G.R. No. 147392 ; March 12, 2004
BENEDICTO ERNESTO R. BITONIO, JR., petitioner, vs. COMMISSION ON AUDIT and CELSO D. GANGAN, CHAIRMAN OF THE COMMISSION ON AUDIT, respondents.

FACTS

Petitioner Benedicto Ernesto R. Bitonio, Jr., a Director IV in the Department of Labor and Employment (DOLE), was designated in 1995 as the DOLE representative to the Board of Directors of the Philippine Economic Zone Authority (PEZA) pursuant to Section 11 of Republic Act No. 7916 (the Special Economic Zone Act of 1995). This law authorized board members to receive per diems. From 1995 to 1997, petitioner received per diems for attending PEZA board meetings.
The Commission on Audit (COA) subsequently issued Notices of Disallowance for these payments, totaling P334,500. The COA’s uniform ground was that the Supreme Court, in Civil Liberties Union v. Executive Secretary, declared unconstitutional the holding of multiple offices and receipt of compensation by Cabinet members, their deputies, and assistants. The COA cited its Memorandum implementing a Senate Committee Report. Petitioner moved for reconsideration, arguing that the Civil Liberties Union ruling, as clarified, applied only to officials with the rank of Secretary, Undersecretary, or Assistant Secretary, and that R.A. No. 7916 , enacted later, provided legal basis for the per diems. The COA denied his motion.

ISSUE

Whether the COA correctly disallowed the per diems received by petitioner for his attendance in the PEZA Board of Directors’ meetings as the representative of the Secretary of Labor.

RULING

Yes, the COA correctly disallowed the payments. The Supreme Court affirmed the COA decision. The constitutional prohibition in Section 13, Article VII of the 1987 Constitution , as interpreted in the Civil Liberties Union case, explicitly forbids Cabinet members, their deputies, and assistants from holding any other office or employment during their tenure and receiving compensation therefor, unless otherwise provided by the Constitution. A “deputy or assistant” refers to officials of Cabinet rank, specifically Undersecretaries and Assistant Secretaries.
The Court held that petitioner, as the designated representative of the DOLE Secretary, effectively sat in the PEZA Board in the Secretary’s stead. Consequently, he was bound by the same constitutional prohibition applicable to the Secretary himself. He could not receive additional compensation for a function that was inherently part of the Secretary’s duties, which he performed by representation. The subsequent enactment of R.A. No. 8748 in 1999, which amended the PEZA law by specifying that Department Undersecretaries, not mere representatives, shall sit on the Board and notably deleting the per diem provision, reinforced the legislative intent to align with the constitutional prohibition. Therefore, petitioner was not entitled to the disallowed per diems.