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G.R. No. 193978. February 28, 2012.*

JELBERT B. GALICTO, petitioner, vs. H.E. PRESIDENT

BENIGNO SIMEON C. AQUINO III, in his capacity as
President of the Republic of the Philippines; ATTY.
PAQUITO N. OCHOA, JR., in his capacity as Executive
Secretary; and FLORENCIO B. ABAD, in his capacity as
Secretary of the Department of Budget and Management,
respondents.

Remedial Law; Special Civil Actions; Certiorari; Prohibition;

Executive Orders; Since the issuance of an Executive Order (EO) is
not judicial, quasi-judicial or a mandatory act, a petition for
certio-

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* EN BANC.

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rari and prohibition is an incorrect remedy; instead a petition for

declaratory relief under Rule 63 of the Rules of Court, filed with
the Regional Trial Court (RTC), is the proper recourse.—Under
the Rules of Court, petitions for Certiorari and Prohibition are
availed of to question judicial, quasi-judicial and mandatory acts.
Since the issuance of an EO is not judicial, quasi-judicial or a
mandatory act, a petition for certiorari and prohibition is an
incorrect remedy; instead a petition for declaratory relief under
Rule 63 of the Rules of Court, filed with the Regional Trial Court
(RTC), is the proper recourse to assail the validity of EO 7:
Section 1. Who may file petition. Any person interested under a
deed, will, contract or other written instrument, whose rights
are affected by a statute, executive order or regulation,
ordinance, or any other governmental regulation may, before
breach or violation thereof, bring an action in the appropriate
Regional Trial Court to determine any question of construction or
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validity arising, and for a declaration of his rights or duties,

thereunder.
Same; Civil Procedure; Parties; “Locus Standi,” Defined;
Words and Phrases; Locus standi  or legal standing has been
defined as a personal and substantial interest in a case such that
the party has sustained or will sustain direct injury as a result of
the governmental act that is being challenged.—“Locus standi or
legal standing has been defined as a personal and substantial
interest in a 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 on 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.” This
requirement of standing relates to the constitutional mandate
that this Court settle only actual cases or controversies.
Same; Same; Same; A party is allowed to raise a
constitutional question when (1) he can show that he will
personally suffer some actual or threatened injury because of the
allegedly illegal conduct of the government; (2) the injury is fairly
traceable to the challenged action; and (3) the injury is likely to be
redressed by a favorable action.—As a general rule, a party is
allowed to “raise a constitutional question” when (1) he can show
that he will personally suffer some actual or threatened injury
because of the allegedly illegal conduct of

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the government; (2) the injury is fairly traceable to the challenged

action; and (3) the injury is likely to be redressed by a favorable
action. Jurisprudence defines interest as “material interest, 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. By real interest is meant a present substantial
interest, as distinguished from a mere expectancy or a future,
contingent, subordinate, or consequential interest.”
Same; Same; Pleadings and Practice; The defective jurat in
the Verification/Certification of Non-Forum Shopping is not a fatal
defect; the verification is only a formal, not a jurisdictional,
requirement that the Court may waive.—Te point raised by the
respondents regarding the petitioner’s defective jurat is correct.
Indeed, A.M. No. 02-8-13-SC, dated February 19, 2008, calls for a
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current identification document issued by an official agency

bearing the photograph and signature of the individual as
competent evidence of identity. Nevertheless, we hasten to clarify
that the defective jurat in the Verification/Certification of Non-
Forum Shopping is not a fatal defect, as we held in In-N-Out
Burger, Inc. v. Sehwani, Incorporated, 575 SCRA 535 (2008). The
verification is only a formal, not a jurisdictional, requirement that
the Court may waive.
Constitutional Law; Executive Department; Government-
Owned and Controlled Corporations; Government-Owned and
Controlled Corporations (GOCC) Governance Act of 2011 (R.A. No.
10149); With the enactment of the GOCC Governance Act of 2011,
the President is now authorized to fix the compensation framework
of Government-Owned and Controlled Corporations (GOCCs) and
Government Financial Institutions (GFIs).—With the enactment
of the GOCC Governance Act of 2011, the President is now
authorized to fix the compensation framework of GOCCs and
GFIs. The pertinent provisions read: Section 5.   Creation of the
Governance Commission for Government-Owned or Controlled
Corporations.—There is hereby created an advisory, monitoring,
and oversight body with authority to formulate, implement and
coordinate policies to be known as the Governance Commission
for Government-Owned or-Controlled Corporations, hereinafter
referred to as the GCG, which shall be attached to the Office of
the President. The GCG shall have the following powers and
functions: x  x  x  x h) Conduct compensation studies, develop and
recommend to the President a competitive compensation

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and remuneration system which shall attract and retain talent, at

the same time allowing the GOCC to be financially sound and
sustainable; x x x x Section 8. Coverage of the Compensation and
Position Classification System.—The GCG, after conducting a
compensation study, shall develop a Compensation and Position
Classification System which shall apply to all officers and
employees of the GOCCs whether under the Salary
Standardization Law or exempt therefrom and shall consist of
classes of positions grouped into such categories as the GCG may
determine, subject to approval of the President. Section 9.
Position Titles and Salary Grades.—All positions in the Positions
Classification System, as determined by the GCG and as approved
by the President, shall be allocated to their proper position titles
and salary grades in accordance with an Index of Occupational
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Services, Position Titles and Salary Grades of the Compensation

and Position Classification System, which shall be prepared by
the GCG and approved by the President. x x x x [N]o GOCC shall
be exempt from the coverage of the Compensation and Position
Classification System developed by the GCG under this Act. As
may be gleaned from these provisions, the new law amended R.A.
No. 7875 and other laws that enabled certain GOCCs and GFIs to
fix their own compensation frameworks; the law now authorizes
the President to fix the compensation and position classification
system for all GOCCs and GFIs, as well as other entities covered
by the law. This means that, the President can now reissue an EO
containing these same provisions without any legal constraints.
Remedial Law; Civil Procedure; Moot and Academic; A moot
case is “one that ceases to present a justiciable controversy by
virtue of supervening events, so that a declaration thereon would
be of no practical use or value.—A moot case is “one that ceases to
present a justiciable controversy by virtue of supervening events,
so that a declaration thereon would be of no practical use or
value.” “[A]n action is considered ‘moot’ when it no longer
presents a justiciable controversy because the issues involved
have become academic or dead[,] or when the matter in dispute
has already been resolved and hence, one is not entitled to judicial
intervention unless the issue is likely to be raised again between
the parties x  x  x. Simply stated, there is nothing for the x  x  x
court to resolve as [its] determination x x x has been overtaken by
subsequent events.”

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CORONA, C.J., Separate Opinion:

Administrative Law; Public Officers; Government-Owned and
Controlled Corporations (GOCC); View that accountability in
public office requires rationality and efficiency in both
administrative and financial operations of all government offices,
government-owned and controlled corporations (GOCCs) included.
—Accountability in public office requires rationality and efficiency
in both administrative and financial operations of all government
offices, government-owned and controlled corporations (GOCCs)
included. As a corollary, public funds must be utilized in a way
that will promote transparency, accountability and prudence. The
nation was recently informed that GOCCs, most of which enjoyed
privileges not afforded to other offices and agencies of the
National Government, suffer from serious fiscal deficit. Yet,

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officers and employees of these GOCCs continue to receive hefty

perks and excessive allowances presenting a stark disconnect and
causing the further depletion of limited resources. In the face of
such situation, where the President as Chief Executive makes a
decisive move to stave off the financial hemorrhage and
administrative inefficiency of government corporations, the Court
should not invalidate the Chief Executive’s action without a clear
showing of grave abuse of discretion on his part.
Constitutional Law; Judicial Review; View that the power of
judicial review is a sword that must be unsheathed with restraint.
—The power of judicial review is a sword that must be
unsheathed with restraint. To ensure this, certain justiciability
doctrines must be complied with as a prerequisite for the Court’s
exercise of its awesome power to declare the act of a co-equal
branch invalid for being unconstitutional. These doctrines are
important as they are intertwined with the principle of separation
of powers. They help define the judicial role; they determine when
it is appropriate for courts to review (a legal issue) and when it is
necessary to defer to the other branches of government.
Same; Same; Courts; View that courts do not decide all kinds
of cases dumped on their laps and do not open their doors to all
parties or entities claiming a grievance.—Courts do not decide all
kinds of cases dumped on their laps and do not open their doors to
all parties or entities claiming a grievance. Locus standi is
intended to assure a vigorous adversary presentation of the case.
More importantly, it

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warrants the judiciary’s overruling the determination of a

coordinate, democratically elected organ of government. It thus
goes to the very essence of representative democracies.
Remedial Law; Civil Procedure; Parties; View that a party
who assails the constitutionality of a statute or an official act must
have a direct and personal interest. He must show not only that
the law or any governmental act is invalid, but also that he
sustained or is in immediate danger of sustaining some direct
injury as a result of its enforcement, and not merely that he suffers
thereby in some indefinite way.—The irreducible minimum
condition for the exercise of judicial power is a requirement that a
party “show he personally has suffered some actual or threatened
injury” to his rights. A party who assails the constitutionality of a
statute or an official act must have a direct and personal interest.
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He must show not only that the law or any governmental act is
invalid, but also that he sustained or is in immediate danger
of sustaining some direct injury as a result of its enforcement,
and not merely that he suffers thereby in some indefinite way. He
must show that he has been or is about to be denied some
right or privilege to which he is lawfully entitled or that he
is about to be subjected to some burdens or penalties by reason of
the statute or act complained of. For this reason, petitioner’s
reliance on his status as PhilHealth employee, without more, is a
frail thread that fails to sustain the burden of locus standi
required of anyone who may properly invoke the Court’s power of
judicial review.
“Moratorium,” Defined; Words and Phrases; View that a
moratorium is an authorized postponement in the performance of
an obligation or a suspension of a specific activity.—EO 7 simply
imposes a moratorium on increases in salaries, allowances and
other benefits of officials and employees of GOCCs and GFIs and
directs the suspension of all allowances bonuses and incentives of
GOCC and GFI officials. Moratorium is defined as an authorized
postponement in the performance of an obligation or a suspension
of a specific activity. Section 9 of EO 7 is not a permanent
prohibition on petitioner’s perceived right to receive future
increases. Nor is it an absolute ban on salary increases as it
ensures that, like all other officials and employees of the
government, officials and employees of GOCCs and GFIs will
continue to enjoy the salary increases mandated under EO 8011
dated June 17, 2009 and EO 900 dated June 23, 2010.

