Chapter 11

Government of the Philippine Islands v. Springer

G.R. No. L-26979, April 1, 1927.

FACTS:

Spinger, Costas and Hilario were elected to be the directors of the Nat'l Coal Company by the
legislative members (Senate President and Speaker of the HoR)  of the committee created by
Acts. No. 2705(Sec 4) and 2822 (Sec 2). The GPI instituted an original action of quo warranto
against the newly appointed directors, assailing the validity of the said acts which provide: "The
voting power of all such stock (in the National Coal Company) owned by the Government of the
Philippine Islands shall be vested exclusively in a committee consisting of the Governor-
General, the President of the Senate, and the Speaker of the House of Representatives."
Reference was made therein that the provisions of the statutes passed by the Phil. Legislature
creating a voting committee or board of control, and enumerating the duties and powers thereof
with respect to certain corporation in which the Philippine Gov is the owner of stock, are
nullities.

ISSUE:

Whether or not the Phil Legislature has the power to appoint officials.

RULING:

Sec.  22 of the Organic Act, "That all executive functions of the government must be directly
under the Governor-General or within one of the executive departments under the supervision
and control of the Governor-General."  At the very least, the performance of duties appurtenant
to membership in the voting committee is an executive function on the Government, which the
Organic Act requires must be subject to the unhampered control of the Government-General. The
administrative domination of a governmentally organized and controlled corporation is clearly
not a duty germane to the law-making power.
Categories: Constitutional Law 1, G.R. No. L-26979
 Ople vs Torres
G.R. No. 127685.  July 23, 1998
Facts: Petitioner Ople prays that the Court invalidate Administrative Order No. 308 entitled
“Adoption of a National Computerized Identification Reference System” on two important
constitutional grounds, viz: one, it is a usurpation of the power of Congress to legislate, and
two, it impermissibly intrudes on our citizenry’s protected zone of privacy.
Issue: Whether or not AO No. 308 is violative of the right to privacy
Held: Yes.
The court prescinds from the premise that the right to privacy is a fundamental right
guaranteed by the Constitution, hence, it is the burden of government to show that A.O. No.
308 is justified by some compelling state interest and that it is narrowly drawn.  A.O. No.
308 is predicated on two considerations:  (1)  the need to provide our citizens and
foreigners with the facility to conveniently transact business with basic service and social
security providers and other government instrumentalities and (2)  the need to reduce, if not
totally eradicate, fraudulent transactions and misrepresentations by persons seeking basic
services.  It is debatable whether these interests are compelling enough to warrant the
issuance of A.O. No. 308.  But what is not arguable is the broadness, the vagueness, the
overbreadth of A.O. No. 308 which if implemented will put our people’s right to privacy in
clear and present danger.

The potential for misuse of the data to be gathered under A.O. No. 308 cannot be
underplayed as the dissenters do.  Pursuant to said administrative order, an individual must
present his PRN everytime he deals with a government agency to avail of basic services
and security. His transactions with the government agency will necessarily be recorded–
whether it be in the computer or in the documentary file of the agency.  The individual’s file
may include his transactions for loan availments, income tax returns, statement of assets
and liabilities, reimbursements for medication, hospitalization, etc.  The more frequent the
use of the PRN, the better the chance of building a huge and formidable information base
through the electronic linkage of the files. The data may be gathered for gainful and useful
government purposes; but the existence of this vast reservoir of personal information
constitutes a covert invitation to misuse, a temptation that may be too great for some of our
authorities to resist.

The right to privacy is one of the most threatened rights of man living in a mass
society.  The threats emanate from various sources– governments, journalists, employers,
social scientists, etc. In the case at bar, the threat comes from the executive branch of
government which by issuing A.O. No. 308 pressures the people to surrender their privacy
by giving information about themselves on the pretext that it will facilitate delivery of basic
services.  Given the record-keeping power of the computer, only the indifferent will fail to
perceive the danger that A.O. No. 308 gives the government the power to compile a
devastating dossier against unsuspecting citizens.
League of Cities v. Comelec

24 SEP
League of Cities v. Comelec

Action:
These are consolidated petitions for prohibition with prayer for the issuance of a writ of preliminary injunction
or temporary restraining order filed by the League of Cities of the Philippines, City of Iloilo, City of Calbayog,
and Jerry P. Treñas assailing the constitutionality of the subject Cityhood Laws and enjoining the Commission
on Elections (COMELEC) and respondent municipalities from conducting plebiscites pursuant to the Cityhood
Laws.

Fact:
During the 11th Congress, Congress enacted into law 33 bills converting 33 municipalities into cities.
However, Congress did not act on bills converting 24 other municipalities into cities.
During the 12th Congress, Congress enacted into law Republic Act No. 9009 (RA 9009), which took effect on
30 June 2001. RA 9009 amended Section 450 of the Local Government Code by increasing the annual income
requirement for conversion of a municipality into a city from P20 million to P100 million. The rationale for the
amendment was to restrain, in the words of Senator Aquilino Pimentel, “the mad rush” of municipalities to
convert into cities solely to secure a larger share in the Internal Revenue Allotment despite the fact that they
are incapable of fiscal independence.

After the effectivity of RA 9009, the House of Representatives of the 12th Congress adopted Joint Resolution
No. 29, which sought to exempt from the P100 million income requirement in RA 9009 the 24 municipalities
whose cityhood bills were not approved in the 11th Congress. However, the 12th Congress ended without the
Senate approving Joint Resolution No. 29.

During the 13th Congress, the House of Representatives re-adopted Joint Resolution No. 29 as Joint
Resolution No. 1 and forwarded it to the Senate for approval. However, the Senate again failed to approve the
Joint Resolution. Following the advice of Senator Aquilino Pimentel, 16 municipalities filed, through their
respective sponsors, individual cityhood bills. The 16 cityhood bills contained a common provision exempting
all the 16 municipalities from the P100 million income requirement in RA 9009.

On 22 December 2006, the House of Representatives approved the cityhood bills. The Senate also approved
the cityhood bills in February 2007, except that of Naga, Cebu which was passed on 7 June 2007. The cityhood
bills lapsed into law (Cityhood Laws) on various dates from March to July 2007 without the President’s
signature.

The Cityhood Laws direct the COMELEC to hold plebiscites to determine whether the voters in each
respondent municipality approve of the conversion of their municipality into a city.

Petitioners filed the present petitions to declare the Cityhood Laws unconstitutional for violation of Section 10,
Article X of the Constitution, as well as for violation of the equal protection clause. Petitioners also lament that
the wholesale conversion of municipalities into cities will reduce the share of existing cities in the Internal
Revenue Allotment because more cities will share the same amount of internal revenue set aside for all cities
under Section 285 of the Local Government Code.

Issue:
The petitions raise the following fundamental issues:
1. Whether the Cityhood Laws violate Section 10, Article X of the Constitution; and
2. Whether the Cityhood Laws violate the equal protection clause.

Held:
We grant the petitions.
The Cityhood Laws violate Sections 6 and 10, Article X of the Constitution, and are thus unconstitutional.

First, applying the P100 million income requirement in RA 9009 to the present case is a prospective, not a
retroactive application, because RA 9009 took effect in 2001 while the cityhood bills became law more than
five years later.

Second, the Constitution requires that Congress shall prescribe all the criteria for the creation of a city in the
Local Government Code and not in any other law, including the Cityhood Laws.

Third, the Cityhood Laws violate Section 6, Article X of the Constitution because they prevent a fair and just
distribution of the national taxes to local government units.

Fourth, the criteria prescribed in Section 450 of the Local Government Code, as amended by RA 9009, for
converting a municipality into a city are clear, plain and unambiguous, needing no resort to any statutory
construction.

Fifth, the intent of members of the 11th Congress to exempt certain municipalities from the coverage of RA
9009 remained an intent and was never written into Section 450 of the Local Government Code.

Sixth, the deliberations of the 11th or 12th Congress on unapproved bills or resolutions are not extrinsic aids in
interpreting a law passed in the 13th Congress.

Seventh, even if the exemption in the Cityhood Laws were written in Section 450 of the Local Government
Code, the exemption would still be unconstitutional for violation of the equal protection clause.
Juanito Mariano v. COMELEC, G.R. No. 118577, March 7, 1995 (Digested
Case)
Re: Based on verifiable indicators of viability/projected capacity

FACTS: Petitioners assailed the constitutionality of RA 7854 which sought to convert the
Municipality of Makati to a Highly Urbanized City to be known as the City of Makati.
Petitioners contend that the special law did not properly identify, in metes and bounds with
technical descriptions, the territorial jurisdiction of Makati; that it attempted to alter or restart
the "three consecutive term" limit for local elective officials; that it increased the legislative
district of Makati only by special law; that the increase in legislative district was not
expressed in the title of the bill; and that the addition of another legislative district in Makati
is not in accord with the population requirement, thus violative of the constitution and the
LGC.

HELD:

(1) WON RA 7854 did not properly identify the land area or territorial jurisdiction of Makati
by metes and bounds, with technical descriptions.

(2) WON it attempted to alter or restart the "three consecutive term" limit for local elective
officials.

(3) WON it is unconstitutional for it increased the legislative district of Makati only by special
law (the Charter in violation of the constitutional provision requiring a general
reapportionment law to be passed by Congress within three (3) years following the return of
every census.

(4) WON it is unconstitutional for the increase in legislative district was not expressed in the
title of the bill.

(5) WON it is unconstitutional for the addition of another legislative district in Makati is not in
accord with Section 5 (3), Article VI of the Constitution for as of the latest survey (1990
census), the population of Makati stands at only 450,000. Said section provides, inter alia,
that a city with a population of at least two hundred fifty thousand (250,000) shall have at
least one representative.

HELD:

(1) No. Petitioners have not demonstrated that the delineation of the land area of the
proposed City of Makati will cause confusion as to its boundaries. We note that said
delineation did not change even by an inch the land area previously covered by Makati as a
municipality. In language that cannot be any clearer, section 2 of RA 7854 stated that, the
city's land area "shall comprise the present territory of the municipality." The court take
judicial notice of the fact that Congress has also refrained from using the metes and bounds
description of land areas of other local government units with unsettled boundary dispute.

(2) No. The requirements before a litigant can challenge the constitutionality of a law are
well delineated. They are: 1) there must be an actual case or controversy; (2) the question
of constitutionality must be raised by the proper party; (3) the constitutional question must
be raised at the earliest possible opportunity; and (4) the decision on the constitutional
question must be necessary to the determination of the case itself. Petitioners have far from
complied with these requirements. The petition is premised on the occurrence of many
contingent events, i.e., that Mayor Binay will run again in this coming mayoralty elections;
that he would be reelected in said elections; and that he would seek re-election for the
same position in the 1998 elections. Considering that these contingencies may or may not
happen, petitioners merely pose a hypothetical issue which has yet to ripen to an actual
case or controversy. Petitioners who are residents of Taguig (except Mariano) are not also
the proper parties to raise this abstract issue. Worse, they hoist this futuristic issue in a
petition for declaratory relief over which this Court has no jurisdiction.

(3) No. The Constitution clearly provides that Congress shall be composed of not more than
two hundred fifty (250) members, "unless otherwise fixed by law". As thus worded, the
Constitution did not preclude Congress from increasing its membership by passing a law,
other than a general reapportionment of the law. This is its exactly what was done by
Congress in enacting R.A. No. 7854 and providing for an increase in Makati's legislative
district. Moreover, to hold that reapportionment can only be made through a general
apportionment law, with a review of all the legislative districts allotted to each local
government unit nationwide, would create an inequitable situation where a new city or
province created by Congress will be denied legislative representation for an indeterminate
period of time.
(4) No. The Constitution does not command that the title of a law should exactly mirror, fully
index, or completely catalogue all its details. it should be sufficient compliance if the title
expresses the general subject and all the provisions are germane to such general subject.

(5) No. Even granting that the population of Makati as of the 1990 census stood at four
hundred fifty thousand (450,000), its legislative district may still be increased since it has
met the minimum population requirement of two hundred fifty thousand (250,000). In fact,
section 3 of the Ordinance appended to the Constitution provides that a city whose
population has increased to more than two hundred fifty thousand (250,000) shall be
entitled to at least one congressional representative.

NATIONAL POWER
CORPORATION vs. PROVINCE
OF LANAO DEL SUR et. al.
G.R. No. 96700 November 19,
1996
NATIONAL POWER
CORPORATION vs. PROVINCE
OF LANAO DEL SUR et. al.
G.R. No. 96700 November 19,
1996
NATIONAL POWER
CORPORATION vs. PROVINCE
OF LANAO DEL SUR et. al.
G.R. No. 96700 November 19,
1996
deliberation and with full
knowledge of all existing ones on
the subject, it is but reasonable to
conclude that in passing a statute
it was not intended to interfere
with or abrogate any former
law relating to same matter, unless
the repugnancy between the two is
not only irreconcilable,
but also clear and convincing, and
flowing necessarily from the
language used, unless the later
act fully embraces the subject
matter of the earlier, or unless the
reason for the earlier act is
beyond peradventure removed.
Hence, every effort must be used
to make all acts stand and if,
by any reasonable construction,
they can be reconciled, the later
act will not operate as a repeal
of the earlier.
As the statutes granting tax
exemption privileges were not
sufficiently repealed, petitioner
remains to be exempt from
payment of taxes, hence, never
became delinquent in the payment
of said taxes to respondent
province, and the latter never
acquired any right to sell nor to
purchase the said properties at
auction
NATIONAL POWER CORPORATION vs. PROVINCE OF LANAO DEL SUR et. al. G.R. No. 96700
November 19, 1996

FACTS:

Petitioner NAPOCOR is the owner of real properties covering its hydroelectric power plant complex
situated in Saguiaran, Lanao del Sur. Petitioner was assessed real estate taxes on said properties
amounting to more than P154 million covering the period from June 14, 1984 to December 31, 1989,
allegedly because petitioner's exemption from realty taxes had been withdrawn by PD 1931. A
demand letter from respondent provincial treasurer was sent to petitioner with a warning that unless
the obligation was settled, legal remedies would be resorted to by the respondent province. Because
of the NAPOCORs failure to pay, the properties were auctioned with the Province of Lanao del Sur
as the sole bidder. NAPOCOR posits that it has never been effectively deprived of its tax and duty
exemption privileges granted under statutes and which, although temporarily withdrawn, were just as
quickly restored, such that at no time did it lose its tax-exempt status. Hence, never did it become
liable for realty taxes, and therefore, the subject properties were wrongfully levied upon and sold at
auction. Anent its tax exempt status, NAPOCOR cites Commonwealth Act No. 120, as amended,
and RA 6395, as amended, which grants its tax and duty exemption privileges. CA 120, which
became effective in 1936, created the NAPOCOR as a non-profit public corporation wholly owned by
the government of the Republic of the Philippines tacked to undertake the development of hydraulic
power and the production of power from other sources. In 1971, RA 6395 revised the charter of the
petitioner. Section 13 thereof, as amended by PD 938, exempted it from the payment of all forms of
taxes, duties, fees, imposts as well as costs and service fees. Respondents contend, among others,
that PD 1177, which took effect on 1977 and was issued for the formulation and implementation of a
national budget, repealed the tax exemption privilege granted the petitioner under RA 6395, by virtue
of the PD's general repealing clause, worded as All laws, decrees, executive orders, rules and
regulations or parts thereof which are inconsistent with the provisions of the Decree are hereby
repealed and/or modified accordingly

ISSUE: Whether or not PD 1177 repealed the tax exemption privilege granted the petitioner under
RA 6395.

NAT
IONAL POWER
CORPORATION vs. PROVINCE
OF LANAO DEL SUR et. al.
G.R. No. 96700 November 19,
1996
NATIONAL POWER
CORPORATION vs. PROVINCE
OF LANAO DEL SUR et. al.
G.R. No. 96700 November 19,
1996
FACTS:
Petitioner NAPOCOR is the
owner of real properties covering
its hydroelectric power
plant complex situated in
Saguiaran, Lanao del Sur.
Petitioner was assessed real estate
taxes
on said properties amounting to
more than P154 million covering
the period from June 14, 1984
to December 31, 1989, allegedly
because petitioner's exemption
from realty taxes had been
withdrawn by PD 1931. A
demand letter from respondent
provincial treasurer was sent
to
petitioner with a warning that
unless the obligation was
settled, legal remedies would
be
resorted to by the respondent
province. Because of the
NAPOCOR’s failure to pay,
the
properties were auctioned with the
Province of Lanao del Sur as the
sole bidder.
NAPOCOR posits that it has
never been effectively
deprived of its tax and duty
exemption privileges granted
under statutes and which, although
temporarily withdrawn, were
just as quickly restored, such that
at no time did it lose its tax-
exempt status. Hence, never did it
become liable for realty taxes, and
therefore, the subject properties
were wrongfully levied upon
and sold at auction
deliberation and with full
knowledge of all existing ones on
the subject, it is but reasonable to
conclude that in passing a statute
it was not intended to interfere
with or abrogate any former
law relating to same matter, unless
the repugnancy between the two is
not only irreconcilable,
but also clear and convincing, and
flowing necessarily from the
language used, unless the later
act fully embraces the subject
matter of the earlier, or unless the
reason for the earlier act is
beyond peradventure removed.
Hence, every effort must be used
to make all acts stand and if,
by any reasonable construction,
they can be reconciled, the later
act will not operate as a repeal
of the earlier.
As the statutes granting tax
exemption privileges were not
sufficiently repealed, petitioner
remains to be exempt from
payment of taxes, hence, never
became delinquent in the payment
of said taxes to respondent
province, and the latter never
acquired any right to sell nor to
purchase the said propertiesction
HELD: It cannot then be successfully argued that petitioner's tax-exempt status was revoked in 1977
by PD 1177. Besides, repeals by implication are not favored, and will not be decreed, unless it is
manifest that the legislature so intended. As laws are presumed to be passed with deliberation and
with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in passing
a statute it was not intended to interfere with or abrogate any former law relating to same matter,
unless the repugnancy between the two is not only irreconcilable, but also clear and convincing, and
flowing necessarily from the language used, unless the later act fully embraces the subject matter of
the earlier, or unless the reason for the earlier act is beyond peradventure removed. Hence, every
effort must be used to make all acts stand and if, by any reasonable construction, they can be
reconciled, the later act will not operate as a repeal of the earlier.As the statutes granting tax
exemption privileges were not sufficiently repealed, petitioner remains to be exempt from payment of
taxes, hence, never became delinquent in the payment of said taxes to respondent province, and the
latter never acquired any right to sell nor to purchase the said properties at auction.

MUNICIPALITY OF SAN JUAN v. CA, GR No. 125183, 1997-09-29

Facts:
On February 17, 1978, then President Ferdinand Marcos issued Proclamation No. 1716
reserving for Municipal Government Center Site Purposes certain parcels of land of the
public domain located in the Municipality of San Juan, Metro Manila.
Considering that the land covered by the above-mentioned proclamation was occupied by
squatters, the Municipality of San Juan purchased an 18-hectare land in Taytay, Rizal as
resettlement center for the said squatters.
After hundreds of squatter families were resettled, the Municipality of San Juan started to
develop its government center
On October 6, 1987, after Congress had already convened on July 26, 1987, former
President Corazon Aquino issued Proclamation No. 164, amending Proclamation No. 1716.
Said amendatory proclamation pertinently reads as follows:... together with other parcels of
land not covered by Proclamation No. 1716 but nevertheless occupied for residential
purposes, open to disposition under the provisions of the Public Land Act,... On June 1,
1988, the Corazon de Jesus Homeowners Association, Inc., one of herein private
respondents, filed with the Regional Trial Court of the National Capital Judicial Region
(Pasig, Branch 159) a petition for prohibition with urgent prayer for restraining order
against... the Municipal Mayor and Engineer of San Juan and the Curator of Pinaglabanan
Shrine, to enjoin them from either removing or demolishing the houses of the association
members who were claiming that the lots they occupied have been awarded to them by
Proclamation No. 164.
the regional trial court dismissed the petition, ruling that the property in question is being
utilized by the Municipality of San Juan for government purposes and thus, the condition set
forth in Proclamation No. 164 is absent.
The appeal before the Court of Appeals was dismissed
This decision became final and the said judgment was duly entered
Disregarding the ruling of the court in this final judgment, private respondents hired a private
surveyor to make consolidation-subdivision plans of the land in question
To prevent DENR from issuing any grant to private respondents, petitioner municipality filed
a petition for prohibition with prayer for issuance of a temporary restraining order and
preliminary injunction against respondent DENR and private respondent Corazon de Jesus
Homeowners Association.
The regional trial court sustained petitioner municipality, enjoining the DENR from disposing
and awarding the parcels of land covered by Proclamation No. 164.
The Court of Appeals reversed,... Petitioner municipality assails the decision of the Court of
Appeals by hammering on the issue of res judicata in view of the fact that an earlier
judgment, which had become final and executory, had already settled the respective rights
of the parties under
Proclamation No. 164.
Issues:
issue of res judicata insofar as the particular area covered by Proclamation No. 164, which
was the subject matter of the earlier case,... Proclamation No. 1716 was... a valid act of
legislation
Proclamation No. 164 is... a valid act of legislation.
Ruling:
The existence of the first three elements can not be disputed. As to identity of parties, we
have ruled that only substantial identity is required and not absolute identity of parties
The addition of public... respondent DENR in the second case will thus be of no moment.
Likewise, there is identity of cause of action... all remain to be the same in both the first and
the second actions despite the fact that in the first action, private respondents were the
plaintiff while in the second action, they were the respondents.
reversal of the decision of the Court of Appeals would be justified
Proclamation No. 1716 was issued by the late President Ferdinand E. Marcos on February
17, 1978 in the due exercise of legislative power vested upon him by Amendment No. 6
introduced in 1976. Being a valid act of legislation, said Proclamation may only be amended
by an... equally valid act of legislation
Proclamation No. 164 is obviously not a valid act of legislation.
President Corazon Aquino took the reigns of power under a revolutionary government. On
March 24, 1986, she issued her... historic Proclamation No. 3, promulgating the Provisional
Constitution, or more popularly referred to as the Freedom Constitution
Under Article II, Section 1 of the Freedom Constitution, the President shall continue to
exercise legislative power until a legislature is elected... and convened under a new
constitution.
Then came the ratification of the draft constitution
When Congress was convened on July 26, 1987, President Aquino lost this legislative
power under the Freedom Constitution
Proclamation No.
164, amending Proclamation No. 1716 was issued on October 6, 1987 when legislative
power was already solely on Congress.
this unauthorized act by... the then president constitutes a direct derogation of the most
basic principle in the separation of powers... we cannot simply close our eyes and rely upon
the principle of the presumption of validity of a... law.
We, therefore, hold that the issuance of Proclamation No. 164 was an invalid exercise of
legislative power. Consequently, said Proclamation is hereby declared NULL and VOID.
WHEREFORE, the appealed decision of the Court of Appeals is hereby SET ASIDE. Public
respondent Department of Environment and Natural Resources is hereby permanently
ENJOINED from enforcing Proclamation No. 164.
Principles:
The basic elements of res judicata are: (a) the former judgment must be final; (b) the court
which rendered it had jurisdiction over the subject matter and the parties; (c) it must be a
judgment on the merits; and (d) there must be between the first and second actions...
identity of parties, subject matter, and cause of action
There is a long standing principle that every statute is presumed to be valid
However, this rests upon the premise that the statute was duly enacted by legislature.
This... presumption cannot apply when there is clear usurpation of legislative power by the
executive branch.

