G.R. No. 193462, 4 February 2014
The Manila Economic and Cultural Officewas organized on 16 December 1997 as a non–stock, non–profit corporation under Batas Pambansa Blg. 68 or the Corporation Code, “entrusted” by the Philippine government with the responsibility of fostering “friendly” and “unofficial” relations with the people of Taiwan, particularly in the areas of trade, economic cooperation, investment, cultural, scientific and educational exchanges.
Petitioner sent a letter to the COA requesting for a “copy of the latest financial and audit report” of the MECO invoking, for that purpose, his “constitutional right to information on matters of public concern.”
In response, Assistant Commissioner Naranjo issued a memorandum revealing that the MECO was “not among the agencies audited by any of the three Clusters of the Corporate Government Sector
Taking the memorandum as an admission that the COA had never audited and examined the accounts of the MECO, the petitioner filed the instant petition for mandamus on 8 September 2010. Petitioner filed the suit in his capacities as “taxpayer, concerned citizen, a member of the Philippine Bar and law book author.” He impleaded both the COA and the MECO.
Petitioner posits that by failing to audit the accounts of the MECO, the COA is neglecting its duty under Section 2(1), Article IX–D of the Constitution to audit the accounts of an otherwise bona fide GOCC or government instrumentality. It is the adamant claim of the petitioner that the MECO is a GOCC without an original charter or, at least, a government instrumentality, the funds of which partake the nature of public funds.
In conceding that it has audit jurisdiction over the accounts of the MECO, however, the COA clarifies that it does not consider the former as a GOCC or a government instrumentality. On the contrary, the COA maintains that the MECO is a non–governmental entity.
Whether or not Manila Economic and Cultural Office is a non-governmental entity.
YES.The MECO is not a GOCC or government instrumentality.
Government instrumentalities are agencies of the national government that, by reason of some “special function or jurisdiction” they perform or exercise, are allotted “operational autonomy” and are “not integrated within the department framework.” Subsumed under the rubric “government instrumentality” are the following entities:1. regulatory agencies,
2. chartered institutions,
3. government corporate entities or government instrumentalities with corporate powers(GCE/GICP), and
The Administrative Code defines a GOCC:
(13) Government–owned or controlled corporation refers to any agency organized as a stock or non–stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty–one (51) per cent of its capital stock: x x x.
The above definition is, in turn, replicated in the more recent Republic Act No. 10149 or the GOCC Governance Act of 2011, to wit:
(o) Government–Owned or –Controlled Corporation (GOCC) refers to any agency organized as a stock or non–stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government of the Republic of the Philippines directly or through its instrumentalities either wholly or, where applicable as in the case of stock corporations, to the extent of at least a majority of its outstanding capital stock: x x x.
GOCCs, therefore, are “stock or non–stock” corporations “vested with functions relating to public needs” that are “owned by the Government directly or through its instrumentalities.” By definition, three attributes thus make an entity a GOCC: first, its organization as stock or non–stock corporation;94second, the public character of its function; and third, government ownership over the same.
Possession of all three attributes is necessary to deem an entity a GOCC.
In this case, there is not much dispute that the MECO possesses the first and second attributes. It is the third attribute, which the MECO lacks.
We grant the petition in part. We declare that the MECO is a non–governmental entity. However, under existing laws, the accounts of the MECO pertaining to the “verification fees” it collects on behalf of the DOLE as well as the fees it was authorized to collect under Section 2(6) of EO No. 15, s. 2001, are subject to the audit jurisdiction of the COA. Such fees pertain to the government and should be audited by the COA.
*Case Digest by JAY MARK P. BALBOSA JD – IV, Andres Bonifacio College, SY 2019 – 2020