N1ALACANAN PALACE

i UANI I , T\
EXECUTI VE ORDER hI O.
7
DI RECTI NG TI - I E RATI ONALI ZATI ON OF TFI E COMPENSATI ON AND
POSI TI ON CLASSI FI CATI ON SYSTEM I N GOVERNMENT- OWNED
AND
- CONTROLLED
CORPORATI ONS ( cOCCs) AND
GOVEFI NMENT FI NANCI AL I NSTI TUTI ONS ( GFl s) , AND FOR
OTHER PURPOSES
WHEREAS, t r anspar ency, account abi l i t y and pr udence i n gover nment
spendi ng are among the core governance pol i ci es bei ng adopted by thi s
admi ni st r at i on;
WHEREAS, whi l e Gover nment Owned and Cont r ol l ed Cor por at i ons
( GOCCS) and Gover nment Fi nanci al I nst i t ut i ons ( GFl s) , by t he nat ur e of t hei r
operati ons, are accorded greater fl exi bi l i ty to functi on properl y and effi ci entl y
under a mar ket envi r onment , such f l exi bi l i t y shal l , nevef t hel ess be consi st ent
wi th the precept of publ i c accountabi l i ty;
WHEREAS, there i s a need to strengthen the supervi si on over the
compensat i on l evel s of GOCCs and GFl s, i n or der t o cont r ol t he gr ant
of
excessi ve sal ari es. al l owances. i ncenti ves and other benefi ts:
WHEREAS, under l tem (9) of the Senate and House of Representati ves
Joi nt Resol ut i on ( J R. ) No. 4, s. 2009, agenci es exempt ed f r om Republ i c Act
( R A
)
No. 6758, as amended, shal l obser ve t he pol i ci es, par amet er s and
gui del i nes governi ng posi ti on cl assi fi cati on, sal ary rates, categori es and rates
of al l owances, benefi ts, and i ncenti ves prescri bed by the Presi dent;
NOW, THEREFORE, l , BENI GNO S. AQUI NO l l l , Pr esi dent of t he
Phi l i ppi nes, by vi rl ue of the powers vested i n me by the Consti tuti on,
Pr esi dent i al Decr ee No. 9B5, Pr esi dent i al Debr ee No. 1597, R. A. No. 6758, as
amended by t he J. R. Nos. 1, s. 1994, and 4, s. 2009, do her eby or der and
di rect:
SECTI ON 1- Rat i onal i zat i on of t he Compensat i on and Posi t i on
Cl assi fi cati on System i n GOCCs and GFl s.
-
The compensati on and posi ti on
cl assi fi cati on system i n al l GOCCs and GFl s shal l be rati on al i zed i n accordance
wi th the pol i ci es, pri nci pl es and parameters prescri bed i n thi s Order.
SECTI ON 2. Gui di ng Pr i nci pl es.
-
The f ol l owi ng pr i nci pl es,
pat t er ned
af t er t he gover ni ng pr i nci pl es
i n J. R. No. 4, s. 2009, shal l gui de t he
rati onal i zati on of the compensati on and posi ti on cl assi fi cati on system i n
GOCCs and GFl s:
a.
Ai l government
personner
shai l
pe
pai d j ust
and
equi tabre
compensati on
i n accordance
wi th the pri nci prl -tr-*quar
pay
for
wor k of equal vat ue.
b' The compensati on
for government
personnef
shal l general l y
be
comparabre
wi th
.those
i n the pri vate
sector
doi ng
comparabfe
work in order to attract,
retain rno roti*t;' ;
";;pr' of
competent
ci vi l servants.
c. The
compensati on
f(
standardi zed
and rati oni
that wi l l promote
soci af
accountabi l i ty
and excel l r
d'
A performance-based
i ncenti ve
scheme
whi ch
i ntegrates
personnel
and organi zati onal
performance
shal f be establ i shed
to
reward
exempl ary
ci vi l servani s
and wefl -perfomrg
l nsti tuti ons.
e.
A peri odi c
revi ew
of the r
system
shafl be conduct
ski l l s and competency
re
the purchasi ng
power
due
f' The
compensati on
for government
personnel
shal l be kept fai r
and reasonabl e
i n recogni ti on
of fi scal real i ti es
unJ ttru personal
servi ces
cost shal l be mai ntai ned
at a reasonaor"
proporti on
of
over_a l l expend
i tures.
ti on Framework.
Aff remunerati on
ctors/trustees,
officers
and rank_and_file
re categori zed
i n accordance
wi th the
l i shed
under t t em ( a)
of J. R.
No. 4.
.
serui ces
rendered
by personnel
shal l
a. Basi c Sal ari es,
i ncl udi ng
Step i ncrements;
b.
standard
Ailowances
and Benefits
which
are given
to arl
empl oyees
across agenci es;
c' speci fi c-Purpose
Al l owances
and Benefi ts
whi ch
are gi ven
under
speci fi c
condi ti ons,
based
on actuar pedorman""
oi *Erl ; uno,
d' Incenti ves,
whi ch
are-rewards
for foyal ty
to governnrent
servi ce
and for exceeding
perflorman."
turg"tr.
sEcrl oN
4' standard
components
of the compensati on
and
posi ti on
ctassification
svsrem.
