Describe the Administrative Code of 1987.

Held: The Code is a general law and “incorporates in a unified document the major structural,
functional and procedural principles of governance (Third Whereas Clause, Administrative Code of
1987) and “embodies changes in administrative structures and procedures designed to serve the
people.” (Fourth Whereas Clause, Administrative Code of 1987) The Code is divided into seven (7)
books. These books contain provisions on the organization, powers and general administration of
departments, bureaus and offices under the executive branch, the organization and functions of the
Constitutional Commissions and other constitutional bodies, the rules on the national government
budget, as well as guidelines for the exercise by administrative agencies of quasi-legislative and quasi-
judicial powers. The Code covers both the internal administration, i.e., internal organization, personnel
and recruitment, supervision and discipline, and the effects of the functions performed by
administrative officials on private individuals or parties outside government. (Ople v. Torres, G.R. No.
127685, July 23, 1998 [Puno])
What is Administrative Power?
Held: Administrative power is concerned with the work of applying policies and enforcing orders as
determined by proper governmental organs. It enables the President to fix a uniform standard of
administrative efficiency and check the official conduct of his agents. To this end, he can issue
administrative orders, rules and regulations. (Ople v. Torres, G.R. No. 127685, July 23, 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. 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. (Ople v. Torres, G.R. No.
127685, July 23, 1998 [Puno])
What is the Government of the Republic of the Philippines?
Ans.: The Government of the Republic of the Philippines refers to the corporate governmental entity
through which the functions of the government are exercised throughout the Philippines, including, save
as the contrary appears from the context, the various arms through which political authority is made
effective in the Philippines, whether pertaining to the autonomous regions, the provincial, city,
municipal or barangay subdivisions or other forms of local government. (Sec. 2[1], Introductory
Provisions, Executive Order No. 292)
What is an Agency of the Government?
Ans.: Agency of the Government refers to any of the various units of the Government, including a
department, bureau, office, instrumentality, or government-owned or controlled corporation, or a local
government or a distinct unit therein. (Sec. 2[4], Introductory Provisions, Executive Order No. 292)
What is a Department?
Ans.: Department refers to an executive department created by law. For purposes of Book IV, this shall
include any instrumentality, as herein defined, having or assigned the rank of a department, regardless
of its name or designation. (Sec. 2[7], Introductory Provisions, Executive Order No. 292)
What is a Bureau?
Ans.: Bureau refers to any principal subdivision or unit of any department. For purposes of Book IV,
this shall include any principal subdivision or unit of any instrumentality given or assigned the rank of a
bureau, regardless of actual name or designation, as in the case of department-wide regional
offices. (Sec. 2[8], Introductory Provisions, Executive Order No. 292)
What is an Office?
Ans.: Office refers, within the framework of governmental organization, to any major functional unit of
a department or bureau including regional offices. It may also refer to any position held or occupied by
individual persons, whose functions are defined by law or regulation. (Sec. 2[9], Introductory
Provisions, Executive Order No. 292)
What is a Government Instrumentality? What are included in the term Government Instrumentality?
Ans.: A government instrumentality refers to any agency of the national government, not integrated
within the department framework, vested with special functions or jurisdiction by law, endowed with
some if not all corporate powers, administering special funds, enjoying operational autonomy, usually
through a charter. The term includes regulatory agencies, chartered institutions and government-
owned or controlled corporations. (Sec. 2[10], Introductory Provisions, Executive Order No. 292)
What is a Regulatory Agency?
Ans.: A regulatory agency refers to any agency expressly vested with jurisdiction to regulate, administer
or adjudicate matters affecting substantial rights and interest of private persons, the principal powers of
which are exercised by a collective body, such as a commission, board or council. (Sec. 2[11],
Introductory Provisions, Executive Order No. 292)
What is a Chartered Institution?
Ans.: A chartered institution refers to any agency organized or operating under a special charter, and
vested by law with functions relating to specific constitutional policies or objectives. This term includes
state universities and colleges and the monetary authority of the State. (Section 2[12], Introductory
Provisions, Executive Order No. 292)
What is a Government-Owned or Controlled Corporation?
Ans.: Government-owned or controlled corporation refers to any agency organized as a stock or non-
stock corporation, vested with functions relating to public needs whether governmental or proprietary
in nature, and owned by the Government directly or through its instrumentalities either wholly, or,
where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) per cent of
its capital stock; x x x(Sec. 2[13], Introductory Provisions, Executive Order No. 292)
When is a Government-Owned or Controlled Corporation deemed to be performing proprietary
function? When is it deemed to be performing governmental function?
Held: Government-owned or controlled corporations may perform governmental or proprietary
functions or both, depending on the purpose for which they have been created. If the purpose is to
obtain special corporate benefits or earn pecuniary profit, the function is proprietary. If it is in the
interest of health, safety and for the advancement of public good and welfare, affecting the public in
general, the function is governmental. Powers classified as “proprietary” are those intended for private
advantage and benefit. (Blaquera v. Alcala, 295 SCRA 366, 425, Sept. 11, 1998, En Banc [Purisima])
The Philippine National Red Cross (PNRC) is a government-owned and controlled corporation with an
original charter under R.A. No. 95, as amended. Its charter, however, was amended to vest in it the
authority to secure loans, be exempted from payment of all duties, taxes, fees and other charges, etc.
With the amendnt of its charter, has it been “impliedly converted to a private corporation”?
Held: The test to determine whether a corporation is government owned or controlled, or private in
nature is simple. Is it created by its own charter for the exercise of a public function, or by incorporation
under the general corporation law? Those with special charters are government corporations subject to
its provisions, and its employees are under the jurisdiction of the Civil Service Commission. The PNRC
was not “impliedly converted to a private corporation” simply because its charter was amended to vest
in it the authority to secure loans, be exempted from payment of all duties, taxes, fees and other
charges, etc. (Camporedondo v. NLRC, G.R. No. 129049, Aug. 6, 1999, 1st Div. [Pardo])
When may the Government not validly invoke the rule that prescription does not run against the
State? Illustrative Case.
Held: While it is true that prescription does not run against the State, the same may not be invoked by
the government in this case since it is no longer interested in the subject matter. While Camp Wallace
may have belonged to the government at the time Rafael Galvez’s title was ordered cancelled in Land
Registration Case No. N-361, the same no longer holds true today.
Republic Act No. 7227, otherwise known as the Base Conversion and Development Act of 1992, created
the Bases Conversion and Development Authority. X x x

