Implementation of the First Tranche Compensation Adjustment for Civilian Personnel, and Military and Uniformed Personnel

February 24, 2016

DBM NATIONAL BUDGET CIRCULAR NO. 562-16

 

1.0 Purpose

This Circular is issued to prescribe the guidelines, rules, and regulations for the implementation of the first tranche Compensation Adjustment provided under Executive Order (EO) No. 201, s. 2016, entitled "Modifying the Salary Schedule for Civilian Government Personnel and Authorizing the Grant of Additional Benefits for Both Civilian and Military and Uniformed Personnel," as approved by the President on February 19, 2016.

2.0 Coverage

The following are covered by this Circular:

2.1 All positions for civilian personnel, whether regular, casual, or contractual in nature, appointive or elective, full-time or part-time, now existing or hereafter created in the Executive, Legislative and Judicial Branches, the Constitutional Commissions and other Constitutional Offices, SUCs and GOCCs covered by the Compensation and Position Classification System (CPCS) under Republic Act (RA) No. 6758, as amended by Congress Joint Resolutions No. 1, series of 1994 and No. 4, series of 2009; and

2.2 Military personnel under the Armed Forces of the Philippines, Department of National Defense (DND) and uniformed personnel under the Philippine National Police (PNP),Philippine Public Safety College (PPSC),Bureau of Fire Protection (BFP),and Bureau of Jail Management and Penology (BJMP) of the Department of the Interior and Local Government (DILG);Philippine Coast Guard (PCG) of the Department of Transportation and Communications (DOTC);and National Mapping and Resource Information Authority (NAMRIA) of the Department of Environment and Natural Resources (DENR). DcHSEa

3.0 Exclusions

The following are excluded from the coverage of this Circular:

3.1 Government agencies, including GOCCs, that are exempted from RA No. 6758, as amended, as expressly provided in their respective enabling law or charter, and are actually implementing their respective CPCS approved by the President of the Philippines;

3.2 GOCCs covered by the CPCS established by the Governance Commission for GOCCs and approved by the President of the Philippines, under RA No. 10149; and

3.3 Those hired without employee-employer relationships and funded from non-Personnel Services appropriations/budgets, as follows:

3.3.1 Consultants and experts hired for a limited period to perform specific activities or services with expected outputs;

3.3.2 Laborers hired through job contracts (pakyaw) and those paid on piecework basis;

3.3.3 Student workers and apprentices; and

3.3.4 Individuals and groups of people whose services are engaged through job orders, contracts of service, or others similarly situated.

4.0 First Tranche Monthly Salary Schedule for Civilian Personnel, Effective January 1, 2016

The new salary rates shall be in accordance with the First Tranche Monthly Salary Schedule for Civilian Personnel under Section 3 of EO No. 201, attached as Annex "A."

4.1 Rules for Adjusting Salaries

4.1.1 The salaries of incumbent personnel shall be adjusted to the rates in the Salary Schedule in Annex "A" corresponding to the designated steps of the salary grade allocations of their positions as of December 31, 2015, provided that their positions and salary grades are in accordance with the Index of Occupational Services, Occupational Groups, Classes, and Salary Grades issued under Budget Circular No. 2006-3 dated May 17, 2006, and the Index of Occupational Services attached to Corporate Compensation Circular No. 10 dated February 15, 1999, and additions/modifications thereto.

4.1.2 If the actual monthly basic salary of an incumbent as of December 31, 2015 falls between steps of the salary grade allocation of the position due to the grant of service award or as a result of demotion or transfer due to the exigency of the service, the salary shall be adjusted to the rate for the higher step in the Salary Schedule in Annex "A."

4.1.3 If the actual monthly basic salary of an incumbent exceeds that for Step 8 of the salary grade allocation of the position as of December 31, 2015:

4.1.3.1 The salary shall be adjusted to the rate for Step 8 of the same salary grade in the Salary Schedule in Annex "A";or

4.1.3.2 The employee shall not be entitled to salary increase if the actual salary as of December 31, 2015 exceeds the rate for Step 8 of the same salary grade in the Salary Schedule in Annex "A."

4.1.4 If supported by sufficient funds, the salaries/wages of incumbent contractual/casual personnel as of December 31, 2015 may be adjusted to the rates corresponding to Step 1 of the salary grade allocations of their positions effective January 1, 2016. The adjusted daily wage rates of casual personnel shall be computed by dividing the monthly rates by 22 working days per month.

4.1.5 Compulsory retirees whose services have been extended beyond December 31, 2015 shall be entitled to salary increases effective January 1, 2016, following items 4.1.1 to 4.1.3 of this Circular, whichever is applicable. However, their retirement benefits, including Terminal Leave Benefits, shall be computed based on their monthly basic salaries as of the day prior to the effectivity of their retirement, consistent with existing laws, rules and regulations.

