Salary increases in the Philippines: Who is covered, who is not
Civilian govt employees to get third tranche of pay raises, with effect from Jan. 1, 2026
Manila: Civilian government employees are starting the year with higher pay, as salary increases under the government’s updated compensation program have officially taken effect, retroactive to January 1, 2026.
The Department of Budget and Management (DBM) announced that it has begun implementing the third tranche of the revised salary schedule for civilian government personnel, following the issuance of National Budget Circular No. 601 (NBC No. 601) dated January 22.
Circular No. 601 signed
The circular was signed by Acting Budget Secretary Rolando Toledo.
The pay hike is part of Executive Order No. 64, series of 2024, which ordered salary adjustments to be released in four tranches spread over four years, from 2024 through 2027.
The 2026 increase marks the third phase of that rollout.
Who is covered — and who is not
The salary adjustment applies broadly to all civilian government personnel, regardless of employment status.
This includes the following:
Regular
Casual and contractual employees;
Appointive and elective officials;
Full-time or part-time workers across the executive, legislative, and judicial branches.
Constitutional commissions and offices
State universities and colleges, and
Government-owned or -controlled corporations (GOCCs) that are not covered by Republic Act No. 10149 and Executive Order No. 95, series of 2025.
It also does not apply to GOCCs that already operate under a separate Compensation and Position Classification System approved by the President through the Governance Commission for GOCCs, or individuals engaged without an employer-employee relationship.
How the pay raise works
Under the National Budget Circular No. 601, the salaries of incumbent personnel will be adjusted based on the Third Tranche Salary Schedule, corresponding to the salary grade and step of their position as of December 31, 2025.
New hires, as well as casual and contractual employees, will receive salaries at Step 1 of the applicable salary grade.
Meanwhile, compulsory retirees whose services were extended beyond December 31, 2025 are also entitled to the salary increase, subject to the specific provisions outlined in the circular.
To help agencies and employees understand the changes, the DBM included illustrative examples:
(a) An Administrative Officer II (Salary Grade 11) earning ₱30,024 as of December 31, 2025 will see their monthly pay increase to ₱31,705 starting January 1, 2026
(b) A Senior Agrarian Reform Program Officer (SG-18) with a salary of ₱51,304 will have this adjusted to ₱53,818.
(c) Meanwhile, a long-serving Administrative Assistant II (SG-8, Step 8) who was earning ₱22,843 at the end of 2025 will receive ₱23,883 under the new rate beginning in 2026.
Funding in place
The DBM emphasised that funding for the third tranche has already been allocated under the 2026 General Appropriations Act.
For national government agencies, the increases will be charged against their Personnel Services (PS) budgets for 2026. Salary adjustments for casual and contractual personnel funded through lump-sum appropriations will be sourced from the agencies’ approved lump-sum PS allocations.
As for covered GOCCs, implementation will be funded through their approved Corporate Operating Budgets (COBs). According to the DBM, this will be done without additional funding releases from the national government and without resorting to borrowing.
With the third tranche now underway, government employees are one step closer to the full salary adjustments scheduled to be completed in 2027.
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