SECTION 325. General Limitations.

– The use of the provincial, city, and municipal funds shall be subject
to the following limitations: (a) The total appropriations, whether annual or supplemental, for personal
services of a local government unit for one (1) fiscal year shall not exceed forty-five percent (45%) in the
case of first to third class provinces, cities and municipalities, and fifty-five percent (55%) in the case of
fourth class or lower, of the total annual income from regular sources realized in the next preceding
fiscal year. The appropriations for salaries, wages, representation, and transportation allowances of
officials and employees of the public utilities and economic enterprises owned, operated, and
maintained by the local government unit concerned shall not be included in the annual budget or in the
computation of the maximum amount for personal services. The appropriations for the personal services
of such economic enterprises shall be charged to their respective budgets;

Please Take note that Step increment is the increase in salary from step to step within the salary grade of
a position. step increments shall be granted based on merit and/or length of service in accordance with
rules and regulations that will be promulgated jointly by the DBM and the Civil Service Commission.
Promotion on the other hand is the advancement of an employee from one position to another with an
increase in duties and responsibilities as authorized by law and usually accompanied by an increase in
salary.

The grant of step increment based on Merit and Performance shall be in lieu of the Productivity
Incentive Benefit. (CSC-DBM Joint Circular No. 1, Series of 2012 or the “Rules and Regulations on the
Grant of Step Increment/s Due to Meritorious Performance and Step Increment Due to Length of
Service.”)

The rule is clear that public social workers are entitled to longevity pay regardless of the number of
promotions they got within the period commencing with the service provided they complied with the
requirements to have a continuous, efficient, and meritorious service.

the grant is subject to limitations.

, while the grant of Step Increment due to length of service is integrated into the salary of every
employee in addition to the Longevity pay per year granted.
Hence, in order to comply with the policies and guidelines provided under R.A. No.
9433, the Provincial Administrative Code of Palawan must be amended.