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China Banking Corporation v. Members of the Board of
Trustees
G.R. No. 131787 – May 19, 1999
J. Gonzaga-Reyes
Topic: ¯\_(ツ)_/¯
Doctrine: Administrative regulations must be in harmony with the
provisions of the law, and should be for the sole purpose of
carrying into effect its general provisions. Rule-making power
must be confined to details that carry into effect the law as it has
been enacted. The power cannot be extended to amending or
expanding the statutory requirements or to embrace matters not
covered by the statute.
Petitioners: China Banking Corporation (CBC), CBC Properties &
Computer Center, Inc. (CBC-PCCI)
Respondents: The Members of the Board of Trustees, Home
Development Mutual Fund (HDMF), HDMF President, The Home
Mutual Development Fund
Case Summary: PD 1572 provided for the Pag-IBIG Fund.
Under the law, employers could be exempted from coverage if
they already had an existing retirement and/or housing plan.
Due to this, petitioners were exempted for already having a
retirement plan. However, RA 7742 was passed granting the
HDMF Board the authority to issue IRR for PD 1572. Under the
Guidelines (i.e., IRR) it passed, the requirement for exemption
was now the existence of both plans. As such, the petitioners
were denied their application for renewal of exemption.
Following this, the petitioners filed a petition to declare the
Guidelines void for being issued with GADALEJ. The SC agreed
and said the Board exceeded its rule-making power when it
required the existence of both plans and not just one. The use of
“and/or” meant the employer could either have both or only one
of the plans to be eligible for exemption. The Board
misinterpreted “and/or” by thinking they had the option of
choosing whether to require both or only one in their making of
the IRR. For requiring more than what the law provided, the
Guidelines were declared void.
Facts:
 PD 1572 (HDMF Law) provided for a retirement and
housing plan for private and government employees. Under
Sec. 19, a cerificate of waiver from coverage could be
Admin Law (¯\_(ツ)_/¯)
granted to employers who already had existing retirement
and/or housing plans for their employees that were
superior to that provided under the Pag-IBIG Fund.
Petitioners were issued these certificates.
 Under RA 7742 (Law Amending PD 1572), the HDMF
Board of Trustees was given the power to promulgate
implementing rules and regulations for the law. Pursuant to
this, it issued HDMF Circular No. 124-B (Guidelines for
Filing Application For Waiver or Suspension of Fund
Coverage under PD 1752)(Guidelines).
o Under the Guidelines, a company must now have
both a retirement AND housing plan superior to that
provided under the Pag-IBIG Fund to be entitled to
the waiver.
o As such, when petitioners attempted to renew
their certificates, they were denied.
 Each of them only had a retirement plan (no
housing plan) and such was not superior to
the one provided under the Pag-IBIG Fund.
 At RTC Makati, petitioners filed a petition for certiorari
and prohibition seeking to annul and declare void the
Guidelines for having been issued with GADALEJ, as it
required the employer to have both plans to be entitled to
the waiver. In effect, the HDMF Board exceeded its rule-
making power.
 The Board filed a motion to dismiss, which was granted
on the grounds that:
o Denial/grant of an application for waiver is within
the power and authority of the Board.
o Petitioners have lost their right to appeal for failure
to appeal the denial of their application for renewal
according to the rules in the Guidelines.
 Meaning, they should have appealed to the
Board and then to the CA.
 Hence, this petition for review under Rule 45 with the
SC, alleging the RTC erred in saying:
o ..they were contesting the authority of the Board to
issue rules. They were not. They only wanted the
Guidelines to be declared null and void.
o ..appeal was the proper remedy. For them, certiorari
is the proper remedy because the order being
questioned is not the denial of their application but

