Funds for gov’t pay hike out soon

Government agencies next week will receive additional money that will cover payments for the pay increase of state workers under Executive Order (EO) No. 201 earlier signed by President Aquino.

“The funds for the compensation adjustment and related fixed expenditures for civilian and military and uniformed personnel will be released next week to the agencies based on the number of filled positions as of Dec. 31, 2015. Funds for newly-filled positions after the December cut-off date shall be released separately and subject to submission of requirements,” Budget Secretary Florencio Abad said in a statement.

But government employees would have to wait for the actual release of their additional pay, which will be retroactive starting Jan. 1.

“The human resource office of agencies will, of course, need time to implement the procedures for salary adjustment and process the release of funds to employees,” Abad said.

According to Abad, state-run corporations covered by EO 201 will have the funds for the pay increase charged against their approved operating budgets.

In the case of local government units (LGUs), “the funds shall be charged against LGU funds subject to the personnel services limitation in LGU budgets and income classification,” Abad said.

“If the funds are insufficient to fully implement the salary schedule, the sanggunian [provincial, city, municipal or barangay council] may adopt a modified salary schedule with lower rates but at a uniform percentage of the rates in the applicable salary schedule provided in the circular,” he added.

The Department of Budget and Management (DBM) also on Wednesday issued National Budget Circular No. 562 and Local Budget Circular No. 108 to allow agencies to adjust compensation schedules beginning next week.

New allowances

“With the issuance of these circulars, the salaries of civilian personnel will be adjusted in accordance with the first tranche monthly salary schedule as provided in the EO. Likewise, the new allowances for military and uniformed personnel will be granted in accordance with the schedule provided in the EO. Meanwhile, the hazard pay for military and uniformed personnel shall be increased from the current rate of P240 per month to P390 per month,” Abad said.

Abad said that civilian personnel would receive salary differential while military and uniformed personnel will receive the hazard pay differential and new allowances due them retroactive to Jan. 1, 2016.

According to the DBM, the National Budget Circular “prescribes the guidelines for the implementation of the EO for civilian personnel in the executive, legislative and judicial branches, including constitutional commissions, state colleges and universities, and government-owned and -controlled corporations covered by the Compensation and Position Classification System.

The Local Budget Circular covers LGU personnel as well as barangay personnel positions that were being paid monthly honoraria, the DBM said.

Fiscal risk

As for military and uniformed personnel, Abad noted that EO 201 provides for two new allowances—

the provisional allowance and officers’ allowance, in lieu of a base pay hike. The government had been looking at tempering pension increases—seen as a fiscal risk—once the base pay of active military and uniformed personnel were jacked up.

Abad nonetheless pointed out that these new allowances “approximate the added remuneration had the base pay been increased.”

“[EO 201] is an interim measure to supplement the total compensation of military and uniformed personnel until such time that a pension reform measure is passed in Congress that will mitigate the impact of pension indexation,” Abad said.

“This will ensure that they will get at least the first tranche of the pay increase that we have planned for them,” he added.