Case Digest (G.R. No. 210314) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Bangko Sentral ng Pilipinas v. Commission on Audit (G.R. No. 210314, October 12, 2021), the Bangko Sentral ng Pilipinas (BSP) filed a petition for certiorari under Rule 65 assailing Commission on Audit (COA) Decision No. 2012-154 (dated September 27, 2012) and Resolution No. 2013-214 (dated December 3, 2013). COA had issued Audit Observation Memoranda (AOM Nos. RMS-2006-02 and FSAT-DP-AO-2007-02) after its post-audit of the BSP’s dividend remittances for 2003–2005, finding that BSP understated dividends by Php2.101 billion due to deductions of reserves for property insurance and the Security Plant Complex rehabilitation. COA relied on Section 2(d) of Republic Act No. 7656 (RA 7656), which forbids any “reserve for whatever purpose” as a deduction from net earnings, and ruled that Section 43 of RA 7653 (the BSP Charter), which permits BSP to “make adequate allowance or establish adequate reserves for bad and doubtful accounts,” was impliedly repealed. In Decision No. 2010-042 (... Case Digest (G.R. No. 210314) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- BSP Charter (RA 7653)
- Created on June 14, 1993 as an independent central monetary authority with fiscal and administrative autonomy.
- Section 43 allows “adequate allowance or establish adequate reserves for bad and doubtful accounts” in computing net profits.
- Section 44 mandates 50% of net profits revert to the National Treasury.
- Dividend Law (RA 7656)
- Enacted November 9, 1993 to require GOCCs to declare dividends.
- Section 2(d) defines “net earnings” and disallows any reserve deduction.
- Section 3 mandates GOCCs to remit at least 50% of net earnings.
- COA Audit Observations and Rulings
- July 27, 2006: COA Opinion No. 2006-031 finds BSP’s reserve deductions under Sections 43/44 held inapplicable, citing RA 7656.
- Nov. 16, 2006 & Mar. 27, 2008: AOM RMS-2006-02 and FSAT-DP-AO-2007-02 allege P2.101 B understatement for 2003–2005 later revised to P7.147 B for 2003–2006.
- Mar. 23, 2010: COA Decision No. 2010-042 holds Section 2(d) RA 7656 impliedly repealed Section 43 RA 7653 and directs Notice of Charge for BSP.
- Jan. 25, 2011: COA Resolution No. 2011-007 denies reconsideration, affirms implied repeal for all years, but recognizes a compromise—P9.312 B settlement for 2003–2006.
- Jan. 27, 2011: BSP–COA–DOF MOA settles dividends at P9.312 B for 2003–2006 and agrees to “work towards a mutually acceptable and legal arrangement” for subsequent years.
- July 15, 2011: COA letter declares Resolution 2011-007 final for 2007 onward.
- Sept. 27, 2012 & Dec. 3, 2013: COA Decision No. 2012-154 and Resolution No. 2013-214 reiterate that no reserves may be deducted from BSP net earnings for dividends, with “finality.”
- BSP’s Recourse
- Files timely petition for certiorari under Rule 65, challenging COA’s finality and interpretation.
- Argues MOA supersedes COA rulings, COA lacks power to interpret law with finality, BSP’s independence and Charter should govern, no implied repeal, and RA 7656 inapplicable during transitory period.
- COA’s Opposition
- Claims Decision No. 2010-042 and Resolution No. 2011-007 are final and unassailable.
- Asserts MOA covers only 2003–2006.
- Defends principle that a particular provision of a general law prevails over a general provision of a special law.
- Contends BSP lacks implied power to set reserves beyond RA 7656’s prohibition.
Issues:
- Did COA commit grave abuse of discretion in issuing Decision No. 2012-154 and Resolution No. 2013-214 by treating Resolution No. 2011-007 in toto as final and binding precedent for future BSP dividends?
- Does Section 2(d) RA 7656 impliedly repeal Section 43 RA 7653 with respect to BSP’s computation of net profits and reserves?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)