REPUBLIC OF THE PHILTPPINES

GOVERNMENT SERVICE INSURANCE SYSTEM

FINANCIAL CENTER, ROXAS BOULEVARD, PASAY CITY

BOARD OF TRUSTEES

IN THE MATTER OF:

THE REQUEST FOR REFUND
OF INTEREST AND
PENAI,TIES DEDUCTED
FROM RETIREMENT
BENEFITS

GSIS CASE NO. OO2-15

EMELITO L. RIO,
Petitioner.
x

DECISION

Before the Board is a Petition filed on November 28,2OI41 by

Petitioner, Emelito L. Rio, appealing the JuIy 4, 20L4 Decision of

the Committee on Claims (hereinafter, CoC), in Case No. 5O-2O14,

denying Petitioner's request for refund of the interest and penalties

deducted from his retirement benefits. Petitioner received said

CoC Decision on October 29, 20L4. The dispositive portion of the

same reads:

WHEREFORE, premises considered, the instant

request of Emelito R. Rio for refund of loan interest and
penalties deducted from his retirement benefits is
hereby DENIED for lack of merit.

I Per the Timeliness Report of the Officc of the Corporate Secretary (OCS), the delayed
delivery of tl.re letter from the OCS requiring Petitioner to comply with the formal
requirements for filing a Petition before the Board of Trustees, rendered timely compliance
try Petitioner impossible. Hence, Petitioner's eventual compliance with the requirements on
February 25, 2015 was deerned timely.
 FACTS OF THE CASE

Petitioner entered government service on June 4, 1976 and

worked as a Youth Development Worker in the Department of
Social Welfare and Development (DSWD) until May 31, 1978.
Petitioner then served as Secondary Teacher at the General
Mariano Alvarez Technical High School (GMATHS), Cavite from

July 21, 1978 to November 29, t987. Thereafter, Petitioner re-

entered government service on January 16, 1996 as Information
Officer I at the Provincial Information Office, Provincial

Government of Cavite. Petrtioner retired from the Provincial

Information Office effective November L7, 201.0. At the time of his

retirement, Petitioner had outstanding balances on his eCard Cash
Advance PIus Loan, Consolidated Loan and Emergency Loan.

Petitioner alleged that he went to the GSIS on November 18,

2010 to file his application for retirement under R.A. No. 8291 but

was supposedly told that he was not yet qualified to apply for
retirement under R.A. No. 8291 due to insufficient number of years
per GSIS records.

On November 23, 201'0, the Membership Department

received an electronic mail (email) from the Agency Authonzed

Officer (AAO) of the DSWD, wherein Petitioner's service record
pertaining to his years of service in the DSWD was attached' GSIS

records reveal that the same email from the DSWD was returned to

the latter with the request for the submission of supporting

documents.
 In a letter dated March 7, 2Ol7 addressed to the President
and General Manager (PGM) of the GSIS, Petitioner requested for
his service record to be updated and for a tentative computation of
his retirement benefits. Petitioner stated therein that: "I tried to
submit my application for retirement with your good Office on
November 18, 2010...but your computer only displayed my services
with the Cavite Provincial Government which only started on

January 16, 19S6 or a total of 14.8 years and that I was ineligible
for pension, only cash payment." Petitioner went on to state that
because of the problem with his service record, which, at that time,

had not yet been rectified, he could not file his application for
retirement.

In response, the then GSIS Public Relations and Monitoring

Department (PRMD) sent a letter dated April LB,2oll to Petitioner
informing him that his request was referred to "the appropriate
GSIS workgroup for appropriate action." An email was likewise

sent to the AAO of the Provincial Information Office, Provincial

Government of Cavite, seeking assistance in connection with

Petitioner's request. The Membership Department of the GSIS

requested in the same email for the complete and verified service

details of Petitioner.

Petitioner also concurrently sought the assistance of various

offices of elective officials and other government offices to
intercede in his behalf regarding his claim, alleging that he, in the
meantime, cannot file his application for retirement as his service
record has not Yet been uPdated.

In another letter dated December 5, zOIt, Petitioner

inquired about the status of his request for updating of his service
record so that he may already file his application for retirement
benefits. Petitioner alleged that his "service records from the DSW
(sic) Region IVA in Alabang, Muntinlupa City and from the GMA
Technical High School in GMA, Cavite had been forwarded to the
GSIS by their respective AO's (sic) by e-mail upon our request
more than a year ago."

The PRMD, through letters dated December 5, 2011 and

January t9,2012, respectively, replied and reiterated its previous
advice to Petitioner. The latter letter also stated that "requests for

updating of your MSP should be coordinated with your Agency

Administrative C)fficer (AAO). Your AAO will send the request to us
via email using the Agency Remittance Advice (ARA)."

