By Merlina Hernando-Malipot
The Department of Education (DepEd) reminded its personnel of the “consequences” of applying for loans with lending institutions as it announced the implementation of the P5,000 net take home pay (NTHP) for fiscal year (FY) 2019.
Education Secretary Leonor Briones
(DepEd / MANILA BULLETIN)
Education Secretary Leonor Briones, in DepEd Order No. 14 s. of 2019, issued the guidelines for the implementation of the P5,000 NTHP relative to the issuance of Republic Act No. 11260 or General Appropriations Act (GAA) for SY 2019.
These guidelines, Briones said, will “provide procedures for the proper implementation and compliance with the applicable provisions of the FY 2019 GAA” and veto message of President Rodrigo Duterte – in connection with the Automatic Payroll Deduction System (APDS) Program of DepEd.
Citing Section 52 of the 2019 GAA, DepEd said that the President’s veto message noted that “financing companies and other similar entities that have authority to engage in lending and mutual benefits or mutual aid system as stated in their respective constitutions and by-laws approved by the government regulating bodies” among authorized deductions are “vetoed for lack of legal basis.”
DepEd noted that while the President recognizes the “advantage” afforded to government employees in authorizing agencies to deduct the amount of their contributions and obligations to financing institutions, “the government should not be reduced to a collecting agent of these institutions.” As such, he directed the conditional implementation the authorized deductions.
Given this, Briones – in the DO 14 s. of 2019 – stressed that the NTHP threshold is “mandatory.” Thus, “any financial contribution incurred by any personnel shall not be deducted from his/her monthly salary if such deduction will lower his/her NTHP beyond the P5,000 threshold.” DepEd also stressed that “no waivers effectively reducing the NTHP shall be allowed.”
In relation to this, Briones also reminded all DepEd personnel of the “consequences” of applying loans with lending institutions – noting that “delay in the payment of loans may result in the imposition of penalties and accrued interests” by the Government Service Insurance System (GSIS), Home Development Fund (HDMF), other government financial institutions, and private lenders.
“DepEd personnel whose loans are not deducted under the APDS are advised to pay their loans directly to their respective lenders,” Briones added. DepEd noted that at least 16 financing companies are affected by the implementation of the P5,000 NTHP for its personnel for FY 2019.
Teachers’ Indebtedness
Earlier, Briones cautioned against making “knee-jerk and unstudied correlation” between teachers’ salary levels and their indebtedness.
Citing a study by Dr. Rosario Manasan, Briones noted that in the 2015 Family Income and Expenditure Survey – it was found that “public school teachers have a higher propensity to borrow than other similarly situated individuals.”
In Manasan’s study, Briones said that it was found out that “57.9% of households with a DepEd teacher had outstanding loans, compared to only 26.8% of households with a private school teacher” while “33% of households with at least one government worker other than a public school teacher, and 22.2% of households with at least one private sector worker, had outstanding loans.”
Briones said that the tendency to “max out” the borrowing space also cuts across salary grades (SG). “There are Teachers I (SG 11, with monthly basic pay of P20,754) and Master Teachers I (SG 18 with monthly basic pay of P40,637) who receive only the minimum monthly net take home pay of P5,000 because of deductions for loan repayments,” she said. “But there are also teachers across various SGs who get higher take-home pay because they borrow less,” she added.
Predictably, Briones noted that “those with low net take-home pay will feel they are underpaid, even if their situation is a result of their personal financial decisions.”
Briones also noted that the estimated debt of teachers – both to GSIS and accredited private lenders – is now at P319 billion. She explained that this has “increased by P18 billion from the reported P301 billion two years ago.”
In an effort to help teachers who are struggling with financial issues, Briones said that DepEd is “deepening” its “study on public school teachers’ debts.” This, she noted, is “to understand the issue better, to introduce reforms to address the situation and to help ensure that teachers will benefit more from any salary increase.”