G.R. No. 96032 - JULY 1991 - PHILIPPINE JURISPRUDENCE CASE NUMBERCASE TITLE G.R. No. 96032July 31, 1991Jesus N. Borromeo vs. Civil Service Commission, et al. G.R. No. 93142July 31, 1991People of the Philippines vs. Eddie C. Fontanilla , et al. G.R. No. 92813July 31, 1991Peroxide Philippines Corporation, et al. vs. Court of Appeals, et al. G.R. No. 91721July 31, 1991Constancio Ordonio vs. Court of Appeals G.R. No. 89420July 31, 1991People of the Philippines vs. Rosalino Dungo G.R. No. 86645July 31, 1991Hipolito O. Tatlonghari vs. Commission on Election G.R. No. 85670July 31, 1991Rogelio A. Tria vs. Patricia A. Sto. Tomas G.R. No. 78953July 31, 1991Commissioner of Internal Revenue vs. Melchor J. Javier, Jr. G.R. No. 78576July 31, 1991Filcon Manufacturing Corporation vs. National Labor Relations Commission G.R. No. 68033July 31, 1991People of the Philippines vs. Teodoro Havana G.R. No. 51221July 31, 1991First Integrated Bonding vs. Harold M. Hernando G.R. Nos. 45338-39July 31, 1991Republic of the Philippines vs. Policarpio Gonzales G.R. No. 44664July 31, 1991Bernardo Mendoza I, et al. vs. Court of Appeals, et al. A.C. No. R-94-RTJJuly 31, 1991National Intelligence & Sec. Authority (NISA) vs. Valentino G. Tablang G.R. No. 100318July 30, 1991Emilio M.R. Osmeña vs. Commission on Election G.R. Nos. 92191-92July 30, 1991Antonio Y. Co vs. Electoral Tribunal of the House of Representatives, et al. G.R. No. 76221July 29, 1991Spouses Ruben and Luz Galang vs. Court of Appeals G.R. No. 94348July 26, 1991Tadeo M. Cangco vs. Court of Appeals, et al. G.R. No. 92606July 26, 1991Major Zosimo R. Magno vs. Gen. Renato De Villa, et al. G.R. No. 92436July 26, 1991Maria vda. de Reyes, et al. vs. Court of Appeals, et al. G.R. No. 89664July 26, 1991People of the Philippines vs. Jose Permison G.R. No. 82976July 26, 1991Employees Ass'n of the Phil-Am Life Insurance Company (Emapalico) vs. National Labor Relations Commission G.R. No. 81476July 26, 1991Commission on Audit vs. Tanodbayan G.R. No. 78090July 26, 1991Pacific Mills, Inc vs. Zenaida Alonzo G.R. No. 39274July 26, 1991People of the Philippines vs. J. Narciso A. Aquino G.R. No. 95469July 25, 1991Agapito Manuel vs. Court of Appeals, et al. G.R. No. 95279July 25, 1991Estate of Gregoria Francisco vs. Court of Appeals, et al. G.R. No. 91260July 25, 1991People of the Philippines vs. Edwin Belibet, et al. G.R. No. 88872July 25, 1991People of the Philippines vs. Virgilio M. Osias G.R. No. 88538July 25, 1991Aboitiz Shipping Corporation vs. Dionisio C. Dela Serna G.R. No. 95275-76July 23, 1991Sixto De La Victoria vs. Commission on Elections, et al. G.R. No. 94913July 23, 1991D.M. Consunji, Incorporated vs. Commission on Audit G.R. No. 93076July 23, 1991People of the Philippines vs. Court of Appeals, et al. G.R. No. 92418July 23, 1991People of the Philippines vs. Rita Labriaga G.R. No. 88643July 23, 1991Ariel C. Santos vs. Willlam Bayhon G.R. No. 87202July 23, 1991People of the Philippines vs. Rafael Velaga, Jr. G.R. No. 86679July 23, 1991Philippine National Bank vs. Int'l Corporation Bank G.R. No. 84929July 23, 1991Julio F. Lagmay vs. Court of Appeals G.R. No. 78646July 23, 1991Pablo Ralla vs. Pedro Ralla G.R. No. 76645July 23, 1991Philippine Telegraph and Telephone Corporation vs. Alicia Laplana, et al. G.R. Nos. 97475-76July 18, 1991People of the Philippines vs. Dioscoro O. Villamayor G.R. No. 96266July 18, 1991Ernesto M. Maceda vs. Energy Regulatory Board, et al. G.R. No. 94681July 18, 1991Jeremias F. Dayo vs. Commission on Elections G.R. No. 94385July 