FOURTEENTH CONGRESS OF THE REPUBLIC 
} 
OF THE PHILIPPINES 
7 } JIJN 30 P l i  .-Ly 
First Regular Session 
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Introduced bv SENATOR EDGARDO J .  ANGARA 
EXPLANATORY NOTE 
Section 5 of Article lX.B of the Constitution provides: 
"The Congress shall provide for the standardization of compensation of 
government officials and employees, including those in government-owned or 
controlled corporations with original charters, taking into account the nature 
of the responsibilities pertaining to, and the qualifications required for, their 
positions." 
The current compensation and position classification system was 
legislated on the basis of the principle of "equal pay for equal work. To 
achieve this end, Republic Act No. 6758 provided for a position classification 
scheme consisting of classes of positions classified into four main categories: 
professional supervisory, professional non-supervisory, sub-professional 
supervisory, and sub-professional non-supervisory. The compensation 
classification system prescribes a salary schedule consisting of 33 salary 
grades under which the different positions are classified. 
This salary structure has, however, been characterized by internal 
distortions and external inequities, caused largely by a system that allows for 
salary step increments based on longevity rather than performance. This 
scheme necessarily brings about overlaps in salary rates between salary 
grades which give rise to situations where employees of higher rank receive 
salaries lower than that of subordinates who have been in the service for a 
longer time. The disincentive also discourages performers from seeking 
promotion to higher positions as the salary may not be commensurate to the 
increase in responsibilities. 
The Executive Orders issued by President Ramos pursuant to Joint 
Resolution No. 1, Series of 1993, passed by Congress, mandating across-the- 
board increases in a span of four years of implementation, did not address the ' 
distortions and inequities under the current system. To the contrary, the 
flawed system and the problems that arose from it were perpetuated. 
Several government-owned and controlled corporations and financial 
institutions have likewise been granted exemption from the coverage of the 
system. 
These exemptions have widened the disproportions between the 
compensation of government personnel and that of employees of GOCCs and 
GF1s. L 


In the meantime, legislative measures aimed at augmenting the pays 
of certain positions in government have also been initiated to bridge the gap 
between compensation levels of the government and GOCCs and GFls. 
Currently, there are also initiatives to lobby with the Congress to pass 
similar laws for other specific government officials and employees. 
These piecemeal legislations, however, have done little to solve the 
greater flaws inherent in the current system. It is these problems that the 
proposed bill seeks to address. 
The areas needing key reforms relating to civil service size and quality 
include (a) developing and implementing a strategy for adjusting civil service 
employment to the appropriate role, functions and structure of the state and 
in concert with the budget process reforms, @) increasing the transparency 
and competitiveness of civil service compensation while at the same time 
decompressing salary levels for key civil service grades; and (c) improving 
professionalism and meritocracy. 
The Omnibus System presented in the proposed bill provides for 22 job 
grades, as opposed to the current 33 salary grades. Verifiable compensable 
factors are used to determine the job grade of each position in government. 
These compensable factors are: Skills and Knowledge, Nature of Work, and 
Answerability. 
Aside from the increased base pays to be received by government 
employees, all other forms of pay are standardized and rationalized, in order 
to uphold the Constitutional mandate requiring standardization of 
compensation. In any case, performance will continue to be recognized and 
rewarded through incentives. 
The Omnibus System which is presented as the alternative 
compensation framework under the proposed bill adopts the following 
philosophy: 
Internal equity among government employees, providing equal 
pay for work of equal value, and basing differences in pay upon 
substantive distinctions in verifiable compensable factors; 
External equity, considering prevailing market rates for work of 
equal value in medium-sized firms in the private sector, but 
remaining modest in keeping with fiscal realities; 
(c) 
Performance, which shall be the basis for merit increases, 
promotions, and the grant of incentives; and 
(d) 
Ease in administration of 
the 
Omnibus 
System and 
responsiveness to current challenges. 
(a) 
(b) 
Immediate passage of this bill is therefore earnestly sought. 
2 4  /A 
EDGARDO J. ANGARA 
Senator 


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FOURTEENTH CONGRESS OF THE REPUBLIC 
} 
7 JUN 30 p4:;'jl 
OF THE PHILIPPINES 
First Regular Session 
I 
SENATE 
s. No. 
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2
 
Introduced by SENATOR EDGARDO J. ANGARA 
AN ACT 
ADOPTING AN OMNIBUS JOB CLASSIFICATION AND 
COMPENSATION STANDARDIZATION SYSTEM IN THE CIVIL 
SERVICE, APPROPRIATING FUNDS THEREFOR, PROVIDING 
PENAL SANCTIONS FOR VIOLATIONS THEREOF, AND FOR 
OTHERPURPOSES 
ARTICLE I 
GENERAL PROVISIONS 
SECTION 1. Short Title. - This Act shall be known as the 
"Government Classification and Compensation Act of 2007." 
SECTION 2. Statement of Policy. - Pursuant to Section 5, Article 
IX-B of the Constitution, it is hereby declared the policy of the State to 
provide for the standardization of the compensation of all government 
officials and employees taking into account the nature of the responsibilities 
pertaining to, and the qualifications required for, their positions, thereby 
strengthening the government's merit and reward system. 
