program ON RationalizING and

ImprovING Public Service Delivery



Section 1: The Rationalization Program



1.   What is the Rationalization Program?


The Rationalization Program is a move to transform the Executive Branch into a more effective and efficient government. It aims to:


    focus government efforts on its vital functions and channel government resources to these core public services; and


    improve the efficiency of government services, within affordable levels, and in the most accountable manner. 


2.   Why do we need to rationalize government operations?


Government has to put its house in order.


Over the years, government had the tendency to over-expand and self-perpetuate in almost every area of need of society. These areas have become regular government priorities and responsibilities. This situation results in a thin spread of government resources to a variety of concerns, especially in areas where government support is highly desirable, such as peace and order, national security and social services, among others.


Government also has to keep pace with changing demands and technologies. What may have been a relevant undertaking for the government a number of years ago may no longer be necessary at the present time.


For example, certain administrative functions done in the past require a number of clerks. With the advent of computers, these same tasks may need a lesser number of personnel.


Moreover, global and private sector developments may now require different regulatory frameworks. Some areas may need new regulations while other existing regulations have become counterproductive to sector growth.


Hence, government has to review its operations to remove redundancies/overlaps/duplication and improve its operations. In addition, the people are demanding better public services and more value for their money.


3.   Is the Rationalization of the bureaucracy the only solution?


No. There are other strategies being pursued to improve the quality of government service delivery.  Some of these are the institutionalization of a performance-based management system, streamlining of systems and procedures, and further improvement of the governance of the government corporate sector. However, the Rationalization Program is a refocusing and strengthening effort to transform the bureaucracy into a government that works for the people.


4.   How will the Rationalization Program make the government more effective?


Through the Rationalization Program, government will be able to eliminate redundancies in its operations and focus its resources on its vital functions. The bureaucracy can concentrate on work that must be done by government.



5.   How will the Rationalization Program make government more efficient?


It could minimize, if not eliminate, overlaps and duplications, and improve on its systems and procedures.


6.   What are the benefits of this Program?


Through the Rationalization Program, the following are expected to be achieved:


Strengthened vital government functions


More resources to fund priority programs and  projects of the government


Improved and faster service delivery


More satisfied clients of government services


Increased morale among government employees


7.   What are the myths and truths about the Program?


Myth #1: The Rationalization Program is about eliminating jobs to cut the budget deficit.


The truth is, the Program aims to improve government effectiveness by doing and spending on the right things, improving efficiency by eliminating overlaps/duplication, and improving accountability for performance. The savings that may be generated from the effort would also be retained in the departments/agencies to fund additional maintenance and other operating expenditures for their operations.


In some cases, the Rationalization Program may result  in the redeployment of government personnel from redundant to vital functions.


Myth #2: The Rationalization Program is an Early Retirement Program for all.  


The truth is, only those whose functions have been declared redundant will be given the option to avail of retirement/separation benefits with applicable incentives, if they choose not to remain in government service and be placed to other agencies.


8.   What is the coverage of the Program?


The Rationalization Program covers all Departments of the Executive Branch and their units/bureaus, including all corporations, boards, councils, commissions, task forces and all other agencies attached to or under their administrative supervision.


While it is not mandatory, Constitutional Offices, the Legislature, Judiciary, and State Universities and Colleges may voluntarily apply the parameters of the Program, if they opt to review their respective operations and organization.


9.   When will it be implemented?


The Program officially starts upon the effectivity of the Implementing Rules and Regulations (IRR) of EO 366 dated 04 October 2004. 


10.How would the rationalization effort be carried out?


All Departments and agencies would have to organize a change management team (CMT) with a union or rank and file representative. The CMT would be responsible for conducting a strategic review of their respective operations and organization to identify functions, programs and projects which can be scaled down, phased out or abolished, or those which need to be strengthened.


11.Where would the savings from this effort go?


