427 Phil. 464
CARPIO, J.:
“Premises considered, the instant appeal has to be, as it is hereby denied for lack of legal basis. Consequently, the Notice of Disallowance issued by the NEA Auditor covering the subject disbursement is hereby sustained. Accordingly, all NEA officials and employees who received compensation and allowances in violation of the provisions of Executive Order No. 389 and National Budget Circular No. 458 are hereby directed to refund the same within a period of one year after the promulgation of this decision. NEA management is enjoined to effect said refund under the supervision of the NEA Auditor who shall ensure the proper and strict implementation of this decision.”[2]
“SEC. 2. Full Implementation. The Department of Budget and Management is hereby directed to implement in full in FY 1997 the remaining balance of said Salary Schedule after the partial implementation made of the same in 1994, 1995 and 1996 to civilian and uniformed personnel, as follows:The Department of Budget and Management (“DBM” for brevity) issued Implementing Guidelines under National Budget Circular No. 458 (“NBC No. 458”), series of 1997, reiterating the schedule of payments in EO 389.
1. For Civilian Personnel
- Effective January 1, 1997 = in accordance with the Fourth Interim Salary Schedule hereto attached and marked as Annex A of this Order. The adjustment shall be to the designated salary step of the employee in the salary grade allocation of his position as of December 31, 1996;
- Effective November 1, 1997 = in accordance with the attached Salary Schedule marked as Annex B of this Order. The adjustment shall be to the designated salary step of the employee in the salary grade allocation of his position as of October 31, 1997.
x x x.”
”After a careful evaluation of the facts and pertinent laws obtaining in this case, this Commission finds the instant appeal bereft of merit. Pursuant to Article 29 (1) of the 1987 Constitution “No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.” Also, under R.A. 8244, a law appropriating twenty-seven billion pesos for the fourth and final year of implementation of the salary increases pursuant to the Senate-House of Representatives Resolution No. 01 Series of 1994 for all National Government civilian and uniformed personnel, it is specifically provided that the salary increases shall be effective on the following schedule of payments:Perusal of the provision of E.O. No. 389 and National Budget Circular No. 458 Series of 1997 would show the same effectivity dates or schedule of payments. Suffice it to say, that the aforequoted provisions of law treating on the subject salary implementation is clear and unequivocal such that there could never be any room for a different interpretation regarding the effectivity dates except that which is explicitly stated therein. Thus, when the NEA effected full implementation of the new salary schedule on January 1, 1997, instead of November 1, 1997, NEA was, then, clearly acting in violation of the mandates of the law. Consequently, said wrongful implementation must be struck down for being baseless and unlawful, and all its employees who received the undue increases must necessarily return the amount thus received.”
- “Effective January 1, 1997 for the first 50% of the unimplemented balance as of December 31, 1996; and
- “Effective November 1, 1997 the remaining fifty percent (50%) of said unimplemented balance to effect full salary adjustment.”
In the main, NEA argues that it may accelerate the implementation of the salary increases for the year 1997 due to the availability of funds.
“1. NEA’s accelerated implementation of SSL II is in accordance with law, Joint Senate-House of Representatives Resolution No. 01 dated March 3, 1994, particularly Section 10 thereof x x x. “2. The fund to pay such increase had the “imprimatur” of the DBM and was included in the General Appropriations Act of 1997 (R.A. 8250) x x x.”[4]
“SEC. 23. Content of the General Appropriations Act. – The General Appropriations Act shall be presented in the form of budgetary programs and projects for each agency of the government, with the corresponding appropriations for each program and project, including statutory provisions of specific agency or general applicability. The General Appropriations Act shall not contain any itemization of personal services, which shall be prepared by the Secretary after enactment of the General Appropriations Act, for consideration and approval of the President.” (Emphasis supplied)Further, the execution of the annual GAA is subject to a program of expenditure to be approved by the President and this approved program of expenditure is the basis for the fund release. Thus, Section 34, Chapter 5, Book IV of the Administrative Code states that –
“Sec. 34. Program of Expenditure - The Secretary of Budget shall recommend to the President the year’s program of expenditure for each agency of the government on the basis of authorized appropriations. The approved expenditure program shall constitute the basis for fund release during the fiscal period, subject to such policies, rules and regulations as may be approved by the President.” (Emphasis supplied)Moreover, Section 60, Chapter 7, Book VI of the Administrative Code provides that no portion of the appropriations in the GAA shall be used for payment of any salary increase or adjustment unless specifically authorized by law or appropriate budget circular. It reads:
SEC. 60. Restrictions on Salary Increases. – No portion of the appropriations provided in the General Appropriations Act shall be used for payment of any salary increase or adjustment unless specifically authorized by law or appropriate budget circular nor shall any appropriation for salaries authorized in the General Appropriations Act, save as otherwise provided for under the Compensation and Position Classification Act, be paid unless the positions have been classified by the Budget Commission. (Emphasis supplied)Finally, Section 33 of the 1997 GAA itself expressly provides that the salary increases authorized by the Senate-House of Representatives Joint Resolution No. 01 or the Salary Standardization Law II are subject to approval by the President. It reads:
