SC affirms CoA ruling on Napocor’s P327-M bonuses

THE Supreme Court (SC) affirmed the 2015 ruling of the Commission on Audit (CoA) that disallowed the distribution by state-run National Power Corp. (Napocor) of P327.27 million in performance incentive benefits to some officials and employees.

In February 2010, the Napocor board of directors granted the performance incentive benefits to some officials and employees equivalent to their basic salary for five and a half months.

The CoA disallowed the benefits in 2015 because they were not approved by then President Fidel V. Ramos as required in Section 3(b) of Administrative Order (AO) 103.

The commission also ordered the Napocor directors involved to refund the disallowed benefits.

Napocor earlier argued that the benefits were approved by Mr. Ramos through Memorandum Order 198 that authorized a “pay for performance” in accordance with the corporation’s compensation plan.

In its decision dated Jan. 26 and published on June 30, the SC ruled that such “pay for performance” was meant to be implemented over a four-year period from its effectivity in 1994.

Moreover, it still required presidential approval based on a favorable review of Napocor’s performance in the previous year.

Napocor claimed that the grant was deemed authorized by Mr. Ramos because the board was composed of Cabinet secretaries who were said to be alter egos of the president.

The SC assailed such claim, saying that the board members approved the grant not as alter egos of the president but in their “ex officio” capacity under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001.

The SC further said that the benefits were extravagant because Napocor was operating at a massive net loss of P2.87 billion. — Bianca Angelica D. Añago