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TABLE OF CONTENTS
Page

LETTER OF PROMULGATION i

FOREWORD ii

PREFACE iii

ACKNOWLEDGMENT iv

Chapter 1 MANDATORY PAY AND ALLOWANCES:

1.1 Base Pay

1.1.1 AFP Comptroller Letter No 2001-06

dated 10 August 2001: Guidelines for the Grant
of Five Percent (5%) Salary Adjustment to all
Military and Civilian Personnel of the AFP 1

1.1.2 National Budget Circular No 474 dated

June 15, 2001: Guidelines for the Grant
of Five Percent (5%) Salary Adjustment
to all Government Personnel Effective
July 1, 2001 7

1.1.3 AFP Comptroller Letter No 2002-14

dated October 13, 2001: Guidelines for the Grant
of Ten Percent (10%) Salary Adjustment to all
Military and Civilian Personnel of the AFP 10

1.1.4 Executive Order No 219: Grant of

Salary Adjustment to All Government Personnel 15

1.2 Longevity Pay

Republic Act No 3725 dated June 22, 1963: An Act

Providing for Longevity Pay to Enlisted Men of
the Armed Forces of the Philippines, Amending
for the Purpose Section One and the Title
of the Republic Act Number 1134, and Appropriating
Funds therefore. 18

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1.3 Subsistence Allowance

AFP Comptroller Letter No 98-11

dated November 9, 1998: Guidelines in
the Grant of Additional Subsistence Allowance
from P30.00 to P60.00 Per Day
Effective 1 Sep 98 19

1.4 Clothing and Quarters Allowances

AFP Comptroller Letter No 92-6

dated 21 July 1992: Adjustment in
Clothing and Quarters Allowances 21

1.5 Hazard Pay

Circular No 15, GHQ, AFP

dated 24 November 1986 Hazard Pay
of Officers, Enlisted Personnel, Draftees
and Extended Trainees of the NAFP 23

1.6 Additional Compensation (ADCOM)

AFP Comptroller Letter No 99-03

dated 18 May 1999: Extending the Grant
of P500 per month Additional Compensation
(ADCOM) to Military and Civilian
Personnel of the AFP Allocated
to Salary Grade 26 and Above 25

1.7 Personnel Economic Relief Allowance (PERA)

Budget Circular No 4 dated 28 June 1991:

Grant of Personnel Relief Allowance
to all Employees of the Government 28

1.8 Laundry Allowance

Circular No 5, GHQ, AFP dated 28 July 1992:

Laundry Allowance of Military Personnel 32

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Chapter 2 OTHER PAY AND ALLOWANCES (Collateral Entitlements)

2.1 Combat Duty Pay

Circular No 7, GHQ, AFP

dated 23 October 1985: Combat Duty Pay 35

2.2 Flying Pay

2.2.1 National Compensation Circular No 11

dated July 1, 1980: Flying Pay of Personnel
of the Philippine Air Force Whose Duty
Require Regular and Frequent Aerial Flights 38

2.2.2 AFP Regulations F 121-152

dated 16 November 1987: Flying Status of
Rated and Designated Personnel 41

2.3 Hardship Allowance

Circular No 3, GHQ, AFP

dated 25 July 2001: Hardship Allowance
of Military Personnel 43

2.4 Hazardous Duty Pay

Circular No 7, GHQ, AFP

dated 13 June 2000: Hazardous Duty Pay 46

2.5 Parachutist Pay

Circular No 25, GHQ, AFP: Parachutist’s Pay 50

2.6 Instructor Duty Pay

Circular No 4, GHQ, AFP dated 5 February 1990:

Instructor Duty Pay 55

2.7 Incentive Pay

2.7.1 Circular Nr 6, GHQ, AFP dated 23 June 1980:

Incentive Pay for Officer of the Medical Corps, AFP 60

2.7.2 Republic Act No 2685 dated June 18, 1960:

An Act to Promote Career Incentive
In the Medical Corps of the Armed Forces of the

