Gov’t-wide austerity measures enforced

Faced with a widening budget deficit and fears of a fiscal crisis, President Arroyo ordered yesterday a government-wide enforcement of "austerity measures" as she issued a stern warning against heads of offices who would fail to comply.

The President imposed a "strict" adoption of specified cost-cutting measures to generate at least P20 billion in savings for the cash-strapped government.

Her directives apply effectively "to all national government agencies (NGAs) including state universities and colleges or SUCs, government-owned and controlled corporations (GOCCs), government financial institutions (GFIs) and other government corporate entities (OGCEs) and their subsidiaries as well as other instrumentalities under the executive department — whether or not they receive funding support through the General Appropriations Act, or the national budget.

"Heads of NGAs and SUCs as well as the governing boards of GOCCs, GFIs and OGCEs shall be responsible for the strict implementation of Memorandum Order No. 20 dated June 25, 2001. Any violation thereof shall be dealt with accordingly," the President said in Administrative Order 103.

MO 20 requires the rationalization of the salaries and other fringe benefits of top executives and board directors in all GOCCs, GFIs and OGCEs.

Under this order, the highest paid executive must not receive more than P100,000 a month.

The President signed AO 103, called "Directing the Continued Adoption of Austerity Measures in the Government," last Aug. 30, a copy of which was obtained by The STAR yesterday.

"The legislative and judicial branches of government as well as agencies vested with fiscal autonomy such as constitutional commissions and local governments are strongly urged to adopt the provisions of this order," Mrs. Arroyo stated in AO 103.

Under this order, the President reminded all local government units (LGUs) to adhere to prescribed limits on personal services expenditures as stated in the Local Government Code.

LGUs are also to maximize the utilization of 20 percent of their internal revenue allotment for development projects.

The President cited in AO 103 that consistent with the government’s rationalization policy, the provisions of Republic Act 7430 or the Attrition Law would be strictly implemented "with certain exceptions... until lifted by the President."

The Attrition Law prohibits the filling up of positions in government that have been vacated by reason of resignation, retirement, dismissal, death or transfer to another office.

Also, the President directed all NGAs, SUCs, GOCCs, GFIs and OGCEs to limit the grant of honoraria and other forms of allowances "whether exempt from the salary standardization law or not."

"For other non full-time officials and employees including members of their governing boards, committees and commissions: (i) suspend the grant of new or additional benefits such as but not limited to per diems, honoraria, housing and miscellaneous allowances or car plans; and (ii) in the case of those receiving per diems, honoraria and other fringe benefits in excess of P20,000 per month, reduce the combined total said per diems, honoraria and benefits to a maximum of P20,000 per month."

In the same AO 103, the President ordered the adoption of a scheme that will allow employees rendering overtime to be compensated through days off from work in lieu of overtime pay in accordance with the guidelines to be issued by the Department of Budget and Management and the Civil Service Commission.

Cost-cutting measures also included previously announced austerity directives such as suspension of the following:

• All foreign travels except for ministerial meetings, scholarships/ trainings that are grant-funded or undertaken at no cost to the government.

• All local travels unless urgently necessary and followed by the secretary or the head of the SUC, GOCC, GFI or OGCE.

• Purchase of any type of motor vehicles except ambulances and those required by the military and police.

• Paid media advertisements except those required in the issuance of agency guidelines, rules and regulations, the conduct of public bidding and the dissemination of important public announcements.

• Conduct of training, seminars and workshops except if funded by grants or if the cost may be recovered through exaction of fees.

• Expansion of organization units and/ or creation of positions except those following the "scrap and build" policy or matched by the deactivation of existing units/ positions of the same cost;

• Conduct of celebrations and cultural or sports activities not related to the core function of the agency except athletic competitions conducted by public schools or SUCs.

• Donations, contributions, grants and gifts except if said activities are undertaken pursuant to the mandate of the donor agency. — Marichu Villanueva