EN BANC
G.R. No. 213453, November 29, 2016
PHILIPPINE HEALTH INSURANCE CORPORATION, Petitioner, v. COMMISSION ON AUDIT, MA. GRACIA PULIDO TAN, CHAIRPERSON; AND JANET D. NACION, DIRECTOR IV, Respondents.
D E C I S I O N
PERALTA, J.:
Before the Court is a special civil action for certiorari under Rule 64, in relation to Rule 65 of the 1997 Rules of Civil Procedure, as amended, seeking to reverse and set aside the Decision No. 2013-2081 dated November 20, 2013 and Resolution dated April 4, 2014 of the Commission on Audit (COA), which affirmed the Notice of Disallowance (ND) Philippine Health Insurance Corporation (PHIC) 2008-003 (2004)2 dated February 7, 2008 of the COA Legal Service.
The antecedent facts are as follows:cralawlawlibrary
The instant case stems from petitioner PHIC's grant of several allowances to its officers and employees that were subsequently disallowed by respondent COA. In its PHIC Board Resolution No. 406, s. 20013 dated May 31, 2001, for one, petitioner granted the payment of the Collective Negotiation Agreement Signing Bonus (CNASB) of P5,000.00 each to all qualified employees due to the extension of the then existing CNA between the PHIC management and the PhilHealth Employees Association (PHICEA) for the period of another three (3) years beginning April of 2001. For another, in its PHIC Board Resolution No. 385, s. 20014 effective January 1, 2001, petitioner approved. the payment of the Welfare Support Assistance (WESA) of P4,000.00 each, in lieu of the subsistence and laundry allowances paid to public health workers under Republic Act (R.A.) No. 7305, otherwise known as the Magna Carta of Public Health Workers. Petitioner then resolved to approve the grant of the Labor Management Relations Gratuity (LMRG) by virtue of its PHIC Board Resolution No. 717, s. 20045 dated July 22, 2004, in recognition of harmonious labor-management relations of its employees with the management. Finally, for the services rendered during the period beginning July 1989 until January 1995, petitioner paid the Cost of Living Allowance (COLA) to personnel it had absorbed from the Philippine Medical Care Commission (PMCC) by virtue of Section 516 of R.A. No. 7875, otherwise known as The National Health Insurance Act of 1995.7
On February 7, 2008, however, pursuant to the recommendations of the Supervising Auditor of the PHIC in various Audit Observation Memoranda (AOM),8 respondent Janet D. Nacion, Director IV of the Legal and Adjudication Office - Corporate of the COA, issued ND PHIC 2008-003 (2004), disallowing the payment of the aforementioned allowances granted to PHIC officers and employees in the total amount of P87,699,144.00.9 According to respondent Nacion, the payment of the CNASB was contrary to the doctrine enunciated in Social Security System (SSS) v. COA10 wherein the Court expressly invalidated the payment of the same. With respect to the WESA, Nacion maintained that its payment was made without legal basis in the absence of approval from the Office of the President.11 As for the payment of the LMRG, Nacion found that it was merely a duplication of the Performance Incentive Bonus (PIB) which was granted to employees based on their good performance, increased efficiency and productivity. Lastly, Nacion disallowed the payment of back COLA to PHIC personnel ratiocinating that it should be collected not from petitioner PHIC but from the government agency where the services have been rendered prior to its creation in January 1995.12
Petitioner filed its motion for reconsideration which was, however, denied by the COA Legal Services Sector (LSS) in its Decision No. 2010-02013 issued on May 21, 2010. On appeal, the COA Commission Proper (CP) sustained the disallowance in its Decision No. 2013-208 dated November 20, 2013.14 Thereafter, in a Resolution15 dated April 4, 2014, the COA CP en banc further denied petitioner's motion for reconsideration.
