G.R. No.

125350 December 3, 2002

HON. RTC JUDGES MERCEDES G. DADOLE (Exec!"#e J$%e, &r'(c) 2*+,
ULR,C R. CA-ETE (.re/"$"(% J$%e, &r'(c) 25+,
AGUST,NE R. 0EST,L (.re/"$"(% J$%e, &r'(c) 51+,
HON. MTC JUDGES TEM,STOCLES M. &OHOLST (.re/"$"(% J$%e, &r'(c)
1+,
0,CENTE C. 2AN,LAG (J$%e De/"%('!e, &r'(c) 2+,
'($ 3,L2REDO A. DAGATAN (.re/"$"(% J$%e, &r'(c) 3+, '44 o5 M'($'e
C"!6, petitioners,
vs.
COMM,SS,ON ON AUD,T, respondent.
D E C I S I O N
CORONA, J.:
Before us is a petition for certiorari under Rule 64 to annul the decision
1
and
resolution

, dated Septe!"er 1, 1##$ and %a& ', 1##6, respectivel&, of the

respondent Co!!ission on (udit )CO(* affir!in+ the notices of the %andaue
Cit& (uditor ,hich di!inished the !onthl& additional allo,ances received "& the
petitioner -ud+es of the Re+ional .rial Court )R.C* and %unicipal .rial Court
)%.C* stationed in %andaue Cit&.
.he undisputed facts are as follo,s/
In 1#'6, the R.C and %.C -ud+es of %andaue Cit& started receivin+ !onthl&
allo,ances of 0 1,61 each throu+h the &earl& appropriation ordinance enacted
"& the San++unian+ 0anlun+sod of the said cit&. In 1##1, %andaue Cit&
increased the a!ount to 01,$11 for each -ud+e.
On %arch 1$, 1##4, the Depart!ent of Bud+et and %ana+e!ent )DB%* issued
the disputed 2ocal Bud+et Circular No. $$ )2BC $$* ,hich provided that/
34 4 4 4 4 4 4 4 4
.5.. In the li+ht of the authorit& +ranted to the local +overn!ent units
under the 2ocal 6overn!ent Code to provide for additional allo,ances
and other "enefits to national +overn!ent officials and e!plo&ees
assi+ned in their localit&, such additional allowances in the form of
honorarium at rates not exceeding P1,000.00 in provinces and cities and
P700.00 in municipalities may be granted su"-ect to the follo,in+
conditions/
a* .hat the +rant is not !andator& on the part of the 267s8
"* .hat all contractual and statutor& o"li+ations of the 267 includin+ the
i!ple!entation of R.(. 69$' shall have "een full& provided in the "ud+et8
c* .hat the "ud+etar& re:uire!ents;li!itations under Section 54 and 5$
of R.(. 9161 should "e satisfied and;or co!plied ,ith8 and
d* .hat the 267 has full& i!ple!ented the devolution of
functions;personnel in accordance ,ith R.(. 9161.
5
3 )italics supplied*
4 4 4 4 4 4 4 4 4
.he said circular li<e,ise provided for its i!!ediate effectivit& ,ithout need of
pu"lication/
3$.1 E==EC.I>I.?
.his Circular shall ta<e effect i!!ediatel&.3
(ctin+ on the DB% directive, the %andaue Cit& (uditor issued notices of
disallo,ance to herein petitioners, na!el&, @onora"le R.C Aud+es %ercedes 6.
Dadole, 7lric R. CaBete, (+ustin R. >estil, @onora"le %.C Aud+es .e!istocles
%. Boholst, >icente C. =anila+ and Cilfredo (. Da+atan, in e4cess of the a!ount
authoriDed "& 2BC $$. Be+innin+ Octo"er, 1##4, the additional !onthl&
allo,ances of the petitioner -ud+es ,ere reduced to 01,111 each. .he& ,ere
also as<ed to rei!"urse the a!ount the& received in e4cess of 01,111 fro! (pril
to Septe!"er, 1##4.
.he petitioner -ud+es filed ,ith the Office of the Cit& (uditor a protest a+ainst the
notices of disallo,ance. But the Cit& (uditor treated the protest as a !otion for
reconsideration and indorsed the sa!e to the CO( Re+ional Office No. 9. In turn,
the CO( Re+ional Office referred the !otion to the head office ,ith a
reco!!endation that the sa!e "e denied.
On Septe!"er 1, 1##$, respondent CO( rendered a decision den&in+
petitionersE !otion for reconsideration. .he CO( held that/
.he issue to "e resolved in the instant appeal is ,hether or not the Cit&
Ordinance of %andaue ,hich provides a hi+her rate of allo,ances to the
appellant -ud+es !a& prevail over that fi4ed "& the DB% under 2ocal Bud+et
Circular No. $$ dated %arch 1$, 1##4.
