EDUARDO TAYLOR, PETITIONER, VS. PEDRO M. GIMENEZ, IN HIS CAPACITY AS AUDITOR GENERAL OF THE PHILIPPINES AND JUAN O. CHIOCO, IN HIS CAPACITY AS ADMINISTRATOR OF ECONOMIC COORDINA…

The petitioner, after about 30 years of service in the government,
the last being as manager, with an annual salary of P18,000.00, of the
Cebu Portland Cement Company, (vulgarly known as CEPOC), a government
corporation, was retired under the “Company Retirement Plan” on January
31, 1955. Prior to his retirement, the Board of Directors of the
Company passed on January 21, 1965 Resolution No. 734, granting the
petitioner a retirement pay under the said Plan equivalent to his one
year salary, and Resolution No, 735, granting, “as a special gesture of
appreciation for his long and efficient service, a bonus of P12,000.00
payable upon the effectivity of his retirement”, and appropriating a
sum for this purpose.

With the concurrence of the Auditor-General, the respondent
Administrator of Economic Coordination disapproved the latter
resolution (No. 735) on the following grounds:

(1) that the grant of an appreciation bonus to petitioner would
amount to a gratuity which is in excess of that allowed tinder Section
28(b) of Commonwealth Act No. 186, as amended; and

(2) that it would be an injudicious and extravagant expenditure of
corporate funds and would set a bad precedent for other government
corporations.

Answering the first objection, petitioner claims that the grant to
him of the appreciation bonus is not violative of Section 28(b) of
Commonwealth Act No. 186, as amended, which provides:

“(b) Hereafter no insurance or retirement plan for
employees shall be created by any employer without the prior approval
of the System; no gratuity or benefit may be paid by an employer to an
employee in excess of one month’s salary for every year of service or
in excess of one year’s salary in the aggregate; and no gratuity or
benefit shall be paid by an employer to an employee entitled to the
retirement benefit of this Act.”

because bonus, which is paid for some services or consideration, as distinguished from gratvity,
which is freely given, is not within the prohibition of said section.
As to the second objection, petitioner avers that the sum of P12,000.00
granted under Resolution No. 735 is a mere pittance compared with more
than 13 million pesos realized by the company from 1947 to 1953, not to
mention intangible profits in terms of employee morale, loyalty and
discipline, goodwill and business stability, through his skill,
competence and managerial capacity, and that the bonus would be an
incentive for greater dedications to service in accordance with the
modern trend of business.

The Solicitor General’s Office, in representation of the
respondents, admits the fact that the amount given the petitioner under
Resolution No. 735 is not a retirement pay, gratuity, or benefit,
intended by the Board of Directors of the CEPOC to be a part of the
petitioner’s retirement gratuity or benefit, but a bonus; and
that the indorsements of February 20, 1958 and July 28, 1960 of
respondent Auditor General assumed that the bonus in question was a
gratuity. The state contends that the two terms are not synonymous. But
they maintain that the Administrator of Economic Coordination properly
disapproved said Resolution No. 735 on the strength of Executive Order
No. 386, dated December 22, 1950, which provides that the Administrator
is “responsible to the President of the Philippines under whose control
his functions * * * shall be exercised.” The same Executive Order
further empowers the Administrator to:

“(b) supervise, as a vigilant stockholder,
corporations owned or controlled by the government—for the purpose of
insuring efficiency and economy in their operation and effective
accomplishments of the objectives for which they were created, and to
this end:

* * * * * * *

(2) pass upon new development programs of activities and annual and
supplemental budgets of income and expenditures approved” A by the
respective boards of directors of the said corporations.”

It is argued, further, that there being no showing that said
administrator’s disapproval of the resolution in question was altered
or reversed by the President, and that the petitioner is not entitled
as a matter of right to the appreciation bonus appropriated in said
resolution, the disapproval should be respected, and this Court has no
reason or justification for giving relief to the petitioner, said
action of the Administrator being an executive matter involving policy
that is beyond judicial competence to review. To these arguments, we
agree.

By virtue of Republic Act No. 422 (Reorganization Act of 1950), the
President of the Philippines issued Executive Order No. 386, dated
December 22,1950, creating the Office of Economic Coordination, and
Executive Order No. 399, dated January 5, 1951, entitled “Uniform
Charter for Government Corporations”, wherein were defined the powers
and duties of the Boards of Directors of government corporations, which
specifically include the CEPOC. Among the powers of the Boards therein
provided is—

“(c) To approve, subject to the final action of the Administrator of Economic Coordination,
the annual and/or such supplemental budgets of the corporation which
may be submitted to it by the General Manager from time to time.”
(Italics supplied)

The primary purpose 6f Republic Act 422 is to enhance efficiency and
economy in the operation of the government, including government-owned
corporations. The Administrator, having disapproved, on the grounds of
in judiciousness and extravagance, Resolution No. 735 of the Board of
Directors of the CEPOC, which is within his power to do, obviously to
carry into effect the laudable purpose of the reorganization law, this
Court has no authority to change, alter, or modify the course of action
taken by him in the exercise of his discretion, there having been no
showing of an abuse thereof.

Wherefore, the instant petition should be, as the same is hereby, dismissed. No costs.

Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes, and Dizon, JJ., concur.