DBM Salary Increase 2024-2027: 4-Year Adjustment Hike for Philippine Workers

Starting January 2024, the Department of Budget and Management (DBM) began implementing a four-year salary adjustment increase for government civilian workers. DBM manages the national budget and ensures government resources are used wisely. This wage hike was announced to help with the rising cost of living so that income for public workers are on par with current standards.

This change, authorized by Executive Order No. 64, s. 2024, focuses on increasing public sector compensation.

The second stage of this adjustment became effective on January 1, 2025, as outlined in National Budget Circular No. 597.

It’s designed to ease financial burdens, allowing you to better support your family and plan for the future.

Also Read: DBM SARO: Special Allotment Release Order

DBM Salary Hike
Credits: PNA

Understanding the Salary Adjustment

The salary increase is being introduced gradually over four years, with adjustments made annually.

The first phase took effect on January 1, 2024, while the second phase began on January 1, 2025.

This step-by-step approach helps make the compensation increase sustainable for both employees and the government.

The updated salary schedule has been detailed in National Budget Circular No. 594.

Who Is Covered?

This adjustment applies to all civilian government employees across various branches and institutions.

Employees in the Executive, Legislative, and Judicial branches, Constitutional Commissions, State Universities and Colleges, and certain Government-Owned and Controlled Corporations (GOCCs) are included.

No matter your employment status—whether regular, casual, contractual, appointive, elective, full-time, or part-time—you are entitled to this adjustment.

For GOCCs under the scope of the circular, funding will come from their corporate operating budgets, as approved by the DBM.

Where Does the Funding Come From?

The funds allocated for the salary increase are drawn from the Miscellaneous Personnel Benefits Fund and available appropriations under the Fiscal Year 2025 General Appropriations Act.

This allocation supports the adjustment while maintaining resources for other government services.

The DBM will issue Special Allotment Release Orders and Notices of Cash Allocation to manage the required annual budget.

These steps aim to make the process seamless and transparent.

Implementation Guidelines

To streamline the process, the DBM issued National Budget Circular No. 597.

This circular lays out clear steps and instructions for processing the salary adjustments across all agencies.

The adjustment reflects the administration’s commitment to fair and competitive compensation for government employees.

It aligns public sector salaries closer to private sector standards, aiming to inspire productivity and improve service delivery.

Provisions of National Budget Circular No. 597

National Budget Circular (NBC) No. 597 outlines comprehensive guidelines for implementing the second tranche of the updated Salary Schedule for Civilian Personnel under Executive Order (EO) No. 64, s. 2024. Here are the key provisions:

Scope of Coverage

The circular applies to all civilian personnel across the following sectors:

  • Executive, Legislative, and Judicial branches.
  • Constitutional Commissions and Offices.
  • State Universities and Colleges (SUCs).
  • Government-Owned and Controlled Corporations (GOCCs) not covered by Republic Act No. 10149 or EO No. 150, s. 2021.

Eligible personnel include:

  • Regular, casual, and contractual employees.
  • Full-time and part-time workers.
  • Elective or appointive officials.

Exemptions include:

  • Military and uniformed personnel.
  • Job order workers, consultants, and laborers paid on a piecework basis.
  • Entities with their own Compensation and Position Classification Systems (CPCS).

Salary Adjustment Rules

  1. General Adjustment:
    Salaries for employees are adjusted according to Annex A of the circular. Employees start at Step 1 of the applicable salary grade unless their current salary exceeds Step 8.
  2. Daily Wage Computation:
    Casual workers’ daily wages are calculated by dividing monthly rates by 22 workdays.
  3. Special Cases:
    Employees whose salaries exceed Step 8 of their grade or are between steps due to prior adjustments will have their salaries aligned to the next applicable step.
  4. Compulsory Retirees:
    Retirees whose services are extended beyond December 31, 2024, will receive adjustments in line with the outlined rules.

Provisions of National Budget Circular No. 597

National Budget Circular (NBC) No. 597 outlines comprehensive guidelines for implementing the second tranche of the updated Salary Schedule for Civilian Personnel under Executive Order (EO) No. 64, s. 2024. Here are the key provisions:

Scope of Coverage

The circular applies to all civilian personnel across the following sectors:

  • Executive, Legislative, and Judicial branches.
  • Constitutional Commissions and Offices.
  • State Universities and Colleges (SUCs).
  • Government-Owned and Controlled Corporations (GOCCs) not covered by Republic Act No. 10149 or EO No. 150, s. 2021.

Eligible personnel include:

  • Regular, casual, and contractual employees.
  • Full-time and part-time workers.
  • Elective or appointive officials.

Exemptions include:

  • Military and uniformed personnel.
  • Job order workers, consultants, and laborers paid on a piecework basis.
  • Entities with their own Compensation and Position Classification Systems (CPCS).

