Unfair

In the case of Parreno vs. COA (G.R. 162224, June 7, 2007), cited in my article in the Phil. STAR on July 4, 2007 (“Substantial Distinction”), the Supreme Court (SC) ruled that a retired Armed Forces of the Philippines (AFP) personnel receiving monthly pension as part of his retirement benefits is no longer entitled to such pension once he becomes a citizen of another country and renounces his Filipino citizenship. This is based on Section 27 of PD 1638 which was signed into law on September 10, 1979. The SC said that said PD applies not only to those who joined the military after its effectivity but also to those who are already in the military but who retired when the PD was already effective. Thus in said case, the SC ruled that 2nd Lt. Francisco (not his true name) who joined the military long before the PD became law is nevertheless covered by said law because when he retired in 1982 after 32 years of service, the PD was already in effect as it was signed into law in 1979. The SC said that the PD was not applied retroactively but also prospectively, as it is the date of retirement, rather than the date of entry in the military that is the reckoning date.

A reader, Mr. Marlowe Camello, however raises several points regarding this case. Mr. Camello contends that:

The retirement pension entitlement as we understand is based on a service that the retiree had already rendered. Before he began to serve he entered into a contract offered by the government which both parties had accepted.

The retirement pension was a part of the contract between the government and Francisco with the view to alleviate the hardship of the retiree once he gets old after having given all his strength for the country that he has served.

When a person acquires his retirement rights, he has no more obligation to fulfill for the entity that promised to pay his pension. It becomes a fully executed contract on the part of the retiree but remains as a contractual obligation to pay on the part of the government until the pensioner dies.

The Philippine Bill of Rights, Article III, Section 10 of the Philippine Constitution says: “No law impairing the obligation of contracts shall be passed.”

This Constitutional provision intends to protect persons without citizenship distinction. It applies to persons who may or may not be Filipino citizens who had entered into their contract in the Philippines.

The decision in Parreno Case (Parreno vs. Commission on Audit and AFP Chief, G.R.  162224, June 7, 2007) will eventually become a “law” once it becomes final. It appears to me that this “law” if adhered to runs counter to the intents and purposes of the cited bill of right of Lt. Francisco.

I believe that 2nd Lt. Francisco had a vested right to his retirement pay regardless of his citizenship status after he retired.”

The points raised by Mr. Camello were actually considered and likewise resolved by the SC in said case. According to the SC, “PD 1638 does not impair any vested right or interest of (2nd Lt. Francisco). Where the employee retires and meets the eligibility requirements, he acquires a vested right to the benefits that is protected by the due process clause. At the time of the approval of PD 1638 and at the time of its amendment, (2nd Lt. Francisco) was still in active service. Hence his retirement benefits were only future benefits and did not constitute a vested right. Before a right to retirement benefits or pension vests in an employee, he must have met the stated conditions of eligibility with respect to the nature of employment, age and length of service. It is only upon retirement that military personnel acquire a vested right to retirement benefits. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under existing law.

Further the retirement benefits of military personnel are purely gratuitous in nature. They are not similar to pension plans where employee participation is mandatory; hence, the employees have contractual or vested rights in the pension which forms part of the compensation” (Parreno vs. COA, supra).

The SC ruling looks legally unassailable. It is just unfortunate that the law has to be applied even-handedly even to those in the military service who lay their lives on the line in the service of the country. But, dura lex, sed lex. Unless this PD is amended, it has to be applied even if it seems unfair to the AFP retirees. This is one area that Congress should focus on and remedy for the sake of the AFP personnel especially those in the frontlines of the battle for the safety and security of the Republic. 

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