SYLLABI/SYNOPSIS

FIRST DIVISION

[G.R. No. 125498. February 18, 1999]

CONRADO B. RODRIGO, JR., ALEJANDRO A.

FACUNDO and REYNALDO G.
MEJICA, petitioners, vs. THE HONORABLE
SANDIGANBAYAN (First Division),
OMBUDSMAN and PEOPLE OF THE
PHILIPPINES, respondents.
DECISION
KAPUNAN, J.:
Petitioners Conrado B. Rodrigo and Reynaldo G.
Mejica are the Mayor and Municipal Planning and
Development Coordinator, respectively, of San Nicolas,
Pangasinan, while petitioner Alejandro A. Facundo is the
former Municipal Treasurer of the same municipality.
On 15 June 1992, the Municipality of San Nicolas,
represented by Mayor Rodrigo, entered into an agreement
with Philwood Construction, represented by Larry Lu, for
the electrification of Barangay Caboloan, San Nicolas, for
the sum of P486,386.18, requiring:
1. Installation of the two (2) units diesel power generator
(20) KVA, 220 W, Battery start and other accessories);
2. Installation of 24 rolls feeder lines with nos. 6, 8 and
ten wires;
3. Installation of 40 units 4 x 4 wooden post with
accessories; and
4. Construction of powerhouse with concrete foundation
double throw safety switches (double pole, 250 amperes
capacity of 220 V with fuse).[1]
On 2 September 1992, Mejica, the Planning and
Development Coordinator of San Nicolas, prepared an
Accomplishment Report stating that the Caboloan Power
Generation project was 97.5% accomplished. Said report
was supposedly approved by mayor Rodrigo and
confirmed by Larry Lu. On the basis of said report,
payment of P452,825.53 was effected by the Municipal
Treasurer, petitioner Facundo, to Philwood Construction.
On 14 August 1993, petitioners received a Notice of
Disallowance dated 21 June 1993 from the Provincial
Auditor of Pangasinan, Atty. Agustin Chan, Jr., who found
that as per COA (Commission on Audit) evaluation of the
electrification project, only 60.0171% of the project
(equivalent to P291,915.07) was actually
accomplished. Of the two units of generator supposedly
purchased, only one second-hand unit was delivered. The
same generator broke down after only two nights of
operation. In addition, instead of 40 wooden posts, only
27 were installed. The powerhouse was only 65.635%
completed. The Provincial Auditor thus disallowed the
amount of P160,910.46.
The graph below serves to illustrate the conflicts
between Mejicas report and the COAs:

Percentage
Accomplished

Amount paid P452,825.5393.0090% (accdg. to

Mejicas
By Municipality report)

Cost of Actual P291,915.0760.0171% (accdg. to

COA report)
Accomplishment

Amount P160,910.4633.08% (difference)

