Improvements in public sector compensation continue in the Philippine government through the Salary Standardization Law VI (SSL VI). The implementation of this law is in its second year by 2025, with updated salary adjustments for government employees, especially those in Salary Grades 1 to 11.
Effective March 2025, these adjustments will be part of the second tranche of the SSL VI law which aims to alleviate public sector wages compared to private sector wages and to help public workers cope with increasing inflation and rising costs of living.
Understanding SSL VI and Its Purpose
An act to establish and maintain a just, transparent, and competitive pay structure among government employees. It is a four-year salary adjustment program that commenced in 2024 and will be completed in 2027. The key aims are to harmonize government salaries with standards in the private sector, attract and retain competent individuals in public service, and reward performance and loyalty. The 2025 salary increases mark the second tranche of this reform.
March 2025 Salary Increases for Salary Grades 1 to 11
As part of the 2025 second tranche, employees of the national government who fall under Salary Grades 1-11 are scheduled to receive a further increase. For example, an employee under Salary Grade 1 will now earn PHP 14,061 at Step 1, up from PHP 13,530 in the previous year. In a similar manner, those in Salary Grade 11 will see their salary rise to PHP 30,024 at Step 1, with incremental increases for each step level within the grade.
Each salary grade has eight step increments that correspond to the length of service and merit-based advancements. These are structured increases in a pay scale aimed at rewarding both time and performance thereof. The step-by-step structure ensures that with time and competence, the remuneration for the employee increases.
Allowances and Other Financial Benefits
Besides the basic salary adjustment, the third tranche in 2025 will still provide mandatory annual allowances. All government employees will be entitled to a medical allowance of PHP 7,000 as well as a clothing allowance of PHP 7,000 to support personal welfare towards their overall well-being and professional appearance.
Incentives to Encourage Performance
Performance-based incentives remain one of the important components in the implementation of SSL VI. The Performance-Based Bonus (PBB) gives benefits for employees who meet certain performance indicators by targets at office level. Meanwhile, the Collective Negotiation Agreement (CNA) Incentive is for employees qualified under collective bargaining agreements that contribute highly to organizational productivity. Such incentives aim to boost morale and encourage a results-oriented culture in government service.
Implementation in Local Government Units (LGUs)
The Local Government Units (LGUs) are also implementing salary adjustments, but the extent of implementation varies upon the financial capacity of the concerned LGUs. First-class provinces implement salary increases at 100 percent; second-class provinces implement it at around 95 percent.
Third-class municipalities may implement it at around 85 percent, while fourth-class municipalities would typically implement at around 80 percent. This flexible model for implementation ensures that financial constraints at the local level are taken into consideration while still driving toward wage reforms.
Funding and Sustainability
The funding covering these salary increases comes from the national budget, particular for SSL VI implementation. The Department of Budget and Management DBM assures that the appropriations for the 2025 adjustments are already set for all government agencies and qualified personnel. The sustainability of the program continues to be stressed by the Government in a manner consistent with the wider macroeconomic objectives.
Conclusion
The forthcoming salary update by March 2025 under SSL VI is a substantial step toward the government’s endeavor to improve the compensation system of its workforce in the Philippines.
The employees occupying Salary Grade 1 through Grade 11 will now find their salaries better positioned amid the competitive market, with additional allowances and performance-based incentives, all aimed to induce greater motivation, efficiency, and service quality along the public sector. The adjustments recognize not only the staff effort in government work but also set into momentum the attainment of a more sound and professional civil service in the years ahead.