Tuesday, November 06, 2007

Overpaid Janitors, Underpaid Executives

A remarkable entry in Manolo Quezon's blog entitled "On Official Allowances" discussing the salaries of our government officials before the Second World War (1939-1940) was truly insightful and informative. My grandparents and other relatives who lived before the war used to tell me that Filipino politicians were not always corrupt and that once upon a time, public servants were looked up to as paragons of virtue in their respective localities. I used to take these tales with a grain of salt: it was probably because in those simpler days Philippine media was not as vigilant or maybe Filipinos were not yet as jaded as today's public. But after reading Manolo Quezon's entry, I am convinced that maybe Filipino politicians were not always as crooked as they are today.

According to Manolo, the annual salary of the President of the Philippines then amounted to P30,000 which, translated into present day terms amounts to roughly P10 million. The Speaker of the National Assembly got P16,000 a year (about P5 million today) while Assemblymen received P5,000 (about P1.5 million a year). Even more interesting are the salaries of low-ranking public servants: a government chauffeur earned P720 which computed to today's rates is roughly P240,000 a year (that's P20,000 a month) while a messenger got P480 or P160,000 a year (that's P13,000 a month). Middle-ranking managers in government like a "Legislative Assistant" or "Administrative Assistant" received P6,000 a year which, translated into present-day terms equals P2 million a year (or P160,000 a month). In other words, Philippine government employees before the War were adequately compensated and it was most likely that since they are well-paid, corruption in government virtually did not exist then. Well, at least not in "epidemic" proportions that it is now. Since they were more than adequately compensated, any public official caught stealing then would have faced universal condemnation by the public.

Today, the Philippines is widely-known to be one of the most corrupt countries in the world. Graft and corruption is universally accepted by ordinary Filipinos as already part and parcel of governance. When news of the NBN scandal and the Palace payola broke out several weeks ago, “so what else is new?” seemed to be the common reaction of people. Despite the dizzying bribe figures mentioned by whistleblower Joey de Venecia and “mestizo whistleblower” Romulo Neri, most people I know seem to have adopted a lackadaisical attitude towards this latest corruption scandal to hit the Arroyo administration. People also claim they knew all along that pay-offs happen in Malacañang and some just make light of the situation by saying that Malacañang should be renamed "May-lagay-dyan" Palace.

While corruption scandals involving Cabinet secretaries and congressmen merit front-page treatment, I suspect that many more graft and corruption incidents go unreported or undiscovered by media. When you are ranked 131st most corrupt out of 180, this indicates that graft is systemic, endemic even, and not only limited to the upper echelons of government. It already means that almost everyone steals or can be bought. Price tags range from P200 million for Cabinet Secretaries (if you believe Sec. Romulo Neri) to P2 million for Congressmen (if you believe Rep. Crispin Beltran) down to P200 for traffic aides. The big steal big and the small steal small; everyone tries to steal whatever he can. And ordinary Filipinos seem to have already given up hope on their government and have seemed to accept as fact the truism that anyone occupying Malacañang will be corrupt. Those who are now professing to slay the ogre will be ogres themselves once they hold the reins of power. Graft and corruption in the Philippines has grown to hydra -like proportions and no one seems to have a clear idea on how to slay the beast.

To me, the solution to curbing graft and corruption is so obvious and so simple - raise government salaries. Everybody knows that salaries in government are ridiculously low. How low? According to a World Bank-funded study by the Civil Service Commission (CSC), government executives (i.e. regional directors, undersecretaries, bureau heads, etc.) earn only 26% of what an executive in a medium-sized corporation receives while professionals (i.e. lawyers, doctors, accountants, engineers, nurses, etc.) get only 60% of what their counterparts in the private sector get. Surprisingly, the study found out that administrative staff (i.e. clerks, receptionists, messengers, janitors, etc.) are getting 20% more than the salary of their counterparts in the private sector. In other words, low-ranking government workers are overpaid while those in the top positions are underpaid. The same CSC study also concludes that the higher you go in government, the more underpaid you become.

No wonder our government officials are corrupt. Give a person power sans the commensurate compensation and you can be sure that he will use that power to "adjust" his take-home pay to more appropriate levels or he will look for "alternative" sources of livelihood. And by "alternative," I don't only mean bribe money. Some government executives teach part-time in the local college, sell insurance or put up a small sari-sari store, etc. just to make ends meet. Some even drive a taxi, like the late Police Supt. Joven Bocalbos (read this Inquirer story "Makati No.2 Cop Shot Dead"). While I find it easy to hate congressmen, Cabinet officials and other already-rich fellows caught stealing from government, I sometimes pity those traffic aides (estimated gross salary: P5,000 a month) caught mulcting some hapless driver or a lowly government clerk (estimated gross salary: P12,000 a month) receiving a P500 bribe from some small-time businessman. Sometimes it is hard to get angry at these people knowing that their salaries are so low that they need to work "extra" just to feed their families. I sometimes wonder what became of Bocalbos's children - who's feeding them?, are they still in school? - and at times think he was a buffoon for driving a taxi when there are many more ways of "earning" money as the No. 2 policeman in the Philippines' richest city.

