DBM Manual On Position Classification and Compensation

FOREWORD
“Equal pay for substantially equal work and responsibility.” The principle
recognizes the fact that requirements and demands for performance vary in
relative degrees from position to position. Fairness and equity require that
similar or substantially similar positions should receive similar pay.
The Philippine Government, in administering the Position Classification and

Compensation System (PCCS) established under Republic Act No. 6758 or the
Compensation and Position Classification Act of 1989, is guided by this
universally accepted principle.
For this reason, positions in the government are grouped into classes by
occupational groups on the basis of similarity and level of work to determine
their relative worth. A reasonable gap between salary levels is maintained to
clearly define the distinction between the different job levels and recognize
gradations in duties and responsibilities.
Notwithstanding its noble objectives, the PCCS is not fully understood. This is
why the Department of Budget and Management (DBM) prepared this Manual on
Position Classification and Compensation.
The Manual is a comprehensive documentation of the policies, rules, regulations,

procedures and practices relative to the administration and maintenance of the
PCCS. It reflects the legal bases as well as recent issuances, circulars, and other
policy and procedural changes affecting the system.
It is hoped that this Manual will enhance the capability of officials and employees
concerned in the proper administration and maintenance of the PCCS.
ROLANDO G. ANDAYA, JR.

Secretary
Chapter 1, Overview of the Position Classification and Compensation
System, is devoted to the evolution of the PCCS starting from the American
Regime up to the enactment of RA No. 6758. It also includes the governing
principles, positions covered, parts, and objectives of the PCCS.
Chapter 2, The Position Classification Plan (PCP), discusses the concepts and
contents of the PCP. It also discusses the position classification factors, the
position classification process, including the policies, rules and regulations on the
administration and maintenance of the PCP.
Chapter 3, The Compensation Plan (CP), contains the concepts of

compensation, compensation policy of the State, governing principles of the CP,
and the general guidelines governing government compensation. It describes
the salary schedule, salary rules, policies and guidelines related to additional
compensation and benefits, and states how the CP is maintained.
The Responsibility Centers in the Administration of the Position

Classification and Compensation System are discussed in Chapter 4 while
the Salary Grades of Constitutional and Other Officials and Their
Equivalents are discussed in Chapter 5.
Chapter 6, Position Classification and Compensation Scheme for

Teaching Positions in Elementary and Secondary Schools, comprises
topics on the teacher’s preparation pay schedule and its coverage, basis of
position classification, salary grades, compensation benefits and the career
progression system for public school teachers.
Chapter 7, Position Classification and Compensation Scheme for Faculty

Positions, includes discussions on the common criteria for evaluation,
qualitative contribution evaluation, determination of appropriate ranks and
salaries, evaluation cycle and the additional compensation for faculty members in
State Universities and Colleges. Likewise included in the discussions are the
manner, selection and appointments to faculty ranks.
Chapter 8, Position Classification and Compensation Scheme for Foreign

Service Personnel shows the coverage of Republic Act No. 7157 or “The
Philippine Foreign Service Act of 1991.” It enumerates the designations of
foreign service personnel when assigned abroad and when recalled to the home
office and describes their system of allowances. It likewise discusses the
assignment, accreditation, appointment and determination of assimilated ranks
of service attaches for compensation purposes.
Chapter 9, Position Classification and Compensation Scheme in Local
Government Units, includes guidelines on position classification, creation of
new positions/offices and of a new class of positions. The compensation scheme
includes guidelines on basic pay, adoption of higher salary schedule, step
increments, allowances, and other forms of compensation and benefits.
As the need arises, changes in this Manual will be issued by the DBM. The loose-
leaf form has been adopted for easy insertion of changes in the Manual.
The Human Resource Management Officers or equivalent officers of agencies

are requested to maintain their copies of the Manual in current status.
ACKNOWLEDGMENT
-----------------------------------------------
The DBM, through the Organization, Position Classification and Compensation

Bureau (OPCCB), greatly appreciates the contribution of the following DBM
officials and staff in the preparation of this Manual:
To then Secretary Emilia T. Boncodin, whose vision and direction paved the
way for the preparation of the Manual;
Undersecretary Cynthia G. Castel, for the introduction of new ideas and

approaches used in the Manual;
OPCCB Director Solita S. Recolizado and Assistant Director Clemente Z.

Sosito who guided previous and existing OPCCB complement, namely: Ms.
Gloria E. Lauzon, Ms. Arceli J. Arcaina, Mr. Edgardo M. Macaranas, Ms.
Sharlene L. Raquitico, Ms. Maria Theresa Beverly M. Tirol-Wadel, and
Ms. Maria Lourdes Z. Trinidad-Aganon and their technical staff in the
preparation of their respective assigned chapters;
To other staff of the OPCCB, namely: Ms. Rose V. Nera, Ms. Arlene J.
Opolento, Mr. Rodel G. Orantes, and specially Ms. Emilia V. Nobleza who
rendered invaluable administrative services in the preparation of the Manual; and
Ms. Sharlene L. Raquitico, for updating and editing the Manual with the
support of the present OPCCB staff.
MYRNA S. CHUA
Director
Chapter 1
Overview of the Position Classification and

Compensation System
The Position Classification and Compensation System in the

Philippine Government evolved as follows:
1.1 The American Regime
During the first three years of the American regime (1898-1900), there
was no formal position classification and salary administration system in
the Philippines. The common designations of positions in the government
service were clerk, employee, inspector, teacher, translator-interpreter,
stenographer-typist and janitor-messenger. To indicate levels of
difficulty, adjectives such as deputy, assistant and chief were used.
Salaries were paid in Mexican dollars and Spanish-Filipino pesos were set
at certain levels. Higher salaries, however, were reserved for the
Americans to attract them to join the civil service. Salaries, on the other
hand, for new positions were arbitrarily fixed by legislative prerogative.
The depreciation, however, of the said currencies coupled with the
problems of daily life placed the morale of civil servants on a rather low
profile.
To resolve the problem, Act No. 5 entitled, “An Act for the Establishment
and Maintenance of an Efficient and Honest Civil Servants in the
Philippines,” was enacted by the Philippine Commission on September
19, 1900. Among the salient provisions of said Act were the creation of
the Philippine Civil Service Board which was the forerunner of the Civil
Service Commission, the delineation of its powers and functions and the
establishment of rules and regulations especially those on position
classification.
Notwithstanding the established salary rules, the Americans were paid

higher salaries than Filipinos occupying similar positions in the civil
service.
1.1.1 Act No. 102
To uplift the economic status of civil servants and to attract

and retain qualified and competent staff, the Philippine
Commission passed Act No. 57 in December 1900
directing the Philippine Civil Service Board to conduct a survey
of salaries in the civil service.
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Manual on Position Classification and Compensation
Based on the results of the said survey, a readjustment plan

was submitted by the Philippine Civil Service Board
to the Philippine Commission which in turn passed Act No.
102 entitled, “An Act Regulating the Salaries of Officers and
Employees in the Philippine Civil Service,” dated March 9,
1901. Act No. 102 categorized officers and employees of the
civil service into 2 general groups based on their salaries
rather than on their duties and responsibilities. The first group
consisted of 10 classes (1 to 10); the second group, 11 classes
(A to K); or a total of 21 classes.
Exempted from the Act were the officers of the Department of

Mindanao and Sulu. The Governor-General, with the consent
of the Philippine Commission, fixed the salaries of the officers
of this Department.
With the establishment of the monetary system of the

Philippines, the salary rates provided in the salary scale under
Act No. 102 were adjusted from dollars to pesos at the rate of
$1 to P2 effective August 26, 1907 pursuant to Act No. 1698.
The revised salary scale was followed for many years until the
First World War.
1.2 The Commonwealth Regime
The economic depression brought about by the First World War forced
the Philippine Legislature and private firms to cut the salaries of their
employees. Prices of commodities rose steadily. To alleviate the
economic plight of the civil servants, the Philippine Legislature created
the Government Survey Board in 1936 under Commonwealth Act No. 5
to conduct a factual survey of all government departments and submit
recommendations concerning, among others, classification of positions.
After a two-year survey, the Board found out that civil servants were
paid on the basis of their civil service eligibilities and not on their duties
and responsibilities. Promotions, on the other hand, were based on
length of service.
1.2.1 Commonwealth Act No. 402
To eliminate the said inequities, a Personnel and Salary

Standardization Board was created to classify positions based on
duties and responsibilities and standardize salaries of civil
service personnel. The recommendations of said Board were put
into effect by virtue of Commonwealth Act (CA) No. 402 entitled,
“An Act to Provide for the Classification of Positions and
Standardization of Salaries in the Government,” dated
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Overview of the Position Classification and Compensation System
September 13, 1938. Said law was patterned after the US

Classification Act of 1923, as amended in 1930.
CA No. 402 created a Salary Board composed of the

Commissioner of Civil Service as Chairman and the
Commissioner of the Budget and the Auditor General as
Members. It provided for a schedule consisting of 10 grades
with 3 salary rates per grade, except Grade 10 which had only
2 salary steps. The classified positions were grouped into 7
services: administrative, professional and scientific, educational,
navigation, vigilance, sub-professional, and craft and labor.
The law covers all officers and employees embraced in the

classified and unclassified service except the following:
• Elective officers and officers whose compensation were

fixed in the Constitution;
• Officers chosen by the National Assembly in accordance
with the Constitution;
• Employees stationed outside the territorial limits of the
Philippines;
• The President, deans of colleges, directors of schools, the
registrar, the business director, and members of the
teaching staff of the University of the Philippines;
• Commissioned and enlisted members in the active service
of the Philippine Army;
• Persons in the military, naval or civil service of the United
States who were appointed or detailed to perform duties in
the Government of the Commonwealth; and
• Employees declared by the President of the Philippines as
primarily confidential or highly technical.
The law also provided for special groups of positions, the

Executive Group and the Judicial Group which were not subject
to classification by the Salary Board. It likewise provided for
compensation differentials for employees (a) stationed in
disease-infected areas; (b) stationed in places subject to
criminal elements; (c) assigned for not less than 3 consecutive
months to work earlier than 6:00 A.M. or later than 8:00 P.M.;
and (d) required to wear uniforms not furnished by the
government.
During the Second World War, the Salary Board was renamed
Salary Committee with the Auditor General as Chairman. The
number of national government employees as well as their
salaries were reduced due to drastic changes in the organization
of the Philippine Government, as well as in the economy. To
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cushion the effects of inflation, bonuses were granted to

government officials and employees based on the number of
immediate dependents.
1.3 The Philippine Republic
After the Liberation in 1945, the Salary Board was reactivated. The
classification of positions made by the Salary Board in 1938 was revised
but it was not updated. The rates of pay in CA No. 402 were nominally
applied.
In 1947, when the government was reorganized, the powers and

functions of the said Board were transferred from the Commissioner of
the Civil Service to the Commissioner of the Budget. Pursuant to
Executive Order (EO) No. 94, s. 1947, the grades of positions and rates
of salaries provided under CA No. 402 were converted into 37 grades
with single rates.
To relieve civil servants from the economic difficulties brought about by

the Second World War, Congress enacted 3 minimum wage laws which
were adopted for the entire country. However, these laws led employees
in the middle and upper pay levels whose salaries were pegged at pre-
war levels to clamor for higher salaries. Congress sought solution in
piece-meal pay increases for certain groups of employees or
occupational groups which gave way to pay disparities and inequities.
This situation went on for several years until 1957.
1.3.1 The Position Classification and Pay Plans of 1957
On June 4, 1953, the Philippine Government commissioned

Louis J. Kroeger and Associates of San Francisco, California, to
conduct a position and wage survey, to submit a position
classification plan, a pay plan, and cost estimates to carry out
the plans. The firm would also train government personnel in
position classification and in determining salaries. This
undertaking resulted in the establishment of the Position
Classification Plan, the Pay Plan, and the Wage and Position
Classification Office (WAPCO) under Reorganization Plan Nos. 1-
A, 2-A, and 3-A, respectively.
The WAPCO classified positions on the bases of duties and

responsibilities and qualification requirements. Positions that
were sufficiently alike as to duties, level of responsibilities and
qualification requirements in terms of education, experience,
knowledge, skills and abilities were given the same descriptive
title and the same test of fitness.
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The Plans covered all positions in the national government and

its instrumentalities, including quasi-public corporations.
Exempted therefrom are the following:
• Elected officials and officers whose compensation were

fixed in the Constitution;
• Officers and employees of the legislative and judicial
departments of the government;
• Secretaries and undersecretaries of departments of the
government;
• Members of the Armed Forces;
• Officers and employees of the Foreign Service; and
• Provincial and municipal local officials.
The Position Classification Plan consisted of occupational groups,

classes and class specifications or standards and the rules and
regulations for its administration. The Pay Plan consisted of a
salary schedule with 75 salary ranges and the salary rules. Each
salary range had 5 salary steps. Each salary step was
approximately 5% higher than the immediately preceding step.
The spread between the minimum and maximum rates of a
salary range was approximately 22%.
The Pay Plan also had a built-in mechanism for periodic pay
progression to provide incentives for better performance and
recognize length of service through step increases. Due to
funding constraints, however, these schemes were not
implemented.
When the Position Classification and Pay Plans were adopted on

July 1, 1957, there were 237 occupational groups and 2,259
classes into which 183,000 regular positions were classified. Due
to inadequate funds, the salaries of civil servants covered by the
Plans were adjusted in 3 installments. The first adjustment was
30% of the difference between the minimum rate of the salary
range of the position and the actual salary of the incumbent.
The second and third adjustments which were both 35% of the
said difference were granted on July 1, 1960 and July 1, 1961,
respectively.
From 1959 to the middle part of 1976, the concepts and

principles of position classification and salary standardization
were not fully appreciated by government functionaries because
of the inability of the government to grant adequate salary
increases. Consequently, exemptions from the coverage of the
WAPCO Plans followed one after the other.
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1.3.2 The Budgetary Reform Decree on Compensation and

Position Classification of 1976
With the advent of the New Society, the President issued on

August 22, 1976 Presidential Decree (PD) No. 985 known as
“The Budgetary Reform Decree on Compensation and Position
Classification of 1976,” in conformity with the following provision
of Article XII-B, Section 6 of the 1973 Constitution:
“The Batasang Pambansa shall provide for the

standardization of compensation of government
officials and employees, including those in
government-owned and controlled corporations,
taking into account the nature of the responsibilities
pertaining to, and the qualifications required for, the
position concerned.”
PD No. 985 provided for the creation of the Office of

Compensation and Position Classification (OCPC) and the
abolition of the WAPCO. It declared the policy of the
government to provide “equal pay for substantially equal work
and to base differences in pay upon substantive differences in
duties and responsibilities and qualification requirements of the
positions. In determining rates of pay, due regard shall be given
to prevailing rates in private industry for comparable work.”
The salary schedule under PD No. 985 had 28 salary grades.

Each salary grade consisted of 8 steps. The difference between
2 successive salary grades was ten (10) “1%” increments. The
difference between steps is five (5) “1%” increments. The salary
steps were increased from 5 to 8 to enable employees to
receive salary increases as rewards for exemplary
performance. The last 2 or 3 salary steps were intended for the
longevity steps of employees who could not be promoted to
more difficult positions because of limitations in qualification
requirements and/or abilities.
The reduction from 75 salary ranges to 28 salary grades

required the compression of the existing occupational groups to
a more manageable size. It also required the consolidation of 2
or more related classes into a class where duties and
responsibilities were sufficiently alike in terms of difficulty, skills
and qualification requirements.
When PD No. 985 was issued, there were 282 occupational

groups and 4,388 classes in which 575,756 regular positions
were classified.
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The National Compensation and Position Classification System

provided for in PD No. 985 was applied to all positions, whether
permanent, temporary, or emergency in nature, or on full-time
or part-time basis. Nine (9) groups of officials and officers were
exempted from the coverage of PD No. 985. These exemptions
were reduced to 2 groups under PD No. 1597 entitled, “Further
Rationalizing the System of Compensation and Position
Classification in the National Government.” They are: (1) elected
officials and officers whose compensation were fixed in the
Constitution and; (2) local government personnel whose
compensation were governed by PD No. 1136.
In addition to a standardized salary system, PD No. 985

provided for allowances, bonuses, and other benefits that shall
accrue to officials and employees. This law expanded the
concept and coverage of compensation administration.
1.3.3 The Compensation and Position Classification Act of

1989
Through the years, the increasing number of exemptions from

the coverage of the Compensation and Position Classification
System established under PD No. 985 through presidential
decrees and other presidential issuances undermined the
System which was not fully implemented. Special salary
increases and additional compensation were likewise granted
to personnel holding positions belonging to certain
occupational groups and to personnel of so-called “critical”
government agencies which resulted to the proliferation of
several salary schedules under the Compensation Plan. These
laws also brought about salary disparities among government
agencies which in turn gave rise to demoralization and
dissatisfaction among government employees. Thus, the morale
among many of the civil servants declined and the quality of
public service deteriorated.
Faced by the grim realities of the past, the President signed into
law RA No. 6758 entitled, “An Act Prescribing a Revised
Compensation and Position Classification System in the
Government and for Other Purposes” or “Compensation and
Position Classification Act of 1989,” on August 21, 1989. This is
also popularly known as the Salary Standardization Law (SSL).
The law is the culmination of a painstaking study undertaken by

the Department of Budget and Management with the end in
view of putting into realization the provisions of Section 5,
Article IX-B of the 1987 Constitution which mandates that:
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“The Congress shall provide for the standardization of

compensation of government officials and employees,
including those in government-owned and/or
controlled corporations with original charters, taking
into account the nature of the responsibilities
pertaining to, and the qualifications required for their
positions.”
1.3.3.1 Principles Governing the Position Classification

and Compensation System (PCCS)
The PCCS is governed by principles enunciated in RA

No. 6758, as follows:
• All government personnel shall be paid just and

equitable wages in accordance with the principle of
equal pay for substantially equal work. Differences
in pay shall be based upon substantive differences
in duties and responsibilities and upon the
qualification requirements of positions;
• Basic compensation for all personnel in the

government and government-owned or controlled
corporations and financial institutions shall
generally be comparable with those in the
private sector doing comparable work, and must
be in accordance with prevailing laws on minimum
wages;
• The total compensation provided for government

personnel must be maintained at a reasonable
level in proportion to the national budget; and
• A review of government compensation rates taking

into account possible erosion in purchasing power
due to inflation and other factors shall be
conducted periodically.
1.3.3.2 Positions Covered by the PCCS
The PCCS applies to all positions in national and local

governments, government-owned or controlled
corporations (GOCCs) and government financial
institutions (GFIs), elective or appointive, full-time or
part-time, existing or still to be created. It does not
apply to those expressly exempted by law from the
coverage of the PCCS and those hired as part of a
1-8
contract, paid on piecework or job order basis,

including mail contractors and others similarly
situated.
1.3.3.3 Parts of the PCCS
The PCCS is composed of the Position Classification

Plan (PCP) and the Compensation Plan (CP).
• The PCP is an orderly scheme which provides the

criteria and the standards for the classification of
positions.
• The CP is an orderly scheme for determining rates

of compensation for positions. It is based on the
principle of equity and requires uniform and
definite application.
1.3.3.4 Important Features of the PCCS
• Grouped classes of positions into 4 main

categories, namely:
♣ Professional Supervisory;
♣ Professional Non-Supervisory;
♣ Sub-Professional Supervisory; and
♣ Sub-Professional Non-Supervisory.
• Revised the salary schedule from 28 to 33 salary

grades and prescribed the rules and regulations for
its implementation;
• Assigned the salary grades of constitutional

officials and their equivalents and mandated the
DBM to determine the officials who are of
equivalent rank;
• Established benchmark positions as an aid to

position classification and salary grade allocation;
• Provided for step increments based on merit or

length of service;
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• Reduced the number of classes of positions in the

national government from more than 5,000 to
about 2,400; and
• Integrated allowances and other compensation

into the standardized salary.
1.3.3.5 Objectives of the PCCS
The PCCS serves as a tool for effective management,

organizational analysis, budgeting and fiscal control,
and as an information tool for the general public or
taxpayers.
• As a tool for effective management:
♣ Standardizes salaries, allowances and benefits

of officials and employees;
♣ Enables both the supervisors and employees to

understand the job content and pay level of
positions;
♣ Provides basis for the evaluation of the

performance of officials and employees;
♣ Raises morale by enabling an employee to

identify his/her position in the organization and
to understand the job expected of him/her;
♣ Provides basis for the development of training

programs; and
♣ Provides the management of a government

agency with the necessary standards on which
qualification requirements for recruitment,
testing, selection and placement can be based.
• As a tool in organizational analysis:
♣ Highlights problems of overlapping and

duplication of functions or redundancies in a
government agency;
♣ Aids in the accurate analysis and review of

functions of a government agency.
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♣ Facilitates the preparation of staffing patterns

of government agencies;
♣ Contributes to the effective placement of an

employee with regard to his job and abilities;
and
• As a tool in budgeting and fiscal control:
♣ Establishes common terminologies for budget

requests for personal services;
♣ Provides standardized compensation for similar

services among government agencies;
♣ Serves as basis for accurate payroll reporting

and analysis; and
♣ Provides a basis for validating allotments and

expenditures.
• As an information tool:
♣ Provides information to taxpayers on the kinds

of positions in the government and how much
these positions are paid.
For easy reference, a matrix on the evolution of the PCCS from the American
Regime to the enactment of RA No. 6758 is presented in Annex A of this
Chapter.
Discussions on the American and Commonwealth Regimes were based on the book by
Tomas W. Flores, “Compensation and Position Classification in the Philippine
Government, 1900-1978,” (Malacañang, Manila: Ministry of the Budget, 1978).
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Annex A
The Evolution of the Position Classification and Compensation System in the Philippine Government
American Commonwealth
Particulars Regime Philippine Republic
Regime
Legal basis Act No. 102, “An Act Commonwealth Act No. Reorganization Plan 1- Presidential Decree No. Republic Act No. 6758, the
Regulating the Salaries of 402, “An Act to Provide A (The Position 985, “Budgetary Reform “Compensation and Position
Officers and Employees for the Classification of Classification Plan), and Decree on Compen- Classification Act of 1979,”
in the Philippine Civil Positions and Standardi- Reorganization Plan2-A sation and Position dated August 21, 1989
Service,” dated March 9, zation of Salaries in the (The Pay Plan) both Classification of 1976,”
1901 Government,” dated dated May 5, 1956 dated August 22, 1976
September 13, 1938. as amended by PD No.
1597, dated June 11,
1978
Bases of classification Salary Duties and responsibilities Duties, responsibilities Duties, responsibilities Duties, responsibilities and
of the position and qualification re- and qualification re- qualification requirements
quirements of the quirements of the of the position
position position
Coverage Officers and employees of Officials and employees All positions in the All positions in the All positions in the govern-
the Philippine Civil Service embraced in the classified national government national government, ment, including govern-
and unclassified service and its instrumentalities, including government- ment-owned and controlled
including quasi-public owned or controlled corporations and govern-
corporations corporations and ment financial institutions
government financial
institutions
Exemption Officers and employees of 1. Elective officers and 1. Elected officers and 1. Elected officers and Those expressly exempted
the Department of officers whose com- officers whose com- officers whose com- by subsequent laws
Mindanao and Sulu pensation were fixed pensation were fixed pensation were fixed
in the Constitution in the Constitution in the Constitution
2. Officers chosen by the 2. Officers and emplo- 2. Local government

Regime
National Assembly in yees of the officials and emplo-

accordance with the legislative and judi- yees, who were
Constitution cial departments of governed by PD No.
the government 1136
3. Employees stationed
outside the territorial 3. Secretaries and
limits of the undersecretaries of
Philippines departments of the
government
4. The President, deans
of colleges, directors 4. Members of the
of schools, the Armed Forces
registrar, the business
director and members 5. Officers and emplo-
of the teaching staff yees of the Foreign
of the University of Service
the Philippines
6. Provincial, municipal
5. Commissioned and and local officials
enlisted members in
the active service of
the Philippine Army
6. Persons in the
military, naval or civil
service of the United
States who were
appointed or detailed
to perform duties in
the Government of the
Commonwealth
7. Employees declared
by the President of
the Philippines as
primarily confidential
or highly technical
Regime
Number of 7 services 19 occupational services

services/
occupational
services
Number of 2 groups (first and second) 237 occupational groups 271 occupational groups 206 occupational groups
occupational groups
Number of classes 21 classes of positions 2,259 classes of Number of classes were Number of classes were
of positions positions reduced from 4,300 to reduced from more than
2,700 5,000 to 2,541
Salary structure First Group (10 classes – 1 10 grades with 3 rates of 75 salary ranges with 5 28 salary grades with 8 33 salary grades with 8
to 10) compensation salary steps each salary steps each salary steps each
The highest, Grade 1, had
Second Group (11 classes – 3 rates.
A to K) The lowest, Grade 10,
had 2 rates.
Agency responsible Civil Service Board Salary Board was Wage and Position Office of Compensation Compensation and Position
composed of the renamed Salary Commi- Classification Office and Position Classifi- Classification Bureau
Commissioner of the Civil ttee during WW II. (WAPCO), Budget cation (OCPC), Budget (CPCB), now Organization,
Service Commission as Chairmanship was trans- Commission Commission Position Classification and
Chairman and Commi- ferred to the Auditor- Compensation Bureau,
ssioner of the Budget and General in 1945 and to Department of Budget and
the Auditor-General as the Commissioner of the Management
Members Budget in 1947.
Chapter 2
The Position Classification Plan
2.1 The Position Classification Plan
The Position Classification Plan (PCP) consists of occupational services,

occupational groups, classes in series, specifications or written
descriptions of the classes and the rules and procedures for the
administration and maintenance of the Plan.
2.2 Concepts of Position Classification
2.2.1 The position is the basic unit of an organization. It is a set of

current duties and responsibilities assigned by competent
authority to be performed by an individual either on a full-time or
a part-time basis. It may be filled or vacant.
2.2.2 Positions are grouped by class on the basis of similarity of kind

and level of difficulty and responsibility of work.
2.2.3 As a general rule, only the duties and responsibilities of the

position are considered in position classification and not the
incumbent’s qualifications, except teaching positions where the
incumbent’s education, relevant training and experience and other
factors are considered.
2.3 Grouping of Classes Under the PCP
A class consists of all those positions having sufficiently similar duties,

responsibilities and qualification requirements such that they can be
given the same position title, salary grade, and for all administrative and
compensation purposes, be treated alike. Example: Public Health Nurse
I.
The classes in the PCP are grouped into the following:
2.3.1 Series
A series consists of one or more classes of positions which are

similar as to specialized line of work, arranged by level of
difficulty and responsibility. Example: Public Health Nurse. This
series is composed of Public Health Nurse I, Public Health Nurse
II and Public Health Nurse III.
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2.3.2 Occupational Group
An occupational group consists of one or more series of classes of

positions in the same or related occupation or occupational area.
Example: Under the Medicine and Health Service is the Nursing
Group.
2.3.3 Occupational Service
An occupational service consists of occupational groups of broadly

related or similar professions or occupations. Example: The
Medicine and Health Service is comprised of the following
occupational groups, among others: Dentistry Group, Dietetics
Group, Health and Sanitation Group, Medical Group, Medical
Technology Group, Nursing Group, etc.
2.4 Categorization of Classes
Classes are categorized under RA No. 6758 as follows:
2.4.1 Professional Supervisory (PS) Category – This category includes

responsible positions of a managerial character involving the
exercise of management functions such as planning, organizing,
directing, coordinating, controlling and overseeing within
delegated authority the activities of an organization, a unit thereof
or of a group, requiring some degree of professional, technical or
scientific knowledge and experience, and application of
managerial or supervisory skills.
Positions in this category require intensive and thorough

knowledge of a specialized field acquired through completion of
bachelor degrees or higher degree courses.
The positions in this category are assigned Salary Grade 9 to

Salary Grade 33. Examples: Engineer IV, Director II, Elementary
School Principal I
2.4.2 Professional Non-Supervisory (PN) Category – This category

includes positions performing tasks which usually require the
exercise of a particular profession or application of knowledge
acquired through formal training in a particular field or the
exercise of a natural, creative and artistic ability or talent in
literature, drama, music and other branches of arts and
letters. Also included are positions involved in research and
application of professional knowledge and methods to a
variety of technological, economic, social, industrial, and
governmental functions; in the performance of technical tasks
2-2
Position Classification Plan
auxiliary to scientific research and development; and in the

performance of religious, educational, legal, artistic or literary
functions.
These positions require thorough knowledge in the field of arts

and sciences or learning acquired through completion of at least
four years of college studies.

Salary Grade 30. Examples: Tourist Receptionist I, Chemist I,
College Professor, University Professor
2.4.3 Sub-Professional Supervisory (SS) Category – This category

includes positions performing supervisory functions over a group
of employees engaged in work along technical, manual or clerical
lines which are short of professional work, requiring training
and moderate experience or lower training but considerable
experience and knowledge of a limited subject matter or skills in
arts, crafts or trades.
These positions require knowledge acquired from secondary or

vocational education or completion of up to two years of college
education.

Salary Grade 18. Examples: Bookbinder IV, Electrician Foreman,
Chief Bookbinder
2.4.4 Sub-Professional Non-Supervisory (SN) Category – This category

includes positions involved in routine or repetitive work in support
of office or fiscal operations or those engaged in crafts, trades or
manual work.
These positions usually require skills acquired through training and

experience or completion of elementary education, secondary or
vocational education or completion of up to two years of
college education.

Salary Grade 10. Examples: Draftsman I, Proofreader II, Dental
Aide
2.5 Index of Occupational Services, Position Titles and

Salary Grades
A listing of the different occupational services, occupational groups and

classes in series existing in the PCP is shown in the Index
2-3
of Occupational Services, Position Titles, and Salary Grades (IOS). It

also shows the salary grade assignment of each class.
The IOS consists of 3 volumes: Volume I is the Index of Classes by

Occupational Services and Occupational Groups. Volume II is the
Index of
Classes by Alphabetical Order. Volume III is the Index of Classes by

Salary Grades.
2.6 Class Specification
A class specification is a written description of a class of positions

consisting of: class category, class identification, class title, class
definition, characteristics and qualifications guide.
2.6.1 Class Category
A class category may be either of the following: Professional

Supervisory (PS), Professional Non-Supervisory (PN), Sub-
Professional Supervisory (SS) or Sub-Professional Non-Supervisory
(SN).
2.6.2 Class Identification (ID)
A class ID identifies the class of positions. It shows the

alphanumeric acronym and level of a class in a series. The class
IDs are indicated in the IOS. Example: The class ID for Nurse I is
NURS1.
2.6.3 Class Title
A class title is a brief, concise and descriptive name of a class. As

a general rule, a class title has three parts, namely:
Root word – This shows the general nature of the work such as
Sorter, Mechanic, Inspector.
Specialty – This shows the field of specialization or field of activity

such as Mail Sorter, Aircraft Mechanic, Meat Inspector.
Level – This can either be an adjective, a noun or a number which

expresses the relative rank or level of the class such
as Senior Mail Sorter, Aircraft Mechanic Foreman, Meat
Inspector II.
2-4
• Levels of classes
As a general rule, the following are the standard levels of

classes of positions:
♣ Entrance Level or Level I – Classes under this level are

under immediate supervision, and with detailed rules and
procedures, perform the simplest, routine sub-professional
or professional work. Examples: Carpenter I, Engineer I,
Budget and Management Analyst
♣ Journeyman or Level II – Classes under this level are under

general supervision and with limited latitude for the
exercise of independent judgment, perform somewhat
difficult but responsible sub-professional or professional
work requiring training, some experience and a broad
knowledge of a special subject matter. Examples:
Radiologic Technologist II, Biologist II
♣ Senior Level/Participating Supervisor/Foreman or Level III

– Classes under this level are under general supervision
and with some latitude for the exercise of independent
judgment, serve as heads of section or other unit of an
organization of similar import, or in the case of those in the
crafts and trades, a crew engaged in moderately difficult
but routine work; or perform difficult and responsible sub-
professional or professional work requiring training and
moderate experience or lower training but with
considerable experience and a very broad knowledge of a
special subject matter. Examples: Plumber Foreman,
Senior Tax Specialist, Engineer III
♣ Supervising Level/General Foreman or Level IV – Classes

under this level are under direction and with substantial
latitude for the exercise of independent judgment, serve as
assistant heads of division or other unit of an
organization of similar import or in the case of those
in the crafts and trades, a large crew or several crews
engaged in varied work ranging from routine to
difficult and specialized work; or perform very difficult,
important and responsible sub-professional or professional
work requiring training and moderate experience or a lower
training but with considerable experience and thorough
knowledge of a special subject matter. Examples:
Electrician General Foreman, Supervising Economic
Development Specialist, Attorney IV
2-5
♣ Chief Level or Level V – Classes under this level are under

direction and with considerable latitude for the exercise
of independent judgment, serve as heads of division or
other unit of an organization of similar import engaged in
varied work ranging from routine to very difficult work; or
perform exceptionally difficult and responsible sub-
professional or professional work requiring training,
considerable experience and demonstrated capacity for
sound independent judgment and intimate knowledge of
special subject matter. Examples: Chief Photographer,
Chief Air Traffic Controller, Forester V, Attorney V
• Use of Roman Numerals for Levels of Positions
For ranking purposes, Roman numerals like I, II, III are used
to identify classes in a series when:
♣ Duties and responsibilities of the classes are similar, but

the size of the organization, educational
requirement/preparation, or some similar factors indicate
higher responsibilities and, therefore, a higher level class.
Examples:
♦ Elementary School Principal I – supervises 10 to 29

teachers
♦ Elementary School Principal II – supervises 30 to 59

teachers
♦ Teacher I – Bachelor’s degree for teachers (BSE,

BSEE)
♦ Teacher II – Bachelor’s degree for teachers plus 20

MA units
♣ Duties and responsibilities of the class are in the same field

of specialization with a relatively gradual increase in
the complexity of the duties and responsibilities or where
each class in the series consists of more than one job type.
Examples: Engineer I, Engineer II, Engineer III.
2.6.4 Class Definition
A class definition is a general description of the overall duties

and responsibilities of a class. It may indicate the alternative
use of the class or job type. This usually begins with a statement
as to the type of supervision received as follows:
2-6
• Under immediate supervision - This is the closest degree of

supervision. The position is subject to continuous and direct
control. The position cannot decide on its own, hence, has to
refer to specific and detailed guides and instructions. Its work
is checked while in process and upon completion. This is the
type of supervision received by entrance level positions.
• Under general supervision - The supervision received is not

close, continuous or direct. Supervisory control is in terms
of objectives and goals to be reached. The position is able to
work with a reasonable degree of independence, referring only
unusual or complicated matters to immediate supervisor for
advice and direction.
• Under direction - The supervision received comes in the form

of guidance from policies and objectives of the
organization. Planning and organizing the details of the work
and deciding the methods, systems and procedures
are completely entrusted to the employee. This is the type of
supervision received by assistant division chiefs and higher
level positions.
• Under administrative or executive direction - This is the type of

supervision received where the work of the position is subject
only to administrative/executive determination of policy. This
is the type of supervision received by heads of office and
equivalents.
The last portion of the class definition is a general statement,

“and does related work,” to emphasize that the employee may be
given other assignments related or incidental to his work.
2.6.5 Characteristics
• The characteristics portion enumerates specific tasks

performed by the class. The typical tasks selected are
those most significant in
allocating positions to the class. The tasks are in the present
tense verbs, third person, singular form with the tasks
separated by semi-colons.
• When an alternate job type or types are necessary, separate

paragraphs are used to describe separately the job types
within a class because they may differ in objectives and in
the manner of accomplishing the objectives. Each new
paragraph begins with the conjunction, “Or.” The sequence
2-7
of the paragraphs follows the order in the general description

of the job types in the “Definition” portion.
2.6.6 Qualifications Guide
The qualifications guide states the minimum education, training

and experience needed to perform the duties and responsibilities
of a class of positions.
Annex A of this Chapter is a sample class specification.
2.7 Position Classification Factors
A position classification factor is a characteristic/guide which measures

or compares the requirements or demands of a position. It influences the
grouping of positions into classes or the allocation of a position to a
class.
2.7.1 The Basic Classification Factors
The 3 basic classification factors are:
• Skills and Knowledge – These measure the extent of formal

education and work experience normally required for the
satisfactory performance of the duties and responsibilities of
a position.
• Nature of Work – This measures the characteristics

inherent in the position. It considers the supervisory content
of the work, analysis and problem solving required,
degree of mental/physical effort and exposure to hazards,
and the degree and extent of internal and external relations.
• Responsibility – This measures the accountability of a

position for supervision exercised, decisions and actions,
degree of control of assets, and accuracy and confidentiality
of records and reports.
2.7.2 The Sub-Classification Factors
The 3 basic classification factors are divided into the following

sub-factors:
2.7.2.1 Skills and Knowledge
• Education – This considers the minimum formal

education, applicable training or equivalent
2-8
knowledge required for the satisfactory performance

of the duties and responsibilities of a position.
• Experience – This considers the length of time

necessary for an average new employee with the
required minimum education to acquire the needed
skills for satisfactory performance of the job.
2.7.2.2 Nature of Work
• Supervision Received – This considers the type,

frequency and latitude by which assignments and
instructions are received, how work methods
are followed, and how work is checked for quality
and quantity.
• Analysis and Problem Solving Required – This

considers the degree of difficulty and complexity of
the assigned tasks and the extent to which the work
involved requires analytical ability, exercise of
judgment and creativity necessary to achieve the
desired results.
• Mental/Physical Effort – This considers the amount

and continuity of physical exertion or mental
concentration required in the completion of work,
taking into consideration the pressure and extent of
physical and/or mental effort involved.
• Internal and External Relationships – This refers to

the nature of communication and association with
others, both within and outside of the office, as
required for the satisfactory performance of the
duties and responsibilities of a position on a regular
basis. Contacts include personal discussions,
telephone conversations and written
communications. This sub-factor is evaluated
according to the nature and limits of contact.
• Hardship, Hazard and Personal Risk Involved – This

considers the degree and continuity of
exposure to health or accident hazards in the
performance of the duties and responsibilities of a
position.
2-9
2.7.2.3 Responsibility
• For Work of Others or Supervision Exercised – This

sub-factor considers the responsibility of a position
for the various facets of supervision such as work
planning and organization, work assignments
and review, and the exercise of supervisory
functions.
• For Decision-Making – This measures the mental

processes involved in weighing facts and conditions
to determine appropriate courses of action. It
reflects the extent of analysis and planning
exercised, the creativity required in developing
policies, rules, methods or procedures. It also
considers the impact of such decisions.
• For Accuracy of Records and Reports – This

considers the accuracy required and importance of
information, records and reports prepared or
reviewed by a position.
• For Funds, Property and Equipment – This considers

the accountability of a position for assets such as
cash, negotiable instruments, equipment, supplies,
materials and tools. Negligence could result in
monetary loss or property damage.
2.7.3 Other Classification Factors
• rank of the position in the organizational hierarchy;
• functions of the unit where the position is located;
• kind and number of existing positions in the unit performing

similar or related tasks;
• consistency of the classification and salary grade assignment

of the positions in the unit, in the agency, and in other
government agencies;
• other quantitative factors, such as number of elementary/

secondary school teachers supervised, etc.
2-10
2.8 The Position Classification Process
The position classification process is the series of actions leading to the

grouping of positions into classes or to the determination of the
appropriate class for a given position using the position classification
factors as guides.
2.8.1 Steps in the Classification Process
There are 3 steps in the classification process. They are fact-

finding, analysis and evaluation.
2.8.1.1 Fact-Finding
2.8.1.1.1 Fact-finding involves the gathering of facts

about the duties and responsibilities of a
position. In fact-finding, the 2 sources of
facts are as follows:
• Primary Sources – These include the

accomplished Position Description Form,
incumbent of the position, the supervisor
of the position, organizational charts and
work samples; and
• Secondary Sources – These include laws,

rules and regulations, standard operating
procedures, reports and publications,
forms and materials used.
2.8.1.1.2 Fact-finding may employ the following 4

techniques/tools:
• Use of the Position Description Form

(PDF)
♣ The PDF is the basic document in the

position classification process.
♣ The PDF and the instructions for

accomplishing the same are attached
as Annexes B and C, respectively, of
this Chapter.
• Conduct of Work Audit
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♣ The conduct of work audit involves the

verification of the work through an
interview of the incumbent of the
position, the immediate supervisor or
the next higher supervisor and when
necessary, of peers or subordinates.
It is intended to validate, clarify, or
supplement information gathered from
the PDF. Interviews are resorted to
under the following circumstances:
♦ Information in the PDF is

incomplete, unclear, or contains
terminology, concepts or
procedures not well understood;
♦ The tasks of the position involve

different levels of difficulty; and
♦ The duties and responsibilities

stated pertain to different
occupations.
♣ The information gathered in the work

audit are documented in the form of a
written audit report containing the
following:
♦ the title and item number of the

position audited;
♦ the organizational location of the

position;
♦ the persons interviewed: names,

position titles, and item numbers;
♦ an accurate and adequate

description of the work performed
and the amount of time spent on
various duties and responsibilities;
and
♦ an analysis of the position stating

the degrees of the pertinent
allocation factors that were
considered.
2-12
• Observation of Work Operations
♣ This involves gathering facts through

mindful watching of a work in process
and the recording/summarizing of
activities/ actions observed. Data
gathered may be documented in the
form of a flow chart.
♣ Flowcharting is an analytical
technique to document the process of
work or activities in a clear, concise
and logical manner, showing the
movements of documents and action
taken through various steps from their
origin to their final destination.
• Use of Organizational Charts
♣ An organizational chart is a
graphic presentation of the units,
functions or positions of an agency.
The three basic types of organizational
charts are:
♦ Structural Organization Chart -

This chart is a graphic
representation of the organizational
units in boxes. This chart provides
a basis for determining
organizational relationships.
♦ Functional Chart - This chart

contains the statements of
functions of all organizational units
indicated in boxes. This chart
provides information about the
general objective and
responsibilities of each unit. The
duties and responsibilities of a
position are better understood by
analyzing the functions of a unit.
♦ Position Chart - This chart shows

the authorized positions in the
organizational unit, listed by item
number, position title and salary
2-13
grade. This chart ascertains the

official location of the position and
its relation to other positions in the
organizational unit.
2.8.1.2 Analysis
Analysis is the critical examination of the duties and

responsibilities and other facts about the position. The
process involves selecting, organizing and commenting
upon the duties and responsibilities of the position in
terms of the position classification factors to determine
the distinguishing characteristics of the position.
The steps in the analysis of the duties and

responsibilities and other facts about the position
follow:
Step 1: Organize the facts obtained about the position

by listing down its major duties and
responsibilities. The major duties and
responsibilities represent the primary reason
for the position’s creation. Typically, they
occupy most of the employee’s time. They
may be performed in a continuous,
uninterrupted manner or performed at
recurring intervals.
Make a separate list for incidental duties and

responsibilities which generally occupy a
small portion of the employee’s time and are
not the primary purpose for which the position
was created.
Step 2: Determine the occupational group and the

series on the basis of the kind of work involved
in the position.
Step 3: Tentatively determine the classes in the series

to which the position may be classified using
the position classification factors as guides.
Step 4: Ascertain whether or not there are written

standards or class specifications for the classes
in the series.
2-14
Step 5: Determine the distinguishing characteristics of

the classes in the series.
Step 6: If no class specifications are available, list the

facts pertinent to the position being classified
against those of positions already classified in
the series.
Hereunder is an illustrative example of analyzing a

position for classification:
Step 1: Facts as organized
• Location of Position - Accounting Division
• Immediate Supervisor - Accountant I
• Positions Supervised - 2 Accounting Clerk I and

1 Accounting Clerk II
• Actual Duties -
50% Supervises and participates in the work

of accounting clerks engaged in
posting and balancing accounts in the
general ledger and maintaining books
of accounts;
40% Prepares trial balance and monthly

income and expenditures; and
10% Prepares correspondences on

bookkeeping matters as may be
directed by supervisors.
Step 2: Series of classes as determined by the kind of

work:
• Accounting Clerk and Bookkeeper - recording

and posting financial transactions and
maintaining books of accounts
__________________
Note: The classes under the Accounting Group mentioned on this page and on the succeeding
2 pages have been allocated to the corresponding levels of Administrative Officer,
Administrative Aide and Administrative Assistant classes pursuant to Budget Circular No. 2004-3
dated March 6, 2004.
2-15
Step 3: The position appears to be allocable to the

class, Bookkeeper.
Step 4: Class specifications or written standards are

available for the Accounting Clerk and
Bookkeeper series.
Step 5: Distinguishing characteristics of the following

classes have been determined as follows:
• Accounting Clerk I – posts data and updates

records for payment and deductions for
salaries, wages and other accounts
• Accounting Clerk II - maintains subsidiary

ledgers; reconciles subsidiary ledger balances
with controlling account balances in the general
ledger
• Accounting Clerk III – supervises the activities

of accounting clerks engaged in posting entries
from the journals to the subsidiary and general
ledgers
• Bookkeeper – supervises the work of

accounting clerks; prepares trial balances;
maintains the journal or books of original entry;
prepares adjusting entries and bank
reconciliation
Step 6: This is not necessary in this particular case

since class specifications or written standards
are available.
2.8.1.3 Evaluation
After the duties and responsibilities and other facts

about the position have been reviewed and analyzed
the next step is to evaluate it, i.e., to determine its
relative worth.
2.8.1.3.1 The Pre-Determined Class Method
• The Philippine government’s Position

Classification Plan adopts the pre-
determined class method in the
evaluation process. Under this method,
2-16
classes with their appropriate salary

grades and written standards are
established.
• Using the position classification factors

as guides, the facts pertaining to the
position are compared with those in the
class specification or standards for
the class. If the duties and
responsibilities of the position meet the
allocation standards for the class, a
decision is made to allocate the position
to the class.
• Using the same position in Sub-item

2.8.1.2 as an example, the following
last 2 steps constitute the evaluation
process:
Step 7: All facts about the position are compared with

the facts found in the class specifications for
the series.
Step 8: All facts about the position are found in the

class, Bookkeeper. Decide to allocate the
position to the class, Bookkeeper, SG-8.
2.8.1.3.2 Evaluation of a Position in the Absence

of a Class Specification
In the absence of a class specification, a

classifier must resort to the following:
• Determine the series to which the

position may be allocated.
• Determine whether or not there have

been positions classified under the
series.
• If there are positions classified under the

series, compare the facts pertaining to
the position being classified against
those of the positions already classified
to the series. If the duties and
responsibilities of the position are
comparable with those of the classified
2-17
position, the position is allocated to the

particular class in the series.
• If the duties and responsibilities of the

position do not fall within the allocation
standards for the class requested or any
other existing class, consider
recommending the creation of a new
class.
2.8.1.3.3 Evaluation of Mixed-Grade Positions
• “Mixed-Grade” positions refer to

positions in which the work falls partly in
one class and partly in another. There
is no single rigid rule for
determining the classification of this kind
of position. Only general guides can be
cited because these positions occur
under so many circumstances.
♣ As a general rule, the preponderant

duties and responsibilities or those which
take up the majority of the employee’s
working time must govern.
♣ When the position involves a set of

duties and responsibilities or a task
which enhances the relative value of the
position and is paramount in influence or
weight even though it does not consume
a majority of the employee’s time, the
position may be classified on that basis.
In this case, the following conditions

should be observed:

serving as the bases for the decision
are regular or recurring and are not
emergency, infrequent, incidental or
temporary in nature.

