MODULE 2: Part I - Power of Administrative Agencies/Bodies Instead of submitting satisfactory BA/BE test results for Refam, respondents filed a

petition for prohibition and annulment of Circular Nos. 1 and 8, s. 1997 before the
Republic v. Drugmakers Laboratories, Inc. RTC, alleging that it is the DOH, and not the FDA, which was granted the authority to
G.R. No. 190837 issue and implement rules concerning RA 3720.
5 March 2014
ISSUE: Whether or not the FDA may validly issue and implement Circular Nos. 1 and
DOCTRINE: An administrative regulation may be classified as a legislative rule, an 8, s. 1997. - YES
interpretative rule, or a contingent rule. Legislative rules are in the nature of
subordinate legislation and designed to implement a primary legislation by providing RULING: An administrative regulation may be classified as a legislative rule, an
the details thereof. Interpretative rules are intended to interpret, clarify or explain interpretative rule, or a contingent rule. Legislative rules are in the nature of
existing statutory regulations under which the administrative body operates. subordinate legislation and designed to implement a primary legislation by providing
Contingent rules are those issued by an administrative authority based on the the details thereof. They usually implement existing law, imposing general, extra-
existence of certain facts or things upon which the enforcement of the law depends. statutory obligations pursuant to authority properly delegated by Congress and effect
a change in existing law or policy which affects individual rights and obligations.
FACTS: The Department of Health (DOH) issued Administrative Order No. (AO) 67, Meanwhile, interpretative rules are intended to interpret, clarify or explain existing
s. 1989, entitled "Revised Rules and Regulations on Registration of Pharmaceutical statutory regulations under which the administrative body operates. Their purpose or
Products." Among others, it required drug manufacturers to register certain drug and objective is merely to construe the statute being administered and purport to do no
medicine products with the FDA before they may release the same to the market for more than interpret the statute. Simply, they try to say what the statute means and
sale. In this relation, a satisfactory bioavailability/bioequivalence (BA/BE) test is refer to no single person or party in particular but concern all those belonging to the
needed for a manufacturer to secure a CPR for these products. However, the same class which may be covered by the said rules. Finally, contingent rules are
implementation of the BA/BE testing requirement was put on hold because there was those issued by an administrative authority based on the existence of certain facts or
no local facility capable of conducting the same. The issuance of Circular No. 1, s. things upon which the enforcement of the law depends.
1997 resumed the FDA’s implementation of the BA/BE testing requirement with the Circular Nos. 1 and 8, s. 1997 cannot be considered as administrative
establishment of BA/BE testing facilities in the country. Thereafter, the FDA issued regulations because they do not: (a) implement a primary legislation by providing the
Circular No. 8, s. 1997 which provided additional implementation details concerning details thereof; (b) interpret, clarify, or explain existing statutory regulations under
the BA/BE testing requirement on drug products. Respondents manufacture "Refam which the FDA operates; and/or (c) ascertain the existence of certain facts or things
200mg/5mL Suspension" (Refam) – for the treatment of adults and children suffering upon which the enforcement of RA 3720 depends. In fact, the only purpose of these
from pulmonary and extra-pulmonary tuberculosis. Accordingly, respondents circulars is for the FDA to administer and supervise the implementation of the
engaged the services of the University of the Philippines’ (Manila) Department of provisions of AO 67, s. 1989, including those covering the BA/BE testing
Pharmacology and Toxicology, College of Medicine to conduct BA/BE testing on requirement, consistent with and pursuant to RA 3720. Therefore, the FDA has
Refam, the results of which were submitted to the FDA. In turn, the FDA sent a letter sufficient authority to issue the said circulars and since they would not affect the
to respondents, stating that Refam is "not bioequivalent with the reference drug." This substantive rights of the parties that they seek to govern – as they are not, strictly
notwithstanding, the FDA still revalidated respondents’ CPR for Refam two (2) more speaking, administrative regulations in the first place – no prior hearing, consultation,
times, the second of which came with a warning that no more further revalidations and publication are needed for their validity. In sum, the Court holds that Circular
shall be granted until respondents submit satisfactory BA/BE test results for Refam.
Nos. 1 and 8, s. 1997 are valid issuances and binding to all concerned parties, of the 1997 Rules of Civil Procedure, with prayer for the issuance of a temporary
including the respondents in this case. restraining order and/or writ of preliminary injunction before the Supreme Court.

Holy Spirit Homeowners Association v. Defensor ISSUE:

