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GCG MEMORANDUM CIRCULAR NO. 2017 - 01

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SUBJECT :

DATE

lureRrur PenronmANcE-BASED BoNUS (PBB)

09 June 2017

1.

2.

BacrcnouND AND Punpose. - This Circular has been issued to establish the rules andregulations for the grant of the lnterim Performance-Based Bonus (PBB) to qualifiedGOCC Offlcers and Employees pursuant to Executive Order (E O.) No. 80, s.20121pending the approval of the Total Compensation Framework (TCF) and lndex ofOccupational Services, Position Titles and Job Grades (lOS) of GOCCs pursuant tothe Compensation and Position Classification System (CPCS).2

Eucrstrrry or a GOCC ro GRANr rxe PBB. - The grant of PBB shall be based on theoverall company performance, and then distributed to individual Officers andEmployees based on their performance ranking. Pursuant to the "PertormanceEvaluation System for the GOCC Secfor'' [GCG M.C. No. 2013-02 (Re-lssued)] or anyrevised version thereof, a GOCC, in order to be eligible to grant PBB to its qualifledOfficers and Employees, must:

2.1. Achieve a weighted-average score of at least 90% in its applicable PerformanceScorecard;

2.1.1. Measures wherein the accomplishments for the same cannot be

documentation bv the GOCC on how such accomplishments weredetermined may be oiven an automatic zero score.

2.2. Submit a Quality Management System (OMS) for at least one core processcertified by any international certifying body approved by the A.O. No. 25, s.

20113 lnter-Agency Task Force on the Harmonization of National GovernmentPerformance Monitoring, lnformation and Reporting Systems (IATF), or ISO-

presence of the followino documents in the agencv Transparencv Seal:

a. Approved Qualitv Manual: and

1 E.O. No. 80, entitled "Directing the Adoption of a Performance-Based lncentive Sysfem for GovernmentEmployees," was issued to, among others, provide incentives that support and encourage performance-

driven, productive and efficient GOCCS.2 Adopting a Compensation and Position Classification Sysfem (CPCS) and a General lndex of Occupational

Seryrbes (OS) tor the GOCC Sector Covered By Republic Act No. 10149, and for Other Purposes.3 Creating An lnter-Agency Task Force On The Harmonization Of National Government Pefiormance

Mon itoring, I nform ation And Reporting Sysfems.

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2.3. Comply with the Good Governance Conditions provided in GCG M.C. No. 2013-02 and 2014-024:

Conditions Common to National Govemment Agencies and GOCCs:

(a) Transparency Seal;

(b) PhiIGEPS Posting;

(c) Cash Advance Liquidation;

(d) Citizen's Charter or its equivalent;

(e) Government Quality Management System Standards (GOMSS)pursuant to E.O. No. 605, s. 2007; and

(f) Compliance with submission and review of SALN of officials andemployees.s

Conditions Specific to GOCCs Covered by R.A. No.10149:(a) The GOCC has satisfied all statutory liabilities, including the

payment of all taxes due to the Government as certified by the BlR,declaration and payment of all dividends to the State as of the endof the applicable calendar year, whenever applicable, and NGAdvances, as certified by the Department of Finance (DOF).Liabilities that are still under dispute and there has been no finaland executory judgmenUdecision as of the date of the release of thePBB by the GOCC shall be excluded for the purpose of thisprovision.

(b) Submission and execution of concrete and time bound action plansfor addressing Notices of Disallowances and Audit ObservationMemoranda from the Commission on Audit (COA), if any;

(c) Maintain/update and implement the GOCC's "Manual of CorporateGovernance" and 'No Gift Policy" approved by the GCG anduploaded on the GOCC's website pursuant to the 'Code ofCorporate Governance for GOCCS" (GCG M.C. No. 2012-07); and

(d) Compliance with posting on the GOCC's website the informationenumerated under Section 43 of GCG M.C. No. 2012-07.

Comply with all Good Governance Conditions and other reportorial requirementsas validated directly by the following oversighUvalidating agencies:

PBB Requirement Validating Agency

Transparency Seal DBM-OCrO

PhiIGEPS Posting PhiIGEPS

Citizen's Charter cscSubmission of SALN of employees Office of the President, Office of the

Ombudsman and CSC.

Note: The SALN validatinq aqencies

Policies and Guidelines on the lntegrated Corporate Repofting Sysfem (rCRS) for the GOCC Sector.See CivilService Commission Memorandum Circular No. 3, s. 2013.

2.4

4

5

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3.

