GR 162224; (June, 2007) (Digest)
G.R. No. 162224 , June 7, 2007
2nd LT. SALVADOR PARREÑO represented by his daughter Myrna P. Caintic, petitioner, vs. COMMISSION ON AUDIT and CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, respondents.
FACTS
Petitioner Salvador Parreño, a retired 2nd Lieutenant of the Armed Forces of the Philippines (AFP), received a lump sum pension and subsequent monthly pensions after his 1982 retirement. In 2001, the AFP terminated his monthly pension upon learning he had become a naturalized American citizen, citing Section 27 of Presidential Decree No. 1638, as amended, which mandates the termination of retirement benefits upon loss of Filipino citizenship.
Parreño filed a money claim with the Commission on Audit (COA) seeking the continuance of his pension. The COA denied the claim, stating it lacked jurisdiction to rule on the constitutionality of Section 27 of P.D. 1638, which was the core issue. The COA held that the power to declare a law unconstitutional rests with the judiciary. Parreño moved for reconsideration, arguing the COA could incidentally rule on the law’s validity and that exhaustion of administrative remedies required a COA ruling first.
ISSUE
The primary issue is whether the COA has jurisdiction to rule on the constitutionality of a law, specifically Section 27 of P.D. 1638, as amended, in the course of adjudicating a money claim.
RULING
The Supreme Court ruled that the COA correctly dismissed the money claim for lack of jurisdiction. The Court explained that the COA’s constitutional mandate and statutory authority are limited to the examination, audit, and settlement of government accounts. While it has jurisdiction over money claims against the government, this power does not encompass the authority to pass upon the constitutionality of laws.
The power of judicial review—the authority to declare a law, treaty, or regulation unconstitutional—is vested by the 1987 Constitution exclusively in the Supreme Court and all Regional Trial Courts. Since Parreño’s claim was fundamentally a challenge to the constitutionality of Section 27 of P.D. 1638, the COA acted properly in deferring to the judiciary. The Court further clarified that the doctrine of exhaustion of administrative remedies does not apply when the administrative body, like the COA in this instance, lacks the requisite jurisdiction over the core issue from the outset. Therefore, the COA committed no grave abuse of discretion in its dismissal.