G.R. No. 163980 Whether or not regular courts have jurisdiction to decide upon the validity or
3 August 2006 constitutionality of a rule or regulation issued by the administrative agency in the
performance of its quasi-legislative function.
DOCTRINE:
Where what is assailed is the validity or constitutionality of a rule or RULING:
regulation issued by the administrative agency in the performance of its quasi- Yes, the Court held that where what is assailed is the validity or
legislative function, the regular courts have jurisdiction to pass upon the same. constitutionality of a rule or regulation issued by the administrative agency in
the performance of its quasi-legislative function, the regular courts have
FACTS: jurisdiction to pass upon the same.
Petitioner Holy Spirit Homeowners Association, located at the West Side of Administrative agencies possess quasi-legislative or rule-making powers and
the National Government Center (NGC), seeks to prevent respondents from quasi- judicial or administrative adjudicatory powers. Quasi-legislative or rule-making
enforcing the implementing rules and regulations (IRR) of Republic Act No. 9207, power is the power to make rules and regulations which results in delegated
otherwise known as the "National Government Center (NGC) Housing and Land legislation that is within the confines of the granting statute and the doctrine of non-
Utilization Act of 2003." Named respondents are the ex-officio members of the delegability and separability of powers.
National Government Center Administration Committee. In questioning the validity or constitutionality of a rule or regulation
Prior to the passage of R.A. No. 9207, a number of presidential issuances issued by an administrative agency, a party need not exhaust administrative
authorized the creation and development of what is now known as the NGC. Former remedies before going to court. This principle, however, applies only where the
President Marcos issued Proclamation No. 1826, reserving a parcel of land in act of the administrative agency concerned was performed pursuant to its
Constitution Hills, Quezon City, covering a little over 440 hectares as a national quasi-judicial function, and not when the assailed act pertained to its rule-
government site to be known as the NGC. Former President Aquino issued making or quasi-legislative power.
Proclamation No. 137, excluding 150 of the 440 hectares of the reserved site from The assailed IRR was issued pursuant to the quasi-legislative power of the
the coverage of Proclamation No. 1826 and authorizing instead the disposition of the Committee expressly authorized by R.A. No. 9207. The petition rests mainly on the
excluded portion by direct sale to the bona fide residents therein. Former President theory that the assailed IRR issued by the Committee is invalid on the ground that it
Ramos issued Proclamation No. 248, authorizing the vertical development of the is not germane to the object and purpose of the statute it seeks to implement. Where
excluded portion to maximize the number of families who can effectively become what is assailed is the validity or constitutionality of a rule or regulation issued
beneficiaries of the government's socialized housing program. by the administrative agency in the performance of its quasi-legislative
President Macapagal-Arroyo signed into law R.A. No. 9207. The Committee function, the regular courts have jurisdiction to pass upon the same.
formulated the Implementing Rules and Regulations (IRR) of R.A. No. 9207. Since the regular courts have jurisdiction to pass upon the validity of the
Petitioners, in assailing that Sections 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 assailed IRR issued by the Committee in the exercise of its quasi-legislative power,
(C.1) are inconsistent with R.A. No. 9207, filed a petition for prohibition under Rule 65 the judicial course to assail its validity must follow the doctrine of hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial Courts have
concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction, such concurrence does not give the
petitioner unrestricted freedom of choice of court forum.
True, this Court has the full discretionary power to take cognizance of the
petition 􏰁led directly with it if compelling reasons, or the nature and importance of the
issues raised, so warrant. A direct invocation of the Court's original jurisdiction to
issue these writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition. In Heirs of Bertuldo
Hinog v. Melicor, the Court said that it will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts, and exceptional and
compelling circumstances, such as cases of national interest and of serious
implications, justify the availment of the extraordinary remedy of writ of certiorari,
calling for the exercise of its primary jurisdiction.
A perusal, however, of the petition for prohibition shows no compelling,
special or important reasons to warrant the Court's taking cognizance of the petition
in the first instance. Petitioner also failed to state any reason that precludes the lower
courts from passing upon the validity of the questioned IRR. Moreover, as provided in
Section 5, Article VIII of the Constitution, the Court's power to evaluate the validity of
an implementing rule or regulation is generally appellate in nature. Thus, following
the doctrine of hierarchy of courts, the instant petition should have been initially filed
with the Regional Trial Court.
WHEREFORE, the instant petition for prohibition is DISMISSED. Costs
against petitioners.
SO ORDERED.
Landbank of the Philippines v. Court of Appeals Private respondents Heirs of Emiliano Santiago allege that the heirs of Emiliano F.
G.R. No. 118712 Santiago are the owners of a parcel of land located at Laur, NUEVA ECIJA; that in
6 October 1995 November and December 1990, without notice to the petitioners, the Landbank
DOCTRINE: Administrative regulations cannot extend the law and amend a required and the beneficiaries executed Actual tillers Deed of Undertaking to pay
legislative enactment, for settled is the rule that administrative regulations must be in rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the
harmony with the provisions of the law. In the present suit, the DAR clearly net harvest; that on 24 October 1991 the DAR Regional Director issued an order
overstepped the limits of its power to enact rules and regulations when it issued directing the Landbank to pay the landowner directly or through the
Administrative Circular No. 9. There is no basis in allowing the opening of a trust establishment of a trust fund in the amount of P135,482.12, that on 24 February
account in behalf of the landowner as compensation for his property because, as 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F.
heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must Santiago.
be made only in "cash" or in "LBP bonds".
Private respondents argued that Administrative Order No. 9, Series of 1990 was
FACTS: issued without jurisdiction and with grave abuse of discretion because it
Private respondents are landowners whose landholdings were acquired by the DAR permits the opening of trust accounts by the Landbank, in lieu of depositing in
and subjected to transfer schemes to qualified beneficiaries under the cash or bonds in an accessible bank designated by the DAR, the compensation
Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657). Private for the land before it is taken and the titles are cancelled as provided under Section
respondents questioned the validity of DAR Administrative Order No. 6, Series of 16(e) of RA 6657. Private respondents also assail the fact that the DAR and the
19926 and DAR Administrative Order No. 9, Series of 1990, and sought to compel Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in
the DAR to expedite the pending summary administrative proceedings to finally their names as landowners despite the clear mandate that before taking possession
determine the just compensation of their properties, and the Landbank to deposit in of the property, the compensation must be deposited in cash or in bonds.
cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in
trust accounts" for private respondents, and to allow them to withdraw the same. Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid
exercise of its rule-making power pursuant to Section 49 of RA 6657.
Private respondent Pedro Yap alleges that "(o)n 4 September 1992 the transfer
certificates of title (TCTs) of private respondent Yap were totally cancelled by the ISSUE: Whether or not the DAR committed grave abuse of discretion when it issued
Registrar of Deeds of Leyte and were transferred in the names of farmer Administrative Circular No. 9 -- YES
beneficiaries collectively, based on the request of the DAR together with a
RULING:
certification of the Landbank that the sum of P735,337.77 and P719,869.54 have
Petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657
been earmarked for Landowner Pedro L. Yap for the parcels of lands covered by
referred merely to the act of depositing and in no way excluded the opening of a trust
TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563 and TC-
account as a form of deposit. Thus, in opting for the opening of a trust account as the
562, respectively, in the names of listed beneficiaries without notice to private
acceptable form of deposit through Administrative Circular No. 9, petitioner DAR did
respondent Yap and without complying with the requirement of Section 16 (e) of
not commit any grave abuse of discretion since it merely exercised its power to
RA 6657 to deposit the compensation in cash and Landbank bonds in an
promulgate rules and regulations in implementing the declared policies of RA 6657.
accessible bank.
The contention is untenable. Section 16(e) of RA 6657 provides as follows:
 Sec. 16. Procedure for Acquisition of Private Lands — basis in allowing the opening of a trust account in behalf of the landowner as
compensation for his property because, as heretofore discussed, Section 16(e)
xxx xxx xxx of RA 6657 is very specific that the deposit must be made only in "cash" or in
"LBP bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-
(e) Upon receipt by the landowner of the corresponding payment or,
A and 54 because these implementing regulations cannot outweigh the clear
in case of rejection or no response from the landowner, upon the
provision of the law. Respondent court therefore did not commit any error in striking
deposit with an accessible bank designated by the DAR of the
down Administrative Circular No. 9 for being null and void.
compensation in cash or in LBP bonds in accordance with this
Act, the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. . . .
(emphasis supplied)

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

The conclusive effect of administrative construction is not absolute. Action of an

