Understanding Local Budget Circular No. 160: Salary Increases for LGU Personnel

📢 The Department of Budget and Management (DBM) recently released Local Budget Circular No. 160, which brings significant updates to the salaries of local government personnel. This circular implements the first tranche of salary increases for Local Government Unit (LGU) employees, following Executive Order No. 64, series of 2024.

Let’s break it down into simple terms.

What’s the Purpose?

The goal of Circular No. 160 is to make local government salaries more competitive and sustainable. It ensures that LGU employees, including regular, contractual, and casual staff, receive fair compensation, which helps attract and retain competent civil servants. The updated salary schedule will be rolled out over four years, from 2024 to 2027.

Who Does It Cover?

The circular applies to all salaried personnel in LGUs. This includes both full-time and part-time employees, whether they are appointed, elected, or hired on a contractual basis. Even barangay officials and employees who receive monthly honoraria are included.

However, it’s important to note that certain groups are not covered:

• Consultants and experts hired for specific tasks
• Laborers working on piecework or job contracts
• Student workers and apprentices
• Those engaged through job orders or contracts of service

How Will Salaries Be Adjusted?

The salary adjustments will vary depending on the financial capacity and income classification of the LGU. For example, employees in wealthier cities or provinces may receive 100% of the new salary rates, while those in lower-income municipalities will receive a percentage of the full rate.

The new salary rates will be uniform across all positions, ensuring fair and equal treatment for all employees within an LGU.

Key Steps in the Implementation

1. Authorization: The local Sanggunian (council) must approve the implementation of the new salary schedule.
2. Compliance with Budget Limits: LGUs must ensure that salary increases follow budget limitations set under the Local Government Code.
3. Sustainability: LGUs need to assess their financial capability to sustain salary increases, including bonuses and mandatory contributions to agencies like GSIS, PhilHealth, and Pag-IBIG.

What About Public Health Workers?

Public Health Workers (PHWs) also benefit from this circular. The Sanggunian can choose to adopt the salary schedule for first-class cities and provinces, ensuring that PHWs receive competitive pay. If funds are limited, LGUs can implement a modified salary schedule for these workers.

When Will It Take Effect?

The new salary schedule is set to take effect no earlier than August 2, 2024. The actual date will depend on when the LGU’s budget ordinance is approved.

This circular is a big step toward improving the welfare of LGU employees, ensuring they are compensated fairly for their hard work. It’s a positive move for both the workforce and the communities they serve, as it strengthens local governance through better compensation systems.