DEPARTMENT OF BUDGET AND MANAGEMENT, REPRESENTED BY SECRETARY ROMULO L. NERI, PHILIPPINE NATIONAL POLICE, REPRESENTED BY POLICE DIRECTOR GENERAL ARTURO L. LOMIBAO, NATIONAL POLI…

Department of Budget and Management versus Manila's Finest Retirees Association

The Case

This is a petition for review on certiorari brought by the Department of Budget and Management, the Philippine National Police, the National Police Commission, and the Civil Service Commission against the Manila's Finest Retirees Association and the other retirees of the Integrated National Police. The respondents had filed a petition for declaratory relief in the Regional Trial Court of Manila, asking that they be declared entitled to the same retirement benefits granted to Philippine National Police retirees under the Philippine National Police Law, Republic Act Number 6975, as amended by Republic Act Number 8551. The case matters because it fixes the legal relationship between the old Integrated National Police and the new Philippine National Police, and because it tells us whether a police force that was absorbed rather than abolished carries its retirees into the new retirement scheme.

Procedural History

The Integrated National Police retirees, led by the Manila's Finest Retirees Association, filed their petition for declaratory relief in the Regional Trial Court of Manila, impleading the Department of Budget and Management, the Philippine National Police, the National Police Commission, the Civil Service Commission, and the Government Service Insurance System. The Government Service Insurance System moved to dismiss on grounds of lack of jurisdiction and lack of cause of action, while the other agencies answered that the retirees never became members of the Philippine National Police because they had retired before the new law took effect. The trial court rendered judgment for the retirees, declaring them entitled to the same retirement benefits as Philippine National Police retirees and ordering the agencies to implement the proper adjustments retroactive to the effectivity of the law. It later issued a supplement to its decision granting the motion to dismiss of the Government Service Insurance System, so that the petition was considered withdrawn as to that agency. The remaining agencies appealed to the Court of Appeals, which affirmed the trial court in full. Their motion for reconsideration was denied, and so they came to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

In 1975, Presidential Decree Number 765 constituted the Integrated National Police, composed of the Philippine Constabulary as its nucleus and the integrated police forces as its components. Presidential Decree Number 1184 followed in August 1977 to professionalize the Integrated National Police and promote career development within it.

On December 13, 1990, Republic Act Number 6975 established the Philippine National Police under a reorganized Department of the Interior and Local Government. Under its Section 23, the Philippine National Police would initially consist of the members of the police forces integrated into the Integrated National Police under Presidential Decree Number 765, together with the officers and enlisted personnel of the Philippine Constabulary. The law declared the new police force to be national in scope and civilian in character, and it provided for the absorption of the Integrated National Police, including its personnel.

On February 25, 1998, Republic Act Number 8551 amended the law and reengineered the retirement scheme, so that Philippine National Police personnel stood to collect more than Integrated National Police members of equivalent rank who had retired under the old law. The retirees illustrated the disparity: a Corporal against a Senior Police Officer Three, a Captain against a Police Senior Inspector, and a Brigadier General against a Police Chief Superintendent, each pair showing a monthly pension difference. On June 3, 2002, the Integrated National Police retirees filed their petition for declaratory relief, and the case travelled to the Supreme Court as described above.

Issues

• Whether or not Republic Act Number 6975 abolished the Integrated National Police, such that its retirees never became members of the Philippine National Police.
• Whether or not the Integrated National Police retirees, who retired before the effectivity of Republic Act Number 6975, are entitled to the same retirement benefits accorded to Philippine National Police retirees under that law as amended.
• Whether or not the National Police Commission Resolution Number 8 bars the payment of retirement pay differentials to those already retired before the effectivity of Republic Act Number 6975.
• Whether or not the trial court, in a petition for declaratory relief, may order the immediate adjustment and payment of the retirees' benefits.

