Government employees are set to receive a salary increase in 2026 under the 3rd tranche of salary increase authorized under Executive Order No. 64, s. 2024.
By now, some agencies may have already started implementing this to their employees.
This is part of a four-tranche implementation that gradually adjusts the pay of all government workers toward a more competitive compensation structure.
Read on to find out how much you will receive, who is covered, and when to expect the release.
What is a Salary Increase for Government Employees?
A salary increase for government employees is a legislated adjustment in the basic monthly pay of personnel in the public sector.
Unlike private sector raises, government salary increases are not discretionary — they are mandated by law and implemented across all government agencies, offices, and instrumentalities simultaneously.
Salary increases in the Philippine government are typically carried out through the Salary Standardization Law (SSL), which sets a unified pay schedule for all positions classified under the Salary Grade (SG) system.
The SSL is periodically updated by Congress to keep government salaries competitive, attract qualified workers, and reduce the gap between public and private sector compensation.
3rd Tranche Salary Increase (2026)
The 3rd Tranche Salary Increase refers specifically to the third phase of the four-tranche implementation schedule under Executive Order No. 64 (s. 2024) signed by President Ferdinand Marcos Jr..
Each tranche takes effect on a specific date and progressively raises the basic pay of each Salary Grade step until the target rates set are fully implemented by the 4th tranche.
The 3rd tranche is effective January 1, 2026 for national government employees, and is reflected in their January 2026 payroll (or released as salary differential for those whose payroll is processed later).
In local government units (LGUs), the 3rd tranche is implemented in August 2026.
Who is Entitled to the 3rd Tranche Salary Increase?
The 3rd tranche salary increase covers all government employees who are:
- Permanent, temporary, casual, or coterminous appointees in national government agencies (NGAs), including constitutional offices and state universities and colleges (SUCs)
- Elective and appointive officials whose salaries are based on the Salary Grade schedule
- Employees of local government units (LGUs) — subject to the LGU’s implementation schedule and funding availability
- Government-owned and controlled corporations (GOCCs) whose compensation follows the SSL, as determined by the Governance Commission for GOCCs (GCG)
Note: Employees on job order (JO) or contract of service (COS) are NOT entitled to the SSL-based salary increase. Their rates are governed by separate policies and agency budgets.
How Much is the 3rd Tranche Salary Increase?
The increase per employee depends on their Salary Grade (SG) and step increment.
For example, an employee with salary grade 11 and step 1 receives a monthly salary of P31,705 starting January 1, 2026.
To see the amount of salary per salary grade and step, see Annex A of National Budget No. 601 dated January 22, 2026.
Please note that the Department of Budget and Management (DBM) issues a separate salary schedule for LGUs. Their 3rd tranche salary schedule is expected to be issued by the DBM in July or August 2026.
When is the 3rd Tranche Salary Increase Released?
Effectivity for National Government Agencies
For employees of national government agencies (NGAs), constitutional offices, SUCs, and other national instrumentalities, the 3rd tranche salary increase is effective January 1, 2026.
This means their January 2026 payroll should already reflect the new, higher basic pay rates.
Salary Differential
If an agency could not immediately implement the new rates in the January 2026 payroll due to budget or HR processing timelines such as the delay in the issuance of Notice of Salary Adjustment (NOSA), the difference between the old rate and the new rate — called the salary differential — is paid retroactively.
The salary differential covers the period from January 1, 2026 up to the month the new rates are fully applied. Employees should receive this as a lump sum payment once the agency has processed the updated payroll.
Read: Salary Differential: A Complete Guide for the Back Pay of Government Employees for FY 2026
Effectivity for Local Government Units (LGUs)
LGUs follow a different implementation timeline.
Their 1st tranche salary increase under EO No. 64 (s. 2024) was implemented not earlier than August 2, 2024 (not January 1, 2024), pursuant to Section 325(g) of RA No. 7160, which states that salary increases or adjustments (for LGUs) shall in no case be made retroactive.
Further, the same shall be contingent on the authorization from their respective Sanggunian, subject to pertinent provisions of EO No. 64, s. 2024, RA No. 7160, and the applicable provisions of the local budget Circular implementing the salary increase.
