Sec. 39 Tax Exemption.

MARINO E. RUBIA vs. GSIS G.R. No. 151439 (2004)

Rubia is an employee of the Philippine Air Lines (PAL) who obtained from the Government Service
Insurance System (GSIS) a P140,556 loan for the purchase of a house and lot at Pacita Complex I, San
Pedro, Laguna. On July 30, 1996, he filed a complaint against GSIS and its officers for specific
performance with damages, seeking refund of his alleged overpayment as of November 1995 of
P273,604.79 plus, legal interest of 12% per annum until fully paid. The RTC rendered judgment in favor
of the petitioner ordering the latter to pay Rubia principal sum of P273,604.79 plus legal interest until
fully paid, and 25% of the principal amount due as and for professional fees. GSIS contends that under its
Charter, they are exempt from execution.

HELD: In so far as Section 39 of the GSIS charter exempts the GSIS from execution, suffice it to say that
such exemption is not absolute and does not encompass all the GSIS funds. By way of illustration and as
may be gleaned from the Implementing Rules and Regulation of the GSIS Act of 1997, one exemption
refers to social security benefits and other benefits of GSIS members under Republic Act No. 8291 in
connection with financial obligations of the members to other parties.

The processual exemption of the GSIS funds and properties under Section 39 of the GSIS Charter, in
our view, should be read consistently with its avowed principal purpose: to maintain actuarial solvency of
the GSIS in the protection of assets which are to be used to finance the retirement, disability and life
insurance benefits of its members. Clearly, the exemption should be limited to the purposes and objects
covered. Any interpretation that would give it an expansive construction to exempt all GSIS assets from
legal processes absolutely would be unwarranted.

Furthermore, the declared policy of the State in Section 39 of the GSIS Charter granting GSIS an
exemption from tax, lien, attachment, levy, execution, and other legal processes should be read together
with the grant of power to the GSIS to invest its excess funds under Section 36 of the same Act. [29] Under
Section 36, the GSIS is granted the ancillary power to invest in business and other ventures for the benefit
of the employees, by using its excess funds for investment purposes. In the exercise of such function and
power, the GSIS is allowed to assume a character similar to a private corporation.

Sec. 39. Legal Fees

Re: Petition for recognition of the exemption of the government service insurance system from payment
of legal fees. A.M. No. 08-2-01-0 (2010)
GSIS seeks exemption from the payment of legal fees imposed on government-owned or controlled
corporations under Section 22, Rule 141 (Legal Fees) of the Rules of Court. GSIS anchors its petition on
Section 39 of its charter, RA 8291.
Held: Since the payment of legal fees is a vital component of the rules promulgated by this Court
concerning pleading, practice and procedure, it cannot be validly annulled, changed or modified by
Congress. As one of the safeguards of this Court's institutional independence, the power to promulgate
rules of pleading, practice and procedure is now the Court's exclusive domain. That power is no longer
shared by this Court with Congress, much less with the Executive. Congress could not have carved out an
exemption for the GSIS from the payment of legal fees without transgressing another equally important
institutional safeguard of the Court's independence fiscal autonomy. Any exemption from the payment
of legal fees granted by Congress to government-owned or controlled corporations and local government
units will necessarily reduce the Judiciary Development Fund (JDF) and the Special Allowance for the
Judiciary Fund (SAJF). Undoubtedly, such situation is constitutionally infirm for it impairs the Court's
guaranteed fiscal autonomy and erodes its independence. The petition of the Government Service
Insurance System for recognition of its exemption from the payment of legal fees imposed under Section
22 of Rule 141 of the Rules of Court on government-owned or controlled corporations and local
government units is hereby denied.

