Supreme Court dismisses Peza claim

The Supreme Court (SC) has dismissed a suit filed by the Philippine Economic Zone Authority (Peza) against the Commission on Audit (CoA) in connection with the latter’s decision to disallow more than P5 million in per diem allowances sought by ex-officio members of the Peza board of directors.

In its decision, the SC through Associate Justice Martin Villarama said “Peza’s insistence that there is legal basis in its grant of per diems to the ex-officio members of its Board does not hold water” and added that the constitutional prohibition against double compensation for public officials “still stands and this Court finds no reason to revisit the doctrine.”

The Peza Board of Directors is composed of 13 members which include the undersecretaries of the Department of Finance, the Department of Labor and Employment, the Department of Interior and Local Government, the Department of Environment and Natural Resources, the Department of Agriculture, the Department of Public Works and Highways, the Department of Science and Technology and the Department of Energy. The undersecretaries serve in ex-officio capacity and were granted per diems by Peza for every attendance in a board meeting.

Peza filed the petition for certiorari, seeking to annul the CoA’s decision which affirmed the decision of the Director, Cluster IV-Industrial and Area Development and Regulatory, Corporate Government Sector, CoA.

The director affirmed the Notice of Disallowance against the payment of P5,451,500 worth of per diems to ex-officio members of the Board of Directors of Peza.

On Oct. 31, 2007, the deputy director general for finance and administration of Peza moved to reconsider the subject Notices of Disallowance (NDs) and prayed that the concerned ex-officio members be allowed to retain the per diems already received as they received them in good faith.

It was contended that the payment of the per diems covered the period when the April 4, 2006 SC Resolution was not yet final and, thus Peza honestly believed that the grant of the same was moral and legal.

In a letter dated Nov. 16, 2007, the Peza auditor denied the motion for reconsideration. She stated that the Peza management continued paying the per diems even after they were duly notified through the NDs that such was in violation of the Constitution as explained in the Civil Liberties Union case.

She opined that the receipt of the NDs in effect notified the recipients and Peza officials that such payment was illegal and, hence, the failure of Peza to heed the notices cannot be deemed consistent with the presumption of good faith.

By letter dated Jan. 4, 2008, Peza Director General Lilia de Lima appealed the denial of their motion for reconsideration to the Office of the Cluster Director, CoA.

De Lima reiterated their claim of good faith. She argued that since the issue on the propriety of giving per diems to ex-officio members was still unresolved, and because Peza firmly believed that it had legal basis, it continued to pay the per diems despite knowledge and receipt of NDs. Good faith, therefore, guided PEZA in releasing the payments.

On April 30, 2008, Peza filed a petition for review before the CoA to assail the denial of its appeal by the Office of the Cluster Director. Peza reiterated the same arguments it raised in its appeal.

Peza also insisted on its claim of good faith. It emphasized that the per diems were granted by Peza in good faith as it honestly believed that the grant of the same was legal and, similarly, the ex-officio members of the Peza Board received the per diems in good faith.

CoA argued that the position of the undersecretaries of the Cabinet as members of the Board is in an ex-officio capacity or part of their principal office and, thus, they were already being paid in their respective departments.

To allow them to receive additional compensation in Peza would amount to double compensation. –Benjamin B. Pulta, Daily Tribune