18, 1991Lydia Arriola vs. Bank of the Philippine Islands, et al. G.R. Nos. 90672-73July 18, 1991People of the Philippines vs. Rolando H. Maranion, et al. G.R. No. 88750July 18, 1991People of the Philippines vs. Guillermo Sanchez G.R. No. 86384July 18, 1991People of the Philippines vs. Gavino Placido, Jr. G.R. No. 84295July 18, 1991Philippine Veterans Investment Dev't Corporation (Phividec) vs. Alejandro M. Velez G.R. No. 83804July 18, 1991Republic of the Philippines vs. Reynaldo M. Alon G.R. No. 83568July 18, 1991Prospero Naval vs. Employees' Compensation Commission G.R. No. 79516July 18, 1991Romeo R. Echauz vs. Court of Appeals G.R. No. 75222July 18, 1991Radiola-Toshiba Philippines Inc. vs. Intermediate Appellate Court, et al. G.R. No. 74633July 18, 1991People of the Philippines vs. Juanito Ecal G.R. No. 64965July 18, 1991People of the Philippines vs. Joven Bausing, et al. G.R. No. 49327July 18, 1991Amelia C. Elayda vs. Court of Appeals, et al. G.R. No. 39460July 18, 1991Baguio Gold Mining Company vs. Court of Appeals, et al. A.M. No. RTJ-89-406July 18, 1991Enriqueta Gargar De Julio vs. Benjamin A.G. Vega A.C. No. 1311July 18, 1991Ramona L. Vda. de Alisbo vs. Atty. Benito Jalandoon, Sr. G.R. No. 68109July 17, 1991Severino Gayapanao vs. Intermediate Appellate Court G.R. No. 94750July 16, 1991Felix P. Gonzales vs. Sandiganbayan, et al. G.R. No. 94452July 16, 1991Allure Manufacturing, Inc., et al. vs. Court of Appeals, et al. G.R. No. 92605July 16, 1991Apex Mining Company, Inc., et al. vs. Cancio C. Garcia, et al. G.R. No. 91787July 16, 1991Terminal Facilities and Services Corporation vs. National Labor Relations Commission, et al. G.R. No. 74814July 16, 1991Jose Lusterio vs. Intermediate Appellate Court, et al. G.R. No. L-60502July 16, 1991Pedro Lopez Dee vs. Securities and Exchange Commission, et al. G.R. No. 58340July 16, 1991Kawasaki Port Service Corporation, et al. vs. Augusto M. Amores G.R. No. 97238July 15, 1991Julia L. Tan. vs. Court of Appeals G.R. No. 77356July 15, 1991Travel Wide Associated Sales (Phils.), Inc. vs. Court of Appeals G.R. No. 59640July 15, 1991Damian Robles vs. Court of Appeals G.R. No. 95336July 12, 1991Juan Garcia Rivera vs. Commission on Elections, et al. G.R. No. 93507July 12, 1991Heirs of Maria Revilleza Vda. De Vega, et al. vs. Court of Appeals, et al. G.R. Nos. 93437-45July 12, 1991People of the Philippines vs. Cipriano Caballes G.R. No. 93359July 12, 1991Republic of the Philippines et al. vs. J. Ignacio C. Capulong, et al. G.R. No. 92284July 12, 1991Teodoro J. Santiago vs. Commission on Audit, et al. G.R. No. 85240July 12, 1991Cecilio Claudel, et al. vs. Court of Appeals, et al. G.R. No. 83759July 12, 1991Cipriano Vasquez, et al. vs. Court of Appeals, et al. G.R. No. 52439July 12, 1991Philippine National Bank, et al. vs. Simplicio M. Apalisok, et al. A.M. No. RTJ-90-447July 12, 1991Emma J. Castillo vs. Manuel M. Calanog, Jr. G.R. No. 82808July 11, 1991Dennis L. Lao vs. Court of Appeals, et al. A.M. No. RTJ-89-286July 11, 1991Roan I. Libarios vs. Rosarito F. Dabalos G.R. No. 88809July 10, 1991Republic of the Philippines vs. Sandiganbayan, et al. G.R. No. 93628July 9, 1991People of the Philippines vs. Editha De Guzman G.R. No. 92534July 9, 1991People of the Philippines vs. Esmenio B. De La Peña G.R. No. 67823July 9, 1991People of the Philippines vs. Danilo S. Mesias G.R. No. 53851July 9, 1991Chua Huat, et al. vs. Court of Appeals, et al. G.R. No. 95595July 8, 1991Jose De Guia vs. Employees' Compensation Commission G.R. No. 92989July 8, 