CASE 120

Philippine Economic Zone Authority (PEZA) vs. Commission on Audit 675 SCRA 513 ,
July 03, 2012

FACTS OF THE CASE

PEZA has 13 members which include Undersecretaries which serve in ex office

capacity and were granted per diem by PEZA for every attendance in a board meeting.
The auditor issued Notice of Disallowance for the payment of the per diems to ex officio
members amounting to PhP5.4Mn for the period 2001-2006. The PEZA move to
reconsider the disallowance. However, the COA denied the PEZA’s petition. Hence, the
petition to Supreme Court.

ISSUE OF THE CASE

Does the PEZA have legal basis in granting per diems to the ex officio members of its
Board?

DECISION

No, PEZA has no legal basis to pay ex officio members of its Board. 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. In Civil Liberties
Union, this Court clarified the prohibition under Section 13, Article VII of the Constitution
and emphasized that a public official holding an ex officio position as provided by law
has no right to receive additional compensation for the ex officio position.