On May 72, 2012, Petitioner filed a complaint before the

Office of the Ombudsman against the GSIS, particularly against the

PGM and certain officers of the PRMD, for the latter's alleged
inaction and delay in the handling of Petitioner's request for
updating of service record.

Moreover, Petitioner still consistently sought the intercession

of various elective officials and government offices regarding his

request. Consequently, the GSIS NCR Operations Group again

4
addressed Petitioner's request in its letter dated February 26,
2013, wherein it reiterated that "the procedure in updating the
member's service profile is coursed through the Agency Authorized

Officer (AAO)." The letter went on to state that the NCR

Operations Group had coordinated with the Provincial Information

Office, Cavite through its AAO for the submission of Petitioner's

compiete service record.

On February 27, 2013, the Provincial Government of Cavite

submitted to the GSIS Petitioner's updated service record. On
March L, 20L3, Petitioner's service record was accordingly
updated.

Thus, in a letter dated March 23, 2013, the GSIS NCR II,
NCR Operations Group informed Petitioner that his service record

has been updated, to wit:

We are pleased to inform you that your MSP has been updated,
as well as the postings of your premium payments up to the
date of your separation from the service. As a result, your
Total Length of Service (TLS) recorded in our database is now
24.2OOOO years while your Record of Creditable service (RCS)
22.94904694.

xxx xxx xxx

Below please find the tentative compu tation of your retirement:

Date of Retirement November 17 , 20lO

Date of Birth November 10, 1950
Total Length of Sewice 24.20000
Record of Creditable Servtce 22.94904698
Average Monthly Compensation P1s,509.46

BMpr = (0.025) x AMC + P700) x Record of Creditable Service

Option 1 - Five (5) Year LumPsum:

Accrued Annuities from 1L11-7t2OlO - 11tl6l2}l5 @ PS,299,79 P557,987 40
Less: Outstanding Balance (Consolidated and Emergency Loans) 240 256 19
 Net Proceeds P3L7,731..2I
Pension Start Date - 7111.712075 @ P9,299.79

Option 2 - Cash Palanent and Basic Monthly Pensiott:

18 months cash payment ( 1B months x P9,299.79) P767 ,396.22
Accrued Pension from 1lll7l2O10 - 03/31/2013 @ P9,299.79 P264 734.02
Total Benefit 432,730.24
Less: Outstanding Balance (Consolidated and Emergency Loans) 240,256.19
Net Proceeds P 191,8 74.0 s
Pension Start Date O4lO1.l21l3 @ P9,299.79

On May 7, 2013, the GSIS received Petitioner's application

for retirement and payment of Cash Surrender Value (CSV) benefit
of his life policy. Petitioner chose Option 2 of the retirement plan
under R.A. No. 8291, with the 1B-month cash payment benefit and
basic monthly pension.

On July 3, 2013, the GSIS received the Order of the Office of

the Ombudsman dated April 26, 2013, dismissing Petitioner's

complaint against the GSIS relative to his claim, stating that:

xxx While respondent Vergara did not personally reply to the

Ietters to the complainant, he indorsed the same to the
concerned office within the GSIS for appropriate action. This
belies the allegation that he did not act on the complainant's
letter. His prompt action on the letter, by indorsing it to the
appropriate office, negates any possible violation of the above-
cited provision of law.

The GSIS, through a letter dated July 9, 20L3, lnformed

Petitioner that his application for retirement and payment of CSV
benefits were already processed and the corresponding checks in
the amount of Php L25,463.25 and Php 27,049.59, respectively,
were available for Pick uP.
 On July 1.7, 20L3, Petitioner claimed the foregoing checks.

That same day, Petitioner filed a Member's Request Form (MRF)

requesting for a "refund of consoloan overpayment deducted from

retirement benefits" and "refund of premium in arrears deducted

from cash surrender value".

Subsequently, Petitioner, in a letter dated August 21, 2013,

informed Ms. Merly M. Gomez of the NCR II, NCR Operations

Group that there might have been a mistake in the computation of

his retirement benefits as the amount he received did not

correspond to the amount indicated in the tentative computation

earlier provided to Petitioner. Consequently, Petitioner requested
for a detailed explanation on the discrepancy.

