Scope and Definitions
- "Government" refers to the Philippine government and its agencies
- "Foreign Service" includes officials/staff of Foreign Affairs, Trade, Finance, and others stationed abroad
- "Abroad" means outside Philippine territory
- Definition of key positions: Chief of Mission, Principal Officer
- "Prevailing Central Bank rate" refers to the official exchange rate for currency conversions
Position Classification and Salary Determination
- President to establish position classification and salary levels upon recommendations
- Initial classes/salaries maintained as per previous decree until modified
- Rules for salaries, salary differentials, and classifications to be approved by President
- Equivalence of positions of personnel from agencies other than Foreign Affairs to be determined for allowance computation
Allowances System for Foreign Service Personnel
- Includes Overseas, Living Quarters, Clothing, Post, Representation, Education, Medical, and Family Allowances
- Overseas Allowance adjusts for living cost changes and currency conversion effects
- Living Quarters Allowance supports representative living standards, not salary augmentation
- Clothing Allowance addresses climate-related costs
- Post Allowance covers official residence expenses
- Representation Allowance supports dignified representation of the Philippines abroad
- Education Allowance assists with dependent children’s schooling costs where free or English instruction is absent
- Medical Allowance covers expensive healthcare costs and insurance abroad
- Family Allowance aids personnel with dependents to meet increased expenses
Adjustment and Administration of Overseas Allowance
- Periodic upward or downward adjustment based on official price indices and currency fluctuations
- Secretary of Foreign Affairs and Central Bank Governor to compile data and recommend adjustments
- Joint recommendation to the President for changes, not more than once yearly
Currency Conversion and Payment of Salary
- Salaries paid in pesos or equivalent foreign currency at prevailing Central Bank exchange rate
- Exchange rate fluctuations compensated via overseas allowance
- Retirement benefits and other similar privileges also paid at prevailing exchange rates if retired abroad
Allowance Currency Denomination
- Allowances may be paid in US Dollars or local post currency
Taxation of Salary and Allowances
- Basic salary and allowances are subject to Philippine income tax laws
- Overseas allowance considered received in furtherance of Philippine interests for tax determination
Computation and Payment of Accumulated Leaves
- Unused vacation/sick leave paid at actual salary rate upon separation
- Payment in Philippine pesos, consistent with home office personnel treatment
- Accumulated leaves prior to enactment compensated under previous rules
Implementation of the Decree
- President responsible for issuing rules/regulations on compensation system details
- Transitional measures for non-Foreign Affairs agency personnel under budget agency funds
Repeal of Conflicting Laws
- Prior inconsistent laws, decrees, rules or parts thereof repealed or amended
- Includes specific parts of R.A. No. 708 and P.D. No. 905
Effectivity
- The decree took effect immediately upon enactment on January 13, 1978