The Philippine Supreme Court (SC) has upheld the ruling of the Commission on Audit (COA) that deemed the 2008 car plan scheme implemented by the Philippine Rice Research Institute (PhilRice) as illegal. The scheme aimed to entice officials and employees to remain in the agency.

The Court en banc also found that the officials of PhilRice were not liable to refund the government in the amount of P10.15 million representing the expenses incurred during the implementation of the car plan program.

The said amount was the subject of 26 notices of disallowance (NDs) issued by the COA in 2013.

The SC held, in its 14 March 2023 decision published yesterday, that the officials acted in good faith in allowing the release of government funds for the procurement and use of the vehicles under the scheme.

The SC explained in a decision written by Associate Justice Japar Dimaampao, “Here, while petitioners approved and authorized the payment of government funds in violation of Section 12 of R. A. No. 6758 (Compensation and Position Classification Act of 1989), nevertheless, the exceptional circumstances surrounding the case… tenaciously show they acted in good faith and were solely propelled by a valid and genuine cause — the prevention of 'brain drain' within the institute through a more cost-effective approach.”

Petitioners were Sophia T. Borja, Ma. Ethel P. Gibe, Mary Grace DG. Corpuz, Joy T. Agudia, Aurea C. Cosio, Wilfredo B. Collado, Myrna D. Malabayabas, Evelyn F. Javier, Eduardo Jimmy P. Quilang, Rizal G. Corales, Renato B. Bajit, Manuel Jose C. Regalado, Glenda DC. Ravelo, Leo C. Javier, Caesar Joventino M. Tado, Rhemilyn Z. Relado and Babylinda O. Reyes,

They were signatories to the vouchers approving the release of the disallowed amounts, with petitioner Borja as one of the car owners involved in the rental plan.

“Thus, petitioners, in their capacity as approving/certifying officers, are likewise excused from liability under Rule 2 of the Madera rules,” it added.

The SC explained that in determining petitioners’ liability to return the disallowed amounts, it is guided by its landmark ruling in the case of Madera V. Commission on Audit.

The SC in the said ruling, held that if a notice of disallowance is upheld, the “approving and certifying officers who acted in good faith in regular performance of official functions and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code of 1987.”

It explained that the purpose of the car plan scheme was to keep the brilliant and exceptional officials and employees of PhilRice from seeking greener pastures outside the agency.

The SC noted that the operations of PhilRice as a research and development institution, entailed countless of land travels which necessitated the costs such as purchase price of vehicle, fuel, oil, maintenance expenses and comprehensive insurance premiums.