EN BANC
G.R. No. 252198, April 27, 2021
SECURITIES AND EXCHANGE COMMISSION, Petitioner, v. COMMISSION ON AUDIT, Respondent.
D E C I S I O N
LAZARO-JAVIER, J.:
1) | Decision No. 2018-0102 dated January 17, 2018 insofar as it disallowed the Securities and Exchange Commission's (SEC's) payment of contribution to the provident fund for its officers and employees, using its retained earnings in the amount of P19,723,444.66, and holding the approving, certifying and authorizing officers solidarily liable to return the entire amount; and |
2) | Resolution No. 2020-1803 dated January 29, 2020 which denied petitioner's motion for reconsideration. |
SEC. 7. Reorganization. – x x xx x x
7.2. All positions of the Commission shall be governed by a compensation and position classification systems and qualification standards approved by the Commission based on a comprehensive job analysis and audit of actual duties and responsibilities. The compensation plan shall be comparable with the prevailing compensation plan in the Bangko Sentral ng Pilipinas and other government financial institutions and shall be subject to periodic review by the Commission no more than once every two (2) years without prejudice to yearly merit reviews or increases based on productivity and efficiency. The Commission shall, therefore, be exempt from laws, rules, and regulations on compensation, position classification and qualification standards. The Commission shall, however, endeavor to make its system conform as closely as possible with the principles under the Compensation and Position Classification Act of 1989 (Republic Act No. 6758, as amended). (Emphasis supplied)
x x x
SEC. 75. Partial Use Of Income. - To carry out the purposes of this Code, the Commission is hereby authorized, in addition to its annual budget, to retain and utilize an amount equal to one hundred million pesos (P100,000,000.00) from its income.
The use of such additional amount shall be subject to the auditing requirements, standards and procedures under existing laws.
RESOLVED, To APPROVE the 15% of the basic salary of the members(employees) as the Commission's counterpart contribution to the SEC Provident Fund which shall be taken from the SEC's retained income under Section 75 of the SRC in addition to the service fees received by the Commission (e.g. GSIS service fees, LRF service fees, rebates from publication and rebates from building insurance premiums, etc.) subject to the DBM's approval and the agreement by the employees on the 3% reduction from their salary as their personal contribution to the fund. (Emphases supplied)
Under Section 75 of R.A. No. 8799, the Securities and Exchange Commission is authorized, in addition to its annual budget, to retain and utilize an amount equal to One Hundred Million Pesos (P100,000,000) from the income to carry out the purposes of the Securities Regulation Code. Since the retained income of the Commission is an "off budget" account, meaning we do not release an allotment for the purpose, then the release of NCA is not necessary.
The utilization of the retained income is left to the discretion of the Commission subject to the usual accounting and auditing rules and regulations. (Emphasis supplied)
RESOLVED, To APPROVE the annual allocation from the SEC Retention Income of the amount equivalent to fifteen percent (15%) of the annual payroll of the SEC employees computed monthly starting CY 2004 as the Commission's 15% counterpart contribution to the SEC Provident Fund.
RESOLVED FURTHER, That the P20.7 Million Counterpart contribution of the Commission for 2004 shall be used as seed money of the Fund and the employee-members of the Fund shall be deducted of their 3% counterpart contribution starting January 2005.