1991Perfecto Dy, Jr. vs. Court of Appeals, et al. G.R. No. 92503July 8, 1991People of the Philippines vs. Camilo Manuel G.R. No. 85757July 8, 1991Alfredo Montelibano vs. Court of Appeals A.M. No. P-90-486July 4, 1991Victor De La Cruz vs. Alicia F. Ricaforte G.R. No. 92862July 4, 1991Nicanor T. Santos vs. Court of Appeals G.R. No. 84378July 4, 1991Nenita L. Leano vs. Eufemio C. Domingo, et al. G.R. No. 83232July 4, 1991Trinidad M. Villas vs. Employees' Compensation Commission, et al. G.R. No. 81015July 4, 1991Cresencio Viray vs. Hon. Intermediate Appellate Court G.R. No. 33174July 4, 1991Philippine National Bank vs. Court of Appeals G.R. No. 87353July 3, 1991Philippine Airlines, Inc. vs. National Labor Relations Commission G.R. No. 85991-94July 3, 1991Republic Cement Corporation vs. Court of Appeals G.R. No. 70722July 3, 1991Canuta Pagkatipunan, et al. vs. Hon. Intermediate Appellate Court, et al. A.M. No. P-87-72July 3, 1991Antonio C. Sy vs. Marleo J. Academia, et al. G.R. No. 89125July 2, 1991Bank of the Philippines Islands vs. Far East Molasses Corporation G.R. No. 60054July 2, 1991Manila Electric Comp. vs. National Labor Relations Commission, et al. G.R. Nos. 90804-05July 1, 1991People of the Philippines vs. Paciano De La Torre G.R. No. 94127July 1, 1991People of the Philippines vs. Herman Reception G.R. No. 85250July 1, 1991People of the Philippines vs. Romeo A. Alerta, Jr. G.R. No. 82708July 1, 1991People of the Philippines vs. Gregorio Clamor The Lawphil Project - Arellano Law Foundation, Inc. Jesus N. Borromeo vs. Civil Service Commission, et al.People of the Philippines vs. Eddie C. Fontanilla , et al.Peroxide Philippines Corporation, et al. vs. Court of Appeals, et al.Constancio Ordonio vs. Court of AppealsPeople of the Philippines vs. Rosalino DungoHipolito O. Tatlonghari vs. Commission on ElectionRogelio A. Tria vs. Patricia A. Sto. TomasCommissioner of Internal Revenue vs. Melchor J. Javier, Jr.Filcon Manufacturing Corporation vs. National Labor Relations CommissionPeople of the Philippines vs. Teodoro HavanaFirst Integrated Bonding vs. Harold M. HernandoRepublic of the Philippines vs. Policarpio GonzalesBernardo Mendoza I, et al. vs. Court of Appeals, et al.National Intelligence & Sec. Authority (NISA) vs. Valentino G. TablangEmilio M.R. Osmeña vs. Commission on ElectionAntonio Y. Co vs. Electoral Tribunal of the House of Representatives, et al.Spouses Ruben and Luz Galang vs. Court of AppealsTadeo M. Cangco vs. Court of Appeals, et al.Major Zosimo R. Magno vs. Gen. Renato De Villa, et al.Maria vda. de Reyes, et al. vs. Court of Appeals, et al.People of the Philippines vs. Jose PermisonEmployees Ass'n of the Phil-Am Life Insurance Company (Emapalico) vs. National Labor Relations CommissionCommission on Audit vs. TanodbayanPacific Mills, Inc vs. Zenaida AlonzoPeople of the Philippines vs. J. Narciso A. AquinoAgapito Manuel vs. Court of Appeals, et al.Estate of Gregoria Francisco vs. Court of Appeals, et al.People of the Philippines vs. Edwin Belibet, et al.People of the Philippines vs. Virgilio M. OsiasAboitiz Shipping Corporation vs. Dionisio C. Dela SernaSixto De La Victoria vs. Commission on Elections, et al.D.M. Consunji, Incorporated vs. Commission on AuditPeople of the Philippines vs. Court of Appeals, et al.People of the Philippines vs. Rita LabriagaAriel C. Santos vs. Willlam BayhonPeople of the Philippines vs. Rafael Velaga, Jr.Philippine National Bank vs. Int'l Corporation BankJulio F. Lagmay vs. Court of AppealsPablo Ralla vs. Pedro RallaPhilippine