Bureau of Fisheries and Aquatic Resources (Bfar) Employees Union, Regional Office No. Vii, Cebu City, Petitioner, vs. Commission On AUDIT, Respondent

8/31/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 562
G.R. No. 169815. August 13, 2008.*
BUREAU OF FISHERIES AND AQUATIC RESOURCES

(BFAR) EMPLOYEES UNION, REGIONAL OFFICE NO.
VII, CEBU CITY, petitioner, vs. COMMISSION ON
AUDIT, respondent.
Constitutional Law; Social Justice; The social justice

provisions of the Constitution are not self-executing principles
ready for enforcement through the courts; They are merely
statements of principles and policies; To give them effect,
legislative enactment is required.—We rule on the issue of
constitutionality. Petitioner invokes the provisions of the 1987
Constitution on social justice to warrant the grant of the Food
Basket Allowance. Time and again, we have ruled that the social
justice provisions of the Constitution are not self-executing
principles ready for enforcement through the courts. They are
merely statements of principles and policies. To give them effect,
legislative enactment is required. As we held in Kilosbayan,
Incorporated v. Morato, 246 SCRA 540 (1995), the principles and
state policies enumerated in Article II and some sections of Article
XII are “not self-executing provisions, the disregard of which can
give rise to a cause of action in the courts. They do not embody
judicially enforceable constitutional rights but guidelines for
legislation.”
Same; Same; Allowances; The Department of Agriculture (DA)
Undersecretary has no authority to grant any allowance to the
employees of Bureau of Fisheries and Aquatic Resources (BFAR).—
Petitioner contends that the approval of the Department of
Agriculture (DA) Undersecretary for Fisheries and Livestock of
the Food Basket Allowance is the law which authorizes its
release. It is crystal clear that the DA Undersecretary has no
authority to grant any allowance to the employees of BFAR.
Section 4.5 of Budget Circular No. 16 dated November 28, 1998
states: All agencies are hereby prohibited from granting any food,
rice, gift checks, or any other form of incentives/allowances
except those authorized via Administrative Order by the
Office of the President. In the instant case, no Administrative
Order has been issued by the Office of
central.com.ph/sfsreader/session/0000017443683de0cb643eaf003600fb002c009e/t/?o=False 1/12
_______________
* EN BANC.
135
VOL. 562, AUGUST 13, 2008 135
Bureau of Fisheries and Aquatic Resources (BFAR) Employees

Union, Regional Office No. VII, Cebu City vs. Commission on
Audit
the President to exempt BFAR from the express prohibition

against the grant of any food, rice, gift checks, or any other form
of incentive/allowance to its employees.
Same; Same; Same; Under National Compensation Circular
No. 59, exceptions to the incentive allowance/fee/pay category are
those authorized under the General Appropriations Act (GAA) and
Section 33 of Presidential Decree (P.D.) No. 807; There is no law
authorizing the grant of the subject Food Basket Allowance.—The
Food Basket Allowance falls under the 14th category, that of
incentive allowance/fee/pay. Petitioner itself justified the Food
Basket Allowance as an incentive to the employees to encourage
them to be more productive and efficient. Under National
Compensation Circular No. 59, exceptions to the incentive
allowance/fee/pay category are those authorized under the
General Appropriations Act (GAA) and Section 33 of Presidential
Decree (P.D.) No. 807. Sec. 15(d) of the GAA for Fiscal Year 1999
or R.A. No. 8745 clearly prohibits the payment of honoraria,
allowances or other forms of compensation to any government
official or employee, except those specifically authorized by law.
There is no law authorizing the grant of the subject Food Basket
Allowance. Further, Sec. 33 of P.D. No. 807 or the Civil Service
Decree of the Philippines does not exempt the Food Basket
Allowance from the general rule.
PETITION for review on certiorari of the decision and

resolution of the Commission on Audit-Legal and
Adjudication Office.
The facts are stated in the opinion of the Court.
Navarro & Associates for petitioner.
The Solicitor General for respondent.
PUNO, C.J.:
On appeal are the Decision1 dated April 8, 2005 of

respondent Commission on Audit (COA) in LAO-N-2005-
119 upholding the disallowance by the COA Legal and

Adjudication
_______________
1 Rollo, pp. 37-39.
136
136 SUPREME COURT REPORTS ANNOTATED

Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
Office (COA-LAO), Regional Office No. VII, Cebu City of

the P10,000.00 Food Basket Allowance granted by BFAR to
each of its employees in 1999, and COA Resolution2 dated
August 5, 2005, denying petitioner’s motion for
reconsideration of said Decision.
First, the facts:
On October 18, 1999, petitioner Bureau of Fisheries and
Aquatic Resources (BFAR) Employees Union, Regional
Office No. VII, Cebu City issued Resolution No. 01, series of
1999 requesting the BFAR Central Office for a Food Basket
Allowance. It justified its request on the high cost of living,
i.e., “the increase in prices of petroleum products which
catapulted the cost of food commodities, has greatly
affected the economic conditions and living standard of the
government employees of BFAR Region VII and could
hardly sustain its need to cope up with the four (4) basic
needs, i.e., food, shelter, clothing and education.”3 It also
relied on the Employees Suggestions and Incentive Awards
System (ESIAS), pursuant to Book V of Executive Order
No. 292, or the Administrative Code of 1987, and approved
by the Civil Service Commission on December 3, 1996. The
ESIAS “includes the granting of incentives that will help
employees overcome present economic difficulties, boost
their morale, and further commitment and dedication to
public service.”4 Regional Director Corazon M. Corrales of
BFAR Region VII indorsed the Resolution, and Malcolm I.
Sarmiento, Jr., Director of BFAR recommended its
approval. Honorable Cesar M. Drilon, Jr., Undersecretary
for Fisheries and Livestock of the Department of
Agriculture, approved the request for Authority to Grant a
Gift Check or the Food Basket Allowance at the rate of
P10,000.00 each to the 130 employees of BFAR Region VII,
or in the total amount of
_______________
2 Id., p. 48.
3 Id., p. 27.
4 Id.
137
VOL. 562, AUGUST 13, 2008 137

Commission on Audit
P1,322,682.00.5 On the strength of the approval, Regional

Director Corrales released the allowance to the BFAR
employees.
On post audit, the Commission on Audit-Legal and
Adjudication Office (COA-LAO) Regional Office No. VII,
Cebu City disallowed the grant of Food Basket Allowance
under Notice of Disallowance No. 2003-022-101 (1999)
dated September 19, 2003. It ruled that the allowance had
no legal basis and that it violated: a) Sec. 15(d) of the
General Appropriations Act of 1999, prohibiting the
payment of honoraria, allowances, or other forms of
compensation to any government official or employee,
except those specifically authorized by law; b) par. 4.5 of
Budget Circular No. 16 dated November 28, 1998,
prohibiting the grant of food, rice, gift checks, or any other
form of incentives/allowances, except those authorized via
Administrative Order by the Office of the President; and c)
Sec. 12 of Republic Act (R.A.) No. 6758, or the Salary
Standardization Law of 1989, which includes all allowances
in the standardized salary rates, subject to certain
exceptions.
On February 26, 2004, BFAR Regional Office No. VII,
through Regional Director Corrales, moved for reconside-
ration and prayed for the lifting of the disallowance. It
argued that the grant of Food Basket Allowance would
enhance the welfare and productivity of the employees.
Further, it contended that the approval by the Honorable
Drilon, Undersecretary for Fisheries and Livestock, of the
said benefit was the law itself which vested the specific
authority for its release. The Commission on Audit-Legal
and Adjudication Office (COA-LAO) Regional Office No.
VII, Cebu City denied the motion.
Petitioner appealed to the Commission on Audit-Legal
and Adjudication Office (COA-LAO) National, Quezon City.
The appeal was denied in a Decision dated April 8, 2005.

Peti-
_______________
5 Rollo, p. 28.
138

Commission on Audit
tioner’s motion for reconsideration was likewise denied in a

Resolution dated August 5, 2005.
Hence, this appeal.
Petitioner cites the following grounds for its appeal:
“1. The disallowance in question is unconstitutional as it

contravenes the fundamental principle of the State enshrined
under Sections 9 and 10, Article II of the 1987 Constitution, which
provide as follows:
SEC. 9. The State shall promote a just and dynamic
social order that will ensure the prosperity and
independence of the nation and free the people from poverty
through policies that provide adequate social services,
promote full employment, a rising standard of living, and an
improved quality of life for all.
SEC. 10. The State shall promote social justice in all
phases of national development.6
2. The Undersecretary for Fisheries and Livestock is an
extension of the Secretary of Agriculture who is an alter-ego of the
President. His approval was tantamount to the authority from the
Office of the President, as contemplated in DBM Budget Circular
No. 16, dated November 28, 1998.7
3. The grant of the Food Basket Allowance is in conformity
with Sec. 12 of the Salary Standardization Law.”8
We deny the petition.