| |||
No. | Date | Amount | Particulars |
360370 | 01-26-10 | P1,652,025.45 | For the month of January 2010 |
360415 | 02-22-10 | 1,409,170.95 | For the month of February 2010 |
360420 | 02-24-10 | 243,925.95 | For the month of February 2010 |
360459 | 03-16-10 | 4,242.33 | For the month of January 2010 |
360465 | 03-19-10 | 1,651,763.83 | For the month of March 2010 |
360502 | 04-14-10 | 7,975.68 | For the month of February 2010 |
360507 | 04-22-10 | 1,647,026.80 | For the month of April 2010 |
360556 | 05-20-10 | 9,748.31 | For the month of March & April 2010 |
360557 | 05-20-10 | 1,617,723.17 | For the month of May 2010 |
360596 | 06-10-10 | 1,613,743.08 | For the month of June 2010 |
360665 | 07-27-10 | 1,617,872.91 | For the month of July 2010 |
360696 | 08-24-10 | 1,609,714.79 | For the month of August 2010 |
360698 | 09-01-10 | 15,941.63 | For the months of June & July 2010 |
360730 | 09-20-10 | 1,625,945.87 | For the month of September 2010 |
360795 | 10-12-10 | 1,635,985.11 | For the month of October 2010 |
361180 | 12-23-10 | 23,533.83 | For the months of Sept. and Nov. 2010 |
361214 | 12-23-10 | 9,027.85 | For the month of August 2010 |
361213 | 12-23-10 | 1,819.04 | For the month of October 2010 |
361212 | 12-23-10 | 4,761.75 | For the month of December 2010 |
361235 | 12-30-10 | 36,274.92 | For the months June to August 2010 |
361234 | 12-30-10 | 1,631,418.51 | For the month November 2010 |
361233 | 12-30-10 | 1,623,433.70 | For the month of December 2010 |
361228 | 12-30-10 | 16,661.97 | For the months of June & July 2010 |
361285 | 12-30-10 | 13,707.23 | For the months of Sept.& Oct.2010 |
Total | P19,723,444.66 |
The amount of P19,723,444.66 was disallowed in audit for the following reasons:
(a) The disbursement from retained income under the account Personal Services- Other Personnel benefits is not in accord with Section 1 of the Special Provisions for the SEC of Republic Act No.9970-General Appropriations Act for Fiscal Year 2010, since the purpose of the retained income is to augment the MOOE and CO requirements of the Commission. (Exhibit Y) (b) The grant of personnel benefits authorized by law but not supported by specific appropriation is deemed unauthorized as Section 23 (should be Section 37) of Presidential Decree (PD) 1177 states that all moneys appropriated for functions, activities, projects and programs shall be available solely for the specific purpose for which these are appropriated; and, (c) Though the compensation plan of the Commission shall be comparable with the prevailing compensation plan of the Bangko Sentral ng Pilipinas and other government financial institutions, the same is still subject to the approval of the Office of the President pursuant to Sections 34 & 35 of Chapter 5, Book VI of the Administrative Code. Hence, the letter dated August 20, 2008 (Exhibit Z1-2) from the Office of the President showed such approval of the pay scale of SEC officials and the compensation plan for the SEC for CY 2008 and which specified that "Additional funding requirement of P11.8 Million shall be sourced from SEC's retention income. For succeeding years estimated at P15.7 Million annually shall be included in the PS appropriation for SEC."12(italics supplied)
WHEREFORE, premises considered, Commission on Audit National Government Sector-Cluster 2 Decision No. 2013-004 dated April 1, 2013 is hereby APPROVED. Accordingly, Notice of Disallowance No. 11-003-101-(10) dated December 10, 2011, on the remittance of monthly share contribution to the Provident Fund of the Securities and Exchange Commission (SEC) officials and employees in the amount of P19,723,444.66, is hereby AFFIRMED with MODIFICATION. The SEC personnel need not refund the disallowed amounts remitted to Provident Fund. However, the approving/certifying/authorizing SEC officers are solidarily liable for the total amount of disallowance.20
1) | Did COA Decision No. 2018-010 dated January 17, 2018 validly disallow the allocation and payment of P19,723,444.66 to the provident fund? |
2) | Are the approving, certifying, and authorizing officials of the SEC liable to refund the disallowed amount? |
SEC. 75. Partial Use of Income. - To carry out the purposes of this Code, the Commission is hereby authorized, in addition to its annual budget, to retain and utilize an amount equal to one hundred million pesos (P100,000,000.00) from its income.
The use of such additional amount shall be subject to the auditing requirements, standards and procedures under existing laws. (Emphasis supplied)
Special Provision(s)
1. Use of Income. In addition to the amounts appropriated herein, One Hundred Million Pesos (P100,000,000) sourced from registration and filing fees collected by the Commission pursuant to Section 75 of R.A. 8799 shall be used to augment the MOOE and Capital Outlay requirements of the Commission.27
Sec. 7. Classification of Expenses. The expense accounts are classified into:
x x x
b. Maintenance and Other Operating Expenses (MOOE) - These accounts include expenses necessary for the regular operations of an agency like, among others, traveling expenses, training and seminar expenses, water, electricity, supplies expense, maintenance of property, plant and equipment, and other maintenance and operating expenses.
