Bases Conversion and Development Authority vs.

Commission on Audit
G.R. No. 178160, 26 February 2009
Facts:
On March 13, 1992, RA No. 7227 was approved, creating the Bases Conversion and
Development Authority (BCDA). Section 9 states that the BCDA Board of Directors (Board)
shall exercise the powers and functions of BCDA. Section 10 then states that function of the
Board also includes the adoption of a compensation and benefit scheme at least equivalent to
the Banko Sentral ng Pilipinas.
On 20 Dec. 1996, the Board adopted a new compensation and benefit scheme that grants
year-end benefits to each contractual employee, regular employee, and Board member. Aside
from this, they also granted it to full-time consultant later on.
On 25 Aug. 1997, Board Chairman Basco recommended to President Ramos the approval
of the new scheme. It was approved on 9 Oct. 1997.
On 20 Feb 2003, COA issued Audit Observation Memorandum No. 2003-004 stating that
the grant of year-end benefits to Board members was contrary to Department of Budget and
Management Circular Letter No. 2002-2. On 8 Jan. 2004, COA issued a Notice of Disallowance
No. 03-001-BCDA-(02) to disallow the year-end benefit to the Board members and Full Time
Consultants. BCDA filed a notice of appeal dated 8 Sept. 2004 and an appeal memorandum
dated 23 Dec. 2004 to COA.
In Decision No. 2007-020, the COA affirmed the disallowance of the year-end benefit
granted to Board members and full-time consultants and held that good faith did not apply to
them. As stated in DBM Circular letter No. 2002-02, the members and ex officio members of the
Board of Directors are not entitled to YEB, they being not salaried officials of the government.
Good faith is in question because despite the prior notice, the BCDA still enacted a new
benefit scheme including them in it.
Thus the petition for certiorari is filed. It seeks to nullify Decision No. 2007-020 dated 12
April 2007 of COA.

Issue:
Whether or not Art.2, Sec. 5 and 18 of the constitution are binding as a legal basis for the
claim of granting year-end benefit?

Held:
No. The court dismissed the claim. Article 2, based on its title, is only a statement of
general ideological principles and policies. The said provision of Article 2 is not a source of
enforceable rights. Ina previous similar case (Tondo Medical Center Employees Association v.
Court of Appeals), the court held that Sec. 5 and 18, Art. 2 of the Constitution are not self-
executing provisions. Thus, the said provisions are not a legal basis for the said claim

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