Therefore, the effectivity of the implementation by the LGUs shall be on the date of the approval of the appropriation ordinance authorizing the supplemental budget or augmentation or on the date fixed therein pursuant to Section 320 of the LGC.
Accordingly, the LGU may implement the Third Tranche of the Updated Salary Schedule provided it has already implemented the First and Second Tranche Salary Schedules under EO No. 64 for a minimum of one {1) year.
Legal Basis
The 3rd Tranche Salary Increase is grounded in the following issuances:
- Executive Order No. 64 (s. 2024) – Issued by President Ferdinand R. Marcos Jr., implementing the salary increase in four tranches starting January 1, 2024 for the 1st tranche, January 1, 2025 for the 2nd tranche, January 1, 2026 for the 3rd tranche and January 1, 2027 for the 4th and last tranche.
- National Budget Circular (NBC) No. 601 – Issued by the Department of Budget and Management (DBM), this circular provides the implementing guidelines for the salary increase under EO No. 64, s. 2024.
- DBM Budget Circular / Local Budget Memorandum – Separate issuances govern the implementation for LGUs.
Frequently Asked Questions
Is the 3rd tranche salary increase automatic?
Yes, for national government employees, the salary increase is automatic and mandatory upon the effectivity date of January 1, 2026, covered by the implementing guidelines issued by the DBM.
No individual application or request is needed. Your agency’s HR and Finance/Budget office handles the implementation, subject to the issuance of a Notice of Salary Adjustment.
Will contractual and casual employees receive the salary increase?
Yes, as long as they hold a regular appointment — whether permanent, temporary, casual, or coterminous — and are paid under the SSL Salary Grade schedule, they are entitled to the increase.
However, job order (JO) and contract of service (COS) workers are excluded, as their compensation is not governed by the SSL.
What if my agency has not yet released the increase by March or April 2026?
Your agency is still obligated to pay the increase retroactive to January 1, 2026. The unpaid portion from January to the date of actual implementation will be released as a salary differential.
If there are prolonged delays, employees may raise the matter through their HR office or agency head.
Are LGU employees also entitled to the 3rd tranche increase?
LGU employees are covered by the salary increase under EO No. 64, s. 2024, but the local legislative body (Sanggunian) must first pass a resolution authorizing the implementation and appropriating the necessary funds.
Not all LGUs implement tranches simultaneously with the national government. Check with your local HRMO or Budget Office.
Will GOCC employees receive the same salary increase?
It depends on whether the GOCC follows the SSL. GOCCs under the GCG’s jurisdiction that are covered by SSL will implement the 3rd tranche according to the same timeline.
GOCCs with their own approved compensation framework may have different rates.
How do I compute my salary differential?
Subtract your old basic pay from your new 3rd tranche basic pay, then multiply by the number of months from January 2026 to the month before implementation.
For example, if your agency implements in March 2026, your salary differential covers January and February 2026 (2 months × difference in basic pay).
Will the salary increase affect my GSIS contributions and other deductions?
Yes. Since GSIS contributions, PhilHealth premiums, and Pag-IBIG contributions are computed based on basic pay, an increase in basic pay will proportionally increase these deductions.
Your net take-home pay will increase, but not by the full amount of the basic pay adjustment.
Summary / Key Takeaways
- The 3rd Tranche Salary Increase is the third phase of the salary increase authorized under Executive Order No. 64 (s. 2024).
- It is effective January 1, 2026 for national government employees. It is implemented in different timelines for LGUs.
- All permanent, temporary, casual, and coterminous appointees in the national government and qualified LGU employees are covered; JO/COS workers are excluded.
- The increase varies by Salary Grade and salary step.
- Agencies unable to process the increase immediately must pay the unpaid portion as a salary differential.
- LGUs implement the increase subject to a Sanggunian resolution and availability of funds — timelines may vary.
- The DBM’s NBC No. 601 provides the official salary tables and implementing rules.
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Disclaimer: This article was written based on Executive Order No. 64 (s. 2024), and National Budget Circular No. 601 issued by the Department of Budget and Management, and is intended for educational and informational purposes only. The contents of this post shall not be used as a reference or legal basis for any government transaction, payroll processing, or official action. For authoritative guidance, always refer to the official text of the applicable laws and issuances, or consult your agency’s Human Resource Management Office (HRMO), Budget Office, or legal counsel.