THIRTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Third Regular Session 
) 
SENATE 
RECEIVED BY: 
Introduced by Senator Panfilo M. Lacson 
EXPLANATORY NOTE 
Section 5 of Article IX. B of the Constitution provides: 
“The Congress shall provide for the standardization of compensation of 
government officials and employees, including those in government-owned or controlled 
corporations with original charters, taking into account the nature of the responsibilities 
pertaining to, and the qualifications required for, their positions. ” 
The current compensation and position classification system was legislated on the 
basis of the principle of “equal pay for equal work”. To achieve this end, Republic Act No. 
6758 provided for a position classification scheme consisting of classes of positions 
classified into four main categories: professional supervisory, professional non- 
supervisory, sub-professional supervisory, and sub-professional non-supervisory. The 
compensation classification system prescribes a salary schedule consisting of 33 salary 
grades under which the different positions are classified. 
This salary structure has, however, been characterized by internal distortions and 
external inequities caused largely by a system that allows for salary step increments 
based on longevity rather than performance. This scheme necessarily brings about 
overlaps in salary rates between salary grades which give rise to situations where 
employees of higher rank receive salaries lower than that of subordinates who have been 
in the service for a longer time. This practice 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. 
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 GIFs. Currently, there are also initiatives to 
lobby with the Congress to pass similar laws for other specific government officials and 
employees. 
These piece-meal legislation, 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; 
the grant of incentives; and 
current challenges. 
(b) 
(c) 
.Performance, which shall be the basis for merit increases, promotions, and 
(d) 
Ease in administration of the Omnibus System and responsiveness to 
c 
nator 


THIRTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
1 
Introduced by Senator Panfilo M. Lacson 
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. 
(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. 
(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 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: 
(a) 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. 
(b) 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. 
(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. 
(9 Department -the Department of Budget and Management, or such other successor- 
agency as the law or regulations may provide. 
(9) Government-owned or controlled corporations and financial institutions - refer to all 
corporations and financial institutions owned or controlled by the National Government, 
whether such corporations and financial institutions perform governmental or proprietary 
functions. 
(h) Incentive -a reward, financial or otherwise, that compensates an employee for high 
performance and/or continued performance. 
(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 which 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 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. 
(k) National Government - refers to the Executive, the Legislative, and the Judicial 
Branches, the Constitutional Commissions, and other offices created or mentioned in the 
Constitution, and shall include, but shall not be limited to, all departments, bureaus, 
offices, boards, commissions, courts, tribunals, councils, authorities, administrations, 
centers, institutes, state universities and colleges, and Government-owned and controlled 
corporations and financial institutions. 
(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 effectivity of this Act. 
(0) 
Step - a  level of Base Pay within a Job Grade. 
(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. 
(4) Uniformed Personnel - government 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, 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 
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 RA6638, as 
amended, and RA6648, 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. 
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 
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 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. 


(c) 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. 
(d) 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. 
A. The Job Classification Index 
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: 
(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, reorganizational, andlor 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. 
(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 officers of the 
government. 
SEC. 10. Job Grades of Officials Mentioned in the Constitution. - 
The Base 
Pay of the following officials shall be in accordance with the Job Grades indicated 
hereunder: 
Official 
Job Grade 
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 
Sen at o r 
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 Commission on Human Rights 
Members of the Commission on Human Rights 
Ombudsman 
Over-All Deputy Ombudsman 
22 
21 
21 
21 
21 
20 
20 
20 
20 
19 
20 
19 
20 
19 


Deputy Ombudsman 
Special Prosecutor 
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 hereof 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 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. 
(b) Nature of the work, which refers to the complexity thereof, or the mental 
challenge relative to the routinelnon routine-ness of a job; physical working 
conditions; and the volume of work, including inherent work stress, and the 
frequency thereof. 
(c) Answerability, which refers to the degree to which the job is directly answerable 
(i) to the people or property, 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 impact, or conversely, the impact of any 
error; and professional obligations, including any external special obligations or 
accountability to established professional standards. 
The Commission shall have authority to determine the appropriate methodology for 
the evaluation of Compensable Factors for every job in government. 
B. Career Tracks 
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: 
(a) 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. 
(b) Technical or “T Track” - This track covers non-administrativelnon-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. 
(c) Specialized or “S Track- This track covers non-administrativelnon-housekeeping jobs 
which are primarily highly technical andlor policy defining and determining. These jobs 
require intensive and thorough knowledge of a specialized field. 
(d) Executive or “€-Track - This track covers jobs primarily involved in the management 
of people, resources, and policy. 


