REPUBLIC ACT No.

7941

AN ACT PROVIDING FOR THE ELECTION OF PARTY-LIST REPRESENTATIVES THROUGH

THE PARTY-LIST SYSTEM, AND APPROPRIATING FUNDS THEREFOR

Section 1. Title. This Act shall be known as the "Party-List System Act."

Section 2. Declaration of part y. The State shall promote proportional representation in the election
of representatives to the House of Representatives through a party-list system of registered national,
regional and sectoral parties or organizations or coalitions thereof, which will enable Filipino citizens
belonging to marginalized and under-represented sectors, organizations and parties, and who lack
well-defined political constituencies but who could contribute to the formulation and enactment of
appropriate legislation that will benefit the nation as a whole, to become members of the House of
Representatives. Towards this end, the State shall develop and guarantee a full, free and open party
system in order to attain the broadcast possible representation of party, sectoral or group interests in
the House of Representatives by enhancing their chances to compete for and win seats in the
legislature, and shall provide the simplest scheme possible.

Section 3. Definition of Terms. (a) The party-list system is a mechanism of proportional

representation in the election of representatives to the House of Representatives from national,
regional and sectoral parties or organizations or coalitions thereof registered with the Commission
on Elections (COMELEC). Component parties or organizations of a coalition may participate
independently provided the coalition of which they form part does not participate in the party-list
system.

(b) A party means either a political party or a sectoral party or a coalition of parties.

(c) A political party refers to an organized group of citizens advocating an ideology or

platform, principles and policies for the general conduct of government and which, as the
most immediate means of securing their adoption, regularly nominates and supports certain
of its leaders and members as candidates for public office.

It is a national party when its constituency is spread over the geographical territory of at least
a majority of the regions. It is a regional party when its constituency is spread over the
geographical territory of at least a majority of the cities and provinces comprising the region.

(d) A sectoral party refers to an organized group of citizens belonging to any of the sectors
enumerated in Section 5 hereof whose principal advocacy pertains to the special interest and
concerns of their sector,

(e) A sectoral organization refers to a group of citizens or a coalition of groups of citizens

who share similar physical attributes or characteristics, employment, interests or concerns.

(f) A coalition refers to an aggrupation of duly registered national, regional, sectoral parties or
organizations for political and/or election purposes.

Section 4. Manifestation to Participate in the Party-List System. Any party, organization, or coalition
already registered with the Commission need not register anew. However, such party, organization,
or coalition shall file with the Commission, not later than ninety (90) days before the election, a
manifestation of its desire to participate in the party-list system.
Section 5. Registration. Any organized group of persons may register as a party, organization or
coalition for purposes of the party-list system by filing with the COMELEC not later than ninety (90)
days before the election a petition verified by its president or secretary stating its desire to participate
in the party-list system as a national, regional or sectoral party or organization or a coalition of such
parties or organizations, attaching thereto its constitution, by-laws, platform or program of
government, list of officers, coalition agreement and other relevant information as the COMELEC
may require: Provided, That the sectors shall include labor, peasant, fisherfolk, urban poor,
indigenous cultural communities, elderly, handicapped, women, youth, veterans, overseas workers,
and professionals.

The COMELEC shall publish the petition in at least two (2) national newspapers of general
circulation.

The COMELEC shall, after due notice and hearing, resolve the petition within fifteen (15) days from
the date it was submitted for decision but in no case not later than sixty (60) days before election.

Section 6. Refusal and/or Cancellation of Registration. The COMELEC may, motu propio or upon
verified complaint of any interested party, refuse or cancel, after due notice and hearing, the
registration of any national, regional or sectoral party, organization or coalition on any of the
following grounds:

(1) It is a religious sect or denomination, organization or association, organized for religious

purposes;

(2) It advocates violence or unlawful means to seek its goal;

(3) It is a foreign party or organization;

(4) It is receiving support from any foreign government, foreign political party, foundation,
organization, whether directly or through any of its officers or members or indirectly through
third parties for partisan election purposes;

(5) It violates or fails to comply with laws, rules or regulations relating to elections;

(6) It declares untruthful statements in its petition;

(7) It has ceased to exist for at least one (1) year; or

(8) It fails to participate in the last two (2) preceding elections or fails to obtain at least two
per centum (2%) of the votes cast under the party-list system in the two (2) preceding
elections for the constituency in which it has registered.

Section 7. Certified List of Registered Parties. The COMELEC shall, not later than sixty (60) days
before election, prepare a certified list of national, regional, or sectoral parties, organizations or
coalitions which have applied or who have manifested their desire to participate under the party-list
system and distribute copies thereof to all precincts for posting in the polling places on election day.
The names of the part y-list nominees shall not be shown on the certified list.

Section 8. Nomination of Party-List Representatives. Each registered party, organization or coalition

shall submit to the COMELEC not later than forty-five (45) days before the election a list of names,
not less than five (5), from which party-list representatives shall be chosen in case it obtains the
required number of votes.

A person may be nominated in one (1) list only. Only persons who have given their consent in writing
may be named in the list. The list shall not include any candidate for any elective office or a person
who has lost his bid for an elective office in the immediately preceding election. No change of names
or alteration of the order of nominees shall be allowed after the same shall have been submitted to
the COMELEC except in cases where the nominee dies, or withdraws in writing his nomination,
becomes incapacitated in which case the name of the substitute nominee shall be placed last in the
list. Incumbent sectoral representatives in the House of Representatives who are nominated in the
party-list system shall not be considered resigned.

Section 9. Qualifications of Party-List Nominees. No person shall be nominated as party-list

representative unless he is a natural-born citizen of the Philippines, a registered voter, a resident of
the Philippines for a period of not less than one (1)year immediately preceding the day of the
election, able to read and write, a bona fide member of the party or organization which he seeks to
represent for at least ninety (90) days preceding the day of the election, and is at least twenty-five
(25) years of age on the day of the election.

In case of a nominee of the youth sector, he must at least be twenty-five (25) but not more than thirty
(30) years of age on the day of the election. Any youth sectoral representative who attains the age of
thirty (30) during his term shall be allowed to continue in office until the expiration of his term.

Section 10. Manner of Voting. Every voter shall be entitled to two (2) votes: the first is a vote for
candidate for member of the House of Representatives in his legislative district, and the second, a
vote for the party, organizations, or coalition he wants represented in the house of Representatives:
Provided, That a vote cast for a party, sectoral organization, or coalition not entitled to be voted for
shall not be counted: Provided, finally, That the first election under the party-list system shall be held
in May 1998.

The COMELEC shall undertake the necessary information campaign for purposes of educating the
electorate on the matter of the party-list system.

Section 11. Number of Party-List Representatives. The party-list representatives shall constitute
twenty per centum (20%) of the total number of the members of the House of Representatives
including those under the party-list.

For purposes of the May 1998 elections, the first five (5) major political parties on the basis of party
representation in the House of Representatives at the start of the Tenth Congress of the Philippines
shall not be entitled to participate in the party-list system.

In determining the allocation of seats for the second vote, the following procedure shall be observed:

(a) The parties, organizations, and coalitions shall be ranked from the highest to the lowest
based on the number of votes they garnered during the elections.

(b) The parties, organizations, and coalitions receiving at least two percent (2%) of the total
votes cast for the party-list system shall be entitled to one seat each: Provided, That those
garnering more than two percent (2%) of the votes shall be entitled to additional seats in
proportion to their total number of votes : Provided, finally, That each party, organization, or
coalition shall be entitled to not more than three (3) seats.
Section 12. Procedure in Allocating Seats for Party-List Representatives. The COMELEC shall tally
all the votes for the parties, organizations, or coalitions on a nationwide basis, rank them according
to the number of votes received and allocate party-list representatives proportionately according to
the percentage of votes obtained by each party, organization, or coalition as against the total
nationwide votes cast for the party-list system.

Section 13. How Party-List Representatives are Chosen. Party-list representatives shall be
proclaimed by the COMELEC based on the list of names submitted by the respective parties,
organizations, or coalitions to the COMELEC according to their ranking in said list.

Section 14. Term of Office. Party-list representatives shall be elected for a term of three (3) years
which shall begin, unless otherwise provided by law, at noon on the thirtieth day of June next
following their election. No party-list representatives shall serve for more than three (3) consecutive
terms. Voluntary renunciation of the office for any length of time shall not be considered as an
interruption in the continuity his service for the full term for which he was elected.

Section 15. Change of Affiliation; Effect. Any elected party-list representative who changes his
political party or sectoral affiliation during his term of office shall forfeit his seat: Provided, That if he
changes his political party or sectoral affiliation within six (6) months before an election, he shall not
be eligible for nomination as party-list representative under his new party or organization.

Section 16. Vacancy. In case of vacancy in the seats reserved for party-list representatives, the
vacancy shall be automatically filled by the next representative from the list of nominees in the order
submitted to the COMELEC by the same party, organization, or coalition, who shall serve for the
unexpired term. If the list is exhausted, the party, organization coalition concerned shall submit
additional nominees.

Section 17. Rights of Party-List Representatives. Party-List Representatives shall be entitled to the
same salaries and emoluments as regular members of the House of Representatives.

Section 18. Rules and Regulations. The COMELEC shall promulgate the necessary rules and
regulations as may be necessary to carry out the purposes of this Act.

Section 19. Appropriations. The amount necessary for the implementation of this Act shall be
provided in the regular appropriations for the Commission on Elections starting fiscal year 1996
under the General Appropriations Act.

Starting 1995, the COMELEC is hereby authorized to utilize savings and other available funds for
purposes of its information campaign on the party-list system.

Section 20. Separability Clause. If any part of this Act is held invalid or unconstitutional, the other
parts or provisions thereof shall remain valid and effective.

Section 21. Repealing Clause. All laws, decrees, executive orders, rules and regulations, or parts
thereof, inconsistent with the provisions of this Act are hereby repealed.

Section 22. Effectivity. This Act shall take effect fifteen (15) days after its publication in a newspaper
of general circulation.

Approved, March 3, 1995.

G.R. No. 179271 April 21, 2009

BARANGAY ASSOCIATION FOR NATIONAL ADVANCEMENT AND TRANSPARENCY

(BANAT), Petitioner,
vs.
COMMISSION ON ELECTIONS (sitting as the National Board of Canvassers), Respondent.
ARTS BUSINESS AND SCIENCE PROFESSIONALS, Intervenor.
AANGAT TAYO, Intervenor.
COALITION OF ASSOCIATIONS OF SENIOR CITIZENS IN THE PHILIPPINES, INC. (SENIOR
CITIZENS), Intervenor.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 179295 April 21, 2009

BAYAN MUNA, ADVOCACY FOR TEACHER EMPOWERMENT THROUGH ACTION,

COOPERATION AND HARMONY TOWARDS EDUCATIONAL REFORMS, INC., and
ABONO, Petitioners,
vs.
COMMISSION ON ELECTIONS, Respondent.

DECISION

CARPIO, J.:

The Case

Petitioner in G.R. No. 179271 — Barangay Association for National Advancement and Transparency
(BANAT) — in a petition for certiorari and mandamus,1 assails the Resolution2 promulgated on 3
August 2007 by the Commission on Elections (COMELEC) in NBC No. 07-041 (PL). The
COMELEC’s resolution in NBC No. 07-041 (PL) approved the recommendation of Atty. Alioden D.
Dalaig, Head of the National Board of Canvassers (NBC) Legal Group, to deny the petition of
BANAT for being moot. BANAT filed before the COMELEC En Banc, acting as NBC, a Petition to
Proclaim the Full Number of Party-List Representatives Provided by the Constitution.

The following are intervenors in G.R. No. 179271: Arts Business and Science Professionals (ABS),
Aangat Tayo (AT), and Coalition of Associations of Senior Citizens in the Philippines, Inc. (Senior
Citizens).

Petitioners in G.R. No. 179295 — Bayan Muna, Abono, and Advocacy for Teacher Empowerment
Through Action, Cooperation and Harmony Towards Educational Reforms (A Teacher) — in a
petition for certiorari with mandamus and prohibition,3 assails NBC Resolution No. 07-
604 promulgated on 9 July 2007. NBC No. 07-60 made a partial proclamation of parties,
organizations and coalitions that obtained at least two percent of the total votes cast under the Party-
List System. The COMELEC announced that, upon completion of the canvass of the party-list
results, it would determine the total number of seats of each winning party, organization, or coalition
in accordance with Veterans Federation Party v. COMELEC5 (Veterans).