In a letter dated October 14, 2013, Ms. Gomez explained to

Petitioner the variance in this wise:

The table below shows the tenta[ive computation provided to

you last March 23, 2013 and the actual retirement benefit paid
on July 5, 201 3:

Particulars Tentative Computation'z Actual Benefit Paid

Date of Retirement 1.u7612010
Date of Application 05t07 t2013
Filed
18 months cash P1.67,396.22 PL67,196.42
payment
Accruecl Pension P264,734.02 P301,572.80
Total Benefits P432,r30.24 P468,769.22
Less:
Emergency Loan P22,044.32 P24,429.56
(EML)
E-Card Cash P13,586.16 P21.,s76.88
Advance (ECAD)
Consolidated Loan P204,625.7 7 P297,299.53
(CNL)
Net Proceeds P 191,874.05 P125,463.25

2
Based on a provisionaI computation fouud itl the database lvithout actuaI reconciliation
 Please be informed that the difference between the tentative
computation and the actual benefit paid corresponds to the
outs-tanding loan balances deducted from your actual
retirement benefit. For the tentative computa[ion of your
retirement benefit, the outstanding balances of your EML,
ECAD and CNL accounts were computed as of December 2010,
whereas the outstanding balances deducted from your
retirement benefit were adjusted as of May 7,2OL3, the date of
application of retirement.

For your reference we are providing you with the details of

your loan accounts deducted from your retirement benefit:

Gross Loan (granted on LOlO4l2o09) P20,000.00

Add: Interest/Surcharge 7,185.12
Total Due 27,L85.12
Less: Payments Made
06/2010 - 09120L0 (4 months x P688.89) P 2,755.56
Deducted from retirement benefit 24.429.56 27.1.85.L2

Gross Loan (granted on O4ll8l2OO7 \

Add: Interest/Surcharge
Total Due
Less: Payments Made
Deducted from retirement benefit

Gross Loan (granted on 9l'l.7l2}O7) P1'34'1'59.27

Add: Interest/Surcharge 94.960 61
Total Due P258,41O.48
Less: Payments Made
71,12007 - O2|2OOB (4 months xP277.74) P1,110.96
Deducted from retirement benefit

Subsequently, on Novembet 25, 2OL3, Petitioner's request

for a refund on the premium in arrears deducted from his CSV was
granted. Accordingly, on December 6,2013, a check in the amount
of Php 3,937.20 representing the refund of the premium in arrears
deducted from the latter's CSV was paid to Petitioner.
 Thereafter, in a letter dated March 1'7,2O1+ addressed to the

former Chairman of the GSIS Board of Trustees, Petitioner

demanded the payment of "remaining GSIS pension benefits,
interests and damages", imputing "malice, malevolence,

misfeasance and malfeasance" against GSIS officials and

employees. Said letter was then indorsed to the OPGM, which, in
turn, indorsed the same to the NCR Operations Group'

Simultaneously, Petitioner still wrote several letters and

sought the intercession of various elective officials and government

offices, this time, regarding his demand for payment of his alleged

unpaid pension benefits.

Consequently, Ms. Gomez again wrote the Petitioner a letter

dated April 3, 2OL4 informing him, as follows:

Please be informed that the calculation of your balances on your

loan accounts as of date of retirement is in consonance with the
existing policy of the GSIS, to witl
'For retirement and separation purposes, the outstanding
balance (OBAL) of the existing loans shall be as follows:

1. xxx
2. If optional retirement or separation, the reckoning date
shall be the:

a.) Effective date of retirement or separation, if filed

before the effective date of retirement or
separation; or

b.) Date of Fiting, if filed after the effective date of

retirement or separation.'

Our records show that you retired on November 11(sic), 2010 at

age 60 under Optron 2 of Republic Act No. 8291 and your
application was filed only on May 7, 2013, hence your OBAL for
your loan accounts was computed up to the date of the filing of
your application.
 The Petitioner, however, persisted in his c1aim.

Subsequently, in response to the referral letter dated March 3l',

2014 from the Office of the Ombudsman, the PGM, through a letter

dated April L5, 2Ol4 informed the former that Petitioner's claim
had already been answered "through a letter dated 03 April 2014
issued by Manager Merly M. Gomez of the National Capital Region

II, Operations Group." The letter went on to advise the Office of

the Ombudsman that Petitioner's claim was, nonetheless, indorsed

to the CoC for its appropriate action.

On JuIy 4, 20t4, the CoC issued a Decision in Case No. 50-

2014, denying Petitioner's request for refund of the interest and
penalties deducted from the latter's retirement benefits because
Directive No. 2011-D-0621-NCO-003 issued by the Office of the
President and General Manager (OPGM) on June 24, zOlL provides

that the accrual of interest and penalties on outstanding service

loans of a non-compulsory retiree is reckoned until the date of
actual filing of the application for retirement, if filed after the
effective date of separation or retirement.

