G.R. No.

L-49705-09 February 8, 1979

TOMATIC ARATUC, SERGIO TOCAO, CISCOLARIO DIAZ, FRED TAMULA, MANGONTAWAR GURO
and BONIFACIO LEGASPI, petitioners, 
vs.
The COMMISSION ON ELECTIONS, REGIONAL BOARD OF CANVASSERS for Region XII (Central
Mindanao), ABDULLAH DIMAPORO, JESUS AMPARO, ANACLETO BADOY, et al., respondents. Nos. L-
49717-21 February 8,1979.  LINANG MANDANGAN, petitioner, 
vs.
THE COMMISSION ON ELECTIONS, THE REGIONAL BOARD OF CANVASSERS for Region XII, and
ERNESTO ROLDAN, respondents. L-49705-09 — Lino M. Patajo for petitioners.  Estanislao A. Fernandez
for private respondents.  L-49717-21 — Estanislao A. Fernandez for petitioner.  Lino M. Patajo for private
respondent.  Office of the Solicitor General, for Public respondents. 

BARREDO, J.:

Petition in G. R. Nos. L-49705-09 for certiorari with restraining order and preliminary injunction filed by six
(6) independent candidates for representatives to tile Interim Batasang Pambansa who had joined together
under the banner of the Kunsensiya ng Bayan which, however, was not registered as a political party or
group under the 1976 Election Code, P.D. No. 1296, namely Tomatic Aratuc, Sorgio Tocao, Ciscolario
Diaz, Fred Tamula, Mangontawar Guro and Bonifacio Legaspi her referred to as petitioners, to review the
decision of the respondent Commission on Election (Comelec) resolving their appeal from the Of the
respondent Regional Board of Canvasses for Region XII regarding the canvass of the results of the election
in said region for representatives to the I.B.P. held on April 7, 1978. Similar petition in G.R. Nos. L49717-
21, for certiorari with restraining order and preliminary injunction filed by Linang Mandangan, abo a
candidate for representative in the same election in that region, to review the decision of the Comelec
declaring respondent Ernesto Roldan as entitled to be proclaimed as one of the eight winners in said
election.

The instant proceedings are sequels of Our decision in G.R. No. L- 48097, wherein Tomatic Aratuc et al.
sought the suspension of the canvass then being undertaken by respondent dent Board in Cotabato city
and in which canvass, the returns in 1966 out of a total of 4,107 voting centers in the whole region had
already been canvassed showing partial results as follows: 

NAMES OF NO. OF
CANDIDATE VOTES 
S 

1. Roldan, 225,67
Ernesto (KB) 4 

2. Valdez, 217,78
Estanislao 9 
(KBL)
3. Dimporo, 199,24
Abdullah 4 
(KBL)

4. Tocao, 199,06
Sergio (KB) 2 

5. Badoy, 198,96
Anacleto 6 
(KBL)

6. Amparo, 184,76
Jesus (KBL) 4 

7. 183,64
Pangandama 6 
n,
Sambolayan
(KBL)

8. Sinsuat, 182,45
Datu Blah 7 
(KBL)

9. Baga, 171,65
Tomas (KBL) 6

10. Aratuc, 165,79

Tomatic (KB) 5 

11. 165,03
Mandangan, 2 
Linang(KB)

12. Diaz, 159,97

Ciscolario 7 
(KB)

13. Tamalu, 153,73

Fred (KB) 4 

14. Legaspi 148,20

Bonifacio 0 
(KB)
 15. Guro, 139,38
Mangontawar 6 
(KB)

16. Loma, 107,45

Nemesio (KB) 5 

17. 101,35
Macapeges, 0 
Malamama
(Independent)

(Votes Of the independent candidates who actually were not in contention omitted)" (Page 6, Record, L-
49705-09.) 

A supervening panel headed by Commissioner of Elections, Hon- Venancio S. Duque, had conducted of
the complaints of the petitioners therein of alleged irregularities in the election records in all the voting
centers in the whole province of Lanao del Sur, the whole City of Marawi, eight (8) towns of Lanao del
Norte, namely, Baloi, Karomatan, Matungao, Munai, Nunungan, Pantao Ragat, Tagoloan and Tangcal,
seven (7) towns in Maguindanao, namely, Barrira, Datu Piang, Dinaig, Matanog Parang, South Upi and
Upi, ten (10) towns in North Cotabato, namely, Carmen, Kabacan, Kidapwan, Magpet, Matalam Midsayap,
Pigcawayan, Pikit, Pres. Roxas and Tulonan, and eleven (11) towns in Sultan Kudarat, namely,
Bagumbayan, Columbia Don Mariano Marcos, Esperanza, Isulan, Kalamansig, Lebak, Lutayan, Palimbang,
President Quirino and Tacurong, by reason for which, petitioners had asked that the returns from said
voting centers be excluded from the canvass. Before the start of the hearings, the canvass was suspended
but after the supervisory panel presented its report, on May 15, 1978, the Comelec lifted its order of
suspension and directed the resumption of the canvass to be done in Manila. This order was the one
assailed in this Court. We issued a restraining order. 

After hearing the parties, the Court allowed the resumption of the canvass but issued the following
guidelines to be observed thereat: 

1. That the resumption of said canvass shall be held in the Comelec main office in Manila
starting not later than June 1, 1978; 

2. That in preparation therefor, respondent Commission on Elections shall see to it that all
the material election paragraph corresponding to all the voting center involved in Election
Nos. 78-8, 78-9, 78-10, 78-11 and 78-12 are taken to its main office in Manila, more
particularly, the ballot boxes, with the contents, used during the said elections, the books
of voters or records of voting and the lists or records of registered voters, on or before May
31, 1978;

3. That as soon as the corresponding records are available, petitioners and their counsel
shall be allowed to examine the same under such security measures as the respondent
Board may determine, except the contents of the ballot boxes which shall be opened only
 upon orders of either the respondent Board or respondent Commission, after the need
therefor has become evident, the purpose of such examination being to enable petitioners,
and their counsel to expeditiously determine which of them they would wish to be
scrutinized and passed upon by the Board as supporting their charges of election frauds
and anomalies, petitioners and their counsel being admonished in this connection, that no
dilatory tactics should be in by them and that only such records substantial objections
should be offered by them for the scrutiny by the Board; 

4. That none of the election returns reffered to in the petition herein shall be canvassed
without first giving the herein petitioners ample opportunity to make their specific
objections thereto, if they have any, and to show sufficient basis for the rejection of any of
the returns, and, in this connection, the respondent Regional Board of Canvassers should
give due consideration to the points raised in the memorandum filed by said petitioners
with the Commission on Election in the above cases dated April 26, 1978;

5. That should it appear to the board upon summary scrutiny of the records to be offered
by petitioners indication that in the voting center actually held and/or that election returns
were prepared either before the day of the election returns or at any other time, without
regard thereto or that there has been massive substitution of voters, or that ballots and/or
returns were prepared by the same groups of persons or individuals or outside of the
voting centers, the Board should exclude the corresponding returns from the canvass; 

6. That appeals to the commission on Election of the Board may be made only after all the
returns in question in all the above, the above five cases shall have been passed upon by
the Board and, accordingly, no proclamation made until after the Commission shall have
finally resolved the appeal without prejudice to recourse to this court, if warranted as
provided by the Code and the Constitution, giving the parties reasonable time therefor;

7. That the copies of the election returns found in the corresponding ballot boxes shall be
the one used in the canvass;

8. That the canvass shall be conducted with utmost dispatch, to the end that a
proclamation, if feasible, may be made not later than June 10, 1978; thus, the canvass
may be terminated as soon as it is evident that the possible number of votes in the still
uncanvassed returns with no longer affect the general results of the elections here in
controversy; 

9. That respondent Commission shall promulgate such other directive not inconsistent with
this resolution y necessary to expedite the proceedings herein contemplated and to
accomplish the purposes herein intended. (Pp. 8-9, Record. 

On June 1, 1978, upon proper motion, said guidelines were modified:

... in the sense that the ballot boxes for the voting centers just referred to need not be
taken to Manila, EXCEPT those of the particular voting centers as to which the petitioners
have the right to demand that the corresponding ballot boxes be opened in order that the
 votes therein may be counted because said ballots unlike the election returns, have not
been tampered with or substituted, which instances the results of the counting shall be
specified and made known by petitioners to the Regional Board of Canvassers not later
than June 3, 1978; it being understood, that for the purposes of the canvass, the
petitioners shall not be allowed to invoke any objection not already alleged in or
comprehend within the allegations in their complaint in the election cases above-
mentioned. (Page 8, Id.) 

Thus respondent Board proceeded with the canvass, with the herein petitioners presenting objections, most
of them supported by the report of handwriting and finger print experts who had examined the voting
records and lists of voters in 878 voting centers, out of 2,700 which they specified in their complaints or
petitions in Election Cases 78-8, 78-9, 78-10, 78-11 and 7812 in the Comelec. In regard to 501 voting
centers, the records cf. which, consisting of the voters lists and voting records were not available- and
could not be brought to Manila, petitions asked that the results therein be completely excluded from the
canvass. On July 11, 1978, respondent Board terminated its canvass and declared the result of the voting
to be as follows: 

NAME V
OF O
CANDID T
ATE E
S
O
B
T
A
I
N 

VALDE 4
Z, 3
Estanisl 6
ao ,
0
6
9 

DIMAP 4
ORO, 2
Abdulla 9
h ,
3
5
1 

PANGA 4
NDAMA 0
N, 6
Sambol ,
ayan 1
0
6 

SINSUA 4
T, Blah 0
3
,
4
4
5 

AMPAR 3
O, 9
Jesus 9
,
9
9
7 

MANDA 3
NGAN, 8
Linang 7
,
0
2
5 

BAGA, 3
Tomas 8
6
,
3
9
3 

BADOY, 3
Anaclet 7
o 4
,
9
3
3 
ROLDA 2
N, 7
Ernesto 5
,
1
4
1 

TOCAO, 2
Sergio 3
9
,
9
1
4

ARATU 2
C, 0
Tomatic 5
,
8
2
9 

GURO, 1
Mangon 9
tawar 0
,
4
8
9 

DIAZ, 1
Ciscolari 9
o 0
,
0
7
7 

TAMUL 1
A, Fred 8
0
,
2
8
 0 

LEGAS 1
PI, 7
Bonifaci 4
o ,
3
9
6 

MACAP 1
EGES, 6
Malama 0
na ,
2
7
1 

(Pp. 11-  
12,
Record.) 

Without loss of time, the petitioners brought the resolution of respondent Board to the Comelec. Hearing
was held on April 25, 1978, after which , the case was declared submitted for decision. However, on August
30,1978, the Comelec issued a resolution stating inter alia that : 

In order to enable the Commission to decide the appeal properly : 

a. It will have to go deeper into the examination of the voting records and registration
records and in the case of voting centers whose voting and registration records which have
not yet been submitted for the Commission to decide to open the ballot boxes; and 

b. To interview and get statements under oath of impartial and disinterested persons from
the area to determine whether actual voting took place on April 7, 1978, as well as those of
the military authorities in the areas affects (Page 12). Record, L-49705-09 .) 

On December 11, 1978, the Comelec required the parties "to file their respective written comments on the
reports they shall periodically receive from the NBI-Comelec team of finger-print and signature experts
within the inextendible period of seven (7) days from their receipt thereof". According to counsel for Aratuc,
et al., "Petitioners submitted their various comments on the report 4, the principal gist of which was that it
would appear uniformly in all the reports submitted by the Comelec-NBI experts that the registered voters
were not the ones who voted as shown by the fact that the thumbprints appearing in Form 1 were different
from the thumbprints of the voters in Form 5. " But the Comelec denied a motion of petitioners asking that
the ballot boxes corresponding to the voting centers the record of which are not available be opened and
that a date be set when the statements of witnesses referred to in the August 30, 1978 resolution would be
taken, on the ground that in its opinion, it was no longer necessary to proceed with such opening of ballot
boxes and taking of statements. 

For his part, counsel for petitioner M in G.R. No. L-49717-21 filed with Comelec on December 19,1978 a
Memorandum. To quote from the petition: 

On December 19, 1978, the KBL, through counsel, filed a Memorandum for the Kilusang
Bagong Lipunan (KBL) Candidates on the Comelec's Resolution of December 11, 1978, a
xerox copy of which is attached hereto and made a part hereof as Annex 2, wherein they
discussed the following topics: (I) Brief History of the President Case; (II) Summary of Our
Position and Submission Before the Honorable commission; and (III) KBL's Appeal Ad
Cautelam. And the fourth topic, because of its relevance to the case now before this
Honorable Court, we hereby quote for ready reference:

IV 

OUR POSITION WITH RESPECT TO THE 

ESOLUTION OF THE HONORABLE 

COMMISSION OF DECEMBER 11, 1978 

We respectfully submit that the Resolution of this case by this Honorable Commission
should be limited to the precincts and municipalities involved in the KB'S Petitions in Cases
Nos. 78-8 to 78-12, on which evidence had been submitted by the parties, and on which
the KB submitted the reports of their handwriting-print. Furthermore, it should be  limited by
the appeal of the KB. For under the Supreme Court Resolution of May 23, 1978, original
jurisdiction was given to the Board, with appeal to this Honorable Commission-
Considerations of other matters beyond these would be, in our humble opinion, without
jurisdiction. 

For the present, we beg to inform this Honorable Commission that we stand by the reports
and findings of the COMELEC/NBI experts as submitted by them to the Regional Board of
Canvassers and as confirmed by the said Regional Board of Canvassers in its Resolution
of July 11, 1978, giving the 8 KBL candidates the majorities we have already above
mentioned. The Board did more than make a summary scrutiny of the records' required by
the Supreme Court Resolution, Guideline No. 5, of May 23, 1978. Hence, if for lack of
material time we cannot file any Memorandum within the non-extendible period of seven
(7) days, we would just stand by said COMELEC/NBI experts' reports to the Regional
Board, as confirmed by the Board (subject to our appeal ad cautelam).

The COMELEC sent to the parties copies of the reports of the NBI-COMELEC experts. For
lack of material time due to the voluminous reports and number of voting centers involved,
the Christmas holidays, and our impression that the COMELEC will exercise only its
appellate jurisdiction, specially as per resolution of this Honorable Court of May 23, 1978
 (in G.R. No. L-48097), we, the KBL, did not comment any more on said reports. (Pp. 5-6,
Record, L-49717-21.)

On January 13, 1979, the Comelec rendered its resolution being assailed in these cases, declaring the final
result of the canvass to be as follows:

CANDIDVOTES
ATES

VALDEZ,319,514
Estanisla
o

DIMAPO289.751
RO,
Abdullah

AMPARO 286,180
, Jesus

BADOY,285,985
Anacleto

BAGA, 271,473
Tomas

PANGAN271,393
DAMAN,
Sambola
yan

SINSUAT269,905
, Blah

ROLDAN 268,287
, Ernesto

MANDAN 251,226
GAN,
Linang

TACAO,229,124
Sergio

DIAZ, 187,986
 Ciscolari
o

ARATUC 183,316
, Tomatic

LEGASPI178,564
,
Bonifacio

TAMULA,
177,270
Fred

GURO, 163,449
Mangont
awar

LOMA, 129,450
Nemesio

(Page
  14,
Record,
L-49705-
09.)

It is alleged in the Aratuc petition that:

The Comelec committee grave abuse of dicretion, amounting to lack of jurisdiction:

1. In not pursuing further the examination of the registration records and voting records
from the other voting centers questioned by petitioners after it found proof of massive
substitute voting in all of the voting records and registration records examined by Comelec
and NBI experts;

2. In including in the canvass returns from the voting centers whose book of voters and
voting records could not be recovered by the Commission in spite of its repeated efforts to
retrieve said records;

3. In not excluding from the canvass returns from voting centers showing a very high
percentage of voting and in not considering that high percentage of voting, coupled with
massive substitution of voters is proof of manufacturing of election returns;

4. In denying petitioners' petition for the opening of the ballot boxes from voting centers
whose records are not available for examination to determine whether or not there had
been voting in said voting centers;
 5. In not Identifying the ballot boxes that had no padlocks and especially those that were
found to be empty while they were shipped to Manila pursuant to the directive of the
Commission in compliance with the guidelines of this Honorable Court;

6. In not excluding from the canvass returns where the results of examination of the voting
records and registration records show that the thumbprints of the voters in CE Form 5 did
not correspond to those of the registered voters as shown in CE Form 1;

7. In giving more credence to the affidavits of chairmen and members of the voting
centers, municipal treasurers and other election officials in the voting centers where
irregularities had been committed and not giving credence to the affidavits of watchers of
petitioners;

8. In not including among those questioned before the Board by petitioners those included
among the returns questioned by them in their Memorandum filed with the Commission on
April 26, 1978, which Memorandum was attached as Annex 'I' to their petition filed with this
Honorable Court G.R. No. L-48097 and which the Supreme Court said in its Guidelines
should be considered by the Board in the course of the canvass (Guidelines No. 4). (Pp.
15-16, Record, Id.)

On the other hand, the Mandangan petition submits that the Comelec comitted the following errors: 

1. In erroneously applying the earlier case of Diaz vs. Commission on Elections

(November 29, 1971; 42 SCRA 426), and particularly the highly restrictive criterion that
when the votes obtained by the candidates with the highest number of votes exceed the
total number of highest possible valid votes, the COMELEC ruled to exclude from the
canvass the election return reflecting such rests, under which the COMELEC excluded
1,004 election returns, involving around 100,000 votes, 95 % of which are for KBL
candidates, particularly the petitioner Linang Mandangan, and which rule is so patently
unfair, unjust and oppressive. 

2. In not holding that the real doctrine in the Diaz Case is not the total exclusion of election
returns simply because the total number of votes exceed the total number of highest
possible valid votes, but 'even if all the votes cast by persons Identified as registered
voters were added to the votes cast by persons who can not be definitely ascertained as
registered or not, and granting, ad arguendo, that all of them voted for respondent Daoas,
still the resulting total is much below the number of votes credited to the latter in returns for
Sagada, 'and that 'of the 2,188 ballots cast in Sagada, nearly one-half (1,012) were cast by
persons definitely Identified as not registered therein or still more than 40 % of substitute
voting which was the rule followed in the later case of Bashier/Basman (Diaz Case,
November 19,1971,42 SCRA 426,432). 

3. In not applying the rule and formula in the later case of  Bashier and Basman vs.
Commission on Election (February 24, 1972, 43 SCRA 238) which was the one followed
by the Regional Board of Canvassers, to wit: 
 In Basman vs Comelec (L-33728, Feb. 24, 1972) the Supreme Court
upheld the Supreme Court upheld the ruling of the Commission setting the
standard of 40 % excess votes to justify the exclusion of election returns.
In line with the above ruling, the Board of Canvassers may likewise set
aside election returns with 40 % substitute votes. Likewise, where excess
voting occured and the excess was such as to destroy the presumption of
innocent mistake, the returns was excluded. 

(COMELEC'S Resolution, Annex I hereof, p. 22), which this Honorable Court must have
meant when its Resolution of May 23, 1978 (G.R. No. 7), it referred to  "massive
substitution of voters. 

4. In examining, through the NBI/COMELEC experts, the records in more than 878 voting
centers examined by the KB experts and passed upon by the Regional Board of
Canvassers which was all that was within its appellate jurisdiction is examination of more
election records to make a total of 1,085 voting centers (COMELEC'S Resolution, Annex 1
hereof, p. 100), being beyond its jurisdiction and a denial of due process as far as the KBL,
particularly the petitioner Mandangan, were concerned because they were informed of it
only on December, 1978, long after the case has been submitted for decision in
September, 1978; and the statement that the KBL acquiesced to the same is absolutely
without foundation. 

5. In excluding election returns from areas where the conditions of peace and order were
allegedly unsettled or where there was a military operation going on immediately before
and during election and where the voter turn out was high (90 % to 100 %), and where the
people had been asked to evacuate, as a ruling without jurisdiction and in violation of due
process because no evidence was at all submitted by the parties before the Regional
Board of Canvasssers. (Pp. 23-25, Record, L-47917-21.) 

Now before discussing the merits of the foregoing contentions, it is necessary to clarify first the nature and
extent of the Supreme Court's power of review in the premises. The Aratuc petition is expressly predicated
on the ground that respondent Comelec "committed grave abuse of discretion, amounting to lack of
jurisdiction" in eight specifications. On the other hand, the Mandangan petition raises pure questions of law
and jurisdiction. In other words, both petitions invoked the Court's certiorari jurisdiction, not its appellate
authority of review. 

This is as it should be. While under the Constitution of 1935, "the decisions, orders and rulings of the
Commission shall be subject to review by the Supreme Court" (Sec. 2, first paragraph, Article X) and
pursuant to the Rules of Court, the petition for "certiorari or review" shall be on the ground that the
Commission "has decided a question of substance not theretofore determined by the Supreme Court, or
has decided it in a way not in accord with law or the applicable decisions of the Supreme Court" (Sec. 3.
Rule 43), and such provisions refer not only to election contests but even to pre-proclamation proceedings,
the 1973 Constitution provides somewhat differently thus: "Any decision, order or ruling of the
Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days
from his receipt of a copy thereof" (Section 11, Article XII c), even as it ordains that the Commission shall
"be the sole judge of all contests relating to the elections, returns and qualifications of all members of the
National Assembly and elective provincial and city official" (Section 2(2).)
Correspondingly, the ElectionCode of 1978, which is the first legislative constructionof the pertinent
constitutional provisions, makes the Commission also the "sole judge of all pre-proclamation controversies"
and further provides that "any of its decisions, orders or rulings (in such contoversies) shall be final and
executory", just as in election contests, "the decision of the Commission shall be final, and executory and
inappealable." (Section 193)

It is at once evident from these constitutional and statutory modifications that there is a definite tendency to
enhance and invigorate the role of the Commission on Elections as the independent constitutinal body
charged with the safeguarding of free, peaceful and honest elections. The framers of the new Constitution
must be presumed ot have definite knowledge of what it means to make the decisions, orders and rulings
of the Commission "subject to review by the Supreme Court". And since instead of maintaining that
provision intact, it ordained that the Commission's actuations be instead "brought to the Supreme Court
on certiorari", We cannot insist that there was no intent to change the nature of the remedy, considering
that the limited scope of certiorari, compared to a review, is well known in remedial law.

Withal, as already stated, the legislative construction of the modified peritinent constitutional provision is to
the effect that the actuations of the Commission are final, executory and even inappealable. While such
construction does not exclude the general certiorari jurisdiction of the Supreme Court which inheres in it as
the final guardian of the Constitution, particularly, of its imperious due process mandate, it correspondingly
narrows down the scope and extent of the inquiry the Court is supposed to undertake to what is strictly the
office of certiorari as distinguished from review. We are of the considered opinion that the statutory
modifications are consistent with the apparent new constitional intent. Indeed, it is obvious that to say that
actuations of the Commission may be brought to the Supreme Court on certiorari technically connotes
something less than saying that the same "shall be subject to review by the Supreme Court", when it
comes to the measure of the Court's reviewing authority or prerogative in the premises.

A review includes digging into the merits and unearthing errors of judgment, while certiorari deals
exclusively with grave abuse of discretion, which may not exist even when the decision is otherwise
erroneous. certiorari implies an indifferent disregard of the law, arbitrariness and caprice, an omission to
weight pertinent considerations, a decision arrived at without rational deliberation. While the effecdts of an
error of judgment may not differ from that of an indiscretion, as a matter of policy, there are matters taht by
their nature ought to be left for final determination to the sound discretion of certain officers or entities,
reserving it to the Supreme Court to insure the faithful observance of due process only in cases of patent
arbitrariness.

Such, to Our mind, is the constitutional scheme relative to the Commission on Elections. Conceived by the
charter as the effective instrument to preserve the sanctity of popular suffrage, endowed with independence
and all the needed concommittant powers, it is but proper that the Court should accord the greatest
measure of presumption of regularity to its course of action and choice of means in performing its duties, to
the end that it may achieve its designed place in the democratic fabric of our government. Ideally, its
members should be free from all suspicions of partisan inclinations, but the fact that actually some of them
have had stints in the arena of politics should not, unless the contrary is shown, serve as basis for denying
to its actuations the respect and consideration that the Constitution contemplates should be accorded to it,
in the same manner that the Supreme Court itself which from time to time may have members drawn from
the political ranks or even from military is at all times deemed insulated from every degree or form of
external pressure and influence as well as improper internal motivations that could arise from such
background or orientation.
We hold, therefore that under the existing constitution and statutory provisions, the certiorari jurisdiction of
the Court over orders, and decisions of the Comelec is not as broad as it used to be and should be
confined to instances of grave abuse of discretion amounting to patent and substantial denial of due
process. Accordingly, it is in this light that We the opposing contentions of the parties in this cases. 

THE MANDANGAN CASE 

Being more simple in Our view, We shall deal with the petition in G.R. No. L-49717-21 first. 

The errors assigned in this petition boil down to two main propositions, namely, (1) that it was an error of
law on the part of respondent Comelec to have applied to the extant circumstances hereof the ruling of this
Court in Diaz vs. Comelec 42 SCRA 426 instead of that of Bashier vs. Comelec 43 SCRA 238; and (2) that
respondent Comelec exceeded its jurisdiction and denied due process to petitioner Mandangan in
extending its inquiry beyond the election records of "the 878 voting centers examined by the KB experts
and passed upon by the Regional Board of Canvassers" and in excluding from the canvass the returns
showing 90 to 100 % voting, from voting centers where military operations were by the Army to be going
on, to the extent that said voting centers had to be transferred to the poblaciones the same being by
evidence. 

Anent the first proposition, it must be made clear that the Diaz and Bashier rulings are not mutually
exclusive of each other, each being an outgrowth of the basic rationale of statistical improbability laid down
in Lagumbay vs. Comelec and , 16 SCRA 175. Whether they be apply together or separately or which of
them be applied depends on the situation on hand. In the factual milieu of the instant case as found by the
Comelec, We see no cogent reason, and petitioner has not shown any, why returns in voting centers
showing that the votes of the candidate obtaining highest number of votes of the candidate obtaining the
highest number of votes exceeds the highest possible number of valid votes cast therein should not be
deemed as spurious and manufactured just because the total number of excess votes in said voting
centers were not more than 40 %. Surely, this is not the occasion, consider the historical antecedents
relative to the highly questionable manner in which elections have been bad in the past in the provinces
herein involved, of which the Court has judicial notice as attested by its numerous decisions in cases
involving practically every such election, of the Court to move a whit back from the standards it has
enunciated in those decisions. 

In regard to the jurisdictional and due process points raised by herein petitioner, it is of decisive importance
to bear in mind that under Section 168 of the Revised Election Code of 1978, "the Commission (on
Elections) shall have direct control and supervision on over the board of canvassers" and that relatedly,
Section 175 of the same Code provides that it "shall be the sole judge of all pre-proclamation
controversies." While nominally, the procedure of bringing to the Commission objections to the actuations
of boards of canvassers has been quite loosely referred to in certain quarters, even by the Commission and
by this Court, such as in the guidelines of May 23,1978 quoted earlier in this opinion, as an appeal, the fact
of the matter is that the authority of the Commission in reviewing such actuations does not spring from any
appellate jurisdiction conferred by any specific provision of law, for there is none such provision anywhere
in the Election Code, but from the plenary prerogative of direct control and supervision endowed to it by the
above-quoted provisions of Section 168. And in administrative law, it is a too well settled postulate to need
any supporting citation here, that a superior body or office having supervision and control over another may
do directly what the latter is supposed to do or ought to have done. 
Consequently, anything said in Lucman vs. Dimaporo, 33 SCRA 387, cited by petitioner, to the contrary
notwithstanding, We cannot fault respondent Comelec for its having extended its inquiry beyond that
undertaken by the Board of Canvass On the contrary, it must be stated that Comelec correctly and
commendably asserted its statutory authority born of its envisaged constitutional duties vis-a-vis the
preservation of the purity of elections and electoral processes and p in doing what petitioner it should not
have done. Incidentally, it cannot be said that Comelec went further than even what Aratuc et al. have
asked, since said complaints had impugned from the outset not only the returns from the 878 voting centers
examined by their experts but all those mentioned in their complaints in the election cases filed originally
with the Comelec enumerated in the opening statements hereof, hence respondent Comelec had that much
field to work on. 

The same principle should apply in respect to the ruling of the Commission regarding the voting centers
affected by military operations. It took cognizance of the fact, not considered by the board of canvass, that
said voting centers had been transferred to the poblaciones. And, if only for purposes of pre-proclamation
proceedings, We are persuaded it did not constitute a denial of due process for the Commission to have
taken into account, without the need or presentation of evidence by the parties, a matter so publicly
notorious as the unsettled situation of peace and order in localities in the provinces herein involved that
their may perhaps be taken judicial notice of, the same being capable of unquestionable demonstration.
(See 1, Rule 129) 

In this connection, We may as well perhaps, say here as later that regrettably We cannot, however, go
along with the view, expressed in the dissent of our respected Chief Justice, that from the fact that some of
the voting centers had been transferred to the poblaciones there is already sufficient basis for Us to rule
that the Commission should have also subjected all the returns from the other voting centers of the some
municipalities, if not provinces, to the same degree of scrutiny as in the former. The majority of the Court
feels that had the Commission done so, it would have fallen into the error by petitioner Mandangan about
denial of due process, for it is relatively unsafe to draw adverse conclusions as to the exact conditions of
peace and order in those other voting centers without at list some prima facie evidence to rely on
considering that there is no allegation, much less any showing at all that the voting centers in question are
so close to those excluded by the Comelec on as to warrant the inescapable conclusion that the relevant
circumstances by the Comelec as obtaining in the latter were Identical to those in the former. 

Premises considered the petition in G.R. Nos. L-49717-21 is hereby dismiss for lack of merit. 

THE ARATUC ET AL. PETITION 

Of the eight errors assigned by herein petitioners earlier adverted to, the seventh and the sight do not
require any extended disquisition. As to the issue of whether the elections in the voting centers concerned
were held on April 7, 1978, the date designated by law, or earlier, to which the seventh alleged error is
addressed, We note that apparently petitioners are not seriously pressing on it anymore, as evidenced by
the complete absence of any reference thereto during the oral argument of their counsel and the practically
cavalier discussion thereof in the petition. In any event, We are satisfied from a careful review of the
analysis by the Comelec in its resolution now before Us that it took pains to consider as meticulously as the
nature of the evidence presented by both parties would permit all the contentions of petitioners relative to
the weight that should be given to such evidence. The detailed discussion of said evidence is contained in
not less than nineteen pages (pp. 70-89) of the resolution. In these premises, We are not prepared to hold
that Comelec acted wantonly and arbitrarily in drawing its conclusions adverse to petitioners' position. If
errors there are in any of those conclusions, they are errors of judgment which are not reviewable in
certiorari, so long as they are founded on substantial evidence. 

As to eighth assigned error. the thrust of respondents, comment is that the results in the voting centers
mentioned in this assignment of error had already been canvassed at the regional canvass center in
Cotabato City. Again, We cannot say that in sustaining the board of canvassers in this regard, Comelec
gravely abused its discretion, if only because in the guidelines set by this Court, what appears to have been
referred to is, rightly or wrongly, the resumption only of the canvass, which does not necessarily include the
setting aside and repetition of the canvass already made in Cotabato City. 

The second and fourth assignments of error concern the voting centers the corresponding voters' record
(C.E. Form 1) and record of voting, (C.E. Form 5) of which have never been brought to Manila because
they, were not available The is not clear as to how many are these voting centers. According to petitioners
they are 501, but in the Comelec resolution in question, the number mentioned is only 408, and this number
is directly challenged in the petition. Under the second assignment, it is contended that the Comelec
gravely abused its discretion in including in the canvass the election returns from these voting centers and,
somewhat alternatively, it is alleged as fourth assignment that the petitioners motion for the opening of the
ballot boxes pertaining to said voting centers was arbitraly denied by respondent Comelec.

The resolution under scrutiny explains the situation that confronted the Commission in regard to the 408
voting centers reffered to as follows :

The Commission had the option of excluding from the canvass the election returns under
category. By deciding to exclude, the Commission would be summarily disenfranchising
the voters registered in the voting centers affected without any basis. The Commission
could also order the inclusion in the canvass of these elections returns under the injunction
of the Supreme Court that extremes caution must be exercised in rejecting returns unless
these are palpably irregular. The Commission chose to give prima facie validity to the
election returns mentioned and uphold the votes cast by the voters in those areas. The
Commission held the view that the failure of some election officials to comply with
Commission orders(to submit the records) should not parties to such official disobedience.
In the case of Lino Luna vs. Rodriguez, 39 Phil. 208, the Supreme Court ruled that when
voters have honestly cast their ballots, the same should not be nullified because the
officers appointed under the law to direct the election and guard the purity of the ballot
have not complied with their duty. (cited in Laurel on Elections, p. 24)

On page 14 of the comment of the Solicitor General, however, it is stated that:

At all events, the returns corresponding to these voting centers were examined by the
Comelec and 141 of such returns were excluded, as follows:
This assertion has not been denied by petitioners.  PROVINC TOT EXCLUD INCLUD
E AL ED ED
Thus, it appears that precisely use of the absence or
unavailability of the CE Forms 1 and 5 corresponding Lanao del 30 — 30
to the more than 400 voting centers concerned in our Norte
present discussion the Comelec examined the returns
from said voting centers to determine their Lanao del 342 137 205
trustworthiness by scrutinizing the purported relevant Sur
data appearing on their faces, believing that such was
the next best thing that could be done to avoid total Maguinda 21 1 20
disenfranchisement of the voters in all of them On the nao
Other hand, Petitioners' insist that the right thing to do
was to order the opening of the ballot boxes involved.  North 7 1 6
Cotabato
In connection with such opposing contentions,
Comelec's explanation in its resolution is:  Sultan 12 2 10
Kudarat
... The commission had it seen fit to
so order, could have directed the totals ----- 412 141 271
opening of the ballot boxes. But the
Commission did not see the necessity
of going to such length in a that was in nature and decided that there was sufficient bases
for the revolution of the appeal. That the Commission has discretion to determine when the
ballot boxes should be opened is implicit in the guidelines set by the Supreme Court which
states that '. . . the ballot bones [which] shall be opened only upon orders of either the
respondent Board or respondent Commission, after the need therefor has become
evident ... ' (guideline No. 3; emphasissupplied). Furthermore, the Court on June 1, 1978,
amended the guidelines that the "ballot boxes for the voting centers ... need not be taken
to Manila EXCEPT those of the centers as to which the petitioners have the right to
demand that the corresponding ballot boxes be opened ... provided that the voting centers
concerned shall be specified and made known by petitioners to the Regional Board of
Canvassers not later than June 3,1978 ... ' (Emphasis supplied). The KB, candidates did
not take advantage of the option granted them under these guidelines.( Pp 106-107,
Record.) 

Considering that Comelec, if it had wished to do so, had the facilities to Identify on its own the voting
centers without CE Forms I and 5, thereby precluding the need for the petitioners having to specify them,
and under the circumstances the need for opening the ballot boxes in question should have appeared to it
to be quite apparent, it may be contended that Comelec would have done greater service to the public
interest had it proceeded to order such opening, as it had announced it had thoughts of doing in its
resolution of August 30, 1978. On the other hand, We cannot really blame the Commission too much, since
the exacting tenor of the guidelines issued by Us left it with very little elbow room, so to speak, to use its
own discretion independently of what We had ordered. What could have saved matters altogether would
have been a timely move on the part of petitioners on or before June 3, 1978, as contemplated in Our
resolution. After all come to think of it, that the possible outcome of the opening of the ballot boxes would
favor the petitioners was not a certainty — the contents them could conceivably boomerang against them,
such as, for example, if the ballots therein had been found to be regular and preponderantly for their
opponents. Having in mind that significantly, petitioners filed their motion for only on January 9, 1979,
practically on the eve of the promulgation of the resolution, We hold that by having adhered to Our
guidelines of June 1, 1978, Comelec certainly cannot be held to be guilty of having gravely abused its
discretion, in examining and passing on the returns from the voting centers reffered to in the second and
fourth assignments of error in the canvass or in denying petitioners' motion for the of the ballot boxes
concerned. 

The first, third and sixth assignment of involve related matters and maybe discussed together. They all deal
with the inclusion in or exclusion from the canvass of returns on the basis of the percentage of voting in
specified voting centers and the corresponding findings of the Comelec on the extent of substitute voting
therein as indicated by the result of either the technical examination by experts of the signatures and
thumb-prints of the voters threat.

To begin with, petitioners' complaint that the Comelec did not examine and study 1,694 of the records in an
the 2,775 voting centers questioned by them is hardly accurate. To be more exact, the Commission
excluded a total of 1,267 returns coming under four categories namely: 1,001 under the Diaz, supra, ruling,
79 because of 90-100 % turnout of voters despite military operations, 105 palpably manufactured owe and
82 returns excluded by the board of canvass on other grounds. Thus, 45.45 % of the of the petitioners were
sustained by the Comelec. In contrast, in the board of canvassers, only 453 returns were excluded. The
board was reversed as to 6 of these, and 821 returns were excluded by Comelec over and above those
excluded by the board. In other words, the Comelec almost doubled the exclusions by the board. 

Petitioners would give the impression by their third assignment of error that Comelec refused to consider
high percentage of voting, coupled with mass substitute voting, as proof that the pertinent returns had been
manufactured. That such was not the case is already shown in the above specifications. To add more, it
can be gleaned from the resolution that in t to the 1,065 voting centers in Lanao del Sur and Marawi City
where a high percentage of voting appeared, the returns from the 867 voting centers were excluded by the
Comelec and only 198 were included a ratio of roughly 78 % to 22 %. The following tabulation drawn from
the figures in the resolution shows how the Comelec went over those returns center by center and acted on
them individually: 

90% — 100% VOTING 

MARAWI CITY AND LANAO DEL SUR 

NO. OF V/C THAT V/C WITH 90% to 100% 

MUNICIPALITIES FUNCTIONED VOTING 

    No. of Excl Inclu

V/C ude ded
d

M 151 112 107 5 

a
r
a
w
i
C
i
t
y

B 28 28 27 1 
a
c
o
l
o
d

G
r
a
n
d
e

B 53 53 49 4 
a
l
a
b
a
g
a
n

B 22 22 15 7 
a
l
i
n
d
o
n
g

B 29 20 13 7 
a
y
a
n
g
 

B 37 33 29 4
i
n
i
d
a
y
a
n

B 41 10 10 0 
u
a
d
i
p
o
s
o

B
u
n
t
o
n

B 24 23 21 2 
u
b
o
n
g
 

B 21      
u (All
m exc
b lud
a ed)
r
a
n

B 35 33 32 1 
u
t
i
g

C 23 21 21 0 
a
l
a
n
o
g
a
s

D 42 39 38 1 
i
t
s
a
a
n
-
R
a
m
a
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n

G 39 38 23 15
a
n
a
s
s
i 

L 64 63 47 16
u
m
b
a

B
a
y
a
b
a
o

L 30 28 17 11
u
m
b
a
t
a
n
 

L 37 33 28 5 
u
m
b
a
y
a
n
a
g
u
e
 

M 14 13 6 7 
a
d
a
l
u
m

M 20 20 5 15
a
d
a
m
b
a

M 57 55 53 2 
a
g
u
i
n
g

M 59 47 5 42
a
l
a
b
a
n
g

M 79 63 41 22
a
r
a
n
t
a
o

M 37 35 32 3 
a
r
u
g
o
n
g
 

M 27 26 24 2 
a
s
i
u
 
P 15 13 9 4 
a
g
a
y
a
w
a
n
 

P 39 39 36 3 
i
a
g
a
p
o
 

P 44 44 42 2 
o
o
n
a
-
B
a
y
a
b
a
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P 23 20 20 0 
u
a
l
a
s
 

S 36 32 21 11
a
g
u
i
a
r
a
n
 

S 35 31 31 0 
u
l
t
a
n

G
u
m
a
n
d
e
r

T 24 21 15 6 
a
m
p
a
r
a
n
 

T 31 31 31 0
a
r
a
k
a
 

T 23 19 19 0
u
b
a
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T        
O
T
A
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S
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M
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r
a
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&
 

L 1,2 1,065 867 198

a 18
n
a
o

d
e
l
S
u
r

We are convinced, apart from presuming regularity in the performance of its duties, that there is enough
showing in the record that it did examine and study the returns and pertinent records corresponding to all
the 2775 voting centers subject of petitioners' complaints below. In one part of its resolution the Comelec
states: 

The Commission as earlier stated examined on its own the Books of Voters (Comelec
Form No. 1) and the Voters Rewards Comelec Form No. 5) to determine for itself which of
these elections form needed further examination by the COMELEC-NBI experts. The
Commission, aware of the nature of this pre-proclamation controversy, believes that it can
decide, using common sense and perception, whether the election forms in controversy
needed further examination by the experts based on the presence or absence of patent
signs of irregularity. (Pp. 137-138, Record.) 
In the face of this categorical assertion of fact of the Commission, the bare charge of petitioners that the
records pertaining to the 1,694 voting centers assailed by them should not create any ripple of serious
doubt. As We view this point under discussion, what is more factually accurate is that those records
complained of were not examined with the aid of experts and that Comelec passed upon the returns
concerned "using common sense and perception only." And there is nothing basically objectionable in this.
The defunct Presidential Senate and House Electoral Tribunals examine passed upon and voided millions
of votes in several national elections without the assistance of experts and "using" only common sense and
perception". No one ever raised any eyebrows about such procedure. Withal, what we discern from the
resolution is that Comelec preliminary screened the records and whatever it could not properly pass upon
by "using common sense and perception" it left to the experts to work on. We might disagree with he
Comelec as to which voting center should be excluded or included, were We to go over the same records
Ourselves, but still a case of grave abuse of discretion would not come out, considering that Comelec
cannot be said to have acted whimsically or capriciously or without any rational basis, particularly if it is
considered that in many respects and from the very nature of our respective functions, becoming candor
would dictate to Us to concede that the Commission is in a better position to appreciate and assess the
vital circumstances closely and accurately. By and large, therefore, the first, third and sixth assignments of
error of the petitioners are not well taken. 

The fifth assignment of error is in Our view moot and academic. The Identification of the ballot boxes in
defective condition, in some instances open and allegedly empty, is at best of secondary import because,
as already discussed, the records related thereto were after all examined, studied and passed upon. If at
all, deeper inquiry into this point would be of real value in an electoral protest. 

CONCLUSION 

Before closing, it may not be amiss to state here that the Court had initially agreed to dispose of the cases
in a minute resolution, without prejudice to an extended or reasoned out opinion later, so that the Court's
decision may be known earlier. Considering, however, that no less than the Honorable Chief Justice has
expressed misgivings as to the propriety of yielding to the conclusions of respondent Commission because
in his view there are strong considerations warranting farther meticulous inquiry of what he deems to be
earmarks of seemingly traditional faults in the manner elections are held in the municipalities and provinces
herein involved, and he is joined in this pose by two other distinguished colleagues of Ours, the majority
opted to ask for more time to put down at least some of the important considerations that impelled Us to
see the matters in dispute the other way, just as the minority bidded for the opportunity to record their
points of view. In this manner, all concerned will perhaps have ample basis to place their respective
reactions in proper perspective. 

In this connection, the majority feels it is but meet to advert to the following portion of the ratiocination of
respondent Board of Canvassers adopted by respondent Commission with approval in its resolution under
question: 

First of all this Board was guided by the legal doctrine that canvassing boards must
exercise "extreme caution" in rejecting returns and they may do so only when the returns
are palpably irregular. A conclusion that an election return is obviously manufactured or
false and consequently should be disregarded in the canvass must be approached with
extreme caution, and only upon the most convincing proof. Any plausible explanation one
which is acceptable to a reasonable man in the light of experience and of the probabilities
 of the situation, should suffice to avoid outright nullification, with the resulting t of those
who exercised their right of suffrage. (Anni vs. Isquierdo et at L-35918, Jude 28,1974;
Villavon v. Comelec L-32008, August 31,1970; Tagoranao v. Comelec 22 SCRA 978). In
the absence of strong evidence establishing the spuriousness of the return, the basis rule
of their being accorded prima facie status as bona fide reports of the results of the count of
the votes for canvassing and proclamation purposes must be applied, without prejudice to
the question being tried on the merits with the presentation of evidence, testimonial and
real in the corresponding electoral protest. (Bashier vs. Comelec L-33692, 33699, 33728,
43 SCRA 238, February 24, 1972). The decisive factor is that where it has been duly de ed
after investigation and examination of the voting and registration records hat actual voting
and election by the registered voters had taken place in the questioned voting centers, the
election returns cannot be disregarded and excluded with the resting disenfranchisement
of the voters, but must be accorded prima facie status as bona fide reports of the results of
the voting for canvassing and registration purposes. Where the grievances relied upon is
the commission of irregularities and violation of the Election Law the proper remedy is
election protest. (Anni vs. Isquierdo et al. Supra). (P. 69, Record, L-49705-09). 

The writer of this opinion has taken care to personally check on the citations to be doubly sure they were
not taken out of context, considering that most, if not all of them arose from similar situations in the very
venues of the actual milieu of the instant cases, and We are satisfied they do fit our chosen posture. More
importantly, they actually came from the pens of different members of the Court, already retired or still with
Us, distinguished by their perspicacity and their perceptive prowess. In the context of the constitutional and
legislative intent expounded at the outset of this opinion and evident in the modifications of the duties and
responsibilities of the Commission on Elections vis-a-vis the matters that have concerned Us herein,
particularly the elevation of the Commission as the "sole judge of pre-proclamation controversies" as well
as of all electoral contests, We find the afore-quoted doctrines compelling as they reveal through the clouds
of existing jurisprudence the pole star by which the future should be guided in delineating and
circumscribing separate spheres of action of the Commission as it functions in its equally important dual
role just indicated bearing as they do on the purity and sanctity of elections in this country. 

In conclusion, the Court finds insufficient merit in the petition to warrant its being given due course. Petition
dismissed, without pronouncement as to costs. Justices Fernando, Antonio and Guerrero who are presently
on official missions abroad voted for such dismissal.
[G.R. Nos. 95203-05 :  December 18, 1990.]
192 SCRA 363
SENATOR ERNESTO MACEDA, Petitioner, vs. ENERGY REGULATORY BOARD (ERB); MARCELO N.
FERNANDO, ALEJANDRO B. AFURONG; REX V. TANTIONGCO; and OSCAR E. ALA, in their collective
official capacities as Chairman and Members of the Board (ERB), respectively; CATALINO MACARAIG, in
his quadruple official capacities as Executive Secretary, Chairman of Philippine National Oil Company;
Office of the Energy Affairs, and with MANUEL ESTRELLA, in their respective official capacities as
Chairman and President of the Petron Corporation; PILIPINAS SHELL PETROLEUM CORPORATION;
with CESAR BUENAVENTURA and REY GAMBOA as chairman and President, respectively; CALTEX
PHILIPPINES with FRANCIS ABLAN, President and Chief Executive Officer; and the Presidents of
Philippine Petroleum Dealer's Association, Caltex Dealer's Co., Petron Dealer's Asso., Shell Dealer's Asso.
of the Phil., Liquefied Petroleum Gas Institute of the Phils., any and all concerned gasoline and petrol
dealers or stations; and such other persons, officials, and parties, acting for and on their behalf; or in
representation of and/or under their authority, Respondents.
[G.R. Nos. 95119-21 :  December 18, 1990.]
192 SCRA 363
OLIVER O. LOZANO, Petitioner, vs. ENERGY REGULATORY BOARD (ERB), PILIPINAS SHELL
PETROLEUM CORPORATION, CALTEX (PHIL.), INC., and PETRON CORPORATION, Respondents.
DECISION
 SARMIENTO, J.:
 The petitioners pray for injunctive relief, to stop the Energy Regulatory Board (Board hereinafter) from
implementing its Order, dated September 21, 1990, mandating a provisional increase in the prices of
petroleum and petroleum products, as follows:
 PRODUCTS IN PESOS PER LITER
  OPSF
 Premium Gasoline 1.7700
 Regular Gasoline 1.7700
 Avturbo 1.8664
 Kerosene 1.2400
 Diesel Oil 1.2400
 Fuel Oil 1.4900
 Feedstock 1.4900
 LPG 0.8487
 Asphalts 2.7160
 Thinners 1.7121 1 
It appears that on September 10, 1990, Caltex (Philippines), Inc., Pilipinas Shell Petroleum Corporation,
and Petron Corporation proferred separate applications with the Board for permission to increase the
wholesale posted prices of petroleum products, as follows:
 Caltex P3.2697 per liter
 Shell 2.0338 per liter
 Petron 2.00 per liter 2 
and meanwhile, for provisional authority to increase temporarily such wholesale posted prices pending
further proceedings.:-cralaw
On September 21, 1990, the Board, in a joint (on three applications) Order granted provisional relief as
follows:
WHEREFORE, considering the foregoing, and pursuant to Section 8 of Executive Order No. 172, this
Board hereby grants herein applicants' prayer for provisional relief and, accordingly, authorizes said
applicants a weighted average provisional increase of ONE PESO AND FORTY-TWO CENTAVOS (P1.42)
per liter in the wholesale posted prices of their various petroleum products enumerated below, refined
and/or marketed by them locally. 3 
The petitioners submit that the above Order had been issued with grave abuse of discretion, tantamount to
lack of jurisdiction, and correctible by Certiorari.
The petitioner, Senator Ernesto Maceda, 4 also submits that the same was issued without proper notice
and hearing in violation of Section 3, paragraph (e), of Executive Order No. 172; that the Board, in
decreeing an increase, had created a new source for the Oil Price Stabilization Fund (OPSF), or otherwise
that it had levied a tax, a power vested in the legislature, and/or that it had "re-collected", by an act of
taxation, ad valorem taxes on oil which Republic Act No. 6965 had abolished.
The petitioner, Atty. Oliver Lozano, 5 likewise argues that the Board's Order was issued without notice and
hearing, and hence, without due process of law.
The intervenor, the Trade Union of the Philippines and Allied Services (TUPAS/FSM)-W.F.T.U., 6 argues
on the other hand, that the increase cannot be allowed since the respondents oil companies had not
exhausted their existing oil stock which they had bought at old prices and that they cannot be allowed to
charge new rates for stock purchased at such lower rates.
The Court set the cases (in G.R. Nos. 95203-05) for hearing on October 25, 1990, in which Senator
Maceda and his counsel, Atty. Alexander Padilla, argued. The Solicitor General, on behalf of the Board,
also presented his arguments, together with Board Commissioner Rex Tantiangco. Attys. Federico
Alikpala, Jr. and Joselia Poblador represented the oil firms (Petron and Caltex, respectively).
The parties were thereafter required to submit their memorandums after which, the Court considered the
cases submitted for resolution.
On November 20, 1990, the Court ordered these cases consolidated.
On November 27, 1990, we gave due course to both petitions.
The Court finds no merit in these petitions.
Senator Maceda and Atty. Lozano, in questioning the lack of a hearing, have overlooked the provisions of
Section 8 of Executive Order No. 172, which we quote:
"SECTION 8. Authority to Grant Provisional Relief . — The Board may, upon the filing of an application,
petition or complaint or at any stage thereafter and without prior hearing, on the basis of supporting papers
duly verified or authenticated, grant provisional relief on motion of a party in the case or on its own initiative,
without prejudice to a final decision after hearing, should the Board find that the pleadings, together with
such affidavits, documents and other evidence which may be submitted in support of the motion,
substantially support the provisional order: Provided, That the Board shall immediately schedule and
conduct a hearing thereon within thirty (30) days thereafter, upon publication and notice to all affected
parties.: nad
As the Order itself indicates, the authority for provisional increase falls within the above provision.
There is no merit in the Senator's contention that the "applicable" provision is Section 3, paragraph (e) of
the Executive Order, which we quote:
(e) Whenever the Board has determined that there is a shortage of any petroleum product, or when public
interest so requires, it may take such steps as it may consider necessary, including the temporary
adjustment of the levels of prices of petroleum products and the payment to the Oil Price Stabilization Fund
created under Presidential Decree No. 1956 by persons or entities engaged in the petroleum industry of
such amounts as may be determined by the Board, which will enable the importer to recover its cost of
importation.
What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not
preclude the Board from ordering, ex parte, a provisional increase, as it did here, subject to its final
disposition of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the
application. Section 37 paragraph (e) is akin to a temporary restraining order or a writ of preliminary
attachment issued by the courts, which are given ex parte, and which are subject to the resolution of the
main case.
Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the
other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the
jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the
requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to
increase provisionally, without need of a hearing, subject to the final outcome of the proceeding. The
Board, of course, is not prevented from conducting a hearing on the grant of provisional authority — which
is of course, the better procedure — however, it cannot be stigmatized later if it failed to conduct one. As
we held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board. 7 
In the light of Section 8 quoted above, public respondent Board need not even have conducted formal
hearings in these cases prior to issuance of its Order of 14 August 1987 granting a provisional increase of
prices. The Board, upon its own discretion and on the basis of documents and evidence submitted by
private respondents, could have issued an order granting provisional relief immediately upon filing by
private respondents of their respective applications. In this respect, the Court considers the evidence
presented by private respondents in support of their applications — i.e., evidence showing that importation
costs of petroleum products had gone up; that the peso had depreciated in value; and that the Oil Price
Stabilization Fund (OPSF) had by then been depleted — as substantial and hence constitutive of at least
prima facie basis for issuance by the Board of a provisional relief order granting an increase in the prices of
petroleum products. 8 
We do not therefore find the challenged action of the Board to have been done in violation of the due
process clause. The petitioners may contest however, the applications at the hearings proper.
Senator Maceda's attack on the Order in question on premises that it constitutes an act of taxation or that it
negates the effects of Republic Act No. 6965, cannot prosper. Republic Act No. 6965 operated to lower
taxes on petroleum and petroleum products by imposing specific taxes rather than ad valorem taxes
thereon; it is, not, however, an insurance against an "oil hike", whenever warranted, or is it a price control
mechanism on petroleum and petroleum products. The statute had possibly forestalled a larger hike, but it
operated no more.: nad
The Board Order authorizing the proceeds generated by the increase to be deposited to the OPSF is not an
act of taxation. It is authorized by Presidential Decree No. 1956, as amended by Executive Order No. 137,
as follows:
SECTION 8.  There is hereby created a Trust Account in the books of accounts of the Ministry of Energy to
be designated as Oil Price Stabilization Fund (OPSF) for the purpose of minimizing frequent price changes
brought about by exchange rate adjustments and/or changes in world market prices of crude oil and
imported petroleum products. The Oil Price Stabilization Fund (OPSF) may be sourced from any of the
following:
a) Any increase in the tax collection from ad valorem tax or customs duty imposed on petroleum products
subject to tax under this Decree arising from exchange rate adjustment, as may be determined by the
Minister of Finance in consultation with the Board of Energy;
b) Any increase in the tax collection as a result of the lifting of tax exemptions of government corporations,
as may be determined by the Minister of Finance in consultation with the Board of Energy;
c) Any additional amount to be imposed on petroleum products to augment the resources of the Fund
through an appropriate Order that may be issued by the Board of Energy requiring payment by persons or
companies engaged in the business of importing, manufacturing and/or marketing petroleum products;
d) Any resulting peso cost differentials in case the actual peso costs paid by oil companies in the
importation of crude oil and petroleum products is less than the peso costs computed using the reference
foreign exchange rates as fixed by the Board of Energy.
Anent claims that oil companies cannot charge new prices for oil purchased at old rates, suffice it to say
that the increase in question was not prompted alone by the increase in world oil prices arising from tension
in the Persian Gulf. What the Court gathers from the pleadings as well as events of which it takes judicial
notice, is that: (1) as of June 30, 1990, the OPSF has incurred a deficit of P6.1 Billion; (2) the exchange
rate has fallen to P28.00 to $1.00; (3) the country's balance of payments is expected to reach $1 Billion; (4)
our trade deficit is at $2.855 Billion as of the first nine months of the year.
Evidently, authorities have been unable to collect enough taxes necessary to replenish the OPSF as
provided by Presidential Decree No. 1956, and hence, there was no available alternative but to hike
existing prices.
The OPSF, as the Court held in the aforecited CACP cases, must not be understood to be a funding
designed to guarantee oil firms' profits although as a subsidy, or a trust account, the Court has no doubt
that oil firms make money from it. As we held there, however, the OPSF was established precisely to
protect the consuming public from the erratic movement of oil prices and to preclude oil companies from
taking advantage of fluctuations occurring every so often. As a buffer mechanism, it stabilizes domestic
prices by bringing about a uniform rate rather than leaving pricing to the caprices of the market.
In all likelihood, therefore, an oil hike would have probably been imminent, with or without trouble in the
Gulf, although trouble would have probably aggravated it.: nad
The Court is not to be understood as having prejudged the justness of an oil price increase amid the above
premises. What the Court is saying is that it thinks that based thereon, the Government has made out a
prima facie case to justify the provisional increase in question. Let the Court therefore make clear that
these findings are not final; the burden, however, is on the petitioners' shoulders to demonstrate the fact
that the present economic picture does not warrant a permanent increase.
There is no doubt that the increase in oil prices in question (not to mention another one impending, which
the Court understands has been under consideration by policy-makers) spells hard(er) times for the Filipino
people. The Court can not, however, debate the wisdom of policy or the logic behind it (unless it is
otherwise arbitrary), not because the Court agrees with policy, but because the Court is not the suitable
forum for debate. It is a question best judged by the political leadership which after all, determines policy,
and ultimately, by the electorate, that stands to be better for it or worse off, either in the short or long run.
At this point, the Court shares the indignation of the people over the conspiracy of events and regrets its
own powerlessness, if by this Decision it has been powerless. The constitutional scheme of things has
simply left it with no choice.
In fine, we find no grave abuse of discretion committed by the respondent Board in issuing its questioned
Order.
WHEREFORE, these petitions are DISMISSED. No costs.
SO ORDERED.
G.R. No. 1051            May 19, 1903

THE UNITED STATES, complainant-appellee, 

vs.
FRED L. DORR, ET AL., defendants-appellants. F. G. Waite for appellants.
Solicitor-General Araneta for appellee.

LADD, J.:

The defendants have been convicted upon a complaint charging them with the offense of writing,
publishing, and circulating a scurrilous libel against the Government of the United States and the Insular
Government of the Philippine Islands. The complaint is based upon section 8 of Act No. 292 of the
Commission, which is as follows:

Every person who shall utter seditious words or speeches, write, publish, or circulate scurrilous
libels against the Government of the United States or the Insular Government of the Philippine
Islands, or which tend to disturb or obstruct any lawful officer in executing his office, or which tend
to instigate others to cabal or meet together for unlawful purposes, or which suggest or incite
rebellious conspiracies or riots, or which tend to stir up the people against the lawful authorities, or
to disturb the peace of the community, the safety and order of the Government, or who shall
knowingly conceal such evil practices, shall be punished by a fine not exceeding two thousand
dollars or by imprisonment not exceeding two years, or both, in the discretion of the court.

The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902, under
the caption of "A few hard facts."

The Attorney-General in his brief indicates the following passages of the article as those upon which he
relies to sustain the conviction:

Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of the
Civil Commission in appointing rascally natives to important Government positions:

"It is a strong thing to say, but nevertheless true, that the Civil Commission, through its ex-
insurgent office holders, and by its continual disregard for the records of natives obtained
during the military rule of the Islands, has, in its distribution of offices, constituted a
protectorate over a set of men who should be in jail or deported. . . . [Reference is then
made to the appointment of one Tecson as justice of the peace.] This is the kind of foolish
work that the Commission is doing all over the Islands, reinstating insurgents and rogues
and turning down the men who have during the struggle, at the risk of their lives, aided the
Americans."

x x x           x x x          x x x

There is no doubt but that the Filipino office holders of the Islands are in a good many instances
rascals.
x x x           x x x          x x x

The commission has exalted to the highest positions in the Islands Filipinos who are alleged to be
notoriously corrupt and rascally, and men of no personal character.

x x x           x x x          x x x

Editor Valdez, of "Miau," made serious charges against two of the native Commissioners — charges
against Trinidad H. Pardo de Tavera, which, if true, would brand the man as a coward and a rascal, and
with what result? . . . [Reference is then made to the prosecution and conviction of Valdez for libel "under a
law which specifies that the greater the truth the greater the libel."] Is it the desire of the people of the
United States that the natives against whom these charges have been made (which, if true, absolutely vilify
their personal characters) be permitted to retain their seats on the Civil Commission, the executive body of
the Philippine Government, without an investigation?

x x x           x x x          x x x

It is a notorious fact that many branches of the Government organized by the Civil Commission are
rotten and corrupt. The fiscal system, upon which life, liberty, and justice depends, is admitted by
the Attorney-General himself to be most unsatisfactory. It is a fact that the Philippine judiciary is far
from being what it should. Neither fiscals nor judges can be persuaded to convict insurgents when
they wish to protect them.

x x x           x x x          x x x

Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and
especially the northern end of it; it is said that it is impossible to secure the conviction of
lawbreakers and outlaws by the native justices, or a prosecution by the native fiscals.

x x x           x x x          x x x

The long and short of it is that Americans will not stand for an arbitrary government, especially
when evidences of carpetbagging and rumors of graft are too thick to be pleasant.

We do not understand that it is claimed that the defendants succeeded in establishing at the trial the truth
of any of the foregoing statements. The only question which we have considered is whether their
publication constitutes an offense under section 8 of Act No. 292, above cited.

Several allied offenses or modes of committing the same offense are defined in that section, viz: (1) The
uttering of seditious words or speeches; (2) the writing, publishing, or circulating of scurrilous libels against
the Government of the United States or the Insular Government of the Philippine Islands; (3) the writing,
publishing, or circulating of libels which tend to disturb or obstruct any lawful officer in executing his office;
(4) or which tend to instigate others to cabal or meet together for unlawful purposes; (5) or which suggest or
incite rebellious conspiracies or riots; (6) or which tend to stir up the people against the lawful authorities or
to disturb the peace of the community, the safety and order of the Government; (7) knowingly concealing
such evil practices.
The complaint appears to be framed upon the theory that a writing, in order to be punishable as a libel
under this section, must be of a scurrilous nature and directed against the Government of the United States
or the Insular Government of the Philippine Islands, and must, in addition, tend to some one of the results
enumerated in the section. The article in question is described in the complaint as "a scurrilous libel against
the Government of the United States and the Insular Government of the Philippine Islands, which tends to
obstruct the lawful officers of the United States and the Insular Government of the Philippine Islands in the
execution of their offices, and which tends to instigate others to cabal and meet together for unlawful
purposes, and which suggests and incites rebellious conspiracies, and which tends to stir up the people
against the lawful authorities, and which disturbs the safety and order of the Government of the United
States and the Insular Government of the Philippine Islands." But it is "a well-settled rule in considering
indictments that where an offense may be committed in any of several different modes, and the offense, in
any particular instance, is alleged to have been committed in two or more modes specified, it is sufficient to
prove the offense committed in any one of them, provided that it be such as to constitute the substantive
offense" (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants may, therefore, be convicted
if any one of the substantive charges into which the complaint may be separated has been made out.

We are all, however, agreed upon the proposition that the article in question has no appreciable tendency
to "disturb or obstruct any lawful officer in executing his office," or to "instigate" any person or class of
persons "to cabal or meet together for unlawful purposes," or to "suggest or incite rebellious conspiracies or
riots," or to "stir up the people against the lawful authorities or to disturb the peace of the community, the
safety and order of the Government." All these various tendencies, which are described in section 8 of Act
No. 292, each one of which is made an element of a certain form of libel, may be characterized in general
terms as seditious tendencies. This is recognized in the description of the offenses punished by this
section, which is found in the title of the act, where they are defined as the crimes of the "seditious
utterances, whether written or spoken."

Excluding from consideration the offense of publishing "scurrilous libels against the Government of the
United States or the Insular Government of the Philippine Islands," which may conceivably stand on a
somewhat different footing, the offenses punished by this section all consist in inciting, orally or in writing, to
acts of disloyalty or disobedience to the lawfully constituted authorities in these Islands. And while the
article in question, which is, in the main, a virulent attack against the policy of the Civil Commission in
appointing natives to office, may have had the effect of exciting among certain classes dissatisfaction with
the Commission and its measures, we are unable to discover anything in it which can be regarded as
having a tendency to produce anything like what may be called disaffection, or, in other words, a state of
feeling incompatible with a disposition to remain loyal to the Government and obedient to the laws. There
can be no conviction, therefore, for any of the offenses described in the section on which the complaint is
based, unless it is for the offense of publishing a scurrilous libel against the Government of the of the
United States or the Insular Government of the Philippine Islands.

Can the article be regarded as embraced within the description of "scurrilous libels against the Government
of the United States or the Insular Government of the Philippine Islands?" In the determination of this
question we have encountered great difficulty, by reason of the almost entire lack of American precedents
which might serve as a guide in the construction of the law. There are, indeed, numerous English
decisions, most of them of the eighteenth century, on the subject of libelous attacks upon the "Government,
the constitution, or the law generally," attacks upon the Houses of Parliament, the Cabinet, the Established
Church, and other governmental organisms, but these decisions are not now accessible to us, and, if they
were, they were made under such different conditions from those which prevail at the present day, and are
founded upon theories of government so foreign to those which have inspired the legislation of which the
enactment in question forms a part, that they would probably afford but little light in the present inquiry. In
England, in the latter part of the eighteenth century, any "written censure upon public men for their conduct
as such," as well as any written censure "upon the laws or upon the institutions of the country," would
probably have been regarded as a libel upon the Government. (2 Stephen, History of the Criminal Law of
England, 348.) This has ceased to be the law in England, and it is doubtful whether it was ever the common
law of any American State. "It is true that there are ancient dicta to the effect that any publication tending to
"possess the people with an ill opinion of the Government" is a seditious libel ( per Holt, C. J., in
R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in R. vs. Cobbett, 1804, 29 How. St. Tr., 49),
but no one would accept that doctrine now. Unless the words used directly tend to foment riot or rebellion
or otherwise to disturb the peace and tranquility of the Kingdom, the utmost latitude is allowed in the
discussion of all public affairs." (11 Enc. of the Laws of England, 450.) Judge Cooley says (Const. Lim.,
528): "The English common law rule which made libels on the constitution or the government indictable, as
it was administered by the courts, seems to us unsuited to the condition and circumstances of the people of
America, and therefore never to have been adopted in the several States."

We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the only
existing American statute of a similar character to that in question, and from which much of the phraseology
of then latter appears to have been taken, though with some essential modifications.

The important question is to determine what is meant in section 8 of Act No. 292 by the expression "the
Insular Government of the Philippine Islands." Does it mean in a general and abstract sense the existing
laws and institutions of the Islands, or does it mean the aggregate of the individuals by whom the
government of the Islands is, for the time being, administered? Either sense would doubtless be
admissible.

We understand, in modern political science, . . . by the term government, that institution or aggregate of

institutions by which an independent society makes and carries out those rules of action which are
unnecessary to enable men to live in a social state, or which are imposed upon the people forming that
society by those who possess the power or authority of prescribing them. Government is the aggregate of
authorities which rule a society. By "dministration, again, we understand in modern times, and especially in
more or less free countries, the aggregate of those persons in whose hands the reins of government are for
the time being (the chief ministers or heads of departments)." (Bouvier, Law Dictionary, 891.) But the writer
adds that the terms "government" and "administration" are not always used in their strictness, and that
"government" is often used for "administration."

In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense to
"write, print, utter, or published," or to "knowingly and willingly assist or aid in writing, printing, uttering, or
publishing any false, scandalous, and malicious writing or writings against the Government of the United
States, or either House of the Congress of the United States, or the President of the United States, with
intent to defame the said Government, or either House of the said Congress, or the said President, or to
bring them, or either of them, into contempt or disrepute, or to excite against them or either or any of them
the hatred of the good people of the United States," etc. The term "government" would appear to be used
here in the abstract sense of the existing political system, as distinguished from the concrete organisms of
the Government — the Houses of Congress and the Executive — which are also specially mentioned.
Upon the whole, we are of the opinion that this is the sense in which the term is used in the enactment
under consideration.

It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an
abstraction like the Government in the sense of the laws and institutions of a country, but we think an
answer to this suggestion is that the expression "scurrilous libel" is not used in section 8 of Act No. 292 in
the sense in which it is used in the general libel law (Act No. 277) — that is, in the sense of written
defamation of individuals — but in the wider sense, in which it is applied in the common law to
blasphemous, obscene, or seditious publications in which there may be no element of defamation
whatever. "The word 'libel' as popularly used, seems to mean only defamatory words; but words written, if
obscene, blasphemous, or seditious, are technically called libels, and the publication of them is, by the law
of England, an indictable offense." (Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627, per Bramwell L. J. See
Com. vs. Kneeland, 20 Pick., 206, 211.)

While libels upon forms of government, unconnected with defamation of individuals, must in the nature of
things be of uncommon occurrence, the offense is by no means an imaginary one. An instance of a
prosecution for an offense essentially of this nature is Republica vs. Dennie, 4 Yeates (Pa.), 267, where the
defendant was indicted "as a factious and seditious person of a wicked mind and unquiet and turbulent
disposition and conversation, seditiously, maliciously, and willfully intending, as much as in him lay, to bring
into contempt and hatred the independence of the United States, the constitution of this Commonwealth
and of the United States, to excite popular discontent and dissatisfaction against the scheme of polity
instituted, and upon trial in the said United States and in the said Commonwealth, to molest, disturb, and
destroy the peace and tranquility of the said United States and of the said Commonwealth, to condemn the
principles of the Revolution, and revile, depreciate, and scandalize the characters of the Revolutionary
patriots and statesmen, to endanger, subvert, and totally destroy the republican constitutions and free
governments of the said United States and this Commonwealth, to involve the said United States and this
Commonwealth in civil war, desolation, and anarchy, and to procure by art and force a radical change and
alteration in the principles and forms of the said constitutions and governments, without the free will, wish,
and concurrence of the people of the said United States and this Commonwealth, respectively," the charge
being that "to fulfill, perfect, and bring to effect his wicked, seditious, and detestable intentions aforesaid
he . . . falsely, maliciously, factiously, and seditiously did make, compose, write, and publish the following
libel, to wit; 'A democracy is scarcely tolerable at any period of national history. Its omens are always
sinister and its powers are unpropitious. With all the lights or experience blazing before our eyes, it is
impossible not to discover the futility of this form of government. It was weak and wicked at Athens, it was
bad in Sparta, and worse in Rome. It has been tried in France and terminated in despotism. it was tried in
England and rejected with the utmost loathing and abhorrence. It is on its trial here and its issue will be civil
war, desolation, and anarchy. No wise man but discerns its imperfections; no good man but shudders at its
miseries; no honest man but proclaims its fraud, and no brave man but draws his sword against its force.
The institution of a scheme of polity so radically contemptible and vicious is a memorable example of what
the villainy of some men can devise, the folly of others receive, and both establish, in despite of reason,
reflection, and sensation.'"

An attack upon the lawfully established system of civil government in the Philippine Islands, like that which
Dennie was accused of making upon the republican form of government lawfully established in the United
States and in the State of Pennsylvania would, we think, if couched in scandalous language, constitute the
precise offense described in section 8 of Act No. 292 as a scurrilous libel against the Insular Government of
the Philippine Islands.
Defamation of individuals, whether holding official positions or not, and whether directed to their public
conduct or to their private life, may always be adequately punished under the general libel law. Defamation
of the Civil Commission as an aggregation, it being "a body of persons definite and small enough for its
individual members to be recognized as such" (Stephen, Digest of the Criminal Law, art. 277), as well as
defamation of any of the individual members of the Commission or of the Civil Governor, either in his public
capacity or as a private individual, may be so punished. The general libel law enacted by the Commission
was in force when Act No. 292, was passed. There was no occasion for any further legislation on the
subject of libels against the individuals by whom the Insular Government is administered — against the
Insular Government in the sense of the aggregate of such individuals. There was occasion for stringent
legislation against seditious words or libels, and that is the main if not the sole purpose of the section under
consideration. It is not unreasonable to suppose that the Commission, in enacting this section, may have
conceived of attacks of a malignant or scurrilous nature upon the existing political system of the United
States, or the political system established in these Islands by the authority of the United States, as
necessarily of a seditious tendency, but it is not so reasonable to suppose that they conceived of attacks
upon the personnel of the government as necessarily tending to sedition. Had this been their view it seems
probable that they would, like the framers of the Sedition Act of 1798, have expressly and specifically
mentioned the various public officials and collegiate governmental bodies defamation of which they meant
to punish as sedition.

