Legal basis and governing systems
- RA 7160 is the governing law for barangay officials’ compensation in the form of honorarium.
- Executive Order No. 332 is the basis for covering barangay government positions under the Revised Position Classification and Compensation System administered by the DBM.
- Section 391(10) of RA 7160 includes a restriction referenced in the circular, and the circular allows maximum honorarium changes that conform with later congressional and presidential adjustments.
- RA 6758 is referenced for the salary schedule and compensation system that governs barangay personnel classification under the prescribed rules.
- The circular links several employee benefits to laws and issuances, including the General Appropriations Act, Budget Circular No. 4, Administrative Order No. 53, RA 6686, Budget Circular No. 7, Administrative Order No. 161, Circular Letter No. 3-96, and National Compensation Circular Nos. 73 and 73-A.
Policy, purpose, and objective
- The circular establishes that barangay officials shall be compensated in the form of honorarium.
- The circular sets minimum honorarium rates for barangay leaders and mandatory members/personnel.
- The circular issues guidelines for position classification and compensation in the barangay government.
- The circular is intended to align barangay compensation with RA 7160 and Executive Order No. 332 (May 16, 1996).
Definitions and mandatory compensation minimums
- The minimum honorarium of the punong barangay is PHP 1,000 per month.
- The minimum honorarium of sanggunian barangay members, barangay secretary, and barangay treasurer is PHP 600 per month.
- The circular authorizes the sangguniang barangay to create positions deemed necessary to carry out barangay government purposes and to provide compensation.
- Barangay compensation rates are governed through the Revised Position Classification and Compensation System under the DBM.
Scope, coverage, and who is governed
- The circular governs barangay officials and barangay personnel for purposes of position classification and compensation.
- The circular governs honorarium/salary adjustments that are subject to availability of funds and the general limitation on personal services.
- The circular covers:
- Mandatory barangay officials (including the punong barangay and the sanggunian barangay officials enumerated in the circular),
- Barangay secretary and barangay treasurer,
- Barangay tanods and members of the Lupong Tagapamayapa.
- The circular addresses positions “other than those for mandatory barangay officials” that the barangay may create and compensate as salary or honorarium.
- The circular governs which benefits apply to different classes of barangay personnel based on whether they fall under salary-paid personnel covered by the classification/appointment rules referenced.
Honorarium adjustments, classification, and benefit rules
- Honorarium rates for barangay officials may be adjusted/increased subject to availability of funds and the general limitation on personal services.
- Any adjusted/increased honorarium rate shall not exceed the rate equivalent to the first step of the following salary grades where the barangay belongs:
- SG-14 for the punong barangay
- SG-10 for the sanggunian barangay members, barangay secretary and barangay treasurer
- Maximum honorarium/salary rates shall correspondingly change to conform with adjustments authorized by Congress and/or the President, notwithstanding the restriction under Section 391(10) of RA 7160.
- The sangguniang barangay may create positions other than mandatory positions, and such positions may be compensated as salary or honorarium at rates not exceeding the minimum of specified salary grades for indicative positions:
- Utility Worker I — Salary Grade 1
- Clerk I — Salary Grade 3
- Accounting Clerk I — Salary Grade 4
- Barangay Health Aide — Salary Grade 4
- Revenue Collection Clerk I — Salary Grade 5
- Day Care Worker I — Salary Grade 6
- Administrative Assistant — Salary Grade 8
- Positions compensated in the form of salary must be allocated to their proper position titles and salary grades under the Revised Index of Occupational Services, Position Titles and Salary Grades under LBC No. 61.
- Position titles not consistent with the referenced index must be approved by the DBM through the Compensation and Position Classification Bureau, in accordance with LBC No. 53.
- Barangay tanods and members of the Lupong Tagapamayapa may be granted honorarium, allowances, or other emoluments, provided the total amount shall not exceed the minimum salary rate for SG-1.
- Honorarium/salary rates must conform with the salary schedule implemented by the city or municipality where the barangay is located, as authorized under the implementing rules of RA 6758.
- If local funds are insufficient to implement the maximum rates, increases/adjustments must be made proportionately and uniform for all positions in the concerned local government.
- No increase in honoraria/salary under the circular’s framework may be made retroactive.
- Barangay personnel paid on a salary basis (for positions covered under the circular’s position creation rules) who have:
- positions classified under RA 6758, and
- issued appointments under the Civil Service law, rules and regulations
may be entitled to the following benefits in accordance with law, rules and regulations pertaining thereto, at rates not exceeding those provided for by pertinent law or presidential authority and guidelines authorizing the benefits: - Personnel Economic Relied Allowance — based on the General Appropriations Act and Budget Circular No. 4 as amended
- Additional Compensation — Administrative Order No. 53
- Year-End Benefits — RA 6686 and Budget Circular No. 7
- Productivity Incentive Benefits — Administrative Order No. 161, Circular Letter No. 3-96, and National Compensation Circular Nos. 73 and 73-A
- The grant of those benefits is subject to availability of local funds and approval of the barangay government.
- Officials and employees other than those referred to above are not entitled to those benefits, except for elective and mandatory appointive officials whose entitlement to year-end benefits is specifically provided by law.
Prohibitions on additional compensation
- The Punong Barangay/Sangguniang Barangay are prohibited from granting any adjustment in excess of the amounts authorized by the circular.
- The province and the city or municipality where the barangay belongs are prohibited from granting any additional compensation to barangay officials and employees in the form of honorarium or salary increase chargeable against any provincial, city, municipal, or barangay funds.
Funding, appropriation limits, and waivers
- Implementation of honorarium/salary adjustments must be funded from the respective barangay funds.
- The required amount must be included in an appropriation ordinance enacted by the Sangguniang Barangay, and then included in the barangay budget.
- The circular sets a personal services limit: appropriations for personal services for one (1) fiscal year must not exceed fifty-five percent (55%) of the total annual income actually realized from local sources during the next preceding fiscal year.
- The 55% limitation is waived for enforcing the minimum honoraria of PHP 1,000 for the punong barangay and PHP 600 for the other mandatory barangay officials, including increases/adjustments of those minimum rates under the circular.
- The personal services limitation is further waived for the continued implementation of the Compensation Standardization Law for the other employees contemplated under the circular’s salary-based positions rule.
Benefits limits, continuity, and separability
- Barangay officials/employees already receiving higher honorarium rates than authorized by the circular may continue to receive the higher rates.
- The continuation of higher rates is co-terminus with the present incumbent of the positions.
- If any section or provision of the circular is declared invalid, other sections/provisions not affected by the invalidity remain in full force and effect.
Saving clause and repealing clause
- Cases not covered by the provisions of the circular must be referred to the Secretary of Budget and Management for resolution.
- Local Budget Circular No. 58 dated July 7, 1995 and all other issuances, rules, and regulations inconsistent with DBM Local Budget Circular No. 63 are revoked/repealed accordingly.
Dissemination and implementation
- The concerned city and municipal governments must ensure that each component barangay receives a copy of the circular.
Effectivity timing and adoption
- The circular takes effect not earlier than January 1, 1996.
- The circular is adopted on 22 Oct. 1996, signed by Salvador M. Enriquez, Jr., Secretary.