President Aquino Orders Pay Hike for Govt Workers

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MANILA –  President Benigno S. Aquino III issued Executive Order (EO) No. 201 on Feb. 19 on the day of his arrival from the United States, adjusting the salaries of government personnel, both civilian and military.
The EO is entitled “Modifying the Salary Schedule for Civilian Government Personnel and Authorizing the Grant of Additional Benefits for Both Civilian and Military and Uniformed Personnel”.
Communication Secretary Herminio Coloma, Jr. said the compensation adjustment strategy will ensure that the compensation structure of government personnel is comparable with the prevailing rates in the private sector.
He said the government expects to attract and retain competent and committed civil servants, so the existing Compensation and Position Classification System (CPCS) was revised or updated.
One of the provisions of the EO raises the minimum salary for Salary Grade I from the present P9,000 to P11,068 to make it even more competitive with market rates.
It also brings the compensation of government personnel closer to their private counterparts to at least 70 percent of the median of the market for all salary grades.
The adjustment also eliminates overlaps in between salary grade allocations of government personnel to recognize differences in duties and responsibilities of the position.
It maximizes the net take home pay of government personnel through the inclusion of additional benefits and strengthens the performance-based incentive system in recognition of government personnel who carry out exemplary performances.
For the military and uniformed personnel (MUP), the compensation adjustment strategy will be aligned with the objective of mitigating the fiscal crisis building up in their pension system and pursuing the pension reform.
Executive Secretary Paquito Ochoa, Jr. has recommended to President Aquino the issuance of an executive order that will adjust the compensation of government personnel, both civilian and military.

Executive Secretary Ochoa’s proposal was based on the memorandum by the Department of Budget and Management (DBM) for the issuance of an executive order on the compensation adjustment for government personnel.

For civilian personnel, the EO adopted the same proposals in House Bill 6268 and Senate Bill 2671, providing for a mix of compensation adjustments to be implemented in four tranches over four years.

For the military, since the application of the pension indexation of military and uniformed personnel cannot be suspended through an administrative act, the DBM proposed to maintain the current base pay schedule of the MUP.

In lieu of an increase, there will be an increase in the existing hazard pay and the grant of new but temporary allowances.

These adjustments will approximate the additional renumeration had the base pay been increased, and will be an interim measure until such time that an appropriate pension reform measure is passed in Congress.

The salary adjustment will be retroactive January 1 this year, considering that the amount under the first tranche has already been provided in the 2016 national budget.

The proposed salary adjustment was the subject of House Bill 6268 and Senate Bill 2671 (Salary Standardization Law of 2015). Those bills however were never enacted during the Bicameral Conference Committee meeting last January 27 due to a deadlock.

The snag resulted from the conflicting provisions between the House version suspending the application of pension indexation of MUP and the Senate version proposing to delete the suspension.

Proponents of the House version argue that the indexation will cost an additional P121.78 billion from 2016 to 2019, which was not considered in the 2016 General Appropriations Act

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