DBM - FREQUENTLY ASKED QUESTIONS

STEP INCREMENT

Who are entitled to step increment?

Pursuant to Joint CSC-DBM Circular Nos. 1 s. 1990 and 1-2003 dated April 21, 2003, step increments shall be granted to all deserving officials
and employees in the national and local governments, including those in the state universities and colleges, and government-owned/or controlled
corporations with original charter which are covered by or following R.A. No. 6758 as appointed in the :

A) Career service under permanent status

B) Non-career service whose positions are found in the regular plantilla of the agency concerned except those who are occupying positions that
are specifically exempted from or not following R.A. No. 6758.

A one step increment shall be granted to officials and employees for every three(3) years of continuous satisfactory service in the positions and
shall include those rendered by incumbents appointed to a career position on a temporary or provisional status who have been subsequently
appointed to the same career position on a permanent status.

Should agencies submit regularly to the DBM Regional Office Notices of Step Increment issued pursuant to Joint CSC-DBM Circular
No. 1, s.1990 for review and post audit?

The post audit of Notices of Step Increments issued pursuant to theprovision of the CSC-DBM Jint Circular No.1 should be submitted regularly to
ensure the accuracy of the computations thereon. However, changes made by the agency in the computer-generated PSIPOP, are likewise
subject to post audit by the DBM.
Appointment of teachers due to the implementation of their duly approved Equivalent Record Forms (ERFs) falls under the purview of
reclassification or upgrading of positions.
Movement due to ERF implementation falls under the purview of promotion, as there is an increase in basic pay received. While progression to a
higher level does not entail an increase in duties and responsibilities, there is an increase in the preparatory level, which in the case of teachers
is tantamount to an increase in duties and responsibilities. The reckoning date of grant of step increment shall be based on the date of
appointment to latest position of the incumbent. Thus, step increments previously earned by a teacher shall no longer be credited in his new
position. Likewise, teaching services not credited in the ERF evaluation can no longer be used in computing the step increments of the
incumbent in his reclassified position. This would be in congruence with the manner adopted in computing the step increments based on length
of service of the other government employees.

How does authorized vacation leave without pay affect the grant of step increment?

Authorized vacation leave without pay for an aggregate number of more than fifteen(15) days, inclusive of Saturdays and Sundays shall break
the continuity of service of an official/employee for purposes of the grant of step increment. (CSC MC No. 50 s. 1990)
On the implementation of National Budget Circular No. 461

COMPENSATION & POSITION CLASSIFICATION

What governs the movement/promotion in CHED Supervised Institutions CSIs)?

Movement/promotion in faculty rank of teaching positions (Instructors and professors) in CSIs are now covered by National Budget Circular No.
461. Section 2.0 thereof provides as follows:

“2.0 Coverage and exemption This circular shall apply to all faculty positions in SUCs, HEIs and TEIs including teaching positions assigned to
laboratory classes except teaching and related teaching positions in secondary and elementary schools which shall continue to be covered by
the Teachers Preparation Pay Schedule of the DECS.” -(Underscoring ours) On the other hand, ERFs of teaching and related teaching positions
under the TPPS assigned in the secondary education program of CSIs, approved by DECS prior to the trifurcation of the educational system in
CY 1997, may be adopted in determining the appropriate faculty rank of the teachers concerned.

What are the guidelines relative to the conversion/retitling of teaching/teaching related positions in newly converted state universities
and colleges?

The following are the guidelines relative the conversion/retitling of the teaching/teaching related positions in newly converted State Universities
and Colleges (SUCs):

To preclude position downgrading implications, the existing teaching/teaching related positions integrated with the staffing pattern of newly
converted SUCs shall be initially converted/retitled to their lateral equivalent SUC faculty positions based on salary grades without the need for
prior evaluation under NBC 461, e.g.: All positions of Teacher I, SG 10, Teacher II, SG 11 and Teacher III, SG 12 shall be automatically
converted/retitled to Instructor I, SG-12.
The initial faculty ranks shall serve as basis for future movements/promotions to higher-level positions. Should the ensuing evaluation under
NBC 461 result in the downgrading of their initial ranks, they shall retain their assigned rank and salary grade at conversion until they qualify for
a higher rank.The teaching positions handling laboratory classes in teacher education courses may be converted/retitled to faculty positions
provided they serve as critic teacher in such teacher education courses and each attends to at least three (3) practicum students at the senior
level.
The evaluated faculty rank of the incumbent College Administrator II under NBC 461 is Associate Professor I, SG-19. Can he be given a
Professor rank to preclude downgrading implications?