LA BUGAL B’LAAN TRIBAL ASSOCIATION INC., et. al. v. V. O. RAMOS,

Secretary Department of Environment and Natural Resources; H. RAMOS, Director,
Mines and Geosciences Bureau (MGB-DENR); R. TORRES, Executive Secretary; and
WMC (PHILIPPINES) INC. 

The constitutional provision allowing the President to enter into FTAA is a exception to the
rule that participation in the nation’s natural resources is reserved exclusively to Filipinos.
Provision must be construed strictly against their enjoyment by non-Filipinos.
RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the effectivity of
RA 7942, or on March 30, 1995, the President signed a Financial and Technical
Assistance Agreement (FTAA) with WMCP, a corporation organized under Philippine laws,
covering close to 100,000 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur
and North Cotabato. On August 15, 1995, the Environment Secretary Victor Ramos issued
DENR Administrative Order 95-23, which was later repealed by DENR Administrative
Order 96-40, adopted on December 20, 1996.
Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the
government and WMCP be declared unconstitutional on ground that they allow fully foreign
owned corporations like WMCP to exploit, explore and develop Philippine mineral resources
in contravention of Article XII Section 2 paragraphs 2 and 4 of the Charter.
In January 2001, WMC – a publicly listed Australian mining and exploration company – sold
its whole stake in WMCP to Sagittarius Mines, 60% of which is owned by Filipinos while
40% of which is owned by Indophil Resources, an Australian company. DENR approved the
transfer and registration of the FTAA in Sagittarius‘ name but Lepanto Consolidated assailed
the same. The latter case is still pending before the Court of Appeals.
EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to
accept, consider and evaluate proposals from foreign owned corporations or foreign investors
for contracts or agreements involving wither technical or financial assistance for large scale
exploration, development and utilization of minerals which upon appropriate
recommendation of the (DENR) Secretary, the President may execute with the foreign
proponent. WMCP likewise contended that the annulment of the FTAA would violate a
treaty between the Philippines and Australia which provides for the protection of Australian
investments.
ISSUES:

1. Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-
owned corporations to exploit the Philippine mineral resources. 2. Whether or not the FTAA
between the government and WMCP is a ―service contract that permits fully foreign owned
companies to exploit the Philippine mineral resources.

HELD:

First Issue: RA 7942 is Unconstitutional

RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully
foreign owned corporations to exploit the Philippine natural resources.
Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which states
that ―All lands of the public domain, waters, minerals, coal, petroleum, and other minerals,
coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural resources are owned by the State. The
same section also states that, ―the exploration and development and utilization of natural
resources shall be under the full control and supervision of the State.
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution
authorizing the State to grant licenses, concessions, or leases for the exploration,
exploitation, development, or utilization of natural resources. By such omission, the
utilization of inalienable lands of the public domain through license, concession or lease is
no longer allowed under the 1987 Constitution.
Under the concession system, the concessionaire makes a direct equity investment for the
purpose of exploiting a particular natural resource within a given area.
The concession amounts to complete control by the concessionaire over the country‘s natural
resource, for it is given exclusive and plenary rights to exploit a particular resource at the
point of extraction.
The 1987 Constitution, moreover, has deleted the phrase ―management or other forms of
assistance in the 1973 Charter. The present Constitution now allows only ―technical and
financial assistance. The management and the operation of the mining activities by foreign
contractors, the primary feature of the service contracts was precisely the evil the drafters of
the 1987 Constitution sought to avoid.
The constitutional provision allowing the President to enter into FTAAs is an exception to
the rule that participation in the nation‘s natural resources is reserved exclusively to
Filipinos. Accordingly, such provision must be construed strictly against their enjoyment by
non-Filipinos. Therefore, RA 7942 is invalid insofar as the said act authorizes service
contracts. Although the statute employs the phrase ―financial and technical agreements in
accordance with the 1987 Constitution, its pertinent provisions actually treat
these agreements as service contracts that grant beneficial ownership to foreign contractors
contrary to the fundamental law.
The underlying assumption in the provisions of the law is that the foreign contractor
manages the mineral resources just like the foreign contractor in a service contract. By
allowing foreign contractors to manage or operate all the aspects of the mining operation, RA
7942 has, in effect, conveyed beneficial ownership over the nation‘s mineral resources to
these contractors, leaving the State with nothing but bare title thereto.
The same provisions, whether by design or inadvertence, permit a circumvention of the
constitutionally ordained 60-40% capitalization requirement for corporations
or associations engaged in the exploitation, development and utilization of Philippine natural
resources.
When parts of a statute are so mutually dependent and connected as conditions,
considerations, inducements or compensations for each other as to warrant a belief that the
legislature intended them as a whole, then if some parts are unconstitutional, all provisions
that are thus dependent, conditional or connected, must fail with them.
Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only
to merely technical or financial assistance to the State for large scale exploration,
development and utilization of minerals, petroleum and other mineral oils.
Second Issue: RP Government-WMCP FTAA is a Service Contract
The FTAA between he WMCP and the Philippine government is likewise unconstitutional
since the agreement itself is a service contract.
Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive
right to explore, exploit, utilize and dispose of all minerals and by-products that may be
produced from the contract area. Section 1.2 of the same agreement provides that EMCP
shall provide all financing, technology, management, and personnel necessary for the Mining
Operations.
These contractual stipulations and related provisions in the FTAA taken together, grant
WMCP beneficial ownership over natural resources that properly belong to the State and are
intended for the benefit of its citizens. These stipulations are abhorrent to the 1987
Constitution. They are precisely the vices that the fundamental law seeks to avoid, the evils
that it aims to suppress. Consequently, the contract from which they spring must be struck
down.

Tolentino v. Secretary of Finance

Arturo Tolentino v. Secretary of Finance and Commissioner of Internal Revenue
G.R. No. 115455; October 30, 1995
Mendoza, J.:

FACTS:
The present case involves motions seeking reconsideration of the Court’s decision
dismissing the petitions for the declaration of unconstitutionality of R.A. No. 7716,
otherwise known as the Expanded Value-Added Tax Law. The motions, of which there
are 10 in all, have been filed by the several petitioners.

The Philippine Press Institute, Inc. (PPI) contends that by removing the exemption of
the press from the VAT while maintaining those granted to others, the law
discriminates against the press. At any rate, it is averred, “even nondiscriminatory
taxation of constitutionally guaranteed freedom is unconstitutional”, citing in support
of the case of Murdock v. Pennsylvania.

Chamber of Real Estate and Builders Associations, Invc., (CREBA), on the other hand,
asserts that R.A. No. 7716 (1) impairs the obligations of contracts, (2) classifies
transactions as covered or exempt without reasonable basis and (3) violates the rule
that taxes should be uniform and equitable and that Congress shall “evolve a
progressive system of taxation”.

Further, the Cooperative Union of the Philippines (CUP), argues that legislature was to
adopt a definite policy of granting tax exemption to cooperatives that the present
Constitution embodies provisions on cooperatives. To subject cooperatives to the VAT
would, therefore, be to infringe a constitutional policy.

ISSUE:
Whether or not, based on the aforementioned grounds of the petitioners, the
Expanded Value-Added Tax Law should be declared unconstitutional.

RULING:
No. With respect to the first contention, it would suffice to say that since the law
granted the press a privilege, the law could take back the privilege anytime without
offense to the Constitution. The reason is simple: by granting exemptions, the State
does not forever waive the exercise of its sovereign prerogative. Indeed, in withdrawing
the exemption, the law merely subjects the press to the same tax burden to which
other businesses have long ago been subject. The PPI asserts that it does not really
matter that the law does not discriminate against the press because “even
nondiscriminatory taxation on constitutionally guaranteed freedom is
unconstitutional.” The Court was speaking in that case (Murdock v. Pennsylvania) of a
license tax, which, unlike an ordinary tax, is mainly for regulation. Its imposition on the
press is unconstitutional because it lays a prior restraint on the exercise of its right. The
VAT is, however, different. It is not a license tax. It is not a tax on the exercise of a
privilege, much less a constitutional right. It is imposed on the sale, barter, lease or
exchange of goods or properties or the sale or exchange of services and the lease of
properties purely for revenue purposes. To subject the press to its payment is not to
burden the exercise of its right any more than to make the press pay income tax or
subject it to general regulation is not to violate its freedom under the Constitution.
Anent the first contention of CREBA, it has been held in an early case that even though
such taxation may affect particular contracts, as it may increase the debt of one person
and lessen the security of another, or may impose additional burdens upon one class
and release the burdens of another, still the tax must be paid unless prohibited by the
Constitution, nor can it be said that it impairs the obligation of any existing contract in
its true legal sense. It is next pointed out that while Section 4 of R.A. No. 7716 exempts
such transactions as the sale of agricultural products, food items, petroleum, and
medical and veterinary services, it grants no exemption on the sale of real property
which is equally essential. The sale of food items, petroleum, medical and veterinary
services, etc., which are essential goods and services was already exempt under
Section 103, pars. (b) (d) (1) of the NIRC before the enactment of R.A. No. 7716.
Petitioner is in error in claiming that R.A. No. 7716 granted exemption to these
transactions while subjecting those of petitioner to the payment of the VAT. Finally, it is
contended that R.A. No. 7716 also violates Art. VI, Section 28(1) which provides that
“The rule of taxation shall be uniform and equitable. The Congress shall evolve a
progressive system of taxation”. Nevertheless, equality and uniformity of taxation
mean that all taxable articles or kinds of property of the same class be taxed at the
same rate. The taxing power has the authority to make reasonable and natural
classifications for purposes of taxation. To satisfy this requirement it is enough that the
statute or ordinance applies equally to all persons, firms, and corporations placed in
similar situation. Furthermore, the Constitution does not really prohibit the imposition
of indirect taxes which, like the VAT, are regressive. What it simply provides is that
Congress shall “evolve a progressive system of taxation.” The constitutional provision
has been interpreted to mean simply that “direct taxes are . . . to be preferred [and] as
much as possible, indirect taxes should be minimized.” The mandate to Congress is not
to prescribe, but to evolve, a progressive tax system.

As regards the contention of CUP, it is worth noting that its theory amounts to saying
that under the Constitution cooperatives are exempt from taxation. Such theory is
contrary to the Constitution under which only the following are exempt from taxation:
charitable institutions, churches, and parsonages, by reason of Art. VI, §28 (3), and non-
stock, non-profit educational institutions by reason of Art. XIV, §4 (3).
With all the foregoing ratiocinations, it is clear that the subject law bears no
constitutional infirmities and is thus upheld.

PERLAS-BERNABE, J.:
Assailed in this petition for certiorari[1] is respondent Commission on
Audit's (CoA) Decision No. 2011-039[2] dated August 8, 2011 which
affirmed Notice of Disallowance No. 09-001-GF(06)[3] dated July 21,
2009 covering petitioners' reimbursement claims for extraordinary and
miscellaneous expenses for the period January to December 2006.

The Facts

The Local Water Utilities Administration (LWUA) is a government-

owned and controlled corporation (GOCC) created[4] pursuant to
Presidential Decree No. (PD) 198,[5] as amended, otherwise known as the
"Provincial Water Utilities Act of 1973."

Petitioners are department managers of the LWUA who, together with

28 other LWUA officials, sought reimbursement of their extraordinary
and miscellaneous expenses (EME) for the period January to December
2006. According to petitioners, the reimbursement claims were within
the ceiling provided under the LWUA Calendar Year 2006 Corporate
Operating Budget approved by the LWUA Board of Trustees and the
Department of Budget and Management.[6]

On April 16, 2007, the Office of the CoA Auditor, through Priscilla DG.
Cruz, the Supervising Auditor assigned to the LWUA (SA Cruz), issued
Audit Observation Memorandum (AOM) No. AOM-2006-27,[7] revealing
that the 31 LWUA officials were able to reimburse P16,900,705.69 in
EME, including expenses for official entertainment, service awards, gifts
and plaques, membership fees, and seminars/conferences. [8] Out of the
said amount, P13,110,998.26 was reimbursed only through an attached
certification attesting to their claimed incurrence ("certification").
[9]
 According to the AOM, this violated CoA Circular No. 2006-
01[10] dated January 3, 2006 (CoA Circular No. 2006-01), which
pertinently states that the "claim for reimbursement of such
expenses shall be supported by receipts and/or other documents
evidencing disbursements."[11]

During the CoA Exit Conference held sometime in April 2007, LWUA
management officials, including herein petitioners, manifested that they
were unaware of the existence of CoA Circular No. 2006-01, particularly
during the period January to December 2006.[12]

After the post-audit of the LWUA EME account for the same period, SA
Cruz issued Notice of Disallowance No. 09-001-GF(06)[13] dated July 21,
2009, disallowing the EME reimbursement claims of the 31 LWUA
officials, in the total amount of P13,110,998.26, for the reason that they
"were not supported by receipts and/or [other] documents evidencing
disbursements as required under [Item III(3)] of [CoA Circular No.
2006-01]."[14]

Pursuant to the CoA's 2009 Revised Rules of Procedure, petitioners

appealed the notice of disallowance to the CoA Cluster Director
(Corporate Sector - Cluster B),[15] contending that the "certification" they
attached in support of their EME reimbursement claims was originally
allowed under Section 397 of the Government Accounting and
Auditing Manual, Volume I (GAAM - Vol. I),[16] which is a
reproduction of Item III(4) of CoA Circular No. 89-300[17] dated
March 21, 1989 (CoA Circular No. 89-300), viz.:

4. x x x The corresponding claim for reimbursement of such expenses shall

be supported by receipts and/or other documents evidencing disbursement,
if these are available, or, in lieu thereof, by a certification executed
by the official concerned that the expenses sought to be
reimbursed have been incurred for any of the purposes contemplated
under Section 19 and other related sections of RA 6688 (or similar
provision[s] in subsequent General Appropriations Acts) in relation to or by
reason of his position. In the case of miscellaneous expenses incurred for an
office specified in the law, such certification shall be executed solely by the
head of the office. [18] (Emphasis supplied)

Further, petitioners alleged that CoA Circular No. 2006-01 is violative of

the equal protection clause since officials of GOCCs, such as the LWUA
officials, are, among others, prohibited by virtue of the same issuance
from supporting their reimbursement claims with "certifications," unlike
officials of the national government agencies (NGAs) who have been so
permitted.[19] To this end, petitioners argued that the employees of NGAs
and GOCCs are similarly situated and that there exists no substantial
distinction between them.[20]
Finally, petitioners submitted that CoA Circular No. 2006-01 was not
duly published in the Official Gazette, or in a newspaper of general
circulation and thus, unenforceable.[21]

The CoA Cluster Director's Ruling

Petitioners' appeal was denied by CoA Cluster Director IV Divinia M.

Alagon (CoA Cluster Director Alagon) in Decision No. 2010-003[22] dated
April 13, 2010, thereby affirming Notice of Disallowance No. 09-001-
GF(06).

Applying the statutory construction principle of ejusdem generis,[23] CoA

Cluster Director Alagon held that a certification executed by the official
concerned for the purpose of claiming EME cannot be construed to fall
under the phrase "other documents evidencing disbursements" as
provided under Item III(3) of CoA Circular No. 2006-01.[24] She
explained that a certification is not of the same class as a receipt because
the latter is issued by a third person, while the former is issued by the
claimant, and usually self-serving.[25] Moreover, certifications are not
evidence of disbursements but are just assertions made by the claimants
that they have spent a fixed amount every month for meetings, seminars,
public relations and the like.[26] In this relation, CoA Cluster Director
Alagon noted that CoA Circular No. 2006-01 is stricter as it does not
mention a certification as an alternative supporting document for the
claim for reimbursement.[27] This is based on the observation that boards
of GOCCs and government financial institutions (GFIs) are invariably
empowered to appropriate through resolutions such amounts as they
deem proper for EME.[28] Thus, the exclusion of said certifications in CoA
Circular No. 2006-01 is a control measure purposely integrated thereto
to regulate the incurrence of these expenditures and to ensure the
prevention and disallowance of irregular, unnecessary, excessive,
extravagant or unconscionable expenditures or uses of government
funds.[29]

CoA Cluster Director Alagon also opined that there lies no violation of
the equal protection clause since GOCCs and GFIs are empowered to
appropriate EME through board resolutions, while the EME for NGAs
must be provided in a law enacted by Congress (i.e., the General
Appropriations Act [GAA]).[30] Accordingly, there is a reasonable
classification which is germane to the purpose of CoA Circular No. 2006-
01.[31]

Finally, CoA Cluster Director Alagon stated that CoA Circular No. 2006-
01 was published in the Manila Standard Today in its February 24, 2006
issue; hence, petitioners' assertion on this score was found to be baseless.
[32]

Unconvinced, petitioners elevated the ruling to the Commission Proper,

docketed as CoA CP Case No. 2010-101,[33] averring that: (a) the principle
of ejusdem generis does not apply since there is no enumeration of things
followed by general words in CoA Circular No. 2006-01;[34] (b) the
certifications fall under the category of documents evidencing
disbursements under Item III(3) of the same issuance, which, in any
case, have been previously allowed under Section 397 of GAAM - Vol. I
and CoA Circular No. 89-300;[35] and (c) there exists no valid
classification between officials of NGAs and officials of GOCCs and GFIs.
[36]
 Petitioners' previous contention on the circular's lack of publication
was no longer raised in their petition to the Commission Proper.

The Commission Proper's Ruling

In its Decision No. 2011-039[37] dated August 8, 2011, the CoA affirmed

Notice of Disallowance No. 09-001-GF(06) but differed from CoA
Cluster Director Alagon's reasoning.

The CoA agreed with petitioners that the principle of ejusdem

generis was not applicable since CoA Circular No. 2006-01 does not
contain any enumeration of specific terms which are followed by a
general word or phrase. However, it held that the principle's non-
applicability does not necessarily buttress petitioners' main argument
that the phrase "and/or other documents evidencing disbursements"
includes the "certifications" issued to support the claim for EME
reimbursement. This is because the "other documents evidencing
disbursements" must refer to documents that evidence disbursement, of
which the certifications being mere general statements that the certified
amount was used as EME, and is within the prescribed ceiling therefor
are not.[38]

It further debunked petitioners' reliance on the provisions of Section 397

of GAAM - Vol. I and Item III(4) of CoA Circular No. 89-300 as these
issuances actually show the contrary intention to include "certifications"
in the phrase "other documents evidencing disbursements" as among the
documents sufficient to support the claim for EME reimbursement
under Item III(3) of CoA Circular No. 2006-01. The "certification" is
separate and distinct from the term "other documents evidencing
disbursements" whether under Section 397 of GAAM - Vol. I or Item
III(4) of CoA Circular No. 89-300. The certification under these
issuances is "in lieu of" the receipts and/or other documents evidencing
disbursement. Moreover, the CoA observed that if the term
"certification" is intended to be included in the term or among the "other
documents evidencing disbursements" that will support a claim for EME
reimbursement, then Section 397 of GAAM - Vol. I and Item III(4) of
CoA Circular No. 89-300 would have stated so; however, the latter
provisions did not. Besides, the CoA pointed out that CoA Circular No.
2006-01 specifically applies to GOCCs, GFIs and their subsidiaries, while
CoA Circular No. 89-300, from which Section 397 of GAAM - Vol. I was
lifted, exclusively applies to NGAs.[39]

Finally, the CoA maintained that there is a substantial distinction

between the officials of NGAs and the officials of the GOCCs, GFIs and
their subsidiaries insofar as their entitlement to EME is concerned. The
former's EME is sourced from the annual GAA, while the latter's EME is
provided by their corporate operating budget approved by their
respective governing boards. In connection therewith, the CoA
emphasized that the issuance of CoA Circular No. 2006-01 is pursuant to
its exclusive constitutional authority to promulgate accounting and
auditing rules and regulations, including those for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures or uses of government funds. It is therefore
within the purview of its mandate and the above-stated distinctions that
CoA Circular No. 2006-01 must be interpreted.[40]

Dissatisfied, petitioners filed the present certiorari petition, imputing

grave abuse of discretion on the part of the CoA.
 The Issue Before the Court

The primordial issue for the Court's resolution is whether or not grave
abuse of discretion attended the CoA's ruling in this case.

The Court's Ruling

The petition lacks merit.

The CoA's audit power is among the constitutional mechanisms that

gives life to the check-and-balance system inherent in our system of
government.[41] As an essential complement, the CoA has been vested
with the exclusive authority to promulgate accounting and auditing rules
and regulations, including those for the prevention and disallowance of
irregular, unnecessary, excessive, extravagant, or unconscionable
expenditures or uses of government funds and properties. This is found
in Section 2, Article IX-D of the 1987 Philippine Constitution which
provides that:

Sec. 2. x x x.

(2) The Commission shall have exclusive authority, subject to the

limitations in this Article, to define the scope of its audit and examination,
establish the techniques and methods required therefor, and promulgate
accounting and auditing rules and regulations, including those for
the prevention and disallowance of irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures or uses of government funds
and properties. (Emphases supplied)

As an independent constitutional body conferred with such power, it

reasonably follows that the CoA's interpretation of its own auditing rules
and regulations, as enunciated in its decisions, should be accorded great
weight and respect. In the recent case of Delos Santos v. CoA,[42] the Court
explained the general policy of the Court towards CoA decisions reviewed
under certiorari[43] parameters:[44]
[T]he CoA is endowed with enough latitude to determine, prevent, and
disallow irregular, unnecessary, excessive, extravagant or unconscionable
expenditures of government funds. It is tasked to be vigilant and
conscientious in safeguarding the proper use of the government's, and
ultimately, the people's property.  The exercise of its general audit power is
among the constitutional mechanisms that gives life to the check and
balance system inherent in our form of government.

x x x [I]t is the general policy of the Court to sustain the decisions

of administrative authorities, especially one which is
constitutionally-created, such as the CoA, not only on the basis of
the doctrine of separation of powers but also for their presumed
expertise in the laws they are entrusted to enforce. Findings of
administrative agencies are accorded not only respect but also finality when
the decision and order are not tainted with unfairness or arbitrariness that
would amount to grave abuse of discretion. It is only when the CoA has
acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, that this
Court entertains a petition questioning its rulings. x x x. (Emphases
and underscoring supplied)

The concept is well-entrenched:  grave abuse of discretion exists when

there is an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law or to act in contemplation of law as when the judgment
rendered is not based on law and evidence but on caprice, whim, and
despotism.[45] Not every error in the proceedings, or every erroneous
conclusion of law or fact, constitutes grave abuse of discretion. The abuse
of discretion to be qualified as "grave" must be so patent or gross as to
constitute an evasion of a positive duty or a virtual refusal to perform the
duty or to act at all in contemplation of law.[46]

Viewed in the foregoing light, the Court finds that the CoA did not
commit any grave abuse of discretion as its affirmance of Notice of
Disallowance No. 09-001-GF(06) is based on cogent legal grounds.

First off, the Court concurs with the CoA's conclusion that the
"certification" submitted by petitioners cannot be properly considered as
a supporting document within the purview of Item III(3) of CoA Circular
No. 2006-01 which pertinently states that a "claim for
reimbursement of [EME] expenses shall be supported by
receipts and/or other documents evidencing disbursements."
Similar to the word "receipts," the "other documents" pertained to under
the above-stated provision is qualified by the phrase "evidencing
disbursements." Citing its lexicographic definition, the CoA stated that
the term "disbursement" means "to pay out commonly from a fund" or
"to make payment in settlement of debt or account payable."[47] That said,
it then logically follows that petitioners' "certification," so as to fall under
the phrase "other documents" under Item III(3) of CoA Circular No.
2006-01, must substantiate the "paying out of an account payable," or, in
simple term, a disbursement.[48] However, an examination of the sample
"certification"[49] attached to the petition does not, by any means, fit this
description. The signatory therein merely certifies that he/she has spent,
within a particular month, a certain amount for meetings, seminars,
conferences, official entertainment, public relations, and the like, and
that the certified amount is within the ceiling authorized under the
LWUA corporate budget. Accordingly, since petitioners' reimbursement
claims were solely supported by this "certification," the CoA properly
disallowed said claims for failure to comply with CoA Circular No. 2006-
01.

