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N1ALACANAN PALACE
i U A N I I , T \
EXECUTIVE
RDERhIO.
7
DIRECTING
TI-IE RATIONALIZATION
OF TFIE COMPENSATION
AND
POSITION
CLASSIFICATION
SYSTEM N GOVERNMENT-OWNED
AND
-CONTROLLED
(cOCCs)
AND
GOVEFINMENT
FINANCIAL
INSTITUTIONS
GFls),
AND
FOR
OTHERPURPOSES
WHEREAS,
ransparency,
ccountabi l i ty
nd
prudence
n
government
spending
are among the
core
governancepolicies
being adopted
by this
administrat ion;
WHEREAS,
whi le
GovernmentOwned and Control ledCorporat ions
(GOCCS)
nd Government
inancialnst i tut ions
GFls),
by the nature
of their
operations, re
accorded
greater
lexibil ityo
function
properly
and efficiently
under
a
market
environment,
uch f lexibi l i ty
hal l ,neveftheless
e consistent
with he
precept
of
public
accountability;
WHEREAS,
there is
a need to s trengthen he superv isionover the
compensat ion
evels
of GOCCs and GFls, in order to control he
grant
of
excessive alaries.
allowances.
ncentives
nd
otherbenefits:
WHEREAS,
under
tem
(9)
of
the
Senateand House of Representatives
Joint
Resolut ion
J
R.) No.
4, s. 2009,agencies xempted rom Republ ic
ct
(R
A
)
No.
6758, as amended,
shal l
observe he
pol ic ies,
parameters
nd
guidelines
overningposition
classification,alary rates, categories
and
rates
of allowances,
enefits, nd
incentives
rescribed
y the President;
NOW,
THEREFORE,
, BENIGNO
S. AQUINO
ll l ,
Presidentof
the
Philippines,
by virlue
of the
powers
vested
in me by the Constitution,
President ia l
ecree
No.9B5,
President ia l ebree
No. 1597,R.A.No.6758, as
amended
y the J .R.
Nos .
1 , s . 1994,and 4 , s .2009, do herebyorder
and
direct:
SECTION
1-
Rat ional izat ion
f the Compensat ion
and Posi t ion
Classification
ystem
n
GOCCs and
GFls.
-
The compensation
nd
position
classification
ystem
n all
GOCCsand
GFls shallbe ration lized n accordance
with
the
policies,
rinciples
nd
parameters
rescribed
n this Order.
SECTION
2. Guiding
Principles.
The fol lowing
r inciples,
at terned
after the
governing
pr inciples
n J.R. No. 4, s. 2009,
shal l
guide
the
rationalization
f
the compensation
and
position
classificationsystem
in
GOCCs nd
GFls :
a.
Ail
government
personner
shail
pe
paid
just
and
equitabre
compensation
n
accordance
with
the principrl-tr-*quar
pay
for
work
of
equal
vatue.
b'
The
compensation
or government
ersonnef
hall
generally
be
comparabre
with
.those
n
the
private
sector
doing
comparabfe
work
in
order
to
attract,
etain
no
roti*t;';
";;pr'of
competent
civi l
servants.
c.
The
compensation
f(
standardized
nd
rationi
that
will
promote
sociaf
accountability
nd
excellr
d'
A
performance-based
incentive
scheme
which
integrates
personnel
and
organizational
erformance
half
be
established
o
reward
exemplary
ivi l
servanis
nd
wefl-perfomrg
nstitutions.
e.
A
periodic
eview
of
the
r
system
shafl
be
conduct
ski l ls
and
competency
e
the
purchasing
ower
due
The
compensation
or government
ersonnel
shall
be
kept
fair
and
reasonable
n
recognition
f
fiscal
ealit ies
unJ
ttru personal
services
cost
shall
be
maintained
t
a
reasonaor"
proportion
f
over_a
l
expend
tures.
tion
Framework.
Aff
remuneration
ctors/trustees,
fficers
and
rank_and_file
re
categorized
n
accordance
with
the
l ished
under
t tem
(a)
of
J.R.
No.
4.
.
seruices
endered
by personnel
shall
a.
Basic
Salaries,
ncluding
tep
ncrements;
b.
standard
Ailowances
and
Benefits
which
are given
to
ar l
employees
across
agencies;
c'
specific-Purpose
Allowances
nd
Benefits
which
are
given
under
specific
onditions,
ased
on
actuar
edorman""
oi
*Erl;
uno,
d'
Incentives,
which
are-rewards
or
foyalty
o
governnrent
ervice
and
for
exceeding
perflorman."
urg"tr.
sEcrloN
4'
standard
components
of
the
compensation
and
position
ctassification
vsrem.
To
rt;;J";;;;
-inl'"Jn,pensation
and
position
classi f icat ion
ystem
n
al l
GOCCs
and
GFls,
said
system
shal l
have
the
following
omPonents:
a.