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

In the present suit, the DAR clearly overstepped the limits of its power to enact
rules and regulations when it issued Administrative Circular No. 9. There is no
Commissioner of Internal Revenue v. Court of Appeals ISSUE: Whether or not the position taken by the Commissioner coincides with the
G.R. No. 108358 meaning and intent of executive Order No. 41.
20 January 1995
RULING: NO. The authority of the Minister of Finance (now the Secretary of
Finance), in conjunction with the Commissioner of Internal Revenue, to promulgate
DOCTRINE: Administrative issuances must not override, but must remain all needful rules and regulations for the effective enforcement of internal revenue
consistent and in harmony with, the law they seek to apply and implement. laws cannot be controverted. Neither can it be disputed that such rules and
Administrative rules and regulations are intended to carry out, neither to regulations, as well as administrative opinions and rulings, ordinarily should deserve
supplant nor to modify, the law. Where the executive orders fail or intended to weight and respect by the courts. Much more fundamental than either of the above,
omit certain period from the coverage of amnesty, it is that the executive order however, is that all such issuances must not override, but must remain consistent
has been designed to be in the nature of a general grant of tax amnesty subject and in harmony with, the law they seek to apply and implement. Administrative rules
only to the cases specifically excepted by it. Therefore, no memorandum by the and regulations are intended to carry out, neither to supplant nor to modify, the law.
Commissioner shall exclude a period from the coverage of amnesty where the
EO did not intend to do so. We agree with both the court of Appeals and court of Tax Appeals that Executive
Order No. 41 is quite explicit and requires hardly anything beyond a simple
application of its provisions. It reads:

FACTS: On 22 August 1986, Executive Order No. 41 was promulgated declaring a “Sec. 1. Scope of Amnesty. — A one-time tax amnesty covering unpaid income taxes
one-time tax amnesty on unpaid income taxes, for the taxable years 1981 to 1985. for the years 1981 to 1985 is hereby declared.”
Availing itself of the amnesty, respondent R.O.H. Auto Products Philippines, Inc.,
filed, in October 1986 and November 1986, its Tax Amnesty Return No. 34-F-00146- The period of the amnesty was later extended to 05 December 1986 from 31 October
41 and Supplemental Tax Amnesty Return No. 34-F-00146-64-B, respectively, and 1986 by Executive Order No. 54, dated 04 November 1986, and, its coverage
paid the corresponding amnesty taxes due. Prior to this availment, petitioner CIR, in expanded, under Executive Order No. 64, dated 17 November 1986, to include
a communication received by private respondent on 13 August 1986, assessed the estate and honors taxes and taxes on business. If, as the Commissioner argues,
latter deficiency income and business taxes for its fiscal years ended 30 September Executive Order No. 41 had not been intended to include 1981-1985 tax liabilities
1981 and 30 September 1982 in an aggregate amount of P1,410,157.71. The already assessed (administratively) prior to 22 August 1986, the law could have
taxpayer wrote back to state that since it had been able to avail itself of the tax simply so provided in its exclusionary clauses. It did not. The conclusion is
amnesty, the deficiency tax notice should forthwith be cancelled and withdrawn. The unavoidable, and it is that the executive order has been designed to be in the nature
request was denied by the Commissioner, on the ground that Revenue M.O. No. 4- of a general grant of tax amnesty subject only to the cases specifically excepted by it.
87, dated 09 February 1987, implementing Executive Order No. 41, had construed
the amnesty coverage to include only assessments issued by the BIR after the
promulgation of the executive order on 22 August 1986 and not to assessments
theretofore made. Private respondent appealed the Commissioner's denial to the
Court of Tax Appeals which ruled for the taxpayer. On appeal by the Commissioner
to the Court of Appeals, the decision of the tax court was affirmed.
Commissioner of Internal Revenue v. Court of Appeals
G.R. No. 119761 ii. More’ to ‘Premium More
9 August 1996 b. Meanwhile, ‘Champion’ was an original Fortune Tobacco
Corporation register and therefore a local brand.
DOCTRINES c. Ad Valorem taxes were imposed on these brands.
1. The CIR may not disregard legal requirements or applicable principles in the 3. Later, RA 7654 was enacted. It amended Section 142(c)(1) of the National
exercise of its quasi-legislative powers. Internal Revenue Code1(NIRC).
2. When an administrative rule is merely interpretative in nature, its applicability 4. About a month after the enactment and two (2) days before the effectivity of
needs nothing further than its bare issuance for it gives no real consequence more RA 7654, Revenue Memorandum Circular No. 37–932 (“RMC 37–93"), was issued
than what the law itself has already prescribed. When, upon the other hand, the by the BIR. RMC 37–93 has the following implications:
administrative rule goes beyond merely providing for the means that can facilitate or a. The test for imposition of the 55% ad valorem tax on cigarettes is that:
render least cumbersome the implementation of the law but substantially adds to or i. The locally manufactured cigarettes
increases the burden of those governed, it behooves the agency to accord at least to bear a foreign brand regardless of whether or not the right to use or
those directly affected a chance to be heard, and thereafter to be duly informed, title to the foreign brand was sold or transferred by its owner to the
before that new issuance is given the force and effect of law. local manufacturer. The brand must be originally owned by a foreign
manufacturer or producer.
PETITIONER: COMMISSIONER OF INTERNAL REVENUE ii. If ownership of the cigarette brand
RESPONDENTS: is, however, not definitely determinable, the listing of brands
1. HON. COURT OF APPEALS
2. HON. COURT OF TAX APPEALS
1 "(c) Cigarettes packed by machine.—There shall be levied, assessed and collected on cigarettes
3. FORTUNE TOBACCO CORPORATION packed by machine a tax at the rates prescribed below based on the constructive manufacturer’s
wholesale price or the actual manufacturer’s wholesale price, whichever is higher:
“(1) On locally manufactured cigarettes which are currently classified and taxed at fifty-five percent (55%)
NATURE: PETITION for review of a decision of the Court of Appeals or the exportation of which is not authorized by contract or otherwise, fifty-five (55%) provided that the
FACTS minimum tax shall not be less than Five Pesos (P5.00) per pack.
1. Fortune Tobacco is engaged in the manufacture of different brands of “(2) On other locally manufactured cigarettes, forty-five percent(45%) provided that the minimum tax shall
cigarettes. not be less than Three Pesos (P3.00) per pack

a. The cigarettes include “Champion,” “Hope,” and “More”.