Permanent Total Disability

BERNARDINO S. MANIOSO v. GSIS 457 SCRA 607 (2005)
Manioso is an Accounting Clerk I who started working at the Budget Commission on July 13, 1959. He
was transferred to the Bureau of Forestry with the same position on August 10, 1959. He was promoted to
the position of Senior Book keeper of the Department of Environment and Natural Resources, Region IV,
Manila. It was in 1978 when Manioso was found to be suffering from Hypertensive Vascular Disease.
Since then, Manioso was already in and out the hospital for the purpose of having tests conducted on him
and to be hospitalized on several instances. From January 11, 1995 up to May 15,1995 when Manioso
compulsory retired from the government service on reaching 65 years of age and after serving almost 36
years, he no longer reported for work. His sick leave covering the said period was duly approved.
Manioso filed with the GSIS for additional benefits claiming that the ailments for which he was
hospitalized several times in 1997 developed from his work related illnesses. The GSIS disapproved
petitioners request upon the ground that he was already paid the maximum monthly income benefit for
eight (8) months covering the period from May 15, 1995 to January 14, 1996 commensurate to the degree
of his disability at the time of his retirement. On appeal, the GSISs ruling was also affirmed. Hence, this
petition.
HELD: Benefits due an employee due to work-related sickness shall be provided until he becomes
gainfully employed, or until his recovery or death. Under Article 192 (a) of the Labor Code, any
employee who contacts sickness or sustains an injury resulting in PTD shall, for each month until his
death, be paid by the [GSIS] during such disability, an amount equivalent to the monthly income benefit,
plus ten percent thereof for each dependent child, but not exceeding five. And under Article 192 (b) of the
same Code, the only time the income benefits, which are guaranteed for five years, shall be suspended is
if the employee becomes gainfully employed, or recovers from his PTD or fails to be present for
examination at least once a year upon notice by the GSIS. As Manioso's medical records show that the
ailments that he suffered in 1997 are complications that resulted from his work-related ailments, the right
to compensation extends to disability due to disease supervening upon and proximately and naturally
resulting from compensable injury. Manioso's retirement from the service does not prevent him from
availing of the PTD benefits to which he is entitled. For as stated earlier, benefits due an employee due to
work-related sickness shall be provided until he becomes gainfully employed, or until his recovery or
death. None of these is present in Manioso's case. It would be an affront to justice if Manioso, a
government employee who had served for thirty six (36) years, is deprived of the benefits due him for
work-related ailments that resulted in his Permanent Total Disability.
Death benefits

GSIS vs. Marilou Alcaraz G.R. No. 187474 (2013)

Bernardo was employed for almost twenty-nine (29) years by the MMDA in Makati City. He worked at
the MMDA as laborer, Metro Aide and Metro Aide I. Sometime in 2004, Bernardo was diagnosed with
Pulmonary Tuberculosis (PTB) and Community Acquired Pneumonia (CAP). On May 13, 2004, he was
confined at the Ospital ng Makati. He was discharged on May 19, 2004 with the following diagnosis:
Acute Diffuse Anterolateral Wall Myocardial Infarction, Killips IV-1, CAP High Risk, PTB III and
Diabetes Mellitus Type 2. On January 15, 2005, Bernardo was found dead at the basement of the MMDA
building. His body was brought to the Southern Police District Crime Laboratory in Makati City for an
autopsy. Medico-Legal Officer performed the autopsy and concluded that Bernardo died of Myocardial
Infarction, old and recent. Bernardos widow, Marilou, subsequently filed a claim for death benefits with
the GSIS. The GSIS denied the claim for death benefits on the ground that myocardial infarction, the
cause of Bernardos death, was directly related to diabetes which is not considered a work-connected
illness; hence, its complications, such as myocardial infarction, are not work-related. Marilou appealed to
the ECC which affirmed the GSIS ruling. The Court of Appeals granted the petition and set aside the
ECC ruling. The CA found sufficient proof of work-connection between Bernardos ailment and his
working conditions. It believed that his work as laborer and metro aide must have substantially
contributed to his illness. The CA ordered the GSIS to pay Bernardos heirs the proper benefits for his
death consistent with the State policy to extend the applicability of the employees compensation law,
Presidential Decree No. 626, to a greater number of employees who can avail of the benefits under the
law, in consonance with the avowed policy of the State to give maximum aid and protection to labor.

