Republic of the Philippines

SUPREME COURT
Manila

CITY OF ZAMBOANGA,
represented by the City Mayor,
HON. SHANGHALI ANG
CAPETE,
Petitioner,

- versus - G.R. DOCKET No SCA 908-

964039
FOR: Petition for Certiorari
under Rule 64 with Temporary
Restraining Order (TRO)

COMMISSION ON AUDIT,
Respondent,
x-----------------------------------------x

PETITION FOR CERTIORARI

PETITIONER, the CITY OF ZAMBOANGA, represented by

the City Mayor, the Honorable SHANGHALI ANG CAPETE,
through the City Legal Counsel, unto the Honorable Court, most
respectfully avers:

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 I. P R E F A T O R Y STATEMENT

1. Article 10 of the 1987 Philippine Constitution

provides that Congress shall enact a local
government code which shall provide for a
responsive and accountable local government
structure that is decentralized and enjoys fiscal
autonomy.

2. The Local Government Code or Republic Act No.

7160 provides that the local government units
(LGUs) shall enjoy genuine and meaningful local
autonomy to enable them to attain their fullest
development as self-reliant communities, thus
making them effective development partners of the
national government.

3. Likewise, it provides a mechanism of

decentralization with an organization that is
dynamic and operating to meet the needs and
servoices required by their respective communities.

4. Thus, the City Government of Zamboanga, guided

by the state principles assured in the Philippine
Constitution and made operational through the
Local Government Code of 1991, adopted a
Zamboanga City New Master Development Plan
2016-2020 to confront the modern day challenges
and meet the needs of the growing metropolis.

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5. The Zamboanga City New Master Development
Plan 2016-2020 requires a team of dedicated
technical experts and specialized field professionals
to ensure the effective implementation of the plan,
realizing its goal of a Zamboanga Globally Ready
2020.

6. However, hiring these experts will violate the

general limitation on the use of the City
Government Funds for personal services, under
Section 325(a) of the Code, as it provides that it
shall not exceed forty five percent (45%) of the total
annual budget.

7. Hence, to meet the objective and not violate the

general limitation set forth in the code, the
Sanggunian Panlungsod enacted Zamboanga City
Ordinance No. 299 series of 2017.

II. P A R T I E S

1. PETITIONER, the City Government of Zamboanga, is

a chartered city by virtue of Commonwealth Act No. 39
on October 12, 1936. It is a municipal corporation,
represented by its City Mayor, the Honorable
SHANGHALI ANG CAPETE with an office business
address in Zamboanga City Hall, Valderosa Street,
Zamboanga City, where it may be served with the
processes of the Honorable Court.

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2. RESPONDENT, the Commission on Audit, is a
constitutional body, represented by its Chairperson,
Honorable Corsonado Qho Iba, is made a party to this
petition due to the Decision it rendered affirming the
COA-LSS Opinion 01-2017. The Commission on Audit
has its principal office in Commonwealth Avenue,
Quezon City where it may be served with the processes
of the Honorable Court.

III. P R O C E D U R A L B A S I S

1. This special civil action under Rule 64 in relation to Rule

65, a petition for certiorari is anchored on Section 7,
Article IX-A of the Philippine Constitution that provides:

“Unless otherwise provided by this Constitution

or by law, any decision, order, or ruling of each
commission may be BROUGHT TO THE
SUPREME COURT on CERTIORARI by the
aggrieved party with thirty days from receipt of a
copy thereof.”(Emphasis supplied.)

2. Rule 64 of the Revised Rules on Court which provides

that the review of judgements and final orders or
resolutions of the Commission on Elections and the
Commission on Audit may be brought by the aggrieved
party to the Supreme Court. This was interpreted by the
Court in the cases of Aratuc v Commission on Elections,

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 88 SCRA 252 and Lokin Jr. v Commission on Elections,
621 SCRA 385.

3. As held the case of Maritime Industry Authority v

Commission on Audit, G. R. No. 185812, January 13,
2015:

“The aggrieved party can assail the decision of

the Commission on Audit through a petition
for certiorari under Rule 64 before this Court. A
petition under Rule 64 may prosper only after a
finding that the administrative agency
committed grave abuse of discretion amounting
to lack or excess of jurisdiction. Not all errors of
the Commission on Audit is reviewable by this
court. Thus: A Rule 65 petition is a unique and
special rule because it commands limited review
of the question raised. As an extraordinary
remedy, its purpose is simply to keep the public
respondent within the bounds of its jurisdiction
or to relieve the petitioner from the public
respondent’s arbitrary acts. In this review, the
Court is confined solely to questions of
jurisdiction whenever a tribunal, board or officer
exercising judicial or quasi-judicial function acts
without jurisdiction or in excess of jurisdiction,
or with grave abuse of discretion amounting to
lack or excess of jurisdiction.” (Emphasis
supplied.)