The CoA also correctly rejected petitioners' invocation of the provisions

of Section 397 of GAAM - Vol. I and CoA Circular No. 89-300 since, at
the outset, such rules are applicable only to NGAs, and not to GOCCs,
GFIs and their subsidiaries which are specifically governed by CoA
Circular No. 2006-01.[50] A perusal of CoA Circular No. 89-300, from
which Section 397 of GAAM - Vol. I was merely reproduced, clearly
indicates in Item II thereof, captioned "Scope and Coverage," that the
rules thereunder applies to "appropriations authorized under [the GAA
of 1989] for National Government agencies [that] may be used for
incurrence of extraordinary and miscellaneous expenses at the rates and
by the offices and officials specified therein for, among others x x x."[51] A
similar inference may be reached from a reading of Item I of CoA
Circular No. 89-300, captioned as "Rationale," which states that the
circular was made in response to the "increasing number of queries and
requests for clarification as to the real import and true intent of [the
provisions of the GAA of 1989] authorizing the use by certain national
government officials of appropriations authorized for their agencies for
extraordinary and miscellaneous expenses."[52] On the other hand, Item
II of CoA Circular No. 2006-01, captioned as "Scope and Coverage,"
explicitly states that "[t]his circular shall be applicable to all GOCCs,
GFIs and their subsidiaries" and shall cover their "extraordinary and
miscellaneous expenses and other similar expenses."[53] Item I of CoA
Circular No. 2006-01, captioned as "Rationale," also mentions the CoA's
declared policy to "prescribe rules and regulations specifically
for government corporations to regulate the incurrence of these
expenditures and ensure the prevention and disallowance of irregular,
unnecessary, excessive, extravagant, or unconscionable expenditures or
uses of government funds" considering that "[g]overning boards of
[GOCCs/GFIs] are invariably empowered to appropriate through
resolutions such amounts as they deem appropriate for extraordinary
and miscellaneous expenses."[54] Based on the foregoing, it is readily
apparent that petitioners' reliance on Section 397 of GAAM - Vol. I and
Item III(4) of CoA Circular No. 89-300 was improper, hence, the CoA's
apt dismissal of the same.

Lastly, the Court upholds the CoA's finding that there exists a substantial
distinction[55] between officials of NGAs and the officials of GOCCs, GFIs
and their subsidiaries which justify the peculiarity in regulation. Since
the EME of GOCCs, GFIs and their subsidiaries, are, pursuant to law,
allocated by their own internal governing boards, as opposed to the EME
of NGAs which are appropriated in the annual GAA duly enacted by
Congress, there is a perceivable rational impetus for the CoA to impose
nuanced control measures to check if the EME disbursements of GOCCs,
GFIs and their subsidiaries constitute irregular, unnecessary, excessive,
extravagant, or unconscionable government expenditures. Case in point
is the LWUA Board of Trustees which, pursuant to Section 69 of PD 198,
as amended, is "authorized to appropriate out of any funds of the
Administration, such amounts as it may deem necessary for the
operational and other expenses of the Administration including the
purchase of necessary equipment." Indeed, the Court recognizes that
denying GOCCs, GFIs and their subsidiaries the benefit of submitting a
secondary-alternate document in support of an EME reimbursement,
such as the "certification" discussed herein, is a CoA policy intended to
address the disparity in EME disbursement autonomy. As pertinently
stated in CoA Circular No. 2006-01, the consideration underlying the
rules and regulations contained therein is the fact that "[g]overning
 boards of [GOCCs/GFIs] are invariably empowered to appropriate
through resolutions such amounts as they deem appropriate for
extraordinary and miscellaneous expenses."[56] Hence, in due deference
to the CoA's constitutional prerogatives, the Court, absent any semblance
of grave abuse of discretion in this case, respects the regulation, and
consequently dismisses the petition. With these pronouncements, the
Court finds it unnecessary to delve on the other ancillary issues raised by
the parties in their pleadings. Notice of Disallowance No. 09-001-GF(06)
dated July 21, 2009 is therefore upheld and the persons therein held
liable are ordered to duly return the disallowed amount of
P13,110,998.26.

WHEREFORE, the petition is DISMISSED. Accordingly, Notice of

Disallowance No. 09-001-GF(06) dated July 21, 2009 is
hereby AFFIRMED

G.R. No. 127383, August 18, 2005

o tax exemption rules governing GSIS and exceptions

o the plenary powers of Congress cannot be limited by passage of un-
repealable laws

FACTS:

GSIS Davao City branch office received a Notice of Public Auction, scheduling
public bidding of its properties for non-payment of realty taxes from 1992-1994,
amounting to the sum total of Php 295, 721.61. The auction was, however,
subsequently reset by virtue of a deadline extension given by Davao City.

On July 28, 1994, GSIS received Warrants of Levy and Notices of Levy on three
parcels of land it owned and another Notice of Public Auction. In September of that
same year, GSIS filed a petition for Certiorari, Prohibition, Mandamus and/or
Declaratory Relief with the Davao City RTC.

During pre-trial, the only issue raised was whether sec. 234 and 534 of the Local
Government Code, which have withdrawn real property tax from GOCCs, have also
withdrawn from the GSIS its right to be exempted from payment of realty tax.
RTC rendered decision in favor of GSIS. Hence this petition.

ISSUE/S:

Whether the GSIS tax exemptions can be deemed as withdrawn by the LGC
W/N sec. 33 of P.D. 1146 has been repealed by the LGC

HELD:

Reading together sec. 133, 232, and 234 of the LGC, as a general rule: the taxing
powers of LGUs cannot extend to the levy of “taxes, fees, and charges of any kind
on the National Government, its agencies and instrumentalities, and LGUs.”

However, under sec. 234, exemptions from payment of real property taxes granted
to natural or juridical persons, including GOCCs, except as provided in said section,
are withdrawn upon effectivity of LGC. GSIS being a GOCC, then it necessarily
follows that its exemption has been withdrawn.

Regarding P.D. 1146 which laid down requisites for repeal on the laws granting
exemption, Supreme Court found a fundamental flaw in Sec. 33, particularly the
amendatory second paragraph.

Said paragraph effectively imposes restrictions on the competency of the Congress

to enact future legislation on the taxability of GSIS. This places an undue restraint
on the plenary power of the legislature to amend or repeal laws.

Only the Constitution may operate to preclude or place restrictions on the

amendment or repeal laws. These conditions imposed under P.D. 1146, if honored,
have the precise effect of limiting the powers of Congress.

Supreme Court held that they cannot render effective the amendatory second
paragraph of sec. 33, for by doing so, they would be giving sanction to a
disingenuous means employed through legislative power to bind subsequent
legislators to a subsequent mode of repeal. Thus, the two conditions under sec. 33
cannot bear relevance whether the LGC removed the tax-exempt status of GSIS.

Furthermore, sec. 5 on the rules of interpretation of LGC states that “any tax
exemption, incentive or relief granted by any LGU pursuant to the provision of this
Code shall be construed strictly against the person claiming it.”

The GSIS tax-exempt stats, in sum, was withdrawn in 1992 by the LGC but restored
by the GSIS Act of 1997, sec. 39. The subject real property taxes for the years
1992-1994 were assessed against GSIS while the LGC provisions prevailed and
thus may be collected by the City of Davao.
Atitiw V. Zamora G.R. No. 143374
En Banc, J. Tinga
Case Digest by: Gino Angelo P. Yanga
Facts: The ratification of the 1987 Constitution ordains the creation of autonomous regions in
Muslim Mindanao and in the Cordilleras mandating the Congress to enact organic acts pursuant
to section 18 of article X of the Constitution. Thus, by virtue of the residual powers of President
Cory Aquino she promulgated E.O 220 creating CAR. Then the congress enacted R.A 6766, an
act providing for organic act for the cordillera autonomous region, a plebiscite was cast but was
not approve by the people. The court declared that E.O 220 to be still in force and effect until
properly repealed or amended. Later on February 15, 2000, President Estrada signed the
General Appropriations Act of 2000 (GAA 2000) which includes the assailed special provisions,
then issued an E.O 270 to extend the implementation of the winding up of operations of the
CAR and extended it by virtue of E.O 328.
The petitioners seek the declaration of nullity of paragraph 1 of the special provisions of RA 870
(GAA 2000) directing that the appropriation for the CAR shall be spent to wind up its activities
and pay the separation and retirement benefits of all the affected members and employees.

Issue: 1. Whether the assailed special provisions in RA 8760 is a rider and as such is
unconstitutional. 2. Whether the Philippine Government, through Congress, can unilaterally
amend/repeal EO 220. 3. Whether the Republic should be ordered to honor its commitments as
spelled out in EO.220 Ruling: In relation to article VI section 25(2) and section 26 the court said that
xxx an appropriations bill covers a broader range of subject matter and therefore includes more
details compared to an ordinary bill. The title of an appropriations bill cannot be any broader as it is
since it is not feasible to come out with a title that embraces all the details included in an
appropriations bill xxx. The assailed paragraph 1 of the RA8760 does not constitute a rider; it follows
the standard that a provision in an appropriations bill must relate specifically to some particular
appropriations. On the other hand, the contention that Congress cannot amend or repeal E.O 220 is
rejected, there is no such thing as an irrepealable law. And nothing could prevent the Congress from
amending or repealing the E.O. 220 because it is no different from any other law. The last issue, the
court ruled that, the concept of separations of powers presupposes mutual respect. Therefore, the
implementation of E.O. 220 is an executive prerogative while the sourcing of funds is within the
powers of the legislature. In the absence of any grave abuse of discretion, the court cannot correct
the acts of either the Executive or the Legislative in respect to policies concerning CAR.

GSIS v. Court of Appeals [G.R. No. L-40824. February 23, 1989]

FACTS
Private respondents, Mr. and Mrs. Isabelo R. Racho, together with the spouses Mr. and Mrs.
Flaviano Lagasca, executed a deed of mortgage, in favor of petitioner Government Service
Insurance System (GSIS) and subsequently, another deed of mortgage, in connection with two
loans granted by the latter in the sums of P 11,500.00 and P 3,000.00, respectively. A parcel of
land co-owned by said mortgagor spouses, was given as security under the aforesaid two
deeds.  They also executed a ‘promissory note” which states in part:
… for value received, we the undersigned … JOINTLY, SEVERALLY and SOLIDARILY,
promise to pay the GOVERNMENT SERVICE INSURANCE SYSTEM the sum of . . . (P
11,500.00) Philippine Currency, with interest at the rate of six (6%) per centum compounded
monthly payable in . . . (120)equal monthly installments of . . . (P 127.65) each.
Both parties relied on the provisions of Section 29 of Act No. 2031, otherwise known as the
Negotiable Instruments Law, which provide that an accommodation party is one who has signed
an instrument as maker, drawer, acceptor of indorser without receiving value therefor, but is held
liable on the instrument to a holder for value although the latter knew him to be only an
accommodation party.

ISSUE
Whether or not the executed promissory note is a negotiable instrument.

RULING
NO.The promissory note hereinbefore quoted, as well as the mortgage deeds subject of this case,
are clearly not negotiable instruments. These documents do not comply with the fourth requisite
to be considered as such under Section 1 of Act No. 2031 because they are neither payable to
order nor to bearer. The note is payable to a specified party, the GSIS. Absent the aforesaid
requisite, the provisions of Act No. 2031 would not apply; governance shall be afforded, instead,
by the provisions of the Civil Code and special laws on mortgages.

REPUBLIC OF THE PHILIPPINES et al. v. HONORABLE RAMON S.

CAGUIOA et al.

536 SCRA 193 (2007), EN BANC

Congress enacted Republic Act (R.A) No. 7227 or the Bases Conversion and

Development Act of 1992 which created the Subic Special Economic and Freeport
Zone (SBF) and the Subic Bay Metropolitan Authority (SBMA). Section 12 of R.A No.
7227 of the law provides that no taxes, local and national, shall be imposed within
the Subic Special Economic Zone. Pursuant to the law, Indigo Distribution
Corporation, et al., which are all domestic corporations doing business at the
SBF, applied for and were granted Certificates of Registration and Tax Exemption by
the SBMA.

Congress subsequently passed R.A. No. 9334, which provides that all applicable
taxes, duties, charges, including excise taxes due thereon shall be applied to cigars
and cigarettes, distilled spirits, fermented liquors and wines brought directly into the
duly chartered or legislated freeports of the Subic Economic Freeport Zone. On the
basis of Section 6 of R.A. No. 9334, SBMA issued a Memorandum declaring that, all
importations of cigars, cigarettes, distilled spirits, fermented liquors and wines into
the SBF, shall be treated as ordinary importations subject to all applicable taxes,
duties and charges, including excise taxes.
Upon its implementation, Indigo et al., sought for a reconsideration of
the directives on the imposition of duties and taxes, particularly excise taxes by the
Collector of Customs and the SBMA Administrator. Their request was subsequently
denied prompting them to file with the RTC of Olongapo City a special civil action
for declaratory relief to have certain provisions of R.A. No. 9334 declared as
unconstitutional. They prayed for the issuance of a writ of preliminary injunction
and/or Temporary Restraining Order (TRO) and preliminary mandatory injunction.
The same was subsequently granted by Judge Ramon Caguioa. The injunction bond
was approved at One Million pesos (P1,000,000).

ISSUES:

Whether or not public respondent judge committed grave abuse of discretion

amounting to lack or excess in jurisdiction in peremptorily and unjustly issuing the
injunctive writ in favor of private respondents despite the absence of the legal
requisites for its issuance

HELD:

One such case of grave abuse obtained in this case when Judge Caguioa issued his
Order of May 4, 2005 and the Writ of Preliminary Injunction on May 11, 2005
despite the absence of a clear and unquestioned legal right of private respondents. In
holding that the presumption of constitutionality and validity of R.A. No. 9334 was
overcome by private respondents for the reasons public respondent cited in his May
4, 2005 Order, he disregarded the fact that as a condition sine qua non to the
issuance of a writ of preliminary injunction, private respondents needed also to show
a clear legal right that ought to be protected. That requirement is not satisfied in this
case. To stress, the possibility of irreparable damage without proof of an actual
existing right would not justify an injunctive relief.

Indeed, Sections 204 and 229 of the NIRC provide for the recovery of erroneously or
illegally collected taxes which would be the nature of the excise taxes paid by private
respondents should Section 6 of R.A. No. 9334 be declared unconstitutional or
invalid.

The Court finds that public respondent had also ventured into the delicate area
which courts are cautioned from taking when deciding applications for the issuance
of the writ of preliminary injunction. Having ruled preliminarily against the prima
facie validity of R.A. No. 9334, he assumed in effect the proposition that private
respondents in their petition for declaratory relief were duty bound to prove, thereby
shifting to petitioners the burden of proving that R.A. No. 9334 is not
unconstitutional or invalid.

In the same vein, the Court finds Judge Caguioa to have overstepped his discretion
when he arbitrarily fixed the injunction bond of the SBF enterprises at only
P1million. Rule 58, Section 4(b) provides that a bond is executed in favor of the party
enjoined to answer for all damages which it may sustain by reason of the injunction.
The purpose of the injunction bond is to protect the defendant against loss or
damage by reason of the injunction in case the court finally decides that the plaintiff
was not entitled to it, and the bond is usually conditioned accordingly.

Whether this Court must issue the writ of prohibition, suffice it to stress that being
possessed of the power to act on the petition for declaratory relief, public respondent
can proceed to determine the merits of the main case. Moreover, lacking the
requisite proof of public respondent‘s alleged partiality, this Court has no ground to
prohibit him from proceeding with the case for declaratory relief. For these reasons,
prohibition does not lie.

TATAD VS DEPARTMENT OF ENERGY

G.R. No. 124360 and 127867. November 5, 1997

Facts:

The petitioner question the constitutionality of RA No. 8180 “An Act Deregulating the Downstream
Oil Industry and For Other Purposes.” The deregulation process has two phases: (a) the transition
phase and the (b) full deregulation phase through EO No. 372.

The petitioner claims that Sec. 15 of RA No. 8180 constitutes an undue delegation of legislative
power to the President and the Sec. of Energy because it does not provide a determinate or
determinable standard to guide the Executive Branch in determining when to implement the full
deregulation of the downstream oil industry, and the law does not provide any specific standard to
determine when the prices of crude oil in the world market are considered to be declining nor when
the exchange rate of the peso to the US dollar is considered stable.

 Issues:

1. Whether or not Sec 5(b) of R.A. 8180 violates the one title one subject requirement of the
Constitution.
2. Whether or not Sec 15 of R.A. 8180 violates the constitutional prohibition on undue
delegation of power.
3. Whether or not R.A. No. 8180 violates the constitutional prohibition against monopolies,
combinations in restraint of trade and unfair competition

Rulings:
1. The Court does not concur with this contention. The Court has adopted a liberal construction
of the one title – one subject rule. The Court hold that section 5(b) providing for tariff differential
is germane to the subject of R.A. No. 8180 which is the deregulation of the downstream oil
industry. The section is supposed to sway prospective investors to put up refineries in our
country and make them rely less on imported petroleum.[i][20] We shall, however, return to the
validity of this provision when we examine its blocking effect on new entrants to the oil market.
2. Sec 15 of R.A. 8180 can hurdle both the completeness test and the sufficient standard test. It
will be noted that Congress expressly provided in R.A. No. 8180 that full deregulation will start
at the end of March 1997, regardless of the occurrence of any event. Full deregulation at the end
of March 1997 is mandatory and the Executive has no discretion to postpone it for any purported
reason. Thus, the law is complete on the question of the final date of full deregulation. The
discretion given to the President is to advance the date of full deregulation before the end of
March 1997. Section 15 lays down the standard to guide the judgment of the President. He is to
time it as far as practicable when the prices of crude oil and petroleum products in the world
market are declining and when the exchange rate of the peso in relation to the US dollar is
stable.
3. Section 19 of Article XII of the Constitution allegedly violated by the aforestated provisions
of R.A. No. 8180 mandates: “The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.”

LUZ FARMS v. SECRETARY OF DEPARTMENT OF AGRARIAN REFORM, GR No.

86889, 1990-12-04
Facts:
President of the Philippines approved R.A. No. 6657, which includes the raising of livestock,
poultry and swine... retary of Agrarian Reform promulgated the Guidelines and Procedures
Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No.
6657
Secretary of Agrarian Reform promulgated its Rules and Regulations implementing Section
11 of R.A. No. 6657  (Commercial Farms)
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry
business and together with others in the same business allegedly stands to be adversely
affected by the enforcement of Section 3(b),... Comprehensive Agrarian Reform Law... and
of the Guidelines and Procedures Implementing Production and Profit Sharing under R.A.
No. 6657 promulgated
Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to
apply to it:
(a)   Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of
"Agricultural, Agricultural Enterprise or Agricultural Activity."
The Constitutional provision under consideration reads as follows:
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4.  The State shall, by law, undertake an agrarian reform program founded on the
right of farmers and regular farmworkers, who are landless, to own directly or collectively
the lands they till or, in the case of other... farmworkers, to receive a just share of the fruits
thereof.  To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the Congress
may... prescribe, taking into account ecological, developmental, or equity considerations,
and subject to the payment of just compensation.  In determining retention limits, the State
shall respect the rights of small landowners.  The State shall... further provide incentives for
voluntary land-sharing.
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety.  In
fact, it acknowledges the correctness of the decision of this Court in the case of the
Association of Small Landowners in the Philippines, Inc. vs.
Secretary of Agrarian Reform
It, however, argued that Congress in enacting the said law has transcended the mandate of
the Constitution,... in including land devoted to the raising of livestock, poultry and swine in
its coverage (Rollo, p. 131).  Livestock or poultry raising is not similar to crop or tree
farming.  Land is not the primary... resource in this undertaking and represents no more
than five percent (5%) of the total investment of commercial livestock and poultry raisers.
On the other hand, the public respondent argued that livestock and poultry raising is
embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b)
of R.A. 6657 is proper.  He cited that Webster's International
Dictionary, Second Edition (1954), defines the following words:
"Agriculture - the art or science of cultivating the ground and raising and harvesting crops,
often, including also, feeding, breeding and management of livestock, tillage, husbandry,
farming.
It includes farming, horticulture, forestry, dairying, sugarmaking x x x.
Livestock - domestic animals used or raised on a farm, especially for profit.
Issues:
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A.
No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law
includes the raising of livestock, poultry and swine in its coverage as... well as the
Implementing Rules and Guidelines promulgated in accordance therewith.
Ruling:
The petition is impressed with merit.
The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural," clearly show that it was never the intention of the
framers of the Constitution to include livestock and poultry industry in the coverage of... the
constitutionally-mandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 186 of
R.A. 3844, as land devoted to any growth.  Including but not limited to crop lands, saltbeds,
fishponds, idle and... abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture."
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes
"private agricultural lands devoted to commercial livestock, poultry and swine raising" in the
definition of "commercial farms" is invalid, to the extent that the aforecited... agro-industrial
activities are made to be covered by the agrarian reform program of the State.  There is
simply no reason to include livestock and poultry lands in the coverage of agrarian reform
(Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of
R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute
and implement "production-sharing plans" (pending final redistribution of their...
landholdings) whereby they are called upon to distribute from three percent (3%) of their
gross sales and ten percent (10%) of their net profits to their workers as additional
compensation is unreasonable for being confiscatory, and therefore... violative of due
process (Rollo, p. 21).
PREMISES CONSIDERED, the instant petition is hereby GRANTED.
G.R. No. 166471: March 22, 2011

TAWANG MULTI-PURPOSE COOPERATIVE Petitioner,v. LA

TRINIDAD WATER DISTRICT, Respondent.

CARPIO,J.:

FACTS:

Tawang Multi-Purpose Cooperative (TMPC) is a cooperative, organized to

provide domestic water services in Barangay Tawang, La Trinidad, Benguet. La
Trinidad Water District (LTWD) is a local water utility created under Section 47
of Presidential Decree (PD) No. 198, as amended. It is authorized to supply water
for domestic, industrial and commercial purposes within the municipality of La
Trinidad, Benguet.

TMPC filed with the National Water Resources Board (NWRB) an application for
a certificate of public convenience (CPC) to operate and maintain a waterworks
system in Barangay Tawang. LTWD opposed TMPCs application, arguing that its
franchise is exclusive as provided under PD 198. A CPC is however granted.
LTWD filed a motion for reconsideration but the same was denied by NWRB.
LTWD then appealed to the RTC where it court set aside the NWRB decision.
Hence, this petition.

ISSUE: Whether or not the petition may be granted

HELD: Yes. RTC Decision Set Aside.

Political Law- No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted except to citizens of the Philippines
or to corporations or associations organized under the laws of the Philippines, at
least sixty per centum of whose capital is owned by such citizens,nor shall such
franchise, certificate or authorizationbe exclusive in characteror for a longer
period than fifty years.

Plain words do not require explanation. The 1935, 1973 and 1987 Constitutions
are clear franchises for the operation of a public utility cannot be exclusive in
character. The 1935, 1973 and 1987 Constitutions expressly and clearly state
that,"nor shall such franchise x x x be exclusive in character."There is no
exception.

