EN BANC
[G.R. No. 132593. June 25, 1999]
PHILIPPINE INTERNATIONAL TRADING CORPORATION, petitioner, vs. COMMISSION ON AUDIT, respondent.
D E C I S I O N
GONZAGA-REYES, J.:
This is a petition for certiorari
under Rule 64 of the 1997 Rules of Civil Procedure to annul Decision No. 2447
dated July 27, 1992 of the Commission on Audit (COA) denying Philippine International
Trading Corporation’s (PITC) appeal from the disallowances made by the resident
COA auditor on PITC’s car plan benefits; and Decision No. 98-048 dated January
27, 1998 of the COA denying PITC’s motion for reconsideration.
The following facts are undisputed:
The PITC is a government-owned and
controlled corporation created under Presidential Decree (PD) No. 252 on July
21, 1973[1], primarily for the purpose of promoting and
developing Philippine trade in pursuance of national economic development. On October 19, 1988, the PITC Board of
Directors approved a Car Plan Program for qualified PITC officers.[2] Under such car plan program, an eligible officer is
entitled to purchase a vehicle, fifty percent (50%) of the value of which shall
be shouldered by PITC while the remaining fifty percent (50%) will be
shouldered by the officer through salary deduction over a period of five (5)
years. Maximum value of the vehicle to
be purchased ranges from Two Hundred Thousand Pesos (P200,000.00) to Three
Hundred and Fifty Thousand Pesos (P350,000.00), depending on the position of
the officer in the corporation. In
addition, PITC will reimburse the officer concerned fifty percent (50%) of the
annual car registration, insurance premiums and costs of registration of the
chattel mortgage over the car for a period of five (5) years from the date the
vehicle was purchased. The terms and
conditions of the car plan are embodied in a `Car Loan Agreement’.[3] Per PITC’s car plan guidelines, the purpose of the
plan is to provide financial assistance to qualified employees in purchasing
their own transportation facilities in the performance of their work, for
representation, and personal use.[4] The plan is envisioned to facilitate greater mobility
during official trips especially within Metro Manila or the employee’s
principal place of assignment, without having to rely on PITC vehicles, taxis
or cars for hire.[5]
On July 1, 1989, Republic Act No.
6758 (RA 6758), entitled “An Act Prescribing a Revised Compensation and
Position Classification System in the Government and For Other Purposes”, took
effect. Section 12 of said law provides
for the consolidation of allowances and additional compensation into
standardized salary rates save for certain additional compensation such as
representation and transportation allowances which were exempted from
consolidation into the standardized rate.
Said section likewise provides that other additional compensation being
received by incumbents as of July 1, 1989 not integrated into the standardized
salary rates shall continue to be authorized.
Section 12, RA 6758, reads –
“SEC. 12. Consolidation of All Allowances and Compensation. – All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.”
To implement RA 6758, the
Department of Budget and Management (DBM) issued Corporate Compensation
Circular No. 10 (DBM-CCC No. 10).
Paragraph 5.6 of DBM-CCC No. 10 discontinued effective November 1, 1989,
all allowances and fringe benefits granted on top of basic salary, not
otherwise enumerated under paragraphs 5.4 and 5.5 thereof.
Paragraph 5.6 of DBM-CCC No. 10
provides:
“5.6 Payment of other allowances/fringe benefits and all other
forms of compensation granted on top of basic salary, whether in cash or in
kind, not mentioned in Sub-paragraphs 5.4 and 5.5[6] above shall be discontinued effective November 1,
1989. Payment made for such
allowance/fringe benefits after said date shall be considered as illegal
disbursement of public funds.”
On post audit, the
payment/reimbursement of the above-mentioned expenses (50% of the yearly car
registration and insurance premiums and 50% of the costs of registration of the
chattel mortgage over the car) made after November 1, 1989 was disallowed by
the resident COA auditor. The
disallowance was made on the ground that the subject car plan benefits were not
one of the fringe benefits or form of compensation allowed to be continued
after said date under the aforequoted paragraph 5.6 of DBM-CCC No. 10[7], in relation to paragraphs 5.4 and 5.5 thereof.
