Law Summary

Introduction

This document authorizes the implementation of standardized compensation and position classification plans for certain government-owned or controlled corporations involved in educational, scientific, cultural, and social sectors, aligning with the Constitutional mandate and prior regulations.

Constitutional Mandate and Background

• The Constitution mandates the standardization of compensation for government officials and employees, including those in government-controlled corporations.
• Presidential Decree No. 985 was issued for this purpose, allowing the adoption of additional financial incentives for profit-making corporations.
• Compensation Committees were established to formulate policies governing compensation, allowances, and incentives.

Scope of the Plan

• The compensation and position classification plans apply to the following corporations:
  • Cultural Center of the Philippines
  • Philippine High School for the Arts
  • Employees’ Compensation Commission
  • Environmental Center of the Philippines
  • Metals Industry Research and Development Center
  • Music Promotion Foundation of the Philippines
  • National Research Council of the Philippines
  • National Social Action Council
  • National Youth and Sports Development Foundation of the Philippines
  • Pambansang Katipunan ng Kabataang Barangay
  • Philippine Charity Sweepstakes Office
  • Philippine Heart Center for Asia
  • Philippine Institute for Development Studies
  • Philippine Veterans Assistance Commission
  • Science Foundation of the Philippines
  • Technology Resource Center

Position Classification

• Positions shall be classified based on a national classification method using pre-determined standards and factors.
• A position classification plan will be prepared for each corporation within the educational/scientific/cultural/social group.
• The Minister of the Budget will issue approved standards and factors for classification.

Compensation Schedule

• A compensation schedule is attached, applicable to positions paid on a monthly or annual basis.

Salaries for Top Management Positions

• Salary for executive positions is determined based on corporate asset size and overall financial performance.
• Maximum salary caps for top positions are as follows:
  • President/Director-General/Administrator/Director/Executive Director: P78,000
  • Executive Vice President/Deputy Administrator/Assistant Director: P70,000
  • Senior Vice President: P63,000
• Existing salaries exceeding these caps may be maintained under specified conditions.

Maximum Level of Allowances and Benefits

• Current policies on allowances and benefits will remain in effect for each corporation.

Implementing Details

• The Ministry of the Budget will issue implementing details observing the following guidelines:
  • Salary increases must be staggered according to corporate financial performance and cannot be subsidized by government funds.
  • Total increases in basic salary, allowances, and benefits must not exceed 25% of the prior year’s total personal services expenses.
  • An immediate 10% across-the-board increase in basic salary is mandated (with exceptions for senior executives).
  • Allowances for senior executives exceeding specified salaries may be adjusted.
  • Hiring rates will be determined based on corporation size and profitability.
  • Corporations with losses in 1976 must prepare an implementation schedule in conjunction with a profit plan, subject to approval.
  • Any changes to plans require the Minister of the Budget’s approval.

Effectivity Date

• The plans will take effect on May 1, 1979.

Key Takeaways

• This Letter of Implementation standardizes compensation and classification for specified government-owned corporations within the educational, scientific, cultural, and social sectors.
• It establishes clear salary caps and guidelines for managing allowances and benefits.
• The Ministry of the Budget plays a crucial role in overseeing the implementation and adjustments to the plans.
• Timely adjustments to compensation are crucial, with immediate salary increases applied as an interim measure pending further classification studies.