First, we rule on the issue of constitutionality. Petitioner
invokes the provisions of the 1987 Constitution on social
justice to warrant the grant of the Food Basket Allowance.
Time and again, we have ruled that the social justice
provisions of the Constitution are not self-executing
principles ready for enforcement through the courts. They
are merely statements of principles and policies. To give
them effect, legislative en-
_______________
6 Id., p. 17.
7 Rollo, p. 20.
8 Id., pp. 20-21.
139
VOL. 562, AUGUST 13, 2008 139

Commission on Audit
actment is required. As we held in Kilosbayan,

Incorporated v. Morato,9 the principles and state policies
enumerated in Article II and some sections of Article XII
are “not self-executing provisions, the disregard of which
can give rise to a cause of action in the courts. They do not
embody judicially enforceable constitutional rights but
guidelines for legislation.”10
Second, petitioner contends that the approval of the
Department of Agriculture (DA) Undersecretary for
Fisheries and Livestock of the Food Basket Allowance is
the law which authorizes its release. It is crystal clear that
the DA Undersecretary has no authority to grant any
allowance to the employees of BFAR. Section 4.5 of Budget
Circular No. 16 dated November 28, 1998 states:
“All agencies are hereby prohibited from granting any food,

rice, gift checks, or any other form of incentives/allowances
except those authorized via Administrative Order by the
Office of the President.”
In the instant case, no Administrative Order has been

issued by the Office of the President to exempt BFAR from
the express prohibition against the grant of any food, rice,
gift checks, or any other form of incentive/allowance to its
employees.
Petitioner argues that the grant of the Food Basket
Allowance does not violate Sec. 12 of R.A. No. 6758 or the
Salary Standardization Law. This law was passed to
standardize salary rates among government personnel and
do away with multiple allowances and other incentive
packages and the
_______________
9 G.R. No. 118910, July 17, 1995, 246 SCRA 540, 564.
10 Cited in Tañada v. Angara, 338 Phil. 546; 272 SCRA 18 (1997).
140

Commission on Audit
resulting differences in compensation among them.11 Sec.

12 of the law 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
service personnel stationed abroad; and such other additional
compensation not otherwise specified herein as may be
determined by the DBM [Department of Budget and
Management], 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.
Existing additional compensation of any national government
official or employee paid from local funds of a local government
unit shall be absorbed into the basic salary of said official or
employee and shall be paid by the National Government.”
Under Sec. 12, as quoted, all kinds of allowances are

integrated in the standardized salary rates. The exceptions
are:
“1. representation and transportation allowance (RATA);

2. clothing and laundry allowance;
3. subsistence allowance of marine officers and crew on board
government vessels;
4. subsistence allowance of hospital personnel;
5. hazard pay;
6. allowances of foreign service personnel stationed abroad;
and
7. such other additional compensation not otherwise specified
herein as may be determined by the DBM.”
_______________
11 Ambros v. COA, G.R. No. 159700, June 30, 2005, 462 SCRA 572,
597.
141
VOL. 562, AUGUST 13, 2008 141

Commission on Audit
Petitioner contends that the Food Basket Allowance falls

under the 7th category above, that of “other additional
determined by the DBM.”
The Court has had the occasion to interpret Sec. 12 of
R.A. No. 6758. In National Tobacco Administration v.
Commission on Audit,12 we held that under the first
sentence of Section 12, the benefits excluded from the
standardized salary rates are the “allowances” or those
which are usually granted to officials and employees of the
government to defray or reimburse the expenses incurred
in the performance of their official functions. These are the
RATA, clothing and laundry allowance, subsistence
allowance of marine officers and crew on board government
vessels and hospital personnel, hazard pay, and others, as
enumerated in the first sentence of Section 12. We further
ruled that the phrase “and such other additional
determined by the DBM” is a catch-all proviso for benefits
in the nature of allowances similar to those enumerated. In
Philippine Ports Authority v. Commission on Audit,13 we
explained that if these allowances were consolidated with
the standardized salary rates, then government officials or
employees would be compelled to spend their personal
funds in attending to their duties.
In the instant case, the Food Basket Allowance is
definitely not in the nature of an allowance to reimburse
expenses incurred by officials and employees of the
government in the performance of their official functions. It
is not payment in consideration of the fulfillment of official
duty. It is a form of financial assistance to all officials and
employees of BFAR. Petitioner itself stated that the Food
Basket Allowance has the purpose of alleviating the
economic condition of BFAR employees.
_______________
12 370 Phil. 793; 311 SCRA 755 (1999).