Salary Adjustment Rules

  1. General Adjustment:
    Salaries for employees are adjusted according to Annex A of the circular. Employees start at Step 1 of the applicable salary grade unless their current salary exceeds Step 8.
  2. Daily Wage Computation:
    Casual workers’ daily wages are calculated by dividing monthly rates by 22 workdays.
  3. Special Cases:
    Employees whose salaries exceed Step 8 of their grade or are between steps due to prior adjustments will have their salaries aligned to the next applicable step.
  4. Compulsory Retirees:
    Retirees whose services are extended beyond December 31, 2024, will receive adjustments in line with the outlined rules.
NBC-No.-597_page-0001
Credits: DBM

How Will This Benefit You?

This salary increase isn’t just about higher pay.

It’s about recognizing your dedication and supporting your aspirations.

With the additional income, you can better manage expenses, save for future goals, and improve your quality of life.

The adjustment also aims to attract and retain skilled professionals, leading to better public services.

It’s a step forward for you and the communities you serve.

How to Check and Claim Your Salary Adjustment

If you’re eligible for the salary adjustment, here’s how you can ensure you receive it smoothly:

1. Verify Your Eligibility

  • Confirm your employment status with your HR department (e.g., regular, contractual, part-time).
  • Check if your position falls under the covered branches and institutions as specified in the National Budget Circular No. 597.

2. Review the Updated Salary Schedule

  • Obtain a copy of the updated Salary Schedule for Civilian Personnel from your HR office or the DBM website.
  • Compare your current salary to the new rates to understand the adjustments you’re entitled to.

3. Coordinate with Your HR Office

  • Ask your HR department for specific timelines and steps on how the adjustment will be reflected in your paycheck.
  • Ensure all necessary documentation, such as your appointment papers, is up-to-date and compliant.

4. Track Your Pay Slip

  • Regularly check your pay slip to confirm the adjustment is applied starting January 2025 (for the second tranche).
  • Report any discrepancies to your HR department immediately for resolution.

Stay Informed and Empowered

Keeping yourself informed about the process is important.

Regularly check official communications from your agency and the DBM for updates.

If you have questions or concerns, reach out to your human resources office or contact the DBM directly.

Being informed allows you to fully appreciate how this adjustment impacts your role and benefits your career.

Frequently Asked Questions (FAQs)

  1. When will I receive the updated salary for the second tranche?
    The updated salary under the second tranche will reflect in your paycheck starting January 2025. Specific disbursement dates depend on your agency’s payroll schedule.
  2. Are retirees or pensioners included in this salary adjustment?
    No, the salary adjustment applies only to active civilian government personnel. Retirees or pensioners under the Government Service Insurance System (GSIS) are not covered by this increase.
  3. Will contractual or job order employees benefit from this adjustment?
    Only contractual employees appointed under government contracts are included in the adjustment. Job order or consultancy workers are not covered under this circular.
  4. Is there a cap on the salary increase depending on my position?
    The adjustment varies based on the updated Salary Schedule for Civilian Personnel, which outlines different rates for various salary grades and positions. Check with your HR department for specific details on your eligibility.
  5. Can local government unit (LGU) employees expect the same adjustment?
    Guidelines for LGU employees will be released under a separate circular. Their salary adjustments may depend on the financial capacity of their respective LGUs.

Recent Updates

Guidelines for 2nd Tranche of Government Pay Hike

The Department of Budget and Management (DBM) has issued guidelines for the second tranche of the updated salary schedule for government workers in 2025.

National Budget Circular 597, signed by DBM Secretary Amenah Pangandaman on Jan. 20, outlines the new salary rates effective Jan. 1, 2025.

The circular covers all government personnel in various branches and agencies, excluding military and uniformed personnel.

Funding for the salary adjustment will be sourced from the Miscellaneous Personnel Benefits Fund and other available appropriations.

President Ferdinand R. Marcos Jr. issued Executive Order 64 to implement these salary adjustments, aiming to attract and retain competent civil servants. (PNA)

Medical Coverage Subsidy for Government Employees

The Department of Budget and Management (DBM) has approved guidelines for a subsidy to help government employees obtain health insurance coverage.

Circular No. 2024-6, issued on Dec. 6, grants yearly medical allowances of up to P7,000 to civilian government personnel.

Authorized by Executive Order No. 64, this allowance will start in 2025.

Budget Secretary Amenah F. Pangandaman stated that the subsidy will assist with health-related expenses through HMO-type benefits.

The subsidy applies to all civilian government personnel in National Government agencies, state universities, and government-owned corporations not covered by Republic Act No. 10149 and Executive Order No. 150. (Business World)

Conclusion

The government’s dedication to increasing the pay of civilian workers reflects its appreciation for your contributions.

This adjustment is more than financial—it’s about creating opportunities and supporting your journey.

Understanding these changes helps you make the most of the benefits they bring.

Together, this step aims to create a motivated workforce and improve public service delivery.

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