WHEREAS, certain health functions and responsibilities of the Department of Health have been devolved to local government units on 31 December 1992 pursuant to Republic Act No. 7160, otherwise known as the Local Government Code of 1991;

WHEREAS, the efficient and effective discharge of such devolved health functions and responsibilities by local government units depends greatly on the moral and social and economic well being of their health workers;

WHEREAS, Section 19 of Republic Act No. 7305, the Magna Carta of Public Health Workers, stipulates that the salary scales of public health workers whose salaries are appropriated by local government units shall not be less than those provided for public health workers of the National Government.

WHEREAS, the adoption of the fund allotment system, prescribed under Department of Budget and Management and Commission on Audit Joint Circular No. 93-2 (Budget Operations Manual for Local Government Units) issued pursuant to Section 354 of the Local Government Code, will not only expedite devolved hospital financial and procurement operations but also ensure better accountability in the usage of public funds;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by law, upon the recommendation of the Chairman of the Oversight Committee constituted under Section 533 of the Local Government Code, do hereby order and direct:

SECTION 1. Section 5(c) of Executive Order No. 164 dated 8 March 1994 shall be deemed amended insofar as the devolved public health workers are concerned to read as follows:

"The salary scales of public health workers devolved to or appointed by local government units shall follow the same salary scales for health workers of the National Government under the Revised Compensation and Position Classification System implemented through Order No. 164.

Local government units do not have adequate or sufficient funds to pay the salary increases herein authorized shall only partially implement the established rates uniformly and proportionately for all health worker positions."

SECTION 2. Local government units shall prepare, or revise if they have already prepared, their 1995 annual budgets to give the highest priority to the funding requirements of their devolved health responsibilities, inclusive of the benefits guaranteed by law for their health workers, devolved or otherwise.

SECTION 3. Provincial governments shall pass the necessary ordinances to implement the following: (a) expansion of the coverage of their fund allotment system, as prescribed under Joint Circular No. 93-2 of the Department of Budget and Management and the Commission on Audit, to include their devolved hospitals; and (b) rationalization of the usage and deployment of their devolved hospitals and other health facilities, which may include consolidation or merger, privatization and inter-local joint financing.

SECTION 4. The Secretary of Health shall extend the necessary technical and financial assistance to the local government units in the exercise of their devolved health functions and responsibilities.

SECTION 5. The rules and regulations to implement this Order shall be jointly issued by the Secretaries of Health, Interior and Local Government, and Budget and Management.

SECTION 6. This Order shall take effect immediately.

Adopted: 13 Dec. 1994

(SGD.) FIDEL V. RAMOS
President