b. Separate certificates of trademark registration were issued by the 2 SUBJECT: Reclassification of Cigarettes Subject to Excise Tax
TO : All Internal Revenue Officers and Others Concerned
Philippine Patent Office over said cigarettes.
“In view of the issues raised on whether ‘HOPE/ ‘MORE' and‘ CHAMPION' cigarettes which are locally
2. Then Commissioner of Internal Revenue Bienvenido A. Tan, Jr sent a letter to manufactured are appropriately considered as locally manufactured cigarettes bearing a foreign brand, this
the deputy of PCGG that “the initial position of the Commission was to classify Office is compelled to review the previous rulings on the matter.
‘Champion,’ ‘Hope,’ and ‘More’ as foreign brands since they were listed in the World
“Section 142(c)(1) National Internal Revenue Code, as amended by RA. No. 6956, provides: ‘On locally
Tobacco Directory as belonging to foreign companies.
manufactured cigarettes bearing a foreign brand, fifty-five percent (55%): Provided, That this rate shall
a. However, Fortune Tobacco changed the names of their cigarettes, apply regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its
thereby removing them from the foreign brand category. owner to the local manufacturer. Whenever it has to be determined whether or not a cigarette bears a
i. ‘Hope’ to ‘Hope Luxury’ foreign brand, the listing of brands manufactured in foreign countries appearing in the current
World Tobacco Directory shall govern.’
 manufactured in foreign countries appearing in the current World disregard legal requirements or applicable principles in the exercise of its
Tobacco Directory shall govern. quasi-legislative powers.
b. In the list of the World Tobacco Directory, the real manufacturers of the
three said brands are not indicated. All three of them mostly included foreign There are two kinds of administrative issuances—legislative rule and an
manufacturers. interpretative rule. To distinguish:
i. ‘HOPE,' ‘MORE' and ‘CHAMPION' i. A legislative rule is in the nature of subordinate legislation, designed to
being manufactured by Fortune Tobacco Corporation are hereby implement a primary legislation by providing the details thereof. Since laws must
considered locally manufactured cigarettes bearing a foreign brand have the benefit of public hearing, it is generally required that before a legislative rule
subject to the 55% ad valorem tax on cigarettes. is adopted there must be hearing.
5. Fortune Tobacco requested for the recall of RMC 37–93. NEVERTHELESS, a. Administrative Code of 1987 provides: Public Participation.—
CIR still assessed Fortune Tobacco for ad valorem tax deficiency amounting to If not otherwise required by law, an agency shall, as far as
P9,598,334.00 practicable, publish or circulate notices of proposed rules and afford
6. The ruling of the other courts are the following: interested parties the opportunity to submit their views prior to the
a. CTA - Upheld the position of Fortune Tobacco. ‘HOPE,' ‘MORE' and adoption of any rule.
‘CHAMPION’ are still classified as other locally manufactured cigarettes and
taxed at 45% or 20% as the case may be. (2) In the fixing of rates, no rule or final order shall be valid unless
b. CA – Affirmed CTA’s ruling. Hence, the instant petition. the proposed rates shall have been published in a newspaper of
i. In fine, petitioner opines that RMC general circulation at least two (2) weeks before the first hearing
37–93 is merely an interpretative ruling of the BIR which can thus thereon.
become effective without any prior need for notice and hearing nor (3) In case of opposition, the rules on contested cases shall be
publication, and that its issuance is not discriminatory since it would observed.
apply under similar circumstances to all locally manufactured ii. Interpretative rules are designed to provide guidelines to the law which
cigarettes. the administrative agency is in charge of enforcing.

ISSUE When an administrative rule is merely interpretative in nature, its applicability

WON RMC 37–93 is merely an interpretative ruling of the BIR—NO needs nothing further than its bare issuance for it gives no real consequence more
than what the law itself has already prescribed. When, upon the other hand, the
RULING administrative rule goes beyond merely providing for the means that can
NO, RMC 37-93 is not merely an interpretative ruling. facilitate or render least cumbersome the implementation of the law but substantially
adds to or increases the burden of those governed, it behooves the agency to accord
Petitioner stresses on the wide and ample authority of the BIR in the issuance of at least to those directly affected a chance to be heard, and thereafter to be duly
rulings for the effective implementation of the provisions of the National Internal informed, before that new issuance is given the force and effect of law.
Revenue Code. Let it be made clear that such authority of the Commissioner is not
here doubted. Like any other government agency, HOWEVER, the CIR may not RMC 37–93 cannot be viewed simply as a corrective measure (revoking in the
process the previous holdings of past Commissioners) or merely as construing
Section 142(c) (1) of the NIRC, as amended, but has, in fact and most importantly,
been made in order to place “Hope Luxury,” “Premium More” and “Champion” within
the classification of locally manufactured cigarettes bearing foreign brands and to
thereby have them covered by RA 7654. Without RMC 37–93, the enactment of RA
7654, would have had no new tax rate consequence on private respondent’s
products.

In order to place “Hope Luxury,” “Premium More,” and “Champion” cigarettes within
the scope of the amendatory law and subject them to an increased tax rate, the now
disputed RMC 37–93 had to be issued. In so doing, the BIR not simply interpreted
the law; verily, it legislated under its quasi-legislative authority. The due observance
of the requirements of notice, of hearing, and of publication should not have
been then ignored.

RMC 37–93 might have likewise infringed on uniformity of taxation. RMC 37–93
would only apply to “Hope Luxury,” “Premium More” and “Champion” cigarettes.

All taken, the Court is convinced that the hastily promulgated RMC 37–93 has fallen
short of a valid and
effective administrative issuance.

WHEREFORE, the decision of the Court of Appeals, sustaining that of the

Court of Tax Appeals, is AFFIRMED.
Cruz v. Youngberg advisable or if decease among foreign cattle has ceased to be a menace to
56 Phil. 234 the agriculture and live stock of the lands.

