PRA v. Buñag

PUNO, J.:

Before the Court is a Petition for Review on Certiorari involving alleged overpayment by the petitioner Philippine Retirement Authority (PRA) of certain benefits and allowances to its employees, particularly respondents herein. Petitioner PRA asks the Court to resolve the legal question of whether disbursements made by PRA of compensation, allowances and other benefits to its employees prior to the effectivity of R.A. No. 6758 or the Compensation and Position Classification Act of 19891 is subject to the review of the Department of Budget and Management. Petitioner PRA is a government-owned and controlled corporation created on July 4, 1985 under Executive Order No. 1037.2 PRA became operational on September 8, 1986.3 Private respondent Jesusito L. Buñag is the former deputy general manager of petitioner PRA while private respondent Erlina P. Lozada is the incumbent department manager of petitioner PRA.

As of July 1, 1989, in addition to their basic salaries, private respondents were each receiving from PRA the following allowances and benefits: a) Cost of Living Allowance (COLA), 40% of the basic salary; b) Amelioration Allowance, 10% of the basic salary; c) additional COLA, ₱300.00 a month; d) rice subsidy, ₱400.00 per month; e) meal subsidy, ₱525.00 a month; f) children allowance, ₱30.00 a month; and g) Representation and Transportation Allowance (RATA) in various amounts.4 In a letter dated December 29, 1992, the Office of the President, through then Executive Secretary Edelmiro A. Amante, Sr. approved the Corporate Operating Budget of petitioner PRA for calendar year 1992 in the amount of ₱25,288,091.00. In the same letter, the amount of ₱9,129,833.00 representing unjustified/unauthorized allowances, fringe benefits and other items was disallowed.5 In a letter dated February 1, 1993, PRA sought reconsideration from the Office of the President on the disallowances, in particular, the amount of ₱1,324,822.00 out of the ₱9,129,833.00 disallowed disbursements representing supposed over-provision and payment of benefits and allowances to PRA employees.

The amount of ₱1,324,822.00 is itemized as follows:6 a) Over-provision of RATA …..…………………….. ₱193,200.00 b) Transition Allowance ………………..…………... 611,454.00 c) Provision for Hospitalization ….………………… 100,000.00 d) Provision for Provident Fund Contribution 420,168.00 TOTAL