SECTION 3. Governing Principles. - Government shall provide for 
an effective, efficient, and upright public service through a corps of competent 
and motivated civil servants using a fiscally-sound and rational 
compensation and benefits system. 
(a) 
The State recognizes the indispensable and enduring role of the 
civil service in implementing the laws, managing public affairs, 
and ensuring the delivery of public services. 
To this end, the State shall provide the enabling environment 
that will promote accountability, responsibility, integrity, 
loyalty, efficiency, patriotism, justice, productivity, 
and 
(b) 


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excellence 
in the civil service, thereby upholding the 
Constitutional mandate that public office is a public trust. 
Recognizing the need to attract, retain, and motivate such a 
corps of civil servants, the State shall develop, implement, and 
maintain a rational compensation and benefits system which 
shall be internally and externally equitable, performance- 
based, and easy to administer. 
The compensation of government employees shall be modest in 
recognition of fiscal realities, and in support of the ideal that 
public office being a public trust, public officers and employees 
must, at a11 times, be accountable to the people, serve them with 
utmost responsibility, integrity, loyalty, and efficiency; act with 
patriotism and justice, and lead modest lives. 
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SECTION 4. Definition of Terms. - For purposes of this Act, the 
following terms shall have the corresponding meanings: 
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(a) 
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(b) 
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(e) 
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“Base Pay” - synonymous to salary; the fixed amount of money 
given to an employee as payment for services rendered, which 
consists only of the gross salary, without other benefits or 
emoluments. 
“Benchmark Job” - jobs that are service-wide, that is, common 
to all sectors, or representative of specific sectors, and relatively 
comparable to jobs outside the government, the descriptions of 
which will be used as a basis for the valuation of all other jobs in 
the civil service. 
“Commission”- the Civil Service Commission or such other 
successor-agency as the Constitution may provide. 
“Compensable factors” - factors used to provide a basis for 
judging job value in a job evaluation plan. In this Act, these are: 
Skills and Knowledge, Nature of Work, and Answerability. 
“Cut” - a range of Job Grades which are grouped together for 
having similar or related nature of jobs. 
“Department” - the Department of Budget and Management, 
or such other successor-agency as the law or regulations may 
provide. 
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(g) 
“Government-owned or controlled 
corporations and 
financial institutions” - refer to all corporations and financial 
institutions owned or controlled by the National Government, 
whether such corporations and financial institutions perform 
governmental or proprietary functions. 
(h) 
“Incentive” - 
a reward, 
financial or otherwise, that 
compensates an employee for high performance and/or continued 
performance. 
“Job Classification Index, or Index” - a table o f  occupational 
services, job titles, and Job Grades for all jobs in the civil 
service, which forms part of, and to which the Omnibus System, 
applies. 
“Job Grade” - a category of jobs which, although different with 
respect to kind or subject matter of work, are sufficiently 
equivalent as to Skills and Knowledge, Nature of Work, and 
Answerability, to warrant the inclusion of such classes of jobs 
within one range of Base Pay, and which distinguishes it from 
other Job Grades in the Base Pay Schedule. 
6) 
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(k) 
“National Government”- refers to the Executive, the 
Legislative, and the Judicial Branches, the Constitutional 
Commissions, and other offices created or mentioned in the 
Constitution, and shall include, but shall not be limited to, all 
departments, bureaus, offices, boards, commissions, courts, 
tribunals, councils, 
authorities, 
administrations, 
centers, 
institutes, state universities and colleges, and Government- 
owned and controlled corporations and financial institutions. 
“New Base Pay” - the Base Pay of an employee pursuant to the 
terms of this Act. 
(1) 
(m) 
“Omnibus 
Job 
Classification 
and 
Compensation 
Standardization System, or Omnibus System” - the system 
herein adopted for classifying jobs and determining ‘rates of 
Total Compensation for jobs and employees. It consists, among 
others, of the Job Classification Index; the Career Track that 
employees may progress through; the Total Compensation 
Framework, including the Base Pay Schedule, Allowances and 
Other Pay, and Incentives; the rules for assignment of jobs to 
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grades, and of incumbents to Steps; the conditions for 
permitting Base Pay increases, as well as creation of and 
increases in Allowances and Other Pay, and Incentives; and all 
other policies, rules, and regulations for the implementation and 
administration thereof. 
“Previous Base Pay” - the Base Pay of an employee prior to the 
effectivity of this Act. 
“Step”- a level of Base Pay within a Job Grade. 
“Total Compensation” - the total amount of payment given to 
an employee for services rendered, consisting of the following 
components: (i) Base Pay; (ii) Allowances and Other Pay; and 
(iii) Incentives. 
‘‘Uniformed Personnel” - government employees who directly 
perform duties and responsibilities related to national security 
and actual defense of the State, or ‘public safety and internaI 
peace and order; whose selection, hiring, appointment, transfer, 
and ‘promotion are governed by a separate merit and promotion 
system; who are subject to a different set of disciplinary 
procedure; and who are covered by a distinct retirement and/or 
separation benefits system. 
