A.M. No. RTJ-04-1868 - Re: Judge Tito G. Gustilo

Republic Act No. 9227 was enacted to grant additional compensation in the form of a Special Allowance to justices, judges, and other judicial officials with equivalent rank, implemented in increments of 25% of their basic monthly salary until a full 100% special allowance is reached over a four‑year period.
Section 2 of RA 9227 specifies the uniform implementation of the allowance in 25% tranches, and Section 5 provides that for retirement benefits, only the allowances actually received and implemented up to the date of retirement shall be considered.
The Court promulgated guidelines on March 9, 2004, that further clarify that only the special allowance which has accrued (i.e., become an enforceable claim) as of the retirement date shall be included in the computation of retirement benefits.

Judge Gustilo, serving since January 18, 1983, and with an exemplary record that includes his tenure as Executive Judge of the RTC of Iloilo City, submitted a request requesting that the second tranche (25%) of the Special Allowance be included in the computation of his retirement benefits.
His letter dated May 26, 2004, addressed to Chief Justice Hilario G. Davide, Jr., argued that since his retirement is imminent (scheduled for September 29, 2004, at the age of 70 for compulsory retirement), and given prior judicial practices of including allowances even if not yet fully implemented (such as the inclusion of the December 13th month pay), the pending second tranche should be counted.

The Office of the Court Administrator (OCA) issued a memorandum on June 18, 2004, recommending that Judge Gustilo’s request should be granted, citing his long service, exemplary performance, and administrative innovations in the Iloilo City courts.
The memorandum emphasized the fairness of granting the second tranche considering his contributions and the short time until its scheduled implementation on November 11, 2004.
The Chief Attorney, however, submitted a report on July 15, 2004, advising that the request be denied because it was not in accordance with the clear provisions of RA 9227 and its guidelines.

The legislative history, including records of deliberations in the Bicameral Conference Committee (composed of senators and representatives), clarifies that retirement benefits shall be computed solely on the basis of the allowances actually received.
Congressional debates reinforced that the computation of retirement benefits should not include allowances merely scheduled for future receipt.
The judicial guidelines reaffirm the statutory requirement that an allowance must have accrued—that is, become actual and enforceable—before being factored into retirement benefits.

Whether the second tranche (25%) of the Special Allowance, scheduled for implementation on November 11, 2004, should be included in the computation of Judge Gustilo’s retirement benefits given that it had not yet accrued at the time of his retirement on September 29, 2004.

Whether a liberal policy favoring the underpaid Trial Court Judges, as argued by Judge Gustilo based on past practices (e.g., inclusion of the December 13th month pay), can override the clear statutory directive provided by Section 5 of RA 9227.

The proper interpretation of the terms “actually received” and “accrued” as used in the guidelines and statute, and whether these terms permit inclusion of pending allowances in the computation of retirement benefits.