MANUEL ALBA, AS MINISTER OF THE BUDGET, AND JESUS AZURIN, AS MINISTER OF HEALTH, PETITIONERS, VS. FRANCISCO A. PEREZ, AND HON. DANIEL C. MACARAEG, AS PRESIDING JUDGE, REGIONAL T…

Petitioners appeal to Us by way of
petition for review by certiorari from the decision rendered by
respondent judge^[1]
granting the petition for mandamus filed
by Dr. Francisco A. Perez, City Health Officer of San Pablo City, the dispositive
portion of which reads:

“WHEREFORE, premises considered, judgment is hereby rendered,
ordering the respondent Minister of the Budget to issue the corresponding cash
disbursement ceiling and to release the
necessary allotment for the
payment of petitioner’s two step merit salary increase since January
1, 1981, and the
respondent Minister of Health to integrate petitioner’s two step merit salary
increase to his basic salary.

“Without
pronouncement as to costs.” (p. 49, Rollo)

Respondent Dr. Francisco A. Perez was named outstanding Health
Worker for 1980 by the Ministry of Health on January 22, 1981. 
Being such an awardee, Dr. Perez was granted
by the Ministry of Health a two-step salary increase in accordance with the
merit increase program as enunciated in Letter of Instructions (LOI) No.
562.  Thereafter, the Ministry of Health
requested the Sangguniang Panglunsod of San
Pablo City, which is paying Dr. Perez’ salary in
full to appropriate the amount corresponding to the merit increase in its current budget.  For lack of legal basis, the Bureau of Local
Government opposed the proposed merit increase because the provisions of LOI
No. 562 apply only to officials/employees in the national government, and consequently, awardee
Dr. Perez was not entitled thereto, since he is an employee of the local
government as provided for in the charter of San Pablo City.  This
prompted Dr. Perez to request the Ministry of Health to make the corresponding
allocation to issue a notice of salary adjustment effective January
1, 1981.  The Minister of Justice, upon a query made by
the Ministry of Health, in his Opinion No. 177, Series of 1981, dated November
20, 1981, acknowledged that the merit increase program applies only to the
officials/employees of the national government but declared Dr. Perez as one such official or employee and
concluded that the Ministry of Health should pay the merit increase to
him.  Relying on such opinion, the
Ministry of Health issued to respondent Dr. Perez on December 1, 1981 a notice of salary adjustment
which release of the amount was denied by the Office of the Budget and
Management which insisted that the awardee is an
employee of the local or city government who is not covered by the merit
increase program.  Dr. Perez made his
appeal therefrom to the Ministry of Health who forwarded
it, recommending favorable action thereon to the Office of the President of the
Philippines.  The latter referred the appeal to the
Minister of the Budget who affirmed his earlier decision of disallowing the
merit increase and reiterating the same reasons. A petition for mandamus
to compel the Office of the Budget and Management to pay the merit increase was
filed by Dr. Perez before the lower court which granted the aforementioned
favorable decision, subject matter of the present petition for review on certiorari
before Us by petitioners arguing that:

1.  The position of private
respondent as the City Health Officer of San Pablo City is embraced in Sec. 7
of Pres. Decree (P.D.) No. 1136 which states among other things that the salary
plan provided for in Sec. 8 of the same decree shall cover the City Health
Officer, among other officials, whose salary shall be paid out of city funds
and therefore a local government employee whose position does not appear in the
list of national government employees
defined under another law (P.D. 985).

2.  The constitution
provides that no money shall be paid out of the Treasury except in pursuance of
an appropriation made by law.  Since
there is no such appropriation, the Minister of the Budget cannot be compelled
to release the amount for the payment of the merit salary increase because such
allocation entails the exercise of judgment and discretion of the Minister of
the Budget which cannot be controlled by mandamus.

3.  The decision declaring
respondent Dr. Perez as an employee of the national government would have far
reaching effects such that all other city health officers and local officials
similarly situated would also be so entitled to all personal benefits given to
national employees.  Dr. Perez’s exemplary
accomplishment which merited for him the grant to a two-step increase must
yield to the overriding economic consideration of availability of funds which
the government must set aside for the purpose.

