Case Summary (G.R. No. 191906)
Antecedents
From 2005 to 2007, TIDCORP's Board approved various compensatory measures for its members, including salaries, bonuses, and allowances. On July 13, 2012, the COA issued Notice of Disallowance No. 2012-001, disallowing expenditures amounting to PHP 4,539,835.02. The COA asserted that these payments were in violation of Article IX-B, Section 8 of the Constitution, specifically regarding prohibiting additional compensation to public officers unless authorized by law, as Favila and other board members were already compensated through their principal offices. The disallowed amount included approximately PHP 454,598.28 that Favila had received between October 2008 and May 2010.
Proceedings Before the COA
TIDCORP contested the disallowance, claiming that the board had the authority to determine member compensation under Republic Act No. 8494. However, the COA maintained that the statute applied only to TIDCORP’s officers and not its board members, specifically limiting benefits for board members to per diem allowances. Favila subsequently appealed to the COA Proper, which denied his claims, citing that board members serving ex-officio were not entitled to the benefits in question elucidated in its Decision No. 2019-001 dated January 13, 2019. The COA also rejected the grounds of procedural due process violations claimed by Favila.
Petition for Certiorari
Following the rejection of his motion for reconsideration, Favila raised the matter before the Supreme Court through a Petition for Certiorari. He argued that he had acted in good faith, was entitled to receive the benefits, and that procedural due process had not been adhered to by the COA. The COA countered that its dismissal of Favila's appeal was justified, affirming that Favila had benefited from the disallowed allowances, thus should be compelled to refund the amounts.
Supreme Court Decision
In a ruling delivered on November 29, 2022, the Supreme Court dismissed Favila's petition, affirming the COA's determination that he was solidarily liable for the disallowed amount. The Court asserted that the prevailing understanding, supported by previous jurisprudence, is that board members' services were compensated through their regular positions, thereby precluding entitlement to additional compensation as board members. The Court dismissed Favila's claims of good faith in light of relevant legal principles and found him to be an active participant in the receipt of disallowed payments.
Motion for Reconsideration
In response to the Supreme Court's dismissal, Favila submitted a Motion for Reconsideration, insisting on his innocence as neither an approving officer nor having participated in approving resolutions granting the disputed benefits. His motion emphasized long-standing practices at TIDCORP and his belief in the
...continue readingCase Syllabus (G.R. No. 191906)
Parties and Context
- Petitioner: Peter B. Favila, former Secretary of the Department of Trade and Industry (DTI) and ex-officio member of the Board of Directors (BOD) of Trade and Investment Development Corporation of the Philippines (TIDCORP).
- Respondent: Commission on Audit (COA).
- Case concerns COA finding Favila liable for disallowed monetary benefits totaling PHP 4,539,835.02 received as an ex-officio Board member of TIDCORP.
- TIDCORP is a government corporate entity established under Presidential Decree No. 1080, amended by Republic Act No. 8494.
Factual Background
- Between 2005 and 2007, TIDCORP’s BOD approved eight Board Resolutions granting various monetary benefits (productivity enhancement pay, developmental contribution bonuses, corporate guaranty, grocery subsidy, anniversary bonuses) to Board members and alternates.
- Favila served on TIDCORP’s Board from 2008 to 2010, after the resolutions were passed.
- On July 13, 2012, COA issued Notice of Disallowance No. 2012-001 for PHP 4,539,835.02 covering payments made from 2005 to 2010 to TIDCORP Board members, including Favila.
- COA held that such benefits constituted double compensation under Article IX-B, Section 8 of the Constitution, as Board members were paid by their original offices.
Legal Issues Presented
- Legality of granting monetary benefits to TIDCORP Board members in ex-officio capacity.
- Whether Favila, as ex-officio member, is liable for return of such benefits.
- Whether Favila was entitled to said benefits under TIDCORP Charter and Board Resolutions.
- Whether COA violated Favila's procedural due process rights.
Arguments of the Parties
- Petitioner Favila and TIDCORP argued:
- Benefits were authorized by the Board under RA No. 8494 Section 7 granting exclusive power to fix remuneration.
- Benefits granted in good faith based on valid Board Resolutions.
- COA denied due process by issuing disallowance without prior suspension notice.
- COA countered:
- RA No. 8494 Section 7 applies only to officers and employees, not Board members.
- Section 13 limits Board members’ benefits to per diem allowances only.
- Favila unlawfully received additional compensation constituting double compensation.
Proceedings in COA Proper
- COA Proper in Decision No. 2019-001 (Jan 13, 2019) upheld the