4 4 4 4 4 4 4 4 4
(ppl&in+ the fore+oin+ doctrine, appropriation ordinance of local +overn!ent
units is su"-ect to the or+aniDational, "ud+etar& and co!pensation policies of
"ud+etar& authorities )CO( $th Ind., dated %arch 19, 1##4 re/ 0rovince of
(nti:ue8 CO( letter dated %a& 19, 1##4 re/ Re:uest of @on. Renato 2eviste,
Con+. 1st Dist. Oriental %indoro*. In this re+ard, attention is invited to
(d!inistrative Order No. 4 issued on %arch 5, 1##5 "& the 0resident of the
0hilippines clarif&in+ the role of DB% in the co!pensation and classification of
local +overn!ent positions under R( No. 9161 visFavis the provisions of R( No.
69$' in vie, of the a"olition of the AC260(. Section 1 of said (d!inistrative
Order provides that/
3Section 1. .he Depart!ent of Bud+et and %ana+e!ent as the lead
ad!inistrator of R( No. 69$' shall, throu+h its Co!pensation and 0osition
Classification Bureau, continue to have the follo,in+ responsi"ilities in
connection ,ith the i!ple!entation of the 2ocal 6overn!ent Code of
1##1/
a* 0rovide +uidelines on the classification of local +overn!ent
positions and on the specific rates of pa& therefore8
"* 0rovide criteria and +uidelines for the +rant of all allo,ances and
additional for!s of co!pensation to local +overn!ent e!plo&ees8
444.3 )underscorin+ supplied*
.o operationaliDe the aforecited presidential directive, DB% issued 2BC No. $$,
dated %arch 1$, 1##4, ,hose effectivit& clause provides that/
4 4 4 4 4 4 4 4 4
3$.1 E==EC.I>I.?
.his Circular shall ta<e effect i!!ediatel&.3
It is a ,ellFsettled rule that i!ple!entin+ rules and re+ulations pro!ul+ated "&
ad!inistrative or e4ecutive officer in accordance ,ith, and as authoriDed "& la,,
has the force and effect of la, or parta<e the nature of a statute )>ictorias %illin+
Co., Inc., vs. Social Securit& Co!!ission, 114 0hil. $$$, cited in (+paloEs
Statutor& Construction, nd Ed. 0. 168 Austice CruDEs 0hil. 0olitical 2a,, 1#'4
Ed., p. 1158 Espanol vs. 0hil >eterans (d!inistration, 159 SCR( 5148 (nti:ue
Sa,!ills Inc. vs. .a&co, 19 SCR( 516*.
4 4 4 4 4 4 4 4 4
.here "ein+ no statutor& "asis to +rant additional allo,ance to -ud+es in e4cess
of 01,111.11 char+ea"le a+ainst the local +overn!ent units ,here the& are
stationed, this Co!!ission finds no su"stantial +rounds or co+ent reason to
distur" the decision of the Cit& (uditor, %andaue Cit&, disallo,in+ in audit the
allo,ances in :uestion. (ccordin+l&, the a"oveFcaptioned appeal of the %.C and
R.C Aud+es of %andaue Cit&, insofar as the sa!e is not covered "& Circular
2etter No. #1F9, is here"& dis!issed for lac< of !erit.
4 4 4 4 4 4 4 4 4
4
On Nove!"er 9, 1##$, E4ecutive Aud+e %ercedes 6oDoFDadole, for and in
"ehalf of the petitioner -ud+es, filed a !otion for reconsideration of the decision
of the CO(. In a resolution dated %a& ', 1##6, the CO( denied the !otion.
@ence, this petition for certiorari "& the petitioner -ud+es, su"!ittin+ the follo,in+
:uestions for resolution/
I
@(S .@E CI.? O= %(ND(7E S.(.7.OR? (ND
CONS.I.7.ION(2 B(SIS .O 0RO>IDE (DDI.ION(2
(22OC(NCES (ND O.@ER BENE=I.S .O A7D6ES
S.(.IONED IN (ND (SSI6NED .O .@E CI.?G
II
C(N (N (D%INIS.R(.I>E CIRC72(R OR 67IDE2INE S7C@
(S 2OC(2 B7D6E. CIRC72(R NO. $$ RENDER INO0ER(.I>E
.@E 0OCER O= .@E 2E6IS2(.I>E BOD? O= ( CI.? B?
