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De Jesus vs. COA G.R. No. 109023.

August 12, 1998

Petitioners are employees of the Local Water Utilities Administration (LWUA). Prior to
July 1, 1989, they were receiving honoraria as designated members of the LWUA Board
Secretariat and the Pre-qualification, Bids and Awards Committee. On July 1, 1989, RA
No. 6758, an Act Prescribing a Revised Compensation and Position Classification System
in the Government took effect. To implement said law, the Department of Budget and
Management issued Corporate Compensation Circular No. 10 discontinuing without
qualification all allowances and fringe benefits granted on top of basic salary on all
government officials and employees. Due to this Circular, the corporate auditor disallowed
on post audit, the payment of honoraria to the petitioners. Aggrieved, petitioners appealed
to the Commission on Audit (COA) and questioned the validity of said circular on the
grounds that it is inconsistent with the provisions of RA 6758 and that it is without force
and effect because it is not published in the Official Gazette. In its decision, the COA
upheld the validity and effectivity of Circular No. 10. Hence, the instant petition.
ISSUE: Whether or not Circular No. 10 is ineffective due to its non-publication in the
official gazette or in a newspaper of general circulation.
HELD: Circular No. 10 is ineffective. The Supreme Court finds the petition meritorious.
The Court ruled that to be effective and enforceable, the questioned circular must go
through the requisite publication in the Official Gazette or in a newspaper of general
circulation in the Philippines because it is in the nature of an administrative circular the
purpose of which is enforce or implement an existing law. It is not a mere interpretative
or internal regulation because it tends to deprive government workers of their allowances
and additional compensation sorely needed to keep body and soul. In this case, the
absence of the requisite publication makes the questioned circular null and void. In light
of the foregoing, the Court granted the petition and set aside the questioned decision