“Sec. 33. Compensation Adjustment and Productivity Incentive Benefits. The amount authorized for Compensation Adjustment and Productivity Incentive Benefits shall be used for the adjustment in basic salary and associated benefits of national government personnel pursuant to Joint Resolution No. 01, s. 1994 of Congress, as well as Productivity Incentive Benefits as may be approved by the President: PROVIDED, That such compensation adjustment shall be fully implemented within FY 1997: PROVIDED, FURTHER, That transportation allowance, if any, shall be deducted from or reduced by the salary adjustment: PROVIDED, FURTHERMORE, That compensation adjustment for government-owned or controlled corporations and local government units shall be charged to their corporate and local funds, respectively: xxx.” (Emphasis supplied)Clearly, NEA cannot automatically spend its authorized appropriation for Personal Services under the 1997 GAA. The Budget Secretary must first prepare an itemization of the Personal Services, and submit the same for approval of the President. Next, the Budget Secretary must recommend to the President NEA’s program of expenditure for the current year based on NEA’s authorized appropriation. The President may approve the expenditure program subject to certain policies and rules. The salary adjustments as well as the associated benefits granted by the Salary Standardization Law II are, under the 1997 GAA, expressly subject to the President’s approval. Appropriations for salary increases or adjustments shall be released as specifically authorized by law or appropriate budget circular, which in this case is National Budget Circular No. 458. Hence, compliance with said budget circular is mandatory.
“GOCCs, GFIs and LGUs which do not have adequate or sufficient funds to pay the salary increases prescribed herein, may only partially implement the established rate; Provided, That, any partial implementation should be fixed at a uniform percentage such that no official or employee shall receive a percentage adjustment higher than that of any other official/employee in the same corporate entity and local government unit.”The interpretation placed by NEA on Section 10 does not find support in the text thereof – expressium facit cessare tacitum – what is expressed puts an end to that which is implied.[6] Section 10 refers only to GOCCs with insufficient funds to pay the salary increases. Section 10 expressly authorizes GOCCs with insufficient funds to partially implement the prescribed salary increases in a uniform and non-discriminatory manner. Nothing in Section 10 authorizes GOCCs with sufficient funds to accelerate the prescribed schedule of salary increases. Clearly, Section 10 of EO 389 does not authorize, expressly or impliedly, the advance implementation of the salary increases just because a GOCC has the available funds.
“The three tranches scheme for GOCCs are as follows:The Memorandum, which allows full implementation of the salary increases “[n]ot earlier than November 1, 1996”, does not automatically accelerate the staggered salary increases for 1997. On the contrary, the Memorandum specifically provides that accelerated implementation can be availed of by GOCCs and GFIs “x x x only upon prior approval of the DBM”. In order to secure such prior approval from the DBM, GOCCs and GFIs must submit an application for acceleration to the DBM which will evaluate and act on the same on the basis of nine terms and conditions specifically enumerated in the Memorandum. The Memorandum provides thus:
FIRST - effective not earlier than 01 November 1997 at an amount as may be determined by the governing Board of the GOCC concerned, provided such amount shall not exceed 30% of the unimplemented balance of said Salary Schedule;
SECOND - the 30% of the said balance or any lower amount as may be determined by the governing Board of the concerned GOCC may be implemented not earlier than 01 April 1996; and
THIRD – the remaining balance may be implemented not earlier than 01 November 1996.” (Emphasis supplied)
“The GOCC and GFI can avail of the above accelerated implementation only upon prior approval by the DBM. For this purpose, GOCC and GFI will submit an application for acceleration to DBM which will evaluate and act on same on the basis of the following terms and conditions:Evidently, in order to avail of the benefits of accelerated implementation, NEA must secure the approval of the DBM by complying with the terms and conditions prescribed by the Memorandum. NEA failed to do this. Absent any authority or approval from the DBM or the President authorizing NEA to accelerate implementation of the last phase of the salary increase, NEA’s accelerated payment is without legal basis.x x x.” (Emphasis supplied)
- the GOCC and GFI shall have never been seriously/critically assailed to have caused or contributed to the economic problems of the country as evidenced by duly verified/proven facts presented in a responsible published public criticism;
- that it must not have received any subsidy or other forms of financial support from the national government in financing its operation or in the implementation of projects for the last three (3) years;
- that its operational performance for the same period, as well as its present financial position, is indicative that the concerned GOCC and GFI will remain financially viable and capable of financing its operations;
- that it has actually remitted all mandatory dividends to the national government through the National Treasury equivalent to 50% of its net income pursuant to R.A. No. 7656, dated 09 November 1993, and has no unpaid taxes due the national government or local government units, and their respective agencies and instrumentalities;
- that all advances made by the national government for debt service and other obligations shall have been accordingly liquidated;
- that it has not incurred any losses from operations for the last three (3) years;