Aggrieved, petitioner filed the instant petition before the Court raising the following issues:chanRoblesvirtualLawlibrary
Petitioner PHIC raises several infirmities attendant in respondent COA's disallowance. First, contrary to respondent's findings, petitioner paid the CNASB to its regular plantilla personnel in 2001 and not in 2004 as evinced by the Certification and payrolls it duly presented.16 During said year, such grant was expressly sanctioned by Budget Circular No. 2000-19 issued by the Department of Budget and Management (DBM) on December 15, 2000 which authorizes the payment of the signing bonus to each entitled rank-and-file personnel. During said year, moreover, the ruling in SSS v. COA17 had not yet been laid down by the Court, which was actually promulgated on July 11, 2002, or more than a year after the payment of the subject CNASB. Thus, on the basis of the established principle of prospective application of laws, the invalidation of the CNASB enunciated in the SSS case cannot be used as legal basis in disallowing the issuance of said bonus.18I.
WHETHER THE COA GRAVELY ABUSED ITS DISCRETION, AMOUNTING TO LACK OR EXCESS OF JURISDICTION, IN ISSUING THE ASSAILED DECISION AND RESOLUTION.chanroblesvirtuallawlibraryII.
WHETHER THE COA DISREGARDED THE FISCAL AUTONOMY GRANTED TO PHIC UNDER SECTION 16 (N), R.A. 7875, AS AMENDED, AS WELL AS EXISTING AND RELEVANT JURISPRUDENCE, IN AFFIRMING THE ND PHIC 2008-003 (2004).chanroblesvirtuallawlibraryIII.
WHETHER PHIC'S PAYMENTS OF THE CNASB, LMRG, WESA, AND BACK COLA IN FAVOR OF ITS OFFICERS AND EMPLOYEES AMOUNTING TO PHP87,699,144.00 WAS PROPER.chanroblesvirtuallawlibraryIV.
GRANTING THAT THE PAYMENTS WERE NOT PROPER, WHETHER THE PHIC OFFICERS AND EMPLOYEES CAN BE REQUIRED TO REFUND THE AMOUNTS RECEIVED.
The burden of proving the validity or legality of the grant of allowance or benefits is with the government agency or entity granting the allowance or benefit, or the employee claiming the same. After the Resident Auditor issues a notice of disallowance, the aggrieved party may appeal the disallowance to the Director within six (6) months from receipt of the decision. At this point, the government agency or employee has the chance to prove the validity of the grant of allowance or benefit. If the appeal is denied, a petition for review may be filed before the Commission on Audit Commission Proper. Finally, the aggrieved party may file a petition for certiorari before this court to assail the decision of the Commission on Audit Commission Proper.As Article IX-A, Section 7 of the 1987 Constitution expressly provides, "unless otherwise provided by this Constitution or by law, any decision, order, or ruling of each Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof." In like manner, Rule 64, Section 2 of the Revised Rules of Civil Procedure also provides that "a judgment or final order or resolution of the Commission on Elections and the Commission on Audit may be brought by the aggrieved party to the Supreme Court on certiorari under Rule 65, except as hereinafter provided." Thus, while findings of administrative agencies, such as the COA herein, are generally respected, when it is shown to have been tainted with unfairness amounting to grave abuse of discretion, the aggrieved party can assail the COA decision in special civil action for certiorari under Rule 64 in relation to Rule 65, an extraordinary remedy, the purpose of which is to keep the public respondent within the bounds of its jurisdiction, relieving the petitioner from the public respondent's arbitrary acts.42
Our laws and procedure have provided the aggrieved party several chances to prove the validity of the grant of the allowance or benefit.41
The PCSO stresses that it is a self-sustaining government instrumentality which generates its own fund to support its operations and does not depend on the national government for its budgetary support. Thus, it enjoys certain latitude to establish and grant allowances and incentives to its officers and employees.The Court, in the same case, further elaborated on the rule that notwithstanding any exemption granted under their charters, the power of GOCCs to fix salaries and allowances must still conform to compensation and position classification standards laid down by applicable law. Citing Philippine Retirement Authority (PRA) v. Buñag,50 We said:chanRoblesvirtualLawlibrary
We do not agree. Sections 6 and 9 of R.A. No. 1169, as amended, cannot be relied upon by the PCSO to grant the COLA. Section 6 merely states, among others, that fifteen percent (15%) of the net receipts from the sale of sweepstakes tickets (whether for sweepstakes races, lotteries, or other similar activities) shall be set aside as contributions to the operating expenses and capital expenditures of the PCSO. Also, Section 9 loosely provides that among the powers and functions of the PCSO Board of Directors is "to fix the salaries and determine the reasonable allowances, bonuses and other incentives of its officers and employees as may be recommended by the General Manager x x x subject to pertinent civil service and compensation laws." The PCSO charter evidently does not grant its Board the unbridled authority to set salaries and allowances of officials and employees. On the contrary, as a government owned and/or controlled corporation (GOCC), it was expressly covered by P.D. No. 985 or "The Budgetary Reform Decree on Compensation and Position Classification of 1976," and its 1978 amendment, P.D. No. 1597 (Further Rationalizing the System of Compensation and Position Classification in the National Government), and mandated to comply with the rules of then Office of Compensation and Position Classification (OCPC) under the DBM.
