G.R. No. 169815. August 13, 2008.

*
BUREAU OF FISHERIES AND AQUATIC RESOURCES (BFAR) EMPLOYEES
UNION, REGIONAL OFFICE NO. VII, CEBU CITY, petitioner, vs. COMMISSION
ON AUDIT, respondent.
Constitutional Law; Social Justice; The social justice provisions of the Constitution are
not self-executing principles ready for enforcement through the courts; They are merely
statements of principles and policies; To give them effect, legislative enactment is required.—
We rule on the issue of constitutionality. Petitioner invokes the provisions of the 1987
Constitution on social justice to warrant the grant of the Food Basket Allowance. Time and
again, we have ruled that the social justice provisions of the Constitution are not self-
executing principles ready for enforcement through the courts. They are merely statements
of principles and policies. To give them effect, legislative enactment is required. As we held
in Kilosbayan, Incorporated v. Morato, 246 SCRA 540 (1995), the principles and state policies
enumerated in Article II and some sections of Article XII are “not self-executing provisions,
the disregard of which can give rise to a cause of action in the courts. They do not embody
judicially enforceable constitutional rights but guidelines for legislation.”
Same; Same; Allowances; The Department of Agriculture (DA) Undersecretary has no
authority to grant any allowance to the employees of Bureau of Fisheries and Aquatic
Resources (BFAR).—Petitioner contends that the approval of the Department of Agriculture
(DA) Undersecretary for Fisheries and Livestock of the Food Basket Allowance is the law
which authorizes its release. It is crystal clear that the DA Undersecretary has no authority
to grant any allowance to the employees of BFAR. Section 4.5 of Budget Circular No. 16 dated
November 28, 1998 states: All agencies are hereby prohibited from granting any food, rice,
gift checks, or any other form of incentives/allowances except those
authorized via Administrative Order by the Office of the President. In the instant
case, no Administrative Order has been issued by the Office of
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* EN BANC.
135
VOL. 562, AUGUST 13, 2008 135
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
the President to exempt BFAR from the express prohibition against the grant of any
food, rice, gift checks, or any other form of incentive/allowance to its employees.
Same; Same; Same; Under National Compensation Circular No. 59, exceptions to the
incentive allowance/fee/pay category are those authorized under the General Appropriations
Act (GAA) and Section 33 of Presidential Decree (P.D.) No. 807; There is no law authorizing
the grant of the subject Food Basket Allowance.—The Food Basket Allowance falls under the
14th category, that of incentive allowance/fee/pay. Petitioner itself justified the Food Basket
Allowance as an incentive to the employees to encourage them to be more productive and
efficient. Under National Compensation Circular No. 59, exceptions to the incentive
allowance/fee/pay category are those authorized under the General Appropriations Act (GAA)
and Section 33 of Presidential Decree (P.D.) No. 807. Sec. 15(d) of the GAA for Fiscal Year
1999 or R.A. No. 8745 clearly prohibits the payment of honoraria, allowances or other forms
of compensation to any government official or employee, except those specifically authorized
by law. There is no law authorizing the grant of the subject Food Basket Allowance. Further,
Sec. 33 of P.D. No. 807 or the Civil Service Decree of the Philippines does not exempt the
Food Basket Allowance from the general rule.
PETITION for review on certiorari of the decision and resolution of the Commission
on Audit-Legal and Adjudication Office.
The facts are stated in the opinion of the Court.
Navarro & Associates for petitioner.
The Solicitor General for respondent.
PUNO, C.J.:
On appeal are the Decision1 dated April 8, 2005 of respondent Commission on
Audit (COA) in LAO-N-2005-119 upholding the disallowance by the COA Legal and
Adjudication
_______________

