370 Phil. 793
PURISIMA, J.:
"After a thorough evaluation, this Office believes and so holds that the disallowance of the Auditor on the payment of the mid-year social amelioration benefits or the educational assistance benefits is in order. It bears stress that Sec. 5.6 of CCC No. 10 (Implementing R.A. 6758) is so explicit when it provides that:Undaunted, petitioners found their way to this Court via the present Petition for Review on Certiorari, filed on April 24, 1995, seeking the annulment of the said COA Decision; theorizing that the respondent Commission on Audit erred:`Payment of other allowances/fringe benefit and all other forms of compensation granted on top of basic salary, whether in cash or in kind, not mentioned in Sub-Paragraphs 5.4 and 5.5 above shall be discontinued effective November 1, 1989. Payment made for such allowance/fringe benefits after said date shall be considered as illegal disbursement of public Funds.'Since the educational assistance or the mid- year social amelioration is not among those allowances mentioned in Sub-pars. 5.4 and 5.5 of CCC No. 10, the same shall be discontinued effective November 1, 1989 and considering that NTA paid its officials/employees this type of allowance, such payment shall be considered as illegal disbursement of public funds.
The provision of Sec. 12 second sentence thereof as invoked by the Administrator should be read in conjunction with the first sentence thus -`Consolidation of Allowances and Compensation - All allowances except for representation and transportation allowances; clothing and laundry allowances; subistence [sic] allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized." xxxxxx xxx xxx
Premises considered and for lack of legal basis, the herein request of the Administrator, NTA for the lifting of the disallowance in question, may not be given due course."[5] [Underscoring; supplied]
IN HOLDING THAT THE PAYMENT OF SUBJECT SOCIAL AMELIORATION /EDUCATIONAL ASSISTANCE BENEFIT - A BENEFIT CONTINUOUSLY BEING RECEIVED BY INDIVIDUAL PETITIONERS AND OTHER NTA EMPLOYEES STARTING WAY BEFORE THE EFFECTIVITY OF THE SALARY STANDARDIZATION LAW (R.A. 6758) ON 1 JULY 1989 - IS NOT AUTHORIZED UNDER THE SAME LAW (R.A. 6758) OR IS OTHERWISE WITHOUT LEGAL BASIS;Petitioners raise the pivotal issues: (1) whether or not the social amelioration or educational assistance benefit given to the individual petitioners prior to enactment of R.A. 6758 is authorized under the law, (2) whether or not the disallowance of the said benefit is tantamount to diminution of pay, and (3) whether or not the individual petitioners have acquired a vested right thereover.II.
IN FAILING TO REALIZE AND CONSIDER THAT THE DISALLOWANCE OF THE PAYMENT OF SUBJECT SOCIAL AMELIORATION/EDUCATIONAL ASSISTANCE BENEFIT IS CONSTITUTIVE OF DIMINUTION OF COMPENSATION PROSCRIBED UNDER EXISTING LAWS AND IN VIOLATION OF THE GENERAL WELFARE CLAUSE OF THE CONSTITUTION;III.
IN FAILING TO RECOGNIZE THAT INDIVIDUAL PETITIONERS AND OTHER SIMILARLY SITUATED NTA EMPLOYEES HAVE ACQUIRED A VESTED RIGHT OVER SAID SOCIAL AMELIORATION/EDUCATIONAL ASSISTANCE BENEFIT AND COA's DISALLOWANCE THEREOF IS AN ILLEGAL VIOLATION OF SUCH RIGHT.
"Section 12: Consolidation of Allowances and Compensation - All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.
Existing additional compensation of any national government official or employee paid from local funds of a local government unit shall be absorbed into the basic salary of said official or employee and shall be paid by the National Government."
"Section 17. Salaries of Incumbents - Incumbents of positions presently receiving salaries and additional compensation/fringe benefits including those absorbed from local government units and other emoluments, the aggregate of which exceeds the standardized salary rate as herein prescribed, shall continue to receive such excess compensation, which shall be referred to as transition allowance. The transition allowance shall be reduced by the amount of salary adjustment that the incumbent shall received [sic] in the future."B. Section 4.1 of CCC No. 10:
4.0 DEFINITION OF TERMSC. Sub-Paragraphs 5.4, 5.5 and 5.6 of CCC. No. 10:
4.1 The present salary of an incumbent for purposes of this Circular shall refer to the sum total of actual basic salary including allowances enumerated hereunder, being received as of June 30, 1989 and certified and authorized by the DBM.
