Tetangco, Jr. vs. Commission on Audit

The grant of per diems and representation and transportation allowances (RATA) to BSP officials serving as ex-officio members of the Board of Directors of PICCI does not violate the constitutional prohibition against double compensation under Section 8, Article IX-B of the 1987 Constitution, as these are distinct from salary and intended to defray expenses; however, bonuses granted in addition thereto constitute unauthorized additional compensation and are prohibited.

Presidential Decree No. 520 established the Philippine International Convention Center Inc. (PICCI) to manage and operate the Philippine International Convention Center, with the Bangko Sentral ng Pilipinas (BSP) as its sole stockholder. The BSP Governor serves as Chairman of the PICCI Board, with other BSP officials designated as members by the Monetary Board. Between 2006 and 2010, the BSP Monetary Board approved several resolutions increasing the per diems of PICCI Board members and authorizing RATA payments.

• PICCI was incorporated pursuant to Presidential Decree No. 520 dated July 23, 1974, with the BSP (formerly Central Bank) as its sole stockholder.
• Petitioners Amando M. Tetangco, Jr. (then BSP Governor), Armando L. Suratos (then BSP Deputy Governor), and Juan D. De Zuñiga, Jr. (then BSP Deputy Governor and General Counsel) served as ex-officio members of the PICCI Board of Directors from January 2010 to February 2011 (Suratos served until December 2010).
• On October 31, 2000, the PICCI Board proposed and the BSP Monetary Board approved MB Resolution No. 1919, amending the PICCI By-Laws to authorize per diems and allowances for directors.
• Between December 7, 2006 and December 23, 2010, the Monetary Board approved resolutions increasing per diems to P6,000/P7,000 (MB Res. No. 1518), authorizing P10,000 RATA (MB Res. No. 1901), and further increasing per diems to P9,000/P9,500 (MB Res. No. 1855).
• PICCI paid petitioners a total of P618,500.00 in per diems, RATA, and bonuses.
• On August 9, 2010, the Supreme Court decided Singson v. COA, allowing payment of P1,000.00 per diem and P1,500.00 RATA to petitioners' predecessors in the PICCI Board, ruling these did not violate the constitutional proscription against double compensation.
• The COA Audit Team concluded that the benefits violated the rule against double compensation and Executive Order No. 24, citing Section 8, Article IX-B of the 1987 Constitution and Civil Liberties Union v. Executive Secretary.
• The COA directed petitioners and administrative officers (Victoria C. Berciles, Teresa T. Mangila, and Ma. Cecilia N. Martin) to return the amounts received.

• The questioned benefits did not constitute double compensation but were authorized under MB Resolution No. 34 (1994), No. 665 (1996), No. 1919 (2000), Section 30 of the Corporation Code, and the PICCI amended By-Laws.
• Singson v. COA squarely applies, having established that RATA granted to ex-officio members of the PICCI Board who are BSP officers does not violate the constitutional proscription against double compensation.
• Civil Liberties Union is inapplicable because the functions and duties as PICCI Board members are far different from and not merely an adjunct to their primary positions as BSP officers.
• Memorandum Order No. 20 does not apply to PICCI, which is a private corporation governed by the Corporation Code.
• Executive Order No. 24, which took effect on March 21, 2011, cannot apply retroactively to benefits received between January 2010 and February 2011.
• The newly submitted documents (SEC Certificate of Filing of Amended By-Laws and additional MB Resolutions) are admissible as they were submitted in response to the COA's adverse findings.

• The Notice of Disallowance was issued in the valid exercise of COA's general audit power over GOCCs.
• The newly submitted evidence (Board Resolutions and SEC Certificate) is inadmissible.
• PICCI is covered by Memorandum Order No. 20, which suspends the grant of new or increased benefits to GOCC executives.
• Singson is inapplicable to the present case.
• The benefits constitute double compensation under Section 8, Article IX-B of the Constitution.

• Procedural Issues:
  • Whether the documents newly submitted by petitioners (SEC Certificate of Filing of PICCI Amended By-Laws, MB Resolution No. 1518, MB Resolution No. 1901, and MB Resolution No. 1855) attached to their motion for reconsideration before the COA-Proper are admissible in evidence.
• Substantive Issues:
  • Whether PICCI is a government-owned or controlled corporation (GOCC) subject to the audit jurisdiction of the COA.
  • Whether the per diems, RATA, and bonuses received by petitioners constitute unauthorized double compensation under Section 8, Article IX-B of the 1987 Constitution.
  • Whether the increases in per diems and RATA were validly authorized and should not be disallowed.
  • Whether PICCI is subject to the prohibition under Memorandum Order No. 20.
  • Whether the grant of the benefits is subject to the prohibition under Executive Order No. 24.