On November 28, 201,4, the Petitroner filed this Petition

assailing the CoC Decision. Petitioner reiterated therein that on

November 1.8, 201.0, he went to GSIS to file his duly accomplished

retirement application with the required supporting documents,
but however, failed to file the same hecause he was informed that
per GSIS records, he only had 14.8 years of government selwice,
which means that he will not be entitled to pension benefits having

less than fifteen (15) years of service as required under R.A. No.

l0
82913 for retirement purposes.

Petitioner, in assailing the CoC Decision, argued that

Directive No. 2011-D-0621-NCO-003 is illegal, unconstitutional,
confiscatory, an ultra vires act and is not applicable to his case;

thus, the same cannot be made the basis of the running of interest
and the imposition of penalties on his loan accounts after his
effective date of retirement until the actual filing of his retirement
application. Petitioner also claimed that he is entitled to damages
for the alleged delay in the processing of his claim.

In compliance with the Summons dated March 3, 2015, the

CoC through counsel filed its Answer praying for the denial of this

Petition.

On April 28, 201.5, the CoC complied with the Subpoena

Duces Tecuma and submitted the records of the CoC case to the

Hearing Officer.

Petitioner failed to attend the scheduled preliminary

conference on July 21,2015\.

' "SECttOru 13-A. Conditions for Enritlement. - A urembet who retires from the service
shall be entitlecl to the reLitement benefils in paraglaph (a) of Section 13 hercof: Provided,
That;
(1) he has rendered at least fifteen (15) years of scrvice;
(2) he is at least sixty (60) years of age at thc time of retitenren! and
(3) he is not receiving a monthly pension beuefit fionl Permanent total disability

4
Dated April 13, 2015.
s Per Order dated June 30, 2015.

ll
 On December 21, 2015, the Office of the Chief Justice of the

Supreme Court referred to the GSIS for appropriate action,

Petitioner's letter dated November 17, 2OI5 relative to the latter's

request for a certified true copy of Directive No, 2011-D-0621-

NCO-003 with proof of its publication. Acting on said letter, the

Hearing Officer issued an Order6, which among other things,

directed the CoC to submit said document.

On January Ll, 201,6, Petitioner again failed to appear in the

scheduled preliminary conference'. On the same day, the CoC

submitted its Compliance, wherein it attached a certified true copy
of the requested directive. The CoC, however, declared that it
does not have the proof of publication for the same. Thus, a

Subpoena Duces Tecums was issued to the NCR II, NCR Operations

Group to submit the proof of publication, to which Ms. Gomez

through a Memorandum dated January 19, 2016, stated that
"Operations Group xxx is not responsible for publication of such
documents." The memorandum went on to declare that "Directives

are intended for internal use only."

Thereafter, the parties were ordered to submit their

respective Position Papers. The CoC submitted its Position Paper,

wherein it repleaded its earlier arguments.

Petitioner, for his part, likewise repleaded his earlier

contentions and added that Directive No. 2011.-D-062r-NCO-003

6 Dated Decembet 28, 2075.

7 Per Order dated Decembcr 7,2015.
E
Dated January 18, 2016.

t2
"did not exist" as it was not published.

On April 22, 2016, the NCR Membership Department

complied with a Subpoena Duces Tecume and submitted before the

Hearing Officer the Petitioner's complete Member's Service

Profile. On April 25, 201,6, the NCR Claims Department likewise
complied with the same subpoena and submitted to the Hearing
Officer the Transaction Monitoring System (TMS) record print-outs
with attachments documenting the actions taken on Petitioner's
claim. Included in said submission is a copy of Petitioner's letter
dated October L4,2010 addressed to the then Provincial Governor

of Cavitelo and a copy of the Order of the Office of the Ombudsman

dated April 26, 2Ot3 dismissing Petitioner's complaint against the

GSIS.

On May ll,20L6, NCR II submitted additional TMS records

relative to Petitioner's request for updating of his service record,
which included a copy of an email sent on November 23, 2010 by
the AAO of DSWD regarding Petitioner's years of service with said
agency. Likewise included in the submission is a copy of an email
sent on April 25, 2011 by the GSIS to the AAO of Petitioner's last

employer, the Provincial Government of Cavite, requesting for the

complete and verified service details of Petitioner.

On May 1,2, 2016, the NCR Membership Group aiso

submitted additional documents relative to Petitioner's request for

e
Dated April 18, 2016.
Stamped as received by the Office of thc Governor, Province of Cavite otl October 18, 2010.
r0

Thc subject matter of the letter indicatcd as "RESIGNATION FOR TI-IE PURPOSE OF
RETIREMENT FROTVI GOVERNMENT SERVICE",

t3
updating of his service record.

