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13'h CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
1 
First Regular Session 
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'04 
JUL -G All :07 
Explanatory Note 
This bill seeks to provide benefits for early retirement and voluntary separation 
from government service covering all appointed officials and employees of the national 
government including government owned and controlled corporations with original 
charters, as well as~personnel of all local government units. 
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The proposed measure provides for additional benefitsl to early retirees such as 
stock options whekein they could invest part of their income! to more productive and 
income generating ventures. 
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This bill aims to pave the way for the early exit of government personnel which 
would give qualified new comers in any government service the opportunity to develop 
and advance, thereby resulting to a more productive public service base. Streamlining 
the bureaucracy through an early retirement program is a matter that should be given 
serious consideration by the state. 
The proposal is in line with the policy of the state to promote economy, efficiency 
and effectiveness in government operations, particularly in the delivery of essential 
public services and to streamline government functions and to maintain necessary 
positions through an appropriate and voluntary separation scheme. 
Immediate approval of this measi 


'04 
JUL -6 
A11 :a7 
13"' CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
particularly in the 
S E N A T E  
delivery of essential public services and to streamline government 
S. BILLNO. 
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Introduced by SENATOR RALPH 6. RECTO 
AN ACT 
PROVIDING BENEFITS FOR EARLY RETIREMENT AND VOLUNTARY 
SEPARATION FROM THE GOVERNMENT SERVICE, APPROPRlATING 
FUNDS THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Declaration of Policy - 
It is hereby declared the policy of the 
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(c) 
medical and related personnel in the Department of Health are excluded f?om the 
coverage of this Act. 
SEC.3. Early Retirement and Voluntary Separation Benefits- All appomtive 
government officials and employees included in the coverage thereof who voluntarily 
elect in writing to be retired or separated from the service and whose retirement has been 
approved under the provision of this Act shall be paid a gratuity based on the number of 
years of their government service on the basis of the highest salary which they receive in 
the course of their employment in the government as follows: 
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1.25 months basic salary for every year of the first ten (10) years of 
government service or the nearest equivalent fraction thereof 
favorable to them; 
1.6 months basic salary for every year of service or the nearest 
equivalent fraction thereof favorable to them for those who have 
rendered fifteen (15) years up to twenty (20) years of service; 
1.4 months basic salary for every year of service or the nearest 
equivalent fraction thereof favorable to them for those who have 
rendered ten (10) years up to fifteen (15) years of service; 
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covered appointive officials and employees who retire or voluntarily elect to be separated 
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For purposes 
further, That thosetwho retire after rendering government service for twenty (20) years or 
more and avail thkmselves of the incentives benefits provided under this Act shall be 
entitled to an addi ional fifty percent (50%) of the amount corresponding to what they 
will receive Erom the twenty-first year onward. 
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SEC.5. Exclusiveness of BeneBts. 
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An appointive official or employee 
who retires or elects to be separated from the service under this Act shall no longer be 
eligible for retirement under any existing retirement law. 
Sec. 6. Abolition of Positions. 
The positions vacated through the 
early retirement or separation of this incumbent shall be deemed abolished unless 
otherwise declared by the reorganization process’ Provzded, however, That when the 
exigencies of the service require its retention, the head of the office or agency concerned 
must certify under oath the jurisdiction for its retention within the period of sixty (60) 
days from the time of approval or acceptance of the application for retirement or 
separation. Provided, further, That the said certification shall be submitted to and 
approved by the Civil Service Commission. 
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of this Act, the term “head of government office or agency” refers to 
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final disposition of 
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such cases. 
Act: 
(a) 
Early retirees with special skills may register with the Secretariat 
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(b) 
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cooperatives upon request; 
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(c) 
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They shall be given the option to file membership with the Social 
They shall be given an option to join a cooperative whose 
membership and management shall be limited to early retirees. 
They shall be provided with necessary orientation and training on 
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Security System (SSS), with special benefits being early retirees, 
e.g. shorter maturation period; 
Should they decide to put up a business venture, a designated 
government bank shall provide a lower interest rate for early 
retirees, subject to approval of the banks per requirement; and 
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Early retirees under this Act may opt to convert their retirement or 
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separation benefits hereof or a portion thereof into stocks of or 
equity in any of the privatized government-owned or controlled 
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corporations. 
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Law. 
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SECJI. Funding. 
- For national government employees, such sums as may be 
necessary for the payment of the early retirement and separation benefits 
authorized in this Act shall be provided in the Annual General Appropriation 
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corporations. 
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SEG. 12. Penalties. 
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Any government official who compels an 
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For 
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benefits herein granted shall be paid from the internal funds of their respective 
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For employees of local government units, the benefits shall be paid from 
available funds of each local government unit. 
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The, above provisions notwithstanding, all savings accruing from the 
abolition ofthe positions pursuant hereto shall be earmarked and used exclusively 
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for the paynknt of the benefits under this Act. 
employee under guise whatsoever to retire or to be separated from the government 
service by virtue of this Act or otherwise violates any of the provisions hereof 
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shall, upon conviction, be punished by a fine not exceeding Ten Thousand Pesos 
(Pl0,OOO.OO) or by imprisonment not exceeding six (5) months or both sucf fine 
and imprisonment at the discretion of the court. 
SEC. 13. Implementing Rules and Regulations. 
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implementing rules and regulations shall be issued within thirty (30) days from 
the date of effectivity of this Act by the Department of Budget and Management, 
in consultation with the Civil Service Commission and'the Government Service, 
Insurance System: Provided, That any provision of law .to the contrary 
notwithstadding the documents or supporting papers to be submitted by 
appointive dmcials and employees who wish to avail themselves of the benefits 
under this 
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ct are the following: 
A duly approved application under oath for early retirement 
or voluntary separation in accordance with this Act, 
including a duly certified statement of the number of the 
years of service in the government and the rate of the 
highest salary received; 
Money and property clearance from the agency Concerned; 
and 
Sworn statement of assets and liabilities, net worth and 
financial and business interest. 
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(b) 
(c) 
The processing and actual payment of benefits of the appointive 
officials and employees concerned shall be completed within forty- 
five (45) days from the date of submission of all foregoing 
documents. 
SEC.14. Compliance and Reporting. 
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Six '(6) months from the 
effectivity of this Act, the Department of Budget and Management, and the Civil Service. 
Commission shall, :on the .basis of the reports of the various head of government offices 
and agencies, render a report to Congress on the number of government employees 
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affected, the type or nature of positions involved, the total amount spent and an 
evaluation thereof 
SEC. 15. Repealing Clause. - 
All laws, rules and regulations, or parts 
thereof inconsistent with the provision of this Act, are hereby repealed or modified 
accordingly. 
SEC. 16. Separability Clause.- 
If any part, section or provision of this Act 
shall be held invalid or unconstitutional, no other part, section or provision thereof shall 
be affected thereby. 
SEC. 17. 
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Effectivity. - This Act shall take effect upon publication in two (2) 
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newspapers of general circulation. 
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Approved, 1 
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