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Administrative Law; Public Officers; View that a   public

officer has a vested right only to salaries already earned or
accrued, he does not have a “right” to an increase in salary.—A
public officer has a vested right only to salaries already earned or
accrued. Salary increases are a mere expectancy. They are by
nature volatile and dependent on numerous variables, including
the company’s fiscal situation, the employee’s future performance
on the job, or the employee’s continued stay in a position. Thus,
petitioner does not have a “right” to an increase in salary. There
is no vested right to salary increases. There must be a lawful
decree or order supporting an employee’s claim. In this case,
petitioner failed to point to any lawful decree or order supporting
his entitlement to future increases in salary, as no such decree or
order yet exists.
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Remedial Law; Civil Procedure; Locus Standi; View that mere

interest as a member of the Bar and an empty invocation of a duty
in “making sure that laws and orders by officials of the Philippine
government are legally issued and implemented” does not suffice to
clothe one with standing.—Neither can petitioner rely on his
membership in the Philippine Bar to support his legal standing.
Mere interest as a member of the Bar and an empty invocation of
a duty in “making sure that laws and orders by officials of the
Philippine government are legally issued and implemented” does
not suffice to clothe one with standing. It is clear from the
foregoing that petitioner failed to satisfy the irreducible minimum
condition that will trigger the exercise of judicial power. Lacking a
leg on which he may base his personality to bring this action,
petitioner’s claim of sufficient standing should fail.
Statutory Construction; View that provisions of law should be
read and understood in their entirety and all parts thereof should
be seen as constituting a coherent whole.—Provisions of law should
be read and understood in their entirety and all parts thereof
should be seen as constituting a coherent whole. In this context,
the recognition under Section 9 of Joint Resolution No. 4 of the
authority granted to exempt entities like Philhealth to determine
their own compensation and position classification system seeks
to exclude them from the salary adjustments provided in Joint
Resolution No. 4.
Constitutional Law; Congress; Bills; Joint Resolutions; View
that under the Rules of both the Senate and the House of
Representa-

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tives, a joint resolution, like a bill, is required to be enrolled,

examined, undergo three readings and signed by the presiding
officer of each House and then presented to the President for
approval.—Under the Rules of both the Senate and the House of
Representatives, a joint resolution, like a bill, is required to be
enrolled, examined, undergo three readings and signed by the
presiding officer of each House. A joint resolution, like a bill, is
also presented to the President for approval. There is no real
difference between a bill and a joint resolution. A joint resolution
also satisfies the two requisites before a bill becomes law—
approval by both Houses of Congress after three readings and
approval by the President. Thus, a joint resolution, upon approval
by the President, is law. Even the Rules of the House of
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Representatives acknowledge this: SEC 58. Third Reading. x  x  x

No bill or joint resolution shall become law unless it passes
three (3) readings on separate days and printed copies thereof in
its final form are distributed to the Members three (3) days before
its passage except when the President certifies to the necessity of
its immediate enactment to meet a public calamity or emergency.
Same; Public Officers; Wages; View that a  public officer does
not have a vested right to salary and his compensation may be
altered, decreased or discontinued, in the absence of a
constitutional prohibition.—The right of a public officer to receive
compensation can only arise out of the rendition of the public
services related to his or her office. The right to compensation
arises out of the performance by the public officer of his duties.
Thus, a public officer’s right to salary is limited only to salaries
which he has already earned or accrued for services rendered.
Other than that, a public officer does not have a vested right to
salary and his compensation may be altered, decreased or
discontinued, in the absence of a constitutional prohibition. If no
vested right to salary generally pertains to a public officer, there
is no cogent reason to support the claim to a right to future salary
increase. The grant of any salary increase in the future is
something that is merely anticipatory of a prospective benefit,
something that is contingent on various factors. That is why it is a
mere expectancy, which does not give rise to a vested right.
Same; Same; Bonus; View that a bonus is not a demandable
and enforceable obligation.—There could have been no violation of
substantive due process as petitioner, or anybody for that matter,
cannot properly claim a right to receive bonuses. A bonus is not a

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demandable and enforceable obligation. By definition, a “bonus” is

a gratuity or act of liberality of the giver which cannot be
demanded as a matter of right by the recipient. It is
something given in addition to what is ordinarily received by or
strictly due to the recipient. The grant thereof is basically a
management prerogative which cannot be forced upon the
employer who may not be obliged to assume the onerous burden of
granting bonuses or other benefits aside from the employee’s basic
salaries or wages, especially so if it is incapable of doing so. Thus,
there can be no oppression to speak of even if these privileges
(bonuses, allowances and incentives) cease to be given. All the
more reason should the President’s judgment as Chief Executive

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be accorded respect if he directs the temporary stoppage of the

grant of bonuses when he deems it to be prejudicial to public
interest or too onerous because of the government’s fiscal
condition. It is therefore clear that the suspension of the grant of
bonuses and the imposition of a moratorium on salary increases
under EO 7 do not deprive petitioner of any property right. As
such, any declaration that such suspension or moratorium
violates substantive due process cannot be justified.
Constitutional Law; Public Officers; Executive Department;
Government-Owned and Controlled Corporations (GOCCs);
Government Financial Institutions (GFIs); View that absent any
showing of grave abuse of discretion on his part, the Court should
recognize in the President as Chief Executive the power and duty to
protect and promote public interest thru the rationalization of the
compensation and position classification system in executive
departments, bureaus, offices and agencies, including
Government-Owned and Controlled Corporations (GOCCs) and
Government Financial Institutions (GFIs).—Accountability of
public office is a safeguard of representative democracy. All who
serve in government must always be aware that they are
exercising a public trust. They must bear in mind that public
funds are scarce resources and should therefore be used prudently
and judiciously. Hence, where there are findings that government
funds are being wasted due to operational inefficiency and lack of
fiscal responsibility in the executive departments, bureaus, offices
or agencies, the President as Chief Executive should not be
deprived of the authority to control, stop, check or at least manage
the situation. Absent any showing of grave abuse of discretion on
his part, the Court should recognize in the President as Chief
Executive the power and duty to protect and promote public
interest thru the

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rationalization of the compensation and position classification

system in executive departments, bureaus, offices and agencies,
including GOCCs and GFIs.

SPECIAL CIVIL ACTION in the Supreme Court.

Certiorari and Prohibition.
   The facts are stated in the resolution of the Court.
  The Solicitor General for respondents.

RESOLUTION
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BRION, J.:
Before us is a Petition for Certiorari and Prohibition
with Application for Writ of Preliminary Injunction and/or
Temporary Restraining Order,1 seeking to nullify and
enjoin the implementation of Executive Order No. (EO) 7
issued by the Office of the President on September 8, 2010.
Petitioner Jelbert B. Galicto asserts that EO 7 is
unconstitutional for having been issued beyond the powers
of the President and for being in breach of existing laws.
The petitioner is a Filipino citizen and an employee of
the Philippine Health Insurance Corporation (PhilHealth).2
He is currently holding the position of Court Attorney IV
and is assigned at the PhilHealth Regional Office
CARAGA.3
Respondent Benigno Simeon C. Aquino III is the
President of the Republic of the Philippines (Pres. Aquino);
he issued EO 7 and has the duty of implementing it.
Respondent Paquito N. Ochoa, Jr. is the incumbent
Executive Secretary and, as the alter ego of Pres. Aquino, is
tasked with the implementation of EO 7. Respondent
Florencio B. Abad is the

_______________
1 Rollo, pp. 3-72.
2 Id., at p. 13.
3 Id., at p. 83.

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incumbent Secretary of the Department of Budget and

Management (DBM) charged with the implementation of
EO 7.4

The Antecedent Facts

On July 26, 2010, Pres. Aquino made public in his first

State of the Nation Address the alleged excessive
allowances, bonuses and other benefits of Officers and
Members of the Board of Directors of the Manila
Waterworks and Sewerage System—a government owned
and controlled corporation (GOCC) which has been unable
to meet its standing obligations.5 Subsequently, the Senate
of the Philippines (Senate), through the Senate Committee
on Government Corporations and Public Enterprises,
conducted an inquiry in aid of legislation on the reported
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excessive salaries, allowances, and other benefits of GOCCs

and government financial institutions (GFIs).6
Based on its findings that “officials and governing
boards of various [GOCCs] and [GFIs] x  x  x have been
granting themselves unwarranted allowances, bonuses,
incentives, stock options, and other benefits [as well as
other] irregular and abusive practices,”7 the Senate issued
Senate Resolution No. 17 “urging the President to order the
immediate suspension of

_______________
4 Id., at pp. 13-14.
5 Id., at p. 154.
6 Id., at pp. 158-159.
7 The Senate Committee found that: “(a) the representatives of the
Social Security Commission (SSC) to the Board of Directors of Philex
Mining earned, in addition to their bonuses, some P55 million by way of
stock options; (b) three SSC representatives in the Board of Directors of
the Union Bank earned P46 million in bonuses in 2009, or around P15
million each; (c) the MWSS, despite incurring a loss of P3.5 billion in 2008,
declared a bonus of P5 million to its board chairman in 2009 and granted
25 bonuses in one year; and (d) GOCCs have failed to comply with the
requirement of R.A. No. 7656 to remit 50% of its net earnings to the
national government.” (Id., at p. 342).

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the unusually large and apparently excessive allowances,

bonuses, incentives and other perks of members of the
governing boards of [GOCCs] and [GFIs].”8
Heeding the call of Congress, Pres. Aquino, on
September 8, 2010, issued EO 7, entitled “Directing the
Rationalization of the Compensation and Position
Classification System in the [GOCCs] and [GFIs], and for
Other Purposes.” EO 7 provided for the guiding principles
and framework to establish a fixed compensation and
position classification system for GOCCs and GFIs. A Task
Force was also created to review all remunerations of
GOCC and GFI employees and officers, while GOCCs and
GFIs were ordered to submit to the Task Force information
regarding their compensation. Finally, EO 7 ordered (1)
a moratorium on the increases in the salaries and
other forms of compensation, except salary
adjustments under EO 8011 and EO 900, of all GOCC

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and GFI employees for an indefinite period to be set

by the President,9 and (2) a suspension of all
allowances, bonuses and incentives of members of
the Board of Directors/Trustees until December 31,
2010.10 

_______________
8 Ibid.
9 Id., at pp. 18-24. Section 9 of EO 7 states:
Section 9. Moratorium on Increases in Salaries, Allowances,
Incentives and Other Benefits.—Moratorium on increases in the rates of
salaries, and the grant of new increases in the rates of allowances,
incentives and other benefits, except salary adjustments pursuant to
Executive Order No. 8011 dated June 17, 2009 and Executive Order No.
900 dated June 23, 2010, are hereby imposed until specifically authorized
by the President.
10 Section 10 of EO 7 provides:
Section 10. Suspension of All Allowances, Bonuses and Incentives for
Members of the Board of Directors/Trustees.—The grant of allowances,
bonuses, incentives, and other perks to members of the board of
directors/trustees of GOCCs and GFIs, except reasonable per diems, is
hereby suspended until December 31, 2010, pending the issuance of new
policies and guidelines on the compensation of these board members.

