Fat salaries, big allowances, and other perks of lawmaking

Our latest series summarizes some of the key findings of a two-year-study conducted by the PCIJ on Philippine legislatures which are published in an upcoming book called, The Rulemakers: How the Wealthy and Well-Born Dominate Congress.

Congress has remained a notoriously unaccountable institution, its members flouting government auditing rules. As Part Three shows, congressmen actually earn much more than what most Filipinos think. The take-home pay of each representative is close to P250,000 every month. Most of that is tax-free.

Senators in session

Senators in session

CONGRESS formally opened on July 23, 2001, when his secretary handed him the cash equivalent of his very first paycheck as a member of the House of Representatives.

The legislator had not looked at the amount on the check when he asked his secretary to cash it for him. Like most members of the public, he had assumed lawmakers aren’t paid all that well.

But his secretary had returned from the bank with a bulging envelope, and when the congressman counted its contents, he was astounded: The total amounted to P247,500.

“Why is this so much?” he recalls asking his secretary. She replied that although his salary was actually just P26,000 a month after taxes, there was also an “allowance” for his trips back to his district, plus other sums meant to cover the rent of a house in Manila, consultations fees, and research expenses. He was getting all these at one go.

The secretary also told her incredulous boss, “If you don’t want to spend it, that’s up to you. You don’t have to account for it.”

But that was only the beginning. More money would be coming his way fairly regularly, leaving the congressman with the surprising realization that he was practically rolling in cash. He has since realized that the salary and perks he gets can match those of executives in medium to large companies. But legislators are even better off than most business executives: Only a fraction of their monthly take – the P35,000-basic monthly salary – is taxed. All the rest is not. It is public money spent much like personal funds.

The entitlements to public funds and the lack of financial accountability of members of Congress have long been a source of real worry to the public and even to sectors within the government. Even though the average legislator is already wealthy, he is assured that such wealth would not be diminished by his years in public service.

From the Eighth to the 10th Congress, each lawmaker received a basic salary of P17,000 a month, or P204,000 a year. The basic pay has since been adjusted twice: to P26,000 a month in 1998 and to P35,000 the following year. Yet just by being present at the plenary hall can already earn a congressman thousands more as “appearance fee.”

What a Representative Can Receive

Salary P35,000 a month
Published expenses P200,000 a month
Allowance from the Speaker P50,000-100,000 a month
Christmas gift from the Speaker P100,000-200,000
Occasional gift from Malacañang (Christmas) P100,000-150,000
Election for the speakership as much as P200,000
Attendance in a plenary session to vote on selected national bills P50,000 (can go up to 500,000 for urgent, controversial measures)
Special occasions (e.g. barangay elections) P50,000
Foreign travel $300 per diem
As officer or committee chairman Varies, depending on expenses
Pork barrel (Priority Development Assistance Fund and Public Works Fund) P65 million a year

*Salaries are fixed by law. Foreign travel per diem is set by the House leadership. Pork barrel fund is fixed by the General Appropriations Act. The other amounts are based on interviews with former and current congressmen and House staff members.

A congressman can also count on other sources of funds, including the House speaker himself. Bills incurred as a result of official activities, including trips abroad, are footed by the government as well.

Government auditors point to two provisions in the General Appropriations Act (GAA) that, when invoked, often unleashes a flood of money headed straight into the pockets of legislators and their staff. As a result, what congressmen and their personnel take home are way above the published amounts of what they are supposed to be receiving.

One of these provisions authorizes the Senate president, with respect to the Senate and the Commission on Appointments, the speaker, with respect to the House of Representatives, and the respective chairmen of the Senate and the House electoral tribunals “to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.”(Without this provision, such acts would be tantamount to fund juggling, according to government audit rules.)

The other provision authorizes the same set of congressional officials “to formulate and implement the organizational structures of their respective offices, to fix and determine the salaries, allowances, and other benefits of their respective members, employees and consultants… and whenever public interest so requires, make adjustments and reorganization of positions in the regular personnel with the corresponding transfer of items of appropriations or create new ones in their respective offices…”

Although the two provisions have never been vetoed, they have always merited special mention as one of the “observations” in the president’s veto message. Without fail, the president each year has had to affirm his or her trust that the leadership of Congress would “faithfully observe, particularly on the aspect of compensation, the letter and spirit of the constitutional principle of salary standardization which Congress itself enshrined as a state policy” and ensure that its operations are “circumscribed by the salary rates, allowable level of allowances and other benefits prescribed or authorized by law.”

Indications are that Congress leaders pay little heed to this declaration of trust. According to some observers, part of the reason for this is because they are too busy trying to run a fractious House of Representatives.

The speaker himself has to find ways to please members of the House in order to remain in power. One legislator’s chief of staff even says that one of the first perks a congressman gets is a “payoff” during the race for the speakership. In one previous contest, sums reached as high as P200,000 for every vote, discloses the legislative staff member.

And once the speaker is in place, more money begins pouring out of the so-called speaker’s discretionary fund.

Sources of the fund are said to include items in the House budget, such as its savings, although the money can come from elsewhere. Drawn from it are sums for the Christmas and other bonuses of congressmen, as well as their monthly allowances, which supposedly vary in amount, depending on the legislator’s closeness to the speaker.

Congressmen who do not belong to the ruling coalition and party-list representatives are said to receive P50,000 a month, while “favored” congressmen reportedly get double or even triple that.

