P-Noy raises government pay sans Congress approval

MANILA, Philippines - About 1.5 million state employees are set to receive higher pay after President Aquino signed yesterday an executive order modifying the government’s salary schedule and providing additional benefits to civilian and uniformed personnel.

The signing of EO No. 201 came two weeks after Congress adjourned without passing the proposed Salary Standardization Law (SSL) 4, which would have implemented a four-year salary increase program for government workers.

Lawmakers failed to reach an agreement over a proposal by the Senate to index the pension of retired military and uniformed personnel to the salary increases of their active duty counterparts.

The budget department previously said there are no funds in this year’s budget for the indexation, which is expected to bloat the government’s pension requirements.

The House of Representatives’ version of the measure, meanwhile, did not hike the retired uniformed personnel’s pension.  

“We commend the President for his swift and decisive action in response to the congressional deadlock on the issue of the indexation of MUP (military and uniformed personnel) pension, which resulted in the non-passage of the proposed Salary Standardization Law of 2015,” Budget Secretary Florencio Abad said.

“This action by the President leverages the benefits package in order to increase the take-home pay of government employees as stipulated in the proposed SSL bills,” he added.

In the EO, Aquino said the salary adjustment would ensure that the compensation structure of government personnel is comparable with the prevailing rates in the private sector.

The new scheme will raise the minimum salary for Salary Grade 1 from P9,000 to P11,068.

Aquino said the adjustment would also maximize the net take-home pay of government workers through the inclusion of additional benefits.

Abad said the EO would implement compensation adjustment for this year as an interim measure to implement the first tranche of the proposed SSL.

He said the full-year requirement for the salary standardization has already been provided for in the national budget.

The modified salary schedule for civilian personnel will be implemented in four tranches.

The first tranche will be applied retroactively to Jan. 1, 2016. The succeeding tranches will be implemented every year until 2019.  

The EO also grants civilian government personnel a mid-year bonus equivalent to one month’s basic salary, and the productivity enhancement incentive worth P5,000.

The salary adjustment, however, will not cover workers of government-owned and controlled corporations (GOCCs) that are governed by their respective charters.

Presidential Communications Operations Office Secretary Herminio Coloma Jr.said salary adjustments for employees of state-run firms are provided for in the GOCC Governance Act of 2011.

Abad said GOCCs not covered by the GCG may implement compensation adjustments charged to their corporate funds.

Military and uniformed personnel, meanwhile, will not enjoy increase in their basic salary but will be given higher hazard pay, a provisional allowance and officers’ allowance.

Increasing the basic pay of active soldiers and uniformed personnel would also raise the pension of retired ones because of the law on indexation. Officials have previously called for pension reforms to reduce the funding requirements and avert a fiscal crisis.  

The monthly hazard pay for soldiers will be raised from P240 to P390 this year, P540 next year, P690 in 2018 and P840 in 2019. The officers’ allowance, meanwhile, will be given to those with the rank of captain up to four-star general and their equivalents. The allowance will range from P1,000 to P9,000 in the first tranche, P3,000 to 18,000 in the second, P4,500 to P25,000 in the third and P7,000 to P35,000 in the fourth tranche.

“LGUs (local government units) may also implement the compensation adjustments subject to the Personnel Services limitation under the law,” Abad said.

Compensation adjustments for the president, the vice president and members of Congress will only take effect after the terms of the incumbent officials expire.

“We trust that Congress will pass the SSL when it resumes so that the proposed compensation adjustments to be implemented in four tranches over four years will be permanent,” Abad said.  

“With its passage, we will be able to achieve the desired outcome of the proposed SSL, which is to bring the compensation of all government workers to at least 70 percent of the market rate,” he added.

Under the bill, basic salaries of the 1.53 million state employees and military personnel will rise by an average of 27 percent over a four-year period beginning this year.

From 2016 to 2019, the monthly basic salary of those under Salary Grade (SG) 1 will rise to P11,068 from P9,000. The president, who tops the salary ladder at SG 33, will see a pay increase to P388,096 from P120,000.

The pay adjustments will cost the government P225.82 billion from 2016 to 2019 divided as follows: P57.906 billion in 2016, P54.393 billion in 2017, P65.976 billion in 2018 and P47.544 billion in 2019.

Lawmakers welcome salary hike

Senate President Franklin Drilon lauded the President for finally signing the EO to raise the salaries of government personnel and vowed to work on getting the SSL4 approved in the next administration.

“I am glad that the President has finally signed the EO which will start the long-awaited pay hike for our dedicated and hardworking government employees,” Drilon said.

“However, given that the President’s EO will only cover the salary hike for this year, the challenge to implement the full four–year salary hike as envisioned remains with lawmakers,” he added.

Drilon said that this issue would have to be settled by Congress in the next administration and that if he succeeds in his bid for reelection, he would personally see to it that the SSL4 is one of the first bills taken up.

Sen. Antonio Trillanes IV, the sponsor of SSL4, said that the move of the President to implement the pay hike through an EO was welcome but would have been better had he included the increase in the pension of the military and police.

Trillanes said that he would continue to push for this provision in the SSL4 in the next administration.

Sen. Ralph Recto said that the EO issued by the President effectively “makes the provisions of the deadlocked bill on SSL4 permanent.”

“It does not merely implement the congressionally authorized funding for the first tranche but prescribes a new pay classification system, which must be funded in the coming years,” Recto said.

Leyte Rep. Martin Romualdez yesterday lauded Aquino’s decision to sign the EO.

“We laud this act of the President although it was long overdue. But since the EO will only cover this year’s pay hike, we should continue to remain steadfast to pass a law that would sustain the increase for the next three years, as originally planned,” he said.

“The big challenge is for the incoming Congress and the next president to guarantee that the increase will happen again in 2017, 2018 and 2019 to complete the objective of this four-year pay hike plan,” he said.

Meanwhile, government employees nationwide have set protest actions even as President Aquino ordered an increase in salaries of public officials and employees. – With Jess Diaz, Marvin Sy, Prinz Magtulis, Mayen Jaymalin