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EO 7 was published on September 10, 2010.11 It took

effect on September 25, 2010 and precluded the Board of
Directors, Trustees and/or Officers of GOCCs from granting
and releasing bonuses and allowances to members of the
board of directors, and from increasing salary rates of and
granting new or additional benefits and allowances to their
employees.

The Petition

The petitioner claims that as a PhilHealth employee, he

is affected by the implementation of EO 7, which was
issued with grave abuse of discretion amounting to lack or
excess of jurisdiction, based on the following arguments:

I.
EXECUTIVE ORDER NO. 7 IS NULL AND VOID FOR LACK OF
LEGAL BASIS DUE TO THE FOLLOWING GROUNDS:

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A. P.D. 985 IS NOT APPLICABLE AS BASIS FOR

EXECUTIVE ORDER NO. 7 BECAUSE THE
GOVERNMENT-OWNED AND CONTROLLED
CORPORATIONS WERE SUBSEQUENTLY GRANTED
THE POWER TO FIX COMPENSATION LONG AFTER
SUCH POWER HAS BEEN REVOKED BY P.D. 1597 AND
R.A. 6758.
B. THE GOVERNMENT-OWNED AND CONTROLLED
CORPORATIONS DO NOT NEED TO HAVE ITS
COMPENSATION PLANS, RATES AND POLICIES
REVIEWED BY THE DBM AND APPROVED BY THE
PRESIDENT BECAUSE P.D. 1597 REQUIRES ONLY THE
GOCCs TO REPORT TO THE OFFICE TO THE
PRESIDENT THEIR COMPENSATION PLANS AND
RATES BUT THE SAME DOES NOT GIVE THE
PRESIDENT THE POWER OF CONTROL OVER THE
FISCAL POWER OF THE GOCCs.
C. J.R. NO. 4, [SERIES] 2009 IS NOT APPLICABLE AS
LEGAL BASIS BECAUSE IT HAD NOT RIPENED

_______________
11 Rollo, p. 24.

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INTO X  X  X LAW, THE SAME NOT HAVING BEEN

PUBLISHED.
D. ASSUMING ARGUENDO THAT J.R. NO. 1, S. 2004 (sic)
AND J.R. 4, S. 2009 ARE VALID, STILL THEY ARE NOT
APPLICABLE AS LEGAL BASIS BECAUSE THEY ARE
NOT LAWS WHICH MAY VALIDLY DELEGATE POWER
TO THE PRESIDENT TO SUSPEND THE POWER OF
THE BOARD TO FIX COMPENSATION.
II.
EXECUTIVE ORDER NO. 7 IS INVALID FOR DIVESTING THE
BOARD OF DIRECTORS OF [THE] GOCCS OF THEIR POWER TO FIX
THE COMPENSATION, A POWER WHICH IS A LEGISLATIVE
GRANT AND WHICH COULD NOT BE REVOKED OR MODIFIED BY
AN EXECUTIVE FIAT.
III.
EXECUTIVE ORDER NO. 7 IS BY SUBSTANCE A LAW, WHICH IS
A DEROGATION OF CONGRESSIONAL PREROGATIVE AND IS
THEREFORE UNCONSTITUTIONAL.
IV.

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THE ACTS OF SUSPENDING AND IMPOSING MORATORIUM

ARE ULTRA VIRES ACTS BECAUSE J.R. NO. 4 DOES NOT
EXPRESSLY AUTHORIZE THE PRESIDENT TO EXERCISE SUCH
POWERS.
V.
EXECUTIVE ORDER NO. 7 IS AN INVALID ISSUANCE BECAUSE
IT HAS NO SUFFICIENT STANDARDS AND IS THEREFORE
ARBITRARY, UNREASONABLE AND A VIOLATION OF
SUBSTANTIVE DUE PROCESS.
VI.
EXECUTIVE ORDER NO. 7 INVOLVES THE DETERMINATION
AND DISCRETION AS TO WHAT THE LAW SHALL BE AND IS
THEREFORE INVALID FOR ITS USURPATION OF LEGISLATIVE
POWER.

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VII.
CONSISTENT WITH THE DECISION OF THE SUPREME COURT
IN PIMENTEL V. AGUIRRE CASE, EXECUTIVE ORDER NO. 7 IS
ONLY DIRECTORY AND NOT MANDATORY.12

The Case for the Respondents

On December 13, 2010, the respondents filed their

Comment. They pointed out the following procedural
defects as grounds for the petition’s dismissal: (1) the
petitioner lacks locus standi; (2) the petitioner failed to
attach a board resolution or secretary’s certificate
authorizing him to question EO 7 in behalf of PhilHealth;
(3) the petitioner’s signature does not indicate his PTR
Number, Mandatory Continuing Legal Education (MCLE)
Compliance Number and Integrated Bar of the Philippines
(IBP) Number; (4) the jurat of the Verification and
Certification of Non-Forum Shopping failed to indicate a
valid identification card as provided under A.M. No. 02-8-
13-SC; (5) the President should be dropped as a party
respondent as he is immune from suit; and (6) certiorari is
not applicable to this case.13
The respondents also raised substantive defenses to
support the validity of EO 7. They claim that the President
exercises control over the governing boards of the GOCCs
and GFIs; thus, he can fix their compensation packages. In
addition, EO 7 was issued in accordance with law for the
purpose of controlling the grant of excessive salaries,
allowances, incentives and other benefits to GOCC and GFI
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employees. They also advocate the validity of Joint

Resolution (J.R.) No. 4, which they point to as the authority
for issuing EO 7.14

_______________
12 Id., at pp. 10-12.
13 Comment, pp. 39-62.
14 Id., at pp. 63-140.

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Meanwhile, on June 6, 2011, Congress enacted Republic

Act (R.A.) No. 10149,15 otherwise known as the “GOCC
Governance Act of 2011.” Section 11 of RA 10149 expressly
authorizes the President to fix the compensation
framework of GOCCs and GFIs.

The Court’s Ruling

We resolve to DISMISS the petition for its patent

formal and procedural infirmities, and for having
been mooted by subsequent events.
A. Certiorari is not the proper
remedy.
Under the Rules of Court, petitions for Certiorari and
Prohibition are availed of to question judicial, quasi-
judicial and mandatory acts. Since the issuance of an EO is
not judicial, quasi-judicial or a mandatory act, a petition for
certiorari and prohibition is an incorrect remedy; instead a
petition for declaratory relief under Rule 63 of the Rules of
Court, filed with the Regional Trial Court (RTC), is the
proper recourse to assail the validity of EO 7:

“Section 1. Who may file petition. Any person interested

under a deed, will, contract or other written instrument, whose
rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental regulation may,
before breach or violation thereof, bring an action in the
appropriate Regional Trial Court to determine any question of
construction or validity arising, and for a declaration of his rights
or duties, thereunder.” (Emphases ours.)

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15 AN ACT TO PROMOTE FINANCIAL VIABILITY AND FISCAL DISCIPLINE IN

GOVERNMENT-OWNED OR -CONTROLLED CORPORATIONS AND TO STRENGTHEN THE

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ROLE OF THE STATE IN ITS GOVERNANCE AND MANAGEMENT TO MAKE THEM MORE
RESPONSIVE TO THE NEEDS OF PUBLIC INTEREST AND FOR OTHER PURPOSES.

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Liga ng mga Barangay National v. City Mayor of

Manila16 is a case in point.17 In Liga, we dismissed the
petition for certiorari to set aside an EO issued by a City
Mayor and insisted that a petition for declaratory relief
should have been filed with the RTC. We painstakingly
ruled:

“After due deliberation on the pleadings filed, we resolve to dismiss

this petition for certiorari.
First, the respondents neither acted in any judicial or quasi-judicial
capacity nor arrogated unto themselves any judicial or quasi-judicial
prerogatives. A petition for certiorari under Rule 65 of the 1997 Rules of
Civil Procedure is a special civil action that may be invoked only against
a tribunal, board, or officer exercising judicial or quasi-judicial functions.
Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides:
SECTION 1. Petition for certiorari.—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, or any plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and
granting such incidental reliefs as law and justice may require.
Elsewise stated, for a writ of certiorari to issue, the following
requisites must concur: (1) it must be directed against a tribunal, board,
or officer exercising judicial or quasi-judicial functions; (2) the tribunal,
board, or officer must have acted without or in excess of

_______________
16 465 Phil. 529; 420 SCRA 562 (2004).
17 We are aware of our ruling in Pimentel, Jr. v. Hon. Aguirre, 391
Phil. 84; 336 SCRA 201 (2000), where we gave due course to a petition for
certiorari and prohibition to assail an “Administrative Order issued by the
President.” Pimentel, however, has no bearing in the present case since
the propriety of the petition or the non-observance of the hierarchy-of-
courts rule was not an issue therein.

167

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jurisdiction or with grave abuse of discretion amounting

[to] lack or excess of jurisdiction; and (3) there is no appeal
or any plain, speedy, and adequate remedy in the ordinary
course of law.
A respondent is said to be exercising judicial function where he has
the power to determine what the law is and what the legal rights of the
parties are, and then undertakes to determine these questions and
adjudicate upon the rights of the parties.
Quasi-judicial function, on the other hand, is “a term which applies to
the actions, discretion, etc., of public administrative officers or bodies …
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.”
Before a tribunal, board, or officer may exercise judicial or quasi-
judicial acts, it is necessary that there be a law that gives rise to some
specific rights of persons or property under which adverse claims to such
rights are made, and the controversy ensuing therefrom is brought before
a tribunal, board, or officer clothed with power and authority to
determine the law and adjudicate the respective rights of the contending
parties.
The respondents do not fall within the ambit of tribunal, board, or
officer exercising judicial or quasi-judicial functions. As correctly pointed
out by the respondents, the enactment by the City Council of Manila of
the assailed ordinance and the issuance by respondent Mayor of the
questioned executive order were done in the exercise of legislative and
executive functions, respectively, and not of judicial or quasi-judicial
functions. On this score alone, certiorari will not lie.
Second, although the instant petition is styled as a petition for
certiorari, in essence, it seeks the declaration by this Court of the
unconstitutionality or illegality of the questioned ordinance and
executive order. It, thus, partakes of the nature of a petition for
declaratory relief over which this Court has only appellate, not original,
jurisdiction. Section 5, Article VIII of the Constitution provides:
Sec. 5. The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting ambassadors,
other public ministers and consuls, and over peti-

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Galicto vs. Aquino III

tions for certiorari, prohibition, mandamus, quo warranto,

and habeas corpus.