13 G.R. No. 100773, October 16, 1992, 214 SCRA 653 (1992).
142


Commission on Audit
Next, petitioner relies on National Compensation

Circular No. 59 dated September 30, 1989, issued by the
DBM, which is the “List of Allowances/Additional
Compensation of Government Officials and Employees
which shall be Deemed Integrated into the Basic Salary.”
The list enumerates the following allowances/additional
compensation which shall be incorporated in the basic
salary, hence, may no longer be granted to government
employees:
1. Cost of Living Allowance (COLA);

2. Inflation connected allowance;
3. Living Allowance;
4. Emergency Allowance;
5. Additional Compensation of Public Health Nurses assigned
to public health nursing;
6. Additional Compensation of Rural Health Physicians;
7. Additional Compensation of Nurses in Malacañang Clinic;
8. Nurses Allowance in the Air Transportation Office;
9. Assignment Allowance of School Superintendents;
10. Post allowance of Postal Service Office employees;
11. Honoraria/allowances which are regularly given except
the following:
a. those for teaching overload;
b. in lieu of overtime pay;
c. for employees on detail with task forces/special
projects;
d. researchers, experts and specialists who are
acknowledged authorities in their field of specialization;
e. lecturers and resource persons;
f. Municipal Treasurers deputized by the Bureau of
Internal Revenue to collect and remit internal revenue
collections; and
g. Executive positions in State Universities and
Colleges filled by designation from among their faculty
members.
143
VOL. 562, AUGUST 13, 2008 143

Bureau of Fisheries and Aquatic Resources (BFAR) Employees
Union, Regional Office No. VII, Cebu City vs. Commission on
Audit
12. Subsistence Allowance of employees except those

authorized under EO [Executive Order] No. 346 and uniformed
personnel of the Armed Forces of the Philippines and Integrated
National Police;
13. Laundry Allowance of employees except those
hospital/sanitaria personnel who attend directly to patients and
who by the nature of their duties are required to wear uniforms,
prison guards and uniformed personnel of the Armed Forces of
the Philippines and Integrated National Police; and
14. Incentive allowance/fee/pay except those authorized under
the General Appropriations Act and Section 33 of P.D. No. 807.
Petitioner invokes the rule of statutory construction that

“what is not included is excluded.” Inclusio unius est
exclusio alterius. Petitioner claims that the Food Basket
Allowance is distinct and separate from the specific
allowances/additional compensation listed in the circular.
Again, we reject petitioner’s contention. The Food
Basket Allowance falls under the 14th category, that of
incentive allowance/fee/pay. Petitioner itself justified the
Food Basket Allowance as an incentive to the employees to
encourage them to be more productive and efficient.14
Under National Compensation Circular No. 59, exceptions
to the incentive allowance/fee/pay category are those
authorized under the General Appropriations Act (GAA)
and Section 33 of Presidential Decree (P.D.) No. 807. Sec.
15(d) of the GAA for Fiscal Year 1999 or R.A. No. 8745
clearly prohibits the payment of honoraria, allowances or
other forms of compensation to any government official or
employee, except those specifically authorized by law.
There is no law authorizing the grant of the subject Food
Basket Allowance. Further, Sec. 33 of P.D. No. 807 or the
Civil Service Decree of the Philippines does not exempt the
Food Basket Allowance from the general rule. Sec. 33
states:
_______________
14 Rollo, p. 21.
144

Commission on Audit
“Section 33. Employee Suggestions and Incentive Award

System.—There shall be established a government-wide employee
suggestions and incentive awards system which shall be
administered under such rules, regulations, and standards as
may be promulgated by the Commission.
In accordance with rules, regulations, and standards
promulgated by the Commission, the President or the head of
each department or agency is authorized to incur whatever
necessary expenses involved in the honorary recognition of
subordinate officers and employees of the government who by
their suggestions, inventions, superior accomplishment, and other
personal efforts contribute to the efficiency, economy, or other
improvement of government operations, or who perform such
other extraordinary acts or services in the public interest in
connection with, or in relation to, their official employment.”
We are not convinced that the Food Basket Allowance

falls under the incentive award system contemplated
above. The decree speaks of suggestions, inventions,
superior accomplishments, and other personal efforts
contributed by an employee to the efficiency, economy, or
other improvement of government operations, or other
extraordinary acts or services performed by an employee in
the public interest in connection with, or in relation to, his
official employment. In the instant case, the Food Basket
Allowance was granted to all BFAR employees, without
distinction. It was not granted due to any extraordinary
contribution or exceptional accomplishment by an
employee. The Food Basket Allowance was primarily an
economic monetary assistance to the employees.
Lastly, we note, as the Office of the Solicitor General, on
behalf of respondent did, that petitioner failed to exhaust
its administrative remedies. It stopped seeking remedies at
the level of respondent’s Legal and Adjudication Office. It
failed to appeal the latter’s adverse decision to the
Commission on Audit proper. The consequence for failure
to exhaust administrative remedies is clear: the
disallowance, as ruled by the Commission on Audit-Legal
and Adjudication Office Regional
145
VOL. 562, AUGUST 13, 2008 145

