Department of Budget and Management (DBM) Secretary Amenah “Mina” F. Pangandaman has called for amending the Philippine Local Government Code of 1991, otherwise known as Republic Act No. 7160, to allow retroactive salary increases for local government unit (LGU) workers.
“Kailangan natin baguhin ‘yung [Local Government Code], ‘yung batas diyan... Tulungan n'yo kami ilatag para hindi kayo ma-exempt, pwede kayo sa retroactive,” urged Secretary Pangandaman during the 11th leg of the Public Financial Management Competency Program (PFMCP) for LGUs in Butuan City.
It can be recalled that on 12 August 2024, the guidelines for the implementation of the Salary Standardization Law VI (SSL VI) for state workers were approved. The guidelines allow national government agencies and offices to begin its implementation, with the first tranche of salary adjustments taking effect retroactively from 01 January 2024.
Secretary Pangandaman highlighted that the current provisions of the Code, which govern the fiscal autonomy of LGUs, lack the necessary flexibility to permit retroactive adjustments in employee compensation, particularly in the areas of salary standardization and other wage-related benefits. Meanwhile, she added that the DBM has implemented a health allowance for executive employees, which she hopes LGUs will eventually adopt.
In the same event, the Budget Secretary noted, “May limitations, but we tried. In the meantime, kahit papaano may increase ng salary. Hopefully, baka pwede n'yo rin pong ma-embrace ‘yung ginawa po naming health allowance.”
The DBM has been conducting the PFMCP for LGUs since September 2023, to promote good governance, financial accountability, and effective resource management among local government institutions through capacity-building.
The program underscores the administration's commitment to strengthening the capabilities of LGUs, ensuring they can effectively manage resources and deliver public services.
On the other hand, the appeal of Sec. Pangandaman to improve the local government code aligns with the broader vision of President Ferdinand R. Marcos Jr’s administration of a unified and equitable “Bagong Pilipinas,” where local government employees are adequately supported in their roles within the community.
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