Composite image from Inquirer file photos
MANILA, Philippines — President Ferdinand Marcos Jr. has approved an increase in the monthly basic pay of more than 1 million civil servants in four yearly tranches starting this year and added an annual medical allowance of P7,000, Malacañang announced on Saturday.
The basic pay hike will apply to workers in all civilian agencies in the executive, legislative and judicial branches and will be implemented retroactively to Jan. 1, 2024, under Executive Order No. 64 signed by the President and Executive Secretary Lucas Bersamin on Aug. 2.
READ: DBM: Gov’t workers to get first salary increase tranche this year
The new round of four-year government pay hikes follows the 2020-2023 yearly increases under the salary standardization law (SSL) of 2019.
Government personnel receive compensation according to a salary grade system. There are 33 salary grades and eight steps for each, with the highest salary going to the President.
‘A need to update’
Under the new wage schedule, the lowest-paid government clerk currently receiving a monthly salary of P13,530 (Salary Grade 1, Step 1) would receive P15,208 by 2027, or a total increase of 12.4 percent in four years.
In comparison, a midlevel government employee (Salary Grade 16, Step 1) would be receiving P47,829 starting Jan. 1, 2027, 7.1 percent more than the P41,616 current pay.
The President’s monthly basic salary will increase by 9.8 percent from P428,994 to P459,469 over that period.
According to Marcos, the wage hike for government personnel was necessary “given the prevailing economic circumstances, including the erosion of purchasing power due to inflation.”
“(T)here is a need to update the salaries and benefits of government personnel in order to maintain a competent, committed, agile and healthy workforce,” he said.
Matching private sectorAccording to him, the salary adjustment would promote “social justice, integrity, efficiency, accountability and excellence, and ultimately translating to increased productivity and higher-quality public service.”
The pay raise will also include personnel of constitutional commissions and bodies, government-owned or -controlled corporations (GOCCs) not under Republic Act No. 10149, or the GOCC Governance Act of 2011, and Executive Order No. 150 in 2021, and the local government units.
“The compensation of all civilian personnel shall generally be competitive with the private sector in order to attract, retain and engage high-performing civil servants,” the President said.
He said the compensation scheme must be “within the financial capacity of the government” with the personnel services cost kept at a “reasonable level” in relation to overall government spending.
The President said the pay raise would be given to all government employees “regardless of appointment status, whether regular, contractual or casual, appointive or elective, and on full-time or part-time basis.”
The hike, however, will not apply to people hired through job orders, contracts of service based on projects, consultancy or service contracts where there is no employer-employee relationship between the government agency and the worker, according to the EO.
HMO plans
Aside from the wage increase, the President also ordered the grant of P7,000 in yearly subsidy to allow qualified civilian state workers to avail of benefits similar to what health maintenance organizations (HMOs) provide.
He directed the Department of Budget and Management (DBM) and the Governance Commission for GOCCs to come up with the appropriate guidelines for the implementation of these health benefits.
The heads of government agencies “may grant a similar medical allowance to their employees or continue to procure allowable HMO plans” subject to limitations and guidelines that the DBM may issue in consultation with these offices, Marcos said.
The President’s latest EO did not specify the number of government employees nationwide who will benefit from the salary increase.
According to the DBM’s National Government Agencies’ staffing summary for fiscal year 2024, there are a total of 1,979,564 permanent positions, with 1,810,428 filled up.
The permanent positions consist of 342 in constitutional offices, 27,531 key executive positions, 1,232,791 technical staff, 65,372 support staff, 159,656 administrative employees, 633 salary standardization law exempt positions, 3,987 part-time positions, and 489,570 military or uniformed personnel. The uniformed personnel are not covered by the increase as their pay scheme is funded separately.
The permanent positions exclude 178 ex-officio positions and the 140 positions earmarked for abolition once the placement of affected personnel in the newly created Department of Migrant Workers and National Authority for Child Care is completed.
Pangandaman order
Budget Secretary Amenah Pangandaman said that she had ordered her officials to finalize the guidelines for the release of the salary increase under Phase 6 of the salary standardization law (SSL VI).
“With this EO, we can now roll out the first tranche of SSL VI. We will rush the implementing guidelines so that government employees will see their first round of salary increases this 2024,” she said in a statement.
She said there would be a salary differential or back pay, but did not indicate whether this would be paid out as a lump-sum equivalent to seven months—from January to July.
“I am happy to announce that we would be able to fund the salary increase not just for 2024 but also for 2025,” Pangandaman said.
The DBM had earmarked P70 billion under the fiscal year 2025 of the Miscellaneous Personnel Benefits Fund (MPBF) to cover the cost of the first and second tranches of SSL VI.
An estimated P36 million would be spent for the first tranche in 2024. The money would be sourced from available allocations from the MPBF of the 2024 General Appropriations Act. —with a report from Inquirer Research