Law Summary
Definition of Personal Services
- Defined under Section 306(k) of RA 7160.
- Includes appropriations for payment of salaries, wages, and other compensation.
- Applies to permanent, temporary, contractual, and casual employees of the LGU.
Composition of Other Compensation Included in Personal Services
- Based on Presidential Administrative Order No. 42, March 3, 1993.
- Includes various allowances, benefits, and compensations beyond basic salaries and wages:
- Terminal Leave Benefits
- Per-Diem Compensation
- Retirement and Life Insurance Premiums
- PAG-IBIG Contributions
- Medicare Premiums
- Employees Compensation Insurance Premiums
- Representation and Transportation Allowances (Commutable)
- Honoraria
- Consultants' and Specialists' Fees and Allowances
- Bonuses and Incentives
- Overtime Pay
- Pensions
- Step Increments for Merit and Length of Service
- Personnel Economic Relief Allowance (PERA)
- Additional P500 Allowance
- Laundry Allowance
- Quarters Allowance
- Clothing/Uniform Allowance
- Subsistence Allowance
- Hazard Pay
- Productivity Incentive Benefits
- Magna Carta for Public Health Workers Benefits
- Other lump-sum items:
- Lump-sum for Salary Adjustment
- Lump-sum for Reclassification of Positions
- Lump-sum for Creation of New Positions
Coverage of the General Limitation
- The total amount charged against the LGU's annual income from regular sources, realized in the preceding fiscal year, includes the personal services components listed above.
Exemptions from the General Limitations
- Certain programs and activities are exempt from the general limitations per the General Appropriations Act of CY 1995 (RA 7845):
- Continued implementation of the Salary Standardization Law
- Payment of minimum compensation to barangay officials
- Absorption of devolved personnel
- Creation of mandatory positions
- Payment of at least 50% of the total requirement for Magna Carta benefits of public health workers
- Additionally, personal services appropriations of officials and employees of public utilities and economic enterprises owned/operated by the LGU are excluded from the annual budget limit and are charged to their respective agencies.
Saving Clause
- Any cases not covered by the Circular’s provisions shall be referred to the Secretary of Budget and Management for resolution.