Disallowed

In September 1993, petitioners requested the Provincial

Auditor to lift the notice of disallowance [2] and to re-
inspect the project.[3] Petitioners reiterated their plea in a
letter to the Provincial Auditor dated 3 November 1993,
[4]
attaching therewith a Certificate of Acceptance and
Completion[5] signed by Clemente Arquero, Jr., Barangay
Captain of Caboloan, and Eusebio Doton, President of the
Cabaloan Electric Cooperative. The Provincial Auditor,
however, allegedly did not act on petitioners requests.
On 10 January 1994, the Provincial Auditor filed a
criminal complaint for estafa before the Ombudsman
against petitioners. Likewise impleaded were Larry Lu
and Ramil Ang, President and General Manager, and
Project Engineer, respectively, of Philwood Construction.
On 10 June 1995, Acting Ombudsman Francisco Villa
approved the filing of an information against petitioners
for violation of Section 3 (e) of Republic Act No.
3019[6] before the Sandiganbayan.
On 28 July 1995, petitioners filed a motion for
reinvestigation before
the Sandiganbayan. The Sandiganbayan granted said
motion in an Order dated 22 April 1996.
On 7 November 1995, the Office of the Special
Prosecutor issued a memorandum recommending that the
charges against petitioners be maintained. The
Ombudsman approved said memorandum.
Petitioners thereafter filed before the Sandiganbayan a
motion to quash the information alleging, as grounds
therefor that (1) the facts alleged in the information did
not constitute an offense, and (2) the same information
charged more than one offense. Petitioners, however, did
not elaborate on these grounds. They instead faulted the
Provincial Auditor for instituting the complaint against
them notwithstanding the pendency of their opposition to
the notice of disallowance. They also argued that the
evidence against them did not establish the element of
damage nor the presence of any conspiracy between them.
The Sandiganbayan denied said motion in an Order
dated 18 March 1996.
On 18 March 1996, the prosecution moved to suspend
petitioners pendente lite. Petitioners opposed the motion
on the ground that the Sandiganbayan lacked jurisdiction
over them. In a Resolution dated 2 July 1996,
the Sandiganbayan ruled that it had jurisdiction over
petitioners and ordered the suspension of
petitioners pendente lite.
Petitioners thus filed before this Court the instant
petition for certiorari under Rule 65, praying that the
Court annul: (a) the order of the Sandiganbayan denying
petitioners motion to quash, and (b) the resolution of the
same court upholding its jurisdiction over
petitioners.Petitioners likewise prayed that this Court
issue a temporary restraining order to enjoin
the Sandiganbayan from proceeding with the case.
On 28 August 1998, the court resolved to issue the
temporary restraining order prayed for.
 Petitioners allege the following grounds in support of
their petition:
I
THE SANDIGANBAYAN ERRED IN ALLOWING
THE LITIGATION OF THE CRIMINAL
INFORMATION FOR CONSPIRACY IN VIOLATING
SECTION 3(E) OF THE ANTI- GRAFT ACT
(R.A. 3019) WHEN THE NOTICE
OF DISALLOWANCE STILL PENDS WITH THE
PROVINCIAL AUDITOR UNDER PETITIONER
PROTEST SUPPORTED BY CERTIFICATE OF
COMPLETION AND ACCEPTANCE OF THE
REQUIRED ELEMENT OF 'CAUSING UNDUE
INJURY TO ANY PARTY, INCLUDING THE
GOVERNMENT AND GROSS NEGLIGENCE.
II
THE SANDIGANBAYAN HAS NO JURISDICTION TO
PROCEED AGAINST ALL THE PETITIONERS AND
ALL THE PROCEEDINGS THEREIN,
PARTICULARLY THE ORDER OF SUSPENSION
FROM OFFICE PENDENTE LITE, ARE NULL AND
VOID AB INITIO.
III
THE ONGOING PROCEEDINGS BEFORE
THE SANDIGANBAYAN IS A CLEAR VIOLATION OF
THE CONSTITUTIONAL RIGHTS OF THE
PETITIONERS UNDER THE DUE PROCESS
CLAUSE AS IT WAS PRECEDED BY HASTY,
MALICIOUS, SHAM AND HASTY PRELIMINARY
INVESTIGATION INEVITABLY EXPOSING THEM
TO A PROLONGED ANXIETY, AGGRAVATION,
EXPENSES, AND HUMILIATION OF A PUBLIC
TRIAL.
IV
THE PRECIPITATE SANDIGANBAYAN ORDER OF
SUSPENSION IS A LEGAL ERROR AS THE SAME
EVIDENTLY THE LACK OF THE REQUIRED COLD
NEUTRALITY OF AN IMPARTIAL
TRIBUNAL VIOLATING PETITIONERS
CONSTITUTIONAL RIGHTS UNDER THE DUE
PROCESS CLAUSE AND BILL OF RIGHTS.[7]
The first ground raises two issues: (1) whether
petitioners right to due process was violated by the filing
of the complaint against them by the Provincial Auditor,
and (2) whether the Ombudsman committed grave abuse
of discretion in filing the information against
petitioners. The second questions the jurisdiction of
the Sandiganbayan over petitioners. The third and fourth
grounds are related to the first and are subsumed
thereunder.
After a meticulous scrutiny of petitioners arguments,
we find the petition devoid of merit.
I
Petitioners contend that the institution by the Provincial
Auditor of the complaint despite the pendency of their
opposition to the notice of disallowance violates their
right to due process. They submit that the issuance of a
notice of disallowance against (them) compels the
provincial auditor to either accept a settlement or
adjudicate and decide on the written explanation for the
purpose of lifting/settling the suspension or extending the
time to answer beyond the ninety (90) day period prior to
its conversion into a disallowance.[8]
The italicized portion above is an excerpt from Section
44.6.4 of the State Audit Manual, which states in full:
Sec. 44.6.4. Auditors Responsibility re Evaluation of
Disallowance. It shall be the responsibility of the auditor
to exercise professional judgment in evaluating, on the
basis of the facts and circumstances of each case as well
as the pertinent provisions of applicable laws, rules and
regulations, the grounds for a charge or
suspension/disallowance of an account or transaction.
It shall be the responsibility of the auditor to exercise
sound judgment in evaluating the written explanation of
the accountable/responsible/liable officer concerned for
the purpose of lifting the suspension or extending the time
to answer beyond the ninety (90) day period prior to its
conversion into a disallowance. (Underscoring supplied.)
The aforequoted provision should be read in
conjunction with Section 82 of the State Audit Code,
[9]
which states that:
(a) charge of suspension which is not satisfactorily
explained within ninety days after receipt or notice by