DOCTRINE: Act No. 3052 reads as follows:

The true distinction, therefore, is between the delegation of power to make SECTION 1. Section seventeen hundred and sixty-two of Act
the law, which necessarily involves a discretion as to what it shall be, and conferring Numbered Twenty-seven hundred and eleven, known as the Administrative
an authority or discretion as to its execution, to be exercised under and in pursuance Code, is hereby amended to read as follows:
of the law. The first cannot be done; to the latter no valid objection can be made. "SEC. 1762. Bringing of animals imported from foreign
countries into the Philippine Islands. — It shall be unlawful for any
FACTS: person or corporation to import, bring or introduce live cattle into the
Petitioner brought a petition before the Court of First Instance (CFI) for the Philippine Islands from any foreign country. The Director of
issuance of a writ of mandatory injunction against the respondent who is the Director Agriculture may, with the approval of the head of the department first
of the Bureau of Animal Industry, requiring him to issue a permit for the landing of ten had, authorize the importation, bringing or introduction of various
large cattle imported by the petitioner and for the slaughter thereof. Petitioner classes of thoroughbred cattle from foreign countries for breeding the
assailed the constitutionality of Act No. 3155, which at present prohibits the same to the native cattle of these Islands, and such as may be
importation of cattle from foreign countries into the Philippine Islands. He asserted necessary for the improvement of the breed, not to exceed five
that the sole purpose of the enactment was to prevent the introduction of cattle hundred head per annum: Provided, however, That the Director of
diseases in the country. The respondent demurred to the petition, contending that the Agriculture shall in all cases permit the importation, bringing or
petition did not state facts sufficient to constitute a cause of action. The demurrer was introduction of draft cattle and bovine cattle for the manufacture of
based on two reasons: (1) that if Act No. 3155 was declared unconstitutional and serum: Provided, further, That all live cattle from foreign countries
void, the petitioner would not be entitled to the relief demanded because Act No. the importation, bringing or introduction of which into the Islands is
3052 would automatically become effective and would prohibit the respondent from authorized by this Act, shall be submitted to regulations issued by
giving the permit prayed for; and (2) that Act No. 3155 was constitutional and, the Director of Agriculture, with the approval of the head of the
therefore, valid. department, prior to authorizing its transfer to other provinces.
The CFI dismissed the complaint because of petitioner’s failure to file another "At the time of the approval of this Act, the Governor-General shall
complaint. The petitioner appealed to the Supreme Court. issue regulations and others to provide against a raising of the price
Act No. 3155 reads as follows: of both fresh and refrigerated meat. The Governor-General also may,
SECTION 1. After March thirty-first, nineteen hundred and twenty- by executive order, suspend, this prohibition for a fixed period in
five existing contracts for the importation of cattle into this country to the case local conditions require it."
contrary notwithstanding, it shall be strictly prohibited to import, bring or ISSUE:
introduce into the Philippine Islands any cattle from foreign countries: Whether or not the power given by Act No. 3155 to the Governor-General to
Provided, however, That at any time after said date, the Governor-General, suspend or not, at his discretion, the prohibition provided in the act constitutes an
with the concurrence of the presiding officers of both Houses, may raise such unlawful delegation of the legislative powers.
prohibition entirely or in part if the conditions of the country make this HELD:
 NO. As shown in paragraph 8 of the amended petition, the Legislature
passed Act No. 3155 to protect the cattle industry of the country and to prevent the
introduction of cattle diseases through importation of foreign cattle. It is now generally
recognized that the promotion of industries affecting the public welfare and the
development of the resources of the country are objects within the scope of the police
power (12 C.J., 927; 6 R.C.L., 203-206 and decisions cited therein; Reid vs.
Colorado, 187 U.S., 137, 147, 152; Yeazel vs. Alexander, 58 Ill., 254). In this
connection it is said in the case of Punzalan vs. Ferriols and Provincial Board of
Batangas (19 Phil., 214), that the provisions of the Act of Congress of July 1, 1902,
did not have the effect of denying to the Government of the Philippine Islands the
right to the exercise of the sovereign police power in the promotion of the general
welfare and the public interest. The facts recited in paragraph 8 of the amended
petition shows that at the time the Act No. 3155 was promulgated there was
reasonable necessity therefor and it cannot be said that the Legislature exceeded its
power in passing the Act. That being so, it is not for this court to avoid or vacate the
Act upon constitutional grounds nor will it assume to determine whether the
measures are wise or the best that might have been adopted. (6 R.C.L., 243 and
decisions cited therein.)
Judge Ranney of the Ohio Supreme Court in Cincinnati, Wilmington and
Zanesville Railroad Co. vs. Commissioners of Clinton County (1 Ohio St., 77, 88)
said in such case:
The true distinction, therefore, is between the delegation of power to make
the law, which necessarily involves a discretion as to what it shall be, and conferring
an authority or discretion as to its execution, to be exercised under and in pursuance
of the law. The first cannot be done; to the latter no valid objection can be made.
Romulo Mabanta v. Home Development Mutual Fund 7742 did not amend nor repeal Section 19 of P.D. No. 1752 but merely implement the
G.R. No. 131082 law.
19 June 2000
DOCTRINE: Petitioner’s appeal with the HDMF Board of Trustees was denied for having been
rendered moot and academic by Board Resolution No. 1208 Series of 1996,
Administrative issuances must not override, supplant or modify the law, but must removing the availment of waiver of the mandatory coverage of the Pag-IBIG Fund,
remain consistent with the law they intend to carry out. Only Congress can repeal or except for distressed employers. Hence, petitioner filed a Petition for Review before
amend the law. the CA. On motion by HDMF, the CA dismissed the petition on the ground that the
coverage of employers and employees under the Home Development Mutual Fund is
FACTS: mandatory in character. There is no allegation that petitioner is a distressed employer
to warrant its exemption from the Fund coverage. As to the amendments to the Rules
Section 19 of P.D. No. 1752, otherwise known as the “Home Development and Regulations Implementing R.A. No. 7742, the same are valid. Under P.D. No.
Mutual Fund Law of 1980” as amended by R.A. No. 7742, provides that an employer 1752 and R.A. No. 7742 the Board of Trustees of the HDMF is authorized to
and/or employee-group who have their own provident and/or employee-housing promulgate rules and regulations, as well as amendments thereto, concerning the
plans, may register with the Fund, for annual certification of waiver or suspension extension, waiver or suspension of coverage under the Pag-IBIG Fund. And the
from coverage or participation in the Fund. Pursuant to the said provision, petitioner publication requirement was amply met, since the questioned amendments were
Romulo, Mabanta, Buenaventura, Sayoc and De Los Angeles, a law firm, was published in the 21 October 1995 issue of the Philippine Star, which is a newspaper
exempted for the period 1 January to 31 December 1995 from the Pag-IBIG Fund of general circulation. Petitioner’s MR was denied.
coverage by respondent Home Development Mutual Fund (HDMF) because of a
superior retirement plan. On 1 September 1995, the HDMF Board of Trustees, Hence, petitioner filed the present petition. It contends that the subject 1995
pursuant R.A. No. 7742, issued Board Resolution No. 1011, Series of 1995, Amendments issued by HDMF are inconsistent with the enabling law, P.D. No. 1752,
amending and modifying the Rules and Regulations Implementing R.A. No. 7742. As as amended by R.A. No. 7742, which merely requires as a pre-condition for
amended, Section 1 of Rule VII provides that for a company to be entitled to a waiver exemption from coverage the existence of either a superior provident/retirement plan
or suspension of Fund coverage, it must have a plan providing for both or a superior housing plan, and not the concurrence of both plans. Hence,
provident/retirement and housing benefits superior to those provided under the Pag- considering that petitioner has a provident plan superior to that offered by the HDMF,
IBIG Fund. it is entitled to exemption from the coverage in accordance with Section 19 of P.D.
No. 1752. The 1996 Amendment are also void insofar as they abolished the
On 16 November 1995, petitioner filed with the respondent an application for Waiver exemption granted by Section 19 of P.D. 1752, as amended. The repeal of such
or Suspension of Fund Coverage because of its superior retirement plan. In support exemption involves the exercise of legislative power, which cannot be delegated to
of said application, petitioner submitted to the HDMF a letter explaining that the 1995 HMDF.
Amendments to the Rules are invalid. In a letter, the President and Chief Executive
Officer of HDMF disapproved petitioner’s application on the ground that the On the other hand, the HDMF contends that in promulgating the amendments to the
requirement that there should be both a provident retirement fund and a housing plan rules and regulations which require the existence of a plan providing for both
is clear in the use of the phrase "and/or," and that the Rules Implementing R.A. No. provident and housing benefits for exemption from the Fund Coverage, the
respondent Board was merely exercising its rule-making power under Section 13 of In the present case, when the Board of Trustees of the HDMF required in Section 1,
P.D. No. 1752. Rule VII of the 1995 Amendments to the Rules and Regulations Implementing R.A.
No. 7742 that employers should have both provident/retirement and housing benefits
for all its employees in order to qualify for exemption from the Fund, it effectively
amended Section 19 of P.D. No. 1752. And when the Board subsequently abolished
ISSUE: that exemption through the 1996 Amendments, it repealed Section 19 of P.D. No.
1752. Such amendment and subsequent repeal of Section 19 are both invalid, as
Whether or not the 1995 and 1996 Amendments to the Rules and Regulations they are not within the delegated power of the Board. The HDMF cannot, in the
Implementing R.A. No. 7742 are valid. exercise of its rule-making power, issue a regulation not consistent with the law it
seeks to apply. Indeed, administrative issuances must not override, supplant or
HELD: modify the law, but must remain consistent with the law they intend to carry out. Only
Congress can repeal or amend the law.
NO. It is accordingly ordinarily held that the intention of the legislature in using the
term "and/or" is that the word "and" and the word "or" are to be used interchangeably.