To rt;;J";;;;
-inl'"Jn,pensation
and position
cl assi f i cat i on
syst em
i n al l GOCCs
and GFl s, sai d syst em
shal l have t he
fol l owi ng
comPonents:
a. ComPensati on
SYstem
i ' Asa| ar yschedul et ocover f ul | t i meemp| oyment , and.
sal ary rul es to i mpl ement
the
payment of sal ari es and ste+
i ncr ement s;
and,
i i . Set of a| | owances, benef i t s, andi ncent i vescat egor i zed
pur suant t ot heTot al Compensat i onFr amewor k; and
l ui O"f
i n"t, rul es, and regul ati ons
for the
grant thereof'
b. Posi ti on
Cl assi fi cati on
System
i . | ndexof occupat i onal gr oups, c| assesof posi t i ons, andsa| ar y
grades;
i i . St andar dsor spect f i cat i onsf or eachc| assof posi t i ons;
and,
i
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T;ju' ; :", S,['i: : ::
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3
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SECTION
5' Rati onal i zati on
of l t
Total Compensati on
Framework'
-
Pr'
i nsurance,
and other benefi ts
that are
from the Total ComPensati on
Frame
accordance
wi th the
Pol i ci es
to
recommendati on
of the Task Force created
i n Secti on
7 hereof'
sEcTl oN
6. consi der at i ons
i n set t i ng compensat i on
Level s i n GOCCs
andGFl s. - l nset t i ngcompensat i onl evel s, t hepecul i ar nat ur eof cor por at e
operati ons
shal l be taken i nto account'
The fol l owi ng
factors
shal l be
consi der ed:
a. Cover ageof t heGoCc/ GFl under R' A' No. 6758' asamended, or
exemPti on
therefrom;
b. Strategi c
posi ti on of the GOCC/GFI
i n
bel ongs;
the
jndqstry where it
c. Propri etary
nature of operati ons;
d' Requi r ement f or hi gh| yt echni ca| or specl al i zedski | l sand
experti se
i n corporate
operati ons;
e. Compar abi I i t yof t hecompensat i onpackagewi t hpr evai l i ng
i ndustry
Practi ces;
5
f . Fi nanci al capabi l i t y and vi abi l i t y of t he GOCC/ GFI , t o i ncl ude:
i l t
IV
Operati onal stabi l i ty and sel f-suffi ci ency
Consi stency i n i ncome/profi t performance
and attai nment
of outputor service tar"gets
Remi ttance of di vi dends to the Nati onal Treasury
Nati onal Government support i n terms of subsi dy, equi ty,
net l endi ng, or t ax subsi dy;
g. Proporti on of Personal Servi ces expendi ture to total corporate
operati ng budget;
h. Pr i vat i zat i on pl ans; and,
i. Other relevant factors
SECTION 7. Creati on of a Task Force on Corporate Compensati on.
-
A
Task Force on Corporate Compensati on (TFCC) i s hereby created to underl ake
the revi ew of al l remunerati on granted to members of the board of
d irectors/trustees, officers a nd ran k-and-file employees,, as well as d iscretionary
funds of GOCCs and GFl s, to be composed,of
rthb,Offi ce
of the Pr:esi dent as
Chai r, and the Department of Budget and Management,
.the
Department of
Fi nance, and t he Ci vi l Ser vi ce Commi ssi on as member s. The TFCC shal l
perform the fol l owi ng functi ons:
a. Prepare an updated i nventory of the sal ari es, al l owances,
i ncettti ves, and other benefi ts, under both di rect and i ndi rect
compensati on, gi ven to al l members of the board of
di rectors/trustees, offi cers and rank-and-fi l e empl oyees, whether
covered by or exempted from R.A. No. 6758, as amended,
i ncl udi ng those recei ved from subsi di ari es and pri vate
corporati ons, i f any, as wel l as di screti onary funds:
b. Categori ze al l remunerati on granted to members of the board of
directors/trustees, officers and employees of these entities in
accordance wi th the Total Compensati on Framework i n Secti on 3
above, and those consi dered as i ndi rect compensati on under
Secti on 5 hereof; and,
c. Formul ate and recommend measures to rati onal i ze the
compensati on system and the use of di screti onary funds i n
speci fi c GOCCs and GFl s, i ncl udi ng putti ng a cap on total
compensati on. The TFCC shal l submi t a report on i ts fi ndi ngs and
recommendati ons to the Presi dent wi thi n
g0
davs from i ssuance
of thi s Order.
I
t l
SECTl rSh{
g.
Submi ssi on
of Infc
-
Al l GOCCs
and GFl s shal l submi t t
afl owances,
i ncenti ves,
and other
br
compensati on,
granted
to members
of
and rank-and-fi l e
empl oyees,
as wel l e
prescribed
by the TFCC, certified
corrs
supervi si on
over the GOCC./GFl .
Increases
i n Sal ari es,
Al l owances,
' atori um
on i ncreases
i n the rates
of
l l Al l owances,
Bonuses
and l ncenti ves
s/Trustees
-
The grant
of al l owances,
' ks
to members
of the board
oi
:xcept reasonabl e
per
di ems, i s hereby
,
pendi ng
the i ssuance
of new pol i ci ei
tese board
members.
SECTION
11.,:. Efi ecti vi ty.r -
' Thi s
Executi ve
' di O"1.
shal t
rtakereffect
l
i mmedi atel y
upon
fubl i cati on. i
DONE i n the Ci ty of Mani l a,
thi s
our Lord, Two Thousand
and Ten.
day of September,
i n the year
of
, / \
/ r
!
t
Bt h
HOA, JR.
ry
si dent :
PAQUITO
N.
5