the accountable officer concerned shall become a
disallowance, unless the Commission or auditor
concerned shall, in writing and for good cause shown,
extend the time for answer beyond ninety days.
At this point, it may be useful to distinguish between a
disallowance and a suspension. A disallowance is the
disapproval of a credit or credits to an
account/accountable officers accountability due to non-
compliance with law or regulations.[10] Thus, the auditor
may disallow an expenditure/transaction which is
unlawful or improper.[11]
A suspension, on the other hand, is the deferment of
action to debit/credit the account/accountable officers
accountability pending compliance with certain
requirements.[12] A notice of suspension is issued on
transactions or accounts which could otherwise have been
settled except for some requirements, like lack of
supporting documents or certain signatures. It is also
issued on transactions or accounts the legality/propriety of
which the auditor doubts but which he may later allow
after satisfactory or valid justification is submitted by the
parties concerned.[13]
As stated in Section 82, supra, however, the suspension
shall become a disallowance if the charge of suspension is
not satisfactorily explained within ninety days after
receipt or notice by the accountable officer concerned."
The ninety-day period within which the accountable
officer may answer the charge of suspension may
nevertheless be extended by the Commission or the
auditor for good cause shown.
Clearly, petitioners misinterpreted Section 44.6.4. First,
petitioners were not charged
with suspension but disallowance. Second, the written
explanation referred to in said section is for the purpose of
lifting the suspension or extending the time to answer
beyond the ninety (90) day period prior to its conversion
into a disallowance, not for contesting a disallowance, as
petitioners wrongfully assert. Section 44.6.4., therefore,
finds no application in this case.
On the other hand, respondents correctly invoke
Sections 55 and 56 of Commission on Audit Circular No.
85-156-B, which respectively provide:
SECTION 55. REPORTING FRAUD/UNLAWFUL
ACTIVITIES
If after evaluation of the findings, the auditor is convinced
that the evidence sufficiently discloses the fraud and other
unlawful activities and identifies the perpetrators thereof,
he shall prepare the sworn statements of the examining
witnesses and/or other witnesses and make a report to the
Manager/Regional Director concerned, attaching thereto
copies of the pertinent affidavits and other supporting
documents.
SECTION 56. INSTITUTION OF CRIMINAL ACTION
If criminal prosecution is warranted, the Regional
Director/Manager concerned with respect to National
Government Agencies/government Owned or Controlled
Corporations or Provincial/City Auditors with respect to
local government units shall prepare a letter-complaint
and file the same with the Tanodbayan or the local
deputized Tanodbayan prosecutor within ten (10) days
from receipt of the report from the examining auditor,
attaching thereto copies of the sworn statements or
affidavits of witnesses and other pertinent documents.
Section 56 imposes upon the Provincial Auditor the
duty to file a complaint before the Tanodbayan (now the
Ombudsman) when, from the evidence obtained during
the audit, he is convinced that criminal prosecution is
warranted. The Provincial Auditor need not resolve the
opposition to the notice of disallowance and the motion
for re-inspection pending in his office before he institutes
such complaint so long as there are sufficient grounds to
support the same. The right to due process of the
respondents to the complaint, insofar as the criminal
aspect of the case is concerned, is not impaired by such
institution. The respondents will still have the opportunity
to confront the accusations contained in the complaint
during the preliminary investigation. They may still raise
the same defenses contained in their motion to lift the
disallowance, as well as other defenses, in the preliminary
investigation. Should the Provincial Auditor later reverse
himself and grant respondents motions, or should the
COA, or this Court, subsequently absolve them from
liability during the pendency of the preliminary
investigation, the respondents may ask the prosecuting
officer to take cognizance of such decision. The
prosecuting officer may then accord such decision its
proper weight.
It bears stressing that the exoneration of respondents in
the audit investigation does not mean the automatic
dismissal of the complaint against them. The preliminary
investigation, after all, is independent from the
investigation conducted by the COA, their purposes
distinct from each other.The first involves the
determination of the fact of the commission of a crime;
the second relates to the administrative aspect of the
expenditure of public funds.[14]
Accordingly, we hold that the Ombudsman did not err
in entertaining the complaint filed by the Provincial
Auditor against petitioners, nor the Sandiganbayan in
allowing trial to proceed, despite the pendency of
petitioners motions before the auditor.
II
Petitioners argue that their opposition to the
disallowance, supported as it is by a certificate of
acceptance and completion, would betray the absence of
the elements of evident bad faith or negligence, and
damage. They likewise claim that the evidence does not
establish conspiracy among them.
The presence or absence of the elements of the crime,
however, is evidentiary in nature and is a matter of
defense, the truth of which can be best passed upon after a
full-blown trial on the merits.[15] The same applies to the
alleged absence of any conspiracy between the accused.
This Court, moreover, has maintained a consistent
policy of non-interference in the determination of the
Ombudsman regarding the existence of probable cause,
provided there is no grave abuse in the exercise of such
discretion.[16] In a recent decision,[17] this Court,
quoting Young vs. Office of the Ombudsman,[18] stated the
rationale for this rule:
... The rule is based not only upon respect for the
investigatory and prosecutory powers granted by the
Constitution to the Office of the Ombudsman but upon
practicality as well. Otherwise, the functions of the court
