MANILA INTERNATIONAL AIRPORT AUTHORITY, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT, CECILIO BAUTISTA, FLORENCIO MONTALBO, LILIA DIAZ, OSCAR ACAL, MA. CRISTINA PORTIA MOJICA…

This is a petition for certiorari under Rule 65 of the
Revised Rules of Court with prayer for preliminary injunction or restraining
order, to reverse and set aside the Decision No. 2142 dated July 1, 1991 of the
Commission on Audit (COA) in “RE: Appeal of Mr. Eduardo O. Carrascoso,
General Manager, Manila International Airport Authority (MIAA), from the
disallowance of the ‘excess’ RATA paid by
MIAA to its officials/employees for the period July 1989 to June 1990
amounting to P1,215,947.96.” Said decision affirmed the disallowance in
audit by the MIAA Resident Auditor of the amount of P1,215,947.96 representing
the excess representation and transportation allowances (RATA) paid to certain
MIAA officials and employees.

I

Petitioner MIAA is a government-owned and controlled corporation
for the purpose, among others, of encouraging and promoting international and
domestic air traffic in the Philippines as a means of making the Philippines a
center of international trade and tourism and accelerating the development of
the means of transportation and communications in the country (E.O. No. 298, as
amended by E.O. No. 903).

In accordance with the Letter of Implementation (LOI) No. 97,
specifically Section 5.4(g) thereof, petitioner granted to its Department and
Division Managers an increase in their RATA benefits equivalent to 40% of their basic salary.

Pursuant to R.A. No. 6758, otherwise known as the
“Compensation and Position Classification Act of 1989,” which took
effect on July 1, 1989, petitioner
adjusted the RATA for the months of July 1989 to June 1991 of its Department
and Division Managers to 40% of the standardized salary rates. The adjustment involved the total amount of
P1,215,947.96.

On September 12, 1990, MIAA Resident Auditor served a Formal
Notice of Disallowance of RATA paid to MIAA officers on the ground that said
payment was excessive because the same had been increased to 40%, based on
their basic salary effective July 1, 1989, which was in violation of R.A. No.
6758, Corporate Compensation Circular
(CCC) No. 10 and COA Memorandum 90-653. Furthermore, the Resident Auditor opined that petitioner should pay its
employees only the RATA based on the highest amount being received by the
incumbents as of June 30, 1989, which was 40% of the basic pay prior to the
salary standardization or at the equivalent rates prescribed under the General
Appropriations Act for 1989.

In denying petitioner’s motion for reconsideration, the Resident
Auditor contended that LOI No. 97, granting RATA at 40% based on the maximum
ceiling of the basic pay of the MIAA officials, was inconsistent with R.A. No.
6758 as implemented by CCC No. 10, and that said provision was amended or
modified pursuant to the repealing clause under R.A. No. 6758.

On July 17, 1991, the COA rendered its decision, the dispositive
portion of which reads:

“ACCORDINGLY, the Commission upholds the action of the MIAA Auditor
disallowing in audit the amount of P1,215,947.96 in excess’ RATA” (Rollo,
p. 11).

Hence, this petition.

The MIAA officials, whose RATA benefits were affected by the
disallowance, intervened as petitioners.

Petitioner and the petitioners-in-intervention, raise the
following issues:

1

WHETHER OR NOT LOI NO. 97, DATED AUGUST 31,
1979 IS INCONSISTENT WITH, AND THEREFORE HAS BEEN REPEALED BY SECTION 22 OF R.A. No. 6758.

2

WHETHER OR NOT THE GRANT OF RATA AND RATA
ADJUSTMENTS TO PRIVATE PETITIONERS BASED
ON THE MAXIMUM CEILING OF 40% OF THEIR BASIC SALARY AUTHORIZED UNDER SECTION
5(g) OF LOI NO. 97, IS VALID, WHEN THE SAME WERE GRANTED, “AFTER JUNE 30,
1989, THE DATE OF EFFECTIVITY OF R.A. NO. 6758 (SALARY STANDARDIZATION
LAW)” AND, ACCORDING TO RESPONDENT COA,
SHOULD THEREFORE BE BASED “ON THE HIGHEST AMOUNT OF RATA RECEIVED BY THE
INCUMBENT AS OF JUNE 30, 1989.”

3

ON THE WHOLE, WHETHER OR NOT RESPONDENTS
ARE IN EFFECT PRIVIES TO THE PREJUDICIAL STATUTORY AMENDMENTS HEREIN COMMITTED, THROUGH EXECUTIVE
LEGISLATION, TANTAMOUNT TO USURPATION OF LEGISLATIVE FUNCTION, THUS, A GROSS VIOLATION OF THE CONSTITUTIONAL PRINCIPLE
REGARDING GOVERNMENTAL SEPARATION OF POWERS.

II

Petitioners contend that LOI No. 97, particularly Section 5(g)
thereof, was not repealed by Section 22 of R.A. No. 6758. They cite Opinion Nos. 68 and 108 of the
Government Corporate Counsel.

