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[G.R. No. 142801-802.

July 10, 2001]

BUKLOD NG KAWANING EIIB, CESAR OSADA, RE!EDIOS G. RINCESA, BENJA!IN K"O, BENIGNO !ANGA, LULU !ENDO#A, petitioners, vs. "ON. E$ECU%I&E SECRE%AR' RONALDO B. #A!ORA, "ON. SECRE%AR' JOSE ARDO, DE AR%!EN% O( (INANCE, "ON. SECRE%AR' BENJA!IN DIOKNO, DE AR%!EN% O( BUDGE% AND !ANAGE!EN%, "ON. SECRE%AR' AR%E!IO %U)UERO, DE AR%!EN% O( JUS%ICE, respondents. DECISION
SANDO&AL-GU%IERRE#, J.*

In this petition for certiorari, prohibition and mandamus, petitioners Buklod Ng Kawaning EIIB, Cesar Posada, Remedios Princesa, Benjamin Kho, Benigno anga and !ulu endo"a, for themsel#es and in behalf of others with whom the$ share a common or general interest, seek the nullification of Executive Order No. 191%&' and Executive Order No. 223%(' on the ground that the$ were issued b$ the )ffice of the President with gra#e abuse of discretion and in #iolation of their constitutional right to securit$ of tenure* +he facts are undisputed, )n -une ./, &012, former President Cora"on C* 34uino, issued E5ecuti#e )rder No* &(2%.' establishing the Economic Intelligence and In#estigation Bureau 6EIIB7 as part of the structural organi"ation of the inistr$ of 8inance* %9' +he EIIB was designated to perform the following functions, +,-. Recei#e, gather and e#aluate intelligence reports and information and e#idence on the nature, modes and e5tent of illegal acti#ities affecting the national econom$, such as, but not limited to, economic sabotage, smuggling, ta5 e#asion, and dollar:salting, in#estigate the same and aid in the prosecution of cases; ,/. Coordinate with e5ternal agencies in monitoring the financial and economic acti#ities of persons or entities, whether domestic or foreign, which ma$ ad#ersel$ affect national financial interest with the goal of regulating, controlling or pre#enting said acti#ities;

,0. Pro#ide all intelligence units of operating Bureaus or )ffices under the inistr$ with the general framework and guidelines in the conduct of intelligence and in#estigating works; ,1. <uper#ise, monitor and coordinate all the intelligence and in#estigation operations of the operating Bureaus and )ffices under the inistr$; ,2. In#estigate, hear and file, upon clearance b$ the inister, anti:graft and corruption cases against personnel of the inistr$ and its constituents units; ,3. Perform such other appropriate functions as ma$ be assigned b$ the or his deputies*=%>' inister

In a desire to achie#e harmon$ of efforts and to pre#ent possible conflicts among agencies in the course of their anti:smuggling operations, President 34uino issued emorandum )rder No* ((> on arch &2, &010, pro#iding, among others, 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.=%?' Ele#en $ears after, or on -anuar$ 2, (///, President -oseph Estrada issued E5ecuti#e )rder No* &0& entitled @Deactivation of the Economic Intelligence and Investigation Bureau.=%2' oti#ated b$ the fact that @the designated functions of the EIIB are also being performed b$ the other e5isting agencies of the go#ernment= and that @there is a need to constantl$ monitor the o#erlapping of functions= among these agencies, former President Estrada ordered the deacti#ation of EIIB and the transfer of its functions to the Bureau of Customs and the National Bureau of In#estigation* eanwhile, President Estrada issued E5ecuti#e )rder No* &0? %1' creating the Presidential 3nti:<muggling +ask 8orce @ duana*=%0' +hen the da$ feared b$ the EIIB emplo$ees came* )n arch (0, (///, President Estrada issued E5ecuti#e )rder No* ((. %&/' pro#iding that all EIIB personnel occup$ing positions specified therein shall be deemed separated from the ser#ice effecti#e 3pril ./, (///, pursuant to a bona fide reorgani"ation resulting to abolition, redundanc$, merger, di#ision, or consolidation of positions* %&&' 3goni"ing o#er the loss of their emplo$ment, petitioners now come before this Court in#oking our power of judicial re#iew of E5ecuti#e )rder Nos* &0& and ((.* +he$ anchor their petition on the following arguments,
+A