With the transfer of Camp Wallace to the BCDA, the government no longer has a right or interest to
protect. Consequently, the Republic is not a real party in interest and it may not institute the instant
action. Nor may it raise the defense of imprescriptibility, the same being applicable only in cases where
the government is a party in interest. x x x. Being the owner of the areas covered by Camp Wallace, it is
the Bases Conversion and Development Authority, not the Government, which stands to be benefited if
the land covered by TCT No. T-5710 issued in the name of petitioner is cancelled.

Nonetheless, it has been posited that the transfer of military reservations and their extensions to the
BCDA is basically for the purpose of accelerating the sound and balanced conversion of these military
reservations into alternative productive uses and to enhance the benefits to be derived from such
property as a measure of promoting the economic and social development, particularly of Central Luzon
and, in general, the country’s goal for enhancement (Section 2, Republic Act No. 7227). It is contended
that the transfer of these military reservations to the Conversion Authority does not amount to an
abdication on the part of the Republic of its interests, but simply a recognition of the need to create a
body corporate which will act as its agent for the realization of its program. It is consequently asserted
that the Republic remains to be the real party in interest and the Conversion Authority merely its agent.
We, however, must not lose sight of the fact that the BCDA is an entity invested with a personality
separate and distinct from the government. X x x

It may not be amiss to state at this point that the functions of government have been classified into
governmental or constituent and proprietary or ministrant. While public benefit and public welfare,
particularly, the promotion of the economic and social development of Central Luzon, may be
attributable to the operation of the BCDA, yet it is certain that the functions performed by the BCDA are
basically proprietary in nature. The promotion of economic and social development of Central Luzon, in
particular, and the country’s goal for enhancement, in general, do not make the BCDA equivalent to the
Government. Other corporations have been created by government to act as its agents for the
realization of its programs, the SSS, GSIS, NAWASA and the NIA, to count a few, and yet, the Court has
ruled that these entities, although performing functions aimed at promoting public interest and public
welfare, are not government-function corporations invested with governmental attributes. It may thus
be said that the BCDA is not a mere agency of the Government but a corporate body performing
proprietary functions.

Having the capacity to sue or be sued, it should thus be the BCDA which may file an action to cancel
petitioner’s title, not the Republic, the former being the real party in interest. One having no right or
interest to protect cannot invoke the jurisdiction of the court as a party plaintiff in an action. A suit may
be dismissed if the plaintiff or the defendant is not a real party in interest. x x x

However, E.B. Marcha Transport Co., Inc. v. IAC is cited as authority that the Republic is the proper party
to sue for the recovery of possession of property which at the time of the installation of the suit was no
longer held by the national government body but by the Philippine Ports Authrotiy. In E.B. Marcha, the
Court ruled:
It can be said that in suing for the recovery of the rentals, the Republic of the Philippines, acted as
principal of the Philippine Ports Authority, directly exercising the commission it had earlier conferred on
the latter as its agent. We may presume that, by doing so, the Republic of the Philippines did not intend
to retain the said rentals for its own use, considering that by its voluntary act it had transferred the land
in question to the Philippine Ports Authority effective July 11, 1974. The Republic of the Philippines had
simply sought to assist, not supplant, the Philippine Ports Authority, whose title to the disputed property
it continues to recognize. We may expect the that the said rentals, once collected by the Republic of the
Philippines, shall be turned over by it to the Philippine Ports Authority conformably to the purposes of
P.D. No. 857.