serving as basis for the decision are
so different from the other duties
and responsibilities as to require
2-18
materially higher qualifications, which

are, or will be reflected in the
qualifications standards used in
recruiting, testing and selection.
2.9 Administration and Maintenance of the PCP
The PCP was designed as guide for the proper classification of positions
in the Philippine government based on major duties and responsibilities
of the position in pursuance of agency functions.
To implement and manage the PCP, the Department of Budget and

Management (DBM) formulates and issues policies, standards, rules and
procedures. Changes in organization, duties and responsibilities,
however, may result from reorganization, new work techniques or
procedures, abolition of functions, changes in administrative policies,
or a variety of other causes.
Effect of such changes on the contents of the PCP must be determined

so that the latter could be modified/updated. The administration and
maintenance of the PCP, therefore, is a continuous process which rests
on those concerned in the DBM and in government agencies.
2.9.1 Rules and Procedures in the Administration of the PCP
2.9.1.1 Original Classification
Original classification action is applied to positions

classified for the first time such as new positions.
• The agency submits a request for creation of

positions, together with the following:
♣ justifications for their creation;
♣ duly accomplished PDFs;
♣ organizational charts;
♣ funding source; and
♣ such other documents as may be necessary.
• The DBM analyst evaluates the necessity for the

creation of positions and classifies the positions. For
itemized positions, a corresponding Notice of
Organization, Staffing and Classification Action
2-19
(NOSCA) is issued to the agency. For non-

itemized positions such as casual or contractual
positions, DBM issues a letter authorizing their
creation and their corresponding classification.
• The details in the NOSCA serve as inputs to the

Personal Services Itemization and Plantilla of
Personnel (PSIPOP) for itemized positions issued by
the DBM to agencies each year. The original copy of
the agency accomplished PSIPOP is submitted to the
DBM. For non-itemized positions, the agency
prepares the corresponding Plantilla of Personnel.
2.9.1.2 Reclassification
Reclassification is a form of staffing modification and/or

position classification action which may be applied only
when there has been a substantial change in the
regular duties and responsibilities of the incumbent of
the position and which may result in a change in any or
all of the position attributes: position title, level and
salary grade.
Such reclassification, however, should not result in a

distortion in the staffing pattern nor in an unauthorized
change in organizational structure or leveling, not only
within the unit where said position is deployed, but also
among equivalent or parallel structures in the agency.
Reclassification generally involves a change in the

position title and may be accompanied by an upward or
downward change in salary grade. However, if the
salary grade of the position is maintained, the staffing
modification and/or position classification action is
deemed as retitling, provided that such is within the
same occupational group.
2.9.1.2.1 Reclassification may also be applied when:
2.9.1.2.1.1 There are changes in the level/

category of the government
entity which will bear on the
level of key positions, e.g.,
President and Vice-President
positions in state universities
and colleges (SUCs) and
General Manager, Assistant
2-20
General Manager, and other

Managerial positions in Local
Water Districts;
2.9.1.2.1.2 There are changes in

quantitative factors used in
determining the appropriate
position and level in accordance
with existing position
classification standards, e.g.,
coverage of agricultural facility
for certain positions under the
Department of Agriculture;
2.9.1.2.1.3 There are changes in the

position titles and salary grades
in the Index of Occupational
Services, Position Titles and
Salary Grades approved by the
DBM; and
2.9.1.2.1.4 The reclassification of a position

is provided by law or
Presidential authority.
2.9.1.2.2 The following shall not be used as bases for

the reclassification of positions:
2.9.1.2.2.1 Non-performance of the regular

duties and responsibilities of a
position by reason of the
incumbent’s inability or
incompetence;
2.9.1.2.2.2 New duties/assignments which

are temporary in nature;
2.9.1.2.2.3 Qualifications of the incumbent

except those enumerated in
items 2.9.1.2.3.1 to 2.9.1.2.3.3
2.9.1.2.3 The following are the instances when

reclassification is based on the qualifications
of the incumbent:
2-21
2.9.1.2.3.1 Implementation of the

Equivalents Record Forms
(ERFs) of teachers pursuant to
Section 14 of Presidential
Decree No. 985, as
implemented by DBM Circular
Letter No. 84040 dated May
30, 1984 and Budget Circular
No. 2004-1 dated January 23,
2004;
2.9.1.2.3.2 Implementation of the Master

Teachers career path provided
under Executive Order No. 500
dated March 21, 1978, as
implemented by National
Budget Circular (NBC) No. 303
dated April 10, 1979 and
National Compensation Circular
No. 24 dated May 20, 1983; and
2.9.1.2.3.3 Implementation of NBC No. 461

dated June 1, 1998 for faculty
members of SUCs, higher
education institutions, and
TESDA technical education
institutions, and of NBC No. 308
dated May 28, 1979 in the case
of faculty members of the
University of the Philippines
System and the Mindanao State
University System.
2.9.1.2.4 A position may be reclassified if the

incumbent fully meets the CSC’s qualification
standards requirement for the position as
reclassified, pursuant to CSC law, rules and
regulations.
2.9.1.2.5 Reclassification shall not apply to vacant

regular positions which necessitate changes
in their position titles for being under any of
the instances cited in items 2.9.1.2.1.1 to
2.9.1.2.1.4. Instead, they shall be converted,
i.e., they shall be abolished and the
appropriate positions shall be created.
2-22
2.9.1.2.6 Procedural Guidelines
2.9.1.2.6.1 Government agencies shall

submit to the DBM Budget and
Management Bureau or
Regional Office concerned their
requests for reclassification of
positions as endorsed by agency
heads, together with the
following:
• Duly accomplished Position

Description Forms (PDFs);
• Organization, functional and

position charts;
• Justification for the

reclassification of the
positions;
• A certification that the

incumbent fully meets the
qualification standards
requirement for the position
as reclassified, pursuant to
CSC rules and regulations.
• If no amount is appropriated
specifically for the
reclassification of positions,
a proposal to implement the
“scrap and build” policy, i.e.,
funded vacant positions are
to be offered for abolition
which shall be used as
funding source for the said
purpose; and
• Justification for the abolition

of the funded vacant
positions by considering the
effects on the operation of
the affected units.
2-23
2.9.1.2.6.2 The analyst in the DBM Office

concerned shall evaluate the
requests. Should there be a
need to validate, clarify or
supplement information
gathered from the PDFs, the
agencies shall assist the DBM
analyst in his/her conduct of
position/work audit.
2.9.1.2.6.3 An agency shall be informed of

the approval of the
reclassification of positions
through a Notice of
Organization, Staffing and
Compensation Action (NOSCA)
or through a DBM letter, as the
case may be; otherwise, the
agency shall be informed of the
denial action through a DBM
letter.
2.9.1.2.6.4 A request for reconsideration

may be made within thirty (30)
calendar days after receipt of
the NOSCA/DBM action.
2.9.1.2.6.5 Agencies which have been

granted budget flexibilities by
the DBM may reclassify filled
positions provided that the
condition in item 2.9.1.2.4 is
satisfied; that such are in
accordance with the position
classification standards and that
such are within their budget
management authorities. Any
additional funding requirement
shall be sourced out of the
abolition of funded vacant
positions. Upon receipt of the
budgetary actions made by the
agency, the DBM analyst
concerned shall evaluate the
same. If found in order, the
corresponding NOSCA shall be
2-24
prepared to formalize the

change in the GMIS database,
subject to approval of the DBM
authorities concerned. The
NOSCA shall be issued to the
agency. However, if upon
receipt of the budgetary actions,
the reclassification actions made
by agencies are not in order,
the DBM reserves the right to
make alterations therein.
2.9.1.2.6.6 In the implementation of

reclassification action, the
following salary rules shall
apply:
2.9.1.2.6.6.1 An employee
whose position is
reclassified
without change
in salary grade
shall continue to
be paid his
present salary.
2.9.1.2.6.6.2 If reclassified to
a position with a
higher salary
grade, the
following salary
rules on
promotion shall
apply:
2.9.1.2.6.6.2.1
If the basic
salary of the
employee in
his/her former
position is below
the hiring rate of
the reclassified
position, the
employee shall
be allowed the
2-25
1st step or the

hiring rate;
2.9.1.2.6.6.2.2
If the present
salary falls in
between steps,
the employee
shall be allowed
the higher step;
2.9.1.2.6.6.2.3
If the present
salary is in
excess of the
maximum or 8th
step, the
employee shall
be allowed to
continue to
receive his/her
present salary
with the excess
over the 8th step
treated as
“transition
allowance” which
shall be
deducted from
any future salary
adjustment of
the employee.
2.9.1.2.6.6.2.4
If to a lower
salary grade, the
employee shall
be allowed to
continue to
receive his/her
present salary.
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2.9.1.3 Reconsideration
An agency may request reconsideration of the

classification/reclassification of a position if it
believes that the classification/reclassification action
made was erroneous on the grounds that pertinent
facts were not considered in the evaluation, and that
such omission caused the classification error.
• A request for reconsideration may be made within

30 calendar days after receipt of the NOSCA/DBM
action. The agency submits the request for
reconsideration together with the following:
♣ identification of the position which classification

is requested for reconsideration;
♣ proposed classification of the position; and
♣ explanation why the existing classification was

erroneous, or a declaration of the
facts which, if considered, would have resulted
in a different classification.
• The DBM evaluates the request in accordance with

existing position classification standards.
• The DBM issues a revised NOSCA or a letter if a

request concerns casual/contractual positions. For a
denied request, the agency is informed through a
DBM letter.
2.9.1.4 Upgrading
Upgrading of a class involves upward change in the

salary grade allocation of the class and consequently all
positions allocated to the class, without change in class
title, if the duties and responsibilities and other facts
about the class so warrant.
2.9.1.5 Retitling
Retitling of a class involves a change to a more

appropriate title of a class and consequently all
positions allocated to the class, without change in salary
grade.
2-27
2.9.2 Effectivity of Implementation of Classification Actions
2.9.2.1 All classification actions take effect on the date

indicated in the NOSCA or DBM letter. For positions
in schools and educational institutions, the
effectivity is not earlier than June 1 of the current
year. For non-itemized positions, the effectivity date is
indicated in the DBM letter.
2.9.2.2 A reclassification action takes effect on the date

indicated in the NOSCA but not earlier than the date
when funds for the purpose are authorized in the
General Appropriations Act. For positions under the
Department of Education and other schools, the
effectivity is not earlier than June 1 of the current year.
2.9.2.3 The implementation of a reconsideration action takes

effect on the effectivity date of the original
classification/ reclassification of a position.
2.9.2.4 The retitling/upgrading of a position takes effect on the

date indicated in the NOSCA.
2.9.3 Maintaining/Updating the PCP
The DBM maintains/updates the PCP as follows:
2.9.3.1 Creation of New Occupational Services,

Occupational Groups, Classes in Series
New occupational services, occupational groups,

classes in series may be created when new duties and
responsibilities are found to exist or are not comparable
to those existing in the PCP such that the positions
cannot be allocated to existing classes.
2.9.3.2 Merging, Splitting, Abolition of Occupational

Services/Occupational Groups/Classes in Series
Existing occupational services, occupational groups,

classes in series may be merged, split, or abolished
when existing conditions of work assignments on which
they were based are modified. These may include
splitting of functions, addition of new functions,
abolition of functions, changes in work methods due to
technological development, organizational
development, changes in work entrance
2-28
requirements, etc., which may cause the addition to or

changes in the duties and responsibilities of a position.
2.9.3.3 Procedure
• The BMB/DBM Regional Office concerned conducts

initial evaluation of the need for creation/
merging/splitting/abolition of occupational services/
occupational groups/classes in series. It submits its
recommendations relative thereto, the
corresponding draft class specifications and other
pertinent documents to OPCCB.
• Using the position classification factors as guides,

the OPCCB breaks down the facts pertaining to the
positions and compares them with those of existing
classes to ascertain the need for creation of
new/modified classes.
• After deciding that new/modified classes are to be

created, OPCCB undertakes the following:
♣ Determines the occupational service and

occupational group;
♣ Within the occupational group, determines the

different levels of difficulty of duties and
responsibilities;
♣ Reviews and finalizes the draft class

specifications;
♣ Allocates each class to a salary grade on the

basis of grade level definitions or in the absence
thereof, on the basis of comparability with
established classes in the PCP;
♣ Submits its recommendation for approval of the

DBM Secretary;
• The DBM, through the OPCCB, issues a notice of

change in the IOS to all DBM offices and to the
government agencies concerned; and
• The BMB or DBM Regional Office concerned adopts

the new/modified class in processing the agency
request.
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2.9.3.4 Updating/Revision of Class Specifications or

Standards
Occasionally and following consultations with

government agencies, the DBM through the OPCCB
updates class specifications or standards. The DBM
may revise, supplement or abolish existing class
specifications or standards so that as nearly as
practicable, positions existing at any given time within
the government service shall be covered by current
standards.
2.9.3.5 Revision of Rules and Procedures
The rules and procedures for implementing the PCP are

revised as the need arises to keep pace with changes in
administrative policies and other developments in the
government.
2.9.3.6 Use of Official Class Titles
The class titles found in the IOS shall be the official

class titles of positions and shall be used for personnel,
budget and fiscal purposes, without precluding the use
of alternate titles for internal administration, public
convenience, law enforcement, or similar purposes.
2-30
Annex A
SN
ELEC1
ELECTRICIAN I
Definition
Under general supervision, does skilled electrical work in the installation

maintenance and repair of electrical wiring and equipment; or of power lines
and electrical lighting; or of electrical generating and utilization equipment; and
does related work.
Characteristics
Follows blueprints and specifications for the installation of channel

boards, circuits and outlets and other equipment; installs electrical wiring,
conduits, switches, cables, fuse boxes or circuit breakers in buildings, plants
and pumping stations and other structures; installs electrical circuits for building
automation controls, security devices, fire alarm devices, audio and video
systems, communication trunks, air-conditioning and refrigeration systems;
installs additional circuits for additional lights and appliances; installs electrical
equipment such as storage heaters, water heaters and electrical signs; installs
electrical wiring in marine craft; tests electrical circuit to ensure safe operation
as designed; installs coaxial or fiber optic cable from computers and other
telecommunications equipment; regularly inspects electrical wiring and
equipment to identify potential problems; takes corrective action immediately;
repairs or replaces defective parts of the electrical system.
Or interprets electrical transmission and distribution plans; installs

electric wires from powerhouse to pole; installs on poles electrical fixtures and
equipment such as insulators, transformers, street lighting, lightning arresters
and platforms and traffic signals; tests installed electrical equipment and
lighting to ensure safe operation; installs connecting wires from main power
lines to buildings and other structures; tests, locates and inspects main line and
connecting lines to locate source of power failure; repairs or replaces defective
parts of the power system and lighting; may operate aerial bucket truck or any
large construction equipment.
Or determines repairs and replacements to be made on electrical

generating, utilization and control equipment using testing instruments;
following using diagrams, rewinds armatures and field coils of motors and
generators and primary and secondary windings of transformers; checks and
repairs electric wiring of motor vehicles and heavy equipment; repairs, rebuilds
2-31
and recharges storage batteries; repairs magnetic switches and horn relays;
repairs water temperature and oil gauges and indicators.
Qualifications Guide
Any combination of training and experience equivalent to graduation

from secondary trade school.
2-32
Annex B
Republic of the Philippines : 1. NAME OF EMPLOYEE

DBM-CSC Form No. 1 :
(POSITION DESCRIPTION FORM) : (Family Name) (Given Name) (Middle
Name)
:
2. DEPARTMENT, CORPORATION OR : 3. BUREAU OR OFFICE
AGENCY/LOCAL GOVERNMENT UNIT :
:
4. DEPARTMENT/BRANCH/DIVISION : 5. WORK STATION/PLACE OF WORK
:
6a. PRES. APPROP. : 6b. PREV. APPROP. : 7.a SALARY : 7.b
ACT/BOARD RES./ : ACT/BOARD RES./ : AUTHORIZED : OTHER
COMPENSATION
ORD. NO. : ORD. NO. : :
ITEM NO. : ITEM NO. : ACTUAL :
:
8. OFFICIAL DESIGNATION OF : 9. WORKING OR PROPOSED TITLE
POSITION :
:
10. DBM CLASSIFICATION OF THIS : 11. OCCUPATIONAL GROUP TITLE
POSITION : (Leave Blank)
:
12. FOR LOCAL GOVERNMENT POSITION, CHECK GOVERNMENTAL UNIT AND UNIT
CLASS
MUNICIPAL CITY PROVINCE
1st 2nd 3rd 4th 5th 6th
13. STATEMENTS OF DUTIES AND RESPONSIBILITIES. If more space is needed,

please attach additional sheets.
Percent of Working : Duties and Responsibilities

Time :
:
:
:
:
:
:
:
:
:
:
2-33
14. POSITION TITLE OF IMMEDIATE : 15. POSITION TITLE OF NEXT

SUPERVISOR : HIGHER SUPERVISOR
:
16. NAMES, TITLES and ITEM NOS. OF THOSE YOU DIRECTLY SUPERVISE (If more
than seven (7), list only their item nos. and position titles.)
17. MACHINES, EQUIPMENT, TOOLS, etc. used regularly in performance of work
______________________________________________________________________
__
18. CONTACTS : 19. WORKING CONDITIONS
Occasional Frequent :
General Public : Normal Working Condition
Other Agencies : Field Work
Supervisors : Field Trips
Management : Exposed to Varied Weather
Others (Specify) : Others (Specify)
20. I certify that the above answers are accurate and complete.
Date Signature of Employee
TO BE FILLED OUT BY IMMEDIATE SUPERVISOR

21. Describe briefly the general function of the unit or section.
22. Describe briefly the general function of the position.
23a. Indicate the required qualifications by years and kind of education considered in
filling up a vacancy for this position. (Keep the position in mind rather than the
qualifications of the present incumbent. This item should be filled for all positions
other than teaching.)
Education:
Experience:
23b. Licenses or certificates required to do this work, if any.
24. I hereby certify that the above answers are accurate and complete.
Date Signature and Title of Immediate Supervisor

25. APPROVED:
Date Head of Agency
2-34
Annex C
INSTRUCTIONS FOR ACCOMPLISHING THE POSITION DESCRIPTION FORM
The following instructions show how the Position Description Form (PDF) should
be filled and how the supervisor should review it.
THE ADMINSTRATIVE OFFICER
The Administrative Officer or equivalent officer of the department, corporation,

agency, or local government unit in charge of human resource management
functions in which the position is located should fill in Items 1 to 12, except
Item 11.
Item 1. Name of Employee – Write the name of the employee presently

occupying the position. Write the word “vacant” if the position is vacant at the
time this form is accomplished.
Item 2. Department, Corporation or Agency/Local Government – Write down

the exact name of the Office. Avoid using abbreviations. (Write “Department
of Justice” instead of “DOJ” if a department, “Social Security System” instead of
“SSS” if a corporation, and “Rizal Provincial Government” instead of “Rizal” if a
local government unit.)
Item 3. Bureau or Office – Write down the major subdivision of the agency
to which the position belongs and is directly under, such as “Bureau of
Immigration” or “Financial and Management Service” if in the department
proper.
Item 4. Department/Branch/Division – Write down the immediate

subdivision of the office indicated in Item 3 where the position is deployed,
such as “Administrative Services Department,” “Personnel Branch,” or
“Management Division.”
Item 5. Work Station/Place of Work – Indicate the geographic location of

the position, such as Manila, Bataan, Davao, etc.
Items 6a and 6b. Appropriations Act/Board Resolution - Write down the

present and previous appropriations act, board resolution or ordinance number
and the item number of the position in said appropriations act, board resolution
or ordinance.
Items 7a and 7b. Salary and Other Compensation – Write down the salary
of the position as authorized in the appropriations act, board resolution
2-35
or ordinance and the actual salary of the employee occupying the position. If
the position is vacant at the time this form is being accomplished, indicate N.A.
for not applicable opposite actual salary. Write down the other regular
compensation for the position.
Item 8. Official Designation of Position – Write down the class title of the
position as authorized in the appropriations act, board resolution or ordinance.
Item 9. Working or Proposed Title – Write down the class title of the
position as requested.
Item 10. DBM Classification of this Position – Write down the classification
of the position as certified to the agency by the DBM. Leave blank if the
position is new and not yet classified.
Item 11. Occupational Group Title – Leave this blank. DBM will
indicate the occupational group title after the position has been classified.
Item 12. For local government positions, check the appropriate local
government unit and income class of the unit where the position is authorized.
THE EMPLOYEE
Writing the statements of duties and responsibilities (position description) is the

responsibility of the employee holding the position as well as his/her supervisor
so as to insure the adequacy, validity and correctness of the statements made
therein. Any duly accomplished PDF submitted, signed and endorsed becomes
an official record and a public document. Therefore, care should be taken in
accomplishing the PDF. The employee who presently occupies the position
should write the description of the duties and responsibilities of the position as
performed and understood by him/her. In case the position is vacant, the
immediate supervisor of the position shall accomplish the PDF for the position.
Below are pointers in writing position descriptions:
A. Do not attempt to write down in a single sitting all the duties and
responsibilities of the position. Take time and give them a little thought.
Note down on a sheet of paper the duties and responsibilities as
recalled. Examine the relationship of the position with the other
positions in the organization. This will help in visualizing the tasks
performed by the position in the overall organizational pattern.
B. After all the duties and responsibilities of the position have been written,
rearrange them in descending order from the most important to
the least important, indicating the percent of working time spent on each
of the duties and responsibilities.
2-36
C. Simple, clear and short statements should be used in discussing the

duties and responsibilities. Such statements, therefore, should indicate
the what-it-is, the why or purpose, and the how-it-is accomplished.
Samples of the work which cannot be adequately described should be
attached to the PDF such as reports made, forms accomplished, designs
and drawings made, etc.
D. Avoid using vague terms such as “maintains,” “checks,” “helps,” and

“prepares.” Explain in detail how the position “maintains” mechanical
equipment and/or records; “checks” plans and/or reports; “helps”
carpenters or engineers; “prepares” reports and/or layouts. For
example, a statistician may “prepare” statistical reports, and so does a
typist.
E. Finally, copy what were written on the sheet of paper to the PDF under
Item 13 (Statements of Duties and Responsibilities). It is suggested that
before doing so, a final review of the statements be made by asking the
following questions:
Have all the duties and responsibilities pertinent to the position been
written down?
Are the duties and responsibilities statements written in the most concise
and specific terms possible and outlining the what, why and how?
Can the position description be used as an instruction sheet for a new

employee of the position?
Item 13. Statements of Duties and Responsibilities. This is the most

important part of the form. Write down in detail what are actually done by the
position. The “Percent of Working Time” in the left-hand column should
indicate the percentage of working time consumed in performing each
statement of duties and responsibilities. List the duties and responsibilities in
the order of their importance with the most important duty and responsibility
first, the second most important duty second and so on. State fully whether
instructions are received in detail or in a general way (work is reviewed closely
or from time to time only). Describe also the degree of supervision received
and given to subordinates, if a supervisor). “Degree of Supervision Received”
means the amount and type of instructions and guidance usually received from
the immediate supervisor, including the rules and regulations, office practices
and procedures and the extent the supervisor controls the performance of the
subordinate’s work.
Item 14. Position Title of Immediate Supervisor – Write down the

authorized position or class title of the first or immediate supervisor.
“Immediate supervisor” refers to the supervisor nearest in level to the position
supervised. For example, in a division consisting of seven (7) positions,
2-37
inclusive of one (1) Information Officer V as chief of division and one (1)
Information Officer IV as assistant chief of division, the immediate supervisor is
the latter and not the former.
Item 15. Position Title of Next Higher Supervisor – Write down the
authorized position or class title of the next higher supervisor. In the example
given in Item 14, this would be the chief of division, the Information Officer V.
Item 16. Names, Titles, and Item Numbers of Employees Supervised Directly
– One supervises employees when one gives work assignments or instructions
to them and reviews their work. Write down the names, item numbers, and
positions or class titles of the employees supervised.
Item 17. Machines, Equipment and Tools Used – Write down the machines,
equipment or tools used regularly such as a typewriter, mechanic’s tools or
calculator or those operated regularly such as a water pump, diesel generator
or computer.
Item 18. Contacts – Check the appropriate box to describe the approximate
frequency of the contacts required of the position in connection with its work.
Item 19. Working Condition – Check the appropriate box that describes the
working condition of the position.
Item 20. Certification by the Employee for Accomplishing the Form –

Indicate the date the form was fully filled-up. The incumbent of the position
signs his/her name. Leave this item blank if the position is vacant.
THE SUPERVISOR
The first or immediate supervisor should review the accuracy of the statements
from Items 13 to 20. He may add to or explain any of the employee’s
statements that may be inaccurate or incomplete. He/She should also fill in
Items 21 to 24.
Item 21. Brief Description of the General Function of the Unit or Section –
Write a brief description of the function of the unit where the position is
deployed.
Item 22. Brief Description of the General Function of the Position – Write a
brief description of the function of the position. Any exception to any statement
of duties and responsibilities described by the employee under Item 13 of this
form may be indicated.
Item 23a. Minimum Qualifications Required – The supervisor indicates the

suggested minimum number of years of training and experience which will have
to be considered of an applicant in filling a vacancy for this position. It is
2-38
important that the qualifications of the present incumbent of the position

should not be considered. Other skills, knowledges and abilities preferably
required of an incumbent of this position should also be indicated. The filling of
this item is important especially if the position under consideration is new or
proposed.
Item 23b. Licenses or Certificates of Proficiency. Indicate licenses or

certificates required of an incumbent of this position. If no license or certificate
is required, write down “None.”
Item 24. Certification of Immediate Supervisor – After reading the statements

carefully and giving comments on the adequacy, validity and correctness of the
facts stated, the immediate supervisor certifies to the completeness and
accuracy of the statements/data in the PDF by signing his/her name and
indicating the date of certification.
THE AGENCY HEAD
Item 25. Approved - The agency head signs his/her name on the space
provided to indicate his/her approval of the statements/data in the PDF.
2-39
Chapter 3
The Compensation Plan
3.1 The Compensation Plan
The Compensation Plan (CP) under RA No. 6758 is an orderly scheme for
determining rates of compensation of government personnel. It was crafted to
attract, motivate and retain good and qualified people to accomplish the
Philippine Government’s mission and mandates, to encourage personal and
career growth, and to reward good performance and length of service. To
achieve these goals, the CP has a mix of compensation components, namely;
basic pay or salaries, fringe benefits, incentives and non-financial rewards
which provide reasonable levels of compensation packages within existing
government resources, and are administered equitably and fairly.
3.2 Concepts of Compensation
3.2.1 Total Compensation – This represents all financial and non-financial

rewards and entitlements arising from employment relationship.
3.2.2 Intrinsic Rewards - These are derived from the work environment,
which are valued internally by an individual, like quality of worklife, job
satisfaction, challenge, personal and professional growth opportunities,
feeling of belonging, freedom to act, visionary leadership, and the like.
3.2.3 Extrinsic Rewards/Entitlements – These comprise all compensation

benefits, both monetary and non-monetary, and received directly or
indirectly by the employee.
3.2.4 Direct Compensation - These are cash compensation items which are
either fixed or variable and are paid to an employee for the
performance of work. These include basic pay, cash allowances and
fringe benefits.
3.2.5 Indirect Compensation - These are usually non-cash or in-kind

benefit items that contribute to the employee’s welfare, standard of
living and personal development. These include protection programs
such as insurances, paid leaves, perquisites and training programs.
3-1
3.2.6 Fixed Compensation – These are cash compensation items which are
regularly granted to all employees. Examples are: basic salaries,
Personnel Economic Relief Allowance (PERA), and Additional
Compensation (ADCOM).
3.2.7 Variable Compensation - These are cash compensation items which

are granted to employees based on certain qualifications or rendition of
special services. Examples are, hazard pay, honoraria, night-shift
differential pay, and overtime pay.
3.2.8 Basic Pay - This is the primary cash compensation for work performed,
excluding any other payments, allowances and fringe benefits.
3.2.9 Salary - This refers to the basic pay for work performed by an
employee paid on a monthly basis.
3.2.10 Wage – This refers to the basic pay for work performed by an
employee paid on a daily or hourly basis.
3.2.11 Fringe Benefits - These refer to cash compensation benefits given to

an employee to supplement the basic pay. These include cash
allowances, bonuses, premium payments, etc.
The chart on page 3-3 shows the Concept of Total Compensation and what
comprises it under the existing Compensation Plan of the Philippine
Government.
3-2
2
Total Compensation
Intrinsic Rewards Extrinsic Rewards

job satisfaction
personal/career growth
quality of worklife
sense of belonging
Direct Compensation Indirect Compensation
Fixed Variable Protective Paid leave
Variable Fringe Benefits health insurance vacation leave

Basic Pay • hazard pay retirement benefit sick leave
• Salary • honoraria employee compensation special privilege leave
• Wage • overtime pay insurance paternity/maternity leave
Fixed Fringe Benefits • night-shift differential pay single parent’s leave
• PERA • subsistence Allowance monetization of leave credits
• ADCOM
• uniform allowance Additional Services Personal
Development
free medical/dental sports activities
clinic cultural activities
shuttle service training programs
free meals (hospitals) scholarship grants
intership programs
Others Perquisites
__ housing loan service car __

__ PAG-IBIG Fund benefits mobile/cell phone __
__ Provident Fund benefits assigned driver/secretary __
__ quarters privilege preferred office furnishing __
__laundry allowance assigned parking space __
free quarters __
newspaper subscriptions __
3.3 Policy of the State
Section 2 of RA No. 6758 provides the compensation policy of the State, to wit:
"It is hereby declared the policy of the State to provide equal

pay for substantially equal work and to base differences in pay
upon substantive differences in duties and responsibilities, and
qualification requirements of the positions. In determining
rates of pay, due regard shall be given to, among others,
prevailing rates in the private sector for comparable work. "
3.4 Governing Principles of the Compensation Plan
Pursuant to RA No. 6758, the CP is based on the following principles:
3.4.1 All government personnel shall be paid just and equitable salaries and
wages.
3-3
3
3.4.2 The basic pay for all personnel in the government shall generally be
comparable with those in the private sector.
3.4.3 The total compensation program of government personnel shall be

maintained at a reasonable level in proportion to the national budget.
3.4.4 Government compensation rates shall be reviewed periodically taking

into account possible erosion in purchasing power due to inflation and
other economic factors.
3.5 General Guidelines on Government Compensation
Government compensation shall be governed by the following general

guidelines:
3.5.1 Each class of positions in the Position Classification Plan shall be

assigned a salary grade.
3.5.2 Compensation for part-time services rendered shall be computed

proportionately.
3.5.3 Across-the-board salary or wage adjustment shall be granted to all

employees.
3.5.4 Salary and other compensation adjustments including the grant of new
benefits shall be covered by appropriate legal basis or authority.
3.5.5 As a general rule, no official or employee shall receive a salary equal to
or higher than the salary of his/her immediate supervisor, except when
otherwise authorized by law, rules and regulations.
3.5.6 Unless otherwise specifically approved by the President, no person shall

be appointed in the government under the guise of voluntary service,
with compensation below the hiring rate for the position, provided
that, the application of this provision may be waived to authorize
voluntary service in the Armed Forces of the Philippines or in connection
with relief operations.
3.6 Contents of the Compensation Plan
The CP contains the following:
• Salary schedule;
• Salary rules; and
• Policies, rules and regulations related to other compensation such as
allowances and other benefits.
3-4
4
3.7 The Salary Schedule
• The salary schedule under the CP is a table of salary grades with each
salary grade consisting of several salary steps with corresponding money
values.
• A salary grade represents a level of difficulty and responsibility of work.

The present Salary Schedule consists of 33 salary grades.
• Each of Salary Grades 1 to 32 consists of 8 salary steps which are used to

provide incentives for length of service in the position. Salary Grade 33 has
only 1 salary step.
• The 1st salary step is the minimum or hiring rate. The 2nd to 7th salary
steps are the intermediate salary rates. The 8th step is the maximum
salary rate.
• All rates in the Salary Schedule represent full compensation for full-time
employment in a 40-hour work week regardless of where the work is
performed.
• The daily wage represents full compensation for full-time employment in an

8-hour work day regardless of where the work is performed. The daily rate
shall be computed based on the authorized/actual monthly rate for the
position divided by 22 days.
3.8 Salary Rules
The rules governing the implementation of the salary schedule are as follows:
3.8.2 Hiring Rate
3.8.2.1 The first step in the salary grade for a given class of
positions shall be the hiring rate for new employees.
3.8.2.2 No employee shall receive a salary less than the hiring rate
for the position.
3.8.3 Promotion – This is a movement from a lower level position to a

higher level position within the same or in another organizational unit
in the same department or agency.
3-5
5
3.8.3.1 If the actual salary of the employee at the time of his/her

promotion is below the hiring rate of the new position,
he/she shall be allowed the hiring rate or 1st step of the
salary grade of the new position.
3.8.3.2 If the present salary falls between steps, he shall be allowed

the next higher step, i.e., the immediately succeeding step
to an off-step salary rate. Hence, if the salary rate falls
between steps 3 and 4, the next higher step is step 4.
3.8.3.3 If the present salary is equal to any of the steps of the new
position, he/she shall be allowed the next higher step.
However, if it is equal to the maximum or 8th step, he/she
shall only continue to receive the same salary rate.
3.8.3.4 If the present salary is over the maximum or 8th step of the
new position, he/she shall continue to receive his/her
present salary. Any excess over the 8th step shall be treated
as transition allowance which shall be considered as
advanced implementation of future salary increase/s.
3.8.3 Demotion – This is a movement from a higher level position to a

lower level position within the same or in another organizational unit in
the same department or agency.
3.8.3.1 If the demotion is due to the exigency of the service, the

employee shall be allowed to continue to receive his/her
present salary in the higher level position.
3.8.3.2 If the demotion is voluntary or at the instance of the

employee or a result of disciplinary action, he/she shall be
allowed only the hiring rate of the lower level position.
3.8.4 Transfer – This is a movement from one position to another from one
department or agency to another, or from one organizational unit to
another within the same department or agency.
3.8.4.1 If the transfer is to a higher level position, the salary rules on

promotion shall apply.
3.8.4.2 If the transfer is to a position of equivalent rank or of the

same salary grade as the previous position, the employee
shall continue to receive his/her present salary.
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3.8.4.3 If the transfer is to a lower level position, the salary rules on

demotion shall apply.
3.8.5 Reclassification of Position – This is a form of position classification

action which may result in a change in position title or position level,
and may or may not involve a change in salary grade.
3.8.5.1 An employee whose position was reclassified to another

position at the same salary grade shall continue to be paid
his/her present salary rate.
3.8.5.2 If reclassified to a position with a higher salary grade, the

salary rules on promotion shall apply.
3.8.5.3 If reclassified to a position with a lower salary grade, the

employee shall be allowed to continue to receive his/her
present salary.
3.8.6 Reorganization – This involves the restructuring of the organization

and staffing of government agencies for the efficient conduct of their
functions, services and activities.
3.8.6.1 An employee who holds a permanent position in the old

organization’s staffing pattern and is reappointed to a lower
level position in the new staffing pattern shall continue to
receive his/her actual salary at the time of reorganization.
3.8.6.2 If an employee is reappointed to the same position or to a

position at the same salary grade, he/she shall continue to
receive his/her present salary.
3.8.6.3 If an employee is reappointed to a higher level position, the

salary rules on promotion shall apply.
3.8.7 Reemployment - An employee who was separated from the service

because of reduction in force, reorganization, voluntary resignation or
any non-disciplinary action such as dropping from the rolls and is
reemployed, shall be paid the hiring rate or the 1st step of the salary
grade of the position.
3.8.8 Reinstatement - An employee who was charged and terminated from

government service but was subsequently exonerated and reinstated
shall continue to receive his/her previous salary.
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3.9 Other Compensation, Allowances and Benefits
3.9.1 Step Increment
Step increment is the increase in salary from step to step within the
salary grade of a position.
The grant of step increments to government personnel based on their

lengths of service is pursuant to Item 8 of Joint Senate-House of
Representatives Resolution No. 1, s. 1994, as adopted under Executive
Order No. 164 (Adopting a Revised Compensation and Classification
System in the Government), dated March 8, 1994.
3.9.1.1 Coverage
Officials and employees of national government agencies

(NGAs) including state universities and colleges (SUCs),
government-owned or -controlled corporations (GOCCs),
government financial institutions (GFIs) and local government
units (LGUs) who are appointed in the career service under
permanent status and in the non-career service whose
positions are found in the regular plantillas of agencies
3.9.1.2 Not Covered
3.9.1.2.1 Career and non-career officials and employees

who are occupying positions in agencies exempted
from or not following RA No. 6758;
3.9.1.2.2 Career Executive Service Officers whose step

increments are governed by Career Executive
Service Board Circulars;
3.9.1.2.3 Military personnel under the Armed Forces of the

Philippines, and uniformed personnel under the
Department of the Interior and Local Government,
Philippine Coast Guard under the Department of
Transportation and Communications and National
Mapping and Resource Information Authority
under the Department of Environment and
National Resources; and
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3.9.1.2.4 Elective officials
3.9.1.3 Rules and Regulations
3.9.1.3.1 A one (1) step increment shall be granted to

officials and employees for every 3 years of
continuous satisfactory service in their present
positions.
3.9.1.3.2 The length of service in the present positions shall

include the following:
3.9.1.3.2.1 Those rendered by incumbents

before their positions were:
• reclassified to classes with lower

or the same salary grades, as in
Illustrative Example 1, Annex “A;”
• allocated to lower or the same

salary grades in a reorganization,
whether or not the position titles
were changed as in Illustrative
Example 2, Annex “A;” and
• upgraded, i.e., with upward

change in the salary grade
allocation of a class of positions
without change in the position
title, as in Illustrative Example 3,
Annex “A.”

before they were:
• transferred to other positions

within the same NGA, SUC, GOCC
or GFI, transferred to another
agency or transferred/devolved
to an LGU or vice versa, without
change in position titles and in
salary grades, as in Illustrative
Example 4, Annex “A;”
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• separated due to phase-out of

position during reorganization but
subsequently re-appointed to the
same positions or to other
positions with the same or lower
salary grades in view of the
decisions of judicial/quasi-judicial
bodies, as in Illustrative Example
5, Annex “A;” and
• placed under preventive

suspension without pay but
subsequently exonerated by
appropriate judicial/quasi-judicial
bodies, as in Illustrative Example
6, Annex “A;”

appointed to regular positions on a
temporary/provisional status who
have been subsequently appointed
to the same positions in permanent
status, as in Illustrative Example 7,
Annex “A.”
3.9.1.3.3 Services rendered by incumbents under the

following instances shall not be considered in the
computation of their lengths of service:
• Those rendered before their promotion;
• Those rendered before the upward

reclassification of their positions; and
• Those rendered before voluntary demotion or

demotion as a result of disciplinary action.
3.9.1.3.4 Step increments shall be limited to the maximum

step of the salary grades of positions.
3.9.1.3.5 Authorized vacation leave without pay for an

aggregate of 15 days or less, inclusive of Saturdays,
Sundays and holidays, shall not interrupt the
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continuity of the 3 years service requirement for the
grant of a step increment. When the total number
of authorized vacation leave without pay incurred
within the 3- year period exceeds 15 days, the date
of the grant of step increments shall be moved or
adjusted accordingly.
3.9.1.3.6 In case of downward reclassification of a position

due to the exigency of the service or in case of
involuntary demotion, in which case the actual
salary of the incumbent falls in between steps, e.g.,
between step 4 and step 5 of the salary grade of
the position, the salary of the incumbent which is
off-step shall only be adjusted to the next higher
step, or step 5 after completing 3 years of service in
the previous higher position.
3.9.1.3.7 Public Health Workers shall either be granted step

increments or longevity pay, but not both benefits
as the grant of both for the same purpose and
period constitutes double recovery of the same
benefit which is contrary to Section 36 of RA No.
7305 (Magna Carta of Public Health Workers).
3.9.1.4 Applicability of Personal Services Cap
The step increment forms part of the implementation of RA

No. 6758, hence, the personal services cap under the Local
Government Code shall not be applicable to the grant thereof
to appointive LGU employees, provided that the prescribed
salary schedule for the LGUs’ income classes are being
implemented.
3.9.1.5 Notice of Step Increment
Heads of agencies shall notify the officials and employees

entitled thereto through a Notice of Step Increment as shown
in Annex “B” hereof, copy furnished the Government Service
Insurance System (GSIS).
3.9.1.6 Funding Source
3.9.1.6.1 For NGAs including SUCs, the amounts shall be

charged against agency savings from
appropriations.
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3.9.1.6.2 For GOCCs and GFIs, the amounts shall be

charged against their respective corporate
funds.
3.9.1.6.3 For LGUs, the amounts shall be charged

against their respective local government
funds.
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Annex “A”
ILLUSTRATIVE EXAMPLES
Illustrative Example 1 – Reclassification of Position
Geologic Aide SG-4 6,522 July 1, 2004 (Date of

appointment)
Science Aide SG-4 6,522 January 1, 2005 (Effectivity
date of reclassification of
the position)
The computation of the length of service shall start from July 1, 2004. The salary
adjustment to Step 2 in the position of Science Aide, SG-4, shall be on July 1, 2007.
Illustrative Example 2 – Involuntary Demotion
Information Officer II SG-15 13,300 May 15, 2002 (Date of

promotion)
Information Officer I SG-11 13,300 January 1, 2005 (Effectivity
of reorganization)
The computation of the length of service shall start from May 15, 2002. The resultant
salary due to involuntary demotion on January 1, 2005 shall be P13,300 which is already
beyond Step 8 of SG-11. The employee is no longer entitled to step increment in the
position of Information Officer I.
Illustrative Example 3 – Upgrading of Position
Legislative Staff Employee I SG-2 P4,796 February 1, 1999 (Date of

appointment
Legislative Staff Employee I SG-4 6,211 March 1, 2000 (Date of

upgrading of the position)
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The computation of the length of service shall start from February 1, 1999. The salary
adjustment to Step 2 in the position of Legislative Staff Employee I, SG-4, shall be on
February 1, 2002; to Step 3 on February 1, 2005.
Illustrative Example 4 - Transfer
Dental Aide SG-4 P6,522 March 1, 2003 (Date

of appointment)
Dental Aide SG-4 P6,522 October 1, 2004 (Date

of transfer)
The computation of the length of service shall start from March 1, 2003. The salary
adjustment to Step 2, shall be on March 1, 2006, and succeeding step increments shall be
every 3 years thereafter, if the incumbent remains in the same position.
Illustrative Example 5 – Reappointment to a Position with Lower Salary Grade
Engineer IV SG-22 P16,667 December 1, 1997 (Date of

promotion)
July 1, 2000 (The position

was phased-out due to
agency reorganization.)
July 1, 2002 (Date of

court’s decision)
Engineer III SG-19 P18,334 July 1, 2000 (Date of re-

(adjusted appointment without
salary in the diminution in salary)
previous
position of
Engineer IV;
falls between
the step 6
and step 7 of
SG-19)
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The computation of the length of service shall start from December 1, 1997. The salary
adjustment to Step 7 in the position of Engineer III, SG-19, shall be on December 1,
2000; to Step 8 on December 1, 2003.
Illustrative Example 6 – Exoneration of an Employee Placed under Preventive

Suspension
Nurse I SG-10 P9,466 November 15, 2000

(Date of appointment)
December 15, 20003

(Placed under
preventive suspension
without pay)
June 15, 2004 (Date

of exoneration)
The computation of the length of service shall start from November 15, 2000. The salary
adjustment to Step 2 shall be on November 15, 2003, and succeeding step increments shall be
every 3 years thereafter, if the incumbent remains in the same position.
Illustrative Example 7 – Change of Status of Appointment
Ticket Checker (Temporary SG-3 P6,039 April 1, 1996 (Date of

status) appointment)
Ticket Checker (Permanent SG-3 P6,039 August 15, 2004

status) (Date of change of
status of appointment)
The salary of the incumbent is adjusted to Step 4 on April 1, 2005.
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Annex “B”
-----------------------------------------------
Name of Agency
NOTICE OF STEP INCREMENT
----------------------------
Date
Mr./Ms. ______________________
_____________________________
_____________________________
Sir/Madam:
Pursuant to CSC and DBM Joint Circular No. 1, s. 1990, as amended, implementing
Paragraph 8 of the Senate and House of Representatives Joint Resolution No. 1, s. 1994, as
adopted under Executive Order No. 164 (Adopting a Revised Compensation and Position
Classification System in the Government), dated March 8, 1994, your salary as
____________________, is hereby adjusted effective __________________, as follows:
Basic Monthly Salary as of

________________________(Step _____) P__________________
Add: Step Increment (_____ Step) __________________
Adjusted Salary Effective

__________________________ P__________________
This step increment is subject to post-audit by the Department of Budget and

Management and to appropriate re-adjustment and refund if found not in order.
Very truly yours,
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__________________________
Head of Agency
Copy furnished: GSIS
3.9.2 Personnel Economic Relief Allowance
The Personnel Economic Relief Allowance (PERA) is a P500 monthly

allowance authorized under the pertinent general provision in the annual
General Appropriations Act (GAA). It is granted to augment a
government employee's pay due to the rising cost of living.
3.9.2.1 Coverage
3.9.2.1.1 Appointive government personnel occupying

regular plantilla positions;
3.9.2.1.2 Casual or contractual employees; and
3.9.2.1.3 Military personnel of the Armed Forces of the

Philippines, and uniformed personnel of the
Transportation and Communications, and the
National Mapping and Resource Information
Authority under the Department of Environment
and Natural Resources.
3.9.2.2 Not Covered
3.9.2.2.1 Elective officials;
3.9.2.2.2 Government personnel stationed abroad and

others similarly situated;
3.9.2.2.3 Those declared by the authorities concerned as

absent without leave during the month; and
3.9.2.2.4 Consultants, experts, student laborers,

apprentices, laborers of contracted projects
(“pakyaw”), mail contractors, those paid on
piecework bases; and others similarly situated.
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3.9.2.3.1 Government personnel who are paid salaries on

monthly basis shall be granted PERA of P500 each
per month.
3.9.2.3.2 The PERA of government personnel paid on daily

or part-time basis shall be computed as follows,
based on the actual services rendered during the
month but not to exceed P500 per month:
P500/Month Number of Days

PERA for the Month = --------------------- Worked During
xx Work Days/Month the Month
3.9.2.3.3 Actual services rendered during the month for

which PERA is to be paid shall include leaves of
absences with pay.
3.9.2.3.4 Government personnel who are on full-time or

part-time detail with another government agency
shall receive the PERA from their mother agencies,
or from the same source where they draw their
basic pay. No one shall receive PERA from more
than one source.
3.9.2.3.5 The rules and regulations relative to the PERA for

LGU personnel are covered by Chapter 9 of this
Manual.
3.9.2.4.1 For NGAs including SUCs, the PERA for personnel

occupying regular positions shall be charged
against the appropriations for the purpose in the
annual GAA. The PERA for casual and contractual
personnel shall be charged against their respective
lump-sum appropriations.

charged against their respective corporate funds.
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3.9.3 Additional Compensation
The Additional Compensation (ADCOM) of P500 per month authorized

under Administrative Order (AO) No. 53, dated May 17, 1993, is granted
as a supplement to basic pay. AO No. 144 dated February 28, 2006,
authorized the increase in the existing P500 per month ADCOM by
P1,000 per month, resulting to a total of P1,500 per month.
3.9.3.1 Coverage
3.9.3.1.1 Civilian appointive personnel under permanent,

temporary, contractual, casual or substitute
status, on full-time or part-time basis, in national
government agencies (NGAs), including state
universities and colleges, government-owned
and/or controlled corporations (GOCCs) and
government financial institutions (GFIs) created by
law, which are covered by or following Republic
Act (RA) No. 6758 (Compensation and Position
Classification Act of 1989), as amended;

Philippines and uniformed personnel of the
Transportation and Communications and the
National Mapping and Resource Information
Authority under the Department of Environment
and Natural Resources; and
3.9.3.1.3 Officials and employees of local government units

(LGUs)
3.9.3.2 Not Covered
3.9.3.2.1 Government officials and employees in NGAs and
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GOCCs/GFIs exempt from the coverage of RA No.
6758; and
3.9.3.2.2 Consultants, experts, student laborers,

apprentices, laborers of contracted projects
piecework bases and others similarly situated
3.9.3.3.1 Government personnel who are paid salaries on

monthly basis shall be granted ADCOM of P1,500
each per month.
3.9.3.3.2 The ADCOM of government personnel paid on

hourly, daily or part-time basis shall be
computed on the basis of actual services
rendered on an eight-hour working day, 22
working day-month, regardless of the number of
working days in a month but not to exceed
P1,500 per month.
3.9.3.3.3 The ADCOM of government personnel who were

on absence without leave and/or who were on
leave without pay during the month shall be
computed on the basis of actual services
rendered with pay during the month.
3.9.3.3.4 Government personnel who are on full-time or

part-time detail with other government agencies
shall be paid the ADCOM by their mother
agencies. Those on full-time or part-time detail
with projects shall be paid ADCOM from project
funds if they draw their basic salaries thereform.
No one shall receive ADCOM from more than
one (1) fund source.
3.9.3.3.5 The ADCOM of government personnel with

pending cases shall continue to be paid for as
long as they render services and are paid their
basic salaries.
3.9.3.3.6 The ADCOM of government personnel under

preventive suspension shall not be paid during
the period of their suspension. If they are
exonerated and if decided upon by the
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authorities concerned, they shall be entitled to
the full amount of the ADCOM starting from the
day of suspension. If they were meted penalties
and not paid their salaries, they shall not be
entitled to the ADCOM until they have served
their penalties.
3.9.3.3.6.1 In this regard, if the penalty meted

out is only a reprimand, such
penalty shall not be a basis for the
disqualification to receive said
benefit.
3.9.3.3.7 The rules and regulations relative to the

payment of ADCOM to LGU personnel are
provided in Chapter 9 of this Manual.
3.9.3.4.1 For NGAs including SUCs, the ADCOM for

personnel occupying regular positions shall be
charged against the appropriations for the
purpose in the annual GAA. The ADCOM for
casual and contractual personnel shall be charged
against their respective lump-sum appropriations.
3.9.3.4.2 For GOCCs and GFIs, the amount shall be charged

against their respective corporate funds.
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3.9.4 Uniform/Clothing Allowance
The Uniform/Clothing Allowance (UCA) authorized under the pertinent

general provision of the annual GAA is granted to cover the cost of
uniform/clothing of government employees to identify them with their
mother agency/office.
3.9.4.1 Coverage
All government personnel regardless of status of employment
3.9.4.2 Not Covered

Philippines and uniformed personnel of the
Department of the Interior and Local Government
and the Philippine Coast Guard under the
Department of Transportation and Communications;
3.9.4.2.2 Foreign service personnel of the Department of

Foreign Affairs and of other departments and
agencies who are stationed abroad;
3.9.4.2.3 Government personnel who are on leave without

pay for more than 6 consecutive months in a
particular year;
3.9.4.2.4 Government personnel whose U/CA rates are

specifically provided for by law; and
3.9.4.2.5 Those who are hired as consultants, experts,

student laborers, laborers of contracted projects
piecework bases, and others similarly situated
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3.9.4.3.1 The U/CA, which rate shall be as prescribed in the
pertinent general provision of the annual GAA,
may be given in cash or in kind subject to the
discretion of the agency head.
3.9.4.3.2 Government personnel who are expected to

render at least 6 consecutive months of service in
a particular year including leaves of absence with
pay shall be entitled to U/CA.
3.9.4.3.3 Newly hired government personnel shall be

entitled to U/CA after they have rendered 6
consecutive months of service, or in the next
grant thereof, whichever comes later.
3.9.4.3.4 Part-time government personnel shall not be

entitled to U/CA except medical personnel who
shall be entitled to U/CA equivalent to 1/2 of the
amount authorized in the GAA.
3.9.4.3.5 The U/CA for special police, security guards,

prison guards, firefighters and other similar
positions shall be inclusive of other articles of
clothing like regulation caps, belts, and coats.
3.9.4.3.6 The U/CA of government personnel who are on

detail with other government agencies shall be
borne by the mother agency.
3.9.4.3.7 Government personnel who transferred to other

agencies during the first 6 months of a particular
year and were not granted U/CA by their former
agencies, whether in cash or in kind, shall be
granted U/CA by their new agencies. If they
transferred to other agencies within the last 6
months of a particular year, they shall no longer
be granted U/CA by their new agencies as by
then they are deemed to have been granted U/CA
by their former agencies.
3.9.4.3.8 Government personnel who are required to wear

uniforms at all times in the performance of their
functions such as security guards, prison guards,
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firefighters, teachers, those which are in direct
contact with patients, and others occupying similar
positions, shall be granted U/CA whether or not
they meet the service requirement.
3.9.4.3.9 Government personnel who transferred to other

agencies and who are required to wear uniforms
at all times like the positions cited under item
3.9.4.3.8 hereof, may be granted U/CA by their
new agencies even if they have received U/CA
from their former agencies, subject to the
discretion of the agency head concerned.
3.9.4.3.10 The guidelines on the wearing of the uniform, e.g.

for those in mourning, on maternity leave, during
wash days, etc. shall be at the discretion of the
agency head.

purpose under the annual GAA. The U/CA of
casual or contractual personnel shall be charged
against the lump-sum appropriations where their
salaries are drawn.