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(2) Review, revise, reverse, modify, or affirm on appeal or certiorari

as the law or the Rules of Court may provide, final judgments and
orders of lower courts in:
(a) 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. (Italics supplied).
As such, this petition must necessar[ily] fail, as this Court does not
have original jurisdiction over a petition for declaratory relief even if only
questions of law are involved.”18

Likewise, in Southern Hemisphere Engagement Network,

Inc. v. Anti-Terrorism Council,19 we similarly dismissed the
petitions for certiorari and prohibition challenging the
constitutionality of R.A. No. 9372, otherwise known as the
“Human Security Act of 2007,” since the respondents
therein (members of the Anti-Terrorism Council) did not
exercise judicial or quasi-judicial functions.
While we have recognized in the past that we can
exercise the discretion and rulemaking authority we are
granted under the Constitution,20 and set aside procedural
considerations to permit parties to bring a suit before us at
the first instance through certiorari and/or prohibition,21
this liberal policy re-

_______________
18 Supra note 16, at pp. 540-542.
19 G.R. Nos. 178552, 178554, 178581, 178890, 179157 and 179461,
October 5, 2010, 632 SCRA 146.
20 CONSTITUTION, Article VIII, Section 5(5).
21 See Pimentel, Jr. v. Hon. Aguirre, supra note 16. We similarly
glossed over the erroneous remedies the petitioners used in Rivera v. Hon.
Espiritu, 425 Phil. 169; 374 SCRA 351 (2002), Macalintal v. Commission
on Elections, 435 Phil. 586; 405 SCRA 614 (2003), and Kapisanan ng mga
Kawani ng Energy Regulatory Board v. Barin, G.R. No. 150974, June 29,
2007, 526 SCRA 1 recognizing that the procedural errors were
overshadowed by the public interest

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mains to be an exception to the general rule, and thus, has

its limits. In Concepcion v. Commission on Elections
(COMELEC),22 we emphasized the importance of availing
of the proper remedies and cautioned against the wrongful

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use of certiorari in order to assail the quasi-legislative acts

of the COMELEC, especially by the wrong party. In ruling
that liberality and the transcendental doctrine cannot
trump blatant disregard of procedural rules, and
considering that the petitioner had other available
remedies (such as a petition for declaratory relief with the
appropriate RTC under the terms of Rule 63 of the Rules of
Court), as in this case, we categorically ruled:

“The petitioner’s unusual approaches and use of Rule 65 of the

Rules of Court do not appear to us to be the result of any error in
reading Rule 65, given the way the petition was crafted. Rather, it
was a backdoor approach to achieve what the petitioner could not
directly do in his individual capacity under Rule 65. It was, at the
very least, an attempted bypass of other available, albeit
lengthier, modes of review that the Rules of Court provide. While
we stop short of concluding that the petitioner’s approaches
constitute an abuse of process through a manipulative reading
and application of the Rules of Court, we nevertheless resolve
that the petition should be dismissed for its blatant
violation of the Rules. The transgressions alleged in a
petition, however weighty they may sound, cannot be
justifications for blatantly disregarding the rules of
procedure, particularly when remedial measures were
available under these same rules to achieve the
petitioner’s objectives. For our part, we cannot and should
not—in the name of liberality and the “transcendental
importance” doctrine—entertain these types of petitions.
As we held in the very recent case of Lozano, et al. vs. Nograles,
albeit from a different perspective, our liberal approach has its
limits and should not be abused.”23 [emphasis supplied] 

_______________
involved and the crucial constitutional questions that the Court needed
to resolve.
22 G.R. No. 178624, June 30, 2009, 591 SCRA 420.
23 Id., at p. 437.

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B. Petitioner lacks locus standi.

“Locus standi or legal standing has been defined as a
personal and substantial interest in a case such that
the party has sustained or will sustain direct injury as a
result of the governmental act that is being challenged. The
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gist of the question on 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.”24 This
requirement of standing relates to the constitutional
mandate that this Court settle only actual cases or
controversies.25
Thus, as a general rule, a party is allowed to “raise a
constitutional question” when (1) he can show that he will
personally suffer some actual or threatened injury because
of the allegedly illegal conduct of the government; (2) the
injury is fairly traceable to the challenged action; and (3)
the injury is likely to be redressed by a favorable action.26
Jurisprudence defines interest as “material interest, 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. By real interest is meant a
present substantial interest, as distinguished from a
mere expectancy or a future, contingent,
27
subordinate, or consequential interest.”

_______________
24 Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism
Council, supra note 19, at p. 167, citing Anak Mindanao Party-List Group
v. The Executive Secretary, G.R. No. 166052, August 29, 2007, 531 SCRA
583, 591.
25 Lozano v. Nograles, G.R. Nos. 187883 & 187910, June 16, 2009, 589
SCRA 356, 361.
26 Tolentino v. Commission on Elections, 465 Phil. 385, 402; 420 SCRA
438, 452 (2004).
27 Stefan Tito Miñoza v. Hon. Cesar Tomas Lopez, etc., et al., G.R. No.
170914, April 13, 2011, 648 SCRA 684.

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To support his claim that he has locus standi to file the

present petition, the petitioner contends that as an
employee of PhilHealth, he “stands to be prejudiced by
[EO] 7, which suspends or imposes a moratorium on the
grants of salary increases or new or increased benefits to
officers and employees of GOCC[s] and x x x curtail[s] the
prerogative of those officers who are to fix and determine
his compensation.”28 The petitioner also claims that he has

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standing as a member of the bar in good standing who has

an interest in ensuring that laws and orders of the
Philippine government are legally and validly issued and
implemented.
The respondents meanwhile argue that the petitioner is
not a real party-in-interest since future increases in
salaries and other benefits are merely contingent events or
expectancies.29 The petitioner, too, is not asserting a public
right for which he is entitled to seek judicial protection.
Section 9 of EO 7 reads:

“Section 9. Moratorium on Increases in Salaries,

Allowances, Incentives and Other Benefits.—Moratorium on
increases in the rates of salaries, and the grant of new increases
in the rates of allowances, incentives and other benefits, except
salary adjustments pursuant to Executive Order No. 8011 dated
June 17, 2009 and Executive Order No. 900 dated June 23, 2010,
are hereby imposed until specifically authorized by the
President.” [emphasis ours]

In the present case, we are not convinced that the

petitioner has demonstrated that he has a personal stake
or material interest in the outcome of the case because his
interest, if any, is speculative and based on a mere
expectancy. In this case, the curtailment of future increases
in his salaries and other benefits cannot but be
characterized as contingent events or expectancies. To be
sure, he has no vested rights to salary increases and,
therefore, the absence of such right deprives the petitioner
of legal standing to assail EO 7.

_______________
28 Rollo, pp. 15-16.
29 Id., at p. 179.

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It has been held that as to the element of injury, such

aspect is not something that just anybody with some
grievance or pain may assert. It has to be direct and
substantial to make it worth the court’s time, as well as
the effort of inquiry into the constitutionality of the acts of
another department of government. If the asserted injury is
more imagined than real, or is merely superficial and
insubstantial, then the courts may end up being
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importuned to decide a matter that does not really justify

such an excursion into constitutional adjudication.30 The
rationale for this constitutional requirement of locus standi
is by no means trifle. Not only does it assure the vigorous
adversary presentation of the case; more importantly, it
must suffice to warrant the Judiciary’s overruling the
determination of a coordinate, democratically elected organ
of government, such as the President, and the clear
approval by Congress, in this case. Indeed, the rationale
goes to the very essence of representative democracies.31
Neither can the lack of locus standi be cured by the
petitioner’s claim that he is instituting the present petition
as a member of the bar in good standing who has an
interest in ensuring that laws and orders of the Philippine
government are legally and validly issued. This supposed
interest has been branded by the Court in Integrated Bar of
the Phils. (IBP) v. Hon. Zamora,32 “as too general an
interest which is

_______________
30 See Rene B. Gorospe, Songs, Singers and Shadows: Revisiting Locus
Standi In Light Of The People Power Provisions Of The 1987 Constitution,
UST LAW REVIEW, Vol. LI, AY 2006-2007, pp. 15-16, citing Montecillo v.
Civil Service Commission, G.R. No. 131954, June 28, 2001, 360 SCRA 99,
104; Tomas Claudio Memorial College, Inc. v. Court of Appeals, G.R. No.
124262, October 12, 1999, 316 SCRA 502, 508; and Tañada v. Angara,
G.R. No. 118295, May 2, 1997, 272 SCRA 18 , 79.
31 Id., at pp. 10-11, citing then Associate Justice Reynato S. Puno’s
Dissenting Opinion in Kilosbayan v. Guingona, Jr., at 232 SCRA 110
(1994), at p. 169.
32 392 Phil. 618; 338 SCRA 81 (2000).

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shared by other groups and [by] the whole citizenry.”33

Thus, the Court ruled in IBP that the mere invocation by
the IBP of its duty to preserve the rule of law and nothing
more, while undoubtedly true, is not sufficient to clothe it
with standing in that case. The Court made a similar
ruling in Prof. David v. Pres. Macapagal-Arroyo34 and held
that the petitioners therein, who are national officers of the
IBP, have no legal standing, having failed to allege any
direct or potential injury which the IBP, as an institution,
or its members may suffer as a consequence of the issuance
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of Presidential Proclamation No. 1017 and General Order

No. 5.35
We note that while the petition raises vital
constitutional and statutory questions concerning the
power of the President to fix the compensation packages of
GOCCs and GFIs with possible implications on their
officials and employees, the same cannot “infuse” or give
the petitioner locus standi under the transcendental
importance or paramount public interest doctrine. In
Velarde v. Social Justice Society,36 we held that even if the
Court could have exempted the case from the stringent
locus standi requirement, such heroic effort would be futile
because the transcendental issue could not be resolved any
way, due to procedural infirmities and shortcomings,
as in the present case.37 In other words, giving due course
to the present petition which is saddled with formal and
procedural infirmities explained above in this Resolution,
cannot but be an exercise in futility that does not merit the

_______________
33 Id., at p. 633; p. 100.
34 522 Phil. 705; 489 SCRA 160 (2006).
35 Id., at p. 764; p. 223. The Court in these two above-cited cases,
however, brushed aside therein petitioners’ lack of locus standi in view of
transcendental issues raised in these cases.
36 G.R. No. 159357, April 28, 2004, 428 SCRA 283.
37 Rene B. Gorospe, Songs, Singers and Shadows: Revisiting Locus
Standi In Light Of The People Power Provisions Of The 1987 Constitution,
UST LAW REVIEW, supra note 30, at p. 53, citing Velarde v. Social
Justice Society, id., at p. 298.

