WHEREAS, Congress through RA No. 8244 has appropriated the amount of Twenty-Seven Billion Pesos (P27,000,000,000), or so much thereof as may be necessary, for the fourth and final year of implementation of the salary increases authorized by Joint Senate-House of Representatives Resolution No. 01, Series of 1994, for all national government civilian and uniformed personnel, in two (2) payments: 1) effective January 1, 1997 equivalent to fifty percent (50%) of the unimplemented balance as of December 31, 1996 of the basic pay corresponding to the Salary Grade concerned, and 2) effective November 1, 1997 the remaining fifty percent (50%) of said unimplemented balance to effect full salary adjustment;

WHEREAS, the government has adopted with some modifications the Salary Schedule in the revised Compensation and Position Classification System for the government recommended by Congress through said Joint Resolution No. 01 for implementation within four (4) years or not later than 1997;

WHEREAS, through said Joint Resolution the Senate and House of Representatives have also categorically recognized and acknowledged the authority of the President of the Philippines to revise the existing Compensation and Position Classification System in the government under the standards and guidelines therein provided;

WHEREAS, it has been determined more appropriate for an effective compensation administration to adopt a 33-Grade Salary Schedule instead of the 35-Grade Salary Schedule recommended by Congress;

WHEREAS, said Salary Schedule as modified to 33-Salary Grades was partially implemented in 1994, 1995 and 1996 through Executive Order Nos. 164, 218 and 290, respectively;

WHEREAS, consultations have also been made with various leagues of local government units regarding the full implementation of the said Salary Schedule.

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, P.D. No. 985, P.D. No. 1597, RA No. 6758, RA No. 8244 and said Joint Resolution No. 1 of Congress, do hereby order and direct:

SECTION 1. Salary Schedule. The 35-Grade Salary Schedule for Civilian personnel recommended by Congress through Senate-House of Representatives Joint Resolution No. 1, s. 1994, and adopted under Executive Order No. 164, dated March 7, 1994 with modifications, is hereby modified to 33-Grades Salary Schedule consistent with those prescribed in RA No. 6758.

SECTION 2. Full Implementation. The Department of Budget and Management is hereby directed to implement in full in FY 1997 the remaining balance of said Salary Schedule after the partial implementation made of the same in 1994, 1995 and 1996 to Civilian and uniformed personnel, as follows:

1. For Civilian Personnel

a. Effective January 1, 1997 = in accordance with the Fourth Interim Salary Schedule hereto attached and marked as Annex A of this Order. The adjustment shall be to the designated salary step of the employee in the salary grade allocation of his position as of December 31, 1996;

b. Effective November 1, 1997 = in accordance with the attached Salary Schedule marked as Annex B of this Order. The adjustment shall be to the designated salary step of the employee in the salary grade allocation of his position as of October 31, 1997.

2. For Uniformed Personnel

In accordance with the attached Fourth Interim Salary Schedule marked as Annex C of this Order for the implementation effective January 1, 1997 and with the Salary Schedule marked as Annex D for the full implementation effective November 1, 1997.

SEC. 3. Coverage and Exemption. This Order shall cover only officials and employees of the National Government Agencies (NGAs), Government-Owned and/or Controlled Corporations (GOCCs), Government Financial Institutions (GFIs) and Local Government Units (LGUs) whose basic salaries conform to the Third Interim Salary Schedule prescribed under Executive Order No. 290, dated January 2, 1996. Officials and employees of agencies who are exempted by law from the Compensation and Position Classification System and/or do not follow the Salary Schedule prescribed for government personnel are not entitled to the salary increases authorized herein.

SEC. 4. Salary Grade Allocation of Positions. The salary grade allocation of positions pursuant to RA No. 6758 shall be maintained.

SEC. 5. Continuation of the Personnel Economic Relief Allowance (PERA) and Additional Compensation (ADCOM). The PERA and ADCOM authorized under R.A.. No. 7078 and Administrative Order No. 53, respectively, shall continue to be paid as allowances and not integrated into the basic pay.

SEC. 6. Transition Allowance. The transition allowance resulting from the implementation of RA No. 6758 and other personnel and compensation actions thereafter, including the œover and above allowance  of public school teachers and related personnel shall be considered as advance payment of the salary increases authorized herein; Provided, That, in the case of public school teachers and related personnel said œover and above allowance  shall first be added to the salary rate in the equivalent salary grade and step under the Salary Schedule marked Annex B before determining the appropriate salary step in the salary grade allocation of their position in the new Salary Schedule.

SEC. 7. Allowances and Benefits Based on Percentage of Basic Salaries. Notwithstanding the salary increases authorized herein, there shall be no corresponding increase in the present allowances and benefits being received by officials and employees which are based on a percentage of their basic salaries.

SEC. 8. Flexibility for Local Government Units. Flexibility is hereby given to each LGU to set its own schedule for the implementation of the herein authorized salary increases depending on its financial capability: Provided, That, the implementation of the same shall be in accordance with the schedule prescribed for civilian personnel in Section 1 hereof, and the percentage application under Section 10 of RA No. 6758 strictly complied with.

SEC. 9. Separation from Government Service. For those who will be compulsorily separated from government service for having reached the age of mandatory retirement, or due to death, sickness/disability in 1997 but before the full implementation effective November 1, 1997, their retirement/separation benefits, gratuity and payment of accumulated leave credits shall be computed on the basis of the salary rate in Salary Schedule in Annex B hereof corresponding to their previous designated salary step; Provided, That, those who will be compulsorily retired on account of having reached the age of mandatory retirement will be given the option to retire pursuant to RA No. 660 and the difference between the lump-sum amount that the retiree will receive under RA No. 660 and the amount of retirement benefit had the employee retired under RA 1616, shall be paid to the retiring employee by the last employer.

SEC. 10. Funding Source. The funding sources for the amounts necessary to implement the herein authorized salary increases shall be as follows:

a. For NGAs, the amount shall be charged against the P27.0 Billion appropriated for the purpose under said RA No. 8244 and accordingly set aside for the purpose in their respective budgets for FY 1997.

b. For GOCCs and GFIs, the amount shall be charged against their respective corporate funds.

c. For LGUs, the amount shall be charged against their respective funds.

GOCCs, GFIs and LGUs which do not have adequate or sufficient funds to pay the salary increases prescribed herein, may only partially implement the established rated; Provided, That, any partial implementation shall be fixed at a uniform percentage such that no official or employee shall receive a percentage adjustment higher than that of any other official/employee in the same corporate entity and local government unit.

SEC. 11. Prohibition. Pursuant to Section 4 of said RA No. 8244, the salary adjustment herein authorized shall not benefit the President, the Vice President and Members of Congress.

SEC. 12. Implementing Guidelines. The Department of Budget and Management shall prepare and issue the necessary guidelines for the implementation of this Executive Order.

SEC. 13. Effectivity. This Executive Order shall take effect January 1, 1997.

DONE in the City of Manila, this 28th day of December, in the year of Our Lord, Nineteen Hundred and Ninety Six.

(Sgd.) FIDEL V. RAMOS
President of the Philippines

By the President:

(Sgd.) RUBEN D. TORRES
Executive Secretary