Held: The conclusions of the two agencies totally disregarded the stressful and strenuous conditions under
which Bernardo toiled for almost 29 long years as a laborer and as a metro aide. By so doing, they closed
the door to other influences that caused or contributed to Bernardos fatal heart problem an ailment
aggravated with the passage of time by the risks present in the difficult working conditions that Bernardo
had to bear from day to day in his employment. The CAs conclusion is bolstered by the fact that the ECC
itself, the government agency tasked by law to implement the employees compensation program (together
with the GSIS in the public sector and the Social Security System [SSS] in the private sector), included
cardio-vascular diseases in the list of occupational diseases, making them compensable, subject to any of
the conditions stated. Bernardo had in fact been a walking time bomb ready to explode towards the end of
his employment days. Records show that the debilitating effect of Bernardos working conditions on his
health manifested itself several months before his death.

The court find no merit in the petition. The CA committed no reversible error nor any grave abuse of
discretion in awarding death benefits to Bernardos heirs. As a final point, the court take this occasion to
reiterate that as an agency charged by law with the implementation of social justice guaranteed and
secured by the Constitution the ECC (as well as the GSIS and the SSS) should adopt a liberal attitude
in favor of the employees in deciding claims for compensability, especially where there is some basis in
the facts for inferring a work-connection to the accident or to the illness. This is what the Constitution
dictates. Petition is denied.

Survivorship benefits

GSIS v. Milagros Montesclaros G.R. No. 146494 (2004)

Sangguniang Bayan member Nicolas Montesclaros, a 72-year-old widower married Milagros Orbiso, who
was then 43 years old, on 10 July 1983. Nicolas filed with the GSIS an application for retirement benefits
under the Revised Government Insurance Act of 1977. In his retirement application, he designated his
wife as his sole beneficiary. GSIS approved Nicolas application for retirement effective 17 February
1984, granting a lump sum payment of annuity for the first five years and a monthly annuity after.
Nicolas died on 22 April 1992. Milagros filed with the GSIS a claim for survivorship pension under PD
1146 but was denied the claim because under section 18 of PD 1146, the surviving spouse has no right to
survivorship pension if the surviving spouse contracted the marriage with the pensioner within three years
before the pensioner qualified for the pension. Nicolas wed Milagros on 10 July 1983, less than one year
from his date of retirement on 17 February 1984. Milagros filed with the trial court a special civil action
for declaratory relief questioning the validity of Sec. 18 of PD 1146. The trial court rendered judgment
declaring Milagros eligible for survivorship pension and ordered GSIS to pay Milagros the benefits
including interest. Articles 115 and 117 of the Family Code states that retirement benefits are property
acquired through labor and therefore, are conjugal property. The trial court held that Section 18 of PD
1146 was repealed by the Family Code, a later law. GSIS appealed to the Court of Appeals, which
affirmed the trial courts decision. Hence, this appeal. In a letter dated 10 January 2003, Milagros
informed the Court that she has accepted GSIS decision disqualifying her from receiving survivorship
pension and that she is no longer interested in pursuing the case. However, the Court will still resolve the
issue despite the manifestation of Milagros because social justice and public interest demand the
resolution of the constitutionality of the proviso.

Held: The surviving spouse of a government employee is entitled to receive survivor's benefits under a
pension system. However, statutes sometimes require that the spouse should have married the employee
for a certain period before the employee's death to prevent sham marriages contracted for monetary
gain. One example is the Illinois Pension Code which restricts survivor's annuity benefits to a surviving
spouse who was married to a state employee for at least one year before the employee's death. Indeed,
the classification is discriminatory and arbitrary. This is probably the reason Congress deleted the proviso
in Republic Act No. 829, otherwise known as the "Government Service Insurance Act of 1997," the law
revising the old charter of GSIS (PD 1146). Under the implementing rules of RA 8291, the surviving
spouse who married the member immediately before the member's death is still qualified to receive
survivorship pension unless the GSIS proves that the surviving spouse contracted the marriage solely to
receive the benefit. Thus, the present GSIS law does not presume that marriages contracted within three
years before retirement or death of a member are sham marriages contracted to avail of survivorship
benefits. The present GSIS law does not automatically forfeit the survivorship pension of the surviving
spouse who contracted marriage to a GSIS member within three years before the member's retirement or
death. The law acknowledges that whether the surviving spouse contracted the marriage mainly to receive
survivorship benefits is a matter of evidence. The law no longer prescribes a sweeping classification that
unduly prejudices the legitimate surviving spouse and defeats the purpose for which Congress enacted the
social legislation. The petition is denied for want of merit. The court declare void for being violative of
the constitutional guarantees of due process and equal protection of the law the proviso in Section 18 of
Presidential Decree No. 1146, which proviso states that "the dependent spouse shall not be entitled to said
pension if his marriage with the pensioner is contracted within three years before the pensioner qualified
for the pension." The Government Service Insurance System cannot deny the claim of Milagros O.
Montesclaros for survivorship benefits based on this invalid proviso.
Disability benefits