PBB Requirement Validating Agencyshall provide the list of SALN non-filers

PES Accomplishments GCG

STO - accomplishment. QMS Certification or lSO-aligned

QMS documentation. STO identified by agency head (lf

Applicable)

GQMC

DBM-BMB concerned; OP-OES

GASSo Public Financial Management Reports

o Submission of Financial Statements,Ageing of Cash Advances Report

. Budget and Financial AccountabilityReports (BFARS)

. APCPI

o Submission of APP

DBM and COA

GPPB-TSO

GPPB-TSO

DBM

coA

Agency Rating and Ranking Report GCG

2.5. CommuucAloN AND lNFoRMAloN. - The GOCC CEO shall confirm with the GCGand IATF the name, position and contact details (e-mail, landline, facsimile,cellular phone) of the senior officials designated as the PBB focal person and thespokesperson, respectively.

GOCCs should strenothen their communication strateoy and ensure

The IATF oversighUvalidating agencies may be contacted through the followingcommunication channels:

(a) AO 25 Secretariat at [email protected]

(b) PBIS lnfo Board

(c) RPBPMS website www.dap.edu.ph/rbpms

(d) PCDSPO e-mail at [email protected]

(e) Text hotline (smart. +63920.498.9121)

(f) Facebook (www. facebook. com/P B Bsecretari at)

(g) Twitter: @pbbsecretariat

Covenrce aNo ErreratLlry. - All Officers and Employees of GOCCs who occupyregular, casual or contractual positions shall be entitled to full grant of the PBB from

their employer at the time of the payout of the PBB', Provided, they have rendered an

aggregate of at least nine (9) months of service in the public sector for the applicablePBB year. Officers and Employees who do not meet the 9-month service requirementbut have served at least 3 months of service shall be entitled to PBB on a pro-rata

basis as provided in Section 3.1.7 herein.

3.1 . Eligibility of lndividual Officers and Employees of GOCCs

3.1.1. Employees belonging to the First and Second Levels should receive arating of at least "Satisfactory" based on the agency's CSC-approvedStrategic Performance Management System (SPMS), or equivalent.

3.1.2. Third Level officials should receive a rating of at least "Satisfactory" underthe Career Executive Service Performance Evaluation System (CESPES).CESPES covers all incumbents of CES positions in various agencies ofthe national government including GOCCs with original charters, for anuninterrupted period of at least three (3) months. Payment of the PBB toThird Level officials shall be contingent on the release of results of theCESPES.

3.1.3. Other officials performing managerial and executive functions who are notpresidential appointees are covered by the agency's CSC-approvedSPMS, or equivalent, and should receive a rating of at least "Satisfactory."

3.1.4. Personnel on detail to another government agency for six (6) months ormore shall be included in the ranking of employees in the recipient agencythat rated his/her performance. Payment of the PBB shall come from themother agency.

3.1.5. Personnel who transferred from one government agency to anotheragency shall be rated and ranked by the agency where he/she served thelongest. !f equal months were seryed for each agency, he/she will beincluded in the recipient agency.

3.1.6. An employee who has rendered a minimum of nine (9) months of serviceduring the fiscal year and with at least "Satisfactory" rating may be eligibleto the full grant of the PBB.

3.1.7. An employee who rendered a minimum of three (3) months but less thannine (9) months of service and with at least "Satisfactory" rating shall beeligible for the grant of PBB on a pro-rata basis. The PBB of employeesshall be pro-rated corresponding to the actual length of service rendered,as follows:

Length of Service % of PBB

8 months but less than 9 months 90o/o

7 months but less than 8 months 80%


5 months but less than 6 months 600/o



The following are the valid reasons for an employee who may not meetthe nine-month actual service requirement to be considered for PBB on apro-rata basis:

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3.2.

(a) Being a newly hired employee;

(b) Retirement;

(c) Resignation;

(d) Rehabilitation Leave;

(e) Maternity Leave and/or Paternity Leave;

(f) Vacation or Sick Leave with or without pay;

(g) Scholarship/Study Leave;

(h) Sabbatical Leave; and

(i) Other leaves provided for bv law.

3.1.8. An employee who is on vacation or sick leave, with or without pay, for theentire year, is not eligible to the grant of the PBB.

3.1.9. Personnel found guilty of administrative and/or criminal cases in theaoplicable vear bv formal and executorv iudament shall not be entitled tothe PBB. lf the penalty meted out is only a reprimand, such penalty shallnot cause the disqualification to the PBB.

3. 1 .10. Officials and employees who failed to submit the latest SALN asprescribed in the rules provided under applicable CSC rules, shall not beentitled to the PBB of the applicable year.

