COA upholds disallowance of P37-M benefits for PhilHealth Calabarzon employees

/ 03:18 PM December 12, 2019

MANILA, Philippines – The Commission on Audit (COA) has thumbed down the claim for some P37.4 million worth of benefits and allowances by employees of Philippine Health Insurance Corporation (PhilHealth) in its Region IV-A office.

In a decision dated dated November 22, the state auditing firm insisted that such allowances, given from 2012 to 2013, should be disallowed for being invalid under the rules about incentives for government-owned corporations.


Said benefits were given to employees based on a Collective Negotiation Agreement (CNA) between the PhilHealth management and the employees.

“Evidently, the CNA benefits given to employees of PhilHealth were not proper subject of negotiation, as it encompassed an increase of emoluments and other allowances not presently provided by law,” COA said in the decision signed by chair Michael Aguinaldo and commissioners Jose Fabia and Ronald Pondoc.


COA initially issued a notice of disallowance (ND) on the benefits in 2013, but PhilHealth Calabarzon’s officer-in-charge Dr. Erwin Oriña filed a petition for review to appeal the ND.

The benefits concerned were received by officials, regular and non-regular employees.  These were identified as rice allowances, educational assistance, shuttle service fees, anniversary gifts, labor gratuities, birthday gifts, productivity bonuses, transportation allowances, and medical funds, among others.

Oriña claimed that the benefits given to employees were legal, based on Section 16(n) of the Republic Act No. 7875, which supposedly gives PhilHealth the fiscal autonomy.  However, COA cited a Supreme Court ruling which states that such autonomy is not “absolute”.

“This argument must fail. Said provision is a general statement that cannot be equated to fiscal autonomy or absolute power in fixing the compensation and benefits of its personnel,” COA noted.

“In the case of PhilHealth vs. COA, the SC held: ‘But again, its authority thereunder to fix its personnel’s compensation is not, and has never been, absolute. As previously discussed, in order to uphold the validity of a grant of an allowance, it must not merely rest on an agency’s ‘fiscal autonomy’ alone, but must expressly be part of the enumeration under Section 12 of the SSL (Salary Standardization Law), or expressly authorized by law or DBM issuance,” it added.

COA also noted that Section 6 of Presidential Decree No. 1597 orders government-owned or controlled corporations (GOCCs) such as PhilHealth to follow “guidelines and policies issued by the President of the Philippines governing salary rates, levels of allowances and other forms of compensation’.

They also underscored that the assertion that the benefits were given in good faith is still not a ground to avoid liability.


“To claim good faith, the employees should not have any iota of knowledge that the subject benefits were irregular. Such is not the case in this petition,” the commission added.

With the decision, COA ordered PhilHealth Calabarzon’s employees who received the benefits to return the funds.  State auditors were also assigned to verify the nature of the employees’ participation in the disallowed benefits.

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TAGS: CNA, COA, Collective Negotiation Agreement, Commission On Audit, GOCC, Government-Owned or-Controlled Corporations, Philhealth, Philippine Health Insurance Corporation, Philippine news updates, Region IV-A
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