# Administrative Code of 1987/Book VI/Chapter 7

Source: Supplement to the Official Gazette. Vol. 83, No. 39. Manila. National Printing Office. 1987. pp. 160–167.
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Chapter 7—Expenditure of Appropriated Funds
Sec. 58. Contracting of Activities.—Agencies may enter into contracts with individuals or organizations, both public and private, subject to provisions of law and applicable guidelines approved by the President: provided, that contracts shall be for specific services which cannot be provided by the regular staff of the agency, shall be for a specific period of time, and shall have a definite expected output: provided, further, that implementing, monitoring and other regular and recurring agency activities shall not be contracted for, except for personnel hired on an individual and contractual basis and working as part of the organization, or as otherwise may be approved by the President: Provided, finally, that the cost of contracted services shall not exceed the amount that would otherwise be incurred had the work been performed by regular employees of government, except as may be authorized under this section.
Sec. 59. Authority to Receive Additional Compensation.—Officials and employees who are duly appointed by competent authority to any position in another government office or agency in a concurrent capacity, may, in the discretion of the President, be allowed to receive additional compensation in the form of allowance or honorarium at such rates he shall fix and subject to such conditions as he may prescribed. Such additional compensation shall be paid from the appropriations of the office or agency benefitting from the concurrent service.
Sec. 60. Restrictions on Salary Increases.—No portion of the appropriations provided in the General Appropriations Act shall be used for payment of any salary increase or adjustment unless specifically authorized by law or appropriate budget circular nor shall any appropriation for salaries authorized in the General Appropriations Act, save as otherwise provided for under the Compensation and Position Classification Act, be paid unless the positions have been classified by the Budget Commission.
Sec. 61. Merit Increases.—The budgets of national government agencies may provide for a lump-sum for merit increases, subject to such terms and conditions as may be approved by the President. Such lump-sum shall be used to fund salary increases approved by the head of agency in recognition of meritorious performance: Provided, That the Civil Service Commission and the Department of Budget shall jointly issue the rules and regulations governing the granting of such merit increases.
Sec. 62. Salary for Substitutionary Service.—When an official or employee is issued a duly approved appointment in a temporary or acting capacity to take the place and perform the duties of another who is temporarily absent from his post with pay, savings in the appropriations of the department, bureau or office may be used for the payment of his salary or differential, subject to the approval of the Secretary.
Sec. 63. Additional Compensation for Overtime Service.—Officials and employees of the National Government, when required to work overtime after regular working hours during ordinary days, during half-day sessions, or on Saturdays, Sundays and holidays, by the heads of departments concerned, to finish work that must be completed within a specified time, may be paid overtime compensation from any unexpected balance of the appropriation for salaries and wages authorized in the General Appropriations Act and under such guidelines as may be issued by the President.
Sec. 64. Compensation of Persons Receiving Pension.—A person receiving life pension, annuity, or gratuity as a result of service in the national government or any local government unit, or from any government-owned or controlled corporation, who is reappointed to any position, the appropriation for the salary of which is provided from funds of the office, shall have the option to receive either the compensation for the position, or the pension, gratuity or annuity, but in no case shall he receive both.
Sec. 65. Prohibition of Voluntary Service.—Unless otherwise specifically approved by the President, no person shall be employed or appointed in the government under the guise of voluntary service, with compensation below the authorized hiring rate for the position, but with privilege of transportation and/or representation expenses in any form, or of receiving per diems, allowances, honoraria, subsistence, quarters in cash or in kind, payable from government funds: provided, that the application of this provisions may be waived to authorize voluntary service in the Armed Forces of the Philippines or in connection with relief operations.
Sec. 66. Additional Compensation for School Faculty Members.—Professors, instructors, teachers, or members of the faculty of government schools, colleges and universities, when required to teach more than their regular teaching loads may be paid additional compensation not exceeding seventy-five percentum of their basic salary.
Sec. 67. Laundry.—At the discretion of the department head concerned, any official or employee of the national government serving in any hospital, penal institution, or other similar institution, who is required to wear a uniform during the performance of his duties, may be granted laundry allowance in kind, or which may be commuted at such rates as may be authorized by the Department of Budget.
