Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH (15) CONGRESS
First Regular Session

HOUSE BILL NO._ 4733

Introduced by HON. FERNANDO V. GONZALEZ

EXPLANATORY NOTE

In 2003, the Congress enacted Republic Act No 9227, AN ACT
GRANTING ADDITIONAL COMPENSATION IN THE FORM OF
SPECIAL ALLOWANCES FOR JUSTICES, JUDGES, AND ALL OTHER
POSITIONS IN THE JUDICIARY WITH THE EQUEVALENT RANK OF
JUSTICES OF THE COURT OF APPEALS AND JUDGES OF THE
REGIONAL TRIAL COURT, AND FOR OTHER PURPOSES.

The objective for the passage of the law is based on the declared
policy of the State to adopt measures to guarantee the independence of the
Judiciary as mandated by the Constitution and public policy. and to ensure
the impartial administration of justice, as well as an etiective and efficient
system worthy of public trust and confidence (See. 1, RA 92271

The Constitution grants the Judiciary fiscal autonomy. It further
provides that any appropriation for the Judiciary may not be reduced by the
legislature below the amount appropriated for the previous year and. after
approval, shal! be automatically and regularly released (See, 3, Art. FHL
Constitution).


‘The special allowance granted by RA 9227 to the justices and judges
is mandated to be funded by the legal fees prescribed, imposed. and
collected under Rule 141 of the Rutes of Court, prior to the promulgation of
the amendments under Presidential Decree No. 1949, and from the increases
in fees which may be imposed by the Supreme Court. Any deficiency from
the funding that may be generated by the Supreme Court and other inferior
courts shali be funded from a subsidy to be provided by the National
Government in an amount not exceeding One hundred sixty-five million
pesos (PhP165,000,000.00) (Sec. 3. RA 9227).

Any surplus in the funds generated by the Supreme Court and other
inferior courts after payment of the special allowances to the justices and
judges may be used by the Chief Justice of the Supreme Court to grant
additional allowances exclusively to other court personnel not covered by
the benefits granted under RA 9227 (See. 3. ibid).

The grant of special allowances to justices and judges under RA 9227
was without prejudice to any allowance already enjoyed by them pursuant to
Presidential Decree No. !949, which created the Judicial Development Fund
(Sec. 4, ibid.}.

The contingent subsidy in the amount not exceeding One hundred
sixty-five million pesos (PhP165,000,000.00) as mandated by RA 9227 is a
laudable investment in the enhancement of the independence of the Judiciary
which the State has endeavored since the passage of PD 1949 in 1984. The
contingent subsidy is also an investment in the deferment of increases in
legal fees that the Supreme Court is authorized by the Constitution and the
law to prescribe and impose upon litigants before the courts, whence the
special allowances shal! be sourced out.

The Judiciary is a linchpin of economic development through the
observance of the rule of law. It is only under a regime of the rule of law
that the predictability of outcomes of business transactions can be achieved.
The doctrine of predictability of outcomes of business transactions is a major
factor which investors, foreign and local, consider in a country’s potential as
an investment haven. Indeed, the State must sustain its endeavor to uphold
and enhance the independence of the Judiciary and the impartial
administration of justice through an effective and efficient system worthy of
public trust and confidence. if only to ensure the rule of law.


Further, the State must likewise endeavor to attract the best and the
brightest in the legal profession into service in the Judiciary by offering a
package of compensation or benefits which can approximate the lucrative
income that the private practice of law has to offer. Towards this end. the
granting of special allowances under RA 9227 is one such good strategy.

However, RA 9227 has a sunset provision, under Section 6 thereof,
which gives the impression that the avowed purpose for the passage of the
law is only for a limited period of time. Such sunset provision is likewise
asymmetrical with the spirit of the law itself which provides that the grant of
the special allowance shall be without prejudice to the benefits which the
justices and judges already enjoy pursuant to PD 1949. Too, Sec. 6
seemingly goes against the grain of the constitutional provision on fiscal
autonomy including the provision which states that x x x any appropriation
for the Judiciary may not be reduced by the legislature below the amount
appropriated for the previous year and, afler approval, shall be automatically
and regularly released.

Sec, 6 of RA 9227 provides that in the event of subsequent increases
in the salary rates provided under Republic Act No. 6758, as amended. the
special allowances granted under RA 9227 x x x shal! be considered as an
implementation of the said salary increases as may be provided by law and
the special allowance equivalent to the salary increase shall be converted as
part of the basic salary while any excess in the amount of special allowance
not converted as part of the basic salary shail continue to be granted as such.
This provision inevitably results in the diminution of the special allowance
and its eventual phase out in the course of future salary increases, as what
had actually happened in July. 2007. Executive Order No. 611 provided for
a ten percent (10%) increase over the basic monthly salaries of civilian
government personnel whose positions are covered by the Compensation
and Position Classification System under R.A. No. 6758 effective July 1.
2007. When the same was implemented in the judiciary, a percentage of the
Special Allowance for the Judiciary (SAJ) being received by incumbent
justices, judges and officials with equivalent rank of CA justices or RTC
judges were converted as part of the basic salary to correspond to the 10%
increase in the basic salary authorized under E.O No. 611. As a result, the
monthly SAI of incumbents were correspondingly decreased by 10%.
Furthermore, the conversion of the 10% monthly SAS to basic salary has in
fact decreased the monthly income of incumbent justices, judges and


judiciary officials of equivalent rank, since the 10% increase in their salary,
formerly part of their SAJ. is now subject to income taxation.

