Big boost . . , Part 2

This is a continuation of my post yesterday (June 21st) on the implementation of the 10% salary adjustment effective July 1st. Here we will clarify and amplify some of the salient provisions of NBC 511 and LBC 86.

Basis of computation - the 10% adjustment shall be based on the basic monthly salary of incumbents as of June 30, 2007, inclusive of transition allowance. No adjustment shall be made on PERA, AdCom and RATA. But the year-end bonus, RLIP, PAG-IBIG, PHILHEALTH, and ECIP shall be correspondingly adjusted. Those receiving transition allowance, meaning that their basic salaries have exceeded the salary pertaining to the 8th step of the salary grade allocation of their position, are no longer entitled to the 10% adjustment but they will be allowed to receive such excess.

Funding source - the amount needed to implement the 10% adjustment of NG civilian personnel including the increase in subsistence and hazard pay of uniformed personnel shall be charged against the appropriate funds (Miscellaneous Personnel Benefits Fund/Compensation Adjustment Fund). The requirement for adjustment of non-permanent employees shall be taken from the lump-sum appropriation for salaries/wages of concerned NGAs. GOOCs, GFIs and LGUs shall defray the cost of implementing the salary adjustment out of their respective funds. If funds are insufficient, these entities may partially implement the said adjustment provided these shall be uniform and proportionate for all their personnel.

Specific for LGUs:

Adoption of Salary Schedule - in implementing EO 611, LGUs shall adopt the Salary Schedule (SS) prescribed under LBC 86 (Annexes "A1" to "A8") corresponding to their economic classification. Pursuant to RA 6758 (the original SSL), the salary levels of LGU personnel are pegged to a certain percentage of the national salary schedule depending on the income class of the LGU as categorized by the DOF/BLGF. Thus, the salary schedule of a first class province or city is equivalent to that of NGAs, while a second class one is 90% of the national SS. The SS of a 6th class municipality is only 65% of the national SS.
However, an earlier DBM issuance has given LGUs the flexibility to adopt the SS of their mother LGU, which means that a 5th class municipality can adopt the SS of its mother province provided it has the funds and has not exceeded the personal services limitation (45%-55%) prescribed under Section 325 of the 1991 Local Government Code.

Adopting a higher Salary Schedule - LGUs which have implemented the salary schedule of a higher income class LGU (i.e. the SS of a mother province), can adopt the revised SS pertaining to that of the higher income LGU. If funds are nor enough, the said LGU may opt to revert to the SS of its own income class.

PS cap waiver - the PS cost to implement the adjustment if the LGU is implementing the SS corresponding to its income class is exempt (or waived?) from the personal services limitation. However, the PS differential as a result of the adoption of the higher SS is subject to the said limitation.

Applicability to Barangays - the honoraria of barangay officials and employees maybe adjusted accordingly by adopting the new SS being implemented by the mother city or municipality. Under LBC 63 circa 1996, the maximum honoraria of Punong Barangays were pegged at the 1st step of Salary Grade 14 in the SS of the mother city or municipality, while that of the Sangguniang Barangay members, Treasurer and Secretary at the 1st step of Salary Grade 10. The said adjustment is exempt from the PS cap (55% limitation) prescribed under Section 331(b) of the 1991 Local Government Code. This exemption is still subject to clarification as this seems to contradict with Section 85, General Provisions of the 2007 General Appropriations Act, which provides that only the minimum honoraria (Php 1,000 for the Punong Barangay and Php 600 for the other officials) are waived from the PS cap.