SE..IN6 ( 2I%I. .O .@E EH.EN. O= .@E EHERCISE O=
S7C@ 0OCERG
III
@(S .@E CO%%ISSION ON (7DI. CORREC.2? IN.ER0RE.ED
2OC(2 B7D6E. CIRC72(R NO. $$ .O INC27DE %E%BERS O=
.@E A7DICI(R? IN =IHIN6 .@E CEI2IN6 O= (DDI.ION(2
(22OC(NCES (ND BENE=I.S .O BE 0RO>IDED .O A7D6ES
S.(.IONED IN (ND (SSI6NED .O %(ND(7E CI.? B? .@E
CI.? 6O>ERN%EN. (. 01,111.11 0ER %ON.@
NO.CI.@S.(NDIN6 .@(. .@E? @(>E BEEN RECEI>IN6
(22OC(NCES O= 01,$11.11 %ON.@2? =OR .@E 0(S. =I>E
?E(RSG
I>
IS 2OC(2 B7D6E. CIRC72(R NO. $$ D(.ED %(RC@ 1$, 1##4
ISS7ED B? .@E DE0(R.%EN. O= B7D6E. (ND
%(N(6E%EN. >(2ID (ND EN=ORCE(B2E CONSIDERIN6
.@(. I. C(S NO. D72? 07B2IS@ED IN (CCOD(NCE CI.@
2(CG
$
0etitioner -ud+es ar+ue that 2BC $$ is void for infrin+in+ on the local autono!& of
%andaue Cit& "& dictatin+ a unifor! a!ount that a local +overn!ent unit can
dis"urse as additional allo,ances to -ud+es stationed therein. .he& !aintain that
said circular is not supported "& an& la, and therefore +oes "e&ond the
supervisor& po,ers of the 0resident. .he& further alle+e that said circular is void
for lac< of pu"lication.
On the other hand, the &earl& appropriation ordinance providin+ for additional
allo,ances to -ud+es is allo,ed "& Section 4$', par. )a*)1*I4iJ, of R( 9161,
other,ise <no,n as the 2ocal 6overn!ent Code of 1##1, ,hich provides that/
Sec. 4$'. Powers, Duties, Functions and ompensation. K )a* .he san++unian+
panlun+sod, as the le+islative "od& of the cit&, shall enact ordinances, approve
resolutions and appropriate funds for the +eneral ,elfare of the cit& and its
inha"itants pursuant to Section 16 of this Code and in the proper e4ercise of the
corporate po,ers of the cit& as provided for under Section of this Code, and
shall/
)1* (pprove ordinances and pass resolutions necessar& for an efficient and
effective cit& +overn!ent, and in this connection, shall/
4 4 4 4 4 4 4 4 4
!xi" #hen the finances of the city government allow, provide for additional
allowances and other benefits to $udges, prosecutors, public elementary and high
school teachers, and other national government officials stationed in or assigned
to the city% )italics supplied*
Instead of filin+ a co!!ent on "ehalf of respondent CO(, the Solicitor 6eneral
filed a !anifestation supportin+ the position of the petitioner -ud+es. .he Solicitor
6eneral ar+ues that )1* DB% onl& en-o&s the po,er to revie, and deter!ine
,hether the dis"urse!ents of funds ,ere !ade in accordance ,ith the ordinance
passed "& a local +overn!ent unit ,hile )* the CO( has no !ore than auditorial
visitation po,ers over local +overn!ent units pursuant to Section 54' of R(
9161 ,hich provides for the po,er to inspect at an& ti!e the financial accounts of
local +overn!ent units.
%oreover, the Solicitor 6eneral opines that 3the DB% and the respondent are
onl& authoriDed under R( 9161 to pro!ul+ate a Bud+et Operations %anual for
local +overn!ent units, to i!prove and s&ste!atiDe !ethods, techni:ues and
procedures e!plo&ed in "ud+et preparation, authoriDation, e4ecution and
accounta"ilit&3 pursuant to Section 5$4 of R( 9161. .he Solicitor 6eneral points
out that 2BC $$ ,as not e4ercised under an& of the afore!entioned provisions.
Respondent CO(, on the other hand, insists that the constitutional and statutor&
authorit& of a cit& +overn!ent to provide allo,ances to -ud+es stationed therein
is not a"solute. Con+ress !a& set li!itations on the e4ercise of autono!&. It is
for the 0resident, throu+h the DB%, to chec< ,hether these le+islative li!itations
are "ein+ follo,ed "& the local +overn!ent units.
One such la, i!posin+ a li!itation on a local +overn!ent unitEs autono!& is
Section 4$', par. )a* )1* I4iJ, of R( 9161, ,hich authoriDes the dis"urse!ent of
additional allo,ances and other "enefits to -ud+es sub$ect to the condition that
the finances of the city government should allow the same. .hus, DB% is !erel&
enforcin+ the condition of the la, ,hen it sets a unifor! !a4i!u! a!ount for the
additional allo,ances that a cit& +overn!ent can release to -ud+es stationed
therein.