Applicable Provisions

Section 2 of Republic Act Number 6975 states the policy of the law:

It is hereby declared to be the policy of the State to promote peace and order, ensure public safety and further strengthen local government capability aimed towards the effective delivery of the basic services to the citizenry through the establishment of a highly efficient and competent police force that is national in scope and civilian in character.

This declaration anchors the Court's reading that the law transformed the police force rather than destroyed it.

Section 23 of the same law defines the composition of the new force:

Subject to the limitation provided for in this Act, the Philippine National Police, hereinafter referred to as the PNP, is hereby established, initially consisting of the members of the police forces who were integrated into the Integrated National Police (INP) pursuant to Presidential Decree No. 765, and the officers and enlisted personnel of the Philippine Constabulary (PC).

Because the Integrated National Police members themselves make up the initial Philippine National Police, the Court reasoned that they were absorbed, not excluded.

Section 75 of Republic Act Number 6975, as amended by Section 34 of Republic Act Number 8551, provides:

Retirement pay of the officers/non-officers of the PNP shall be subject to adjustments based on the prevailing scale of base pay of police personnel in the active service.

This proviso is the textual basis for adjusting the retirees' pensions to the current scale.

Section 38 of Republic Act Number 8551 states the retroactive reach of the rationalized schedule:

The rationalized retirement benefits schedule and program shall have retroactive effect in favor of PNP members and officers retired or separated from the time specified in the law.

The Court extended this retroactive effect to Integrated National Police members who had retired before the earlier law took effect.

Ruling

On the first issue, the Court held that Republic Act Number 6975 did not abolish the Integrated National Police. Nowhere in the law do the words abolish or terminate appear in reference to it; what the law provides is absorption, transfer, or merger with the Philippine National Police. The Court distinguished the terms: to abolish is to do away with or destroy completely, while to absorb is to assimilate or incorporate. The provision that the Integrated National Police ceases to exist is but the logical consequence of absorption. At most, the Integrated National Police was transformed into the Philippine National Police, minus its military character.

On the second issue, the Court held that the retirees are not excluded from the retirement benefits under the law as amended. Their retirement before the law's passage did not bar them, because their membership in the Integrated National Police was an antecedent fact that allowed them to avail themselves of the benefits of the subsequent laws. The Court also invoked the constitutional warrant that the State shall from time to time review to upgrade the pensions and other benefits due to retirees, and the familiar rule that retirement laws are liberally construed in favor of the retiree.

On the third issue, the Court held that the National Police Commission resolution did not bar the differentials. The amendatory law itself gave the rationalized schedule retroactive effect, and to deny the differential would run counter to the resolution's own purpose that no member of the Philippine National Police shall suffer any diminution in retirement benefits.

On the fourth issue, the Court held that execution of a judgment in a declaratory relief case is not necessarily indefensible. A special civil action is not essentially different from an ordinary civil action, and the rules governing ordinary suits apply where not inconsistent. The Court noted that the retirees had pleaded for immediate adjustment and the agencies did not object, and that granting the relief forestalled a multiplicity of suits, which the aged retirees could hardly afford.

Doctrine

Absorption is not abolition. When a law absorbs, transfers, or merges an agency into a new one, the old agency is transformed rather than destroyed, and its members carry their membership into the new body. Retirement laws are liberally construed in favor of the retiree, and a retirement law that adjusts pensions to the prevailing scale of active service applies in favor of those who retired before its enactment, because their prior service is the antecedent fact that entitles them. A petition for declaratory relief may properly result in an executory judgment where the relief was pleaded and not objected to, in order to forestall a multiplicity of suits.

Disposition

The petition was denied, and the decision and resolution of the Court of Appeals were affirmed, so the Integrated National Police retirees won their claim to the same retirement benefits as Philippine National Police retirees.

Remember This

Memorize the line: absorption is not abolition, and the Integrated National Police was merely transformed into the Philippine National Police. Examiners use this case to test the distinction between abolition and absorption, the liberal construction of retirement laws, and the retroactive reach of pension adjustments in favor of prior retirees.