TO:	All Heads of Ministry/Bureau/Office/
		Agency of the National Government
	The Minister of the Budget The Chairman, Civil Service Commission

WHEREAS, performance is the basic factor considered for promotion and salary increase;

WHEREAS, across the board salary increases are inconsistent with the merit recognition program of government personnel administration and cannot always be supported by available government funding;

WHEREAS, LOI No. 562 issued on June 23, 1977, established a mechanism for merit increase in Government;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby Order a more aggressive implementation of the merit increase program to reward the most deserving government employees;

1. All heads of Ministry/Office/Agency of the national government shall implement more systematically and aggressively the merit increase program as provided by LOI No. 562.
   
   
2. The Minister of the Budget shall set aside million in CY 1980, for purposes of doubling the amount originally provided for merit increase purposes in the CY 1980 budget program. The shall be charged to the Salary Adjustment Fund.
   
   
3. The Minister of the Budget and the Chairman, Civil Service Commission, shall review the existing rules and regulations and criteria for merit increases with the aim of expanding those originally provided under LOI No. 562, liberalizing their applicability and of enabling job performance to be more amply and expeditiously rewarded.
   
   
4. No salary increases shall be given on the ground that the employee is retiring in the near future and for the purpose of enabling him to collect a greater retirement gratuity.  The Minister of the Budget and the Chairman of the Civil Service Commission shall define and otherwise establish the necessary criteria go as to prevent "pre-retirement" increases.
   
   
5. Each Ministry/Bureau/Office/Agency of the government shall have a Merit Increase Committee which shall be responsible for evaluating proposals for merit increase and for recommending on these to the agency head concerned.  All proposals for merit increase shall be posted on an agency bulletin board or otherwise made known to agency officials and employees prior to recommendation/approval, so as to allow employee opinion and protests to be duly heard and considered.  The Chairman of the Civil Service Commission shall establish an appeals mechanism.
   
   
6. A merit increase shall not be automatically carried over to a higher position by an employee who had earlier been granted a merit increase.  In general, good performance may be recognized by a merit increase, by promotion to a higher position, or both.  The Minister of the Budget and the Chairman of the Civil Service Commission shall determine the circumstances under which, merit increases may be carried to a higher position.
   
   
7. The rules and regulations needed to implement this Letter shall be formulated jointly by the Minister of the Budget and the Chairman of the Civil Service Commission.

Done in the City of Manila, this 12th day of May, in the year of Our Lord, nineteen hundred and eighty.