As with the other money that comes their way in Congress, there is no need to liquidate any amount coming from the fund. This is even though Article 25 Section 6 of the Constitution provides that “discretionary funds appropriated for particular offices shall be disbursed only for public purposes to be supported by appropriate vouchers and subject to guidelines as may be prescribed by law.”

The speaker’s fund is nothing new. In the 1960s, its size was estimated to be equivalent to the total budget for the House of Representatives minus those for salaries and personnel. Today, it is believed to be roughly equal to the total budget for the House of Representatives minus those for salaries and personnel and regular expenses of its members and committees. Although the exact amount is hard to estimate, the fund could easily be in the hundreds of millions.

Aside from the monthly allowance, congressmen also receive a bonus from the speaker before the Christmas break. This ranges from P100,000 to P200,000. (Occasionally, legislators receive a Christmas bonus from Malacañang or a business tycoon.) Another bonus lands on their laps before they go into a long recess.

The idea, say legislators, is so they would have something to spend in their districts during the long vacation. A party-list representative says, “I accepted the regular Christmas gift and gave it to my constituents.”

The party-list representative recalls that they were initially left out of the speaker’s list in the 11th Congress and had to demand their inclusion among the beneficiaries of the allowances. Some succeeded in getting paid on a cumulative, retroactive basis, the legislator adds.

One young congressman says he takes what the speaker offers, but he says he had to do some soul-searching in the beginning. “What we have is an underground governance structure,” he says. “Congress is largely a private-based sphere where you outsmart the system of laws. Gift giving validates the fact that nakisama ka (you tried to be with the group). Every congressman expects bonuses. You walk the tightrope daily. You have to know if you should succumb.”

The representative justifies accepting money from the Speaker’s discretionary fund, saying members of the House spend from 50 to 80 percent of their time in their districts. “I have a big overhead,” he says, pointing out that he has a staff of three at his central office and even more in the district.

A chief of staff who has had various lawmakers as boss also talks of “constituents who look at congressmen as if these were bank on wheels, ATM machines.” Fiesta time alone can be very expensive, he says, noting, “If you have 300 barangays, you give P5,000 per fiesta, that’s P1.5 million a year. And even then they’d curse you and call you a skinflint.”

Some of those who expend a lot of effort getting into “choice” congressional bodies also cite their need to fulfill their constituents’ demands as their main motive for a committee seat.

Take Iloilo Rep. Augusto Syjuco, who chose to be the vice chairman of the subcommittee on agriculture of the committee on appropriations rather than chairman of the agriculture committee in the 12th Congress. Syjuco says the subcommittee on agriculture is powerful because it has influence in the 29 agencies of the Department of Agriculture. That means his constituents would be better served, he says.

“Sa ‘yo dumadaan ang pera; binibigyan ka ng proyekto (The money goes through you, you get the projects),” he explains. “As vice chair, I could get about P200 million a year (in projects) for my district; as agriculture committee chair, I could bring home at most P100 million a year.”

But many observers and House insiders say legislators are also enticed by the more personal benefits of congressional committees. According to several members of the House, a congressman can draw about P20,000 to 30,000 more for expenses each month as chairman of a committee. The chairman of the powerful appropriations committee is said to draw an even bigger amount.

The appropriations committee is one of the most contested bodies in the House. The others, says a two-term congressman, are the committees on ways and means, accounts, franchises, games and amusement, and transport and communication. Their attraction lies not only in the extra allowances of the chairmen – as well as the members – but also in the other perks, most of which are monetary in nature, too.

The committee on public works and the subcommittee on public works of the appropriations committee are on equal footing, though. Many congressmen strive to get into the committee or the subcommittee not only for the projects for their districts, but also for the contracts they can lay their hands on, says a chief of staff of one congressman. More than half of representatives are engaged in property development and real estate, and a tenth in construction. The contracts they get can only assure business for their firms.

Also coveted are slots in the committee on transportation and communication and the committee on games and amusement. Both screen applications for franchises, some of them involving millions of pesos.

It is no wonder then that P50,000 is sometimes not enough to lure congressmen to the session hall whenever an important bill is tabled for voting. Apparently preoccupied largely with local interests, few legislators show up to constitute a real quorum in plenary sessions. This has forced the speaker to occasionally resort to giving “appearance fees” to those who attend and stay long enough to be counted.

A quorum is needed to pass a bill or vote on a resolution. There is a quorum only if there is a majority of House members present, or a minimum of 115 congressmen. But Syjuco says, “We have the worst quorum problems in the House now. Sometimes they even list as present those who are not there. They are listed as present even when they had already left.”

A potential lack of quorum is feared most by the House leadership when it is time to vote on important bills of national application, such as those on the budget, absentee voting, power reform, money laundering, and electoral reform. “To be credible,” says the party-list representative, “these measures have to be passed with a real quorum.”

Yet even with the promise of a P50,000-fee, many congressmen still fail to make it to the session hall. Says one legislator: “When the time for voting comes, bells start ringing like those for ice cream. Nagtatawag ng quorum. The ringing lasts for one or two hours.”

The appearance fee, however, has been known to escalate in proportion to the urgency of the measure. In the 11th Congress, members openly talked about the P500,000 many of them got to show up during the voting on the Electric Power Industry Reform Act (Epira). The money supposedly came from the speaker’s kitty as well, although it was sourced from another government agency. – With additional reporting by Avigail Olarte

The findings of the PCIJ’s study of Congress are published in the book, The Rulemakers: How the Wealthy and Well-Born Dominate Congress.