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Court’s liberality. As we emphasized in Lozano v.

Nograles,38 “while the Court has taken an increasingly
liberal approach to the rule of locus standi, evolving
from the stringent requirements of ‘personal injury’
to the broader ‘transcendental importance’ doctrine,
such liberality is not to be abused.”39
Finally, since the petitioner has failed to demonstrate a
material and personal interest in the issue in dispute,
he cannot also be considered to have filed the present case
as a representative of PhilHealth. In this regard, we cannot
ignore or excuse the blatant failure of the petitioner to
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provide a Board Resolution or a Secretary’s Certificate

from PhilHealth to act as its representative.
C. The petition has a defective
jurat.
The respondents claim that the petition should be
dismissed for failing to comply with Section 3, Rule 7 of the
Rules of Civil Procedure, which requires the party or the
counsel representing him to sign the pleading and indicate
an address that should not be a post office box. The petition
also allegedly violated the Supreme Court En Banc
Resolution dated November 12, 2001, requiring counsels to
indicate in their pleadings their Roll of Attorneys Number,
their PTR Number and their IBP Official Receipt or
Lifetime Member Number; otherwise, the pleadings would
be considered unsigned and dismissible. Bar Matter No.
1922 likewise states that a counsel should note down his
MCLE Certificate of Compliance or Certificate of
Exemption in the pleading, but the petitioner had failed to
do so.40

_______________
38 Supra note 25.
39 Id., at p. 362.
40 Rollo, pp. 183-190.

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We do not see any violation of Section 3, Rule 7 of the

Rules of Civil Procedure as the petition bears the
petitioner’s signature and office address. The present suit
was brought before this Court by the petitioner himself
as a party litigant and not through counsel. Therefore,
the requirements under the Supreme Court En Banc
Resolution dated November 12, 2001 and Bar Matter No.
1922 do not apply. In Bar Matter No. 1132, April 1, 2003,
we clarified that a party who is not a lawyer is not
precluded from signing his own pleadings as this is allowed
by the Rules of Court; the purpose of requiring a counsel to
indicate his IBP Number and PTR Number is merely to
protect the public from bogus lawyers. A similar
construction should be given to Bar Matter No. 1922, which
requires lawyers to indicate their MCLE Certificate of
Compliance or Certificate of Exemption; otherwise, the

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provision that allows parties to sign their own pleadings

will be negated.
However, the point raised by the respondents regarding
the petitioner’s defective jurat is correct. Indeed, A.M. No.
02-8-13-SC, dated February 19, 2008, calls for a current
identification document issued by an official agency
bearing the photograph and signature of the individual as
competent evidence of identity. Nevertheless, we hasten to
clarify that the defective jurat in the
Verification/Certification of Non-Forum Shopping is not a
fatal defect, as we held in In-N-Out Burger, Inc. v.
Sehwani, Incorporated.41 The verification is only a formal,
not a jurisdictional, requirement that the Court may waive.
D. The petition has been mooted
by supervening events.
Because of the transitory nature of EO 7, it has been
pointed out that the present case has already been
rendered moot by these supervening events: (1) the lapse
on December

_______________
41 G.R. No. 179127, December 24, 2008, 575 SCRA 535, 555.

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31, 2010 of Section 10 of EO 7 that suspended the

allowances and bonuses of the directors and trustees of
GOCCs and GFIs; and (2) the enactment of R.A. No.
10149 amending the provisions in the charters of GOCCs
and GFIs empowering their board of directors/trustees to
determine their own compensation system, in favor of the
grant of authority to the President to perform this act.
With the enactment of the GOCC Governance Act of
2011, the President is now authorized to fix the
compensation framework of GOCCs and GFIs. The
pertinent provisions read:

“Section 5. Creation of the Governance Commission for

Government-Owned or -Controlled Corporations.—There is hereby
created an advisory, monitoring, and oversight body with
authority to formulate, implement and coordinate policies to be
known as the Governance Commission for Government-Owned or-
Controlled Corporations, hereinafter referred to as the GCG,
which shall be attached to the Office of the President. The GCG
shall have the following powers and functions:
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x x x x
h) Conduct compensation studies, develop and recommend to
the President a competitive compensation and remuneration
system which shall attract and retain talent, at the same time
allowing the GOCC to be financially sound and sustainable;
x x x x
Section 8. Coverage of the Compensation and Position
Classification System.—The GCG, after conducting a
compensation study, shall develop a Compensation and Position
Classification System which shall apply to all officers and
employees of the GOCCs whether under the Salary
Standardization Law or exempt therefrom and shall consist of
classes of positions grouped into such categories as the GCG may
determine, subject to approval of the President.
Section 9. Position Titles and Salary Grades.—All positions
in the Positions Classification System, as determined by the GCG
and as approved by the President, shall be allocated to their
proper

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Galicto vs. Aquino III

position titles and salary grades in accordance with an Index of

Occupational Services, Position Titles and Salary Grades of the
Compensation and Position Classification System, which shall be
prepared by the GCG and approved by the President.
x x x x
[N]o GOCC shall be exempt from the coverage of the
Compensation and Position Classification System developed by
the GCG under this Act.”

As may be gleaned from these provisions, the new law

amended R.A. No. 7875 and other laws that enabled
certain GOCCs and GFIs to fix their own compensation
frameworks; the law now authorizes the President to fix
the compensation and position classification system for all
GOCCs and GFIs, as well as other entities covered by the
law. This means that, the President can now reissue an EO
containing these same provisions without any legal
constraints.
A moot case is “one that ceases to present a justiciable
controversy by virtue of supervening events, so that a
declaration thereon would be of no practical use or value.”42
“[A]n action is considered ‘moot’ when it no longer presents
a justiciable controversy because the issues involved have
become academic or dead[,] or when the matter in dispute
has already been resolved and hence, one is not entitled to
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judicial intervention unless the issue is likely to be raised

again between the parties x  x  x. Simply stated, there is
nothing for the x x x court to resolve as [its] determination
x x x has been overtaken by subsequent events.”43
This is the present situation here. Congress, thru R.A.
No. 10149, has expressly empowered the President to
establish the compensation systems of GOCCs and GFIs.
For the Court

_______________
42 Funa v. Ermita, G.R. No. 184740, February 11, 2010, 612 SCRA 308,
319.
43 Santiago v. Court of Appeals, 348 Phil. 792, 800; 285 SCRA 16, 21-22
(1998).

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to still rule upon the supposed unconstitutionality of EO 7

will merely be an academic exercise. Any further discussion
of the constitutionality of EO 7 serves no useful purpose
since such issue is moot in its face in light of the
enactment of R.A. No. 10149. In the words of the eminent
constitutional law expert, Fr. Joaquin Bernas, S.J., “the
Court normally [will not] entertain a petition touching on
an issue that has become moot because x  x  x there would
[be] no longer x x x a ‘flesh and blood’ case for the Court to
resolve.”44
All told, in view of the supervening events rendering the
petition moot, as well as its patent formal and procedural
infirmities, we no longer see any reason for the Court to
resolve the other issues raised in the certiorari petition.
WHEREFORE, premises considered, the petition is
DISMISSED. No costs.
SO ORDERED.

Carpio, Velasco, Jr., Leonardo-De Castro, Peralta,

Bersamin, Abad, Villarama, Jr., Perez, Mendoza, Reyes and
Perlas-Bernabe, JJ., concur.
Corona (C.J.), See separate opinion.
Del Castillo, J., On Official Leave.
Sereno, J., On Leave.

_______________

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44 See J. Brion Concurring and Dissenting Opinion in Province of

North Cotabato v. Government of the Republic of the Philippines Peace
Panel on Ancestral Domain (GRP), G.R. Nos. 183591, 183752, 183893,
183951, & 183962, October 14, 2008, 568 SCRA 402, 703.

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SEPARATE OPINION

CORONA, C.J.:
Most GOCCs are incurring significant financial losses.
Budgetary support to the total government corporate sector
(including government financial institutions, social security
institutions, and GOCCs providing goods and services to
the public) amounted to P80.4 billion during 2000–2004. In
addition, indirect support, in the form of guarantees on
GOCC obligations, is also in the billions of pesos. In the
past 5 years, there has been a noticeable increase in the
aggregate deficit of the 14 monitored GOCCs,1 bringing
their financial viability into question. While the 14
monitored GOCCs’ current and capital expenditures
fluctuated around 6% of GDP, revenues have fallen from 5%
to 4.1% of GDP over 2000–2004, increasing the deficit of the
monitored GOCCs from 0.6% to 1.8% of GDP over the same
period. In 2004, the monitored GOCCs’ consolidated
deficit was P85.4 billion, a more than fourfold
increase from the 2000 level of P19.2 billion. The 2004
deficit is already about the same size as the potential new
revenues collected through the expanded value-added tax
law. There are various reasons for the ballooning
GOCC deficits, including (i) failure to adjust tariff rates,
(ii) large capital requirements, and (iii) operational and
management inefficiencies.2

_______________
1 These are Home Guaranty Corporation, Light Rail Transit Authority,
Local Water Utilities Administration, Manila Waterworks and Sewerage
System, National Development Corporation, National Electrification
Administration, National Food Authority, National Housing Authority,
National Irrigation Authority, National Power Corporation (by virtue of
the Electric Power Industry Reform Act, the Power Sector Assets and
Liabilities Management Corporation and the National Transmission
Corporation are added to the list), Philippine Economic Zone Authority,
Philippine National Oil Corporation, Philippine National Railway, and

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Philippine Ports Authority. There are 722 more GOCCs whose operations
are barely monitored.
2 Asian Development Bank Technical Assistance Report, Republic of
the Philippines: Government-Owned and -Controlled Corporations
Reform, June 2006. Accessed on 14 July 2011 through

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Accountability in public office requires rationality and

efficiency in both administrative and financial operations of
all government offices, government-owned and controlled
corporations (GOCCs) included. As a corollary, public funds
must be utilized in a way that will promote transparency,
accountability and prudence.
The nation was recently informed that GOCCs, most of
which enjoyed privileges not afforded to other offices and
agencies of the National Government, suffer from serious
fiscal deficit. Yet, officers and employees of these GOCCs
continue to receive hefty perks and excessive allowances
presenting a stark disconnect and causing the further
depletion of limited resources. In the face of such situation,
where the President as Chief Executive makes a decisive
move to stave off the financial hemorrhage and
administrative inefficiency of government corporations, the
Court should not invalidate the Chief Executive’s action
without a clear showing of grave abuse of discretion on his
part.
Factual Antecedents
In his first State of the Nation Address, President
Benigno Simeon C. Aquino III exposed anomalies in the
financial management of the Metropolitan Waterworks and
Sewerage System, the National Power Corporation and the
National Food Authority. These revelations prompted the
Senate to conduct legislative inquiries on the matter of the
activities of GOCCs. Appalled by its findings, the Senate
issued Resolution No. 17, s. 2010, urging the President to
order the immediate suspension of the unusually large and
excessive allowances, bonuses, incentives and other perks
of members of the governing boards of GOCCs and
government financial institutions (GFIs). Thus, on
September 8, 2010, President Benigno

_______________

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http://www.adb.org/documents/tars/phi/39606-phi-tar.pdf. Emphasis
supplied.

