GUIDELINES FOR THE GRANT OF TEN PERCENT (10%) SALARY ADJUSTMENT TO ALL GOVERNMENT PERSONNEL EFFECTIVE JANUARY 1, 2000

This Circular is being issued to prescribe rules and regulations to
govern the implementation of new salary schedules in the Government
under paragraphs 5.1.1 and 5.2 hereof as mandated under Executive Order
(EO) No. 219 dated March 20, 2000, providing for 10% salary adjustment
over the monthly basic salaries as of December 31, 1999 of government
personnel, effective January 1, 2000.

2.0       COVERAGE

All positions whether permanent, temporary, contractual, casual or
emergency in nature, appointive or elective, on full-time or part-time
basis now existing or hereafter created in the national government,
state universities and colleges and government-owned and/or controlled
corporations and financial institutions.

3.0       EXEMPTIONS

3.1       Officials and employees of agencies which are exempt from
the coverage of the Position Classification and Compensation System
and/or do not follow the Salary Schedule prescribed for government
employees.

3.2       Uniformed Personnel of the Philippine National Police.

4.0       DEFINITION OF TERMS

4.1       The present salary of an incumbent for purposes of this
Circular shall mean the actual basic salary rate received as of December
31, 1999, exclusive of Personnel Economic Relief Allowance (PERA),
Additional Compensation, Representation and Transportation Allowances,
bonus and cash gift, honorarium, the 20% premium over basic pay of
contractual personnel and any other forms of additional compensation
usually paid in addition to basic salary but inclusive of transition
allowance.

4.2       Transition allowance shall mean the excess of the present
salary over the eighth step of the grade allocation of the employee’s
position.

5.0       COMPENSATION RULES

5.1       For Civilian Personnel

5.1.1 The salary grades in the Salary Schedule prescribed under RA
6758 and the corresponding salary grade allocation of positions
pursuant thereto shall be maintained. For purposes of the salary
adjustment herein authorized, the monetary value of each salary step is
hereby adjusted effective January 1, 2000, as indicated in the following
Salary Schedule:

5.1.2 Incumbents shall receive the salary rates corresponding to
their designated salary steps in the salary grade allocation of their
positions as of December 31, 1999.

5.1.3 The transition allowance shall be considered as advance
entitlement of the salary increase herein authorized. Any excess
thereafter shall be deducted from whatever salary adjustments that such
employee may be authorized in the future (Illustrative Examples A and
A-1).

5.1.4 Appointments effective January 1, 2000 and thereafter shall
be at the first step of the salary grade allocation of the position
prescribed under Item 5.1.1 hereof. In case the appointee has previously
received under an approved permanent appointment, a salary higher than
the first step of the salary grade allocation, the existing salary rules
shall apply as contained in Annex C of NBC 458.

5.1.5 The Personnel Economic Relief Allowance and Additional
Compensation shall continue to be paid as allowances and are not
considered integrated into the basic salary rates contained in the new
Salary Schedule and therefore not subject to tax pursuant to Section 4
of Executive Order (EO) No. 219.

5.1.6 Contractual employees including seconded personnel to
Foreign-Assisted Projects (FAPs) whose salaries are paid out of lump-sum
appropriations or project funds shall be entitled to salary adjustment
corresponding to their comparable regular provisions of RA 8760, the FY
2000 GAA and Section 2.1.1 of CSC-DBM Joint Circular No. 99-7, dated
December 29, 1999, contractual personnel shall no longer be entitled to
the 20% premium over the basic pay.

5.1.7 The Wage Rates of daily paid employees shall be computed by
dividing the monthly salary rate shown in the Salary Schedule indicated
under Item 5.1.1 hereof by twenty-two (22) working days, provided that
the total wages received by a daily paid employee in a month shall not
exceed said monthly salary rate.

5.1.8 The appropriate rates contained in the said Salary Schedule
as the case maybe, shall be used as basis for computing retirement pay,
year-end bonus and other similar benefits.

5.2       For Uniformed Personnel. The uniformed personnel
of the Department of National Defense, the Bureau of Jail Management and
Penology, Bureau of Fire Protection, Philippine Coast Guard and the
Commissioned Officers and Enlisted Personnel of the NAMRIA shall be paid
in accordance with the following Salary Schedule:

The Uniformed Personnel of the Philippine National Police shall be
paid in accordance with the provisions of Republic Act (RA) No. 8551 and
RA No. 8760, the FY 2000 GAA and the implementing guidelines issued
therefor.

