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(NAR) VOL. 10 NO. 2 / APRIL - JUNE 1999

[ DBM CORPORATE COMPENSATION CIRCULAR NO. 10, February 15, 1999 ]

RULES AND REGULATIONS FOR THE IMPLEMENTATION OF THE REVISED COMPENSATION AND POSITION CLASSIFICATION SYSTEM PRESCRIBED UNDER R.A. NO. 6758 FOR GOVERNMENT-OWNED AND/OR CONTROLLED CORPORATIONS (GOCCS) AND FINANCIAL INSTITUTIONS (GFIS)



1.0 Purpose

This Circular is being issued in compliance with Section 23 of R.A. No. 6758, entitled, "An Act Prescribing A Revised Compensation and Position Classification System In The Government and For Other Purposes", mandating the Department of Budget and Management (DBM) to prepare and issue the necessary guidelines to implement the mandate of said law within sixty (60) days after its approval.

2.0 Coverage

The Compensation and Position Classification System referred to herein shall apply to all positions, whether permanent, casual, temporary, contractual, on full or part-time basis, now existing or hereafter created in GOCCs/GFIs whether they perform governmental or proprietary functions.

3.0 Exemptions

3.1 Positions in corporations created under the General Corporation Law, those acquired through foreclosures, and those not covered by the civil service law but by the labor law; and

3.2 Student laborers, apprentices and other similar positions.

4.0 Definition Of Terms

4.1 The present salary of an incumbent for purposes of this Circular shall refer to the sum total of actual basic salary including allowances enumerated hereunder, being received as of June 30, 1989 and authorized pursuant to P.D. No. 985 and other legislative or administrative issuances:

4.1.1
Cost-of-Living Allowance/Bank Equity Pay (COLA/BEP) equivalent to forty percent (40%) of basic salary or P300.00 per month, whichever is higher;
 
4.1.2
Amelioration Allowance equivalent to ten percent (10%) of basic salary or P150.00 per month, whichever is higher;
 
4.1.3
COLA granted to GOCCs/GFIs covered by the Compensation and Position Classification Plan for the regular agencies/offices of the National Government and to GOCCs/GFIs following the Compensation and Position Classification Plan under LOImp. No. 104/CCC No. 1 and LOImp. No. 97/CCC No. 2, in the amount of P550.00 per month for those whose monthly basic salary is P1,500 and below, and P500 for those whose monthly basic salary is P1,501 and above, granted on top of the COLA/BEP mentioned in Item 4.1.1 above;
 
4.1.4
Stabilization Allowance; and
 
4.1.5
Allowances/fringe benefits converted into "Transition Allowance" pursuant to Memorandum Order No. 177, as implemented by Corporate Budget Circular No. 15, both series of 1988.

4.2 Allowances enumerated above are deemed integrated into the basic salary for the position effective July 1, 1989.

4.3 Transition Allowance for purposes of this Circular, shall mean the excess of the present salary of the incumbent as defined in item 4.1 above, over the eighth step of the Salary Grade to which his position is allocated.

5.0 Implementing Procedures

5.1 All existing positions and those that thereafter will be created in GOCCs/GFIs shall be allocated to the appropriate classes on the basis of the nature of duties and responsibilities and qualification requirements of the position and in accordance with the herein prescribed Index of Occupational Services (IOS), marked as Annex A* which forms as an integral part of this Circular.

5.2 In cases where there are no appropriate classes in the herein prescribed IOS suitable for the operational needs and/or to the established management policy of the GOCCs/GFIs consistent with their corporate programs/plans, creation of new classes unique and appropriate to their operations shall be allowed and included in the same IOS.

5.3 The salary grade allocation for the position of heads of GOCCs/GFIs shall be determined by applying the following factors:

5.3.1 Mandated functions whether policy formulation, program monitoring/coordination, program planning/implementation and/or administrative support services.
  
5.3.2 Volume of business/area covered/scope of operation.
  
5.3.3 Total of government equity actually granted/authorized capitalization, networth, and assets.

In no case shall the salary grade allocation for the position of Chairman, President, General Manager or Administrator and members of the Board of Directors of GOCCs/GFIs exceed Salary Grade 30; Provided, however, that the President of the Philippines may, in truly exceptional cases, approve higher compensation for the aforesaid officials.