Sec. 63. Augmentation of Maintenance and Other Operating Expenses Items. Agencies may augment any item of expenditure within MOOE, except confidential and intelligence funds, from savings in other items of MOOE without prior approval of the DBM, subject to the limitations provided under Section 18 of the General Provisions of this Act.
Sec. 18. Mandatory Expenditures. The amounts programmed, particularly for, but not limited to, petroleum, oil and lubricants as well as for water, illumination and power services, telephone and other communication services, rent, retirement gratuity and terminal leave requirements shall be disbursed solely for such items of expenditures: PROVIDED, That any savings generated from these items after taking into consideration the agency's full year requirements may be realigned only in the last quarter.
Use of funds in violation of this section shall be void, and shall subject the erring officials and employees to disciplinary action in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws. (Emphases supplied)
Capital Outlays or Capital Expenditures. An expenditure category/expense class for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of Government, including investments in the capital stock of GOCCs and their subsidiaries.29
The use of Retained Income is not left to the exclusive jurisdiction of the Board of Directors. While it is true that Section 7.2 of RA No. 8799 exempts SEC from laws and regulations on compensations standards and mandates it to formulate its own compensation system comparable with the compensation plan of the Bangko Sentral ng Pilipinas and other financial institutions in government, Section 75 thereof did not give full and absolute authority to SEC officials to use their Retained Income at their own discretion. More so, the SEC violated the Special Provision of RA No. 9970 (GAA for FY 2010), which provides that the use of Retained Income sourced from the P100 million fund is to be retained and utilized only to augment the MOOE and CO requirements of the SEC. The disallowed disbursement cannot be considered as augmenting the MOOE and CO requirements of the SEC.
Thus, this Commission concurs in the disallowance for non-compliance with the requirements of the law. The charging of the personal services against the SEC Retained Income violates Item 9 of Joint Resolution No. 4, series of 2009, of the House of Representatives, and approved by former President Gloria M. Arroyo, which provides that:Exempt Entities – x x x That any increase in the existing salary rates, as well as the grant of new allowances, benefits, and incentives, or increase in the rates thereof shall be subject to the approval of the President upon recommendation of the DBM.32
E. The Rules on Return
In view of the foregoing discussion, the Court pronounces:
- If a Notice of Disallowance is set aside by the Court, no return shall be required from any of the persons held liable therein.
- If a Notice of Disallowance is upheld, the rules on return are as follows:
(a) Approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code. (b) Approving and certifying officers who are clearly shown to have acted in bad faith, malice, or gross negligence are, pursuant to Section 43 of the Administrative Code of 1987, solidarity liable to return only the net disallowed amount which, as discussed herein, excludes amounts excused under the following Sections 2c and 2d. (c) Recipients – whether approving or certifying officers or mere passive recipients – are liable to return the disallowed amounts respectively received by them, unless they are able to show that the amounts they received were genuinely given in consideration of services rendered. (d) The Court may likewise excuse the return of recipients based on undue prejudice, social justice considerations, and other bona fide exceptions as it may determine on a case to case basis. (emphases added)
x x x For one to be absolved of liability the following requisites [may be considered]: (1) Certificates of Availability of Funds pursuant to Section 40 of the Administrative Code, (2) In-house or Department of Justice legal opinion, (3) that there is no precedent disallowing a similar case in jurisprudence, (4) that it is traditionally practiced within the agency and no prior disallowance has been issued, [or] (5) with regard the question of law, that there is a reasonable textual interpretation on its legality. [Emphasis supplied]
True, Transco misread COA Circular No. 2006-001 and mistakenly relied on COA Audit Circular No. 89-300, which solely applies to NGAs. However, it is worthy to note that at that time, there was yet a judicial interpretation of the COA rules on what constitutes "or other documents evidencing disbursements." The Court's careful analysis of the use of certification in claims for EME reimbursement of GOCCs was only made in Espinas in 2014. Thus, it can hardly be concluded that the approving/certifying officers of Transco did not act in good faith when they admitted the certifications as evidence of disbursement.
