FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S. B. No. 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTES 
The bill seeks to provide for an effective, efficient, and upright publkc service 
through a corps of competent and motivated civil servants using a fiscally-sound and 
rational compensation and benefits system. 
The basis for'this biI1 is Section 5 of Article 1X.B of the Constitution pro&es: 
The Congress shall provide for the standardization of compensation of 
government officials and employees, including those in government-owned; or 
controlled corporations uiith original charters, taking into account the nature of 
the responsibilities pertaining to, and the qual$cations required fou, tReir 
positions. 
The current compensation ,and position classification system was legislated on 
the basis of the principle of "equa1.pay for equaI work". This has been charactekzed by: 
internal distortions and external inequities, caused largely by a system tdat allows 
for salary step increments based on longevity rather than performance; 
overlaps in salary rates between salary grades which give rise to situatiqns where 
employees of higher rank receive salaries lower than that of subordinates who have 
been in the service for a ,longer time; and 
discourages performers from seeking promotion to higher positions as &e salary 
may not be commensurate to the increaSe in responsibilities. 
* 
Mandating across-the-board increases in a span of four years of impleqentation, 
did not address the distortions and inequitiks under the current system. To th contrary, 
the flawed system and the problems that arose from it were perpetuate 1 
, Several 
government-owned and controlled corporations and financial institutions havj? Iikewise 
been panted 
exemption from the coverage of the system. These exemptions have 
that of employees of GOCCs and GFIs. 
WidPnPd the disproportions between the compensation of government persbnnel and 
The Omnibus System presented in this bill provides for 22 job grades, as 
opposed to the current 33 salary grades. Verifiable compensable factors ark used to 
determi.ne 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 standakdized m d  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. 
In view of the foregoing, the immediate approval of the bill is earnestly sought 
Senator 


FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
S. B. NO., 
Introduced by Senator Loren Legarda 
AN 4CT 
ADOPTING AN OMNIBUS JOB CLASSIFICATION AND COMPENSqTION 
STANDARDIZATION SYSTEM IN THE CIVIL SERVICE, APPROPRIATING 
FUNDS THEREFOR, PROVIDING PENAL SANCTIONS FOR VIOLATTONS 
THEREOF, AND FOR OTHER PURPOSES 
ARTICLE I 
GENERAL PROVISIONS 
SEC. 1. Short Title. - This Act shall be known as the "Government Cla$sification 
and Compensation Act of 2007." 
SEC. 2. Statement, of Policy. - Pursuant to Section 5, Article IX-8 of the 
Constitution, it is hereby dedclared the policy of the State to providi for the 
standardization of the compensation of all government officials and employees taking 
into account the nature of the responsibilities pertaining to, and the qua!ifications 
required for, their positions, thereby strenghening the government's merit and reward 
system. 
SEC. 3. Governing Principles. - Government shall provide for an effective, 
efficient, and upright public service through a corps of competent and motidated 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 dklivery of 
public services. 
(b) To this end, the State shall :provide the enabling environment that will promote 
accountability, responsibility, integrity, loyalty, efficiency, patriotism, justice, 
productivity, and excellehce in the civil service, thereby upholding the 
Constitutional mandate that public office is a public trust. 
(c) 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. 
(d) The compensation of government employees shall be modest in recoenition of 
fiscal realities, and in support of the ideal that public office being a public trust, 
public officers and employees must, at all times, be accountable to the people, 


