GOVERNMENT LAWS

and REGULATIONS of
COMPENSATION,
INCENTIVES and
BENEFITS
Government Laws on Compensation

Republic Act No. 6758

"Compensation and Position Classification Act of

1989"
AN ACT PRESCRIBING A REVISED COMPENSATION
AND POSITION CLASSIFICATION SYSTEM IN THE
GOVERNMENT AND FOR OTHER PURPOSES.
Sec. 2. Statement of Policy. — It is hereby declared the
policy of the State to provide equal pay for substantially
equal work and to base differences in pay upon
substantive differences in duties and responsibilities,
and qualification requirements of the positions. In
determining rates of pay, due regard shall be given to,
among others, prevailing rates in the private sector for
comparable work. For this purpose, the Department of
Budget and Managements (DBM) is hereby directed to
establish and administer a unified Compensation and
Position Classification System, hereinafter referred to as
the System, as provided for in Presidential Decree No.
985, as amended, that shall be applied for all
government entities, as mandated by the Constitution.
Government Laws on Compensation
REVISED COMPENSATION AND POSITION CLASSIFICATION SYSTEM
Republic Act No. 6758

Year 1 National Compensation Circular No. 72

Executive Order No. 164

Year II National Compensation Circular No. 74

Executive Order No. 218

Year III National Budget Circular No. 448

Executive Order No. 290

Year IV National Budget Circular No. 458

Executive Order No. 389
 Issuances/Number of Title/Subject
Issuance
Republic Act No. 6758 An Act Prescribing A Revised Compensation and Position
Classification System in the Government and for Other
Purposes
Joint Senate-House Joint Resolution Urging the President of the Philippines
of Representatives Resolution to Review the Existing Compensation and Position
No.1, s. 1994 Classification System in the Government and to
Implement the Same Initially Effective January 1, 1994
National Compensation Circular Index of Occupational Services, Position Titles and
No. 57 Salary Grade
National Compensation Circular The Position Allocation List
No. 58
National Compensation Circular List of Allowances/Additional Compensation
No. 59 of Government Officials and Employees which shall be
deemed Integrated into the Basic Salary
National Compensation Circular Guidelines for the Initial Implementation of the Revised
No. 72 Compensation and Position Classification System
National Compensation Circular Guidelines for the Second Year Implementation of the
No. 74 New Salary Schedule in the Government
National Budget Circular No. Guidelines for the Third Year Implementation of the New
448 Salary Schedule in the Government
National Budget Circular No. Guidelines for the Full Implementation of the New Salary
458 Schedule in the Government
Executive Order No. 164 Adopting A Revised Compensation and Position
Classification System in the Government
Executive Order No. 218 Second Year Implementation of the New Salary Schedule
in the Government
Executive Order No. 290 Third Year Implementation of the New Salary Schedule in
the Government
Executive Order No. 389 Implementing the Fourth and Final Year Salary Increases
Authorized by Joint Senate and House of Representatives
Resolution No. 1, series of 1994
Corporate Compensation Rules and Regulations for the Implementation of the
Circular No. 10 Revised Compensation and Position Classification System
Prescribed under RA No. 6758 for Government Owned
and/or Controlled Corporations (GOCCs) and Financial
Institutions (GFIs)
 SALARY STANDARDIZATION LAW
Another great Law was recently implemented.
“A law that would benefit many of the Filipinos.”
To be specific it’s the Salary Standardization
Law III, It provided for a substantial increase in the
salary of government employees in the Philippines.
Salary Standardization Law III was signed into
law by Former President Gloria Macapagal Arroyo last
June 17, 2009. The author of the said law is Sen.
Edgardo Angara and his co-author Former Senator
Richard Gordon.
 Under the Salary Standardization Law III:
those under the Sub-Professional level (Salary
Grades 1-9) will receive 28% to 36% increase
those in the Professional level (Salary Grades 10-
24) will receive 38% to 100% increase, and
Those in the Executive category will receive 71%-
142% increase.
 A new teacher’s entry-level status for example, is at
salary grade 11 which is P18,549. Considering that this
will be implemented in four years, this will mean an
increase of P1,630.75 annually or an additional P6,523
increase in four years. A teacher who has a specialization
in Science or Math will be granted a salary three steps
higher in his or her assigned salary grade.

