Republic of the Philippines Regional Director Corrales released the allowance to the

SUPREME COURT BFAR employees.

Manila
On post audit, the Commission on Audit – Legal and
EN BANC Adjudication Office (COA-LAO) Regional Office No. VII,
Cebu City disallowed the grant of Food Basket
G.R. No. 169815             August 13, 2008 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.
BUREAU OF FISHERIES AND AQUATIC RESOURCES 15(d) of the General Appropriations Act of 1999,
(BFAR) EMPLOYEES UNION, REGIONAL OFFICE NO. prohibiting the payment of honoraria, allowances, or
VII, CEBU CITY, petitioner, other forms of compensation to any government official
vs. or employee, except those specifically authorized by
COMMISSION ON AUDIT, respondent. law; b) par. 4.5 of Budget Circular No. 16 dated
November 28, 1998, prohibiting the grant of food, rice,
DECISION gift checks, or any other form of incentives/allowances,
except those authorized via Administrative Order by the
PUNO, C.J.: 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
On appeal are the Decision1 dated April 8, 2005 of salary rates, subject to certain exceptions.
respondent Commission on Audit (COA) in LAO-N-
2005-119 upholding the disallowance by the COA Legal
and Adjudication Office (COA-LAO), Regional Office No. On February 26, 2004, BFAR Regional Office No. VII,
VII, Cebu City of the P10,000.00 Food Basket Allowance through Regional Director Corrales, moved for
granted by BFAR to each of its employees in 1999, and reconsideration and prayed for the lifting of the
COA Resolution2 dated August 5, 2005, denying disallowance. It argued that the grant of Food Basket
petitioner’s motion for reconsideration of said Decision. Allowance would enhance the welfare and productivity
of the employees. Further, it contended that the
approval by the Honorable Drilon, Undersecretary for
First, the facts: Fisheries and Livestock, of the said benefit was the law
itself which vested the specific authority for its release.
On October 18, 1999, petitioner Bureau of Fisheries and The Commission on Audit – Legal and Adjudication
Aquatic Resources (BFAR) Employees Union, Regional Office (COA-LAO) Regional Office No. VII, Cebu City
Office No. VII, Cebu City issued Resolution No. 01, series denied the motion.
of 1999 requesting the BFAR Central Office for a Food
Basket Allowance. It justified its request on the high Petitioner appealed to the Commission on Audit – Legal
cost of living, i.e., "the increase in prices of petroleum and Adjudication Office (COA-LAO) National, Quezon
products which catapulted the cost of food City. The appeal was denied in a Decision dated April 8,
commodities, has greatly affected the economic 2005. Petitioner’s motion for reconsideration was
conditions and living standard of the government likewise denied in a Resolution dated August 5, 2005.
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 Hence, this appeal.
the Employees Suggestions and Incentive Awards
System (ESIAS), pursuant to Book V of Executive Order Petitioner cites the following grounds for its appeal:
No. 292, or the Administrative Code of 1987, and
approved by the Civil Service Commission on December 1. The disallowance in question is
3, 1996. The ESIAS "includes the granting of incentives unconstitutional as it contravenes the
that will help employees overcome present economic fundamental principle of the State enshrined
difficulties, boost their morale, and further commitment under Sections 9 and 10, Article II of the 1987
and dedication to public service."4 Regional Director Constitution, which provide as follows:
Corazon M. Corrales of BFAR Region VII indorsed the
Resolution, and Malcolm I. Sarmiento, Jr., Director of
BFAR recommended its approval. Honorable Cesar M. SEC. 9. The State shall promote a just
Drilon, Jr., Undersecretary for Fisheries and Livestock of and dynamic social order that will
the Department of Agriculture, approved the request for ensure the prosperity and
Authority to Grant a Gift Check or the Food Basket independence of the nation and free
Allowance at the rate of P10,000.00 each to the 130 the people from poverty through
employees of BFAR Region VII, or in the total amount policies that provide adequate social
of P1,322,682.00.5 On the strength of the approval, services, promote full employment, a
 rising standard of living, and an Petitioner argues that the grant of the Food Basket
improved quality of life for all. Allowance does not violate Sec. 12 of R.A. No. 6758 or
the Salary Standardization Law. This law was passed to
SEC. 10. The State shall promote standardize salary rates among government personnel
social justice in all phases of national and do away with multiple allowances and other
development.6 incentive packages and the resulting differences in
compensation among them.11 Sec. 12 of the law
provides:
2. The Undersecretary for Fisheries and
Livestock is an extension of the Secretary of
Agriculture who is an alter-ego of the Consolidation of Allowances and
President. His approval was tantamount to the Compensation. — All allowances, except for
authority from the Office of the President, as representation and transportation allowances;
contemplated in DBM Budget Circular No. 16, clothing and laundry allowances; subsistence
dated November 28, 1998.7 allowance of marine officers and crew on
board government vessels and hospital
personnel; hazard pay; allowances of foreign
3. The grant of the Food Basket Allowance is in service personnel stationed abroad; and such
conformity with Sec. 12 of the Salary other additional compensation not otherwise
Standardization Law.8 specified herein as may be determined by the
DBM [Department of Budget and
We deny the petition. Management], shall be deemed included in the
standardized salary rates herein prescribed.
First, we rule on the issue of constitutionality. Petitioner Such other additional compensation, whether
invokes the provisions of the 1987 Constitution on in cash or in kind, being received by
social justice to warrant the grant of the Food Basket incumbents only as of July 1, 1989 not
Allowance. Time and again, we have ruled that the integrated into the standardized salary rates
social justice provisions of the Constitution are not self- shall continue to be authorized.
executing principles ready for enforcement through the
courts. They are merely statements of principles and Existing additional compensation of any
policies. To give them effect, legislative enactment is national government official or employee paid
required. As we held in Kilosbayan, Incorporated v. from local funds of a local government unit
Morato,9 the principles and state policies enumerated shall be absorbed into the basic salary of said
in Article II and some sections of Article XII are "not official or employee and shall be paid by the
self-executing provisions, the disregard of which can National Government.
give rise to a cause of action in the courts. They do not
embody judicially enforceable constitutional rights but Under Sec. 12, as quoted, all kinds of allowances are
guidelines for legislation." 10 integrated in the standardized salary rates. The
exceptions are:
Second, petitioner contends that the approval of the
Department of Agriculture (DA) Undersecretary for 1. representation and transportation
Fisheries and Livestock of the Food Basket Allowance is allowance (RATA);
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 2. clothing and laundry allowance;
Budget Circular No. 16 dated November 28, 1998 states:
3. subsistence allowance of marine officers
All agencies are hereby prohibited from and crew on board government vessels;
granting any food, rice, gift checks, or any
other form of incentives/allowances except 4. subsistence allowance of hospital personnel;
those authorized via Administrative Order
by the Office of the President. 5. hazard pay;