Savings from Personal Services to be derived from this undertaking would be retained in the Department/Agency and may be used to fund the priority programs and projects under the Ten-Point Agenda of the Administration and the salary increases/incentives of government personnel, subject to guidelines to be issued by the DBM, without prejudice to the Collective Negotiation Agreement (CNA) of the Department/ Agency.



Section 2: The Possible Effect on Personnel


12.Who are the personnel who may be affected by the Program?


Personnel who occupy positions performing functions that would be declared non-core/overlapping/irrelevant or redundant may be affected by the Program.


13.How would one know that she/he is affected?


After the strategic review, personnel assigned to functions, programs, projects and units that will be affected by the Rationalization Program would be given due notice of the action to be taken regarding his/her employment at the earliest possible time, but not later than ten (10) working days prior to the submission of his/her agencys Rationalization Plan to the DBM.




14.What are the options for affected personnel and the time period allotted for availment of said options?


Affected personnel, upon receipt of the notice of the action to be taken regarding their employment, would be given two (2) months within which to decide on any of the following options:


       Option 1  - remain in government service, if with permanent appointment; or


       Option 2  -   avail of retirement/separation benefits, if qualified, plus the applicable incentive.


15.Could affected employees with temporary appointment opt to remain in government service?


All personnel with temporary appointment attested by the Civil Service Commission (CSC) may opt to remain in government service. However, they are guaranteed tenure for the period of the validity of their appointment only.


16.Are contractual/casual employees entitled to separation/ retirement benefits?


Contractual/casual personnel, with appointments attested by the CSC and whose functions would be affected, would be allowed to avail of the benefit package provided under the Program.


17.Can affected personnel continue to stay in his/her agency?


As part of the Rationalization Plan, the Department Secretary may propose the transfer of qualified personnel to some of the vacant positions in core functions/offices/units. The proposal should be incorporated in the Plan.

18.How can an affected personnel who opts to remain in government service avail of the placement mechanism that would be administered by the CSC?


A list of vacant positions in priority/frontline agencies will be prepared and released by the CSC.


Affected employees with permanent or temporary appointment who would choose to remain in government service would be asked to submit three (3) priority agencies for reassignment (from the list to be prepared by the CSC) to his/her Agency Personnel Officer. In case an employee would want to be reassigned to an area outside of his/her present province/region of assignment, he/she should also indicate the preferred area of reassignment.


Within a 2-month period, the CSC would then match, among others, the position, qualifications, and skills of the affected personnel with the needs of the priority agencies for reassignment that the affected personnel had identified. 


In case no match can be found in the priority agencies for reassignment, the CSC would then look for a match in other priority agencies where additional personnel are required.


19.Where would the affected personnel report while the CSC is looking for a match?


The affected personnel would remain with his/her agency within the two-month period while the CSC is looking for a match in the priority agencies for reassignment or other agencies needing additional personnel.





20.What would happen if the affected personnel is not placed within the 2-month period?


      If the affected personnel is not placed by the CSC after the two-month period, he/she shall be transferred to the CSC office nearest to his/her residence and remain in the CSC manpower pool until a match is found.


21.Can affected personnel be placed to local government units (LGUs)?


After satisfying the requirements of National Government agencies, the CSC may explore the possibility of reassigning affected personnel to LGU-administered schools and hospitals.


22.Who will pay for the compensation of affected personnel who will be placed in the CSC pool?


      The compensation of the affected personnel who will be placed in the CSC manpower pool would be transferred by the DBM from their mother agency to the CSC.


23.Who will pay for the compensation of affected personnel who would be redeployed?


The compensation of the redeployed personnel would be transferred by the DBM to the recipient agency, except for those reassigned to LGUs, in which case their compensation shall remain with the CSC.


24.What are the other guidelines in the placement of affected personnel?


       There would be no diminution in the salary of the affected employees who would be placed in other agencies. They would have full rights to all the benefits which may be available to other government employees, except for certain allowances that used to be given corresponding to the performance of specific functions which would no longer form part of their new functions.