E420u5672 O8128 No9. 1:1 -;1 22< 9=oul1 /2 -;;ull21 -9 5=2y -82 u;0o;9565u56o;-l 3o8 /26;> 76ol-5672 o3 S2056o; 2,<., A8560l2 I$-B o3 5=2 =6l6??6;2

Co;9565u56o; -;1@o8 3o8 =-76;> /22; 699u21 A65= >8-72 -/u92 o3 16908256o; -Bou;56;> 5o l-0C o8 240299 o3 Du86916056o;.
B.

%=2 -/ol656o; o3 5=2 EIIB 69 - =o-4. S6B6l-8ly, 63 E420u5672 O8128 No9. 1:1 -;1 22< -82 0o;9612821 5o 233205 - 82o8>-;6E-56o; o3 5=2 EIIB, 9u0= 82o8>-;6E-56o; A-9 B-12 6; /-1 3-65=.
C.

%=2 829612;5 =-9 ;o -u5=o865y 5o -/ol69= 5=2 EIIB.F Petitioners contend that the issuance of the afore:mentioned e5ecuti#e orders is, ,-. a #iolation of their right to securit$ of tenure; ,/. tainted with bad faith as the$ were not actuall$ intended to make the bureaucrac$ more efficient but to gi#e wa$ to +ask 8orce @3duana,= the functions of which are essentiall$ and substantiall$ the same as that of EIIB; and ,0. a usurpation of the power of Congress to decide whether or not to abolish the EIIB* 3rguing in behalf of respondents, the <olicitor Aeneral maintains that, ,-. the President enjo$s the totalit$ of the e5ecuti#e power pro#ided under <ections & and 2, 3rticle BII of the Constitution, thus, he has the authorit$ to issue E5ecuti#e )rder Nos* &0& and ((.; ,/. the said e5ecuti#e orders were issued in the interest of national econom$, to a#oid duplicit$ of work and to streamline the functions of the bureaucrac$; and ,0. the EIIB was not @abolished,= it was onl$ @deactivated*= +he petition is bereft of merit* Cespite the presence of some procedural flaws in the instant petition, such as, petitionersD disregard of the hierarch$ of courts and the non:e5haustion of administrati#e remedies, we deem it necessar$ to address the issues* It is in the interest of the <tate that 4uestions relating to the status and e5istence of a public office be settled without dela$* Ee are not without precedent* In Dario v. !ison" %&(' we liberall$ decreed, @+he Court disregards the 4uestions raised as to procedure, failure to e5haust administrati#e remedies, the standing of certain parties to sue, for two reasons,G[/]20-u92 o3 5=2 12B-;19 o3 ?u/l60 6;528295, 6;0lu16;> 5=2 ;221 3o8 95-/6l65y 6; 5=2 ?u/l60 9287602,F and because of the serious implications of these cases on the administration of the Philippine ci#il ser#ice and the rights of public ser#ants*= 3t first glance, it seems that the resolution of this case hinges on the 4uestion : Does the deactivation# of EIIB constitute abolition# of an office$ Gowe#er, after