Moreover, Transco had been granting EME to its officials since it started its operations in 2003 but the payments of EME were disallowed only in 2010. The "records are lacking in proof that between the years 2003 and 2010, certifications were not recognized as valid proof of disbursements. The records did not even show that audit observation memoranda were previously issued to inform Transco of the deficiencies reflected in the audit of accounts, operations or transactions, if any, such as the absence of supporting documents. What is clear from the records is that the approving/certifying officers of Transco committed an honest lapse of judgment when they granted the irregular EME. Their mistake was not indicative of willful and deliberate intent to disregard the COA rules and regulations but only an error of judgment made in good faith. Accordingly, the approving and certifying officers, having acted in good faith in the regular performance of their official functions, are not civilly liable to return the disallowed amount in accordance with Section 38 (1), Chapter 9, Book I of the Administrative Code of 1987.
On the other hand, when a public officer is to be held civilly liable not in his or her capacity as an approving/authorizing officer but merely as a payee-recipient innocently receiving a portion of the disallowed amount, the liability is to be viewed not from the public accountability framework of the Administrative Code but instead, from the lens of unjust enrichment and the principle of solutio indebiti under a purely civil law framework. The reason for this is because the civil liability of such payee-recipient – in contrast to an approving/authorizing officer – has no direct substantive relation to the performance of one's official duties or functions, particularly in terms of approving/authorizing the unlawful expenditure. As such, the payee-recipient is treated as a debtor of the government whose civil liability is based on solutio indebiti, which is a distinct source of obligation.
When the civil obligation is sourced from solutio indebiti, good faith is inconsequential. Accordingly, previous rulings absolving passive recipients solely and automatically based on their good faith contravene the true legal import of a solutio indebiti obligation and, hence, as per Madera, have now been abandoned. Thus, as it stands, the general rule is that recipients, notwithstanding their good faith, are civilly liable to return the disallowed amounts they had individually received on the basis of solutio indebiti.
This notwithstanding, the Court in Madera also recognized certain exceptions to the general rule on return. Bearing in mind its underlying premise, which is "the ancient principle that no one shall enrich himself unjustly at the expense of another," solutio indebiti finds no application where recipients were not unjustly enriched at the expense of the government. Particularly, these pertain to disallowed personnel incentives and benefits which are either: (1) genuinely given in consideration of services rendered (see Rule 2c of the Madera Rules on Return); or (2) excused by the Court to be returned on the basis of undue prejudice, social justice considerations, and other bona fide exceptions as may be determined on a case-to-case basis (see Rule 2d of the Madera Rules on Return).
As a supplement to the Madera Rules on Return, the Court now finds it fitting to clarify that in order to fall under Rule 2c, i.e., amounts genuinely given in consideration of services rendered, the following requisites must concur:(a) the personnel incentive or benefit has proper basis in law but is only disallowed due to irregularities that are merely procedural in nature; and
(b) the personnel incentive or benefit must have a clear, direct, and reasonable connection to the actual performance of the payee-recipient's official work and functions for which the benefit or incentive was intended as further compensation.
Verily, these refined parameters are meant to prevent the indiscriminate and loose invocation of Rule 2c of the Madera Rules on Return which may virtually result in the practical inability of the government to recover. To stress, Rule 2c as well as Rule 2d should remain true to their nature as exceptional scenarios; they should not be haphazardly applied as an excuse for non-return, else they effectively override the general rule which, again, is to return disallowed public expenditures.
