By Wilfredo R. Ceguera
Effective July 1, 2008 officials and employees of the Supreme Court (SC) and lower
courts and the PET will receive a 10% salary increase authorized under Executive Order (EO) 719. How
ever, the amount corresponding to the 10% salary increase will be deducted from the monthly Special
Allowance for the Judiciary (SAJ) of justices, judges and court officials with equivalent rank.
Necessary adjustments in the monthly pensions, including the SAJ component, of
retired justices will also be effected to reflect compliance with the said salary increase and the
corresponding deduction from the same SAJ component.
This was the ruling of the Supreme Court (SC) in its en banc Resolution in
“Re: Request for Authority to Implement the 10% Salary Increase under EO No. 719 for Supreme
Court and Lower Courts and PET Officials and Employees” docketed as A.M. No. 08-9-1-SC.
This is the second salary increase given to the justices, officials and personnel of the
judiciary. The first was when EO No. 611 directed the implementation of a 10% increase in the basic
monthly salaries of civilian government personnel whose positions are covered by the Compensation
and Position Classification System under R.A. No. 6758, as amended, effective July 1, 2007. Although
justices, judges and judiciary officials of equivalent rank were included in the law, the Department of
Budget and Management failed to provide guidelines as to the effect of EO No. 611 on their SAJ.
Thus, Corazon G. Ferrer-Flores, Deputy Clerk of Court and Chief of the Fiscal
Management Bureau Office, sought clarification in A.M. No. 07-8-3-SC as to the effect of the 10%
increase authorized under EO No. 611 on the monthly SAJ of incumbent justice, judges, and court
personnel of equal rank.
In its en banc Resolution, the SC held that pursuant to Section 6 of Republic
Act (R.A.) No. 9227, a percentage of SAJ being received by present magistrates and the said court
officials shall be converted as part of the basic salary to correspond to the 10% increase in the basic
salary authorized under EO No. 611. Thus, upon implementation of the 10% increase in the basic
salary authorized under EO No. 611 in July 2007, the monthly SAJ of incumbents shall correspondingly
decrease by 10%.
According to the SC, the net effect of converting the 10% of the monthly SAJ to
basic salary is a corresponding decrease in the monthly income of justices, judges and judiciary
officials of equivalent rank, since the 10% increase in their salary, formerly part of their SAJ, will be
subjected to income taxation.
The SC explained further that when the present salaries of magistrates and
judicial officials of equivalent rank reach a 100% increase in succeeding years, they will no longer
receive their SAJ, as this would be converted completely to salary. However, they will be receiving
less than before, since their salaries would be subject to tax.
On the other hand, the 10% increase in basic salary will not adversely affect the
allowances sourced from the surplus of the SAJ fund which are given to other court personnel. They
are expected to benefit with higher additional allowance, in view of the expected increase in the
surplus of the SAJ fund by reason of the 10% deduction from the monthly SAJ of incumbents.
Thus, the SC observed that the real beneficiaries of the 10% salary increase are
the other court personnel not directly covered by R.A. No. 9227 since they will continue receiving
the grant to them of the Judicial Development Fund (JDF) despite the indirect benefit gained from
the distribution of surplus SAJ.
Although the long-term implementation of the salary increase for justices, judges,
and court officials of equivalent rank would eventually defeat the purposes for which it was given,
the SC held that there is no escaping the clear provisions of the law. It declared that “hindi
dapat lumihis sa mga titik ng batas” and “ang batas ay maaaring mahigpit ngunit ito ang batas.”
Moreover, the SC ruled that it has already established the nature of SAJ as to be
considered basic salary for purposes of computation of retirement benefits in “Re: Request of
Retired Justices of the Supreme Court for Upgrading of their Retirement Gratuities” docketed as
A.M. No. 04-11-06-SC and promulgated on March 14, 2006. Thus, it cannot declare the SAJ free
of income tax and steer clear of deductions corresponding to each salary increase, no matter how
absurd the entire long-term effect of implementation of the salary increase may be. The SC
encouraged future legislation to solve this “blip”.