It seems to us clear from the language of the enabling law that Section 19 of P.D. No.
1752 intended that an employer with a provident plan or an employee housing plan
superior to that of the fund may obtain exemption from coverage. If the law had
intended that the employee should have both a superior provident plan and a housing
plan in order to qualify for exemption, it would have used the words "and" instead of
"and/or." Notably, paragraph (a) of Section 19 requires for annual certification of
waiver or suspension that the features of the plan or plans are superior to the fund or
continue to be so. The law obviously contemplates that the existence of either plan is
considered as sufficient basis for the grant of an exemption; needless to state, the
concurrence of both plans is more than sufficient.

It is without doubt that the HDMF Board has rule-making power as provided in
Section 5 of R.A. No. 7742 and Section 13 of P.D. No. 1752. However, it is well-
settled that rules and regulations, which are the product of a delegated power to
create new and additional legal provisions that have the effect of law, should be
within the scope of the statutory authority granted by the legislature to the
administrative agency. It is required that the regulation be germane to the objects and
purposes of the law, and be not in contradiction to, but in conformity with, the
standards prescribed by law.
Lupangco v. Court of Appeals ISSUE/S:
G.R. No. L-77372
29 April 1988 1. Whether or not the Regional Trial Court is of the same category as the
Professional Regulation Commission so that it cannot pass upon the
validity of the administrative acts of the latter? – NO
DOCTRINE: It is an axiom in administrative law that administrative authorities should
not act arbitrarily and capriciously in the issuance of rules and regulations. To be 2. Whether or not Resolution No. 105 was valid. – NO
valid, such rules and regulations must be reasonable and fairly adapted to the end in
view. If shown to bear no reasonable relation to the purposes for which they are RULING:
authorized to be issued, then they must be held to be invalid.
1. In Pineda vs. Lantin, the Court explained that whenever a party is aggrieved
by or disagree with an order or ruling of the Securities and Exchange
FACTS:
Commission, he cannot seek relief from courts of general jurisdiction since
under the Rules of Court and Commonwealth Act No. 83, as amended by
Respondent Professional Regulation Commission (PRC) issued Resolution No. 105 Republic Act No. 635, creating and setting forth the powers and functions of
as parts of its "Additional Instructions to Examiness," to all those applying for the old Securities and Exchange Commission, his remedy is to go the
admission to take the licensure examinations in accountancy. The resolution Supreme Court on a petition for review. Likewise, in Philippine Pacific Fishing
embodied the following pertinent provisions: No examinee shall attend any review Co., Inc. vs. Luna, it was stressed that if an order of the Securities and
class, briefing, conference or the like conducted by, or shall receive any hand-out, Exchange Commission is erroneous, the appropriate remedy take is first,
review material, or any tip from any school, college or university, or any review center within the Commission itself, then, to the Supreme Court as mandated in
or the like or any reviewer, lecturer, instructor official or employee of any of the Presidential Decree No. 902-A, the law creating the new Securities and
aforementioned or similar institutions during the three days immediately preceding Exchange Commission. Nowhere in the said cases was it held that a Court of
every examination day including examination day. Any examinee violating this First Instance has no jurisdiction over all other government agencies. On the
instruction shall be subject to the sanctions prescribed by Sec. 8, Art. III of the Rules contrary, the ruling was specifically limited to the Securities and Exchange
and Regulations of the Commission. Commission.

