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Whereas, Transparency,
accountability and
prudence in governmentSpending
are among the core
governance policies
being adopted by
this Administration:
Whereas,
while Government Owned
and Controlled
Corporations (GOCCs)
and Government Financial
Institutions (GFIs), by
the nature of their Operations, are
accorded greater flexibility to
function properly and
efficiently Under a
market environment, such flexibility
shall nevertheless be
consistent With the precept of
public accountability;
Whereas, there is a
need to strengthen
the supervision over
the compensation
levels of GOCCs and
GFIs, in order to
control the grant
of excessive salaries,
allowance, incentive and other benefits;
Whereas,
under the (9) of
the Senate and House of
Representatives Joint Resolution
(J.R.) No. 4, s.
2009, agencies exempted
from Republic Act (R.A.) No.
6758, as amended,
shall observe the
policies, parameters and guidelines
governing position classification,
salary rates, categories
and rates of allowances,
benefits, and incentives prescribed by the President;
Now,
Therefore, I, BENIGNO
S. AQUINO III,
President of
the Philippines,
by virtue of the
powers vested in
me by the
Constitution, President
Decree No. 985,
President Decree No.
1597, R.A. No.
6758, as amended by
the J.R. Nos. 1, s.
1994, and 4, s.
2009, do hereby order
and Direct:
SECTION 1. Rationalization
of the
Compensation and
Position Classification
Systems in all GOCCs and GFIs
. - The compensation and
Position classification
system in all GOCCs and
GFIs shall be rationalized in
accordance with the policies,
principle and parameters prescribed in this Order.
SECTION 2. Guiding
Principles. – The
following principles, patterned after
the governing principles
in J.R. No.
4, s. 2009,
shall guide
the rationalization
of the compensation
and position
classification system in GOCCs and GFIs;
a.
All
government personnel
shall be paid
just and equitable
compensation in
accordance with the principle
of equal pay
for
work of equal value.
b.
The compensation
for government personnel
shall generally be
Comparable with
those in the private
sector doing comparable
Work in order
to attract, retain and motivate
a corps of competent
Civil servants.
c.
The
compensation for
government personnel
shall be
standardized and
rationalized to create and enabling
environment
that will promote
social justice, integrity,
efficiency, production,
accountability and excellence
in the civil service.
d.
A
performance - based incentive
scheme which
integrates
personnel and
organizational performance shall be
established to
reward exemplary civil
servants and well-performing institutions.
e.
A periodic
review of the compensation and
position classification
systems shall be
conducted taking into
account the changes
in
skills and
competency requirements and the
possible erosion in
the purchasing power due to
inflation, and other factors.
f.
The compensation
for government personnel shall
be kept fair
and reasonable in
recognition of fiscal realities and
the personal
services cost
shall be maintained at a
reasonable proportion of
over-all expenditures.
SECTION 3. Total
Compensation Framework.
– All
remuneration
granted to members
of the board of directors/trustees,
officers and rank-and-file
employees
of GOCCs and GFIs
shall be categorized in
accordance with the
Total
Compensation Framework
established under item
(4) of J.R. No.
$.
Under this
framework, total payment for
services rendered by personnel
shall
Be limited to the
following categories:
a.
Basic Salaries,
including Step Increments;
b.
Standard
Allowances and Benefits
which are
given to
all
Employees across agencies;
c.
Specific - Purpose
Allowances and Benefits which are
given under
specific conditions, based on
actual performance of work; and,
d.
Incentives, which
are rewards for loyalty
to government service
and for exceeding performance
targets.
SECTION 4. Standard
Components of the
Compensation and position
Classification
Systems. – To
standardize the
compensation and
position
classification
systems in all
GOCCs and GFIs,
said system shall have
the
following components:
a.
Compensation System
i.
A
salary schedule to cover
full-time employment, and
Salary rules to
implement the payment of salaries
and step
Increments; and,
ii.
Set
of allowances, benefits,
and incentives categorized
pursuant to
the Total Compensation
Framework; and
guidelines, rules, and
regulations for the grant thereof.
b.
Position Classification
System
i. Index
of occupational groups, classes of
positions, and salary
Grades;
ii. Standards
or specifications for
each class of
positions;
and,
iii.
Rules, regulations, and
procedures for the
administration
and maintenance of the position classification system.
