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This Circular is issued to:

1.1 provide the rules and regulations on the grant of Extra Cash Gift for 2002 as approved by the President; and

1.2 supersede Budget Circular No. 2002-3, dated November 8, 2002.

2.0
  Coverage  

The benefit herein authorized shall apply to all government personnel, whether elected or appointed in a permanent, temporary or casual status, including contractual personnel whose employment is in the nature of a regular employee, who are in the service as of October 31, 2002, in agencies covered by or following Republic Act (R.A.) No. 6758, the Salary Standardization Law.

In the case of entities exempt from R.A. No. 6758, Section 8.0 of this Circular shall apply.

3.0
  Rules and Regulations  

3.1 Government officials and employees who have rendered at least a total or an aggregate of four (4) months of service in 2002 and are still in the service as of October 31, 2002 shall be entitled to the Extra Cash Gift of not more than FIVE THOUSAND PESOS (P5,000) each.

3.2 Those who have rendered less than four (4) months of service from January 1, 2002 to October 31, 2002 and still in the service as of October 31, 2002 shall be entitled to the Extra Cash Gift but pro-rated as follows:

                                                     

Length of Service		Percentage
3 months but less than 4 months		40%
2 months but less than 3 months		30%
1 month but less than 2 months		20%
less than 1 month		10%

 

3.3 Payment shall be made not later than December 15, 2002. 

3.4 The grant of Extra Cash Gift by LGUs shall be optional.

4.0
  Funding Source  

4.1 Funds to pay this benefit shall be charged against available savings in allotment/cash allocation of the department/agency. 

4.1.1 Savings in allotment shall refer to such portions or balances of the agency's released budget free of any obligation or encumbrance and are no longer intended for specific purpose/s, such as:

4.1.1.1 after completion of the work/activity for which the appropriation is authorized; 

4.1.1.2 arising from unpaid compensation and related costs pertaining to vacant positions; or 

4.1.1.3 as a result of improved systems and procedures, cost saving measures and efficiency where the agency was able to meet and deliver the required or planned targets, programs and services approved in the annual budget at a lesser cost.

4.1.2 Savings in cash allocation shall refer to the free portion of the Notice of Cash Allocation after all agency requirements up to the end of the year have been satisfied.

4.2 In case of deficiency in allotment and/or cash allocation, agencies shall immediately submit to the DBM office concerned, the fund status as of November 30, 2002, through the following reports: 

4.2.1 Statement of Allotment, Obligations and Balances
4.2.2 Summary List of MDS Checks Issued and Cancelled, and
4.2.3 Status of Cash in Banks (Savings, Current and Time Deposit Accounts)

4.3 In the case of GOCCs, GFIs and LGUs, the funds necessary to implement this Circular shall be charged against their respective funds; provided, that said amount shall be within their approved annual corporate/local budgets.

4.4 GOCCs, GFIs and LGUs which do not have adequate or sufficient funds, may partially implement the benefit, provided that the partial implementation shall be uniform for all positions.

5.0
  Budgeting Rules  

5.1 Heads of agencies are reminded to observe the priorities in the use of savings as provided under Section 55 of the General Provisions of R.A. No. 9162, the 2002 General Appropriations Act (GAA).

5.2 Department Secretaries are authorized to pool the available savings in allotment/cash allocation of their bureaus/offices, including regional offices and attached agencies (except GOCCs and GFIs). 

5.2.1 All heads of bureaus/regional offices/attached agencies shall submit to the Department Secretary concerned the computed savings in allotment/cash allocation for the year. 

5.2.2 The Department Secretary may authorize the transfer of excess savings in allotment of bureaus/regional offices/attached agencies to bureaus/regional offices/attached agencies with deficient savings in allotment in accordance with existing budgeting and accounting rules and regulations. 

5.2.3 Likewise, the Department Secretary shall determine the amounts of available cash allocation to be transferred from the MDS Sub-Account of one bureau/regional office/attached agency to another. Said transfer shall be coordinated with the DBM Central/Regional Office so that the necessary arrangements can be made with the MDS-Government Servicing Banks concerned.

6.0
Additional Requirements/Conditions  

6.1 No program or service shall be sacrificed as a result of the grant/payment of the benefit authorized herein.

6.2 The implementing rules and regulations issued by the Public Sector Labor-Management Council (PSLMC) for Executive Order No. 180, dated June 1, 1987, particularly Section 3, Rule VIII thereof, on the non-negotiability of benefits which require appropriation of funds, shall be strictly observed in the grant of the herein and other benefits.

7.0
  Prior Payments of Similar Benefits  

Payments made by heads of departments/agencies/GOCCs/GFIs/LGUs for additional incentives, bonuses, cash gifts or other allowances of similar nature outside of that authorized under R.A. No. 6686, as amended, shall be considered advance compliance with the provisions of this Circular. Thus, departments/agencies/GOCCs/GFIs/LGUs that have already made such payments can no longer pay the extra cash gift, provided that payments made in excess of the maximum rate prescribed shall be refunded accordingly; and that payments made for less than the maximum amount may be adjusted/upgraded by granting the difference thereof, subject to their financial capability.

  8.0
Entities Exempted from or not Following the Salary Standardization Law (SSL)  

Memorandum Order No. 20 issued by the President on June 25, 2001, to rationalize compensation in SSL exempt entities, provides that any increase in compensation not in accordance with the SSL shall be subject to the approval of the President. Consistent therewith, the benefit provided herein may be granted to their officials and employees subject to the same conditions provided in this Circular at the same rate specified herein, provided that, there shall be no grant of other additional incentives, bonuses, cash gifts or similar benefits outside of those authorized herein and under R.A. No. 6686, as amended.

9.0
  Responsibility of the Head of Agency  

The head of department/agency concerned shall be held personally liable for any payment of benefit not in accordance with the provisions of this Circular without prejudice, however, to the refund thereof by the employee concerned.

10.0
  Reporting Requirement  

The head of department/agency shall submit to the DBM not later than January 31, 2003, a report on the implementation of the benefit by accomplishing the attached form (Annex A hereof).

11.0
  Saving Clause  

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

12.0
Effectivity  

This Circular takes effect immediately.

Adopted: 28 Nov. 2002

(SGD.) EMILIA T. BONCODIN
  Secretary