WHEREAS, the Philippine Government has adopted the modified Salary Schedule of civilian personnel covered by Republic Act (R.A.) No. 6758, “Compensation and Position Classification Act of 1989,”, as amended, and the Base Pay Schedule for military and uniformed personnel contained in the Senate and the House of Representatives Joint Resolution No. 4, s. 2009, approved on June 17, 2009, which shall be implemented in four (4) yearly tranches for personnel in national government agencies (NGAs);

WHEREAS, for personnel in government-owned or –controlled corporations (GOCCs), government financial institutions (GFIs), and local government units (LGUs), the implementation of the modified Salary Schedule shall be in at least four (4) years, depending on their financial capabilities, pursuant to item (13) of Joint Resolution No. 4;

WHEREAS, the first tranches of the modified Salary Schedule and Base Pay Schedule have been implemented effective July 1, 2009 for personnel in NGAs, GOCCs, and GFIs, and effective January 1, 2010 for personnel in LGUs;

WHEREAS, R.A. No. 9970, the FY 2010 General Appropriations Act (GAA), provides for the second tranche implementation of the modified Salary Schedule and Base Pay Schedule for personnel in NGAs;

NOW, THEREFORE, I. GLORIA MACAPAGAL ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, Presidential Decree No. 985, Presidential Decree No. 1597, R.A. No. 6758, as amended by the Senate and House of Representatives Joint Resolution No. 01 approved on March 7, 1994, and Senate and House of Representatives Joint Resolution No. 4, s. 2009, do hereby order and direct:

SECTION 1. Coverage and Exclusion -

(a) Civilian Personnel – The compensation adjustment due to the implementation of the second tranche of the modified Salary Schedule shall cover all positions for civilian personnel in the Executive, Legislative, and Judicial Branches, the Constitutional Commissions/Offices, State Universities and Colleges, GOCCs, GFIs, and LGUs, whether regular, casual, or contractual in nature, appointive or elective, on full-time or part-time basis, now existing or hereafter created, subject to the pertinent provisions herein.

(b) Military and Uniformed Personnel – The compensation adjustments due to the implementation of the second tranche of the modified Base Pay Schedule shall cover the military personnel under the Department of National Defense (DND) and uniformed personnel under the Department of the Interior and Local Government (DILG), Philippine Coast Guard (PCG), and National Mapping and Resource Information Authority (NAMRIA).

(c) The following are excluded from the coverage of the compensation adjustments:

(i) Individuals and groups of people whose services are engaged through job orders, contracts of service, or others similarly situated; and
(ii) Civilian personnel in government entities which are exempted from R.A. No. 6758 and are authorized by law to adopt and are actually implementing their respective compensation and position classification systems approved by the Office of the President.

SECTION 2. Implementation of the Second Tranche Monthly Salary Schedule for Civilian Personnel of the National Government – This Salary Schedule, attached as Annex “A”^*, which is the second tranche of the modified Salary Schedule provided in item (4)(b) of Joint Resolution No. 4, shall be implemented effective June 24, 2010 for personnel in NGAs and in GOCCs and GFIs: Provided, However, that this second tranche implementation shall not apply to officials and employees whose terms of office are coterminus with the incumbent President of the Philippines, including the coterminus employees of these officials.

SECTION 3. Implementation of the Second Tranche Monthly Base Pay Schedule for Military and Uniformed Personnel - This Base Pay Schedule, attached as Annex “B”^*, which is the second tranche of the modified Base Pay Schedule in item (8) of Joint Resolution No. 4, shall be implemented effective June 24, 2010.

SECTION 4. Implementation of the Second Tranche Monthly Salary Schedule for LGU Personnel – The implementation of the Second Tranche of the modified Salary Schedule for LGU personnel shall be determined by the sanggunian, on the basis of the LGU income class and financial capability: Provided, That such salary rates shall not exceed the following applicable percentages of the salary rates in Annex “A”, pursuant to item (7)(a) of Joint Resolution No. 4: Provided, Further, That the resulting Personal Services (PS) cost shall not exceed the PS limitation in LGU budgets, as provided under Sections 325(a) and 331(b) of R.A. No. 7160: Provided, Finally, That there shall be no diminution in the basic salaries of incumbents for purposes of complying with said PS limitation.

Percentages of Salary Rates in Annex “A”

	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%

For this purpose, the Department of Budget and Management shall issue the Second Tranche Monthly Salary Schedule for Local Government Personnel for each LGU income class which shall take effect not earlier than January 1, 2011, as may be determined by the sanggunian.

SECTION 5. Applicability to Certain Constitutional Officials – Pursuant to Section 6 of Article VII and Section 10 of Article VI of the Constitution, the salaries prescribed herein shall not apply to the incumbent President of the Philippines, Vice- President of the Philippines, and Members of Congress including Senators whose full term will expire in the year 2013.

SECTION 6. Fund Sources – The fund sources for the amounts necessary to implement the provisions of this Executive Order shall be as follows:

(a) For NGAs, the amounts shall be charged against the appropriation set aside for the purpose under the Miscellaneous Personnel Benefits Fund in the FY 2010 GAA and from any available savings in the FY 2010 budget.

(b) For GOCCs and GFIs, the amounts shall be charged against their respective corpo- rate funds in the approved corporate operating budgets.

(c) For LGUs, the amounts shall be charged against their respective local government funds.

SECTION 7. Uniform Implementation in Case of Insufficiency of Funds –

(a) GOCCs and GFIs which do not have adequate or sufficient funds shall implement salary schedules which shall be at uniform percentages of the salary rates in Annex “A”.

(b) LGUs which do not have adequate or sufficient funds to implement the salaries prescribed for their LGU income classes shall implement salary schedules which shall be at uniform percentages of the salary rates in the Second Tranche Monthly Salary Schedules for Local Government Personnel.

SECTION 8. Implementing Rules and Regulations – The Department of Budget and Management (DBM) shall prepare and issue the necessary rules and regulations to implement this Executive Order.

SECTION 9. Effectivity – This Executive Order shall take effect immediately.

(SGD.) GLORIA M. ARROYO

By the President:

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