3.1.11. Officials and employees who failed to liquidate Cash Advances receivedin the applicable year within the reglementary period as stated in theprevailing COA Circular, shall not be entitled to the PBB for the sameyear.

3.1 .12. Officials and emplovees who failed to submit their complete SPMS

vear.

3.1.13. Agency heads should ensure that officials and employees covered byR.A. No.6713 submifted their SALN of the preceding year to therespective SALN repository agencies, liquidated their Cash Advances ofthe corresponding year, and completed SPMS Forms. as these will bethe basis for the release of the PBB of the applicable year to individuals.

Exclusions. - Excluded from the grant of the PBB are those hired withoutemployer-employee relationships and paid from non-Personal Servicesappropriations/budgets as follows:

(a) Consultants and experts hired to perform specific activities orservices with expected outputs;

(b) Laborers hired through job contracts (pakyaw) and those paidon piecework basis;

(c) Student laborers and apprentices; and

(d) lndividuals and groups of people whose services are engagedthrough job orders, contracts of service, or others similarlysituated.

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DETRTBUnoN SysrEM. - Distribution of PBB among qualified Officers and Employeesof a GOCC who have complied with the eligibility rules in Section 4 above shall be inaccordance with the following procedure:

4.1. Grouping of Personnel. - ln determining the distribution of the PBB amongqualified GOCC Officers and Employees, all personnel shall be ranked on apercentile basis within their respective levels as determined by the GOCCGoverning Board through Management in accordance with the followingguidelines:

(a) Senior Management: This refers to the executive officers of the GOCC, andincludes all heads of functional units, which are primarily involved in thedevelopment, evolution, and approval of long-term vision across a functionor area of specialization. lt includes those who lead the development offunction strategy, implement and maintain policies of the organization forarea of responsibility. (e.9., Deputy Administrator, Sr. Deputy Administrator,Assistant General Manager, Executive Vice President, Sr. Vice President,Vice President, etc.)

The PresidenUCEO, or whoever is the highest ranking executive officer, hasthe prerogative to avail of either the Performance-Based lncentive (PBl)under GCG M.C. No. 2017-02, or the PBB, but not both. ln the event theCEO is included in the PBB application, he/she must meet the eligibilityrequirements for the PBI and shall be ranked separately on his/her own andshall not be included in the forced ranking of Officers and Employees.

(b) Middle Management: This covers those whose work is primarily achievedthrough others, with direct accountability for setting direction and deployingresources. Responsible for people management, including performanceevaluation and pay reviews and typically hire/fire decisions. lncludesindividual contributors who are recognized as subject matter experts with in-depth technical knowledge, project management and significant influenceskills in area of expertise (e.9., Head of Department or Service).

(c) Professional and Supervisory: This level comprises the personnelwhose work is primarily achieved by an individual or through project teams.Requires the application of expertise in professional or technical area(s) toachieve results. Typically has a university degree or equivalent workexperience that provides knowledge and exposure to fundamental theories,principles and concepts. lncludes supervisors and junior management thatmay not have full management authority (e.9., Financial AnalysVspecialists,Accountant, HR Officer, etc.)

(d) Clericauceneral Staff: This category includes all clerical, administrativeand secretarial staff with little or no supervisory responsibility but whocontribute independently to the organization. lt also covers basiccomputing/data processing staff such as operators, customer serviceassistants and skilled craftsmen/technicians (e.9., Secretary, Clerk, FinanceProcessor, Administrative Assistant, Chauffeur, Utility Worker, Messenge0.

4.2 Distribution for Qualified Officers and Employees. - ln each level providedfor in Section 4.1 above, the ratings of Officers and Employees under the

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7.

GOCC's SPMS or its equivalent shall be quantified to allow for ranking on apercentile basis for the purpose of distribution as follows:

4.2.1. Rates ol PBB. - The grant of the PBB shall be based on the performanceof the individual Officers and Employees with the rate of incentive as amultiple of the individual's monthly basic salary (MBS) as of 31 Decemberof the applicable vear based on the table below, but not lower thanP5.000:

Percentile PBB as % of MBS

Top: Maximum 10% 65.0%

Next: Maximum 25% 57.5%

Remaining: Minimum 65% 50.0%

'The percentile of the 'Top' and 'Next" levels are maximum figures with the discretion onthe paft of the Governing Board/Management to decrease the figures and distibutethem to the "Remaining' level.

Provided, that the total cost of the PBB shall not result in a net loss for theapplicable year computed before subsidy and unrealized gains/losses, andafter pavment of all statutorv oblioations and liabilities.