Opinion No. 68 dated
March 23, 1990 answers the query posed by the Metropolitan Waterworks and
Sewerage System (MWSS), a government-owned and controlled corporation, as to
whether or not the RATA authorized under LOI No. 97 may be increased or
adjusted to a maximum of 40% of the
basic pay despite the passage of R.A. No. 6758. On the other hand, Opinion No. 108 dated May
11, 1990 clarified the question raised
by the Local Water Utilities Administration (LWUA), also a
government-owned and controlled corporation, as to whether or not the 40% RATA
of the managerial employees of LWUA be based on their respective standardized
salaries retroactive to July 1989 as provided under R.A. No. 6758.

To both queries, the Office of the Government Corporate. Counsel in its Opinion No. 68 answered in
the affirmative and stated that:

“xxx except for Sections 2 and 15 of
PD 985 which are expressly repealed, all other laws, decrees and issuances or
parts thereof authorizing the fixing of positions, salaries and allowances of
government officials and employees shall be deemed repealed only if these are inconsistent
with the provisions of R.A. No. 6758. Section 5(g) of LOI 97 is not inconsistent
with R.A. No. 6758 as precisely, this is the basis for the RATA which is
continued to be authorized under Section 12 of said law. To construe otherwise would render
ineffective said section, as before the RATA is allowed to continue, there must
be a previous law, granting the same in the first place. Moreover, the statement in Section 5.4.1 of
Corporate Compensation Circular No. 10 that incumbents are allowed to receive
RATA “at the highest amount legally authorized
as of June 30, 1989” in effect results in the incorporation
by reference of all laws, decrees and rules defining the maximum amount of RATA
that employees and officials of government corporations may receive”
(Rollo, pp. 58-59).

and in Opinion No. 108, it stated that:

“’(if) the implementation of the said RA (6758) abrogates or
decreases the said RATA of LWUA officers which they receive pursuant to LOI No.
97, (the same) would run counter to the object of said RA.’

On the basis of said opinion, we so hold that the concerned LWUA
officers are entitled to a RATA of 40% of their basic salary under the salary
standardization law” (Rollo, pp. 60-61).

Respondent COA is of the view that LOI No. 97 has been repealed
by Sections 12 and 22 of R.A. No. 6758. Furthermore, it maintains that R.A. No. 6758 practically embraces the
entire subject matter on compensation and position classification covered in LOI No. 97.

The first paragraph of Section 12 of R.A. No. 6758 provides:

“Consolidation of Allowances and Compensation.
– All allowances, except for representation and transportation allowances;
clothing and laundry allowances; subsistence allowance of marine officers and
crew on board government vessels and hospital personnel; hazard pay; allowances
of foreign services personnel stationed abroad; and such other additional
compensation not otherwise specified herein as may be determined by the DBM,
shall be deemed included in the standardized salary rates herein
prescribed. Such other additional
compensation, whether in cash or in kind,
being received by incumbents only as of
July 1, 1989 not integrated into the
standardized salary rates shall continue to
be authorized (Underscoring supplied).

Under the second sentence of the aforementioned provision, such
other compensation includes the RATA. Hence, RATA, being received by incumbents as of July 1, 1989 are
entitled to continue to receive the same. Republic Act No. 6758 has
therefore, to this extent, amended LOI No. 97. By limiting the benefit of the RATA granted by LOI No. 97 to incumbents, Congress has manifested its intent to
gradually phase out this RATA privilege under LOI No. 97 without upsetting its policy of non-diminution of pay
(Philippine Ports Authority v. Commission on Audit, 214 SCRA 653 [1992]).

With regard to the question as to what is the basis of the RATA to be given to incumbents after
July 1, 1989, petitioners contend that according to LOI No. 97 they are
entitled to RATA equivalent to
40% of their basic salary. With the
effectivity of R.A. No. 6758, the 40% must be adjusted based on the
standardized salary.

Respondent COA, however, alleges that starting July 1, 1989, the
RATA is no longer based on 40% of the basic salary but on the highest amount of
RATA received by the incumbents as of June 30, 1989.

This issue has been answered in Philippine Ports
Authority v. Commission on Audit, supra,
where we held:

“The resolution of this issue involves the proper
interpretation of the second sentence of Section 12, first paragraph:

Such other additional compensation, whether in cash or in kind,
being received by incumbents as of July 1, 1989 not integrated into the
standardized salary rates shall continue to be authorized.

The DBM and the respondents construed July 1, 1989 as a cut-off
date. According to them the highest
amount the officials are receiving as of July 1, 1989 shall be the amount that
shall continue to be authorized.

We disagree to the foregoing interpretation and rule for the
petitioners. The date July 1, 1989 does
not serve as a cut-off date with respect to the amount of RATA. The date July 1, 1989 becomes crucial only
to determine that as of said date, the officer was an incumbent and was
receiving the RATA, for purposes of entitling him to its continued grant. The given date should not be interpreted as
fixing the maximum amount of RATA to
be received by the official.”

WHEREFORE, the petition is GRANTED. The disallowance in the amount of
P1,215,947.96 representing “excess” payment of RATA for July 1989 to
June 1990 is SET ASIDE.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, Bidin, Regalado, Davide,
Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, and Mendoza, JJ., concur.

Feliciano, J., on leave.