serve them with utmost responsibility, integrity, loyalty, and efficiency; act with 
patriotism and justice, and lead modest lives. 
SEC. 4. Definition of Terms. - For purposes of this Act, the following terms shall 
have the corresponding meanings: 
(a) Base Pay - synonymous $0 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. 
(b) Benchmark Job - jobs that are service-wide, that is, common to all sectors, or 
representative of specific sectors, and relatively comparable to jobs otitside the 
government, the descriptions of which will be used as a basis for the vaJuation of 
all other jobs in the civil service. 
(c) Commission- the Civil Service Commission or such other successor agency as the 
Constitution may provide. 
(d) 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. 
(e) Cut - a range of Job Grades which are grouped together for having similar or 
related nature of jobs. 
(f) Department - the Departinent of Budget and Management, or sdch other 
successor-agency as the law or regulations may provide. 
(g) Government-owned or controlled corporations and financial institutians - 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. 
(i) Job Classification Index, or Index - a table of occupational services, job titles, and 
Job Grades for all jobs in the civil service, which forms part of, and to bhich the 
Omnibus System, applies. 
(j) 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 dowledge, 
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. 
(k) National Government - refers to the Executive, the Legislative, and tye Judicial 
Branches, the Constitutional Commissions, and other offices cieated or 
mentioned in the Constitution, and shall include, but shall not be limited to, all 
departments, bureaus, offiqes, boards, commissions, courts, tribunals,; councils, 
authorities, administrations, centers, institutes, state universities and colleges, 
and Government-owned and controlled corporations and financial institutions. 


(1) New Base Pay - the Base Pay of an employee pursuant to the terms of this Act. 
(4 
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. If consists, 
among others, of the Job Classification Index; the Career Track that employees 
may progress through; the Total Cumpensation Framework, including the Base 
Pay Schedule, Allowances and Other Pay, and Incentives; the rules for 
assignment of jobs to grades, and of incumbents to Steps; the conditions for 
permitting Base Pay increases, as well as creation of and increases in Ailowances 
and Other Pay, and Incentives; and all other policies, rules, and regulations for 
the implementation and administration thereof. 
(n) I’reviom Base Pay - the Base Pay 05 an employee prior to the effectivity of this 
Act. 
(0) Step - a level of Base Pay w{thin a Job Grade. 
(p) Total Compensation - the total amount of payment 1 given to an emyloyee for 
services rendered, consisting of the following components: (i) Base Pay; (ii) 
Allowances and Other Pay; and (iii) Incentives. 
(4) Uniformed Personnel - gov,ernment employees who directly perform duties and 
responsibilities related to national Security and actual defense of the State, or 
public safety and internal peace and ;order; whose selection, hiring, apdpintment, 
transfer, and promotion are governed by a separate merit and promotion system; 
who are subject io a different set of disciplinary procedure; and who a& covered 
by a distinct retirement and/or separation benefits system. For purpoies 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 t4 RA6638, 
as amended, and RA6648, as amended. The term also applies to the LJniformed 
Personrd of all other agencies which, have adopted these laws, such as the 
Bureau of Jail Management and Penology, the Bureau of Fire Protehion, the 
Philippine Coast Guard, the National Mapping and Resource Idormation 
Authority, and their successor agencies. 
ARTICLE I1 
COVERAGE 
SEC. 5. National Government. - This Act shall apply to all jobs, apppintive or 
elective, on full or part-time basid, permanent ‘or temporary, now existing or. hereafter 
created in the National Government, including Government-owned or cbntrolled- 
corporations and financial institutions with original charters. Excluded !from the 
coverap;e of this Act are individuals and groups engaged through job orders oq contracts 
of services,. non-organic personnel of the government, and Uniformed Perscknel. The 
base pay of Uniformed Personnel shall be as prescribed in R.A. No. 6638, as kmended, 
and R.A. No. 6648, as amended. 
SEC. 6. Local Government Units. - Local governments may adopt the provisions 
of this Act, inchding the Base Pay Schedulk 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, 1 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 
SEC. 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 Classificatidn System 
prescribed under Presidential Decree No. 985, as amended. 
SEC. 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 goQernment 
employees, providing equal pay for work of equal value, and base diffbrences in 
pay upon substantive distinctions in verifiable Compensable Factors. 
Consequently, Base Pay, Allowances and Other Pay, and Incentives shall be 
standardized and rationalized across all agencies. 
(b) 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 Omnibiis System shall be kept modest, in keeping with fiscal 
realities. 
(c) The Omnibus System shall use performance as basis for merit kncreases, 
promotions, and the grant of Incentives, employing an integrated system for 
evaluating work performance of both the agency and its employees. 
(d)The Omnibus System shall be easy to administer and responsive to current 
challenges. Simplified terms shall be used to denominate all jobs id the civil 
service. A review of government compensation rates, taking into accouht various 
factors, shall also be made periodically. 
SEC. 9. Job Classification Index - The Omnibus System shall provide for a Job 
Classification Index to be develo$ed jointly by the Commission and the Department, 
using the following guidelines: 
(a) Except for the officials in Section 10 hereof, the Commission and the Department 
shall jointly rename all existing jobs in government using generic job tiiles across 
the bureaucracy, qualified by the agency to which the job is attadhed. The 
Commission and the Department shall thereafter jointly classify each job in the 
Job Classification Index, based on Compensable Factors in the upgated job 
descriptions to be submitted by the'agencies and validated by the Commission 
and the Department. 


