September 4, 2010

Hon. DANIEL LACSON

Chairman, THE BOARD OF TRUSTEES
Government Service Insurance System
Roxas Blvd., Pasay City
RE: Letter-Appeal
Dear Mr. Chairman:
The Undersigned hereby manifests that he is elevating the Opinion
expressed through a Letter/Memorandum dated August 6, 2010 on appeal
to the Board of Trustees of the GSIS. Said Letter was received by the
Undersigned on August 26, 2010.
Though the Undersigned is well aware of Sections 30 and 31 of
Republic Act No. 8291, otherwise known as 'The Government Service
Insurance System Act of 1997,' which provides:
"SECTION 30.
Settlement of Disputes. The GSIS
shall have original and exclusive jurisdiction to settle any
dispute arising under this Act and any other laws administered
by the GSIS.
The Board may designate any member of the Board, or
official of the GSIS who is a lawyer, to act as hearing officer to
receive evidence, make findings of fact and submit
recommendations thereon. The hearing officer shall submit his
findings and recommendations, together with all the
documentary and testimonial evidence to the Board within thirty
(30) working days from the time the parties have closed their
respective evidence and filed their last pleading. The Board
shall decide the case within thirty (30) days from the receipt of
the hearing officer's findings and recommendations. The cases
heard directly by the Board shall be decided within thirty (30)
working days from the time they are submitted by the parties
for decision.
"SECTION 31.
Appeals. Appeals from any decision or
award of the Board shall be governed by Rules 43 and 45 of the
1997 Rules of Civil Procedure adopted by the Supreme Court on
April 8, 1997 which will take effect on July 1, 1997: Provided,
That pending cases and those filed prior to July 1, 1997 shall be

governed by the applicable rules of procedure: Provided,

further, That the appeal shall take precedence over all other
cases except criminal cases when the penalty of life
imprisonment or death or reclusion perpetua is imposable.
The appeal shall not stay the execution of the order or
award unless ordered by the Board, by the Court of Appeals or
by the Supreme Court and the appeal shall be without prejudice
to the special civil action of certiorari when proper.
as well as Sections 14.19, 14.20 & 14.21 of the Rules and Regulations
Implementing the Government Service Insurance System Act of 1997, which
states:
SECTION 14.19 Findings and Recommendations of
Hearing Officers. Within Thirty (30) working days from the
time the parties have closed their respective evidence and filed
their last pleading, the Hearing Officer shall submit his findings
and recommendations to the Board, together with documentary
and testimonial evidence presented in the case.
SECTION 14.20 Decision of the Board. The Board shall
decide the case transmitted to it by the Hearing Officer within
Thirty (30) days from its submittal. If the case was heard
directly by the Board, it shall render its decision thereon within
Thirty (30) working days from the time case is submitted by the
parties for decision.
SECTION 14.21 Appeals. Within Fifteen (15) days from
receipt of notice of decision or award, the aggrieved party may
appeal the decision of the GSIS Board of Trustees to the Court
of Appeals. These appeals shall be governed by Sections 43 and
45 of the 1997 Rules of Civil Procedures adopted by the
Supreme Court on April 8, 1997 which will take effect on July 1,
1997.
Pending cases and those filed prior to July 1, 1997 shall
be governed by the applicable rules of procedures.
The appeal shall take precedence over all other cases
except criminal cases where the penalty imposable is life
imprisonment or death.
the Undersigned is, nevertheless, bringing forth this case to the attention
of the GSIS Board of Trustees.