Telegraph and Telephone Corporation vs. Alicia Laplana, et al.People of the Philippines vs. Dioscoro O. VillamayorErnesto M. Maceda vs. Energy Regulatory Board, et al.Jeremias F. Dayo vs. Commission on ElectionsLydia Arriola vs. Bank of the Philippine Islands, et al.People of the Philippines vs. Rolando H. Maranion, et al.People of the Philippines vs. Guillermo SanchezPeople of the Philippines vs. Gavino Placido, Jr.Philippine Veterans Investment Dev't Corporation (Phividec) vs. Alejandro M. VelezRepublic of the Philippines vs. Reynaldo M. AlonProspero Naval vs. Employees' Compensation CommissionRomeo R. Echauz vs. Court of AppealsRadiola-Toshiba Philippines Inc. vs. Intermediate Appellate Court, et al.People of the Philippines vs. Juanito EcalPeople of the Philippines vs. Joven Bausing, et al.Amelia C. Elayda vs. Court of Appeals, et al.Baguio Gold Mining Company vs. Court of Appeals, et al.Enriqueta Gargar De Julio vs. Benjamin A.G. VegaRamona L. Vda. de Alisbo vs. Atty. Benito Jalandoon, Sr.Severino Gayapanao vs. Intermediate Appellate CourtFelix P. Gonzales vs. Sandiganbayan, et al.Allure Manufacturing, Inc., et al. vs. Court of Appeals, et al.Apex Mining Company, Inc., et al. vs. Cancio C. Garcia, et al.Terminal Facilities and Services Corporation vs. National Labor Relations Commission, et al.Jose Lusterio vs. Intermediate Appellate Court, et al.Pedro Lopez Dee vs. Securities and Exchange Commission, et al.Kawasaki Port Service Corporation, et al. vs. Augusto M. AmoresJulia L. Tan. vs. Court of AppealsTravel Wide Associated Sales (Phils.), Inc. vs. Court of AppealsDamian Robles vs. Court of AppealsJuan Garcia Rivera vs. Commission on Elections, et al.Heirs of Maria Revilleza Vda. De Vega, et al. vs. Court of Appeals, et al.People of the Philippines vs. Cipriano CaballesRepublic of the Philippines et al. vs. J. Ignacio C. Capulong, et al.Teodoro J. Santiago vs. Commission on Audit, et al.Cecilio Claudel, et al. vs. Court of Appeals, et al.Cipriano Vasquez, et al. vs. Court of Appeals, et al.Philippine National Bank, et al. vs. Simplicio M. Apalisok, et al.Emma J. Castillo vs. Manuel M. Calanog, Jr.Dennis L. Lao vs. Court of Appeals, et al.Roan I. Libarios vs. Rosarito F. DabalosRepublic of the Philippines vs. Sandiganbayan, et al.People of the Philippines vs. Editha De GuzmanPeople of the Philippines vs. Esmenio B. De La PeñaPeople of the Philippines vs. Danilo S. MesiasChua Huat, et al. vs. Court of Appeals, et al.Jose De Guia vs. Employees' Compensation CommissionPerfecto Dy, Jr. vs. Court of Appeals, et al.People of the Philippines vs. Camilo ManuelAlfredo Montelibano vs. Court of AppealsVictor De La Cruz vs. Alicia F. RicaforteNicanor T. Santos vs. Court of AppealsNenita L. Leano vs. Eufemio C. Domingo, et al.Trinidad M. Villas vs. Employees' Compensation Commission, et al.Cresencio Viray vs. Hon. Intermediate Appellate CourtPhilippine National Bank vs. Court of AppealsPhilippine Airlines, Inc. vs. National Labor Relations CommissionRepublic Cement Corporation vs. Court of AppealsCanuta Pagkatipunan, et al. vs. Hon. Intermediate Appellate Court, et al.Antonio C. Sy vs. Marleo J. Academia, et al.Bank of the Philippines Islands vs. Far East Molasses CorporationManila Electric Comp. vs. National Labor Relations Commission, et al.People of the Philippines vs. Paciano De La TorrePeople of the Philippines vs. Herman ReceptionPeople of the Philippines vs. Romeo A. Alerta, Jr.People of the Philippines vs. Gregorio ClamorThe Lawphil Project - Arellano Law Foundation, Inc.

