Grant of 14th month pay for state workers hangs workers also in peril

MANILA, Philippines – Apart from the delay in the salary increases that government personnel should have already received, the disagreements in Congress over the Salary Standardization Law 4 (SSL-4) could also lead to a postponement in the grant of a newly introduced 14th month pay.

Sen. Ralph Recto pointed out that the proposed SSL-4 contains a provision that would effectively grant state workers with a bonus equivalent to a whole month’s pay that would be given either in May or June. 

Under its section on “compensation system,” the SSL-4 grants “a mid-year bonus equivalent to one month basic salary to be given not earlier than May of every year.”

“This mid-year bonus becomes the 14th month pay, the traditional 13th month pay being the year-end bonus,” Recto said.

He explained that the 13th month pay for government personnel used to be given in two tranches, half in the middle of the year and the balance in December. 

“The SSL-4 makes what is given mid-year and year-end equivalent to a full month pay each,” Recto said. 

For most of the beneficiaries, the mid-year bonus would be tax-free by virtue of Republic Act 10653, which adjusted the tax exemption ceiling of 13th month pay and other benefits from P30,000 to P82,000.

On top of this, Recto said SSL-4 retains the P5,000 Christmas gift that is given to all government workers.

However, the grant of a 14th month pay could also suffer delays, just like the long-awaited salary increase, because of the disagreement of the Senate and the House of Representatives on SSL-4.

A bicameral conference committee meeting held last Wednesday for both sides to sort out differences and come up with a consolidated version ended in a deadlock.

The Senate wanted to retain the indexation of the pension rate increase for military and police personnel to the hike in the salaries of the active members. The House wanted to suspend this provision. 

According to the House panel, the government does not have the funds to implement the indexation provision, which is estimated to cost between P19 billion to P21 billion on top of the P57.9 billion for the salary increase this year.