BUTUAN CITY — Budget Secretary Amenah Pangandaman has called for amendments to the Philippine Local Government Code of 1991, also known as Republic Act (RA) 7160, to enable retroactive salary increases for local government unit (LGU) workers. Speaking at the 11th leg of the Public Financial Management Competency Program (PFMCP) for LGUs, Pangandaman emphasized the need for legislative changes to address the current limitations that prevent retroactive pay adjustments for LGU personnel.
According to Philippines News Agency, the Department of Budget and Management (DBM) attempted to implement retroactive salary increases for LGU employees but was hindered by legal constraints. "The law needs to be changed... We can't do it now," she explained. The current guidelines allow national government agencies (NGAs) to retroactively implement the first tranche of salary adjustments effective from January 1, 2024, but these retroactive provisions do not extend to LGU personnel.
Pangandaman further clarified that the Local Government Code's provisions on fiscal autonomy for LGUs lack the flexibility required to allow retroactive salary adjustments and other wage-related benefits. She acknowledged the limitations and the potential legal challenges, including possible issues with the Supreme Court, that could arise from attempting to circumvent existing laws.
In addition to addressing the issue of retroactive pay, Pangandaman urged LGUs to follow the national government's lead in providing health allowances to their employees. She also called on local governments to ensure the full utilization of their budgets to strengthen their capabilities and improve public service delivery.
Pangandaman highlighted ongoing efforts to empower LGUs, referencing the DBM's PFMCP, which has been conducted since September 2023. The program aims to promote good governance, financial accountability, and effective resource management among local government institutions.
Looking ahead, Pangandaman noted that the Marcos administration is preparing to implement the Public Financial Management (PFM) Reforms Roadmap 2024-2028, which will harmonize PFM policies across government agencies and support the full digitalization of PFM processes. She also pointed to the recently signed New Government Procurement Act (NGPA), RA 12009, which will modernize the public procurement system in line with global standards and enhance transparency through citizen participation in procurement proceedings.
Pangandaman concluded by emphasizing the importance of digital transformation in government operations, citing the full adoption of the Integrated Financial Management Information System as a critical step towards more efficient financial management.