What is SALN (Statement of Assets, Liabilities, and Net Worth)?

Today, the chief justice of our country was convicted for culpable violation of the Philippine Constitution and betrayal of the public trust when he failed to disclose to the public his Statement of Assets, Liabilities, and Net Worth (SALN). The impeachment court, with 20 senator judges voted for conviction as against only 3 who voted for acquittal, ruled that Chief Justice Renato Corona was guilty of Article II of the impeachment complaint: the country’s highest justice official did not disclose his true amount of assets in his statements of assets, liabilities and net worth (SALN). Check out the whole story here

Corona’s conviction was apparently based on the false declaration of his assets on his SALN. In his 2010 statement of assets, liabilities and net worth, Corona declared “cash and investments” amounting only to P3.5 million. You may view Corona’s 2010 SALN here. But Corona, during the impeachment trial, has admitted that he has a combined bank account worth 185 million, consisting of a $2.4 million dollar account (around P105 million) and P80 million peso accounts (which he also claimed as commingled funds that he doesn’t solely own).

Now, because of the series of dramas in the senate’s impeachment trial, which is always viewed by millions of Filipinos local and abroad, the word SALN became a word-of-mouth by most of us. But what is SALN anyway? Why it became one of the most important evidences where the senator judges based their judgments?

What is a SALN?

The SALN or Statement of Assets, Liabilities and New Worth is a declaration under oath required to be submitted by public officers and employees as mandated by Article 17, Article XI of the 1987 Constitution. The filing of SALN is also found in Section 8 of Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees) and Section 7 of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act).

On July 8, 2011, pursuant to CSC Resolution No. 11-00902, the Civil Service Commission, as the central human resource institution of the government, resolves to enjoin public officers and employees to use the Revised Statement of Assets, Liabilities and Net Worth (SALN) Form starting year 2011. The deadline for submission of SALN for the year 2011 was on April 30, 2012. Check out the proposed new and revised SALN form here.

However, due to some issues and protests from several public officials, the commission has deferred the implementation of the revised form for further review of the different issues pertaining to the form.

What’s in the SALN?

The old SALN contains the filer’s assets, liabilities, net worth, business interests and financial connections, and list of relatives in the government. Check out the unrevised SALN form here. On the other hand, the proposed revised SALN form has gone further to include the disclosure of the filer’s amount of sources of gross income, amount of personal and family expenses, amount of income taxes paid, and the inclusion of the properties of the filer’s spouse and unmarried children below 18 years of age living in his/her household.

In my opinion, the amount of gross income and income taxes paid are just reasonable to be included in SALN of public officials. The public has to know if the government officials are earning fair income and are paying the right taxes to the government. This can also be a good way to reconcile their income taxes paid as declared in their income tax return filed with the Bureau of Internal Revenue (BIR) and as disclosed in their SALN.

But for requiring annual disclosure of personal and family expenses, I’m not sure if it’s fair to both sides. Well, you judge. It can be an efficient way to check the lifestyle of all our government officials. But it may also somehow harm their personal rights. But yes, since they are public officials, they have to understand that they are not already living the life of a private person.

The following are the definitions of some of the major components of the SALN:

1. Assets — refer to declarant’s real and personal properties. Real properties include residential, commercial, agricultural, industrial and other kinds of real properties. Personal properties include jewelry, appliances, furniture, motor vehicle and other tangible properties. Other assets refer to investments or intangible assets, such as cash on hand or in bank, negotiable instruments, securities, stocks, bonds, and the like.

2. Liability — refers to financial liability or anything that can result to  a transfer or disposal of an asset through personal loans or otherwise obtained from banks, financial institutions, GSIS, PAG-IBIG and the


3. Net worth — this is the sum of all assets (real, personal and other assets) less total liabilities.

4. Business interests — refers to declarant’s other sources of income or existing interest in any business enterprise or entity, aside from his/her income from government.

5. Financial connections — refer to declarant’s existing connections with any business enterprise or entity, whether as a consultant, adviser and the like, with an expectation of remuneration for services rendered.

6. Relatives in the government — include declarant’s relatives up to the fourth civil degree of relationship, either by consanguinity or affinity, including bilas (brother-in-law’s wife or sister-in-law’s husband), inso (appellation for the wife of an elder brother or male cousin) and balae (parents and parents-in-law relationship; a parent of one’s son or daughter-in-law).

In the proposed new and revised form of SALN, the declaration already includes the properties and some information of the filer’s spouse and unmarried children below 18 years of age living in his/her household. The revised form has also added the following components:

7. Gross income — refers to all income derived from whatever source.

8. Income taxes paid — refer to all taxes paid for the preceding calendar year, whether derived from employment or business.

9. Family expenses — refer to the amount of family expenses incurred by the declarant for the preceding calendar year.

10. Personal expenses — refer to the amount of personal expenses incurred by the declarant for the preceding calendar year.

The purpose and essence of SALN

The SALN is required by the law to promote transparency and public accountability among government employees and public officials. If we will read the SALN form, the filer has to affix his signature and certify to “the best of his or her knowledge and information that the statements declared in his SALN are true”. In other words, those public documents are supposedly free from lies and deceit. They must be declared to promote public trust and confidence.

In the case of Chief Justice Corona’s impeachment trial, we have to bear in mind that the law is based on the truth and justice. No secrecy law shall destroy the principle of honesty and equality.  When laws and principles are in conflict, we go back to the fundamentals. Apparently, the principles of truth and justice are deeper and more primary than the principle of bank secrecy law. Hence, the failure to disclose one’s true SALN is an act that betrays public trust.

We must not also forget that we are dealing with public officials who are supposedly models of public trust.

I hope that what happened to Corona will become a big lesson to all government officials. They all must ensure that they are affixing their signatures to a SALN that is certified true to maintain the public trust in our country.

Victorino Abrugar is a retired CPA practitioner, a blogger, speaker, and an entrepreneur. He's the President of Optixor, Inc., a digital marketing company based in the Philippines. Follow him on Twitter at @viclogic.

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