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This Circular is being issued to prescribe rules and regulations to govern the implementation of new salary schedules in the Government under paragraphs 5.1.1 and 5.2 hereof as mandated under Executive Order (EO) No. 219 dated March 20, 2000, providing for 10% salary adjustment over the monthly basic salaries as of December 31, 1999 of government personnel, effective January 1, 2000.

2.0       COVERAGE

All positions whether permanent, temporary, contractual, casual or emergency in nature, appointive or elective, on full-time or part-time basis now existing or hereafter created in the national government, state universities and colleges and government-owned and/or controlled corporations and financial institutions.

3.0       EXEMPTIONS

3.1       Officials and employees of agencies which are exempt from the coverage of the Position Classification and Compensation System and/or do not follow the Salary Schedule prescribed for government employees.

3.2       Uniformed Personnel of the Philippine National Police.

4.0       DEFINITION OF TERMS

4.1       The present salary of an incumbent for purposes of this Circular shall mean the actual basic salary rate received as of December 31, 1999, exclusive of Personnel Economic Relief Allowance (PERA), Additional Compensation, Representation and Transportation Allowances, bonus and cash gift, honorarium, the 20% premium over basic pay of contractual personnel and any other forms of additional compensation usually paid in addition to basic salary but inclusive of transition allowance.

4.2       Transition allowance shall mean the excess of the present salary over the eighth step of the grade allocation of the employee’s position.

5.0       COMPENSATION RULES

5.1       For Civilian Personnel

5.1.1 The salary grades in the Salary Schedule prescribed under RA 6758 and the corresponding salary grade allocation of positions pursuant thereto shall be maintained. For purposes of the salary adjustment herein authorized, the monetary value of each salary step is hereby adjusted effective January 1, 2000, as indicated in the following Salary Schedule:

5.1.2 Incumbents shall receive the salary rates corresponding to their designated salary steps in the salary grade allocation of their positions as of December 31, 1999.

5.1.3 The transition allowance shall be considered as advance entitlement of the salary increase herein authorized. Any excess thereafter shall be deducted from whatever salary adjustments that such employee may be authorized in the future (Illustrative Examples A and A-1).

5.1.4 Appointments effective January 1, 2000 and thereafter shall be at the first step of the salary grade allocation of the position prescribed under Item 5.1.1 hereof. In case the appointee has previously received under an approved permanent appointment, a salary higher than the first step of the salary grade allocation, the existing salary rules shall apply as contained in Annex C of NBC 458.

5.1.5 The Personnel Economic Relief Allowance and Additional Compensation shall continue to be paid as allowances and are not considered integrated into the basic salary rates contained in the new Salary Schedule and therefore not subject to tax pursuant to Section 4 of Executive Order (EO) No. 219.

5.1.6 Contractual employees including seconded personnel to Foreign-Assisted Projects (FAPs) whose salaries are paid out of lump-sum appropriations or project funds shall be entitled to salary adjustment corresponding to their comparable regular provisions of RA 8760, the FY 2000 GAA and Section 2.1.1 of CSC-DBM Joint Circular No. 99-7, dated December 29, 1999, contractual personnel shall no longer be entitled to the 20% premium over the basic pay.

5.1.7 The Wage Rates of daily paid employees shall be computed by dividing the monthly salary rate shown in the Salary Schedule indicated under Item 5.1.1 hereof by twenty-two (22) working days, provided that the total wages received by a daily paid employee in a month shall not exceed said monthly salary rate.

5.1.8 The appropriate rates contained in the said Salary Schedule as the case maybe, shall be used as basis for computing retirement pay, year-end bonus and other similar benefits.

5.2       For Uniformed Personnel. The uniformed personnel of the Department of National Defense, the Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine Coast Guard and the Commissioned Officers and Enlisted Personnel of the NAMRIA shall be paid in accordance with the following Salary Schedule:

The Uniformed Personnel of the Philippine National Police shall be paid in accordance with the provisions of Republic Act (RA) No. 8551 and RA No. 8760, the FY 2000 GAA and the implementing guidelines issued therefor.

6.0       PROHIBITION

6.1       Heads of all national government agencies and corporate entities are prohibited from granting any adjustment in excess of the amounts herein authorized.

