Struggling to use up the P46-billion supplemental budget, government officials said the government has wrapped up negotiations with the state-owned pension fund.
As of November, Budget Secretary Rolando Andaya Jr. told reporters yesterday that the National Government has so far spent P26 billion of the supplemental budget, expressing intentions to spend the rest before the end of the year.
According to Andaya, the National Government and GSIS are scheduled to sign the memorandum of agreement today for a total of P6.5 billion that would be taken out of the regular 2005 budget.
"We have lined up fast-disbursing expenditures to allow us to use up this money," Andaya said.
For the GSIS payments, budget officials said earlier that government has already allotted P6 billion for the partial settlement of the unpaid principals and another P3.3 billion to pay for the unpaid difference when contribution rates were adjusted. The P6.5-billion payment, however, would not be paid out of the supplemental budget, Andaya said.
According to Andaya, the initial payments to be made by the National Government are already allocated in the budget and part of the funds would come from the P46-billion supplemental budget for 2006. The National Government’s payables to the GSIS came to a fore in 2003 when the budget was deep in deficit while the GSIS was looking at the rapid depletion of its finances.
At some point, it was estimated that the reconciliation of its records turned up at least P35 billion worth of contributions that were not accounted for due to irregularities in the posting" of remittances by government agencies. The amount has since been pared down, following the completion of the reconciliation of records between the GSIS and government agencies.
The GSIS said at the time that the "culprit was in the posting" of remittances because GSIS employees are depending on the certificates of payment submitted by the government agencies.
Under normal circumstances, government agencies automatically withhold GSIS contributions from the salaries of government employees. These contributions are then remitted to the GSIS and certificates of payment were issued.
As early as 2001, the GSIS estimated that its fund deficiency would reach P25 billion and the agency has not been able to set aside enough funds for the payment of claims and benefits to its over a million members.