For purposes of this Act, the term refers to military 
personnel of the Armed Forces of the Philippines and Uniformed 
Personnel of the Philippine National Police, pursuant to 
RA6638, as amended, and RA6648, as amended. The term also 
applies to the Uniformed Personnel of all other agencies which 
have adopted these laws, such as the Bureau of Jail 
Management and Penology, the Bureau of Fire Protection, the 
Philippine Coast Guard, the National Mapping and Resource 
Information Authority, and their successor agencies. 
ARTICLE I1 
COVERAGE 
SECTION 6. National Gouernment - This Act shall apply to all jobs, 
appointive or elective, on full or part-time basis, permanent or temporary, 
now existing or hereafter created in the National Government, including 
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Government-owned or controlled-corporations and financial institutions with 
original charters. 
Excluded from the coverage of this Act are individuals and groups 
engaged through job orders or contracts of services, non-organic personnel of 
the government, and Uniformed Personnel. The base pay of Uniformed 
Personnel shall be as prescribed in R.A. No. 6638, as amended, and R.A. No. 
6648, as amended. 
SECTION 6. Local Government Units. - . Local governments may 
adopt the provisions of this Act, including the Base Pay Schedule in Section 
15 hereof, at such rates they may deem proper taking into consideration their 
financial capability: Provided, That partial implementation shall be fixed at a 
uniform percentage applied uniformly to all jobs in the local government. 
Notwithstanding any provision of law to the contrary, the provisions of 
Sections 31 and 32 hereof, and the provisions of Section 325 of Republic Act 
No. 7160, as amended, shall apply. 
ARTICLE I11 
OMNIBUS JOB CLASSIFICATION AND 
COMPENSATION STANDARDIZATION SYSTEM 
SECTION 7. Adopting an Omnibus- Job Classification and 
Compensation Standardization System - The Commission and the 
Department shall jointly design, develop, and establish the Omnibus System, 
or amend the same as necessary, which shall replace and supplant the 
unified Compensation and Position Classification System prescribed under 
Presidential Decree No. 985, as amended. 
SECTION 8. Governing Principles of the Omnibus System - The 
Omnibus System shall be created and implemented using the following 
principles: 
(a) 
The Omnibus System shall promote internal equity among 
government employees, providing equaI pay for work of equal 
value, and base differences in pay upon substantive distinctions 
in verifiable Compensable Factors. Consequently, Base Pay, 
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Allowances and Other Pay, and Incentives shall be standardized 
and rationalized across all agencies. 
The Omnibus System shall give due regard to external equity, 
considering prevailing market rates' for work of equal value in 
medium-sized firms in the private sector. The Omnibus System 
shall be kept modest, in keeping with fiscal realities. 
The Omnibus System shall use performance as basis for merit 
increases, promotions; and the grant of Incentives, employing an 
integrated system for evaluating work performance of both the 
agency and its employees. 
The Omnibus System shall be easy to administer and responsive 
to current challenges. Simplified terms shall be used to 
denominate all jobs in the civil service. A review of government 
compensation rates, taking into account various factors, shall 
also be made periodically. 
SECTION 9. Job Classification Index- The Omnibus System shall 
provide for a Job Classification Index to be developed jointly by the 
Commission and the Department, using the following guidelines: 
Except for the officials in Section 10 hereof, the Commission and 
the Department shall jointly rename all existing jobs in 
government using generic job titles across the bureaucracy, 
qualified by the agency to which the job is attached. The 
Commission and the Department shall thereafter jointly classify 
each job in the Job Classification Index, based on Compensable 
Factors in the updated job descriptions to be submitted by the 
agencies and validated by the Commission and the Department. 
Any modification of the jobs in the Index, including the creation 
or abolition of jobs, or the consolidation or division of functions 
thereof, as a result of organizational, re-organizational, and/or 
substantial changes in work methods and duties, shall be made 
pursuant to law: Provided, That new jobs-shall be created only 
when new duties are found to exist. 
The Commission and the Department shall monitor and update 
the description for each job in the Index, after consultation with 
the agencies to the extent necessary; and conduct periodic 
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surveys 
of 
agencies 
to 
ascertain 
the 
actual 
duties, 
responsibilities, and other requirements of jobs therein. 
Whenever the circumstances warrant, the Commission and the 
Department may jointly certify necessary changes in job 
description, 
Job 
Grade, 
Step 
assignment, 
and 
Total 
Compensation. 
Such certifications 
shall be binding on 
administrative, certifying, payroll, disbursing, accounting and 
auditing officers of the government. 
(d) 
SECTION 10. Job Grades of Officials Mentioned in the 
Constitution, - The Base Pay of the following officials shall be in accordance 
with the Job Grades indicated hereunder: 
SECTION 11. Job Grades for All Other Jobs. - For all other jobs in 
government, the Commission shall select representative entry-level jobs per 
Track as Benchmark Jobs and assign Job Grades therefore, using the same 
baseline for all the jobs in each Track. The Commission shall thereafter 
assign each job to the appropriate Job Grade, using the Compensable Factors 
for each job. 