Indeed, as can be gleaned from the foregoing provisions, it is the

hearing officer, as may be designated by the Board, who is required to
submit his findings and recommendations within thirty (30) working days
from the time the parties have closed their respective evidence and filed
their last pleading to the the Board, who, in turn, shall decide the case
within thirty (30) days from the receipt of the hearing officer's findings and
recommendations.
Apropos, the Undersigned is taking the Opinion of Ms. Ma. Vilma F.
Mooney, in his capacity as Regional Manager, as a mere Opinion of a
hearing officer and not as a resolution and/or decision of the Board of
Trustees and, thus, not yet appealable within the contemplation of Section
31 of Republic Act No. 8291.
The factual antecedent goes this way:
On __________, the Undersigned filed with the GSIS through its
Satellite Office in the City of Borongan, a Letter-Request for Re-computation
of Retirement Benefits, Adjustment of Pension and Payment of Differential
of Lump Sum and Pension. The Letter-Request, in full, states:
This refers to the request of the Undersigned for the recomputation of his retirement benefits, corresponding
adjustment of his monthly pension and payment thereof of
differential of his lump sum and monthly pension.
He is a former Mayor of the Municipality of Can-avid,
Eastern Samar, having been elected in such capacity for three
(3) consecutive terms, that is, from July 1, 1992 up to June 30,
2001. Prior to holding said position, he was likewise elected to
various positions in said Municipality since January 1, 1971 as
attested to by his Service Record, which is being attached
hereto as Annex A. In a nutshell, he has served as a public
official as follows:
SERVICE
From
To
01/01/71
01/01/75
01/01/78
03/01/80

12/31/7
4
12/31/7
7
12/31/7
9
12/31/8
2

RECORD OF APPOINTMENT
Designation
Status
Monthly
Salary
Mun.
Elective
50.00/sessi
Councilor
on
-do-do80.00/sessi
on
-do-do100.00/ses
sion
Mun.
Vice
-do813.00
Mayor

OFFICE/ENTITY/DVISION
Municipality of Canavid
-do-

Local

-do-

Local

Office of the Mun.

Vice Mayor,
Can-avid,
Eastern

Local

Local

Samar
01/01/83
01/01/85
07/01/92
01/01/94
01/01/95
05/01/96
01/01/97
11/01/97
01/01/99
01/01/00
01/01/01

12/31/8
4
08/03/8
6
12/31/9
3
12/31/9
4
04/30/9
5
12/31/9
6
10/31/9
7
12/31/9
8
12/13/9
9
12/13/0
0
06/30/0
1

-do-

-do-

944.00

-do-

Local

-do-

-do-

1,405.00

-do-

Local

9,741.00

Local

Mun. Mayor

Elective

-do-

-do-

10,091.00

Office of the Mun.

Mayor,
Can-avid,
Eastern Samar
-do-

-do-

-do-

10,441.00

-do-

Local

-do-

-do-

11,441.00

-do-

Local

-do-

-do-

13,053.00

-do-

Local

-do-

-do-

14,195.00

-do-

Local

-do-

-do-

15,209.00

-do-

Local

-do-

-do-

18,251.00

-do-

Local

-do-

-do-

20,076.00

-do-

Local

Local

As shown in the foregoing, he has been in the government

service for more or less twenty four (24) long years and his
salary was P20,076.00 at the time of his retirement. Considering
such length of service and the considerable amount of salary he
was receiving at the end of his term, he was expecting to
receive a monthly pension, substantial enough to make both
ends meet than what the GSIS is giving him at present. But to
his disappointment, he has been receiving at the moment only a
monthly pension of P5,838.70 far meager than the lowest
ranked policeman receives.
His suspicion for granting him only such a less amount is
that the period of his employment in government from January
1, 1971 up to December 31, 1979 were not taken into
consideration in the computation of his monthly pension,
apparently for reasons that, during such period, the
Undersigned did not pay his monthly contribution to the GSIS
and, plus, the fact that he was merely receiving a per diem for
every session as a Municipal Councilor then, a remuneration the
GSIS did not construe as a form of salary. This was validated
upon inquiry with your Regional Office.
Upon consultation with legal counsel, the latter, however,
intimated to Undersigned that it should not have been so. The
GSIS should have taken into consideration the period
abovementioned in the computation of the Lump Sum the
Undersigned received and his monthly pension. He argued, that
had said year of service been taken into account, there would