4.1.1 Cost-of-Living Allowance (COLA)/Bank Equity Pay (BEP) equivalent to forty percent (40%) of basic salary or P300.00 per month, whichever is higher;
4.1.2 Amelioration Allowance equivalent to ten percent (10%) of basic salary or P150.00 per month, which ever is higher;
4.1.3 COLA granted to GOCCs/GFIs covered by the Compensation and Position Classification Plan for the regular agencies/offices of the National Government and to GOCCs/GFIs following the Compensation and Position Classification Plan under LOImp. No. 104/CCC No. 1 and LOImp. No. 97/CCC No. 2, in the amount of P550.00 per month for those whose monthly basic salary is P1,500.00 and below, and P500.00 for those whose monthly basic salary is P1,501.00 and above, granted on top of the COLA/BEP mentioned in Item 4.1.1 above;
4.1.4 Stabilization Allowance; and
4.1.5 Allowance/fringe benefits converted into "Transition Allowance" pursuant to Memorandum Order No. 177, as implemented by Corporate Budget Circular No. 15, both series of 1988.
4.2 Allowances enumerated above are deemed integrated into the basic salary for the position effective July 1, 1989.
4.3 Transition allowance, for purposes of this circular shall mean the excess of the present salary of the incumbent defined in Item 4.1 hereinabove, over the eighth step of the Salary Grade to which his position is allocated.
5.0 IMPLEMENTING PROCEDURESPetitioners maintain "that since they have been receiving the social amelioration or educational assistance benefit before July 1, 1989, when R.A. No. 6758 took effect, and the benefit was not integrated into their standardized salary rate, they are entitled to receive it even after the effectivity of the said Act."[6] They base their claim on the second sentence of Section 12 and on Section 17 of the Salary Standardization Law which, for the sake of thoroughness and clarity of discussion, we deem it expedient to quote again, to wit:
xxx xxx xxx
5.4 The rates of the following allowances/fringe benefits which are not integrated into the basic salary and which are allowed to be continued after June 30, 1989 shall be subject to the condition that the grant of such benefit is covered by statutory authority.
5.4.1 Representation and Transportation Allowances (RATA) of incumbent of the position authorized to receive the same at the highest amount legally authorized as of June 30, 1989 of the level of his position within the particular GOCC/GFI;
5.4.2 Uniform and Clothing Allowance at a rate as previously authorized;
5.4.3 Hazard Pay as authorized by law;
5.4.4 Honoraria/additional compensation for employees on detail with special projects of inter-agency undertakings;
5.4.5 Honoraria for services rendered by researchers, experts and specialists who are of acknowledged authorities in their field of specialization;
5.4.6 Honoraria for lecturers and resource persons/speakers;
5.4.7 Overtime Pay in accordance to Memorandum Order No. 228;
5.4.8 Clothing/laundry allowances and subsistence of marine officers and crew on board GOCCs/GFIs owned vessels and used in their operations, and of hospital personnel who attend directly to patients and who by nature of their duties are required to wear uniforms;
5.4.9 Quarters Allowance of officials and employees who are presently entitled to the same;
5.4.10 Overseas, Living Quarters and other allowances presently authorized for personnel stationed abroad;
5.4.11 Night Differential of personnel on night duty;
5.4.12 Per Diems of members of governing Boards of GOCCs/GFIs at the rate as prescribed in their respective Charters;
5.4.13 Flying Pay of personnel undertaking aerial flights;
5.4.14 Per Diems/Allowances of Chairman and Members/Staff of collegial bodies and Committees; and
5.4.15 Per Diems/Allowances of officials and employees on official foreign and local travel outside of their official station;
5.5 Other allowances/fringe benefits not likewise Integrated into the basic salary and allowed to be continued only for incumbents as of June 30, 1989 subject to the condition that the grant of the same is with appropriate authorization either from the DBM, Office of the President or legislative issuances are as follows:
5.5.1 Rice Subsidy;
5.5.2 Sugar Subsidy;
5.5.3 Death Benefits other than those granted by the GSIS;
5.5.4 Medical/Dental/Optical Allowances/Benefits;
5.5.5 Children's Allowance;
5.5.6 Special Duty Pay/Allowance;
5.5.7 Meal Subsidy;
5.5.8 Longevity Pay; and
5.5.9 Teller's Allowance.
5.6 Payment of other allowances/fringe benefits and all other forms of compensation granted on top of basic salary, whether in cash or in kind, not mentioned in Sub-paragraphs 5.4 and 5.5 above shall be discontinued effective November 1, 1989. Payment made for such allowances/fringe benefits after said date shall be considered as illegal disbursement of public funds."
