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YAZAKI TORRES MANUFACTURING, INC., Petitioner,
G.R. No. 130584
PUNO, J., Chairperson, SANDOVAL-GUTIERREZ, CORONA, AZCUNA, and
THE COURT OF APPEALS, THE HOME DEVELOPMENT MUTUAL FUND, through its Board of Trustees, and HONORABLE ZORAYDA AMELIA C. ALONZO, in her capacity as President of the Home Development Mutual Fund, Respondents.
June 27, 2006 x----------------------------------------------------------------------------------------x DECISION SANDOVAL-GUTIERREZ, J.:
This is a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, seeking to annul the Decision1 of the Court of Appeals (Special Eighth Division), dated February 5, 1997, in CA-G.R. SP No. 41487 for having been issued with grave abuse of discretion. The Home Development Mutual Fund (HDMF) is the government agency tasked with the administration of the PAG-IBIG2 Fund (Fund) created under Presidential Decree (P.D.) No. 1530, signed into law on June 11, 1978. The Fund has been intended for housing purposes to be sourced from voluntary contributions from its members. On December 14, 1980, P.D. No. 1530 was amended by P.D. No. 1752 providing that
membership in the Fund is mandatory for all gainfully-employed Filipinos. On June 17, 1994, P.D. No. 1752 was amended by Republic Act (R.A.) No. 7742 which took effect on January 1, 1995. Under the new law, the coverage of the Fund extends to all members of the Social Security System and Government Service Insurance System, as well as their employers. However, membership is voluntary for employees earning less than P4,000.00 a month. On July 18, 1994, the HDMF Board of Trustees promulgated Rules and Regulations implementing R.A. No. 7742. Rule VII provides: RULE VII WAIVER OR SUSPENSION SEC. 1. Waiver or Suspension, Existing Provident or Retirement Plan . – An employer and/or employee group who has an existing provident or retirement plan as of the effectivity of Republic Act No. 7742, qualified under Republic Act No. 4917 and actuarially determined to be sound and reasonable by an independent actuary duly accredited by the Insurance Commission may apply with the Fund for waiver or suspension of coverage. Such waiver or suspension may be granted by the President of the Fund on the basis of verification that the waiver or suspension does not contravene any effective collective bargaining or other existing agreement and that the features of the plan or plans are superior to the Fund and continue to be so. The certificate of waiver or suspension of coverage issued therein shall only be for a period of one (1) year but the same may be renewed for another year upon the filing of a proper application within a period of sixty (60) days prior to the expiration of the existing waiver or suspension. SEC. 2. Waiver or Suspension, Existing Housing Plan. – An employer and/or employee group who has an existing housing plan as of the effectivity of Republic Act No. 7742 may apply with the Fund for waiver or suspension of coverage. Such waiver or suspension may be granted by the President of the Fund on the basis of verification that the waiver or suspension does not contravene any effective collective bargaining or other existing agreement and that the features of the plan or plans are superior to the Fund and continue to be so. The certificate of waiver or suspension of coverage issued therein shall only be for a period of one (1) year but the same may be renewed for another year upon the filing of a proper application within a period of sixty (60) days prior to the expiration of the existing waiver or suspension. xxx SEC. 4. Effects of Waiver or Suspension, Existing Provident or Retirement/Housing Plan. - Waiver or suspension of coverage granted to an employer under Sections 1 and 2 of this Rule shall likewise apply to his employees who are members of the employer’s private plan; Provided, That such members are not member-borrowers of the Fund. A memberborrower shall continue to pay and remit to the fund his monthly contributions together with the employer contributions to be shouldered by him. A member-saver may opt to remain in good standing by remitting to the Fund his monthly contributions with or without employer contribution. Employees who are non-members of the employer’s private plan at the time of the certificate of waiver or suspension of coverage is granted shall continue to be mandatorily covered by the Fund and their employer is required to set aside and remit to the Fund the employee contributions together with the employer contributions.
Yazaki Torres Manufacturing, Inc., petitioner herein, a corporation organized under Philippine laws, applied for and was granted by the HDMF a waiver from the Fund coverage for the period from January 1 to December 31, 1995. The HDMF found that petitioner’s retirement plan for its employees is superior to that offered by the Fund. On September 1, 1995, the HDMF Board of Trustees amended Rule VII of the Rules and Regulations implementing R.A. No. 7742. The amended Rule provides: SEC. 1. Waiver or Suspension Because of Existing Provident/Retirement and Housing Plan. – An employer with a plan providing both for a provident/retirement and housing benefits for all his employees and existing as of December 14, 1980, the effectivity date of Presidential Decree No. 1752, may apply with the Fund for waiver or suspension of the coverage. The provident/retirement aspect of the plan must be qualified under Republic Act No. 4917 and actuarially determined to be sound and reasonable by an independent actuary duly accredited by the Insurance Commission. The provident/retirement and housing benefits as provided for under the plan must be superior to the provident/retirement and housing benefits offered by the Fund. Such waiver or suspension may be granted by the Fund on the basis of actual certification that the waiver or suspension does not contravene any collective bargaining agreement, any other existing agreement or clearly spelled out management policy and that features of the plan or plans are superior to the Fund and continue to be so. Provided further, That the application must be endorsed by the labor union representing a majority of the employees or in the absence thereof by at least a majority vote for all the employees in the said establishment in a meeting specifically called for the purpose; Provided furthermore, That such a meeting be held or conducted under the supervision of an authorized representative from the Fund. The certificate of waiver or suspension of coverage issued herein shall only be for a period of one (1) year effective upon issuance thereof. No certificate of waiver issued by the President of the Fund shall have retroactive effect. Application for renewal must be filed within sixty (60) days prior to the expiration of the existing waiver or suspension and such application for renewal shall only be granted based on the same conditions and requirements under which the original application was approved. Pending the approval of the application for waiver or suspension of coverage or the application for renewal, the employer and his covered employees shall continue to be mandatorily covered by the Fund as provided for under Republic Act No. 7742. xxx SEC. 3. Effects of Waiver or Suspension; Existing Provident or Retirement/Housing Plan. – Waiver or suspension of coverage granted to an employer under Section 1 shall likewise apply to his employees who are members of the employer’s private plan; Provided, That such members are not member-borrowers of the Fund. A member-borrower shall continue to pay and remit to the Fund his monthly contributions together with the employer contribution to be shouldered by him. A member-saver may opt to remain in good standing by remitting to the Fund his monthly contributions with or without employer contributions. Notwithstanding
as well as its humanist commitment to the interests of the working group. the same is invalid. The ground relied upon was once again its “superior retirement plan” to that of the Fund. 1997. 1996. under Presidential Decree 1530. the former prevails (Shell Philippines. Employees who are non-members of the employer’s private plan at the time the certificate of waiver or suspension of coverage is granted shall continue to be mandatorily covered by the Fund and their employer is required to set aside and remit to the Fund the employee contributions together with the employer’s required contributions. 41487. Thereupon. and . Court of Appeals.4 the certificate of waiver or suspension granted to the employer. No. petitioner filed with the Court of Appeals a petition for review. in relation particularly to their need for decent shelter has established the Home Development Mutual Fund. Inc. Central Bank of the Philippines. holding that: Petitioner contends that the existing rules and regulations cannot be amended unless and until R. the HDMF Chief Executive Officer disapproved petitioner’s application on the ground that its retirement plan is not superior to that provided by the Fund.” Petitioner interposed an appeal to the HDMF Board of Trustees. 249 SCRA 149 ). thus: WHEREAS. petitioner applied for a renewal.A. docketed as CA-G. 1995 amendment on Rule VII of the HDMF rules and regulations was beyond the 60-day period required under Section 5 of R. 1996. a system of employee – employer contributions for housing purposes. The only limitation is that the administrative regulations cannot extend the law and amend a legislative enactment for settled is the rule that administrative regulations must be in harmony with the provisions of the law (Land Bank of the Philippines v. modified or revoked to conform to the requirements of the law or the demands of justice (Benito v. the Court of Appeals (Special Eighth Division) denied the petition. 7742. Public Service Commission. On February 16. After its waiver from the Fund coverage lapsed.. in pursuit of the Constitutional mandates on the promotion of public welfare through ample social services. the Government. v. the Board denied the appeal. In a Decision dated February 5. it is still the obligation of the employer to service this type of contributing employee-member by deducting through salary deductions and remitting to the Fund the contribution as required herein. No. such rules and regulations or orders may be amended. 7742 is likewise amended and since the September 1. 63 Phil.A. 86 Phil. 1995 amendment to the rules requiring both provident/retirement and housing plans to the employees in order that the employer may be granted a waiver or suspension of the Pag-ibig Fund coverage is in harmony with WHEREAS clauses of Presidential Decree No. To uphold these arguments would render the administrative agency inutile to correct the rules and regulations duly promulgated by it. v. Tanay Transit Co. A contario. 162 SCRA 628 ). SP No. Raymundo Transportation Co.R. 1752. Petitioner was then directed “to register it s employees with the Fund and to remit their monthly contributions together with the mandatory employer’s share. but in a Resolution dated May 29. 624 . The September 1. 1064 ). In case of discrepancy between the basic law and an implementing rule or regulation.
at the time this Decree becomes effective have their own provident and/or employee – housing plans. 30. 1997. (Emphasis supplied) states: The governing law which is Section 19 of Pres. 1995 to December 31. provides “[s]uch waiver or suspension may be granted by the President of the Fund on the basis of verification that the waiver or suspension does not contravene any effective collective bargaining or other existing agreement and that the features of the plan or plans are superior to the Fund and continue to be so. To reiterate. After the lapse of the specified period. Section 1 of the original HDMF rules. which shall be granted on the basis of verification that the waiver or suspension does not contravene any effective collective bargaining agreement and that the features of the plan or plans are superior to the Fund or continue to be so.” The word “may” is merely permissive and operates to confer discretion upon a party (Capati v. for any of the following purposes: (a) For annual certification of waiver or suspension from coverage or participation in the Fund. Existing Provident/Housing Plans – An employer and/or employee – group who. there is need to strengthen the Home Development Mutual Funds and make it more effective both as savings generation and home building program for the gainfully-employed members of the Philippine society. Petition. i. The disapproval of the petitioner’s application for renewal of waiver from the Pag-ibig Fund coverage was by reason that the petitioner’s retirement plan was not superior to Pag-ibig Fund (Annex “D”. Ocampo. 1752 SEC. from January 1. Decree No.3 Petitioner filed its Motion for Reconsideration. should not be disturbed on appeal unless it is shown that it has patently misappreciated the facts. or x x x The grant of the certification of waiver to the petitioner was only for a specific period.5 WHEREAS. Petitioner however failed to prove by sufficient evidence that the findings of the President of the Fund was patently erroneous. 113 SCRA 794 ). the law in force at the time of the granting of the certification of waiver to the petitioner. 1995 but subject to the condition that the same may be renewed for another year upon the filing of the proper application within 60 days prior to the expiration of the existing waiver or suspension. Rollo). . p. the HDMF is not automatically required to enter another contract with the petitioner as long as the latter applies for renewal of certification. It is well-settled principle that the finding of facts by the administrative bodies which has acquired the expertise in the field is entitled to great respect and.. may register with the Fund.e. The grant is merely a privilege which the State in the exercise of its police power has the right not to renew the same as the exigency of the case warrants. but it was denied in a Resolution dated June 17. 19.
The task of determining whether such application should be granted is best discharged by the HDMF. or despotism.4 Petitioner contends that the Court of Appeals acted with grave abuse of discretion in upholding the HDMF’s Resolution denying petitioner’s application for renewal of waiver of the Fund membership coverage. superior retirement plan and superior housing plan are joint requirements. No. However. Absent a showing that the denial of petitioner’s application by the HDMF is tainted by caprice. whimsically or capriciously denied petitioner’s application for renewal of its waiver. company. this is the reason why its . and in confirming the authority of the HDMF to amend the implementing Rules of the Fund. and deliberation of petitioner’s retirement plan vis-à-vis the Fund. This Court thus holds that the Court of Appeals committed no grave abuse of discretion amounting to lack or excess of jurisdiction when it affirmed the denial of petitioner’s application for renewal of waiver by the HDMF. 7742 or its Implementing Rules and Regulations that the HDMF shall automatically renew a waiver from the Fund coverage upon an application for renewal.5 For the exercise of administrative discretion is a policy decision and a matter that best be discharged by the government agency concerned and not by the courts. comparison.6 Hence.A. arbitrariness. It conducted the necessary investigation. Moreover. There is no provision whatsoever in R. there is no showing that the HDMF arbitrarily. It claims that Section 5 of R. or class beyond the common advantages of other citizens. superior retirement plan and superior housing plan were separate and alternative grounds for the waiver of the Fund coverage. the instant petition for certiorari. It is a doctrine of long-standing that courts will not interfere in matters which are addressed to the sound discretion of the government agency entrusted with regulation of activities coming under the special and technical training and knowledge of such agency. 7742 does not grant HDMF the power to amend the implementing Rules and Regulations. its authority to promulgate implementing Rules does not include the power to amend or revise them. it may be withdrawn by the State on a finding that the recipient is no longer entitled to it. Petitioner claims that under the original Implementing Rules and Regulations of the HDMF. under the Amended Rules and Regulations. Since petitioner does not have a housing plan. the grant of waiver or exemption from the coverage of the Fund is but a mere privilege granted by the State.6 In this case. A privilege is a particular and peculiar benefit or advantage enjoyed by a person. not by the courts. evaluation.” Since the HDMF is merely an administrative agency tasked to implement the law. No.7 Like any other privilege or exemption.A. contending that “the power to make laws does not necessarily include the power to alter or repeal the same. this Court will not interfere in the exercise of its discretion.
objectives. or repeal the same. remedies and sanctions intended by the legislature. It is the peculiar province of the legislature to prescribe general rules for the government of society. Following the doctrine of necessary implication. it insists that the HDMF exceeded its authority when it amended its original Rules and Regulations. Hence. In this sense. have the force and effect. However. The details and manner of carrying out the law are left to the administrative agency charged with its implementation. The legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives.9 Hence. change.R. 1997 AFFIRMED IN TOTO. Consequently. 41487 are . revise. SP No. alter. The legislative power has been described generally as the power to make. alter. or modify a law is thus part of such legislative power.7 retirement plan was not considered superior to that of the Fund. 1. Thus. the power to make rules and regulations. or partake of the nature.10 The law delegated to the HDMF the rule-making power since this is necessary for the proper exercise of its authority to administer the Fund. The legislative power is granted pursuant to Section 1. except to the extent reserved to the people by the provision on initiative and referendum. in general. Costs against petitioner. and repeal laws. Article VI of the Constitution which provides: SEC.8 The authority to amend. SO ORDERED. pursuant to the authority conferred upon it by law. it has become customary for it to delegate to instrumentalities of the executive department. purposes. in CA-G. WHEREFORE. known as administrative agencies. This is because statutes are generally couched in general terms which express the policies. The Decision and Resolution of the Court of Appeals dated February 5 and July 17. the petition is DISMISSED. this grant of express power to formulate implementing rules and regulations must necessarily include the power to amend. the legislature cannot foresee every contingency involved in a particular problem that it seeks to address. of a statute. its application for renewal of waiver was denied. rules and regulations issued by an administrative agency. rules and regulations promulgated by an administrative agency are the product of a delegated power to create new or additional legal provisions that have the effect of law.
. having completed the training program for Executive Leadership and Management in 1982 under the Civil Service Academy. 1996 as Department Manager of the Legal Services Department. vs. 58987.8 Republic of the Philippines SUPREME COURT Manila EN BANC G. all other third level positions of equivalent category in all branches and instrumentalities of the national government. including government owned and controlled . Abella. 1979. petitioner. 2004 FRANCISCO ABELLA JR. the pertinent provisions of which read: '1. The Assailed Decision disposed as follows: "WHEREFORE. now the Philippine Economic Zone Authority (PEZA).R. the CSC correctly disapproved his appointment.: Both the appointing authority and the appointee are the real parties in interest. Despite having legal interest and standing. 850 dated April 16. "It appears. In sum. Jr. in a suit assailing a Civil Service Commission (CSC) order disapproving an appointment. series of 1994.. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court. however. which was then the required eligibility for said position. DECISION PANGANIBAN. retired from the Export Processing Zone Authority (EPZA). No. 152574 November 17. 1994. 2002 Resolution3 of the Court of Appeals (CA) in CA-GR SP No. on July 1. 21. J. CIVIL SERVICE COMMISSION. a lawyer. The Facts The CA narrates the factual antecedents in this wise: "Petitioner Francisco A. and both have legal standing. herein petitioner unsuccessfully challenges the constitutionality of the CSC circular that classifies certain positions in the career service of the government. pursuant to CSC Resolution No. that on May 31."4 The challenged Resolution denied petitioner's Motion for Reconsideration. petitioner was appointed to a Career Executive Service (CES) position. Positions Covered by the Career Executive Service (b) In addition to the above identified positions and other positions of the same category which had been previously classified and included in the CES. the petition for review is DENIED for lack of merit. challenging the November 16. respondent. 2001 Decision2 and the March 8. the Civil Service Commission issued Memorandum Circular No. He held a civil service eligibility for the position of Department Manager. hence. but did not have the corresponding eligibility for it.
Status of Appointment of Incumbents of Positions Included Under the Coverage of the CES. 1994 is unconstitutional as it rendered his earned civil service eligibility ineffective or inappropriate for the position of Department Manager [III]"5 Ruling of the Court of Appeals The CA shunned the issue of constitutionality. petitioner was issued a temporary appointment as Department Manager III. he had no vested right in the office. 001143 dated May 11. Labor and Employment Center. Labor and Employment Center. Thus. upon promotion or transfer to other Career Executive Service (CES) positions. 8 On reconsideration. it held that petitioner did not have legal standing to question the disapproval of his appointment. petitioner brought this recourse to this Court. when said appointment was submitted to respondent Civil Service Commission Regional Office No. 2000 and May 11.9 corporations with original charters are embraced within the Career Executive Service provided that they meet the following criteria: '1. affirming the action taken by respondent.9 Unsatisfied. s." "Undaunted. 21. 1999. However. Civil Service Commission. 1998 and Mathay v. 1999. the position is a career position. s. Petitioner was advised by SBMA of the disapproval of his appointment. which issued Resolution No. these incumbents shall be under temporary status in said other CES positions until they qualify. In view thereof. Petitioner's motion for reconsideration thereof was denied by the CSC in Resolution No. Incumbents of positions which are declared to be Career Executive Service positions for the first time pursuant to this Resolution who hold permanent appointments thereto shall remain under permanent status in their respective positions. Accordingly. since his appointment was disapproved. '4.7 the appellate court ruled that only the appointing officer may request reconsideration of the action taken by the CSC on appointments. as his appointment was dependent on the CSC's approval. the CA added that petitioner was not the real party in interest. petitioner was hired by the Subic Bay Metropolitan Authority (SBMA) on a contractual basis.6 Citing CSC Memorandum Circular 40. petitioner filed with [the CA] a petition for review seeking the reversal of the CSC Resolutions dated January 10. arguing that a constitutional question should not be passed upon if there are other grounds upon which the case may be decided. SBMA on July 9. 000059. it was disapproved on the ground that petitioner's eligibility was not appropriate. III. dated January 10. On January 1.10 The Issues . "Petitioner appealed the disapproval of his permanent appointment by respondent to the Civil Service Commission. 2000. petitioner was issued by SBMA a permanent employment as Department Manager III. the duties and responsibilities of the position require the performance of executive or managerial functions. However.' "Two years after his retirement. 2000 on the ground that CSC Memorandum Circular No. 2000. the position is above division chief level '3. '2.
14 Thus.10 Petitioner raises the following issues for our consideration: "A. Nevertheless. the law requires the appointment to be submitted to the CSC which will ascertain. the choice is subject to the caveat that the appointee possesses the required qualifications. in dismissing petitioner's appeal on a mere technicality considering that petitioner is questioning the constitutionality of respondent office' issuance of Section 4 of CSC Memorandum Circular No. "B.12 Grave abuse of discretion is a ground for a petition for certiorari under Rule 65 of the Rules of Court."11 The Court's Ruling The Petition is partly meritorious. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioner lacks the personality to question the disapproval by respondent office of petitioner's appointment as Department Manager III.15 To make it fully effective. s." not "grave abuse of discretion. The grounds shall be deemed "reversible errors. and disapprove . which deprived petitioner his property right without due process of law. whether original or promotional.17 The applicable provision of the Civil Service Law reads: "SECTION 9. — The Commission shall administer the Civil Service and shall have the following powers and functions: "(h) Approve all appointments. Labor and Employment Center. this Court resolved to grant due course to the Petition and to treat it appropriately as a petition for review on certiorari under Rule 45 of the Rules of Court. except those of presidential appointees. Labor and Employment Center. firemen. in the main." Approval Required for Permanent Appointment A permanent appointment in the career service is issued to a person who has met the requirements of the position to which the appointment is made in accordance with the provisions of law. whether the proposed appointee is qualified to hold the position and whether the rules pertinent to the process of appointment were observed. police forces. to positions in the civil service. members of the Armed Forces of the Philippines. and jailguards. "C. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioner is not the real party in interest to question the disapproval by respondent office of petitioner's appointment as Department Manager III. Whether or not Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction.13 It implies the civil service eligibility of the appointee. 1994. Powers and Functions of the Commission. First Issue: Who May File Reconsideration or Appeal Preliminary Observation Petitioner imputes to the CA "grave abuse of discretion amounting to lack of jurisdiction" for ruling that he had no legal standing to contest the disapproval of his appointment. SBMA. an appointment to a civil service position must comply with all legal requirements. the rules and the standards promulgated pursuant thereto. 21. while the appointing authority has the discretion to choose whom to appoint.16 Thus. SBMA.
25 may compel the exercise of an appointment for a favored person. the said authority can "defend its appointment since it knows the . the CSC determines whether the appointee possesses the appropriate civil service eligibility or the required qualifications. If he does."24 No tribunal. including those abstract qualities that define his personality -. Civil Service Commission22 declared: "Appointment is an essentially discretionary power and must be performed by the officer in which it is vested according to his best lights.is the prerogative of the appointing authority."18 The appointing officer and the CSC acting together. Thus. finally. which provides: "Section 2. shall be submitted to it by the appointing authority within thirty days from issuance. "the selection of the appointee -.taking into account the totality of his qualifications. The power of appointment necessarily entails the exercise of judgment and discretion. then the appointment cannot be faulted on the ground that there are others better qualified who should have been preferred. Thus. The appointing authority must have the right to contest the disapproval. only the appointing authority had the right to challenge the CSC's disapproval. 1998 (Omnibus Rules on Appointment and Other Personal Actions).19 In acting on the appointment. without prejudice to the liability of the appointing authority for appointments issued in violation of existing laws or rules: Provided.11 those where the appointees do not possess the appropriate eligibility or required qualifications. though not concurrently but consecutively."23 Significantly. make an appointment complete.27 this Court has affirmed that the appointing authority stands to be adversely affected when the CSC disapproves an appointment.20 According to the appellate court. s." Appointing Authority's Right to Challenge CSC Disapproval While petitioner does not challenge the legality of this provision. This is a political question involving considerations of wisdom which only the appointing authority can decide.26 The CSC's disapproval of an appointment is a challenge to the exercise of the appointing authority's discretion. In Central Bank v. Civil Service Commission. he now claims that it is merely a technicality. not even this Court. if this should take place.21 Luego v. the only condition being that the appointee should possess the qualifications required by law. the appointment becomes ineffective thirty days thereafter. it should be disapproved. If the appointee does. Section 2 of Rule VI of CSC Memorandum Circular 40. All appointments requiring the approval of the Commission as herein provided. Request for Reconsideration of. It relied on Section 2 of Rule VI of CSC Memorandum Circular 40. which does not prevent him from requesting reconsideration. if not. the appointment must be approved. 1998 is justified insofar as it allows the appointing authority to request reconsideration or appeal. the disapproval of an appointment may be made by the appointing authority and submitted to the Commission within fifteen (15) calendar days from receipt of the disapproved appointment. otherwise. We clarify. or appeal from. That the Commission shall keep a record of appointments of all officers and employees in the civil service. s. An appointment shall take effect immediately upon issue by the appointing authority if the appointee assumes his duties immediately and shall remain effective until it is disapproved by the Commission.
Kilosbayan v.S. CIVIL PROCEDURE 328 ) "Standing is a special concern in constitutional law because in some cases suits are brought not by parties who have been personally injured by the operation of a law or by official action taken. "legal standing" and "real party in interest" are different concepts. there is none to preclude the appointee from taking the same course of action. Morato31 explained: "The difference between the rule on standing and real party-in-interest has been noted by authorities thus: 'It is important to note . He had a personal stake in the outcome of the case. taxpayers or voters who actually sue in the public interest. he should be granted the opportunity to prove his eligibility.34 "Interest" within the meaning of the rule means material interest or an interest in issue and to be affected by the decree. 88 Phil. the question as to 'real party-in-interest' is whether he is 'the party who would be [benefited] or injured by the judgment.. Although petitioner had no vested right to the position. 2d 633 (1962)) "On the other hand. 7 L.' (Baker v. including the Civil Service Commission. (FRIEDENTHAL.33 it was his eligibility that was being questioned. as distinguished from mere interest in the question involved or a mere incidental interest. The Appointee a Real Party in Interest A real party in interest is one who would be benefited or injured by the judgment. he was prejudiced by the disapproval.35 Otherwise . Hence the question in standing is whether such parties have 'alleged such a personal stake in the outcome of the controversy to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions. Aggrieved parties. or the 'party entitled to the avails of the suit. Ed. but by concerned citizens.29 Appointee's Legal Standing to Challenge the CSC Disapproval While there is justification to allow the appointing authority to challenge the CSC disapproval."28 It is also the act of the appointing authority that is being questioned when an appointment is disapproved. since he could not continue his office. Corollary to this point. 125. Carr. or one entitled to the avails of the suit. then more so should petitioner be allowed to contest the CSC Order disapproving his appointment.12 reasons for the same. Clearly. 186. Warner Barnes & Co. KANE AND MILLER. Although all three requirements are directed towards ensuring that only certain parties can maintain an action. as well as broader policy concerns relating to the proper role of the judiciary in certain areas. 131 )"32 If legal standing is granted to challenge the constitutionality or validity of a law or governmental act despite the lack of personal injury on the challenger's part. which justifies his challenge to the CSC act that denied his permanent appointment. the concepts of "legal standing" and "real party in interest" become relevant. . is very different from questions relating to whether a particular plaintiff is the real party-in-interest or has capacity to sue.. standing restrictions require a partial consideration of the merits. that standing because of its constitutional and public policy underpinnings. . should be given the right to file motions for reconsideration or to appeal. Ltd.' (Salonga v. 369 U. Although commonly directed towards ensuring that only certain parties can maintain an action.30 On this point.
CSC Resolution 99-193638 recognizes the right of the adversely affected party to appeal to the CSC Regional Offices prior to elevating a matter to the CSC Central Office. because he is prevented from assuming the office in a permanent capacity. which had previously denied his Petition for Certiorari for being the wrong remedy and for being filed out of time. or from a future. there is no legislative intent to bar appointees from challenging the CSC's disapproval. . the present case is being decided en banc. sought the nullification of CSC Resolutions that recalled his appointment of a city government officer. are silent on whether appointees have a similar right to file motions for reconsideration of. Civil Service Commission. unfavorable decisions involving appointments. And the CSC could not have acted without jurisdiction. Appointee Allowed Procedural Relief Section 2 of Rule VI of CSC Memorandum Circular 40. 1998 should not be interpreted to restrict solely to the appointing authority the right to move for a reconsideration of. The Court merely noted in passing -. contingent. At any rate. one who has no right or interest to protect cannot invoke the jurisdiction of the court as a party-plaintiff in an action.42 Furthermore. In that case. Quezon City Mayor Ismael A. Positions Covered by the Career Executive Service. This judicial pronouncement does not override Mathay v. or to appeal. because there was an available remedy of appeal. Parenthetically.41 only the appointing officer could request reconsideration of actions taken by the CSC on appointments. Mathay Jr.that based on a similar provision. The appointee should have the same right. He filed a Petition assailing the CA Decision. The view that only the appointing authority may request reconsideration or appeal is too narrow. the disapproval of an appointment. s. Series of 1994 Alleging that his civil service eligibility was rendered ineffective and that he was consequently deprived of a property right without due process. Moreover.13 stated.44 Second Issue: Constitutionality of Section 4. from which the CSC derives the authority to promulgate its rules and regulations. subordinate. he would necessarily benefit if a favorable judgment is obtained.by way of obiter -. Mathay's Petition for Certiorari filed with the CA was improper. s. PD 807 and EO 292. Indeed. CSC Memorandum Circular 21. and the ruling may reverse previous doctrines laid down by this Court. 1994. considering that it was empowered to recall an appointment initially approved. or appeals from.37 Although the earlier discussion demonstrates that the appointing authority is adversely affected by the CSC's Order and is a real party in interest.45 petitioner challenges the constitutionality of CSC Memorandum Circular 21. We observed then that the CSC Resolutions were already final and could no longer be elevated to the CA.43 The right of the appointee to seek reconsideration or appeal was not the main issue in Mathay. the appointee is rightly a real party in interest too.36 As a general rule. or consequential interest.40 which the CA relied on.39 The adversely affected party necessarily includes the appointee. as an approved appointment would confer on him all the rights and privileges of a permanent appointee. He is also injured by the CSC disapproval.46 The pertinent part of this Circular reads: "1. the rule refers to a real or present substantial interest as distinguished from a mere expectancy.
Incumbents of positions which are declared to be Career Executive Service positions for the first time pursuant to this Resolution who hold permanent appointments thereto shall remain under permanent status in their respective positions. SBMA. efficiency. notwithstanding the classification of the latter as a CES position. for which appointments require examinations. these incumbents shall be under temporary status in said other CES positions until they qualify. and courtesy in the Civil Service." "4. Status of Appointment of Incumbents of Positions Under the Coverage of the CES. including government-owned or controlled corporations with original charters are embraced within the Career Executive Service provided that they meet the following criteria: "1. Assistant Regional Director (department-wide and bureau-wide) and Chief of Department Service[. responsiveness. through the Executive Leadership and Management (ELM) training program.49 Civil Service laws have expressly empowered the CSC to issue and enforce rules and regulations to carry out its mandate. the duties and responsibilities of the position require the performance of executive or managerial functions. "2. the position is a career position. Bureau Director. However. as "the central personnel agency of the government." Petitioner argues that his eligibility.50 Logically. integrity. the position is above division chief level."48 It further requires that appointments in the civil service be made only through merit and fitness to be determined by competitive examination. CSC Authorized to Issue Rules and Regulations The Constitution mandates that. Assistant Secretary.14 "(a) The Career Executive Service includes the positions of Undersecretary. Assistant Bureau Director.] "(b) In addition to the above identified positions and other positions of the same category which had been previously classified and included in the CES. Career Service Classified by Levels Positions in the career service. he should retain his eligibility for the position of department manager III. all other third level positions in all branches and instrumentalities of the national government. the CSC had to issue guidelines to meet this objective. could no longer be affected by a new eligibility requirement. specifically through the issuance of the challenged Circular. "3. hence. PEZA."47 the CSC should "establish a career service and adopt measures to promote the morale. progressiveness. upon promotion or transfer to other Career Executive Service (CES) positions. Regional Director (department-wide and bureau-wide). He claims that he was eligible for his previous position as department manager of the Legal Services Department. In the exercise of its authority. Labor and Employment Center. the CSC deemed it appropriate to clearly define and identify positions covered by the Career Executive Service. are grouped into three major levels: .
which have settled meanings in criminal jurisprudence. First. which in petitioner's case was a CSEE.15 "(a) The first level shall include clerical. thus. Security of Tenure Not Impaired The argument of petitioner that his security of tenure is impaired is unconvincing. also ceased. notwithstanding the lack of CSEE. He points in particular to the CSC's alleged failure to notify him of a hearing relating to the issuance of the challenged Circular. Eligibility must necessarily conform to the requirements of the position. technical. "(b) The second level shall include professional. One cannot claim security of tenure if one held no tenure prior to appointment. trades. Due Process Not Violated Petitioner contends that his due process rights.57 Second. it was necessary for him to comply with the eligibility prescribed at the time for that position. They are allowed to retain their positions in a permanent capacity. however. petitioner had neither rank nor position prior to his reemployment. or scientific work in a non-supervisory or supervisory capacity requiring at least four years of college work up to Division Chief level. The classification of positions in career service was a quasi-legislative. Court of Appeals.59 We are not convinced. This distinction determines whether prior notice and hearing are necessary. as enunciated in Ang Tibay v.55 These terms. in accordance with the standards laid down by the law. and "(c) The third level shall cover positions in the Career Executive Service. notwithstanding his lack of eligibility.except in the case of first and second level employees in the civil service -. the Circular recognizes the rule of prospectivity of regulations. an administrative body adjudicates the rights of persons before it. security of tenure in the Career Executive Service -. crafts. there is no basis to argue that it is an ex post facto law54 or a bill of attainder. Those in the third level (CES positions) require Career Service Executive Eligibility (CSEE) as a requirement for permanent appointment. Upon his reemployment56 years later as department manager III at SBMA in 2001. are clearly inapplicable here.pertains only to rank. technical. The government service of petitioner ended when he retired in 1996.58 were violated.60 The .53 hence. not a quasijudicial. Clearly.52 The challenged Circular did not revoke petitioner's ELM eligibility. He was appointed to a CES position. issuance. not to the position to which the employee may be appointed. his right to remain in a CES position. his eligibility was inadequate. In exercising its quasi-judicial function."51 Entrance to the different levels requires the corresponding civil service eligibility. and scientific positions which involve professional. and custodial service positions which involve non-professional or sub[-]professional work in a nonsupervisory or supervisory capacity requiring less than four years of collegiate studies. Rights Protected The challenged Circular protects the rights of incumbents as long as they remain in the positions to which they were previously appointed.
WHEREFORE. Costs against petitioner. as enumerated in Ang Tibay. Subic Bay Metropolitan Authority.65 Final Issue: Disapproval of Appointment Since petitioner had no CES eligibility. the challenged Circular was an internal matter addressed to heads of departments.63 Prior notice to and hearing of every affected party. as basis for official action and the exercise of judicial discretion. It needed no prior publication. bureaus and agencies. .64 Significantly. merely examines the conformity of the appointment with the law and the appointee's possession of all the minimum qualifications and none of the disqualification.16 determination of facts and the applicable law. the Petition is GRANTED insofar as it seeks legal standing for petitioner.66 The CSC. are not required since there is no determination of past events or facts that have to be established or ascertained. SO ORDERED. while petitioner was able to demonstrate his standing to appeal the CSC Resolutions to the courts. These requirements include prior notice and hearing. it is elementary that due process requirements. because the nature of the action did not involve the imposition of an administrative disciplinary measure. the CSC correctly denied his permanent appointment. The appointee need not have been previously heard. 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. must be observed. are essential for the performance of this function. but DENIED insofar as it prays for the reversal of the CSC Resolutions disapproving his appointment as department manager III of the Labor and Employment Center. As a general rule.62 On the other hand. since it had been issued as an incident of the administrative body's power to issue guidelines for government officials to follow in performing their duties.67 In sum. he failed to prove his eligibility to the position he was appointed to.61 On these considerations. as elements of due process. in approving or disapproving an appointment. prior notice and hearing are not essential to the validity of rules or regulations promulgated to govern future conduct.
BENJAMIN KHO. Aquino. SECRETARY JOSE PARDO. DECISION SANDOVAL-GUTIERREZ. former President Corazon C. (c) Provide all intelligence units of operating Bureaus or Offices under the Ministry with the general framework and guidelines in the conduct of intelligence and investigating works. whether domestic or foreign. 225 on March 17. petitioners Buklod Ng Kawaning EIIB. investigate the same and aid in the prosecution of cases. among others. issued Executive Order No. 142801-802. 191i and Executive Order No. 1989. but not limited to. SECRETARY ARTEMIO TUQUERO. HON. DEPARTMENT OF FINANCE. LULU MENDOZA. President Aquino issued Memorandum Order No.”vi . 1987. respondents. PRINCESA. petitioners. 2001] BUKLOD NG KAWANING EIIB. which may adversely affect national financial interest with the goal of regulating. such as. and dollarsalting. gather and evaluate intelligence reports and information and evidence on the nature. (d) Supervise. No.R.”v In a desire to achieve harmony of efforts and to prevent possible conflicts among agencies in the course of their anti-smuggling operations. prohibition and mandamus. seek the nullification of Executive Order No. HON. smuggling. controlling or preventing said activities. (f) Perform such other appropriate functions as may be assigned by the Minister or his deputies. BENIGNO MANGA. modes and extent of illegal activities affecting the national economy. tax evasion. The facts are undisputed: On June 30. Benigno Manga and Lulu Mendoza. DEPARTMENT OF JUSTICE. J. 127iii establishing the Economic Intelligence and Investigation Bureau (EIIB) as part of the structural organization of the Ministry of Finance. ZAMORA. CESAR POSADA. vs. anti-graft and corruption cases against personnel of the Ministry and its constituents units. DEPARTMENT OF BUDGET AND MANAGEMENT. (b) Coordinate with external agencies in monitoring the financial and economic activities of persons or entities. that the EIIB “shall be the agency of primary responsibility for anti-smuggling operations in all land areas and inland waters and waterways outside the areas of sole jurisdiction of the Bureau of Customs. HON.: In this petition for certiorari. July 10. providing. Remedios Princesa. for themselves and in behalf of others with whom they share a common or general interest. HON. Benjamin Kho. (e) Investigate.17 EN BANC [G.iv The EIIB was designated to perform the following functions: “(a) Receive. Cesar Posada. monitor and coordinate all the intelligence and investigation operations of the operating Bureaus and Offices under the Ministry. hear and file. SECRETARY BENJAMIN DIOKNO. REMEDIOS G. 223ii on the ground that they were issued by the Office of the President with grave abuse of discretion and in violation of their constitutional right to security of tenure. upon clearance by the Minister. economic sabotage. EXECUTIVE SECRETARY RONALDO B.
pursuant to a bona fide reorganization resulting to abolition. Article VII of the Constitution.” Petitioners contend that the issuance of the afore-mentioned executive orders is: (a) a violation of their right to security of tenure. B. Article IX-B of the Philippine Constitution and/or for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction.” The petition is bereft of merit. if Executive Order Nos. the Solicitor General maintains that: (a) the President enjoys the totality of the executive power provided under Sections 1 and 7. C. Similarly.” the functions of which are essentially and substantially the same as that of EIIB. redundancy. merger.” it was only “deactivated. 191 and 223. and (c) the EIIB was not “abolished. or on January 7. to avoid duplicity of work and to streamline the functions of the bureaucracy. former President Estrada ordered the deactivation of EIIB and the transfer of its functions to the Bureau of Customs and the National Bureau of Investigation. we deem it necessary to address the issues. It is in the interest of the State that questions relating to the status and existence of a public office be settled . such reorganization was made in bad faith. thus. such as. 191 and 223. 191 and 223 should be annulled as they are unconstitutional for being violative of Section 2(3).xi Agonizing over the loss of their employment. 223x providing that all EIIB personnel occupying positions specified therein shall be deemed separated from the service effective April 30. 2000.18 Eleven years after. President Estrada issued Executive Order No. They anchor their petition on the following arguments: “A Executive Order Nos.”vii Motivated by the fact that “the designated functions of the EIIB are also being performed by the other existing agencies of the government” and that “there is a need to constantly monitor the overlapping of functions” among these agencies. 191 and 223 are considered to effect a reorganization of the EIIB. and (c) a usurpation of the power of Congress to decide whether or not to abolish the EIIB. The President has no authority to abolish the EIIB. division. 196viii creating the Presidential Anti-Smuggling Task Force “Aduana. or consolidation of positions. (b) the said executive orders were issued in the interest of national economy. he has the authority to issue Executive Order Nos. 2000. petitioners now come before this Court invoking our power of judicial review of Executive Order Nos. On March 29. 191 entitled “Deactivation of the Economic Intelligence and Investigation Bureau. (b) tainted with bad faith as they were not actually intended to make the bureaucracy more efficient but to give way to Task Force “Aduana. Meanwhile. President Estrada issued Executive Order No. The abolition of the EIIB is a hoax.”ix Then the day feared by the EIIB employees came. 2000. President Joseph Estrada issued Executive Order No. Despite the presence of some procedural flaws in the instant petition. Arguing in behalf of respondents. petitioners’ disregard of the hierarchy of courts and the non-exhaustion of administrative remedies.
while in abolition.xix or certain laws may grant him the broad authority to carry out reorganization measures. or by authority of law.19 without delay. phasing out or abolition of the activities shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President.xii we liberally decreed: “The Court disregards the questions raised as to procedure. 7645 provides that: ‘Sec.Does the “deactivation” of EIIB constitute “abolition” of an office? However. it seems that the resolution of this case hinges on the question . by statute. albeit remaining dormant or inoperative. Section 48 of R. Actual scaling down. it was argued that there is no law which empowers the President to reorganize the BIR. A public office is either created by the Constitution.’ . the office ceases to exist. it may be abolished by the same legislature that brought it into existence. the same is not true in deactivation where the office continues to exist. to annul.xv Thus. including the need for stability in the public service.xvii Thus. agencies or offices in the executive department are concerned.xiii while to “abolish” means to do away with.xvi This proceeds from the legal precept that the power to create includes the power to destroy. abolition denotes an intention to do away with the office wholly and permanently. the President’s power of control may justify him to inactivate the functions of a particular office. thus: “Initially. we are certain that the ultimate queries should be – a) Does the President have the authority to reorganize the executive department? and. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch.A.xx The case in point is Larin v. subject to civil service rules and regulations.O. abrogate or destroy completely. – The heads of departments. Be that as it may. failure to exhaust administrative remedies. X x x. it is argued that there is no law yet which empowers the President to issue E. there exists a distinction between the words “deactivate” and “abolish. after coming to terms with the prevailing law and jurisprudence. In decreeing otherwise.' and because of the serious implications of these cases on the administration of the Philippine civil service and the rights of public servants. except where the office was created by the Constitution itself. No. b) How should the reorganization be carried out? Surely. this Court sustained the following legal basis. 48.xviii The exception. however. bureaus and offices and agencies are hereby directed to identify their respective activities which are no longer essential in the delivery of public services and which may be scaled down. is that as far as bureaus. deactivation and abolition are both reorganization measures. The Solicitor General only invokes the above distinctions on the mistaken assumption that the President has no power to abolish an office. Mison.xiv In essence.xxi In this case.” At first glance. We are not without precedent. The general rule has always been that the power to abolish a public office is lodged with the legislature.” To “deactivate” means to render inactive or ineffective or to break up by discharging or reassigning personnel. 132 or to reorganize the BIR. Executive Secretary. `[b]ecause of the demands of public interest. In Dario v. phased out or abolished. for two reasons. the standing of certain parties to sue. We do not agree.
So far.20 Said provision clearly mentions the acts of “scaling down.O..” We adhere to the precedent or ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure. (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down. programs. there is yet no law amending or repealing said decrees. former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act).O. Organized Changes. executive orders. Residual Powers. decrees. activities and systems and procedures. 132 is Section 20. let us take a look at the assailed executive order. which includes the power to group. No. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government.xxiii Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant .’ (italic ours) This provision speaks of such other powers vested in the President under the law. phased-out or abolished. phasing out and abolition” of offices only and does not cover the creation of offices or transfer of functions. In the whereas clause of E. No. services and activities and to standardize salaries and materials.Unless otherwise created by law or directed by the President of the Philippines. objectives. to transfer functions. 20. letters of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended. the act of creating and decentralizing is included in the subsequent provision of Section 62 which provides that: ‘Sec. 7645 quoted in Larin. and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. Unless otherwise provided by law or directed by the President of the Philippines. bureaus. Another legal basis of E. Such a ruling further finds support in Section 78 of Republic Act No. The validity of these two decrees are unquestionable. no organizational unit or changes in key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act. Unauthorized organizational charges.’ (italics ours) The foregoing provision evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned. – Unless Congress provides otherwise.O. missions.xxii Under this law. 191. to create and classify functions. 8760. What law then gives him the power to reorganize? It is Presidential Decree No. proclamations. offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of their respective mandates. no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act.” (Emphasis supplied) Now. Nevertheless. “Sec. Book III of E. 292 which states: ‘Sec. the President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law. a provision similar to Section 62 of R. No. projects. 1772 which amended Presidential Decree No. functions. 62. 77. consolidate bureaus and agencies. thus. repealed or revoked. to abolish offices.A. the heads of departments. The 1987 Constitution clearly provides that “all laws. 1416.
authority and responsibility between them. administrative and special staffs of EIIB are to be composed of people who are already in the public service. it is subject to the President’s continuing authority to reorganize. We are left only with the duty to sustain. or abolition thereof by reason of economy or redundancy of functions. the thrust of E. the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. shall have the continuing authority to reorganize the administrative structure of the Office of the President. but to achieve the ultimate purpose of E. 191. Reorganization is carried out in ‘good faith’ if it is for the purpose of economy or to make bureaucracy more efficient.. No. 196 provides that the technical. Since their employment with the Task force is only by way of detail or assignment. (c) where incumbents are replaced by those less qualified in terms of status of appointment.” For this purpose. But of course. what is then left for us to resolve is whether or not the reorganization is valid.O.xxix Petitioners claim that the deactivation of EIIB was done in bad faith because four days after its deactivation. “the President. i. Secondly. An examination of the pertinent Executive Ordersxxx shows that the deactivation of EIIB and the creation of Task Force Aduana were done in good faith. (d) where there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices. they would be sent back to the agency concerned. While Task Force Aduana was created to take the place of EIIB. they retain their employment with the existing agencies. No. which is economy. We are not convinced. No. including the lines of control. Their tenure with the Task Force would only be temporary. he may transfer the functions of other Departments or Agencies to the Office of the President. Republic Act No.O.xxvii Pertinently. President Estrada created the Task Force Aduana. Book III of Executive Order No.xxv we ruled that reorganization “involves the reduction of personnel. subject to the policy in the Executive Office and in order to achieve simplicity. they being employees of other existing agencies. performance and merit. (b) where an office is abolished and another performing substantially the same functions is created. there is no employment of new personnel to man the Task Force. only when the agency where they belong is called upon to assist the Task Force. Hence. We must not lose sight of the very source of the power – that which constitutes an express grant of power.e. 196 is to have a small group of military men under the direct control and supervision of the President as base of the government’s anti- . In Canonizado v. Firstly. reorganizations have been regarded as valid provided they are pursued in good faith. 6656xxviii provides for the circumstances which may be considered as evidence of bad faith in the removal of civil service employees made as a result of reorganization. its creation does not entail expense to the government.” It takes place when there is an alteration of the existing structure of government offices or units therein. Under Section 31. The EIIB is a bureau attached to the Department of Finance. And should the need for them cease. consolidation of offices. economy and efficiency. to wit: (a) where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned. Aguirre.xxiv The law has spoken clearly.xxvi It falls under the Office of the President.21 to Circulars or Orders issued for the purpose by the Office of the President . and (e) where the removal violates the order of separation. 292 (otherwise known as the Administrative Code of 1987). It was not for the purpose of removing the EIIB employees. It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department. In this jurisdiction. E.O.