1 Rollo, pp. 37-39.

136
136 SUPREME COURT REPORTS ANNOTATED
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
Office (COA-LAO), Regional Office No. VII, Cebu City of the P10,000.00 Food Basket
Allowance granted by BFAR to each of its employees in 1999, and COA
Resolution2 dated August 5, 2005, denying petitioner’s motion for reconsideration of
said Decision.
First, the facts:
On October 18, 1999, petitioner Bureau of Fisheries and Aquatic Resources
(BFAR) Employees Union, Regional Office No. VII, Cebu City issued Resolution No.
01, series of 1999 requesting the BFAR Central Office for a Food Basket Allowance.
It justified its request on the high cost of living, i.e., “the increase in prices of
petroleum products which catapulted the cost of food commodities, has greatly
affected the economic conditions and living standard of the government employees of
BFAR Region VII and could hardly sustain its need to cope up with the four (4) basic
needs, i.e., food, shelter, clothing and education.”3 It also relied on the Employees
Suggestions and Incentive Awards System (ESIAS), pursuant to Book V of Executive
Order No. 292, or the Administrative Code of 1987, and approved by the Civil Service
Commission on December 3, 1996. The ESIAS “includes the granting of incentives
that will help employees overcome present economic difficulties, boost their morale,
and further commitment and dedication to public service.”4 Regional Director
Corazon M. Corrales of BFAR Region VII indorsed the Resolution, and Malcolm I.
Sarmiento, Jr., Director of BFAR recommended its approval. Honorable Cesar M.
Drilon, Jr., Undersecretary for Fisheries and Livestock of the Department of
Agriculture, approved the request for Authority to Grant a Gift Check or the Food
Basket Allowance at the rate of P10,000.00 each to the 130 employees of BFAR
Region VII, or in the total amount of
_______________

2 Id., p. 48.
 3 Id., p. 27.
4 Id.
137
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Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
P1,322,682.00.5 On the strength of the approval, Regional Director Corrales released
the allowance to the BFAR employees.
On post audit, the Commission on Audit-Legal and Adjudication Office (COA-LAO)
Regional Office No. VII, Cebu City disallowed the grant of Food Basket Allowance
under Notice of Disallowance No. 2003-022-101 (1999) dated September 19, 2003. It
ruled that the allowance had no legal basis and that it violated: a) Sec. 15(d) of the
General Appropriations Act of 1999, prohibiting the payment of honoraria,
allowances, or other forms of compensation to any government official or employee,
except those specifically authorized by law; b) par. 4.5 of Budget Circular No. 16 dated
November 28, 1998, prohibiting the grant of food, rice, gift checks, or any other form
of incentives/allowances, except those authorized via Administrative Order by the
Office of the President; and c) Sec. 12 of Republic Act (R.A.) No. 6758, or the Salary
Standardization Law of 1989, which includes all allowances in the standardized
salary rates, subject to certain exceptions.
On February 26, 2004, BFAR Regional Office No. VII, through Regional Director
Corrales, moved for reconsideration and prayed for the lifting of the disallowance. It
argued that the grant of Food Basket Allowance would enhance the welfare and
productivity of the employees. Further, it contended that the approval by the
Honorable Drilon, Undersecretary for Fisheries and Livestock, of the said benefit was
the law itself which vested the specific authority for its release. The Commission on
Audit-Legal and Adjudication Office (COA-LAO) Regional Office No. VII, Cebu City
denied the motion.
Petitioner appealed to the Commission on Audit-Legal and Adjudication Office
(COA-LAO) National, Quezon City. The appeal was denied in a Decision dated April
8, 2005. Peti-
_______________