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The Philippines, Authorizing the Appropriation

of Funds therefore, and for other purposes 61

2.7.3 Republic Act No 5338 dated 15 June 1968:

An Act to Promote Career Incentive in
the Nurse Corps of the Armed Forces of
the Philippines, Authorizing the Appropriation
of Funds therefore, and for other purposes 62

2.7.4 Republic Act No 3093 dated 17 June 1961:

An Act to Promote Career Incentive in the
Dental Service of the Armed Forces of the
Philippines, Authorizing the Appropriation
of Funds therefore, and for other purposes 63

2.8 Specialist Pay Rating

Circular No 12, GHQ, AFP

dated 17 September 1986: Specialist Rating
in the (New) Armed Forces 64

2.9 Re-enlistment Clothing Allowance (RCA)

2.9.1 SOP No 7, GHQ, AFP dated 22 March 1996:

Payment of Re-enlistment Clothing Allowance
(RCA) “In Cash” or “In Kind” for Personnel
Assigned in GHQ, Area and Specified Commands
and AFPWSSUs 70

2.9.2 Ltr Directive from OTQMG dated 07 March 2001:

Updated Price List of Re-enlistment Clothing
Allowance (RCA) in Kind for Calendar Year 2001 77

2.10 Special Counsel Allowance

Approved Memorandum from TJAG

dated 25 March 1997: Special Counsel
Allowance to Military Lawyers and
Incentives to Probationary Second Lieutenants 80

2.11 Magna Carta of Public Health Workers

Republic Act No 7305 dated 26 March 1992:

The Magna Carta of Public Health Workers 83

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2.12 Year-End Bonus and Cash Gift

AFP Comptroller Letter No 98-05 dated 28 May 1998:

Amendment to AFP Comptroller Letter Nr 97-02
dated 23 May 1997, Subject: Grant of Year End Bonus
and Cash Gift and Advance Payment of One-half (1/2)
thereto for Calendar Year 1997 and Years Thereafter 93

2.13 Monthly Gratuity to an Awardee of Medal of Valor

2.13.1 Republic Act No 9049 dated 22 March 2001:

An Act Granting Monthly Gratuity and
Privileges to an Awardee of Medal of Valor
Providing Funds therefore, and for other purposes 96

2.13.2 Circular Nr 4, GHQ, AFP dated 30 July 2001:

Granting Monthly Gratuity and other Privileges
to an Awardee of the Medal of Valor 100

2.14 Anniversary Bonus

Administrative Order No 263 dated 26 March 1996:

Authorizing the Grant of Anniversary Bonus
to Officials and Employees of Government
Entities 104

2.15 Subsistence Allowance of AFP Telephone Operators

AFP Comptroller Letter No 2001-04 dated 7 June 2001:

Increase in the Rate of Subsistence Allowance
of AFP Civilian Telephone Operators 107

2.16 Productivity and Incentive Pay

Administrative Order No 161 dated 6 December 1994:

Prescribing a Standard Incentive Pay System Base on
Productivity and Performance, for all Officials and
Employees of the Government-Owned and/or
Controlled Corporations and Government
Financial Institutions and for other purposes 110

2.17 Hazard Duty Pay

Ltr Directive, J6 dated 18 August 1999: Addendum

to J6 Directive dated 24 Mar 97 relative to Hazard
Duty Pay 113

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2.18 Cold Weather Clothing Allowance

Circular No 17, GHQ, AFP dated 13 August 1990:

Cold Weather Clothing Allowance 115

2.19 Radiation Hazard Pay

Ltr Directive, GHQ, AFP dated 10 Mar 1977:

Radiation Hazard Pay 124

Chapter 3 RETIREMENT, SEPARATION AND DEATH BENEFITS

3.1 PD 1638, as amended dated 10 September 1979:

Establishing a New System of Retirement and
Separation for Military Personnel of the Armed
Forces of the Philippines and for other Purposes 127