The EIIB had proven itself burdensome for the government because it maintained separate offices in every region in the Philippines. Such a smaller base has the necessary powers 1) to enlist the assistance of any department. being composed of elements from the Presidential Security Group (PSG) and Intelligence Service Armed Forces of the Philippines (ISAFP).000. Lastly. office. no dismissal (in case of dismissal) or separation actually occurs because the position itself ceases to exist. or where claims of economy are belied by the existence of ample funds. bureaus.xxxiv These amounts were far above the P50. There is an invalid ‘abolition’ as where there is merely a change of nomenclature of positions. P182. and to use their personnel. the EIIB did not have this power. the functions of the EIIB have devolved upon the Task Force Aduana. Civil Sevice Commission. it appears that the allotted amount for the EIIB’s general administration.xxxvi has the essential power to effect searches. the idea is to encourage the utilization of personnel. Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. if the ‘abolition. security of tenure would not be a Chinese wall. the Task Force Aduana has the additional authority to conduct investigation of cases involving ill-gotten wealth. In Blaquera v. P238. for 1999. In that event.xxxiii and. Tracing from the yearly General Appropriations Act. is void ab initio. and operations for the year 1995.xxxviii In the instructive words laid down by this Court in Dario v. The Task Force Aduana. etc. And. no valid ‘abolition’ takes and whatever ‘abolition’ is done. facilities and resources. it is evident from the yearly budget appropriation of the government that the creation of the Task Force Aduana was especially intended to lessen EIIB’s expenses.889. P219. support. is done for political reasons or purposely to defeat security of tenure. no one can be said to have any vested right in an office or its salary. facilities and resources. This was not expressly granted to the EIIB. Be that as it may. The Task Force Aduana has the power to enlist the assistance of any department. we hold that petitioners’ right to security of tenure is not violated.xxxii for 1998.’ which is nothing else but a separation or removal. As a general rule. seizures and arrests. or instrumentality of the government. While basically. bureau. xxxvii we ruled that a reorganization in good faith is one designed to trim the fat off the bureaucracy and institute economy and greater efficiency in its operation. bureau. instead of maintaining an independent office with a whole set of personnel and facilities.156.” Obviously. And in that case.. Again.xxxix through Justice Abraham F. Indeed.000xxxv allocation to the Task Force Aduana for the year 2000.743. The EIIB did not have this power. otherwise not in good faith. including government-owned or controlled corporations.000.22 smuggling campaign. Except constitutional offices which provide for special immunity as regards salary and tenure. Consequently. And thirdly. we find the latter to have additional new powers.xxxi for 1996. or office and to use their respective personnel.000. there is no such thing as an absolute right to hold office. Sarmiento: Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith.000.000. Valid abolition of offices is neither removal nor separation of the incumbents. and 2) “to select and recruit personnel from within the PSG and ISAFP for assignment to the Task Force. Mison. a reorganization is carried out in “good faith” if it is for the purpose of economy or to make bureaucracy more efficient. agencies.031.xl . was P128. it cannot be said that there is a feigned reorganization. facilities and resources of the already existing departments.
Melo. Jr. Bellosillo. WHEREFORE. Puno.. Pardo. we cannot ignore the unfortunate reality that our government is also battling the impact of a plummeting economy. No costs. Vitug. the EIIB will not be the last agency to suffer the impact. Buena. Kapunan. the petition is hereby DENIED.J. Mendoza. Unless the government is given the chance to recuperate by instituting economy and efficiency in its system.Ynares- .23 While we cast a commiserating look upon the plight of all the EIIB employees whose lives perhaps are now torn with uncertainties. C. Davide. SO ORDERED. We cannot frustrate valid measures which are designed to rebuild the executive department..
77. In essence.” To “deactivate” means to render inactive or ineffective or to break up by discharging or reassigning personnel. albeit remaining dormant or inoperative. or certain laws may grant him the broad authority to carry out reorganization measures. abrogate or destroy completely.R. No. 142801-802. “Sec. Thus. What law gives President power to reorganize? In the whereas clause of E.O. deactivation and abolition are both reorganization measures. July 10. abolition denotes an intention to do away with the office wholly and permanently. Organized Changes. G. the President’s power of control may justify him to inactivate the functions of a particular office. former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act). Zamora.” We adhere to the precedent or ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency . it seems that the resolution of this case hinges on the question – Does the “deactivation” of EIIB constitute “abolition” of an office? However. 2001 FACTS: Pres.25 Sec. the EIIB personnel were deemed separated from service. 7645 quoted in Larin. while to “abolish” means to do away with. by statute. no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act. is that as far as bureaus. the office ceases to exist. Thus. to annul. No. may be abolished by the same legislature that brought it into existence. the same is not true in deactivation where the office continues to exist. A public office is either created by the Constitution. Be that as it may.A. or by authority of law. thus. The exception. there exists a distinction between the words “deactivate” and “abolish. deactivating the EIIB and transferring its functions to the BOC and NBI. 17: Power of Control ( Stop) Power to Reorganize Buklod ng Kawaning EIIB vs. however. agencies or offices in the executive department are concerned. Estrada issued EO 191. a provision similar to Section 62 of R. after coming to terms with the prevailing law and jurisprudence. RULING: Deactivation vs. 191. Unless otherwise provided by law or directed by the President of the Philippines. while in abolition. except where the office was created by the Constitution itself. GR: Congress has power to abolish The general rule has always been that the power to abolish a public office is lodged with the legislature. we are certain that the ultimate queries should be – a) Does the President have the authority to reorganize the executive department? And b) How should the reorganization be carried out? Surely. Abolition At first glance. This proceeds from the legal precept that the power to create includes the power to create includes the power to destroy. As a result.
objectives. (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down. activities and systems and procedures. subject to the policy in the Executive Office and in order to achieve simplicity. Book III of Executive Order No. being composed of elements from the Presidential Security Group (PSG) and Intelligence Service Armed Forces of the Philippines (ISAFP). Aguirre. . Reorganization is carried out in ‘good faith’ if it is for the purpose of economy or to make bureaucracy more efficient. The Task Force Aduana. It falls under the Office of the President. facilities and resources. phased-out or abolished. has the essential power to effect searches. In this jurisdiction. economy and efficiency. the Task Force Aduana has the additional authority to conduct investigation of cases involving illgotten wealth. including government-owned or controlled corporations. what is then left for us to resolve is whether or not the reorganization is valid. the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here.” For this purpose. we ruled that reorganization “involves the reduction of personnel. offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of their respective mandates.” It takes place when there is an alteration of the existing structure of government offices or units therein. consolidation of offices. We must not lose sight of the very source of the power – that which constitutes an express grant of power. it is subject to the President’s continuing authority to reorganize. the heads of departments. authority and responsibility between them. and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. The Task Force Aduana has the power to enlist the assistance of any department. programs. or instrumentality of the government. The EIIB did not have this power. missions. seizures and arrests. and (e) where the removal violates the order of separation. 6656 provides for the circumstances which may be considered as evidence of bad faith in the removal of civil service employees made as a result of reorganization. office. “the President. bureau. the EIIB did not have this power. reorganizations have been regarded as valid provided they are pursued in good faith. Again. or abolition thereof by reason of economy or redundancy of functions. Was the reorganization valid? It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department. Republic Act No. Hence. But of course. The EIIB is a bureau attached to the Department of Finance. he may transfer the functions of other Departments or Agencies to the Office of the President. we find the latter to have additional new powers. the functions of the EIIB have devolved upon the Task Force Aduana. shall have the continuing authority to reorganize the administrative structure of the Office of the President. While basically. We are left only with the duty to sustain. and to use their personnel. The law has spoken clearly. including the lines of control. functions. Under Section 31. performance and merit. projects. (b) where an office is abolished and another performing substantially the same functions is created. And. 8760. Such a ruling further finds support in Section 78 of Republic Act No. Under this law. bureaus. Pertinently. (d) where there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices. to wit: (a) where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned. 292 (otherwise known as the Administrative Code of 1987).26 under the executive structure. (c) where incumbents are replaced by those less qualified in terms of status of appointment. This was not expressly granted to the EIIB. Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. In Canonizado v.
. we ruled that a reorganization in good faith is one designed to trim the fat off the bureaucracy and institute economy and greater efficiency in its operation. Civil Sevice Commission. we hold that petitioners’ right to security of tenure is not violated. it cannot be said that there is a feigned reorganization. Valid abolition of offices is neither removal nor separation of the incumbents. Valid abolition of office is not separation Lastly. Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. In Blaquera v.27 Consequently.
by virtue of the powers vested in me by law. which the revered Mr. DECISION PUNO. with the following as members: Head. FIDEL V. respondents. fraudulent transactions and misrepresentations. do hereby direct the following: SECTION 1. this will require a computerized system to properly and efficiently identify persons seeking basic services on social security and reduce. RENATO VALENCIA. CARMENCITA REODICA. CIELITO HABITO. 127685. Department of the Interior and Local Government . vs. 2 Inter-Agency Coordinating Committee. HECTOR VILLANUEVA. 1996 and reads as follows: "ADOPTION OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM WHEREAS. 308 was issued by President Fidel V. NOW. 1998] BLAS F. and two.R. RAMOS.O. it is a usurpation of the power of Congress to legislate. TOMAS P. An Inter-Agency Coordinating Committee (IACC) to draw-up the implementing guidelines and oversee the implementation of the System is hereby created. Ramos on December 12. President of the Republic of the Philippines. WHEREAS. We grant the petition for the rights sought to be vindicated by the petitioner need stronger barriers against further erosion. WHEREAS. ROBERT BARBERS. National Economic Development Authority Secretary. a concerted and collaborative effort among the various basic services and social security providing agencies and other government instrumentalities is required to achieve such a system."xxvi Petitioner Ople prays that we invalidate Administrative Order No. No. if not totally eradicate. RUBEN D. A. Ople to prevent the shrinking of the right to privacy. July 23. I. HEAD OF THE NATIONAL COMPUTER CENTER and CHAIRMAN OF THE COMMISSION ON AUDIT. TORRES. No. AFRICA.28 EN BANC [G. viz: one. petitioner. ALEXANDER AGUIRRE. chaired by the Executive Secretary. it impermissibly intrudes on our citizenry's protected zone of privacy. Establishment of a National Computerized Identification Reference System. J. 308 entitled "Adoption of a National Computerized Identification Reference System" on two important constitutional grounds. SEC. OPLE. THEREFORE. A decentralized Identification Reference System among the key basic services and social security providers is hereby established.: The petition at bar is a commendable effort on the part of Senator Blas F. Justice Brandeis considered as "the most comprehensive of rights and the right most valued by civilized men. CESAR SARINO. Presidential Management Staff Secretary. there is a need to provide Filipino citizens and foreign residents with the facility to conveniently transact business with basic service and social security providers and other government instrumentalities.
Secretariat. No. The NSO. 308 was published in four newspapers of general circulation on January 22. Submission of Regular Reports. we issued a temporary restraining order enjoining its implementation. RAMOS" A. Petitioner contends: "A. On January 24. On April 8. Department of Health Administrator. 5.) FIDEL V. The Population Reference Number (PRN) generated by the NSO shall serve as the common reference number to establish a linkage among concerned agencies. THE ESTABLISHMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT.O.O. Government Service Insurance System. National Computer Center. SEC. Linkage Among Agencies. 1997. AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE POWERS OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES. SEC. 1997. 4.O. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE IMPLEMENTATION OF A. THE ISSUANCE OF A. Effectivity. 8. This Administrative Order shall take effect immediately. in coordination with the National Statistics Office. The National Computer Center (NCC) is hereby designated as secretariat to the IACC and as such shall provide administrative and technical support to the IACC. The funds necessary for the implementation of the system shall be sourced from the respective budgets of the concerned agencies. Administrator. then Executive Secretary Ruben Torres and the heads of the government agencies. who as members of the Inter-Agency Coordinating Committee. petitioner filed the instant petition against respondents. 308. 3. GSIS and SSS shall submit regular reports to the Office of the President. SEC. National Statistics Office Managing Director. The IACC Secretariat shall coordinate with the different Social Security and Services Agencies to establish the standards in the use of Biometrics Technology and in computer application designs of their respective systems. the GSIS and SSS as lead agencies and other concerned agencies shall undertake a massive tri-media information dissemination campaign to educate and raise public awareness on the importance and use of the PRN and the Social Security Identification Reference. Conduct of Information Dissemination Campaign. 1997 and January 23. NO. are charged with the implementation of A. 308 IS AN UNCONSTITUTIONAL USURPATION OF THE EXCLUSIVE RIGHT OF CONGRESS TO APPROPRIATE PUBLIC FUNDS FOR EXPENDITURE. Nineteen Hundred and Ninety-Six. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS. 1997. No. (SGD. SEC. The Office of the Press Secretary. SEC. Administrator. this 12th day of December in the year of Our Lord. NO.29 Secretary. on the status of implementation of this undertaking. SEC. B.O. THEREFORE. . 6. 7. DONE in the City of Manila. through the IACC. Funding. Social Security System.
O. NO. petitioner can also impugn the legality of the misalignment of public funds and the misuse of GSIS funds to implement A. Petitioner Ople assails A. More specifically. As a Senator. No. I As is usual in constitutional litigation. C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED FROM THE BUDGETS OF THE CONCERNED AGENCIES.xxvi As taxpayer and member of the Government Service Insurance System (GSIS). petitioner is possessed of the requisite standing to bring suit raising the issue that the issuance of A. No. No. 308 as invalid per se and as infirmed on its face.xxvi We now resolve. He alleges that A. 308 and we need not wait for the formality of the rules to pass judgment on its constitutionality.O. No.O.O.O. B. A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD WARRANT A JUDICIAL REVIEW.O.O. beyond the power of the President to issue. As early as January 19. No.O. 308. 308 have yet to be promulgated. THE IMPLEMENTATION OF A. 308 have yet to be promulgated. respondents aver that petitioner has no legal interest to uphold and that the implementing rules of A. respondent Social Security System (SSS) caused the publication of a notice to bid for the manufacture of the National Identification (ID) card. NO. Petitioner Ople is a distinguished member of our Senate. Moreover. 308 is a usurpation of legislative power. II We now come to the core issues.O. 308 without waiting for the rules. In this light. These submissions do not deserve our sympathetic ear. respondents raise the threshold issues relating to the standing to sue of the petitioner and the justiciability of the case at bar. NO. No. No. D.O. No. 308 INSIDIOUSLY LAYS THE GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF RIGHTS ENSHRINED IN THE CONSTITUTION. His action is not premature for the rules yet to be promulgated cannot cure its fatal defects. the dissenters insistence that we tighten the rule on standing is not a commendable stance as its result would be to throttle an important constitutional principle and a fundamental right. the respondents themselves have started the implementation of A.xxvi Respondent Executive Secretary Torres has publicly announced that representatives from the GSIS and the SSS have completed the guidelines for the national identification system.O.xxvi The ripeness for adjudication of the petition at bar is not affected by the fact that the implementing rules of A. No. 308 establishes a system of identification that is all- .xxvi All signals from the respondents show their unswerving will to implement A. 308 is not a mere administrative order but a law and hence.O. Petitioner claims that A. A. 1997. 308  WAS ISSUED WITHIN THE EXECUTIVE AND ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT ENCROACHING ON THE LEGISLATIVE POWERS OF CONGRESS."xxvi Respondents counter-argue: A.30 C. 308  PROTECTS AN INDIVIDUAL'S INTEREST IN PRIVACY.
affects the life and liberty of every Filipino citizen and foreign resident. we hold that A. under the Constitution. rules and regulations. the President is the Chief Executive. He represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department.xxvi The legislative body possesses plenary power for all purposes of civil government. No. Hence. 3. It must be in harmony with the law and should be for the sole purpose of implementing the law and carrying out the legislative policy. An administrative order is: "Sec.xxvi He has control over the executive department. the exercise by one branch of government of power belonging to another will be given a stricter scrutiny by this Court. bureau and office. Book II with the . Legislative power is "the authority. This means that he has the authority to assume directly the functions of the executive department. The blurring of the demarcation line between the power of the Legislature to make laws and the power of the Executive to execute laws will disturb their delicate balance of power and cannot be allowed.O. unless the Constitution has lodged it elsewhere. is necessarily possessed by Congress. The line that delineates Legislative and Executive power is not indistinct.xxvi The grant of legislative power to Congress is broad.xxvi It is generally defined as the power to enforce and administer the laws. or interfere with the discretion of its officials."xxvi The Constitution. deemed to be legislative by usage and tradition. sovereign and unlimited capacity. The Code is a general law and "incorporates in a unified document the major structural.xxvi We reject the argument that A. to make laws. violates their right to privacy.xxvi Administrative power is concerned with the work of applying policies and enforcing orders as determined by proper governmental organs. 308 implements the legislative policy of the Administrative Code of 1987.xxvi While Congress is vested with the power to enact laws. he is granted administrative power over bureaus and offices under his control to enable him to discharge his duties effectively. has vested this power in the Congress of the Philippines. he can issue administrative orders.xxvi It enables the President to fix a uniform standard of administrative efficiency and check the official conduct of his agents.xxvi The executive power is vested in the President. legislative power embraces all subjects and extends to matters of general concern or common interest. the President also has the duty of supervising the enforcement of laws for the maintenance of general peace and public order.O."xxvi An administrative order is an ordinance issued by the President which relates to specific aspects in the administrative operation of government. Thus.xxvi As head of the Executive Department.xxvi To this end. general and comprehensive. Petitioner's sedulous concern for the Executive not to trespass on the lawmaking domain of Congress is understandable. 308 involves a subject that is not appropriate to be covered by an administrative order.xxvi It is the power of carrying the laws into practical operation and enforcing their due observance.Acts of the President which relate to particular aspects of governmental operation in pursuance of his duties as administrative head shall be promulgated in administrative orders. the President executes the laws.31 encompassing in scope. Prescinding from these precepts. and more particularly. No.-. bureaus and offices.xxvi Corollary to the power of control.xxvi Any power."xxvi The Code is divided into seven (7) Books: Book I deals with Sovereignty and General Administration. functional and procedural principles of governance"xxvi and "embodies changes in administrative structures and procedures designed to serve the people. either expressly or impliedly.xxvi In fine. as the will of the people in their original. and to alter and repeal them. Administrative Orders. except as limited by the Constitution.
As well stated by Fisher: "x x x Many regulations however. Book V on the Constitutional Commissions. This is contrary to the established approach defining the traditional limits of administrative legislation. the extent of privacy interest against dossier-gathering by government. No. the organization and administration of departments. legislative and judicial branches of government. it ought to be evident that it deals with a subject that should be covered by law. 308 involves the all-important freedom of thought. Such a System requires a delicate adjustment of various contending state policies-. and Book VII on Administrative Procedure. a citizen will have difficulty exercising his rights and enjoying his privileges. a citizen cannot transact business with government agencies delivering basic services to the people without the contemplated identification card. No citizen will refuse to get this identification card for no one can avoid dealing with government. Fourth. Indeed.O. As said administrative order redefines the parameters of some basic rights of our citizenry vis-a-vis the State as well as the line that separates the administrative power of the President to make rules and the legislative power of Congress. the contention that A. No.O. Justice Mendoza states that the A. Fifth and Ninth Amendments. with due respect. No. Connecticut. These Books contain provisions on the organization. affords no protection. powers and general administration of the executive. Book VI on National Government Budgeting.the primacy of national security.O. arguendo. and creates no office. the dissent of Mr.O. the choice of policies. the authority to prescribe rules and regulations is not an independent source of power to make laws. personnel and recruitment.32 Distribution of Powers of the three branches of Government. that A. the rules on the national government budget. as well as guidelines for the exercise by administrative agencies of quasi-legislative and quasi-judicial powers. No. Although administrative regulations are entitled to respect. 308 is not a law because it confers no right. Regulations are not supposed to be a substitute for the general policy-making that Congress enacts in the form of a public law.O.e. The essence of privacy is the "right to be let alone. It is here that administrative legislation must be restricted in its scope and application. still it cannot pass constitutional muster as an administrative legislation because facially it violates the right to privacy. imposes no duty. No. No. etc. Third. bear directly on the public. i. the dissenting opinions unduly expand the limits of administrative legislation and consequently erodes the plenary power of Congress to make laws. 308 gives no right and imposes no duty cannot stand. It is thus clear as daylight that without the ID. Again. It held that there is a right of privacy which can be found within the penumbras of the First. Book IV on the Executive Branch. 308 merely implements the Administrative Code of 1987. bureaus and offices under the executive branch.xxvi It cannot be simplistically argued that A.xxvi the United States Supreme Court gave more substance to the right of privacy when it ruled that the right has a constitutional foundation. Book III on the Office of the President. It establishes for the first time a National Computerized Identification Reference System.xxvi viz: ."xxvi In the 1965 case of Griswold v. and the effects of the functions performed by administrative officials on private individuals or parties outside government. Nor is it correct to argue as the dissenters do that A."xxvi III Assuming. Given this reality. 308. internal organization. the organization and functions of the Constitutional Commissions and other constitutional bodies. Under A. supervision and discipline. 308 need not be the subject of a law.O. The Code covers both the internal administration of government.
" It has wider implications though.xxvi we adopted the Griswold ruling that there is a constitutional right to privacy. in itself.protection.'" Indeed. All the forces of a technological age --industrialization.xxvi It is expressly recognized in Section 3(1) of the Bill of Rights: "Sec. So it is likewise in our jurisdiction. as we have seen. of certain rights. is the hallmark of the absolute state. it is fully deserving of constitutional protection. In contrast. The right of association contained in the penumbra of the First Amendment is one. of the dignity and integrity of the individual--has become increasingly important as modern society has developed. The language of Prof. and no search warrant or warrant of arrest shall issue except upon . Emerson is particularly apt: 'The concept of limited government has always included the idea that governmental powers stop short of certain intrusions into the personal life of the citizen. in all aspects of his life. Mutuc. which belongs to the individual. in other words. Sec. No person shall be deprived of life. or property without due process of law.'" In the 1968 case of Morfe v.' The Fifth Amendment in its Self-Incrimination Clause enables the citizen to create a zone of privacy which government may not force him to surrender to his detriment.33 "Specific guarantees in the Bill of Rights have penumbras formed by emanations from these guarantees that help give them life and substance x x x. firmly distinguishing it from the public sector. The right to privacy as such is accorded recognition independently of its identification with liberty. Speaking thru Mr. a system of limited government safeguards a private sector. shall not be construed to deny or disparage others retained by the people. nor shall any person be denied the equal protection of the laws. Enrique Fernando. Ultimate and pervasive control of the individual. papers. or when public safety or order requires otherwise as prescribed by law. and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable. Justice. rightfully it stressed "a relationship lying within the zone of privacy created by several fundamental constitutional guarantees. This is indeed one of the basic distinctions between absolute and limited government. viz:xxvi "Sec. In modern terms. The Fourth Amendment explicitly affirms the `right of the people to be secure in their persons.operate to narrow the area of privacy and facilitate intrusion into it. the capacity to maintain and support this enclave of private life marks the difference between a democratic and a totalitarian society. houses. 2. 1. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court. if we extend our judicial gaze we will find that the right of privacy is recognized and enshrined in several provisions of our Constitution. against unreasonable searches and seizures. Various guarantees create zones of privacy. later Chief Justice. houses. The Ninth Amendment provides: `The enumeration in the Constitution. papers. The constitutional right to privacy has come into its own. liberty. we held: The Griswold case invalidated a Connecticut statute which made the use of contraceptives a criminal offense on the ground of its amounting to an unconstitutional invasion of the right of privacy of married persons. and effects. which the state can control." Other facets of the right to privacy are protected in various provisions of the Bill of Rights. 3. and organization-. Protection of this private sector-. The Third Amendment in its prohibition against the quartering of soldiers `in any house' in time of peace without the consent of the owner is another facet of that privacy. urbanization. The right of the people to be secure in their persons.
The right of the people.O. 6.O." Zones of privacy are likewise recognized and protected in our laws.xxvi . a mathematical analysis of biological data. No. Sec. personality.xxvi The Rules of Court on privileged communication likewise recognize the privacy of certain information. hand geometry or facial features. public safety.xxvi The Revised Penal Code makes a crime the violation of secrets by an officer. we prescind from the premise that the right to privacy is a fundamental right guaranteed by the Constitution. the overbreadth of A.34 probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce.xxvi the revelation of trade and industrial secrets.O. as may be provided by law.xxvi Invasion of privacy is an offense in special laws like the Anti-Wiretapping Law. or public health. retinal scan.xxvi the Secrecy of Bank Deposit Actxxvi and the Intellectual Property Code.O.O. signature and keystroke."xxvi The term "biometrics" has now evolved into a broad category of technologies which provide precise confirmation of an individual's identity through the use of the individual's own physiological and behavioral characteristics. fraudulent transactions and misrepresentations by persons seeking basic services.xxvi Unlike the dissenters.xxvi and trespass to dwelling. if not totally eradicate." Biometry or biometrics is "the science of the application of statistical methods to biological facts. it is the burden of government to show that A. The Civil Code provides that "[e]very person shall respect the dignity. No. 17. associations.xxvi A physiological characteristic is a relatively stable physical characteristic such as a fingerprint. 308. privacy and peace of mind of his neighbors and other persons" and punishes as actionable torts several acts by a person of meddling and prying into the privacy of another. It is debatable whether these interests are compelling enough to warrant the issuance of A.xxvi Most biometric identification systems use a card or personal identification number (PIN) for initial identification. hence. The biometric measurement is used to verify that the individual holding the card or entering the PIN is the legitimate owner of the card or PIN. Sec. But what is not arguable is the broadness. No. or societies for purposes not contrary to law shall not be abridged. including those employed in the public and private sectors. Neither shall the right to travel be impaired except in the interest of national security. No person shall be compelled to be a witness against himself. 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. and particularly describing the place to be searched and the persons or things to be seized. to form unions. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. the vagueness.xxvi It also holds a public officer or employee or any private individual liable for damages for any violation of the rights and liberties of another person. A. A behavioral characteristic is influenced by the individual's personality and includes voice print.xxvi and recognizes the privacy of letters and other private communications. 308 which if implemented will put our people's right to privacy in clear and present danger. 8. Sec. No. The heart of A. No. 308 lies in its Section 4 which provides for a Population Reference Number (PRN) as a "common reference number to establish a linkage among concerned agencies" through the use of "Biometrics Technology" and "computer application designs. 308 is justified by some compelling state interest and that it is narrowly drawn.
O. When the access code of the control programs of the particular computer system is broken. Considering the banquet of options available to the implementors of A. The individual's file may include his transactions for loan availments." This device chemically analyzes the unique combination of substances excreted from the skin of people.O. No. The more frequent the use of the PRN.xxvi Another method is the retinal scan. hospitalization. A. reimbursements for medication. there are no controls to guard against leakage of information. technology has progressed at a galloping rate. 308. the better the chance of building a huge and formidable information base through the electronic linkage of the files.O. that the computer data file will be limited to the name. the indefiniteness of A. ."xxvi This is an admission that the PRN will not be used solely for identification but for the generation of other data with remote relation to the avowed purposes of A. It is noteworthy that A.xxvi Even that hospitable assumption will not save A.whether it be in the computer or in the documentary file of the agency.xxvi Well to note. His transactions with the government agency will necessarily be recorded-.xxvi We can even grant. skin. No. address and other basic personal information about the individual. an intruder. the Solicitor General claims that the adoption of the Identification Reference System will contribute to the "generation of population data for development planning. a unique heat distribution pattern is seen.xxvi The data may be gathered for gainful and useful government purposes."xxvi In the last few decades. These factors are essential to safeguard the privacy and guaranty the integrity of the information. under what circumstances and for what purpose.35 A most common form of biological encoding is finger-scanning where technology scans a fingertip and turns the unique pattern therein into an individual number which is called a biocrypt. Clearly. In fact.O. an individual must present his PRN everytime he deals with a government agency to avail of basic services and security. the computer linkage gives other government agencies access to the information. Pursuant to said administrative order. The biocrypt is stored in computer data banksxxvi and becomes a means of identifying an individual using a service. The different densities of bone. etc. but the existence of this vast reservoir of personal information constitutes a covert invitation to misuse. No.O. statement of assets and liabilities. 308. a temptation that may be too great for some of our authorities to resist. income tax returns. 308 does not state what specific biological characteristics and what particular biometrics technology shall be used to identify people who will seek its coverage. No. the fear that it threatens the right to privacy of our people is not groundless.xxvi The latest on the list of biometric achievements is the thermogram. 308 should also raise our antennas for a further look will show that it does not state whether encoding of data is limited to biological information alone for identification purposes. 308 can give the government the roving authority to store and retrieve information for a purpose other than the identification of the individual through his PRN. The potential for misuse of the data to be gathered under A. fat and blood vessels all contribute to the individual's personal "heat signature. Some science fictions are now science facts.O. No. It does not provide who shall control and access the data. arguendo.O. Today. Yet. biometrics is no longer limited to the use of fingerprint to identify an individual. Retinal scan technology employs optical technology to map the capillary pattern of the retina of the eye.xxvi Another biometric method is known as the "artificial nose. This technology requires one's fingertip to be scanned every time service or access is provided. No. This technology produces a unique print similar to a finger print. 308 cannot be underplayed as the dissenters do. 308 from constitutional infirmity for again said order does not tell us in clear and categorical terms how these information gathered shall be handled. It is a new science that uses various technologies in encoding any and all biological characteristics of an individual for identification. No. Scientists have found that by taking pictures of a face using infra-red cameras.
xxvi The factual circumstances of the case determines the reasonableness of the expectation.xxvi As technology advances. much less verify the correctness of the data encoded.xxvi It is plain and we hold that A. No. the level of reasonably expected privacy decreases. physical surroundings and practices of a particular activity.O. 308 does not assure the individual of a reasonable expectation of privacy.xxvi The computer is capable of producing a comprehensive dossier on individuals out of information given at different times and for varied purposes.36 without fear of sanction or penalty. A. other factors. manipulate the data stored within the system. cannot be inferred from its provisions. The end of privacy begins. The Court will not be true to its role as the ultimate guardian of the people's liberty if it would not immediately smother the sparks that endanger their rights but would rather wait for the fire that could consume them. On its face. it may pave the way for "fishing expeditions" by government authorities and evade the right against unreasonable searches and seizures. 308 may interfere with the individual's liberty of abode and travel by enabling authorities to track down his movement. No.O. Though A. such as customs. Commonwealth Act No.O. biometrics and computer technology are accentuated when we consider that the individual lacks control over what can be read or placed on his ID.xxvi The possibilities of abuse and misuse of the PRN.xxvi They threaten the very abuses that the Bill of Rights seeks to prevent. When information of a privileged character finds its way into the computer.xxvi The measure of protection granted by the reasonable expectation diminishes as relevant technology becomes more widely accepted. We reject the argument of the Solicitor General that an individual has a reasonable expectation of privacy with regard to the National ID and the use of biometrics technology as it stands on quicksand.xxvi The ability of a sophisticated data center to generate a comprehensive cradle-to-grave dossier on an individual and transmit it over a national network is one of the most graphic threats of the computer revolution. we cannot countenance such a laidback posture.xxvi However. may serve to create or diminish this expectation. 308 is undoubtedly not narrowly drawn. Again.xxvi The lack of proper safeguards in this regard of A. can make use of the data for whatever purpose. No. it can be extracted together with other data on the subject. 308 is so widely drawn that a minimum standard for a reasonable expectation of privacy. No. The reasonableness of a person's expectation of privacy depends on a two-part test: (1) whether by his conduct. 591 penalizes the disclosure by any person of data .xxvi The use of biometrics and computer technology in A. 308 falls short of assuring that personal information which will be gathered about our people will only be processed for unequivocally specified purposes.xxvi The security of the computer data file depends not only on the physical inaccessibility of the file but also on the advances in hardware and software computer technology. the individual has exhibited an expectation of privacy.xxvi It can continue adding to the stored data and keeping the information up to date.xxvi Once extracted.O. No. The rules and regulations to be drawn by the IACC cannot remedy this fatal defect. and (2) whether this expectation is one that society recognizes as reasonable. No. the dissenting opinions would dismiss its danger to the right to privacy as speculative and hypothetical. or worse. Rules and regulations merely implement the policy of the law or order. 308 gives the IACC virtually unfettered discretion to determine the metes and bounds of the ID System. Retrieval of stored data is simple. regardless of technology used. Nor do our present laws provide adequate safeguards for a reasonable expectation of privacy. A.O.O. the information is putty in the hands of any person. it may also enable unscrupulous persons to access confidential information and circumvent the right against self-incrimination.
not an administrative order. the least we can do is to lean towards the stance that will not put in danger the rights protected by the Constitution. In case of doubt. apply to records and data with the NSO and the SSS.A. He concludes that these purposes justify the incursions into the right to privacy for the means are rationally related to the end. This approach is demanded by the 1987 Constitution whose entire matrix is designed to protect human rights and to prevent authoritarianism. We declared that the law. 308 is another reason why its enactment should be given to Congress.O. No. the Anti-Graft and Corrupt Practices Act. in compelling a public officer to make an annual report disclosing his assets and liabilities. 308's abridgment of the right of privacy by using the rational relationship test. rule or regulation a stricter scrutiny. They must satisfactorily show the presence of compelling state interests and that the law. The case of Whalen v. the individual interest in avoiding disclosure of personal matters. It is not clear whether they may be applied to data with the other government agencies forming part of the National ID System. it cannot pass constitutional scrutiny for it is not narrowly drawn.e. The U. even when the government does not act irrationally.xxvi The plaintiffs alleged that the statute invaded a constitutionally protected zone of privacy. and (3) generate population data for development planning. the Solicitor General urges us to validate A. rule. it may stigmatize them as drug addicts.A. if not defeated. 3019.e.A. The need to clarify the penal aspect of A. the statute did not pose a grievous threat to establish a constitutional violation. and that once disclosed. i. And we now hold that when the integrity of a fundamental right is at stake. did not infringe on the individual's right to privacy. administrative order.xxvi we upheld the constitutionality of R. No. The law is clear on what practices were prohibited and penalized. Next.37 furnished by the individual to the NSO with imprisonment and fine. who were patients and doctors. however. 308 may have been impelled by a worthy purpose. and it was narrowly drawn to avoid abuses.xxvi The same circumstances do not obtain in the case at bar. In Whalen. The plaintiffs.xxvi Republic Act No. 308 are: (1) to streamline and speed up the implementation of basic government services. No. 1161 prohibits public disclosure of SSS employment records and reports. 3019 is a statute. In Morfe v. Secondly. this court will give the challenged law. The law was enacted to promote morality in public administration by curtailing and minimizing the opportunities for official corruption and maintaining a standard of honesty in the public service. 3019 itself is sufficiently detailed. No. The New York State Controlled Substances Act of 1972 required physicians to identify patients obtaining prescription drugs enumerated in the statute.O. For one. the United States Supreme Court was presented with the question of whether the State of New York could keep a centralized computer record of the names and addresses of all persons who obtained certain drugs pursuant to a doctor's prescription.xxvi He stressed that the purposes of A.xxvi These laws.O. In the case at bar. or regulation is narrowly drawn to preclude abuses. his sources of income and expenses. so that the names and addresses of the patients can be recorded in a centralized computer file of the State Department of Health.. drugs with a recognized medical use but with a potential for abuse. R. Mutuc. (2) eradicate fraud by avoiding duplication of services. It will not do for the authorities to invoke the presumption of regularity in the performance of official duties.S. Supreme Court held that while an individual's interest in avoiding disclosure of personal matters is an aspect of the right to privacy. claimed that some people might decline necessary medication because of their fear that the computerized data may be readily available and open to public disclosure. A. Nor is it enough for the authorities to prove that their act is not irrational for a basic right can be diminished. The Court found .xxvi We are not impressed by the argument. R.O. Roexxvi cited by the Solicitor General is also off-line. as a valid police power measure. but. and the interest in independence in making certain kinds of important decisions. i.
protection. the statute was narrowly drawn and contained numerous safeguards against indiscriminate disclosure. In view of these safeguards. The threats emanate from various sources-. Moreover. No. Protection of this private sector-. The reason for this stance was laid down in Morfe v. Ultimate and pervasive control of the individual. retrieve and transmit data to improve our bureaucracy. storage and retrieval of the information.38 that the statute was necessary to aid in the enforcement of laws designed to minimize the misuse of dangerous drugs. Even while we strike down A. This is indeed one of the basic distinctions between absolute and limited government. 308.O. It also prohibited public disclosure of the data by imposing penalties for its violation.xxvi Used wisely. employers. process. In contrast. and organization-. may surf and search all kinds and classes of information from libraries and databases connected to the net. we also underscore that the right to privacy does not bar all incursions into individual privacy. urbanization.has become increasingly important as modern society has developed. of the dignity and integrity of the individual-.industrialization. which belongs to the individual. improvement of telecommunications and streamlining of financial activities. As we discussed above. we spell out in neon that the Court is not per se against the use of computers to accumulate. to wit: "The concept of limited government has always included the idea that governmental powers stop short of certain intrusions into the personal life of the citizen. journalists. in all aspects of his life. We reiterate that any law or order that invades individual privacy will be subjected by this Court to strict scrutiny. such as better law enforcement. in other words. It enumerated who were authorized to access the data. All the forces of a technological age-. store. No. The statute laid down the procedure and requirements for the gathering. a system of limited government safeguards a private sector. Many information systems in different countries make use of the computer to facilitate important social objectives. data stored in the computer could help good administration by making accurate and comprehensive information for those who have to frame policy and make key decisions.xxvi Intrusions into the right must be accompanied by proper safeguards and well-defined standards to prevent unconstitutional invasions. more efficient management of credit and insurance programs. In modern terms. is the hallmark of the absolute state. It developed the internet. The patient-identification requirement was a product of an orderly and rational legislative decision made upon recommendation by a specially appointed commission which held extensive hearings on the matter.governments.xxvi introduced the concept of cyberspacexxvi and the information superhighway where the individual."xxvi IV The right to privacy is one of the most threatened rights of man living in a mass society. faster delivery of public services. 308 pressures the people to . social scientists. the threat comes from the executive branch of government which by issuing A. Mutuc.xxvi The benefits of the computer has revolutionized information technology.O. A. etc. It merely requires that the law be narrowly focusedxxvi and a compelling interest justify such intrusions.O.xxvi In the case at bar. In no uncertain terms.operate to narrow the area of privacy and facilitate intrusion into it. Computers work wonders to achieve the efficiency which both government and private industry seek. the capacity to maintain and support this enclave of private life marks the difference between a democratic and a totalitarian society. 308 lacks these vital safeguards. No. The right is not intended to stifle scientific and technological advancements that enhance public service and the common good. the infringement of the patients' right to privacy was justified by a valid exercise of police power. firmly distinguishing it from the public sector. which the state can control. armed only with his personal computer.
Jr. 1998 [Puno]) What is an Administrative Order? Held: An administrative order is an ordinance issued by the President which relates to specific aspects in the administrative operation of government. he can issue administrative orders.R. the dissents still say we should not be too quick in labelling the right to privacy as a fundamental right."xxvi Oblivious to this counsel.39 surrender their privacy by giving information about themselves on the pretext that it will facilitate delivery of basic services. "the disturbing result could be that everyone will live burdened by an unerasable record of his past and his limitations. G. It is timely to take note of the well-worded warning of Kalvin. No. the society will have lost its benign capacity to forget. No. IN VIEW WHEREOF. the threat is that because of its recordkeeping. (Ople v. Torres. In a way.R. It must be in harmony with the law and should be for the sole purpose of implementing the law and carrying out the legislative policy. 308 gives the government the power to compile a devastating dossier against unsuspecting citizens.O. 127685. rules and regulations. 1998 [Puno]) . Torres. G. only the indifferent will fail to perceive the danger that A. To this end. No. (Ople v. July 23. SO ORDERED. It enables the President to fix a uniform standard of administrative efficiency and check the official conduct of his agents. the petition is granted and Administrative Order No. We close with the statement that the right to privacy was not engraved in our Constitution for flattery. 308 entitled "Adoption of a National Computerized Identification Reference System" declared null and void for being unconstitutional. Given the record-keeping power of the computer. July 23. 127685.. What is Administrative Power? Held: Administrative power is concerned with the work of applying policies and enforcing orders as determined by proper governmental organs.
2006. and for Other Purposes (RIRR). JADE F. the DOH is deemed impleaded as a co-respondent since respondents issued the questioned RIRR in their capacity as officials of said executive agency. of course. on June 28. GAKO. 2006.1 Executive Order No. GALON. ETHELYN P. and Assistant Secretaries of the Department of Health (DOH). Named as respondents are the Health Secretary. NEMESIO T. petitioner. the WHA adopted several Resolutions to the effect that breastfeeding should be supported. J. MARIO C. the Philippines ratified the International Convention on the Rights of the Child. a code adopted by the World Health Assembly (WHA) in 1981. 2006-0012 entitled. DECISION AUSTRIA-MARTINEZ. For purposes of herein petition. DR.) No. From 1982 to 2006." Relevant International Agreements. But how should this end be attained? Before the Court is a petition for certiorari under Rule 65 of the Rules of Court. the DOH issued herein assailed RIRR which was to take effect on July 7. On May 15. DAVID J. specially parents and children. it should be ensured that nutrition and health claims are not permitted for breastmilk substitutes. NIETO. AND DR. representing its members that are manufacturers of breastmilk substitutes. DR. for each and every Filipino child to enjoy the unequaled benefits of breastmilk. ATTY. 1986 by virtue of the legislative powers granted to the president under the Freedom Constitution. hence. filed the present Petition for Certiorari and Prohibition with Prayer for the Issuance of a Temporary Restraining Order (TRO) or Writ of Preliminary Injunction. 173034 October 9. No. . vs. The ideal is. Undersecretaries. HEALTH SECRETARY FRANCISCO T. Penalizing Violations Thereof. Revised Implementing Rules and Regulations of Executive Order No. Article 24 of said instrument provides that State Parties should take appropriate measures to diminish infant and child mortality.40 Republic of the Philippines SUPREME COURT Manila EN BANC G. petitioner. Otherwise Known as The "Milk Code. 2006.R. ALEXANDER A.O. MARGARITA M. promoted and protected. respondents. 51. In 1990. HEALTH UNDER SECRETARIES DR. VILLAVERDE.: The Court and all parties involved are in agreement that the best nourishment for an infant is mother's milk. 2007 PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE PHILIPPINES. are informed of the advantages of breastfeeding. PADILLA. seeking to nullify Administrative Order (A. 51 (Milk Code) was issued by President Corazon Aquino on October 28. and ASSISTANT SECRETARIES DR. LOZADA. & DR. There is nothing greater than for a mother to nurture her beloved child straight from her bosom. DUQUE III. Petitioner posits that the RIRR is not valid as it contains provisions that are not constitutional and go beyond the law it is supposed to implement. However. One of the preambular clauses of the Milk Code states that the law seeks to give effect to Article 112 of the International Code of Marketing of Breastmilk Substitutes (ICMBS). and ensure that all segments of society. DEL MUNDO.