5.4 The following allowances/fringe benefits which were authorized to GOCCs/GFIs under the standardized Position Classification and Compensation Plan prescribed for each of the five (5) sectoral groupings of GOCCs/GFIs pursuant to P.D. NO. 985, as amended by P.D. NO. 1597, the Compensation Standardization Law in operation prior to R.A. NO. 6758, and to other related issuances are not to be integrated into the basic salary and allowed to be continued after June 30, 1989 only to incumbents of positions who are authorized and actually receiving such allowances/benefits as of said date, at the same terms and conditions provided in said issuances.

5.4.1 Representation and Transportation Allowances (RATA)
  
5.4.2 Uniform and Clothing Allowance;
  
5.4.3 Hazard Pay as authorized by law;
  
5.4.4 Honoraria/additional compensation for employees on detail with special projects or inter-agency undertakings;
  
5.4.5 Honoraria for services rendered by researchers, experts and specialists who are of acknowledged authorities in their fields of specialization;
  
5.4.6 Honoraria for lecturers and resource persons/speakers;
  
5.4.7 Overtime Pay as authorized by law;
  
5.4.8
Laundry and subsistence allowances of marine officers and crew, on board GOCCs/GFIs owned vessels and used in their operations, and of hospital personnel who attend directly to patients and who by nature of their duties are required to wear uniforms;
  
5.4.9 Quarters Allowance of officials and employees who are entitled to the same;
  
5.4.10 Overseas, Living Quarters and other allowances presently authorized for personnel stationed abroad;
  
5.4.11 Night Differential of personnel on night duty;
  
5.4.12 Per Diems of members of the governing Boards of GOCCs/GFIs at the rate as prescribed in their respective Charters;
  
5.4.13 Flying Pay of personnel undertaking aerial flights;
  
5.4.14 Per Diems/Allowances of Chairman and Members/Staff of collegial bodies and Committees; and
  
5.4.15 Per Diems/Allowances of officials and employees on official foreign and local travel outside of their official station.

5.5 The following allowances/fringe benefits authorized to GOCCs/GFIs pursuant to the aforementioned issuances are not likewise to be integrated into the basic salary and allowed to be continued only for incumbents of positions as of June 30, 1989 who are authorized and actually receiving said allowances/benefits as of said date, at the same terms and conditions prescribed in said issuances

5.5.1 Rice Subsidy;

5.5.2 Sugar Subsidy;

5.5.3 Death Benefits other than those granted by the GSIS;

5.5.4 Medical/dental/optical allowances/benefits;

5.5.5 Children's Allowance;

5.5.6 Special Duty Pay/Allowance;

5.5.7 Meal Subsidy;

5.5.8 Longevity Pay; and

5.5.9 Teller's Allowance.

5.6 Payment of other allowances/fringe benefits and all other forms of compensation granted on top of basic salary, whether in cash or in kind, not mentioned in Sub-Paragraphs 5.4 and 5.5 above shall continue to be not authorized. Payment made for such unauthorized allowances/fringe benefits shall be considered as illegal disbursement of public funds.

5.7 To insure consistency of application of the classification and salary grade allocation system herein prescribed among positions in GOCCs/GFIS, the DBM through its Compensation and Position Classification Bureau (CPCB), shall first assign classes under the classification plan previously authorized the GOCCs/GFIs to the new classes in the prescribed IOS.

5.8 The GOCCs/GFIs concerned shall, upon receipt of the prescribed IOS, prepare the corresponding Position Allocation List (PAL) following the attached format marked as Annex B and submit same to DBM through CPCB for evaluation and approval.

5.9 GOCCs/GFIs shall prepare five (5) copies of a Plantilla of Positions in accordance with the organization structure/staffing pattern previously approved for them by the DBM following the attached format marked as Annex C* and submit same to DBM through CPCB within thirty (30) days from receipt of the duly approved PAL. The CPCB shall certify and approve same in accordance with the condition stipulated in Item 5.7 above.

