A.M. No. 07-8-3-SC - Re: 10% Salary Increase under Executive Order No. 611

Deputy Clerk of Court and Chief of Office, Fiscal Management and Budget Office (FMBO), Corazon G. Ferrer-Flores, submitted Memoranda dated June 26, 2007, July 4, 2007, and November 20, 2007 seeking clarification on the effect of the ten percent (10%) salary increase authorized under Executive Order (E.O.) No. 611 on the monthly Special Allowance for the Judiciary (SAJ) of incumbent justices, judges, and court officials with the equivalent rank of Court of Appeals (CA) justices or Regional Trial Court (RTC) judges.
The legal concern involved the provision of Section 6, Republic Act (R.A.) No. 9227, which stated that upon implementation of subsequent increases in salary rates under R.A. No. 6758, as amended, all special allowances granted under R.A. No. 9227 to justices and all other positions in the Judiciary with equivalent rank of CA justices and RTC judges, as authorized under existing laws, are considered an implementation of the salary increases, that the special allowance equivalent to the increase in basic salary shall be converted as part of basic salary, and that any excess not converted continues to be granted as such.

On March 14, 2007, President Gloria Macapagal-Arroyo issued E.O. No. 611 directing the implementation of a 10% increase in the basic monthly salaries of civilian government personnel covered by the Compensation and Position Classification System under R.A. No. 6758, as amended, effective July 1, 2007.
On June 18, 2007, the Department of Budget and Management (DBM) issued National Budget Circular No. 511 prescribing rules and regulations for compensation adjustments authorized under E.O. No. 611.
The DBM circular did not provide guidelines on the effect of E.O. No. 611 on the SAJ of justices, judges, and those of equivalent rank in light of Section 6, R.A. No. 9227.
The Court’s Joint Circular with the DBM dated January 13, 2004, which provided guidelines for implementing R.A. No. 9227, did not clarify the issue on the effect of E.O. No. 611 on SAJ.

In her first Memorandum dated June 26, 2007, Flores sought guidance from the Court.
On July 2, 2007, during the technical hearing on the Calendar Year (CY) 2008 budget of the Court and lower courts, DBM representatives cited Section 6, R.A. No. 9227 and advised that 10% should be deducted from the SAJ of justices, judges, and court officials of equivalent rank corresponding to the 10% increase in salary effective July 2007.
When it was stated that National Budget Circular No. 511 did not provide mechanics for this adjustment, DBM representatives said a circular on implementing guidelines was being prepared.
DBM further explained that the 10% to be deducted from the SAJ would not be remitted to the National Treasury and would instead remain in the SAJ fund until 100% conversion of SAJ into salary had been effected.
The record showed that fund releases by DBM for basic salaries of SAJ-entitled court personnel appeared to be net of the 10% increase, with the alleged 10% deficiency expected to be sourced from the SAJ fund pursuant to Section 6, R.A. No. 9227.
DBM indicated it would provide funding only for the 10% increase in the basic salary of court officials and employees who were not direct beneficiaries under R.A. No. 9227.

DBM issued its Circular Letter No. 2007-9 dated June 29, 2007 providing additional guidelines on the release of funds to cover compensation adjustments of national government personnel effective July 1, 2007.
The circular letter provided policies for cases where personnel received special allowances under special laws that are considered advance payment of any future increase in basic salary as may be provided by law:

The special allowance equivalent to the authorized increase under E.O. No. 611 shall be integrated into the basic salary.
Any excess in the special allowance not converted as part of the basic salary shall continue to be granted as such.

Flores informed the Court of these developments in a second Memorandum dated July 4, 2007.

Flores’ most recent Memorandum dated November 20, 2007 informed the Court of DBM issuance on November 13, 2007 of Special Allotment Release Order (SARO) No. SARO-BMB-C-07-0006137 in the amount of P165,000,000.00 to cover the...(Subscriber-Only)

Whether 10% should be deducted from the monthly SAJ of incumbent justices, judges, and Judiciary officials of equivalent rank of CA justices and RTC judges corresponding to the 10% increase in their basic salary authorized under E.O. No. 611.

Ruling:

(Subscriber-Only)

Ratio:

(Subscriber-Only)

Unlock Full Case Digest