The highest Job Grade that can be assigned to any career position, 
including those in Government-owned or controlled corporations and 
financial institutions, is Job Grade 18. 
The Commission shall likewise refer to the Job Grade assignments of 
the officials in Section 10 hereof in making Job Grade assignments. 


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SECTION 12. Compensable Factors. - The Job Grade shall be 
determined based on the following compensable factors: 
Skills and knowledge, which include technical skills, or the 
minimum knowledge of technical matters related to the job, 
which may be manifest through education, training, practical 
experience, and eligibility. Skills and knowledge also include 
people skills, or that required for people interaction, both 
internal and external to agency. 
Nature of the work, which refers to the complexity thereof, or the 
mental challenge relative to the routinelnon routine-ness of a 
job; physical working conditions; and the volume of work, 
including inherent work stress, and the frequency thereof. 
Answerability, which refers to the degree to which the job is 
directly answerable (i) for people or property, andlor (ii) to 
taxpayers andlor, (iii) where applicable, peers, thru established 
professional standards. It includes responsibility for people, 
which considers both number of jobs and variety of functions 
supervised or managed; job impact, or the extent to which the 
job directly affects agency operations and goals, in terms of 
reach and the magnitude of impact, or conversely, the impact of 
any error; and professional obligations, including any external 
special obligations or accountability to established professional 
standards. 
The Commission shall have authority to determine the appropriate 
methodology for the evaluation of Compensable Factors for every job in 
government. 
SECTION 13. Career Trucks. - The Omnibus System shall also 
provide for broad occupational groupings of jobs and a system of progression 
which determines the career path of an employee, consisting of the following 
tracks: 
(a) 
Administrative or ‘2 Track” -This track covers administrative 
support service jobs and jobs performing”housekeepin$ 
functions. This includes financial services, general support 
services, and in-house human resource services. 
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Technical 
or 
“T 
Track 
- 
This 
track 
covers 
non- 
administrative/non-housekeeping support service jobs which 
involve the application of a professional or technical discipline, 
or some craft or trade, primarily engaged in the implementation 
of specific programs or services made under supervision. 
Specialized 
or 
“S 
Track”- 
This 
track 
covers 
non- 
administrativehon-housekeeping jobs which are primarily 
highly technical and/or policy defining and determining. These 
jobs require intensive and thorough knowledge of a specialized 
field. 
Executive or “E-Track”- This track covers jobs primarily involved 
in the management of people, resources, and policy. 
SECTION 14. Total Compensation. - Total Compensation of each 
employee shall consist of: 
Base Pay- This amount shall be given to each employee 
pursuant to the Base Pay Schedule provided in Section 15 
hereof. 
Allowances and Other Pay- An agency may grant only such 
Allowances and Other Pay as provided in Section 18 hereof, 
using only such standard rates authorized by the Department, 
and without affecting the Base Pay. 
Incentives- An agency may grant only such Incentives as 
provided in Section 21 hereof, using only such standard rates 
authorized by the Department, except as provided under 
Sections 22 and 23, and without affecting the Base Pay. 
SECTION 15. Base Pay. - Under the Omnibus System, there shall be 
twenty-two (22) Job Grades divided into four (4) Cuts, under the following 
Base Pay Schedule: 
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BASEPAY SCHEDULE 
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CUT I 
CUT 2 
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CUT 3 
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CUT 4 
SECTION 16. Administration of the Base Pay Schedule. - The 
Base Pay Schedule shall be jointly administered by the Commission and the 
Department using these guidelines: 
(a) 
Except for: (i) jobs in Cut 4, which job grades are not delineated 
by Steps; (ii) jobs of other elective officials; and (iii) those with 
fixed terms of office; the Base Pay shall be determined as 
follows: 
(1) 
Step 1 constitutes the Base Pay corresponding to the 
entry level for a job in a given Job Grade, while Step 5 is 
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the maximum amount of Base Pay in such Job Grade. 
Step1 shall be the hiring rate in a given Job Grade. 
An employee can progress through Steps 1 to 5 and 
become entitled to the corresponding increase in Base Pay 
through a performance-based system approved by the 
Commission. 
A progression to a higher Job Grade is a promotion which 
shall be granted only on the basis of merit and fitness, as 
determined by performance andlor qualification standards 
set by the Commission, by which an employee shall 
become entitled to the corresponding increase in Base 
Pay. 
The Base Pay of jobs in Cut 4 shall be the amount indicated in 
the Base Pay Schedule. The Base Pay of other elective officials 
and officials with fixed terms of office shall be the amount 
indicated in Step 1 of their prescribed Job Grade. 
The Base Pay Schedule shall be used for jobs that are paid on a 
monthly rate basis. All amounts of Base Pay in the Base Pay 
Schedule are expressed as gross monthly rates in Philippine 
Pesos, and shall represent full compensation for full-time 
employment, regardless of the location where the work is 
performed. Base Pay for services rendered on a part-time basis 
shall be adjusted proportionately. 