Valeriano vs. ECC and GSIS, June 8, 2000 GR 136200

Celestino Valeriano was employed as a firetruck driver. On the evening of July 3, 1985, after having
dinner with a friend, Valeriano met an accident and was severely injured when the vehicle he was on
collided with another. Valeriano claimed for benefits from the GSIS which the latter denied for being non-
compensable. The ECC and CA sustained the system, reasoning that the injury resulted not from an
accident arising out of and in the course of employment nor was it work-connected.

Held: Valerianos injuries were non-compensable. Valerianos contention, citing the Hinoguin and Nitura
cases, that the 24-hour doctrine be applied to his case since the exigency of his job demand it to be so was
held untenable by the Court. The Court did not find any reasonable connection between his injuries and
his work as a firetruck driver. Applying the principle laid down in the Alegre case, the 24-hour doctrine is
not meant to embrace all acts and circumstances of an employee though he be on active on call duty.
Valeriano was neither at his assigned work place nor in pursuit of the orders of his superiors when he met
the accident. He was also not doing an act within his duty and authority as a firetruck driver, or any other
act of such nature, at the time he sustained his injuries. In fact, he was pursuing a purely personal and
social function when the accident happened. The accident not work-connected was, therefore, non-
compensable.

Manila Prince Hotel vs. GSIS

267 SCRA 402 February 1997 En Banc

Pursuant to the privatization program of the government, GSIS chose to award during bidding in
September 1995 the 51% outstanding shares of the respondent Manila Hotel Corp. (MHC) to theRenong
Berhad, a Malaysian firm, for the amount of Php 44.00 per share against herein petitioner which is a
Filipino corporation who offered Php 41.58 per share. Pending the declaration of Renong Berhad as the
winning bidder/strategic partner of MHC, petitioner matched the formers bid prize also with Php 44.00
per share followed by a managers check worth Php 33 million as Bid Security, but the GSIS refused to
accept both the bid match and themanager's check.One day after the filing of the petition in October 1995,
the Court issued a TRO enjoining therespondents from perfecting and consummating the sale to the
Renong Berhad. In September 1996, the Supreme Court En Banc accepted the instant case.
Held: The Supreme Court directed the GSIS and other respondents to cease and desist from selling the
51% shares of the MHC to the Malaysian firm Renong Berhad, and instead to accept the matching bid of
the petitioner Manila Prince Hotel.According to Justice Bellosillo, ponente of the case at bar, Section 10,
second paragraph, Article 11 of the 1987 Constitution is a mandatory provision, a positive command
which is complete in itself and needs no further guidelines or implementing laws to enforce it. The Court
En Banc emphasized that qualified Filipinos shall be preferred over foreigners, as mandated by the
provision in question.The Manila Hotel had long been a landmark, therefore, making the 51% of the
equity of said hotel to fall within the purview of the constitutional shelter for it emprises the majority and
controlling stock. The Court also reiterated how much of national pride will vanish if the nationals
cultural heritage will fall on the hands of foreigners.

In his dissenting opinion, Justice Puno said that the provision in question should be interpreted as pro-
Filipino and, at the same time, not anti-alien in itself because it does not prohibit the State from granting
rights, privileges and concessions to foreigners in the absence of qualified Filipinos. He also argued that
the petitioner is estopped from assailing the winning bid of Renong Berhad because the former knew the
rules of the bidding and that the foreigners are qualified, too.