Sec. 68. Hazard Pay.—Upon recommendation of the department head concerned and approval of the Secretary, hazard pay may be allowed to employees who are actually assigned to danger or strife-torn areas, disease-infested places, or in distressed or isolated stations and camps, which expose them to great danger of contagion or peril to life. Such hazard pay shall be paid from savings of the department concerned at such rates, terms and conditions as the Secretary may prescribe.
Sec. 69. Subsistence.—No official or employee of the national government shall be given subsistence, the cost of which is payable from any fund, except the following and only when an appropriation therefor is specifically provided:
    (1) Marine officers, engineers and crew of government vessels, launches, and motorboats, who shall take their meals on the mess when aboard the said vessels, launches, or motorboats;
    (2) Lightkeepers and other employees in light stations duly authorized by the head of the department to receive subsistence, who shall be furnished raw canned, or preserved food supplies;
    (3) Officials and employees who are required to render service within the premises of hospitals, penal institutions, leper institutions, military installations, and other similar institutions, for a continuous period that includes meal time, may be allowed full subsistence when required to live in said premises to make their services available at any and all times;
    (4) Laborers temporarily fielded to isolated or unsettled districts shall be furnished the usual rations or the equivalent in cash, at the expense of the government.
In hospitals and leper institutions where there are no mess halls or whenever these are inadequate personnel entitled to subsistence allowance in kind may commute such subsistence upon request of the personnel concerned subject to the approval of the department head at authorized rates chargeable against the appropriation for supplies and materials authorized in the General Appropriations Act.
Sec. 70. Subsistence of Crew of Government Vessels.—The subsistence allowance for the officers and crew of the coast guard and revenue cutters and lighthouse tenders and other large vessels operated by the Government shall be spent for conducting a mess under the charge and administration of one or more members of the complement in each vessel to be designated by the corresponding head of department, and in accordance with regulations to be issued by him. The person or persons so designated shall keep an account of the advances of funds received and expenditures made therefrom for the operation of the mess and shall render such report to the corresponding Accounting Officer promptly at the end of each month.
Sec. 71. Furnished Quarters.—When the position of any official or employee is provided with "furnished quarters", such official or employee shall be entitled to the use of such government-owned furniture and equipment as are necessary for his board and lodging and those for his family including children below twenty-one years of age.
Sec. 72. Per Diems of Government Officials and Employees.—When a government official or employee is authorized to travel on official business outside of his permanent station, he shall be entitled to per diems to cover his board and lodging in accordance with his schedule: provided, that in addition to per diems, the official or employee may be entitled to transportation expenses in going to and coming from his destination and to a daily allowance while in the field: provided, further, that officials and employees on travel status whose expenses for board and lodging are paid directly or indirectly by government may not be entitled to receive the per diems and allowances corresponding to such payments.
Department secretaries, heads of Constitutional bodies, undersecretaries and all other positions of equivalent rank are authorized the reimbursement of actual expenses supported by receipts, within such limits as may be imposed under the provisions of this section.
Officials and employees authorized to travel abroad may be granted clothing allowance: Provided, That no official or employee shall be granted such clothing allowance oftener than once every twenty-four (24) months.
The rates of per diems and other allowances as authorized in this section shall be determined by the President. The rates may be changed from time to time upon recommendation of a Travel Rates Committee which is hereby created, consisting of the Secretary of Budget as Chairman and the Secretary of Foreign Affairs, the Secretary of Tourism and the Chairman, Commission on Audit, or their representatives, as members.
The Committee shall review travel rates and shall recommend to the President for consideration and approval modification in rates and policy when found to be warranted by actual domestic or foreign travel costs, as the case may be.
Government-owned or controlled corporations shall observe the rates established under this section: provided, that profit-making corporations may adopt their own scales as may be provided by law. The Travel Rates Committee shall issue the necessary rules and regulations to enforce the provisions of this section.
Sec. 73. Additional Conditions for Payment of Travel Expenses.—When travel is done by water and subsistence is not included in the transportation cost, the amount actually and necessarily spent for subsistence during such travel time shall be paid, and no per diems shall be allowed in lieu thereof.
