PNoy OKs incentive hike for gov't rationalization plan


Posted at May 16 2012 03:21 PM | Updated as of May 17 2012 04:09 PM

MANILA, Philippines - President Benigno Aquino directed the Department of Budget and Management (DBM) to increase incentives for all employees who will be affected by the rationalization program for government agencies.

Under Executive Order 77, rationalization incentives will now be computed using the latest monthly salary of affected employees, instead of their pay as of June 30, 2007.

"The President's directive is welcome news for all public servants who will be affected by the administration's rationalization program. Even as we aim to reorganize our agencies to improve employee efficiency and the effectiveness of our services, we also want to be fair in compensating government workers who have long served the public," said Budget Secretary Florencio B. Abad.

Under the rationalization program, government employees who are performing redundant or obsolete functions are given the choice to retire or separate from their departments. They may also remain in their departments or transfer to another agency, on condition that their positions will be co-terminus with the incumbent.

The DBM study showed that employees are more likely to choose retirement or separation if their incentives will be computed based on their updated monthly salary.

"Because the monthly pay for government workers has increased since 2007, the incentives due them should likewise reflect these changes. Commodity prices and the cost of living have also jumped considerably in the last five years. These should be accounted for when we implement the rationalization program for all affected employees," Abad said.

Increasing the incentives would require more funds from the government. Based on June 30, 2007 salaries, funding for employee incentives would require only P4.1 billion. Using current salaries, the funding needed would be P6.23 billion.

Incentives of affected personnel who retired/separated from their agencies beginning July 1, 2007 and before the issuance of E.O. 77 will be recomputed by their agencies to correspond with their salaries as of retirement. The difference therein will be paid to them, subject to DBM's validation.

Abad said that government offices with approved rationalization plans would not be allowed to add regular positions for at least 5 years. Exempted from the rule are positions created with no cost to government, such as policemen, teachers and medical personnel.