AN ACT OPTIMIZING THE NATIONAL GOVERNMENT FOR EFFICIENT PUBLIC SERVICE DELIVERY

Nineteenth Congress
First Regular Session

Begun and held in Metro Manila, on Monday, the twenty-fifth day of July, two thousand twenty two.

[ REPUBLIC ACT NO. 12231, August 04, 2025 ]

AN ACT OPTIMIZING THE NATIONAL GOVERNMENT FOR EFFICIENT PUBLIC SERVICE DELIVERY

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. - This Act shall be known as the "Government Optimization Act".

Section 2. Declaration of Policy. - It is hereby declared the policy of the State to promote and maintain effectiveness, efficiency, economy, equity, and ethical accountability in the government, enhance institutional capacity to improve public service delivery; and ensure the attainment of the country's societal and economic development goals and objectives. Consistent with this, the government shall provide adequate resources to support an organization's essential role, scope, and level of governance, and minimize, if not eliminate, redundancies, overlaps, and duplications in its operations and simplify its rules and regulations, systems and processes, while protecting the welfare of civil servants and other government workers.

Section 3. Definition of Terms. - As used in this Act:

Section 4. Coverage. - This Act shall cover all agencies of the Executive Branch, including departments, bureaus, offices, commissions, boards, councils, and all other entities attached to or under the administrative supervision, and government-owned or -controlled corporations (GOCCs) not covered by Republic Act No. 10149 or the "GOCC Governance Act of 2011".

The following positions shall be excluded in the coverage of this Act:

Provided, That the agencies to which these excluded positions belong shall ensure that the personnel involved conform with the qualifications and are actually performing the functions of such excluded positions.

The Legislature, Judiciary, Constitutional Commissions, and Office of the Ombudsman may, within their respective authorized appropriations, optimize their respective offices, consistent with the principles and guidelines contained in this Act, and within the parameters of the Unified Position Classification and Compensation System established under Republic Act No. 6758, as amended.

Local government units (LGUs) may also optimize their respective offices, consistent with the governing principles and guidelines contained in this Act and the provisions of Republic Act No. 7160 or the "Local Government Code of 1991", as amended, and subject to their financial capability.

The Governance Commission for GOCCs shall continue to exercise its authority under Republic Act No. 10149 to reorganize, merge, streamline, abolish, or privatize any GOCC, in consultation with the department to which the GOCC is attached.

Section 5. Governing Principles. - The National Government shall implement the GOP in accordance with the following principles:

The appropriate staffing mix shall be determined based on the skills and competencies required to effectively and efficiently carry out the agency mandate and functions.

Section 6. Authority of the President to Optimize the Operations of the Executive Branch. - The President is hereby granted the following authority in optimizing the operations of the different agencies in the Executive Branch:

(a) To pursue the following functions shifts or modifications:

(b) To implement the following organizational and staffing actions, upon determination by the COEB that it is in the best interest of the State to create, reorganize, merge, streamline, abolish, or deactivate agencies, offices, or units:

Section 7. Creation of the Committee on Optimizing the Executive Branch. - There is hereby created a COEB to oversee the implementation of the GOP, pursuant to the provisions of this Act. The COEB shall be convened within thirty (30) days from the effectivity of this Act to commence the exercise of its powers and functions. It shall be composed of the following:

The foregoing may appoint a representative who shall be at least a third (3rd) ranking official of the agency.

A government employee representative, who shall be the Public Sector Labor-Management Council (PSLMC) sectoral labor representative, depending on the agency or unit being considered for optimization, shall also be a member of the COEB.

The COEB shall organize subcommittees composed of experts on government operations, organizational development, and human resource management, with a secretariat for each subcommittee, composed of regular personnel from said agencies, to assist in the performance of its functions.

The DBM shall provide the necessary secretariat services to the COEB and designate focal persons for each subcommittee to ensure effective coordination.

Section 8. Powers and Functions of the Committee on optimizing the Executive Branch. - The COEB shall:

Section 9. Conduct of Strategic Review and Study on the Mandates, Functions, Systems, Operations, and Processes of the Executive Branch. - Within the period prescribed in the IRR, the COEB shall conduct a strategic review and study on the roles, mandates, functions, programs, projects, operations, structures, and manpower complement of the different agencies under the Executive Branch for purposes of:

The conduct of the strategic review and study shall be consistent with the governing principles set forth under Section 5 of this Act and may contain the recommended actions provided in Section 6 of this Act.

