(The case of Philippine Health Insurance Corporation vs. Commission on Audit, G.R. No. 255569, February 27, 2024)
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AT A GLANCE:
The case revolves around the legality of benefits granted by the Philippine Health Insurance Corporation (PHIC) under Notices of Disallowance (NDs). The central issue is whether PHIC had the authority to grant these benefits, which include productivity bonuses and allowances, beyond its standard compensation.
Commission on Audit (COA) to the Philippine Health Insurance Corporation (PHIC), totaling PHP43,810,985.26. The NDs were issued for:
- ND No. 10-001-717 (08) dated March 12, 2010: Disallowed PHP12,758,649.75 for Withholding Tax on the 2008 Productivity Incentive Bonus.
- ND No. 10-002-725 (09) dated March 29, 2010: Disallowed PHP10,460,000.00 for the Collective Negotiation Agreement Incentive included in the 2008 Productivity Incentive Bonus.
- ND No. 10-003-725 (09) dated April 13, 2010: Disallowed PHP18,347,758.02 for the Presidential Citation Gratuity for 2009.
- ND No. 10-004-725 (09) dated April 21, 2010: Disallowed PHP2,244,577.49 for Shuttle Service Assistance for 2009.
PHIC challenged these disallowances by filing a Consolidated Memorandum of Appeal with the COA-Corporate Government Sector on August 24, 2010.
The case revolves around the legality of benefits granted by the Philippine Health Insurance Corporation (PHIC) under Notices of Disallowance (NDs). The central issue is whether PHIC had the authority to grant these benefits, which include productivity bonuses and allowances, beyond its standard compensation.
According to Article IX-B, Section 8 of the 1987 Constitution, public officers and employees cannot receive additional compensation unless explicitly authorized by law. The statutory authority for additional medical benefits is outlined in Presidential Decree No. 1597, which remains in effect. This decree mandates executive approval for any additional benefits, and government entities must comply with compensation laws and regulations.
PHIC’s fiscal autonomy, under Republic Act No. 7875, does not exempt it from these laws. The argument that presidential approval for the Rationalization Plan, as indicated in letters from Secretary Duque to President Arroyo, implies approval for the disallowed benefits is flawed. These letters did not specifically address the benefits in question but rather sought approval for organizational changes within PHIC.
Furthermore, PHIC did not adhere to regulations governing the Collective Negotiation Agreement (CNA) benefits. The CNA failed to specify the funding source and provided fixed benefits contrary to regulations requiring that benefits be based on annual savings.
Overall, PHIC’s disbursements of allowances lacked formal authorization and did not comply with relevant regulations, undermining their legality and prompting the disallowance.
Source:
Philippine Health Insurance Corporation vs. Commission on Audit, G.R. No. 255569, February 27, 2024
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