Worker productivity and salary increases

President Marcos has recently approved salary adjustments for government workers to be given in four tranches. However, under Executive Order No. 61 issued in June 2024, Marcos suspended the Performance-based Bonus Incentive System (PBIS) program under Administrative Order No. 25 of 2011 and EO 80 of 2012, which provides take-home pay incentives based on the performance ratings of their respective offices. Ordinary workers can bring home around P50,000 in bonuses annually if their offices get above satisfactory ratings.

The decision to suspend the PBIS was ill-advised. Admittedly, there were shortcomings in the implementation where some agencies, like public school teachers, were not given incentives for 2021 and 2022 due to noncompliance with the submission of reports to the Department of Budget and Management (DBM). Some offices fudge their performance reports to get bonuses.

The DBM should have exercised oversight of the lapses in the implementation of the PBIS. It is a good productivity program to improve public service but corrupted in its implementation.

With the President favoring government workers with salary increases, he could be fomenting unrest among minimum wage earners whose wages are below the subsistence level and have been knocking at the doors of Congress for succor. The holistic approach to wage increases, encompassing both the public and private sectors, uses productivity as the basis for giving increases.

For the government sector, the basis should be the office’s team performance and an increase in the revenues of companies for the private sector. We should encourage productivity both in government and the private sectors as basis for increasing wages.

MARVEL K. TAN, CPA,
captbeloytan@gmail.com