Thirteenth Congress of the 
1 
Third Regular Session 
) 
REPUBLIC OF THE PHILIPPINES ) 
S E N A T E  
Senate No. 243 
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Introduced by Senator Edgardo J. Angara 
EXPLANATORYNOTE 
Section 5 of Article 1X.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 fhe 
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. 
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These exemptions have widened the disproportions between the compensation of 
government personnel and that of employees of GOCCs and GFls. 
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, (b) 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: 
(a) 
lnternal 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; 
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 
(b) 
(c) 
challenges. 
Immediate passage of this bill is therefore earnestly sought. 
ED ARDO /& 
.ANGARA 
Senator 
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16 
Thirteenth Congress of the 
REPUBLIC OF THE PHILIPPINES 
) 
Third Regular Session 
1 
S E N A T E  
Senate Bill No. 2135 
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 OTHER PURPOSES 
ARTICLE I 
GENERAL PROVISIONS 
SEC. 1. Short Title. - This Act shall be known as the "Government 
Classification and Compensation Act of 2006." 
SEC. 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. 
SEC. 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. 
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(b) 
To this end, the State shall provide the enabling environment that will 
promote accountability, responsibility, integrity, loyalty, efficiency, patriotism, justice, 
productivity, and 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. 
(d) 
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 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: 
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 judgino 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 
Government-owned or controlled corporafions and financial institutions 
(c) 
(a) 
(b) 
(c) 
(d) 
(e) 
(f) 
(9) 
other successor-agency as the law or regulations may provide. 
33 - refer to all corporations and financial institutions owned or controlled by the 
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National Government, whether such corporations and financial institutions perform 
governmental or proprietary functions. 
lncenfive - a reward, financial or otherwise, that compensates an 
employee for high performance and/or continued performance. 
Job Classification 
Index, or lndex - a table of 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. 
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. 
(I) 
New Base Pay - the Base Pay of an employee pursuant to the terms of 
this Act. 
(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 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. 
(n) 
. Previous Base Pay - the Base Pay of an employee prior to the 
(h) 
(i) 
(j) 
(k) 
effectivity of this Act. 
(0) Step - a level of Base Pay within a Job Grade. 
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(p) 
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. 
duties and responsibilities related to national security and actual defense of the 
State, or 'public safety and internal 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 II 
(9) 
Uniformed Personnel - government employees who directly perform . 
COVERAGE 
SEC. 5. National Government - 
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 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. 
SEC. 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. 
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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 111 
OMNIBUS JOB CLASSIFICATION AND 
COMPENSATION STANDARDIZATION SYSTEM 
S EC. 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. 
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 government 
employees, providing equal pay for work of equal value, and base differences 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 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. 
SEC. 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: 
(c) 
(d) 
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(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 
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. 
(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 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 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 officers of the 
government. 
SEC. IO. 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: 
(c) 
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Ombudsman 
Over-All Deputy Ombudsman 
Deputy Ombudsman 
Special Prosecutor 
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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 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. 
SEC. 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 !he 
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. 
(c) 
Answembilfty, which refers to the degree to which the job is directly 
answerable (i) for people or property, and/or (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. 
(a) 
(b) 
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The Commission shall have authority to determine the appropriate 
methodology for the evaluation of Compensable Factors for every job in government. 
SEC. 13. Career Tracks. - 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: 
Administrative or “A Track” -This track covers administrative support 
service jobs and jobs performing ”housekeeping” functions. This includes financial 
services, general support services, and in-house human resource services. 
Technical or “T Track - This track covers non-administrativehon- 
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. 
(d) 
Executive or “E-Track”- This track covers jobs primarily involved in the 
management of people, resources, and policy. 
SEC. 14. Total Compensation. - Total Compensation of each employee shall 
consist of: 
(a) 
Base Pay. This amount shall be given to each employee pursuant to 
the Base Pay Schedule provided in Section 15 hereof. 
(b) 
Allowances and Other fay. 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. 
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: 
(a) 
(b) 
(c) 
(c) 
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BASEPAYSCHEDULE 
CUT 1 
CUT 2 
CUT 3 
CUT 4 
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JOI 
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SEC. 16. Administration of the'Base Pay Schedule. - The Base Pay 
Schedule shall be jointly administered by the Codmission 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 oth,er elective officials; and (iii) those with fixed terms of office; the 
Base Pay shall be determined as.follows: 
Step 1 constitutes the Base Pay corresponding to the entry level for a 
job in a given Job Grade, while Step 5 is 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 and/or 
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. 
