Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Subsection (c), Section twelve of Commonwealth Act Numbered One hundred eighty-six, as amended by Republic Act Numbered Thirty hundred ninety-six, is further amended to read as follows:

"(c) Retirement is likewise allowed to a member, regardless of age, who has rendered at least twenty years of service. The benefit shall, in addition to the return of his personal contributions plus interest and the payment of the corresponding employer's premiums described in subsection (a) of Section five hereof, without interest, be only a gratuity equivalent to one month's salary for every year of service, based on the highest rate received, but not to exceed twenty-four months: Provided, That the retiring officer or employee has been in the service of the said employer or office for at least four years immediately preceding his retirement.

"Retirement is also allowed to a senator or a member the House of Representatives and to an elective officer either House of the Congress, regardless of age, prodded, that in the case of a senator or member he must have served at least twelve years as a senator and/or  a member of the House of Representatives, and, in the case of an elective officer of either House, he must have served the government for at least twelve years, not less than four years of which must have been rendered as such elective officer: Provided, That the gratuity payable to a retiring senator, member of the House of Representatives, or elective officer of either House, shall be equivalent to one year's salary for every four years of service in the government and the same shall be exempt from any tux whatsoever and shall be neither liable to attachment or execution nor refundable in case of reinstatement or reelection of the retiree.

"This gratuity is payable by the employer or office concerned which is hereby authorized to provide the necessary appropriation or pay the same from any unexpended items of appropriations or savings in its appropriations.

"Elective or appointive officials and employees paid gratuity under this subsection shall be entitled to the commutation of the unused vacation and sick leave, based on the highest rate received, which they may have to their credit at the time of retirement."

SEC. 2. This Act shall take effect upon its approval.

Approved, June 22, 1963.