The automatic grant of a professor rank to the incumbent CA II could cause demoralization among the ranks of Professors who earned their rank
based on their academic and professional achievements, and after having undergone rigid screening from their peers before being conferred a
Professorial rank.
On the other hand, adoption of the evaluated faculty rank of the incumbent CA II will deprive him of future salary increases. Hence, to protect
both the meritocracy of NBC No. 461 and the incumbent CA II, the position shall remain classified as CA II, SG -26 but to be considered
coterminous with the incumbent, upon being vacated by the present incumbent, the position shall be abolished, or may be converted to other
positions vital to school operations.

Whether or not College Professor positions who were evaluated under NCC 69 still have to undergo the evaluation/accreditation under
NBC 461 or would the NCC 69 evaluation/accreditation already suffice.

Section 3.4 of NBC 461 provides that: “ The reclassification of existing College Professor positions shall be coterminous with the incumbents.”
Accordingly, the salary grade of the incumbents of College Professor positions who were accredited under NCC 69 shall remain at SG-29.In
view of the modified point allocation under NBC 461 of the position of College/University Professor, SG-30 (195-200) in contrast to that of NCC
69 (162-164 and other requirements), the incumbents of the former shall still undergo evaluation under NBC 461 to qualify said rank. This means
that the movement to the College/University Professor position is not automatic.

May national government agencies, state universities and colleges and local government Units grant Collective Negotiation
Agreement (CNA) Signing Bonus?

The Supreme Court in the case of Social Security System vs. Commission on Audit (G.R. No. 149240) dated July 12, 2002 has ruled against
signing bonus, considering the same as a form of additional compensation prohibited under the Constitution.
Since payment of the CNA signing bonus is no longer authorized, the Public Sector Labor Management Council (PSLMC) issued Resolution No.
4,s.2002 on November 14, 2002 providing for the grant of CNA Incentive for national government agencies, state universities and colleges and
local government units.
As a prerequisite to the grant thereof, the CNA must include provisions on cost cutting measures and systems improvement that will be
undertaken by both the management and the union to ensure that savings will be generated. Only savings generated after the implementation of
the CNA may be used for CNA. Incentive.

Are the government employees in the employ of national government agencies, local government units, and government owned and
controlled corporations, and government financial institutions authorized to receive COLA.

Budget Circular No. 2001-03 dated November 12, 2001 provides that payment of allowances and compensation, such as COLA, amelioration
allowance and inflation- connected allowances, among others, which are already integrated in the basic salary pursuant to to Section 12 of RA
6758, are deemed unauthorized, unless otherwise provided by law.

RECLASSIFICATION OF POSITIONS

What are required for the reclassification of positions of the DepEd?

Request for reclassification should be indorsed by the the Head of the agency. Generally reclassification of positions may be effected only when
there are permanent, material and substantial changes in the duties and responsibilities of the position sufficient to warrant placing it in a
different class. The reclassification may be upward, downward, or conversion.
Teaching positions may be reclassified based on Equivalent Record Form approved by the Department of Education, or by submission of
required data on the number of teachers in a school /school district for Master Teacher positions.
For administrative positions, enrollment, workload, number of persons supervised, other relevant data and justification for the purpose.

CREATION/ABOLITION/CONVERSION OF POSITIONS

When are positions created, abolished or converted?

New positions are created as a consequence of the establishment of new offices, reorganization of an office, or when an agency needs to create
positions in addition to the existing ones. The new positions are then classified for the first time.