In the instant case, no Administrative Order has been 6. allowances of foreign service personnel
issued by the Office of the President to exempt BFAR stationed abroad; and
from the express prohibition against the grant of any
food, rice, gift checks, or any other form of
incentive/allowance to its employees. 7. such other additional compensation not
otherwise specified herein as may be
determined by the DBM.
Petitioner contends that the Food Basket Allowance 5. Additional Compensation of Public Health
falls under the 7th category above, that of "other Nurses assigned to public health nursing;
additional compensation not otherwise specified herein
as may be determined by the DBM." 6. Additional Compensation of Rural Health
Physicians;
The Court has had the occasion to interpret Sec. 12 of
R.A. No. 6758. In National Tobacco Administration v. 7. Additional Compensation of Nurses in
Commission on Audit,12 we held that under the first Malacañ ang Clinic;
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 8. Nurses Allowance in the Air Transportation
the government to defray or reimburse the expenses Office;
incurred in the performance of their official functions.
These are the RATA, clothing and laundry allowance, 9. Assignment Allowance of School
subsistence allowance of marine officers and crew on Superintendents;
board government vessels and hospital personnel,
hazard pay, and others, as enumerated in the first 10. Post allowance of Postal Service Office
sentence of Section 12. We further ruled that the phrase employees;
"and such other additional compensation not otherwise
specified herein as may be determined by the DBM" is a
catch-all proviso for benefits in the nature of allowances 11. Honoraria/allowances which are regularly
similar to those enumerated. In Philippine Ports given except the following:
Authority v. Commission on Audit,13 we explained
that if these allowances were consolidated with the a. those for teaching overload;
standardized salary rates, then government officials or
employees would be compelled to spend their personal b. in lieu of overtime pay;
funds in attending to their duties.
c. for employees on detail with task
In the instant case, the Food Basket Allowance is forces/special projects;
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 d. researchers, experts and
functions. It is not payment in consideration of the specialists who are acknowledged
fulfillment of official duty. It is a form of financial authorities in their field of
assistance to all officials and employees of BFAR. specialization;
Petitioner itself stated that the Food Basket Allowance
has the purpose of alleviating the economic condition of e. lecturers and resource persons;
BFAR employees.
f. Municipal Treasurers deputized by
Next, petitioner relies on National Compensation the Bureau of Internal Revenue to
Circular No. 59 dated September 30, 1989, issued by the collect and remit internal revenue
DBM, which is the "List of Allowances/Additional collections; and
Compensation of Government Officials and Employees
which shall be Deemed Integrated into the Basic Salary." g. Executive positions in State
The list enumerates the following Universities and Colleges filled by
allowances/additional compensation which shall be designation from among their faculty
incorporated in the basic salary, hence, may no longer members.
be granted to government employees:
12. Subsistence Allowance of employees
1. Cost of Living Allowance (COLA); except those authorized under EO [Executive
Order] No. 346 and uniformed personnel of
2. Inflation connected allowance; the Armed Forces of the Philippines and
Integrated National Police;
3. Living Allowance;
13. Laundry Allowance of employees except
4. Emergency Allowance; 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 We are not convinced that the Food Basket Allowance
Integrated National Police; and falls under the incentive award system contemplated
above. The decree speaks of suggestions, inventions,
14. Incentive allowance/fee/pay except those superior accomplishments, and other personal efforts
authorized under the General Appropriations contributed by an employee to the efficiency, economy,
Act and Section 33 of P.D. No. 807. 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
Petitioner invokes the rule of statutory construction relation to, his official employment. In the instant case,
that "what is not included is excluded." Inclusio unius the Food Basket Allowance was granted to all BFAR
est exclusio alterius. Petitioner claims that the Food employees, without distinction. It was not granted due
Basket Allowance is distinct and separate from the to any extraordinary contribution or exceptional
specific allowances/additional compensation listed in accomplishment by an employee. The Food Basket
the circular. Allowance was primarily an economic monetary
assistance to the employees.
Again, we reject petitioner’s contention. The Food
Basket Allowance falls under the 14th category, that of Lastly, we note, as the Office of the Solicitor General, on
incentive allowance/fee/pay. Petitioner itself justified behalf of respondent did, that petitioner failed to
the Food Basket Allowance as an incentive to the exhaust its administrative remedies. It stopped seeking
employees to encourage them to be more productive remedies at the level of respondent’s Legal and
and efficient.14 Under National Compensation Circular Adjudication Office. It failed to appeal the latter’s
No. 59, exceptions to the incentive allowance/fee/pay adverse decision to the Commission on Audit proper.
category are those authorized under the General The consequence for failure to exhaust administrative
Appropriations Act (GAA) and Section 33 of Presidential remedies is clear: the disallowance, as ruled by the
Decree (P.D.) No. 807. Sec. 15(d) of the GAA for Fiscal Commission on Audit – Legal and Adjudication Office
Year 1999 or R.A. No. 8745 clearly prohibits the Regional Office No. VII, Cebu City and upheld by the
payment of honoraria, allowances or other forms of Commission on Audit – Legal and Adjudication Office
compensation to any government official or employee, National, Quezon City, became final and executory.
except those specifically authorized by law. There is no Sections 48 and 51 of Presidential Decree No. 1445, or
law authorizing the grant of the subject Food Basket the Government Auditing Code of the Philippines
Allowance. Further, Sec. 33 of P.D. No. 807 or the Civil provide:
Service Decree of the Philippines does not exempt the
Food Basket Allowance from the general rule. Sec. 33
states: Section 48. Appeal from decision of auditors. –
Any person aggrieved by the decision of an
auditor of any government agency in the
Section 33. Employee Suggestions and settlement of an account or claim may, within
Incentive Award System. There shall be six months from receipt of a copy of the
established a government-wide employee decision, appeal in writing to the Commission.
suggestions and incentive awards system
which shall be administered under such rules,
regulations, and standards as may be Section 51. Finality of decisions of the
promulgated by the Commission. 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
In accordance with rules, regulations, and herein provided, shall be final and executory.
standards promulgated by the Commission,
the President or the head of each department
or agency is authorized to incur whatever IN VIEW WHEREOF, the petition is DENIED. The
necessary expenses involved in the honorary Decision and Resolution of the Commission on Audit –
recognition of subordinate officers and Legal and Adjudication Office dated April 8, 2005 and
employees of the government who by their August 5, 2005, respectively, in LAO-N-2005-119,
suggestions, inventions, superior are AFFIRMED.
accomplishment, and other personal efforts
contribute to the efficiency, economy, or other SO ORDERED.
improvement of government operations, or
who perform such other extraordinary acts or REYNATO S. PUNO
services in the public interest in connection Chief Justice
with, or in relation to, their official
employment.
 6
WE CONCUR:  Id., p. 17.