Even if it is assumed that there is an explicit provision exempting the PCSO from the OCPC rules, the power of the Board to fix the salaries and determine the reasonable allowances, bonuses and other incentives was still subject to the DBM review. In Intia, Jr. v. COA, the Court stressed that the discretion of the Board of Philippine Postal Corporation on the matter of personnel compensation is not absolute as the same must be exercised in accordance with the standard laid down by law, i.e., its compensation system, including the allowances granted by the Board, must strictly conform with that provided for other government agencies under R.A. No. 6758 in relation to the General Appropriations Act. To ensure such compliance, the resolutions of the Board affecting such matters should first be reviewed and approved by the DBM pursuant to Section 6 of P.D. No. 1597.
In accordance with the ruling of this Court in Intia, we agree with petitioner PRA that these provisions should be read together with P.D. No. 985 and P.D. No. 1597, particularly Section 6 of P.D. No. 1597. Thus, notwithstanding exemptions from the authority of the Office of Compensation and Position Classification granted to PRA under its charter, PRA is still required to 1) observe the policies and guidelines issued by the President with respect to position classification, salary rates, levels of allowances, project and other honoraria, overtime rates, and other forms of compensation and fringe benefits and 2) report to the President, through the Budget Commission, on their position classification and compensation plans, policies, rates and other related details following such specifications as may be prescribed by the President.Accordingly, that Section 16(n) of R.A. 7875 granting PHIC's power to fix the compensation of its personnel does not explicitly provide that the same shall be subject to the approval of the OBM or the OP as in Section 19(d) thereof does not necessarily mean that the PHIC has unbridled discretion to issue any and all kinds of allowances, limited only by the provisions of its charter. As clearly expressed in PCSO v. COA, even if it is assumed that there is an explicit provision exempting a GOCC from the rules of the then Office of Compensation and Position Classification (OCPC) under the OBM, the power of its Board to fix the salaries and determine the reasonable allowances, bonuses and other incentives was still subject to the standards laid down by applicable laws: P.O. No. 985,52 its 1978 amendment, P.O. No. 1597,53 the SSL, and at present, R.A. 10149.54 To sustain petitioners' claim that it is the PHIC, and PHIC alone, that will ensure that its compensation system conforms with applicable law will result in an invalid delegation of legislative power, granting the PHIC unlimited authority to unilaterally fix its compensation structure.55 Certainly, such effect could not have been the intent of the legislature.
