DEPARTMENT OF BUDGET AND

MANAGEMENT, represented by
Sec. Emilia T. Boncodin,
Petitioner,

G.R. No. 169726

Present:
CARPIO, J., Chairperson,
CARPIO MORALES,*
BRION,
ABAD, and
PEREZ, JJ.

- versus -

OLIVIA D. LEONES,
Promulgated:
Respondent.
March 18, 2010
x --------------------------------------------------------------------------------------- x

DECISION

CARPIO, J.:

The Case
This resolves the petition for review[1] of the Decision[2] of the Court of
Appeals finding respondent Olivia D. Leones entitled to representation and
transportation allowance.

The Facts

Before 1996, respondent Olivia D. Leones (respondent) was the Municipal

Treasurer of Bacnotan, La Union. In December 1996, respondent was reassigned

to the Office of the Provincial Treasurer, La Union, pending resolution of

administrative cases filed against her.[3] As Municipal Treasurer, respondent
received, on top of her salary, representation and transportation allowance
(RATA). The Municipality of Bacnotan stopped paying RATA to respondent
upon her reassignment to the Provincial Government.
After unsuccessfully obtaining administrative relief,[4] respondent filed a
mandamus suit with the Regional Trial Court of San Fernando City, La Union
(trial court) against petitioner Department of Budget and Management (DBM) and
then mayor of Bacnotan, Ma. Minda Fontanilla (Fontanilla), to compel payment of
RATA. The trial court dismissed the petition for non-exhaustion of administrative
remedies. On appeal by respondent,[5] the Court of Appeals affirmed the dismissal.
As respondent no longer pursued the case, the trial courts ruling became final on
30 June 2003.
However, respondent again sought an opinion, this time from the DBM
Secretary, on her entitlement to RATA. In its reply dated 3 September 2003
(Opinion), the DBM found respondent entitled to RATA only for 1999 under the
General Appropriation Act (GAA) for that year which, unlike previous and
succeeding years, did not require actual performance of x x x functions as
condition for receipt of RATA.

Assailing the Opinion, respondent filed a petition for certiorari with the
Court of Appeals. Respondent contended that her non-receipt of RATA violates
the rule on non-dimunition of salary in reassignments.
The Ruling of the Court of Appeals
In its Decision dated 24 May 2005, the Court of Appeals granted
respondents petition and ordered the DBM and Fontanilla to pay respondent
RATA for the duration of her reassignment. Sustaining respondents theory, the

Court of Appeals characterized RATA as part of salary, thus subject to the rule on
non-dimunition of salary in reassignments.[6] The Court of Appeals found
erroneous the DBMs reliance on the GAAs requiring actual performance of
functions as precondition for payment of RATA because respondents salary was
charged against the local budget of Bacnotan and not against the national budget.[7]
The DBMs motion for reconsideration equally proved unsuccessful.[8]
HENCE, THIS PETITION.
The DBM argues that RATA is not part of salary and does not attach to the
position but is paid based on the actual performance of functions. Hence,
respondent, not having been in the actual performance of her functions as treasurer
of Bacnotan during her reassignment to the La Union treasurers office, is not
entitled to receive RATA except for 1999 because the GAA for that year did not
require actual performance of functions as condition for payment of RATA.
THE ISSUE
The question is whether, after her reassignment to the La Union treasurers
office, respondent, the treasurer of Bacnotan, was entitled to receive RATA.
The Ruling of the Court
We hold that respondent was entitled to receive RATA after her
reassignment, not because the allowance forms part of her salary, but because the
discontinuance of payment lacks legal basis.
RATA Distinct from Salary

The DBM correctly characterizes RATA as allowance distinct from salary.

