Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 127301             March 14, 2007

DEPARTMENT OF BUDGET AND MANAGEMENT AND HONORABLE SECRETARY SALVADOR M. ENRIQUEZ, JR., Petitioners
vs.
THE CITY GOVERNMENT OF CEBU, Respondent.

D E C I S I O N

AZCUNA, J.:

This is a petition for review on certiorari of the Resolution of the Court of Appeals (CA) dated November 20, 1996 denying petitioners’ motion for clarification of the Decision of the CA promulgated on February 22, 1996.

The facts are:

Respondent City Government of Cebu, through an appropriation ordinance, granted additional allowances to the judges and fiscals of the city in an amount more than P1,000 per month.

On November 14, 1994, Atty. Carmelita P. Cabahug, City Auditor of Cebu, in her first indorsement, disallowed in post audit the grant of additional allowances to judges and fiscals for being in violation of Local Budget Circular No. 55, dated March 15, 1994, issued by petitioner Department of Budget and Management (DBM).

On August 9, 1993, respondent passed and approved Ordinance No. 1468, which provided appropriations for the salary adjustments of department heads and assistant department heads.

According to petitioners, Ordinance No. 1468 would cover salary differentials and adjustments of the salaries of the city officials and employees in the full implementation of a seventh-step increase (from second step to eighth step) of their salary schedule for the period of 1993, contrary to the provisions of DBM Regional Memorandum Circular No. 92-1.

Regional Memorandum Circular No. 92-1,1 dated March 23, 1992, disallowed the granting on a full implementation ("one-shot" affair) basis of the eighth step of the Salary Schedule of Joint Circular No. 36,2 since it violated Republic Act (RA) No. 67583 and CSC-DBM Joint Circular No. 1 mandating that the grant of step increments must be based on merit and/or length of service. Regional Memorandum Circular No. 92-1 enjoined the local government units, including respondent, that have granted step increments/salary increases not in accordance with CSC-DBM Joint Circular No. 1 to adjust said salary increase and any excess received by incumbents should be returned/refunded accordingly.

On May 19, 1993, respondent passed and approved Ordinance No. 1450, which abolished the positions of Legal Officers III and IV and created ten Assistant City Attorneys and accordingly upgraded the salaries of said legal officers from P6,798 and P8,250, respectively, to P10,130.20 per month effective June 1, 1993.

In a letter dated September 14, 1993, Cebu City Mayor Tomas R. Osmeña requested the DBM Secretary’s approval, through Ordinance No. 1450, for the reclassification of two Legal Officer IV (Salary Grade 22) and eight Legal Officer III (Salary Grade 20) to Assistant City Attorney (proposed Salary Grade 24), under the Office of the City Legal Officer.

In a letter-reply4 dated November 19, 1993, DBM Secretary Salvador M. Enriquez, Jr. impliedly disallowed the ordinance, thus:

x x x

An evaluation of the justification/documents submitted and the present organizational structure of the City based on existing classification standards/criteria under RA 6758 reveals the following:

1. The City Attorney, classified as City Government Department Head I is assisted by an Assistant City Attorney, classified as City Government Assistant Department Head I;

2. The 2 LO IV are actually chiefs of divisions, each supported by 4 LO III; and

3. The CLO performs court litigation activities for civil/administrative cases and legal counseling tasks.

In view of the foregoing and based on the changes in the classification of the positions of local executives for a highly urbanized City like Cebu under JCLGPA Bulletin No. 10 dated March 7, 1991, the positions under the CLU are reclassified as follows:

F r o m T o

------------------------------ -------------------------

No. of Salary Salary

Pos. Position Title Grade Position Title Grade

-------- ----------------- --------- ---------------- --------

1 City Government 25 City Government 26

Department Head I Department Head II

1 City Government 23 City Government 24

Assistant Depart- Assistant Depart-

ment Head I ment Head II

2 Legal Officer IV 22 Attorney IV 23

x x x

The proposed salary grade assignment at SG-24 for the two (2) Legal Officer IV positions is not feasible since if allowed [it] will result in an overlap with that of the City Government Assistant Department Head, their immediate supervisor, which is SG-24. x x x

On February 2, 1995, respondent City Government of Cebu filed a petition for certiorari with this Court assailing the legality of the following:

(1) DBM Local Budget Circular No. 55 dated March 15, 1994 which set the guidelines on compensation and position classification in the Local Government Units, particularly Cebu City in this instance, vis-a-vis the granting of additional allowances and other benefits to national government officials and employees assigned within its jurisdiction in the form of honorarium at rates not exceeding P1,000;

(2) DBM Regional Memorandum Circular No. 92-1 dated March 23, 1992 enjoining respondent, among other local government units, from granting step increments/salary increases not in accordance with CSC-DBM Joint Circular No. 1 and requiring the same to adjust the salary increase and the incumbents to return/refund accordingly any excess received by them; and

(3) the letter-reply dated November 19, 1993.