Estrella DL Santos, in her capacity as President and First Nominee of the Veterans Freedom Party,
filed a motion to intervene in both G.R. Nos. 179271 and 179295.
 The Facts

The 14 May 2007 elections included the elections for the party-list representatives. The COMELEC
counted 15,950,900 votes cast for 93 parties under the Party-List System.6

On 27 June 2002, BANAT filed a Petition to Proclaim the Full Number of Party-List Representatives
Provided by the Constitution, docketed as NBC No. 07-041 (PL) before the NBC. BANAT filed its
petition because "[t]he Chairman and the Members of the [COMELEC] have recently been quoted in
the national papers that the [COMELEC] is duty bound to and shall implement the Veterans ruling,
that is, would apply the Panganiban formula in allocating party-list seats."7 There were no
intervenors in BANAT’s petition before the NBC. BANAT filed a memorandum on 19 July 2007.

On 9 July 2007, the COMELEC, sitting as the NBC, promulgated NBC Resolution No. 07-60. NBC
Resolution No. 07-60 proclaimed thirteen (13) parties as winners in the party-list elections, namely:
Buhay Hayaan Yumabong (BUHAY), Bayan Muna, Citizens’ Battle Against Corruption (CIBAC),
Gabriela’s Women Party (Gabriela), Association of Philippine Electric Cooperatives (APEC), A
Teacher, Akbayan! Citizen’s Action Party (AKBAYAN), Alagad, Luzon Farmers Party (BUTIL),
Cooperative-Natco Network Party (COOP-NATCCO), Anak Pawis, Alliance of Rural Concerns
(ARC), and Abono. We quote NBC Resolution No. 07-60 in its entirety below:

WHEREAS, the Commission on Elections sitting en banc as National Board of Canvassers, thru its
Sub-Committee for Party-List, as of 03 July 2007, had officially canvassed, in open and public
proceedings, a total of fifteen million two hundred eighty three thousand six hundred fifty-nine
(15,283,659) votes under the Party-List System of Representation, in connection with the National
and Local Elections conducted last 14 May 2007;

WHEREAS, the study conducted by the Legal and Tabulation Groups of the National Board of
Canvassers reveals that the projected/maximum total party-list votes cannot go any higher
than sixteen million seven hundred twenty three thousand one hundred twenty-one
(16,723,121) votes given the following statistical data:

Projected/Maximum Party-List Votes for May 2007 Elections

i. Total party-list votes already canvassed/tabulated 15,283,659

ii. Total party-list votes remaining uncanvassed/ 1,337,032

untabulated (i.e. canvass deferred)
iii. Maximum party-list votes (based on 100% outcome) 102,430
from areas not yet submitted for canvass (Bogo,
Cebu; Bais City; Pantar, Lanao del Norte; and
Pagalungan, Maguindanao)

Maximum Total Party-List Votes 16,723,121

WHEREAS, Section 11 of Republic Act No. 7941 (Party-List System Act) provides in part:

The parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast
for the party-list system shall be entitled to one seat each: provided, that those garnering more than
two percent (2%) of the votes shall be entitled to additional seats in proportion to their total number
of votes: provided, finally, that each party, organization, or coalition shall be entitled to not more than
three (3) seats.
WHEREAS, for the 2007 Elections, based on the above projected total of party-list votes, the
presumptive two percent (2%) threshold can be pegged at three hundred thirty four thousand
four hundred sixty-two (334,462) votes;

WHEREAS, the Supreme Court, in Citizen’s Battle Against Corruption (CIBAC) versus COMELEC,
reiterated its ruling in Veterans Federation Party versus COMELEC adopting a formula for the
additional seats of each party, organization or coalition receving more than the required two percent
(2%) votes, stating that the same shall be determined only after all party-list ballots have been
completely canvassed;

WHEREAS, the parties, organizations, and coalitions that have thus far garnered at least three
hundred thirty four thousand four hundred sixty-two (334,462) votes are as follows:

RANK PARTY/ORGANIZATION/ VOTES

COALITION RECEIVED
1 BUHAY 1,163,218
2 BAYAN MUNA 972,730
3 CIBAC 760,260

4 GABRIELA 610,451
5 APEC 538,971
6 A TEACHER 476,036

7 AKBAYAN 470,872
8 ALAGAD 423,076
9 BUTIL 405,052

10 COOP-NATCO 390,029
11 BATAS 386,361
12 ANAK PAWIS 376,036

13 ARC 338,194
14 ABONO 337,046

WHEREAS, except for Bagong Alyansang Tagapagtaguyod ng Adhikaing Sambayanan (BATAS),

against which an URGENT PETITION FOR CANCELLATION/REMOVAL OF REGISTRATION AND
DISQUALIFICATION OF PARTY-LIST NOMINEE (With Prayer for the Issuance of Restraining
Order) has been filed before the Commission, docketed as SPC No. 07-250, all the parties,
organizations and coalitions included in the aforementioned list are therefore entitled to at least one
seat under the party-list system of representation in the meantime.

NOW, THEREFORE, by virtue of the powers vested in it by the Constitution, the Omnibus Election
Code, Executive Order No. 144, Republic Act Nos. 6646, 7166, 7941, and other election laws, the
Commission on Elections, sitting en banc as the National Board of Canvassers, hereby RESOLVES
to PARTIALLY PROCLAIM, subject to certain conditions set forth below, the following parties,
organizations and coalitions participating under the Party-List System:

1 Buhay Hayaan Yumabong BUHAY

2 Bayan Muna BAYAN MUNA

3 Citizens Battle Against Corruption CIBAC

4 Gabriela Women’s Party GABRIELA
5 Association of Philippine Electric Cooperatives APEC

6 Advocacy for Teacher Empowerment Through A TEACHER

Action, Cooperation and Harmony Towards
Educational Reforms, Inc.

7 Akbayan! Citizen’s Action Party AKBAYAN

8 Alagad ALAGAD

9 Luzon Farmers Party BUTIL

10 Cooperative-Natco Network Party COOP-NATCCO

11 Anak Pawis ANAKPAWIS

12 Alliance of Rural Concerns ARC

13 Abono ABONO

This is without prejudice to the proclamation of other parties, organizations, or coalitions which may
later on be established to have obtained at least two percent (2%) of the total actual votes cast
under the Party-List System.

The total number of seats of each winning party, organization or coalition shall be determined
pursuant to Veterans Federation Party versus COMELEC formula upon completion of the canvass of
the party-list results.

The proclamation of Bagong Alyansang Tagapagtaguyod ng Adhikaing Sambayanan (BATAS) is

hereby deferred until final resolution of SPC No. 07-250, in order not to render the proceedings
therein moot and academic.

Finally, all proclamation of the nominees of concerned parties, organizations and coalitions with
pending disputes shall likewise be held in abeyance until final resolution of their respective cases.

Let the Clerk of the Commission implement this Resolution, furnishing a copy thereof to the Speaker
of the House of Representatives of the Philippines.

SO ORDERED.8 (Emphasis in the original)

Pursuant to NBC Resolution No. 07-60, the COMELEC, acting as NBC, promulgated NBC
Resolution No. 07-72, which declared the additional seats allocated to the appropriate parties. We
quote from the COMELEC’s interpretation of the Veterans formula as found in NBC Resolution No.
07-72:

WHEREAS, on July 9, 2007, the Commission on Elections sitting en banc as the National Board of
Canvassers proclaimed thirteen (13) qualified parties, organization[s] and coalitions based on the
presumptive two percent (2%) threshold of 334,462 votes from the projected maximum total number
of party-list votes of 16,723,121, and were thus given one (1) guaranteed party-list seat each;

WHEREAS, per Report of the Tabulation Group and Supervisory Committee of the National Board of
Canvassers, the projected maximum total party-list votes, as of July 11, 2007, based on the votes
actually canvassed, votes canvassed but not included in Report No. 29, votes received but
uncanvassed, and maximum votes expected for Pantar, Lanao del Norte, is 16,261,369; and that the
projected maximum total votes for the thirteen (13) qualified parties, organizations and coalition[s]
are as follows:

Party-List Projected total number of votes

1 BUHAY 1,178,747
2 BAYAN MUNA 977,476

3 CIBAC 755,964
4 GABRIELA 621,718
5 APEC 622,489

6 A TEACHER 492,369
7 AKBAYAN 462,674
8 ALAGAD 423,190

9 BUTIL 409,298
10 COOP-NATCO 412,920
11 ANAKPAWIS 370,165

12 ARC 375,846
13 ABONO 340,151

WHEREAS, based on the above Report, Buhay Hayaan Yumabong (Buhay) obtained the highest
number of votes among the thirteen (13) qualified parties, organizations and coalitions, making it the
"first party" in accordance with Veterans Federation Party versus COMELEC, reiterated in Citizen’s
Battle Against Corruption (CIBAC) versus COMELEC;

WHEREAS, qualified parties, organizations and coalitions participating under the party-list system of
representation that have obtained one guaranteed (1) seat may be entitled to an additional seat or
seats based on the formula prescribed by the Supreme Court in Veterans;

WHEREAS, in determining the additional seats for the "first party", the correct formula as expressed
in Veterans, is:
 Number of votes of first party Proportion of votes of first
= party relative to total votes for
Total votes for party-list system party-list system

wherein the proportion of votes received by the first party (without rounding off) shall entitle it to
additional seats:

Proportion of votes received Additional seats

by the first party

Equal to or at least 6% Two (2) additional seats

Equal to or greater than 4% but less than 6% One (1) additional seat
Less than 4% No additional seat

WHEREAS, applying the above formula, Buhay obtained the following percentage:

1,178,747
= 0.07248 or 7.2%
16,261,369

which entitles it to two (2) additional seats.

WHEREAS, in determining the additional seats for the other qualified parties, organizations and
coalitions, the correct formula as expressed in Veterans and reiterated in CIBAC is, as follows:

No. of votes of
concerned party No. of additional
Additional seats for
= x seats allocated
a concerned party
No. of votes of to first party
first party

WHEREAS, applying the above formula, the results are as follows:

Party List Percentage Additional Seat

BAYAN MUNA 1.65 1

CIBAC 1.28 1

GABRIELA 1.05 1
APEC 1.05 1

A TEACHER 0.83 0

AKBAYAN 0.78 0
ALAGAD 0.71 0
 BUTIL 0.69 0
COOP-NATCO 0.69 0

ANAKPAWIS 0.62 0

ARC 0.63 0
ABONO 0.57 0

NOW THEREFORE, by virtue of the powers vested in it by the Constitution, Omnibus Election Code,
Executive Order No. 144, Republic Act Nos. 6646, 7166, 7941 and other elections laws, the
Commission on Elections en banc sitting as the National Board of Canvassers, hereby RESOLVED,
as it hereby RESOLVES, to proclaim the following parties, organizations or coalitions as entitled to
additional seats, to wit:

Party List Additional Seats

BUHAY 2

BAYAN MUNA 1

CIBAC 1
GABRIELA 1

APEC 1

This is without prejudice to the proclamation of other parties, organizations or coalitions which may
later on be established to have obtained at least two per cent (2%) of the total votes cast under the
party-list system to entitle them to one (1) guaranteed seat, or to the appropriate percentage of votes
to entitle them to one (1) additional seat.

Finally, all proclamation of the nominees of concerned parties, organizations and coalitions with
pending disputes shall likewise be held in abeyance until final resolution of their respective cases.

Let the National Board of Canvassers Secretariat implement this Resolution, furnishing a copy
hereof to the Speaker of the House of Representatives of the Philippines.

SO ORDERED.9

Acting on BANAT’s petition, the NBC promulgated NBC Resolution No. 07-88 on 3 August 2007,
which reads as follows:

This pertains to the Petition to Proclaim the Full Number of Party-List Representatives Provided by
the Constitution filed by the Barangay Association for National Advancement and Transparency
(BANAT).

Acting on the foregoing Petition of the Barangay Association for National Advancement and
Transparency (BANAT) party-list, Atty. Alioden D. Dalaig, Head, National Board of Canvassers Legal
Group submitted his comments/observations and recommendation thereon [NBC 07-041 (PL)],
which reads:
COMMENTS / OBSERVATIONS:

Petitioner Barangay Association for National Advancement and Transparency (BANAT), in its
Petition to Proclaim the Full Number of Party-List Representatives Provided by the Constitution
prayed for the following reliefs, to wit:

1. That the full number -- twenty percent (20%) -- of Party-List representatives as mandated
by Section 5, Article VI of the Constitution shall be proclaimed.

