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House approves gov’t workers’ pay hike bill  on 2nd reading

/ 08:30 PM November 11, 2015

THE proposed pay hike for government workers was approved on second reading at the House of Representatives, just hours after it hurdled the committee.

The chamber approved House Bill 6268 on second reading by voice voting. It was sponsored by appropriations committee vice chair Camarines Sur Rep. Rolando Andaya.

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The proposed Salary Standardization Law (SSL) 2015  was approved on second reading just hours after the bill, which determines the salary increases of government workers in four tranches from 2016 to 2019, was approved by the appropriations committee.

The authors of the bill are Speaker Feliciano Belmonte Jr., Majority Leader Neptali Gonzales II, Minority leader Ronaldo Zamora, appropriations committee chair Davao City Rep Isidro Ungab, and accounts chair Romblon Rep. Eleandro Jesus Madrona.

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It was passed on second reading without being certified by President Aquino as urgent. A certification would have fast tracked the passage of the bill from second to third reading on the same day.

President Aquino endorsed the SSL 2015 to Congress on Monday after the budget department conducted a thorough study on the merits of adjusting the salary grades of public sector employees closer to the pay of their private sector counterparts.

In a statement on Monday, Budget Secretary Florencio “Butch” Abad said the proposed bill seeks a four-year P226-billion compensation hike for the government’s 1.53 million civilian and military and uniformed personnel.

The compensation package is composed of a salary increase, a mid-year 14th month pay, and an enhanced performance-based bonus (PBB) system, Abad said.

He added that the salary hike would increase the basic Salary Grade 1 from P9,000 to P11,068 a month.

The bill seeks to increase the basic salary of covered employees by an average of 27 percent. The 14th month pay will increase compensation by eight percent.

Meanwhile, the enhanced PBB is equivalent to one to two months’ salary or an average of 10 percent increase in salary.

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The bill also seeks to bridge the gap between the pay of employees in the public sector with their counterparts in the private sector.

Abad said under the bill, the lowest salary grade, Salary Grade 1, will be raised to about 154 percent of the market, while the highest salary grade belonging to the President will be about 70 percent of the market.

Government compensation in the average is estimated to increase by 45 percent and should be around 84 percent of private sector pay at the end of the four tranches, Abad said. The average government pay now is 55 percent of the market rate.

Abad said under the bill, the new compensation level for all salary grades will be at least 70 percent of the market; there will be no salary overlaps; and the link between pay and performance will be strengthened.

Due to the enactment of Republic Act 10653, which raised the tax exemption cap to P82,000, the 14th month pay and PBB will be tax-exempt for employees belonging to Salary Grades 1 to 11 who only receive the tax-exempt 13th month pay, the cash gift and the productivity enhancement incentive (PEI).

Meanwhile, only the 14th month pay will be tax-exempt for employees under Salary Grade 12 to 16 who receive the existing tax-exempt 13th month pay, cash gift and PEI.

The first tranche of the pay hike will take effect on Jan. 1, 2016 and thereafter until the final tranche in 2019.

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