In the same vein, any salary increase that the National Government
shall grant to all government employees will no longer be felt or enjoyed by
the justices and judges who were previously entitled to the special
allowance. More so, the surplus or savings that may be generated by the
shift from the special allowance to the basic salary of the justices and judges
may then be disbursed by the Chief Justice in favor of other court personnel
not previously enjoying the special allowance, who will necessarily be
beneficiaries too of the salary increase; a double windfall indeed. For the
justices and judges, the scenario under See. 6 is a classic example of “what
the right hand gives, the left hand takes away”.

Justices of the Court of Appeals and judges of the Regional Trial
Courts bear greater responsibilities than some other court personnel or even
other national government employees. They, whose lives and limbs are
often on-the-line in the performance of their duties, more often than not,
have to fend for themselves security-wise. The grant of special allowance
will somehow mitigate the extra burden that the justices and judges have wo
bear.

In light of the foregoing considerations, there is a need to address the
asymmetry with which Sec. 6 bears on the avowed, and certainly laudable.
purposes for the enactment of RA 9227, which the State must not waver in
its advocacy therefor.

May [ therefore vigorously urge the passage of this measure.

FERNAN V. INZALEZ
Representative, 3"\District, Albay


bee

HOUSE OF REPRESENTATIV!
Quezon City

FIFTEENTH (157) CONGRESS
First Regular Session

HOUSE BILL No. _ 4733

Introduced by HON. FERNANDO V. GONZALEZ

AN ACT AMENDING SECTION 6 OF REPUBLIC ACT NUMBERED
9227 [AN ACT GRANTING ADDITIONAL COMPENSATION IN THE
FORM OF SPECIAL ALLOWANCES FOR JUSTICES, JUDGES, AND
ALL OTHER POSITIONS IN THE JUDICIARY WITH THE
EQUIVALENT RANK OF JUSTICES OF THE COURT OF APPEALS
AND JUDGES OF THE REGIONAL TRIAL COURT, AND FOR
OTHER PURPOSES] AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the
Philippines in Congress Assembled:

SECTION 3. Declaration of Policy. — It is hereby declared a policy of the
State to pursue a continuing endeavor to uphold and enhance the
independence of the Judiciary towards the end of institutionalizing the
principle of the rule of law as an essential component mechanism for the
economic development of the country .

SECTION 2. Amendatory Provision. — Section 6 of Republic Act
Numbered 9227 is hereby amended to read, as follows, to wit:


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Section 6. Etfects of Subsequent Salary Increase. Upon the
implementation of any subsequent increase in the salary rates
provided under Republic Act No. 6758, as amended, all special
allowances granted under this Act to justices, judges and all other
positions in the Judiciary with the equivalent rank of justices of the
Court of Appeals and judges of the Regional Trial Court as authorized
under existing laws and any additional allowance granted to other
personnel of the Judiciary shall not be diminished thereby and shall
not be considered as an implementation of the said salary increases as
may be provided by law.

SECTION 3. Retroactive Effect. The effectivity of this Act shalt retroact
to the time of the passage. approval, and effectivity of Republic Act No.
9227. Any such allowance of the justices, judges and all other positions in
the Judiciary with the equivalent rank of justices of the Court of Appeals and
judges of the Regional Trial Court adversely affected or diminished as a
result of salary increases subsequent to the passage of that law shall be paid
to the concerned personnel of the Judiciary and to he sourced out from the
aggregate savings generated by the Supreme Court and all other inferior
courts as at the time of the effectivity of this Act, or in case of deficiency
thereof, from the savings of the National Government, provided further, that
in case these sources of funds shall not be sufficient to cover the special
allowance differential, from the General Fund of the National Government
through a special appropriation as may be requested by the Department of
Budget and Management.

Within the period of Six (6) months from the effectivity of this Act.
the Supreme Court shail submit to the Deparment of Budget and
Management a report of savings of the Judiciary available for payment of
the special allowance differential. and within the same period of time trom
receipt of the report, the Department of Budget and Management shall
release to the Supreme Coun such amount as may be available from the
savings of the National Government, and the remainder to be covered by 2
special appropriation that the Department of Budgct and Management shall
request from the Congress.

SECTION 4. Issuance of Implementing Guidelines. — The Supreme Court
and the Department of Budget and Management shall issue the necessary
guidelines for the proper impiementation of this Act within Ninety (90) days
from the effectivity hereof.


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SECTION 5. Repealing Clause. — Al! laws, decrees, orders, rules and
regulations or parts thereof which are inconsistent with the provisions of this
Act are hereby repealed or modified accordingly.

SECTION 6. Separability Clause. - If any provision of this Act is declared
invalid or unconstitutional, the provisions not affected shail contioue to be in
full force and effect.

SECTION 7. Effectivity Clause. — This Act shall take effect Fifteen (15)
duys after its publication in at least Two (2) national newspapers of general
circulation,

Annroved