The daily wage rate shall be determined by dividing the monthly 
Base Pay rate by twenty-two (22) working days per month. 
SECTION 17. Special Allowances under Republic Act Nos. 9227, 
9347, and 9279 - The special allowances under Section 6 of Republic Act No. 
9227, Section 4 of Republic Act No. 9347, and Section 4 of Republic Act No. 
9279 shall hereafter be converted as part of Base Pay. The Special Trust 
Fund created under Section 3 thereof R.A. No. 9279 shall be abolished and 
any balance thereof shall revert to the General Fund. 
SECTION 18. Allowances and Other Pay. - Allowances and Other 
Pay shall be limited to: 
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(a) 
Standard Allowances and Other Pay - those amounts given to 
employees for work performed or which attach to all jobs or 
specific jobs across all agencies, at prescribed standard rates. 
Specific-Purpose Allowances - those amounts which attach only 
to jobs under specific conditions, or for special situations in 
specific agencies, which shall be given at prescribed standard 
rates. 
(b) 
SECTION 19. Standard Allowances and Other Pay - This type 
shall be limited to: 
Supplemental Economic Allowance (SEA) - a monthly allowance 
intended to supplement the base pay of all jobs which are not 
entitled to Representation and Transportation Allowance. The 
SEA shall be given at prescribed standard rates, subsuming the 
Additional Compensation (ADCOM) and Personnel Economic 
Relief Allowance (PERA), among others. 
Representation and Transportation Allowance - the monthly 
commutable allowance given to specified employees in the actual 
performance of duties, made payable from programmed 
appropriations, which shall be at prescribed standard rates. 
Transportation allowance shall not be given to employees who 
are assigned government motor transportation. 
Uniform or Clothing Allowance - amounts or items given to 
sustain the provision of the required uniform to employees, 
which shall be given at prescribed standard rates or items. 
Year-End Bonus - an amount equivalent to one (1) month Base 
Pay and cash gift of Five Thousand Pesos (P5, 000) provided 
under Republic Act No. 6686, as amended by Republic Act No. 
8441. 
Overtime Pay - the consideration paid for work, whether in cash 
or compensatory time off, performed by an employee beyond his 
regular working hours in a day, and those performed on rest 
days, holidays, and non-working days, which shall be given at 
prescribed standard rates. 
Nig.ht Differential - the remuneration premium given to an 
employee whose regular working hours fall wholly or partially 
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within six o’clock in the evening or six o’clock in the morning of 
the following day, which shall be given at prescribed standard 
rates. 
SECTION 20. Specific-Purpose Allowances - This type shall be 
Subsistence Allowance - the allowance given to employees whose 
services are made available at ail times in their places of work, 
even during mealtimes, which shall be at prescribed standard 
rates. 
Hazard Pay - the amount given to employees who are exposed to 
hazardous situations as may be determined by the Department, 
which shall be at prescribed standard rates. 
Overseas and Other Allowances - the amounts given to 
employees assigned abroad at such rates authorized under 
Republic Act No. 7157, as amended, and its implementing rules 
and regulations. 
SECTION 21. Incentives - Incentives shall be limited to: 
Productivity Incentive, Collective Negotiation Agreement (CNA) 
Incentive, and Other Benefits - that amount given to enhance 
employee productivity, subject to the accomplishment of agency 
performance targets and the generation of savings. 
Longevity Incentive - that amount given on milestone years to 
recognize the employee’s length of service with at least 
satisfactory performance, or to recognize the agency’s continuing 
and/or viable existence. Longevity shall be rewarded through the 
grant of periodic flat incentives or bonuses, regardless of Job 
Grade, which shalI be at prescribed standard rates. 
Service Incentive - that amount given in the form of honoraria as 
token payments for services rendered outside or in addition to 
the employee’s regular functions, which shall be at prescribed 
standard rates. 
SECTION 22. Prodicctiuity Incentive, CNA Zncentiue, and Other 
Benefits - This type shall be limited to: 
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Productivity and/or CNA Incentive - the Productivity Incentive 
is an amount given to employees or groups of employees as a 
reward for demonstrated productivity. The CNA Incentive is the 
amount generated from cost savings measures provided for in 
the pertinent CNA. 
Health Maintenance Benefit - benefits given to maintain 
employee health, in addition to the benefits provided for under 
the National Health Insurance Program administered by the 
Philippine Health Insurance Corporation. 
StapZe Food Benefit - benefits given to employees to assist them 
in countering the rising cost of the basic constitutes of ordinary 
diet. 
The above shall be chargeable against the agency's savings. 
SECTION 23. Guidelines for Granting the Productivity 
Incentive, CNA Incentive, and Other Benefits - An agency may only grant 
the Incentives in Section 22 hereof subject to the following parameters: 
(a) 
The CNA Incentive shall be given pursuant to Public Sector 
Labor Management Council (PSLMC) Resolution No. 4, series of 
2002, and PSLMC Resolution No. 2, series of 2003, as may from 
time to time be amended by the PSLMC. 
