"x x x.
The lack of legal basis to grant per diems to ex officio members of the PEZA Board, including their representatives, has already been settled by no less than the Court En Banc in the case of Bitonio, Jr. where we held that the amendatory law, R.A. No. 8748, purposely deleted the last paragraph of Section 11 of R.A. No. 7916 that authorized the grant of per diems to PEZA Board members as it was in conflict with the proscription laid down in the 1987 Constitution. We held in Bitonio, Jr.:
The framers of R.A. No. 7916 must have realized the flaw in the law which is the reason why the law was later amended by R.A. No. 8748 to cure such defect. In particular, Section 11 of R.A. No. 7916 was amended to read:
SECTION 11. The Philippine Economic Zone Authority (PEZA) Board. – There is hereby created a body corporate to be known as the Philippine Economic Zone Authority (PEZA) attached to the Department of Trade and Industry. The Board shall have a director general with the rank of department undersecretary who shall be appointed by the President. The director general shall be at least forty (40) years of age, of proven probity and integrity, and a degree holder in any of the following fields: economics, business, public administration, law, management or their equivalent, and with at least ten (10) years relevant working experience preferably in the field of management or public administration.
The director general shall be assisted by three (3) deputy directors general each for policy and planning, administration and operations, who shall be appointed by the PEZA Board, upon the recommendation of the director general. The deputy directors general shall be at least thirty-five (35) years old, with proven probity and integrity and a degree holder in any of the following fields: economics, business, public administration, law, management or their equivalent.
The Board shall be composed of thirteen (13) members as follows: the Secretary of the Department of Trade and Industry as Chairman, the Director General of the Philippine Economic Zone Authority as Vice-chairman, the undersecretaries of the Department of Finance, the Department of Labor and Employment, the Department of [the] Interior and Local Government, the Department of Environment and Natural Resources, the Department of Agriculture, the Department of Public Works and Highways, the Department of Science and Technology, the Department of Energy, the Deputy Director General of the National Economic and Development Authority, one (1) representative from the labor sector, and one (1) representative from the investors/business sector in the ECOZONE. In case of the unavailability of the Secretary of the Department of Trade and Industry to attend a particular board meeting, the Director General of PEZA shall act as Chairman.
As can be gleaned from above, the members of the Board of Directors was increased from 8 to 13, specifying therein that it is the undersecretaries of the different Departments who should sit as board members of the PEZA. The option of designating his representative to the Board by the different Cabinet Secretaries was deleted. Likewise, the last paragraph as to the payment of per diems to the members of the Board of Directors was also deleted, considering that such stipulation was clearly in conflict with the proscription set by the Constitution.
Prescinding from the above, the petitioner is, indeed, not entitled to receive a per diem for his attendance at board meetings during his tenure as member of the Board of Directors of the PEZA.[18] (Italics in the original.)
PEZA’s insistence that there is legal basis in its grant of per diems to the ex officio members of its Board does not hold water. The constitutional prohibition explained in Civil Liberties Union case still stands and this Court finds no reason to revisit the doctrine laid down therein as said interpretation, to this Court’s mind, is in consonance with what our Constitution provides.
Neither can this Court give credence to PEZA’s claim of good faith.
In common usage, the term “good faith” is ordinarily used to describe that state of mind denoting “honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry; an honest intention to abstain from taking any unconscientious advantage of another, even through technicalities of law, together with absence of all information, notice, or benefit or belief of facts which render transaction unconscientious.”[19]
Definitely, PEZA cannot claim that it was not aware of circumstances pointing to the possible illegality of the disbursements of per diems to the ex officio members of the Board. In Civil Liberties Union, this Court clarified the prohibition under Section 13, Article VII of the Constitution and emphasized that a public official holding an ex officio position as provided by law has no right to receive additional compensation forthe ex officio position. This Court ruled:
It bears repeating though that in order that such additional duties or functions may not transgress the prohibition embodied in Section 13, Article VII of the 1987 Constitution, such additional duties or functions must be required by the primary functions of the official concerned, who is to perform the same in an ex-officio capacity as provided by law, without receiving any additional compensation therefor.
The ex-officio position being actually and in legal contemplation part of the principal office, it follows that the official concerned has no right to receive additional compensation for his services in the said position. The reason is that these services are already paid for and covered by the compensation attached to his principal office. It should be obvious that if, say, the Secretary of Finance attends a meeting of the Monetary Board as an ex-officio member thereof, he is actually and in legal contemplation performing the primary function of his principal office in defining policy in monetary and banking matters, which come under the jurisdiction of his department. For such attendance, therefore, he is not entitled to collect any extra compensation, whether it be in the form of a per diem or an honorarium or an allowance, or some other such euphemism. By whatever name it is designated, such additional compensation is prohibited by the Constitution.[20] (Italics in the original; emphasis supplied.)
It bears stressing that the Civil Liberties Union case was promulgated in 1991,or a decade before the subject disallowed payments of per diems for the period starting 2001 were made by PEZA. Thus, even if the Bitonio case was only promulgated in 2004 when part of the disallowed payments have already been made, PEZA should have been guided by the Civil Liberties Union case and acted with caution. It would have been more prudent for PEZA, if it honestly believed that there is a clear legal basis for the per diems and there was a chance that this Court might rule in their favor while the Bitonio case was pending, to withhold payment of the per diem instead of paying them. PEZA’s actual knowledge that the disbursements are being questioned by virtue of the notices of disallowance issued to them by the COA and knowledge of the pronouncements of the Court in the Civil Liberties Union case and in other cases[21] where ex officio members in several government agencies were prohibited from receiving additional compensation, militate against its claim of good faith.
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