5 Rollo, p. 28.
138
138 SUPREME COURT REPORTS ANNOTATED
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
tioner’s motion for reconsideration was likewise denied in a Resolution dated August
5, 2005.
Hence, this appeal.
Petitioner cites the following grounds for its appeal:
 “1. The disallowance in question is unconstitutional as it contravenes the fundamental
principle of the State enshrined under Sections 9 and 10, Article II of the 1987 Constitution,
which provide as follows:
SEC. 9. The State shall promote a just and dynamic social order that will ensure
the prosperity and independence of the nation and free the people from poverty through
policies that provide adequate social services, promote full employment, a rising
standard of living, and an improved quality of life for all.
SEC. 10. The State shall promote social justice in all phases of national
development.6
2. The Undersecretary for Fisheries and Livestock is an extension of the Secretary of
Agriculture who is an alter-ego of the President. His approval was tantamount to the
authority from the Office of the President, as contemplated in DBM Budget Circular No. 16,
dated November 28, 1998.7
3. The grant of the Food Basket Allowance is in conformity with Sec. 12 of the Salary
Standardization Law.”8
We deny the petition.
First, we rule on the issue of constitutionality. Petitioner invokes the provisions of
the 1987 Constitution on social justice to warrant the grant of the Food Basket
Allowance. Time and again, we have ruled that the social justice provisions of the
Constitution are not self-executing principles ready for enforcement through the
courts. They are merely statements of principles and policies. To give them effect,
legislative en-
_______________

6 Id., p. 17.
7 Rollo, p. 20.
8 Id., pp. 20-21.
139
VOL. 562, AUGUST 13, 2008 139
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
actment is required. As we held in Kilosbayan, Incorporated v. Morato,9 the principles
and state policies enumerated in Article II and some sections of Article XII are “not
self-executing provisions, the disregard of which can give rise to a cause of action in
the courts. They do not embody judicially enforceable constitutional rights but
guidelines for legislation.”10
Second, petitioner contends that the approval of the Department of Agriculture
(DA) Undersecretary for Fisheries and Livestock of the Food Basket Allowance is the
law which authorizes its release. It is crystal clear that the DA Undersecretary has
no authority to grant any allowance to the employees of BFAR. Section 4.5 of Budget
Circular No. 16 dated November 28, 1998 states:
“All agencies are hereby prohibited from granting any food, rice, gift checks, or any other
form of incentives/allowances except those authorized via Administrative Order by
the Office of the President.”
 In the instant case, no Administrative Order has been issued by the Office of the
President to exempt BFAR from the express prohibition against the grant of any food,
rice, gift checks, or any other form of incentive/allowance to its employees.
Petitioner argues that the grant of the Food Basket Allowance does not violate Sec.
12 of R.A. No. 6758 or the Salary Standardization Law. This law was passed to
standardize salary rates among government personnel and do away with multiple
allowances and other incentive packages and the
_______________

9 G.R. No. 118910, July 17, 1995, 246 SCRA 540, 564.
10 Cited in Tañada v. Angara, 338 Phil. 546; 272 SCRA 18 (1997).
140
140 SUPREME COURT REPORTS ANNOTATED
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
resulting differences in compensation among them.11 Sec. 12 of the law provides:
“Consolidation of Allowances and Compensation.—All allowances, except for
representation and transportation allowances; clothing and laundry allowances; subsistence
allowance of marine officers and crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel stationed abroad; and such other
additional compensation not otherwise specified herein as may be determined by the DBM
[Department of Budget and Management], shall be deemed included in the standardized
salary rates herein prescribed. Such other additional compensation, whether in cash or in
kind, being received by incumbents only as of July 1, 1989 not integrated into the
standardized salary rates shall continue to be authorized.
Existing additional compensation of any national government official or employee paid
from local funds of a local government unit shall be absorbed into the basic salary of said
official or employee and shall be paid by the National Government.”
Under Sec. 12, as quoted, all kinds of allowances are integrated in the
standardized salary rates. The exceptions are:
“1. representation and transportation allowance (RATA);
2. clothing and laundry allowance;
3. subsistence allowance of marine officers and crew on board government vessels;
4. subsistence allowance of hospital personnel;
5. hazard pay;
6. allowances of foreign service personnel stationed abroad; and
7. such other additional compensation not otherwise specified herein as may be
determined by the DBM.”
_______________

