Following three pay freezes in the last six fiscal years, sources said the government has allocated funds in preparation for a potential salary increase for civil servants.
It came after Financial Secretary Paul Chan Mo-po revealed on Wednesday that a Pay Trend Survey will be conducted this year as part of the established mechanism for civil service pay adjustments.
The factors include the city's economic conditions, changes in the cost of living, the government's fiscal position, the net pay trend indicator, staff-side pay claims and overall civil service morale.
Insiders revealed the move stems from the unexpected rapid improvement in the city's fiscal situation.
The results of the Pay Trend Survey are expected to be released in May, after which the Chief Executive-in-Council will make a final decision based on the six factors under the established mechanism.
In response to whether recent incidents involving civil servant performances, such as the water procurement scandal, would be factored into this decision, sources affirmed that all relevant factors would be assessed comprehensively.
Sources declined to specify the amount allocated for potential civil servant pay rise, noting that "appropriate provisions" would be made during the budgeting process.
When asked whether last year's financial situation could serve as a benchmark for a potential pay freeze, the source emphasised that each year is different and that the government follows the established mechanism.
As for the incremental point system, sources explained that increments are granted based on supervisors' performance evaluations, in line with last year's Policy Address.
Under the stringent appraisal system, it is suggested that the government rates civil servant performance on a six-level scale, where officials may order early retirement for those who consistently receive the lowest ratings.
Highlighting the government's commitment to managing the civil service, the sources added that the number of civil servants being denied annual increments has risen in recent years, from 12 cases in 2023 to 38 in 2025.