have been a corresponding increase in the lump sum the

Undersigned initially received and his monthly pension.
Counsels based his assertions in a case decided by the
Supreme Court (Government Service Insurance System vs. Civil
Service Commission, et al., G.R. No. 98395, June 19, 1995, 245
SCRA 179, 190), where it was held that government service
rendered on a per diem basis is creditable in computing the
length of service for retirement purposes.
In said case, the issue under motions for reconsideration
is the question of whether or not regular service in government
on a per diem basis, without any other form of compensation or
emolument, is compensation within the contemplation of the
term 'service with compensation' under the Government Service
Insurance Act of 1987.
In its decision dated October 28, 1994 the Supreme
Court held that government service rendered on a per diem
basis is not creditable in computing the length of service for
retirement purposes, reversing and setting aside the questioned
resolutions and orders of the Civil Service Commission (CSC)
requiring the Government Insurance System (GSIS) to consider
creditable the services of private respondents on a per diem
basis.
But, on motion for reconsideration, the Supreme Court
reversed and set aside its earlier ruling, holding, inter alia, that:
While that respondents Belo and Baradero
received were dominated as "per diem," the
amounts received were actually in the nature of a
compensation or pay. What should therefore be
considered as controlling in both cases would be the
nature of remuneration, not the label attached to it.
In the sense in which the phrase "per diem" is used
under the Government Service Insurance Law, a per
diem is a daily allowance given for each day an
officer or employee of government is away from his
home base. This is its traditional meaning: its usual
signification is as a reimbursement for extra
expenses incurred by the public official in the
performance of his duties. Under this definition the
per diem is intended to cover the cost of lodging and
subsistence of officers and employees when the
latter are on duty outside of their permanent station.

On the other hand, a per diem could

rightfully be considered a compensation or
remuneration attached to an office. Under the
circumstances obtaining in the case of respondent
Belo the per diems received by her during the period
that she acted in holdover capacity obviously were
in the nature of compensation or remuneration for
her services as Vice Governor of the Province of
Capiz, rather than as a reimbursement for incidental
expenses incurred while away from her home base.
xxx

xxx

xxx

The same could be said of the services

rendered by respondent Baradero, who, before and
after the period in question had an unblemished
record of service to the government as a member of
the army and as a medical officer of the Philippine
Medicare Commission. The disputed period was
served on a full-time basis regardless of the
denomination given to the compensation received by
him.
xxx

xxx

xxx

On the issue raised by the GSIS that petitioners Belo and

Baradero could not benefit from the policy because they were
not able to pay the premium, the High Court said:
It cannot be convincingly asserted that
petitioners could not avail themselves of the benefits
of the policy because no deductions were made from
their salaries during the disputed periods when they
were paid on a per diem basis. In respondent Belo's
case, before and after that short interregnum, she
was paid a fixed salary. She was not duly informed
that short period was not to be credited in
computing the length of her service for retirement
purposed. She assumed in all good faith that she
continued to be covered by the GSIS insurance
benefits considering that in fact and in practice the
deductions are virtually mandatorily made from all
government employees on an essentially involuntary
basis. Similarly, had respondent Baradero been
informed of the need to pay the required deductions