In a Resolution dated June 20, 1995, this Court en banc resolved to refer the case to the CA pursuant to Revised Administrative Circular No. 1-95.

In its Decision promulgated on February 22, 1996, the CA denied the petition for lack of merit.

As to the issue on the validity of Local Budget Circular No. 55 dated March 15, 1994, the CA ruled that the arguments of respondent are without merit as petitioners denied that they disallowed the grant, through an appropriation ordinance, of more than P1,000 additional allowances to judges and prosecutors. Petitioners explained that while Local Budget Circular No. 55 indeed prohibits the grant of additional allowances in an amount more than P1,000, the Circular, however, does not apply to the appropriation ordinance of respondent because it was passed before the effectivity of the Circular.

Next, Regional Memorandum Circular No. 92-1, which respondent alleged to have been issued in excess of the authority granted to DBM and alleged to militate against the autonomy of the local government units to fix the compensation of their employees, was held to be valid by the CA.

The CA ruled:

Republic Act No. 6758, otherwise known as Compensation and Position Classification Act of 1989 expressly directed respondent DBM to establish and administer a Unified Compensation and Position Classification System that shall be applied to all government entities.

The law likewise authorized respondent DBM to promulgate rules and regulations relative to grant of step increments. Section 13 of R.A. 6758 reads:

"Sec. 13. Pay Adjustments.—Paragraphs (b) and (c), Section 15 of Presidential Decree No. 985 are here amended to read as follows:

x x x

(c) Step Increments – Effective January 1, 1990 step increments shall be granted based on merit and/or length of service in accordance with rules and regulations that will be promulgated jointly by the DBM and the Civil Service Commission."

Pursuant to Section 13 of R.A. No. 6758, respondent DBM issued [Regional] Memorandum Circular No. 92-1 which disallowed any grants by any local government units of step increments not based on merit and length of service. The circular reads:

"2.0. In line with this, the Secretary of Budget and Management issued a memorandum directing that the opinion/views of the Executive Director of the Bureau of Local Government Supervision, JCLGPA, should be set aside/inasmuch as granting full implementation (one-shot affair) of the 8th step of the Salary Schedule of Joint Commission Circular No. 36 is not allowed under the Salary Standardization Law. Furthermore, such step increment/step increase is not in accordance with the provisions of CSC-DBM Joint Circular #1, which allows the grant of merit and longevity pay."

x x x

It is very evident from R.A. No. 6758 that grants of step increments must be based on merit and length of service.

[Regional] Memorandum Circular No. 92-1 issued by respondent DBM disallowed only grants of step increments not based on merit and length of service. [Regional] Memorandum Circular No. 92-1 is well within the mandate of R.A. No. 6758. The acts of respondent DBM is well within the purview of R.A. No. 6758. Respondent DBM did not exceed its authority.

Neither can it be said that the issuance of [Regional] Memorandum Circular No. 92-1 undermines the authority of the petitioner’s power of local autonomy.

Indeed under R.A. No. 7160, local government units like petitioner are with powers to determine the compensation of their local officials and employees. However, the powers granted under R.A. No. 7160 is not without any limitations. R.A. No. 7160 mandates that any increases in compensation are subject to certain conditions one of which is that it may be based upon the pertinent provision of R. A. No. 6758. Section 81 of R.A. No. 7160 reads:

"Sec. 81. Compensation of Local Officials and Employees. The compensation of local officials and personnel shall be determined by the sanggunian concerned: Provided, That the increase in compensation of elective local officials shall take effect only after the terms of office of those approving such increase shall have expired: Provided, further, That the increase in compensation of the appointive officials and employees shall take effect as provided in the ordinance shall not exceed the limitations on budgetary allocations for personal services provided under Title Five, Book II of this code: Provided, finally, That such compensation may be based upon the pertinent provisions of Republic Act Numbered Sixty-seven fifty-eight, (R.A. No. 6758), otherwise known as the ‘Compensation and Position Classification Act of 1989’."