With respect to the first requisite above mentioned, Associate Justice Alfredo Benjamin S. Caguioa (Justice Caguioa) – the ponente of Madera – aptly points out that the exception under Rule 2c was not intended to cover compensation not authorized by law or those granted against salary standardization laws. Thus, amounts excused under the said rule should be understood to be limited to disbursements adequately supported by factual and legal basis, but were nonetheless, validly disallowed by the COA on account of procedural infirmities. As the esteemed magistrate observes, these may include amounts, such as basic pay, fringe benefits, and other fixed or variable forms of compensation permitted under existing laws, which were granted without the due observance of procedural rules and regulations (e.g., matters of form, or inadequate documentation supplied/rectified later on). As Justice Caguioa explains:
Under this rubric, the benefits that the Court may allow payees to retain as an exception to Rule 2c's rule of return on the basis of solutio indebiti are limited to compensation authorized by law including: (i) basic pay in the form of salaries and wages; (ii) other fixed compensation in the form of fringe benefits authorized by law; (iii) variable compensation (e.g., honoraria or overtime pay) within the amounts authorized by law despite the procedural mistakes that might have been committed by approving and certifying officers.48 These, to my mind, are the only forms of compensation that can truly be considered "genuinely given in consideration of services rendered," such that their recovery (by the government) which results from a disallowance (again, only because of procedural mistakes that might have been committed by approving and certifying officers) means the government is unjustly enriched (i.e., it benefitted from services received from its employees without making payment for it).
The exception to Rule 2c was not intended to cover all allowances that can be considered "genuinely given in consideration of services rendered" so as to defeat the general rule that payees are liable to return disallowed personnel benefits that they respectively received.
Aside from having proper basis in law, the disallowed incentive or benefit must have a clear, direct, and reasonable connection to the actual performance of the payee-recipient's official work and functions. Rule 2c after all, excuses only those benefits "genuinely given in consideration of services rendered;" in order to be considered as "genuinely given," not only does the benefit or incentive need to have an ostensible statutory/legal cover, there must be actual work performed and that the benefit or incentive bears a clear, direct, and reasonable relation to the performance of such official work or functions. To hold otherwise would allow incentives or benefits to be excused based on a broad and sweeping association to work that can easily be feigned by unscrupulous public officers and in the process, would severely limit the ability of the government to recover.
The same considerations ought to underlie the application of Rule 2d as a ground to excuse return. In Madera, the Court also recognized that the existence of undue prejudice, social justice considerations, and other bona fide exceptions, as determined on a case-to-case basis, may also negate the strict application of solutio indebiti. This exception was borne from the recognition that in certain instances, the attending facts of a given case may furnish an equitable basis for the payees to retain the amounts they had received. While Rule 2d is couched in broader language as compared to Rule 2c, the application of Rule 2d should always remain true to its purpose: it must constitute a bona fide instance which strongly impels the Court to prevent a clear inequity arising from a directive to return. Ultimately, it is only in highly exceptional circumstances, after taking into account all factors (such as the nature and purpose of the disbursement, and its underlying conditions) that the civil liability to return may be excused. For indeed, it was never the Court's intention for Rules 2c and 2d of Madera to be a jurisprudential loophole that would cause the government fiscal leakage and debilitating loss.
It is important to rein in Rules 2c and 2d of the Madera Rules on Return because their application has a direct bearing on the resulting amount to be returned by erring approving/authorizing officers civilly held liable under Section 38, in relation to Section 43, of the Administrative Code. In Madera, the Court explained that when recipients are excused to return disallowed amounts for the reason that they were genuinely made in consideration of services rendered, or for some other bona fide exception determined by the Court on a case to case basis, the erring approving/authorizing officers' solidary obligation for the disallowed amount is net of the amounts excused to be returned by the recipients (net disallowed amount). The justifiable exclusion of these amounts signals that no proper loss should be recognized in favor of the government, and thus, reduces the total amount to be returned to the extent corresponding to such exclusions. Accordingly, since there is a justified reason excusing return, the State should not be allowed a double recovery of these amounts from the erring public officials and individuals notwithstanding their bad faith, malice or gross negligence. Needless to say, even if the civil liability becomes limited in this sense, these erring public officers and those who have confederated and conspired with them remain subject to the appropriate administrative and criminal actions which may be separately and distinctly pursued against them. (Emphases supplied)
As the Court has previously held, government employment should be seen as an opportunity for individuals of good will to render honest-to-goodness public service, and not a trap for the unwary. It should be an attractive alternative to private employment, not an undesirable undertaking grudgingly accepted, to therefore regret. While the Court supports the mandate of the COA in ensuring that the funds of the government are properly utilized and the return to the government of funds unduly spent, the same must not be at the expense of public officials and employees who are directly tasked to discharge and render public service - especially when the presumptions of good faith and regularity in the performance of their duties have not been rebutted or overturned. Otherwise, the Court would unintentionally sanction the discouragement of competent and well-meaning individuals from joining the government. When service in the government is seen as unattractive and unappealing, it is the public that suffers.
