Facts:

The case involves the Association of Retired Court of Appeals Justices, Inc. (ARCAJI), represented by its President, Teodoro P. Regino, as the petitioner against Hon. Florencio Abad, Jr., the Secretary of the Department of Budget and Management (DBM), as the respondent. The petition was filed on July 10, 2018, seeking a writ of mandamus to compel the DBM to issue the necessary Special Allotment Release Order (SARO) and Notice of Cash Allocation (NCA) for the retirement gratuity differentials of twenty-eight retired Justices of the Court of Appeals (CA). These justices retired between 2005 and 2010, and during the five years following their retirement, several salary increases were granted to incumbent CA Justices due to the implementation of Salary Standardization Law 2 (SSL 2) and Salary Standardization Law 3 (SSL 3). The petitioners claimed that their retirement gratuities, calculated based on their salaries at the time of retirement, should be adjusted to reflect the salar...

Facts:

Retirement of Justices and Salary Increases:
The case involves 28 retired Court of Appeals (CA) Justices who retired between 2005 and 2010. During the five years following their retirement, salary increases were implemented for public sector employees, including incumbent CA Justices, under the Salary Standardization Laws (SSL 2 and SSL 3). These increases were implemented through Executive Orders (EOs) issued between 2007 and 2011.

Claim for Retirement Gratuity Differentials:
The retired Justices argued that their retirement gratuity, computed based on their salary at the time of retirement, should be adjusted to reflect the salary increases granted to incumbents during the five-year period after their retirement. They claimed differentials totaling P23,025,093.75 under Republic Act (R.A.) Nos. 910 and 9946.

DBM's Denial of the Claim:
The Department of Budget and Management (DBM) rejected the claim, stating that the differentials must be sourced from the Special Allowance for the Judiciary (SAJ) Fund, not the Pension and Gratuity Fund. The DBM argued that the automatic adjustment of benefits under R.A. No. 9946 applies only to monthly pensions, not to the lump-sum retirement gratuity.

Solicitor General’s Argument:
The Office of the Solicitor General (OSG) supported the DBM, asserting that mandamus cannot compel the DBM to issue the necessary funding documents because the Constitution requires that expenditures be authorized by law. The OSG also argued that the SAJ component of retirement benefits must be sourced from the SAJ Fund, not the General Fund.

Recourse to the Supreme Court:
The retired Justices filed a Petition for Mandamus, seeking to compel the DBM to issue the necessary Special Allotment Release Order (SARO) and Notice of Cash Allocation (NCA) to fund their retirement gratuity differentials.

Issue:

1. Procedural Issue: Whether mandamus lies against the DBM to compel the issuance of SARO and NCA for the retirement gratuity differentials.
2. Substantive Issue: Whether the retired CA Justices are entitled to retirement gratuity differentials equivalent to the salary increases granted to incumbents during the five-year period after their retirement.
3. Funding Source: Whether the retirement gratuity differentials should be sourced from the SAJ Fund or the Pension and Gratuity Fund.

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Ruling:

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Ratio:

• (Subscriber-Only)

Conclusion:

The Supreme Court issued a writ of mandamus directing the DBM to immediately issue the necessary SARO and NCA, payable from the Pension and Gratuity Fund, to cover the retirement gratuity differentials of the 28 retired CA Justices, totaling P23,025,093.75.