GSIS v. VALENCIANO, 487 SCRA 109

While being an employee of the Philippine Ports Authority, respondent was inflicted with tuberculosis,
hypertension and diabetes. He then filed with the petitioner Government Service Insurance System
(GSIS) a claim for compensation benefits under PD No. 626. However, petitioner denied the respondents
claim on the ground that the ailments are not considered occupational diseases, and there is no clear
evidence, such as medical records, showing that he contracted the diseases during his work or his duties
have increased the risk of contracting said ailments. Petitioner rejected respondent's contention that there
is probability of contracting TB with the kind of job the respondent has.

HELD: A social legislation should interpreted liberally. In applying liberality in the interpretation of
Workmen's Compensation Law, the degree of proof required by the law is such relevant evidence as a
reasonable mind may accept to support a conclusion. Probability, not certainty, is the touchstone. Any
doubt on this matter has to be interpreted in favor of the employees considering that PD 626 is a social
legislation.

Francisco vs GSIS (1963)

The plaintiff, Trinidad J. Francisco, in consideration of a loan mortgaged in favor of the defendant,
Government Service Insurance System a parcel of land known as Vic-Mari Compound, located at Baesa,
Quezon City. The System extrajudicially foreclosed the mortgage on the ground that up to that date the
plaintiff-mortgagor was in arrears on her monthly instalments. The System itself was the buyer of the
property in the foreclosure sale. The plaintiffs father, Atty. Vicente J. Francisco, sent a letter to the
general manager of the defendant corporation, Mr. Rodolfo P. Andal. And latter the System approved the
request of Francisco to redeem the land through a telegram. Defendant received the payment and it did
not, however, take over the administration of the compound. The System then sent a letter to Francisco
informing of his indebtedness and the 1 year period of redemption has been expired. And the System
argued that the telegram sent to Francisco saying that the System has approved the request in redeeming
the property is incorrect due to clerical problems.
Held: There was nothing in the telegram that hinted at any anomaly, or gave ground to suspect its
veracity, and the plaintiff, therefore, cannot be blamed for relying upon it. There is no denying that the
telegram was within Andals apparent authority. Hence, even if it were the board secretary who sent the
telegram, the corporation could not evade the binding effect produced by the telegram. Knowledge of
facts acquired or possessed by an officer or agent of a corporation in the course of his employment, and in
relation to matters within the scope of his authority, is notice to the corporation, whether he communicates
such knowledge or not. Yet, notwithstanding this notice, the defendant System pocketed the amount, and
kept silent about the telegram not being in accordance with the true facts, as it now alleges. This silence,
taken together with the unconditional acceptance of three other subsequent remittances from plaintiff,
constitutes in itself a binding ratification of the original agreement.

Agcaoili vs. GSIS, 165 SCRA 1

In this case, appellant GSIS approved an application of the appellee Agcaoli for the purchase of a house
and lot in the GSIS Housing Project at Nangka, Marikina, subject to the condition that the latter should
forthwith occupy the house, a condition that Agcaoli tried to fulfill but could not because the house was
absolutely uninhabitable. However, Agcaoli ask a homeless friend, a certain Villanueva, to stay in the
premises as some sort of watchman, pending completion of the construction of the house. Agcaoli after
paying the first installment and other fees, having thereafter refused to make further payment of other
stipulated installments until GSIS had made the house habitable; and appellant having refused to do so,
opting instead to cancel the award and demanded the vacation by Agcaoli of the premises; and the latter
having sued the GSIS in the Court of First Instance of Manila for specific performance with damages and
having obtained a favorable judgment, the cases was appealed by the GSIS.