Manila

EN BANC

G.R. No. 96032             July 31, 1991

JESUS N. BORROMEO,petitioner,
vs.
THE HON. CIVIL SERVICE COMMISSION and SECRETARY OF BUDGET AND MANAGEMENT,respondents.

GUTIERREZ, JR.,J.:

Should the terminal leave pay of petitioner Borromeo, Chairman of the Civil Service Commission (CSC) until his retirement on April 1, 1986, be computed on the basis of the highest monthly salary plus cost of living allowance (COLA) and representation and transportation allowance (RATA) or solely on the basis of highest monthly salary without said allowances? This is the issue that confronts the Court.

On August 18, 1988, the petitioner wrote a letter to the Commission on Audit (COA) Chairman, coursed through the CSC Chairman, requesting an opinion on whether or not the money value of the terminal leave of retired Constitutional Commission members should include the allowances received at the time of retirement. The petitioner, in his letter, further stated that while retired members of other Constitutional Commissions received terminal leave pay computed on the basis of highest monthly salary including allowances, the former's terminal leave was computed solely on the basis of highest monthly salary.

In a First Indorsement to the COA Chairman on September 1, 1988, the CSC Chairman recommended the approval of the petitioner's request for payment of the money value of his terminal leave based on salary plus allowances.

On September 28, 1989, the COA rendered Decision No. 992 (hereinafter referred to as the COA decision) stating that "in line with the action taken by this Commission in the previous similar cases of former COA Commissioners Hermogenes P. Pobre and Silvestre D. Sarmiento," the COA "will interpose no objection" to the petitioner's claim.

Upon the petitioner's request for payment of terminal leave differential representing the unpaid COLA and RATA amounting to P111,229.04, the CSC Chairman informed the petitioner that the release of the corresponding advice of allotment and cash outlay to cover the payment of his terminal leave differential had already been requested from the Department of Budget and Management (DBM).

On January 25,1990, in a letter addressed to the CSC Chairman, the DBM denied the petitioner's request for payment of terminal leave differential for the following reasons, among others:

Faced with the DBM refusal to release the corresponding allotment, the CSC yielded to DBM instead of asserting its initial determination. It issued Resolution No. 90-514 dated May 30, 1990 wherein the Commission deemed it proper not to rule on the issue on "ethical considerations" and "compulsions of delicadeza" and advised the petitioner to file an action for declaratory relief (sic) on the issue with the Supreme Court.

Petitioner Borromeo sought reconsideration of CSC Resolution No. 90-514, reasoning that neither the CSC Resolution nor the opinion of the DBM Secretary could prevail over the COA decision which had become final and executory.

On October 18, 1990, the CSC issued Resolution No. 90-945 denying reconsideration of the petitioner's case. Inspite of the CSC Chairman's earlier approval of the claim for payment, the CSC ruled that the COA decision "has no sufficient legal mooring and therefore cannot be the basis for allowing payment of the claims." The Resolution likewise cited a June 13, 1990 letter from former Court Administrator Meynardo A. Tiro informing the CSC that "the money value of the terminal leave credits of the Justices of the Supreme Court and other members of the Judiciary is based only on the highest basic salary (plus longevity pay) but excluding RATA as certified to by our Director of Fiscal Management and Budget Office."

Hence, this petition.

The Secretary of Budget and Management was ordered impleaded by the Court in a resolution dated January 31, 1991.

The petitioner seeks the nullification of CSC Resolution Nos. 90-514 and 90-945. He urges that the COA decision which interposed no objection to the computation of his terminal leave pay based on salary plus allowances had already become final and executory since no timely appeal had been taken therefrom.

Respondent CSC, on the other hand, maintains that the COA decision is not final and conclusive since said decision merely stated that the COA will not interpose any objection to the payment of the petitioners claim. More importantly, respondent CSC adds, the determination of the legality of claims on leave matters is within the province of the CSC.

On this preliminary issue, the Court rules against the petitioner's assertion that the COA decision has become final and executory and, therefore, beyond review; that the DBM has no alternative but to obey it. Article IX-A Section 7 of the 1987 Constitution provides:

. . . Unless otherwise provided by this Constitution or by law, any decision, order or ruling of each Commission may be brought to the Supreme Court oncertiorariby the aggrieved party within thirty (30) days from receipt of a copy thereof.

The above-cited article refers to an aggrieved party raising a decision to this Court. Unfortunately for the petitioner, neither the Civil Service Commission nor the Secretary of Budget and Management may be viewed as an aggrieved party. The CSC is not an aggrieved party because it recommended the approval of the petitioner's request for payment of terminal leave computed on the basis of his monthly salary plus allowances and likewise interceded in behalf of the petitioner for the release of funds from the DBM. The COA upheld this initial position. Nor is the DBM an aggrieved party because it was not privy to the case before the COA. Moreover, even if the DBM was eventually apprised of the COA decision, the DBM's recourse was not to bring the matter on a petition forcertioraribefore the Court. As the agency tasked to release government funds, it simply ignored the COA ruling with which it disagreed. It refused to approve the release of allotment and outlay for terminal leave differential since in its opinion, payment thereof had no legal basis. The records do not show any authority of COA to compel acceptance of its ruling in this particular case.