Statutory law,[9] as implemented by administrative issuances[10] and interpreted in
decisions,[11]has consistently treated RATA as distinct from salary. Unlike salary

which is paid for services rendered, RATA belongs to a basket of allowances [12] to
defray expenses deemed
unavoidable
in
the
discharge
of
office.[13] Hence, RATA is paid only to certain officials who, by the nature of their
offices, incur representation and transportation expenses.
However, the foregoing does not inexorably lead to the conclusion
that under all circumstances and despite lack of legal basis, RATA is paid only if
the RATA-entitled officer actually discharges his office. First, it became
necessary to distinguish allowances (such as RATA) from salary mainly because
under Section 12 of the Compensation and Position Classification Act of 1989 (RA
6758)[14] (applicable to all public sector employees), all forms of financial
assistance and allowances[15] were integrated to the standardized salaries except
for certain allowances specified by RA 6758 (such as RATA) and as determined by
regulation.[16] Second, non-performance of duties may result from compliance with
orders devoid of the employees volition such as suspension, termination resulting
in reinstatement, or, as here, reassignment. At any rate, the denial of RATA must
be grounded on relevant and specific provision of law.
No Law Justifies Denial of RATA for
REASSIGNED LOCAL GOVERNMENT OFFICIALS
The DBM concedes that as Municipal Treasurer, respondent was entitled to
receive (and did receive) RATA because such position is equivalent to a head of a
municipal
government
department.[17] However,
the
DBM
contends that respondents reassignment to La Union treasurers office cut off this
entitlement. As bases for this claim, the DBM invokes the GAAs from 1996 to
2005 (except in 1999[18]) uniformly providing (in different sections[19]) thus:
[T]he following officials and those of equivalent rank as may be
determined by the Department of Budget and Management while in the
actual performance of their respective functions are hereby granted
monthly commutable representation and transportation allowances
payable from the programmed appropriations provided for their

respective offices not exceeding the rates indicated below xx x.

(Emphasis supplied)

As secondary basis, the DBM calls the Courts attention to Section 3.3.1 of
the National Compensation Circular No. 67 (Section 3.3.1), dated 1 January
1992, whichprovides:
3.3. The officials and employees referred to in Sections 2.1, 2.2 and 2.3
hereof shall no longer be authorized to continue to collect RATA in
the following instances:

3.3.1 When on full-time detail with another organizational unit of

the same agency, another agency, or special project for one
(1) full calendar month or more, except when the duties and
responsibilities they perform are comparable with those of
their regular positions, in which case, they may be
authorized to continue to collect RATA on a reimbursable
basis, subject to the availability of funds[.] (Emphasis
supplied)

and contends that respondent falls under the general rule thus justifying the
cessation of her RATA payment.
None of these rules supports the DBMs case.
On the relevance of the GAAs, the Court of Appeals correctly pointed out
that they find no application to a local government official like respondent whose
compensation and allowances are funded by local appropriation laws passed by
the Sangguniang Bayan of Bacnotan. It is the municipal ordinances of Bacnotan,
providing for the annual budget for its operation, which govern respondents
receipt of RATA. Although the records do not contain copies of the
relevant Bacnotan budget ordinances, we find significantFontanillas referral to the
DBM
of
respondents
April
2002
letter
requesting
RATA
[20]
payment. Evidently, Bacnotans annual budgetary appropriations for 1996 to

2005 contained no provision similar to the provisions in the GAAs the DBM now
cites; otherwise, Fontanilla would have readily invoked them to deny respondents
request.
The DBM tries to go around this insuperable obstacle by
distinguishing payment from the conditions for the payment and theorizes that
although
respondents
salary
and
allowances
were
charged
against Bacnotans annual budget, they were subject to the condition contained in
the GAAs for 1996-2005 linking the payment of RATA to the actual performance
of duties.[21] The Court cannot subscribe to this theory without ignoring the wall
dividing the vertical structure of government in this country and a foundational
doctrine animating local governance.
Although the Philippines is a unitary State, the present Constitution (as in
the past) accommodates within the system the operation of local government units
with enhancedadministrative autonomy and autonomous regions with
limited political autonomy.[22] Subject to the Presidents power of general
supervision[23] and exercising delegated powers, these units and regions operate
much like the national government, with their own executive and legislative
branches, financed by locally generated and nationally allocated funds disbursed
through budgetary ordinances passed by their local legislative councils.
The DBMs submission tinkers with this design by making provisions in national
budgetary laws automatically incorporated in local budgetary ordinances, thus
reducing local legislative councils from the provinces down to the barangays
and the legislative assembly of the Autonomous Region in Muslim
Mindanao, to mere extensions of Congress. Although novel, the theory is
anathema to the present vertical structure of Philippine government and to any
notion of local autonomy which the Constitution mandates.
Nor can the DBM anchor its case on Section 3.3.1. The National
Compensation Circular No. 67, which the DBM issued, is entitled Representation

