EO No. 389 - 4th Year Gov't Salary Increase

Executive Order No. 389 is issued by the President of the Philippines, Fidel V. Ramos, under the powers vested by the Constitution and laws cited therein.
The authority includes P.D. No. 985, P.D. No. 1597, Republic Act No. 6758, Republic Act No. 8244, and Joint Resolution No. 1, series of 1994.
Executive Order No. 389 modifies the salary schedule previously adopted under Executive Order No. 164 dated March 7, 1994 (Section 1).
Executive Order No. 389 requires full implementation by the Department of Budget and Management in FY 1997 (Section 2).

Executive Order No. 389 directs full implementation in FY 1997 of the remaining balance of the salary schedule after partial implementation in 1994, 1995, and 1996 (Section 2).
Executive Order No. 389 establishes a modified salary schedule using 33 salary grades consistent with Republic Act No. 6758 (Section 1).
Executive Order No. 389 retains personnel economic relief and additional compensation as allowances rather than integrating them into basic pay (Section 5).
Executive Order No. 389 provides flexibility to local government units while requiring compliance with specified schedule rules and percentages (Section 8).

Section 1 modifies the 35-Grade Salary Schedule for civilian personnel recommended by Joint Resolution No. 1, s. 1994 and adopted under Executive Order No. 164 into a 33-Grades Salary Schedule consistent with Republic Act No. 6758.
Section 2 directs implementation of the remaining balance of the salary schedule for Civilian and uniformed personnel in two payments for the fourth and final year.
Effective January 1, 1997 (Civilian Personnel): the adjustment is to the designated salary step of the employee in the salary grade allocation of the position as of December 31, 1996, based on the Fourth Interim Salary Schedule in Annex A (Section 2(1)(a)).
Effective November 1, 1997 (Civilian Personnel): the adjustment is to the designated salary step of the employee in the salary grade allocation of the position as of October 31, 1997, based on the salary schedule in Annex B (Section 2(1)(b)).
Effective January 1, 1997 (Uniformed Personnel): implementation follows the Fourth Interim Salary Schedule in Annex C (Section 2(2)).
Effective November 1, 1997 (Uniformed Personnel): full implementation follows the salary schedule in Annex D (Section 2(2)).

Section 3 covers officials and employees of National Government Agencies (NGAs), GOCCs, GFIs, and LGUs whose basic salaries conform to the Third Interim Salary Schedule under Executive Order No. 290 dated January 2, 1996.
Section 3 withholds entitlement from officials and employees of agencies that are exempted by law from the Compensation and Position Classification System and/or do not follow the government personnel salary schedule required for government personnel.
Section 4 requires maintaining the salary grade allocation of positions pursuant to Republic Act No. 6758.
Section 7 prevents adjustments from increasing certain allowances and benefits tied to basic salary percentages.

Section 5 continues paying PERA and ADCOM authorized under Republic Act No. 7078 and Administrative Order No. 53, respectively.
Section 5 declares PERA and ADCOM as allowances and explicitly states they are not integrated into basic pay.
Section 6 treats the transition allowance arising from Republic Act No. 6758 and other subsequent personnel and compensation actions as advance payment of the salary increases authorized in Executive Order No. 389.
Section 6 applies a special rule for public school teachers and related personnel: their “over and above allowances” must first be added to the salary rate in the equivalent salary grade and step under the salary schedule in Annex B before determining the appropriate salary step in the new salary grade allocation.
Section 7 provides that, despite the salary increases authorized, there is no corresponding increase in existing allowances and benefits based on a percentage of basic salaries.

Section 8 grants each LGU flexibility to set its own schedule for implementation depending on its financial capability.
Section 8 requires that LGU implementation follow the schedule prescribed for civilian personnel in Section 1.
Section 8 requires strict compliance with the percentage application under Section 10 of Republic Act No. 6758.

Section 9 governs compulsory separation cases in 1997 but before full implementation on November 1, 1997, including separation due to reaching mandatory retirement age, or death, sickness/disability.
Section 9 provides that retirement/separation benefits, gratuity, and payment of accumulated leave credits shall be computed using the salary rate in Annex B corresponding to the employee’s previous designated salary step.
Section 9 provides an option for compulsory retirement due to mandatory retirement age under Republic Act No. 660.
Section 9 provides that the difference between the lump-sum amount under Republic Act No. 660 and the amount under Republic Act No. 1616 (had the employee retired under Republic Act No. 1616) shall be paid to the retiring employee by the last employer.

Section 10 specifies that funding for NGA salary increases is charged against the P27.0 Billion appropriated under Republic Act No. 8244 and set aside in respective FY 1997 budgets.
Section 10 states that funding for GOCCs and GFIs is charged against their respective corporate funds.
Section 10 states that funding for LGUs is charged against their respective funds.
Section 10 allows GOCCs, GFIs, and LGUs without adequate or sufficient funds to pay the increases to partially implement the prescribed rates.
Section 10 requires that any partial implementation use a uniform percentage so that no official or employee receives an adjustment percentage higher than that received by any other official/employee in the same corporate entity and LGU.

Section 11 prohibits the salary adjustment authorized in Executive Order No. 389 from benefiting the President, Vice President, and Members of Congress.
Section 12 requires the Department of Budget and Management to prepare and issue the necessary guidelines to implement Executive Order No. 389.

Section 2 bases the January 1, 1997 adjustments on the Annex A (civilian) and Annex C (uniformed) schedules.
Section 2 bases the November 1, 1997 full implementation adjustments on the Annex B (civilian) and Annex D (uniformed) schedules.
Section 9 uses Annex B for computing benefits for eligible separations before full implementation effective November 1, 1997.