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Simeon C. Aquino III issued Executive Order No. 73 (EO 7)

strengthening the supervision of the compensation levels of
GOCCs and GFIs by controlling the grant of excessive
salaries, allowances, incentives and other benefits.4
EO 7 imposes a moratorium on increases in salaries,
allowances, incentives and other benefits of GOCCs and
GFIs, except salary adjustments pursuant to EO 8011
dated June 17, 2009 and EO 900 dated June 23, 2010.5 It
suspended the allowances, bonuses and other perks enjoyed
by the boards of directors/trustees of GOCCs and GFIs
until December 31, 2010, pending the issuance of new
policies and guidelines on the compensation packages of
GOCCs and GFIs.6 In addition, it provides for the creation
of a Task Force on Corporate Compensation (TFCC) to
undertake a review of all remunerations granted to
members of the board of directors, officers and rank-and-
file employees, as well as discretionary funds of GOCCs
and GFIs.7 It mandates the submission of information on
all personnel remuneration from all GOCCs and GFIs to
the TFCC.8 Lastly, it establishes guiding principles as well
as a total compensation framework for the rationalization
of the compensation and position classification system in
GOCCs and GFIs.9
The constitutionality of EO 7 is now being challenged by
petitioner Jelbert B. Galicto who brings this petition for
certiorari and prohibition in his capacity as a lawyer and as
an employee of the Philippine Health Insurance
Corporation

_______________
3 Directing the Rationalization of the Compensation and Position
Classification System in Government-Owned and Controlled Corporations
(GOCCs) and Government Financial Institutions (GFIs), and for Other
Purposes. It took effect on September 25, 2010.
4 Third Whereas Clause.
5 Sec. 9.
6 Sec. 10.
7Sec. 7.
8 Sec. 8.

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9 Secs. 2 and 3.

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(PhilHealth) Regional Office–Butuan City. Essentially, he

questions the authority of the President to issue EO 7. He
likewise assails the constitutionality of EO 7 for allegedly
violating his right to property without due process of law.
The ponencia of Justice Arturo D. Brion dismisses the
petition for being replete with formal and procedural
defects and for having been rendered moot by supervening
events.
I agree with the ponencia’s thorough discussion and
correct disposition. Nevertheless, I am submitting this
opinion to express my thoughts on matters which I believe
to be equally important considerations in the resolution of
this case.
Fundamental considerations governing the exercise of
the power of judicial review require the Court to exercise
restraint in nullifying the act of a co-equal and coordinate
branch. Here, the justiciability doctrines of standing and
mootness work against petitioner.
Moreover, a careful consideration of the respective
arguments of the parties compels sustaining the validity of
EO 7. The President as Chief Executive has the legal
authority to issue EO 7. Furthermore, petitioner failed to
show that the President committed grave abuse of
discretion in directing the rationalization of the
compensation and position classification system in GOCCs
and GFIs.
Lack of Standing and Mootness
The power of judicial review is a sword that must be
unsheathed with restraint. To ensure this, certain
justiciability doctrines must be complied with as a
prerequisite for the Court’s exercise of its awesome power
to declare the act of a co-equal branch invalid for being
unconstitutional. These doctrines are important as they are
intertwined with the principle of separation of powers.10
They help define the judi-

_______________
10 Chemerinsky, Erwin, CONSTITUTIONAL LAW: PRINCIPLES AND POLICIES,
Third Edition (2006), p. 51.

183

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Galicto vs. Aquino III

cial role; they determine when it is appropriate for courts

to review (a legal issue) and when it is necessary to defer to
the other branches of government.11
Among the justiciability doctrines are standing and
mootness. Petitioner failed to observe both.
Courts do not decide all kinds of cases dumped on their
laps and do not open their doors to all parties or entities
claiming a grievance.12 Locus standi is intended to assure a
vigorous adversary presentation of the case. More
importantly, it warrants the judiciary’s overruling the
determination of a coordinate, democratically elected organ
of government. It thus goes to the very essence of
representative democracies.13
Petitioner, for himself, asserts his right to question the
constitutionality of EO 7 on two grounds. First, as an
employee of PhilHealth, he allegedly stands to be
prejudiced by EO 7 insofar as it suspends or imposes a
moratorium on the grant of salary increases and other
benefits to employees and officials of GOCCs and GFIs and
curtails the prerogatives of the officers responsible for the
fixing and determination of his compensation. Second, as a
lawyer, he claims to have an interest in making sure that
laws and orders by government officials are legally and
validly issued and implemented.
Petitioner cannot sufficiently anchor his standing to
bring this action on account of his employment in
PhilHealth, a GOCC covered by EO 7. He cannot
reasonably expect this Court to sympathize with his lament
that the law impedes or threatens to impede his right to
receive future increases as well as the right of members of
the board of directors of Philhealth to allowances and
bonuses.

_______________
11 Id.
12 Lozano v. Nograles, G.R. No. 187883, June 16, 2009, 589 SCRA 354.
13 Id.

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The irreducible minimum condition for the exercise of

judicial power is a requirement that a party “show he
personally has suffered some actual or threatened injury”
to his rights.14 A party who assails the constitutionality of
a statute or an official act must have a direct and personal
interest. He must show not only that the law or any
governmental act is invalid, but also that he sustained or
is in immediate danger of sustaining some direct
injury as a result of its enforcement, and not merely that
he suffers thereby in some indefinite way. He must show
that he has been or is about to be denied some right
or privilege to which he is lawfully entitled or that he
is about to be subjected to some burdens or penalties by
reason of the statute or act complained of.15
For this reason, petitioner’s reliance on his status as
PhilHealth employee, without more, is a frail thread that
fails to sustain the burden of locus standi required of
anyone who may properly invoke the Court’s power of
judicial review.
EO 7 simply imposes a moratorium on increases in
salaries, allowances and other benefits of officials and
employees of GOCCs and GFIs and directs the suspension
of all allowances bonuses and incentives of GOCC and GFI
officials. Moratorium is defined as an authorized
postponement in the performance of an obligation or a
suspension of a specific activity.16 Section 9 of EO 7 is not a
permanent prohibition on petitioner’s perceived right to
receive future increases. Nor is it an absolute ban on salary
increases as it ensures that, like all other officials and
employees of the government, officials and employees of
GOCCs and GFIs will continue to enjoy the

_______________
14 Valley Forge Christian College v. Americans United for separation of
Church and State, 454 U.S. 464 (1982).
15 Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism
Council, G.R. No. 178552, October 5, 2010, 632 SCRA 146. Emphasis
supplied.
16 Black’s Law Dictionary, Eighth Edition, page 1031.

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salary increases mandated under EO 8011 dated June 17,

2009 and EO 900 dated June 23, 2010.

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While one’s employment is a constitutionally-protected

property right, petitioner does not claim that his
employment is at risk under EO 7. Petitioner is simply
concerned about his entitlement to future salary increases.
However, a public officer has a vested right only to salaries
already earned or accrued.17 Salary increases are a mere
expectancy.18 They are by nature volatile and dependent on
numerous variables, including the company’s fiscal
situation, the employee’s future performance on the job, or
the employee’s continued stay in a position.19 Thus,
petitioner does not have a “right” to an increase in salary.
There is no vested right to salary increases.20 There must
be a lawful decree or order supporting an employee’s
claim.21 In this case, petitioner failed to point to any lawful
decree or order supporting his entitlement to future
increases in salary, as no such decree or order yet exists.
It is, however, contended that petitioner does not claim
any right to any future increase. He merely seeks to
remove any legal impediment to his receiving future
increases. It is asserted that, without the legal impediment
provided under Section 9 of EO 7, any future increase in
petitioner’s compensation will simply depend on the usual
factors considered by the proper authorities. I fear this
view is misleading and incorrect.
It is misleading because, by re-working the concept of
injury, it diverts the focus from the required right-centric
approach to the concept of injury as an element of locus
standi.

_______________
17 See Fisk v. Jefferson, 116 U.S. 131 (1885).
18 House of Sara Lee v. Rey, G.R. No. 149013, August 31, 2006, 500
SCRA 419.
19 Id.
20 Boncodin v. National Power Corporation Employees Consolidated
Union (NECU), G.R. No. 162716, September 27, 2006, 503 SCRA 611.
21 Id.

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Injury or threat of injury, as an element of legal

standing, refers to a denial of a right or privilege. It does
not include the denial of a reasonable expectation.

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The argument is likewise incorrect because petitioner’s

reasonable expectation of any future salary increase is
subject to presidential approval. Even without Section 9 of
EO 7, the President may disallow any salary increase in
RA 675822—exempt entities. Section 9 of Joint Resolution
No. 4, Section 59 of the General Provisions of RA 997023
and Section 56 of the General Provisions of RA 1014724
expressly confer on the President the authority to approve
or disapprove “any grant of or increase in salaries,
allowances, and other fringe benefits” in entities exempt
from the coverage of RA 6758. The approval of the
President, upon the favorable recommendation of the
Department of Budget and Management (DBM), is among
the “usual factors” that will determine any future salary
increase that may be reasonable expected to be received by
petitioner.
Petitioner cannot also lay claim to any direct personal
injury to his right or interest arising from the suspension
under Section 10 of EO 7 of allowances and bonuses
enjoyed by the board of directors/trustees of GOCCs and
GFIs. He is not a member of the board of directors of
Philhealth.
Neither can petitioner rely on his membership in the
Philippine Bar to support his legal standing. Mere interest
as a member of the Bar25 and an empty invocation of a duty
in “making sure that laws and orders by officials of the
Philip-

_______________
22 Compensation and Position Classification Act of 1989.
23 General Appropriations Act of FY 2010.
24 General Appropriations Act of FY 2011.
25Francisco, Jr. v. House of Representatives, G.R. No. 160261,
November 10, 2003, 415 SCRA 44.

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pine government are legally issued and implemented” does

not suffice to clothe one with standing.26
It is clear from the foregoing that petitioner failed to
satisfy the irreducible minimum condition that will trigger
the exercise of judicial power. Lacking a leg on which he
may base his personality to bring this action, petitioner’s
claim of sufficient standing should fail.