On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure The respondent court erred when it placed the Securities and Exchange
examinations in accountancy schedule on October 25 and November 2 of the same Commission and the Professional Regulation Commission in the same
year, filed on their own behalf of all others similarly situated like them, with the category. As already mentioned, with respect to the Securities and Exchange
Regional Trial Court of Manila a complaint for injunction with a prayer with the Commission, the laws cited explicitly provide with the procedure that need be
issuance of a writ of a preliminary injunction against respondent PRC to restrain the taken when one is aggrieved by its order or ruling. Upon the other hand,
latter from enforcing the above-mentioned resolution and to declare the same there is no law providing for the next course of action for a party who wants
unconstitutional. Respondent PRC filed a motion to dismiss on the ground that the to question a ruling or order of the Professional Regulation Commission.
lower court had no jurisdiction to review and to enjoin the enforcement of its Unlike Commonwealth Act No. 83 and Presidential Decree No. 902-A, there
resolution. The lower court declared that it had jurisdiction to try the case and is no provision in Presidential Decree No. 223, creating the Professional
enjoined the respondent commission from enforcing and giving effect to Resolution Regulation Commission, that orders or resolutions of the Commission
No. 105 which it found to be unconstitutional. Respondent PRC filed with the Court of are appealable either to the Court of Appeals or to the Supreme Court.
Appeals a petition for the nullification of Order of the lower court which was granted Consequently, the civil case which was filed in order to enjoin the
by the CA. enforcement of a resolution of the respondent Professional Regulation
Commission alleged to be unconstitutional, should fall within the general
 jurisdiction of the Court of First Instance, now the Regional Trial Court. What
is clear from Presidential Decree No. 223 is that the Professional
Regulation Commission is attached to the Office of the President for
general direction and coordination. Well settled in our jurisprudence is
the view that even acts of the Office of the President may be reviewed
by the Court of First Instance (now the Regional Trial Court).

2. Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on
the examinees' right to liberty guaranteed by the Constitution. Respondent
PRC has no authority to dictate on the reviewees as to how they should
prepare themselves for the licensure examinations. They cannot be
restrained from taking all the lawful steps needed to assure the fulfillment of
their ambition to become public accountants. They have every right to make
use of their faculties in attaining success in their endeavors. They should be
allowed to enjoy their freedom to acquire useful knowledge that will promote
their personal growth. As defined in a decision of the United States Supreme
Court: The term "liberty" means more than mere freedom from physical
restraint or the bounds of a prison. It means freedom to go where one may
choose and to act in such a manner not inconsistent with the equal rights of
others, as his judgment may dictate for the promotion of his happiness, to
pursue such callings and vocations as may be most suitable to develop his
capacities, and give to them their highest enjoyment.

Another evident objection to Resolution No. 105 is that it violates the

academic freedom of the schools concerned. Respondent PRC cannot
interfere with the conduct of review that review schools and centers believe
would best enable their enrolees to meet the standards required before
becoming a full fledged public accountant. Unless the means or methods of
instruction are clearly found to be inefficient, impractical, or riddled with
corruption, review schools and centers may not be stopped from helping out
their students.
De Jesus v. Commission on Audit
G.R. No. 109023 In its decision dated January 29, 1993, the COA upheld the validity and effectivity of
12 August 1998 DBM-CCC No. 10 and sanctioned the disallowance of petitioners' honoraria.

DOCTRINE: Following the doctrine enunciated in Tanada, publication in the Official

Gazette or in a newspaper of general circulation in the Philippines is required since ISSUE/S:
DBM-CCC No. 10 is in the nature of an administrative circular the purpose of which is Whether or not DBM-CCC No. 10 has legal force and effect notwithstanding the
to enforce or implement an existing law. Stated differently, to be effective and absence of publication thereof in the Official Gazette.
enforceable, DBM-CCC No. 10 must go through the requisite publication in the
Official Gazette or in a newspaper of general circulation in the Philippines. RULING:
On the need for publication of subject DBM-CCC No. 10, we rule in the affirmative.
FACTS: Following the doctrine enunciated in Tanada, publication in the Official Gazette or in
Petitioners are employees of the Local Water Utilities Administration (LWUA). Prior to a newspaper of general circulation in the Philippines is required since DBM-CCC No.
July 1, 1989, they were receiving honoraria as designated members of the LWUA 10 is in the nature of an administrative circular the purpose of which is to enforce or
Board Secretariat and the Pre-Qualification, Bids and Awards Committee. implement an existing law. Stated differently, to be effective and enforceable, DBM-
CCC No. 10 must go through the requisite publication in the Official Gazette or in a
On July 1, 1989, Republic Act No. 6758 (Rep. Act 6758), entitled "An Act Prescribing newspaper of general circulation in the Philippines.
A Revised Compensation and Position Classification System in the Government and
For Other Purposes", took effect. Section 12 of said law provides for the In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, which
consolidation of allowances and additional compensation into standardized salary completely disallows payment of allowances and other additional compensation to
rates. Certain additional compensations, however, were exempted from government officials and employees, starting November 1, 1989, is not a mere
consolidation. interpretative or internal regulation.

To implement Rep. Act 6758, the Department of Budget and Management (DBM)
issued Corporate Compensation Circular No. 10 (DBM-CCC No. 10), discontinuing
without qualification effective November 1, 1989, all allowances and fringe benefits
granted on top of basic salary. Pursuant to the aforesaid Law and Circular,
respondent Leonardo Jamoralin, as corporate auditor, disallowed on post audit, the
payment of honoraria to the herein petitioners.

Aggrieved, petitioners appealed to the COA, questioning the validity and

enforceability of DBM-CCC No. 10. More specifically, petitioners contend that DBM-
CCC No. 10 is inconsistent with the provisions of Rep. Act 6758 (the law it is
supposed to implement) and, therefore, void. And it is without force and effect
because it was not published in the Official Gazette; petitioners stressed.
People v. Maceren NO.
G.R. No. L-32166 The court held that the that the Secretary of Agriculture and Natural Resources and
18 October 1977 the Commissioner of Fisheries exceeded their authority in issuing Fisheries
Administrative Orders Nos. 84 and 84-1 and that those orders are not warranted
DOCTRINE: The lawmaking body cannot delegate to an executive official the power under the Fisheries Commission, Republic Act No. 3512.
to declare what acts should constitute an offense. It can authorize the issuance of
regulations and the imposition of the penalty provided for in the law itself. The reason is that the Fisheries Law does not expressly prohibit electro fishing. As
Administrative regulations adopted under legislative authority by a particular electro fishing is not banned under that law, the Secretary of Agriculture and Natural
department must be in harmony with the provisions of the law, and should be for the Resources and the Commissioner of Fisheries are powerless to penalize it. In other
sole purpose of carrying into effect its general provisions words, Administrative Orders Nos. 84 and 84-1, in penalizing electro fishing, are
devoid of any legal basis.
FACTS: This is a case involving the validity of a 1967 regulation, penalizing electro
fishing in fresh water fisheries, promulgated by the Secretary of Agriculture and Had the lawmaking body intended to punish electro fishing, a penal provision to that
Natural Resources and the Commissioner of Fisheries under the old Fisheries Law effect could have been easily embodied in the old Fisheries Law. Administrative
and the law creating the Fisheries Commission. regulations adopted under legislative authority by a particular department must be in
harmony with the provisions of the law, and should be for the sole purpose of
On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario carrying into effect its general provisions. By such regulations, of course, the law
Aquino and Carlito del Rosario were charged by a Constabulary investigator in the itself cannot be extended to amend or expand the statutory requirements or to
municipal court of Sta. Cruz, Laguna with having violated Fisheries Administrative embrace matters not covered by the statute.
Order No. 84-1.

