Renato B. Padilla And Maria Louisa Perez-Padilla vs. Commission On Audit

G.R. No. 244815, February 02, 2021.

FACTS:

In 2012, the PICCI Board of Directors (BOD) approved the grant of PBB for the year 2012 to all PICCI employees at P10,000.00 each or in the total amount of P840,000.00. The PBB was given in recognition of the successful hosting of the events at the Philippine International Convention Center (PICC).  The ATL and the SA issued the ND disallowing the payment of the PBB and declared that it constitutes an irregular transaction under COA Circular No. 2012-003. They ordered the settlement of the disallowed amount. 

PICCI maintained the following arguments: 

  1. PICCI is not covered by E.O. No. 80 and its implementing guidelines since its parent company, the BSP, enjoys fiscal autonomy under Section 1 of Republic Act (R.A.) No. 7653;
  2. PICCI is not within the jurisdiction of the DBM since it does not derive its budget from the GAA, but from the BSP
  3. The COA failed to show “dishonest purpose” or “moral obliquity” so as to constitute bad faith on the part of the petitioners when they approved the payment and certified the availability of funds and completeness of supporting documents for the grant of the PBB.

The COA agreed with the COA-CGS that as a wholly-owned subsidiary of the BSP, the PICCI’s budget is subject to DBM’s review.  The COA reminded that the disbursement of public funds must always conform to and comply with the existing rules and regulations, to which business judgment rule must yield. It rejected the petitioners’ claim of good faith and concluded that the petitioners are presumed to have knowledge of the legal infirmities in the grant of said bonus.

ISSUES: 

  1. Whether or not the COA acted with grave abuse of discretion when it ruled that E.O. No. 80 and its implementing guidelines apply to PICCI.
  2. Whether or not the COA acted with grave abuse of discretion when it found that the petitioners did not act in good faith when they approved and/or certified the grant of the PBB.

HELD: 

1. The PICCI is not covered by E.O. No. 80. The PICCI is a government corporation, wholly-owned by the BSP, that manages and operates the PICC, the premiere facility in hosting for local and international conventions, meetings, exhibitions, and social events.

The fiscal autonomy of the BSP accentuates its role as the country’s independent central authority. The MB then is granted the authority to adopt an annual budget for and authorize such expenditures by the BSP as are in the interest of its effective administration and operations in accordance with the applicable laws and regulations. Since the MB adopts an annual budget for the BSP and, as a matter of course, the PICCI, it is incongruous, if not absurd, to place the BSP under the jurisdiction of the DBM and subject its budget to the DBM’s review and approval.

While generally, GOCCs, including government instrumentalities exercising corporate powers and government financial institutions, fall under the jurisdiction of the GCG, the BSP and its subsidiary PICCI are unequivocally excluded from the GCG’s authority. But this is not to say that the BSP and its subsidiary PICCI necessarily come under the jurisdiction of the DBM. To the mind of the Court, we would be trampling on the BSP’s fiscal and administrative autonomy if we go by such logic.

2. YES. There is no showing that the grant of the PBB strained the government coffers in this case. The PICCI was issued an ND for failure to comply with the conditions imposed in the implementing guidelines of E.O. No. 80, when it need not subscribe to said E.O. in the first place. Hence, the petitioners, as approving and certifying officers, cannot be held civilly liable for the PBB released to the PICCI employees.

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