Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
FIRST REGULAR SESSION

HOUSE BILL NO3416

Introduced by Honorable Oscar “Richard” S. Garin, Jr.
1* District, lloilo

“AN ACT AUTHORIZING LOCAL GOVERNMENT UNITS TO
IMPLEMENT A SALARY INCREASE OF NOT MORE THAN FIVE
PERCENT (5%) EVERY FIVE (5) YEARS, AND FOR OTHER
PURPOSES”

EXPLANATORY NOTE

Section 325, par. a of the Local Government Code limits the authority of local
government units to implement salary increase to their employees, thus’

“Section. 325. General Limitations. - The use of the provincial, city,
and municipal funds shall be subject to the following limitations:

(a.) The total appropriations, whether annual or
supplemental, for personal services of a_ local
government unit for one (1) fiscal year shall not exceed
forty-five percent (45%) in the case of first to third class
provinces, cities, and municipalities, and fifty-five percent
(55%) in the case of fourth class or lower, of the total
annual income from regular sources realized in the next
preceding fiscal year. The appropriations for salaries,
wages, representation and transportation allowances of
officials and employees of the public utilities and
economic enterprises owned, operated, and maintained
by the local government unit concerned shall not be
included in the annual budget or in the computation of
the maximum amount for personal services. The
appropriations for the personal services of such


economic enterprises shall be charged to their respective
budgets,”
(b.) xx

The legislative intent of the above-cited provision of law is apparently to put in
place a mechanism to insure that LGUs’ mandate to deliver basic services and
implement locally-funded projects are not hampered by undue increases in
personnel services. That sits well with the proponent.

However, a closer look at the present salary scales of all government employees,
national or local, shows that after the implementation of Joint Resolution No. 4,
adopted by both houses of Congress which was a consolidation of House Joint
Resolution No. 36 and Senate Joint Resolution No. 26 dated June 1, 2009 and
June 2, 2009, respectively, for standardized salaries of Philippine government
employees shows that a Private of the Armed Forces of the Philippines receives
a basic salary of P14,834.00 while a Local Government employee with salary
grade 1, step increment 1 receives only 6,215.00. Thus, this variance in
compensation should make a viable argument for this proposal.

Also, it should be emphasized that the proposed legislation, being permissive in
nature, does not preclude or prohibit other increases in compensation or

emoluments as may be authorized by future acts of Congress.

It is earnestly prayed that this measure be given due consideration



Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS,
FIRST REGULAR SESSION

HOUSE BILL NO.3416

Introduced by Honorable Oscar “Richard” S. Garin, Jr.
1 District, lloilo

“AN ACT AUTHORIZING LOCAL GOVERNMENT UNITS TO
IMPLEMENT A SALARY INCREASE OF NOT MORE THAN FIVE
PERCENT (5%) EVERY FIVE (5) YEARS, AND FOR OTHER
PURPOSES”

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

Section 1, All local government units including autonomous administrative
regions are hereby authorized to implement a salary increase of not more than
five percent (5%) every five (5) years for their officials and employees. The
following shall be covered by this Act:

All positions for salaried LGU personnel whether regular, co-terminus,
contractual or casual in nature, elective or appointive, full-time or part-time, now
existing or may be hereinafter created; and,

All positions for barangay personnel which are paid monthly honoraria

Section 2. Section 325 (a) of Republic Act No. 7160 otherwise known as the
Local Government Code of 1991 is hereby amended or modified accordingly.

Section 3. Implementing Rules and Regulations. - The DBM shall issue the

necessary rules and regulations to implement this Act

Section 4. Repealing Clause. - All laws, issuances or any party thereof
inconsistent with this Act are hereby repealed or modified accordingly.


Section 5. Effectivity. — This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in at least two (2) national
newspapers of general circulation.

Approved,