ISSUES

The issues for resolution are:

1. Whether Petitioner is entitled to a refund of the interest

and penalties imposed on his outstanding loan accounts
from the time of his effective date of retirement until the
actual filing of his application for retirement, which were
eventually deducted from his retlrement benefits; and

2. Whether Petitioner is entitled to damages.

DISCUSSION

The Petition is partially granted. Petitioner's claim for refund

shall first be discussed. Essentially, Petitioner questions as

improper the imposition of interest and penalties on his various

loan accounts from the time he separated from service until the
time he actually filed his application for retirement under R.A. No.
8291, which was allegedly made on the basis of a mere directive,

specifically, Directive No. 2011 -D-062 1 -NCO-003.

Petitioner claimed that Directive No. 2011-D-0621-NCO-003

is not a valid basis and as such cannot be used to justify the

continued imposition of interest and penalties on his unpaid loan

accounts until May 7, 2013. It is, thus, beneficial to note for the

l.l
information of Petitioner that, as far as non-compulsory retireesrl
are concerned, the basis for reckoning interest and penalties until

the actual fiting of the application for retirement, if filed after the
effective date of retirement, is the implementation of the terms of
the loans themselves and the application of the law, and not
Directive No. 201 1-D-062 1-NCO-003.

There is no contest in this case that the terms of the various

subject loans uniformly provide for the accrual of interest and the

imposition of penalties in the event of nonpayment, to wit:

Consolidated Loanr2:
III. POLICIES ON GSIS CONSO-LOAN PLUS
xxx

9. INTEREST RATE
The interest shall be twelve percent (L20/o) effective based on a
diminishing balance. A fraction of a month is considered as one
( 1 ) month.

xxx

15. PENALTY CHARGES

Arrearages on the amount due for the month shall be
charged 1.%o per month, compounded monthly, until the
arrears are paid.

xxx

21. DEFAULT
xxx

In case of failure to pay the outstanding balance declared

in default, the outstanding balance shall be charged with
interest equivalent to l2o/o per annum compounded
monthly from the date of default until the date of full
payment, and a penalty of 6% per annum compounded
monthly.

rr
Retirees who are not yet 65 years of age (compulsory age of retirement) uPon retirement'
,, policy and Procedurai Guideline "GSIS Consolidated Salary Loan
IPPG) No. 201-09 entitled
Plus (Conso-Loan Plus) Program

l5
 ECard Plus Cash Advancel3:
III. POLICIES ON GSIS ECARD PLUS CASH
ADVANCE

xxx

8. INTEREST RATE
The interest shall be twelve percent (1,2o/o) effective
based on a diminishing balance. A fraction of a month is
considered as one (1) month.

xxx

14. PENALTY / SURCHARGES

Arrearages on the amount due for the month shall be

charged 1o/o pet month, compounded monthly, until the
arrears are paid.

xxx

20. DEFAULT
xxx

In case of failure to pay the outstanding balance declared in

default, the outstanding balance shall be charged with the
existing 12% annual effective interest plus a penalty of 1% per
month (compounded monthly) from the date of default until the
date of full payment.

xxx

Emergency Loanra
UI. POLICIES
xxx

5. Interest on EmergencY Loans

Interest on pension loans shall be Loo/o per annum

computed in advance.

xxx

1 1. Penalty charges

'' PPG No. 192-06 entitled "eCard Plus Cash Advance (eCAP)"
'o PPG No. 167-02 entitted
"The GSIS Emergency Loans"

l6
 Monthly repayments due but unpaid or paid partially
shall be assessed a penalty charge of 2o/o per month on
the unpaid or deficit repayment.

xxx

Thus, nonpayment wiII perforce, as conveyed in the terms of

the various loans, result in the imposition of interest and penalties

until full payment is made.

Thusly, the Civil Code of the Philippines states that:

Art. 1233. A debt shall not be understood to have been paid

unless the thing or service in which the obligation consrsts
has been completely delivered or rendered, as the case may
be.

Not having been fully paid, a debt or a loan continues to earn

interest and incur penalties for nonpayment in accordance with the

terms of said loan. It is, therefore, evident from the foregoing that
the continued lmposition of interest and penalties on unpaid loan
accounts after separation from service of non-compulsory retirees

is actually based on the implementation of the terms of the

respective loans themselves and the application of the law as a

consequence of nonpayment.

It is noted that non-compulsory retirees, are not mandatorily

required to retire, which means that even if already separated from

service, the member may still opt, instead of retiring, to re-enter or

rejoin government service. This is a choice that GSIS cannot

presume to divest from said class of members. Thus, there is a

need to wait for the actual filing of the application for retirement

before the accrual of interest and the imposition of penalties on

t7
unpaid loan accounts may be stopped, in view of the computation

against and deduction of the same from the retirement benefits

due. This deduction, in turn, is done in accordance with the power
and authority of the GSIS to deduct from a retiree's retirement
benefits any and all unpaid obligations owed to the GSIS pursuant
to Section 39 of R.A. No. B29Lls.

