Legal basis and policy purpose
- The Circular is issued to prescribe rules for the initial implementation of the new salary structure for the Armed Forces of the Philippines (AFP).
- Section 2 of Republic Act No. 9166 requires the adjustment of the rate of base pay of AFP officers and enlisted personnel according to specified salary grade assignments per rank.
- The Circular implements the adjustment timing and initial-phase coverage under the Implementing Rules and Regulations (IRR) of RA 9166.
- The Circular ties implementation to the base-pay concept used for computing other benefits such as longevity pay, year-end bonus, and retirement benefits.
Coverage: who is covered
- The Circular covers all officers and enlisted personnel of the AFP who are in the active service.
- The Circular covers cadets of the Philippine Military Academy.
- The Circular covers officer candidates.
- The Circular covers candidate soldiers.
Salary grade structure per rank
- Section 2 of RA 9166 assigns the following salary grades per rank for base pay adjustment:
- General — 30
- Lieutenant General — 29
- Major General — 28
- Brigadier General — 27
- Colonel — 26
- Lieutenant Colonel — 25
- Major — 24
- Captain — 23
- First Lieutenant — 22
- Second Lieutenant — 21
- Cadet/P2 Lt. — 19
- Chief Master Sergeant — 18
- Senior Master Sergeant — 17
- Master Sergeant — 16
- Technical Sergeant — 15
- Staff Sergeant — 14
- Sergeant — 13
- Corporal — 12
- Private First Class — 11
- Private — 10
- Candidate Soldier — 7
- The Circular’s initial-phase implementation follows the IRR’s requirement on the first implementation phase for base pay increases.
Initial implementation rules (base pay)
- The Circular defines “present base pay” for purposes of implementation as the base pay received as of September 30, 2002 as prescribed under Section 5.2.1 of National Budget Circular (NBC) No. 474, corresponding to the designated ranks.
- AFP officers and enlisted personnel’s base pay are adjusted effective October 1, 2002 using the rates in the First Interim Salary Schedule in Annex A.
- The adjustment rates in the salary schedule serve as the basis for computing longevity pay, year-end bonus, and retirement benefits.
- The Circular requires that the existing rates of all other allowances and collateral benefits be maintained.
Amount of initial increase and timing
- The IRR of RA 9166 provides that the increase in base pay is implemented in three (3) phases, with the initial phase implemented not later than October 1, 2002.
- The IRR’s initial phase implements the increase at a uniform rate of twenty percent (20%) of the base pay increase/differential authorized for each rank.
- The Circular operationalizes this initial-phase effective date through the October 1, 2002 adjustment under Annex A.
- The salary schedule in Annex A provides, by rank, the present monthly base pay, the adjustment, and the adjusted monthly base pay effective October 1, 2002.
Prohibitions on further pay adjustments
- Unless allowed by law and/or executive order, the Secretary of the Department of National Defense is prohibited from granting any adjustment in excess of the amounts authorized in the Circular.
- The prohibition applies to adjustments related to base pay implementation consistent with the Circular’s authorized amounts.
Funding and accountability for correct payment
- The amount necessary to initially implement the new Salary Schedule is charged against the appropriations savings of each Major Service and KBU of the AFP.
- Major Service and KBU Commanders are held liable for any payment of salary adjustment not in accordance with the Circular.
- Liability for incorrect payments does not prejudice the refund of any excess payment by the personnel concerned.
Handling cases not covered
- Cases not covered by the provisions of the Circular are referred to the Secretary of Budget and Management for resolution.
First Interim Salary Schedule (Annex A)
The First Interim Salary Schedule provides present monthly base pay per NBC No. 474, the adjustment, and the adjusted monthly base pay effective October 1, 2002 for AFP ranks.
The schedule sets the following amounts for selected ranks:
General — Present: 19,173; Adjustment: 1,165; Adjusted: 20,338
Lieutenant General — Present: 18,596; Adjustment: 668; Adjusted: 19,264
Major General — Present: 17,671; Adjustment: 684; Adjusted: 18,355
Brigadier General — Present: 17,094; Adjustment: 637; Adjusted: 17,731
Colonel — Present: 16,170; Adjustment: 666; Adjusted: 16,836
Lieutenant Colonel — Present: 15,477; Adjustment: 654; Adjusted: 16,131
Major — Present: 14,900; Adjustment: 626; Adjusted: 15,526
Captain — Present: 14,322; Adjustment: 602; Adjusted: 14,924
First Lieutenant — Present: 13,860; Adjustment: 561; Adjusted: 14,421
Second Lieutenant — Present: 13,167; Adjustment: 572; Adjusted: 13,739
Prob. 2nd Lieutenant — Present: 12,243; Adjustment: 459; Adjusted: 12,702
Cadet — Present: 11,319; Adjustment: 644; Adjusted: 11,963
Chief Master Sergeant — Present: 11,492; Adjustment: 445; Adjusted: 11,937
Sr. Master Sergeant — Present: 10,655; Adjustment: 457; Adjusted: 11,112
Master Sergeant — Present: 9,818; Adjustment: 478; Adjusted: 10,296
Technical Sergeant — Present: 8,893; Adjustment: 524; Adjusted: 9,417
Staff Sergeant — Present: 7,854; Adjustment: 602; Adjusted: 8,456
Sergeant — Present: 7,393; Adjustment: 571; Adjusted: 7,964
Corporal — Present: 6,468; Adjustment: 640; Adjusted: 7,108
Private, First Class — Present: 6,121; Adjustment: 600; Adjusted: 6,721
Private — Present: 5,775; Adjustment: 566; Adjusted: 6,341
Candidate Soldier — Present: 4,620; Adjustment: 485; Adjusted: 5,105