G.R. No. 232968 - Marina P. Clarete vs. Office of the Ombudsman and Field Investigation Unit a Mindanao Area Office ~~Arthur Cua Yap vs. Office of the Ombudsman and Field Investigation Unit a Mindanao Area Office ~~Arthur Cua Yap vs. Sandiganbayan and People

The Land Bank of the Philippines (LBP) initially granted its officers and employees a Cost of Living Allowance (COLA) and a Bank Equity Pay (BEP) based on Letters of Instruction (LOI) Nos. 104 and 116, which provided for COLA of ₱300 or 40% of basic pay (whichever is higher) and differentiated BEP amounts based on the employee’s salary.
On July 6, 1988, LBP issued Board Resolution No. 88-109 to integrate the COLA into the basic salary, which took effect on May 16, 1989.
The enactment of Republic Act (RA) No. 6758, known as the Salary Standardization Law (SSL), mandated the integration/consolidation of most allowances into standardized salary rates, except for certain enumerated exclusions.

In compliance with RA 6758, the Department of Budget and Management (DBM) issued Corporate Compensation Circular No. 10 (DBM-CCC No. 10) on October 2, 1989, which declared that COLA and BEP were to be integrated into the basic pay effective July 1, 1989.
On February 23, 1995, RA 7907 removed LBP from the coverage of the SSL, and later, on August 12, 1998, DBM-CCC No. 10 was nullified in De Jesus v. Commission on Audit for non-publication; it was subsequently remedied by proper publication in 1999.
Despite the publication issue, LBP’s integration of the allowances into its salary structure remained factually in place.

Following the publication of the De Jesus decision, respondents (comprising David Naval Jr., Salvante, Arriza, Manalo, Siao, and others) negotiated with LBP for the restoration and back payment of COLA and BEP benefits allegedly withheld after integration.
After repeated communications—inclusive of a demand letter from June 21, 2002—LBP denied the claim by citing a Civil Service Commission ruling which prohibited paying such allowances over the basic salary.
On August 30, 2002, respondents initiated a petition for mandamus before the Regional Trial Court (RTC) of Manila, Branch 40, seeking to compel LBP to pay the allowances and the corresponding interest based on their alleged legal rights under LOI Nos. 104 and 116.

On June 7, 2004, the RTC ruled in favor of the respondents by ordering LBP to effectuate the payment of COLA and BEP from the effective date of integration plus applicable interest.
LBP’s subsequent motion for reconsideration was denied, and the matter advanced on appeal (CA-G.R. SP No. 99154), where the Court of Appeals (CA) affirmed the RTC decision with modifications.
The CA observed that although LOI Nos. 104 and 116 mandated the allowances, evidence showed that the integration of these allowances into the basic pay had in fact resulted in a diminution of net pay, and that LBP employees had already received the allowances as part of their salary.

On April 15, 2011, LBP filed an Omnibus Motion (later, a Petition for Review) before the Supreme Court, asserting that the integration was validated under the SSL and submitting that LOI Nos. 104 and 116 had been effectively repealed or rendered inoperative by subsequent laws and administrative issuances.
LBP contended that its autonomy under RA 7907 allowed it to design its own compensation plan, which did not require separate payment of COLA and BEP.
In addition, several motions to intervene and complaints-in-intervention were filed by LBP employees and other intervenors claiming similar benefits, though their submissions were met with mixed rulings by the Court.

Whether respondents and intervenors are entitled to receive COLA and BEP as separate payments over and above their basic salaries from the effective date of integration (July 1, 1989) up to the present.
Whether the integration of COLA and BEP into the basic pay of LBP employees, as executed pursuant to LOI Nos. 104 and 116 and later by DBM-CCC No. 10, is valid under the provisions of RA 6758 (the SSL), notwithstanding the nullification of DBM-CCC No. 10 for publication defects.
Whether the subsequent enactment of RA 7907, which exempted LBP from the coverage of the SSL, allows for a separate payment of these allowances or sustains the integrated approach.
Whether the existing statutory and jurisprudential framework—particularly Section 12 of the SSL and related precedents—necessitates that allowances not expressly excluded (such as COLA and BEP) be considered as already integrated into the standardized salary rates.