(2) the WHO and Unicef "2002 Global Strategy on Infant and Young Child Feeding. The petition is partly imbued with merit.3 Whether Sections 4. We note that.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards. 2. 22. the Court adopts the view enunciated in Executive Secretary v. 51 (Milk Code).3 On August 15. under its Articles of Incorporation. and 52 of the RIRR violate the due process clause and are in restraint of trade. the Court set the case for oral arguments on June 19." and (3) various World Health Assembly (WHA) Resolutions. 2. If in the affirmative.4 to wit: The modern view is that an association has standing to complain of injuries to its members. 2007. to wit: The Court hereby sets the following issues: 1. An organization has standing to assert the concerns of its constituents. This view fuses the legal identity of an association with that of its members. whether the RIRR is in accord with the international agreements.41 The main issue raised in the petition is whether respondents officers of the DOH acted without or in excess of jurisdiction. 2. On the issue of petitioner's standing With regard to the issue of whether petitioner may prosecute this case as the real partyin-interest.2 Whether pertinent international agreements1 entered into by the Philippines are part of the law of the land and may be implemented by the DOH through the RIRR. An association has standing to file suit for its workers despite its lack of direct interest if its members are affected by the action. 2006-0012 or the Revised Implementing Rules and Regulations (RIRR) issued by the Department of Health (DOH) is not constitutional. Court of Appeals. _____________ 1 (1) United Nations Convention on the Rights of the Child. 47. 2006. The Court issued an Advisory (Guidance for Oral Arguments) dated June 5. 5(w). 2007. Whether or not petitioner is a real party-in-interest. or with grave abuse of discretion amounting to lack or excess of jurisdiction. and in violation of the provisions of the Constitution in promulgating the RIRR. 32. 2. After the Comment and Reply had been filed.1 Whether the RIRR is in accord with the provisions of Executive Order No. the respondent was organized x x x to act as the representative of any individual. the Court issued a Resolution granting a TRO enjoining respondents from implementing the questioned RIRR. The parties filed their respective memoranda. Whether Administrative Order No. company. and 2. entity or association .
only provide in general terms that steps must be taken by State Parties to diminish infant and child mortality and inform society of the advantages of breastfeeding.42 on matters related to the manpower recruitment industry. Under the 1987 Constitution. Social and Cultural Rights."8 Thus. The international instruments that do have specific provisions regarding breastmilk substitutes are the ICMBS and various WHA Resolutions. no matter how few or numerous they are. whose legal identity is deemed fused with its members. thus.7 Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in Executive Secretary. ensure the health and well-being of families. Said instruments do not contain specific provisions regarding the use or marketing of breastmilk substitutes. Yuipco. that the association is formed "to represent directly or through approved representatives the pharmaceutical and health care industry before the Philippine Government and any of its agencies. The respondent is. (2) The International Covenant on Economic.11 The transformation method requires that an international law be transformed into a domestic law through a constitutional mechanism such as local legislation. petitioner. 5 (Emphasis supplied) which was reasserted in Purok Bagong Silang Association. namely: (1) The United Nations Convention on the Rights of the Child. The defense of the DOH is that the RIRR implements not only the Milk Code but also various international instruments10 regarding infant and young child nutrition. and to perform other acts and activities necessary to accomplish the purposes embodied therein. The incorporation method applies . The Court notes that the following international instruments invoked by respondents. It is respondents' position that said international instruments are deemed part of the law of the land and therefore the DOH may implement them through the RIRR. the appropriate party to assert the rights of its members. petitioner definitely has an interest in fulfilling its avowed purpose of representing members who are part of the pharmaceutical and health care industry. because it and its members are in every practical sense identical.6 where the Court ruled that an association has the legal personality to represent its members because the results of the case will affect their vital interests. and (3) the Convention on the Elimination of All Forms of Discrimination Against Women. Hence. as an organization. should be considered as a real party-in-interest which stands to be benefited or injured by any judgment in the present action. the Court will determine if pertinent international instruments adverted to by respondents are part of the law of the land. Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code. would be remiss in its duties if it fails to act on governmental action that would affect any of its industry members. On the constitutionality of the provisions of the RIRR First. which is mandated by its Amended Articles of Incorporation to represent the entire industry. Inc. v. and ensure that women are provided with services and nutrition in connection with pregnancy and lactation. thereby amending and expanding the coverage of said law. Petitioner. Petitioner is duly authorized9 to take the appropriate course of action to bring to the attention of government agencies and the courts any grievance suffered by its members which are directly affected by the RIRR. x x x The respondent [association] is but the medium through which its individual members seek to make more effective the expression of their voices and the redress of their grievances. international law can become part of the sphere of domestic law either by transformation or incorporation. the medical professions and the general public.
renunciation of war as an instrument of national policy. The Philippines renounces war as an instrument of national policy. 17 i.J. promotion.14 In Mijares v.e.19 and pacta sunt servanda. to wit: SECTION 2. (Emphasis supplied) embodies the incorporation method. Implicit in the latter element is a belief that the practice in question is rendered obligatory by the existence of a rule of law requiring it. The Milk Code is almost a verbatim reproduction of the ICMBS.12 Treaties become part of the law of the land through transformation pursuant to Article VII. However. widespread. Article II of the 1987 Constitution. Instead. Section 2. justice. the Milk Code. but it is well to emphasize at this point that the Code did not adopt the provision in the ICMBS absolutely prohibiting advertising or other forms of promotion to the general public of products within the scope of the ICMBS. or other marketing materials may be allowed if such materials are duly authorized and approved by the Inter-Agency Committee (IAC). Consequently. international law is deemed to have the force of domestic law." (Judge Tanaka in his dissenting opinion in the 1966 South West Africa Case. adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace. treaties or conventional international law must go through a process prescribed by the Constitution for it to be transformed into municipal law that can be applied to domestic conflicts.15 the Court held thus: [G]enerally accepted principles of international law. Ranada.13 The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least two-thirds of all members of the Senate as required under Section 21.16 (Emphasis supplied) "Generally accepted principles of international law" refers to norms of general or customary international law which are binding on all states.. it is the Milk Code that has the force and effect of law in this jurisdiction and not the ICMBS per se. cooperation and amity with all nations. the Milk Code expressly provides that advertising. and a psychological element known as the opinion juris sive necessitates (opinion as to law or necessity). 296). Section 21 of the Constitution which provides that "[n]o treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the members of the Senate. the ICMBS which was adopted by the WHA in 1981 had been transformed into domestic law through local legislation. On the other hand. freedom. 18 a person's right to life. the principle of sovereign immunity. Article VII of the 1987 Constitution. by mere constitutional declaration.43 when. equality.20 among others." Thus. The concept of "generally accepted principles of law" has also been depicted in this wise: Some legal scholars and judges look upon certain "general principles of law" as a primary source of international law because they have the "character of jus rationale" and are "valid through all kinds of human societies. The classical formulation in international law sees those customary rules accepted as binding result from the combination [of] two elements: the established. 1966 I. O'Connell holds that certain priniciples are part of international law because they are "basic to legal . liberty and due process. and consistent practice on the part of States.C. by virtue of the incorporation clause of the Constitution. form part of the laws of the land even if they do not derive from treaty obligations.
why they behave the way they do. More important is the consistency and the generality of the practice. Have they attained the status of customary law and should they then be deemed incorporated as part of the law of the land? The World Health Organization (WHO) is one of the international specialized agencies allied with the United Nations (UN) by virtue of Article 57. Under the 1946 WHO Constitution. consistency.24 in relation to Article 6325 of the UN Charter." (Restatement) This statement contains the two basic elements of custom: the material factor. The initial factor for determining the existence of custom is the actual behavior of states. is quite different.23 WHA Resolutions have not been embodied in any local legislation. Without it. pharmaceutical and similar products moving in international commerce."28 The legal effect of its regulations. Regulations. how states behave. If there should be doubt or disagreement. The Health Assembly shall have authority to adopt conventions or agreements with respect to any matter within the competence of the Organization. Joaquin G. and generality of the practice of states. one must look to state practice and determine whether the municipal law principle provides a just and acceptable solution. . along with conventions and agreements. that is. x x x Once the existence of state practice has been established. The required duration can be either short or long.44 systems generally" and hence part of the jus gentium. which shall come into force for each Member when accepted by it in accordance with its constitutional processes. Bernas defines customary international law as follows: Custom or customary international law means "a general and consistent practice of states followed by them from a sense of legal obligation [opinio juris]. This includes several elements: duration. it is the WHA which determines the policies of the WHO.26 and has the power to adopt regulations concerning "advertising and labeling of biological. customary international law is deemed incorporated into our domestic system. that is. is what makes practice an international rule. duly adopted by the WHA bind member states thus: Article 19. practice is not law. or the belief that a certain form of behavior is obligatory. he believes. as opposed to recommendations. x x x 21 (Emphasis supplied) Fr."27 and to "make recommendations to members with respect to any matter within the competence of the Organization. Do states behave the way they do because they consider it obligatory to behave thus or do they do it only as a matter of courtesy? Opinio juris.22 (Underscoring and Emphasis supplied) Clearly. are established by a process of reasoning based on the common identity of all legal systems. it becomes necessary to determine why states behave the way they do. A two-thirds vote of the Health Assembly shall be required for the adoption of such conventions or agreements. and the psychological or subjective factor. These principles. x x x Duration therefore is not the most important element.
pharmaceutical and similar products moving in international commerce. endorsed it. Regulations adopted pursuant to Article 21 shall come into force for all Members after due notice has been given of their adoption by the Health Assembly except for such Members as may notify the Director-General of rejection or reservations within the period stated in the notice. (Emphasis supplied) On the other hand. (d) standards with respect to the safety.45 Article 20. each Member agrees to make an annual report to the Director-General in accordance with Chapter XIV. the International Code of Marketing of Breastmilk Substitutes annexed to the present resolution. 34. within eighteen months after the adoption by the Health Assembly of a convention or agreement. as they constitute the judgment on a health issue of the collective membership of the highest international body in the field of health. considered the fourth draft of the code. The Health Assembly shall have authority to make recommendations to Members with respect to any matter within the competence of the Organization. x x x (Emphasis supplied) The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the WHO Constitution. Article 22. In case of acceptance." (Emphasis supplied) The Introduction to the ICMBS also reads as follows: In January 1981. Sami Shubber. (c) standards with respect to diagnostic procedures for international use. stated that WHA recommendations are generally not binding. it will furnish a statement of the reasons for non-acceptance. purity and potency of biological. causes of death and public health practices. and unanimously recommended to the Thirty-fourth World Health Assembly the text of a resolution by which it would adopt the code in the form of a recommendation rather than a regulation. Each Member undertakes that it will. (Emphasis supplied) The absence of a provision in Article 23 of any mechanism by which the recommendation would come into force for member states is conspicuous. recommendations of the WHA do not come into force for members.22 states: "The Thirty-Fourth World Health Assembly x x x adopts. pharmaceutical and similar products moving in international commerce. (b) nomenclatures with respect to diseases. as WHA Resolution No. The Health Assembly shall have authority to adopt regulations concerning: (a) sanitary and quarantine requirements and other procedures designed to prevent the international spread of disease. the Executive Board of the World Health Organization at its sixty-seventh session. Article 23 of the WHO Constitution reads: Article 23. to wit: . The former Senior Legal Officer of WHO. and if it does not accept such convention or agreement within the time limit. in the sense of Article 23 of the Constitution. under Article 23. Article 21. (e) advertising and labeling of biological."29 Even the ICMBS itself was adopted as a mere recommendation. Each Member shall notify the Director-General of the action taken. in the same way that conventions or agreements under Article 19 and regulations under Article 21 come into force. but they "carry moral and political weight. take action relative to the acceptance of such convention or agreement.
"39 Other international organizations which have resorted to soft law include the International Labor Organization and the Food and Agriculture Organization (in the form of the Codex Alimentarius). Olalia. which this Court has enforced in various cases. the duty is powerful politically for two reasons. principles.46 Art. and practices that influence state behavior.30 specifically providing for exclusive breastfeeding from 0-6 months. 38 The World Intellectual Property Organization (WIPO). in order "to reflect and respond to the changing needs and demands of its constituents. This was most evident at the time of the Severe Acute Respiratory Syndrome (SARS) and Avian flu outbreaks.36 Mijares v. but. continued breastfeeding up to 24 months.40 WHO has resorted to soft law. and absolutely prohibiting advertisements and promotions of breastmilk substitutes.. however. in the wake of the SARS epidemic. it provides an excellent example of the power of "soft law" in international relations. unlike what has been done with the ICMBS whereby the legislature enacted most of the provisions into law which is the Milk Code. international cooperation on infectious disease controls is in a country's self-interest x x x if this warning is heeded. and enhancing. v. Apparently. 32 It is.31 "Soft law" does not fall into any of the categories of international law set forth in Article 38. specifically. Thus. agreements and regulations. the "soft law" in the SARS and IHR Resolution could inform the development of general and consistent state practice on infectious disease surveillance and outbreak response. Each member shall report annually on the action taken with respect to recommendations made to it by the Organization. Inc. This duty is neither binding nor enforceable. the SARS outbreak has taught the lesson that participating in. a specialized agency attached to the UN with the mandate to promote and protect intellectual property worldwide. Rañada37 and Shangri-la International Hotel Management." WHO has during its existence generated many soft law norms. These resolutions clearly define WHO member states' normative duty to cooperate fully with other countries and with WHO in connection with infectious disease surveillance and response to outbreaks. principles and practices that influence state behavior. International lawyers typically distinguish binding rules of international law-"hard law"-from non-binding norms.41 . The "soft law" SARS and IHR Resolutions represent significant steps in laying the political groundwork for improved international cooperation on infectious diseases. principles. perhaps crystallizing eventually into customary international law on infectious disease prevention and control. Although the IHR Resolution does not create new international law binding on WHO member states. have not been adopted as a domestic law. creating a "soft law regime" in international governance for public health. First. 62. Ltd.33 Certain declarations and resolutions of the UN General Assembly fall under this category. Director of Prisons. the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging member states to implement the ICMBS are merely recommendatory and legally non-binding. and practices that influence state behavior-"soft law.35 Mejoff v. and with respect to conventions. the subsequent WHA Resolutions. It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms. Government of Hongkong Special Administrative Region v. has resorted to soft law as a rapid means of norm creation. Developers Group of Companies. an expression of non-binding norms. Chapter III of the 1946 Statute of the International Court of Justice.34 The most notable is the UN Declaration of Human Rights.
the duty of a state to implement the IHR Resolution was still considered not binding or enforceable. Consequently. (4) universal salt iodization. Basically. although said resolutions had great political influence. Title IX of the Revised Administrative Code of 1987 provides that the DOH shall define the national health policy and implement a national health plan within the framework of the government's general policies and plans. although signed by most of the member states. dated May 23. In view of the enactment of the Milk Code which does not contain a total ban on the advertising and promotion of breastmilk substitutes. legislation is necessary to transform the provisions of the WHA Resolutions into domestic law. (3) micronutrient supplementation. for an international rule to be considered as customary law.O. The national policy of protection. neither have respondents proven that any compliance by member states with said WHA Resolutions was obligatory in nature. and issue orders and regulations concerning the implementation of established health policies. which is to start at age six months. and (6) feeding in exceptionally difficult circumstances. the Administrative Order declared the following policy guidelines: (1) ideal breastfeeding practices. It must be emphasized that even under such an international emergency. such as early initiation of breastfeeding.) No. 2003 and E. 280 on February 2. As previously discussed. but instead. the Court will determine whether the DOH may implement the provisions of the WHA Resolutions by virtue of its powers and functions under the Revised Administrative Code even in the absence of a domestic law. promotion and support of breastfeeding cannot automatically be equated with a total ban on advertising for breastmilk substitutes.O. Second. No. and ban importation of poultry and agricultural products. 2005-0014 is it declared that as part of such health policy. extended breastfeeding up to two years and beyond. No. the advertisement or promotion of breastmilk substitutes should be absolutely prohibited. Chapter 1. Indeed. the primacy of breastfeeding for children is emphasized as a national health policy. nowhere in A. (5) the exercise of other feeding options. 2005. 2004. (2) appropriate complementary feeding. The provisions of the WHA Resolutions cannot be considered as part of the law of the land that can be implemented by executive agencies without the need of a law enacted by the legislature. exclusive breastfeeding for the first six months. No. 2005-0014. it must be established that such rule is being followed by states because they consider it obligatory to comply with such rules (opinio juris). specifically creates an .O. delegating to various departments broad powers to close down schools/establishments.O. Respondents have not presented any evidence to prove that the WHA Resolutions. However.47 In the Philippines. 201 on April 26. conduct health surveillance and monitoring. the executive department implemented certain measures recommended by WHO to address the outbreaks of SARS and Avian flu by issuing Executive Order (E. were in fact enforced or practiced by at least a majority of the member states. Respondents submit that the national policy on infant and young child feeding is embodied in A. Section 3. It is crucial to ascertain whether the absolute prohibition on advertising and other forms of promotion of breastmilk substitutes provided in some WHA Resolutions has been adopted as part of the national health policy. Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary international law that may be deemed part of the law of the land.
The Milk Code limits its coverage to children 0-12 months old. the legislature. within the age bracket of 0-12 months. indicated and only when necessary. petitioner alleges the following: 1. objective information and appropriate b. consistent and objective information the proper use of breastmilk substitutes. products when these are medically supplements and related products. it follows that a total ban policy could be implemented only pursuant to a law amending the Milk Code passed by the constitutionally authorized branch of government. 3. the Court will now determine whether the provisions of the RIRR are in accordance with those of the Milk Code. there is a need to protect and principles from which the revised rules promote breastfeeding and to inform the and regulations are premised upon: public about the proper use of breastmilk substitutes and supplements and related a. In support of its claim that the RIRR is inconsistent with the Milk Code. Exclusive breastfeeding is for infants products through adequate. There is no substitute or replacement regulation of the marketing and for breastmilk. The Milk Code only regulates and does not impose unreasonable requirements for advertising and promotion. only the provisions of the Milk Code. and appropriate regulation of the marketing breastmilk supplements and related and distribution of the said substitutes. "Young Child" means a person from the age of more than twelve (12) months up to the age of three (3) years (36 months). Thus.48 IAC which will regulate said advertising and promotion. "Infant" means a person falling appropriate marketing and distribution. but the RIRR extended its coverage to "young children" or those from ages two years old and beyond: MILK CODE RIRR WHEREAS. but the RIRR provides "exclusive breastfeeding for infants from 0-6 months" and declares that "there is no substitute nor replacement for breastmilk": MILK CODE RIRR WHEREAS. RIRR imposes an absolute ban on such activities . in order to ensure that safe and Section 2. Third. Purpose – These Revised Rules adequate nutrition for infants is provided. supplements and related products. on the basis of adequate information and through SECTION 4(e). in order to ensure that safe Section 4. Section 5(ff). 2. Declaration of Principles – and adequate nutrition for infants is The following are the underlying provided. The Milk Code recognizes that infant formula may be a proper and possible substitute for breastmilk in certain instances. protection and supplements and related products through support of breastfeeding and by ensuring adequate. consistent and from 0 to six (6) months. can be validly implemented by the DOH through the subject RIRR. but not those of subsequent WHA Resolutions. distribution of the said substitutes. and Regulations are hereby promulgated there is a need to protect and promote to ensure the provision of safe and breastfeeding and to inform the public about adequate nutrition for infants and young the proper use of breastmilk substitutes and children by the promotion.
49 for breastmilk substitutes intended for infants from 0-24 months old or beyond. and forbids the use of health and nutritional claims. which provides for a "total effect" in the promotion of products within the scope of the Code. Section 13 of the RIRR. is vague: MILK CODE RIRR .
" "maternalized. whether written. audio or visual. distributed. promotional and marketing materials: a. no pictures of babies and children together with their mothers. The "total effect" should not directly or indirectly suggest that buying their product would produce better individuals. grandparents.Promotion of products within the scope of this Code must be objective and should not equate or make the product appear to be as good or equal to breastmilk or breastfeeding in the advertising concept. Prohibition – No advertising. as well as related products covered within the scope of this Code. Section 4. or resulting in greater love.The following shall not be included in advertising. pictures. ability. intelligence. The General Public and Mothers. because they tend to convey or give subliminal messages or impressions that undermine breastmilk and breastfeeding or otherwise exaggerate breastmilk substitutes and/or replacements. b. promotions. or sponsorpublished. exhibited and broadcast unless such materials are ships of infant formula. Texts. promotion or other and regulations are premised upon: marketing materials. Advertising. siblings." "close to mother's milk" or similar words . shall be allowed. The term "humanized. Section 13. promotions. other relatives or caregivers (or yayas) shall be used in any advertisements for infant formula and breastmilk supplements. fathers. "Total Effect" . for products within the x x x x scope of this Code shall be printed. provided for in this Code. sponsorships. or marketing materials and activities for breastmilk substitutes intended for infants and young children up to twenty-four (24) months. . pursuant to the applicable standards Section 11. Section 15.50 SECTION 6. Declaration of Principles – – The following are the underlying principles from which the revised rules (a) No advertising. In this connection. breastmilk duly authorized and approved by an substitutes and other related products are inter-agency committee created herein prohibited. Content of Materials. harmony or in any manner bring better health to the baby or other such exaggerated and unsubstantiated claim. illustrations or information which discourage or tend to undermine the benefits or superiority of breastfeeding or which idealize the use of breastmilk substitutes and milk supplements. It must not in any case undermine breastmilk or breastfeeding. f.
methods of use. Content – Each container/label shall contain such message. and in such a way as not to discourage breastfeeding. The RIRR imposes additional labeling requirements not found in the Milk Code: MILK CODE SECTION 10. (iii) a statement that the product shall be (e) Instructions for appropriate preparaused only on the advice of a health worker tion.51 4. and a warning against the related products including information health hazards of inappropriate that powdered infant formula may contain preparation. pathogenic microorganisms and must be prepared and used appropriately. and which message cannot be readily separated therefrom. Containers/Label. and which shall include the following points: (c) A statement that there is no substitute for breastmilk. (d) A statement that the product shall be used only on the advice of a health worker (ii) a statement of the superiority of as to the need for its use and the proper breastfeeding. which (b) A statement of the superiority of message can not readily become separated breastfeeding. the RIRR totally prohibits such activity: MILK CODE RIRR . Notice" or "Government Warning" or their equivalent. from it. RIRR Section 26. conspicuous and easily readable and understandable message in Pilipino or English printed on it. in both Filipino and English languages. and (f) The health hazards of unnecessary or (iv) instructions for appropriate improper use of infant formula and other preparation. and as to the need for its use and the proper methods of use. 5. – (a) Containers and/or labels shall be designed to provide the necessary information about the appropriate use of the products. or on a label. and a warning against the health hazards of inappropriate preparation. relative the following points: (a) The words or phrase "Important (b) Each container shall have a clear. The Milk Code allows dissemination of information on infant formula to health professionals. (i) the words "Important Notice" or their equivalent.
No manufacturer. – Section 22. Section 5(b). It shall also young child and other like phrases shall include the information specified in not be allowed. Education and however. RIRR absolutely forbids the same.52 SECTION 7. belief that bottle-feeding is equivalent or intellectual abilities of the infant and superior to breastfeeding. any phrase or words that information shall not imply or create a connotes to increase emotional. preclude the dissemination of Communication (IEC) materials on information to health professionals as breastfeeding. This Code does not. All health and nutrition professionals regarding products within claims for products within the scope of th the scope of this Code shall be restricted to Code are absolutely prohibited. 6. as speakers in classes or seminars for women and children activities and to SECTION 8. education and production of the scope of this Code. Health Workers. MILK CODE RIRR . holding of or participating provided in Section 8(b). avoid the use of these venues to market their brands or company names. (b) Information provided by manufacturers and distributors to health SECTION 16. distributor or representatives of products covered by (b) No facility of the health care system the Code shall be allowed to conduct or be shall be used for the purpose of promoting involved in any activity on breastfeeding infant formula or other products within promotion. Information. Health Care System. For this scientific and factual matters and such purpose. The Milk Code permits milk manufacturers and distributors to extend assistance in research and continuing education of health professionals.
involved in any activity on breastfeeding promotion. and their representatives.53 Section 4. whether in kind or in cash. holding of or participating as speakers in classes or seminars for women and children activities and to avoid the use of these venues to market their brands or company names. materials.It is the primary responsibility of the health workers to promote. equipments. SECTION 32. Declaration of Principles – SECTION 8. Health Workers – The following are the underlying principles from (e) Manufacturers and which the revised rules and regulations distributors of products are premised upon: within the scope of this i. Primary Responsibility of Health Workers . accordance with the rules and regulations SECTION 22. scholarships and continuing education. support. not otherwise falling within the with the approval of the scope of this Code or these Rules. – RIRR Section 51. milk companies and their agents. in breasfeeding. Part of this responsibility is to continuously update their knowledge and skills on breastfeeding. The Milk Code regulates the giving of donations. may only be coursed through the Inter Agency Committee (IAC). Donations Within the Scope of This Code . logistics or training from milk companies shall be permitted. distributor. should not form part of any policymaking body or research. Education and Communication (IEC) materials on breastfeeding. education and production of Information. within the scope of this Donations of products. given by Ministry of Health. representatives.Donations of products. entity in relation to the advancement of of health professionals. donations from manufacturers and Section 52. which shall determine whether such donation be accepted or otherwise. protect and support breastfeeding and appropriate infant and young child feeding. 7. . or representatives of products covered by promulgated by the the Code shall be allowed to conduct or be Ministry of Health. defined and covered under the Milk Code and these implementing rules (f) Nothing herein and regulations. Other Donations By Milk distributors of products Companies Not Covered by this Code. shall be strictly contained shall prevent prohibited. No manufacturer. The General Public and Mothers. MILK CODE SECTION 6. RIRR absolutely prohibits it. Milk Code may assist in the companies. and Code upon request by or the like. No assistance.
54 8. The RIRR provides for administrative sanctions not imposed by the Milk Code. MILK CODE RIRR .
including the blacklisting of the company to be furnished the Department of Budget and Management (DBM) and the Department of Trade and Industry (DTI).00) Pesos per day shall be made for every day the violation continues after having received the order from the IAC or other such appropriate body. depending on the gravity and extent of the violation.00) to Five Hundred (P500.55 Section 46. and in addition thereto. the recall of the offending product.000. the recall of the offending product.000. Administrative Sanctions.00) Pesos. revocation of the License to Operate (LTO) of the company concerned. cancellation of the CPR.00) to Fifty Thousand (P50.500. including those of their subsidiaries.00) Thousand Pesos.00) Pesos. and suspension of the Certificate of Product Registration (CPR). are deemed to be violations of the concerned milk company and shall not be based on the specific violating . f) An additional penalty of Two Thou-sand Five Hundred (P2.00) to One Hundred Fifty Thousand (P150.000. revocation of the CPR.000.000. the recall of the product. c) 3rd violation – Administrative Fine of a minimum of Sixty Thousand (P60. each product violation belonging or owned by a company. e) 5th and succeeding repeated violations – Administrative Fine of One Million (P1. including the recall of the offending product. depending on the gravity and extent of the violation. d) 4th violation –Administrative Fine of a minimum of Two Hundred Thousand (P200. juridical or natural. depending on the gravity and extent of the violation. and in addition thereto.000. b) 2nd violation – Administrative fine of a minimum of Ten Thousand (P10. found to have violated the provisions of the Code and its implementing Rules and Regulations: a) 1st violation – Warning. suspension of the License to Operate (LTO) for one year.00) Pesos. – The following administrative sanctions shall be imposed upon any person.000.000. notifying and penalizing the company for the infraction. For purposes of determining whether or not there is "repeated" violation.
9. The RIRR provides for repeal of existing laws to the contrary. The Court shall resolve the merits of the allegations of petitioner seriatim. 1. Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12 months old. Section 3 of the Milk Code states: SECTION 3. Scope of the Code – The Code applies to the marketing, and practices related thereto, of the following products: breastmilk substitutes, including infant formula; other milk products, foods and beverages, including bottle-fed complementary foods, when marketed or otherwise represented to be suitable, with or without modification, for use as a partial or total replacement of breastmilk; feeding bottles and teats. It also applies to their quality and availability, and to information concerning their use. Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind of product being marketed to the public. The law treats infant formula, bottle-fed complementary food, and breastmilk substitute as separate and distinct product categories. Section 4(h) of the Milk Code defines infant formula as "a breastmilk substitute x x x to satisfy the normal nutritional requirements of infants up to between four to six months of age, and adapted to their physiological characteristics"; while under Section 4(b), bottle-fed complementary food refers to "any food, whether manufactured or locally prepared, suitable as a complement to breastmilk or infant formula, when either becomes insufficient to satisfy the nutritional requirements of the infant." An infant under Section 4(e) is a person falling within the age bracket 0-12 months. It is the nourishment of this group of infants or children aged 0-12 months that is sought to be promoted and protected by the Milk Code. But there is another target group. Breastmilk substitute is defined under Section 4(a) as "any food being marketed or otherwise presented as a partial or total replacement for breastmilk, whether or not suitable for that purpose." This section conspicuously lacks reference to any particular age-group of children. Hence, the provision of the Milk Code cannot be considered exclusive for children aged 0-12 months. In other words, breastmilk substitutes may also be intended for young children more than 12 months of age. Therefore, by regulating breastmilk substitutes, the Milk Code also intends to protect and promote the nourishment of children more than 12 months old. Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided in Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be used by children aged over 12 months. There is, therefore, nothing objectionable with Sections 242 and 5(ff)43 of the RIRR. 2. It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize that breastmilk substitutes may be a proper and possible substitute for breastmilk. The entirety of the RIRR, not merely truncated portions thereof, must be considered and construed together. As held in De Luna v. Pascual,44 "[t]he particular words, clauses and phrases in the Rule should not be studied as detached and isolated expressions, but the whole and every part thereof must be considered in fixing the meaning of any of its parts and in order to produce a harmonious whole."
Section 7 of the RIRR provides that "when medically indicated and only when necessary, the use of breastmilk substitutes is proper if based on complete and updated information." Section 8 of the RIRR also states that information and educational materials should include information on the proper use of infant formula when the use thereof is needed. Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of breastmilk substitutes may be proper. 3. The Court shall ascertain the merits of allegations 345 and 446 together as they are interlinked with each other. To resolve the question of whether the labeling requirements and advertising regulations under the RIRR are valid, it is important to deal first with the nature, purpose, and depth of the regulatory powers of the DOH, as defined in general under the 1987 Administrative Code,47 and as delegated in particular under the Milk Code. Health is a legitimate subject matter for regulation by the DOH (and certain other administrative agencies) in exercise of police powers delegated to it. The sheer span of jurisprudence on that matter precludes the need to further discuss it..48 However, health information, particularly advertising materials on apparently non-toxic products like breastmilk substitutes and supplements, is a relatively new area for regulation by the DOH.49 As early as the 1917 Revised Administrative Code of the Philippine Islands,50 health information was already within the ambit of the regulatory powers of the predecessor of DOH.51 Section 938 thereof charged it with the duty to protect the health of the people, and vested it with such powers as "(g) the dissemination of hygienic information among the people and especially the inculcation of knowledge as to the proper care of infants and the methods of preventing and combating dangerous communicable diseases." Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state policy pronounced under Section 15, Article II of the 1987 Constitution, which is "to protect and promote the right to health of the people and instill health consciousness among them."52 To that end, it was granted under Section 3 of the Administrative Code the power to "(6) propagate health information and educate the population on important health, medical and environmental matters which have health implications."53 When it comes to information regarding nutrition of infants and young children, however, the Milk Code specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the power to ensure that there is adequate, consistent and objective information on breastfeeding and use of breastmilk substitutes, supplements and related products; and the power to control such information. These are expressly provided for in Sections 12 and 5(a), to wit: SECTION 12. Implementation and Monitoring – (b) The Ministry of Health shall be principally responsible for the implementation and enforcement of the provisions of this Code. For this purpose, the Ministry of Health shall have the following powers and functions: (1) To promulgate such rules and regulations as are necessary or proper for the implementation of this Code and the accomplishment of its purposes and objectives.
(4) To exercise such other powers and functions as may be necessary for or incidental to the attainment of the purposes and objectives of this Code. SECTION 5. Information and Education – (a) The government shall ensure that objective and consistent information is provided on infant feeding, for use by families and those involved in the field of infant nutrition. This responsibility shall cover the planning, provision, design and dissemination of information, and the control thereof, on infant nutrition. (Emphasis supplied) Further, DOH is authorized by the Milk Code to control the content of any information on breastmilk vis-à-vis breastmilk substitutes, supplement and related products, in the following manner: SECTION 5. x x x (b) Informational and educational materials, whether written, audio, or visual, dealing with the feeding of infants and intended to reach pregnant women and mothers of infants, shall include clear information on all the following points: (1) the benefits and superiority of breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing the decision not to breastfeed; and (5) where needed, the proper use of infant formula, whether manufactured industrially or home-prepared. When such materials contain information about the use of infant formula, they shall include the social and financial implications of its use; the health hazards of inappropriate foods or feeding methods; and, in particular, the health hazards of unnecessary or improper use of infant formula and other breastmilk substitutes. Such materials shall not use any picture or text which may idealize the use of breastmilk substitutes. SECTION 8. Health Workers – (b) Information provided by manufacturers and distributors to health professionals regarding products within the scope of this Code shall be restricted to scientific and factual matters, and such information shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding. It shall also include the information specified in Section 5(b). SECTION 10. Containers/Label – (a) Containers and/or labels shall be designed to provide the necessary information about the appropriate use of the products, and in such a way as not to discourage breastfeeding. xxxx (d) The term "humanized," "maternalized" or similar terms shall not be used. (Emphasis supplied) The DOH is also authorized to control the purpose of the information and to whom such information may be disseminated under Sections 6 through 9 of the Milk Code54 to ensure that the information that would reach pregnant women, mothers of infants, and health professionals and workers in the health care system is restricted to scientific and factual matters and shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding.
on the basis of adequate information and through appropriate marketing and distribution. Section 1657 of the RIRR prohibits all health and nutrition claims for products within the scope of the Milk Code. including infant formula. to wit: . such as claims of increased emotional and intellectual abilities of the infant and young child. to wit: SECTION 2. f) Section 8(b) which states that milk companies may provide information to health professionals but such information should be restricted to factual and scientific matters and shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding. Sections 1355 on "total effect" and 2656 of Rule VII of the RIRR contain some labeling requirements. The following are the provisions of the Milk Code that unequivocally indicate that the control over information given to the DOH is not absolute and that absolute prohibition is not contemplated by the Code: a) Section 2 which requires adequate information and appropriate marketing and distribution of breastmilk substitutes. e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to review and examine advertising. and promotion of breastmilk substitutes. d) Section 5(b) which provides that written. and other marketing materials.59 It bears emphasis. c) Section 5(a) which provides that the government shall ensure that objective and consistent information is provided on infant feeding. however. These requirements and limitations are consistent with the provisions of Section 8 of the Milk Code. promotion. b) Section 3 which specifically states that the Code applies to the marketing of and practices related to breastmilk substitutes. specifically: a) that there be a statement that there is no substitute to breastmilk. that the DOH's power under the Milk Code to control information regarding breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control does not encompass the power to absolutely prohibit the advertising. marketing. and to information concerning their use. It is in this context that the Court now examines the assailed provisions of the RIRR regarding labeling and advertising. audio or visual informational and educational materials shall not use any picture or text which may idealize the use of breastmilk substitutes and should include information on the health hazards of unnecessary or improper use of said product. and b) that there be a statement that powdered infant formula may contain pathogenic microorganisms and must be prepared and used appropriately. and g) Section 10 which provides that containers or labels should not contain information that would discourage breastfeeding and idealize the use of infant formula. Aim of the Code – The aim of the Code is to contribute to the provision of safe and adequate nutrition for infants by the protection and promotion of breastfeeding and by ensuring the proper use of breastmilk substitutes and breastmilk supplements when these are necessary.
" or similar terms. audio." "maternalized. That askewed interpretation of the Milk Code is precisely what Section 5(a) thereof seeks to avoid by mandating that all information regarding breastmilk vis-a-vis breastmilk substitutes be consistent. they shall include the social and financial implications of its use. or visual. provision. The buyers of breastmilk substitutes are mothers of infants. However. Such materials shall not use any picture or text which may idealize the use of breastmilk substitutes.60 SECTION 8. Section 26(f)61 of the RIRR is an equally reasonable labeling requirement. and Section 26 of the RIRR merely adds a fair warning about the likelihood of pathogenic microorganisms being present in infant formula and other related products when these are prepared and used inappropriately. x x x (b) Informational and educational materials. Thus. Health workers (b) Information provided by manufacturers and distributors to health professionals regarding products within the scope of this Code shall be restricted to scientific and factual matters. design. and. not to containers and labels thereof. whether written. . Section 26(c) of the RIRR which requires containers and labels to state that the product offered is not a substitute for breastmilk. whether manufactured industrially or homeprepared. It shall also include the information specified in Section 5. When such materials contain information about the use of infant formula. dealing with the feeding of infants and intended to reach pregnant women and mothers of infants. at the same time giving the government control over planning. the proper use of infant formula. It may be argued that Section 8 of the Milk Code refers only to information given to health workers regarding breastmilk substitutes. is a reasonable means of enforcing Section 8(b) of the Milk Code and deterring circumvention of the protection and promotion of breastfeeding as embodied in Section 260 of the Milk Code. such restrictive application of Section 8(b) will result in the absurd situation in which milk companies and distributors are forbidden to claim to health workers that their products are substitutes or equivalents of breastmilk. as such information would be inconsistent with the superiority of breastfeeding. These provisions of the Milk Code expressly forbid information that would imply or create a belief that there is any milk product equivalent to breastmilk or which is humanized or maternalized.58 (Emphasis supplied) and Section 10(d)59 which bars the use on containers and labels of the terms "humanized. and such information shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding. (Emphasis supplied) The label of a product contains information about said product intended for the buyers thereof. and dissemination of information on infant feeding. shall include clear information on all the following points: x x x (5) where needed. the health hazards of unnecessary or improper use of infant formula and other breastmilk substitutes. the health hazards of inappropriate foods or feeding methods. It implements Section 5(b) of the Milk Code which reads: SECTION 5. and yet be allowed to display on the containers and labels of their products the exact opposite message. in particular.
for products within the scope of this Code shall be printed. (2) To approve or disapprove. and . distributed. audio or visual. and marketing that is being assailed by petitioner. exhibited and broadcast unless such materials are duly authorized and approved by an inter-agency committee created herein pursuant to the applicable standards provided for in this Code. whether written. exhibition and broadcast of. The General Public and Mothers. on products within the scope of this Code. Implementation and Monitoring (a) For purposes of Section 6(a) of this Code. whether written. promotion or other marketing materials. the Milk Code invested regulatory authority over advertising. The Committee shall have the following powers and functions: (1) To review and examine all advertising.62 Ineluctably. audio or visual. on products within the scope of this Code. 2007 that formula milk is prone to contaminations and there is as yet no technology that allows production of powdered infant formula that eliminates all forms of contamination. distribution. promotion or other marketing materials. published. promotional and marketing materials to an IAC. In furtherance of Section 6(a) of the Milk Code. to wit: SECTION 6. audio or visual. all advertising promotion or other marketing materials. promotion. – (a) No advertising. whether written. delete objectionable portions from and prohibit the printing. The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes and supplements and related products cannot be questioned. (3) To prescribe the internal and operational procedure for the exercise of its powers and functions as well as the performance of its duties and responsibilities. the requirement under Section 26(f) of the RIRR for the label to contain the message regarding health hazards including the possibility of contamination with pathogenic microorganisms is in accordance with Section 5(b) of the Milk Code. an inter-agency committee composed of the following members is hereby created: Minister of Health Minister of Trade and Industry Minister of Justice Minister of Social Services and Development ------------------------------------------------------------------------Chairman Member Member Member The members may designate their duly authorized representative to every meeting of the Committee. thus: SECTION 12. It is its intervention into the area of advertising.61 Petitioner’s counsel has admitted during the hearing on June 19. publication.
x x x (Emphasis supplied) However. as well as related products covered within the scope of this Code. sponsorships or marketing materials and activities for breastmilk substitutes in line with the RIRR’s declaration of principle under Section 4(f). it does not prohibit the sale and manufacture. acknowledged the authority of IAC. oddly enough. Section 12 of the RIRR reiterated the requirement of the Milk Code in Section 6 thereof for prior approval by IAC of all advertising. The DOH. breastmilk substitutes and other related products are prohibited. What AO 2006-12. promotion. through its co-respondents. it simply regulates the advertisement and the promotions of breastfeeding milk substitutes. Your Honor. and marketing. viz: SOLICITOR GENERAL DEVANADERA: x x x Now. promotion. shall be allowed. We have to read Section 11 together with the other Sections because the other Section. promotions. and repeatedly insisted. prohibits advertising. through the OSG. marketing and promotional materials prior to dissemination. Section 12. Yet. or marketing materials and activities for breastmilk substitutes intended for infants and young children up to twenty-four (24) months. during the oral arguments on June 19. to wit: SECTION 11. the prohibition on advertising. sponsorships. Even respondents. what it does. promotions. or sponsorships of infant formula. evidently arrogated to itself not only the regulatory authority given to the IAC but also imposed absolute prohibition on advertising. sponsorship or marketing materials and activities for breast milk substitutes intended for infants and young children up to 24 months shall be allowed because this is the standard they tend to convey or give subliminal messages or impression undermine that breastmilk or breastfeeding x x x. that the prohibition under Section 11 is not actually operational. Prohibition – No advertising. 2007. because they tend to convey or give subliminal messages or impressions that undermine breastmilk and breastfeeding or otherwise exaggerate breastmilk substitutes and/or replacements. must be taken together with the provision on the Inter-Agency Committee that processes and evaluates because . Section 11 of the RIRR. provides for the inter agency committee that is empowered to process and evaluate all the advertising and promotion materials. We maintained that what AO 2006-12 provides is not an absolute prohibition because Section 11 while it states and it is entitled prohibition it states that no advertising. Declaration of Principles – (f) Advertising. the crux of the matter that is being questioned by Petitioner is whether or not there is an absolute prohibition on advertising making AO 2006-12 unconstitutional. Now. to wit: SECTION 4. promotions.62 (4) To promulgate such rules and regulations as are necessary or proper for the implementation of Section 6(a) of this Code.
please. it is provided that the Inter-Agency Committee. Your Honor. Your Honor. your Honor. under the Milk Code. What the AO 2006 is trying to prevent is any material that will undermine the practice of breastfeeding. ASSOCIATE JUSTICE NAZARIO: But. xxxx ASSOCIATE JUSTICE NAZARIO: Did I hear you correctly. Your Honor. while it is titled Prohibition. first we would like to stress that there is no total absolute ban. Your Honor. ASSOCIATE JUSTICE NAZARIO: . subject to the standards that we have stated earlier.they should not undermine breastfeeding. ASSOCIATE JUSTICE SANTIAGO: x x x Don't you think that the Department of Health overstepped its rule making authority when it totally banned advertising and promotion under Section 11 prescribed the total effect rule as well as the content of materials under Section 13 and 15 of the rules and regulations? SOLICITOR GENERAL DEVANADERA: Your Honor. that there is no absolute ban on advertising of breastmilk substitutes in the Revised Rules? SOLICITOR GENERAL DEVANADERA: Yes. which body has authority or power to promulgate Rules and Regulations regarding the Advertising. because we have the Inter-Agency Committee that can evaluate some advertising and promotional materials. because it is recognized that the Inter-Agency Committee has that power to evaluate promotional materials. particularly 12 and 13 and 15. Your Honor. Your Honor. Your Honor. Promotion and Marketing of Breastmilk Substitutes? SOLICITOR GENERAL DEVANADERA: Your Honor.63 there may be some information dissemination that are straight forward information dissemination. x x x Section 11. Madam Solicitor. please. it must be taken in relation with the other Sections. would you nevertheless agree that there is an absolute ban on advertising of breastmilk substitutes intended for children two (2) years old and younger? SOLICITOR GENERAL DEVANADERA: It's not an absolute ban. the Inter-Agency Committee is under the Department of Health. Second. ASSOCIATE JUSTICE SANTIAGO: Madam Solicitor General. which are.
promotional.64 So in short. and. whether written. and which shall include the following points: (i) the words "Important Notice" or their equivalent. SECTION 8. are quoted hereunder: SECTION 5. (2) maternal nutrition. However. will you please clarify there's no absolute ban on advertisement regarding milk substitute regarding infants two (2) years below? SOLICITOR GENERAL DEVANADERA: We can proudly say that the general rule is that there is a prohibition. in particular. audio. (3) the negative effect on breastfeeding of introducing partial bottlefeeding. SECTION 10. and (5) where needed. however. (b) Each container shall have a clear. (4) the difficulty of reversing the decision not to breastfeed. When such materials contain information about the use of infant formula. the health hazards of inappropriate foods of feeding methods. Such materials shall not use any picture or text which may idealize the use of breastmilk substitutes. Containers/Label – (a) Containers and/or labels shall be designed to provide the necessary information about the appropriate use of the products. . at the risk of being repetitious. Information and Education – (b) Informational and educational materials. 8(b). One of which is that." Said standards are set forth in Sections 5(b). and 10 of the Code. Your Honor. Health Workers. the InterAgency Committee can allow if the advertising and promotions will not undermine breastmilk and breastfeeding. conspicuous and easily readable and understandable message in Pilipino or English printed on it. It shall also include the information specified in Section 5(b). or visual. whether manufactured industrially or home-prepared. and for easy reference.63 Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code. – (b) Information provided by manufacturers and distributors to health professionals regarding products within the scope of this Code shall be restricted to scientific and factual matters and such information shall not imply or create a belief that bottle feeding is equivalent or superior to breastfeeding. which. dealing with the feeding of infants and intended to reach pregnant women and mothers of infants. and the preparation for and maintenance of breastfeeding. although it is the IAC which is authorized to promulgate rules and regulations for the approval or rejection of advertising. the health hazards of unnecessary or improper use of infant formula and other breastmilk substitutes. which message can not readily become separated from it. or other marketing materials under Section 12(a) of the Milk Code. we take exceptions and standards have been set. they shall include the social and financial implications of its use. the proper use of infant formula. said provision must be related to Section 6 thereof which in turn provides that the rules and regulations must be "pursuant to the applicable standards provided for in this Code. shall include clear information on all the following points: (1) the benefits and superiority of breastfeeding. or on a label. and in such a way as not to discourage breastfeeding.
ability. provision. accepted as sufficient standards the following: "public interest. design and dissemination of information. supplements and other related products. In Equi-Asia Placement. on infant nutrition. harmony or in any manner bring better health to the baby or other such exaggerated and unsubstantiated claim. in the past. Section 5(a) of the Milk Code states that: SECTION 5. the DOH exercises control over the information content of advertising. It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR which reads as follows: SECTION 13. intelligence. 4.Promotion of products within the scope of this Code must be objective and should not equate or make the product appear to be as good or equal to breastmilk or breastfeeding in the advertising concept. "Total Effect" . the Court also finds that there is no inconsistency between the provisions of the Milk Code and the RIRR. Department of Foreign Affairs. for use by families and those involved in the field of infant nutrition. or resulting in greater love. Information and Education – (a) The government shall ensure that objective and consistent information is provided on infant feeding. Such standards bind the IAC in formulating its rules and regulations on advertising. and a warning against the health hazards of inappropriate preparation. or other marketing materials. Through that single provision. and the control thereof." "public convenience and welfare. Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the enforcement of the provisions of the Code. With regard to activities for dissemination of information to health professionals. in relation to Section 8(b)67 of the same . promotional and marketing materials on breastmilk vis-a-vis breastmilk substitutes. (Emphasis supplied) Thus. Inc.65 (ii) a statement of the superiority of breastfeeding. In relation to such responsibility of the DOH. and 10 of the Milk Code. and (iv) instructions for appropriate preparation. The "total effect" should not directly or indirectly suggest that buying their product would produce better individuals. It also sets a viable standard against which the IAC may screen such materials before they are made public.64 the Court held: x x x [T]his Court had. Section 7(b)66 of the Milk Code." and "simplicity. It must not in any case undermine breastmilk or breastfeeding."65 In this case. This responsibility shall cover the planning. vs. correct information as to infant feeding and nutrition is infused with public interest and welfare. (iii) a statement that the product shall be used only on the advice of a health worker as to the need for its use and the proper methods of use. promotional. the DOH has the significant responsibility to translate into operational terms the standards set forth in Sections 5." "justice and equity. promotion. economy and welfare. and marketing. 8. by which the IAC shall screen advertising.