(b) 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 job$ shall be 
created only when new duties are foivnd to exist. 
(c) 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 surveys of agencies to ascertain the actual 
duties, responsibilities, and other requirements of jobs therein. 
(d) 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 officer$ of the 
government. 
SEC. 10. Job Grades of Officials Mentioned in the Constitution. - The Bgse Pay of 
the following officials shall be in accordance with the Job Grades indicated herkunder: 
Official 
President of the Philippines 
Vice-President of the Philippines 
President of the Senate 
Speaker of the House of Representatives 
Chief Justice of the Supreme Court: 
Senator 
Member of the House of Representatives 
Associate Justices of the Supreme Court 
Chairman of a Constitutional Commission 
Commissioner of a Constitutional Commission 
Chairman of the Cornhission on Human Riehts 
Members of the Commission on Human Rights 
Ombudsman 
Over-All Deputy Ombudsman 
Deputy Ombudsman 
Special Prosecutor 
Job Grade 
22 
21 
21 
21 
21 
20 
20 
20 
20 
19 
20 
19 
20 
19 
18 
18 
SEC. 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 therefor, 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 Commission shall likewise refer to the Job Grade 
assignments of the officials in Section 10 her'eof in making Job Grade assignments. 
SEC. 12 Compensable Factors. - The Job Grade shall be determined based on the 
following compensable factors: 
(a) Skills and knowledge, which include technical skills, or the minimum kpowledge 
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. 
(b) Nature of the work, which refers to the complexity thereof, or the mental 
challenge relative to the rbutine/non routine-ness of a job; physical working 
conditions; and the volume of work, including inherent work stress5 and the 
frequency thereof. 
(c) Answerability, which refers to the degree to which the job is directly answerable 
(i) for people or property, and/or (ii) to taxpayers and/or, (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 ippact, or 
conversely, the impact of ahy error; and professional obligations, incldding 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 eveyy job in 
government. 
SEC. 13. Career Tracks. - The Omnibus System shall 1 also provide for broad 
occupational groupings of jobs and a system of progression which deterhines the 
career path of an employee, consisting of the following tracks: 
(a) Administrative or "A Tracy -This track covers administrative support service 
jobs and jobs performing ' "housekeeping" functions. This incIudes! financial 
services, general support services, and in-house human resource servicds. 
(b) Technical or "T 'Track" - This track covers non-administrafivelnon- 
housekeeping supgort , service jobs which involve the application of a 
professional or technical discipline, or some craft or trade, primarily ehgaged in 
the implementation of specific programs or services made under superdision. 
(c) Specialized or 
"S Track- This track covers non-administrative/non- 
housekeeping jobs Which are primarily highly technical and/or polici defining 
and determining. These jobs require intensive and thorough knowlkdge of a 
,specialized field. 
(d)Executive or "E-Track" - This track covers jobs primarily involved in the 
management of people, resources, axl policy. 
SEC. 14. Total Compensation. - Total Compensation of each employee shall consist 
O f  
(a) Rase Pay. This amount shall be given to each employee pursuant to the Base Pay 
Schedule provided in Section 15 hereof. 
(b) 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. 