The article in question contains no attack upon the governmental system of the United States, and it is
quite apparent that, though grossly abusive as respects both the Commission as a body and some of its
individual members, it contains no attack upon the governmental system by which the authority of the
United States is enforced in these Islands. The form of government by a Civil Commission and a Civil
Governor is not assailed. It is the character of the men who are intrusted with the administration of the
government that the writer is seeking to bring into disrepute by impugning the purity of their motives, their
public integrity, and their private morals, and the wisdom of their policy. The publication of the article,
therefore, no seditious tendency being apparent, constitutes no offense under Act No. 292, section 8.

The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.

Arellano, C.J. Torres, Willard and Mapa, JJ., concur.

[G.R. No. 86695. September 3, 1992.]

MARIA ELENA MALAGA, doing business under the name B.E. CONSTRUCTION; JOSIELEEN
NAJARRO, doing business under the name BEST BUILT CONSTRUCTION; JOSE N. OCCEÑA, doing
business under the name THE FIRM OF JOSE N. OCCEÑA; and the ILOILO BUILDERS
CORPORATION, Petitioners, v. MANUEL R. PENACHOS, JR., ALFREDO MATANGGA, ENRICO TICAR
AND TERESITA VILLANUEVA, in their respective capacities as Chairman and Members of the Pre-
qualification Bids and Awards Committee (PBAC)-BENIGNO PANISTANTE, in his capacity as President of
Iloilo State College of Fisheries, as well as in their respective personal capacities; and HON. LODRIGIO L.
LEBAQUIN, Respondents.

Salas, Villareal & Velasco, for Petitioners.

Virgilio A. Sindico for Respondents.

SYLLABUS

1. ADMINISTRATIVE LAW; GOVERNMENT INSTRUMENTALITY, DEFINED. — The 1987 Administrative

Code defines a government instrumentality as follows: Instrumentality refers to any agency of the National
Government, not integrated within the department framework, vested with special functions or jurisdiction
by law, endowed with some if not all corporate powers, administering special funds, and enjoying
operational autonomy, usually through a charter. This term includes regulatory agencies, chartered
institutions, and government-owned or controlled corporations. (Sec. 2 (5) Introductory Provisions).

2. ID.; CHARTERED INSTITUTION; DEFINED; APPLICATION IN CASE AT BAR. — The 1987

Administrative Code describes a chartered institution thus: Chartered institution — refers to any agency
organized or operating under a special charter, and vested by law with functions relating to specific
constitutional policies or objectives. This term includes the state universities and colleges, and the
monetary authority of the state. (Sec. 2 (12) Introductory Provisions). It is clear from the above definitions
that ISCOF is a chartered institution and is therefore covered by P.D. 1818. There are also indications in its
charter that ISCOF is a government instrumentality. First, it was created in pursuance of the integrated
fisheries development policy of the State, a priority program of the government to effect the socio-economic
life of the nation. Second, the Treasurer of the Republic of the Philippines shall also be the ex-officio
Treasurer of the state college with its accounts and expenses to be audited by the Commission on Audit or
its duly authorized representative. Third, heads of bureaus and offices of the National Government are
authorized to loan or transfer to it, upon request of the president of the state college, such apparatus,
equipment, or supplies and even the services of such employees as can be spared without serious
detriment to public service. Lastly, an additional amount of P1.5M had been appropriated out of the funds of
the National Treasury and it was also decreed in its charter that the funds and maintenance of the state
college would henceforth be included in the General Appropriations Law. (Presidential Decree No. 1523)

3. ID.; PROHIBITION OF ANY COURT FROM ISSUING INJUNCTION IN CASES INVOLVING

INFRASTRUCTURE PROJECTS OF GOVERNMENT (P.D. 1818); POWER OF THE COURTS TO
RESTRAIN APPLICATION. — In the case of Datiles and Co. v. Sucaldito, (186 SCRA 704) this Court
interpreted a similar prohibition contained in P.D. 605, the law after which P.D. 1818 was patterned. It was
there declared that the prohibition pertained to the issuance of injunctions or restraining orders by courts
against administrative acts in controversies involving facts or the exercise of discretion in technical cases.
The Court observed that to allow the courts to judge these matters would disturb the smooth functioning of
the administrative machinery. Justice Teodoro Padilla made it clear, however, that on issues definitely
outside of this dimension and involving questions of law, courts could not be prevented by P.D. No. 605
from exercising their power to restrain or prohibit administrative acts. We see no reason why the above
ruling should not apply to P.D. 1818. There are at least two irregularities committed by PBAC that justified
injunction of the bidding and the award of the project.

4. ID.; POLICIES AND GUIDELINES PRESCRIBED FOR GOVERNMENT INFRASTRUCTURE (PD 1594);
RULES IMPLEMENTING THEREOF, NOT SUFFICIENTLY COMPLIED WITH IN CASE AT BAR. — Under
the Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure
contracts, PBAC shall provide prospective bidders with the Notice to Pre-qualification and other relevant
information regarding the proposed work. Prospective contractors shall be required to file their ARC-
Contractors Confidential Application for Registration & Classifications & the PRE-C2 Confidential Pre-
qualification Statement for the Project (prior to the amendment of the rules, this was referred to as Pre-C1)
not later than the deadline set in the published Invitation to Bid, after which date no PRE-C2 shall be
submitted and received. Invitations to Bid shall be advertised for at least three times within a reasonable
period but in no case less than two weeks in at least two newspapers of general circulations. (IB 13 1.2-19,
Implementing Rules and Regulations of P.D. 1594 as amended) PBAC advertised the pre-qualification
deadline as December 2, 1988, without stating the hour thereof, and announced that the opening of bids
would be at 3 o’clock in the afternoon of December 12, 1988. This scheduled was changed and a notice of
such change was merely posted at the ISCOF bulletin board. The notice advanced the cut-off time for the
submission of pre-qualification documents to 10 o’clock in the morning of December 2, 1988, and the
opening of bids to 1 o’clock in the afternoon of December 12, 1988. The new schedule caused the pre-
disqualification of the petitioners as recorded in the minutes of the PBAC meeting held on December 6,
1988. While it may be true that there were fourteen contractors who were pre-qualified despite the change
in schedule, this fact did not cure the defect of the irregular notice. Notably, the petitioners were disqualified
because they failed to meet the new deadline and not because of their expired licenses. (B.E. & Best Built’s
licenses were valid until June 30, 1989. [Ex. P & O respectively: both were marked on December 28, 1988])
We have held that where the law requires a previous advertisement before government contracts can be
awarded, non-compliance with the requirement will, as a general rule, render the same void and of no
effect. (Caltex Phil. v. Delgado Bros., 96 Phil. 368) The fact that an invitation for bids has been
communicated to a number of possible bidders is not necessarily sufficient to establish compliance with the
requirements of the law if it is shown that other possible bidders have not been similarly notified.

5. ID.; ID.; ID.; PURPOSE THEREOF; CASE AT BAR. — The purpose of the rules implementing P.D. 1594
is to secure competitive bidding and to prevent favoritism, collusion and fraud in the award of these
contracts to the detriment of the public. This purpose was defeated by the irregularities committed by
PBAC. It has been held that the three principles in public bidding are the offer to the public, an opportunity
for competition and a basis for exact comparison of bids. A regulation of the matter which excludes any of
these factors destroys the distinctive character of the system and thwarts the purpose of its adoption.
(Hannan v. Board of Education, 25 Okla. 372) In the case at bar, it was the lack of proper notice regarding
the pre-qualification requirement and the bidding that caused the elimination of petitioners B.E. and Best
Built. It was not because of their expired licenses, as private respondents now claim. Moreover, the plans
and specifications which are the contractors’ guide to an intelligent bid, were not issued on time, thus
defeating the guaranty that contractors be placed on equal footing when they submit their bids. The
purpose of competitive bidding is negated if some contractors are informed ahead of their rivals of the plans
and specifications that are to be the subject of their bids.

6. ID.; ID.; ID.; EFFECT OF NON-COMPLIANCE THEREOF. — It has been held in a long line of cases that
a contract granted without the competitive bidding required by law is void, and the party to whom it is
awarded cannot benefit from it. It has not been shown that the irregularities committed by PBAC were
induced by or participated in by any of the contractors. Hence, liability shall attach only to the private
respondents for the prejudice sustained by the petitioners as a result of the anomalies described above.

7. CIVIL LAW; NOMINAL DAMAGES; AWARD THEREOF, WHEN AVAILABLE. — As there is no evidence
of the actual loss suffered by the petitioners, compensatory damage may not be awarded to them. Moral
damages do not appear to be due either. Even so, the Court cannot close its eyes to the evident bad faith
that characterized the conduct of the private respondents, including the irregularities in the announcement
of the bidding and their efforts to persuade the ISCOF president to award the project after two days from
receipt of the restraining order and before they moved to lift such order. For such questionable acts, they
are liable in nominal damages at least in accordance with Article 2221 of the Civil Code, which states: Art.
2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant may be vindicated or, recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him. These damages are to be assessed against the private respondents in
the amount of P10,000.00 each, to be paid separately for each of petitioners B.E. Construction and Best
Built Construction.

DECISION

CRUZ, J.:

This controversy involves the extent and applicability of P.D. 1818, which prohibits any court from issuing
injunctions in cases involving infrastructure projects of the government.chanrobles.com.ph : virtual law
library

The facts are not disputed.

The Iloilo State College of Fisheries (henceforth ISCOF) through its Pre-qualification, Bids and Awards
Committee (henceforth PBAC) caused the publication in the November 25, 26, 28, 1988 issues of the
Western Visayas Daily an Invitation to Bid for the construction of the Micro Laboratory Building at ISCOF.
The notice announced that the last day for the submission of pre-qualification requirements (PRE C-1) **
was December 2, 1988, and that the bids would be received and opened on December 12, 1988, 3 o’clock
in the afternoon. 1 

Petitioners Maria Elena Malaga and Josieleen Najarro, respectively doing business under the name of the
B.E. Construction and Best Built Construction, submitted their pre-qualification documents at two o’clock in
the afternoon of December 2, 1988. Petitioner Jose Occeña submitted his own PRE-C1 on December 5,
1988. All three of them were not allowed to participate in the bidding because their documents were
considered late, having been submitted after the cut-off time of ten o’clock in the morning of December 2,
1988.

On December 12, 1988, the petitioners filed a complaint with the Regional Trial Court of Iloilo against the
chairman and members of PBAC in their official and personal capacities. The plaintiffs claimed that
although they had submitted their PRE-C1 on time, the PBAC refused without just cause to accept them.
As a result, they were not included in the list of pre-qualified bidders, could not secure the needed plans
and other documents, and were unable to participate in the scheduled bidding.

In their prayer, they sought the resetting of the December 12, 1988 bidding and the acceptance of their
PRE-C1 documents. They also asked that if the bidding had already been conducted, the defendants be
directed not to award the project pending resolution of their complaint.

On the same date, Judge Lodrigio L. Lebaquin issued a restraining order prohibiting PBAC from conducting
the bidding and awarding the project. 2 

On December 16, 1988, the defendants filed a motion to lift the restraining order on the ground that the
Court was prohibited from issued restraining orders, preliminary injunctions and preliminary mandatory
injunctions by P.D. 1818.chanroblesvirtualawlibrary

The decree reads pertinently as follows:chanrob1es virtual 1aw library

Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order, preliminary
injunction, or preliminary infrastructure project, or a mining, fishery, forest or other natural resource
development project of the government, or any public utility operated by the government, including among
others public utilities for the transport of the goods and commodities, stevedoring and arrastre contracts, to
prohibit any person or persons, entity or government official from proceeding with, or continuing the
execution or implementation of any such project, or the operation of such public utility, or pursuing any
lawful activity necessary for such execution, implementation or operation.

The movants also contended that the question of the propriety of a preliminary injunction had become moot
and academic because the restraining order was received late, at 2 o’clock in the afternoon of December
12, 1988, after the bidding had been conducted and closed at eleven thirty in the morning of that date.

In their opposition of the motion, the plaintiffs argued against the applicability of P.D. 1818, pointing out that
while ISCOF was a state college, it had its own charter and separate existence and was not part of the
national government or of any local political subdivision. Even if P.D. 1818 were applicable, the prohibition
presumed a valid and legal government project, not one tainted with anomalies like the project at bar.

They also cited Filipinas Marble Corp. v. IAC, 3 where the Court allowed the issuance of a writ of
preliminary injunction despite a similar prohibition found in P.D. 385. The Court therein stated
that:chanrob1es virtual 1aw library

The government, however, is bound by basic principles of fairness and decency under the due process
clauses of the Bill of Rights. P.D. 385 was never meant to protect officials of government-lending
institutions who take over the management of a borrower corporation, lead that corporation to bankruptcy
through mismanagement or misappropriation of its funds, and who, after ruining it, use the mandatory
provisions of the decree to avoid the consequences of their misleads (p. 188, Emphasis supplied).

On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary
injunction. It declared that the building sought to be construed at the ISCOF was an infrastructure project of
the government falling within the coverage of P.D. 1818. Even if it were not, the petition for the issuance of
a writ of preliminary injunction would still fail because the sheriff’s return showed that PBAC was served a
copy of the restraining order after the bidding sought to be restrained had already been held. Furthermore,
the members of the PBAC could not be restrained from awarding the project because the authority to do so
was lodged in the President of the ISCOF, who was not a party to the case. 4  

In the petition now before us, it is reiterated that P.D. 1818 does not cover the ISCOF because of its
separate and distinct corporate personality. It is also stressed again that the prohibition under P.D. 1818
could not apply to the present controversy because the project was vitiated with irregularities, to
wit:chanrobles.com : virtual law library

1. The invitation to bid as published fixed the deadline of submission of pre-qualification document on
December 2, 1988 without indicating any time, yet after 10:00 o’clock of the given late, the PBAC already
refused to accept petitioners’ documents.

2. The time and date of bidding was published as December 12, 1988 at 3:00 p.m. yet it was held at 10:00
o’clock in the morning.

3. Private respondents, for the purpose of inviting bidders to participate, issued a mimeographed "Invitation
to Bid" form, which by law (P.D. 1594 and Implementing Rules, Exh. B-1) is to contain the particulars of the
project subject of bidding for the purpose of.

(i) enabling bidders to make an intelligent and accurate bids;

(ii) for PBAC to have a uniform basis for evaluating the bids;

(iii) to prevent collusion between a bidder and the PBAC, by opening to all the particulars of a project.

Additionally, the Invitation to Bid prepared by the respondents and the Itemized Bill of Quantities therein
were left blank. 5 And although the project in question was a "Construction," the private respondents used
an Invitation to Bid form for "Materials." 6 

The petitioners also point out that the validity of the writ of preliminary injunction had not yet become moot
and academic because even if the bids had been opened before the restraining order was issued, the
project itself had not yet been awarded. The ISCOF president was not an indispensable party because the
signing of the award was merely a ministerial function which he could perform only upon the
recommendation of the Award Committee. At any rate, the complaint had already been duly amended to
include him as a party defendant.

In their Comment, the private respondents maintain that since the members of the board of trustees of the
ISCOF are all government officials under Section 7 of P.D. 1523 and since the operations and maintenance
of the ISCOF are provided for in the General Appropriations Law, it is should be considered a government
institution whose infrastructure project is covered by P.D. 1818.

Regarding the schedule for pre-qualification, the private respondents insist that PBAC posted on the ISCOF
bulletin board an announcement that the deadline for the submission of pre-qualifications documents was
at 10 o’clock of December 2, 1988, and the opening of bids would be held at 1 o’clock in the afternoon of
December 12, 1988. As of ten o’clock in the morning of December 2, 1988, B.E. construction and Best Built
construction had filed only their letters of intent. At two o’clock in the afternoon, B.E., and Best Built filed
through their common representative, Nenette Garuello, their pre-qualification documents which were
admitted but stamped "submitted late." The petitioners were informed of their disqualification on the same
date, and the disqualification became final on December 6, 1988. Having failed to take immediate action to
compel PBAC to pre-qualify them despite their notice of disqualification, they cannot now come to this
Court to question the binding proper in which they had not participated.

In the petitioners’ Reply, they raise as an additional irregularity the violation of the rule that where the
estimate project cost is from P1M to P5M, the issuance of plans, specifications and proposal book forms
should made thirty days before the date of bidding. 7 They point out that these forms were issued only on
December 2, 1988, and not at the latest on November 12, 1988, the beginning of the 30-day period prior to
the scheduled bidding.

In their Rejoinder, the private respondents aver that the documents of B.E. and Best Built were received
although filed late and were reviewed by the Award Committee, which discovered that the contractors had
expired licenses. B.E.’s temporary certificate of Renewal of Contractor’s License was valid only until
September 30, 1988, while Best Built’s license was valid only up to June 30, 1988.chanrobles lawlibrary :
rednad

The Court has considered the arguments of the parties in light of their testimonial and documentary
evidence and the applicable laws and jurisprudence. It finds for the petitioners.

The 1987 Administrative Code defines a government instrumentality as follows:chanrob1es virtual 1aw
library

Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate
powers, administering special funds, and enjoying operational autonomy, usually through a charter. This
term includes regulatory agencies, chartered institutions, and government-owned or controlled
corporations. (Sec. 2 (5) Introductory Provisions).

The same Code describes a chartered institution thus:chanrob1es virtual 1aw library

Chartered institution — refers to any agency organized or operating under a special charter, and vested by
law with functions relating to specific constitutional policies or objectives. This term includes the state
universities and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D.
1818.

There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in
pursuance of the integrated fisheries development policy of the State, a priority program of the government
of effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the Philippines also
be the ex-officio Treasurer of the state college with its accounts and expenses to be audited by the
Commission on Audit or its duly authorized representative. Third, heads of bureaus and offices of the
National Government are authorized to loan or transfer to it, upon request of the president of the state
college, such apparatus, equipment, or supplies and even the services of such employees as can be
spared without serious detriment to public service. Lastly, an additional amount of P1.5M had been
appropriated out of the funds of the National Treasury and it was also decreed in its charter that the funds
and maintenance of the state college would henceforth be included in the General Appropriations Law. 8  

Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree.

In the case of Datiles and Co. v. Sucaldito, 9 this Court interpreted a similar prohibition contained in P.D.
605, the law after which P.D. 1818 was patterned. It was there declared that the prohibition pertained to the
issuance of injunctions or restraining orders by courts against administrative acts in controversies involving
facts or the exercise of discretion in technical cases. The Court observed that to allow the courts to judge
these matters would disturb the smooth functioning of the administrative machinery. Justice Teodoro
Padilla made it clear, however, that on issues definitely outside of this dimension and involving questions of
law, courts could not be prevented by P.D. No. 605 from exercising their power to restrain or prohibit
administrative acts.

We see no reason why the above ruling should not apply to P.D. 1818.

There are at least two irregularities committed by PBAC that justified injunction of the bidding and the
award of the project.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

First, PBAC set deadlines for the filing of the PRE-C1 and the opening of bids and then changed these
deadlines without prior notice to prospective participants.

Under the Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure
contracts, PBAC shall provide prospective bidders with the Notice of Pre-qualification and other relevant
information regarding the proposed work. Prospective contractors shall be required to file their ARC-
Contractors Confidential Application for Registration & Classifications & the PRE-C2 Confidential Pre-
qualification Statement for the Project (prior to the amendment of the rules, this was referred to as PRE-C1)
not later than the deadline set in the published Invitation to Bid, after which date no PRE-C2 shall be
submitted and received. Invitations to Bid shall be advertised for at least three times within a reasonable
period but in no case less than two weeks in at least two newspapers of general circulations. 10  

PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour thereof, and
announced that the opening of bids would be at 3 o’clock in the afternoon of December 12, 1988. This
schedule was changed and a notice of such change was merely posted at the ISCOF bulletin board. The
notice advanced the cut-off time for the submission of pre-qualification documents to 10 o’clock in the
morning of December 2, 1988, and the opening of bids to 1 o’clock in the afternoon of December 12, 1988.

The new schedule caused the pre-disqualification of the petitioners as recorded in the minutes of the PBAC
meeting held on December 6, 1988. While it may be true that there were fourteen contractors who were
pre-qualified despite the change in schedule, this fact did not cure the defect of the irregular notice.
Notably, the petitioners were disqualified because they failed to meet the new deadline and not because of
their expired licenses. *** 

We have held that where the law requires a previous advertisement before government contracts can be
awarded, non-compliance with the requirement will, as a general rule, render the same void and of no
effect 11 The facts that an invitation for bids has been communicated to a number of possible bidders is not
necessarily sufficient to establish compliance with the requirements of the law if it is shown that other public
bidders have not been similarly notified. 12 

Second, PBAC was required to issue to pre-qualified applicants the plans, specifications and proposal book
forms for the project to be bid thirty days before the date of bidding if the estimate project cost was between
P1M and P5M. PBAC has not denied that these forms were issued only on December 2, 1988, or only ten
days before the bidding scheduled for December 12, 1988. At the very latest, PBAC should have issued
them on November 12, 1988, or 30 days before the scheduled bidding.

It is apparent that the present controversy did not arise from the discretionary acts of the administrative
body nor does it involve merely technical matters. What is involved here is non-compliance with the
procedural rules on bidding which required strict observance. The purpose of the rules implementing P.D.
1594 is to secure competitive bidding and to prevent favoritism, collusion and fraud in the award of these
contracts to the detriment of the public. This purpose was defeated by the irregularities committed by
PBAC.chanrobles law library : red

It has been held that the three principles in public bidding are the offer to the public, an opportunity for
competition and a basis for exact comparison of bids. A regulation of the matter which excludes any of
these factors destroys the distinctive character of the system and thwarts and purpose of its adoption. 13  

In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and the
bidding that caused the elimination of petitioners B.E. and Best Built. It was not because of their expired
licenses, as private respondents now claim. Moreover, the plans and specifications which are the
contractors’ guide to an intelligent bid, were not issued on time, thus defeating the guaranty that contractors
be placed on equal footing when they submit their bids. The purpose of competitive bidding is negated if
some contractors are informed ahead of their rivals of the plans and specifications that are to be the subject
of their bids.

P.D. 1818 was not intended to shield from judicial scrutiny irregularities committed by administrative
agencies such as the anomalies above described. Hence, the challenged restraining order was not
improperly issued by the respondent judge and the writ of preliminary injunction should not have been
denied. We note from Annex Q of the private respondent’s memorandum, however, that the subject project
has already been "100% completed as to the Engineering Standard." This fait accompli has made the
petition for a writ of preliminary injunction moot and academic.

We come now to the liabilities of the private respondents.

It has been held in a long line of cases that a contract granted without the competitive bidding required by
law is void, and the party to whom it is awarded cannot benefit from it. 14 It has not been shown that the
irregularities committed by PBAC were induced by or participated in by any of the contractors. Hence,
liability shall attach only to the private respondents for the prejudice sustained by the petitioners as a result
of the anomalies described above.

As there is no evidence of the actual loss suffered by the petitioners, compensatory damage may not be
awarded to them. Moral damages do not appear to be due either. Even so, the Court cannot close its eyes
to the evident bad faith that characterized the conduct of the private respondents, including the irregularities
in the announcement of the bidding and their efforts to persuade the ISCOF president to award the project
after two days from receipt of the restraining order and before they moved to lift such order. For such
questionable acts, they are liable in nominal damages at least in accordance with Article 2221 of the Civil
Code, which states:jgc:chanrobles.com.ph

"Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant may be vindicated or, recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.

These damages are to assessed against the private respondents in the amount of P10,000.00 each, to be
paid separately for each of petitioners B.E. Construction and Best Built Construction. The other petitioner,
Occeña Builders, is not entitled to relief because it admittedly submitted its pre-qualification documents on
December 5, 1988, or three days after the deadline.chanrobles virtual lawlibrary

WHEREFORE, judgment is hereby rendered: a) upholding the restraining order dated December 12, 1988,
as not covered by the prohibition in P.D. 1818; b) ordering the chairman and the members of the PBAC
board of trustees, namely Manuel R. Penachos, Jr., Alfredo Matangga, Enrico Ticar, and Teresita
Villanueva, to each pay separately to petitioners Maria Elena Malaga and Josieleen Najarro nominal
damages P10,000.00 each; and c) removing the said chairman and members from the PBAC board of
trustees, or whoever among them is still incumbent therein, for their malfeasance in office. Costs against
PBAC.

Let a copy of this decision be sent to the Office of the Ombudsman.

SO ORDERED.
G.R. No. 135945            March 7, 2001

THE UNITED RESIDENTS OF DOMINICAN HILL, INC., represented by its President RODRIGO S.
MACARIO, SR., petitioner, 
vs.
COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS, represented by its Commissioner, RUFINO
V. MIJARES; MARIO PADILAN, PONCIANO BASILAN, HIPOLITO ESLAVA, WILLIAM LUMPISA, PACITO
MOISES, DIONISIO ANAS, NOLI DANGLA, NAPOLEON BALESTEROS, ELSIE MOISES, SEBIO
LACWASAN, BEN FLORES, DOMINGO CANUTAB, MARCELINO GABRIANO, TINA TARNATE,
ANDREW ABRAZADO, DANNY LEDDA, FERNANDO DAYAO, JONATHAN DE LA PENA, JERRY
PASSION, PETER AGUINSOD, and LOLITA DURAN, respondents.

DE LEON, JR., J.:

Before us is a petition for prohibition and declaratory relief seeking the annulment of a status quo
order1 dated September 29, 1998 issued by the public respondent Commission on the Settlement of Land
Problems (COSLAP, for brevity) in COSLAP Case No. 98-253.

The facts are:

The property being fought over by the parties is a 10.36-hectare property in Baguio City called Dominican
Hills, formerly registered in the name of Diplomat Hills, Inc. It appeared that the property was mortgaged to
the United Coconut Planters Bank (UCPB) which eventually foreclosed the mortgage thereon and acquired
the same as highest bidder. On April 11, 1983, it was donated to the Republic of the Philippines by UCPB
through its President, Eduardo Cojuangco. The deed of donation stipulated that Dominican Hills would be
utilized for the "priority programs, projects, activities in human settlements and economic development and
governmental purposes" of the Ministry of Human Settlements.

On December 12, 1986, the then President Corazon C. Aquino issued Executive Order No. 85 abolishing
the Office of Media Affairs and the Ministry of Human Settlements. All agencies under the latter's
supervision as well as all its assets, programs and projects, were transferred to the Presidential
Management Staff (PMS).2

On October 18, 1988, the PMS received an application from petitioner UNITED RESIDENTS OF
DOMINICAN HILL, INC. (UNITED, for brevity), a community housing association composed of non-real
property owning residents of Baguio City, to acquire a portion of the Dominican Hills property. On February
2, 1990, PMS Secretary Elfren Cruz referred the application to the HOME INSURANCE GUARANTY
CORPORATION (HIGC). HIGC consented to act as originator for UNITED. 3 Accordingly, on May 9, 1990, a
Memorandum of Agreement was signed by and among the PMS, the HIGC, and UNITED. The
Memorandum of Agreement called for the PMS to sell the Dominican Hills property to HIGC which would, in
turn, sell the same to UNITED. The parties agreed on a selling price of P75.00 per square meter.

Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to UNITED. The deed of conditional sale
provided that ten (10) per cent of the purchase price would be paid upon signing, with the balance to be
amortized within one year from its date of execution. After UNITED made its final payment on January 31,
1992, HIGC executed a Deed of Absolute Sale dated July 1, 1992.

Petitioner alleges that sometime in 1993, private respondents entered the Dominican Hills property
allocated to UNITED and constructed houses thereon. Petitioner was able to secure a demolition order
from the city mayor.4

Unable to stop the razing of their houses, private respondents, under the name DOMINICAN HILL BAGUIO
RESIDENTS HOMELESS ASSOCIATION (ASSOCIATION, for brevity) filed an action 5 for injunction
docketed as Civil Case No. 3316-R, in the Regional Trial Court of Baguio City, Branch 4. Private
respondents were able to obtain a temporary restraining order but their prayer for a writ of preliminary
injunction was later denied in an Order dated March 18, 1996. 6

While Civil Case No. 3316-R was pending, the ASSOCIATION, this time represented by the Land Reform
Beneficiaries Association, Inc. (BENEFICIARIES, for brevity), filed Civil Case No. 3382-R before Branch 61
of the same court. The complaint 7 prayed for damages, injunction and annulment of the said Memorandum
of Agreement between UNITED and HIGC. Upon motion of UNITED, the trial court in an Order dated May
27, 1996 dismissed Civil Case No. 3382-R. 8 The said Order of dismissal is currently on appeal with the
Court of Appeals.9

Demolition Order No. 1-96 was subsequently implemented by the Office of the City Mayor and the City
Engineer's Office of Baguio City. However, petitioner avers that private respondents returned and
reconstructed the demolished structures.

To forestall the re-implementation of the demolition order, private respondents filed on September 29, 1998
a petition10 for annulment of contracts with prayer for a temporary restraining order, docketed as COSLAP
Case No. 98-253, in the Commission on the Settlement of Land Problems (COSLAP) against petitioner,
HIGC, PMS, the City Engineer's Office, the City Mayor, as well as the Register of Deeds of Baguio City. On
the very same day, public respondent COSLAP issued the contested order requiring the parties to maintain
the status quo.

Without filing a motion for reconsideration from the aforesaid status quo order, petitioner filed the instant
petition questioning the jurisdiction of the COSLAP.

The issues we are called upon to resolve are:

IS THE COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS [COSLAP] CREATED

UNDER EXECUTIVE ORDER NO. 561 BY THE OFFICE OF THE PHILIPPINES [sic]
EMPOWERED TO HEAR AND TRY A PETITION FOR ANNULMENT OF CONTRACTS WITH
PRAYER FOR A TEMPORARY RESTRAINING ORDER AND THUS, ARROGATE UNTO ITSELF
THE POWER TO ISSUE STATUS QUO ORDER AND CONDUCT A HEARING THEREOF [sic]?

2
 ASSUMING THAT THE COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS [COSLAP]
HAS JURISDICTION ON THE MATTER, IS IT EXEMPTED FROM OBSERVING A CLEAR CASE
OF FORUM SHOPPING ON THE PART OF THE PRIVATE RESPONDENTS?

To the extent that the instant case is denominated as one for declaratory relief, we initially clarify that we do
not possess original jurisdiction to entertain such petitions. 11 Such is vested in the Regional Trial
Courts.12 Accordingly, we shall limit our review to ascertaining if the proceedings before public respondent
COSLAP are without or in excess, of its jurisdiction. In this wise, a recounting of the history of the COSLAP
may provide useful insights into the extent of its powers and functions.

The COSLAP was created by virtue of Executive Order No. 561 dated September 21, 1979. Its forerunner
was the Presidential Action Committee on Land Problems (PACLAP) founded on July 31, 1970 by virtue of
Executive Order No. 251. As originally conceived, the committee was tasked "to expedite and coordinate
the investigation and resolution of land disputes, streamline and shorten administrative procedures, adopt
bold and decisive measures to solve land problems, and/or recommend other solutions." It was given the
power to issue subpoenas duces tecum and ad testificandum and to call upon any department, office,
agency or instrumentality of the government, including government owned or controlled corporations and
local government units, for assistance in the performance of its functions. At the time, the PACLAP did not
exercise quasi-judicial functions.

On March 19, 1971, Executive Order No. 305 was issued reconstituting the PACLAP. 13 The committee was
given exclusive jurisdiction over all cases involving public lands and other lands of the public domain and
accordingly was tasked:

1. To investigate, coordinate, and resolve expeditiously land disputes, streamline administrative

procedures, and in general, to adopt bold and decisive measures to solve problems involving
public lands and lands of the public domain;

2. To coordinate and integrate the activities of all government agencies having to do with public
lands or lands of the public domain;

3. To study and review present policies as embodied in land laws and administrative rules and
regulations, in relation to the needs for land of the agro-industrial sector and small farmers, with the
end in view to evolving and recommending new laws and policies and establishing priorities in the
grant of public land, and the simplification of processing of land applications in order to relieve the
small man from the complexities of existing laws, rules and regulations;

4. To evolve and implement a system for the speedy investigation and resolution of land disputes;

5. To receive all complaints of settlers and small farmers, involving public lands or other lands of
the public domain;

6. To look into the conflicts between Christians and non-Christians, between corporations and
small settlers and farmers; cause the speedy settlement of such conflicts in accordance with
priorities or policies established by the Committee; and
 7. To perform such other functions as may be assigned to it by the President.

Thereafter, the PACLAP was reorganized pursuant to Presidential Decree No. 832 dated November 27,
1975.14 Its jurisdiction was revised thus:

xxx           xxx           xxx

2. Refer for immediate action any land problem or dispute brought to the attention of the PACLAP,
to any member agency having jurisdiction thereof: Provided, that when the Executive Committee
decides to act on a case, its resolution, order or decision thereon, shall have the force and effect of
a regular administrative resolution, order or decision, and shall be binding upon the parties therein
involved and upon the member agency having jurisdiction thereof;

xxx           xxx           xxx

Notably, the said Presidential Decree No. 832 did not contain any provision for judicial review of the
resolutions, orders or decisions of the PACLAP.

On September 21, 1979, the PACLAP was abolished and its functions transferred to the present
Commission on the Settlement of Land Problems by virtue of Executive Order No. 561. This reorganization,
effected in line with Presidential Decree No. 1416, brought the COSLAP directly under the Office of the
President.15 It was only at this time that a provision for judicial review was made from resolutions, orders or
decisions of the said agency, as embodied in section 3(2) thereof, to wit:

Powers and functions. — The Commission shall have the following powers and functions:

1. Coordinate the activities, particularly the investigation work, of the various government
offices and agencies involved in the settlement of land problems or disputes, and
streamline administrative procedures to relieve small settlers and landholders and
members of cultural minorities of the expense and time-consuming delay attendant to the
solution of such problems or disputes;

2. Refer and follow-up for immediate action by the agency having appropriate jurisdiction
any land problem or dispute referred to the Commission: Provided, that the Commission
may, in the following cases, assume jurisdiction and resolve land problems or disputes
which are critical and explosive in nature considering, for instance, the large number of the
parties involved, the presence or emergence of social tension or unrest, or other similar
critical situations requiring immediate action:

(a) Between occupants/squatters and pasture lease agreement holders or timber

concessionaires;

(b) Between occupants/squatters and government reservation grantees;

(c) Between occupants/squatters and public land claimants or applicants;

 (d) Petitions for classification, release and/or subdivision of lands of the public
domain; and

(e) Other similar land problems of grave urgency and magnitude.

The Commission shall promulgate such rules of procedure as will insure expeditious resolution and
action on the above cases. The resolution, order or decision of the Commission on any of the
foregoing cases shall have the force and effect of a regular administrative resolution, order or
decision and shall be binding upon the parties therein and upon the agency having jurisdiction over
the same. Said resolution, order or decision shall become final and executory within thirty (30) days
from its promulgation and shall be appealable by certiorari only to the Supreme Court.

xxx           xxx           xxx

In the performance of its functions and discharge of its duties, the Commission is authorized,
through the Commission, to issue subpoena and subpoena duces tecum for the appearance of
witnesses and the production of records, books and documents before it. It may also call upon any
ministry, office, agency or instrumentality of the National Government, including government-
owned or controlled corporations, and local governments for assistance. This authority is likewise,
conferred upon the provincial offices as may be established pursuant to Section 5 of this Executive
Order.

In Bañaga v. Commission on the Settlement of Land Problems,16 we characterized the COSLAP's

jurisdiction as being general in nature, as follows:

Petitioners also contend in their petition that the COSLAP itself has no jurisdiction to resolve the
protest and counter-protest of the parties because its power to resolve land problems is confined to
those cases "which are critical and explosive in nature."

This contention is devoid of merit. It is true that Executive Order No. 561 provides that the
COSLAP may take cognizance of cases which are "critical and explosive in nature considering, for
instance, the large number of parties involved, the presence or emergence of social tension or
unrest, or other similar critical situations requiring immediate action." However, the use of the word
"may" does not mean that the COSLAP's jurisdiction is merely confined to the above mentioned
cases. The provisions of the said Executive Order are clear that the COSLAP was created as a
means of providing a more effective mechanism for the expeditious settlement of land problems in
general, which are frequently the source of conflicts among settlers, landowners and cultural
minorities. Besides, the COSLAP merely took over from the abolished PACLAP whose functions,
including its jurisdiction, power and authority to act on, decide and resolve land disputes (Sec. 2,
P.D. No. 832) were all assumed by it. The said Executive Order No. 561 containing said provision,
being enacted only on September 21, 1979, cannot affect the exercise of jurisdiction of the
PACLAP Provincial Committee of Koronadal on September 29, 1978. Neither can it affect the
decision of the COSLAP which merely affirmed said exercise of jurisdiction.

Given the facts of the case, it is our view that the COSLAP is not justified in assuming jurisdiction over the
controversy. As matters stand, it is not the judiciary's place to question the wisdom behind a law; 17 our task
is to interpret the law. We feel compelled to observe, though, that by reason of the ambiguous terminology
employed in Executive Order No. 561, the power to assume jurisdiction granted to the COSLAP provides
an ideal breeding ground for forum shopping, as we shall explain subsequently. Suffice it to state at this
stage that the COSLAP may not assume jurisdiction over cases which are already pending in the regular
courts.

The reason is simple. Section 3(2) of Executive Order 561 speaks of any resolution, order or decision of the
COSLAP as having the "force and effect of a regular administrative resolution, order or decision." The
qualification places an unmistakable emphasis on the administrative character of the COSLAP's
determination, amplified by the statement that such resolutions, orders or decisions "shall be binding upon
the parties therein and upon the agency having jurisdiction over the same." An agency is defined by statute
as "any of the various units of the Government, including a department, bureau, office, instrumentality, or
government-owned or controlled corporation, or a local government or a distinct unit therein." 18 A
department, on the other hand, "refers to an executive department created by law."19 Whereas, a bureau is
understood to refer "to any principal subdivision of any department." 20 In turn, an office "refers, within the
framework of governmental organization, to any major functional unit of a department or bureau including
regional offices. It may also refer to any position held or occupied by individual persons, whose functions
are defined by law or regulation." 21 An instrumentality is deemed to refer "to any agency of the National
Government, not integrated within the department framework, vested with special functions or jurisdiction
by law, endowed with some if not all corporate powers, administering special funds and enjoying
operational autonomy, usually through a charter. This term includes regulatory agencies, chartered
institutions and government-owned or controlled corporations." 22 Applying the principle in statutory
construction of ejusdem generis, i.e., "where general words follow an enumeration or persons or things, by
words of a particular and specific meaning, such general words are not to be construed in their widest
extent, but are to be held as applying only to persons or things of the same kind or class as those
specifically mentioned,"23 section 3(2) of Executive Order 561 patently indicates that the COSLAP's
dispositions are binding on administrative or executive agencies. The history of the COSLAP itself bolsters
this view. Prior enactments enumerated its member agencies among which it was to exercise a
coordinating function.

The COSLAP discharges quasi-judicial functions:

"Quasi-judicial function" is a term which applies to the actions, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts, or ascertain the existence of
facts, hold hearings, and draw conclusions from them, as a basis for their official action and to
exercise discretion of a judicial nature." 24

However, it does not depart from its basic nature as an administrative agency, albeit one that exercises
quasi-judicial functions. Still, administrative agencies are not considered courts; they are neither part of the
judicial system nor are they deemed judicial tribunals. 25 The doctrine of separation of powers observed in
our system of government reposes the three (3) great powers into its three (3) branches — the legislative,
the executive, and the judiciary — each department being co-equal and coordinate, and supreme in its own
sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its
own agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is
empowered "to determine whether or not there has been grave abuse of discretion amounting to lack of or
excess of jurisdiction on the part of any branch or instrumentality of the Government." 26
There is an equally persuasive reason to grant the petition. As an additional ground for the annulment of
the assailed status quo order of COSLAP, UNITED accuses private respondents of engaging in forum
shopping. Forum shopping exists when a party "repetitively avail[s] of several judicial remedies in different
courts, simultaneously or successively, all substantially founded on the same transactions and the same
essential facts and circumstances, and all raising substantially the same issues either pending in, or
already resolved adversely by some other court." 27 In this connection, Supreme Court Administrative
Circular No. 04-94 dated February 8, 1994 provides:

Revised Circular No. 28-91, dated February 8, 1994, applies to and governs the filing of petitions in
the Supreme Court and the Court of Appeals and is intended to prevent the multiple filing of
petitions or complaints involving the same issues in other tribunals or agencies as a form of forum
shopping. 

Complementary thereto and for the same purpose, the following requirements, in addition to those
in pertinent provisions of the Rules of Court and existing circulars, shall be strictly complied with in
the filing of complaints, petitions, applications or other initiatory pleadings in all courts and agencies
other than the Supreme Court and the Court of Appeals and shall be subject to the sanctions
provided hereunder.

1. The plaintiff, petitioner, applicant or principal part seeking relief in the complaint, petition,
application or other initiatory pleading shall certify under oath in such original pleading, or
in a sworn certification annexed thereto and simultaneously filed therewith, to the truth of
the following facts and undertakings: (a) he has not theretofore commenced any other
action or proceeding involving the same issues in the Supreme Court, the Court of
Appeals, or any other tribunal or agency; (b) to the best of his knowledge, no such action
or proceedings is pending in the Supreme Court, the Court of Appeals, or any other
tribunal or agency; (c) if there is any such action or proceeding which is either pending or
may have been terminated, he must state the status thereof; and (d) if he should thereafter
learn that a similar action or proceeding has been filed or is pending before the Supreme
Court, the Court of Appeals or any other tribunal or agency, he undertakes to report that
fact within five (5) days therefrom to the court or agency wherein the original pleading and
sworn certification contemplated herein have been filed.

The complaint and other initiatory pleadings referred to and subject of this Circular are the
original civil complaint, counterclaim, cross-claim, third (fourth, etc.) party complaint, or
complaint-in-intervention, petition, or application wherein a party asserts his claim for relief.

2. Any violation of this Circular shall be a cause for the dismissal of the complaint, petition,
application or other initiatory pleading, upon motion and after hearing. However, any
clearly willful and deliberate forum shopping by any other party and his counsel through
the filing of multiple complaints or other initiatory pleadings to obtain favorable action shall
be a ground for the summary dismissal thereof and shall constitute contempt of court .
Furthermore, the submission of a false certification or non-compliance with the
undertakings therein, as provided in Paragraph 1 hereof, shall constitute indirect contempt
of court, without prejudice to disciplinary proceedings against the counsel and the filing of
a criminal action against the part. [emphasis supplied]
 xxx           xxx           xxx

The said Administrative Circular's use of the auxiliary verb "shall" imports "an imperative obligation . . .
inconsistent with the idea of discretion." 28 Hence, compliance therewith is mandatory. 29

It bears stressing that there is a material distinction between the requirement of submission of the
certification against forum shopping from the undertakings stated therein. Accordingly,

x x x [f]ailure to comply with this requirement cannot be excused by the fact that plaintiff is not
guilty of forum shopping. The Court of Appeals, therefore, erred in concluding that Administrative
Circular No. 04-94 did not apply to private respondent's case merely because her complaint was
not based on petitioner's cause of action. The Circular applies to any complaint, petition,
application, or other initiatory pleading, regardless of whether the party filing it has actually
committed forum shopping. Every party filing a complaint or any other initiatory pleading is required
to swear under oath that he has not committed nor will he commit forum shopping. Otherwise, we
would have an absurd situation where the parties themselves would be the judge of whether their
actions constitute a violation of said Circular, and compliance therewith would depend on their
belief that they might or might not have violated the requirement. Such interpretation of the
requirement would defeat the very purpose of Circular 04-94.

Indeed, compliance with the certification against forum shopping is separate from, and independent
of, the avoidance of forum shopping itself. Thus, there is a difference in the treatment — in terms of
imposable sanctions — between failure to comply with the certification requirement and violation of
the prohibition against forum shopping. The former is merely a cause for the dismissal, without
prejudice, of the complaint or initiatory pleading, while the latter is a ground for summary dismissal
thereof and constitutes direct contempt. 30

A scrutiny of the pleadings filed before the trial courts and the COSLAP sufficiently establishes private
respondents' propensity for forum shopping. We lay the premise that the certification against forum
shopping must be executed by the plaintiff or principal party, and not by his counsel. 31 Hence, one can
deduce that the certification is a peculiar personal representation on the part of the principal party, an
assurance given to the court or other tribunal that there are no other pending cases involving basically the
same parties, issues and causes of action. In the case at bar, private respondents' litany of omissions
range from failing to submit the required certification against forum shopping to filing a false certification,
and then to forum shopping itself. First, the petition filed before the COSLAP conspicuously lacked a
certification against forum shopping. Second, it does not appear from the record that the ASSOCIATION
informed Branch 4 of the Regional Trial Court of Baguio City before which Civil Case No. 3316-R was
pending, that another action, Civil Case No. 3382-R, was filed before Branch 61 of the same court. Another
group of homeless residents of Dominican Hill, the LAND REFORM BENEFICIARIES ASSOCIATION, INC.
initiated the latter case. The aforesaid plaintiff, however, does not hesitate to admit that it filed the second
case in representation of private respondent, as one of its affiliates. In the same manner, the certification
against forum shopping accompanying the complaint in Civil Case No. 3382-R does not mention the
pendency of Civil Case No. 3316-R. In fact, the opposite assurance was given, that there was no action
pending before any other tribunal. Another transgression is that both branches of the trial court do not
appear to have been notified of the filing of the subject COSLAP Case No. 98-253. 
It is evident from the foregoing facts that private respondents, in filing multiple petitions, have mocked our
attempts to eradicate forum shopping and have thereby upset the orderly administration of justice. They
sought recourse from three (3) different tribunals in order to obtain the writ of injunction they so desperately
desired. "The willful attempt by private respondents to obtain a preliminary injunction in another court after it
failed to acquire the same from the original court constitutes grave abuse of the judicial process." 32

In this connection, we expounded on forum shopping in Viva Productions, Inc. v. Court of Appeals 33 that:

Private respondent's intention to engage in forum shopping becomes manifest with undoubted

clarity upon the following considerations. Notably, if not only to ensure the issuance of an injunctive
relief, the significance of the action for damages before the Makati court would be nil. What
damages against private respondent would there be to speak about if the  Parañaque court already
enjoins the performance of the very same act complained of in the Makati court? Evidently, the
action for damages is premature if not for the preliminary injunctive relief sought. Thus, we find
grave abuse of discretion on the part of the Makati court, being a mere co-equal of the Parañaque
court, in not giving due deference to the latter before which the issue of the alleged violation of
the sub-judice rule had already been raised and submitted. In such instance, the Makati court, if it
was wary of dismissing the action outrightly under Administrative Circular No. 04-94, should have,
at least, ordered the consolidation of its case with that of the Parañaque court, which had first
acquired jurisdiction over the related case x x x, or it should have suspended the proceedings until
the Parañaque court may have ruled on the issue x x x.

xxx           xxx           xxx

Thus, while we might admit that the causes of action before the Makati court and the Parañaque
court are distinct, and that private respondent cannot seek civil indemnity in the contempt
proceedings, the same being in the nature of criminal contempt, we nonetheless cannot ignore
private respondent's intention of seeking exactly identical reliefs when it sought the preliminary
relief of injunction in the Makati court. As earlier indicated, had private respondent been completely
in good faith there would have been no hindrance in filing the action for damages with the regional
trial court of Parañaque and having it consolidated with the contempt proceedings before Branch
274, so that the same issue on the alleged violation of the sub judice rule will not have to be
passed upon twice, and there would be no possibility of having two courts of concurrent jurisdiction
making two conflicting resolutions.

Yet from another angle, it may be said that when the Parañaque court acquired jurisdiction over the
said issue, it excluded all other courts of concurrent jurisdiction from acquiring jurisdiction over the
same. To hold otherwise would be to risk instances where courts of concurrent jurisdiction might
have conflicting orders. This will create havoc and result in an extremely disordered administration
of justice. Therefore, even on the assumption that the Makati court may acquire jurisdiction over
the subject matter of the action for damages, without prejudice to the application of Administrative
Circular No. 04-94, it cannot nonetheless acquire jurisdiction over the issue of whether or not
petitioner has violated the sub judice rule. At best, the Makati court may hear the case only with
respect to the alleged injury suffered by private respondent after the Parañaque court shall have
ruled favorably on the said issue.
We also noted several indications of private respondents' bad faith. The complaint filed in Civil Case No.
3316-R was prepared by the ASSOCIATION's counsel, Atty. Conrado Villamor Catral, Jr. whereas the
complaint filed in Civil Case No. 3382-R was signed by a different lawyer, Atty. Thomas S. Tayengco. With
regard to the petition filed with the COSLAP, the same was signed by private respondents individually. As
to the latter case, we noted that the petition itself could not have been prepared by ordinary laymen,
inasmuch as it exhibits familiarity with statutory provisions and legal concepts, and is written in a lawyerly
style.

In the same manner, the plaintiffs in the three (3) different cases were made to appear as dissimilar: in Civil
Case No. 3316-R, the plaintiff was ASSOCIATION of which private respondent Mario Padilan was head,
while the plaintiff in Civil Case No. 3382-R was the BENEFICIARIES. Before the COSLAP, private
respondents themselves were the petitioners, led again by Padilan. 34 Private respondents also attempted to
vary their causes of action: in Civil Case No. 3382-R and COSLAP Case No. 98-253, they seek the
annulment of the Memorandum of Agreement executed by and among UNITED, the PMS, and HIGC as
well as the transfer certificates of title accordingly issued to petitioner. All three (3) cases sought to enjoin
the demolition of private respondents' houses.

It has been held that forum shopping is evident where the elements of litis pendentia or res judicata are
present. Private respondents' subterfuge comes to naught, for the effects of res judicata or litis
pendentia may not be avoided by varying the designation of the parties or changing the form of the action
or adopting a different mode of presenting one's case. 35

In view of the foregoing, all that remains to be done is the imposition of the proper penalty. A party's willful
and deliberate act of forum shopping is punishable by summary dismissal of the actions filed. 36 The
summary dismissal of both COSLAP Case No. 98-253 and Civil Case No. 3316-R is therefore warranted
under the premises. We shall refrain from making any pronouncement on Civil Case No. 3382-R, the
dismissal of which was elevated on appeal to the Court of Appeals where it is still pending.

WHEREFORE, the petition is hereby GRANTED. The status quo order dated September 29, 1998 issued
in COSLAP Case No. 98-253 by respondent Commission On The Settlement Of Land Problems (COSLAP)
is hereby SET ASIDE; and the petition filed in COSLAP Case No. 98-253 and the complaint in Civil Case
No. 3316-R are hereby DISMISSED for lack of jurisdiction and forum shopping. Costs against private
respondents.

SO ORDERED.
G.R. No. 97149 March 31, 1992

FIDENCIO Y. BEJA, SR., petitioner, 

vs.
COURT OF APPEALS, HONORABLE REINERIO O. REYES, in his capacity as Secretary of the
Department of Transportation and Communications; COMMODORE ROGELIO A. DAYAN, in his capacity
as General Manager of the Philippine Ports Authority; DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS, ADMINISTRATIVE ACTION BOARD; and JUSTICE ONOFRE A. VILLALUZ, in his
capacity as Chairman of the Administrative Action Board, DOTC, respondents.

ROMERO, J.:

The instant petition for certiorari questions the jurisdiction of the Secretary of the Department of
Transportation and Communications (DOTC) and/or its Administrative Action Board (AAB) over
administrative cases involving personnel below the rank of Assistant General Manager of the Philippine
Ports Authority (PPA), an agency attached to the said Department.

Petitioner Fidencio Y. Beja, Sr. 1 was first employed by the PPA as arrastre supervisor in 1975. He became
Assistant Port Operations Officer in 1976 and Port Operations Officer in 1977. In February 1988, as a result
of the reorganization of the PPA, he was appointed Terminal Supervisor.

On October 21, 1988, the PPA General Manager, Rogelio A. Dayan, filed Administrative Case No. 11-04-
88 against petitioner Beja and Hernando G. Villaluz for grave dishonesty, grave misconduct, willful violation
of reasonable office rules and regulations and conduct prejudicial to the best interest of the service. Beja
and Villaluz allegedly erroneously assessed storage fees resulting in the loss of P38,150.77 on the part of
the PPA. Consequently, they were preventively suspended for the charges. After a preliminary investigation
conducted by the district attorney for Region X, Administrative Case No. 11-04-88 was "considered closed
for lack of merit."

On December 13, 1988, another charge sheet, docketed as Administrative Case No. 12-01-88, was filed
against Beja by the PPA General Manager also for dishonesty, grave misconduct, violation of reasonable
office rules and regulations, conduct prejudicial to the best interest of the service and for being notoriously
undesirable. The charge consisted of six (6) different specifications of administrative offenses including
fraud against the PPA in the total amount of P218,000.00. Beja was also placed under preventive
suspension pursuant to Sec. 41 of P.D. No. 807.

The case was redocketed as Administrative Case No. PPA-AAB-1-049-89 and thereafter, the PPA general
manager indorsed it to the AAB for "appropriate action." At the scheduled hearing, Beja asked for
continuance on the ground that he needed time to study the charges against him. The AAB proceeded to
hear the case and gave Beja an opportunity to present evidence. However, on February 20, 1989, Beja
filed a petition for certiorari with preliminary injunction before the Regional Trial Court of Misamis
Oriental. 2 Two days later, he filed with the AAB a manifestation and motion to suspend the hearing of
Administrative Case No. PPA-AAB-1-049-89 on account of the pendency of the certiorari proceeding before
the court. AAB denied the motion and continued with the hearing of the administrative case.

Thereafter, Beja moved for the dismissal of the certiorari case below and proceeded to file before this Court
a petition for certiorari with preliminary injunction and/or temporary restraining order. The case was
docketed as G.R. No. 87352 captioned "Fidencio Y. Beja v. Hon. Reinerio 0. Reyes, etc., et al." In the  en
banc resolution of March 30, 1989, this Court referred the case to the Court of Appeals for "appropriate
action." 3 G.R. No. 87352 was docketed in the Court of Appeals as CA-G.R. SP No. 17270.

Meanwhile, a decision was rendered by the AAB in Administrative Case No. PPA-AAB-049-89. Its
dispositive portion reads:

WHEREFORE, judgment is hereby rendered, adjudging the following, namely:

a) That respondents Geronimo Beja, Jr. and Hernando Villaluz are exonerated from the
charge against them;

b) That respondent Fidencio Y. Beja be dismissed from the service;

c) That his leave credits and retirement benefits are declared forfeited;

d) That he be disqualified from re-employment in the government service;

e) That his eligibility is recommended to be cancelled.

Pasig, Metro Manila, February 28, 1989.

On December 10, 1990, after appropriate proceedings, the Court of Appeals also rendered a decision  4 in
CA-G.R. SP No. 17270 dismissing the petition for certiorari for lack of merit. Hence, Beja elevated the case
back to this Court through an "appeal by certiorari with preliminary injunction and/or temporary restraining
order."

We find the pleadings filed in this case to be sufficient bases for arriving at a decision and hence, the filing
of memoranda has been dispensed with.

In his petition, Beja assails the Court of Appeals for having "decided questions of substance in a way
probably not in accord with law or with the applicable decisions" of this Court. 5 Specifically, Beja contends
that the Court of Appeals failed to declare that: (a) he was denied due process; (b) the PPA general
manager has no power to issue a preventive suspension order without the necessary approval of the PPA
board of directors; (c) the PPA general manager has no power to refer the administrative case filed against
him to the DOTC-AAB, and (d) the DOTC Secretary, the Chairman of the DOTC-AAB and DOTC-AAB itself
as an adjudicatory body, have no jurisdiction to try the administrative case against him. Simply put, Beja
challenges the legality of the preventive suspension and the jurisdiction of the DOTC Secretary and/or the
AAB to initiate and hear administrative cases against PPA personnel below the rank of Assistant General
Manager.
Petitioner anchors his contention that the PPA general manager cannot subject him to a preventive
suspension on the following provision of Sec. 8, Art. V of Presidential Decree No. 857 reorganizing the
PPA:

(d) the General Manager shall, subject to the approval of the Board, appoint and remove
personnel below the rank of Assistant General Manager. (Emphasis supplied.)

Petitioner contends that under this provision, the PPA Board of Directors and not the PPA General
Manager is the "proper disciplining authority. 6

As correctly observed by the Solicitor General, the petitioner erroneously equates "preventive suspension"
as a remedial measure with "suspension" as a penalty for administrative dereliction. The imposition of
preventive suspension on a government employee charged with an administrative offense is subject to the
following provision of the Civil Service Law, P.D. No. 807:

Sec. 41. Preventive Suspension. — The proper disciplining authority may preventively
suspend any subordinate officer or employee under his authority pending an investigation,
if the charge against such officer or employee involves dishonesty, oppression or grave
misconduct, or neglect in the performance of duty, or if there are reasons to believe that
the respondent is guilty of charges which would warrant his removal from the service.

Imposed during the pendency of an administrative investigation, preventive suspension is not a penalty in
itself. It is merely a measure of precaution so that the employee who is charged may be separated, for
obvious reasons, from the scene of his alleged misfeasance while the same is being investigated.  7 Thus,
preventive suspension is distinct from the administrative penalty of removal from office such as the one
mentioned in Sec. 8(d) of P.D. No 857. While the former may be imposed on a respondent during the
investigation of the charges against him, the latter is the penalty which may only be meted upon him at the
termination of the investigation or the final disposition of the case.

The PPA general manager is the disciplining authority who may, by himself and without the approval of the
PPA Board of Directors, subject a respondent in an administrative case to preventive suspension. His
disciplinary powers are sanctioned, not only by Sec. 8 of P.D. No. 857 aforequoted, but also by Sec. 37 of
P.D. No. 807 granting heads of agencies the "jurisdiction to investigate and decide matters involving
disciplinary actions against officers and employees" in the PPA.

Parenthetically, the period of preventive suspension is limited. It may be lifted even if the disciplining
authority has not finally decided the administrative case provided the ninety-day period from the effectivity
of the preventive suspension has been exhausted. The employee concerned may then be
reinstated. 8 However, the said ninety-day period may be interrupted. Section 42 of P.D. No. 807 also
mandates that any fault, negligence or petition of a suspended employee may not be considered in the
computation of the said period. Thus, when a suspended employee obtains from a court of justice a
restraining order or a preliminary injunction inhibiting proceedings in an administrative case, the lifespan of
such court order should be excluded in the reckoning of the permissible period of the preventive
suspension. 9
With respect to the issue of whether or not the DOTC Secretary and/or the AAB may initiate and hear
administrative cases against PPA Personnel below the rank of Assistant General Manager, the
Court qualifiedly rules in favor of petitioner.

The PPA was created through P.D. No. 505 dated July 11, 1974. Under that Law, the corporate powers of
the PPA were vested in a governing Board of Directors known as the Philippine Port Authority Council. Sec.
5(i) of the same decree gave the Council the power "to appoint, discipline and remove, and determine the
composition of the technical staff of the Authority and other personnel."

On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, See. 4(a) thereof created the
Philippine Ports Authority which would be "attached" to the then Department of Public Works,
Transportation and Communication. When Executive Order No. 125 dated January 30, 1987 reorganizing
the Ministry of Transportation and Communications was issued, the PPA retained its "attached"
status. 10 Even Executive Order No. 292 or the Administrative Code of 1987 classified the PPA as an
agency "attached" to the Department of Transportation and Communications (DOTC). Sec. 24 of Book IV,
Title XV, Chapter 6 of the same Code provides that the agencies attached to the DOTC "shall continue to
operate and function in accordance with the respective charters or laws creating them, except when they
conflict with this Code."

Attachment of an agency to a Department is one of the three administrative relationships mentioned in

Book IV, Chapter 7 of the Administrative Code of 1987, the other two being supervision and control and
administrative supervision. "Attachment" is defined in Sec. 38 thereof as follows:

(3) Attachment. — (a) This refers to the lateral relationship between the Department or its
equivalent and the attached agency or corporation for purposes of policy and program
coordination. The coordination shall be accomplished by having the department
represented in the governing board of the attached agency or corporation, either as
chairman or as a member, with or without voting rights, if this is permitted by the charter;
having the attached corporation or agency comply with a system of periodic reporting
which shall reflect the progress of programs and projects; and having the department or its
equivalent provide general policies through its representative in the board, which shall
serve as the framework for the internal policies of the attached corporation or agency;

(b) Matters of day-to-day administration or all those pertaining to internal operations shall
he left to the discretion or judgment of the executive officer of the agency or corporation. In
the event that the Secretary and the head of the board or the attached agency or
corporation strongly disagree on the interpretation and application of policies, and the
Secretary is unable to resolve the disagreement, he shall bring the matter to the President
for resolution and direction;

(c) Government-owned or controlled corporations attached to a department shall submit to

the Secretary concerned their audited financial statements within sixty (60) days after the
close of the fiscal year; and

(d) Pending submission of the required financial statements, the corporation shall continue
to operate on the basis of the preceding year's budget until the financial statements shall
have been submitted. Should any government-owned or controlled corporation incur an
 operation deficit at the close of its fiscal year, it shall be subject to administrative
supervision of the department; and the corporation's operating and capital budget shall be
subject to the department's examination, review, modification and approval. (emphasis
supplied.)

An attached agency has a larger measure of independence from the Department to which it is attached
than one which is under departmental supervision and control or administrative supervision. This is borne
out by the "lateral relationship" between the Department and the attached agency. The attachment is
merely for "policy and program coordination." With respect to administrative matters, the independence of
an attached agency from Departmental control and supervision is further reinforced by the fact that even an
agency under a Department's administrative supervision is free from Departmental interference with
respect to appointments and other personnel actions "in accordance with the decentralization of personnel
functions" under the Administrative Code of 1987. 11 Moreover, the Administrative Code explicitly provides
that Chapter 8 of Book IV on supervision and control shall not apply to chartered institutions attached to a
Department. 12

Hence, the inescapable conclusion is that with respect to the management of personnel, an attached
agency is, to a certain extent, free from Departmental interference and control. This is more explicitly
shown by P.D. No. 857 which provides:

Sec. 8. Management and Staff. — a) The President shall, upon the recommendation of the
Board, appoint the General Manager and the Assistant General Managers.

(b) All other officials and employees of the Authority shall be selected and appointed on
the basis of merit and fitness based on a comprehensive and progressive merit system to
be established by the Authority immediately upon its organization and consistent with Civil
Service rules and regulations. The recruitment, transfer, promotion, and dismissal of all
personnel of the Authority, including temporary workers, shall be governed by such merit
system.

(c) The General Manager shall, subject to the approval of the Board, determine the staffing
pattern and the number of personnel of the Authority, define their duties and
responsibilities, and fix their salaries and emoluments. For professional and technical
positions, the General Manager shall recommend salaries and emoluments that are
comparable to those of similar positions in other government-owned corporations, the
provisions of existing rules and regulations on wage and position classification
notwithstanding.

(d) The General Manager shall, subject to the approval by the Board, appoint and remove
personnel below the rank of Assistant General Manager.

xxx xxx xxx

(emphasis supplied.)
Although the foregoing section does not expressly provide for a mechanism for an administrative
investigation of personnel, by vesting the power to remove erring employees on the General Manager, with
the approval of the PPA Board of Directors, the law impliedly grants said officials the power to investigate
its personnel below the rank of Assistant Manager who may be charged with an administrative offense.
During such investigation, the PPA General Manager, as earlier stated, may subject the employee
concerned to preventive suspension. The investigation should be conducted in accordance with the
procedure set out in Sec. 38 of P.D. No. 807. 13 Only after gathering sufficient facts may the PPA General
Manager impose the proper penalty in accordance with law. It is the latter action which requires the
approval of the PPA Board of Directors. 14

From an adverse decision of the PPA General Manager and the Board of Directors, the employee
concerned may elevate the matter to the Department Head or Secretary. Otherwise, he may appeal directly
to the Civil Service Commission. The permissive recourse to the Department Secretary is sanctioned by the
Civil Service Law (P.D. No. 807) under the following provisions:

Sec. 37. Disciplinary Jurisdiction. — (a) The Commission shall decide upon appeal all
administrative disciplinary cases involving the imposition of a penalty of suspension for
more than thirty days, or fine in an amount exceeding thirty days salary, demotion in rank
or salary or transfer, removal or dismissal from office. A complaint may be filed directly with
the Commission by a private citizen against a government official or employee in which
case it may hear and decide the case or it may deputize any department or agency or
official or group of officials to conduct the investigation. The results of the investigation
shall be submitted to the Commission with recommendation as to the penalty to be
imposed or other action to be taken.

(b) The heads of departments, agencies and instrumentalities, provinces, cities and
municipalities shall have jurisdiction to investigate and decide matters involving disciplinary
action against officers and employees under their jurisdiction. The decisions shall be final
in case the penalty imposed is suspension for not more than thirty days or fine in an
amount not exceeding thirty days' salary. In case the decision rendered by a bureau or
office head is appealable to the Commission, the same may be initially appealed to the
department and finally to the Commission and pending appeal, the same shall be
executory except when the penalty is removal, in which case the same shall be executory
only after confirmation by the department head.

xxx xxx xxx

(Emphasis supplied.)

It is, therefore, clear that the transmittal of the complaint by the PPA General Manager to the AAB was
premature. The PPA General Manager should have first conducted an investigation, made the proper
recommendation for the imposable penalty and sought its approval by the PPA Board of Directors. It was
discretionary on the part of the herein petitioner to elevate the case to the then DOTC Secretary Reyes.
Only then could the AAB take jurisdiction of the case.

The AAB, which was created during the tenure of Secretary Reyes under Office Order No. 88-318 dated
July 1, 1988, was designed to act, decide and recommend to him "all cases of administrative malfeasance,
irregularities, grafts and acts of corruption in the Department." Composed of a Chairman and two (2)
members, the AAB came into being pursuant to Administrative Order No. 25 issued by the President on
May 25, 1987. 15 Its special nature as a quasi-judicial administrative body notwithstanding, the AAB is not
exempt from the observance of due process in its proceedings. 16 We are not satisfied that it did so in this
case the respondents protestation that petitioner waived his right to be heard notwithstanding. It should be
observed that petitioner was precisely questioning the AAB's jurisdiction when it sought judicial recourse.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar as it upholds the power of the
PPA General Manager to subject petitioner to preventive suspension and REVERSED insofar as it
validates the jurisdiction of the DOTC and/or the AAB to act on Administrative Case No. PPA-AAB-1-049-
89 and rules that due process has been accorded the petitioner.

The AAB decision in said case is hereby declared NULL and VOID and the case in REMANDED to the
PPA whose General Manager shall conduct with dispatch its reinvestigation.

The preventive suspension of petitioner shall continue unless after a determination of its duration, it is
found that he had served the total of ninety (90) days in which case he shall be reinstated immediately.

SO ORDERED.
G.R. No. 163980 August 3, 2006

HOLY SPIRIT HOMEOWNERS ASSOCIATION, INC. and NESTORIO F. APOLINARIO, in his personal
capacity and as President of Holy Spirit Homeowners Association, Inc., Petitioners,
vs.
SECRETARY MICHAEL DEFENSOR, in his capacity as Chairman of the Housing and Urban Development
Coordinating Council (HUDCC), ATTY. EDGARDO PAMINTUAN, in his capacity as General Manager of
the National Housing Authority (NHA), MR. PERCIVAL CHAVEZ, in his capacity as Chairman of the
PresidentialCommission for the Urban Poor (PCUP), MAYOR FELICIANO BELMONTE, in his capacity as
Mayor of Quezon City, SECRETARY ELISEA GOZUN, in her capacity as Secretary of the Department of
Environment and Natural Resources (DENR) and SECRETARY FLORENTE SORIQUEZ, in his capacity as
Secretary of the Department of Public Works and Highways (DPWH) as ex-officio members of the
NATIONAL GOVERNMENT CENTER ADMINISTRATION COMMITTEE, Respondents.

DECISION

TINGA, J.:

The instant petition for prohibition under Rule 65 of the 1997 Rules of Civil Procedure, with prayer for the
issuance of a temporary restraining order and/or writ of preliminary injunction, seeks to prevent
respondents from enforcing the implementing rules and regulations (IRR) of Republic Act No. 9207,
otherwise known as the "National Government Center (NGC) Housing and Land Utilization Act of 2003."

Petitioner Holy Spirit Homeowners Association, Inc. (Association) is a homeowners association from the
West Side of the NGC. It is represented by its president, Nestorio F. Apolinario, Jr., who is a co-petitioner in
his own personal capacity and on behalf of the association.

Named respondents are the ex-officio members of the National Government Center Administration

Committee (Committee). At the filing of the instant petition, the Committee was composed of Secretary
Michael Defensor, Chairman of the Housing and Urban Development Coordinating Council (HUDCC), Atty.
Edgardo Pamintuan, General Manager of the National Housing Authority (NHA), Mr. Percival Chavez,
Chairman of the Presidential Commission for Urban Poor (PCUP), Mayor Feliciano Belmonte of Quezon
City, Secretary Elisea Gozun of the Department of Environment and Natural Resources (DENR), and
Secretary Florante Soriquez of the Department of Public Works and Highways (DPWH).

Prior to the passage of R.A. No. 9207, a number of presidential issuances authorized the creation and
development of what is now known as the National Government Center (NGC). 

On March 5, 1972, former President Ferdinand Marcos issued Proclamation No. 1826, reserving a parcel of
land in Constitution Hills, Quezon City, covering a little over 440 hectares as a national government site to
be known as the NGC. 1

On August 11, 1987, then President Corazon Aquino issued Proclamation No. 137, excluding 150 of the
440 hectares of the reserved site from the coverage of Proclamation No. 1826 and authorizing instead the
disposition of the excluded portion by direct sale to the bona fide residents therein. 2
In view of the rapid increase in population density in the portion excluded by Proclamation No. 137 from the
coverage of Proclamation No. 1826, former President Fidel Ramos issued Proclamation No. 248 on
September 7, 1993, authorizing the vertical development of the excluded portion to maximize the number of
families who can effectively become beneficiaries of the government’s socialized housing program. 3

On May 14, 2003, President Gloria Macapagal-Arroyo signed into law R.A. No. 9207. Among the salient
provisions of the law are the following:

Sec. 2. Declaration of Policy. – It is hereby declared the policy of the State to secure the land tenure of the
urban poor. Toward this end, lands located in the NGC, Quezon City shall be utilized for housing,
socioeconomic, civic, educational, religious and other purposes.

Sec. 3. Disposition of Certain Portions of the National Government Center Site to Bona Fide Residents. –
Proclamation No. 1826, Series of 1979, is hereby amended by excluding from the coverage thereof, 184
hectares on the west side and 238 hectares on the east side of Commonwealth Avenue, and declaring the
same open for disposition to bona fide residents therein: Provided, That the determination of the bona
fide residents on the west side shall be based on the census survey conducted in 1994 and the
determination of the bona fide residents on the east side shall be based on the census survey conducted in
1994 and occupancy verification survey conducted in 2000: Provided, further, That all existing legal
agreements, programs and plans signed, drawn up or implemented and actions taken, consistent with the
provisions of this Act are hereby adopted.