It was the latter who, just days before President

Arroyo’s term ended; she signed Executive Order No. 900
implementing an increase in the basic pay in all
government salary grades, including the President’s.
Other details on SSL3 are the following:
Salary Grade 1 is at P9,000 or an increase of P2,851 or a 46%
hike from the current P6,149;
The starting pay of Nurses is at Salary Grade 11, equivalent to
P18,088 per month;
Barangay Councilors will be placed at Salary Grade 10;
An Armed Forces of the Philippines Sergeant at SG 11;
Barangay councilors and chairmen at SG 10 and 14 respectively;
the President at P120,000 or an increase P50, 122; a 71.7% hike
from the P69, 878 that the president currently receives;
Medical Officers I (doctors) and Legal Officers I (lawyers) will
have an increase by 79.2 percent from P15,181 to P27,198.
Their grade levels will be upgraded from SG 14 to SG 16;
Utility workers and those who are in clerical positions will, on
the average, receive a thirty percent salary increase; and
Directors and Assistant Secretaries will be at P68,428 and
P73,903, respectively.
INCENTIVES AND BENEFITS FOR TEACHERS

Incentives in the form of trainings, scholarships,

fellowships and study grants will allow you to
grow in your profession, mingle with other
teachers in a different milieu and advance your
profession and the world.
• Trainings
• Induction program
• Orientation Program
• Reorientation Program
• Professional/Technical/Scientific Program
• Career Pathing Program
 INCENTIVES AND BENEFITS

• Study Grants/Scholarships/Fellowships
Also Available are scholarship grants which
are either competitive or non-competitive and
study-leave without pay, both local and
foreign
• Local Scholarship Program of the Civil
Service Commission
• DOST-SEI Scholarship Program
• Scholarship as Provided in the Magna-
Carta for Public School Teachers
 INCENTIVES AND BENEFITS

• Leave Privileges for Teachers

Teaching is a full-time job. A teacher like you
spends eight hours a day in school.
Oftentimes you still take home some of your
school work. You cannot budget your time
well, you may get burnt out early in your
career. To give space and time for teachers to
do important activities for themselves and
family members, leave privileges are provided
in addition to a two-month grand vacation in
summer.
LEAVE PRIVILEGES

• Maternity Leave
• Paternity Leave
• Study Leave
• Sick Leave
• Vacation Leave
ENTITLEMENTS/BENEFITS FOR TEACHERS

• Monetary Benefits
• Hazard pay
• Productivity incentive
benefit
• Cash allowance
• Mid/End Year bonus
• Cash gifts
• Clothing Allowance
• Chalk Allowance
 BENEFITS REQUIRED BY THE GOVERNMENT
TO EVERY WORKING FILIPINO

SOCIAL SECURITY SYSTEM

(SSS)

All employees hired by private companies are

required to become an SSS member (Republic Act No.
8282). This system aims to protect its members for when
they are unable to work such as sickness, disability,
maternity, old age and death, or other such contingencies
not stated but will result in loss of income or results to a
financial burden.
 BENEFITS REQUIRED BY THE GOVERNMENT
TO EVERY WORKING FILIPINO

Philippine Health Insurance

(PhilHealth)

The Philippine Health Insurance Corporation is

the medical insurance company of the Philippines. All
employees are required to be contributors of this
service (Republic Act 7875). Members are given
health and hospitalization subsidies should they or a
dependent be hospitalized.
 BENEFITS REQUIRED BY THE GOVERNMENT
TO EVERY WORKING FILIPINO

Home Development Mutual Fund

(Pag-Ibig Fund)

Employers are also required to contribute, on

behalf of their employees, to the Home Development
Mutual Fund (Republic Act 7835). This company
provides the lowest interest housing and land
acquisition loans to its members that are payable for
up to 30 years.
 BENEFITS REQUIRED BY THE GOVERNMENT
TO EVERY WORKING FILIPINO

Government Service Insurance System

(GSIS)

Commonwealth Act No. 186

The GSIS is created as a social insurance fund for all
employees of the Philippine government.
Republic Act No. 3593
Amended Commonwealth Act No. 186 to provide
immediate life insurance coverage and compulsory
membership as well as increase additional life
insurance coverage to all government employees.
 BENEFITS REQUIRED BY THE GOVERNMENT
TO EVERY WORKING FILIPINO

Republic Act No. 4968

Amended again Commonwealth Act No. 186 to
further define life insurance, retirement insurance,
compulsory membership and rates of premium
contributions.