"Second Sentence of Section 12, R.A. 6758 - xxx. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized;"It is the submission of the Commission on Audit that payment of the educational assistance in question is not authorized under Republic Act No. 6758, arguing "that the provision of Sec. 12, second sentence thereof as invoked by the Administrator [representing the petitioner herein] should be read in conjunction with the first sentence...;"[7] and if the entire Section 12 is further considered in relation to sub-paragraphs 5.4, 5.5 and 5.6 of CCC No. 10, respondent concluded that the grant of subject educational assistance would have no legal basis at all.
x x x
"Section 17: Salaries of Incumbents - Incumbents of positions presently receiving salaries and additional compensation /fringe benefits including those absorbed from local government units and other emoluments, the aggregate of which exceeds the standardized salary rate as herein prescribed, shall continue to receive such excess compensation, which shall be referred as transition allowance. The transition allowance shall be reduced by the amount of salary adjustment that the incumbent shall received in the future."
[A]nd such other additional compensation not otherwise specified herein as may be determined by the DBM shall be deemed included in the standardized salary rates herein prescribed;"while the second sentence of Section 12 is to the following effect:
"Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized."Before proceeding to rule on the proper interpretation of the two provisos aforecited, the salient features of the provision as a whole should first be pondered upon and tackled.
(1) representation and transportation allowances (RATA);Analyzing No. 7, which is the last clause of the first sentence of Section 12, in relation to the other benefits therein enumerated, it can be gleaned unerringly that it is a "catch-all proviso." Further reflection on the nature of subject fringe benefits indicates that all of them have one thing in common - they belong to one category of privilege called allowances which are usually granted to officials and employees of the government to defray or reimburse the expenses incurred in the performance of their official functions. In Philippine Ports Authority vs. Commission on Audit,[8] this Court rationalized that "if these allowances are consolidated with the standardized rate, then the government official or employee will be compelled to spend his personal funds in attending to his duties."
(2) clothing and laundry allowances;
(3) subsistence allowances of marine officers and crew on board government vessels;
(4) subsistence allowance of hospital personnel;
(5) hazard pay;
(6) allowance of foreign service personnel stationed abroad; and
(7) such other additional compensation not otherwise specified in Section 12 as may be determined by the DBM.
(1) RATA;In addition, sub-paragraph 5.5 of the same Implementing Rules provides for the other allowances/fringe benefits not likewise integrated into the basic salary and allowed to be continued only for incumbents as of June 30, 1989 subject to the condition that the grant of the same is with appropriate authorization either from the DBM, Office of the President or legislative issuances, as follows:
(2) Uniform and Clothing allowances;
(3) Hazard pay;
(4) Honoraria/additional compensation for employees on detail with special projects or inter-agency undertakings;
(5) Honoraria for services rendered by researchers, experts and specialists who are of acknowledged authorities in their fields of specialization;
(6) Honoraria for lectures and resource persons or speakers;
(7) Overtime pay in accordance to Memorandum Order No. 228;
(8) Clothing/laundry allowances and subsistence allowance of marine officers and crew on board GOCCs/GFIs owned vessels and used in their operations, and of hospital personnel who attend directly to patients and who by nature of their duties are required to wear uniforms;
(9) Quarters Allowance of officials and employees who are presently entitled to the same;
(10) Overseas, Living Quarters and other allowances presently authorized for personnel stationed abroad;
(11) Night differential of personnel on night duty;
(12) Per Diems of members of the governing Boards of GOCCs/GFIs at the rate as prescribed in their respective Charters;
(13) Flying pay of personnel undertaking aerial flights;
(14) Per Diems/Allowances of Chairman and Members or Staff of collegial bodies and Committees; and
(15) Per Diems/Allowances of officials and employees on official foreign and local travel outside of their official station.
(1) Rice Subsidy;On the other hand, the challenged financial incentive is awarded by the government in order to encourage the beneficiaries to pursue further studies and to help them underwrite the expenses for the education of their children and dependents. In other words, subject benefit is in the nature of financial assistance and not of an allowance. For the former, reimbursement is not necessary while for the latter, reimbursement is required. Not only that, the former is basically an incentive wage which is defined as "a bonus or other payment made to employees in addition to guaranteed hourly wages"[9] while the latter cannot be reckoned with as a bonus or additional income, strictly speaking.
(2) Sugar Subsidy;
(3) Death Benefits other than those granted by the GSIS;
(4) Medical/Dental/Optical Allowances/Benefits;
(5) Children's Allowances;
(6) Special Duty Pay/Allowance;
(7) Meal Subsidy;
(8) Longevity Pay; and
(9) Teller's Allowance.