Sec. 4. Disposition of Certain Portions of the National Government Center Site for Local Government or
Community Facilities, Socioeconomic, Charitable, Educational and Religious Purposes. – Certain portions
of land within the aforesaid area for local government or community facilities, socioeconomic, charitable,
educational and religious institutions are hereby reserved for disposition for such purposes:  Provided, That
only those institutions already operating and with existing facilities or structures, or those occupying the
land may avail of the disposition program established under the provisions this Act; Provided, further, That
in ascertaining the specific areas that may be disposed of in favor of these institutions, the existing site
allocation shall be used as basis therefore: Provided, finally. That in determining the reasonable lot
allocation of such institutions without specific lot allocations, the land area that may be allocated to them
shall be based on the area actually used by said institutions at the time of effectivity of this Act. (Emphasis
supplied.)

In accordance with Section 5 of R.A. No. 9207, 4 the Committee formulated the Implementing Rules and
Regulations (IRR) of R.A. No. 9207 on June 29, 2004. Petitioners subsequently filed the instant petition,
raising the following issues: 

WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE RULES AND
REGULATIONS OF REPUBLIC ACT NO. 9207, OTHERWISE KNOWN AS "NATIONAL GOVERNMENT
CENTER (NGC) HOUSING AND LAND UTILIZATION ACT OF 2003" SHOULD BE DECLARED NULL
AND VOID FOR BEING INCONSISTENT WITH THE LAW IT SEEKS TO IMPLEMENT.

WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE RULES AND
REGULATIONS OF REPUBLIC ACT NO. 9207, OTHERWISE KNOWN AS "NATIONAL GOVERNMENT
CENTER (NGC) HOUSING AND LAND UTILIZATION ACT OF 2003" SHOULD BE DECLARED NULL
AND VOID FOR BEING ARBITRARY, CAPRICIOUS AND WHIMSICAL. 5
First, the procedural matters.

The Office of the Solicitor General (OSG) argues that petitioner Association cannot question the
implementation of Section 3.1 (b.2) and Section 3.2 (c.1) since it does not claim any right over the NGC
East Side. Section 3.1 (b.2) provides for the maximum lot area that may be awarded to a resident-
beneficiary of the NGC East Side, while Section 3.2 (c.1) imposes a lot price escalation penalty to a
qualified beneficiary who fails to execute a contract to sell within the prescribed period.  6 Also, the OSG
contends that since petitioner association is not the duly recognized people’s organization in the NGC and
since petitioners not qualify as beneficiaries, they cannot question the manner of disposition of lots in the
NGC. 7

"Legal standing" or locus standi has been defined as a personal and substantial interest in the case such
that the party has sustained or will sustain direct injury as a result of the governmental act that is being
challenged…. The gist of the question of standing is whether a party alleges "such personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court depends for illumination of difficult constitutional questions." 8

Petitioner association has the legal standing to institute the instant petition, whether or not it is the duly
recognized association of homeowners in the NGC. There is no dispute that the individual members of
petitioner association are residents of the NGC. As such they are covered and stand to be either benefited
or injured by the enforcement of the IRR, particularly as regards the selection process of beneficiaries and
lot allocation to qualified beneficiaries. Thus, petitioner association may assail those provisions in the IRR
which it believes to be unfavorable to the rights of its members. Contrary to the OSG’s allegation that the
failure of petitioner association and its members to qualify as beneficiaries effectively bars them from
questioning the provisions of the IRR, such circumstance precisely operates to confer on them the legal
personality to assail the IRR. Certainly, petitioner and its members have sustained direct injury arising from
the enforcement of the IRR in that they have been disqualified and eliminated from the selection process.
While it is true that petitioners claim rights over the NGC West Side only and thus cannot be affected by the
implementation of Section 3.1 (b.2), which refers to the NGC East Side, the rest of the assailed provisions
of the IRR, namely, Sections 3.1 (a.4), 3.2 (a.1) and 3.2 (c.1), govern the disposition of lots in the West
Side itself or all the lots in the NGC.

We cannot, therefore, agree with the OSG on the issue of locus standi. The petition does not merit
dismissal on that ground.

There are, however, other procedural impediments to the granting of the instant petition. The OSG claims
that the instant petition for prohibition is an improper remedy because the writ of prohibition does not lie
against the exercise of a quasi-legislative function. 9 Since in issuing the questioned IRR of R.A. No. 9207,
the Committee was not exercising judicial, quasi-judicial or ministerial function, which is the scope of a
petition for prohibition under Section 2, Rule 65 of the 1997 Rules of Civil Procedure, the instant prohibition
should be dismissed outright, the OSG contends. For their part, respondent Mayor of Quezon City 10 and
respondent NHA 11 contend that petitioners violated the doctrine of hierarchy of courts in filing the instant
petition with this Court and not with the Court of Appeals, which has concurrent jurisdiction over a petition
for prohibition.

The cited breaches are mortal. The petition deserves to be spurned as a consequence. 
Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or
administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and
regulations which results in delegated legislation that is within the confines of the granting statute and the
doctrine of non-delegability and separability of powers. 12

In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a

party need not exhaust administrative remedies before going to court. This principle, however, applies only
where the act of the administrative agency concerned was performed pursuant to its quasi-judicial function,
and not when the assailed act pertained to its rule-making or quasi-legislative power. 13

The assailed IRR was issued pursuant to the quasi-legislative power of the Committee expressly
authorized by R.A. No. 9207. The petition rests mainly on the theory that the assailed IRR issued by the
Committee is invalid on the ground that it is not germane to the object and purpose of the statute it seeks to
implement. Where what is assailed is the validity or constitutionality of a rule or regulation issued by the
administrative agency in the performance of its quasi-legislative function, the regular courts have
jurisdiction to pass upon the same. 14

Since the regular courts have jurisdiction to pass upon the validity of the assailed IRR issued by the
Committee in the exercise of its quasi-legislative power, the judicial course to assail its validity must follow
the doctrine of hierarchy of courts. Although the Supreme Court, Court of Appeals and the Regional Trial
Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted
freedom of choice of court forum. 15

True, this Court has the full discretionary power to take cognizance of the petition filed directly with it if
compelling reasons, or the nature and importance of the issues raised, so warrant. 16 A direct invocation of
the Court’s original jurisdiction to issue these writs should be allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition. 17

In Heirs of Bertuldo Hinog v. Melicor, 18 the Court said that it will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious implications, justify the availment of the
extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction.  19 A perusal,
however, of the petition for prohibition shows no compelling, special or important reasons to warrant the
Court’s taking cognizance of the petition in the first instance. Petitioner also failed to state any reason that
precludes the lower courts from passing upon the validity of the questioned IRR. Moreover, as provided in
Section 5, Article VIII of the 

Constitution, 20 the Court’s power to evaluate the validity of an implementing rule or regulation is generally
appellate in nature. Thus, following the doctrine of hierarchy of courts, the instant petition should have been
initially filed with the Regional Trial Court. 

A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a quasi-
legislative function. Prohibition is an extraordinary writ directed against any tribunal, corporation, board,
officer or person, whether exercising judicial, quasi-judicial or ministerial functions, ordering said entity or
person to desist from further proceedings when said proceedings are without or in excess of said entity’s or
person’s jurisdiction, or are accompanied with grave abuse of discretion, and there is no appeal or any
other plain, speedy and adequate remedy in the ordinary course of law. 21 Prohibition lies against judicial or
ministerial functions, but not against legislative or quasi-legislative functions. Generally, the purpose of a
writ of prohibition is to keep a lower court within the limits of its jurisdiction in order to maintain the
administration of justice in orderly channels. 22 Prohibition is the proper remedy to afford relief against
usurpation of jurisdiction or power by an inferior court, or when, in the exercise of jurisdiction in handling
matters clearly within its cognizance the inferior court transgresses the bounds prescribed to it by the law,
or where there is no adequate remedy available in the ordinary course of law by which such relief can be
obtained. 23 Where the principal relief sought is to invalidate an IRR, petitioners’ remedy is an ordinary
action for its nullification, an action which properly falls under the jurisdiction of the Regional Trial Court. In
any case, petitioners’ allegation that "respondents are performing or threatening to perform functions
without or in excess of their jurisdiction" may appropriately be enjoined by the trial court through a writ of
injunction or a temporary restraining order.

In a number of petitions, 24 the Court adequately resolved them on other grounds without adjudicating on
the constitutionality issue when there were no compelling reasons to pass upon the same. In like manner,
the instant petition may be dismissed based on the foregoing procedural grounds. Yet, the Court will not
shirk from its duty to rule on the merits of this petition to facilitate the speedy resolution of this case. In
proper cases, procedural rules may be relaxed or suspended in the interest of substantial justice. And the
power of the Court to except a particular case from its rules whenever the purposes of justice require it
cannot be questioned. 25

Now, we turn to the substantive aspects of the petition. The outcome, however, is just as dismal for
petitioners. 

Petitioners assail the following provisions of the IRR:

Section 3. Disposition of Certain portions of the NGC Site to the bonafide residents

3.1. Period for Qualification of Beneficiaries

x x x x 

(a.4) Processing and evaluation of qualifications shall be based on the Code of Policies and subject to the
condition that a beneficiary is qualified to acquire only one (1) lot with a minimum of 36 sq. m. and
maximum of 54 sq. m. and subject further to the availability of lots.

x x x x 

(b.2) Applications for qualification as beneficiary shall be processed and evaluated based on the Code of
Policies including the minimum and maximum lot allocation of 35 sq. m. and 60 sq. m.

x x x x 

3.2. Execution of the Contract to Sell

(a) Westside
(a.1) All qualified beneficiaries shall execute Contract to Sell (CTS) within sixty (60) days from the effectivity
of the IRR in order to avail of the lot at P700.00 per sq. m.

x x x x 

(c) for both eastside and westside

(c.1) Qualified beneficiaries who failed to execute CTS on the deadline set in item a.1 above in case of
westside and in case of eastside six (6) months after approval of the subdivision plan shall be subjected to
lot price escalation.

The rate shall be based on the formula to be set by the National Housing Authority factoring therein the
affordability criteria. The new rate shall be approved by the NGC-Administration Committee (NGC-AC). 

Petitioners contend that the aforequoted provisions of the IRR are constitutionally infirm as they are not
germane to and/or are in conflict with the object and purpose of the law sought to be implemented. 

First. According to petitioners, the limitation on the areas to be awarded to qualified beneficiaries under
Sec. 3.1 (a.4) and (b.2) of the IRR is not in harmony with the provisions of R.A. No. 9207, which mandates
that the lot allocation to qualified beneficiaries shall be based on the area actually used or occupied
by bona fide residents without limitation to area. The argument is utterly baseless.

The beneficiaries of lot allocations in the NGC may be classified into two groups, namely, the urban poor or
the bona fide residents within the NGC site and certain government institutions including the local
government. Section 3, R.A. No. 9207 mandates the allocation of additional property within the NGC for
disposition to its bona fide residents and the manner by which this area may be distributed to qualified
beneficiaries. Section 4, R.A. No. 9207, on the other hand, governs the lot disposition to government
institutions. While it is true that Section 4 of R.A. No. 9207 has a proviso mandating that the lot allocation
shall be based on the land area actually used or occupied at the time of the law’s effectivity, this proviso
applies only to institutional beneficiaries consisting of the local government, socioeconomic, charitable,
educational and religious institutions which do not have specific lot allocations, and not to the  bona
fide residents of NGC. There is no proviso which even hints that a bona fide resident of the NGC is likewise
entitled to the lot area actually occupied by him.

Petitioners’ interpretation is also not supported by the policy of R.A. No. 9207 and the prior proclamations
establishing the NGC. The government’s policy to set aside public property aims to benefit not only the
urban poor but also the local government and various government institutions devoted to socioeconomic,
charitable, educational and 

religious purposes. 26 Thus, although Proclamation No. 137 authorized the sale of lots to bona
fide residents in the NGC, only a third of the entire area of the NGC was declared open for disposition
subject to the condition that those portions being used or earmarked for public or quasi-public purposes
would be excluded from the housing program for NGC residents. The same policy
of rational and optimal land use can be read in Proclamation No. 248 issued by then President Ramos.
Although the proclamation recognized the rapid increase in the population density in the NGC, it did not
allocate additional property within the NGC for urban poor housing but instead authorized the vertical
development of the same 150 hectares identified previously by Proclamation No. 137 since the distribution
of individual lots would not adequately provide for the housing needs of all the  bona fide residents in the
NGC.

In addition, as provided in Section 4 of R.A. No. 9207, the institutional beneficiaries shall be allocated the
areas actually occupied by them; hence, the portions intended for the institutional beneficiaries is fixed and
cannot be allocated for other non-institutional beneficiaries. Thus, the areas not intended for institutional
beneficiaries would have to be equitably distributed among the bona fide residents of the NGC. In order to
accommodate all qualified residents, a limitation on the area to be awarded to each beneficiary must be
fixed as a necessary consequence.

Second. Petitioners note that while Sec. 3.2 (a.1) of the IRR fixes the selling rate of a lot at  P700.00 per sq.
m., R.A. No. 9207 does not provide for the price. They add Sec. 3.2 (c.1) penalizes a beneficiary who fails
to execute a contract to sell within six (6) months from the approval of the subdivision plan by imposing a
price escalation, while there is no such penalty imposed by R.A. No. 9207. Thus, they conclude that the
assailed provisions conflict with R.A. No. 9207 and should be nullified. The argument deserves scant
consideration.

Where a rule or regulation has a provision not expressly stated or contained in the statute being
implemented, that provision does not necessarily contradict the statute. A legislative rule is in the nature of
subordinate legislation, designed to implement a primary legislation by providing the details thereof.  27 All
that is required is that the regulation should be germane to the objects and purposes of the law; that the
regulation be not in contradiction to but in conformity with the standards prescribed by the law. 28

In Section 5 of R.A. No. 9207, the Committee is granted the power to administer, formulate guidelines and
policies, and implement the disposition of the areas covered by the law. Implicit in this authority and the
statute’s objective of urban poor housing is the power of the Committee to formulate the manner by which
the reserved property may be allocated to the beneficiaries. Under this broad power, the Committee is
mandated to fill in the details such as the qualifications of beneficiaries, the selling price of the lots, the
terms and conditions governing the sale and other key particulars necessary to implement the objective of
the law. These details are purposely omitted from the statute and their determination is left to the discretion
of the Committee because the latter possesses special knowledge and technical expertise over these
matters. 

The Committee’s authority to fix the selling price of the lots may be likened to the rate-fixing power of
administrative agencies. In case of a delegation of rate-fixing power, the only standard which the legislature
is required to prescribe for the guidance of the administrative authority is that the rate be reasonable and
just. However, it has been held that even in the absence of an express requirement as to reasonableness,
this standard may be implied. 29 In this regard, petitioners do not even claim that the selling price of the lots
is unreasonable.

The provision on the price escalation clause as a penalty imposed to a beneficiary who fails to execute a
contract to sell within the prescribed period is also within the Committee’s authority to formulate guidelines
and policies to implement R.A. No. 9207. The Committee has the power to lay down the terms and
conditions governing the disposition of said lots, provided that these are reasonable and just. There is
nothing objectionable about prescribing a period within which the parties must execute the contract to sell.
This condition can ordinarily be found in a contract to sell and is not contrary to law, morals, good customs,
public order, or public policy.

Third. Petitioners also suggest that the adoption of the assailed IRR suffers from a procedural flaw.
According to them the IRR was adopted and concurred in by several representatives of people’s
organizations contrary to the express mandate of R.A. No. 9207 that only two representatives from duly
recognized peoples’ organizations must compose the NGCAC which promulgated the assailed IRR. It is
worth noting that petitioner association is not a duly recognized people’s organization.

In subordinate legislation, as long as the passage of the rule or regulation had the benefit of a hearing, the
procedural due process requirement is deemed complied with. That there is observance of more than the
minimum requirements of due process in the adoption of the questioned IRR is not a ground to invalidate
the same. 

In sum, the petition lacks merit and suffers from procedural deficiencies.

WHEREFORE, the instant petition for prohibition is DISMISSED. Costs against petitioners.

SO ORDERED.

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner, 

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL
MANAGEMENT & DEVELOPMENT CORP., respondents.

G.R. No. 118745 October 6, 1995

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner, 

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL
MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents.

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the underprivileged should not be
carried out to such an extent as deny justice to the landowner whenever truth and justice happen to be on
his side.1 As eloquently stated by Justice Isagani Cruz:

. . . social justice — or any justice for that matter — is for the deserving, whether he be a
millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable
doubt, we are called upon to tilt the balance in favor of the poor, to whom the Constitution
fittingly extends its sympathy and compassion. But never is it justified to prefer the poor
 simply because they are poor, or to reject the rich simply because they are rich, for justice
must always be served, for poor and rich alike, according to the mandate of the law. 2

In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its
resolution.

Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No.
118745) and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of
Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private respondents, the petitions were
ordered consolidated.3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted
private respondents' Petition for Certiorari and Mandamus and ruled as follows:

WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby GRANTED:

a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar as it provides for the
opening of trust accounts in lieu of deposits in cash or bonds;

b) Respondent Landbank is ordered to immediately deposit — not merely "earmark", "reserve" or "deposit

in trust" — with an accessible bank designated by respondent DAR in the names of the following petitioners
the following amounts in cash and in government financial instruments — within the parameters of Sec. 18
(1) of RA 6657:

P 1,455,207.31 Pedro L. Yap

P 135,482.12 Heirs of Emiliano Santiago

P 15,914,127.77 AMADCOR;

c) The DAR-designated bank is ordered to allow the petitioners to withdraw the above-deposited amounts
without prejudice to the final determination of just compensation by the proper authorities; and

d) Respondent DAR is ordered to 1) immediately conduct summary administrative proceedings to

determine the just compensation for the lands of the petitioners giving the petitioners 15 days from
notice within which to submit evidence and to 2) decide the cases within 30 days after they are submitted
for decision.4

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5 denying their
motion for reconsideration.

Private respondents are landowners whose landholdings were acquired by the DAR and subjected to
transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL,
Republic Act No. 6657).
 Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and
payment of compensation for their land pursuant to the provisions of RA 6657, private respondents
filed with this Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory
injunction. Private respondents questioned the validity of DAR Administrative Order No. 6, Series
of 19926 and DAR Administrative Order No. 9, Series of 1990, 7 and sought to compel the DAR to
expedite the pending summary administrative proceedings to finally determine the just
compensation of their properties, and the Landbank to deposit in cash and bonds the amounts
respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents, and
to allow them to withdraw the same.

Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to
respondent Court of Appeals for proper determination and disposition.

As found by respondent court , the following are undisputed:

Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of
petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the names
of farmer beneficiaries collectively, based on the request of the DAR together with a certification of the
Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L.
Yap for the parcels of lands covered by TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof
TC-563 and TC-562, respectively, in the names of listed beneficiaries (ANNEXES "C" & "D") without notice
to petitioner Yap and without complying with the requirement of Section 16 (e) of RA 6657 to deposit the
compensation in cash and Landbank bonds in an accessible bank. (Rollo, p. 6).

The above allegations are not disputed by any of the respondents.

Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of a
parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT No. NT-
60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F. Santiago; that
in November and December 1990, without notice to the petitioners, the Landbank required and the
beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay rentals to the LandBank for
the use of their farmlots equivalent to at least 25% of the net harvest; that on 24 October 1991 the DAR
Regional Director issued an order directing the Landbank to pay the landowner directly or through the
establishment of a trust fund in the amount of P135,482.12, that on 24 February 1992, the Landbank
reserved in trust P135,482.12 in the name of Emiliano F. Santiago. (ANNEX "E"; Rollo, 
p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual Tiller's
Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133).

The above allegations are not disputed by the respondents except that respondent Landbank claims 1) that
it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of Undertaking
(ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU, did not collect any
amount as rental from the substituting beneficiaries (Rollo, p. 99).

Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges — with
respect to its properties located in San Francisco, Quezon — that the properties of AMADCOR in San
Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an area of 209.9215
hectares and another parcel covered by TCT No. 10832 with an area of 163.6189 hectares; that a
summary administrative proceeding to determine compensation of the property covered by TCT No. 34314
was conducted by the DARAB in Quezon City without notice to the landowner; that a decision was
rendered on 24 November 1992 (ANNEX "F") fixing the compensation for the parcel of land covered by
TCT No. 34314 with an area of 209.9215 hectares at P2,768,326.34 and ordering the Landbank to pay or
establish a trust account for said amount in the name of AMADCOR; and that the trust account in the
amount of P2,768,326.34 fixed in the decision was established by adding P1,986,489.73 to the first trust
account established on 19 December 1991 (ANNEX "G"). With respect to petitioner AMADCOR's property
in Tabaco, Albay, it is alleged that the property of AMADCOR in Tabaco, Albay is covered by TCT No. T-
2466 of the Register of Deeds of Albay with an area of 1,629.4578 hectares'; that emancipation patents
were issued covering an area of 701.8999 hectares which were registered on 15 February 1988 but no
action was taken thereafter by the DAR to fix the compensation for said land; that on 21 April 1993, a trust
account in the name of AMADCOR was established in the amount of P12,247,217.83', three notices of
acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9)

The above allegations are not disputed by the respondents except that respondent Landbank claims that
petitioner failed to participate in the DARAB proceedings (land valuation case) despite due notice to it
(Rollo, p. 100).8

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction
and with grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu
of depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land
before it is taken and the titles are cancelled as provided under Section 16(e) of RA 6657. 9 Private
respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust" or
"reserved" the compensation in their names as landowners despite the clear mandate that before taking
possession of the property, the compensation must be deposited in cash or in bonds. 10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making
power pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that the issuance of the
"Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and
the ruling in the case of Association of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary
of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343). 12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in
consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words
"reserved/deposited" were also used.13

On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents.14Petitioners filed a motion for reconsideration but respondent court denied the same. 15

Hence, the instant petitions.

On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging
that the appeal has no merit and is merely intended to delay the finality of the appealed decision. 16 The
Court, however, denied the motion and instead required the respondents to file their comments. 17
Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order
No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in
bonds, and (2) in holding that private respondents are entitled as a matter of right to the immediate and
provisional release of the amounts deposited in trust pending the final resolution of the cases it has filed for
just compensation.

Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of
RA 6657 referred merely to the act of depositing and in no way excluded the opening of a trust account as
a form of deposit. Thus, in opting for the opening of a trust account as the acceptable form of deposit
through Administrative Circular No. 9, petitioner DAR did not commit any grave abuse of discretion since it
merely exercised its power to promulgate rules and regulations in implementing the declared policies of RA
6657.

The contention is untenable. Section 16(e) of RA 6657 provides as follows:

Sec. 16. Procedure for Acquisition of Private Lands —

xxx xxx xxx

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response
from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation
in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land
and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of
the Republic of the Philippines. . . . (emphasis supplied)

It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it
appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to
include a "trust account" among the valid modes of deposit, that should have been made express, or at
least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is
allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of
the term "deposit".

The conclusive effect of administrative construction is not absolute. Action of an administrative agency may
be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or
lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a
legislative enactment.18 In this regard, it must be stressed that the function of promulgating rules and
regulations may be legitimately exercised only for the purpose of carrying the provisions of the law into
effect. The power of administrative agencies is thus confined to implementing the law or putting it into
effect. Corollary to this is that administrative regulations cannot extend 
19
the law and amend a legislative enactment,  for settled is the rule that administrative regulations must be
in harmony with the provisions of the law. And in case there is a discrepancy between the basic law and an
implementing rule or regulation, it is the former that prevails. 20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when
it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf
of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA
6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein,
petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations
cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in
striking down Administrative Circular No. 9 for being null and void.

Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts
deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their
properties, petitioners assert the negative.

The contention is premised on the alleged distinction between the deposit of compensation under Section
16(e) of RA 6657 and payment of final compensation as provided under Section 18 21 of the same law.
According to petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains
only to the final valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the
court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case of
rejection by the landowner because the latter amount is only provisional and intended merely to secure
possession of the property pending final valuation. To further bolster the contention petitioners cite the
following pronouncements in the case of "Association of Small Landowners in the Phil. Inc. vs. Secretary of
Agrarian Reform".22

The last major challenge to CARP is that the landowner is divested of his property even before actual
payment to him in full of just compensation, in contravention of a well-accepted principle of eminent
domain.

xxx xxx xxx

The CARP Law, for its part conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the
compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. No outright change of ownership is contemplated either.

xxx xxx xxx

Hence the argument that the assailed measures violate due process by arbitrarily transferring title before
the land is fully paid for must also be rejected.

Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as
it found that:

. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the
Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian
Reform (175 SCRA 343), to conclude that "payments of the just compensation is not always required to be
made fully in money" — even as the Supreme Court admits in the same case "that the traditional medium
for the payment of just compensation is money and no other" — the Supreme Court in said case did not
abandon the "recognized rule . . . that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation." 23 (Emphasis supplied)
We agree with the observations of respondent court. The ruling in the "Association" case merely
recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing
a deviation from the traditional mode of payment of compensation and recognized payment other than in
cash. It did not, however, dispense with the settled rule that there must be full payment of just
compensation before the title to the expropriated property is transferred.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657
and determination of just compensation under Section 18 is unacceptable. To withhold the right of the
landowners to appropriate the amounts already deposited in their behalf as compensation for their
properties simply because they rejected the DAR's valuation, and notwithstanding that they have already
been deprived of the possession and use of such properties, is an oppressive exercise of eminent domain.
The irresistible expropriation of private respondents' properties was painful enough for them. But petitioner
DAR rubbed it in all the more by withholding that which rightfully belongs to private respondents in
exchange for the taking, under an authority (the "Association" case) that is, however, misplaced. This is
misery twice bestowed on private respondents, which the Court must rectify.

Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and
final compensation under Section 18 for purposes of exercising the landowners' right to appropriate the
same. The immediate effect in both situations is the same, the landowner is deprived of the use and
possession of his property for which he should be fairly and immediately compensated. Fittingly, we
reiterate the cardinal rule that:

. . . within the context of the State's inherent power of eminent domain, just compensation
means not only the correct determination of the amount to be paid to the owner of the land
but also the payment of the land within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered "just" for the property owner is made to
suffer the consequence of being immediately deprived of his land while being made to wait
for a decade or more before actually receiving the amount necessary to cope with his
loss. 24 (Emphasis supplied)

The promulgation of the "Association" decision endeavored to remove all legal obstacles in the
implementation of the Comprehensive Agrarian Reform Program and clear the way for the true freedom of
the farmer.25 But despite this, cases involving its implementation continue to multiply and clog the courts'
dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the farmers from their
bondage will be attained in due time. It must be stressed, however, that in the pursuit of this objective,
vigilance over the rights of the landowners is equally important because social justice cannot be invoked to
trample on the rights of property owners, who under our Constitution and laws are also entitled to
protection.26

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the
appealed decision is AFFIRMED in toto.

SO ORDERED.
G.R. No. 108358 January 20, 1995

COMMISSIONER OF INTERNAL REVENUE, petitioner, 

vs.
THE HON. COURT OF APPEALS, R.O.H. AUTO PRODUCTS PHILIPPINES, INC. and THE HON. COURT
OF TAX APPEALS, respondents.

VITUG, J.:

On 22 August 1986, during the period when the President of the Republic still wielded legislative powers,
Executive Order No. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes, later
amended to include estate and donor's taxes and taxes on business, for the taxable years 1981 to 1985.

Availing itself of the amnesty, respondent R.O.H. Auto Products Philippines, Inc., filed, in October 1986 and
November 1986, its Tax Amnesty Return No. 34-F-00146-41 and Supplemental Tax Amnesty Return No.
34-F-00146-64-B, respectively, and paid the corresponding amnesty taxes due.

Prior to this availment, petitioner Commissioner of Internal Revenue, in a communication received by

private respondent on 13 August 1986, assessed the latter deficiency income and business taxes for its
fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate amount of P1,410,157.71.
The taxpayer wrote back to state that since it had been able to avail itself of the tax amnesty, the deficiency
tax notice should forthwith be cancelled and withdrawn. The request was denied by the Commissioner, in
his letter of 22 November 1988, on the ground that Revenue Memorandum Order No. 4-87, dated 09
February 1987, implementing Executive Order No. 41, had construed the amnesty coverage to include only
assessments issued by the Bureau of Internal Revenue after the promulgation of the executive order on 22
August 1986 and not to assessments theretofore made. The invoked provisions of the memorandum order
read:

TO: All Internal Revenue Officers and Others Concerned:

1.0. To give effect and substance to the immunity provisions of the tax amnesty under Executive Order No.
41, as expanded by Executive Order No. 64, the following instructions are hereby issued:

xxx xxx xxx

1.02. A certification by the Tax Amnesty Implementation Officer of the fact of availment of the said tax
amnesty shall be a sufficient basis for:

xxx xxx xxx

1.02.3. In appropriate cases, the cancellation/withdrawal of assessment notices and letters of demand
issued after August 21, 1986 for the collection of income, business, estate or donor's taxes due during the
same taxable years.1 (Emphasis supplied)
Private respondent appealed the Commissioner's denial to the Court of Tax Appeals. Ruling for the
taxpayer, the tax court said:

Respondent (herein petitioner Commissioner) failed to present any case or law which proves that an
assessment can withstand or negate the force and effects of a tax amnesty. This burden of proof on the
petitioner (herein respondent taxpayer) was created by the clear and express terms of the executive order's
intention — qualified availers of the amnesty may pay an amnesty tax in lieu of said unpaid taxes which are
forgiven (Section 2, Section 5, Executive Order No. 41, as amended). More specifically, the plain provisions
in the statute granting tax amnesty for unpaid taxes for the period January 1, 1981 to December 31, 1985
shifted the burden of proof on respondent to show how the issuance of an assessment before the date of
the promulgation of the executive order could have a reasonable relation with the objective periods of the
amnesty, so as to make petitioner still answerable for a tax liability which, through the statute, should have
been erased with the proper availment of the amnesty.

Additionally, the exceptions enumerated in Section 4 of Executive Order No. 41, as amended, do not
indicate any reference to an assessment or pending investigation aside from one arising from information
furnished by an informer. . . . Thus, we deem that the rule in Revenue Memorandum Order No. 4-87
promulgating that only assessments issued after August 21, 1986 shall be abated by the amnesty is
beyond the contemplation of Executive Order No. 41, as amended. 2

On appeal by the Commissioner to the Court of Appeals, the decision of the tax court was affirmed. The
appellate court further observed:

In the instant case, examining carefully the words used in Executive Order No. 41, as amended, we find
nothing which justifies petitioner Commissioner's ground for denying respondent taxpayer's claim to the
benefits of the amnesty law. Section 4 of the subject law enumerates, in no uncertain terms, taxpayers who
may not avail of the amnesty granted,. . . .

Admittedly, respondent taxpayer does not fall under any of the . . . exceptions. The added exception urged
by petitioner Commissioner based on Revenue Memorandum Order No. 4-87, further restricting the scope
of the amnesty clearly amounts to an act of administrative legislation quite contrary to the mandate of the
law which the regulation ought to implement.

xxx xxx xxx

Lastly, by its very nature, a tax amnesty, being a general pardon or intentional overlooking by the State of
its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law,
partakes of an absolute forgiveness or waiver by the Government of its right to collect what otherwise
would be due it, and in this sense, prejudicial thereto, particularly to give tax evaders, who wish to relent
and are willing to reform a chance to do so and thereby become a part of the new society with a clean
slate. (Republic vs. Intermediate Appellate Court. 196 SCRA 335, 340 [1991] citing Commissioner of
Internal Revenue vs. Botelho Shipping Corp., 20 SCRA 487) To follow [the restrictive application of
Revenue Memorandum Order No. 4-87 pressed by petitioner Commissioner would be to work against
the raison d'etre of E.O. 41, as amended, i.e., to raise government revenues by encouraging taxpayers to
declare their untaxed income and pay the tax due thereon. (E.O. 41, first paragraph)] 3
In this petition for review, the Commissioner raises these related issues:

1. WHETHER OR NOT REVENUE MEMORANDUM ORDER NO. 4-87, PROMULGATED TO

IMPLEMENT E.O. NO. 41, IS VALID;

2. WHETHER OR NOT SAID DEFICIENCY ASSESSMENTS IN QUESTION WERE

EXTINGUISHED BY REASON OR PRIVATE RESPONDENT'S AVAILMENT OF EXECUTIVE
ORDER NO. 41 AS AMENDED BY EXECUTIVE ORDER NO. 64;

3. WHETHER OR NOT PRIVATE RESPONDENT HAS OVERCOME THE PRESUMPTION OF

VALIDITY OF ASSESSMENTS.4

The authority of the Minister of Finance (now the Secretary of Finance), in conjunction with the
Commissioner of Internal Revenue, to promulgate all needful rules and regulations for the effective
enforcement of internal revenue laws cannot be controverted. Neither can it be disputed that such rules and
regulations, as well as administrative opinions and rulings, ordinarily should deserve weight and respect by
the courts. Much more fundamental than either of the above, however, is that all such issuances must not
override, but must remain consistent and in harmony with, the law they seek to apply and implement.
Administrative rules and regulations are intended to carry out, neither to supplant nor to modify, the law.

The real and only issue is whether or not the position taken by the Commissioner coincides with the
meaning and intent of executive Order No. 41.

We agree with both the court of Appeals and court of Tax Appeals that Executive Order No. 41 is quite
explicit and requires hardly anything beyond a simple application of its provisions. It reads:

Sec. 1. Scope of Amnesty. — A one-time tax amnesty covering unpaid income taxes for the years 1981 to
1985 is hereby declared.

Sec. 2. Conditions of the Amnesty. — A taxpayer who wishes to avail himself of the tax amnesty shall, on
or before October 31, 1986;

a) file a sworn statement declaring his net worth as of December 31, 1985;

b) file a certified true copy of his statement declaring his net worth as of December 31, 1980 on record with
the Bureau of Internal Revenue, or if no such record exists, file a statement of said net worth therewith,
subject to verification by the Bureau of Internal Revenue;

c) file a return and pay a tax equivalent to ten per cent (10%) of the increase in net worth from December
31, 1980 to December 31, 1985: Provided, That in no case shall the tax be less than P5,000.00 for
individuals and P10,000.00 for judicial persons.

Sec. 3. Computation of Net Worth. — In computing the net worths referred to in Section 2 hereof, the
following rules shall govern:

a) Non-cash assets shall be valued at acquisition cost.

b) Foreign currencies shall be valued at the rates of exchange prevailing as of the date of the net worth
statement.

Sec. 4. Exceptions. — The following taxpayers may not avail themselves of the amnesty herein granted:

a) Those falling under the provisions of Executive Order Nos. 1, 2 and 14;

b) Those with income tax cases already filed in Court as of the effectivity hereof;

c) Those with criminal cases involving violations of the income tax already filed in court as of the effectivity
filed in court as of the effectivity hereof;

d) Those that have withholding tax liabilities under the National Internal Revenue Code, as amended,
insofar as the said liabilities are concerned;

e) Those with tax cases pending investigation by the Bureau of Internal Revenue as of the effectivity hereof
as a result of information furnished under Section 316 of the National Internal Revenue Code, as amended;

f) Those with pending cases involving unexplained or unlawfully acquired wealth before the
Sandiganbayan;

g) Those liable under Title Seven, Chapter Three (Frauds, Illegal Exactions and Transactions) and Chapter
Four (Malversation of Public Funds and Property) of the Revised Penal Code, as amended.

xxx xxx xxx

Sec. 9. The Minister of finance, upon the recommendation of the Commissioner of Internal Revenue, shall
promulgate the necessary rules and regulations to implement this Executive Order.

xxx xxx xxx

Sec. 11. This Executive Order shall take effect immediately.

DONE in the City of Manila, this 22nd day of August in the year of Our Lord, nineteen hundred and eighty-
six.

The period of the amnesty was later extended to 05 December 1986 from 31 October 1986 by Executive
Order No. 54, dated 04 November 1986, and, its coverage expanded, under Executive Order No. 64, dated
17 November 1986, to include estate and honors taxes and taxes on business.

If, as the Commissioner argues, Executive Order No. 41 had not been intended to include 1981-1985 tax
liabilities already assessed (administratively) prior to 22 August 1986, the law could have simply so
provided in its exclusionary clauses. It did not. The conclusion is unavoidable, and it is that the executive
order has been designed to be in the nature of a general grant of tax amnesty subject only to the
cases specifically excepted by it.
It might not be amiss to recall that the taxable periods covered by the amnesty include the years
immediately preceding the 1986 revolution during which time there had been persistent calls, all too vivid to
be easily forgotten, for civil disobedience, most particularly in the payment of taxes, to the martial law
regime. It should be understandable then that those who ultimately took over the reigns of government
following the successful revolution would promptly provide for abroad, and not a confined, tax amnesty.

Relative to the two other issued raised by the Commissioner, we need only quote from Executive Order No.
41 itself; thus:

Sec. 6. Immunities and Privileges. — Upon full compliance with the conditions of the tax amnesty and the
rules and regulations issued pursuant to this Executive order, the taxpayer shall enjoy the following
immunities and privileges:

a) The taxpayer shall be relieved of any income tax liability on any untaxed income from January 1, 1981 to
December 31, 1985, including increments thereto and penalties on account of the non-payment of the said
tax. Civil, criminal or administrative liability arising from the non-payment of the said tax, which are
actionable under the National Internal Revenue Code, as amended, are likewise deemed extinguished.

b) The taxpayer's tax amnesty declaration shall not be admissible in evidence in all proceedings before
judicial, quasi-judicial or administrative bodies, in which he is a defendant or respondent, and the same
shall not be examined, inquired or looked into by any person, government official, bureau or office.

c) The books of account and other records of the taxpayer for the period from January 1, 1981 to
December 31, 1985 shall not be examined for income tax purposes: Provided, That the Commissioner of
Internal Revenue may authorize in writing the examination of the said books of accounts and other records
to verify the validity or correctness of a claim for grant of any tax refund, tax credit (other than refund on
credit of withheld taxes on wages), tax incentives, and/or exemptions under existing laws.

There is no pretension that the tax amnesty returns and due payments made by the taxpayer did not
conform with the conditions expressed in the amnesty order.

WHEREFORE, the decision of the court of Appeals, sustaining that of the court of Tax Appeals, is hereby
AFFIRMED in toto. No costs.

SO ORDERED.
G.R. No. 103533 December 15, 1998

MANILA JOCKEY CLUB, INC. AND PHILIPPINE RACING CLUB, INC., petitioners, 

vs.
THE COURT OF APPEALS AND PHILIPPINE RACING COMMISSION, respondents.

QUISUMBING, J.:

This is a Petition for Review on Certiorari seeking the reversal of the decision 1 of the Court of Appeals in
CA-G.R. SP No. 25251 dated September 17, 1991 and the resolution 2 dated January 8, 1992, which
denied the motion for reconsideration. At issue here is the control and disposition of "breakages"  3 in
connection with the conduct of horse-racing.

The pertinent facts on record are as follows:

On June 18, 1948, Congress approved Republic Act No. 309, entitled "An Act to Regulate Horse-Racing in
the Philippines." This Act consolidated all existing laws and amended inconsistent provisions relative to
horse racing. It provided for the distribution of gross receipts from the sale of betting tickets, but is silent on
the allocation of so-called "breakages." Thus the practice, according to the petitioners, was to use the
"breakages" for the anti-bookies drive and other sales promotions activities of the horse racing clubs.

On October 23, 1992, petitioners, Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club, Inc. (PRCI),
were granted franchises to operate and maintain race tracks for horse racing in the City of Manila and the
Province of Rizal by virtue of Republic Act Nos. 6631 and 6632, respectively, and allowed to hold horse
races, with bets, on the following dates:

. . . Saturdays, Sundays and official holidays of the year, excluding Thursday and Fridays of the Holy Week,
June twelfth, commonly known as Independence Day, Election Day and December thirtieth, commonly
known as Rizal Da

. . . Saturday, Sundays, and official holiday of the year, except on those official holidays where the law
expressly provides that no horse races are to be held. The grantee may also conduct races on the eve of
any public holiday to start not earlier than five-thirty (5:30) o'clock in the afternoon but not to exceed five
days a year.

Said laws carried provisions on the allocation of "breakages" to beneficiaries as follows:

Provincial or city hospitals 25%

Rehabilitation of drug addicts 25% 50%

For the benefit of Philippine

Amateur Athletes Federation 50% 25%

Charitable institutions 25%

On March 20, 1974, Presidential Decree No. 420 was issued creating the Philippine Racing Commission
(PHILRACOM), giving it exclusive jurisdiction and control over every aspect of the conduct of horse racing,
including the framing and scheduling of races. 6 By virtue of this power, the PHILRACOM authorized the
holding of races on Wednesdays starting on December 22, 1976. 7

In connection with the new schedule of races, petitioners made a joint query regarding the ownership of
breakages accumulated during Wednesday races. In response to the query, PHILRACOM rendered its
opinion in a letter dated September 20, 1978. It declared that the breakages belonged to the racing clubs
concerned, to wit:

We find no further need to dissect the provisions of P.D. 420 to come to a legal conclusion.
As can be clearly seen from the foregoing discussion and based on the established
precedents, there can be no doubt that the breakage of Wednesday races shall belong to
the racing club concerned. 8

Consequently, the petitioners allocated the proceeds of breakages for their own business purpose:

Thereafter, PHILRACOM authorized the holding of races on Thursdays from November 15, 1984 to
December 31, 1984 and on Tuesdays since January 15, 1985 up to the present. These mid-week races are
in addition to those days specifically mentioned in R.A. 6631 and R.A. 6632. Likewise, petition allocated the
breakages from these races for their own uses.

On December 16, 1986 President Corazon Aquino amended certain provisions Sec. 4 of R.A. 8631 and
Sec. 6 of R.A. 6632 through Executive Orders No. 88 and 89. Under these Executive Orders, breakages
were allocated to beneficiaries, as follows

Provincial or city hospitals 25%

Rehabilitation of drug addicts 25% 50%

For the benefit of Philippine

Racing Commission 50% 25%

Charitable institutions 25%

On April 23, 1987, PHILRACOM itself addressed a query to the Office of the President asking which
agency is entitled to dispose of the proceeds of the "breakages" derived from the Tuesday and Wednesday
races.

In a letter dated May 21, 1987, the Office of the President, through then Deputy Executive Secretary
Catalino Macaraig, Jr., replied that "the disposition of the breakages rightfully belongs to PHILRACOM, not
only those derived from the Saturday, Sunday and holiday races, but also from the Tuesday and
Wednesday races in accordance with the distribution scheme prescribed in said Executive Orders". 11
Controversy arose when herein respondent PHILRACOM, sent a series of demand letters to petitioners
MJCI and PRCI, requesting its share in the "breakages" of mid-week-races and proof of remittances to
other legal beneficiaries as provided under the franchise laws. On June 8, 1987, PHILRACOM sent a letter
of demand to petitioners MJCI and PRCI asking them to remit PHILRACOM's share in the "breakages"
derived from the Tuesday, Wednesday and Thursday races in this wise:

x x x           x x x          x x x

Pursuant to Board Resolution dated December 21, 1986, and Executive Order Nos. 88 and 89 series of
1986, and the authority given by the Office of the President dated May 21, 1987, please remit to the
Commission the following:

1) PHILRACOM's share in the breakages derived from Wednesday racing for the period starting December
22, 1976 up to the December 31, 1986.

2) PHILRACOM's share in the breakages derived from Thursday racing for the period starting November
15, 1984 up to December 31, 1984; and

3) PHILRACOM's share in the breakages derived from Tuesday racing for the period starting January 15,
1985 up to December, 1986.

4) Kindly furnish the Commission with the breakdown of all breakages derived from Tuesday, Thursdays
and Wednesdays racing that you have remitted to the legal beneficiaries. 12

On June 16, 1987, petitioners MJCI and PRCI sought reconsideration 13 of the May 21, 1987 opinion of
then Deputy Executive Secretary Macaraig, but the same was denied by the Office of the President in its
letter dated April 11, 1988. 14

On April 25, 1988, PHILRACOM wrote another letter 15 to the petitioners MJCI and PRCI seeking the
remittance of its share in the breakages. Again, on June 13, 1990, PHILRACOM reiterated its previous
demand embodied in its letter of April 25, 1 988. 16

Petitioners ignored said demand. Instead, they filed a Petition for Declaratory Relief before the Regional
Trial Court, Branch 150 of Makati, on the ground that there is a conflict between the previous opinion of
PHILRACOM dated September 20, 1978 and the present position of PHILRACOM, as declared and
affirmed by the Office of the President in its letters dated May 21, 1987 and April 11, 1988. Petitioners
averred that there was an "actual controversy" between the parties, which should be resolved.

On March 11, 1991, the trial court rendered judgment, disposing as follows:

WHEREFORE, and in view of all the foregoing considerations, the Court hereby declares and decides as
follows:

a) Executive Orders Nos. 88 and 89 do not and cannot cover the disposition and allocation of mid-week
races, particularly those authorized to be held during Tuesdays, Wednesdays and those which are not
authorized under Republic Acts 6631 and 6632; and
b) The ownership by the Manila Jockey Club, Inc. and the Philippine Racing Club, Inc. of the breakages
they derive from mid-week races shall not be disturbed, with the reminder that the breakages should be
strictly and wholly utilized for the purpose for which ownership thereof has been vested upon said racing
entities.

SO ORDERED. 17

Dissatisfied, respondent PHILRACOM filed a Petition for Certiorari with prayer for the issuance of a writ of
preliminary injunction before this Court, raising the lone question of whether or not E.O. Nos. 88 and 89
cover breakages derived from the mid-week races. However, we referred the case to the Court of Appeals,
which eventually reversed the decision of the trial court, and ruled as follows:

x x x           x x x          x x x

The decision on the part of PHILRACOM to authorize additional racing days had the effect of widening the
scope of Section 5 of RA 6631 and Section 7 of RA 6632. Consequently, private respondents derive their
privilege to hold races on the designated days not only their franchise acts but also from the order issued
by the PHILRACOM. No provision of law became inconsistent with the passage of the Order granting
additional racing days. Neither was there a special provision set to govern those mid-week races. The
reason is simple. There was no need for any new provisions because there are enough general provisions
to cover them. The provisions on the disposition and allocation of breakages being general in character
apply to breakages derived on any racing day. 18

x x x           x x x          x x x

WHEREFORE, based on the foregoing analysis and interpretation of the laws in question, the judgment of
the trial court is hereby SET ASIDE. Decision is hereby rendered:

1. declaring Section 4 of RA 6631 as amended by E.O. 89 and Section 6 of RA 6632 as amended by E.O.
88 to cover the disposition and allocation of breakages derived on all races conducted by private
respondents on any racing day, whether as provided for under Section 4 of RA 6631 or Section 6 of RA
6632 or as ordered by PHILRACOM in the exercise of its powers under P.D. 420;

2. ordering private respondent to remit to PHILRACOM its share under E.O. 88 and E.O. 89 derived from
races held on Tuesday, Wednesdays, Thursday as authorized by PHILRACOM.

SO ORDERED. 19

Petitioners filed a motion for reconsideration, but it was denied for lack of merit, with respondent Court of
Appeals further declaring that:

x x x           x x x          x x x

In so far as the prospective application of Executive Orders Nos. 88 and 89 is concerned. We have no
disagreement with the respondents. Since PHILRACOM became the beneficiary of the breakages only
upon effectivity of Executive Order Nos. 88 and 89, it is therefore entitled to such breakages from
December 16, 1986 when said Executive Orders were issued. However, we do not concede that
respondents are entitled to breakages prior to December 16, 1986 because it is clear that the applicable
laws from 1976 to December 16, 1986 were R.A. 6631 and R.A. 6632, which specifically apportion the
breakages to specified beneficiaries among which was the PAAF, a government agency. Since
respondents admit that PHILRACOM (Petitioner) was merely placed in lieu of PAAF as beneficiary/recipient
of breakages, then whatever breakages was due to PAAF as one of the beneficiaries under R.A. Nos. 6631
and 6632 accrued to or should belong to PHILRACOM as successor to the defunct PAAF.

Finding the Motion for Reconsideration without merit, and for reasons indicated, the Motion is denied.

SO ORDERED. 20

Consequent to the aforequoted adverse decision, petitioners MJCI and PRCI filed this petition for review
under Rule 45.

The main issue brought by the parties for the Court's resolution is: Who are the rightful beneficiaries of the
breakages derived from mid-week races? This issue also carries an ancillary question: assuming
PHILRACOM is entitled to the mid-week breakages under the law, should the petitioners remit the money
from the time the mid-week races started, or only upon the promulgation of E.O. Nos. 88 and 89?

Petitioners assert that franchise laws should be construed to apply the distribution scheme specifically and
exclusively to the racing days enumerated in Sec. 5 of R.A. 6631, and Sec. 7 of R.A. 6632. They claim that
disposition of breakages under these laws should be limited to races conducted on "all Saturdays,
Sundays, and official holidays of the year, except, on those official holidays where the law expressly
provides that no horse races are to be held", hence, there is no doubt that the breakages of Wednesday
races shall belong to the racing clubs concerned. 21 They even advance the view that "where a statute by
its terms is expressly limited to certain matters, it may not by interpretation or construction be extended to
other matters" 22

However, respondent PHILRACOM contends that R.A. Nos. 6631 and 6632 are laws intended primarily to
grant petitioners their respective franchises to construct, operate, and maintain a race track for horse
racing. 23 When PHILRACOM added mid-week races, the franchises given to the petitioners remained the
same. Logically, what applies to races authorized under Republic Act Nos. 6631 and 6632 should also
apply to races additionally authorized by PHILRACOM, namely mid-week races, because these are general
provisions which apply general rues and procedures governing the operation of the races. Consequently, if
the authorized racing days are extended, these races must therefore be governed by the same rules and
provisions generally provided therein.

We find petitioners' position on the main issue lacking in merit and far from persuasive.

Franchise laws are privileges 24 conferred by the government on corporations to do that "which does not
belong to the citizens of the country generally by common right". 25 As a rule, a franchise springs from
contracts between the sovereign power and the private corporation for purposes of individual advantage as
well as public benefit. 26 Thus, a franchise partakes of a double nature and character. 27 In so far as it
affects or concerns the public, it is public juris and subject to governmental control. 28 The legislature may
prescribe the conditions and terms upon which it may be held, and the duty of grantee to the public
exercising it. 29

As grantees of a franchise, petitioners derive their existence from the same. Petitioners' operations are
governed by all existing rules relative to horse racing provided they are not inconsistent with each other and
could be reasonably harmonized. Therefore, the applicable laws are R.A. 309, as amended, R.A. 6631 and
6632, as amended by E.O. 88 and 89, P.D. 420 and the orders issued PHILRACOM. Consequently, every
statute should be construed in such a way that will harmonize it with existing laws. This principle is
expressed in the legal maxim "interpretare et concordare leges legibus est optimus interpretandi", that is, to
interpret and to do it in such a way as to harmonize laws with laws is the best method of interpretation. 30

A reasonable reading of the horse racing laws favors the determination that the entities enumerated in the
distribution scheme provided under R.A. Nos. 6631 and 6632, as amended by Executive Orders 88 and 89,
are the rightful beneficiaries of breakages from mid-week races. Petitioners should therefore remit the
proceeds of breakages to those benefactors designated by the aforesaid laws.

The holding of horse races on Wednesdays is in addition to the existing schedule of races authorized by
law. Since this new schedule became part of R.A. 6631 and 6632 the set of procedures in the franchise
laws applicable to the conduct of horse racing business must likewise be applicable to Wednesday or other
mid-week races. A fortiori, the granting of the mid-week races does not require another legislative act to
reiterate the manner of allocating the proceeds of betting tickets. Neither does the allocation of breakages
under the same provision need to be isolated to construe another distribution scheme. No law can be
viewed in a condition of isolation or as the beginning of a new legal system. 31 A supplemental law becomes
an addition to the existing statutes, or a section thereof; and its effect is not to change in any way the
provisions of the latter but merely to extend the operation thereof, or give additional power to enforce its
provisions, as the case may be. In enacting a particular statute, legislators are presumed to have full
knowledge and to taken full cognizance of the existing laws on the same subject or those relating thereto.

Proceeding to the subsidiary issue, the period for the remittance of breakages to the beneficiaries should
have commenced from the time PHILRACOM authorized the holding of mid-week races because R.A. Nos.
6631 and 6632 were ready in effect then. The petitioners contend that they cannot be held retroactively
liable to respondent PHILRACOM for breakages prior to the effectivity of E.O. Nos. 88 and 89. They assert
that the real intent behind E.O. Nos. 88 and 89 was to favor the respondent PHILRACOM anew with the
benefits which formerly had accrued in favor of Philippine Amateur Athletic Federation (PAAF). They opine
that since laws operate prospectively unless the legislator intends to give them retroactive effect, the
accrual of these breakages should start on December 16, 1986, the date of effectivity of E.O. Nos. 88 and
89. 32 Now, even if one of the benefactors of breakages, the PAAF, as provided by R.A. 6631 and 6632 had
ceased operation, it is still not proper for the petitioners to presume that they were entitled to PAAF's share.
When the petitioners mistakenly appropriated the breakages for themselves, they became the implied
trustees for those legally entitled to the proceeds. This is in consonance with Article 1456 of the Civil Code,
which provides that:

Art. 1456 — If property is acquired through mistake or fraud, the person obtaining it is, by
force of law, considered a trustee of an implied trust for the benefit of the person from
whom the property comes.
The petitioners should have properly set aside amount for the defunct PAAF, until an alternative beneficiary
was designated, which as subsequently provided for by Executive Order Nos. 88 and 89, is PHILRACOM:

x x x           x x x          x x x

Secs. 2 — All the cash balances and accumulated amounts corresponding to the share of
the Philippine Amateur Athletic Federation/Ministry of Youth and Sports Development,
pursuant to Section 6 of Republic Act No. 6632, not remitted by the Philippine Racing
Club, Inc./Manila Jockey Club Inc., are hereby transferred to the Philippine Racing
Commission to be constituted into a TRUST FUND to be used exclusively for the payment
of additional prizes for races sponsored by the Commission and for necessary outlays and
other expenses relative to horse-breeding activities of the National Stud Farm. . . . . . .
[E.O. No. 88]

x x x           x x x          x x x

Sec. 2. Any provision of law to the contrary notwithstanding, all cash balances and
accumulated amounts corresponding to the share of the Philippine Amateur Athletic
Federation/Ministry of Youth and Sports Development, pursuant to Republic Act No. 6631,
not remitted by the Manila Jockey Club, Inc., are hereby constituted into a TRUST FUND
to be used exclusively for the payment of additional prizes for races sponsored by the
Philippine Racing Commission and for the necessary capital outlays and other expenses
relative to horse-breeding activities of the National Stud Farm. . . . . . . . [E.O. No. 89]

While herein petitioners might have relied on a prior opinion issued by an administrative body, the well-
entrenched principle is that the State could not be estopped by a mistake committed by its officials or
agents. 33 Well-settled also is the rule that the erroneous application of the law by public officers does not
prevent a subsequent correct application of the law. 34 Although there was an initial interpretation of the law
by PHILRACOM, a court of law could not be precluded from setting that interpretation aside if later on it is
shown to be inappropriate.

Moreover, the detrimental consequences of depriving the city hospitals and other institutions of the funds
needed for rehabilitation of drug dependents and other patients are all too obvious. It goes without saying
that the allocation of breakages in favor of said institutions is a policy decision in pursuance of social
development goals worthy of judicial approbation.

Nor could we be oblivious to the reality that horse racing although authorized by law is still a form of
gambling. Gambling is essentially antagonistic to the aims of enhancing national productivity and self-
reliance. 35 For this reason, legislative franchises impose limitations on horse racing and betting. Petitioner's
contention that a gambling franchise is a public contract protected by the Constitutional provision on non-
impairment of contract could not be left unqualified. For as well said in Lim vs. Pacquing: 36

. . . it should be remembered that a franchise is not in the strict sense a simple contract but
rather it is, more importantly, a mere privilege specially in matters which are within the
government's power to regulate and even prohibit through the exercise of the police power.
 Thus, a gambling franchise is always subject to the exercise of police power for the public
welfare. 37

That is why we need to stress anew that a statute which authorizes a gambling activity or business should
be strictly construed, and every reasonable doubt be resolved so as to limit rather than expand the powers
and rights claimed by franchise holders under its authority. 38

WHEREFORE, there being no reversible error, the appealed decision and the resolution of the respondent
Court of Appeals in CA-G.R. SP No. 25251, are hereby AFFIRMED, and the instant petition is hereby
DENIED for lack of merit.

Costs against petitioners.

SO ORDERED.
G.R. No. 157286             June 16, 2006

THE PUBLIC SCHOOLS DISTRICT SUPERVISORS ASSOCIATION (PSDSA), its officers, to wit: DR.
ANILLA A. CALAMBA, President; DR. CARMELITA L. PALABAY, Gen. Vice-President; MS. ESTELITA R.
REYES, Board Secretary; DR. THELMA A. GALANG, Asst. Board Secretary; MR. FERNANDO LAVITA,
Treasurer; MS. LITA DIONISIO, Asst. Treasurer; MS. ROSELILY PADRE, Auditor; MR. ROMAN
CALICDAN, Asst. Auditor; MR. TOMO-AY, MR. OSCAR PEÑAFLORIDA, Bus. Managers; DR.
ANTONETTE ANG, DR. MAGNITA LABRADOR, P.R.O.’S; MR. BONIFACIO MIGUEL (Region I), MR.
JOSE CALAGUI (Region II), DR. REYNALDO SAGUM (Region III), MR. RUBEN PANAHON (Region IV),
MR. OSCAR BARBA (Region V), MS. IRMA GANELA (Region VI), DR. ERLINDA NAPULI (Region VII),
DR. PONCIANO GABIETA (Region VIII), MR. FEDERICO FIDEL (Region IX), MR.EMILIANO V.
RODRIGUEZ (Region X), MS. EDWINA ALAG (Region XI), MR. DOMINADOR ATAM (Region XII), MS.
CONSUELO VELASCO (NCR), MR. VICTORINO AGMATA (CAR), MS. NATIVIDAD SALASAB (ARMM-
CARAGA), All PSDSA Vice-Presidents for their respective Regions: DR. LOLITA CABANAYAN, MR.
CICERO AKLANG, DR. RUSTICO OCAMPO, MR. ROMEO SANTOS, MR. EMMANUEL CAMA, MR.
ROMEO TUMAOB, MR. JOVENCIO MENDOZA, MR. ALEJANDRO BARING, JR., MS. BERNARDITA
APOSTOL, MS. LORETA MACALUDAS, DR. MYRNA LYN MARACON, MS. ELIZABETH SAN DIEGO,
SITH HINDRON DAMMANG, MS. IMMACULADA BRINGAS, and MS. GLORIA DERECHO, all members of
the PSDSA Board of Directors, in their own behalf as current District Supervisors and IN
REPRESENTATION OF ALL DISTRICT SUPERVISORS OF THE DEPARTMENT OF
EDUCATION, Petitioners, 
vs.
HON. EDILBERTO C. DE JESUS, Department Secretary, THE DEPARTMENT OF EDUCATION, and THE
DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.

DECISION

CALLEJO, SR., J.:

This is a Petition for Prohibition with prayer for temporary restraining order and/or preliminary injunction
filed by the Public Schools District Supervisor Association (PSDSA) seeking to declare as unconstitutional
Rule IV, Section 4.3; Rule V, Sections 5.1 and the second paragraph of Section 5.2; and Rule VI, Section
6.2, paragraph 11 of Department of Education Order No. 1, Series of 2003. The petition likewise seeks to
compel, by way of a writ of mandamus, the Department of Education, Culture, and Sports (DECS) and the
Department of Budget and Management (DBM) to upgrade the salary grade level of the district supervisors
from Salary Grade (SG) 19 to SG 24.

The Antecedents

Ever since the Department of Education (DepEd) 1 was founded decades ago, its management had been so
centralized in the Manila office. Schools in the national, regional, and division levels merely followed and
implemented the orders and memoranda issued by the Education Secretary. Due to the evolution of the
learning process and the onset of information technology, there was a need for a radical change in the
governance of the DepEd. Thus, a study on how to improve the management of the Department was
conducted, and one of the proposals was the abolition of the office of the district supervisor.
Then Senator Tessie Aquino-Oreta, the Chairman of the Committee on Education, authored Senate Bill No.
2191, the thrust of which was to change the existing management style and focus on the schools where the
teaching-learning process occurs. The bill was intended to highlight shared governance in the different
levels in the DECS hierarchy and establish authority, accountability, and responsibility for achieving higher
learning outcomes. While the governance of basic education would begin at the national level, the field
offices (regions, divisions, schools, and learning centers) would translate the policy into programs, projects,
and services to fit local needs. 2 The national level was likewise to be tasked to define the roles and
responsibilities of, and provide resources to the field offices which would implement educational programs,
projects, and services in communities they serve. 3 At the forefront would be the DepEd Secretary, vested
with the overall authority and supervision over the operations of the department on the national, regional,
division, and schools district level.4

Republic Act No. 9155, otherwise known as the "Governance of Basic Education Act 2001," became a law
on August 11, 2001, in accordance with Section 27(1), Article VI of the Constitution. Under the law, each
regional office shall have a director, an assistant director, and an office staff for program promotion and
support, planning, administrative and fiscal services. 5 The regional director was given the authority to hire,
place and evaluate all employees in the regional office except for the position of assistant director, 6 as well
as the authority, accountability, and responsibility to determine the organization component of the divisions
and districts, and approve the staffing pattern of all employees therein; 7 evaluate all division
superintendents and assistant division superintendents in the region; 8 and other functions as may be
assigned by the proper authorities.9

A division, on the other hand, is headed by a schools division superintendent with the following
responsibilities, among others: to supervise the operations of all public and private elementary, secondary,
and integrated schools, and learning centers; 10 to hire, place and evaluate all division supervisors and
schools district supervisors as well as all employees in the divisions, both teaching and non-teaching
personnel, including school heads, except for the assistant division superintendent; 11 and perform other
functions as may be assigned by proper authorities. 12

The office of the schools district supervisor has been retained under the law. Each district is headed by a
school district supervisor and an office staff for program promotion. However, the responsibilities of the
schools district supervisor are limited to the following: (1) providing professional and instructional advice
and support to the school heads and teachers/facilitators of schools and learning centers in the district or
cluster thereof; (2) curricula supervision; and (3) performing such other functions as may be assigned by
proper authorities. The schools district supervisors have no administrative, management, control or
supervisory functions over the schools and learning centers within their respective districts. 13

On the school level, an Elementary School Principal (ESP) was designated as school head for all public
elementary schools; and a Secondary School Principal (SSP) for high schools or a cluster thereof. 14 The
ESP and the SSP serve as both instructional leaders and administrative managers with the following
authority, accountability and responsibility:

(7) Administering and managing all personnel, physical, and fiscal resources of the school;

(8) Recommending the staffing complement of the school based on its needs;

(9) Encouraging staff development;

 xxxx

(11) Accepting donations, gifts, bequests, and grants for the purpose of upgrading
teachers’/learning facilitators’ competencies, improving and expanding school facilities, and
providing instructional materials and equipment. Such donations or grants must be reported to the
appropriate district supervisors and division superintendents; and

(12) Performing such other functions as may be assigned by proper authorities. 15

Under Section 14 of the law, the DepEd Secretary is mandated to "promulgate the implementing rules and
regulations within ninety (90) days after the approval of the Act, provided that the principle of shared
governance shall be fully implemented within two (2) years" after such approval.

Before the DepEd could issue the appropriate implementing rules and regulations, petitioner sought the
legal assistance of the Integrated Bar of the Philippines (IBP) National Committee on Legal Aid to make
representations for the resolution of the following administrative issues:

1. Restoration of the functions, duties, responsibilities, benefits, prerogatives, and position level of
Public Schools District Supervisors.

2. Upgrading of Salary Grade level of Public Schools District Supervisors from Salary Grade Level
19 to Salary Grade Level 24 under DBM Circular No. 36, otherwise known as the Compensation
and Position Classification Rules and Regulation. 16

In a Letter dated March 1, 2002 addressed to then DepEd Secretary Raul Roco, the IBP stated that, per its
review of the documents submitted by the PSDSA, it found the latter’s position valid and legal, to wit:

First: The basis for the abolition of the position of District Supervisors under the Attrition Law and DECS
Department Order No. 110, Series of 1991 is no longer valid and rendered moot and academic due to
issuance of DECS Department Order No. 22, Series of 1996 and the passage by Congress of the
Philippines of Republic Act No. 9155, otherwise known as the Basic Education Governance Act of 2000.
Under R.A. 9155, school districts are mandated to be maintained and responsibilities of Public School’s
Districts Supervisors have been clearly defined.

Second: There is a clear case of discrimination of grant of salaries and benefits to District Supervisors
compared to salaries and benefits received by the School Principals – which position is lower in the
hierarchy of positions as prepared by the Department of Education and the Department of Budget and
Management. School Principals and District Supervisors enjoy the same level of Salary Grade even if the
latter position is considered as a promotion and enjoys a higher level of position than that of the position of
School Principals.17

The PSDSA thus requested the DepEd Secretary to call an immediate consultation with the district
supervisors nationwide through a convention, and their valid inputs be considered in formulating the rules
and regulations to be urged by the DepEd. However, the Secretary failed to reply. Thus, the IBP reiterated
the concerns raised by the PSDSA in a Letter 18 to the DepEd dated April 15, 2002.
On January 6, 2003, DepEd Secretary Edilberto C. De Jesus issued DECS Office Order No. 1, which
constitutes the Implementing Rules and Regulations (IRR) of R.A. No. 9155. Sections 4.1 to 4.3, Rule IV of
the IRR provide:

SECTION 4.1. The Schools Division Superintendent. – A division shall consist of a province or city which
shall have a schools division superintendent. There shall be at least one assistant schools division
superintendent and office staff for programs promotion, planning, administrative, fiscal, legal, ancillary, and
other support services.

SECTION 4.2. Authority, Accountability, and Responsibility of the Schools Division Superintendent. –
Consistent with the national educational policies, plans, and standards, the schools division
superintendents shall have authority, accountability, and responsibility for the following:

1) Developing and implementing division education development plans;

2) Planning and managing the effective and efficient performance of all personnel, physical, and
fiscal resources of the division, including professional staff development;

3) Hiring, placing, and evaluating all division supervisors and schools district supervisors as well as
all employees in the division, both teaching and non-teaching personnel, including school heads,
except for the assistant division superintendents;

4) Monitoring the utilization of funds provided by the national government and the local government
units to the schools and learning centers;

5) Ensuring compliance of quality standards for basic education programs and for this purpose
strengthening the role of division supervisors as subject area specialists;

6) Promoting awareness of, and adherence by, all schools and learning centers to accreditation
standards prescribed by the Secretary of Education;

7) Supervising the operations of all public and private elementary, secondary, and integrated
schools, and learning centers; and

8) Performing such other functions as may be assigned by the Secretary and/or Regional Director.

SECTION 4.3. Appointing and Disciplinary Authority of the Schools Division Superintendent. – The schools
district superintendent shall appoint the division supervisors and school district supervisors as well as all
employees in the division, both teaching and non-teaching personnel, including school heads, except for
the assistant schools division superintendent, subject to the civil service laws, rules and regulations, and
the policies and guidelines to be issued by the Secretary of Education for the purpose.

The schools division superintendent shall have disciplinary authority only over the non-teaching personnel
under his jurisdiction.
Such exercise of disciplinary authority by the schools division superintendent over the non-teaching
personnel shall be subject to the civil service laws, rules and regulations, and procedures and guidelines to
be issued by the Secretary of Education relative to this matter.

The Regional Director shall continue exercising disciplinary authority over the teaching personnel insofar as
the latter are covered by specific and exclusive disciplinary provisions under the Magna Carta for Public
School Teachers (R.A. No. 4670).19

Sections 5.1 and 5.2, Rule V of the IRR, in turn, provide:

SECTION 5.1. The Schools District Supervisor. – A school district shall have a school district supervisor
and office staff for program promotion.

The schools district supervisor shall primarily perform staff functions and shall not exercise administrative
supervision over school principals, unless specifically authorized by the proper authorities. The main focus
of his/her functions shall be instructional and curricula supervision aimed at raising academic standards at
the school level.

The schools district supervisor shall be specifically responsible for:

1) Providing professional and instructional advice and support to the school heads and
teachers/facilitators of schools and learning centers in the district or cluster thereof;

2) Curricula supervision; and

3) Performing such other functions as may be assigned by the Secretary, Regional Directors, and
Schools Division Superintendents where they belong.

The schools district supervisor being mentioned in this section shall refer to a public schools district
supervisor.

SECTION 5.2. The School District. – A school district already existing at the time of the passage of this Act
shall be maintained. However, an additional school district may be established by the regional director
based on criteria set by the Secretary and on the recommendation of the schools division superintendent.
For this purpose, the Secretary of Education shall set standards and formulate criteria as basis of the
Regional Directors of the establishment of an additional school district. 20

On March 13, 2003, the PSDSA, the national organization of about 1,800 public school district supervisors
of the DepEd, in behalf of its officers and members, filed the instant petition for prohibition and mandamus,
alleging that:

I. THE ACT OF THE DEPARTMENT OF EDUCATION IN REMOVING PETITIONERS’ ADMINISTRATIVE

SUPERVISION OVER ELEMENTARY SCHOOLS AND ITS PRINCIPALS (SCHOOL HEADS) WITHIN
HIS/HER DISTRICT AND CONVERTING HIS/HER ADMINISTRATIVE FUNCTION TO THAT OF
PERFORMING STAFF FUNCTION FOR THE DIVISION OFFICE PER SECTION 5.1 RULE V OF THE
IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT 9155 (DEPED ORDER NO. 1,
SERIES OF 2003) IS A GROSS VIOLATION OF REPUBLIC ACT 9155 – THE GOVERNANCE OF BASIC
EDUCATION ACT OF 2001.

II. THE IMPLEMENTING RULES AND REGULATION OF REPUBLIC ACT 9155 AS PROMULGATED
UNDER DEPED ORDER NO. 1, SERIES OF 2003 EXPANDED THE LAW AND INCLUDED PROVISIONS
WHICH ARE DIAMETRICALLY OPPOSED TO THE LETTER AND SPIRIT OF THE SUBJECT LAW.

III. THE DOWNGRADING OF SALARY GRADE LEVEL OF THE PUBLIC SCHOOLS DISTRICT
SUPERVISOR OR THE NEGLECT OR REFUSAL OF THE DEPARTMENT OF EDUCATION AND THE
DEPARTMENT OF BUDGET AND MANAGEMENT TO UPGRADE THE SALARY GRADE LEVEL OF
PUBLIC SCHOOLS DISTRICT TO A RESPECTABLE LEVEL OF SALARY GRADE HIGHER THAN THAT
OF THE PRINCIPALS – DESPITE CLEAR INTENTION OF R.A. 9155 TO RETAIN THE POSITION OF
PSDS IN THE HIERARCHY OF ADMINISTRATIVE MANAGERS AND OFFICERS OF THE
DEPARTMENT OF EDUCATION – IS UNCONSTITUTIONAL AND ILLEGAL.21

Petitioners maintain that the questioned provisions of the IRR are invalid because they "extended or
expanded and modified" the provisions of R.A. No. 9155. They argue that the said law should be read in
harmony with other "existing educational laws" which it did not specifically repeal, such as Batas Pambansa
Blg. 232, otherwise known as "The Education Act of 1982," as amended by R.A. No. 7798; R.A. No. 4670,
otherwise known as the "Magna Charta for Public School Teachers"; and R.A. No. 7784 captioned "An Act
to Strengthen Teacher Education in the Philippines by Establishing Centers of Excellence, Creating a
Teacher Education Council for the Purpose, Appropriating Funds Therefore, and for Other Purposes."

Petitioners assert that under Section 7(D) of R.A. No. 9155, the district offices of the DepEd are intended
as field offices where the district supervisors can assist the ESPs and teachers/learning facilitators within
their district as experienced educational managers. Thus, the district supervisors were not divested of the
inherent administrative functions to manage and oversee the schools within their respective districts,
including their subordinates. They emphasize that the law provides an "office staff for program promotion"
in the school districts, which would be of no use if the office has no administrative supervision over schools
within its respective districts.