6.2       In accordance with Section 6, Article VII and Section 10, Article VI of the Constitution, the salary adjustment of the President, the Vice-President, and the Members of the House of Representatives shall take effect only after the expiration of their respective present terms, and with the Senators, only after the expiration of the term of all the incumbent Senators.

7.0       FUNDING SOURCE

The funding sources for the amounts necessary to implement the new Salary Schedule shall be as follows:

7.1       For national government agencies, the amount shall be charged against their savings and from the Salary Adjustment Fund under RA 8760, the 2000 General Appropriations Act.

7.1.1 Agencies with fiscal autonomy are enjoined to fund their salary adjustment within the PS funds released to them pursuant to National Budget Circular No. 466 dated December 17, 1999.

7.1.2 The requirements for non-permanent employees including contractual positions in FAPs shall be sourced from their respective lump sum appropriations for salaries/wages reflected in the agency budget.

7.2       For government corporations and financial institutions, the amount shall come from their respective corporate funds. Government corporations which do not have adequate or sufficient funds shall only partially implement the established rates, provided, that any partial implementation shall be uniform and proportionate for all positions in each government corporation.

8.0       RELEASE OF FUNDS

8.1       The Department of Budget and Management (DBM) shall release the covering Notice of Cash Allocation (NCA) needed to implement the salary adjustment for permanent employees.

8.2       Requests for additional release for non-permanent positions except contractual positions in FAPs shall not be allowed. The cost to implement their salary adjustment shall be solely charged from their respective released lump sum appropriations.

9.0       PAYMENT OF SALARY ADJUSTMENT

9.1       Upon receipt of the NCA, agencies shall pay the required salary adjustment authorized herein.

9.2       Any salary adjustment under this Circular shall be subject to appropriate adjustments if found not in order upon review by DBM.

9.3       The Head of the agency shall notify the official/employee of any salary adjustment in accordance with this Circular through a Notice of Salary Adjustment (For individuals, ANNEX A *). A copy of this notice shall be furnished the GSIS, if the official/employee is a member thereof.

9.4       For officials/employees covered by similar information, such as classification of position, salary grade, present salary and adjusted salary, a Notice of Salary Adjustment (For Groups, Annex B *) shall be issued in lieu of the form prescribed in Section 9.3.A copy of the Notice shall be furnished the GSIS if the beneficiaries are members thereof.

10.0    POST-AUDIT

10.1    All Government Owned and/or -Controlled Corporations/Government Financial Institutions shall prepare for the purpose of the Circular, a Plantilla of Personnel and Salary Adjustment Form (PPSAF) as prescribed in Annex C^[*]. A separate PPSAF shall be prepared for contractual, casual and emergency positions.

10.2    The original and three (3) copies of each of the said PPSAF which shall be certified correct by the Human Resource Management Officer/Administrative Officer and approved by the Head of the government agency shall be submitted for post-audit within thirty (30) days after the grant of the salary adjustment to the Budget and Management Bureau “D” (BMB “D”), DBM which shall examine and verify the said PPSAF based on its records and certify them accordingly. The certified copies shall then be distributed as follows:

10.2.1      one copy to the Civil Service Commission Regional Office and Field Office concerned;

10.2.2      one copy to the Commission on Audit, for compliance with auditing requirements;

10.2.3      one copy to the Office of origin; and

10.2.4      the original shall remain with the BMB “D” for records, control and post-audit purposes.

11.0    RESPONSIBILITY OF THE HEAD OF AGENCY

The Head of agency shall be responsible for the submission of the required reports. He shall be held personally liable for any payment of salary adjustment not in accordance with the provisions of the Circular, without prejudice however, to the refund of any excess payment by the employee concerned.

12.0    CONTRIBUTIONS

The salary adjustments herein authorized are subject to the mandatory requirements of GSIS life and retirement insurance premiums, and Home Development Mutual Fund (HDMF) contribution, if the recipient is a member of the GSIS and HDMF, pursuant to RA 660 and CA 186 with respect to retirement and life insurance premiums.

13.0    SAVING CLAUSE

Cases not covered by the provisions of this Circular shall be referred to the Secretary of Budget and Management for resolution.

14.0    EFFECTIVITY

This Circular shall take effect January 1, 2000.

Adopted: 21 March 2000

(SGD.) BENJAMIN E. DIOKNO
Secretary

^[*]Annexes are Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City)