President Marcos Orders Overhaul of Government Performance Management and Incentives Systems

Is this the end of the Performance-Based Bonus (PBB) and Productivity Enhancement Incentive (PEI) of government employees?

In a significant move towards enhancing government efficiency and transparency, President Marcos has issued an order to revamp the existing performance management and incentives systems within the government specifically “streamlining, overhauling, improving, and simplifying” of such systems.

In Executive Order No. 61, released on June 3, 2024, the Palace declared that the Results-Based Performance Management System (RBPMS) and Performance-Based Incentive System (PBIS) were “duplicative and redundant with the internal and external performance audit and evaluation systems of the government.”

The RBPMS and PBIS were designed to work together in establishing standardized performance management and incentives within the government.

Initially introduced in 2011 through an administrative order under the Aquino administration, the RBPMS aimed to implement a unified performance management system across all executive branch departments and agencies.

On the other hand, the PBIS was a component of the RBPMS established through a 2012 executive order, also by the Aquino administration.

As detailed in the Official Gazette, the PBIS enabled government employees to receive performance-based bonuses tied to their contributions towards a department’s objectives.

Additionally, it allowed the provision of productivity enhancement incentives (PEI) that were not solely linked to performance metrics.

However, according to President Marcos, these systems had not worked as planned.

Moreover, the subject EO states that the said systems “lacked a review mechanism, leading to the accumulation of rules, regulations, and issuances from the [Inter-Agency Task Force], thereby making compliance therewith burdensome, bureaucratic, laborious, and time-consuming for government agencies.”

In this regard, the President Marcos directed the establishment of a technical working group (TWG) responsible for examining and reassessing the RBPMS and PBIS.

The TWG was also assigned the duty of harmonizing the new government performance management system with the internal audit initiatives and functions of the government.

Comprising the budget secretary as the chairperson, the executive secretary as the co-chairperson, and the secretaries of finance and the National Economic and Development Authority, along with the director general of the Anti-Red Tape Authority, as its members.

The TWG is required to present its findings to the Office of the President within six months from the effectivity of the Executive Order. Likewise, within three months, the TWG must propose a transition plan for the grant of performance-based bonuses for the fiscal year 2023.