Section 10. Prerequisites to Optimization. -

The Optimization Plan may also include the agency's requirement for additional plantilla positions for its qualified casual or contractual personnel, as well as its job order or contract of service workers with a minimum of ten (10) years of continuous service in the agency, subject to a cap or quota as may be determined by the COEB and the existing civil service laws, rules, and regulations, and the CSC-approved Merit Selection Plan of the agency: Provided, That the optimized agency shall not be allowed to hire casual or contractual personnel, as well as job order or contract of service workers within five (5) years from the time the Optimization Plan is implemented.

The organizational review and study, and the Optimization Plan shall be submitted to the COED within the period prescribed in the IRR. The DBM and the CSC may extend, as necessary, assistance to the agencies in the preparation of the Optimization Plan.

The agency shall conduct the organizational review and study, and the Optimization Plan, in consultation with an employee representative, in the following order of preference:

Section 11. Submission of the Optimized Organizational Structure and Proposed Executive Issuances to the President. - Within the period prescribed in the IRR, the COEB shall submit to the President the Optimized Organizational Structure of the concerned agencies and the corresponding executive issuances, taking into consideration the results and findings of the strategic review and study.

Section 12. Submission of the Detailed Optimized Organizational Structure and Staffing Pattern to the DBM. - Agency heads shall prepare and submit to the DBM the Detailed Optimized Organizational Structure and Staffing Pattern (OSSP), including its estimated cost, within the period prescribed in the IRR.

Section 13. Retirement Benefits and Separation Incentives for Personnel Who May be Affected by the GOP. - The affected personnel hired on a permanent basis and with appointments attested by the CSC shall be entitled to retirement benefits and separation incentives.

The actual monthly basic salary shall refer to the affected personnel's salary as of the date of approval of the agency's Detailed Optimized OSSP by the DBM:

Provided, That for the purpose of computing the total amount of separation incentives that affected personnel will receive, only the government service rendered up to age fifty-nine (59) and a fraction thereof will be counted. Government service from the age of sixty (60) will no longer be subject to the separation incentives provided therein, without affecting the original incentive factor determined based on the actual years of service of the affected personnel, as applicable:

Provided, further, That to comply with the required number of years of service under Republic Act No. 8291, the portability scheme under Republic Act No. 7699 or "An Act Instituting Limited Portability Scheme in the Social Security Insurance Systems by Totalizing the Workers' Creditable Services or Contributions in Each of the Systems" may be applied, subject to existing policies and guidelines:

Provided, finally, That affected personnel who retired or were separated from the service as a result of the implementation of the GOP shall not be reemployed in any agency of the National Government, including GOCCs, for a period of five (5) years, except in the exigency of service or as teaching or medical staff in educational institutions and hospitals, respectively.

The number of personnel who will avail of separation incentives under Section 13(b) of this Act shall in no case exceed the number of positions declared for abolition.

The specific guidelines to carry out the provisions of this section shall be prescribed in the IRR of this Act.

Section 14. Other Benefits of Retired or Separated Personnel. - The affected personnel who retired, or were separated from service shall be entitled to the following benefits, among others, under applicable laws:

Section 15. Period of Availability of the Retirement Benefits and Separation Incentives. - The retirement benefits and separation incentives provided under this Act shall be available within sixty (60) days from the issuance of the Notice of Organization, Staffing, and Compensation Action (NOSCA) by the DBM to the concerned agencies.

Section 16. Option for Affected Personnel Who Opt Not to Retire or Separate from the Service. - The affected personnel who opt not to retire or separate from the service shall, if qualified, occupy vacant positions within the agency without reduction in salary.

Alternatively, affected personnel may apply for transfer to other departments/agencies/GOCCs, subject to CSC rules and regulations.

The personnel shall be subject to a reskilling and upskilling program to capacitate them for redeployment.

The personnel movement, including the conduct of reskilling and upskilling, shall be completed within the period approved by the COEB.

