Topic: Fiscal Autonomy

Re: Clarifying and Strengthening A.M. No. 01-1-04-SC-PHILJA

The Organizational Structure and
Administrative Set-Up of the Present:
Philippine Judicial Academy
PANGANIBAN, C.J.,
PUNO,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,
CHICO-NAZARIO, and
GARCIA, JJ.
Promulgated:
January 31, 2006
Facts: The instant administrative matter has its roots in the Resolution of
the Court promulgated on February 24, 2004, clarifying and strengthening
the organizational structure and administrative set-up of the Philippine
Judicial Academy (PHILJA). Pursuant to said resolution, the positions of SC
Chief Judicial Staff Officer and Supervising Judicial Staff Officer with Salary
Grades (SG) 25 and 23.
However, in its Notice of Organization, Staffing, and Compensation Action
(NOSCA) dated May 5, 2005, the Department of Budget and Management
(DBM) downgraded said positions and their corresponding salary grades. The
SC Chief Judicial Staff Officers title was downgraded and its SG reduced to
24. And Supervising Judicial Staff Officers title was downgraded and its SG
reduced to 22.
Issue: WON DBM may downgrade the said positions.
Ruling: No. The primary role of the DBM is to breathe life into the policy
behind the Salary Standardization Law of providing equal pay for
substantially equal work and to base differences in pay upon substantive
differences in duties and responsibilities, and qualification requirements of
the positions. Pursuant to its mandate, the DBM is authorized to evaluate
and determine whether a proposed reclassification and upgrading scheme is

consistent with applicable laws and regulations. The task of the DBM is
simply to review the compensation and benefits plan of the government
agency or entity concerned and determine if it complies with the prescribed
policies and guidelines issued in this regard. Thus, the role of the DBM
is supervisorial in nature, its main duty being to ascertain that the proposed
compensation, benefits and other incentives to be given to [government]
officials and employees adhere to the policies and guidelines issued in
accordance with applicable laws.
As such, the authority of the DBM to review Supreme Court issuances
relative to court personnel on matters of compensation is limited by the
provisions of the Constitution, specifically Article VIII, Section 3 on fiscal
autonomy and Article VIII, Section 6 on administrative supervision over court
personnel. Fiscal autonomy means freedom from outside control.
Clearly then, in downgrading the positions and salary grades of SC Chief
Judicial Staff Officer and SC Supervising Judicial Staff Officer in the PHILJA,
the DBM overstepped its authority and encroached upon the Courts fiscal
autonomy and supervision of court personnel as enshrined in the
Constitution; in fine, a violation of the Constitution itself.

EN BANC
Re: Clarifying and Strengthening A.M. No. 01-1-04-SC-PHILJA
The Organizational Structure and
Administrative Set-Up of the Present:
Philippine Judicial Academy
PANGANIBAN, C.J.,
PUNO,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,

CHICO-NAZARIO, and
GARCIA, JJ.
Promulgated:
January 31, 2006
x--------------------------------------------------x
R E S O LUTIO N
CALLEJO, SR., J.:
The instant administrative matter has its roots in the Resolution of the Court
promulgated on February 24, 2004, clarifying and strengthening the organizational
structure and administrative set-up of the Philippine Judicial Academy (PHILJA).
[1]
Pursuant to said resolution, the positions of SC Chief Judicial Staff
Officer andSupervising Judicial Staff Officer with Salary Grades (SG) 25 and
23, respectively, were created in the following Divisions of the PHILJA:
Publications Division, and External Linkages Division (Research, Publications and
Linkages Office); Mediation Education and Management Division (Judicial
Reforms Office); Corporate Planning Division, and Administrative Division
(Administrative and Finance Office).
However, in its Notice of Organization, Staffing, and Compensation Action
(NOSCA) dated May 5, 2005, the Department of Budget and Management (DBM)
downgraded said positions and their corresponding salary grades, as follows:
Position Title/SG per
A.M. No. 01-1-04-SC
SC Chief Judicial Staff
Officer/SG 25
Supervising Judicial Staff
Officer/SG 23

Position Title/SG per

DBM NOSCA
Administrative
Officer V/SG 24
Administrative
Officer IV/SG22

Remarks
Title downgraded and
SG reduced
Title downgraded and
SG reduced[2]

Meantime, pursuant to the recommendation of the Office of Administrative

Services, the Court issued a Resolution on July 5, 2005, retaining the originally
proposed titles and salary grades of SC Chief Judicial Staff Officer (SG 25) and
Supervising Judicial Staff Officer (SG 23) in the [PHILJA].