The other Incentives in Section 22 hereof shall be funded by the 
agency from its savings, without securing additional funding 
from the National Government: Provided, That the agency shall 
remit to the General Fund a sum equivalent to twenty percent 
(20%) of the total amount of such Incentives given to all 
employees in the agency for the calendar year, which sums shall 
be used for the equalization of productivity incentives and other 
benefits of employees in government. 
(b) 
(c) 
For employees of all Government owned and controlled 
corporations and financial institutions, the Incentives in Section 
22 hereof may only be granted upon a showing of the agency's 
fiscal and financial viability, in addition to the requirements of 
paragraphs (a) and (b) above. 
The Department shall issue rules for the implementation of 
paragraphs 6) 
and (c) hereof. 
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SECTION 24. Longevity Incentive - This type shall be limited to: 
(a) 
Loyalty Incentive - a one-time Incentive given every five (5) 
years to recognize the employee's length of government service 
with at least satisfactory performance. 
Anniversary Bonus - a one-time Incentive given to employees 
when the agency celebrates or commemorates a milestone 
anniversary, chargeable to the agency's savings. 
(b) 
ARTICLE IV 
CONVERSION TO THE OMNIBUS SYSTEM 
SECTION 25. Treatment of Existing Allowances and Other 
Benefits of Incumbents - The Department shall classify and/or reclassify all 
existing allowances, incentives and other benefits currently being received by 
all government employees, including incumbents, into Base Pay, Allowances 
and Other Pay, or Incentives, pursuant to the Total Compensation 
Framework, and pursuant to the true nature of such, notwithstanding its 
existing nomenclature. 
Except for those in Sections 18 and 21 hereof, all other allowances, 
incentives, and benefits, being enjoyed by incumbents prior to the effectivity 
of this Act, which shall not be continued to be given as a separate amount, 
including ad hoc, provisional, tentative, or improvised benefits being received 
by government employees which are really intended to provide some form of 
economic assistance, in acknowledgement of the inadequacy of compensation 
in government, shall be deemed integrated, subsumed, incorporated, and 
included in the Base Pay Schedule as herein provided, without need of 
further adjustment of the amounts thereof, since the same already reflects 
prevailing economic conditions and the pertinent Compensable Factors. 
Being made in pursuit of a curative policy, this classification and 
reclassification shall apply even as to allowances, incentives, and benefits 
being received by incumbents prior to the effectivity of this Act. 
SECTION 26. Total Compensation-Non Diminution in Pay - 
Notwithstanding any provision of law to the contrary, there shall be no 
diminution in pay where the gross Total Compensation of the employee under 
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the Omnibus System is greater than the gross total pay being received prior 
to the effectivity of this Act. In any case, there shall be no vested right in any 
pay being received by incumbents, unless the incumbent has already 
rendered services therefor. 
SECTION 27. Base Pay- The New Base Pay of all incumbents shall 
conform to the amount in the Base Pay Schedule corresponding to Step 1 of 
the Job Grade jointly assigned to the incumbent by the Department and the 
Commission: Provided, That - 
(a) 
Where the Previous Base Pay of an incumbent is greater than 
Step 1 of such Job Grade, the incumbent shall be assigned to the 
Step with the next higher Base Pay; 
Where the Previous Base Pay of an incumbent is greater than 
the Base Pay for Step 5 of the prescribed Job Grade, the 
incumbent shall be assigned to Step 5 of that Job Grade, and 
continue to receive the Previous Base Pay. In this case, the 
incumbent shall receive no upward adjustment in Base Pay 
until such time as the incumbent is promoted to a higher Job 
Grade, the Base Pay of which is greater than his Previous Base 
Pay. 
(b) 
SECTION 28. Other Pay - (a) The principle of non-diminution shall 
not apply with respect to allowances, remuneration, and benefits being 
received by incumbents prior to the effectivity of this Act (i) for which no 
appropriation has been provided in the National Budget; (ii) which are ad 
hoc, provisional, tentative, or improvised benefits, in acknowledgement of the 
inadequacy of compensation in government, and are thus intended to provide 
some form of economic assistance; and (iii) otherwise for which no 
appropriate approval has been granted. 
(b) The principle of non-diminution shall not apply with respect to any 
type of incentive being received by incumbents prior to the effectivity of this 
Act, the same being contingent on the agency’s or employee’s performance. 
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SECTION 29. Computation of Retirement and Other Benefits - 
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For purposes of retirement, only the Base Pay actually received by an 
employee at the date of retirement shall be included in the computation of 
retirement benefits. 
SECTION 30. Specific Authority of Department The Department, 
in consultation with the Commission, is hereby authorized to issue 
regulations for the transition into the Omnibus System, including the 
continuance, discontinuance, decrease, or increase in rates of previous, 
existing, and future components of Total Compensation, in any form granted. 