(ssu!in+ arguendo that 2BC $$ is void, respondent CO( !aintains that the
provisions of the &earl& approved ordinance +rantin+ additional allo,ances to
-ud+es are still prohi"ited "& the appropriation la,s passed "& Con+ress ever&
&ear. CO( ar+ues that %andaue Cit& +ets the funds for the said additional
allo,ances of -ud+es fro! the Internal Revenue (llot!ent )IR(*. But the 6eneral
(ppropriations (cts of 1##4 and 1##$ do not !ention the dis"urse!ent of
additional allo,ances to -ud+es as one of the allo,a"le uses of the IR(. @ence,
the provisions of said ordinance +rantin+ additional allo,ances, ta<en fro! the
IR(, to herein petitioner -ud+es are void for "ein+ contrar& to la,.
.o resolve the instant petition, there are t,o issues that ,e !ust address/ )1*
,hether 2BC $$ of the DB% is void for +oin+ "e&ond the supervisor& po,ers of
the 0resident and for not havin+ "een pu"lished and )* ,hether the &earl&
appropriation ordinance enacted "& the Cit& of %andaue that provides for
additional allo,ances to -ud+es contravenes the annual appropriation la,s
enacted "& Con+ress.
Ce rule in favor of the petitioner -ud+es.
On the first issue, ,e declare 2BC $$ to "e null and void.
Ce reco+niDe that, althou+h our Constitution
6
+uarantees autono!& to local
+overn!ent units, the e4ercise of local autono!& re!ains su"-ect to the po,er of
control "& Con+ress and the po,er of supervision "& the 0resident. Section 4 of
(rticle H of the 1#'9 0hilippine Constitution provides that/
Sec. 4. .he 0resident of the 0hilippines shall e4ercise +eneral supervision over
local +overn!ents. 4 4 4
In Pimentel vs. &guirre
9
, ,e defined the supervisor& po,er of the 0resident and
distin+uished it fro! the po,er of control e4ercised "& Con+ress. .hus/
.his provision )Section 4 of (rticle H of the 1#'9 0hilippine Constitution* has
"een interpreted to e4clude the po,er of control. In 'ondano v. (ilvosa,
i $
the
Court contrasted the 0residentEs po,er of supervision over local +overn!ent
officials ,ith that of his po,er of control over e4ecutive officials of the national
+overn!ent. It ,as e!phasiDed that the t,o ter!s FF supervision and control FF
differed in !eanin+ and e4tent. .he Court distin+uished the! as follo,s/
34 4 4 In ad!inistrative la,, supervision !eans overseein+ or the po,er or
authorit& of an officer to see that su"ordinate officers perfor! their duties. If the
latter fail or ne+lect to fulfill the!, the for!er !a& ta<e such action or step as
prescri"ed "& la, to !a<e the! perfor! their duties. Control, on the other hand,
!eans the po,er of an officer to alter or !odif& or nullif& or set aside ,hat a
su"ordinate officer haIsJ done in the perfor!ance of his duties and to su"stitute
the -ud+!ent of the for!er for that of the latter.3
ii 6
In )aule v. (antos,
iii 9
,e further stated that the Chief E4ecutive ,ielded no !ore
authorit& than that of chec<in+ ,hether local +overn!ents or their officials ,ere
perfor!in+ their duties as provided "& the funda!ental la, and "& statutes. @e
cannot interfere ,ith local +overn!ents, so lon+ as the& act ,ithin the scope of
their authorit&. 3Supervisor& po,er, ,hen contrasted ,ith control, is the po,er of
!ere oversi+ht over an inferior "od&8 it does not include an& restrainin+ authorit&
over such "od&,3
iv '
,e said.
In a !ore recent case, Drilon v. *im,
v #
the difference "et,een control and
supervision ,as further delineated. Officers in control la& do,n the rules in the
perfor!ance or acco!plish!ent of an act. If these rules are not follo,ed, the&
!a&, in their discretion, order the act undone or redone "& their su"ordinates or
even decide to do it the!selves. On the other hand, supervision does not cover
such authorit&. Supervisin+ officials !erel& see to it that the rules are follo,ed,
"ut the& the!selves do not la& do,n such rules, nor do the& have the discretion
to !odif& or replace the!. If the rules are not o"served, the& !a& order the ,or<
done or redone, "ut onl& to confor! to such rules. .he& !a& not prescri"e their
o,n !anner of e4ecution of the act. .he& have no discretion on this !atter
e4cept to see to it that the rules are follo,ed.
7nder our present s&ste! of +overn!ent, e4ecutive po,er is vested in the
0resident.
vi11
.he !e!"ers of the Ca"inet and other e4ecutive officials are
!erel& alter e+os. (s such, the& are su"-ect to the po,er of control of the
0resident, at ,hose ,ill and "ehest the& can "e re!oved fro! office8 or their
actions and decisions chan+ed, suspended or reversed.
vii 11
In contrast, the heads
of political su"divisions are elected "& the people. .heir soverei+n po,ers
e!anate fro! the electorate, to ,ho! the& are directl& accounta"le. B&
constitutional fiat, the& are su"-ect to the 0residentEs supervision onl&, not control,
so lon+ as their acts are e4ercised ,ithin the sphere of their le+iti!ate po,ers.