Section 4(i) of the RIRR provides that milk companies and their representatives should not form part of any policymaking body or entity in relation to the advancement of breastfeeding. The Court finds nothing in said provisions which contravenes the Milk Code. Sections 9 and 10 of the RIRR imposing limitations on the kind of research done or extent of assistance given by milk companies are completely in accord with the Milk Code. of health professionals in accordance with the rules and regulations promulgated by the Ministry of Health. it deals with breastfeeding promotion and education for women and children. it is the DOH which shall be principally responsible for the implementation and enforcement of the provisions of said Code. scholarships and the continuing education. Thus. petitioner's argument against this particular provision must be struck down. Petitioner also assails Section 4(i)69 of the RIRR prohibiting milk manufacturers' and distributors' participation in any policymaking body in relation to the advancement of breastfeeding. hence. petitioner alleges that Section 8(e)68 of the Milk Code permits milk manufacturers and distributors to extend assistance in research and in the continuing education of health professionals. the RIRR's prohibition on milk companies’ participation in any policymaking body in relation to the advancement of breastfeeding is in accord with the Milk Code. Nothing in Section 22 of the RIRR prohibits milk companies from giving assistance for research or continuing education to health professionals. Next. It is entirely up to the DOH to decide which entities to call upon or allow to be part of policymaking bodies on breastfeeding. rather. Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from giving reasearch assistance and continuing education to health professionals. Therefore.66 Code. Education and Communication (IEC) materials regarding breastfeeding that are intended for women and children. Said provision cannot be construed to encompass even the dissemination of information to health professionals. Contrary to petitioner's claim. The Milk Code endows the DOH with the power to determine how such research or educational assistance may be given by milk companies or under what conditions health workers may accept the assistance. Note that under Section 12(b) of the Milk Code. This provision is within the prerogative given to the DOH under Section 8(e)74 of the Milk Code. Said sections of the RIRR provide that research assistance for health workers and researchers may be allowed upon approval of an ethics committee. 5. What it prohibits is the involvement of the manufacturer and distributor of the products covered by the Code in activities for the promotion. allows dissemination of information to health professionals but such information is restricted to scientific and factual matters. and with certain disclosure requirements imposed on the milk company and on the recipient of the research award. while Sections 22 and 32 of the RIRR absolutely forbid the same. now DOH. Section 2270 of the RIRR does not pertain to research assistance to or the continuing education of health professionals. logistics or training to health workers. It is Sections 971 and 1072 of the RIRR which govern research assistance. . Section 22 of the RIRR does not prohibit the giving of information to health professionals on scientific and factual matters. Petitioner complains that Section 3273 of the RIRR prohibits milk companies from giving assistance. which provides that manufacturers and distributors of breastmilk substitutes may assist in researches. as restricted by the Milk Code. support. education and production of Information.
776) the power to impose fines and civil penalties. The circular provided for fines for the commission of prohibited acts. to wit: SECTION 13. . As to the RIRR's prohibition on donations. The DOH is not left without any means to enforce its rules and regulations. without any express grant of power to fix or impose such fines. LPG Refillers Association of the Philippines. Sanctions – (a) Any person who violates the provisions of this Code or the rules and regulations issued pursuant to this Code shall. therefore. in the Civil Aeronautics Board.76 is misplaced. For that matter. increase or compromise such fine and civil penalties. Thus. In the present case. while the Civil Aeronautics Board (CAB) was granted by the same law the power to review on appeal the order or decision of the CAA and to determine whether to impose.) Blg. no real inconsistency between the RIRR and the law because the Milk Code does not prohibit the DOH from refusing donations. 2000-06-10 implementing Batas Pambansa (B. upon conviction.77 the Court upheld the Department of Energy (DOE) Circular No. no person or entity can be forced to accept a donation. 7638 to impose fines or penalties. In this regard.000. 7." Section 13 of the Milk Code provides for the penalties to be imposed on violators of the provision of the Milk Code or the rules and regulations issued pursuant to it. Section 6(f) of the Milk Code provides that donations may be made by manufacturers and distributors of breastmilk substitutes upon the request or with the approval of the DOH. As reasoned out by respondents. The Milk Code leaves it purely to the discretion of the DOH whether to request or accept such donations. No.000. neither the Milk Code nor the Revised Administrative Code grants the DOH the authority to fix or impose administrative fines. Inc. remit. Thus. Blg. No. It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any donation from milk companies not covered by the Code should be coursed through the IAC which shall determine whether such donation should be accepted or refused.P. the chairman of the Board of Directors.A. The glaring difference in said case and the present case before the Court is that. the DOH again exceeded its authority by providing for such fines or sanctions in Section 46 of the RIRR. Should the offense be committed by a juridical person. The law does not proscribe the refusal of donations.. said provisions are also consistent with the Milk Code. the Civil Aeronautics Administration (CAA) was expressly granted by the law (R. the president.A. be punished by a penalty of two (2) months to one (1) year imprisonment or a fine of not less than One Thousand Pesos (P1. Respondent's reliance on Civil Aeronautics Board v. Said provision is. or the partners and/or the persons directly responsible therefor.00) or both. the Court upholds petitioner's objection thereto. shall be penalized. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found in the Milk Code. There is. The Court found that nothing in the circular contravened the law because the DOE was expressly authorized by B. the Court upheld the CAB's Resolution imposing administrative fines.67 6.00) nor more than Thirty Thousand Pesos (P30. The DOH then appropriately exercised its discretion through Section 5175 of the RIRR which sets forth its policy not to request or approve donations from manufacturers and distributors of breastmilk substitutes. the DOH is not mandated by the Milk Code to accept donations. the DOH cannot provide for those fines in the RIRR. Philippine Air Lines. general manager. null and void. therefore. 33. Section 12(b) (3) of the Milk Code authorizes the DOH to "cause the prosecution of the violators of this Code and other pertinent laws on products covered by this Code. 33 and R. In a more recent case. Inc.P. Perez v. mitigate.
it is a standard provision in administrative rules that prior issuances of administrative agencies that are inconsistent therewith are declared repealed or modified. revise. The framers of the constitution were well aware that trade must be subjected to some form of regulation for the public good. Petitioner’s claim that Section 57 of the RIRR repeals existing laws that are contrary to the RIRR is frivolous. (Emphasis supplied) 8. distributor.All orders. thus. it nonetheless reserves to the government the power to intervene whenever necessary to promote the general welfare. or of the rules and regulations issued pursuant to this Code. Philippine Coconut Authority. said provision is valid as it is within the DOH's rulemaking power. Public interest must be upheld over business interests. Repealing Clause .78 Such express grant of rulemaking power necessarily includes the power to amend. violate the due process clause of the Constitution.87 46. beyond the authority of the DOH to promulgate and in contravention of the Milk Code and. null and void. alter.90 In Pest Management Association of the Philippines v. issuances and rules and regulations. Lastly.91 it was held thus: Furthermore. and rules and regulations or parts thereof inconsistent with these revised rules and implementing regulations are hereby repealed or modified accordingly. Section 57 reads: SECTION 57. An administrative agency like respondent possesses quasi-legislative or rule-making power or the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the Constitution.68 (b) Any license. Section 57 of the RIRR does not provide for the repeal of laws but only orders. or for the pursuit of their business. or marketing firm or personnel for the practice of their profession or occupation. In fine. only Sections 4(f). manufacturer. or repeal the same. as held in Association of Philippine Coconut Desiccators v. petitioner makes a "catch-all" allegation that: x x x [T]he questioned RIRR sought to be implemented by the Respondents is unnecessary and oppressive. and subject to the doctrine of non-delegability and separability of powers. 11 and 46 are ultra vires. therefore. upon recommendation of the Ministry of Health. insofar as the same is in restraint of trade and because a provision therein is inadequate to provide the public with a comprehensible basis to determine whether or not they have committed a violation. issuances. Hence.83 5(w).81 (Emphasis supplied) Petitioner refers to Sections 4(f).82 4(i).86 32." .84 11. may. despite the fact that "our present Constitution enshrines free enterprise as a policy. permit or authority issued by any government agency to any health worker. and is offensive to the due process clause of the Constitution.85 22.88 and 5289 as the provisions that suppress the trade of milk and. be suspended or revoked in the event of repeated violations of this Code. Thus. The rest of the provisions of the RIRR are in consonance with the Milk Code. Fertilizer and Pesticide Authority.80 in order to make it more responsive to the times.79 This is to allow administrative agencies flexibility in formulating and adjusting the details and manner by which they are to implement the provisions of a law.
Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and oppressive. in the aforecited case.69 There can be no question that the unregulated use or proliferation of pesticides would be hazardous to our environment. manufacturer." The RIRR also enumerated in Section 5(w) the products manufactured or distributed by an entity that would qualify it as a "milk company. representative." x x x It must be clearly explained and proven by competent evidence just exactly how such protective regulation would result in the restraint of trade. milk formula. the giving of assistance. classes and seminars for women and children (Section 22). and the giving of donations (Section 52) would unreasonably hamper the trade of breastmilk substitutes. the Court sees no harm in the RIRR providing for just one term to encompass both entities. corporation or any other entity in the public or private sector engaged in the business (whether directly or indirectly) of marketing at the wholesale or retail level a product within the scope of this Code." to wit: SECTION 5 x x x. Petitioner has not established that the proscribed activities are indispensable to the trade of breastmilk substitutes. the definition in the RIRR merely merged together under the term "milk company" the entities defined separately under the Milk Code as "distributor" and "manufacturer. Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and distributors. Thus. the Court declared that "free enterprise does not call for removal of ‘protective regulations’. (j) "Manufacturer" means a corporation or other entity in the public or private sector engaged in the business or function (whether directly or indirectly or through an agent or and entity controlled by or under contract with it) of manufacturing a products within the scope of this Code. The Court is not convinced that the definition of "milk company" provided in the RIRR would bring about any change in the treatment or regulation of "distributors" and "manufacturers" of breastmilk substitutes. national distributor or broker. On the other hand. as defined under the Milk Code. Notably. milk supplement. or by any other description of such nature." Those are the only differences between the definitions given in the Milk Code and the definition as restated in the RIRR. distributor of infant formula. (w) "Milk Company" shall refer to the owner. . follow-up milk. Said section provides for the definition of the term "milk company. Petitioner failed to demonstrate that the aforementioned provisions of the RIRR are unreasonable and oppressive for being in restraint of trade. what is used is the phrase "products within the scope of this Code. including their representatives who promote or otherwise advance their commercial interests in marketing those products. Section 4 of the Milk Code provides: (d) "Distributor" means a person. The definition of "milk company" in the RIRR and the definitions of "distributor" and "manufacturer" provided for under the Milk Code are practically the same. A "primary distributor" is a manufacturer's sales agent. [Emphasis and underscoring supplied] In this case. breastmilk substitute or replacement. support and logistics or training (Section 32). petitioner failed to show that the proscription of milk manufacturers’ participation in any policymaking body (Section 4(i))." whereas in the Milk Code.
2006 is LIFTED insofar as the rest of the provisions of Administrative Order No. The Department of Health and respondents are PROHIBITED from implementing said provisions. as such. SO ORDERED. . The Temporary Restraining Order issued on August 15. 2006 are declared NULL and VOID for being ultra vires. the rest of the provisions of the RIRR are in consonance with the objective.70 Except Sections 4(f). 2006-0012 is concerned. purpose and intent of the Milk Code. Sections 4(f). the rest of the RIRR do not constitute illegal restraint of trade nor are they violative of the due process clause of the Constitution. 2006-0012 dated May 12. the petition is PARTIALLY GRANTED. constituting reasonable regulation of an industry which affects public health and welfare and. WHEREFORE. 11 and 46 of Administrative Order No. 11 and 46.
No.R. then pending with the BIR. SP No.D. 1931.4 respectively.<2 assailing the decisions of the Court of Appeals in CA-G. Savellano (Savellano) to the Bureau of Internal Revenue (BIR) on 24 June 1986. dated 08 August 1986.6 PNOC wrote the BIR on 25 September 1986.9 . 109976 April 26. 29526.5 The Petitions before this Court originated from a sworn statement submitted by private respondent Tirso B. In a letter. Petitioner. 1931. vs. as withholding agent.R. No.396. THE HON. in the total amount of P376. Respondents. SP No. vs.R.D.71 Republic of the Philippines SUPREME COURT Manila EN BANC G. for the payment of the final tax on the interest earnings and/or yields from PNOC's money placements with the bank. No. and made an offer to compromise its tax liability.21. the BIR sent a demand letter to PNB. Through his sworn statement. COURT OF TAX APPEALS.301. SAVELLANO and COMMISSIONER OF INTERNAL REVENUE. which it estimated to be in the sum of P304. in the amount of P335. THE HON. in violation of Presidential Decree (P. 4249.83. 2005 PHILIPPINE NATIONAL OIL COMPANY. x--------------------x G. COURT OF APPEALS.7 On 08 October 1986. DECISION CHICO-NAZARIO.33.259.R. The amount of the claim for tax refund/credit was supposedly a receivable account of PNOC from NAPOCOR. excluding interest and surcharges.450. P. COURT OF APPEALS.8 On the same date. J. private respondent Savellano informed the BIR that PNB had failed to withhold the 15% final tax on interest earnings and/or yields from the money placements of PNOC with the said bank. 2005 PHILIPPINE NATIONAL BANK. which took effect on 11 June 1984. 112800 April 26. which both affirmed the decision of the Court of Tax Appeals (CTA) in CTA Case No. the BIR also mailed a letter to PNOC informing it of the demand letter sent to PNB. as of 31 July 1986. the BIR requested PNOC to settle its liability for taxes on the interests earned by its money placements with PNB and which PNB did not withhold.) No.419. PNOC proposed to set-off its tax liability against a claim for tax refund/credit of the National Power Corporation (NAPOCOR). from 15 October 1984 to 15 October 1986. withdrew all tax exemptions of government-owned and controlled corporations. 295833 and CA-G. Respondents. THE COMMISSIONER OF INTERNAL REVENUE and TIRSO SAVELLANO. Petitioner. TIRSO B.133.: This is a consolidation of two Petitions for Review on Certiorari filed by the Philippine National Oil Company (PNOC)1 and the Philippine National Bank (PNB).
32 final tax.82. PNOC proposed a compromise by paying P91.479.815.17 On 08 April 1988.617.14 On 07 January 1988. BIR requested PNOC to settle its tax liability in the total amount of P385.343. wrote the BIR to demand payment of the balance of his informer's reward. private respondent Savellano.961.955.349. to BIR Commissioner Tan.12 Then BIR Commissioner Bienvenido A. dated 08 March 1988. dated 14 October 1986.1213 Private respondent Savellano. private respondent Savellano questioned the legality of the compromise agreement entered into by the BIR and PNOC and claimed that the tax liability should have been collected in full.10 The BIR replied on 11 November 1986 that the proposal for set-off was premature since NAPOCOR's claim was still under process.129.129.29 basic tax. Once more.72 PNOC.765. dated 22 June 1987. broken down as follows: Previous payment made by PNB Add: Payment made by PNOC pursuant to the compromise agreement of June 22.003. representing 15% of the P93.321.961.O.2515 BIR Commissioner Tan replied through a letter.23 91.89.955. 39-86.580.) No.343. Revenue Memorandum Order (RMO) No. while the aforesaid Motion for Reconsideration was still pending with the BIR.093.093. PNOC made another offer to the BIR to settle its tax liability. in accordance with the provisions of Executive Order (E. The BIR received a total tax payment on the interest earnings and/or yields from PNOC's money placements with PNB in the amount of P93.15 P 57. BIR Commissioner Tan further explained that the compromise was in accordance with the provisions of E. 44. 44. 1987 Total tax payment P P 2.479.12 P 14. consisting of P303. that private respondent Savellano was already fully paid the informer's reward equivalent to 15% of the amount of tax actually collected by the BIR pursuant to its compromise agreement with PNOC.800.O.915.89. was paid the informer's reward in the total amount of P14. through his legal counsel. however. and RMO No.321.003.955.89 P 93. representing 30% of the P303.479.12. in another letter. reiterated its proposal to settle its tax liability through the set-off of the said tax liability against NAPOCOR'S pending claim for tax refund/credit. Tan. computed as follows: BIR tax assessment Final tax rate Informer's reward due (BIR deficiency tax assessment x Final tax rate) Less: Payment received by private respondent Savellano Outstanding balance P 385.11 On 09 June 1987. accepted the compromise. In the same letter. No.50 interest computed until 15 November 1986. This time.89 P 43. through four installments.12 tax collected by the BIR from PNOC and PNB. 4-87.580.237. plus P82.16 Private respondent Savellano submitted another letter.952. in a letter.82 0. seeking reconsideration of his decision to compromise the tax liability of PNOC.766. He received the last installment on 01 December 1987. private respondent Savellano filed a Petition for Review ad cautelam with the . dated 24 March 1988.894.
CTA, docketed as CTA Case No. 4249. He claimed therein that BIR Commissioner Tan acted "with grave abuse of discretion and/or whimsical exercise of jurisdiction" in entering into a compromise agreement that resulted in "a gross and unconscionable diminution" of his reward. Private respondent Savellano prayed for the enforcement and collection of the total tax assessment against taxpayer PNOC and/or withholding agent PNB; and the payment to him by the BIR Commissioner of the 15% informer's reward on the total tax collected.18 He would later amend his Petition to implead PNOC and PNB as necessary and indispensable parties since they were parties to the compromise agreement.19 In his Answer filed with the CTA, BIR Commissioner Tan asserted that the Petition stated no cause of action against him, and that private respondent Savellano was already paid the informer's reward due him. Alleging that the Petition was baseless and malicious, BIR Commissioner Tan filed a counterclaim for exemplary damages against private respondent Savellano.20 PNOC and PNB filed separate Motions to Dismiss, both arguing that the CTA lacked jurisdiction to decide the case.21 In its Resolution, dated 28 November 1988, the CTA denied the Motions to Dismiss since the question of lack of jurisdiction and/or cause of action do not appear to be indubitable.22 After their Motions to Dismiss were denied by the CTA, PNOC and PNB filed their respective Answers to the amended Petition. PNOC averred, among other things, that (1) it had no privity with private respondent Savellano; (2) the BIR Commissioner's discretionary act in entering into the compromise agreement had legal basis under E.O. No. 44 and RMO No. 39-86 and RMO No. 4-87; and (3) the CTA had no jurisdiction to resolve the case against it.23 On the other hand, PNB asserted that (1) the CTA lacked jurisdiction over the case; and (2) the BIR Commissioner's decision to accept the compromise was discretionary on his part and, therefore, cannot be reviewed or interfered with by the courts.24 PNOC and PNB later filed their amended Answer invoking an opinion of the Commission on Audit (COA) disallowing the payment by the BIR of informer's reward to private respondent Savellano.25 The CTA, thereafter, ordered the parties to submit their evidence,26 to be followed by their respective Memoranda.27 On 23 November 1990, private respondent Savellano, filed a Manifestation with Motion for Suspension of Proceedings, claiming that his pending Motion for Reconsideration with the BIR Commissioner may soon be resolved.28 Both PNOC and PNB opposed the said Motion.29 Subsequently, the new BIR Commissioner, Jose U. Ong, in a letter to PNB, dated 16 January 1991, demanded that PNB pay deficiency withholding tax on the interest earnings and/or yields from PNOC's money placements, in the amount of P294,958,450.73, computed as follows: Withholding tax, plus interest under the P letter of demand dated November 11, 1986 Less: Amount paid under E.O. No. 44 P Amount still due and collectible P 385,961,580.82 91,003,129.89 294,958,450.7330
This BIR letter was received by PNB on 06 February 1991,31 and was protested by it through a letter, dated 11 April 1991.32 The BIR denied PNB's protest on the ground that it was filed out of time and, thus, the assessment had already become final.33
Private respondent Savellano, on 22 February 1991, filed an Omnibus Motion moving to withdraw his previous Motion for Suspension of Proceeding since BIR Commissioner Ong had finally resolved his Motion for Reconsideration, and submitting by way of supplemental offer of evidence (1) the letter of BIR Commissioner Ong, dated 13 February 1991, informing private respondent Savellano of the action on his Motion for Reconsideration; and (2) the demand-letter of BIR Commissioner Ong to PNB, dated 16 January 1991.34 Despite the oppositions of PNOC and PNB, the CTA, in a Resolution, dated 02 May 1991, resolved to allow private respondent Savellano to withdraw his previous Motion for Suspension of Proceeding and to admit the supplementary evidence being offered by the same party.35 In its Order, dated 03 June 1991, the CTA considered the case submitted for decision as of the following day, 04 June 1991.36 On 11 June 1991, PNB appealed to the Department of Justice (DOJ) the BIR assessment, dated 16 January 1991, for deficiency withholding tax in the sum of P294,958,450.73. PNB alleged that its appeal to the DOJ was sanctioned under P.D. No. 242, which provided for the administrative settlement of disputes between government offices, agencies, and instrumentalities, including government-owned and controlled corporations.37 Three days later, on 14 June 1991, PNB filed a Motion to Suspend Proceedings before the CTA since it had a pending appeal before the DOJ.38 On 04 July 1991, PNB filed with the CTA a Motion for Reconsideration of its Order, dated 03 June 1991, submitting the case for decision as of 04 June 1991, and prayed that the CTA hold its resolution of the case in view of PNB's appeal pending before the DOJ.39 On 17 July 1991, PNB filed a Motion to Suspend the Collection of Tax by the BIR. It alleged that despite its request for reconsideration of the deficiency withholding tax assessment, dated 16 January 1991, BIR Commissioner Ong sent another letter, dated 23 April 1991, demanding payment of the P294,958,450.73 deficiency withholding tax on the interest earnings and/or yields from PNOC's money placements. The same letter informed PNB that this was the BIR Commissioner's final decision on the matter and that the BIR Commissioner was set to issue a warrant of distraint and/or levy against PNB's deposits with the Central Bank of the Philippines. PNB further alleged that the levy and distraint of PNB's deposits, unless restrained by the CTA, would cause great and irreparable prejudice not only to PNB, a government-owned and controlled corporation, but also to the Government itself.40 Pursuant to the Order of the CTA, during the hearing on 19 July 1991,41 the parties submitted their respective Memoranda on PNB's Motion to Suspend Proceedings.42 On 20 September 1991, private respondent Savellano filed another Omnibus Motion calling the attention of the CTA to the fact that the BIR already issued, on 12 August 1991, a warrant of garnishment addressed to the Central Bank Governor and against PNB. In compliance with the said warrant, the Central Bank issued, on 23 August 1991, a debit advice against the demand deposit account of PNB with the Central Bank for the amount of P294,958,450.73, with a corresponding transfer of the same amount to the demand deposit-in-trust of BIR with the Central Bank. Since the assessment had already been enforced, PNB's Motion to Suspend Proceedings became moot and academic. Private respondent Savellano, thus, moved for the denial of PNB's Motion to Suspend Proceedings and for an order requiring BIR to deposit with the CTA the amount of P44,243,767.00 as his informer's reward, representing 15% of the deficiency withholding tax collected.43
Both PNOC and PNB opposed private respondent Savellano's Omnibus Motion, dated 20 September 1991, arguing that the DOJ already ordered the suspension of the collection of the tax deficiency. There was therefore no basis for private respondent Savellano's Motion as the same was premised on the erroneous assumption that the tax deficiency had been collected. When the DOJ denied the BIR Commissioner's Motion to Dismiss and required him to file his answer, the DOJ assumed jurisdiction over PNB's appeal, and the CTA should first suspend its proceedings to give the DOJ the opportunity to decide the validity and propriety of the tax assessment against PNB.44 The CTA, on 28 May 1992, rendered its decision, wherein it upheld its jurisdiction and disposed of the case as follows: WHEREFORE, judgment is rendered declaring the COMPROMISE AGREEMENT between the Bureau of Internal Revenue, on the one hand, and the Philippine National Oil Company and Philippine National Bank, on the other, as WITHOUT FORCE AND EFFECT; The Commissioner of Internal Revenue is hereby ordered to ENFORCE the ASSESSMENT of January 16, 1991 against Philippine National Bank which has become final and unappealable by collecting from Philippine National Bank the deficiency withholding tax, plus interest totalling (sic) P294,958,450.73; Petitioner may be paid, upon collection of the deficiency withholding tax, the balance of his entitlement to informer's reward based on fifteen percent (15%) of the deficiency withholding total tax collected in this case or P44,243.767.00 subject to existing rules and regulations governing payment of reward to informers.45 In a Resolution, dated 16 November 1992, the CTA denied the Motions for Reconsideration filed by PNOC and PNB since they substantially raised the same issues in their previous pleadings and which had already been passed upon and resolved adversely against them.46 PNOC and PNB filed separate appeals with the Court of Appeals seeking the reversal of the CTA decision in CTA Case No. 4249, dated 28 May 1992, and the CTA Resolution in the same case, dated 16 November 1992. PNOC's appeal was docketed as CA-G.R. SP No. 29583, while PNB's appeal was CA-G.R. SP No. 29526. In both cases, the Court of Appeals affirmed the decision of the CTA. In the meantime, the Central Bank again issued on 02 September 1992 a debit advice against the demand deposit account of PNB with the Central Bank for the amount of P294,958,450.73,47 and on 15 September 1992, credited the same amount to the demand deposit account of the Treasurer of the Republic of the Philippines.48 On 04 November 1992, the Treasurer of the Republic issued a journal voucher transferring P294,958,450.73 to the account of the BIR.49 PNB, in turn, debited P294,958,450.73 from the deposit account of PNOC with PNB.50 PNOC and PNB then filed separate Petitions for Review on Certiorari with this Court, praying that the decisions of the Court of Appeals in CA-G.R. SP No. 29583 and CA-G.R. SP No. 29526, respectively, both affirming the decision of the CTA in CTA Case No. 4249, be reversed and set aside. These two Petitions were consolidated since they involved identical parties and factual background, and the resolution of related, if not exactly, the same issues. In its Petition for Review, PNOC alleged the following errors committed by the Court of Appeals in CA-G.R. SP No. 29583:
R. on the other hand. The Court of Appeals erred in holding that the deficiency taxes of PNOC could not be the subject of a compromise under Executive Order No. was addressed to PNOC. 2. dated 08 October 1986. The main argument of PNB in assailing the jurisdiction of the CTA in CTA Case No. SP No. and (4) Order of the CTA directing payment of additional informer's reward to private respondent Savellano. PNB. demanding payment of the tax it had failed to withhold on the interest earnings and/or yields from PNOC's money placements.53 should be considered as a new assessment against PNB. dated 16 January 1991. 4249. 44. As a new assessment. this Court finds that PNOC and PNB are basically questioning the (1) Jurisdiction of the CTA in CTA Case No. assigning the following errors: 1. PNOC wrote the BIR three succeeding letters offering to compromise its tax liability. of the assigned errors in the Court of Appeals' decisions essentially requires a review of the CTA decision itself. in its own Petition for Review. assailed the decision of the Court of Appeals in CAG. and 3. enforceable. The BIR and PNOC eventually reached a compromise agreement on 22 June 1987. dated 16 January 1991 did not constitute a new assessment against PNB. and 2. The demand letter. Respondent Court erred in not finding that the Court of Tax Appeals lacks jurisdiction on the controversy involving BIR and PNB (both government instrumentalities) regarding the new assessment of BIR against PNB. requesting it to settle its tax liability. I Jurisdiction of the CTA A. 29526. therefore. 29583 and CA-G. did not act on the demand letter it received. This argument is without merit.D. was merely a development in the continuing effort of the BIR to collect the tax assessed against PNOC and PNB way back in 1986. The respondent Court erred in not ruling that the Commissioner of Internal Revenue cannot unilaterally annul tax compromises validly entered into by his predecessor. dated 16 January 1991.52 The decisions of the Court of Appeals in CA-GR SP No. dated 08 August 1986. 242. No. The resolution. dated 08 October 1986. 29526.51 PNB.R. as withholding agent. The respondent Court erred in not finding that the Court of Tax Appeals has no jurisdiction to question the compromise agreement entered into by the Commissioner of Internal Revenue. The BIR subsequently sent another letter. as provided in P. 4249. 4249 is that the BIR demand letter. SP No. it gave rise to a new dispute and controversy solely between the BIR and PNB that should be administratively settled or adjudicated. to PNB. thus. affirmed the decision of the CTA in CTA Case No. The Court of Appeals erred in holding that Savellano is entitled to additional informer's reward. Private . (3) Finding of the CTA that the deficiency withholding tax assessment against PNB had already become final and unappealable and. (2) Declaration by the CTA that the compromise agreement was without force and effect. In consolidating the present Petitions.76 1. The issuance by the BIR of the demand letter. BIR's first letter.
dated 16 January 1991. B. dated 16 January 1991. the Act creating the Court of Tax Appeals: SECTION 7. the demand letter.77 respondent Savellano questioned the validity of the compromise agreement because the reduced amount of tax collected from PNOC. fees or other charges. Acting on the request of private respondent Savellano. 4249 by virtue of Republic Act No. actually referred to the withholding tax assessment first issued in 1986 and its eventual settlement through a compromise agreement. It is clear from the foregoing that the BIR demand letter. 1125. also proportionately reduced his informer's reward. dated 16 January 1991. correctly sustained its jurisdiction and continued the proceedings in CTA Case No. the computation of the deficiency withholding tax was based on the figures from the 1986 assessments against PNOC and PNB. refunds of internal revenue taxes. BIR Commissioner Ong explicitly declared therein that the compromise agreement was without legal basis. dated 16 January 1991. after it contested the deficiency withholding tax assessment against it and the demand for payment thereof before the DOJ. – The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal. These constant references to past events and circumstances demonstrate that the demand letter. In fact. against PNB. Jurisdiction. as the withholding agent. the latest action taken by the BIR to collect on the tax assessments issued against PNOC and PNB in 1986. as the withholding agent for PNOC. the new BIR Commissioner declared the compromise agreement to be without basis and issued the demand letter. dated 16 January 1991. there could be no basis for PNB's claim that any dispute arising from the new assessment should only be between BIR and PNB. could not stand alone as a new assessment. 4249. 1125. The CTA assumed jurisdiction over the Petition for Review filed by private respondent Savellano based on the following provision of Rep. rejected DOJ's claim of jurisdiction to administratively settle or adjudicate BIR's assessment against PNB. 4249. Act No. 242. or other matters arising . and requested PNB. Private respondent Savellano then requested the BIR Commissioner to review and reconsider the compromise agreement. Still proceeding from the argument that there was a new dispute between PNB and BIR. In addition. did not constitute a new assessment. in effect. and BIR no longer conducted a new audit or investigation of either PNOC and PNB before it issued the demand letter on 16 January 1991. PNB argues that the demand letter. It should always be considered in the factual context summarized above. penalties imposed in relation thereto. by virtue of the compromise agreement. to pay the amount of withholding tax still due. but rather. as herein provided (1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments. Having established that the BIR demand letter. and. The CTA correctly retained jurisdiction over CTA Case No. then. We see it differently as the said demand letter presented the resolution by BIR Commissioner Ong of the previous controversy involving the compromise of the 1986 tax assessments. The CTA. dated 16 January 1991.D. PNB sought the suspension of the proceedings in CTA Case No. however. was not a new assessment. No. pursuant to P. introduced a new controversy.
but excluding constitutional offices or agencies. Act No. No.D. 44. 242.D. bureaus. which authorized the BIR Commissioner to compromise delinquent accounts and disputed assessments pending as of 31 December 1985. (b) The Government Corporate Counsel. as Attorney General and ex officio legal adviser of all government-owned or controlled corporations and entities. (Underscoring ours. agencies. 1125. His ruling or determination of the question in each case shall be conclusive and binding upon all the parties concerned. and its implementing rules and regulations. No. shall henceforth be administratively settled or adjudicated as provided hereinafter. with respect to all other disputes or claims or controversies which do not fall under the categories mentioned in paragraphs (a) and (b). arising from the interpretation and application of statutes. Provisions of law to the contrary notwithstanding. SECTION 2. bureaus. He submitted before the CTA questions of law involving the interpretation and application of (1) E. contracts or agreements. with respect to disputes or claims or controversies between or among government-owned or controlled corporations or entities being served by the Office of the Government Corporate Counsel. offices. Provisions on jurisdiction of P. In all cases involving only questions of law. the same shall be submitted to and settled or adjudicated by the Secretary of Justice.78 under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue. . and instrumentalities of the National Government. Cases involving mixed questions of law and of fact or only factual issues shall be submitted to and settled or adjudicated by: (a) The Solicitor General.54 These should undoubtedly be considered as matters arising from the NIRC and other laws being administered by the BIR. No. claims and controversies solely between or among the departments. . The PNB and DOJ are of the same position that P. all disputes.O. which granted to the informer a reward equivalent to 15% of the actual amount recovered or collected by the BIR. . offices and other agencies of the National Government. Act No. No. private respondent Savellano requested a review of the decisions of then BIR Commissioner Tan to enter into a compromise agreement with PNOC and to reject his claim for additional informer's reward.) In his Petition before the CTA. in consonance with Section 83 of the Revised Administrative Code. et al. the more recent law. and (c) The Secretary of Justice. 242. thus. PNB. including government-owned or controlled corporations. and (2) Section 316(1) of the National Internal Revenue Code of 1977 (NIRC of 1977). with respect to disputes or claims controversies between or among the departments.D.55 based on the pronouncement of this Court in Development Bank of the Philippines v. Court of Appeals. SECTION 3. 1125.. as amended. repealed Section 7(1) of Rep. insists on the jurisdiction of the DOJ over its appeal of the deficiency withholding tax assessment by virtue of P. however. appealable to the CTA under Section 7(1) of Rep. That this shall not apply to cases already pending in court at the time of the effectivity of this decree. 242 read: SECTION 1. Provided. 56] quoted below: The Court … expresses its entire agreement with the conclusion of the Court of Appeals — and the basic premises thereof — that there is an "irreconcilable .
University of Utah vs. 242. 242.D. 242 repealed Section 7(2) of Rep.D. Richards. Co. agencies and instrumentalities. 109 U. which. Apostol.. Book IV of E... 928. (Crane v. thus. or provisions. 970. and certainly includes the matter in question.. Act No. Louis & S. 322. claims and controversies between or among government offices. Act No.D. to wit: The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later date clearly reveals an intention on the part of the law making power to abrogate the prior law. 77 Am. 1125. No. including government-owned or controlled corporations.A. No. No. and the other general.59 for the guidelines in determining the relation between the two statutes in question. encompassing all disputes. should prevail over the earlier. (Underscoring ours. Reeder and Reeder. S. 226 U. The special act and the general law must stand together. PNB contends that P.. Partee vs. S. the special must be taken as intended to constitute an exception to the general act or provision.. St. this intention must be given effect. it was expressly declared that P. et al. 1125. which provides for the exclusive appellate jurisdiction of the CTA over decisions of the Commissioner of Customs.. would include the same matter and thus conflict with the special act or provision. In the said case." and hence. No. (Ex Parte United States. Act No. Court of Appeals. No. F.D. Its coverage is broad and sweeping. 420. St. the one as the law of the particular subject and the other as the general law of the land.D. Rep. as the Legislature is not to be presumed to have intended a conflict.O.61 Sustained herein is the contention of private respondent Savellano that P. 204 Fed. 334. claims and controversies. 1125 and P.. that the later enactment (P. being the latest expression of the legislative will. ed. with reference to which the question arises bear to each other the relation of general to special. No. v. one of which is special and particular.57 After re-examining the provisions on jurisdiction of Rep. 242). No. 1030.D. 242 is a general law that deals with administrative settlement or adjudication of disputes. and it has become an unbending rule of statutory construction that the intention to repeal a former law will not be imputed to the Legislature when it appears that the two statutes. R. 281. The following rule should principally govern instead: Specific legislation upon a particular subject is not affected by a general law upon the same subject unless it clearly appears that the provisions of the two laws are so repugnant that the legislators must have intended by the later to modify or repeal the earlier legislation. while the other is a special law.62 On the other hand. No. et al. 242 should be deemed to have likewise repealed Section 7(1) of Rep.) When there appears to be an inconsistency or conflict between two statutes and one of the statutes is a general law. Ex Parte Crow Dog. 1125 is a .. ed.)60 It has. It has been incorporated as Chapter 14.79 repugnancy…between Section 7(2) of R. the special law prevails – Generalia specialibus non derogant. Rep. 556. otherwise known as the Revised Administrative Code of the Philippines. Act No. become an established rule of statutory construction that between a general law and a special law.) Where there are two acts or provisions. 292. especially when such general and special acts or provisions are contemporaneous. Rep.. then repeal by implication is not the primary rule applicable. if standing alone. 27 L. but there must always be a sufficient revelation of this intention.58 and refers to the earlier case of Lichauco & Company. 57 L. this Court finds itself in disagreement with the pronouncement made in Development Bank of the Philippines v. 1125 and P. Inc. which provide for the exclusive appellate jurisdiction of the CTA over decisions of the BIR Commissioner. 22 Mich.
It was private respondent Savellano who gave the BIR the information that resulted in the investigation of PNOC and PNB. No. The time to be lost.D. No. falling under Section 7 of Rep. as the tax collector. Act No. claims and controversies solely between or among departments. it is more in keeping with orderly administration of justice that all the causes of action here "be cognizable and heard by only one court: the Court of Industrial Relations. Even if. Section 1 of P. and who initiated CTA Case No.64] this Court upheld the jurisdiction of the Court of Industrial Relations over the ordinary courts and justified its decision in the following manner: We are unprepared to break away from the teaching in the cases just adverted to. the present dispute would still not be covered by P. Manila Hotel Workers' Union-PTGWO. The ends of justice were best served when the CTA continued to exercise its jurisdiction over CTA Case No. No. 4249. which had assumed jurisdiction over all the parties to the controversy.D. To force the employees to shuttle from one court to another to secure full redress is a situation gravely prejudicial. that P. The CTA. effort wasted. and both PNOC and PNB are government-owned and controlled corporations. 242 explicitly provides that only disputes. 1125. remain in the exclusive appellate jurisdiction of the CTA. specifically Section 7 thereof on the jurisdiction of the CTA. 4249 by filing a Petition for Review. No. and private respondent Savellano. Inc. PNOC. 242. including government-owned and controlled corporations. 242 is the more recent law is no longer significant. and instrumentalities of the National Government. shall be administratively settled or adjudicated. The rights of all four parties in CTA Case No. A piecemeal resort to one court and another gives rise to multiplicity of suits. 242 should prevail over Rep. that a pronouncement as to one would definitely have repercussions on the others.D.D.80 special law63 dealing with a specific subject matter – the creation of the CTA. bureaus. No. Rep. Indeed. and instrumentalities.D. respondent Savellano is a private citizen. While the BIR is obviously a government bureau. claims and controversies.D. II Validity of the Compromise Agreement . 1125. additional expense incurred – these are considerations which weigh heavily against split jurisdiction. et al. the informer claiming his reward. namely the BIR. Following the rule on statutory construction involving a general and a special law previously discussed. then P. and the fact that P." The same justification is used in the present case to reject DOJ's jurisdiction over the BIR and PNB. Act No. arose from the same factual background and were so closely interrelated. even though solely among government offices. anxiety augmented. In Bay View Hotel.. the withholding agent. 242. His standing in the controversy could not be lightly brushed aside. who requested the BIR Commissioner to reconsider the compromise agreement in question. Disputes. to the exclusion of the other parties. v. offices. Act No. 242 should not affect Rep. for the sake of argument. PNB. Such a construction resolves the alleged inconsistency or conflict between the two statutes. the taxpayer. To draw a tenuous jurisdictional line is to undermine stability in labor litigations. Act No. 1125. including constitutional offices or agencies. as well as government-owned and controlled corporations. which shall exercise exclusive appellate jurisdiction over the tax disputes and controversies enumerated therein. 4249. constitutes an exception to P. agencies. agencies. 1125. could render a comprehensive resolution of the issues raised and grant complete relief to the parties. No.
) if the decision of the BIR on the taxpayer's administrative protest is appealed by the taxpayer before an appropriate court. Where no return was filed. PNOC and PNB. The dissenting opinion itself defines self-assessed tax as. because the BIR conducted an investigation and assessment of PNOC and PNB after obtaining information regarding the non-withholding of tax from private respondent Savellano.O.81 A. on different grounds. Ulep. 44 are defined under Revenue Regulation (RR) No. a delinquent account as of 31 December 1985. E. the taxpayer shall be considered delinquent as of the time the tax on such return was due. dispute the decision of the CTA in CTA Case No. No. in which case. It anchors its argument on the declaration made by this Court in Tupaz v. or 2." Clearly.O.O. upon the payment of an amount equal to 30% of the basic tax assessed. b) Disputed assessment – refers to a tax assessment disputed or protested on or before December 31. as follows: a) Delinquent account – Refers to the amount of tax due on or before December 31. issued against it on 08 August 1986. such a system imposes upon the taxpayer the obligation to conduct an assessment of himself so he . and is. No. could not have been a deficiency assessment that became final and executory by 31 December 1985. 1985 under any of the following categories: 1) if the same is administratively protested within thirty (30) days from the date the taxpayer received the assessment. however. No.O. and should be binding upon the parties thereto. or (2) a deficiency assessment issued by the BIR which has become final and executory. the corresponding interests and penalties shall be condoned. and (2) the demand letter. 17-86. 44 granted the BIR Commissioner or his duly authorized representatives the power to compromise any disputed assessment or delinquent account pending as of 31 December 1985. 44 took effect on 04 September 1986 and remained effective until 31 March 1987. a tax return shall be filed as a basis for computing the amount of compromise to be paid.O. PNOC's tax liability could not be considered a delinquent account since (1) it was not self-assessed. E.65 that internal revenue taxes are selfassessing. and its implementing rules and regulations. 4249 declaring the compromise agreement between BIR and PNOC without force and effect. and in availing of the compromise. 44. No.O. The dissenting opinion contends. whether or not a tax return was filed. 1985 from a taxpayer who failed to pay the same within the time prescribed for its payment arising from (1) a self assessed tax. 44. 44 because its tax liability was not a delinquent account or a disputed assessment as of 31 December 1985. "a tax that the taxpayer himself assesses or computes and pays to the taxing authority. PNOC asserts that the compromise agreement was in accordance with E. No. It is not denied herein that the self-assessing system governs Philippine internal revenue taxes. therefore. that the tax liability of PNOC constitutes a self-assessed tax. The disputed assessments or delinquent accounts that the BIR Commissioner could compromise under E. qualifying for a compromise under E. No. PNOC could not apply for a compromise under E.
82. and finally. No. that PNOC and/or PNB would have voluntarily admitted their tax liabilities. discovers or becomes aware that he had failed to pay a tax due on or before 31 December 1985.67 For instances where the BIR had already issued an assessment against the taxpayer. voluntarily comes forward and admits to the BIR his tax liability. already amounting to P385. who is availing of the compromise under E. and should not be so easily and conveniently ignored and set aside. The compromise payment shall be computed based on the amount reflected in the tax return submitted by the taxpayer himself. respectively. Neither PNOC nor PNB. the duty to conduct selfassessment by filing a tax return that would be used as the basis for computing the amount of compromise to be paid.82 could determine and declare the amount to be used as tax basis. when it is clear and simple that it had been the BIR that conducted the assessment and determined the tax liabilities of PNOC and PNB. No.O. the tax due. Note that where tax liabilities are self-assessed. 44 only if: (1) the assessment had been final and executory on or before 31 December 1985 and. The second paragraph of Section 2(a) of RR No. Any attempt by PNOC and PNB to assess and declare by themselves their tax liabilities had already been overtaken by the BIR's conduct of its audit and investigation and subsequent issuance of the assessments. It would be a contradiction to claim that the tax liabilities of PNOC and PNB are self-assessed and. 44. considered a delinquent account as of said date.69 . 17-86 expressly commands. but it does not do away with the requisite that the tax must be self-assessed in order for the taxpayer to avail of the compromise. They should be controlling in this case. That the BIR-assessed tax liability should be differentiated from a self-assessed one. any deductions therefrom. E. dated 08 August 1986 and 08 October 1986.66 On the other hand. the tax liability could still be compromised under E. conducted self-assessment in this case. he must fill out such a return reflecting therein his own declaration of the taxable amount and computation of the tax due. In case the taxpayer has not previously filed any return. the taxpayer and the withholding agent. and who has not previously filed any return. 17-86 on the basis for computing the amount of compromise payment.961. The said tax assessments. No.580. where the BIR already issued an assessment. regardless of whether he had previously filed a return to reflect such tax. is supported by the provisions of RR No. and applies for a compromise thereof. The phrase "whether or not a tax return was filed" only refers to the compliance by the taxpayer with the obligation to file a return on the dates specified by law. and still imposes upon the taxpayer. the compromise payment shall be computed based on the tax due on the assessment notice. 17-86 thus involves a situation wherein a taxpayer. uncontested and undisputed. the compromise payment shall be computed based on the tax return filed by the taxpayer. Section 2(a)(1) of RR No.O. In fact. BIR-assessed. presented the results of the BIR audit and investigation and the computation of the total amount of tax liabilities of PNOC and PNB.68 or (2) the assessment had been disputed or protested on or before 31 December 1985. There is no showing that in the absence of the tax assessment issued by the BIR against them. both PNOC and PNB were conspicuously silent about their tax liabilities until they were assessed thereon. at the same time. whether or not a tax return was filed. respectively. and would have offered to compromise the same. after conducting a self-assessment. against PNOC and PNB. therefore. as of 15 November 1986. 44 covers self-assessed tax.O.
