10/27/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 481

*
A.M. No. 01-1-04-SC-PHILJA. January 31, 2006.

RE: CLARIFYING AND STRENGTHENING THE

ORGANIZATIONAL STRUCTURE AND
ADMINISTRATIVE SETUP OF THE PHILIPPINE
JUDICIAL ACADEMY

Administrative Law; Department of Budget and Management

(DBM); The task of the Department of Budget and Management
(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

_______________

* EN BANC.

2 SUPREME COURT REPORTS ANNOTATED

Re: Clarifying and Strengthening the Organizational Structure

and Administrative Set-Up of the Philippine Judicial Academy

to the policies and guidelines issued in accordance with applicable

laws.”—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
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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.”
Same; Same; Words and Phrases; Fiscal Autonomy; Fiscal
autonomy means freedom from outside control. In downgrading
the positions and salary of SC Chief Judicial Staff Officer and SC
Supervising Judicial Staff Officer in the PHILJA, the DBM
overstepped its authority and encroached upon the Court’s fiscal
autonomy and supervision of court personnel as enshrined in the
Constitution, in fine, a violation of the Constitution itself.—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 on fiscal
autonomy and Article VIII, Section 6 on administrative
supervision over court personnel. Fiscal autonomy means freedom
from outside control. As the Court explained in Bengzon v. Drilon:
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

VOL. 481, JANUARY 31, 2006 3

Re: Clarifying and Strengthening the Organizational

Structureand Administrative Set-Up of the Philippine Judicial
Academy

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
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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.
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 Court’s fiscal autonomy and supervision of
court personnel as enshrined in the Constitution; in fine, a
violation of the Constitution itself.

ADMINISTRATIVE MATTER in the Supreme Court.

Request for the Retention of the Position Titles and Salary
Grades of SC Chief Judicial Staff Officer and Supervising
Judicial Staff Officer.

The facts are stated in the resolution of the Court.

RESOLUTION

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
4

4 SUPREME COURT REPORTS ANNOTATED

Re: Clarifying and Strengthening the Organizational
Structure and Administrative Set-Up of the Philippine
Judicial Academy
1
(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, respectively,
were created in the following Divisions of the PHILJA:

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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 Position Title/SG Remarks

A.M. No. 01-1-04-SC per DBM NOSCA
SC Chief Judicial Administrative Title downgraded
Staff Officer/ SG 25 Officer V/SG 24 and SC reduced
Supervising Judicial Administrative Title downgraded
2
Staff Officer/SG 23 Officer IV/ SG 22 and SC reduced

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

_______________

1 Said Resolution took effect on June 15, 2004.

2 Memorandum of PHILJA Chancellor Justice Ameurfina A. Melencio-
Herrera dated October 10, 2005, p. 1.

VOL. 481, JANUARY 31, 2006 5

Re: Clarifying and Strengthening the Organizational
Structure and Administrative Set-Up of the Philippine
Judicial Academy

Officer and Supervising Judicial Staff Officer, in light of

the NOSCA issued by the DBM downgrading said
positions. Chancellor Melencio-Herrera invoked the Court’s
Resolution of November 21, 1995 (Re: Requests for
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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
3
corresponding change in
Position Titles, if Warranted),

_______________

3 The Court issued the Resolution of November 21, 1995 “in the exercise
of its fiscal autonomy under the 1987 Constitution with the corresponding
power to institute a compensation structure inherently distinct for the
Judiciary but conforming as closely as possible with the principles under
Republic Act No. 6758,” and resolved to approve the upgrading of salaries
of the following positions:

(a) Chief Justice Staff Head—from Salary Grade 28 to Salary Grade 29;
and
(b) Judicial Staff Head (Office of the Chief Justice and Office of the
Associate Justices)—from Salary Grade 27 to Salary Grade 28 and

(2) the change of position titles and upgrading of salaries of the

following:

(a) Director IV (Chief, Fiscal Management and Budget Office) to SC

Chief, Fiscal Management and Budget Office—from Salary Grade 28
to Salary Grade 29;
(b) Director III (Assistant Chiefs of Offices, Office of Administrative
Services, Office of the Chief Attorney, Office of the Judicial Records,
Office of the Bar Confidant, Office of the Reporter, Fiscal Management
and Budget Office, and Office of the Management Information
Systems Office) to SC Assistant Chief of Office—from Salary Grade 27
to Salary Grade 28;
(c) Director III, Office of the Court Administrator to SC Senior Chief Staff
Officer, Office of the Court

6 SUPREME COURT REPORTS ANNOTATED

Re: Clarifying and Strengthening the Organizational
Structure and Administrative Set-Up of the Philippine
Judicial Academy

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
Court’s 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
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10/27/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 481

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 Court’s Resolution dated October
18, 2005 referring the Memorandum of Justice Melencio-
Herrera for evaluation, report and recommendation, Atty.
Edna E. Diño, 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 Court’s
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

_______________

  Administrator to SC Senior Chief Staff Officer, Office of the Court

Administrator—from Salary Grade 27 to Salary Grade 28;
(d) Chief of Division to SC Chief Judicial Staff Officer—
  from Salary Grade 24 to Salary Grade 25; and
(e) Assistant Chief of Division to SC Supervising Judicial Staff Officer—
  from Salary Grade 22 to Salary Grade 23.