As earlier pointed out, R.A. No. 6758 provides that step increments must be based on merit and length of service, as required by respondents in their [Regional] Memorandum Circular No. 92-1.

On these premises therefore, We conclude that [Regional] Memorandum Circular No. 92-1 is a valid issuance.5

As regards Ordinance No. 1468, the CA ruled that it does not violate Regional Memorandum Circular No. 92-1, thus:

. . . Ordinance No. 1468 increased the salary of concerned personnel not through a step increment but through changes in position titles and in their corresponding salary grades. The position titles of Department Heads and Assistant Department Heads were changed. Correspondingly, a change in salary grades, in this case, from a lower grade to a higher grade. Correspondingly, an increase in salary. This is not step-increment. The salary increased because the position titles and salary grades were changed. Ordinance No. 1468 is not a grant of step-increment. Therefore, its passage cannot be in violation of Memorandum Circular No. 92-1.6

Further, the CA declared as void Ordinance No. 1450, which abolished the existing positions of Legal Officers III and IV and mandated the creation of Assistant City Attorney with a monthly salary of P10,135. The CA reasoned that allowing the ordinance would result in the overlap of the salary grade of both the City Government Assistant Department Head (Salary Grade 24) and the proposed Assistant City Attorneys (Salary Grade 24) in violation of the State policy to provide equal pay only for substantially equal work under R.A. No. 6758.7

The dispositive portion of the Decision reads:

WHEREFORE, foregoing considered, the petition is hereby DENIED for lack of merit. Memorandum Circular No. 55 dated November 19, 1993, Regional Memorandum Circular No. 92-1 dated March 23, 1992 and letter dated November 19, 1993 disapproving Special Ordinance No. 1450 are declared VALID and EFFECTIVE.

Further, Ordinance No. 1468 and the appropriation ordinance increasing the allowances of judges and prosecutors issued by the petitioner are likewise declared valid.

Petitioner’s Ordinance No. 1450 is hereby declared VOID for being violative of R.A. No. 6758.

SO ORDERED.8

In a motion dated July 2, 1996, petitioner DBM sought clarification of the Decision of the CA pertaining to Cebu City Ordinance No. 1468 in view of the seeming conflict between the declaration of validity of the ordinance and Bulletin No. 10 dated March 7, 1991 of the Joint Commission on Local Government Personnel Administration (JCLGPA). Petitioner prayed that Ordinance No. 1468, insofar as it upgrades the position of Cebu City Government Assistant Department Heads from Salary Grade 24 to Salary Grade 25 and Cebu City Government Department Heads from Salary Grade 26 to Salary Grade 27, be declared void for being contrary to Bulletin No. 10 dated March 7, 1991.

In a Resolution dated November 20, 1996, the CA denied for lack of merit the motion for clarification of petitioners, thus:

x x x

On March 15, 1996, our questioned decision became final and executory as per entry of Judgment dated June 5, 1996 (p. 199, Rollo). The motions for leave to file motion for clarification and to admit the said motion for clarification were filed on July 5, 1996.

The motion for clarification of the decision dated February 22, 1996 is in reality a motion for reconsideration which under our rules must be filed within fifteen (15) days from receipt by the respondents of the decision. This respondents failed to do.

In the recent case of First Integrated Bonding and Insurance Co. vs. Hernando, 199 SCRA 196, it was held:

"Where decision has already become final and executory, it cannot longer be corrected or amended."

The only exception is for the correction of clerical error or mistake (Francisco v. Bautista, 192 SCRA 388). In this case what is sought to be corrected or amended is the text of the dispositive portion of the decision which can no longer be done under our rules and established jurisprudence.

ACCORDINGLY, for lack of merit, the motion for clarification filed by the respondents is denied.

SO ORDERED.9

Petitioners thereafter filed this petition for review on certiorari alleging, thus:

THE COURT OF APPEALS SERIOUSLY COMMITTED AN ERROR OF LAW WHEN IT DENIED, IN ITS RESOLUTION DATED NOVEMBER 20, 1996, PETITIONERS’ MOTION FOR CLARIFICATION AND THUS REFUSED TO RESOLVE AN AMBIGUITY IN ITS DECISION DATED FEBRUARY 22, 1996.10

Petitioners argue that the motion for clarification filed with the CA does not pray for reconsideration of the Decision dated February 22, 1996, since it is favorable to them. It merely sought to clarify an ambiguity in the

decision and focus on the implication of the CA’s declaration of validity of Cebu City Ordinance No. 1468, which conflicts with Bulletin No. 10 dated March 7, 1991, the validity of which was recognized by the CA.