6.0       PROHIBITION

6.1       Heads of all national government agencies and corporate
entities are prohibited from granting any adjustment in excess of the
amounts herein authorized.

6.2       In accordance with Section 6, Article VII and Section 10,
Article VI of the Constitution, the salary adjustment of the President,
the Vice-President, and the Members of the House of Representatives
shall take effect only after the expiration of their respective present
terms, and with the Senators, only after the expiration of the term of
all the incumbent Senators.

7.0       FUNDING SOURCE

The funding sources for the amounts necessary to implement the new Salary Schedule shall be as follows:

7.1       For national government agencies, the amount shall be
charged against their savings and from the Salary Adjustment Fund under
RA 8760, the 2000 General Appropriations Act.

7.1.1 Agencies with fiscal autonomy are enjoined to fund their
salary adjustment within the PS funds released to them pursuant to
National Budget Circular No. 466 dated December 17, 1999.

7.1.2 The requirements for non-permanent employees including
contractual positions in FAPs shall be sourced from their respective
lump sum appropriations for salaries/wages reflected in the agency
budget.

7.2       For government corporations and financial institutions,
the amount shall come from their respective corporate funds. Government
corporations which do not have adequate or sufficient funds shall only
partially implement the established rates, provided, that any partial
implementation shall be uniform and proportionate for all positions in
each government corporation.

8.0       RELEASE OF FUNDS

8.1       The Department of Budget and Management (DBM) shall
release the covering Notice of Cash Allocation (NCA) needed to implement
the salary adjustment for permanent employees.

8.2       Requests for additional release for non-permanent
positions except contractual positions in FAPs shall not be allowed. The
cost to implement their salary adjustment shall be solely charged from
their respective released lump sum appropriations.

9.0       PAYMENT OF SALARY ADJUSTMENT

9.1       Upon receipt of the NCA, agencies shall pay the required salary adjustment authorized herein.

9.2       Any salary adjustment under this Circular shall be subject
to appropriate adjustments if found not in order upon review by DBM.

9.3       The Head of the agency shall notify the official/employee
of any salary adjustment in accordance with this Circular through a
Notice of Salary Adjustment (For individuals, ANNEX A *). A copy of this
notice shall be furnished the GSIS, if the official/employee is a
member thereof.

9.4       For officials/employees covered by similar information,
such as classification of position, salary grade, present salary and
adjusted salary, a Notice of Salary Adjustment (For Groups, Annex B *)
shall be issued in lieu of the form prescribed in Section 9.3.A copy of
the Notice shall be furnished the GSIS if the beneficiaries are members
thereof.

10.0    POST-AUDIT

10.1    All Government Owned and/or -Controlled
Corporations/Government Financial Institutions shall prepare for the
purpose of the Circular, a Plantilla of Personnel and Salary Adjustment
Form (PPSAF) as prescribed in Annex C^[*]. A separate PPSAF shall be prepared for contractual, casual and emergency positions.

10.2    The original and three (3) copies of each of the said PPSAF
which shall be certified correct by the Human Resource Management
Officer/Administrative Officer and approved by the Head of the
government agency shall be submitted for post-audit within thirty (30)
days after the grant of the salary adjustment to the Budget and
Management Bureau “D” (BMB “D”), DBM which shall examine and verify the
said PPSAF based on its records and certify them accordingly. The
certified copies shall then be distributed as follows:

10.2.1      one copy to the Civil Service Commission Regional Office and Field Office concerned;

10.2.2      one copy to the Commission on Audit, for compliance with auditing requirements;

10.2.3      one copy to the Office of origin; and

10.2.4      the original shall remain with the BMB “D” for records, control and post-audit purposes.

11.0    RESPONSIBILITY OF THE HEAD OF AGENCY

The Head of agency shall be responsible for the submission of the
required reports. He shall be held personally liable for any payment of
salary adjustment not in accordance with the provisions of the Circular,
without prejudice however, to the refund of any excess payment by the
employee concerned.

12.0    CONTRIBUTIONS

The salary adjustments herein authorized are subject to the
mandatory requirements of GSIS life and retirement insurance premiums,
and Home Development Mutual Fund (HDMF) contribution, if the recipient
is a member of the GSIS and HDMF, pursuant to RA 660 and CA 186 with
respect to retirement and life insurance premiums.

13.0    SAVING CLAUSE

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

14.0    EFFECTIVITY

This Circular shall take effect January 1, 2000.

Adopted: 21 March 2000

(SGD.) BENJAMIN E. DIOKNO
Secretary

^[*]Annexes are Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City)