5.0 First Tranche Provisional Allowance Schedule for Military and Uniformed Personnel (MUP),Effective January 1, 2016

The new Provisional Allowance for MUP shall be in accordance with the First Tranche Provisional Allowance Schedule for Military and Uniformed Personnel under Section 7 of EO No. 201, attached as Annex "B".

5.1 The grant of Provisional Allowance shall be an interim measure pending the modification and rationalization of the Base Pay Schedule of military and uniformed personnel.

5.2 The Provisional Allowance shall not form part of the base pay. Accordingly, the grant of this Allowance shall not increase the longevity pay, pension and other collateral allowances which are indexed to the base pay. SCaITA

6.0 Mid-Year Bonus for All Government Personnel, Beginning FY 2016

A Mid-Year Bonus equivalent to one (1) month basic salary as of May 15 shall be granted to those who have rendered at least four (4) months of satisfactory service and are still in the service as of same date, to be given not earlier than May 15 of every year, subject to the specific guidelines to be issued by the Department of Budget and Management.

7.0 Productivity Enhancement Incentive for All Government Personnel, Beginning FY 2016

A Productivity Enhancement Incentive (PEI) in the amount of P5,000 shall be granted to qualified government personnel not earlier than December 15 of every year, subject to the specific guidelines to be issued by the Department of Budget and Management.

8.0 Increase in Hazard Pay for MUP, Effective January 1, 2016

The Hazard Pay of all military and uniformed personnel shall be increased from the current rate of P240 per month to P390 per month for FY 2016.

9.0 First Tranche Officers' Allowance for Military and Uniformed Officers, Effective January 1, 2016

An Officers' Allowance shall be granted to military and uniformed officers in accordance with the First Tranche Officers' Allowance Schedule under Section 9 of EO No. 201, attached as Annex "C".

9.1 Similar to the Provisional Allowance, the Officers' Allowance shall be an interim measure pending the modification and rationalization of the Base Pay Schedule of military and uniformed personnel.

9.2 The Officers' Allowance shall not form part of the base pay. Accordingly, the grant of this Allowance shall not increase the longevity pay, pension and other collateral allowances which are indexed to the base pay.

10.0 Performance-Based Bonus for Personnel of National Government Agencies and Local Government Units

10.1 For FY 2016, the Performance-Based Bonus shall be at such rates as are provided under Section 3.0 of Executive Order No. 80, series of 2012, entitled "Directing the Adoption of a Performance-Based Incentive System for Government Employees" and implemented in accordance with Memorandum Circular No. 2015-1 dated August 12, 2015 issued by the Inter-Agency Task Force created under Administrative Order No. 25, series of 2011 (AO 25 IATF).

10.2 The Enhanced Performance-Based Bonus shall be implemented starting FY 2017, subject to the guidelines on eligibility, procedures and ranking system to be prescribed by the AO 25 IATF, providing for a progressive rate as the position and responsibility in improving agency performance becomes higher.

11.0 Implementation of the Compensation Adjustments in covered GOCCs

11.1 The implementation of the first tranche salary increase in GOCCs shall be as determined by their respective governing boards. GOCCs which do not have sufficient funds to implement fully the Salary Schedule in Annex "A" may adopt their respective salary schedules at lower rates than, but at uniform percentages of the salaries in Annex "A".

11.2 In the formulation of such salary schedules, GOCCs shall ensure that they can fund on a sustainable basis the increased salaries, including the government counterpart to the Retirement and Life Insurance Premiums (RLIP),Pag-IBIG Contributions, PhilHealth Contributions, and Employees Compensation Insurance Premiums.

11.3 In the adjustment of the compensation of incumbent personnel effective not earlier than January 1, 2016, the pertinent rules under this Circular shall apply.

12.0 Procedural Guidelines

12.1 Preparation of Notices of Salary Adjustment (NOSAs) for personnel

12.1.1 The Human Resource Management Officer (HRMO)/Administrative Officer (AO) of a national government agency (NGA) or GOCC shall prepare NOSAs for incumbent civilian personnel by following the format marked as Annex "D-1" or Annex "D-2",whichever is applicable, for approval by the Head of Agency.

12.1.2 For personnel whose actual monthly salaries as of December 31, 2015 exceed the rates corresponding to Step 8 of the salary grade allocation of their positions in Annex "A," the HRMO/AO shall no longer prepare NOSAs.

12.1.3 The NOSAs shall be issued to the personnel concerned, copy furnished the Government Service Insurance System (GSIS) if they are members thereof.

12.2 The salary adjustment under this Circular shall be subject to the usual accounting and auditing rules and regulations, and to appropriate re-adjustment if found not in order. The personnel concerned shall refund any overpayments received.

13.0 Fund Sources

13.1 The amounts required to implement the compensation adjustment and related fixed expenditures of personnel in NGAs shall be charged against the Miscellaneous Personnel Benefits Fund (MPBF) authorized under RA No. 10717, or the FY 2016 General Appropriations Act (GAA). aTHCSE

13.2 The amounts required to implement the compensation adjustment and related fixed expenditures of casual and contractual personnel in NGAs whose salaries and wages are drawn from the lump sum appropriation for non-itemized positions shall be sourced from said agency lump sum appropriations included in the FY 2016 budget.