The respondent CSC's stance, however, that it is the body empowered to determine the legality of claims on leave matters, to the exclusion of COA, is not well-taken. While the implementation and enforcement of leave benefits are matters within the functions of the CSC as the central personnel agency of the government, the duty to examine accounts and expenditures relating to leave benefits properly pertains to the COA. Where government expenditures or use of funds is involved, the CSC cannot claims an exclusive domain simply because leave matters are also involved.

The COA, the CSC, and the Commission on Elections are equally pre-eminent in their respective spheres. Neither one may claim dominance over the others. In case of conflicting rulings, it is the Judiciary which interprets the meaning of the law and ascertains which view shall prevail.

The basic question for the Court's consideration is whether or not RATA and COLA should be added to the highest monthly salary in computing the petitioner's terminal leave pay.

The petitioner anchors his claim on the Memorandum Order issued by President Marcos on November 20, 1980. Apparently, this Memorandum Order was also the basis for the COA decision, invoked by the petitioner as final and executory, interposing no objection to his claim for terminal leave differential. The Memorandum Order reads:

TO:	The Chairman Commission on Audit Quezon City

With reference to the request of that Office for clarification on the accumulated leave credits of retired Chairman Perez and Commissioners Duque and Bayot, I hereby direct that:

1. The computation of the terminal leave in question shall be computed on the basis of the total number of days of leave credits each accumulated by Chairman Perez and Commissioners Duque and Bayot on the day of their retirement, not on the basis of 300 days as provided in Sec. 1014 of P.D. 1587.

2. The money value of the terminal leave shall be paid as computed on the basis of the highest monthly salary including allowance received at the time of the retirement.

(Sgd.) FERDINAND E. MARCOS
President of the Philippines

November 20, 1980. (p. 27,Rollo)

The above Order was the former President's response to a July 7, 1980 query initiated by former COA Chairman Francisco A. Tantuico, Jr. seeking clarification from the Office of the President respecting the claim of retired Chairman Leonardo B. Perez and Commissioners Venancio S. Duque and Flores A. Bayot of the Commission on Elections for the payment of the money value of their accumulated leaves. Since the Memorandum order specifically applies to these three officials, then said Order cannot automatically benefit others not mentioned therein. While it has persuasive value as a matter of contemporaneous interpretation especially as regards Presidential Decrees or other presidential acts, we cannot confer upon this Order the status of a law of general application.

The petitioner also invokes Administrative Order No. 44 dated December 13, 1979, extending to the Chairman and members of the Constitutional Commissions the same benefits enjoyed by retiring members of the Judiciary in the matter of rationalized rate of allowances and liberalized computation of retirement benefits and accumulated leave credits.

The Solicitor General, acting on behalf of the CSC and Secretary of Budget and Management, advances the argument that there is no provision in Administrative Order No. 444, or in any other law, which expressly authorizes the inclusion of allowances in the computation of the money value of the petitioner's accumulated leaves.

The pertinent portions of Administrative Order No. 444 provide:

The law pertaining to retirement benefits respecting members of the Judiciary is Republic Act (R.A.) No. 910, as amended by Presidential Decree No. 1438, which reads:

x x x           x x x          x x x

"Sec. 3. Upon retirement, a justice of the Supreme Court or of the Court of Appeals, or a judge of the Court of First Instance, Circuit Criminal Court, Agrarian Relations, Tax Appeals, Juvenile and Domestic Relations, city or municipal court, or any other court hereafter established shall be automatically entitled to a lump sum of five years gratuity computed on the basis of the highest monthly salary plus the highest monthly aggregate of transportation, living and representation allowances he was receiving on the date of his retirement; . . . .

x x x           x x x          x x x

It is clear from RA 91 0 as amended that the five-year gratuity is based on highest monthly salary plus transportation, living and representation allowance. Should the computation of terminal leave pay, which is given on the same occasion of retirement and which arises from the same considerations of government gratitude that for most retirees is based on a lifetime of service, be accorded similar treatment?

The Solicitor General stresses that under Section 286 of the Revised Administrative Code, as amended by Republic Act No. 1081 and Executive Order No. 1077, the computation of the money value of the terminal leave pay is based only on monthly basic salary.