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4. This was reiterated in the case of Daraga Press, Inc v
Commission on Audit, G. R. No. 201042, June 16, 2015,
wherein the Court stressed that:

“Decisions and resolutions of the respondent COA

may be reviewed and nullified only on the ground
of grave abuse of discretion amounting to lack or
excess of jurisdiction. Grave abuse of discretion
exists when there is an evasion of a positive duty
or a virtual refusal to perform a duty enjoined by
law or to act in contemplation of law as when the
judgment rendered is not based on law and
evidence but on caprice, whim, and despotism.”
(Emphasis supplied.)

5. Such remedy is proper there being no other mode of

appeal available to the Petitioner and on jurisdictional
premise, the filinf of this Petition for Certiorari under
Rule 64 in relation to Rule 65 is that the Respondent
acted without or in excess of jurisdiction or with grave
abuse of discretion amounting to lack or excess of
jurisdiction.

IV. T I M E L I N E S S O F T H E P E T I T I O N

1. Section 3 of Rule 64 of the Revised Rules of Court, as

stated in Section 7, Article IX-A of the Constitution,
provides that the Petition for Certiorari shall be filed
before the Supreme Court within THIRTY (30) days from

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 the notice of judgement, decision, resolution, or final order
of the Commission on Audit.

2. The Court, in the case of The Law Firm of Laguesma

Magsalin Consulta and Gastardo v Commission on Audit,
G. R. No. 185544, January 13, 2015, stressed that: “The
Constitution, however, specifies that the reglementary
period for assailing the decisions, orders, or rulings of the
constitutional commissions is thirty (30) days from receipt
of the decision, order, or ruling. For this reason, a
separate rule was enacted in the Rules of Court. Rule 64
of the Rules of Civil Procedure provides the guidelines for
filing a petition for certiorari under this rule. Section 2 of
the rule specifies that “[a] judgment or final order or
resolution of the Commission on Elections and the
Commission on Audit may be brought by the aggrieved
party to the Supreme Court on certiorariunder Rule
65, except as hereinafter provided.” The phrase, “except
as hereinafter provided,” specifies that any petition
for certiorari filed under this rule follows the same
requisites as those of Rule 65 except for certain provisions
found only in Rule 64. One of these provisions concerns
the time given to file the petition. (Emphasis supplied)

3. This petition is timely filed as it was only on November

22, 2017 that the Respondent sent the official copy of the
decision to the Petition, through a registered mail with
Postal Mail Registry No. 0435 sent through the Philippine
Postal Office, which was officially received by the
Petitioner on December 18, 2017.

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V. S T A T E M E N T O F R E L E V A N T F A C T S

1. That the local government of the City of Zamboanga

adopted the Zamboanga City New Master
Development Plan (ZCNMDP) 2016 – 2020 on July
20, 2016 with the vision: “ZAMBOANGA -
GLOBALLY READY 2020”

2. That under such plan, the city government of

Zamboanga shall hire One Hundred (100) new
personnel of various disciplines and technical
professionals to be the main think tank in the
planning and implementation of the ZCNMDP
2016-2020 with its core components such as the City
Land Use Plan, Zamboanga City Disaster Risk
Reduction Management Plan, the Zamboanga City
Security Plan, Economic Development Plan and the
Zamboanga City Agency Plan;

3. That the local government of Zamboanga City shall

effectively hire these composite team of 100
personnel with the following background: Twenty
(20) licensed civil engineers, Five (5) lawyers,
Twenty (20) licensed urban development planners,
Twenty (20) environmental planners, Ten (10)
Agriculturists, Ten (10) Medical Doctors with
Masters in Public Health Management and Public
Health Administration, Five (5) Aquatic Resources

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 Specialists, Five (5) Management Engineers and
(5) Economic Specialists.

4. That given the budget items for personal services is

already saturated and securing new plantilla
positions from the Department of Budget and
Management will delay the implementation of the
ZCNMDP 2016-2020, the Department of Budget
and Management, through a letter dated September
20, 2016, recommended that the City of Zamboanga
implement a rationalisation plan with an early
retirement incentives for duplicate positions,
similar to Executive Order No. 184 series of 2003,
directing the reorganization of the National
Development Company, issued by then President
Gloria Macapagal Arroyo;

5. That the rationalized positions, when vacant due to

the separation of previous occupants, by means of
an ordinance, create new plantilla position through
a “collapse and build” method.