coming to terms with the pre#ailing law and jurisprudence, we are certain that the ultimate 4ueries should be H -. Does the %resident have the authority to reorgani&e the e'ecutive department$ and" /. (ow should the reorgani&ation be carried out$ <urel$, there e5ists a distinction between the words @ deactivate= and @abolish*= +o @deactivate# means to render inacti#e or ineffecti#e or to break up b$ discharging or reassigning personnel,%&.' while to @abolish= means to do awa$ with, to annul, abrogate or destro$ completel$*%&9' In essence, abolition denotes an intention to do awa$ with the office wholly and permanently*%&>' +hus, while in abolition" the office ceases to e5ist, the same is not true in deactivation where the office continues to e5ist, albeit remaining dormant or inoperati#e* Be that as it ma$, deacti#ation and abolition are both reorgani"ation measures* +he <olicitor Aeneral onl$ in#okes the abo#e distinctions on the mistaken assumption that the President has no power to abolish an office* +he general rule has alwa$s been that the power to abolish a public office is lodged with the legislature* %&?' +his proceeds from the legal precept that the power to create includes the power to destro$* 3 public office is either created b$ the Constitution, b$ statute, or b$ authorit$ of law* %&2' +hus, e5cept where the office was created b$ the Constitution itself, it ma$ be abolished b$ the same legislature that brought it into e5istence*%&1' +he e5ception, howe#er, is that as far as bureaus, agencies or offices in the e5ecuti#e department are concerned, the PresidentDs power of control ma$ justif$ him to inacti#ate the functions of a particular office, %&0' or certain laws ma$ grant him the broad authorit$ to carr$ out reorgani"ation measures* %(/' +he case in point is)arin v. E'ecutive *ecretary.%(&' In this case, it was argued that there is no law which empowers the President to reorgani"e the BIR* In decreeing otherwise, this Court sustained the following legal basis, thus, @Initiall$, it is argued that there is no law $et which empowers the President to issue E*)* No* &.( or to reorgani"e the BIR* Ee do not agree* 5 5 5 5 5 5

<ection 91 of R*3* 2?9> pro#ides that, IS20. 48* *caling Down and %hase +ut of ctivities of gencies ,ithin the E'ecutive Branch* H +he heads of departments, bureaus and offices and agencies are hereb$ directed to identif$ their respecti#e acti#ities which are no longer essential in the deli#er$ of public ser#ices and which ma$ be scaled down" phased out or

abolished" subject to ci#il ser#ice rules and regulations* J 5 5* ctual scaling down" phasing out or abolition of the acti#ities shall be effected pursuant to Circulars or )rders issued for the purpose b$ the )ffice of the President*D <aid pro#ision clearl$ mentions the acts of +90-l6;> 1oA;, ?=-96;> ou5 -;1 -/ol656o;F of offices onl$ and does not co#er the creation of offices or transfer of functions* Ne#ertheless, the act of creating and decentrali"ing is included in the subse4uent pro#ision of <ection ?( which pro#ides that, IS20. H2. -nauthori&ed organi&ational charges.- Knless otherwise created b$ law or directed b$ the President of the Philippines, no organi"ational unit or changes in ke$ positions in an$ department or agenc$ shall be authori"ed in their respecti#e organi"ation structures and be funded from appropriations b$ this 3ct*D 6italics ours7 %=2 3o82>o6;> ?8o7696o; 27612;5ly 9=oA9 5=-5 5=2 829612;5 69 -u5=o86E21 5o 233205 o8>-;6E-56o;-l 0=-;>29 6;0lu16;> 5=2 082-56o; o3 o336029 6; 5=2 12?-85B2;5 o8 ->2;0y 0o;028;21. 5 5 5 5 5 5

3nother legal basis of E*)* No* &.( is <ection (/, Book III of E*)* No* (0( which states, I<ec* (/* Residual Powers* H Knless Congress pro#ides otherwise, the President shall e5ercise such other powers and functions vested in the %resident which are provided for under the laws and which are not specificall$ enumerated abo#e or which are not delegated b$ the President in accordance with law*D 6italic ours7 %=69 ?8o7696o; 9?2-C9 o3 9u0= o5=28 ?oA289 729521 6; 5=2 829612;5 u;128 5=2 l-A. W=-5 l-A 5=2; >6729 =6B 5=2 ?oA28 5o 82o8>-;6E2I I5 69 829612;56-l D20822 No. 1JJ2 A=60= -B2;121 829612;56-l D20822 No. 141H. %=292 1208229 24?8299ly >8-;5 5=2 829612;5 o3 5=2 =6l6??6;29 5=2 0o;56;u6;> -u5=o865y 5o 82o8>-;6E2 5=2 ;-56o;-l >o728;B2;5, A=60= 6;0lu129 5=2 ?oA28 5o >8ou?, 0o;9ol61-52 /u82-u9 -;1 ->2;0629, 5o -/ol69= o336029, 5o 58-;9328 3u;056o;9, 5o 082-52 -;1 0l-9963y 3u;056o;9, 92876029 -;1 -056765629 -;1 5o 95-;1-816E2 9-l-8629 -;1 B-5286-l9. +he #alidit$ of these two decrees are un4uestionable* +he &012 Constitution clearl$ pro#ides that @all laws, decrees, e5ecuti#e orders, proclamations, letters of instructions and other e5ecuti#e issuances not inconsistent with this Constitution shall remain operati#e until amended, repealed or re#oked* <o far, there is $et no law amending or repealing said decrees*= 6Emphasis supplied7 Now, let us take a look at the assailed e5ecuti#e order*