will be grievously hampered by innumerable petitions
assailing the dismissal of investigatory proceedings
conducted by the Office of the Ombudsman with regard to
complaints filed before it, in much the same way that the
courts would be extremely swamped if they could be
compelled to review the exercise of discretion on the part
of the fiscals or prosecuting attorneys each time they
decide to file an information in court or dismiss a
complaint by a private complainant.
Petitioners have failed to establish any such abuse on
the part of the Ombudsman.
III
Petitioners next question the jurisdiction of
the Sandiganbayan. They contend that Mayor Rodrigo
occupies a position of Grade 24 and is, therefore, beyond
the original and exclusive jurisdiction of
the Sandiganbayan.
Before the passage of Republic Act No. 7975[19] on 30
March 1995, the pertinent portions of section 4 of
Presidential Decree No. 1606,[20] as amended by
Presidential Decree No. 1861,[21]read as follows:
SEC. 4. Jurisdiction. The Sandiganbayan shall exercise:
 (a) Exclusive original jurisdiction in all cases involving:
(1) Violations of Republic Act No. 3019, as amended,
otherwise known as the Anti-Graft and Corrupt Practices
Act, Republic Act No. 1379, and Chapter II, Section 2,
Title VII of the Revised Penal Code;
(2) Other offenses or felonies committed by public
officers and employees in relation to their office,
including those employed in government-owned or
controlled corporations, whether simple or complexed
with other crimes, where the penalty prescribed by law is
higher than prision correccional or imprisonment for six
(6) years, or a fine of P6,000.00; PROVIDED,
HOWEVER, that offenses or felonies mentioned in this
paragraph where the penalty prescribed by law does not
exceed prision correccional or imprisonment for six (6)
years or a fine of P6,000.00 shall be tried by the proper
Regional Trial Court, Metropolitan Trial Court, Municipal
Trial Court and Municipal Circuit Trial Court.
xxx.
Section 2 of R.A. No. 7975 subsequently redefined the
jurisdiction of the Anti-Graft Court such that the pertinent
portions of Section 4 of P.D. No. 1606 now reads:
Sec. 4. Jurisdiction. -- the Sandiganbayan shall exercise
original jurisdiction in all cases involving:
a. Violations of Republic Act No. 3019, as amended,
otherwise known as the Anti-Graft and Corrupt Practices
Act, Republic Act No. 1379, and Chapter II, Section 2,
Title VII of the Revised Penal Code, where one or more
of the principal accused are officials occupying the
following positions in the government, whether in a
permanent, acting or interim capacity, at the time of the
commission of the offense:
(1) Officials of the executive branch occupying the
positions of regional director and higher, otherwise
classified as grade 27 and higher, of the Compensation
and Position Classification Act of 1989 (Republic Act No.
6758), specifically including:
(a) Provincial governors, vice-governors, members of
the sangguniang panlalawigan and provincial treasurers,
assessors, engineers, and other provincial department
heads;
(b) City mayors, vice-mayors, members of
the sangguniang panlungsod, city treasurers, assessors,
engineers, and other city department heads.
(c) Officials of the diplomatic service occupying the
position of consul and higher;
(d) Philippine army and air force colonels, naval captains,
and all officers of higher rank;
(e) PNP chief superintendent and PNP officers of higher
rank;
(f) City and provincial prosecutors and their assistants,
and officials and prosecutors in the Office of the
Ombudsman and special prosecutor;
(g) Presidents, directors or trustees, or managers of
government-owned or controlled corporations, state
universities or educational institutions or foundations;
(2) Members of Congress and officials thereof classified
as Grade 27 and up under the Compensation and Position
Classification Act of 1989;
(3) Members of the judiciary without prejudice to the
provisions of the Constitution;
(4) Chairmen and members of Constitutional
Commissions, without prejudice to the provisions of the
Constitution; and
(5) All other national and local officials classified as
Grade 27 and higher under the Compensation and
Position Classification Act of 1989.
b. Other offenses or felonies committed by the public
officials and employees mentioned in subsection (a) of
this section in relation to their office.
c. Civil and criminal cases filed pursuant to and in
connection with Executive Order Nos. 1, 2, 14 and 14-A.
In cases where none of the principal accused are
occupying positions corresponding to salary grade 27 or
higher, as prescribed in the said Republic Act No. 6758,
or PNP officers occupying the rank of superintendent or
higher, or their equivalent, exclusive jurisdiction thereof
shall be vested in the proper Regional Trial Court,
Metropolitan Trial Court, Municipal Trial Court, and
Municipal Circuit Trial Court, as the case may be,
pursuant to their respective jurisdictions as provided in
Batas Pambansa Blg. 129.
xxx
Then Associate, now Chief Justice, Hilario Davide
explained the effects of these amendments in People vs.
Magallanes:[22]
As a consequence of these amendments,
the Sandiganbayan partly lost its exclusive original
jurisdiction in cases involving violations of R.A. No.
3019, as amended,[23] as amended; R.A. No. 1379,[24] and
Chapter II, Section 2, Title VII of the Revised Penal Code,
[25]
it retains only cases where the accused are those
enumerated in subsection a, Section 4 above and,
generally, national and local officials classified as Grade
27 and higher under the Compensation and Position
Classification Act of 1989 (R.A. No. 6758). Moreover, its
jurisdiction over other offenses or felonies committed by
public officials and employees in relation to their office is
no longer determined by the prescribed penalty, viz., that
which is higher than prision correccional or
imprisonment for six years or a fine of P6,000.00; it is
enough that they are committed by those public officials
and employees enumerated in subsection a, Section 4
above. However, it retains its exclusive original
jurisdiction over civil and criminal cases filed pursuant to
or in connection with E.O. Nos. 1,[26] 2,[27] 14,[28] and 14-A.
[29]