Taking all this into consideration, the Court has laid down the rules that it deems equitable to the government whose interest is safeguarded by the COA, on the one hand, and to the government employees who approved, certified, and received the disallowed benefits, on the other.
Finally, the Court exhorts the COA to take into consideration the pronouncements made herein to prevent future decisions that "result [in] exempting recipients who are in good faith from refunding the amount received x x x [while] approving officers are made to shoulder the entire amount paid to the employees" and impose, in the very words of the COA itself, "an inequitable burden on the approving officers, considering that they are or remain exposed to administrative and even criminal liability for their act in approving such benefits, and is not consistent with the concept of solutio indebiti and the principle of unjust enrichment." (Emphases supplied)
Endnotes:
1 Under Rule 64 of the Revised Rules of Court, rollo, pp. 3-64.
2Id. at 70-78.
3Id. at 79-83.
4 "RESOLVED, That the establishment of a Provident Fund in the Securities and Exchange Commission (SEC) be, as the same, is hereby APPROVED subject to compliance of the existing guidelines on the same," id. at 102.
5 Republic Act No. 8799, approved July 19, 2000.
6Rollo, p. 103.
7Id. at 104.
8Id. at 105.
9 Submission of Annual Operating Budgets for Retained Income and Financial Statements. Any department, bureau, office, or agency that is authorized by law to retain and use its income shall prepare and submit its annual operating budget covering its income and corresponding expenditures as well as its audited financial statements of the immediately preceding year to the DBM not later than March 1 of every year.
Failure to submit the said annual operating budget and the audited financial statements shall render any disbursement from said retained income void, and shall subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5, and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.
10Rollo, p. 186.
11Id. at 186-188.
12Id. at 187.
13Id. at 187-188.
14Id. at 189-215.
15 Sec. 44. Service Fees. Departments, bureaus, offices and agencies, which collect service fees for the payment of any obligation through authorized deductions under Section 43, shall deposit said service fees with the National Treasury, to be recorded in its books of accounts as trust receipts. Said service fees shall be used exclusively for the operation of a Provident Fund in favor of all its employees in accordance with pertinent rules and regulations. The Provident Fund shall be used for loaning operations and other purposes beneficial to all members as may be approved by its governing board.
16 REVISING THE BUDGET PROCESS IN ORDER TO INSTITUTIONALIZE THE BUDGETARY INNOVATIONS OF THE NEW SOCIETY.
17Rollo, pp. 218-233.
18 Sec. 43. Authorized Deductions. Deductions from salaries, emoluments or other benefits accruing to any government employee chargeable against the appropriations for personal services may be allowed for the payment of individual employee's contributions or obligations due the following:
(a) •The BIR, GSIS, HDMF and PHIC;
(b) •Mutual benefits associations, thrift banks and non-stock savings and loan associations duly operating under existing laws which are managed by and/or for the benefit of government employees;
(c) •Associations/cooperatives/provident funds organized and managed by government employees for their benefit and welfare; and
(d) •Duly licensed insurance companies accredited by national government agencies.
PROVIDED, That such deductions shall not reduce the employee's monthly net take home pay to an amount lower than Three Thousand Pesos (P3,000.00), after all authorized deductions: PROVIDED, FURTHER, That in the event total authorized deductions shall reduce net take home pay to less than Three Thousand Pesos (P3,000.00), authorized deductions under item (a) shall enjoy first preference, those under item (b) shall enjoy second preference, and so forth.
19 Rollo, p. 75.
20Id. at 77.
21Id. at 85-99.
22Id. at 79-83.
23 Petition dated June 10, 2020. Id. at 3-66
24 Comment dated December 14, 2020. Id. at 254-271.
25 Re: Letter of Court of Appeals Justice Vicente S.E. Veloso for Entitlement to Longevity Pay for His Services as Commission Member III of the National Labor Relations Commission, 760 Phil. 62, 93 (2015).