B& the sa!e to<en, the 0resident !a& not ,ithhold or alter an& authorit& or
po,er +iven the! "& the Constitution and the la,.
Clearl& then, the 0resident can onl& interfere in the affairs and activities of a local
+overn!ent unit if he or she finds that the latter has acted contrar& to la,. .his is
the scope of the 0residentEs supervisor& po,ers over local +overn!ent units.
@ence, the 0resident or an& of his or her alter egos cannot interfere in local
affairs as lon+ as the concerned local +overn!ent unit acts ,ithin the para!eters
of the la, and the Constitution. (n& directive therefore "& the 0resident or an& of
his or her alter egos see<in+ to alter the ,isdo! of a la,Fconfor!in+ -ud+!ent
on local affairs of a local +overn!ent unit is a patent nullit& "ecause it violates
the principle of local autono!& and separation of po,ers of the e4ecutive and
le+islative depart!ents in +overnin+ !unicipal corporations.
Does 2BC $$ +o "e&ond the la, it see<s to i!ple!entG ?es.
2BC $$ provides that the additional !onthl& allo,ances to "e +iven "& a local
+overn!ent unit should not e4ceed 01,111 in provinces and cities and 0911 in
!unicipalities. Section 4$', par. )a*)1*)4i*, of R( 9161, the la, that supposedl&
serves as the le+al "asis of 2BC $$, allo,s the +rant of additional allo,ances to
-ud+es 3,hen the finances of the cit& +overn!ent allo,.3 .he said provision does
not authoriDe settin+ a definite !a4i!u! li!it to the additional allo,ances
+ranted to -ud+es. .hus, ,e need not "ela"or the point that the finances of a cit&
+overn!ent !a& allo, the +rant of additional allo,ances hi+her than 01,111 if
the revenues of the said cit& +overn!ent e4ceed its annual e4penditures. .hus,
to illustrate, a cit& +overn!ent ,ith locall& +enerated annual revenues of 041
!illion and e4penditures of 05$ !illion can afford to +rant additional allo,ances
of !ore than 01,111 each to, sa&, ten -ud+es inas!uch as the finances of the
cit& can afford it.
Settin+ a unifor! a!ount for the +rant of additional allo,ances is an
inappropriate ,a& of enforcin+ the criterion found in Section 4$', par. )a*)1*)4i*,
of R( 9161. .he DB% overFstepped its po,er of supervision over local
+overn!ent units "& i!posin+ a prohi"ition that did not correspond ,ith the la, it
sou+ht to i!ple!ent. In other ,ords, the prohi"itor& nature of the circular had no
le+al "asis.
=urther!ore, 2BC $$ is void on account of its lac< of pu"lication, in violation of
our rulin+ in )a+ada vs. )uvera
'
,here ,e held that/
444. (d!inistrative rules and re+ulations !ust also "e pu"lished if their purpose
is to enforce or i!ple!ent e4istin+ la, pursuant to a valid dele+ation.
Interpretative re+ulations and those !erel& internal in nature, that is, re+ulatin+
onl& the personnel of an ad!inistrative a+enc& and the pu"lic, need not "e
pu"lished. Neither is pu"lication re:uired of the soFcalled letters of instruction
issued "& ad!inistrative superiors concernin+ the rules or +uidelines to "e
follo,ed "& their su"ordinates in the perfor!ance of their duties.
Respondent CO( clai!s that pu"lication is not re:uired for 2BC $$ inas!uch as
it is !erel& an interpretative re+ulation applica"le to the personnel of an 267.
Ce disa+ree. In De ,esus vs. ommission on &udit
#
,here ,e dealt ,ith the
sa!e issue, this Court declared void, for lac< of pu"lication, a DB% circular that
disallo,ed pa&!ent of allo,ances and other additional co!pensation to
+overn!ent officials and e!plo&ees. In refutin+ respondent CO(Es ar+u!ent that
said circular ,as !erel& an internal re+ulation, ,e ruled that/
On the need for pu"lication of su"-ect DB%FCCC No. 11, ,e rule in the
affir!ative. =ollo,in+ the doctrine enunciated in )a+ada v. )uvera, pu"lication in
the Official 6aDette or in a ne,spaper of +eneral circulation in the 0hilippines is
re:uired since D&M7CCC No. 10 "/ "( !)e ('!re o5 '( '$m"("/!r'!"#e c"rc4'r
!)e 8r8o/e o5 9)"c) "/ !o e(5orce or "m84eme(! '( ex"/!"(% 4'9. Stated
differentl&, to "e effective and enforcea"le, DB%FCCC No. 11 !ust +o throu+h
the re:uisite pu"lication in the Official 6aDette or in a ne,spaper of +eneral
circulation in the 0hilippines.