(c) 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, a d  without affecting the Base Pay. 
SEC. 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: 
BASE PAY SCHEDULE 
CUT 1 
Job Grade 
Step 1 
Step 2 
Step 3 
Step 4 
Step 5 
Job Grade 1 
5,800 
6,235 
6,670 
7,105 
7,540 
Job Grade 2 
6,844 
7,357 
7,871 
8,384 
8,897 
Job Grade 3 
8,076 
8,682 
9,287 
9,893 
10,4!99 
Job Grade 4 
9,530 
10,244 
10,959 
21,674 
12,&8 
Job Grade 5 
11,245 
12,088 
12,932 
13,775 
14,&8 
CUT 2 
Job Grade 
Job Grade 6 
Job Grade 7 
Job Grade 8 
Job Grade 9 
Job Grade10 
Job Grade 11 
Job Grade 12 
CUT 3 
Step 1 
14,618 
16,957 
19,670 
22,818 
26,469 
30,704 
35,616 
Step 2 
15,715 
18,229 
21,146 
24,529 
28,454 
33,006 
38.287 
Step 3 
16,811 
19,501 
22,621 
26,240 
30,439 
35,309 
40,959 
Step 4 
17,908 
20,773 
24,096 
27,952 
32,424 
37,612 
43,630 
* 
22445 
34,4b9 
39,$5 
19,004 
25,W 
29,d63 
46,XN 
Job Grade 
Step 1 
Step 2 
Step 3 
Step 4 
Steo 5 
Tob Grade 13 
46,301 
49,774 
53,246 
56,719 
60,lkl 
Job Grade 14 
52,783 
56,742 
60,701 
64,659 
68,6!l8 
Job Grade 15 
60,173 
64,686 
69,199 
73,712 
7 8 , v  
Job Grade 16 
68,597 
93,742 
78,887 
84,031 
89,l 6 
Job Grade 17 
78,201 
84,066 
89,931 
95,796 
101,k61 
Job Grade 18 
89,149 
95,835 
102,521 
109,207 
115,893 
CUT 4 
Job Grade 
Base Pay 
Job Grade 19 
99,847 
Job Grade 20 
111,828 
Job Grade 21 
125,247 
Job Grade 22 
140,277 
SEC. 16. Administration df the Base Pay Schedule. - The Base Pay Schedule 
shall be jointly administered by the Commission and the Department udng 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 lkvel for a 
job in a given Job Grade, while Step 5 is the maximum amount 04 Base Pay 
in such Job Grade. Step1 shall be the hiring rate in a given Job Grade. 
(2) An employee can progress through Steps 1 to 5 and become entitled to 
the corresponding increase in Base Pay through a performance1 2 based 
system approved by the Commission. 
(3) 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 and/or qualification standards set by the Commission, by 
which an employee shall become entitled to the corresponding increase in 
Base Pay. 
(b) The Base Pay of jobs in Cut 4 shall be the amount indicated in the Base Pay 
Schedule: Provided, that, career officials belonging to the Judiciary may be 
entitled to steps and to the corresponding increase in Base Pay through a 
performance-based system approved by the Commission. 
(c) The Base Pay of other elective officials and officials with fixed terms of office, 
not in Cut 4, shall be the amount indicated in Step 1 of their prescribed Job 
Grade. 
(d) The Base Pay Schedule shall be used for jobs that are paid on a mohthly rate 
basis. All amounts &Base Pay in the Base Pay Schedule are expressed as gross 
monthly rates in Phhiiippine: Pesos, and shall represent full compensatiop 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. 
(e) The daily wage ,rate shall be determined by dividing the monthly Base Pay 
rate by twenty-two (22) working days per month. 
SEC. 17. Special Allowancks under, Republic Act Nos. 9227, 9347, aad 9279 - 
The special allowances under Section 6 of Republic Act NO. 9227, Section 4 od Republic 
Act No. 9347, and Section 4 of Republic Act No. 9279 1 shall hereafter be codverted as 
part of Base' Pay. The Special Trust Fund created under Section 3 thereof R.AJ No. 9279 
shall be abolished and any balance thereof shall revert to the General Fund. 
SEC. 18. Allowances and Other Pay- Allowances and Other Pay shall he limited 
to: 
(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. 
(b) Specific-Purpose ,Allowances - those amounts which attach only to jbbs under 
specific conditions, or for special situations in specific agencies, which shall 
be given at prescribed standard rates. 