From the foregoing, it ls clear that Directive No. 2011-D-

0621-NCO-003 is not the basis for the continued imposition of
interest and penalties on Petitioner's unpaid loan accounts until
May 7, 201,3. In truth, Directive No. 2011-D-0621-NCO-003 was
issued for the information and guidance of the employees of the
GSIS in order to ensure uniform enforcement of the terms of the

Ioan contracts and the application of the Iaw relative to the accrual

of interest and penalties. Thus, it is a mere interpretative issuance,

which is intended to be internal in nature.

Thus, Petitioner's arguments against the Directive No. 2011-

D-0621-NCO-003 need not be discussed for lack of basis and merit'

Be that as it may, the peculiar set of facts extant in this case

justifies the grant of refund of the interest and penalties incurred

by Petitioner's loan accounts from November 18, 2010 until May 7,

'' xxx xx* ,a*x

The funds and/or the properties referred to hetein as well as the benefits, sums or monies
corresponding to the benefits under this Act shall be cxempt from attachment, garnishment,
execution, levy or other Processes issucd by the courts, quasi-iudicial agencies or
administrative bodies including Commission on Audit (COA) disallorvances and from all
financial obligations of the menrbers, including his pecuniary accountability arising from or
caused or occasioned by his exercise or pcrfolmance of his official functions or duties, or
incurred relative to or in connection with his position or work except when his monetary
liability, contractual or otherwise, is in favor of the GSIS (Emphasis supplied)

il{
2013, which were deducted from Petitioner's retirement benefits.

The records of the case provide substantial proof of the existence of

certain circumstances, which lead to the conclusion that Petitioner

did indeed attempt to file his retirement application on November
18, 2010 but was thwarted by the fact that, at that time, his service

record was incomplete and not yet updated. Petitioner's

contemporaneous and subsequent acts, adamant insistence and the

email correspondence from the DSWD to the GSIS all point to the

fact that Petitioner indeed tried to file his retirement application on

November 18, 2010.

The records of this case reveal the clear intent of Petitioner

to retire as proved by Petitioner's October 1,4, 2OlO letter to the

then Provincial Governor of Cavite, which clearly indicates

Petitioner's intention to retire effective November 17,2010 as

expressly stated in said letter.

Moreover, the records of thls case show that the AAO of

DSWD sent an email to the GSIS on November 23, 201.0, for the
purpose of correcting Petitioner's service record, a mere five (5)

days from when Petitioner claimed he tried but failed to file his

application for retirement. From this, it can be deduced that

Petitioner went to his previous employer, DSWD, after being

advised by the GSIS to do so in order to facilitate the correction

and updating of his service record.

It can hardly be believed that DSWD, out of the blue and of

its own accord, without knowing that Petitioner's service record

t9
needed to be updated or corrected, simply sent to the GSIS
Petitioner's service record pertaining to his years in service with
the DSWD, without any request or provocation. Clearly, said email
from the DSWD proves that Petitioner went to the latter to request
for the updating of his service record after he was advised by the
GSIS to do so. From there, it can be inferred that Petitioner indeed
went to the GSIS to file his retirement application sometime before

then but was informed that per GSIS records, he was not qualified
to retire under R.A. No. 8291 due to insufficient number of years in
service and was advised instead to enlist the assistance of his
previous employer-agency in order to rectify and update his service

record.

Furthermore, Petitioner's adamant insistence on his intent to

file his retirement claim in requesting for the immediate updating
of his service records, strengthen Petitioner's claim that on
November lB, 201.0, he tried to file his application for retirement
benefits but was informed that if he does hle the same on that day,

he will not be entitled to retirement benefits but only to separation

benefits because his service record then reflected that he had less

than the required number of years for retirement. Given that

scenario and clearly knowing that he had, in fact, already earned

more than the required fifteen (15) years of government service, it

is but natural for Petitioner to not settle for separation benefits
when he knew and believed that he is entitled to retirement
benefits, which, unlike the separation benefits he was allegedly
only entitled to, include pension benefits.

20
 In fact, the records show that Petitioner had been vigilant in
inquiring with the GSIS regarding the status of his request for
updating of his service record due to his intent to immediately file
his application for retirement once his service record is rectified.
Petitioner made his intention to retire sufficiently clear. It is

llkewise noted that Petitioner could not even have validly filed his

application for retirement without his service record first being

rectified to reflect his correct years in government service. Thus,
Petitioner, of necessity, had to wait for his service record to be
officially updated.

