The instant administrative matter has its roots in the Resolution of the Court promulgated on February 24, 2004, clarifying and strengthening the organizational structure and administrative set-up of the Philippine Judicial Academy (PHILJA). ^[1] Pursuant to said resolution, the positions of SC Chief Judicial Staff Officer and Supervising Judicial Staff Officer with Salary Grades (SG) 25 and 23, respectively, were created in the following Divisions of the PHILJA: Publications Division, and External Linkages Division (Research, Publications and Linkages Office); Mediation Education and Management Division (Judicial Reforms Office); Corporate Planning Division, and Administrative Division (Administrative and Finance Office).

However, in its Notice of Organization, Staffing, and Compensation Action (NOSCA) dated May 5, 2005, the Department of Budget and Management (DBM) downgraded said positions and their corresponding salary grades, as follows:

Position Title/SG per A.M. No. 01-1-04-SC	Position Title/SG per DBM NOSCA	Remarks
SC Chief Judicial Staff Officer/SG 25	Administrative Officer V/SG 24	Title downgraded and SG reduced
Supervising Judicial Staff Officer/SG 23	Administrative Officer IV/SG22	Title downgraded and SG reduced [2]

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

Thereafter, in a Memorandum addressed to then Chief Justice Hilario G. Davide, Jr. dated October 10, 2005, PHILJA Chancellor, Justice Ameurfina A. Melencio-Herrera, requested the Court to issue another resolution retaining the position titles and salary grades of SC Chief Judicial Staff Officer and Supervising Judicial Staff Officer, in light of the NOSCA issued by the DBM downgrading said positions. Chancellor Melencio- Herrera invoked the Court's Resolution of November 21, 1995 (Re: Requests for Upgrading of the Positions of Chief Justice Staff Head, Judicial Staff Head, Director IV [Chief, Fiscal Management and Budget Office], Director III, Chief of Division and Assistant Chief of Division with corresponding change in Position Titles, if Warranted), ^[3] which she alleged the DBM violated by such downgrading. According to the PHILJA Chancellor, to allow the DBM to disregard such resolution would "undermine the independence of the Judiciary and impinge on the Supreme 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 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 exercise of its constitutional mandates of fiscal autonomy and administrative supervision over court personnel." ^[4]

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 is consistent with applicable laws and regulations. ^[5] The task of the DBM is simply to review the compensation and benefits plan of the government agency or entity concerned and determine if it complies with the prescribed policies and guidelines issued in this regard. Thus, the role of the DBM is "supervisorial in nature, its main duty being to ascertain that the proposed compensation, benefits and other incentives to be given to [government] officials and employees adhere to the policies and guidelines issued in accordance with applicable laws." ^[6]

As such, the authority of the DBM to review Supreme Court issuances relative to court personnel on matters of compensation is even more limited, circumscribed as it is by the provisions of the Constitution, specifically Article VIII, Section 3 ^[7] on fiscal autonomy and Article VIII, Section 6 ^[8] on administrative supervision over court personnel. Fiscal autonomy means freedom from outside control. ^[9] As the Court explained in Bengzon v. Drilon: ^[10]

As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission and the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions.

Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100 typewriters but DBM rules we need only 10 typewriters and sends its recommendations to Congress without even informing us, the autonomy given by the Constitution becomes an empty and illusory platitude.

The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. In the interest of comity and cooperation, the Supreme Court, Constitutional Commissions, and the Ombudsman have so far limited their objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision. ^[11]

Clearly then, in downgrading the positions and salary grades of SC Chief Judicial Staff Officer and SC Supervising Judicial Staff Officer in the PHILJA, the DBM overstepped its authority and encroached upon the Court's fiscal autonomy and supervision of court personnel as enshrined in the Constitution; in fine, a violation of the Constitution itself.

We note with approval the following ratiocination of the Office of the Chief Attorney in its Report dated December 1, 2005:

Moreover, the General Provisions of the General Appropriations Act reiterates the constitutional provision on fiscal autonomy of the Judiciary. In matters affecting court personnel and compensation, the Court is guided by the Special Provision for the Judiciary under the General Appropriations Act for FY 2003 (Republic Act No. 9206), which was deemed reenacted for FY 2004, and hence governed during the issuance of the Resolution of 24 February 2004. The Special Provision vests the Chief Justice with the authority to "formulate and implement the organizational structure of the Judiciary, to fix and determine the salaries[,] allowances and other benefits of their personnel, and whenever public interest so requires, makes adjustments in the personal services itemization, including but not limited to the transfer of item or creation of new positions in the Judiciary."

It is therefore clear that when the Court exercises its administrative authority over matters affecting its personnel, it does so within parameters prescribed by pertinent laws. It cannot be presumed that the Court will violate budgetary laws or go beyond the ambit of its authority or issue administrative resolutions in derogation of the law. The exercise of such authority should not in any case be absolute or outside the law as, being the ultimate interpreter of the law, the Court is constitutionally bound to observe the Constitution and the law is mandated to interpret. On the other hand, the DBM is duty-bound not only to accord respect for the issuances of the highest Court in the Judiciary, the third branch of government, but also to implement them. For the DBM to even venture to alter a Resolution of the Court is to violate the basic principle of separation of powers. xxx

xxx

Thus, the authority of the DBM to "review" the plantilla and compensation of court personnel extends only to "calling the attention of the Court" on what it may perceive as erroneous application of budgetary laws and rules on position classification. The DBM may not overstep its authority in such a way as to cause the amendment or modification of Court resolutions even if these pertain to administration of compensation and position classification system. Only after its attention to an allegedly erroneous application of the pertinent law or rule has been called by the DBM may the Court amend or modify its resolution, as its judgment and discretion may dictate under the law.

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

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

SO ORDERED.

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[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.

^[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;
	(b)	Judicial Staff Head (Office of the Chief Justice and Office of the Associate Justices) –
(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 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.

^[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, November 25, 2004, 444 SCRA 300.

^[6] Philippine Retirement Authority v. Buñag, 444 Phil. 859, 869-870 (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] 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 (1998) and Commission on Human Rights Employees' Association (CHREA) v. Commission on Human Rights, supra at 316.

^[10] Supra.

^[11] Bengzon v. Drilon, supra, at 150-151.

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