PITC, on its behalf, and that of
the affected PITC officials, appealed the decision of the resident COA auditor
to the COA. On July 27, 1992, COA
denied PITC’s appeal and affirmed the disallowance of the said car plan
expenses in the assailed Decision No. 2447 dated July 27, 1992. Relevant portions of the decision read thus:
“Upon circumspect evaluation thereof, this Commission finds the instant appeal to be devoid of merit. It should be noted that the reimbursement/payment of expenses in question is based on the Car Plan benefit granted under Board Resolution No. 10-88-03 adopted by the PITC Board of Directors on October 19, 1988. The Car Plan is undeniably a fringe benefit as appearing in PITC’s “Compensation Policy under the heading “3. Other Fringe Benefits”, particularly Item No. 3.13 thereof. Inasmuch as PITC is a government-owned and/or controlled corporation, the grant of the Car Plan (being a fringe benefit) should be governed by the provisions of Corporate Compensation Circular No. 10, implementing RA 6758. Under sub-paragraph 5.6 of said Circular, it explicitly provides:
x x x x x x x x x.
Since the Car Plan benefit is not one of those fringe benefits or
other forms of compensation mentioned in Sub-paragraphs 5.4 and 5.5 of CCC No.
10, consequently the reimbursement of the 50% share of PITC in the yearly
registration and insurance premium of the cars purchased under said Car Plan
benefit should not be allowed. xxx.”[8]
PITC’s motion for reconsideration
was denied by the COA in its Resolution dated January 27, 1998.[9]
Hence, the instant petition on the
following grounds:
“1. That the legislature did not intend to revoke existing benefits being received by incumbent government employees as of July 1, 1989 (including subject car plan benefits) when RA 6758 was passed;
2. That the Car Loan Agreements signed between PITC and its officers pursuant to PITC’s Car Plan Program, including the Car Loan Agreements, duly executed prior to the effectivity of RA 6758, constitute the law between the parties and as such, protected by Section 10, Article III of the 1987 Philippine Constitution which prohibits the impairment of contracts; and
3. Finally, that the
provisions of PD 985 do not apply to PITC inasmuch as under its Revised
Charter, PD 1071, as amended by E.O. 756 and E.O. 1067, PITC is not only
expressly exempted from OCPC rules and regulations but its Board of Directors
was expressly authorized to adopt compensation policies and other related benefits
to its officers/employees without need for further approval thereof by any
government office, agency or authority.[10]”
The petition is meritorious.
First of all, we must mention that
this Court has confirmed in Philippine Ports Authority vs. Commission on Audit[11] the legislative
intent to protect incumbents who are receiving salaries and/or allowances over
and above those authorized by RA 6758 to continue to receive the same even
after RA 6758 took effect. In reserving
the benefit to incumbents, the legislature has manifested its intent to
gradually phase out this privilege without upsetting the policy of
non-diminution of pay and consistent with the rule that laws should only be
applied prospectively in the spirit of fairness and justice.[12] Addressing the issue as to whether the
petitioners-officials may still receive their representation and transportation
allowance (RATA) at the higher rates provided by Letter of Implementation (LOI)
No. 97 in light of Section 12, RA 6758, this Court said:
“Now, under the second sentence of Section 12, first paragraph, the RATA enjoyed by these PPA officials shall continue to be authorized only if they are “being received by incumbents only as of July 1, 1989.” RA 6758 has therefore, to this extent, amended LOI No. 97. By limiting the benefit of the RATA granted by LOI No. 97 to incumbents, Congress has manifested its intent to gradually phase out this privilege without upsetting its policy of non-diminution of pay.”
“The legislature has similarly adhered to this policy of non-diminution of pay when it provided for the transition allowance under Section 17 of RA 6758 which reads:
SEC. 17. Salaries of Incumbents. –Incumbents of position presently receiving salaries and additional compensation/fringe benefits including those absorbed from local government units and other emoluments, the aggregate of which exceeds the standardized salary rate as herein prescribed, shall continue to receive such excess compensation, which shall be referred to as transition allowance. The transition allowance shall be reduced by the amount of salary adjustment that the incumbent shall receive in the future.”
While Section 12 refers to allowances that are not integrated into
the standardized salaries whereas Section 17 refers to salaries and additional
compensation or fringe benefits, both sections are intended to protect incumbents
who are receiving said salaries and/or allowances at the time RA
6758 took effect.”[13] (Emphasis supplied.)