7
 Rollo, p. 20.
LEONARDO A. QUISUMBING
Associate Justice
8
 Id., pp. 20-21.
CONSUELO YNARES-SANTIAGO ANTONIO T. CARPIO
Associate Justice Associate Justice 9
 G.R. No. 118910, July 17, 1995, 246 SCRA
540, 564.
MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA
Associate Justice Associate Justice 10
 Cited in Tañada v. Angara, 338 Phil. 546
(1997).
CONCHITA CARPIO MORALES ADOLFO S. AZCUNA
Associate Justice Associate Justice
11
 Ambros v. COA, G.R. No. 159700, June 30,
DANTE O. TINGA MINITA V. CHICO-NAZARIO 2005, 462 SCRA 572, 597.
Associate Justice Associate Justice
12
 370 Phil. 793 (1999).
PRESBITERO J. VELASCO, JR. *ANTONIO EDUARDO B. NACHURA
Associate Justice Associate Justice 13
 G.R. No. 100773, October 16, 1992, 214
SCRA 653 (1992).
RUBEN T. REYES TERESITA J. LEONARDO-DE CASTRO
Associate Justice Associate Justice
14
 Rollo, p. 21.
ARTURO D. BRION
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it

is hereby certified that the conclusions in the above
Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO
Chief Justice

Footnotes

* No part

1
 Rollo, pp. 37-39.

2
 Id., p. 48.

3
 Id., p. 27.

4
 Id.

5
 Rollo, p. 28.