Budget Secretary Benjamin Diokno warned on Wednesday that the budget deficit could rise to 5 percent of gross domestic product, putting at risk its "excellent" international financial standing, if the salaries of teachers will be doubled.
Diokno said doubling salaries of teachers in 2018 will mean an additional P343.7 billion in personnel services costs.
In the 2018 General Appropriations Act, he noted that the programmed personnel services costs for teaching positions amount to P381.1 billion.
"Doubling the salaries of teachers will require PS costs of about P724.8 billion, implying a financing requirement of P343.7 billion," Diokno said in a press conference.
He said the Duterte administration has to ensure that public sector deficit should remain manageable.
“Financing this P343.7 billion may require hiking the deficit from 3 percent of GDP to 5 percent of GDP, and it may put at risk the excellent international financial standing the Duterte Administration has built over the past 18 months,” Diokno stressed.
During the recent Cabinet meeting, he noted that President Rodrigo Duterte ordered him to look into increasing the public school teachers' salaries and not to double them.
Confusion about the increase on teachers' salaries came when Presidential Spokesperson Harry Roque told reporters the hike might be doubled similar to the military and uniformed personnel.
"But judging by what he wanted for the PNP (Philippine National Police) and the AFP (Armed Forces of the Philippines), it could be that he is also aiming to double the entry salary for teachers," Roque has said when asked the possible increase on teachers' salaries.
Diokno said if the salaries of the teachers would increase twice, the government's options could be to raise more taxes or reduce other expenditure items.
“Raising P343.7 billion is a monumental task,” he said.
“Consider that Package 1A of TRAIN (Tax Reform for Acceleration and Inclusion) is expected to deliver about P90 billion in revenues, yet this is only about one-fourth the amount needed to finance the doubling of salaries of teachers,” he added.
By first quarter of 2019, Diokno said his office will commission an independent firm to do a bench marking on the salary of teachers and other government personnel such as doctors, nurses, and lawyers.
The results of the study will be the Department of Budget and Management's basis to propose the appropriate level of compensation for government workers, he said. Celerina Monte/DMS