President Benigno "Noynoy" Aquino III signed Executive Order No. 40 drafted by the Department of Budget and Management last April 29, 2011. This executive order implements the third tranche of modified salary schedule for civilian personnel and base pay schedule for military and uniformed personnel in the government of the Philippines. The salary schedule is part of the four-tranche increase in the pay of government personnel in the country that commenced last July 1, 2009. The yearly tranches cover the period from July 2009 to 2013. This will benefit more than a million government eimployees where about 75% are in the civil service. For local government employees, the implementation of the salary increase will be on the 1st day of January 2012.

Instead of the usual July 1 effectivity of the modified salary schedule, Executive Order No. 40 specifies that this should be granted by the 1st day of June 2011. This will be a timely release to help government employees keep up with the expenses necessary for the June opening of classes as well as the ever-increasing prices of goods and commodities.

The total amount required to implement the advanced implementation of the salary increase for 2011 is PhP2.8 billion. The amount will come from personal services savings, on top of the PhP19.46 billion already appropriated for government workers' salary increase from July 1 to December 31. Further, Department of Budget and Management Secretary Florencio Abad said that PhP14.9 billion will be required to fund the usual mid-year bonuses and half of the PhP5,000 cash gift of government employees. The mid-year bonus will be given to government employees who have rendered at least four months of service. Also, the salary increase will benefit those civilian government employees who are on the following status or position:

regular
contractual
casual
appointive or elective
rendering services on full time or part time basis

For the military and uniformed personnel, those covered by the salary increase are those working in the Armed Forces of the Philippines, the Philippine National Police, the Bureau of Fire Protection, the Bureau of Jail Management and Penology, and the Philippine Coast Guard. Personnel of the National Mapping and Resource Information Authority as well as employees of the local governments namely the city, municipal and barangay officials and employees are also covered by the salary adjustment. The LGU personnel will receive their increases on January 1, 2012 because local government units have just received their second tranche of salary increase last January 1, 2011. Their respective sanggunian have yet to determine the availability and sustainability of local government funds to implement the third tranche.

The implementation of the third tranche salary adjustment would provide differential increases in the salary of government employees based on their salary grade. Faculty members of the state universities and colleges follow the same increase in salary grades based on the corresponding positions they attained under NBC 461, a position classification and compensation scheme designed for those woking in the academe.

For details on the National Budget Circular, see NBC 530: Implementing Guidelines of the Third Tranche Salary Increase for 2011 issued by the DBM.

For update on salary increase for 2012, see Last Tranche of Government Employee's Salary Increase in 2012.

Sources:

Department of Budget and Management

Executive Order No. 40