26Tan v. Crisologo, 820 Phil. 611, 624 (2017).
27 See Special Provisions, AC. Securities and Exchange Commission, XXVI. Other Executive Offices, General Appropriaitons Act for FY 2010.
28 An implied repeal transpires when a substantial conflict exists between the new and the prior laws. In the absence of an express repeal, a subsequent law cannot be construed as repealing a prior law unless an irreconcilable inconsistency and repugnancy exist in the terms of the new and the old laws.28 Repeal by implication is not favoured, unless manifestly intended by the legislature, or unless it is convincingly and unambiguously demonstrated, that the laws or orders are clearly repugnant and patently inconsistent with one another so that they cannot co-exist; the legislature is presumed to know the existing law and would express a repeal if one is intended. There are two instances of implied repeal. One takes place when the provisions in the two acts on the same subject matter are "irreconcilably contradictory, in which case, the later act, to the extent of the conflict, constitutes an implied repeal of the earlier one. The other occurs when the later act covers the whole subject of the earlier one and is clearly intended as a substitute; thus, it will operate to repeal the earlier law; See Bank of Commerce v. Planters Development Bank, 695 Phil 627, 650 (2012).
29 See https://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2020/GLOSSARY.pdf (Last accessed: March 8, 2021.
30GERSIP Association, Inc. v. GSIS, 719 Phil. 526, 533 (2013).
31 See Nazareth v. Villar, 702 Phil. 319 (2013).
32Rollo, pp. 75-76.
33 G.R. No. 244128, September 15, 2020.
34Section 38. Liability of Superior Officers. –Section 39. Liability of Subordinate Officers. – No subordinate officer or employee shall be civilly liable for acts done by him in good faith in the performance of his duties. However, he shall be liable for willful or negligent acts done by him which are contrary to law, morals, public policy and good customs even if he acted under orders or instructions of his superiors.
1) A public officer shall not be civilly liable for acts done in the performance of his official duties, unless there is a clear showing of bad faith, malice or gross negligence. 2) Any public officer who, without just cause, neglects to perform a duty within a period fixed by law or regulation, or within a reasonable period if none is fixed, shall be liable for damages to the private party concerned without prejudice to such other liability as may be prescribed by law. 3) A head of a department or a superior officer shall not be civilly liable for the wrongful acts, omissions of duty, negligence, or misfeasance of his subordinates, unless he has actually authorized by written order the specific act or misconduct complained of.
35SECTION 43. Liability for Illegal Expenditures. – Every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received.
Any official or employee of the Government knowingly incurring any obligation, or authorizing any expenditure in violation of the provisions herein, or taking part therein, shall be dismissed from the service, after due notice and hearing by the duly authorized appointing official. If the appointing official is other than the President and should he fail to remove such official or employee, the President may exercise the power of removal.
36California Clothing, Inc., et. al. v. Quiñones, 720 Phil. 373, 381 (2013).
37Office of the Ombudsman v. De Leon, 705 Phil. 26, 37 (2013); also see GSIS v. Manalo, 795 Phil 832, 858 (2016).
38 G.R. No. 244193, November 10, 2020.
39 G.R. No. 185806, November 17, 2020.
40Commissioner of Customs v. Hypermix Feeds Corp., 680 Phil. 681, 693 (2012).
41 Supra note 30.
42 General Provisions: Sec. 43. Authorized Deductions. Deductions from salaries, emoluments, or other benefits, accruing to any government employee chargeable against the appropriations for personal services may be allowed for the payment of individual employee's contributions or obligations due the following:x x x
C. Medel M. Mondano, former Clerk of Court, to IMMEDIATELY RESTITUTE any remaining shortages in case the monetary value of his earned leave credits and/or other benefits would not be sufficient to cover the same.x x x PROVIDED, That such deductions shall not reduce the employee's monthly net take home pay to an amount lower than Three Thousand Pesos (P3,000.00), after all authorized deductions: PROVIDED, FURTHER, That in the event total authorized deductions shall reduce net take home pay to less than Three Thousand Pesos (P3,000.00), authorized deductions under item (a) shall enjoy first preference, those under item (b) shall enjoy second preference, and so forth.cralawredlibrary