ARTICLE V 
THE COMMISSION AND THE DEPARTMENT 
SECTION 31. Exclusive Functions, Powers, and Jurisdiction of 
the Commission. - The Commission shall have exclusive original jurisdiction 
over any and all disputes arising from the interpretation of this Act or its 
implementing rules and regulations, and the implementation of the Omnibus 
System, including, without limitation, any dispute on the allowance, 
disallowance, increase, decrease, classification, or re-classification of any 
component of Total Compensation alleged diminution of pay or benefits, and 
assignment of Job Grades to jobs, and of incumbents to Steps. Cases that are 
instituted in other fora shall be dismissed for lack of jurisdiction, and 
exhaustion of remedies before the Commission shall be a condition sine qua 
non to judicial review on these matters. 
Decisions of the Commission on these matters shall be brought only to 
the Supreme Court via petition for certiorari pursuant to Section 7, Article IX 
of the Constitution, notwithstanding the provisions o f  Republic Act No. 7902. 
Notwithstanding the provision of any law to the contrary, the 
evaluation and approval of qualification standards for all jobs in government, 
including, but not limited to, those in constitutionally fiscalIy autonomous 
groups; Government-owned and controlled-corporations and financial 
institutions, whether or not exempt from the unified system under 
Presidential Decree No. 985, as amended, and/or the Omnibus System; local 
government units; and Uniformed Personnel, but excluding the Armed Forces 
of the Philippines, shall be made exclusively by the Commission. 
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SECTION 32. Joint Functions and Powers of the Commission 
and the Department - In addition to the functions heretofore provided, the 
Commission and the Department shall jointly approve the maintenance of 
existing, and the creation of, future jobs in government. 
Notwithstanding the provision of any law to the contrary, the job 
classification for all jobs in government, including, but not limited to, those in 
constitutionally fiscally 
autonomous groups; Government-owned and 
controlled-corporations and financial institutions, whether or not exempt 
from the unified system under Presidential Decree No. 985, as amended, 
and/or the Omnibus System: local government units; and Uniformed 
Personnel, but excluding the Armed Forces of the Philippines, shall be 
subject to the joint evaluation and approval of the Commission and the 
Department. 
SECTION 33. Periodic Review of the Omnibus System. The 
Commission and the Department shall jointly review the Omnibus System 
every five (5) years and recommend or implement changes as may be 
necessary. However, in case of extraordinary circumstances, such as major 
bureaucracy-wide reorganizations: or when government Base Pay rates are 
below the market, in comparison with medium-sized private firms, by at least 
40%; or when there is a significant, sustained movement in the cost of living, 
then the Commission and Department may review the Omnibus System 
earlier, with a view to addressing these issues with dispatch. 
ARTICLE VI 
REPEAL AND AMENDMENT OF RELATED LAWS 
SECTION 34. Sandiganbayan Jurisdiction, Local Government 
Code, and Other Laws involving Salary Grades. All provisions of laws, 
decrees, executive orders, corporate charters, rules, regulations, circulars, 
approvals, and other issuances, or parts thereof prescribing salary grades of 
government employees, including, without limitation, the jurisdiction of the 
Sandiganbayan under Presidential Decree No. 1606, as amended, as well as 
the salary grades of local government officials under the Local Government 
Code, or Republic Act No. 7160, are hereby repealed. 
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The Job Grade equivalent of such salary grades shall be jointly 
determined by the Commission and the Department under the Omnibus 
System, using the results of the evaluation of the Compensable Factors for 
each affected job. The Commission and the Department shall also refer to the 
Job Grade assignments of the officials in Section 10 hereof in making such 
Job Grade assignments. 
SECTION 35. Repeal of Special Salary and Related Laws a n d  
Regulations. - The provision of all laws, decrees, executive orders, corporate 
charters, rules, regulations, circulars, approvals, and other issuances, or 
parts thereof, that exempt any and all agencies, or specific types of 
employees, from the coverage of the Compensation and Position 
Classification System prescribed under Presidential Decree No. 985, as 
amended; or that authorize and fix position classification, job classification, 
qualification standards, salaries, Base Pay, Allowances and Other Pay, and 
Incentives, of specified jobs, or groups of employees or of agencies, which are 
inconsistent with the Omnibus System; or that exempt the establishment and 
approval for position classification, job classification, qualification standards, 
salaries, Base Pay, Allowances and Other Pay, and Incentives, of specified 
jobs, or groups of employees or of agencies, from the jurisdiction and 
authority of the Commission andlor Department; including, but not limited 
to, Presidential Decree No. 1869; Republic Act No. 3591, as amended; 
Republic Act 6977, as amended; Republic Act No. 7227, as amended; Republic 
Act No. 7305; Republic Act No. 7366; Republic Act No. 7354; Republic Act No. 
7400; Republic Act No. 7648; Republic Act No. 7653; Republic Act No. 7875, 
as amended; Republic Act No. 7907; Republic Act No. 7917; Republic Act No. 
8041; Executive Order No. 286, series of 1995; Republic Act No. 8282; 
Republic Act No. 8289; Republic Act No. 8291; Republic Act No. 8293; 
Republic Act No. 8439; Republic Act No. 8494; Republic Act No. 8523; 
Republic Act No. 8748; Republic Act No. 8763; Republic Act No. 8799; 
Republic Act No. 9136; Republic Act No. 9241; and Republic Act No. 9302, are 
hereby repealed. 