for the purpose of qualifying for retirement benefits,

he would have willingly paid the required sums. In a
sense, the contract made between the GSIS and the
government employee is done on a take-it-or-leave-it
basis, that is, it is a virtual contract of adhesion
which gives the employee no choice but no
involuntarily accede to the deductions made from
their oftentimes meager salaries. If the GSIS did not
deduct, it was by its own choice: contributions were
exacted from petitioner before and after the
disputed. To assert that petitioners would have been
made entitled to benefits had they opted for optional
deductions at that point misses the principal fact in
issue here, which is the question as to whether or
not the disputed periods should be credited as
service with compensation for the purposes of
retirement.
Similarly in the case of the Undersigned, he was
receiving remuneration only on a per diem basis ranging from a
meager amount of P50.00 to P100.00 per session since he
started his government service as a municipal councilor since
January 1, 1971 until December 31, 1979. It was the only
remuneration the Undersigned was receiving during his tenure
as a councilor such that said per diem should rightfully be
considered a compensation or remuneration attached to his
office as a Councilor of the Municipality of Can-avid, Province of
Eastern Samar, rather than as a reimbursement for incidental
expenses incurred while away from home base.
Likewise, it cannot be argued that the Undersigned could
not avail himself of the benefits of the policy because no
deductions were made from his salaries during the period when
he was paid on a per diem basis. The Undersigned was not duly
informed that period from 1971 to 1979 was not to be credited
in computing the length of his service for retirement purpose.
He assumed in all good faith that he continued to be covered by
the GSIS insurance benefits considering that in fact and in
practice the deductions are virtually mandatorily made from all
government employees on an essentially involuntary basis. Had
the Undersigned been informed of the need to pay the required
deductions for the purpose of qualifying for retirement benefits,
he would have willingly paid the required sums.

In fine, the Undersigned badly needs financial support at

the moment especially that he is presently unemployed and only
his wife is working.
On the basis of the foregoing, it is thus humbly requested
of your Honorable Office to direct a re-computation of the
retirement benefits of the Undersigned taking into consideration
the period during which he was receiving compensation on a
per diem basis, make the corresponding incremental adjustment
thereon, and pay to the Undersigned the corresponding
differential of his lump sum and monthly pension.
Your favorable action will be deeply appreciated.
On August 6, 2010, the Borongan Satellite Office of the GSIS through
Ms. Ma. Vilma F. Mooneys
issued a Letter/Memorandum denying the
Undersigneds request for recomputation, stating as follows:
The Undersigned disagrees with Ms. Mooney.
Ms. Mooneys assertion to the effect that the ruling in Government
Service Insurance System vs. Civi Service Commission where it was held
that government service rendered on a per diem basis is creditable in
computing the length of service for retirement purposes, is not correct.
While it is true that in the case of Government Service Insurance
System vs. Civil Service Commission, et al., as referred to before, it was
held that government service rendered on a per diem basis is creditable in
computing the length of service for retirement purposes, it does not spell a
difference in the present case of the Undersigned where he is requesting
only for a re-computation of retirement benefits he is presently receiving,
adjustment of monthly pension, and payment of differential. In other words,
the doctrine enunciated in the aforesaid case also applies to the case of the
Undersigned.
Indeed, the most common rule in statutory construction, and this
applies to decisions of the Supreme Court, is that laws should be construed
in the most sensible manner and
In enacting the law, the legislature is presumed to have ordained a
valid and sensible law, one which operates no further than may be
necessary to achieve its specific purpose. Statutes, as a rule, are to be
construed in the light of the purpose to be achieved and the evil sought to
be remedied. 30 And where the statute is fairly susceptible of two or more
constructions, that construction should be adopted which will most tend to
give effect to the manifest intent of the lawmaker and promote the object