The apparent intendment of these amendments is to

ease the dockets of the Sandiganbayanand to allow the
Anti-Graft Court to focus its efforts on the trial of those
occupying higher positions in government, the proverbial
big fish. Section 4, as amended, freed
the Sandiganbayanfrom the task of trying cases involving
lower-ranking government officials, imposing such duty
upon the regular courts instead. The present structure is
also intended to benefit these officials of lower rank,
especially those residing outside Metro Manila, charged
with crimes related to their office, who can ill-afford the
expenses of a trial in Metro Manila. As the Explanatory
Note of House Bill No. 9825[30] states:
One is given the impression that only lowly government
workers or the so-called small fry are expediently tried
and convicted by the Sandiganbayan. The reason for this
is that at present, the Sandiganbayan has the exclusive
and original jurisdiction over graft cases committed by all
officials and employees of the government, irrespective of
rank and position, from the lowest-paid janitor to the
highly-placed government official. This jurisdiction of
the Sandiganbayan must be modified in such a way that
only those occupying high positions in the government
and the military (the big fishes) may fall under its
exclusive and original jurisdiction. In this was, the
Sandiganbayan can devote its time to big time cases
involving the big fishes in the government.The regular
courts will be vested with the jurisdiction of cases
involving less-ranking officials (those occupying
positions corresponding to salary grade twenty-seven (27)
and below and PNP members with a rank lower than
Senior Superintendent. This set-up will prove more
convenient to people in the provinces. They will no longer
have to travel to Manila to file their complaint or to
defend themselves. They can already file their complaint
or their defense before the Regional Trial Court or the
Municipal Trial Court in their respective localities, as the
case may be.
To distinguish the big fish from the small fry, Congress
deemed the 27th Grade as the demarcation between those
who should come under the jurisdiction of the
Sandiganbayan and those within the regular
courts. (While H.B. No. 9825 originally intended only
officials of Grade 28 and above as within the exclusive
and original jurisdiction of the Sandiganbayan, the
resulting law included officials of Grade 27.) Thus,
officials occupying positions of Grade 27 and above,
charged with crimes referred to in Section 4 a. and b., are
within the original and exclusive jurisdiction of the
Sandiganbayan; those below come under the jurisdiction
of the regular courts.
Although some positions of Grade 27 and above are
stated by name in Section 4 a., the position of Municipal
Mayor is not among them. Nevertheless, Congress
provided a catchall in Section 4 a. (5), thus:
(5) All other national and local officials classified as
Grade 27 and higher under the Compensation and
Position Classification Act of 1989.
Such a catchall is necessary, for it would be impractical, if
not impossible, for Congress to list down each position
created or will be created pertaining to Grades 27 and
above.
At present, Volume III of the 1997 edition of the Index
of Occupational Services, Position Titles and Salary
Grades, which was prepared by the Department of Budget
and Management (DBM) pursuant to Republic Act No.
6758,[31] otherwise known as the Compensation and
Position Classification Act of 1989, lists the following
positions under Salary Grade 27, including the position of
Municipal Mayor I:
Assistant Commissioner of Internal Revenue
Assistant Regional Cabinet Secretary
Assistant Regional Executive Secretary
Board Member I
Chairman, Police Regional Appellate Board
Chief of Mission, Class II
City Government Department Head III
City Trial Court Judge
Clerk of the Commission
Commission Member I
Court Attorney VI
Court of Appeals Reporter II
Deputy Administrator I
Deputy Commissioner I
Deputy Executive Director III
Deputy Insurance Commissioner
Director III
Executive Clerk of Court II
Executive Director II
Government Corporate Attorney III
Graft Investigation Officer II
Municipal Mayor I
Professor IV
Project Manager III
Prosecutor II
Provincial Agrarian Reform Adjudicator
Public Attorney IV
Regional Treasurer
Register of Deeds IV
Sangguniang Panlalawigan Member
Sangguniang Panlungsod Member II
Scientist II
Solicitor II
Special Prosecution Officer II
State Counsel IV
SUC President I
SUC Vice-President III
Earlier, in the 1989 version of the same Index, the
Municipal Mayor was also assigned a Salary Grade of
27. It appears, therefore, that petitioner Mayor comes
within the exclusive and original jurisdiction of the
Sandiganbayan.
Petitioners, however, claim that at the time of the
commission of the alleged crime on or about 2 September
1992, Mayor Rodrigo, the highest public ranking public
official impleaded in this case, was receiving a monthly
salary of P10,441.00. Such amount 6758 is supposedly
equivalent to a fourth step increment in Grade 24 under
the Salary Schedule prescribed in Section 7 of R.A. No.
6758: *
SEC. 7. Salary Schedule. The Department of Budget and
Management is hereby directed to implement the Salary
Schedule prescribed below:
Salary
Schedul
e
Grade 1st 2nd 3rd 4th 5th 6th 7th 8th
Xxx
24 10,13 10,23 10,33 10,44 10,64 10,65 10,76 10,86
5 6 9 2 6 2 8 6
Xxx