Conversion takes place when new positions are created through abolition of existing positions. Conversion may be allowed in the following
cases:

1. When the positions to be abolished are deemed no longer necessary and there is a clear need for the proposed positions because of required
organizational/systemic changes;
2. When the positions to be abolished are deemed still needed, but their duties and responsibilities can be covered or absorbed by the proposed
positions;
3. When the positions are still needed, but there is a greater need for the proposed positions due to certain organizational and operational
changes.

It must be emphasized that conversion of position shall not adversely affect the organization and its operations.
 Issues Pertaining to Position Classification

Creation/Filling of positions

Q: As a general rule, a division should have at least three (3) sections and a section should have at least three (3) personnel. How come there
are departments in the city that are called divisions which fall short of the three (3) section requirement?

A.: It is possible that the division in question categorized as a mandatory office and as such, even if it does not have the three (3) sections
r3quired to form a division, the head of the division is considered a department head.

Q: Civil Service Commission (CSC) Memorandum Circular (MC) No. 19 series of 1992 sets the standards for the offices to be created in a local
government unit (LGU). Is there a standard minimum number of position to be created in an office?

A.: According to the CSC, it will not interfere with the LGU prerogative. The Sanggunian concerned should determine the priority needs for
positions. However, the LGU has to submit to the CSC for approval the qualification standards of positions to be created. For mandatory offices,
there are no prescribed number of divisions, sections per division and positions per section.

Q: The position of the Municipal Agricultural Office (MAO), Salary Grade (SG)-20 was devolved to the LGU. The MAO heads the agriculture
office/department in the municipality. Can the position be upgraded to SG-24 similar to other department heads although this is only an optional
position?

A.: Under existing rules, heads of departments in municipalities (outside Metro Manila) are allocated to SG-24 (Municipal Government
Department Head 1). This classification is true for all department heads, whether the office is optional or mandatory. The municipality, in
exercising its autonomy may upgrade the agriculture office into a department and create a Municipal Government Department Head 1 position,
SG-24, to which the MAO may be appointed. As an optional position, it is subject to the 45 percent and 55 percent budgetary cup. Once the
MAO position is vacated, it can be maintained or abolished.

Q: If the position created is not among those appearing in Joint Commission Circular No. 37 or No. 39 as amended by Local Budget Circular
(LBC) No. 61, will it require the approval of the Department of Budget and Management (DBM)?

A.: Yes. Positions created by LGUs which are not included in the Index of Occupational Services, Position Titles and Salary Grades (IOS)
require the approval by the Department of Budget and Management (DBM) pursuant to LBC 53.
Q: Are mandatory appointive officials in the barangay subject to CSC attestation?

A.: No, the appointments of the Barangay Treasurer and Secretary are not subject to CSC attestation.

Q: An LGU has created all the mandatory positions but has not yet standardized their responding salaries. Can the LGU be allowed to create
optional positions?

A.: The creation of mandatory positions and the implementation of the Salary Standardization Law (SSL) are priority obligations of the LGUs.

Q: Can a highly urbanized city create the positions of Records Officer IV, SG-22 and Administrative Officer IV, SG-22? If so, are they considered
division chiefs?

A.: Yes, the highly urbanized cities can create these positions, depending on their service requirements and availability of funds, but subject to
the Personal Services (PS) limitation. The highest position below Assistant Department Head in a highly urbanized city is SG-22. Pursuant to
Local Budget Circular No. 68, said positions are not equivalent to a chief of division.

Q: Can LGUs create as many positions as they need even if funds are not available?

A.: No, the Local Government Code provides that the LGUs can create positions according to their service requirements and subject to the
availability of funds. Furthermore, the creation of positions has to meet the following conditions: (1) the Salary Standardization Law has to be
implemented prior to the creation of positions; (2) all mandatory positions have been created; and (3) compliance with the 45 percent and 55
percent PS limitation.

Q: How can DBM assure that conditions set forth in the creation of positions will be complied with since Local Budget Officers (LBOs) and
Human Resource Management Officers (HRMOs) are sometimes subject to pressure by the Local Chief Executive (LCE)?