       The position of the transferred personnel in the recipient agency would be co-terminus with the incumbent, meaning, it would be abolished only once the incumbent retires or resigns, transfers to another agency or LGU, or is appointed or promoted to a position in the recipient agency.


       The placement of personnel pursuant to this Program would be exempt from existing prohibitions on hiring/redeployment that may be contained in any Presidential issuance at the time.


25.What would happen to an affected employee who, after having been placed by the CSC, objects to his/her new job assignment?


If a match has been found by the CSC and the affected personnel who chose to remain in government service objects to his/her new job assignment, he/she would be deemed separated/retired and would be paid retirement or separation benefit, whichever is applicable under existing laws, without the corresponding incentive.


26.What are the retirement/separation or unemployment benefits available for affected employees who would choose Option 2 or voluntarily retire/separate under the Program?


A.Retirement gratuity provided under RA 1616 plus the refund of retirement premiums, without incentive;


B.                                                                                    Retirement benefit provided under RA 660 plus the applicable incentive;


C.                                                                                   Applicable retirement, separation or unemployment benefit provided under RA 8291 plus the applicable incentive; or


D.                                                                                   Separation gratuity under RA 6656, unemployment benefit under RA 8291, plus the appropriate incentive.


27.Who can avail of the following and what are their benefits under each retirement law?


RA 1616


A.   Qualifications


                                                   Those who are in the government prior to 31 May 1977.


                                                   Those who have rendered at least 20 years of service regardless of age and employment status.


                                                    Affected personnels last 3 years of service prior to retirement must be continuous, except in cases of death, disability, or abolition/phase-out of position due to reorganization.


B.  Benefits


Gratuity benefit to be paid by the last employer based on total creditable service multiplied by the highest compensation received. Gratuity benefits shall be as follows:


a)                                                                           1 month salary for every year of service for the first 20 years of service;


b)                                                                           1 months salary for every year of service for the next 10 years up to 30 years of service; and


c)                                                                           2 months salary for every year of service in excess of 30 years of service.


Refund of the retirees personal contributions with interest and the corresponding government share without interest to be paid by GSIS.


RA 660


A.  Qualifications


       Those who have rendered 30 years of service and who are 57 years of age.


The combinations of age and service requirements of those who may avail of RA 660 are shown below:

































                                                                    Those whose last 3 years in service is continuous and has made contributions for at least 5 years, except in cases of death, disability, or abolition/phase-out of position due to reorganization and in the government prior to 31 May 1977.


                                                                    Those whose appointment is permanent in nature.


B.  Benefits


Retirees aged 57 and below shall receive a maximum pension of 75% of his/her Average Monthly Salary (AMS) and retirees above 57 years old shall be entitled to a maximum monthly pension of 80% of his/her AMS. The retirees could avail of said benefits in accordance with the following guidelines:


       Automatic Pension Retirees below 60 years old shall be qualified to a monthly annuity guaranteed for 5 years with option to request for a one-year lump sum  every six months, and monthly annuity for life after the 5-year guaranteed period.


       Initial Three-Year Lump Sum Those who are at least 60 years old but less than 63 years old on the date of retirement shall receive a 3-year lump-sum payment. The subsequent 2-year lump sum shall be paid on his 63rd birthday, and a monthly annuity for life after the 5-year guaranteed period.


       Five-Year Lump Sum Those who are at least 63 years of age or over on the date of retirement shall receive a 5-year lump-sum payment, and a monthly annuity for life after the 5-year guaranteed period.


RA 8291


1. Retirement Benefit


A.  Qualifications


                                                                   Those who have rendered at least 15 years of service and must be at least 60 years of age.


       They are not receiving monthly pension benefits due to  permanent total disability.


