DBM Issues Guidelines for 2nd Pay Adjustment for Gov’t Employees

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DBM Issues guidelines for 2nd pay adjustment for gov employees

The second of four tranches provided in the proposed Salary Standardization Law has gone into effect as of January 1, 2017. This comes after former president Benigno Aquino III signed Executive Order 201 last year, effectively making the interim measure to increase the salary of government employees permanent.

The Budget Department announced that all government employees are to receive higher salaries this year, which has already been accounted for in the 2017 national budget.

Who’s getting a raise?

Budget Secretary Benjamin Diokno said in a press briefing earlier in the month that the next round of increases includes civilian and military employees – teachers, health workers, soldiers, policemen, and all other civil servants – are to receive a higher take-home pay as part of the current administration’s pledge to raise compensation.

President Rodrigo Duterte said in a statement today: “These are the people who help and protect the Philippines. We want them to feel satisfied about their jobs, inspire them to be more productive workers and allow them to provide for their families. Raising their wages is only just.”

How it works

EO 201, which grants a compensation adjustment to government workers and additional allowances for Military and Uniformed Personnel (MUP) in four separate tranches, the first of which was in 2016. Pursuant to said legislation, the Department of Budget and Management (DBM) released National Budget Circular No. 568 and Local Budget Circular No. 113, which implements the second tranche of adjustments.

National Budget Circular No. 568 provides the rules and regulations regarding the adjustments for civilian personnel in the Judicial, Executive, and Legislative branches, the Constitutional Commissions and other Offices. It also includes State Universities and Colleges, government owned and controlled corporations – providing they are covered by Compensation and Position Classification System under Republic Act No. 6758.

Local Budget Circular No. 113 covers all positions for Local Government Units and all positions for barangay personnel who are given monthly honoraria.

In its complete implementation, the second tranche of adjustments should provide government workers with additional take-home pay aside from to mid-year and year-end bonuses. Additionally, employees who meet their agency targets will be granted an enhanced performance-based bonus.

Further increases

While President Duterte’s original statement to “double cops’ and soldiers’ salaries” in 2016 has fallen through, Secretary Diokno has acknowledged that further compensation increases will require approval from the Senate and the House of Representatives. He also further stated that Congress’ behavior suggests that they may not object to a salary increase.

While the Secretary is optimistic that these increase may become reality by January 2018, he also added that the proposed double in pay could happen sooner if the proposed tax reform plan is passed – reducing the tax rate from the current 32 percent to 25 percent – resulting in higher net income for taxpayers.

Final thoughts

The pay adjustments intend to bring the salaries of government workers much closer to their counterparts in the private sector, playing on the principle of “equal pay for work equal value”.  Many of the men and women in uniform have since expressed gratitude for the incremental hike, with other agencies following suit.