The Philippine Government’s Energy Conservation Measures Under Memorandum Circular No. 114 And Their Potential Impact On The Private Sector

In light of ongoing geopolitical tensions in the Middle East and the resulting volatility in global energy markets, the Philippine President issued Memorandum Circular No. 114, directing national government agencies, including government-owned or controlled corporations, to adopt energy conservation measures.

Scope and Key Measures Under Memorandum Circular No. 114

Memorandum Circular No. 114 is a cost-management measure aimed at reducing the energy footprint of government operations in a country that is heavily reliant on imported energy. Under the Circular, all agencies and instrumentalities of the national government are directed to adopt energy conservation protocols. Meanwhile, local government units, constitutional bodies, state universities and colleges, and other government instrumentalities are encouraged to adopt similar measures, subject to operational requirements. 

These measures include maintaining air-conditioning at 24°C and minimizing the use of non-essential equipment, limiting official travel and prioritizing virtual meetings, implementing fleet-efficiency and other energy-saving measures and reducing electricity and fuel consumption by 10% to 20%. 

In addition, agencies are required to adopt a four-day onsite work arrangement, either through a compressed workweek or by designating a work-from-home day. This arrangement is intended to reduce building energy load and transport-related fuel consumption and took effect on 9 March 2026 as an interim measure, to remain in place until lifted or revoked by the President. 

The Circular also requires agencies to implement these measures without interrupting the delivery of essential government services.

 What It Means for Private Employers

For private employers, the implementation of Memorandum Circular No. 114 may carry practical implications, particularly for those regularly transacting with public agencies.

With government offices operating under a four-day onsite work arrangement, adjustments in processing timelines, personnel availability, and coordination with regulatory bodies may be expected.

In this regard, private employers may wish to factor these changes into their operational timelines, particularly when engaging in regulatory filings, permit applications, inspections, and other time-sensitive transactions.

Beyond these operational considerations, however, the same economic pressures underlying the issuance of Memorandum Circular No. 114 should also prompt a reassessment of workplace arrangements and cost-management strategies within the private sector.

Although Memorandum Circular No. 114 does not extend to private establishments, private employers are not immune to the same cost pressures. Accordingly, similar operational measures may be considered, provided that these are implemented in accordance with labor laws.

Adoption of Hybrid Work Arrangements

While Memorandum Circular No. 114 does not favor a particular approach, private employers may first consider adopting hybrid work arrangements as the least intrusive and most readily implementable measure. Hybrid arrangements allow employers to designate certain days for employees to work remotely or at home while maintaining the standard eight-hour workday, thereby reducing on-site consumption of energy and transport-related costs without necessitating changes to working hours or compensation structures. Hybrid arrangements may be voluntarily adopted and implemented by the employer. At the same time, Section 5 of the implementing rules and regulations of the Telecommuting Act provides that the terms and conditions of the telecommuting arrangement may be set out in a company policy, employment contract, or such other form as is convenient to the parties, with evidence of employee acceptance. If no particular changes to working hours, compensation, or core terms of employment are likely to be involved, such arrangements are therefore generally easier to implement and sustain from both a legal and practical standpoint.

Adoption of Compressed Workweek (CWW)

For employers seeking more structural adjustments to work arrangements, the adoption of a CWW arrangement may likewise be explored.

While hardly a new or extraordinary measure, this long-recognized alternative work arrangement under DOLE Department Advisory No. 02, Series of 2004 has gained renewed relevance under present conditions.

Under a CWW scheme, the number of workdays is reduced while total weekly working hours remain unchanged. Employees may therefore work more than eight (8) hours per day without overtime premium, provided that total weekly hours remain within applicable limits. As a general guide, daily working hours under a CWW should not exceed twelve (12) hours, subject to sector-specific regulations, including those applicable to healthcare and other regulated industries.

This constitutes a recognized exception to the general rule that work beyond eight hours is compensable as overtime.

For a CWW scheme to be validly implemented, it must be based on the express and voluntary agreement of the majority of the covered employees. Individual consent must still be respected, and employees who do not agree cannot be compelled to participate.

For employees who do not consent, continued implementation of the standard work schedule remains the most defensible approach. Alternatively, reasonable work reassignments or adjustments may be explored, provided that these do not result in diminution of pay or benefits or otherwise prejudice the employees concerned.

In addition, employers must notify the DOLE Regional Office of the arrangement using the prescribed report form. Proper compliance is essential, as failure to meet these requirements may expose the employer to overtime pay liabilities.

Other Practical Measures Employers May Consider

Private employers may also consider other lawful operational adjustments, depending on business requirements, including but not limited to: reviewing overtime practices as part of cost management, limiting non-essential travel or meetings and developing internal energy conservation policies, such as regulating temperature and equipment usage.

Caution should be exercised, however, in adopting measures that directly affect employee compensation or benefits, as these may raise compliance issues if implemented without proper legal basis or employee consent.

Any such measures are best implemented with due regard to labor standards and in a manner that minimizes potential disputes.

Conclusion

Memorandum Circular No. 114 may apply only to the public sector, but it reflects a broader reality across workplaces: rising fuel and electricity costs are driving operational adjustments, for which work arrangements may serve as a practical response.

Consistent with the Circular’s four-day onsite work arrangement, which may be implemented either through a compressed workweek or a designated work-from-home day, hybrid work arrangements emerge as a practical and less intrusive parallel measure for private employers, while more structured alternatives such as compressed workweek arrangements remain available subject to applicable legal requirements.

Even though telecommuting arrangements under the Telecommuting Act were not designed specifically to address the current issue on rising oil and energy costs, their underlying purpose of promoting flexible, technology-enabled work arrangements that support employee welfare and productivity makes them especially relevant today.

Similarly,  the CWW arrangement under DOLE Department Advisory No. 02, Series of 2004 was not designed specifically for current energy pressures, the rationale behind it, which is to improve efficiency while managing costs, makes it also a viable option.

These established and lawful workplace arrangements are therefore at the private employers’ disposal as practical tools to manage operational costs, support broader energy conservation efforts, and help employees reduce transportation and related daily expenses.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.