Based on the foregoing pronouncement,
petitioner correctly pointed out that there was no intention on the part of the
legislature to revoke existing benefits being enjoyed by incumbents of
government positions at the time of the passage of RA 6758 by virtue of
Sections 12 and 17 thereof. There is no
dispute that the PITC officials who availed of the subject car plan benefits
were incumbents of their positions as of July 1, 1989. Thus, it was legal and proper for them to
continue enjoying said benefits within the five year period from date of
purchase of the vehicle allowed by their Car Loan Agreements with PITC.
Further, we see the rationale for
the corporation’s fifty percent (50%) participation and contribution to the
subject expenses. As to the insurance
premium, PITC, at least, up to the extent of 50% of the value of the vehicle,
has an insurable interest in said vehicle in case of loss or damage
thereto. As to the costs of
registration of the vehicle in the employee’s name and of the chattel mortgage
in favor of PITC, this is to secure PITC of the repayment of the `Car Loan
Agreement’ and the fulfillment of the other obligations contained therein by
the employee.
Still further, the vehicle being
utilized by the officer is actually being used for corporate purposes because the
officer concerned is no longer entitled to utilize company-owned vehicles for
official business once he/she has availed of a car plan. Neither is said officer allowed to reimburse
the costs of other land transportation used within his principal place of
assignment (i.e. Metro Manila) as the vehicle is presumed to be his official
vehicle.[14] In the event that the employee resigns, retires or is
separated from the company without cause prior to the completion of the
60-month car plan, the employee shall be given the privilege to buy the car
provided he pays the remaining installments of the loan and the amount
equivalent to that portion of the company’s contribution corresponding to the
unexpired period of the car plan. On
the other hand, if the employee has been separated from the company for cause,
the company has the other option aside from the foregoing to repossess the car
from the employee, in which case, the company shall pay back to the employee
all amortizations already made by the employee to the company, interest free.[15]
Secondly, COA relied on DBM-CCC
No. 10[16] as basis for the disallowance of the subject car plan
benefits. DBM-CCC No. 10 which was
issued by the DBM pursuant to Section 23[17] of RA 6758 mandating the said agency to issue the
necessary guidelines to implement RA 6758 has been declared by this Court in De
Jesus, et al. vs. Commission on Audit, et al.[18] as of no force and effect due to the absence
of publication thereof in the Official Gazette or in a newspaper of general
circulation. Salient portions of said
decision read:
“On the need for publication of subject DBM-CCC No. 10, we rule in
the affirmative. Following the doctrine
enunciated in Tañada[19], publication in the Official Gazette or in a
newspaper of general circulation in the Philippines is required since DBM-CCC
No. 10 is in the nature of an administrative circular the purpose of which is
to enforce or implement an existing law.
Stated differently, to be effective and enforceable, DBM-CCC No. 10 must
go through the requisite publication in the Official Gazette or in a newspaper
of general circulation in the Philippines.
In the present case under scrutiny, it is decisively clear that
DBM-CCC No. 10, which completely disallows payment of allowances and other
additional compensation to government officials and employees, starting
November 1, 1989, is not a mere interpretative or internal regulation. It is something more than that. And why not, when it tends to deprive
government workers of their allowances and additional compensation sorely
needed to keep body and soul together.
At the very least, before the said circular under attack may be
permitted to substantially reduce their income, the government officials and
employees concerned should be apprised and alerted by the publication of said
circular in the Official Gazette or in a newspaper of general circulation in
the Philippines – to the end that they be given amplest opportunity to voice
out whatever opposition they may have, and to ventilate their stance on the
matter. This approach is more in
keeping with democratic precepts and rudiments of fairness and transparency.”[20]
In the case at bar, the
disallowance of the subject car plan benefits would hamper the officials in the
performance of their functions to promote and develop trade which requires
mobility in the performance of official business. Indeed, the car plan benefits are supportive of the
implementation of the objectives and mission of the agency relative to the
nature of its operation and responsive to the exigencies of the service.
It has come to our knowledge that
DBM-CCC No. 10 has been re-issued in its entirety and submitted for publication
in the Official Gazette per letter to the National Printing Office dated March
9, 1999. Would the subsequent
publication thereof cure the defect and retroact to the time that the
above-mentioned items were disallowed in audit?