Any GOCC/GFI presently adopting an organization structure/staffing pattern other than the one approved by the DBM shall likewise submit a Plantilla of Positions based on existing organization structure/staffing pattern which will likewise be evaluated and approved by the DBM simultaneous with the evaluation and certification/approval of the position classification and salary grade/rate allocation.

Within thirty (30) days from receipt of the Plantilla of Positions from GOCCs/GFIs, the DBM through CPCB shall distribute the certified and approved copies as follows:

5.9.1
two (2) copies to the Civil Service Commission (CSC) Field Office concerned for attestation, and thereafter, one (1) copy duly attested will be furnished the GOCC/GFI concerned;
  
5.9.2 one (1) copy to the Commission on Audit (COA), for compliance with the usual auditing rules and regulations;
  
5.9.3one (1) copy to the originating GOCC/GFI concerned for proper implementation; and
  
5.9.4 the original copy shall remain with the CPCB for records and control purposes and post-audit.

5.10 Upon receipt of the duly approved/certified PAL, payment of the salary adjustments, if any, can be made as soon as the plantilla or payroll for the purpose has been prepared and approved by the governing Board of the GOCC/GFI concerned without waiting for the return of the certified copy of the Plantilla of Positions from the CPCB.

5.11 Any salary adjustment under this Circular shall be subject to appropriate adjustments if upon review by DBM it is found to be not in order. The recipient official/employee shall refund any overpayment made.

5.12 Heads of GOCCs/GFIs shall notify the official/employee of any change in his position title, salary grade and salary adjustment, if any, through a Notice of Position Allocation and Salary Adjustment following the attached format marked as Annex D*. Copy of said Notice shall be furnished the GSIS if the official/employee is a member thereof.

6.0 Compensation Rules

6.1 No incumbent of the position shall suffer a reduction in present salary as a result of the implementation of this standardization.

6.2 An incumbent whose present salary is below the first step of the salary grade allocation of his position shall receive the first step of the salary grade.

6.3 An incumbent whose present salary falls between the steps of the salary grade allocation of the position shall be entitled to the next higher step.

6.4 An incumbent whose present salary coincides with any of the step of the salary grade allocation of the position shall be allowed to continue to receive his present salary.

6.5 An incumbent whose present salary exceeds the eighth step of the salary grade allocation of the position shall be allowed to continue to receive that salary; Provided, that the excess shall be granted in the form of a "transition allowance" and subject to the following:

6.5.1
The "transition allowance" shall be reduced by the amount of salary adjustment that the incumbent shall receive in the future.
 
6.5.2
The "transition allowance" shall be treated as part of basic salary for purposes of computing retirement pay; year-end bonus; GSIS premium, loans, benefits; and other similar benefits.

6.6 Original appointments shall be paid corresponding to the first step of the salary grade allocation of the position.

6.7 Contractual employees whose salaries are paid out of lump sum appropriations shall be afforded the same salary adjustments as those of regular employees, subject to the following:

6.7.1
The adjusted salary rate shall be deemed inclusive of the thirty percent (30%) premium allowed for professional positions covered by National Compensation Circular No. 53 for Foreign Assisted Projects (FAPs);
 
6.7.2
If the present salary, as defined in Item 4.1 above, of such contractual employee is below the first step or the minimum hiring rate of the grade allocation of the comparable regular position, he will be allowed the first step plus the twenty percent (20%) premium;
 
6.7.3
If the present salary coincides with the first step or the minimum hiring rate of the grade allocation of the comparable regular position, he will be allowed to continue to receive his present salary, plus twenty percent (20%) premium;
 
6.7.4
If the present salary exceeds the first step or the minimum hiring rate of the grade allocation of the comparable regular position, the employee concerned shall be allowed to continue to receive his present salary, provided, that the excess over the first step shall treated as the 20% premium. If the excess is below 20%, he will be allowed the difference. If more than 20%, he will be allowed to continue to receive same only up to the expiration of the contract.

6.8 Compensation of consultants and experts hired by GOCCs/GFIs for a limited period to perform specific activities or services with definite expected outputs, as well as their hiring, shall be subject to the approval of the DBM and the CSC in accordance with the policies, rules and regulations provided in the General Provision of the annual General Appropriations Act.