SEC. 19. Standard Allowances and Sther Pay - This type shall be limited to: 
(a) Supplemental Economic' Allowance (SEA) - a monthly- allowance idtended to 
supplement the base pay of all jobs which are not entitled to Reprisentation 
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. 
(b) 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 ekployees 
who are'assigned government motor transportation. 
(c) Uniform or Clothing Allowance - amounts or items given to s4stain the 
provision of the required uniform to employees, which shall be given at 
prescribed standard rates or items. 
(d) Year-End Bonus - an amount equivalent to one (1) month Base Pay: and cash 
gift of Five Thousand Pesos (P5,OOO) provided under Republic A d  No.6686, 
as amended by Republic Act No. 8441: 
(e) Overtime Pay 
-' the consideration paid for work, whether in cash or 
compensatory time off, perforqed by an employee beyond hib 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. 
(f) Night Differential - the remuneration premium given 1 to an employee whose 
regular working hours fall wholly or partially within six o'clock in the 
evening or six o'clock in the morning of the following day, which shall be 
given at prescribed stangard rates. 
I
.
 
SEC. 20. Specific-Purpose Allowances - This type shall be limited to: 
(a) Subsistence Allowance - the allowance given to employees whose sdrvices are 
made available at all times in their places of work, even during mealtimes, 
which shall be at prescribed standard rates. 
(b) 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. 
(c) Overseas and Other Allowances - the amounts given to employees assigned 
abrodd at such rates authorized under Republic Act No. 7157, as amended, 
and its implementing rules and regulations. 
SEC. 21. Incentives - Incentives shall be limited to: 
a) Productivity Incentive, Collective Negotiation Agreement (CNA) incentive, 
and Other Benefits'- that amount given to enhance employee prdductivity, 


subject io the accomplishment of agency performance targets and the 
generation of savings. 
(c) Longevity Incentive - that amount given on milestone years to recqgnize the 
employee's length of service with at least satisfactory performance, or to 
recognize the agency's continuing and/or viable existence. Longevit$ shall be 
rewarded through the grant of periodic flat incentives or bonuses, fegardless 
of Job Grade, which shall be at prescribed standard rates. 
(d)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. 
SEC. 22. Productivity Incentive, CNA Incentive, and Other Benefits - This 
type shall be limited to: 
(a) Productivity and/or CNA Incentive - the Productivity Incentive is ah amount 
given to employees or groups of employees as a reward for derr;onstrated 
productivity. The CNA Incentivd is the amount generated from co$t savings 
measures provided for in the pertinent CNA. 
(b) Health Maintenance Benefit - benefits given to 1 maintain employee health, in 
addition to the benefits provided for under the National HeaIth hsurance 
Program administered by the Philippine Health Insurance Corporation. 
(c) Staple Food Benefit - benefits given to empIoyees 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. 
SEC. 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 Sec@r Labor 
Management Council (PSLMC) Resolution No. 4, series of 2002, anti PSLMC 
Resolution No. 2; series of 2003, as may from time to time be amended by the 
PSLMC. 
(b) 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 yar, which 
sums shall be used for the equalization of productivity incentives kind other 
benefits of employees in, govermient. 
(c) For employees of all Government owned and controlled corporations and 
financial institutions, the Incentives in Section 22 hereof may only de granted 
upon a showing of the 'agency's fiscal and financial viability, in a4dition to 
the requirements"of paragraphs (a) and (b) above. The Department shall issue 
rules for the implementation of paragraphs (b) and (c) hereof. 