In the whereas clause of E*)* No* &0&, former President Estrada anchored his authorit$ to deacti#ate EIIB on <ection 22 of Republic 3ct 129> 6 ./ 0111 2eneral ppropriations ct7, a pro#ision similar to <ection ?( of R*3* 2?9> 4uoted in !arin" thus; +S20. JJ. +rgani&ed Changes* U;l299 otherwise pro#ided b$ law or 16820521 /y 5=2 829612;5 o3 5=2 =6l6??6;29, no changes in ke$ positions or organi"ational units in an$ department or agenc$ shall be authori"ed in their respecti#e organi"ational structures and funded from appropriations pro#ided b$ this 3ct*= Ee adhere to the precedent or ruling in !arin that this pro#ision recogni"es the authorit$ of the President to effect organi"ational changes in the department or agenc$ under the e5ecuti#e structure* <uch a ruling further finds support in <ection 21 of Republic 3ct No* 12?/*%((' Knder this law, the heads of departments, bureaus, offices and agencies and other entities in the E5ecuti#e Branch are directed ,-. to conduct a comprehensi#e re#iew of their respecti#e mandates, missions, objecti#es, functions, programs, projects, acti#ities and s$stems and procedures; ,/. identif$ acti#ities which are no longer essential in the deli#er$ of public ser#ices and which ma$ be scaled down, phased:out or abolished; and ,0. adopt measures that will result in the streamlined organi"ation and impro#ed o#erall performance of their respecti#e agencies*%(.' <ection 21 ends up with the mandate that the actual streamlining and productivity improvement in agency organi&ation and operation shall be effected pursuant to Circulars or Orders issued for t e purpose !" t e Office of t e President.%(9' +he law has spoken clearl$* Ee are left onl$ with the dut$ to sustain* But of course, the list of legal basis authori"ing the President to reorgani"e an$ department or agenc$ in the e5ecuti#e branch does not ha#e to end here* Ee must not lose sight of the #er$ source of the power H that which constitutes an e5press grant of power* Knder <ection .&, Book III of E5ecuti#e )rder No* (0( 6otherwise known as the dministrative Code of 01347, @5=2 829612;5, 9u/D205 5o 5=2 ?ol60y 6; 5=2 E420u5672 O33602 -;1 6; o8128 5o -0=6272 si#plicit",econo#" -;1 efficienc", 9=-ll =-72 5=2 0o;56;u6;> -u5=o865y 5o 82o8>-;6E2 5=2 -1B6;6958-5672 958u05u82 o3 5=2 O33602 o3 5=2 829612;5.= 8or this purpose, he ma$ transfer the functions of other Cepartments or 3gencies to the )ffice of the President* In Canoni&ado v. guirre" %(>' we ruled that reorgani"ation @ 6;7ol729 5=2 821u056o; o3 ?289o;;2l, 0o;9ol61-56o; o3 o336029, o8 -/ol656o; 5=282o3 /y 82-9o; o3 20o;oBy o8 821u;1-;0y o3 3u;056o;9.= It takes place when there is an alteration of the e5isting structure of go#ernment offices or units therein, including the lines of control, authorit$ and responsibilit$ between them* +he EIIB is a bureau attached to the Cepartment of 8inance*%(?' It falls under the )ffice of the President* Gence, it is subject to the PresidentDs continuing authorit$ to reorgani"e*

