The Supreme Court (SC) has affirmed the 2015 and 2019 rulings of the Commission on Audit (COA) which ordered the officials and employees of Philippine Health Insurance Corporation (PhilHealth) in Region VIII to return to the government the P56.5 million they unlawfully received as benefits and allowances in 2012.
Among the benefits and allowances given to PhilHealth personnel in Region VIII were for shuttle service, birthday gift, laundry allowance, Christmas package, gratuity gifts, productivity incentive allowance, special events gifts and educational assistance.
On May 13, 2013, COA’s Corporate Governance Sector (GSC) issued the notice of disallowance which was upheld all the way up to COA’s Commission Proper (COA-CP). PhilHealth challenge the ruling before the SC.
In dismissing PhilHealth’s petition, the SC said: “Petitioner (PhilHealth) offers no justifiable reason to award its officers and employees with such allowances, other than its fiscal autonomy.”
The SC said “there was no showing that the subject benefits and allowances had proper legal basis, nor was it denied based on a mere procedural infirmity; neither was it amply demonstrated that there was a clear, direct, and reasonable connection to the work performed by petitioner's officers and employees.”
On the return of the unlawfully received benefits and allowances, the SC said: “This Court is not persuaded that undue prejudice would result in requiring the recipients to return the disallowed amounts; rather, it would be increasingly prejudicial to the government if its public coffers would be depleted by reason of disbursements done in contravention to law and jurisprudence.”
At the same time, the SC said “there is no genuine justification to warrant the application of social justice and humanitarian considerations. ‘A monetary grant that contravenes the unambiguous letter of the law cannot be forgone on social justice considerations.’”
In its justification, PhilHealth claimed that the grant of benefits and allowances was lawful under its fiscal autonomy granted by Section 16(n)10 of Republic Act No. 7875, the PhilHealth law.
It also claimed that its fiscal independence was twice confirmed in 2006 and 2008 by then President Gloria Macapagal Arroyo. It added that the allowances and benefits were given in good faith following guidelines and with approval of PhilHealth’s board of directors.
Thus, it said, its officials and employees who received the amounts cannot be held liable for refund.
But the SC – in a full court decision written by Associate Justice Jhosep Y. Lopez and made public last April 18 – said:
“Regardless of such legislative grant, this Court cannot subscribe to petitioner's myopic view that this statute should not be taken in consonance with other laws, nor should it be understood as an exception to RA No. 6758 (Compensation and Position Classification Act of 1989).
“It must be stressed that nowhere on the face of RA 7875 does it mention that petitioner's power to fix compensation and benefit schemes should be read in isolation to existing laws which have laid down the prevailing standards pertaining to compensation and position classification of government employees.
“Corollarily, neither may petitioner find succor in its assertion that its fiscal autonomy was confirmed by the opinions of the OGCC (Office of the Government Corporate Counsel), as well as executive communications from then President GMA.
“Aside from the obvious fact that the OGCC opinions have no controlling force and effect in the face of established legislation and jurisprudence, an examination of the communications from President GMA would reveal that the same pertain merely to the approval of petitioner's Rationalization Plan, without any indication of her confirmation regarding petitioner's fiscal independence.
“This Court, in PhilHealth v. Commission on Audit (2016 decision), was categorical in ruling that Section 16(n) of RA 7875, while granting petitioner the liberty to fix compensation of its personnel, does not necessarily mean that it has unbridled discretion to issue any and all kinds of allowances, circumscribed only by the provisions of this charter.
“All told, there was no grave abuse of discretion on the part of the respondent (COA) in disallowing the payment of the subject benefits and allowances.
“WHEREFORE, premises considered, the Petition for Certiorari of Philippine Health Insurance Corporation is DISMISSED. The COA Decision No. 2015-421 dated December 28, 2015 and the Resolution dated September 19, 2019, affirming the Notice of Disallowance No. 2013-01(12), are AFFIRMED WITH MODIFICATION, to wit:
“The approving officers, namely: Atty. Jerry F. Ibay, Walter R. Bacareza, Renato I. Limsiaco, Jr., and Arian M. Granali, are held solidarily liable to return the disallowed amount under Notice of Disallowance No. 2013-01(12) dated May 13, 2013;
“The certifying officers, namely: Archimedes L. Villasin, Benjamin N. Gabrieles, Jr., and Chona J. Solarta, are held not solidarily liable in their official capacity to refund the disallowed amount.
“The recipients, including the approving/certifying officers who had received portions of the disallowed amount, are ORDERED to REFUND the amount they received in connection therewith. SO ORDERED.”