Section 17. Non-interruption of Government Service During the Transition Period; Change Management Program. - This Act, or any guidelines, rules, or regulations issued in pursuance hereof, or any initiative related to the implementation of the recommendations under the strategic review and study conducted through the GOP, shall ot operate to suspend or exempt any government office or personnel from compliance with the provisions of Republic Act No. 11032 or the "Ease of Doing Business and Efficient Government Service Delivery Act of 2018".

The agencies shall implement their respective approved Detailed Optimized OSSP in such a manner that government operation will not be delayed or disrupted. For this purpose, agencies affected by the GOP shall be given a period of one (1) year from the approval of the NOSCA to fully implement their respective Detailed optimized OSSPs.

Agencies and personnel shall perform their respective functions, duties, and responsibilities in a holdover capacity until the transition has been completed.

Agencies shall ensure that a change management program is carried out to ensure smooth and effective transition.

Section 18. Joint Congressional Oversight Committee on the Government Optimization Program. - There is hereby created an Oversight Committee to oversee, monitor, and evaluate the implementation of this Act.

The Oversight Committee shall be composed of vie (5) members each from the Senate and the House of Representatives. This shall include the Chairpersons of the Senate Committees on Civil Service, Government Reorganization and Professional Regulation, and Finance, and the Chairperson of the House Committee on Government Reorganization, and Appropriations. The President of the Senate and the Speaker of the House of Representatives shall each designate the remaining three (3) members from the Senate and the House, respectively, one (1) of whom shall be from the minority.

Section 19. Conduct of an Impact Assessment. - The DBM shall commission an independent impact assessment of the GOP to be conducted three (3) years after its completion to determine, among others, the effects and gains of its implementation.

Section 20. Report to Congress. - The President shall submit a report to Congress on the results of the GOP after the completion of its implementation.

Section 21. Provisions Applicable to Other Branches of Government, Constitutional Commission, Office of the Ombudsman, and the LGUs. - The governing principles, policies, standards, guidelines, conditions, and limitations provided in this Act shall be followed in the implementation of the GOP by the other branches of government, Constitutional Commissions, the Office of the Ombudsman, and the LGUs.

The heads of said offices shall issue their respective IRRs and furnish a copy thereof to the Senate Committee on Civil Service, Government Reorganization and professional Regulation, and Finance, the House Committees on Government Reorganization, and Appropriations, and the DBM.

Section 22. Funding Requirements. - The amounts necessary for the initial implementation of this Act shall be charged against any applicable appropriation items under the current GAA, subject to existing budgeting, accounting, and auditing laws, rules, and regulations. Subsequent amounts need to continue the implementation of the GOP shall be included in the annual GAA, subject to usual budgetary process.

In the event that the Legislature, Judiciary, Constitutional Commissions, and Office of the Ombudsman optimize their respective offices in accordance with the provisions of this Act, the funds necessary for this purpose shall likewise be sourced from any applicable appropriations under the GAA.

The amount needed to implement the GOP of GOCCs not covered by Republic Act No. 10149 shall be sourced from their respective corporate funds, In case of funding deficiency, the National Government may assist in the payment of separation incentives of the affected personnel whose salaries and other compensation are covered by Republic Act No. 6758, as amended.

In case the LGUs pursue optimization efforts consistent with the provisions of this Act and Republic Act No. 7160, as amended, the amounts needed for the purpose shall be drawn from their respective local government funds.

Section 23. Sunset Provision. - The authority given to the President under this Act shall end five (5) years after the effectivity of this Act.

Section 24. Implementing Rules and Regulations. - Within sixty (60) days from its convening, the COEB shall issue the necessary rules and regulation for the effective implementation of the provisions of this Act.

Section 25. Separability Clause. - If any provision of this Act is declared unconstitutional, the remaining hereof not otherwise affected shall remain in full force and effect.

Section 26. Repealing Clause. - All laws, presidential decrees, executive orders, letters of instruction, proclamations, or administrative regulations that are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.

Section 27. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.

Approved,

This Act was passed by the Senate of the Philippines as Senate Bill No. 2252 on December 16, 2024 and adopted by the House of Representatives as an amendment to House Bill No. 7479 on January 15, 2025.

Approved: AUG 04 2025

(SGD.) FERDINAND ROMUALDEZ MARCOS JR.
President of the Philippines