Petitioners conclude that Mayor Rodrigo, at the time of

the commission of the alleged crime, was occupying a
Grade 24 position and, thus, not within the
Sandiganbayans original and exclusive jurisdiction, as
defined in Section 2 of R.A. No. 7975.
This is a simplistic, and altogether incorrect,
interpretation of the law.
Section 5, Article IX-C of the Constitution provides
that:
The Congress shall provide for the standardization of
compensation of government officials and employees,
including those in government-owned or controlled
corporation with original charters, taking into account the
nature of the responsibilities pertaining to, and the
qualifications required for their positions.
This provision is not unique to the 1987
Constitution. The 1973 Constitution, in Section 6, Article
XII thereof, contains a very similar provision pursuant to
which then President Marcos, in the exercise of his
legislative powers, issued Presidential Decree No. 985.[32]
However, with the advent of the new Constitution, and
in compliance therewith, Congress enacted R.A. No.
6758. Section 2 thereof declares it the policy of the State
to provide equal pay for substantially equal work and to
base differences in pay upon substantive differences in
duties and responsibilities, and qualification requirements
of the positions."
To give life to this policy, as well as the constitutional
prescription to (take) into account the nature of the
responsibilities pertaining to, and the qualifications
required for the positions of government officials and
employees, Congress adopted the scheme employed in
P.D. No. 985 for classifying positions with comparable
responsibilities and qualifications for the purpose of
according such positions similar salaries. This scheme is
known as the Grade, defined in P.D. No. 985 as:
Includ[ing] all classes of positions which, although
different with respect to kind or subject matter of work,
are sufficiently equivalent as to level of difficulty and
responsibilities and level of qualification requirements of
the work to warrant the inclusion of such classes of
positions within one range of basic compensation.[33]
The Grade is therefore a means of grouping positions
sufficiently equivalent as to level of difficulty and
responsibilities and level of qualification requirements of
the work so that they may be lumped together in one
range of basic compensation.
Thus, Congress, under Section 8 of R.A. No. 6758,
fixed the Salary Grades[34] of officials holding
constitutional positions, as follows:
SEC. 8. Salaries of Constitutional Officials and their
Equivalent. Pursuant to Section 17, Article XVIII of the
Constitution, the salary of the following officials shall be
in accordance with the Salary Grades indicated hereunder:
Salary
Grade

President of the 33
Philippines
Vice-President of 32
the Philippines
President of the 32
Senate
Speaker of the 32
House of
Representatives
Chief Justice of 32
the Supreme
Court
Senator 31
Member of the 31
House of
Representatives
Associate Justices 31
of the Supreme
Court
Chairman of a
Constitutional 31
Commissionunder
Article IX, 1987
Constitution
Member of a
Constitutional 30
Commission
under Article IX,
1987 Constitution

The Department of Budget and Management is hereby

authorized to determine the officials who are of
equivalent rank to the foregoing Officials, where
applicable, and may be assigned the same Salary Grades
based on the following guidelines:
xxx
As indicated in the aforequoted section, Congress
delegated the rest of this tedious task (of fixing Salary
Grades) to the DBM, subject to the standards contained in
R.A. No. 6758, by authorizing the DBM to determine the
officials who are of equivalent rank to the foregoing
officials, where applicable, and to assign them the same
Salary Grades subject to a set of guidelines found in said
section.[35]
For positions below those mentioned under Section 8,
Section 9 directs the DBM to prepare the Index of
Occupational Services guided by (a) the Benchmark
Position prescribed in Section 9,[36] and (b) the following
factors:
(1) the education and experience required to perform
the duties and responsibilities of the position;
(2) nature and complexity of the work to be performed;
(3) the kind of supervision received;
(4) mental and/or physical strain required in the
completion of the work;
(5) nature and extent of internal and external
relationships;
(6) kind of supervision exercised;
(7) decision-making responsibility;
(8) responsibility for accuracy of records and reports;
(9) accountability for funds, properties and equipment;
and
(10) hardship, hazard and personal risk involved in the
job.
Pursuant to such authority, the DBM drafted the 1989
Index of Occupational Services, Position Titles and Salary
Grades, later revised in 1997. In both versions, the
position of Municipal Mayor was assigned a Salary Grade
27.
That petitioner received a salary less than that
prescribed for such Grade is explained by Sections 10 and
19 (b) of R.A. No. 6758, which respectively provide:
SEC. 10. Local Government Units (LGUs). -- The rates of
pay in LGUs shall be determined on the basis of the class
and financial capability of each LGU: Provided, That
such rates of pay shall not exceed the following
percentages of the rates in the salary schedule prescribed
under Section 7 hereof:

For For
Province Municip
s/Cities alities
Spe 100%
cial
Citi
es
1stCl100% 90%
ass
2ndC 95% 85%
lass
3rdC 90% 80%
lass
4thC 85% 75%
lass
5thC 80% 70%
lass
6thC 75% 65%
lass

SEC. 19. Funding Source. The funding sources for the

amounts necessary to implement this Act shall be as
follows:
(a) x x x
(b) For local government units, the amount shall be
charged against their respective funds. Local government
units which do not have adequate or sufficient funds shall
only partially implement the established rates as may be
approved by the Joint Commission under Section 8 of
Presidential Decree No. 1188: Provided, That any partial
implementation shall be uniform and proportionate for all
positions in each local government unit: Provided
further, That savings from National Assistance to Local
Government Units (NALGU) funds may be used for this
purpose.
x x x. (Underscoring supplied.)
Thus, a local government officials actual salary may be
less than what the Salary Schedule under Section 7
prescribes, depending on the class and financial capability
of his or her respective local government unit. This
circumstance, however, has no bearing on such officials
Grade. As the foregoing discussion shows, on officials
salary is determined by the Grade accorded his
position, and ultimately by the nature of his
position the level of difficulty and responsibilities and
level of qualification requirements of the work. To give
credence to petitioners argument that Mayor Rodrigos
salary determines his Grade would be to misconstrue the
provisions of R.A. No. 6758, and ignore the constitutional
and statutory policies behind said law.
Petitioner mayors position having been classified as
Grade 27 in accordance with R.A. No. 6758, and having
been charged with violation of Section 3 (e) of R.A. No.
3019, petitioner is subject to the jurisdiction of the
Sandiganbayan, as defined by Section 4 a. of P.D. No.
1606, as amended by Section 2 of R.A. No. 7975. By
virtue of the same Section 4 a., as amended, his co-
accused are also subject to the Anti-Graft Courts
jurisdiction.
WHEREFORE, the petition is
hereby DISMISSED and the Temporary Restraining Order
issued by this Court on 28 August 1996 LIFTED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Melo, and Pardo,
JJ., concur.

* *
Note, however, the P1.00 discrepancy between
petitioner's alleged salary and the salary prescribed under
the 4th step increment for Grade 24.*