SEC. 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. 
ARTICLE IV. 
CONVERSION TO THE OMNIBUS SYSTEM 
SEC. 25. Treatment of Existing Allowances and Other Benefits of Incumbents - 
The Department shall classify and/or re-clrssify 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 adhoc, provisionaf, ,tentative, 
or improvised benefits being received by government employees which $re 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, sincethe same already reflects prevailing 
economic conditions and the pertihent Compensable Factors. 
Being made in pursuit of a curative policy, this classification and re-crassification shall 
apply even as to allowances, incentives, and benefits being received by inturnbents 
prior to the effectivity of this Act. 
SEC. 26. Total Compensation-Non Diminution in Pay - Notwithstanding any 
provision of law to the codtrary, there shall be no diminution in pay where the gross 
Total Compensation of the employee under the Omnibus System is greater than the 
gross total pay being received priok to the effectivity of this Act. 
In any case, tbere shall be no vested right in any pay being received by inaumbents, 
unless the incumbent has already rendered services therefor. 
SEC. 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 Grabe jointly 
assigned to the incumbent by the Department and the Commission: Provided, That - 
(a) Where the Previous Base Pay of an incumbent is greater 1 than Step 1 of such 
Job Grade, the incumbent shall be assigned to the Step with the next higher 
Base Pay; 


(b) 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. Id this case, 
the incumbent shall receive no upward adjustment in Base Pay dmtil such 
time as the incumbent is promoted to a higher Job Grade, the Base Pay of 
which is greater than his Previous Base Pay. 
SEC. 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 emploxee's performance. 
SEC. 29. Computation of ,Retirement and Other Benefits - For putposes of 
retirement, only the Base Pay actually received by an employee at the date of r'etirement 
shall be included in the computation of retirement benefits. 
SEC. 30. Specific Authority of Department-The Department, in cohsultation 
with the Commission, is hereby authorized to issue regulations for the transition into 
the Omnibus System, including the continhance, discontinuance, decrease, or increase 
in rates of previous, existing, and future components of Total Compensatiqn, in any 
form granted. 
ARTICLE V. 
THE COMMISSION AND THE DEPARTMENT 
SEC. 31. Exclusive Functions, Powers, and Jurisdiction of the Commission. - 
The Commission shall have exclusive original jurisdiction over any and alm' 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, 1 decrease, classification, or re- 
classification of any component of Total Compensation, alleged diminution Q p y 
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 Coistitution, 
notwithstanding the provisions , of Republic Act No. 7902. Notwithstadding the 
provision of any law to the contrary, the evaluation and approval of qualification 
standards for all jobs in government, I including, but not limited to, those in 
constitutionally fiscally autonomous graups; 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 
benefits, and assignment of Job Grades to jobs, and of incumbents to Steps. if 
ases a that 
Or 