A.: DMB cannot assure that all its policies can be complied with. There are always considerations and pressures due to the facts that an LGU is
a political organization. However, the attitude and dedication of the Local Budget Officers (LBOs) and local officials can do much in minimizing
friction and lessening under due pressure.

Position Classification

Q: Which office will the LGU coordinate with regarding organizational structure and position classification?
A.: Pursuant to Section 76 of the Local Government Code of 1991, the LGU shall design and implement its own organizational structure and
staffing pattern taking into consideration its service requirements and financial capability. These shall be subject to the guidelines prescribed by
the CSC. With regards to position classification, the LGU shall coordinate with the DBM which is tasked to continue providing guidelines and
assistance to the LGUs on matters of compensation and position classification.

Q: What particular office in LGUs is authorized to determine position?

A.: The Human Resources Management Office (HRMO) is tasked to determine positions in the LGU, subject to the guidelines issued by the
DBM.

Q: What are the equivalent ranks of the Provincial Health Officer (PHO) I and II in the LGUs?

A.: A PHO II may be equated to a Provincial Government Department Head and a PHO I to that of an Assistant Provincial Government
Department Head.

Q: Pursuant to Bullet No. 10, the highest level of position below a department head and an assistant department head in a highly urbanize city is
SG-22. However, with the implementation of the Salary Standardization Law in July 1989, the highest position in the City Social Welfare and
Development Office became only SG-18, when it used to be a supervising officer position. Is this correct?

A.: Under RA 6758, All Social Welfare and Development Officers (SWDOs) has a standardized position classification. When these positions
were devolved, most LGUs maintained these positions. However, based on the Position Classification and Compensation System (PCCS) of the
local government, The LGU may create a position with a highest salary grade 22 for the SWDO to head a unit lower than a department.

Q: In a 5th class municipality, The Sanggunian Bayan created the position of a General Services Officer (GSO) with a salary grade of 18.
Originally, such position was included in the Qualification Standard. What should be its classification?

A.: When classifying or proposing the creation of positions like the GSO, the reference material to be used should be the index of Occupation
Services (IOS). The IOS is the list of authorized positions to be adopted in the LGUs. On the other hand, The Qualification Standard (QS)
contains the qualification requirement for the position. Under the IOS there is no General Services Officer (GSO), hence this should be classified
or allocated to an existing class based on its duties and responsibilities. The level of the position, especially when it is a head of unit, will depend
on the organizational level of the unit concerned. If the u which the GSO shall head is considered a department (5th class municipal), then the
position may be classified as a Municipal Government Department Head I, SG-24 or if lower than a department, the position should be allocated
to Administrative Office III, SG-18.

Q: When can the Sanggunian Bayan member become SB member I or II?

A.: Sanggunian Bayan (SB) member II is allowed for municipalities in Metro Manila only. SB member I is allowed for all other municipalities. The
level SB I and SB II therefore should not be seen as career paths for promotion.

Q: Can the LGU change the Qualification Standards of the position as provided in the Local Government Code, i.e. Provincial Social Welfare and
Development Officer to Provincial Social Welfare and Population Officer?

A.: No, setting of the Qualification Standards or QS is under the jurisdiction of the CSC. The LGU may submit its proposal to the CSC if it deems
appropriate to change the QS of the position.

Q: The Sanggunian Panlalawigan merged and renamed the Provincial and Social Welfare and Development Officer into the Provincial Social
Welfare Development, Nutrition and Population Officer. Is the approval such merger necessary since it is not listed under Joint Circular Nor. 37?

A.: Yes, in order to properly classify the positions in the new office. This office however, is an optional organization structure per CSC MC No.
19s. 1992.

Q: An employee originally issued a permanent appointment. He was promoted to a position with a higher salary grade but on temporary
appointment due to deficiency in qualification. Can his former position be reclassified to Utility Foreman to avoid reduction in salary?