44. No. having been issued on a later date. not anymore pursuant to E. much less. Although PNOC and PNB have extensively argued their entitlement to compromise under E. 44. then it could not be compromised under E. Neither was the assessment against PNOC an assessment that could have been disputed or protested on or before 31 December 1985. granted the BIR Commissioner the authority to compromise the payment of any internal revenue tax under the following circumstances: (1) there exists a reasonable doubt as to the validity of the claim against the taxpayer. No. No. penalties and other increments thereto. Assessments issued between 01 January to 21 August 1986 could still be compromised by payment of 30% of the basic tax assessed.O. or (2) the financial position of the taxpayer demonstrates a clear inability to pay the assessed tax. demanding payment of the income tax on the interest earnings and/or yields from PNOC's money placements with PNB from 15 October 1984 to 15 October 1986. but pursuant to Section 246 of the NIRC of 1977.. No. 44 specifically refers only to assessments that were delinquent or disputed as of 31 December 1985. as amended. so that they could be compromised under E.O.O. as amended. instead. nonetheless. interest. arbitrary assessments. The BIR had first written to PNOC on 08 August 1986. 31-86 reads: [T]axpayers against whom assessments had been issued from January 1 to August 21. 44 and all BIR issuances to implement said statute should be interpreted so that they are harmonized and consistent with each other. 44. as amended.e. Accordingly. 44. 44. No. does mention different types of assessments that may be compromised under said statute (i. 1986 may settle their tax liabilities by way of compromise under Section 246 of the Tax Code as amended by paying 30% of the basic assessment excluding surcharge. RMO No. No. was more appropriately covered by Revenue Memorandum Circular (RMC) No. 39-86 may not have expressly stated any qualification for these particular types of assessments.83 RMO No. E. issued only on 08 August 1986. 31-86 clarifies the scope of availment of the tax amnesty under E.71 There are substantial differences in circumstances under which compromises may be granted under Section 246 of the NIRC of 1977. Given that PNOC's tax liability did not constitute a delinquent account or a disputed assessment as of 31 December 1985. 44.O. jeopardy assessments. .O. 39-86.O. No. which provides the guidelines for the implementation of E. 4170 and compromise payments on delinquent accounts and disputed assessments under E. could not have been final and executory as of 31 December 1985 so as to constitute a delinquent account. Section 246 of the NIRC of 1977. The above-quoted paragraph supports the position that only assessments that were disputed or that were final and executory by 31 December 1985 could be the subject of a compromise under E. RMC No.O. No. this Court finds that the different types of assessments mentioned in RMO No. neither of them has alleged.O. has presented any evidence to prove that it may compromise its tax liability under Section 246 of the NIRC of 1977.O. E.O. No. 39-86 would still have to qualify as delinquent accounts or disputed assessments as of 31 Dcember 1985. The assessment against PNOC. 31-86. The third paragraph of RMC No. as amended. and E. and tax assessments of doubtful validity).O. This demand letter could be regarded as the first assessment notice against PNOC. 44. No. 44. No. Such an assessment.
73 RMO No. A withholding agent. in such a situation.O. 39-86 expressly allows a withholding agent.O. 44. 39-86 provides that: 2. that the compromise settlement executed between the BIR and PNOC was without legal basis because withholding taxes were not actually taxes that could be compromised. No. dated 16 January 1991. 39-86 was null and void for unduly extending the effectivity of E. since the CTA made a declaration in relation thereto that paragraph 2 of RMO No. 44 still applies to withholding agents – that the withholding tax liability must either be a delinquent account or a disputed assessment as of 31 December 1985 to qualify for compromise settlement. ignorance of the law. Applications filed on or before this date shall be valid even if the payment or payments of the compromise amount shall be made after the said date. 44. however. was also not eligible for compromise settlement under E. had been issued on 08 October 1986 or two months later than PNOC's. E. however. The tax liability of PNB as withholding agent also did not qualify for compromise under E. 44 covers disputed or delinquency cases where the person assessed was himself the taxpayer rather than a mere agent.O. or his belief that he was not required by law to withhold tax. for the same reasons that PNOC's tax liability did not constitute as such.O. who held funds in trust for the Government. Despite already ruling that the tax liabilities of PNOC and PNB could not be compromised under E. No. 39-86 distinguishes between the withholding agent in the foregoing situation from the withholding agent who withheld the tax but failed to remit the amount to the Government. to apply for a compromise settlement of his withholding tax liability under E. subject. Before proceeding any further. as defined under RR No. – Filing of application for compromise settlement under the said law shall be effective only until March 31. 44. Even assuming arguendo that PNOC and/or PNB qualified under E. 44. the general requirement of E. Moreover. No.O. No. their application for compromise was filed beyond the deadline. involve withholding agents. who failed to withhold the required tax because of neglect. therefore. The BIR held PNB personally accountable for its failure to withhold the tax on the interest earnings and/or yields from PNOC's money placements with PNB. 1987. No. No. which also served as its assessment notice. The demand letter against PNB. The right to compromise under these provisions should have been claimed by PNB. but PNB failed to take any action on the said demand letter. The BIR sent a demand letter. for payment of the withholding tax assessed against it. but a penalty for PNB's failure to withhold and for which it was made personally liable. PNB's withholding tax liability could not be considered a delinquent account or a disputed assessment.72 RMO No. 44. may compromise the withholding tax assessment against him precisely because he is being held directly accountable for the tax. 44. all the offers to compromise the withholding tax assessment came from PNOC and PNOC did not claim that it made the offers to compromise on behalf of PNB. Period for availment. addressed directly to PNB.O. 17-86. No. this Court reconsiders the conclusion made by BIR Commissioner Ong in his demand letter.O. this Court still deems it necessary to discuss the finding of the CTA that the compromise agreement had been filed beyond the effectivity of E.O.O. No. Paragraph 2 of RMO No.74 Both situations.84 B. dated 08 October 1986. No. the withholding agent for PNOC. 44. The tax liability of PNB. Yet. C. A withholding agent in the latter situation is the one disqualified from applying for a compromise settlement because he is being made accountable as an agent. to the .
44 and its implementing Revenue Regulations No.O. plus the other matters the BIR personnel would also have to attend to. as early as 25 September 1986. No. 39-86 merely assures the taxpayers that their applications would still be processed and could be approved on a later date. 44 by merely providing that applications for compromise filed until 31 March 1987 are still valid. No. dated 14 October 1986. that the terms of its proposed compromise did not conform to those authorized by E. and that the said letter should be considered as PNOC's application for compromise settlement. so that the offer to set-off such claim against PNOC's tax liability was premature. The interpretation given to a rule or regulation by those charged with its execution is entitled to the greatest weight by the court construing such rule or regulation. Thus. of course. 39-86. 39-86 is valid. RMO No. even if payment of the compromised amount is made on a later date. No. 44. No. the next question that needs to be addressed is whether PNOC had been able to submit an application for compromise on or before 31 March 1987 in compliance thereof. and instead.O. No. No. 44.O. Irrefutably.76 PNOC reiterated the offer in its letter to the BIR. 17-86.O.396.O. Given that paragraph 2 of RMO No. PNOC is claiming that it had already written a letter to the BIR. dated 8 October 198678 and 11 November 1986. No. 44. made the following offer: (2) That PNOC be permitted to set-off its foregoing mentioned tax liability of P304. No.21. 44 can be automatically granted upon mere filing of the application by the taxpayer. It is well-settled in this jurisdiction that administrative authorities are vested with the power to make rules and regulations because it is impracticable for the lawmakers to provide general regulations for various and varying details of management.419. Compromise under E.O. the very last day of effectivity of E. A perusal of PNOC's letter. As it is uncontested that a taxpayer could still file an application for compromise on 31 March 1987. it would be unreasonable to expect the BIR to process and approve the taxpayer's application within the same date considering the volume of applications filed and pending approval. Although the compromise agreement was executed only on 22 June 1987. 44. 44 does not contemplate compromise payment by set-off of a tax liability against a claim for tax refund/credit. Payment. dated 25 September 1986.83 against the tax refund/credit claims of the National Power Corporation (NPC) for specific taxes on fuel oil sold to NPC totaling P335. It cannot be expected that the compromise allowed under E.77 The BIR. the applications would still have to be processed by the BIR to determine compliance with the requirements of E. in its letters to PNOC.O.85 provisions of Executive Order No.79 consistently denied PNOC's offer because the claim for tax refund/credit of NAPOCOR was still under process. E. Furthermore.O. and such interpretation will be followed unless it appears to be clearly unreasonable or arbitrary. particularly paragraph 2 thereof. which tax refunds/credits are actually receivable accounts of our Company from NPC. PNOC did not offer to pay outright 30% of the basic tax assessed against it as required by E. however. 44 may be availed of only in the following circumstances: .450. offering to compromise its tax liability.75 RMO No. would reveal. It does not unduly expand the coverage of E. shall be made by the taxpayer only after his application had been approved and the compromised amount had been determined. does not appear to be unreasonable or arbitrary.259.
Mode of Payment. – Any person. It also benefits the Government by making collection of delinquent accounts and disputed assessments simpler. that NAPOCOR's claim for tax refund/credit is an account receivable of PNOC.766. his Deputy or Assistant as delineated in their respective jurisdictions. First of all. in cash or in manager's check.O. 3.29. Payment of the compromise amount must be made immediately. No. … SEC. E.129. by paying an amount equal to thirty percent (30%) of the basic tax assessed.003. dated 25 September 1986 and 14 October 1986 (set-off of the entire amount of its tax liability against the claim for tax refund/credit of NAPOCOR). No. – Upon acceptance of the proposed compromise.80 PNOC claimed in the same letter that it had previously requested for a compromise under the terms of E. Deferred or staggered payments of compromise amounts over P50. There are stark and substantial differences in the terms of PNOC's offer to compromise in its earlier letters.O. to those in its letter. the mode of payment remains unchanged. the compromise agreement is automatically nullified and the delinquent account reverted to the original amount plus the statutory increments. easier. 44 and its implementing BIR Revenue Memorandum Order No. It was only in its letter.O. but this Court could not find evidence of such previous request. in accordance with E. 44. Second.O. 3986. BIR's collection was contingent on whether the claim for tax refund/credit of NAPOCOR would be subsequently granted. and faster. the amount offered as compromise in complete settlement of the delinquent account shall be paid immediately in cash or manager's certified check. No. PNOC's offer to set-off was obviously made to avoid actual cash-out by the company. and must still be made either in cash or in manager's check. If the Compromise amount is not paid as required herein. 44. other than the bare allegation of PNOC. may settle thru a compromise any delinquent account or disputed assessment which has been due as of December 31. which shall be collected thru the summary and/or judicial processes provided by law. there is no proof.O. 44 and its implementing rules and regulations. Although deferred or staggered payments may be allowed on a case-to-case basis. it would not guarantee collection. No. natural or juridical. that PNOC actually offered to compromise its tax liability in accordance with the terms and circumstances prescribed by E. by stating that: Consequently. No. and convey our preparedness to settle the subject tax assessment liability by payment of the compromise amount of P91. we reiterate our previous request for compromise under E.343. 44 is not for the benefit of the taxpayer alone.O. Third. but more importantly. who can extinguish his tax liability by paying the compromise amount equivalent to 30% of the basic tax.86 SEC.89. 1985. 44 because it would not only delay collection. collection could not be made immediately and would have to wait until the resolution of the claim for tax refund/credit of NAPOCOR. dated 09 June 1987. dated 09 June 1987 (payment of the compromise . No. 6. The offer defeated the purpose of E. A possible dispute between NAPOCOR and PNOC as to the proceeds of the tax refund/credit would only delay collection by the BIR even further.000 may be considered on a case to case basis in accordance with the extant regulations of the Bureau upon approval of the Commissioner of Internal Revenue. representing thirty percent (30%) of the basic tax assessment of P303. Who may avail.
there were continuing negotiations between PNOC and BIR that culminated in the compromise agreement on 22 June 1987. but when the exercise of such functions by the administrative officer is tainted by a failure to abide by the command of the law. wherein the parties presented their offer and counter-offer to the other. Despite this lack of legal support for the execution of the said compromise agreement. Therefore. D. the application for compromise filed by PNOC on 09 June 1987. then it is incumbent on the courts to set matters right. 44 and the deadline for filing applications for compromise under the said statute. dated 11 November 1986. The absence of such evidence herein negates PNOC's claim of actual negotiations with the BIR. after the lapse of the effectivity of E. was still filed way beyond 31 March 1987. would have been very valuable in explaining and supporting BIR Commissioner Tan's decision to accept PNOC's third offer to compromise after denying the previous two. It was only after almost seven months.81 The manner by which BIR Commissioner Tan exercised his discretionary power to enter into a compromise was brought under the scrutiny of the CTA amidst allegations of "grave abuse of discretion and/or whimsical exercise of jurisdiction. The foregoing discussion supports the CTA's conclusion that the compromise agreement between PNOC and the BIR was indeed without legal basis. After the BIR denied the second offer of PNOC to set-off its tax liability against the claim for tax refund/credit of NAPOCOR in a letter. It contends that the authority to compromise is purely discretionary on the BIR Commissioner and the courts cannot interfere with his exercise thereof. No such unlimited power may be . No. The BIR Commissioner's discretionary authority to enter into a compromise agreement is not absolute and the CTA may inquire into allegations of abuse thereof. uncontrolled and unrestrained. 44 and the deadline for filing of applications for compromise under RMO No. The discretionary authority to compromise granted to the BIR Commissioner is never meant to be absolute. No. This letter was already filed beyond 31 March 1987. there is no other evidence of subsequent communication between PNOC and the BIR. Evidence of meetings between PNOC and the BIR. that PNOC again wrote a letter to the BIR. or any other form of communication. both PNOC and PNB failed to present any other proof of the supposed negotiations. even assuming arguendo that the tax liabilities of PNOC and PNB qualify as delinquent accounts or disputed assessments as of 31 December 1985."82 The discretionary power of the BIR Commissioner to enter into compromises cannot be superior over the power of judicial review by the courts.O. this time offering to pay the compromise amount of 30% of the basic tax assessed against. This Court likewise cannot give credence to PNOC's allegation that beginning 25 September 1986. PNB argues that the CTA still had no jurisdiction to review and set aside the compromise agreement. and accepted by then BIR Commissioner Tan on 22 June 1987. the expiration date of the effectivity of E. It is generally true that purely administrative and discretionary functions may not be interfered with by the courts.O.87 amount representing 30% of the basic tax assessed against it). 39-86. Aside from the exchange of letters recounted in the preceding paragraphs. with this Court having the last say on the matter. the date of its first letter to the BIR. making it difficult for this Court to accept that the letter of 09 June 1987 merely reiterated PNOC's offer to compromise in its earlier letters. or on 09 June 1987.
"We are not dealing with the usual compromise agreement perfunctorily submitted to a court and approved as a matter of course. except perhaps in cases of national emergency. ruled that: We are unable to accept petitioner's submissions. finds that there are substantial differences in the factual background of Republic v. Since this Court has already made a determination that the compromise agreement did not qualify under E. Unfortunately for the petitioners in the present case. much less present evidence. disputatiously discussed before the respondent court."86 In addition. A compromise agreement should be respected by the courts as the res judicata between the parties thereto. This Court even stated in the said case that. as amended. The BIR Commissioner would have to exercise his discretion within the parameters set by the law. public policy or morals nor was there any circumstance which had vitiated consent. which was why this Court refused to set it aside. This Court. fair.88 validly granted to any officer of the government. The Sandiganbayan had ample opportunity to examine the validity of the compromise agreement since two years elapsed from the time the agreement was executed up to the time it was judicially approved. Sandiganbayan85 that a compromise agreement cannot be set aside merely because it is too one-sided. The CTA may set aside a compromise agreement that is contrary to law and public policy. as amended.84 Petitioners PNOC and PNB both contend that BIR Commissioner Tan merely exercised his authority to enter into a compromise specially granted by E. Sandiganbayan and the present case. No. 44 or Section 246 of the NIRC of 1977. and equitable. the CTA may correct such abuse if the matter is appealed to them. when he entered into the compromise agreement with PNOC. an action considered by this Court as an implied admission that the agreement was not contrary to law. that BIR Commissioner Tan acted in accordance with Section 246 of the NIRC of 1977. No. in upholding the jurisdiction of the CTA to set aside the compromise agreement. BIR Commissioner Tan's decision to agree to the compromise should have been reviewed in the light of the general authority granted to the BIR Commissioner to compromise taxes under Section 246 of the NIRC of 1977.O. whether under E. There could be no deception or misrepresentation foisted on either the PCGG or the Sandiganbayan. It relies on the decision of this Court in Republic v. Sandiganbayan. as amended. The compromise agreement executed between the Presidential Commission on Good Government (PCGG) and Roberto S. 44.83 In this case. and in case he abuses his discretion. the same cannot be said herein. Its formulation of the issues on CIR and CTA's lack of jurisdiction to disturb a compromise agreement . Then again. petitioners PNOC and PNB failed to allege. at times.O. Benedicto in Republic v. E. 44. The Court of Appeals. though.O.87 The above-mentioned circumstances strongly supported the validity of the compromise agreement in Republic v. the new PCGG Chairman originally prayed for the re-negotiation of the compromise agreement so that it could be more just. PNB also asserts that the CTA had no jurisdiction to set aside a compromise agreement entered into in good faith. The PCGG-Benedicto agreement was thoroughly and. the BIR Commissioner's authority to compromise. No. can only be exercised under certain circumstances specifically identified in said statutes. Sandiganbayan was judicially approved by the Sandiganbayan.
may revoke. since taxes are the lifeblood of the Government and their prompt and certain availability are imperious needs. al. or public policy. et. by entering into the compromise agreement that was bereft of any legal basis. 39 F. 44 and its implementing rules and regulations differently from that of his predecessor. No. morals.O. negligence. 117 SCRA 805. construed E. dated 22 June 1987. which led to Commissioner Ong's revocation of the BIR approval of the compromise agreement. F. Collector of Internal Revenue. Commissioner Ong. A court may still reject a compromise or settlement when it is repugnant to law. it may be subject to closer scrutiny by the courts. there was still a pending motion for reconsideration of the said compromise agreement. had acted well within his powers when he set aside the compromise agreement.S. C1 443. public order. Ramsay. E.92 that an administrative officer. moreover. Such a revocation . No. U. The construction of a statute by those administering it is not binding on their successors if. v. former Commissioner Tan. Savellano. 812 .. Sarah E. 44 and its implementing rules and regulations. 135 cited in page 18 of decision) …. It is evident in this case that the new BIR Commissioner. good customs. 214. the compromise can be attacked and reversed through the judicial process (Meralco Securities Corporation v. Commissioner Ong. it was indubitably shown that the supposed compromise agreement is without legal support. No. The primary duty of the BIR is to collect taxes. In case of arbitrary or capricious exercise by the Commissioner or if the proceedings were fatally defective. To resolve the said motion. aff'd 120 U. the latter becomes satisfied that a different construction should be given.89 presupposes a compromise agreement validly entered into by the CIR and not.O. et al. but also the whole nation. 44 and the NIRC of 1977. BIR Commissioner Tan. thereafter. Tyson v. and none of these situations existed in this case. The compromise. however.91 In the present case. the ultimate beneficiary of the tax revenues collected. Ed. Compromise may be the favored method to settle disputes. would have caused the Government to lose almost P300 million in tax revenues and would have deprived the Government of much needed monetary resources. The Government cannot be estopped from collecting taxes by the mistake. or omission of its agents.88 Although the general rule is that compromises are to be favored. and that compromises entered into in good faith cannot be set aside. 21 Ct. had identified the situations wherein the BIR Commissioner may compromise tax liabilities.89 this rule is not without qualification. 582. Supp. was contrary to public policy. such as the BIR Commissioner. The new BIR Commissioner.O. thereafter. Allegations of good faith and previous execution of the terms of the compromise agreement on the part of PNOC would not be enough for this Court to disregard the demands of law and public policy. A compromise agreement involving taxes would affect not just the taxpayer and the BIR. filed by private respondent Savellano on 24 March 1988. It had been declared by this Court in Hilado v. after finding that the said compromise agreement was without legal basis. but when it involves taxes. repeal or abrogate the acts or previous rulings of his predecessor in office. When he took over from his predecessor.S. as amended.S. he reviewed the compromise agreement and.90 The compromise agreement between the BIR and PNOC was contrary to law having been entered into by BIR Commissioner Tan in excess or in abuse of the authority granted to him by legislation. 30 L. when as in this case. U.. came upon the conclusion that it did not comply with E. dated 22 June 1987.
The CTA and the Court of Appeals declared as final and unappealable. it should have been raised in the court below.O. For an appellate tribunal to consider a legal question. neglect or omission of government officials entrusted with the collection of taxes should not be allowed to bring harm or detriment to the people.95 III Finality of the Tax Assessment A. L-41001. Court of Tax Appeals. 79 SCRA 177. Caballero. the presumption being that they take good care of their personal affairs. Corominas & Co. (Republic vs. Balmaceda vs. The assessment against PNB had become final and unappealable. Upon taxation depends the Government ability to serve the people for whose benefit taxes are collected. Manila Lodge No. The issue on whether the BIR complied with the notice requirements under RR No. November 26. 12-85. As a general rule. though. in the same manner as private persons may be made to suffer individually on account of his own negligence. in another effort to block the collection of the deficiency withholding tax. from the operation of the principle of estoppel.. L-18841. L-23041. 761. for lack of legal basis. 59 SCRA 110. Sy vs. . Court of Tax Appeals. . finds that the significant BIR assessment. Central Bank of the Philippines.. and thus. the Government cannot be estopped from collecting taxes by the mistake. Philippine Rabbit Bus Lines. 28 SCRA 119). Zamora vs. 12-85 is a new issue raised by PNB only before this Court.96 Whether or not the BIR complied with the notice requirements of RR No. L-23272. This is the philosophy behind the government's exception. Republic vs. To safeguard such interest. as far as this case is concerned. this time raises doubts as to the validity of the deficiency withholding tax assessment issued against it on 16 January 1991. 44 and its implementing rules and regulations) and should not give rise to any vested right on PNOC. L-27437. enforceable. dated 22 June 1987. vs. Philippine Long Distance Telephone Company. September 30. April 30. January 27. 1977. since PNB failed to protest said assessment within the 30-day prescribed period. This Court. Inc. 66 SCRA 553. Such a question has not been ventilated before the lower courts. 66 SCRA 553. Rodriguez. Inc. 26 SCRA 620. 36 SCRA 77. This should not hold true to government officials with respect to matters not of their own personal concern. Collector of Internal Revenue. Court of Appeals. vs. 1970.98 B.97 If raised earlier.e. Inc. the assessment against PNB. the matter would have been seriously delved into by the CTA and the Court of Appeals. 12-85 is raised for the first time on appeal and should not be given due course.90 was only proper considering that the former BIR Commissioner's decision to approve the said compromise agreement was based on the erroneous construction of the law (i. . as a general rule. L-41480. 1976.. Inc. and therefore. E. Benevolent and Protective Order of the Elks. 1976. It submits that the BIR failed to comply with the notice requirements set forth in RR No. approval of the compromise agreement and acceptance of the compromise payment by his predecessor cannot estop BIR Commissioner Ong from setting aside the compromise agreement. E.. should be the one issued by the BIR against PNB on 08 October 1986. dated 16 January 1991. No. enforceable. negligence. July 31. Republic vs. 70 SCRA 571. 1969. September 30. or omission of its agents94 because: .93 Furthermore. Auyong Hian vs. and from demanding payment of the deficiency withholding tax from PNB. 1969. 73 SCRA 162. PNB.
– Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. however. At best. and could no longer be disputed.100 The courts may therefore order the enforcement of this assessment. If the compromise agreement is valid. after applying as partial payment thereon the amount previously received by the BIR from PNOC pursuant to the compromise agreement. The issue of prescription. which begins to run after the last day prescribed for filing of the return. if the compromise agreement is void. did not take any action as to the said assessment so that upon the lapse of the period to protest. it would effectively bar the BIR from enforcing the assessment and collecting the assessed tax.99 PNB. as amended. dated 16 January 1991. then the courts can order the BIR to enforce the assessment and collect the assessed tax. on the other hand. when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter. It is already unnecessary and superfluous. provides a three-year period of limitation for the assessment and collection of internal revenue taxes. is not a new assessment against PNB. the BIR demand letter. It had 30 days from receipt to protest the BIR's assessment. and reads: SECTION 1. based on Section 268 of the NIRC of 1977. constitute a useful reference for the courts in computing the balance of PNB's tax liability. had already prescribed. having been issued by the BIR when CTA Case No. Defenses and objections not pleaded. and should be considered waived. The defense of prescription was never raised by petitioners PNOC and PNB. It is the enforcement of this BIR assessment against PNB. Rule 9 of the Rules of Civil Procedure lays down the rule on defenses and objections not pleaded. as amended. dated 08 October 1986. The same demand letter also has no substantial effect or impact on the resolution of the present case. the demand letter.91 The BIR issued on 08 October 1986 an assessment against PNB for its withholding tax liability on the interest earnings and/or yields from PNOC's money placements with the bank. became final and unappealable. The dissenting opinion takes the position that the right of the BIR to assess and collect income tax on the interest earnings and/or yields from PNOC's money placements with PNB. dated 16 January 1991. the withholding tax assessment against it. however. particularly for taxable year 1985. However. was brought up only in the dissenting opinion and was never raised by PNOC and PNB in the proceedings before the BIR nor in any of their pleadings submitted to the CTA and the Court of Appeals. that there is another action . Section 268 of the NIRC of 1977. 4249 was already pending before the CTA. Section 1.101 The dissenting opinion points out that more than four years have elapsed from 25 January 1986 (the last day prescribed by law for PNB to file its withholding tax return for the fourth quarter of 1985) to 16 January 1991 (the date when the alleged final assessment of PNB's tax liability was issued). IV Prescription A. that is in issue in the instant case. dated 8 October 1986. As has been previously discussed by this Court. It only demanded from PNB the payment of the balance of the withholding tax assessed against it on 08 October 1986.
In such cases. the court shall dismiss the claim. the three-year prescriptive period shall be counted from the date the return was actually filed. as amended. being a matter of defense. It has been consistently held in earlier tax cases that the defense of prescription of the period for the assessment and collection of tax liabilities shall be deemed waived when such defense was not properly pleaded and the facts alleged and evidences submitted by the parties were not sufficient to support a finding by this Court on the matter. Granting that this Court can take cognizance of the defense of prescription. and no return was made part of the records of the present case. and when such prescriptive period should begin to run and when it had lapsed. The exception in same provision cannot be applied herein because the pleadings and the evidence on record do not sufficiently show that the action is barred by prescription. for the sake of argument. provides for a different period of limitation for assessment and collection of taxes in case of false or fraudulent return or for failure to file a return. Collector of Internal Revenue. In making its conclusion that the assessment and collection in this case had prescribed. Assuming. B.92 pending between the parties for the same cause. (2) PNB reported in the said returns the interest earnings of PNOC's money placements with the bank. The general rule enunciated in the above-quoted provision governs the present case. as amended. which was 25 January 1986. would have been the best evidence to prove actual filing. duly received by the BIR. and supported by evidences submitted by the parties themselves before the BIR and the courts below. argued. following the dictates of Section 268 of the NIRC of 1977. and this requires him to positively establish the date when the period started running and when the same was fully accomplished. or that the action is barred by prior judgment or by the statute of limitations. as amended. it finds that the assessment against PNB for its withholding tax liability for taxable year 1985 and the collection of the tax assessed therein were accomplished within the prescribed periods for assessment and collection under the NIRC of 1977. that is. not pleaded in a motion to dismiss or in the answer. fraud. that this Court can give due course to the defense of prescription. It is not safe to adopt the first and second assumptions in this case considering that Section 269 of the NIRC of 1977. is deemed waived. the pleadings did not refer to any return. the defense of prescription. This Court could not make a proper ruling on the matter of prescription on the mere basis of assumptions. Yet. or omission within which to make an assessment. imposes the burden on the taxpayer to prove that the full period of the limitation has expired.104 It is also not safe to accept the third assumption since there can be a possibility that PNB filed the withholding tax return later than the prescribed date. These facts are relevant in determining which prescriptive period should apply. this Court finds that the assessment of the withholding tax liability against PNOC and collection of the tax assessed were done within the prescriptive period. in which case. the date of filing and the contents thereof.105 PNB's withholding tax returns for taxable year 1985.103 this Court pronounced that prescription. . the BIR is given 10 years after discovery of the falsity. the dissenting opinion took liberties to assume the following facts even in the absence of allegations and evidences to the effect that: (1) PNB filed returns for its withholding tax obligations for taxable year 1985. such an issue should have been properly raised.102 In Querol v. and (3) that the returns were filed on or before the prescribed date.
in view of the foregoing. provides that when an assessment is issued within the prescribed period provided in Section 268. – (c) Any internal revenue tax which has been assessed within the period of limitation above-prescribed may be collected by distraint or levy or by a proceeding in court within three years following the assessment of the tax. under Section 269(c). . or where the assessment is appealed to the CTA.93 If this Court adopts the assumption made by the dissenting opinion that PNB filed its withholding tax return for the last quarter of 1985 on 25 January 1986. internal revenue taxes shall be assessed within three years after the last day prescribed by law for the filing of the return. on the other hand.73. The original assessment against PNB was issued as early as 08 October 1986. The prayer in the Amended Petition for Review of private respondent Savellano reads: WHEREFORE. the collecting government agency. because the Petition for Review was filed by private respondent Savellano. and PNB. should be read in conjunction with one another. 1987 be reviewed and declared null and void. The BIR.785. A judicial action for the collection of a tax may be initiated by the filing of a complaint with the proper regular trial court. 15% of the tax liability collected under clause (a) hereof. and PNB. the total tax liability of P387. to collect the tax assessed either by distraint. Therefore. counted from the date of the assessment. The filing. so that the BIR had until 07 October 1989 to enforce it and to collect the tax assessed. as amended: SEC. reckoned from the date of the assessment. Section 269(c). then the BIR had until 24 January 1989 to assess PNB. Exceptions as to period of limitation of assessment and collection of taxes. by private respondent Savellano of his Amended Petition for Review before the CTA on 02 July 1988 already constituted a judicial action for collection of the tax assessed which stops the running of the three-year prescriptive period for collection thereof. as amended. petitioner respectfully prays that the compromise agreement of June 22. Section 268 requires that assessment be made within three years from the last day prescribed by law for the filing of the return. by filing an answer to the taxpayer's petition for review wherein payment of the tax is prayed for. Sections 268 and 269(c) of the NIRC of 1977. the BIR is given another three-year period. and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period… SEC. initially found themselves on the same side. as informer's reward. against the BIR. and b) respondent Commissioner to pay unto petitioner. In the case of PNB. an assessment was issued against it by the BIR on 08 October 1986. – Except as provided in the succeeding section. the taxpayer. PNOC. levy or court action. PNOC. Period of limitation upon assessment and collection. however. the informer. when an assessment is timely issued in accordance with Section 268. plus interests from 31 October 1986.106 The present case is unique.987. however. and that this Court directs: a) respondent Commissioner to enforce and collect and respondents PNB and/or PNOC to pay in a joint and several capacity. the withholding agent. well-within the three-year prescriptive period for making the assessment as prescribed by the following provisions of the NIRC of 1977. within which to collect the tax assessed. 269. 268. the BIR has three years.
the withholding agent. that CTA Case No. 4249.107 (Underscoring ours. the Court of Appeals and this Court. would not prevent the suspension of the running of the prescriptive period for collection of the tax. then. not the BIR. suspends the running of the said prescriptive period. Whether the filing of the Amended Petition for Review by private respondent Savellano entirely stops or merely suspends the running of the prescriptive period for collection of the tax. V Additional Informer's Reward Private respondent Savellano is entitled to additional informer's reward since the BIR had already collected the full amount of the tax assessment against PNB. Consequently. judicial action for collection of the tax had been initiated and the running of the prescriptive period for collection of the said tax was terminated. the taxpayer. upon the filing of the Amended Petition for Review by private respondent Savellano. since this Court already finds that the compromise agreement is without force and effect and hereby orders the enforcement of the assessment against PNB. and (2) PNB and/or PNOC to pay the tax – making CTA Case No. 4249. and for 60 days thereafter. To rule otherwise would be to violate the judicial policy of avoiding multiplicity of suits and the rule on lis pendens. However. prayed for (1) the CTA to direct the BIR Commissioner to enforce and collect the tax. In case the CTA grants the Petition and the prayer therein. instead of PNOC. Ltd. legally prevents the BIR Commissioner from instituting an action for collection of the same tax liabilities assessed against PNOC and PNB in the CTA or the regular trial courts.109 and Protector's Services. pending review by the Court of Appeals. it had been premature for the BIR Commissioner to issue a writ of garnishment against PNB on 12 August 1991 and for the Central Bank of the Philippines to debit the account of PNB on 02 September 1992 pursuant to the said writ. as amended. Supposing that CTA Case No. v. That the Amended Petition for Review was filed by the informer and not the taxpayer. Court of Appeals. Inc. because the case was by then. the informer.) Private respondent Savellano. . or PNB. CTA Case No. 4249 was initiated by private respondent Savellano. the ultimate result would be the collection of the tax assessed. the running of the prescriptive period to collect deficiency taxes shall be suspended for the period during which the BIR Commissioner is prohibited from beginning a distraint or levy or instituting a proceeding in court.108 Just as in the cases of Republic v. as what has happened in the present case. 4249 is not a collection case which stops the running of the prescriptive period for the collection of the tax..94 Other equitable reliefs under the premises are likewise prayed for. in his Amended Petition for Review in CTA Case No. at the very least.110 this Court declares herein that the pendency of the present case before the CTA. should not affect the nature of the case as a judicial action for collection. Ker & Co. 4249 a collection case. and that the prayer for the enforcement of the tax assessment and payment of the tax was also made by the informer. What is controlling herein is the fact that the BIR Commissioner cannot file a judicial action in any other court for the collection of the tax because such a case would necessarily involve the same parties and involve the same issues already being litigated before the CTA in CTA Case No. 4249. Under Section 271 of the NIRC of 1977. The three-year prescriptive period for collection of the tax shall commence to run only after the promulgation of the decision of this Court in which the issues of the present case are resolved with finality. Once again. any issue or controversy arising from the premature garnishment of PNB's account and collection of the tax by the BIR has become moot and academic at this point.
SP No. and is without force and effect. and (4) Private respondent Savellano shall be paid the remainder of his informer's reward.112 Pursuant to the writ of garnishment issued by the BIR. Applicable herein is another well-known maxim in statutory construction – Ubi lex non distinguit nec nos distinguere debemos – when the law does not distinguish. fails to state any legal basis for its argument. equivalent to 15% of the deficiency withholding tax ordered collected herein.958. granted a reward to an informer equivalent to 15% of the revenues. The BIR Commissioner is ordered to enforce the said assessment and collect the amount of P294. any fine or penalty imposed and collected. plus. in turn.R. .111 The provision was clear and uncomplicated – an informer was entitled to a reward of 15% of the total amount actually recovered or collected by the BIR based on his information.958.958.R. (2)Paragraph 2 of RMO No. dated 22 June 1987. as amended.R. WHEREFORE. in view of the foregoing. the Petitions of PNOC and PNB in G. or fees recovered. surcharges. No. Section 316(1) of the NIRC of 1977. we should not distinguish. and credited the same amount to the demand deposit account of the Treasurer of the Republic of the Philippines.450.73 to the account of the BIR. 109976 and G. The provision did not make any distinction as to the manner the tax liability was collected – whether it was through voluntary payment by the taxpayer or through garnishment of the taxpayer's property. 4249. PNOC.73 from PNB through the execution of the writ of garnishment over PNB's deposit with the Central Bank. The Treasurer of the Republic. 39-86 remains a valid provision of the regulation. the Central Bank issued a debit advice against the demand deposit account of PNB with the Central Bank for the amount of P294.767. with modifications. which affirmed the decision of the CTA in CTA Case No. SP No. 29526. respectively. No. 29583 and CA-G. to wit: (1) The compromise agreement between PNOC and the BIR. dated 22 June 1987. however. is declared void for being contrary to law and public policy. then private respondent Savellano should be awarded 15% thereof as reward since the said collection could still be traced to the information he had given.95 PNOC insists that private respondent Savellano is not entitled to additional informer's reward because there was no voluntary payment of the withholding tax liability.243. dated 08 October 1986.73.450. or P 44. are hereby DENIED.61.958.73. 112800. the balance of tax assessed after crediting the previous payment made by PNOC pursuant to the compromise agreement. SO ORDERED. had become final and unappealable.450. This Court AFFIRMS the assailed Decisions of the Court of Appeals in CA-G.450. already issued a journal voucher transferring P294. Since the BIR had already collected P294.R. (3)The withholding tax assessment against PNB.
August 26. 454unconstitutional and void.If this court should be of the opinion that section 1 of Commonwealth Act No. taking into accountreasonable depreciation to befixed by the Commission at thetime of it acquisition. 146.An order be issued directing the secretary of the Public Service Commission to certifyforth with to this court the records of all proceedings in the case. that the certificate shall valid only for a definite period of time. a decision should be rendered declaring that the provisions are not applicable to valid and subsisting certificates issued prior to June 8. and likewise. This was granted by the Public Service Commission with the following conditions ( which are written in a beautiful language called Spanish so you may refer to theoriginal text in the case if there is a That the certificates of authorization issued toPangasinan Transport would be valid only for a period of 25years counted from the date of promulgation. less reasonable depreciation.For the past 20 years.Section 15 of Commonwealth ActNo... ISSUE W O N t h e c o n d i t i o n s s e t b y t h e Public Service Commission were v a l i d ( a s m a n d a t e d b y Commonwealth Act 146) HELD YES but a remand of the case was Administrative Law A2010Dean Carlota ordered Reasoning . 1939 .October 9. 1939. 1939 – PTI did not agreewith the conditions set by PSC so itfiled a motion for reconsiderationwhich was denied by the latter. and that the violation of any of these conditions shall produce the immediate cancellation of the certificate without the necessity of any express action on the part of the Commission. 1939 – PTI applied for an authorization to operate ten additional Brockway trucks on theground that they were needed to comply with the terms and conditions of its existing certificates and as a result of the application of the Eight Hour Labor Law.After hearing. 454 states that “no public service shall operate in the Philippines without possessing a valid and subsisting certificate from the Public Service Commission” and that “the Commission may prescribe as a condition for the issuance of the certificate provided in the preceding paragraph that the service can be acquired by the Commonwealth of the Philippines or by any instrumentality thereof upon payment of the cost price of its useful equipment.. Pangasinan Transport has been engaged in the business of transporting in Pangasinan. the Court should render a decisiondeclaring section 1 of Commonwealth Act No. 1940 NATURE Petition for review on certiorari FACTS .96 PANGASINAN TRANSPORTATIONINC.That the company may be acquired by the PhilippineCommonwealth with properpayment of the cost price of its equipment. 454 is constitutional.November 20. June 26..The presentpetition for a writ of certiorari was instituted in this court praying that:. v PUBLIC SERVICECOMMISSION 70 PHIL 221LAUREL.. Tarlac and Nueva Ecija through TPU buses in accordance with the terms and conditions of the certificates of public convenience issued by the Public Utility Commission (later called Public Service Commission). as amended by section 1 of Commonwealth Act No.
in section 8 of Article XIII. certificate." the National Assembly meant to give effect to this constitutional mandate..Commonwealth Acts Nos. that "no franchise or right s h a l l b e g r a n t e d t o a n y i n d i v i d u a l . Thus the period for validity is established in relation top romoting and safeguarding public interest.T h e p e t i t i o n e r i s m i s t a k e n i n t h e suggestion that. the date when C o m m o n w e a l t h A c t N o .. was approved. there had been neither notice nor opportunity g i v e n t h e p e t i t i o n e r t o b e heard or present evidence.t h a t t h e P u b l i c S e r v i c e Commission may prescribe as a condition for the issuance of a c e r t i f i c a t e t h a t i t " s h a l l b e valid only for a definite period of time" and. therefore.P T I assails the condition that the certificates will be valid only for a p e r i o d o f t i m e . i n section 15 of Commonwealth A c t N o .On the matter of limitation to t w e n t y f i v e ( 2 5 ) y e a r s o f t h e life of its certificates of public convenience. alteration. b e i n g a p r o p e r e x e r c i s e b y t h e state of its police p o w e r . Disposition The decision appealed from is hereby reversed and the case r e m a n d e d t o t h e P u b l i c S e r v i c e Commission for further proceedings i n . in section 16 (a)that "no such certificates shall be issued for a period of more than fifty yea rs. a m e n d a t o r y o f s e c t i o n 1 5 o f Commonwealth Act No. The Constitution of the Philippines provided.. a r e a p p l i c a b l e n o t o n l y t o t h o s e p u b l i c u t i l i t i e s c o m i n g i n t o e x i s t e n c e a f t e r i t s p a s s a g e . 146 and454 are not only the organic acts of t h e P u b l i c S e r v i c e C o m m i s s i o n b u t a r e " a p a r t o f t h e c h a r t e r o f e v e r y utility company operating or seeking t o o p e r a t e a f r a n c h i s e " i n t h e Philippines. or corporation. firm.. simply because its existing certificates had been granted before June 8. that no franchise. or any other form of authorization for the operation of a public utility shall be "for a longer period than fifty years. involving the use discretion. t r a n s f e r t o p u b l i c ownership utilities and other private e n t e r p r i s e s t o b e o p e r a t e d b y t h e Government. i n a d d i t i o n . t h e promotion of "public interests i n a p r o p e r a n d s u i t a b l e manner. a s a m e n d e d b y Commonwealth Act No. 146.. u p o n p a y m e n t o f j u s t c o m p e n s a t i o n . a n d . 1939. T h i s s h o u l d b e construed with the mandate that the Public Service Commission should issue certifications with the p u b l i c interest in mind.The condition that the Commission can acquire PTI is a restatement of the constitutional provision that the “State may. 1 4 6 . b u t likewise to those already establishedand in operation.". in the interest of nationalwelfare and defense. is t h e a d m i n i s t r a t i v e f u n c t i o n .. among other things. 4 5 4 .All that has been delegated to the Commission. establish and operate industries and means o f transportation and communication . except under the condition that it shall be subject to amendment. or repeal by t h e N a t i o n a l A s s e m b l y w h e n t h e public interest so requires.W h e n i t w a s o r d a i n e d .Statutes enacted for the regulation o f p u b l i c u t i l i t i e s ." This is in a c c o r d a n c e w i t h a l l o t h e r p r e v i o u s laws (such as the Jones Law and the Philippine Bill) on the matter.".”. 454.H o w e v e r t h e C o u r t o r d e r e d a remand of the case.97 . Section 8 of Article XIII of theConstitution provides.The petitioner's application here was for an increase of it s e q u i p m e n t t o e n a b l e i t t o comply with the conditions of i t s c e r t i f i c a t e s o f p u b l i c convenience. to c a r r y o u t t h e w i l l o f t h e N a t i o n a l Assembly having in v i e w . it must be deemed to have t h e r i g h t o f h o l d i n g t h e m i n perpetuity.
petitioner. halls." granted senior citizens several privileges. respondent. hotels and similar lodging establishments.: In cases of conflict between the law and the rules and regulations implementing the law. respondent filed its 1995 Corporate Annual Income Tax Return declaring a net loss position with nil income tax liability.00 with the Appellate Division of the Bureau of Internal Revenue—because its net losses for the year 1995 prevented it from benefiting from the treatment of sales .3 In 1995.2 In compliance with the law.1 The law also provided that the private establishments giving the discount to senior citizens may claim the cost as tax credit. a corporation engaged in the business of retailing pharmaceutical products under the business style of "Mercury Drug. respondent filed a claim for tax refund or credit in the amount of PhP 259. 2006 COMMISSIONER OF INTERNAL REVENUE. which discount shall be deducted by the said establishments from their gross income for income tax purposes and from their gross sales for valueadded tax or other percentage tax purposes. the law shall always prevail. DECISION VELASCO.).4 Respondent treated this discount as a deduction from its gross income in compliance with Revenue Regulations No. which implemented R.5 On April 15. J. No. one of which was obtaining a 20 percent discount from all establishments relative to the use of transportation services.6 On December 27. 148083 July 21." granted the 20 percent sales discount to qualified senior citizens purchasing their medicines in compliance with R. 7432. they will be struck down. otherwise known as "An Act to Maximize the Contribution of Senior Citizens to Nation Building.98 a c c o r d a n c e w i t h l a w a n d t h i s decision. 7432. Should Revenue Regulations deviate from the law they seek to implement. BICOLANDIA DRUG CORPORATION (Formerly known as ELMAS DRUG CO.R. 1996. Grant Benefits and Special Privileges and For Other Purposes. carnivals and other similar places of culture. without any pronouncement regarding costs .A. restaurants and recreation centers and purchase of medicines anywhere in the country. hotels and similar lodging establishments. No. vs.A. No. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. respondent Bicolandia Drug Corporation. restaurants. Republic Act No. 1996. The Facts In 1992. 2-94. which defined "tax credit" as follows: Tax Credit – refers to the amount representing the 20% discount granted to a qualified senior citizen by all establishments relative to their utilization of transportation services. 7432.659. circuses. 2-94. JR. the Bureau of Internal Revenue issued Revenue Regulations No.. leisure and amusement.