It was alleged in the complaint that the five accused in the morning of March1,
1969 resorted to electro fishing in the waters of Barrio San Pablo Norte, Sta.
Cruz using a device or equipment to catch fish thru electric current which
thereby destroy any aquatic animals within its current reach, to the detriment
and prejudice of the populace. The municipal court quashed the complaint -- that
electro-fishing cannot be penalized because electric current is not an obnoxious or
poisonous substance as contemplated in section I of the Fisheries Law and that it is
not a substance at all but a form of energy conducted or transmitted by substance.
The CFI affirmed such dismissal. Hence this petition.

ISSUE/S: Whether or not electro-fishing is punishable under the Old Fisheries Law

RULING:
Philippine Consumers Foundation v. Secretary of Education schoolyear in the elementary and secondary levels, and P50.00 per
G.R. No. L-78385 academic unit on a semestral basis for the collegiate level.
31 August 1987

DOCTRINE: Function of prescribing rates by an administrative agency may be either The DECS took note of the report of the Task Force and on the basis of the same,
a legislative or an adjudicative function; DECS Department Order prescribing the the DECS, through the respondent Secretary of Education, Culture and Sports
maximum school fees that may be charged by all private schools is in the exercise of (hereinafter referred to as the respondent Secretary), issued an Order authorizing,
DECS legislative function, and prior notice and hearing not essential to the validity of
inter alia, the 15% to 20% increase in school fees as recommended by the Task
its issuance.
Force. The petitioner sought a reconsideration of the said Order, apparently on the
ground that the increases were too high.2 Thereafter, the DECS issued Department
Power granted to the education department to regulate the educational system of the
country includes the power to prescribe school fees; Authority to fix school fees Order No. 37 dated April 10, 1987 modifying its previous Order and reducing the
considered lodged with the Department of Education increases to a lower ceiling of 10% to 15%, accordingly. 3Despite this reduction, the
petitioner still opposed the increases. On April 23, 1987, the petitioner, through
counsel, sent a telegram to the President of the Philippines urging the suspension of
FACTS: the implementation of Department Order No. 37.

On February 21, 1987, the Task Force on Private Higher Education created by the The petitioner argues that while the DECS is authorized by law to regulate school
Department of Education, Culture and Sports {hereinafter referred to as the DECS) fees in educational institutions, the power to regulate does not always include the
submitted a report entitled "Report and Recommendations on a Policy for Tuition and power to increase school fees.
ISSUE/S: Whether or not the DECS is authorized by law to regulate school fees in
Other School Fees." The report favorably recommended to the DECS the following
educational institutions, does the power to regulate always include the power to
courses of action with respect to the Government's policy on increases in school fees
increase school fees.
for the schoolyear 1987 to 1988—

RULING:
1. Private schools may be allowed to increase its total school fees by Yes. Power granted to the education department to regulate the educational system
not more than 15 per cent to 20 per cent, without the need for the of the country includes the power to prescribe school fees; Authority to fix school
prior approval of the DECS. Schools that wish to increase school fees considered lodged with the Department of Education.—ln the absence of a
fees beyond the ceiling would be subject to the discretion of the statute stating otherwise, this power includes the power to prescribe schools fees. No
DECS; other government agency has been vested with the authority to fix school fees and as
such, the power should be considered lodged with the DECS if it is to properly and
2. Any private school may increase its total school fees in excess of the ceiling,
effectively discharge its functions and duties under the law.
provided that the total schools fees will not exceed P1,000.00 for the
Function of prescribing rates by an administrative agency may be either a legislative Presumption that official duty has been regularly performed; Burden of proof is
or an adjudicative function; DECS Department Order prescribing the maximum
on the party assailing the regularity of official proceedings which was not successfully
school fees that may be charged by all private schools is in the exercise of DECS
disputed.—Under the Rules of Court, it is presumed that official duty has been
legislative function, and prior notice and hearing not essential to the validity of its
issuance.—The function of prescribing rates by an administrative agency may be regularly performed. In the absence of proof to the contrary, that presumption
either a legislative or an adjudicative function. If it were a legislative function, the prevails. This being so, the burden of proof it is on the party assailing the regularity of
grant of prior notice and hearing to the affected parties is not a requirement of due official proceedings. In the case at bar, the petitioner has not successfully disputed
process. As regards rates prescribed by an administrative agency in the exercise of the presumption.
its quasi-judicialfunction, prior notice and hearing are essential to the validity of such
rates. When the rules and/or rates laid down by an administrative agency are meant Supreme Court does not give its judicial imprimature to future increases in
to apply to all enterprises of a given kind throughout the country, they may partake of school fees, which must not be unreasonable and arbitrary.—This Court, however,
a legislative character. Where the rules and the rates imposed apply exclusively to a does not go to the extent of saying that it gives its judicial imprimatur to future
particular party, based upon a finding of fact, then its function is quasi-judicial in increases in school fees. The increases must not be unreasonable and arbitrary so
character. Is Department Order No. 37 issued by the DECS in the exercise of its as to amount to an outrageous exercise of government authority and power. In such
legislative function? We believe so. The assailed Department Order prescribes the an eventuality, this Court will not hesitate to exercise the power of judicial review in
maximum school fees that may be charged by all private schools in the country for its capacity as the ultimate guardian of the Constitution.
schoolyear 1987 to 1988. This being so, prior notice and hearing are not essential to
the validity of its issuance.

Absence of showing of clear and convincing evidence of arbitrariness by DECS

in issuing the department order; The Task Force report created by the DECS as the
basis for its decision to allow an increase in tuition fees was made judiciously.—This
observation notwithstanding, there is a failure on the part of the petitioner to show
clear and convincing evidence of such arbitrariness. As the record of the case
discloses, the DECS is not without any justification for the issuance of the questioned
Department Order. It would be reasonable to assume that the report of the Task
Force created by the DECS, on which it based its decision to allow an increase in
school fees, was made judiciously. Moreover, upon the instance of the petitioner, as
it so admits in its Petition, the DECS had actually reduced the original rates of 15% to
20% down to 10% to 15%, accordingly. Under the circumstances peculiar to this
case, We cannot consider the assailed Department Order arbitrary.