In a city filled with advancement, one thing is still left behind. The Local Government of Makati, claiming as the center of finance and business in the country, the payroll of its employees are still in the old fashioned envelope.
All Local Government Unit in the Metro is already using the digitized payroll system except for one–Makati City. Knowing that Makati leads the country’s economic growth, contrary to its current status as the country’s financial district, its payroll system has not yet been updated.
Makati City has been subjected to questioning and criticisms when the Commission on Audit (COA) reported that the city government has been paying its 9000 employees with hard cash enclosed in an envelope.
National Payroll System
In September 2012, it has been announced that, starting with the Department of Education, the National Covernment will be implementing the National Payroll System (NPS) as ordered by President Aquino. This was to resolve the issue on the nonpayment of GSIS premiums for the teachers. Through the NPS the salary of the employees will go directly into their ATMs and their GSIS contribution will automatically be deducted.
In July 2013, the NPS is already up for testing. The National Government and the Department of Budget and Management are really pushing through this new payment system for the government for transparency. This will also give more credibility to the Philippine bureaucracy. The NPS, aside from automating the employees salary, this will also efficiently process the withholding fees to the Bureau of Internal Revenue, as well as the benefits mandated by the government like the Government Service Insurance System, Pag-ibig Fund, and PhilHealth.
“As a fully automated and digitized system, the NPS will play a central role in ensuring greater efficiency, transparency, and accountability in the government’s human resource processes. And because the system will be completely electronic, all payroll-related activities will be implemented more quickly and with better accuracy, whether we’re talking about the distribution of monthly salaries due to government workers, or the regular monthly remittances that are made out to our employees’ social security and health insurance accounts,”
Budget and Management Secretary Florencio “Butch” Abad (Source)
Disadvantages of the Old Payroll System
“The COA cited several drawbacks to Makati’s archaic payroll system, such as high risk of loss or misapplication; disbursing officers exceed their maximum cash accountability; and loss of man-hours for employees who leave their work stations to go to City Hall to get their salaries and then go back to their posts; long lines to the teller’s booth; and the distribution of money to 4,024 regular employees and 4,794 casual employees every pay day.”
Reported in the Philippine Daily Inquirer
One of the big advantages of Makati’s payroll system is the irregularities in the release of the employees salaries and the existence of the ghost employees. With the numbers mentioned above, how many of these employees are subject to corruption and irregularities. It has been rampant in the Philippines bureaucracy that even the lowest public official has a ghost employee included in their payroll.
Ghost Employees and Irregularities in the Payroll System
In July 2012, two Quezon City councilors were suspended over almost 60 ghost employees included in their payroll system. According to the reports, these employees were paid from P2,500 up to P5,000 a month.
In July 2013, COA questioned the Local Government of Mandaluyong for the 371 casual employees with a payroll amounting to Php42.86 million. As reported in the Philippine Daily Inquirer, the city’s human resources management department (HRMD) head said her office had no idea that the names of the casual employees did not appear in their central information system.
One of the purpose of the NPS, aside from speeding up the payroll system of the government employees, is to eliminate corruption through the “Ghost Employees” and to prevent other payroll-related irregularities in the system.
ATM Payroll System
The payroll accounts of the government employees will be distributed through an Automated Teller Machine (ATM). Government banks will like the Land Bank and the Development Bank of the Philippines (DBP) are the servicing banks for the new payroll system. In the absence of these banks in the area, the payroll system will be done through other banks present.
It is quite hard to figure out why Makati, being the central business district of the Philippines, where all the banks have their branches, is still doing the old payroll system.
Loopholes can be seen in the reasoning of the Makati LGU. Makati Public Information Officer Joey Salgado said that they have been working on the ATM system since the 1990s. But then, the other cities and municipalities are already ahead of them when it comes to the payroll systems. Salgado said that the delay of the ATM system is because of the repeated changes at the top in the personnel department. Makati is not the one that holds the largest number of employees in Metro Manila. If Quezon City, which hold the largest number in its payroll with 13,477 employees (according to a separate annual report by COA in 2012), it shouldn’t be a big challenge for Makati to upgrade their payroll system.
Salgado also said that they are already in talks with other banks and that they are looking for the best offer. But in the statement of DBM, the Land Bank and the Development Bank of the Philippines (DBP) should be prioritized and other banks will only be considered in the absence of the two government servicing banks. Land Bank and the Development Bank of the Philippines (DBP) is clearly visible in Makati and there is no reason for the Makati LGU to deal with other banks and look for the best offer.
Salgado hopes that the new NPS will be implemented this year. But looking at the irregularities present in his statements, the new NPS may be delayed or may not be implemented at all.