In a significant update for public sector workers, the Philippine government has officially confirmed the release of Salary Tranche 2, scheduled for implementation starting July 2025. This decision, made public in May 2025, reflects the administration’s ongoing commitment to enhancing compensation for civil servants under the Salary Standardization Law (SSL) V.
What Is Salary Tranche 2?
Salary Tranche 2 refers to the second phase of the four-tranche salary increase program mandated by Republic Act No. 11466 or SSL V. This law, which took effect in January 2020, aims to gradually adjust the salaries of government employees to be more competitive with their counterparts in the private sector.
Under Tranche 2, employees across various government offices, including administrative, technical, and executive levels, will receive salary adjustments based on their salary grade and step. The adjustment is calculated to reflect fair market compensation while considering fiscal sustainability.
Breakdown of Salary Adjustments by Position
Below is a simplified breakdown of the average monthly increase under Tranche 2, effective July 2025:
| Position Level | Current Salary (2024) | Adjusted Salary (2025) | Estimated Monthly Increase |
|---|---|---|---|
| Salary Grade 1 | PHP 13,000 | PHP 13,890 | PHP 890 |
| Salary Grade 11 | PHP 27,000 | PHP 28,590 | PHP 1,590 |
| Salary Grade 18 | PHP 42,000 | PHP 44,310 | PHP 2,310 |
| Salary Grade 24 | PHP 72,000 | PHP 75,600 | PHP 3,600 |
| Salary Grade 30 | PHP 120,000 | PHP 126,000 | PHP 6,000 |
These figures are estimates and may vary slightly depending on step increments and specific agency guidelines.
Who Will Benefit?
The adjustment applies to all regular government employees occupying plantilla positions. This includes personnel in national government agencies, state universities and colleges (SUCs), government-owned and controlled corporations (GOCCs), and local government units (LGUs) that have the capacity to fund the increase.
Contractual and job order personnel are not covered by the SSL but may receive separate compensation adjustments depending on agency discretion and availability of funds.
Funding and Implementation
The Department of Budget and Management (DBM) confirmed that necessary budget allocations have been included in the General Appropriations Act for Fiscal Year 2025. Agencies are required to submit their updated Personal Services Itemization and Plantilla of Personnel to ensure timely release.
To manage the fiscal impact, LGUs are given flexibility based on their income classification. High-income cities and provinces are expected to implement the full adjustment, while lower-income municipalities may adopt staggered implementation.
Broader Implications for Government Workforce
This tranche is expected to boost morale and productivity among public workers. It also aims to reduce turnover and attract more qualified individuals to public service roles. The government hopes that by aligning public sector pay with market standards, it can improve overall service delivery and institutional efficiency.
In addition, this increase is seen as a strategy to cushion the effects of inflation on government employees, many of whom have cited rising costs of living as a major concern in recent surveys.
Next Steps: Tranches 3 and 4
While Tranche 2 is confirmed, attention now turns to the next phases. Tranche 3 is slated for implementation in January 2026, followed by the final adjustment in January 2027. These future adjustments will continue to follow the SSL V schedule unless superseded by new legislation.
Conclusion
The confirmation of Salary Tranche 2 is a clear signal of the government’s dedication to public sector reform. By adjusting compensation in line with economic realities, the administration is investing in a more motivated and capable workforce. Public employees and government agencies alike are advised to prepare documentation and systems to accommodate the upcoming changes by July 2025.
FAQs
What is the purpose of Salary Tranche 2?
Salary Tranche 2 is designed to provide competitive pay for government workers, helping align public sector compensation with market rates.
Who qualifies for the salary increase?
Regular government employees in plantilla positions qualify. This includes those in NGAs, SUCs, GOCCs, and eligible LGUs.
Are contractual employees included?
No, they are not automatically included under SSL V. Agencies may, however, grant separate adjustments if funds are available.
When will the new salaries be received?
The new rates will take effect starting July 2025, with adjustments reflected in the July payroll cycle.
What about the next salary tranches?
Tranche 3 is set for January 2026, and Tranche 4 for January 2027, per the SSL V schedule.
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