G.R. No. 204948 - Development Bank of the Philippines vs. Ronquillo

On May 22, 1985, the DBP Executive Committee approved Resolution No. 0236 granting Additional Cost of Living Allowance (COLA) computed as follows:

Officials and employees with a monthly basic salary of P1,500.00 and below received a P150.00 per month additional COLA.
Those receiving a basic salary of P1,501.00 and above were granted a P100.00 additional COLA.

On April 13, 1988, the DBP Board of Directors issued Resolution No. 0210, which granted a uniform COLA of P200.00 per month to all personnel, effective January 1, 1988.

On July 1, 1989, Congress enacted Republic Act (R.A.) No. 6758 – the Compensation and Position Classification Act of 1989.

Section 12 of R.A. No. 6758 provided that all allowances (with certain specified exclusions) were to be integrated into the standardized salary rates of government employees.
Non-integrated allowances were limited to those specifically enumerated, leaving COLA and similar benefits within the general rule of integration.

The Department of Budget and Management (DBM) issued Corporate Compensation Circular (CCC) No. 10 on October 2, 1989, discontinuing all allowances and fringe benefits (including COLA) effective November 1, 1989.

In the wake of R.A. No. 6758 and CCC No. 10, DBP discontinued the payment of COLA to its officials and employees.
On August 12, 1998, the Court en banc in De Jesus, et al. v. Commission on Audit declared CCC No. 10 ineffective and unenforceable due to its lack of publication.
In 1999, DBP introduced an Early Retirement Incentive Program (ERIP) under which certain employees received additional cash benefits called “gratuities.”

Some respondents (employees) availed of the ERIP while others retired normally, resigned, were dismissed, or remained employed as of May 9, 2003.
On May 9, 2003, DBP issued Resolution No. 0137 granting COLA to regular employees to facilitate payment of a soft loan granted under the Provident Fund.
On November 16, 2005, DBP, via its Executive Committee, issued Resolution No. 0151 granting an Amelioration Allowance (AA) to employees, excluding retirees or those who had executed waiver documents.
Respondents made repeated demands (both written and verbal) for back payment of COLA and AA.
On June 4, 2008, DBP, through its Chief Legal Counsel, sent a letter unequivocally denying these claims.

In July 2008, respondents filed a petition for writ of mandamus before the RTC of Quezon City (Special Civil Action No. Q-08-63099) to enforce their claims for COLA and AA back payments.
On September 22, 2010, the RTC rendered a Decision:

It dismissed the petition for respondents who had availed of the ERIP on the ground that their quitclaims barred further claims.
It granted the petition for other respondents, ordering DBP to settle their claims for differential pay covering COLA and AA, with interest, attorney’s fees, and costs.

Both parties appealed to the Court of Appeals (CA); on June 6, 2012, the CA modified the trial court’s ruling:

The CA held that even respondents who availed of the ERIP were entitled to COLA and AA, explaining that these allowances were not integrated into the salaries.
The CA dismissed the petition with respect to employees still employed as of May 9, 2003 (for COLA) and as of November 16, 2005 (for AA), as they had been paid accordingly.
The CA ordered remand to determine the precise employment status of appellants as of those dates.

On July 6, 2012, DBP filed a motion for reconsideration, which was ultimately denied on December 19, 2012.
Undeterred, DBP filed a petition for review on certiorari under Rule 45 of the Rules of Court, arguing that the CA failed to consider prior Supreme Court rulings (e.g., Gutierrez, et al. v. Dep’t. of Budget and Mgm’t, et al.).

The sole issue before the Supreme Court was whether respondents were entitled to payment of COLA and AA after the effectivity of R.A. No. 6758 and DBM-CCC No. 10.

Whether respondents have a legal right to back payment of COLA and AA despite these allowances having been integrated into the standardized salary by virtue of R.A. No. 6758.

Is the integration of COLA and AA into the standardized salary rates, as mandated by Section 12 of R.A. No. 6758, binding on DBP?
Does the existence of the DBM’s CCC No. 10 or its later nullification affect the payment of these allowances?

Whether mandamus is the proper remedy to compel DBP to pay COLA and AA in view of the statutory prohibition against such payment.

Do respondents have a clear legal right that DBP is mandated to enforce through a ministerial duty?
Can DBP’s non-payment be legally compelled given the integration of allowances into the standardized salary?

The effect of subsequent administrative resolutions (Resolutions No. 0137 and No. 0151) and whether they alter the respondents’ entitlement to additional benefits.