G.R. No. 193462 - Funa vs. Manila Economic and Cultural Office

In 1949, the Chinese Civil War resulted in two rival governments claiming sovereignty over “China”: the communist People’s Republic of China (PRC) on the mainland, and the nationalist Republic of China (ROC) on Taiwan.
Both adhered to a “One China” policy but disputed which government was the legitimate representative of China.
In 1971, UN Resolution 2758 recognized the PRC as “the only legitimate representatives of China,” prompting many states, including the Philippines, to shift diplomatic recognition from the ROC to the PRC.

On 9 June 1975, the Philippines and the PRC signed a Joint Communiqué affirming the Philippines’ adherence to the PRC’s One China policy and ending official ties with Taiwan.
To maintain “people-to-people” relations with Taiwan, the Philippines created the Manila Economic and Cultural Office (MECO), originally incorporated on 16 December 1997 as a non-stock, non-profit corporation under Batas Pambansa Blg. 68.
MECO’s corporate purposes include promoting trade, investment, tourism, cultural, scientific, and educational exchanges between the Philippines and Taiwan, and performing certain delegated consular functions under Executive Order (EO) No. 15 (2001).
MECO is under the operational and policy supervision of the Department of Trade and Industry (DTI) by virtue of EO Nos. 328 (2004) and 426 (2005).

On 23 August 2010, Dennis A.B. Funa, invoking his constitutional right to information, requested from the Commission on Audit (COA) a copy of MECO’s latest financial and audit report, arguing MECO was a government-owned or -controlled corporation (GOCC) under the operational supervision of DTI.
On 25 August 2010, COA Assistant Commissioner Naranjo referred the request to another commissioner and noted that MECO had never been audited by COA’s government corporate clusters.

On 8 September 2010, Funa filed a petition for mandamus under Rule 65, R. of Ct., impleading COA and MECO, to compel COA to audit MECO’s funds and MECO to submit to such audit.
He alleged MECO possessed the essential characteristics of a GOCC or government instrumentality—non-stock corporation, performance of public/governmental functions, control by presidentially appointed board, and supervision by DTI—and thus was subject to COA audit under Article IX-D, Sec. 2(1) of the Constitution.

Procedural Defenses: Petition premature for lack of prior demand; COA had not refused audit; no final disposition of the information request.
Substantive Defenses: MECO is a private non-stock corporation; its board members and officers are elected under its by-laws, not appointed by the President; DTI supervision is policy-level only; government “desire letters” are recommendatory and nonbinding; classifying MECO as GOCC undermines the One China policy.

Procedural Defenses: Petitioner lacks standing to show concrete injury; petition filed in Supreme Court in violation of hierarchy of courts; now moot due to COA Office Order No. 2011-698 directing audit team to Taiwan, including MECO.
Substantive Position: MECO is a non-governmental entity but may be audited insofar as it collects “verification fees” for DOLE under Joint Circular No. 3-99 (1999), classifying it as a non-governmental entity “required to pay…government share” under P.D. 1445 (State Audit Code), Sec. 26 and Admin Code, Sec. 14(1).

Does petitioner have standing as a taxpayer, concerned citizen, bar member and author to bring the mandamus petition?
Is the petition moot or academic by reason of COA Office Order No. 2011-698 directing an audit of MECO?
Was the petition prematurely filed without a prior demand and in violation of the hierarchy of courts?

Is MECO a GOCC or government instrumentality subject to COA’s plenary audit jurisdiction under Constitution Article IX-D, Sec. 2(1)?
If MECO is non-governmental, are any of its accounts nonetheless subject to COA audit—specifically, fees collected on behalf of government agencies?