2. Paragraph (b), Section 11 of RA 7941 which prescribes the 2% threshold votes, should be
harmonized with Section 5, Article VI of the Constitution and with Section 12 of the same RA
7941 in that it should be applicable only to the first party-list representative seats to be
allotted on the basis of their initial/first ranking.

3. The 3-seat limit prescribed by RA 7941 shall be applied; and

4. Initially, all party-list groups shall be given the number of seats corresponding to every 2%
of the votes they received and the additional seats shall be allocated in accordance with
Section 12 of RA 7941, that is, in proportion to the percentage of votes obtained by each
party-list group in relation to the total nationwide votes cast in the party-list election, after
deducting the corresponding votes of those which were allotted seats under the 2%
threshold rule. In fine, the formula/procedure prescribed in the "ALLOCATION OF PARTY-
LIST SEATS, ANNEX "A" of COMELEC RESOLUTION 2847 dated 25 June 1996, shall be
used for [the] purpose of determining how many seats shall be proclaimed, which party-list
groups are entitled to representative seats and how many of their nominees shall seat [sic].

5. In the alternative, to declare as unconstitutional Section 11 of Republic Act No. 7941 and
that the procedure in allocating seats for party-list representative prescribed by Section 12 of
RA 7941 shall be followed.

R E C O M M E N D A T I O N:

The petition of BANAT is now moot and academic.

The Commission En Banc in NBC Resolution No. 07-60 promulgated July 9, 2007 re "In the Matter
of the Canvass of Votes and Partial Proclamation of the Parties, Organizations and Coalitions
Participating Under the Party-List System During the May 14, 2007 National and Local
Elections" resolved among others that the total number of seats of each winning party, organization
or coalition shall be determined pursuant to the Veterans Federation
Party versus COMELEC formula upon completion of the canvass of the party-list results." 1awphi1

WHEREFORE, premises considered, the National Board of Canvassers RESOLVED, as it hereby

RESOLVES, to approve and adopt the recommendation of Atty. Alioden D. Dalaig, Head, NBC Legal
Group, to DENY the herein petition of BANAT for being moot and academic.

Let the Supervisory Committee implement this resolution.

SO ORDERED.10

BANAT filed a petition for certiorari and mandamus assailing the ruling in NBC Resolution No. 07-88.
BANAT did not file a motion for reconsideration of NBC Resolution No. 07-88.
On 9 July 2007, Bayan Muna, Abono, and A Teacher asked the COMELEC, acting as NBC, to
reconsider its decision to use the Veterans formula as stated in its NBC Resolution No. 07-60
because the Veterans formula is violative of the Constitution and of Republic Act No. 7941 (R.A. No.
7941). On the same day, the COMELEC denied reconsideration during the proceedings of the
NBC.11

Aside from the thirteen party-list organizations proclaimed on 9 July 2007, the COMELEC
proclaimed three other party-list organizations as qualified parties entitled to one guaranteed seat
under the Party-List System: Agricultural Sector Alliance of the Philippines, Inc. (AGAP),12 Anak
Mindanao (AMIN),13 and An Waray.14 Per the certification15 by COMELEC, the following party-list
organizations have been proclaimed as of 19 May 2008:

Party-List No. of Seat(s)

1.1 Buhay 3
1.2 Bayan Muna 2
1.3 CIBAC 2
1.4 Gabriela 2
1.5 APEC 2
1.6 A Teacher 1
1.7 Akbayan 1
1.8 Alagad 1
1.9 Butil 1
1.10 Coop-Natco [sic] 1
1.11 Anak Pawis 1
1.12 ARC 1
1.13 Abono 1
1.14 AGAP 1
1.15 AMIN 1

The proclamation of Bagong Alyansang Tagapagtaguyod ng Adhikaing Sambayanan (BATAS),

against which an Urgent Petition for Cancellation/Removal of Registration and Disqualification of
Party-list Nominee (with Prayer for the Issuance of Restraining Order) has been filed before the
COMELEC, was deferred pending final resolution of SPC No. 07-250.

Issues

BANAT brought the following issues before this Court:

1. Is the twenty percent allocation for party-list representatives provided in Section 5(2),
Article VI of the Constitution mandatory or is it merely a ceiling?

2. Is the three-seat limit provided in Section 11(b) of RA 7941 constitutional?

 3. Is the two percent threshold and "qualifier" votes prescribed by the same Section 11(b) of
RA 7941 constitutional?

4. How shall the party-list representatives be allocated?16

Bayan Muna, A Teacher, and Abono, on the other hand, raised the following issues in their petition:

I. Respondent Commission on Elections, acting as National Board of Canvassers, committed

grave abuse of discretion amounting to lack or excess of jurisdiction when it promulgated
NBC Resolution No. 07-60 to implement the First-Party Rule in the allocation of seats to
qualified party-list organizations as said rule:

A. Violates the constitutional principle of proportional representation.

B. Violates the provisions of RA 7941 particularly:

1. The 2-4-6 Formula used by the First Party Rule in allocating additional
seats for the "First Party" violates the principle of proportional representation
under RA 7941.

2. The use of two formulas in the allocation of additional seats, one for the
"First Party" and another for the qualifying parties, violates Section 11(b) of
RA 7941.

3. The proportional relationships under the First Party Rule are different from
those required under RA 7941;

C. Violates the "Four Inviolable Parameters" of the Philippine party-list system as

provided for under the same case of Veterans Federation Party, et al. v. COMELEC.

II. Presuming that the Commission on Elections did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction when it implemented the First-Party Rule in the
allocation of seats to qualified party-list organizations, the same being merely in consonance
with the ruling in Veterans Federations Party, et al. v. COMELEC, the instant Petition is a
justiciable case as the issues involved herein are constitutional in nature, involving the
correct interpretation and implementation of RA 7941, and are of transcendental importance
to our nation.17

Considering the allegations in the petitions and the comments of the parties in these cases,
we defined the following issues in our advisory for the oral arguments set on 22 April 2008:

1. Is the twenty percent allocation for party-list representatives in Section 5(2), Article
VI of the Constitution mandatory or merely a ceiling?

2. Is the three-seat limit in Section 11(b) of RA 7941 constitutional?

3. Is the two percent threshold prescribed in Section 11(b) of RA 7941 to qualify for
one seat constitutional?

4. How shall the party-list representative seats be allocated?

 5. Does the Constitution prohibit the major political parties from participating in the
party-list elections? If not, can the major political parties be barred from participating
in the party-list elections?18

The Ruling of the Court

The petitions have partial merit. We maintain that a Philippine-style party-list election has at least
four inviolable parameters as clearly stated in Veterans. For easy reference, these are:

First, the twenty percent allocation — the combined number of all party-list congressmen
shall not exceed twenty percent of the total membership of the House of Representatives,
including those elected under the party list;

Second, the two percent threshold — only those parties garnering a minimum of two percent
of the total valid votes cast for the party-list system are "qualified" to have a seat in the
House of Representatives;

Third, the three-seat limit — each qualified party, regardless of the number of votes it
actually obtained, is entitled to a maximum of three seats; that is, one "qualifying" and two
additional seats;

Fourth, proportional representation— the additional seats which a qualified party is entitled to
shall be computed "in proportion to their total number of votes."19

However, because the formula in Veterans has flaws in its mathematical interpretation of the term
"proportional representation," this Court is compelled to revisit the formula for the allocation of
additional seats to party-list organizations.

Number of Party-List Representatives:

The Formula Mandated by the Constitution

Section 5, Article VI of the Constitution provides:

Section 5. (1) The House of Representatives shall be composed of not more than two hundred and
fifty members, unless otherwise fixed by law, who shall be elected from legislative districts
apportioned among the provinces, cities, and the Metropolitan Manila area in accordance with the
number of their respective inhabitants, and on the basis of a uniform and progressive ratio, and
those who, as provided by law, shall be elected through a party-list system of registered national,
regional, and sectoral parties or organizations.

(2) The party-list representatives shall constitute twenty per centum of the total number of
representatives including those under the party-list. For three consecutive terms after the ratification
of this Constitution, one-half of the seats allocated to party-list representatives shall be filled, as
provided by law, by selection or election from the labor, peasant, urban poor, indigenous cultural
communities, women, youth, and such other sectors as may be provided by law, except the religious
sector.

The first paragraph of Section 11 of R.A. No. 7941 reads:

Section 11. Number of Party-List Representatives. — The party-list representatives shall constitute
twenty per centum (20%) of the total number of the members of the House of Representatives
including those under the party-list.

xxx

Section 5(1), Article VI of the Constitution states that the "House of Representatives shall be
composed of not more than two hundred and fifty members, unless otherwise fixed by law." The
House of Representatives shall be composed of district representatives and party-list
representatives. The Constitution allows the legislature to modify the number of the members of the
House of Representatives. 1avv phi 1.zw+

Section 5(2), Article VI of the Constitution, on the other hand, states the ratio of party-list
representatives to the total number of representatives. We compute the number of seats available to
party-list representatives from the number of legislative districts. On this point, we do not deviate
from the first formula in Veterans, thus:

Number of seats
available to legislative districts Number of seats available to
x .20 = party-list representatives
.80

This formula allows for the corresponding increase in the number of seats available for party-list
representatives whenever a legislative district is created by law. Since the 14th Congress of the
Philippines has 220 district representatives, there are 55 seats available to party-list representatives.

220
x .20 = 55
.80

After prescribing the ratio of the number of party-list representatives to the total number of
representatives, the Constitution left the manner of allocating the seats available to party-list
representatives to the wisdom of the legislature.

Allocation of Seats for Party-List Representatives:

The Statutory Limits Presented by the Two Percent Threshold
and the Three-Seat Cap

All parties agree on the formula to determine the maximum number of seats reserved under the
Party-List System, as well as on the formula to determine the guaranteed seats to party-list
candidates garnering at least two-percent of the total party-list votes. However, there are numerous
interpretations of the provisions of R.A. No. 7941 on the allocation of "additional seats" under the
Party-List System. Veterans produced the First Party Rule,20 and Justice Vicente V. Mendoza’s
dissent in Veterans presented Germany’s Niemeyer formula21 as an alternative.

The Constitution left to Congress the determination of the manner of allocating the seats for party-list
representatives. Congress enacted R.A. No. 7941, paragraphs (a) and (b) of Section 11 and Section
12 of which provide:

Section 11. Number of Party-List Representatives. — x x x

In determining the allocation of seats for the second vote,22 the following procedure shall be
observed:

(a) The parties, organizations, and coalitions shall be ranked from the highest to the lowest
based on the number of votes they garnered during the elections.

(b) The parties, organizations, and coalitions receiving at least two percent (2%) of the total
votes cast for the party-list system shall be entitled to one seat each: Provided, That those
garnering more than two percent (2%) of the votes shall be entitled to additional seats
in proportion to their total number of votes: Provided, finally, That each party,
organization, or coalition shall be entitled to not more than three (3) seats.

Section 12. Procedure in Allocating Seats for Party-List Representatives. — The COMELEC shall
tally all the votes for the parties, organizations, or coalitions on a nationwide basis, rank them
according to the number of votes received and allocate party-list representatives proportionately
according to the percentage of votes obtained by each party, organization, or coalition as against the
total nationwide votes cast for the party-list system. (Emphasis supplied)

In G.R. No. 179271, BANAT presents two interpretations through three formulas to allocate party-list
representative seats.

The first interpretation allegedly harmonizes the provisions of Section 11(b) on the 2% requirement
with Section 12 of R.A. No. 7941. BANAT described this procedure as follows:

(a) The party-list representatives shall constitute twenty percent (20%) of the total Members
of the House of Representatives including those from the party-list groups as prescribed by
Section 5, Article VI of the Constitution, Section 11 (1st par.) of RA 7941 and Comelec
Resolution No. 2847 dated 25 June 1996. Since there are 220 District Representatives in the
14th Congress, there shall be 55 Party-List Representatives. All seats shall have to be
proclaimed.

(b) All party-list groups shall initially be allotted one (1) seat for every two per centum (2%) of
the total party-list votes they obtained; provided, that no party-list groups shall have more
than three (3) seats (Section 11, RA 7941).