E.B. Marcha is, however, not on all fours with the case at bar. In the former, the Court considered the
Republic a proper party to sue since the claims of the Republic and the Philippine Ports Authority against
the petitioner therein were the same. To dismiss the complaint in E.B. Marcha would have brought
needless delay in the settlement of the matter since the PPA would have to refile the case on the same
claim already litigated upon. Such is not the case here since to allow the government to sue herein
enables it to raise the issue of imprescriptibility, a claim which is not available to the BCDA. The rule
that prescription does not run against the State does not apply to corporations or artificial bodies
created by the State for special purposes, it being said that when the title of the Republic has been
divested, its grantees, although artificial bodies of its own creation, are in the same category as ordinary
persons. By raising the claim of imprescriptibility, a claim which cannot be raised by the BCDA, the
Government not only assists the BCDA, as it did in E.B. Marcha, it even supplants the latter, a course of
action proscribed by said case.
Moreover, to recognize the Government as a proper party to sue in this case would set a bad precedent
as it would allow the Republic to prosecute, on behalf of government-owned or controlled corporations,
causes of action which have already prescribed, on the pretext that the Government is the real party in
interest against whom prescription does not run, said corporations having been created merely as
agents for the realization of government programs.

It should also be noted that petitioner is unquestionably a buyer in good faith and for value, having
acquired the property in 1963, or 5 years after the issuance of the original certificate of title, as a third
transferee. If only not to do violence and to give some measure of respect to the Torrens System,
petitioner must be afforded some measure of protection. (Shipside Incorporated v. Court of Appeals,
352 SCRA 334, Feb. 20, 2001, 3rd Div. [Melo])
Discuss the nature and functions of the National Telecommunications Commission (NTC), and
analyze its powers and authority as well as the laws, rules and regulations that govern its existence
and operations.
Held: The NTC was created pursuant to Executive Order No. 546 x x x. It assumed the
functions formerly assigned to the Board of Communications and the Communications Control Bureau,
which were both abolished under the said Executive Order. Previously, the NTC’s function were merely
those of the defunct Public Service Commission (PSC), created under Commonwealth Act No. 146, as
amended, otherwise known as the Public Service Act, considering that the Board of Communications
was the successor-in-interest of the PSC. Under Executive Order No. 125-A, issued in April 1987, the
NTC became an attached agency of the Department of Transportation and Communications.
In the regulatory communications industry, the NTC has the sole authority to issue Certificates
of Public Convenience and Necessity (CPCN) for the installation, operation, and maintenance of
communications facilities and services, radio communications systems, telephone and telegraph
systems. Such power includes the authority to determine the areas of operations of applicants for
telecommunications services. Specifically, Section 16 of the Public Service Act authorizes the then PSC,
upon notice and hearing, to issue Certificates of Public Convenience for the operation of public services
within the Philippines “whenever the Commission finds that the operation of the public service
proposed and the authorization to do business will promote the public interests in a proper and suitable
manner.” (Commonwealth Act No. 146, Section 16[a]) The procedure governing the issuance of such
authorizations is set forth in Section 29 of the said Act x x x. (Republic v. Express Telecommunication
Co., Inc., 373 SCRA 316, Jan. 15, 2002, 1st Div. [Ynares-Santiago])
Is the filing of the administrative rules and regulations with the UP Law Center the operative act that
gives the rules force and effect?
Held: In granting Bayantel the provisional authority to operate a CMTS, the NTC applied Rule
15, Section 3 of its 1978 Rules of Practice and Procedure, which provides:
Sec. 3. Provisional Relief. – Upon the filing of an application, complaint or petition or at any stage
thereafter, the Board may grant on motion of the pleader or on its own initiative, the relief prayed for,
based on the pleading, together with the affidavits and supporting documents attached thereto, without
prejudice to a final decision after completion of the hearing which shall be called within thirty (30) days
from grant of authority asked for.
Respondent Extelcom, however, contends that the NTC should have applied the Revised Rules
which were filed with the Office of the National Administrative Register on February 3, 1993. These
Revised Rules deleted the phrase “on its own initiative”; accordingly, a provisional authority may be
issued only upon filing of the proper motion before the Commission.

In answer to this argument, the NTC, through the Secretary of the Commission, issued a
certification to the effect that inasmuch as the 1993 Revised Rules have not been published in a
newspaper of general circulation, the NTC has been applying the 1978 Rules.

The absence of publication, coupled with the certification by the Commissioner of the NTC
stating that the NTC was still governed by the 1987 Rules, clearly indicate that the 1993 Revised Rules
have not taken effect at the time of the grant of the provisional authority to Bayantel. The fact that the
1993 Revised Rules were filed with the UP Law Center on February 3, 1993 is of no moment. There is
nothing in the Administrative Code of 1987 which implies that the filing of the rules with the UP Law
Center is the operative act that gives the rules force and effect. Book VII, Chapter 2, Section 3 thereof
merely states:

Filing. – (1) Every agency shall file with the University of the Philippines Law Center three (3) certified
copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not
filed within three (3) months from the date shall not thereafter be the basis of any sanction against any
party or persons.
(2) The records officer of the agency, or his equivalent functionary, shall carry out the requirements of
this section under pain of disciplinary action.