Thereafter,
in
a
Memorandum
addressed
to
then
Chief
Justice Hilario G. Davide, Jr. dated October 10, 2005, PHILJA Chancellor,
Justice Ameurfina A.Melencio-Herrera, requested the Court to issue another
resolution retaining the position titles and salary grades of SC Chief Judicial Staff
Officer and Supervising Judicial Staff Officer, in light of the NOSCA issued by the
DBM downgrading said positions. Chancellor Melencio- Herrera invoked the
Courts Resolution ofNovember 21, 1995 (Re: Requests for Upgrading of the
Positions of Chief Justice Staff Head, Judicial Staff Head, Director IV [Chief,
Fiscal Management and Budget Office], Director III, Chief of Division and
Assistant Chief of Division with corresponding change in Position Titles, if
Warranted),[3] which she alleged the DBM violated by such downgrading.
According to the PHILJA Chancellor, to allow the DBM to disregard such
resolution would undermine the independence of the Judiciary and impinge on the
Supreme Courts exercise of its fiscal autonomy expressly granted by the
Constitution.
Upon the recommendation of the Office of Administrative Services, the
Court issued a Resolution on November 8, 2005, resolving to deny the request of
Justice Ameurfina A. Melencio-Herrera for the issuance of another resolution
retaining the position titles and salary grades of SC Chief Judicial Staff Officer
(SG 25) and Supervising Judicial Staff Officer (SG 23), as the resolution dated 5
July 2005 will suffice.
In compliance with the Courts Resolution dated October 18, 2005 referring
the Memorandum of Justice Melencio-Herrera for evaluation, report and
recommendation, Atty. Edna E. Dio, Office of the Chief Attorney, submitted her
Report dated December 1, 2005. She recommended that the Court reiterate its July
5, 2005 Resolution (retaining the originally proposed titles and salary grades of the
positions of SC Chief Judicial Staff Officer [SG 25] and Supervising Judicial Staff
Officer [SG 23]). She, likewise, recommended that the DBM be directed to
implement the Courts Resolutions of February 24, 2004 and July 5, 2005, as it
(DBM) had no authority to revise a Resolution of this Court issued in the exercise
of its constitutional mandates of fiscal autonomy and administrative supervision
over court personnel.[4]
We sustain the recommendation of Atty. Dio.
Indeed, the primary role of the DBM is to breathe life into the policy behind
the Salary Standardization Law of providing equal pay for substantially equal work
and to base differences in pay upon substantive differences in duties and

responsibilities, and qualification requirements of the positions. Pursuant to its

mandate, the DBM is authorized to evaluate and determine whether a proposed
reclassification and upgrading scheme is consistent with applicable laws and
regulations.[5] The task of the DBM is simply to review the compensation and
benefits plan of the government agency or entity concerned and determine if it
complies with the prescribed policies and guidelines issued in this regard. Thus, the
role of the DBM is supervisorial in nature, its main duty being to ascertain that the
proposed compensation, benefits and other incentives to be given to [government]
officials and employees adhere to the policies and guidelines issued in accordance
with applicable laws.[6]
As such, the authority of the DBM to review Supreme Court issuances
relative to court personnel on matters of compensation is even more
limited,circumscribed as it is by the provisions of the Constitution, specifically
Article VIII, Section 3[7] on fiscal autonomy and Article VIII, Section 6 [8] on
administrative supervision over court personnel. Fiscal autonomy means freedom
from outside control.[9] As the Court explained in Bengzon v. Drilon:[10]
As envisioned in the Constitution, the fiscal autonomy enjoyed by the
Judiciary, the Civil Service Commission and the Commission on Audit, the
Commission on Elections, and the Office of the Ombudsman contemplates a
guarantee of full flexibility to allocate and utilize their resources with the wisdom
and dispatch that their needs require. It recognizes the power and authority to
levy, assess and collect fees, fix rates of compensation not exceeding the highest
rates authorized by law for compensation and pay plans of the government and
allocate and disburse such sums as may be provided by law or prescribed by them
in the course of the discharge of their functions.
Fiscal autonomy means freedom from outside control. If the Supreme
Court says it needs 100 typewriters but DBM rules we need only 10 typewriters
and sends its recommendations to Congress without even informing us, the
autonomy given by the Constitution becomes an empty and illusory platitude.
The Judiciary, the Constitutional Commissions, and the Ombudsman must
have the independence and flexibility needed in the discharge of their
constitutional duties. The imposition of restrictions and constraints on the manner
the independent constitutional offices allocate and utilize the funds appropriated
for their operations is anathema to fiscal autonomy and violative not only of the
express mandate of the Constitution but especially as regards the Supreme Court,
of the independence and separation of powers upon which the entire fabric of our
constitutional system is based. In the interest of comity and cooperation, the
Supreme Court, Constitutional Commissions, and the Ombudsman have so far
limited their objections to constant reminders. We now agree with the petitioners
that this grant of autonomy should cease to be a meaningless provision.[11]

