CAÑETE, Christy Mae, B.

/ Obligations and Contracts June 01, 2023

Macasaet vs. COA, 173 SCRA 352

(G.R. No. 83748, May 12, 1989)

Facts:
The Philippine Tourism Authority (PTA) and the petitioner signed a contract for the
"Project Design and Management Services" for the development of the Zamboanga
Golf and Country Club in Zamboanga City. According to the agreement, the petitioner
would receive seven percent (7%) of the total construction cost as payment. The
petitioner would be paid gradually based on the progress of the project, and any
remaining balance would be paid after completion, based on the final actual
construction cost.
After the project was completed, PTA paid more than 3 million pesos to Supra
Construction Company due to increased material costs. When the petitioner
discovered this, they demanded payment of over 200 thousand pesos, representing
seven percent (7%) of the 3 million pesos. PTA argued that since the petitioner had
not provided any additional services or work, they were not entitled to that amount.
The petitioner then sought the assistance of the Commission on Audit (COA) to
request the completion of the payment. However, the COA sided with PTA's argument.

Issue:
Whether or not the seven percent (7%) professional fee of Macasaet applies to the
escalation cost payment of PTA to Supra Construction Company, there being included
as the final actual project cost.

Ruling:
Yes. According to paragraph 5, Article V of the contract between Flavio Macasaet and
the Philippine Tourism Authority (PTA), Macasaet is entitled to receive seven percent
(7%) of the payment made by PTA to Supra Construction Company, which amounts
to P3,148,198.26 for the escalation cost. The contract explicitly states that the
remaining professional fee should be calculated based on the "final actual project
cost," which encompasses all determined and incurred costs, including the escalation
cost. The contract's unambiguous terms indicate that Macasaet is entitled to an
additional payment of P219,392.47 from PTA to fulfill its payment obligation as outlined
in their Contract for Project Design and Management Services. Therefore, the
Philippines Tourism Authority is hereby ordered to pay the additional payment to
Macasaet in accordance with the contract terms.