GMA to state execs: Salary cut or your job?

State executives opposing a Malacañang directive that effectively cuts their salaries have been given an ultimatum by President Arroyo: accept it or be fired.

Side-stepping possible legal constraints in the implementation of her directive, Mrs. Arroyo said executives who cannot contribute to reducing a gaping fiscal deficit have no business working in government.

"I am the appointing authority. If they cannot accept pay cuts, then I ask them to resign," she said.

The President said she would not hesitate to fire anyone "who thinks that the country owes him or her a big salary."

Memorandum Order 20, which was signed June 25, suspends allowance and pay increases to managers, board directors, members and trustees in government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs).

Mrs. Arroyo also instructed all heads of state firms and subsidiaries to implement a pay rationalization plan, where the pay package of state executives will be reduced to an amount not exceeding two times the standard rate for comparable national government positions.

The other day, Budget Secretary Emilia Boncodin said affected executives can easily invoke existing employment laws, which prohibit diminution in the salary of government workers.

Nevertheless, the President delivered a stern message to those opposed to her directive.

"Those who refuse to cooperate and make sacrifices, it is better that you resign. We cannot allow you to continue receiving huge salaries and allowances while the country suffers," she said during her weekly press conference at Malacañang.

She commended Land Bank of the Philippines President Margarito Teves, who earlier expressed willingness to take a pay cut.

"I hope others will follow his example," Mrs. Arroyo said.

The Land Bank is among the institutions that offers salaries and benefits that are more than double the rates prescribed by the Salary Standardization Law (SSL). Like many GOCCs and GFIs, it has been exempted from the law and has prescribed its own compensation package for senior executives.

The President reminded all officials yesterday that government is a public service.

"One joins the government not for self-gain but to be of service to the country and the people. Let us not enrich ourselves in public service. The opportunity to serve in government is an honor that should not be stained by materialism and personal gain," she said.