G.R. No. 262193 , February 06, 2024
DEVELOPMENT BANK OF THE PHILIPPINES, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

On March 7, 2005, the Development Bank of the Philippines (DBP) issued Circular No. 10, authorizing the computation of the money value of leave credits (MVLC) of its officials and employees based on their “gross monthly cash compensation,” which included various allowances. The Commission on Audit (COA) issued Notices of Disallowance (NDs) from February to July 2007, covering payments from March to December 2005, on the ground that MVLC should be based on basic pay only. DBP sought reconsideration, arguing that then President Gloria Macapagal-Arroyo had subsequently approved DBP’s Compensation Plan, which allegedly included Circular No. 10. The COA Commission Proper (CP) partially granted DBP’s appeal in Decision No. 2018-197, affirming the disallowance but initially holding only approving officials liable. Upon DBP’s motion for reconsideration, the COA CP issued Decision No. 2022-072, modifying its earlier ruling to require even passive recipients to refund. DBP filed a petition for certiorari. In its July 11, 2023 Decision, the Supreme Court affirmed the disallowance with modification, absolving all identified persons from refund liability. The Court found DBP Circular No. 10 inconsistent with relevant rules, held that the Presidential approval of the Compensation Plan was invalid for being issued during the election ban period under the Omnibus Election Code, and ruled that the COA violated DBP’s right to speedy disposition of cases due to an 11-year delay in resolving the appeal and motion. DBP filed a Motion for Partial Reconsideration, arguing that the finding of a violation of the right to speedy disposition should result in the nullification of the NDs and that COA had no power to rule on the validity of the Presidential approval under the election law.

ISSUE

1. Whether COA Decision No. 2018-197 and Decision No. 2022-072 should be set aside on the ground of violation of DBP’s right to speedy disposition of cases.
2. Whether the COA committed grave abuse of discretion in ruling upon the validity of PGMA’s post facto approval of DBP’s Compensation Plan.

RULING

The Supreme Court GRANTED the Motion for Partial Reconsideration.
1. Yes, the COA Decisions are set aside. Conformably with the precedents in Navarro v. Commission on Audit and Rosario v. Commission on Audit, the Court held that the COA violated the constitutional right to speedy disposition of cases. The delay of 11 years in resolving DBP’s appeal and motion for reconsideration was inordinate and unjustified. The COA failed to prove that the delay was reasonable or not attributable to it. Consequently, the challenged COA Decisions are reversed and set aside, and DBP and its officials and employees are excused from any liability arising from the disallowed amounts.
2. The Court found it unnecessary to rule on the second issue. Having resolved the case on the ground of the violation of the right to speedy disposition of cases, which warranted the setting aside of the COA’s rulings, the Court deemed it unnecessary to pass upon the ancillary issue of whether the COA committed grave abuse of discretion in ruling on the validity of the Presidential approval under the Omnibus Election Code.