A.: No, reclassification is allowed only when there is a substantial change in the duties and responsibilities of the position. Positions are not
classified based on then personal qualification of the employee/incumbent.

Q: The position of the Administrative Officer (General Service Office ) is coupled with multifarious functions such as personnel management,
supply and property management. General services, with all these complicated duties, also need special skills. Is there any possibility that an
Administrative Officer can get compensation for a division level considering the multifarious functions? What is the policy regarding the leveling
of the Administrative Officer (General Services Office) position LGUs?

A.: An LGU may have an Administrative Office (General Services Office) charged with supply, property, buying, records, general services
functions. In this case, the head of the organization maybe a department or assistant department head as determined by the LGU itself based on
MC No. 19 of the CSC, or if the unit is lower than a department the highest level of position that may be applied its head shall be limited to the
following salary grades pursuant to LBC No. 53 dated September 1, 1993:
Special Cities – SG-24
Provinces – SG-22
Highly Urbanized Cities – SG-22
Component Cities – SG-22

Metro Manila Component Municipalities

1st – 3rd Class Municipalities – SG-18

4th – 6th Class Municipalities – SG-15

Issues Pertaining to Compensation Administration

Salary

Q: If the principle applied pay scale is “equal pay for equal work”, why are the salary of national government employees higher than the LDUs?

A.: The criteria and standards applied in the classification and salary grade allocation of local positions are similar to those national government.
As an example, Clerk I in the national government and in the local government are both allocated to SG-3. In this sense, equity in pay is
achieved.

The uniqueness in the locals pay plan, however, emanates in the policy provided under RA 6758 that the pay in the local government unit shall
depend on the income classification of the respective LGUs.

This is so, because as self-reliant and self-sufficient entities, the capability LGUs pay their obligations and operating requirements, which
includes salaries and wages, is limited by their available funds and income. This i8s manifested by the classification of the LGUs which is
determined in accordance with the average annual income actually realized during the last four (4) calendar years immediately preceding the
general classification.

In order to give more meaningful autonomy to LGUs, this policy however was reassessed under Joint Resolution No. I of the Senate and the
House of Representatives. Thus, LGUs which are financially capable, may adopt higher salary rates than what is authorized for them based on
their income classification, subject to certain conditions prescribed under Local Budget Circular No. 56.

Therefore, local personnel, for instance, the first class cities and provinces may be authorized to adopt the same rates as that of the national
government, while those in the lower class LGUs like 6th class municipalities are authorized to apply only 65% of the national rates for
comparable positions.

Q: Can the department head whose appointment was not concurred by Sanggunian Bayan and subsequently disapproved by CSC collect a
monthly salary?

A.: No. As a general rule, the basis for the payment of salary is the approved/attested appointment.

Q: If the vacant position exist in the council, should the council replace the existing vacancy and will the salary start from step one of the higher
rate?

A.: The Department of Interior and Local Government (DILG) can best clarify the issue on how a vacated councilor position can be replaced.
However , if the replacement was made legally and allowed by a proper authority, then the salary of the new appointee shall be the hiring rate of
grade 24 for the municipality and grade 25 for the city. Likewise, under existing rules, incumbent councilors should receive the hiring rate of the
salary grade allocation of their position.

Q: Can the Sanggunian pass a resolution granting a salary increase other than the authorized interim salary schedule if the LGU has not
exceeded The PS limitation and the creation of the mandatory positions has been satisfied?

A.: A salary increase may be granted but should not exceed the authorized rate under LBC No. 60. LGU can implement a higher interim salary
schedule provided this should not exceed the schedule being implemented by the province where the LGUs belong. The difference/increment
cost is subject to the forty-five percent /fifty-five percent (45%/55%) personal services cap.

Q: In order to equalize the salaries of organic personnel, can the LGUs implement a salary increase for officials and employees and excluding
the devolved personnel?

A.: No. The granting of salary increases should be uniform. Whatever the percentage increase implemented by an LGU,it must also be applied
to both its organic and devolved personnel.