Petitioners stated that pursuant to Ordinance No. 1468, respondent increased the salary grades of Department Heads from Salary Grade 26 to Salary Grade 27 and the salary grades of Assistant Department Heads from Salary Grade 24 to Salary Grade 25 based on JCLGPA Circulars Nos. 37 and 39. Such upgrading was, however, disallowed in budget review by the DBM-Regional Office No. VII and consequently disallowed in audit by the Commission on Audit.

Petitioners contend that in declaring Ordinance No. 1468 as valid, the CA failed to consider that pursuant to Bulletin No. 10 dated March 7, 1991, the City of Cebu is classified only as a highly urbanized City. As such, the City Government Department Head occupies the position of Salary Grade 26 and not Salary Grade 27, while the City Government Assistant Department Head occupies the position of Salary Grade 24 and not Salary Grade 25.

Thus, on the basis of the classification of Cebu City as a highly urbanized city, petitioners seek from the Court a ruling that the salary grades of Cebu City Government Department Head and that of Assistant Department Head are Salary Grades 26 and 24, respectively, to reconcile the conflict between Bulletin No. 10 dated March 7, 1991 and the declaration of validity of Ordinance No. 1468 to avoid confusion.

The pertinent Ordinance provides, thus:

ORDINANCE NO. 1468

AN ORDINANCE AMENDING SECTION 4 OF ORDINANCE NO. 1461 ENTITLED: AN ORDINANCE APPROPRIATING THE AMOUNT OF FIFTY EIGHT MILLION ONE HUNDRED FIFTY SEVEN THOUSAND SEVEN HUNDRED FIFTY SIX & 03/100 CTVS (P58,157,756.03) TO COVER URGENT AND NECESSARY EXPENSES OF THE CITY GOVERNMENT OF CEBU UNDER THE GENERAL FUND AND ITS SUB-ACCOUNTS ON ECONOMIC ENTERPRISES FOR CY 1993.

Section 1. – Section 4 of Ordinance No. 1461 entitled: AN ORDINANCE APPROPRIATING THE AMOUNT OF FIFTY EIGHT MILLION ONE HUNDRED FIFTY SEVEN THOUSAND SEVEN HUNDRED FIFTY SIX & 03/100 CTVS (P58,157,756.03) TO COVER URGENT AND NECESSARY EXPENSES OF THE CITY GOVERNMENT OF CEBU UNDER THE GENERAL FUND AND ITS SUB-ACCOUNTS ON ECONOMIC ENTERPRISES FOR CY 1993 is hereby amended in order to read as follows:

Section 4. – Furthermore, appropriations are herein provided for the salary adjustments of department heads and assistant department heads to conform with the correct position titles under Joint Commission Circular Nos. 37 and 39 which took effect on July 1, 1989. Appropriations for the accrued true and correct salary differentials of department heads and assistant department heads shall be provided for in the next supplemental budget of the general fund CY 1993.

Section 2. – This ordinance shall take effect immediately upon its approval.11

The Court notes that Ordinance No. 1468, approved on August 9, 1993, merely provided for appropriations "for the salary adjustments of department heads and assistant department heads to conform with the correct position titles under Joint Commission Circular Nos. 37 and 39 which took effect on July 1, 1989." It is clearly stated therein that the salary adjustments of department heads and assistant department heads will conform with the correct position titles under Joint Commission Circular Nos. 37 and 39 dated September 30, 1989 and October 2, 1990, respectively. Bulletin No. 10, dated March 7, 1991, provided the guidelines for the proper implementation of Joint Commission Circular No. 39. The Bulletin was issued "primarily to respond to the numerous queries on the interpretation of certain changes in the Index of Occupational Services, Position Titles and Salary Grades issued under Joint Commission Circular No. 37 dated September 30, 1989 as embodied in Joint Commission Circular No. 39 dated October 2, 1990." Hence, in this case, Joint Commission Circular Nos. 37 and 39 should be read together with Bulletin No. 10 in determining the correct salary grades of the City Government Department Heads and Assistant Department Heads of Cebu City, which is classified as a highly urbanized city.