(3) A permanent register of all rules shall be kept by the issuing agency and shall be open to public
inspection.

The National Administrative Register is merely a bulletin of codified rules and it is furnished
only to the Office of the President, Congress, all appellate courts, the National Library, other public
offices or agencies as the Congress may select, and to other persons at a price sufficient to cover
publication and mailing or distribution costs (Administrative Code of 1987, Book VII, Chapter 2, Section
7). In a similar case, we held:
This does not imply, however, that the subject Administrative Order is a valid exercise of such quasi-
legislative power. The original Administrative Order issued on August 30, 1989, under which the
respondents filed their applications for importations, was not published in the Official Gazette or in a
newspaper of general circulation. The questioned Administrative Order, legally, until it is published, is
invalid within the context of Article 2 of Civil Code, which reads:

“Article 2. Laws shall take effect after fifteen days following the completion of their publication in the
Official Gazette (or in a newspaper of general circulation in the Philippines), unless it is otherwise
provided. X x x”

The fact that the amendments to Administrative Order No. SOCPEC 89-08-01 were filed with, and
published by the UP Law Center in the National Administrative Register, does not cure the defect related
to the effectivity of the Administrative Order.

This Court, in Tanada v. Tuvera stated, thus:

“We hold therefore that all statutes, including those of local application and private laws, shall be
published as a condition for their effectivity, which shall begin fifteen days after publication unless a
different effectivity is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the President in the
exercise of legislative power or, at present, directly conferred by the Constitution. Administrative Rules
and Regulations must also be published if their purpose is to enforce or implement existing law pursuant
also to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of
the administrative agency and not the public, need not be published. Neither is publication required of
the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines
to be followed by their subordinates in the performance of their duties.

We agree that the publication must be in full or it is no publication at all since its purpose is to inform
the public of the contents of the laws.”

The Administrative Order under consideration is one of those issuances which should be published for
its effectivity, since its purpose is to enforce and implement an existing law pursuant to a valid
delegation, i.e., P.D. 1071, in relation to LOI 444 and EO 133.
Thus, publication in the Official Gazette or a newspaper of general circulation is a condition sine
qua non before statutes, rules or regulations can take effect. This is explicit from Executive Order No.
200, which repealed Article 2 of the Civil Code, and which states that:
Laws shall take effect after fifteen days following the completion of their publication either in the
Official Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise
provided (E.O. 200, Section 1).
The Rules of Practice and Procedure of the NTC, which implements Section 29 of the Public
Service Act, fall squarely within the scope of these laws, as explicitly mentioned in the case of Tanada v.
Tuvera.
Our pronouncement in Tanada v. Tuvera is clear and categorical. Administrative rules and regulations
must be published if their purpose is to enforce or implement existing law pursuant to a valid
delegation. The only exception are interpretative regulations, those merely internal in nature, or those
so-called letters of instructions issued by administrative superiors concerning the rules and guidelines to
be followed by their subordinates in the performance of their duties (PHILSA International Placement &
Services Corp. v. Secretary of Labor, G.R. No. 103144, April 4, 2001, 356 SCRA 174).
Hence, the 1993 Revised Rules should be published in the Official Gazette or in a newspaper of
general circulation before it can take effect. Even the 1993 Revised Rules itself mandates that said Rules
shall take effect only after their publication in a newspaper of general circulation (Section 20 thereof). In
the absence of such publication, therefore, it is the 1978 Rules that govern. (Republic v. Express
Telecommunication Co., Inc., 373 SCRA 316, Jan. 15, 2002, 1st Div. [Ynares-Santiago])
May a person be held liable for violation of an administrative regulation which was not published?
Held: Petitioner insists, however, that it cannot be held liable for illegal exaction as POEA
Memorandum Circular No. II, Series of 1983, which enumerated the allowable fees which may be
collected from applicants, is void for lack of publication.
There is merit in the argument.

In Tanada v. Tuvera, the Court held, as follows:

“We hold therefore that all statutes, including those of local application and private laws, shall be
published as a condition for their effectivity, which shall begin fifteen days after publication unless a
different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the President in the
exercise of legislative powers whenever the same are validly delegated by the legislature or, at present,
directly conferred by the Constitution. Administrative rules and regulations must also be published if
their purpose is to enforce or implement existing law pursuant to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of
the administrative agency and the public, need not be published. Neither is publication required of the
so-called letter of instructions issued by the administrative superiors concerning the rules or guidelines
to be followed by their subordinates in the performance of their duties.”