When the law is clear, there is nothing for the courts to do but to apply it. The
duty of the Court is to apply the law the way it is worded. What cannot be legally
done directly cannot be done indirectly. This rule is basic and, to a reasonable
mind, does not need explanation. Indeed, if acts that cannot be legally done
directly can be done indirectly, then all laws would be illusory.

Indeed, the President, Congress and the Court cannot create directly franchises
that are exclusive in character. What the President, Congress and the Court
cannot legally do directly they cannot do indirectly. Thus, the President, Congress
and the Court cannot create indirectly.

In PD No. 198, as amended, former President Ferdinand E. Marcos (President

Marcos) created indirectly franchises that are exclusive in character by allowing
the BOD of LTWD and the LWUA to create directly franchises that are exclusive
in character.

In case of conflict between the Constitution and a statute, the Constitution always
prevails because the Constitution is the basic law to which all other laws must
conform to. The duty of the Court is to uphold the Constitution and to declare
void all laws that do not conform to it.

Petition Granted. Section 47 of PD 198 is UNCONSTITUTIONAL.

Betoy vs Board of Directors, National Power Corp GR

Nos. 156556-57, Oct 4, 2011 PERALTA, J.:
 paltos009  Uncategorized  October 16, 2017 1 Minute

Facts:
Petitioner filed a special civil action for certiorari and supplemental
petition for mandamus, specifically assailing National Power Board
Resolutions No. 2002-124 and No. 2002-125, as well as Sections 11, 34,
38, 48, 52 and 63 of Republic Act (R.A.) No. 9136, otherwise known as
the Electric Power Industry Reform Act of 2001 (EPIRA). Also assailed
is Rule 33 of the Implementing Rules and Regulations (IRR) of the
EPIRA.
On June 8, 2001, the EPIRA was enacted by Congress with the goal of
restructuring the electric power industry and privatization of the assets
of the National Power Corporation (NPC).
On November 18, 2002, pursuant to Section 63 of the EPIRA and Rule
33 of the IRR, the NPB passed NPB Resolution No. 2002-124 which,
among others, resolved that all NPC personnel shall be legally
terminated on January 31, 2003and shall be entitled to separation
benefits.
As a result of the foregoing NPB Resolutions, petitioner Enrique U.
Betoy, together with thousands of his co-employees from the NPC were
terminated.
However, amongst the petitions raised – it is noteworthy that petitioners
argued that Section 11, Section 48 and Section 52 of RA 9136 (EPIRA) for
being violative of Section 13, Article VII of the 1987 Constitution and,
therefore, unconstitutional.

Issue:
Whether or not the designation of secretaries as board of directors of
National Power Corporation valid.

Held:
The delegation of the said official to the respective Board of Directors
were designation by Congress of additional functions and duties to the
officials concerned, i.e., they were designated as members of the Board of
Directors.

Designation connotes an imposition of additional duties, usually by law,

upon a person already in the public service by virtue of an earlier
appointment. Designation does not entail payment of additional benefits
or grant upon the person so designated the right to claim the salary
attached to the position.Without an appointment, a designation does not
entitle the officer to receive the salary of the position. The legal basis of
an employee’s right to claim the salary attached thereto is a duly issued
and approved appointment to the position, and not a mere designation.
This Court, therefore, finds the designation of the respective members of
the Cabinet, as ex-officio members of the NPB, valid.

PAMBANSANG KOALISYON NG MGA SAMAHANG MAGSASAKA AT

MANGGAGAWA SA NIYUGAN (PKSMMN), etc. v. EXECUTIVE
SECRETARY, etc. CONSOLIDATED WITH G.R. No. 147811.

FACTS: These are consolidated petitions to declare unconstitutional certain

presidential decrees and executive orders of the martial law era and under the
incumbency of Pres. Estrada relating to the raising and use of coco-levy funds,
particularly: Section 2 of P.D. 755, (b)Article III, Section 5 of P.D.s 961 and 1468,
(c) E.O. 312, and (d) E.O. 313.

On June 19, 1971 Congress enacted R.A. 6260 that established a Coconut
Investment Fund (CI Fund) for the development of the coconut industry through
capital financing. Coconut farmers were to capitalize and administer the Fund
through the Coconut Investment Company (CIC) whose objective was, among
others, to advance the coconut farmers interests.For this purpose, the law
imposed a levy ofP0.55on the coconut farmers first domestic sale of every 100
kilograms of copra, or its equivalent, for which levy he was to get a receipt
convertible into CIC shares of stock.

In 1975 President Marcos enacted P.D. 755 which approved the acquisition of a
commercial bank for the benefit of the coconut farmersto enable such bank to
promptly and efficiently realize the industry's credit policy.Thus, the PCA bought
72.2% of the shares of stock of First United Bank, headed by Pedro
Cojuangco.Dueto changes in its corporate identity and purpose, the banks articles
of incorporation were amended in July 1975, resulting in a change in the banks
name from First United Bank United Coconut Planters Bank (UCPB).

In November 2000 then President Joseph Estrada issued Executive Order (E.O.)
312, establishing a Sagip Niyugan Program which sought to provide immediate
income supplement to coconut farmers and encourage the creation of a
sustainable local market demand for coconut oil and other coconut products.The
Executive Order sought to establish aP1-billion fund by disposing of assets
acquired using coco-levy funds or assets of entities supported by those funds.A
committee was created to manage the fund under this program.A majority vote of
its members could engage the services of a reputable auditing firm to conduct
periodic audits.

At about the same time, President Estrada issued E.O. 313, which created an
irrevocable trust fund known as the Coconut Trust Fund (the Trust Fund).This
aimed to provide financial assistance to coconut farmers, to the coconut industry,
and to other agri-related programs.The shares of stock of SMC were to serve as
the Trust Funds initial capital.These shares were acquired with CII Funds and
constituted approximately 27% of the outstanding capital stock of SMC.E.O. 313
designated UCPB, through its Trust Department, as the Trust Funds trustee
bank.The Trust Fund Committee would administer, manage, and supervise the
operations of the Trust Fund. The Committee would designate an external
auditor to do an annual audit or as often as needed but it may also request the
Commission on Audit (COA) to intervene.

To implement its mandate, E.O. 313 directed the Presidential Commission on

Good Government, the Office of the Solicitor General, and other government
agencies to exclude the 27% CIIF SMC shares from Civil Case 0033, entitled
Republic of the Philippines v. Eduardo Cojuangco, Jr., et al.,which was then
pending before the Sandiganbayan and to lift the sequestration over those shares.

On January 26, 2001, however, former President Gloria Macapagal-Arroyo

ordered the suspension of E.O.s 312 and 313. This notwithstanding, on March 1,
2001 petitioner organizations and individuals brought the present action in G.R.
147036-37 to declare E.O.s 312 and 313 as well as Article III, Section 5 of P.D.
1468 unconstitutional.On April 24, 2001 the other sets of petitioner organizations
and individuals instituted G.R. 147811 to nullify Section 2 of P.D. 755 and Article
III, Section 5 of P.D.s 961 and 1468 also for being unconstitutional.

ISSUE: Are the coco-levy funds public funds?

Are (a) Section 2 of P.D. 755, (b)Article III, Section 5 of P.D.s 961 and
1468, (c) E.O. 312, and (d) E.O. 313 unconstitutional?
Have petitioners legal standing to bring the same to court?
HELD: Coco-levy funds are public funds. The Court was satisfied that the coco-
levy funds were raised pursuant to law to support a proper governmental
purpose.They were raised with the use of the police and taxing powers of the
State for the benefit of the coconut industry and its farmers in general. The COA
reviewed the use of the funds.The BIR treated them as public funds and the very
laws governing coconut levies recognize their public character.

The Court has also recently declared that the coco-levy funds are in the nature of
taxes and can only be used for public purpose.Taxes are enforced proportional
contributions from persons and property, levied by the State by virtue of its
sovereignty for the support of the government and for all itspublic needs. Here,
the coco-levy funds were imposed pursuant to law, namely, R.A. 6260 and P.D.
276.The funds were collected and managed by the PCA,an independent
government corporation directly under the President.And, as the respondent
public officials pointed out, thepertinent laws used the termlevy, which meansto
tax, in describing the exaction.

R.A. 6260 and P.D. 276 did not raise money to boost the governments general
funds butto provide means for the rehabilitation and stabilization of a threatened
industry, the coconut industry, which is so affected with public interest as to be
within the police power of the State. The funds sought to support the coconut
industry,one of the main economic backbones of the country, and to secure
economic benefits for the coconut farmers and farm workers.

Lastly, the coco-levy funds are evidently special funds. Its character as such fund
was made clear by the fact that they were deposited in the PNB (then a wholly
owned government bank) and not in the Philippine Treasury.

***

The Court has already passed upon this question in Philippine Coconut Producers
Federation, Inc. (COCOFED) v. Republic of the Philippines. It held as
unconstitutional Section 2 of P.D. 755 for effectively authorizing the PCA to
utilize portions of theCCS Fundto pay the financial commitment of the farmers to
acquire UCPB and to deposit portions of the CCS Fund levies with UCPB interest
free. And as there also provided, the CCS Fund, CID Fund and like levies that
PCA is authorized to collect shall be considered as non-special or fiduciary funds
to be transferred to the general fund of the Government, meaning they shall be
deemed private funds.

In any event, such declaration is void.There is ownership when a thing pertaining

to a person is completely subjected to his will in everything that is not prohibited
by law or the concurrence with the rights of another. An owner is free to exercise
all attributes ofownership: the right, among others, to possess, use and enjoy,
abuse or consume, and dispose or alienate the thing owned. The owner is free to
waive all or some of these rights in favor of others.But in the case of the coconut
farmers, they could not, individually or collectively, waive what have not been
and could not be legally imparted to them.

AQUILINO Q. PIMENTEL v. EXECUTIVE SECRETARY PAQUITO N. OCHOA, GR No.

195770, 2012-07-17
Facts:
In 207, the DSWD embarked on a poverty reduction strategy with the poorest of the poor as
target beneficiaries.[2] Dubed " Ahon Pamilyang Pilipino, " it was pre-pilotested in the
municipalities of Sibagat and Esperanza in Agusan del Sur; the... municipalities of Lopez
Jaenand Bonifacio in Misamis Occidental, the Caraga Region; and the cities of Pasay and
Calocan[3] upon the release of the amount of P 50 Million Pesos under a Special Allotment
Release Order (SARO) issued by the Department of Budget... and Management.
On July 16, 208, the DSWD issued Administrative Order No. 16, series of 208 (A.O. No. 16,
s. 208),[5] setting the implementing guidelines for the project renamed "Pantawid Pamilyang
Pilipino Program " (4Ps), upon the following stated objectives, to... wit:
To improve preventive health care of pregnant women and young children
To increase enrollment/attendance of children at elementary level
To reduce incidence of child labor
To raise consumption of poor households on nutrient dense foods
To encourage parents to invest in their children's (and their own) future
To encourage parent's participation in the growth and development of young children, as
well as involvement in the community
Under A.O. No. 16, s. 208, the DSWD also institutionalized a coordinated inter - agency
network among the Department of Education (DepEd), Department of Health (DOH),
Department of Interior and Local Government (DILG), the National Anti - Poverty
Commission (NAPC) and the local... government units (LGUs), identifying specific roles an
d functions in order to ensure effective and efficient implementation of the CCTP . As the
DSWD takes on the role of lead implementing agency that must "oversee and coordinate
the implementation, monitoring and evaluation of... the program," the concerned LGU as
partner agency is particularly tasked to... a. Ensure availability of the supply side on health
and education in the target areas.
b. Provide necessary technical assistance for Program implementation... c. Coordinate the
implementation/operationalization of sectoral activities at the City/Municipal level to better
execute Program objectives and functions... d. Coordinate with various concerned
government agencies at the local level, sectoral representatives and NGO to ensure
effective Program implementation... e. Prepare reports on issues and concerns regarding
Program implementation and submit to the Regional Advisory Committee, and... f. Hold
monthly committee meetings
Congress, for its part, sought to ensure the success of the CCTP by providing it with funding
under the GA of 208 in the amount of Two Hundred Ninety - Eight Million Five Hundred Fifty
Thousand Pesos ( P 298,50,0.0).
This budget allocation increased tremendously to P 5 Billion
Pesos in 209, with the amount doubling to P 10 Billion Pesos in 2010. But the biggest
allotment given to the CCTP was in the GA of 201 at Twenty One Billion One Hundred
Ninety - Four Million One Hundred Seventeen Thousand Pesos ( P 21,194,17,0.0).
Petitioner Aquilino Pimentel, Jr., a former Senator, joined by Sergio Tadeo, incumbent
President of the Association of Barangay Captains of Cabanatuan City, Nueva Ecija, and
Nelson Alcantara, incumbent Barangay Captain of Barangay Sta. Monica, Quezon City ,
challenges before the
Court the disbursement of public funds and the implementation of the CCTP which are
alleged to have encroached into the local autonomy of the LGUs.
Issues:
THE P 21 BILLION CTP BUDGET ALLOCATION UNDER THE DSWD IN THE GA FY 201
VIOLATES ART. II, SEC. 25 & ART. X, SEC. 3 OF THE 1987 CONSTITUTION IN
RELATION TO SEC. 17 OF THE LOCAL GOVERNMENT CODE OF 191 BY PROVIDING
FOR THE RECENTRALIZATION OF THE NATIONAL
GOVERNMENT IN THE DE LIVERY OF BASIC SERVICES ALREADY DEVOLVED TO
THE LGUS.
Ruling:
The Constitution declares it a policy of the State to ensure the autonomy of local
governments[14] and even devotes a ful article on the subject of local governance[15] which
includes the following pertinent provisions:
Section 3. The Congres shall enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanisms of recall, initiative, and referendum,... allocate
among the different local government units their powers, responsibilities, and resources,
and provide for the qualifications , election, appointment and removal, term, salaries,
powers and functions and duties of local officials, and all other maters relating to the...
organization and operation of the local units.
xxx
Section 14. The President shall provide for regional development councils or other similar
bodies composed of local government officials, regional heads of departments and other
government offices, and representatives from non - governmental organizations within the...
regions for purposes of administrative decentralization to strengthen the autonomy of the
units therein and to accelerate the economic and social growth and development of the
units in the region. (Underscoring supplied)
In order to fully secure to the LGUs the genuine and meaningful autonomy that would
develop them into self - reliant communities and effective partners in the attainment of
national goals, [16] Section 17 of the Local Government Code vested upon the LGUs... the
duties and functions pertaining to the delivery of basic services and facilities, as follows:
SECTION 17. Basic Services and Facilities. (a) Local government units shall endeavor to
be self - reliant and shall continue exercising the powers and discharging the duties and
functions currently vested upon them. They shall also discharge the functions and...
responsibilities of national agencies and offices devolved to them pursuant to this Code.
Local government units shall like wise exercise such other powers and discharge such other
f unctions and responsibilities as are necessary, appropriate, or incidental to efficient and...
effective provision of the basic services and facilities enumerated herein.
(b) Such basic services and facilities include, but are not limited to, x x x.
While the aforementioned provision charges the LGUs to take on the functions and
responsibilities that have already been devolved upon them from the national agencies on
the aspect of providing for basic services and facilities in their respective jurisdictions ,
paragraph (c)... of the same provision provides a categorical exception of cases involving
nationally - funded projects, facilities, programs and services, thus:
(c) Notwithstanding the provisions of subsection (b) hereof, public works and infrastructure
projects and other facilities, programs and services funded by the National Government
under the annual General Appropriations Act, other special laws, pertinent executive...
orders, and those wholly or partially funded from foreign sources, are not covered under this
Section, except in those cases where the local government unit concerned is duly
designated as the implementing agency for such projects, facilities, programs and services.
(Underscoring supplied)
The essence of this express reservation of pow er by the national government is that, unles
an LGU is particularly designated as the implementing agency, it has no power over a
program for which funding has ben provided by the national government under the anual
general... apropriations act, even if t he program involves the delivery of basic services
within the jurisdiction of the LGU.
Indeed, a complete relinquishment of central government powers on the matter of providing
basic facilities and services cannot be implied as the Local Government Code itself weighs
against it. The national government is, thus, not precluded from taking a direct hand in the...
formulation and implementation of national development programs especially where it is
implemented locally in coordination with the LGUs concerned.
Petitioners have failed to discharge the burden of... proving the invalidity of the provisions
under the GAA of 2011.
The allocation of a P21 billion budget for an intervention program formulated by the national
government itself but implemented in partnership with the local government units to achieve
the common national goal... development and social progress can by no means be an
encroachment upon the autonomy of local governments.
Principles:
Indeed, a complete relinquishment of central government powers on the matter of providing
basic facilities and services cannot be implied as the Local Government Code itself weighs
against it. The national government is, thus, not precluded from taking a direct hand in the...
formulation and implementation of national development programs especially where it is
implemented locally in coordination with the LGUs concerned.

LAMP VS. SEC OF BUDGET

AND MANAGEMENT
MARCH 28, 2013 ~ VBDIAZ

LAWYERS AGAINST MONOPOLY AND POVERTY (LAMP), represented

by its Chairman and counsel, CEFERINO PADUA, Members, ALBERTO
ABELEDA, JR., ELEAZAR ANGELES, GREGELY FULTON ACOSTA,
VICTOR AVECILLA, GALILEO BRION, ANATALIA BUENAVENTURA,
EFREN CARAG, PEDRO CASTILLO, NAPOLEON CORONADO,
ROMEO ECHAUZ, ALFREDO DE GUZMAN, ROGELIO KARAGDAG,
JR., MARIA LUZ ARZAGA-MENDOZA, LEO LUIS MENDOZA,
ANTONIO P. PAREDES, AQUILINO PIMENTEL III, MARIO REYES,
EMMANUEL SANTOS, TERESITA SANTOS, RUDEGELIO TACORDA,
SECRETARY GEN. ROLANDO ARZAGA, Board of Consultants, JUSTICE
ABRAHAM SARMIENTO, SEN. AQUILINO PIMENTEL, JR., and
BARTOLOME FERNANDEZ, JR.
vs.
THE SECRETARY OF BUDGET AND MANAGEMENT, THE
TREASURER OF THE PHILIPPINES, THE COMMISSION ON AUDIT,
and THE PRESIDENT OF THE SENATE and the SPEAKER OF THE
HOUSE OF REPRESENTATIVES in representation of the Members of the
Congress
G.R. No. 164987, April 24, 2012
FACTS: For consideration of the Court is an original action for certiorari assailing
the constitutionality and legality of the implementation of the Priority
Development Assistance Fund (PDAF) as provided for in Republic Act (R.A.)
9206 or the General Appropriations Act for 2004 (GAA of 2004).
Petitioner Lawyers Against Monopoly and Poverty(LAMP), a group of lawyers
who have banded together with a mission of dismantling all forms of political,
economic or social monopoly in the country. According to LAMP, the above
provision is silent and, therefore, prohibits an automatic or direct allocation of
lump sums to individual senators and congressmen for the funding of projects. It
does not empower individual Members of Congress to propose, select and identify
programs and projects to be funded out of PDAF.

For LAMP, this situation runs afoul against the principle of separation of powers
because in receiving and, thereafter, spending funds for their chosen projects, the
Members of Congress in effect intrude into an executive function. Further, the
authority to propose and select projects does not pertain to legislation. “It is, in
fact, a non-legislative function devoid of constitutional sanction,”8 and, therefore,
impermissible and must be considered nothing less than malfeasance.

RESPONDENT’S POSITION: the perceptions of LAMP on the implementation of

PDAF must not be based on mere speculations circulated in the news media
preaching the evils of pork barrel.

ISSUES: 1) whether or not the mandatory requisites for the exercise of judicial
review are met in this case; and 2) whether or not the implementation of PDAF by
the Members of Congress is unconstitutional and illegal.
HELD:
I.

A question is ripe for adjudication when the act being challenged has had a direct
adverse effect on the individual challenging it. In this case, the petitioner contested
the implementation of an alleged unconstitutional statute, as citizens and taxpayers.
The petition complains of illegal disbursement of public funds derived from
taxation and this is sufficient reason to say that there indeed exists a definite,
concrete, real or substantial controversy before the Court.
LOCUS STANDI: The gist of the question of standing is whether a party alleges
“such a personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court so
largely depends for illumination of difficult constitutional questions. Here, the
sufficient interest preventing the illegal expenditure of money raised by taxation
required in taxpayers’ suits is established. Thus, in the claim that PDAF funds have
been illegally disbursed and wasted through the enforcement of an invalid or
unconstitutional law, LAMP should be allowed to sue.

Lastly, the Court is of the view that the petition poses issues impressed with
paramount public interest. The ramification of issues involving the unconstitutional
spending of PDAF deserves the consideration of the Court, warranting the
assumption of jurisdiction over the petition.

II.

The Court rules in the negative.

In determining whether or not a statute is unconstitutional, the Court does not lose
sight of the presumption of validity accorded to statutory acts of Congress. To
justify the nullification of the law or its implementation, there must be a clear and
unequivocal, not a doubtful, breach of the Constitution. In case of doubt in the
sufficiency of proof establishing unconstitutionality, the Court must sustain
legislation because “to invalidate [a law] based on x x x baseless supposition is an
affront to the wisdom not only of the legislature that passed it but also of the
executive which approved it.”

The petition is miserably wanting in this regard. No convincing proof was

presented showing that, indeed, there were direct releases of funds to the Members
of Congress, who actually spend them according to their sole discretion. Devoid of
any pertinent evidentiary support that illegal misuse of PDAF in the form of
kickbacks has become a common exercise of unscrupulous Members of Congress,
the Court cannot indulge the petitioner’s request for rejection of a law which is
outwardly legal and capable of lawful enforcement.

PORK BARREL:

The Members of Congress are then requested by the President to recommend

projects and programs which may be funded from the PDAF. The list submitted by
the Members of Congress is endorsed by the Speaker of the House of
Representatives to the DBM, which reviews and determines whether such list of
projects submitted are consistent with the guidelines and the priorities set by the
Executive.”33 This demonstrates the power given to the President to execute
appropriation laws and therefore, to exercise the spending per se of the budget.

As applied to this case, the petition is seriously wanting in establishing that

individual Members of Congress receive and thereafter spend funds out of PDAF.
So long as there is no showing of a direct participation of legislators in the actual
spending of the budget, the constitutional boundaries between the Executive and
the Legislative in the budgetary process remain intact.
_______________

NOTES:
POWER OF JUDICIAL REVIEW:
(1) there must be an actual case or controversy calling for the exercise of judicial
power;
(2) (2) the person challenging the act must have the standing to question the
validity of the subject act or issuance; otherwise stated, he must have a personal
and substantial interest in the case such that he has sustained, or will sustain, direct
injury as a result of its enforcement;
(3) (3) the question of constitutionality must be raised at the earliest opportunity;
and
(4) (4) the issue of constitutionality must be the very lis mota of the case.

Advocates and Adherents of Social Justice for School Teachers and Allied Workers
(AASJS) Member Hector Gumangab Calilung vs.
The Honourable Simeon Datumanong,
in his official capacity as the Secretary of Justice (CASE DIGEST)

11 May 2017

GR No. 160869

TOPIC:

Loss and Re-Acquisition of Citizenship

FACTS:

Petitioner prays for a writ of prohibition be issued to stop respondent from implementing
RA 9225, or Act Making the Citizenship of the Philippine Citizens Who Acquire Foreign
Citizenship Permanent, Amending for the Purpose Commonwealth Act No. 63, as Amended,
and for Other Purposes. Petitioner avers that said Act is unconstitutional as it violates
Section 5, Article IV of the 1987 Constitution: “Dual allegiance of citizens is inimical to the
national interest and shall be dealt with by law.”

