PBBM issues EO on gov’t workers’ pay hike, medical allowance

By Ruth Abbey Gita-Carlos, Philippine News Agency

EO 64, inked by Marcos on Aug. 2, covers all civilian government personnel in the executive, legislative, and judicial branches, constitutional commissions, and other constitutional offices. (PCO file photo)

MANILA – President Ferdinand R. Marcos Jr. has issued an executive order (EO) granting a four-tranche salary increase and a medical allowance to government workers.

EO 64, inked by Marcos on Aug. 2, covers all civilian government personnel in the executive, legislative, and judicial branches, constitutional commissions, and other constitutional offices.

There will also be a pay hike among those who are working in government-owned or -controlled corporations (GOCC) not covered by Republic Act (RA) 10149 or the GOCC Governance Act of 2011, as well as all personnel of local government units (LGUs), regardless of their appointment status, according to the new EO.

Marcos ordered the increase in salaries of government personnel to “attract, retain, and engage high-performing civil servants.”

“Given the prevailing economic circumstances, including the erosion of purchasing power due to inflation, there is a need to update the salaries and benefits of government workers, thereby promoting social justice, integrity, efficiency, accountability, and excellence, and ultimately translating to increased productivity and higher quality public services,” the EO read.

The salary increase does not apply to individuals working in government through job orders, contracts of service, consultancy, or service contracts with no employer-employee relations, and GOCCs covered by a separate Compensation and Position Classification System (CPCS) established by the Governance Commission for GOCCs (GCG) and approved by the President.

Based on EO 64, the first of the four tranches of the salary increase for government workers took effect on Jan. 1 and will be given retroactively.

The second tranche will be implemented on Jan. 1, 2025, while the third and fourth tranches will start on the same date in 2026 and 2027.

For covered GOCCs, the retroactive application of the first tranche will be subject to the entities’ capacity to pay and compliance with other requirements under existing laws.

The rates in LGUs will be determined based on the class and financial capability of each LGU.

The funding requirements for salary increase in national government agencies will be charged against any available appropriations under RA 11975 of the 2024 General Appropriations Act or any other available appropriations.

For GOCCs, the budget will be taken from their respective corporate funds in the corporate operating budgets approved by the DBM.

The funds for the pay hike among LGU personnel will be charged against their respective local governments.

The basic pay of village personnel will be in the form of honoraria, while their year-end bonus based on the monthly honoraria as of Oct. 31 of the year and PHP5,000 worth of cash gift may also be given to them.

Medical allowance

On top of the salary increase, qualified government personnel will also receive an annual medical allowance not exceeding PHP7,000 starting in 2025, as a subsidy for the availment of health maintenance organization or HMO-type benefits.

The grant of the medical allowance will be subject to the conditions and guidelines that will be issued by the Department of Budget and Management (DBM) or the GCG.

Government officials and employees with HMO-based health care services under special laws, as well as officials and employees in the legislative and judicial branches and other offices vested with fiscal autonomy, are excluded from the grant of the medical allowance.

“The heads of the foregoing agencies and offices may grant a similar medical allowance to their employees to continue to procure allowable HMO plans, subject to the limitations and guidelines that the DBM may issue in consultation with the said offices,” EO 64 read.

Funding requirements for medical allowance for next year and succeeding fiscal years will be included in the National Expenditure Program as a component of the Standard Allowances and Benefits of the Total Compensation Framework, subject to the approval of Congress.

EO 64 takes effect immediately upon publication in the Official Gazette or a newspaper of general circulation.