POV: Why you may need to hold your releases for PEI for FY 2025?
You may need to hold the release of the FY 2025 Productivity Enhancement Incentive (PEI) of your employees until we receive a go signal from authorities.
You may be aware by now that Executive Order No. 61, s. 2024, suspended the implementation of Administrative Order No. 25, s. 2021 and Executive Order No. 80, s. 2012.
AO No. 25 (s. 2011) established a unified and integrated Results-Based Performance Management System (RBPMS) across all departments and agencies within the Executive branch of government. [PCO]
On the other hand, EO No. 80 (s. 2012), as amended by EO No. 201 (s. 2016), adopted a Performance-Based Incentive (PBI) System, consisting of Productivity Enhancement Incentive (PEI) and the Performance-Based Bonus (PBB), to motivate higher performance and exact greater accountability in the public sector and ensure accomplishment of government commitments and targets. [PCO]
In 2024, thru EO No. 61, Malacañang said the RBPMS and PBI System have been duplicative and redundant with the internal and external performance audit and evaluation systems of the government, and lacked a review mechanism leading to the accumulation of rules, regulations, and issuances from the Inter-Agency Task Force (IATF) on the Harmonization of National Government Performance Monitoring, Information and Reporting Systems.
Thus, the implementation of AO No. 25 (s. 2011) and EO No. 80 (s. 2012), and all other relevant issuances related thereto, was suspended pending review of the RBPMS and PBI System.
As a result, the Department of Budget and Management (DBM) issued Circular Letter No. 2024-17 re: Grant of the Fiscal Year 2024 Productivity Enhancement Incentive (PEI) to provide guidelines on the release and payment of PEI for FY 2024.
In the subject Circular Letter, the DBM states:
Corollary, the President approved the Transition Plan submitted by the TWG [Technical Working Group] for the New Government Performance Management and Incentives System pursuant to EO No. 61, including the continued grant of the PEI for FY 2024.
Please take note that the authority given by the President was specific to FY 2024 and does not include years thereafter.
The PEl is one of the incentives under the Total Compensation Framework established under Congress Joint Resolution (JR) No. 4, s. 2009 that may be granted to government employees as a reward for exceeding agency and financial performance targets, and to motivate employee efforts toward higher productivity.
Relatedly, the appropriation for the PEI is one of the Personnel Services items for comprehensive release through General Appropriations Act as the Allotment Order, as provided under National Budget Circular No. 592.
In accordance with the approval by the President of the submitted Transition Plan of the EO No. 61 TWG, the FY 2024 PEI shall be granted at a uniform rate of P5,000 for each qualified government employee, payable not earlier than December 15, 2024, subject to the conditions, policies, and guidelines prescribed under Budget Circular No. 2017-45 dated December 4, 2017.
Foregoing considered, it is clear that the release of the FY 2024 PEI was subject to the approval by the President considering the issuance of EO No. 61.
Agencies could have just released the FY 2024 PEI then since the budget for the same was already included in the FY 2024 General Appropriations Act (GAA). However, the DBM still sought authority from the President to release the same.
Thus, following the same circumstances and conditions, in our POV, the release of the FY 2025 PEI shall likewise subject to the same prior authority given to the FY 2024 PEI. Therefore, we take caution in releasing the FY 2025 PEI given the above information.
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