and Transportation Allowances of National Government Officials and

Employees, thus excluding local government officials like respondent from its
ambit. At any rate, respondent falls under the exception clause in Section 3.3.1,
having been reassigned to another unit of the same agency with duties and
responsibilities comparable to her previous position.
Respondent was reassigned to La Union treasurers office within the same
agency,[24] namely, the Department of Finance, because local treasuries remain
under the control of the Secretary of Finance[25] (unlike some offices which were
devolved to the local governments[26]). Paragraphs (d) and (e) of
Section 470 of Republic Act No. 7160 (RA 7160), the Local Government Code of
1991, provide the functions of The treasurer:
(d) The treasurer shall take charge of the treasury office, perform the
duties provided for under Book II of this Code, and shall:
(1) Advise the governor or mayor, as the case may
be, the sanggunian, and other local government and
national officials concerned regarding disposition of local
government funds, and on such other matters relative to
public finance;
(2) Take custody of and exercise proper management of the funds of the local
government unit concerned;
(3) Take charge of the disbursement of all local government funds and such
other funds the custody of which may be entrusted to him by law or other competent
authority;
(4) Inspect private commercial and industrial establishments within the jurisdiction
of the local government unit concerned in relation to the implementation of tax
ordinances, pursuant to the provisions under Book II of this Code;
(5) Maintain and update the tax information system of the local government
unit;

(6) In the case of the provincial treasurer, exercise technical supervision over
all treasury offices of component cities and municipalities; and
(e) Exercise such other powers and perform such other duties and functions as may
be prescribed by law or ordinance. (Emphasis supplied)

Thus, irrespective of the level of the local government unit involved, no

distinction exists in the functions of local treasurers except in the technical
supervision by the provincial treasurer over subordinate treasury offices. Logically,
the employees in all local treasuries perform comparable functions within the
framework of Section 70 (d) and (e). Hence, the DBMs casual claim that the
facts at hand do not reflect that the functions performed by respondent during the
period of her reassignment were comparable to those she performed prior to her
reassignment[27] finds no basis in fact or in law. In terms of performing
comparative functions, the reassignment here is no different from that of a RATAentitled officer of the Department of Science and Technology who, as Chief of the
Finance and Management Division, was reassigned to the Directors Office,
Finance and Management Service Office. We considered the officer entitled to
RATA despite the reassignment for lack of basis for the non-payment.[28] Indeed,
for an employee not to fall under the exception in Section 3.3.1, the functions
attached to the new office must be so alien to the functions pertaining to the former
office as to make the two absolutely unrelated or non-comparable.
Before disposing of this matter, we highlight the element of
inequity undergirding the DBMs case. By insisting that, as requisite for her receipt
of RATA, respondent must discharge her office as Bacnotans treasurer while on
reassignment at the La Union treasurers office, the DBM effectively punishes
respondent for acceding to her reassignment. Surely, the law could not have
intended to place local government officials like respondent in the difficult position
of having to choose between disobeying a reassignment order orkeeping an
allowance. As we observed in a parallel case:

[O]n petitioners contention that RATA should be allowed only if private

respondent is performing the duties of her former office, the CSC
correctly explained that private respondent was reassigned to another
office and thus her inability to perform the functions of her position as
Division Chief is beyond her control and not of her own volition.[]
x x x[29]

The DBM itself acknowledged the harshness of its position by carving in Section
3.3.1 an exception for national government officials performing comparable duties
while on reassignment, cushioning the deleterious financial effects reassignments
bring to the employee with due regard to the state of the governments coffers.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated

24 May 2005 and the Resolution dated 15 September 2005 of the Court of
Appeals.
SO ORDERED.
MEMORANDUM CIRCULAR NO. 52

MEMORANDUM CIRCULAR NO. 52 - PRESCRIBED UNIFORM RATES AND GUIDELINES IN THE

GRANT OF REPRESENTATION, TRANSPORTATION, CLOTHING AND QUARTERS ALLOWANCES,
AS WELL AS OVERTIME PAY AND HONORARIA IN LOCAL GOVERNMENTS

