Law Summary
Coverage
- Applies to all civilian personnel across Executive, Legislative, and Judicial branches, Constitutional Commissions, Constitutional Offices, certain GOCCs, and LGUs regardless of appointment status or work basis (full-time or part-time).
- Provisional Allowance and Officers’ Allowance apply only to MUP under DND, DILG, PCG, and NAMRIA.
- Mid-Year Bonus, Enhanced Performance-Based Bonus (PBB), and Productivity Enhancement Incentive granted to both civilian personnel and MUP.
- Hazard Pay increase applies only to MUP.
- Excludes individuals hired via job orders, consultancy, contracts without employer-employee relationship.
Modified Salary Schedule and Step Increments
- Salary Schedule adjustment for civilian personnel to be implemented over four tranches from 2016 to 2019.
- Comprehensive breakdown of salary grades and steps, with progressive increments from Step 1 to Step 8 within each grade.
Mid-Year Bonus
- Granted starting FY 2016, equal to one month’s basic salary as of May 15.
- Eligibility requires at least 4 months of satisfactory service and active employment on May 15.
- Given annually not earlier than May 15, in addition to existing Year-End Bonus and Cash Gift.
Enhanced Performance-Based Bonus (PBB)
- Existing PBB enhanced to strengthen results orientation.
- Amount ranges from one to two months basic salary.
- Phased implementation starting FY 2017.
- Eligibility based on achievement of agency and individual performance targets and good governance compliance.
- Progressive rate system tied to position and responsibility.
- Inter-Agency Task Force to establish eligibility rules and ranking system.
Productivity Enhancement Incentive
- Annual incentive of ₱5,000 starting FY 2016.
- Given not earlier than December 15.
- Aims to improve government employee productivity.
Provisional Allowance Schedule for Military and Uniformed Personnel
- Monthly Provisional Allowance granted in four tranches as an interim measure instead of base pay increases.
- Differentiated allowances per rank and department (DILG, DND, BJMP, BFP, PNP, PPSC, PCG, NAMRIA).
- Implemented until base pay schedule rationalization occurs considering pension implications.
Hazard Pay Increase
- Incremental increase from ₱240/month to ₱840/month by 2019 in four stages.
- Applies exclusively to Military and Uniformed Personnel.
Officers’ Allowance for MUP
- Provided to designated officer ranks as interim measure.
- Allowance rates increase over four tranches.
- Specific amounts assigned per rank and department, aligning with Provisional Allowance.
Compensation Adjustment for LGU Personnel
- LGUs may grant modified salary schedule and benefits subject to:
- Authorization by their respective sanggunian under RA No. 7160.
- Compliance with Personnel Services (PS) budget limitations.
- Salary schedule implementation depends on LGU income classification with specified percentage caps relative to national schedule.
- Barangay personnel to receive honoraria capped by LGU income classification, with bonuses and cash gifts adjusted accordingly.
Implementation Schedule
- Four-phase implementation from January 1, 2016 to January 1, 2019 for National Government Agencies.
- Corresponding increments for civilian personnel and allowances for MUP.
- GOCCs and LGUs to implement in at least four years based on financial capacity.
- Partial implementation allowed with uniform percentages across positions.
Retroactive Application
- First tranche effects retroactively effective January 1, 2016 for civilian personnel and MUP allowances.
- GOCCs and LGUs subject to financial capability and legal compliance for retroactive effect.
Entities Exempted from Coverage
- Government agencies and GOCCs exempt under their enabling laws or charters (including those exempted from RA No. 6758).
- GOCCs governed under RA No. 10149 with their own CPCS approved by the President.
- Such entities governed by their respective CPCS.
Applicability to Certain Officials
- Salary adjustments for President, Vice President, and Members of Congress shall take effect only after current terms expire.
- Cabinet members’ salary adjustments effective July 1, 2016.
Funding Source
- FY 2016 appropriations under GAA for national government agencies; subsequent years included in National Expenditure Program.
- GOCCs to fund from corporate operating budgets approved by DBM.
- LGUs to charge their respective funds consistent with relevant laws.
Implementing Guidelines
- Department of Budget and Management (DBM) to issue necessary guidelines to implement this Order.
Separability Clause
- Declared invalidity or unconstitutionality of any part does not affect validity of other provisions.
Repealing Clause
- All inconsistent rules, regulations, and issuances are repealed or modified accordingly.
Effectivity
- Effective immediately upon publication in a newspaper of general circulation.