring efforts to better service our members and further grow the corporation, a payment that, to stress, Pag-IBIG is empowered to make pursuant to its charter, Republic Act No. 9679, or the "Home Development Mutual Fund Law of 2009," Atty. Berberabe explained.

"Since our appeal of the COA's finding last year, COA has emphasized that its main concern is the alleged double payment of retirement benefits since the affected Pag-IBIG Fund personnel also received their GSIS insurance benefits. This is not the first time, and it certainly is not unusual that COA has questioned us on certain payments made by the Fund, because that is their job. But it is also usual that we are able to thresh out our initial differences in appreciation of issues, and we get positive resolution. As in this case, we have submitted our legal position to COA who we trust will see the legality and propriety of our early retirement plan and the separation pay pursuant to it. We in Pag-IBIG Fund always strive to be in the forefront of good governance and integrity. We will never tolerate a wrong because it will endanger the trust reposed in us by our members," said Atty. Berberabe.

She added, "However, it is clear that no double payment exists here because the GSIS benefits the separated employees are entitled to are pursuant to their membership with and religious payment of insurance premiums to GSIS. In contrast, the separation pay they received from PagIBIG Fund was by virtue of the implementation of a valid reorganization program. This is no different from private companies that implement reorganization measures and pay separation benefits to their employees affected by the restructuring yet these employees remain eligible to receive pension benefits from the Social Security System (SSS)."

The Pag-IBIG Fund Board approved the granting of separation pay as an integral part of PagIBIG Fund's reorganization plan to ensure its success by providing an incentive or motivation for the affected employees to voluntarily retire. The reorganization within Pag-IBIG Fund led to realigning units along functional lines instead of territorial considerations, creating the Home Lending Operations Cluster which focuses on housing services, and the Member Services Operations Cluster which focuses on members' savings generation, frontline servicing, and other client relations activities. The Pag-IBIG Fund network of offices expanded into more but leaner branches, now numbering 75 branches in the Philippines and 21 posts overseas. All of these make Pag-IBIG Fund a bigger GOCC that offers better services through faster operations for its 14.5 million members worldwide.