P5,000 productivity enhancement incentive for gov’t employees: Are you qualified?

MANILA, Philippines – Government employees are set to receive a P5,000 cash incentive starting December 15 after the Department of Budget and Management (DBM) authorized the release of the Productivity Enhancement Incentive (PEI) for fiscal year 2025.

Signed by DBM Acting Secretary Rolando Toledo on Wednesday, December 17 under Circular Letter No. 2025-13, the incentive is part of the government’s Total Compensation Framework. It is intended to improve productivity and motivate government employees to meet performance targets by rewarding “exemplary civil servants and well-performing public institutions.”

President Ferdinand Marcos Jr. authorized the DBM to issue the necessary guidelines on the grant while the Performance-Based Incentive System (PBIS) and Results-Based Performance Management System (RBPMS) are suspended and under review since June 2024.

The 2025 PEI is subject to existing rules under Budget Circular No. 2017-4.

Each government agency is responsible for the proper implementation of its provisions, and the officials in charge may be held personally accountable for any incorrect payments.

Is your agency covered?

The PEI will be granted at a uniform rate of P5,000 to each qualified government employee. A qualified government employee can be regular, casual, or contractual. This covers employees in the following:

• national government agencies,
• state universities and colleges,
• government-owned or -controlled corporations (GOCCs) under DBM,
• local government units (LGUs)
• local water districts (LWDs).

It also applies to military and uniformed personnel under the following:

• Armed Forces of the Philippines
• Philippine National Police
• Bureau of Fire Protection
• Bureau of Jail Management and Penology under the Department of Interior and Local Government
• Philippine Coast Guard under the Department of Transportation
• National Mapping Resource Information Authority under the Department of Environment and Natural Resources.

Who are excluded?

The PEI does not apply to consultants and experts hired for a limited period, laborers hired on job contracts or piecework, student workers, apprentices, or anyone hired through contracts of service or job orders.

Are you eligible?

To be eligible under the existing guidelines, employees must be in government service as of November 30 of the current year. They must also have rendered at least four months of satisfactory service up to that date, with paid leave included in the computation.

Those who have rendered less will be entitled to a pro-rated PEI, including part-time employees who are entitled to receive separate grants if they have two or more agencies of employment.

For employees who permanently transferred from one agency to another, the PEI will be granted by the new agency, whereas the parent agency retains authority for employees on temporary assignment to another agency.

Meanwhile, a retiree with an approved service extension as of November 30 can still receive the PEI if they meet the other requirements.

Employees with ongoing administrative or criminal cases can also get the PEI. If they are later found guilty, they must return the PEI for that year. If they only received a reprimand, they can keep it.

GOCCs under DBM, LWDs, and LGUs may receive a PEI of up to P5,000 if they meet other requirements, but if their funds are limited, a lower uniform amount may be granted to all employees.

For GOCCs covered by Republic Act No. 10149, the PEI will follow separate guidelines issued by the Governance Commission for GOCCs.

Where does the fund come from?

The PEI is funded from each agency’s own budget. The national agencies use their appropriations or if needed, the Miscellaneous Personnel Benefits Fund. Meanwhile, LGUs use their local funds as long as they stay within Personal Services limits. GOCCs, on the other hand, use their corporate operating budgets and must not borrow or use extra government funds for their PEI. – Rappler.com