Petitioners assert that under the IRR, the schools district supervisors primarily perform staff functions and
shall not exercise administrative supervision over school principals, unless specifically authorized by the
proper authorities. Thus, under the IRR, the exercise of administrative supervision over school principals
was made discretionary and subject to the whims and caprices of "the proper authorities." The logical
inference of this provision, petitioners aver, is that the administrative supervisory powers can be withdrawn
from a district supervisor without any reason at all, a provision which has no basis in the enabling law.

Petitioners further contend that the DepEd has no authority to incorporate its plan of downgrading the
position of district supervisor, that is, from being an administrator of a particular district office to a position
performing a staff function, to exercise administrative supervision over the school principals only when
specifically authorized by proper authorities. Petitioners insist that respondent Education Secretary was
focused on removing the level of management in the district office, such that the IRR empower school
heads (principals) to have administrative and instructional supervision of school or cluster of schools, while
supervision of all public and private elementary, secondary, and integrated schools and learning centers
was given to the division office.
Petitioners further insist that respondent Education Secretary failed to consider the fact that R.A. No. 9155
strengthened the district office as a mid-level administrative field office of the DepEd. The law even
mandates to allow the district supervisor to have an office staff for program promotion in the district office.
Apart from the current administrative functions inherent in the district office, DECS Service Manual 2000
vested additional specific functions to the district offices, to provide professional and instructional advice
and support to the school heads and teachers/facilitators of schools and learning centers in the district, as
well as curricula supervision.

Petitioners posit that R.A. No. 9155 did not, in anyway, allow or authorize the reorganization of the entire
DepEd; it never reduced the position, rank, classification, and salary grade level of district supervisors, nor
abolished the district offices which are responsible for the administration and management of elementary
schools within its jurisdiction. It did not remove from the district supervisors the function of administrative
supervision over schools within their respective areas. In fact, petitioners insist, what the law did was to
give the district supervisor additional responsibility of providing professional and instructional advice and
support to the school heads and teachers/facilitators of schools and learning centers in the district or cluster
thereof.

Petitioners point out that under Section 4.3, paragraph (b), Rule IV of the IRR, the schools division
superintendent was given the power to appoint the division supervisors and schools district supervisor and
other employees subject to civil service laws, rules, and regulations, and the policies and guidelines to be
issued by the Secretary of Education for the purpose. On the other hand, the school division superintendent
shall have disciplinary authority only over the non-teaching personnel under his jurisdiction. Such exercise
of disciplinary authority by the schools division superintendent over the non-teaching personnel shall be
subject to civil service laws, rules, and regulations, and procedures and guidelines to be issued by the
Secretary of Education relative to this matter. The regional director shall continue exercising disciplinary
authority over the teaching personnel in so far as the latter are covered by specific and exclusive
disciplinary provisions under the Magna Carta for Public School Teachers (R.A. 4670).

Petitioners posit that this grant of disciplining authority to the regional director for teaching personnel who
commit violations of laws, rules, and regulations is definitely not provided for in R.A. No. 9155. The division
superintendent was given the power not only to hire and appoint the division supervisors, district
supervisors, school heads, or principals as well as employees in the division, both teaching and non-
teaching positions. However, when it comes to disciplining officers and teaching personnel who commit
infractions or violations of law, rules, and regulations of the DepEd, the exercise of such disciplining
authority is lodged in the hands of the regional director. Petitioners point out that the power to hire teachers
is in the hands of the division superintendent; principles of administrative rules and procedure provide that
the authority to hire and appoint carries with it the authority to discipline and fire the hired and appointed
personnel particularly if the law is silent thereon. Since the division superintendent has the authority to hire
teaching personnel within its division, he/she should also take the responsibility of disciplining erring
teachers and employees. If the set-up of placing the power of hiring and power to discipline or fire an errant
personnel is separated or divided between two offices of the DepEd, the proliferation of "palakasan" or
"bata-bata" system will flourish, to the detriment of the public education system and public service.

Petitioners also point out that under Section 7(E)(11) of R.A. No. 9155, school heads are authorized to
accept gifts, donations, bequests, and grants for the purpose of upgrading teacher’s/learning facilitator’s
competencies, improving and expanding school facilities and providing instructional materials and
equipment, which, in turn, shall be reported to the appropriate district supervisors and division
superintendents. However, under Section 6.2(11), Rule VI of the IRR, on the authority, accountability, and
responsibility of school heads, district supervisors were deleted as one of the administrative officers to
whom such reporting is to be made. Petitioners conclude that to the extent that the division superintendents
are not mandated to report donations and grants to district supervisors, the IRR is void.

On their plea for mandamus, petitioners pray that the Court compel the DepEd and the DBM to upgrade
their present salary grade. They claim that the position of an ESP is already classified as SG 21, which is
higher by two grades than that of district supervisors, SG 19. Considering their higher position in the
department’s pecking order, vis-à-vis that of the ESPs, petitioners opine that to rectify the present grade-
level distortion, their salary grade should be upgraded to SG 24. 22

For its part, the Office of the Solicitor General (OSG) avers that a perusal of Section 7(D) of R.A. No. 9155
shows that the district supervisor has limited responsibilities, and that the power to exercise administrative
supervision over the ESPs is not covered by any of those responsibilities. The Education Secretary is the
disciplining authority in the DepEd, with the regional directors acting as the disciplining authority in their
respective regions.

As to petitioners’ gripe that the IRR deleted district supervisors from among those school heads who should
report when "[a]ccepting donations, gifts, bequests, and grants for the purpose of upgrading
teachers’/learning facilitators’ competencies, improving and expanding school facilities, and providing
instructional materials and equipment," the OSG avers that this reportorial function is "directory" and merely
for "convenience."

Anent petitioners’ grievance on their alleged stagnant salary grade level, the OSG points out that the same
is "already provided for under FY 2003 GAA, [thus], petitioners’ complaint against the non-increase of their
SG level is already moot and academic." The OSG also emphasizes that the upgrading of the ESP’s salary
grade over the petitioners is not violative of petitioners’ right to equal protection of the law, since "district
supervisors and ESPs are not similarly situated."

In reply, petitioners contend that the upgrading of the salary grade level of district supervisors to SG 21 is
an admission by the DepEd and by the DBM of the validity of their demand to increase their salary grade to
a respectable SG 24.

The petition is partially granted.

It must be stressed that the power of administrative officials to promulgate rules in the implementation of a
statute is necessarily limited to what is provided for in the legislative enactment. 23 The implementing rules
and regulations of a law cannot extend the law or expand its coverage, as the power to amend or repeal a
statute is vested in the legislature. 24 It bears stressing, however, that administrative bodies are allowed
under their power of subordinate legislation to implement the broad policies laid down in a statute by "filling
in" the details. All that is required is that the regulation be germane to the objectives and purposes of the
law; that the regulation does not contradict but conforms with the standards prescribed by law. 25 Moreover,
as a matter of policy, this Court accords great respect to the decisions and/or actions of administrative
authorities not only because of the doctrine of separation of powers but also for their presumed
knowledgeability and expertise in the enforcement of laws and regulations entrusted to their
jurisdiction.26 The rationale for this rule relates not only to the emergence of the multifarious needs of a
modern or modernizing society and the establishment of diverse administrative agencies for addressing
and satisfying those needs; it also relates to the accumulation of experience and growth of specialized
capabilities by the administrative agency charged with implementing a particular statute. 27

We have reviewed the IRR and find that Section 4.3 of Rule IV, and Sections 5.1 and 5.2 of Rule V are
valid. The provisions merely reiterate and implement the related provisions of R.A. No. 9155. Under the
law, a division superintendent has the authority and responsibility to hire, place, and evaluate all division
supervisors and district supervisors as well as all employees in the division, both teaching and non-
teaching personnel, including school heads. 28 A school head is a person responsible for the administrative
and instructional supervision of the schools or cluster of schools. 29 The division superintendent, on the
other hand, supervises the operation of all public and private elementary, secondary, and integrated
schools and learning centers.30

Administrative supervision means "overseeing or the power or authority of an officer to see that their
subordinate officers perform their duties. If the latter fails or neglects to fulfill them, the former may take
such action or steps as prescribed by law to make them perform their duties." 31

A plain reading of the law will show that the schools district supervisors have no administrative supervision
over the school heads; their responsibility is limited to those enumerated in Section 7(D) of R.A. No. 9155,
to wit:

(1) Providing professional and instructional advice and support to the school heads and
teachers/facilitators of schools and learning centers in the district or cluster thereof;

(2) Curricula supervision; and

(3) Performing such other functions as may be assigned by proper authorities.

As gleaned from the Senate deliberations on Senate Bill No. 2191, the district supervisors were divested of
any administrative supervision over elementary and public high schools. The Senate resolved to vest the
same in the division superintendents, and the Lower House concurred. Senator Rene Cayetano proposed
that the traditional function of the school supervisors of exercising administrative supervision over the
elementary and public high schools be maintained. However, Senator Tessie Aquino-Oreta, the
Chairperson of the Senate Committee on Education and the Sponsor of the Bill, objected to such proposal:

The President:

Why do we not say AND SHALL NOT BE INCLUDED?

Senator Cayetano:

Yes, better yet, Mr. President. I thank the Chair for that amendment.

The President:

All right. Can we approve that? The sponsor accepts the amendment, I assume.
Senator Aquino-Oreta:

Yes, Mr. President.

The President:

Is there any objection from the floor? (Silence) There being none, the amendment is approved.

Senator Cayetano:

Thank you, Mr. President.

In line 17, it ends with the conjunction "and." I would like to propose an amendment by inserting a new
paragraph (b). This is, of course, the duties and responsibilities of schools district supervisors. It is to
SUPERVISE SCHOOL PRINCIPALS IN THE DISTRICT, because right now, this is exactly their job.

Again, the reality is, there are efforts to minimize, if not remove, the principal function of school supervisors,
which is to supervise school principals in the district. I just want it to be there to ensure that their primary
functions remain as such.

Therefore, what appears as paragraph (b) in line 18 will now be subparagraph (c).

The President:

What does the sponsor say?

Senator Aquino-Oreta:

Mr. President, may I just explain. There are two school supervisors. One is for the academic function and
the other is for the administrative function. As such, if these two supervisors will dictate to the principals,
then our thrust in reducing the level of bureaucracy might not be met. Also, the thrust of this governance bill
really is to flesh out the importance of the school as the heart of education here. In that heart, we have the
teacher, the student, and the school head.

What we are trying to do here is to bring to the forefront the school itself. In fact, right now, there is a move
in the DECS to do away with the school supervisor in charge of administrative and leave that function to the
principal. If the principal, the school head will be dictated upon by these two school supervisors, we might
not be able to achieve what we want to do here – putting to the forefront the school itself. Meaning, putting
to the forefront the school head, the teacher, and the student.

Senator Cayetano:

Mr. President, I would like to thank the sponsor for that enlightenment. That is precisely my point.

Not too long ago, I was a speaker before the school supervisors all over the land. One of the points that
they complained about was, in most cases, their job to supervise school principals is now being removed or
have been removed simply because – and I may be inaccurate here – the Japanese government – I know it
is a foreign government that funded a study of the organizational setup of the DECS – has recommended
the abolition of school supervisors.

This is the reason this representation would like to ensure that the traditional function of the school
supervisors, among which is to supervise school principals, remain as such. What is good for the Japanese
education is not necessarily good for the Philippines. This representation knows that this is precisely one of
the complaints of the school supervisors.

The lady sponsor admitted that, indeed, there is an effort to phase out the school supervisors. That is
precisely my point, Mr. President. I do not want the school supervisors to be phased out simply because a
foreign government which funded the study of our education has suggested it.

The President:

What does the sponsor say?

Senator Aquino-Oreta:

Mr. President, actually, it is not Japanese. It is an ADB proposal to the DECS. The DECS had a study
made on how to improve the management order of the DECS. That was one of the proposals. They gave
three proposals. One of them was to take out the school supervisors.

But precisely, Mr. President, we are not doing that, we are not taking them out. What we are saying is for
the school supervisor to focus on the curriculum because in the administration of the affairs of the school,
we are saying that the principal knows best how to administer or how to run the school better. And so, we
are saying here that school supervisors will be there contrary to the view of that ADB study. We will
maintain them, but the focus of the school supervisors will be on the curriculum of the schools.

Senator Cayetano:

Mr. President, again I thank the lady senator. But again let us look at who supervisors of schools are.
Supervisors of schools once upon a time were all school principals. They rose from the ranks, that is why
they are fully aware of the administrative as well as the instructional capability of the principals now who are
under them. To remove their right to supervise, – now it is the ADB, I am correct, the lady senator is correct
because as I said I was not sure – to remove this traditional function would really render the supervisors
practically without anything to do. That is why they are now being justified that henceforth there will be no
principals that will be promoted as school supervisors because when the school supervisors reach the age
of retirement and retire, no principals shall be promoted to that level. But these school supervisors now, Mr.
President, were once upon a time in their professional lives principals, and they know best how the schools
should be run – administratively and instructionally. That is the reason for that, Mr. President.

The President:

What does the sponsor say?

Senator Cayetano:

So, may I ask the sponsor to accept this, Mr. President.

Senator Aquino-Oreta:

Mr. President, what was the amendment?

Senator Cayetano:

To insert a new paragraph, paragraph (b) in line 18, which states: SUPERVISE SCHOOL PRINCIPALS IN
THE DISTRICT.

The President:

May I suggest, THE SUPERVISION OF SCHOOL PRINCIPALS IN THE DISTRICT, because –

Senator Cayetano:

Yes, Mr. President.

The President:

– the antecedent for that is, "The schools district supervisor shall be responsible for."

Senator Cayetano:

That is right, Mr. President. Supervision, yes.

The President:

What does the sponsor say?

Senator Aquino-Oreta:

Mr. President, may I have one minute?

SUSPENSION OF SESSION

Senator Tatad:

Mr. President, I move that we suspend the session for one minute.

The President:

Is there any objection? (Silence) There being none, the session is suspended for one minute.
It was 5:33 p.m.

RESUMPTION OF SESSION

At 5:43 p.m., the session was resumed.

The President:

The session is resumed.

SUSPENSION OF CONSIDERATION OF S. NO. 2191

Senator Tatad:

Mr. President, we are still trying to find a way out of these conflicting points of view on the role of the
supervisor. To allow the parties to have a little more time to work on this, I move that we suspend
consideration of Senate Bill No. 2191. (Underscoring supplied)32

When the session resumed, Senator Cayetano no longer pursued his proposed amendment, and moved
instead that the same be amended to read "Curricula Supervision." The Senate approved the proposal of
the Senator:

The President:

The session is resumed. Senator Cayetano is recognized.

CAYETANO AMENDMENT

Senator Cayetano:

Thank you, Mr. President.

With the permission of the lady senator, after consulting her and the Majority Leader, I would like to
propose an amendment by rewording the original amendment I was proposing last night.  The reworded
proposed amendment would be like this: CURRICULA SUPERVISION.

The President:

That would be on what page?

Senator Cayetano:

That would be on page 10, line 17, as a new paragraph (b).

The President:
And how will it read?

Senator Cayetano:

CURRICULA SUPERVISION.

The President:

Just that?

Senator Cayetano:

Just that, Mr. President.

Senator Tatad:

Put a semicolon (;).

Senator Cayetano:

And because of that, line 18 which is paragraph (b), should now be paragraph (c).

The President:

What does the sponsor say?

Senator Aquino-Oreta:

The amendment is accepted, Mr. President. (Underscoring supplied)33

Thus, under R.A. No. 9155, administrative supervision over school heads is not one of those
responsibilities conferred on district supervisors.

It is a settled rule of statutory construction that the express mention of one person, thing, act, or
consequence excludes all others. This rule is expressed in the familiar maxim expressio unius est exclusio
alterius. Where a statute, by its terms, is expressly limited to certain matters, it may not, by interpretation or
construction, be extended to others. The rule proceeds from the premise that the legislature would not have
made specified enumerations in a statute had the intention been not to restrict its meaning and to confine
its terms to those expressly mentioned.34

It is not surprising that Senator Aquino-Oreta maintained her position that district supervisors should not
have administrative control or even supervision over ESPs and SSPs. As early as 1990, the DECS had
adopted the policy that, effective January 1, 1991, the positions of district supervisors and division
supervisors would be gradually phased out by not filling-up these positions as they become vacant. 35 On
September 17, 1991, then DECS Secretary Isidro Cariño issued DECS Order No. 110, Series of 1991,
declaring that, to foster better considerations and articulation of progress in the elementary level, all
elementary school principals shall report directly to the school division superintendents. In his Order dated
June 22, 1994, then DECS Secretary Armand V. Fabella declared that DECS Order No. 110 shall remain in
effect, with the recommendation that, in order to facilitate the phase-out of district supervisor positions,
incumbent district supervisors were encouraged to transfer to vacant division supervisor positions, provided
they meet the qualification standards for such positions. 36 For his part, in his DECS Order No. 22, Series of
1996, DECS Secretary Ricardo T. Gloria restored the district supervisor positions but only on a selective
basis and subject to the following guidelines:

a) Schools superintendents, with the concurrence/approval of their regional directors, may have the
option to restore the position in selected districts after a careful evaluation of need. For this
purpose, the number of schools and their geographical location and distance for effective
monitoring, the availability of regular transportation, urban-rural setting, etc., should be considered
in the decision.

b) The role of the district supervisor as an instructional leader and resource for teachers, rather
than merely as an administrative supervisor, should be emphasized in their functions and duties.

c) In the event of restoration and appointment of the position in a particular district, the school
superintendent shall ensure that the system of field supervision previous to the issuance of DECS
Orders No. 110, s. 1991 and No. 41, s. 1994 shall, likewise, be restored. Correspondingly, the
designation of coordinating principals in affected districts shall be withdrawn.

d) Should a division office opt not to restore some or all district supervisor positions, the funds for
such positions may be used to create new positions or upgrade existing positions, subject to the
approval of the Department of Budget and Management.

e) Considering that a number of vacated district supervisor positions in some divisions may have
been converted to other positions and/or otherwise phased out since 1991, appointments of district
supervisors shall be issued by regional directors only upon verification from the Department of
Budget and Management that the said position may be filled.

It is enjoined that regional directors and schools superintendents shall exert special effort to ensure that the
implementation of this Order shall be harmonious and conducive to field supervision. 37

Under DECS Order No. 36, Series of 1998 issued by DECS Secretary Erlinda C. Pefianco, the positions of
district supervisors were restored to their original status as a supervisory level in the DECS administrative
hierarchy subject to the following guidelines:

1.1 The positions of Education and District Supervisors are hereby restored to their original status as a
supervisory level in the DECS administrative hierarchy, subject to the following guidelines:

1.1.1 The functions of a district supervisor as an instructional leader and resource person for
teachers should be emphasized.

In the event of restoration and appointment of public schools district supervisor, the designation of the
coordinating principal shall be withdrawn.
Appointment of district supervisors shall be issued by regional directors only upon verification from the
Department of Budget and Management that the positions still exist since a number of vacated district
supervisor positions in some divisions may have been converted to other positions and/or otherwise
phased out since 1991.38

However, as already stated, the Senate resolved to maintain the positions of district supervisors but limited
their responsibilities only to those enumerated in Section 7(D) of R.A. No. 9155 to conform to the basic
thrust and objectives of the law. Far from strengthening the office of the district supervisors as a mid-head
field office of the DepEd, the law limited the authority and responsibility attached to such position.

While it is true that the district supervisor is given a support staff for program promotion, it cannot thereby
be implied that he/she likewise has administrative supervision over ESPs and SSPs. Such a construction
has no basis in law and in fact. Indeed, such a construction of the statute defeats the very purpose of the
law.

It is a basic precept that the intent of the legislature is the controlling factor in the interpretation of the
statute. The particular words, clauses, and phrases should not be studied as detached and isolated
expression, but the whole and every part of the statute must be considered in fixing the meaning of any of
its parts and in order to produce a harmonious whole. 39

Besides, Congress enumerated the duties and responsibilities of a district supervisor. Congress would not
have made specific enumerations in a statute if it had the intention not to restrict or limit its meaning and
confine its terms only to those expressly enumerated. Courts may not, in the guise of interpretation, enlarge
the scope of a statute and include situations not provided nor intended by Congress. 40

The submission of the OSG, that the schools district supervisors have the administrative supervision over
school heads, is more in accord with the law, to wit:

Section 7 of RA 9155, on School District Level, pertinently provides that "a school district shall have a
school district supervisor and an office staff for program promotion," and that the schools district supervisor
shall be responsible for: (1) "(p)roviding professional and instructional advice and support to the school
heads and teachers/facilitators of schools and learning centers in the district [or] cluster thereof;" (2)
"(c)urricula supervision;" and, (3) "(p)erforming such other functions as may be assigned by the proper
authorities."

A perusal of Section 7 shows that the District Supervisor has limited responsibilities, and that the power to
exercise administrative supervision over the ESPs is not covered by responsibility nos. 1 and 2. Neither is
that power covered by the directive that the District Supervisor shall have an office staff for program
promotion. The only logical conclusion, therefore, that can be derived from the aforesaid enumeration of
responsibilities is that the District Supervisor may only exercise administrative supervision over ESPs when
such function is assigned by proper authorities. And, since the DepEd Secretary specifically declared
through the IRR of RA 9155, that the District Supervisor shall not exercise administrative supervision over
the ESPs, unless otherwise authorized, petitioners cannot complain against the said declaration. On this
score, it is settled that the intent of the statute is the law (Philippine National Bank v. Office of the President,
252 SCRA 5 [1996]). In the absence of legislative intent to the contrary, words and phrases used in a
statute should be given their plain, ordinary and common usage meaning (Mustang Lumber, Inc. v. Court of
Appeals, 257 SCRA 430 [1996]).
Needless to say, Section 7, on Division Level, further provides that the School Division Superintendent
shall have authority, accountability and responsibility for, among others, "(s)upervising the operation of all
public and private elementary, secondary and integrated schools, and learning centers." To claim,
therefore, that the District Supervisor has administrative supervision over the ESPs would also violate the
above-quoted provision.41

The Court likewise declares that the last paragraph of Section 4.3 of the IRR, stating that the regional
director shall continue exercising disciplinary authority over the teaching personnel insofar as the latter are
covered by specific and exclusive disciplinary provisions under R.A. No. 4670 ("Magna Carta for Public
School Teachers") does not contravene R.A. No. 9155. Indeed, the IRR merely reiterates the DECS Rules
of Procedure, DECS Order No. 33, issued on March 30, 1999 by the DepEd Secretary, and R.A. No. 4670
which was approved on June 18, 1966, and pursuant to Section 7, Chapter II, Book IV of the 1987
Administrative Code, which provides that the DepEd Secretary is empowered to 

a. Promulgate rules and regulations necessary to carry out department objectives, policies,
functions, plans, programs, and projects; and

b. Promulgate administrative issuances necessary for the efficient administration of the offices
under the Secretary and for execution of the laws relative thereto.

Additionally, the IRR was issued by the DepEd Secretary pursuant to Section 7(A)(1) of R.A. No. 9155,
which mandates that the Secretary formulate national educational policies and enhance the employment
status, professional competence, welfare, and working conditions of all the DepEd personnel. 42

We agree that R.A. No. 9155 does not provide who has disciplinary authority over the teaching personnel
of the DepEd. However, under Section 3, Chapter III of DECS Order No. 33, Series of 1999, otherwise
known as the 1999 DECS Rules of Procedure, the disciplining authority in the DECS is the DepEd
Secretary, with the regional directors acting as such in their respective regions except those appointed by
the President.43

The officers and employees referred to in the Rules of Procedure include teachers who, under R.A. No.
4670, shall mean:

x x x all persons engaged in classroom teaching, in any level of instruction, on full-time basis, including
guidance counselors, school librarians, industrial arts, or vocational instructors, and all other persons
performing supervisory and/or administrative functions in all schools, colleges and universities operated by
the Government or its political subdivisions; but shall not include school nurses, school physicians, school
dentists, and other school employees.

A division superintendent of schools is not a disciplining authority over teachers, whether under R.A. No.
4670 or under the DECS Rules of Procedure. In fact, under Section 2, Chapter VII of such Rules of
Procedure, a division superintendent is a chairperson of the investigating committee over formal complaints
filed against such teachers:

a) When the respondent is an elementary or secondary school teacher, head teacher, principal, district
supervisor/chair/coordinator or Education Supervisor I –
 (1) The schools division superintendent or his or her duly authorized representative, as
chairperson;

(2) The duly authorized representative of the school, district, or division teacher’s organization, as
member; and

(3) The division supervisor for elementary or secondary education where the respondent belongs,
as member.

The foregoing rule is based on Section 9 of R.A. No. 4670 which reads:

Sec. 9. Administrative Charges. Administrative charges against a teacher shall be heard initially by a
committee composed of the corresponding School Superintendent of the Division or a duly authorized
representative who should, at least, have the rank of a division supervisor, where the teacher belongs, as
chairman, a representative of the local or, in its absence, any existing provincial or national teacher’s
organization and a supervisor of the Division, the last two to be designated by the Director of Public
Schools. The committee shall submit its findings and recommendations to the Director of Public Schools
within thirty days from the termination of the hearings: Provided, however, That where the school
superintendent is the complainant or an interested party, all the members of the committee shall be
appointed by the Secretary of Education.

Anent the issue on reporting of acceptance of donations, Section 7(E)(11) of R.A. No. 9155 provides:

(11) Accepting donations, gifts, bequests, and grants for the purpose of upgrading teachers’/learning
facilitators’ competencies, improving and expanding school facilities, and providing instructional materials
and equipment. Such donations or grants must be reported to the appropriate district supervisors and
division superintendents. (emphasis supplied)

However, Section 6.2(11), Rule VI of the IRR provides that:

(11) Accepting donations, gifts, bequests, and grants in accordance with existing laws and policy of the
Department for the purpose of upgrading teachers’/learning facilitators’ competencies, improving and
expanding school facilities, and providing instructional materials and equipment. Such donations or grants
must be reported to the division superintendents. (emphasis supplied)

We agree with petitioners’ contention that, under the law, donations and grants must be reported to the
appropriate district supervisors and not only to the division superintendents. The use in the law of the word
"must" is an expression of the mandatory nature of the reporting of donations and grants to district
supervisors. The reason for the provision is that such grants and donations which are intended to upgrade
teachings/learning facilitators’ competencies, improve and expand school facilities, and provide
instructional materials and equipment will assist the school district supervisors in the performance of their
duties and responsibilities under Section 7(D) of R.A. No. 9155, and submit appropriate recommendations
to the proper administrative officers.
On petitioner’s plaint of the failure of respondents to upgrade their salary grade level to at most SG 21, and
for the issuance of the writ of mandamus mandating respondents to increase their salary grade from SG 19
to 24, the same is premature. 

There is no showing in the petition that, before filing their petition, petitioners sought an adjustment of level
of their salary grade from SG 19 to SG 21 before respondents or the Civil Service Commission. Section 17
of Presidential Decree No. 985, as amended by Section 14 of R.A. No. 6758, otherwise known as the
Salary Standardization Law, provides:

Sec. 17. Powers and Functions. – The Budget Commission (now Department of Budget and Management),
principally through the OCPC (now CPCB, Compensation and Position Classification Board) shall, in
addition to those provided under other Sections of this Decree, have the following powers and functions:

a. Administer the compensation and position classification system established herein and revise it as
necessary;

xxxx

f. Certify classification actions and changes in class or grade of positions whenever the facts warrant, such
certification to be binding on administrative, certifying, payroll, disbursing, accounting and auditing officers
of the national government and government-owned or controlled corporations and financial institutions.

Sections 10 and 11 of R.A. No. 9155 provide:

SEC. 10. The Secretary of Education and the Secretary of Budget and Management shall, within ninety
(90) days from the approval of this Act, jointly promulgate the guidelines on the allocation, distribution, and
utilization of resources provided by the national government for the field offices, taking into consideration
the uniqueness of the working conditions of the teaching service.

The Secretary of the Department of Education shall ensure that resources appropriated for the field offices
are adequate and that resources for school personnel, school desks, and textbooks and other instructional
materials intended are allocated directly and released immediately by the Department of Budget and
Management to said offices.

SEC. 11. The Secretary of the Department of Education, subject to civil service laws and regulations, shall
issue appropriate personnel policy rules and regulations that will best meet the requirements of the
teaching profession taking into consideration the uniqueness of the working conditions of the teaching
service.

And insofar as the salary system for teaching positions is concerned, Section 14 provides:

SEC. 14. The Salary System for Teaching Position. – The salary grade of a teacher shall be determined in
accordance with the following:

a. The Teachers’ Preparation Pay Schedule shall be prepared by the Commission in consultation
with the Department of Education and Culture. Under this system, the teacher's academic or
 educational preparation, teaching experience in both private and public schools, and extra-
curricular activities for professional growth, shall be considered in pursuance of the principle of
'equal pay for equal training and experience.'

xxxx

d. The Budget Commission, in coordination and consultation with the Department of Education and
Culture and the Civil Service Commission may, when future needs require, modify, change or
otherwise improve on the salary system herein established for the teaching and closely related
occupations, any change that may be made as provided herein shall become part of the
implementing rules of this Decree to be issued by the Budget Commission upon prior approval by
the President.

Moreover, the issue of whether or not respondents should be compelled to adjust upwards the salary grade
of petitioners to SG 21 has become moot and academic, because, on November 3, 2003, the DepEd and
the DBM issued Joint Circular No. 1, Series of 2003 containing the guidelines in the implementation of the
Salary Upgrading for District and Education Supervisors, to wit:

4.0 GUIDELINES

4.1 To maintain the previous salary grade relationships under RA No. 6758 among the PSDS and
ES I, on the one hand, and Elementary School Principal (ESP) IV and Secondary School Principal
(SSP) II, on the other hand, and to preserve the consistency in the salary grade relationships of
said positions, the following are hereby authorized:

4.1.1 Upgrading of the PSDS and ES I positions from SG-19 to SG-20 in July 2003 and to
SG-21 in July 2004;

4.1.2 Upgrading of the ES II positions by two (2) salary grades from SG-20 to SG-21 in
July 2003 and to SG-22 in July 2004;

4.1.3 A one-step salary adjustment to incumbents of ES III positions starting July 2003 and
another one-step salary adjustment starting July 2004;

4.1.4 A one-step salary adjustment to incumbents of CES positions starting July 2003 and
another one-step salary adjustment starting July 2004.

4.2 Attached herewith is Annex A containing the summary of the guidelines for the salary
upgrading of positions authorized herein.

5.0 SALARY RULES

5.1 For purposes of the salary upgrading herein authorized, the basic salary of the employee
concerned shall be adjusted as follows:
 5.1.1 Effective July 1, 2003 – at the same salary step of his assigned salary grade as of
June 30, 2003 (Illustrative Example A) adopting the Salary Schedule prescribed under
National Budget Circular (NBC) No. 474 (Annex B);

5.1.2 Effective July 1, 2004 – at the same salary step of his assigned salary grade as of
June 30, 2004 (Illustrative Example A) adopting the Salary Schedule prescribed under
National Budget Circular (NBC) No. 474 (Annex B).

5.2 The transition allowance as defined in 3.2 being received by the PSDS and ES, if any, shall be
considered as advance entitlement of the salary increase herein authorized. (Illustrative Examples
B and C)

5.3 No step adjustment shall be granted to incumbents of positions whose salary already falls at or
exceeds the maximum step (eighth step) of the salary grade allocation of their positions.
(Illustrative Example D)

5.4 The herein salary increases shall be effected through the issuance of a Notice of Salary
Adjustment (NOSA) by the duly authorized official. (Annex C)

6.0 FUNDING SOURCE

The amounts necessary to implement the salary adjustments authorized herein shall be charged against
the Nationwide lump sum appropriation for the purpose amounting to fifty million pesos (P50,000,000) in
the DepEd’s budget in RA 9206, the CY 2003 General Appropriations Act. For CY 2004, the same shall be
charged against the lump sum appropriation for the purpose that may be included in the 2004 budget.

7.0 POST-AUDIT

Any salary adjustment paid under this Circular shall be subject to post-audit by the DBM – ROs concerned.
Any payments thereof which are not in accordance herewith shall be adjusted accordingly.

8.0 CONTRIBUTIONS

The salary adjustments authorized herein are subject to the mandatory requirements for life and retirement
premiums, and health insurance premiums.

9.0 SAVING CLAUSE

Conflicts arising from the implementation of the provisions of this Circular shall be resolved by the
Department of Education, upon prior consultation with the Department of Budget and Management.

10.0 EFFECTIVITY

This Circular Letter shall take effect on July 1, 2003.

IN VIEW OF ALL THE FOREGOING, the petition for prohibition is PARTIALLY GRANTED. Joint Circular
No. 1, Series of 2003 is declared valid, except Section 6.2(11), Rule VI thereof which provides that
"donations or grants shall be reported only to the division superintendents." Such donations or grants must
also be reported to the appropriate school district supervisors, as mandated by Republic Act No. 9155.
Petitioners’ prayer for the issuance of a writ of mandamus is DENIED for lack of merit. No costs.

SO ORDERED.
EN BANC

G.R. No. 132601. October 12, 1998

LEO ECHEGARAY y PILO, Petitioner, v. THE SECRETARY OF JUSTICE and THE DIRECTOR OF THE

BUREAU OF CORRECTIONS, THE EXECUTIVE JUDGE OF THE REGIONAL TRIAL COURT OF
QUEZON CITY AND THE PRESIDING JUDGE OF REGIONAL TRIAL COURT OF QUEZON CITY,
BRANCH 104, Respondents. 

DECISION

PER CURIAM:

On June 25, 1996, this Court affirmed 1 the conviction of petitioner Leo Echegaray y Pilo for the crime of
rape of the 10 year-old daughter of his common-law spouse and the imposition upon him of the death
penalty for the said crime.

Petitioner duly filed a Motion for Reconsideration raising mainly factual issues, and on its heels, a
Supplemental Motion for Reconsideration raising for the first time the issue of the constitutionality of
Republic Act No. 76592 (the death penalty law) and the imposition of the death penalty for the crime of
rape.

On February 7, 1998, this Court denied 3 petitioner's Motion for Reconsideration and Supplemental Motion
for Reconsideration with a finding that Congress duly complied with the requirements for the reimposition of
the death penalty and therefore the death penalty law is not unconstitutional.

In the meantime, Congress had seen it fit to change the mode of execution of the death penalty from
electrocution to lethal injection, 4 and passed Republic Act No. 8177, AN ACT DESIGNATING DEATH BY
LETHAL INJECTION AS THE METHOD OF CARRYING OUT CAPITAL PUNISHMENT, AMENDING FOR
THE PURPOSE ARTICLE 81 OF THE REVISED PENAL CODE, AS AMENDED BY SECTION 24 OF
REPUBLIC ACT NO. 7659.5Pursuant to the provisions of said law, the Secretary of Justice promulgated the
Rules and Regulations to Implement Republic Act No. 8177 ("implementing rules") 6 and directed the
Director of the Bureau of Corrections to prepare the Lethal Injection Manual. 7cräläwvirtualibräry

On March 2, 1998, petitioner filed a Petition 8 for Prohibition, Injunction and/or Temporary Restraining Order
to enjoin respondents Secretary of Justice and Director of the Bureau of Prisons from carrying out the
execution by lethal injection of petitioner under R.A. No. 8177 and its implementing rules as these are
unconstitutional and void for being: (a) cruel, degrading and inhuman punishment per se as well as by
reason of its being (b) arbitrary, unreasonable and a violation of due process, (c) a violation of the
Philippines' obligations under international covenants, (d) an undue delegation of legislative power by
Congress, (e) an unlawful exercise by respondent Secretary of the power to legislate, and (f) an unlawful
delegation of delegated powers by the Secretary of Justice to respondent Director.

On March 3, 1998, Petitioner, through counsel, filed a Motion for Leave of Court 9 to Amend and
Supplement Petition with the Amended and Supplemental Petition 10 attached thereto, invoking the
additional ground of violation of equal protection, and impleading the Executive Judge of the Regional Trial
Court of Quezon City and the Presiding Judge of the Regional Trial Court, Branch 104, in order to enjoin
said public respondents from acting under the questioned rules by setting a date for petitioner's execution.

On March 3, 1998, the Court resolved, without giving due course to the petition, to require the respondents
to COMMENT thereon within a non-extendible period of ten (10) days from notice, and directed the parties
"to MAINTAIN the status quoprevailing at the time of the filing of this petition."

On March 10, 1998, the Court granted the Motion for Leave of Court to Amend and Supplement Petition,
and required respondents to COMMENT thereon within ten (10) days from notice.

On March 16, 1998, petitioner filed a Very Urgent Motion (1) To clarify  Status Quo Order, and (2) For the
Issuance of a Temporary Restraining Order expressly enjoining public respondents from taking any action
to carry out petitioner's execution until the petition is resolved.

On March 16, 1998, the Office of the Solicitor General 11 filed a Comment (On the Petition and the Amended
Supplemental Petition)12 stating that (1) this Court has already upheld the constitutionality of the Death
Penalty Law, and has repeatedly declared that the death penalty is not cruel, unjust, excessive or unusual
punishment; (2) execution by lethal injection, as authorized under R.A. No. 8177 and the questioned rules,
is constitutional, lethal injection being the most modern, more humane, more economical, safer and easier
to apply (than electrocution or the gas chamber); (3) the International Covenant on Civil and Political
Rights does not expressly or impliedly prohibit the imposition of the death penalty; (4) R.A. No. 8177
properly delegated legislative power to respondent Director; and that (5) R.A. No. 8177 confers the power
to promulgate the implementing rules to the Secretary of Justice, Secretary of Health and the Bureau of
Corrections.

On March 17, 1998, the Court required the petitioner to file a REPLY thereto within a non-extendible period
of ten days from notice.

On March 25, 1998, the Commission on Human Rights 13filed a Motion for Leave of Court to Intervene
and/or Appear as Amicus Curiae14 with the attached Petition to Intervene and/or Appear as Amicus
Curiae15 alleging that the death penalty imposed under R.A. No. 7659 which is to be implemented by R.A.
No. 8177 is cruel, degrading and outside the limits of civil society standards, and further invoking (a) Article
II, Section 11 of the Constitution which provides: "The State values the dignity of every human person and
guarantees full respect for human rights."; (b) Article III of the Universal Declaration of Human Rightswhich
states that "Everyone has the right to life, liberty and security of person," and Article V thereof, which states
that "No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment ."; (c)
The International Covenant on Civil and Political Rights, in particular, Article 6 thereof, and the Second
Optional Protocol to the International Covenant on Civil and Political Rights Aiming At The Abolition of the
Death Penalty; (d) Amnesty International statistics showing that as of October 1996, 58 countries have
abolished the death penalty for all crimes, 15 countries have abolished the death penalty for ordinary
crimes, and 26 countries are abolitionists de facto, which means that they have retained the death penalty
for ordinary crimes but are considered abolitionists in practice that they have not executed anyone during
the past ten (10) years or more, or in that they have made an international commitment not to carry out
executions, for a total of 99 countries which are total abolitionists in law or practice, and 95 countries as
retentionists;16 and (e) Pope John Paul II's encyclical, "Evangelium Vitae." In a Resolution dated April 3,
1998, the Court duly noted the motion.
On March 27, 1998, petitioner filed a Reply 17 stating that (1) this Court is not barred from exercising judicial
review over the death penalty per se, the death penalty for rape and lethal injection as a mode of carrying
out the death penalty; (2) capital punishment is a cruel, degrading and inhuman punishment; (3) lethal
injection is cruel, degrading and inhuman punishment, and that being the "most modern" does not make it
less cruel or more humane, and that the Solicitor General's "aesthetic" criteria is short-sighted, and that the
lethal injection is not risk free nor is it easier to implement; and (4) the death penalty violates
the International Covenant on Civil and Political Rights considering that the Philippines participated in the
deliberations of and voted for the Second Optional Protocol.

After deliberating on the pleadings, the Court gave due course to the petition, which it now resolves on the
merits.

In the Amended and Supplemental Petition, petitioner assails the constitutionality of the mode of carrying
out his death sentence by lethal injection on the following grounds: 18

I.

DEATH BY LETHAL INJECTION IS UNCONSTITUTIONAL FOR BEING A CRUEL, DEGRADING AND

INHUMAN PUNISHMENT.

II.

THE DEATH PENALTY VIOLATES THE INTERNATIONAL COVENANT ON CIVIL AND POLITICAL
RIGHTS, WHICH IS PART OF THE LAW OF THE LAND.

III.

LETHAL INJECTION, AS AUTHORIZED UNDER REPUBLIC ACT NO. 8177 AND THE QUESTIONED
RULES, IS UNCONSTITUTIONAL BECAUSE IT IS AN UNNECESSARY AND WANTON INFLICTION OF
PAIN ON A PERSON AND IS, THUS, A CRUEL, DEGRADING, AND INHUMAN PUNISHMENT.

IV.

REPUBLIC ACT NO. 8177 UNDULY DELEGATES LEGISLATIVE POWER TO RESPONDENT

DIRECTOR.

V.

RESPONDENT SECRETARY UNLAWFULLY DELEGATED THE LEGISLATIVE POWERS DELEGATED

TO HIM UNDER REPUBLIC ACT NO. 8177 TO RESPONDENT DIRECTOR.

VI.

RESPONDENT SECRETARY EXCEEDED THE AUTHORITY DELEGATED TO HIM UNDER REPUBLIC

ACT NO. 8177 AND UNLAWFULLY USURPED THE POWER TO LEGISLATE IN PROMULGATING THE
QUESTIONED RULES.
VII.

SECTION 17 OF THE QUESTIONED RULES IS UNCONSTITUTIONAL FOR BEING DISCRIMINATORY

AS WELL AS FOR BEING AN INVALID EXERCISE BY RESPONDENT SECRETARY OF THE POWER
TO LEGISLATE.

VIII.

INJUCTION MUST ISSUE TO PREVENT IRREPARABLE DAMAGE AND INJURY TO PETITIONER'S

RIGHTS BY REASON OF THE EXISTENCE, OPERATION AND IMPLEMENTATION OF AN
UNCONSTITUTIONAL STATUTE AND EQUALLY INVALID AND IMPLEMENTING RULES.

Concisely put, petitioner argues that R.A. No. 8177 and its implementing rules do not pass constitutional
muster for: (a) violation of the constitutional proscription against cruel, degrading or inhuman punishment,
(b) violation of our international treaty obligations, (c) being an undue delegation of legislative power, and
(d) being discriminatory.

The Court shall now proceed to discuss these issues in seriatim.

I. LETHAL INJECTION, NOT CRUEL, DEGRADING OR INHUMAN PUNISHMENT UNDER SECTION 19,
ARTICLE III OF THE 1987 CONSTITUTION.

The main challenge to R.A. 8177 and its implementing rules is anchored on Article III, Section 19 (1) of the
1987 Constitution which proscribes the imposition of "cruel, degrading or inhuman" punishment. "The
prohibition in the Philippine Bill against cruel and unusual punishments is an Anglo-Saxon safeguard
against governmental oppression of the subject, which made its first appearance in the reign of William and
Mary of England in 'An Act declaring the rights and liberties of the subject, and settling the succession of
the crown,' passed in the year 1689. It has been incorporated into the Constitution of the United States (of
America) and into most constitutions of the various States in substantially the same language as that used
in the original statute. The exact language of the Constitution of the United States is used in the Philippine
Bill."19 "The counterpart of Section 19 (1) in the 1935 Constitution reads: 'Excessive fines shall not be
imposed, nor cruel and inhuman punishment inflicted.' xxx In the 1973 Constitution the phrase became
'cruel or unusual punishment.' The Bill of Rights Committee of the 1986 Constitutional Commission read the
1973 modification as prohibiting 'unusual' punishment even if not 'cruel.' It was thus seen as an obstacle to
experimentation in penology. Consequently, the Committee reported out the present text which prohibits
'cruel, degrading or inhuman punishment' as more consonant with the meaning desired and with
jurisprudence on the subject." 20cräläwvirtualibräry

Petitioner contends that death by lethal injection constitutes cruel, degrading and inhuman punishment
considering that (1) R.A. No. 8177 fails to provide for the drugs to be used in carrying out lethal injection,
the dosage for each drug to be administered, and the procedure in administering said drug/s into the
accused; (2) R.A. No. 8177 and its implementing rules are uncertain as to the date of the execution, time of
notification, the court which will fix the date of execution, which uncertainties cause the greatest pain and
suffering for the convict; and (3) the possibility of "botched executions" or mistakes in administering the
drugs renders lethal injection inherently cruel.
Before the Court proceeds any further, a brief explanation of the process of administering lethal injection is
in order.

In lethal injection, the condemned inmate is strapped on a hospital gurney and wheeled into the execution
room. A trained technician inserts a needle into a vein in the inmate's arm and begins an intravenous flow
of saline solution. At the warden's signal, a lethal combination of drugs is injected into the intravenous line.
The deadly concoction typically includes three drugs: (1) a nonlethal dose of sodium thiopenthotal, a sleep
inducing barbiturate; (2) lethal doses of pancuronium bromide, a drug that paralyzes the muscles; and (3)
potassium chloride, which stops the heart within seconds. The first two drugs are commonly used during
surgery to put the patient to sleep and relax muscles; the third is used in heart bypass
surgery.21cräläwvirtualibräry

Now it is well-settled in jurisprudence that the death penalty per se is not a cruel, degrading or inhuman
punishment.22 In the oft-cited case of Harden v. Director of Prisons,23 this Court held that "[p]unishments are
cruel when they involve torture or a lingering death; but the punishment of death is not cruel, within the
meaning of that word as used in the constitution. It implies there something inhuman and barbarous,
something more than the mere extinguishment of life." Would the lack in particularity then as to the details
involved in the execution by lethal injection render said law "cruel, degrading or inhuman"? The Court
believes not. For reasons hereafter discussed, the implementing details of R.A. No. 8177 are matters which
are properly left to the competence and expertise of administrative officials. 24cräläwvirtualibräry

Petitioner contends that Sec. 16 25 of R.A. No. 8177 is uncertain as to which "court" will fix the time and date
of execution, and the date of execution and time of notification of the death convict. As petitioner already
knows, the "court" which designates the date of execution is the trial court which convicted the accused,
that is, after this Court has reviewed the entire records of the case 26 and has affirmed the judgment of the
lower court. Thereupon, the procedure is that the "judgment is entered fifteen (15) days after its
promulgation, and 10 days thereafter, the records are remanded to the court below including a certified
copy of the judgment for execution. 27Neither is there any uncertainty as to the date of execution nor the
time of notification. As to the date of execution, Section 15 of the implementing rules must be read in
conjunction with the last sentence of Section 1 of R.A. No. 8177 which provides that the death sentence
shall be carried out "not earlier than one (1) year nor later then eighteen (18) months from the time the
judgment imposing the death penalty became final and executory, without prejudice to the exercise by the
President of his executive clemency powers at all times." Hence, the death convict is in effect assured of
eighteen (18) months from the time the judgment imposing the death penalty became final and
executory28 wherein he can seek executive clemency 29 and attend to all his temporal and spiritual
affairs.30cräläwvirtualibräry

Petitioner further contends that the infliction of "wanton pain" in case of possible complications in the
intravenous injection, considering and as petitioner claims, that respondent Director is an untrained and
untested person insofar as the choice and administration of lethal injection is concerned, renders lethal
injection a cruel, degrading and inhuman punishment. Such supposition is highly speculative and
unsubstantiated.

First. Petitioner has neither alleged nor presented evidence that lethal injection required the expertise only
of phlebotomists and not trained personnel and that the drugs to be administered are unsafe or
ineffective.31Petitioner simply cites situations in the United States wherein execution by lethal injection
allegedly resulted in prolonged and agonizing death for the convict, 32 without any other evidence
whatsoever.

Second. Petitioner overlooked Section 1, third paragraph of R.A. No. 8177 which requires that all personnel
involved in the execution proceedings should be trained prior to the performance of such task. We must
presume that the public officials entrusted with the implementation of the death penalty (by lethal injection)
will carefully avoid inflicting cruel punishment. 33cräläwvirtualibräry

Third. Any infliction of pain in lethal injection is merely incidental in carrying out the execution of death
penalty and does not fall within the constitutional proscription against cruel, degrading and inhuman
punishment. "In a limited sense, anything is cruel which is calculated to give pain or distress, and since
punishment imports pain or suffering to the convict, it may be said that all punishments are cruel. But of
course the Constitution does not mean that crime, for this reason, is to go unpunished." 34 The cruelty
against which the Constitution protects a convicted man is cruelty inherent in the method of punishment,
not the necessary suffering involved in any method employed to extinguish life humanely. 35Numerous
federal and state courts of the United States have been asked to review whether lethal injections constitute
cruel and unusual punishment. No court has found lethal injections to implicate prisoner's Eighth
Amendment rights. In fact, most courts that have addressed the issue state in one or two sentences that
lethal injection clearly is a constitutional form of execution. 36 A few jurisdictions, however, have addressed
the merits of the Eighth Amendment claims. Without exception, these courts have found that lethal injection
does not constitute cruel and unusual punishment. After reviewing the medical evidence that indicates that
improper doses or improper administration of the drugs causes severe pain and that prison officials tend to
have little training in the administration of the drugs, the courts have found that the few minutes of pain
does not rise to a constitutional violation. 37chanroblesvirtuallawlibrary

What is cruel and unusual "is not fastened to the obsolete but may acquire meaning as public opinion
becomes enlightened by a humane justice" and "must draw its meaning from the evolving standards of
decency that mark the progress of a maturing society." 38 Indeed, "[o]ther (U.S.) courts have focused on
'standards of decency' finding that the widespread use of lethal injections indicates that it comports with
contemporary norms."39 the primary indicator of society's standard of decency with regard to capital
punishment is the response of the country's legislatures to the sanction. 40Hence, for as long as the death
penalty remains in our statute books and meets the most stringent requirements provided by the
Constitution, we must confine our inquiry to the legality of R.A. No. 8177, whose constitutionality we duly
sustain in the face of petitioner's challenge. We find that the legislature's substitution of the mode of
carrying out the death penalty from electrocution to lethal injection infringes no constitutional rights of
petitioner herein.

II. REIMPOSITION OF THE DEATH PENALTY LAW DOES NOT VIOLATE INTERNATIONAL TREATY
OBLIGATIONS

Petitioner assiduously argues that the reimposition of the death penalty law violates our international
obligations, in particular, the International Covenant on Civil And Political Rights, which was adopted by the
General Assembly of the United Nations on December 16, 1996, signed and ratified by the Philippines on
December 19, 1966 and October 23, 1986, 41respectively.

Article 6 of the International Covenant on Civil and Political Rights provides:

"1. Every human being has the inherent right to life. This right shall be protected by law. No one shall be
arbitrarily deprived of his life.

2. In countries which have not abolished the death penalty, sentence of death may be imposed only for
the most serious crimes in accordance with the law in force at the time of the commission of the crime and
not contrary to the provisions of the present Covenant and to the Convention on the Prevention and
Punishment of the Crime of Genocide. This penalty can only be carried out pursuant to a final judgment
rendered by a competent court." (emphasis supplied)

3. When deprivation of life constitutes the crime of genocide, it is understood that nothing in this article shall
authorize any State Party to the present Covenant to derogate in any way from any obligation assumed
under the provisions of the Convention on the Prevention and Punishment of the Crime of Genocide.

4. Anyone sentenced to death shall have the right to seek pardon or commutation of the sentence.
Amnesty, pardon or commutation of the sentence of death may be granted in all-cases.

5. Sentence of death shall not be imposed for crimes committed by persons below eighteen years of age
and shall not be carried out on pregnant women.

6. Nothing in this article shall be invoked to delay or to prevent the abolition of capital punishment by any
State. Party to the present Covenant."

Indisputably, Article 6 of the Covenant enshrines the individual's right to life. Nevertheless, Article 6 (2) of
the Covenant explicitly recognizes that capital punishment is an allowable limitation on the right to life,
subject to the limitation that it be imposed for the "most serious crimes". Pursuant to Article 28 of
the Covenant, a Human Rights Committee was established and under Article 40 of the  Covenant, State
parties to the Covenant are required to submit an initial report to the Committee on the measures they have
adopted which give effect to the rights recognized within the Covenant and on the progress made on the
enjoyment of those rights one year of its entry into force for the State Party concerned and thereafter, after
five years. On July 27, 1982, the Human Rights Committee issued General Comment No. 6interpreting
Article 6 of the Covenant stating that "(while) it follows from Article 6 (2) to (6) that State parties are not
obliged to abolish the death penalty totally, they are obliged to limit its use and, in particular, to abolish it for
other than the 'most serious crimes.' Accordingly, they ought to consider reviewing their criminal laws in this
light and, in any event, are obliged to restrict the application of the death penalty to the most serious
crimes.' The article strongly suggests (pars. 2 (2) and (6) that abolition is desirable. xxx The Committee is
of the opinion that the expression 'most serious crimes' must be read restrictively to mean that the death
penalty should be a quite exceptional measure." Further, the Safeguards Guaranteeing Protection of Those
Facing the Death Penalty 42 adopted by the Economic and Social Council of the United Nations declare that
the ambit of the term 'most serious crimes' should not go beyond intentional crimes, with lethal or other
extremely grave consequences.

The Optional Protocol to the International Covenant on Civil and Political Rights was adopted by the
General Assembly of the United Nations on December 16, 1966, and signed and ratified by the Philippines
on December 19, 1966 and August 22, 1989, 43respectively. The Optional Protocol provides that the Human
Rights Committee shall receive and consider communications from individuals claiming to be victims of
violations of any of the rights set forth in the Covenant.
On the other hand, the Second Optional Protocol to the International Covenant on Civil and Political Rights,
Aiming at the Abolition of the Death Penaltywas adopted by the General Assembly on December 15,
1989.The Philippines neither signed nor ratified said document.44Evidently, petitioner's assertion of our
obligation under the Second Optional Protocol is misplaced.

III. THERE IS NO UNDUE DELEGATION OF LEGISLATIVE POWER IN R.A. NO. 8177 TO THE
SECRETARY OF JUSTICE AND THE DIRECTOR OF BUREAU OF CORRECTIONS, BUT SECTION 19
OF THE RULES AND REGULATIONS TO IMPLEMENT R.A. NO. 8177 IS INVALID.

The separation of powers is a fundamental principle in our system of government. It obtains not through
express provision but by actual division in the framing of our Constitution. Each department of the
government has exclusive cognizance of matters placed within its jurisdiction, and is supreme within its
own sphere.45 Corollary to the doctrine of separation of powers is the principle of non-delegation of powers.
"The rule is that what has been delegated, cannot be delegated or as expressed in a Latin maxim:  potestas
delegata non delegaripotest."46 The recognized exceptions to the rule are as follows:

(1) Delegation of tariff powers to the President under Section 28 (2) of Article VI of the Constitution;

(2) Delegation of emergency powers to the President under Section 23 (2) of Article VI of the Constitution;

(3) Delegation to the people at large;

(4) Delegation to local governments; and

(5) Delegation to administrative bodies. 47cräläwvirtualibräry

Empowering the Secretary of Justice in conjunction with the Secretary of Health and the Director of the
Bureau of Corrections, to promulgate rules and regulations on the subject of lethal injection is a form of
delegation of legislative authority to administrative bodies.

The reason for delegation of authority to administrative agencies is the increasing complexity of the task of
government requiring expertise as well as the growing inability of the legislature to cope directly with the
myriad problems demanding its attention. The growth of society has ramified its activities and created
peculiar and sophisticated problems that the legislature cannot be expected to attend to by itself.
Specialization even in legislation has become necessary. On many problems involving day-to-day
undertakings, the legislature may not have the needed competence to provide the required direct and
efficacious, not to say, specific solutions. These solutions may, however, be expected from its delegates,
who are supposed to be experts in the particular fields assigned to them. 48cräläwvirtualibräry

Although Congress may delegate to another branch of the Government the power to fill in the details in the
execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of
separation of powers, that said law: (a) be complete in itself - it must set forth therein the policy to be
executed, carried out or implemented by the delegate 49 - and (b) fix a standard - the limits of which are
sufficiently determinate or determinable - to which the delegate must conform in the performance of his
functions.50cräläwvirtualibräry
Considering the scope and the definiteness of R.A. No. 8177, which changed the mode of carrying out the
death penalty, the Court finds that the law sufficiently describes what job must be done, who is to do it, and
what is the scope of his authority. 51cräläwvirtualibräry

R.A. No. 8177 likewise provides the standards which define the legislative policy, mark its limits, map out its
boundaries, and specify the public agencies which will apply it. it indicates the circumstances under which
the legislative purpose may be carried out. 52 R.A. No. 8177 specifically requires that "[t]he death sentence
shall be executed under the authority of the Director of the Bureau of Corrections, endeavoring so far as
possible to mitigate the sufferings of the person under the sentence during the lethal injection as well as
during the proceedings prior to the execution."53 Further, "[t]he Director of the Bureau of Corrections shall
take steps to ensure that the lethal injection to be administered is sufficient to cause the instantaneous
death of the convict."54 The legislature also mandated that "all personnel involved in the administration of
lethal injection shall be trained prior to the performance of such task."55The Court cannot see that any
useful purpose would be served by requiring greater detail. 56 The question raised is not the definition of
what constitutes a criminal offense,57 but the mode of carrying out the penalty already imposed by the
Courts. In this sense, R.A. No. 8177 is sufficiently definite and the exercise of discretion by the
administrative officials concerned is, to use the words of Justice Benjamin Cardozo, canalized within banks
that keep it from overflowing.

Thus, the Court finds that the existence of an area for exercise of discretion by the Secretary of Justice and
the Director of the Bureau of Corrections under delegated legislative power is proper where standards are
formulated for the guidance and the exercise of limited discretion, which though general, are capable of
reasonable application.58cräläwvirtualibräry

It is also noteworthy that Article 81 of the Revised Penal Code which originally provided for the death
penalty by electrocution was not subjected to attack on the ground that it failed to provide for details such
as the kind of chair to be used, the amount of voltage, volume of amperage or place of attachment of
electrodes on the death convict. Hence, petitioner's analogous argument with respect to lethal injection
must fail.

A careful reading of R.A. No. 8177 would show that there is no undue delegation of legislative power from
the Secretary of Justice to the Director of the Bureau of Corrections for the simple reason that under the
Administrative Code of 1987, the Bureau of Corrections is a mere constituent unit of the Department of
Justice.59 Further, the Department of Justice is tasked, among others, to take charge of the "administration
of the correctional system." 60Hence, the import of the phraseology of the law is that the Secretary of Justice
should supervise the Director of the Bureau of Corrections in promulgating the Lethal Injection Manual, in
consultation with the Department of Health. 61cräläwvirtualibräry

However, the Rules and Regulations to Implement Republic Act No. 8177 suffer serious flaws that could
not be overlooked. To begin with, something basic appears missing in Section 19 of the implementing rules
which provides:

"SEC. 19. EXECUTION PROCEDURE. - Details of the procedure prior to, during and after
administering the lethal injection shall be set forth in a manual to be prepared by the Director. The
manual shall contain details of, among others, the sequence of events before and after execution;
procedures in setting up the intravenous line; the administration of the lethal drugs; the
pronouncement of death; and the removal of the intravenous system.
 Said manual shall be confidential and its distribution shall be limited to authorized prison
personnel."

Thus, the Courts finds in the first paragraph of Section 19 of the implementing rules a veritable vacuum.
The Secretary of Justice has practically abdicated the power to promulgate the manual on the execution
procedure to the Director of the Bureau of Corrections, by not providing for a mode of review and approval
thereof. Being a mere constituent unit of the Department of Justice, the Bureau of Corrections could not
promulgate a manual that would not bear the imprimatur of the administrative superior, the Secretary of
Justice as the rule-making authority under R.A. No. 8177. Such apparent abdication of departmental
responsibility renders the said paragraph invalid.

As to the second paragraph of section 19, the Court finds the requirement of confidentiality of the contents
of the manual even with respect to the convict unduly suppressive. It sees no legal impediment for the
convict, should he so desire, to obtain a copy of the manual. The contents of the manual are matters of
public concern "which the public may want to know, either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an ordinary citizen." 62Section 7 of Article III of the
1987 Constitution provides:

"SEC. 7. The right of the people to information on matters of public concern shall be recognized.
Access to official records, and to documents and papers pertaining to official acts, transaction, or
decisions, as well as to government research data used as a basis for policy development, shall be
afforded the citizen, subject to such limitation as may be provided by law."

The incorporation in the Constitution of a guarantee of access to information of public concern is a

recognition of the essentiality of the free flow of ideas and information in a democracy. 63 In the same way
that free discussion enables members of society to cope with the exigencies of their time, 64access to
information of general interest aids the people in democratic decision-making 65 by giving them a better
perspective of the vital issues confronting the nation. 66cräläwvirtualibräry

D. SECTION 17 OF THE RULES AND REGULATIONS TO IMPLEMENT R.A. NO. 8177 IS INVALID FOR
BEING DISCRIMINATORY AND CONTRARY TO LAW.

Even more seriously flawed than Section 19 is Section of the implementing rules which provides:

"SEC. 17. SUSPENSION OF THE EXECUTION OF THE DEATH SENTENCE. Execution by

lethal injection shall not be inflicted upon a woman within the three years next following the date of the
sentence or while she is pregnant, nor upon any person over seventy (70) years of age. In this latter
case, the death penalty shall be commuted to the penalty of reclusion perpetuawith the accessory
penalties provided in Article 40 of the Revised Penal Code."

Petitioner contends that Section 17 is unconstitutional for being discriminatory as well as for being an
invalid exercise of the power to legislate by respondent Secretary. Petitioner insists that Section 17 amends
the instances when lethal injection may be suspended, without an express amendment of Article 83 of the
Revised Penal Code, as amended by section 25 of R.A. No. 7659.

Article 83 f the Revised Penal Code, as amended by section 25 of R.A. No. 7659 now reads as follows:
 "ART. 83, Suspension of the execution of the death sentence.- The death sentence shall not be
inflicted upon a woman while she is pregnant or within one (1) year after delivery, nor upon any
person over seventy years of age. In this last case, the death sentence shall be commuted to the
penalty of reclusion perpetua with the accessory penalty provided in Article 40. x x x".

On this point, the Courts finds petitioner's contention impressed with merit. While Article 83 of the Revised
Penal Code, as amended by Section 25 of Republic Act No. 7659, suspends the implementation of the
death penalty while a woman is pregnant or within one (1) year after delivery, Section 17 of the
implementing rules omitsthe one (1) year period following delivery as an instance when the death sentence
is suspended, and adds a ground for suspension of sentence no longer found under Article 83 of the
Revised Penal Code as amended, which is the three-year reprieve after a woman is sentenced.
This addition is, in petitioner's view, tantamount to a gender-based discrimination sans statutory basis,
while the omission is an impermissible contravention of the applicable law.

Being merely an implementing rule, Section 17 aforecited must not override, but instead remain consistent
and in harmony with the law it seeks to apply and implement. Administrative rules and regulations are
intended to carry out, neither to supplant nor to modify, the law." 67 An administrative agency cannot amend
an act of Congress.68 In case of discrepancy between a provision of statute and a rule or regulation issued
to implement said statute, the statutory provision prevails. Since the cited clause in Section 17 which
suspends the execution of a woman within the three (3) years next following the date of sentence finds no
supports in Article 83 of the Revised Penal Code as amended, perforce Section 17 must be declared
invalid.

One member of the Court voted to declare Republic Act. No. 8177 as unconstitutional insofar as it
delegates the power to make rules over the same subject matter to two persons (the Secretary of Justice
and the Director of the Bureau of Corrections) and constitutes a violation of the international norm towards
the abolition of the death penalty. One member of the Court, consistent with his view in  People v.
Echegaray, 267 SCRA 682, 734-758 (1997) that the death penalty law (Republic Act. No. 7659) is itself
unconstitutional, believes that Republic Act No. 8177 which provides for the means of carrying out the
death sentence, is likewise unconstitutional. Two other members of the court concurred in the aforesaid
Separate Opinions in that the death penalty law (Republic Act No. 7659) together with the assailed statute
(Republic Act No. 8177) are unconstitutional. In sum, four members of the Court voted to declare Republic
Act. No. 8177 as unconstitutional. These Separate Opinions are hereto annexed, infra.

WHEREFORE, the petition is DENIED insofar as petitioner seeks to declare the assailed statute (Republic
Act No. 8177) as unconstitutional; but GRANTED insofar as Sections 17 and 19 of the Rules and
Regulations to Implement Republic Act No. 8177 are concerned, which are hereby
declared INVALID because (a) Section 17 contravenes Article 83 of the Revised Penal Code, as amended
by Section 25 of the Republic Act No. 7659; and (b) Section 19 fails to provide for review and approval of
the Lethal Injection Manual by the Secretary of Justice, and unjustifiably makes the manual confidential,
hence unavailable to interested parties including the accused/convict and counsel. Respondents are
hereby enjoined from enforcing and implementing Republic Act No. 8177 until the aforesaid Sections 17
and 19 of the Rules and Regulations to Implement Republic Act No. 8177 are appropriately amended,
revised and/or corrected in accordance with this Decision.

NO COSTS.
SO ORDERED.
G.R. No. 109023 August 12, 1998

RODOLFO S. DE JESUS, EDELWINA DE PARUNGAO, VENUS M. POZON AND other similarly situated
personnel of the LOCAL WATER UTILITIES ADMINISTRATION (LWUA), petitioners, 
vs.
COMMISSION ON AUDIT AND LEONARDO L. JAMORALIN in his capacity as COA-LWUA Corporate
Auditor, respondents.

PURISIMA, J.:

The pivotal issue raised in this petition is whether or not the petitioners are entitled to the payment of
honoraria which they were receiving prior to the effectivity of Rep. Act 6758.

Petitioners are employees of the Local Water Utilities Administration (LWUA). Prior to July 1, 1989, they
were receiving honoraria as designated members of the LWUA Board Secretariat and the Pre-Qualification,
Bids and Awards Committee.

On July 1, 1989, Republic Act No. 6758 (Rep. Act 6758), entitled "An Act Prescribing A Revised
Compensation and Position Classification System in the Government and For Other Purposes", took effect.
Section 12 of said law provides for the consolidation of allowances and additional compensation into
standardized salary rates. Certain additional compensations, however, were exempted from consolidation.

Sec. 12. Rep. Act 6758, reads —

Sec. 12. — Consolidation of Allowances and Compensation. — Allowances, except for

representation and transportation allowances; clothing and laundry allowances;
subsistense allowance of marine officers and crew on board government vessels and
hospital personnel; hazard pay: allowances of foreign services personnel stationed abroad;
and such other additional compensation not otherwise specified herein as may be
determined by the DBM, shall be deemed included in the standardized salary rules herein
prescribed. Such other additional compensation, whether in cash or in kind, being received
by incumbents as of July 1, 1989 no integrated into the standardized salary rates shall
continue to be authorized.1 (Emphasis supplied)

To implement Rep. Act 6758, the Department of Budget and Management (DBM) issued Corporate
Compensation Circular No. 10 (DBM-CCC No. 10), discontinuing without qualification effective November
1, 1989, all allowances and fringe benefits granted on top of basic salary.

Paragraph 5.6 of DBM-CCC No. 10 provides:

Payment of other allowances fringe benefits and all other forms of compensation granted
on top of basic salary, whether in cash or in kind, . . . shall be discontinued  effective
November 1, 1989. Payment made for such allowances fringe benefits after said date shall
be considered as illegal disbursement of public funds. 2
Pursuant to the aforesaid Law and Circular, respondent Leonardo Jamoralin, as corporate auditor,
disallowed on post audit, the payment of honoraria to the herein petitioners.

Aggrieved, petitioners appealed to the COA, questioning the validity and enforceability of DBM-CCC No.
10. More specifically, petitioners contend that DBM-CCC No. 10 is inconsistent with the provisions of Rep.
Act 6758 (the law it is supposed to implement) and, therefore, void. And it is without force and effect
because it was not published in the Official Gazette; petitioners stressed.

In its decision dated January 29, 1993, the COA upheld the validity and effectivity of DBM-CCC No. 10 and
sanctioned the disallowance of petitioners' honoraria. 3

Undaunted, petitioners found their way to this court via the present petition, posing the questions:

(1) Whether or not par. 5.6 of DBM-CCC No. 10 can supplant or negate the express
provisions of Sec. 12 of Rep. Act 6758 which it seeks to implement; and

(2) Whether or not DBM-CCC No. 10 is legally effective despite its lack of publication in the
Official Gazette.

Petitioners are of the view that par. 5.6 of DBM-CCC No. 10 prohibiting fringe benefits and allowances
effective November 1, 1989, is violative of Sec. 12 of Rep. Act 6758 which authorizes payment of additional
compensation not integrated into the standardized salary which incumbents were enjoying prior to July 1,
1989.

To buttress petitioners' stance, the Solicitor General presented a Manifestation and Motion in Lieu of
Comment, opining that Sec. 5.6 of DBM-CCC No. 10 is a nullity for being inconsistent with and repugnant
to the very law it is intended to implement. The Solicitor General theorized, that:

. . . following the settled principle that implementing rules must necessarily adhere to and
not depart from the provisions of the statute it seeks to implement, it is crystal clear that
Section 5.6 of DBM-CCC No. 10 is a patient nullity. An implementing rule can only be
declared valid if it is in harmony with the provision of the legislative act and for the sole
purpose of carrying into effect its general provisions. When an implementing rule is
inconsistent or repugnant to the provision of the statute it seeks to interpret, the mandate
of the statute must prevail and must be followed. 4

Respondent COA, on the other hand, pointed out that to allow honoraria without statutory, presidential or
DBM authority, as in this case, would run counter to Sec. 8, Article IX-B of the Constitution which
proscribes payment of "additional or double compensation, unless specifically authorized by law."
Therefore, the grant of honoraria or like allowances requires a specific legal or statutory authority. And
DBM-CCC No. 10 need not be published for it is merely an interpretative regulation of a law already
published 5; COA concluded.

In his Motion for Leave to intervene, the DBM Secretary asserted that the honoraria in question are
considered included in the basic salary, for the reason that they are not listed as exceptions under Sec. 12
of Rep. Act 6758.
Before resolving the other issue — whether or not Paragraph 5.6 of DBM-CCC No. 10 can supplant or
negate the pertinent provisions of Rep. Act 6758 which it seeks to implement, we have to tackle first the
other question whether or not DBM-CCC No. 10 has legal force and effect notwithstanding the absence of
publication thereof in the Official Gazette. This should take precedence because should we rule that
publication in the Official Gazette or in a newspaper of general circulation in the Philippines  6 is sine qua
non to the effectiveness or enforceability of DBM-CCC No. 10, resolution of the first issue posited by
petitioner would not be necessary.

The applicable provision of law requiring publication in the Official Gazette is found in Article 2 of the New
Civil Code of the Philippines, which reads:

Art. 2. Laws shall take effect after fifteen days following the completion of their publications
in the Official Gazette, unless it is otherwise provided. This code shall take effect one year
after such publication.

In Tanada v. Tuvera, 146 SCRA 453, 454, this Court succinctly construed the aforecited provision of law in
point, thus:

We hold therefore that all statutes, including those of local application and privates laws,
shall be published as a condition for their effectivity, which shall begin after fifteen days
after publication unless a different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly delegated by
the legislature or, at present, directly conferred by the Constitution. Administrative rules
and regulations must also be published if their purpose is to enforced or implement
existing law pursuant to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the administrative agency and not the public, need not be published. Neither
is publication required of the so-called letters of instructions issued by administrative
superiors concerning the rules or guidelines to be followed by their subordinates in the
performance of their duties.