B.  Benefits


Under RA 8291, those who have rendered at least 15 years of service and who are at least 60 years of age at the time of retirement and who are not receiving a monthly pension benefit from permanent total disability have the option to avail of:


A 5-year lump sum equivalent to 60 months of Basic Monthly Pension (BMP), plus a lifetime monthly pension to be given five (5) years after the effectivity of retirement; or


Cash payment of 18 months of his/her BMP and a monthly pension for life starting immediately upon retirement.


2. Separation Benefit


A.  Qualifications


       Those who have rendered at least 3 years of creditable service and below 60 years of age upon separation.


B.  Benefits


For a member with at least 3 years but less than 15 years of service


Cash payment equivalent to 100% of the Average Monthly Compensation (AMC) for every year of service he/she paid contribution but not less than P12,000, payable upon reaching the age of 60 or upon separation, whichever comes later


For a member with at least 15 years of service and less than 60 years of age upon separation


Cash payment equivalent to 18 times the BMP payable at the time of resignation or separation and old-age pension for life upon reaching the age of 60

3. Unemployment Benefit


A.  Qualifications


                                                                      Those who were permanent employees at the time of separation and have rendered less than fifteen (15) years of service.


                                                                      Their separation is involuntary due to the abolition of his/her office or position usually resulting from reorganization.


                                                                      They have been paying contributions for at least 1 year prior to separation.


B.  Benefits


Unemployment benefit is in the form of monthly cash payments equivalent to 50% of the AMC. Benefits shall be paid in accordance with the following schedule:


Contributions Made

Benefit Duration

1 year but less than 3 years

2 months

3 or more years but less than 6 years

3 months

6 or more years but less than 9 years

4 months

9 or more years but less than 11 years

5 months

11 or more years but less than 15 years

6 months


RA 6656


A.  Qualifications


                                                      Those with less than (3) years of government service.




B.  Benefits


Employees who have less than 3 years of service are entitled to a separation gratuity equivalent to 1 month salary for every year of service. They are also entitled to the unemployment benefit under RA 8291 in accordance with the preceding table.


28.What does the incentive package under the Rationalization Program offer for affected personnel?


Except for those who choose to retire under RA 1616, affected personnel who would opt to retire/be separated from government service shall be given incentive benefits as follows:


       of the present monthly basic salary for every year of government service, for those who have rendered less than 21 years of service;


       of the present monthly basic salary for every year of government service, computed starting from the 1st year, for those who have rendered 21 to less than 31 years of service; and


       the present monthly basic salary for every year of government service, computed starting from the 1st year, for those who have rendered 31 years of service and above.


For the purpose of computing the total amount of incentive that an affected personnel would receive, only his/her government service up to age 59 and a fraction thereof would be counted. Thus, government service starting at the age of 60 would no longer be subject to the incentive to be provided under the Program.


29.What would be the lowest benefit that an employee could receive?


Under the Program, one who opted for retirement/separation shall receive no less than Fifty Thousand Pesos (P50,000) as  his/her retirement/separation gratuity/unemployment/ incentive benefit from both the National Government and the GSIS.


On the other hand, separate guidelines on the incentives and related retirement/separation benefits that would be received by employees of agencies and GOCCs/GFIs exempted from or not following the Salary Standardization Law would be issued.


30.How is the incentive computed?


        The incentive of the employee would be computed as follows:


                                I = IF x BMS x Y









Incentive factor of 0.50 mo./y, 0.75 mo./y, or 1.00 mo./y, as the case may be



Present basic monthly salary of the employee



Length of government service in years, months and days converted in years  


        To convert a given number of months into year, divide the number of months by 12 months. To convert a given number of days into year, divide the number of days by 264, which was derived by multiplying 22 days/month by 12 months/year.


        Sample Computation 1:




P 8,139 (SG 7)



20 years



Less than 60 years old






P 81,390


        Sample Computation 2:




P 16,792 (SG 19)



25 years



Less than 60 years old






P 314,850


Sample Computation 3:




P 20,823 (SG 24)



37 years



62 years old






P 707,982*

* Service starting at age 60 no longer subject to incentive


31.When would the benefit package be available to affected personnel?