(c) The remaining seats shall, after deducting the seats obtained by the party-list groups
under the immediately preceding paragraph and after deducting from their total the votes
corresponding to those seats, the remaining seats shall be allotted proportionately to all the
party-list groups which have not secured the maximum three (3) seats under the 2%
threshold rule, in accordance with Section 12 of RA 7941.23

Forty-four (44) party-list seats will be awarded under BANAT’s first interpretation.

The second interpretation presented by BANAT assumes that the 2% vote requirement is declared
unconstitutional, and apportions the seats for party-list representatives by following Section 12 of
R.A. No. 7941. BANAT states that the COMELEC:

(a) shall tally all the votes for the parties, organizations, or coalitions on a nationwide basis;

(b) rank them according to the number of votes received; and,

 (c) allocate party-list representatives proportionately according to the percentage of votes
obtained by each party, organization or coalition as against the total nationwide votes cast
for the party-list system.24

BANAT used two formulas to obtain the same results: one is based on the proportional percentage
of the votes received by each party as against the total nationwide party-list votes, and the other is
"by making the votes of a party-list with a median percentage of votes as the divisor in computing the
allocation of seats."25 Thirty-four (34) party-list seats will be awarded under BANAT’s second
interpretation.

In G.R. No. 179295, Bayan Muna, Abono, and A Teacher criticize both the COMELEC’s original 2-4-
6 formula and the Veterans formula for systematically preventing all the party-list seats from being
filled up. They claim that both formulas do not factor in the total number of seats alloted for the entire
Party-List System. Bayan Muna, Abono, and A Teacher reject the three-seat cap, but accept the 2%
threshold. After determining the qualified parties, a second percentage is generated by dividing the
votes of a qualified party by the total votes of all qualified parties only. The number of seats allocated
to a qualified party is computed by multiplying the total party-list seats available with the second
percentage. There will be a first round of seat allocation, limited to using the whole integers as the
equivalent of the number of seats allocated to the concerned party-list. After all the qualified parties
are given their seats, a second round of seat allocation is conducted. The fractions, or remainders,
from the whole integers are ranked from highest to lowest and the remaining seats on the basis of
this ranking are allocated until all the seats are filled up.26

We examine what R.A. No. 7941 prescribes to allocate seats for party-list representatives.

Section 11(a) of R.A. No. 7941 prescribes the ranking of the participating parties from the highest to
the lowest based on the number of votes they garnered during the elections.

Table 1. Ranking of the participating parties from the highest to the lowest based on the number of
votes garnered during the elections.27

Votes Votes
Rank Party Rank Party
Garnered Garnered
1 BUHAY 1,169,234 48 KALAHI 88,868

2 BAYAN MUNA 979,039 49 APOI 79,386

3 CIBAC 755,686 50 BP 78,541

4 GABRIELA 621,171 51 AHONBAYAN 78,424

5 APEC 619,657 52 BIGKIS 77,327

6 A TEACHER 490,379 53 PMAP 75,200

7 AKBAYAN 466,112 54 AKAPIN 74,686

8 ALAGAD 423,149 55 PBA 71,544

9 COOP-NATCCO 409,883 56 GRECON 62,220
10 BUTIL 409,160 57 BTM 60,993
11 BATAS 385,810 58 A SMILE 58,717
12 ARC 374,288 59 NELFFI 57,872

13 ANAKPAWIS 370,261 60 AKSA 57,012

14 ABONO 339,990 61 BAGO 55,846

15 AMIN 338,185 62 BANDILA 54,751
16 AGAP 328,724 63 AHON 54,522
17 AN WARAY 321,503 64 ASAHAN MO 51,722

18 YACAP 310,889 65 AGBIAG! 50,837

19 FPJPM 300,923 66 SPI 50,478

20 UNI-MAD 245,382 67 BAHANDI 46,612

21 ABS 235,086 68 ADD 45,624

22 KAKUSA 228,999 69 AMANG 43,062

23 KABATAAN 228,637 70 ABAY PARAK 42,282
24 ABA-AKO 218,818 71 BABAE KA 36,512
25 ALIF 217,822 72 SB 34,835

26 SENIOR CITIZENS 213,058 73 ASAP 34,098

27 AT 197,872 74 PEP 33,938

28 VFP 196,266 75 ABA ILONGGO 33,903

29 ANAD 188,521 76 VENDORS 33,691

30 BANAT 177,028 77 ADD-TRIBAL 32,896
31 ANG KASANGGA 170,531 78 ALMANA 32,255

32 BANTAY 169,801 79 AANGAT KA PILIPINO 29,130

33 ABAKADA 166,747 80 AAPS 26,271

34 1-UTAK 164,980 81 HAPI 25,781

35 TUCP 162,647 82 AAWAS 22,946

36 COCOFED 155,920 83 SM 20,744

37 AGHAM 146,032 84 AG 16,916

38 ANAK 141,817 85 AGING PINOY 16,729

39 ABANSE! PINAY 130,356 86 APO 16,421

40 PM 119,054 87 BIYAYANG BUKID 16,241
 41 AVE 110,769 88 ATS 14,161
42 SUARA 110,732 89 UMDJ 9,445

43 ASSALAM 110,440 90 BUKLOD FILIPINA 8,915

44 DIWA 107,021 91 LYPAD 8,471

45 ANC 99,636 92 AA-KASOSYO 8,406
46 SANLAKAS 97,375 93 KASAPI 6,221
47 ABC 90,058 TOTAL 15,950,900

The first clause of Section 11(b) of R.A. No. 7941 states that "parties, organizations, and coalitions
receiving at least two percent (2%) of the total votes cast for the party-list system shall be entitled to
one seat each." This clause guarantees a seat to the two-percenters. In Table 2 below, we use the
first 20 party-list candidates for illustration purposes. The percentage of votes garnered by each
party is arrived at by dividing the number of votes garnered by each party by 15,950,900, the total
number of votes cast for all party-list candidates.

Table 2. The first 20 party-list candidates and their respective percentage of votes garnered over the
total votes for the party-list.28

Votes Garnered over

Votes Guaranteed
Rank Party Total Votes for
Garnered Seat
Party-List, in %
1 BUHAY 1,169,234 7.33% 1
2 BAYAN MUNA 979,039 6.14% 1

3 CIBAC 755,686 4.74% 1

4 GABRIELA 621,171 3.89% 1

5 APEC 619,657 3.88% 1

6 A TEACHER 490,379 3.07% 1

7 AKBAYAN 466,112 2.92% 1

8 ALAGAD 423,149 2.65% 1
9 COOP-NATCCO 409,883 2.57% 1

10 BUTIL 409,160 2.57% 1

11 BATAS29 385,810 2.42% 1
12 ARC 374,288 2.35% 1

13 ANAKPAWIS 370,261 2.32% 1

14 ABONO 339,990 2.13% 1
 15 AMIN 338,185 2.12% 1
16 AGAP 328,724 2.06% 1

17 AN WARAY 321,503 2.02% 1

Total 17
18 YACAP 310,889 1.95% 0
19 FPJPM 300,923 1.89% 0
20 UNI-MAD 245,382 1.54% 0

From Table 2 above, we see that only 17 party-list candidates received at least 2% from the total
number of votes cast for party-list candidates. The 17 qualified party-list candidates, or the two-
percenters, are the party-list candidates that are "entitled to one seat each," or the guaranteed seat.
In this first round of seat allocation, we distributed 17 guaranteed seats.

The second clause of Section 11(b) of R.A. No. 7941 provides that "those garnering more than two
percent (2%) of the votes shall be entitled to additional seats in proportion to their total number of
votes." This is where petitioners’ and intervenors’ problem with the formula
in Veterans lies. Veterans interprets the clause "in proportion to their total number of votes" to be in
proportion to the votes of the first party. This interpretation is contrary to the express language of
R.A. No. 7941.

We rule that, in computing the allocation of additional seats, the continued operation of the two
percent threshold for the distribution of the additional seats as found in the second clause of Section
11(b) of R.A. No. 7941 is unconstitutional. This Court finds that the two percent threshold makes it
mathematically impossible to achieve the maximum number of available party list seats when the
number of available party list seats exceeds 50. The continued operation of the two percent
threshold in the distribution of the additional seats frustrates the attainment of the permissive ceiling
that 20% of the members of the House of Representatives shall consist of party-list representatives.

To illustrate: There are 55 available party-list seats. Suppose there are 50 million votes cast for the
100 participants in the party list elections. A party that has two percent of the votes cast, or one
million votes, gets a guaranteed seat. Let us further assume that the first 50 parties all get one
million votes. Only 50 parties get a seat despite the availability of 55 seats. Because of the operation
of the two percent threshold, this situation will repeat itself even if we increase the available party-list
seats to 60 seats and even if we increase the votes cast to 100 million. Thus, even if the maximum
number of parties get two percent of the votes for every party, it is always impossible for the number
of occupied party-list seats to exceed 50 seats as long as the two percent threshold is present.

We therefore strike down the two percent threshold only in relation to the distribution of the
additional seats as found in the second clause of Section 11(b) of R.A. No. 7941. The two percent
threshold presents an unwarranted obstacle to the full implementation of Section 5(2), Article VI of
the Constitution and prevents the attainment of "the broadest possible representation of party,
sectoral or group interests in the House of Representatives."30

In determining the allocation of seats for party-list representatives under Section 11 of R.A. No.
7941, the following procedure shall be observed:
 1. The parties, organizations, and coalitions shall be ranked from the highest to the lowest
based on the number of votes they garnered during the elections.

2. The parties, organizations, and coalitions receiving at least two percent (2%) of the total
votes cast for the party-list system shall be entitled to one guaranteed seat each.

3. Those garnering sufficient number of votes, according to the ranking in paragraph 1, shall
be entitled to additional seats in proportion to their total number of votes until all the
additional seats are allocated.

4. Each party, organization, or coalition shall be entitled to not more than three (3) seats.

In computing the additional seats, the guaranteed seats shall no longer be included because they
have already been allocated, at one seat each, to every two-percenter. Thus, the remaining
available seats for allocation as "additional seats" are the maximum seats reserved under the Party
List System less the guaranteed seats. Fractional seats are disregarded in the absence of a
provision in R.A. No. 7941 allowing for a rounding off of fractional seats.

In declaring the two percent threshold unconstitutional, we do not limit our allocation of additional
seats in Table 3 below to the two-percenters. The percentage of votes garnered by each party-list
candidate is arrived at by dividing the number of votes garnered by each party by 15,950,900, the
total number of votes cast for party-list candidates. There are two steps in the second round of seat
allocation. First, the percentage is multiplied by the remaining available seats, 38, which is the
difference between the 55 maximum seats reserved under the Party-List System and the 17
guaranteed seats of the two-percenters. The whole integer of the product of the percentage and of
the remaining available seats corresponds to a party’s share in the remaining available seats.
Second, we assign one party-list seat to each of the parties next in rank until all available seats are
completely distributed. We distributed all of the remaining 38 seats in the second round of seat
allocation. Finally, we apply the three-seat cap to determine the number of seats each qualified
party-list candidate is entitled. Thus:

Table 3. Distribution of Available Party-List Seats

Votes
Garnered
Guaranteed Additional (B) plus
over Applying
Seat Seats (C), in
Votes Total the three
Rank Party (First (Second whole
Garnered Votes for seat cap
Round) Round) integers
Party (E)
(B) (C) (D)
List, in %
(A)
1 BUHAY 1,169,234 7.33% 1 2.79 3 N.A.

BAYAN
2 979,039 6.14% 1 2.33 3 N.A.
MUNA
3 CIBAC 755,686 4.74% 1 1.80 2 N.A.

4 GABRIELA 621,171 3.89% 1 1.48 2 N.A.

5 APEC 619,657 3.88% 1 1.48 2 N.A.
6 A Teacher 490,379 3.07% 1 1.17 2 N.A.
7 AKBAYAN 466,112 2.92% 1 1.11 2 N.A.

8 ALAGAD 423,149 2.65% 1 1.01 2 N.A.

COOP-
931 409,883 2.57% 1 1 2 N.A.
NATCCO
10 BUTIL 409,160 2.57% 1 1 2 N.A.
11 BATAS 385,810 2.42% 1 1 2 N.A.

