Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH (18%) CONGRESS
First Regular Session

nouse Bi No_23

Introduced by REP. JOSE CHRISTOPHER Y. BELMONTE

EXPLANATORY NOTE

House Bill No. 6910 entitled “An Act Empowering Local Government Units to
Grant Additional Fiscal Incentives to Personnel” was originally filed by this
Representation towards the end of the Second Regular Session of the 17" Congress.
The measure was then referred to the Committee on Local Government for proper
deliberation.

This bill was filed in line with Section 3, Article X (Local Government) of the
1987 Constitution, provides that the Congress shall enact a local government code
which shall allocate among the different local government units their powers,
responsibilities, and resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and functions and duties of local
officials, and all other matters relating to the organization and operation of the local
units.

Personnel are key assets in functional and effective local government units.
They are the conduit through which government programs and policies are
implemented. They are the corporal agents through which the mandate of the State
and its instruments are translated into concrete and tangible service to the public.

These observations cannot be any truer than in the context of our local
government units. Our public servants are always on the frontline of providing public
service to our constituents and at the same time, ensuring that fiscal goals of their
respective units are met. They are vital partners of the state in realizing local and
national development objectives and aspirations.

However, most local government personnel are not well compensated. They
receive salaries that often are not at par with their level of expertise. Many are
tempted to leave local government service in exchange for attractive compensation
packages offered by the private sector locally and abroad. Even fresh graduates or


those looking for jobs hardly consider taking a career in serving at the local
government level primarily because of the meager compensation. The brain drain
phenomenon is very much apparent in the local government setting

To address this, there is a need to offer equitable compensation to local
government personnel in accordance with the value of their competencies and hard
work. Local governments that have the financial capability to offer bigger
compensation packages are clasped from doing so because of legal and procedural
obstacles in providing additional benefits to their employees.

Through this bill, this Representation seeks to empower local governments to
provide additional benefits and incentives to employees within known parameters and
qualifications especially on the financial capacity of the local government unit to
adopt a personnel incentive plan. If we are to keep good men and women in our local
capitols, we must think of them and that of their families’ welfare.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH (18) CONGRESS
First Regular Session

HOUSE BILL NO. 13

Introduced by REP. JOSE CHRISTOPHER Y. BELMONTE

AN ACT EMPOWERING LOCAL GOVERNMENT UNITS
TO GRANT ADDITIONAL FISCAL INCENTIVES TO PERSONNEL

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. ~ This Act shall be known as the “Local Government
Personnel Fiscal Incentives Act.”

SEC. 2. Declaration of Policy. ~ It is the policy of the State to pay just and equitable
compensation to local government personnel in accordance with the principle of equal pay
for work of equal value and one that is generally comparable with those in the private sector
doing comparable work in order to attract, retain and motivate a corps of competent civil
servants.

SEC. 3. Fiscal Incentives for Local Government Personnel. — In addition to the basic
salary, bonuses and other compensation granted by law, rules and regulations, all local
government units may provide fiscal incentives to its personnel not exceeding fifteen percent
(15%) of its median annual revenue for the last three (3) years, which may include the
following:

a) performance bonus;

b) rice and food allowance;

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clothing allowance;
d) health maintenance organization (HMO) coverage;

e) housing benefits; and


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f) other similar benefits and facilities.

SEC. 4. Conditions for Granting Fiscal Incentives. ~ Fiscal incentives for local
government employees under this Act shall be proposed by the local chief executive subject
to the concurrence of the local Sanggunian in an ordinance passed for the purpose, Provided
the following conditions are met:

a) annual fiscal incentives for employees shall be subject to the limitations provided

under Title V, Book II and other pertinent provisions of Republic Act No. 7160,
otherwise known as the “Local Government Code of 1991;
b)

appropriations for annual fiscal incentives shall be sourced from any savings the
local government unit may have at the end of the fiscal year;

°)

in no case shall the total appropriations for fiscal incentives exceed the savings of
the local government unit in the immediately preceding fiscal year;
d

as certified by its Treasurer, the local government unit must have a budget surplus
from the immediately preceding fiscal year available for disbursement in cash,
and not earmarked for any other purpose;

¢)

as certified by the Department of Interior and Local Government, the local
government unit has satisfactorily implemented its performance targets, policies
and programs; and

f) the implementation of a fiscal incentive plan shall not downgrade the local

government unit into a lower income class local government unit.

SEC. 5. Fiscal Incentives Plan — Local chief executives shall submit the local
government unit’s fiscal incentives plan for its personnel and the ordinance approving the
same to the Department of Budget and Management specifying that the requirements
provided in Section 4 herein have been duly complied with,

SEC. 6. Appropriations. - The amount necessary to implement an approved fiscal
incentives plan for employees shall be sourced from the general fund of the local government
unit and shall form part of its annual budget.

SEC. 7. Implementing Rules and Regulations. — The Department of Budget and
Management shall issue the implementing rules and regulations not later than ninety (90)
days from the approval of this Act.

SEC. 8. Separability Clause. — If any provision or part of this Act, or any part thereof,
be declared unconstitutional or invalid, the same shall not affect the validity and effectivity of
the other portions.


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SEC. 10. Repealing Clause. ~All laws, executive orders, presidential decrees,
Proclamations, rules and regulations, issuances and enactments or parts thereof inconsistent
with the provisions of this Act are hereby amended or repealed accordingly.

SEC. 11. Hffectivity. ~This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in a newspaper of general circulation.

Approved,