BCDA  v  COA G.R.  No.  178160    February  26,  2009  Ponente:  CARPIO,  J.   FACTS:  

On  March  13,  1992,  Congress  approved  RA  No.   7227   creating  the   Bases   Conversion   and   Development   Authority.   Under  Section  10,  the  functions  of  the  board  include  the  adoption  of  a  compensation  and  benefit   scheme  at   least  equivalent   to   that  of  the  Bangko  Sentral  ng  Pilipinas.     20  December  1996,  the  Board  of  Directors  of  the  BCDA  adopted  a   new   compensation   and   benefit   scheme  which   included  P   10,  000   year   end   benefit   (YEB)   to   each   contractual   employee,  regular   permanent   employee,   and   Board   member.   Board  Chairman  Victoriano  Basco   recommended   to  President  Fidel  V.  Ramos   the   approval   of   this   new   compensation   and   benefit  scheme.   In   1999,   the   BSP   gave   a   P30,000   YEB   to   its   employees   and  increased   it   to  P35,000   in   the  year  2000.   In   line  with   Section  10  of  RA  No.   7227,   the  BCDA  Board   increased  their  YEB  from  P10,000   to   P30,000   for   contractual   and   regular   employees,  Board  members,  and  full  time  consultants.     On   20   February   2003,   State   Auditor   of   COA   issued   Audit  Observation  Memorandum  (AOM)  No.  2003-­‐004  stating  that  the  grant  of  YEB  to  Board  members  was  contrary  to  Department  of   Budget   and  Management   (DBM)   Circular   Letter   No.   2002-­‐2  dated   2   January   2002.   They   disallowed   the   grant   of   YEB   to  

Board  members  and  full  time  consultants.     ISSUE:      Whether  or  not  BCDA  Board  members  and  full-­‐time  consultants  are  entitled  to  YEB   {  The  COA’s  Ruling  }  

HELD:   1.   PETITIONER:  The  Board   can   grant   the  YEB   to   its  members  and  full-­‐time  consultants,  citing  Section  10  of  RA  7227.    

In   Decision   No.   2007-­‐020,   the   COA   affirmed   the  disallowance  of  the  YEB  granted  to  Board  members  and  full-­‐time   consultants   and   held   that   the   presumption   of   good  faith  did  not  apply  to  them.   Citing  DBM   Circular   Letter   No.   2002-­‐02,   COA   states   that  members  of   the  Board  are  not  entitled   to   YEB  because   they  are   not   salaried   officials   of   the   government.  They   should  be  made  to  refund  the  YEB.    

SC:  The  Board’s  power  to  adopt  a  compensation  and  benefit  scheme  is  not  unlimited.  

  Board   is   limited   to   the   specified   per   diem   authorized   by   law.  DBM   Circular   Letter   No.   2002-­‐02  Members   of   the   Board   of  Directors   of   agencies   are   not   salaried   officials   of   the  government.   Therefore,   they   are   not   entitled   to   YEB   unless  expressly  provided  by  law.    As   to   full-­‐time   consultants,   they   are   not   part   of   the   BCDA  personnel   and   are   not   paid   the   basic   salary   (there   is   no  employer-­‐employee   relationship).   This   circular   states   that  YEB  is   a   personal   benefit   granted   in   addition   to   salaries.   As   fringe  benefits,   these   shall   be   paid   only  when   the   basic   salary   is   also  paid.   2.   PETITIONER:   Board   members   and   full-­‐time   consultants  should  be  granted  the  YEB  because  it  is  consistent  with  Section  5  and  18,  Art  II  of  the  Constitution.          

SC:  Art  II  is  a  statement  of  general  ideological  principles  and  policies.   It   is  not  a  source  of  enforceable  rights.  Sections  5  and  18  are  not  self-­‐executing  provisions  (from  Court  ruling  in  Tondo  Medical  Center  Employees  Association  v.  CA)   3.  PETITIONER   :  The  denial  of  YEB  to  the  Board  members  and  full-­‐time   consultants   violates   Section   1   Art   III   of   the  Constitution.   BCDA   claims   that   there   is   no   substantial  distinction  between  regular  employees  and  Board  members  and  full-­‐time  consultants.  There  is  a  distinction,  but  no  difference.

SC:   Every   presumption   should   be   indulged   in   favor   of   the  constitutionality  of  RA  7227  and  the  burden  of  proof  is  on  the  BCDA  to  show  that  there  is  a  clear  and  unequivocal  breach  of  the  Constitution.    

Section  9  of  RA  7227 Members   of   the   board   shall   receive   a   per   diem   (“per   day”;  payment  to  cover  a  task/service)  of  not  more  than  P5,000  for  every   board  meeting:   Provided,   however,   that   the   per   diem  collected   per  month   does   not   exceed   the   equivalent   of   4  meetings…  

Section  5.  The  maintenance  of  peace  and  order,  the  protection  of   life,   liberty,  and  property,  and  the  promotion  of  the  general  welfare   are   essential   for   the   enjoyment   by   all   people   of   the  blessings  of  democracy.   Section   18.   The   State   affirms   labor   as   a   primary   social  economic   force.   It   shall   protect   the   rights   of   workers   and  promote  their  welfare.  

Section   1.   No   person   shall   be   deprived   of   life,   liberty,   or  property  without   due   process   of   law,   nor   shall   any   person   be  denied  the  equal  protection  of  the  laws.  

4.   PETITIONER:  The  Board   can   grant   the  YEB   to   its  members  and   full-­‐time   consultants   because   RA   7227   does   not   expressly  prohibit  it  from  doing  so.   SC:  A  careful   reading  of  Section   9   of   RA   7227   (refer   above)  reveals  that  the  Board  is  prohibited  from  granting  its  members  other  benefits.   5.   PETITIONER:  Board  members  and   full-­‐time  consultants   are  entitled   to   YEB   because   a)   President   Ramos   approved   the  granting  of  the  benefit  b)  they  have  been  receiving  it  since  1997   SC:  The  State   is  not  estopped   from  correcting  a  public  officer’s  erroneous  application  of  a  statute,  and  an  unlawful  practice,  no  matter  how  long,  cannot  give  rise  to  any  vested  right.  

FINAL  SC  RULING:     The   Court   notes   that   the   Board   members   and   full-­‐time  consultants   received   the   YEB   in   good   faith.   Board   members  relied  on:

. Section  10  of  RA  7227,   authorizing   a   compensation   and  benefit  scheme.

. The  fact  that  RA  7227  does  not  expressly  prohibit  it.

. Ramos  approved  it.   Petition   is  partially   granted.  YEB   is   disallowed   but   the   Board  members   and   full-­‐   time   consultants   of   the   BCDA   are   not  required  to  refund  the  YEB  they  have  already  received.