ISSUE/S:

1. Whether R.A. 9225 is unconstitutional

2. Whether the court jurisdiction to pass upon the issue of dual allegiance

RULING:

No. It is clear that the intent of the legislature in drafting Rep. Act No. 9225 is to do away
with the provision in Commonwealth Act No. 635 which takes away Philippine citizenship
from natural-born Filipinos who become naturalized citizens of other countries. What Rep.
Act No. 9225 does is allow dual citizenship to natural-born Filipino citizens who have
lost Philippine citizenship by reason of their naturalization as citizens of a foreign
country. On its face, it does not recognize dual allegiance. By swearing to the supreme
authority of the Republic, the person implicitly renounces his foreign citizenship. Plainly,
from Section 3, Rep. Act No. 9225 stayed clear out of the problem of dual allegiance and
shifted the burden of confronting the issue of whether or not there is dual allegiance to the
concerned foreign country. What happens to the other citizenship was not made a concern
of Rep. Act No. 9225.

G.R. No. 188179, January 22, 2013

HENRY R. GIRON, Petitioner, v. COMMISSION ON
ELECTIONS, Respondent, ALMARIO E. FRANCISCO, FEDERICO S. JONG
JR., and RICARDO L. BAES JR., Petitioners-in-Intervention.

FACTS:
Petitioner Henry Giron (Giron) and petitioners-in-intervention assail the
constitutionality of Section 12 (Substitution of Candidates) and Section 14
(Repealing Clause) of Republic Act No. (R.A.)9006, otherwise known as the Fair
Election Act.
Giron asserts that the insertion of Sections 12 and 14 in the Fair Election Act
violates Section 26(1), Art. VI of the 1987 Constitution, which specifically
requires: Every bill passed by the Congress shall embrace only one subject
which shall be expressed in the title thereof. He avers that these provisions are
unrelated to the main subject of the Fair Election Act: the lifting of the political ad
ban. Section 12 refers to the treatment of the votes cast for substituted
candidates after the official ballots have been printed, while Section 14 pertains
to the repeal of Section 67 (Candidates holding elective office) of Batas
Pambansa Blg. 881, otherwise known as the Omnibus Election Code. Section 67
of this law concerns the ipso facto resignation of elective officials immediately
after they file their respective certificates of candidacy for an office other than that
which they are currently holding in a permanent capacity.

ISSUE: Whether or not the inclusion of Sections 12 and 14 in the Fair Election

Act violates Section 26(1), Article VI of the 1987 Constitution, or the one subject-
one title rule?

HELD: The petition must fail.

POLITICAL LAW: one subject-one title rule
It is a well-settled rule that courts are to adopt a liberal interpretation in favor of
the constitutionality of a legislation, as Congress is deemed to have enacted a
valid, sensible, and just law. Because of this strong presumption, the one who
asserts the invalidity of a law has to prove that there is a clear, unmistakable, and
unequivocal breach of the Constitution; otherwise, the petition must fail.
The Court finds that the present case fails to present a compelling reason that
would surpass the strong presumption of validity and constitutionality in favor of
the Fair Election Act.
Constitutional provisions relating to the subject matter and titles of statutes
should not be so narrowly construed as to cripple or impede the power of
legislation. The requirement that the subject of an act shall be expressed in its
title should receive a reasonable and not a technical construction. It is sufficient if
the title be comprehensive enough reasonably to include the general object
which a statute seeks to effect, without expressing each and every end and
means necessary or convenient for the accomplishing of that object. Mere details
need not be set forth. The title need not be an abstract or index of the Act.
Moreover, the avowed purpose of the constitutional directive that the subject of a
bill should be embraced in its title is to apprise the legislators of the purposes, the
nature and scope of its provisions, and prevent the enactment into law of matters
which have not received the notice, action and study of the legislators and the
public.
Petition DISMISSED.

Tobias vs Abalos, G.R. No. L-114783 case brief summary

December 8, 1994

Facts: Complainants, invoking their right as taxpayers and as residents of Mandaluyong, filed a petition
questioning the constitutionality of Republic Act No. 7675, otherwise known as "An Act Converting the
Municipality of Mandaluyong into a Highly Urbanized City to be known as the City of Mandaluyong."
Before the enactment of the law, Mandaluyong and San Juan belonged to the same legislative district.
The petitioners contended that the act is unconstitutional for violation of three provisions of the
constitution. First, it violates the one subject one bill rule. The bill provides for the conversion of
Mandaluyong to HUC as well as the division of congressional district of San Juan and Mandaluyong into
two separate district. Second, it also violate Section 5 of Article VI of the Constitution, which provides that
the House of Representatives shall be composed of not more than two hundred and fifty members, unless
otherwise fixed by law. The division of San Juan and Mandaluyong into separate congressional districts
increased the members of the House of Representative beyond that provided by the Constitution. Third,
Section 5 of Article VI also provides that within three years following the return of every census, the
Congress shall make a reapportionment of legislative districts based on the standard provided in Section
5. Petitioners stated that the division was not made pursuant to any census showing that the minimum
population requirement was attained.

Issue:
(1) Does RA 7675 violate the one subject one bill rule?
(2) Does it violate Section 5(1) of Article VI of the Constitution on the limit of number of rep?
(3) Is the inexistence of mention of census in the law show a lack of constitutional requirement?
Rulings: The Supreme Court ruled that the contentions are devoid of merit. With regards to the first
contention of one subject one bill rule, the creation of a separate congressional district for Mandaluyong is
not a separate and distinct subject from its conversion into a HUC but is a natural and logical
consequence. In addition, a liberal construction of the "one title-one subject" rule has been invariably
adopted by this court so as not to cripple or impede legislation.
The second contention that the law violates the present limit of the number of representatives, the
provision of the section itself show that the 250 limit is not absolute. The Constitution clearly provides that
the House of Representatives shall be composed of not more than 250 members, "unless otherwise
provided by law”. Therefore, the increase in congressional representation mandated by R.A. No. 7675 is
not unconstitutional.
With regards, to the third contention that there is no mention in the assailed law of any census to show
that Mandaluyong and San Juan had each attained the minimum requirement of 250,000 inhabitants to
justify their separation into two legislative districts, unless otherwise proved that the requirements were
not met, the said Act enjoys the presumption of having passed through the regular congressional
processes, including due consideration by the members of Congress of the minimum requirements for the
establishment of separate legislative district
The petition was dismissed for lack of merit.

 
Cordero v. Hon. Cabatuando
Case No. 81G.R. No. L-14542 (October 31, 1962)Chapter I, Page 12, Footnote
No.47FACTS:
Republic Act No. 1199 is the Agricultural Tenancy Act of thePhilippines.Section 54 of this act
expressed that indigent tenants should berepresented by Public Defendant of Department of
Labor.Congress then amended this in Republic Act No. 2263: “An ActAmending Certain
Sections of Republic Act No. 1199.” Section 19of the amendatory act says that mediation
of tenancy disputesfalls under authority of Secretary of Justice. Section 20 alsoprovides that
indigent tenants shall be represented by trialattorney of the Tenancy Mediation Commission.
ISSUE:
W/N Sections 19 and 20 of Rep. Act No. 2263 is unconstitutionalbecause of the constitutional
provision that “No bill which may beenacted into law shall embrace more than one subject which
shallbe expressed in the title of the bill.”
HELD:
Sections 19 and 20 are constitutional. The constitutional requirement is complied with as long
the lawhas a single general subject, which is the Agricultural TenancyAct, and the amendatory
provisions no matter how diverse theymay be, so long as they are not inconsistent with or foreign
to thegeneral subject, will be regarded as valid. Constitutionalprovisions relating to subject
matter and titles of statutes should not be so narrowly construed as to cripple or impede
properlegislation.

Cawaling vs. COMELEC G.R. No. 146319, October 26, 2001 Cawaling vs. Executive Secretary G.R.
No. 146342, October 26, 2001 Facts: Before us are two (2) separate petitions challenging the
constitutionality of Republic Act No. 8806 which created the City of Sorsogon and the validity of the
plebiscite conducted pursuant thereto. On August 16, 2000, former President Joseph E. Estrada
signed into law R.A. No. 8806, an "Act Creating The City Of Sorsogon By Merging The Municipalities
Of Bacon And Sorsogon In The Province Of Sorsogon, And Appropriating Funds Therefor." The
COMELEC a plebiscite in the Municipalities of Bacon and Sorsogon and submitted the matter for
ratification proclaimed the creation of the City of Sorsogon as having been ratified and approved by
the majority of the votes cast in the plebiscite. Invoking his right as a resident and taxpayer, the
petitioner filed the present petition for certiorari seeking the annulment of the plebiscite on the
following grounds: A. The December 16, 2000 plebiscite was conducted beyond the required 120-
day period from the approval of R.A. 8806, in violation of Section 54 thereof; and B. Respondent
COMELEC failed to observe the legal requirement of twenty (20) day extensive information
campaign in the Municipalities of Bacon and Sorsogon before conducting the plebiscite. Petitioner
instituted another petition declaring enjoin R.A. No. 8806 unconstitutional ,contending, in essence,
that: 1. The creation of Sorsogon City by merging two municipalities violates Section 450(a) of the
Local Government Code of 1991 (in relation to Section 10, Article X of the Constitution) which
requires that only "a municipality or a cluster of barangays may be converted into a component city";
and 2. R.A. No. 8806 contains two (2) subjects, namely, the (a) creation of the City of Sorsogon and
the (b) abolition of the Municipalities of Bacon and Sorsogon, thereby violating the "one subject-one
bill" rule prescribed by Section 26(1), Article VI of the Constitution. Petitioner contends that under
Section 450(a) of the Code, a component city may be created only by converting "a municipality or a
cluster of barangays," not by merging two municipalities, as what R.A. No. 8806 has done. Issue: (1)
WON a component city may be created by merging two municipalities. (2) WON there exist a
"compelling" reason for merging the Municipalities of Bacon and Sorsogon in order to create the City
of Sorsogon (3) WON R.A. No. 8806 violatethe "one subject-one bill" rule enunciated in Section 26
(1), Article VI of the Constitution (4) WON R.A No 8806 is unconstitutional Held: Yes. Petitioner's
constricted reading of Section 450(a) of the Code is erroneous. The phrase "A municipality or a
cluster of barangays may be converted into a component city" is not a criterion but simply one of the
modes by which a city may be created. Section 10, Article X of the Constitution allows the merger of
local government units to create a province city, municipality or barangay in accordance with the
criteria established by the Code. the creation of an entirely new local government unit through a
division or a merger of existing local government units is recognized under the Constitution, provided
that such merger or division shall comply with the requirements prescribed by the Code. (2) This
argument goes into the wisdom of R.A. No. 8806, a matter which we are not competent to rule. In
Angara v. Electoral Commission, this Court, made it clear that "the judiciary does not pass upon
questions of wisdom, justice or expediency of legislation." In the exercise of judicial power, we are
allowed only "to settle actual controversies involving rights which are legally demandable and
enforceable," and "may not annul an act of the political departments simply because we feel it is
unwise or impractical . 3) No. There is only one subject embraced in the title of the law, that is, the
creation of the City of Sorsogon. The abolition/cessation of the corporate existence of the
Municipalities of Bacon and Sorsogon due to their merger is not a subject separate and distinct from
the creation of Sorsogon City. Such abolition/cessation was but the logical, natural and inevitable
consequence of the merger. The rule is sufficiently complied with if the title is comprehensive
enough as to include the general object which the statute seeks to effect, and where, as here, the
persons interested are informed of the nature, scope and consequences of the proposed law and its
operation. (4) No. Every statute has in its favor the presumption of constitutionality. This presumption
is rooted in the doctrine of separation of powers which enjoins upon the three coordinate d
epartments of the Government a becoming courtesy for each other's acts. The theory is that every
law, being the joint act of the Legislature and the Executive, has passed careful scrutiny to ensure
that it is in accord with the fundamental law. This Court, however, may declare a law, or portions
thereof, unconstitutional where a petitioner has shown a clear and unequivocal breach of the
Constitution, not merely a doubtful or argumentative one. In other words the grounds for nullity must
be beyond reasonable doubt, for to doubt is to sustain. We hold that petitioner has failed to present
clear and convincing proof to defeat the presumption of constitutionality of R.A. No. 8806.

BARANGAY ASSOCIATION FOR NATIONAL ADVANCEMENT v. COMELEC, GR No.

177508, 2009-08-07
Facts:
Before the Court is a petition for prohibition[1] with a prayer for the issuance of a temporary
restraining order or a writ of preliminary injunction[2] filed by petitioner Barangay
Association for National Advancement and Transparency
(BANAT) Party List (petitioner) assailing the constitutionality of Republic Act No. 9369 (RA
9369)[3] and enjoining respondent Commission on Elections (COMELEC) from
implementing the statute.
Petitioner assails the following provisions of RA 9369:

1. Section 34 which provides:

SEC. 34. Sec. 26 of Republic Act No. 7166 is hereby amended to read as follows:
"SEC. 26. Official Watchers. - Every registered political party or coalition of political parties,
and every candidate shall each be entitled to one watcher in every polling place and
canvassing center: Provided That, candidates for the Sangguniang Panlalawigan,...
Sangguniang Panlunsod, or Sangguniang Bayan belonging to the same slate or ticket shall
collectively be entitled to only one watcher.
"The dominant majority party and dominant minority party, which the Commission shall
determine in accordance with law, shall each be entitled to one official watcher who shall be
paid a fixed per diem of four hundred pesos (400.00).
Additionally, the poll watchers of the dominant majority and minority parties in a precinct
shall, if available, affix their signatures and thumbmarks on the election returns for that
precinct.[36] The dominant majority and minority parties shall also be... given a copy of the
certificates of canvass[37] and election returns[38] through their respective poll watchers.
Clearly, poll watchers play an important role in the elections.
Moreover, while the contracting parties may establish such stipulations, clauses, terms, and
conditions as they may deem convenient, such stipulations should not be contrary to law,
morals, good customs, public order, or public policy
Issues:
hether Section 34 violates Section 10, Article III of the Constitution.[8]
Ruling:
The petition has no merit.
is settled that every statute is presumed to be constitutional.[9] The presumption is that the
legislature intended to enact a valid, sensible and just law. Those who petition the Court to
declare a law unconstitutional must show that there is a clear and... unequivocal breach of
the Constitution, not merely a doubtful, speculative or argumentative one; otherwise, the
petition must fail.[10]
In this case, petitioner failed to justify why RA 9369 and the assailed provisions should be
declared unconstitutional.
RA 9369 does not violate Section 26(1), Article VI of the Constitution
Petitioner alleges that the title of RA 9369 is misleading because it speaks of poll
automation but contains substantial provisions dealing with the manual canvassing of
election returns. Petitioner also alleges that Sections 34, 37, 38, and 43 are neither
embraced in the title... nor germane to the subject matter of RA 9369.
Both the COMELEC and the OSG maintain that the title of RA 9369 is broad enough to
encompass topics which deal not only with the automation process but with everything
related to its purpose encouraging a transparent, credible, fair, and accurate elections.
Section 34 does not violate Section 10, Article III of the Constitution... assails the
constitutionality of the provision which fixes the per diem of poll watchers of the dominant
majority and dominant minority parties at Pon election day. Petitioner argues that this
violates the freedom of the parties to contract and their right to fix the terms and...
conditions of the contract they see as fair, equitable and just. Petitioner adds that this is a
purely private contract using private funds which cannot be regulated by law.
The OSG argues that petitioner erroneously invoked the non-impairment clause because
this only applies to previously perfected contracts. In this case, there is no perfected contact
and, therefore, no obligation will be impaired.
Both the COMELEC and the OSG argue that the law is a proper exercise of police power
and it will prevail over a contract. According to the COMELEC, poll watching is not just an
ordinary contract but is an agreement with the solemn duty to ensure the sanctity of votes.
The role... of poll watchers is vested with public interest which can be regulated by
Congress in the exercise of its police power. The OSG further argues that the assurance
that the poll watchers will receive fair and equitable compensation promotes the general
welfare. The OSG also states... that this was a reasonable regulation considering that the
dominant majority and minority parties will secure a copy of the election returns and are
given the right to assign poll watchers inside the polling precincts.
There is no violation of the non-impairment clause. First, the non- impairment clause is
limited in application to laws that derogate from prior acts or contracts by enlarging,
abridging or in any manner changing the intention of the parties.[32] There is... impairment if
a subsequent law changes the terms of a contract between the parties, imposes new
conditions, dispenses with those agreed upon or withdraws remedies for the enforcement of
the rights of the parties.[33]
As observed by the OSG, there is no existing contract yet and, therefore, no enforceable
right or demandable obligation will be impaired. RA 9369 was enacted more than three
months prior to the 14 May 2007 elections. Hence, when the dominant majority and minority
parties hired... their respective poll watchers for the 14 May 2007 elections, they were
deemed to have incorporated in their contracts all the provisions of RA 9369.
Second, it is settled that police power is superior to the non-impairment clause.[34] The
constitutional guaranty of non-impairment of contracts is limited by the exercise of the police
power of the State, in the interest of public health, safety, morals,... and general welfare of
the community.
Therefore, assuming there were existing contracts, Section 34 would still be constitutional
because the law was enacted in the exercise of the police power of the State to promote the
general welfare of the people. We agree with the COMELEC that the role of poll watchers
is... invested with public interest. In fact, even petitioner concedes that poll watchers not
only guard the votes of their respective candidates or political parties but also ensure that all
the votes are properly counted. Ultimately, poll watchers aid in fair and honest elections.
Poll watchers help ensure that the elections are transparent, credible, fair, and accurate.
The regulation of the per diem of the poll watchers of the dominant majority and minority
parties promotes the general welfare of the community and is a valid exercise of police...
power.

Tolentino v. Secretary of Finance

Arturo Tolentino v. Secretary of Finance and Commissioner of Internal Revenue
G.R. No. 115455; October 30, 1995
Mendoza, J.:

FACTS:
The present case involves motions seeking reconsideration of the Court’s decision
dismissing the petitions for the declaration of unconstitutionality of R.A. No. 7716,
otherwise known as the Expanded Value-Added Tax Law. The motions, of which there
are 10 in all, have been filed by the several petitioners.

The Philippine Press Institute, Inc. (PPI) contends that by removing the exemption of
the press from the VAT while maintaining those granted to others, the law
discriminates against the press. At any rate, it is averred, “even nondiscriminatory
taxation of constitutionally guaranteed freedom is unconstitutional”, citing in support
of the case of Murdock v. Pennsylvania.

Chamber of Real Estate and Builders Associations, Invc., (CREBA), on the other hand,
asserts that R.A. No. 7716 (1) impairs the obligations of contracts, (2) classifies
transactions as covered or exempt without reasonable basis and (3) violates the rule
that taxes should be uniform and equitable and that Congress shall “evolve a
progressive system of taxation”.

Further, the Cooperative Union of the Philippines (CUP), argues that legislature was to
adopt a definite policy of granting tax exemption to cooperatives that the present
Constitution embodies provisions on cooperatives. To subject cooperatives to the VAT
would, therefore, be to infringe a constitutional policy.
ISSUE:
Whether or not, based on the aforementioned grounds of the petitioners, the
Expanded Value-Added Tax Law should be declared unconstitutional.

RULING:
No. With respect to the first contention, it would suffice to say that since the law
granted the press a privilege, the law could take back the privilege anytime without
offense to the Constitution. The reason is simple: by granting exemptions, the State
does not forever waive the exercise of its sovereign prerogative. Indeed, in withdrawing
the exemption, the law merely subjects the press to the same tax burden to which
other businesses have long ago been subject. The PPI asserts that it does not really
matter that the law does not discriminate against the press because “even
nondiscriminatory taxation on constitutionally guaranteed freedom is
unconstitutional.” The Court was speaking in that case (Murdock v. Pennsylvania) of a
license tax, which, unlike an ordinary tax, is mainly for regulation. Its imposition on the
press is unconstitutional because it lays a prior restraint on the exercise of its right. The
VAT is, however, different. It is not a license tax. It is not a tax on the exercise of a
privilege, much less a constitutional right. It is imposed on the sale, barter, lease or
exchange of goods or properties or the sale or exchange of services and the lease of
properties purely for revenue purposes. To subject the press to its payment is not to
burden the exercise of its right any more than to make the press pay income tax or
subject it to general regulation is not to violate its freedom under the Constitution.

Anent the first contention of CREBA, it has been held in an early case that even though
such taxation may affect particular contracts, as it may increase the debt of one person
and lessen the security of another, or may impose additional burdens upon one class
and release the burdens of another, still the tax must be paid unless prohibited by the
Constitution, nor can it be said that it impairs the obligation of any existing contract in
its true legal sense. It is next pointed out that while Section 4 of R.A. No. 7716 exempts
such transactions as the sale of agricultural products, food items, petroleum, and
medical and veterinary services, it grants no exemption on the sale of real property
which is equally essential. The sale of food items, petroleum, medical and veterinary
services, etc., which are essential goods and services was already exempt under
Section 103, pars. (b) (d) (1) of the NIRC before the enactment of R.A. No. 7716.
Petitioner is in error in claiming that R.A. No. 7716 granted exemption to these
transactions while subjecting those of petitioner to the payment of the VAT. Finally, it is
contended that R.A. No. 7716 also violates Art. VI, Section 28(1) which provides that
“The rule of taxation shall be uniform and equitable. The Congress shall evolve a
progressive system of taxation”. Nevertheless, equality and uniformity of taxation
mean that all taxable articles or kinds of property of the same class be taxed at the
same rate. The taxing power has the authority to make reasonable and natural
classifications for purposes of taxation. To satisfy this requirement it is enough that the
statute or ordinance applies equally to all persons, firms, and corporations placed in
similar situation. Furthermore, the Constitution does not really prohibit the imposition
of indirect taxes which, like the VAT, are regressive. What it simply provides is that
Congress shall “evolve a progressive system of taxation.” The constitutional provision
has been interpreted to mean simply that “direct taxes are . . . to be preferred [and] as
much as possible, indirect taxes should be minimized.” The mandate to Congress is not
to prescribe, but to evolve, a progressive tax system.

As regards the contention of CUP, it is worth noting that its theory amounts to saying
that under the Constitution cooperatives are exempt from taxation. Such theory is
contrary to the Constitution under which only the following are exempt from taxation:
charitable institutions, churches, and parsonages, by reason of Art. VI, §28 (3), and non-
stock, non-profit educational institutions by reason of Art. XIV, §4 (3).
With all the foregoing ratiocinations, it is clear that the subject law bears no
constitutional infirmities and is thus upheld.