The answer is in the negative,
precisely, for the reason that publication is required as a condition precedent
to the effectivity of a law to inform the public of the contents of the law or
rules and regulations before their rights and interests are affected by the
same. From the time the COA disallowed
the expenses in audit up to the filing of herein petition the subject circular
remained in legal limbo due to its non-publication. As was stated in Tañada vs. Tuvera[21], “prior publication of laws before they become
effective cannot be dispensed with, for the reason that such omission would
offend due process insofar as it would deny the public knowledge of the laws
that are supposed to govern it."
In view of the nullity of DBM-CCC
No. 10 relied upon by the COA as basis for the disallowance of the subject car
plan benefits, we deem it unnecessary to discuss the second issue raised in the
instant petition.
We deem it necessary though to
resolve the third issue as to whether PITC is exempt from RA 985[22] as subsequently amended by RA 6758. According to petitioner, PITC’s Revised
Charter, PD 1071 dated January 25, 1977, as amended by EO 756 dated December
29, 1981, and further amended by EO 1067 dated November 25, 1985, expressly
exempted PITC from the Office of the Compensation and Position Classification
(OCPC) rules and regulations.
Petitioner cites Section 28 of P.D.1071[23]; Section 6 of EO 756[24]; and Section 3 of EO 1067.[25]
According to the COA in its
Decision No. 98-048 dated January 27, 1998, the exemption granted to the PITC
has been repealed and revoked by the repealing provisions of RA 6758,
particularly Section 16 thereof which provides:
“Section 16. Repeal of Special Salary Laws and Regulations. - All laws, decrees, executive orders, corporate charters, and other issuances or parts thereof, that exempt agencies from the coverage of the System, or that authorize and fix position classifications, salaries, pay rates or allowances of specified positions, or groups of officials, and employees or of agencies, which are inconsistent with the System, including the proviso under Section 2 and Section 16 of PD No. 985 are hereby repealed.”
To this, petitioner argues that RA
6758 which is a law of general application cannot repeal provisions of the
Revised Charter of PITC and its amendatory laws expressly exempting PITC from
OCPC coverage being special laws. Our
rules on statutory construction provide that a special law cannot be repealed,
amended or altered by a subsequent general law by mere implication[26]; that a statute, general in character as to its terms
and application, is not to be construed as repealing a special or specific
enactment, unless the legislative purpose to do so is manifested[27]; that if repeal of particular or specific law or laws
is intended, the proper step is to so express it.[28]
In the case at bar, the repeal by
Section 16 of RA 6758 of “all corporate charters that exempt agencies from the
coverage of the System” was clear and expressed necessarily to achieve the
purposes for which the law was enacted, that is, the standardization of
salaries of all employees in government owned and/or controlled corporations to
achieve “equal pay for substantially equal work”. Henceforth, PITC should now be considered as covered by laws
prescribing a compensation and position classification system in the government
including RA 6758. This is without
prejudice, however, as discussed above, to the non-diminution of pay of
incumbents as of July 1, 1989 as provided in Sections 12 and 17 of said law.
WHEREFORE, the Petition is hereby GRANTED, the assailed
Decisions of the Commission on Audit are SET ASIDE.
SO ORDERED.
Davide, Jr., C.J., Romero,
Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Quisumbing, Purisima, Pardo,
and Ynares-Santiago, JJ., concur.
Panganiban, and Buena, JJ., on
leave.
[1] Amended by PD 1071 on January 19, 1977, later
by Executive Order (EO) No. 756 on December 29, 1981, and EO No. 1067 on
November 25, 1985.
[2] Resolution No. 10-88-03.
[3] Rollo, p. 53.
[4] Ibid., p. 43.
[5] Id.
