Government workers across the Philippines can expect a salary bump starting this January as the Department of Budget and Management (DBM) begins implementing the second tranche of salary hikes for civilian employees. The rollout is part of Executive Order No. 64, signed in August 2024, which promised an updated compensation scheme over multiple phases.
In a statement released by the DBM, Budget Secretary Amenah F. Pangandaman emphasized that the pay hike is a continuation of the administration’s commitment to improve the living standards of public sector employees. This step is seen as a reinforcement of the government’s dedication to strengthening the civil service through competitive and fair compensation.
What Is National Budget Circular No. 597?
This circular acts as the blueprint for the second round of salary hikes under EO No. 64. It provides the detailed implementation plan for the revised salary schedule, highlighting the types of employees who will benefit from the increase and the agencies included in this phase.
The implementation began in January 2025, with the adjustments being applied to the monthly salaries of eligible government workers across various departments and organizations.
Who Will Benefit from the Second Tranche?
The updated salary hike will apply to a wide range of civilian government personnel, specifically those employed in:
- Executive branch agencies
- Legislative and Judiciary departments
- Constitutional commissions and offices
- State universities and colleges
- Government-owned or -controlled corporations (GOCCs) not covered by the GOCC Governance Act of 2011 or EO No. 150
This broad coverage ensures that thousands of government employees across the country will benefit from increased income, helping them better cope with the rising cost of living and improve household finances.
The pay hike is also expected to boost morale among public servants, encouraging higher productivity and dedication to public service.
Who Is Not Included in the Salary Increase?
Despite the large coverage, there are specific exclusions outlined in the circular.
The following groups will not benefit from this round of salary adjustments:
- Military and uniformed personnel
- Government agencies exempted from the Revised Compensation and Position Classification System
- Individuals without a formal employer-employee relationship
- Workers whose positions are funded through non-personnel service budgets
These exclusions ensure that the hike remains focused on those under the specified compensation framework, while other groups may be covered through separate mandates or budget provisions.
How Will the Salary Hike Be Funded?
The financial responsibility for this second tranche will come from different sources, depending on the type of government body involved.
For civilian personnel under national government agencies, the funding will be sourced from:
- The Miscellaneous Personnel Benefit Fund (MPBF)
- Other available appropriations under the 2025 General Appropriations Act (GAA)
For GOCCs included in the coverage, the salary adjustments will be financed using their own corporate operating budgets, as stated in the circular. This approach ensures that each institution takes charge of funding the pay hikes without disrupting the national fiscal plan.
Additionally, the DBM clarified that the guidelines for local government units (LGUs) regarding salary adjustments will be addressed through a separate circular, indicating that LGUs are not included under this announcement and will receive tailored instructions later on.
Implications for Government Employees
This second salary hike marks a significant move toward fairer compensation in the public sector. For many, especially those in lower and mid-tier positions, this increase could mean greater financial stability. With inflation affecting daily expenses, a more competitive salary may help retain talent in government institutions and reduce the temptation to seek employment in the private sector or abroad.
Employees are encouraged to reach out to their HR departments or finance offices to understand how their specific pay scales will be adjusted based on the new guidelines. The salary increase is applied across various pay grades, but exact figures will depend on the role, length of service, and organizational classification.
A Step Forward for Civil Service Reform
This move is part of a broader push to make public sector jobs more attractive and to build a professionalized bureaucracy. By improving compensation, the government hopes to attract more qualified professionals into public service, a crucial factor in achieving long-term national development goals.
Furthermore, transparent and consistent pay increases help reduce income disparities within government agencies and ensure accountability in managing public funds.
Frequently Asked Questions
Who is covered under the second tranche of salary hikes?
Civilian workers in the Executive, Legislative, and Judicial branches, constitutional offices, state universities and colleges, and eligible GOCCs are covered.
Are LGU employees included in this round of pay increases?
No, local government unit employees are not included under this circular. They will be covered under a separate set of guidelines.
Are military and police personnel part of this salary hike?
No, military and uniformed personnel are excluded from this tranche of salary increases.
When will the new salaries take effect?
The salary increases are effective starting January 2025, as specified in National Budget Circular No. 597.
How are the increases being funded?
The increases for national government employees will be covered by the Miscellaneous Personnel Benefit Fund and available appropriations in the 2025 GAA, while GOCCs will use their corporate budgets.
What is EO No. 64?
Executive Order No. 64 is the mandate signed in August 2024 that authorizes the multi-phase salary adjustment plan for civilian government personnel.
Why are some employees not included in the hike?
Employees without a formal employment relationship or whose positions are funded under non-personnel services are not eligible under the compensation system covered by this circular.
Will there be more salary increases after this?
Future tranches may be possible depending on the government’s fiscal position and the provisions of EO No. 64. Any future hikes will be announced through separate DBM issuances.
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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.