Applying this doctrine, we have previously declared as having no force and effect the following
administrative issuances: a) Rules and Regulations issued by the Joint Ministry of Health-Ministry of
Labor and Employment Accreditation Committee regarding the accreditation of hospitals, medical clinics
and laboratories; b) Letter of Instruction No. 416 ordering the suspension of payments due and payable
by distressed copper mining companies to the national government; c) Memorandum Circulars issued by
the POEA regulating the recruitment of domestic helpers to Hong Kong; d) Administrative Order No.
SOCPEC 89-08-01 issued by the Philippine International Trading Corporation regulating applications for
importation from the People’s Republic of China; and e) Corporate Compensation Circular No. 10 issued
by the Department of Budget and Management discontinuing the payment of other allowances and
fringe benefits to government officials and employees. In all these cited cases, the administrative
issuances questioned therein were uniformly struck down as they were not published or filed with the
National Administrative Register as required by the Administrative Code of 1987.
POEA Memorandum Circular No. 2, Series of 1983 must likewise be declared ineffective as the
same was never published or filed with the National Administrative Register.

POEA Memorandum Circular No. 2, Series of 1983 provides for the applicable schedule of
placement and documentation fees for private employment agencies or authority holders. Under the
said Order, the maximum amount which may be collected from prospective Filipino overseas workers is
P2,500.00. The said circular was apparently issued in compliance with the provisions of Article 32 of the
Labor Code x x x.

It is thus clear that the administrative circular under consideration is one of those issuances
which should be published for its effectivity, since its purpose is to enforce and implement an existing
law pursuant to a valid delegation. Considering that POEA Administrative Circular No. 2, Series of 1983
has not as yet been published or filed with the National Administrative Register, the same is ineffective
and may not be enforced. (Philsa International Placement and Services Corporation v. Secretary of
Labor and Employment, 356 SCRA 174, April 4, 2001, 3rd Div., [Gonzaga-Reyes])
Does the publication requirement apply as well to administrative regulations addressed only to a
specific group and not to the general public?
Held: The Office of the Solicitor General likewise argues that the questioned administrative
circular is not among those requiring publication contemplated by Tanada v. Tuvera as it is addressed
only to a specific group of persons and not to the general public.
Again, there is no merit in this argument.

