Authority of PNP to Deduct Loan Obligations with Private Lending Institutions from Retirement Benefits of PNP Officers

DOJ OPINION NO. 051, s. 2006 July 28, 2006 Ms. Imelda M. Crisol-Roces Vice-Chairperson and Executive Officer National Police Commission 371 Sen. Gil J. Puyat Avenue Makati City Madam: This has reference to your request for opinion on whether or not Philippine National Police (PNP) is authorized to deduct from the retirement benefits of PNP officers as payment of their existing loan obligations with Private Lending Institutions (PLIs) such as Armed Forces and Police Savings and Loans Association, Inc. (AFPSLAI), a non-stock savings and loans association. The request, it appears, was precipitated by the request of AFPSLAI from the PNP Finance Center to deduct from the borrower's retirement benefits their outstanding obligation with AFPSLAI. In this regard, the PNP, through the Management Division, Directorate for Controllership, requested for guidance from Mr. Jaime Serrano, State Auditor V and Supervising Auditor, PNP, who opined in the negative, citing Sections 262 and 265, Vol. I of Government Accounting and Auditing Manual (GAAM), 1 Section 36 of R.A No. 9206, 2 and lastly, Section 77 of R.A. No. 6975, otherwise known as the "Department of the Interior and Local Government Act of 1990", 3 which reads: "SEC. 77. Exemption from Attachment and Taxes . All benefits granted by this Act, including benefits received from the Government Service Insurance System, shall not be subject to attachment, levy, execution or any tax of whatever nature." ADCEaH Not satisfied with the said opinion, AFPSLAI sought a reconsideration of the same. Thus, the matter was forwarded to the Commission on Audit (COA) which reversed the opinion of Mr. Serrano and ruled in the affirmative on the basis of Section 7 of R.A. No. 8367, also known as the "Revised Non-Stock Savings and Loan Association Act of 1997", 4 which in part, reads: ". . . That the treasurer, cashier, or paymaster of the office employing a member is required, notwithstanding the provision of any existing law, rule and regulation to the contrary, to make deductions from his salary, wage, income or retirement pension pursuant to the terms of his loan, and all other deductions authorized by the member, to remit such deductions to the Association concerned, and to collect such reasonable fee for his services as may be authorized by rules promulgated by the Monetary Board." However, the Office of the Chief, PNP, expressed the view that the opinion of COA is not appropriate for implementation and in contrast with what Section 77 of R.A No. 6975 provides. Hence, AFPSLAI sought the assistance of your Office which concurred with the opinion of COA, also invoking the above-quoted Section 7 of R.A. No. 8367 and explaining that the phrase "notwithstanding the provision of any existing law . . ." is an indicative of the legislative intent to make the subject provision an exception to the general rule that retirement benefits cannot be the subject of attachment, levy or execution. Unfortunately, the Office of the Chief, PNP, rejected your view reiterating Section 77 of R.A. No. 6975 and citing Section 28 of NAPOLCOM Resolution No. 8. 5 Hence, this request. With regret, this Department has to decline to render the opinion requested for the following reasons: One. The subject matter of the request involves justiciable issues as it affects the substantive rights of the AFPSLAI and the affected retiring PNP officers. Opinions of the Secretary of Justice are merely advisory in nature, and have no binding effect upon the party/parties whose substantive rights may be affected by the opinion and who may, in all probability contest the opinion before the courts. As a matter of policy, therefore, this Office does not render opinion or give legal advice of a matter which is justiciable in nature or which may be the subject of litigation before the courts. 6 Two. The resolution of the issue raised would necessarily involve a review of the actions taken by the COA and PNP, respectively, which are beyond the revisory authority of the Secretary of Justice. By established policy and precedents, this Department has desisted from passing upon the official actuations/rulings of any government official, over whom this Department has neither supervisory nor revisory authority. 7 Three. In the instant case, we note that the Secretary of the Department of the Interior and Local Government (DILG), has not yet expressed any ruling or opinion on the question herein presented. We submit that the DILG Secretary should first be accorded the opportunity to consider the aforesaid question which involves matters within its policy-sphere and jurisdiction, as said office is better situated to translate or transcribe the intent and policy behind this enactment and to give proper meaning and effect to such intent and policy. 8 Very truly yours, (SGD.) RAUL M. GONZALEZ Secretary Footnotes 1. Section 262. Salary retention or deductions. It shall be unlawful for treasurer or other fiscal officer to draw or to retain from the salary any amount or contribution or payment of obligation other than those due to government or its instrumentalities, except as may otherwise be provided (Sec. 54 PD 807). Section 265. Retention of salary for the satisfaction of indebtedness to the government. When any person is indebted to the Government of the Philippines or to any government-owned or controlled corporation or to any other self-governing board, commission or agency of the government, the COA may direct the proper officer to withhold the payment of any money due him or his estate, the same to be applied in satisfaction of such indebtedness (Sec. 3, PD 1145). However, the retention of the retirement gratuity of a person to satisfy his indebtedness to the government may be resorted to only if the person admits his indebtedness and consents to the retention or when a competent court so directs. 2. AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND THREE, AND FOR OTHER PURPOSES. SECTION 36. Authorized Deductions. Deductions from salaries, emoluments or other benefits accruing to any government employee chargeable against the personal services appropriation authorized in this Act may be allowed for the payment of obligations due the GSIS, HDMF, PHIC, AFPMBAI and other Government Financial Institutions, the Bureau of Internal Revenue, those specifically allowed by existing laws and the Mutual Benefits Associations (MBAs) duly operating under existing laws managed by and for the benefit of government employees not covered by compulsory membership in the GSIS, and associations/cooperatives organized and managed by government employees for their benefit and welfare: PROVIDED, That such deductions shall not reduce the employee's monthly net take home pay to an amount lower than Three Thousand Pesos (P3,000.00), after all authorized deductions. 3. AN ACT ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER PURPOSES, dated December 13, 1990, otherwise known as the "Department of the Interior and Local Government Act of 1990." 4. AN ACT PROVIDING FOR THE REGULATION OF THE ORGANIZATION AND OPERATION OF NON-STOCK SAVINGS AND LOAN ASSOCIATIONS, dated October 21, 1997. 5. ". . . retirement benefits (monthly pension included) shall not be subject to attachment, garnishment, levy, execution or tax whatsoever, neither shall they be assigned, ceded, or conveyed to any third person except when the personnel has unsettled money and/or property accountability incurred while in the active service." 6. Secretary of Justice Opinion No. 51, s. 2004. 7. Ibid. , No. 107, s. 1994; No. 19, s 1996; No. 3, s. 1999. 8. Id ., No. 83, s. 2004.