Constitutional and legal basis
- Executive Order No. 218 is issued by the President by virtue of the powers vested in the Constitution.
- It is anchored on Republic Act No. 6758, P.D. No. 985, and P.D. No. 1597.
- It also applies constitutional compensation timing rules through Section 6 of Article VII and Section 10 of Article VI.
Policy and second-year salary implementation
- The government adopts the new Salary Schedule contained in Joint Senate-House of Representatives Resolution No. 1, Series of 1994.
- The new salary schedule was initially implemented in 1994 in accordance with Executive Order No. 164 and National Compensation Circular No. 72.
- CY 1995 includes an appropriation of not less than P15.1 billion in the General Appropriations Act to cover, among others, the authorized second-year basic salary adjustment.
New salary schedule—amount and limit
- Section 1 directs the Department of Budget and Management to implement a second interim salary schedule effective January 1, 1995.
- The second interim schedule reflects an increase of one thousand pesos (P1,000) over the basic monthly salaries of government personnel as of December 31, 1994.
- Heads of all national government departments and agencies, including government-owned and/or controlled corporations and local government units, must not grant any compensation adjustment in excess of the authorized amount.
Coverage and who receives the increase
- Section 2 covers all officials and employees of the national government, government-owned and controlled corporations (including government financial institutions), and local government units.
- Coverage applies where the employees’ basic salaries conform to the new salary schedule prescribed under Executive Order No. 164.
- Officials and employees whose basic pay is higher than those prescribed under the new salary schedule are not entitled to the salary increase authorized herein.
Treatment of allowances and continuation
- Section 3 provides that Personnel Economic Relief Allowance and the additional compensation authorized under Administrative Order No. 53 continue to be paid as allowances.
- The allowance and additional compensation are not integrated into basic pay.
Funding sources and partial implementation
- Section 4(a) charges national government entities against appropriations set aside for the purpose in the 1995 General Appropriations Act and against savings generated from different departments, bureaus, offices, and agencies.
- Section 4(a) also provides that thereafter, needed amounts shall be included in the annual General Appropriations Act.
- Section 4(b) requires GOCCs to source funding from their respective corporate funds.
- Section 4(c) requires LGUs to charge funding against their respective local funds.
- GOCCs and LGUs without adequate funds must only partially implement the established rates.
- Any partial implementation must be uniform and proportionate for all positions within each corporate entity or local government unit.
Constitutional officials—timing of compensation adjustment
- Section 5 provides delayed effect for certain constitutional officials based on incumbent terms.
- For the President, Vice-President, and Members of the House of Representatives, the compensation adjustment takes effect only after the expiration of the respective term of the present incumbents.
- For Senators, the compensation adjustment takes effect only after the expiration of the term of all incumbents Senators.
Implementing guidelines and administration
- Section 6 directs the Department of Budget and Management to prepare and issue the necessary guidelines for implementing Executive Order No. 218.