3.9.4.4.3 For LGUs, the amounts shall be charged against

their respective local government funds.
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3.9.5 Representation and Transportation Allowances
The pertinent general provisions of the General Appropriations Acts

(GAAs) prior to FY 1993 and in the FY 1999 GAA provided that the
officials listed therein and those of equivalent ranks as may be
determined by the Department of Budget and Management (DBM) are
to be granted monthly commutable RATA. Hence, prior to FY 1993 and
in FY 1999, RATA were allowances attached to the position.
The pertinent general provisions of the FYs 1993 to 1998 GAAs and in
the FY 2000 GAA provided that the officials listed therein and those of
equivalent ranks as may be determined by the DBM while in the actual
performance of their respective functions are to be granted monthly
commutable RATA. This provision was reiterated in the pertinent
general provisions of subsequent GAAs. Hence, in FYs 1993 to 1998 and
beginning FY 2000 and up to the present, the actual performance of an
official’s duties and responsibilities was a pre-requisite to the grant of
RATA.
The rationale behind the qualifying phrase, “while in the actual

performance of their respective functions,” is to provide the official
concerned with additional funds to meet necessary expenses incidental
to and connected with the exercise or the discharge of the functions of
the office. Thus, if the official is out of office, whether voluntary or
involuntary, the official does not and is not supposed to incur expenses.
There being no expenses incurred, there is nothing to reimburse.
Since RATA are privileges or benefits in the form of reimbursement of

expenses, they are not salaries or part of basic salaries. Forfeiture or
non-grant of the RATA does not constitute diminution in pay.
RATA may be spent in variable amounts per work day depending on the
situation. Entitlement thereto should not be proportionate to the
number of work days in a month, inclusive of regular and special
holidays falling on work days.
3.9.5.1 Coverage
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3.9.5.1.1 Officials enumerated in the pertinent general

provision of the annual GAA;
3.9.5.1.2 Those whose positions were determined by the

DBM to be of equivalent ranks with the officials
enumerated under item 3.9.5.2.1 hereof, including
those in GOCCs, local water districts (LWDs) and
GFIs;
3.9.5.1.3 Those duly designated by competent authorities to

perform the full-time duties and responsibilities,
whether or not in concurrent capacities, as
Officers-In-Charge (OICs) of positions in items
3.9.5.1.1 and 3.9.5.1.2 hereof; and
3.9.5.1.4 Those hired on full-time contractual basis as part of

agency organizations and whose positions were
determined by the DBM as equivalent in ranks with
the officials enumerated under item 3.9.5.2.1
hereof.
3.9.5.2.1 RATA Rates
Officials and those of equivalent ranks as may be

determined by the DBM who actually perform the
regular duties and responsibilities of their positions
are authorized to collect monthly commutable RATA
at rates prescribed under the pertinent general
provision of the annual GAA.
Pursuant to Section 45 of the General Provisions of

RA No. 9336, the FY 2005 GAA, re-enacted in FY
2006, and as implemented by National Budget
Circular No. 498 dated April 1, 2005, the following
are the RATA rates:
Monthly Rate
for Each Type
Officials of Allowance
Department Secretaries P 7,500

and those of equivalent ranks
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Department Undersecretaries 6,000

Department Assistant Secretaries 5,500

Bureau Directors, Department 5,000

Regional Directors and those
of equivalent ranks
Assistant Bureau Directors, Department 4,500

Assistant Regional Directors, Bureau
Regional Directors, Department Service
Chiefs and those of equivalent ranks
Assistant Bureau Regional Directors 4,000

Chiefs of Division identified as such 3,000

in the Personal Services Itemization and
Plantilla of Personnel and those
of equivalent ranks
Revised RATA rates may be implemented in future years if

authorized in the GAA, subject to the provisions of
implementing circulars.
3.9.5.2.2 Officials and employees enumerated under item

3.9.5.1 hereof shall no longer be authorized to
continue to collect RATA if they are in the following
instances for one (1) full calendar month or more:
3.9.5.2.2.1 When on full-time detail with other

government agencies or on
reassignment within the same
government agencies for one full
calendar month or more, except when
the duties and responsibilities they
perform are comparable with those of
their regular positions, in which case,
they may be authorized to continue to
collect RATA on a reimbursable basis,
subject to the availability of funds; and
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3.9.5.2.2.2 When on vacation, sick or maternity

leave of absence with or without pay for
one full calendar month or more.
3.9.5.2.3 Officials and employees whose detail or

reassignment has been found by appropriate judicial
bodies to be not in accordance with existing laws,
rules and regulations, shall be authorized to collect
RATA on reimbursable bases for the duration of
such detail or reassignment.
3.9.5.2.4 Officials and employees who are on authorized

attendance at a training course/scholarship
grant/seminar or any other similar activity, which is
tantamount to the performance of their regular
duties and responsibilities, may be authorized to
continue to collect RATA on a reimbursable basis,
subject to the availability of funds.
3.9.5.2.5 Officials and employees designated as Officers-In-

Charge of positions entitled to commutable RATA
may be authorized to collect reimbursable RATA for
the positions if provided in the office orders
designating them as such, except in the following
instances:
3.9.5.2.5.1 When designated in concurrent

capacities and the officials and
employees so designated are already
entitled to commutable RATA in their
permanent positions, in which case
they may be authorized to collect the
difference only, if any, between the
RATA of the two positions; and
3.9.5.2.5.2 When on full-time or part-time detail

with another government agency or on
reassignment in an organizational unit
of the same government agency;
attending a training course/scholarship
grant/seminar or any other similar
activity; or on vacation, sick or
maternity leave of absence, for one (1)
full calendar month or more.
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3.9.5.2.6 The Transportation Allowance (TA) shall not be
granted to officials who are assigned or who use
government service vehicles in the performance of
their duties and responsibilities.
3.9.5.2.7 Officials whose service vehicles could not be used

for at least one (1) week since these are out of
order or are undergoing repair shall be allowed to
claim the proportionate monthly cash equivalent of
their TAs until such service vehicles are ready for
use.
3.9.5.2.8 Full-time contractual employees whose positions

were determined by the DBM to be of equivalent
ranks to the officials enumerated under item
3.9.5.2.1 hereof are entitled to commutable RATA at
rates indicated therein. The grant of RATA shall be
indicated in the terms of the contracts of service.
3.9.5.3.1 NGAs Including SUCs
3.9.5.3.1.1 The commutable RATA for officials

in NGAs and SUCs who occupy
regular positions shall be charged
against the appropriations for the
purpose in the annual GAA.
Deficiencies shall be charged
against savings in agencies’
appropriations for personal
services.
3.9.5.3.1.2 The reimbursable RATA for duly

designated Officers-In-Charge of
funded vacant positions shall be
charged against the RATA
appropriated for the positions. If
the positions are unfunded, the
reimbursable RATA shall be
charged against savings from
appropriations for maintenance
and other operating expenses.
3.9.5.3.1.3 The RATA for contractual officials

shall be charged against the
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corresponding lump sum
appropriations.
3.9.5.3.2 GOCCs, GFIs and LWDs
The RATA shall be charged against their

respective corporate funds.
In all cases, no one shall be allowed to collect RATA from

more than one source.
3.9.6 Year-End Bonus and Cash Gift
The Year-End Bonus and Cash Gift is intended as a year-end premium to

government personnel for satisfactory and dedicated service. They are
collectively referred to as the Year-end Benefit (YEB), authorized under
Republic Act (RA) No. 6686, as amended by RA No. 8441. The
liberalization of the grant thereof is authorized pursuant to the pertinent
general provision in the annual GAA.
3.9.6.1 Coverage
3.9.6.1.1 All government personnel in NGAs including SUCs,

GOCCs, GFIs and LGUs, whether appointive or
elective, under permanent, temporary or casual
status, and those issued contractual appointments
who are under the following instances from
January 1 to October 31 of each year:
• Those who have rendered at least a total or an

aggregate of 4 months of service including
leaves of absence with pay;
• Those who are on approved leave of absence

without pay but have rendered at least a total
or an aggregate of 4 months of service
provided they are not yet dropped from the
rolls; and
• Those who have rendered less than 4 months

of service
The aggregate service requirement for purposes

of the grant of YEB shall include such
services
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before the termination of the employment
during the year under the following modes:
♣ resignation;
♣ separation not for cause;
♣ termination of contract/appointment; or
♣ termination of term in office
from the date they were rehired/reappointed

during the year to the same or another
position in the same or another agency.
3.9.6.1.2 All “punong barangay,” “sangguniang barangay”

members, “barangay” secretaries and “barangay”
treasurers
3.9.6.2 Not Covered
All government personnel under the following instances shall

not be entitled to the one-half (1/2) YEB or the full YEB:
3.9.6.2.1 Those on absence without leave (AWOL);
3.9.6.2.2 Consultants, experts, student laborers, apprentices,

laborers of contracted projects (“pakyaw”), mail
contractors, those paid on piecework bases, and
others similarly situated; and
3.9.6.2.3 Those who are formally charged administrative

cases as well as criminal cases which relate to acts
or omissions in connection with their official duties
and functions and found guilty and/or meted
penalties, subject to conditions stipulated in item
3.9.6.3.6 hereof
3.9.6.3.1 Payment of the YEB
3.9.6.3.1.1 Government personnel who have

rendered at least a total of 4 months
service including leaves of absence
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with pay from January 1 to October 31
of a particular year, and who are in
the service as of October 31 of the
same year, shall be entitled to the full
YEB based on the basic monthly
salaries as of October 31.
3.9.6.3.1.2 One-half (½) of the YEBs may be paid

to government personnel not earlier
than May 1 and not later than May 31
of a particular year, based on the
basic monthly salaries as of April 30,
provided that they have rendered at
least 4 months of service including
leaves of absence with pay from
January 1 to April 30 of the same
year, regardless of whether or not
they will still be in the service as of
October 31 of the same year.
3.9.6.3.1.3 The remaining half or the balance of

the full YEBs (for those not granted ½
YEBs in May for lack of service
requirement) shall be paid not earlier
than November 15 and not later than
November 30 of each year, provided
that the conditions stipulated under
item 3.9.6.3.1.1 are satisfied.
3.9.6.3.1.4 Those who have rendered more than

4 months of service in a given year
and are to retire or are to be
separated before October 31 of the
year may receive the proportionate
shares of the remaining balances of
their cash gifts in addition to their ½
YEBs, based on the following scheme,
to be paid within the month of
retirement/separation of the
employees concerned:
Month of Retirement/
Percentage Corresponding
Separation
of P5.000 Amount
from the Service
May 0% P 0
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June 20% 500

July 40% 1,000
August 60% 1,500
September 80% 2,000
October 100% 2,500
3.9.6.3.1.5 Government personnel who have

rendered less than 4 months of service
as of October 31 of the same year
shall be entitled solely to the cash gift
pro-rated as follows:
Percentage Corresponding
Length of Service
of P5,000 Amount
3 months but less than 4 40% P2,000
months
2 months but less than 3 30% 1,500
months
1 month but less than 2 20% 1,000
months
Less than 1 month 10% 500
3.9.6.3.2 Personnel on Part-Time Service
Provided that the conditions stipulated in item

3.9.6.3.1.1 are satisfied, the YEBs for employees on
part-time service are as follows;
3.9.6.3.2.1 Those who are employed on part-time

bases are entitled to the YEBs
corresponding to their basic monthly
salaries and to the proportionate
amounts of their cash gifts.
3.9.6.3.2.2 Those who render part-time services

in 2 or more different agencies shall
be entitled to the YEBs corresponding
to each of their total basic monthly
salaries provided that each of their
total cash gifts shall not exceed
P5,000.
3.9.6.3.3 Personnel on Full-Time or Part-Time Detail
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The YEBs of government personnel on full-time or
part-time detail with other agencies shall be paid by
their respective mother agencies.
3.9.6.3.4 Transferred Personnel
The YEBs of government personnel who transferred

from one agency to another shall be granted by the
new offices. If they were granted their ½ YEBs in
their former offices, only the remaining balances of
the YEBs shall be paid by their new offices.
Certifications from the former offices of the
availment of the ½ YEBs are necessary.
3.9.6.3.5 Personnel on AWOL
3.9.6.3.5.1 Government personnel on AWOL

within the period, January 1 to April
30 of a particular year, shall not
receive the advanced payment of their
½ YEBs in May of the same year.
3.9.6.3.5.2 Those on AWOL within the period,

January 1 but before October 31 of
the same year but have rendered a
total or an aggregate of 4 months
service, including leaves of absence
with pay as of October 31, may be
granted the full YEBs within the
period, November 15 to November 30
of the same year.
3.9.6.3.5.3 Those on AWOL as of October 31 of a

particular year are not entitled to YEBs
notwithstanding that they have
rendered a total or an aggregate of at
least 4 months of service, including
leaves of absence with pay before
October 31 of the same year.
3.9.6.3.6 Personnel Charged with Administrative Cases
3.9.6.3.6.1 Government personnel formally

charged administrative and/or criminal
cases and whose cases are still
pending for resolution shall be entitled
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to the YEBs until found guilty and
meted penalties.
3.9.6.3.6.2 Those found guilty shall not be

entitled to the YEBs in the year the
decisions were handed down. If the
penalties meted out are only
reprimands, such penalties should not
be made the bases of disqualification
to receive the YEBs.
3.9.6.3.6.3 Those found guilty and later on

exonerated by competent authorities
upon appeal of the cases shall be
entitled to the back YEBs unless
decided otherwise by said authorities.
3.9.6.3.7 “Barangay” Officials
3.9.6.3.7.1 “Barangay” officials under item

3.9.6.1.2 hereof shall be entitled only
to cash gifts of P5,000 each, provided
the conditions stipulated in item
3.9.6.3.1.1 are satisfied.
3.9.6.3.7.2 One-half (½) of their cash gifts may

be paid to each of them not earlier
than May 1 and not later than May 31
of a particular year, provided that the
conditions stipulated in item
3.9.6.3.1.2 are satisfied.
3.9.6.3.7.3 The remaining half of the cash gifts

shall be paid to each of them not
earlier than November 15 and not
later than November 30 of each year,
provided that they are still in the
service as of October 31.
3.9.6.3.7.4 Those who have rendered more than

4 months of service in a given year
and are to be separated before
October 31 of the year may each
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receive the remaining balance of the
cash gift in addition to ½ of the cash
gift, based on the scheme in item
3.9.6.3.1.4, to be paid within the
month of separation of the barangay
officials concerned.
3.9.6.3.8 Prohibition Against Payment of Additional Bonuses
Agencies are prohibited from granting additional

bonuses in any form other than the YEB.

purpose in the annual GAA. Deficiencies in
appropriations shall be charged against available
savings of agencies. The YEBs for casual and
contractual personnel shall be charged against
their respective lump-sum appropriations.

operating budgets.

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3.9.7 Productivity Incentive Benefit
The Productivity Incentive Benefit (PIB) is a cash award authorized

under Administrative Order (AO) No. 161, dated December 6, 1994, to
recognize individual personnel productivity and performance which
contributed to attainment of agency goals and targets. Performance
includes conduct and behavior in the discharge of the duties of a public
office.
3.9.7.1 Coverage
3.9.7.1.1 Appointive personnel of NGAs including SUCs,

GOCCs, GFIs and LGUs on permanent or
temporary status; and
3.9.7.1.2 Those issued casual and contractual

appointments, even if their services have been
terminated effective December 31 of the year for
which the PIBs are granted
3.9.7.2 Not Covered
3.9.7.2.1 Those who were suspended either preventively or

as a penalty as a result of an administrative
charge within the year for which PIBs are granted,
regardless of the duration of the suspension;
3.9.7.2.2 Those who were dismissed within the year for

which PIBs are granted;
3.9.7.2.3 Those who have been absent without official leave

within the year for which PIBs are granted;
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3.9.7.2.4 Those hired not as part of the organic manpower

of agencies but as consultants, experts, student
laborers, apprentices, laborers of contracted
projects (“pakyaw”), those paid on piecework
bases, and others similarly situated;
3.9.7.2.5 Elective national government officials and local

government officials down to the municipal level
in the absence of an objective system of
evaluating their individual productivity and
performance, unless AO No. 161 is amended; and
3.9.7.2.6 Elective and appointive barangay personnel paid

honoraria
3.9.7.3.1 Basis of Grant of PIB
3.9.7.3.1.1 The grant of the PIB shall be based

on individual personnel productivity
and performance as evaluated and
determined by the agency
authorities concerned in accordance
with the policies and standards set
by the Civil Service Commission.
3.9.7.3.1.2 To be entitled to PIBs, government

personnel shall have at least
satisfactory performance ratings for
the 2 semesters during the year for
which PIBs are granted and shall
have contributed to the productivity
of the office.
3.9.7.3.1.3 The minimum appraisal period shall

be at least 90 days or 3 months. No
appraisal period shall be longer than
1 year. Should there be only one
performance rating, it shall be
understood to apply for the 2
semesters or 1 year covered by the
rated performance.
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3.9.7.3.2 Amount of PIBs
3.9.7.3.2.1 The amount of PIBs to be granted to

deserving personnel in agencies may
vary per individual, depending on
the latter’s productivity and
performance appraisal. Agency
heads shall establish the internal
guidelines for the grant thereof.
3.9.7.3.2.2 The total cost of the PIBs granted

shall in no case exceed the average
of P2,000 per filled position. This
should not be construed to mean as
prescribing an across-the-board
grant of incentive.
3.9.7.3.3 PIBs for Transferred Personnel
3.9.7.3.3.1 The PIBs for personnel who

transferred to other government
agencies on or before the end of the
calendar year for which the PIBs are
granted shall be paid by the new
agencies.
3.9.7.3.3.2 The PIBs of those who transferred

after December 31 of the year for
which the PIBs are granted shall be
paid by the former agencies.
3.9.7.3.4 PIBs for Part-Time Personnel
The PIBs for personnel employed on part-time

bases, whether employed on permanent,
temporary or contractual status, shall be
equivalent to ½ of the full amount received by
full-time personnel with the same productivity and
performance appraisals.
3.9.7.3.5 PIBs for Other Personnel
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Cases concerning the PIBs of personnel who were
newly-hired, retired, on leave of absence with or
without pay, or on authorized attendance at a
training course/scholarship grant or any other
similar activity shall be referred to the Civil Service
Commission for resolution. Other cases not
covered by this Manual shall be referred to the
DBM for proper study and recommendation to the
Office of the President.
3.9.7.3.6 Subject to the conditions stipulated in item

3.9.7.3.1.2 hereof,
• Personnel who were preventively suspended
but later exonerated of the charges filed
against them shall be entitled to PIBs.
• If the penalties are only reprimands, the

personnel may be entitled to PIBs.
3.9.7.4.1 For NGAs including SUCs, the PIBs for personnel

occupying regular positions shall be charged
against the appropriations for the purpose in the
annual GAA. The PIBs for casual and contractual
personnel shall be charged against their
respective lump-sum appropriations.


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3.9.8 Overtime Pay
Government employees are required to render 40 hours of work in a

week, subject to the work schedule adopted by the agencies concerned.
Through adequate planning of work activities, overtime work could be
avoided. Hence, overtime work should not be resorted to in the
performance of regular work, except in cases when unforeseen events
and emergency situations will result in any of the following:
• Cause financial loss to the government or its instrumentalities;
• Embarrass the government due to its inability to meet is

commitments; or
• Negate the purposes for which the work or activity was conceived.
Should the need to render overtime services become very necessary,

overtime pay may be paid pursuant to Section 63, Chapter 7, Book VI of
Executive Order No. 292 (Administrative Code of 1987), dated July 25,
1987, as implemented by Budget Circular No. 10, dated March 29, 1996.
3.9.8.1 Coverage
3.9.8.1.1 Incumbents of positions of chiefs of division and

below under permanent, temporary or casual
status, and contractual personnel whose
employments are in the nature of regular
employees; and
3.9.8.1.2 Incumbents of positions of chiefs of division and

below who are designated to positions higher
than chiefs of division
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3.9.8.2 Not Covered
3.9.8.2.1 Those occupying the following positions:
• Department Secretaries;
• Department Undersecretaries;
• Department Assistant Secretaries;
• Bureau Directors and Regional Directors
• Assistant Bureau Directors and Assistant

Regional Directors; and
• Department Service Chiefs and Assistant

Department Service Chiefs
3.9.8.2.2 Incumbents of positions of equivalent category as

those above-mentioned in SUCs, GOCCs, GFIs
and LGUs;
3.9.8.2.3 Incumbents of intermediate positions to the above

enumerated positions in the NGAs, SUCs, GOCCs,
GFIs and LGUs;
3.9.8.2.4 Elective officials; and
3.9.8.2.5 Other appointive officials whose equivalent ranks

are higher than chiefs of division
3.9.8.3.1 Overtime services shall include:
• Those rendered beyond eight (8) work hours

of regular work days;
• Those rendered on rest days, such as

Saturdays and Sundays; and
• Those rendered on holidays or non-working

days.
3.9.8.3.2 Personnel who rendered overtime services shall be

granted overtime pay by the hour which shall be
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based on his/her actual hourly rate derived as
follows:
Actual Hourly Rate (HR) = Actual Salary/Month

-----------------------------
(22 Days/Month) (8 Hours/Day)
3.9.8.3.3 Overtime pay shall be computed as follows:
• For ordinary work days: Plus 25% of the

hourly rate (0.25 x HR)
Overtime Pay = 1.25 x HR x Number of Hours of

Overtime Services Rendered
• For rest days, holidays and non-work days:

Plus 50% of the hourly rate (0.50 x HR)
Overtime Pay = 1.50 x HR x Number of Hours of

Overtime Services Rendered
3.9.8.3.4 The total overtime pay of an employee for the year

shall not exceed 50% of his/her annual basic
salary.
3.9.8.4.1 For NGAs including SUCs, the overtime pay shall be

charged against:
3.9.8.4.1.1 The amounts specifically appropriated

for the purpose in agency budgets;
and/or
3.9.8.4.1.2 Savings from released allotments for

current operating expenditures,
provided that:
All mandatory expenses as

authorized by law have been paid;
and
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Total overtime payments made in a

given calendar year shall not
exceed 5% of the total salaries of
authorized positions of the agency.
Such savings may be used without

need for prior authority from the DBM,
provided that the aforestated
conditions are fully satisfied.
3.9.8.4.2 For GOCCs, and GFIs, the amounts shall be


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3.9.9 Compensatory Time-Off
Section 1 (d) of Administrative Order No. 103 (Directing the

Continued Adoption of Austerity Measures in the Government)
dated August 31, 2004, provides for the adoption of a scheme
that will allow employees to be compensated through
time/days off in lieu of overtime pay. Thus, Civil Service
Commission and DBM Joint Circular No. 2, s. 2004, was issued
to implement said provision.
Said Joint Circular refers to the Compensatory time-Off (CTO)

as the number of hours or days an employee is excused from
reporting for work with full pay and benefits. It is a non-
monetary benefit provided to an employee in lieu of overtime
pay.
3.9.9.1 Coverage
3.9.9.1.1 Incumbents of positions of chiefs of

division and below under permanent,
temporary or casual status, and
contractual personnel whose
employments are in the nature of
regular employees
3.9.9.1.2 Incumbents of positions of chiefs of

division and below who are designated
to positions higher than chiefs of
division
3.9.9.2 Not Covered
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3.9.9.2.1 Those occupying positions whose
equivalent ranks are higher than chiefs
of division;
3.9.9.2.2 Elective officials; and
3.9.9.2.3 Military and uniformed personnel
3.9.9.3 Guidelines
3.9.9.3.1 Overtime services which may be

compensated through CTO as may be
authorized by heads of agencies for the
following activities:
• completion of infrastructure and

other projects with set deadlines
when due to unforeseen events the
deadlines cannot be met without
resorting to overtime work;
• relief, rehabilitation, reconstruction

and other related work or services
during calamities and disasters;
• work related to school

graduation/registration where the
additional work cannot be handled
by existing personnel during regular
work hours;
• work involving the preparation for

and administration of government
examinations, including the prompt
correction and release of results
thereof where existing personnel are
not adequate to handle such work
during regular work hours;
• seasonal work such as budget
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preparation and rendition of annual

reports to meet scheduled deadlines;
• preparation of special/financial/
accountability reports required
occasionally by central monitoring
agencies like the Congress of the
Philippines, Office of the President,
Commission on Audit, DBM, and
National Economic and Development
Authority;
• the provision of essential public

services during emergency
situations, such as power and
energy, water, distribution and
control of basic staples,
communication and transportation,
medical and health services, peace
and order, and security;
• implementation of special
programs/projects embodied in
Presidential directives and
authorizations with specific dates of
completion;
• legal services to facilitate the

dissolution of cases/resolutions/
decisions;
• services rendered by drivers and

other immediate staff of officials
when required to keep the same
working hours as their superiors;
and
• such other activities as may be

determined by the head of agency.
3.9.9.3.2 Computation of Compensatory Overtime

Credit
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As a result of services rendered beyond
regular work hours, and/or those
rendered on Saturdays, Sundays,
holidays or scheduled days off without
the benefit of overtime pay, an employee
earns accrued number of hours worked.
These are collectively referred to as
compensatory overtime credit (COC).
The COC is expressed in number of

hours and computed as follows:
3.9.9.3.2.1 For overtime services

rendered on weekdays or
scheduled work days:
COC = Number of Hours of Overtime Services x 1.0
The 1.0 multiplier is used

since overtime services during
weekdays or scheduled work
days are considered as mere
extension of regular work
hours. The employees
rendering overtime services
are not expected to incur
additional expenses.
3.9.9.3.2.2 For overtime services

rendered on weekends,
holidays or scheduled days
off:
COC = Number of Hours of Overtime Services x 1.5
The 1.5 multiplier is used

since the employees who
render overtime services on
weekends, holidays or
scheduled days off incur
incidental expenses for
transportation and meals.
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3.9.9.3.3 Accrual and Use of COCs
3.9.9.3.3.1 Employees may accrue not

more than 40 hours of COC
in a month. In no instance,
however, shall the total COC
exceed 120 hours at any
given time. COC in excess
of the limit shall be
forfeited. These measures
are intended to ensure
judicious use of regular
work hours and to efficiently
balance agency manpower
with respect to the
availment of the CTO.
3.9.9.3.3.2 The COC should be used as

time-off within the year they
are earned until the
immediately succeeding year.
Thereafter, any unutilized
COCs are deemed forfeited.
3.9.9.3.3.3 The COCs shall be considered

as official time for the
following purposes:
3.9.9.3.3.3.1 compliance with

compensation
rules relative to
the entitlement
to PERA,
Additional
Compensation,
year-end
benefits, and
other benefits
received on
regular bases;
and
3.9.9.3.3.3.2 computation of
service hours
for entitlement
to sick and
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vacation leave
credits, and
step increment
due to length of
service.
3.9.9.3.3.4 Limitation on the Use of COCs
3.9.9.3.3.4.1 The COCs cannot be

used to offset
undertime/s or
tardiness incurred by
the employee during
regular work days.

converted to cash,
hence, are non-
commutative.

added to the regular
leave credits of the
employee. Hence, it is
not part of the
accumulated leave
credits of the
employee.
3.9.9.3.3.5 Effect on Personnel Movement
3.9.9.3.3.5.1 In cases of resignation,

retirement, or
separation from the
service, the unutilized
COCs are deemed
forfeited.
3.9.9.3.3.5.2 In cases of detail,

secondment or transfer
to another agency, the
COCs earned in one
agency cannot be
transferred to another
agency, nor could the
employees receive the
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monetary equivalents
thereof.
3.9.9.3.3.5.3 In cases of promotion,

except when promoted
to positions not
qualified to receive
overtime pay, the
employees shall retain
their accrued COCs.
3.9.9.3.3.6 Issuance of Certificate of COC Earned
An employee who has earned COC

shall be granted a Certificate of COC
Earned (Annex C) duly approved and
signed by the agency head. The
certificate shall indicate the
employee’s number of hours of earned
COC in a month. The certificate should
be issued at the end of each month.
3.9.9.3.3.7 Availment of CTO
3.9.9.3.3.7.1 To ease tracking of COCs

and simplify CTO
availment process, the
CTO may be availed of in
blocks of 4 or 8 hours.
Agencies adopting
alternative work
schedules should make
parallel adjustments in
the availment blocks,
tantamount to either a
half or full day leave
from work.
3.9.9.3.3.7.2 The employee may use

the CTO continuously up
to a maximum of 5
consecutive days per
single availment, or on
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staggered basis within
the year.
3.9.9.3.3.7.3 The employee must first

obtain approval from the
agency head or
authorized official
regarding the schedule
of availment of CTO. The
management shall
accommodate, to the
extent practicable, all
applications for
availment of CTO at the
time requested by the
employee. In the
exigency of the service,
however, the schedule
may be recalled and
subsequently re-
scheduled within the
year by the agency head
or authorized official.
3.9.9.3.3.8 Procedure
The following procedure shall be

observed in the rendition of overtime
services and availment of CTO:
3.9.9.3.3.8.1 The agency head or

authorized official
issues an office order
authorizing the
rendition of overtime
services and indicating
the tasks to be
completed and the
expected time of
completion.
3.9.9.3.3.8.2 The employee renders

overtime services as
stipulated in the office
order.
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3.9.9.3.3.8.3 The Administrative
Officer concerned
prepares a summary of
overtime services
rendered in a month,
and computes the
equivalent COC, for the
purpose of the
issuance of the COC
Certificate.
3.9.9.3.3.8.4 The agency head or

authorized official
issues the Certificate of
COC, specifying the
number of hours of
COC earned in a
month.
3.9.9.3.3.8.5 The employee requests

approval from the
agency head or
authorized official on
the schedule of CTO.
3.9.9.3.3.8.6 The employee avails of

the CTO.
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Annex C
Certificate of COC Earned
This certificate entitles Mr./Ms. _______________________________ to
_____________________ of Compensatory Overtime Credits.

(number of hrs.) Front
Head of Office
Date Issued: __________________

Valid Until: __________________
No. of Hours of Earned Date of CTO Used COC Remaining COC Remarks
COCs/Beginning Balance
Approved by: Claimed: 3-54

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3.9.10 Per Diem
Per diem is a compensation granted to a chairperson, vice-

chairperson or member of a collegial body created by law
for attendance in collegial meetings with quorum.
The guidelines on per diems are provided under Budget

Circular (BC) No. 2003-6, dated September 29, 2003, as
amended by BC No. 2005 ______, dated _____________.
3.9.10.1 Coverage
3.9.10.1.1 Chairpersons, vice-chairpersons and

members of collegial bodies in NGAs,
GOCCs and GFIs; and
3.9.10.1.2 Chairpersons and members of the

Board of Regents/Trustees of SUCs
3.9.10.2 Not Covered
3.9.10.2.1 Department Secretaries, Department

Undersecretaries and Department
Assistant Secretaries occupying ex-
officio positions in governing boards,
commissions, committees, councils
and similar bodies, in view of the
Supreme Court ruling in the case, Civil
Liberties Union vs. Executive Secretary
(G.R. No. 83896), dated February 22,
1991;
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3.9.10.2.2 Appointed chairpersons, vice-
chairpersons and members of collegial
bodies who receive salaries and other
compensation;
3.9.10.2.3 Chief operating officers and other

officials of government entities who
are ex-officio members of their
entities’ collegial bodies;
3.9.10.2.4 Chairpersons, vice-chairpersons and

members of collegial bodies who are
paid honoraria pursuant to existing
laws and implementing rules and
regulations; and
3.9.10.2.5 Members of local regulatory boards,

quasi-judicial bodies and similar bodies
whose per diem and the rules and
regulations on the grant thereof are
included in Chapter 9 of this Manual.
3.9.10.3.1 Per diems of the chairpersons, vice-

chairpersons and members of collegial
bodies
3.9.10.3.1.1 The chairpersons, vice-

chairpersons and members
of collegial bodies shall be
entitled to per diems at
rates not exceeding the
following:
Chairpersons Amount equivalent to

25% of the monthly
representation and
transportation allowances
(RATA) of the chief
operating officer of the
collegial body for every
meeting actually attended
but not to exceed 4 paid
meetings in a month
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Vice-Chair- Amount equivalent to
persons/ 25% of the monthly RATA
Members of the second ranking
official of the collegial
body for every meeting
actually attended but not
to exceed 4 paid meetings
in a month
3.9.10.3.2 Per diems of the chairpersons and

members of Board of Regents/Trustees
of SUCs
3.9.10.3.2.1 Consistent with the Revised

Implementing Rules and
Regulations of RA No. 8292
(Higher Education Moderni-
zation Act of 1997), the
chairpersons and members
of the Board of Regents/
Trustees of SUCs shall be
entitled to per diems at
rates not exceeding the
following:
Chairpersons Amount equivalent to

25% of the monthly
RATA of the President of
the respective SUC for
every meeting actually
attended but not to
exceed 4 paid regular
meetings and 2 paid
special meetings in a
year
Members Amount equivalent to

25% of the monthly
RATA of the Vice-
President of the
respective SUC for every
meeting actually
attended but not to
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exceed 4 paid regular

meetings and 2 paid
special meetings in a
year
3.9.10.3.2.2 Attendance in excess of the

prescribed number of
regular and special meetings
shall no longer be
compensated.
3.9.10.3.2.3 No other allowances on top

of the per diem authorized
under item 3.9.10.3.2.1
hereof shall be paid
regardless of the funding
source.
Illustrative examples on the

computation of the per diem
are shown in Annex “D.”
3.9.10.3.3 Duly authorized representatives of ex-officio

and other members of collegial bodies and
Boards of Regents/Trustees of SUCs who
actually attended board meetings shall be
entitled to per diems not exceeding the rates
provided under item 3.9.10.3.1 and
3.9.10.3.2 hereof, respectively. In no case,
however, shall a chairperson/vice-
chairperson/member and his/her
representative be each entitled to per diem
for the same meeting notwithstanding that
they both attended said meeting.
3.9.10.3.4 Higher per diem rates and/or other benefits,

whether commutable or reimbursable, in
cash or in kind, shall not be allowed unless
specifically authorized by law or by the
President.
3.9.10.3.5 Board Secretaries who are already paid

salaries for, among other functions,
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attendance in the meetings of the board shall
not be entitled to per diem.
3.9.10.4.1 For NGAs, the per diem shall be charged against

the appropriations for the purpose in the annual
GAA. Deficiencies in appropriations shall be
charged against agency savings.
3.9.10.4.2 For SUCs, the per diem shall be charged against

the appropriations for the purpose in the annual
GAA or against their incomes.
3.9.10.4.3 For GOCCs and GFIs, the per diem shall be

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ANNEX D
ILLUSTRATIVE EXAMPLE A
Name of official: Mr. Amir Yanes

Position: Chair of the Governing Boards of three (3) SUCs
Name and level of SUCs: SUC-A – Level II; SUC-B – Level III; SUC-C – Level IV
Number of meetings in 2004: SUC-A = 6 regular and 2 special meetings; SUC-B = 4 regular and
2 special meetings; SUC-C = 8 regular and 2 special meetings
CEILING PER BUDGET CIRCULAR NO. _____

Level RATA of SUC Maximum Amount Maximum Number Maximum
President Per Meeting of Paid Meetings Per Diems
Per year (Regular Per Year
and Special)
(25% x a)
(a) (b) (c) (b x c) =(d)
SUC - A II P10,000 P2,500.00 6 15,000

SUC - B III 11,000 2,750.00 6 16,500
SUC - C IV 12,000 3,000.00 6 18,000
Note: Mr. Yanes shall be paid per diems for only four (4) regular meetings and two (2) special meetings
in a year.
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ILLUSTRATIVE EXAMPLE B
Name of official: Mr. Arturo Ama
Position: Member of the Governing Boards of three (3) SUCs
Name and level of SUCs: SUC-C – Level II; SUC-D – Level III; SUC-E – Level IV
Number of meetings in 2004: SUC-C = 6 regular and 2 special meetings; SUC-D = 4 regular and
2 special meetings; SUC-E = 8 regular and 2 special meetings
CEILING PER BUDGET CIRCULAR NO. _____

Level RATA of SUC Maximum Amount Maximum Number Maximum
Vice President Per Meeting of Paid Meetings Per Diems
Per Year (Regular Per Year
and Special)
(25% x a)
(a) (b) (c) (b x c) = d
SUC – D II P9,000 P2,250.00 6 13,500

SUC – E III 9,000 2,250.00 6 13,500
SUC – F IV 10,000 2,500.00 6 15,000
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Note: Mr. Ama shall be paid per diems for only four (4) regular meetings and two (2) special meetings
in a year.
3.9.11 Honoraria
Honoraria are token payments in recognition of incidental

services rendered.
Since FY 2003, the grant of honoraria is limited only to the

government personnel enumerated under Section 42, General
Provisions, RA No. 9206, the FY 2003 GAA.
3.9.11.1 Coverage
The grant of honoraria shall apply to the following

personnel in all NGAs, GOCCs, GFIs, and LGUs:
3.9.11.1.1 Teaching personnel of the Department

of Education, Commission on Higher
Education, Technical Education and
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Skills Development Authority, SUCs

and other educational institutions
engaged in actual classroom teaching
whose teaching loads are outside of
their regular office hours and/or in
excess of their regular loads;
3.9.11.1.2 Those who act as lecturers, resource

persons, coordinators and facilitators
in seminars, training programs and
other similar activities in training
institutions, including those conducted
by entitles for their officials and
employees; and
3.9.11.1.3 Chairpersons and members of

commissions, boards, councils and
other similar entities which are
hereinafter referred to as collegial
bodies including the personnel
thereof, who are neither paid salaries
nor per diems but compensated in the
form of honoraria as provided by law,
rules and regulations.
3.9.11.1.4 Those who are involved in science and

technological activities who receive
services beyond their regular work
load.
3.9.11.2.1 Chairpersons and Members of the

various Professional Regulatory Boards
of the Professional Regulation
Commission (PRC) who are
compensated in the form of honoraria
pursuant to DBM and PRC Joint Circular
No. 2002-1, dated March 11, 2002;
3.9.11.2.2 Agency personnel who are designated

as members of agency committees,
boards, councils, or assigned to agency
or inter-agency special projects; and
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3.9.11.2.3 Personnel granted honoraria by LGUs

pursuant to the pertinent provisions of
RA No. 7160 (Local Government Code of
1991).
3.9.11.3 Definition of Terms
3.9.11.3.1 Coordinator – any government personnel

who directs, supervises and/or
participates in the organization,
coordination and conduct of seminars,
training programs and other similar
activities
3.9.11.3.2 Facilitator – any government personnel

who extends technical assistance to
facilitate the conduct of seminars,
training programs and similar activities
by providing instructional materials such
as charts, handouts, projectors, multi-
media equipment and other devices, and
to empower the participants to solve
issues by bringing out quality of thinking
and structuring the dynamic flow of
discussions.
3.9.11.3.3 Lecturer/Resource Person – any person

who serves as lecturer/speaker in
seminars, training programs and other
similar activities
3.9.11.3.4 Training Institutions – refer to those

agencies mandated by existing laws to
conduct training programs
3.9.11.4.1 Teaching personnel mentioned under

item 3.9.11.1.1 hereof may be paid
honoraria in accordance with the
formula in Chapters 6 and 7 of this
Manual.
3.9.11.4.2 For lecturers and resource persons:
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Regardless of the regular positions of
the lecturer/resource person, he/she
may be paid the hourly rate of a
Professor VI position at SG-29 for
actual lecture hours, including
reasonable time for preparation of
materials not exceeding 10 hours in
all.
3.9.11.4.3 Government personnel who serve as

coordinators, facilitators, lecturers or
resource persons in seminars, training
programs and similar activities
conducted by their own agencies shall
not be entitled to honoraria. Such
services are in connection with their
agencies’ objectives or obligations to
disseminate instructions, to clarify
issues and concerns and to interact
with clients and/or implementors of
agency mandates. These activities are
considered part of the regular
functions of agencies, hence, also
form part of the related work of those
assigned to perform said activities.
3.9.11.4.4 Agency personnel who are members

of agency committees, boards,
councils, or special projects are not
entitled to honoraria as their duties
and responsibilities therein may be
considered pertinent to or within the
scope of their regular duties and
responsibilities in their agencies for
which they are paid salaries.
3.9.11.4.5 The chairpersons, members and

personnel listed under item 3.9.11.1.3
hereof may be paid honoraria at the
following rates:
Chairpersons: 25% of the monthly representation and transportation

allowances (RATA) of the chief operating officer of the
collegial body for every meeting actually attended but
not to exceed 4 paid meetings a month
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Members: 25% of the monthly RATA of the second ranking official

of the collegial body for every meeting actually attended
but not to exceed 4 paid meetings a month
Personnel: The hourly rate of equivalent positions in the national

government as determined by the DBM but not to
exceed 8 hours a day or 40 hours a week.
They shall not be allowed other

benefits, whether in cash or in kind,
except when specifically provided by
law. In case their present honoraria
are higher than the honoraria
authorized herein, they shall continue
to receive the same until the
termination of their appointments.
3.9.11.4.6 Department Secretaries, Department

