G.R. No. 242342 , March 10, 2020
NATIONAL POWER CORPORATION BOARD OF DIRECTORS MARGARITO B. TEVES, ROLANDO G. ANDAYA, JR., PETER B. FAVILA, ARTHUR C. YAP, ELEAZAR P. QUINTO, RONALDO V. PUNO, AUGUSTO B. SANTOS, AND FROILAN A. TAMPINCO, PETITIONERS, V. COMMISSION ON AUDIT, RESPONDENT.

FACTS

On September 10, 2009, the Board of Directors of the National Power Corporation (NPC), composed of several Cabinet Secretaries serving as ex officio members, approved Board Resolution No. 2009-52. This resolution authorized the payment of an Employee Health and Wellness Program and Related Financial Assistance (EHWPRFA) of P5,000.00 monthly to qualified NPC officials and employees. The Commission on Audit (COA) issued a Notice of Disallowance for the payments made in the first quarter of 2010, amounting to P27,715,000.00, on the ground that the grant was a new benefit requiring the President’s prior approval. The COA proper upheld the disallowance. The NPC Board filed a Petition for Certiorari, arguing that the doctrine of qualified political agency (alter ego doctrine) applied, as the Board consisted of Cabinet secretaries whose actions were presumptively the President’s acts, thus making prior approval unnecessary.

ISSUE

Whether the doctrine of qualified political agency applies to the acts of Cabinet secretaries performed in their capacity as ex officio members of the NPC Board of Directors, thereby exempting the grant of the EHWPRFA from the requirement of the President’s prior approval.

RULING

No. The doctrine of qualified political agency does not apply to acts performed by Cabinet secretaries in connection with their position as ex officio members of a board. The doctrine, which treats department heads as the President’s alter egos for acts performed in their executive capacities, is based on practical necessity and the President’s multifarious functions. However, when Cabinet members sit on a board like the NPC Board, they do so ex officio by direct provision of law (specifically Section 48 of Republic Act No. 9136 , the Electric Power Industry Reform Act of 2001), not by virtue of a direct appointment or delegation of power by the President. Their authority in that board is derived from the law, not from the President’s executive power. Therefore, their actions as board members are not covered by the alter ego doctrine and do not carry the presumption of being the President’s acts. Consequently, the grant of the EHWPRFA, being a new benefit, required the President’s prior approval, and its absence justified the COA’s disallowance.