Commission on Audit
Office No. VII, Cebu City and upheld by the Commission on

Audit-Legal and Adjudication Office National, Quezon City,
became final and executory. Sections 48 and 51 of
Presidential Decree No. 1445, or the Government Auditing
Code of the Philippines provide:
“Section 48. Appeal from decision of auditors.—Any person

aggrieved by the decision of an auditor of any government agency
in the settlement of an account or claim may, within six months
from receipt of a copy of the decision, appeal in writing to the
Commission.
Section 51. Finality of decisions of the Commission or any
auditor.—A decision of the Commission or of any auditor upon
any matter within its or his jurisdiction, if not appealed as herein
provided, shall be final and executory.”
IN VIEW WHEREOF, the petition is DENIED. The

Decision and Resolution of the Commission on Audit-Legal
and Adjudication Office dated April 8, 2005 and August 5,
2005, respectively, in LAO-N-2005-119, are AFFIRMED.
SO ORDERED.
Quisumbing, Ynares-Santiago, Carpio, Austria-Mar-

tinez, Corona, Carpio-Morales, Azcuna, Tinga, Chico-
Nazario, Velasco, Jr., Reyes, Leonardo-De Castro and
Brion, JJ., concur.
Nachura, J., No Part.
Petition denied, judgment and resolution of COA-Legal

and Adjudication Office affirmed.
Note.—The Constitution specifically vests in the

Commission on Audit the authority to determine whether
the government entities comply with laws and regulations
in disbursing government funds. (De Jesus vs. Commission
on Audit, 422 SCRA 287 [2004])
——o0o——
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8/31/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 562

G.R. No. 169815. August 13, 2008.*

BUREAU OF FISHERIES AND AQUATIC RESOURCES

Constitutional Law; Social Justice; The social justice

VOL. 562, AUGUST 13, 2008 135

Bureau of Fisheries and Aquatic Resources (BFAR) Employees

the President to exempt BFAR from the express prohibition

PETITION for review on certiorari of the decision and

On appeal are the Decision1 dated April 8, 2005 of

119 upholding the disallowance by the COA Legal and

1 Rollo, pp. 37-39.

136 SUPREME COURT REPORTS ANNOTATED

Office (COA-LAO), Regional Office No. VII, Cebu City of

VOL. 562, AUGUST 13, 2008 137

P1,322,682.00.5 On the strength of the approval, Regional

The appeal was denied in a Decision dated April 8, 2005.

138 SUPREME COURT REPORTS ANNOTATED

tioner’s motion for reconsideration was likewise denied in a

“1. The disallowance in question is unconstitutional as it

We deny the petition.

VOL. 562, AUGUST 13, 2008 139

actment is required. As we held in Kilosbayan,

“All agencies are hereby prohibited from granting any food,

In the instant case, no Administrative Order has been

140 SUPREME COURT REPORTS ANNOTATED

resulting differences in compensation among them.11 Sec.

“Consolidation of Allowances and Compensation.—All

Under Sec. 12, as quoted, all kinds of allowances are

“1. representation and transportation allowance (RATA);

VOL. 562, AUGUST 13, 2008 141

Petitioner contends that the Food Basket Allowance falls

12 370 Phil. 793; 311 SCRA 755 (1999).

142 SUPREME COURT REPORTS ANNOTATED

Bureau of Fisheries and Aquatic Resources (BFAR)

Next, petitioner relies on National Compensation

1. Cost of Living Allowance (COLA);

VOL. 562, AUGUST 13, 2008 143

12. Subsistence Allowance of employees except those

Petitioner invokes the rule of statutory construction that

144 SUPREME COURT REPORTS ANNOTATED

“Section 33. Employee Suggestions and Incentive Award

We are not convinced that the Food Basket Allowance

VOL. 562, AUGUST 13, 2008 145

Office No. VII, Cebu City and upheld by the Commission on

“Section 48. Appeal from decision of auditors.—Any person

IN VIEW WHEREOF, the petition is DENIED. The

Quisumbing, Ynares-Santiago, Carpio, Austria-Mar-

Petition denied, judgment and resolution of COA-Legal

Note.—The Constitution specifically vests in the

© Copyright 2020 Central Book Supply, Inc. All rights reserved.

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