Undersecretaries and Department
Assistant Secretaries who are ex-
officio members of collegial bodies
shall not be paid the honoraria
authorized therein pursuant to the
Supreme Court ruling in G.R. No.
83896 dated February 22, 1991.
3.9.11.4.7 GOCCs and GFIs exempted from the

coverage of RA No. 6758 and LGUs
are encouraged to adopt the foregoing
provisions on honoraria as far as
practicable.
3.9.11.4.8 Honoraria shall not be paid to

personnel outside of those covered
herein except when specifically
provided by law.
3.9.11.5.1 For NGAs including SUCs, the amounts

for honoraria shall be charged against
the appropriations for the purpose in
the annual GAA.
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3.9.11.5.2 For GOCCs and GFIs, the amounts shall
be charged against their respective
corporate funds.

against their respective local
government funds.
3.9.12 Honoraria for Government Personnel Involved in

Government Procurement
Honoraria are granted to government personnel involved in

government procurement pursuant to Section 15, RA No. 9184
(Government Procurement Reform Act), and the Implementing
Rules and Regulations (IRR), Part A, for fully domestically-funded
procurement projects, which took effect on October 8, 2003.
Budget Circular (BC) No. 2004-5 dated March 23, 2004, superseded
by BC No. 2004-5A dated October 7, 2005, provide the guidelines
on the grant of honoraria to said government personnel.
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3.9.12.1 Coverage
Government personnel in NGAs including SUCs, GOCCs,

GFIs and LGUs involved in procurement.
3.9.12.2 Guidelines
3.9.12.2.1 The chairs and members of the Bids and

Awards Committee (BAC) and the Technical
Working Group (TWG) may be paid honoraria
only for successfully completed procurement
projects. In accordance with Section 7 of the
Implementing Rules and Regulations Part A
(IRR-A) of RA No. 9184, a procurement
project refers to the entire project identified,
described, detailed, scheduled and budgeted
for in the Project Procurement Management
Plan prepared by the agency.
A procurement project shall be considered

successfully completed once the contract has
been awarded to the winning bidder.
3.9.12.2.2 The payment of honoraria shall be limited to

procurement that involves competitive
bidding. Competitive bidding activities are
present only in:
• Open and competitive bidding;

• Limited source bidding;
• Negotiated procurement under Section 53

(a) of the IRR-A, where there has been
failure of bidding for the second time; and
(b) of the IRR-A following the procedures
under Section 54.2 (b) thereof, whereby
the procuring entity shall draw up a list of
at least (3) suppliers or contractors who
will be invited to submit bids.
Conversely, honoraria will not be paid when

procurement is thru:
• Direct contracting;
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• Repeat order;
• Shopping;
(b) of the IRR-A following the procedures
under Section 54.2 (d) thereof, whereby
the procuring entity directly negotiates
with previous supplier, contractor or
consultant; or when the project is
undertaken by administration or in high
security risk areas, through the Armed
Forces of the Philippines, in case of
infrastructure projects; and
(c) to (g) of the IRR-A.
3.9.12.2.3 The honoraria of each person shall not

exceed the rates indicated below per
completed procurement project:
Maximum
Honorarium Rate Per
Procurement Project
BAC Chair P 3,000
BAC Members 2,500
TWG Chair and Members 2,000
3.9.12.2.4 The average amount of honoraria per month

over one year shall not exceed 25% of the
basic monthly salary. The honoraria,
however, shall be paid only upon the
successful completion of each procurement.
3.9.12.2.5 To be entitled to honoraria, personnel should

be duly assigned as chair or member of the
BAC or the TWG by the head of the
department/agency concerned.
3.9.12.2.6 The members of the BAC Secretariat who are

performing the attendant functions in
addition to their regular duties in other non-
procurement units of the agency may
likewise be paid honoraria at the same rate
as the TWG Chair and Members, subject to
the same regulations.
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The members of the BAC Secretariat whose

positions are in the Procurement Unit of the
agency shall not be entitled to honoraria. The
payment of overtime services may be
allowed, subject to existing policy on the
matter.
3.9.12.2.7 Heads of government entities are prohibited

from paying honoraria to personnel involved
in procurement activities outside of those
covered herein.
3.9.12.2.8 By reason of jurisprudence, a Department

Undersecretary or Department Assistant
Secretary who concurrently serves in the
BAC, in whatever capacity, shall not be
entitled to honoraria.
3.9.12.2.9 In lieu of honoraria, the payment of overtime

services may be allowed for the
administrative staff, such as clerks,
messengers and drivers supporting the BAC,
the TWG and the Secretariat, for
procurement activities rendered in excess of
official working hours. The payment of
overtime services shall be in accordance with
the existing policy on the matter.
3.9.12.2.10 Those who are receiving honoraria for their

participation in procurement activities shall
no longer be entitled to overtime pay for
procurement-related services rendered in
excess of official working hours.
3.9.12.3.1 The amount necessary for the payment of

the honoraria and overtime pay shall be
sourced only from the following:
• Proceeds from sale of bid documents;

• Fees from contractor/supplier registry;
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• Fees charged for copies of minutes of bid
openings, BAC resolutions and other BAC
documents;
• Protest fees;
• Liquidated damages; and
• Proceeds from bid/performance security
forfeiture.
3.9.12.3.2 Pursuant to the DOF-DBM-COA Permanent

Committee Resolution No. 2005-2 of June
2005, all agencies are authorized to treat the
collections from the sources identified in item
3.9.12.3.1 hereof as trust receipts to be used
exclusively for the payment of honoraria and
overtime pay. Agencies may utilize up to
100% of the said collections for the payment
of honoraria and overtime pay subject to the
guidelines in item 3.9.12.2. Any excess in
the amount collected shall be remitted by
NGAs to the Bureau of the Treasury. In the
case of GOCCs and LGUs, the same shall
form part of their corporate or local
government funds, respectively.
3.9.12.3.3 The total amount of honoraria and overtime

pay to be paid for procurement-related
activities shall not exceed the said
collections.
3.9.12.3.4 In case of deficiency in collections from the

sources identified in item 3.9.12.3.1, the
amount of honoraria and overtime pay shall
be adjusted proportionately for all those
entitled thereto.
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3.9.13 Night-Shift Differential Pay
Night-Shift Differential Pay is a compensation premium granted to

government personnel whose regular work hours fall wholly or partly
within 6:00 PM to 6:00 AM of the following day.
Its grant was standardized and rationalized pursuant to Budgt Circular

No. 8, s. 1995.
3.9.13.1 Coverage
All government employees regardless of status of

employment, whether permanent, casual, temporary and
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contractual, whose regular schedule of work fall partly or
wholly between 6:00 PM and 6:00 AM of the following day
3.9.13.2.1 Public Health Workers (PHWs);
3.9.13.2.2 Government personnel whose schedules of office

hours or work shifts fall between 6:00 AM to
6:00 PM; and
3.9.13.2.3 Government personnel whose services are

required, or are on call 24 hours a day such as
the military personnel of the Armed Forces of
the Philippines, uniformed personnel under the
Department of the Interior and Local
Government, and Philippine Coast Guard under
the Department of Transportation and
Communications
3.9.13.3.1 The night-shift differential pay shall not exceed

20% of the actual rate of the employee derived
as follows:
Actual Salary/Month
Actual Hourly Rate (HR) = --------------------------------------
(22 Days/Month) (8 Hours/Day)
Night-Shift Differential Pay = 1.20 x HR x Number of Hours Rendered
3.9.13.3.2 When the schedule of work hours fall partly within

6:00 PM to 6:00 AM, the night-shift differential
pay shall be paid only for the hours within 6:00
PM to 6:00 AM of the following day.
3.9.13.3.3 When an employee working in a regular night-shift

falling within the 6:00 PM to 6:00 AM period
renders services in excess of the regular 8-hour
night-shift, the excess hours shall be compensated
through overtime pay, unless payment thereof is
suspended by order of the President, or through
compensatory time-off.
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3.9.13.3.4 To qualify for the night-shift differential pay, the
official work hours shall be prescribed by the head
of office taking into consideration the nature of
the services of the office concerned and the
necessity for an official shift outside the ordinary
work hours prescribed by the Civil Service
Commission, provided that such official work
hours are observed for a period of at least 10
work days.
3.9.13.3.5 Payment of night-shift differential pay may be

authorized by the Head of Office without the need
of prior approval from the DBM.

purpose. Deficiencies in appropriations shall be
charged against agency savings.

operating budgets.

local government funds.
3.9.14 Hazard Duty Pay
The hazard duty pay (HDP) authorized under Section 54,

General Provisions of Republic Act No. 9336 (FY 2005 General
Appropriations Act) is a compensation premium granted to each
official and employee actually assigned to, and performing
duties in, strife-torn or embattled areas.
3.9.14.1 Coverage
All government personnel in NGAs, including SUCs,

GOCCs, GFIs, and LGUs, whether appointive or
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elective, on full-time or part-time basis, under
permanent or temporary status, personnel with casual
and contractual appointments whose salaries/wages
are charged to the budgetary allocation for personal
services, and who are actually assigned to and
performing their duties and responsibilities in strife-
torn or embattled areas
3.9.14.2.1 Those entitled to HDP or other similar

allowances under existing laws, such as
the military and uniformed personnel,
public health workers, scientists,
engineers, researchers and science and
technology personnel;
3.9.14.2.2 Those hired through contract of service or

job order basis; and
3.9.14.2.3 Those who are not actually assigned to

nor performing their duties and
responsibilities in strife-torn or embattled
areas
3.9.14.3.1 Heads of government agencies may grant

HDP to their personnel at the following
rates without the need for approval by
the DBM, provided that the following
conditions are met:
3.9.14.3.1.1 The personnel were actually

assigned to, and per-
forming their duties and
responsibilities in, strife-
torn or embattled areas for
the following periods in a
month:
Period of Assignment Monthly

in Work Days Rates
1 to 7 days P 400
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8 to 14 days 500
15 or more days 600
3.9.14.3.1.2 The areas of assignment

have been determined and
certified by the Secretary of
National Defense or by his
authorized representative
as strife-torn or embattled
areas.
3.9.14.3.2 The period of entitlement to HDP shall be

coterminous with the duration of the
actual assignments of the personnel in
strife-torn or embattled areas, but in no
case they shall exceed 3 months. Such
entitlement to HDP may be renewed as
deemed necessary by the head of agency,
subject to items 3.9.14.3.1.1 and
3.9.14.3.1.2 above.
3.9.14.3.3 Those who work part-time shall receive

half of the amounts received by full-time
personnel in the same situation.
3.9.14.3.4 The HDP of personnel detailed in other

government agencies which work areas
are identified as strife-torn or embattled
shall be paid by their respective mother
agencies.
3.9.14.3.5 Government personnel who are assigned

to strife-torn or embattled areas shall no
longer be entitled to receive HDP when
they are under the following instances for
one (1) full calendar month or more:
• on vacation, sick or study leave with

or without pay;
• on maternity leave;
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• on summer vacation, such as

teachers;
• on terminal leave;
• on detail with another agency which

work areas are not strife-torn or
embattled;
• on attendance in training courses/

scholarship grants/seminars/similar
activities; and
• on official travel outside of their

official stations.
3.9.14.3.6 The government agencies concerned shall

submit to the respective DBM Budget and
Management Bureaus or Regional Offices
not later than fifteen (15) days after the
end of each fiscal year a report on the
personnel granted HDP by following the
format attached as Annex A.
3.9.14.4.1 For NGAs, including SUCs, the amounts

shall be charged against available savings
from released allotments for current
operating expenditures without need for
prior authority from the DBM, provided all
authorized mandatory expenses shall
have been paid first;
3.9.14.4.2 For GOCCs and GFIs, the amounts shall

be charged against savings from their
respective DBM-approved corporate
operating budgets; and

funds, subject to the personal services
limitation under Section 325 (a), RA No.
7160 (Local Government Code of 1991),
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and subject further to the enactment of
the appropriate Sanggunian ordinances.
3.9.14 Subsistence Allowance
Subsistence Allowance is allowance for meal or sustenance of

government personnel who, by the nature of their duties and
responsibilities, have to make their services available in their places
of work even during mealtimes. The grant thereof is pursuant to
Section 69, Chapter 7, Book VI of Executive Order No. 292
(Administrative Code of 1987).
3.9.15.1 Coverage
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3.9.15.1.1 Public Health Workers (PHWs) as defined

under RA No. 7305 (Magna Carta of Public
Health Workers);
3.9.15.1.2 Marine officers, engineers, and crew of

government vessels, launches, and
motorboats, who take their meals on the
mess when aboard said vessels, launches or
motorboats;
3.9.15.1.3 Officials and employees who are required to

render services within penal institutions,
military installations and other similar
institutions, and who are required to live
within the premises of said institutions for
continuous periods that include meal times
so as to make their services available at any
and all times;
3.9.15.1.4 Lightkeepers and other employees in light

stations who are authorized by the head of
agency to receive subsistence allowance; and
3.9.15.1.5 Laborers temporarily fielded to isolated or

unsettled areas
3.9.15.2.1 For PHWs
3.9.15.2.1.1 The rate for subsistence allowance

as provided under the GAA, shall be
P30 per day per employee, or as
presently enjoyed by them based on
their respective authorizations.
3.9.15.2.1.2 PHWs are eligible to receive full

subsistence allowance as long as
they render actual duties. Those on
vacation/sick leave, with or without
pay, on special privilege leave,
maternity/paternity leave, on
terminal leave, or on official travel
are not entitled to the subsistence
allowance.
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3.9.15.2.1.3 Higher rates for subsistence

allowance for PHWs may be
granted, but not exceeding P50 per
day pursuant to the revised
Implementing Rules and Regulations
(IRR) of RA No. 7305, provided that
the additional requirement shall be
taken from savings and no additional
amount shall be released by the
DBM.
3.9.15.2.2 For Other Personnel
3.9.15.2.2.1 The subsistence allowance for marine

officers and crew of marine vessels
operated by the government shall not
be commutable since it is granted for
conducting a mess on board said
vessels.
3.9.15.2.2.2 When there is no mess hall or

whenever available, the same is
inadequate, the subsistence allowance
may be commuted.
3.9.15.2.2.3 The subsistence allowance for

lightkeepers and other employees in
light stations and of laborers
temporarily fielded to isolated or
unsettled districts may be commuted,
or the equivalent may be used to
furnish them with the usual rations.
3.9.15.2.2.4 Personnel who are on maternity/

paternity leave, on sick or vacation
leave with or without pay, or on full-
time or part-time detail with another
agency, or reassigned to another
organizational unit or special project of
the same agency, or attending training
course/scholarship grant/ seminar, or
any other similar activity, or on official
travel are not entitled to subsistence
allowance for the duration thereof.
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3.9.15.3.1 For NGAs including SUCs, the amounts

shall be charged against the appropriations
for the purpose in the annual GAA.

operating budgets.

funds.
3.9.16 Laundry Allowance
The Laundry Allowance is intended to defray the laundry cost

incurred for uniforms of specific government personnel pursuant to
Section 67, Chapter 7, Book VI of Executive Order No. 292
(Administrative Code of 1987).
3.9.16.1.1 Public Health Workers (PHWs)
3.9.16.1.1.1 The laundry allowance for
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PHWs shall be P125 per month
as provided in the annual GAA.
3.9.16.1.1.2 PHWs may be granted higher

rates of laundry allowance not
exceeding P150 per month,
regardless of the actual work
rendered, pursuant to the
Revised Implementing Rules
and Regulations of RA No.
7305, provided that the
additional requirement shall be
taken from agency savings and
no additional amount shall be
released by the DBM.
3.9.16.1.1.3 The laundry allowance for officials or

employees serving in penal institutions or
other similar institutions, who are required
to wear uniforms during the performance of
their duties and responsibilities shall be at
rates as provided under their respective
authorizations.
3.9.16.2.1 For NGAs including SUCs, the amounts shall

be charged against the appropriations for the
purpose in the annual GAA.

operating budgets.

funds.
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3.9.17 Free Quarters for Certain Government Officials
Free quarters for government officials refer to the free use of

government-owned or leased place of lodgings which may include
telephone, water and electricity for basic needs.
National Budget Circular No. 456, dated November 11, 1996,

provides the guidelines on free quarters for certain government
officials to implement the pertinent general provision of the annual
GAA.
3.9.17.1 Coverage
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Government officials and their equivalents under the

following categories, who by virtue of agency policies of
reshuffling or rotation are assigned or transferred to
places other than those of their domiciles and do not
own houses or rooms therein:
Position Levels Category
Department Regional Directors A

Department Assistant Regional Directors A
Bureau Regional Directors B
Assistant Bureau Regional Directors B
3.9.17.2.1 Public Health Workers who are entitled free

quarters under RA No. 7305;
3.9.17.2.2 Military personnel under the Armed Forces

of the Philippines and uniformed personnel
of the Department of the Interior and Local
Government, Philippine Coast Guard under
the Department of Transportation and
Communications, and National Mapping and
Resource Information Authority under the
Department of Environment and Natural
Resources (DENR) who are entitled to
quarters allowances pursuant to existing
laws, rules and regulations;
3.9.17.2.3 Those who are expressly authorized free

quarters under existing laws, rules and
regulations; and
3.9.17.2.4 Those who are stationed abroad.
3.9.17.3.1 Heads of agencies may provide free quarters

within their office premises to their officials
without the need for approval by the DBM.
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3.9.17.3.2 Where there is not enough space to be used

as quarters, houses or rooms may be rented
which shall serve as quarters at reasonable
rates based on the prevailing cost of rental in
the area or locality as determined under
Chapter 4 of the Manual of Building Services
and Real Property Management issued under
Joint DBM, DENR and Department of Public
Works and Highways Circular No. 1, dated
September 30, 1989 but not to exceed the
rates prescribed below:
Category
Area/Locality A B
Special Cities (Manila/ P3,000 P2,500

Quezon City
Highly Urbanized Cities/ 2,500 2,000
Capital Centers
Others 2,000 2,000
3.9.17.3.2.1 The rental contract shall be

entered into by and between
the agency concerned and the
owner of the dwelling unit; and
the rental payment shall be
paid to the latter and not
commuted in favor of the
official concerned.
3.9.17.3.2.2 The above rates shall be

inclusive of the amounts for
telephone, water and electric
bills.
3.9.17.3.2.3 Those who desire more expensive/

extensive quarters other than those
provided by their agencies or by the
authorized maximum rental rate, may
secure such preferred quarters, provided
that the difference between the rental cost
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and the amount authorized therefor shall
be paid by the former.
3.9.17.3.2.4 The guidelines for free quarters for certain

LGU elected officials are provided in
Chapter 9 of this Manual.
3.9.17.4.1 For NGAs, the amounts shall be charged

against the released allotments for
maintenance and other operating expenses.

operating budgets.
3.9.18 Free Quarters Privileges in Hospitals
Free quarters privileges refer to the free use of government

hospital-owned place of lodging authorized under the pertinent
general provision in the annual GAA.
3.9.18.1 Guidelines
3.9.18.1.1 Pursuant to item 7.7.1, Rule XV, Revised

Implementing Rules and Regulations, RA No.
7305, all PHWs who are on tour of duty and
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those who, because of unavailable
circumstances are forced to stay in hospitals,
sanitaria or health infirmary premises, shall
be entitled to free living quarters within
hospitals, sanitaria or health infirmary
premises.
3.9.18.1.2 Pursuant to DBM Circular Letter No. 2000-17,

dated September 19, 2000, free quarters
may be provided for the Chief of Hospital,
Chief of Clinics, Hospital Administrative
Officer and Chief Nurse in view of the nature
of their functions which involve round-the-
clock supervision of the different activities of
the hospital.
3.9.18.1.3 In case the above-mentioned hospital

officials own houses within the locality or
in close proximity to the hospital, said free
quarters privilege shall be forfeited and
concerned officials shall instead be allowed
reimbursement of light and water bills,
pertaining to their personal basic
consumption and not of the entire
household, at rates not exceeding the
minimum charges for water and electricity
prevailing in the locality for residential users,
as certified by the local electric and water
utilities offices/providers in the particular
areas. Minimum charge refers to the nominal
rate charged by water and electric
companies/cooperatives to residential users
which is the fixed rate for the first block of
cubic meter consumption for water or
kilowatt for electricity.
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3.9.19 Special Counsel Allowance
The Special Counsel Allowance authorized under the pertinent

general provision in the annual GAA is granted to lawyer personnel,
including those designated to assume the duties of a legal officer
and those deputized by the Office of the Solicitor General in the
legal staff of departments, bureaus or offices of the national
government to appear in court as special counsel in collaboration
with the Solicitor General or prosecutors concerned.
3.9.19.1 Rate of Special Counsel Allowance
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The Special Counsel Allowance is granted at P500 for
each court appearance, but not exceeding P3,000 per
month.
Savings in agency appropriations/budgets
3.9.20 Anniversary Bonus
The Anniversary Bonus (AB) is a financial incentive authorized

under Administrative Order No. 263 dated March 28, 1996, to be
granted to government employees on the occasion of their
agencies’ milestone years.
3.9.20.1 Coverage
All government personnel whether employed on full-time

or part-time bases, under permanent, temporary or
casual status, elective or appointive, including
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contractual personnel whose employments are in the
nature of regular employees who have rendered at least
1 year of service in the same agencies as of the date of
milestone years and continue to be employed in the
same government entities as of the occasion of their
milestone anniversaries
3.9.20.2.1 Those absent without leave as of the date of

the milestone year for which the AB is being
paid;
3.9.20.2.2 Those who are no longer in the service in the

same government entity as of the date of the
milestone year; and
3.9.20.2.3 Those Consultants, experts, laborers of

contracted projects (“pakyaw”), student
laborers, apprentices, mail contractors, those
paid on piecework bases, and others similarly
situated
3.9.20.3.1 The AB shall be paid at P3,000 per

personnel, provided that he/she has
rendered at least 1 year of service in the
same agency as of the date of the
milestone year.
3.9.20.3.2 In case of insufficiency of funds, a lesser

but uniform amount of AB may be paid to
the personnel entitled thereto.
3.9.20.3.3 A milestone year refers to the 15th

anniversary and to every 5th year
thereafter.
3.9.20.3.4 “Government entities” shall refer to

departments, bureaus, offices, commissions
and similar bodies of the national
government, including GOCCs and GFIs;
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provided that staff bureaus or entities

which form part of the organizational
structure of departments or offices
shall be deemed absorbed by the latter
and shall not be treated as a separate
agency.
3.9.20.3.5 A frontline bureau or entity created as such

under a distinct law, thus, deemed as an
institution in its own right shall be
considered a distinct and separate agency
for purposes of the grant of AB,
notwithstanding the fact that it had since
been organizationally integrated with a
department or office.
3.9.20.3.6 The counting of milestone years shall start

from the year the government entity was
created regardless of whether it was
subsequently renamed or reorganized,
provided that its original primary functions
have not substantially changed. Otherwise,
the counting of milestone years shall start
from the date the functions were
substantially changed.
3.9.20.3.7 The counting of the milestone years of

merged agencies shall start from the date
they were merged.
3.9.20.3.8 Officials and employees in government

entities attached to or are placed directly
under a department or department level
entity and which creation are not through
charters, may be considered as organic
personnel of the mother department/
department level entity, for purposes of the
grant of the AB.
3.9.20.3.9 The AB shall be granted only during

milestone years and shall be received by
the employee only once every 5 years,
regardless of transfer from one government
entity to another.
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3.9.20.3.10 Government personnel who were found
guilty of any offense in connection with
their work during the 5-year interval
between milestone years shall not be
entitled to the immediately succeeding AB.
3.9.20.3.11 The foregoing rules and regulations shall

also apply to LGUs as far as applicable, in
addition to the rules and regulations in
3.9.20.4.1 For NGAs including SUCs, the amounts shall

be solely charged against savings from
released allotments for current operating
expenses, provided that all authorized
mandatory expenses shall have been paid
first.

operating budgets.

funds.
3.9.21 Collective Negotiation Agreement (CNA) Incentive
The CNA Incentive is a cash incentive in whatever form provided

for in CNAs and supplements thereto, which were granted pursuant
to PSLMC Resolution No. 04, s. 2002 or PSLMC Resolution No. 02,
s. 2003, or the rationalized cash incentive granted on or after the
effectivity of Budget Circular No. 2006-1 dated February 1, 2006,
to the government employees concerned who have contributed
either in productivity or cost savings in an agency, in fulfillment of
the commitments in the CNAs or supplements thereto. It excludes
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such other items that are negotiable, in cash or in kind, listed
under Section 2, Rule XII, PSLMC Resolution No. 02, s. 2004, and
non-negotiable concerns specified in PSLMC Resolution No. 04, s.
2002 and PSLMC Resolution No. 02, s. 2003.
3.9.21.1 Coverage
3.9.21.1.1 Rank-and-file employees who are members

of employees’ organizations accredited by
the Civil Service Commission (CSC) in
NGAs, SUCs, LGUs, and GOCCs,/GFIs,
whether or not covered by RA No. 6758
(Compensation and Position Classification
Act of 1989). They do not fall under the
following categories:
3.9.21.1.1.1 Those who perform

managerial functions;
3.9.21.1.1.2 “Coterminous employees” or

those whose entrance and
continuity in government
service are “based on any of
the following: 1) trust and
confidence of the appointing
authority or of the head of
the organizational unit
where the former is
assigned; or, 2) duration of
the project, or the period for
which an agency or office
was created;”1 or
3.9.21.1.1.3 “Highly confidential

employees” or those who
occupy positions which
require “high degree of trust
and confidence and close
intimacy with the appointing
authority or immediate
supervisor which ensures
free and open
communication without
harassment or freedom from
1
Section 1, Rule I, Definition of Terms, PSLMC Resolution No. 02, s. 2004.
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misgivings of betrayal of
personal trust or confidential
matters of state.”2
3.9.21.2 Policy Guidelines
3.9.21.2.1 The CNA Incentive in the form of cash may

be granted to employees covered by the
grant of the CNA Incentives, if provided for in
the CNAs or in the supplements thereto,
executed between the representatives of
management and the employees’
organization accredited by the CSC as the
sole and exclusive negotiating agent for the
purpose of collective negotiations with the
management of an organizational unit listed
in Annex “A” of PSLMC Resolution No. 01, s.
2002, and as updated.
3.9.21.2.2 The grant of the CNA Incentive may be

extended to employees under items
3.9.21.1.1.2 and 3.9.21.1.1.3 hereof who
contributed to agency productivity and
implementation of cost-cutting measures
identified in the CNAs or supplements
thereto, in line with the equal protection
clause of the 1987 Constitution, provided
they are assessed and have paid the
corresponding agency fees pursuant to
PSLMC Resolution No. 1, s. 1993.
3.9.21.2.3 Such CNA Incentive shall refer to those

provided in CNAs and supplements thereto
which were signed on or after the effectivity
of PSLMC Resolution No. 04, s. 2002, and
PSLMC Resolution No. 02, s. 2003, or signed
and ratified by a majority of the general
membership on or after the effectivity of
PSLMC Resolution No. 02, s. 2004,
“Approving and Adopting the Amended Rules
and Regulations Governing the Exercise of
the Right of Government Employees to
Organize.”
2
Section 1, Rule I, Definition of Terms, PSLMC Resolution No. 02, s. 2004.
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3.9.21.2.4 The form of the CNA Incentive shall be
simplified and rationalized as follows:
3.9.21.2.4.1 All existing cash incentives in

the CNAs in the form of
allowances and benefits,
such as staple food
allowance, rice subsidy,
grocery allowance, inflation
allowance, relocation
allowance, SONA bonus,
bonuses other than the
year-end benefit authorized
under RA No. 6686, as
amended by RA No. 8441,
etc., shall be consolidated
into a single cash incentive,
and shall be referred to and
collectively paid as the CNA
Incentive.
3.9.21.2.4.2 Existing cash incentives in

the CNAs which are already
provided under existing
laws, admi-nistrative orders,
or with Presidential
approval, or under the CSC-
approved Program on
Awards and Incentives for
Service Excellence (PRAISE)
established under CSC
Memorandum (MC) No. 01,
s. 2001, shall not be part of
the CNA Incentive to
preclude double
compensation which is
prohibited under the
Constitution, and as
payments thereof are
subject to separate authority
and pertinent conditions.
3.9.21.2.4.3 Starting from the effectivity

of BC No. 2006-1, all CNAs
and supplements thereto
shall only provide for the
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CNA Incentive as the cash
incentive.
3.9.21.2.5 The grant of the CNA Incentive in whatever

form of cash benefit pursuant to CNAs and
supplements thereto, which were signed and
ratified on or after the effectivity of PSLMC
Resolution No. 04, s. 2002, and PSLMC
Resolution No. 02, s. 2003, and before the
effectivity of the Circular, which were granted in
strict compliance with said PSLMC Resolutions,
are thus confirmed as valid CNA Incentives.
3.9.21.2.6 The amount/rate of the individual CNA

Incentive:
3.9.21.2.6.1 Shall not be pre-determined in

the CNAs or in the supplements
thereto since it is dependent on
savings generated from cost-
cutting measures and systems
improvement, and also from
improvement of productivity and
income in GOCCs and GFIs;
3.9.21.2.6.2 Shall not be given upon signing

and ratification of the CNAs or
supplements thereto, as this
gives the CNA Incentive the
character of the CNA Signing
Bonus which the Supreme Court
has ruled against for not being a
truly reasonable compensation
(Social Security System vs.
Commission on Audit, 384 SCRA
548, July 11, 2002);
3.9.21.2.6.3 May vary every year during the

term of the CNA, at rates
depending on the savings
generated after the signing and
ratification of the CNA; and
3.9.21.2.6.4 May be higher for employees in

offices or organizational units
which contributed more in cost
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savings, productivity,
profitability, or a combination
thereof, as the case may be.
3.9.21.2.7 The CNA Incentive for the year shall be paid

as a one-time benefit after the end of the
year, provided that the planned
programs/activities/projects have been
implemented and completed in accordance
with the performance targets for the year.
3.9.21.3 Procedural Guidelines
3.9.21.3.1 An Employees’ Organization -

Management Consultative Committee or a
similar body composed of designated
representatives from the management
and the accredited employees’
organization shall review the agency’s
financial records and report of operations
at the end of the fiscal year, and shall
arrive at a consensus on the following
items:
3.9.21.3.1.1 The guidelines/criteria to

be followed in the grant of
the CNA Incentive;
3.9.21.3.1.2 The total amount of

unencumbered savings at
the end of the year which
were realized out of cost-
cutting measures identified
in the CNAs and
supplements thereto, and
which were the results of
the joint efforts of labor
and management;
3.9.21.3.1.3 The apportioned amounts

of such savings shall cover
the following items:
“Fifty percent (50%) for CNA Incentive
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Thirty percent (30%) for improvement of
working conditions and other programs
and/or to be added as part of the CNA
Incentive, as may be agreed upon in the
CNA
Twenty percent (20%) to be reverted to

the General Fund for the national
government agencies or to the General
Fund of the constitutional commissions,
state universities and colleges, and local
government units concerned, as the case
may be;”2 or for GOCCs and GFIs, the
twenty percent (20%) is to be retained
and “to be used for the operations of the
agency to include among others,
purchase of equipment critical to the
operations and productivity improvement
programs”3
3.9.21.3.1.4 The individual amount of the

CNA Incentive to be granted
to the employees concerned
based on the established
guidelines/ criteria.
Such agreements shall be incorporated in

a written resolution to be signed by the
representatives of both parties and noted
by the agency head. This resolution shall
serve as basis for accounting and auditing
purposes.
3.9.21.3.2 The Employees’ Organization -

Management Consultative
Committee or similar body in GOCCs
and GFIs shall determine if the
employees concerned are entitled to
the CNA Incentive based on
compliance with the following
2
Section 5, PSLMC Resolution No. 04, s. 2002.
3
Section 6 c), PSLMC Resolution No. 02, s. 2003.
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conditions, pursuant to Section 2,
PSLMC Resolution No. 02, s. 2003:
“a) Actual operating income at least

meets the targeted operating
income in the Corporate
Operating Budget (COB)
approved by the Department of
Budget and Management
(DBM)/Office of the President
for the year. For GOCCs/GFIs,
which by the nature of their
functions consistently incur
operating losses, the current
year’s operating loss should
have been minimized or reduced
compared to or at most equal
that of prior year’s level;
b) Actual operating expenses are

less than the DBM-approved
level of operating expenses in
the COB as to generate
sufficient source of funds for the
payment of CNA Incentive; and
c) For income generating

GOCCs/GFIs, dividends
amounting to at least 50% of
their annual earnings have been
remitted to the National
Treasury in accordance with the
provisions of Republic Act No.
7656 dated November 9, 1993.”
The following are the definitions of

the terms aforestated, pursuant to
Section 4, PSLMC Resolution No. 02,
s. 2003:
“a) Corporate Operating Budget –

refers to the budget of a
government- owned and/or –
controlled corporation/
government financial
institution consisting of
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estimates of revenues,
expenditures and borrowings.
This is prepared prior to the
beginning of the fiscal year
and recommended by the
governing board of the
corporation for consideration
and final approval of the
President through the DBM.
b) Actual operating income –

refers to gross income/
revenues generated from the
exercise of the corporation’s
regular functions as mandated
by law. This excludes revenues
not recurring in nature, such as
interest income, proceeds from
the sale of scrap and/or
obsolete equipment, materials
and/or real estate assets, which
sale is not the main function of
the corporation.
c) Actual operating expenses –

refer to all expenses incurred
by the corporation in the
conduct of its regular functions.
This excludes non-cash items
like allowance for bad debts,
depreciation/depletion expense,
losses from foreign exchange
and similar expenses.
d) Operating loss – refers to the

excess of actual operating
expenses over actual operating
income/ revenue.”
The computation of savings for the

CNA Incentive in GOCCs and GFIs is
illustrated in Annex “A.”
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3.9.21.4.1 The CNA Incentive shall be sourced solely

from savings from released Maintenance and
Other Operating Expenses (MOOE)
allotments for the year under review, still
valid for obligation during the year of
payment of the CNA, subject to the following
conditions:
3.9.21.4.1.1 Such savings were generated

out of the cost-cutting
measures identified in the CNAs
and supplements thereto;
3.9.21.4.1.2 Such savings shall be reckoned

from the date of signing of the
CNA and supplements thereto;
3.9.21.4.1.3 Such savings shall be net of the

priorities in the use thereof
such as augmentation of
amounts set aside for
compensation, bonus,
retirement gratuity, terminal
leave benefits, old-age pension
of veterans and other personnel
benefits authorized by law and
in special and general
provisions of the annual
General Appropriations Act, as
well as other MOOE items found
to be deficient. Augmentation
shall be limited to the actual
amount of deficiencies incurred;
and
3.9.21.4.1.4 The basic rule that

augmentation can be done only
if there is deficiency in specific
expenditure items, should be
strictly observed.
3.9.21.4.2 National government agencies may use any

free portion of their respective cash
allocation for payment of the CNA Incentive
or, if necessary, may request the release of
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cash allocation from the Department of

Budget and Management (DBM).
3.9.21.4.3 GOCCs/GFIs and LGUs may pay the CNA

Incentive from savings in their respective
approved corporate operating budgets or
local government budgets.
3.9.21.4.4 NGAs shall submit to DBM a report on the

utilization of savings for the payment of the
CNA Incentive.
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Annex “A”
Illustration
GOCC A, which meets the conditions in item 6.2 of this Circular, may grant the CNA Incentive as illustrated
below and in Annex “A” of PSLMC Resolution No. 02, s. 2003:
Compliance with item 6.2.a) and 6.2.b)
Particulars Per Approved COB As Audited

(In Thousand Pesos) (Projection) (Actual) Variance
Operating income 150,000 150,000 0

Less: Operating Expenses (120,000) a/ (100,000) a/ 20,000 b/
Net Operating Income 30,000 50,000
20,000
Compliance with item 6.2.c)

(In Thousand Pesos)
I. Revenues:
Operating income 150,000
Non-operating income
10,000
Total income 160,000
II. Expenses:
Operating Expenses
Personal Services 30,000 40,000 *
MOOE 40,000 46,000 **
Equipment Outlay 30,000 30,000
Sub-total, Operating Expenses 100,000 a/ 116,000
Non-Operating Expenses:
Non-Cash Expenses
5,000
Others 5,000
Sub-total, Non-Operating Expenses 10,000
Total Expenses 126,000
III. Net Profit Before Income Tax 34,000
IV. Income Tax
8,000
V. Net Profit After Income Tax 26,000
Dividend Payable to the National Government (50%) 13,000
Notes:
* Including payment of the CNA Incentive in the amount of P10 Million, net of P4 million to be retained by the GOCC/GFI
** Including amount used for improvement of working conditions which as an alternative may also be used for CNA incentive
a/ Excluding payment of CNA Incentive
b/ Amount to be used for CNA Incentive Distribution: (In thousand pesos) 20,000
Fifty percent (50%) CNA Incentive 10,000
Thirty percent (30%) for improvement of working 6,000

conditions and/or to be added as part of the CNA Incentive
Twenty percent (20%) to be retained by the GOCC/GFI 4,000
Total 20,000
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3.9.22 Travel Expenses
Travel Expenses constitute the amounts authorized under Executive

Order (EO) No. 248, dated May 29, 1995 and EO No. 248-A, dated
August 14, 1995, as amended by EO No. 298, dated March 23,
2004, as recommended by the Travel Rates Committee created
under Section 72, Book VI of Executive Order No. 292, the
Administrative Code of 1987, to cover hotel/lodging rate, meals
and incidental travel expenses excluding transportation expenses
going to and from the destination.
3.9.22.1 Coverage
Government personnel, both from the national and local

governments
3.9.22.2 Rules and Regulations for Local Travel
Hereunder are the rules and regulations relative to local

travels approved by the authorities concerned:
3.9.22.2.1 The travel expenses of government

personnel regardless of rank and
destination shall be P800 per day which
shall be apportioned as follows:
50% for hotel/lodging (P400)

30% for meals (P240 or P80 per meal)
20% for incidental expenses (P160)
3.9.22.2.2 Entitlement to travel expenses shall start

only upon arrival at the place of destination
and shall cease upon departure therefrom
at the following percentages:
Particulars Percentage To cover

Arrival not later 100% Hotel/lodging (50%), meals
than 12 noon (30%) and incidental expenses
(20%)
Arrival after 12 80% Hotel/lodging (50%), dinner
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noon (10%) and incidental expenses
(20%)
Departure before 30% Breakfast (10%) and incidental

12 noon expenses (20%)
Departure after 12 40% Breakfast (10%), lunch (10%)

noon and later and incidental expenses (20%)
3.9.22.2.3 In case the local travel occurred only in one

(1) day, e.g., an employee arriving at the
place of destination at 10:00 AM and leaves
at 4:00 PM, he/she shall be entitled only to
40% of the per day rate of P800 or P320,
broken down as follows: 10% for
breakfast, 10% for lunch, and 20% for
incidental expenses.
3.9.22.2.4 Claims for reimbursement of actual travel

expenses in excess of the prescribed rate of
P800 may be allowed upon certification by
the head of the agency concerned as
absolutely necessary in the performance of
an assignment and upon presentation of
bills and receipts, provided that certification
or affidavit of loss shall not be considered
as appropriate replacement for the required
bills and receipts.
3.9.22.2.5 Claims for payment of expenses
Claims for payment of expenses due to

travel/assignment to places within the 50
kilometer radius from the last city or
municipality covered by the Metropolitan
Manila Area in the case of those whose
permanent official stations are in the
Metropolitan Manila Area, or from the city
or municipality wherein their permanent
official stations are located in the case of
those outside the Metropolitan Manila Area,
shall be allowed only upon presentation of
proofs, duly supported by bills or invoices
with official receipts of expenses incurred,
that they stayed in their places of
assignment for the whole duration of their
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official travels. If they commute daily from
the places of assignments to the places of
residences or permanent official stations,
they shall be allowed only the
reimbursement of actual fares at the
prevailing rates of the authorized mode of
transportation from the permanent official
stations to the destinations or places of
work and back, and reasonable costs for
meals. The total actual fare and cost of
meals and incidental expenses shall in no
case exceed P400 per day per personnel.
3.9.22.3 Rules and Regulations for Foreign Travel
Hereunder are the rules and regulations relative to

foreign travels approved by the President, Department
Secretaries and their equivalents, as the case may be,
under the following authorized purposes/categories.
3.9.14.1.2 Government personnel who travel abroad

shall be entitled to the Daily Subsistence
Allowance (DSA) as provided in the
United Nations Development Program
(UNDP) Index which can be secured from
the Department of Foreign Affairs.
3.9.14.1.3 The DSA shall be apportioned in the same

manner as the travel expenses for local
travel.
3.9.14.1.4 Entitlement to DSA shall start only upon

arrival at the place of destination and
shall cease upon departure therefrom at
the same percentages indicated in item
3.9.22.2.2.
3.9.14.1.5 In case the officials or employees

authorized to travel are not provided with
transportation by the host country or
sponsoring organization, they shall be
allowed official transportation, which shall
be of the restricted economy class, unless
otherwise authorized by the President of
the Philippines.
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3.9.14.1.6 The airport terminal fee at the point of

embarkation to go back to the Philippines
upon completion of the official trip abroad
may be reimbursed.
3.9.14.2.2 For NGAs including SUCs, the

amounts shall be charges against
their respective appropriations for
traveling expenses.
3.9.14.2.3 For GOCCs and GFIs, the amounts

shall be charged against their
respective corporate operating
budgets.
3.9.14.2.4 For LGUs, the amounts shall be

charged against their respective local
government funds.
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3.9.15 Terminal Leave Benefit and Monetization of

Leave Credits
The Terminal Leave Benefit (TLB) refers to the money value of

the total accumulated vacation and sick leave credits of an
employee based on the highest salary received prior to or upon
retirement or voluntary separation from government service.
Monetization of Leave Credits (MLC) refers to the payment in

advance under prescribed limits and subject to specified terms
and conditions of the money value of the vacation and sick leave
credits of an employee upon his/her request, without actually
going on leave.
Budget Circular No. 2002-1 dated January 14, 2002, prescribes

the guidelines relative to the computation of the TLB and MLC in
accordance with Memorandum Circular (MC) No. 14, s. 1999,
issued by the Civil Service Commission (CSC).
3.9.23.1 Guidelines
3.9.23.1.1 Pursuant to Section 40, CSC MC No. 14,

the TLB shall be computed as follows:
TLB = S x D x CF
Where: TLB = Terminal leave benefit

S = Highest monthly salary
received
D = Number of days
of accumulated
vacation and sick leave
credits
CF = Constant factor of
0.0478087 month/day
The CF was derived as follows:
Given:
365 = Days in a regular year
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104 = Saturdays and Sundays in a regular year
10 = Legal holidays (per EO No. 292)
12 months/year
CF = --------------------------
[3 65 – (104 + 10)] days/year
12 months
CF = --------------------------
251 days
CF = .0478087 month/day
Conversely, a day is equal to 0.0478087

month. The equivalent number of days in a
month for the purpose of computation of
TLB is 20.91667 derived as follows:
Number of days = 1 day

--------------- x 1 month
0.0478087
month
Number of days = 20.91667 days
3.9.23.1.2 The monetization of leave

credits shall be computed by
using the same formulae for the
computation of the TLB.
3.9.23.2 On the Funding Source
3.9.23.2.1 For the TLB
3.9.23.2.1.1 For NGAs including SUCs, the

TLBs for compulsory retirees
shall be charged against the
appropriations for the purpose
in the annual GAA. However,
compulsory retirees shall be
given priority over optional
retirees in the use of the built-
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in appropriations in cases
where claimants simul-
taneously request for fund
releases. Deficiencies in
appropriations shall be charged
against agency savings.
3.9.23.2.1.2 For GOCCs and GFIs, the TLBs

shall be charged against their
respective corporate operating
budgets.
3.9.23.2.1.3 For LGUs, the TLBs shall be

charged against their respective
3.9.23.2.2 For the MLC
• Funds for the MLC shall be charged

solely from savings of government
entities.
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3.10 Compensation for Casual Personnel and Those of Same

Nature
Casuals, temporary and emergency employees, including skilled, semi-

skilled and unskilled laborers refer to those hired for short durations only,
depending on the needs of the service.
3.10.1 Rules and Regulations
3.10.1.1 In accordance with Section 7, RA No. 6758, the daily

wage rate for casual personnel and those of similar
nature shall be derived based on the following formulae:
Authorized Monthly Salary for the Position

Daily Wage Rate = -------------------------------------------------
22 days
3.10.1.2 Payment of the daily wage shall be in accordance with

the “No Work, No Pay” policy. Accordingly, casual
employees shall be paid wages only on days actually
worked based on the above formulae, regardless of the
number of work days in a month. Annex “E” shows a
sample computation.
3.10.1.3 No wages shall be paid on rest days such as Saturdays,

Sundays and regular holidays falling on weekdays unless
casual employees worked on these days, and during
leaves of absence without pay.
3.10.1.4 Pursuant to PD No. 442, casual employees are entitled

to wages on special days proclaimed by the President
even if they did not work on these days.
3.10.1.5 Work performed on special work holidays are tantamount

to work performed on ordinary work days.
3.10.1.6 Casual personnel and those of similar nature shall be

entitled to allowances received by regular personnel,
including membership in the GSIS, health insurance,
employees compensation insurance, membership in the
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PAG-IBIG Fund, vacation and sick leaves and the
monetization thereof, and payment of terminal leave
benefits.
3.10.2 Funding Source
Funds for wages, allowances and other personnel benefits of

casual personnel and those of similar nature, including the
government’s share in the Government Service Insurance System
(GSIS) retirement and life insurance premiums, health insurance
premiums, employees compensation insurance premiums, and
PAG-IBIG Fund contributions shall be charged against the lump-
sum funds for the purpose under the agency
appropriations/budgets for personal services.
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Annex “E”
SAMPLE COMPUTATION OF DAILY WAGE
Mr. Dante dela Cruz, a casual employee, is occupying the position of Utility Worker
I, SG-1, with authorized monthly salary of P5,082.
His aggregate monthly wages are as follows:
Daily Wage Rate Aggregate Wage