• Procedural:
  • The Supreme Court held that the newly submitted documents are admissible. Technical rules of procedure do not strictly apply to administrative cases, and parties should be given the amplest opportunity to fully ventilate their claims and defenses. The submission was made in direct response to the COA's adverse findings in its decision, and there is no showing that the documents are spurious.
• Substantive:
  • PICCI is a GOCC subsidiary of the BSP, organized under the Corporation Code, with the government owning 100% of its capital stock. As such, it is subject to COA audit jurisdiction.
  • Following Singson v. COA, the grant of per diems and RATA to BSP officials serving as ex-officio PICCI directors does not violate the constitutional prohibition against double compensation. RATA is distinct from salary—it is an allowance intended to defray expenses deemed unavoidable in the discharge of office, not payment for services rendered.
  • Bonuses constitute unauthorized additional compensation under Section 8, Article IX-B of the Constitution, as they are a form of compensation for services rendered and are not specifically authorized by law.
  • Memorandum Order No. 20 applies to GOCCs but does not automatically disallow benefits; it requires rationalization or harmonization of compensation with comparable positions in the National Government. The COA erred in issuing a bulk disallowance without determining whether the benefits exceeded those of National Government counterparts.
  • Executive Order No. 24 applies prospectively only. Having taken effect on March 21, 2011, it cannot invalidate benefits granted between January 2010 and February 2011. Laws have no retroactive effect unless expressly provided.
  • The petition is granted, and the COA Decision dated February 16, 2017 and Resolution dated September 27, 2018 are nullified, save for the explicit recognition of petitioners' entitlement to per diems.

• Double Compensation — Prohibited under Section 8, Article IX-B of the 1987 Constitution, which bars additional, double, or indirect compensation unless specifically authorized by law. Applied to distinguish between per diems/RATA (allowances for expenses, allowed) and bonuses (compensation for services, prohibited).
• Ex-officio Positions — Positions held by virtue of another office. Applied to clarify that while officials may not receive additional compensation for services rendered in an ex-officio capacity, they may receive allowances such as RATA intended to defray actual expenses.
• Prospectivity of Laws — Statutes are generally applied prospectively unless the contrary is expressly provided. Applied to hold that Executive Order No. 24, effective March 21, 2011, cannot be applied to benefits granted prior to that date.
• Government-Owned or Controlled Corporation (GOCC) — Defined under the Administrative Code of 1987 as any agency organized as a stock or non-stock corporation vested with functions relating to public needs and owned by the government directly or indirectly through its instrumentalities to the extent of at least 51% of its capital stock. Applied to classify PICCI as a GOCC subsidiary of the BSP.

• "Singson ordains that the grant of per diems and RATA to BSP officials concurrently holding ex officio positions in PICCI does not violate the constitutional proscription against double compensation."
• "Unlike salary which is paid for services rendered, the RATA is a form of allowance intended to defray expenses deemed unavoidable in the discharge of office. Hence, the RATA is paid only to certain officials who, by the nature of their offices, incur representation and transportation expenses."
• "Technical rules of procedure do not strictly apply to administrative cases. The parties therein should be given the amplest opportunity to fully ventilate their claims and defenses, brushing aside technicalities in order to truly ascertain the relevant facts and justly resolve the case on the merits. After all, procedural rules are intended to secure, not override, substantial justice."
• "Statutes are generally applied prospectively unless they expressly allow a retroactive application."

• Singson v. Commission on Audit — Controlling precedent establishing that the grant of per diems and RATA to BSP officials serving as ex-officio PICCI directors does not constitute double compensation; followed and applied to the present case.
• Civil Liberties Union v. Executive Secretary — Cited by COA for the rule that officials serving in ex-officio capacity cannot receive additional compensation; distinguished by the Court because the PICCI Board functions are not merely adjunct to the BSP positions.
• GSIS Family Bank Employees Union v. Villanueva — Cited for the three attributes necessary to classify an entity as a GOCC; followed in determining PICCI's status.
• Felisa Agricultural Corp. v. National Transmission Corp. — Cited for the principle that statutes are generally applied prospectively; followed in ruling that Executive Order No. 24 has no retroactive effect.

• Section 8, Article IX-B of the 1987 Constitution — Prohibits additional, double, or indirect compensation for elective or appointive public officers unless specifically authorized by law; central provision interpreted to distinguish between prohibited bonuses and permissible allowances.
• Section 30 of the Corporation Code of the Philippines — Provides that directors shall not receive compensation except for reasonable per diems unless approved by stockholders; basis for authority to grant per diems to PICCI directors.
• Presidential Decree No. 520 — Charter establishing PICCI with BSP as sole stockholder; basis for determining PICCI's status as a GOCC subsidiary.
• Executive Order No. 24 — Prescribes rules governing compensation of GOCC directors, including Presidential approval for per diem increases; held to apply prospectively only from its effective date of March 21, 2011.
• Memorandum Order No. 20 — Directs suspension of salary increases and new benefits for GOCC senior officers; held applicable but requiring comparison with National Government counterparts rather than automatic disallowance.
• Article 4 of the Civil Code of the Philippines — Provides that laws shall have no retroactive effect unless the contrary is provided; basis for the prospective application of Executive Order No. 24.