Despite the power granted to the Board of Directors of PRA to establish and fix a compensation and benefits scheme for its employees, the same is subject to the review of the Department of Budget and Management. x x x x
The rationale for the review authority of the Department of Budget and Management is obvious. Even prior to R.A. No. 6758, the declared policy of the. national government is to provide "equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions." To implement this policy, P.D. No. 985 provided for the standardized compensation of government employees and officials, including those in government-owned and controlled corporations. Subsequently, P.D. No. 1597 was enacted prescribing the duties to be followed by agencies and offices exempt from coverage of the rules and regulations of the Office of Compensation and Position Classification. The intention, therefore, was to provide a compensation standardization scheme such that notwithstanding any exemptions from the coverage of the Office of Compensation and Position Classification, the exempt government entity or office is still required to observe the policies and guidelines issued by the President and to submit a report to the Budget Commission on matters concerning position classification and compensation plans, policies, rates and other related details. This ought to be the interpretation if the avowed policy of compensation standardization in government is to be given full effect. The policy of "equal pay for substantially equal work" will be an empty directive if government entities exempt from the coverage of the Office of Compensation and Position Classification may freely impose any type of salary scheme, benefit or monetary incentive to its employees in any amount, without regard to the compensation plan implemented in the other government agencies or entities. Thus, even prior to the passage of R.A No. 6758, consistent with the salary standardization laws in effect, the compensation and benefits scheme of PRA is subject to the review of the Department of Budget and Management.51
However, in view of the express powers granted to PRA under its charter, the extent of the review authority of the Department of Budget and Management is limited. As stated in Intia, the task of the Department of Budget and Management is simply to review the compensation and benefits plan of the government agency or entity concerned and determine if the same complies with the prescribed policies and guidelines issued in this regard. The role of the Department of Budget and Management is supervisorial in nature, its main duty being to ascertain that the proposed compensation, benefits and other incentives to be given to PRA officials and employees adhere to the policies and guidelines issued in accordance with applicable laws.The rule, therefore, is that for as long as the allowances and benefits granted by petitioner PHIC are in accordance with and authorized by prevailing law, the same shall be upheld by the DBM.57 As Section 29(1), Article VI of the 1987 Constitution provides, "[n]o money shall be paid out of the Treasury except in pursuance of an appropriation made by law." Accordingly, in order to determine the validity of PHIC's issuances, the Court must give due regard to the following Section 12 of the SSL in force at the time of the subject grants:chanRoblesvirtualLawlibrary
Section 12. Consolidation of 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.Thus, the general rule is that all allowances are deemed included in the standardized salary except for the following: (1) representation and transportation allowances; (2) clothing and laundry allowances; (3) subsistence allowance of marine officers and crew on board government vessels and hospital personnel; (4) hazard pay; (5) allowances of foreign service personnel stationed abroad; and (6) such other additional compensation not otherwise specified herein as may be determined by the DBM.
Existing additional compensation of any national government official or employee paid from local funds of a local government unit shall be absorbed into the basic salary of said official or employee and shall be paid by the National Government. (Emphasis supplied)
We cannot subscribe to petitioner Maritime Industry Authority's contention that due to the non-publication of the Department of Budget and Management's National Compensation Circular No. 59, it is considered invalid that results in the non-integration of allowances in the standardized salary.In certain instances, however, the Court had opted to sustain the continued grant of allowances, whether or not integrated into the standardized salaries, but only to those incumbent government employees who were actually receiving said allowances before and as of July 1, 1989.64 This is in consonance with the second sentence of the first paragraph of Section 12 of the SSL which states that: "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." But unfortunately, petitioner failed to prove such exception. To recall, petitioner merely asserted, as basis for its issuance of the COLA, the ineffectivity of DBM CCC 10 as well as its obligation towards the employees it had absorbed from its predecessor, Philippine Medical Care Commission. While petitioner loosely mentioned that the COLA back pay was for services rendered between July 1989 and January 1995 when the payment of the same had been "discontinued" and "unduly withdrawn," it failed to present any sort of proof, documentary or otherwise, to sufficiently establish that those COLA recipients were, indeed, incumbent government employees who were actually receiving the same as of July 1, 1989. In fact, nowhere in its pleadings filed before the Court was it even invoked that the PHIC officers and employees actually suffered a diminution in pay as a result of the consolidation of the COLA back pay into their standardized salary rates. Petitioner cannot, therefore, rely on Our ruling in Philipgine Ports Authority (PPA) Employees Hired After July 1, 1989 v. COA.65 As the Court elucidated in NAPOCOR Employees Consolidated Union (NEU) v. National Power Corporation (NPC):66chanroblesvirtuallawlibrary
