Malaga vs. Penachos (Digest) and the acceptance of their documents.
They also asked
Ma. Elena Malaga, et. al. vs. Manuel R. Penachos, Jr., that if the bidding had already been conducted, the
et.al. defendants be directed not to award the project pending
GR No. 86995 03 resolution of their complaint.
September 1992
On the same date, Judge Lebaquin issued a restraining
Chartered Institution and GOCC, defined. order prohibiting PBAC from conducting the bidding and
award the project. The defendants filed a motion to lift the
FACTS: The Iloilo State College of Fisheries (ISCOF) through restraining order on the ground that the court is prohibited
its Pre-qualifications, Bids and Awards Committee (PBAC) from issuing such order, preliminary injunction and
caused the publication in the November 25, 26 and 28, preliminary mandatory injunction in government
1988 issues of the Western Visayas Daily an Invitation to infrastructure project under Sec. 1 of P.D. 1818. They also
Bid for the construction of a Micro Laboratory Building at contended that the preliminary injunction had become
ISCOF. The notice announced that the last day for the moot and academic as it was served after the bidding had
submission of pre-qualification requirements was on been awarded and closed.
December 2, 1988, and that the bids would be received
and opened on December 12, 1988 at 3 o'clock in the On January 2, 1989, the trial court lifted the restraining
afternoon. order and denied the petition for preliminary injunction. It
declared that the building sought to be constructed at the
Petitioners Malaga and Najarro, doing business under the ISCOF was an infrastructure project of the government
name of BE Construction and Best Built Construction, falling within the coverage of the subject law.
respectively, submitted their pre-qualification documents
at two o'clock in the afternoon of December 2, 1988. ISSUE: Whether or not ISCOF is a government
Petitioner Occeana submitted his own PRE-C1 on December instrumentality subject to the provisions of PD 1818?
5, 1988. All three of them were not allowed to participate
in the bidding as their documents were considered late. RULING: The 1987 Administrative Code defines a
government instrumentality as follows:
On December 12, 1988, the petitioners filed a complaint Instrumentality refers to any agency of the National
with the Iloilo RTC against the officers of PBAC for their Government, not integrated within the department
refusal without just cause to accept them resulting to their framework, vested with special functions or jurisdiction by
non-inclusion in the list of pre-qualified bidders. They law, endowed with some if not all corporate powers,
sought to the resetting of the December 12, 1988 bidding administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes Treasurer of the state college with its accounts and
regulatory agencies, chartered institutions, and expenses to be audited by the Commission on Audit or its
government-owned or controlled corporations. (Sec. 2 (5) duly authorized representative. Third, heads of bureaus
Introductory Provisions). and offices of the National Government are authorized to
loan or transfer to it, upon request of the president of the
The same Code describes a chartered institution thus: state college, such apparatus, equipment, or supplies and
Chartered institution - refers to any agency organized or even the services of such employees as can be spared
operating under a special charter, and vested by law with without serious detriment to public service. Lastly, an
functions relating to specific constitutional policies or additional amount of P1.5M had been appropriated out of
objectives. This term includes the state universities and the funds of the National Treasury and it was also decreed
colleges, and the monetary authority of the state. (Sec. 2 in its charter that the funds and maintenance of the state
(12) Introductory Provisions). college would henceforth be included in the General
Appropriations Law.
It is clear from the above definitions that ISCOF is a
chartered institution and is therefore covered by P.D. 1818. Nevertheless, it does not automatically follow that ISCOF is
covered by the prohibition in the said decree as there are
There are also indications in its charter that ISCOF is a irregularities present surrounding the transaction that
government instrumentality. First, it was created in justified the injunction issued as regards to the bidding and
pursuance of the integrated fisheries development policy of the award of the project (citing the case of Datiles vs.
the State, a priority program of the government to effect Sucaldito).
the socio-economic life of the nation. Second, the Treasurer
of the Republic of the Philippines shall also be the ex-officio