Held: Appeal of GSIS must fail. There was then a perfected contract of sale between the parties; there had
been a meeting of minds upon the purchase by Agcaoli of a determinate house and lot from GSIS at a
definite price which is payable in amortizations and from that moment the parties acquired the right to
reciprocally demand performance. It was, to be sure, the duty of the GSIS, as seller, to deliver the thing
soled in acondition suitable for its enjoyment by the buyer, in other words to deliver the house subject of
the contract in a reasonably livable state. This it failed to do. Since GSIS failed to fulfill its obligation,
and was not willing to put the house in a habitable state, it cannot invoke Agcaolis suspension of
payment as cause to cancel the contract between them. In recipient obligation, neither party incur in delay
of the other does not comply or is not ready to comply in a proper manner with what is incumbent upon
him. Nor may the GSIS succeed in justifying its cancellation of the award by the claim tha Agcaoli had
not complied with the condition of occupying the house within three (3) days. The record shows that
Agcaoli did try to fulfill the condition.
Finally appellant having caused the ambiguity as the exact prestation of the agreement, the question of
interpretation arising therefrom, should be resolved against it.

Retirement Benefits
Avelina B. Conte v. Commission on Audit G.R. No. 116422. November 4, 1996

Petitioners Avelina B. Conte and Leticia Boiser-Palma were former employees of the Social Security
System (SSS) who retired from government service. They availed of compulsory retirement benefits
under Republic Act No. 660 (An act to amend Commonwealth Act 186 entitled "An Act to create
and establish a Government Service Insurance System, to provide for its administration, and to
appropriate the necessary funds therefor," and to provide retirement insurance and for other
purposes). In addition, petitioners also claimed benefits granted under SSS Resolution No. 56, series of
1971 that provides financial incentive and inducement to SSS employees qualified to retire to avail of
retirement benefits under RA 660 as amended, rather than the retirement benefits under RA 1616 as
amended, by giving them financial assistance equivalent in amount to the difference between what a
retiree would have received under RA 1616, less what he was entitled to under RA 660. Thereafter, COA
issued a ruling disallowing in audit all such claims for financial assistance under SSS Resolution No. 56
for the reason that it results in the increase of benefits beyond what is allowed under existing retirement
laws.

Held: Petitioners contentions are not supported by law. The court held that Res. 56 constitutes a
supplementary retirement plan. The Commission bears stress that the financial assistance contemplated
under SSS Resolution No. 56 is granted to SSS employees who opt to retire under R.A. No. 660. It is
clear that petitioners applied for benefits under RA 660 only because of the incentives offered by Res. 56,
and that absent such incentives, they would have without fail availed of RA 1616 instead. The petition is
dismissed for lack of merit, there having been no grave abuse of discretion on the part of respondent
Commission. The said financial assistance partakes of the nature of a retirement benefit that has the
effect of modifying existing retirement laws particularly R.A. No. 660. It is simply beyond dispute that
the SSS had no authority to maintain and implement such retirement plan and in the guise of rule-making,
legislate or amend laws or worse, render them nugatory. Hence, SSS Resolution No. 56 is hereby illegal,
void and no effect. The petition is dismissed for lack of merit. The SSS is hereby urged to assist
petitioners and facilitate their applications under RA 1616, and to advance to them, unless barred by
existing regulations, the corresponding amounts representing the difference between the two benefits
programs.

Permanent Total Disability

GSIS vs. Court of Appeals and Rosa Balais G.R. No. 117572, January 29, 1998

Private respondent Rosa Balais an employee of National Housing Authority suffered from Subarachnoid
Hemorrhage Secondary to Ruptured Aneurysm, because of this she can no longer perform efficiently. For
this reason, she retired and filed for disability benefits. GSIS granted her application for temporary total
disability and later was changed to permanent partial disability. She again filed with GSIS an application
for permanent total disability, which GSIS denied on the ground that her condition does not qualify for
permanent total disability.

Held: A persons disability may not manifest fully at one precise moment in time but rather over a period
of time. It is possible that an injury which at first was considered to be temporary may later on become
permanent or one suffers a partial disability becomes totally and permanently disabled from the same
cause (GSIS vs. CA. G.R. No. 116015, July 31, 1996)

In the case at bar, the denial of the claim for permanent total disability benefit of private respondent who,
for 38 long years during her prime had rendered her best service with an unblemished record and who
was compelled to retire on account of her worsening conditioning would indeed subvert the salutary
intentions of the law in favor of the worker. The court, therefore, affirms the decision of the respondent
Court of Appeals decreeing conversion of private respondents disability from permanent partial disability
to permanent total disability. Petition is denied.