Accordingly, even the charter of a city must be published notwithstanding that it applies to
only one portion of the national territory and directly affects only the inhabitants of that
place. All presidential decrees must be published, including, even, say those naming a
public place after a favored individual or exempting him from a certain prohibitions or
requirements. The circulars issued by the Monetary Board must be published if they are
meant not merely interpret but to "fill in details" of the Central Bank Act which that body
supposed to enforce. (Emphasis ours)

The same ruling was reiterated in the case of Philippine Association of Service Exporters, Inc. vs.
Torres, 212 SCRA 299 [1992].
On the need for publication of subject DBM-CCC No. 10, we rule in the affirmative. Following the doctrine
enunciated in Tanada, publication in the Official Gazette or in a newspaper of general circulation in the
Philippines is required since DBM-CCC No. 10 is in the nature of an administrative circular the purpose of
which is to enforce or implement an existing law. Stated differently, to be effective and enforceable, DBM-
CCC No. 10 must go through the requisite publication in the Official Gazette or in a newspaper of general
circulation in the Philippines.

In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, which completely disallows
payment of allowances and other additional compensation to government officials and employees, starting
November 1, 1989, is not a mere interpretative or internal regulation. It is something more than that. And
why not, when it tends to deprive government workers of their allowances and additional compensation
sorely needed to keep body and soul together. At the very least, before the said circular under attack may
be permitted to substantially reduce their income, the government officials and employees concerned
should be apprised and alerted by the publication of subject circular in the Official Gazette or in a
newspaper of general circulation in the Philippines — to the end that they be given amplest opportunity to
voice out whatever opposition they may have, and to ventilate their stance on the matter. This approach is
more in keeping with democratic precepts and rudiments of fairness and transparency.

In light of the foregoing disquisition on the ineffectiveness of DBM-CCC No. 10 due to its non-publication in
the Official Gazette or in a newspaper of general circulation in the country, as required by law, resolution of
the other issue at bar is unnecessary.

WHEREFORE, the Petition is hereby GRANTED, the assailed Decision of respondent Commission on
Audit is SET ASIDE, and respondents are ordered to pass on audit the honoraria of petitioners. No
pronouncement as to costs.

SO ORDERED.
G.R. No. 119761 August 29, 1996

COMMISSIONER OF INTERNAL REVENUE, petitioner, 

vs.
HON. COURT OF APPEALS, HON. COURT OF TAX APPEALS and FORTUNE TOBACCO
CORPORATION, respondents.

 VITUG, J.:p

The Commissioner of Internal Revenue ("CIR") disputes the decision, dated 31 March 1995, of respondent
Court of Appeals 1 affirming the 10th August 1994 decision and the 11th October 1994 resolution of the
Court of Tax Appeals 2 ("CTA") in C.T.A. Case No. 5015, entitled "Fortune Tobacco Corporation vs.
Liwayway Vinzons-Chato in her capacity as Commissioner of Internal Revenue."

The facts, by and large, are not in dispute.

Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the manufacture of different brands of
cigarettes.

On various dates, the Philippine Patent Office issued to the corporation separate certificates of trademark
registration over "Champion," "Hope," and "More" cigarettes. In a letter, dated 06 January 1987, of then
Commissioner of Internal Revenue Bienvenido A. Tan, Jr., to Deputy Minister Ramon Diaz of the
Presidential Commission on Good Government, "the initial position of the Commission was to classify
'Champion,' 'Hope,' and 'More' as foreign brands since they were listed in the World Tobacco Directory as
belonging to foreign companies. However, Fortune Tobacco changed the names of 'Hope' to
'Hope Luxury' and 'More' to 'Premium More,' thereby removing the said brands from the foreign brand
category. Proof was also submitted to the Bureau (of Internal Revenue ['BIR']) that 'Champion' was an
original Fortune Tobacco Corporation register and therefore a local brand." 3 Ad Valorem taxes were
imposed on these brands, 4 at the following rates:

BRAND AD VALOREM TAX RATE

E.O. 22 and E.O. 273 RA 6956
06-23-86 07-25-87 06-18-90
07-01-86 01-01-88 07-05-90

Hope Luxury M. 100's

Sec. 142, (c), (2) 40% 45%
Hope Luxury M. King
Sec. 142, (c), (2) 40% 45%
More Premium M. 100's
Sec. 142, (c), (2) 40% 45%
More Premium International
Sec. 142, (c), (2) 40% 45%
Champion Int'l. M. 100's
Sec. 142, (c), (2) 40% 45%
Champion M. 100's
Sec. 142, (c), (2) 40% 45%
Champion M. King
Sec. 142, (c), last par. 15% 20%
Champion Lights
Sec. 142, (c), last par. 15% 20% 5

A bill, which later became Republic Act ("RA") No. 7654, 6 was enacted, on 10 June 1993, by the
legislature and signed into law, on 14 June 1993, by the President of the Philippines. The new law
became effective on 03 July 1993. It amended Section 142(c)(1) of the National Internal Revenue
Code ("NIRC") to read; as follows:

Sec. 142. Cigars and Cigarettes. —

xxx xxx xxx

(c) Cigarettes packed by machine. — There shall be levied, assessed and collected on
cigarettes packed by machine a tax at the rates prescribed below based on the
constructive manufacturer's wholesale price or the actual manufacturer's wholesale price,
whichever is higher:

(1) On locally manufactured cigarettes which are currently classified and taxed at fifty-five
percent (55%) or the exportation of which is not authorized by contract or otherwise, fifty-
five (55%) provided that the minimum tax shall not be less than Five Pesos (P5.00) per
pack.

(2) On other locally manufactured cigarettes, forty-five percent (45%) provided that the
minimum tax shall not be less than Three Pesos (P3.00) per pack.

xxx xxx xxx

When the registered manufacturer's wholesale price or the actual manufacturer's

wholesale price whichever is higher of existing brands of cigarettes, including the amounts
intended to cover the taxes, of cigarettes packed in twenties does not exceed Four Pesos
and eighty centavos (P4.80) per pack, the rate shall be twenty percent (20%). 7 (Emphasis
supplied)

About a month after the enactment and two (2) days before the effectivity of RA 7654, Revenue
Memorandum Circular No. 37-93 ("RMC 37-93"), was issued by the BIR the full text of which
expressed:

REPUBLIKA NG PILIPINAS
KAGAWARAN NG PANANALAPI
KAWANIHAN NG RENTAS INTERNAS
 July 1,
1993

REVENUE MEMORANDUM CIRCULAR NO. 37-93

SUBJECT: Reclassification of Cigarettes Subject to Excise Tax

TO: All Internal Revenue Officers and Others Concerned.

In view of the issues raised on whether "HOPE," "MORE" and "CHAMPION" cigarettes
which are locally manufactured are appropriately considered as locally manufactured
cigarettes bearing a foreign brand, this Office is compelled to review the previous rulings
on the matter.

Section 142 (c)(1) National Internal Revenue Code, as amended by R.A. No. 6956,
provides:

On locally manufactured cigarettes bearing a foreign brand, fifty-five

percent (55%) Provided, That this rate shall apply regardless of whether
or not the right to use or title to the foreign brand was sold or transferred
by its owner to the local manufacturer. Whenever it has to be determined
whether or not a cigarette bears a foreign brand, the listing of brands
manufactured in foreign countries appearing in the current World Tobacco
Directory shall govern.

Under the foregoing, the test for imposition of the 55% ad valorem tax on cigarettes is that
the locally manufactured cigarettes bear a foreign brand regardless of whether or not the
right to use or title to the foreign brand was sold or transferred by its owner to the local
manufacturer. The brand must be originally owned by a foreign manufacturer or producer.
If ownership of the cigarette brand is, however, not definitely determinable, ". . . the listing
of brands manufactured in foreign countries appearing in the current World Tobacco
Directory shall govern. . . ."

"HOPE" is listed in the World Tobacco Directory as being manufactured by (a) Japan
Tobacco, Japan and (b) Fortune Tobacco, Philippines. "MORE" is listed in the said
directory as being manufactured by: (a) Fills de Julia Reig, Andorra; (b) Rothmans,
Australia; (c) RJR-Macdonald Canada; (d) Rettig-Strenberg, Finland; (e) Karellas, Greece;
(f) R.J. Reynolds, Malaysia; (g) Rothmans, New Zealand; (h) Fortune Tobacco,
Philippines; (i) R.J. Reynolds, Puerto Rico; (j) R.J. Reynolds, Spain; (k) Tabacalera, Spain;
(l) R.J. Reynolds, Switzerland; and (m) R.J. Reynolds, USA. "Champion" is registered in
the said directory as being manufactured by (a) Commonwealth Bangladesh; (b) Sudan,
Brazil; (c) Japan Tobacco, Japan; (d) Fortune Tobacco, Philippines; (e) Haggar, Sudan;
and (f) Tabac Reunies, Switzerland.

Since there is no showing who among the above-listed manufacturers of the cigarettes
bearing the said brands are the real owner/s thereof, then it follows that the same shall be
 considered foreign brand for purposes of determining the ad valorem tax pursuant to
Section 142 of the National Internal Revenue Code. As held in BIR Ruling No. 410-88,
dated August 24, 1988, "in cases where it cannot be established or there is dearth of
evidence as to whether a brand is foreign or not, resort to the World Tobacco Directory
should be made."

In view of the foregoing, the aforesaid brands of cigarettes, viz: "HOPE," "MORE" and
"CHAMPION" being manufactured by Fortune Tobacco Corporation are hereby considered
locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax
on cigarettes.

Any ruling inconsistent herewith is revoked or modified accordingly.

On 02 July 1993, at about 17:50 hours, BIR Deputy Commissioner Victor A. Deoferio, Jr., sent  via telefax a
copy of RMC 37-93 to Fortune Tobacco but it was addressed to no one in particular. On 15 July 1993,
Fortune Tobacco received, by ordinary mail, a certified xerox copy of RMC 37-93.

In a letter, dated 19 July 1993, addressed to the appellate division of the BIR, Fortune Tobacco
requested for a review, reconsideration and recall of RMC 37-93. The request was denied on 29
July 1993. The following day, or on 30 July 1993, the CIR assessed Fortune Tobacco for ad
valorem tax deficiency amounting to P9,598,334.00.

On 03 August 1993, Fortune Tobacco filed a petition for review with the CTA. 8

On 10 August 1994, the CTA upheld the position of Fortune Tobacco and adjudged:

WHEREFORE, Revenue Memorandum Circular No. 37-93 reclassifying the brands of

cigarettes, viz: "HOPE," "MORE" and "CHAMPION" being manufactured by Fortune
Tobacco Corporation as locally manufactured cigarettes bearing a foreign brand subject to
the 55% ad valorem tax on cigarettes is found to be defective, invalid and unenforceable,
such that when R.A. No. 7654 took effect on July 3, 1993, the brands in question were not
CURRENTLY CLASSIFIED AND TAXED at 55% pursuant to Section 1142(c)(1) of the Tax
Code, as amended by R.A. No. 7654 and were therefore still classified as other locally
manufactured cigarettes and taxed at 45% or 20% as the case may be.

Accordingly, the deficiency ad valorem tax assessment issued on petitioner Fortune

Tobacco Corporation in the amount of P9,598,334.00, exclusive of surcharge and interest,
is hereby canceled for lack of legal basis.

Respondent Commissioner of Internal Revenue is hereby enjoined from collecting the

deficiency tax assessment made and issued on petitioner in relation to the implementation
of RMC No. 37-93.

SO ORDERED. 9
 In its resolution, dated 11 October 1994, the CTA dismissed for lack of merit the motion for
reconsideration.

The CIR forthwith filed a petition for review with the Court of Appeals, questioning the CTA's 10th
August 1994 decision and 11th October 1994 resolution. On 31 March 1993, the appellate court's
Special Thirteenth Division affirmed in all respects the assailed decision and resolution.

In the instant petition, the Solicitor General argues: That —

I. RMC 37-93 IS A RULING OR OPINION OF THE COMMISSIONER OF INTERNAL REVENUE

INTERPRETING THE PROVISIONS OF THE TAX CODE.

II. BEING AN INTERPRETATIVE RULING OR OPINION, THE PUBLICATION OF RMC 37-93, FILING OF
COPIES THEREOF WITH THE UP LAW CENTER AND PRIOR HEARING ARE NOT NECESSARY TO
ITS VALIDITY, EFFECTIVITY AND ENFORCEABILITY.

III. PRIVATE RESPONDENT IS DEEMED TO HAVE BEEN NOTIFIED OR RMC 37-93 ON JULY 2, 1993.

IV. RMC 37-93 IS NOT DISCRIMINATORY SINCE IT APPLIES TO ALL LOCALLY MANUFACTURED
CIGARETTES SIMILARLY SITUATED AS "HOPE," "MORE" AND "CHAMPION" CIGARETTES.

V. PETITIONER WAS NOT LEGALLY PROSCRIBED FROM RECLASSIFYING "HOPE," "MORE" AND
"CHAMPION" CIGARETTES BEFORE THE EFFECTIVITY OF R.A. NO. 7654.

VI. SINCE RMC 37-93 IS AN INTERPRETATIVE RULE, THE INQUIRY IS NOT INTO ITS VALIDITY,
EFFECTIVITY OR ENFORCEABILITY BUT INTO ITS CORRECTNESS OR PROPRIETY; RMC 37-93 IS
CORRECT. 10

In fine, petitioner opines that RMC 37-93 is merely an interpretative ruling of the BIR which can
thus become effective without any prior need for notice and hearing, nor publication, and that its
issuance is not discriminatory since it would apply under similar circumstances to all locally
manufactured cigarettes.

The Court must sustain both the appellate court and the tax court.

Petitioner stresses on the wide and ample authority of the BIR in the issuance of rulings for the
effective implementation of the provisions of the National Internal Revenue Code. Let it be made
clear that such authority of the Commissioner is not here doubted. Like any other government
agency, however, the CIR may not disregard legal requirements or applicable principles in the
exercise of its quasi-legislative powers.

Let us first distinguish between two kinds of administrative issuances — a legislative rule and
an interpretative rule.

In Misamis Oriental Association of Coco Traders, Inc., vs. Department of Finance Secretary, 11 the

Court expressed:
 . . . a legislative rule is in the nature of subordinate legislation, designed to implement a
primary legislation by providing the details thereof . In the same way that laws must have
the benefit of public hearing, it is generally required that before a legislative rule is adopted
there must be hearing. In this connection, the Administrative Code of 1987 provides:

Public Participation. — If not otherwise required by law, an agency shall, as far as

practicable, publish or circulate notices of proposed rules and afford interested parties the
opportunity to submit their views prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall
have been published in a newspaper of general circulation at least two (2) weeks before
the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed.

In addition such rule must be published. On the other hand, interpretative rules are
designed to provide guidelines to the law which the administrative agency is in charge of
enforcing. 12

It should be understandable that when an administrative rule is merely interpretative in nature, its
applicability needs nothing further than its bare issuance for it gives no real consequence more
than what the law itself has already prescribed. When, upon the other hand, the administrative rule
goes beyond merely providing for the means that can facilitate or render least cumbersome the
implementation of the law but substantially adds to or increases the burden of those governed, it
behooves the agency to accord at least to those directly affected a chance to be heard, and
thereafter to be duly informed, before that new issuance is given the force and effect of law.

A reading of RMC 37-93, particularly considering the circumstances under which it has been
issued, convinces us that the circular cannot be viewed simply as a corrective measure (revoking
in the process the previous holdings of past Commissioners) or merely as construing Section
142(c)(1) of the NIRC, as amended, but has, in fact and most importantly, been made in order to
place "Hope Luxury," "Premium More" and "Champion" within the classification of locally
manufactured cigarettes bearing foreign brands and to thereby have them covered by RA 7654.
Specifically, the new law would have its amendatory provisions applied to locally manufactured
cigarettes which at the time of its effectivity were not so classified as bearing foreign brands. Prior
to the issuance of the questioned circular, "Hope Luxury," "Premium More," and "Champion"
cigarettes were in the category of locally manufactured cigarettes not bearing foreign brand subject
to 45% ad valorem tax. Hence, without RMC 37-93, the enactment of RA 7654, would have had no
new tax rate consequence on private respondent's products. Evidently, in order to place "Hope
Luxury," "Premium More," and "Champion" cigarettes within the scope of the amendatory law and
subject them to an increased tax rate, the now disputed RMC 37-93 had to be issued. In so doing,
the BIR not simply intrepreted the law; verily, it legislated under its quasi-legislative authority. The
due observance of the requirements of notice, of hearing, and of publication should not have been
then ignored.

Indeed, the BIR itself, in its RMC 10-86, has observed and provided:
 RMC NO. 10-86
Effectivity of Internal Revenue Rules and Regulations

It has been observed that one of the problem areas bearing on compliance with Internal
Revenue Tax rules and regulations is lack or insufficiency of due notice to the tax paying
public. Unless there is due notice, due compliance therewith may not be reasonably
expected. And most importantly, their strict enforcement could possibly suffer from legal
infirmity in the light of the constitutional provision on "due process of law" and the essence
of the Civil Code provision concerning effectivity of laws, whereby due notice is a basic
requirement (Sec. 1, Art. IV, Constitution; Art. 2, New Civil Code).

In order that there shall be a just enforcement of rules and regulations, in conformity with
the basic element of due process, the following procedures are hereby prescribed for the
drafting, issuance and implementation of the said Revenue Tax Issuances:

(1) This Circular shall apply only to (a) Revenue Regulations; (b) Revenue
Audit Memorandum Orders; and (c) Revenue Memorandum Circulars and
Revenue Memorandum Orders bearing on internal revenue tax rules and
regulations.

(2) Except when the law otherwise expressly provides, the aforesaid
internal revenue tax issuances shall not begin to be operative until after
due notice thereof may be fairly presumed.

Due notice of the said issuances may be fairly presumed only after the
following procedures have been taken;

x x x           x x x          x x x

(5) Strict compliance with the foregoing procedures is

enjoined. 13

Nothing on record could tell us that it was either impossible or impracticable for the BIR to observe
and comply with the above requirements before giving effect to its questioned circular.

Not insignificantly, RMC 37-93 might have likewise infringed on uniformity of taxation.

Article VI, Section 28, paragraph 1, of the 1987 Constitution mandates taxation to be uniform and
equitable. Uniformity requires that all subjects or objects of taxation, similarly situated, are to be
treated alike or put on equal footing both in privileges and liabilities.  14 Thus, all taxable articles or
kinds of property of the same class must be taxed at the same rate 15 and the tax must operate with
the same force and effect in every place where the subject may be found.

Apparently, RMC 37-93 would only apply to "Hope Luxury," "Premium More" and "Champion"
cigarettes and, unless petitioner would be willing to concede to the submission of private
respondent that the circular should, as in fact my esteemed colleague Mr. Justice Bellosillo so
expresses in his separate opinion, be considered adjudicatory in nature and thus violative of due
process following the Ang Tibay 16 doctrine, the measure suffers from lack of uniformity of taxation.
In its decision, the CTA has keenly noted that other cigarettes bearing foreign brands have not
been similarly included within the scope of the circular, such as —

1. Locally manufactured by ALHAMBRA INDUSTRIES, INC.

(a) "PALM TREE" is listed as manufactured by office of Monopoly, Korea

(Exhibit "R")

2. Locally manufactured by LA SUERTE CIGAR and CIGARETTE COMPANY

(a) "GOLDEN KEY" is listed being manufactured by United Tobacco,

Pakistan (Exhibit "S")

(b) "CANNON" is listed as being manufactured by Alpha Tobacco,

Bangladesh (Exhibit "T")

3. Locally manufactured by LA PERLA INDUSTRIES, INC.

(a) "WHITE HORSE" is listed as being manufactured by Rothman's,

Malaysia (Exhibit "U")

(b) "RIGHT" is listed as being manufactured by SVENSKA, Tobaks,

Sweden (Exhibit "V-1")

4. Locally manufactured by MIGHTY CORPORATION

(a) "WHITE HORSE" is listed as being manufactured by Rothman's,

Malaysia (Exhibit "U-1")

5. Locally manufactured by STERLING TOBACCO CORPORATION

(a) "UNION" is listed as being manufactured by Sumatra Tobacco,

Indonesia and Brown and Williamson, USA (Exhibit "U-3")

(b) "WINNER" is listed as being manufactured by Alpha Tobacco,

Bangladesh; Nangyang, Hongkong; Joo Lan, Malaysia; Pakistan Tobacco
Co., Pakistan; Premier Tobacco, Pakistan and Haggar, Sudan (Exhibit "U-
4"). 17

The court quoted at length from the transcript of the hearing conducted on 10 August 1993 by the
Committee on Ways and Means of the House of Representatives; viz:

THE CHAIRMAN. So you have specific information on Fortune Tobacco alone. You don't
have specific information on other tobacco manufacturers. Now, there are other brands
which are similarly situated. They are locally manufactured bearing foreign brands. And
may I enumerate to you all these brands, which are also listed in the World Tobacco
Directory . . . Why were these brand not reclassified at 55 if your want to give a level
playing filed to foreign manufacturers?

MS. CHATO. Mr. Chairman, in fact, we have already prepared a Revenue Memorandum
Circular that was supposed to come after RMC No. 37-93 which have really named
specifically the list of locally manufactured cigarettes bearing a foreign brand for excise tax
purposes and includes all these brands that you mentioned at 55 percent  except that at
that time, when we had to come up with this, we were forced to study the brands of Hope,
More and Champion because we were given documents that would indicate the that these
brands were actually being claimed or patented in other countries because we went by
Revenue Memorandum Circular 1488 and we wanted to give some rationality to how it
came about but we couldn't find the rationale there. And we really found based on our own
interpretation that the only test that is given by that existing law would be registration in the
World Tobacco Directory. So we came out with this proposed revenue memorandum
circular which we forwarded to the Secretary of Finance except that at that point in time,
we went by the Republic Act 7654 in Section 1 which amended Section 142, C-1, it said,
that on locally manufactured cigarettes which are currently classified and taxed at 55
percent. So we were saying that when this law took effect in July 3 and if we are going to
come up with this revenue circular thereafter, then I think our action would really be subject
to question but we feel that . . . Memorandum Circular Number 37-93 would really cover
even similarly situated brands. And in fact, it was really because of the study, the short
time that we were given to study the matter that we could not include all the rest of the
other brands that would have been really classified as foreign brand if we went by the law
itself. I am sure that by the reading of the law, you would without that ruling by
Commissioner Tan they would really have been included in the definition or in the
classification of foregoing brands. These brands that you referred to or just read to us and
in fact just for your information, we really came out with a proposed revenue memorandum
circular for those brands. (Emphasis supplied)

(Exhibit "FF-2-C," pp. V-5 TO V-6, VI-1 to VI-3).

xxx xxx xxx

MS. CHATO. . . . But I do agree with you now that it cannot and in fact that is why I felt that
we . . . I wanted to come up with a more extensive coverage and precisely why I asked
that revenue memorandum circular that would cover all those similarly situated would be
prepared but because of the lack of time and I came out with a study of RA 7654, it would
not have been possible to really come up with the reclassification or the proper
classification of all brands that are listed there. . . (emphasis supplied) (Exhibit "FF-2d,"
page IX-1)

xxx xxx xxx

HON. DIAZ. But did you not consider that there are similarly situated?
 MS. CHATO. That is precisely why, Sir, after we have come up with this Revenue
Memorandum Circular No. 37-93, the other brands came about the would have also
clarified RMC 37-93 by I was saying really because of the fact that I was just recently
appointed and the lack of time, the period that was allotted to us to come up with the right
actions on the matter, we were really caught by the July 3 deadline.  But in fact, We have
already prepared a revenue memorandum circular clarifying with the other . . . does not
yet, would have been a list of locally manufactured cigarettes bearing a foreign brand for
excise tax purposes which would include all the other brands that were mentioned by the
Honorable Chairman. (Emphasis supplied) (Exhibit "FF-2-d," par. IX-4). 18

All taken, the Court is convinced that the hastily promulgated RMC 37-93 has fallen short of a valid and
effective administrative issuance.

WHEREFORE, the decision of the Court of Appeals, sustaining that of the Court of Tax Appeals, is
AFFIRMED. No costs.

SO ORDERED.
G.R. No. L-46496             February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and 

NATIONAL WORKERS BROTHERHOOD, petitioners, 
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.

Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial
Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.

LAUREL, J.:

The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-entitled case
has filed a motion for reconsideration and moves that, for the reasons stated in his motion, we reconsider
the following legal conclusions of the majority opinion of this Court:

1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que no
sea para una determinada, termina o bien por voluntad de cualquiera de las partes o cada vez que
ilega el plazo fijado para el pago de los salarios segun costumbre en la localidad o cunado se
termine la obra;

2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya
colectivamente, con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus tarbajos por
haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de ser empleados u
obreros de la misma;

3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus osbreros
sin tiempo fijo de duracion y sin ser para una obra determiminada y que se niega a readmitir a
dichos obreros que cesaron como consecuencia de un paro forzoso, no es culpable de practica
injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth, aunque
su negativa a readmitir se deba a que dichos obreros pertenecen a un determinado organismo
obrero, puesto que tales ya han dejado deser empleados suyos por terminacion del contrato en
virtud del paro.

The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the judgement
rendered by the majority of this Court and the remanding of the case to the Court of Industrial Relations for
a new trial, and avers:

1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles in
ANG TIBAY making it necessary for him to temporarily lay off the members of the National Labor
Union Inc., is entirely false and unsupported by the records of the Bureau of Customs and the
Books of Accounts of native dealers in leather.
 2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to
systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the
Philippine Army.

3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed
delay of leather soles from the States) was but a scheme to systematically prevent the forfeiture of
this bond despite the breach of his CONTRACT with the Philippine Army.

4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union
dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U.S., 548,
petitioner's printed memorandum, p. 25.)

5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and
elective representation are highly essential and indispensable. (Sections 2 and 5, Commonwealth
Act No. 213.)

6. That the century provisions of the Civil Code which had been (the) principal source of
dissensions and continuous civil war in Spain cannot and should not be made applicable in
interpreting and applying the salutary provisions of a modern labor legislation of American origin
where the industrial peace has always been the rule.

7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against
the National Labor Union, Inc., and unjustly favoring the National Workers' Brotherhood.

8. That the exhibits hereto attached are so inaccessible to the respondents that even with the
exercise of due diligence they could not be expected to have obtained them and offered as
evidence in the Court of Industrial Relations.

9. That the attached documents and exhibits are of such far-reaching importance and effect that
their admission would necessarily mean the modification and reversal of the judgment rendered
herein.

The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the respondent
National Labor Union, Inc.

In view of the conclusion reached by us and to be herein after stead with reference to the motion for a new
trial of the respondent National Labor Union, Inc., we are of the opinion that it is not necessary to pass
upon the motion for reconsideration of the Solicitor-General. We shall proceed to dispose of the motion for
new trial of the respondent labor union. Before doing this, however, we deem it necessary, in the interest of
orderly procedure in cases of this nature, in interest of orderly procedure in cases of this nature, to make
several observations regarding the nature of the powers of the Court of Industrial Relations and emphasize
certain guiding principles which should be observed in the trial of cases brought before it. We have re-
examined the entire record of the proceedings had before the Court of Industrial Relations in this case, and
we have found no substantial evidence that the exclusion of the 89 laborers here was due to their union
affiliation or activity. The whole transcript taken contains what transpired during the hearing and is more of
a record of contradictory and conflicting statements of opposing counsel, with sporadic conclusion drawn to
suit their own views. It is evident that these statements and expressions of views of counsel have no
evidentiary value.

The Court of Industrial Relations is a special court whose functions are specifically stated in the law of its
creation (Commonwealth Act No. 103). It is more an administrative than a part of the integrated judicial
system of the nation. It is not intended to be a mere receptive organ of the Government. Unlike a court of
justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only cases that
are presented to it by the parties litigant, the function of the Court of Industrial Relations, as will appear
from perusal of its organic law, is more active, affirmative and dynamic. It not only exercises judicial or
quasi-judicial functions in the determination of disputes between employers and employees but its functions
in the determination of disputes between employers and employees but its functions are far more
comprehensive and expensive. It has jurisdiction over the entire Philippines, to consider, investigate,
decide, and settle any question, matter controversy or dispute arising between, and/or affecting employers
and employees or laborers, and regulate the relations between them, subject to, and in accordance with,
the provisions of Commonwealth Act No. 103 (section 1). It shall take cognizance or purposes of
prevention, arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to
cause a strike or lockout, arising from differences as regards wages, shares or compensation, hours of
labor or conditions of tenancy or employment, between landlords and tenants or farm-laborers, provided
that the number of employees, laborers or tenants of farm-laborers involved exceeds thirty, and such
industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or by any or both of the
parties to the controversy and certified by the Secretary of labor as existing and proper to be by the
Secretary of Labor as existing and proper to be dealth with by the Court for the sake of public interest.
(Section 4, ibid.) It shall, before hearing the dispute and in the course of such hearing, endeavor to
reconcile the parties and induce them to settle the dispute by amicable agreement. (Paragraph 2, section
4, ibid.) When directed by the President of the Philippines, it shall investigate and study all industries
established in a designated locality, with a view to determinating the necessity and fairness of fixing and
adopting for such industry or locality a minimum wage or share of laborers or tenants, or a maximum
"canon" or rental to be paid by the "inquilinos" or tenants or less to landowners. (Section 5,  ibid.) In fine, it
may appeal to voluntary arbitration in the settlement of industrial disputes; may employ mediation or
conciliation for that purpose, or recur to the more effective system of official investigation and compulsory
arbitration in order to determine specific controversies between labor and capital industry and in agriculture.
There is in reality here a mingling of executive and judicial functions, which is a departure from the rigid
doctrine of the separation of governmental powers.

In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated September 13,
1939, we had occasion to joint out that the Court of Industrial Relations et al., G. R. No. 46673,
promulgated September 13, 1939, we had occasion to point out that the Court of Industrial Relations is not
narrowly constrained by technical rules of procedure, and the Act requires it to "act according to justice and
equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be
bound by any technicalities or legal forms and shall not be bound by any technical rules of legal evidence
but may inform its mind in such manner as it may deem just and equitable." (Section 20, Commonwealth
Act No. 103.) It shall not be restricted to the specific relief claimed or demands made by the parties to the
industrial or agricultural dispute, but may include in the award, order or decision any matter or
determination which may be deemed necessary or expedient for the purpose of settling the dispute or of
preventing further industrial or agricultural disputes. (section 13, ibid.) And in the light of this legislative
policy, appeals to this Court have been especially regulated by the rules recently promulgated by the rules
recently promulgated by this Court to carry into the effect the avowed legislative purpose. The fact,
however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural
requirements does not mean that it can, in justifiable cases before it, entirely ignore or disregard the
fundamental and essential requirements of due process in trials and investigations of an administrative
character. There are primary rights which must be respected even in proceedings of this character:

(1) The first of these rights is the right to a hearing, which includes the right of the party interested
or affected to present his own case and submit evidence in support thereof. In the language of
Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and
property of the citizen shall be protected by the rudimentary requirements of fair play.

(2) Not only must the party be given an opportunity to present his case and to adduce evidence
tending to establish the rights which he asserts but the tribunal must consider the evidence
presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.)
In the language of this court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence,
without the corresponding duty on the part of the board to consider it, is vain. Such right is
conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside
without notice or consideration."

(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a
necessity which cannot be disregarded, namely, that of having something to support it is a nullity, a
place when directly attached." (Edwards vs. McCoy, supra.) This principle emanates from the more
fundamental is contrary to the vesting of unlimited power anywhere. Law is both a grant and a
limitation upon power.

(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs.
Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the evidence
must be "substantial." (Washington, Virginia and Maryland Coach Co. v. national labor Relations
Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant evidence
as a reasonable mind accept as adequate to support a conclusion." (Appalachian Electric Power v.
National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v.
Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v. National Labor
Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that "the rules of evidence
prevailing in courts of law and equity shall not be controlling.' The obvious purpose of this and
similar provisions is to free administrative boards from the compulsion of technical rules so that the
mere admission of matter which would be deemed incompetent inn judicial proceedings would not
invalidate the administrative order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24
S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R.
Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and Southern
Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable flexibility in
administrative procedure does not go far as to justify orders without a basis in evidence having
rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial
evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed.
No. 4, Adv. Op., p. 131.)"

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained
in the record and disclosed to the parties affected. (Interstate Commence Commission vs. L. & N.
R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining the administrative tribunal
 to the evidence disclosed to the parties, can the latter be protected in their right to know and meet
the case against them. It should not, however, detract from their duty actively to see that the law is
enforced, and for that purpose, to use the authorized legal methods of securing evidence and
informing itself of facts material and relevant to the controversy. Boards of inquiry may be
appointed for the purpose of investigating and determining the facts in any given case, but their
report and decision are only advisory. (Section 9, Commonwealth Act No. 103.) The Court of
Industrial Relations may refer any industrial or agricultural dispute or any matter under its
consideration or advisement to a local board of inquiry, a provincial fiscal. a justice of the peace or
any public official in any part of the Philippines for investigation, report and recommendation, and
may delegate to such board or public official such powers and functions as the said Court of
Industrial Relations may deem necessary, but such delegation shall not affect the exercise of the
Court itself of any of its powers. (Section 10, ibid.)

(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the views
of a subordinate in arriving at a decision. It may be that the volume of work is such that it is literally
Relations personally to decide all controversies coming before them. In the United States the
difficulty is solved with the enactment of statutory authority authorizing examiners or other
subordinates to render final decision, with the right to appeal to board or commission, but in our
case there is no such statutory authority.

(7) The Court of Industrial Relations should, in all controversial questions, render its decision in
such a manner that the parties to the proceeding can know the various issues involved, and the
reasons for the decision rendered. The performance of this duty is inseparable from the authority
conferred upon it.

In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to the
alleged agreement between the Ang Tibay and the National Worker's Brotherhood (appendix A), the record
is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a national way, a
conclusion of law.

This result, however, does not now preclude the concession of a new trial prayed for the by respondent
National Labor Union, Inc., it is alleged that "the supposed lack of material claimed by Toribio Teodoro was
but a scheme adopted to systematically discharged all the members of the National Labor Union Inc., from
work" and this avernment is desired to be proved by the petitioner with the "records of the Bureau of
Customs and the Books of Accounts of native dealers in leather"; that "the National Workers Brotherhood
Union of Ang Tibay is a company or employer union dominated by Toribio Teodoro, the existence and
functions of which are illegal." Petitioner further alleges under oath that the exhibits attached to the petition
to prove his substantial avernments" are so inaccessible to the respondents that even within the exercise of
due diligence they could not be expected to have obtained them and offered as evidence in the Court of
Industrial Relations", and that the documents attached to the petition "are of such far reaching importance
and effect that their admission would necessarily mean the modification and reversal of the judgment
rendered herein." We have considered the reply of Ang Tibay and its arguments against the petition. By
and large, after considerable discussions, we have come to the conclusion that the interest of justice would
be better served if the movant is given opportunity to present at the hearing the documents referred to in
his motion and such other evidence as may be relevant to the main issue involved. The legislation which
created the Court of Industrial Relations and under which it acts is new. The failure to grasp the
fundamental issue involved is not entirely attributable to the parties adversely affected by the result.
Accordingly, the motion for a new trial should be and the same is hereby granted, and the entire record of
this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the case,
receive all such evidence as may be relevant and otherwise proceed in accordance with the requirements
set forth hereinabove. So ordered.

Avanceña, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.
G.R. No. 114683           January 18, 2000

JESUS C. OCAMPO, petitioner, 
vs.
OFFICE OF THE OMBUDSMAN and MAXIMO ECLIPSE, respondents.

BUENA, J.:

This petition for certiorari seeks to nullify the Resolutions of the Ombudsman in OMB-Adm-0-92-0020 dated
November 18, 19931 and February 28, 1994 2 which dismissed petitioner from the service, with forfeiture of
benefits and special perpetual disqualification to hold office in the government or any government-owned or
controlled corporation, and which denied the motion for reconsideration thereof, respectively.

The facts are as follows:

Petitioner is the Training Coordinator of NIACONSULT, INC., a subsidiary of the National Irrigation
Administration.

On March 21, 1988, K.N. Paudel of the Agricultural Development Bank of Nepal (ADBN) Mote a letter to
NIACONSULT requesting a training proposal on small-scale community irrigation development. 3 

On November 17, 1988, petitioner as the training coordinator of the NIACONSULT, sent a letter-proposal
requested by ABDN.4 Another letter was sent by petitioner on January 31, 1989 to Dr. Peiter Roeloffs of
ADBN confirming the availability of NIACONSULT to conduct the training program and formally requesting
advance payment of thirty (30%) percent of the training fee 5 in the amount of US $9,600.00 or P204,960.00.

NIACONSULT conducted the training program for six Nepalese Junior Engineers from February 6 to March
7, 1989.6 ADBN, thru its representative, Deutsche Gesselschaft Technische Zusummenarbeit (GTZ) Gmbh
Technical Cooperation of the Federal Republic of Germany paid to the petitioner the agreed training fee in
two installments of P61,488.00 and P143, 472.00. 7 

On April 1, 1991, NIACONSULT, through its president, Wilfredo S. Tiongco, wrote a letter to petitioner
demanding the turn-over of the total training fee paid by ADBN which petitioner personally
received.8 Despite receipt of the letter, petitioner failed to remit the said amount prompting NIACONSULT
through its president, Maximino Eclipse, to file an administrative case before respondent OMBUDSMAN for
serious misconduct and/or fraud or willful breach of trust. 9 

Finding enough basis to proceed with the administrative case, the Administrative Adjudication Bureau of
the respondent OMBUDSMAN, on February 17, 1992, issued an order 10 requiring petitioner to file his
counter-affidavit within ten (10) days from receipt with a caveat that failure to file the same would be
deemed a waiver of his right to present evidence. Despite notice, petitioner failed to comply with the said
order.

A year later, or on March 17, 1993, respondent OMBUDSMAN issued another order 11 giving petitioner
another chance to file his counter-affidavit and controverting evidence. Again, petitioner failed. Thus, on
April 14, 1993, private respondent was required to appear before the OMBUDSMAN to present evidence to
support its complaint.12 

Thereafter, on November 18, 1993, respondent OMBUDSMAN issued the assailed Resolution, the decretal
portion of which reads:

Withal, for such dishonesty, untrustworthiness, and conduct prejudicial to the service as
established by overwhelming evidences, it is respectfully recommended that respondent Jesus C.
Ocampo be discharged from the service, with forfeiture of benefits and special perpetual
disqualification to hold office in the government or any government-owned or controlled
corporation; without prejudice to any civil action NIACONSULT, Inc., may institute to recover the
amount so retained by the respondent.

SO ORDERED.13 

On February 16, 1994 petitioner moved for reconsideration and to re-open the case claiming that he was
denied due process in that the administrative case was resolved on the basis of the complainant's
evidences, without affording him the opportunity to file a counter-affidavit and to present his evidence.
Petitioner likewise contends that he was not given access to the records of the subject transaction vital to
his defense and in the preparation of his counter-affidavit despite his verbal requests to the graft
investigator.14 

The respondent OMBUDSMAN denied the motion on February 28, 1994. 15 

Aggrieved, petitioner filed the instant petition basically reiterating his arguments in his motion for
reconsideration.

We gave due course to the petition and required the parties to submit their respective memoranda.

While the case is pending, petitioner filed a Manifestation on May 24, 1997 16 stating that the criminal
complaint for estafa and falsification filed against him based on the same facts or incidents which gave rise
to the administrative case, was dismissed by the Regional Trial Court on February 24, 1997. With the
dismissal of the criminal case, petitioner manifests that the administrative case can no longer stand on its
own and therefore should be dismissed.17 

Such manifestation is not well taken.

The dismissal of the criminal case will not foreclose administrative action filed against petitioner or give him
a clean bill of health in all respects. The Regional Trial Court, in dismissing the criminal complaint, was
simply saying that the prosecution was unable to prove the guilt of petitioner beyond reasonable doubt, a
condition sine qua non for conviction. The lack or absence of proof beyond reasonable doubt does not
mean an absence of any evidence whatsoever for there is another class of evidence which, though
insufficient to establish guilt beyond reasonable doubt, is adequate in civil cases; this is preponderance of
evidence. Then too, there is the "substantial evidence" rule in administrative proceedings which merely
requires such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.18 Thus, considering the difference in the quantum of evidence, as well as the procedure
followed and the sanctions imposed in criminal and administrative proceedings, the findings and
conclusions in one should not necessarily be binding on the other. 19 

Going now to the crux of the controversy, petitioner asserts that he was denied the opportunity to be heard.

The essence of due process is an opportunity to be heard. One may be heard, not solely by verbal
presentation but also, and perhaps even many times more creditably and practicable than oral argument,
through pleadings. In administrative proceedings, moreover, technical rules of procedure and evidence are
not strictly applied; administrative due process cannot be fully equated to due process in its strict judicial
sense.20 

Petitioner has been amply accorded the opportunity to be heard. He was required to answer the complaint
against him. In fact, petitioner was given considerable length of time to submit his counter-affidavit. It took
more than one year from February 17, 1992 before petitioner was considered to have waived his right to file
his counter-affidavit and the formal presentation of the complainant's evidence was set. The March 17,
1993 order was issued to give the petitioner a last chance to present his defense, despite the private
respondent's objections. But petitioner failed to comply with the second order.1âwphi1.nêt

Thus, petitioner's failure to present evidence is solely of his own making and cannot escape his own
remissness by passing the blame on the graft investigator. While the respondent OMBUDSMAN has shown
forbearance, petitioner has not displayed corresponding vigilance. He therefore cannot validly claim that his
right to due process was violated. We need only to reiterate that a party who chooses not to avail of the
opportunity to answer the charges cannot complain of a denial of due process. 21 

Petitioner's claim that he was not given any notice of the order declaring him to have waived his right to file
his counter-affidavit and of allowing the private respondent to present evidence ex-parte is unmeritorious.

The orders of respondent OMBUDSMAN requiring petitioner to submit his counter-affidavit and which was
admittedly received by the latter explicitly contain a warning that if no counter-affidavit was filed within the
given period, a waiver would be considered and the administrative proceedings shall continue according to
the rules. Thus, respondent OMBUDSMAN need not issue another order notifying petitioner that he has
waived his right to file a counter-affidavit. In the same way, petitioner need not be notified of the  ex-
parte hearing for the reception of private respondent's evidence. As such, he could not have been expected
to appear at the ex-parte hearing.

With regard to the petitioner's claim that he made requests for the production of the documents alleged to
be material to his defense, the record is bereft of any proof of such requests. If it were true that the graft
investigator did not act on such requests, petitioner should have filed the proper motion before the
respondent OMBUDSMAN for the production of the documents or to compel the respondent complainant to
produce whatever record necessary for his defense. Petitioner did not. It was only after the respondent
OMBUDSMAN issued the assailed resolution of November 18, 1993 that he bewailed the alleged failure of
respondent's graft investigator to require the production of the records of the subject transaction.

The record of this case indisputably shows that petitioner is guilty of dishonesty and conduct prejudicial to
the government when he failed to remit the payment of the training program conducted by NIACONSULT.
The evidence presented sufficiently established that petitioner received the payments of ADBN through its
representative, GTZ, Philippines the amount of US $9,600.00 and that he failed to account this and remit
the same to the corporation. All these acts constitute dishonesty and untrustworthiness.

WHEREFORE, the petition is hereby DENIED for lack of merit. The assailed Resolutions of the respondent
OMBUDSMAN are hereby AFFIRMED.

SO ORDERED.
G.R. No. 161086             November 24, 2006

CIVIL SERVICE COMMISSION, Petitioner, 

vs.
COURT OF APPEALS,* Respondent.

DECISION

CARPIO MORALES, J.:

In response to an anonymous complaint alleging that certain municipal officials and employees of the
municipal government of Infanta, Pangasinan had incurred cash shortages and committed graft and
corruption, the Commission on Audit (COA) Regional Office No. 1 in San Fernando City, La Union ordered
the conduct of a fraud audit.

Following the conduct of an audit from August 17, 1998 to September 30, 1998, the audit team submitted a
"Fraud Audit Report" finding, among other things, that the Municipal Treasurer granted various loans to
Municipal Officers and Employees amounting to ₱993,686.09 "in violation of COA Circular 90-331 dated
May 3, 1990 putting public funds to become idle and depriving the municipality of using the same to a more
productive endeavor for the benefit of the people." 1

One of the municipal officers and employees to whom loans were extended was Municipal Accountant
Luzviminda M. Maniago (Luzviminda) who, at the time the audit was conducted, had an outstanding loan
balance of ₱17,2002but which she had fully paid by the time the audit report was submitted.

Celso M. Manuel (Manuel), a resident of Barangay Patima, Infanta, later filed a complaint against
Luzviminda before the Office of the Mayor for violation of Republic Act No. 6713 (Code of Conduct and
Ethical Standards for Public Officials and Employees) in connection with the grant to her of the loan. In her
Answer, Luzviminda claimed that the loan was extended to her by the Municipal Treasurer in the latter’s
personal capacity.

The then Acting Mayor Charlito M. Kho, by Resolution dated September 20, 2000, found Luzviminda guilty
of Grave Misconduct on the basis of the "Fraud Audit Report" 3 and dismissed her from the service.

On Luzviminda’s appeal, the Civil Service Commission (CSC) modified Acting Mayor Kho’s resolution,
finding her guilty only of Conduct Grossly Prejudicial to the Best Interest of the Service and accordingly
modifying the penalty to suspension of one year. 4 Her motion for reconsideration having been
denied,5 Luzviminda filed with the Court of Appeals a petition for certiorari.

The Court of Appeals, noting that Luzviminda’s remedy should have been to file a petition for review under
Rule 43 instead of certiorari, nevertheless held that a rigid application of the Rules would result in a
manifest failure or miscarriage of justice 6 and accordingly gave her petition due course.

By Decision7 of June 18, 2003, the Court of Appeals reversed the CSC decision and ordered the
reinstatement of Luzviminda, ratiocinating as follows, quoted verbatim:
The CSC, in partially sustaining the findings of Acting Mayor Kho of Infanta,  acted arbitrarily, carelessly and
unreasonably.1âwphi1 Its only bases are the Fraud Audit Report  conducted during the period [of] August
17, 1998 to September 16, 1998 and the letter-complaint of one Cesar Manuel dated August 28, 2000.

In the Fraud Audit Report, it was not established, neither was there any mention that part of the cash
shortage in the cash accountability of the Municipal Treasurer was the amount of P17,200.00 which was
petitioner’s personal loan from said Municipal Treasurer. It is emphasized that the cash shortage of the
Municipal Treasurer was a whopping [sic] P1,487,107.40. Even assuming that said amount of P17,200.00
which petitioner personally borrowed from the Municipal Treasurer came from the public funds, the latter is
solely responsible therefor, as there was never an iota of evidence to show that petitioner opted to borrow
from the public funds.

On the basis of the Fraud Audit Report of 1998, a number of municipal officials and employees were
charged before the Office of the Ombudsman, however, only the Municipal Mayor and the Municipal
Treasurer were indicted. The petitioner, who is the Municipal Accountant, and the other employees were
not found liable by the Office of the Ombudsman. After being cleared of [sic] the Ombudsman, and after
two (2) long years or on August 28, 2000, one Cesar Manuel, a resident of Infanta, Pangasinan, whose
motive for filing said complaint was not ascertained, filed the complaint against petitioner using as basis the
1998 Fraud Audit Report. Except from the self-serving allegations of complainant Cesar Manuel, no
evidence was presented to support his allegations against petitioner.

xxxx

Thus, said Fraud Audit Report could not be a basis for indicting petitioner of Conduct Grossly Prejudicial to
the Best Interest of the Service and Dishonesty. When there is possibility of abuse occurs [sic] against the
recognition of the existence of power, it is the time for this Court to exercise its naysaying function.  Factual
findings of administrative agencies are not infallible and will be set aside when they fail the test of
arbitrariness, or upon proof of gross abuse of discretion, fraud, or error of law.

x x x x8 (Underscoring supplied)

The CSC’s Motion for Reconsideration was denied, 9 hence, it filed the instant Petition for Review on
Certiorari10raising issues which are synthesized as follows:

1. WHETHER THE COURT OF APPEALS ERRED IN GRANTING LUZVIMINDA’S PETITION FOR

CERTIORARI UNDER RULE 65 DESPITE THE AVAILABILITY OF APPEAL UNDER RULE 43 OF
THE REVISED RULES OF COURT; and

2. WHETHER THERE IS SUBSTANTIAL EVIDENCE TO HOLD LUZVIMINDA GUILTY OF

CONDUCT GROSSLY PREJUDICIAL TO THE BEST INTEREST OF THE SERVICE. 11

Under Rule 65 of the Rules of Court, certiorari may only be availed of when any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain,
speedy, and adequate remedy in the ordinary course of law.
It is gathered that Luzviminda had up to February 20, 2002 to file a petition for review before the appellate
court. On April 22, 2002, she filed a Motion for Extension of Time to File Petition for Certiorari which the
appellate court granted, and she eventually filed her Petition for Certiorari.

A special civil action for certiorari is, however, a limited form of review which cannot be used as a substitute
for lost or lapsed remedy of appeal. The availability to Luzviminda of the remedy of a petition for review
under Rule 43 of the Rules of Court foreclosed her right to resort to certiorari. 12

At any rate, Luzviminda’s petition before the appellate court did not justify a relaxation of the Rules.

It bears noting that an audit team of the COA Regional Office interviewed the Municipal Treasurer
herself,13following which it confirmed that the amount of loan granted to Luzviminda, not to mention those
granted to others in the form of vales, chits, and "I Owe You’s," 14 formed part of the "cash shortage" of the
Municipal Treasurer.

And it bears noting too that the decision of Acting Mayor Kho, which the CSC affirmed, was based not only
on the Fraud Audit Report, but also on Luzviminda’s Answer to the complaint of Manuel wherein she did
not deny having secured a loan, 15 her only defense being that the loan did not involve public funds, which
defense does not deserve consideration in the absence of any iota of proof thereof.1âwphi1

As for Luzviminda’s challenge to the decision of the acting mayor as having been rendered without hearing
Manuel’s complaint, the same fails.

The absence of a hearing16 did not deprive Luzviminda of due process. She was given the opportunity to
file, and she did file, an Answer 17 to Manuel’s complaint against her. She was also afforded the opportunity
to appeal to the CSC from the September 20, 2000 Resolution of Acting Mayor Kho. 18

Due process, as a constitutional precept, does not always and in all situations require a trial-type
proceeding. Due process is satisfied when a person is notified of the charge against him and given an
opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving
reasonable opportunity for the person so charged to answer the accusations against him constitute the
minimum requirements of due process. As long as a party was given the opportunity to defend his interests
in due course, he was not denied due process. 19 (Emphasis and underscoring supplied)

The essence of due process is an opportunity to be heard. One may be heard, not solely by verbal
presentation but also, and perhaps even many times more creditably and practicable than oral
argument, through pleadings. In administrative proceedings, moreover, technical rules of procedure and
evidence are not strictly applied; administrative due process cannot be fully equated to due process in its
strict judicial sense.20(Emphasis and underscoring supplied)

Finally, Luzviminda’s claim of payment does not help her for, as the CSC held,

x x x [Luzviminda’s] having obtained a loan for her personal use out of municipal funds, through the active
intercession of the Municipal Treasurer, cannot be countenanced. Although already paid in full, said loan
resulted in the diversion of municipal funds for purposes other than what the amount was supposed to be
appropriated for in the municipality. Thus, public service was prejudiced. x x x21 (Underscoring supplied)
WHEREFORE, the petition is GRANTED. The challenged decision of the Court of Appeals is REVERSED
and SET ASIDE. Resolutions No. 01-1065 and 02-0152 dated June 26, 2001 and January 29, 2001,
respectively, of the Civil Service Commission are REINSTATED.

SO ORDERED.
G.R. No. 112024 January 28, 1999

PHILIPPINE BANK OF COMMUNICATIONS, petitioner, 

vs.
COMMISSIONER OF INTERNAL REVENUE, COURT OF TAX APPEALS and COURT OF
APPEALS, respondent.

QUISUMBING, J.:

This petition for review assails the Resolution 1 of the Court of Appeals dated September 22,
1993 affirming the Decision2 and a Resolution 3 of the Court Of Tax Appeals which denied the claims of the
petitioner for tax refund and tax credits, and disposing as follows:

IN VIEW OF ALL, THE FOREGOING, the instant petition for review, is DENIED due
course. The Decision of the Court of Tax Appeals dated May 20, 1993 and its resolution
dated July 20, 1993, are hereby AFFIRMED in toto.

SO ORDERED.4

The Court of Tax Appeals earlier ruled as follows:

WHEREFORE, Petitioner's claim for refund/tax credits of overpaid income tax for 1985 in
the amount of P5,299,749.95 is hereby denied for having been filed beyond the
reglementary period. The 1986 claim for refund amounting to P234,077.69 is likewise
denied since petitioner has opted and in all likelihood automatically credited the same to
the succeeding year. The petition for review is dismissed for lack of merit.

SO ORDERED.5

The facts on record show the antecedent circumstances pertinent to this case.

Petitioner, Philippine Bank of Communications (PBCom), a commercial banking corporation duly organized
under Philippine laws, filed its quarterly income tax returns for the first and second quarters of 1985,
reported profits, and paid the total income tax of P5,016,954.00. The taxes due were settled by applying
PBCom's tax credit memos and accordingly, the Bureau of Internal Revenue (BIR) issued Tax Debit Memo
Nos. 0746-85 and 0747-85 for P3,401,701.00 and P1,615,253.00, respectively.

Subsequently, however, PBCom suffered losses so that when it filed its Annual Income Tax Returns for the
year-ended December 31, 1986, the petitioner likewise reported a net loss of P14,129,602.00, and thus
declared no tax payable for the year.

But during these two years, PBCom earned rental income from leased properties. The lessees withheld
and remitted to the BIR withholding creditable taxes of P282,795.50 in 1985 and P234,077.69 in 1986.
On August 7, 1987, petitioner requested the Commissioner of Internal Revenue, among others, for a tax
credit of P5,016,954.00 representing the overpayment of taxes in the first and second quarters of 1985.

Thereafter, on July 25, 1988, petitioner filed a claim for refund of creditable taxes withheld by their lessees
from property rentals in 1985 for P282,795.50 and in 1986 for P234,077.69.

Pending the investigation of the respondent Commissioner of Internal Revenue, petitioner instituted a
Petition for Review on November 18, 1988 before the Court of Tax Appeals (CTA). The petition was
docketed as CTA Case No. 4309 entitled: "Philippine Bank of Communications vs. Commissioner of
Internal Revenue."

The losses petitioner incurred as per the summary of petitioner's claims for refund and tax credit for 1985
and 1986, filed before the Court of Tax Appeals, are as follows:

1985 1986

——— ———

Net Income (Loss) (P25,317,288.00) (P14,129,602.00)

Tax Due NIL NIL

Quarterly tax.

Payments Made 5,016,954.00 —

Tax Withheld at Source 282,795.50 234,077.69

———————— ———————

Excess Tax Payments P5,299,749.50* P234,077.69

=============== =============

* CTA's decision reflects PBCom's 1985 tax claim as P5,299,749.95. A

forty five centavo difference was noted.

On May 20, 1993, the CTA rendered a decision which, as stated on the outset, denied the request of
petitioner for a tax refund or credit in the sum amount of P5,299,749.95, on the ground that it was filed
beyond the two-year reglementary period provided for by law. The petitioner's claim for refund in 1986
amounting to P234,077.69 was likewise denied on the assumption that it was automatically credited by
PBCom against its tax payment in the succeeding year.

On June 22, 1993, petitioner filed a Motion for Reconsideration of the CTA's decision but the same was
denied due course for lack of merit. 6
Thereafter, PBCom filed a petition for review of said decision and resolution of the CTA with the Court of
Appeals. However on September 22, 1993, the Court of Appeals affirmed in toto the CTA's resolution dated
July 20, 1993. Hence this petition now before us.

The issues raised by the petitioner are:

I. Whether taxpayer PBCom — which relied in good faith on the formal

assurances of BIR in RMC No. 7-85 and did not immediately file with the
CTA a petition for review asking for the refund/tax credit of its 1985-86
excess quarterly income tax payments — can be prejudiced by the
subsequent BIR rejection, applied retroactivity, of its assurances in RMC
No. 7-85 that the prescriptive period for the refund/tax credit of excess
quarterly income tax payments is not two years but ten (10). 7

II. Whether the Court of Appeals seriously erred in affirming the CTA
decision which denied PBCom's claim for the refund of P234,077.69
income tax overpaid in 1986 on the mere speculation, without proof, that
there were taxes due in 1987 and that PBCom availed of tax-crediting that
year.8

Simply stated, the main question is: Whether or not the Court of Appeals erred in denying the plea for tax
refund or tax credits on the ground of prescription, despite petitioner's reliance on RMC No. 7-85, changing
the prescriptive period of two years to ten years?

Petitioner argues that its claims for refund and tax credits are not yet barred by prescription relying on the
applicability of Revenue Memorandum Circular No. 7-85 issued on April 1, 1985. The circular states that
overpaid income taxes are not covered by the two-year prescriptive period under the tax Code and that
taxpayers may claim refund or tax credits for the excess quarterly income tax with the BIR within ten (10)
years under Article 1144 of the Civil Code. The pertinent portions of the circular reads:

REVENUE MEMORANDUM CIRCULAR NO. 7-85

SUBJECT: PROCESSING OF REFUND OR TAX CREDIT OF EXCESS CORPORATE INCOME TAX

RESULTING FROM THE FILING OF THE FINAL ADJUSTMENT RETURN.

TO: All Internal Revenue Officers and Others Concerned.

Sec. 85 And 86 Of the National Internal Revenue Code provide:

x x x           x x x          x x x

The foregoing provisions are implemented by Section 7 of Revenue Regulations Nos. 10-
77 which provide;

x x x           x x x          x x x
 It has been observed, however, that because of the excess tax payments, corporations file
claims for recovery of overpaid income tax with the Court of Tax Appeals within the two-
year period from the date of payment, in accordance with sections 292 and 295 of the
National Internal Revenue Code. It is obvious that the filing of the case in court is to
preserve the judicial right of the corporation to claim the refund or tax credit.

It should he noted, however, that this is not a case of erroneously or illegally paid tax under
the provisions of Sections 292 and 295 of the Tax Code.

In the above provision of the Regulations the corporation may request for the refund of the
overpaid income tax or claim for automatic tax credit. To insure prompt action on corporate
annual income tax returns showing refundable amounts arising from overpaid quarterly
income taxes, this Office has promulgated Revenue Memorandum Order No. 32-76 dated
June 11, 1976, containing the procedure in processing said returns. Under these
procedures, the returns are merely pre-audited which consist mainly of checking
mathematical accuracy of the figures of the return. After which, the refund or tax credit is
granted, and, this procedure was adopted to facilitate immediate action on cases like this.

In this regard, therefore, there is no need to file petitions for review in the Court of Tax
Appeals in order to preserve the right to claim refund or tax credit the two year period. As
already stated, actions hereon by the Bureau are immediate after only a cursory pre-audit
of the income tax returns. Moreover, a taxpayer may recover from the Bureau of Internal
Revenue excess income tax paid under the provisions of Section 86 of the Tax Code
within 10 years from the date of payment considering that it is an obligation created by law
(Article 1144 of the Civil Code).9 (Emphasis supplied.)

Petitioner argues that the government is barred from asserting a position contrary to its declared circular if it
would result to injustice to taxpayers. Citing ABS CBN Broadcasting Corporation vs. Court of Tax
Appeals 10 petitioner claims that rulings or circulars promulgated by the Commissioner of Internal Revenue
have no retroactive effect if it would be prejudicial to taxpayers, In ABS-CBN case, the Court held that the
government is precluded from adopting a position inconsistent with one previously taken where injustice
would result therefrom or where there has been a misrepresentation to the taxpayer.

Petitioner contends that Sec. 246 of the National Internal Revenue Code explicitly provides for this rules as
follows:

Sec. 246 Non-retroactivity of rulings— Any revocation, modification or reversal of any of the rules and
regulations promulgated in accordance with the preceding section or any of the rulings or circulars
promulgated by the Commissioner shall not be given retroactive application if the revocation, modification
or reversal will be prejudicial to the taxpayers except in the following cases:

a). where the taxpayer deliberately misstates or omits material facts from his return or in any document
required of him by the Bureau of Internal Revenue;

b). where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from
the facts on which the ruling is based;
c). where the taxpayer acted in bad faith.

Respondent Commissioner of Internal Revenue, through Solicitor General, argues that the two-year
prescriptive period for filing tax cases in court concerning income tax payments of Corporations is reckoned
from the date of filing the Final Adjusted Income Tax Return, which is generally done on April 15 following
the close of the calendar year. As precedents, respondent Commissioner cited cases which adhered to this
principle, to wit ACCRA Investments Corp. vs. Court of Appeals, et al., 11 and Commissioner of Internal
Revenue vs. TMX Sales, Inc., et al.. 12 Respondent Commissioner also states that since the Final Adjusted
Income Tax Return of the petitioner for the taxable year 1985 was supposed to be filed on April 15, 1986,
the latter had only until April 15, 1988 to seek relief from the court. Further, respondent Commissioner
stresses that when the petitioner filed the case before the CTA on November 18, 1988, the same was filed
beyond the time fixed by law, and such failure is fatal to petitioner's cause of action.

After a careful study of the records and applicable jurisprudence on the matter, we find that, contrary to the
petitioner's contention, the relaxation of revenue regulations by RMC 7-85 is not warranted as it disregards
the two-year prescriptive period set by law.

Basic is the principle that "taxes are the lifeblood of the nation." The primary purpose is to generate funds
for the State to finance the needs of the citizenry and to advance the common weal.  13 Due process of law
under the Constitution does not require judicial proceedings in tax cases. This must necessarily be so
because it is upon taxation that the government chiefly relies to obtain the means to carry on its operations
and it is of utmost importance that the modes adopted to enforce the collection of taxes levied should be
summary and interfered with as little as possible. 14

From the same perspective, claims for refund or tax credit should be exercised within the time fixed by law
because the BIR being an administrative body enforced to collect taxes, its functions should not be unduly
delayed or hampered by incidental matters.

Sec. 230 of the National Internal Revenue Code (NIRC) of 1977 (now Sec. 229, NIRC of 1997) provides for
the prescriptive period for filing a court proceeding for the recovery of tax erroneously or illegally
collected, viz.:

Sec. 230. Recovery of tax erroneously or illegally collected. — No suit or proceeding shall

be maintained in any court for the recovery of any national internal revenue tax hereafter
alleged to have been erroneously or illegally assessed or collected, or of any penalty
claimed to have been collected without authority, or of any sum alleged to have been
excessive or in any manner wrongfully collected, until a claim for refund or credit has been
duly filed with the Commissioner; but such suit or proceeding may be maintained, whether
or not such tax, penalty, or sum has been paid under protest or duress.

In any case, no such suit or proceedings shall begun after the expiration of two years from
the date of payment of the tax or penalty regardless of any supervening cause that may
arise after payment; Provided however, That the Commissioner may, even without a
written claim therefor, refund or credit any tax, where on the face of the return upon which
payment was made, such payment appears clearly to have been erroneously paid.
(Emphasis supplied)
The rule states that the taxpayer may file a claim for refund or credit with the Commissioner of Internal
Revenue, within two (2) years after payment of tax, before any suit in CTA is commenced. The two-year
prescriptive period provided, should be computed from the time of filing the Adjustment Return and final
payment of the tax for the year.

In Commissioner of Internal Revenue vs. Philippine American Life Insurance Co., 15 this Court explained
the application of Sec. 230 of 1977 NIRC, as follows:

Clearly, the prescriptive period of two years should commence to run only from the time
that the refund is ascertained, which can only be determined after a final adjustment return
is accomplished. In the present case, this date is April 16, 1984, and two years from this
date would be April 16, 1986. . . . As we have earlier said in the TMX Sales case, Sections
68. 16 69, 17 and 70 18 on Quarterly Corporate Income Tax Payment and Section 321 should
be considered in conjunction with it 19

When the Acting Commissioner of Internal Revenue issued RMC 7-85, changing the prescriptive period of
two years to ten years on claims of excess quarterly income tax payments, such circular created a clear
inconsistency with the provision of Sec. 230 of 1977 NIRC. In so doing, the BIR did not simply interpret the
law; rather it legislated guidelines contrary to the statute passed by Congress.

It bears repeating that Revenue memorandum-circulars are considered administrative rulings (in the sense
of more specific and less general interpretations of tax laws) which are issued from time to time by the
Commissioner of Internal Revenue. It is widely accepted that the interpretation placed upon a statute by the
executive officers, whose duty is to enforce it, is entitled to great respect by the courts. Nevertheless, such
interpretation is not conclusive and will be ignored if judicially found to be erroneous. 20 Thus, courts will not
countenance administrative issuances that override, instead of remaining consistent and in harmony with
the law they seek to apply and implement. 21

In the case of People vs. Lim, 22 it was held that rules and regulations issued by administrative officials to
implement a law cannot go beyond the terms and provisions of the latter.

Appellant contends that Section 2 of FAO No. 37-1 is void because it is not only
inconsistent with but is contrary to the provisions and spirit of Act. No 4003 as amended,
because whereas the prohibition prescribed in said Fisheries Act was for any single period
of time not exceeding five years duration, FAO No 37-1 fixed no period, that is to say, it
establishes an absolute ban for all time. This discrepancy between Act No. 4003 and FAO
No. 37-1 was probably due to an oversight on the part of Secretary of Agriculture and
Natural Resources. Of course, in case of discrepancy, the basic Act prevails, for the
reason that the regulation or rule issued to implement a law cannot go beyond the terms
and provisions of the 
latter. . . . In this connection, the attention of the technical men in the offices of Department
Heads who draft rules and regulation is called to the importance and necessity of closely
following the terms and provisions of the law which they intended to implement, this to
avoid any possible misunderstanding or confusion as in the present case. 23

Further, fundamental is the rule that the State cannot be put in estoppel by the mistakes or errors of its
officials or agents. 24 As pointed out by the respondent courts, the nullification of RMC No. 7-85 issued by
the Acting Commissioner of Internal Revenue is an administrative interpretation which is not in harmony
with Sec. 230 of 1977 NIRC. for being contrary to the express provision of a statute. Hence, his
interpretation could not be given weight for to do so would, in effect, amend the statute.

It is likewise argued that the Commissioner of Internal Revenue, after promulgating RMC
No. 7-85, is estopped by the principle of non-retroactively of BIR rulings. Again We do not
agree. The Memorandum Circular, stating that a taxpayer may recover the excess income
tax paid within 10 years from date of payment because this is an obligation created by law,
was issued by the Acting Commissioner of Internal Revenue. On the other hand, the
decision, stating that the taxpayer should still file a claim for a refund or tax credit and
corresponding petition fro review within the 
two-year prescription period, and that the lengthening of the period of limitation on refund
from two to ten years would be adverse to public policy and run counter to the positive
mandate of Sec. 230, NIRC, - was the ruling and judicial interpretation of the Court of Tax
Appeals. Estoppel has no application in the case at bar because it was not the
Commissioner of Internal Revenue who denied petitioner's claim of refund or tax credit.
Rather, it was the Court of Tax Appeals who denied (albeit correctly) the claim and in
effect, ruled that the RMC No. 7-85 issued by the Commissioner of Internal Revenue is an
administrative interpretation which is out of harmony with or contrary to the express
provision of a statute (specifically Sec. 230, NIRC), hence, cannot be given weight for to
do so would in effect amend the statute. 25

Art. 8 of the Civil Code 26 recognizes judicial decisions, applying or interpreting statutes as part of the legal
system of the country. But administrative decisions do not enjoy that level of recognition. A memorandum-
circular of a bureau head could not operate to vest a taxpayer with shield against judicial action. For there
are no vested rights to speak of respecting a wrong construction of the law by the administrative officials
and such wrong interpretation could not place the Government in estoppel to correct or overrule the
same. 27 Moreover, the non-retroactivity of rulings by the Commissioner of Internal Revenue is not
applicable in this case because the nullity of RMC No. 7-85 was declared by respondent courts and not by
the Commissioner of Internal Revenue. Lastly, it must be noted that, as repeatedly held by this Court, a
claim for refund is in the nature of a claim for exemption and should be construed in  strictissimi juris against
the taxpayer.28

On the second issue, the petitioner alleges that the Court of Appeals seriously erred in affirming CTA's
decision denying its claim for refund of P234,077.69 (tax overpaid in 1986), based on mere speculation,
without proof, that PBCom availed of the automatic tax credit in 1987.

Sec. 69 of the 1977 NIRC 29 (now Sec. 76 of the 1997 NIRC) provides that any excess of the total quarterly
payments over the actual income tax computed in the adjustment or final corporate income tax return, shall
either(a) be refunded to the corporation, or (b) may be credited against the estimated quarterly income tax
liabilities for the quarters of the succeeding taxable year.

The corporation must signify in its annual corporate adjustment return (by marking the option box provided
in the BIR form) its intention, whether to request for a refund or claim for an automatic tax credit for the
succeeding taxable year. To ease the administration of tax collection, these remedies are in the alternative,
and the choice of one precludes the other.
As stated by respondent Court of Appeals:

Finally, as to the claimed refund of income tax over-paid in 1986 — the Court of Tax
Appeals, after examining the adjusted final corporate annual income tax return for taxable
year 1986, found out that petitioner opted to apply for automatic tax credit. This was the
basis used (vis-avis the fact that the 1987 annual corporate tax return was not offered by
the petitioner as evidence) by the CTA in concluding that petitioner had indeed availed of
and applied the automatic tax credit to the succeeding year, hence it can no longer ask for
refund, as to [sic] the two remedies of refund and tax credit are alternative. 30

That the petitioner opted for an automatic tax credit in accordance with Sec. 69 of the 1977 NIRC, as
specified in its 1986 Final Adjusted Income Tax Return, is a finding of fact which we must respect.
Moreover, the 1987 annual corporate tax return of the petitioner was not offered as evidence to contovert
said fact. Thus, we are bound by the findings of fact by respondent courts, there being no showing of gross
error or abuse on their part to disturb our reliance thereon. 31

WHEREFORE, the, petition is hereby DENIED, The decision of the Court of Appeals appealed from is
AFFIRMED, with COSTS against the petitioner.1âwphi1.nêt

SO ORDERED.
G.R. No. 131457           August 19, 1999

HON. CARLOS O. FORTICH, PROVINCIAL GOVERNOR OF BUKIDNON, HON. REY B. BAULA,

MUNICIPAL MAYOR OF SUMILAO, BUKIDNON, NQSR MANAGEMENT AND DEVELOPMENT
CORPORATION, petitioners, 
vs.
HON. RENATO C. CORONA, DEPUTY EXECUTIVE SECRETARY, HON. ERNESTO D. GARILAO,
SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondents.

RESOLUTION

YNARES-SANTIAGO, J.:

This resolves the pending incidents before us, namely, respondents' and intervenors' separate motions for
reconsideration of our Resolution dated November 17, 1998, as well as their motions to refer this case to
this Court En banc.

