Creation and Role of Compensation Committees
- Compensation Committees were created under P.D. No. 985 and Letter of Instructions No. 62.
- These committees formulate and recommend policies on position classification, compensation, allowances, and incentives.
- Letter of Instructions No. 841 orders immediate submission of salary and benefits adjustments in response to current economic conditions.
Scope of Application
- The position classification and compensation plan applies specifically to the Financial Institutions group of GOCCs.
- The covered corporations include:
- Central Bank of the Philippines
- Development Bank of the Philippines
- Government Service Insurance System
- Home Financing Corporation
- Land Bank of the Philippines
- Philippine Amanah Bank
- Philippine Deposit Insurance Corporation
- Philippine Veterans Investment Development Corporation
- Philippine National Bank
- Social Security System
Position Classification Methodology
- Positions are classified based on a pre-determined set of standards and factors.
- Each corporation's classification plan must be approved by the Minister of the Budget, pursuant to P.D. No. 985.
Compensation Schedule and Payment Basis
- A specific compensation schedule is attached and applies to positions remunerated on a monthly or annual basis.
Salaries for Top Management Positions
- Compensation for executive positions depends on the corporation’s asset size and financial performance.
- Maximum basic salaries (monthly) for the largest corporation are:
- Governor/Chairman/President: P96,000
- Senior Deputy Governor/Vice-Chairman/Executive Vice President: P91,200
- Deputy Governor/Senior Vice President/Supervising Governor: P84,000
- Central Bank of the Philippines executives receive a 10% salary advantage.
- Salaries must maintain hierarchical order; subordinate positions receive less than superiors.
- Existing salaries exceeding these maxima may be retained.
Allowances and Benefits Limitations
- Allowances and benefits must not exceed specified maximums:
- Cost of living allowance: 40% of basic pay or P300/month, whichever is higher.
- Children’s allowance: P30 per child, up to 4 children.
- Amelioration allowance: 10% of basic pay or P50/month, whichever is higher.
- Meal subsidy: P3.00 per day per employee.
- Existing representation and transportation allowances maintained.
- Profit sharing, bonuses, or pension benefit increases require Compensation Committee approval under P.D. No. 985.
Authorized Salary Increases
- Governing Boards may approve up to three-step salary increases within the approved classification and compensation plans.
- Increases are subject to adherence to provisions governing salary caps and allowances.
Implementing Guidelines by the Ministry of the Budget
- Ministry of the Budget to issue detailed implementing rules.
- Salary increases must be staggered and based on financial performance.
- No government subsidy or equity funding for salary increases is permitted.
- Hiring rates set per corporation considering size and profitability.
- Corporations with losses in 1978 require coordinated profit plans and Ministry approval for implementation schedules.
- Changes in classification or pay plans, including reclassification, require Ministry approval.
Effective Date
- The Position Classification and Compensation Plans, including authorized step increases, take effect May 1, 1979.
Presidential Authority
- Implementation ordered under the authority of President Ferdinand E. Marcos on October 12, 1979.
- Signed and promulgated formally by Presidential Executive Assistant Jacobo C. Clave.