x x x x
As held in Philippine International Trading Corporation v. Commission on Audit, the non-publication of the Department of Budget and Management's issuance enumerating allowances that are deemed integrated in the standardized salary will not affect the execution of Section 12 of Republic Act No. 6758. Thus:chanRoblesvirtualLawlibraryThere is no merit in the claim of PITC that R.A. No. 6758, particularly Section 12 thereof is void because DBM-Corporate Compensation Circular No. 10, its implementing rules, was nullified in the case of De Jesus v. Commission on Audit, for lack of publication. The basis of COA in disallowing the grant of SFI was Section 12 of R.A. No. 6758 and not DBM-CCC No. 10. Moreover, the nullity of DBM-CCC No. 10 will not affect the validity of R.A. No. 6758. It is a cardinal rule in statutory construction that statutory provisions control the rules and regulations which may be issued pursuant thereto. Such rules and regulations must be consistent with and must not defeat the purpose of the statute. The validity of R.A. No. 6758 should not be made to depend on the validity of its implementing rules.In Gutierrez v. Department of Budget and Management, this court held that:chanRoblesvirtualLawlibraryx x x x
In this case, the DBM promulgated NCC 59 [and CCC 10]. But, instead of identifying some of the additional exclusions that Section 12 of R.A. 6758 permits it to make, the DBM made a list of what allowances and benefits are deemed integrated into the standardized salary rates. More specifically, NCC 59 identified the following allowances/additional compensation that are deemed integrated:cralawlawlibrary
x x x x
The drawing up of the above list is consistent with Section 12 above. R.A. 6758 did not prohibit the DBM from identifying for the purpose of implementation what fell into the class of "all allowances." With respect to what employees' benefits fell outside the term apart from those that the law specified, the DBM, said this Court in a case, needed to promulgate rules and regulations identifying those excluded benefits. This leads to the inevitable conclusion that until and unless the DBM issues such rules and regulations, the enumerated exclusions in items (1) to (6) remain exclusive. Thus so, not being an enumerated exclusion, COLA is deemed already incorporated in the standardized salary rates of government employees under the general rule of integration.63
The Court has, to be sure, taken stock of its recent ruling in Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 vs. Commission on Audit. Sadly, however, our pronouncement therein is not on all fours applicable owing to the differing factual milieu. There, the Commission on Audit allowed the payment of back cost of living allowance (COLA) and amelioration allowance previously withheld from PPA employees pursuant to the heretofore ineffective DBM CCC No. 10, but limited the back payment only to incumbents as of July 1, 1989 who were already then receiving both allowances. COA considered the COLA and amelioration allowance of PPA employees as "not integrated" within the purview of the second sentence of Section 12 of Rep. Act No. 6758, which, according to COA confines the payment of "not integrated" benefits only to July 1, 1989 incumbents already enjoying the allowances.Here, petitioner's constant invocation of the equal protection clause is misleading. In its petition, petitioner PHIC insists that all its employees should be treated equally, regardless of whether they rendered their service to the PHIC or to its predecessor, PMCC.68 Without delving into the matter of whether said employees were employed before or after July 1, 1989, it then concluded that all employees must be paid their back COLA that was unduly withdrawn from them after the issuance of the DBM CCC 10, and for the entire duration that the circular was in legal limbo.69 It bears stressing, however, that the Court, in PPA, accorded equal treatment to all PPA employees whether they were incumbents as of July 1, 1989, the time of effectivity of the SSL, or employed thereafter. Hence, to successfully invoke the guarantee of equal protection clause under the PPA doctrine, petitioner needed to prove, to the Court's satisfaction, not a discrimination between the current PHIC employees and those absorbed from PMCC, but rather, a discrimination between incumbent PHIC employees as of July 1, 1989 and those employed thereafter, who, as addressed by the second sentence of Section 12 of the SSL, suffered a diminution in pay. But as previously observed, petitioner never even alleged the same. Resultantly, petitioner can neither invoke the guarantee of equal protection of laws nor the principle of non-diminution ofbenefits to sustain its grant of the COLA.
In setting aside COA's ruling, we held in PPA Employees that there was no basis to use the elements of incumbency and prior receipt as standards to discriminate against the petitioners therein. For, DBM-CCC No. 10, upon which the incumbency and prior receipt requirements are contextually predicated, was in legal limbo from July 1, 1989 (effective date of the unpublished DBM-CCC No. 10) to March 16, 1999 (date of effectivity of the heretofore unpublished DBM circular). And being in legal limbo, the benefits otherwise covered by the circular, if properly published, were likewise in legal limbo as they cannot be classified either as effectively integrated or not integrated benefits.
