WHEREAS, Section 6, Article XV of the New Constitution has removed the income tax exemption privileges previously enjoyed by members of the Judiciary;

WHEREAS, in view of the removal of such exemption and considering the duties and responsibilities of city judges, there is now a need to upgrade their salaries;

WHEREAS, pursuant to Presidential Decree No. 363, which took effect on January 1, 1974, the salaries of Judges of Courts of First Instance have been increased to forty thousand pesos per annum;

WHEREAS, it is likewise necessary that the salaries of city judges be fixed at commensurate levels; and

WHEREAS, under Appropriation Decree No. 233, there has already been appropriated the sum of P14,185,000 for salary differentials of the Justices, Judges, and other officials of the Judiciary;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree:

SECTION 1. The provisions of existing laws to the contrary notwithstanding, the salaries of city judges are fixed at the following rates:

For the Cities of Manila, Quezon, Caloocan, Pasay, Baguio and Cebu, thirty-five thousand pesos per annum;

For second and third class cities, twenty-five thousand pesos per annum; and

For other cities, twenty thousand pesos per annum;

SEC. 2. The salary differentials resulting from the adjustment of salaries as provided in this Decree shall be paid out of the specific appropriation in Presidential Decree No. 233, for salary differentials of the Justices, Judges, and other officials of the Judiciary, which is hereby programmed for expenditure effective as of January 1, 1974. Thereafter, the new salary rate as provided in Section 1 hereof shall be paid as follows:

1. In cities where the salaries of city judges are fully paid by the city governments, the salary shall be paid in full by the city government concerned: Provided, That in cases of cities whose classification has been reduced, the resulting salary differential shall be paid entirely by the National Government;
2. In cities where the salaries of city judges are fully paid by the National Government, the salary shall continue to be paid by the National Government: Provided, That such payment shall not preclude a city from sharing in the payment of salaries of the city judges serving therein as soon as its financial resources, as determined by the Secretary of Finance, enable it to do so;
3. In cities where the salaries of city judges are partly paid by the city government and partly by the National Government, the salaries herein provided shall continue to be shared proportionately by the city and the National Government in accordance with the existing ratio of their respective shares: Provided, That in case of any increase in the revenue of a city, its share in the salaries of the city judges serving therein shall be proportionately increased and the share of the National Government correspondingly decreased to such amount as may be determined by the Secretary of Finance, until such time as the salaries of the city judges shall be borne in full by the city.

Done in the City of Manila, this 19th day of July, in the year, of Our Lord, nineteen hundred and seventy-four.