C. Total Compensation Framework 
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 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, and without affecting the Base Pay. 
C.l 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: 
BASEPAYSCHEDULE 
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 
10,499 
Job Grade 4 
9,530 
10,244 
10.959 
11,674 
12,388 
Job Grade 5 
11,245 
12,088 
12,932 
13,775 
14,618 
CUT 2 
Job Grade 
Step 1 
Step 2 
Job Grade 6 
14,618 
15,715 
Job Grade 7 
16,957 
18,229 
Job Grade 8 
19,670 
21,146 
Job Grade 9 
22,818 
24,529 
Job Grade 10 
26,469 
28,454 
Job Grade I 1  
30,704 
33,006 
Job Grade 12 
35,616 
38,287 
Step 3 
Step 4 
16,811 
17,908 
19,501 
20,773 
22,621 
24,096 
26,240 
27,952 
30,439 
32,424 
35,309 
37,612 
40,959 
43,630 
Step 5 
19,004 
22,045 
25,572 
29,663 
34,409 
39,915 
46,301 
CUT 3 
Job Grade 
Step 1 
Step 2 
Step 3 
Ster, 4 
step 5 
Job Grade 13 
46,301 
49.774 
53,246 
56.719 
60,191 
Job Grade 14 
52,783 
561742 
601701 
64,659 
681618 
Job Grade 15 
60,173 
64,686 
69,199 
73,712 
78,225 
Job Grade 16 
68,597 
73,742 
78,887 
84,031 
89,176 
Job Grade 17 
78,201 
84,066 
89,931 
95,796 
101,661 
Job Grade 18 
89,149 
95,835 
102,521 
109,207 
1 15,893 


CUT 4 
Job Grade 
Base Pay 
Job Grade 19 
99,847 
Job Grade 20 
11 1,828 
Job Grade 21 
125,247 
Job Grade 22 
140,277 
SEC. 16. Administration of the Base Pay Schedule. - The Base Pay Schedule 
shall be jointly administered by the Commission and the Department using these 
guidelines: 
(a) Except for: (i) jobs in Cut 4, which job grades are not delineated by Steps; (ii) 
jobs of other elective officials; and (iii) those with fixed terms of office; the Base Pay 
shall be determined as follows: 
(1) Step 1 constitutes the Base Pay corresponding to the entry level for a job 
in a given Job Grade, while Step 5 is the maximum amount of 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 performance-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 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. 
(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 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. 
C.2 Allowances and Other Pay 
SEC. 18. Allowances and Other Pay -- Allowances and Other Pay shall be 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 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 to: 
(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 (PEW), 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. 
(c) Uniform or Clothing Allowance - amounts or items given to sustain the provision 
of the required uniform to employees, which shall be given at prescribed standard 
rates or items. 
(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 Act No. 6686, as 
amended by Republic Act No. 8441. 
(e) Overtime Pay - the consideration paid for work, whether in cash or 
compensatory time off, performed by an employee beyond his regular working 
hours in a day, and those performed on rest days, holidays, and non-working days, 
which shall be given at prescribed standard rates. 
(9 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. 
SEC. 20. Specific-Purpose Allowances -This type shall be limited to: 
(a) Subsistence Allowance -the allowance given to employees whose services 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 
abroad at such rates authorized under Republic Act No. 7157, as amended, and its 
implementing rules and regulations. 
C.3 Incentives 
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 productivity, subject to 
the accomplishment of agency performance targets and the generation of savings. 
(b) Longevity Incentive - that amount given on milestone years to recognize the 
employee’s length of service with at least satisfactory performance, or to recognize 