13.3 For covered GOCCs, the amounts shall be charged against their approved corporate operating budgets (COBs),provided that the national government shall not release funds for compensation adjustment or any related expenditures; provided, further, that the GOCCs shall not resort to borrowings for the purpose; and provided, furthermore, that the performance targets in their DBM-approved COBs are met and their programs/projects for the year are not adversely affected.

14.0 Release of Funds

14.1 The DBM shall release to the agencies concerned the Special Allotment Release Order (SARO) covering the full year requirements of the compensation adjustment and related fixed expenditures of their regular personnel, pursuant to EO No. 201, based on data from the Government Manpower Information System (GMIS), chargeable against the MPBF.

The SARO shall be released directly to the operating units of the agencies concerned based on the number of filled positions as of December 31, 2015.

In the case of regular personnel, the RLIP requirements corresponding to the salary adjustments, being automatically appropriated, shall be released through a separate SARO.

DBM shall issue the corresponding Notice of Cash Allocation (NCA),with monthly breakdown, to cover the total annual requirement, i.e., January to December 2016, for this compensation adjustment and related fixed expenditures of agency personnel, consistent with applicable guidelines under National Budget Circular (NBC) No. 561 dated January 4, 2016.

14.2 Additional release of funds for newly filled positions after the December 31, 2015 cut-off date cited above shall be subject to the submission by the agency concerned of the following:

14.2.1 The information on the item numbers, positions and salary grades, names of incumbents, salaries and dates of assumption to duty; and

14.2.2 Latest Statement of Appropriations, Allotments, Obligations, Disbursements and Balances (SAAODB),highlighting the amount of allotment received and corresponding obligations and disbursements incurred for compensation adjustments.

15.0 Applicability to Certain Officials

Consistent with the policy under Section 6 of Article VII and Section 10 of Article VI of the Constitution, the compensation adjustment authorized under EO No. 201, for the President of the Philippines, Vice President of the Philippines and Members of Congress shall take effect only after the expiration of the respective terms of the incumbents.

The implementation of said EO with respect to the regular members of the Cabinet shall be effective starting July 1, 2016.

16.0 Responsibilities of Agencies

Agencies shall be responsible for the proper implementation of the provisions of this Circular. The responsible officers shall be held liable for any payment not in accordance with the provisions of this Circular without prejudice to the refund by the employees concerned of any excess or unauthorized payments.

17.0 Resolution of Cases

Cases not covered by the provisions of this Circular shall be referred to the DBM for resolution.

18.0 Effectivity

The effectivity of the compensation adjustments authorized for civilian personnel, and military and uniformed personnel shall retroact on January 1, 2016.

This Circular shall take effect immediately.

(SGD.) FLORENCIO B. ABADSecretary

ANNEX A

First Tranche Monthly Salary Schedule for(in Pesos)

 

 

ANNEX B

First Tranche Provisional Allowance Schedule(In Pesos)

 

ANNEX C

First Tranche Officers' Allowance Schedule(In Pesos)

 

ANNEX D-1

For Plantilla Positions

Notice of Salary Adjustment

Date: _______________

____________________

_______________:

Pursuant to National Budget Circular No. _____ dated ___________, implementing Executive Order No. 201, s. 2016, your salary is hereby adjusted effective January 1, 2016, as follows:

 

1.	Adjusted monthly basic salary effective January 1, 2016,
	under the new Salary Schedule; SG ____, Step ____	P___________
2.	Actual monthly basic salary as of December 31, 2015;
	SG ____, Step ____	___________
3.	Monthly salary adjustment effective January 1, 2016 (1-2)	P___________

 

Very truly yours,

___________________

Position Title: ______________________

Salary Grade: ______________________

Item No./Unique Item No.,FY _____Personal Services Itemization

Copy Furnished: GSIS

ANNEX D-2

For Contractual/Casual Personnel

Notice of Salary/Wage Adjustment

Date: _______________

____________________

_______________:

Pursuant to National Budget Circular No. ____dated __________, implementing Executive Order No. 201, s. 2016, your salary/daily wage is hereby adjusted effective ______________, as follows:

1.	Monthly basic salary/daily wage rate
	under the new Salary Schedule; SG ___	P___________
2.	Actual monthly basic salary/daily wage rate
	as of December 31, 2015; SG ____	___________
3.	Monthly salary adjustment/Daily wage adjustment
	effective __________ (1-2)	P___________

 

It is understood that this salary/wage adjustment is subject to review and post-audit, and to appropriate re-adjustment and refund if found not in order. IDSEAH

Very truly yours,

___________________

Position Title: ______________________

Salary Grade: ______________________

Copy Furnished: GSIS

Published in The Philippine Star on February 26, 2016.