government units; and Uniformed Personnel, but excluding the Armed Forces of the 
Philippines, shall be made exclusively by the Commission. 
SEC. 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 constitutionall? fiscally 
autono~nous 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 evahation and approval cf the Commission and the Deparment. 
SEC. 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 pay be necessary. However, in case of 
extraordinary circumstances, such as major bureaucracy-wide reorganization$; or when 
government Base Pay rates are bdow the market, in comparison with medium-sized 
private firms, by at least 40%; or when theke is a significant, 1 sustained movement in 
the cost of living, then the Commission and Department may review the Omnibus 
System earlier, with a view to addressing these iswes with dispatch. 
ARTICLE VI. 
REPEAL AND AMENDMENT OF RELATED LAWS 
SEC. 34. Sandiganbayan Jurisdiction, Local Government Code, aod Other 
Laws involving Salary Grades. All provisions of laws, decrees, executive orders, 
corporate charters, rules, regulations, circulars, approvals, and other issuance$, or parts 
thereof prescribing salary grades of government employees, including, without 
limitation, the jurisdiction of the Sandiganbzyan under Presidential Decree Nh. 1606, as 
amended, as well as the salary grades of 'local government officials under the Local 
Government Code, or Republic A& No. 7160, are hereby repealed. 
The Job Grade equivalent of such salary grades shall be jointly determinqd by the 
Commission and the Department under tlie Omnibus System, using the restilts of the 
evaluation of the Compensable Factors formeach affected job. The Commission and the 
Department shall also refer to the Job Grade assignments of the officials in dection 10 
hereof in making such.Job Grade assignments. 
SEC. 35. Repeal of Special Salary and Related Laws and Regulations. -The 
provision of all laws, decrees, executive orders, corporate charters, rules, re ulations, 
circulars, approvals, and other idsuances,, or parts thereof, that exempt an ! 
and all 
agencies, or specific types of employees, from the coverage of the Compens;ltion and 
Position Classification System prescribed under Presidential Decree No 985, as 
amended; or that authorize and fix positiofi 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 nnd approval for position classifiytion, 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 and/or Department; including, but not 
limited to, Presidential Decree NO. 1869; Republic Act No. 3591, as amended4 Republic 
Act 6977, as zxended; Republic Act No. 7227, as amended; Republic Act No. 7305; 
Republic Act No. 7306; Republic Act No. 7354; Republic Act No. 7400; Republic Act No. 
7648; Republic 1 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. 
SEC. 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 VII. 
APPROPRIATION 
SEC. 37. Appropriations. - (a) The amount of 
Ten Billiqn Pesos 
(P10,000,000,000.00) 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 ying such 
established rates as may be jointly approved by the Commission and the Department. 
(c) Local governments which decide to adupt the provisions of this Act shall dharge 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. 
ARTIaE VIII. 
PENAL1 PROVISIONS AND CIVIL LIABILITY 
SEC. 38. Prohibition against Additional Compensation. 1 - (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, is prohibited. 
(b) In order to preserve the independence and integrity of the Commission on Audit 
(COA), its employees are prohibited from 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. 


(c) 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 asFssing 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. 
SEC. 39. Penal Provisions - Without prejudice and in addition to the provisions 
of Republic Act No. 3019, otherwise kfiown as the "Anti-Graft and Corrupi Practices 
Act" and other penal laws, public officers who commit any of the followingjacts 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 gtanting or 
approving, or who otherwise affirmatively participate in the grant or 
approval of -(i) Unauthorized increases in Base Pay; (ii) Allowdnces 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 (iv) Increases in *tirement 
pay and other separation benefits in violation of Section 29; 
(b) Granting, approving the grant, voting in favor of any decision gsanting or 
approving, or who otherwise ,affirmatively participate in the grant or 
approval of Productivity Incentive, CNA Incentive, and Other Bknefits in 
violation of Section 23 ,and/or rules and regulations issued to ihplement 
Section 23; and 
(c) Soliciting additional compensation, for self or 1 in behalf of other employees, 
from other agehcies for services rendered in performance of regular 
functions. 
(d) Offering to give or actually giving additional compensation to emqloyees of 
other agencies who render services in performance of regular furictions, in 
violation of paragraphs (b) and (C) of Section 28. 
SEC. 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 thq National 
Government equivalent to the amount illegally disbursed. 
ARTICLE IX. 
FINAL PROVISIONS 
SEC. 41. Implementing Rules and Regulations - The Commissiorl 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, asbign 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 Ghdes and 
Step assignment of incumbents. 
I 


SEC. 42. Separability Clause. - If, for any reason, any section or provision of 
this Act is declared unconstitutional or invalid, the other sections or provisiohs thereof 
which are not affected thereby shall continue to be in full force and effect. 
aEC. 43. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette. 
Approved,