Fabian v. Desierto, G.R. No. 129742, 16

September 1998
En Banc
[REGALADO, J.]
FACTS: Petitioner Teresita G. Fabian was the major stockholder and president of PROMAT Construction
Development Corporation (PROMAT) which participated in the bidding for government construction
projects including those under the First Manila Engineering District (FMED), and private respondent
Nestor V. Agustin, incumbent District Engineer, reportedly taking advantage of his official position,
inveigled petitioner into an amorous relationship. After misunderstandings and unpleasant incidents,
Fabian eventually filed the aforementioned administrative case against Agustin in a letter-complaint. The
Graft Investigator of the Ombudsman issued a resolution finding private respondent guilty of grave
misconduct and ordering his dismissal from the service with forfeiture of all benefits under the law. On a
motion for reconsideration, Agustin was exonerated of the administrative charges.
In the present appeal, petitioner argues that Section 27 of Republic Act No. 6770 (Ombudsman Act of
1989) pertinently provides that —

In all administrative disciplinary cases, orders, directives or decisions of the Office of the Ombudsman
may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt
of the written notice of the order, directive or decision or denial of the motion for reconsideration  in
accordance with Rule 45 of the Rules of Court (Emphasis supplied)
 

ISSUE#1: Can the Court resolve the constitutionality of Section 27 of Republic Act No. 6770 not raised in
the trial?
HELD#1: YES.
Constitutional questions, not raised in the regular and orderly procedure in the trial are ordinarily rejected
unless the jurisdiction of the court below or that of the appellate court is involved in which case it may be
raised at any time or on the court’s own motion.  The Court ex mero motu may take cognizance of lack of
jurisdiction at any point in the case where that fact is developed. The court has a clearly recognized right
to determine its own jurisdiction in any proceeding.
ISSUE#2: Is Section 27 of Republic Act No. 6770 unconstitutional?
HELD#2: YES.
Section 27 of Republic Act No. 6770 cannot validly authorize an appeal to this Court from decisions of the
Office of the Ombudsman in administrative disciplinary cases. It consequently violates the proscription in
Section 30, Article VI of the Constitution against a law which increases the appellate jurisdiction of this
Court. No countervailing argument has been cogently presented to justify such disregard of the
constitutional prohibition which, as correctly explained in First Lepanto Ceramics, Inc. vs. The Court of
Appeals, et al.  was intended to give this Court a measure of control over cases placed under its appellate
jurisdiction. Otherwise, the indiscriminate enactment of legislation enlarging its appellate jurisdiction would
unnecessarily burden the Court.
As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck down as
unconstitutional, and in line with the regulatory philosophy adopted in appeals from quasi-judicial
agencies in the 1997 Revised Rules of Civil Procedure, appeals from decisions of the Office of the
Ombudsman in administrative disciplinary cases should be taken to the Court of Appeals under the
provisions of Rule 43.

FIRST LEPANTO CERAMICS v. CA, GR No. 110571, 1994-10-07

Facts:
Petitioner's contention is that Circular No. 1-91 cannot be deemed to have superseded art.
82 of the Omnibus Investments Code of 1987... because the Code, which President Aquino
promulgated in the exercise of legislative authority, is in the nature of a... substantive act of
Congress defining the jurisdiction of courts pursuant to Art. VIII, § 2 of the Constitution,
while the circular is a rule of procedure which this Court promulgated pursuant to its rule-
making power under Art. VIII, § 5(5).
Petitioner questions... hat although the right to appeal granted by art. 82 of the Code is a
substantive right which cannot be modified by a rule of procedure, nonetheless,... questions
concerning where and in what manner the appeal can be brought are only matters of...
procedure which this Court has the power to regulate.
Issues:
decisions and final orders of the BOI must be directly appealed to this Court.
Ruling:
Judicial review of the decisions and final orders of the BOI was originally provided for in the
Omnibus Investments Code of 1981 (P.D. No. 1789),[2] art. 78 of which stated:
ART. 78. Judicial Relief. - All orders or decisions of the Board in cases involving the
provisions of this Code shall immediately be executory. No appeal from the order or
decision of the Board by the party adversely affected shall stay such order... or decision:
Provided, That all appeals shall be filed directly with the Supreme Court within thirty (30)
days from receipt of the order or decision.
Art. 78 was thereafter amended by B.P. Blg. 129,... by granting... exclusive appellate
jurisdiction to... the Court of Appeals... over the decisions and final orders of... quasi-judicial
agencies
When the Omnibus Investments Code of 1987 (E.O. No. 226) was promulgated on July 17,
1987, the right to appeal from the decisions and final orders of the BOI to the Supreme
Court was again granted
Thus, the present Code provides:
ART. 82. Judicial Relief. - All orders or decisions of the Board in cases involving the
provisions of this Code shall immediately be executory. No appeal from the order or
decision of the Board by the party adversely affected shall stay such order... or decision:
Provided, That all appeals shall be filed directly with the Supreme Court within thirty (30)
days from receipt of the order or decision.
however, the present Constitution had taken effect
The Constitution now provides in Art. VI, § 30 that "No law shall be passed increasing the
appellate jurisdiction of the Supreme Court as provided in this
Constitution without its advice and concurrence."
Now, art. 82 of the 1987 Omnibus Investments Code, by providing for direct appeals to the
Supreme Court from the decisions and final orders of the BOI, increases the appellate
jurisdiction of this Court. Since it was enacted without the advice and concurrence of this
Court,... this provision never became effective, with the result that it can never be deemed
to have amended BP Blg. 129
WHEREFORE, the motion for reconsideration is DENIED.

ATTY. ROMULO B. MACALINTAL v. COMELEC, GR No. 157013, 2003-07-10

Facts:
Macalintal, a member of the Philippine Bar, seek... declaration that certain provisions of
Republic Act No. 9189 (The Overseas Absentee Voting Act of
2003)... suffer from constitutional infirmity.
R.A. No. 9189, entitled, "An Act Providing for A System of Overseas Absentee Voting by
Qualified Citizens of the Philippines Abroad, Appropriating Funds Therefor, and for Other
Purposes," appropriates funds under Section 29 thereof which provides that a
supplemental... budget on the General Appropriations Act of the year of its enactment into
law shall provide for the necessary amount to carry out its provisions. Taxpayers, such as
herein petitioner, have the right to restrain officials from wasting public funds through the
enforcement of an... unconstitutional statute.
The challenged provision of law involves a public right that affects a great number of
citizens. The Court has adopted the policy of taking jurisdiction over cases whenever the
petitioner has seriously and convincingly presented an issue of transcendental significance
to the
Filipino people.
he need to consider the constitutional issues raised before the Court is... buttressed by the
fact that it is now more than fifteen years since the ratification of the 1987 Constitution
requiring Congress to provide a system for absentee voting by qualified Filipinos... abroad.
Thus, strong reasons of public policy demand that the Court resolves the instant petition...
and determine whether Congress has acted within the limits of the Constitution or if it had
gravely abused the discretion entrusted to it.
Petitioner posits that Section 5(d) is unconstitutional because it violates Section 1, Article V
of the 1987 Constitution which requires that the voter must be a resident in the Philippines
for at least one year and in the place where he proposes to vote for at least six... months
immediately preceding an election.
He claims that the right of suffrage... should not be granted to anyone who, on the date of
the election, does not possess the qualifications provided for by Section 1, Article V of the
Constitution.
Issues:
Does Section 5(d) of Rep. Act No. 9189 allowing the registration of voters who are
immigrants or permanent residents in other countries... by their mere act of executing an
affidavit expressing their intention to return to the Philippines, violate the residency
requirement in
Section 1 of Article V of the Constitution?
Ruling:
R.A. No. 9189 was enacted in obeisance to the mandate of the first paragraph of Section 2,
Article V of the Constitution that Congress shall provide a system for voting by qualified
Filipinos abroad.
It must be stressed that Section 2 does not provide for the parameters of... the exercise of
legislative authority in enacting said law. Hence, in the absence of restrictions, Congress is
presumed to have duly exercised its function as defined in Article VI (The Legislative
Department) of the Constitution.
Such statutes are regarded as conferring a privilege and not a right, or an absolute right.
When the legislature chooses to grant the right by statute, it must operate with equality
among all the class to which it is granted; but statutes of this nature may be limited in... their
application to particular types of elections. The statutes should be construed in the light of
any constitutional provisions affecting registration and elections, and with due regard to their
texts prior to amendment and to predecessor statutes and... the decisions thereunder; they
should also be construed in the light of the circumstances under which they were enacted;
and so as to carry out the objects thereof, if this can be done without doing violence to their
provisions and mandates. Further, in passing on... statutes regulating absentee voting, the
court should look to the whole and every part of the election laws, the intent of the entire
plan, and reasons and spirit of their adoption, and try to give effect to every portion thereof.
Ordinarily, an absentee is not a resident and vice versa; a person cannot be at the same
time, both a resident and an absentee.[30] However, under our election laws and the
countless pronouncements of the Court pertaining to elections, an absentee... remains
attached to his residence in the Philippines as residence is considered synonymous with
domicile.
For political purposes the concepts of residence and domicile are dictated by the peculiar
criteria of political laws. As these concepts have evolved in our election law, what has
clearly and unequivocally emerged is the fact that residence for election purposes... is used
synonymously with domicile.
Thus, the Constitutional Commission recognized the fact that while millions of Filipinos
reside abroad principally for economic reasons and hence they contribute in no small
measure to the economic uplift of this country, their voices are marginal insofar as the
choice of... this country's leaders is concerned.
It is in pursuance of that intention that the Commission provided for Section 2 immediately
after the residency requirement of Section 1. By the doctrine of necessary implication in
statutory construction, which may be applied in construing constitutional... provisions,... the
strategic location of Section 2 indicates that the Constitutional Commission provided for an
exception to the actual residency requirement of Section 1 with respect to qualified Filipinos
abroad. The same Commission has in... effect declared that qualified Filipinos who are not
in the Philippines may be allowed to vote even though they do not satisfy the residency
requirement in Section 1, Article V of the Constitution.
Contrary to the claim of petitioner, the execution of the affidavit itself is not the enabling or
enfranchising act. The affidavit required in Section 5(d) is not only proof of the intention of
the immigrant or permanent resident to go back and resume residency in the
Philippines, but more significantly, it serves as an explicit expression that he had not in fact
abandoned his domicile of origin. Thus, it is not correct to say that the execution of the
affidavit under Section 5(d) violates the Constitution that proscribes "provisional...
registration or a promise by a voter to perform a condition to be qualified to vote in a political
exercise."
To repeat, the affidavit is required of immigrants and permanent residents abroad because
by their status in their host countries, they are presumed to have relinquished their intent to
return to this country; thus, without the affidavit, the presumption of abandonment of
Philippine domicile shall remain.
It must be emphasized that Section 5(d) does not only require an affidavit or a promise to
"resume actual physical permanent residence in the Philippines not later than three years
from approval of his/her registration," the Filipinos abroad must also declare that they
have... not applied for citizenship in another country. Thus, they must return to the
Philippines; otherwise, their failure to return "shall be cause for the removal" of their names
"from the National Registry of Absentee Voters and his/her permanent disqualification to
vote in... absentia."
Thus, Congress crafted a process of registration by which a Filipino voter permanently
residing abroad who is at least eighteen years old, not otherwise disqualified by law, who
has not relinquished Philippine citizenship and who has not actually abandoned his/her...
intentions to return to his/her domicile of origin, the Philippines, is allowed to register and
vote in the Philippine embassy, consulate or other foreign service establishments of the
place which has jurisdiction over the country where he/she has indicated his/her address
for... purposes of the elections, while providing for safeguards to a clean election.
Contrary to petitioner's claim that Section 5(d) circumvents the Constitution, Congress
enacted the law prescribing a system of overseas absentee voting in compliance with the
constitutional mandate. Such mandate expressly requires that Congress provide a system
of... absentee voting that necessarily presupposes that the "qualified citizen of the
Philippines abroad" is not physically present in the country. The provisions of Sections 5(d)
and 11 are components of the system of overseas absentee voting established by R.A. No.
9189. The... qualified Filipino abroad who executed the affidavit is deemed to have retained
his domicile in the Philippines. He is presumed not to have lost his domicile by his physical
absence from this country. His having become an immigrant or permanent resident of his
host country does... not necessarily imply an abandonment of his intention to return to his
domicile of origin, the Philippines. Therefore, under the law, he must be given the
opportunity to express that he has not actually abandoned his domicile in the Philippines by
executing the affidavit... required by Sections 5(d) and 8(c) of the law.

ABAKADA GURO PARTY LIST VS PURISIMA

G.R. No. 166715             August 14, 2008

Facts:

Petitioners seeks to prevent respondents from implementing and enforcing Republic Act (RA) 9335.
R.A. 9335 was enacted to optimize the revenue-generation capability and collection of the Bureau of
Internal Revenue (BIR) and the Bureau of Customs (BOC). The law intends to encourage BIR and
BOC officials and employees to exceed their revenue targets by providing a system of rewards and
sanctions through the creation of a Rewards and Incentives Fund (Fund) and a Revenue Performance
Evaluation Board (Board). It covers all officials and employees of the BIR and the BOC with at least
six months of service, regardless of employment status.

Petitioners, invoking their right as taxpayers filed this petition challenging the constitutionality of RA
9335, a tax reform legislation. They contend that, by establishing a system of rewards and incentives,
the law “transforms the officials and employees of the BIR and the BOC into mercenaries and bounty
hunters” as they will do their best only in consideration of such rewards. Thus, the system of rewards
and incentives invites corruption and undermines the constitutionally mandated duty of these officials
and employees to serve the people with utmost responsibility, integrity, loyalty and efficiency.

Petitioners also claim that limiting the scope of the system of rewards and incentives only to officials
and employees of the BIR and the BOC violates the constitutional guarantee of equal protection.
There is no valid basis for classification or distinction as to why such a system should not apply to
officials and employees of all other government agencies.

In addition, petitioners assert that the law unduly delegates the power to fix revenue targets to the
President as it lacks a sufficient standard on that matter. While Section 7(b) and (c) of RA 9335
provides that BIR and BOC officials may be dismissed from the service if their revenue collections fall
short of the target by at least 7.5%, the law does not, however, fix the revenue targets to be
achieved. Instead, the fixing of revenue targets has been delegated to the President without sufficient
standards. It will therefore be easy for the President to fix an unrealistic and unattainable target in
order to dismiss BIR or BOC personnel.

Finally, petitioners assail the creation of a congressional oversight committee on the ground that it
violates the doctrine of separation of powers. While the legislative function is deemed accomplished
and completed upon the enactment and approval of the law, the creation of the congressional
oversight committee permits legislative participation in the implementation and enforcement of the
law.

Issues:

1. Whether or not the scope of the system of rewards and incentives limitation to officials and
employees of the BIR and the BOC violates the constitutional guarantee of equal protection.
2. Whether or not there was an unduly delegation of power to fix revenue targets to the
President.
3. Whether or not the doctrine of separation of powers has been violated in the creation of a
congressional oversight committee.

Rulings:

1. The equal protection clause recognizes a valid classification, that is, a classification that has a
reasonable foundation or rational basis and not arbitrary. 22 With respect to RA 9335, its
expressed public policy is the optimization of the revenue-generation capability and collection of
 the BIR and the BOC.23 Since the subject of the law is the revenue- generation capability and
collection of the BIR and the BOC, the incentives and/or sanctions provided in the law should
logically pertain to the said agencies. Moreover, the law concerns only the BIR and the BOC
because they have the common distinct primary function of generating revenues for the national
government through the collection of taxes, customs duties, fees and charges.

Both the BIR and the BOC principally perform the special function of being the instrumentalities
through which the State exercises one of its great inherent functions – taxation. Indubitably, such
substantial distinction is germane and intimately related to the purpose of the law. Hence, the
classification and treatment accorded to the BIR and the BOC under R.A. 9335 fully satisfy the
demands of equal protection.

2. R.A. 9335 adequately states the policy and standards to guide the President in fixing revenue
targets and the implementing agencies in carrying out the provisions of the law under Sec 2 and
4 of the said Act. Moreover, the Court has recognized the following as sufficient standards:
“public interest,” “justice and equity,” “public convenience and welfare” and “simplicity, economy
and welfare.”33 In this case, the declared policy of optimization of the revenue-generation
capability and collection of the BIR and the BOC is infused with public interest.
3. The court declined jurisdiction on this case. The Joint Congressional Oversight Committee in
RA 9335 was created for the purpose of approving the implementing rules and regulations (IRR)
formulated by the DOF, DBM, NEDA, BIR, BOC and CSC. On May 22, 2006, it approved the said
IRR. From then on, it became functus officio and ceased to exist. Hence, the issue of its alleged
encroachment on the executive function of implementing and enforcing the law may be
considered moot and academic.

G.R. No. 208566 November 19, 2013 BELGICA vs.

HONORABLE EXECUTIVE SECRETARY PAQUITO N.
OCHOA JR, et al, Respondents
G.R. No. 208566               November 19, 2013

GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS JR. JOSE L. GONZALEZ REUBEN M.
ABANTE and QUINTIN PAREDES SAN DIEGO, Petitioners,
vs.
HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA JR, et al, Respondents

PERLAS-BERNABE, J.:

NATURE:
 These are consolidated petitions taken under Rule 65 of the Rules of Court, all of which assail the
constitutionality of the Pork Barrel System.

FACTS:

The NBI Investigation was spawned by sworn affidavits of six (6) whistle-blowers who declared that JLN
Corporation (Janet Lim Napoles) had swindled billions of pesos from the public coffers for "ghost projects"
using dummy NGOs. Thus, Criminal complaints were filed before the Office of the Ombudsman, charging
five (5) lawmakers for Plunder, and three (3) other lawmakers for Malversation, Direct Bribery, and
Violation of the Anti-Graft and Corrupt Practices Act. Also recommended to be charged in the complaints
are some of the lawmakers’ chiefs -of-staff or representatives, the heads and other officials of three (3)
implementing agencies, and the several presidents of the NGOs set up by Napoles.

Whistle-blowers alleged that" at least P900 Million from royalties in the operation of the Malampaya gas
project off Palawan province intended for agrarian reform beneficiaries has gone into a dummy NGO.
Several petitions were lodged before the Court similarly seeking that the "Pork Barrel System" be
declared unconstitutional

G.R. No. 208493 – SJS filed a Petition for Prohibition seeking that the "Pork Barrel System" be declared
unconstitutional, and a writ of prohibition be issued permanently

G.R. No. 208566 - Belgica, et al filed an Urgent Petition For Certiorari and Prohibition With Prayer For
The Immediate Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction seeking
that the annual "Pork Barrel System," presently embodied in the provisions of the GAA of 2013 which
provided for the 2013 PDAF, and the Executive‘s lump-sum, discretionary funds, such as the Malampaya
Funds and the Presidential Social Fund, be declared unconstitutional and null and void for being acts
constituting grave abuse of discretion.  Also, they pray that the Court issue a TRO against respondents

UDK-14951 – A Petition filed seeking that the PDAF be declared unconstitutional, and a cease and desist
order be issued restraining President Benigno Simeon S. Aquino III (President Aquino) and Secretary
Abad from releasing such funds to Members of Congress

ISSUES:

1.       Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel Laws similar thereto are
unconstitutional considering that they violate the principles of/constitutional provisions on (a) separation of
powers; (b) non-delegability of legislative power; (c) checks and balances; (d) accountability; (e) political
dynasties; and (f) local autonomy.

2.       Whether or not the phrases (under Section 8 of PD 910,116 relating to the Malampaya Funds, and under
Section 12 of PD 1869, as amended by PD 1993, relating to the Presidential Social Fund, are
unconstitutional insofar as they constitute undue delegations of legislative power.
 HELD:

1.       Yes, the PDAF article is unconstitutional. The post-enactment measures which govern the areas of
project identification, fund release and fund realignment are not related to functions of congressional
oversight and, hence, allow legislators to intervene and/or assume duties that properly belong to the
sphere of budget execution. This violates the principle of separation of powers. Congress‘role must be
confined to mere oversight that must be confined to:  (1) scrutiny and (2) investigation and monitoring of
the implementation of laws. Any action or step beyond that will undermine the separation of powers
guaranteed by the constitution.

Thus, the court declares the 2013 pdaf article as well as all other provisions of law which similarly allow
legislators to wield any form of post-enactment authority in the implementation or enforcement of the
budget, unrelated to congressional oversight, as violative of the separation of powers principle and thus
unconstitutional.

2.       Yes. Sec 8 of PD 910- the phrase “and for such other purposes as may be hereafter directed by the
President”‖ constitutes an undue delegation of legislative power insofar as it does not lay down a
sufficient standard to adequately determine the limits of the President‘s authority with respect to the
purpose for which the Malampaya Funds may be used. It gives the President wide latitude to use the
Malampaya Funds for any other purpose he may direct and, in effect, allows him to unilaterally
appropriate public funds beyond the purview of the law.”

Section 12 of PD 1869, as amended by PD 1993- the phrases:

(b) "to finance the priority infrastructure development projects” was declared constitutional. IT
INDICATED PURPOSE ADEQUATELY CURTAILS THE AUTHORITY OF THE PRESIDENT TO SPEND
THE PRESIDENTIAL SOCIAL FUND ONLY FOR RESTORATION PURPOSES WHICH ARISE FROM
CALAMITIES.

(b)” and to finance the restoration of damaged or destroyed facilities due to calamities, as may be
directed and authorized by the Office of the President of the Philippines” was declared
unconstitutional.IT GIVES THE PRESIDENT CARTE BLANCHE AUTHORITY TO USE THE SAME
FUND FOR ANY INFRASTRUCTURE PROJECT HE MAY SO DETERMINE AS A ―PRIORITY‖.
VERILY, THE LAW DOES NOT SUPPLY A DEFINITION OF ―PRIORITY INFRASTRUCTURE
DEVELOPMENT PROJECTS‖ AND HENCE, LEAVES THE PRESIDENT WITHOUT ANY GUIDELINE
TO CONSTRUE THE SAME.
ABAKADA GURO PARTY LIST VS EXECUTIVE SECRETARY

G.R. No. 168056     September 1, 2005

Facts:

Petitioners ABAKADA GURO Party List challenged the constitutionality of R.A. No. 9337 particularly
Sections 4, 5 and 6, amending Sections 106, 107 and 108, respectively, of the National Internal
Revenue Code (NIRC). These questioned provisions contain a uniform proviso authorizing the
President, upon recommendation of the Secretary of Finance, to raise the VAT rate to 12%, effective
January 1, 2006, after any of the following conditions have been satisfied, to wit:

. . . That the President, upon the recommendation of the Secretary of Finance, shall, effective January
1, 2006, raise the rate of value-added tax to twelve percent (12%), after any of the following
conditions has been satisfied:

(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%); or

(ii) National government deficit as a percentage of GDP of the previous year exceeds one and one-
half percent (1 ½%).

Petitioners argue that the law is unconstitutional, as it constitutes abandonment by Congress of its
exclusive authority to fix the rate of taxes under Article VI, Section 28(2) of the 1987 Philippine
Constitution. They further argue that VAT is a tax levied on the sale or exchange of goods and
services and cannot be included within the purview of tariffs under the exemption delegation since
this refers to customs duties, tolls or tribute payable upon merchandise to the government and
usually imposed on imported/exported goods. They also said that the President has powers to cause,
influence or create the conditions provided by law to bring about the conditions precedent. Moreover,
they allege that no guiding standards are made by law as to how the Secretary of Finance will make
the recommendation. They claim, nonetheless, that any recommendation of the Secretary of Finance
can easily be brushed aside by the President since the former is a mere alter ego of the latter, such
that, ultimately, it is the President who decides whether to impose the increased tax rate or not.

Issues:

1. Whether or not R.A. No. 9337 has violated the provisions in Article VI, Section 24, and Article
VI, Section 26 (2) of the Constitution.
2. Whether or not there was an undue delegation of legislative power in violation of Article VI
Sec 28 Par 1 and 2 of the Constitution.
3. Whether or not there was a violation of the due process and equal protection under Article III
Sec. 1 of the Constitution.