Per diems and travel allowances shall not be granted to members of field parties or others for whom subsistence and allowances in kind are supplied or other special provision made to cover travel expenses.
The travel expenses of a government official or employee who is assigned to render a special service to any private person or entity, the expenses for which are payable by the latter, shall be paid from a deposit which the private party shall be required to make before the performance of the special service is commenced, subject to the limitations and requirements herein provided for travel expenses payable from government funds.
No official or employee of the Government who remains temporarily at one station for a period longer than one (1) month shall be paid per diems in excess of one (1) month except upon the approval of the head of department and, in case his temporary stay in any one place exceeds three (3) months, payment of per diems in excess of three (3) months shall be made only upon the previous approval of the Secretary.
Sec. 74. Transportation of Members of Family of an Employee Transferred from One Station to Another.—Whenever, due to the exigencies of the service and not at his own request, an official or employee is transferred from one station to another, said official or employee and his spouse and children below twenty-one years of age shall be entitled to transportation and freight for reasonable and necessary baggage and household effects, at the expense of the Government, to be paid from the appropriation for traveling expenses of the bureau or office concerned.
Sec. 75. Purchase, Use, Operation and Maintenance of Motor Transport Equipment.—No appropriation for equipment authorized in the General Appropriations Act shall be used directly or indirectly for the purchase of automobiles, jeeps, jitneys, station wagons, motorcycles, trucks, launches, speedboats, airplanes, helicopters and other types of motor transport equipment unless otherwise specifically authorized by the President.
All departments, bureaus, offices and agencies authorized to purchase motor transport equipment including those acquired through donations, gifts or gratuitous title are likewise authorized to use, operate and maintain them for purposes of carrying out the official functions and activities of the agency. These motor vehicles shall be used strictly for official business, bear government plates only, and after office hours to be kept in garage provided therefor by the office or agency to which they belong, except, when in use for official business outside office hours. The President, however, may authorize exceptions from these provisions for officials of government who work under extended hours or whose activities call for special security arrangements. Any violation of the provisions of this section shall subject the erring official or employee to administrative disciplinary action and he shall be personally liable for any loss or damage caused to the government or third persons.
The Commission on Audit shall issue rules and regulations governing the use, operation and maintenance of government motor transport equipment.
Sec. 76. Limitation of Rental of Motor Vehicles.—No appropriations authorized in the General Appropriations Act shall be used for renting motor transport equipment for a continuous period of more than fifteen days, except as may be authorized by the Secretary.
Sec. 77. Limitation of Purchase of Supplies, Materials, and Equipment Spare Parts.—Except as otherwise provided in the General Appropriations Act, the stock on hand of supplies, materials and equipment spare parts, acquired through ordinary and emergency purchase, shall at no time exceed normal three-month requirements, subject to the pertinent rules and regulations issued by competent authority: Provided, That department heads may approve the build-up of stocks on hand of critical supplies and materials, in anticipation of cost increases or requirements of a national emergency, and specifying maximum quantities of individual items, but in no case shall these stocks exceed more than one year's supply, unless otherwise approved by the President.
Sec. 78. Purchase of Locally Manufactured Products.—All appropriations for the purchase of equipment, supplies and materials authorized in the General Appropriations Act shall be available only for locally manufactured equipment; parts, accessories, medicines and drugs, supplies and materials, except when none is available in the market or when the price of the locally manufactured article exceed those determined by the Flag Law.
Sec. 79. Availability of Appropriations for Rental of Building and Grounds.—Any appropriation authorized in any Act for rental of buildings and grounds for any department, bureau, office or agency shall be available for expenditure only when authorized by the department head concerned. Such appropriation may also be used for lease-purchase arrangements.
With the concurrence of the Secretary of Budget and Management and the Secretary of Finance, the head of the department may contract with any government financial institution for loans intended for the acquisition of land for the construction of an office building for any of the agencies under the department. Annual amortization of the loans shall be taken from the appropriation for rental authorized under any Act for the department, bureau or office concerned.
Sec. 80. Misuse of Government Funds and Property.—Any public official or employee who shall apply any government fund or property under his administration or control to any use other than for which such fund or property is appropriated by laws, shall suffer the penalty imposed under the appropriate penal laws.
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