[1]
Rollo, p. 44.
[2]
Annex A of Petition, Rollo, p. 39.
[3]
Annex B of Petition, id., at 40.
[4]
Annex C of Petition, id., at 41.
[5]
Annex D of Petition, id., at 42.
[6]
The Anti-Graft and Corrupt Practices Act.
[7]
Rollo, pp. 20-21. Italics in the original.
[8]
Id., at. 188. Italics in the original.
[9]
Presidential Decree No. 1445.
[10]
Section 2k, Commission on Audit Circular No. 85-
156-B. Section 3.9 of the Manual on Certificate of
Settlement and Balances (Revised 1993) (Commission on
Audit Circular No. 94-001) which superseded COA
Circular No. 85-156-B, defines disallowance as the
disapproval in audit of a transaction, either in whole or in
part.
[11]
Section 19, id. See also Section 14 of the Manual on
Certificate of Settlement and Balances (Revised 1993).
[12]
Section 2r, id. Under Section 3.18 of the Manual on
Certificate of Settlement and Balances (Revised 1993),
a suspension is the deferment of action to allow or
disallow in audit a transaction pending compliance with
certain requirements.
[13]
Section 21, id. See also Section 16, Manual on
Certificates of Settlement and Balances (Revised 1993).
[14]
Cf. Ramos vs. Aquino, 39 SCRA 585 (1971).
[15]
Olivarez vs. Sandiganbayan, 248 SCRA 700 (1995);
Ocampo III vs. Sandiganbayan, 236 SCRA 1 (1994).
[16]
Bienvenido Tan, Jr., vs. The Honorable Sandiganbayan
(Third Division), G.R. No. 128764, 10 July 1998; Rene
Knecht and Cristina de Knecht vs. Hon. Aniano A.
Desierto, as Ombudsman, et al., G.R. No. 121916, 26
June 1998; Leonila Garcia-Rueda vs. Wilfred L. Pacasio
et al., G.R. No. 118141, 5 September 1997; Camanag vs.
Guerrero, 268 SCRA 473 (1997); Paredes vs.
Sandiganbayan, 252 SCRA 659 (1996); Olivarez vs.
Sandiganbayan, supra, note 15.
[17]
Annie Tan vs. The Office of the Ombudsman, et al.,
G.R. Nos. 114332 &114895, September 10, 1998.
[18]
228 SCRA 718 (1995).
[19]
Entitled An Act to Strengthen the Functional and
Structural Organization of the Sandiganbayan, amending
for that Purpose Presidential Decree No. 1606 , as
amended."
[20]
Entitled Revising Presidential Decree No. 1486
Creating A Special Court to be known
as Sandiganbayan and for Other Purposes, promulgated
10 December 1978.
[21]
Entitled Amending the Pertinent Provisions of
Presidential Decree No. 1606 and Batas Pambansa Blg.
129 Relative to the Jurisdiction of the Sandiganbayan and
for other purposes, promulgated 23 March 1983.
[22]
249 SCRA 212 (1995).
[23]
Anti-Graft and Corrupt Practices Act.
[24]
Entitled, An Act Declaring Forfeiture in Favor of the
State Any Property Found to Have Been Unlawfully
Acquired by Any Public Officer or Employee and
Providing for the Proceeding Therefor.
[25]
Article 210, Direct Bribery; Article 211, Indirect
Bribery; and Article 212, Corruption of Public Officials.
[26]
Creating the Presidential Commission on Good
Government.
[27]
Regarding the Funds, Moneys, Assets, and Properties
Illegally Acquired or Misappropriated by Former
President Ferdinand E. Marcos, Mrs. Imelda R. Marcos,
Their Close Relatives, Subordinates, Business Associates,
Dummies, Agents, or Nominees.
[28]
Defining the Jurisdiction Over Cases Involving the Ill-
gotten Wealth of Former President Ferdinand E. Marcos,
Mrs. Imelda R. Marcos, Members of Their Immediate
Family, Close Relatives, Subordinates, Close
and/or Business Associates, Dummies, Agents, and
Nominees.
[29]
Amending E.O. No. 14.
[30]
Introduced by Representatives Garcia (P.), Starke,
Damasing, Apostol, Abueg, Abaya, Sator, Panes and other
members of the House of Representatives Committee on
Justice.
[31]
An Act Prescribing A Revised Compensation and
Position Classification System in the Government and
Other Purposes. R.A. No. 6758 went into effect on July 1,
1989 per Section 23 thereof.
[32]
A Decree Revising the Position Classification and
Compensation Systems in the National Government, and
integrating the same.
[33]
Section 3h, P.D. No. 985.
[34]
Salary Grade is the numerical place on the Salary
Schedule representing multiple steps or rates which is
assigned to a class. (Section 2s, P.D. No. 985.)
[35]
GRADE 33 This Grade is assigned to the President of
the Republic of the Philippines as the highest position in
the government. No other position in the government
service is considered to be of equivalent rank.
GRADE 32 This Grade is limited to the Vice President of
the Republic of the Philippines and those positions which
head the Legislative and Judicial Branches of the
government, namely: the Senate President, Speaker of the
House of Representatives and Chief Justice of the
Supreme Court. No other positions in the government
service are considered to be of equivalent rank.
GRADE 31 This Grade is assigned to Senators and
members of the House of Representatives and those with
equivalent rank as follows: the Executive Secretary,
Department Secretary, Presidential Spokesman,
Ombudsman, Press Secretary, Presidential Assistant with
Cabinet Rank, Presidential Adviser, National Economic
and Development Authority Director General, Court of
Appeals Presiding Justice, Sandiganbayan Presiding
Justice, Secretary of the Senate, Secretary of the House of
Representatives, and President of the University of the
Philippines.
An entity with a broad functional scope of operations and
wide area of coverage ranging from top level policy
formulation to the provision of technical and
administrative support to the units under it, with functions
comparable to the aforesaid positions in the preceding
paragraph, can be considered organizationally equivalent
to a Department, and its head to that of a Department
Secretary.
GRADE 30 Positions included are those of Department
Undersecretary, Cabinet Undersecretary, Presidential
Assistant, Solicitor General, Government Corporate
Counsel, Court Administrator of the Supreme Court,
Chief of Staff of the Office of the Vice-President,
National Economic and Development Authority Deputy
Director General, Presidential Management Staff
Executive Director, Deputy Ombudsman, Associate
Justices of the Court of Appeals, Associate Justices of the
Sandiganbayan, Special Prosecutor, University of the
Philippines Executive Vice-President, Mindanao State
University President, Polytechnic University of the
Philippines President and President of other state
universities and colleges of the same class.
Heads of councils, commissions, boards and similar
entities whose operations cut across offices or
departments or are serving a sizeable portion of the
general public and whose coverage is nationwide or
whose functions are comparable to the aforecited
positions in the preceding paragraph, may be placed at
this level.
The equivalent rank of positions not mentioned herein or
those that may be created hereafter shall be determined
based on these guidelines.
xxx
[36]
Benchmark Position Schedule
Position Title Sal
ary
Gra
de
Laborer I 1
Messenger 2
Clerk I 3
Driver I 3
Stenographer I 4
Mechanic I 4
Carpenter II 5
Electrician II 6
Secretary I 7
Bookkeeper 8
Administrative Assistant 8
Education Research Assistant I 9
Cashier I 10
Nurse I 10
Teacher I 10
Agrarian Reform Program Technologist 10
Budget Officer I 11
Chemist I 11
Agriculturist I 11
Social Welfare Officer I 11
Engineer I 12
Veterinarian I 13
Legal Officer I 14
Administrative Officer II 15
Dentist II 16
Postmaster IV 17
Forester III 18
Associate Professor I 19
Rural Health Physician 20