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Press Release

3 former GSIS employees convicted of graft for payroll padding
23 June 2017

The Regional Trial Court (RTC) Branch 114 of Pasay City has convicted three former Government Service Insurance System (GSIS) employees for violation of Section 3 (b) of Anti-Graft and Corrupt Practices Act (Republic Act No. 3019). The personnel were sentenced to imprisonment of six years and were perpetually disqualified from holding public office.

 In the decision promulgated by Judge Edwin Ramizo, Computer Operator IV Clemente Flojo, Data Controller IV Reuben Cellona, and Computer Terminal Operator IV Emmanuel Valera were found to have demanded and received in 2004, the amount of P55,000.00 in exchange for the approval of the Enhanced Salary Loan (ESL) applications of 22 employees from the Philippine Postal Office (PPC).  Witnesses testified that these loan applications from July to November 2004, were previously rejected by the GSIS; however, the three accused conspired in padding the payroll of the PPC employees in order to be qualified to avail of the ESL.

 Officials from the GSIS testified that Flojo, et. al. padded the salaries encoded in the Membership Administration Base and that subsequent to the granting of such loans, the salaries were reduced back to their original and correct level. The loan applications were all granted and released in one day contrary to the regular three to four day processing period. The court found that the applicants gave facilitation money to the accused ranging from P500 to P2,500.00 in exchange for loans ranging from P89,336 to P154,008.00.

 “By virtue of this padding-reduction process, the concerned PPC employees successfully secured and obtained loans in amounts higher than what they were legally entitled to,” stated the Decision.

 The court added that, “in the course of the administrative investigation, it was found that the payroll padding would not have occurred without the direct participation of GSIS personnel who had access to and knowledge of the  Membership Service Profile, which contains the name, birth, position and salary of GSIS members.  The prosecution aptly proved that accused requested and in fact received consideration not only in cash but also in kind in exchange of their facilitating the loan applications by “doing something” on the rejected applications which was effected by altering and/or padding the salaries of the loan applicants.”

 Under Section 3(b) of R.A. No. 3019, public officials are prohibited from directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit, for himself or for any other person, in connection with any contract or transaction between the Government and any other part, wherein the public officer in his official capacity has to intervene under the law. ###