Starting January 2025, the Philippine government has initiated the second tranche of salary hikes for civilian workers. The implementation comes under Executive Order No. 64, signed in August 2024, and is backed by the Department of Budget and Management (DBM) to provide better compensation across public sector institutions.
The move reflects the administration’s ongoing strategy to uplift civil servants through improved financial support and stronger service delivery systems.
What Is National Budget Circular No. 597
National Budget Circular No. 597 is the guiding document for implementing the salary increase under EO No. 64. It includes the official salary schedule updates and outlines which government offices and personnel will be covered in this second phase of the compensation restructuring.
The implementation began in January 2025, with salary adjustments processed retroactively from the first working day of the year.
Who Will Benefit from the Second Tranche of Hikes
The following groups are eligible for salary increases under this second tranche:
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Civilian employees of the Executive Branch
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Personnel in the Legislative and Judiciary departments
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Employees under Constitutional Commissions and Offices
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State universities and colleges (SUCs)
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Workers in government-owned or -controlled corporations (GOCCs) not covered under EO No. 150 or the GOCC Governance Act of 2011
This broad scope aims to uplift the income of thousands of government workers and reinforce their roles in nation-building.
Who Is Not Covered by the Increase
Despite the wide coverage, certain sectors and individuals are excluded from this round of increases. These include:
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Military and uniformed personnel
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Employees of agencies exempted from the Revised Compensation System
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Workers without formal employer-employee relationships
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Personnel paid from non-personnel service funds
These exclusions ensure focus remains on qualified civilian employees under the structured pay grading system. Other sectors may receive salary adjustments through separate directives.
How the Salary Increase Will Be Funded
Funding for the pay hike varies depending on the institution:
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For national government agencies, the funds will come from:
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The Miscellaneous Personnel Benefits Fund (MPBF)
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Other appropriations listed in the 2025 General Appropriations Act (GAA)
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For GOCCs, adjustments will be sourced from their corporate operating budgets
Meanwhile, for local government units (LGUs), DBM stated that separate guidelines will be issued. As of now, LGUs are not automatically included in this rollout.
Table: Breakdown of Funding Sources by Entity Type
| Entity Type | Funding Source |
|---|---|
| National Government Agencies | MPBF & GAA 2025 |
| GOCCs | Corporate Operating Budgets |
| Local Government Units (LGUs) | Will be addressed via a separate DBM circular |
This strategic funding allocation ensures the pay hikes are distributed without disrupting the national fiscal program.
What Employees Should Expect
The increase applies across various salary grades and steps, with each employee’s actual adjustment depending on:
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Current pay grade
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Number of years in service
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Department or agency classification
Employees are encouraged to consult their HR or Finance offices for the updated salary computation based on the new salary schedule under EO No. 64.
Expected Impact of the Salary Hike
This second tranche is not just a financial adjustment — it’s a morale booster for thousands of public servants. Here’s how:
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Improved financial stability for employees facing inflation
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Stronger retention of skilled civil workers
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Increased motivation and public service commitment
The government also sees this as a strategic move to reduce the outflow of talent to the private sector and abroad.
What This Means for Civil Service Reform
The salary hike is part of a wider reform movement aimed at professionalizing public service. Fair and competitive compensation helps attract talented individuals to government roles while encouraging existing employees to grow within the system.
As the government continues to improve employment conditions, the goal is to develop a high-performing, accountable, and development-focused civil service.
FAQs
What is the second tranche of the salary increase?
It refers to the second phase of the government’s multi-year salary hike plan for civilian employees under Executive Order No. 64.
When did the new salary adjustments begin?
The implementation started in January 2025 and will be applied to payrolls retroactively from that month.
Who are the main beneficiaries of this increase?
Civilian employees in executive, legislative, judiciary branches, SUCs, and certain GOCCs will benefit from the updated pay scheme.
Are LGU employees included in this increase?
Not yet. The DBM will issue a separate circular with guidelines for local government units.
How do I know if I’m eligible?
You can confirm your eligibility through your HR department or check your agency’s payroll update based on the new salary schedule.
Where will the funding come from?
Funds will come from the Miscellaneous Personnel Benefits Fund, General Appropriations Act, or internal GOCC budgets, depending on the agency.
Are uniformed personnel included in this salary hike?
No, military and uniformed services are excluded from this round. They may be covered by a separate compensation plan.
Will there be more tranches after this?
Yes, this is part of a multi-phase rollout. Additional tranches are expected in the coming years, subject to budget availability and further government approval.
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Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.