In the present case under scrutin&, it is decisivel& clear that DB%FCCC No. 11,
,hich co!pletel& disallo,s pa&!ent of allo,ances and other additional
co!pensation to +overn!ent officials and e!plo&ees, startin+ Nove!"er 1,
1#'#, is not a !ere interpretative or internal re+ulation. It is so!ethin+ !ore than
that. (nd ,h& not, ,hen it tends to deprive +overn!ent ,or<ers of their
allo,ance and additional co!pensation sorel& needed to <eep "od& and soul
to+ether. A! !)e #er6 4e'/!, be5ore !)e /'"$ c"rc4'r ($er '!!'c: m'6 be
8erm"!!e$ !o /b/!'(!"'446 re$ce !)e"r "(come, !)e %o#er(me(! o55"c"'4/
'($ em84o6ee/ co(cer(e$ /)o4$ be '88r"/e$ '($ '4er!e$ b6 !)e
8b4"c'!"o( o5 /b;ec! c"rc4'r "( !)e O55"c"'4 G'<e!!e or "( ' (e9/8'8er o5
%e(er'4 c"rc4'!"o( "( !)e .)"4"88"(e/ = !o !)e e($ !)'! !)e6 be %"#e(
'm84e/! o88or!("!6 !o #o"ce o! 9)'!e#er o88o/"!"o( !)e6 m'6 )'#e, '($
!o #e(!"4'!e !)e"r /!'(ce o( !)e m'!!er. T)"/ '88ro'c) "/ more "( :ee8"(%
9"!) $emocr'!"c 8rece8!/ '($ r$"me(!/ o5 5'"r(e// '($ !r'(/8're(c6.
)e!phasis supplied*
In Philippine -nternational )rading orporation vs. ommission on &udit
11
, ,e
a+ain declared the sa!e circular as void, for lac< of pu"lication, despite the fact
that it ,as reFissued and then su"!itted for pu"lication. E!phasiDin+ the
i!portance of pu"lication to the effectivit& of a re+ulation, ,e therein held that/
It has co!e to our <no,led+e that DB%FCCC No. 11 has "een reFissued in its
entiret& and su"!itted for pu"lication in the Official 6aDette per letter to the
National 0rintin+ Office dated %arch #, 1###. Could the su"se:uent pu"lication
thereof cure the defect and retroact to the ti!e that the a"oveF!entioned ite!s
,ere disallo,ed in auditG
.he ans,er is in the ne+ative, precisel& for the reason that pu"lication is re:uired
as a condition precedent to the effectivit& of a la, to infor! the pu"lic of the
contents of the la, or rules and re+ulations "efore their ri+hts and interests are
affected "& the sa!e. =ro! the ti!e the CO( disallo,ed the e4penses in audit
up to the filin+ of herein petition the su"-ect circular re!ained in le+al li!"o due
to its nonFpu"lication. (s ,as stated in )a+ada v. )uvera, .prior pu"lication of
la,s "efore the& "eco!e effective cannot "e dispensed ,ith, for the reason that
it ,ould den& the pu"lic <no,led+e of the la,s that are supposed to +overn it.3
11
Ce no, resolve the second issue of ,hether the &earl& appropriation ordinance
enacted "& %andaue Cit& providin+ for fi4ed allo,ances for -ud+es contravenes
an& la, and should therefore "e struc< do,n as null and void.
(ccordin+ to respondent CO(, even if 2BC $$ ,ere void, the ordinances enacted
"& %andaue Cit& +rantin+ additional allo,ances to the petitioner -ud+es ,ould
3still )"e* "ereft of le+al "asis for ,ant of a la,ful source of funds considerin+ that
the IR( cannot be used for such purposes.3 Respondent CO( sho,ed that
%andaue Cit&Es funds consisted of locall& +enerated revenues and the IR(. =ro!
1#'# to 1##$, %andaue Cit&Es &earl& e4penditures e4ceeded its locall& +enerated
revenues, thus resultin+ in a deficit. Durin+ all those &ears, it ,as the IR( that
ena"led %andaue Cit& to incur a surplus. Respondent avers that %andaue Cit&
used its IR( to pa& for said additional allo,ances and this violated para+raph
of the Special 0rovisions, pa+e 1161, of R( 9'4$ ).he 6eneral (ppropriations
(ct of 1##$*
1
and para+raph 5 of the Special 0rovision, pa+e 1$, of R( 9665
).he 6eneral (ppropriations (ct of 1##4*
15
,hich specificall& identified the
o"-ects of e4penditure of the IR(. No,here in said provisions of the t,o
"ud+etar& la,s does it sa& that the IR( can "e used for additional allo,ances of
-ud+es. Respondent CO( thus ar+ues that the provisions in the ordinance
providin+ for such dis"urse!ent are a+ainst the la,, considerin+ that the +rant of
the su"-ect allo,ances is not ,ithin the specified use allo,ed "& the aforesaid
&earl& appropriations acts.