There lies the difference.
Here, the employee welfare allowance was, as above demonstrated, integrated by NPC into the employees' standardized salary rates effective July 1, 1989 pursuant to Rep. Act No. 6758. Unlike in PPA Employees, the element of discrimination between incumbents as of July 1, 1989 and those joining the force thereafter is not obtaining in this case. And while after July 1, 1989, PPA employees can rightfully complain about the discontinuance of payment of COLA and amelioration allowance effected due to the incumbency and prior receipt requirements set forth in DBM-CCC No, 10, NPC cannot do likewise with respect to their welfare allowance since NPC has, for all intents and purposes, never really discontinued the payment thereof.
To stress, herein petitioners failed to establish that they suffered a diminution in pay as a consequence of the consolidation of the employee welfare allowance into their standardized salary. There is thus nothing in this case which can be the subject of a back pay since the amount corresponding to the employee welfare allowance was never in the first place withheld from the petitioners.67
Section 22. Subsistence Allowance. - Public health workers who are required to render service within the premises of hospitals, sanitaria, health infirmaries, main health centers, rural health units and barangay health stations, or clinics, and other health-related establishments in order to make their services available at any and all times, shall be entitled to full subsistence allowance of three (3) meals which may be computed in accordance with prevailing circumstances as determined by the Secretary of Health in consultation with the Management-Health Worker's Consultative Councils, as established under Section 33 of this Act: Provided, That representation and travel allowance shall be given to rural health physicians as enjoyed by municipal agriculturists, municipal planning and development officers and budget officers.Moreover, the Magna Carta's Revised Implementing Rules and Regulations (IRR) issued by the Secretary of Health in November 1999 similarly provide:chanRoblesvirtualLawlibrary
x x x x
SEC. 24. Laundry Allowance. - All public health workers who are required to wear uniforms regularly shall be entitled to laundry allowance equivalent to one hundred twenty-five pesos (P125.00) per month: Provided, That this rate shall be reviewed periodically and increased accordingly by the Secretary of Health in consultation with the appropriate government agencies concerned taking into account existing laws and prevailing practices. (Emphases ours)
7.2. Subsistence AllowanceIt may be observed, however, that the foregoing excerpts do not prescribe a specific form or process by which the Secretary of Health must compute the rates of the subsistence and laundry allowances. The law simply states that the Health Secretary shall compute said rates "in accordance with prevailing circumstances" and "in consultation with the Management Health Workers Consultative Council." But nowhere in the law was it required that the Secretary of Health, in determining the allowances due to PHWs, must be acting alone. Neither has respondent COA presented any provision of law, rule, or other similar authority to that effect.
7.2.1. Eligibility for Subsistence Allowancea. All public health workers covered under RA 7305 are eligible to receive full subsistence allowance as long as they render actual duty.
b. Public Health Workers shall be entitled to full Subsistence Allowance of three (3) meals which may be computed in accordance with prevailing circumstances as determined by the Secretary of Health in consultation with the Management Health Workers Consultative Council, as established under Section 33 of the Act.c. Those public health workers who are out of station shall be entitled to per diems in place of Subsistence Allowance. Subsistence Allowance may also be commuted.
7.2.2. Basis for Granting Subsistence AllowancePublic health workers shall be granted subsistence allowance based on the number of meals/days included in the duration when they rendered actual work including their regular duties, overtime work or on-call duty as defined in this revised IRR.Public health workers who are on the following official situations are not entitled to collect/receive this benefit:a. Those on vacation/sick leave and special privilege leave with or without pay;b. Those on terminal leave and commutation;c. Those on official travel and are receiving per diem regardless of the amount; andd. Those on maternity/paternity leave.
7.2.3. Rates of Subsistence Allowancea. Subsistence allowance shall be implemented at not less than PhP50.00 per day or PhP1,500.00 per month as certified by head of agency.b. Non-health agency workers detailed in health and health related institutions/establishments are entitled to subsistence allowance and shall be funded by the agency where service is rendered.c. Subsistence allowance of public health workers on full-time and part-time detail in other agency shall be paid by the agency where service is rendered.d. Part-time public health workers/consultants are entitled to one-half (1/2) of the prescribed rates received by full-time public health workers.
