G.R. No. 251824, November 29, 2022
PETER B. FAVILA, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

Petitioner Peter B. Favila, then Secretary of the Department of Trade and Industry (DTI), served as an ex-officio member of the Board of Directors (BOD) of the Trade and Investment Development Corporation of the Philippines (TIDCORP) from 2008 to 2010. From 2005 to 2007, TIDCORP’s BOD approved resolutions granting various monetary benefits (productivity enhancement pay, developmental contribution bonuses, corporate guaranty, grocery subsidy, and anniversary bonuses) to its board members and their alternates. On July 13, 2012, the COA Audit Team issued Notice of Disallowance (ND) No. 2012-001, disallowing a total of PHP 4,539,835.02 in benefits granted to TIDCORP’s Board members from January 1, 2005 to December 31, 2010. The disallowance was based on Section 8, Article IX-B of the 1987 Constitution, prohibiting additional compensation unless authorized by law, as the benefits constituted double compensation for ex-officio members. Favila was held liable for PHP 454,598.28 received from October 2008 to May 2010. TIDCORP appealed, arguing that its charter (RA 8494) granted the BOD exclusive power to fix remuneration and that the disallowance violated due process for lack of a prior Notice of Suspension. The COA Corporate Government Sector and the COA Proper denied the appeals, affirming the disallowance. The COA Proper also noted the appeal was filed beyond the reglementary period. Favila’s co-respondents challenged the COA decision in G.R. No. 253584 (Suratos), which was dismissed by the Supreme Court on March 1, 2022. Favila filed this petition, raising similar arguments.

ISSUE

Whether the COA acted with grave abuse of discretion in denying Favila’s petition for review and affirming ND No. 2012-001.

RULING

The petition lacks merit. The Supreme Court dismissed the petition, conforming to its ruling in G.R. No. 253584 (Suratos). The Court upheld the COA’s finding that Favila, as an ex-officio member of the TIDCORP Board, was entitled only to the per diem specifically authorized by law (PD 1080, as amended) and no other benefits. Receiving additional compensation violated the constitutional prohibition against double compensation, as his services were already compensated by his principal office (DTI). The Court cited Land Bank of the Philippines v. Commission on Audit and Civil Liberties Union v. Executive Secretary, reiterating that ex-officio positions are part of the principal office and no additional compensation is allowed unless specifically authorized by law. The Court also found that the grant of benefits failed to comply with Memorandum Order No. 20, s. 2001, requiring prior presidential approval for increases. Favila’s arguments of good faith and violation of due process were unavailing, as the Court had already settled these issues in Suratos.