Rulings:

1. R.A. No. 9337 has not violated the provisions. The revenue bill exclusively originated in the
House of Representatives, the Senate was acting within its constitutional power to introduce
 amendments to the House bill when it included provisions in Senate Bill No. 1950 amending
corporate income taxes, percentage, excise and franchise taxes. Verily, Article VI, Section 24 of
the Constitution does not contain any prohibition or limitation on the extent of the amendments
that may be introduced by the Senate to the House revenue bill.
2. There is no undue delegation of legislative power but only of the discretion as to the
execution of a law. This is constitutionally permissible. Congress does not abdicate its functions
or unduly delegate power when it describes what job must be done, who must do it, and what is
the scope of his authority; in our complex economy that is frequently the only way in which the
legislative process can go forward.
3. Supreme Court held no decision on this matter. The power of the State to make reasonable
and natural classifications for the purposes of taxation has long been established. Whether it
relates to the subject of taxation, the kind of property, the rates to be levied, or the amounts to
be raised, the methods of assessment, valuation and collection, the State’s power is entitled to
presumption of validity. As a rule, the judiciary will not interfere with such power absent a clear
showing of unreasonableness, discrimination, or arbitrariness

POSTED ONOCTOBER 16, 2016BY JAICDN

Vivas v. Monetary Board (G.R. No. 191424)

Facts:

Petitioner Vivas and his principals acquired the controlling interest in Rural Bank
Faire, a bank whose corporate life has already expired. BSP authorized extending
the banks’ corporate life and was later renamed to EuroCredit Community Bank
(ECBI). Through a series of examinations conducted by the BSP, the findings bore
that ECBI was illiquid, insolvent, and was performing transactions which are
considered unsafe and unsound banking practices. Consequently ECBI was placed
under receivership. Petitioner contends that the implementation of the questioned
resolution was tainted with arbitrariness and bad faith, stressing that ECBI was
placed under receivership without due and prior hearing in violation of his and the
bank’s right to due process.

Issue:

Whether or not ECBI was entitled to due and prior hearing before its being placed
under receivership.

Ruling: YES.
In the case of Bangko Sentral Ng Pilipinas Monetary Board v. Hon. Antonio-
Valenzuela, the Court reiterated the doctrine of “close now, hear later,” stating that it
was justified as a measure for the protection of the public interest. Thus:

The “close now, hear later” doctrine has already been justified as a measure for the
protection of the public interest. Swift action is called for on the part of the BSP when
it finds that a bank is in dire straits. Unless adequate and determined efforts are
taken by the government against distressed and mismanaged banks, public faith in
the banking system is certain to deteriorate to the prejudice of the national economy
itself, not to mention the losses suffered by the bank depositors, creditors, and
stockholders, who all deserve the protection of the government.

In Rural Bank of Buhi, Inc. v. Court of Appeals, the Court also wrote that

x x x due process does not necessarily require a prior hearing; a hearing or an

opportunity to be heard may be subsequent to the closure. One can just imagine the
dire consequences of a prior hearing: bank runs would be the order of the day,
resulting in panic and hysteria. In the process, fortunes may be wiped out and
disillusionment will run the gamut of the entire banking community.

The doctrine is founded on practical and legal considerations to obviate unwarranted

dissipation of the bank’s assets and as a valid exercise of police power to protect the
depositors, creditors, stockholders, and the general public. Swift, adequate and
determined actions must be taken against financially distressed and mismanaged
banks by government agencies lest the public faith in the banking system deteriorate
to the prejudice of the national economy.

FRANCISCO V. TOLL REGULATORY BOARD (2010) Velasco, Jr., J. 4 petitions were consolidated.
The first 3 seek to restrain the implementation of the allegedly illegal toll fee rate hikes for NLEX,
SLEX and the South Metro Manila Skyway (SMMS). The 4th petition seeks to set aside the RTC
decision enjoining the original toll operating franchisee from collecting toll fees in the SLEX. FACTS:
Factual antecedents: Marcos issued PD 1112 which authorized the establishment of toll facilities on
public improvements. It explicitly acknowledged "the huge financial requirements" and the necessity
of tapping "the resources of the private sector" to implement the governments infrastructure
programs. In order to attract private sector involvement, the PD allowed collection of toll fees for the
use of public improvements that would allow a reasonable rate of return on investments. It also
created the Toll Regulatory Board (TRB) and invested it with the power to enter into contracts for the
operation of tollways and issue the necessary Toll Operation Certificate (TOC), fix initial toll rates,
and adjust the same after due notice and hearing. Same day, PD 1113 was issued which granted
the Philippine National Construction Corporation (PNCC), for a period of 30 years, a franchise to
operate toll facilities in the North Luzon and South Luzon Expressways, with the right to collect toll
fees at such rates as TRB may authorize. Because the franchise was not self-executing, TRB and
PNCC signed a Toll Operation Agreement (TOA) on the North and South Luzon Tollways, providing
for construction, maintenance, and operation of the expressway. PD 1894 was issued, granting
PNCC a franchise over the MMEX, and the expanded NLEX and SLEX. PNCC was granted the
"right, privilege and authority to construct, maintain and operate any and all such extensions,
together with the toll facilities in any part of NLEX & SLEX and to divert routes as may be approved
by the TRB. Then came the 1987 Consti and its franchise provision1 The Government Corporate
Counsel (GCC), on PNCCs request, issued an Opinion, later affirmed by the Sec of Justice, holding
that PNCC may enter into a joint venture (JV) agreement (JVA) with private entities without going
into public bidding. In 1994, DPWH, TRB, PNCC, and other private and govt entities executed a
Memorandum of Understanding (MOU) for the entry of private capital in the extension of the
expressways north of Manila, over which PNCC has a franchise. They executed execute
Supplemental Toll Operation Agreements (STOA) to implement the TOA And so, PNCC entered into
JVAs with private entities. Petitioners arguments in the 3 petitions: Petitioners (as taxpayers and
expressway users) seek to nullify the STOAs and the corresponding TRB resolutions fixing initial
rates and approving toll rate adjustments. They argue that the STOAs and the toll rate-fixing
resolutions violate the Constitution because they impose on the public the burden of financing
tollways by way of exorbitant fees and thus deprive the public of property without due process. o
These STOAs are also alleged to be infirm as they effectively awarded purported "build-operate-
transfer" (BOT) projects without public bidding in violation of the BOT Law (R.A. 6957, as am by R.A.
7718) They also assail the constitutionality of some sections of PD 1112 because they vested the
TRB, on one hand, toll operation awarding power while, on the other hand, granting it also the power
to issue, modify and promulgate toll rate charges. The TRB cannot be an awarding party of a TOA
and, at the same time, be the regulator of the tollway industry and an adjudicator of rate exactions
disputes. They also argue that only Congress has, under the 1987 Consti, the exclusive prerogative
to grant franchise to operate public utilities Last argument: since the Manila North Tollways
Corporation (MNTC) is the transferee of PNCCs franchise, then it steps into the shoes of PNCC. The
act is tantamount to an amendment of PNCCs original franchise and hence unconstitutional,
considering that the constitutional power to appoint a new franchise holder is reserved to Congress
[For the 2nd and 3rd petitions, petitioner, for the most part, raised the same issues in the first petition
(e.g. the public bidding requirement)] ISSUES/HELD: 1. Whether the TRB is vested with the power
and authority to grant what amounts to a franchise over tollway facilities --- YES it is 2. Whether the
TRB can enter into TOAs and promulgate toll rates and rule on petitions for toll rate adjustments ---
YES it can 1 Sec. 11. No franchise, certificate, or any other form of authorization for the operation of
a public utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least sixty per centum of whose capital is owned by
such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a
longer period than fifty years. Neither shall any such franchise or right be granted except under the
condition that it shall be subject to amendment, alteration or repeal by the Congress when the
common good so requires. The State shall encourage equity participation in public utilities by the
general public. The participation of foreign investors in the governing body of any public utility
enterprise shall belimited to their proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be citizens of the Philippines.
d2015member 3. Whether the President is authorized to approve contracts, inclusive of assignment
of contracts, entered into by the TRB relative to tollway operations --- YES he is 4. Whether the
subject STOAs covering the NLEX, SLEX and SMMS and their respective extensions are valid ----
YES they are 5. Whether a public bidding is required or mandatory for these tollway projects --- NO it
is not RATIO: 1. FIRST ISSUE TRB Empowered to Grant Authority to Operate Toll Facility /System
It is clear that by explicit provision of law, the TRB was given the power to grant administrative
franchise for toll facility projects. o Secs 3 (a) and (e) of PD 1112 in relation to Section 4 of PD 1894
have invested the TRB with power to grant a qualified person or entity with authority to construct,
maintain, and operate a toll facility and to issue the toll operating permit or TOC. o Sections 3 (a)
and (e) of PD 1112 and Sec 4 of PD 1894 provide the power to grant authority to operate toll
facilities (For the Consti argument, the SC does not agree with petitioners.) The limiting thrust of the
constitutional provision on the grant of franchise or other forms of authorization to operate public
utilities may, in context, be stated as follows: (a) the grant shall be made only in favor of qualified
Filipino citizens or corporations; (b) Congress can impair the obligation of franchises, as contracts;
and (c) no such authorization shall be exclusive or exceed 50 years. A franchise is basically a
legislative grant of a special privilege to a person. The term franchise includes not only
authorizations issuing directly from Congress in the form of statute, but also those granted by
administrative agencies to which the power to grant franchise has been delegated by Congress. The
power to authorize and control a public utility is admittedly a prerogative that stems from the
Legislature. Any suggestion, however, that only Congress has the authority to grant a public utility
franchise is not accurate. As in Albano v. Reyesa case decided under the aegis of the 1987
Constitutionthere is nothing in the Constitution remotely indicating the necessity of a congressional
franchise before "each and every public utility may operate Therefore, a special franchise directly
emanating from Congress is not necessary if the law already specifically authorizes an
administrative body to grant a franchise or to award a contract The SC has already upheld the view
that administrative agencies may be vested with the authority to grant administrative franchises or
concessions over the operation of public utilities under their respective jurisdiction and regulation,
without need of the grant of a separate legislative franchise Under the 1987 Constitution, Congress
has an explicit authority to grant a public utility franchise. However, it may validly delegate its
legislative authority, under the power of subordinate legislation Such delegation of legislative power
to an administrative agency is permitted in order to adapt to the increasing complexity of modern life.
(SC goes on to cite cases that upheld the validity of delegating authority to admin agencies) Its
charter empowered the TRB to authorize the PNCC to operate toll facilities so it may be stated as a
corollary that the TRB, subject to certain qualifications, can alter the conditions of such authorization.
Well settled is the rule that a legislative franchise cannot be modified or amended by an
administrative body with general delegated powers to grant authorities or franchises. However, in the
this case, the law granting a direct franchise to PNCC specifically conferred upon the TRB the power
to impose conditions in an appropriate contract 2. SECOND ISSUE TRBs power to enter into
contracts; issue, modify and promulgate toll rates; and to rule on petitions relative to toll rates level
and increases valid Administrative bodies have expertise in specific matters within the purview of
their respective jurisdictions. Accordingly, the law concedes to them the power to promulgate
implementing rules and regulations ("IRR") to carry out declared statutory policies provided that the
IRR conforms to the terms and standards prescribed by that statute. SC does not see an
irreconcilable clash in the TRBs statutory powers, such that the exercise of one negates another.
Petitioners have NOT shown that the TRB lacks the expertise, competence, and capacity to
implement its mandate of balancing the interests of the toll-paying motoring public and the
imperative of allowing the concessionaires to recoup their investment with reasonable profits. Also,
PD 1894 provides a formula for adjustment of toll rates that takes into account the Peso-US Dollar
exchange rate, interest rate and construction materials price index, among other verifiable and
quantifiable variables. d2015member The fact that an admin agency is exercising its administrative
or executive functions (such as the granting of franchises or awarding of contracts) and at the same
time exercising its quasi-legislative (e.g. rule-making) and/or quasi-judicial functions (e.g. rate-fixing),
does not support a finding of a violation of due process or the Constitution SC takes judicial
cognizance of the exercise by the LTFRB and NTC (both spin-off agencies of the now defunct PSC)
of similar concurrent powers. The LTFRB, under EO 202 is empowered to regulate the operation of
public utilities or "for hire" vehicles and to grant franchises or certificates of public convenience, and
to fix rates or fares, to approve petitions for fare rate increases and to resolve oppositions to such
petitions. A statute may vest exclusive original jurisdiction in an admin agency over certain disputes
and controversies falling within the agency's special expertise. The very definition of an admin
agency includes its being vested with quasi-judicial powers. 3. THIRD ISSUE Pres is vested with
statutory power to approve TRB Contracts The Presidents approving authority is of statutory origin.
There is nothing unconstitutional with the delegation to the President of the authority to approve the
assignment by PNCC of its rights and interest in its franchise, the assignment and delegation being
circumscribed by restrictions in the delegating law itself. Should GAD in some way infect the
exercise, then the approval action may be nullified for that reason, but not on the ground that the
underlying authority is constitutionally doubtful. 4. FOURTH ISSUE STOAs validly entered (The SC
seems exasperated) SC has already held that admin agencies may be empowered by the
Legislature (by a law) to grant franchises or similar authorizations. Cites Albano again: Our statute
books are replete with laws granting administrative agencies the power to issue authorizations. This
delegation of legislative power to administrative agencies is allowed "in order to adapt to the
increasing complexity of modern life." The SC has also held that the "privileges conferred by grant
by local authorities as agents for the state constitute as much a legislative franchise as though the
grant had been made by an act of the Legislature." In this case: TRBs charter itself specifically
empowers it to "grant authority to operate a toll facility and to issue the necessary Toll Operation
Certificate subject to such conditions as shall be imposed by the TRB 5. FIFTH ISSUE Public
bidding is not required The BOT Law does not apply to the peculiar case of PNCC, which exercised
its prerogatives under its franchise to pursue the construction, rehabilitation and expansion of the
tollways with chosen partners. The tollway projects may qualify as a build-operate-transfer
undertaking. However, given that these projects have been undertaken by PNCC in the exercise of
its franchise under PD 1113 and 1894, in joint partnership with its chosen partners at the time when
it was held valid to do so by the OGCC and the DOJ, the public bidding provisions under the BOT
Law do not strictly apply. The conclusion would be different if the tollway projects were to be
prosecuted by an outfit completely different from, and not related to, PNCC.

EQUI-ASIA PLACEMENT v. DEPARTMENT OF FOREIGN AFFAIRS, GR NO. 152214,

2006-09-19
Facts:
On September 16, 2000, Manny dela Rosa Razon, a native of Lemery, Batangas and an
overseas Filipino worker, died of acute cardiac arrest while asleep at the dormitory of the
Samsong Textile Processing Factory in South Korea... the Philippine Overseas
Labor Office (POLO) at South Korea immediately relayed the incident to the Philippine
Embassy in South Korea. Forthwith, the [Labor] Attaché of the Philippine Embassy
dispatched a letter to Eleuterio N. Gardiner, administrator of the Overseas Workers Welfare
Administration
(OWWA)... received a report that OFW Manny dela Rosa RAZON, an undocumented
worker, died last Saturday, 16 September, from an apparent pancreatic attack or
"bangungot."
OWWA, through Atty. Cesar L. Chavez, indorsed the matter, for appropriate action, to
Director R. Casco of the Welfare Employment Office of the Philippine Overseas
Employment Administration (WEO-POEA).
Upon verification by the WEO-POEA on its data base, it was discovered that Manny Razon
was recruited and deployed by petitioner Equi-Asia Placement, Inc., and was sent to South
Korea on April 3, 2000 to work- train at Yeongjin Machinery, Inc. Thereupon, POEA
addressed the herein... first assailed telegram- directive dated September 22, 2000 to the
President/General Manager of the petitioner
PLEASE PROVIDE PTA [Prepaid Ticket Advice] FOR THE REPATRIATION OF REMAINS
AND BELONGINGS OF OFW MANNY DELA ROSA RAZON
Responding thereto, petitioner, thru its President Daniel Morga, Jr., faxed
He violated his employment/training/dispatching contracts on June 25, 2000 by unlawfully
escaping/running away (TNT) from his company assignment without prior KFSMB
authorization and working/staying in unknown company/place;
In view thereof, we cannot heed your requests as embodied in your telegram. However, his
relatives can avail of the benefits provided for by OWWA in cases involving
undocumented/illegal Filipino workers abroad.
Director Ricardo R. Casco of the WEO-POEA sent to the petitioner the herein second
assailed letter-directive
Nevertheless, may we remind you that pursuant to Sections 52, 53, 54 and 55 of the
Implementing Rules Governing RA
8042, otherwise known as the Migrant Workers and Overseas Filipino Act of 1995, the
repatriation of OFW, his/her remains and transport of his personal effects is the primary
responsibility of the principal or agency and to immediately advance the cost of plane fare
without... prior determination of the cause of worker's repatriation.
petitioner wrote back... please be informed that the provisions of Section 53 as well as, and
in relation to, Section 55 of... the Omnibus Rules and Regulations Implementing the Migrant
Workers and Overseas Filipinos Act of 1995
This is so because Sec. 15 of R.A. 8042 clearly contemplates prior notice and hearing
before responsibility thereunder could be established against the agency that sets up the
defense of sole fault - in avoidance of said responsibility
WHETHER OR NOT SECTIONS 52, 53, 54 AND 55 OF THE OMNIBUS RULES AND
REGULATIONS IMPLEMENTING THE MIGRANT WORKERS AND OVERSEAS
FILIPINOS ACT OF 1995 (R.A. 8042),... WHETHER OR NOT SECTIONS 52, 53, 54 AND
55 OF THE OMNIBUS RULES AND REGULATIONS IMPLEMENTING THE MIGRANT
WORKERS AND OVERSEAS FILIPINOS ACT OF 1995 (R.A. 8042), ISSUED BY DFA
AND POEA, WHICH POEA SUMMARILY ORDERED THE HEREIN PETITIONER TO
COMPLY VIZ-A-VIZ THE PAYMENT
IN ADVANCE OF THE EXPENSES FOR THE REPATRIATION OF THE REMAINS OF A
DECEASED WORKER-TRAINEE WHO, AT THE TIME OF HIS DEATH, HAS NO
EXISTING EMPLOYMENT
CONTRACT WITH EITHER SAID PETITIONER OR HIS FOREIGN PRINCIPAL AND NO
VALID VISA OR IS NOT WORKING WITH THE FOREIGN
PRINCIPAL TO WHICH PETITIONER DEPLOYED HIM, IS ILLEGAL AND/OR VIOLATIVE
OF DUE PROCESS SUCH THAT POEA ACTED WITHOUT [OR IN] EXCESS OF ITS
JURISDICTION AND/OR IN
GRAVE ABUSE OF DISCRETION IN ISSUING SAID ORDER TO PAY SAID
EXPENSES."[2]
Issues:
The Court of Appeals erred in not holding that, under the facts of the case that gave rise to
the petition before it, the same sections of the said rules and regulations are illegal, invalid
and/or violative of the right of petitioner to due process of law and, therefore,... the POEA
directives issued pursuant thereto constitute acts committed without, or in excess of,
jurisdiction and/or in grave abuse of discretion.[7]
Ruling:
At the center of this petition are the following provisions of the omnibus rules:
Section 52. Primary Responsibility for Repatriation. - The repatriation of the worker, or
his/her remains, and the transport of his/her personal effects shall be the primary
responsibility of the principal or agency which recruited or deployed him/her abroad.
All costs attendant thereto shall be borne by the principal or the agency concerned.
Section 53. Repatriation of Workers. - The primary responsibility to repatriate entails the
obligation on the part of principal or agency to advance the cost of plane fare and to
immediately repatriate the worker should the need for it arise, without a prior
determination... of the cause of the termination of the worker's employment. However, after
the worker has returned to the country, the principal or agency may recover the cost of
repatriation from the worker if the termination of employment was due solely to his/her fault.
Every contract for overseas employment shall provide for the primary responsibility of
agency to advance the cost of plane fare, and the obligation of the worker to refund the cost
thereof in case his/her fault is determined by the Labor Arbiter.
Section 54. Repatriation Procedure. - When a need for repatriation arises and the foreign
employer fails to provide for it cost, the responsible personnel at site shall simultaneously
notify OWWA and the POEA of such need. The POEA shall notify the agency concerned of
the... need for repatriation. The agency shall provide the plane ticket or the prepaid ticket...
advice (PTA) to the Filipinos Resource Center or to the appropriate Philippine Embassy;
and notify POEA of such compliance. The POEA shall inform OWWA of the action of the
agency.
Section 55. Action on Non-Compliance. - If the employment agency fails to provide the
ticket or PTA within 48 hours from receipt of the notice, the POEA shall suspend the license
of the agency or impose such sanctions as it may deem necessary. Upon notice from the
POEA,... OWWA shall advance the costs of repatriation with recourse to the agency or
principal. The administrative sanction shall not be lifted until the agency reimburses the
OWWA of the cost of repatriation with legal interest.
Said provisions, on the other hand, are supposed to implement Section 15 of Republic Act
No. 8042[9] which provides:
SEC. 15. Repatriation of Workers; Emergency Repatriation Fund. - The repatriation of the
worker and the transport of his personal belongings shall be the primary responsibility of the
agency which, recruited or deployed the worker overseas. All costs attendant... to
repatriation shall be borne by or charged to the agency concerned and/or its principal.
Likewise,... the repatriation of remains and transport of the personal belongings of a
deceased worker and all costs attendant thereto shall be borne by the principal and/or the
local agency.
However, in cases where the termination of employment is due solely to the fault of the
worker, the principal/employer or agency shall not in any manner be responsible for the
repatriation of the former and/or his belongings.
Petitioner contends that the Court of Appeals misappreciated the issue it presented in its
petition for certiorari when, instead of resolving whether Sections 52, 53, 54, and 55 of the
Omnibus Rules are illegal and violative of due process, it merely confined itself to... the
question of whether or not the POEA committed grave abuse of discretion in issuing its
directives of 22 September 2000 and 27 September 2000.
Also, petitioner insists that the subject portions of the omnibus rules are invalid on the
ground that Section 15 of Republic Act No. 8042 does not impose on a recruitment agency
the primary responsibility for the repatriation of a deceased Overseas Filipino Worker
(OFW), while
Section 52 of the Omnibus Rules unduly imposes such burden on a placement agency.
As for Section 53 of the Omnibus Rules, petitioner submits that the same is invalid as
Section 15 of Republic Act No. 8042 clearly states that a placement agency shall not in any
manner be responsible for the repatriation of the deceased OFW and his or her belongings
should the... termination of the OFW's employment be due to his or her fault. However, as
Section 53 of the Omnibus Rules stipulates that a placement agency or principal shall bear
the primary responsibility of repatriating an OFW and of advancing the payment for his or
her plane fare, the... omibus rules, as far as this section is concerned, is an invalid exercise
of legislative power by an administrative agency.
The Solicitor General for its part counters that Sections 52, 53, 54, and 55 of the Omnibus
Rules are valid quasi-legislative acts of respondents Department of Foreign Affairs and
Department of Labor and Employment.[10] Because of this, the requirements of... prior
notice and hearing are not essential. Besides, there are cases where even in the exercise of
quasi- judicial power, administrative agencies are allowed, sans prior notice and hearing, to
effectuate measures affecting private property,... The Solicitor General also argues that the
wording of Section 15 of Republic Act No. 8042 leaves no doubt that a recruitment agency
shall bear the primary responsibility for the repatriation of an OFW whether the latter is dead
or alive.
administrative bodies are vested with two basic powers, the quasi- legislative and the quasi-
judicial.[13] In Abella, Jr. v. Civil Service Commission,[14] we discussed the nature of these
powers to be