Section 286 of the Revised Administrative Code, as amended by RA No. 1081, states:

(Executive Order No. 1077 later amended Section 286 by removing the limitation on the number of days of vacation and sick leaves that a retiree may accumulate, although all employees are required to go on a minimum of five days vacation leave annually.)

The only provision in Section 286 of the Revised Administrative Code, as amended, which could seemingly support the Solicitor General's view is the above underlined clause which allows the "commutation of salary" of a government officer, employee or laborer.

"Commutation of salary" as used in Section 286 is, however, not the same as "commutation of leave credits." The former is applied for by an employeeduring employmentwhen he goes onordinary leave.Thus, if his Department Head allows it, the employee may receive his salary for the period of the vacation or sick leavebeforethe beginning of such leave; otherwise, he gets his salary only on the pay days covered by the vacation or sick leave period or upon returning to work. In contrast, commutation of leave credits, more commonly known as terminal leave, is applied for by an officer or employee who retires, resigns or is separated from the service through no fault of his own. (Manual on Leave Administration Course for Effectiveness published by the Civil Service Commission, pages 16-17). In the exercise of sound personnel policy, the Government encourages unused leaves to be accumulated. The Government recognizes that for most public servants, retirement pay is always less than generous if not meager and scrimpy. A modest nest egg which the senior citizen may look forward to is thus provided. Terminal leave payments are given not only at the same time but also for the same policy considerations governing retirement benefits.

Since terminal leave is applied for by an officer or employee who has already severed his connection with his employer and who is no longer working, then it follows that the terminal leave pay, which is the cash value of his accumulated leave credits, should not be treated as compensation for services rendered at that time. (Re: Request of Atty. Bernardo Zialcita, 190 SCRA 851 [1990]) It can not be viewed as salary for purposes which would reduce it. (supra) There can thus be no "commutation of salary" when a government retiree applies for terminal leave because he is not receiving it as salary. What he applies for is a "commutation of leave credits." It is an accumulation of credits intended for old age or separation from the service. Hence, Section 286 of the Revised Administrative Code is not applicable. It cannot be construed as limiting the basis of the computation of terminal leave pay to monthly salary only.

In the light of the reasons which impelled the law to include COLA and RATA in computing retirement benefits of certain officials, we rule that terminal leave payments must also be governed by the same principle. COLA and RATA should be included in computing the terminal leave credits when the officials retire or the official relationship is lawfully terminated.

The Solicitor General cites our ruling inParedes v. Acting Chairman,116 SCRA 176 [1982] to support his position.

Commonwealth Act (CA) No. 186, as amended, provides for the retirement of government employees, other than members of the Judiciary, Constitutional Commissions and those whose retirement is not covered by special law. Section 12(c) of CA 186 reads:

Under the last sentence, officials and employees retired under CA 186, as amended, shall be entitled to the commutation of the vacation and sick leave credits based on thehighest rate received.

InParedes v. Acting Chairman, supra,the Court construed the phrase "highest rate received" as referring to the retiree's "highest monthly salary":

The petitioner in that case was a former Assistant City Auditor of Manila who sought to have his RATA included in the computation of his terminal leave pay. The Court therein held that it "allowances are not considered part of salary for purposes of retirement and payment of the money value of terminal leave."

It must be noted, however, that the Court, in that case, construed "highest rate received" as highest monthly salary mainly because the retirement gratuity received by employees under Section 12(c) of CA 186 is based only onmonthly salary.Thus, under the aforementioned provision, the benefit for employees shall be "a gratuity equivalent to one month'ssalaryfor every year of the first twenty years of service, plus one and one-half month's salary for every years of service over 20 but below 30 years and two month'ssalaryfor every year of service over thirty years . . .based on the highest rate received. . . Officials and employees retired under this act shall be entitled to the commutation of the unused vacation and sick leave,based on the highest rate received. . . ." (Emphasis supplied.)

A reading of Section 12(c) of CA 186 therefore reveals an intent on the part of the legislature to provide a uniform basis in computing both the retirement gratuity and the terminal leave pay. In CA 186, that uniform basis issalary.

A different law, R.A. 910 as amended, governs the petitioner. In the case of members of the Judiciary and Constitutional Commissions, the basis in computing the retirement gratuity is the highest monthly salaryplus the highest monthly aggregate of transportation, living and representation allowance (COLA and RATA).The same rule of uniformity which we applied inParedes v. Acting Chairmanfor those retiring under CA 186 as amended should also apply for those who retire under R.A. 910 as amended. The rate used in computing retirement gratuities also applies in the computation of terminal leave credits.

