G.R. No. 159275 - Republic vs. Sandiganbayan

In 1994, petitioner Benedicto Ernesto R. Bitonio, Jr. was appointed Director IV of the Bureau of Labor Relations under the Department of Labor and Employment (DOLE).
On May 11, 1995, through a letter to the respective secretaries, he was designated as the DOLE representative to the Board of Directors of the Philippine Economic Zone Authority (PEZA) pursuant to Section 11 of Republic Act No. 7916 (Special Economic Zone Act of 1995).
This designation enabled the petitioner to receive a per diem for every board meeting he attended as part of his representation.

Following a post-audit of PEZA’s disbursement transactions, the Commission on Audit (COA) disallowed the payment of per diems to the petitioner.
Three Notices of Disallowance were issued:

Notice No. 98-008-101 (95) dated July 31, 1998 for P24,500 covering July–December 1995.
Notice No. 98-003-101 (96) dated July 31, 1998 for P100,000 covering January 1996 to January 1997.
Notice No. 98-017-101 (97) dated October 9, 1998 for P210,000 covering February 1997 to January 1998.

The underlying reason stated was that the per diems were granted in contravention of the constitutional prohibition on receiving additional compensation by officials holding multiple government positions, as established in the Civil Liberties Union vs. Executive Secretary case.

On November 24, 1998, the petitioner filed a motion for reconsideration seeking annulment of the COA’s decision.
The petitioner argued that:

The Supreme Court’s prior clarification limited the prohibition to Cabinet Secretaries, Undersecretaries, and their assistants, thereby excluding officials at his rank.
Republic Act No. 7916 expressly provided for per diems for the attendance of PEZA Board members, and since it was enacted in 1995 (after the Civil Liberties Union ruling), the law should prevail until declared unconstitutional.

An amended petition was later filed to include a belatedly received Notice of Disallowance (No. 98-003-101, 96).

On January 30, 2001, the COA rendered its decision denying the petitioner’s motion for reconsideration.
The COA based its action on its memorandum (No. 97-038) which derived guidance from the Senate Committee Report No. 509 and the precedent set by the Civil Liberties Union case, asserting that additional compensation for multiple government offices is unconstitutional.

Whether the Commission on Audit correctly disallowed the per diems received by the petitioner for his role as the representative of the Secretary of Labor on the PEZA Board of Directors.
Whether the petitioner, by virtue of his designation, falls within the category of officials constitutionally prohibited from receiving additional compensation.

Whether legislative provisions under Republic Act No. 7916, which authorize payment of per diems to board members, can overcome constitutional prohibitions when such officials serve in an ex officio capacity.
The extent to which COA’s administrative directive (memorandum circular) can effectively limit statutory benefits that conflict with constitutional mandates.