Ce disa+ree.
Respondent CO( failed to prove that %andaue Cit& used the IR( to spend for
the additional allo,ances of the -ud+es. .here ,as no evidence su"!itted "&
CO( sho,in+ the "rea<do,n of the e4penses of the cit& +overn!ent and the
funds used for said e4penses. (ll the CO( presented ,ere the a!ounts
e4pended, the locall& +enerated revenues, the deficit, the surplus and the IR(
received each &ear. (side fro! these ite!s, no data or fi+ures ,ere presented to
sho, that %andaue Cit& deducted the su"-ect allo,ances fro! the IR(. In other
,ords, -ust "ecause %andaue Cit&Es locall& +enerated revenues ,ere not enou+h
to cover its e4penditures, this did not !ean that the additional allo,ances of
petitioner -ud+es ,ere ta<en fro! the IR( and not fro! the cit&Es o,n revenues.
%oreover, the DB% neither conducted a for!al revie, nor ordered a disapproval
of %andaue Cit&Es appropriation ordinances, in accordance ,ith the procedure
outlined "& Sections 56 and 59 of R( 9161 ,hich provide that/
Section 56. Revie, of (ppropriation Ordinances of 0rovinces, @i+hl& 7r"aniDed
Cities, Independent Co!ponent Cities, and %unicipalities ,ithin the %etropolitan
%anila (rea. .he Depart!ent of Bud+et and %ana+e!ent shall revie,
ordinances authoriDin+ the annual or supple!ental appropriations of provinces,
hi+hl&Fur"aniDed cities, independent co!ponent cities, and !unicipalities ,ithin
the %etropolitan %anila (rea "( 'ccor$'(ce 9"!) !)e "mme$"'!e46 /ccee$"(%
Sec!"o(.
Section 59. Revie, of (ppropriation Ordinances of Co!ponent Cities and
%unicipalities.F .he san++uninan+ panlala,i+an shall revie, the ordinance
authoriDin+ annual or supple!ental appropriations of co!ponent cities and
!unicipalities in the sa!e !anner and ,ithin the sa!e period prescri"ed for the
revie, of other ordinances.
,5 9"!)"( ("(e!6 (>0+ $'6/ 5rom rece"8! o5 co8"e/ o5 /c) or$"('(ce, !)e
/'(%%("'(% 8'(4'4'9"%'( !':e/ (o 'c!"o( !)ereo(, !)e /'me /)'44 be
$eeme$ !o )'#e bee( re#"e9e$ "( 'ccor$'(ce 9"!) 4'9 '($ /)'44 co(!"(e
!o be "( 544 5orce '($ e55ec!. )e!phasis supplied*
Cithin #1 da&s fro! receipt of the copies of the appropriation ordinance, the
DB% should have ta<en positive action. Other,ise, such ordinance ,as dee!ed
to have "een properl& revie,ed and dee!ed to have ta<en effect. Inas!uch as,
in the instant case, the DB% did not follo, the appropriate procedure for
revie,in+ the su"-ect ordinance of %andaue Cit& and allo,ed the #1Fda& period
to lapse, it can no lon+er :uestion the le+alit& of the provisions in the said
ordinance +rantin+ additional allo,ances to -ud+es stationed in the said cit&.
3HERE2ORE, the petition is here"& 6R(N.ED, and the assailed decision and
resolution, dated Septe!"er 1, 1##$ and %a& ', 1##6, respectivel&, of the
Co!!ission on (udit are here"& set aside.
No costs.
SO ORDERED.
Davide, ,r., .,., /ellosillo, 0itug, 'endo1a, Panganiban, 2uisumbing, 3nares4
(antiago, (andoval45utierre1, arpio, &ustria4'artine1, arpio4'orales, and
alle$o, (r., ,,., concur.
Puno, ,., on official business.
&1cuna, ,., on leave.
2oo!(o!e/
1
CO( Decision No. #$F$6'8 6ollo, pp. 4F49.

CO( Decision No. #6F'8 6ollo, pp. 4'F4#.

5
6ollo, p. 1'8 6ollo, p. 49.
4
6ollo, pp. 44F49.
$
6ollo, p. 4.
6
Sec. $, I(rt. IIJ. .he State shall ensure the autono!& of local
+overn!ents.
