Legally Yours,  Political Law

Intia v. COA

Intia v. COA

G.R. No. 131529 | Apr. 30, 1999


On April 3, 1992, Republic Act No. 7354, otherwise known as “The Postal Service Act of 1992,” was enacted and approved creating the Philippine Postal Corporation. Pursuant to the powers granted to it by the said charter, the PPC Board of Directors issued and approved Board Resolution No. 95-50 entitled “Approving the three-year progressive increase of Representation and Travel Allowance (RATA) benefits equivalent to 40% of the basic salary of the officials of the PPC.” On December 12, 1996, the Auditor served a notice, ND No. 96-0007-101(96), covering the RATA of petitioners for June 1996. Subsequently, respondent Auditor served other Notices of Disallowance covering the RATA allegedly paid in excess of that authorization under Section 35, R.A. 8174.

Petitioners seek the reversal of the Decision of public respondent Commission on Audit which affirmed the disallowances made by the Corporate Auditor for PPC of the RATA of certain officials.  


Whether or not the PPC Board of Directors can, by itself, grant through a resolution an increase in allowances to its officials without said resolution going to the DBM for review and approval. 


The Court held that although the charter of the PPC grants it the power to fix the compensation and benefits of its employees and exempts PPC from the coverage of the rules and regulations of the Compensation and Position Classification Office, by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is, nonetheless, subject to the review of the DBM.

While the PPC Board of Directors admittedly acted within its powers when it granted the RATA increases in question, the same should have first been reviewed by the DBM before they were implemented Section 21, 22, and 25 of the PPC charter should be read in conjunction with Section 6 of P.D. No. 1597.

 The general rule is that the PPC is covered by the Civil Service Law as regards all personnel matters except those affecting the compensation structure and position classification in the corporation which are left to the PPC Board of Directors to formulate in accordance with law.  It must be stressed that the Board’s discretion on the matter of personnel compensation is not absolute as the same must be exercised in accordance with the standard laid down by law, that is, its compensation system, including the allowances granted by the Board to PPC employees, must strictly conform with that provided for other government agencies under R.A. No. 6758 (Salary Standardization Law) in relation to the General Appropriations Act.  To ensure such compliance, the resolutions of the Board affecting such matters should first be reviewed and approved by the Department of Budget and Management pursuant to Section 6 of P.D. No. 1597.

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