ComPensation
Ystem
i 'Asa |a ryschedu le tocover fu l | t imeemp|oyment ,and.
salary
ules
o
implement
he
payment
of
salaries
and
ste+
increments;
nd,
i i .Se to fa | |owances ,benef i t s ,and incent ivesca tegor ized
pursuant to theTota lCompensat ionFramework ;and
luiO"f
n"t,
rules,
and
regulations
or
the
grant
hereof'
b.
Position
Classification
ystem
i . |ndexo foccupat iona lg roups ,c |assesofpos i t ions ,andsa |ary
grades;
i i .S tandardsorspec t f i ca t ions fo reachc |asso fpos i t ions ;
and,
i ,,,
T;ju'
:",
,['i:
:
"i
ii
3
"r'*"#
:"
",'n,
:ffiq$
'H?'
SECTION
5'
Rationalization
f
lt
Total
Compensation
ramework'
Pr'
insurance,
nd
other
benefits
hat
are
from
the
Total
ComPensation
Frame
accordance
with
the
Policies
to
recommendation
f
the
Task
Force
created
n
Section
hereof'
sEcTloN
6.
considerat ions
n
sett ing
compensat ion
evels
n
GOCCs
andGFls . - lnse t t ingcompensat ion leve ls , thepecu l ia rna tureo fcorpora te
operations
shall
be
taken
into
account'
The
following
factors
shall
be
considered:
a .Coverageof theGoCc/GFlunderR 'A 'No.6758 'asamended,or
exemPtion
herefrom;
b.
Strategic
position
of
the
GOCC/GFI
n
belongs;
the
jndqstry
where
it
c.
Proprietary
ature
of
operations;
d 'Requ i rement fo rh igh |y techn ica |o rspec la l i zedsk i | l sand
expertise
n
corporate
operations;
e .Comparab i I i t yo f thecompensat ionpackagewi thpreva i l ing
industry
Practices;
5
f .
Financial
apabi l i ty
nd viabi l i ty f the
GOCC/GFI,
o include:
i l t
IV
Operational
tabil ity nd self-suffici ency
Consistency
n
income/profit
erformance
nd
attainment
of outputor
service
ar"gets
Remittance
f dividends
o the National
reasury
National
Government
upport n
terms
of subsidy,
equity,
net
ending,
r tax
subsidy;
g.
Proportion
of Personal
Servicesexpenditure
o total
corporate
operating
udget;
h. Pr ivat izat ionlans;
nd,
i.
Other
relevant
actors
SECTION
7.
Creation
f
a Task Forceon Corporate
Compensation.
A
Task
Force
on Corporate
CompensationTFCC)
s hereby
reated
o underlake
the
review
of all
remuneration
granted
to members
of
the board
of
d rectors/trustees,
fficers
a
nd rank-and-file
mployees,, s well
as d scretionary
funds of GOCCs
and
GFls,
to be
composed,of
thb,Office
of the Pr:esident
s
Chair, and the Department
f Budget and Management,
the
Department
of
Finance, nd
the
Civi l Service
Commission s members.
The TFCC
shal l
perform
he ollowing
unctions:
a.
Prepare
an
updated inventory of
the salaries,
allowances,
incetttives,
nd
other benefits, under
both direct
and indirect
compensation, given
to all members
of the board
of
directors/trustees,
fficersand
rank-and-fi le
mployees,
whether
covered
by or exempted
from R.A. No.
6758,
as amended,
including
those
received
from subsidiaries
and
private
corporations,
f any,as wellas
discretionaryunds:
b. Categorize
l l
remuneration
ranted
o members
of
the board
of
directors/trustees,
fficers and
employees
of these entities
in
accordance
with
the Total Compensation ramework
n Section
3
above,
and those
consideredas indirect
compensation
under
Section
5 hereof;
and,
c.
Formulate
and
recommend measures
to rationalize
the
compensation
system and the use
of
discretionary
unds
in
specif ic
GOCCs
and
GFls, including
putting
a
cap on
total
compensation.
he TFCC shallsubmit
a report
on its
indings
nd
recommendations
o
the President
within
g0
davs
from issuance
of this
Order.
I
t l
SECTlrSh{
.
Submission
f
Infc
-
Al l
GOCCs
and
GFls
shal l
submit
aflowances,
ncentives,
and
other
br
compensation,
ranted
o
members
of
rank-and-fi le
mployees,
s
well
e
prescribed
by
the
TFCC,
certified
orrs
supervision
ver
he
GOCC./GFl.
Increases
in
Salaries,
Allowances,
'atorium
on
increases
n
the
rates
of
ll
Allowances,
Bonuses
and
lncentives
s/Trustees
The
grant
of
allowances,
'ks
to
members
of
the
board
oi
:xcept
easonable
er
diems,
s
hereby
,
pending
he
issuance
f
new policiei
tese
board
members.
SECTION
11.,:.
Efiectivity.r
'This
Executive
diO"1.
shalt
takereffect
l
immediately
pon
fublication.
i
DONE
n
the
City
of
Manila,
his
our
Lord,
Two
Thousand
nd
Ten.
day
of
September,
n
the
year
of
, / \
/ r
t
B t h
HOA,
JR.
ry
sident:
PAQUITO
N.
5