11 Ambros v. COA, G.R. No. 159700, June 30, 2005, 462 SCRA 572, 597.
141
VOL. 562, AUGUST 13, 2008 141
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
Petitioner contends that the Food Basket Allowance falls under the 7th category
above, that of “other additional compensation not otherwise specified herein as may
be determined by the DBM.”
The Court has had the occasion to interpret Sec. 12 of R.A. No. 6758. In National
Tobacco Administration v. Commission on Audit,12 we held that under the first
sentence of Section 12, the benefits excluded from the standardized salary rates are
the “allowances” or those which are usually granted to officials and employees of the
government to defray or reimburse the expenses incurred in the performance of their
official functions. These are the RATA, clothing and laundry allowance, subsistence
allowance of marine officers and crew on board government vessels and hospital
personnel, hazard pay, and others, as enumerated in the first sentence of Section 12.
We further ruled that the phrase “and such other additional compensation not
otherwise specified herein as may be determined by the DBM” is a catch-all proviso
for benefits in the nature of allowances similar to those enumerated. In Philippine
Ports Authority v. Commission on Audit,13 we explained that if these allowances were
consolidated with the standardized salary rates, then government officials or
employees would be compelled to spend their personal funds in attending to their
duties.
In the instant case, the Food Basket Allowance is definitely not in the nature of an
allowance to reimburse expenses incurred by officials and employees of the
government in the performance of their official functions. It is not payment in
consideration of the fulfillment of official duty. It is a form of financial assistance to
all officials and employees of BFAR. Petitioner itself stated that the Food Basket
Allowance has the purpose of alleviating the economic condition of BFAR employees.
_______________

12 370 Phil. 793; 311 SCRA 755 (1999).

13 G.R. No. 100773, October 16, 1992, 214 SCRA 653 (1992).
142
142 SUPREME COURT REPORTS ANNOTATED
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
Next, petitioner relies on National Compensation Circular No. 59 dated September
30, 1989, issued by the DBM, which is the “List of Allowances/Additional
Compensation of Government Officials and Employees which shall be Deemed
Integrated into the Basic Salary.” The list enumerates the following
allowances/additional compensation which shall be incorporated in the basic salary,
hence, may no longer be granted to government employees:
1. Cost of Living Allowance (COLA);
2. Inflation connected allowance;
3. Living Allowance;
4. Emergency Allowance;
5. Additional Compensation of Public Health Nurses assigned to public health nursing;
6. Additional Compensation of Rural Health Physicians;
7. Additional Compensation of Nurses in Malacañang Clinic;
 8. Nurses Allowance in the Air Transportation Office;
9. Assignment Allowance of School Superintendents;
10. Post allowance of Postal Service Office employees;
11. Honoraria/allowances which are regularly given except the following:
a. those for teaching overload;
b. in lieu of overtime pay;
c. for employees on detail with task forces/special projects;
d. researchers, experts and specialists who are acknowledged authorities in their
field of specialization;
e. lecturers and resource persons;
f. Municipal Treasurers deputized by the Bureau of Internal Revenue to collect
and remit internal revenue collections; and
g. Executive positions in State Universities and Colleges filled by designation from
among their faculty members.143
VOL. 562, AUGUST 13, 2008 143
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
12. Subsistence Allowance of employees except those authorized under EO [Executive
Order] No. 346 and uniformed personnel of the Armed Forces of the Philippines and
Integrated National Police;
13. Laundry Allowance of employees except those hospital/sanitaria personnel who
attend directly to patients and who by the nature of their duties are required to wear
uniforms, prison guards and uniformed personnel of the Armed Forces of the Philippines and
Integrated National Police; and
14. Incentive allowance/fee/pay except those authorized under the General
Appropriations Act and Section 33 of P.D. No. 807.
Petitioner invokes the rule of statutory construction that “what is not included is
excluded.” Inclusio unius est exclusio alterius. Petitioner claims that the Food Basket
Allowance is distinct and separate from the specific allowances/additional
compensation listed in the circular.
Again, we reject petitioner’s contention. The Food Basket Allowance falls under
the 14th category, that of incentive allowance/fee/pay. Petitioner itself justified the
Food Basket Allowance as an incentive to the employees to encourage them to be
more productive and efficient.14 Under National Compensation Circular No. 59,
exceptions to the incentive allowance/fee/pay category are those authorized under the
General Appropriations Act (GAA) and Section 33 of Presidential Decree (P.D.) No.
807. Sec. 15(d) of the GAA for Fiscal Year 1999 or R.A. No. 8745 clearly prohibits the
payment of honoraria, allowances or other forms of compensation to any government
official or employee, except those specifically authorized by law. There is no law
authorizing the grant of the subject Food Basket Allowance. Further, Sec. 33 of P.D.
No. 807 or the Civil Service Decree of the Philippines does not exempt the Food
Basket Allowance from the general rule. Sec. 33 states:
_______________