Number of = P5,082 For the Month*
Months Work Days 22 days (2) x (3) = (4)
(1) (2) (3) (4)
January 22 P231 P5,082

February 20 231 4,620
October 23 231 5,313
* Based on the assumption that the number of work days is equal to days
actually worked
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3.11 Compensation for Contractual Personnel
Contractual personnel are those hired in accordance with specific contracts

for specified periods and with definite expected outputs, and are employed
to undertake a particular work or project, and whose hiring creates
employee-employer relationships between them and the hiring agencies.
Contractual personnel are considered as employees of hiring agencies limited
to such periods when their services are reasonably required.
Civil Service Commission and Department of Budget and Management Joint

Circular No. 99-7 dated December 29, 1999, provides the guidelines
governing contractual personnel.
3.11.1 Not Covered
3.11.1.1 Student laborers, apprentices, laborers of contracted

projects (“pakyaw”), mail collectors, including those paid
on piecework bases; and
3.11.1.2 Those whose positions are not classified/approved by the

DBM and the CSC
3.11.2 Rules and Regulations
3.11.2.1 The hiring of contractual personnel shall be allowed under

the following conditions:
3.11.2.1.1 The desired expertise is not available among

the regular staff.
3.11.2.1.2 The service to be rendered is of short duration

and the service has to be terminated
thereafter.
3.11.2.1.3 The work to be accomplished is very urgent

but in utilizing the regular staff, other functions
of the agency will be unduly prejudiced.
3.11.2.2 Contractual personnel may be hired only if funds for the

purpose are available in agency appropriations/budgets.
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114
3.11.2.3 Contractual personnel shall not be allowed more than two

part-time contracts with government at any one time.
3.11.2.4 Contractual personnel must not be designated in any case

to positions wherein they will exercise control or
supervision over regular personnel of hiring agencies.
3.11.2.5 Employment contracts shall only be issued on the bases of

classified contractual positions duly approved by the DBM,
and in no case shall the contracts extend beyond the fiscal
year they were approved.
3.11.2.6 Compensation of Contractual Personnel
3.11.2.6.1 Contractual personnel shall be paid salaries of

equivalent permanent positions as determined
by the DBM, but not to exceed the salaries of
immediate superiors.
3.11.2.6.2 Contractual personnel shall be entitled to

allowances received by regular personnel,
including membership in the GSIS, health
insurance, employees compensation insurance,
membership in the PAG-IBIG Fund, vacation
and sick leaves and the monetization thereof,
and payment of terminal leave benefits.
3.11.2.6.3 The contractual employees’ share in the GSIS

retirement and life insurance premiums, health
insurance premiums, employees compensation
insurance premiums and PAG-IBIG Fund
contributions shall be paid by the individual
contractual employees.
3.11.2.6.4 The Representation and Transportation

Allowances (RATA) for contractual officials
whose positions have been determined by the
DBM as comparable or equivalent in rank to
any of the positions enumerated in item
3.9.5.2.1 of this Chapter, may be granted
RATA in accordance with the rules and
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regulations provided under item 3.9.5.2.14 of
this Chapter.
3.11.3 Funding Source
Funds for the salaries, allowances, other personal benefits of

contractual personnel, including the government’s share in the
GSIS retirement and life insurance premiums, health insurance
premiums, employees compensation insurance premiums and
PAG-IBIG Fund contributions shall be charged against the
lump-sum funds for the purpose under agency
appropriations/budgets for personal services.
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3.12 Maintenance of the Compensation Plan
The Compensation Plan should provide compensation which can stand

comparison with those in private industries and which can provide
maximum benefit to the service so that the Philippine Government could
retain its core of public servants. Thus, the Compensation Plan was
established with maintenance mechanisms such that compensation issues
brought about by changes in economic conditions, employment conditions,
policy decisions, administrative reforms, etc., could readily be addressed
without disrupting the relationship between the Position Classification Plan
and the Compensation Plan.
3.12.1 Maintenance Mechanisms
3.12.1.1 Regular review of the compensation plan
To keep the Compensation Plan current so that it

remains reasonable and competitive, the DBM reviews
the salary schedule on a regular basis to identify
problems brought about by:
• inherent defects in the salary schedule reinforced by

special salary adjustments to specific groups of
government personnel which eventually create
salary problems that may disturb salary
relationships of positions;
• inflation, changes in the working environment and

in the organization which eventually make the rules
and rates of certain fringe benefits unrealistic;
• new rulings and decisions of courts and quasi-

judicial bodies which need to be harmonized and/or
rationalized with the existing compensation rules
and regulations;
• enactment of laws providing special compensation

to special groups;
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• changes in the number of years of academic
requirements;
• budgetary constraints; and
• other factors.
The regular review of the salary schedule, salary rules,

rules and regulations on the grant of allowances and
other personnel benefits enables the DBM to adopt
appropriate measures to ensure that the compensation
plan is updated and pay equity is maintained.
3.12.1.2 Compensation Survey
The DBM conducts compensation surveys as often as

economic conditions affect general salary/wage levels.
Through the compensation survey, information about

compensation levels and practices in selected private
firms are gathered using benchmark positions existing in
both the public and private sectors. The survey may be
by occupation or by industry, and may be conducted by
geographical area. The data collected are tabulated,
organized and processed statistically to obtain the
desired information.
Based on the compensation survey results, the DBM is

guided in the determination of the prevailing rates of
salaries, allowances and other personnel benefits. Policy
decisions are made as to the extent of adjustment of
salary levels and implementation of allowances and other
personnel benefits, taking into consideration the
following:
• statistical results of survey
• the government’s ability to finance the compensation

of its personnel on a sustainable basis; and
• other considerations such as standard cost of living,

geographical location, etc.
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Annex D
Report on Personnel Granted Hazard Duty Pay (HDP)
Pursuant to Budget Circular No. ________
FY ______
Department __________________________
Bureau/Agency _______________________
Position
Period of Assignment HDP Paid
Unique Title and
(5) (6)
Name of Item Salary Work Total
Personnel Number Grade Area Amount
(1) (2) (3) (4) Jan Feb March April May June July Aug Sep Oct Nov Dec Jan Feb March April May June July Aug Sep Oct Nov Dec (7)
Prepared/Certified Correct: Approved:
______________________ _________________
Administrative Officer Agency Head
3-75
References
Salaries
Issuances Titles
Republic Act No. 6758, An Act Prescribing a Revised Compensation and Position
August 21, 1989 Classification System in the Government and for Other
Purposes
National Compensation Rules and Regulations on the Standardization of

Circular No. 56, September Compensation and Position Classification Plan in the
30, 1989 Government
National Compensation List of Allowances/Additional Compensation of

Circular No. 59, September Government Officials and Employees Which Shall Be
30, 1989 Deemed Integrated Into the Basic Salary
Corporate Compensation Rules and Regulations for the Implementation of the

Circular No. 10, October 2, Revised Compensation and Position Classification Plan in
1989 and February 15, Government-Owned and/or -Controlled Corporations and
1999 Government Financial Institutions (GOCCs/GFIs)
Joint Senate-House of Joint Resolution Urging the President of the Philippines to

Representatives Resolution Revise the Existing Compensation and Position
No. 1, s. 1994, March 7, Classification System in the Government and to
1994 Implement the Same Initially Effective January 1, 1994
Executive Order No. 164, Adopting a Revised Compensation and Position

March 7, 1994 Classification System in the Government
National Compensation Guidelines for the Initial Implementation of the Revised

Circular No. 72, March 9, Compensation and Position Classification System
1994
Executive Order No. 218, Second Year Implementation of the New Salary Schedule
January 1, 1995 in the Government
National Compensation Guidelines for the Second Year Implementation of the

Circular No. 74, January 2, New Salary Schedule in the Government
1995
Corporate Compensation Rules and Regulations for the Implementation of the

Circular No. 11, series of Revised Compensation and Position Classification Plan in
1996, January 15, 1996 Government-Owned and/or Controlled Corporations and
Government Financial Institutions (GOCCs/GFIs)
Executive Order No. 290, Third Year Implementation of the New Salary Schedule in
January 2, 1996 the Government
3-114
Issuances Titles
National Budget Circular Guidelines for the Third Year Implementation of the New
No. 448, series of 1996, Salary Schedule in the Government
January 2, 1996
Executive Order No. 389, Implementing the Fourth and Final Year Salary Increases
December 28, 1996 Authorized by Joint Senate and House of Representatives
Resolution No. 1, series of 1994
National Budget Circular Guidelines for the Full Implementation of the New Salary
No. 458, series of 1997, Schedule in the Government
January 2, 1997
Executive Order No. 219, Grant of Salary Adjustment to All Government Personnel
March 20, 2000
National Budget Circular Guidelines for the Grant of Ten Percent (10%) Salary
No. 468, March 21, 2000 Adjustment to All Government Personnel Effective
January 1, 2000
Executive Order No. 22, Grant of Salary Adjustment to All Government Personnel
June 27, 2001
National Budget Circular Guidelines for the Grant of Five Percent (5%) Salary
No. 474, June 15, 2001 Adjustment to All Government Personnel Effective July 1,
2001
Step Increments
Issuances Titles
Civil Service Commission Rules and Regulations Governing the Grant of Step
and Department of Budget Increments to Deserving Officials and Employees of the
and Management Joint Government
Circular No. 1, s. 1990,
March 29, 1990
Civil Service Commission Amending Section 1, Rule I of the Joint CSC-DBM Circular
and Department of Budget No. 1, s. 1990
and Management Joint
July 5, 1991
Civil Service Commission Amending Further Joint CSC-DBM Circular No. 1, s. 1990
and Department of Budget (Entitlement to Step Increment)
Circular No. 1-2003, April
11, 2003
3-115
Personnel Economic Relief Allowance
Issuances Titles
Budget Circular No. 4, Grant of Personnel Economic Relief Allowance to All

June 28, 1991 Employees of the Government
Budget Circular No. 4-A, Grant of Personnel Economic Relief Allowance (PERA) to
July 1, 1991 All Employees of the Government
Circular Letter No. 95-9, Grant of Personnel Economic Relief Allowance (PERA) to
series of 1995, December Substitute Teachers
15, 1995
Budget Circular No. 4-B, Amending Budget Circular No. 4 Dated June 28, 1991
series of 1996, February 2, Relative to the Grant of Personnel Economic Relief
1996 Allowance to All Employees of the Government
Budget Circular No. 12, Updated Rules and Regulations on the Grant of Personnel
April 7, 1997 Economic Relief Allowance (PERA) and Expansion of
Coverage to Include All Employees of the Government
Additional Compensation
Issuances Titles
Administrative Order No. Implementing the Grant of Additional Compensation in

53, May 17, 1993 the Amount of P500.00 Per Month to Public School
Teachers, and Uniformed Personnel of the Philippine
National Police and the Armed Forces of the Philippines,
and Extending the Benefit to the Rest of the Personnel of
the Government
Administrative Order No. Clarifying the Implementation of the Grant of Additional

76, August 17, 1993 Compensation in the Amount of P500.00 Per Month to
Contractual Personnel of the Government and to Local
Officials and Employees
Budget Circular No. 15, Compensation and Additional Benefits of Suspended

March 5, 1998 Government Personnel
Budget Circular No. 17, Extending the Grant of P500 Per Month Additional
February 24, 1999 Compensation (ADCOM) to Government Personnel
Allocated to Salary Grade 26 and Above
Administrative Order No. Granting Additional Compensation in the Amount of One

144, February 28, 2006 Thousand Pesos (P1,000.00) Per Month to All Employees
of the National Government
3-116
Issuances Titles
Budget Circular No. 2006- Rules and Regulations on the Increase in the Additional
2, March 2, 2006 Compensation of Government Employees
Budget Execution Specific Guidelines on the Release of Funds for the

Guidelines No. 2006-8, Increase in the Additional Compensation
March 3, 2006
Uniform/Clothing Allowance
Issuances Titles
Budget Circular No. 2003- Rules and Regulations on the Grant of Uniform/Clothing
8, December 8, 2003 Allowance (U/CA) to All Government Personnel for FY
2004 and Years Thereafter
Budget Circular No. 2003- Rules and Regulations on the Grant of Uniform/Clothing
8A, July 2, 2004 Allowance (U/CA) to All Government Personnel for FY
Representation and Transportation Allowances
Issuances Titles
National Compensation Representation and Transportation Allowances of

Circular No. 67, January 1, National Government Officials and Employees
1992
National Compensation Amending National Compensation Circular No. 67 Dated

Circular No. 67-A, May 15, January 1, 1992 Relative to the Representation and
1992 Transportation Allowances of National Government
National Budget Circular Representation and Transportation Allowances of

No. 450, March 5, 1996 Contractual Personnel
National Budget Circular Guidelines on the Grant of the Monthly Cash Equivalent
No. 454, October 14, 1996 of the Transportation Allowance Authorized Under the
Annual General Appropriations Act
Corporate Budget Circular Guidelines for the Implementation of the Revised Rates
No. 18, November 14, of Representation and Transportation Allowances (RATA)
2000 of Officials in Local Water Districts (LWDs)
3-117
Issuances Titles
National Compensation Further Amending National Compensation Circular No. 67

Circular No. 67-B, August Dated January 1, 1992 Relative to the Representation
8, 2002 and Transportation Allowances of National Government
National Budget Circular Revised Rates of Representation and Transportation

No. 498, April 1, 2005 Allowances (RATA)
Year-End Bonus and Cash Gift
Issuances Titles
Executive Order No. 74, Granting Year-End Bonus and Cash Gift to National and
November 26, 1986 Local Government Officials and Employees
Executive Order No. 74-A, Expanding the Coverage of the Year-End Bonus
December 19, 1986
Republic Act No. 6686, An Act Authorizing Annual Christmas Bonus to National
December 14, 1988 and Local Government Officials and Employees Starting
CY 1988
Administrative Order No. Prescribing the Guidelines for the Advance Payment of
57, June 1, 1993 One-Half (1/2) of the Amount of the Christmas Bonus
and Cash Gift for CY 1993 Under R.A. No. 6686 to
Government Personnel
National Compensation Grant of the Balance of One-Half Month Year-End Bonus

Circular No. 70, November and Cash Gift for Calendar Year 1993 to Government
8, 1993 Officials and Employees Including Those in Government-
Owned and/or Controlled Corporations and Financial
Institutions and Local Government Units
Administrative Order No. Prescribing the Guidelines for the Loan of One-Half (1/2)
132, June 8, 1994 of the Amount of the Christmas Bonus and Cash Gift for
CY 1994 Under R.A. No. 6686 to Government Personnel
Budget Circular No. 5, Grant of Year-End Bonus and Cash Gift for CY 1994
October 14, 1994
Budget Circular No. 5-A, Grant of Year-End Benefits for CY 1994

December 16, 1994
Administrative Order No. Authorizing the Grant of an Interest-Free Loan to

195, May 30, 1995 Government Personnel in CY 1995 and Years Thereafter
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Issuances Titles
Budget Circular No. 7, Grant of Year-End Bonus and Cash Gift for FY 1995 and
November 2, 1995 Years Thereafter
Circular Letter No. 12-96, Grant of an Interest-Free Loan to Government Officials

May 3, 1996 and Employees
Budget Circular No. 11, Grant of Year-End Bonus and Cash Gift and Advance
October 31, 1996 Payment of One-Half (1/2) Thereof for FY 1996 and
Years Thereafter
Budget Circular No. 11-A, Amending Budget Circular (BC) No. 11, Dated October
April 24, 1997 31, 1996 Relative to the Grant of Year-End Bonus and
Cash Gift and Advance Payment of One-Half (1/2)
Thereof for FY 1996 and Years Thereafter
Republic Act No. 8441, An Act Increasing the Cash Gift to Five Thousand Pesos
December 22, 1997 (P5,000.00), Amending for the Purpose Certain Sections
of Republic Act Numbered Six Thousand Six Hundred
Eighty-Six and for Other Purposes
Budget Circular No. 11-B, Amending Further Budget Circular (BC) No. 11, Dated
March 30, 1998 October 31, 1996 Relative to the Grant of Year-End
Bonus and Cash Gift and Advance Payment of One-Half
(1/2) Thereof for FY 1996 and Years Thereafter
Budget Circular No. 15, Compensation and Additional Benefits of Suspended

March 5, 1998 Government Personnel
Budget Circular No. 2000- Grant of Year-End Bonus and Cash Gift and Advance
18, September 6, 2000 Payment of One-Half (1/2) Thereof for FY 2000 and
Years Thereafter
Circular Letter No. 2002- Clarification on the Service Requirement for Entitlement
14, June 25, 2002 to Year-End Benefits (YEB)
Circular Letter No. 2003- Prohibition on the Grant of Additional Bonuses in Any
10, October 17, 2003 Form
Budget Circular No. 2003- Liberalization of the Rules and Regulations on the
2, May 9, 2003 Payment of Year-End Bonus and Cash Gift
Budget Circular No. 2005- Updated Rules and Regulations on the Grant of the Year-
6, October 28, 2005 End Bonus and Cash Gift to Government Personnel for FY
3-119
Productivity Incentive Benefit
Issuances Titles
Administrative Order No. Rationalizing the Grant of Productivity Incentive Benefits

268, February 21, 1992 for Calendar Year 1991 to All Personnel of Government
Agencies
National Budget Circular Grant of Productivity Incentive Benefits to Officials and

No. 426, April 1, 1992 Employees of the Government
Administrative Order No. Authorizing the Grant of CY-1993 Productivity Incentive

103, January 14, 1994 Benefits to Government Personnel and Prohibiting
Payments of Similar Benefits in Future Years Unless Duly
Authorized by the President
Administrative Order No. Prescribing a Standard Incentive Pay System Based on

161, December 6, 1994 Productivity and Performance, for All Officials and
Employees of the Government, National and Local
Including Those of Government-Owned and/or
–Controlled Corporations and Government Financial
Institutions and for Other Purposes
National Compensation Grant of Productivity Incentive Benefits to Officials and

Circular No. 71, January Employees of the Government
19, 1994
National Compensation Grant of Productivity Incentive Benefit (PIB) for CY 1994

Circular No. 73, December and Years Thereafter
27, 1994
National Compensation Supplementing National Compensation Circular No. 73

Circular No. 73-A, March 1, Dated December 27, 1994 on the Grant of Productivity
1995 Incentive Benefits (PIB) for CY 1994 and Years
Thereafter
Circular Letter No. 3-96, Grant of Productivity Incentive Benefit (PIB) for CY 1995
series of 1996, January 15,
1996
Circular Letter No. 3-97, Grant of Productivity Incentive Benefit (PIB) for FY 1996
January 31, 1997 and Years Thereafter
Circular Letter No. 2001-6, Grant of Productivity Incentive Benefit

March 2, 2001
Circular Letter No. 2002-3, Additional Guidelines on the Grant of Productivity

January 2, 2002 Incentive Benefit (PIB)
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Overtime Pay
Issuances Titles
Memorandum Order No. Prescribing Guidelines Governing the Rendition and

228, March 29, 1989 Payment of Overtime Services of Government Personnel
National Budget Circular Rules and Regulations Implementing Memorandum Order

No. 410, April 28, 1989 No. 228 on the Rendition of Overtime Services With Pay
Memorandum Order No. Amending Memorandum Order No. 228, Prescribing

227, August 26, 1994 Guidelines Governing the Rendition and Payment of
Overtime Services of Government Personnel
Budget Circular No. 10, Prescribing and Updating the Guidelines and Procedures
March 29, 1996 on the Rendition of Overtime Services With Pay of
Compensatory Time-Off
Issuances Titles
Administrative Order No. Directing the Continued Adoption of Austerity Measures

103, August 31, 2004 in the Government
Civil Service Commission Non-Monetary Remuneration for Overtime Services

and Department of Budget Rendered
Circular No. 2, series of
2004, October 4, 2004
Civil Service Commission Amendments to CSC-DBM Joint Circular (JC) No. 2, s.

and Department of Budget 2004 re: Non-Monetary Remuneration for Overtime
and Management Joint Services Rendered
Circular No. 2-A, s. 2005,
July 1, 2005
Per Diem
Issuances Titles
Executive Order No. 389, Authorizing Officials and Employees of the Regular
December 30, 1989 Agencies/Offices of the National Government and of
Other Government-Owned and/or Controlled Corporations
to Adopt the Rates of Per Diem and Allowances as
Authorized Pursuant to Executive Order No. 151 Dated
3-121
Issuances Titles
March 19, 1987, as Implemented by National Budget
Circular No. 391 Dated October 6, 1987, as Amended,
and Ratifying for the Purpose All Previous Payments Made
by National Government Agencies/Offices Pursuant to the
Said Issuances
Budget Circular No. 2003- Guidelines Relative to the Grant of Per Diems to Members
6, September 29, 2003 of Collegial Bodies and Members of the Board of
Regents/Trustees of State Universities and Colleges
Honoraria
Issuances Titles
Compensation Policy National Government Officials Entitled to Honoraria

Guidelines No. 98-1, March Chargeable Against Local Funds
23, 1998
Budget Execution Updated Rules and Regulations on the Grant of Additional

Guidelines No. 2004-1, Allowance and Other Benefits to National Government
January 8, 2004 Officials/Employees Assigned to Local Government Units
Budget Circular No. 2003- Prescribing Guidelines on the Grant of Honoraria to

5, September 26, 2003 Government Personnel for FY 2003 and onwards
Honoraria for Government Personnel Involved in Government

Procurement
Issuances Titles
Budget Circular No. 2004- Guidelines on the Grant of Honoraria to Government

5, March 23, 2004 Personnel Involved in Government Procurement
Budget Circular No. 2004- Guidelines on the Grant of Honoraria to Government

5A, October 7, 2005 Personnel Involved in Government Procurement
Night-Shift Differential Pay
Issuance Title
Budget Circular No. 8, Prescribing Guidelines and Procedures for the Grant of
Series 1995, December 4, Night-Shift Differential Pay to Government Employees
1995
3-122
Hazard Duty Pay
Issuance Title
Budget Circular No. 2005- Rules and Regulations on the Grant of Hazard Duty Pay
4, July 13, 2005
Subsistence Allowance
Issuance Title
Republic Act No. 7305, Magna Carta of Public Health Workers

March 26, 1992
November 1999 Revised Implementing Rules and Regulations for Public

Health Workers
Laundry Allowance
Issuances Title

March 26, 1992

Health Workers
Free Quarters for Certain Government Officials
Issuance Title
National Budget Circular Guidelines on the Provision of Free Quarters to Certain

No. 456, November 11, Officials
1996
Free Quarters Privileges in Hospitals
Issuance Title

March 26, 1992
3-123
Issuance Title

Health Workers
Anniversary Bonus
Issuances Titles
Administrative Order No. Authorizing the Grant of Anniversary Bonus to Officials

263, March 28, 1996 and Employees of Government Entities
National Budget Circular Amplifying and Clarifying the Implementation of the

No. 452, May 20, 1996 Grant of Anniversary Bonus to Officials and Employees of
Government Entities
Collective Negotiation Agreement Incentive
Issuances Titles
Executive Order No. 180, Providing Guidelines for the Exercise of the Right to
June 1, 1987 Organize of Government Employees, Creating a Public
Sector Labor-Management Council and for Other
Purposes
Public Sector Labor- Grant of Collective Negotiation Agreement (CNA)

Management Council Incentive for National Government Agencies, State
Resolution No. 04, s. 2002, Universities and Colleges and Local Government Units
November 14, 2002
Public Sector Labor- Grant of Collective Negotiation Agreement (CNA)

Management Council Incentive for Government Owned or Controlled
Resolution No. 02, s. 2003, Corporations (GOCCs) and Government Financial
May 19, 2003 Institutions (GFIs)
Public Sector Labor- Approving and Adopting the Amended Rules and
Management Council Regulations Governing the Exercise of the Right of
Resolution No. 02, s. 2004, Government Employees to Organize
September 28, 2004
Executive Order No. 135, Authorizing the Grant of Collective Negotiation

December 27, 2005 Agreement (CNA) Incentive to Employees in Government
Agencies
Budget Circular No. 2006- Grant of Collective Negotiations Agreement (CNA)

1, February 1, 2006 Incentive
3-124
Travel Expenses
Issuances Titles
Executive Order No. 248, Prescribing Rules and Regulations and New Rates of
May 29, 1995 Allowances for Official Local and Foreign Travels of
Executive Order No. 248-A, Amending Executive Order No. 248 Dated May 29, 1995,
August 14, 1995 Which Prescribes Rules and Regulations and New Rates
of Allowances for Official Local and Foreign Travels of
Executive Order No. 298, Amending Further Executive Order No. 248 Dated May
March 23, 2004 29, 1995 as Amended by Executive Order No. 248-A
Dated August 14, 1995, Which Prescribes Rules and
Regulations and New Rates of Allowances for Official
Local and Foreign Travels of Government Personnel
Terminal Leave Benefit and Monetization of Leave Credits
Issuances Titles
Civil Service Commission Rules and Regulations Governing the Monetization of

and Department of Budget Leave Credits of Government Officials and Employees
June 27, 1991
Civil Service Commission Guidelines in the Application for Monetization of Leave

Memorandum Circular No. Credits and the Computation of the Money Value of the
31, s. 1991, July 23, 1991 Ten (10) Days Monetized Leave Credits
Civil Service Commission Amendatory Rules and Regulations Governing the

and Department of Budget Monetization of Leave Credits of Government Officials
and Management Joint and Employees
Circular No. 2-97, June 25,
1997
Civil Service Commission Amendments to Rules I and XVI of the Omnibus Rules
Memorandum Circular No. Implementing Book V of the Administrative Code of 1987
41, s. 1998, December 24, (Executive Order 292)
1998
Civil Service Commission Additional Provisions and Amendments to CSC

Memorandum Circular No. Memorandum Circular No. 41, s. 1998
14, s. 1999, August 23,
1999
3-125
Issuances Titles
Budget Circular No. 2002- Computation and Funding of Terminal Leave Benefits and
1, January 14, 2002 Monetization of Leave Credits
Compensation for Casual Personnel and Those of Same Nature
Issuance Title
Budget Circular No. 2003- Rules and Regulations on the Computation and Payment
4, September 26, 2003 of Daily Wage
Note:
Compensation Policy Guidelines and Budget Execution Guidelines are only for internal use of
DBM technical staff.
3-126
Chapter 4
Responsibility Centers in the Administration of the

Position Classification and Compensation System
4.1 Department of Budget and Management

The Department of Budget and Management (DBM) is the primary
government agency responsible for the formulation and implementation of
the National Budget through the efficient and sound utilization of
government funds and resources for the attainment of the country’s
development objectives. One of the major functions of the DBM to fulfill
its mandate is the development, administration and maintenance of a
unified government Position Classification and Compensation System
(PCCS). It carries this out principally through the Organization, Position
Classification and Compensation Bureau (OPCCB), Budget and
Management Bureaus (BMBs) and DBM Regional Offices (DBM-ROs).
Below are the pertinent functions of each bureau/office in so far as the
PCCS is concerned.
4.1.1 Organization, Position Classification and Compensation

Bureau
4.1.1.1 Administer and maintain the PCCS;
4.1.1.2 Develop standards, guidelines, rules and regulations on

organization, staffing, and classification and
compensation of positions;
4.1.1.3 Render advice to or process requests of government

entities referred by DBM offices, or by other government
offices on organization, staffing, position classification
and compensation matters;
4.1.1.4 Maintain, update and enforce position classification and

compensation policies and standards;
4.1.1.5 Monitor government manpower levels and maintain a

comprehensive database on government positions and
compensation through the Government Manpower
Information System (GMIS);
4.1.1.6 Establish the government-wide budgetary requirements

for personal services and associated budgetary items for
inclusion in the annual national budget;
4-1
4.1.1.7 Prepare recommendations/position papers on legislative

proposals/bills and proposed executive issuances with
policy and government-wide implications on organization,
staffing and position classification and compensation;
4.1.1.8 Conduct training programs in the field of organization,

staffing position classification and compensation;
4.1.1.9 Conduct compensation surveys in private industry to

determine prevailing rates of pay for comparable
positions in the government; and
4.1.1.10 Perform other related functions as may be provided by

law.
4.1.2 Budget and Management Bureaus (BMBs) A-E
4.1.2.1 Evaluate and process organization, staffing, position

classification and compensation proposals of government
agencies under their coverage;
4.1.2.2 Establish agency-specific annual budgetary requirements

for personal services and associated budgetary items for
inclusion in the annual national budget;
4.1.2.3 Conduct position audits in government agencies to

ascertain the duties and responsibilities of positions, as
necessary;
4.1.2.4 Provide technical assistance to government agencies

under their coverage on organization, staffing, position
classification and compensation matters; and
4.1.2.5 Prepare recommendations/position papers on legislative

proposals/bills and proposed executive issuances with
specific agency issues on organization, staffing, position
classification, and compensation; and with funding
implications.
4.1.3 The DBM Regional Offices
4.1.3.1 Evaluate and process position classification and

compensation proposals of government entities
delegated to DBM-ROs;
4-2
Responsibility Center in the Administration of the PCCS
4.1.3.2 Establish annual budgetary requirements for personal

services and associated budgetary items of delegated
government entities for inclusion in the annual national
budget;
4.1.3.3 Conduct position audits in delegated government entities

to ascertain the duties and responsibilities of positions,
as necessary;
4.1.3.4 Review budgets of provinces and highly urbanized cities

under their coverage, particularly the personal services
component, to ensure compliance with existing laws,
rules and regulations; and
4.1.3.5 Provide technical assistance to government entities

delegated to DBM-ROs on organization, staffing, position
classification and compensation matters.
4.2 The Department/Bureau/Office
4.2.1 Agency Head
The head of the department, bureau, office or agency shall:
4.2.1.1 Ensure compliance by all concerned with the rules and

regulations on position classification and compensation;
4.2.1.2 Prescribe the duties and responsibilities of each employee

in accordance with the approved classification of the
position; and
4.2.1.3 When requested, provide information about the functions

of the organization and such other matters necessary for
position classification, pay determination and preparation
of class specifications.
4.2.2 The Administrative Officer or Equivalent Officer
The Administrative Officer or equivalent officer of a government

agency in charge of human resource management functions serves
as the link between the agency and the DBM through the
OPCCB/BMB/DBM-RO concerned. The Administrative Officer or
equivalent officer shall:
4.2.2.1 Cause the preparation of the Position Description Form

(PDF);
4-3
4.2.2.2 Review the accomplished PDF for completeness;
4.2.2.3 Indicate BMB/DBM-RO classification action on the agency

copy of the PDF and in the Personal Services Itemization
and Plantilla of Personnel (PSIPOP);
4.2.2.4 Prepare position classification and compensation reports

as required by the DBM; accomplish and update the
PSIPOP; and
4.2.2.5 Keep and maintain official position classification and

compensation records.
4.2.3 The Immediate Supervisor
The immediate supervisor shall:
4.2.3.1 Assign to the incumbent the duties and responsibilities

used as basis for the classification of the incumbent’s
position; and
4.2.3.2 Review the PDF of employees for consistency with actual

duties and responsibilities.
4.3 Submission of Required Agency Documents/Reports to

DBM
4.3.1 A well maintained PCCS would proactively address all issues related
to human capital, and would be an invaluable tool for strategic
planning and decision-making in all levels of management. To keep
the PCCS updated and responsive with the times, the DBM enlists
the full support of agencies through the submission of agency
documents/reports on personnel complement and compensation
matters for monitoring, planning and other purposes.
4.3.2 Failure on the part of agency heads, chief accountants,

administrative officers, and other responsible agency officers to
submit current PSIPOP and such other documents/reports as may
be required by the DBM shall subject the agency concerned to
appropriate sanctions under existing rules and regulations.
4-4
Chapter 5
Salary Grades of Positions of Constitutional and

Other Officials and Their Equivalents
5.1 Salary Grades of Positions of Constitutional Officials
Under RA No. 6758, the salary grades of positions of constitutional officials

are as follows:
Salary
Position
Grade
President 33
Vice-President 32
President of the Senate 32
Speaker of the House of Representatives 32
Chief Justice of the Supreme Court 32
Senator 31
Member of the House of Representatives 31
Associate Justice of the Supreme Court 31
Chairman, Constitutional Commission 31
Commissioner, Constitutional Commission 30
5.2 Salary Grades of Positions of Equivalent Ranks
The Department of Budget and Management (DBM) determines the

positions that are of equivalent ranks to any of the foregoing officials
based on the following guidelines:
5.2.1 Salary Grade 33 - This Salary Grade is assigned to the President of

the Republic of the Philippines as the highest position in the
government. No other position in the government service is
considered to be of equivalent rank.
5.2.2 Salary Grade 32 - This Salary Grade is assigned to the Vice-

President of the Republic of the Philippines and to positions which
head the Legislative and Judicial Branches of the government,
namely: the President of the Senate, the Speaker of the House of
Representatives, and the Chief Justice of the Supreme Court. No
other positions in the government service are considered to be of
equivalent rank.
5.2.3 Salary Grade 31 - This Salary Grade is assigned to Senators, and

Members of the House of Representatives and those of
5-1
equivalent rank. The following are examples of positions of

equivalent rank:
• Executive Secretary;
• Department Secretary;
• Presidential Spokesman;
• Ombudsman;
• Press Secretary;
• Presidential Assistant II;
• Presidential Adviser;
• Director-General (National Economic and Development

Authority);
• Presiding Justice, Court of Appeals;
• Presiding Justice, Sandiganbayan;
• Secretary of the Senate;
• Secretary-General of the House of Representatives; and
• UP President.
A position, other than ex-officio, which heads an entity that can be

considered organizationally equivalent to a Department by reason
of its broad functional scope of operations and wide area of
coverage ranging from top level policy formulation to the provision
of technical and administrative support to the units under it, can be
considered as of equivalent rank to a Department Secretary.
5.2.4 Salary Grade 30 - Examples of positions included in this Salary

Grade are the following:
• Department Undersecretary;
• Presidential Assistant I;
• Solicitor-General;
5-2
Salary Grades of Positions of Constitutional and Other Officials and
Their Equivalents
• Government Corporate Counsel;
• Court Administrator of the Supreme Court;
• Chief of Staff (Office of the Vice-President);
• Deputy Director-General (National Economic and

Development Authority);
• Deputy Ombudsman;
• Associate Justice, Court of Appeals;
• Associate Justice, Sandiganbayan;
• Special Prosecutor;
• UP Executive Vice-President; and
• SUC President IV.
Heads of councils, commissions, boards and similar entities whose

operations cut across sectors or are serving a sizeable portion of
the general public and which coverages are nationwide or whose
functions are comparable to the aforecited positions, may be
placed at this level.
5.2.5 The salary grades of positions not mentioned herein or those that
may be created shall be determined based on the above guidelines.
5-3
Chapter 6
Position Classification and Compensation Scheme

for Teaching Positions in Elementary and Secondary
Schools
There is no distinction between the duties of one teaching position and those of
other teaching positions. All are involved in classroom teaching. Hence,
teaching positions are classified based on the personal qualifications of the
incumbents thereof rather than based on the preponderant duties and
responsibilities and qualification requirements of the positions. This concept
deviates from existing standards that work assignments determine the
classification and pay levels of positions. The deviation is made in the case of
teachers to encourage and reward initiatives for professional growth which are
vital in a dynamic educational system. The progression to a higher position
level, which does not entail an increase in duties and responsibilities, recognizes
the increase in the academic preparation level.
6.1 The Teachers’ Preparation Pay Schedule (TPPS)
The TPPS is the position classification and compensation scheme for

teaching positions in elementary and secondary schools. It similarly
applies to guidance counselors/coordinators, school librarians who are
similarly assigned teaching loads. It does not cover school nurses, school
physicians, school dentists and other school employees.
6.2 Components of the TPPS
6.2.1 Coverage
The TPPS applies to the following classes of positions:
Class Level Salary Grade

Teacher I, II, III 10, 11,12
Master Teacher I, II, III, IV 16,17,18,19
Head Teacher I, II, III, IV, V, VI 13,14,15,16,17,18
Special Education Teacher I, II, III, IV, V 13,14,15,16, 17
Special Science Teacher I, II, III, IV, V 13,16,19,22, 24
Guidance Counselor I, II, III 10,11,12
Guidance Coordinator I, II, III 13,14,15
School Farming Coordinator I, II, III 13,14,15
Vocational Instruction Supervisor I, II, III 16,17,18
It also applies to certain classes of positions in the Library

Services Group which have at least one teaching load:
6-1
Class Level Salary Grade
School Librarian I, II, III 10,11,12
The TPPS does not apply to Librarian positions not assigned in

schools.
6.2.2 Basis of Classification of Positions
The Department of Education (DepEd), in consultation with the

Department of Budget and Management (DBM), maintains the
TPPS, as shown below:
Teachers’ Academic Preparation

Occupational
Group
BSE* BSE + 20** MA***
Library School Librarian I, School Librarian II, School Librarian

Services SG-10 SG-11 III, SG-12
School, Teacher I, SG-10 Teacher II, SG-11 Teacher III, SG-12

College and
University Head Teacher I, Head Teacher II, Head Teacher III,
Teaching SG-13 SG-14 SG-15
Head Teacher IV, Head Teacher V, Head Teacher VI,

SG-16 SG-17 SG-18
Special Education Special Education Special Education

Teacher I, Teacher II, Teacher III,
SG-13 SG-14 SG-15
Guidance Guidance Counselor Guidance

Counselor I, II, SG-11 Counselor III,
SG-10 SG-12
School Farming School Farming School Farming

Coordinator I, Coordinator II, Coordinator III,
SG-13 SG-14 SG-15
Vocational Vocational Vocational

Instruction Instruction Instruction
Supervisor I, Supervisor II, Supervisor III,
SG-16 SG-17 SG-18
* Bachelor of Science in Education or equivalent

** Bachelor of Science in Education or equivalent plus 20 units in Master of
Arts or 20 years of teaching at Level I or Level IV in the case of Head
Teachers
*** Master of Arts
6-2
Classification and Compensation Scheme for Teaching Positions in
Elementary and Secondary Schools
6.2.2.1 Factors for Classification of Positions
Under the TPPS, the classification of the teaching

positions and others similarly covered are in accordance
with the principle of “equal pay for equal work, training
and experience.” The classification of such positions
are determined based on:
6.2.2.1.1 academic or educational preparation;
6.2.2.1.2 teaching experience including those in private

schools; and
6.2.2.1.3 extra-curricular activities for professional

growth.
6.2.2.2 Academic Preparation Prerequisites
The minimum requirements for the classification of

positions to the levels established for each class of
positions are as follows:
6.2.2.2.1 Level I, e.g., Teacher I, School Librarian I -

Bachelor of Science in Education degree or
equivalent;
6.2.2.2.2 Level II, e.g., Teacher II, Guidance Counselor

II - Bachelor of Science in Education degree
or equivalent, plus 20 graduate units; and
6.2.2.2.3 Level III, e.g., Teacher III, School Librarian

III, Guidance Counselor III - Master’s degree or
equivalent.
6.2.2.3 Equivalents and Areas of Equivalents
The DepEd, in consultation with the DBM, establishes

“equivalents” to the academic preparation prerequisites
and defines the “area of equivalents” and the
corresponding units or points. The existing equivalents
and areas of equivalents are as follows:
6.2.2.3.1 Table of Equivalents
6-3
Category I Category II Category

Basic (Equivalent Titles (Years of III
Preparation or Degrees) Teaching) (Credit
Allowances)
For Level I
Bachelor’s degree 1(a) Bachelor of Teacher’s Certi- 148 or more

for teachers Pedagogy, Ba- ficate (2 or 3 units (accor-
(BSE, BSEE, etc.) chelor in Library years) or equi- ding to major
Science, Bachelor valent with at or minor
of Science in least 20 years subject)
Nursing, etc. teaching
experience
(b) All other

Bachelor’s deg-
ree courses plus
at least 18
professional edu-
cation units
For Level II
Bachelor’s degree 2(a) Courses in Bachelor’s deg- Bachelor’s deg-

for teachers plus No. 1(a) above ree for teachers ree for tea-
20 years tea- plus 20 gra- or equivalent chers plus at
ching experience duate units with at least 20 least 20 units
(BSE+20) years teaching of credit allo-
experience wances
(b) Courses in
No. 1(b) above
with at least 18
professional edu-
cation units plus
20 graduate units
For Level III
Master’s degree Master of Science/ Bachelor’s deg- Bachelor’s deg-

in Education Arts ree for teachers ree for tea-
or equivalent chers or equi-
with at least 20 valent with at
graduate units least 20 gra-
plus 20 years of duate units,
teaching expe- plus credit allo-
rience wances. The
total of gra-
duate units
and credit allo-
wances should
be equal to the
number of
units required
to graduate
with an MA
degree.
6-4
6.2.2.3.2 Table of Areas of Equivalents
Professional Activities Units of Credit
1. Formal Training 1 unit per academic

unit
2. Service in professional com-
mittees
a. Workshop, seminar, 1 unit per 25 hours
conference, etc
b. Special assignment from 1 unit per
the Director to perform assignment of not
special educational less than 30 hours
activity (assignment by
detail excluded)
3. Educational travel not for 2 units per 6
study purposes (report to months
be submitted and
evaluated)
4. Work experience
a. Trade (must be 5 units per year
functionally related to
school assignment)
b. Camp counselor 1 unit per 2-week
camping
5. In-service training on the
national level
a. Boy Scouting for scout 1 unit per training
masters period
b. Public administration or 1 unit per training
educational supervision period
6. Teaching experience with
paid service
a. Public school 1 unit per 3 years
b. Government summer ½ unit per 3-unit
school course
c. Private school prior to 1 unit per 5 years
assignment in public
school
d. Private school courses 1 unit per 3 unit
different from subjects course, ½ unit per
taught in public schools annual high school
subject
7. Authorship of educational 5 units
material excluding thesis
and dissertations used to
obtain a Master’s or
Doctor’s degree
8 Administrative and super-
visory experience
a. Public school 1 unit per 2 years
b. Private school 1 unit per 4 years
6-5
6.2.2.4 The Equivalents Record Form (ERF)
6.2.2.4.1 The ERF is a tool for determining the

appropriate classification of a Teacher
position. It reflects the educational
preparation, training, teaching experience,
workshop and seminars for professional
growth undertaken by a teacher.
• The ERF contains information on position

title, unique item number and authorized
salary in the current Personal Services
Itemization and Plantilla of Personnel
(PSIPOP).
• Credits claimed as to educational

preparation, years of teaching experience
in public or private schools and
professional activities shall be itemized
and supported either by the original or
certified true copy of the teacher’s special
orders, diploma or transcript of records.
The authenticity of the documents such as
educational preparation and seminars
attended shall be certified by the school
registrar and the director of training,
respectively.
• The allowable credits are computed on the

basis of the Table of Equivalents.
• The educational preparation, teaching

experience and credits allowed are
matched with corresponding category in
the preparation and classification levels of
the TPPS.
6.2.2.4.2 The processing of the ERF involves the

following steps:
• Role of the DepEd
♣ The filling of the ERF can be initiated

either by the schools division (SD) or
the teacher concerned.
6-6
♦ SD Initiative
1. The SD shall identify teachers

with 20 or more years of
teaching experience, evaluate
the duly certified service
records, prepare the
Certification as to the names of
qualified teachers, and inform
the teacher concerned that such
submission has been made on
his/her behalf.
2. In case of approval, the SD

shall determine whether or not
the approved ERF is within the
cut-off date. In case of
disapproval, the teacher shall be
informed by the SD concerned.
Teachers retiring during the

year are not covered by the cut-
off dates.
3. If within the cut-off date, the

SD shall prepare a request for
ERF implementation which shall
be endorsed and submitted
together with the duly certified
service records and Certification
as to the names of qualified
teachers by the DepEd Regional
Office (RO) to the DBM RO
concerned.
4. Upon receipt of the Notice of

Organization, Staffing and
Classification Action (NOSCA),
the DepEd RO shall prepare the
Notices of Salary Adjustment
(NOSA) and the necessary
adjustment to the salaries of the
teachers concerned.
6-7
5. The SD shall issue the NOSA to

the teacher concerned.
♦ Teacher’s Initiative
1. A teacher who has rendered

less than 20 years of service but
has earned 20 masteral units
shall prepare and submit his/her
ERF to the SD.
2. The ERF shall be evaluated by

the SD and post-audited by the
DepEd RO concerned to
determine whether or not it
meets the required points.
3. The teacher shall be duly

informed by the DepEd RO
through the SD whether his/her
ERF is approved or disapproved.
4. Consequently, steps 2 to 5 of
the SD Initiative are taken.
♣ The flow chart for the processing of

ERFs is shown in Annexes A and A-I of
this Chapter.
• Role of the DBM
♣ The DBM RO shall determine whether

or not there are available funds for the
implementation thereof. If none, the
same shall be returned to the DepEd
RO with the
information that the reclassification
may be considered in the next budget
cycle.
♣ If there are available funds, the DBM

RO shall prepare the corresponding
NOSCA and issue the same to the
DepEd RO. The salary adjustment
accruing to the teachers concerned
6-8
shall be charged against the lump-sum

for ERF implementation.
6.2.2.4.3 Specific Compensation Guidelines for

Teachers with Approved ERFs
6.2.2.4.3.1 Movement in position level due

to the implementation of the
ERF is considered as
reclassification, which
simultaneously partaking the
nature of promotion.
6.2.2.4.3.2 Allowable salaries of teachers

with approved ERFs
To determine the salary that

may be authorized for teachers
and other teaching related
personnel who are appointed to
higher level positions due to
approved ERFs, the rules on
promotion under Item 1 of
Annex C of NBC No. 458 may be
adopted.
To illustrate:
A Teacher I whose salary is on

the 5th step of SG-10 due to
step increment based on length
of service, with an approved
ERF as Teacher II, SG-11 shall
have his salary adjusted to 3rd
step of SG-11, applying the
rules of promotion.
From: Teacher I, SG-10 at

P10,971 per month (5th
step)
To: Teacher II, SG-11 at
P11,068 per month (3rd
step)
6-9
6.2.2.4.3.3 Grant of step increment due to

length of service
The reckoning date for the

grant of step increment shall be
based on the date of
appointment to the latest
position of the incumbent.
Thus, step increments
previously earned by a teacher
shall no longer be credited in his
new position. Likewise,
teaching services not credited in
the ERF evaluation can no
longer be used in computing the
step increments of the
incumbent in his reclassified
position.
6.3 Career Progression System for Public School Teachers
In addition to the TPPS, the Career Progression System for Public School
Teachers attaches a premium to classroom effectiveness and allows
teachers to remain in the classroom while advancing in status and
compensation. The system provides for equivalence in duties,
recognition and compensation for whatever career line a teacher
chooses.
6.3.1 Career Lines
6.3.1.1 For purposes of advancement, teachers are given the

option of choosing alternative career lines in school
administration or classroom teaching.
6.3.1.2 At the base of the career system is the Teacher

position. Thereafter, a teacher may be promoted either
as Elementary/Secondary School Principal, following the
school administration career line, or as Master Teacher,
which falls under the teaching career line.
6.3.2 Classroom Teaching Career Line (CTCL)
6.3.2.1 Executive Order No. 500 established a system of career

progression and promotion for public school teachers.
Four (4) levels of Master Teacher classes under the
CTCL, were created as follows:
6-10
Class Salary Grade

