The Supreme Court building in Manila. INQUIRER FILE PHOTO
MANILA, Philippines – The Supreme Court stopped the Commission on Audit (COA) from implementing its order to return the P747.1 million retirement benefits of officials and employees from the Development Bank of the Philippines who availed themselves of the Early Retirement Incentive Program IV (Erip IV).
“The court granted a TRO, effective immediately and until further orders, against the directive to return the benefits subject of the COA’s notice of disallowance of DBP’s Early Retirement Incentive Program IV,” the high court said.
“Petitioner claims that the beneficiaries of Erip IV acted in good faith in availing of the benefits; if this is true, under Nazareth v. Villar, they will not be required to return the benefits received,” the high court said.
“Without making a pronouncement on whether good faith was present, the Court noted that injustice or irreparable injury to the beneficiaries may result if they were immediately ordered to return the significant sums equivalent to the benefits received under Erip IV, only to be found later that they were in good faith in receiving such payments,” the high court further stated.
DBP’s resolution No. 0176 containing the Erip IV granted retirement benefits to qualified officials and employees for calendar years 200 and 2008.
On Feb. 19, 2007, the supervising auditor of COA issued an audit observation memorandum stating that the Erip IV violated provisions of the DBP charter requiring the approval of the Secretary of Finance.
A suspension of Erip IV was recommended by the supervising auditor and then ordered the return of benefits received in excess of what was allowed in DBP’s gratuity plan.
The DBP filed a notice of appeal before the COA’s corporate auditor.
Then, the Secretary of Finance said that Erip IV does not need his approval. Eventually, the appeal filed to the COA was denied prompting the DBP officials and employees to take the case to the Supreme Court.
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