Government pay hike takes effect July 1

MANILA, Philippines – Government employees will receive higher salaries starting July 1, Malacañang announced yesterday.

The implementation of the pay hike came after Congress earlier granted President Arroyo the authority to effect a new compensation program that will increase salaries of state workers by an average of 50 percent spread over four years, Malacañang said yesterday.

Executive Secretary Eduardo Ermita said Mrs. Arroyo thanked lawmakers for their move that set “the minimum wage of civil servants higher than those of their private sector counterparts starting next month.”

“Aimed at attracting skilled and competent personnel to work in government and retaining them on the long-term, as well as assuaging the economic conditions of the government’s workforce, the new program will raise salaries of teachers and nurses, and doctors on entry by 54 percent and 84 percent, respectively,” Ermita said.

“The impact of such a program will be such that by July 1, 2009, the daily minimum wage of P402 of government workers, consisting of basic salary and the Personnel Economic Relief Allowance (PERA), will be higher than that of their private sector counterparts which remains P382,” he said.

All government personnel of the executive, legislative and judicial branches; constitutional commissions; state colleges and universities, government-owned and controlled corporations (GOCC), government’s financial institutions (GFI), and local government units (LGUs) will be covered by the program.

The initial implementation covering national government, GOCC, and GFI employees will begin on July 1, 2009. Local government workers, on the other hand, will have to wait six months or until Jan. 1, 2010, “to enjoy the initial benefits,” he said.

Funds to be used for national government workers will be charged against specific allocations under the 2009 General Appropriations Act, while those for local government workers will be sourced from their respective local funds, based on their income class and subject to limitations on personnel services as provided under the Local Government Code, he said.

“Similarly, GOCCs and GFIs shall tap their corporate funds under their approved corporate operating budgets to implement the program. If funds are insufficient, GOCCs and GFIs will have to partially implement the established rates of increase for the year,” he said.

Allowances under the new compensation program are to be rationalized and categorized as follows: Standard Allowances and Benefits, such as PERA, and year-end bonus and cash gift; Specific Purpose Allowances and Benefits, like representation and transportation allowance; subsistence allowance, hazard pay; and Incentives, including loyalty incentive, anniversary bonus, and productivity enhance incentives, Ermita said. –Paolo Romero, Philippine Star