In exercising its quasi-judicial function, an administrative body adjudicates the rights of

persons before it, in accordance with the standards laid down by the law. The determination
of facts and the applicable law, as basis for official action and the exercise of... judicial
discretion, are essential for the performance of this function. On these considerations, it is
elementary that due process requirements, as enumerated in Ang Tibay, must be observed.
These requirements include prior notice and hearing.
On the other hand, quasi-legislative power is exercised by administrative agencies through
the promulgation of rules and regulations within the confines of the granting statute and the
doctrine of non-delegation of certain powers flowing from the separation of the great
branches... of the government. Prior notice to and hearing of every affected... party, as
elements of due process, are not required since there is no determination of past events or
facts that have to be established or ascertained. As a general rule, prior notice and hearing
are not essential... to the validity of rules or regulations promulgated to govern future
conduct.
petitioner assails certain provisions of the Omnibus Rules. However, these rules were
clearly promulgated by respondents Department of Foreign Affairs and Department of Labor
and Employment in the exercise of their quasi-legislative powers or the authority to...
promulgate rules and regulations. Because of this, petitioner was, thus, mistaken in availing
himself of the remedy of an original action for certiorari as obviously, only judicial or quasi-
judicial acts are proper subjects thereof. If only for these,... the petition... deserves outright
dismissal. Be that as it may, we shall proceed to resolve the substantive issues raised in
this petition for review in order to finally remove the doubt over the validity of Sections 52,
53, 54, and 55 of the Omnibus Rules.
It is now well-settled that delegation of legislative power to various specialized
administrative agencies is allowed in the face of increasing complexity of modern life. Given
the volume and variety of interactions involving the members of today's society, it is doubtful
if the... legislature can promulgate laws dealing with the minutiae aspects of everyday life.
All that is required for the valid exercise of this power of subordinate legislation is that the
regulation must be germane to the objects and purposes of the law; and that the regulation
be not... in contradiction to, but in conformity with, the standards prescribed by the law
Under the first test or the so-called completeness test, the law must be complete in all its
terms and conditions when it leaves the legislature such that when it reaches... the
delegate, the only thing he will have to do is to enforce it.[17] The second test or the
sufficient standard test, mandates that there should be adequate guidelines or limitations in
the law to determine the boundaries of the delegate's authority and... prevent the delegation
from running riot.[18]
We resolve that the questioned provisions of the Omnibus Rules meet these requirements.
While Republic Act No. 8042 does not expressly state that petitioner shall be primarily
obligated to transport... back here to the Philippines the remains of the deceased Razon...
nevertheless, such duty is imposed upon him as the statute clearly dictates that "the
repatriation of remains and transport of the personal belongings of a deceased worker and
all costs attendant thereto... shall be borne by the principal and/or the local agency."
The mandatory nature of said obligation is characterized by the legislature's use of the word
"shall.
In this regard, we see no reason... to invalidate Section 52 of the omnibus rules as Republic
Act No. 8042 itself permits the situation wherein a local recruitment agency can be held
exclusively responsible for the repatriation of a deceased OFW.
To our mind, the statute merely states the general principle that in case the severance of
the employment was because of the OFW's own undoing, it is only fair that he or she should
shoulder the costs of his or her homecoming. Section 15 of Republic
Act No. 8042, however, certainly does not preclude a placement agency from establishing
the circumstances surrounding an OFW's dismissal from service in an appropriate
proceeding. As such determination would most likely take some time, it is only proper that
an OFW be brought... back here in our country... at the soonest possible time lest he
remains stranded in a foreign land during the whole time that recruitment agency contests
its liability for repatriation.
we hold that the legislature's pronouncements that Republic Act No. 8042 was enacted with
the thought of upholding the dignity of the Filipinos may they be here or abroad and that the
State shall at all times afford full protection to labor, both here and abroad,... meet the
requirement and provide enough guidance for the formulation of the omnibus rules.

Phil. Association of Service Exporters, Inc. vs.

Torres, 212 SCRA 298; G.R. No. 101279,
August 6, 1992
Posted by Pius Morados on November 13, 2011

(Admin Law, DOLE, quasi-legislative power)

Facts: DOLE Dept. Order No. 16 temporarily suspends the recruitment by private employment
agencies of Filipino DH going to Hong Kong in view of the need to establish mechanisms that
will enhance the protection for the same.
The DOLE, through POEA took over the business of deploying such HK-bound workers.
Pursuant to the above order, POEA issued memorandum circular no. 30 providing guidelines on
the government processing and deployment of Filipino domestic helpers to HK and the
accreditation of HK recruitment agencies intending to hire Filipino domestic helpers, and the
memorandum circular No. 30, pertaining to the processing of employment contracts of domestic
workers for HK.

Petitioner contends that respondents acted with grave abuse of discretion and/or in excess of their
rule-making authority in issuing said circulars.

Issue: WON the take-over of the business deploying DH to HK by DOLE and POEA through an
administrative order and circular is valid.
Held: Yes. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and
regulate recruitment and placement activities. The challenge administrative issuance discloses
that the same fall within the administrative and police powers expressly or by necessary
implication conferred upon the respondents.

Republic of the Philippines vs Drugmaker’s Laboratories Inc.

GR No. 190837 March 5, 2014

Facts: The FDA was created pursuant to RA 3720, otherwise known as the “Food, Drug and Cosmetics Act”
primarily in order to establish safety or efficacy standards and quality measure of foods, drugs and devices and
cosmetics products. On March 15, 1989, the Department of Health, thru then Secretary Alfredo RA Bengzon issued
AO 67 s. 1989, entitled Revised Rules and Regulations on Registration of Pharmaceutical products. Among others,
it required drug manufacturers to register certain drug and medicine products with FDA before they may release the
same to the market for sale. In this relation, a satisfactory bioavailability/bioequivalence (BA/BE) test is needed for
a manufacturer to secure a CPR for these products. However, the implementation of the BA/BE testing requirement
was put on hold because there was no local facility capable of conducting the same. The issuance of circulars no. 1
s. of 1997 resumed the FDA’s implementation of the BA/BE testing requirement with the establishment of BA/BE
testing facilities in the country. Thereafter, the FDA issued circular no. 8 s. of 1997 which provided additional
implementation details concerning the BA/BE testing requirement on drug products.
Issue: Whether or not the circular issued by FDA are valid.

Held: Yes. Administrative agencies may exercise quasi-legislative or rule-making power only if there exist a law
which delegates these powers to them. Accordingly, the rules so promulgated must be within the confines of the
granting statutes and must not involve discretion as to what the law shall be, but merely the authority to fix the
details in the execution or enforcement of the policy set out in the law itself, so as to conform with the doctrine of
separation of powers and as an adjunct, the doctrine of non-delegability of legislative powers.

An administrative regulation may be classified as a legislative rule, an interpretative rule or a contingent rule.
Legislative rules are in the nature of subordinate legislation a d designed to implement a primary legislation by
providing the details thereof. They usually implement existing law, imposing general, extra-statutory obligations
pursuant to authority properly delegated by the congress amd effect a change in existing law or policy which affect
individual rights and obligations. Meanwhile, interpretative rules are intended to interpret, clarify or explain existing
statutory regulations under which the administrative body operates. Their purpose or objective is merely to construe
the statue being administered and purpory to do no more than interpret the statute. Simply, they try to say what the
statute means and refer to no single person or party in particular but concern all those belonging to the same class
which may be covered by the said rules. Finally, contingent rules are those issued by an administrative authority
based on the existence of certain facts or things upon which the enforcement of the law depends.

In general, an administrative regulation needs to comply with the requirements laid down by EO 292 s. of 1988
otherwise known as the administrative code of 1987 on prior notice, hearing and publication in order to be valid and
binding except when the same is merely an interpretative rule. This is because when an administrative rule is merely
intepretative in nature its applicability needs nothing further than its bare issuance, for it gives no real consequence
more than what the law itself has already prescribed. When, on the other hand, the administrative rule goes beyond
merely providing for the means that ca  facilitate or render least cumbersome the implementation of the law but
substantially increases the burden of those governed, it behooves the agency to accord at least to those directly
affected a chance to be heard, and thereafter to be duly informed before that new issuance is given the force and
effect of law.

A careful scrutiny of the foregoing issuances would reveal that A0 67 is actually the rule that originally introduced
the BA/BE testing requirement as a component of applications for the issuamce of CPR covering certain
pharmaceutical products as such, it is considered an administrative regulation – a legislative rule to be exact – issued
by the Secretary of Health in consonance with the express authority granted to him by RA 3720 to implement the
statutory mandate that all drugs and devices should first be registered with the FDA prior to their manufacture and
sale. Considering that neither party contested the validity of its issuance, the court deems that AO 67 complied with
the requirements of prior hearing, notice and publication pursuant to the presumption of regularity accorded tl the
govt in the exercise of its official duties.

On the other hand, circulars no. 1 and 8 s. of 1997 cannot be considered as administrative regulations because they
do not: a.) implement a primary legislation by providing the details thereof; b.) Interpret, clarify or explain existing
statutory regulation under which FDA operates and/or; c.) Ascertain the existence of certain facts or things upon
which the enforcement of RA 3720 depends. In fact, the only purpose of these is for FDA to administer and
supervise the implementation of the provisions of AO 67 s. of 1989 including those covering the BA/BE testing
requirement consistent with and pursuant to RA 3720. Therefore, the FDA has sufficient authority to issue the said
circulars and since theu would not affect the substantive rights of the parties that they seek to govern – as they are
not, strictly speaking, administrative regulations in the first place – no prior hearing, consultation and publication are
needed for their validity.

CASE DIGEST: LAND BANK OF THE PHILIPPINES v. PERFECTO

OBIAS, ET. AL. (G.R. No. 184406; March 14, 2012).

FACTS: Pursuant to the Operation Land Transfer (OLT) Program of P.D. No. 27,
an aggregate area of 34.6958 hectares composing three parcels of agricultural
land located at Himaao, Pili, Camarines Sur owned by Perfecto, Nellie, OFe, Gil,
Edmundo and Nelly, all surnamed Obias, (landowners) were distributed to the
farmers-beneficiaries namely: Victor Bagasina, Sr., Elena Benosa, Sergio
Nagrampa, Claudio Galon, Prudencio Benosa, Santos Parro, Guillermo
Breboneria, Flora Villamer, Felipe de Jesus, Mariano Esta, Benjamin Bagasina,
Andres Tagum, Pedro Galon, Clara Padua, Rodolfo Competente, Roberto Parro,
Melchor Brandes, Antonio Buizon, Rogelio Montero, Maria Villamer, Claudio
Resari, Victor Bagasina, Jr., Francisco Montero and Pedro Montero.

As a result, the owners had to be paid just compensation for the property
taken.The Department of Agrarian Reform, using the formula under P.D. 27 and
E.O. 228, came up with a computation of the value of the acquired property atP1,
397,578.72.However, the amount was contested by the landowners as an
inadequate compensation for the land. Thus, they filed a complaint for
determination of just compensation before the RTC of Naga City, as the assigned
Special Agrarian Court (SAC).

To ascertain the amount of just compensation, a committee was formed by the

trial court.The Provincial Assessor recommended the above average value
ofP40,065.31 per hectare as just compensation;LBP Representative Edgardo
Malazarte recommended the amount ofP38,533.577 per hectare; andthe
representative of the landowners, Atty. Fe Rosario P. Buevasubmitted
aP180,000.00 per hectare valuation of the land.

However, none of these recommendations was adopted in the 3 October 2000

judgment of the trial court in fixing the just compensation at (P91,657.50) per
hectare or in the total amount of P3,180,130.29. thus, directing the LBP to pay
the said amount.

Both the landowners and LBP appealed before the CA.

On 31 January 2008, the appellate court vacated the decision of the trial court. It
relied heavily on the Gabatin v. Land Bank of the Philippines (G.R. No. 148223,
25 November 2004) ruling wherein the Court fixed the rate of the government
support price (GSP) for one cavan of palay at P35.00, the price of the palay at the
time of the taking of the land. Following the formula,Land Value= 2.5 multiplied
by the Average Gross Production (AGP) multiplied by the Government Support
Price (GSP),provided by P.D. No. 27 and E.O. 228, the value of the total area
taken will beP371,015.20 plus interest thereon at the rate of 6% interest per
annum, compounded annually, starting 21 October 1972,until fully paid.

ISSUE: Did the CA err in ruling that the payment of interest shall be
made until full payment of compensation?

HELD: It is correct that rules and regulations issued by administrative bodies to

interpret the law which they are entrusted to enforce, have the force of law, and
are entitled to great respect. Administrative issuances partake of the nature of a
statuteand have in their favor a presumption of legality.And a literal reading of
A.O. No. 13, as amended, will be in favor of the LBP.

However, these administrative issuances or orders, though they enjoy the

presumption of legalities, are still subject to the interpretation by the Supreme
Court pursuant to its power to interpret the law.While rules and regulation issued
by the administrative bodies have the force and effect of law and are entitled to
great respect, courts interpret administrative regulations in harmony with the law
that authorized them and avoid as much as possible any construction that would
annul them as invalid exercise of legislative power.

***

To answer the contention of LBP that there should be no payment of interest

when there is already a prompt payment of just compensation, the Court
discussed that even though the LBP immediately paid the remaining balance on
the just compensation due to the petitioners after the Court had fixed the value of
the expropriated properties, it overlooks one essential fact from the time that the
State took the petitioners properties until the time that the petitioners were fully
paid, almost 12 long years passed. This is the rationale for imposing the 12%
interest in order to compensate the petitioners for the income they would have
made had they been properly compensated for their properties at the time of the
taking.

This Court is not oblivious of the purpose of our agrarian laws particularly P.D.
No. 27, that is, to emancipate the tiller of the soil from his bondage; to be lord
and owner of the land he tills.

Section 4, Article XIII of the 1987 Constitution mandates that the State shall, by
law, undertake an agrarian reform program founded on the right of farmers and
regular farm workers who are landless, to own directly or collectively the lands
they till or, in the case of other farm workers, to receive a just share of the fruits
thereof. It also provides that the State shall encourage and undertake the just
distribution of all agricultural lands subject to the payment of just compensation.

Further, the deliberations of the 1986 Constitutional Commission on this subject

reveal that just compensation should not do violence to the Bill of Rights, but
should also not make an insurmountable obstacle to a successful agrarian reform
program. Hence, the landowner's right to just compensation should be balanced
with agrarian reform.

The mandate of determination of just compensation is a judicial function,hence,

the Court will exert all efforts to consider and interpret all the applicable laws and
issuances in order to balance the right of the farmers to own a land subject to the
award the proper and just compensation due to the landowners. The decision
of the Court of Appeals is affirmed.
 
PHILIPPINE INTERNATIONAL TRADING CORP. v. COA, GR No. 183517, June 22, 2010
Facts:
On December 31, 1983, Eligia Romero, an officer of petitioner, opted to retire under Republic Act No. 1616 and
received a total of P286,780.00 as gratuity benefits for services rendered from 1955 to 1983.  Immediately re-hired
on contractual basis, it appears that said employee remained in the service of petitioner until her compulsory
retirement on April 27, 2000.  In receipt of retirement benefits in the total sum of P1,013,952.00 for the period July
1, 1955 to April 27, 2000, net of the P286,70.00 gratuity benefits she received in 1983, Ms. Romero filed a July 16,
2001 request, seeking from petitioner payment of retirement differentials on the strength of Section 6 of Executive
Order No. 756.  Said provision states that “any officer or employee who retires, resigns, or is separated from the
service shall be entitled to one month pay for every year of service computed at highest salary received including
allowances, in addition to the other benefits provided by law, regardless of any provision of law or regulations to the
contrary.”
Confronted with the question of whether the computation of Ms. Romero’s retirement benefits should include the
allowances she had received while under its employ, petitioner sent queries to respondent and the Office of the
Government Corporate Counsel regarding the application of Section 6 of Executive Order No. 756.  On August 20,
2002, then Government Corporate Counsel Amado D. Valdez issued Opinion No. 197, Series of 2002, espousing a
literal interpretation and application of the aforesaid provision.  Invoking the principle that retirement laws should be
liberally construed and administered in favor of the persons intended to be benefited thereby, said opinion declared
that, pursuant to the subject provision, the basis for the computation of the retirement benefits of petitioner’s
employees should be the highest basic salary received by them, including allowances not integrated into the basic
pay.

On the other hand, on July 4, 2003, COA Assistant Commissioner and General Counsel Raquel R. Habitan issued
the first assailed ruling, the 6th Indorsement dated July 4, 2003, finding the denial of Ms. Romero’s claim for
retirement differentials in order.  Taking appropriate note of the fact that the Reserve for Retirement Gratuity and
Commutation of Leave Credits of petitioner’s employees did not include allowances outside of the basic salary, said
officer ruled that Executive Order No. 756 was a special law issued only for the specific purpose of reorganizing
petitioner corporation.  Although it was subsequently adverted to in Executive Order No. 877, Section 6 of
Executive Order No. 756 was determined to be intended for employees retired, separated or resigned in connection
with petitioner’s reorganization and was not meant to be a permanent retirement scheme for its employees.
Issue(s):
Respondent Commission gravely abused its discretion amounting to lack or excess of jurisdiction in issuing the
assailed rulings which is contrary to settled jurisprudence.

Ruling: 
It is a rule in statutory construction that every part of the statute must be interpreted with reference to the
context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient to
the general intent of the whole enactment. (LBP v. AMS Farming Corp., GR No. 174971, Oct. 15, 2008) Because
the law must not be read in truncated parts, its provisions must be read in relation to the whole law.  The statute’s
clauses and phrases must not, consequently, be taken as detached and isolated expressions, but the whole and every
part thereof must be considered in fixing the meaning of any of its parts in order to produce a harmonious whole.
(Mactan-Cebu International Airport Authority v. Urgello, GR No. 162288, April 4, 2007) Consistent with the
fundamentals of statutory construction, all the words in the statute must be taken into consideration in order to
ascertain its meaning. (Smart Communications, Inc. v. The City of Davao, GR No. 155491, Sept. 16, 2008)
Applying the foregoing principles to the case at bench, we find it well worth emphasizing at the outset that
Executive Order No. 756 was meant to reorganize petitioner’s corporate set-up.  Section 4 (1) of Executive Order
No. 756 specifically authorized petitioner’s Board of Directors to “ reorganize the structure of the Corporation, in
accordance with its expanded role in the development of Philippine trade, with such officers and employees as may
be needed and determine their competitive salaries and reasonable allowances and other benefits to effectively carry
out its powers and functions.”
As an adjunct to the reorganization mandated under Executive Order No. 756, we find that the foregoing provision
cannot be interpreted independent of the purpose or intent of the law.  Rather than the permanent retirement law for
its employees that petitioner now characterizes it to be, we find that the provision of gratuities equivalent to “one
month pay for every year of service computed at highest salary received including all allowances” was clearly meant
as an incentive for employees who retire, resign or are separated from service during or as a consequence of the
reorganization petitioner’s Board of Directors was tasked to implement.  As a temporary measure, it cannot be
interpreted as an exception to the general prohibition against separate or supplementary insurance and/or retirement
or pension plans under Section 28, Subsection (b) of Commonwealth Act No. 186, as amended.  Pursuant to Section
10 of Republic Act No. 4968 which was approved on June 17, 1967, said latter provision was amended to read as
follows:

Section 10.  Subsection (b) of Section twenty-eight of the same Act, as amended is hereby further amended to read
as follows:

(b) Hereafter no insurance or retirement plan for officers or employees shall be created by any employer. All
supplementary retirement or pension plans heretofore in force in any government office, agency, or instrumentality
or corporation owned or controlled by the government, are hereby declared inoperative or abolished: Provided, That
the rights of those who are already eligible to retire thereunder shall not be affected.”

In reconciling Section 6 of Executive Order No. 756 with Section 28, Subsection (b) of Commonwealth Act No.
186, as amended, uppermost in the mind of the Court is the fact that the best method of interpretation is that which
makes laws consistent with other laws which are to be harmonized rather than having one considered repealed in
favor of the other. (Akbayan-Youth v. Comelec, 407 Phil. 618 [2001])  Time and again, it has been held that every
statute must be so interpreted and brought in accord with other laws as to form a uniform system of jurisprudence
– interpretere et concordare legibus est optimus interpretendi. (City Warden of the Manila City Jail v. Estrella, 416
Phil. 634 [2001]) Thus, if diverse statutes relate to the same thing, they ought to be taken into consideration in
construing any one of them, as it is an established rule of law that all acts in pari materia are to be taken together, as
if they were one law. Vda. de Urbano vs. Government Service Insurance System, 419 Phil. 948, 969-970 (2001). We
find that a temporary and limited application of the more beneficent gratuities provided under Section 6 of Executive
Order No. 756 is in accord with the pre-existing and general prohibition against separate or supplementary insurance
retirement and/or pension plans under Section 28, Subsection (b) of Commonwealth Act No. 186.
In the absence of a manifest and specific intent from which the same may be gleaned, moreover, Section 6 of
Executive Order No. 756 cannot be construed as an additional alternative to existing general retirement laws and/or
an exception to the prohibition against separate or supplementary insurance retirement or pension plans as
aforesaid.  Aside from the fact that a meaning that does not appear nor is intended or reflected in the very language
of the statute cannot be placed therein by construction, (GSIS v. COA, 484 Phil. 507 [2004]) petitioner would
likewise do well to remember that repeal of laws should be made clear and express.  Repeals by implication are not
favored as laws are presumed to be passed with deliberation and full knowledge of all laws existing on the subject,
the congruent application of which the courts must generally presume. For this reason, it has been held that the
failure to add a specific repealing clause particularly mentioning the statute to be repealed indicates that the intent
was not to repeal any existing law on the matter, unless an irreconcilable inconsistency and repugnancy exists in the
terms of the new and old laws. (COA of the Province of Cebu v. Province of Cebu, 422 Phil. 519 [2001])

In the case of Conte v. Commission on Audit, this Court ruled that the prohibition against separate or supplementary
insurance and/or retirement plan under Section 28, Subsection (b) of Commonwealth Act No. 186 was meant to
prevent the undue and iniquitous proliferation of such plans in different government offices.  Both before the
issuance and after the effectivity of Executive Order Nos. 756 and 877, petitioner’s employees were governed by
and availed of the same retirement laws applicable to other government employees in view of the absence of a
specific provision thereon under Presidential Decree No. 252, its organic law, and Presidential Decree No. 1071,
otherwise known as the Revised Charter of the PITC.  As appropriately pointed out by respondent, petitioner’s
observance of said general retirement laws may be gleaned from the fact that the Reserve for Retirement Gratuity
and Commutation of Leave Credits for its employees were based only on their basic salary and did not include
allowances they received.  No less than Eligia Romero, petitioner’s employee whose claim for retirement
differentials triggered the instant inquiry, was granted benefits under Republic Act No. 1616 upon her retirement on
December 31, 1983.
It doesn’t help petitioner’s cause any that Section 6 of Executive Order No. 756, in relation to Section 3 of
Executive Order No. 877, was further amended by Republic Act No. 6758, otherwise known as the  Compensation
and Classification Act of 1989.  Mandated under Article IX B, Section 5[34] of the Constitution, Section 4  of
Republic Act No. 6758 specifically extends its coverage to government owned and controlled corporations like
petitioner. With this Court’s ruling in Philippine International Trading Corporation v. Commission on Audit to the
effect that petitioner is included in the coverage of Republic Act No. 6758, it is evidently no longer exempted from
OCPC rules and regulations, in keeping with said law’s intent to do away with multiple allowances and other
incentive packages as well as the resultant differences in compensation among government personnel.
The petition is DENIED for lack of merit.