6. That after due consideration, the City Mayor, the

Honorable Shanghali Ang Capete, issued
Administrative Order No. 2 series of 2016, to create
the Personnel Management Committee (PMC)
chaired by the City Planning Officer, Mr. Wairun
Kalod, to review the staffing pattern and plantilla
positions to be proposed in an ordinance to be
enacted by the city council or Sangguniang
Panlungsod of Zamboanga City;

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7. That on November 15, 2016, the PMC, transmitted
to the City Mayor its proposal for the adoption of an
Zamboanga City Personnel Promotions and Early
Retirement Incentives Program, of which it was
endorsed to the Sangguniang Panlungsod for
consideration;

8. That on January 20, 2017, the Sangguniang

Panlungsod enacted Zamboanga City Ordinance No.
299 series of 2017, or the Zamboanga City
Personnel Promotions and Early Retirement
Incentives Ordinance and providing the necessary
funding thereto, which took effect on Februry 4,
2017;

9. That the said ordinance, Ordinance 299 series of

2017 provides, under “Section 10: Qualification for
Application – regular employees below sixty (60)
years of age but not less than fifty (50) years and
sickly employees below fifty (50) years of age but not
less than forty (40) years may avail of the incentives
under this program.

10. That on January 20, 2017, a supplemental budget

ordinance, through Zamboanga City Supplemental
Budget Ordinance No. 300 series of 2017, providing
an available appropriation of Two Hundred Fifty
Million Pesos (Php 250,000,000.00), was likewise
enacted to support the said program.

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11. That on March 15, 2017, the PMC, through the
Zamboanga City Human Resource Office, initiated
the application process for Zamboanga City
personnel wanting to avail of the early retirement
program;

12. That on April 2, 2017, out of One Thousand Six

Hundred (1600) applicants, One Hundred (100)
qualified applicants availed of the early retirement
program and was separated from service, costing
the Zamboanga City Government One Hundered
Million Pesos (Php 100,000,00.00) on severance
benefits.

13. That the Commission on Audit (COA) Resident

Auditor, Mr. Joey B. Casparas, CPA, inquired
through a letter, dated April 15, 2017, sent to the
Mayor, as to the legal basis for granting such
severance package;

14. That on April 20, 2017, a reply to the letter was sent
to the COA Resident Auditor, furnishing him a copy
of the ZCNMDP 2016-2020, a copy of the DBM
letter dated September 20, 2016, a copy of the
Administrative Order No. 2 series of 2016 creating
the PMC and a copy of Zamboannga City Ordinance
No. 299 series of 2016.

15. That despite such explanation, the Resident Auditor

(COA) issued an Audit Observation Memorandum
(AOM) No. 2017-92, dated September 23, 2017,

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 stating that the disbursement is contrary to law,
namely the Government Service Insurance System
(GSIS) Act, the Government Accounting Manual
and alleging that there was no legal basis
whatsoever, thus directing the City Government to
file a comment within fifteen (15) days.

16. That after such compliance to file a comment by the

City Government of Zamboanga on October 4, 2017,
the Audit Team Leader (ATL), Mr. Veneracion S.
Ankinca, referred the matter to the Office of the
General Counsel, COA-Legal Services Sector (LSS)
for opinion.

17. That the COA-LSS issued an opinion, COA-LSS

Opinion No. 01-2017, on October 9, 2017, that the
said ordinance and disbursement is illegal as it
partakes of supplementary retirement benefit plan
and recommended the issuance of the Notice of
Disallowance.

18. That the ATL issued a Notice of Disallowance (ND)

2017-04, dated October 10, 2017 and ordering the
disbursement officers, accountable officers and the
One Hundred (100) recipients of the severance
package to refund, in favor of the Zamboanga City
Government, the total funds disbursed in the
amount of One Hundred Million Pesos (Php
100,000,000.00). Likewise, it was recommended in a
separate letter to the ATL by the Office of the
General Counsel of the Legal Services Sector to

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 review and investigate for possible abuse of
discretion in the disbursement of funds by the City
Mayor and all accountable officer on the premise
that Zamboanga City Ordinance No. 299 series of
2016 is illegal.

19. That on October 16, 2017, the Petitioner, wrote to

the Respondent, the Commission on Audit, through
the COA Chairperson, Honorable Corsonado Qho
Iba, a letter of reconsideration on the COA-LSS
Opinion No. 01-2017, as the basis for the issuance of
the Notice of Disallowance by the ATL.

20. The Respondent COA treated the letter as an

appeal to COA-LSS Opinion No. 01-2017, thus
affirming the opinion of the Legal Services Sector
and denying the said appeal on November 8, 2017.