Republic Act No. 8291

Otherwise known as the Government Service
Insurance Act of 1997 which amended the 20-year
old revised charter of the GSIS, known as Presidential
Decree No. 1146.
 THE LABOR CODE OF THE PHILIPPINES

PRESIDENTIAL DECREE NO. 442,

AS AMENDED
Title II
RETIREMENT FROM THE SERVICE

ART. 287. Retirement. - Any employee may be retired upon reaching

the retirement age established in the collective bargaining
agreement or other applicable employment contract.

In case of retirement, the employee shall be entitled to receive

such retirement benefits as he may have earned under existing laws
and any collective bargaining agreement and other agreements:
Provided, however, That an employee’s retirement benefits under
any collective bargaining and other agreements shall not be less
than those provided therein.
 REPUBLIC ACT NO. 7641

RETIREMENT PAY LAW

AN ACT AMENDING ARTICLE 287 OF PRESIDENTIAL DECREE NO.

442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF
THE PHILIPPINES, BY PROVIDING FOR RETIREMENT PAY TO
QUALIFIED PRIVATE SECTOR EMPLOYEES IN THE ABSENCE OF ANY
RETIREMENT PLAN IN THE ESTABLISHMENT

Section 1. Article 287 of Presidential Decree No. 442, as amended,

otherwise known as the Labor Code of the Philippines, is hereby
amended to read as follows:
"Art. 287. Retirement. - Any employee may be retired upon
reaching the retirement age established in the collective bargaining
agreement or other applicable employment contract.
 RETIREMENT

Teachers are more secure than the other profession

because of the retirement benefits.
If you are teaching in the government, you can retire
with benefits under R.A.1616, R.A.660 or R.A. 8291. These
modes of retirement have varied requirements and benefits.
 R.A. 1616
Teacher must have been employed in the
government prior to May 31, 1977 regardless of
age and employee status.

R.A. 8291
Has rendered at least 15 years of service

At least 60 years of age at the time of retirement

Is not receiving a monthly pension benefit for
permanent total disability.
 R.A. 660

A member of the GSIS Retirement Insurance Fund

and employed prior to May 31, 1977.

Attained and/or completed the required age and

length of service.
 There are absolutely lots of
teachers who are trying to come into
the profession, but they are not
attracted enough to say, 'I'm going to
switch careers to do it,' or they are
often not retained... because the
salaries and the compensation aren't
there to make it happen.
Melinda Gates
 R.A. 1616

Requirements Benefits

• Teacher must have been • Gratuity benefits equivalent to

employed in the government one month salary for each year
prior to May 31, 1977 regardless of service for the first 20 years;
of age and employee status one and one half months (1.5)
• Teachers must have rendered at salary for each year over 30
least 20 years of service and the years based on the highest
last three years must be salary rate received.
continuous
• Teacher’s leave of absence • Refund of retiree’s personal
without pay if any during the last contributions with interest and
three years immediately the corresponding government
preceding retirement do not contributions without interest
exceed one (1) year
 R.A. 8291

Requirements Benefits

• Has rendered at least 15 • Five years lump sum (60 x

years of service basic monthly pension for
• At least 60 years of age at life starting at the end of
the time of retirement five years guaranteed
• Is not receiving a monthly period
pension benefit for • The cash payment (18 x
permanent total disability basic monthly pension)
plus the basic monthly
pension for life starting
immediately upon
retirement
 R.A. 660

Requirements Benefits

• A member of the GSIS Retirement • Any of the three schemes can be

Insurance Fund and employed enjoyed by the retiree.
prior to May 31, 1977. • Automatic annuity-monthly
pension is paid guaranteed for five
• Attained and/or completed the years from the date of retirement.
required age and length of service After the five year period,
as indicated below payment of the monthly annuity
continues if retiree is still living.
• Age: 52 53 54 55 56 • Five-Year lump sum – available
only for those who are at least 63
• Service: 35 34 33 32 31
years or over on the date of
retirement. After five year, if still
• Age: 57 58 59 60 61 living, retiree is paid monthly
• Service: 30 28 26 24 22 annuity for life.
 R.A. 660

Requirements Benefits

• Initial Three-Years Lump

• Age: 62 63 64 65 up Sum – Available only for
• Service: 20 18 16 15 up those who are at least 60
years of age on the date of
retirement. The
subsequent two-year lump
sum is paid to the retiree
on his 63rd birthday. After
five years, if still living, the
retiree is paid monthly
annuity for life.