14 Rollo, p. 21.
144
144 SUPREME COURT REPORTS ANNOTATED
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
“Section 33. Employee Suggestions and Incentive Award System.—There shall be
established a government-wide employee suggestions and incentive awards system which
shall be administered under such rules, regulations, and standards as may be promulgated
by the Commission.
In accordance with rules, regulations, and standards promulgated by the Commission, the
President or the head of each department or agency is authorized to incur whatever necessary
expenses involved in the honorary recognition of subordinate officers and employees of the
government who by their suggestions, inventions, superior accomplishment, and other
personal efforts contribute to the efficiency, economy, or other improvement of government
operations, or who perform such other extraordinary acts or services in the public interest in
connection with, or in relation to, their official employment.”
We are not convinced that the Food Basket Allowance falls under the incentive
award system contemplated above. The decree speaks of suggestions, inventions,
superior accomplishments, and other personal efforts contributed by an employee to
the efficiency, economy, or other improvement of government operations, or other
extraordinary acts or services performed by an employee in the public interest in
connection with, or in relation to, his official employment. In the instant case, the
Food Basket Allowance was granted to all BFAR employees, without distinction. It
was not granted due to any extraordinary contribution or exceptional
accomplishment by an employee. The Food Basket Allowance was primarily an
economic monetary assistance to the employees.
Lastly, we note, as the Office of the Solicitor General, on behalf of respondent did,
that petitioner failed to exhaust its administrative remedies. It stopped seeking
remedies at the level of respondent’s Legal and Adjudication Office. It failed to appeal
the latter’s adverse decision to the Commission on Audit proper. The consequence for
failure to exhaust administrative remedies is clear: the disallowance, as ruled by the
Commission on Audit-Legal and Adjudication Office Regional
145
VOL. 562, AUGUST 13, 2008 145
Bureau of Fisheries and Aquatic Resources (BFAR)
Employees Union, Regional Office No. VII, Cebu City vs.
Commission on Audit
Office No. VII, Cebu City and upheld by the Commission on Audit-Legal and
Adjudication Office National, Quezon City, became final and executory. Sections 48
and 51 of Presidential Decree No. 1445, or the Government Auditing Code of the
Philippines provide:
“Section 48. Appeal from decision of auditors.—Any person aggrieved by the decision of
an auditor of any government agency in the settlement of an account or claim may, within
six months from receipt of a copy of the decision, appeal in writing to the Commission.
Section 51. Finality of decisions of the Commission or any auditor.—A decision of the
Commission or of any auditor upon any matter within its or his jurisdiction, if not appealed
as herein provided, shall be final and executory.”
 IN VIEW WHEREOF, the petition is DENIED. The Decision and Resolution of the
Commission on Audit-Legal and Adjudication Office dated April 8, 2005 and August
5, 2005, respectively, in LAO-N-2005-119, are AFFIRMED.
SO ORDERED.
Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, Carpio-
Morales, Azcuna, Tinga, Chico-Nazario, Velasco, Jr., Reyes, Leonardo-De
Castro and Brion, JJ., concur.
Nachura, J., No Part.
Petition denied, judgment and resolution of COA-Legal and Adjudication Office
affirmed.
Note.—The Constitution specifically vests in the Commission on Audit the
authority to determine whether the government entities comply with laws and
regulations in disbursing government funds. (De Jesus vs. Commission on Audit, 422
SCRA 287 [2004])
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