Q.: What can the government do to have a salaries of organic local personnel level with that of public health workers?
A.: The LGU can adopt a higher salary schedule for its organic personnel subject to the availability of funds and the conditions set forth in the
adoption of a higher salary schedule. The difference there from is subject to the PS limitation. While in the many cases, this has not fully
equalized the salaries of the organic personnel with public health workers, it has somehow reduced the pay gap between them.

Q: Can across-the-board steps increments be granted even when the same has been previously disallowed?

A.: No, the grant of steps increments is based only on the length of service in a given position. An employee may only be entitled to one (1) step
increment when he/she has been occupying the same position for three years. The grant of across-the-board step adjustment is in violation of
R.A. No. 6758 and without legal basis.

Q: In relation of the implementation of the Local Budget Circular No. 56, is there a law that prohibits the granting of salary increases to devolved
health personnel considering that their adjusted salaries may exceed that of the local chief executive?

A.: Under RA 7305, the rates of pay of public health workers devolved to the LGUs shall be similar to the rates of pay of the public health
workers in the national government. For lower class LGUs, the Rural Health Physician at SG-24 may consequently receive a higher salary than
the elective officials in the same locality. Admittedly, this is opposed to the basic compensation policy that no subordinate shall receive salary
equal to or higher than his/her immediate supervisor. However, this situation is brought about by a mandate of a law (R.A. 7305) and should be
considered exemption to the rule.

Q: Are there any legal sanctions for an LGU which has not granted salary step increments?

A.: There are no existing sanctions if the LGU cannot grant such benefit. The payment of all the benefits including steps increments which are
base on the specific requirements like the length of service in a given position is always subject to the availability of funds.

Q: Are public health workers entitled to P30/day subsistence allowance even if they do not render services on Saturdays and Sundays? Are they
entitled to the monthly flat rate of P900?

A.: Yes, because the allowance granted is base on the premise that their services are available anytime of the day and /or week. Pursuant to
DBM Circular Letter No. 2001-10 dated June 13, 2001, PHWs in LGUs may be entitled to the increased rates of benefits including those for
subsistence allowance as provided under the IRR OF RA 7305, chargeable against local funds.

Q: Can per diems be changed or draw against appropriations for salaries?

A.: No. Disbursement can only be allowed when there is an appropriation for the purpose or when there is actual savings from the same class of
expenditures in the same office. Personal Services (PS) savings cannot be used directly to pay per diem of officials and employees, which is an
expenditure item under Maintenance and Other Operating Expenses.(MOOE).

Q: Does the latest issuance on the granting of the Personnel Economic Relief Allowance (PERA) per Budget Circular No. 4-B allow LGUs to pay
P500 to local officials and employees?

A.: No. Budget Circular No. 4-B only provides for the expanded coverage of granting of Personnel Economic Relief Allowance (PERA) to include
employees occupying itemized plantilla position with SG-24 who are not receiving Representation and Transportation Allowance (RATA).

However, effective FY 1997, the granting of the said allowance has been liberalized to include all appointive officials and employees regardless
of the rank or SG allocation of their positions and status of employment. Moreover, based on their income classification, LGUs are allowed to do
so, provided the total allowance will not exceed P500 per month for each personnel.

Q: How much does the DBM release to the LGUs for laundry allowance of devolved health personnel? LGU health workers have been receiving
P50 since 1994 while their national counterparts receive P100?

A.: The amount appropriate in the General Appropriations Acts (GAA) for Magna Carta benefits of Public Health Workers (PHWs) is a lump-sum
fund. In 1996, around 25% of the requirements of the Magna Carta benefits was approved for in the GAA. This means that the LGU will shoulder
the remaining 75%. For 1996 the laundry allowance amount to P100 per month, subject to the availability of funds. For 1997, the said benefits
shall be charged fully from the lo9cal funds.

Q: In private and government banks, tellers collect a shortage allowance in the amount of P500/month. Can the same benefit be enjoyed by local
disbursing officer?

A.: In the absence of any legal basis for the grant of the benefit, the same can not be granted for local government personnel. As of now, there is
no authority for the grant of shortage allowance.