28. Funa vs Manila Economic and Cultural Office department framework.
” Subsumed under the rubric
“government instrumentality” are the following entities:
G.R. No. 193462 February 4, 2014
1. regulatory agencies,
J. Perez
2. Chartered institutions,
Facts: On 23 August 2010, petitioner sent a letter to the COA
requesting for a “copy of the latest financial and audit report” of 3. government corporate entities or government
the MECO invoking, for that purpose, his “constitutional right instrumentalities with corporate powers (GCE/GICP), and
to information on matters of public concern.” The petitioner
made the request on the belief that the MECO, being under the 4. GOCCs
“operational supervision” of the Department of Trade and
Industry (DTI), is a government owned and controlled The Administrative Code defines a GOCC:
corporation (GOCC) and thus subject to the audit jurisdiction of
the COA. (13) Government-owned or controlled corporation refers to any
agency organized as a stock or non-stock corporation, vested
Petitioner’s letter was received by COA Assistant with functions relating to public needs whether governmental or
Commissioner Jaime P. Naranjo, the following day. On 25 proprietary in nature, and owned by the Government directly or
August 2010, Assistant Commissioner Naranjo issued a through its instrumentalities either wholly, or, where applicable
memorandum referring the petitioner’s request to COA as in the case of stock corporations, to the extent of at least fifty-
Assistant Commissioner Emma M. Espina for “further one (51) per cent of its capital stock: . . . .
disposition.” In this memorandum, however, Assistant
Commissioner Naranjo revealed that the MECO was “not The above definition is, in turn, replicated in the more recent
among the agencies audited by any of the three Clusters of the Republic Act No. 10149 or the GOCC Governance Act of 2011
Corporate Government Sector.” m, to wit:
Issue: Whether or not MECO is a GOCC covered by the (o) Government-Owned or -Controlled Corporation (GOCC)
auditing power of COA. refers to any agency organized as a stock or non-stock
corporation, vested with functions relating to public needs
Held: No. Government instrumentalities are agencies of the whether governmental or proprietary in nature, and owned by
national government that, by reason of some “special function the Government of the Republic of the Philippines directly or
or jurisdiction” they perform or exercise, are allotted through its instrumentalities either wholly or, where applicable
“operational autonomy” and are “not integrated within the
as in the case of stock corporations, to the extent of at least a
majority of its outstanding capital stock: . . . .
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; second, 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.
The MECO is not a GOCC or government instrumentality. It is
a sui generis private entity especially entrusted by the
government with the facilitation of unofficial relations with the
people in Taiwan without jeopardizing the country’s faithful
commitment to the One China policy of the PROC. However,
despite its non-governmental character, the MECO handles
government funds in the form of the “verification fees” it
collects on behalf of the DOLE and the “consular fees” it collects
under Section 2 (6) of EO No. 15, s. 2001. Hence, under existing
laws, the accounts of the MECO pertaining to its collection of
such “verification fees” and “consular fees” should be audited
by the COA.
