Philippine Supreme Court Resolutions > Year 2011 > March 2011 Resolutions > [G.R. No. 154799 : March 15, 2011] NORMITA PALMA, JOSEPH ILAGAN AND OTHER BANGKO SENTRAL EMPLOYEES SIMILARLY SITUATED V. COMMISSION ON AUDIT AND BANGKO SENTRAL NG PILIPINAS :

Please take notice that the Court en banc issued a Resolution dated March 15, 2011, which reads as follows: 

"G.R. No. 154799 (Normita Palma, Joseph Ilagan and other Bangko Sentral Employees similarly situated v. Commission on Audit and Bangko Sentral ng Pilipinas); G.R. No. 154800 (Cynthia G. Alferez and Luz G. Pangonoron v. Commission on Audit and Bangko Sentral ng Pilipinas); G.R. No. 155054 (Bangko Sentral ng Pilipinas v. Commission on Audit).

RESOLUTION 

Petitioners Normita Palma, Joseph Ilagan, Cynthia Alferez, and Luz Pangonoron represent a group of rank-and-file employees (in G.R. 154799 and 154800, respectively) of petitioner Bangko Sentral ng Pilipinas (BSP [in G.R. 155054]) that occupied positions of various salary grades (SG) from SG 19 and below. The BSP hired them after October 31, 1989. On July 5, 1999 the BSP gave these employees various benefits^[1] pursuant to Monetary Board (MB) Resolution 918 of the same date.

But the BSP Corporate Auditor issued Notice of Disallowance 2000-02-02 (99) dated February 18, 2000, disallowing the payment of the benefits mentioned on the ground that these violated Republic Acts (R.A.) 6758^[2] and 7653.^[3] The Notice also ordered the officers and employees to return such benefits as they may have already received. The Corporate Auditor ruled that, since the recipients were employees covered by the Salary Standardization Law, the grant to them of additional benefits outside of those allowed by law were illegal. Both the concerned employees and the BSP sought reconsideration of the disallowance.

Acting on the request for reconsideration, the Auditor recommended the lifting of the disallowance. She found that the grant of benefits authorized under MB Resolution 918 was in the exercise of BSP's fiscal and administrative autonomy and that the Department of Budget and Management (DBM) Corporate Compensation Circular 10^[4] violated the equal protection clause. But, as it happened, in a Memorandum dated April 24, 2000, the Director of Corporate Audit Office I of the Commission on Audit (COA) denied the BSP Auditor's recommendation, necessitating an automatic review of the case by the COA itself.

On June 19, 2001 the COA rendered COA Decision 2001-107, affirming the disallowance of the audit payment. Both the concerned employees and the BSP moved for reconsideration of the decision but the COA denied it through COA Decision 2002-171 dated August 20, 2002. This prompted the employees and the BSP to institute the present petitions for review.^[5]

The core issue in these cases is whether or not the COA validly disallowed the benefits that the BSP granted the subject employees.

During the pendency of these consolidated cases, the Court en bane decided the case of Central Bank (now Bangko Sentral ng Pilipinas) Employees Association, Inc. v. Bangko Sentral ng Pilipinas.^[6] The Court there declared that Section 15(c) of R.A. 7653, insofar as it held that employees occupying SG 19 and below were covered by the Salary Standardization Law, unconstitutional because the proviso violated the equal protection clause.

The declaration of unconstitutionality of Section 15(c) has rendered moot and academic the issue presented in these cases.

WHEREFORE, the Court DISMISSES the petitions in these cases on ground of mootness."

Nachura and Brion, JJ., on official leave.

Very truly yours,

(Sgd.) ENRIQUETA E. VIDAL
Clerk of Court 

Endnotes:

---

^[1] These benefits include: (1) Rice Subsidy; (2) Death Benefits other than those granted by GSIS; (3) Children Allowance; (4) Meal Subsidy and (5) Longevity Pay.

^[2] "Compensation and Position Classification Act of 1989" [Salary Standardization Law] 

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. (Underscoring supplied) 

x 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 to as transition allowance. The transition allowance shall be reduced by the amount of salary adjustment that the incumbent shall receive in the future.

^[3] The New Central Bank Act. Section 15. Exercise of Authority. x x x

A compensation structure based on job evaluation studies and wage surveys and subject to the Board's approval, shall be instituted as an integral component of the Bangko Sentral's human resource development program: Provided, That the Monetary Board shall make its own system to conform as closely as possible with the principles provided for under Republic Act No. 6758: Provided, however. That compensation and wage structure of employees whose positions fall under salary grade 19 and below shall be in accordance with the rates prescribed under Republic Act No. 6758. (Underscoring supplied)

^[4] The Implementing Rules and Regulations of R.A. 6758.

^[5] In a Resolution dated March 25, 2003, the Court en banc resolved to consolidate all three petitions.

^[6] 487 Phil. 531 (2004).