Master Teacher I 16
Master Teacher II 17
Master Teacher III 18
Master Teacher IV 19
6.3.2.2 There are established qualitative and quantitative

criteria for each level of Master Teacher. An applicant
must possess all the prescribed qualifications to be
considered for a particular level which is measured in
terms of educational preparation, performance rating,
and teaching experience.
6.3.2.3 There is, likewise, a quota system on the allowable

number of Master Teacher positions in elementary and
secondary schools. The quota system as determined by
the DepEd, in consultation with DBM, is as follows:
6.3.2.3.1 For elementary schools: Total Master Teacher

positions shall not exceed 10% of the total
authorized teacher positions in the district, to
wit:
• Master Teacher I positions shall not

exceed 6.6% of the total number of
authorized teaching positions.
• Master Teacher II positions shall not

exceed 3.4% of the number of authorized
Master Teacher I positions.
6.3.2.3.2 For secondary schools: One (1) Master

Teacher position regardless of level may be
allowed per subject area with at least 5-7
authorized teacher positions within the
school.
6.3.2.4 Attributes and Functions
The following attributes and functions have been

identified for Master Teacher levels:
6.3.2.4.1 All Master Teachers shall be administratively

under the school heads where they are
6-11
assigned notwithstanding their rank and

salary.
6.3.2.4.2 Master Teachers shall have regular teaching

loads.
6.3.2.4.3 Master Teachers shall guide other teachers in

the school or district towards improving their
competencies as well as taking the lead in the
preparation of instructional materials.
6.3.2.4.4 Master Teachers shall serve as demonstration

teachers or teacher consultants in other
schools in the district.
6.3.2.5 Criteria
As provided under DECS Order No. 57, series of 1997,

the requisites/qualifications needed for a candidate to
be considered for the Master Teacher position are as
follows:
6.3.2.5.1 Master Teacher I
6.3.2.5.1.1 Permanent teacher;
6.3.2.5.1.2 Bachelor’s degree for teachers

or equivalent as provided in the
Magna Carta for Public School
Teachers;
6.3.2.5.1.3 Very satisfactory performance

rating for the last two years;
6.3.2.5.1.4 At least 3 years teaching

experience; and
6.3.2.5.1.5 At least 25 points in leadership

and potential, or has been a
demonstration teacher in the
district level plus 15 points in
leadership and potential.
6.3.2.5.2 Master Teacher II
6-12
6.3.2.5.2.1 Master Teacher I for at least

one year;
6.3.2.5.2.2 Very satisfactory rating as

Master Teacher I;
6.3.2.5.2.3 Bachelor’s degree for teachers

or equivalent as provided in the
Magna Carta for Teachers, plus
completion of academic
requirements for Master of Arts;
and
6.3.2.5.2.4 At least 30 points in leadership,

potential and achievement; or
has been a demonstration
teacher in the division level plus
20 points in leadership and
potential, provided the activities
or accomplishments listed for
this purpose had not been
credited or used for similar
promotions.
6.3.2.5.3 Master Teacher III
6.3.2.5.3.1 Master Teacher II;
6.3.2.5.3.2 M.A. in education or equivalent;
The following are considered

M.A. equivalent:
• Bachelor’s degree for

teachers or equivalent plus
20 years experience and at
least 20 M.A. units;
• Bachelor’s degree for

teachers or equivalent plus
at least 20 graduate units
and at least 18 credit
allowances.
6-13
6.3.2.5.3.3 Very satisfactory performance

rating as Master Teacher II; and

potential and achievement,
provided the activities or
accomplishments cited for this
purpose had not been credited
for an earlier promotion.
6.3.2.5.4 Master Teacher IV
6.3.2.5.4.1 Master Teacher III;
6.3.2.5.4.2 At least an M.A. in Education,

M.A. in Teaching or Masters in
Education;
6.3.2.5.4.3 Outstanding performance rating

as Master Teacher III; and

potential, and achievements
provided the accomplishments
and achievements cited for this
purpose had not been credited
for an earlier promotion.
Requests for reclassification of teaching positions to

Master Teacher I and from Master Teacher I to Master
Teacher II shall be supported by the plantilla and the
pertinent evaluation documents. It shall then be
reviewed and verified by the DBM RO concerned,
subject to the budget rules and regulations on release
of funds prescribed under National Budget Circular No.
303 and National Compensation Circular No. 24,
respectively.
6.3.3 School Administration Career Line
The second career line is school administration which covers Head

Teachers and School Principals.
6.3.3.1 Item E (12), Section 7, Chapter I of Republic Act (RA)

9155. provides that the selection, promotion and
designation of school heads shall be anchored on the
6-14
principles of merit, competence, fitness and equality,

rather than on the number of teachers/learning
facilitators and learners in the school.
6.3.3.2 Applicants for Head Teacher and Principal positions

must possess executive and managerial competence, in
addition to the following criteria:
6.3.3.2.1 Performance
6.3.3.2.2 Experience and Outstanding Accomplishments
6.3.3.2.3 Education and Training
6.3.3.2.4 Potential
6.3.3.2.5 Psycho-social Attributes and Personality Traits
6.3.3.3 Promotion to higher Head Teacher (HT) and Principal

positions shall be an open ranking basis where merit
and fitness are the main consideration and not the
position.
6.3.3.4 The detailed guidelines on the selection, promotion and

designation of school heads are provided under DepEd
Administrative Order (AO) No. 85, s. 2003 dated
November 27, 2003 (Annex B).
6.3.3.5 The modified qualification standards for Head Teacher

and Principal positions are prescribed under Civil Service
Commission (CSC) Resolution No. 040863 promulgated
on July 28, 2004 (Annex C).
6.4 Compensation Benefits of Teachers
6.4.1 Honoraria for Teaching Overload
Section 13 of RA No. 4670 (Magna Carta for Public School

Teachers) provides that the actual classroom teaching hours for a
teacher shall not be more than 6 hours per day or 30 hours per
week. The number of teaching hours is designed to give teachers
ample time for preparation of lesson plan, correction of exercises
and other work incidental to their normal teaching duties.
Teaching hours in excess thereof are paid honoraria. The rates,
6-15
which shall be based on the Prime Hourly Teaching Rate (PHTR),

shall be computed in accordance with the following formula:
AR AR
PHTR = ------- T = --------- 1.25 = 0.000781 AR
W 1,600
Where:
AR = Annual salary rate of each teacher proposed to be paid

honoraria
W = Total teaching hours (This is computed at 40 hours/week

multiplied by 40 weeks or 1, 600 hours.)
T = 1.25 or 125% of the teacher’s remuneration for services

in excess of 6 hours actual teaching per day but not more
than 2 hours.
6.4.2 Proportional Vacation Pay
6.4.2.1 Among the benefits unique to public school teachers is

the proportional vacation pay (PVP) whereby teachers
are paid during the Christmas break and the summer
vacation.
6.4.2.2 Teachers who rendered continuous services in a school

year without incurring absences without pay of more
than 1 ½ days are entitled to full salaries during
Christmas and summer vacation.
6.4.2.3 Those incurring absences without pay of more than 1

½ days are still entitled to PVP, computed in proportion
to the number of days they have served during the
school year.
6.4.2.4 Teachers earn service credits when they render

authorized services during the vacation period,
Saturdays, Sundays and holidays in the course of the
regular school year.
6.4.2.5 The service credits earned by teachers may be used to

offset absences of teachers due to illness or to offset
proportional deduction in PVP.
6-16
6.4.3 Hardship/Special Hardship Allowance
6.4.3.1 Hardship Allowance, as provided under Section 19 of RA

No. 4670, is given to all teachers who are assigned to
hardship posts whether resident or transient, on regular
or temporary status of employment.
6.4.3.2 Hardship posts are public schools that are accessible

only by hiking, animal ride or banca ride, partly or
wholly. Schools that are directly accessible by
motorized land or water transport do not qualify as
hardship posts.
6.4.3.3 Special hardship allowance is granted to teachers

assigned to handle multi-grade classes.
6.4.3.4 A multi-grade teacher is defined as a public school

teacher handling a class of two or more grades.
Combined or multi-grade classes may be allowed at the
primary level, from Grades I to IV, if the school age
population for a given grade cannot meet the minimum
requirement of 15 pupils per class.
6.4.3.5 The hardship/special hardship allowance shall not

exceed 25% of the basic pay of the teacher, and is in
lieu of hazard duty pay.
6.4.4 One Salary Grade Increase for Retiring Public School

Teachers
6.4.4.1 As provided under Joint DECS, CHED, GSIS and DBM

Circular No. 1, series of 1997, all incumbents of public
school teacher positions are entitled to one (1) salary
grade increase on the last day of service for retirement
benefit purposes. Similarly covered are positions which
fall within the purview of a public school teacher as
defined under Section 2 of RA No. 4670 and as
amended/modified by RA No. 6758.
6.4.4.2 The one salary grade increase shall take effect on the
last day of the service of the retiring public school
teacher. The salary of the retiring teacher shall be
adjusted upward by one salary grade at the same step
of his/her previously assigned salary grade.
6-17
Annex A
Flowchart for Processing ERFs
Schools Division Initiative
Teacher Department of Education (DepEd)

Schools Division (SD) Regional Offices DBM RO
(RO)
Identifies teachers
with 20 or more
years of teaching
service
Prepares Certification as
to names of qualified
teachers
Next Budget Certification
Cycle
Determines if within Determines if retiring

cut off date during the year
Within the
cut off
date?
No No Retiring
during the
year?
Yes
Prepares the Yes

requests for ERF
implementation Endorses request
Certification and
endorsement letter
Next Budget
Cycle
Transmits DBM Funds

disapproval available?
No
Yes
Prepares NOSCA and

NOSA NOSCA/ NOSCA/ Prepares NOSA SARO; Modification
NOSA NOSA effected in the GMIS
NOSCA/
SARO
Receives
salary
adjustment
6-18
Annex A-I
Flowchart for Processing ERFs
Teacher’s Initiative
Teacher Department of Education Regional

(DepEd) DBM RO
Offices
Schools Division (SD) (RO)
Prepares and
submits ERF Pre-evaluates the Post-audits the ERF
ERF
Certification
No Required
Letter Informs the teacher
points
met?
Letter
Prepares yes
Certification as to
names of qualified
teachers Certification
Determines if Determines if
within cut off retiring during
date? the year?
Within
the cut
off date
No
No
Retiring
Yes during
Ye the year
Prepares the Yes

requests for ERF
implementation Endorses
request
Certification and
endorsement letter
Transmits DBM Funds

available?
disapproval No
Yes
NOSA
NOSCA/ Prepares Prepares NOSCA and
NOSA NOSCA/
NOSA SARO; Modification
NOSA NOSCA/
effected in the GMIS
SARO
Receives
salary
adjustment
6-19
Annex B
REPUBLIKA NG PILIPINAS
REPUBLIC OF THE PHILIPPINES
KAGAWARAN NG EDUKASYON
DEPARTMENT OF EDUCATION
Dep Ed Complex, Meralco Ave., Pasig City, Philippines
Tanggapan ng Kalihim
Office of the Secretary
DepEd ORDER November 27, 2003

No. 85 s. 2003
GUIDELINES ON THE SELECTION, PROMOTION

AND DESIGNATION OF SCHOOL HEADS
TO: Undersecretaries
Assistant Secretaries
RegionaL Directors
Schools Division/City Superintendents
Heads, Public Elementary and Secondary Schools
1. Pursuant to the Implementing Rules and Regulations of R.A. 9155, the selection,
promotion and designation of school heads shall be based on merit, competence,
fitness and equality. It is based on these principles that the enclosed guidelines are
hereby issued.
2. Immediate dissemination of and compliance with this Order is directed.
(SIGNED) EDILBERTO C. DE JESUS

Secretary
Encl.:
As stated
Reference
DepEd Order No. 1, s. 2003
Allotment: 1 __ (D.O. 50-97)
To be indicated in the Perpetual Index

under the following subjects:
OFFICIALS
POLICY
PROMOTION
6-20
GUIDELINES ON THE SELECTION, PROMOTION

AND DESIGNATION OF SCHOOL HEADS
I. Leadership Framework
Pursuant to Section 6.1, Rule VI of the Implementing Rules and Regulations of Republic
Act No. 9155 (Governance of Basic Education Act of 2001) there shall be a school head for all
public elementary and secondary schools or a cluster thereof.
A school head is a person responsible for the administrative and instructional

supervision of the school or cluster of schools. As such, a school head is expected to possess
the following leadership dimensions:
1. Education Leadership. The ability to lead in crafting a shared school vision

including the development of curriculum policies and practices which provide
success for all students;
2. People Leadership. The ability to work with various stakeholders; develop

effective relationships with diverse individuals and groups; inspire the respect and
cooperation of people and promote the development and effectiveness of people
within the organization;
3. Strategic Leadership. The ability to expire complex issues from a global

perspective, to manage an educational enterprise, to focus resources and motivate
people in the realization of the shared school vision.
It is within the framework of leadership that the succeeding guidelines on the selection,
promotion, and designation of school heads have been formulated.
II. Basic Policies
1. The selection, promotion and designation of school heads shall be anchored on

the principles of merit, competence, fitness and equality.
2. Applicants for Head Teacher and Principal positions must possess executive and
managerial competence, in addition to the following criteria:
i. Performance
ii. Experience and Outstanding Accomplishments
iii. Education and Training
iv. Potential
v. Psycho-social Attributes and Personality Traits
Annex 1 presents the details on these criteria.
3. Policies pertaining to Principals
3.1 Aspirants for Principalship must pass a test to be considered for selection
and promotion.
6-21
a. To qualify for the test, the aspirant must be any of the following:
¾ Master Teacher I for at least two (2) years

¾ Master Teacher II for at least one (1) year
¾ Head Teacher for at least one (1) year
¾ Teacher-in-Charge for at least two (2) years
¾ Teacher III for at least three (3) years
¾ Teacher II for at least four (4) years
¾ Teacher I for at least five (5) years
b. The test shall serve as a mechanism for evaluating the aspirants in

terms of the 3-dimensional leadership qualifications. It may consist of
paper & pencil, simulation, etc.
c. The Department Central Office will set the standards for testing.
d. Test development and quality assurance will be provided by the

Regional Office. The test administration will be division-based.
3.2 Those who pass the test shall form the pool of qualifiers from which shall
be drawn those who will undergo the training for Principalship.
3.3 Pending the development of the test, those who have successfully
completed the Basic School Management Course (BSMC) and the Strategic
Management and Instructional Leadership Course for School Administrators
(SMILE-CSA) being conducted by the National Educators Academy of the
Philippines (NEAP) will be exempted from the test requirement for a one
year period reckoned from the date of the issuance of this Order.
3.4 The ranking of candidates for Principal position shall be open to all
qualified applicants/candidates.
3.5 The appointment of a school principal shall be non-station specific.
4. Policies pertaining to Head Teachers
4.1 Promotion to higher Head Teacher positions shall likewise be on an open

ranking basis.
4.2 The ranking of candidates to a Head Teacher position shall be open to all
qualified applicant/candidates.
5. Policies pertaining to Teacher-in-Charge
5.1 The Schools Division Superintendent shall designate Teachers-In-Charge.
5.2 To be designated as Teacher-In-Charge, a teacher must have teaching

experience of at least three (3) years.
6-22
III. Computation of Points
1. In computing the number of points for purposes of ranking the Head

Teacher/Principal, a specific number of points is assigned to each criterion as
follows:
Criteria Maximum No. of Points Total
Performance Rating 40 40
Experience/Outstanding
Accomplishments 10/25 35
Education/Training 10/10 20
Potential 2.5 2.5
Psychosocial attributes and

Personality traits 2.5 2.5
Total 100
2. In the evaluation of accomplishment/s, the following matrix is suggested.
Outstanding Maximum
Measures
Accomplishment/s No. of Points
Outstanding Employee Award 5
Innovations 5
Research and Dev. Projects 4
Publication/Authorship See Annex II 4
Consultancy/Resource 4
Speakership
Linkages & Resource 3

Mobilization
TOTAL 25
Annex II presents the details on computation of points.
6-23
Annex I
Following are the basic qualifications required of:
I. Head Teacher
Criteria HTI HTII HTIII HTIV HTV HTVI
Education BEEd/BSE or BEEd/BSE or BEEd/BSE or BEEd/BSE or BEEd/BSE or BEEd/BSE or

its equivalent its equivalent its equivalent its equivalent its equivalent its equivalent
or Bachelors or Bachelors or Bachelors or Bachelors or Bachelors or Bachelors
degree with degree with degree with degree with degree with degree with
18 professio- 18 professio- 18 professio- 18 professio- 18 professio- 18 professio-
nal education nal education nal education nal education nal education nal education
units units units units units units
Training 8 hrs. of 8 hrs. of 8 hrs. of 8 hrs. of 8 hrs. of 8 hrs. of

relevant relevant relevant relevant relevant relevant
training training training training training training
Experience 1 year as TIC

or 3 yrs.
Teaching 1 year as HT 2 years as HT 3 years as HT 4 years as HT 5 years as HT
experience
Performance VS for the last VS for the last VS for the last VS for the last VS for the last VS for the last
3 rating 3 rating 3 rating 3 rating 3 rating 3 rating
periods periods periods periods periods periods
Note: Promotion to higher Head Teacher (HT) positions shall be on an open ranking basis where merit
and fitness shall be the main consideration and not the position
II. Principal
Criteria PI PII PIII PIV
Education BEEd/BSE with 18 pro- BEEd/BSE + 6 units BEEd/BSE + 6 units BEEd/BSE + 9 units
fessional units in educa- of Management of Management of Management
tion or its equivalent
Training 8 hrs. of relevant training 8 hrs. of relevant 8 hrs. of relevant 8 hrs. of relevant
training training training
Experience MT I for at least 2 yrs.; or 1 yr. as Principal 1 yr. as Principal 1 yr. as Principal
MT II for at least 1 yr.; or
HT for at least 1 yr., or
TIC for at least 3 yrs.; or
TII for at least 4 yrs.; or
TI for at least 5 yrs.
Performance VS for the last 3 yrs. VS for the last 3 yrs. VS for the last 3 yrs. VS for the last 3
yrs.
Note: For Head Teacher and Principal: Training credited in the previous promotion will not be
considered in succeeding promotion.
6-24
Annex II
COMPUTATION OF POINTS
I. Performance Rating (40 points)
Numerical Rating result multiplied by forty (40) per cent
II. Experience (10) points
Relevant experience consists of the performance of duties and functions relevant to the
next higher position over a period expressed in years with every year given a point but
not to exceed ten (10) points equivalent to 10 years.
III. Outstanding Accomplishments (25) points
A. Outstanding Employee Award (5) points
Awardee in the school - 1 pts.

Nomination in the division/awardee in the district - 2 pts.
Nomination in the region/awardee in the division - 3 pts.
Nomination in the Department/awardee in the region - 4 pts.
National awardee (Kapwa Award/Pagasa Award/
Presidential Award) - 5 pts.
B. Innovations (5 points)
Conceptualized an innovative work plan and properly

documented and approved by immediate chief and
attested by authorized regional/division official - 1 pt.
Implementation of work plan has been started - 2 pts.
Work plan has been implemented with documented
outputs - 3 pts.
Work plan or essential parts thereof adopted for

wider implementation - 5 pts.
C. Research and Development Projects (5 points)
Conducted research at other levels - 3 pts.

Conducted research at the other school level - 4 pts.
Conducted research at the division level - 5 pts.
D. Research and Development Projects (5 points)
Sole Authorship of a book - 5 pts.

Co-authorship of a book - 4 pts.
(Shall be divided by the number of authors)
Articles published - 1 pt.
(Per article but not to exceed 4 pts.)
6-25
E. Consultancy/Resource Speakership in Training/Seminars/

Workshops/Symposia (5 points)
District level - 1 pt.

Division level - 2 pts.
Regional level - 3 pts.
National level - 4 pts.
International level - 5 pts.
IV. Education and Training (20 points)
A. Education (10 points)
Bachelors degree in Education - 4 pts.

Ma units
18 units - 6 pts.
24 units or completion of academic requirements - 8 pts.
MA degree - 10 pts.
B. Training (10 points)
Participant in 3 or more training activities

For at least 2 days - 2 pts.
Co-chairmanship of a technical committee - 4 pts.
Chairmanship of a technical committee - 6 pts.
Co-chairmanship of a planning committee - 8 pts.
Chairmanship of a planning committee - 10 pts.
V. Potential (2.5 points)
VI. Psychosocial attributes and physical characteristics (2.5 points)
6-26
Annex C
DE JESUS, Edilberto C.
Re: Qualification Standards for Head
Teacher I to III and Principal I to IV (For
Elementary School); Teacher I to VI and
Principal I to iv (For Secondary School)
Positions in the Department of Education
x----------------------------------------------------------x
RESOLUTION NO . 040863
Secretary Edilberto C. De Jesus of the Department of Education (DepEd) requests the

modification of its 1995 approved qualification standards for the following positions:
For Elementary School For Secondary School
Head Teacher I to III Head Teacher I to VI

Principal I to IV Principal I to IV
Secretary De Jesus stated that the modification is anchored under DepEd’s Guidelines
on the Selection, Promotion and Designation of Schools Heads under DepEd Order No. 85, s.
2003 pursuant to RA 9155, otherwise known as the Basic Education Act of 2001. Said Act
provides, among other things, that the selection, promotion and designation of school heads
shall be based on merit, competence, fitness and equality. He likewise stated that that the
proposed modified requirements are not lower than those provided under the CSC Qualification
Standards.
Policy No. 2, Part I – General Policies of CSC MC No. 030962 dated September 12, 2003
specifically the 3rd paragraph provides that “Agencies are encouraged to set specific or higher
standard for their positions. These standards shall be submitted to the Commission for
approval, and once approved they shall be adopted by the Commission as qualification
standards in the attestation of appointments of the agency concerned.” (Underscoring
supplied).
An evaluation of DepEd’s proposed modified qualification standards vis-à-vis the

approved minimum qualification standards of positions as provided in the 1997 Revised
Qualification Standards Manual shows that the proposed modified qualification standards are
higher.
WHEREFORE, foregoing premises, considered, the Commission Resolves to approve the

modified qualification standards of the following positions in the Department of Education:
POSITION
SG LEVEL EDUCATION EXPERIENCE TRAINING ELIGIBILITY
TITLE
For Elementary School
Head 14 2 Bachelor’s degree 1 year as 8 hours of RA 1080

Teacher II in Elementary or Head Teacher relevant
(Teacher)
Bachelor’s degree training
with 18 professio-
nal education
units
6-27
POSITION
TITLE
Head 15 2 Bachelor’s degree 2 years as 8 hours of RA 1080
Teacher III in Elementary or Head Teacher relevant
Bachelor’s degree training (Teacher)
with 18 professio-
nal education
units
For Secondary School

Teacher I in Elementary or Teacher-In- relevant
Bachelor’s degree Charge or 3 training (Teacher)
with 18 professio- years teaching
nal education experience
units with appro-
priate field of
specialization

Teacher II in Elementary or Head Teacher relevant
with 18 professio-
nal education
units with appro-
priate field of
specialization

Teacher III in Elementary or Head Teacher relevant
with 18 professio-
nal education
units with appro-
priate field of
specialization

Teacher IV in Elementary or Head Teacher relevant
with 18 professio-
nal education
units with appro-
priate field of
specialization

Teacher V in Elementary or Head Teacher relevant
with 18 professio-
nal education
units with appro-
priate field of
6-28
POSITION
TITLE
specialization

Teacher VI in Elementary or Head Teacher relevant
with 18 professio-
nal education
units with appro-
priate field of
specialization
For Elementary School
Principal I 18 2 Bachelor’s degree MT I for at 8 hours of RA 1080

in Elementary or least 2 yrs.; or relevant
Bachelor’s degree MT II for at training (Teacher)
with 18 professio- least 1 yr.; or
nal education HT for at least
units 1 yr.; or TIC
for at least 2
years; or T III
for at least 3
years; or T II
for at least 4
years; or T I
for at least 5
years
Principal II 19 2 Bachelor’s degree 1 year as 8 hours of RA 1080

in Elementary or Principal relevant
with 18 professio-
nal education
units + 6 units of
Management
Principal 20 2 Bachelor’s degree 2 years as 8 hours of RA 1080

III in Elementary or Principal relevant
with 18 professio-
nal education
units + 6 units of
Management
Principal V 21 2 Bachelor’s degree 3 years as 8 hours of RA 1080

with 18 professio-
nal education
units + 6 units of
Management
6-29
POSITION
TITLE
For Secondary School
Principal I 18 2 Bachelor’s degree MT I for at 8 hours of RA 1080

in Elementary or least 2 yrs.; or relevant
Bachelor’s degree MT II for at training (Teacher)
with 18 professio- least 1 yr.; or
nal education HT for at least
units 1 yr.; or TIC
for at least 2
years; or T III
for at least 3
years; or T II
for at least 4
years; or T I
for at least 5
years
Principal II 19 2 Bachelor’s degree 1 year as 8 hours of RA 1080

with 18 professio-
nal education
units + 6 units of
Management
Principal III 20 2 Bachelor’s degree 2 years as 8 hours of RA 1080

with 18 professio-
nal education
units + 6 units of
Management
Principal IV 21 2 Bachelor’s degree 3 years as 8 hours of RA 1080

with 18 professio-
nal education
units + 6 units of
Management
RESOLVED further, that the above approved qualification standards shall be the bases
of the Civil Service Commission in the attestation of appointments and other personnel actions.
6-30
Let copy of this Resolution be disseminated to all Civil Service Commission Regional and
Field Offices.
Quezon City, July 28, 2004.
(Signed) KARINA CONSTANTINO-DAVID

Chairman
(Signed) J. WALDEMAR V. VALMORES (Signed) CESAR D. BUENAFLOR

Commissioner Commissioner
Attested by:
(Signed) REBECCA A. FERNANDEZ

Director IV
6-31
Chapter 7
Position Classification and Compensation Scheme

for Faculty Positions in State Universities and
Colleges
Prior to the issuance of PD No. 985, State Universities and Colleges (SUCs)
which were exempted from the coverage of the National Position Classification
and Compensation Plans adopted individual staff credentials and qualifications,
position classification and pay plans. The disparities in pay and compensation
among similar comparable positions brought about by the different schemes
adopted by the various SUCs gave rise to demoralization and dissension among
the ranks of faculty members and further complicated the process of
compensation administration in SUCs.
When the SUCs were placed within the ambit of PD No. 985, the need to
rationalize the academic ranks/salaries/advancement of faculty members in
SUCs became apparent due to the application of varied faculty evaluation
instruments. As early as 1982, the Philippine Association of State Universities
and Colleges (PASUC), together with the DBM, started deliberating on a scheme
of upgrading/promoting qualified and deserving faculty members through a
process of objective evaluation. This paved the way to the development and
adoption of a Common Criteria for Evaluation (CCE) across programs and
disciplines which aimed to rationalize academic ranks and salaries.
National Compensation Circular (NCC) No. 33 was issued on January 2, 1985

with retroactive effect on July 1, 1984. This Circular established the position
classification and compensation scheme for faculty positions in SUCs. Since
then, amendments of certain provisions including improvements of the CCE
have been introduced through NCC No. 68, NCC No. 69 and the latest, National
Budget Circular (NBC) No. 461. NBC No. 461 is a revision and an update of NCC
No. 69 which was exclusively for the faculty positions in SUCs. Under NBC No.
461, Commission on Higher Education (CHED)-supervised higher education
institutions (HEIs), Technical Education and Skills Development Authority
(TESDA)-supervised Technical Education Institutions (TEIs) and SUCs are
covered.
7.1 Coverage
The Position Classification and Compensation Scheme For Faculty Positions

(PCCSFP) covers all teaching positions involved in instruction, research and
extension activities in all SUCs, CHED-Supervised HEIs and TESDA-
Supervised TEIs.
7-1
7.2 Common Criteria for Evaluation
As part of the PCCSFP, a CCE is established which shall be the primary

basis for recruitment, classification and promotion of a faculty. The CCE is
a set of factors consisting of services and achievements which establishes
the relative performance of a faculty in the institution for the period of
evaluation through the application of a point system in determining faculty
rank and sub-rank. The new CCE which was developed by the CHED and
PASUC places more emphasis on advancement and performance rather
than on educational qualifications.
7.2.1 The CCE Concept and Objectives
To implement a standardized PCCSFP, it is imperative for all faculty

to pass through a CCE that can distinguish the different
faculty ranks within institutions, across institutions and across
disciplines and fields. The CCE has the following objectives:
7.2.1.1 To standardize faculty ranks among institutions;
7.2.1.2 To rationalize the salary rate appropriate to a faculty

rank;
7.2.1.3 To have an instrument for generating the faculty profile

across SUCs, HEIs and TEIs;
7.2.1.4 To serve as basis for policy decisions for accelerated

faculty development; and
7.2.1.5 To motivate a faculty to upgrade his/her rank and

compensation by improving his/her academic
qualifications, achievements and performance.
7.2.2 The Point System
The CCE point system in determining faculty rank and sub-rank is

as follows:
7.2.2.1 Major Factors and Maximum Points
Maximum
Factors Number of
Points
Educational Qualification 85
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Classification and Compensation Scheme for Faculty Positions
Experience and Professional Services 25
Professional Development, Achievement 90

and Honors
TOTAL 200
The specific factors and guidelines for determining credit

points are in Annex A of this Chapter.
7.2.2.2 Point Allocation Under NBC No. 461
Faculty Rank Sub-Rank SG Point Bracket
I 12 65 – Below
Instructor II 13 66 – 76
III 14 77 – 87
I 15 88 – 96
Assistant II 16 97 – 105
Professor III 17 106 – 114
IV 18 115 – 123
I 19 124 – 130
II 20 131 – 137
Associate III 21 138 – 144
Professor IV 22 145 – 151
V 23 152 – 158
I 24 159 – 164
II 25 165 – 170
Professor III 26 171 – 176
IV 27 177 – 182
V 28 183 – 188
VI 29 189 – 194
College/University 30 195-200
Professor
7.2.2.2.1 The highest rank that can be allowed in HEIs

and TEIs is Associate Professor V.
7.2.2.2.2 The quota for the rank of Professor shall be

20% of the total number of faculty positions
of each SUC.
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7.3 Qualitative Contribution Evaluation
7.3.1 In addition to the CCE, promotions to higher rank and sub-rank

shall be subject to Qualitative Contribution Evaluation (QCE). QCE
is the process of determining the eligibility of a faculty candidate for
the particular rank and sub-rank indicated by the CCE.
7.3.2 Qualitative Contribution (QC) is the continuous improvement

towards excellence by a faculty member in all four (4) functional
areas of the institution, namely: instruction, research, extension
and production.
7.3.2.1 For those seeking promotion to the higher sub-rank of

Instructor and Assistant Professor, the QC shall be on
Teaching Effectiveness.
7.3.2.2 For those seeking promotion to the Associate Professor

rank, the QC shall be in any two (2) functional areas
chosen by the candidate prior to any assessment year.
7.3.2.3 For those seeking promotion to the Professor rank, the

QC shall be in any three (3) functional areas chosen by
the candidate prior to any assessment year.
7.3.3 For the QC of Instructors and Assistant Professors, a common

evaluation instrument is prepared by a joint committee of CHED,
PASUC and TESDA. The evaluation is done by the faculty
concerned, his/her peers, his/her supervisor and his/her student
beneficiaries.
7.3.4 For the QC of Associate Professors and Professors, a common

evaluation instrument is prepared by a joint committee of CHED
and PASUC. The evaluation is done by the ratee’s client, by the
direct supervisor, by the stakeholders in the completed projects,
and by his/her external and internal communities.
7.4 Accreditation
Accreditation is a screening process for validating the eligibility of a faculty
candidate to the rank of Associate Professor or Professor. The process
involves written exams and interviews, particularly on substantive issues/
questions related to the field of specialization/ discipline of the candidate.
7-4
7.5 Determination of Appropriate Faculty Rank and Salary
7.5.1 A faculty member who is assigned on the basis of the CCE and QCE
to a sub-rank higher than his/her present rank, or subsequently
promoted through presidential discretion, shall be given the rank
and salary corresponding to that higher rank.
7.5.2 A faculty member who merited a higher rank based on the CCE but
assigned a lower rank based on the QCE shall be given the rank
and salary corresponding to that lower rank.
7.5.3 In the initial implementation of NBC No. 461, a faculty member who
is assigned on the basis of the CCE and QCE to a sub-rank lower
than his/her present rank shall retain his/her present rank and
salary.
7.6 Presidential Discretion

The Head of the SUC, HEI or TEI, may subsequently grant promotions to
faculty members for meritorious performance, provided that the aggregate
number of sub-ranks involved in all such promotions shall not exceed 15%
of the total number of current authorized full-time faculty members
annually, provided further that such upward movements shall be limited
to the highest sub-rank of the assigned rank as indicated in the CCE.
Upward movements to Professor ranks in SUCs and to Associate Professor
ranks, in HEIs and TEIs shall similarly be subject to prior evaluation by the
Accreditation Committee, to the requirement for appointment to such
ranks, and to the quota system prescribed for Professors, in the case of
SUCs.
7.7 Appointment to Ranks Below Professor
7.7.1 Instructor I – Entry level, total of CCE points is 65 or less.
7.7.2 Appointment to the ranks of Instructor II to Assistant Professor IV

shall be subject to the following requirements:
7.7.2.1 CCE points of at least 66 for the higher sub-rank of the

Instructor position and at least 88 for the Assistant
Professor position;
7.7.2.2 Earned MA degree for Assistant Professor II to IV; and
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7.7.2.3 QC in instruction, otherwise known as Teaching

Effectiveness.
7.7.3 Appointment to the rank of Associate Professor shall be subject to

the following requirements:
7.7.3.1 CCE points of at least 124;
7.7.3.2 Earned MA degree;
7.7.3.3 QC in at least 2 of the 4 functional areas; and
7.7.3.4 Accreditation by a committee of experts constituted by

PASUC for candidates entering the Associate Professor rank
for the first time; in the case of those in HEIs and TEIs.
7.8 Appointments to Professor Ranks
7.8.1 The minimum criteria for appointment to full Professor ranks are as
follows:
7.8.1.1 Education - This refers to the relevant doctoral academic

degree from a college or university of recognized
standing either locally or abroad. However, in highly
meritorious and extremely exceptional cases as in areas
of specialization or fields of discipline where there is a
dearth of doctoral programs or the same are not readily
available, the foregoing doctoral degree requirement may
be waived.
7.8.1.2 Productivity - This refers to significant outputs,

contributions and applications and/or use of research
results in commercial or industrial projects in relevant
fields of applied and natural sciences and includes the
following:
7.8.1.2.1 Scientific articles in publications of

international circulation, and other works of
similar nature;
7.8.1.2.2 Discoveries, inventions and other significant

original contributions;
7.8.1.2.3 Books, monograms, compendiums and major

bodies of published work;
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7.8.1.2.4 Transformation of research recommendations

to public policy benefiting the country’s
training of science graduates or significant
contribution to manpower development
and/or science and technology, practical
application of research results in industrial or
commercial projects and/or undertakings; and
7.8.1.2.5 Such other criteria which the Accreditation

Committee may require as may be warranted
by new developments in science and
technology.
7.8.1.3 Professional standing - This refers to the level of

acceptance and recognition in the academic community in
terms of professional, moral and ethical integrity.
7.8.2 The appointment to Professor ranks shall be subject to the

following requirements:
7.8.2.2 Earned doctorate, in the case of Professors IV to VI;

where a doctorate is not normally part of career
preparation, or where such doctoral program is rare as
determined by CHED, the doctoral requirement may be
waived, provided that the candidate has an appropriate
master’s degree, and has earned 20 points in the
following areas:
7.8.2.2.1 Books, monograms, compendiums, and major

bodies of published work;
7.8.2.2.2 Scientific articles in publications of

international circulation, and other works of
similar nature;
7.8.2.2.3 Discoveries, inventions and other significant

original contributions;
7.8.2.2.4 Research recommendations transformed to

public policy benefiting the country;
7.8.2.2.5 Supervision, tutoring or coaching of graduate

scientists and technologists; and
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7.8.2.2.6 Research results applied or utilized in

industrial and/or commercial projects or
undertaking.
7.8.2.3 QC in at least 3 of the 4 functional areas; and
7.8.2.4 Accreditation by a committee of experts constituted by

PASUC for candidates entering the Professor rank for the
first time.
7.8.3 Limitations
The following guidelines set the limitations for appointment to

Professor ranks:
7.8.3.1 The number of Professor positions shall not exceed 20%

of the total number of faculty positions in the SUC
concerned; and
7.8.3.2 An applicant who fails in the accreditation process

including those who qualify as Professors but are in
excess of the quota for Professor ranks shall be appointed
to the position of Associate Professor V.
7.9 Appointments to College/University Professor Ranks
7.9.1 The following are deemed qualified for appointment as College/

University Professors:
7.9.1.1 Deserving faculty members, occupying Professor positions

who satisfy the qualification for accreditation under item
7.9.5 hereof and duly accredited by the PASUC
Accreditation Committee;
7.9.1.2 SUC Presidents and Vice-Presidents or their equivalents

who opt to receive the basic salary pertaining to their
assigned academic rank under the CCE, and those who
opt to return to teaching due to their
resignation/retirement not for cause before the expiration
of their fixed terms of office provided that they have
complied with the requirements prescribed for
College/University Professors; and
7.9.1.3 SUC Presidents/Vice-Presidents who opt to return to

teaching after the expiration of their fixed terms of office
7-8
may be appointed as College/University Professors

subject to the provisions of NBC No. 461, insofar as
pertinent, in addition to the slots available for deserving
faculty members.
Thereafter, any vacancy arising from the retirement/

resignation of a faculty member appointed as
College/ University Professor, shall not be filled until
such time that the SUC President/Vice-President similarly
appointed as College/University Professor has
retired/resigned from the government service.
7.9.2 The following are the requirements for appointment as

College/University Professor:
7.9.2.2 Earned doctorate;
7.9.2.3 Professorial accreditation, in case of a faculty;
7.9.2.4 A pass from a Screening Committee, duly constituted by

PASUC; and
7.9.2.5 QC in at least 3 out of the 4 functional areas.
7.9.3 Limitations
The following guidelines set the limitations for appointment as

College or University Professor:
7.9.3.1 Only one position of College Professor, per college, is

authorized for every 6 years, the total of which shall not
exceed the number of authorized colleges and external
campuses of the respective SUC;
7.9.3.2 Only one position of University Professor, per University,

is authorized for every 6 years, the total of which shall
not exceed 5% of the total number of accredited full
professors in the university concerned; and
7.9.3.3 The classification of existing College Professor positions

at SG-29 whose incumbents were appointed based on the
previous point allocation under NCC No. 69 shall be
coterminous with the incumbents. Hence, upward
movements of incumbents of positions of College
7-9
Professor, SG-29, to the new rank of College/University

Professor, SG-30, is not automatic. The salary grade of
incumbents thereof who were accredited under NCC No.
69 shall remain at SG-29 until they qualify as
College/University Professor based on the point allocation
under NBC No. 461.
7.9.4 Screening Process
Upon recommendation by the institution head concerned, all

candidates for the rank of College/University Professor shall
undergo screening by an independent body, to be organized by
the Philippine Association of State Universities and Colleges
(PASUC).
7.9.5 Qualifications for Accreditation as College/University Professor
7.9.5.1 He/She must be an outstanding scholar and scientist as

shown in the quality of his/her publications and
researches in his/her principal field of study and in allied
fields; or he/she must have manifested outstanding
performance in his/her executive leadership role.
7.9.5.2 He/She must have expert knowledge in one field or

division and familiar with at least one other subject within
another division.
7.9.5.3 He/She must be known for intellectual maturity and

objectivity in his/her judgment.
7.9.5.4 He/She must have a high reputation among his/her

colleagues and other scholars for his/her mastery of the
subject of his/her specialization.
7.9.5.5 Recognition and esteem could be manifested in the

following ways:
7.9.5.5.1 His/her contributions to the advancement of

his/her fields of specialization are recognized
by colleagues, here and abroad.
7.9.5.5.2 He/She is published in the most respected

learned journals in his/her field of
specialization.
7.9.5.5.3 His/Her works are worldly acclaimed and
7-10
provoke spirited discussions among scholars,

often from various disciplines.
7.9.5.5.4 He/She is often invited to other universities

and scholarly gatherings for the originality of
his thoughts.
7.9.5.5.5 He/She is accorded various forms of honors

(awards, chairs, titles, etc.).
7.10 Conversion of Teaching and Teaching-Related

Positions in CHED-supervised HEIs and TESDA-
supervised TEIs Integrated into SUCs
7.10.1 To preclude position downgrading implications, the existing

teaching/teaching related positions integrated with the staffing
pattern of newly converted SUCs shall be initially
converted/retitled to their lateral equivalent SUC faculty
positions based on salary grades without the need for prior
evaluation under NBC No. 461.
Examples:
From To
Secondary School Principal II, SG-19 Associate Professor I, SG-19

Master Teacher II, SG-17 Assistant Professor III, SG-17
Head Teacher III, SG-15 Assistant Professor I, SG-15
7.10.2 All positions of Teacher I, SG-10, Teacher II, SG-11, and

Teacher III, SG-12, shall be automatically converted/retitled to
Instructor I, SG-12.
7.10.3 The initial faculty ranks shall serve as bases for future
movements/promotions to higher level positions. Should the
ensuing evaluation under NBC No. 461 result in the
downgrading of the initial ranks, the faculty concerned shall
retain his/her assigned rank and salary grade at conversion until
he/she qualifies for a higher rank.
7.10.4 Teaching positions handling laboratory classes in teacher

education courses may be converted/retitled to faculty positions
provided they serve as critic teacher in such teacher education
courses and each attends to at least three (3) practicum
students at the senior level.
7-11
7.11 Role of Agencies in the Implementation of NBC No.