which was supposed to implement R. Redefining "Tax Credit" as "Tax Deduction" The problem stems from the issuance of Revenue Regulations No.321. thus reducing the refund to be given. No. Case No.A.A. 2-94. 7432 provided that discounts granted to senior citizens may be claimed as tax credit.9 Respondent argued that since Section 4 of R. 7432 would prevail over Section 2(i) of Revenue Regulations No. 2-94. instead of a deduction from gross income or gross sales. Instead. the present appeal is hereby GRANTED and the Decision of the Court of Tax Appeals in C. the Court of Appeals modified the decision of the Court of Tax Appeals as the law provided for a tax credit.52."12 Ruling of the Court of Appeals On appeal. No. which referred to the tax credit as the amount representing the 20 percent discount that "shall be deducted by the said establishments from their gross income for income tax purposes and from their gross sales for valueadded tax or other percentage tax purposes. Section 2(i) of Revenue Regulations No. After examining the evidence on record. with the issuance of the necessary rules and regulations to carry out the objectives of the law.A.A. It ruled that "Respondent is hereby ORDERED to REFUND in favor of Petitioner the amount of P236. whose definition of "tax credit" deviated from the intendment of the law. 2-94 is valid since the law tasked the Department of Finance.321.52. the petitioner is hereby ORDERED to issue a tax credit certificate in favor of the respondent in the amount of P 236.14 The Court's Ruling The petition is not meritorious. and the radical departure it made when it defined . No pronouncement as to costs. void and without effect for being inconsistent with the statute it implements. not a tax refund.T. 2-94. representing overpaid income tax for the year 1995. 7432 may be claimed as a tax credit."10 is illegal. the Court of Tax Appeals reduced the claimed 20 percent sales discount. No. 7432. 1998. Petitioner maintained that Revenue Regulations No.A. No. respondent appealed to the Court of Tax Appeals in order to toll the running of two (2)-year prescriptive period to file a claim for refund pursuant to Section 230 of the Tax Code then. partially granted the respondent's claim for a refund. premises considered.11 Ruling of the Court of Tax Appeals The Court of Tax Appeals declared that the provisions of R.13 The Issue Petitioner now argues that the Court of Appeals erred in holding that the 20 percent sales discount granted to qualified senior citizens by the respondent pursuant to R.99 discounts as a deduction from gross sales during the said taxable year.8 On April 6. among other government offices. 5599 is hereby MODIFIED in the sense that the award of tax refund is ANNULLED and SET ASIDE. The fallo of the Decision states: WHEREFORE.7 It alleged that the petitioner Commissioner of Internal Revenue erred in treating the 20 percent sales discount given to senior citizens as a deduction from its gross income for income tax purposes or other percentage tax purposes rather than as a tax credit. and as a result.
the "tax credit" that would be granted to establishments that give 20 percent discount to senior citizens. Under Revenue Regulations No. 2-94, the tax credit is "the amount representing the 20 percent discount granted to a qualified senior citizen by all establishments relative to their utilization of transportation services, hotels and similar lodging establishments, restaurants, drugstores, recreation centers, theaters, cinema houses, concert halls, circuses, carnivals and other similar places of culture, leisure and amusement, which discount shall be deducted by the said establishments from their gross income for income tax purposes and from their gross sales for value-added tax or other percentage tax purposes."15 It equated "tax credit" with "tax deduction," contrary to the definition in Black's Law Dictionary, which defined tax credit as: An amount subtracted from an individual's or entity's tax liability to arrive at the total tax liability. A tax credit reduces the taxpayer's liability x x x, compared to a deduction which reduces taxable income upon which the tax liability is calculated. A credit differs from deduction to the extent that the former is subtracted from the tax while the latter is subtracted from income before the tax is computed.16 The interpretation of an administrative government agency, which is tasked to implement the statute, is accorded great respect and ordinarily controls the construction of the courts.17 Be that as it may, the definition laid down in the questioned Revenue Regulations can still be subjected to scrutiny. Courts will not hesitate to set aside an executive interpretation when it is clearly erroneous. There is no need for interpretation when there is no ambiguity in the rule, or when the language or words used are clear and plain or readily understandable to an ordinary reader.18 The definition of the term "tax credit" is plain and clear, and the attempt of Revenue Regulations No. 2-94 to define it differently is the root of the conflict. Tax Credit is not Tax Refund Petitioner argues that the tax credit is in the nature of a tax refund and should be treated as a return for tax payments erroneously or excessively assessed against a taxpayer, in line with Section 204(c) of Republic Act No. 8424, or the National Internal Revenue Code of 1997. Petitioner claims that there should first be payment of the tax before the tax credit can be claimed. However, in the National Internal Revenue Code, we see at least one instance where this is not the case. Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax.19 It speaks of a tax credit for tax due, so payment of the tax has not yet been made in that particular example. The Court of Appeals expressly recognized the differences between a "tax credit" and a "tax refund," and stated that the same are not synonymous with each other, which is why it modified the ruling of the Court of Tax Appeals. Revenue Regulations No. 2-94 vs. R.A. No. 7432 and R.A. No. 7432 vs. the National Internal Revenue Code Petitioner contends that since R.A. No. 7432 used the word "may," the availability of the tax credit to private establishments is only permissive and not absolute or mandatory. From that starting point, petitioner further argues that the definition of the term "tax credit" in Revenue Regulations No. 2-94 was validly issued under the authority granted by the law to the Department of Finance to formulate the needed guidelines. It further explained that Revenue Regulations No. 2-94 can be harmonized with R.A No. 7432, such that the definition of the term "tax credit" in Revenue Regulations No. 2-94 is
controlling. It claims that to do otherwise would result in Section 4(a) of R.A. No. 7432 impliedly repealing Section 204 (c) of the National Internal Revenue Code. These arguments must also fail. Revenue Regulations No. 2-94 is still subordinate to R.A. No. 7432, and in cases of conflict, the implementing rule will not prevail over the law it seeks to implement. While seemingly conflicting laws must be harmonized as far as practicable, in this particular case, the conflict cannot be resolved in the manner the petitioner wishes. There is a great divide separating the idea of "tax credit" and "tax deduction," as seen in the definition in Black's Law Dictionary. The claimed absurdity of Section 4(a) of R.A. No. 7432 impliedly repealing Section 204(c) of the National Internal Revenue Code could only come about if it is accepted that a tax credit is akin to a tax refund wherein payment of taxes must be made in order for it to be claimed. But as shown in Section 112(a) of the National Internal Revenue Code, it is not always necessary for payment to be made for a tax credit to be available. Looking into R.A. No. 7432 Finally, petitioner argues that should private establishments, which count respondent in their number, be allowed to claim tax credits for discounts given to senior citizens, they would be earning and not just be reimbursed for the discounts given. It cannot be denied that R.A. No. 7432 has a laudable goal. Moreover, it cannot be argued that it was the intent of lawmakers for private establishments to be the primary beneficiaries of the law. However, while the purpose of the law to benefit senior citizens is praiseworthy, the concerns of the affected private establishments were also considered by the lawmakers. As in other cases wherein private property is taken by the State for public use, there must be just compensation. In this particular case, it took the form of the tax credit granted to private establishments, purposely chosen by the lawmakers. In the similar case of Commissioner of Internal Revenue v. Central Luzon Drug Corporation,20 scrutinizing the deliberations of the Bicameral Conference Committee Meeting on Social Justice on February 5, 1992 which finalized R.A. No. 7432, the discussions of the lawmakers clearly showed the intent that the cost of the 20 percent discount may be claimed by the private establishments as a tax credit. An excerpt from the deliberations is as follows: SEN. ANGARA. In the case of private hospitals they got the grant of 15% discount, provided that, the private hospitals can claim the expense as a tax credit. REP. AQUINO. Yah could be allowed as deductions in the preparation of (inaudible) income. SEN. ANGARA. I-tax credit na lang natin para walang cash-out? REP. AQUINO. Oo, tax credit. Tama. Okay. Hospitals ba o lahat ng establishments na covered. THE CHAIRMAN. Sa kuwan lang yon, as private hospitals lang. REP. AQUINO. Ano ba yung establishments na covered? SEN. ANGARA. Restaurant, lodging houses, recreation centers. REP. AQUINO. All establishments covered siguro?
SEN. ANGARA. From all establishments. Alisin na natin `yung kuwan kung ganon. Can we go back to Section 4 ha? REP. AQUINO. Oho. SEN. ANGARA. Letter A. To capture that thought, we'll say the grant of 20% discount from all establishments et cetera, et cetera, provided that said establishments may claim the cost as a tax credit. Ganon ba `yon? REP. AQUINO. Yah. SEN. ANGARA. Dahil kung government, they don't need to claim it. THE CHAIRMAN. Tax credit. SEN. ANGARA. As a tax credit [rather] than a kuwan – deduction, Okay.21 It is clear that the lawmakers intended the grant of a tax credit to complying private establishments like the respondent. If the private establishments appear to benefit more from the tax credit than originally intended, it is not for petitioner to say that they shouldn't. The tax credit may actually have provided greater incentive for the private establishments to comply with R.A. No. 7432, or quicker relief from the cut into profits of these businesses. Revenue Regulations No. 2-94 Null and Void From the above discussion, it must be concluded that Revenue Regulations No. 2-94 is null and void for failing to conform to the law it sought to implement. In case of discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of the basic law.22 Revenue Regulations No. 2-94 being null and void, it must be ruled then that under R.A. No. 7432, which was effective at the time, respondent is entitled to its claim of a tax credit, and the ruling of the Court of Appeals must be affirmed. But even as this particular case is decided in this manner, it must be noted that the concerns of the petitioner regarding tax credits granted to private establishments giving discounts to senior citizens have been addressed. R.A. No. 7432 has been amended by Republic Act No. 9257, the "Expanded Senior Citizens Act of 2003." In this, the term "tax credit" is no longer used. The 20 percent discount granted by hotels and similar lodging establishments, restaurants and recreation centers, and in the purchase of medicines in all establishments for the exclusive use and enjoyment of senior citizens is treated in the following manner: The establishment may claim the discounts granted under (a), (f), (g) and (h) as tax deduction based on the net cost of the goods sold or services rendered: Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted. Provided, further, that the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended.23 This time around, there is no conflict between the law and the implementing Revenue Regulations. Under Revenue Regulations No. 4-2006, "(o)nly the actual amount of the
They may also consult the Secretary of Justice or the Solicitor General for their opinions on the drafted rules. There is no pronouncement as to costs. which may be more in consonance with the principles of taxation.A. that they assume the roles of lawmakers. even to the extent of reviewing the minutes of the deliberations of Congress about its intent when it drafted the law. for which reason the petition must fail."24 Under the new law. for their regulations are always subordinate to law. 9257.J. net of value added tax. Carpio-Morales. only deductions.103 discount granted or a sales discount not exceeding 20% of the gross selling price can be deducted from the gross income. No. but as it was R. for VAT or other percentage tax purposes. Administrative rules. No. Chairman. those drafting the regulations should study well the laws their rules will implement. the Petition is hereby DENIED. regulations and orders have the efficacy and force of law so long as they do not contravene any statute or the Constitution. there is no tax credit to speak of. for income tax purposes.. Petitioner can find some vindication in the amendment made to R. concur.A. No. 7432 in force at the time this case arose.A. 7432 by R. J. this law controls the result in this particular case. SO ORDERED. . It is wellsettled that a regulation should not conflict with the law it implements. and from gross sales or gross receipts of the business enterprise concerned.25 It is then the duty of the agencies to ensure that their rules do not deviate from or amend acts of Congress. Tinga. This case should remind all heads of executive agencies which are given the power to promulgate rules and regulations. if applicable. The assailed Decision of the Court of Appeals is AFFIRMED. Quisumbing. Thus. WHEREFORE.
Corona.J.versus - Austria-Martinez. G. . Petitioner. Callejo. No.104 EN BANC DEPARTMENT OF AGRARIAN REFORM.R. Carpio Morales. C. Ynares-Santiago. . Sandoval-Gutierrez. Carpio. Quisumbing.. Panganiban. 162070 Present: Davide.. represented by SECRETARY JOSE MARI B. PONCE (OIC). Sr. Puno.
...A. On December 21. inherited by respondents which has been devoted exclusively to cow and calf breeding.: This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the Court of Appeals.O.. On October 26. poultry and swine. took effect.. SUTTON..) No. inspected respondents’ land and found that it was devoted solely to cattle raising and breeding. 9.. SUTTON. On December 4. ELLA T. 1987. series of 1993... dated September 19. The case at bar involves a land in Aroroy. 1988. Respondents. It included in its coverage farms used for raising livestock.x DECISION PUNO. Republic Act (R. 1990.. in an en banc decision in the case of Luz Farms v. 6657. .. SUTTON-SOLIMAN and HARRY T.. DELIA T. respondents made a voluntary offer to sell (VOS) their landholdings to petitioner DAR to avail of certain incentives under the law.. Secretary of DAR.. Masbate.... Chico-Nazario and Garcia. On June 10. J.. null and void for being violative of the Constitution... respectively. Masbate. JJ.105 Azcuna. this Court ruled that lands devoted to livestock and poultryraising are not included in the definition of agricultural land. October 19. Hence.... 2003 and February 4..) No. 2004. Tinga. pursuant to the then existing agrarian reform program of the government.... we declared as unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian reform. the Municipal Agrarian Reform Officer of Aroroy.. 1992....... a new agrarian law. respondents filed with petitioner DAR a formal request to withdraw their VOS as their landholding was devoted exclusively to cattleraising and thus exempted from the coverage of the CARL. which declared DAR Administrative Order (A. also known as the Comprehensive Agrarian Reform Law (CARL) of 1988. He recommended to the DAR Secretary that it be exempted from the coverage of the CARL. 2005 Promulgated: x . In view of the Luz Farms ruling.
No. 9. and (2) the constitutionality of DAR A. and a ratio of 1. s. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department of Agrarian Reform’s ruling that petitioners’ landholding is covered by the agrarian reform program of the government is REVERSED and SET ASIDE. petitioner exempted 1. the A. It declared DAR A. s. No. the issue on the constitutionality of the assailed A. then DAR Secretary Ernesto D. 1993. Applying the retention limits outlined in the DAR A. 1993. premises considered. The dispositive portion reads: WHEREFORE. 1993. 9. 9. On appeal. 1994. fixed the following retention limits. It ruled that DAR A. Garilao issued an Order  partially granting the application of respondents for exemption from the coverage of CARL. No. . 1988 shall be excluded from the coverage of the CARL.O. 1995. 1 hectare of land per 1 head of animal shall be retained by the landowner). SO ORDERED. the Court of Appeals ruled in favor of the respondents. Respondents moved for reconsideration. 9. respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal of their VOS as. 2001. which provided for a ratio between land and livestock in determining the land area qualified for exclusion from the CARL.5635 hectares for infrastructure. In determining the area of land to be excluded. viz: 1:1 animal-land ratio (i. However. No.e. On October 9. 09. which provided that only portions of private agricultural lands used for the raising of livestock. They contend that their entire landholding should be exempted as it is devoted exclusively to cattle-raising. poultry and swine as of June 15. 1993. the Office of the President affirmed the impugned Order of petitioner DAR. and a maximum of 102. their entire landholding is exempted from the CARL. s. respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the supporting papers they submitted in connection therewith. 1993. No. under the Luz Farms doctrine. On February 4. Their motion was denied. Petitioner ordered the rest of respondents’ landholding to be segregated and placed under Compulsory Acquisition. On December 27.O. Petitioner ignored their request. DAR issued A. in view of the Luz Farms case which declared cattle-raising lands excluded from the coverage of agrarian reform.209 hectares of respondents’ land for grazing purposes.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the operations of the CARL. They filed a notice of appeal with the Office of the President assailing: (1) the reasonableness and validity of DAR A. provided the guidelines to determine whether a certain parcel of land is being used for cattle-raising.O.O. series of 1993.O.106 On April 27. Hence.O. this petition. No. Series of 1993 is hereby DECLARED null and void. 1993. void for being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform program of the government. does not run counter to the Luz Farms case as the A.O.. 9. 9. DAR Administrative Order No. On September 14. s. was left for the determination of the courts as the sole arbiters of such issue.O.O.
O.O. feedmill with grinders.e. Invoking its rule-making power under Section 49 of the CARL. . conveyors. they are not immune from judicial review. is invalid as it contravenes the Constitution. 9 to limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private agricultural lands under the coverage of agrarian reform. swine and poultry. The Court clarified in the Luz Farms case that livestock. Petitioner also contends that the A. A great portion of the investment in this enterprise is in the form of industrial fixed assets. The A. In the case at bar. to be valid. The fundamental rule in administrative law is that. Delegated rule-making has become a practical necessity in modern governance due to the increasing complexity and variety of public functions. while administrative rules and regulations have the force and effect of law.. administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution. swine and poultry-raising are industrial activities and do not fall within the definition of “agriculture” or “agricultural activity.O. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their regulations. we find that the impugned A. petitioner submits that it issued DAR A. which prescribes a maximum retention limit for owners of lands devoted to livestock raising. activity.O.107 The main issue in the case at bar is the constitutionality of DAR A. pumphouses. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds. deepwells. all lands exclusively devoted to livestock. swine and poultry is different from crop or tree farming. exhausts and generators. Nor can it be used to enlarge the power of the administrative agency beyond the scope intended. petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. i.raising. the power to make rules and regulations. They have been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. sprayers. It has exceeded its power in issuing the assailed A. mixers. Clearly. The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution. Administrative agencies are endowed with powers legislative in nature. and other technological appurtenances.O. However. such as: animal housing structures and facilities. drainage. not an agricultural. extensive warehousing facilities for feeds and other supplies. No. series of 1993. They may be properly challenged before the courts to ensure that they do not violate the Constitution and no grave abuse of administrative discretion is committed by the administrative body concerned. waterers and blowers. No. elevated water tanks. seeks to remedy reports that some unscrupulous landowners have converted their agricultural farms to livestock farms in order to evade their coverage in the agrarian reform program. It is an industrial.O.” The raising of livestock. Petitioner’s arguments fail to impress. the deliberations of the 1987 Constitutional Commission show a clear intent to exclude. 9. However. inter alia.
commercial or industrial. In Natalia Realty. the latter prevails. It must be stressed that what the CARL prohibits is the conversion of agricultural lands for non-agricultural purposes after the effectivity of the CARL. clearly does not apply in this case. The assailed Decision and Resolution of the Court of Appeals. Thus. We stressed anew that while Section 4 of R. could not be considered as agricultural lands subject to agrarian reform as these lots were already classified as residential lands. 2003 and February 4. there is no evidence on record that respondents have just recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended to evade its coverage. In case of conflict between an administrative order and the provisions of the Constitution. Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform. even portions of the Antipolo Hills Subdivision.O. Congress seeks to supersede an earlier one. With this significant modification. it was seeking to address the reports it has received that some unscrupulous landowners have been converting their agricultural lands to livestock farms to avoid their coverage by the agrarian reform. commercial and residential lands are not covered by the CARL. The assailed A. it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial change is an implied legislative approval and adoption of the previous law. They cannot amend or extend the Constitution. DAR reiterated our ruling in the Luz Farms case. it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. the petition is DISMISSED. Inc. poultry and swine have been classified as industrial. Respondents’ family acquired their landholdings as early as 1948. Petitioner DAR does not dispute this fact. No. we find neither merit nor logic in this contention. the term “agricultural land” does not include lands classified as mineral. the Court held that industrial. Moreover. No. In sum. To be valid. Specifically. dated September 19. On the other hand. Petitioner DAR argues that. residential. by making a new law. lands and thus exempt from agrarian reform. after the passage of the 1988 CARL.A.A. the new law changed the definition of the terms “agricultural activity” and “commercial farming” by dropping from its coverage lands that are devoted to commercial livestock. IN VIEW WHEREOF. not agricultural. A similar logical deduction should be followed in the case at bar. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution. 6657 provides that the CARL shall cover all public and private agricultural lands. they must conform to and be consistent with the Constitution.108 The subsequent case of Natalia Realty. are AFFIRMED. In the case at bar. No pronouncement as to costs. in Natalia Realty. The undesirable scenario which petitioner seeks to prevent with the issuance of the A. poultry and swine-raising.O. respectively. Lands devoted to raising of livestock. v. in issuing the impugned A. which are arable yet still undeveloped. Indeed. . 7881 which amended certain provisions of the CARL.. 2004. Congress enacted R. They have long been in the business of breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the Philippines.O. Again. forest. There has been no change of business interest in the case of respondents.
1999 LEO ECHEGARAY. the Honorable Court in issuing the TRO has transcended its power of judicial review. vs. RESOLUTION PUNO. To be certain. its execution enters the exclusive ambit of authority of the executive authority. . The issuance of the temporary restraining order . creates dangerous precedent as there will never be an end to litigation because there is always a possibility that Congress may repeal a law.: For resolution are public respondents' Urgent Motion for Reconsideration of the Resolution of this Court dated January 4. . The resolution of Congressman Golez. ET AL. petitioner. the law looks forward while the judge looks at the past. It is the submission of public respondents that: 1.. b. 4. . et al. Under the time honored maxim lex futuro. to wit: a. At this moment. 5. . 3. . whatever question may now be raised on the Death Penalty Law before the present Congress within the 6-month period given by this Honorable Court had in all probability been fully debated upon . that they are against the repeal of the law. 132601 January 19. . . The issuance of the TRO may be construed as trenching on that sphere of executive authority. J. 1990 temporarily restraining the execution of petitioner and Supplemental Motion to Urgent Motion for Reconsideration. certain circumstances/supervening events transpired to the effect that the repeal or modification of the law imposing death penalty has become nil..109 SO ORDERED. No. The Decision in this case having become final and executory. respondents. c. Congress had earlier deliberated extensively on the death penalty bill. SECRETARY OF JUSTICE. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. judex praeterito. The public pronouncement of President Estrada that he will veto any law imposing the death penalty involving heinous crimes. The fact that Senator Roco's resolution to repeal the law only bears his signature and that of Senator Pimentel. . 2.
A. 8177) as unconstitutional. which are hereby declared INVALID because (a) Section 17 contravenes Article 83 of the Revised Penal Code. where the death penalty was imposed on petitioner on automatic review of his conviction by this Court." The Resolution was concurred in by one hundred thirteen (113) congressman. These metes and bounds are clearly spelled out in the Entry of Judgment in this case. No. (3) the Court did not lose jurisdiction to address incidental matters involved or arising from the petition. 1999. 1999 and Entry of Appearance of her counsel dated January 5. 1999 merely noted the Motion to Set Aside of Rodessa "Baby" R. she has no legal standing to intervene in the case at bar.R. 8177 are concerned. 117472. where the constitutionality of R. the Judiciary and the Executive Department of the position of the House of Representative on this matter. the dispositive part of which reads as follows: WHEREFORE. and urging the President to exhaust all means under the law to immediately implement the death penalty law. Prefatorily. I First.110 In their Supplemental Motion to Urgent Motion for Reconsideration. It is appropriate to examine with precision the metes and bounds of the Decision of this Court that became final. and (5) there is no certainty that the law on capital punishment will not be repealed or modified until Congress convenes and considers all the various resolutions and bills filed before it. In their Consolidated Comment. the Court is not changing even a comma of its final Decision. . is within the scope of judicial power and duty and does not trench on executive powers nor on congressional prerogatives. 1998 a decision rendered in the above-entitled case was filed in this Office. Obviously. 8177 (Lethal Injection Law) and its implementing rules and regulations was assailed by petitioner. 7659 which provided for the re-imposition of death penalty. . the petition is DENIED insofar as petitioner seeks to declare the assailed statute (Republic Act No. We do not agree with the sweeping submission of the public respondents that this Court lost its jurisdiction over the case at bar and hence can no longer restrain the execution of the petitioner. 629 introduced by Congressman Golez entitled "Resolution expressing the sense of the House of Representative to reject any move to review Republic Act No. No. (4) public respondents are estopped from challenging the Court's jurisdiction." 1 To start with. Echegaray dated January 7.R. public respondents attached a copy of House Resolution No. No. as amended by Section 25 of Republic Act No. 132601. We shall now resolve the basic issues raised by the public respondents. 7659. For this reason. public respondents are invoking the rule that final judgments can no longer be altered in accord with the principle that "it is just as important that there should be a place to end as there should be a place to begin litigation. the Court likes to emphasize that the instant motions concern matters that are not incidents in G. and (b) Section 19 fails to provide . let alone the fact that the interest of the State is properly represented by the Solicitor General. notifying the Senate. The instant motions were filed in this case. G. viz: ENTRY OF JUDGMENT This is to certify that on October 12. Clearly. petitioner contends: (1) the stay order. (2) the exercise by this Court of its power to stay execution was reasonable. the Court in its Resolution of January 4. but GRANTED insofar as Sections 17 and 19 of the Rules and Regulations to Implement Republic Act No.
5 In truth. 1988 become final and executory and is hereby recorded in the Book of Entries of Judgment. 8177 cannot be enforced and implemented until sections 17 and 19 of the Rules and Regulations to Implement R. 8177 are appropriately amended. No. 1998 a Compliance where he submitted the Amended Rules and Regulations implementing R. 8177 is not unconstitutional. that in criminal cases. modify or alter the same.A.A. Judge of First Instance. Philippine. Clerk of Court By: (SGD) TERESITA G. after the sentence has been pronounced and the period for reopening the same .A. For after the judgment has become final facts and circumstances may transpire which can render the execution unjust or impossible. hence unavailable to interested parties including the accused/convict and counsel. The former continues even after the judgment has become final for the purpose of enforcement of judgment. DIMAISIP Acng Chief Judicial Records Office The records will show that before the Entry of Judgment. No.111 for review and approval of the Lethal Injection Manual by the Secretary of Justice. As aptly pointed out by the petitioner. . 3 There is a difference between the jurisdiction of the court to execute its judgment and its jurisdiction to amend. SO ORDERED. It is also daylight clear that this Decision was not altered a whit by this Court. No. 8177 are amended. Even after the judgment has become final the court retains its jurisdiction to execute and enforce it. as early as 1915. Contrary to the submission of the Solicitor General. the latter terminates when the judgment becomes final. No.A.A. modify or alter the same. revised and/or corrected in accordance with this Decision. On October 28. Secretary Cuevas submitted a Manifestation informing the Court that he has caused the publication of the said Amended Rules and Regulations as required by the Administrative Code. on November 6. which constitute jurisprudence on the subject. By the finality of the judgment. this Court has unequivocably ruled in the case of Director of Prisons v. . 1998. Respondents are hereby enjoined from enforcing and implementing Republic Act No. and unjustifiably makes the manual confidential. 6 viz: This Supreme Court has repeatedly declared in various decisions. (2) that sections 17 and 19 of the Rules and Regulations to Implement R. the Honorable Serafin Cuevas. No. filed with this Court on October 21. 8177 until the aforesaid Sections 17 and 19 of the Rules and Regulations to Implement Republic Act No. the Secretary of Justice. what the court loses is its jurisdiction to amend. 8177 in compliance with our Decision. 4 . 8177 are invalid. the rule on finality of judgment cannot divest this Court of its jurisdiction to execute and enforce the same judgment. the arguments of the Solicitor General has long been rejected by this Court. It is crystalline that the Decision of this Court that became final and unalterable mandated: (1) that R. Retired Justice Camilo Quiason synthesized the well established jurisprudence on this issue as follows: 2the finality of a judgment does not mean that the Court has lost all its powers nor the case. and that the same has. Manila. and (3) R.
. the date therefor can be postponed. if however a circumstance arises that ought to delay the execution. in the event that the judgment has been affirmed. 8 For this purpose. Section 6 of Rule 135 provides that "when by law jurisdiction is conferred on a court or judicial officer. and its part is ended. even in sentences of death. it performs a ministerial duty in issuing the proper order. while the executive has no power over the person of the convict except to provide for carrying out of the penalty and to pardon." It bears repeating that what the Court restrained temporarily is the execution of its own Decision to give it reasonable time to check its fairness in light of supervening events in Congress as alleged by petitioner. The Court. If one of the ways is by direction of the court. it must be accepted as a hypothesis that postponement of the date can be requested. and (3) by mandate of the law. When in cases of appeal or review the cause has been returned thereto for execution. (2) by discretion (arbitrio) of the court. as its jurisdiction has terminated . contrary to popular misimpression. But it does not follow from this cessation of functions on the part of the court with reference to the ending of the cause that the judicial authority terminates by having then passed completely to the Executive. in any event are absolutely under the control of the judicial authority.1âwphi1. which are certainly not always included in the judgment and writ of execution. supervening contingencies that courts have been conceded the inherent and necessary power of control of its processes and orders to make them conformable to law and justice. all auxiliary writs. and notwithstanding the general rule that after the (court) has performed its ministerial duty of ordering the execution . any suitable process or mode of proceeding may be adopted which appears conformable to the spirit of said law or rules. whether civil or criminal. .112 cannot change or alter its judgment. and there is an imperative duty to investigate the emergency and to order a postponement. It cannot be the subject of substantial subtraction for our Constitution 7 vests the entirety of judicial power in one Supreme Court and in such lower courts as may be established by law. It is because of these unforseen. processes and other means necessary to carry it into effect may be employed by such court or officer and if the procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law or by these rules. Under the common law this postponement can be ordered in three ways: (1) By command of the King. which is that of execution of a capital sentence. it is acknowledged that even after the date of the execution has been fixed. Getting down to the solution of the question in the case at bar. It is sufficient to state this principle of the common law to render impossible that assertion in absolute terms that after the convict has once been placed in jail the trial court can not reopen the case to investigate the facts that show the need for postponement. The particulars of the execution itself. Then the question arises as to whom the application for postponing the execution ought to be addressed while the circumstances is under investigation and so to who has jurisdiction to make the investigation. . the important part of a litigation. did not restrain the effectivity of a law enacted by Congress. The power to control the execution of its decision is an essential aspect of jurisdiction. . To be sure. There can be no dispute on this point. is the process of execution of decisions where supervening events may change the circumstance of the parties and compel courts to intervene and adjust the rights of the litigants to prevent unfairness.nêt The more disquieting dimension of the submission of the public respondents that this Court has no jurisdiction to restrain the execution of petitioner is that it can diminish the . It is a well-known principle that notwithstanding the order of execution and the executory nature thereof on the date set or at the proper time.
. Any attempt on the part of these department would be a clear usurpation of its function. and the admission to the practice of law in the Philippines. Thus. The Supreme Court shall have the following powers. The said power of Congress. . spelled out the rules on execution of judgments. altered or supplemented by the Batasang Pambansa . . merely to fix the minimum conditions for the license. the disputed law is not a legislation. This Court struck down the law as unconstitutional. and not the legislative nor executive department." By its ruling. The ruling of this Court in In re Cunanan was not changed by the 1973 Constitution. and the admission to the practice of law. which. Rule 39 governs execution. practice and procedure. practice and procedure was granted by our Constitutions to this Court to enhance its independence. the average of 70% in the bar examinations after July 4. The Congress have the power to repeal. . For the 1973 Constitution reiterated the power of this Court "to promulgate rules concerning pleading. or as other authorities say. Since the implant of republicanism in our soil. . courts will lose that popular trust so essential to the maintenance of their vigor as champions of justice. The existing laws on pleading. our courts have been conceded the jurisdiction to enforce their final decisions. subject to the power of the Supreme Court to alter and modify the same. its Section 13. may be repealed. practice and procedure which.13. . Rule 120 governs judgments in criminal cases. increase. that the ultimate power to grant license for the practice of law belongs exclusively to this Court. necessary and incidental power to control and supervise the process of execution of their decisions. In his ponencia. and are declared Rules of Court. alter or supplement the rules concerning pleading. These rules are all predicated on the assumption that courts have the inherent. Article VIII provides: Sec. The Supreme Court shall have the power to promulgate rules concerning pleading. it is no less certain that only this Court. . and the admission to the practice of law in the Philippines. for justifiable reasons. alter or supplement. practice and procedure in all courts. In accord with this unquestioned jurisdiction. Said rules shall be uniform for all courts of the same grade and shall not diminish. or modify substantive rights. alter or supplement the rules concerning pleading. for in the words of Justice Isagani Cruz "without independence and integrity. as is the case with the law in question. practice and procedure. practice and procedure in all courts. this Court promulgated rules concerning pleading. practice and procedure was granted but it appeared to be coexistent with legislative power for it was subject to the power of Congress to repeal. however. this Court qualified the absolutist tone of the power of Congress to "repeal. it is a judgment — a judgment promulgated by this Court during the aforecited years affecting the bar candidates concerned. 1946 up to August 1951 and 71% in the 1952 bar examinations. enacted the Bar Flunkers Act of 1953 11 which considered as a passing grade. that may do so. In In re Cunanan 10 Congress in the exercise of its power to amend rules of the Supreme Court regarding admission to the practice of law." More completely." 9 Hence. our Constitutions continuously vested this power to this Court for it enhances its independence. among others. and the law passed by Congress on the matter is of permissive character. is not as absolute as it may appear on its surface. Justice Diokno held that " . and although this Court certainly can revoke these judgments even now. .113 independence of the judiciary." 12 The venerable jurist further ruled: "It is obvious. It should be stressed that the power to promulgate rules of pleading. satisfaction and effects of judgments in civil cases. however. practice and procedure are hereby repealed as statutes. therefore. . the power of this Court to promulgate rules concerning pleading.5. Section 5(2)5 of its Article X provided: Sec. Under the 1935 Constitution. Mr.
The Court was also granted for the first time the power to disapprove rules of procedure of special courts and quasi-judicial bodies. 13 The 1987 Constitution molded an even stronger and more independent judiciary.114 (5) Promulgate rules concerning pleading. or modify substantive rights. the admission to the practice of law. Ponferrada. more so with the Executive. 104. a power conceded to it and which it has exercised since time immemorial. The Supreme Court shall have the following powers: (5) Promulgate rules concerning the protection and enforcement of constitutional rights. and procedure in all courts. Article VIII provides: Sec. shall be uniform for all courts of the same grade. If the manifest intent of the 1987 Constitution is to strengthen the independence of the judiciary. In fine. 1998. and shall not diminish. or supplement rules concerning pleading. 1998. a certified true copy of the Warrant of Execution dated November 17. The records reveal that after November 6. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases. This Court for the first time was given the power to promulgate rules concerning the protection and enforcement of constitutional rights. Among others. it enhanced the rule making power of this Court. 5. particularly the execution date fixed by such trial court to the public when requested. which. Br. or modify substantive rights. or supplemented by the Batasang Pambansa. the 1987 Constitution took away the power of Congress to repeal." The relevant portions of the Manifestation and Urgent Motion filed by the Secretary of Justice beseeching this Court "to provide the appropriate relief" state: . But most importantly. Its Section 5(5). the Integrated Bar. the power to promulgate rules of pleading. the admission to the practice of law. . and the integration of the Bar. as public respondents do. alter. practice and procedure is no longer shared by this Court with Congress. increase. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court. or on December 8. it is too late in the day for public respondents to assail the jurisdiction of this Court to control and supervise the implementation of its decision in the case at bar. and shall not diminish. practice and procedure in all courts. To be sure. Well worth noting is that the 1973 Constitution further strengthened the independence of the judiciary by giving to it the additional power to promulgate rules governing the integration of the Bar. may be repealed. no less than the Secretary of Justice recognized the jurisdiction of this Court by filing a Manifestation and Urgent Motion to compel the trial judge. RTC. and legal assistance to the underprivileged. it is inutile to urge. altered. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases. The rule making power of this Court was expanded. shall be uniform for all courts of the same grade. our Decision became final and executory on November 6. that this Court has no jurisdiction to control the process of execution of its decisions. pleading. Quezon City to provide him ". 1998 bearing the designated execution day of death convict Leo Echegaray and allow (him) to reveal or announce the contents thereof. practice and procedure. practice. As aforestated. however. the Honorable Thelma A. 1998. increase. .
" (Decision of the Supreme Court En Banc in Legaspi v. The non-disclosure of the date of execution deprives herein respondent of vital information necessary for the exercise of his power of supervision and control over the Bureau of Corrections pursuant to Section 39. 167 ) by guaranteeing the right and mandating the duty to afford access to sources of information. The right of the people to information on matters of public concern shall be recognized. . i. at p. Sec. might even work to the prejudice of the convict and defeat the purpose of the Constitution and the applicable statute as when the date at execution set by the President would be earlier than that designated by the court. inter alia. be afforded the citizen. Article VII (Executive Department) of the 1987 Philippine Constitution and Article 81 of the Revised Penal Code. the willful omission to reveal the information about the precise day of execution limits the exercise by the President of executive clemency powers pursuant to Section 19. 150 SCRA 530. Chapter 8. subject to such limitations as may be provided by law. 8177 and the Amended Rules and Regulations to Implement Republic Act No. 28).. The exercise of such clemency power. The "right to information" provision is self-executing. Moreover. postpone the execution of a sentence to a day certain (People v. However. be consistent with the declared State policy of full public disclosure of all transactions involving public interest (Constitution. or decisions. as well as renders nugatory the constitutional guarantee that recognizes the people's right to information of public concern. Hence. 110 ) in the absence of a precise date to reckon with. 28. 7 have become operative and enforceable by virtue of the adoption of the New Charter. that the non-disclosure of the date of execution deprives herein respondent of vital information necessary for the exercise of his statutory powers. 56. the fundamental right therein recognized may be asserted by the people upon the ratification of the Constitution without need for any ancillary act of the Legislature (Id. Subject to reasonable conditions prescribed by law. at this time. transactions. insofar as the enforcement of Republic Act No. in relation to Title III. as amended. Vera. 65 Phil. of necessity. III. Article II (Declaration of Principles and State Policies) of the 1987 Philippine Constitution which read: Sec. Sec. It supplies "the rules by means of which the right to information may be enjoyed (Cooley.e. 165) What may be provided for by the Legislature are reasonable conditions and limitations upon the access to be afforded which must. it cannot be overemphasized that whatever limitation may be prescribed by the Legislature. Access to official records. which provides that the death sentence shall be carried out "without prejudice to the exercise by the President of his executive powers at all times. 7. herein respondent is submitting the instant Manifestation and Motion (a) to stress. and (b) to ask this Honorable Court to provide the appropriate relief. Art. and to documents and papers pertaining to official acts. 6.. Civil Service Commission. 7. 9. Book IV of such Administrative Code. Article III (Bill of Rights) and Section 28. the President cannot grant reprieve. 534-535 . Instead of filing a comment on Judge Ponferrada's Manifestation however. as well as to government research data used as basis for policy development shall. Book IV of the Administrative Code of 1987." (Emphasis supplied) For instance. A Treatise on the Constitutional Limitations.115 5. Sec. the right and the duty under Art. 8177 is concerned and for the discharge of the mandate of seeing to it that laws and rules relative to the execution of sentence are faithfully observed. the deliberate non-disclosure of information about the date of execution to herein respondent and the public violates Section 7. On the other hand. II. the State adopts and implements a policy of full public disclosure of all transactions involving public interest. 8.
Article VII of the Constitution which reads: Except in cases of impeachment. however. . But by no stretch of the imagination can the exercise by Congress of its plenary power to amend laws be considered as a violation of the power of the President to commute final sentences of conviction. it is generally assumed that due process of law will prevent the government from executing the death sentence upon a person who is insane at the time of execution. it cannot be denied that Congress can at any time amend R. In the same vein. or as otherwise provided in this Constitution. the Legislative and the Judiciary to save the life of a death convict do not exclude each other for the simple reason that there is no higher right than the right to life. as counsel for public respondents." 16 The suspension of such a death sentence is undisputably an exercise of judicial power. Atty. commutations. He invoked his client's right to due process and the public's right to information. We likewise reject the public respondents' contention that the "decision in this case having become final and executory. The provision is simply the source of power of the President to grant reprieves. .116 The same motion to compel Judge Ponferrada to reveal the date of execution of petitioner Echegaray was filed by his counsel. on December 7. The powers of the Executive. For the public respondents therefore to contend that only the Executive can protect the right to life of an accused after his final conviction is to violate the principle of co-equal and coordinate powers of the three branches of our government. its execution enters the exclusive ambit of authority of the executive department . The Solicitor General. There was not a whimper of protest from the public respondents and they are now estopped from contending that this Court has lost its jurisdiction to grant said relief. "today. The jurisdiction of this Court does not depend on the convenience of litigants. 1998. The text and tone of this provision will not yield to the interpretation suggested by the public respondents. and pardons. He shall also have the power to grant amnesty with the concurrence of a majority of all the members of the Congress. commutations. 15 As observed by Antieau.A. By granting the TRO. cannot be interpreted as denying the power of courts to control the enforcement of their decisions after their finality. an accused who has been convicted by final judgment still possesses collateral rights and these rights can be claimed in the appropriate courts. In truth. and remit fines and forfeitures after conviction by final judgment. 7659 by reducing the penalty of death to life imprisonment. This Court granted the relief prayed for by the Secretary of Justice and by the counsel of the petitioner in its Resolution of December 15. It also provides the authority for the President to grant amnesty with the concurrence of a majority of all the members of the Congress." 14 Public respondents cite as their authority for this proposition. in various States in the United States. Indeed. No. 1998. Section 19. II Second. The provision. a death convict who become insane after his final conviction cannot be executed while in a state of insanity. and pardons and remit fines and forfeitures after conviction by final judgment. the Honorable Court has in effect granted reprieve which is an executive function. The effect of such an amendment is like that of commutation of sentence. the President may grant reprieves. Theodore Te. It is not a usurpation of the presidential power of reprieve though its effects is the same — the temporary suspension of the execution of the death convict. III .. did not oppose petitioner's motion on the ground that this Court has no more jurisdiction over the process of execution of Echegaray. laws have even been enacted expressly granting courts the power to suspend execution of convicts and their constitutionality has been upheld over arguments that they infringe upon the power of the President to grant reprieves. For instance.
Chief Justice Hilario Davide.e. 8177). There was hardly a time to verify petitioner's allegations as his execution was set at 3 p. He names these supervening events as follows: a.117 Third. The resolution of Congressman Golez. (b. The Court's resolution temporarily restraining the execution of petitioner must be put in its proper perspective as it has been grievously distorted especially by those who make a living by vilifying courts. by the fear that any error of the Court in not stopping the execution of the petitioner will preclude any further relief for all rights stop at the graveyard. 1999. Petitioner filed his Very Urgent Motion for Issuance of TRO on December 28. that they are against the repeal of the law.m. coeval with the constitutional duration of the present regular session of Congress. viz: (1) that his execution has been set on January 4. The temporary restraining order of this Court has produced its desired result. As life was at. The fact that Senator Roco's resolution to repeal the law only bears his signature and that of Senator Pimentel. They noted that petitioner's allegations were made in a pleading under oath and were widely publicized in the print and broadcast media. to deliberate on petitioner's Very Urgent Motion. the first working day of 1999.. i. In contrast. Given these constraints.2) Senate President Marcelo Fernan and Senator Miriam S. To the Court's majority. there were good reasons why the Court should not immediately dismiss petitioner's allegations as mere speculations and surmises. a. the crystallization of the issue whether Congress is disposed to review capital punishment. c. And verification from Congress was impossible as Congress was not in session. No. No. the Court's majority did not rush to judgment but took an extremely cautious stance by temporarily restraining the execution of petitioner. the Court had the difficult problem of resolving whether petitioner's allegations about the moves in Congress to repeal or amend the Death Penalty Law are mere speculations or not. the Court was already in its traditional recess and would only resume session on January 18. and (b. The present Congress is therefore different from the Congress that enacted the Death Penalty Law (R. It was believed that law and equitable considerations demand no less before allowing the State to take the life of one its citizens. The public pronouncement of President Estrada that he will veto any law imposing the death penalty involving heinous crimes. and thirty five (35) other congressmen are demanding review of the same law. Jr. 1999." The extreme caution taken by the Court was compelled.4) Congressman Salacrib Baterina. et al. cite posterior events that negate beyond doubt the possibility that Congress will repeal or amend the death penalty law. (b. 1998 at about 11:30 p. called the Court to a Special Session on January 4. thru the Solicitor General. It was also of judicial notice that the 11th Congress is a new Congress and has no less than one hundred thirty (130) new members whose views on capital punishment are still unexpressed. the Court's minority felt that petitioner's allegations lacked clear factual bases.. the Court refused to constitutionalize haste and the hysteria of some partisans. The public respondents. 7659) and the Lethal Injection Law (R. Thus. b. unless it sooner becomes certain that no repeal or modification of the law is going to be made.A. Jr. When the Very Urgent Motion was filed. stake. among others.1) that Senator Aquilino Pimentel's resolution asking that clemency be granted to the petitioner and that capital punishment be reviewed has been concurred by thirteen (13) other senators. Even then.A.m.. (b. He invoked several grounds. 18 .3) Senator Paul Roco has also sought the repeal of capital punishment. The Court's majority felt it needed the certainty that the legislature will not petitioner as alleged by his counsel. (b) that members of Congress had either sought for his executive clemency and/or review or repeal of the law authorizing capital punishment.m.m. 1991 17 at 10. The Court hardly had five (5) hours to resolve petitioner's motion as he was due to be executed at 3 p. Defensor have publicly declared they would seek a review of the death penalty law. The suspension was temporary — "until June 15.