It ha#ing been dul$ established that the President has the authorit$ to carr$ out reorgani"ation in an$ branch or agenc$ of the e5ecuti#e department, what is then left for us to resol#e is whether or not the reorgani"ation is #alid* In this jurisdiction, reorgani"ations ha#e been regarded as #alid pro#ided the$ are pursued in good faith* Reorgani"ation is carried out in Igood faithD if it is for the purpose of econom$ or to make bureaucrac$ more efficient* %(2' Pertinentl$, Republic 3ct No* ??>?%(1' pro#ides for the circumstances which ma$ be considered as e#idence of bad faith in the remo#al of ci#il ser#ice emplo$ees made as a result of reorgani"ation, to wit, ,-. where there is a significant increase in the number of positions in the new staffing pattern of the department or agenc$ concerned; ,/. wherean office is abolished and another performing substantiall$ the same functions is created; ,0. where incumbents are replaced b$ those less 4ualified in terms of status of appointment, performance and merit; ,1. where there is a classification of offices in the department or agenc$ concerned and the reclassified offices perform substantiall$ the same functions as the original offices, and ,2. where the remo#al #iolates the order of separation*%(0' Petitioners claim that the deacti#ation of EIIB was done in bad faith because four da$s after its deacti#ation, President Estrada created the +ask 8orce duana. Ee are not con#inced* 3n e5amination of the pertinent E5ecuti#e )rders %./' shows that the deacti#ation of EIIB and the creation of +ask 8orce 3duana were done in good faith* It was not for the purpose of remo#ing the EIIB emplo$ees, but to achie#e the ultimate purpose of E*)* No* &0&, which is econom$* Ehile +ask 8orce 3duana was created to take the place of EIIB, its creation does not entail e5pense to the go#ernment* .irstly, 5=282 69 ;o 2B?loyB2;5 o3 ;2A ?289o;;2l 5o B-; 5=2 %-9C (o802. E.O. No. 1:H ?8o76129 5=-5 5=2 520=;60-l, -1B6;6958-5672 -;1 9?206-l 95-339 o3 EIIB -82 5o /2 0oB?o921 o3 ?2o?l2 A=o -82 -l82-1y 6; 5=2 ?u/l60 9287602, 5=2y /26;> 2B?loy229 o3 o5=28 246956;> ->2;0629. %=268 52;u82 A65= 5=2 %-9C (o802 Aoul1 o;ly /2 52B?o8-8y, 6.2., o;ly A=2; 5=2 ->2;0y A=282 5=2y /2lo;> 69 0-ll21 u?o; 5o -99695 5=2 %-9C (o802. S6;02 5=268 2B?loyB2;5 A65= 5=2 %-9C 3o802 69 o;ly /y A-y o3 detail or assi$n#ent, 5=2y 825-6; 5=268 2B?loyB2;5 A65= 5=2 246956;> ->2;0629. A;1 9=oul1 5=2 ;221 3o8 5=2B 02-92, 5=2y Aoul1 /2 92;5 /-0C 5o 5=2 ->2;0y 0o;028;21. *econdly, the thrust of E*)* No* &0? is to ha#e a small group of militar$ men under the direct control and super#ision of the President as base of the go#ernmentDs anti:smuggling campaign* <uch a smaller base has the necessar$ powers 1. to enlist the assistance of an$ department, bureau, or office and to use their respecti#e personnel, facilities and resources; and 2. @to select and recruit personnel from within the P<A and I<38P for assignment to the +ask 8orce*= O/76ou9ly, 5=2 612- 69 5o

