WHEREAS, the Philippine Government has adopted the modified Salary Schedule for civilian personnel and the Base Pay Schedule for military and uniformed personnel authorized in the Senate and the House of Representatives Joint Resolution No. 4 approved on 17 June 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 said Joint Resolution;

WHEREAS, the third tranche of the Salary Schedule and Base Pay Schedule have been implemented effective 1 June 2011 for personnel in NGAs, GOCCs, and GFIs, and effective 1 January 2012 for personnel in LGUs; and

WHEREAS, Republic Act (R.A.) No. 10155, the FY 2012 General Appropriations Act (GAA), provides appropriations under the Miscellaneous Personnel Benefits Fund (MPBF) for the implementation of the fourth tranche of the Salary Schedule and Base Pay Schedule for personnel in NGAs.

NOW, THEREFORE, I, BENIGNO S. AQUINO III, 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 7 March 1994, and Senate and House of Representatives Joint Resolution No. 4 do hereby order and direct:

SECTION 1. Coverage and Exclusion.

(a) Civilian Personnel - The compensation adjustments due to the implementation of the fourth 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.

(b) Military and Uniformed Personnel - The compensation adjustments due to the implementation of the fourth 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 whose services are engaged through job orders, contracts of services, or others similarly situated; and

(ii) Civilian personnel in government entities which are exempted from Republic Act (R.A.) No. 6758, œCompensation and Position Classification Act of 1989,  as amended, and are authorized by law to adopt and are actually implementing their own compensation and position classification systems approved by the Office of the President.

SECTION 2. Implementation of the Fourth Tranche Monthly Salary Schedule for Civilian Personnel of the National Government. The Salary Schedule attached as Annex œA,  which is the fourth tranche of the Salary Schedule provided in item (4)(b) of Joint Resolution No. 4, shall be implemented effective 1 June 2012 for national government personnel. However, for the President of the Philippines , Vice President, and Cabinet Secretaries, the fourth tranche shall be effective 1 July 2012 .

SECTION 3. Implementation of the Fourth Tranche Monthly Base Pay Schedule for Military and Uniformed Personnel. The Base Pay Schedule attached as Annex œB,  which is the fourth tranche of the Base Pay Schedule in item (8) of Joint Resolution No. 4, shall be implemented effective 1 June 2012 .

SECTION 4. Implementation of the Fourth Tranche Monthly Salary Schedule for LGU Personnel. The implementation of the fourth tranche of the Salary Schedule for LGU personnel shall be determined by the sanggunian based on 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 œA,  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 œA 
	For Provinces/Cities
Special Cities	100%	For Municipalities
1 st Class	100%	90%
2 nd Class	95%	85%
3 rd Class	90%	80%
4 th Class	85%	75%
5 th Class	80%	70%
6 th Class	75%	65%

For this purpose, the Department of Budget and Management shall issue the œFourth Tranche Monthly Salary Schedule for Local Government Personnel  for each LGU income class to take effect not earlier than 1 January 2013 .

SECTION 5. Inapplicability to Certain Officials. In accordance with Section 10, Article VI of the Constitution, no increase in compensation of Senators and Members of the House of Representatives shall take effect until after the expiration of the full term of all the Members of the Senate and the House of Representatives approving such increase.

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 MPBF in the FY 2012 GAA and from available savings. Thereafter, such amounts as may be needed shall be included in the annual GAA;

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

(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 with lower rates than, but at uniform percentages of the salaries in Annex œA. 

(b) LGUs which do not have adequate or sufficient funds to implement the salaries authorized for their LGU income classes shall implement salary schedules with lower rates than, but at uniform percentages of the rates in the œFourth Tranche Monthly Salary Schedule for Local Government Personnel  for the respective LGU income classes.

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

SECTION 9. Separability Clause. If any provision of this Executive Order is declared invalid, or unconstitutional, the other provisions not affected thereby shall remain valid and subsisting.

SECTION 10. Effectivity. This Executive Order shall take effect immediately.

Done in the City of Manila this 30 th day of April, in the year of our Lord, Two Thousand and Twelve.

	(Sgd.) BENIGNO S. AQUINO III
	President of the Philippines
By the President:
(Sgd.) PAQUITO N. OCHOA, JR.
Executive Secretary

References: Annex A and Annex B