Distinction-Disability

GSIS vs. Court of Appeals and Romeo Bella G.R. No. 132648. March 4, 1999

On June 10, 1964, private respondent Romeo S. Bella was employed by the Bureau of Animal Industry as
a livestock inspector. He retired from the service on August 16, 1986. On July 16, 1987, he was re-
employed by the Department of Agriculture as Agricultural Food Technologist and on March 1, 1994,
promoted to the position of Agriculturist II. On July 1, 1995, private respondent who was then 56 years
old, filed a terminal leave of absence due to physical disability. The medical records of private respondent
reveal that he was suffering from Acute Myocardial Infraction and was confined at the Notre Dame
Hospital in Cotabato City and at the Philippine Heart Center. Thus, private respondent filed with the GSIS
a claim for compensation benefits under P.D. 626 as amended. Finding his application meritorious and his
ailment compensable, the GSIS awarded him a Temporary Total Disability income benefit during the
periods of July 16 to July 21, 1994 and August 24 to August 29, 1994, as well as reimbursement for
medical expenses. Private respondent Romeo S. Bella was also granted a Permanent Partial Disability
income benefit equivalent to 38 months for his Ischemic Cardiomayopathy. Private respondent requested
for the conversion of his benefits from Permanent Partial Disability to Permanent Total Disability,
reasoning out that his ailments of Ischemic Cardiomayopathy and Chronic Obstructure Pulmonary
Disease rendered him unable to engage in any gainful occupation for a continuous period exceeding 120
days, as certified to by his attending physicians. But petitioner GSIS denied his request for Permanent
Total Disability on the ground that the degree of private respondents disability as evaluated by petitioners
medical officers, did not satisfy the criteria for Permanent Total Disability. His motion for reconsideration
was similarly denied. On appeal, the Employees Compensation Commission (ECC) affirmed the Decision
of the GSIS, denying private respondents request for conversion of his Permanent Partial Disability
benefit to Permanent Total Disability benefit.

Held: The Labor Code classifies employees disability into three distinct categories, namely: a) temporary
total disability; b) permanent total disability; and c) permanent partial disability. Section 2, Rule VII, of
the Rules and Regulation Implementing Title II, Book IV of the Labor Code defines and clarifies these
categories, as follows: SEC. 2. Disability.
(a) A total disability is temporary if as a result of the injury or sickness the employee is unable to perform
any gainful occupation for a continuous period not exceeding 120 days, except as otherwise provided for
in Rule X of these Rules.
(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period exceeding 120 days except as otherwise provided
for in Rule of these Rules.
(c) A disability is partial and permanent if as a result of the injury or sickness the employee suffers a
permanent partial loss of the use of any part of his body.
So also, no less than five doctors certified that private respondents illness disabled him from performing
any gainful occupation for a continuous period exceeding 120 days. Then too, even petitioner GSIS
granted private respondent an income benefit amounting to the equivalent of 38 months. Well settled is
the rule that a physicians report of sickness or accident substantiates the disability claim. A doctors
certification as to the nature of the claimants disability may be given credence as he would not normally
make false certification for the sake of a lowly school teacher. It is then beyond cavil that the sickness of
the private respondent made him unable to perform any gainful occupation for a continuous period
exceeding 120 days, thus entitling him to permanent total disability benefits. Clearly, the position taken
by the GSIS and the ECC runs counter to the avowed policy of the State to construe social legislations
liberally in favor of the beneficiaries. The court takes this occasion to stress once more its abiding concern
for the welfare of the government workers, especially the humble rank and file, whose patience, industry
and dedication to duty have often gone unheralded, but who, in spite of every little recognition, plod on
dutifully to perform their appointed tasks. It is for this reason that the sympathy of the law on social
security is toward its beneficiaries, and the law, by its own terms, requires a construction of utmost
liberality in their favor. Petition is denied.