The fact that the said circular is addressed only to a specified group, namely private
employment agencies or authority holders, does not take it away from the ambit of our ruling in Tanada
v. Tuvera. In the case of Phil. Association of Service Exporters v. Torres, the administrative circulars
questioned therein were addressed to an even smaller group, namely Philippine and Hong Kong
agencies engaged in the recruitment of workers for Hong Kong, and still the Court ruled therein that, for
lack of proper publication, the said circulars may not be enforced or implemented.
 Our pronouncement in Tanada v. Tuvera is clear and categorical. Administrative rules and
regulations must be published if their purpose is to enforce or implement existing law pursuant to a
valid delegation. The only exceptions are interpretative regulations, those merely internal in nature, or
those so-called letters of instructions issued by administrative superiors concerning the rules and
guidelines to be followed by their subordinates in the performance of their duties. Administrative
Circular No. 2, Series of 1983 has not been shown to fall under any of these exceptions.
In this regard, the Solicitor General’s reliance on the case of Yaokasin v. Commissioner of Customs is
misplaced. In the said case, the validity of certain Customs Memorandum Orders were upheld despite
their lack of publication as they were addressed to a particular class of persons, the customs collectors,
who were also the subordinates of the Commissioner of the Bureau of Customs. As such, the said
Memorandum Orders clearly fall under one of the exceptions to the publication requirement, namely
those dealing with instructions from an administrative superior to a subordinate regarding the
performance of their duties, a circumstance which does not obtain in the case at bench. X x x
To summarize, petitioner should be absolved from the three (3) counts of exaction as POEA
Administrative Circular No. 2, Series of 1983 could not be the basis of administrative sanctions against
petitioner for lack of publication. (Philsa International Placement and Services Corporation v. Secretary
of Labor and Employment, 356 SCRA 174, April 4, 2001, 3rd Div., [Gonzaga-Reyes])
May a successful bidder compel a government agency to formalize a contract with it notwithstanding
that its bid exceeds the amount appropriated by Congress for the project?
Held: Enshrined in the 1987 Philippine Constitution is the mandate that “no money shall be paid out of
the Treasury except in pursuance of an appropriation made by law.” (Sec. 29[1], Article VI of the 1987
Constitution) Thus, in the execution of government contracts, the precise import of this constitutional
restriction is to require the various agencies to limit their expenditures within the appropriations made
by law for each fiscal year.
It is quite evident from the tenor of the language of the law that the existence of appropriations and the
availability of funds are indispensable pre-requisites to or conditions sine qua non for the execution of
government contracts. The obvious intent is to impose such conditions as a priori requisites to the
validity of the proposed contract. Using this as our premise, we cannot accede to PHOTOKINA’s
contention that there is already a perfected contract. While we held in Metropolitan Manila
Development Authority v. Jancom Environmental Corporation that “the effect of an unqualified
acceptance of the offer or proposal of the bidder is to perfect a contract, upon notice of the award to
the bidder,” however, such statement would be inconsequential in a government where the acceptance
referred to is yet to meet certain conditions. To hold otherwise is to allow a public officer to execute a
binding contract that would obligate the government in an amount in excess of the appropriations for
the purpose for which the contract was attempted to be made. This is a dangerous precedent.
In the case at bar, there seems to be an oversight of the legal requirements as early as the
bidding stage. The first step of a Bids and Awards Committee (BAC) is to determine whether the bids
comply with the requirements. The BAC shall rate a bid “passed” only if it complies with all the
requirements and the submitted price does not exceed the approved budget for the
contract.” (Implementing Rules and Regulations [IRR] for Executive Order No. 262, supra.)
Extant on the record is the fact that the VRIS Project was awarded to PHOTOKINA on account of
its bid in the amount of P6.588 Billion Pesos. However, under Republic Act No. 8760 (General
Appropriations Act, FY 2000, p. 1018, supra.), the only fund appropriated for the project was P1 Billion
Pesos and under the Certification of Available Funds (CAF) only P1.2 Billion Pesos was available. Clearly,
the amount appropriated is insufficient to cover the cost of the entire VRIS Project. There is no way that
the COMELEC could enter into a contract with PHOTOKINA whose accepted bid was way beyond the
amount appropriated by law for the project. This being the case, the BAC should have rejected the bid
for being excessive or should have withdrawn the Notice of Award on the ground that in the eyes of the
law, the same is null and void.
Even the draft contract submitted by Commissioner Sadain that provides for a contract price in
the amount of P1.2 Billion Pesos is unacceptable. x x x While the contract price under the draft contract
is only P1.2 Billion and, thus, within the certified available funds, the same covers only Phase I of the
VRIS Project, i.e., the issuance of identification cards for only 1,000,000 voters in specified areas. In
effect, the implementation of the VRIS Project will be “segmented” or “chopped” into several phases.
Not only is such arrangement disallowed by our budgetary laws and practices, it is also disadvantageous
to the COMELEC because of the uncertainty that will loom over its modernization project for an
indefinite period of time. Should Congress fail to appropriate the amount necessary for the completion
of the entire project, what good will the accomplished Phase I serve? As expected, the project failed “to
sell” with the Department of Budget and Management. Thus, Secretary Benjamin Diokno, per his letter
of December 1, 2000, declined the COMELEC’s request for the issuance of the Notice of Cash Availability
(NCA) and a multi-year obligatory authority to assume payment of the total VRIS Project for lack of legal
basis. Corollarily, under Section 33 of R.A. No. 8760, no agency shall enter into a multi-year contract
without a multi-year obligational authority, thus:
“SECTION 33. Contracting Multi-Year Projects. – In the implementation of multi-year projects, no
agency shall enter into a multi-year contract without a multi-year Obligational Authority issued by the
Department of Budget and Management for the purpose. Notwithstanding the issuance of the multi-
year Obligational Authority, the obligation to be incurred in any given calendar year, shall in no case
exceed the amount programmed for implementation during said calendar year.”
Petitioners are justified in refusing to formalize the contract with PHOTOKINA. Prudence dictated them
not to enter into a contract not backed up by sufficient appropriation and available funds. Definitely, to
act otherwise would be a futile exercise for the contract would inevitably suffer the vice of nullity. x x x