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Even assuming that petitioner had standing at the time

he commenced this petition, subsequent events have
rendered his petition moot.
For one, the effectivity of the suspension of allowances
and bonuses enjoyed by the board of directors/trustees of
GOCCs and GFIs under Section 10 of EO 7 already lapsed
on December 31, 2010.27 Thus, a review of the
constitutionality of that provision is no longer necessary
and its invalidation improper. The unnecessary
invalidation of Section 10 of EO 7 might not only betray
injudiciousness on the part of the Court but also needlessly
put the Chief Executive, the head of a co-equal branch, in a
bad light for issuing an invalid provision. Thus, the undue
disregard of the mootness doctrine in connection with
Section 10 of EO 7 would inflict severe collateral damage to
judicial modesty and inter-branch courtesy.
Moreover, as the ponencia correctly ruled, the
enactment of RA28 1014929 has rendered the issue as to the
validity of EO 7 effectively moot. With RA 10149, Congress
affirmed the power of the President as enunciated in EO 7
to set guidelines and components of a rationalized
compensation and position classification for all GOCC and
GFI employees.

_______________
26 David v. Macapagal-Arroyo, G.R. No. 171396, May 03, 2006, 489
SCRA 160.
27 The suspension was extended until 31 January 2011 by EO 19 dated
30 December 2010.
28Republic Act.
29 GOCC Governance Act of 2011.

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If a case is moot, there is no longer an actual controversy

between adverse litigants.30 Also, if events subsequent to
the initiation of the lawsuit have resolved the matter, then
the decision of the court on that issue is not likely to have
any meaningful effect.31
With the recognition that RA 10149 mooted the
challenge to EO 7, the Court must act with circumspection
and prudence, bearing in mind that due respect for a co-
equal branch necessitates that the presumption of legality

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and constitutionality afforded to the said provisions should

no longer be disturbed.
Consistency with Existing Laws
Sections 2 to 6 of EO 7 is an enumeration of the
guidelines and components of a rationalized compensation
and position classification for GOCCs and GFIs that the
President intends to establish. In particular, Section 2
provides the guiding principles; Section 3 discusses the
total compensation framework; Section 4 pertains to the
standard components of the compensation and position
classification system; Section 5 involves the rationalization
of indirect compensation and Section 6 lists the
considerations in setting compensation levels.
Petitioner claims that these provisions are invalid
because they violate existing laws, namely Section 16(n) of
RA 787532 (the charter of Philhealth) and Section 9 of Joint
Resolution No. 433 of the Senate and the House of
Representatives.

_______________
30 Chemerinsky, supra note 10, p. 114.
31 Id.
32 An Act Instituting a National Health Insurance Program for All
Filipinos and Establishing the Philippine Health Insurance Corporation
for the Purpose. It is otherwise known as the “National Health Insurance
Act of 1995.”
33 Joint Resolution Authorizing the President of the Philippines to
Modify the Compensation and Position Classification System of

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Galicto vs. Aquino III

Petitioner finds fault in the failure of EO 7 to correctly

distinguish between GOCCs and GFIs that have been
exempted by law from RA 6758, as amended, and those
that are within its coverage.
RA 6758, as amended, vests the Department of Budget
and Management (DBM), which is under the control of the
President, the authority to establish and administer a
compensation and position classification system. On the
other hand, Section 16(n) of RA 7875 gives the board of
directors of Philhealth the authority to appoint its own
personnel and to fix their compensation, with the exception
of the Philhealth president whose appointment and
compensation require approval of the President. For

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petitioner, EO 7 violates Section 16(n) of RA 7875 by

vesting on the DBM and the President the power to
determine the compensation of Philhealth employees.
Joint Resolution No. 4 authorizes the President to
modify the compensation and position classification system
under RA 6758 of civilian personnel, among others. Section
9 of Joint Resolution No. 4 recognizes the distinct character
of exempt entities and provides that such entities shall be
governed by their respective compensation and position
classification system. For petitioner, by using the
guidelines, standards and components of standardized
compensation framework provided under Joint Resolution
No. 4 and applying them to all GOCCs and GFIs, EO 7
contravenes Joint Resolution No. 4 itself. In particular, EO
7 disregards the substantial distinction made under
Section 9 of Joint Resolution No. 4 insofar as the right of
exempt GOCCs to set their own compensation and position
classification systems is concerned.
Petitioner is wrong. EO 7 is consistent with laws,
including RA 7875 and Joint Resolution No. 4.

_______________
Civilian Personnel and the Base Pay Schedule of Military and
Uniformed Personnel in the Government, and for Other Purposes.

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True, Congress carved exceptions to RA 6758, as

amended, when it created GOCCs and GFIs which have
been granted the authority to determine their own
compensation and position classification system.
Philhealth, governed by RA 7875, is one of these RA 6758-
exempt entities.
It is likewise true that Section 9 of Joint Resolution No.
4 recognizes the authority granted to exempt entities like
Philhealth to determine their own compensation and
position classification system. Nonetheless, the said
provision also provides that exempt entities “shall
observe the policies, parameters and guidelines
governing position classification, salary rates,
categories and rates of allowances, benefits and
incentives prescribed by the President.”
For purposes of clarity, Section 9 of Joint Resolution No.
4 provides:

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(9) Exempt Entities―Government agencies which by specific

provision/s of laws are authorized to have their own compensation
and position classification system shall not be entitled to the
salary adjustments provided herein. Exempt entities shall be
governed by their respective Compensation and Position
Classification System: Provided, That such entities shall
observe the policies, parameters and guidelines governing
position classification, salary rates, categories and rates of
allowances, benefits and incentives prescribed by the
President: Provided, further, That any increase in the
existing salary rates thereof shall be subject to the
approval by the President, upon the recommendation of
the DBM: Provided, finally, That exempt entities which still
follow the salary rates for positions covered by [RA 6758], as
amended, are entitled to the salary adjustments due to the
implementation of this Joint Resolution, until such time that they
have implemented their own compensation and position
classification system.” (Emphasis supplied)

Provisions of law should be read and understood in their

entirety and all parts thereof should be seen as constituting
a coherent whole. In this context, the recognition under
Section 9 of Joint Resolution No. 4 of the authority granted
to exempt
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entities like Philhealth to determine their own

compensation and position classification system seeks to
exclude them from the salary adjustments provided in
Joint Resolution No. 4. This would have the effect of
retaining the existing compensation levels in the said
exempt entities at that time. It would prevent both
diminution, in case their existing compensation levels are
higher than the salary adjustments, and also increase,
which would have enlarged the pay disparity between
those covered by RA 6758 and exempt entities. To ensure
observance of the distinction between RA 6758-covered and
RA 6758-exempt entities and, at the same time, forestall
any unnecessary or excessive dissimilarity in compensation
and position classification systems may occur as a result of
the distinctions, exempt entities are required to observe the
policies, parameters and guidelines governing position
classification, salary rates, categories and rates of
allowances, benefits and incentives prescribed by the
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President. This is a recognition by Congress of the

authority of the President to issue policies, parameters and
guidelines that will govern the determination by exempt
entities of their respective compensation and position
classification systems. As a further safeguard against any
abuse or misuse of their exclusion from RA 6758, any
increase in existing salary rates of exempt entities are
mandated to have the imprimatur of the President, upon
the recommendation of the DBM. This second proviso
complements and enhances the first proviso. It gives the
President the opportunity to ascertain whether salary
increases in exempt entities are in accordance with the
prescribed policies, parameters and guidelines on
compensation and position classification system. As a final
proviso, exempt entities which still follow the salary rates
for positions covered by RA 6758 are entitled to the salary
adjustments under Joint Resolution No. 4, until such time
as they have implemented their own compensation and
position classification system. Again, this acknowledges the
status of exempt entities and prevents the effective
diminution of their salary rates.
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Taken as a cohesive whole, Section 9 of Joint Resolution

No. 4 pertains to the effect on and applicability to RA
6758-exempt entities of the salary adjustments
provided under the said Joint Resolution. It prohibits RA
6758-exempt entities from availing of the beneficial effects
of the salary adjustments provided therein, unless such
entities still follow the salary rates for positions covered by
RA 6758 and only “until such time that they have
implemented their own compensation and position
classification system.” However, there is nothing there
which limits or constricts the power of the President
as Chief Executive to prescribe such policies,
parameters and guidelines which in his discretion
would best serve public interest by regulating the
compensation and position classification system of
RA 6758-exempt entities. There is nothing there that
prevents or prohibits him from adopting the same or
similar policies, parameters and guidelines provided for in
the said Joint Resolution. Viewed in this light, Sections 2 to
6 of EO 7 cohere with the objectives of Joint Resolution No.
4 and other laws relevant to it.
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Petitioner further asserts as invalid insofar as

Philhealth is concerned the second proviso in Section 9 of
Joint Resolution No. 4. The said proviso requires that any
increase in the existing salary rates in RA 6758-exempt
entities shall be subject to the approval by the President,
upon the recommendation of the DBM. For petitioner, this
proviso amends or repeals the grant of authority under RA
7875 to fix the compensation of Philhealth’s personnel to
Philhealth’s board of directors. Petitioner, however,
maintains that a joint resolution cannot be used to repeal
another law simply because it is not a law.
Under the Rules of both the Senate and the House of
Representatives,34 a joint resolution, like a bill, is required
to be

_______________
34 Rules XXI, XXII, XXIII and XXV for the Senate and Rule X for the
House of representative.

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enrolled, examined, undergo three readings and signed by

the presiding officer of each House. A joint resolution, like
a bill, is also presented to the President for approval. There
is no real difference between a bill and a joint resolution.35
A joint resolution also satisfies the two requisites before a
bill becomes law—approval by both Houses of Congress
after three readings and approval by the President. Thus, a
joint resolution, upon approval by the President, is law.
Even the Rules of the House of Representatives
acknowledge this:

“SEC. 58. Third Reading. x x x

No bill or joint resolution shall become law unless it passes
three (3) readings on separate days and printed copies thereof in
its final form are distributed to the Members three (3) days before
its passage except when the President certifies to the necessity of
its immediate enactment to meet a public calamity or emergency.”
(Emphasis supplied)

Joint Resolution No. 4 was approved by both Houses of

Congress after three readings. President Gloria Macapagal-
Arroyo approved it on June 17, 2009. It was published in
the Manila Times on June 20, 2009 and in Volume 105, No.

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34 of the Official Gazette on August 24, 2009. It is therefore

a law.
As law, Joint Resolution No. 4 may therefore amend or
repeal RA 7875, if the second proviso of Section 9 indeed it
modifies RA 7875. However, the said proviso may be read
in a way that does not require it to be seen as an implied
amendment of RA 7875. It can be simply read as a
necessary adjunct of the authority to prescribe policies,
parameters and guidelines on compensation and position
classification system for exempt entities. Without it, the
President would have no way to check if the prescribed
policies, parameters and guidelines are actually observed.