Presidential Decree No. 985, as amended, and Republic Act No. 6758, 
as amended, are hereby repealed. 
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SECTION 36. General Repealing and Amendatory Clause. -All 
laws, decrees, executive orders, corporate charters, rules, regulations, 
circulars, approvals, and other issuances, or parts thereof inconsistent with 
the provisions of this Act are hereby repealed, amended, or modified 
accordingly. 
ARTICLE VI1 
APPROPRIATION 
SECTION 37. Appropriations. - (a) The amount of Ten Billion Pesos 
(P 10,000,000.00) is hereby appropriated to fund the initial implementation of 
this Act. Implementation hereof shall take no longer than four (4) years from 
approval, the amount of which shall be included in the annual General 
Appropriations Act, after taking into consideration the financial position of 
the National Government. 
(b) Government-owned or controlled corporations and financial 
institutions shall charge the implementation of this Act against their 
respective funds. Those which do not have sufficient funds shall implement 
this Act in staggered phases and using such established rates as may be 
jointly approved by the Commission and the Department. 
(c) Local governments which decide to adopt the provisions of this Act 
shall charge the implementation thereof to their respective funds. 
(d) It is understood that any staggered implementation of this Act shall 
be fixed at a percentage uniformly and proportionately applied to all 
employees in such agency, such that .no employee shall receive a percentage 
adjustment higher than that of any other employee in the same agency. 
ARTICLE VI11 
PENAL PROVISIONS AND CIVIL LIABILITY 
SECTION 38. Prohibition against Additional Compensation. - 
(a) 
The grant of Base Pay, Allowances and Other Pay, and 
Incentives in addition to those provided herein, or increases 
thereof, except as herein provided, are prohibited. 
In order to preserve the independence and integrity of the 
Commission on Audit (COA), its employees are prohibited from 
(b) 
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receiving salaries, honoraria, bonuses, allowances or other 
emoluments from any agency, except those amounts paid 
directly by the COA out of its appropriations made pursuant to 
this Act. 
Notwithstanding any law to the contrary, all agencies, 
including, without limitation, Government-owned and controlled 
corporations and financial institutions, local government units, 
the Office of the Solicitor General, the Office of the Government 
Corporate Counsel, and their successor-agencies, are prohibited 
from assessing or billing other agencies for services rendered by 
their employees as part of their regular functions, for purposes 
of paying additional compensation to said employees. 
SECTION 39. Penal Provisions - Without prejudice and in addition 
to the provisions of Republic Act No. 3019, otherwise known as the "Anti- 
Graft and Corrupt Practices Act" and other penal laws, public officers who 
commit any of the following acts shall suffer the penalty of imprisonment of 
not less than six (6) years and one (1) day, but not more than fifteen (15) 
years: 
(a) 
Granting, approving the grant, voting in favor of any decision 
granting or 
approving, or who otherwise affirmatively 
participate in the grant or approval of - 
(i) 
(ii) 
Unauthorized increases in Base Pay; 
Allowances and Other Pay, and Incentives other than 
those enumerated under Sections 18 to 24; 
(iii) 
Increases in the standard rates prescribed by the 
Department for Allowances and Other Pay, and 
Incentives; and 
Increases in retirement pay and other separation benefits 
in violation of Section 29; 
(iv) 
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Granting, approving the grant, voting in favor of any decision 
granting or approving, or who otherwise affirmatively 
participate in the grant or approval of Productivity Incentive, 
CNA Incentive, and Other Benefits in violation of Section 23 
and/or rules and regulations issued to implement Section 23; 
and 
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(c) 
Soliciting additional compensation, for self or in behalf of other 
employees, from other agencies for services rendered in 
performance of regular functions. 
Offering to give or actually giving additional compensation to 
employees of other agencies who render services in performance 
of regular functions, in violation of paragraphs (b) and (c) of 
Section 28. 
(d) 
SECTION 40. Civil Liability - A conviction under this Act or 
Republic Act No. 3019 shall carry with it the civil liability to jointly and 
severally pay damages to the National Government equivalent to the amount 
illegally disbursed. 
ARTICLE M 
FINAL PROVISIONS 
SECTION 41. Implementing Rules and Regulations - The 
Commission and the Department shall, within ninety (90) days after the 
approval of this Act, jointly allocate all jobs in the government to their 
appropriate job titles and Job Grades, assign each incumbent to the 
appropriate Step, and prepare and issue the necessary policy, rules, 
regulations, and guidelines to implement this Act. For this purpose, each 
agency covered by the Omnibus System shall submit to the Commission and 
the Department within thirty (30) days from the approval of this Act, all 
documents, data, and information necessary in the classification of jobs in 
their appropriate Job Grades and Step assignment of incumbents. 
SECTION 42. Separability Clause. - If, for any reason, any section 
or provision of this Act is declared unconstitutional or invalid, the other 
sections or provisions thereof which are not affected thereby shall continue to 
be in full force and effect 
SECTION 43. Effectivity. - This Act shall take effect fifteen (15) days 
after its publication in the Official Gazette . 
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Approved, 
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