During the pre-war years, our middle-ranking government executives took home P160,000 a month. Today, a bureau director (which under our heavily politicized system is the highest position a career government professional can hope to aspire to) earns a little over P20,000 a month. The present government wage structure was laid down almost 17 years ago by the Salary Standardization Law (which, if I remember correctly, was authored by then-Senator Ernesto Maceda). The intention of the law to standardize salaries in government was noble but, whether it intended to or not, has resulted in the present anomaly of overpaid janitors and underpaid executives in government. It has also encouraged mediocrity and discouraged talented individuals from staying on in public service. By keeping their salaries low, I believe the SSL has pushed countless government officials to become corrupt.

There are currently several bills in Congress which seek to increase the salaries of our government workers foremost of which is the "Government Classification and Compensation Act." The bill, which was drafted with the help of CSC, aims not only to increase wages but also address the asymmetries in the present government wage structure. First, GCCA will bring the salaries of government executives from 26% to within 68% of market rates (the CSC benchmarked the proposed salary structure to medium-sized companies in the country). Government positions will be divided into 22 ranks, the lowest being Job Grade 1 (JG 1) and the highest Job Grade 22 (JG 22). Low-ranking government positions (JG 1 to JG 5) will have basic monthly salaries ranging from P7,540 up to P14,618. Mid-ranking employees (JG 6 to JG 12) will get salaries ranging from P19,004 up to P46,301 while career executives (JG 13 to JG18) will have salaries ranging from P60,191 up to P115,893 a month. High-ranking government officials i.e. Cabinet Secretaries, congressmen, SC justices, etc. (JG 19 to JG 21) will receive from P99,847 to P125,247 a month while SG 22, which is reserved for the President of the Philippines, will receive a basic remuneration amounting to P140,277 a month (see the Proposed Base Pay schedule here).

The GCA will not only upgrade how government compensates its employees but will also overhaul its rules on promotions and bonuses. Under the proposed law, promotion will now be "performance-based" - for example, GCCA law stipulates that an employee shall get a 7.5% increase only if he/she performs well (with the criteria for performance to be developed by their respective bureaus with the help of CSC). Grant of benefits and other incentives will also be contingent on performance of both the agency and the individual, not only on the person's length of service in government.

Many observers predict that the bill will face rough-sailing in both Houses of Congress. For one, the public is in no mood to grant civil servants a salary increase considering the quality of service they have been getting from their government. Also the Chairman of the Civil Service committee in the Senate, Senator Antonio Trillanes, is presently in jail. Up to now, he has not been allowed to schedule public hearings (even in his jail cell as he requested) on the said bill. And even if, by some miracle, he is able to pass the bill in the Senate, pundits say that President Arroyo is not about to allow her nemesis to gain political capital by allowing him to claim authorship of a bill which has raised salaries of government employees. Of course, the Senate can always replace Trillanes or he can maybe allow his vice chair to hold the hearings. But I don't think Senate President Villar will do that. And I don't think Trillanes will allow that - this important piece of legislation can arguably be his ticket out of jail.

With the bill in political limbo, the only solution I can see is for President Arroyo to push thru with the salary increase via an Executive Order. That way, she gets the political credit all to herself. With the fiscal reforms in place and economic stability, I believe our government can now afford to give our civil servants a much-needed raise. I heard that the Department of Budget and Management (DBM) will be implementing a 10% increase starting this year but this will still be miniscule compared to wide-ranging reforms that the GCCA hopes to achieve. For now, government employees can only dream and hope for some miracle to happen (i.e. President GMA allowing Trillanes to conduct hearings).

Raising the salaries of our government workers is an important step towards curbing graft and corruption in our country (Note: I'm using the word "curb" here and am not even talking about eradicating corruption) for I sincerely believe that the typical rank-and-file government employee will not go through the trouble of stealing if compensated properly. As of now, fighting corruption in this country where government officials earn less than a fraction (25% to be exact) of what their counterparts in the private sector get is an impossible task. I am sure the Ombudsman today feels a lot like Eliot Ness during the Prohibition - understaffed, underfunded and fighting a hopeless, pointless battle. Random lifestyle checks may put to jail a few crooks but it will not arrest the rising tide of corruption. It is only when you pay government people enough to live decently can you expect them to do their jobs properly. If salaries in government are high enough, perhaps Filipinos in the future will be pissed off about corrupt government officials and do something about them for a change.


MLQ3 said...

actually, if you read the prewar media, when it got critical, today's media would look quite tame. this is actually what i tell some people who ask me how i can write so critically of the president -i tell them, there's nothing i've ever written, that exceeds anything written against my grandfather in the media of his day.

Oliver M. Mendoza said...

Yes Philippine media even then has taken an "adversarial" role towards govt officials. MLQ may have been called a lot of things in his day - extravagant, dictatorial, a ladies' man - but being corrupt is not one of them. His P10 million salary was more than enough to allow him to live comfortably and a proud man like Quezon I believe would simply find it too much of a bother to think of stealing money from government.

The more I read about our history, the more I am convinced that our politicians are becoming smaller and smaller. The day of visionary statesmen are gone, what we have left are narrow-thinking individuals concerned about the next elections and were to get the money to ensure their wins. BTW I would be very interested to know if you have some historical data on how parties then raised campaign funds? I think it would be another interesting subject and would help enlighten your readers.

MLQ3 said...

oliver, i'm working on a theory on that...

the basis is laid out by an american politician, here:


I think this is precisely the kind of politics that was adopted, give or take, prior to the war.

Oliver M. Mendoza said...

thanks for the info Manolo. appreciate it