SECTION 5. Rationalization
of Indirect Compensation Excluded
from the
Total Compensation
Framework. – Provident fund
Benefits, additional health
insurance, and
other benefits that are indirect
compensation and are excluded
accordance
with the
policies to
be issued by
the President
upon
recommendation of the Task
Force created in Section 7 hereof.
SECTION 6. Considerations
in Setting Compensation
Levels in GOCCs
and GFIs. –
In setting compensation
levels, the peculiar
nature of corporate
operations
shall be taken
into account, The
following factors
shall be
considered:
a.
Coverage of
the GOCC/GFI under R.A.
No. 6758, as amended, or
exemption therefrom;
b.
Strategic
position of the
GOCC/GFI in the
industry where it
Belongs;
c.
Proprietary nature of
operations;
d.
Requirement
for highly
technical or
specialized skills
and
Expertise in corporate
operations;
e.
Comparability
of the compensation
package with
prevailing
industry practices;
f.
Financial
capability and viability
of the GOCC/GFI, to
include:
i.
Operational Stability
and self-sufficiency
ii.
Consistency in
income/profit performance and attainment
of output or service targets
iii. Remittance
of dividends to the National Treasury
iv.
National Government
support in terms of subsidy, equity,
net lending, or tax subsidy;
g.
Proportion
of Personal Services
expenditure to total
corporate
operating budget;
h.
Privatization plans;
and,
i.
Other relevant factors.
SECTION 7. Creation
of a Task Force on
Corporate Compensation. – A
Task Force on
Corporate Compensation (TFCC) is
hereby created to
undertake
the review
of all remuneration
granted to members
of the board
of
directors/trustees,
officers and rank-and-file employees,
as well as discretionary
funds of GOCCs
and GFIs, to be composed
of the Office of
the President as
Chair, and
the Department of Budget
and Management, the
Department of
Finance, and
the Civil Service
Commission as members,
The TFSS shall
perform the following
functions:
a.
Prepare
an update
inventory for
the salaries,
allowances,
incentives,
and other benefits,
under both direct and
indirect
compensation,
given to
all members
of the board
of
directors/trustees,
officers and rank-and-files employees,
whether
covered by
or exempted from
R.A. No. 6758,
as amended,
including
those received
from subsidiaries
and private
corporations, if any, as well
as discretionary funds;
b.
Categorize all
remuneration granted to members of
the board of
directors/trustees,
officers and employees
of these entities in
accordance with
the Total Compensation Framework in
Section 3
above, and
those considered as
indirect compensation under
Section 5 hereof; and,
c.
Formulate
and recommend
measures to
rationalize the
compensation system
and the use
of discretionary funds
in
specific
GOCCs and GFIs,
including putting a
cap on total
compensation. The
TFCC shall submit a
report on its findings and
recommendations to
the President within 90 days
from issuance
of this Order.
SECTION 8. Submission
of Information on All
Personnel Remuneration. - All
GOCCs and GFIs shall
submit to the TFCC,
information on all
salaries, allowances,
incentives, and other
benefits under both
direct and indirect compensation,
granted to members of the
board of directors/trustees,
officers and
rank-and-file employees, as well as
discretionary funds, in a format
to be prescribed
by the TFCC, certified correct
by the Department Secretary who
has supervision over the
GOCC/GFI.
SECTION 9. Moratorium
on Increases
in Salaries,
Allowances, Incentives and
Other Benefits. –
Moratorium on increases
in the rates
of salaries,
and the grant
of new or
increases in the rates
of allowances, incentives
and other benefits,
except salary adjustment
pursuant to executive Order No.
811 dated June 17, 2009
and Executive Order No.
900 dated June 23, 2010, are hereby
imposed until specifically authorized by the President.
SECTION 10. Suspension
of All Allowances,
Bonuses and Incentives for
Members of the Board
of Directors/Trustees. –
The grant of allowances, bonuses,
incentives, and
other perks
to members
of the board
of directors/trustees
of GOCCs and GFIs,
except reasonable per diems, is
hereby suspended
for until December 31,
2010, pending the
issuance of new policies and guidelines on the
compensation of these board members.
SECTION 11. Effectivity .
– This Executive
Order shall
take effect immediately upon
publication.
DONE in the City
of Manila, This
8th day of September, in the year
of our Lord, Two Thousand
and Ten.
By
the President:
PAQUITO N. OCHOA, JR.
Executive
Secretary
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