DBM: CNA incentive cap ensures proper use of public funds

A February 13, 2012 press release from the Department of Budget and Management

Aquino government working on fairer, performance-based package for public servants

Budget and Management Secretary Florencio B. Abad today defended the issuance of Budget Circular No. 2011-5, which puts a P25,000-ceiling for collective negotiation agreement (CNA) incentives of government employees, saying that it is a key reform measure that establishes fairness and prudence in the management of public funds.

“We have seen how government agencies have constricted expenses for crucial programs and projects only to manufacture savings for CNA incentives. Oftentimes, this practice has been abused, with agencies bloating their budgets for maintenance and other operating expenses (MOOE) so they could provide a larger incentive payout,” he said.

“This practice has also distorted the salary system within government, with some agencies providing obscenely high CNA incentives, while others are practically dealing with spare change. We want to restore fairness in the public sector compensation system,” he said.

The Budget Circular also limits the number of MOOE items from which these incentives can be sourced: travel, communication, repair and maintenance, transportation and delivery, supplies and materials, and utilities. Abad said the limitation ensures that the agencies’ capability to deliver public goods and services is not compromised.

He stressed that cost-cutting measures in MOOE should not result in inefficient and ineffective operations. In addition, less than 40 percent of the country’s 1.163 billion government employees receive CNA incentives because several departments and agencies have no accredited employees’ unions to date.

Abad said the Aquino Government is moving towards a better and more transparent compensation and incentives system in government that would be based on the performance of public institutions and of individual civil servants.

He noted that President Benigno S. Aquino III recently issued Administrative Order No. 25 which creates an inter-agency task force to establish a unified and integrated Results-Based Performance Management System (RBPMS) that will be the basis for measuring agency and individual performance and for determining performance-based compensation and incentives.

“To restore fairness in government salary standards, President Aquino ordered us to design a better, performance-based compensation package that would reward measurable outputs and outcomes. And I firmly believe that the people are one with us in our goal to reward their best-performing agencies and public servants,” he said.

“We want to improve and optimize government operations. Public funds should be used accordingly and be put wisely in government projects that will benefit the very people it serves. Sabi nga ng Pangulo, ang taumbayan ang boss natin,” Abad added.