BY ATTY. JULIUS GREGORY B. DELGADO
ROSELLE A. CORVERA-CIRUNAY AND LIGAYA Q. DE GUZMAN VS. COMMISSION ON AUDIT, G.R. NO. 278177 (MAY 20, 2025): SUPREME COURT EN BANC RULES THAT FINANCIAL ASSISTANCE FOR THE INDIGENOUS PEOPLES CANNOT BE USED AS OPERATING EXPENSES OF THE NATIONAL COMMISSION ON INDIGENOUS PEOPLES (NCIP)
The case stems from the Memorandum of Agreement executed between Taganito Mining Corporation (TMC), Taganito HPAL Nickel Corporation (THPAL), Mamanwa Tribes of Barangay Taganito and Urbiztondo, Municipality of Claver, Surigao del Norte, members of Ang Madajaw na Panaghiusa ng Tribung Mamanwa sa Taganito ug Urbiztondo, and the National Commission on Indigenous Peoples (NCIP) Region XIII, wherein the mining company will provide financial assistance to the Indigenous Peoples in exchange for its consent for the construction and operation of a nickel mineral processing plant within the ancestral domain of the Mamanwa Indigenous Cultural Community (ICC).
Under the said Memorandum of Agreement, the mining company will provide Php2,000,000.00 a year for socio-economic projects of the Mamanwas but shall be channeled or coursed through the NCIP in a Trust Account established for the purpose.
In March 2012, the Mamanwa ICC passed a resolution outlining their annual socio-economic program, projects, and activities. They also included in the resolution financial assistance for the hiring of community organizers/development workers, tribal meeting/dialogues/general assembly, community visitations of NCIP, census validation, capability building/trainings/seminars of IPs and NCIP employees. Expenses for the general operation of NCIP Region XIII, such as rental, capital outlay, equipment, maintenance, communication, supplies, and materials were also included in the resolution.
The Commission on Audit issued Audit Observation Memorandum No. 2014-003 (2013) and 2014-004 (2014) noting that Php913,240.10 and Php509,205.79, respectively, were spent for operating expenses for NCIP Region XIII. These AOMs resulted to Notices of Suspension and eventually to Notices of Disallowance for a total of Php1,573,227.83 against petitioners Roselle Corvera-Cirunay, NCIP – Accountant III, and Ligaya Q. De Guzman, NCIP Finance and Administration Division Chief.
The parties of the MOA executed an Addendum modifying the terms and conditions of thereof that the financial assistance to defray the meager budget of NCIP will redound to the benefit of the Mamanwa ICC/IPs. Because of the Addendum, the COA Regional Director granted the appeal of petitioners. COA Proper reversed and set aside the ruling of the COA Regional Director and upheld the Notices of Disallowance. Hence, the petitioners filed a Petition before the Supreme Court.
The Supreme Court En Banc upheld the Notices of Disallowance since it was illegal/irregular to use the financial assistance for the Mamanwa ICC/IPs for administrative and operating expenses of the NCIP. The Court held that it is well-settled that trust funds held by any government agency must be “spent only for the specific purpose for which the trust was created or the funds received.” The Court held that in the instant case, the questioned disbursements were taken from a Trust Account, specifically created “to be exclusively used for…socio-economic projects” to benefit the IPs/ICCs of Surigao del Norte. Thus, using the funds for NCIP Region XIII’s basic running costs – rent, equipment purchases, maintenance, communication, and supplies – violated the law.
The Supreme Court held that the Resolution of the ICC/IPs cannot serve to amend the MOA as the Free and Prior Informed Consent (FPIC) Guidelines is stringent with respect to the signatories and review process of the FPIC Memorandum of Agreement, particularly the fact that it is the Chairperson, by the authority of the NCIP EN Banc, who is among the signatories of the FPIC MOA, and the FPIC MOA goes through a thorough review process by the Legal Affairs Office and Ancestral Domains Office of the NCIP after a review from a Regional Review Team or RRT. The Court also noted that the Addendum executed which became the basis of the COA Regional Director to grant the appeal of the petitioners is a mere afterthought and clearly a circumvention of the trust fund principle under relevant law, rules, and regulations.
As to liability, the Supreme Court modified the ruling of COA Proper only holding petitioner De Guzman solidarily liable as he approved the disallowed transactions without legal basis and proper justification. Citing the cases of Abrigo vs. Commission on Audit, G.R. No. 253117 (March 29, 2022), and Estalilla vs. Commission on Audit, G.R. No. 217448 (September 10, 2019), petitioner Corvera-Cirunay was absolved from liability since she merely performed ministerial duty of certifying the availability of funds.
This ruling is a welcome development as there is a clamor to directly give Royalty payments and financial assistance directly to the ICCs/IPs with NCIP having an oversight function only. At the end of the day, these Royalty payments and financial assistance are for the socio-economic development and well-being of the ICCs/IPs after they have sacrificed and ceded portion of their ancestral domain for economic undertaking of private investors.