(d) 
The daily wage rate shall be determined by dividing the monthly Base 
Pay rate by twenty-two (22) working days per month. 
SEC. f 7. 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. 
(1) 
(2) 
(3) 
(b) 
(c) 
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SEC. 18. Allowances and Other Pay- Allowances and Other Pay shall be 
(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. 
SEC. 19. Standard Allowances and Other Pay - This type shall be limited 
(a) 
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. 
(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 employees who are 
assigned government motor transportation. 
Uniform or Clofhing 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,OOO) provided under Republic Act No. 
6686, as amended by Republic Act No. 8441. 
Overtime f a y  - 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. 
Night Differential - the remuneration premium given 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 
standard rates. 
limited to: 
(b) 
to: 
(c) 
(d) 
(e) 
(f) 
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SEC. 20. Specific-Purpose Allowances - This type shall be limited to: 
(a) 
Subsistence Allowance - the allowance given to employees whose 
sewices 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 Ofher 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. 
(b) 
(c) 
SEC. 21. lncentives - Incentives shall be limited to: 
(a) 
Producfivity fncentive, 
Collective Negotiation Agreement [CNA) 
Incentive, and Other Benefifs - that amount given to enhance employee productivity, 
subject to the accomplishment of agency performance targets and the generation of 
savings. 
(b) 
Longevity lncenfive - 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 shall be at prescribed standard rates. 
Service lncentive - 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) 
Productivify and/or CNA lncentive - 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 Benefif - 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. 
Staple Food Benefit - benefits given to employees to assist them in 
countering the rising cost of the basic constitutes of ordinary diet. 
(c) 
(b) 
(c) 
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The above shall be chargeable against the agency's savings. 
SEC. 23. Guidelines for Granting the Productivity Incentive, CNA 
lncenfive, and Uther Benefits - An agency may only grant the Incentives in Section 
22 hereof subject to the following parameters: 
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. 
(a) 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. 
(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 (b) 
and (c) hereof. 
SEC. 24. Longevitylncentive - This type shall be limited to: 
(a) 
(a) 
Loyalfy lncenfive - a one-time Incentive given every five (5) years to 
recognize the employee's length of government service with at least satisfactory 
performance. 
(b) 
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 andlor reclassify all existing 
allowances, incentives and other benefits currently being received by all government 
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employees, including incumbents, into Base Pay, Allowances and Other Pay, or 
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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 re- 
classification shall apply even as to allowances, incentives, and benefits being 
received by incumbents prior to the effectivity of this Act. 
SEC. 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 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 setvices 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 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; 
(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. 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. 
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SEC. 28. Otherpay - (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. 
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. 
SEC. 29. Computation of Retirement and Other Benefits - 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. 
SEC. 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 
(b) 
SEC. 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 Compensatioty 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. 
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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 of 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 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, andlor the Omnibus 
System; local 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 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. 
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 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 
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SEC. 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. 
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. 
SEC. 35. Repeal of Special Salary and Related Laws and 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 
and/or 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 
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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 VU. 
APPROPRIATION 
SEC. 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 VIII. 
PENAL PROVlSlONS AND CIVIL LIABILITY 
SEC. 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, is prohibited. 
In order to preserve the independence and integrity of the Commission 
on Audit (COA), its employees are prohibited from receiving salaries, honoraria, 
(b) 
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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. 
SEC. 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: 
Granting, approving the grant, voting in favor of any decision granting 
or approving, or who otherwise affirmatively participate in the grant or approval of - 
Unauthorized increases in Base Pay; 
(c) 
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(i) 
(ii) 
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 
(iv) 
Increases in retirement pay and other separation benefits in violation of 
Section 29; 
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 
(c) 
Soliciting additional compensation, for self or in behalf of other 
employees, from other agencies for services rendered in performance of regular 
functions. 
(d) 
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. 
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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 the 
National Government equivalent to the amount illegally disbursed. 
ARTICLE IX. 
FINAL PROVISIONS 
SEC. 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. 
SEC. 42. Separabilify 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. 
SEC. 43. €ffecfivify. - 
This Act shall take effect fifteen (15) days after its 
publication in the OHchl Gazette . 
Approved, 
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