461
7.11.1. Role of SUCs, HEIs and TEIs
The heads of SUCs, HEIs and TEIs shall submit the Personal
Services Itemization and Plantilla of Personnel (PSIPOP).
reflecting the modifications in rank/sub-rank and the

corresponding salary adjustments of faculty members concerned
together with the CCE Computer Print-out and pertinent
evaluation documents.
7.11.2. Role of DBM
The DBM Regional Offices (ROs) shall verify and post-audit the
PSIPOP. The DBM ROs shall then prepare the Notice of
Organization, Staffing and Compensation Action (NOSCA)
reflecting the changes in the rank/sub-rank and salaries of
faculty members concerned in the respective institution.
7.12 Evaluation Cycle
As a matter of policy, the evaluation may be undertaken every odd year

for SUCs. In the case of HEIs and TEIs, the evaluation may be
undertaken every even year.
7.13 Additional Compensation for Faculty
7.13.1 Honoraria for Teaching Overload
Faculty members are entitled to honoraria for services rendered

in excess of the regular teaching load. Honoraria shall be based
on the Prime Hourly Teaching Rate (PHTR) which shall be
computed as follows:
7.13.1.1 For undergraduate program
AR AR
PHTR = --------T = -------- x 1.25 = 0.000781 AR
W 1600
Where:
AR = annual salary rate of each faculty proposed to be paid

honoraria
7-12
W = Total teaching hours (40hrs/week multiplied by 40

weeks or 1600 hrs.)
T = 1.25 or 125% of the faculty’s remuneration for

services in excess of 6 hours of actual teaching per
day but not more than 2 hours
7.13.1.2 For graduate program
7.13.1.2.1 For faculty members with Bachelor’s

degrees and with special vocational
preparation
AR
PHTR = --------- x 1.5 = 0.0012 AR
1,296
7.13.1.2.2 For faculty members with Master’s

degrees
PHTR = 0.0014 AR
7.13.1.2.3 For faculty members with Doctorate

Degrees
PHTR = 0.0015 AR
7.13.1.3 Reduced Teaching Load for Faculty Assigned

with Workload Other than Teaching
In the determination of the load of a faculty who is

given assignments other than teaching, the following
allowable percentage weights are adopted:
• 25% of the official time of faculty members

concerned shall be credited to actual teaching
load; and
• 75% of the official time of faculty members

concerned shall be allotted for workload other than
teaching in connection with research and
extension functions, or as a Dean/Department
Head or Director.
7-13
7.13.2 Representation and Transportation Allowances (RATA)
Faculty members who are designated as Vice- Presidents/Deans/

Directors/Department Heads are authorized RATA based on their
rank equivalence at the rates provided in the annual General
Appropriations Act (GAA).
7.13.2.1 Vice-Presidents
SUC Level Rank Equivalence
4 Bureau Director
3 Assistant Bureau Director
2 Bureau Regional Director
1 Bureau Assistant Regional Director
7.13.2.2 Deans equivalent to Assistant Bureau Regional

Director
7.13.2.2.1 Designated Dean of the Graduate School with

at least a Master of Arts/Master of Science
Program with 15 faculty members.
7.13.2.2.2 Designated Deans of Colleges with at least

four (4) degree programs and a teaching
complement of 40 full-time faculty members.
In case the SUC cannot meet the minimum

number of programs required, it may still be
entitled to a Dean, if it meets the following:
No. of No. of Full-Time

Programs Faculty Members
4 40
3 50
2 60
1 70
7.13.2.3 Directors/Department Heads equivalent to Chiefs

of Division
7.13.2.3.1 Designated Director of Research Services,

with at least P500,000 appropriation for
research service function; when no
authorized research function in the GAA, the
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SUC to have at least 10 research projects

with a total cost of P500,000 per annum.
7.13.2.3.2 Designated Director of Extension Services,

with at least P500,000 appropriation for
extension service function; when no
authorized extension services function in the
GAA, the SUC to have at least 10 extension
services projects with a total cost of P500,000
per annum.
7.13.2.3.3 Designated Director of Auxiliary Services,

provided the SUC has a yearly income from
its operations of at least P60,000 and at least
7 personnel involved in such income
generating projects.
7.13.2.3.4 Designated Director of each satellite campus/

branch/center/institute, duly mandated by
law, provided each campus/branch/center/
institute has a complete administrative staff,
i.e., at least a budget officer, an
accountant/bookkeeper, an administrative
officer/administrative assistant, a supply
officer/property custodian, a cashier/
disbursing officer and other support positions
such as clerks, janitors and security guards
and at least 1,000 students in the tertiary
level.
7.13.2.3.5 Designated Director of Student Affairs

Services for SUCs with at least 4,000 college
students.
7.13.2.3.6 Designated Department Heads of different

departments/colleges, each one having at
least 4 degree programs with each program
differentiated from each other by 33% (the
distinction of the programs to be certified by
the CHED).
7.13.3 Compensation of faculty/non-faculty members designated

as Vice- Presidents (VP)
7.13.3.1 Faculty and non-faculty members who are designated

as VPs shall be entitled to the difference between their
7-15
present salaries and the 1st step of the salary grade of

the VP positions corresponding to the level of the SUCs
concerned. Said salary differentials shall form part of
their actual salaries as designated VPs. The year-end
benefits (YEB) and retirement and life insurance
premiums (RLIP) shall be adjusted accordingly during
their periods of designation.
7.13.3.2 A designated VP who is already receiving a salary

higher than the 1st step of a permanent VP position
shall only be entitled to the corresponding RATA for the
position. In no case shall the designee’s basic salary
plus the salary differential exceed the hiring rate
prescribed for a permanent VP position for the
particular SUC level.
7.13.3.3 The aggregate salary received during the designation

cannot be used as previous salary for purposes of
future appointment. It shall not be considered for
purposes of the computation of terminal leave benefits
(TLB).
7.13.3.4 During the period of designation, the VP shall continue

to be entitled to step increment in his/her regular
position but not as VP. In case his/her step increment in
his/her lower position overtakes the 1st step of the VP
position, he/she shall be allowed to receive the higher
salary.
7.13.3.5 In the event that the designation, being of a temporary

nature, is revoked by the Governing Board of the SUC
concerned, he shall revert to his/her salary in his/her
regular position plus any step increment he/she earned
during the period of designation.
7.13.4 Night Pay of Faculty/Non-Faculty of the Polytechnic

University of the Philippines (PUP)
7.13.4.1 The PUP is authorized by law to compensate its faculty

and non-faculty including those from outside of the
University for night services rendered on top of their
regular services.
The night service is considered as a separate and

distinct program from the regular 8-hour service. The
night pay does not partake of the nature of overtime
7-16
pay which is not part of basic salary. The night pay

partakes more of the nature of basic salary, as a matter
of right for recompense of services rendered in the
night program of the University.
7.13.4.2 The night pay, therefore, is integrated into the basic

salaries of the University’s employees for purposes of
retirement benefits. This authority, however, is
applicable only to PUP.
7.13.5 Step Increment of Faculty Members
7.13.5.1 In cases of promotion or movements from one

rank/sub- rank to another, the step increment earned
by a faculty member in his/her previous faculty rank
cannot be carried over to his/her salary in the higher
level faculty rank. His/Her next step increment shall be
reckoned from the date of his/her appointment to the
higher level faculty rank.
7.13.5.2 In case of conversion of a teaching position to a faculty

rank, the step increment earned by a teacher in his/her
previous position cannot also be carried over to the
converted faculty rank. His/Her step increment shall be
reckoned from the date of his/her appointment to the
newly converted faculty rank.
7-17
Annex A
Specific Factors and Guidelines for Determining Credits Points

Under the Common Criteria for Evaluation
1. Educational Qualifications ----------------------------------- 85 pts.
1.1 Highest relevant academic degree or educational attainment with

the following maximum points credits
1.1.1 Doctorate Degree ………………………………… 85

1.1.2 Master’s Degree …………………………………… 65
1.1.3 LLB and MD ……………………………………...… 65
The MD shall be considered a Doctorate degree if the

holder is teaching in a College of Medicine
1.1.4 Diploma course (above a bachelor’s degree).. 55

1.1.5 Bachelor’s degree (4 years) ……………………… 45
In the case of a Bachelor’s degree which is more than 4

years, additional credit of 5 points is given for every year
over 4 years
1.1.6 Special Courses
• 3-year post secondary course…………………30

• 2-year post secondary course…………………25
1.2 Additional equivalent and relevant degree earned
1.2.1 Additional Master’s degree……………………..…….4

1.2.2 Additional Bachelor’s degree……………………..….3
An additional equivalent and relevant degree earned

related to the present position refers to another degree on
the same level as the advanced degree that the faculty has
already earned.
Relevance is the applicability of the degree to teaching and

to the subjects the faculty is teaching, or the duties and
functions other than teaching which the faculty performs.
7-18
For example, a holder of an M.S. in Math acquired a degree

in M.S. Physics. However, an M.A. holder, who acquired 2
bachelor degrees like A.B., BSE, shall be credited only for
his/her M.A. degree.
1.3 Additional credits earned
1.3.1 For every 3 units earned toward a higher approved degree

course (maximum of 10 pts.) …………………………………1
2. Experience and Professional Services-------------------------------- 25 pts.
The services and experiences of a faculty who is designated to an

administrative position like Vice-President, Dean, Director, etc., shall be
credited only once, whichever is highest, within the period of his/her
designation.
2.1 For every year of full-time academic……………………………… 1

service in a state institution of higher
learning
Academic service refers to teaching in college or doing research

and extension functions.
A year means at least 2 semesters.
Full-time service means the official full-time equivalent load

(FTEL) hours of actual teaching or its equivalent in other functions
approved by the institution’s Board of Regents/Board of Trustees.
State institution of higher learning refers to a chartered SUC,

CHED-Supervised HEI or TESDA-Supervised TEI whose main
function and responsibility is tertiary education and which offers
degree programs.
2.2 For every year of full-time academic……………………………….0.75

service in an institution of higher
learning other than SUCs, CHED-
Supervised HEIs and TESDA-Supervised TEIs;
service in a public or private research institution
Academic service refers to teaching in the tertiary level in an

institution of higher learning which is not a SUC, CHED-Supervised
HEI or TESDA- Supervised TEI, or doing research on a
professional level in a research institution.
7-19
2.3 For every year of administrative designation as:
a. President…………………………………………………….…………..3.0
b. Vice-President………………………………………………………….2.5
c. Dean/Director/School Superintendent……………….………..2.0
d. Principal/Supervisor/Department……………..………….….….1.0
Chairperson/Head of Unit
2.4 For every year of full-time industrial/agricultural/teaching

experience as:
a. Engineer, Plant/Farm Manager…………………………..……..1.5

b. Technician………………………………………………………..…….1.0
c. Skilled Worker…………………………………………………..…….0.5
2.5 For every year of experience as:
a. Cooperating Teacher..………….…………………………………..1.5
b. Basic Education Teacher.….……………………………………….1.0
3. Professional Development Achievement and Honors………………...90 pts.
3.1 Innovations, patented inventions, publications and other creative

works (maximum of 30 pts.)
3.1.1 For every cost and time-saving ……………………………1 to 7

innovation, patented invention
and creative work as well as
discovery of an educational,
technical, scientific and/or
cultural value
Sub-categories under 3.1.1 are as follows:
A. Inventions
These are original patented (or must have patent pending)

works which have direct contribution to education, science and
technology. The basis for the weight is the patent score.
7-20
Criteria Credits
1. If patented Multiply patent score by

weight assigned according
to criterion of utility
2. If patent pending Multiply patent by weight

according to utility
Per invention or discovery the following additional criteria and

point allocations are prescribed:
Commercial utility on:
• an international scale…………………………………………7
• a national scale…………………………………………………5
• institutional level ………………………………………………2
The accrediting bodies for these factors on the international

and national scale are:
• Science and technology …….………………DOST

• Education.………………………………………..DECS/CHED/TESDA
For the institutional level, a University Committee shall be the

accrediting body. The patent paper/document must be
presented to ascertain patent score. Credit points are divided
equally among 2 or more individuals claiming credit for the
same invention.
B. Discoveries
A discovery must be the first of its kind or not of common

knowledge. It shall be the result or product of the research of
an individual or a group of faculty.
Criteria Credits
1. Originality, educational 60% of 7 (0.6 x 7)

impact, documentation
2. Evidence of wide dissemi- 40% of 7 (0.4 x 7)

nation, e.g. exhibits, pub-
lications
7-21
Where there are more than one proponent, the points are to
be divided equally among them. If only one factor, e.g., (1),
is satisfied, credit is awarded only for that factor.
C. Creative work has to satisfy one or more of the following

criteria:
1. Originality 25% of 1 – 7 pts.

2. Acceptability and recognition 25% of 1 – 7 pts.
3. Relevance and value 25% of 1 – 7 pts.
4. Documentation and evidence 25% of 1 – 7 pts.
of dissemination
3.1.2 For every published book, original, edited, or compiled,

copyrighted/published within the last 10 years
a. As original author…….……………………………….3 - 7
b. As co-author………….…………………………………2 - 5
c. As reviewer.….…..………………………………….…1 - 4
d. As translator.……………………………………………1 - 4
e. As editor…….……………………………………………1 - 3
f. As compiler………………………………………………1 - 2
The factors and their weights are:
Textbooks, including Science and Technology and references
Role Tertiary High School Elementary
Single author 7 pts. 5 pts. 4 pts.

Co-author 5 3 2
Reviewer 4 2 1
Translator 4 2 1
Editor 3 2 1
Compiler 2 1 1
3.1.3 For every scholarly research/monograph/educational

technical articles in a technical/scientific/professional
journal
a. International…………………………………………….5
b. National…………………………………………………..3
c. Local……………………………………………………….2
7-22
3.1.4 For every instructional manual/audio-visual material

developed and approved for
use…………………………………………..1-3
Under this item are approved and published sets of

complete modules, laboratory manuals, operation manuals,
workbooks, teaching guides, including software, prototype
and computer-aided instruction materials. Syllabi, flip-
charts, compiled copies of machine-copied documents,
mock-ups are not considered under this item. Those
which can be credited are approved by the department or
college for instructional purposes.
Role Credit
Single author or maker Full

Co-author, co-maker Half
For credits to be granted, as sample of the material and a

certification by the College/Department as to its usefulness
and acceptability for instruction must be presented.
3.2 For expert services, training and active participation in

professional/technical activities (Maximum of 30 pts.)
3.2.1 Training and Seminars (Maximum of 10 pts.)
3.2.1.1 For every training course with a duration of at

least one year (Pro-rated for less than a year and
not to exceed 10 pts.)
a. International…………………………………………..5
b. National………………………………………………….3
c. Local………………………………………………………2
3.2.1.2 For certified industrial, agro-industrial ….1/120h

or fishery training (maximum of 5 pts.)
3.2.1.3 For participation in conferences, seminars,

workshops
a. International…………………………………………..3
b. National………………………………………………….2
c. Local………………………………………………………1
7-23
3.2.2 Expert services rendered (Maximum of 20 pts.)
3.2.2.1 For serving as a short-term consultant/expert in

an activity of an educational, technological,
professional, scientific or cultural nature (foreign
or local) sponsored by the government or other
agencies
a. International………………………………………… 5
b. National……………………………………………….. 3
c. Local……………………………………………………. 2
3.2.2.2 For services rendered as coordinator, lecturer,

resource person or guest speaker in conferences,
workshops, and/or training courses
a. International…………………………………………. 5
b. National……………………………………………….. 3
c. Local……………………………………………………. 2
3.2.2.3 For expert services as adviser in doctoral

dissertations, masteral and undergraduate theses
(maximum of 10 pts.)
a. Doctoral dissertation.……………………………1.00
b. Masteral thesis ……………………………………0.50
c. Undergraduate thesis..…………………………0.25
3.2.2.4 For certified services as reviewer/examiner in the

Professional Regulations Commission (PRC) or in
the Civil Service Commission…………………….…...1
3.2.2.5 For expert services in accreditation work as

member of the Board of Directors, member of
the Technical Committee or Consultant
Group….…………….….1
3.2.2.6 For expert services in trade skill certification….1
3.2.2.7 For every year of service as coach/trainer in

sports or adviser of student organization……....1
3.3 Membership in professional organizations/honor societies and

honors received (maximum of 10 pts.)
7-24
3.3.1 For current individual membership in relevant professional

organization(s)
a. Learned Society
Full member…………………………………………………. 2
Associate member………………………………………… 1
b. Honor Society……………………………………….……… 1
c. Scientific Society……………….………………………….. 1
d. Professional
Officer……………………………… ………………………… 1
Member……………………………………………………….. 0.5
3.3.2 For undergraduate academic honors earned:
Summa Cum Laude……………………………………………. 5

Magna Cum Laude…………………………………………….. 3
Cum Laude……………………………………………………….. 1
3.3.3 Scholarship/Fellowship - This may be degree or non-

degree granting.
a. International, competitive
Doctorate…….……………………………………………… 5
Masteral……………………………………………………… 4
Non-Degree………………………………………………… 3
b. International, non-competitive
Doctorate…….……………………………………………… 3
Masteral……………………………………………………… 2
Non-Degree………………………………………………… 2
c. National/Regional, competitive
Doctorate…….…………………………………………….. 3
Masteral…………………………………………………….. 2
Non-Degree……………………………………………….. 1
d. National/Regional, non-competitive
Doctorate…….……………………………………………. 2
Masteral……………………………………………………. 1
e. Local, competitive or non-competitive
3.4 Awards of distinction received in recognition of achievements in

relevant areas of specialization/profession and/or assignment of
the faculty concerned
7-25
a. International……………………………………………………….. 5
b. National/Regional..………………………………………………. 3
c. Local……………………………………………………………….…. 2
3.5 Community outreach (maximum of 5 points)
3.5.1 For every year of participation in service-oriented

projects in the community……………………………….. 1
3.6 Professional examinations
3.6.1 For every relevant licensure and other professional

examinations passed (maximum of 10 pts.)
a. Engineering, Accounting, Medicine,

Law, Teacher’s Board, etc…………………………… 5
b. Marine Board/Seaman Certificate;

Master Electrician Certificate, Master Plumber
Certificate, Plant Mechanic Certificate;
Professional Radio Operator
Certificate………………………………………………….. 2
c. Other trade skill certificate…………………………. 1
7-26
Chapter 8
Compensation Scheme for Foreign Service Personnel
In pursuance of an independent foreign policy, Republic Act (RA) No. 7157,

“Philippine Foreign Service Act of 1991,” was enacted on September 19, 1991,
to reorganize and strengthen the Philippine Foreign Service. One of its
objectives is to provide suitable salaries, allowances and benefits that will
attract personnel from all walks of Philippine life and to appoint persons to
positions in the Foreign Service solely on the basis of merit and demonstrated
capability in the promotion of national interests.
8.1 Coverage
The compensation scheme established under RA No. 7157 covers the

following classes of positions under the Foreign Service Group:
Classes Salary Grade

Foreign Service Staff Employee III 5
Foreign Service Staff Employee II 7
Foreign Service Staff Employee I 9
Foreign Service Staff Officer IV 11
Foreign Service Staff Officer III 15
Foreign Service Staff Officer II 18
Foreign Service Staff Officer I 22
Foreign Service Officer, Class IV 22
Foreign Service Officer, Class III 23
Foreign Service Officer, Class II 24
Foreign Service Officer, Class I 25
Counsellor 26
Chief of Mission, Class II 27
Chief of Mission, Class I 29
8.2 Designations When Assigned Abroad
When assigned abroad, Foreign Service Officers shall be commissioned

as diplomatic or consular officers, or both. All official acts of these
officers shall be performed under such commissions. Their diplomatic
and consular titles, however, shall be coterminous with their assignments
at the foreign posts. When in the foreign service, their designations are
as follows:
8.2.1 A Chief of Mission shall be assigned as ambassador extraordinary

and plenipotentiary to head a diplomatic mission or as deputy
8-1
head of mission or as consul general to head a consular

establishment.
8.2.2 A Counsellor (Career Minister) shall be assigned as career minister

in a diplomatic mission, or as consul general to head a consular
establishment.
8.2.3 A Foreign Service Officer, Class I, shall be assigned as first

secretary in a diplomatic mission or consul in a consular
establishment.
8.2.4 A Foreign Service Officer, Class II, shall be assigned as second

secretary in a diplomatic mission or consul in a consular
establishment.
8.2.5 A Foreign Service Officer, Class III, shall be assigned as third

secretary in a diplomatic mission or vice-consul in a consular
establishment.
8.2.6 A Foreign Service Officer, Class IV, shall be assigned as third

secretary in a diplomatic mission or vice-consul in a consular
establishment.
In a diplomatic post where there is a consular section, Foreign Service

Officers may be designated as both diplomatic and consular officers.
8.3 Designations When in the Home Office
When in the Home Office, Foreign Service Officers are designated as

follows:
8.3.1 A Chief of Mission shall be designated as assistant secretary when

assigned to head any of the principal offices of the Department of
Foreign Affairs (DFA).
8.3.2 A Counsellor (Career Minister) may be designated as executive

director of an office.
8.3.3 A Foreign Service Officer, Class I, may be designated as division

director.
8.3.4 A Foreign Service Officer, Class II, Class III, or Class IV, may be
designated as assistant division director.
8-2
8.3.5 A Foreign Service Officer in any class, including chiefs of mission

and career ministers, may be designated as special assistant to
the Secretary or to the Undersecretary of Foreign Affairs.
8.3.6 A Foreign Service Officer below the rank of chief of mission may
be designated as principal assistant in any office.
Any assignment in the home office requiring a rank higher than the
actual rank of the officer assigned shall be in an acting capacity.
8.4 System of Allowances
8.4.1 Allowances When Assigned Abroad
Foreign Service personnel who are assigned in foreign posts are

entitled to the following allowances as provided under RA No.
7157:
8.4.1.1 Overseas Allowance (OA)
8.4.1.1.1 Purpose of OA - It is granted to Foreign

Service personnel who are citizens of the
Philippines to adjust their take home pay
taking into account the:
• changes in the cost of living abroad

which arise from changes in foreign
currency conversion rates;
• differentials in the cost of living

between the Philippines and foreign
posts; and
• extraordinary and necessary expenses,

not otherwise compensated for, which
are incurred by officers or employees
in the foreign posts.
8.4.1.1.2 Basic Annual Rates of OA - The basic annual

rates of OA are indicated in Annex A of this
Chapter.
8.4.1.1.3 Indices for OA - The DFA indices for OA

indicated in Annex B of this Chapter shall be
8-3
used to compute the OA at the post of

assignment.
8.4.1.1.4 OA for Husband and Wife - The husband

and wife who are assigned in the same post
shall be entitled to separate OA
corresponding to each of their respective
ranks.
8.4.1.1.5 Conditions for Grant of OA - The grant of

OA shall be in accordance with the
provisions of Section 66 of RA No. 7157 and
subject to the condition that nobody shall
suffer a reduction as a result of the revision
of the rates/indices. In case of reduction,
the rates shall apply prospectively and the
personnel concerned shall continue to
receive their present OA for the duration of
their tour of duty at the post.
8.4.1.1.6 OA for Personnel Assigned at Hardship

Posts - Personnel assigned in hardship
posts, as may be determined by the DFA
Secretary, shall receive an additional 5%
increase in their OA to meet other expenses
brought about by dangerous, unhealthy or
excessively adverse living conditions
prevailing at post, subject to the availability
of funds.
8.4.1.1.7 OA for Personnel on Temporary Assignment

- Foreign service personnel assigned
abroad, including chiefs of mission, who are
detailed to another post shall, for the
duration of the detail, be entitled to the OA
based on the index of the post where they
are temporarily assigned.
8.4.1.1.8 Review and Adjustment of OA Rates - The

basic annual rates of OA may be adjusted
not oftener than once a year, as determined
by the President, upon the recommendation
of the Permanent Committee created under
Section 67, RA No. 7157, consisting of the
DFA Secretary, the Department of Budget
8-4
and Management Secretary and the Bangko

Sentral ng Pilipinas Governor.
8.4.1.1.9 Index of Newly Opened Post - In the case

of a newly opened foreign service post
which index has not yet been fixed, the
index of the nearest post in terms of
economic conditions shall apply, pending
Executive approval of an appropriate index
for the new post.
8.4.1.2 Living Quarters Allowance (LQA)
8.4.1.2.1 Purpose of LQA - It is granted to foreign

service personnel to enable them to rent
and maintain quarters befitting their
representative capacities.
8.4.1.2.2 Basic Annual Rates of LQA - The basic

annual rates of LQA which are commutable
are as indicated in Annex A of this Chapter.
8.4.1.2.3 Indices for LQA - The DFA indices for LQA

indicated in Annex B of this Chapter shall be
used to compute the LQA at the post of
assignment.
8.4.1.2.4 Conditions for Grant of LQA - The grant of

LQA shall be in accordance with the
provisions of Section 65 of RA No. 7157 and
subject to the condition that nobody shall
suffer a reduction as a result of the revision
of the rates/indices. In case of reduction,
the rates shall apply prospectively and the
personnel concerned shall continue to
receive their present LQA for the duration of
their tour of duty at the post.
8.4.1.2.5 Classification of Family Status - Payment

of the LQA shall be based on the following
classification of foreign service personnel:
• With family – if living at the post of

assignment with the spouse or at least
one (1) qualified dependent child who
has not reached 21 years of age
8-5
• Without family – if single, widow, or

widower, or legally separated, and
living without dependent
Unmarried children who are mentally

or physically handicapped as attested
to by a medical certificate, incapable of
supporting themselves and living with
the officer or employee abroad, shall
be considered, for this purpose,
regardless of age, as dependents.
8.4.1.2.6 Basis of Payment of LQA - Payment of the

LQA shall be made strictly on the basis of
actual status at post. However, those whose
dependents have temporarily left their
residences at the posts shall retain their
“with family” status, provided that for the
duration of their absences, the personnel
concerned shall not move to cheaper or
smaller lodgings; provided, further, that
their absence at any one time shall not
exceed beyond three (3) months; provided,
finally, that the dependents have not
established residences elsewhere. Gainful
employment outside of post is an indication
of having changed domicile.
8.4.1.2.7 LQA of Husband and Wife - In the case of

husband and wife who are both assigned in
one (1) post, only the spouse with the
higher rank shall be entitled to the LQA, and
for purposes of family status under Item
8.4.1.2.5 hereof, the other spouse shall be
considered as dependent.
8.4.1.2.8 Joint Rental of Apartment or Housing Unit -

In case where, because of acute housing
shortage, prohibitive rental cost or other
circumstances, two (2) or more foreign
service personnel are constrained to rent
one (1) apartment or housing unit jointly,
the claimants shall be entitled to their
respective allowances, provided that the
Head of Post shall certify in the claim
8-6
voucher that their individual allowances are

insufficient to cover the rental of one (1)
apartment or housing unit at the post.
8.4.1.2.9 Advance Payment of LQA - In posts where

there is a standard practice among
landlords to require advance rental or
deposit equivalent to at least six (6) months
to one (1) year rental of the unit, payment
in advance of LQA sufficient to cover the
required amount may be authorized,
provided that the advance rental shall be
paid directly to the landlord by the post;
provided, further, that the claimant shall
submit to the Home Office a copy of the
pertinent contract of lease duly certified by
the Head of Post which should invariably
contain a diplomatic clause; provided that in
case of recall, reassignment or for any
other reason, the unexpired portion of the
amount paid shall be duly refunded to the
post, subject to the condition that in case of
force majeure whereby the unexpired
portion is not refunded, the claimant shall
not be held accountable.
8.4.1.2.10 Payment of Key Money for Goodwill and

Rental Through a Real Estate Agent – In
places where the new lessees are invariably
required at the outset to pay key money for
goodwill and in places where lessees are
required by the host government, or by
customary business practice, to rent a
house or apartment unit through an agent
and pay the corresponding real estate
agent’s fee or commission upon signing of
the lease contract, payment of the above
may be authorized chargeable against the
account of the Department concerned,
provided that the Head of Post shall certify
in the pertinent cash voucher that such
payments are required by the host
government or customary at the post and
not refunded by the owner to the lessee;
provided further, that any key money
and/or real estate agent’s fee or
8-7
commission that may be required upon

renewal of the lease contract shall likewise
be chargeable against the account of the
Department concerned.
8.4.1.2.11 Actual Rental – In lieu of commutable living

quarters allowance, payment of actual
rental of quarters occupied by the Head of
Post may be authorized, subject to the
availability of funds and as may be
warranted by the housing situation in the
post of assignment. Payment of the utilities
shall be in accordance with regulations as
may be prescribed by the DFA Secretary.
8.4.1.2.12 Index of Newly-Opened Post - In the case

of a newly-opened foreign service post
which index has not yet been fixed, the
index of the nearest post in terms of
economic conditions shall apply, pending
approval of an appropriate index for the
new post.
8.4.1.3 Post Allowance (PA)
8.4.1.3.1 Purpose of PA - It is granted to defray

unusual expenses incident to the operation
and maintenance of the official residence
suitable for the chief of diplomatic mission
or consular representative of the Philippines
at the post.
8.4.1.3.2 Allotment Fund for PA - An allotment fund

may be made by the DFA Secretary to
defray the unusual expenses incident to the
operation and maintenance of an official
residence suitable for the chief diplomatic or
consular representative of the Philippines at
the post.
8.4.1.3.3 Payment of PA – The PA shall be granted at

a per annum rate beginning on the first
day of the month following arrival thereat.
It shall be payable only when on duty status
at his/her station.
8-8
8.4.1.3.4 Duty Status - A Head of Mission or Principal

Officer shall be considered on duty status
even when on:
• temporary duty outside the city or

place where the officer maintains
regular office but within the territorial
limits of the officer’s diplomatic or
consular jurisdiction
• temporary duty outside the diplomatic

or consular jurisdiction for a
consecutive period not exceeding 60
days; beyond 60 days, no allowance
shall be paid except as specifically
approved by the President; payment
of PA to be resumed only on the date
of the actual return to the territory
within the officer’s diplomatic or
consular jurisdiction
• leave of absence with pay, provided

the leave is spent within the territorial
jurisdiction of the post; no PA to be
paid if the officer goes on leave with
pay outside the territorial jurisdiction
of the post
8.4.1.3.5 Territorial Limits - The territorial limits, in

case of concurrent jurisdiction, shall extend
to all countries or areas covered by the
concurrent offices.
8.4.1.3.6 No PA shall be paid if the officer lives in a

hotel as residence.
8.4.1.3.7 Entitlement to PA may be suspended due to

insufficiency of funds.
8.4.1.4 Family Allowance (FA)
8.4.1.4.1 Purpose of FA - It is granted to assist

foreign service personnel living with their
families at the post of assignment in
meeting the incremental expenses arising
from foreign assignment, computed for the
8-9
dependent spouse and for unmarried legal

minor dependent children not exceeding
three (3) in number.
8.4.1.4.2 Rates of FA – An officer or employee, other

than an alien or casual/contractual
employee, who is assigned abroad and
whose family resides with the officer or
employee at the post of assignment, shall
be entitled to a commutable FA equivalent
to:
• US$ 150 per month for the dependent

spouse; and
• US$ 75 per month for each dependent

child not exceeding three (3) in
number.
8.4.1.4.3 Definition of Dependent Child - A dependent

child shall mean legitimate, illegitimate,
legitimated or legally adopted child who is
not over 21 years, unmarried, not gainfully
employed, and living with the officer or
employee at the post of assignment.
8.4.1.4.4 When Unmarried Children are Considered

Dependents - Unmarried children who are
mentally or physically handicapped as
attested to by medical certificate, incapable
of supporting themselves and living with the
officer or employee abroad, shall be
considered, for this purpose, regardless of
age, as dependents.
8.4.1.4.5 Dependents Not Living with Foreign Service

Personnel - Subject to the prior approval of
the Department head, full FA may be paid
to any claimant whose dependent does not
live with the officer or employee at the post
of assignment under any of the following
circumstances:
• The officer or employee is compelled

to live alone due to dangerous, notably
unhealthy or excessively adverse living
8-10
conditions, or by other unavoidable

circumstances like lack of appropriate,
reasonable educational facilities for the
officer’s or employee’s children; or
• For the convenience of the

Government, the officer or employee
must live alone without any or all the
members of the officer’s or employee’s
family at the post of assignment.
All other meritorious cases may be

considered by the Department head as the
circumstances and the exigencies of the
service may warrant.
8.4.1.5 Clothing Allowance (CA)
8.4.1.5.1 Purpose of CA - It covers the increased cost

of clothing incurred in posts where the
climate is different from that of the
Philippines or where unusual circumstances
exist.
8.4.1.5.2 Rates of CA - The following are the rates for

CA which shall be granted once every 12
months:
Rates in US $
Rank Tropical Temperate
Zone Zone
Chiefs of Mission,
Counsellors (Career
Ministers) and those $400 $500
assigned as Principal
Officers or Consuls
General
Foreign Service
Officers including
those assigned as $300 $400
Consuls or Acting
Principal Officers
Foreign Service Staff

Officers and $200 $250
Employees
8-11
8.4.1.5.3 Classification of Posts - The rates of

payment of CA shall be in accordance with
the following classification of posts:
• The following posts are considered as
falling under the temperate zone,
having 4 distinct seasons, namely,
summer, autumn, winter and spring:
Abu Dhabi Hanoi Riyadh

Ankara Hongkong Rome
Athens Islamabad San Francisco
Baghdad Jeddah Santiago
Beijing Kobe Seoul
Berne Kuwait Stockholm
Bonn London Sydney
Brasilia Los Angeles Tehran
Brussels Madrid Tel Aviv
Bucharest Manama The Hague
Budapest Mexico City Tokyo
Buenos Aires Milan Toronto
Cairo Moscow Tripoli
Canberra Muscat Vancouver
Chicago New Delhi Vatican City
Dhaka New York Vienna
Doha Ottawa Washington, D.C.
Geneva Paris Wellington
Hamburg Pretoria Xiamen
• The following posts are considered as

falling under the tropical zone:
Agana Jakarta Phnom Penh

Bangkok Kuala Lumpur Port Moresby
Brunei Lagos Saipan
Havana Manado Singapore
Honolulu Nairobi Yangon
8.4.1.6 Medical Allowance (MA)
8.4.1.6.1 Purpose of MA - It is intended to cover the

cost of medical insurance in countries where
medical care is unusually expensive,
including cost of hospitalization and medical
treatment of foreign service personnel and
legal dependents living with the officer or
employee at the post.
8-12
8.4.1.6.2 Medical Insurance - Foreign service

personnel may be required by the DFA
to subscribe to a medical insurance
scheme available in the host country.
Twenty-five percent (25%) of the
corresponding premiums shall be payable
by the personnel concerned and 75%
thereof shall be borne by the Government
as its contribution.
8.4.1.6.3 Hospitalization - In the event of illness or

injury requiring hospitalization of a foreign
service personnel, not as a result of vicious
habits, intemperance or misconduct on
his/her part, the Government shall
reimburse the cost of medical expenses
provided that no medical insurance scheme
is available in the post of assignment.
8.4.1.6.4 Medical Expenses - The medical expenses

shall cover the cost of hospitalization and/or
payment of the services of the attending
physician, including travel expenses to and
from the hospital or clinic, and such
other incidental expenses as may be
incurred in connection with such
hospitalization treatment but not to exceed
US$1,000.
8.4.1.6.5 Legal Dependents - Only legal dependents

living with the officer or employee at the
post shall be entitled to the MA.
8.4.1.7 Representation Allowance (RA)
8.4.1.7.1 Purpose of RA - It is granted to chiefs of

mission, special envoys, permanent
delegates or representatives to international
bodies, principal officers, and other ranking
diplomatic officers, and ranking foreign
service officers stationed abroad to enable
such officers to uphold the prestige of the
Republic of the Philippines, to represent the
country with dignity and distinction, and to
carry out their functions more effectively.
8-13
8.4.1.7.2 Uses of RA - RA shall be expended only for

purposes which are of a public character,
beneficial to the interests of the public
service, and connected with the exercise of
the functions of the Government in relation
to the conduct of foreign affairs. They may
be expended for necessary entertainment,
charitable contributions, memorials, flowers,
gifts, club initiation fees, membership dues,
and the like. The office to whom the
allowance is granted may disburse any
portion of it to cover necessary
entertainment by the officer’s subordinates
to accomplish certain tasks assigned to
them.
8.4.1.7.3 Supporting Document - Expenses charged

to RA must be supported by proper receipts
or vouchers if the individual amount of
expenditures exceeds US$50.00 or its
equivalent. Where expenses are incurred
for entertainment, the voucher must be
accompanied by a statement of the officer
concerned or by such proofs showing that
the expenses have been made in the public
interest.
8.4.1.7.4 Special Entertainment - Should special

entertaining be necessary because of formal
visits of Philippine dignitaries travelling on
diplomatic or special passports, the DFA
Secretary shall be informed in advance
thereof and specific requests for funds
therefor shall be made. No such expenses
shall be incurred without the prior
authorization of the DFA Secretary.
8.4.1.7.5 The annual RA rates are as follows:
• High Cost Posts are posts which have

overseas allowance index in the range
of 90 and above
8-14
Representation
Rank/Position
Allowance
Chief of Mission
US $ 6,000
(not Head of Post)
Counsellor
4,500
(Career Minister)
Foreign Service Officer,

3,600
Class I

2,700
Class II

1,800
Class III

1,800
Class IV

1,440
Officer I
Others duly authorized

1,440
by the Secretary
• Medium Cost Posts are posts which

have overseas allowance indices in the
range of 80 to 89
Representation
Rank/Position
Allowance
Chief of Mission
US $ 3,600
(not Head of Post)
Counsellor
3,600
(Career Minister)

2,880
Class I

2,160
Class II

1,440
Class III
8-15
Representation
Rank/Position
Allowance

1,440
Class IV

1,080
Officer I
Others duly authorized

1,080
by the Secretary
• Low Cost Posts are posts which have

overseas allowance indices in the
range of 70 to 79
Representation
Rank/Position
Allowance
Chief of Mission
US $ 2,700
(not Head of Post)
Career Minister
2,700

2,100
Class I

1,620
Class II

1,080
Class III

1,080
Class IV

900
Officer I
Others duly authorized 900

by the Secretary
8.4.1.8 Education Allowance (EA)
8.4.1.8.1 Purpose of EA - It is granted to compensate

for additional cost incurred to educate legal
dependents not exceeding 3 who are
8-16
enrolled in the primary, elementary and

high school levels where free public
education at the post is not provided for.
8.4.1.8.2 Actual Costs – The EA may be granted as

reimbursement of actual costs, within such
maximum amount as set by the DFA and
DBM Secretaries, with the approval of the
President, per school year for each child,
subject to presentation of receipts and
other evidences of payment of
matriculation, tuition fees, books and other
school fees.
8.5 Service Attachés
8.5.1 Assignment and Accreditation - The assignment and accreditation

of personnel in any agency of the Government as service attachés
to embassies or representatives to consulates shall have the prior
clearance of the DFA Secretary who shall take into account the
specific places where the services of these officers or employees
from the other government agencies are needed, except Trade
Attachés who shall be assigned and accredited only after
consultation with the Department of Trade and Industry
Secretary.
8.5.2 Appointments - The authority to appoint service attachés and

representatives shall be vested in the Department Secretary
sending them. An agency shall have only one (1) service attaché
or representative accredited to one (1) post, except military and
trade attachés.
8.5.3 Assimilated Ranks - The President shall determine, upon

recommendation of the DFA Secretary, the assimilated ranks of
service attachés for purposes of compensation.
8.5.3.1 As a general rule and except as the President may

appoint, no officer of the Philippine Government outside
of the DFA shall be assigned an assimilated rank higher
than Foreign Service Officer, Class I.
8.5.3.2 The assimilated ranks shall not confer diplomatic

rankings for purposes of protocol.
8-17
The assimilated ranks of military and civilian attachés from the

Department of National Defense, Department of Trade and
Industry, Department of Tourism, Department of Finance and
Department of Agriculture are indicated in Annex C of this
Chapter.
8-18
Annex A
Table of Annual Rates for Overseas and Living Quarters Allowances

for Foreign Service Personnel
(in US $)
Living Quarters (LQA)

Overseas
Rank/Position With Without
Allowance
Family Family
(OA)
Chief of Mission
Head of Diplomatic Mission 69,599 42,871 35,041
Others, including Consul General 60,521 35,723 29,199
Counsellor (Career Minister) 52,626 31,064 25,394
Foreign Service Officer, Class I 45,762 28,244 23,080
Foreign Service Officer, Class II 41,601 25,674 20,986
Foreign Service Officer, Class III 37,819 23,341 19,079
Foreign Service Officer, Class IV 34,382 21,218 17,342
Foreign Service Staff Officer I 34,382 21,218 17,342
Foreign Service Staff Officer II 32,744 19,288 16,518
Foreign Service Staff Officer III 31,185 18,371 15,731
Foreign Service Staff Officer IV 29,700 17,496 14,980
Foreign Service Staff Employee I 27,000 15,868 13,588
Foreign Service Staff Employee II 25,714 15,868 13,588
Foreign Service Staff Employee III 24,490 15,868 13,588
8-19
Annex B
Table of Indices for Overseas and Living Quarters Allowances

for Foreign Service Personnel
OA LQA OA LQA
Post Post
in % in % in % in %
Abu Dhabi 86 100 Madrid 94 130

Abuja 93 90 Manado 70 70
Agana 100 100 Manama 91 100
Amman 77 100 Melbourne 90 100
Ankara 86 110 Mexico City 85 115
Athens 89 130 Milan 96 130
Baghdad 84 100 Montreal 93 100
Bandar Seri Begawan 75 95 Moscow 95 130
Bangkok 77 95 Muscat 81 100
Barcelona 94 130 Nairobi 78 90
Beijing 89 95 New Delhi 79 70
Beirut 90 125 New Orleans 100 100
Berlin 98 130 New York 100 100
Berne 107 130 Osaka 128 150
Bonn 93 130 Oslo 105 130
Brasilia 82 110 Ottawa 91 102
Brussels 94 130 Paris 98 130
Bucharest 81 130 Phnom Penh 75 90
Budapest 92 130 Pohnpei 86 100
Buenos Aires 82 90 Port Moresby 88 115
Cairo 76 95 Prague 90 130
Canberra 90 97 Pretoria 92 100
Caracas 82 115 Rabat 83 100
Chicago 100 100 Riyadh 86 100
Colombo 77 70 Rome 96 130
Dakar 91 100 Saipan 86 100
Dhaka 77 65 San Diego 100 100
Dili 89 100 San Francisco 100 100
Doha 79 100 Santiago 82 90
Dubai 86 100 Seattle 100 100
Dublin 95 130 Seoul 107 125
Geneva 107 130 Shanghai 89 100
Guangzhou 89 100 Singapore 80 100
Hamburg 92 130 Stockholm 99 130
Hanoi 79 70 Sydney 90 100
Havana 85 100 Tehran 83 95
Holy See 96 130 Tel-Aviv 90 125
8-20
OA LQA OA LQA
Post Post
in % in % in % in %
Hongkong SAR 100 115 The Hague 93 130

Honolulu 100 110 Tokyo 128 150
Houston 100 100 Toronto 93 102
Islamabad 80 70 Tripoli 82 100
Jakarta 81 95 Vancouver 91 102
Jeddah 86 100 Holy See 96 130
Koror 86 100 Vienna 96 130
Kuala Lumpur 75 90 Vientiane 80 70
Kuwait City 81 100 Warsaw 85 130
Libreville 93 100 Washington, D.C. 100 100
Lima 78 90 Wellington 90 115
Lisbon 87 130 Winnipeg 91 100
London 100 130 Xiamen 89 95
Los Angeles 100 100 Yangon 83 70
Note: The reference post for the annual rates for OA and LQA (at 100%) is New
York City.
Sample Computation of OA and LQA
Given:
Employee A, married with one dependent child, holding the position of Foreign
Service Staff Officer I and posted in Geneva
OA = US $ 34,382
LQA = US $ 21,218
Required: Annual proportionate OA and LQA while in Geneva
OA = US $ 34,382 for the reference post x 107% for Geneva

----------------------------------
100% for the reference post
OA = (US $ 34,382) (1.07)
OA = US $ 36,788.74
LQA = US $ 21,218 for the reference post x 130% for Geneva

----------------------------------
100% for the reference post
LQA = (US $ 21,218) (1.30)
LQA = US $ 27,583.40
8-21
Annex C
Assimilated Ranks of Military and Civilian Attachés, Representatives and

Other Personnel of the Philippine Government Stationed Abroad
Department Position/Designation Assimilated Rank
(a) Department of National Brigadier General Counsellor

Defense
Colonel/Navy Capatain Foreign Service Officer,
Class I
Lieutenant Colonel/ Foreign Service Officer,

Major/Lieutenant Class II
Commander/Commander
Captain/Lieutenant Senior Foreign Service Officer,

Grade Class III
First Lieutenant/Lieutenant Foreign Service Officer,

Junior Grade Class IV
Second Lieutenant/Ensign Foreign Service Officer,

Class IV
(b) Department of Special Trade Counsellor

Trade and Industry Representative
Foreign Trade Service Foreign Service Officer,

Officer I Class I

Officer II Class II
Foreign Trade Service Foreign Staff Officer,

Officer III Class III

Officer IV Class IV
Foreign Trade Service Staff Foreign Service Staff

Officer Officer II
8-22
(c) Department of Tourism Tourism Attaché Foreign Service Officer,

Class I
Public Relations Officer IV Foreign Service Officer,

Class II
Administrative Assistant Foreign Service Staff

Officer IV
Tourism Promotion Assistant Foreign Service Staff

Officer III
Regional Convention Foreign Service Officer,

Coordinator Class I
Convention Service Officer Foreign Service Officer,

Class II
Senior Market Assistant Foreign Service Staff

Officer IV
Administrative Assistant II Foreign Service Staff

Officer III
(d) Department of Finance Attaché Foreign Service Officer,

Finance Class I
Revenue Attaché Foreign Service Officer,

Class I
Assistant Revenue Attaché Foreign Service Officer,

Class II
(e) Department of Labor Labor Attaché II Foreign Service Officer,

and Employment Class I
Labor Attaché I Foreign Service Officer,

Class II
Overseas Worker Welfare Foreign Service Officer,

Officer IV Class III
Overseas Worker Welfare Foreign Service Staff
8-23

Officer III Officer I
(Center Coordinator)
(f) Department of Agricultural Attaché Foreign Service Officer,

Agriculture Class I
Agricultural Analyst Foreign Service Officer,

Class III
Note:
The allowances/benefits of incumbents of the positions from the above-listed Departments while
stationed abroad are computed in the same manner as those of foreign service personnel of the
DFA, based on the assimilated ranks.
8-24
Chapter 9
Position Classification and Compensation Scheme in

Local Government Units
9.1 Historical Background
9.1.1 Before Presidential Decree (PD) No. 1136
Local governments are political units composed of provinces,

cities, municipalities and barangays. They have long been
existing with their own legislative bodies which are endowed with
specific powers as defined in the Revised Administrative Code and
individual local government unit (LGU) charters. These local
legislative bodies were then called provincial boards in the case of
provinces, city councils in cities and municipal councils in
municipalities. These local legislative bodies were vested with the
power to determine the number of employees that each office
should have and to fix their salary rates as agreed upon by the
majority. In exercising such power, however, there were no
specific guidelines nor definite standards used in the creation of
positions and the fixing of salaries. Position titles were not
descriptive nor reflective of the duties and responsibilities of the
positions and salaries were fixed arbitrarily. For local officials,
however, laws such as Republic Act (RA) No. 268 as amended,
and RA No. 4477 were passed by Congress fixing the salaries of
municipal, provincial and city officials. These salary laws created
a wide gap between the salaries of rank-and-file employees and
the officials.
9.1.2 PD No. 1136
Cognizant of the need for a more effective local government

personnel administration, PD No. 1136, “The Local Government
Personnel Administration and Compensation Plans Decree of
1977,” was promulgated on May 5, 1977. Its salient features are
as follows:
9.1.2.1 The creation of the Joint Commission on Local

Government Personnel Administration (JCLGPA) to
formulate policies on local government personnel
administration, position classification and pay
administration; and to implement the provisions of PD
No. 1136;
9-1
9.1.2.2 The adoption by LGUs of rational personnel policy and

position classification and compensation plans, based
on the principle of equal pay for substantially equal
work, and to recognize differences in pay arising from
substantive differences in duties and responsibilities and
qualification requirements; and
9.1.2.3 The maximum salary rates for provincial, city and

municipal officials by equating them to CESO ranks.
9.1.3 RA No. 6758
In pursuance of the Constitutional mandate for the adoption of a

unified Position Classification and Compensation System (PCCS) in
the government, RA No. 6758, the “Compensation and Position
Classification Act of 1989” popularly known as the “Salary
Standardization Law,” includes LGUs under its coverage.
Section 10, RA No. 6758, provides that the rates of pay shall be
determined on the basis of the class and financial capability of
each LGU. Such rates of pay shall not exceed the following
percentages of the rates of the salary schedule prescribed under
Section 7 of the Act:
For Provinces/Cities For Municipalities
Special Cities 100%

1st Class 100% 90%
2nd Class 95% 85%
3rd Class 90% 80%
4th Class 85% 75%
5th Class 80% 70%
6th Class 75% 65%
9.1.4 RA No. 7160
To enable LGUs to attain their fullest development as self-reliant

entities and make them more effective partners in the attainment
of national goals, RA No. 7160, the “Local Government Code of
1991,” was enacted. The pertinent provisions of the Code are as
follows:
9.1.4.1 The personnel, records, equipment and other assets of

the abolished JCLGPA shall be transferred to the
appropriate office in the Civil Service Commission
(CSC).
9-2
Position Classification and Compensation Scheme In LGUs
9.1.4.2 Every LGU shall design and implement its own

organizational structure and staffing pattern taking into
consideration its service requirements and financial
capability, but subject to the minimum standards and
guidelines prescribed by the CSC.
9.1.4.3 Pursuant to Section 81, RA No. 7160, the compensation

of local government officials and employees shall be
determined by the sanggunian concerned provided
that:
9.1.4.3.1 The increase in compensation of elective

local government officials shall take effect
only after the terms of office of those
approving such increase shall have expired;
9.1.4.3.2 The increase in compensation of the

appointive officials and employees shall take
effect as provided in the ordinance
authorizing such increase;
9.1.4.3.3 Said increase shall not exceed the

percentage limitation for personal services;
and
9.1.4.3.4 Such compensation may be based upon the

pertinent provisions of RA No. 6758.
9.1.4.4 The local sanggunian is empowered to determine the

positions, salaries and wages, allowances and other
benefits of officials and employees paid wholly or
mainly from local government funds.
9.1.4.5 If the finances of LGUs allow, the local sanggunian may

provide for additional allowances and other benefits to
judges, prosecutors, public elementary and high school
teachers and other national government officials
stationed in or assigned in LGUs.
9.1.5 Administrative Order (AO) No. 42
9.1.5.1 Realizing the need to address issues on position

classification and compensation in LGUs in view of the
provisions of RA No. 7160, and to effectively enforce
the provisions of the Constitution and fully rationalize
the standardization of compensation in the
government particularly in LGUs, AO No. 42 was issued
9-3
by the President on March 3, 1993, to reiterate the

provision of RA No. 6758 that the Department of
Budget and Management (DBM) shall be the
Administrator of the unified Position Classification and
Compensation System of the government and as such
shall undertake the following:
9.1.5.1.1 Provide guidelines on the classification of

local government positions and on the
specific rates of pay therefor;
9.1.5.1.2 Provide criteria and guidelines for the grant

of all allowances and additional forms of
compensation to local government
employees;
9.1.5.1.3 Advise and assist LGUs on matters of

position classification and compensation of
local government personnel; and
9.1.5.1.4 Provide technical expertise in the training of

local government personnel to enable them
to administer and maintain the
compensation and position classification
system.
9.1.5.2 The issuance of this clarificatory order was anchored on

the following:
9.1.5.2.1 The abolition of the JCLGPA pursuant to

Section 77, RA No. 7160, and the transfer
of all its personnel, records, equipment and
other assets to the CSC;
9.1.5.2.2 The inability of RA No. 7160 to specifically

provide for the transfer of the respective
functions of the member agencies of the
JCLGPA;
9.1.5.2.3 Section 325 (b) of RA No. 7160 states that:

"No official or employee shall be entitled to
a salary rate higher than the maximum
fixed for his position or other positions of
equivalent rank by applicable laws, rules
and regulations issued thereunder;
9-4
9.1.5.2.4 The only applicable law that governs the

Compensation and Position Classification
System in the government is RA No. 6758
which is administered by the DBM as
mandated; and
9.1.5.2.5 The Compensation and Position

Classification System established in
pursuance of the Constitutional mandate
covers all national and local government
positions, appointive or elective, on full-time
or part-time basis now existing or hereafter
created.
9.1.6 Joint Senate and House of Representatives Resolution No.