21. That on November 15, 2015 , the Petitioner filed an

urgent motion for reconsideration, of which, the
Respondent likewise denied the motion for
reconsideration of its November 8, 2017 decision.
The dispositive portion of its November 22, 2017
decision reads:

WHEREFORE, premises considered, the

instant appeal is hereby DENIED for lack of
merit and COA-LSS Opinion No. 01-2017
dated October 9, 2017 of the Office of the
General Counsel of the Legal Services
Sector, this Commission, is

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 hereby AFFIRMED. Accordingly, the Audit
Team Leader of Zamboanga City is hereby
directed to issue a Notice of Disallowance on
the illegal disbursements made under the
Zamboanga City Ordinance No. 299 series
of 2017 or otherwise known as the
“Zamboanga City Personnel Promotions and
Early Retirement Incentives Ordinance and
providing the necessary funding thereto.”

VI. I S S U E

1. THE SOLE ISSUE IN THIS PETITION FOR THE

HONORABLE COURT TO RESOLVE IS WHETHER OR
NOT THE RESPONDENT, COMMISSION ON AUDIT
COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT
CONSIDERED ZAMBOANGA CITY ORDINANCE NO. 299,
SERIES OF 2017, A SUPPLEMENTARY RETIREMENT
PLAN, THIS NECESSITATES AN ENABLING LAW
AUTHORIZING IT FOR ITS VALIDITY.

V. GROUNDS RELIED UPON FOR ALLOWANCE OF THE

RELIEF PRAYED FOR
Sec. 5, Rule 64 (Petitioner must state the acts considered grave
abuse of discretion amounting to lack of jurisdiction and that
there is no plain, speedy and adequate remedy in the course of
law. Hence, petitioner is entitled to the relief prayed for including
the award of damages.

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 VII. D I S C U S S I O N

1. The local government code provides that the local

government units (LGUs) shall enjoy genuine and
meaningful local autonomy to enable them to attain their
fullest development in order to meet the needs of their
respective communities. In so doing, the authority that
the LGU, in this case, the City Government of
Zamboanga, is vested by the Constitution and the Local
Government Code. Drawing its powers from the
substantive law, it permits the organization to reorganize
itself and adopt measures that would allow the
organization to realize its potential. The enactment of the
Zamboanga City Ordinance, allows the local government
personnel to avail of early-retirement with severance
package that is different from a provident or retirement
plan as contemplated in the GSIS Act.

2. In the case of the City of General Santos v Commission on

Audit, 732 SCRA 77, April 22, 2014, the Court
emphasized the important role the local government unit
play in developing communities. In that particular case,
the Court said that: “Local autonomy also grants local
governments the power to streamline and reorganize.
This power is inferred from Section 76 of the Local
Government Code on organizational structure and
staffing pattern, and Section 16 otherwise known as the
general welfare clause:

Section 76. Organizational Structure and

Staffing Pattern.—Every local government unit

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 shall design and implement its own organizational
structure and staffing pattern taking into
consideration its service requirements and financial
capability, subject to the minimum standards and
guidelines prescribed by the Civil Service
Commission.” (Emphases supplied.)

3. The Code further provides that in addressing the needs of

their immediate communities:

Section 16. General Welfare.—Every local

government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as
well as powers necessary, appropriate, or incidental
for its efficient and effective governance, and those
which are essential to the promotion of the general
welfare. Within their respective territorial
jurisdictions, local government units shall ensure
and support, among other things, the preservation
and enrichment of culture, promote health and
safety, enhance the right of the people to a balanced
ecology, encourage and support the development of
appropriate and self-reliant scientific and
technological capabilities, improve public morals,
enhance economic prosperity and social justice,
promote full employment among their residents,
maintain peace and order, and preserve the comfort
and convenience of their inhabitants.

Thus, the City Government of Zamboanga is but

implementing its obligation under the Code and in so

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 doing, as its mandate to realize its potential as envisioned
in the ZCNMDP 2016-2020.

4. In order to do such, the enactment of Zamboanga City

Ordinance No. 299 series of 2017 is inevitable.
Consequently, as provided in Section 5, paragraph (a) of
the Local Government Code states that “any provision on
a power of a local government unit shall be liberally
interpreted in its favor, and in case of doubt, any question
thereon shall be resolved in favor or devolution of powers
x x x.” (Emphasis supplied)

5. Similarly, in the case of Province of Negros Occidental v

Commission on Audit, G. R. No. 182574, September 28,
2010, the Court emphazied the liberal interpretation in
favor of the LGU. It said:

“Thus, consistent with the state policy of local

autonomy as guaranteed by the 1987
Constitution, under Section 25, Article II and
Section 2, Article X, and the Local Government
Code of 1991, we declare that the grant and
release of the hospitalization and health care
insurance benefits given to petitioner’s officials
and employees were validly enacted through
an ordinance passed by
petitioner’s Sangguniang Panlalawigan.
(Emphases supplied.)