The flame of the rule of law cannot be ignited by rage. As Justice Brennan reminds us ". Quezon City. . 7659 which provided for the reimposition of death penalty. 629 introduced by Congressman Golez entitled "Resolution expressing the sense of the House of Representatives to reject any move to review R. 21 IN VIEW WHEREOF. the House of Representative with minor amendments formally adopted the Golez resolution by an overwhelming vote. the famous Clarence Darrow predicted that ". The Court also orders respondent trial court judge (Hon. The business of courts in rendering justice is to be fair and they can pass their litmus test only when they can be fair to him who is momentarily the most hated by society.118 In their Supplemental Motion to Urgent Motion for Reconsideration. . the Court grants the public respondents' Urgent Motion for Reconsideration and Supplemental Motion to Urgent Motion for Reconsideration and lifts the Temporary Restraining Order issued in its Resolution of January 4.A. even if it is no more than an exchange of epithets is healthy in a democracy. . 25 expressed the sentiment that the House ". it is the very purpose of the Constitution — and particularly the Bill of Rights — to declare certain values transcendent. especially the rage of the mob which is the mother of unfairness. the Solicitor General cited House Resolution No. the Judiciary and the Executive Department of the position of the House of Representative on this matter and urging the President to exhaust all means under the law to immediately implement the death penalty law. 1999. A last note. it is the especial duty of this Court to assure that the guarantees of the Bill of Rights to the minority fully hold. . It is a hatchery where justice will bloom only when we can prevent the roots of reason to be blown away by the winds of rage. when anger threatens to turn the majority rule to tyranny. notifying the Senate. SO ORDERED. Thelma A. 1999. the President has stated that he will not request Congress to ratify the Second Protocol in review of the prevalence of heinous crimes in the country. In a marathon session yesterday that extended up 3 o'clock in the morning. . To be sure. House Resolution No. But when the debate deteriorates to discord due to the overuse of words that wound. Regional Trial Court. the Court's TRO should now be lifted as it has served its legal and humanitarian purpose. does not desire at this time to review Republic Act 7659. In light of these developments. Ponferrada." 19 In our clime and time when heinous crimes continue to be unchecked. . No. In 1922. Branch 104) to set anew the date for execution of the convict/petitioner in accordance with applicable provisions of law and the Rules of Court. beyond the reach of temporary political majorities." In addition." The Golez resolution was signed by 113 congressman as of January 11. the debate on the legal and moral predicates of capital punishment has been regrettably blurred by emotionalism because of the unfaltering faith of the pro and anti-death partisans on the right and righteousness of their postulates. any debate. the House of Representative with minor. without further delay." 20 Man has yet to invent a better hatchery of justice than the courts. . the question of capital punishment had been the subject of endless discussion and will probably never be settled so long as men believe in punishment.
Boie-Takeda was required within (10) ten calendar day from notice to effect restitution and correction of the underpaid thirteenth month pay. the letter further stress that …. On the other hand.and Philippine Fujixerox Coporation by the Labor and Development Officer. this consolidated petition. Both companies were directed to appear before their respectve Regional Director and Labor Development Officer to hear their side. And by reasons of these. thereby commissions are not and cannot be legally defined as regular in nature. Both inspection revealed irregularity in paying the 13th month pay. Philippine Fujixerox Corporation was requested rectification and/or restitution of the violation within five working days from notice. De la Serna 228 SCRA 329 (G. On the other hand. But despite of due notice both did not appear. by writing the labor department and expressing therein “that commissions are not included in the computation of the 13th month pay because the law and the implementing rules speaks of “Regular Basic Salary”. No. Boie-Takeda.119 Boie-Takeda Chemicals Inc. because of their almost identitical case. did not include the commission received by its medical representatives in the computation of the 13th month pay. their respective cases were resolved against them. Both appealed to the Secretary of Labor and both appeals were denied for lack of merit Hence. Both companies were issued Notice of Inspection Results. While Philippine Fujixerox Corporation underpaid their 62 employees 13th month pay. vs. Philippine Fujixerox Corporation takes no action on the notice but requested a follow up of the inspection findings. in the first case. 1993 FACTS Both cases originated form a routine inspection conducted in the premises of BoieTakeda Chemical Inc. Both were ordered to pay their respective employees underpaid thirteenth month pay. there is no commission. ISSUE .R.… when no sale was transacted. 92174 and L-102552) December 10. Read more in Business « Alyssa Campanella Should Win Miss Universe 2011 Troubleshooting CBU Cars – Part I( KIA Carnival) » Boie-Takeda contest the issued notice.
The concept of 13th Month Pay as envisioned. and while entitlement to said benefit was no longer limited to employees receiving a monthly basic salary of not more than P1.00. committed grave abuse of discretion amounting to lack of jurisdiction by giving effect to Section 5 of the Revised Guidelines on the implementation of the Thirteenth Month Pay and overruling both companies contention that such is a usurpation of legislative power because it is not justified or within the authority of the law besides being violative of the equal protection clause of the constitution. 851 applies equally to “basic salary” under Memorandum Order No.D. HELD Contrary to respondents’ contention. the interpretation given to the term “basic salary” as defined in P.000.D. Thus.D. 28 did not repeal.D. supersede or abrogate P. 851. As may be gleaned from the language of Memorandum Order No.00 salary ceiling. Memorandum Order No. and still is. to be computed on the basic salary of the employee-recipient as provided under P.000. 28 . said benefit was. it merely “modified” Section 1 of the decree by removing the P1.120 Whether or not the labor officials in computing the 13th month pay. 851 remained unaltered. 28. 851. defined and implemented under P.
1208. No. 5 In a letter dated 18 March 1996. 7742. BUENAVENTURA. On 16 November 1995. No. HOME DEVELOPMENT MUTUAL FUND.J. MABANTA. 1752.. petitioner. 6 PETITIONER's appeal 7 with the HDMF Board of Trustees was denied for having been rendered moot and academic by Board Resolution No. DAVIDE. 131082 June 19." and that the Rules Implementing R. 2 On 1 September 1995. Mabanta. removing . as amended. JR. Series of 1996.R. 7742. which require the existence of a plan providing for both provident/retirement and housing benefits for exemption from the Pag-IBIG Fund coverage under Presidential Decree No. 1752. respondent. No. 7742. amending and modifying the Rules and Regulations Implementing R.A. 7742 did not amend nor repeal Section 19 of P. As amended. Series of 1995.D.: Once again. SAYOC & DE LOS ANGELES. 1752 but merely implement the law. No. 3 it must have a plan providing for both provident/retirement and housing benefits superior to those provided under the Pag-IBIG Fund. PETITIONER filed with the respondent an application for Waiver or Suspension of Fund Coverage because of its superior retirement plan.D. Pursuant to Section 19 1 of P. 1011. the President and Chief Executive Officer of HDMF disapproved PETITIONER's application on the ground that the requirement that there should be both a provident retirement fund and a housing plan is clear in the use of the phrase "and/or. PETITIONER submitted to the HDMF a letter explaining that the 1995 Amendments to the Rules are invalid.A. No. petitioner Romulo. C. pursuant to Section 5 of Republic Act No. vs. Buenaventura.A. a law firm.121 Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. issued Board Resolution No. 7742. No. 4 In support of said application. 2000 ROMULO. the HDMF Board of Trustees. as amended by R. this Court is confronted with the issue of the validity of the Amendments to the Rules and Regulations Implementing Republic Act No. Sayoc and De Los Angeles (hereafter PETITIONER). Section 1 of Rule VII provides that for a company to be entitled to a waiver or suspension of Fund coverage. was exempted for the period 1 January to 31 December 1995 from the PagIBIG Fund coverage by respondent Home Development Mutual Fund (hereafter HDMF) because of a superior retirement plan.
which provides that "[e]very agency shall file with the University of the Philippines Law Center three (3) certified copies of every rule adopted by it.D. since the questioned amendments were published in the 21 October 1995 issue of the Philippine Star." On the other hand. By choosing "and. PETITIONER filed a petition for review 9 before the Court of Appeals. PETITIONER filed a petition before this Court assailing the 1995 and the 1996 Amendments to the Rules and Regulations Implementing Republic Act No. it is entitled to exemption from the coverage in accordance with Section 19 of P. publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule. as amended. No. No. No. 1752. to be heard before the HDMF adopted the said Amendments. 7742. 8 On 31 March 1997. No. 1752. No. Chapter 2. The 1996 Amendment are also void insofar as they abolished the exemption granted by Section 19 of P. as amended. 1752 and R. 7742. The repeal of such exemption involves the exercise of legislative power. the Court of Appeals dismissed 10 the petition on the ground that the coverage of employers and employees under the Home Development Mutual Fund is mandatory in character as clearly worded in Section 4 of P. . on 6 November 1997." the Board has clarified the confusion brought about by the use of "and/or" in Section 19 of P. 7742 for being contrary to law. In support thereof. as well as amendments thereto. Under P. the HDMF contends that in promulgating the amendments to the rules and regulations which require the existence of a plan providing for both provident and housing benefits for exemption from the Fund Coverage. PETITIONER's motion for reconsideration 11 was denied. 1752. No.A.D.122 the availment of waiver of the mandatory coverage of the Pag-IBIG Fund. Book VII of the Administrative Code of 1987. 7742 the Board of Trustees of the HDMF is authorized to promulgate rules and regulations. No.A. the same are valid.A. Public Participation — (1) If not otherwise required by law. which merely requires as a pre-condition for exemption from coverage the existence of either a superior provident/retirement plan or a superior housing plan. Finally. as amended by R. considering that PETITIONER has a provident plan superior to that offered by the HDMF. PETITIONER contends that HDMF did not comply with Section 3. On motion by HDMF. a public hearing should have first been conducted to give chance to the employers. Since the Amendments to the Rules and Regulations Implementing Republic Act No. 1752.A. No. which provides: Sec. as amended by R. P. as far as practicable. 9. No. PETITIONER also cites Section 9 (1). 1752. 1752. waiver or suspension of coverage under the Pag-IBIG Fund.D.D. the respondent Board was merely exercising its rule-making power under Section 13 of P. Chapter 2. which cannot be delegated to HMDF. an agency shall. Absent such public hearing. the amendments should be voided. 12 Hence. Book VII of the Administrative Code of 1987. It had the option to use "and" only instead of "or" in the rules on waiver in order to effectively implement the Pag-IBIG Fund Law. and not the concurrence of both plans.D.D. Hence. As to the amendments to the Rules and Regulations Implementing R. concerning the extension. 7742 involve an imposition of an additional burden. There is no allegation that petitioner is a distressed employer to warrant its exemption from the Fund coverage.D. which is a newspaper of general circulation. And the publication requirement was amply met. 7742. like PETITIONER. except for distressed employers. PETITIONER contends that the subject 1995 Amendments issued by HDMF are inconsistent with the enabling law. No.
e.A. specifically Section I. it would have used the words "and" instead of "and/or. 124-B prescribing the Revised Guidelines and Procedure for Filing Application for Waiver or Suspension of Fund Coverage under P. v. 1752 intended that an employer with a provident plan or an employee housing plan superior to that of the fund may obtain exemption from coverage. No. 1752.1avvphi1 It is accordingly ordinarily held that the intention of the legislature in using the term "and/or" is that the word "and" and the word "or" are to be used interchangeably. and HDMF Circular No. . that the features of the plan or plans are superior to the fund or continue to be so. HDMF has complied with the publication requirement. Chapter 2.A. only if the same is practicable.123 As to the public hearing. The term is used to avoid a construction which by the use of the disjunctive "or" alone will exclude the combination of several of the alternatives or by the use of the conjunctive "and" will exclude the efficacy of any one of the alternatives standing alone. HDMF claims that as early as 18 October 1996. . paragraph (a) of Section 19 requires for annual certification of waiver or suspension. has been squarely resolved in the relatively recent case of China Banking Corp. The law obviously . It ." In the instant case. i. it had already filed certified true copies of the Amendments to the Rules and Regulations with the University of the Philippines Law Center. No.g. public hearing is required only when the law so provides. This fact is evidenced by certified true copies of the Certification from the Office of the National Administrative Register of the U. butter and/or eggs means butter and eggs or butter or eggs. Rule VII on Waiver and Suspension. Law Center. Finally. 7742. The Members of the Board of Trustees of the HDMF. 1752 does not require that pubic hearing be first conducted before the rules and regulations implementing it would become valid and effective. the legal meaning of the words "and/or" should be taken in its ordinary signification. as amended by R. Book VII of the Revised Administrative Code of 1987. or that one word or the other may be taken accordingly as one or the other will best effectuate the purpose intended by the legislature as gathered from the whole statute. HDMF maintains that as can be clearly deduced from Section 9(1). If the law had intended that the employee [sic] should have both a superior provident plan and a housing plan in order to qualify for exemption. No. 7742.D. No. we ruled: The controversy lies in the legal signification of the words "and/or. No. It follows that public hearing is only optional or discretionary on the part of the agency concerned.e.D. except when the same is required by law. 7742. "either and or. and if not. What it requires is the publication of said rules and regulations at least once in a newspaper of general circulation. 15 We find for the PETITIONER. The issue of the validity of the 1995 Amendments to the Rules and Regulations Implementing R. 14 respectively. are null and void insofar as they require that an employer should have both a provident/retirement plan and a housing plan superior to the benefits offered by the Fund in order to qualify for waiver or suspension of the Fund coverage. 16 We held in that case that Section 1 of Rule VII of the Amendments to the Rules and Regulations Implementing R.P. P.A.. No.D. seems to us clear from the language of the enabling law that Section 19 of P. Having published said 1995 and 1996 Amendments through the Philippine Star on 21 October 1995 1 and 15 November 1996. The term "and/or" means that the effect shall be given to both the conjunctive "and" and the disjunctive "or"." Notably. In arriving at said conclusion.
7742 that employers should have both provident/retirement and housing benefits for all its employees in order to qualify for exemption from the Fund. but must remain consistent with the law they intend to carry out. 22 Considering the foregoing conclusions. when the Board of Trustees of the HDMF required in Section 1. 21 Only Congress can repeal or amend the law. administrative issuances must not override. in the exercise of its rule-making power.D. WHEREFORE. and be not in contradiction to. as they are not within the delegated power of the Board. 7742 and Section 13 18 of P. would enhance the interest of the working group and further strengthen the Home Development Mutual Fund in its pursuit of promoting public welfare through ample social services as mandated by the Constitution. and the Home Development Mutual Fund is hereby directed to refund to petitioner all sums of money it collected from the latter. it is well-settled that rules and regulations. the concurrence of both plans is more than sufficient. which are the product of a delegated power to create new and additional legal provisions that have the effect of law. No. the standards prescribed by law. 19 It is required that the regulation be germane to the objects and purposes of the law. The disapproval by the Home Development Mutual Fund of the application of the petitioner for waiver or suspension of Fund coverage is SET ASIDE. No. it effectively amended Section 19 of P. No. No. SP-43668 and its Resolution of 15 October 1997 are hereby REVERSED and SET ASIDE. While it may be conceded that the requirement of having both plans to qualify for an exemption. as well as the abolition of the exemption. we are of the opinion that the basic law should prevail. issue a regulation not consistent with the law it seeks to apply. The assailed decision of 31 July 1997 of the Court of Appeals in CA-G.124 contemplates that the existence of either plan is considered as sufficient basis for the grant of an exemption. needless to state. should be within the scope of the statutory authority granted by the legislature to the administrative agency. It is without doubt that the HDMF Board has rule-making power as provided in Section 51 17 of R.R. Rule VII of the 1995 Amendments to the Rules and Regulations Implementing R. Indeed. Such amendment and subsequent repeal of Section 19 are both invalid. To require the existence of both plans would radically impose a more stringent condition for waiver which was not clearly envisioned by the basic law.A. 1752. but in conformity with. And when the Board subsequently abolished that exemption through the 1996 Amendments. However. 1752. the petition is GRANTED. supplant or modify the law.A.D. The HDMF cannot. it repealed Section 19 of P. it is unnecessary to dwell on the other issues raised. By removing the disjunctive word "or" in the implementing rules the respondent Board has exceeded its authority. 1752. No. No. 20 In the present case. . A department zeal may not be permitted to outrun the authority conferred by the statute.D.
EN BANC [G.R. No. 143596. December 11, 2003] JUDGE TOMAS C. LEYNES, petitioner, vs. THE COMMISSION ON AUDIT (COA), HON. GREGORIA S. ONG, DIRECTOR, COMMISSION ON AUDIT and HON. SALVACION DALISAY, PROVINCIAL AUDITOR, respondents. DECISION CORONA, J.: Before us is a petition for certiorari under Rule 65 in relation to Section 2, Rule 64 of the Rules of Court, seeking to reverse and set aside the decisionxxxi dated September 14, 1999 of the Commission on Audit (COA), affirming the resolution of COA Regional Director Gregoria S. Ong dated March 29, 1994 which in turn affirmed the opinion dated October 19, 1993 of the Provincial Auditor of Oriental Mindoro, Salvacion M. Dalisay. All three denied the grant of P1,600 monthly allowance to petitioner Judge Tomas C. Leynes by the Municipality of Naujan, Oriental Mindoro. FACTUAL ANTECEDENTS Petitioner Judge Tomas C. Leynes who, at present, is the presiding judge of the Regional Trial Court of Calapan City, Oriental Mindoro, Branch 40 was formerly assigned to the Municipality of Naujan, Oriental Mindoro as the sole presiding judge of the Municipal Trial Court thereof. As such, his salary and representation and transportation allowance (RATA) were drawn from the budget of the Supreme Court. In addition, petitioner received a monthly allowance of P944 from the local fundsxxxi of the Municipality of Naujan starting 1984.xxxi On March 15, 1993, the Sangguniang Bayan of Naujan, through Resolution No. 057, sought the opinion of the Provincial Auditor and the Provincial Budget Officer regarding any budgetary limitation on the grant of a monthly allowance by the municipality to petitioner judge. On May 7, 1993, the Sangguniang Bayan unanimously approved Resolution No. 101 increasing petitioner judge’s monthly allowance from P944 to P1,600 (an increase of P656) starting May 1993.xxxi By virtue of said resolution, the municipal government (the Municipal Mayor and the Sangguniang Bayan) approved a supplemental budget which was likewise approved by the Sangguniang Panlalawigan and the Office of Provincial Budget and Management of Oriental Mindoro. In 1994, the Municipal Government of Naujan again provided for petitioner judge’s P1,600 monthly allowance in its annual budget which was again approved by the Sangguniang Panlalawigan and the Office of Provincial Budget and Management of Oriental Mindoro.xxxi
On February 17, 1994, Provincial Auditor Salvacion M. Dalisay sent a letter to the Municipal Mayor and the Sangguniang Bayan of Naujan directing them to stop the payment of the P1,600 monthly allowance or RATA to petitioner judge and to require the immediate refund of the amounts previously paid to the latter. She opined that the Municipality of Naujan could not grant RATA to petitioner judge in addition to the RATA the latter was already receiving from the Supreme Court. Her directive was based on the following: Section 36, RA No. 7645, General Appropriations Act of 1993 Representation and Transportation Allowances. The following officials and those of equivalent rank as may be determined by the Department of Budget and Management (DBM) while in the actual performance of their respective functions are hereby granted monthly commutable representation and transportation allowances payable from the programmed appropriations provided for their respective offices, not exceeding the rates indicated below . . . National Compensation Circular No. 67 dated January 1, 1992, of the Department of Budget and Management Subject: Representation and Transportation Allowances of National Government Officials and Employees 4. Funding Source: In all cases, commutable and reimbursable RATA shall be paid from the amount appropriated for the purpose and other personal services savings of the agency or project from where the officials and employees covered under this Circular draw their salaries. No one shall be allowed to collect RATA from more than one source .xxxi (emphasis supplied) Petitioner judge appealed to COA Regional Director Gregoria S. Ong who, however, upheld the opinion of Provincial Auditor Dalisay and who added that Resolution No. 101, Series of 1993 of the Sangguniang Bayan of Naujan failed to comply with Section 3 of Local Budget Circular No. 53 dated September 1, 1993 outlining the conditions for the grant of allowances to judges and other national officials or employees by the local government units (LGUs). Section 3 of the said budget circular provides that: Sec. 3 Allowances. ─ LGUs may grant allowances/additional compensation to the national government officials/employees assigned to their locality at rates authorized by law, rules and regulations and subject to the following preconditions: a. That the annual income or finances of the municipality, city or province as certified by the Accountant concerned will allow the grant of the allowances/additional compensation without exceeding the general limitations for personal services under Section 325 of RA 7160; That the budgetary requirements under Section 324 of RA 7160 including the full requirement of RA 6758 have been satisfied and provided fully in the budget as certified by the Budget Officer and COA representative in the LGU concerned; That the LGU has fully implemented the devolution of personnel/functions in accordance with the provisions of RA 7160; That the LGU has already created mandatory positions prescribed in RA 7160; and
That similar allowances/additional compensation are not granted by the national government to the officials/employees assigned to the LGU.xxxi
Petitioner judge appealed the unfavorable resolution of the Regional Director to the Commission on Audit. In the meantime, a disallowance of the payment of the P1,600 monthly allowance to petitioner was issued. Thus he received his P1,600 monthly allowance from the Municipality of Naujan only for the period May 1993 to January 1994. On September 14, 1999, the COA issued its decision affirming the resolution of Regional Director Gregoria S. Ong: The main issue . . . is whether or not the Municipality of Naujan, Oriental Mindoro can validly provide RATA to its Municipal Judge, in addition to that provided by the Supreme Court. Generally, the grant of (RATA) [sic] to qualified national government officials and employees pursuant to Section 36 of R.A. 7645 [General Appropriations Act of 1993] and NCC No. 67 dated 01 January 1992 is subject to the following conditions to wit: 1. Payable from the programmed /appropriated amount and others from personal services savings of the respective offices where the officials or employees draw their salaries; Not exceeding the rates prescribed by the Annual General Appropriations Act; Officials /employees on detail with other offices or assigned to serve other offices or agencies shall be paid from their parent agencies; No one shall be allowed to collect RATA from more than one source.
2. 3. 4.
On the other hand, the municipal government may provide additional allowances and other benefits to judges and other national government officials or employees assigned or stationed in the municipality, provided, that the finances of the municipality allow the grant thereof pursuant to Section 447, Par. 1 (xi), R.A. 7160, and provided further, that similar allowance/additional compensation are not granted by the national government to the official/employee assigned to the local government unit as provided under Section 3(e) of Local Budget Circular No. 53, dated 01 September 1993. The conflicting provisions of Section 447, Par. (1) (xi) of the Local Government Code of 1991 and Section 36 of the General Appropriations Act of 1993 [RA 7645] have been harmonized by the Local Budget Circular No. 53 dated 01 September 1993, issued by the Department of Budget and Management pursuant to its powers under Section 25 and Section 327 of the Local Government Code. The said circular must be adhered to by the local government units particularly Section 3 thereof which provides the implementing guidelines of Section 447, Par. (1) (xi) of the Local Government Code of 1991 in the grant of allowances to national government officials/employees assigned or stationed in their respective local government units. Consequently, the subject SB Resolution No. 101 dated 11 May 1993 of the Sangguniang Bayan of Naujan, Oriental Mindoro, having failed to comply with the inherent precondition as defined in Section 3 (e). . . is null and void. Furthermore, the Honorable Judge Tomas C. Leynes, being a national government official is prohibited to receive additional RATA from the local government fund pursuant to Section 36 of the General
ORIENTAL MINDORO BY VIRTUE OF ITS RESOLUTION NO. RESTRICT A MUNICIPAL GOVERNMENT FROM EXERCISING ITS GIVEN LEGISLATIVE POWERS OF PROVIDING ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO NATIONAL EMPLOYEES STATIONED OR ASSIGNED TO THEIR MUNICIPALITY FOR AS LONG AS THEIR FINANCES SO ALLOW. WHICH GRANTED ADDITIONAL ALLOWANCE TO THE MUNICIPAL TRIAL JUDGE OF NAUJAN. 7645 for 1993) and National Compensation Circular No. ORIENTAL MINDORO AND INCREASING HIS CURRENT REPRESENTATION AND TRAVELLING ALLOWANCE (RATA) TO AN AMOUNT EQUIVALENT TO THAT RECEIVED MONTHLY BY SANGGUNIANG MEMBERS IN PESOS: ONE THOUSAND SIX HUNDRED (P1. ORIENTAL MINDORO. V WHETHER OR NOT PETITIONER WAS ENTITLED TO RECEIVE THE ADDITIONAL ALLOWANCES GRANTED TO HIM BY THE MUNICIPALITY OF NAUJAN. National Compensation Circular No. 67 (hereafter NCC No. BY THE ISSUANCE OF BUDGET CIRCULARS.128 Appropriations Act (R. II WHETHER OR NOT THE POWER OF MUNICIPAL GOVERNMENTS TO GRANT ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO NATIONAL GOVERNMENT EMPLOYEES STATIONED IN THEIR MUNICIPALITY IS VERY EXPLICIT AND UNEQUIVOCAL UNDER THE LOCAL GOVERNMENT CODE OF 1991 PARTICULARLY SECTION 447 IN RELATION TO SECTIONS 17 AND 22 THEREOF. IS VALID. III WHETHER OR NOT THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM) CAN.A. 2000.xxxi Respondent bases its contention on the following: 1. petitioner filed the instant petition. SERIES OF 1993 OF NAUJAN. 1O1. raising the following assignments of error for our consideration: I WHETHER OR NOT RESOLUTION NO.600 monthly allowance to petitioner Judge Leynes for the reason that the municipality could not grant RATA to judges in addition to the RATA already received from the Supreme Court. 1992 of the Department of Budget and Management (DBM) which provides that (a) the RATA of national officials and employees shall be payable from the . POSITION OF COA Respondent Commission on Audit opposes the grant by the Municipality of Naujan of the P1.xxxi (emphasis ours) ASSIGNMENTS OF ERROR Petitioner judge filed a motion for reconsideration of the above decision but it was denied by the Commission in a resolution dated May 30. SERIES OF 1993. Aggrieved. 101.00) EFFECTIVE 1993. IV WHETHER OR NOT THE LOCAL GOVERNMENT CODE OF 1991 PARTICULARLY SECTION 447 (a) (1) (xi) WAS EXPRESSLY OR IMPLIEDLY REPEALED OR MODIFIED BY REPUBLIC ACT 7645 AND THE GENERAL APPROPRIATIONS ACT OF 1993. 67) dated January 1. 67 dated 1 January 1992.600.
1418 dated July 18. the budgetary allotment of the Judiciary constitutes only a small percentage of the national budget. the State is cognizant of the need to maintain the independence of the Judiciary. provincial.xxxi 3. Petitioner emphasizes that budget circulars must conform to. POSITION OF PETITIONER Petitioner judge. 2. do hereby direct: 1. WHEREAS. WHEREAS. willing and able to pay additional allowances to Judges of various courts within their respective territorial jurisdiction. 1418): WHEREAS.xxxi HISTORY OF GRANT OF ALLOWANCES TO JUDGES The power of local government units (LGUs) to grant allowances to judges stationed in their respective territories was originally provided by Letter of Instruction No. “3. on the other hand. asserts that the municipality is expressly and unequivocally empowered by RA 7160 (the Local Government Code of 1991) to enact appropriation ordinances granting allowances and other benefits to judges stationed in its territory. President of the Republic of the Philippines. FERDINAND E. the General Appropriations Act of 1993 (RA 7645) which provided that the RATA of national officials shall be payable from the programmed appropriations of their respective offices and Local Budget Circular No. 96 is hereby amended to read as follows: The allowances provided in this letter shall be borne exclusively by the National Government. “when the finances of the municipal government allow. some local government units are ready. Petitioner also asserts that the DBM cannot amend or modify a substantive law like the Local Government Code of 1991 through mere budget circulars. the provisions of the law it seeks to implement. 1984 (hereafter LOI No. present economic conditions adversely affected the livelihood of the members of the Judiciary. 1993 of the DBM which prohibits local government units from granting allowances to national government officials or employees stationed in their localities when such allowances are also granted by the national government or are similar to the allowances granted by the national government to such officials or employees. However.” The Code does not impose any other restrictions in the exercise of such power by the municipality.129 programmed appropriations or personal services savings of the agency where such officials or employees draw their salary and (b) no one shall be allowed to collect RATA from more than one source. WHEREAS. city and municipal governments may pay additional allowances to the members and personnel of the Judiciary assigned in their respective . Section 3 of Letter of Implementation No. not modify or amend. that is. 53) dated September 1. Section 447(a)(1)(xi) of the Local Government Code of 1991 imposes only one condition. THEREFORE. MARCOS. 53 (hereafter LBC No. I. NOW.
4. (emphasis ours)”xxxi On June 25. judges of the Judiciary are hereby allowed to continue to receive allowances at the same rates which they have been receiving from the Local Government Units as of June 30. That the subject allowance shall be given only to judges who were receiving the same as of June 30. the following principles should be noted: .130 areas out of available local funds but not to exceed P1.00. the DBM issued Circular No. We held that “setting a uniform amount for the grant of allowances (was) an inappropriate way of enforcing said criterion.xxxi The power of the LGUs to grant allowances and other benefits to judges and other national officials stationed in their respective territories was expressly provided in Sections 447(a)(1)(xi).xxxi We ruled there that the Local Government Code of 1991 clearly provided that LGUs could grant allowances to judges. et al.xxxi ESTABLISHED PRINCIPLES INVOLVED From the foregoing history of the power of LGUs to grant allowances to judges. 1991. 55 (hereafter LBC No. On March 15. and That the subject allowance shall automatically terminate upon transfer of a judge from one local government unit to another local government unit.” Accordingly. 1994. 1989. 1989 and shall be co-terminous with the incumbent judges. 91-7 outlining the guidelines for the continued receipt of allowances by judges from LGUs: Consistent with the constitutional provision on the fiscal autonomy of the judiciary and the policy of the National Government of allowing greater autonomy to local government units. we struck down the above circular in Dadole.500. 2002. COA. P700. that in Metropolitan Manila. That it shall be made only in compliance with the policy of non-diminution of compensation received by the recipient judge before the implementation of the salary standardization. 5. vs. 458(a)(1)(xi) and 468(a)(1)(xi) of the Code. the city and municipal governments therein may pay additional allowances not exceeding P3. On December 3. (emphasis ours) 2. the DBM issued Local Budget Circular No. we declared that the DBM exceeded its power of supervision over LGUs by imposing a prohibition that did not jibe with the Local Government Code of 1991. subject only to the condition that the finances of the LGUs allowed it. 3. the amount should not exceed P1.000. Congress enacted RA 7160. On October 10.00. 55) setting out the maximum amount of allowances that LGUs may grant to judges.000 and for municipalities. That payment of the above shall always be subject to the availability of local funds. subject to the following guidelines: 1. For provinces and cities. That the continuance of payment of subject allowance to the recipient judge shall be entirely voluntary and non-compulsory on the part of the Local Government Units. 1991. Provided. otherwise known as the Local Government Code of 1991.
53 dated September 1. public elementary and high school teachers. shows that this was not so. and in this connection shall: (xi) When the finances of the municipal government allow.xxxi Respondent COA alleges that Section 36 of RA 7645 (the GAA of 1993) repealed Section 447(a)(l)(xi) of RA 7160 (the LGC of 1991). 91-7 dated June 25. as the legislative body of the municipality. shall enact ordinances. 55 dated March 15. provides: (a) The sangguniang bayan. 1992. contends that the above section has been repealed. It is also an elementary principle in statutory construction that repeal of statutes by implication is not favored. at present. the national government merely tries to limit the amount of allowances LGUs may grant to judges and in the recent case of Dadole. 458 and 468 of the Local Government Code of 1991. 3. et al. being a mere administrative circular.xxxi It is elementary in statutory construction that an administrative circular cannot supersede. it is expressly and unequivocally provided in Sections 447. 2.131 1.xxxi In the present case. 1991 and LBC No. 1994 indicates that the national government recognizes the power of LGUs to grant such allowances to judges. 1418) and. however. Section 36 of RA 7645 merely provided for the different rates of RATA payable to . A review of the two laws. the Local Government Code of 1991. however.600 monthly allowance by the Municipality of Naujan to petitioner Judge Leynes. OUR RULING We rule in favor of petitioner judge. modify or nullify a statute. vs. The legislature is assumed to know the existing laws on the subject and cannot be presumed to have enacted inconsistent or conflicting statutes. (emphasis ours) Respondent COA. RA 7645 (the General Appropriations Act of 1993) and LBC No. 67. NCC No. COA. 55. 67 dated January 1. and other national government officials stationed in or assigned to the municipality. Respondent COA erred in opposing the grant of the P1. 91-7. in Circular No. thus the latter cannot repeal or amend it. prosecutors. depending on availability of funds. the power of LGUs to grant allowances to judges has long been recognized (since 1984 by virtue of LOI No. the issuance of DBM Circular No. the Court upheld the constitutionally enshrined autonomy of LGUs to grant allowances to judges in any amount deemed appropriate. abrogate. 1993. and shall: (1) Approve ordinances and pass resolutions necessary for an efficient and effective municipal government. 4. the national government merely provides the guidelines for the continued receipt of allowances by judges from LGUs while in LBC No. modified or amended by NCC No. DISCUSSION OF OUR RULING Section 447(a)(1)(xi) of RA 7160. unless it is manifest that the legislature so intended. A statute is superior to an administrative circular. . approve resolutions and appropriate funds for the general welfare of the municipality and its inhabitants . in accordance with the Local Government Code of 1991. . cannot repeal a substantive law like RA 7160.. provide for additional allowances and other benefits to judges.
Moreover. In the absence. commutable and reimbursable RATA shall be paid from the amount appropriated for the purpose and other personal services savings of the agency or project from where the officials and employees covered under this Circular draw their salaries. Rules and Regulations: 3. the presumption against implied repeal becomes stronger when. Funding Source: In all cases. Rather. RA 7160 (the LGC of 1991) is a special lawxxxi which exclusively deals with local government units (LGUs).1. considers and makes special provisions for the particular circumstances dealt with by the special law. 67.xxxi . cannot be deemed to have intended an amendment. in passing a law of special character. and the conditions enumerated under the pertinent sections of the General Provisions of the annual General Appropriations Act (GAA): 4. that is. was a general lawxxxi which outlined the share in the national fund of all branches of the national government. being a general law. RA 7645 therefore. No one shall be allowed to collect RATA from more than one source. the legislature.132 national government officials or employees.xxxi The controversy actually centers on the seemingly sweeping provision in NCC No. outlining their powers and functions in consonance with the constitutionally mandated policy of local autonomy.xxxi In this case. 67 read: 3.xxxi The principle is expressed in the maxim generalia specialibus non derogant. could not have. a general law does not nullify a specific or special law. This being so.xxxi Because a statute is enacted as a whole and not in parts or sections. depending on their position. there was no other provision in RA 7645 from which a repeal of Section 447(a) (l)(xi) of RA 7160 could be implied. shall be in accordance with the rates prescribed for each of the following officials and employees and those of equivalent ranks. by adopting a general law containing provisions repugnant to those of the special law and without making any mention of its intention to amend or modify such special law. The pertinent provisions of NCC No. and stated that these amounts were payable from the programmed appropriations of the parent agencies to which the concerned national officials or employees belonged. one part is as important as the others. repealed RA 7160.1 Payment of RATA. repeal or modification of the latter. RA 7160 should be taken as the exception to RA 7645 in the absence of circumstances warranting a contrary conclusion.” Does this mean that judges cannot receive allowances from LGUs in addition to the RATA from the Supreme Court? For reasons that will hereinafter be discussed. 67 which states that “no one shall be allowed to collect RATA from more than one source. one law is special and the other is general. we cannot presume such intention on the part of the legislature. whether commutable or reimbursable. we apply the principle in statutory construction that force and effect should not be narrowly given to isolated and disjoined clauses of the law but to its spirit. (emphasis ours) In construing NCC No. by mere implication. as in this case. of any clear repeal of Section 447(a)(l)(xi) of RA 7160. broadly taking all its provisions together in one rational view. Furthermore. A provision or section which is unclear by itself may be clarified by reading and construing it in relation to the whole statute. The reason for this is that the legislature. on the other hand. therefore. we answer in the negative. the statute should be construed and given effect as a whole. RA 7645 (the GAA of 1993).
National agency of course refers to the different offices. RA 7645. the purpose clause of NCC No. bureaus and departments comprising the national government. Stated otherwise. not the local funds of LGUs. he should get his RATA only from his parent national agency and not from the other national agency he is detailed to. It was issued primarily to make the grant of RATA to national officials under the national budget uniform. 67 be construed as nullifying the power of LGUs to grant allowances to judges under the Local Government Code of 1991. Panlungsod or Panlalawigan). thus standardizing the grant of RATA by national agencies. which shall apply to each type of allowance: Officials on detail with other offices. 67 reads: This Circular is being issued to ensure uniformity and consistency of actions on claims for representation and transportation allowance (RATA) which is primarily granted by law to national government officials and employees to cover expenses incurred in the discharge or performance of their duties and responsibilities. The following officials and those of equivalent rank as may be determined by the Department of Budget and Management (DBM) while in the actual performance of their respective functions are hereby granted monthly commutable representation and transportation allowances payable from the programmed appropriations provided for their respective offices.xxxi An LGU is obviously not a national agency. Thus. 67 as a whole then. In other words. This can be gleaned from the fact that the sentence “no one shall be allowed to collect RATA from more than one source” (the controversial prohibition) immediately follows the sentence that RATA shall be paid from the budget of the national agency where the concerned national officials and employees draw their salaries. By no stretch of the imagination can NCC No. The budgets of these departments or offices are fixed annually by Congress in the General Appropriations Act. by all subsequent GAAs for that matter. what it seeks to prevent is the dual collection of RATA by a national official from the budgets of “more than one national agency.133 Taking NCC No. said prohibition clearly does not apply to LGUs like the Municipality of Naujan. (emphasis ours) Clearly therefore. including officials of the Commission of Audit assigned to serve other offices or agencies. NCC No.” We emphasize that the other source referred to in the prohibition is another national agency. Since the other source referred in the controversial prohibition is another national agency. The prohibition in NCC No. it applies only to the national funds administered by the DBM. when a national official is on detail with another national agency. General Appropriations Act of 1993: Representation and Transportation Allowances. not exceeding the rates indicated below. because the GAAs all essentially provide that (1) the RATA of national officials shall be payable from the budgets of their respective national agencies and (2) those officials on detail with other national agencies shall be paid their RATA only from the budget of their parent national agency: Section 36. . the prohibition in NCC No. 67 is only against the dual or multiple collection of RATA by a national official from the budgets of two or more national agencies. shall be paid the allowance herein authorized from the appropriations of their parent agencies. The fact that the other source is another national agency is supported by RA 7645 (the GAA of 1993) invoked by respondent COA itself and. not by Congress. 67 does not apply to LGUs. Without doubt. in fact. 67 is in fact an administrative tool of the DBM to prevent the much-abused practice of multiple allowances. Its annual budget is fixed by its own legislative council (Sangguniang Bayan.
paragraph (e) thereof is invalid. e. violates Section 447(a)(l)(xi) of the Local Government Code of 1991. a circular must conform to the law it seeks to implement and should not modify or amend it. by prohibiting LGUs from granting allowances similar to the allowances granted by the national government. That the budgetary requirements under Section 324 of RA 7160 including the full requirement of RA 6758 have been satisfied and provided fully in the budget as certified by the Budget Officer and COA representative in the LGU concerned. Section 3. in effect.xxxi we rule that Section 3. we ensure the genuine and meaningful local autonomy of LGUs. Section 3 (e) of LBC No. by outrightly prohibiting LGUs from granting allowances to judges whenever such allowances are (1) also granted by the national government or (2) similar to the allowances granted by the national government. We now discuss the next contention of respondent COA: that the resolution of the Sangguniang Bayan of Naujan granting the P1. paragraph (e) of LBC No. By upholding. city and municipal governments may grant allowances to judges as long as their finances allow. c. city or province as certified by the Accountant concerned will allow the grant of the allowances/additional compensation without exceeding the general limitations for personal services under Section 325 of RA 7160. That the annual income or finances of the municipality. That the LGU has fully implemented the devolution of personnel/functions in accordance with the provisions of RA 7160.600 monthly allowance to petitioner judge was null and void because it failed to comply with LBC No. Though LBC No. 3 Allowances. That the LGU has already created mandatory positions prescribed in RA 7160. 53 is hereby declared null and void. paragraph (e) of LBC No. . the Local Government Code of 1991. 1993: Sec.xxxi Moreover. in the present case. RA 7160. b. the power of LGUs to grant allowances to judges and leaving to their discretion the amount of allowances they may want to grant. That similar allowances/additional compensation are not granted by the national government to the officials/employees assigned to the LGU. depending on the availability of local funds. 53 of the DBM may be considered within the ambit of the President's power of general supervision over LGUs. rules and regulations and subject to the following preconditions: a. Being unduly restrictive therefore of the statutory power of LGUs to grant allowances to judges and being violative of their autonomy guaranteed by the Constitution. ─ LGUs may grant allowances/additional compensation to the national government officials/employees assigned to their locality at rates authorized by law. 53 practically prohibits LGUs from granting allowances to judges and.134 To rule against the power of LGUs to grant allowances to judges as what respondent COA would like us to do will subvert the principle of local autonomy zealously guaranteed by the Constitution.xxxi As already stated. clearly provides that provincial. Section 3. d. 53 dated September 1.xxxi The Local Government Code of 1991 was specially promulgated by Congress to ensure the autonomy of local governments as mandated by the Constitution. totally nullifies their statutory power to do so. 53.
The argument is misplaced. It failed to discharge such burden. 101 of the Sangguniang Bayan of Naujan did not comply with the condition provided in Section 447 of the Code. 458 and 468 of the Local Government Code of 1991 that LGUs may grant allowances to judges if their funds allow. Series of 1993. 53. Guidelines (a) to (d) were met when the Sangguniang Panlalawigan of Oriental Mindoro approved Resolution No.600 monthly allowance to petitioner judge as well as the corresponding budgets of the municipality providing for the said monthly allowance to petitioner judge. We also sustain the validity of Resolution No. we will assume. that the Sangguniang Panlalawigan of Oriental Mindoro performed what the law required it to do. that is. No costs. of the Sangguniang Bayan of Naujan for being in accordance with the law. paragraph (e) of LBC No. 53 is hereby declared NULL and VOID. i. the budgetary requirements and general limitations on the use of municipal funds provided in Sections 324 and 325 of the Code and the implementing guidelines issued by the DBM. SO ORDERED. it is well-settled that an ordinance must be presumed valid in the absence of evidence showing that it is not in accordance with the law. in the absence of proof to the contrary. city and municipal funds. thus it was null and void.xxxi Respondent COA also argues that Resolution No. we uphold its validity.135 Paragraphs (a) to (d) of said circular. Paragraphs (a) to (d) are proper guidelines for the condition provided in Sections 447. paragraphs (a) to (d). we find that the resolution of the Municipality of Naujan granting the P1. The assailed decision dated September 14. 101 of the Sangguniang Bayan of Naujan granting the P1. are valid as they are in accordance with Sections 324xxxi and 325xxxi of the Local Government Code of 1991. 101.600 monthly allowance to petitioner judge fully complied with the law. review the resolution and the corresponding budgets of the Municipality of Naujan to make sure that they complied with Sections 324 and 325 of the Code. Section 3 of LBC No.xxxi We presume the regularity of the Sangguniang Panlalawigan’s official act. In sum.xxxi Respondent COA had the burden of proving that Resolution No.e. 1999 of the Commission of Audit is hereby SET ASIDE and Section 3. however. Under Section 327 of the Local Government Code of 1991. Respondent COA also had the burden of showing that the Sangguniang Panlalawigan of Oriental Mindoro erroneously approved said resolution despite its non-compliance with the requirements of the law.. these respectively provide for the budgetary requirements and general limitations on the use of provincial. On the contrary. 53. the Sangguniang Panlalawigan was specifically tasked to review the appropriation ordinances of its component municipalities to ensure compliance with Sections 324 and 325 of the Code. WHEREFORE. the petition is hereby GRANTED. Moreover. . 101 of the Sangguniang Bayan of Naujan failed to comply with paragraphs (a) to (d) of LBC No. Thus. we hereby affirm the power of the Municipality of Naujan to grant the questioned allowance to petitioner Judge Leynes in accordance with the constitutionally mandated policy of local autonomy and the provisions of the Local Government Code of 1991. Considering said duty of the Sangguniang Panlalawigan.
OCAMPO. Rep. GIOVANNI A. BELTRAN. EDMUNDO L. Respondents. 2006 BAYAN MUNA Representatives SATUR C. CUSTODIO. 167798 April 19. DR. TINIO of ACT. MAZA.136 Republic of the Philippines SUPREME COURT Manila EN BANC G. and ROQUE M. VIRADOR. DEPARTMENT OF BUDGET and MANAGEMENT. vs. WILFREDO MARBELLA GARCIA. SHARON R. of BAYAN. J. GABRIELA WOMEN’S PARTY Representative LIZA L. CARRANZA. NATIONAL FEDERATION OF LABOR UNIONS-KILUSANG MAYO UNO (NAFLU-KMU). NATIONAL ECONOMIC DEVELOPMENT AUTHORITY. RENATO CONSTANTINO. DUREMDES of the NATIONAL COUNCIL OF CHURCHES IN THE PHILIPPINES. Respondents.R. Rep. and JOEL G. Petitioners. USTAREZ. of KMP. MARIE HILAO-ENRIQUEZ of KARAPATAN. No. EMILIA P. ROMULO NERI. LORENZO R. and THE SECRETARY. TAN. LANA LINABAN of GABRIELA. ANAKPAWIS Representatives RAFAEL V. AGABIN. Rep. TAÑADA III. DEAN PACIFICO H. ESCUDERO.: . x-----------------------------------x G. vs. EDUARDO ERMITA. JR. CAROL PAGADUAN-ARAULLO and RENATO M. No. TEODORO A. in his capacity as Executive Secretary. MARIANO and CRISPIN B. AMADO GAT INCIONG. SALVADOR T. in his capacity as Director-General of the NATIONAL ECONOMIC and DEVELOPMENT AUTHORITY (NEDA) and the Administrator of the NATIONAL STATISTICS OFFICE (NSO). REYES. JOSELITO V. FERDINAND GAITE of COURAGE. Petitioners. ANTONIO L.. and BRO. FERNANDEZ (FSC) of the ASSOCIATION OF MAJOR RELIGIOUS SUPERIORS OF THE PHILIPPINES (AMRSP). ZIALCITA. MARTIN T. 2006 KILUSANG MAYO UNO. JR. DAPULANG. 167930 April 19. CASIÑO. JR. EDUARDO C. FRANCIS G.R. TAPANG of AGHAM. DECISION CARPIO. THE DIRECTOR-GENERAL.