the agency's continuing andlor 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. 
(c) 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 
(a) Productivity and/or CNA Incentive - the Productivity Incentive is an amount 
given to employees or groups of employees as a reward for demonstrated 
productivity. The CNA Incentive is the amount generated from cost savings 
measures provided for in the pertinent CNA. 
(b) Health Maintenance Benefit - benefits given to maintain employee health, in 
addition to the benefits provided for under the National Health Insurance Program 
administered by the Philippine Health Insurance Corporation. 
(c) Staple Food Benefit - benefits given to employees to assist them in countering 
the rising cost of the basic constitutes of ordinary diet. 
The above shall be chargeable against the agency's savings. 
shall be limited to: 
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 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. 
(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 percentum (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. 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. 
(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 
A. Existing Allowances and Other Benefits of Incumbents 
SEC. 25. Treatment of existing allowances and other benefits of incumbents - 
The Department shall classify andlor re-classify 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, 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. 
B. Non-Diminution of Pay 
SEC. 26. Total Compensation - 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 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 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. 
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 adhoc, provisional, tentative, or improvised benefits, in 
acknowledgement of the inadequacy of compensation in government, and are thus 
intended to provide some form of economic assistance; and (iii) otherwise for which no 
appropriate approval has been granted. 
(b) The principle of non-diminution shall not apply with respect to any type of incentive 
being received by incumbents prior to the effectivity of this Act, the same being contingent 
on the agency’s or employee’s performance. 
C. Retirement and Other Benefits 
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. 
D. Regulations 
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 
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 Compensation, alleged diminution of pay or benefits, and assignment 
of Job Grades to jobs, and of incumbents to Steps. Cases that are instituted in other fora 
shall be dismissed for lack of jurisdiction, and exhaustion of remedies before the 
Commission shall be a condition sine qua non to judicial review on these matters. 
Decisions of the Commission on these matters shall be brought only to the Supreme 
Court via petition for certiorari pursuant to Section 7, Article IX of the Constitution, 
notwithstanding the provisions 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, 
and/or the Omnibus System; local government units; and Uniformed Personnel, but 
excluding the Armed Forces of the Philippines, shall be made exclusively by the 
Commission. 
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 
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. 
7306; Republic Act No. 7354; Republic Act No. 7400; Republic Act No. 7648; Republic Act 
No. 7653; Republic Act No. 7875, as amended; Republic Act No. 7907; Republic Act No. 
7917; Republic Act No. 8041; Executive Order No. 286, series of 1995; Republic Act No. 
8282; Republic Act No. 8289; Republic Act No. 8291; Republic Act No. 8293; Republic Act 
No. 8439; Republic Act No. 8494; Republic Act No. 8523; Republic Act No. 8748; 


Republic Act No. 8763; Republic Act No. 8799; Republic Act No. 9136; Republic Act No. 
9241; and Republic Act No. 9302, are hereby repealed. 
Presidential Decree No. 985;as 
amended, and Republic Act No. 6758, as amended, are 
hereby repealed. 
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 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 implementatioh 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 PROVISIONS 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. 
(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 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 (1 5) years: 


(a) Granting, approving the grant, voting in favor of any decision granting or 
approving, or who otherwise affirmatively participate in the grant or approval of - (i) 
Unauthorized increases in Base Pay; (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; 
(b) 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. 
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. 
TRANSITORY PROVISIONS 
SEC. 41. Separability Clause. - 
If, for any reason, any section or provision of this 
Act is declared unconstitutional or invalid, the other sections or provisions thereof which 
are not affected thereby shall continue to be in full force and effect. 
SEC. 42. Effectivity. - This Act shall take effect fifteen (15) days after the 
completion of its publication in the Official Gazette or in a newspaper of general 
circulation. The Commission and the Department shall, within ninety (90) days after its 
approval, 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. 
Approved,