Respondents and intervenors jointly argue, in fine, that our Resolution dated November 17, 1998, wherein
we voted two-two on the separate motions for reconsideration of our earlier Decision or April 24, 1998, as a
result of which the Decision was deemed affirmed, did not effectively resolve the said motions for
reconsideration inasmuch as the matter should have been referred to the Court sitting e n banc, pursuant to
Article VIII, Section 4(3) of the Constitution. Respondents and intervenors also assail our Resolution dated
January 27, 1999, wherein we noted without action the intervenors' "Motion For Reconsideration With
Motion To Refer The Matter To The Court En Banc" filed on December 3, 1998, on the following
considerations, to wit:

the movants have no legal personality to further seek redress before the Court after their motion for
leave to intervene in this case was denied in the April 24, 1998 Decision. Their subsequent motion
for reconsideration of the said decision, with a prayer to resolve the motion to the Court  En Banc,
was also denied in the November 17, 1998 Resolution of the Court. Besides, their aforesaid motion
of December 3, 1998 is in the nature of a second motion for reconsideration which is a forbidden
motion (Section 2, Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules of Civil Procedure).
The impropriety of movants' December 3, 1998 motion becomes all the more glaring considering
that all the respondents in this case did not anymore join them (movants) ill seeking a
reconsideration of the November 17, 1998 Resolution. 1

Subsequently, respondents, through the Office of the Solicitor General, filed their "Motion For
Reconsideration Of The Resolution Dated November 17, 1998 And For Referral Of The Case To This
Honorable Court En Banc (With Urgent Prayer For Issuance Of A Restraining Order)" on December 3,
1998, accompanied by a "Manifestation and Motion" 2 and a copy of the Registered Mail Bill 3 evidencing
filing of the said motion for reconsideration to this Court by registered mail.1âwphi1.nêt

In their respective motions for reconsideration, both respondents and intervenors pray that this case be
referred to this Court en banc. They contend that inasmuch as their earlier motions for reconsideration (of
the Decision dated April 24, 1998) were resolved by a vote of two-two, the required number to carry a
decision, i.e., three, was not met. Consequently, the case should be referred to and be decided by this
Court en banc, relying on the following constitutional provision:

Cases or matters heard by a division shall be decided or resolved with the concurrence of a
majority of the Members who actually took part in the deliberations on the issues in the case and
voted thereon, and in no case without the concurrence of at least three of such Members. When
the required number is not obtained, the case shall be decided en banc: Provided, that no doctrine
or principle of law laid down by the Court in a decision rendered en banc or in division may be
modified or reversed except by the Court sitting en banc.4

A careful reading of the above constitutional provision, however, reveals the intention of the framers to
draw a distinction between cases, on the one hand, and matters, on the other hand, such that cases are
"decided" while matters, which include motions, are "resolved". Otherwise put, the word "decided" must
refer to "cases"; while the word "resolved" must refer to "matters", applying the rule of  reddendo singula
singulis. This is true not only in the interpretation of the above-quoted Article VIII, Section 4(3), but also of
the other provisions of the Constitution where these words appear. 5

With the aforesaid rule of construction in mind, it is clear that only cases are referred to the Court  en
banc for decision whenever the required number of votes is not obtained. Conversely, the rule does not
apply where, as in this case, the required three votes is not obtained in the resolution of a motion for
reconsideration. Hence, the second sentence of the aforequoted provision speaks only of "case" and not
"matter". The reason is simple. The above-quoted Article VIII, Section 4(3) pertains to the disposition of
cases by a division. If there is a tie in the voting, there is no decision. The only way to dispose of the case
then is to refer it to the Court en banc. On the other hand, if a case has already been decided by the
division and the losing party files a motion for reconsideration, the failure of the division to resolve the
motion because of a tie in the voting does not leave the case undecided. There is still the decision which
must stand in view of the failure of the members of the division to muster the necessary vote for its
reconsideration. Quite plainly, if the voting results in a tie, the motion for reconsideration is lost. The
assailed decision is not reconsidered and must therefore be deemed affirmed. Such was the ruling of this
Court in the Resolution of November 17, 1998.

It is the movants' further contention in support of their plea for the referral of this case to the Court  en
banc that the issues submitted in their separate motions are of first impression. In the opinion penned by
Mr. Justice Antonio M. Martinez during the resolution of the motions for reconsideration on November 17,
1998, the following was expressed:

Regrettably, the issues presented before us by the movants are matters of no extraordinary import
to merit the attention of the Court En Banc. Specifically, the issue of whether or not the power of
the local government units to reclassify lands is subject to the approval of the DAR is no longer
novel, this having been decided by this Court in the case of Province of Camarines Sur, et
al. vs. Court of Appeals wherein we held that local government units need not obtain the approval
of the DAR to convert or reclassify lands from agricultural to non-agricultural use. The dispositive
portion of the Decision in the aforecited case states:

WHEREFORE, the petition is GRANTED and the questioned decision of the Court of
Appeals is set aside insofar as it (a) nullifies the trial court's order allowing the Province of
Camarines Sur to take possession of private respondent's property (b) orders the trial court
 to suspended the exportation proceedings; and (c) requires the Province of Camarines Sur
to obtain the approval of the Department of Agrarian Reform to convert or reclassify private
respondents' property from agricultural to non-agricultural use.

x x x           x x x           x x x(Emphasis supplied)

Moreover, the Decision sought to be reconsidered was arrived at by a unanimous vote of all five (5)
members of the Second Division of this Court, Stated otherwise, this Second Division is of the
opinion that the matters raised by movants are nothing new and do not deserve the consideration
of the Court en banc. Thus, the participation of the full Court in the resolution of movants' motions
for reconsideration would be inappropriate. 6

The contention, therefore, that our Resolution of November 17, 1998 did not dispose of the earlier motions
for reconsideration of the Decision dated April 24, 1998 is flawed. Consequently, the present motions for
reconsideration necessarily partake of the nature of a second motion for reconsideration which, according
to the clear and unambiguous language of Rule 56, Section 4, in relation to Rule 52, Section 2, of the 1997
Rules of Civil Procedure, is prohibited.

True, there are exceptional cases when this Court may entertain a second motion for reconsideration, such
as where there are extraordinarily persuasive reasons. Even then, we have ruled that such second motions
for reconsideration must be filed with express leave of court first obtained. 7 In this case, not only did
movants fail to ask for prior leave of court, but more importantly, they have been unable to show that there
are exceptional reasons for us to give due course to their second motions for reconsideration. Stripped of
the arguments for referral of this incident to the Court en banc, the motions subject of this resolution are
nothing more but rehashes of the motions for reconsideration which have been denied in the Resolution of
November 17, 1998. To be sure, the allegations contained therein have already been raised before and
passed upon by this Court in the said Resolution.

The crux of the controversy is the validity of the "Win-Win" Resolution dated November 7, 1997. We
maintain that the same is void and of no legal effect considering that the March 29, 1996 decision of the
Office of the President had already become final and executory even prior to the filing of the motion for
reconsideration which became the basis of the said "Win-Win" Resolution. This ruling, quite
understandably, sparked a litany of protestations on the part of respondents and intervenors including
entreaties for a liberal interpretation of the rules. The sentiment was that notwithstanding its importance and
far-reaching effects, the case was disposed of on a technicality. The situation, however, is not as simple as
what the movants purport it to be. While it may be true that on its face the nullification of the "Win-Win"
Resolution was grounded on a procedural rule pertaining to the reglementary period to appeal or move for
reconsideration, the underlying consideration therefor was the protection of the substantive rights of
petitioners. The succinct words of Mr. Justice Artemio V. Panganiban are quoted in the November 17, 1998
opinion of Mr. Justice Martinez, viz.: "Just as a losing party has the right to file an appeal within the
prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of
his/her case."8

In other words, the finality of the March 29, 1996 OP Decision accordingly vested appurtenant rights to the
land in dispute on petitioners as well as on the people of Bukidnon and other parts of the country who stand
to be benefited by the development of the property. The issue in this case, therefore, is not a question of
technicality but of substance and merit. 9
Before finally disposing of these pending matters, we feel it necessary to rule once and for all on the legal
standing of intervenors in this case. In their present motions, intervenors insist that they are real parties in
interest inasmuch as they have already been issued certificates of land ownership award, or CLOAs, and
that while they are seasonal farmworkers at the plantation, they have been identified by the DAR as
qualified beneficiaries of the property. These arguments are, however, nothing new as in fact they have
already been raised in intervenors' earlier motion for reconsideration of our April 24, 1998 Decision. Again
as expressed in the opinion of Mr. Justice Martinez, intervenors, who are admittedly not regular but
seasonal farmworkers, have no legal or actual and substantive interest over the subject land inasmuch as
they have no right to own the land. Rather, their right is limited only to a just share of the fruits of the
land.10 Moreover, the "Win-Win" Resolution itself states that the qualified beneficiaries have yet to be
carefully and meticulously determined by the Department of Agrarian Reform. 11 Absent any definitive
finding of the Department of Agrarian Reform, intervenors cannot as yet be deemed vested with sufficient
interest in the controversy as to be qualified to intervene in this case. Likewise, the issuance of the CLOA's
to them does not grant them the requisite standing in view of the nullity of the "Win-Win" Resolution. No
legal rights can emanate from a resolution that is null and void.

WHEREFORE, based on the foregoing, the following incidents, namely: intervenors' "Motion For
Reconsideration With Motion To Refer The Matter To The Court En Banc," dated December 3, 1998;
respondents' "Motion For Reconsideration Of The Resolution Dated November 17, 1998 And For Referral
Of The Case To This Honorable Court En Banc (With Urgent Prayer For Issuance Of A Restraining Order),"
dated December 2, 1998; and intervenors' "Urgent Omnibus Motion For The Supreme Court Sitting En
Banc To Annul The Second Division's Resolution Dated 27 January 1999 And Immediately Resolve The 28
May 1998 Motion For Reconsideration Filed By The Intervenors," dated March 2, 1999; are all DENIED
with FINALITY. No further motion, pleading, or paper will be entertained in this case.

SO ORDERED.
G.R. No. 79538 October 18, 1990

FELIPE YSMAEL, JR. & CO., INC., petitioner, 

vs.
THE DEPUTY EXECUTIVE SECRETARY, THE SECRETARY OF ENVIRONMENT AND NATURAL
RESOURCES, THE DIRECTOR OF THE BUREAU OF FOREST DEVELOPMENT and TWIN PEAKS
DEVELOPMENT AND REALTY CORPORATION, respondents. 

Tañada, Vivo & Tan for petitioner. 

Antonio E. Escober and Jurado Law Office for respondent Twin Peaks Development Corporation. 

COURTS, J.:

Soon after the change of government in February 1986, petitioner sent a letter dated March 17, 1986 to the
Office of the President, and another letter dated April 2, 1986 to Minister Ernesto Maceda of the Ministry of
Natural Resources [MNR], seeking: (1) the reinstatement of its timber license agreement which was
cancelled in August 1983 during the Marcos administration; (2) the revocation of TLA No. 356 which was
issued to Twin Peaks Development and Realty Corporation without public bidding and in violation of
forestry laws, rules and regulations; and, (3) the issuance of an order allowing petitioner to take possession
of all logs found in the concession area [Annexes "6" and "7" of the Petition; Rollo, pp. 54-63]. 

Petitioner made the following allegations:

(a) That on October 12, 1965, it entered into a timber license agreement designated as TLA No. 87 with the
Department of Agriculture and Natural Resources, represented by then Secretary Jose Feliciano, wherein it
was issued an exclusive license to cut, collect and remove timber except prohibited species within a
specified portion of public forest land with an area of 54,920 hectares located in the municipality of
Maddela, province of Nueva Vizcaya * from October 12, 1965 until June 30, 1990; 

(b) That on August 18, 1983, the Director of the Bureau of Forest Development [hereinafter referred to as
"Bureau"], Director Edmundo Cortes, issued a memorandum order stopping all logging operations in Nueva
Vizcaya and Quirino provinces, and cancelling the logging concession of petitioner and nine other forest
concessionaires, pursuant to presidential instructions and a memorandum order of the Minister of Natural
Resources Teodoro Pena [Annex "5" of the Petition; Rollo, p. 49]; 

(c) that on August 25, 1983, petitioner received a telegram from the Bureau, the contents of which were as
follows: 

PURSUANT TO THE INSTRUCTIONS OF THE PRESIDENT YOU ARE REQUESTED TO

STOP ALL LOGGING OPERATIONS TO CONSERVE REMAINING FORESTS PLEASE
CONDUCT THE ORDERLY PULL-OUT OF LOGGING MACHINERIES AND EQUIPMENT
AND COORDINATE WITH THE RESPECTIVE DISTRICT FORESTERS FOR THE
INVENTORY OF LOGS CUT PRIOR TO THIS ORDER THE SUBMISSION OF A
 COMPLIANCE REPORT WITHIN THIRTY DAYS SHALL BE APPRECIATED — [Annex
"4" of the Petition; Rollo, p. 48];

(d) That after the cancellation of its timber license agreement, it immediately sent a letter addressed to then
President Ferdinand Marcos which sought reconsideration of the Bureau's directive, citing in support
thereof its contributions to alleging that it was not given the forest conservation and opportunity to be heard
prior to the cancellation of its logging 531, but no operations (Annex "6" of the Petition; Rollo, pp. 50
favorable action was taken on this letter; 

(e) That barely one year thereafter, approximately one-half or 26,000 hectares of the area formerly covered
by TLA No. 87 was re-awarded to Twin Peaks Development and Reality Corporation under TLA No. 356
which was set to expire on July 31, 2009, while the other half was allowed to be logged by Filipinas
Loggers, Inc. without the benefit of a formal award or license; and, 

(f) That the latter entities were controlled or owned by relatives or cronies of deposed President Ferdinand
Marcos. Acting on petitioner's letter, the MNR through then Minister Ernesto Maceda issued an order dated
July 22, 1986 denying petitioner's request. The Ministry ruled that a timber license was not a contract within
the due process clause of the Constitution, but only a privilege which could be withdrawn whenever public
interest or welfare so demands, and that petitioner was not discriminated against in view of the fact that it
was among ten concessionaires whose licenses were revoked in 1983. Moreover, emphasis was made of
the total ban of logging operations in the provinces of Nueva Ecija, Nueva Vizcaya, Quirino and Ifugao
imposed on April 2, 1986, thus: 

xxx xxx xxx

It should be recalled that [petitioner's] earlier request for reinstatement has been denied in
view of the total ban of all logging operations in the provinces of Nueva Ecija, Nueva
Vizcaya, Quirino and Ifugao which was imposed for reasons of conservation and national
security.

The Ministry imposed the ban because it realizes the great responsibility it bear [sic] in
respect to forest t considers itself the trustee thereof. This being the case, it has to ensure
the availability of forest resources not only for the present, but also for the future
generations of Filipinos.

On the other hand, the activities of the insurgents in these parts of the country are well
documented. Their financial demands on logging concessionaires are well known. The
government, therefore, is well within its right to deprive its enemy of sources of funds in
order to preserve itself, its established institutions and the liberty and democratic way of
life of its people.

xxx xxx xxx

[Annex "9" of the Petition, pp. 2-4; Rollo, pp. 65-67.] 

Petitioner moved for reconsideration of the aforestated order reiterating, among others. its request that TLA
No. 356 issued to private respondent be declared null and void. The MNR however denied this motion in an
order dated September 15, 1986. stating in part: 

xxx xxx xxx

Regarding [petitioner's] request that the award of a 26,000 hectare portion of TLA No. 87
to Twin Peaks Realty Development Corporation under TLA No. 356 be declared null and
void, suffice it to say that the Ministry is now in the process of reviewing all contracts,
permits or other form of privileges for the exploration, development, exploitation, or
utilization of natural resources entered into, granted, issued or acquired before the
issuance of Proclamation No. 3, otherwise known as the Freedom Constitution for the
purpose of amending, modifying or revoking them when the national interest so requires. 

xxx xxx xxx

The Ministry, through the Bureau of Forest Development, has jurisdiction and authority
over all forest lands. On the basis of this authority, the Ministry issued the order banning all
logging operations/activities in Quirino province, among others, where movant's former
concession area is located. Therefore, the issuance of an order disallowing any person or
entity from removing cut or uncut logs from the portion of TLA No. 87, now under TLA No.
356, would constitute an unnecessary or superfluous act on the part of the Ministry. 

xxx xxx xxx

[Annex "11" of the Petition, pp. 3-4; Rollo, pp. 77-78.] 

On November 26, 1986, petitioner's supplemental motion for reconsideration was likewise denied.
Meanwhile, per MNR Administrative Order No. 54, series of 1986, issued on November 26, 1986, the
logging ban in the province of Quirino was lifted. 

Petitioner subsequently appealed from the orders of the MNR to the Office of the President. In a resolution
dated July 6, 1987, the Office of the President, acting through then Deputy Executive Secretary Catalino
Macaraig, denied petitioner's appeal for lack of merit. The Office of the President ruled that the appeal of
petitioner was prematurely filed, the matter not having been terminated in the MNR. Petitioner's motion for
reconsideration was denied on August 14, 1987.

Hence, petitioner filed directly with this Court a petition for certiorari, with prayer for the issuance of a
restraining order or writ of preliminary injunction, on August 27, 1987. On October 13, 1987, it filed a
supplement to its petition for certiorari. Thereafter, public and private respondents submitted their
respective comments, and petitioner filed its consolidated reply thereto. In a resolution dated May 22, 1989,
the Court resolved to give due course to the petition. 

After a careful study of the circumstances in the case at bar, the Court finds several factors which militate
against the issuance of a writ of certiorari in favor of petitioner. 
1. Firstly, the refusal of public respondents herein to reverse final and executory administrative orders does
not constitute grave abuse of discretion amounting to lack or excess of jurisdiction.

It is an established doctrine in this jurisdiction that the decisions and orders of administrative agencies have
upon their finality, the force and binding effect of a final judgment within the purview of the doctrine of  res
judicata. These decisions and orders are as conclusive upon the rights of the affected parties as though the
same had been rendered by a court of general jurisdiction. The rule of res judicata thus forbids the
reopening of a matter once determined by competent authority acting within their exclusive jurisdiction
[See Brillantes v. Castro, 99 Phil. 497 (1956); Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals,
G.R. No. L-15430, September 30, 1963, 9 SCRA 72; San Luis v. Court of Appeals, G.R. No. 80160, June
26, 1989]. 

In the case at bar, petitioner's letters to the Office of the President and the MNR [now the Department of
Environment and Natural Resources (DENR) dated March 17, 1986 and April 2, 1986, respectively, sought
the reconsideration of a memorandum order issued by the Bureau of Forest Development which cancelled
its timber license agreement in 1983, as well as the revocation of TLA No. 356 subsequently issued by the
Bureau to private respondents in 1984. 

But as gleaned from the record, petitioner did not avail of its remedies under the law, i.e. Section 8 of Pres.
Dec. No. 705 as amended, for attacking the validity of these administrative actions until after 1986. By the
time petitioner sent its letter dated April 2, 1986 to the newly appointed Minister of the MNR requesting
reconsideration of the above Bureau actions, these were already settled matters as far as petitioner was
concerned [See Rueda v. Court of Agrarian Relations, 106 Phil. 300 (1959); Danan v. Aspillera G.R. No. L-
17305, November 28, 1962, 6 SCRA 609; Ocampo v. Arboleda G.R. No. L-48190, August 31, 1987, 153
SCRA 374]. 

No particular significance can be attached to petitioner's letter dated September 19, 1983 which petitioner
claimed to have sent to then President Marcos [Annex "6" of Petition, Rollo, pp. 50-53], seeking the
reconsideration of the 1983 order issued by Director Cortes of the Bureau. It must be pointed out that the
averments in this letter are entirely different from the charges of fraud against officials under the previous
regime made by petitioner in its letters to public respondents herein. In the letter to then President Marcos,
petitioner simply contested its inclusion in the list of concessionaires, whose licenses were cancelled, by
defending its record of selective logging and reforestation practices in the subject concession area. Yet, no
other administrative steps appear to have been taken by petitioner until 1986, despite the fact that the
alleged fraudulent scheme became apparent in 1984 as evidenced by the awarding of the subject timber
concession area to other entities in that year.

2. Moreover, petitioner is precluded from availing of the benefits of a writ of certiorari in the present case
because he failed to file his petition within a reasonable period. 

The principal issue ostensibly presented for resolution in the instant petition is whether or not public
respondents herein acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
refusing to overturn administrative orders issued by their predecessors in the past regime. Yet, what the
petition ultimately seeks is the nullification of the Bureau orders cancelling TLA No. 87 and granting TLA
No. 356 to private respondent, which were issued way back in 1983 and 1984, respectively. 
Once again, the fact that petitioner failed to seasonably take judicial recourse to have the earlier
administrative actions reviewed by the courts through a petition for certiorari is prejudicial to its cause. For
although no specific time frame is fixed for the institution of a special civil action for certiorari under Rule 65
of the Revised Rules of Court, the same must nevertheless be done within a "reasonable time". The
yardstick to measure the timeliness of a petition for certiorari is the "reasonableness of the length of time
that had expired from the commission of the acts complained of up to the institution of the proceeding to
annul the same" [Toledo v. Pardo, G.R. No. 56761, November 19, 1982, 118 SCRA 566, 571]. And failure
to file the petition for certiorari within a reasonable period of time renders the petitioner susceptible to the
adverse legal consequences of laches [Municipality of Carcar v. Court of First Instance of Cebu, G.R. No.
L-31628, December 27, 1982, 119 SCRA 392). 

Laches is defined as the failure or neglect for an unreasonable and unexplained length of time to do that
which by exercising due diligence, could or should have been done earlier, or to assert a right within a
reasonable time, warranting a presumption that the party entitled thereto has either abandoned it or
declined to assert it [Tijam v. Sibonghanoy, G.R. No. L-21450, April 15, 1968, 23 SCRA 29; Seno v.
Mangubat, G.R. No. L-44339, December 2, 1987, 156 SCRA 113]. The rule is that unreasonable delay on
the part of a plaintiff in seeking to enforce an alleged right may, depending upon the circumstances, be
destructive of the right itself. Verily, the laws aid those who are vigilant, not those who sleep upon their
rights (Vigilantibus et non dormientibus jura subveniunt) [See Buenaventura v. David, 37 Phil. 435 (1918)]. 

In the case at bar, petitioner waited for at least three years before it finally filed a petition for certiorari with
the Court attacking the validity of the assailed Bureau actions in 1983 and 1984. Considering that
petitioner, throughout the period of its inaction, was not deprived of the opportunity to seek relief from the
courts which were normally operating at the time, its delay constitutes unreasonable and inexcusable
neglect, tantamount to laches. Accordingly, the writ of certiorari requiring the reversal of these orders will
not lie.

3. Finally, there is a more significant factor which bars the issuance of a writ of certiorari in favor of
petitioner and against public respondents herein. It is precisely this for which prevents the Court from
departing from the general application of the rules enunciated above.

A cursory reading of the assailed orders issued by public respondent Minister Maceda of the MNR which
were ed by the Office of the President, will disclose public policy consideration which effectively forestall
judicial interference in the case at bar, 

Public respondents herein, upon whose shoulders rests the task of implementing the policy to develop and
conserve the country's natural resources, have indicated an ongoing department evaluation of all timber
license agreements entered into, and permits or licenses issued, under the previous dispensation. In fact,
both the executive and legislative departments of the incumbent administration are presently taking stock of
its environmental policies with regard to the utilization of timber lands and developing an agenda for future
programs for their conservation and rehabilitation. 

The ongoing administrative reassessment is apparently in response to the renewed and growing global
concern over the despoliation of forest lands and the utter disregard of their crucial role in sustaining a
balanced ecological system. The legitimacy of such concern can hardly be disputed, most especially in this
country. The Court takes judicial notice of the profligate waste of the country's forest resources which has
not only resulted in the irreversible loss of flora and fauna peculiar to the region, but has produced even
more disastrous and lasting economic and social effects. The delicate balance of nature having been upset,
a vicious cycle of floods and droughts has been triggered and the supply of food and energy resources
required by the people seriously depleted. 

While there is a desire to harness natural resources to amass profit and to meet the country's immediate
financial requirements, the more essential need to ensure future generations of Filipinos of their survival in
a viable environment demands effective and circumspect action from the government to check further
denudation of whatever remains of the forest lands. Nothing less is expected of the government, in view of
the clear constitutional command to maintain a balanced and healthful ecology. Section 16 of Article II of
the 1987 Constitution provides: 

SEC. 16. The State shall protect and promote the right of the people to a balanced and
healthful ecology in accord with the rhythm and harmony of nature. 

Thus, while the administration grapples with the complex and multifarious problems caused by unbridled
exploitation of these resources, the judiciary will stand clear. A long line of cases establish the basic rule
that the courts will not interfere in matters which are addressed to the sound discretion of government
agencies entrusted with the regulation of activities coming under the special technical knowledge and
training of such agencies [See Espinosa v. Makalintal, 79 Phil. 134 (1947); Coloso v. Board of
Accountancy, 92 Phil. 938 (1953); Pajo v. Ago, 108 Phil. 905 (1960); Suarez v. Reyes, G.R. No. L-19828,
February 28, 1963, 7 SCRA 461; Ganitano v. Secretary of Agriculture and Natural Resources, G. R. No. L-
21167, March 31, 1966, 16 SCRA 543; Villegas v. Auditor General, G.R. No. L-21352, November 29, 1966,
18 SCRA 877; Manuel v. Villena, G.R. No. L-28218, February 27, 1971, 37 SCRA 745; Lacuesta v.
Herrera, G.R. No. L-33646, January 28, 1975, 62 SCRA 115; Lianga Bay Logging Co., Inc. v. Enage, G.R.
No. L-30637, July 16, 1987, 152 SCRA 80]. More so where, as in the present case, the interests of a
private logging company are pitted against that of the public at large on the pressing public policy issue of
forest conservation. For this Court recognizes the wide latitude of discretion possessed by the government
in determining the appropriate actions to be taken to preserve and manage natural resources, and the
proper parties who should enjoy the privilege of utilizing these resources [Director of Forestry v. Munoz,
G.R. No. L-24796, June 28, 1968, 23 SCRA 1183; Lim, Sr. v. The Secretary of Agriculture and Natural
Resources, G.R. No. L-26990, August 31, 1970, 34 SCRA 751]. Timber licenses, permits and license
agreements are the principal instruments by which the State regulates the utilization and disposition of
forest resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely
evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent or
irrevocable right to the particular concession area and the forest products therein. They may be validly
amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus,
they are not deemed contracts within the purview of the due process of law clause [See Sections 3 (ee)
and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October
27, 1983, 125 SCRA 302].

In fine, the legal precepts highlighted in the foregoing discussion more than suffice to justify the Court's
refusal to interfere in the DENR evaluation of timber licenses and permits issued under the previous
regime, or to pre-empt the adoption of appropriate corrective measures by the department. 

Nevertheless, the Court cannot help but express its concern regarding alleged irregularities in the issuance
of timber license agreements to a number of logging concessionaires. 
The grant of licenses or permits to exploit the country's timber resources, if done in contravention of the
procedure outlined in the law, or as a result of fraud and undue influence exerted on department officials, is
indicative of an arbitrary and whimsical exercise of the State's power to regulate the use and exploitation of
forest resources. The alleged practice of bestowing "special favors" to preferred individuals, regardless of
merit, would be an abuse of this power. And this Court will not be a party to a flagrant mockery of the
avowed public policy of conservation enshrined in the 1987 Constitution. Therefore, should the appropriate
case be brought showing a clear grave abuse of discretion on the part of officials in the DENR and related
bureaus with respect to the implementation of this public policy, the Court win not hesitate to step in and
wield its authority, when invoked, in the exercise of judicial powers under the Constitution [Section 1, Article
VIII]. 

However, petitioner having failed to make out a case showing grave abuse of discretion on the part of
public respondents herein, the Court finds no basis to issue a writ of certiorari and to grant any of the
affirmative reliefs sought. 

WHEREFORE, the present petition is DISMISSED.

SO ORDERED. 
G.R. No. 190837               March 5, 2014

REPUBLIC OF THE PHILIPPINES, represented by the BUREAU OF FOOD AND DRUGS (now FOOD
AND DRUG ADMINISTRATION), Petitioner, 
vs.
DRUGMAKER'S LABORATORIES, INC. and TERRAMEDIC, INC., Respondents.

DECISION

PERLAS-BERNABE, J.:

This is a direct recourse to the Court from the Regional Trial Court of Muntinlupa City, Branch 256 (RTC),
through a petition for review on certiorari, 1 raising a pure question of law. In particular, petitioner Republic of
the Philippines, represented by the Bureau.of Food and Drugs (BFAD), now Food and Drug Administration
(FDA), assails the Order 2dated December 18, 2009 of the RTC in Civil Case No. 08-124 which: (a)
declared BF AD Circular Nos. 1 and 8, series of 1997 (Circular Nos. 1 and 8, s. 1997) null and void; (b)
ordered the issuance of writs of permanent injunction and prohibition against the FDA in implementing the
aforesaid circulars; and ( c) directed the FDA to issue Certificates of Product Registration (CPR) in favor of
respondents Drugmaker's Laboratories, Inc. and Terrarriedic, Inc. (respondents).

The Facts

The FDA3 was created pursuant to Republic Act No. (RA) 3720, 4 otherwise known as the "Food, Drug, and
Cosmetic Act," primarily in order "to establish safety or efficacy standards and quality measures for foods,
drugs and devices, and cosmetic product[s]." 5 On March 15, 1989, the Department of Health (DOH), thru
then-Secretary Alfredo R.A. Bengzon, issued Administrative Order No. (AO) 67, s. 1989, entitled "Revised
Rules and Regulations on Registration of Pharmaceutical Products." Among others, it required drug
manufacturers to register certain drug and medicine products with the FDA before they may release the
same to the market for sale. In this relation, a satisfactory bioavailability 6/bioequivalence7 (BA/BE) test is
needed for a manufacturer to secure a CPR for these products. However, the implementation of the BA/BE
testing requirement was put on hold because there was no local facility capable of conducting the same.
The issuance of Circular No. 1, s. 1997 8 resumed the FDA’s implementation of the BA/BE testing
requirement with the establishment of BA/BE testing facilities in the country. Thereafter, the FDA issued
Circular No. 8, s. 19979 which provided additional implementation details concerning the BA/BE testing
requirement on drug products.10

Respondents manufacture and trade a "multisource pharmaceutical product" 11 with the generic name of
rifampicin12– branded as "Refam 200mg/5mL Suspension" (Refam) – for the treatment of adults and
children suffering from pulmonary and extra-pulmonary tuberculosis. 13 On November 15, 1996,
respondents applied for and were issued a CPR for such drug, valid for five (5) years, or until November
15, 2001.14 At the time of the CPR’s issuance, Refam did not undergo BA/BE testing since there was still no
facility capable of conducting BA/BE testing. Sometime in 2001, respondents applied for and were granted
numerous yearly renewals of their CPR for Refam, which lasted until November 15, 2006, albeit with the
condition that they submit satisfactory BA/BE test results for said drug. 15
Accordingly, respondents engaged the services of the University of the Philippines’ (Manila) Department of
Pharmacology and Toxicology, College of Medicine to conduct BA/BE testing on Refam, the results of
which were submitted to the FDA. 16 In turn, the FDA sent a letter dated July 31, 2006 to respondents,
stating that Refam is "not bioequivalent with the reference drug." 17 This notwithstanding, the FDA still
revalidated respondents’ CPR for Refam two (2) more times, effective until November 15, 2008, the second
of which came with a warning that no more further revalidations shall be granted until respondents submit
satisfactory BA/BE test results for Refam.18

Instead of submitting satisfactory BA/BE test results for Refam, respondents filed a petition for prohibition
and annulment of Circular Nos. 1 and 8, s. 1997 before the RTC, alleging that it is the DOH, and not the
FDA, which was granted the authority to issue and implement rules concerning RA 3720. As such, the
issuance of the aforesaid circulars and the manner of their promulgation contravened the law and the
Constitution.19 They further averred that that the non-renewal of the CPR due to failure to submit
satisfactory BA/BE test results would not only affect Refam, but their other products as well. 20

During the pendency of the case, RA 9711, 21 otherwise known as the "Food and Drug Administration [FDA]
Act of 2009," was enacted into law.

The RTC Ruling

In an Order22 dated December 18, 2009, the RTC ruled in favor of respondents, and thereby declared
Circular Nos. 1 and 8, s. 1997 null and void, ordered the issuance of writs of permanent injunction and
prohibition against the FDA in implementing the aforesaid circulars, and directed the FDA to issue CPRs in
favor of respondents’ products.

The RTC held that there is nothing in RA 3720 which granted either the FDA the authority to issue and
implement the subject circulars, or the Secretary of Health the authority to delegate his powers to the FDA.
For these reasons, it concluded that the issuance of Circular Nos. 1 and 8, s.

1997 constituted an illegal exercise of legislative and administrative powers and, hence, must be struck
down.23

Accordingly, the RTC issued a Writ of Permanent Injunction 24 dated January 19, 2010, enjoining the FDA
and all persons acting for and under it from enforcing Circular Nos. 1 and 8, s. 1997 and directing them to
approve the renewal and revalidation of respondents’ products without submitting satisfactory BA/BE test
results.

Aggrieved, the FDA sought direct recourse to the Court through the instant petition with an urgent prayer
for the immediate issuance of a temporary restraining order and/or a writ of preliminary injunction against
the implementation of the RTC’s Order dated December 18, 2009 and Writ of Permanent Injunction dated
January 19, 2010.25 The Court granted FDA’s application and issued a Temporary Restraining
Order26 dated February 24, 2010, effective immediately and continuing until further orders.

The Issue Before the Court

The primordial issue in this case is whether or not the FDA may validly issue and implement Circular Nos. 1
and 8, s. 1997. In resolving this issue, there is a need to determine whether or not the aforesaid circulars
partake of administrative rules and regulations and, as such, must comply with the requirements of the law
for its issuance.

The FDA contends that it has the authority to issue Circular Nos. 1 and 8, s. 1997 as it is the agency
mandated by law to administer and enforce laws, including rules and regulations issued by the DOH, that
pertain to the registration of pharmaceutical products. 27

For their part, respondents maintain that under RA 3720, the power to make rules to implement the law is
lodged with the Secretary of Health, not with the FDA. 28 They also argue that the assailed circulars are void
for lack of prior hearing, consultation, and publication. 29

The Court’s Ruling

The petition is meritorious.

Administrative agencies may exercise quasi-legislative or rule-making powers only if there exists a law
which delegates these powers to them. Accordingly, the rules so promulgated must be within the confines
of the granting statute and must involve no discretion as to what the law shall be, but merely the authority to
fix the details in the execution or enforcement of the policy set out in the law itself, so as to conform with the
doctrine of separation of powers and, as an adjunct, the doctrine of non-delegability of legislative power. 30

An administrative regulation may be classified as a legislative rule, an interpretative rule, or a contingent

rule. Legislative rules are in the nature of subordinate legislation and designed to implement a primary
legislation by providing the details thereof. 31 They usually implement existing law, imposing general, extra-
statutory obligations pursuant to authority properly delegated by Congress 32 and effect a change in existing
law or policy which affects individual rights and obligations. 33 Meanwhile, interpretative rules are intended to
interpret, clarify or explain existing statutory regulations under which the administrative body operates.
Their purpose or objective is merely to construe the statute being administered and purport to do no more
than interpret the statute. Simply, they try to say what the statute means and refer to no single person or
party in particular but concern all those belonging to the same class which may be covered by the said
rules.34 Finally, contingent rules are those issued by an administrative authority based on the existence of
certain facts or things upon which the enforcement of the law depends. 35

In general, an administrative regulation needs to comply with the requirements laid down by Executive
Order No. 292, s. 1987, otherwise known as the "Administrative Code of 1987," on prior notice, hearing,
and publication in order to be valid and binding, except when the same is merely an interpretative rule. This
is because "[w]hen an administrative rule is merely interpretative in nature, its applicability needs nothing
further than its bare issuance, for it gives no real consequence more than what the law itself has already
prescribed. When, on the other hand, the administrative rule goes beyond merely providing for the means
that can facilitate or render least cumbersome the implementation of the law but substantially increases the
burden of those governed, it behooves the agency to accord at least to those directly affected a chance to
be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of
law."36
In the case at bar, it is undisputed that RA 3720, as amended by Executive Order No. 175, s.
198737 prohibits, inter alia, the manufacture and sale of pharmaceutical products without obtaining the
proper CPR from the FDA. 38 In this regard, the FDA has been deputized by the same law to accept
applications for registration of pharmaceuticals and, after due course, grant or reject such applications. 39 To
this end, the said law expressly authorized the Secretary of Health, upon the recommendation of the FDA
Director, to issue rules and regulations that pertain to the registration of pharmaceutical products. 40

In accordance with his rule-making power under RA 3720, the Secretary of Health issued AO 67, s. 1989 in
order to provide a comprehensive set of guidelines covering the registration of pharmaceutical products.
AO 67, s. 1989, required, among others, that certain pharmaceutical products undergo BA/BE testing prior
to the issuance of CPR, contrary to respondents’ assertion that it was Circular Nos. 1 and 8, s. 1997 that
required such tests.41

Despite the fact that the BA/BE testing requirement was already in place as early as the date of effectivity
of AO 67, s. 1989, its implementation was indefinitely shelved due to lack of facilities capable of conducting
the same. It was only sometime in 1997 when technological advances in the country paved the way for the
establishment of BA/BE testing facilities, thus allowing the rule’s enforcement. Owing to these
developments, the FDA (then, the BFAD) issued Circular No. 1, s. 1997, the full text of which reads:

In Annex 1 of A.O. 67 s. 1989 which is entitled Requirement for Registration provides that
"Bioavailability/Bioequivalence study for certain drugs as determined by BFAD" is required for [(i)] Tried and
Tested Drug, (ii) Established Drug, and (iii) Pharmaceutical Innovation of Tried and Tested or Established
Drug.

Drugs requiring strict precaution in prescribing and dispensing contained in the List-B (Prime) were the
drugs identified by BFAD in the process of registration that will be required "Bioavailability/Bioequivalence"
studies. However, due to the supervening factor that there had yet been no bioavailability testing unit in the
country when the A.O. 67 s. 1989 became effective, the Bureau did not strictly enforce the said
requirement.

The supervening factor no longer exist [sic] as of date. As a matter of fact, one of the registered products
tested by the Bioavailability Testing Unit at the University of Sto. Tomas under the NDP Cooperation
Project of the Philippines and Australia failed to meet the standard of bioavailability. This finding brings forth
the fact that there may be registered products which do not or may no longer meet bioavailability standard.

Wherefore, all drugs manufacturers, traders, distributor-importers of products contained or identified in the
list b’ (prime) provided for by BFAD, a copy of which is made part of this circular, are advised that all
pending initial and renewal registration of the products aforementioned, as well as all applications for initial
and renewal registration of the same, shall henceforth be required to submit bioavailability test with
satisfactory results on the products sought to be registered or renewed conducted by any bioavailability
testing units here or abroad, duly recognized by the BFAD under the Dept. of Health.1âwphi1 (Emphases
and underscoring supplied)

The FDA then issued Circular No. 8, s. 1997 to supplement Circular No. 1, s. 1997 in that it reiterates the
importance of the BA/BE testing requirement originally provided for by AO 67, s. 1989.1âwphi1
A careful scrutiny of the foregoing issuances would reveal that AO 67, s. 1989 is actually the rule that
originally introduced the BA/BE testing requirement as a component of applications for the issuance of
CPRs covering certain pharmaceutical products. As such, it is considered an administrative regulation – a
legislative rule to be exact – issued by the Secretary of Health in consonance with the express authority
granted to him by RA 3720 to implement the statutory mandate that all drugs and devices should first be
registered with the FDA prior to their manufacture and sale. Considering that neither party contested the
validity of its issuance, the Court deems that AO 67, s. 1989 complied with the requirements of prior
hearing, notice, and publication pursuant to the presumption of regularity accorded to the government in the
exercise of its official duties.42

On the other hand, Circular Nos. 1 and 8, s. 1997 cannot be considered as administrative regulations
because they do not: (a) implement a primary legislation by providing the details thereof; (b) interpret,
clarify, or explain existing statutory regulations under which the FDA operates; and/or (c) ascertain the
existence of certain facts or things upon which the enforcement of RA 3720 depends. In fact, the only
purpose of these circulars is for the FDA to administer and supervise the implementation of the provisions
of AO 67, s. 1989, including those covering the BA/BE testing requirement, consistent with and pursuant to
RA 3720.43 Therefore, the FDA has sufficient authority to issue the said circulars and since they would not
affect the substantive rights of the parties that they seek to govern – as they are not, strictly speaking,
administrative regulations in the first place – no prior hearing, consultation, and publication are needed for
their validity.

In sum, the Court holds that Circular Nos. 1 and 8, s. 1997 are valid issuances and binding to all concerned
parties, including the respondents in this case.

As a final note, while the proliferation of generic drugs and medicines is indeed a welcome development as
it effectively ensures access to affordable quality drugs and medicines for all through their lower prices, the
State, through the FDA, which is the government instrumentality tasked on this matter, must nevertheless
be vigilant in ensuring that the generic drugs and medicines released to the market are safe and effective
for use.

WHEREFORE, the petition is GRANTED. The Order dated December 18, 2009 and the Writ of Permanent
Injunction dated January 19, 2010 of the Regional Trial Court of Muntinlupa City, Branch 256 in Civil Case
No. 08-124 are hereby SET ASIDE. BFAD Circular Nos. 1 and 8, series of 1997 are declared VALID.
Accordingly, the Court's Temporary Restraining Order dated February 24, 2010 is hereby made
PERMANENT.

SO ORDERED.
G.R. No. 164171             February 20, 2006

HON. EXECUTIVE SECRETARY, HON. SECRETARY OF THE DEPARTMENT OF TRANSPORTATION

AND COMMUNICATIONS (DOTC), COMMISSIONER OF CUSTOMS, ASSISTANT SECRETARY, LAND
TRANSPORTATION OFFICE (LTO), COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT ZONE, AND
CHIEF OF LTO, SUBIC BAY FREE PORT ZONE, Petitioners, 
vs.
SOUTHWING HEAVY INDUSTRIES, INC., represented by its President JOSE T. DIZON, UNITED
AUCTIONEERS, INC., represented by its President DOMINIC SYTIN, and MICROVAN, INC., represented
by its President MARIANO C. SONON, Respondents.

x---------------x

G.R. No. 164172             February 20, 2006

HON. EXECUTIVE SECRETARY, SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND

COMMUNICATION (DOTC), COMMISSIONER OF CUSTOMS, ASSISTANT SECRETARY, LAND
TRANSPORTATION OFFICE (LTO), COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT ZONE AND
CHIEF OF LTO, SUBIC BAY FREE PORT ZONE, Petitioners, 
vs.
SUBIC INTEGRATED MACRO VENTURES CORP., represented by its President YOLANDA
AMBAR,Respondent.

x---------------x

G.R. No. 168741             February 20, 2006

HON. EXECUTIVE SECRETARY, HON. SECRETARY OF FINANCE, THE CHIEF OF THE LAND
TRANSPORTATION OFFICE, THE COMMISSIONER OF CUSTOMS, and THE COLLECTOR OF
CUSTOMS, SUBIC SPECIAL ECONOMIC ZONE, Petitioners, 
vs.
MOTOR VEHICLE IMPORTERS ASSOCIATION OF SUBIC BAY FREEPORT, INC., represented by its
President ALFREDO S. GALANG, Respondent.

DECISION

YNARES-SANTIAGO, J.:

The instant consolidated petitions seek to annul and set aside the Decisions of the Regional Trial Court of
Olongapo City, Branch 72, in Civil Case No. 20-0-04 and Civil Case No. 22-0-04, both dated May 24, 2004;
and the February 14, 2005 Decision of the Court of Appeals in CA-G.R. SP. No. 83284, which declared
Article 2, Section 3.1 of Executive Order No. 156 (EO 156) unconstitutional. Said executive issuance
prohibits the importation into the country, inclusive of the Special Economic and Freeport Zone or the Subic
Bay Freeport (SBF or Freeport), of used motor vehicles, subject to a few exceptions.
The undisputed facts show that on December 12, 2002, President Gloria Macapagal-Arroyo, through
Executive Secretary Alberto G. Romulo, issued EO 156, entitled "Providing for a comprehensive industrial
policy and directions for the motor vehicle development program and its implementing guidelines." The
challenged provision states:

3.1 The importation into the country, inclusive of the Freeport, of all types of used motor vehicles is
prohibited, except for the following:

3.1.1 A vehicle that is owned and for the personal use of a returning resident or immigrant
and covered by an authority to import issued under the No-dollar Importation Program.
Such vehicles cannot be resold for at least three (3) years;

3.1.2 A vehicle for the use of an official of the Diplomatic Corps and authorized to be
imported by the Department of Foreign Affairs;

3.1.3 Trucks excluding pickup trucks;

1. with GVW of 2.5-6.0 tons covered by an authority to import issued by the DTI.

2. With GVW above 6.0 tons.

3.1.4 Buses:

1. with GVW of 6-12 tons covered by an authority to import issued by DTI;

2. with GVW above 12 tons.

3.1.5 Special purpose vehicles:

1. fire trucks

2. ambulances

3. funeral hearse/coaches

4. crane lorries

5. tractor heads and truck tractors

6. boom trucks

7. tanker trucks

8. tank lorries with high pressure spray gun

9. reefers or refrigerated trucks

 10. mobile drilling derricks

11. transit/concrete mixers

12. mobile radiological units

13. wreckers or tow trucks

14. concrete pump trucks

15. aerial/bucket flat-form trucks

16. street sweepers

17. vacuum trucks

18. garbage compactors

19. self loader trucks

20. man lift trucks

21. lighting trucks

22. trucks mounted with special purpose equipment

23. all other types of vehicle designed for a specific use.

The issuance of EO 156 spawned three separate actions for declaratory relief before Branch 72 of the
Regional Trial Court of Olongapo City, all seeking the declaration of the unconstitutionality of Article 2,
Section 3.1 of said executive order. The cases were filed by herein respondent entities, who or whose
members, are classified as Subic Bay Freeport Enterprises and engaged in the business of, among others,
importing and/or trading used motor vehicles.

G.R. No. 164171:

On January 16, 2004, respondents Southwing Heavy Industries, Inc., (Southwing) United Auctioneers, Inc.
(United Auctioneers), and Microvan, Inc. (Microvan), instituted a declaratory relief case docketed as Civil
Case No. 20-0-04,1 against the Executive Secretary, Secretary of Transportation and Communication,
Commissioner of Customs, Assistant Secretary and Head of the Land Transportation Office, Subic Bay
Metropolitan Authority (SBMA), Collector of Customs for the Port at Subic Bay Freeport Zone, and the
Chief of the Land Transportation Office at Subic Bay Freeport Zone.

Southwing, United Auctioneers and Microvan prayed that judgment be rendered (1) declaring Article 2,
Section 3.1 of EO 156 unconstitutional and illegal; (2) directing the Secretary of Finance, Commissioner of
Customs, Collector of Customs and the Chairman of the SBMA to allow the importation of used motor
vehicles; (2) ordering the Land Transportation Office and its subordinates inside the Subic Special
Economic Zone to process the registration of the imported used motor vehicles; and (3) in general, to allow
the unimpeded entry and importation of used motor vehicles subject only to the payment of the required
customs duties.

Upon filing of petitioners’ answer/comment, respondents Southwing and Microvan filed a motion for
summary judgment which was granted by the trial court. On May 24, 2004, a summary judgment was
rendered declaring that Article 2, Section 3.1 of EO 156 constitutes an unlawful usurpation of legislative
power vested by the Constitution with Congress. The trial court further held that the proviso is contrary to
the mandate of Republic Act No. 7227 (RA 7227) or the Bases Conversion and Development Act of 1992
which allows the free flow of goods and capital within the Freeport. The dispositive portion of the said
decision reads:

WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive Order 156 [Article 2,
Section] 3.1 for being unconstitutional and illegal; directing respondents Collector of Customs based at
SBMA to allow the importation and entry of used motor vehicles pursuant to the mandate of RA 7227;
directing respondent Chief of the Land Transportation Office and its subordinates inside the Subic Special
Economic Zone or SBMA to process the registration of imported used motor vehicle; and in general, to
allow unimpeded entry and importation of used motor vehicles to the Philippines subject only to the
payment of the required customs duties.

SO ORDERED.2

From the foregoing decision, petitioners sought relief before this Court via a petition for review on certiorari,
docketed as G.R. No. 164171.

G.R. No. 164172:

On January 20, 2004, respondent Subic Integrated Macro Ventures Corporation (Macro Ventures) filed with
the same trial court, a similar action for declaratory relief docketed as Civil Case No. 22-0-04, 3 with the
same prayer and against the same parties 4 as those in Civil Case No. 20-0-04.

In this case, the trial court likewise rendered a summary judgment on May 24, 2004, holding that Article 2,
Section 3.1 of EO 156, is repugnant to the constitution. 5 Elevated to this Court via a petition for review on
certiorari, Civil Case No. 22-0-04 was docketed as G.R. No. 164172.

G.R. No. 168741

On January 22, 2003, respondent Motor Vehicle Importers Association of Subic Bay Freeport, Inc.
(Association), filed another action for declaratory relief with essentially the same prayer as those in Civil
Case No. 22-0-04 and Civil Case No. 20-0-04, against the Executive Secretary, Secretary of Finance, Chief
of the Land Transportation Office, Commissioner of Customs, Collector of Customs at SBMA and the
Chairman of SBMA. This was docketed as Civil Case No. 30-0-2003, 6 before the same trial court.

In a decision dated March 10, 2004, the court a quo granted the Association’s prayer and declared the
assailed proviso as contrary to the Constitution, to wit:
WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive Order 156 [Article 2,
Section] 3.1 for being unconstitutional and illegal; directing respondents Collector of Customs based at
SBMA to allow the importation and entry of used motor vehicles pursuant to the mandate of RA 7227;
directing respondent Chief of the Land Transportation Office and its subordinates inside the Subic Special
Economic Zone or SBMA to process the registration of imported used motor vehicles; directing the
respondent Chairman of the SBMA to allow the entry into the Subic Special Economic Zone or SBMA
imported used motor vehicle; and in general, to allow unimpeded entry and importation of used motor
vehicles to the Philippines subject only to the payment of the required customs duties.

SO ORDERED.7

Aggrieved, the petitioners in Civil Case No. 30-0-2003, filed a petition for certiorari 8 with the Court of
Appeals (CA-G.R. SP. No. 83284) which denied the petition on February 14, 2005 and sustained the
finding of the trial court that Article 2, Section 3.1 of EO 156, is void for being repugnant to the constitution.
The dispositive portion thereof, reads:

WHEREFORE, the instant petition for certiorari is hereby DENIED. The assailed decision of the Regional
Trial Court, Third Judicial Region, Branch 72, Olongapo City, in Civil Case No. 30-0-2003, accordingly,
STANDS.

SO ORDERED.9

The aforequoted decision of the Court of Appeals was elevated to this Court and docketed as G.R. No.
168741. In a Resolution dated October 4, 2005, 10 said case was consolidated with G.R. No. 164171 and
G.R. No. 164172.

Petitioners are now before this Court contending that Article 2, Section 3.1 of EO 156 is valid and
applicable to the entire country, including the Freeeport. In support of their arguments, they raise
procedural and substantive issues bearing on the constitutionality of the assailed proviso. The  procedural
issues are: the lack of respondents’ locus standi to question the validity of EO 156, the propriety of
challenging EO 156 in a declaratory relief proceeding and the applicability of a judgment on the pleadings
in this case.

Petitioners argue that respondents will not be affected by the importation ban considering that their
certificate of registration and tax exemption do not authorize them to engage in the importation and/or
trading of used cars. They also aver that the actions filed by respondents do not qualify as declaratory relief
cases. Section 1, Rule 63 of the Rules of Court provides that a petition for declaratory relief may be filed
before there is a breach or violation of rights. Petitioners claim that there was already a breach of
respondents’ supposed right because the cases were filed more than a year after the issuance of EO 156.
In fact, in Civil Case No. 30-0-2003, numerous warrants of seizure and detention were issued against
imported used motor vehicles belonging to respondent Association’s members.

Petitioners’ arguments lack merit.

The established rule that the constitutionality of a law or administrative issuance can be challenged by one
who will sustain a direct injury as a result of its enforcement 11 has been satisfied in the instant case. The
broad subject of the prohibited importation is "all types of used motor vehicles." Respondents would
definitely suffer a direct injury from the implementation of EO 156 because their certificate of registration
and tax exemption authorize them to trade and/or import new and used motor vehicles and spare parts,
except "used cars."12 Other types of motor vehicles imported and/or traded by respondents and not falling
within the category of used cars would thus be subjected to the ban to the prejudice of their business.
Undoubtedly, respondents have the legal standing to assail the validity of EO 156.

As to the propriety of declaratory relief as a vehicle for assailing the executive issuance, suffice it to state
that any breach of the rights of respondents will not affect the case. In  Commission on Audit of the Province
of Cebu v. Province of Cebu,13 the Court entertained a suit for declaratory relief to finally settle the doubt as
to the proper interpretation of the conflicting laws involved, notwithstanding a violation of the right of the
party affected. We find no reason to deviate from said ruling mindful of the significance of the present case
to the national economy.

So also, summary judgments were properly rendered by the trial court because the issues involved in the
instant case were pure questions of law. A motion for summary judgment is premised on the assumption
that the issues presented need not be tried either because these are patently devoid of substance or that
there is no genuine issue as to any pertinent fact. It is a method sanctioned by the Rules of Court for the
prompt disposition of a civil action in which the pleadings raise only a legal issue, not a genuine issue as to
any material fact.14

At any rate, even assuming the procedural flaws raised by petitioners truly exist, the Court is not precluded
from brushing aside these technicalities and taking cognizance of the action filed by respondents
considering its importance to the public and in keeping with the duty to determine whether the other
branches of the government have kept themselves within the limits of the Constitution. 15

We now come to the substantive issues, which are: (1) whether there is statutory basis for the issuance of
EO 156; and (2) if the answer is in the affirmative, whether the application of Article 2, Section 3.1 of EO
156, reasonable and within the scope provided by law.

The main thrust of the petition is that EO 156 is constitutional because it was issued pursuant to EO 226,
the Omnibus Investment Code of the Philippines and that its application should be extended to the Freeport
because the guarantee of RA 7227 on the free flow of goods into the said zone is merely an exemption
from customs duties and taxes on items brought into the Freeport and not an open floodgate for all kinds of
goods and materials without restriction.

In G.R. No. 168741, the Court of Appeals invalidated Article 2, Section 3.1 of EO 156, on the ground of lack
of any statutory basis for the President to issue the same. It held that the prohibition on the importation of
used motor vehicles is an exercise of police power vested on the legislature and absent any enabling law,
the exercise thereof by the President through an executive issuance, is void.

Police power is inherent in a government to enact laws, within constitutional limits, to promote the order,
safety, health, morals, and general welfare of society. It is lodged primarily with the legislature. By virtue of
a valid delegation of legislative power, it may also be exercised by the President and administrative boards,
as well as the lawmaking bodies on all municipal levels, including the barangay. 16 Such delegation confers
upon the President quasi-legislative power which may be defined as the authority delegated by the law-
making body to the administrative body to adopt rules and regulations intended to carry out the provisions
of the law and implement legislative policy. 17 To be valid, an administrative issuance, such as an executive
order, must comply with the following requisites:

(1) Its promulgation must be authorized by the legislature;

(2) It must be promulgated in accordance with the prescribed procedure;

(3) It must be within the scope of the authority given by the legislature; and

(4) It must be reasonable.18

Contrary to the conclusion of the Court of Appeals, EO 156 actually satisfied the first requisite of a valid
administrative order. It has both constitutional and statutory bases.

Delegation of legislative powers to the President is permitted in Section 28(2) of Article VI of the
Constitution. It provides:

(2) The Congress may, by law, authorize the President to fix within specified limits, and subject to such
limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage
dues, and other duties or imposts within the framework of the national development program of the
Government.19 (Emphasis supplied)

The relevant statutes to execute this provision are:

1) The Tariff and Customs Code which authorizes the President, in the interest of national economy,
general welfare and/or national security, to, inter alia, prohibit the importation of any commodity. Section
401 thereof, reads:

Sec. 401. Flexible Clause. —

a. In the interest of national economy, general welfare and/or national security, and subject to the
limitations herein prescribed, the President, upon recommendation of the National Economic and
Development Authority (hereinafter referred to as NEDA), is hereby empowered: x x x (2) to establish
import quota or to ban imports of any commodity, as may be necessary; x x x Provided, That upon periodic
investigations by the Tariff Commission and recommendation of the NEDA, the President may cause a
gradual reduction of protection levels granted in Section One hundred and four of this Code, including
those subsequently granted pursuant to this section. (Emphasis supplied)

2) Executive Order No. 226, the Omnibus Investment Code of the Philippines which was issued on July 16,
1987, by then President Corazon C. Aquino, in the exercise of legislative power under the Provisional
Freedom Constitution,20 empowers the President to approve or reject the prohibition on the importation of
any equipment or raw materials or finished products. Pertinent provisions thereof, read:

ART. 4. Composition of the board. The Board of Investments shall be composed of seven (7) governors:
The Secretary of Trade and Industry, three (3) Undersecretaries of Trade and Industry to be chosen by the
President; and three (3) representatives from the government agencies and the private sector x x x.
ART. 7. Powers and duties of the Board.

xxxx

(12) Formulate and implement rationalization programs for certain industries whose operation may result in
dislocation, overcrowding or inefficient use of resources, thus impeding economic growth. For this purpose,
the Board may formulate guidelines for progressive manufacturing programs, local content programs,
mandatory sourcing requirements and dispersal of industries. In appropriate cases and upon approval of
the President, the Board may restrict, either totally or partially, the importation of any equipment or raw
materials or finished products involved in the rationalization program; (Emphasis supplied)

3) Republic Act No. 8800, otherwise known as the "Safeguard Measures Act" (SMA), and entitled "An Act
Protecting Local Industries By Providing Safeguard Measures To Be Undertaken In Response To
Increased Imports And Providing Penalties For Violation Thereof," 21 designated the Secretaries22 of the
Department of Trade and Industry (DTI) and the Department of Agriculture, in their capacity as alter egos of
the President, as the implementing authorities of the safeguard measures, which include, inter alia,
modification or imposition of any quantitative restriction on the importation of a product into the Philippines.
The purpose of the SMA is stated in the declaration of policy, thus:

SEC. 2. Declaration of Policy. – The State shall promote competitiveness of domestic industries and
producers based on sound industrial and agricultural development policies, and efficient use of human,
natural and technical resources. In pursuit of this goal and in the public interest, the State shall provide
safeguard measures to protect domestic industries and producers from increased imports which cause or
threaten to cause serious injury to those domestic industries and producers.

There are thus explicit constitutional and statutory permission authorizing the President to ban or regulate
importation of articles and commodities into the country.

Anent the second requisite, that is, that the order must be issued or promulgated in accordance with the
prescribed procedure, it is necessary that the nature of the administrative issuance is properly determined.
As in the enactment of laws, the general rule is that, the promulgation of administrative issuances requires
previous notice and hearing, the only exception being where the legislature itself requires it and mandates
that the regulation shall be based on certain facts as determined at an appropriate investigation. 23 This
exception pertains to the issuance of legislative rules as distinguished from interpretative rules which give
no real consequence more than what the law itself has already prescribed; 24 and are designed merely to
provide guidelines to the law which the administrative agency is in charge of enforcing. 25 A legislative rule,
on the other hand, is in the nature of subordinate legislation, crafted to implement a primary legislation.

In Commissioner of Internal Revenue v. Court of Appeals,26 and Commissioner of Internal Revenue v.

Michel J. Lhuillier Pawnshop, Inc.,27 the Court enunciated the doctrine that when an administrative rule
goes beyond merely providing for the means that can facilitate or render less cumbersome the
implementation of the law and substantially increases the burden of those governed, it behooves the
agency to accord at least to those directly affected a chance to be heard and, thereafter, to be duly
informed, before the issuance is given the force and effect of law.
In the instant case, EO 156 is obviously a legislative rule as it seeks to implement or execute primary
legislative enactments intended to protect the domestic industry by imposing a ban on the importation of a
specified product not previously subject to such prohibition. The due process requirements in the issuance
thereof are embodied in Section 401 28 of the Tariff and Customs Code and Sections 5 and 9 of the
SMA29 which essentially mandate the conduct of investigation and public hearings before the regulatory
measure or importation ban may be issued.

In the present case, respondents neither questioned before this Court nor with the courts below the
procedure that paved the way for the issuance of EO 156. What they challenged in their petitions before the
trial court was the absence of "substantive due process" in the issuance of the EO. 30 Their main contention
before the court a quo is that the importation ban is illogical and unfair because it unreasonably drives them
out of business to the prejudice of the national economy.

Considering the settled principle that in the absence of strong evidence to the contrary, acts of the other
branches of the government are presumed to be valid, 31 and there being no objection from the respondents
as to the procedure in the promulgation of EO 156, the presumption is that said executive issuance duly
complied with the procedures and limitations imposed by law.

To determine whether EO 156 has complied with the third and fourth requisites of a valid administrative
issuance, to wit, that it was issued within the scope of authority given by the legislature and that it is
reasonable, an examination of the nature of a Freeport under RA 7227 and the primordial purpose of the
importation ban under the questioned EO is necessary.

RA 7227 was enacted providing for, among other things, the sound and balanced conversion of the Clark
and Subic military reservations and their extensions into alternative productive uses in the form of Special
Economic and Freeport Zone, or the Subic Bay Freeport, in order to promote the economic and social
development of Central Luzon in particular and the country in general.

The Rules and Regulations Implementing RA 7227 specifically defines the territory comprising the Subic
Bay Freeport, referred to as the Special Economic and Freeport Zone in Section 12 of RA 7227 as "a
separate customs territory consisting of the City of Olongapo and the Municipality of Subic, Province of
Zambales, the lands occupied by the Subic Naval Base and its contiguous extensions as embraced,
covered and defined by the 1947 Philippine-U.S. Military Base Agreement as amended and within the
territorial jurisdiction of Morong and Hermosa, Province of Bataan, the metes and bounds of which shall be
delineated by the President of the Philippines; provided further that pending establishment of secure
perimeters around the entire SBF, the SBF shall refer to the area demarcated by the SBMA pursuant to
Section 1332 hereof."

Among the salient provisions of RA 7227 are as follows:

SECTION 12. Subic Special Economic Zone. —

xxxx

The abovementioned zone shall be subject to the following policies:

xxxx

(a) Within the framework and subject to the mandate and limitations of the Constitution and the
pertinent provisions of the Local Government Code, the Subic Special Economic Zone shall be
developed into a self-sustaining, industrial, commercial, financial and investment center to
generate employment opportunities in and around the zone and to attract and promote productive
foreign investments;

(b) The Subic Special Economic Zone shall be operated and managed as a separate customs
territory ensuring free flow or movement of goods and capital within, into and exported out of the
Subic Special Economic Zone, as well as provide incentives such as tax and duty-free importations
of raw materials, capital and equipment. However, exportation or removal of goods from the
territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be
subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax
laws of the Philippines;

The Freeport was designed to ensure free flow or movement of goods and capital within a portion of the
Philippine territory in order to attract investors to invest their capital in a business climate with the least
governmental intervention. The concept of this zone was explained by Senator Guingona in this wise:

Senator Guingona. Mr. President, the special economic zone is successful in many places, particularly
Hong Kong, which is a free port. The difference between a special economic zone and an industrial estate
is simply expansive in the sense that the commercial activities, including the establishment of banks,
services, financial institutions, agro-industrial activities, maybe agriculture to a certain extent.

This delineates the activities that would have the least of government intervention, and the running of the
affairs of the special economic zone would be run principally by the investors themselves, similar to a
housing subdivision, where the subdivision owners elect their representatives to run the affairs of the
subdivision, to set the policies, to set the guidelines.

We would like to see Subic area converted into a little Hong Kong, Mr. President, where there is a hub of
free port and free entry, free duties and activities to a maximum spur generation of investment and jobs.

While the investor is reluctant to come in the Philippines, as a rule, because of red tape and perceived
delays, we envision this special economic zone to be an area where there will be minimum government
interference.

The initial outlay may not only come from the Government or the Authority as envisioned here, but from
them themselves, because they would be encouraged to invest not only for the land but also for the
buildings and factories. As long as they are convinced that in such an area they can do business and reap
reasonable profits, then many from other parts, both local and foreign, would invest, Mr.
President.33 (Emphasis, added)

With minimum interference from the government, investors can, in general, engage in any kind of business
as well as import and export any article into and out of the Freeport. These are among the rights accorded
to Subic Bay Freeport Enterprises under Section 39 of the Rules and Regulations Implementing RA 7227,
thus –

SEC. 39. Rights and Obligations.- SBF Enterprises shall have the following rights and obligations:

a. To freely engage in any business, trade, manufacturing, financial or service activity, and to import and
export freely all types of goods into and out of the SBF, subject to the provisions of the Act, these Rules
and other regulations that may be promulgated by the SBMA;

Citing, inter alia, the interpellations of Senator Enrile, petitioners claim that the "free flow or movement of
goods and capital" only means that goods and material brought within the Freeport shall not be subject to
customs duties and other taxes and should not be construed as an open floodgate for entry of all kinds of
goods. They thus surmise that the importation ban on motor vehicles is applicable within the Freeport.
Pertinent interpellations of Senator Enrile on the concept of Freeport is as follows:

Senator Enrile: Mr. President, I think we are talking here of sovereign concepts, not territorial concepts. The
concept that we are supposed to craft here is to carve out a portion of our terrestrial domain as well as our
adjacent waters and say to the world: "Well, you can set up your factories in this area that we are
circumscribing, and bringing your equipment and bringing your goods, you are not subject to any taxes and
duties because you are not within the customs jurisdiction of the Republic of the Philippines, whether you
store the goods or only for purposes of transshipment or whether you make them into finished products
again to be reexported to other lands."

xxxx

My understanding of a "free port" is, we are in effect carving out a part of our territory and make it as if it
were foreign territory for purposes of our customs laws, and that people can come, bring their goods, store
them there and bring them out again, as long as they do not come into the domestic commerce of the
Republic.

We do not really care whether these goods are stored here. The only thing that we care is for our people to
have an employment because of the entry of these goods that are being discharged, warehoused and
reloaded into the ships so that they can be exported. That will generate employment for us. For as long as
that is done, we are saying, in effect, that we have the least contact with our tariff and customs laws and
our tax laws. Therefore, we consider these goods as outside of the customs jurisdiction of the Republic of
the Philippines as yet, until we draw them from this territory and bring them inside our domestic commerce.
In which case, they have to pass through our customs gate. I thought we are carving out this entire area
and convert it into this kind of concept. 34

However, contrary to the claim of petitioners, there is nothing in the foregoing excerpts which absolutely
limits the incentive to Freeport investors only to exemption from customs duties and taxes. Mindful of the
legislative intent to attract investors, enhance investment and boost the economy, the legislature could not
have limited the enticement only to exemption from taxes. The minimum interference policy of the
government on the Freeport extends to the kind of business that investors may embark on and the articles
which they may import or export into and out of the zone. A contrary interpretation would defeat the very
purpose of the Freeport and drive away investors.
It does not mean, however, that the right of Freeport enterprises to import all types of goods and article is
absolute. Such right is of course subject to the limitation that articles absolutely prohibited by law cannot be
imported into the Freeport.35 Nevertheless, in determining whether the prohibition would apply to the
Freeport, resort to the purpose of the prohibition is necessary.

In issuing EO 156, particularly the prohibition on importation under Article 2, Section 3.1, the President
envisioned to rationalize the importation of used motor vehicles and to enhance the capabilities of the
Philippine motor manufacturing firms to be globally competitive producers of completely build-up units and
their parts and components for the local and export markets. 36 In justifying the issuance of EO 156,
petitioners alleged that there has been a decline in the sales of new vehicles and a remarkable growth of
the sales of imported used motor vehicles. To address the same, the President issued the questioned EO
to prevent further erosion of the already depressed market base of the local motor vehicle industry and to
curtail the harmful effects of the increase in the importation of used motor vehicles. 37

Taking our bearings from the foregoing discussions, we hold that the importation ban runs afoul the third
requisitefor a valid administrative order. To be valid, an administrative issuance must not be ultra vires or
beyond the limits of the authority conferred. It must not supplant or modify the Constitution, its enabling
statute and other existing laws, for such is the sole function of the legislature which the other branches of
the government cannot usurp. As held in United BF Homeowner’s Association v. BF Homes, Inc.:38

The rule-making power of a public administrative body is a delegated legislative power, which it may not
use either to abridge the authority given it by Congress or the Constitution or to enlarge its power beyond
the scope intended. Constitutional and statutory provisions control what rules and regulations may be
promulgated by such a body, as well as with respect to what fields are subject to regulation by it. It may not
make rules and regulations which are inconsistent with the provisions of the Constitution or a statute,
particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the
purpose of a statute.

In the instant case, the subject matter of the laws authorizing the President to regulate or forbid importation
of used motor vehicles, is the domestic industry. EO 156, however, exceeded the scope of its application
by extending the prohibition on the importation of used cars to the Freeport, which RA 7227, considers to
some extent, a foreign territory. The domestic industry which the EO seeks to protect is actually the
"customs territory" which is defined under the Rules and Regulations Implementing RA 7227, as follows:

"the portion of the Philippines outside the Subic Bay Freeport where the Tariff and Customs Code of the
Philippines and other national tariff and customs laws are in force and effect."39

The proscription in the importation of used motor vehicles should be operative only outside the Freeport
and the inclusion of said zone within the ambit of the prohibition is an invalid modification of RA 7227.
Indeed, when the application of an administrative issuance modifies existing laws or exceeds the intended
scope, as in the instant case, the issuance becomes void, not only for being  ultra vires, but also for being
unreasonable.

This brings us to the fourth requisite. It is an axiom in administrative law that administrative authorities
should not act arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such rules
and regulations must be reasonable and fairly adapted to secure the end in view. If shown to bear no
reasonable relation to the purposes for which they were authorized to be issued, then they must be held to
be invalid.40

There is no doubt that the issuance of the ban to protect the domestic industry is a reasonable exercise of
police power. The deterioration of the local motor manufacturing firms due to the influx of imported used
motor vehicles is an urgent national concern that needs to be swiftly addressed by the President. In the
exercise of delegated police power, the executive can therefore validly proscribe the importation of these
vehicles. Thus, in Taxicab Operators of Metro Manila, Inc. v. Board of Transportation,41 the Court held that
a regulation phasing out taxi cabs more than six years old is a valid exercise of police power. The
regulation was sustained as reasonable holding that the purpose thereof was to promote the convenience
and comfort and protect the safety of the passengers.

The problem, however, lies with respect to the application of the importation ban to the Freeport. The Court
finds no logic in the all encompassing application of the assailed provision to the Freeport which is outside
the customs territory. As long as the used motor vehicles do not enter the customs territory, the injury or
harm sought to be prevented or remedied will not arise. The application of the law should be consistent with
the purpose of and reason for the law. Ratione cessat lex, et cessat lex. When the reason for the law
ceases, the law ceases. It is not the letter alone but the spirit of the law also that gives it life. 42 To apply the
proscription to the Freeport would not serve the purpose of the EO. Instead of improving the general
economy of the country, the application of the importation ban in the Freeport would subvert the avowed
purpose of RA 7227 which is to create a market that would draw investors and ultimately boost the national
economy.

In similar cases, we also declared void the administrative issuance or ordinances concerned for being
unreasonable. To illustrate, in De la Cruz v. Paras,43 the Court held as unreasonable and unconstitutional
an ordinance characterized by overbreadth. In that case, the Municipality of Bocaue, Bulacan, prohibited
the operation of all night clubs, cabarets and dance halls within its jurisdiction for the protection of public
morals. As explained by the Court:

x x x It cannot be said that such a sweeping exercise of a lawmaking power by Bocaue could qualify under
the term reasonable. The objective of fostering public morals, a worthy and desirable end can be attained
by a measure that does not encompass too wide a field. Certainly the ordinance on its face is characterized
by overbreadth. The purpose sought to be achieved could have been attained by reasonable restrictions
rather than by an absolute prohibition. The admonition in Salaveria should be heeded: "The Judiciary
should not lightly set aside legislative action when there is not a clear invasion of personal or property rights
under the guise of police regulation." It is clear that in the guise of a police regulation, there was in this
instance a clear invasion of personal or property rights, personal in the case of those individuals desirous of
patronizing those night clubs and property in terms of the investments made and salaries to be earned by
those therein employed.