12 ARC 374,288 2.35% 1 1 2 N.A.

13 ANAKPAWIS 370,261 2.32% 1 1 2 N.A.

14 ABONO 339,990 2.13% 1 1 2 N.A.

15 AMIN 338,185 2.12% 1 1 2 N.A.

16 AGAP 328,724 2.06% 1 1 2 N.A.

17 AN WARAY 321,503 2.02% 1 1 2 N.A.
18 YACAP 310,889 1.95% 0 1 1 N.A.
19 FPJPM 300,923 1.89% 0 1 1 N.A.

20 UNI-MAD 245,382 1.54% 0 1 1 N.A.

21 ABS 235,086 1.47% 0 1 1 N.A.

22 KAKUSA 228,999 1.44% 0 1 1 N.A.

23 KABATAAN 228,637 1.43% 0 1 1 N.A.

24 ABA-AKO 218,818 1.37% 0 1 1 N.A.
25 ALIF 217,822 1.37% 0 1 1 N.A.

SENIOR
26 213,058 1.34% 0 1 1 N.A.
CITIZENS

27 AT 197,872 1.24% 0 1 1 N.A.

28 VFP 196,266 1.23% 0 1 1 N.A.

29 ANAD 188,521 1.18% 0 1 1 N.A.

30 BANAT 177,028 1.11% 0 1 1 N.A.

ANG
31 170,531 1.07% 0 1 1 N.A.
KASANGGA

32 BANTAY 169,801 1.06% 0 1 1 N.A.

33 ABAKADA 166,747 1.05% 0 1 1 N.A.
 34 1-UTAK 164,980 1.03% 0 1 1 N.A.
35 TUCP 162,647 1.02% 0 1 1 N.A.

36 COCOFED 155,920 0.98% 0 1 1 N.A.

Total 17 55

Applying the procedure of seat allocation as illustrated in Table 3 above, there are 55 party-list
representatives from the 36 winning party-list organizations. All 55 available party-list seats are filled.
The additional seats allocated to the parties with sufficient number of votes for one whole seat, in no
case to exceed a total of three seats for each party, are shown in column (D).

Participation of Major Political Parties in Party-List Elections

The Constitutional Commission adopted a multi-party system that allowed all political parties to
participate in the party-list elections. The deliberations of the Constitutional Commission clearly
bear this out, thus:

MR. MONSOD. Madam President, I just want to say that we suggested or proposed the party list
system because we wanted to open up the political system to a pluralistic society through a
multiparty system. x x x We are for opening up the system, and we would like very much for the
sectors to be there. That is why one of the ways to do that is to put a ceiling on the number of
representatives from any single party that can sit within the 50 allocated under the party list
system. x x x.

xxx

MR. MONSOD. Madam President, the candidacy for the 198 seats is not limited to political parties.
My question is this: Are we going to classify for example Christian Democrats and Social Democrats
as political parties? Can they run under the party list concept or must they be under the district
legislation side of it only?

MR. VILLACORTA. In reply to that query, I think these parties that the Commissioner mentioned can
field candidates for the Senate as well as for the House of Representatives. Likewise, they can
also field sectoral candidates for the 20 percent or 30 percent, whichever is adopted, of the
seats that we are allocating under the party list system.

MR. MONSOD. In other words, the Christian Democrats can field district candidates and can also
participate in the party list system?

MR. VILLACORTA. Why not? When they come to the party list system, they will be fielding
only sectoral candidates.

MR. MONSOD. May I be clarified on that? Can UNIDO participate in the party list system?

MR. VILLACORTA. Yes, why not? For as long as they field candidates who come from the
different marginalized sectors that we shall designate in this Constitution.

MR. MONSOD. Suppose Senator Tañada wants to run under BAYAN group and says that he
represents the farmers, would he qualify?
MR. VILLACORTA. No, Senator Tañada would not qualify.

MR. MONSOD. But UNIDO can field candidates under the party list system and say Juan dela Cruz
is a farmer. Who would pass on whether he is a farmer or not?

MR. TADEO. Kay Commissioner Monsod, gusto ko lamang linawin ito. Political parties,
particularly minority political parties, are not prohibited to participate in the party list election
if they can prove that they are also organized along sectoral lines.

MR. MONSOD. What the Commissioner is saying is that all political parties can participate because
it is precisely the contention of political parties that they represent the broad base of citizens and that
all sectors are represented in them. Would the Commissioner agree?

MR. TADEO. Ang punto lamang namin, pag pinayagan mo ang UNIDO na isang political party, it will
dominate the party list at mawawalang saysay din yung sector. Lalamunin mismo ng political parties
ang party list system. Gusto ko lamang bigyan ng diin ang "reserve." Hindi ito reserve seat sa
marginalized sectors. Kung titingnan natin itong 198 seats, reserved din ito sa political parties.

MR. MONSOD. Hindi po reserved iyon kasi anybody can run there. But my question to
Commissioner Villacorta and probably also to Commissioner Tadeo is that under this system, would
UNIDO be banned from running under the party list system?

MR. VILLACORTA. No, as I said, UNIDO may field sectoral candidates. On that condition alone,
UNIDO may be allowed to register for the party list system.

MR. MONSOD. May I inquire from Commissioner Tadeo if he shares that answer?

MR. TADEO. The same.

MR. VILLACORTA. Puwede po ang UNIDO, pero sa sectoral lines.

xxxx

MR. OPLE. x x x In my opinion, this will also create the stimulus for political parties and mass
organizations to seek common ground. For example, we have the PDP-Laban and the UNIDO. I see
no reason why they should not be able to make common goals with mass organizations so that the
very leadership of these parties can be transformed through the participation of mass organizations.
And if this is true of the administration parties, this will be true of others like the Partido ng Bayan
which is now being formed. There is no question that they will be attractive to many mass
organizations. In the opposition parties to which we belong, there will be a stimulus for us to contact
mass organizations so that with their participation, the policies of such parties can be radically
transformed because this amendment will create conditions that will challenge both the mass
organizations and the political parties to come together. And the party list system is certainly
available, although it is open to all the parties. It is understood that the parties will enter in the roll of
the COMELEC the names of representatives of mass organizations affiliated with them. So that we
may, in time, develop this excellent system that they have in Europe where labor organizations and
cooperatives, for example, distribute themselves either in the Social Democratic Party and the
Christian Democratic Party in Germany, and their very presence there has a transforming effect
upon the philosophies and the leadership of those parties.
It is also a fact well known to all that in the United States, the AFL-CIO always vote with the
Democratic Party. But the businessmen, most of them, always vote with the Republican Party,
meaning that there is no reason at all why political parties and mass organizations should not
combine, reenforce, influence and interact with each other so that the very objectives that we set in
this Constitution for sectoral representation are achieved in a wider, more lasting, and more
institutionalized way. Therefore, I support this [Monsod-Villacorta] amendment. It installs sectoral
representation as a constitutional gift, but at the same time, it challenges the sector to rise to the
majesty of being elected representatives later on through a party list system; and even beyond that,
to become actual political parties capable of contesting political power in the wider constitutional
arena for major political parties.

x x x 32 (Emphasis supplied)

R.A. No. 7941 provided the details for the concepts put forward by the Constitutional Commission.
Section 3 of R.A. No. 7941 reads:

Definition of Terms. (a) The party-list system is a mechanism of proportional representation in the
election of representatives to the House of Representatives from national, regional and sectoral
parties or organizations or coalitions thereof registered with the Commission on Elections
(COMELEC). Component parties or organizations of a coalition may participate independently
provided the coalition of which they form part does not participate in the party-list system.

(b) A party means either a political party or a sectoral party or a coalition of parties.

(c) A political party refers to an organized group of citizens advocating an ideology or

platform, principles and policies for the general conduct of government and which, as the
most immediate means of securing their adoption, regularly nominates and supports certain
of its leaders and members as candidates for public office.

It is a national party when its constituency is spread over the geographical territory of at least
a majority of the regions. It is a regional party when its constituency is spread over the
geographical territory of at least a majority of the cities and provinces comprising the region.

(d) A sectoral party refers to an organized group of citizens belonging to any of the sectors
enumerated in Section 5 hereof whose principal advocacy pertains to the special interests
and concerns of their sector,

(e) A sectoral organization refers to a group of citizens or a coalition of groups of citizens

who share similar physical attributes or characteristics, employment, interests or concerns.

(f) A coalition refers to an aggrupation of duly registered national, regional, sectoral parties or
organizations for political and/or election purposes.

Congress, in enacting R.A. No. 7941, put the three-seat cap to prevent any party from dominating
the party-list elections.

Neither the Constitution nor R.A. No. 7941 prohibits major political parties from participating in the
party-list system. On the contrary, the framers of the Constitution clearly intended the major political
parties to participate in party-list elections through their sectoral wings. In fact, the members of the
Constitutional Commission voted down, 19-22, any permanent sectoral seats, and in the alternative
the reservation of the party-list system to the sectoral groups.33 In defining a "party" that participates
in party-list elections as either "a political party or a sectoral party," R.A. No. 7941 also clearly
intended that major political parties will participate in the party-list elections. Excluding the major
political parties in party-list elections is manifestly against the Constitution, the intent of the
Constitutional Commission, and R.A. No. 7941. This Court cannot engage in socio-political
engineering and judicially legislate the exclusion of major political parties from the party-list elections
in patent violation of the Constitution and the law.

Read together, R.A. No. 7941 and the deliberations of the Constitutional Commission state that
major political parties are allowed to establish, or form coalitions with, sectoral organizations for
electoral or political purposes. There should not be a problem if, for example, the Liberal Party
participates in the party-list election through the Kabataang Liberal ng Pilipinas (KALIPI), its sectoral
youth wing. The other major political parties can thus organize, or affiliate with, their chosen sector
or sectors. To further illustrate, the Nacionalista Party can establish a fisherfolk wing to participate in
the party-list election, and this fisherfolk wing can field its fisherfolk nominees. Kabalikat ng
Malayang Pilipino (KAMPI) can do the same for the urban poor.

The qualifications of party-list nominees are prescribed in Section 9 of R.A. No. 7941:

Qualifications of Party-List Nominees. — No person shall be nominated as party-list representative

unless he is a natural born citizen of the Philippines, a registered voter, a resident of the Philippines
for a period of not less than one (1) year immediately preceding the day of the elections, able to read
and write, bona fide member of the party or organization which he seeks to represent for at least
ninety (90) days preceding the day of the election, and is at least twenty-five (25) years of age on the
day of the election.

In case of a nominee of the youth sector, he must at least be twenty-five (25) but not more than thirty
(30) years of age on the day of the election. Any youth sectoral representative who attains the age of
thirty (30) during his term shall be allowed to continue until the expiration of his term.

Under Section 9 of R.A. No. 7941, it is not necessary that the party-list organization’s nominee
"wallow in poverty, destitution and infirmity"34 as there is no financial status required in the law. It is
enough that the nominee of the sectoral party/organization/coalition belongs to the marginalized and
underrepresented sectors,35 that is, if the nominee represents the fisherfolk, he or she must be a
fisherfolk, or if the nominee represents the senior citizens, he or she must be a senior citizen.

Neither the Constitution nor R.A. No. 7941 mandates the filling-up of the entire 20% allocation of
party-list representatives found in the Constitution. The Constitution, in paragraph 1, Section 5 of
Article VI, left the determination of the number of the members of the House of Representatives to
Congress: "The House of Representatives shall be composed of not more than two hundred and fifty
members, unless otherwise fixed by law, x x x." The 20% allocation of party-list representatives is
merely a ceiling; party-list representatives cannot be more than 20% of the members of the House of
Representatives. However, we cannot allow the continued existence of a provision in the law which
will systematically prevent the constitutionally allocated 20% party-list representatives from being
filled. The three-seat cap, as a limitation to the number of seats that a qualified party-list organization
may occupy, remains a valid statutory device that prevents any party from dominating the party-list
elections. Seats for party-list representatives shall thus be allocated in accordance with the
procedure used in Table 3 above.

However, by a vote of 8-7, the Court decided to continue the ruling in Veterans disallowing major
political parties from participating in the party-list elections, directly or indirectly. Those who voted to
continue disallowing major political parties from the party-list elections joined Chief Justice Reynato
S. Puno in his separate opinion. On the formula to allocate party-list seats, the Court is unanimous in
concurring with this ponencia.