In consideration of existing local conditions and the inherent nature of the official functions and
responsibilities of local government officials, wherein many local government officials incur
representation and transportation expenses in the performance of their official duties and functions
which are not reimbursed from local funds in the absence of specific Presidential authority, it is
deemed necessary to provide uniform rates, standards and guidelines for the grant of allowances and
other benefits payable from local funds without need of further approval or prior authority from the
Office
of
the
President
or
other
national
Department.
To promote equity, therefore, while complying with the Constitutional mandate on standardization of
compensation, the rules and regulations governing allowances, overtime pay and honoraria that may
be
granted
by
local
governments
are
hereby
prescribed:
Section 1. Representation and Transportation Allowances. The Sangguniang Panlalawigan, the
Sangguniang Panlungsod, and the Sangguniang Bayan may authorize the following officials of
provinces, cities and municipalities, respectively, to collect monthly commutable representation and
transportation allowances, payable from the programmed appropriations provided for their respective

offices at similar rates not exceeding the maximum rates prescribed below which shall apply to each
type of allowance:
MAXIMUM MONTHLY REPRESENTATION OR TRANSPORTATION ALLOWANCES
1st 2nd 3rd 4th 5th 6th
Local Officials Class Class Class Class Class Class
Provincial Officials
1. Provincial Governor P1120 P1008 P907 P816 P735 P661
2. Provincial Vice-Governor,
Provincial Treasurer,
Provincial Assessor,
Provincial Budget Officer,
Provincial Engineer,
Provincial Agriculturist,
Provincial Planning and
Development Coordinator 960 864 778 700 630 567
3. Provincial Secretary P800 P720 P648 P583 P525 P472
City Officials
1. City Mayor 1120 1008 907 816 735 661
2. City Vice-Mayor,
City Treasurer,
City Engineer,
City Budget Officer,
City Planning and
Development Coordinator 960 864 778 700 630 567
3. City Secretary 800 720 648 583 525 472
Municipal Officials
1. Municipal Mayor 800 720 648 583 525 472
2. Municipal Vice-Mayor,
Municipal Treasurer,
Municipal Assessor,
Municipal Budget Officer,
Municipal Planning and
Development Coordinator 960 864 778 700 630 567
3. Municipal Secretary 640 576 518 467 420 378
City of Manila
1. City Mayor 1710 1539 1385 1247 1122 1010
2. City Vice-Mayor,
Administrator, Budget Officer,
Assessor, Treasurer, Engineer,
Health Officer, Legal Officer

Planning and Development

Coordinator, Civil Registrar
Veterinarian, Social Services and
Development Officer and General
Services Officer 1120 1008 907 816 735 661
3. City Secretary 960 864 778 700 630 567
Cities of Quezon, Pasay and Caloocan
1. City Mayor 1615 1454 1308 1177 1060 954
2. City Vice-Mayor,
Administrator, Budget Officer,
Assessor, Treasurer, Engineer,
Health Officer, Legal Officer
Planning and Development
Coordinator, Civil Registrar
Veterinarian, Social Services and
Development Officer and General
Services Officer 960 864 778 700 630 567
3. City Secretary 800 720 648 583 525 472
Municipalities (Metropolitan Manila)
1. Municipal Mayor 800 720 648 583 525 472
2. Municipal Vice-Mayor,
Administrator, Treasurer,
Assessor, Budget Officer,
Planning and Development
Coordinator and Engineer 720 648 583 525 472 425
3. Municipal Secretary 640 576 518 467 420 378
Other local officials not specifically enumerated above may also be entitled to commutable
monthly representation and transportation allowances if so authorized by the Sanggunian
concerned provided that the positions they are occupying are declared or certified by the
Joint Commission on Local Government Personnel Administration or by law as equivalent in
rank to a provincial, city or municipal chief of office or department head.
The transportation allowances herein authorized, however, shall not be granted to officials
who are assigned a government vehicle or who use government motor transportation in the
performance of their official duties and functions.