Enforcement of Money Judgments against Government Agencies

Despite a final and executory judgment validating a money claim against an

agency or instrumentality of the Government, the filing of a claim with the
Commission on Audit (COA) is a pre-requisite to payment. 1 In Commissioner of
Public Highways v. Hon. San Diego (1970), the Supreme Court ruled that,
The universal rule that where the State gives its consent
to be sued by private parties either by general or special
law, it may limit claimant's action "only up to the
completion of proceedings anterior to the stage of
execution" and that the power of the Courts ends when
the judgment is rendered, since government funds and
properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on
obvious considerations of public policy. Disbursements of
public funds must be covered by the corresponding
appropriation as required by law. The functions and public
services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects, as appropriated
by law.2
Section 2(1) of Article IX-D of the 1987 Constitution confers upon COA the power,
authority, and duty to examine, audit, and settle all accounts pertaining to the
revenue and receipts of, and expenditures or uses of funds and property, owned or
held in trust by, or pertaining to, the Government, or any of its subdivisions,
agencies, or instrumentalities, including government-owned or controlled
corporations with original charters xxx. (emphasis supplied)
Under P.D. 1445 or the State Audit Code of the Philippines, COAs power
extends to the settlement of all debts and claims of any sort due from or owing to
the Government or any of its subdivisions, agencies and instrumentalities. The said
jurisdiction extends to all government-owned or controlled corporations, xxx.3
(emphasis supplied)
In University of the Philippines v. Hon. Dizon (2012), the Court held that
notwithstanding the final and executory decision of the Regional Trial Court
validating the claim against the University of the Philippines, the claimants must
first seek the approval of the COA of their monetary claim.

1 Rallos v. City of Cebu, G.R. No. 202651, August 28, 2013.

2 The Commissioner of Public Highways v. Hon. San Diego, G.R. No. L-30098,
February 18, 1970.
3 Section 26, P.D. 1445.
1

In National Electrification Administration v. Morales (2007), National

Electrification Administration (NEA), a GOCC, was held by the Court to be a juridical
personality separate and distinct from the government, with capacity to sue and be
sued. Hence, NEA cannot evade execution; its funds may be garnished or levied
upon in satisfaction of a judgment rendered against it. However, before execution
may proceed against it, a claim for payment of the judgment award must first be
filed with the COA.4
Lastly, the Supreme Court issued Administrative Circular No. 10-2000, which
states that upon determination of state liability, the prosecution, enforcement or
satisfaction thereof must still be pursued in accordance with the rules and
procedures laid down in P.D. No. 1445, otherwise known as the Government
Auditing Code of the Philippines. 5 In turn, COA issued Resolution No. 2000-3661 on
December 19, 2000, which quoted in full SC Administrative Circular No. 10-2000.

4 National Electrification Administration v. Morales, G.R. No. 154200, July 24, 2007.
5 Supreme Court Administrative Circular No. 10-2000 captioned "Exercise of Utmost
Caution, Prudence and Judiciousness in the Issuance of Writs of Execution to Satisfy
Money Judgments against Government Agencies and Local Government Units",
issued on October 25, 2000.
2