Have you, as a Philippine government employee, tried to take out a loan from your office’ cooperative, mutual fund, HDMF (the administrator of the Pag-ibig housig funds) and the GSIS (government pension fund office), only to be declined? This is due to a provision in the General Appropriations Act (GAA) stating that when an employees’ net take home pay is less than P5,000, they could no longer loan from these funding entities. Section 37 entitled “Authorized Deductions” of the GAA of 2012. The 2012 GAA which was enacted through Republic Act No. 10155 authorizes deductions from a government employee’s salary, as long as their total deductions shall not go below P5000.
Prior to 2012, an employee’s net take home pay should not go below P3,000. This has been stated in Sections 36 and 41 of the GAA of 2002 and 2008, respectively. The GAA OF 2002 and 2008 was enacted through Republic Act Nos. 9162 and 9498, respectively.
Below are the provisions of the GAAs relative to Authorized Deductions:
General Provisions on Authorized Deductions in the General Appropriations Act (GAA)
General Appropriations Act, 2002 (REPUBLIC ACT NO. 9162)
Section 36. Authorized Deductions. – Deductions from salaries, emoluments or other benefits accruing to any government employee chargeable against the personal services appropriation authorized in this Act may be allowed for the payment of obligations due the GSIS, HDMF, PHIC and other Government Financial Institutions, the Bureau of Internal Revenue and those specifically allowed by existing laws: Provided, That the agencies and offices with existing deductions arrangements with private lenders and cooperatives shall continue such deductions until the credits/loans outstanding or the premiums of the policies in force at the date of passage of this Act or, December 31, 2001 whichever comes later, shall have been fully paid: Provided, further, That such deductions shall not reduce the employee’s monthly net take home pay to an amount lower than Three Thousand Pesos (P3,000.00), after all authorized deductions. It shall be unlawful for departments, bureaus, offices and agencies to collect any form of service fees for the payment of any obligation through authorized deductions.
General Appropriations Act, 2008 (REPUBLIC ACT NO. 9498)
Section 41. Authorized Deductions …“deductions from salaries, emoluments or other benefits accruing to any government employee chargeable against the appropriations for personal services may be allowed for the payment of individual employee’s contributions or obligations due the following: a. The BIR, GSIS, HDMF and PHIC;b. Mutual benefits associations duly operating under existing laws which are managed by, and for the benefit of, government employees not covered by compulsory membership in the GSIS; and c. Associations / cooperatives organized and managed by government employees for their benefit and welfare. PROVIDED, That such deductions shall not reduce the employee’s monthly net take home pay to an amount lower than Three Thousand Pesos (P3,000.00), after all authorized deductions: PROVIDED FURTHER, That in the event total authorized deductions shall reduce net take home pay to less than Three Thousand Pesos (P3,000.00), authorized deductions under item (a) shall enjoy first preference, those under item (b) second preference, and so forth.”
| GENERAL APPROPRIATIONS ACT 2012 (REPUBLIC ACT NO. 10155) |
Section 37. Authorized Deductions. Deductions from salaries, emoluments or other benefits accruing to any government employee chargeable against appropriations for Personal Services may be allowed for the payment of individual employee’s contributions or obligations due the following:
(a) The BIR, Philhealth, GSIS, and HDMF;
(b) Mutual benefits associations, thrift banks and non-stock savings and loan associations duly operating under existing laws which are managed by and/or for the benefit of government employees;
(c) Associations/cooperatives/provident funds organized and managed by government employees for their benefit and welfare; and
(d) Duly licensed insurance companies accredited by national government agencies.
PROVIDED, That such deductions shall not reduce the employee’s monthly net take home pay to an amount lower than Five thousand Pesos (P5,000), after all authorized deductions: PROVIDED FURTHER, That in the event total authorized deductions shall reduce net take home pay to less than Five Thousand Pesos (P5,000), authorized deductions under item (a) shall enjoy first preference, those under item (b) shall enjoy second preference, and so forth.
Source:
Philippine Laws
1. Republic Act No. 9162 (General Appropriations Act 2002)
(No Official Gazette Source)
2. Republic Act No. 9498 (General Appropriations Act 2008)
(Official Gazette Hard Copy Only)
Official Gazette volume 104, no. 1
(Issue Date: March 16, 2008)
3. Republic Act No. 10155 (General Appropriations Act 2012)
The Hrep Reference Librarian 