DAVID G. NAVAL, JR. ET AL., Petioners vs. LAND BANK OF THE PHILIPPINES, ET AL., Respondents; Civil Case No. 02-104483, RTC, Manila, Branch 40

This is a petition for Mandamus filed in August 2002 by more than 2,300 officers and employees of LBP to compel the latter and its Board of Directors to pass a board resolution directing the payment to petitioners of Cost of Living Allowance (COLA) equivalent to P300.00 or 40% of basic pay per month whichever is higher and Bank Equity Pay (BEP) equivalent to P550.00 per month for those receiving salary of P1,500.00 or below per month and P500.00 for those receiving salary of more than P1,500.00 beginning July 1, 1989 up to present with corresponding interests. Sometime in November , 2004, another group of LBP officers and employees comprising more than 1,200 filed a similar petition because the instant case was not declared a class suit.

On June 7, 2004, RTC granted the petition and directed LBP and its Board of Directors to pass and issue a board resolution:

1. Directing the payment of COLA to petitioners effective May 16, 1989 up the present;
2. Directing the payment of BEP to petitioners from July 1, 1989 up to the present;
3. Directing the payment of 6% interest per year from May 16, 1989 re COLA and from July 1, 1989 re BEP up to August 18, 1999 and 12% from August 19, 1999 up to the present or until fully paid.

RTC reasoned that:

1. Petitioners acquired vested rights on COLA and BEP and LBP can be compelled by Mandamus to restore the same;

2. LBP Board Res. No. 109, S. 1988 alleging integration of COLA to basic salary can not change or amend the various laws, decrees and LOI No. 104. Besides, there was no clearance from Department of Budget & Management (DBM) with regard to the alleged integration;

3. The alleged integration was made 1 1/2 months before the implementation of R.A. 6758, otherwise known as the Salary Standardization Law (SSL) & petitioners would have received higher salaries under SSL. Moreover, COLA and BEP should be on top of the standardized salary, thus the salaries of petitioners "were clearly DIMINISHED",

4. Integration of COLA to the basic salary was null and void in accordance with Decision of the Supreme Court in De Jesus vs. Commission on Audit, ET AL. (294 SCRA 152);

5. COLA and BEP are in the nature of financial assistance which are included in the second sentence of Section 12, RA 6758 (SSL), which should continue to be given (National Tobaccor Administration vs. Commission on Audit, 311 SCRA 755, 766-769);

6. The Office of the Government Corporate Counsel (OGCC) opined that government officers and employees are entitled to COLA and BEP regardless of whether or not the same were integrated to their basic salary (OGCC Opinion No. 062, S. 2002 & other opinions on the matter);

Petitioners filed a motion for immediate execution which was granted by RTC, Manila. The Court of Appeals however issued a temporary restraining order and later a writ of preliminary injunction. The Supreme Court sustained the injunction on the execution pending appeal;
On the main cse, LBP filed a Notice of Appeal to the Court of Appeals alleging that the Decision of RTC, Manila, is "contrary to law and jurisprudence",

Petitioners filed their motion to disallow appeal of LBP on the ground that the appeal taken is erroneous, i.e., when only questions of law are appealed, the appeal should be to the Supreme Court and not to the Court of Appeals;

This pairing judge of RTC, Manila, Branch 40 (Branch 39, because the presiding judge of Branch 40 already retired) denied the motion and granted the appeal of LBP and forwarded the records of the case to the Court of Appeals for further proceedings;

In the Court of Appeals, petitioners filed a Motion to Disallow Appeal but the same was denied. Petitioners filed a motion for reconsideration and the same has been submitted for resolution after LBP filed its Comment thereon;
Petitioners are willing to enter into an amicable settlement of the case with LBP upon such terms and stipulations just and equitable if only to expedite the proceedings inasmuch as other government financial institutions and corporations like Bangko Sentral ng Pilipinas, Philippine Deposit Insurance Corporation, Philippine Ports Authority, and others have given their respective officers and employees their COLA and Amelioration Allowance (the equivalent of BEP in LBP).