for which the statute was enacted, and a construction should be rejected
which would tend to render abortive other provisions of the statute and to
defeat the object which the legislator sought to attain by its enactment. 31
In introducing a new rule on the reinstatement aspect of a labor decision
under R A. No. 6715, Congress should not be considered to be indulging in
mere semantic exercise. On appeal, however, the appellate tribunal
concerned may enjoin or suspend the reinstatement order in the exercise of
its sound discretion.
29. 238 SCRA at pp. 198-199.
30. See LVN Pictures, Inc. v. Philippine Musicians Guild and CIR,
110 Phil. 725.
31. US v. Toribio, 15 Phil. 85, 90.
[G.R. No. 118651. October 16, 1997.]
PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION, PIONEER TEXTURIZING
WORKERS UNION and LOURDES A. DE JESUS, respondents.
May 31, 1977
PRESIDENTIAL DECREE NO. 1146
AMENDING, EXPANDING, INCREASING AND INTEGRATING THE SOCIAL
SECURITY AND INSURANCE BENEFITS OF GOVERNMENT EMPLOYEES
AND FACILITATING THE PAYMENT THEREOF UNDER COMMONWEALTH
ACT NO. 186, AS AMENDED, AND FOR OTHER PURPOSES
WHEREAS, the Government Service Insurance System in promoting the
efficiency and welfare of the employees of the Government of the
Philippines, administers the laws that grant to its members social security
and insurance benefits;
WHEREAS, it is necessary to preserve at all times the actuarial solvency of
the funds administered by the System; to guarantee to the government
employee all the benefits due him; and to expand and increase the benefits
made available to him and his dependents to the extent permitted by
available resources;
WHEREAS, provisions of existing laws have impeded the efficient and
effective discharge by the System of its functions and have unduly
hampered the System from being more responsive to the dramatic changes
of the times and from meeting the increasing needs and expectations of the
Filipino public servant;
WHEREAS, provisions of existing laws that have prejudiced, rather than
benefited, the government employee; restricted, rather than broadened, his
benefits, prolonged, rather than facilitated the payment of benefits, must
now yield to his paramount welfare; cd
WHEREAS, the social security and insurance benefits of government
employees must be continuously re-examined and improved to assure
comprehensive and integrated social security and insurance programs that

will provide benefits responsive to their needs and those of their

dependents in the event of sickness, disability, death, retirement, and other
contingencies; and to serve as a filing reward for dedicated public service;
WHEREAS, in the light of existing economic conditions affecting the welfare
of government employees, there is need to expand and improve the social
security and insurance programs administered by the Government Service
Insurance System, specifically, among others, by increasing pension
benefits, expanding disability benefits, introducing survivorship benefits,
introducing sickness income benefits, and eventually extending the
compulsory coverage of these programs to all government employees
regardless of employment status.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic
of the Philippines, by virtue of the powers vested in me by the Constitution,
do hereby order and decree the following:
SECTION 1.
Title. The short title of this Act shall be the "Revised
Government Service Insurance Act of 1977." casia
A. Definitions
SECTION 2.
Definition of Terms. Unless the context otherwise
indicates, the following terms shall mean:
(a)
System The Government Service Insurance System created and
established by Commonwealth Act No. 186;
(b)
Board The Board of Trustees of the Government Service Insurance
System;
(c)
Employer The National Government, its political subdivisions,
branches, agencies or instrumentalities, corporations owned and/or
controlled by the Government, the Philippine Tuberculosis Society, the
Philippine National Red Cross and the Philippine Veterans Bank;
(d)
Employee any person in the service of an employer who receives
compensation for such service;
(e)
Member any person compulsorily covered by the System under
Section 3 of this Act;
(f)
Dependent the legitimate, legitimated, legally adopted,
acknowledged natural or illegitimate child who is unmarried, not gainfully
employed, and not over twenty-one years of age or is over twenty-one years
of age but physically or mentally incapacitated and incapable of selfsupport; the legitimate spouse dependent for support upon the member, and
the legitimate parent/s wholly dependent upon the member for support;
(g)
Primary beneficiaries the dependent spouse until he marries and
the dependent children;
(h)
Secondary beneficiaries the dependent parents and legitimate
descendants other than dependent children;
(i)
Compensation the basic pay or salary received by an employee,
pursuant to his employment/appointment/s, excluding per diems, bonuses,
overtime pay, and allowances; cda
(j)
Contribution the amount payable to the System by the member and
the employer in accordance with section five of this act;

(k)
Average monthly compensation the quotient after dividing the
aggregate compensations received by the member for the last three years
immediately preceding his death/separation/disability/retirement, by the
number of months he received said compensation, or three thousand pesos,
which ever is smaller;
(l)
Revalued average monthly compensation an amount equal to one
hundred seventy percent of the first two hundred pes