Thursday, November 02, 2006

Salary Standardization Law Part 3

It is not being reported in the media but the entire civil service bureaucracy is abuzz with talk about an imminent across-the-board wage increase and the total overhauling of the government salary grade system under a new Salary Standardization Law III (SSL 3). In public offices, government corridors and hallways, pantries and cafeterias, ordinary rank-and-file staff are quietly discussing and debating the merits/demerits of the proposed bill in Congress. At first, SSL 3 started as a rumor or as some sort of "urban myth" among civil servants - someone knows someone who has heard about it but no one has actually seen the bill.

But the SSL 3 "myth" is no more: it is actually turning into a reality. There is now a bill pending in the House of Representatives which seeks to amend the old Salary Standardization Law (RA 6758) entitled "Government Classification and Compensation Act." Also, Secretary Andaya of the Department of Budget and Management confirmed recently that they are pushing to increase government salaries starting next year.

I predict that the proposed SSL 3 will be very controversial and will elicit much condemnation especially from employees of GFIs and GOCCs. Just a cursory glance tells me that some of the proposed bill's provisions will be dynamite. For example, Section 35 repeals ALL special salary laws and regulations." This means that employees of GFIs (Government Financial Institutions) and GOCCs (Government-Owned and Controlled Corporations) like GSIS, Bangko Sentral, Land Bank, etc. will no longer enjoy SSL exemption and will receive the same salary levels as the rest in government. The bill also overhauls the entire Salary Grade structure, reducing it from 33 salary grades (with SG 1 as lowest and SG 33 highest) to only 22 job grades. Under the current system, if you are an SG 18 employee and get promoted to SG 19 you only get less than a P1,000 increase. Under SSL 3, pay differentials between ranks are much bigger. A Job Grade 13 holder, for example, receives P46,301 while a Job Grade 14 P52,783 or a difference of around P6,000. Pay differential between ranks becomes bigger as the ranks get higher.

But perhaps the greatest revision is in the "spirit" of the law. The proposed SSL 3 removes the "bias" of old SSL law (click here for a copy) for the low-ranking employee. Section 3 (a) of the present SSL states that: "All government personnel shall be paid just and equitable wages; and while pay distinctions muct necessarily exist in keeping with work distinctions, the ratio of compensation for those occupying higher ranks to those at lower ranks should be maintained at equitable levels, giving due consideration to higher percentage of increases to lower level positions and lower percentage increases to higher level positions (italics mine). This provision is no longer present in the proposed bill. In its place is a sentence which lays down the new Governing Principles to be observed - under Section 3 (c) states "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."

While SSL 3 proposes to increase the salaries of ALL government employees, it reserves the biggest pay raise to higher-ranking officials - the higher the rank, the bigger the salary hike. The President of the Philippines, which under SSL receives an unbelievable P25,000 a month, will now have a base pay of P140,277 a month. An Undersecretary, classified as a Salary Grade 30 position receiving P18,975 a month, will now be classified as a Job Grade 18 and will be receiving a monthly salary of P89,149 at SSL 3's first year of implementation (which will reach up to P115,893 5 years later). Mid-ranking or supervisory-level government officials will also be receiving between P40,000 to P80,000 a month according to the bill's proposed Base Pay Schedule.

SSL 3 seeks to upgrade the salaries of our government employees to bring it up to par with inflation and private sector rates. For my part, I welcome its passage because it has been more than 10 years since our civil servants received an increase. I believe that SSL 3 will not only promote efficiency but also reduce corruption in government. Sometimes, you cannot blame public servants for being corrupt and inefficient because their salaries are so unbelievably low and our civil service system promotes mediocrity and does not reward excellence with appropriate remuneration. We definitely need SSL 3 if we want to keep and attract outstanding Filipinos in government.


Anonymous said...

Any update regarding Salary Standardization Law Part 3? Thanks and more power!

Anonymous said...

The 2009 proposed budget which include the first down payment of the SSL3 is now in congress. Do you have some details of this new version of the SSL3 proposal? Thanks.

Oliver M. Mendoza said...

For SSL3 updates, kindly refer to my September 4, 2008 entry.