Government employees have a good reason to smile about after President Benigno Aquino signed an executive order last Friday (Feb. 19) granting the increase of their salary.
Aside from the salary hike, Executive Order no. 201 also authorized additional benefits of a 14th month pay equivalent to one month’s basic salary and productivity enhancement incentives of P5,000.
Department of Budget and Management Secretary Butch Abad, who visited Cebu last Friday, said the government has allotted P57.9 billion in the 2016 General Appropriations Act as source of funds.
Abad said the wage increase is divided into a four-year tranche with the first part to be implemented this year as an interim measure until Congress can pass the Salary Standardization Law.
In the EO, Salary Grade 1 employees’ basic salary will increase from P9,000 to P11,068.
Abad said the EO also covers employees of the Local Government Units provided that the budget for the salary hike will come from their own funds and comply with the Personnel Services limitations under the law.
Individuals whose services are engaged through job orders, contracts of service, consultancy contracts and service contracts with no employer-employee relationships will not benefit from the salary hike.
Quoting news reports, Abad said that the implementation of these compensation adjustments shall be effective Jan. 1, 2016.
The modified salary schedules for civilian employees, however, do not include the military and uniformed personnel and those working in the government-owned and controlled corporations covered by RA 10149.
Military and uniformed personnel, though, will be given a higher hazard pay, provisional allowance and officer’s allowance while compensation adjustments for employees of state-run firms are governed by their respective charters.
Because of the indexation law, hiking the basic salary of soldiers and uniformed employees would also increase the pension of retired personnel which may result in a fiscal crisis.
The EO states that the compensation adjustment strategy aims to bring the salary of government personnel closer to their private counterparts to at least 70 percent of the median of the market for all salary grades.