We do not agree with the arguments set down by petitioners.  Private respondent invites Our attention to
the City Charter of San Pablo City (CA #520, Sec. 87, May 7, 1940) more
specifically, Art. IV thereof, which provides that the
position of a City Health Officer is not included among the heads of the
regular departments of the city but included among the national officials
performing municipal functions under the direct control of the Health Minister
and not the city mayor as provided for In Art. XIV of
the same charter.  Such principle
is reiterated in the Decentralization Act of 1967 which shows that the
appointing authority is the Health Minister and not the local officials.  Petitioner Minister of the Budget admitted
thru the testimony of its representative, Alice S. Torres, chief of the
Compensation and Position Classification and a specialist thereon that the City
Health Officer is under the
administrative and technical supervision of the Ministry of Health (p. 69, tsn, June 16, 1983, p. 72, Rollo).  Be it noted that, Section 7 of PD 1136 relied
upon by petitioners provides that the basic salary of the City Health Officer
is paid from city funds.  However the
last paragraph of the same Sec. 7 excludes the city health officer from the classification of local government official as can be gathered from
the phrase “x x x except those occupied by (a) officials whose
compensation is fixed in the constitution, Presidential Decrees and other laws
and (b) officials and employees who are under the direct supervision and
control of the National Government or its agencies and who are paid wholly or
partially from national funds.”

Provincial and city health officers are all considered national
government officials irrespective of the source of funds of their salary
because the preservation of health is a national service.  Also their positions are partially funded by
the national government.  Some are
receiving one-half of their salary from the national funds and the other
one-half from local funds.  Others are
wholly paid by either the local or the national government.

Private respondent Dr. Perez is a career official of the Ministry of Health and not of San
Pablo.  Promotions
in the Ministry are covered by a Merit Promotion Plan of post-graduate studies
and academic qualifications, extensive training, experience, and highly satisfactory
performances.  This program is a
budgetary innovation which is restrictive and selective in nature.  Dr. Perez was the only one who qualified
under the program for the whole Region IV of the Ministry of Health in
1980.  Inclusion of such position in
local compensation plan of local government will certainly destroy this career
pattern which is based on national not local or political expediency.  Likewise, the Ministry of Health is the one
agency vested with the power and authority in implementing the merit program in
this particular case wherein the record shows the grant of the merit award
because of the outstanding accomplishment and performance of Dr. Perez, and
thru his introduction of rehydrating solutions like oresol in the treatment of diarrhea and also the use of
herbal medicine, enabling the government to save millions of pesos which could
be used to purchase costly antibiotics. 
This undisputable fact answers the argument of petitioners that the
grant to Dr. Perez must yield to the overriding economic consideration of
availability of government funds purposely set aside because under the
circumstances, Dr. Perez is truly
deserving of a merit increase.

We cannot likewise ignore the opinions of the Ministry of Justice
cited by private respondent to wit:  1)
Opinion No. 26, Series of 1976 which categorically rules that “Officials and
employees of provincial and city health offices render service as officials and
employees of the Bureau of Health (Ministry of Health) and they are for that
reason not local but national officials under the direct supervision and
control of the Ministry of Health; 2) Opinion No. 177, Series of 1981, which is
specific and definitive that the private respondent is a national government
employee and the Ministry of Health should pay the merit increase awarded to
him.  In this 1981 opinion, it was
explained in detail how the said funds corresponding to his merit increase
could be legally disbursed contrary to the unfounded speculations expressed by
the petitioners.

Lastly, there is no basis in petitioner’s allegations that they
cannot be compelled by mandamus as the appropriation is not authorized
by law and it is discretionary on the part of the Ministry of the Budget
whether or not to allocate.  Respondent
Dr. Perez has been proven to be a national government official, hence covered
by the merit promotion plan of the government more particularly the Health
Ministry wherein private respondent
is its lone beneficiary for the year 1980 in Region IV.  It thus becomes the ministerial duty of the
Budget Minister to approve the request for allotment.  Having failed to do so, he could be compelled
by mandamus.

WHEREFORE, the instant petition is hereby DENIED.

SO ORDERED.

Yap, (Chairman), Melencio-Herrera,
Padilla, and Sarmiento,
JJ., concur.

^[1] Judge Daniel C. Macaraeg,
Br. LV, Manila, in Case No. 82-11379.