Clearly then, in downgrading the positions and salary grades of SC Chief

Judicial Staff Officer and SC Supervising Judicial Staff Officer in the PHILJA, the
DBM overstepped its authority and encroached upon the Courts fiscal autonomy
and supervision of court personnel as enshrined in the Constitution; in fine, a
violation of the Constitution itself.
We note with approval the following ratiocination of the Office of the Chief
Attorney in its Report dated December 1, 2005:
Moreover, the General Provisions of the General Appropriations Act
reiterates the constitutional provision on fiscal autonomy of the Judiciary. In
matters affecting court personnel and compensation, the Court is guided by the
Special Provision for the Judiciary under the General Appropriations Act for FY
2003 (Republic Act No. 9206), which was deemed reenacted for FY 2004, and
hence governed during the issuance of the Resolution of 24 February 2004. The
Special Provision vests the Chief Justice with the authority to formulate and
implement the organizational structure of the Judiciary, to fix and determine the
salaries[,] allowances and other benefits of their personnel, and whenever public
interest so requires, makes adjustments in the personal services itemization,
including but not limited to the transfer of item or creation of new positions in the
Judiciary.
It is therefore clear that when the Court exercises its administrative
authority over matters affecting its personnel, it does so within parameters
prescribed by pertinent laws. It cannot be presumed that the Court will violate
budgetary laws or go beyond the ambit of its authority or issue
administrative resolutions in derogation of the law. The exercise of such authority
should not in any case be absolute or outside the law as, being the ultimate
interpreter of the law, the Court is constitutionally bound to observe the
Constitution and the law is mandated to interpret. On the other hand, the DBM is
duty-bound not only to accord respect for the issuances of the highest Court in the
Judiciary, the third branch of government, but also to implement them. For the
DBM to even venture to alter a Resolution of the Court is to violate the basic
principle of separation of powers. xxx
xxx
Thus, the authority of the DBM to review the plantilla and compensation
of court personnel extends only to calling the attention of the Court on what it
may perceive as erroneous application of budgetary laws and rules on position
classification. The DBM may not overstep its authority in such a way as to cause
the amendment or modification of Court resolutions even if these pertain to
administration of compensation and position classification system. Only after its
attention to an allegedly erroneous application of the pertinent law or rule has

been called by the DBM may the Court amend or modify its resolution, as its
judgment and discretion may dictate under the law.
In this instance, the change of two position titles was made apparently to
conform to position titles indicated in the personnel services itemization for all
government positions, clearly oblivious of the fact that positions in the Judiciary
are peculiar only to that branch of government. It appearing that the salary grades
of 25 and 23 are proper positions equivalent to those of SC Chief Judicial Staff
Officer and Supervising Judicial Staff Officer, respectively, under the Salary
Standardization Law, and that the Court prescribed those position titles only after
consideration of the nature of work and functions that the holders of those
positions must perform, there is no reason to amend the Resolutions of 24
February 2004, and of 5 July 2005, so as to reflect the position titles and salary
grades stated in the NOSCA for the same positions.[12]

CONSIDERING THE FOREGOING, the Court REITERATES its

Resolution of July 5, 2005 retaining the originally proposed titles and salary grades
of the positions of SC Chief Judicial Staff Officer (SG 25) and Supervising Judicial
Staff Officer (SG 23) in the Philippine Judicial Academy. The Department of
Budget and Management is DIRECTED to implement the Resolutions of the
Court dated February 24, 2004 and July 5, 2005.
SO ORDERED.