Standard Incentive Pay System for Gov't Employees

Section 1 requires the institution of a standard system of incentive pay based on productivity and performance among government officials and employees.
The Order addresses the need to rationalize productivity incentive benefits under uniform guidelines to ensure fairness and equity.
The Order recognizes that the President has constitutional prerogatives under Section 17, Article VII of the 1987 Constitution, including determining rates, timing and schedule of payment, and committing limited resources for additional compensation and incentives.

Section 2 applies the incentive benefits to all appointive officials and employees of the national government, local government units, and government-owned and/or controlled corporations, including government financial institutions.
Eligibility covers casual, temporary and full-time contractual personnel whose employment is in the nature of regular personnel.
Eligibility requires that the employee obtained at least a satisfactory performance rating for the two (2) semesters immediately preceding the year when the incentive pay is released.
Eligibility further requires that the employee has contributed to the productivity of their office/agency as determined by the respective heads of agency.
Section 2 excludes officials and employees of government sequestered/foreclosed corporations covered by national labor laws being implemented by the Department of Labor and Employment from entitlement to the benefits under the Order.

Section 3 requires incentive pay to be based on individual personnel productivity and performance.
Section 3 provides that heads of offices/agencies evaluate and determine incentive pay in accordance with policies and standards set by the Civil Service Commission.
Section 3 allows the incentive amount to vary for each official/employee within an agency depending on individual performance appraisal, subject to Section 4.

Section 4 limits the total cost of incentive pay that any government agency may utilize in any one year.
Section 4 provides that the total cost shall not exceed an aggregate total computed at an average of P2,000.00 per occupied/filled-up position referred to in Section 2 as of end of CY 1994.
Section 4 applies the limitation to any government agency, including government-owned and/or controlled corporations, government financial institutions, and local government units.

Section 5 requires the Department of Budget and Management to set aside an Incentive Fund to be incorporated in the annual General Appropriations Act to cover requirements of the Order for the National Government.
For government-owned and/or controlled corporations, including government financial institutions, local government units, and project personnel, Section 5 requires funding to come from their respective corporate, local and project funds.
Section 5 authorizes government-owned and/or controlled corporations and government financial institutions and local government units to appropriate annually an amount to cover these benefits.

Section 6 requires the Department of Budget and Management to release funds from the Incentive Fund direct to the government office/agency involved.
Section 6 requires offices/agencies of the national government to submit, within the first quarter of the calendar year immediately following the two semesters during which the benefit was earned, a list of officials and employees entitled under the Order.
The submitted list under Section 6 serves as the basis for the release of funds.

Section 7 prohibits heads of departments, agencies, governing boards, commissions, offices, including government-owned and/or controlled corporations and government financial institutions and local government units, from establishing and authorizing a separate productivity and performance incentive award or any form of the same or similar nature.
Section 7 revokes administrative authorizations/decrees and related instruments that authorize incentives or bonuses under Sections 31, 35 and 36 (2), Chapter 5, Subtitle A, Title I, Book V of Executive Order Nos. 292 (the Administrative Code of 1987), including:
- administrative, memorandum, and/or orders authorizing such incentives or bonuses; and
- executive orders providing for such incentives or bonuses
Section 7 revokes the instruments described above unless the executive orders providing for the grant of said incentive award or bonus are not inconsistent with Administrative Order No. 161.

Section 8 enjoins strict compliance by all concerned with the provisions of Administrative Order No. 161.
Section 8 provides that anyone found violating the mandates—including all officials/employees and the COA Auditor-in-Charge of the government office/agency who is found to have taken part—shall be severely dealt with under the applicable provisions of existing penal laws.
Section 10 directs the Department of Budget and Management to issue the appropriate circulars for implementation.

Section 9 provides that cases not covered under the Order must be referred to the Department of Budget and Management for proper study and recommendation to the Office of the President.