It is axiomatic that retirement laws are liberally construed and administered in favor of the persons intended to be benefited. All doubts as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian purposes.ℒαwρhi৷(In Re: Amount of the Monthly Pension of Judges and Justices starting from the Sixth year of their Retirement and after the Expiration of the Initial Five-Year Period of Retirement, 190 SCRA 315 [1990]; Ortiz v. Commission on Elections, 162 SCRA 812 [1988]; Bautista v. Auditor General, 104 Phil. 428 [1958])

Although terminal leave pay is not synonymous with, and is not a part of, the five-year lump sum gratuity provided under RA 910 as amended and Administrative Order No. 444, the former may, in a broad sense, partake of the nature of a gratuity rather than actual salary. A gratuity is that paid to the beneficiary for past services rendered purely out of generosity of the giver or grantor. (Peralta v. Auditor General, 100 Phil 1051 [1957]) It is a mere bounty given by the government in consideration or in recognition of meritorious services and springs from the appreciation and graciousness of the government. (Pirovano v. De La Rama Steamship Co., 96 Phil. 335, 357 [1954]) While it is true that vacation and sick leave credits are earned during one's period of employment, they are, by their very nature and purpose, supposed to be enjoyed or exhausted during employment. When these accumulated leave benefits are allowed to be accumulated, not to be paid while one is working but to be reserved for old age, then this constitutes the gratuity.

Through the years, laws pertaining to accumulation of leave credits show a liberal trend with a view to favoring the retiring employee. Under Act 2711 (dated March 10, 1917), accumulated leaves that may be commuted cannot exceed 5 months. Republic Act No. 1081 (dated June 15, 1954) increased the limit from 5 to 10 months. With the passage of Executive Order No. 1077 on January 9, 1986, the retiring employee became entitled to the commutation ofallaccumulated vacation and sick leaves to his credit, without limitation as to the number of days of vacation and sick leave that he may accumulate.

Since terminal leave pay may also be considered a gratuity, then applying the rule on liberal interpretation of retirement laws, the basis for its computation in the case of members of the Judiciary and Constitutional Commissions must be the same as that used in computing the 5-year lump sum gratuity under RA 910 as amended and Administrative Order No. 444.

The Court is cognizant of the incongruity that may ensue if the terminal leave pay of members of the Judiciary and Constitutional Commissions is computed only on the basis of highest basic monthly salary.

If, for example a member of the CSC has an accumulated leave credit of one month and, in the two months immediately prior to retiring, consumes his accumulated leaves by going on fifteen days' vacation leave twice, there is no dispute that he will be paid two months' salaryplus COLA and RATAfor this two-month period, although no work has been rendered by him. If, on the other hand, he chooses to work until the last day of employment and upon retirement, applies for the commutation of his accumulated leave credit of one month, following the proposition of the Solicitor General, he will receive terminal leave pay equivalent only to one month's salary,without COLA and RATA.In the latter case, why should he be penalized for faithfully working continuously and not consuming his leave credits until his last working day? Why should the basis for the commutation of leave credits be different just because he chose to avail himself of his leave benefits immediately before and not immediately after retirement? Surely this disparity in consequence could not have been intended by our lawmakers.

There is more reason now to include COLA in the computation of terminal leave pay.1âwphi1Section 12 of Republic Act 6758, known as the Compensation and Position Classification Act of 1989, mandated the integration of COLA to the basic salary and, therefore, to the retirement pay of all employees. While it is true that RA 6758 took effect only on July 1, 1989, long after petitioner had already retired on April 1, 1986, his COLA should nevertheless have been included in computing terminal leave pay for the same reasons stated above.

InRe:Request of Atty. Bernardo Zialcita, supra,the affected agency filed a motion for partial reconsideration stressing that the benefits of our ruling should not be open-ended and made to apply retroactively to all the unknown and uncomplaining persons who may have retired as far back as decades ago. We provided a cut-off date. The same practical considerations and budgetary restraints constrain the Court to impose a cut-off date for claims for terminal leave differentials. The Court therefore, rules that the inclusion of COLA and RATA as basis in arriving at terminal leave pay shall apply only to those qualified members of the Judiciary and Constitutional Commissions who retired or shall retire on or after the change of government in February, 1986.

WHEREFORE,the petition is herebyGRANTED.Resolutions 90-514 and 90-945 issued by the Civil Service Commission are set aside. The Secretary of Budget and Management is ordered to release the corresponding allotment and cash outlay for the terminal leave differential claimed by the petitioner. The terminal leave pay of qualified members of the Judiciary and Constitutional Commissions who retired or shall retire on or after the February, 1986 political upheaval shall be based on highest monthly salary plus COLA and RATA.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.