Sec. , I(rt. HJ. .he territorial and political su"divisions shall en-o&
local autono!&.
9
556 SCR( 11, 14F1$ )111*.
'
146 SCR( 4$5, 4$4 )1#'6*.
#
#4 SCR( 1$, 1$9F1$' )1##'*.
11
51# SCR( 19#, 1'# )1###*.
11
-d., p. 1'#.
1
S0ECI(2 0RO>ISIONS
4 4 4 4 4 4 4 4 4
5. 7se of Funds. .he a!ount herein shall, pursuant to Section
19)+* of the Code, provide for the cost of "asic services and
facilities enu!erated under Section 19)"* thereof, particularl& those
,hich have "een devolved "& the Depart!ent of @ealth, the
Depart!ent of Social Celfare and Develop!ent, the Depart!ent of
(+riculture, and the Depart!ent of Environ!ent and Natural
Resources as ,ell as other a+encies of the national +overn!ent,
includin+ )1* construction;i!prove!ent, repair and !aintenance of
local roads8 )* concrete "aran+a& roads;!ultiFpurpose pave!ents
construction and i!prove!ent pro+ra! to "e i!ple!ented in
accordance ,ith R.(. No. 69658 )5* construction, reha"ilitation and
i!prove!ent of co!!unal irri+ation pro-ects;s&ste!s8 0RO>IDED,
.hat each local +overn!ent unit shall, in accordance ,ith Section
'9 of the Code, appropriate in its annual "ud+et no less than
t,ent& percent )1L* of its share fro! internal revenue allot!ent
for develop!ent pro-ects8 0RO>IDED, =7R.@ER, .hat
enforce!ent of the provisions of Sections 5$)a* and 551)"* of the
Code shall "e ,aived to ena"le local +overn!ent units to a"sor"
national +overn!ent personnel transferred on account of
devolution, create the !andator& positions specified in the Code,
ena"le the "aran+a& officials to receive the !ini!u! allo,a"le
level of re!uneration provided under Section 5#5 of the Code as
,ell as continue the i!ple!entation of the salar& standardiDation
authoriDed under R.(. No. 69$'/ 0RO>IDED, =IN(22?, .hat such
a!ounts as !a& "e deter!ined "& the Depart!ent of Bud+et and
%ana+e!ent correspondin+ to the re:uire!ents of health care and
services as devolved to 2ocal 6overn!ents 7nits R.(. No. 9161
shall not "e reali+ned or utiliDed "& 267s concerned for an& other
e4penditure or purpose.
15
S0ECI(2 0RO>ISIONS
4 4 4 4 4 4 4 4 4
8. 7se of Funds. F .he a!ount herein appropriated shall, pursuant
to Section 19)+* of the Code, provide for the cost of "asic services
and facilities enu!erated under Section 19)"* thereof, particularl&
those devolved "& the Depart!ent of @ealth, the Depart!ent of
Social Celfare and Develop!ent, the Depart!ent of (+riculture,
and the Depart!ent of Environ!ent and Natural Resources as ,ell
as other a+encies of the National 6overn!ent, includin+ )1*
construction;i!prove!ent, repair and !aintenance of local roads8
)* concrete "aran+a& roads;!ultiFpurpose pave!ents,
construction and i!prove!ent pro+ra! to "e i!ple!ented in
accordance ,ith R.(. No. 69658 )* construction, reha"ilitation and
i!prove!ent of co!!unal irri+ation pro-ects;s&ste!s8 and )4*
pa&!ent of not less than fift& percent )$1L* of the total re:uire!ent
for the %a+na Carta "enefits of devolved health ,or<ers pursuant
to the provisions of R.(. No. 951$ and such other +uidelines that
!a& "e issued "& the Depart!ent of @ealth for the purpose/
0RO>IDED, .hat each local +overn!ent unit shall, in accordance
,ith Section '9 of the Code, appropriate in its "ud+et no less than
t,ent& percent )1L* of its share fro! Internal Revenue (llot!ent
for develop!ent pro-ects8 0RO>IDED, =7R.@ER, .hat
enforce!ent of the provisions of Sections 5$)a* and 551)"* of the
Code shall "e ,aived ena"le local +overn!ent units to a"sor"
and;or !aintain national +overn!ent personnel transferred on
account of devolution, create the !andator& positions specified in
the Code, ena"le the "aran+a& officials to receive the !ini!u!
allo,a"le level of re!uneration provided under Section 5#5 of the
Code, as ,ell as continue the i!ple!entation of the salar&
standardiDation authoriDed under R.(. No. 69$' and the pa&!ent of
not less than fift& percent )$1L* of the total re:uire!ent for the
%a+na Carta "enefits of health ,or<ers !andated under R.(. No.
951$ and such other +uidelines as !a& "e issued "& the
Depart!ent of @ealth for the purpose.