Re: Query on the Effect of the 10% Salary Increase Under Executive Order No. 611
REITERATIONFacts
The Antecedents: Deputy Clerk of Court and Chief of Office, Fiscal Management and Budget Office (FMBO), Corazon G. Ferrer-Flores, sought clarification on the effect of the 10% salary increase under Executive Order (E.O.) No. 611 on the monthly Special Allowance for the Judiciary (SAJ) of justices, judges, and court officials with equivalent ranks, in light of Section 6 of Republic Act (R.A.) No. 9227. Procedural History: The Department of Budget and Management (DBM) issued National Budget Circular No. 511 implementing E.O. No. 611 but failed to provide specific guidelines on the SAJ's interaction with the salary increase. DBM representatives, during a budget hearing, advised that a 10% deduction from SAJ should correspond to the salary increase, to be sourced from the SAJ fund. Subsequently, DBM issued Circular Letter No. 2007-9 and Special Allotment Release Order (SARO) No. SARO-BMB-C-07-00061373, explicitly stating that the 10% salary adjustment would result in a parallel reduction of the SAJ, while the total monthly compensation would remain unchanged. The SARO qualified that the release of funds was to cover both the SAJ and the 10% compensation adjustment. The Petition: The Deputy Clerk of Court requested instructions on whether to deduct 10% from the SAJ and whether to source this increase from the SAJ fund.
Issue(s)
1. Whether to deduct 10% from the monthly Special Allowance for Justices (SAJ) of incumbent justices, judges, and judiciary officials with the equivalent rank of CA justices and RTC judges corresponding to the 10% increase in their basic salary as authorized under E.O. No. 611. 2. Whether to source the 10% salary increase from the SAJ fund.
Ruling
The Court ruled in the affirmative on both issues. The Deputy Clerk of Court and Chief of the Fiscal Management and Budget Office Corazon G. Ferrer-Flores was instructed to deduct 10% from the monthly SAJ of incumbent justices, judges, and judiciary officials with equivalent ranks of CA justices and RTC judges, corresponding to the 10% increase in their basic salary as authorized under E.O. No. 611, and to source this 10% salary increase from the SAJ fund.
Ratio Decidendi
On Issue 1 (Deduction of 10% from SAJ): The Court held that Section 6 of R.A. No. 9227 clearly mandates that the SAJ shall be considered an implementation of any subsequent increase in salary rates. This includes the 10% increase in basic salary under E.O. No. 611. Therefore, the 10% increase in basic salary for justices, judges, and other court personnel of equivalent rank must be applied, and this application necessitates a corresponding 10% reduction in their monthly SAJ. The Court emphasized the principle of 'Verba Legis Non Est Recedendum,' meaning that from the words of the statute, there should be no departure, even if the long-term consequences might seem to defeat the law's original purpose. The SAJ is to be treated as an advance salary increase, which, upon formal salary increases, is converted into basic salary. On Issue 2 (Sourcing the 10% salary increase from SAJ fund): The Court affirmed that the 10% salary increase should be sourced from the SAJ fund. This is a direct consequence of Section 6 of R.A. No. 9227, which states that the special allowance shall be converted as part of the basic salary upon implementation of subsequent salary increases. The DBM's issuance of SARO No. SARO-BMB-C-07-00061373 explicitly qualified the release of funds to cover both the SAJ and the 10% compensation adjustment, indicating that the increase is to be funded by the SAJ. The Court reiterated its previous rulings that the SAJ is considered part of the basic salary, thus supporting the conversion and sourcing of the increase from these funds. While acknowledging that this conversion leads to the SAJ being subject to income taxation, thereby reducing the net take-home pay and potentially undermining the objective of RA 9227 to attract lawyers to the judiciary, the Court concluded that it must adhere to the express provisions of the law ('Dura lex sed lex').
Main Doctrine
The 10% salary increase authorized under Executive Order No. 611, when implemented, shall be sourced from the Special Allowance for the Judiciary (SAJ) funds, resulting in a corresponding 10% reduction of the SAJ for justices, judges, and court officials of equivalent rank, as mandated by Section 6 of Republic Act No. 9227. This reduction, while potentially defeating the original purpose of RA 9227 in the long run due to income taxation, is a direct application of the statutory language ('Verba Legis Non Est Recedendum').