4.3.

ON PBB.

Fuexsurry. - The multiples and amounts herein are intended to provide a cap on thePBB that may be distributed by a GOCC. However, nothing herein shall be construedto limit the business judgment or authority of the Governing Board, when giving dueregard to the financial condition and existing policies of a particular GOCC, to reduce(a) the actual amounts to be distributed, and/or (b) the distribution rates under Section4.

bv the GCG.

GREvANcE MEcHANTSM. - The Governing Board through Management shall set up a

Complaints Mechanism to respond to the PBB-related issues and complaints raised byOfficers and Employees.

FuNprNG FoR rHE PBB. - The funding to support the PBB System herein shall becharged by GOCCs from their respective corporate funds, subject to the approval oftheir respective Governing Boards in accordance with applicable laws, rules andregulations. However, it shall be prohibited to source the payment of the PBB from thefollowing:

(a) Loans;

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(b) Subsidy from the NG for the GOCC's operations, except for subsidyincome or subsidy given by DBM precisely for the payment of the PBB;and

(c) Sale of the GOCC's asset(s) for the sole purpose of paying the PBB andis otherwise not in the ordinary course of business.

9. CHEcKLrsr ANp TTMELTNE. - GOCCS applying to grant the PBB within their respectivecorporations shall submit the required documents enumerated in Annex A on orbefore 15 Julv 2017 for FY 2016 PBB. and last workino dav of April for the vearsthereafter.

The schedule for the PBB submissions for the Good Governance Conditions Common

applicable IATF M.C. on the PBB.

10. EFFECT oF SuBMrssroN lr,ro NoN€uaiflssroN oN THE PRESCRTBED PERroD. - GOCCsthat submitted all the required documents on the given deadline may be authorized togrant their PBB upon receipt of the authorization letter from the GCG. Failure to

the GOCC to qrant the PBB to its Officers and Emplovees and PBI to its AppointiveDirectors for the applicable year.

11. EFFEcrs oF NoN-CoMpLrANcE/ PRoHrBrrEp Acrs. - A GOCC. which after due process

a.

b.

oolicv of oavino the PBB based on the individual rankinq.

Period.

12. AppE^Ls FoR DENTAL oF PBB. - Any appeal for the denial of the grant of PBB basedon failure to comply with the Good Govemance Conditions Common to NationalGovernment Aoencies and GOCCs shall be made directlv to the respective IATFoversighVvalidating agency, as indicated in Section 2 herein. All other issues shall beappealed with the GCG.

13. PBI AppLrcAfloN DEEMED AuroMAflcALLy FTLED. - The Performance-Based lncentive(PBl) for Appointive Directors is deemed to have been applied for by every GOCCwhich applies for the PBB {ant: Provided that, lhe actual authorization for thedistribution of PBI shall be conditioned upon compliance with the requirementsprovided for under the GCG Memorandum Circular on the grant of Performance-Based lncentive.

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14. Errecnvrrv. - This Circular shall take effect immediately upon its publication in theCommission's website al www. gcg.gov. ph.

"o"ro%eilNGUEz

q c-('BENJAMIN E. DIOKNO

DBM Secretary

S C. OORALCommissiln

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DOF Secrefary 008547

Annex A

CHECKLIST OF DOCUMENTS TO BE SUBMITTED FOR THE GRANT OFPERFORMANCE-BASED BONUS (PBB)

(a) Annualscorecard/Monitoring Report using PES Form 3 Data/documents indicated inGOCC Annual Scorecard

(b) Board Resolution authorizing the grant of PBB in accordance withapplicable laws, rules and regulations (PBB Form 1)

(c) Omnibus Certification signed by the Chairperson and the ChiefExecutive Officer of the GOCC (PBB Form 2)

. Time bound action plan foraddressing NDs and AOMsfrom COA

. Certification issued by the ff.agencies for payment ofmandatory premiums:. GSIS

- SSS

- Pag-lBlG

- PhilHealth

(d) Schedule and summary of the distribution of the PBB to qualifiedOfficers and Employees who will receive the PBB and those who are inthe "Below Satisfactory" category (PBB Forms 3a and 3b)

Electronic and hardcopres

1 Electronic copies shall be submitted to the GCG through a CD.

f fi'r?^>

DOCUMENTARY REQUIREMENTS SUPPORTING DOCUMENTSFORM OF

SUBMISSIONI

Electronic and hardcopies

Hard copy

Hard copy

...Created Date 6/15/2017 1:17:47 PM

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