Section 2. and prevent violations of laws involving false names and identities. To reduce costs and thereby lessen the financial burden on both the government and the public brought about by the use of multiple ID cards and the maintenance of redundant database containing the same or related information. the existing multiple identification systems in government have created unnecessary and costly redundancies and higher costs to government. WHEREAS. WHEREAS. reads: REQUIRING ALL GOVERNMENT AGENCIES AND GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS TO STREAMLINE AND HARMONIZE THEIR IDENTIFICATION (ID) SYSTEMS. a unified identification system will facilitate private businesses.net – All government agencies. prohibition. issued by President Gloria Macapagal-Arroyo on 13 April 2005. EO 420. 420 (EO 420) on the ground that it is unconstitutional. there is urgent need to streamline and integrate the processes and issuance of identification cards in government to reduce costs and to provide greater convenience for those transacting business with government. To ensure greater convenience for those transacting business with the government and those availing of government services. AND FOR OTHER PURPOSES WHEREAS. including government-owned and controlled corporations. are hereby directed to adopt a unified multi-purpose ID system to ensure the attainment of the following objectives: a. d. I. seeking the nullification of Executive Order No. To enhance the integrity and reliability of government-issued ID cards. and e. enhance the integrity and reliability of government-issued identification cards in private transactions. c. To facilitate access to and delivery of quality and effective government service. Adoption of a unified multi-purpose identification (ID) system for government. Section 3. AND AUTHORIZING FOR SUCH PURPOSE THE DIRECTOR-GENERAL. President of the Republic of the Philippines by virtue of the powers vested in me by law. NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY TO IMPLEMENT THE SAME. b.1avvphil. Data requirement for the unified ID system – The data to be collected and recorded by the participating agencies shall be limited to the following: Any prominent distinguishing features like moles and others . do hereby direct the following: Section 1. NOW. WHEREAS. Coverage – All government agencies and government-owned and controlled corporations issuing ID cards to their members or constituents shall be covered by this executive order. To facilitate private businesses and promote the wider use of the unified ID card as provided under this executive order.137 This case involves two consolidated petitions for certiorari. GLORIA MACAPAGAL-ARROYO. good governance is a major thrust of this Administration. while making it inconvenient for individuals to be holding several identification cards. and mandamus under Rule 65 of the Rules of Court. THEREFORE.
shall have the following functions and responsibilities: a. National Economic Development Authority. and the pertinent agencies shall adopt such safeguard as may be necessary and adequate to ensure that the right to privacy of an individual takes precedence over efficient public service delivery. include the following: a. which shall be used only for purposes of establishing the identity of a person. to provide such assistance as may be necessary or required for the effective performance of its functions. the Commission on Elections (COMELEC). Adopt within sixty (60) days from the effectivity of this executive order a unified government ID system containing only such data and features. b. as a minimum. to Harmonize All Government Identification Systems. the Director-General. National Economic and Development Authority. including the print of the right thumbmark. and with other branches or instrumentalities of the government. – The DirectorGeneral. shall be limited to those specified in Section 3 of this executive order.138 Tax Identification Number (TIN) Provided that a corresponding ID number issued by the participating agency and a common reference number shall form part of the stored ID data and. is hereby authorized to streamline and harmonize all government ID systems. d. Functions and responsibilities of the Director-General. and d. Section 4. National Economic and Development Authority. Authorizing the Director-General. e. – In addition to his organic functions and responsibilities. – The Director-General. to validly establish the identity of the card holder: b. as indicated in Section 3 above. Safeguards. National Economic and Development Authority. and . Promulgate such rules or regulations as may be necessary in pursuance of the objectives of this executive order. b. In no case shall the collection or compilation of other data in violation of a person’s right to privacy shall be allowed or tolerated under this order. through their respective leagues of governors or mayors. or create sub–committees or technical working groups. Call on any other government agency or institution. c. The identification card to be issued shall be protected by advanced security features and cryptographic technology. Section 5. Stringent systems of access control to data in the identification system shall be instituted. shall appear on the face or back of the ID card for visual verification purposes. Data collected and stored for this purpose shall be kept and treated as strictly confidential and a personal or written authorization of the Owner shall be required for access and disclosure of data. National Economic and Development Authority. together with at least the first five items listed above. The data to be recorded and stored. or any of the fingerprints as collected and stored. for the purpose of ensuring government-wide adoption of and support to this effort to streamline the ID systems in government. Enter into agreements with local governments. Such safeguards shall. Section 6.
EO 420 violates the constitutional provisions on the right to privacy (i) It allows access to personal confidential data without the owner’s consent. Furthermore. 2. Torres et al. 1998. G. – All executive orders or issuances. Repealing clause. (iii) There are no compelling reasons that will legitimize the necessity of EO 420. they allege that EO 420 infringes on the citizen’s right to privacy. Section 8. 167930 allege that EO 420 is void based on the following grounds: 1. the President directs all government agencies and governmentowned and controlled corporations to adopt a uniform data collection and format for their existing identification (ID) systems. Section 7. 167798 allege that EO 420 is unconstitutional because it constitutes usurpation of legislative functions by the executive branch of the government. this 13th day of April. It completely disregards and violates the decision of this Honorable Court in Ople v. Effectivity. the implementation of the EO will use public funds not appropriated by Congress for that purpose. Furthermore. July 23. Granting without conceding that the President may issue EO 420. are hereby revoked. Funding.R. No. No. which are inconsistent with this executive order. or portions thereof.2 Issues . amended or modified accordingly. in the year of Our Lord. (ii) EO 420 is vague and without adequate safeguards or penalties for any violation of its provisions. EO 420 violates the Constitutional provision on equal protection of laws and results in the discriminatory treatment of and penalizes those without ID. 4. Section 9. the Executive Order was issued without public hearing.R.1 Petitioners in G.. No. under EO 420. Thus.R. Petitioners in G. 127685. DONE in the City of Manila. 3. EO 420 is contrary to law. – This executive order shall take effect fifteen (15) days after its publication in two (2) newspapers of general circulation.139 f. 5. A written request by the Owner of the identification card shall be required for any correction or revision of relevant data. – Such funds as may be recommended by the Department of Budget and Management shall be provided to carry out the objectives of this executive order. Two Thousand and Five. It also violates RA 8282 otherwise known as the Social Security Act of 1997. or under such conditions as the participating agency issuing the identification card shall prescribe. The Executive has usurped the legislative power of Congress as she has no power to issue EO 420.
the petitions raise two issues. "Coverage.3 SSS. (2) Home Address. Section 1 of EO 420 enumerates the purposes of the uniform data collection and format. (12) Two index fingers and two thumbmarks." Thus. Even assuming that petitioners are bereft of legal standing. Section 3 of EO 420 limits the data to be collected and recorded under the uniform ID system to only 14 specific items. (5) Signature. Hence. To reduce costs and thereby lessen the financial burden on both the government and the public brought about by the use of multiple ID cards and the maintenance of redundant database containing the same or related information. all government entities that issue IDs as part of their functions under existing laws are required to adopt a uniform data collection and format for their IDs. petitioners claim that EO 420 is a usurpation of legislative power by the President. – All government agencies and governmentowned and controlled corporations issuing ID cards to their members or constituents shall be covered by this executive order. The petitions also present a justiciable controversy ripe for judicial determination because all government entities currently issuing identification cards are mandated to implement EO 420. which petitioners claim is patently unconstitutional. and e. the purposes of the uniform ID data collection and ID format are to reduce costs. and provide convenience to the people served by government entities. the Court takes cognizance of the petitions. d. achieve efficiency and reliability. To facilitate access to and delivery of quality and effective government service. To facilitate private businesses and promote the wider use of the unified ID card as provided under this executive order. namely: (1) Name. Examples of these government entities are the GSIS. petitioners claim that EO 420 infringes on the citizen’s right to privacy. b. (6) Date of Birth. To enhance the integrity and reliability of government-issued ID cards.4 Philhealth." EO 420 applies only to government entities that issue ID cards as part of their functions under existing laws. c. (9) Name of Parents. Respondents question the legal standing of petitioners and the ripeness of the petitions. The Court’s Ruling The petitions are without merit. (8) Marital Status.140 Essentially. (11) Weight. and (14) Tax Identification Number. These government entities have already been issuing ID cards even prior to EO 420.8 and similar government entities. To ensure greater convenience for those transacting business with the government and those availing of government services.5 Mayor’s Office.7 PRC. namely: a. (7) Place of Birth. insure compatibility. (3) Sex. (10) Height. In short. On the Alleged Usurpation of Legislative Power Section 2 of EO 420 provides. Second. (13) Any prominent distinguishing features like moles or others. the Court considers the issues raised under the circumstances of paramount public concern or of transcendental significance to the people. Section 1 of EO 420 directs these government entities to "adopt a unified multi-purpose ID system. .6 LTO. (4) Picture. First.
Government entities cannot collect or record data.141 These limited and specific data are the usual data required for personal identification by government entities. the Supreme Court’s ID contains far more data than the proposed uniform ID for government entities under EO 420. government entities like LTO require considerably more data from applicants for identification purposes. (7) Weight. This is purely an administrative matter. Article VII of the 1987 Constitution provides that the "President shall . (12) Tax Identification Number. If we consider that the picture in the ID can generally also show the sex of the employee. they can also adopt by mutual agreement a uniform ID format. In contrast. and does not involve the exercise of legislative power. and (15) Signature. (3) Position. and even by the private sector. ease of verification and thus increased reliability of data. Thus. and making their ID formats uniform. (2) Picture. the heads of these existing government entities can enter into a memorandum of agreement making their systems uniform. (9) Color of Hair. some government entities collect and record more data than what EO 420 allows. These benefits are savings in terms of procurement of equipment and supplies. the data collected and recorded by government entities are disparate. and the user-friendliness of a single ID format for all government entities. EO 420 will reduce the data required to be collected and recorded in the ID databases of the government entities. Making the data collection and recording of government entities unified. If the government entities can individually adopt a format for their own ID pursuant to their regular functions under existing laws. and the IDs they issue are dissimilar. The nature of the data contained in the Supreme Court ID is also far more financially sensitive. Such an act is certainly within the authority of the heads or governing boards of the government entities that are already authorized under existing laws to issue IDs. agency number and the common reference number. (8) Complexion. (11) Right Thumbmark. compatibility in systems as to hardware and software. (5) ID Number. greater efficiency. There is no dispute that government entities can individually limit the collection and recording of their data to the 14 specific items in Section 3 of EO 420. the uniform ID format under Section 3 of EO 420 requires only "the first five items listed" in Section 3. the Court’s ID actually contains 16 data. namely: (1) Name. especially if the uniform format will result in substantial savings. There is also no dispute that these government entities can individually adopt the ID format as specified in Section 3 of EO 420. First. Second. will admittedly achieve substantial benefits. plus the fingerprint.9 the IDs that the Court issues to all its employees. At present. at present. (6) Height. the President may by executive or administrative order direct the government entities under the Executive department to adopt a uniform ID data collection and format. In the case of the Supreme Court. (14) Name and Address of Person to be Notified in Case of Emergency. including the Justices. Under their existing ID systems. (10) Blood Type. Various laws allow several government entities to collect and record data for their ID systems. Any one who applies for or renews a driver’s license provides to the LTO all these 14 specific data. Section 17. for identification purposes. At present. or only eight specific data. and optimum compatibility. other than the 14 specific data. A unified ID system for all these government entities can be achieved in either of two ways. either expressly or impliedly by the nature of the functions of these government entities. specifically the Tax Identification Number. (13) GSIS Policy Number. contain 15 specific data. (4) Office Code Number.
The President has not usurped legislative power in issuing EO 420. Legislative power is the authority to make laws and to alter or repeal them. bureaus and offices. The purpose of all these ID cards is simply to insure the proper identification of a person as an employee. EO 420 does not apply to the Judiciary. Thus. improve public services. such that the citizen’s right to privacy is infringed. There are several laws mandating government entities to reduce costs. under this constitutional power of control the President can direct all government entities. when the ID card system is compulsory on all branches of government. increase efficiency. student or member of a club. although imposed as a condition for exercising a privilege. to adopt a uniform ID data collection and ID format to achieve savings. or member of a club.10 This only shows that EO 420 does not establish a national ID system because legislation is needed to establish a single ID system that is compulsory for all branches of government. improve public services. Second. the President is simply performing the constitutional duty to ensure that the laws are faithfully executed.142 have control of all executive departments. when the ID card system requires the collection and recording of personal data beyond what is routinely or usually required for such purpose. reliability. as well as compulsory on all citizens whether they have a use for the ID card or not. student.11 The adoption of a uniform ID data collection and format under EO 420 is designed to reduce costs. What require legislation are three aspects of a government maintained ID card system. Of course. The Constitution also mandates the President to ensure that the laws are faithfully executed. when the implementation of an ID card system requires a special appropriation because there is no existing appropriation for such purpose. These ID cards. EO 420 reduces costs. are voluntary because a person is not compelled to be an employee. and convenience to the public." The same Section also mandates the President to "ensure that the laws be faithfully executed. The President’s constitutional power of control is self-executing and does not need any implementing legislation. alter or repeal any law but merely implemented and executed existing laws. increase efficiency. including the independent constitutional commissions." Certainly. EO 420 does not require any special appropriation because the existing ID card systems of government entities covered by EO 420 have the proper . and in general. in the exercise of their functions under existing laws. the President did not make. or to the COMELEC which under existing laws is also authorized to issue voter’s ID cards. efficiency. and in general. EO 420 is also compliance by the President of the constitutional duty to ensure that the laws are faithfully executed. in issuing EO 420. Private and public schools also routinely issue ID cards to their students. reliability. as well as insures efficiency. In the present case. Thus. In issuing EO 420. Clearly. First. EO 420 is an exercise of Executive power – the President’s constitutional power of control over the Executive department. The act of issuing ID cards and collecting the necessary personal data for imprinting on the ID card does not require legislation. Even private clubs and associations issue ID cards to their members. the President’s power of control is limited to the Executive branch of government and does not extend to the Judiciary or to the independent constitutional commissions. EO 420 is well within the constitutional power of the President to promulgate. Third. compatibility and user-friendliness in the implementation of current ID systems of government entities under existing laws. Private employers routinely issue ID cards to their employees. EO 420 is simply an executive issuance and not an act of legislation. compatibility. Thus.
Even the Supreme Court has its own ID system for employees of the Court and all first and second level courts. the data collected and recorded under EO 420 are far less than the data collected and recorded under the ID systems existing prior to EO 420. SSS. seven less data than what the Supreme Court’s ID shows. and provide user-friendly service to the public. Every government entity that presently issues an ID card will still issue its own ID card under its own name. This Court should not interfere how government entities under the Executive department should undertake cost savings. Since petitioners do not make such claim. the following safeguards are instituted: . Sandiganbayan and Court of Tax Appeals. In fact. Thus. Now. nature and extent of data to be collected and stored for their ID systems. The data collection. under Section 5 of EO 420. recording and ID card system under EO 420 will even require less data collected. EO 420 is not compulsory on all branches of government and is not compulsory on all citizens. the GSIS. insure compatibility of equipment and systems. Under EO 420. Philhealth and other government entities have been issuing ID cards in the performance of their governmental functions. stored and revealed than under the disparate systems prior to EO 420. compatibility and convenience. Also. If government entities under the Executive department decide to unify their existing ID data collection and ID card issuance systems to achieve savings. recording. they even have less basis to complain against the unified ID system under EO 420. and the ID card itself will show only eight specific data. government entities can show in their ID cards only eight of these specific data. petitioners in the present cases do not claim that the ID systems of government entities prior to EO 420 violate their right to privacy. The only difference is that the ID card will contain only the five data specified in Section 3 of EO 420. and the common reference number which is needed for cross-verification to ensure integrity and reliability of identification. LTO. In addition. The data collected and stored for the unified ID system under EO 420 will be limited to only 14 specific data. EO 420 does not establish a national ID card system. government entities can collect and record only the 14 specific data mentioned in Section 3 of EO 420. namely the Court of Appeals. In fact. and disclosure of personal identification data to protect the right to privacy. The Court is even trying to unify its ID system with those of the appellate courts. the issuance of EO 420 does not constitute usurpation of legislative power. EO 420 requires a very narrow and focused collection and recording of personal data while safeguarding the confidentiality of such data. The same is true for government entities under the Executive department. such act does not involve the exercise of any legislative power. achieve efficiency in operations. prior to EO 420.143 appropriation or funding. On the Alleged Infringement of the Right to Privacy All these years. There have also been no complaints of abuse by these government entities in the collection and recording of personal identification data. Prior to EO 420. government entities had a free hand in determining the kind. there was no executive issuance to government entities prescribing safeguards on the collection. efficiency. There is nothing legislative about unifying existing ID systems of all courts within the Judiciary. The collection of ID data and issuance of ID cards are day-to-day functions of many government entities under existing laws. There have been no complaints from citizens that the ID cards of these government entities violate their right to privacy. EO 420 does not compel all citizens to have an ID card. plus the fingerprint. the agency ID number. EO 420 applies only to government entities that under existing laws are already collecting data and issuing ID cards as part of their governmental functions.
while the first is inapplicable to the present case. The dissenting opinion cites three American decisions on the right to privacy. e." Because the facts and the issue involved in Griswold are materially different from the present case. Supreme Court declared unconstitutional a state law that prohibited the use and distribution of contraceptives because enforcement of the law would allow the police entry into the bedrooms of married couples. Luxembourg. Roe. A written request by the Owner of the identification card shall be required for any correction or revision of relevant data. Declared the U. or under such conditions as the participating agency issuing the identification card shall prescribe. The integrity of the LTO’s licensing system will suffer in the absence of a reliable ID system. f. France.S. GSIS. in contrast to the prior ID systems which are bereft of strict administrative safeguards. have sectoral cards for health. EO 420 shows no constitutional infirmity because it even narrowly limits the data that can be collected.12 Even with EO 420. . The identification card to be issued shall be protected by advanced security features and cryptographic technology. SSS.S. On its face. c. Reporters Committee for Freedom of the Press. and LTO cannot perform effectively and efficiently their mandated functions under existing laws. Philhealth. which shall be used only for purposes of establishing the identity of a person. Some one hundred countries have compulsory national ID systems. EO 420 further provides strict safeguards to protect the confidentiality of the data collected. Australia. Griswold has no persuasive bearing on the present case. health services. the Nordic Countries and Sweden.15 The last two decisions actually support the validity of EO 420. New Zealand. like the United States. Griswold v. social or other public services. Other countries which do not have national ID systems. The right to privacy does not bar the adoption of reasonable ID systems by government entities. Data collected and stored for this purpose shall be kept and treated as strictly confidential and a personal or written authorization of the Owner shall be required for access and disclosure of data. Greece. In Griswold. the U. and other specific purposes. Ireland.144 a. Without a reliable ID system. shall be limited to those specified in Section 3 of this executive order.S. Supreme Court: "Would we allow the police to search the sacred precincts of the marital bedrooms for telltale signs of the use of contraceptives? The very idea is repulsive to the notions of privacy surrounding the marriage relationship. the Philippines will still fall under the countries that do not have compulsory national ID systems but allow only sectoral cards for social security.13 U. Stringent systems of access control to data in the identification system shall be instituted. Canada. Belgium. recorded and shown compared to the existing ID systems of government entities. Justice Department v. including democracies such as Spain. The data to be recorded and stored.14 and Whalen v. and Portugal. b. government entities like GSIS. d. Philhealth and similar government entities stand to suffer substantial losses arising from false names and identities. SSS. namely. Germany. Without a reliable ID system. In no case shall the collection or compilation of other data in violation of a person’s right to privacy be allowed or tolerated under this order. Connecticut.
S. Thus. Supreme Court upheld the validity of a law that required doctors performing abortions to fill up forms. and allow the inspection of such records by public health officials. In fact. unlike the sensitive and potentially embarrassing medical records of patients taking prescription drugs. In Planned Parenthood of Central Missouri v.145 In U. These data are not only strictly confidential but also personal matters.S. Supreme Court ruled that "recordkeeping and reporting requirements that are . maintain records for seven years.16 the U. The U.S." Personal matters are exempt or outside the coverage of the people’s right to information on matters of public concern. Roe is the leading American case on the constitutional protection for control over information. Danforth. Supreme Court ruled that the Freedom of Information Act expressly exempts release of information that would "constitute an unwarranted invasion of personal privacy." and the information demanded falls under that category of exempt information. therefore. Justice Department does not collide with EO 420 but actually supports the validity EO 420. Justice Department. the ruling in U. the personal data collected and recorded under EO 420 are treated as "strictly confidential" under Section 6(d) of EO 420. Supreme Court rejected the privacy claim. The data treated as "strictly confidential" under EO 420 being private matters and not matters of public concern. In fact. The law was assailed because the database allegedly infringed the right to privacy of individuals who want to keep their personal matters confidential. Whalen v. In Whalen. these data cannot be released to the public or the press. A CBS news correspondent and the Reporters Committee demanded the criminal records of four members of a family pursuant to the Freedom of Information Act. as well as the identity of the prescribing doctors.S. the law authorized the Department of Justice to collect and preserve fingerprints and other criminal identification records nationwide. the U. the 14 specific data required for disclosure to the Philippine government under EO 420 are far less sensitive and far less personal. the issue was not whether the State could collect and store information on individuals from public records nationwide but whether the State could withhold such information from the press. the 14 specific data required under EO 420 are routine data for ID systems. Supreme Court upheld the validity of a New York law that required doctors to furnish the government reports identifying patients who received prescription drugs that have a potential for abuse. carries persuasive force for upholding the constitutionality of EO 420 as non-violative of the right to privacy.S. Subsequent U. to hospital personnel. The government maintained a central computerized database containing the names and addresses of the patients. The premise of the issue in U. Justice Department is that the State can collect and store in a central database information on citizens gathered from public records across the country.S. The U.S. to insurance companies. and declared: Disclosures of private medical information to doctors. Requiring such disclosures to representatives of the State having responsibility for the health of the community does not automatically amount to an impermissible invasion of privacy. Article III of the 1987 Constitution grants the "right of the people to information on matters of public concern." The Department of Justice treated such information as confidential. Section 7. (Emphasis supplied) Compared to the personal medical data required for disclosure to the New York State in Whalen. With the exception of the 8 specific data shown on the ID card.S. The law also authorized the Department of Justice to exchange such information with "officials of States.S. cities and other institutions. and to public health agencies are often an essential part of modern medical practice even when the disclosure may reflect unfavorably on the character of the patient. Supreme Court decisions have reiterated Whalen. Whalen. The U.
in Planned Parenthood of Southeastern Pennsylvania v.17 the U."19 a national ID system that did not exist prior to the assailed executive issuance. Petitioners have not shown how EO 420 will violate their right to privacy. the medical complications from the abortion. Obviously. In contrast. the assailed executive issuance in Ople v. recording and exhibition while prescribing comprehensive safeguards. ANTONIO T. In the present case. was annulled solely on the ground that the subject matter required legislation. reliable and user-friendly to the public. and it is only on this ground that the petition is granted by this Court. data that cannot possibly embarrass or humiliate anyone. Hence. EO 420 does not grant such government entities any power that they do not already possess under existing laws. Torres. Supreme Court upheld a law that required doctors performing an abortion to file a report to the government that included the doctor’s name. the disclosure requirements under EO 420 are far benign and cannot therefore constitute violation of the right to privacy. Torres18 is not authority to hold that EO 420 violates the right to privacy because in that case the assailed executive issuance.S. Executive Order No." Compared to the disclosure requirements of personal data that the U. "The voting is decisive only on the need for appropriate legislation. SO ORDERED. Supreme Court have upheld in Whalen. the law made such information publicly available. Danforth and Casey as not violative of the right to privacy.S. the weight of the fetus. the woman’s age. EO 420 is a proper subject of executive issuance under the President’s constitutional power of control over government entities in the Executive department. broadly drawn and devoid of safeguards. a national ID card system requires legislation because it creates a new national data collection and card issuance system where none existed before. Supreme Court stated: "The collection of information with respect to actual patients is a vital element of medical research. Philhealth and LTO less costly. WHEREFORE. SSS. As then Associate Justice. 420 is declared VALID. Casey.S. Ople v. Petitioners cannot show such violation by a mere facial examination of EO 420 because EO 420 narrowly draws the data collection. more efficient. and so it cannot be said that the requirements serve no purpose other than to make abortion more difficult. and the marital status of the woman.146 reasonably directed to the preservation of maternal health and that properly respect a patient’s confidentiality and privacy are permissible. EO 420 does not establish a national ID system but makes the existing sectoral card systems of government entities like GSIS." Again. Panganiban noted in his concurring opinion in Ople v. In case of statefunded institutions. Torres sought to establish a "National Computerized Identification Reference System. In Casey. the U. as well as under the President’s constitutional duty to ensure that laws are faithfully executed. now Chief Justice Artemio V." EO 420 applies only to government entities that already maintain ID systems and issue ID cards pursuant to their regular functions under existing laws. CARPIO . the number of prior pregnancies and abortions that the woman had. the petitions are DISMISSED. EO 420 requires disclosure of 14 personal data that are routine for ID purposes.
1977 THE PEOPLE OF THE PHILIPPINES. . Office of the Solicitor General for appellant. Sta. de los Reyes. BENJAMIN REYES. NAZARIO AQUINO and CARLO DEL ROSARIO.147 Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. Laguna. for appellees. L-32166 October 18. MACEREN CFI.:têñ. promulgated by the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the law creating the Fisheries Commission. Cruz. Jr. GODOFREDO REYES. Rustics F. AQUINO. No.R. accusedappellees. plaintiff-appellant.£îhqwâ£ This is a case involving the validity of a 1967 regulation. HON. penalizing electro fishing in fresh water fisheries. MAXIMO A. J. JOSE BUENAVENTURA. vs.
dated respectively the tenth of December.148 On March 7. and Section 4 of R. The lower court held that electro fishing cannot be penalize because electric current is not an obnoxious or poisonous substance as contemplated in section I I of the Fisheries Law and that it is not a substance at all but a form of energy conducted or transmitted by substances. with a generator colored green with attached dynamo colored gray or somewhat white. to the detriment and prejudice of the populace" (Criminal Case No. 1969 resorted to electro fishing in the waters of Barrio San Pablo Norte. the Secretary of Agriculture and Natural Resources. lakes and other bodies of fresh waters are included. Upon motion of the accused. Godofredo Reyes. the following rules and regulations regarding the prohibition of electro fishing in all waters of the Philippines are promulgated for the information and guidance of all concerned. as amended. 5429). eighteen hundred ninety eight and the seventh of November. — Words and terms used in this Order 11 construed as follows: (a) Philippine waters or territorial waters of the Philippines' includes all waters of the Philippine Archipelago. 1969 Jose Buenaventura. the executive and judicial departments cannot consider it unlawful. Pursuant to Section 4 of Act No. it should be stated that section 11 of the Fisheries Law prohibits "the use of any obnoxious or poisonous substance" in fishing. It was alleged in the complaint that the five accused in the morning of March 1. and electrocuting device locally known as sensored with a somewhat webbed copper wire on the tip or other end of a bamboo pole with electric wire attachment which was attached to the dynamo direct and with the use of these devices or equipments catches fish thru electric current. Cruz. Nazario Aquino and Carlito del Rosario were charged by a Constabulary investigator in the municipal court of Sta. 84 (62 O. It is noteworthy that the Fisheries Law does not expressly punish . 1224). since the law does not clearly prohibit electro fishing. upon the recommendation of the Commissioner of Fisheries. equipped with motor. Laguna with having violated Fisheries Administrative Order No. For the purpose of this order. SC-36).£ªwph!1 OF THE PHILIPPINES. nineteen hundred.electro fishing. rivers." Notwithstanding the silence of the law. No. The order is quoted below: ñé+. The Court of First Instance of Laguna affirmed the order of dismissal (Civil Case No. prohibiting electro fishing in all Philippine waters. Sta. The prosecution appealed. 4003. as defined in the t between the United States and Spain. 5440. Cruz by "using their own motor banca. Section 76 of the same law punishes any person who uses an obnoxious or poisonous substance in fishing with a fine of not more than five hundred pesos nor more than five thousand.A.£ªwph!1 SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS ñé+. As legal background. The lower court further held that. . The case is now before this Court on appeal by the prosecution under Republic Act No. 84-1. which destroy any aquatic animals within its cuffed reach. the municipal court quashed the complaint. and by imprisonment for not less than six months nor more than five years. promulgated Fisheries Administrative Order No.£ªwph!1 SECTION 1. — Definition.ñé+.G. 3512. Benjamin Reyes.
then the crime of electro fishing would be within the exclusive original jurisdiction of the inferior court (Sec. (c) 'Persons' includes firm. association. — Electro fishing is the catching of fish with the use of electric current. 84 adopted the fighter penalty prescribed in on 83. which amount the 83.G. — Penalty. which provides that any other violation of that law "or of any rules and regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred pesos (P200). upon the recommendation of the Fisheries Commission. 9963). 4. agent or employee. 11 of brief) assumed that electro fishing is punishable under section 83 of the Fisheries Law (not under section 76 thereof). issued Fisheries Administrative Order No. 44 [f]. such as rivers." The Court of First Instance and the prosecution (p. SEC. 5. SEC. — This Administrative Order shall take effect six (60) days after its publication in the Office Gazette. 1967 the Secretary of Agriculture and Natural Resources. 84 imposes a fm of not exceeding P500 on a person engaged in electro fishing. lakes. not raised in the briefs. the phrase "in any portion of the Philippine waters" found in section 2. Judiciary Law. dams. Thus. L-28663. — Any violation of the provisions of this Administrative Order shall subject the offender to a fine of not exceeding five hundred pesos (P500. SEC. falls within the . On June 28. SEC. Ragasi. Had Administrative Order No. or in t for not more than six months. — Repealing Provisions. by restricting the ban against electro fishing to fresh water fisheries (63 O. September 22. 84-1. — All administrative orders or parts thereof inconsistent with the provisions of this Administrative Order are hereby revoked." That assumption is incorrect because 3 of the aforequoted Administrative Order No. The equipment used are of many electrical devices which may be battery or generator-operated and from and available source of electric current.00) or imprisonment of not extending six (6) months or both at the discretion of the Court. was changed by the amendatory order to read as follows: "in fresh water fisheries in the Philippines. 3. (d) 'Fish' includes other aquatic products. amending section 2 of Administrative Order No. — It shall be unlawful for any person to engage in electro fishing or to catch fish by the use of electric current in any portion of the Philippine waters except for research. in the discretion of the court. We have discussed this pre point. It seems that the Department of Fisheries prescribed their own penalty for swift fishing which penalty is less than the severe penalty imposed in section 76 and which is not Identified to the at penalty imposed in section 83.149 (b) Electro Fishing. educational and scientific purposes which must be covered by a permit issued by the Secretary of Agriculture and Natural Resources which shall be carried at all times. — Effectivity. irrigation canals and other bodies of fresh water. 2. — Prohibition. or both. corporation. 84. swamps. because it is obvious that the crime of electro fishing which is punishable with a sum up to P500. People vs.
150 concurrent original jurisdiction of the inferior courts and the Court of First instance (People vs. (5) failure of licensed fishermen to report the kind and quantity of fish caught. the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. in the discretion of the court. 20 SCRA 596). (4) illegal taking of sponges. Had the lawmaking body intended to punish electro fishing. 3512. Republic Act No. 1. . (2) unlawful fishing in deepsea fisheries. Administrative Orders Nos." As already pointed out above. In other words. That law punishes (1) the use of obnoxious or poisonous substance. Promote and conserve our fishing resources (Sec. June 30. Its order affirming the municipal court's order of dismissal is void for lack of motion. 84 implies that electro fishing is penalized as a form of fishing by means of an obnoxious or poisonous substance under section 11. We are of the opinion that the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in issuing Fisheries Administrative Orders Nos. of section 87 of the Judiciary Law. the Penal provision of Administrative Order No. 45 and last par. or imprisonment for not more than six months. (3) the declared national policy to encourage. are devoid of any legal basis. 84 and 84-1 were not issued under section 11 of the Fisheries Law which. 1976. The reason is that the Fisheries Law does not expressly prohibit electro fishing. Laguna. 97 Phil. In this appeal. or both. and (6) other violations. 70 SCRA 531 and the cases cited therein). 84 and 84-1. as indicated above. April 30. Cruz. a provincial capital. or explosive in fishing. 4[c] and [h] Republic Act No. L-25992. Avila. the prosecution's reference to section 83 is out of place because the penalty for electro fishing under Administrative order No. This appeal shall be treated as a direct appeal from the municipal court to this Court. L-40037. (2) the function of the Commissioner of Fisheries to enforce the provisions of the Fisheries Law and the regulations Promulgated thereunder and to execute the rules and regulations consistent with the purpose for the creation of the Fisheries Commission and for the development of fisheries (Sec. in penalizing electro fishing. (See People vs. And since the instant case was filed in the municipal court of Sta. It results that the Court of First Instance of Laguna had no appellate jurisdiction over the case. the prosecution argues that Administrative Orders Nos. 84 is not the same as the penalty fixed in section 83. As electro fishing is not banned under that law. 3512. 67). This contention is not welltaken because. Republic Act No. 1967. Nazareno. Del Rosario. (3) unlawful taking of marine molusca. 84 and 84-1 and that those orders are not warranted under the Fisheries Commission. 3512). and (4) section 83 of the Fisheries Law which provides that "any other violation of" the Fisheries Law or of any rules and regulations promulgated thereunder "shall subject the offender to a fine of not more than two hundred pesos. The prosecution cites as the legal sanctions for the prohibition against electro fishing in fresh water fisheries (1) the rule-making power of the Department Secretary under section 4 of the Fisheries Law. not to the Court of First Instance of Laguna (Sec. Esperat vs. as already stated. a penal provision to that effect could have been easily embodied in the old Fisheries Law. punishes fishing by means of an obnoxious or poisonous substance. the order of d rendered by that municipal court was directly appealable to the Court.
965 on p. fixed in section 76. at present. The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition of the deficiency or silence on that point of the old Fisheries Law. 704. the ban against electro fishing was confined to fresh water fisheries. Administrative Order No. 84 and which is not provided for the old Fisheries Law. rules and regulations or parts thereof inconsistent with it (Sec. Later. in particular.151 Nowhere in that law is electro fishing specifically punished. — Illegal fishing. 3512 and 3586.£ªwph!1 SEC. if not impossible. Note that the definition of electro fishing. (m) and (d). The amendment created the impression that electro fishing is not condemnable per se. 43.. as amended. citing 11 Am. and all . Exconde 101 Phil. there is no more doubt that electro fishing is punishable under the Fisheries Law and that it cannot be penalized merely by executive revolution because Presidential Decree No. An examination of the rule-making power of executive officials and administrative agencies and. The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute an offense. 84. Administrative agent are clothed with rule-making powers because the lawmaking body finds it impracticable. (People vs. taken or gathered fish or fishery/aquatic products in Philippine waters with the use of explosives. the penalty for electro fishing is the penalty next lower to the penalty for fishing with the use of obnoxious or poisonous substances. which is found in section 1 (c) of Fisheries Administrative Order No. The decree Act No. to anticipate and provide for the multifarious . 4003. does not contemplate that such an offense fails within the category of "other violations" because. Originally. 1975 (71 O. and is not the same as the penalty for "other violations" of the law and regulations fixed in section 83 of the Fisheries Law. 534 and 553. However. Presidential Decrees Nos. That circumstances strengthens the view that the old law does not eschew all forms of electro fishing. as already shown. 49. is now found in section 3(d) of the decree. or by the use of electricity as defined in paragraphs (1). a punishment which is more severe than the penalty of a time of not excluding P500 or imprisonment of not more than six months or both fixed in section 3 of Fisheries Administrative Order No. respectively.. of Section 3 hereof: . Executive Orders. Acts. It is an admission that a mere executive regulation is not legally adequate to penalize electro fishing. in punishing electro fishing. expressly punishes electro fishing in fresh water and salt water areas. 84. which is a revision and consolidation of all laws and decrees affecting fishing and fisheries and which was promulgated on May 16. It could be tolerated in marine waters. of the Secretary of Agriculture and Natural Resources (now Secretary of Natural Resources) under the Fisheries Law sustains the view that he ex his authority in penalizing electro fishing by means of an administrative order. 3048. 84 punished electro fishing in all waters. Note further that the decree penalty electro fishing by "imprisonment from two (2) to four (4) years". P.G. That decree provides: ñé+. 4269). Republic Acts Nos. Administrative Order No. D. Jur. 11 32). It can authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. 704). — It shall he unlawful for any person to catch. obnoxious or poisonous substance. No. dealing in illegally caught fish or fishery/aquatic products. 11 25. 428. 33. take or gather or cause to be caught.
422. 376. 704. The grant of the rule-making power to administrative agencies is a relaxation of the principle of separation of powers and is an exception to the nondeleption of legislative. Del March vs. 1969." .S. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law. see of Internal Revenue vs. 2956). the multiplication of the subjects of governmental regulations. Geukeko vs. and should be for the sole purpose of carrying into effect its general provisions. 676. vs.152 and complex situations that may be encountered in enforcing the law. "as may be and proper to carry into effect the provisions thereof. and other instructions. (University of Santo Tomas vs. vs. forms instructions. Villaflor 69 Phil. 98 Phil. Interprovincial Autobus Co. 70 Phil. 382. Deluao vs. Exconde 101 Phil. Veterans Administrative." That power is now vested in the Secretary of Natural Resources by on 7 of the Revised Fisheries law. of course. 29 Phil. and for the strict enforcement and proper execution of the laws relative to matters under the jurisdiction of said Department.S. 102 Phil. Tupasi Molina. 290. 119. Board of Tax A 93 Phil. Rules that subvert the statute cannot be sanctioned. 125. 68 Phil. citing U. Grimaud 220 U. 349). Presidential December No. An administrative agency cannot amend an act of Congress (Santos vs.J. Wise & Co. citing 12 C. 712). vs. orders. regulates. not contrary to law. June 28. Section 4 of the Fisheries law provides that the Secretary "shall from time to time issue instructions. June 27. L-28952. Tupasi Molina. Phil. 29 SCRA 350)." Section 79(B) of the Revised Administrative Code provides that "the Department Head shall have the power to promulgate. 845-46. all rules. 23 SCRA 1183. Estenzo. L-21906. August 29.S. Director of Forestry vs. of Internal Revenue. Teoxon vs. As to invalid regulations. except as expressly authorized by law. 1970. Meer. Administrative regulations or "subordinate legislation calculated to promote the public interest are necessary because of "the growing complexity of modem life. 1971. General Auditing Office. Casteel. 655. to regulate the proper working and harmonious and efficient administration of each and all of the offices and dependencies of his Department. 1198. Coll. 78 Phil. powers. Manuel vs. 726. People vs.a. Williams. Members of the d of Administrators. 42 SCRA 660.S. memorandums. All that is required is that the regulation should be germane to the defects and purposes of the law and that it should conform to the standards that the law prescribes (People vs. The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it his been enacted. Inc. June 30.. 506. The lawmaking body cannot possibly provide for all the details in the enforcement of a particular statute (U. vs. Section 4(h) of Republic Act No. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. L-25619. supra). By such regulations. 51 SCRA 340. orders.oz. There is no question that the Secretary of Agriculture and Natural Resources has rulemaking powers. 109 Phil. Rosenthal and Osmeñ. 319. 1973. and the increased difficulty of administering the law" Calalang vs. but none of said rules or orders shall prescribe penalties for the violation thereof. 33 SCRA 585. Muñ. Araneta. and regulations consistent" with that law. whenever he may see fit do so. (U. December 29. L-24796. 3512 empower the Co of Fisheries "to prepare and execute upon the approval of the Secretary of Agriculture and Natural Resources. the law itself cannot be extended. 1968. 1125. L-27299. 419. vs. 706. rules and regulations consistent with the purpose" of that enactment "and for the development of fisheries. 328).
a public office must be in the statute relied upon a grant of power before he can exercise it. otherwise. who draft rules and regulations. 29 Phil. Antique Sawmills. he would be improperly exercising legislative power in his own right and not as a surrogate of the lawmaking body." The rule or regulation should be within the scope of the statutory authority granted by the legislature to the administrative agency. This Court in its decision in the Lim case.153 Administrative regulations issued by a Department Head in conformity with law have the force of law (Valerie vs. and it may not be delegated to any other body or agency" (1 Am. supra. p." (Radio Communications of the Philippines. Exconde 101 Phil. sec. 496-8). 733. orders and regulations shall be valid only when they are not contrary to the laws or the Constitution.20051. promulgated on July 26. 555. 119. 729. This is so because statutes are usually couched in general terms. objectives. after expressing the policy. vs. 1125. May 30. 938. .S. 527). 2nd. L-29236. 1974. 1960. vs. and compliance therewith may be enforced by a penal sanction provided in the law. 558). vs. Inc. vs. remedies and sanctions intended by the legislature. Social Security Commission. Jur. L. Administrative Law. Supp. "Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon the administrative agency by law. called the attention of technical men in the executive departments. 117 Phil. "except for constitutional officials who can trace their competence to act to the fundamental law itself." As noted by Justice Fernando. cited in Victories Milling Co. to the importance and necessity of closely following the legal provisions which they intend to implement so as to avoid any possible misunderstanding or confusion. 124). vs. 114 Phil. In this sense. 108 Phil. it is a requisite that he should not transcend the bound demarcated by the statute for the exercise of that power. Tupasi Molina. Inc. Secretary of culture and Natural Resources. Lim. (Davis. In other words. 73 F. The details and the manner of carrying out the law are oftentimes left to the administrative agency entrusted with its enforcement. 1091). Montgomery. August 21. partake of the nature of a statute. 197. 194. 1966. As he exercises the rule-making power by delegation of the lawmaking body. Texas Co. p. It has been held that "to declare what shall constitute a crime and how it shall be punished is a power vested exclusively in the legislature. Santiago. The rule is that the violation of a regulation prescribed by an executive officer of the government in conformity with and based upon a statute authorizing such regulation constitutes an offense and renders the offender liable to punishment in accordance with the provisions of the law (U. 1132). purposes. a violation or infringement of a rule or regulation validly issued can constitute a crime punishable as provided in the authorizing statute and by virtue of the latter (People vs." "department zeal may not be permitted to outrun the authority conferred by statute. Zayco. 17 SCRA 316). Article 7 of the Civil Code embodies the basic principle that administrative or executive acts. Inc. In case of discrepancy between the basic law and a rule or regulation issued to implement said law. 58 SCRA 493.. 127. it has been said that rules and regulations are the product of a delegated power to create new or additional legal provisions that have the effect of law. the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of the basic law (People vs.
Santos. 2nd 129-130). loiter and anchor without permission from the Secretary within three kilometers from the shoreline of Corrigidor Island. An administrative agency can have only the administrative or policing powers expressly or by necessary implication conferred upon it. Hence. the rules of administrative officers and boards. While an administrative agency has the right to make ranks and regulations to carry into effect a law already enacted. 2nd 322. without permission from the Secretary of Agriculture and Natural Resources upon recommendation of the military and naval authorities concerned. 300. which have the effect of extending. State. and therefore" the said provision "is null and void and without effect". Where the legislature has delegated to executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose. 105 Pac. it being expressly reserved" to the lawmaking body. the promulgation of that provision by the Secretary "is equivalent to legislating on the matter. (State vs. it must clearly appear that the order is one which falls within the scope of the authority conferred upon the administrative body. Miles supra). under which the regulation was issued. A violation of the proviso may be proceeded against under section 45 of the Federal Penal Code. 63 Phil. Section 28 contains the proviso that a fishing boat not licensed under the Fisheries Law and under the said administrative order may fish within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military reservations authorities of the United States only upon receiving written permission therefor. a power which has not been and cannot be delegated to him. do not represent a valid precise of the rule-making power but constitute an attempt by an administrative body to legislate (State vs. A penal statute is strictly construed. 734. or which conflict with the authority granting statute. 2nd 51). Miles. "Such an act constitutes not only an excess of the regulatory power conferred upon the Secretary but also an exercise of a legislative power which he does not have. Santos was prosecuted under that provision in the Court of First Instance of Cavite for having caused his two fishing boats to fish. 58 Second 2d 534.154 In the instant case the regulation penalizing electro fishing is not strictly in accordance with the Fisheries Law. As the said law does not penalize the act mentioned in section 28 of the administrative order. that power should not be confused with the power to enact a criminal statute. because the law itself does not expressly punish electro fishing. Wash. and the order will be scrutinized with special care. Augusto A. the charge against Santos was dismiss. which permission may be granted by the Secretary upon recommendation of the military or naval authorities concerned. The Santos case involves section 28 of Fish and Game Administrative Order No. See 2 Am. 2 issued by the Secretary of Agriculture and Natural Resources pursuant to the aforementioned section 4 of the Fisheries Law. (Glustrom vs. In a prosecution for a violation of an administrative order. This Court held that the Fisheries Law does not prohibit boats not subject to license from fishing within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States. Jr. . 206 Ga. The instant case is similar to People vs.
regularly offered a ten-down cash prize to the person displaying the largest deer in his store during the open for hunting such game animals. It was not lawful for the administrative board to extend or modify the statute. Laguna in Criminal Case No. killing or displaying of any game animal. Hence. Cruz. WHEREFORE. SO ORDERED. pursuing. taking. pay or receive any reward. . For that act. What the statute penalized was the taking of game. the Game Commission promulgated a rule that "it shall be unlawful to offer. the lower court's decision of June 9.155 The Miles case involved a statute which authorized the State Game Commission "to adopt. Miles. game bird or game fish or any part thereof." Beryl S. It was held that there was no statute penalizing the display of game. Under that statute. The Miles case is similar to this case. 1970 is set aside for lack of appellate jurisdiction and the order of dismissal rendered by the municipal court of Sta. 5429 is affirmed. If the lawmaking body desired to prohibit the display of game. it could have readily said so. the owner of a sporting goods store. he was charged with a violation of the rule Promulgated by the State Game Commission. amend and/or repeal. prize or compensation for the hunting. Costs de oficio. the indictment against Miles was quashed. promulgate. and enforce reasonable rules and regulations governing and/or prohibiting the taking of the various classes of game.