Senate President Pro Tempore Ralph Recto today called for an amendment of the “anti ‘5-6’” provision in the proposed national budget by proposing that the net take-home pay of state workers, after deductions, must not be lower than P5,000 a month.

Recto said the current and proposed General Appropriations Act peg at P3,000 the “clean” monthly salary of a national government employee after mandatory deductions such as pension contributions, health insurance, withholding tax, loan amortization have been made.

But Recto said the P3,000 threshold – to deter loan sharks preying on government workers – was imposed more than10 years ago, when government pay and cost of living were lower than they are today. “Clearly, an adjustment is in order.”

Recto explained that a provision in the 2013 national budget, as well as in the version proposed for 2014, list down by order of priority agencies which will have the first crack in claiming deductions from an employee’s salary.

In the first tier are the Bureau of Internal Revenue, Philippine Health Insurance Corp., Government Service Insurance System, and the Home Development Mutual Fund (Pag-IBIG).

Next are “mutual benefit associations; thrift banks; non-stock savings and loan associations managed by and for the benefit of government workers; associations, cooperatives, provident funds organized and managed by government employees.”

Last will be insurance companies accredited by the government.

For serving what Recto describes as a “debt collecting agency”, government receives a “service fee.”

Recto said raising to P5,000 the monthly net take-home pay of government workers must be done before the single unified payroll system of the government takes effect.

The senator was referring to the plan by the Department of Budget and Management to develop a bureaucracy-wide payroll system in which salaries will not be coursed through agencies anymore but would go straight to the bank accounts of employees.

The system, according to the DBM, would eliminate ghost employees, save on administrative cost and make government cash management easier.

Recto said the above can only be attained if government will cease to be a collecting agency even for “paluwagans.”

While he recognizes the employee’s right to plan the disbursement of his own money, including taking advances from future income, and the right of legitimate creditors to be paid, “there must be a minimum amount set.”

Recto said strengthening the anti-loan shark provision in the budget is but one component in improving government compensation.

Recto has called for a review of the government pay system and the drafting of a Salary Standardization Law IV.

He has also filed a measure setting an amount by which certain bonuses government workers receive are exempt from taxes.