3.2 PD 1650 dated 8 November 1979: Amending Section 3

and 5 of Presidential Decree No.1638 entitled
“Establishing a New System of the Retirement
and Separation for Military Personnel of the
Armed Forces of the Philippines and for other
purposes 136

3.3 Republic Act No 340 dated 26 July 1948: An Act to

Establish a Uniform Retirement System for the
Armed Forces of the Philippines, to Provide for
Separation therefrom, and other purposes 138

3.4 Executive Order No 96 dated 18 December 1986:

Further Amending Section Two of the Republic
Act No.1862, as amended, and for other purposes 145

3.5 Department Order No 01, DND dated 29 December 2000:

Delegation of Authority to Approve the Retirement
and Separation from the Military Service of Enlisted
Personnel of the AFP 147

3.6 SOP No 13, GHQ, AFP dated 20 July 1994: Processing

of Retirement Benefit Claims and Transfer of Pension
Applications 149

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3.7 Presidential Decree No 1044 dated 28 October 1976:

Increasing the Benefits of Military Personnel Who
Become Physically Disabled or Die in Line of
Duty Before Completing 20 Years of Active Service 155

3.8 SOP No 5, GHQ, AFP dated 15 March 2001: Procedures

for the Payment of Special Financial Assistance per
Republic Act No.6963 159

3.9 SOP No 10, GHQ, AFP dated 12 September 1990:

Procedures for the Payment of Special Financial
Assistance per Republic Act No. 6963 163

Chapter 4 MISCELLANEOUS

4.1 AFP Comptroller Letter No 98-10 dated 21 October 1998:

Payment of Mandatory Obligations of AFPWSSUs 167

4.2 AFP Comptroller Letter No 93-6 dated 28 May 1993: Pay

Status and Jurisdiction 169

4.3 Circular No 2, GHQ, AFP dated 18 March 1995:

Authorized Deductions 172

4.4 Administrative Order No 5 dated 28 February 2001:

Adoption of Fiscal Discipline Measures in the
Public Sector for Fiscal Year 2001 180

4.5 Budget Circular No 2001-1 dated March 6, 2001:

Guidelines on the Implementation of Administrative
Order No.5 185

4.6 Department Order No 6, DND dated 23 February 2001:

Delegation of Signing Authority 193

4.7 Circular No 13, GHQ, AFP dated 15 July 1991:

Selective Enlistment and Re-enlistment 194

4.8 Circular No 11, GHQ, AFP dated 9 August 2000:

Maximum Hospitalization for AFP Personnel
And Veterans in AFP Hospitals 205

4.9 Republic Act No 138 dated 14 June 1947: An Act to

Define the Pay Status of Personnel in the Armed
Forces of the Philippines and for other purposes 210

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4.10 Circular No 14, GHQ, AFP dated 14 August 2000:

Bonds of AFP Accountable Personnel 216

4.11 Primer of Death Benefits Claims 221

4.12 Circular No 24, GHQ, AFP dated 27 October 1987:

Reimbursement of Hospitalization Expenses
Of Military Personnel and Their Dependents 237

4.13 SOP No 2, GHQ, AFP dated 2 April 1993:

Retirement-In-Place 242

4.14 Republic Act No 8220 dtd 9 Oct 1996 – An Act Creating the
Ranks of Chief Master Sergeant/Master Chief Petty
Officer and Senior Master Sergeant/Senior Chief
Petty Officer in the Enlisted Ranks of the Armed
Forces of the Philippines, Appropriating Funds
therefore, and for other purposes 247

4.15 Republic Act No 9040 dtd 22 March 2001 – An Act

Exempting from Tax Certain Allowances and
benefits Granted to the Members of the Armed
Forces of the Philippines 251

Appendix A Recommendation for Changes

Appendix B Record of Changes

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