7.3. Laundry Allowance
7.3.1. Eligibility for Laundry AllowanceAll public health workers covered under RA 7305 are eligible to receive laundry allowance if they are required to wear uniforms regularly.
7.3.2. Rate of Laundry AllowanceThe laundry allowance shall be P150.00 per month. This shall be paid on a monthly basis regardless of the actual work rendered by a public health worker.
Recipients or payees need not refund disallowed benefits or allowances when it was received in good faith and there is no finding of bad faith or malice. On the other hand, officers who participated in the approval of such disallowed amount are required to refund only those received if they are found to be in bad faith or grossly negligent amounting to bad faith. Public officials who are directly responsible for, or participated in making the illegal expenditures, as well as those who actually received the amounts therefrom shall be solidarity liable for their reimbursement. The receipt or non-receipt of illegally disbursed funds is immaterial to the solidary liability of government officials directly responsible.As previously discussed, PHIC's grant of the WESA was aptly sanctioned not only by Section 12 of the SSL which explicitly identifies laundry and subsistence allowance as excluded from the integrated salary, but also by statutory authority, particularly, Section 22 and 24 of the Magna Carta. In view of such fact, the PHIC officers cannot be found to have approved the issuance of the same in bad faith or in gross negligence amounting to bad faith for it was well within the parameters set by law. Thus, the WESA need not be refunded.
x x x x It is unfair to penalize public officials based on overly stretched and strained interpretations of rules which were not that readily capable of being understood at the time such functionaries acted in good faith. If there is any ambiguity, which is actually clarified years later, then it should only be applied prospectively. A contrary rule would be counterproductive. It could result in paralysis, or lack of innovative ideas getting tried. In addition, it could dissuade others from joining the government. When the government service becomes unattractive, it could only have adverse consequences for society.88Thus, the fact that the PHIC officers had an unclear knowledge of a ruling by this Court categorically prohibiting the particular disbursement herein is a badge of good faith,89 especially in light of the COA's failure to overturn the presumption of regularity in the performance of their official duties.
Endnotes:
1 Signed by Commissioner Ma. Gracia M. Pulido Tan, Chairperson, with Commissioners Heidi L. Mendoza and Rowena V. Guanzon, concurring; rollo, pp. 47-56.
2ld. at 119-123.
3Id. at 96.
4Id. at 109-111.
5Id. at 112-114.
6 Section 51 of R.A. No. 7875 provides:cralawlawlibrary
SECTION 51. Merger. - Within sixty (60) days from the promulgation of the implementing rules and regulations, all functions and assets ofthe Philippine Medical Care Commission shall be merged with those of the Corporation (PHILHEALTH) without need of conveyance, transfer or assignment. The PMCC shall thereafter cease to exist.
The liabilities of the PMCC shall be treated in accordance with existing laws and pertinent rules and regulations.
7Rollo, p. 7.
8Id. at 47.
9Id. at 119.
10 433 Phil. 946 (2002).
11Id. at 120.
12Id.
13Id. at 124.
14Id. at 47-56.
15Id. at 57.
16Id. at 11.
17Supra note 10.
18Id. at 14.
19Id. at 16.
20Id. at 17
21Id. at 18-19.
22 355 Phil. 584 (1998).
23Rollo, p. 21.
24Id. at 23.
25Id. at 25.
26Id. at 169.
27Id. at 175-176.
28 Section 16 (n) of R.A. No. 7875 provides:cralawlawlibrary
Section 16. Powers and Functions - The Corporation shall have the following powers and functions:cralawlawlibrary
x x x x
n) to organize its office, fix the compensation of and appoint personnel as may be deemed necessary and upon the recommendation ofthe president of the Corporation; x x x
29 G.R. No. 98395, October 28, 1994, 237 SCRA 809, 816.
30Rollo, pp. 166 and 184.
31Supra note 10.
32Id. at 186.
33Id. at 187.
