G.R. No. 210314 Concurring Opinion

G.R. No. 210314, October 12, 2021,
♦ Decision, Hernando, [J]
♦ Concurring Opinion, Perlas-Bernabe, [J]
♦ Separate Opinion, Leonen, [J]
♦ Concurring Opinion, Caguioa, [J]
♦ Concurring Opinion, Lazaro-Javier, [J]
♦ Separate Concurring Opinion, Zalameda, [J]

BANGKO SENTRAL NG PILIPINAS, PETITIONER, VS. THE COMMISSION ON AUDIT, RESPONDENT.

The ponencia astutely clarifies two unique and material points - the extent of the Commission on Audit's (COA) constitutionally-guaranteed powers, and the nature of no less than the Bangko Sentral ng Pilipinas (BSP). I agree with the ponencia's treatment of both issues, and I write only to emphasize the importance of how the first matter was disposed of in this case.

Subject of this case is COA's Resolution No. 2011-007, which was a ruling on a disputed Audit Observation Memorandum (AOM) covering only dividends remitted by the BSP from 2003 to 2005. In the resolution, the COA ruled that the BSP Charter had been repealed by Republic Act (R.A.) No. 7656,1 the result of which was that the BSP could not deduct reserves of any nature from its earnings which were to be remitted to the National Government as dividends. The resolution also recognized a Memorandum of Agreement (MOA) entered into among the COA, the Department of Finance (DOF), and the BSP which settled the dividends covered by the AOM, as well as those payable for 2006. In the agreement, the parties undertook to "diligently work towards a mutually acceptable and legal arrangement for the subsequent dividend payments and the account settlement consistent with [the] agreements between BSP and DOF and with due regard to the BSP's unique functions and responsibilities as central monetary authority of the country."2 Considering that its liabilities had been settled through the MOA, the BSP no longer appealed from the COA's ruling on its dividends from 2003 to 2005.

Despite recognizing the MOA, however, the COA also declared that the BSP may not deduct reserves from its net earnings for 2007 onwards. The COA declared that its ruling on this matter had become final, executory, and immutable because the BSP no longer appealed. The COA also subsequently issued a letter to the BSP dated July 15, 2011, explicitly declaring its Resolution No. 2011-007 as "concrete precedent" for dividends to be issued in 2007 onwards. The same stance was echoed in its assailed Decision dated September 7, 2012, which ultimately prompted the BSP to bring the case before the Court upon a petition for certiorari.

Some observations on this matter: first, at the time COA's Resolution No. 2011-007 was issued, no AOM or Notice of Disallowance (ND) had been issued against any dividends remitted from 2007 onwards. The COA's assailed Resolution dealt only with dividends from 2003 to 2005, and the MOA settled only the dividends up to 2006. This runs against the usual and proper procedure under the COA's own Rules and, had it been allowed, would have foreclosed any possible future review by the Court of the COA's interpretation of the law governing the use of the BSP's dividends.

To emphasize, the COA was effectively ruling upon future dividends which were not submitted to it for review. It was already executing audit observations which had not yet been issued. This is clear from the fallo of the assailed Decision:

WHEREFORE, the foregoing premises considered, this Commission reiterates its ruling in COA [Resolution] No. 2011-007 dated January 25, 2011. Accordingly, this Commission rules with FINALITY that no reserve for whatever purpose shall be deducted from the BSP's net earnings/income in the computation of dividends to be remitted to the NG. The Supervising Auditor, BSP, is hereby directed to ensure that the herein ruling is implemented by the BSP.3 (Emphasis supplied)

I have no quarrel with the proposition that decisions by the COA on individual disallowances may become final and executory, and hence immutable, if no appeal or motion for reconsideration is timely filed.4 However, there can be no immutability of judgment as regards rulings on disputed audit observations on transactions which have not even occurred and were not part of the dispute between the COA Auditor/s and the BSP when Resolution No. 2011-007 was issued. Since the COA had not issued any AOM declaring understatements of dividends for the years 2007 onwards, the BSP could not have raised any defenses against the application of Resolution No. 2011-007 to future dividends.

Second, the COA declared its own ruling on implied repeal of Section 43 of R.A. No. 7653 (the BSP's Charter) by R.A. No. 7656 unassailable due to finality. Stated differently, the COA declared its own ruling as the last word on the proper interpretation of the law governing the use of the BSP's dividends.

If the Court had subscribed to the COA's stance that Resolution No. 2011-007 was already "final and immutable" so that the Court could no longer review the same, the Court would have forever tied the BSP's hands, and making permanent an interpretation of the law made by a tribunal which does not have the final say on judicial questions. As sagaciously explained in the ponencia, the COA's decisions are administrative in nature, and do not have a binding effect similar to stare decisis. As the court of last resort, it is the Supreme Court's decisions that establish jurisprudence and doctrines which become part of our legal system.5

The circumstances of this case are unique, considering that there will be no other instance whereby the Court would be faced with the question of the correct interpretation of the law on the dividends of the BSP. This is because only the BSP would have standing to do so. It is difficult to think that any other litigant could become a party-in-interest to a case involving such a question of law.

While the COA has the power to resolve "novel, controversial, or difficult questions of law relating to government accounting and auditing,"6 it cannot be allowed to forever evade judicial review of its interpretation by declaring its decisions final and immutable. Hence, the COA's stance on this matter cannot be upheld, lest the Court unwittingly relinquishes a portion of its inherent power and duty.1âшphi1