WHEREFORE, we PARTIALLY GRANT the petition. We SET ASIDE the Resolution of the
COMELEC dated 3 August 2007 in NBC No. 07-041 (PL) as well as the Resolution dated 9 July
2007 in NBC No. 07-60. We declare unconstitutional the two percent threshold in the distribution of
additional party-list seats. The allocation of additional seats under the Party-List System shall be in
accordance with the procedure used in Table 3 of this Decision. Major political parties are disallowed
from participating in party-list elections. This Decision is immediately executory. No pronouncement
as to costs.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO

Associate Justice Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA

Associate Justice Associate Justice

CONCHITA CARPIO MORALES DANTE O. TINGA

Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA ARTURO D. BRION

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO DIOSDADO M. PERALTA

Associate Justice Associate Justice

LUCAS P. BERSAMIN
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court.
REYNATO S. PUNO
Chief Justice

G.R. No. 166715 August 14, 2008

ABAKADA GURO PARTY LIST (formerly AASJS)1 OFFICERS/MEMBERS SAMSON S.

ALCANTARA, ED VINCENT S. ALBANO, ROMEO R. ROBISO, RENE B. GOROSPE and EDWIN R.
SANDOVAL, petitioners,
vs.
HON. CESAR V. PURISIMA, in his capacity as Secretary of Finance, HON. GUILLERMO L.
PARAYNO, JR., in his capacity as Commissioner of the Bureau of Internal Revenue, and HON.
ALBERTO D. LINA, in his Capacity as Commissioner of Bureau of Customs, respondents.

DECISION

CORONA, J.:

This petition for prohibition1 seeks to prevent respondents from implementing and enforcing Republic Act
(RA) 93352 (Attrition Act of 2005).

RA 9335 was enacted to optimize the revenue-generation capability and collection of the Bureau of
Internal Revenue (BIR) and the Bureau of Customs (BOC). The law intends to encourage BIR and BOC
officials and employees to exceed their revenue targets by providing a system of rewards and sanctions
through the creation of a Rewards and Incentives Fund (Fund) and a Revenue Performance Evaluation
Board (Board).3 It covers all officials and employees of the BIR and the BOC with at least six months of
service, regardless of employment status.4

The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue targets for the
year, as determined by the Development Budget and Coordinating Committee (DBCC). Any incentive or
reward is taken from the fund and allocated to the BIR and the BOC in proportion to their contribution in
the excess collection of the targeted amount of tax revenue. 5

The Boards in the BIR and the BOC are composed of the Secretary of the Department of Finance (DOF)
or his/her Undersecretary, the Secretary of the Department of Budget and Management (DBM) or his/her
Undersecretary, the Director General of the National Economic Development Authority (NEDA) or his/her
Deputy Director General, the Commissioners of the BIR and the BOC or their Deputy Commissioners, two
representatives from the rank-and-file employees and a representative from the officials nominated by
their recognized organization.6

Each Board has the duty to (1) prescribe the rules and guidelines for the allocation, distribution and
release of the Fund; (2) set criteria and procedures for removing from the service officials and employees
whose revenue collection falls short of the target; (3) terminate personnel in accordance with the criteria
adopted by the Board; (4) prescribe a system for performance evaluation; (5) perform other functions,
including the issuance of rules and regulations and (6) submit an annual report to Congress. 7

The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were tasked to promulgate
and issue the implementing rules and regulations of RA 9335,8 to be approved by a Joint Congressional
Oversight Committee created for such purpose.9

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

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

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

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

In their comment, respondents, through the Office of the Solicitor General, question the petition for being
premature as there is no actual case or controversy yet. Petitioners have not asserted any right or claim
that will necessitate the exercise of this Court’s jurisdiction. Nevertheless, respondents acknowledge that
public policy requires the resolution of the constitutional issues involved in this case. They assert that the
allegation that the reward system will breed mercenaries is mere speculation and does not suffice to
invalidate the law. Seen in conjunction with the declared objective of RA 9335, the law validly classifies
the BIR and the BOC because the functions they perform are distinct from those of the other government
agencies and instrumentalities. Moreover, the law provides a sufficient standard that will guide the
executive in the implementation of its provisions. Lastly, the creation of the congressional oversight
committee under the law enhances, rather than violates, separation of powers. It ensures the fulfillment of
the legislative policy and serves as a check to any over-accumulation of power on the part of the
executive and the implementing agencies.

After a careful consideration of the conflicting contentions of the parties, the Court finds that petitioners
have failed to overcome the presumption of constitutionality in favor of RA 9335, except as shall hereafter
be discussed.

Actual Case And Ripeness

An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims
susceptible of judicial adjudication.10 A closely related requirement is ripeness, that is, the question must
be ripe for adjudication. And a constitutional question is ripe for adjudication when the governmental act
being challenged has a direct adverse effect on the individual challenging it. 11 Thus, to be ripe for judicial
adjudication, the petitioner must show a personal stake in the outcome of the case or an injury to himself
that can be redressed by a favorable decision of the Court.12

In this case, aside from the general claim that the dispute has ripened into a judicial controversy by the
mere enactment of the law even without any further overt act,13 petitioners fail either to assert any specific
and concrete legal claim or to demonstrate any direct adverse effect of the law on them. They are unable
to show a personal stake in the outcome of this case or an injury to themselves. On this account, their
petition is procedurally infirm.
This notwithstanding, public interest requires the resolution of the constitutional issues raised by
petitioners. The grave nature of their allegations tends to cast a cloud on the presumption of
constitutionality in favor of the law. And where an action of the legislative branch is alleged to have
infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the
dispute.14

Accountability of
Public Officers

Section 1, Article 11 of the Constitution states:

Sec. 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency,
act with patriotism, and justice, and lead modest lives.

Public office is a public trust. It must be discharged by its holder not for his own personal gain but for the
benefit of the public for whom he holds it in trust. By demanding accountability and service with
responsibility, integrity, loyalty, efficiency, patriotism and justice, all government officials and employees
have the duty to be responsive to the needs of the people they are called upon to serve.

Public officers enjoy the presumption of regularity in the performance of their duties. This presumption
necessarily obtains in favor of BIR and BOC officials and employees. RA 9335 operates on the basis
thereof and reinforces it by providing a system of rewards and sanctions for the purpose of encouraging
the officials and employees of the BIR and the BOC to exceed their revenue targets and optimize their
revenue-generation capability and collection.15

The presumption is disputable but proof to the contrary is required to rebut it. It cannot be overturned by
mere conjecture or denied in advance (as petitioners would have the Court do) specially in this case
where it is an underlying principle to advance a declared public policy.

Petitioners’ claim that the implementation of RA 9335 will turn BIR and BOC officials and employees into
"bounty hunters and mercenaries" is not only without any factual and legal basis; it is also purely
speculative.

A law enacted by Congress enjoys the strong presumption of constitutionality. To justify its nullification,
there must be a clear and unequivocal breach of the Constitution, not a doubtful and equivocal one. 16 To
invalidate RA 9335 based on petitioners’ baseless supposition is an affront to the wisdom not only of the
legislature that passed it but also of the executive which approved it.

Public service is its own reward. Nevertheless, public officers may by law be rewarded for exemplary and
exceptional performance. A system of incentives for exceeding the set expectations of a public office is
not anathema to the concept of public accountability. In fact, it recognizes and reinforces dedication to
duty, industry, efficiency and loyalty to public service of deserving government personnel.

In United States v. Matthews,17 the U.S. Supreme Court validated a law which awards to officers of the
customs as well as other parties an amount not exceeding one-half of the net proceeds of forfeitures in
violation of the laws against smuggling. Citing Dorsheimer v. United States,18 the U.S. Supreme Court
said:

The offer of a portion of such penalties to the collectors is to stimulate and reward their zeal and
industry in detecting fraudulent attempts to evade payment of duties and taxes.
In the same vein, employees of the BIR and the BOC may by law be entitled to a reward when, as a
consequence of their zeal in the enforcement of tax and customs laws, they exceed their revenue targets.
In addition, RA 9335 establishes safeguards to ensure that the reward will not be claimed if it will be
either the fruit of "bounty hunting or mercenary activity" or the product of the irregular performance of
official duties. One of these precautionary measures is embodied in Section 8 of the law:

SEC. 8. Liability of Officials, Examiners and Employees of the BIR and the BOC. – The officials,
examiners, and employees of the [BIR] and the [BOC] who violate this Act or who are guilty of
negligence, abuses or acts of malfeasance or misfeasance or fail to exercise extraordinary
diligence in the performance of their duties shall be held liable for any loss or injury suffered by
any business establishment or taxpayer as a result of such violation, negligence, abuse,
malfeasance, misfeasance or failure to exercise extraordinary diligence.

Equal Protection

Equality guaranteed under the equal protection clause is equality under the same conditions and among
persons similarly situated; it is equality among equals, not similarity of treatment of persons who are
classified based on substantial differences in relation to the object to be accomplished. 19 When things or
persons are different in fact or circumstance, they may be treated in law differently. In Victoriano v.
Elizalde Rope Workers’ Union,20 this Court declared:

The guaranty of equal protection of the laws is not a guaranty of equality in the application of the
laws upon all citizens of the [S]tate. It is not, therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that every man, woman and child should be affected
alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The Constitution does not require that things which
are different in fact be treated in law as though they were the same. The equal protection
clause does not forbid discrimination as to things that are different. It does not prohibit
legislation which is limited either in the object to which it is directed or by the territory within
which it is to operate.

The equal protection of the laws clause of the Constitution allows classification. Classification in
law, as in the other departments of knowledge or practice, is the grouping of things in speculation
or practice because they agree with one another in certain particulars. A law is not invalid
because of simple inequality. The very idea of classification is that of inequality, so that it goes
without saying that the mere fact of inequality in no manner determines the matter of
constitutionality. All that is required of a valid classification is that it be reasonable, which
means that the classification should be based on substantial distinctions which make for
real differences, that it must be germane to the purpose of the law; that it must not be
limited to existing conditions only; and that it must apply equally to each member of the
class. This Court has held that the standard is satisfied if the classification or distinction is
based on a reasonable foundation or rational basis and is not palpably arbitrary.

In the exercise of its power to make classifications for the purpose of enacting laws over matters
within its jurisdiction, the state is recognized as enjoying a wide range of discretion. It is not
necessary that the classification be based on scientific or marked differences of things or in their
relation. Neither is it necessary that the classification be made with mathematical nicety. Hence,
legislative classification may in many cases properly rest on narrow distinctions, for the equal
protection guaranty does not preclude the legislature from recognizing degrees of evil or harm,
and legislation is addressed to evils as they may appear. 21 (emphasis supplied)

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

The BIR performs the following functions:

Sec. 18. The Bureau of Internal Revenue. – The Bureau of Internal Revenue, which shall be
headed by and subject to the supervision and control of the Commissioner of Internal Revenue,
who shall be appointed by the President upon the recommendation of the Secretary [of the DOF],
shall have the following functions:

(1) Assess and collect all taxes, fees and charges and account for all revenues collected;

(2) Exercise duly delegated police powers for the proper performance of its functions and duties;

(3) Prevent and prosecute tax evasions and all other illegal economic activities;

(4) Exercise supervision and control over its constituent and subordinate units; and

(5) Perform such other functions as may be provided by law.24

xxx xxx xxx (emphasis supplied)

On the other hand, the BOC has the following functions:

Sec. 23. The Bureau of Customs. – The Bureau of Customs which shall be headed and subject to
the management and control of the Commissioner of Customs, who shall be appointed by the
President upon the recommendation of the Secretary[of the DOF] and hereinafter referred to as
Commissioner, shall have the following functions:

(1) Collect custom duties, taxes and the corresponding fees, charges and penalties;

(2) Account for all customs revenues collected;

(3) Exercise police authority for the enforcement of tariff and customs laws;

(4) Prevent and suppress smuggling, pilferage and all other economic frauds within all ports of
entry;

(5) Supervise and control exports, imports, foreign mails and the clearance of vessels and
aircrafts in all ports of entry;

(6) Administer all legal requirements that are appropriate;

(7) Prevent and prosecute smuggling and other illegal activities in all ports under its jurisdiction;

(8) Exercise supervision and control over its constituent units;

(9) Perform such other functions as may be provided by law.25

 xxx xxx xxx (emphasis supplied)

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

Undue Delegation

Two tests determine the validity of delegation of legislative power: (1) the completeness test and (2) the
sufficient standard test. A law is complete when it sets forth therein the policy to be executed, carried out
or implemented by the delegate.26 It lays down a sufficient standard when it provides adequate guidelines
or limitations in the law to map out the boundaries of the delegate’s authority and prevent the delegation
from running riot.27 To be sufficient, the standard must specify the limits of the delegate’s authority,
announce the legislative policy and identify the conditions under which it is to be implemented. 28

RA 9335 adequately states the policy and standards to guide the President in fixing revenue targets and
the implementing agencies in carrying out the provisions of the law. Section 2 spells out the policy of the
law:

SEC. 2. Declaration of Policy. – It is the policy of the State to optimize the revenue-generation
capability and collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs
(BOC) by providing for a system of rewards and sanctions through the creation of a Rewards and
Incentives Fund and a Revenue Performance Evaluation Board in the above agencies for the
purpose of encouraging their officials and employees to exceed their revenue targets.

