G.R. No. 132593 - Philippine International Trading Corp. vs. Commission on Audit

Philippine International Trading Corporation (PITC) is a government-owned and controlled corporation created under Presidential Decree No. 252, primarily tasked with promoting and developing Philippine trade.
On October 19, 1988, the PITC Board of Directors approved a Car Plan Program for qualified PITC officers, which provided that an eligible officer could purchase a vehicle with the cost-sharing arrangement: 50% borne by PITC and the remaining 50% by the officer via salary deductions over a five-year period.
The Car Plan also included a scheme where PITC reimbursed 50% of the annual car registration fees, insurance premiums, and the cost of registering the chattel mortgage on the car, for a period of five years from the date of purchase.

On July 1, 1989, Republic Act No. 6758 took effect. Section 12 of RA 6758 consolidated allowances and additional compensation into standardized salary rates, except for certain benefits such as representation and transportation allowances which were expressly exempted.
To implement RA 6758, the Department of Budget and Management (DBM) issued Corporate Compensation Circular No. 10 (DBM-CCC No. 10), which, under paragraph 5.6, discontinued all allowances/fringe benefits not listed in specific sub-paragraphs effective November 1, 1989.
The car plan benefits, characterized as fringe benefits under PITC’s Compensation Policy, were subject to review under these new guidelines.

During post-audit, expenses related to the car plan benefits (50% reimbursement for yearly registration, insurance premiums, and registration of the chattel mortgage) incurred after November 1, 1989 were disallowed by the resident COA auditor, on the ground that these benefits were not among those permitted to continue under DBM-CCC No. 10.
PITC, along with the affected officials, appealed the auditor’s disallowance. On July 27, 1992, the COA denied the appeal, affirming the disallowance.
PITC’s motion for reconsideration was similarly denied by the COA in its Resolution dated January 27, 1998.

That the legislature did not intend to revoke existing benefits for incumbents as of July 1, 1989, including the car plan benefits.
That the Car Loan Agreements constitute binding contracts protected by the non-impairment provision of Section 10, Article III of the 1987 Philippine Constitution.
That PITC, by virtue of its Revised Charter (amended by PD 1071, EO 756, and EO 1067), is exempt from the coverage of OCPC rules and standards contained in PD 985, provisions which were purportedly repealed by RA 6758.

The Court noted that the benefits in dispute were intended to facilitate mobility for PITC officials during official business, reducing dependence on company vehicles, taxis, or hired cars.
The petition also involved an examination of whether the issuance and subsequent non-publication of DBM-CCC No. 10, which disallowed the benefits post-November 1, 1989, rendered it ineffective.
Furthermore, the petition examined the statutory validity of exempting PITC from OCPC rules in view of the clear repeal provisions in Section 16 of RA 6758.

Whether the legislature, by the enactment of RA 6758, intended to revoke existing benefits already being received by incumbents, specifically the car plan benefits of PITC officials, or to preserve them under the doctrine of non-diminution of pay.
Whether the Car Loan Agreements executed by PITC and its officials, entered into before the effectivity of RA 6758, are legally binding and protected from impairment under the Constitution’s prohibition against impairment of contracts.
Whether DBM-CCC No. 10, which disallowed the car plan benefits due to lack of inclusion among the permitted allowances, is enforceable given its failure to meet the publication requirement, thereby rendering it null and void.
Whether PITC is exempt from the provisions of RA 985 (as amended by RA 6758) and the related OCPC rules, considering its Revised Charter and subsequent amendments versus the clear repeal stipulated in Section 16 of RA 6758.