Salary Standardization (SSL) Law Effective January 1, 2018, Third Tranche

                                                          EXECUTIVE ORDER NO. 201


WHEREAS, Congress, under Item 1 of its Joint Resolution No. 4, (s. 2009), inscribes, as among the governing principles of the Compensation and Position Classification System (CPCS), the payment of just and equitable compensation to all government personnel in accordance with the principle of equal pay for work of equal value and one that is generally comparable with those in the private sector doing comparable work in order to attract, retain and motivate a corps of competent civil servants;

WHEREAS, to ensure this, the same Joint Resolution sets a periodic review of the government’s CPCS taking into account the changes in skills and competency requirement in the bureaucracy, the relative demand for certain expertise, the possible erosion in the purchasing power due to inflation, and other factors;

WHEREAS, Section 13 of Presidential Decree No. 985 and Item 17 (iv) of the above Joint Resolution authorize the President, upon recommendation of the Department of Budget and Management, to periodically revise or update the CPCS as well as the policies on and levels of allowances, benefits and incentives applicable to all government personnel; and

WHEREAS, Congress has appropriated an amount of P57.91 Billion in Republic Act (RA) No. 10717 or the Fiscal Year 2016 General Appropriations Act (GAA), to cover the requirement to implement the compensation adjustment of civilian personnel and military and uniformed personnel in the National Government.

NOW THEREFORE, I, BENIGNO S. AQUINO, III, President of the Philippines, by virtue of the powers vested in me by law, do hereby order:

Section 1. Compensation Adjustment Strategy. To ensure that the compensation structure of government personnel is comparable with the prevailing rates in the private sector thereby attracting and retaining competent and committed civil servants, the existing CPCS is hereby revised or updated to conform with the following:

a) Raise the minimum salary for Salary Grade 1 from the current rate of Nine Thousand Pesos (P9,000) to Eleven Thousand Sixty Eight Pesos (P11,068) to make it even more competitive with the market rates;

b) Bring the compensation of government personnel closer to their private counterparts to at least 70% of the median of the market for all salary grades;

c) Eliminate overlaps in between salary grade allocations of government personnel to recognize differences in duties and responsibilities of the positions;

d) Maximize the net take home pay of government personnel through the inclusion of additional benefits; and

e) Strengthen the performance-based incentive system in recognition of government personnel who play a greater role and carry a heavier responsibility in attaining performance targets and delivering results.

For the military and uniformed personnel (MUP), the compensation adjustment strategy shall be aligned with the objective of mitigating the fiscal crisis building up in their pension system and pursuing the pension reform.

Section 2. Coverage. The modified Salary Schedule authorized herein shall apply to all civilian personnel in the Executive, Legislative and Judicial Branches, Constitutional Commissions and other Constitutional Offices, Government-Owned or Controlled Corporations (GOCCs) not covered by RA No. 10149, and local government units (LGUs); regardless of appointment status, whether regular, contractual or casual; appointive or elective; and on full-time or part-time basis.

The new Provisional Allowance Schedule and the Officers’ Allowance shall apply only to the military personnel of the Department of National Defense (DND) and the uniformed personnel of the Department of the Interior and Local Government (DILG), the Philippine Coast Guard (PCG) and the National Mapping and Resource Information Authority (NAMRIA).

The Mid-Year Bonus, Enhanced Performance-Based Bonus (PBB), and Productivity Enhancement Incentive provided herein shall apply to both civilian personnel, and MUP, except for the increase in Hazard Pay which applies only to the MUP.

However, individuals whose services are engaged through job orders, contracts of service, consultancy contracts, and service contracts with no employer-employee relationship are excluded from the salary increase and benefits authorized herein.

Section 3. Modified Salary Schedule, including Step Increments. The modified Salary Schedule for Civilian Personnel, to be implemented in four (4) tranches, shall be as follows:

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