SC: PEZA ex-officio board members cannot receive per diems

The Supreme Court has affirmed a Commission on Audit (COA) decision disallowing the payment of P5.45 million in per diems the Board of Directors of the Philippine Economic Zone Authority (PEZA), whose members then included Associate Justice Arturo Brion, Environment Secretary Ramon Paje, and Labor Secretary Rosalinda Baldoz.

 

The 2009 COA ruling was affirmed after the high court, in a 13-page ruling penned by Associate Justice Martin Villarama, dismissed the PEZA's petition for certiorari or review for being "devoid of merit".  

The high court said it had already been established in a ruling in 2004 that the grant of per diem to ex-officio members of the PEZA Board lacked legal basis.

 

Disallowed per diems  

That 2004 ruling was on the case docketed as Bitonio, Jr. v. Commission on Audit, in which the court decided that the Republic Act 8748 "purposely deleted" the last paragraph of Section 11 of Republic Act 7916 authorizing the grant of per diems to ex-officio members of the PEZA Board. The court ruled that the last paragraph "was in conflict with the proscription laid down in the 1987 Constitution."  

"PEZA's insistence that there is legal basis in its grant of per diems to ex-officio members of its Board does not hold water," the SC said in its latest ruling.  

From 2001 to 2006, ex-officio members and their representatives to PEZA Board were given per diems totaling P5,451,500.00.  

The recipients of the per diems were:

 

 

SC affirms COA findings  

In March 2002, the ex-officio members of the PEZA Board of Directors were disallowed from getting per diems following a Senate Committee Report saying such payments were unconstitutional.  

The Commission on Audit (COA) affirmed the disallowance order in January 2006.  

Cyril del Callar, one of the people who received per diem payments from PEZA, filed a petition for certiorari contesting a March 2006 COA ruling that affirmed the March 2002 disallowance order. The SC sided with COA and dismissed Del Callar's petition in April 2006.  

The COA auditor at PEZA issued a notice of disallowance on payments in September 2007.

 

'Good faith' defense rejected  

PEZA's motions for reconsideration filed with the Corporate Audit Office II in October 2007 and with the Office of the Cluster Director of the COA in January 2008, as well as a petition for review filed with COA in September 2009 were all denied.  

In one of PEZA's motions for reconsideration, PEZA director general Lilia de Lima claimed the payment of per diems was done "in good faith" since the SC ruling stopping it was not yet final and executory.  

"Since the issue on the propriety of giving per diems to ex-officio members was still unresolved, and because PEZA firmly believed that it had legal basis, it continued to pay the per diems despite knowledge and receipt of NDs. Good faith, therefore, guided the PEZA in releasing the payments," De Lima said.  

But the high court did not give credence to PEZA's claim of good faith, saying one can invoke it only if he or she is in a "state of mind denoting honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry... with absence of all information. notice, or benefit, or belief of fats which render transaction unconscientious."  

"Definitely, PEZA cannot claim that it was not aware of circumstances pointing to the possible illegality of the disbursements of per diems to the ex-officio members of the Board," the high court said. — ELR, GMA News