The retirement/separation package would be available as soon as an affected employee decides to retire/be separated. However, it would still be available up to two (2) months after the Presidents approval of the Rationalization Plan of his/her Department/Agency.





32.How soon can the affected personnel receive the benefit package from the GSIS/National Government?


The affected personnel would receive the incentive from the National Government and the benefit package from the GSIS on the day of his/her retirement/separation, provided that their properly accomplished application for retirement/separation has been approved/attested by the Agency Head and the complete set of required documents have been submitted to the GSIS at least one (1) month prior to the date of retirement/separation.


In this regard, the Department/Agency should fasttrack the reconciliation and updating of the service records and accounts of all affected personnel with the GSIS to ensure that they would receive their benefits on time.


33.Is the payment of the benefits one-time or on staggered   basis?


Incentives would be given on a one-time basis but benefits under existing retirement/separation laws would follow the provisions of the specific applicable laws.


34.Are there other benefits that would be provided for those who would avail of retirement/separation?


Yes. In addition to the aforementioned benefits, the affected personnel who would opt to retire or be separated would be entitled to the following:


       Refund of Pag-IBIG Contributions. Affected personnel who are members of the Pag-IBIG would be entitled to the refund of their contributions (both personal and government), pursuant to RA 7742 (An Act Amending Presidential Decree No. 1752, as amended) and in accordance with existing rules and regulations of the Home Development Mutual Fund.


       Commutation of Unused Vacation and Sick Leave Credits. The affected personnel would be entitled to the commutation of unused vacation and sick leave credits in accordance with existing rules and regulations.


       Commutation of Accumulated Compensatory Overtime Credits. In case affected personnel who opted to retire/be separated have accumulated compensatory overtime credits (COCs), they shall be allowed to monetize the same, subject to the guidelines provided under the CSC-DBM Joint Circular No. 2 dated 04 October 2004. In no case shall the COCs to be monetized exceed 120 hours.


35.How assured are the affected personnel who opted to retire/be separated of being paid of their incentives on time by the National Government?  


The DBM will provide a seed fund to departments/agencies upon submission to the DBM of their respective Rationalization Plans containing the list of personnel opting to retire/be separated with the computation of the incentives that they are entitled to receive.


36.Aside from monetary benefits, will there be other assistance programs for affected personnel who would opt to retire/be separated?


Yes. There are alternative livelihood and counseling programs available to personnel who would opt for retirement/separation.


The Change Management Team, through the Head of the Agency, could work out on the requirements of affected personnel who may want to avail of skills development, livelihood/entrepreneurial, credit and investment management,  job facilitation and counseling programs with the agencies concerned.


For functions which are to be outsourced, the retiring personnel could form themselves into associations, cooperatives, service corporations or the like in the pursuit of livelihood/business opportunities in government agencies. The government agencies concerned could provide them assistance to enable them to compete in the award of contracts for services that are outsourced by any agency of government. 


37.Who shall be responsible for this assistance program to affected personnel?


The Department/Agency heads could arrange for the skills/livelihood, credit, investment, job facilitation and counseling programs to be availed of by the affected personnel with the government agencies concerned.  The DBM/CSC Rationalization Team, in partnership with public sector unions, may be tapped to facilitate the conduct of said programs.


38.What are the government agencies involved in the provision of skills/livelihood, investment and job facilitation programs to personnel who may be affected by the effort?


The DBM/CSC have tapped various government agencies to be part of a Skills/Livelihood and Investment Program Team for the purpose. The Team has been grouped into three (3), namely, Job Generation, Job Facilitation and Fund Management.