From the foregoing, it is clearly evident that had it not been

for the incorrect serrrice record of Petitioner, he would have filed
his application for retirement on November lB, 2OlO. AII of
Petitioner's verifiable overt acts before and after his separation
from service all point towards his clear intent to already retire from
government service effective November 1'7 , 2OlO and file his

retirement application on November 18, 2010. Most importantly,

with the submission of Petitioner's last employer-agency, the

Provincial Government of Cavite, to the GSIS of the Petitioner's

complete and updated service record, it was finally proven, as

consistently insisted by Petitioner, that he indeed has more than

the required fifteen (15) years of government service, which

qualifies him to retire under R.A. No. 8291. Accordingly, had
Petitioner been able to file his retirement application on November

t8, 2OlO, the interests and penalties on his respective loans would
not have accrued.

2l
 Considering the factual backdrop of the case, it is deemed
just and proper under the circumstances to consider November 18,

2010 as the date Petitioner actually filed his retirement application.

Thus, the interest and penalties on Petitioner's unpaid loan

accounts must be reckoned only until November 18,2010 and not

May 7,20L3. Hence, the grant of a refund in the amount of Sixty

Seven Thousand Nine Hundred Fifty Eight Pesos and Fifty

Eight Centavos (Php 67,958.58)16, representing the interest and
penalties imposed on Petitioner's outstanding loan accounts from

November 18, 2010 until May 7,2013 which were deducted from

his retirement benefits, is proper. The amount of Php 67,958.58 is

derived as follows:

As of November Actual Deduction Difference

18,2010 (as of May 7,
2013)
CNL,, 238,748.94 297,299.53 58,550.59
ECAD'8 L7,323.24 2r,576.88 4,253.64
EMLI9 L9,275.2t 24,429.56 s,154.35
TOTAL: 275,347.39 343,305.97 67,9s8.58

On the other hand, Petitioner's claim for damages against the

GSIS is patently devoid of merit. Petitioner in his assertions faults

the GSIS for the alleged delay in the updating of his service

records. The records of this case, however, directly belie this

claim. The records clearly show that Petitioner's requests were all
addressed and answered. In fact, the GSIS even facilitated
Petitioner's request by directly getting in touch with the AAO of

Per final and reconciled computation of Petitioner',s loan accounts as of November 18, 2010.
I6
r?
Consolidated Loan
r8 ECard Plus Cash Advance Loan
le Emergency Loan

22
Petitioner's previous employer as early as April 2011 so that the

latter may send, through the proper channel with the required
documentation, Petitioner's updated and verified service record.
However, for some reason and despite repeated requests,
Petitioner's former employer-agency failed to submit Petitioner's
updated service record until the latter part of February 2013.

Notably, even the Office of the Ombudsman, in its Order

dated April 26, 2013, dismissed Petitioner's complaint relative to

the alieged inaction of the GSIS on the same matter, finding that
there was, in fact, no inaction on the part of the PGM.

Contrary to Petitioner's claims, no fault or malice may be

attributed to the GSIS in handling Petitioner's claim. The GSIS, ln
fact, also much like Petitioner, had no hand in the delay of the
transmittal of Petitioner's updated and verified service record. As
already mentioned above, records show that as early as 2011, aside

from informing Petitioner that he should coordinate with the AAO

of his employer-agency so that the latter may officially transmit to
the GSIS Petitioner's updated service record, GSIS requested for
Petitioner's updated service record from the AAO of the Provincial
Information Office to assist in the facilitation of Petitioner's
request.

For obvious reasons, the GSIS is constrained to require that

the transmission of documents be done through official channels
in order to ensure the veracity and authenticity of the documents
submitted and the contents thereof. Verily, the GSIS is not a lone

operator in this enterprise. The GSIS works in close coordination

ZJ
and cooperation with the different employer-agencies and the
employee-members themselves. As in this case, the GSIS could not

update Petitioner's service record without the direct participation

and intercession of Petitioner's employer-agency' Clearly,

Petitioner's allegations of any misfeasance or malfeasance against

the GSIS are unfounded and without factual basis. Thus,

Petitioner's claim for damages has no leg to stand on.

IN VIEW OF THE FOREGOING, the Petition is PARTIALLY

GRANTED. Petitioner's claim for refund is granted. The GSIS

Operating Unit Concerned (OUC) is directed to return to Petitioner

the amount of Sixty Seven Thousand Nine Hundred Fifty Eight
Pesos and Fifty Eight Centavos (Php 67,958.58) representing
the interest and penalties incurred from November 18, 2010 until
May 7, 2013, which were previously deducted from Petitioner's
retirement benefits.