34Id. at 180.
35Id. at 188.
36Id. at 183-184.
37Francisco, Jr. v. The House of Representatives, 460 Phil. 830, 893 (2003).
38Rollo, p. 307.
39Maritime Industry Authority v. COA, G.R. No. 185812, January 13, 2015, 745 SCRA 300; Manila International Airport Authority v. COA, 681 Phil. 644 (2012).
40Supra.
41Id. at 340. (Emphasis ours)
42Id. at 312-313.
43 366 Phil. 273 (1999).
44Rollo, pp. 312-313.
45Id. at 318-319.
46 SEC. 26. Financial Management - The use, disposition, investment, disbursement, administration and management of the National Health Insurance Fund, including any subsidy, grant or donation received for program operations shall be governed by resolution of the Board of Directors of the Corporation subject to the following limitations:cralawlawlibrary
x x x x
b) The Corporation is authorized to charge the various funds under its control for the costs of administering the Program. Such costs may include administration, monitoring, marketing and promotion, research and development, audit and evaluation, information services, and other necessary activities for the effective management of the Program. The total annual costs for these shall not exceed twelve percent (12%) of the total contributions, including government contributions to the Program and not more than three (3%) of the investment earnings collected during the immediately preceding year.
47Rollo, p. 320.
48Id. at 322.
49 G.R. No. 216776, April 19, 2016. (Emphasis ours)
50 444 Phil. 859 (2003).
51Philippine Retirement Authority (PRA) v. Buñag, supra, at 869-870. (Emphases ours)
52 Entitled "The Budgetary Reform Decree on Compensation and Position Classification of 1976."
53 Entitled "Further Rationalizing the System of Compensation and Position Classification in the National Government."
54 Entitled "GOCC Governance Act of 2011."
55Intia, Jr. v. COA, supra note 43, at 291.
56Supra note 50, at 869-870.
57Yap v. Commission on Audit, 633 Phil. 174, 193-194 (2010).
58Maritime Industry Authority v. Commission on Audit, supra note 39, at 321.
59Id. at 322.
60Id. at 342.
61Philippine Charity Sweepstakes of Office (PCSO) v. COA, supra note 49; Gutierrez, et al. v. Dept. of Budget and Mgt., et al., 630 Phil. 1, 14 (2010); Maynilad Water Supervisors Association v. Maynilad Water Services, Inc., G.R. No. 198935, November 27, 2013, 711 SCRA 110, 119; Land Bank of the Philippines v. Naval, G.R. No. 195687, April 14, 2014.
62Supra note 39.
63Maritime Industry Authority v. COA, supra note 39, at 323-326. (Emphases ours)
64PCSO v. COA, supra note 49.
65 506 Phil. 382 (2005).
66 519 Phil. 372 (2006).
67NAPOCOR Employees Consolidated Union v. National Power Corporation, supra, at 388-389. (Emphases ours)
68Rollo, p. 25.
69Id. at 23.
70Id. at 323.
71Id. at 166 and 184.
72Id. at 186.
73Id. at 116.
74Id. at 117.
75PRA v. Buñag, supra note 50, at 870.
76 Section 12 of R.A. No. 6758 provides:cralawlawlibrary
Section 12. Consolidation of 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. x x x x (Emphases ours)
77Rollo, pp. 109-111.
78Francisco v. Mallen, Jr., 645 Phil. 369, 374 (2010).
79Id. at 376.
80Kukan International Corporation v. Honorable Reyes, 646 Phil. 221, 234 (2010).
81Garcia v. Social Security Commission Legal and Collection, Social Security System, 565 Phil. 193, 214 (2007).
82Supra note 49.
83Rollo, p. 132.
84Maritime Industry Authority v. COA, supra note 39, at 326.
85Zamboanga City Water District (ZCWD) v. COA, G.R. No. 213472, January 26, 2016.
86Id.
87 G.R. No. 210903, October 11, 2016.
88Id.
89Id.
90Id.
91Rollo, p. 112.
92 370 Phil. 793 (1999).
93 461 Phil. 737 (2003).
94PCSO v. COA, supra note 49.
95Rollo, pp. 119-123.