Verily, the contract, as expressly declared by law, is inexistent and void ab initio (Article 1409 of
the Civil Code of the Philippines). This is to say that the proposed contract is without force and effect
from the very beginning or from its incipiency, as if it had never been entered into, and hence, cannot
be validated either by lapse of time or ratification.
In fine, we rule that PHOTOKINA, though the winning bidder, cannot compel the COMELEC to formalize
the contract. Since PHOTOKINA’s bid is beyond the amount appropriated by Congress for the VRIS
Project, the proposed contract is not binding upon the COMELEC and is considered void x x
x. (Commission on Elections v. Judge Ma. Luisa Quijano-Padilla, G.R. No. 151992, Sept. 18, 2002, En
Banc [Sandoval-Gutierrez])
What is the remedy available to a party who contracts with the government contrary to the
requirements of the law and, therefore, void ab initio?
Held: Of course, we are not saying that the party who contracts with the government has no other
recourse in law. The law itself affords him the remedy. Section 48 of E.O. No. 292 explicitly provides
that any contract entered into contrary to the above-mentioned requirements shall be void, and “the
officers entering into the contract shall be liable to the Government or other contracting party for any
consequent damage to the same as if the transaction had been wholly between private parties.” So
when the contracting officer transcends his lawful and legitimate powers by acting in excess of or
beyond the limits of his contracting authority, the Government is not bound under the contract. It
would be as if the contract in such case were a private one, whereupon, he binds himself, and thus,
assumes personal liability thereunder. Otherwise stated, the proposed contract is unenforceable as to
the Government.
While this is not the proceeding to determine where the culpability lies, however, the
constitutional mandate cited above constrains us to remind all public officers that public office is a
public trust and all public officers must at all times be accountable to the people. The authority of public
officers to enter into government contracts is circumscribed with a heavy burden of responsibility. In
the exercise of their contracting prerogative, they should be the first judges of the legality, propriety and
wisdom of the contract they entered into. They must exercise a high degree of caution so that the
Government may not be the victim of ill-advised or improvident action. (Commission on Elections v.
Judge Ma. Luisa Quijano-Padilla, G.R. No. 151992, Sept. 18, 2002, En Banc [Sandoval-Gutierrez])
Does the Commission on Human Rights have the power to adjudicate?
Held: In its Order x x x denying petitioners’ motion to dismiss, the CHR theorizes that the
intention of the members of the Constitutional Commission is to make CHR a quasi-judicial body. This
view, however, has not heretofore been shared by this Court. In Carino v. Commission on Human
Rights, the Court x x x has observed that it is “only the first of the enumerated powers and functions
that bears any resemblance to adjudication of adjudgment,” but that resemblance can in no way be
synonymous to the adjudicatory power itself. The Court explained:
“x x x [T]he Commission on Human Rights x x x was not meant by the fundamental law to be another
court or quasi-judicial agency in this country, or duplicate much less take over the functions of the
latter.

“The most that may be conceded to the Commission in the way of adjudicative power is that it may
investigate, i.e., receive evidence and make findings of fact as regards claimed human rights violations
involving civil and political rights. But fact finding is not adjudication, and cannot be likened to the
judicial function of a court of justice, or even a quasi-judicial agency or official. The function of receiving
evidence and ascertaining therefrom the facts of a controversy is not a judicial function, properly
speaking. To be considered such, the faculty of receiving evidence and making factual conclusions in a
controversy must be accompanied by the authority of applying the law to those factual conclusions to
the end that the controversy may be decided or determined authoritatively, finally and definitively,
subject to such appeals or modes of review as may be provided by law. This function, to repeat, the
Commission does not have. (Simon, Jr. v. Commission on Human Rights, 229 SCRA 117, 125, Jan. 5, 1994,
En Banc [Vitug, J.])
Does the Commission on Human Rights have jurisdiction to issue TRO or writ of preliminary
injunction?
Held: In Export Processing Zone Authority v. Commission on Human Rights, the Court x x x
explained:
“The constitutional provision directing the CHR to ‘provide for preventive measures and legal aid
services to the underprivileged whose human rights have been violated or need protection’ may not be
construed to confer jurisdiction on the Commission to issue a restraining order or writ of injunction for,
if that were the intention, the Constitution would have expressly said so. ‘Jurisdiction is conferred only
by the Constitution or by law.’ It is never derived by implication.”

“Evidently, the ‘preventive measures and legal aid services’ mentioned in the Constitution refer to
extrajudicial and judicial remedies (including a writ of preliminary injunction) which the CHR may seek
from the proper courts on behalf of the victims of human rights violations. Not being a court of justice,
the CHR itself has no jurisdiction to issue the writ, for a writ of preliminary injunction may only be issued
‘by the judge of any court in which the action is pending [within his district], or by a Justice of the Court
of Appeals, or of the Supreme Court. x x x. A writ of preliminary injunction is an ancillary remedy. It is
available only in a pending principal action, for the preservation or protection of the rights and interest
of a party thereto, and for no other purpose.”