Considering that Ordinance No. 1468 is only an appropriation ordinance, petitioners erred in asserting that the ordinance upgrades the position of Cebu City Government Department Head from Salary Grade 26 to Salary Grade 27, and the position of Cebu City Government Assistant Department Head from Salary Grade 24 to Salary Grade 25. In this case, the bases for the correct salary grades of all positions in the local government unit are provided for by Joint Commission Circular No. 3712 dated September 30, 1989, Joint Commission Circular No. 3913 dated October 2, 1990 and Bulletin No. 1014 dated March 7, 1991.

Clarification after final judgment is allowed when what is involved is a clerical error or not an erroneous judgment or dispositive portion of the Decision.15

In this case, the clarification sought by petitioners did not involve an erroneous judgment. As respondent in its original petition merely questioned the validity of DBM Regional Memorandum Circular No. 92-1 in relation to Cebu City Ordinance No. 1468, the CA correctly ruled that Ordinance No. 1468 was valid because it did not involve the grant of step increments and therefore could not be violative of Regional Memorandum Circular No. 92-1, which enjoined respondent from granting step increments/salary increases not in accordance with CSC-DBM Joint Circular No. 1 mandating that the grant of step increments must be based on merit and/or length of service.

To avoid confusion arising from the declaration of validity of Ordinance No. 1468, clarification is in order.

WHEREFORE, the petition for review on certiorari is GRANTED. It is hereby clarified that in determining the correct salary grades of the City Government Department Heads and City Government Assistant Department Heads based on Joint Commission Circular No. 37 as embodied in Joint Commission Circular No. 39 dated October 2, 1990, respondent must also read the guidelines in Bulletin No. 10, dated March 7, 1991, to arrive at the correct salary grades for said positions.

No costs.

SO ORDERED.

ADOLFO S. AZCUNA
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chairperson
Chief Justice

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
RENATO C. CORONA
Asscociate Justice

CANCIO C. GARCIA
Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice


Foonotes

1 Records, p. 23.

2 Rules and Regulations on the Standardization of Compensation and Position Classification in the Local Governments.

3 The Compensation and Position Classification Act of 1989.

4 Records, p. 76.

5 Rollo, pp. 28-30.

6 Id. at 32.

7 R.A. No. 6758, Sec. 2. Statement of Policy, -- it is hereby declared the policy of the state to provide 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. x x x

8 Rollo, pp. 33-34.

9 Id. at 56-57.

10 Id. at 15.

11 Records, pp. 72-73.

12 Circular No. 37, September 30, 1989

x x x

SUBJECT: INDEX OF OCCUPATIONAL SERVICES, POSTITION TITLES AND SALARY GRADES

1. R.A. No. 6758 entitled "An Act Prescribing a Revised Compensation and Position Classification System in the Government and for Other Purposes" specifically Section 6 thereof provides that all positions in the government including those in the local government units shall be allocated to their proper position titles and salary grades in accordance with the Index of Occupational Services, Position Titles and Salary Grades prepared by the Department of Budget and Management (DBM).

2. Accordingly, the attached Index of Occupational Services, Position Titles and Salary Grades prepared by the DBM is hereby issued.

3. Henceforth, all positions in the local government unit shall be allocated to their proper position titles and salary grades in accordance with said Index.

4. This Circular shall take effect July 1, 1989. x x x x

13 SUBJECT: CHANGES IN THE INDEX OF OCCUPATIONAL SERVICES, POSITION TITLES AND SALARY GRADES ISSUED UNDER CIRCULAR NO. 37.

14 SUBJECT: GUIDELINES FOR THE PROPER IMPLEMENTATION OF JOINT COMMISSION CIRCULAR NO. 39 DATED OCTOBER 2, 1990.

This Bulletin is being issued primarily to respond to the numerous queries on the interpretation of certain changes in the Index of Occupational Services, Position Titles and Salary Grades issued under Joint Commission Circular No. 37 dated September 30, 1989 as embodied in Joint Commission Circular No. 39 dated October 2, 1990. x x x

15 Ramos v. Court of Appeals, G.R. No. 42108, May 10, 1995, 244 SCRA 72, 77-78; Castelo v. Court of Appeals, G.R. No. 96372, May 22, 1995, 244 SCRA 180, 186.


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