6.9 The Wage Rates of daily paid employees shall be computed by dividing the monthly salary rate prescribed in the Salary Schedule under R.A. No. 6758 by twenty-two (22) days; Provided, that the total wages received by a daily paid employee in any one month shall not exceed said monthly rate; and, Provided further, that those daily paid employees having present salary in excess of the eighth step or the maximum of the salary grade allocation of the position shall be afforded the conditions stipulated in Sub-Paragraph 6.5 of this Circular.

7.0 Salary Schedule

7.1 The Salary Schedule that will be used for the positions that are paid on the annual or monthly rate basis shall be as prescribed under Section 7 of R.A. No. 6758.

7.2 All salaries in said Schedule expressed as monthly rates in pesos shall represent full compensation for full-time employment, regardless of where the work is performed. Salaries for services rendered on a part-time basis shall be adjusted proportionately.

7.3 The DBM shall update said Schedule only whenever there are across-the-board salary adjustments as may be provided by law; Provided, however, that in cases of mandated across-the-board salary adjustments, incumbent of the position shall retain his assigned Salary Step.

8.0 Limitations/Prohibitions

Officials/employees of the COA, other government offices/agencies, GOCCs/GFIs and local government units assigned to any GOCC/GFI to provide services which are part of the regular functions of their positions and/or of the mandated governmental functions of their mother agencies are prohibited from receiving, and GOCCs/GFIs are prohibited from paying such officials/employees, salaries, honoraria, bonuses, allowances or other emoluments, whether in cash or in kind.

GOCCs/GFIs are likewise prohibited from assessing or billing other government entities, GOCCs/GFIs and local government units for services rendered by their officials/employees as part of their regular functions for purposes of paying additional compensation of said officials/employees.

9.0 Funding Source

Funds that will be required in the implementation of this Circular shall be taken fully from the corporate funds of the GOCC/GFI concerned, subject to the approval by their respective governing Board.

10.0 Reporting Requirements

The Chief Accountant of each corporation shall submit to the DBM two copies of report of actual payments made in the implementation of this Circular based on the information contained in the Plantilla of Positions certified by the CPCB and accompanied by information as to where the funds used were taken, within thirty (30) days after implementation/payment has been made. (Annex E*)

11.0 Responsibility Of The Head Of Corporation

The head of the GOCCs/GFIs shall be responsible for the submission of the required reports mentioned in this Circular. He shall be held personally liable for any inaccuracy in the allocation of positions and salary adjustments, and for non-submission of the required reports, without prejudice, however, to the refund of any excess payment by the employee concerned.

12.0 Contributions

Changes in salary of incumbents of positions as a result of the implementation of the standardization herein prescribed shall be subject to the mandatory requirements of the GSIS life and retirement insurance premiums if the recipient is a member thereof.

13.0 Repealing Clause

13.1 As provided in Section 16 of R.A. No. 6758, all laws, decrees, executive orders, corporate charters, and other issuances or parts thereof, that exempt agencies from the coverage of the System, or that authorize and fix position classification, salaries, pay rates or allowances of specified positions, or group of officials and employees or of agencies, which are inconsistent with the System, including the proviso under Section 2, and Section 16 of P.D. No. 985 are hereby repealed.

13.2 Pursuant to Section 22 of R.A. No. 6758, all laws, decrees, orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly. However, as provided under Section 21 of said Act, all provisions of P.D. No. 985, as amended by P.D. No. 1597, which are not inconsistent with any of the provision of R.A. No. 6758 and are not expressly modified, revoked, or repealed by said Act shall continue to be in full force and effect.

14.0 Saving Clause

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

15.0 Effectivity

As mandated under Section 23 of R.A. No. 6758, the revised Compensation and Position Classification System and other provisions of said Act shall take effect July 1, 1989 and shall be implemented in accordance with the terms and conditions under this Circular.

Adopted: 15 Feb. 1999

(SGD.) BENJAMIN E. DIOKNO
Secretary




* Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.

* Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.

* Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.
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