WHEREAS, position classification and compensation plans have been developed for government employees in the Philippines, specifically for the career executive service and the civil service proper;
WHEREAS, the problems facing government personnel assigned abroad call for a compensation plan that is suitable for their situation;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution do hereby order and decree:
SECTION 1. Title. This Decree shall be known as the "Foreign Service Compensation Decree of 1978."
SEC. 2. Declaration of Policy. A system of compensation standards and policy is hereby established for personnel of the Philippine government who are stationed abroad, taking into account fluctuations in value among the various currencies of the world, differing rates of price level change in the various countries of assignments, while being consistent with the national compensation and position classification system of the Philippines.
SEC. 3. Definition of Terms. When used in this Decree, the term —
SEC. 4. Position Classification and Compensation. The President shall establish the position classification plan and basic salary levels of foreign service personnel upon the recommendation of the Secretary of Foreign Affairs and the Commissioner of the Budget: Provided, That the initial classification and salary rated of Chiefs of Missions, Foreign Service Officers, and foreign service staff officers and employees shall be as established under Presidential Decree No. 905 until otherwise modified under the provisions of this Decree; Provided, Further, That rules and regulations governing the salaries of foreign affairs officers and of staff officers and employees at the time of appointment, the salaries of alien clerks and employees, the administrative establishment of salary differentials, the compensation of officers primarily in charge, and the classification of positions in the foreign service shall be approved by the President upon recommendation of the Secretary of Foreign Affairs and the Commissioner of the Budget: Provided, Finally, That, The President shall determine, upon recommendation of the Secretary of Foreign Affairs and the Commissioner of the Budget, the equivalence to foreign service positions, of the position classification of personnel stationed abroad, of agencies other than the Department of Foreign Affairs, for purposes of computing the applicable allowances.
SEC. 5. Allowances. The President shall establish a system of allowances for foreign services personnel which shall include the following:
SEC. 6. Overseas allowance. The overseas allowance established under this Decree shall be adjusted periodically, upward or downward, for each foreign service post, on the basis of official price indices and/or currency fluctuations in the foreign posts. For this purpose, the Secretary of Foreign Affairs with the assistance of the Governor of the Central Bank of the Philippines shall compile and evaluate on continuing basic, international price indices including those approved by the United Nations for its own personnel, as basis for recommending periodic adjustment of overseas allowance. The Secretary of Foreign Affairs, the Commissioner of the Budget and the Governor of the Central Bank shall jointly recommend to the President, such periodic adjustments in overseas allowance as they may find necessary but not oftener than once a year.
SEC. 7. Currency conversion. The basic salary of foreign service personnel shall be paid in Philippine pesos or equivalent in foreign currency at the Central Bank foreign exchange conversions rate prevailing at time of remittance. Fluctuations in exchange rate shall be compensated for through the overseas allowance established under this Decree. Retirement benefits, accumulated leaves and other similar privileges shall be paid to foreign service personnel in pesos or equivalent in foreign currency using the prevailing Central Bank foreign exchange rate and subject to applicable Central Bank rules and regulations in cases where foreign service personnel retire abroad.
SEC. 8. Payment of allowances. Allowances of foreign service personnel stationed abroad may be denominated in US Dollars or the currency of the post at which a foreign service staff member is assigned.
SEC. 9. Income taxes. The basic salary and allowances of foreign service personnel shall be subject to income tax under applicable internal revenue laws: Provided, That overseas allowance shall be considered as being paid to and received by the personnel concerned in furtherance of the interests of the Republic of the Philippines, for purposes of determining the tax status of said overseas allowance.
SEC. 10. Accumulated leaves. Upon retirement, death, resignation or separation from the service of any officer or employee in the foreign service, unenjoyed vacation or sick leave credits shall be computed on the basis of actual salary and shall be paid in Philippine pesos and otherwise shall be on the same basis as home office personnel who retire in the Philippines: Provided, That any accumulated leaves earned as of the effectivity of this Decree may be paid to officers and employees leaving the service on the basis of applicable rules and regulations existing prior to this Decree.
SEC. 11. Rules and Regulations. The rules and regulations necessary to implement this Decree, including position classification, rated of basic salary and allowances, currency denomination of allowances, shall be issued by the President upon recommendation of the Secretary of Foreign Affairs and the Commissioner of the Budget: Provided, That the Commissioner of the Budget shall promulgate, with the approval of the President, the transitional measures needed to be adopted with respect to compensation, allowances and other fringe benefits of foreign service personnel other those in the Department of Foreign Affairs, subject to the availability of funds within the agency concerned.
SEC. 12. Repeal Clause. All acts, Executive Orders, Decrees, rules and regulations or parts thereof which are inconsistent with the provisions of this Decree are hereby repealed or amended accordingly, including Title II, Parts C, D and E, and Title VI, Part A of R.A. No. 708 (as amended) and P.D. No. 905.
SEC. 13. Effectivity. This Decree shall take effect immediately.
Done in the City of Manila, this 13th day of January, in the year of Our Lord, nineteen hundred and seventy-eight.
(Sgd.) FERDINAND E. MARCOS
President of the Philippines
By the President: (Sgd.) JACOBO C. CLAVE Presidential Executive Assistant