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DBM issues circulars for implementation of compensation adjustment

MANILA, Philippines – Starting next week, agencies may start processing adjustments in compensations as the Department of Budget and Management (DBM) issued yesterday National Budget Circular No. 562 and Local Budget Circular No. 108.
These circulars will implement the first tranche compensation adjustment for government workers and additional allowances for Military and Uniformed Personnel (MUP), as mandated under Executive Order 201 (s. 2016).
“With the issuance of these circulars, the salaries of civilian personnel will be adjusted in accordance with the First Tranche Monthly Salary Schedule as provided in the Executive Order,” DBM Secretary Florencio “Butch” Abad said. “Likewise, the new allowances for MUP will be granted in accordance with the schedule provided in the EO. Meanwhile, the Hazard Pay for MUP shall be increased from the current rate of P240 per month to P390 per month,”
Abad added that since the compensation adjustment is retroactive to January 1, 2016, civilian personnel will receive salary differential and MUPs will receive the Hazard Pay differential and new allowances due them since January.
Abad said the funds for the compensation adjustment and related fixed expenditures for civilian and MUP will be released next week to the agencies based on the number of filled positions as of December 31, 2015. Funds for newly-filled positions after the December cut-off date shall be released separately and subject to submission of requirements.
However, he added that while the funds will be released directly to agencies next week, this does not mean the adjusted salaries and new allowances will be received by all covered personnel next week.
“The Human Resource Office of agencies will, of course, need time to implement the procedures for salary adjustment and process the release of funds to employees,” he said.
For covered GOCCs, the funds shall for charged against their approved corporate operating budgets. For LGUs, the funds shall be charged against LGU funds subject to the Personnel Services (PS) limitation in LGU budgets and income classification. If the funds are insufficient to fully implement the salary schedule, the Sanggunian may adopt a modified salary schedule with lower rates but at a uniform percentage of the rates in the applicable salary schedule provided in the circular.
The President signed Executive Order 201 last week modifying the salary schedule for civilian government personnel and authorizing the grant of additional benefits for both civilian and MUP in response to the congressional deadlock on the issue of the indexation of MUP pension. This resulted in the non-passage of the proposed Salary Standardization Law of 2015.
The EO effects compensation adjustments for this year as an interim measure to implement Tranche 1 of the proposed SSL, the full year requirement for which has already been provided in the 2016 Budget.
For civilian government personnel, the EO effects the adoption of the same proposals in House Bill 6268 and Senate Bill 2671 for the salary increase, the grant of the mid-year bonus equivalent to one month’s basic salary, and the Productivity Enhancement Incentive (PEI) of P 5,000.
For MUP, EO 201 provides for two new allowances: the Provisional Allowance and Officers’ Allowance, in lieu of an increase in Base Pay in consideration of the pension implications of Base Pay adjustment of active MUP. These two new allowances approximate the added remuneration had the Base Pay been increased. The amounts of these allowances are also based on the proposed increases in Base Pay under the proposed bills on SSL 2015.
Abad said this is an interim measure to supplement the total compensation of MUP until such time that a pension reform measure is passed in Congress that will mitigate the impact of pension indexation.
“This will ensure that they will get at least the first tranche of the pay increase that we have planned for them,” said Abad.

Criselda Cabangon David, a happy mother of two kids, is a full-time Sociologist at the City Government of Lucena, Quezon Province. She is currently the Managing Editor of Ang Diaryo Natin Sunday News, a weekly local community newspaper in the Philippines and an active member of the National Union of Journalists of the Philippines.