01, Adopted on March 3, 1994
Under said Joint Resolution approved by the President on March

7, 1994, LGUs other than special and 1st class cities and provinces
may adopt the salary schedules for higher class LGUs, provided
that the salary schedules adopted shall be uniformly applied to all
positions in the said LGUs, subject to certain conditions.
9.2 The Position Classification Scheme for LGUs
Like the positions in the national government covered by RA No. 6758,

positions in LGUs are classified based on duties and responsibilities and
the pertinent rules, regulations and procedures on position classification
provided under Chapter 2 of this Manual.
9.2.1 Position Classification Guide – In classifying positions, LGUs

shall be guided by the following:
9.2.1.1 Index of Occupational Services, Position Titles, and

Salary Grades (IOS) in the Local Government – This is a
document listing the different occupational services,
occupational groups, series of classes and classes of
positions existing in LGUs. It also shows the salary
grade assignment of each class of positions.
9.2.1.2 Class Specification – This is a detailed description of a

class of positions. It serves as standard or guide for
allocating positions to their proper classes. A more
detailed discussion on class specifications is found in
9-5
9.2.1.3 Salary Grade Allocation of Elective Officials - RA Nos.

6758 and 7160 and their implementing rules and
regulations provide the salary grade allocations of
elective officials in LGUs that correspond to specific
salary rates in the salary schedules prescribed for LGUs.
9.2.1.3.1 Elective Officials of Provinces
Salary
Position
Grade
Provincial Governor 30
Provincial Vice-Governor 28
Sangguniang Panlalawigan Member 27
9.2.1.3.2 Elective Officials of Cities
Special Cities (Manila and Quezon City) and

Highly Urbanized Cities
Salary
Position
Grade
City Mayor 30
City Vice Mayor II 28
Sangguniang Panlungsod Member II 27
Component Cities
Salary
Position
Grade
City Mayor 30
City Vice Mayor I 26
Sangguniang Panlungsod Member I 25
9.2.1.3.3 Elective Officials of Municipalities
• Within Metropolitan Manila
9-6
Salary
Position
Grade
Municipal Mayor II 28
Municipal Vice Mayor II 26
Sangguniang Bayan Member II 25
• Outside Metropolitan Manila
Salary
Position
Grade
Municipal Mayor I 27
Municipal Vice Mayor I 25
Sangguniang Bayan Member I 24
9.2.1.4 Salary Grade Allocation of Appointive Officials – RA No.

6758 and its implementing rules and regulations
provide the salary grade allocation of appointive
officials in LGUs that corresponds to a specific salary
rate in the salary schedule prescribed for LGUs.
9.2.1.4.1 Appointive Officials of Provinces
Salary
Position
Grade
Provincial Government Department Head 26
Provincial Government Assistant 24

Department Head
9.2.1.4.2 Appointive Officials of Cities
• Special Cities (Manila and Quezon City)
Salary
Position
Grade
City Government Department Head III 27
City Government Office Head 26
9-7
City Government Assistant Department 25

Head III
• Highly Urbanized Cities/Other

Metropolitan Manila Cities
Salary
Position
Grade
City Government Department Head II 26

Head II
• Component Cities
Salary
Position
Grade
City Government Department Head I 25

Head I
9.2.1.4.3 Appointive Officials of Municipalities
• Within Metropolitan Manila
Salary
Position
Grade
Municipal Government Department Head 25

II
Municipal Government Assistant 23

Department Head II
• Outside Metropolitan Manila
Salary
Position
Grade
Municipal Government Department Head I 24
Municipal Government Assistant 22

Department Head I
9-8
9.2.1.5 Other Positions – The highest position below the rank

of an assistant department head may be allocated in
accordance with the following standard leveling of
positions based on the level and income class of the
LGU:
Local Highest Positions Below the

Government Unit Assistant Department Heads
Provinces SG-22, examples: Licensing Officer

IV, Project Development Officer IV
Special Cities SG-24, examples: Licensing Officer

V, Project Development Officer V
Highly Urbanized SG-22, examples: Licensing Officer

Cities IV, Project Development Officer IV
Component Cities SG-22, examples: Licensing Officer

IV, Project Development Officer IV
1st to 3rd Class SG-18 to 19, examples: Licensing

Municipalities Officer III, SG-18, and Engineer III,
SG-19
4th to 6th Class SG-14 to 16, examples: Registration

Municipalities Officer II, SG-14, Project
Development Officer II, SG-15, and
Dentist II, SG-16
N.B.
The position titles of the positions below the Assistant

Department Heads must be in accordance with the
Index of Occupational Services, Position Titles and
Salary Grades (IOS) in the Local Government issued
under Local Budget Circular No. 61 dated March 18,
1996.
9.2.1.6 Other Positions Assigned to LGU Officials – The

classification of Private Secretary, Executive Assistant
and Driver positions is dependent on the level/rank of
the position they serve. Per established standards, the
allowable level of these positions for the said officials
are as follows:
9-9
Local
Private Secretary Executive Assistant Driver
Executive
Provincial Private Secretary II, Executive Assistant Driver

Governor SG-15 IV, SG-22 II, SG-4
Provincial Private Secretary I, Executive Assistant Driver I,

Vice- SG-11 II, SG-17 SG-3
Governor
City Mayor Private Secretary II, Executive Assistant Driver

SG-15 IV, SG-22 II, SG-4
City Vice Private Secretary I, Executive Assistant Driver I,

Mayor SG-11 II, SG-17 SG-3
Municipal Private Secretary II, Executive Assistant Driver

Mayor SG-15 II, SG-17 II, SG-4
Municipal Private Secretary I, Executive Assistant Driver I,

Vice Mayor SG-11 I, SG-14 SG-3
Pursuant to Budget Circular No. 2004-3, dated March 6,

2004, however, the following positions were retitled as
follows:
From To
Private Secretary I, SG-11 Administrative Assistant V, SG-11

Private Secretary II, SG-15 Senior Administrative Assistant III,
SG-15
Driver I, SG-3 Administrative Aide III, SG-3

Driver II, SG-4 Administrative Aide IV, SG-4
9.2.1.7 Heads of Administrative/Support Units – Generally,

there shall be only one (1) administrative unit in a LGU
and this is placed under the Office of the Local Chief
Executive. If found necessary, administrative support
units in other departments of the LGU may be allowed.
The head of these satellite units should be classified
one (1) rank lower than the head of the administrative
mother unit.
9.2.1.8 Municipal Health Officers (MHOs) and Rural Health

Physicians (RHPs) – The MHO as a mandatory position
is the municipal department head in charge of
formulating and implementing the health and medical
programs for the whole municipality. It assumes
supervision, coordination and monitoring of rural health
9-10
units (RHUs) within the municipality. The RHP is

ordinarily in charge of a small medical team of health
service personnel assigned in a RHU which renders
preventive and medical services in specific area of
assignment within the municipality, usually consisting of
at least one (1) barangay. Notwithstanding that the
RHP pursuant to RA No. 7305 is given the same salary
grade as the MHO, the MHO has ascendancy over the
RHP in the hierarchical ranking of positions in LGUs.
9.2.1.9 Changes in Nomenclature of Positions - In line with

Section 325 (f) of RA No. 7160, changes in designation
or nomenclature of positions resulting in promotion or
demotion in ranks or increase or decrease in
compensation shall not be allowed, except when the
positions are actually vacant.
9.2.2 Creation of New Positions/Offices - Creation of new

positions in LGUs may be allowed subject to the following
conditions that:
9.2.2.1 All the mandatory positions listed under RA No. 7160

have been created and provided for;
9.2.2.2 The Salary Standardization Law has been fully

implemented;
9.2.2.3 The absorption of national government personnel by

LGUs on account of the devolution of functions has
been fully effected;
9.2.2.4 The general limitations on personal services

expenditures are not exceeded;
9.2.2.5 The classification of the positions should be consistent

with the standards and implementing rules and
regulations of RA No. 6758;
9.2.2.6 The creation of new positions or offices is subject to the

conditions prescribed under Civil Service Commission
Memorandum Circular No. 19, s. 1992; and
9.2.2.7 The classification of the heads of new offices shall be

dependent on the level of the organizational structure
of the new offices. If the new office is considered a
department, the head shall be classified as Department
9-11
Head. If lower than a department but higher than a

division, the head shall be classified as Assistant
Department Head.
9.2.3 Creation of a New Class of Positions – A proposal to create a

new class of positions not found in the IOS for Local Government
shall be submitted to the DBM for approval together with the
following documents/information:
9.2.3.1 Justification for the creation of the new class;
9.2.3.2 Duly accomplished Position Description Form; and
9.2.3.3 Structural, functional and position charts.
9.3 The Compensation Scheme for LGUs
9.3.1 Basic Salaries
The salary rates of positions in LGUs shall be based on their

income classifications as determined by the Department of
Finance (DOF), and their financial capabilities. These rates
shall conform with the percentages of the rates in the Salary
Schedule prescribed for national government personnel pursuant
to Section 7, RA No. 6758, and are indicated in item 9.1.3 of this
Chapter.
9.3.1.1 Salary Schedule (SS) - The SS consists of 30 salary

grades for provinces and cities and 27 for
municipalities. Each salary grade in the SS has 8 salary
steps to provide for the hiring rate and incentive for
length of service in the position. There are 8 salary
schedules for LGUs with each salary schedule
corresponding to a specific income class of a LGU.
A - Special Cities and First Class Provinces and

Cities
B - Second Class Provinces and Cities
C - Third Class Provinces and Cities and First
Class Municipalities
D - Fourth Class Provinces and Cities and
Second Class Municipalities
E - Fifth Class Provinces and Cities and Third
F - Sixth Class Provinces and Cities and Fourth
9-12
G - Fifth Class Municipalities

H - Sixth Class Municipalities
9.3.2 Adoption of Higher Salary Schedule
To minimize disparity in pay between the devolved personnel of

national government agencies and the organic personnel of the
LGU and pursuant to Joint Senate and House of Representatives
Resolution No. 1, s. 1994, LGUs lower than Special Cities and First
Class Provinces and Cities may adopt the salary schedule for
higher class LGUs.
9.3.2.1 The following conditions/limitations shall be observed in

adopting a higher salary schedule:
9.3.2.1.1 That the LGU must first implement fully the

prescribed salary schedule for its income
class and assure sustainability before it can
exercise the option to adopt a higher salary
schedule;
9.3.2.1.2 That the LGU is financially capable;
9.3.2.1.3 That the salary schedule to be adopted shall

be uniformly applied to all positions in the
LGU concerned;
9.3.2.1.4 That the salary grade allocation of positions

and the salary steps of personnel shall be
retained;
9.3.2.1.5 That the difference arising from the

adoption of the higher salary schedule shall
be subject to the budgetary and general
limitations on personal services
expenditures mandated under Sections 324
and 325 of RA No. 7160 as implemented by
Local Budget Circular (LBC) No. 75 dated
July 12, 2002;
9.3.2.1.6 That in the case of component cities and

municipalities, the salary schedule to be
adopted shall not be higher than that of the
province where they belong;
9-13
9.3.2.1.7 That the adoption of a higher salary schedule

shall not in any manner alter the existing
income classification of the LGU concerned;
and
9.3.2.1.8 That the following mandatories or activities

have been fully provided for:
• Statutory and contractual obligations of

the LGU;
• Continued implementation of RA No.

6758;
• Creation of mandatory positions;
• Absorption of devolved positions; and
• Payment of the Magna Carta benefits of

public health workers pursuant to the
provisions of RA No. 7305.
9.3.2.2 A LGU which has adopted a higher salary schedule as

authorized and which cannot afford to sustain such
schedule, may revert to the prescribed or lower salary
schedule.
For instance, a municipal government of a 4th class

municipality which adopted the salary schedule for a 1st
class municipality may revert to the salary schedule for
a 2nd class municipality.
To maintain the integrity and consistency of the Pay

Plan the following rules shall apply in reverting to the
prescribed/lower salary schedule:
9.3.2.2.1 No personnel whose salaries have been

adjusted based on the higher salary
schedule shall suffer diminution in pay as a
result thereof.
9.3.2.2.2 For new hirees/appointees, their salaries

shall be at the hiring rates of their positions
based on the prescribed/lower salary
schedule.
9-14
9.3.3 Step Increments
The rules and regulations on step increments as discussed under

Chapter 3 of this Manual also apply to LGUs. However, in case a
LGU reverts to the prescribed or lower salary schedule, the
following rules on step increment shall be observed:
9.3.3.1 Notwithstanding the actual salary rate of the employee

based on the higher salary schedule, his/her step
increment after reversion to the prescribed or lower
salary schedule shall be based on the years of service in
the position. Thus, an employee with 6 years of service
in the position shall be at the third step regardless of
his/her higher salary rate. To illustrate: A Planning
Officer I, SG-11, with six years of service in the
position in a municipal government of a 4th class
municipality which adopted the salary schedule for a 1st
class municipality later reverted to the salary schedule
for a 2nd class municipality:
Reverted to
th st
4 Class Adopted 1 Class 2nd Class
P8,301 P9,961 P9,961 *

3rd step 3rd step 3rd step
* same salary rate due to “no diminution in pay policy”
Upon serving 9 years in the position, he/she will be

entitled to the salary corresponding to the 4th step, but
will not receive any adjustment in pay since his/her
actual salary is still higher than the 4th step. This shall
continue until such time that his/her salary rate
equalizes the prescribed rate for his/her step in the
salary schedule being implemented by the LGU. This
rule is also applicable to municipalities converted to
cities with lower salary schedules.
9.3.4 Other Compensation, Allowances and Benefits
The following other compensation, allowances and benefits

authorized for national government personnel are likewise
granted to local government personnel subject to the criteria,
rules and regulations issued for the purpose as discussed under
Chapter 3 of this Manual and to the additional rules applicable
only to LGUs:
9-15
9.3.4.1 Representation and Transportation Allowances
9.3.4.1.1 The following LGU officials are entitled to

representation and transportation
allowances (RATA) based on the rates and
conditions indicated in the annual General
Appropriations Act (GAA):
• Provincial Governors and City/Municipal

Mayors;
• Provincial Vice-Governors, City/Municipal

Vice Mayors;
• Members of the Sangguniang

Panlalawigan/ Panlungsod/ Bayan;
• Local Government Department Heads

and their equivalents;
• Local Government Assistant Department

Heads and their equivalents; and
• Division Chiefs (for Special Cities only).
The equivalent ranks of LGU officials to

national government officials entitled to
RATA under the GAA are indicated in Annex
A of this Chapter. The maximum rates for
each type of allowance shall be based on
the percentage application of the RATA
rates for national government officials
indicated in Annex A.
9.3.4.1.2 RATA for Personnel Devolved to LGUs

Pursuant to RA No. 7160
• Municipal Agricultural Officers (MAOs)
♣ The MAO position is not entitled to

RATA since it is neither a
Department Head nor an Assistant
Department Head. However, in
line with the no-diminution-in-pay
provision of Executive Order (EO)
9-16
No. 503 dated January 22, 1992,

the devolved MAOs shall continue
to receive the total monthly RATA
in the amount of P2,200 they have
been receiving as of the
devolution.
♣ A devolved MAO appointed to the

optional local position of Municipal
Agriculturist (MA) shall be entitled
to the RATA for a Department Head
or Assistant Department Head as
the case may be in a particular
LGU.
♣ A new appointee to the MAO

psition shall no longer be entitled
to RATA.
• Social Welfare Officers (SWOs)
♣ The devolved SWOs in

municipalities are not entitled to
RATA. However, when the
devolved SWO is appointed to the
optional local position of Municipal
Social Welfare and Development
Officer (MSWDO), he/she shall be
entitled to the RATA for a
Department Head or Assistant
Department Head as the case may
be in a particular LGU.
• Rural Health Physicians (RHPs)
♣ RHPs, whether devolved or

appointed, shall be entitled to
monthly RATA of P2,200 pursuant
to RA No. 7305 or the Magna Carta
of Public Health Workers.
♣ A RHP who is appointed to the

mandatory department head
position of Municipal Health Officer
(MHO) is entitled to the RATA for a
9-17
Department Head in a particular

LGU.
9.3.4.2 Personnel Economic Relief Allowance
9.3.4.2.1 The rates of Personnel Economic Relief

Allowance (PERA) for all appointive LGU
personnel under permanent, temporary,
contractual, casual, substitute or emergency
status, shall be a percentage of the PERA
at P500 per month based on the income
classification of the LGU, as follows:
Class Provinces/Cities Municipalities

Special Cities 100%
1st Class 100% 90%
2nd Class 90% 80%
3rd Class 90% 80%
4th Class 80% 70%
5th Class 80% 70%
6th Class 80% 70%
9.3.4.2.2 In the event that a LGU has no sufficient

fund for the purpose, the grant of the
same may be partial but uniform for all
positions in the LGU.
9.3.4.2.3 However, LGUs which can afford to pay

higher than the rates authorized in the
above schedule for their particular income
classes are allowed to do so, at rates
uniformly applied to all their respective
personnel, but not exceeding P500 per
month.
9.3.4.2.4 Elective officials are not granted the PERA

since they are not among those covered by
the grant thereof pursuant to the pertinent
general provision in the annual General
Appropriations Act.
9.3.4.3 Additional Compensation
9.3.4.3.1 The rules and regulations relative to the

grant of additional compensation (ADCOM)
at P1,500 per month to national
government personnel provided under
9-18
Chapter 3 of this Manual likewise apply to

LGU personnel.
9.3.4.3.2 The grant of ADCOM covers all officials and

employees of LGUs.
9.3.4.3.3 Payment thereof is subject to availability of

9.3.4.3.4 In the event that a LGU has no sufficient

fund for the purpose, the grant of the same
maybe partial but uniform for all positions
in the LGU.
9.3.4.4 Year-End Bonus and Cash Gift
The rules and regulations on the grant of the year-end

bonus and cash gift to national government personnel
under Chapter 3 of this Manual are also applicable to
salaried local government personnel.
Item 3.9.6.3.7 of said Chapter also provides the rules

and regulations on the grant of cash gifts to barangay
officials who are paid honoraria.
9.3.4.5 Honoraria
9.3.4.5.1 Honoraria for Barangay Volunteer Frontline

Workers
The rules and regulations on the grant of

honoraria to Barangay Frontline Workers
are as follows:
• The honoraria for Day Care Workers

shall not exceed the minimum salary
rate of SG-6 of the salary schedule
being implemented by the LGU
concerned.
• The honoraria for Barangay Health

Aides/Workers (including Barangay
Nutrition Scholars, Barangay Health
Workers and other volunteer workers
of similar nature) shall not exceed the
minimum salary rate of SG-4 of the
9-19
salary schedule being implemented by

the LGU concerned.
• A Barangay Health Worker who

simultaneously serves as a Barangay
Nutrition Scholar may be granted the
honorarium as Barangay Health
Worker or as Barangay Nutrition
Scholar which is more advantageous to
him/her, but not to both honoraria.
• The grant of honoraria shall be subject

to the following conditions:
♣ That the volunteer worker is

actively performing his/her
functions relative to the
implementation of assigned
programs and projects in the
barangay;
♣ That the volunteer worker

concerned has undergone the
necessary skills and capability
training which is duly recognized by
appropriate authority or body either
in the national or local level;
♣ That the grant of honoraria shall be

charged against barangay funds.
However, this does not preclude
higher local governments to
undertake projects in the barangay
which may include payment of
honoraria to its volunteer workers
charged from their funds;
♣ That the amount of honoraria shall

not equal nor exceed those
received by the barangay officials.
In case these officials are receiving
the aforestated minimum salary
rates, the allowable honoraria for
volunteer frontline workers should
be adjusted accordingly so as to
maintain a reasonable pay gap with
9-20
the lowest paid barangay official;

and
subject to availability of funds,
and budgetary limitation on
personal services under RA No.
7160.
9.3.4.5.2 Honoraria for Barangay Human Rights

Action Officers (BHRAOs)
The BHRAO implements the Barangay

Human Rights Action Program of the
Commission on Human Rights which is
aimed to promote and protect human rights
in the grassroots level. Each Barangay
Human Rights Action Center (BHRAC)
serves as the center for complaints and
advocacy on human rights in a barangay. A
barangay is limited to one BHRAO.
• All officially designated BHRAOs may

be granted honoraria at rates not
exceeding P1,000 each per month
subject to the following conditions:
♣ That the BHRAO concerned is duly

recognized by the BHRAC National
Secretariat;
♣ That the BHRAO has satisfactorily

undergone the skills capability
training of the Commission on
Human Rights;
♣ That the BHRAO concerned is

actively performing his/her
functions relative to the
promotion and protection of human
rights in his/her community;

charged against barangay funds,
subject to the discretion of the
barangay concerned after taking
9-21
into consideration its program

priorities and financial capability;
♣ That the amount of honoraria for

BHRAOs shall not exceed those
being received by barangay
officials. In case these barangay
officials are only receiving the
minimum honoraria, the allowable
honoraria for the BHRAO should be
adjusted accordingly so as to
maintain a reasonable pay gap with
the lowest barangay official; and

subject to the budgetary limitations
under RA No. 7160.
9.3.4.5.3 Additional allowances and Other Benefits or

Honoraria for National Government
Personnel Assigned in LGUs
Pursuant to Sections 447, 458 and 468 of

RA No. 7160, the local sanggunian may
provide for additional allowances and other
benefits to judges, prosecutors, public
elementary and high school teachers and
other national government officials
stationed/assigned in a LGU, subject to the
following conditions:
• The grant thereof is not mandatory on

the part of the LGU;
• The total amount of additional

allowance and other benefits or
honoraria shall not exceed the RATA
authorized for the department heads
of the LGU concerned, subject to
availability of local government funds;
• That all contractual and statutory

obligations of the LGU including
the implementation of RA No. 6758
and the benefits mandated under RA
No. 7305 (Magna Carta of Public
9-22
Health Workers) have been fully

provided for in the budget;
• That the LGU has fully implemented

the devolution of functions/personnel
in accordance with RA No. 7160.
• That the delivery of basic services and

functions mandated under RA No.
7160 are not jeopardized;
• That the grant thereof shall be subject

to a regular review and may be
withdrawn as deemed necessary by
the LGU; and
• That the expense shall be presented in

the LGU budget under the
maintenance and other operating
expenses pursuant to item 5.5 of Local
Budget Circular No. 75 dated July 12,
2002.
9.3.4.6 Anniversary Bonus
The rules and regulations on the grant of anniversary

bonus (AB) in the national government under Chapter 3
of this Manual are also applicable to LGUs. However,
the following additional rules and regulations are
applicable only to LGUs:
9.3.4.6.1 The AB shall be granted only during

milestone years which refer to the 15th
anniversary and to every 5th year thereafter
of the founding of the LGUs;
9.3.4.6.2 The founding year of LGUs shall be as

indicated in the authentic documents
showing their establishment, or in the
enabling acts or laws creating such
localities;
9.3.4.6.3 The counting of milestone years shall start

from the year the LGUs were founded
regardless of whether they were
subsequently renamed, reclassified or
9-23
converted from one level to another, such

as barangay to municipality, municipality to
city;
9.3.4.6.4 The counting of the milestone years of an

LGU which was created by law out of the
split of an LGU and became a distinct and
separate LGU shall begin from the time of
the LGU’s separation/splitting or creation as
a separate entity; and
9.3.4.6.5 The counting of milestone years of merged

LGUs shall reckon from the date they were
merged.
9.3.4.7 Free Quarters
Provincial Governors and Provincial Vice-Governors who

have no residences within 50-kilometer radius from the
provincial capitol may be allowed free quarters, subject
to the following guidelines:
9.3.4.7.1 LGUs may provide free quarters within their

office premises to the officials concerned
who have no residences within 50-kilometer
radius from the provincial capitol.
9.3.4.7.2 Where there is not enough space to be

used as quarters, the LGU may rent houses
or rooms which shall serve as quarters at
reasonable rates based on the prevailing
cost of rental in the area or locality as
determined under Chapter 4 of the Manual
of Building Services and Real Property
Management issued under Joint DBM,
DENR and DPWH Circular No. 1, dated
September 30, 1989, provided that such
rates shall not exceed 25% of their monthly
basic salaries, and subject to the following:
9.3.4.7.2.1 The rental contract shall be

entered into by and between
the LGU concerned and the
owners of the dwelling units;
and the rental payments shall
be paid to the latter and not
9-24
commuted in favor of the

officials concerned.
9.3.4.7.2.2 Said rates shall be inclusive of

the amount for telephone,
water and electric bills, which
shall likewise be paid directly
to the utility companies.
9.3.4.7.2.3 Those who desire more

expensive/extensive quarters
other than those rented by the
LGUs may secure such
preferred quarters, provided
that the difference between
the rental cost and the
amount authorized therefor
shall be paid by the former.
9.3.4.7.3 Provision of free quarters outside of the 50-

kilometer radius from the provincial capitol,
such as in Metropolitan Manila, shall not be
allowed.
9.3.4.7.4 The amount necessary for the provision of

free quarters to the Provincial Governor and
Provincial Vice-Governor shall be charged
against the respective LGU funds.
9.3.4.8 Other Compensation, Allowances and Benefits
9.3.4.8.1 The pertinent rules and regulations on the

following other compensation, allowances
and benefits provided under Chapter 3 of
this Manual are also applicable to LGU
personnel:
• Productivity Incentive Benefits;
• Uniform/Clothing Allowance;
• Overtime Pay;
• Night Shift Differential Pay;
• Subsistence Allowance; and
9-25
• Laundry Allowance.
Their grants are subject to the personal

services limitation under RA No. 7160.
9.3.4.8.2 The rules and regulations on travel

allowance/expenses provided under Chapter
3 of this Manual are also applicable to LGU
personnel.
9.3.4.9 Compensation for Local Government Personnel

Designated to Fill Temporary Vacancies
The following rules shall apply relative to the payment

of compensation to officials and employees designated
by competent authority to fill temporary vacancies as
authorized under RA No. 7160.
9.3.4.9.1 An official or employee in an LGU other

than a special city, designated by
competent authority on a concurrent
capacity to a position lower than Assistant
Department Head but nevertheless heads a
specific area of responsibility like division
chief in provinces and cities, or section
chiefs in municipalities, may be allowed
honoraria at the rate not exceeding P1,000
per month in provinces and cities, P800 per
month in municipalities belonging to 1st to
3rd class and P600 per month for lower than
3rd class.
9.3.4.9.2 An official or employee not entitled to RATA

in his/her permanent position, designated
by competent authority on a concurrent
capacity to a position entitled to RATA, may
be granted the RATA, provided it is so
specified in the order of designation, or
honorarium at a rate not exceeding the rate
of RATA for the position where designated.
9.3.4.9.3 An official or employee entitled to RATA in

his/her permanent position designated by
competent authority on a concurrent
capacity to a higher position with higher
9-26
rate of RATA may be entitled to the

difference between the RATA of the two
positions, or honorarium authorized under
item 9.3.4.9.1, whichever is higher.
9.3.4.9.4 An official or employee entitled to RATA

designated by competent authority to a
lateral position in a concurrent capacity for
one full calendar month or more may be
paid honorarium at the rate prescribed in
item 9.3.4.9.1.
9.3.4.10 Compensation for Members of Local Regulatory

Boards/Quasi-Judicial Bodies and Similar Bodies
in LGUs
The following rules shall apply on the payment of

compensation to members of local regulatory boards/
quasi-judicial bodies and similar bodies in LGUs:
9.3.4.10.1 A member of a local regulatory and quasi-

judicial body, e.g., People’s Law
Enforcement Board (PLEB), Mining
Regulatory Board (MRB) or similar body
created pursuant to a law or Presidential
authority shall be compensated in the form
of per diem at a rate not exceeding P1,000
per meeting/session actually attended but
not to exceed 4 paid sessions or P4,000 per
month.
9.3.4.10.2 Each administrative support staff rendering

services to a board/body may be
compensated in the form of honoraria not
exceeding P200 per session but not to
exceed 4 paid sessions or P800 per month.
9.3.4.10.3 The grant of compensation shall be subject

to the following conditions:
• That no law bars them from receiving

compensation as members.
• That the grant thereof is subject to the

budgetary limitation on personal
9-27
services under Section 325 of RA No.

7160, and to availability of funds.
• That when the law expressly provides

the rate of compensation, the
pertinent provision of the law shall
prevail.
9.3.4.11 Compensation for Ex-Officio Members of the

Local Sanggunian
The rules and regulations relative to the compensation

for ex-officio members of the local sanggunian are as
follows:
9.3.4.11.1 Ex-officio members of local legislative bodies

shall receive the same compensation as that
of their counterpart elective sanggunian
officials.
9.3.4.11.2 The Municipal and City Chapter Presidents

of the Liga ng mga Barangay and the
Presidents of the Pederasyon ng mga
Sangguniang Kabataan who serve as ex-
officio members of the Sangguniang
Bayan/Panlungsod as the case may be
shall receive in full their salaries and
allowances from the concerned municipal or
city governments.
9.3.4.11.3 The elected Presidents of the Provincial

Chapter of the Liga and the Pederasyon
who sit as ex-officio members of the
Sangguniang Panlalawigan shall receive in
full their salaries and allowances from the
concerned provincial governments.
9.3.4.11.4 The respective Vice-Presidents of the Liga

and the Pederasyon who sit as ex-officio
members in the Sangguniang
Panlungsod/Bayan in lieu of the Presidents
who were elevated to the Sangguniang
Panlalawigan shall receive their full salaries
and allowances from the concerned
city/municipal governments.
9-28
9.3.4.11.5 The Presidents of the Provincial Federation

of Sanggunian Members of Municipalities
and Component Cities who sit as ex-officio
members in the Sanggunian Panlalawigan
shall receive their salaries and allowances
from the component city or municipal
governments which they represent. The
provincial governments shall appropriate
only the difference in the salary and
allowances of said officials such that their
total compensation shall be equivalent to
the compensation actually being received by
their elective counterparts in the
Sangguniang Panlalawigan.
9.3.4.11.6 The Punong Barangay and SK Chairman

who were elected as Chapter/Federation
Presidents and therefore sit as ex-officio
members in the Sangguniang
Bayan/Panlungsod may collect honoraria as
chairman of the barangay and as ex-officio
member of the Sangguniang Barangay at
rates not exceeding P1,000 and P600 per
month, respectively, provided that they
continue to perform their functions in the
barangay.
They shall not be entitled to the honoraria

adjustments authorized under Local Budget
No. 63 and the Christmas bonus from the
barangay government in line with the
constitutional prohibition on the receipt of
double compensation.
9.3.4.11.7 In the event that other officials are validly

designated to perform the functions of the
Punong Barangay and the Sangguniang
Kabataan Chairman in the barangay, the
designated officials shall be entitled to
collect reimbursable traveling and incidental
expenses not exceeding P1,000 per month
for the representative of the Punong
Barangay and P600 for the Sangguniang
Kabataan Chairman representative. Said
designated officials shall not be entitled to
Christmas bonus.
9-29
9.3.4.12 Classification of Positions and Compensation for

Barangay Personnel
Pursuant to Executive Order No. 332 dated May 16,

1996, barangay government officials are covered by the
Position Classification and Compensation System under
RA No. 6758.
The following rules on position classification and

compensation apply to barangay government officials:
9.3.4.12.1 Barangay officials shall be compensated in

the form of honoraria at the minimum rate
of P1,000 per month for the Punong
Barangay and P600 each per month for
the Sangguniang Barangay Members,
Barangay Secretary, Barangay Treasurer
and the Sangguniang Kabataan (SK)
Chairman as ex-officio member of the
Sangguniang Barangay. These minimum
rates may be increased to a maximum rate
equivalent to the first step of the following
salary grades of the salary schedule being
implemented by the city or municipality
where the barangay belongs:
• SG-14 for the Punong Barangay; and
• SG-10 for the Sangguniang Barangay

Members, Barangay Secretary, Barangay
Treasurer and the SK Chairman.
9.3.4.12.2 At the discretion of the barangay

government and in consideration of its
service requirement and the 55% limitation
on personal services appropriation, other
positions may be created and may be
compensated in the form of salaries or
honoraria at rates not exceeding the first
step of the salary grade allocation of the
following indicative positions based on the
salary schedule being implemented in the
city/municipality where the barangay
belongs:
9-30
Salary
Positions
Grade
Utility Worker I 1
Clerk I 3
Accounting Clerk I 4
Barangay Health Aide 4
Revenue Collection Clerk I 5
Day Care Worker I 6
Administrative Assistant 8
Pursuant to Budget Circular No. 2004-3

dated March 6,2004, however, the above-
listed positions have been retitled as
follows:
From To
Utility Worker I, SG- Administrative Aide I,

1 SG-1
Clerk I, SG-3 Administrative Aide

III, SG-3
Accounting Clerk I, Administrative Aide IV,

SG-4 SG-4
Administrative Administrative
Assistant, SG-8 Assistant II, SG-8
9.3.4.12.3 Positions compensated in the form of

salaries shall be allocated to their proper
position titles and salary grades in
accordance with the IOS for the Local
Government. Position titles not consistent
with the IOS shall be submitted to the DBM
for approval.
9.3.4.12.4 Barangay personnel paid salaries and whose

positions are classified in accordance with
RA No. 6758 and issued appointments in
9-31
accordance with the Civil Service law, rules

and regulations may be entitled to the
following benefits in accordance with law,
rules and regulations pertaining thereto,
provided that the total compensation of
concerned employees shall not exceed the
compensation received by the lowest
barangay officials:
• Personnel Economic Relief Allowance;
• Additional Compensation;
• Year-End Bonus and Cash Gift;
• Productivity Incentive Benefit; and
• Other benefits accruing to regular

government employees.
9.3.4.12.5 Barangay Tanods and Members of the

Lupong Tagapamayapa may be granted
honoraria, allowances and other
emoluments provided the total amount shall
not exceed the minimum salary rate for SG-
1 of the salary schedule being implemented
by the city/municipality where the barangay
belongs and provided further that such
compensation shall not exceed those of the
lowest paid barangay officials.
9.3.4.12.6 A City/Municipal Accountant who keeps and

maintains the financial records of barangay
governments are not entitled to honoraria
from the latter since such functions are part
of their regular functions in the Office of the
City/Municipal Accountant.
9.3.4.12.7 Monetization of Leave Credits of Barangay

Officials
The monetization of the leave credits of

barangay officials reckoned from the
services they rendered starting April 15,
2004, shall be paid by following the rules
and regulations provided under Civil Service
9-32
Commission and Department of Budget and

Management Joint Circular No. 1, s. 2004.
Annex A
EQUIVALENT RANKS OF LOCAL GOVERNMENT OFFICIALS

TO NATIONAL GOVERNMENT OFFICIALS ENTITLED TO RATA
% Application Department Department Department Director IV, Director III, Director I, SG-25
Category LGU/Class on National Secretary, Undersecretary, Assistant SG-28 SG-27 (Assistant (Assistant Bureau Division Chief,
RATA Rates SG-31 SG-30 Secretary, (Bureau Bureau Director) Regional Director) SG-24
SG-29 Director)
A Provinces Provincial Provincial Sanggunian Provincial Chief of Hospital

Governor, Vice- Panlalawigan Government II, SG-25
st
1 Class 100% SG-30 Governor, Member, SG-27 Assistant
2nd Class 95% SG-28 Department Head,
3rd Class 90% SG-24
4th Class 85% Provincial Chief of Hospital
5th Class 80% Government I, SG-24
6th Class 75% Department Head,
SG-26
B Special Cities 100% City Mayor, City Vice Sanggunian City Government Division Chief,
(Manila and SG-30 Mayor II, Panlungsod Assistant Department SG-24
Quezon City SG-28 Member II, Head III, SG-25
only) SG-27
City
Governmen
t
Department
Head III,
SG-27
C Highly 100% City Mayor, City Vice Sanggunian City Government Chief of Hospital
Urbanized SG-30 Mayor II, Panlungsod Member Assistant II, SG-25
Cities SG-28 II, SG-27 Department
Head II, SG-24
City Government Chief of Hospital

Department Head II, I, SG-24
SG-26
D Component City Mayor, City Vice Sanggunian City Government

Cities SG-30 Mayor I, Panlungsod Assistant
SG-26 Member I, SG-25 Department
1st Class 100% Head I, SG-23
2nd Class 95%
3rd Class 90% City Government Chief of Hospital
4th Class 85% Department II, SG-25
5th Class 80% Head I, SG-25
6th Class 75%
Chief of Hospital
I, SG-24
E Municipalities 100% Municipal Municipal Sangguniang Municipal

within Mayor II, Vice Mayor II, Bayan Member Government
Metropolitan SG-28 SG-26 II, SG-25 Assistant
Manila Department Head
II, SG-23
Municipal
Government
Department Head
II, SG-25
F Municipalities Municipal Municipal Sangguniang Municipal

outside Metro Mayor I, Vice Mayor I, Bayan Member I, Government
Manila SG-27 SG-25 SG-24 Assistant
90% Department Head
1st Class 85% I, SG-22
2nd Class 80% Municipal
3rd Class 75% Government
4th Class 70% Department Head I,
5th Class 65% SG-24
6th Class
9-33
References
Issuances Titles
Joint Commission on Local Index of Occupational Services, Position Titles and Salary
Government Personnel Grades
Administration Circular No.
37, September 30, 1989
Joint Commission on Local Changes in the Index of Occupational Services, Position

Government Personnel Titles and Salary Grades Issued Under Circular No. 37
Administration Circular No.
39, October 2, 1990
Joint Commission on Local Guidelines for the Proper Implementation of Joint

Government Personnel Commission Circular No. 39 Dated October 2, 1990
Administration Bulletin No.
10, March 7, 1991
Republic Act No. 7160, Local Government Code of 1991

October 10, 1991
Executive Order No. 503, Providing for the Rules and Regulations Implementing
January 22, 1992 the Transfer of Personnel and Assets, Liabilities and
Records of National Government Agencies Whose
Functions are to be Devolved to the Local Government
Units and for Other Related Purposes
Civil Service Commission Guidelines and Standards in the Establishment of

Memorandum Circular No. Organizational Structures and Staffing Patterns in Local
19, s. 1992, May 7, 1992 Government Units
Administrative Order No. Clarifying the Role of the Department of Budget and
42, March 3, 1993 Management in the Compensation and Classification of
Local Government Positions Under R.A. No. 7160
Local Budget Circular No. Guidelines on Compensation and Position Classification in

53, September 1, 1993 the Local Government Units
Local Budget Circular No. Guidelines for the Initial Implementation of the Revised
54, March 9, 1994 Compensation and Position Classification System in the
Local Government
Local Budget Circular No. Clarificatory Guidelines on the Initial Implementation of

54-A, August 7, 1994 the Revised Compensation and Position Classification
System for Devolved Personnel
Local Budget Circular No. Guidelines on Compensation and Position Classification in

55, March 15, 1994 the Local Government Units (LGUs)
9-34
Position Classification and Compensation Scheme in LGUs
Issuances Titles
Local Budget Circular No. Guidelines for the Implementation of the Revised
56, January 25, 1995 Compensation and Position Classification System (CPCS)
in the Local Government and Other Compensation
Matters
Local Budget Circular No. Clarificatory Guidelines on Allowances That Fall Under the
57, May 19, 1995 Personal Services (PS) Account
Local Budget Circular No. Compensation of Barangay Officials and Personnel

58, July 7, 1995
Local Budget Circular No. Guidelines for the Implementation of the Revised Rates
59, Series of 1996 of Representation and Transportation Allowances and
Uniform Allowance in the Local Government Units
Local Budget Circular No. Supplementary Guidelines on the Payment of

59-A, December 8, 1997 Representation and Transportation Allowances (RATA) to
Certain Personnel Devolved From the Department of
Health (DOH), Department of Agriculture (DA) and
Department of Social Welfare and Development (DSWD)
Local Budget Circular No. Guidelines for the Implementation of the Revised Position
60, January 25, 1996 Classification and Compensation System (PCCS) in the
Local Government
Local Budget Circular No. Revised Index of Occupational Services, Position Titles
61, March 18, 1996 and Salary Grades (IOS) in Local Government
Executive Order No. 332, Integrating the Barangay Governments Into the Revised
May 16, 1996 Position Classification and Compensation System in the
Government
Administrative Order No. Directing Strict Compliance with the Compensation

282, July 25, 1996 Standardization Law by Local Governments
Local Budget Circular No. Guidelines on the Grant of Honoraria in the Local
62, July 29, 1996 Government Units (LGUs)
Local Budget Circular No. Position Classification and Compensation of Barangay

63, October 22, 1996 Officials and Personnel
Local Budget Circular No. Guidelines for the Full Implementation of the Revised
64, January 22, 1997 Position Classification and Compensation System (PCCS)
in the Local Government
Local Budget Circular No. Guidelines on the Grant of Anniversary Bonus in the
65, March 3, 1997 Local Government
9-35
Issuances Titles
Local Budget Circular No. Guidelines on the Payment of Compensation to Ex-Officio

66, March 4, 1998 Members of the Local Sanggunian
Local Budget Circular No. Additional Guidelines on the Payment of Compensation to

66-A, August 28, 2000 Ex-Officio Members of the Local Sanggunian
Local Budget Circular No. Guidelines on the Payment of Per Diem to the Members
67, March 23, 1998 and Support Staff of the People’s Law Enforcement Board
(PLEB)
68, June 4, 1998 of Representation and Transportation Allowances and
Uniform Allowance in the Local Government Units
Local Budget Circular No. Guidelines for the Grant of Ten Percent (10%) Salary
69, March 21, 2000 Adjustment to Personnel in the Local Government
Effective January 1, 2000
Local Budget Circular No. Adoption of Higher Salary Schedule by Local Government
71, October 5, 2000 Units
Local Budget Circular No. Compensation of the Members of the Provincial/City

72, December 5, 2000 Mining Regulatory Board
Local Budget Circular No. Guidelines on the Grant of Compensation Benefit to Local
73, January 10, 2001 Regulatory Boards/Quasi-Judicial Bodies and Similar
Bodies In Provinces/Cities/Municipalities and Barangay
Volunteer Frontline Workers
Local Budget Circular No. Authority to Grant a Maximum of Five Percent (5%)
74, June 15, 2001 Salary Adjustment to Personnel in the Local Government
Units (LGUs) Effective July 1, 2001
Local Budget Circular No. Guidelines on Personal Services (PS) Limitation

75, July 12, 2002
Local Budget Circular No. Cash Gift of Barangay Officials

76, November 5, 2002
Local Budget Circular No. Clarifying Local Budget Circular No. 76 dated November
76-A, November 20, 2002 5, 2002 on the Cash Gift of Barangay Officials
Local Budget Circular No. Guidelines on the Provision of Free Quarters to Provincial
78, March 8, 2004 Governors and Vice-Governors
79, April 1, 2005 of Representation and Transportation Allowances (RATA)
in Local Government Units (LGUs)
9-36
Position Classification and Compensation Scheme in LGUs
9-35

DBM Manual On Position Classification and Compensation

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DBM Manual On Position Classification and Compensation

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FOREWORD

The Philippine Government, in administering the Position Classification and

The Manual is a comprehensive documentation of the policies, rules, regulations,

ROLANDO G. ANDAYA, JR.

Chapter 3, The Compensation Plan (CP), contains the concepts of

The Responsibility Centers in the Administration of the Position

Chapter 6, Position Classification and Compensation Scheme for

Chapter 7, Position Classification and Compensation Scheme for Faculty

Chapter 8, Position Classification and Compensation Scheme for Foreign

The Human Resource Management Officers or equivalent officers of agencies

The DBM, through the Organization, Position Classification and Compensation

Undersecretary Cynthia G. Castel, for the introduction of new ideas and

OPCCB Director Solita S. Recolizado and Assistant Director Clemente Z.

Overview of the Position Classification and

The Position Classification and Compensation System in the

1.1 The American Regime

Notwithstanding the established salary rules, the Americans were paid

1.1.1 Act No. 102

To uplift the economic status of civil servants and to attract

Based on the results of the said survey, a readjustment plan

Exempted from the Act were the officers of the Department of

With the establishment of the monetary system of the

1.2 The Commonwealth Regime

1.2.1 Commonwealth Act No. 402

To eliminate the said inequities, a Personnel and Salary

September 13, 1938. Said law was patterned after the US

CA No. 402 created a Salary Board composed of the

The law covers all officers and employees embraced in the

• Elective officers and officers whose compensation were

The law also provided for special groups of positions, the

cushion the effects of inflation, bonuses were granted to

1.3 The Philippine Republic

In 1947, when the government was reorganized, the powers and

To relieve civil servants from the economic difficulties brought about by

1.3.1 The Position Classification and Pay Plans of 1957

On June 4, 1953, the Philippine Government commissioned

The WAPCO classified positions on the bases of duties and

The Plans covered all positions in the national government and

• Elected officials and officers whose compensation were

The Position Classification Plan consisted of occupational groups,

When the Position Classification and Pay Plans were adopted on

From 1959 to the middle part of 1976, the concepts and

1.3.2 The Budgetary Reform Decree on Compensation and

With the advent of the New Society, the President issued on

“The Batasang Pambansa shall provide for the

PD No. 985 provided for the creation of the Office of

The salary schedule under PD No. 985 had 28 salary grades.

The reduction from 75 salary ranges to 28 salary grades

When PD No. 985 was issued, there were 282 occupational

The National Compensation and Position Classification System

In addition to a standardized salary system, PD No. 985

1.3.3 The Compensation and Position Classification Act of

Through the years, the increasing number of exemptions from

The law is the culmination of a painstaking study undertaken by

“The Congress shall provide for the standardization of

1.3.3.1 Principles Governing the Position Classification

The PCCS is governed by principles enunciated in RA

• All government personnel shall be paid just and

• Basic compensation for all personnel in the

• The total compensation provided for government

• A review of government compensation rates taking

1.3.3.2 Positions Covered by the PCCS