Supreme Court of the Philippines

SC backs decision ordering housing officials to return P300-M allowances
SC backs decision ordering housing officials to return P300-M allowances

HIGH COURT. The Supreme Court building in Padre Faura, Manila.

Angie de Silva/Rappler

The High Court says the COA's decision to order the return of the allowances 'is consistent with the prevailing laws and jurisprudence'

MANILA, Philippines – The Supreme Court (SC) backed the Commission on Audit’s (COA) decision ordering some officials and employees of the National Housing Authority (NHA) to return the so-called illegal allowances they received from 2008 to 2009 amounting to P367.8 million.

The High Court’s en banc, in a 21-page decision penned by Associate Justice Ricardo Rosario, dismissed the NHA official and employees’ petition, which sought the reversal of the COA’s order dated January 26, 2018. The SC unanimously junked the petition for lack of merit.

According to the SC, the COA’s decision “is consistent with the prevailing laws and jurisprudence.” The High Court also agreed with the auditing body’s position that there was no good faith in the release of the amount in question.

“It cannot be said that the members of the NHA BOD acted in the honest  belief that the benefits and allowances given were due to the recipients. RA No. 6758 and PD No. 1597 (Further Rationalizing the System of Compensation and Position Classification in the National Government) are explicit that the NHA BOD is bereft of power to grant and increase the amount of the allowances,” the SC said.      

“The rules and regulations, as discussed above, are very emphatic on the needed approval of the President to grant and increase allowances and benefits. In fact, some of the bonuses and allowances appropriated in the NHA’s COB (Corporate Operating Budget)  for CYs 2008 to 2009 were already disallowed by the DBM, yet the NHA still continuously granted the benefits,” it added.

In addition, the SC said the COA was also correct in noting that the NHA board’s power to fix and grant additional compensation to its officials and employees under the Presidential Decree (PD) No. 757 had already been repealed by section 16 of Republic Act (RA) No. 6758 or the Compensation and Position Classification Act of 1989.

The High Court added that the power to determine which officials and employees get allowances now belong to the budget department.

“The decision dated January 26, 2018 of the Commission on Audit is affirmed in toto. The approving and certifying officers are solidarily liable for the return of the disallowed amounts in accordance with the notices of disallowance, while the payee-recipients are individually liable for the return of the amounts they respectively received,” the SC said. 

What happened before?

The state auditors, at that time under chairperson Michael Aguinaldo, approved the decision of COA’s Corporate Government Sector (CGS)-Cluster 2, affirming the notices of disallowances issued by the COA’s special audit team. This was in relation to the NHA’s bonuses and allowances in question.

In its decision, the audit team said the release of the bonuses violated section 12 of the RA No. 6758, and section 45 of RA No. 9498 or An Act Appropriating Funds for the Operation of the Government of the Republic of the Philippines from January to December 2008, and RA No. 9524 or An Act Appropriating Funds for the Operation of the Government of the Republic of the Philippines from January to December 2009).

Among those found liable by the COA for illegal disbursement of founds were:

  • Former NHA general manager Federico Laxamana – he approved the grant of cash incentive bonus or the State of the Nation (SONA) incentive award, economic subsidy, Christmas bonus, citation bonus, meal subsidy, among others
  • NHA officials who approved the release of funds: Wilma Hernandez, Elvira Sabdao, Fe Valenzuela, Rosemarie Sioting, Renato Iballa and the NHA board of directors
  • Government Corporate Counsel representative lawyer Rodolfo Sabio, and other NHA employees who received the bonus

The COA did not side with the position that the NHA general manager is allowed by the PD No. 757 to determine the rates of allowances, honoraria, and other forms of additional compensations. Meanwhile, the petitioners also argued that the Christmas bonus was the NHA’s way to recognize its employees’ dedication to public service as anchored in the provisions under the Executive Order No. 292.

But, the COA maintained its decision, so the petitioners brought the case to the High Court.

In their petition, the NHA officials and employees said the orders made by the auditing body “are seriously flawed, contrary to, and bereft of any legal bases.” They added the COA committed grave abuse of discretion in affirming the disallowance of the benefits. –

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