G.R. No. 103578 - Allarde vs. Commission on Audit

Petitioner Rodolfo T. Allarde, who served as the Presiding Judge of Branch LXXX of the Metropolitan Trial Court in Muntinlupa, voluntarily resigned (courtesy resignation accepted on January 13, 1987) and subsequently applied for retirement benefits under Republic Act No. 910, as amended by Presidential Decree No. 1438.
In computing his retirement benefits, the Government Service Insurance System (GSIS) included a lump sum amount of P240,000.00 representing a five-year period of a monthly allowance of P4,000.00 that he had been receiving from the Municipality of Muntinlupa during his incumbency as judge.

The Municipality of Muntinlupa, through its Sangguniang Bayan by Resolution No. 90-145 dated April 16, 1990, appropriated the amount of P240,000.00 in the petitioner’s favor.
Despite this appropriation, the petitioner’s additional claim for retirement benefits was denied by the Metro Manila Authority on the ground that allowances previously granted by the municipal government were considered expense items and not part of his compensation, as corroborated by previous similar rulings of the Commission on Audit (COA).

Petitioner filed his claim with the COA on April 4, 1991.
The COA rendered its initial Decision No. 1877 on June 5, 1991, denying the claim on the basis that the allowance was not a compensatory element eligible for inclusion in retirement gratuity.
Following the denial, petitioner filed a Memorandum/Motion for Reconsideration, which led to COA Decision No. 1983 dated November 5, 1991, reiterating the denial of the claim.
A subsequent reconsideration resulted in COA Decision No. 2159 dated January 27, 1992, which again denied his claim, prompting the present petition for review.

The petitioner sought to include the monthly allowance as part of his retirement benefits, anchoring his claim on Section 3 of RA 910 (as amended by PD No. 1438), which entitles retired judges to a lump sum computed as the highest monthly salary plus the highest aggregate of transportation, living, and representation allowances at the time of retirement.
The petitioner, however, failed to demonstrate that the monthly allowance of P4,000.00 fell under any of the eligible categories (transportation, living, or representation allowance), noting that his sample disbursement voucher clearly indicated that it was a reimbursable expense incurred while performing his duties.

Whether the P4,000.00 monthly allowance received by the petitioner from the Municipality of Muntinlupa should be included in the computation of his retirement benefits under RA 910, as amended by PD No. 1438.

Whether the additional allowance, given its nature as a reimbursement for expenses incurred rather than as part of a judge’s salary or compensation, falls within the statutory definition of “allowances” as contemplated under Section 3 of RA 910.
Whether including such an allowance would lead to unjust disparities among judges from different municipalities with varying capacities to provide additional funds.