FOURTEENTH CONGRESS OF THE REPUBUC 
) 
OF THE PHILIPPINES 
1 
'9 
JLIL -2 
First Regular Session 
1 
IF 
S E N A T E  
llECF IVEC C
Y
 " 
-- ..-_l" 
Senate Bill No. 3 15 
INTRODUCED BY SEN. JINGGOY WERCITO ESTRAQA 
EXPLANATORY NOTE 
Section 3, Art. IX-B of the 1987 Constitution states: 
"The Civil Service Commission, as the central 
personnel agency of the Government, shall establish a career 
service and adopt measures to promote morale, efficiency, 
integrity, responsiveness, progressiveness, and courtesy in the 
civil sawice. 
It shall shn@hnn the merit md rewards 
systems, integrate all human resources development program 
for all levels and ranks, and h~bfnn&ize a managemen? 
climate conducive to public accountability." xxx 
This bill seeks to strengthen the enforcement of this constitutional 
mandate by estabfishing a mechanism for reward and incentive pay for all 
officials and employees in the government. Through this hilt< kw satarks & 
government employees would be augmented by means of a reward and 
incentive pay scheme. Undw the proposed inc\Rnm pay scheme, 8 posticm of 
the revenue collection in excess of the target for the year by a revenue- 
generating government agency will be allocated or reserved fac distributkmto ail. 
government employees employed in revenue and non-revenue generating 
government instrumentalities. tn all cases, the reward and d & e  pay wiik & 
b#s& 
w t  li-v+ fie&Jmnm and productwiQ standard set by the Civil Service 
Commission, Commission on Audit, and the Department of Finance, in 
coordination with the departments, instrumentalities, agencies, boards or 
commissions concerned. 
The approval of this bik is earnestly requested. 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
1 
First Regular Session 
) 
-t' 
Jut -2 
i 
! 
OF THE PHILIPPINES 
/ 
INTRODUCED BY SEN. JINGGOY WERCiTO ESTRADA 
AN ACT 
INSTlTUTlNG AN INCENTIVE PAY SYSTEM, BASED ON PRODUCTIVITY 
AND PERFORMANCE, FOR ALL OFFICIALS AND EMPLOYEES OF THE 
GOVERNMENT,ANDFOROTHERPURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Title. The Act shall known and referred to as "Kauntaran ng 
Bayan Act". 
SEC 2. Declaration of Policy. It is declared policy of the State to promote 
the morale, efficiency, integrity, responsiveness, progressiveness, and courtesy 
in the Civil Service. Towards this end, the State shall institute an incentive 
mechanism based on productivity and performance. 
SEC 3. tncentive Fay Based OR FrOductMy and Perfomtance. The 
provision of any law to the contrary notwithstanding, an incentive pay system, 
based on produclivity and performance, shall be instituted in the government 
service. The incentwe pay system under this Act shaN be disbursed annually 
bmsd om the accepted standards of productivity and performance as prescribed 
by the Civil Service Commission, Commission on Audit, Department of Finance, 
and the departments, instrumentalities, agencies, boards, and commissions 
concerned. 
The special fund for this pay scheme shall be derived from forty per 
centum (40%) of any sum beyond the amount or level of revenue target during 
the year by the government office which shall be prescribed by a committee 
composed of Secretary of Finance, the Secretary of Budget and Management, 
and the Director-General of the National Economic Development Authority: 
Provided, that Fifty per centum (50%) of the Special Fund shall be disbursed to 
the officials and employees of the government office which generated the said 
amount in a manner to be determined by the departments, instrumentalities, 
agencies, boards and commissions concerned, in accordance with the rules and 
regulations of the Civil Service Commission, the Commission on Audit, and the 
Department of Finance, takifig into account the productivity and performance, as 
well as the salary level, of the said oficials and employees, and the balance shall 
be entrusted to the Department of Budget and Management for eventual 
distribution to departments, instrumentalities, agencies, boards and commissions 
which are non-revenue generating in the same manner and considering the 
same factors: Provided, that the incentive pay shall be distributed in cash, within 
thirty (30) days after December 31 of each year"; Provided, further, That this 


incentive pay scheme shalt not apply to the President, Vice President, members 
of the Cabinet rank, and members of the Congress. 
SEC 4. No Diminution of Benefits. The application of the reward and 
incentive pay under this Act shall be in addition to all benefits already enjoyed by 
officials and employees under other Laws. The pay contemplated herein shall 
not result in any diminution of the benefits of employee and officials upon 
effectivity of this Act. 
SEC 5. Rules and Regulafions. The Department of Finance, the 
Department of Budget and Management, the Civil Service Commission and the 
Commission on Audit shall promulgate rules and regulations necessary to carry 
out the purpose of this Act. 
SEC 6. 
Repealing Clause. The provision of any law executive or 
administrative order, rules and regulations or parts thereof, inconsistent with this 
Act are hereby repealed or modified accordingly. 
SEC 7. Effecfivify Clause. This Act shall take effect fifteen (1 5) days after 
its publication in the Official Gazette or in at least two (2) newspapers of national 
circulation. 
Approved,