2;0ou8->2 5=2 u56l6E-56o; o3 ?289o;;2l, 3-06l65629 -;1 829ou8029 o3 5=2 -l82-1y 246956;> 12?-85B2;59, ->2;0629, /u82-u9, 250., 6;952-1 o3 B-6;5-6;6;> -; 6;12?2;12;5 o33602 A65= - A=ol2 925 o3 ?289o;;2l -;1 3-06l65629. +he EIIB had pro#en itself burdensome for the go#ernment because it maintained separate offices in e#er$ region in the Philippines* 3nd thirdly" it is e#ident from the $earl$ budget appropriation of the go#ernment that the creation of the +ask 8orce 3duana was especiall$ intended to lessen EIIBDs e5penses* +racing from the $earl$ Aeneral 3ppropriations 3ct, it appears that the allotted amount for the EIIBDs general administration, support, and operations for the $ear &00>, was 128,0<1,000;%.&' for &00?, 182,1KH,000L%.(' for &001, 21:,88:,000L %..' and, for &000, 2<8,J4<,000.%.9' +hese amounts were far abo#e %.>' the K0,000,000 allocation to the +ask 8orce duana for the $ear (///* Ehile basicall$, the functions of the EIIB ha#e de#ol#ed upon the +ask 8orce 3duana, we find the latter to ha#e additional new powers* +he +ask 8orce 3duana, being composed of elements from the Presidential <ecurit$ Aroup 6P<A7 and Intelligence <er#ice 3rmed 8orces of the Philippines 6I<38P7, %.?' has the essential power to effect searches" sei&ures and arrests. +he EIIB did not ha#e this power* +he +ask 8orce 3duana has the power to enlist the assistance of an$ department, bureau, office, or instrumentalit$ of the go#ernment, including go#ernment:owned or controlled corporations; and to use their personnel, facilities and resources* 3gain, the EIIB did not ha#e this power* 3nd, the +ask 8orce 3duana has the additional authorit$ to conduct in#estigation of cases in#ol#ing ill:gotten wealth* +his was not e5pressl$ granted to the EIIB* Conse4uentl$, it cannot be said that there is a feigned reorgani"ation* In Bla5uera v. Civil *evice Commission , %.2' we ruled that a reorgani"ation in good faith is one designed to trim the fat off the bureaucrac$ and institute econom$ and greater efficienc$ in its operation* !astl$, we hold that petitionersD right to securit$ of tenure is not #iolated* Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate bod$ if done in good faith suffers from no infirmit$* Balid abolition of offices is neither remo#al nor separation of the incumbents*%.1' In the instructi#e words laid down b$ this Court in Dario v. !ison" %.0' through -ustice 3braham 8* <armiento, Reorgani"ations in this jurisdiction ha#e been regarded as #alid pro#ided the$ are pursued in good faith* 3s a general rule, a reorgani"ation is carried out in @good faith= if it is for the purpose of econom$ or to make bureaucrac$ more efficient* I; 5=-5 272;5, ;o 169B699-l ,6; 0-92 o3 169B699-l. o8 92?-8-56o; -05u-lly o00u89 /20-u92 5=2 ?o9656o; 6592l3 02-929 5o 24695. A;1 6; 5=-5 0-92, 920u865y o3 52;u82

Aoul1 ;o5 /2 - C=6;292 A-ll. Be that as it ma$, if the Iabolition,D which is nothing else but a separation or remo#al, is done for political reasons or purposel$ to defeat securit$ of tenure, otherwise not in good faith, no #alid IabolitionD takes and whate#er IabolitionD is done, is #oid ab initio* +here is an in#alid IabolitionD as where there is merel$ a change of nomenclature of positions, or where claims of econom$ are belied b$ the e5istence of ample funds* Indeed, there is no such thing as an absolute right to hold office* E5cept constitutional offices which pro#ide for special immunit$ as regards salar$ and tenure, no one can be said to ha#e an$ #ested right in an office or its salar$* %9/' Ehile we cast a commiserating look upon the plight of all the EIIB emplo$ees whose li#es perhaps are now torn with uncertainties, we cannot ignore the unfortunate realit$ that our go#ernment is also battling the impact of a plummeting econom$* Knless the go#ernment is gi#en the chance to recuperate b$ instituting econom$ and efficienc$ in its s$stem, the EIIB will not be the last agenc$ to suffer the impact* Ee cannot frustrate #alid measures which are designed to rebuild the e5ecuti#e department* W"ERE(ORE, the petition is hereb$ CENIEC* No costs* SO ORDERED. Davide" 6r." C.6." Bellosillo" !elo" %uno" 7itug" 8apunan" !endo&a" %ardo" Buena"/nares-*antiago" and De )eon" 6r." 66." concur. %anganiban and 9uisumbing" 66." in the result* 2on&aga-:eyes" 6." on lea#e*