Government Optimization Act (RIGHTSIZING) Incentives for Affected Personnel

Senate Bill No. 890, also known as the Government Optimization Act, was ratified by the Senate on June 4, 2025. This legislation empowers the President to streamline the executive branch through a five-year rightsizing program aimed at eliminating redundant functions and improving service delivery.

The bill (as filed) provides several incentives for government personnel who may be affected by the rightsizing program:

1. Retirement Benefits: Eligible personnel may opt for retirement benefits under existing laws, such as:

   * Retirement gratuity under Republic Act No. 1616;

   * Retirement benefits under Republic Act No. 660; or

   * Retirement, separation, or unemployment benefits under Republic Act No. 8291.

2. Separation Incentives: In addition to retirement benefits, affected personnel who choose to retire or be separated are entitled to separation incentives based on their years of service:

   * ½ of the actual monthly basic salary for every year of government service for those with less than 11 years of service;

   * ¾ of the actual monthly basic salary for every year of government service for those with 11 to less than 21 years of service;

   * The actual monthly basic salary for every year of government service for those with 21 to less than 31 years of service;

   * 1¼ of the actual monthly basic salary for every year of government service for those with 31 years of service and above.

   A minimum of five years of government service is required to avail of these separation incentives.

3. Other Benefits:

   *Refund of Pag-IBIG Contributions: Affected personnel who are members of the Pag-IBIG Fund are entitled to a refund of their contributions, both personal and government shares, pursuant to existing rules and regulations.

  *Commutation of Unused Leave Credits: All affected personnel are entitled to the commutation of their unused vacation and sick leave credits in accordance with existing rules and regulations.

4. Reemployment Restrictions: Personnel who avail of the retirement or separation incentives are prohibited from reemployment in any agency of the national government, including government-owned or -controlled corporations, for a period of five years, except as teaching or medical staff in educational institutions and hospitals. Reemployment within the prohibited period will require the refund of the separation incentives received on a pro-rated basis.

5. Manpower Pool and Redeployment: Affected personnel with permanent appointments who do not opt for retirement or separation will be placed in a manpower pool managed by the Civil Service Commission (CSC). The CSC, in coordination with other government agencies and relevant private institutions, will retool and deploy these personnel to agencies that require their qualifications, skills, and competencies.

These provisions aim to ensure that the rightsizing program enhances government efficiency while safeguarding the welfare of affected employees.

Senate Bill No. 890, also known as the Government Optimization Act, is a legislative measure passed by the Philippine Senate on June 2, 2025 and was passed by the Bicameral Conference Committee on June 4, 2025. Its primary aim is to streamline the executive branch of the government to enhance public service delivery.

Key Objectives:

• Eliminate Redundancies: The bill seeks to remove obsolete positions and overlapping functions within government agencies.

• Simplify Processes: It aims to simplify rules, regulations, and procedures to make government operations more efficient. 

• Empower the President: The President is authorized to reorganize executive agencies, including scaling down or abolishing certain offices, to optimize performance.

Scope and Exemptions

• Covered Entities: All agencies under the executive branch, including departments, bureaus, offices, commissions, boards, councils, and government-owned or -controlled corporations (GOCCs) not covered by Republic Act No. 10149, are subject to this act.

• Exempted Entities: The legislature, judiciary, constitutional commissions, the Office of the Ombudsman, local government units (LGUs), and teaching-related positions in the education sector are exempted.

Implementation

Committee on Optimizing the Executive Branch (COEB): A committee will be established to oversee the implementation of the optimization program. It will be composed of the Executive Secretary (chairperson), the Secretary of the Department of Budget and Management (co-chairperson), and other key officials.

Duration: The authority granted to the President under this act will be effective for five years from its enactment.

Employee Welfare

Career Advancement: The bill emphasizes that rightsizing is not solely about reducing the workforce but also about creating new positions and opportunities for career growth through upskilling and reskilling.

In summary, the Government Optimization Act aims to create a leaner and more efficient government structure by removing redundancies and simplifying processes, all while considering the welfare and development of government employees.

 LINK: Senate Bill 890 (Rightsizing)