However, Petitioner's claim for damages is denied for Iack of

merit. The Committee on Claims Resolution in Case No. 50-2014

datedJuly 4,2014 is reversed and set aside.

SO ORDERED.

Pasay City,

lSgd.l RENATO T. DE GUZMAN

Chairman

24
lSgd.l MARIO J. AGUJA [Sgd.l ROMEO M. ALIP
Trustee Trustee

lSgd.l ELISEA G. GOZUN lSgd.l GERALDINE MARIE

Trustee BERBERABE-MARTINEZ
Trustee

tsgd.l GREGORIO T. YU
Trustee

Copy furnished:

Emelito L. Rio
Petitioner
Lot 85, Block 19, AreaJ
Brgy. De Las Alas
GMA, Cavite

-and-

Lot 2-8, Block 6, Isla

Brgy. Kapitan Kua
Gen. Mariano A]varez, Cavite

Atty. Jennifer B. Rosales

Counsel for CoC
Prosecution and QuasiJudicial Cases Department
Legal Services Group
GSIS
Financial Center, Pasay City

75
 CERTIFICATION

I, VANESSAJOY B. ONG PE-JONES, Attorney V, of the GSIS Legal Services

Group, having been assigned as the Hearing Officer to draft the Decision in
GSIS Board of Trustees Case Nos. 002-15 entrtled "In the Matter: The
Request for Refund of Interest and penalties Deducted from Retirement
Benefits" hereby certify that the statement of facts herein stated and being
presented before this Board is accurate and true, based on the records of
the case, the pleadings and other documents submitted by the parties.

This certification is issued in compliance wrth Board Resolution No. 198-A

adopted on September 15, 2004.

Pasay City, June 16,2016.

lSgd.l VANESSAJOY B. ONG PE-JONES

Hearing Officer
 C S IS F, PJ,:', il T,"#J, l,'J,"# ".',?,',HI fl I i,* I,' i s ffi

OFFICE OF THE CORPORATE SECRETARY

EXACT COPYOF RES. NO. 82 ADOPTED BYTHE GSIS BOARD OF

TRUSTEES IN ITS MEETING NO. 16 HELD ON 18 OCTOBER 2016

Approval ofthe Decision in GSIS Case No. OO2-15, In the

Matter of: The Request for Refund of Interest and
Penalties Deducted from Retirement Eeneflrts, Emelito L.
Rio, Petitioner
RESOLUTION NO. EZ

WHER-EAS, prl"r..,t to Section 30 of R.A. No.

829 1, the GSIS has original and exclusive jurisdiction
to settle any dispute arising from the application of
the laws administered by the GSIS;
WHEREAS, Mr, Emelito L. Rio filed a petition
before the GSIS Board of Trustees, docketed as GSIS
Case No. 002-15, appealing the Decision dated 4 July
2Ol4 of the GSIS Committee on Claims in Case No.
50-2014, which denied his request for refund of the
interest and penalties deducted from his retirement
benefits;

RESOLVED, to APPROVE and CONFIRM the

Decision in GSIS Case No. 002-15, In the Motter of:
The Request for Refund of Interest and Penctlties
Deducted from Retirement Benefi.ts, Emelito L. Rio,
Petitioner, the dispositive portion of which states:
-IN VIEW OF THE FOREGOING, thc
Petition is PARTIALLY GRANTED. Petitioner's
claim for refund is granted. The GSIS
Operating Unit Concerned (OUC) is directed to
return to Petitioner the amount of Sixty Seven
Thousand Nine Hundred Fifty Eight Pesos
and Fifty Elght Centavos (Php 67,958.581
representing the interest and penalties
incurred from November 18, 2010 until May 7,
20 13, which were previousiy deducted from
Petitioner's retirement benefits.
"However, Petitioner's claim for damages
is denied for lack of merit. The Committee on
Claims Resolution in Case No. 50-2014 dated
July 4, 2014 is reversed and set aside.

i,,/4
 BOARD MEETING NO. 16
18 oCTOBER 2016
Page 2
(Res. No. 82- -2OL6l

..SO ORDERED."

A copy of the Decision in GSIS Case No. OO2- 15

is attached and made an integral part of this
Resolution.

CERTIFIED CORRECT:

[Sgd.] ATTY. MARIA THERESA /IBES/IMIS-R.AAGAS

Corporate Secretary

CONFIRMED:

lsgd.l RENATO T. DE GUZMAN

Chairman

[sgd.] cneGoRIO T. YU [sgd.] MARIo J. AGUJA

Trustee Trustee

lssd.l ELISEA G. cozuN [sgd.]RoMEo M. ALIP

Trustee Trustee

lsgd.l GERAIDINE MARIE BERBERABE-MARTTNEZ

Trustee