October 10, 2023
Dear Joseph Gorospe,
Greetings!
Thank you for your request dated Sep 18, 2023 11:19:40 AM under Executive Order No. 2 (s. 2016) on Freedom of Information in the Executive Branch.
Your Request
You asked for Inquiry on coverage of GAA prescribe limit on NTHP for Barangay honorarium.
Response to Request
This pertains to your query on September 18, 2023 through the electronic Freedom of Information (eFOI), to wit: “May we know if the Honorarium received by Barangay Officials are also subject to the limits/minimum Net Take Home prescribed by the [General Appropriations Act] GAA for the purpose of loan applications of the elected and coterminous [sic] officials.”
At the outset, allow us to note that the reference to the minimum net take-home pay (NTHP) is under Section 56 of the General Provisions (GPs) of the FY 2023 General Appropriations Act (GAA), Republic Act (RA) No. 11936 which sets the monthly NTHP to PhP 5,000, to wit:
“Sec. 56. Authorized Deductions. Deductions from salaries and other benefits accruing to any government employee, chargeable against the appropriations for Personnel Services, may be allowed for the payment of an individual employee’s contributions or obligations due to the following:
(a) The [Bureau of Internal Revenue] BIR, [Philippine Health Insurance Corporation] PhilHealth, [Government Service Insurance System] GSIS, and [Home Development Mutual Fund] HDMF;
(b) The National Government, as decreed in a final and executory decision of [Commission on Audit] COA;
(c) Non-stock savings and loans associations and mutual benefit associations duly operating under existing laws and cooperatives which are managed by and/or for the benefit of government employees;
(d) Associations or Provident Funds organized and managed by government employees for their benefit and welfare;
(e) [Government Financial Institutions] GFIs authorized by law and accredited by appropriate government regulating bodies to engage in lending;
(f) Licensed insurance companies; and
(g) Thrift banks or rural banks accredited by the [Bangko Sentral ng Pilipinas] BSP.
xxx
In no case shall the foregoing deductions reduce the employee’s monthly net take home pay to an amount lower than Five Thousand Pesos (P5,000).” (Emphasis supplied)
However, it should be noted that the aforesaid GP should be in consonance with Section 54 of the GPs of the FY 2023 GAA, RA No. 11936, to wit:
“Sec. 54. Appropriations for Personnel Services. The appropriations for Personnel Services under this Act shall be used for the payment of personnel benefits authorized by law to be given to National Government personnel. Any available allotment for Personnel Services within a department or agency may be utilized by said department or agency for the payment of deficiencies in authorized personnel benefits. xxx"
Thus, the definition of the NTHP mentioned under Section 56 can be limited to appropriations for Personnel Services which are funded under the GAA of the National Government.
Meanwhile, Item 3.2.1 of the Manual on Position Classification and Compensation (MPCC) defined Total Compensation as the representation of all financial and non-financial rewards and entitlements arising from employment relationship.
Moreover, it is to be emphasized that the bulk of the compensation of barangay officials and functionaries, except those holding regular positions, is in the form of honoraria. More importantly, the benefits accorded to barangay officials in accordance with Section 393 (a) of the Local Government Code (LGC) of 1991 (RA No. 7160) is, as follows:
“SECTION. 393. Benefits of Barangay Officials. - (a) Barangay officials, including Barangay tanods and members of the Lupong Tagapamayapa, shall receive honoraria, allowances, and such other emoluments as may be authorized by law or Barangay, municipal or city ordinance in accordance with the provisions of this Code, but in no case shall it be less than One thousand pesos (P1,000.00) per month for the Punong Barangay and Six hundred pesos (P600.00) per month for the Sangguniang Barangay members, Barangay treasurer, and Barangay secretary: Provided, however, that the annual appropriations for personal services shall be subject to the budgetary limitations prescribed under Title Five, Book II of this Code.” (emphasis supplied)
It bears noting that Local Budget Circular (LBC) No. 63 dated October 22, 1996 prescribed the guidelines for the position classification and compensation of barangay officials and personnel.
Item 3.4 thereof stipulates that barangay tanods and members of the Lupong Tagapamaya may be granted honorarium, allowances or other emoluments provided the total amount shall not exceed the minimum salary rate for Salary Grade 1.
Moreover, Item 3.5 of the same Circular provides that the honorarium/salary rates shall be in accordance with the salary schedule being implemented by the city or municipality where the barangay is located, as authorized under the implementing rules of RA No. 6758.
Meanwhile Section 306 (k) of the LGC defines Personal Services (PS) as “appropriations for the payment of salaries, wages, and other compensation of permanent, temporary, contractual, and casual employees of the LGU.”
Furthermore, Part 2 of the Local Expenditure Program on page 79 of the BOM for LGUs, 2023 Edition, lists honoraria under PS as an Object of Expenditure.
Thus, it is noted that honoraria/honorarium, as compensation for barangay tanods and members of the lupon, is part of the PS of barangays.
Under sub-paragraph 3.1 of LBC No. 63, it reiterated the basis of the maximum honorarium rates for barangay officials.
In relation, sub-paragraph 3.3 of LBC No. 63 states that “Positions other than those for the mandatory barangay officials may be created in the barangay and may be compensated in the form of salary or honorarium at the discretion of the barangay government concerned xxx”. (emphasis supplied)
It should be noted that positions compensated in the form of salary shall be allocated to their proper position titles and salary grades in accordance with the revised Index of Occupational Services, Position Titles and Salary Grades under LBC No. 61.
In this regard, we wish to underscore that the salaries and other benefits provided under Sec. 56 of the FY 2023 GAA, RA No. 11936 does not fall squarely to the compensation being received by barangay personnel. Considering the foregoing, the application of the foregoing provision depends on whether the barangay personnel is receiving salaries in which case the deductions to be made therefrom shall be subject to minimum NTHP conditions.
Notwithstanding the foregoing, we likewise respectfully suggest to seek the opinions of the Civil Service Commission being the government’s central personnel agency, and the Commission on Audit since this primarily involves government funds and to ensure that its release and utilization are in accordance with existing accounting and auditing rules and regulations.
We hope to have addressed your query satisfactorily. Thank you and best regards.
Respectfully,
Local Government and Regional Bureau
FOI Receiving Officer