_______________

35 http://www.senate.gov.ph/about/legpro.asp (last visited July 13,

2011). 

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Nevertheless, Section 59 of the General Provisions of RA

9970 and Section 56 of the General Provisions of RA 10147
identically provide:

“SEC. 59. Special Compensation and Other Benefits.—

GOCCs, including GFIs, who are exempt from, or are
legally enjoying special compensation and other benefits
which are subject to those authorized under R.A. No. 6758,
as amended, shall be governed by such special laws:
PROVIDED, That they shall observe the policies,
parameters and guidelines governing position
classification, salary rates, categories and rates of
allowances, benefits, and incentives prescribed by the
President; PROVIDED, FURTHER, That they shall submit
their existing compensation and position classification
systems and their implementation status to the DBM;
PROVIDED, FURTHERMORE, That any grant of or
increase in salaries, allowances, and other fringe benefits
shall be subject to the approval of the President, upon
favorable recommendation of the DBM: PROVIDED,
FINALLY, That they shall not be entitled to benefits accruing to
government employees covered by R.A. No. 6758, as amended, if
they are already receiving similar or equivalent benefits under
their own compensation scheme.” (Emphasis supplied)

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Section 59 of the General Provisions of RA 9970

and Section 56 of the General Provisions of RA 10147
completely debunk the conclusion that Sections 2 to
6 violate existing laws. Specifically with respect to all
RA 6758-exempt GOCCs and GFIs, they recognize the
authority of the President as exercised in Sections 2 to 6 of
EO 7 to prescribe policies, parameters and guidelines
governing position classification, salary rates, categories
and rates of allowances, benefits, and incentives.
Specifically with respect to all RA 6758-exempt GOCCs and
GFIs, they acknowledge the President’s power to approve
or disapprove “any grant of or increase in salaries,
allowances, and other fringe benefits.”
Joint Resolution No. 4, Section 59 of the General
Provisions of RA 9970 and Section 56 of the General
Provisions of RA 10147 reinforce the rule that “sound
management and effec-
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tive utilization of financial resources of government are

basically executive functions.”36 As a necessary incident
thereof, the President as Chief Executive has the legal
competence to exercise his power of control of all the
executive departments, bureaus and offices,37 including
GOCCs and GFIs.38 EO 7 is simply an exercise by the
President of that power of control.
In sum, the guidelines in Sections 2 to 6 of EO 7 are
within the bounds of authority conferred on the President
by the Constitution and various laws. Such regulatory
powers cover all GOCCs and GFIs, regardless of coverage
in or exemption from the salary standardization laws. In
issuing EO 7, the President does not encroach on the
authority of the legislature to make laws as he is merely
enforcing the law:

_______________
36 Blaquera v. Alcala, G.R. No. 109406, 11 September 1998, 295 SCRA
366, citing Book IV of Executive Order No. 292 whose applicable
provisions follow:
Section 1. Declaration of Policy.—It is the policy of the State that the
Department of Finance shall be primarily responsible for the sound and
efficient management of the financial resources of the Government, its
subdivisions, agencies and instrumentalities. (Title II)

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Section 1. Declaration of Policy.—The national budget shall be

formulated and implemented as an instrument of national development,
reflective of national objectives and plans; supportive of and consistent
with the socio-economic development plans and oriented towards the
achievement of explicit objectives and expected results, to ensure that the
utilization of funds and operations of government entities are conducted
effectively; formulated within the context of a regionalized governmental
structure and within the totality of revenues and other receipts,
expenditures and borrowings of all levels of government-owned or
controlled corporations; and prepared within the context of the national
long-term plans and budget programs of the Government. (Title XVII)
37 Section 17, Article VII: “The President shall have control of all the
executive departments, bureaus and offices. He shall ensure that the laws
be faithfully executed.”
38 NAMARCO v. Arca, 29 SCRA 648 (1969).

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“While Congress is vested with the power to enact laws, the

President executes the laws. The executive power is vested in the
President. It is generally defined as the power to enforce and
administer the laws. It is the power of carrying (out) the laws into
practical operation and enforcing their due observance.”38

It is fundamental that no person shall be deprived of

life, liberty or property without due process of law.40 Hence,
the premise of a valid due process claim, whether
substantive or procedural, is the dispossession of life or
liberty or property. Where there is no deprivation of life,
liberty or property, no meaningful claim of denial of due
process may be made.
As discussed earlier, the imposition of a moratorium on
increases in salaries, allowances and other benefits of
officers and employees of GOCCs and GFIs, except salary
adjustments under EO 8011 dated June 17, 2009 and EO
900 dated June 23, 2010, does not constitute a deprivation
of property. In fact, it ensures that, like all other officials
and employees of the government, officials and employees
of GOCCs and GFIs will continue to enjoy the salary
increases granted under EO 8011 dated June 17, 2009 and
EO 900 dated June 23, 2010.
More importantly, the right of a public officer to receive
compensation can only arise out of the rendition of the
public services related to his or her office.41 The right to
compensation arises out of the performance by the public
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officer of his duties.42Thus, a public officer’s right to salary

is limited only to salaries which he has already earned or
accrued for services rendered.43 Other than that, a public
officer does not have a vested right to salary and his
compensation may be

_______________
39 Ople vs. Torres, 293 SCRA 141 (1998).
40 Section 1, Article III, Constitution.
413C AmJur 2d 716, Public Officers and Employees, Sec. 272.
42 Id.
43 Fisk v. Jefferson, supra note 17.

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altered, decreased or discontinued, in the absence of a

constitutional prohibition.44
If no vested right to salary generally pertains to a public
officer, there is no cogent reason to support the claim to a
right to future salary increase. The grant of any salary
increase in the future is something that is merely
anticipatory of a prospective benefit, something that is
contingent on various factors. That is why it is a mere
expectancy,45 which does not give rise to a vested right.46
Furthermore, the measure undertaken by the President
seeks to impose a moratorium only on increases which are
not authorized by existing legislation sanctioning salary
adjustments.
On the matter of the suspension of allowances and
bonuses (which is already moot as it was expressly made
effective until December 31, 2010 only),47 its context shows
that it was meant to arrest the questionable practice by
members of the board of directors/trustees of GOCCs and
GFIs granting numerous and excessive allowances,
bonuses, incentives and other benefits to themselves. The
President’s action as Chief executive was simply a decisive
response to Senate issued Resolution No. 17, s. 2010 urging
him to act on the matter and an exercise of his control and
oversight powers.
More importantly, there could have been no violation of
substantive due process as petitioner, or anybody for that
matter, cannot properly claim a right to receive bonuses. A

_______________

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44 Mechem, Floyd, A Treatise on the Law on Public Offices and Public

Officers (1890), p. 577.
45 House of Sara Lee v. Rey, supra note 18.
46 Boncodin v. National Power Corporation Employees Consolidated
Union (NECU), supra note 20. Equitable Banking Corporation (now
known as Equitable-PCI Bank) v. Sadac, G.R. No. 164772, 490 SCRA 380
(2006).
47 As stated earlier, the suspension was extended until 31 January
2011 by EO 19 dated 30 December 2010. (See note 27.)

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bonus is not a demandable and enforceable obligation.48 By

definition, a “bonus” is a gratuity or act of liberality of the
giver which cannot be demanded as a matter of right
by the recipient.49 It is something given in addition to
what is ordinarily received by or strictly due to the
recipient. The grant thereof is basically a management
prerogative which cannot be forced upon the employer who
may not be obliged to assume the onerous burden of
granting bonuses or other benefits aside from the
employee’s basic salaries or wages, especially so if it is
incapable of doing so.50 Thus, there can be no oppression to
speak of even if these privileges (bonuses, allowances and
incentives) cease to be given. All the more reason should
the President’s judgment as Chief Executive be accorded
respect if he directs the temporary stoppage of the grant of
bonuses when he deems it to be prejudicial to public
interest or too onerous because of the government’s fiscal
condition.
It is therefore clear that the suspension of the grant of
bonuses and the imposition of a moratorium on salary
increases under EO 7 do not deprive petitioner of any
property right. As such, any declaration that such
suspension or moratorium violates substantive due process
cannot be justified.
Moreover, as already discussed, Section 59 of the
General Provisions of RA 9970 and Section 56 of the
General Provisions of RA 10147 expressly recognize the
President’s power to approve or disapprove “any grant of or
increase in salaries, allowances, and other fringe benefits”
in all RA 6758-exempt GOCCs and GFIs, including
Philhealth. The power to approve or disapprove covers the

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lesser power to suspend the grant of allowances and

bonuses or impose a moratorium on salary increases.

_______________
48 Lepanto Ceramic, Inc. v. Lepanto Ceramics Employees Association,
614 SCRA 63 (2010).
49 Manila Banking Corporation v. National Labor Relations
Commission, G.R. No. 107487. September 29, 1997, 279 SCRA 602.
50 Id.

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All told, the act of the President as Chief Executive in

issuing EO 7 was not oppressive, arbitrary, capricious or
whimsical. No grave abuse of discretion may be imputed to
the President. Thus, as the President’s official act which
enjoys the presumption of constitutionality and regularity,
EO 7 should be accorded due respect and its validity
sustained.
A Final Word
Accountability of public office is a safeguard of
representative democracy. All who serve in government
must always be aware that they are exercising a public
trust. They must bear in mind that public funds are scarce
resources and should therefore be used prudently and
judiciously. Hence, where there are findings that
government funds are being wasted due to operational
inefficiency and lack of fiscal responsibility in the executive
departments, bureaus, offices or agencies, the President as
Chief Executive should not be deprived of the authority to
control, stop, check or at least manage the situation.
Absent any showing of grave abuse of discretion on his
part, the Court should recognize in the President as Chief
Executive the power and duty to protect and promote
public interest thru the rationalization of the compensation
and position classification system in executive
departments, bureaus, offices and agencies, including
GOCCs and GFIs.
Accordingly, I vote that the petition be DISMISSED.
 

Petition dismissed.

Notes.—The civil service encompasses all branches and

agencies of the Government, including government-owned
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or controlled corporations (GOCCs) with original charters,

like the Government Service Insurance System (GSIS), or
those created by special law. (Garcia vs. Molina, 627 SCRA
540 [2010])
As a general rule, the government and all the attached
agencies with no legal personality distinct from the former
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200 SUPREME COURT REPORTS ANNOTATED

Galicto vs. Aquino III

are exempt from posting appeal bonds, whereas

government-owned and controlled corporations (GOCCs)
are not similarly exempted. (Banahaw Broadcasting
Corporation vs. Pacana III, 649 SCRA 196 [2011])

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