VOL. 481, JANUARY 31, 2006 7

Re: Clarifying and Strengthening the Organizational
Structure and Administrative Set-Up of the Philippine
Judicial Academy

exercise of its constitutional mandates of fiscal autonomy

4
and administrative supervision over court personnel.”
We sustain the recommendation of Atty. Diño.
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
5
is consistent with
applicable laws and regulations. The task of the DBM is
simply to review the compensation and benefits plan of the
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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
6
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 even more limited, circumscribed as it is by
the provisions
7
of the Constitution, specifically Article VIII,
Section 3 on fiscal autonomy and Article VIII, Section

_______________

4 Report of the Office of the Chief Attorney, p. 8.

5 See Commission on Human Rights Employees’ Association (CHREA)
v. Commission on Human Rights, G.R. No. 155336, No-vember 25, 2004,
444 SCRA 300.
6 Philippine Retirement Authority (PRA) v. Buñag, 444 Phil. 859, 869-
870; 397 SCRA 27, 35 (2003).
7 Sec. 3. The Judiciary shall enjoy fiscal autonomy. Appropriations for
the Judiciary may not be reduced by the Legislature below the amount
appropriated for the previous year and, after approval, shall be
automatically and regularly released.

8 SUPREME COURT REPORTS ANNOTATED

Re: Clarifying and Strengthening the Organizational
Structure and Administrative Set-Up of the Philippine
Judicial Academy
8
6 on administrative supervision over court personnel.
9
Fiscal autonomy means freedom from outside
10
control. As
the Court explained in Bengzon v. Drilon:

“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

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10/27/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 481

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

_______________

8 Sec. 6. The Supreme Court shall have administrative supervision over all
courts and the personnel thereof.
9 Bengzon v. Drilon, G.R. No. 103524, 15 April 1992, 208 SCRA 133, 150, later
reiterated in Blaquera v. Alcala, 356 Phil. 678, 764; 295 SCRA 366, 447 (1998) and
Commission on Human Rights Employees’ Association (CHREA) v. Commission on
Human Rights, supra, at p. 316.
10 Supra.

VOL. 481, JANUARY 31, 2006 9

Re: Clarifying and Strengthening the Organizational Structure
and Administrative Set-Up of the Philippine Judicial Academy

that this grant

11
of autonomy should cease to be a meaningless
provision.”

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
itsauthority and encroached upon the Court’s fiscal
autonomyand supervision of court personnel as enshrined
in the Constitution; in fine, a violation of the Constitution
itself.

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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

_______________

11 Bengzon v. Drilon, supra, at pp. 150-151.

10

10 SUPREME COURT REPORTS ANNOTATED

Re: Clarifying and Strengthening the Organizational Structure
and Administrative Set-Up of the Philippine Judicial Academy

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. x x x
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.
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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
12
and salary grades stated in the NOSCA
for the same positions.”

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 im-

_______________

12 Report dated December 1, 2005, pp. 6-8.

11

VOL. 481, JANUARY 31, 2006 11

Re: Clarifying and Strengthening the Organizational
Structure and Administrative Set-Up of the Philippine
Judicial Academy

plement the Resolutions of the Court dated February 24,

2004 and July 5, 2005.
SO ORDERED.

          Panganiban (C.J.), Puno, Quisumbing, Ynares-

Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez,
Corona, Carpio-Morales, Azcuna, Tinga, Chico-Nazario and
Garcia, JJ., concur.
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Resolution of July 5, 2005 retaining 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 Philippine Judicial Academy, reiterated.

Notes.—The regulatory power of the DBM on matters of

compensation is encrypted not only in law, but in
jurisprudence as well. (Commission on Human Rights
Employees’ Association [CHREA] vs. Commission on
Human Rights, 444 SCRA 300 [2004])
Department of Budget and Management (DBM) has the
power and discretion to administer the compensation and
position classification system of the national government.
(Ibid.)

——o0o——

12

12 SUPREME COURT REPORTS ANNOTATED

Re: Final Report on the Financial Audit Conducted at the
Municipal Trial Court of Midsayap, North Cotabato

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