- that the financial position and earning performance of the GOCC and GFI shall in no case be affected by SSL acceleration;
- that the accelerated implementation herein authorized shall strictly be based on the Position Allocation List (PAL) specifically approved by the DBM for such GOCC and GFI pursuant to R.A. No. 6758, or Organizational Structure and Staffing Pattern pursuant to existing budgeting laws, and shall be based on the 33-grade Salary Schedule; and
- that no funding support shall be required from the national government nor funds already released and earmarked for a specific purpose be used therefore. Funds for the purpose shall solely be sourced from corporate funds:
“Sec. 2. Executive Orders. – Acts of the President providing for rules of a general or permanent character in implementation or execution of constitutional or statutory powers shall be promulgated in executive orders”.[8] (Italics supplied)Joint Resolution No. 01 expressly acknowledges the authority of the President to revise the existing compensation and position classification under the standards and guidelines provided by said Resolution.[9] Further, paragraph 13 of the Resolution states that:
(13) Implementing Guidelines - The Department of Budget and Management shall prepare and issue the necessary guidelines for the implementation of the revised compensation and position classification system consistent with the governing executive order to be issued by the Office of the President.” (Emphasis supplied)As the administrative head of the government, the President is vested with the power to execute, administer and carry out laws into practical operation. Hence, the Court has held that -
“While Congress is vested with the power to enact laws, the President executes the laws. The executive power is vested in the President. It is generally defined as the power to enforce and administer the laws. It is the power of carrying (out) the laws into practical operation and enforcing their due observance.”[10]There could be no doubt that EO 389 has been issued on authority and within the confines of the law. Joint Resolution No. 01 established a time frame of four years[11] for the implementation of the Salary Standardization Law II. Consonant with this time frame, the initial implementation was effected in 1994 through Executive Order No. 164; in 1995 through Executive Order No. 218; in 1996 through Executive Order No. 290 and clarified by Presidential Memorandum to the Secretary of Budget and Management dated November 7, 1995. For the fourth and final year, Executive Order No. 389 dated December 28, 1996 was issued by the President. Oddly, NEA does not question the authority of the President to issue the executive orders implementing the Salary Standardization Law II previous to EO 389. Apparently, NEA complied with the previous executive orders implementing Joint Resolution No. 01.
“Under the Constitution, the authority of the Auditor General in connection with the expenditures of the government is limited to the auditing of expenditures of fund or property pertaining to, or held in trust by, the government or the provinces or municipalities thereof. xxx xxx Such function is limited to a determination of whether there is a law appropriating funds for a given purpose.”The ruling in Guevara has already been overturned by the Court in Caltex Philippines, Inc. vs. Commission on Audit,[13] as follows:
“The ruling on this particular point, quoted by petitioner from the cases of Guevara vs. Gimenez and Ramos vs. Aquino, are no longer controlling as the two (2) were decided in the light of the 1935 Constitution.Indeed, the powers of the Commission as provided in the 1987 Constitution are broader and more extensive. Section 2, Paragraph D, Article IX of the 1987 Constitution reads:
xxx. As observed by one of the Commissioners of the 1986 Constitutional Commission, Fr. Joaquin G. Bernas:“It should be noted, however, that whereas under Article XI, Section 2, of the 1935 Constitution the Auditor General could not correct ‘irregular, unnecessary, excessive or extravagant’ expenditures of public funds but could only ‘bring [the matter] to the attention of the proper administrative officer,’ under the 1987 Constitution, as also under the 1973 Constitution, the Commission on Audit can ‘promulgate accounting and auditing rules and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds and properties.’ Hence, since the Commission on Audit must ultimately be responsible for the enforcement of these rules and regulations, the failure to comply with these regulations can be a ground for disapproving the payment of a proposed expenditure.”
“Sec. 2. (1) The Commission on Audit shall have the power, authority and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the government, or any of its subdivisions, agencies, or instrumentalities, including government-owned and controlled corporations with original charters and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity. x x x.The Constitution and existing laws[14] mandate the Commission to audit all government agencies, including government-owned or controlled corporations. The Constitution specifically vests in the Commission the authority to determine whether government entities comply with laws and regulations in the disbursement of government funds and to disallow illegal or irregular disbursements of government funds.
(2) The Commission shall have exclusive authority, subject to the limitations in the Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties.”
“Sec. 17. The President shall have control of all the executive departments, bureaus and offices. He shall ensure that the laws be faithfully executed.”The presidential power of control over the executive branch of government extends to all executive employees from Cabinet Secretary to the lowliest clerk.[18] The constitutional vesture of this power in the President is self-executing and does not require statutory implementation, nor may its exercise be limited, much less withdrawn, by the legislature.[19]