In sum, since petitioner’s grant and release of

the questioned disbursement without the

Page 17 of 22
 President’s approval did not violate the
President’s directive in AO 103, the COA then
gravely abused its discretion in applying AO
103 to disallow the premium payment for the
hospitalization and health care insurance
benefits of petitioner’s officials and employees.”

6. Thus, the Commission acted without or in excess of his

jurisdiction or with grave abuse of discretion amounting
to lack or in excess of jurisdiction and there be no any
appeal or any other plain, speedy, and adequate remedy
in the ordinary course of law, seeks the issuance of
injunction and/or a temporary restraining order (TRO).

VIII. P R AY E R / R E L I E F

WHEREFORE, premises considered, it is respectfully prayed

of the Honorable Court, to:

1. GRANT THE PETITION.

2. DECLARE THE COA-LSS OPINION 01-2017 INVALID.

3. ISSUE A PRELIMINARY MANDATORY INJUNCTION

AND/OR A TEMPORARY RESTRAINING ORDER TO
RESTRAIN THE RESPONDENT, THE COMMISSION
ON AUDIT, ITS OFFICERS: THE AUDIT TEAM
LEADER (ATL) FROM FURTHER IMPLEMENTING
THE ISSUED NOTICE OF DISALLOWANCE AGAINST
THE CITY OF ZAMBOANGA WHILE THE COURT IS
HEARING THE PETITION;

Page 18 of 22
 4. GRANT SUCH OTHER RELIEFS AS MAY BE DEEMED
JUST AND EQUITABLE.

City of Zamboanga, January 17, 2017

ZAMBOANGA CITY LEGAL OFFICE

Counsel for the Petitioner
Zamboanga City
By

ATTY. CHRISTOPHER LAWRENCE S. ARNUCO

Lifetime IBP No. 829377; 01/12/11; Zamboanga City
PTR No. 1486225; 1/09/20, Zamboanga City
MCLE Compliance No. IV-000379; 09/15/2017
Roll of Attorneys No. 52893
csarnuco@gmail.com

Copy furnished:

HONORABLE CORSONADO QHO IBA

Chairperson
Commission on Audit
Commonwealth Avenue, Quezon City

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 ATTY. ALAYKA ANUDDIN
General Counsel, Legal Services Sector
Commission on Audit
Commonwealth Avenue, Quezon City

EXPLANATION

Service of this petition was made via registered mail due to

lack of office personnel to effect personal delivery.

ATTY. CHRISTOPHER LAWRENCE S. ARNUCO

VERIFICATION AND CERTIFICATION AGAINST FORUM
SHOPPING

I, SHANGHALI ANG CAPETE, in my capacity as the City

Mayor of Zamboanga City, representing the City Government of
Zamboanga, of legal age, Filipino, and with my principal office at
Zamboanga City Hall, Valderosa Street, Zamboanga City, under
oath, hereby depose and state that:

1. I am the respondent in the above-entitled case;

2. I caused the preparation of, and have read, the foregoing

Answer and confirm that the factual allegations therein
are true and correct of my own personal knowledge and/or
based on verifiable information or authentic records;

Page 20 of 22
 3. I have not commenced any action or filed any claim
involving the same issues in any court, tribunal or quasi-
judicial agency and, to the best of my knowledge, no such
other action or claim is pending therein; and

4. If I should thereafter learn that the same or similar action

or claim has been filed or is pending, I shall report that
fact within five (5) days therefrom to this Honorable
Commission.

IN WITNESS WHEREOF, I have hereunto sign this 8h day

of January 2018 at Zamboanga City, Philippines.

SHANGHALI ANG CAPETE

Petitioner

SUBSCRIBED AND SWORN to before me this 10th day of

January 2017 at Zamboanga City, Philippines, affiant exhibiting
to me his Philippine Passport No. 158472 valid until December
2022 as competent evidence of his identity.

Doc. No.: ______;

Page No.:______;
Book No.: _____;
Series of 2020.

Page 21 of 22
ATTY. CHRISTOPHER LAWRENCE S. ARNUCO
Lifetime IBP No. 829377; 01/12/11; Zamboanga City
PTR No. 1486225; 1/09/20, Zamboanga City
MCLE Compliance No. IV-000379; 09/15/2017
Roll of Attorneys No. 52893
csarnuco@gmail.com

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