Topic: Fiscal Autonomy

G.R. No. 148208             December 15, 2004

CENTRAL BANK (now Bangko Sentral ng Pilipinas) EMPLOYEES ASSOCIATION,

INC., petitioner,
vs.
BANGKO SENTRAL NG PILIPINAS and the EXECUTIVE SECRETARY, respondents.

Facts: The thrust of petitioner's challenge is that the above proviso makes an

unconstitutional cut between two classes of employees in the BSP, viz: (1) the
BSP officers or those exempted from the coverage of the Salary Standardization Law
(SSL) (exempt class); and (2) the rank-and-file (Salary Grade [SG] 19 and below), or
those not exempted from the coverage of the SSL (non-exempt class). It is contended
that this classification is "a classic case of class legislation," allegedly not based on
substantial distinctions which make real differences, but solely on the SG of the BSP
personnel's position. Petitioner also claims that it is not germane to the purposes of
Section 15(c), Article II of R.A. No. 7653, the most important of which is to establish
professionalism and excellence at all levels in the BSP.

Respondent BSP, in its comment, contends that the provision does not violate the equal
protection clause and can stand the constitutional test, provided it is construed in
harmony with other provisions of the same law, such as "fiscal and administrative
autonomy of BSP," and the mandate of the Monetary Board to "establish
professionalism and excellence at all levels in accordance with sound principles of
management."

Issue: Whether the last paragraph of Section 15(c), Article II of R.A. No. 7653, is based
on the fiscal and administrative autonomy of BSP.

Held: Yes. Article II, Section 15 (c) of RA 7653 was purposely adopted to attract highly
competent personnel, to ensure professionalism and excellence at the BSP as well as
to ensure its independence through fiscal and administrative autonomy in the conduct of
monetary policy. This purpose is undoubtedly being assured by exempting the
executive/management level from the Salary Standardization Law so that the best and
the brightest may be induced to join the BSP. After all, the managers/executives are the
ones responsible for running the BSP and for implementing its monetary policies.

(Note: The provision was declared unconstitutional)