Section 4 "canalized within banks that keep it from overflowing"29 the delegated power to the President to
fix revenue targets:

SEC. 4. Rewards and Incentives Fund. – A Rewards and Incentives Fund, hereinafter referred to
as the Fund, is hereby created, to be sourced from the collection of the BIR and the BOC in
excess of their respective revenue targets of the year, as determined by the Development
Budget and Coordinating Committee (DBCC), in the following percentages:

Excess of Collection of the Percent (%) of the Excess Collection to

Excess the Revenue Targets Accrue to the Fund
30% or below – 15%
More than 30% – 15% of the first 30% plus 20% of the
remaining excess

The Fund shall be deemed automatically appropriated the year immediately following the year
when the revenue collection target was exceeded and shall be released on the same fiscal year.

Revenue targets shall refer to the original estimated revenue collection expected of the
BIR and the BOC for a given fiscal year as stated in the Budget of Expenditures and
Sources of Financing (BESF) submitted by the President to Congress. The BIR and the
BOC shall submit to the DBCC the distribution of the agencies’ revenue targets as allocated
among its revenue districts in the case of the BIR, and the collection districts in the case of the
BOC.

xxx xxx xxx (emphasis supplied)

Revenue targets are based on the original estimated revenue collection expected respectively of the BIR
and the BOC for a given fiscal year as approved by the DBCC and stated in the BESF submitted by the
President to Congress.30 Thus, the determination of revenue targets does not rest solely on the President
as it also undergoes the scrutiny of the DBCC.

On the other hand, Section 7 specifies the limits of the Board’s authority and identifies the conditions
under which officials and employees whose revenue collection falls short of the target by at least 7.5%
may be removed from the service:

SEC. 7. Powers and Functions of the Board. – The Board in the agency shall have the following
powers and functions:

xxx xxx xxx

(b) To set the criteria and procedures for removing from service officials and employees
whose revenue collection falls short of the target by at least seven and a half percent
(7.5%), with due consideration of all relevant factors affecting the level of collection as
provided in the rules and regulations promulgated under this Act, subject to civil service laws,
rules and regulations and compliance with substantive and procedural due process:
Provided, That the following exemptions shall apply:

1. Where the district or area of responsibility is newly-created, not exceeding two years in
operation, as has no historical record of collection performance that can be used as basis
for evaluation; and

2. Where the revenue or customs official or employee is a recent transferee in the middle
of the period under consideration unless the transfer was due to nonperformance of
revenue targets or potential nonperformance of revenue targets: Provided, however, That
when the district or area of responsibility covered by revenue or customs officials or
employees has suffered from economic difficulties brought about by natural calamities
or force majeure or economic causes as may be determined by the Board, termination
shall be considered only after careful and proper review by the Board.

(c) To terminate personnel in accordance with the criteria adopted in the preceding paragraph:
Provided, That such decision shall be immediately executory: Provided, further, That the
application of the criteria for the separation of an official or employee from service under
this Act shall be without prejudice to the application of other relevant laws on
accountability of public officers and employees, such as the Code of Conduct and Ethical
Standards of Public Officers and Employees and the Anti-Graft and Corrupt Practices Act;

xxx xxx xxx (emphasis supplied)

Clearly, RA 9335 in no way violates the security of tenure of officials and employees of the BIR and the
BOC. The guarantee of security of tenure only means that an employee cannot be dismissed from the
service for causes other than those provided by law and only after due process is accorded the
employee.31 In the case of RA 9335, it lays down a reasonable yardstick for removal (when the revenue
collection falls short of the target by at least 7.5%) with due consideration of all relevant factors affecting
the level of collection. This standard is analogous to inefficiency and incompetence in the performance of
official duties, a ground for disciplinary action under civil service laws. 32 The action for removal is also
subject to civil service laws, rules and regulations and compliance with substantive and procedural due
process.

At any rate, this Court has recognized the following as sufficient standards: "public interest," "justice and
equity," "public convenience and welfare" and "simplicity, economy and welfare."33 In this case, the
declared policy of optimization of the revenue-generation capability and collection of the BIR and the BOC
is infused with public interest.

Separation Of Powers

Section 12 of RA 9335 provides:

SEC. 12. Joint Congressional Oversight Committee. – There is hereby created a Joint
Congressional Oversight Committee composed of seven Members from the Senate and seven
Members from the House of Representatives. The Members from the Senate shall be appointed
by the Senate President, with at least two senators representing the minority. The Members from
the House of Representatives shall be appointed by the Speaker with at least two members
representing the minority. After the Oversight Committee will have approved the implementing
rules and regulations (IRR) it shall thereafter become functus officio and therefore cease to exist.

The Joint Congressional Oversight Committee in RA 9335 was created for the purpose of approving the
implementing rules and regulations (IRR) formulated by the DOF, DBM, NEDA, BIR, BOC and CSC. On
May 22, 2006, it approved the said IRR. From then on, it became functus officio and ceased to exist.
Hence, the issue of its alleged encroachment on the executive function of implementing and enforcing the
law may be considered moot and academic.

This notwithstanding, this might be as good a time as any for the Court to confront the issue of the
constitutionality of the Joint Congressional Oversight Committee created under RA 9335 (or other similar
laws for that matter).

The scholarly discourse of Mr. Justice (now Chief Justice) Puno on the concept of congressional
oversight in Macalintal v. Commission on Elections34 is illuminating:

Concept and bases of congressional oversight

Broadly defined, the power of oversight embraces all activities undertaken by Congress to
enhance its understanding of and influence over the implementation of legislation it has
enacted. Clearly, oversight concerns post-enactment measures undertaken by Congress:
(a) to monitor bureaucratic compliance with program objectives, (b) to determine whether
agencies are properly administered, (c) to eliminate executive waste and dishonesty, (d) to
prevent executive usurpation of legislative authority, and (d) to assess executive
conformity with the congressional perception of public interest.

The power of oversight has been held to be intrinsic in the grant of legislative power itself and
integral to the checks and balances inherent in a democratic system of government. x x x x x x x
xx

Over the years, Congress has invoked its oversight power with increased frequency to check the
perceived "exponential accumulation of power" by the executive branch. By the beginning of the
20th century, Congress has delegated an enormous amount of legislative authority to the
executive branch and the administrative agencies. Congress, thus, uses its oversight power to
make sure that the administrative agencies perform their functions within the authority delegated
to them. x x x x x x x x x

Categories of congressional oversight functions

The acts done by Congress purportedly in the exercise of its oversight powers may be divided
into three categories, namely: scrutiny, investigation and supervision.
 a. Scrutiny

Congressional scrutiny implies a lesser intensity and continuity of attention to

administrative operations. Its primary purpose is to determine economy and efficiency of
the operation of government activities. In the exercise of legislative scrutiny, Congress
may request information and report from the other branches of government. It can give
recommendations or pass resolutions for consideration of the agency involved.

xxx xxx xxx

b. Congressional investigation

While congressional scrutiny is regarded as a passive process of looking at the facts that
are readily available, congressional investigation involves a more intense digging of facts.
The power of Congress to conduct investigation is recognized by the 1987 Constitution
under section 21, Article VI, xxx xxx xxx

c. Legislative supervision

The third and most encompassing form by which Congress exercises its oversight power is thru
legislative supervision. "Supervision" connotes a continuing and informed awareness on the part
of a congressional committee regarding executive operations in a given administrative area.
While both congressional scrutiny and investigation involve inquiry into past executive branch
actions in order to influence future executive branch performance, congressional supervision
allows Congress to scrutinize the exercise of delegated law-making authority, and permits
Congress to retain part of that delegated authority.

Congress exercises supervision over the executive agencies through its veto power. It typically
utilizes veto provisions when granting the President or an executive agency the power to
promulgate regulations with the force of law. These provisions require the President or an agency
to present the proposed regulations to Congress, which retains a "right" to approve or disapprove
any regulation before it takes effect. Such legislative veto provisions usually provide that a
proposed regulation will become a law after the expiration of a certain period of time, only if
Congress does not affirmatively disapprove of the regulation in the meantime. Less frequently,
the statute provides that a proposed regulation will become law if Congress affirmatively
approves it.

Supporters of legislative veto stress that it is necessary to maintain the balance of power between
the legislative and the executive branches of government as it offers lawmakers a way to
delegate vast power to the executive branch or to independent agencies while retaining the
option to cancel particular exercise of such power without having to pass new legislation or to
repeal existing law. They contend that this arrangement promotes democratic accountability as it
provides legislative check on the activities of unelected administrative agencies. One proponent
thus explains:

It is too late to debate the merits of this delegation policy: the policy is too deeply
embedded in our law and practice. It suffices to say that the complexities of modern
government have often led Congress-whether by actual or perceived necessity- to
legislate by declaring broad policy goals and general statutory standards, leaving the
choice of policy options to the discretion of an executive officer. Congress articulates
legislative aims, but leaves their implementation to the judgment of parties who may or
may not have participated in or agreed with the development of those aims.
Consequently, absent safeguards, in many instances the reverse of our constitutional
scheme could be effected: Congress proposes, the Executive disposes. One safeguard,
 of course, is the legislative power to enact new legislation or to change existing law. But
without some means of overseeing post enactment activities of the executive branch,
Congress would be unable to determine whether its policies have been implemented in
accordance with legislative intent and thus whether legislative intervention is appropriate.

Its opponents, however, criticize the legislative veto as undue encroachment upon the
executive prerogatives. They urge that any post-enactment measures undertaken by the
legislative branch should be limited to scrutiny and investigation; any measure beyond
that would undermine the separation of powers guaranteed by the Constitution. They
contend that legislative veto constitutes an impermissible evasion of the President’s veto authority
and intrusion into the powers vested in the executive or judicial branches of government.
Proponents counter that legislative veto enhances separation of powers as it prevents the
executive branch and independent agencies from accumulating too much power. They submit
that reporting requirements and congressional committee investigations allow Congress to
scrutinize only the exercise of delegated law-making authority. They do not allow Congress to
review executive proposals before they take effect and they do not afford the opportunity for
ongoing and binding expressions of congressional intent. In contrast, legislative veto permits
Congress to participate prospectively in the approval or disapproval of "subordinate law" or those
enacted by the executive branch pursuant to a delegation of authority by Congress. They further
argue that legislative veto "is a necessary response by Congress to the accretion of policy control
by forces outside its chambers." In an era of delegated authority, they point out that legislative
veto "is the most efficient means Congress has yet devised to retain control over the evolution
and implementation of its policy as declared by statute."

In Immigration and Naturalization Service v. Chadha, the U.S. Supreme Court resolved the
validity of legislative veto provisions. The case arose from the order of the immigration judge
suspending the deportation of Chadha pursuant to § 244(c)(1) of the Immigration and Nationality
Act. The United States House of Representatives passed a resolution vetoing the suspension
pursuant to § 244(c)(2) authorizing either House of Congress, by resolution, to invalidate the
decision of the executive branch to allow a particular deportable alien to remain in the United
States. The immigration judge reopened the deportation proceedings to implement the House
order and the alien was ordered deported. The Board of Immigration Appeals dismissed the
alien’s appeal, holding that it had no power to declare unconstitutional an act of Congress. The
United States Court of Appeals for Ninth Circuit held that the House was without constitutional
authority to order the alien’s deportation and that § 244(c)(2) violated the constitutional doctrine
on separation of powers.