Lupangco v. Court of Appeals,44 is a case involving a resolution issued by the Professional Regulation
Commission which prohibited examinees from attending review classes and receiving handout materials,
tips, and the like three days before the date of examination in order to preserve the integrity and purity of
the licensure examinations in accountancy. Besides being unreasonable on its face and violative of
academic freedom, the measure was found to be more sweeping than what was necessary, viz:
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the
licensure examinations will be eradicated or at least minimized. Making the examinees suffer by depriving
them of legitimate means of review or preparation on those last three precious days — when they should
be refreshing themselves with all that they have learned in the review classes and preparing their mental
and psychological make-up for the examination day itself — would be like uprooting the tree to get rid of a
rotten branch. What is needed to be done by the respondent is to find out the source of such leakages and
stop it right there. If corrupt officials or personnel should be terminated from their loss, then so be it. Fixers
or swindlers should be flushed out. Strict guidelines to be observed by examiners should be set up and if
violations are committed, then licenses should be suspended or revoked. x x x

In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,45 the Court likewise struck down as
unreasonable and overbreadth a city ordinance granting an exclusive franchise for 25 years, renewable for
another 25 years, to one entity for the construction and operation of one common bus and jeepney terminal
facility in Lucena City. While professedly aimed towards alleviating the traffic congestion alleged to have
been caused by the existence of various bus and jeepney terminals within the city, the ordinance was held
to be beyond what is reasonably necessary to solve the traffic problem in the city.

By parity of reasoning, the importation ban in this case should also be declared void for its too sweeping
and unnecessary application to the Freeport which has no bearing on the objective of the prohibition. If the
aim of the EO is to prevent the entry of used motor vehicles from the Freeport to the customs territory, the
solution is not to forbid entry of these vehicles into the Freeport, but to intensify governmental campaign
and measures to thwart illegal ingress of used motor vehicles into the customs territory.

At this juncture, it must be mentioned that on June 19, 1993, President Fidel V. Ramos issued Executive
Order No. 97-A, "Further Clarifying The Tax And Duty-Free Privilege Within The Subic Special Economic
And Free Port Zone," Section 1 of which provides:

SECTION 1. The following guidelines shall govern the tax and duty-free privilege within the Secured Area
of the Subic Special Economic and Free Port Zone:

1.1. The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the only
completely tax and duty-free area in the SSEFPZ. Business enterprises and individuals (Filipinos and
foreigners) residing within the Secured Area are free to import raw materials, capital goods, equipment, and
consumer items tax and dutry-free. Consumption items, however, must be consumed within the Secured
Area. Removal of raw materials, capital goods, equipment and consumer items out of the Secured Area for
sale to non-SSEFPZ registered enterprises shall be subject to the usual taxes and duties, except as may
be provided herein.

In Tiu v. Court of Appeals46 as reiterated in Coconut Oil Refiners Association, Inc. v. Torres, 47 this provision
limiting the special privileges on tax and duty-free importation in the presently fenced-in former Subic Naval
Base has been declared valid and constitutional and in accordance with RA 7227. Consistent with these
rulings and for easier management and monitoring of activities and to prevent fraudulent importation of
merchandise and smuggling, the free flow and importation of used motor vehicles shall be operative only
within the "secured area."

In sum, the Court finds that Article 2, Section 3.1 of EO 156 is void insofar as it is made applicable to the
presently secured fenced-in former Subic Naval Base area as stated in Section 1.1 of EO 97-A. Pursuant to
the separability clause48 of EO 156, Section 3.1 is declared valid insofar as it applies to the customs
territory or the Philippine territory outside the presently secured fenced-in former Subic Naval Base area as
stated in Section 1.1 of EO 97-A. Hence, used motor vehicles that come into the Philippine territory  via the
secured fenced-in former Subic Naval Base area may be stored, used or traded therein, or exported out of
the Philippine territory, but they cannot be imported into the Philippine territory outside of the secured
fenced-in former Subic Naval Base area.

WHEREFORE, the petitions are PARTIALLY GRANTED and the May 24, 2004 Decisions of Branch 72,
Regional Trial Court of Olongapo City, in Civil Case No. 20-0-04 and Civil Case No. 22-0-04; and the
February 14, 2005 Decision of the Court of Appeals in CA-G.R. SP No. 63284, are MODIFIED insofar as
they declared Article 2, Section 3.1 of Executive Order No. 156, void in its entirety.

Said provision is declared VALID insofar as it applies to the Philippine territory outside the presently
fenced-in former Subic Naval Base area and VOID with respect to its application to the secured fenced-in
former Subic Naval Base area.

SO ORDERED.
G.R. Nos. 179431-32               June 22, 2010

LUIS K. LOKIN, JR., as the second nominee of CITIZENS BATTLE AGAINST CORRUPTION
(CIBAC),Petitioner, 
vs.
COMMISSION ON ELECTIONS and the HOUSE OF REPRESENTATIVES, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 180443

LUIS K. LOKIN, JR., Petitioner, 

vs.
COMMISSION ON ELECTIONS (COMELEC), EMMANUEL JOEL J. VILLANUEVA, CINCHONA C.
GONZALES and ARMI JANE R. BORJE, Respondents.

DECISION

BERSAMIN, J.:

The principal question posed in these consolidated special civil actions for certiorari and mandamus is
whether the Commission on Elections (COMELEC) can issue implementing rules and regulations (IRRs)
that provide a ground for the substitution of a party-list nominee not written in Republic Act (R.A.) No.
7941,1 otherwise known as the Party-List System Act, the law that the COMELEC thereby implements.

Common Antecedents

The Citizens’ Battle Against Corruption (CIBAC) was one of the organized groups duly registered under the
party-list system of representation that manifested their intent to participate in the May 14, 2007
synchronized national and local elections. Together with its manifestation of intent to participate, 2 CIBAC,
through its president, Emmanuel Joel J. Villanueva, submitted a list of five nominees from which its
representatives would be chosen should CIBAC obtain the required number of qualifying votes. The
nominees, in the order that their names appeared in the certificate of nomination dated March 29,
2007,3 were: (1) Emmanuel Joel J. Villanueva; (2) herein petitioner Luis K. Lokin, Jr.; (3) Cinchona C. Cruz-
Gonzales; (4) Sherwin Tugna; and (5) Emil L. Galang. The nominees’ certificates of acceptance were
attached to the certificate of nomination filed by CIBAC. The list of nominees was later published in two
newspapers of general circulation, The Philippine Star News 4 (sic) and The Philippine Daily Inquirer.5

Prior to the elections, however, CIBAC, still through Villanueva, filed a certificate of nomination, substitution
and amendment of the list of nominees dated May 7, 2007, 6 whereby it withdrew the nominations of Lokin,
Tugna and Galang and substituted Armi Jane R. Borje as one of the nominees. The amended list of
nominees of CIBAC thus included: (1) Villanueva, (2) Cruz-Gonzales, and (3) Borje. 

Following the close of the polls, or on June 20, 2007, Villanueva sent a letter to COMELEC Chairperson
Benjamin Abalos,7 transmitting therewith the signed petitions of more than 81% of the CIBAC members, in
order to confirm the withdrawal of the nomination of Lokin, Tugna and Galang and the substitution of Borje.
In their petitions, the members of CIBAC averred that Lokin and Tugna were not among the nominees
presented and proclaimed by CIBAC in its proclamation rally held in May 2007; and that Galang had
signified his desire to focus on his family life. 

On June 26, 2007, CIBAC, supposedly through its counsel, filed with the COMELEC en banc sitting as the
National Board of Canvassers a motion seeking the proclamation of Lokin as its second nominee. 8 The
right of CIBAC to a second seat as well as the right of Lokin to be thus proclaimed were purportedly based
on Party-List Canvass Report No. 26, which showed CIBAC to have garnered a grand total of 744,674
votes. Using all relevant formulas, the motion asserted that CIBAC was clearly entitled to a second seat
and Lokin to a proclamation. 

The motion was opposed by Villanueva and Cruz-Gonzales.

Notwithstanding Villanueva’s filing of the certificate of nomination, substitution and amendment of the list of
nominees and the petitions of more than 81% of CIBAC members, the COMELEC failed to act on the
matter, prompting Villanueva to file a petition to confirm the certificate of nomination, substitution and
amendment of the list of nominees of CIBAC on June 28, 2007. 9

On July 6, 2007, the COMELEC issued Resolution No. 8219, 10 whereby it resolved to set the matter
pertaining to the validity of the withdrawal of the nominations of Lokin, Tugna and Galang and the
substitution of Borje for proper disposition and hearing. The case was docketed as E.M. No. 07-054. 

In the meantime, the COMELEC en banc, sitting as the National Board of Canvassers, issued National
Board of Canvassers (NBC) Resolution No. 07-60 dated July 9, 2007 11 to partially proclaim the following
parties, organizations and coalitions participating under the Party-List System as having won in the May 14,
2007 elections, namely: Buhay Hayaan Yumabong, Bayan Muna, CIBAC, Gabriela Women's Party,
Association of Philippine Electric Cooperatives, Advocacy for Teacher Empowerment Through Action,
Cooperation and Harmony Towards Educational Reforms, Inc., Akbayan! Citizen's Action Party, Alagad,
Luzon Farmers Party, Cooperative-Natco Network Party, Anak Pawis, Alliance of Rural Concerns and
Abono; and to defer the proclamation of the nominees of the parties, organizations and coalitions with
pending disputes until final resolution of their respective cases.

The COMELEC en banc issued another resolution, NBC Resolution No. 07-72 dated July 18,
2007,12 proclaiming Buhay Hayaan Yumabong as entitled to 2 additional seats and Bayan Muna, CIBAC,
Gabriela Women's Party, and Association of Philippine Electric Cooperatives to an additional seat each;
and holding in abeyance the proclamation of the nominees of said parties, organizations and coalitions with
pending disputes until the final resolution of their respective cases.

With the formal declaration that CIBAC was entitled to an additional seat, Ricardo de los Santos,
purportedly as secretary general of CIBAC, informed Roberto P. Nazareno, Secretary General of the House
of Representatives, of the promulgation of NBC Resolution No. 07-72 and requested that Lokin be formally
sworn in by Speaker Jose de Venecia, Jr. to enable him to assume office. Nazareno replied, however, that
the request of Delos Santos could not be granted because COMELEC Law Director Alioden D. Dalaig had
notified him of the pendency of E.M. 07-054.
On September 14, 2007, the COMELEC en banc resolved E.M. No. 07-05413 thuswise:

WHEREFORE, considering the above discussion, the Commission hereby approves the withdrawal of the
nomination of Atty. Luis K. Lokin, Sherwin N. Tugna and Emil Galang as second, third and fourth nominees
respectively and the substitution thereby with Atty. Cinchona C. Cruz-Gonzales as second nominee and
Atty. Armi Jane R. Borje as third nominee for the party list CIBAC. The new order of CIBAC's nominees
therefore shall be:

1. Emmanuel Joel J. Villanueva

2. Cinchona C. Cruz-Gonzales

3. Armi Jane R. Borje 

SO ORDERED.

The COMELEC en banc explained that the actions of Villanueva in his capacity as the president of CIBAC
were presumed to be within the scope of his authority as such; that the president was charged by Section 1
of Article IV of the CIBAC By-Laws to oversee and direct the corporate activities, which included the act of
submitting the party's manifestation of intent to participate in the May 14, 2007 elections as well as its
certificate of nominees; that from all indications, Villanueva as the president of CIBAC had always been
provided the leeway to act as the party's representative and that his actions had always been considered
as valid; that the act of withdrawal, although done without any written Board approval, was accomplished
with the Board’s acquiescence or at least understanding; and that the intent of the party should be given
paramount consideration in the selection of the nominees. 

As a result, the COMELEC en banc proclaimed Cruz-Gonzales as the official second nominee of

CIBAC.14 Cruz-Gonzales took her oath of office 

as a Party-List Representative of CIBAC on September 17, 2007. 15

Precís of the Consolidated Cases

In G.R. No. 179431 and G.R. No. 179432, Lokin seeks through mandamus to compel respondent
COMELEC to proclaim him as the official second nominee of CIBAC.

In G.R. No. 180443, Lokin assails Section 13 of Resolution No. 7804 promulgated on January 12,
2007;16 and the resolution dated September 14, 2007 issued in E.M. No. 07-054 (approving CIBAC’s
withdrawal of the nominations of Lokin, Tugna and Galang as CIBAC’s second, third and fourth nominees,
respectively, and the substitution by Cruz-Gonzales and Borje in their stead, based on the right of CIBAC to
change its nominees under Section 13 of Resolution No. 7804). 17 He alleges that Section 13 of Resolution
No. 7804 expanded Section 8 of R.A. No. 7941. 18the law that the COMELEC seeks to thereby implement.

In its comment, the COMELEC asserts that a petition for certiorari is an inappropriate recourse in law due
to the proclamation of Cruz-Gonzales as Representative and her assumption of that office; that Lokin’s
proper recourse was an electoral protest filed in the House of Representatives Electoral Tribunal (HRET);
and that, therefore, the Court has no jurisdiction over the matter being raised by Lokin.

For its part, CIBAC posits that Lokin is guilty of forum shopping for filing a petition for mandamus and a
petition for certiorari, considering that both petitions ultimately seek to have him proclaimed as the second
nominee of CIBAC. 

Issues

The issues are the following:

(a) Whether or not the Court has jurisdiction over the controversy;

(b) Whether or not Lokin is guilty of forum shopping;

(c) Whether or not Section 13 of Resolution No. 7804 is unconstitutional and violates the Party-List
System Act; and

(d) Whether or not the COMELEC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in approving the withdrawal of the nominees of CIBAC and allowing the
amendment of the list of nominees of CIBAC without any basis in fact or law and after the close of
the polls, and in ruling on matters that were intra-corporate in nature.

Ruling

The petitions are granted.

A
The Court has jurisdiction over the case

The COMELEC posits that once the proclamation of the winning party-list organization has been done and
its nominee has assumed office, any question relating to the election, returns and qualifications of the
candidates to the House of Representatives falls under the jurisdiction of the HRET pursuant to Section 17,
Article VI of the 1987 Constitution. Thus, Lokin should raise the question he poses herein either in an
election protest or in a special civil action for quo warranto in the HRET, not in a special civil action for
certiorari in this Court.

We do not agree.

An election protest proposes to oust the winning candidate from office. It is strictly a contest between the
defeated and the winning candidates, based on the grounds of electoral frauds and irregularities, to
determine who between them has actually obtained the majority of the legal votes cast and is entitled to
hold the office. It can only be filed by a candidate who has duly filed a certificate of candidacy and has been
voted for in the preceding elections.
A special civil action for quo warranto refers to questions of disloyalty to the State, or of ineligibility of the
winning candidate. The objective of the action is to unseat the ineligible person from the office, but not to
install the petitioner in his place. Any voter may initiate the action, which is, strictly speaking, not a contest
where the parties strive for supremacy because the petitioner will not be seated even if the respondent may
be unseated.

The controversy involving Lokin is neither an election protest nor an action for quo warranto, for it concerns
a very peculiar situation in which Lokin is seeking to be seated as the second nominee of CIBAC. Although
an election protest may properly be available to one party-list organization seeking to unseat another party-
list organization to determine which between the defeated and the winning party-list organizations actually
obtained the majority of the legal votes, Lokin’s case is not one in which a nominee of a particular party-list
organization thereby wants to unseat another nominee of the same party-list organization. Neither does an
action for quo warranto lie, considering that the case does not involve the ineligibility and disloyalty of Cruz-
Gonzales to the Republic of the Philippines, or some other cause of disqualification for her. 

Lokin has correctly brought this special civil action for certiorari against the COMELEC to seek the review
of the September 14, 2007 resolution of the COMELEC in accordance with Section 7 of Article IX-A of the
1987 Constitution, notwithstanding the oath and assumption of office by Cruz-Gonzales. The constitutional
mandate is now implemented by Rule 64 of the 1997 Rules of Civil Procedure, which provides for the
review of the judgments, final orders or resolutions of the COMELEC and the Commission on Audit. As
Rule 64 states, the mode of review is by a petition for certiorari in accordance with Rule 65 to be filed in the
Supreme Court within a limited period of 30 days. Undoubtedly, the Court has original and exclusive
jurisdiction over Lokin’s petitions for certiorari and for mandamus against the COMELEC. 

B 
Petitioner is not guilty of forum shopping

Forum shopping consists of the filing of multiple suits involving the same parties for the same cause of
action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. Thus,
forum shopping may arise: (a) whenever as a result of an adverse decision in one forum, a party seeks a
favorable decision (other than by appeal or certiorari) in another; or (b) if, after having filed a petition in the
Supreme Court, a party files another petition in the Court of Appeals, because he thereby deliberately splits
appeals "in the hope that even as one case in which a particular remedy is sought is dismissed, another
case (offering a similar remedy) would still be open"; or (c) where a party attempts to obtain a writ of
preliminary injunction from a court after failing to obtain the writ from another court. 19

What is truly important to consider in determining whether forum shopping exists or not is the vexation
caused to the courts and the litigants by a party who accesses different courts and administrative agencies
to rule on the same or related causes or to grant the same or substantially the same reliefs, in the process
creating the possibility of conflicting decisions being rendered by the different fora upon the same issue. 20

The filing of identical petitions in different courts is prohibited, because such act constitutes forum
shopping, a malpractice that is proscribed and condemned as trifling with the courts and as abusing their
processes. Forum shopping is an improper conduct that degrades the administration of justice. 21

Nonetheless, the mere filing of several cases based on the same incident does not necessarily constitute
forum shopping. The test is whether the several actions filed involve the same transactions and the same
essential facts and circumstances.22 The actions must also raise identical causes of action, subject matter,
and issues.23 Elsewise stated, forum shopping exists where the elements of litis pendentia are present, or
where a final judgment in one case will amount to res judicata in the other.24

Lokin has filed the petition for mandamus to compel the COMELEC to proclaim him as the second nominee
of CIBAC upon the issuance of NBC Resolution No. 07-72 (announcing CIBAC’s entitlement to an
additional seat in the House of Representatives), and to strike down the provision in NBC Resolution No.
07-60 and NBC Resolution No. 07-72 holding in abeyance "all proclamation of the nominees of concerned
parties, organizations and coalitions with pending disputes shall likewise be held in abeyance until final
resolution of their respective cases." He has insisted that the COMELEC had the ministerial duty to
proclaim him due to his being CIBAC’s second nominee; and that the COMELEC had no authority to
exercise discretion and to suspend or defer the proclamation of winning party-list organizations with
pending disputes.

On the other hand, Lokin has resorted to the petition for certiorari to assail the September 14, 2007
resolution of the COMELEC (approving the withdrawal of the nomination of Lokin, Tugna and Galang and
the substitution by Cruz-Gonzales as the second nominee and Borje as the third nominee); and to
challenge the validity of Section 13 of Resolution No. 7804, the COMELEC’s basis for allowing CIBAC’s
withdrawal of Lokin’s nomination.

Applying the test for forum shopping, the consecutive filing of the action for certiorari and the action for
mandamus did not violate the rule against forum shopping even if the actions involved the same parties,
because they were based on different causes of action and the reliefs they sought were different. 

C
Invalidity of Section 13 of Resolution No. 7804

The legislative power of the Government is vested exclusively in the Legislature in accordance with the
doctrine of separation of powers. As a general rule, the Legislature cannot surrender or abdicate its
legislative power, for doing so will be unconstitutional. Although the power to make laws cannot be
delegated by the Legislature to any other authority, a power that is not legislative in character may be
delegated.25

Under certain circumstances, the Legislature can delegate to executive officers and administrative boards
the authority to adopt and promulgate IRRs. To render such delegation lawful, the Legislature must declare
the policy of the law and fix the legal principles that are to control in given cases. The Legislature should set
a definite or primary standard to guide those empowered to execute the law. For as long as the policy is
laid down and a proper standard is established by statute, there can be no unconstitutional delegation of
legislative power when the Legislature leaves to selected instrumentalities the duty of making subordinate
rules within the prescribed limits, although there is conferred upon the executive officer or administrative
board a large measure of discretion. There is a distinction between the delegation of power to make a law
and the conferment of an authority or a discretion to be exercised under and in pursuance of the law, for
the power to make laws necessarily involves a discretion as to what it shall be. 26

The authority to make IRRs in order to carry out an express legislative purpose, or to effect the operation
and enforcement of a law is not a power exclusively legislative in character, but is rather administrative in
nature. The rules and regulations adopted and promulgated must not, however, subvert or be contrary to
existing statutes. The function of promulgating IRRs may be legitimately exercised only for the purpose of
carrying out the provisions of a law. The power of administrative agencies is confined to implementing the
law or putting it into effect. Corollary to this is that administrative regulation cannot extend the law and
amend a legislative enactment. It is axiomatic that the clear letter of the law is controlling and cannot be
amended by a mere administrative rule issued for its implementation. Indeed, administrative or executive
acts shall be valid only when they are not contrary to the laws or the Constitution. 27

To be valid, therefore, the administrative IRRs must comply with the following requisites to be valid: 28

1. Its promulgation must be authorized by the Legislature;

2. It must be within the scope of the authority given by the Legislature;

3. It must be promulgated in accordance with the prescribed procedure; and

4. It must be reasonable. 

The COMELEC is constitutionally mandated to enforce and administer all laws and regulations relative to
the conduct of an election, a plebiscite, an initiative, a referendum, and a recall. 29 In addition to the powers
and functions conferred upon it by the Constitution, the COMELEC is also charged to promulgate IRRs
implementing the provisions of the Omnibus Election Code or other laws that the COMELEC enforces and
administers.30

The COMELEC issued Resolution No. 7804 pursuant to its powers under the Constitution, Batas
Pambansa Blg. 881, and the Party-List System Act. 31 Hence, the COMELEC met the first requisite.

The COMELEC also met the third requisite. There is no question that Resolution No. 7804 underwent the
procedural necessities of publication and dissemination in accordance with the procedure prescribed in the
resolution itself. 

Whether Section 13 of Resolution No. 7804 was valid or not is thus to be tested on the basis of whether the
second and fourth requisites were met. It is in this respect that the challenge of Lokin against Section 13
succeeds.

As earlier said, the delegated authority must be properly exercised. This simply means that the resulting
IRRs must not be ultra vires as to be issued beyond the limits of the authority conferred. It is basic that an
administrative agency cannot amend an act of Congress, 32 for administrative IRRs are solely intended to
carry out, not to supplant or to modify, the law. The administrative agency issuing the IRRs may not
enlarge, alter, or restrict the provisions of the law it administers and enforces, and cannot engraft additional
non-contradictory requirements not contemplated by the Legislature. 33

Section 8 of R.A. No. 7941 reads:

Section 8. Nomination of Party-List Representatives.-Each registered party, organization or coalition shall

submit to the COMELEC not later that forty-five (45) days before the election a list of names, not less than
five (5), from which party-list representatives shall be chosen in case it obtains the required number of
votes.

A person may be nominated in one (1) list only. Only persons who have given their consent in writing may
be named in the list. The list shall not include any candidate of any elective office or a person who has lost
his bid for an elective office in the immediately preceding election. No change of names or alteration of the
order of nominees shall be allowed after the same shall have been submitted to the COMELEC except in
cases where the nominee dies, or withdraws in writing his nomination, becomes incapacitated in which
case the name of the substitute nominee shall be placed last in the list. Incumbent sectoral representatives
in the House of Representatives who are nominated in the party-list system shall not be considered
resigned.

The provision is daylight clear. The Legislature thereby deprived the party-list organization of the right to
change its nominees or to alter the order of nominees once the list is submitted to the COMELEC, except
when: (a) the nominee dies; (b) the nominee withdraws in writing his nomination; or (c) the nominee
becomes incapacitated. The provision must be read literally because its language is plain and free from
ambiguity, and expresses a single, definite, and sensible meaning. Such meaning is conclusively presumed
to be the meaning that the Legislature has intended to convey. Even where the courts should be convinced
that the Legislature really intended some other meaning, and even where the literal interpretation should
defeat the very purposes of the enactment, the explicit declaration of the Legislature is still the law, from
which the courts must not depart. 34 When the law speaks in clear and categorical language, there is no
reason for interpretation or construction, but only for application. 35Accordingly, an administrative agency
tasked to implement a statute may not construe it by expanding its meaning where its provisions are clear
and unambiguous.36

The legislative intent to deprive the party-list organization of the right to change the nominees or to alter the
order of the nominees was also expressed during the deliberations of the Congress, viz:

MR. LAGMAN: And again on Section 5, on the nomination of party list representatives, I do not see any
provision here which prohibits or for that matter allows the nominating party to change the nominees or to
alter the order of prioritization of names of nominees. Is the implication correct that at any time after
submission the names could still be changed or the listing altered?

MR. ABUEG: Mr. Speaker, that is a good issue brought out by the distinguished Gentleman from Albay and
perhaps a perfecting amendment may be introduced therein. The sponsoring committee will gladly consider
the same.

MR. LAGMAN: In other words, what I would like to see is that after the list is submitted to the COMELEC
officially, no more changes should be made in the names or in the order of listing.

MR. ABUEG: Mr. Speaker, there may be a situation wherein the name of a particular nominee has been
submitted to the Commission on Elections but before election day the nominee changed his political party
affiliation. The nominee is therefore no longer qualified to be included in the party list and the political party
has a perfect right to change the name of that nominee who changed his political party affiliation.
MR. LAGMAN: Yes of course. In that particular case, the change can be effected but will be the exception
rather than the rule. Another exception most probably is the nominee dies, then there has to be a change
but any change for that matter should always be at the last part of the list so that the prioritization made by
the party will not be adversely affected. 37

The usage of "No" in Section 8 – "No change of names or alteration of the order of nominees shall be
allowed after the same shall have been submitted to the COMELEC except in cases where the nominee
dies, or withdraws in writing his nomination, or becomes incapacitated, in which case the name of the
substitute nominee shall be placed last in the list" – renders Section 8 a negative law, and is indicative of
the legislative intent to make the statute mandatory. Prohibitive or negative words can rarely, if ever, be
directory, for there is but one way to obey the command "thou shall not," and that is to completely refrain
from doing the forbidden act,38 subject to certain exceptions stated in the law itself, like in this case. 

Section 8 does not unduly deprive the party-list organization of its right to choose its nominees, but merely
divests it of the right to change its nominees or to alter the order in the list of its nominees’ names after
submission of the list to the COMELEC. 

The prohibition is not arbitrary or capricious; neither is it without reason on the part of lawmakers. The
COMELEC can rightly presume from the submission of the list that the list reflects the true will of the party-
list organization. The COMELEC will not concern itself with whether or not the list contains the real
intended nominees of the party-list organization, but will only determine whether the nominees pass all the
requirements prescribed by the law and whether or not the nominees possess all the qualifications and
none of the disqualifications. Thereafter, the names of the nominees will be published in newspapers of
general circulation. Although the people vote for the party-list organization itself in a party-list system of
election, not for the individual nominees, they still have the right to know who the nominees of any
particular party-list organization are. The publication of the list of the party-list nominees in newspapers of
general circulation serves that right of the people, enabling the voters to make intelligent and informed
choices. In contrast, allowing the party-list organization to change its nominees through withdrawal of their
nominations, or to alter the order of the nominations after the submission of the list of nominees
circumvents the voters’ demand for transparency. The lawmakers’ exclusion of such arbitrary withdrawal
has eliminated the possibility of such circumvention.

D 
Exceptions in Section 8 of R.A. 7941 are exclusive

Section 8 of R.A. No. 7941 enumerates only three instances in which the party-list organization can
substitute another person in place of the nominee whose name has been submitted to the COMELEC,
namely: (a) when the nominee dies; (b) when the nominee withdraws in writing his nomination; and (c)
when the nominee becomes incapacitated. 

The enumeration is exclusive, for, necessarily, the general rule applies to all cases not falling under any of
the three exceptions.

When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are
strictly but reasonably construed. The exceptions extend only as far as their language fairly warrants, and
all doubts should be resolved in favor of the general provision rather than the exceptions. Where the
general rule is established by a statute with exceptions, none but the enacting authority can curtail the
former. Not even the courts may add to the latter by implication, and it is a rule that an express exception
excludes all others, although it is always proper in determining the applicability of the rule to inquire
whether, in a particular case, it accords with reason and justice. 391avvphi1

The appropriate and natural office of the exception is to exempt something from the scope of the general
words of a statute, which is otherwise within the scope and meaning of such general words. Consequently,
the existence of an exception in a statute clarifies the intent that the statute shall apply to all cases not
excepted. Exceptions are subject to the rule of strict construction; hence, any doubt will be resolved in favor
of the general provision and against the exception. Indeed, the liberal construction of a statute will seem to
require in many circumstances that the exception, by which the operation of the statute is limited or
abridged, should receive a restricted construction.

E
Section 13 of Resolution No. 7804 expanded 
the exceptions under Section 8 of R.A. No. 7941

Section 13 of Resolution No. 7804 states:

Section 13. Substitution of nominees. – A party-list nominee may be substituted only when he dies, or his
nomination is withdrawn by the party, or he becomes incapacitated to continue as such, or he withdraws his
acceptance to a nomination. In any of these cases, the name of the substitute nominee shall be placed last
in the list of nominees.

No substitution shall be allowed by reason of withdrawal after the polls. 

Unlike Section 8 of R.A. No. 7941, the foregoing regulation provides four instances, the fourth being when
the "nomination is withdrawn by the party." 

Lokin insists that the COMELEC gravely abused its discretion in expanding to four the three statutory
grounds for substituting a nominee. 

We agree with Lokin.

The COMELEC, despite its role as the implementing arm of the Government in the enforcement and
administration of all laws and regulations relative to the conduct of an election, 40 has neither the authority
nor the license to expand, extend, or add anything to the law it seeks to implement thereby. The IRRs the
COMELEC issues for that purpose should always accord with the law to be implemented, and should not
override, supplant, or modify the law. It is basic that the IRRs should remain consistent with the law they
intend to carry out.41

Indeed, administrative IRRs adopted by a particular department of the Government under legislative
authority must be in harmony with the provisions of the law, and should be for the sole purpose of carrying
the law’s general provisions into effect. The law itself cannot be expanded by such IRRs, because an
administrative agency cannot amend an act of Congress. 42
The COMELEC explains that Section 13 of Resolution No. 7804 has added nothing to Section 8 of R.A. No.
7941,43because it has merely reworded and rephrased the statutory provision’s phraseology. 

The explanation does not persuade.

To reword means to alter the wording of or to restate in other words; to rephrase is to phrase anew or in a
new form.44 Both terms signify that the meaning of the original word or phrase is not altered. 

However, the COMELEC did not merely reword or rephrase the text of Section 8 of R.A. No. 7941, because
it established an entirely new ground not found in the text of the provision. The new ground granted to the
party-list organization the unilateral right to withdraw its nomination already submitted to the COMELEC,
which Section 8 of R.A. No. 7941 did not allow to be done. Neither was the grant of the unilateral right
contemplated by the drafters of the law, who precisely denied the right to withdraw the nomination (as the
quoted record of the deliberations of the House of Representatives has indicated). The grant thus conflicted
with the statutory intent to save the nominee from falling under the whim of the party-list organization once
his name has been submitted to the COMELEC, and to spare the electorate from the capriciousness of the
party-list organizations. 

We further note that the new ground would not secure the object of R.A. No. 7941 of developing and
guaranteeing a full, free and open party-list electoral system. The success of the system could only be
ensured by avoiding any arbitrariness on the part of the party-list organizations, by seeing to the
transparency of the system, and by guaranteeing that the electorate would be afforded the chance of
making intelligent and informed choices of their party-list representatives. 

The insertion of the new ground was invalid. An axiom in administrative law postulates that administrative
authorities should not act arbitrarily and capriciously in the issuance of their IRRs, but must ensure that
their IRRs are reasonable and fairly adapted to secure the end in view. If the IRRs are shown to bear no
reasonable relation to the purposes for which they were authorized to be issued, they must be held to be
invalid and should be struck down.45

F
Effect of partial nullity of Section 13 of Resolution No. 7804

An IRR adopted pursuant to the law is itself law. 46 In case of conflict between the law and the IRR, the law
prevails. There can be no question that an IRR or any of its parts not adopted pursuant to the law is no law
at all and has neither the force nor the effect of law. 47 The invalid rule, regulation, or part thereof cannot be
a valid source of any right, obligation, or power. 

Considering that Section 13 of Resolution No. 7804 – to the extent that it allows the party-list organization
to withdraw its nomination already submitted to the COMELEC – was invalid, CIBAC’s withdrawal of its
nomination of Lokin and the others and its substitution of them with new nominees were also invalid and
ineffectual. It is clear enough that any substitution of Lokin and the others could only be for any of the
grounds expressly stated in Section 8 of R.A. No. 7941. Resultantly, the COMELEC’s approval of CIBAC’s
petition of withdrawal of the nominations and its recognition of CIBAC’s substitution, both through its
assailed September 14, 2007 resolution, should be struck down for lack of legal basis. Thereby, the
COMELEC acted without jurisdiction, having relied on the invalidly issued Section 13 of Resolution No.
7804 to support its action.

WHEREFORE, we grant the petitions for certiorari and mandamus.

We declare Section 13 of Resolution No. 7804 invalid and of no effect to the extent that it authorizes a
party-list organization to withdraw its nomination of a nominee once it has submitted the nomination to the
Commission on Elections.

Accordingly, we annul and set aside: 

(a) The resolution dated September 14, 2007 issued in E. M. No. 07-054 approving Citizens’ Battle
Against Corruption’s withdrawal of the nominations of Luis K. Lokin, Jr., Sherwin N. Tugna, and
Emil Galang as its second, third, and fourth nominees, respectively, and ordering their substitution
by Cinchona C. Cruz-Gonzales as second nominee and Armi Jane R. Borje as third nominee; and 

(b) The proclamation by the Commission on Elections of Cinchona C. Cruz-Gonzales as a Party-

List Representative representing Citizens’ Battle Against Corruption in the House of
Representatives.

We order the Commission on Elections to forthwith proclaim petitioner Luis K. Lokin, Jr. as a Party-List
Representative representing Citizens’ Battle Against Corruption in the House of Representatives.

We make no pronouncements on costs of suit.

G.R. No. 152574             November 17, 2004

FRANCISCO ABELLA JR., petitioner, 

vs.
CIVIL SERVICE COMMISSION, respondent.

DECISION

PANGANIBAN, J.:

Both the appointing authority and the appointee are the real parties in interest, and both have legal
standing, in a suit assailing a Civil Service Commission (CSC) order disapproving an appointment. Despite
having legal interest and standing, herein petitioner unsuccessfully challenges the constitutionality of the
CSC circular that classifies certain positions in the career service of the government. In sum, petitioner was
appointed to a Career Executive Service (CES) position, but did not have the corresponding eligibility for it;
hence, the CSC correctly disapproved his appointment.

The Case

Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, challenging the November 16, 2001
Decision2 and the March 8, 2002 Resolution 3 of the Court of Appeals (CA) in CA-GR SP No. 58987. The
Assailed Decision disposed as follows:

"WHEREFORE, the petition for review is DENIED for lack of merit." 4 

The challenged Resolution denied petitioner's Motion for Reconsideration.

The Facts

The CA narrates the factual antecedents in this wise:

"Petitioner Francisco A. Abella, Jr., a lawyer, retired from the Export Processing Zone Authority
(EPZA), now the Philippine Economic Zone Authority (PEZA), on July 1, 1996 as Department
Manager of the Legal Services Department. He held a civil service eligibility for the position of
Department Manager, having completed the training program for Executive Leadership and
Management in 1982 under the Civil Service Academy, pursuant to CSC Resolution No. 850 dated
April 16, 1979, which was then the required eligibility for said position.

"It appears, however, that on May 31, 1994, the Civil Service Commission issued Memorandum
Circular No. 21, series of 1994, the pertinent provisions of which read:

'1. Positions Covered by the Career Executive Service

xxx    xxx    xxx
 (b) In addition to the above identified positions and other positions of the same category which had
been previously classified and included in the CES, all other third level positions of equivalent
category in all branches and instrumentalities of the national government, including government
owned and controlled corporations with original charters are embraced within the Career Executive
Service provided that they meet the following criteria:

'1. the position is a career position;

'2. the position is above division chief level

'3. the duties and responsibilities of the position require the performance of executive or
managerial functions.

'4. Status of Appointment of Incumbents of Positions Included Under the Coverage of the
CES. Incumbents of positions which are declared to be Career Executive Service positions
for the first time pursuant to this Resolution who hold permanent appointments thereto
shall remain under permanent status in their respective positions. However, upon
promotion or transfer to other Career Executive Service (CES) positions, these incumbents
shall be under temporary status in said other CES positions until they qualify.'

"Two years after his retirement, petitioner was hired by the Subic Bay Metropolitan Authority
(SBMA) on a contractual basis. On January 1, 1999, petitioner was issued by SBMA a permanent
employment as Department Manager III, Labor and Employment Center. However, when said
appointment was submitted to respondent Civil Service Commission Regional Office No. III, it was
disapproved on the ground that petitioner's eligibility was not appropriate. Petitioner was advised
by SBMA of the disapproval of his appointment. In view thereof, petitioner was issued a temporary
appointment as Department Manager III, Labor and Employment Center, SBMA on July 9, 1999.

"Petitioner appealed the disapproval of his permanent appointment by respondent to the Civil
Service Commission, which issued Resolution No. 000059, dated January 10, 2000, affirming the
action taken by respondent. Petitioner's motion for reconsideration thereof was denied by the CSC
in Resolution No. 001143 dated May 11, 2000."

"x x x         x x x         x x x

"Undaunted, petitioner filed with [the CA] a petition for review seeking the reversal of the CSC
Resolutions dated January 10, 2000 and May 11, 2000 on the ground that CSC Memorandum
Circular No. 21, s. 1994 is unconstitutional as it rendered his earned civil service eligibility
ineffective or inappropriate for the position of Department Manager [III]" 5 

Ruling of the Court of Appeals

The CA shunned the issue of constitutionality, arguing that a constitutional question should not be passed
upon if there are other grounds upon which the case may be decided. 6 Citing CSC Memorandum Circular
40, s. 1998 and Mathay v. Civil Service Commission, 7 the appellate court ruled that only the appointing
officer may request reconsideration of the action taken by the CSC on appointments. Thus, it held that
petitioner did not have legal standing to question the disapproval of his appointment. 8 

On reconsideration, the CA added that petitioner was not the real party in interest, as his appointment was
dependent on the CSC's approval. Accordingly, he had no vested right in the office, since his appointment
was disapproved.9 

Unsatisfied, petitioner brought this recourse to this Court. 10 

The Issues

Petitioner raises the following issues for our consideration:

"A. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of
jurisdiction in ruling that petitioner lacks the personality to question the disapproval by respondent
office of petitioner's appointment as Department Manager III, Labor and Employment Center,
SBMA.

"B. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of
jurisdiction in ruling that petitioner is not the real party in interest to question the disapproval by
respondent office of petitioner's appointment as Department Manager III, Labor and Employment
Center, SBMA.

"C. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of
jurisdiction, in dismissing petitioner's appeal on a mere technicality considering that petitioner is
questioning the constitutionality of respondent office' issuance of Section 4 of CSC Memorandum
Circular No. 21, s. 1994, which deprived petitioner his property right without due process of law." 11 

The Court's Ruling

The Petition is partly meritorious.

First Issue:

Who May File Reconsideration or Appeal

Preliminary Observation

Petitioner imputes to the CA "grave abuse of discretion amounting to lack of jurisdiction" for ruling that he
had no legal standing to contest the disapproval of his appointment. 12 Grave abuse of discretion is a ground
for a petition for certiorari under Rule 65 of the Rules of Court. Nevertheless, this Court resolved to grant
due course to the Petition and to treat it appropriately as a petition for review on certiorari under Rule 45 of
the Rules of Court. The grounds shall be deemed "reversible errors," not "grave abuse of discretion."

Approval Required for 

Permanent Appointment
A permanent appointment in the career service is issued to a person who has met the requirements of the
position to which the appointment is made in accordance with the provisions of law, the rules and the
standards promulgated pursuant thereto. 13 It implies the civil service eligibility of the appointee. 14 Thus, while
the appointing authority has the discretion to choose whom to appoint, the choice is subject to the caveat
that the appointee possesses the required qualifications. 15 

To make it fully effective, an appointment to a civil service position must comply with all legal
requirements.16 Thus, the law requires the appointment to be submitted to the CSC which will ascertain, in
the main, whether the proposed appointee is qualified to hold the position and whether the rules pertinent
to the process of appointment were observed.17 The applicable provision of the Civil Service Law reads:

"SECTION 9. Powers and Functions of the Commission. — The Commission shall administer the
Civil Service and shall have the following powers and functions:

"x x x         x x x         x x x

"(h) Approve all appointments, whether original or promotional, to positions in the civil service,
except those of presidential appointees, members of the Armed Forces of the Philippines, police
forces, firemen, and jailguards, and disapprove those where the appointees do not possess the
appropriate eligibility or required qualifications. An appointment shall take effect immediately upon
issue by the appointing authority if the appointee assumes his duties immediately and shall remain
effective until it is disapproved by the Commission, if this should take place, without prejudice to
the liability of the appointing authority for appointments issued in violation of existing laws or rules:
Provided, finally, That the Commission shall keep a record of appointments of all officers and
employees in the civil service. All appointments requiring the approval of the Commission as herein
provided, shall be submitted to it by the appointing authority within thirty days from issuance,
otherwise, the appointment becomes ineffective thirty days thereafter." 18 

The appointing officer and the CSC acting together, though not concurrently but consecutively, make an
appointment complete.19 In acting on the appointment, the CSC determines whether the appointee
possesses the appropriate civil service eligibility or the required qualifications. If the appointee does, the
appointment must be approved; if not, it should be disapproved. 20 According to the appellate court, only the
appointing authority had the right to challenge the CSC's disapproval. It relied on Section 2 of Rule VI of
CSC Memorandum Circular 40, s. 1998 (Omnibus Rules on Appointment and Other Personal Actions),
which provides:

"Section 2. Request for Reconsideration of, or appeal from, the disapproval of an appointment may
be made by the appointing authority and submitted to the Commission within fifteen (15) calendar
days from receipt of the disapproved appointment."

Appointing Authority's Right to

Challenge CSC Disapproval

While petitioner does not challenge the legality of this provision, he now claims that it is merely a
technicality, which does not prevent him from requesting reconsideration.
We clarify. The power of appointment necessarily entails the exercise of judgment and discretion. 21 Luego
v. Civil Service Commission22 declared:

"Appointment is an essentially discretionary power and must be performed by the officer in which it
is vested according to his best lights, the only condition being that the appointee should possess
the qualifications required by law. If he does, then the appointment cannot be faulted on the ground
that there are others better qualified who should have been preferred. This is a political question
involving considerations of wisdom which only the appointing authority can decide." 23 

Significantly, "the selection of the appointee -- taking into account the totality of his qualifications, including
those abstract qualities that define his personality -- is the prerogative of the appointing authority." 24 No
tribunal, not even this Court,25 may compel the exercise of an appointment for a favored person. 26 

The CSC's disapproval of an appointment is a challenge to the exercise of the appointing authority's
discretion. The appointing authority must have the right to contest the disapproval. Thus, Section 2 of Rule
VI of CSC Memorandum Circular 40, s. 1998 is justified insofar as it allows the appointing authority to
request reconsideration or appeal.

In Central Bank v. Civil Service Commission, 27 this Court has affirmed that the appointing authority stands
to be adversely affected when the CSC disapproves an appointment. Thus, the said authority can "defend
its appointment since it knows the reasons for the same." 28 It is also the act of the appointing authority that
is being questioned when an appointment is disapproved. 29 

Appointee's Legal Standing to

Challenge the CSC Disapproval

While there is justification to allow the appointing authority to challenge the CSC disapproval, there is none
to preclude the appointee from taking the same course of action. Aggrieved parties, including the Civil
Service Commission, should be given the right to file motions for reconsideration or to appeal. 30 On this
point, the concepts of "legal standing" and "real party in interest" become relevant.

Although commonly directed towards ensuring that only certain parties can maintain an action, "legal
standing" and "real party in interest" are different concepts. Kilosbayan v. Morato 31 explained:

"The difference between the rule on standing and real party-in-interest has been noted by
authorities thus: 'It is important to note . . . that standing because of its constitutional and public
policy underpinnings, is very different from questions relating to whether a particular plaintiff is the
real party-in-interest or has capacity to sue. Although all three requirements are directed towards
ensuring that only certain parties can maintain an action, standing restrictions require a partial
consideration of the merits, as well as broader policy concerns relating to the proper role of the
judiciary in certain areas. (FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328 [1985])

"Standing is a special concern in constitutional law because in some cases suits are brought not by
parties who have been personally injured by the operation of a law or by official action taken, but
by concerned citizens, taxpayers or voters who actually sue in the public interest. Hence the
question in standing is whether such parties have 'alleged such a personal stake in the outcome of
 the controversy to assure that concrete adverseness which sharpens the presentation of issues
upon which the court so largely depends for illumination of difficult constitutional questions.' (Baker
v. Carr, 369 U.S. 186, 7 L. Ed. 2d 633 (1962))

"x x x         x x x         x x x

"On the other hand, the question as to 'real party-in-interest' is whether he is 'the party who would
be [benefited] or injured by the judgment, or the 'party entitled to the avails of the suit.' (Salonga v.
Warner Barnes & Co., Ltd., 88 Phil. 125, 131 [1951])" 32 

If legal standing is granted to challenge the constitutionality or validity of a law or governmental act despite
the lack of personal injury on the challenger's part, then more so should petitioner be allowed to contest the
CSC Order disapproving his appointment. Clearly, he was prejudiced by the disapproval, since he could not
continue his office.

Although petitioner had no vested right to the position, 33 it was his eligibility that was being questioned.
Corollary to this point, he should be granted the opportunity to prove his eligibility. He had a personal stake
in the outcome of the case, which justifies his challenge to the CSC act that denied his permanent
appointment.

The Appointee a Real

Party in Interest

A real party in interest is one who would be benefited or injured by the judgment, or one entitled to the
avails of the suit.34 "Interest" within the meaning of the rule means material interest or an interest in issue
and to be affected by the decree, as distinguished from mere interest in the question involved or a mere
incidental interest.35 Otherwise stated, the rule refers to a real or present substantial interest as
distinguished from a mere expectancy; or from a future, contingent, subordinate, or consequential
interest.36 As a general rule, one who has no right or interest to protect cannot invoke the jurisdiction of the
court as a party-plaintiff in an action.37 

Although the earlier discussion demonstrates that the appointing authority is adversely affected by the
CSC's Order and is a real party in interest, the appointee is rightly a real party in interest too. He is also
injured by the CSC disapproval, because he is prevented from assuming the office in a permanent
capacity. Moreover, he would necessarily benefit if a favorable judgment is obtained, as an approved
appointment would confer on him all the rights and privileges of a permanent appointee.

Appointee Allowed
Procedural Relief

Section 2 of Rule VI of CSC Memorandum Circular 40, s. 1998 should not be interpreted to restrict solely to
the appointing authority the right to move for a reconsideration of, or to appeal, the disapproval of an
appointment. PD 807 and EO 292, from which the CSC derives the authority to promulgate its rules and
regulations, are silent on whether appointees have a similar right to file motions for reconsideration of, or
appeals from, unfavorable decisions involving appointments. Indeed, there is no legislative intent to bar
appointees from challenging the CSC's disapproval.
The view that only the appointing authority may request reconsideration or appeal is too narrow. The
appointee should have the same right. Parenthetically, CSC Resolution 99-1936 38 recognizes the right of
the adversely affected party to appeal to the CSC Regional Offices prior to elevating a matter to the CSC
Central Office.39 The adversely affected party necessarily includes the appointee.

This judicial pronouncement does not override Mathay v. Civil Service Commission, 40 which the CA relied
on. The Court merely noted in passing -- by way of obiter -- that based on a similar provision, 41 only the
appointing officer could request reconsideration of actions taken by the CSC on appointments.

In that case, Quezon City Mayor Ismael A. Mathay Jr. sought the nullification of CSC Resolutions that
recalled his appointment of a city government officer. He filed a Petition assailing the CA Decision, which
had previously denied his Petition for Certiorari for being the wrong remedy and for being filed out of time.
We observed then that the CSC Resolutions were already final and could no longer be elevated to the
CA.42 Furthermore, Mathay's Petition for Certiorari filed with the CA was improper, because there was an
available remedy of appeal. And the CSC could not have acted without jurisdiction, considering that it was
empowered to recall an appointment initially approved. 43 

The right of the appointee to seek reconsideration or appeal was not the main issue in Mathay. At any rate,
the present case is being decided en banc, and the ruling may reverse previous doctrines laid down by this
Court.44 

Second Issue:

Constitutionality of Section 4, CSC Memorandum Circular 21, Series of 1994

Alleging that his civil service eligibility was rendered ineffective and that he was consequently deprived of a
property right without due process, 45 petitioner challenges the constitutionality of CSC Memorandum
Circular 21, s. 1994.46 The pertinent part of this Circular reads:

"1. Positions Covered by the Career Executive Service.

"(a) The Career Executive Service includes the positions of Undersecretary, Assistant
Secretary, Bureau Director, Assistant Bureau Director, Regional Director (department-wide
and bureau-wide), Assistant Regional Director (department-wide and bureau-wide) and
Chief of Department Service[.]

"(b) In addition to the above identified positions and other positions of the same category
which had been previously classified and included in the CES, all other third level positions
in all branches and instrumentalities of the national government, including government-
owned or controlled corporations with original charters are embraced within the Career
Executive Service provided that they meet the following criteria:

"1. the position is a career position;

"2. the position is above division chief level;

 "3. the duties and responsibilities of the position require the performance of
executive or managerial functions."

xxx    xxx    xxx

"4. Status of Appointment of Incumbents of Positions Under the Coverage of the CES. Incumbents
of positions which are declared to be Career Executive Service positions for the first time pursuant
to this Resolution who hold permanent appointments thereto shall remain under permanent status
in their respective positions. However, upon promotion or transfer to other Career Executive
Service (CES) positions, these incumbents shall be under temporary status in said other CES
positions until they qualify."

Petitioner argues that his eligibility, through the Executive Leadership and Management (ELM) training
program, could no longer be affected by a new eligibility requirement. He claims that he was eligible for his
previous position as department manager of the Legal Services Department, PEZA; hence, he should
retain his eligibility for the position of department manager III, Labor and Employment Center, SBMA,
notwithstanding the classification of the latter as a CES position.

CSC Authorized to Issue

Rules and Regulations

The Constitution mandates that, as "the central personnel agency of the government," 47 the CSC should
"establish a career service and adopt measures to promote the morale, efficiency, integrity,
responsiveness, progressiveness, and courtesy in the Civil Service." 48 It further requires that appointments
in the civil service be made only through merit and fitness to be determined by competitive
examination.49 Civil Service laws have expressly empowered the CSC to issue and enforce rules and
regulations to carry out its mandate.

In the exercise of its authority, the CSC deemed it appropriate to clearly define and identify positions
covered by the Career Executive Service. 50 Logically, the CSC had to issue guidelines to meet this
objective, specifically through the issuance of the challenged Circular.

Career Service 
Classified by Levels

Positions in the career service, for which appointments require examinations, are grouped into three major
levels:

"(a) The first level shall include clerical, trades, crafts, and custodial service positions which involve
non-professional or sub[-]professional work in a non-supervisory or supervisory capacity requiring
less than four years of collegiate studies;

"(b) The second level shall include professional, technical, and scientific positions which involve
professional, technical, or scientific work in a non-supervisory or supervisory capacity requiring at
least four years of college work up to Division Chief level; and
 "(c) The third level shall cover positions in the Career Executive Service." 51 

Entrance to the different levels requires the corresponding civil service eligibility. Those in the third level
(CES positions) require Career Service Executive Eligibility (CSEE) as a requirement for permanent
appointment.52 

The challenged Circular did not revoke petitioner's ELM eligibility. He was appointed to a CES position;
however, his eligibility was inadequate. Eligibility must necessarily conform to the requirements of the
position, which in petitioner's case was a CSEE.

Rights Protected

The challenged Circular protects the rights of incumbents as long as they remain in the positions to which
they were previously appointed. They are allowed to retain their positions in a permanent capacity,
notwithstanding the lack of CSEE. Clearly, the Circular recognizes the rule of prospectivity of
regulations;53 hence, there is no basis to argue that it is an ex post facto law 54 or a bill of attainder.55 These
terms, which have settled meanings in criminal jurisprudence, are clearly inapplicable here.

The government service of petitioner ended when he retired in 1996; thus, his right to remain in a CES
position, notwithstanding his lack of eligibility, also ceased. Upon his reemployment 56 years later as
department manager III at SBMA in 2001, it was necessary for him to comply with the eligibility prescribed
at the time for that position.

Security of Tenure
Not Impaired

The argument of petitioner that his security of tenure is impaired is unconvincing. First, security of tenure in
the Career Executive Service -- except in the case of first and second level employees in the civil service --
pertains only to rank, not to the position to which the employee may be appointed. 57 Second, petitioner had
neither rank nor position prior to his reemployment. One cannot claim security of tenure if one held no
tenure prior to appointment.

Due Process 
Not Violated

Petitioner contends that his due process rights, as enunciated in Ang Tibay v. Court of Appeals, 58 were
violated.59 We are not convinced. He points in particular to the CSC's alleged failure to notify him of a
hearing relating to the issuance of the challenged Circular.

The classification of positions in career service was a quasi-legislative, not a quasi-judicial, issuance. This
distinction determines whether prior notice and hearing are necessary.

In exercising its quasi-judicial function, an administrative body adjudicates the rights of persons before it, in
accordance with the standards laid down by the law. 60 The determination of facts and the applicable law, as
basis for official action and the exercise of judicial discretion, are essential for the performance of this
function.61 On these considerations, it is elementary that due process requirements, as enumerated in Ang
Tibay, must be observed. These requirements include prior notice and hearing. 62 

On the other hand, quasi-legislative power is exercised by administrative agencies through the
promulgation of rules and regulations within the confines of the granting statute and the doctrine of non-
delegation of certain powers flowing from the separation of the great branches of the government. 63 Prior
notice to and hearing of every affected party, as elements of due process, are not required since there is no
determination of past events or facts that have to be established or ascertained. As a general rule, prior
notice and hearing are not essential to the validity of rules or regulations promulgated to govern future
conduct.64 

Significantly, the challenged Circular was an internal matter addressed to heads of departments, bureaus
and agencies. It needed no prior publication, since it had been issued as an incident of the administrative
body's power to issue guidelines for government officials to follow in performing their duties. 65 

Final Issue:

Disapproval of Appointment

Since petitioner had no CES eligibility, the CSC correctly denied his permanent appointment. The
appointee need not have been previously heard, because the nature of the action did not involve the
imposition of an administrative disciplinary measure. 66 The CSC, in approving or disapproving an
appointment, merely examines the conformity of the appointment with the law and the appointee's
possession of all the minimum qualifications and none of the disqualification. 67 

In sum, while petitioner was able to demonstrate his standing to appeal the CSC Resolutions to the courts,
he failed to prove his eligibility to the position he was appointed to.

WHEREFORE, the Petition is GRANTED insofar as it seeks legal standing for petitioner, but DENIED
insofar as it prays for the reversal of the CSC Resolutions disapproving his appointment as department
manager III of the Labor and Employment Center, Subic Bay Metropolitan Authority. Costs against
petitioner.
G.R. No. 151908            August 12, 2003

SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION

(PILTEL), petitioners, 
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION (NTC), respondent.

x---------------------------------------------------------x

G.R. No. 152063 August 12, 2003

GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC. (ISLACOM), petitioners, 
vs.
COURT OF APPEALS (The Former 6th Division) and the NATIONAL TELECOMMUNICATIONS
COMMISSION, respondents.

YNARES-SANTIAGO, J.:

Pursuant to its rule-making and regulatory powers, the National Telecommunications Commission (NTC)
issued on June 16, 2000 Memorandum Circular No. 13-6-2000, promulgating rules and regulations on the
billing of telecommunications services. Among its pertinent provisions are the following:

(1) The billing statements shall be received by the subscriber of the telephone service not later
than 30 days from the end of each billing cycle. In case the statement is received beyond this
period, the subscriber shall have a specified grace period within which to pay the bill and the public
telecommunications entity (PTEs) shall not be allowed to disconnect the service within the grace
period.

(2) There shall be no charge for calls that are diverted to a voice mailbox, voice prompt, recorded
message or similar facility excluding the customer's own equipment.

(3) PTEs shall verify the identification and address of each purchaser of prepaid SIM cards.
Prepaid call cards and SIM cards shall be valid for at least 2 years from the date of first use.
Holders of prepaid SIM cards shall be given 45 days from the date the prepaid SIM card is fully
consumed but not beyond 2 years and 45 days from date of first use to replenish the SIM card,
otherwise the SIM card shall be rendered invalid. The validity of an invalid SIM card, however, shall
be installed upon request of the customer at no additional charge except the presentation of a valid
prepaid call card.

(4) Subscribers shall be updated of the remaining value of their cards before the start of every call
using the cards.

(5) The unit of billing for the cellular mobile telephone service whether postpaid or prepaid shall be
reduced from 1 minute per pulse to 6 seconds per pulse. The authorized rates per minute shall
thus be divided by 10.1
The Memorandum Circular provided that it shall take effect 15 days after its publication in a newspaper of
general circulation and three certified true copies thereof furnished the UP Law Center. It was published in
the newspaper, The Philippine Star, on June 22, 2000. 2 Meanwhile, the provisions of the Memorandum
Circular pertaining to the sale and use of prepaid cards and the unit of billing for cellular mobile telephone
service took effect 90 days from the effectivity of the Memorandum Circular.

On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service (CMTS)
operators which contained measures to minimize if not totally eliminate the incidence of stealing of cellular
phone units. The Memorandum directed CMTS operators to:

a. strictly comply with Section B(1) of MC 13-6-2000 requiring the presentation and verification of
the identity and addresses of prepaid SIM card customers;

b. require all your respective prepaid SIM cards dealers to comply with Section B(1) of MC 13-6-
2000;

c. deny acceptance to your respective networks prepaid and/or postpaid customers using stolen
cellphone units or cellphone units registered to somebody other than the applicant when properly
informed of all information relative to the stolen cellphone units;

d. share all necessary information of stolen cellphone units to all other CMTS operators in order to
prevent the use of stolen cellphone units; and

e. require all your existing prepaid SIM card customers to register and present valid identification
cards.3

This was followed by another Memorandum dated October 6, 2000 addressed to all public
telecommunications entities, which reads:

This is to remind you that the validity of all prepaid cards sold on 07 October 2000 and beyond
shall be valid for at least two (2) years from date of first use pursuant to MC 13-6-2000.

In addition, all CMTS operators are reminded that all SIM packs used by subscribers of prepaid
cards sold on 07 October 2000 and beyond shall be valid for at least two (2) years from date of first
use. Also, the billing unit shall be on a six (6) seconds pulse effective 07 October 2000.

For strict compliance.4

On October 20, 2000, petitioners Isla Communications Co., Inc. and Pilipino Telephone Corporation filed
against the National Telecommunications Commission, Commissioner Joseph A. Santiago, Deputy
Commissioner Aurelio M. Umali and Deputy Commissioner Nestor C. Dacanay, an action for declaration of
nullity of NTC Memorandum Circular No. 13-6-2000 (the Billing Circular) and the NTC Memorandum dated
October 6, 2000, with prayer for the issuance of a writ of preliminary injunction and temporary restraining
order. The complaint was docketed as Civil Case No. Q-00-42221 at the Regional Trial Court of Quezon
City, Branch 77.5
Petitioners Islacom and Piltel alleged, inter alia, that the NTC has no jurisdiction to regulate the sale of
consumer goods such as the prepaid call cards since such jurisdiction belongs to the Department of Trade
and Industry under the Consumer Act of the Philippines; that the Billing Circular is oppressive, confiscatory
and violative of the constitutional prohibition against deprivation of property without due process of law; that
the Circular will result in the impairment of the viability of the prepaid cellular service by unduly prolonging
the validity and expiration of the prepaid SIM and call cards; and that the requirements of identification of
prepaid card buyers and call balance announcement are unreasonable. Hence, they prayed that the Billing
Circular be declared null and void ab initio.

Soon thereafter, petitioners Globe Telecom, Inc and Smart Communications, Inc. filed a joint Motion for
Leave to Intervene and to Admit Complaint-in-Intervention. 6 This was granted by the trial court.

On October 27, 2000, the trial court issued a temporary restraining order enjoining the NTC from
implementing Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6, 2000. 7

In the meantime, respondent NTC and its co-defendants filed a motion to dismiss the case on the ground of
petitioners' failure to exhaust administrative remedies.

Subsequently, after hearing petitioners' application for preliminary injunction as well as respondent's motion
to dismiss, the trial court issued on November 20, 2000 an Order, the dispositive portion of which reads:

WHEREFORE, premises considered, the defendants' motion to dismiss is hereby denied for lack of
merit. The plaintiffs' application for the issuance of a writ of preliminary injunction is hereby granted.
Accordingly, the defendants are hereby enjoined from implementing NTC Memorandum Circular
13-6-2000 and the NTC Memorandum, dated October 6, 2000, pending the issuance and finality of
the decision in this case. The plaintiffs and intervenors are, however, required to file a bond in the
sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00), Philippine currency.

SO ORDERED.8

Defendants filed a motion for reconsideration, which was denied in an Order dated February 1, 2001. 9

Respondent NTC thus filed a special civil action for certiorari and prohibition with the Court of Appeals,
which was docketed as CA-G.R. SP. No. 64274. On October 9, 2001, a decision was rendered, the
decretal portion of which reads:

WHEREFORE, premises considered, the instant petition for certiorari and prohibition is GRANTED,
in that, the order of the court a quo denying the petitioner's motion to dismiss as well as the order
of the court a quo granting the private respondents' prayer for a writ of preliminary injunction, and
the writ of preliminary injunction issued thereby, are hereby ANNULLED and SET ASIDE. The
private respondents' complaint and complaint-in-intervention below are hereby DISMISSED,
without prejudice to the referral of the private respondents' grievances and disputes on the assailed
issuances of the NTC with the said agency.

SO ORDERED.10
Petitioners' motions for reconsideration were denied in a Resolution dated January 10, 2002 for lack of
merit.11

Hence, the instant petition for review filed by Smart and Piltel, which was docketed as G.R. No. 151908,
anchored on the following grounds:

A.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE

NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) AND NOT THE REGULAR COURTS
HAS JURISDICTION OVER THE CASE.

B.

THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN HOLDING THAT THE
PRIVATE RESPONDENTS FAILED TO EXHAUST AN AVAILABLE ADMINISTRATIVE REMEDY.

C.

THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BILLING
CIRCULAR ISSUED BY THE RESPONDENT NTC IS UNCONSTITUTIONAL AND CONTRARY
TO LAW AND PUBLIC POLICY.

D.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PRIVATE

RESPONDENTS FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT TO WARRANT THE
ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.12

Likewise, Globe and Islacom filed a petition for review, docketed as G.R. No. 152063, assigning the
following errors:

1. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE

DOCTRINES OF PRIMARY JURISDICTION AND EXHAUSTION OF ADMINISTRATIVE
REMEDIES DO NOT APPLY SINCE THE INSTANT CASE IS FOR LEGAL NULLIFICATION
(BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS OF LAW) OF A PURELY
ADMINISTRATIVE REGULATION PROMULGATED BY AN AGENCY IN THE EXERCISE OF ITS
RULE MAKING POWERS AND INVOLVES ONLY QUESTIONS OF LAW.

2. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE DOCTRINE

ON EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY WHEN THE
QUESTIONS RAISED ARE PURELY LEGAL QUESTIONS.

3. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE DOCTRINE

OF EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY WHERE THE
 ADMINISTRATIVE ACTION IS COMPLETE AND EFFECTIVE, WHEN THERE IS NO OTHER
REMEDY, AND THE PETITIONER STANDS TO SUFFER GRAVE AND IRREPARABLE INJURY.

4. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE PETITIONERS IN

FACT EXHAUSTED ALL ADMINISTRATIVE REMEDIES AVAILABLE TO THEM.

5. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED IN ISSUING ITS

QUESTIONED RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA HAVE A CLEAR RIGHT
TO AN INJUNCTION.13

The two petitions were consolidated in a Resolution dated February 17, 2003. 14

On March 24, 2003, the petitions were given due course and the parties were required to submit their
respective memoranda.15

We find merit in the petitions.

Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or

administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and
regulations which results in delegated legislation that is within the confines of the granting statute and the
doctrine of non-delegability and separability of powers. 16

The rules and regulations that administrative agencies promulgate, which are the product of a delegated
legislative power to create new and additional legal provisions that have the effect of law, should be within
the scope of the statutory authority granted by the legislature to the administrative agency. It is required
that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in
conformity with, the standards prescribed by law. 17 They must conform to and be consistent with the
provisions of the enabling statute in order for such rule or regulation to be valid. Constitutional and statutory
provisions control with respect to what rules and regulations may be promulgated by an administrative
body, as well as with respect to what fields are subject to regulation by it. It may not make rules and
regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute
it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. In
case of conflict between a statute and an administrative order, the former must prevail. 18

Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its quasi-
judicial or administrative adjudicatory power. This is the power to hear and determine questions of fact to
which the legislative policy is to apply and to decide in accordance with the standards laid down by the law
itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial
power when it performs in a judicial manner an act which is essentially of an executive or administrative
nature, where the power to act in such manner is incidental to or reasonably necessary for the performance
of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the
administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold
hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of
discretion in a judicial nature.19
In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a
party need not exhaust administrative remedies before going to court. This principle applies only where the
act of the administrative agency concerned was performed pursuant to its quasi-judicial function, and not
when the assailed act pertained to its rule-making or quasi-legislative power. In Association of Philippine
Coconut Dessicators v. Philippine Coconut Authority,20 it was held:

The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so
strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The
resolution in question was issued by the PCA in the exercise of its rule- making or legislative power.
However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-
judicial function is subject to the exhaustion doctrine.

Even assuming arguendo that the principle of exhaustion of administrative remedies apply in this case, the
records reveal that petitioners sufficiently complied with this requirement. Even during the drafting and
deliberation stages leading to the issuance of Memorandum Circular No. 13-6-2000, petitioners were able
to register their protests to the proposed billing guidelines. They submitted their respective position papers
setting forth their objections and submitting proposed schemes for the billing circular. 21 After the same was
issued, petitioners wrote successive letters dated July 3, 2000 22 and July 5, 2000,23 asking for the
suspension and reconsideration of the so-called Billing Circular. These letters were not acted upon until
October 6, 2000, when respondent NTC issued the second assailed Memorandum implementing certain
provisions of the Billing Circular. This was taken by petitioners as a clear denial of the requests contained in
their previous letters, thus prompting them to seek judicial relief.

In like manner, the doctrine of primary jurisdiction applies only where the administrative agency exercises
its quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has
been to refer the same to an administrative agency of special competence pursuant to the doctrine of
primary jurisdiction. The courts will not determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative
tribunal, where the question demands the exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal to determine technical and intricate
matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute
administered. The objective of the doctrine of primary jurisdiction is to guide a court in determining whether
it should refrain from exercising its jurisdiction until after an administrative agency has determined some
question or some aspect of some question arising in the proceeding before the court. It applies where the
claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires
the resolution of issues which, under a regulatory scheme, has been placed within the special competence
of an administrative body; in such case, the judicial process is suspended pending referral of such issues to
the administrative body for its view.24

However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the
administrative agency in the performance of its quasi-legislative function, the regular courts have
jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an
administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts.
Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty,
international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the
courts, including the regional trial courts. 25 This is within the scope of judicial power, which includes the
authority of the courts to determine in an appropriate action the validity of the acts of the political
departments.26 Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government. 27

In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its Memorandum
dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power. As such, petitioners were
justified in invoking the judicial power of the Regional Trial Court to assail the constitutionality and validity of
the said issuances. In Drilon v. Lim,28 it was held:

We stress at the outset that the lower court had jurisdiction to consider the constitutionality of
Section 187, this authority being embraced in the general definition of the judicial power to
determine what are the valid and binding laws by the criterion of their conformity to the
fundamental law. Specifically, B.P. 129 vests in the regional trial courts jurisdiction over all civil
cases in which the subject of the litigation is incapable of pecuniary estimation, even as the
accused in a criminal action has the right to question in his defense the constitutionality of a law he
is charged with violating and of the proceedings taken against him, particularly as they contravene
the Bill of Rights. Moreover, Article X, Section 5(2), of the Constitution vests in the Supreme Court
appellate jurisdiction over final judgments and orders of lower courts in all cases in which the
constitutionality or validity of any treaty, international or executive agreement, law, presidential
decree, proclamation, order, instruction, ordinance, or regulation is in question. 29

In their complaint before the Regional Trial Court, petitioners averred that the Circular contravened Civil
Code provisions on sales and violated the constitutional prohibition against the deprivation of property
without due process of law. These are within the competence of the trial judge. Contrary to the finding of
the Court of Appeals, the issues raised in the complaint do not entail highly technical matters. Rather, what
is required of the judge who will resolve this issue is a basic familiarity with the workings of the cellular
telephone service, including prepaid SIM and call cards – and this is judicially known to be within the
knowledge of a good percentage of our population – and expertise in fundamental principles of civil law and
the Constitution.

Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case No. Q-00-42221. The Court
of Appeals erred in setting aside the orders of the trial court and in dismissing the case.

WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The decision of the
Court of Appeals in CA-G.R. SP No. 64274 dated October 9, 2001 and its Resolution dated January 10,
2002 are REVERSED and SET ASIDE. The Order dated November 20, 2000 of the Regional Trial Court of
Quezon City, Branch 77, in Civil Case No. Q-00-42221 is REINSTATED. This case is REMANDED to the
court a quo for continuation of the proceedings.

SO ORDERED.
G.R. No. 205357               September 2, 2014

GMA NETWORK, INC., Petitioner, 

vs.
COMMISSION ON ELECTIONS, Respondent.

SENATOR ALAN PETER "COMPAÑERO" S. CAYETANO,Petitioner-Intervenor.

x-----------------------x

G.R. No. 205374

ABC DEVELOPMENT CORPORATION, Petitioner, 

vs.
COMMISSION ON ELECTIONS, Respondent.

x-----------------------x

G.R. No. 205592

MANILA BROADCASTING COMPANY, INC. and NEWSOUNDS BROADCASTING NETWORK,

INC., Petitioner, 
vs.
COMMISSION ON ELECTIONS, Respondent.

x-----------------------x

G.R. No. 205852

KAPISANAN NG MGA BRODKASTER NG PILIPINAS (KBP) and ABS-CBN CORPORATION, Petitioners, 

vs.
COMMISSION ON ELECTIONS, Respondent.

x-----------------------x

G.R. No. 206360

RADIO MINDANAO NETWORK, INC., Petitioner, 

vs.
COMMISSION ON ELECTIONS, Respondent.

DECISION

PERALTA, J.:
"The clash of rights demands a delicate balancing of interests approach which is a 'fundamental postulate
of constitutional law.'"1

Once again the Court is asked to draw a carefully drawn balance in the incessant conflicts between rights
and regulations, liberties and limitations, and competing demands of the different segments of society.
Here, we are confronted with the need to strike a workable and viable equilibrium between a constitutional
mandate to maintain free, orderly, honest, peaceful and credible elections, together with the aim of
ensuring equal opportunity, time and space, and the right to reply, including reasonable, equal rates
therefor, for public information campaigns and forums among candidates, 2 on one hand, and the
imperatives of a republican and democratic state, 3 together with its guaranteed rights of suffrage, 4 freedom
of speech and of the press,5 and the people's right to information,6 on the other.

In a nutshell, the present petitions may be seen as in search of the answer to the question - how does the
Charter of a republican and democratic State achieve a viable and acceptable balance between liberty,
without which, government becomes an unbearable tyrant, and authority, without which, society becomes
an intolerable and dangerous arrangement?

Assailed in these petitions are certain regulations promulgated by the Commission on Elections
(COMELEC) relative to the conduct of the 2013 national and local elections dealing with political
advertisements. Specifically, the petitions question the constitutionality of the limitations placed on
aggregate airtime allowed to candidates and political parties, as well as the requirements incident thereto,
such as the need to report the same, and the sanctions imposed for violations.