The Jobs Generation Group will provide trainings and financial assistance for affected employees who intend to start a business of their own. It is composed of the following agencies:


a. Skills and livelihood training


q       Bureau of Small and Medium Enterprise Development, Department of Trade and Industry

q       Technical Education and Skills Development Authority

q       Technology and Livelihood Resource Center


b. Cooperative Organization


q       Cooperative Development Authority


c. Credit Assistance


q       Small Business Guarantee and Finance Corporation

q       Quedan and Rural Credit Guarantee Corporation

q       Peoples Credit and Finance Corporation

q       National Livelihood Support Fund

q       Land Bank of the Philippines


The Job Facilitation Group shall assist affected personnel  seeking employment opportunities in the private sector, whether local or overseas. The group is composed of:


q       Bureau of Local Employment, Department of Labor and Employment

q       Philippine Overseas Employment Administration


The Fund Management Group shall provide information and guidance regarding investment/financial products, as well as trust services. The group is composed of the following:


q                                      Land Bank of the Philippines

q                                      Development Bank of the Philippines

q                                      Bureau of the Treasury


39.Could those retired/separated personnel be allowed to seek employment in other government agencies?


Government personnel who retire or are separated as a result of the rationalization effort would not be allowed to be appointed or hired in the Executive Branch within a period of five (5) years, except in educational institutions and hospitals.  Aside from that, reemployment in any Branch of Government would be considered as new entry to the civil service.


Provision of consultancy services by personnel who voluntarily retired/separated shall be governed by Section 7 of RA 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees dated 20 February 1989.



Section 3: The Administrative Mechanism on Grievance and Appeal


40.Is there a mechanism to hear the issues and concerns of affected personnel on the Rationalization Program?


Yes. The Change Management Team in every department/agency would set up an internal mechanism that would hear and settle the issues and concerns that may be raised by personnel who may be affected by the effort.


41.Where would the affected personnel submit their issues/concerns?


Issues and concerns may be submitted to the CMT within five (5) working days from notification that a position is affected. The CMT would resolve the issue(s)/concern(s) within five (5) working days.  Unsettled issues would be documented and noted in the Rationalization Plan.


An appeal may be filed by an affected personnel with the Department/Agency Head within ten (10) working days from the submission of the Rationalization Plan to the DBM. The Department/Agency Head would render a decision within fifteen (15) working days from filing of the complaint.


42.Could affected personnel further file an appeal if he/she is not satisfied with the decision of the Department/Agency Head?


Affected personnel may further appeal the decision of the Department/Agency Head with the CSC within ten (10) working days from approval of the Plan by the President. The CSC would render a decision within thirty (30) working days from filing of the appeal.


43.What actions may be the subject of complaints and appeals?


      Deviations from Sections 3 and 4 of RA 6656 on the order of placement;


      Actions implemented which are not in the approved Rationalization Plan; or


      Violations of the provisions of the IRR.


44.What actions are not appealable to the CSC?


      The declaration of what functions are to be abolished or merged; and


      For those who opted to remain in the service, their placement in another agency.


For more information about the Rationalization Program, you may approach your designated CMTs or you can contact the following offices:






USec. Laura Pascua

Dir. Amelita Castillo




Dir. Anicia De Lima



EVP Enriqueta Disuanco

VP Robert Agustin




SVP Emma Linda Faria



Engr. Beato Gri arte



Dir. Agripina Zafra



Dir. Nonie Hernandez



Ms. Wenda Orejola

810-5791 loc. 1776


Ms. Marissa Caparaz



Ms. Ma. Corazon Victoria Magkalas

890-5333 loc. 707


Ms. Raquel Castro


LBP-Trust Banking Group

VP Roberto Vergara


LBP-Program Management Department

Ms. Cressida Alday-Mendoza



First VP Manuel Banayad



Dir. Ma. Luisa Gigette Imperial

Ms. Milbeth Cortes

Ms. Evelyn Dacumos





Dep. Adm. Carmelita Dimzon

Mr. Carlos Canaberal