[6] 5.4 The rates
of the following allowances/fringe benefits which are not integrated into the
basic salary and which are allowed to be continued after June 30, 1989 shall be
subject to the condition that the grant of such benefits is covered by
statutory authority:
5.4.1 Representation and Transportation Allowances (RATA) of incumbent of the position authorized to receive the same at the highest amount legally authorized as of June 30, 1989 for the level of his position within the particular GOCC/GFI;
5.4.2 Uniform and Clothing Allowance at a rate as previously authorized;
5.4.3 Hazard pay as authorized by law;
5.4.4 Honoraria/additional compensation for employees on detail with special projects or inter-agency undertakings;
5.4.5 Honoraria for services rendered by researchers, experts and specialists who are of acknowledged authorities in their fields of specialization;
5.4.6 Honoraria for lecturers and resource persons/speakers;
5.4.7 Overtime pay in accordance to Memorandum Order No. 228;
5.4.8 Clothing/laundry allowances and subsistence allowance of marine officers and crew on board GOCCs/GFIs owned vessels and used in their operations, and of hospital personnel who attend directly to patients and who by nature of their duties are required to wear uniforms;
5.4.9 Quarters Allowance of officials and employees who are presently entitled to the same;
5.4.10 Overseas, Living Quarters and other allowances presently authorized for personnel stationed abroad;
5.4.11 Night Differential of personnel on night duty;
5.4.12 Per Diems of members of the governing Boards of GOCCs/GFIs at the rate as prescribed in their respective Charters;
5.4.13 Flying Pay of personnel undertaking serial flights;
5.4.14 Per Diems/Allowances of Chairman and Members/Staff of collegial bodies and Committee; and,
5.4.15 Per Diems/Allowances of officials and employees on official foreign and local travel outside of their official station.
5.5 Other allowances/fringe benefits not likewise integrated into the basic salary and allowed to be continued only for incumbents as of June 30, 1989 subject to the condition that the grant of same is with appropriate authorization either from the DBM, Office of the President or legislative issuances are as follows:
5.5.1 Rice Subsidy
5.5.2 Sugar Subsidy
5.5.3 Death Benefits other than those granted by the GSIS;
5.5.4 Medical/dental/optical allowances/benefits;
5.5.5 Children’s allowance;
5.5.6 Special Duty Pay/Allowance;
5.5.7 Meal Subsidy;
5.5.8 Longevity Pay; and
5.5.9 Teller’s
Allowance
[7] Rollo, p. 31.
[8] Id., pp. 30-31.
[9] Id., p. 23.
[10] Id., p.8.
[11] 214 SCRA 653.
[12] Erectors, Inc. vs. National Labor
Relations Commission, 256 SCRA 629.
[13] See note 11, p. 660.
[14] Rollo, p. 39.
[15] Ibid., pp. 49-50.
[16] Rules and Regulations for the Implementation
of the Revised Compensation and Position Classification System Prescribed Under
R.A. No. 6758 for Government Owned And/Or Controlled Corporations (GOCC’s) and
Government Financial Institutions (GFIs).
[17] Sec. 23. Effectivity. – This Act shall take
effect July 1, 1989. The DBM shall
within sixty (60) days after its approval allocate all positions in their
appropriate position titles and salary grades and prepare and issue the
necessary guidelines to implement the same.
[18] G.R. No. 109023, August 12, 1998.
[19] Referring to Tanada vs. Tuvera, 146
SCRA 453.
[20] Supra, at pp. 7-8.
[21] supra.
[22] “A Decree Revising The Position Classification
and Compensation Systems In The National Government, And Integrating The Same”
issued on August 22, 1976, to standardize the compensation of government
officials and employees, including those in government-owned and/or controlled
corporations.
[23] Section 28.
Personnel Recruitment – The corporation shall adopt a special
recruitment and employment scheme that is responsive to the commercial nature
of its operations. Further, the
corporation is hereby authorized to extend permanent appointment to, or
contract the services of, trained and experienced persons, even without civil
eligibility, for its manpower building as a competing trading firm. In view of the pioneering nature of its
operation, the Corporation shall continue to be exempt from the OCPC rules and
regulations.
[24] Section 6.
Exemption from OCPC – In recognition of the special nature of its
operations, the Corporation shall continue to be exempt from the application of
the rules and regulations of the Office of the Compensation and Position
Classification or any other similar agencies that may be established hereafter
as provided under Presidential Decree 1071.
x x x.
[25] Section 3.
Compensation Policies. – The compensation policies including allowances,
merit increases and other employee benefits for all officers and employees
adopted by the Board of Directors are hereby approved in accordance with P.D.
Nos. 1177 and 1597. Any future changes
approved by the Board that may be deemed necessary shall not require any
referral to or approval of any other authority, agency or office.
[26] Laguna Lake Development Authority vs. Court
of Appeals, 251 SCRA 42.
[27] Commissioner of Internal Revenue vs.
Court of Appeals, 207 SCRA 487.
[28] Agujetas vs. Court of Appeals, 258
SCRA 17.