On appeal, the U.S. Supreme Court declared § 244(c)(2) unconstitutional. But the Court shied
away from the issue of separation of powers and instead held that the provision violates the
presentment clause and bicameralism. It held that the one-house veto was essentially legislative
in purpose and effect. As such, it is subject to the procedures set out in Article I of the
Constitution requiring the passage by a majority of both Houses and presentment to the
President. x x x x x x x x x

Two weeks after the Chadha decision, the Court upheld, in memorandum decision, two lower
court decisions invalidating the legislative veto provisions in the Natural Gas Policy Act of 1978
and the Federal Trade Commission Improvement Act of 1980. Following this precedence, lower
courts invalidated statutes containing legislative veto provisions although some of these
provisions required the approval of both Houses of Congress and thus met the bicameralism
requirement of Article I. Indeed, some of these veto provisions were not even
exercised.35 (emphasis supplied)

In Macalintal, given the concept and configuration of the power of congressional oversight and
considering the nature and powers of a constitutional body like the Commission on Elections, the Court
struck down the provision in RA 9189 (The Overseas Absentee Voting Act of 2003) creating a Joint
Congressional Committee. The committee was tasked not only to monitor and evaluate the
implementation of the said law but also to review, revise, amend and approve the IRR promulgated by the
Commission on Elections. The Court held that these functions infringed on the constitutional
independence of the Commission on Elections.36

With this backdrop, it is clear that congressional oversight is not unconstitutional per se, meaning, it
neither necessarily constitutes an encroachment on the executive power to implement laws nor
undermines the constitutional separation of powers. Rather, it is integral to the checks and balances
inherent in a democratic system of government. It may in fact even enhance the separation of powers as
it prevents the over-accumulation of power in the executive branch.

However, to forestall the danger of congressional encroachment "beyond the legislative sphere," the
Constitution imposes two basic and related constraints on Congress. 37 It may not vest itself, any of its
committees or its members with either executive or judicial power.38 And, when it exercises its legislative
power, it must follow the "single, finely wrought and exhaustively considered, procedures" specified under
the Constitution,39 including the procedure for enactment of laws and presentment.

Thus, any post-enactment congressional measure such as this should be limited to scrutiny and
investigation. In particular, congressional oversight must be confined to the following:

(1) scrutiny based primarily on Congress’ power of appropriation and the budget hearings
conducted in connection with it, its power to ask heads of departments to appear before and be
heard by either of its Houses on any matter pertaining to their departments and its power of
confirmation40 and

(2) investigation and monitoring41 of the implementation of laws pursuant to the power of
Congress to conduct inquiries in aid of legislation.42

Any action or step beyond that will undermine the separation of powers guaranteed by the Constitution.
Legislative vetoes fall in this class.

Legislative veto is a statutory provision requiring the President or an administrative agency to present the
proposed implementing rules and regulations of a law to Congress which, by itself or through a committee
formed by it, retains a "right" or "power" to approve or disapprove such regulations before they take effect.
As such, a legislative veto in the form of a congressional oversight committee is in the form of an inward-
turning delegation designed to attach a congressional leash (other than through scrutiny and
investigation) to an agency to which Congress has by law initially delegated broad powers.43 It radically
changes the design or structure of the Constitution’s diagram of power as it entrusts to Congress a direct
role in enforcing, applying or implementing its own laws.44

Congress has two options when enacting legislation to define national policy within the broad horizons of
its legislative competence.45 It can itself formulate the details or it can assign to the executive branch the
responsibility for making necessary managerial decisions in conformity with those standards.46 In the
latter case, the law must be complete in all its essential terms and conditions when it leaves the hands of
the legislature.47 Thus, what is left for the executive branch or the concerned administrative agency when
it formulates rules and regulations implementing the law is to fill up details (supplementary rule-making) or
ascertain facts necessary to bring the law into actual operation (contingent rule-making).48

Administrative regulations enacted by administrative agencies to implement and interpret the law which
they are entrusted to enforce have the force of law and are entitled to respect.49 Such rules and
regulations partake of the nature of a statute50 and are just as binding as if they have been written in the
statute itself. As such, they have the force and effect of law and enjoy the presumption of constitutionality
and legality until they are set aside with finality in an appropriate case by a competent court. 51 Congress,
in the guise of assuming the role of an overseer, may not pass upon their legality by subjecting them to its
stamp of approval without disturbing the calculated balance of powers established by the Constitution. In
exercising discretion to approve or disapprove the IRR based on a determination of whether or not they
conformed with the provisions of RA 9335, Congress arrogated judicial power unto itself, a power
exclusively vested in this Court by the Constitution.

Considered Opinion of
Mr. Justice Dante O. Tinga

Moreover, the requirement that the implementing rules of a law be subjected to approval by Congress as
a condition for their effectivity violates the cardinal constitutional principles of bicameralism and the rule
on presentment.52

Section 1, Article VI of the Constitution states:

Section 1. The legislative power shall be vested in the Congress of the Philippines which
shall consist of a Senate and a House of Representatives, except to the extent reserved to
the people by the provision on initiative and referendum. (emphasis supplied)

Legislative power (or the power to propose, enact, amend and repeal laws) 53 is vested in Congress which
consists of two chambers, the Senate and the House of Representatives. A valid exercise of legislative
power requires the act of both chambers. Corrollarily, it can be exercised neither solely by one of the two
chambers nor by a committee of either or both chambers. Thus, assuming the validity of a legislative veto,
both a single-chamber legislative veto and a congressional committee legislative veto are invalid.

Additionally, Section 27(1), Article VI of the Constitution provides:

Section 27. (1) Every bill passed by the Congress shall, before it becomes a law, be
presented to the President. If he approves the same, he shall sign it, otherwise, he shall veto it
and return the same with his objections to the House where it originated, which shall enter the
objections at large in its Journal and proceed to reconsider it. If, after such reconsideration, two-
thirds of all the Members of such House shall agree to pass the bill, it shall be sent, together with
the objections, to the other House by which it shall likewise be reconsidered, and if approved by
two-thirds of all the Members of that House, it shall become a law. In all such cases, the votes of
each House shall be determined by yeas or nays, and the names of the members voting for or
against shall be entered in its Journal. The President shall communicate his veto of any bill to the
House where it originated within thirty days after the date of receipt thereof; otherwise, it shall
become a law as if he had signed it. (emphasis supplied)

Every bill passed by Congress must be presented to the President for approval or veto. In the absence of
presentment to the President, no bill passed by Congress can become a law. In this sense, law-making
under the Constitution is a joint act of the Legislature and of the Executive. Assuming that legislative veto
is a valid legislative act with the force of law, it cannot take effect without such presentment even if
approved by both chambers of Congress.

In sum, two steps are required before a bill becomes a law. First, it must be approved by both Houses of
Congress.54 Second, it must be presented to and approved by the President.55 As summarized by Justice
Isagani Cruz56 and Fr. Joaquin G. Bernas, S.J.57, the following is the procedure for the approval of bills:

A bill is introduced by any member of the House of Representatives or the Senate except for
some measures that must originate only in the former chamber.

The first reading involves only a reading of the number and title of the measure and its referral by
the Senate President or the Speaker to the proper committee for study.
 The bill may be "killed" in the committee or it may be recommended for approval, with or without
amendments, sometimes after public hearings are first held thereon. If there are other bills of the
same nature or purpose, they may all be consolidated into one bill under common authorship or
as a committee bill.

Once reported out, the bill shall be calendared for second reading. It is at this stage that the bill is
read in its entirety, scrutinized, debated upon and amended when desired. The second reading is
the most important stage in the passage of a bill.

The bill as approved on second reading is printed in its final form and copies thereof are
distributed at least three days before the third reading. On the third reading, the members merely
register their votes and explain them if they are allowed by the rules. No further debate is allowed.

Once the bill passes third reading, it is sent to the other chamber, where it will also undergo the
three readings. If there are differences between the versions approved by the two chambers, a
conference committee58 representing both Houses will draft a compromise measure that if ratified
by the Senate and the House of Representatives will then be submitted to the President for his
consideration.

The bill is enrolled when printed as finally approved by the Congress, thereafter authenticated
with the signatures of the Senate President, the Speaker, and the Secretaries of their respective
chambers…59

The President’s role in law-making.

The final step is submission to the President for approval. Once approved, it takes effect as law
after the required publication.60

Where Congress delegates the formulation of rules to implement the law it has enacted pursuant to
sufficient standards established in the said law, the law must be complete in all its essential terms and
conditions when it leaves the hands of the legislature. And it may be deemed to have left the hands of the
legislature when it becomes effective because it is only upon effectivity of the statute that legal rights and
obligations become available to those entitled by the language of the statute. Subject to the indispensable
requisite of publication under the due process clause, 61 the determination as to when a law takes effect is
wholly the prerogative of Congress.62 As such, it is only upon its effectivity that a law may be executed
and the executive branch acquires the duties and powers to execute the said law. Before that point, the
role of the executive branch, particularly of the President, is limited to approving or vetoing the law. 63

From the moment the law becomes effective, any provision of law that empowers Congress or any of its
members to play any role in the implementation or enforcement of the law violates the principle of
separation of powers and is thus unconstitutional. Under this principle, a provision that requires Congress
or its members to approve the implementing rules of a law after it has already taken effect shall be
unconstitutional, as is a provision that allows Congress or its members to overturn any directive or ruling
made by the members of the executive branch charged with the implementation of the law.

Following this rationale, Section 12 of RA 9335 should be struck down as unconstitutional. While there
may be similar provisions of other laws that may be invalidated for failure to pass this standard, the Court
refrains from invalidating them wholesale but will do so at the proper time when an appropriate case
assailing those provisions is brought before us.64

The next question to be resolved is: what is the effect of the unconstitutionality of Section 12 of RA 9335
on the other provisions of the law? Will it render the entire law unconstitutional? No.
Section 13 of RA 9335 provides:

SEC. 13. Separability Clause. – If any provision of this Act is declared invalid by a competent
court, the remainder of this Act or any provision not affected by such declaration of invalidity shall
remain in force and effect.

In Tatad v. Secretary of the Department of Energy,65 the Court laid down the following rules:

The general rule is that where part of a statute is void as repugnant to the Constitution, while
another part is valid, the valid portion, if separable from the invalid, may stand and be enforced.
The presence of a separability clause in a statute creates the presumption that the legislature
intended separability, rather than complete nullity of the statute. To justify this result, the valid
portion must be so far independent of the invalid portion that it is fair to presume that the
legislature would have enacted it by itself if it had supposed that it could not constitutionally enact
the other. Enough must remain to make a complete, intelligible and valid statute, which carries
out the legislative intent. x x x

The exception to the general rule is that when the parts of a statute are so mutually dependent
and connected, as conditions, considerations, inducements, or compensations for each other, as
to warrant a belief that the legislature intended them as a whole, the nullity of one part will vitiate
the rest. In making the parts of the statute dependent, conditional, or connected with one another,
the legislature intended the statute to be carried out as a whole and would not have enacted it if
one part is void, in which case if some parts are unconstitutional, all the other provisions thus
dependent, conditional, or connected must fall with them.

The separability clause of RA 9335 reveals the intention of the legislature to isolate and detach any
invalid provision from the other provisions so that the latter may continue in force and effect. The valid
portions can stand independently of the invalid section. Without Section 12, the remaining provisions still
constitute a complete, intelligible and valid law which carries out the legislative intent to optimize the
revenue-generation capability and collection of the BIR and the BOC by providing for a system of rewards
and sanctions through the Rewards and Incentives Fund and a Revenue Performance Evaluation Board.

To be effective, administrative rules and regulations must be published in full if their purpose is to enforce
or implement existing law pursuant to a valid delegation. The IRR of RA 9335 were published on May 30,
2006 in two newspapers of general circulation66 and became effective 15 days thereafter.67 Until and
unless the contrary is shown, the IRR are presumed valid and effective even without the approval of the
Joint Congressional Oversight Committee.

WHEREFORE, the petition is hereby PARTIALLY GRANTED. Section 12 of RA 9335 creating a Joint
Congressional Oversight Committee to approve the implementing rules and regulations of the law is
declared UNCONSTITUTIONAL and therefore NULL and VOID. The constitutionality of the remaining
provisions of RA 9335 is UPHELD. Pursuant to Section 13 of RA 9335, the rest of the provisions remain
in force and effect.

SO ORDERED.

Puno, C.J., Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, Carpio-Morales,

Azcuna, Tinga, Chico-Nazario, Velasco, Jr., Nachura, Reyes, Leonardo-de-Castro, Brion, JJ., concur.