The five (5) petitions before the Court put in issue the alleged unconstitutionality of Section 9 (a) of
COMELEC Resolution No. 9615 (Resolution) limiting the broadcast and radio advertisements of candidates
and political parties for national election positions to an aggregate total of one hundred twenty (120)
minutes and one hundred eighty (180) minutes, respectively. They contend that such restrictive regulation
on allowable broadcast time violates freedom of the press, impairs the people's right to suffrage as well as
their right to information relative to the exercise of their right to choose who to elect during the forth coming
elections.

The heart of the controversy revolves upon the proper interpretation of the limitation on the number of
minutes that candidates may use for television and radio advertisements, as provided in Section 6 of
Republic Act No. 9006 (R.A. No. 9006), otherwise known as the Fair Election Act. Pertinent portions of said
provision state, thus:

Sec. 6. Equal Access to Media Time and Space. - All registered parties and bona fide candidates shall
have equal access to media time and space. The following guidelines may be amplified on by the
COMELEC:

xxxx

6.2 (a) Each bona fide candidate or registered political party for a nationally elective office shall be entitled
to not more than one hundred twenty (120) minutes of television advertisement and one hundred eighty
(180) minutes of radio advertisement whether by purchase or donation.
b. Each bona fide candidate or registered political party for a locally elective office shall be entitled to not
more than sixty ( 60) minutes of television advertisement and ninety (90) minutes of radio advertisement
whether by purchase or donation.

For this purpose, the COMELEC shall require any broadcast station or entity to submit to the COMELEC a
copy of its broadcast logs and certificates of performance for the review and verification of the frequency,
date, time and duration of advertisements broadcast for any candidate or political party.

During the previous elections of May 14, 2007 and May 10, 2010, COMELEC issued Resolutions
implementing and interpreting Section 6 of R.A. No. 9006, regarding airtime limitations, to mean that a
candidate is entitled to the aforestated number of minutes "per station." 7 For the May 2013 elections,
however, respondent COMELEC promulgated Resolution No. 9615 dated January 15, 2013, changing the
interpretation of said candidates' and political parties' airtime limitation for political campaigns or
advertisements from a "per station" basis, to a "total aggregate" basis.

Petitioners ABS-CBN Corporation (ABS-CBN), ABC Development Corporation (ABC), GMA Network,
Incorporated ( GMA), Manila Broadcasting Company, Inc. (MBC), Newsounds Broadcasting Network, Inc.
(NBN), and Radio Mindanao Network, Inc. (RMN) are owners/operators of radio and television networks in
the Philippines, while petitioner Kapisanan ng mga Brodkaster ng Pilipinas (KBP) is the national
organization of broadcasting companies in the Philippines representing operators of radio and television
stations and said stations themselves. They sent their respective letters to the COMELEC questioning the
provisions of the aforementioned Resolution, thus, the COMELEC held public hearings. Thereafter, on
February 1, 2013, respondent issued Resolution No. 9631 amending provisions of Resolution No. 9615.
Nevertheless, petitioners still found the provisions objectionable and oppressive, hence, the present
petitions.

All of the petitioners assail the following provisions of the Resolution:

a) Section 7 (d),8 which provides for a penalty of suspension or revocation of an offender's

franchise or permit, imposes criminal liability against broadcasting entities and their officers in the
event they sell airtime in excess of the size, duration, or frequency authorized in the new rules;

b) Section 9 (a),9 which provides for an "aggregate total" airtime instead of the previous "per
station" airtime for political campaigns or dvertisements, and also required prior COMELEC
approval for candidates' television and radio guestings and appearances; and

c) Section 14,10 which provides for a candidate's "right to reply."

In addition, petitioner ABC also questions Section 1 (4) 11 thereof, which defines the term "political
advertisement" or "election propaganda," while petitioner GMA further assails Section 35,  12 which states
that any violation of said Rules shall constitute an election offense.

On March 15, 2013, Senator Alan Peter S. Cayetano (Petitioner-Intervenor) filed a Motion for Leave to
Intervene and to File and Admit the Petition-in-Intervention, which was granted by the Court per its
Resolution dated March 19, 2013. Petitioner-Intervenor also assails Section 9 (a) of the Resolution
changing the interpretation of candidates' and political parties' airtime limitation for political campaigns or
advertisements from a "per station" basis, to a "total aggregate" basis. Petitioners allege that Resolutions
No. 9615 and 9631, amending the earlier Resolution, are unconstitutional and issued without jurisdiction or
with grave abuse of discretion amounting to lack or excess of jurisdiction, for the reasons set forth
hereunder.

Petitioners posit that Section 9 (a) of the assailed Resolution provides for a very restrictive aggregate
airtime limit and a vague meaning for a proper computation of "aggregate total" airtime, and violates the
equal protection guarantee, thereby defeating the intent and purpose of R.A. No. 9006.

Petitioners contend that Section 9 (a), which imposes a notice requirement, is vague and infringes on the
constitutionally protected freedom of speech, of the press and of expression, and on the right of people to
be informed on matters of public concern

Also, Section 9 (a) is a cruel and oppressive regulation as it imposes an unreasonable and almost
impossible burden on broadcast mass media of monitoring a candidate's or political party's aggregate
airtime, otherwise, it may incur administrative and criminal liability.

Further, petitioners claim that Section 7 (d) is null and void for unlawfully criminalizing acts not prohibited
and penalized as criminal offenses by R.A. No. 9006.

Section 14 of Resolution No. 9615, providing for a candidate's or political party's "right to reply," is likewise
assailed to be unconstitutional for being an improper exercise of the COMELEC's regulatory powers; for
constituting prior restraint and infringing petitioners' freedom of expression, speech and the press; and for
being violative of the equal protection guarantee. In addition to the foregoing, petitioner GMA further argues
that the Resolution was promulgated without public consultations, in violation of petitioners' right to due
process. Petitioner ABC also avers that the Resolution's definition of the terms "political advertisement" and
"election propaganda" suffers from overbreadth, thereby producing a "chilling effect," constituting prior
restraint.

On the other hand, respondent posits in its Comment and Opposition 13 dated March 8, 2013, that the
petition should be denied based on the following reasons:

Respondent contends that the remedies of certiorari and prohibition are not available to petitioners,
because the writ of certiorari is only available against the COMELEC's adjudicatory or quasi-judicial
powers, while the writ of prohibition only lies against the exercise of judicial, quasijudicial or ministerial
functions. Said writs do not lie against the COMELEC's administrative or rule-making powers.

Respondent likewise alleges that petitioners do not have locus standi, as the constitutional rights and
freedoms they enumerate are not personal to them, rather, they belong to candidates, political parties and
the Filipino electorate in general, as the limitations are imposed on candidates, not on media outlets. It
argues that petitioners' alleged risk of exposure to criminal liability is insufficient to give them legal standing
as said "fear of injury" is highly speculative and contingent on a future act.

Respondent then parries petitioners' attack on the alleged infirmities of the Resolution's provisions.
Respondent maintains that the per candidate rule or total aggregate airtime limit is in accordance with R.A.
No. 9006 as this would truly give life to the constitutional objective to equalize access to media during
elections. It sees this as a more effective way of levelling the playing field between candidates/political
parties with enormous resources and those without much. Moreover, the COMELEC's issuance of the
assailed Resolution is pursuant to Section 4, Article IX (C) of the Constitution which vests on the
COMELEC the power to supervise and regulate, during election periods, transportation and other public
utilities, as well as mass media, to wit:

Sec. 4. The Commission may, during the election period, supervise or regulate the enjoyment or utilization
of all franchises or permits for the operation of transportation and other public utilities, media of
communication or information, all grants, special privileges, or concessions granted by the Government or
any subdivision, agency, or instrumentality thereof, including any government-owned or controlled
corporation or its subsidiary. Such supervision or regulation shall aim to ensure equal opportunity, and
equal rates therefor, for public information campaigns and forums among candidates in connection with the
objective of holding free, orderly, honest, peaceful, and credible elections.

This being the case, then the Resolutions cannot be said to have been issued with grave abuse of
discretion amounting to lack of jurisdiction.

Next, respondent claims that the provisions are not vague because the assailed Resolutions have given
clear and adequate mechanisms to protect broadcast stations from potential liability arising from a
candidate's or party's violation of airtime limits by putting in the proviso that the station "may require buyer
to warrant under oath that such purchase [of airtime] is not in excess of size, duration or frequency
authorized by law or these rules." Furthermore, words should be understood in the sense that they have in
common usage, and should be given their ordinary meaning. Thus, in the provision for the right to reply,
"charges" against candidates or parties must be understood in the ordinary sense, referring to accusations
or criticisms.

Respondent also sees no prior restraint in the provisions requiring notice to the COMELEC for
appearances or guestings of candidates in bona fide news broadcasts. It points out that the fact that notice
may be given 24 hours after first broadcast only proves that the mechanism is for monitoring purposes only,
not for censorship. Further, respondent argues, that for there to be prior restraint, official governmental
restrictions on the press or other forms of expression must be done in advance of actual publication or
dissemination. Moreover, petitioners are only required to inform the COMELEC of candidates'/parties'
guestings, but there is no regulation as to the content of the news or the expressions in news interviews or
news documentaries. Respondent then emphasized that the Supreme Court has held that freedom of
speech and the press may be limited in light of the duty of the COMELEC to ensure equal access to
opportunities for public service.

With regard to the right to reply provision, respondent also does not consider it as restrictive of the airing of
bona fide news broadcasts. More importantly, it stressed, the right to reply is enshrined in the Constitution,
and the assailed Resolutions provide that said right can only be had after going through administrative due
process. The provision was also merely lifted from Section 10 of R.A. No. 9006, hence, petitioner ABC is
actually attacking the constitutionality of R.A. No. 9006, which cannot be done through a collateral attack.
Next, respondent counters that there is no merit to ABC's claim that the Resolutions' definition of "political
advertisement" or "election propaganda" suffers from overbreadth, as the extent or scope of what falls
under said terms is clearly stated in Section 1 (4) of Resolution No. 9615.

It is also respondent's view that the nationwide aggregate total airtime does not violate the equal protection
clause, because it does not make any substantial distinctions between national and regional and/or local
broadcast stations, and even without the aggregate total airtime rule, candidates and parties are likely to be
more inclined to advertise in national broadcast stations. Respondent likewise sees no merit in petitioners'
claim that the Resolutions amount to taking of private property without just compensation. Respondent
emphasizes that radio and television broadcasting companies do not own the airwaves and frequencies
through which they transmit broadcast signals; they are merely given the temporary privilege to use the
same. Since they are merely enjoying a privilege, the same may be reasonably burdened with some form
of public service, in this case, to provide candidates with the opportunity to reply to charges aired against
them.

Lastly, respondent contends that the public consultation requirement does not apply to constitutional
commissions such as the COMELEC, pursuant to Section 1, Chapter I, Book VII of the Administrative Code
of 1987. Indeed, Section 9, Chapter II, Book VII of said Code provides, thus:

Section 9. Public Participation. - (1) If not otherwise required by law, an agency shall, as far as
practicable, publish or circulate notices of proposed rules and afford interested parties the
opportunity to submit their views prior to the adoption of any rule.

However, Section 1, Chapter 1, Book VII of said Code clearly provides:

Section 1. Scope. -This Book shall be applicable to all agencies as defined in the next succeeding
section, except the Congress, the Judiciary, the Constitutional Commissions, military
establishments in all matters relating exclusively to Armed Forces personnel, the Board of Pardons
and Parole, and state universities and colleges.

Nevertheless, even if public participation is not required, respondent still conducted a meeting with
representatives of the KBP and various media outfits on December 26, 2012, almost a month before the
issuance of Resolution No. 9615.

On April 2, 2013, petitioner GMA filed its Reply, 14 where it advanced the following counter-arguments:

According to GMA, a petition for certiorari is the proper remedy to question the herein assailed Resolutions,
which should be considered as a "decision, order or ruling of the Commission" as mentioned in Section 1,
Rule 37 of the COMELEC Rules of Procedure which provides:

Section 1. Petition for Certiorari,· and Time to File. - Unless otherwise provided by law, or by any specific
provisions in these Rules, any decision, order or ruling of the Commission may be brought to the Supreme
Court on certiorari by the aggrieved party within thirty (30) days from its promulgation.

GMA further stressed that this case involves national interest, and the urgency of the matter justifies its
resort to the remedy of a petition for certiorari.
Therefore, GMA disagrees with the COMELEC's position that the proper remedy is a petition for declaratory
relief because such action only asks the court to make a proper interpretation of the rights of parties under
a statute or regulation. Such a petition does not nullify the assailed statute or regulation, or grant injunctive
relief, which petitioners are praying for in their petition. Thus, GMA maintains that a petition for certiorari is
the proper remedy.

GMA further denies that it is making a collateral attack on the Fair Election Act, as it is not attacking said
law. GMA points out that it has stated in its petition that the law in fact allows the sale or donation of airtime
for political advertisements and does not impose criminal liability against radio and television stations. What
it is assailing is the COMELEC's erroneous interpretation of the law's provisions by declaring such sale
and/or donation of airtime unlawful, which is contrary to the purpose of the Fair Election Act.

GMA then claims that it has legal standing to bring the present suit because:

x x x First, it has personally suffered a threatened injury in the form of risk of criminal liability because of the
alleged unconstitutional and unlawful conduct of respondent COMELEC in expanding what was provided
for in R.A. No. 9006. Second, the injury is traceable to the challenged action of respondent COMELEC, that
is, the issuance of the assailed Resolutions. Third, the injury is likely to be redressed by the remedy sought
in petitioner GMA's Petition, among others, for the Honorable Court to nullify the challenged pertinent
provisions of the assailed Resolutions.15

On substantive issues, GMA first argues that the questioned Resolutions are contrary to the objective and
purpose of the Fair Election Act. It points out that the Fair Election Act even repealed the political ad ban
found in the earlier law, R.A. No. 6646. The Fair Election Act also speaks of "equal opportunity" and "equal
access,'' but said law never mentioned equalizing the economic station of the rich and the poor, as a
declared policy. Furthermore, in its opinion, the supposed correlation between candidates' expenditures for
TV ads and actually winning the elections, is a mere illusion, as there are other various factors responsible
for a candidate's winning the election. GMA then cites portions of the deliberations of the Bicameral
Conference Committee on the bills that led to the enactment of the Fair Election Act, and alleges that this
shows the legislative intent that airtime allocation should be on a "per station" basis. Thus, GMA claims it
was arbitrary and a grave abuse of discretion for the COMELEC to issue the present Resolutions imposing
airtime limitations on an "aggregate total" basis.

It is likewise insisted by GMA that the assailed Resolutions impose an unconstitutional burden on them,
because their failure to strictly monitor the duration of total airtime that each candidate has purchased even
from other stations would expose their officials to criminal liability and risk losing the station's good
reputation and goodwill, as well as its franchise. It argues that the wordings of the Resolutions belie the
COMELEC's claim that petitioners would only incur liability if they "knowingly" sell airtime beyond the limits
imposed by the Resolutions, because the element of knowledge is clearly absent from the provisions
thereof. This makes the provisions have the nature of malum prohibitum.

Next, GMA also says that the application of the aggregate airtime limit constitutes prior restraint and is
unconstitutional, opining that "[t]he reviewing power of respondent COMELEC and its sole judgment of a
news event as a political advertisement are so pervasive under the assailed Resolutions, and provoke the
distastes or chilling effect of prior restraint" 16 as even a legitimate exercise of a constitutional right might
expose it to legal sanction. Thus, the governmental interest of leveling the playing field between rich and
poor candidates cannot justify the restriction on the freedoms of expression, speech and of the press.
On the issue of lack of prior public participation, GMA cites Section 82 of the Omnibus Election Code,
pertinent portions of which provide, thus:

Section 82. Lawful election propaganda. - Lawful election propaganda shall include:

xxxx

All other forms of election propaganda not prohibited by this Code as the Commission may authorize after
due notice to all interested parties and hearing where all the interested parties were given an equal
opportunity to be heard: Provided, That the Commission's authorization shall be published in two
newspapers of general circulation throughout the nation for at least twice within one week after the
authorization has been granted.

There having been no prior public consultation held, GMA contends that the COMELEC is guilty of
depriving petitioners of its right to due process of law.

GMA then concludes that it is also entitled to a temporary restraining order, because the implementation of
the Resolutions in question will cause grave and irreparable damage to it by disrupting and emasculating its
mandate to provide television and radio services to the public, and by exposing it to the risk of incurring
criminal and administrative liability by requiring it to perform the impossible task of surveillance and
monitoring, or the broadcasts of other radio and television stations.

Thereafter, on April 4, 2013, the COMELEC, through the Office of the Solicitor General (OSG), filed a
Supplemental Comment and Opposition 17 where it further expounded on the legislative intent behind the
Fair Election Act, also quoting portions of the deliberations of the Bicameral Conference Committee,
allegedly adopting the Senate Bill version setting the computation of airtime limits on a per candidate, not
per station, basis. Thus, as enacted into law, the wordings of Section 6 of the Fair Election Act shows that
the airtime limit is imposed on a per candidate basis, rather than on a per station basis. Furthermore, the
COMELEC states that petitioner intervenor Senator Cayetano is wrong in arguing that there should be
empirical data to support the need to change the computation of airtime limits from a per station basis to a
per candidate basis, because nothing in law obligates the COMELEC to support its Resolutions with
empirical data, as said airtime limit was a policy decision dictated by the legislature itself, which had the
necessary empirical and other data upon which to base said policy decision.

The COMELEC then points out that Section 2 (7), 18 Article IX (C) of the Constitution empowers it to
recommend to Congress effective measures to minimize election spending and in furtherance of such
constitutional power, the COMELEC issued the questioned Resolutions, in faithful implementation of the
legislative intent and objectives of the Fair Election Act.

The COMELEC also dismisses Senator Cayetano's fears that unauthorized or inadvertent inclusion of his
name, initial, image, brand, logo, insignia and/or symbol in tandem advertisements will be charged against
his airtime limits by pointing out that what will be counted against a candidate's airtime and expenditures
are those advertisements that have been paid for or donated to them to which the candidate has given
consent.
With regard to the attack that the total aggregate airtime limit constitutes prior restraint or undue
abridgement of the freedom of speech and expression, the COMELEC counters that "the Resolutions enjoy
constitutional and congressional imprimatur. It is the Constitution itself that imposes the restriction on the
freedoms of speech and expression, during election period, to promote an important and significant
governmental interest, which is to equalize, as far as practicable, the situation of rich and poor candidates
by preventing the former from enjoying the undue advantage offered by huge campaign 'war chests."' 19

Lastly, the COMELEC also emphasizes that there is no impairment of the people's right to information on
matters of public concern, because in this case, the COMELEC is not withholding access to any public
record.

On April 16, 2013, this Court issued a Temporary Restraining Order 20 (TRO) in view of the urgency involved
and to prevent irreparable injury that may be caused to the petitioners if respondent COMELEC is not
enjoined from implementing Resolution No. 9615.

On April 19, 2013 respondent filed an Urgent Motion to Lift Temporary Restraining Order and Motion for
Early Resolution of the Consolidated Petitions. 21

On May 8, 2013, petitioners ABS-CBN and the KBP filed its Opposition/Comment 22 to the said Motion. Not
long after, ABC followed suit and filed its own Opposition to the Motion 23 filed by the respondent.

In the interim, respondent filed a Second Supplemental Comment and Opposition 24 dated April 8, 2013.

In the Second Supplemental Comment and Opposition, respondent delved on points which were not
previously discussed in its earlier Comment and Supplemental Comment, particularly those raised in the
petition filed by petitioner ABS-CBN and KBP.

Respondent maintains that certiorari in not the proper remedy to question the Constitutionality of the
assailed Resolutions and that petitioners ABS-CBN and KBP have no locus standi to file the present
petition.

Respondent posits that contrary to the contention of petitioners, the legislative history of R.A. No. 9006
conclusively shows that congress intended the airtime limits to be computed on a "per candidate" and not
on a "per station" basis. In addition, the legal duty of monitoring lies with the COMELEC. Broadcast stations
are merely required to submit certain documents to aid the COMELEC in ensuring that candidates are not
sold airtime in excess of the allowed limits.

Also, as discussed in the earlier Comment, the prior notice requirement is a mechanism designed to inform
the COMELEC of the appearances or guesting of candidates in bona fide news broadcasts. It is for
monitoring purposes only, not censorship. It does not control the subject matter of news broadcasts in
anyway. Neither does it prevent media outlets from covering candidates in news interviews, news events,
and news documentaries, nor prevent the candidates from appearing thereon.

As for the right to reply, respondent insists that the right to reply provision cannot be considered a prior
restraint on the freedoms of expression, speech and the press, as it does not in any way restrict the airing
of bona fide new broadcasts. Media entities are free to report any news event, even if it should turn out to
be unfavourable to a candidate or party. The assailed Resolutions merely give the candidate or party the
right to reply to such charges published or aired against them in news broadcasts.

Moreover, respondent contends that the imposition of the penalty of suspension and revocation of franchise
or permit for the sale or donation of airtime beyond the allowable limits is sanctioned by the Omnibus
Election Code.

Meanwhile, RMN filed its Petition on April 8, 2013. On June 4, 2013, the Court issued a
Resolution25 consolidating the case with the rest of the petitions and requiring respondent to comment
thereon.

On October 10, 2013, respondent filed its Third Supplemental Comment and Opposition. 26 Therein,
respondent stated that the petition filed by RMN repeats the issues that were raised in the previous
petitions. Respondent, likewise, reiterated its arguments that certiorari in not the proper remedy to question
the assailed resolutions and that RMN has no locus standi to file the present petition. Respondent
maintains that the arguments raised by RMN, like those raised by the other petitioners are without merit
and that RMN is not entitled to the injunctive relief sought.

The petition is partly meritorious.

At the outset, although the subject of the present petit10ns are Resolutions promulgated by the COMELEC
relative to the conduct of the 2013 national and local elections, nevertheless the issues raised by the
petitioners have not been rendered moot and academic by the conclusion of the 2013 elections.
Considering that the matters elevated to the Court for resolution are susceptible to repetition in the conduct
of future electoral exercises, these issues will be resolved in the present action.

PROCEDURAL ASPECTS

Matters of procedure and technicalities normally take a backseat when issues of substantial and
transcendental importance are presented before the Court. So the Court does again in this particular case.

Proper Remedy

Respondent claims that certiorari and prohibition are not the proper remedies that petitioners have taken to
question the assailed Resolutions of the COMELEC. Technically, respondent may have a point. However,
considering the very important and pivotal issues raised, and the limited time, such technicality should not
deter the Court from having to make the final and definitive pronouncement that everyone else depends for
enlightenment and guidance. "[T]his Court has in the past seen fit to step in and resolve petitions despite
their being the subject of an improper remedy, in view of the public importance of the tile issues raised
therein.27

It has been in the past, we do so again.

Locus Standi
Every time a constitutional issue is brought before the Court, the issue of locus standi is raised to question
the personality of the parties invoking the Court's jurisdiction. The Court has routinely made reference to a
liberalized stance when it comes to petitions raising issues of transcendental importance to the country.
Invariably, after some discussions, the Court would eventually grant standing. 28

In this particular case, respondent also questions the standing of the petitioners. We rule for the petitioners.
For petitioner-intervenor Senator Cayetano, he undoubtedly has standing since he is a candidate whose
ability to reach out to the electorate is impacted by the assailed Resolutions.

For the broadcast companies, they similarly have the standing in view of the direct injury they may suffer
relative to their ability to carry out their tasks of disseminating information because of the burdens imposed
on them. Nevertheless, even in regard to the broadcast companies invoking the injury that may be caused
to their customers or the public - those who buy advertisements and the people who rely on their
broadcasts - what the Court said in White Light Corporation v. City of Manila 29 may dispose of the question.
In that case, there was an issue as to whether owners of establishments offering "wash-up" rates may have
the requisite standing on behalf of their patrons' equal protection claims relative to an ordinance of the City
of Manila which prohibited "short-time" or "wash-up" accommodation in motels and similar establishments.
The Court essentially condensed the issue in this manner: "[T]he crux of the matter is whether or not these
establishments have the requisite standing to plead for protection of their patrons' equal protection
rights."30 The Court then went on to hold:

Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and
harm from the law or action challenged to support that party's participation in the case. More importantly,
the doctrine of standing is built on the principle of separation of powers, sparing as it does unnecessary
interference or invalidation by the judicial branch of the actions rendered by its co-equal branches of
government.

The requirement of standing is a core component of the judicial system derived directly from the
Constitution. The constitutional component of standing doctrine incorporates concepts which concededly
are not susceptible of precise definition. In this jurisdiction, the extancy of "a direct and personal interest"
presents the most obvious cause, as well as the standard test for a petitioner's standing. In a similar vein,
the United States Supreme Court reviewed and elaborated on the meaning of the three constitutional
standing requirements of injury, causation, and redressability in Allen v. Wright.

Nonetheless, the general rules on standing admit of several exceptions such as the overbreadth doctrine,
taxpayer suits, third party standing and, especially in the Philippines, the doctrine of transcendental
importance.

For this particular set of facts, the concept of third party standing as an exception and the overbreadth
doctrine are appropriate. x x x

xxxx

American jurisprudence is replete with examples where parties-ininterest were allowed standing to
advocate or invoke the fundamental due process or equal protection claims of other persons or classes of
persons injured by state action. x x x
xxxx

Assuming arguendo that petitioners do not have a relationship with their patrons for the former to assert the
rights of the latter, the overbreadth doctrine comes into play. In overbreadth analysis, challengers to
government action are in effect permitted to raise the rights of third parties. Generally applied to statutes
infringing on the freedom of speech, the overbreadth doctrine applies when a statute needlessly restrains
even constitutionally guaranteed rights. In this case, the petitioners claim that the Ordinance makes a
sweeping intrusion into the right to liberty of their clients. We can see that based on the allegations in the
petition, the Ordinance suffers from overbreadth.

We thus recognize that the petitioners have a right to assert the constitutional rights of their clients to
patronize their establishments for a "wash-rate" time frame. 31

If in regard to commercial undertakings, the owners may have the right to assert a constitutional right of
their clients, with more reason should establishments which publish and broadcast have the standing to
assert the constitutional freedom of speech of candidates and of the right to information of the public, not to
speak of their own freedom of the press. So, we uphold the standing of petitioners on that basis.

SUBSTANTIVE ASPECTS

Aggregate Time Limits

COMELEC Resolution No. 9615 introduced a radical departure from the previous COMELEC resolutions
relative to the airtime limitations on political advertisements. This essentially consists in computing the
airtime on an aggregate basis involving all the media of broadcast communications compared to the past
where it was done on a per station basis. Thus, it becomes immediately obvious that there was effected a
drastic reduction of the allowable minutes within which candidates and political parties would be able to
campaign through the air. The question is accordingly whether this is within the power of the COMELEC to
do or not. The Court holds that it is not within the power of the COMELEC to do so.

a. Past elections and airtime limits

The authority of the COMELEC to impose airtime limits directly flows from the Fair Election Act (R.A. No.
9006 [2001])32 - one hundred (120) minutes of television advertisement and one-hundred· eighty (180)
minutes for radio advertisement. For the 2004 elections, the respondent COMELEC promulgated
Resolution No. 652033 implementing the airtime limits by applying said limitation on a per station
basis.34 Such manner of determining airtime limits was likewise adopted for the 2007 elections, through
Resolution No. 7767.35 In the 2010 elections, under Resolution No. 8758, 36 the same was again adopted.
But for the 2013 elections, the COMELEC, through Resolution No. 9615, as amended by Resolution No.
9631, chose to aggregate the total broadcast time among the different broadcast media, thus: Section 9.
Requirements and/or Limitations on the Use of Election Propaganda through Mass Media. - All parties and
bona fide candidates shall have equal access to media time and space for their election propaganda during
the campaign period subject to the following requirements and/or limitations:

a. Broadcast Election Propaganda

The duration of an air time that a candidate, or party may use for their broadcast advertisements or election
propaganda shall be, as follows:

For Candidates/Registered Not more than an aggregate total of one hundred

Political parties for a National (120) minutes of television advertising, whether
Elective Position appearing on national, regional, or local, free or
cable television, and one hundred eighty (180)
minutes of radio advertising, whether airing on
national, regional, or local radio, whether by
purchase or donation
For Candidates/Registered Not more than an aggregate total of sixty (60)
Political parties for a Local minutes of television advertising, whether
Elective Position appearing on national, regional, or local, free or
cable television, and ninety (90) minutes of radio
advertising, whether airing on national, regional, or
local radio, whether by purchase or donation.

In cases where two or more candidates or parties whose names, initials, images, brands, logos, insignias,
color motifs, symbols, or forms of graphical representations are displayed, exhibited, used, or mentioned
together in the broadcast election propaganda or advertisements, the length of time during which they
appear or are being mentioned or promoted will be counted against the airtime limits allotted for the said
candidates or parties and the cost of the said advertisement will likewise be considered as their
expenditures, regardless of whoever paid for the advertisements or to whom the said advertisements were
donated.

x x x x37

Corollarily, petitioner-intervenor, Senator Cayetano, alleges:

6.15. The change in the implementation of Section 6 of R.A. 9006 was undertaken by respondent Comelec
without consultation with the candidates for the 2013 elections, affected parties such as media
organizations, as well as the general public. Worse, said change was put into effect without explaining the
basis therefor and without showing any data in support of such change. Respondent Comelec merely
maintained that such action "is meant to level the playing field between the moneyed candidates and those
who don i have enough resources," without particularizing the empirical data upon which such a sweeping
statement was based. This was evident in the public hearing held on 31 January 2013 where petitioner
GMA, thru counsel, explained that no empirical data on he excesses or abuses of broadcast media were
brought to the attention of the public by respondent Comelec, or even stated in the Comelec

Resolution No. 9615. Thus –

xxxx

Chairman Brillantes
So if we can regulate and amplify, we may amplify meaning we can expand if we want to. But the authority
of the Commission is if we do not want to amplify and we think that the 120 or 180 is okay we cannot be
compelled to amplify. We think that 120 or 180 is okay, is enough.

Atty. Lucila

But with due respect Your Honor, I think the basis of the resolution is found in the law and the law has been
enterpreted (sic) before in 2010 to be 120 per station, so why the change, your Honor?

Chairman Brillantes

No, the change is not there, the right to amplify is with the Commission on Elections. Nobody can encroach
in our right to amplify. Now, if in 2010 the Commission felt that per station or per network is the rule then
that is the prerogative of the Commission then they could amplify it to expand it. If the current Commission
feels that 120 is enough for the particular medium like TV and 180 for radio, that is our prerogative. How
can you encroach and what is unconstitutional about it?

Atty. Lucila

We are not questioning the authority of the Honorable Commission to regulate Your Honor, we are just
raising our concern on the manner of regulation because as it is right now, there is a changing mode or
sentiments of the Commission and the public has the right to know, was there rampant overspending on
political ads in 2010, we were not informed Your Honor. Was there abuse of the media in 2010, we were
not informed Your Honor. So we would like to know what is the basis of the sudden change in this
limitation, Your Honor .. And law must have a consistent interpretation that [is]our position, Your Honor.

Chairman Brillantes

But my initial interpretation, this is personal to this representation counsel, is that if the Constitution allows
us to regulate and then it gives us the prerogative to amplify then the prerogative to amplify you should
leave this to the discretion of the Commission. Which means if previous Commissions felt that expanding it
should be part of our authority that was a valid exercise if we reduce it to what is provided for by law which
is 120-180 per medium, TV, radio, that is also within the law and that is still within our prerogative as
provided for by the Constitution. If you say we have to expose the candidates to the public then I think the
reaction should come, the negative reaction should come from the candidates not from the media, unless
you have some interest to protect directly. Is there any interest on the part of the media to expand it?

Atty. Lucila

Well, our interest Your Honor is to participate in this election Your Honor and we have been constantly (sic)
as the resolution says and even in the part involved because you will be getting some affirmative action
time coming from the media itself and Comelec time coming from the media itself. So we could like to be
both involved in the whole process of the exercise of the freedom of suffrage Your Honor.

Chairman Brillantes
Yes, but the very essence of the Constitutional provision as well as the provision of 9006 is actually to level
the playing field. That should be the paramount consideration. If we allow everybody to make use of all their
time and all radio time and TV time then there will be practically unlimited use of the mass media ....

Atty. Lucila

Was there in 2010 Your Honor, was there any data to support that there was an unlimited and abuse of a
(sic) political ads in the mass media that became the basis of this change in interpretation Your Honor? We
would like to know about it Your Honor.

Chairman Brillantes

What do you think there was no abuse in 201 O?

Atty. Lucila

As far as the network is concern, there was none Your Honor.

Chairman Brillantes

There was none ..... .

Atty. Lucila

I'm sorry, Your Honor ...

Chairman Brillantes

Yes, there was no abuse, okay, but there was some advantage given to those who took ... who had the
more moneyed candidates took advantage of it.

Atty. Lucila

But that is the fact in life, Your Honor there are poor candidates, there are rich candidates. No amount of
law or regulation can even level the playing filed (sic) as far as the economic station in life of the candidates
are concern (sic) our Honor.38

Given the foregoing observations about what happened during the hearing, Petitioner-Intervenor went on to
allege that:

6.16. Without any empirical data upon which to base the regulatory measures in Section 9 (a), respondent
Comelec arbitrarily changed the rule from per station basis to aggregate airtime basis. Indeed, no credence
should be given to the cliched explanation of respondent Comelec (i.e. leveling the playing field) in its
published statements which in itself is a mere reiteration of the rationale for the enactment of the political ad
ban of Republic Act No. 6646, and which has likewise been foisted when said political ad ban was lifted by
R.A. 9006.39
From the foregoing, it does appear that the COMELEC did not have any other basis for coming up with a
new manner of determining allowable time limits except its own idea as to what should be the maximum
number of minutes based on its exercise of discretion as to how to level the playing field. The same could
be encapsulized in the remark of the COMELEC Chairman that "if the Constitution allows us to regulate
and then it gives us the prerogative to amplify then the prerogative to amplify you should leave this to the
discretion of the Commission."40

The Court could not agree with what appears as a nonchalant exercise of discretion, as expounded anon.

b. COMELEC is duty bound to come up with reasonable basis for changing the interpretation and
implementation of the airtime limits

There is no question that the COMELEC is the office constitutionally and statutorily authorized to enforce
election laws but it cannot exercise its powers without limitations - or reasonable basis. It could not simply
adopt measures or regulations just because it feels that it is the right thing to do, in so far as it might be
concerned. It does have discretion, but such discretion is something that must be exercised within the
bounds and intent of the law. The COMELEC is not free to simply change the rules especially if it has
consistently interpreted a legal provision in a particular manner in the past. If ever it has to change the
rules, the same must be properly explained with sufficient basis.

Based on the transcripts of the hearing conducted by the COMELEC after it had already promulgated the
Resolution, the respondent did not fully explain or justify the change in computing the airtime allowed
candidates and political parties, except to make reference to the need to "level the playing field." If the "per
station" basis was deemed enough to comply with that objective in the past, why should it now be suddenly
inadequate? And, the short answer to that from the respondent, in a manner which smacks of overbearing
exercise of discretion, is that it is within the discretion of the COMELEC. As quoted in the transcript, "the
right to amplify is with the COMELEC. Nobody can encroach in our right to amplify. Now, if in 2010 the
Commission felt that per station or per network is the rule then that is the prerogative of the Commission
then they could amplify it to expand it. If the current Commission feels that 120 is enough for the particular
medium like TV and 180 for radio, that is our prerogative. How can you encroach and what is
unconstitutional about it?"41

There is something basically wrong with that manner of explaining changes in administrative rules. For one,
it does not really provide a good basis for change. For another, those affected by such rules must be given
a better explanation why the previous rules are no longer good enough. As the Court has said in one case:

While stability in the law, particularly in the business field, is desirable, there is no demand that the NTC
slavishly follow precedent. However, we think it essential, for the sake of clarity and intellectual honesty,
that if an administrative agency decides inconsistently with previous action, that it explain thoroughly why a
different result is warranted, or ?f need be, why the previous standards should no longer apply or should be
overturned. Such explanation is warranted in order to sufficiently establish a decision as having rational
basis. Any inconsistent decision lacking thorough, ratiocination in support may be struck down as being
arbitrary. And any decision with absolutely nothing to support it is a nullity. 42

What the COMELEC came up with does not measure up to that level of requirement and accountability
which elevates administrative rules to the level of respectability and acceptability. Those governed by
administrative regulations are entitled to a reasonable and rational basis for any changes in those rules by
which they are supposed to live by, especially if there is a radical departure from the previous ones.

c. The COMELEC went beyond the authority granted it by the law in adopting "aggregate" basis in the
determination of allowable airtime

The law, which is the basis of the regulation subject of these petitions, pertinently provides:

6.2. (a) Each bona fide candidate or registered political party for a nationally elective office shall be entitled
to not more than one hundred twenty (120) minutes of television advertisement and one hundred eighty
(180) minutes of radio advertisement whether by purchase or donation.

(b) Each bona fide candidate or registered political party for a locally elective office shall be entitled to not
more than sixty (60) minutes of television advertisement and ninety (90) minutes of radio advertisement
whether by purchase or donation; x x x

The law, on its face, does not justify a conclusion that the maximum allowable airtime should be based on
the totality of possible broadcast in all television or radio stations. Senator Cayetano has called our
attention to the legislative intent relative to the airtime allowed - that it should be on a "per station" basis. 43

This is further buttressed by the fact that the Fair Election Act (R.A. No. 9006) actually repealed the
previous provision, Section ll(b) of Republic Act No. 6646, 44 which prohibited direct political advertisements
-the so-called "political ad ban." If under the previous law, no candidate was allowed to directly buy or
procure on his own his broadcast or print campaign advertisements, and that he must get it through the
COMELEC Time or COMELEC Space, R.A. No. 9006 relieved him or her from that restriction and allowed
him or her to broadcast time or print space subject to the limitations set out in the law. Congress, in
enacting R.A. No. 9006, felt that the previous law was not an effective and efficient way of giving voice to
the people. Noting the debilitating effects of the previous law on the right of suffrage and Philippine
democracy, Congress decided to repeal such rule by enacting the Fair Election Act.

In regard to the enactment of the new law, taken in the context of the restrictive nature of the previous law,
the sponsorship speech of Senator Raul Roco is enlightening:

The bill seeks to repeal Section 85 of the Omnibus Election Code and Sections 10 and 11 of RA 6646. In
view of the importance of their appeal in connection with the thrusts of the bill, I hereby quote these
sections in full:

"SEC. 85. Prohibited forms of election propaganda. - It shall be unlawful:

"(a) To print, publish, post or distribute any poster, pamphlet, circular, handbill, or printed
matter urging voters to vote for or against any candidate unless they hear the names and
addresses of the printed and payor as required in Section 84 hereof;

"(b) To erect, put up, make use of, attach, float or display any billboard, tinplate-poster,
balloons and the like, of whatever size, shape, form or kind, advertising for or against any
candidate or political party;
 "(c) To purchase, manufacture, request, distribute or accept electoral propaganda gadgets,
such as pens, lighters, fans of whatever nature, flashlights, athletic goods or materials,
wallets, shirts, hats, bandannas, matches, cigarettes and the like, except that campaign
supporters accompanying a candidate shall be allowed to wear hats and/or shirts or T-
shirts advertising a candidate;

"(d) To show or display publicly any advertisement or propaganda for or against any
candidate by means of cinematography, audio-visual units or other screen projections
except telecasts which may be allowed as hereinafter provided; and

"(e) For any radio broadcasting or television station to sell or give free of charge airtime for
campaign and other political purposes except as authorized in this Code under the rules
and regulations promulgated by the Commission pursuant thereto;

"Any prohibited election propaganda gadget or advertisement shall be stopped, confiscated or tom down by
the representative of the Commission upon specific authority of the Commission." "SEC. 10. Common
Poster Areas. - The Commission shall designate common poster areas in strategic public places such as
markets, barangay centers and the like wherein candidates can post, display or exhibit election propaganda
to announce or further their candidacy.

"Whenever feasible, common billboards may be installed by the Commission and/or non-partisan private or
civic organizations which the Commission may authorize whenever available, after due notice and hearing,
in strategic areas where it may readily be seen or read, with the heaviest pedestrian and/or vehicular traffic
in the city or municipality.

The space in such common poster areas or billboards shall be allocated free of charge, if feasible,
equitably and impartially among the candidates in the province, city or municipality. "SEC. 11. Prohibite,d
Forms of Election Propaganda. - In addition to the forms of election propaganda prohibited under Section
85 of Batas Pambansa Blg. 881, it shall be unlawful: (a) to draw, paint, inscribe, write, post, display or
puolicly exhibit any election propaganda in any place, whether private or public, except in common poster
areas and/or billboards provided in the immediately preceding section, at the candidate's own residence, or
at the campaign headquarters of the candidate or political party: Provided, That such posters or election
propaganda shall in no case exceed two (2) feet by three (3) feet in area; Provided, further, That at the site
of and on the occasion of a public meeting or rally, streamers, not more than two (2) feet and not exceeding
three (3) feet by eight (8) each may be displayed five (5) days before the date of the meeting or rally, and
shall be removed within twenty-four (24) hours after said meeting or rally; and

"(b) For any newspapers, radio broadcasting or television station, or other mass media, or any person
making use of the mass media to sell or give for free of charge print space or air time for campaign or other
political purposes except to the Commission as provided under Section 90 and 92 of Batas Pambansa Big.
881. Any mass media columnist, commentator, announcer or personality who is a candidate for any
elective public office shall take a leave of absence from his work as such during the campaign."

The repeal of the provision on the Common Poster Area implements the strong recommendations of the
Commission on Elections during the hearings. It also seeks to apply the doctrine enunciated by the
Supreme Court in the case of Blo Umpar Adiong vs. Commission on Elections, 207 SCRA 712, 31 March
1992. Here a unanimous Supreme Court ruled: The COMELEC's prohibition on the posting of decals and
stickers on "mobile" places whether public or private except [in] designated areas provided for by the
COMELEC itself is null and void on constitutional grounds.

For the foregoing reasons, we commend to our colleagues the early passage of Senate Bill No. 1742. In so
doing, we move one step towards further ensuring "free, orderly, honest, peaceful and credible elections"
as mandated by the Constitution.45

Given the foregoing background, it is therefore ineluctable to conclude that Congress intended to provide a
more expansive and liberal means by which the candidates, political parties, citizens and other stake
holders in the periodic electoral exercise may be given a chance to fully explain and expound on their
candidacies and platforms of governance, and for the electorate to be given a chance to know better the
personalities behind the candidates. In this regard, the media is also given a very important part in that
undertaking of providing the means by which the political exercise becomes an interactive process. All of
these would be undermined and frustrated with the kind of regulation that the respondent came up with.

The respondent gave its own understanding of the import of the legislative deliberations on the adoption of
R.A. No. 9006 as follows:

The legislative history of R.A. 9006 clearly shows that Congress intended to impose the per candidate or
political party aggregate total airtime limits on political advertisements and election propaganda. This is
evidenced by the dropping of the "per day per station" language embodied in both versions of the House of
Representatives and Senate bills in favour of the "each candidate" and "not more than" limitations now
found in Section 6 of R.A. 9006.

The pertinent portions of House Bill No. 9000 and Senate Bill No. 1742 read as follows:

House Bill No. 9000:

SEC. 4. Section 86 of the same Batas is hereby amended to read as follows:

Sec. 86. Regulation of Election Propaganda Through Mass Media.

x x x           x x x          x x x

A) The total airtime available to the candidate and political party, whether by purchase or by donation, shall
be limited to five (5) minutes per day in each television, cable television and radio stations during the
applicable campaign period.

Senate Bill No. 1742:

SEC. 5. Equal Access to Media Space and Time. -All registered parties and bona fide candidates shall
have equal access to media space and time. The following guidelines may be amplified by the COMELEC.

x x x           x x x          x x x
2. The total airtime available for each registered party and bona fide candidate whether by purchase or
donation shall not exceed a total of one (1) minute per day per television or radio station. (Emphasis
supplied.)

As Section 6 of R.A. 9006 is presently worded, it can be clearly seen that the legislature intended the
aggregate airtime limits to be computed on per candidate or party basis. Otherwise, if the legislature
intended the computation to be on per station basis, it could have left the original "per day per station"
formulation.46

The Court does not agree. It cannot bring itself to read the changes in the bill as disclosing an intent that
the COMELEC wants this Court to put on the final language of the law. If anything, the change in language
meant that the computation must not be based on a "per day" basis for each television or radio station. The
same could not therefore lend itself to an understanding that the total allowable time is to be done on an
aggregate basis for all television or radio stations. Clearly, the respondent in this instance went beyond its
legal mandate when it provided for rules beyond what was contemplated by the law it is supposed to
implement. As we held in Lakin, Jr. v. Commission on Elections: 47

The COMELEC, despite its role as the implementing arm of the Government in the enforcement and
administration of all laws and regulations relative to the conduct of an election, has neither the authority nor
the license to expand, extend, or add anything to the law it seeks to implement thereby. The IRRs the
COMELEC issued for that purpose should always be in accord with the law to be implemented, and should
not override, supplant, or modify the law. It is basic that the IRRs should remain consistent with the law
they intend to carry out.

Indeed, administrative IRRs adopted by a particular department of the Government under legislative
authority must be in harmony with the provisions of the law, and should be for the sole purpose of carrying
the law's general provisions into effect. The law itself cannot be expanded by such IRRs, because an
administrative agency cannot amend an act of Congress. 48

In the case of Lakin, Jr., the COMELEC's explanation that the Resolution then in question did not add
anything but merely reworded and rephrased the statutory provision did not persuade the Court. With more
reason here since the COMELEC not only reworded or rephrased the statutory provision - it practically
replaced it with its own idea of what the law should be, a matter that certainly is not within its authority. As
the Court said in Villegas v. Subido:49

One last word. Nothing is better settled in the law than that a public official exercises power, not rights. The
government itself is merely an agency through which the will of the state is expressed and enforced. Its
officers therefore are likewise agents entrusted with the responsibility of discharging its functions. As such
there is no presumption that they are empowered to act. There must be a delegation of such authority,
either express or implied. In the absence of a valid grant, they are devoid of power. What they do suffers
from a fatal infirmity. That principle cannot be sufficiently stressed. In the appropriate language of Chief
Justice Hughes: "It must be conceded that departmental zeal may not be permitted to outrun the authority
conferred by statute." Neither the high dignity of the office nor the righteousness of the motive then is an
acceptable substitute. Otherwise the rule of law becomes a myth. Such an eventuality, we must take all
pains to avoid.50

So it was then. So does the rule still remains the same.

d. Section 9 (a) of COMELEC Resolution No. 9615 on airtime limits also goes against the constitutional
guaranty of freedom of expression, of speech and of the press

The guaranty of freedom to speak is useless without the ability to communicate and disseminate what is
said. And where there is a need to reach a large audience, the need to access the means and media for
such dissemination becomes critical. This is where the press and broadcast media come along. At the
same time, the right to speak and to reach out would not be meaningful if it is just a token ability to be
heard by a few. It must be coupled with substantially reasonable means by which the communicator and
the audience could effectively interact. Section 9 (a) of COMELEC Resolution No. 9615, with its adoption of
the "aggregate-based" airtime limits unreasonably restricts the guaranteed freedom of speech and of the
press.

Political speech is one of the most important expressions protected by the Fundamental Law. "[F]reedom of
speech, of expression, and of the press are at the core of civil liberties and have to be protected at all costs
for the sake of democracy." 51 Accordingly, the same must remain unfettered unless otherwise justified by a
compelling state interest.

In regard to limitations on political speech relative to other state interests, an American case observed:

A restriction on the amount of money a person or group can spend on political communication during a
campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the
depth of their exploration, and the size of the audience reached. This is because virtually every means of
communicating ideas in today's mass society requires the expenditure of money. The distribution of the
humblest handbill or leaflet entails printing, paper, and circulation costs. Speeches and rallies generally
necessitate hiring a hall and publicizing the event. The electorate's increasing dependence on television,
radio, and other mass media for news and information has made these expensive modes of communication
indispensable instruments of effective political speech.

The expenditure limitations contained in the Act represent substantial, rather than merely theoretical
restraints on the quantity and diversity of political speech. The $1,000 ceiling on spending "relative to a
clearly identified candidate," 18 U.S.C. § 608(e)(l) (1970 ed., Supp. IV), would appear to exclude all citizens
and groups except candidates, political parties, and the institutional press from any significant use of the
most effective modes of communication. Although the Act's limitations on expenditures by campaign
organizations and political parties provide substantially greater room for discussion and debate, they would
have required restrictions in the scope of a number of past congressional and Presidential campaigns and
would operate to constrain campaigning by candidates who raise sums in excess of the spending ceiling. 52

Section 9 (a) ofCOMELEC Resolution No. 9615 comes up with what is challenged as being an
unreasonable basis for determining the allowable air time that candidates and political parties may avail of.
Petitioner GMA came up with its analysis of the practical effects of such a regulation:

5.8. Given the reduction of a candidate's airtime minutes in the New Rules, petitioner GMA
estimates that a national candidate will only have 120 minutes to utilize for his political
advertisements in television during the whole campaign period of 88 days, or will only have 81.81
seconds per day TV exposure allotment. If he chooses to place his political advertisements in the 3
major TV networks in equal allocation, he will only have 27.27 seconds of airtime per network per
day. This barely translates to 1 advertisement spot on a 30-second spot basis in television.
 5.9. With a 20-hour programming per day and considering the limits of a station's coverage, it will
be difficult for 1 advertising spot to make a sensible and feasible communication to the public, or in
political propaganda, to "make known [a candidate's] qualifications and stand on public issues".

5.10 If a candidate loads all of his 81.81 seconds per day in one network, this will translate to
barely three 30-second advertising spots in television on a daily basis using the same assumptions
above.

5.11 Based on the data from the 2012 Nielsen TV audience measurement in Mega Manila, the
commercial advertisements in television are viewed by only 39.2% of the average total day
household audience if such advertisements are placed with petitioner GMA, the leading television
network nationwide and in Mega Manila. In effect, under the restrictive aggregate airtime limits in
the New Rules, the three 30-second political advertisements of a candidate in petitioner GMA will
only be communicated to barely 40% of the viewing audience, not even the voting population, but
only in Mega Manila, which is defined by AGB Nielsen Philippines to cover Metro Manila and
certain urban areas in the provinces of Bulacan, Cavite, Laguna, Rizal, Batangas and Pampanga.
Consequently, given the voting population distribution and the drastically reduced supply of airtime
as a result of the New Rules' aggregate airtime limits, a national candidate will be forced to use all
of his airtime for political advertisements in television only in urban areas such as Mega Manila as
a political campaign tool to achieve maximum exposure.

5.12 To be sure, the people outside of Mega Manila or other urban areas deserve to be informed of
the candidates in the national elections, and the said candidates also enjoy the right to be voted
upon by these informed populace.53

The Court agrees. The assailed rule on "aggregate-based" airtime limits is unreasonable and arbitrary as it
unduly restricts and constrains the ability of candidates and political parties to reach out and communicate
with the people. Here, the adverted reason for imposing the "aggregate-based" airtime limits - leveling the
playing field - does not constitute a compelling state interest which would justify such a substantial
restriction on the freedom of candidates and political parties to communicate their ideas, philosophies,
platforms and programs of government. And, this is specially so in the absence of a clear-cut basis for the
imposition of such a prohibitive measure. In this particular instance, what the COMELEC has done is
analogous to letting a bird fly after one has clipped its wings.

It is also particularly unreasonable and whimsical to adopt the aggregate-based time limits on broadcast
time when we consider that the Philippines is not only composed of so many islands. There are also a lot of
languages and dialects spoken among the citizens across the country. Accordingly, for a national candidate
to really reach out to as many of the electorates as possible, then it might also be necessary that he
conveys his message through his advertisements in languages and dialects that the people may more
readily understand and relate to. To add all of these airtimes in different dialects would greatly hamper the
ability of such candidate to express himself - a form of suppression of his political speech.

Respondent itself states that "[t]elevision is arguably the most costeffective medium of dissemination. Even
a slight increase in television exposure can significantly boost a candidate's popularity, name recall and
electability."54 If that be so, then drastically curtailing the ability of a candidate to effectively reach out to the
electorate would unjustifiably curtail his freedom to speak as a means of connecting with the people.
Finally on this matter, it is pertinent to quote what Justice Black wrote in his concurring opinion in the
landmark Pentagon Papers case: "In the First Amendment, the Founding Fathers gave the free press the
protection it must have to fulfill its essential role in our democracy. The press was to serve the governed,
not the governors. The Government's power to censor the press was abolished so that the press would
remain forever free to censure the Government. The press was protected so that it could bare the secrets
of government and inform the people. Only a free and unrestrained press can effectively expose deception
in government."55

In the ultimate analysis, when the press is silenced, or otherwise muffled in its undertaking of acting as a
sounding board, the people ultimately would be the victims.

e. Section 9 (a) of Resolution 9615 is violative of the people's right to suffrage

Fundamental to the idea of a democratic and republican state is the right of the people to determine their
own destiny through the choice of leaders they may have in government. Thus, the primordial importance
of suffrage and the concomitant right of the people to be adequately informed for the intelligent exercise of
such birthright. It was said that:

x x x As long as popular government is an end to be achieved and safeguarded, suffrage, whatever may be
the modality and form devised, must continue to be the means by which the great reservoir of power must
be emptied into the receptacular agencies wrought by the people through their Constitution in the interest of
good government and the common weal. Republicanism, in so far as it implies the adoption of a
representative type of government, necessarily points to the enfranchised citizen as a particle of popular
sovereignty and as the ultimate source of the established authority. He has a voice in his Government and
whenever possible it is the solemn duty of the judiciary, when called upon to act in justifiable cases, to give
it efficacy and not to stifle or frustrate it. This, fundamentally, is the reason for the rule that ballots should be
read and appreciated, if not with utmost, with reasonable, liberality. x x x 56 It has also been said that "[ c ]
ompetition in ideas and governmental policies is at the core of our electoral process and of the First
Amendment freedoms."57 Candidates and political parties need adequate breathing space - including the
means to disseminate their ideas. This could not be reasonably addressed by the very restrictive manner
by which the respondent implemented the time limits in regard to political advertisements in the broadcast
media.

f. Resolution No. 9615 needs prior hearing before adoption

The COMELEC promulgated Resolution No. 9615 on January 15, 2013 then came up with a public hearing
on January 31, 2013 to explain what it had done, particularly on the aggregate-based air time limits. This
circumstance also renders the new regulation, particularly on the adoption of the aggregate-based airtime
limit, questionable. It must not be overlooked that the new Resolution introduced a radical change in the
manner in which the rules on airtime for political advertisements are to be reckoned. As such there is a
need for adequate and effective means by which they may be adopted, disseminated and implemented. In
this regard, it is not enough that they be published - or explained - after they have been adopted.

While it is true that the COMELEC is an independent office and not a mere administrative agency under the
Executive Department, rules which apply to the latter must also be deemed to similarly apply to the former,
not as a matter of administrative convenience but as a dictate of due process. And this assumes greater
significance considering the important and pivotal role that the COMELEC plays in the life of the nation.
Thus, whatever might have been said in Commissioner of Internal Revenue v. Court of Appeals, 58 should
also apply mutatis mutandis to the COMELEC when it comes to promulgating rules and regulations which
adversely affect, or impose a heavy and substantial burden on, the citizenry in a matter that implicates the
very nature of government we have adopted:

It should be understandable that when an administrative rule is merely interpretative in nature, its
applicability needs nothing further than its bare issuance for it gives no real consequence more than what
the law itself has already prescribed. When, upon the other hand, the administrative rule goes beyond
merely providing for the means that can facilitate or render least cumbersome the implementation of the
law but substantially adds to or increases the burden of those governed, it behooves the agency to accord
at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new
issuance is given the force and effect of law.

A reading of RMC 37-93, particularly considering the circumstances under which it has been issued,
convinces us that the circular cannot be viewed simply as a corrective measure (revoking in the process
the previous holdings of past Commissioners) or merely as construing Section 142(c)(l) of the NIRC, as
amended, but has, in fact and most importantly, been made in order to place "Hope Luxury," "Premium
More" and "Champion" within the classification of locally manufactured cigarettes bearing foreign brands
and to thereby have them covered by RA 7654. Specifically, the new law would have its amendatory
provisions applied to locally manufactured cigarettes which at the time of its effectivity were not so
classified as bearing foreign brands. x x x In so doing, the BIR not simply interpreted the law; verily, it
legislated under its quasi-legislative authority. The due observance of the requirements of notice, of
hearing, and of publication should not have been then ignored. 59

For failing to conduct prior hearing before coming up with Resolution No. 9615, said Resolution, specifically
in regard to the new rule on aggregate airtime is declared defective and ineffectual.

g. Resolution No. 9615 does not impose an unreasonable burden on the broadcast industry

It is a basic postulate of due process, specifically in relation to its substantive component, that any
governmental rule or regulation must be reasonable in its operations and its impositions. Any restrictions,
as well as sanctions, must be reasonably related to the purpose or objective of the government in a manner
that would not work unnecessary and unjustifiable burdens on the citizenry. Petitioner GMA assails certain
requirements imposed on broadcast stations as unreasonable. It explained:

5.40 Petitioner GMA currently operates and monitors 21 FM and AM radio stations nationwide and
8 originating television stations (including its main transmitter in Quezon City) which are authorized
to dechain national programs for airing and insertion of local content and advertisements.

5.41 In light of the New Rules wherein a candidate's airtime minutes are applied on an aggregate
basis and considering that said Rules declare it unlawful in Section 7( d) thereof for a radio,
television station or other mass media to sell or give for free airtime to a candidate in excess of that
allowed by law or by said New Rules:

"Section 7. Prohibited Forms of Election Propaganda -During the campaign period, it is unlawful: x
xxxxxxxx
(d) for any newspaper or publication, radio, television or cable television station, or other mass
media, or any person making use of the mass media to sell or to give free of charge print space or
air time for campaign or election propaganda purposes to any candidate or party in excess of the
size, duration or frequency authorized by law or these rules;

x x x           x x x          x x x

(Emphasis supplied)

petitioner GMA submits that compliance with the New Rules in order to avoid administrative or
criminal liability would be unfair, cruel and oppressive.

x x x x.

5.43 In the present situation wherein airtime minutes shall be shared by all television and radio
stations, broadcast mass media organizations would surely encounter insurmountable difficulties in
monitoring the airtime minutes spent by the numerous candidates for various elective positions, in
real time.

5.44 An inquiry with the National Telecommunications Commission (NTC) bears out that there are
372 television stations and 398 AM and 800 FM radio stations nationwide as of June 2012. In
addition, there are 1, 113 cable TV providers authorized by the NTC to operate within the country
as of the said date.

5.45 Given such numbers of broadcast entities and the necessity to monitor political
advertisements pursuant to the New Rules, petitioner OMA estimates that monitoring television
broadcasts of all authorized television station would involve 7,440 manhours per day. To aggravate
matters, since a candidate may also spend his/her broadcasting minutes on cable TV, additional
281,040 manhours per day would have to be spent in monitoring the various channels carried by
cable TV throughout the Philippines. As far as radio broadcasts (both AM and FM stations) are
concerned, around 23,960 manhours per day would have to be devoted by petitioner OMA to
obtain an accurate and timely determination of a political candidate's remaining airtime minutes.
During the campaign period, petitioner OMA would have to spend an estimated 27,494,720
manhours in monitoring the election campaign commercials of the different candidates in the
country.1âwphi1

5.46 In order to carry-out the obligations imposed by the New Rules, petitioner OMA further
estimates that it would need to engage and train 39,055 additional persons on an eight-hour shift,
and assign them all over the country to perform the required monitoring of radio, television and
cable TV broadcasts. In addition, it would likewise need to allot radio, television, recording
equipment and computers, as well as telecommunications equipment, for this surveillance and
monitoring exercise, thus imputing additional costs to the company. Attached herewith are the
computations explaining how the afore-said figures were derived and the conservative
assumptions made by petitioner OMA in reaching said figures, as Annex "H".
 5.47 Needless to say, such time, manpower requirements, expense and effort would have to be
replicated by each and every radio station to ensure that they have properly monitored around 33
national and more than 40,000 local candidates' airtime minutes and thus, prevent any risk of
administrative and criminal liability. 60

The Court cannot agree with the contentions of GMA. The apprehensions of the petitioner appear more to
be the result of a misappreciation of the real import of the regulation rather than a real and present threat to
its broadcast activities. The Court is more in agreement with the respondent when it explained that:

The legal duty of monitoring lies with the Comelec. Broadcast stations are merely required to submit certain
documents to aid the Comelec in ensuring that candidates are not sold airtime in excess of the allowed
limits. These documents include: (1) certified true copies of broadcast logs, certificates of performance, and
certificates of acceptance, or other analogous record on specified dates (Section 9[d][3], Resolution No.
9615, in relation to Section 6.2, R.A. 9006; and (2) copies of all contract for advertising, promoting or
opposing any political party or the candidacy of any person for public office within five (5) days after its
signing (Section 6.3, R.A. 9006).

*****

[T]here is absolutely no duty on the broadcast stations to do monitoring, much less monitoring in real time.
GMA grossly exaggerates when it claims that the non-existent duty would require them to hire and train an
astounding additional 39,055 personnel working on eight-hour shifts all over the country. 61

The Court holds, accordingly, that, contrary to petitioners' contention, the Reporting Requirement for the
COMELEC's monitoring is reasonable.

Further, it is apropos to note that, pursuant to Resolution No. 9631, 62 the respondent revised the third
paragraph of Section 9 (a). As revised, the provision now reads:

Appearance or guesting by a candidate on any bona fide newscast, bona fide news interview, bona fide
news documentary, if the appearance of the candidate is incidental to the presentation of the subject or
subjects covered by the news documentary, or on-the-spot coverage of bona fide news events, including
but not limited to events sanctioned by the Commission on Elections, political conventions, and similar
activities, shall not be deemed to be broadcast election propaganda within the meaning of this provision.
For purposes of monitoring by the COMELEC and ensuring that parties and candidates were afforded
equal opportunities to promote their candidacy, the media entity shall give prior notice to the COMELEC,
through the appropriate Regional Election Director (RED), or in the case of the National Capital Region
(NCR), the Education and Information Department (EID). If such prior notice is not feasible or practicable,
the notice shall be sent within twenty-four (24) hours from the first broadcast or publication. 1awp+
+i1 Nothing in the foregoing sentence shall be construed as relieving broadcasters, in connection with the
presentation of newscasts, news interviews, news documentaries, and on-the-spot coverage of news
events, from the obligation imposed upon them under Sections 10 and 14 of these Rules." 63

Further, the petitioner in G.R. No. 205374 assails the constitutionality of such monitoring requirement,
contending, among others, that it constitutes prior restraint. The Court finds otherwise. Such a requirement
is a reasonable means adopted by the COMELEC to ensure that parties and candidates are afforded equal
opportunities to promote their respective candidacies. Unlike the restrictive aggregate-based airtime limits,
the directive to give prior notice is not unduly burdensome and unreasonable, much less could it be
characterized as prior restraint since there is no restriction on dissemination of information before
broadcast. Additionally, it is relevant to point out that in the original Resolution No. 9615, the paragraph in
issue was worded in this wise:

Appearance or guesting by a candidate on any bona fide newscast, bona fide news interview, bona fide
news documentary, if the appearance of the candidate is incidental to the presentation of the subject or
subjects covered by the news documentary, or on-the-spot coverage of bona fide news events, including
but not limited to events sanctioned by the Commission on Elections, political conventions, and similar
activities, shall not be deemed to be broadcast election propaganda within the meaning of this provision. To
determine whether the appearance or guesting in a program is bona fide, the broadcast stations or entities
must show that (1) prior approval of the Commission was secured; and (2) candidates and parties were
afforded equal opportunities to promote their candidacy. Nothing in the foregoing sentence shall be
construed as relieving broadcasters, in connection with the presentation of newscasts, news interviews,
news documentaries, and on-the-spot coverage of news events, from the obligation imposed upon them
under Sections 10 and 14 of these Rules. 64

Comparing the original with the revised paragraph, one could readily appreciate what the COMELEC had
done - to modify the requirement from "prior approval" to "prior notice." While the former may be suggestive
of a censorial tone, thus inviting a charge of prior restraint, the latter is more in the nature of a content-
neutral regulation designed to assist the poll body to undertake its job of ensuring fair elections without
having to undertake any chore of approving or disapproving certain expressions.

Also, the right to reply provision is reasonable

In the same way that the Court finds the "prior notice" requirement as not constitutionally infirm, it similarly
concludes that the "right to reply" provision is reasonable and consistent with the constitutional mandate.

Section 14 of Resolution No. 9615, as revised by Resolution No. 9631, provides:

SECTION 14. Right to Reply. - All registered political parties, party-list groups or coalitions and bona fide
candidates shall have the right to reply to charges published or aired against them. The reply shall be given
publicity by the newspaper, television, and/or radio station which first printed or aired the charges with the
same prominence or in the same page or section or in the same time slot as the first statement.

Registered political parties, party-list groups or coalitions and bona fide candidates may invoke the right to
reply by submitting within a nonextendible period of forty-eight hours from first broadcast or publication, a
formal verified claim against the media outlet to the COMELEC, through the appropriate RED. The claim
shall include a detailed enumeration of the circumstances and occurrences which warrant the invocation of
the right to reply and must be accompanied by supporting evidence, such a copy of the publication or
recording of the television or radio broadcast, as the case may be. If the supporting evidence is not yet
available due to circumstances beyond the power of the claimant, the latter shall supplement his claim as
soon as the supporting evidence becomes available, without delay on the part of the claimant. The claimant
must likewise furnish a copy of the verified claim and its attachments to the media outlet concerned prior to
the filing of the claim with the COMELEC.
The COMELEC, through the RED, shall view the verified claim within forty-eight ( 48) hours from receipt
thereof, including supporting evidence, and if circumstances warrant, give notice to the media outlet
involved for appropriate action, which shall, within forty-eight ( 48) hours, submit its comment, answer or
response to the RED, explaining the action it has taken to address the claim. The media outlet must
likewise furnish a copy of the said comment, answer or response to the claimant invoking the right to reply.

Should the claimant insist that his/her right to reply was not addressed, he/she may file the appropriate
petition and/or complaint before the Commission on Elections or its field offices, which shall be endorsed to
the Clerk of Court.

The attack on the validity of the "right to reply" provision is primarily anchored on the alleged ground of prior
restraint, specifically in so far as such a requirement may have a chilling effect on speech or of the freedom
of the press.

Petitioner ABC states, inter alia:

5 .14 5. A "conscious and detailed consideration" of the interplay of the relevant interests - the
constitutional mandate granting candidates the right to reply and the inviolability of the
constitutional freedom of expression, speech, and the press - will show that the Right to Reply, as
provided for in the Assailed Resolution, is an impermissible restraint on these fundamental
freedoms.

5.146. An evaluation of the factors set forth in Soriano (for the balancing of interests test) with
respect to the present controversy will show that the Constitution does not tilt the balance in favor
of the Right to Reply provision in the Assailed Resolution and the supposed governmental interest
it attempts to further.65

The Constitution itself provides as part of the means to ensure free, orderly, honest, fair and credible
elections, a task addressed to the COMELEC to provide for a right to reply. 66 Given that express
constitutional mandate, it could be seen that the Fundamental Law itself has weighed in on the balance to
be struck between the freedom of the press and the right to reply. Accordingly, one is not merely to see the
equation as purely between the press and the right to reply. Instead, the constitutionallymandated
desiderata of free, orderly, honest, peaceful, and credible elections would necessarily have to be factored
in trying to see where the balance lies between press and the demands of a right-to-reply.

Moreover, as already discussed by the Court in Telecommunications and Broadcast Attorneys of the
Philippines, Inc. v. Commission on Elections. 67

In truth, radio and television broadcasting companies, which are given franchises, do not own the airwaves
and frequencies through which they transmit broadcast signals and images. They are merely given the
temporary privilege of using them. Since a franchise is a mere privilege, the exercise of the privilege may
reasonably be burdened with the performance by the grantee of some form of public service. x x x 68

Relevant to this aspect are these passages from an American Supreme Court decision with regard to
broadcasting, right to reply requirements, and the limitations on speech:
We have long recognized that each medium of expression presents special First Amendment problems.
Joseph Burstyn, Inc. v. Wilson, 343 US 495, 502-503, 96 L Ed 1098, 72 S Ct 777. And of all forms of
communication, it is broadcasting that has received the most limited First Amendment protection. Thus,
although other speakers cannot be licensed except under laws that carefully define and narrow official
discretion, a broadcaster may be deprived of his license and his forum if the Commission decides that such
an action would serve "the public interest, convenience, and necessity." Similarly, although the First
Amendment protects newspaper publishers from being required to print the replies of those whom they
criticize, Miami Herald Publishing Co. v. Tornillo, 418 US 241, 41 L Ed 2d 730, 94 S Ct 2831, it affords no
such protection to broadcasters; on the contrary, they must give free time to the victims of their criticism.
Red Lion Broadcasting Co. v. FCC, 395 US. 367, 23 L Ed 2d 371, 89 S Ct 1794.

The reasons for these distinctions are complex, but two have relevance to the present case. First, the
broadcast media have established a uniquely pervasive presence in the lives of all Americans. Patently
offensive, indecent material presented over the airwaves confronts the citizen not only in public, but also in
the privacy of the home, where the individual's right to be left alone plainly outweighs the First Amendment
rights of an intruder. Rowan v. Post Office Dept., 397 US 728, 25 L Ed 2d 736, 90 S Ct 1484. Because the
broadcast audience is constantly tuning in and out, prior warnings cannot completely protect the listener or
viewer from unexpected program content. To say that one may avoid further offense by turning off the radio
when he hears indecent language is like saying that the remedy for an assault is to run away after the first
blow. One may hang up on an indecent phone call, but that option does not give the caller a constitutional
immunity or avoid a harm that has already taken place.

Second, broadcasting is uniquely accessible to children, even those too young to read. Although Cohen's
written message might have been incomprehensible to a first grader, Pacifica's broadcast could have
enlarged a child's vocabulary in an instant. Other forms of offensive expression may be withheld from the
young without restricting the expression at its source. Bookstores and motion picture theaters, for example,
may be prohibited from making indecent material available to children. We held in Ginsberg v. New York,
390 US 629, that the government's interest in the "well-being of its youth" and in supporting "parents' claim
to authority in their own household" justified the regulation of otherwise protected expression. The ease
with which children may obtain access to broadcast material, coupled with the concerns recognized in
Ginsberg, amply justify special treatment of indecent broadcasting. 69

Given the foregoing considerations, the traditional notions of preferring speech and the press over so many
other values of society do not readily lend itself to this particular matter. Instead, additional weight should
be accorded on the constitutional directive to afford a right to reply. If there was no such mandate, then the
submissions of petitioners may more easily commend themselves for this Court's acceptance. But as noted
above, this is not the case. Their arguments simplistically provide minimal importance to that constitutional
command to the point of marginalizing its importance in the equation.

In fine, when it comes to election and the exercise of freedom of speech, of expression and of the press,
the latter must be properly viewed in context as being necessarily made to accommodate the imperatives of
fairness by giving teeth and substance to the right to reply requirement.

WHEREFORE, premises considered, the petitions are PARTIALLY GRANTED, Section 9 (a) of Resolution
No. 9615, as amended by Resolution No. 9631, is declared UNCONSTITUTIONAL and, therefore, NULL
and VOID. The constitutionality of the remaining provisions of Resolution No. 9615, as amended by
Resolution No. 9631, is upheld and remain in full force and effect.
In view of this Decision, the Temporary Restraining Order issued by the Court on April 16, 2013 is hereby
made PERMANENT.

SO ORDERED.