The Commission does have legal standing to indorse, for appropriate action, its findings and
recommendations to any appropriate agency of government. (Simon, Jr. v. Commission on Human
Rights, 229 SCRA 117, 134-135, Jan. 5, 1994, En Banc [Vitug, J.])
Does the petition for annulment of proclamation of a candidate merely involve the exercise by the
COMELEC of its administrative power to review, revise and reverse the actions of the board of
canvassers and, therefore, justifies non-observance of procedural due process, or does it involve the
exercise of the COMELEC’s quasi-judicial function?
Held: Taking cognizance of private respondent’s petitions for annulment of petitioner’s proclamation,
COMELEC was not merely performing an administrative function. The administrative powers of the
COMELEC include the power to determine the number and location of polling places, appoint election
officials and inspectors, conduct registration of voters, deputize law enforcement agencies and
governmental instrumentalities to ensure free, orderly, honest, peaceful and credible elections, register
political parties, organizations or coalition, accredit citizen’s arms of the Commission, prosecute election
offenses, and recommend to the President the removal of or imposition of any other disciplinary action
upon any officer or employee it has deputized for violation or disregard of its directive, order or
decision. In addition, the Commission also has direct control and supervision over all personnel involved
in the conduct of election. However, the resolution of the adverse claims of private respondent and
petitioner as regards the existence of a manifest error in the questioned certificate of canvass requires
the COMELEC to act as an arbiter. It behooves the Commission to hear both parties to determine the
veracity of their allegations and to decide whether the alleged error is a manifest error. Hence, the
resolution of this issue calls for the exercise by the COMELEC of its quasi-judicial power. It has been said
that where a power rests in judgment or discretion, so that it is of judicial nature or character, but does
not involve the exercise of functions of a judge, or is conferred upon an officer other than a judicial
officer, it is deemed quasi-judicial. The COMELEC therefore, acting as quasi-judicial tribunal, cannot
ignore the requirements of procedural due process in resolving the petitions filed by private
respondent. (Federico S. Sandoval v. COMELEC, G.R. No. 133842, Jan. 26, 2000 [Puno])
Discuss the contempt power of the Commission on Human Rights (CHR). When may it be validly
exercised.
Held: On its contempt powers, the CHR is constitutionally authorized to “adopt its operational
guidelines and rules of procedure, and cite for contempt for violations thereof in accordance with the
Rules of Court.” Accordingly, the CHR acted within its authority in providing in its revised rules, its
power “to cite or hold any person in direct or indirect contempt, and to impose the appropriate
penalties in accordance with the procedure and sanctions provided for in the Rules of Court.” That
power to cite for contempt, however, should be understood to apply only to violations of its adopted
operational guidelines and rules of procedure essential to carry out its investigatorial powers. To
exemplify, the power to cite for contempt could be exercised against persons who refuse to cooperate
with the said body, or who unduly withhold relevant information, or who decline to honor summons,
and the like, in pursuing its investigative work. The “order to desist” (a semantic interplay for a
restraining order) in the instance before us, however, is not investigatorial in character but prescinds
from an adjudicative power that it does not possess. x x x (Simon, Jr. v. Commission on Human Rights,
229 SCRA 117, 134, Jan. 5, 1994, En Banc [Vitug, J.])
Discuss the Doctrine of Primary Jurisdiction (or Prior Resort).
Held: Courts cannot and will not resolve a controversy involving a question which is within the
jurisdiction of an administrative tribunal, especially where the question demands the exercise of sound
administrative discretion requiring the special knowledge, experience and services of the administrative
tribunal to determine technical and intricate matters of fact.
In recent years, it has been the jurisprudential trend to apply this doctrine to cases involving matters
that demand the special competence of administrative agencies even if the question involved is also
judicial in character. It applies “where a claim is originally cognizable in the courts, and comes into play
whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme,
have been placed within the special competence of an administrative body; in such case, the judicial
process is suspended pending referral of such issues to the administrative body for its view.”

In cases where the doctrine of primary jurisdiction is clearly applicable, the court cannot arrogate unto
itself the authority to resolve a controversy, the jurisdiction over which is lodged with an administrative
body of special competence. (Villaflor v. CA, 280 SCRA 297, Oct. 9, 1992, 3rd Div. [Panganiban])
Discuss the Doctrine of Exhaustion of Administrative Remedies. What are the exceptions thereto?
Held: 1. Before a party is allowed to seek the intervention of the court, it is a pre-condition that he
should have availed of all the means of administrative processes afforded him. Hence, if a remedy
within the administrative machinery can still be resorted to by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy
should be exhausted first before the court’s judicial power can be sought. The premature invocation of
court’s jurisdiction is fatal to one’s cause of action. Accordingly, absent any finding of waiver or
estoppel the case is susceptible of dismissal for lack of cause of action. This doctrine of exhaustion of
administrative remedies was not without its practical and legal reasons, for one thing, availment of
administrative remedy entails lesser expenses and provides for a speedier disposition of controversies.
It is no less true to state that the courts of justice for reasons of comity and convenience will shy away
from a dispute until the system of administrative redress has been completed and complied with so as
to give the administrative agency concerned every opportunity to correct its error and to dispose of the
case.
This doctrine is disregarded:

when there is a violation of due process;

when the issue involved is purely a legal question;

when the administrative action is patently illegal amounting to lack or excess of jurisdiction;

when there is estoppel on the part of the administrative agency concerned;

when there is irreparable injury;

when the respondent is a department secretary whose acts as an alter ego of the President bears the
implied and assumed approval of the latter;
when to require exhaustion of administrative remedies would be unreasonable;

when it would amount to a nullification of a claim;

when the subject matter is a private land in land case proceeding;

when the rule does not provide a plain, speedy and adequate remedy, and
when there are circumstances indicating the urgency of judicial intervention.

(Paat v. CA, 266 SCRA 167 [1997])

2. Non-exhaustion of administrative remedies is not jurisdictional. It only renders the action
premature, i.e., claimed cause of action is not ripe for judicial determination and for that reason a party
has no cause of action to ventilate in court. (Carale v. Abarintos, 269 SCRA 132, March 3, 1997, 3rd Div.
[Davide])