MANILA (Reuters) - Philippine President Benigno Aquino on Friday signed an order raising the 2016 compensation of more than 1.3 million government workers, which should benefit domestic consumption, a key driver of economic growth.
Aquino approved the pay increases, the first for government workers since 2009, less than five months before he steps down from office because of term limits.
“The executive order effects compensation adjustments for this year,” Budget Secretary Florencio Abad said in a statement.
“This action by the president leverages the benefits package in order to increase the take-home pay of government employees.”
Abad said Congress had already appropriated 57.9 billion pesos ($1.22 billion) in the 2016 national budget for this year’s pay increases.
Increases in pay and allowances for government workers in the Philippines could boost domestic demand and offset a slowdown in remittances, said Michael Wan, a research analyst at Credit Suisse.
However, Congress ended its session this month without passing legislation to adjust the compensation of uniformed personnel and civil servants, including senior Cabinet ministers, from this year to 2019.
Investors are closely watching this year’s presidential elections, as the Philippines under Aquino has racked up annual growth of more than six percent on average, its best five-year record in four decades.
The latest poll puts Vice President Jejomar Binay, who favors amending the constitution to allow foreign ownership of land and income-tax cuts, five points ahead of contenders Senator Grace Poe and southern Davao City Mayor Rodrigo Duterte, who tied for second place.
Manuel Roxas, Aquino’s choice of successor, comes in a distant third in the February Social Weather Stations survey.
More than 54 million Filipinos will choose a new president and vice president at the May 9 election, besides about 300 lawmakers in the two-chamber Congress and about 18,000 local government positions.
Reporting by Manuel Mogato; Editing by Clarence Fernandez