Osmeña vs.

Orbos
OSMEÑA vs. ORBOS
220 SCRA 703
GR No. 99886, March 31, 1993

" To avoid the taint of unlawful delegation of the power to tax, there must be a standard which
implies that the legislature determines matter of principle and lays down fundamental policy."

FACTS: Senator John Osmeña assails the constitutionality of paragraph 1c of PD 1956, as

amended by EO 137, empowering the Energy Regulatory Board (ERB) to approve the increase of
fuel prices or impose additional amounts on petroleum products which proceeds shall accrue to the
Oil Price Stabilization Fund (OPSF) established for the reimbursement to ailing oil companies in
the event of sudden price increases. The petitioner avers that the collection on oil products
establishments is an undue and invalid delegation of legislative power to tax. Further, the petitioner
points out that since a 'special fund' consists of monies collected through the taxing power of a
State, such amounts belong to the State, although the use thereof is limited to the special purpose/
objective for which it was created. It thus appears that the challenge posed by the petitioner is
premised primarily on the view that the powers granted to the ERB under P.D. 1956, as amended,
partake of the nature of the taxation power of the State.

ISSUE: Is there an undue delegation of the legislative power of taxation?

HELD: None. It seems clear that while the funds collected may be referred to as taxes, they are
exacted in the exercise of the police power of the State. Moreover, that the OPSF as a special fund
is plain from the special treatment given it by E.O. 137. It is segregated from the general fund; and
while it is placed in what the law refers to as a "trust liability account," the fund nonetheless
remains subject to the scrutiny and review of the COA. The Court is satisfied that these measures
comply with the constitutional description of a "special fund." With regard to the alleged undue
delegation of legislative power, the Court finds that the provision conferring the authority upon the
ERB to impose additional amounts on petroleum products provides a sufficient standard by which
the authority must be exercised. In addition to the general policy of the law to protect the local
consumer by stabilizing and subsidizing domestic pump rates, P.D. 1956 expressly authorizes the
ERB to impose additional amounts to augment the resources of the Fund.