the Guidelines. Hence, doctrine of exhaustion of
administrative remedies did not apply.
Issues + Held:
1. W/N appeal was the proper remedy – NO
 Certiorari is the appropriate remedy to question the
validity of the challenged issuances of the HDMF, which
are alleged to have been issued with GADALEJ.
o ITC: The matter assailed was not the denial of their
applications, but the Guidelines.
 Nonetheless, where the rigid application of rules would
frustrate substantial justice, the courts are justified in
exempting a particular case from the operation of such
rules.
o Exceptions to rule on exhaustion of administrative
remedies:
 (1) Pure question of law; (2) Where the
controverted act is patently illegal or was
performed without/in excess of jurisdiction.
o While certiorari may not be used as a substitute for
an appeal, especially a lost one, this rule should not
be strictly enforced if the petition is genuinely
meritorious.
 ITC: The SC finds merit in the present
petition.
2. W/N the Guidelines, specifically the provision requiring
employers to have both retirement and housing plans
superior to that provided under the Pag-IBIG fund, is
void – YES
 This case involves the interpretation of “and/or” in Sec. 19,
PD 1752, which provides for the requirements for a grant of
a waiver from the coverage of the law.
o PD 1752 (law) says – An employer who has their own
provident (i.e., retirement) and/or housing plan may
register for the waiver.
o The Guidelines (IRR of PD 1752) say – Any employer
with a plan providing both for provident/retirement
and housing benefits may apply for the waiver.
 According to the Board, the use of “and/or”
could only be used interchangeably and not
together. As such, the option of requiring
either both or only one belonged to the
Board, pursuant to their rule-making
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powers granted by RA 7742. Thus, in issuing
the Guidelines, they chose to require both.
 There is no question that the HDMF Board has rule-
making powers.
o Under Sec. 5, RA 7742, the board shall promulgate
rules and regulations necessary for the effective
implementation of PD 1752.
o Sec. 13, PD 1752 also recognized the Board’s
authority to make and change needful rules and
regulations to provide for, among others:
 The effective administration, custody,
development, utilization and disposition of
the Fund or parts thereof including payment
of amounts credited to members or to their
beneficiaries or states
 Extension of Fund coverage to other working
groups and waiver or suspension of coverage
or its enforcement for reasons therein stated.
 Other matters that, by express or implied
provisions of this Act, shall require
implementation by appropriate policies, rules
and regulations.
 However, the Board incorrectly interpreted the legal
signification of “and/or.”
o The words should be taken in its oridinary
signification = either and or.
 E.g. “Butter and/or eggs” means “butter and
eggs OR butter OR eggs”
o Effect must be given to both the conjunctive “and”
and the disjunctive “or.”
 It is used to avoid a construction, which
would exclude a combination (using or) or
would exclude the efficacy of any one
standing alone (using and).
 Given this, it is clear from PD 1752 that the legislature
intended that an employer may have either of the
plans superior to that provided under the Pag-IBIG Fund to
obtain exemption from coverage.
o If the law intended differently, it would not have
used “and/or.”
o Additionally, Sec. 19(a) requires certification that
the “plan or plans” are superior.
 PAGE 3 of 19

 Requiring the existence and superiority of both plans is to

radically impose a more stringent condition for
waiver, which was clearly not envisioned by the basic law.
By removing “or” in the IRR, the HDMF Board exceeded
its authority.
o Rules and regulations, which are the product of a
delegated power to create legal provisions that have
effect of law, should be within the scope of the
statutory authority granted by the legislature to the
administrative agency.
o Department zeal may not be permitted to outrun the
authority conferred by statute.
o People v. Macaren: Administrative regulations must
be in harmony with the provisions of the law, and
should be for the sole purpose of carrying into effect
its general provisions. Rule-making power must be
confined to details that carry into effect the law as it
has been enacted. The power cannot be extended to
amending or expanding the statutory requirements
or to embrace matters not covered by the statute.
 While the requirement of both plans may strengthen the
HDMF, the basic law (i.e., PD 1752) should still prevail. The
IRR cannot go beyond its terms and provisions.

Ruling:
Petition GRANTED. The Guidelines are declared INVALID insofar
as they require that an employer must have both plans to be
entitled to a certificate of waiver from coverage.

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Marcos v. Court of Appeals
G.R. No. 120880 – 5 June 1997
Torres, Jr., J.
Doctrine:
[Re: probate court]
The BIR does not need to wait for the approval of the probate
court handling the administration of the estate of the decedent
before it can assess and collect taxes upon said estate. On the
contrary, it is the BIR that must certify that estate taxes have been
paid before the probate court can distribute the estate among the
heirs.
[Re: DOJ findings]
The discrepancy between the findings of the DOJ Panel of
Prosecutors and the BIR with regard to the amount of deficiency
taxes does not mean that the Government is uncertain as to the
total value of the estate of Marcos. It is the BIR, and not the DOJ,
that is tasked with the assessment of taxes due upon the estate of
the decedent. Such assessment must be presumed correct and
made in good faith absent any proof of irregularities attending
such assessment. The burden of proof is on the complaining party.
Petitioners: Ferdinand R. Marcos II
Respondents: Court of Appeals; Commissioner of the Bureau of
Internal Revenue; and Herminia D. De Guzman
Case Summary: Marcos’ estate, Imelda, and petitioner were
assessed with deficiency estate and income tax after the death of
Ferdinand Marcos. Petitioner assails the assessment and
subsequent collection made by the BIR, claiming that it did not
have the authority to do such without the approval of the probate
court handling the estate of the decedent. Petitioner also assails
the amount assessed by the BIR, claiming that there was a
discrepancy between such amount and the amount found by the
DOJ panel. Petitioner also claims several procedural infirmities
with manner in which such assessment and execution were made,
claiming, inter alia, that the BIR went beyond the prescriptive
period for assessment and collection.
The Court rejected all the contentions of petitioner, holding that
the BIR is vested with the authority to assess and collect deficiency
estate and income taxes from the estate of the decedent, as well as
that of petitioner and his mother. The BIR need not wait for the
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approval of the probate court, and the findings of the BIR with
regard to the amounts assessed prevail over that of the DOJ, as the
BIR is the body vested with the power to assess and collect taxes.
Facts:
· After the death of Ferdinand Marcos (the decedent), a
Special Tax Audit Team was formed to investigate the tax
liabilities of the decedent and his family.
o It found that the Marcoses failed to do the following:
▪ File a written notice of the death of the
decedent;
▪ File an estate tax return;
▪ File several income tax returns from 1982 to
1986.
o Following such, the BIR issued the following
assessments:
▪ Against the estate of the decedent, deficiency
estate tax amounting to Php 23.3 billion.
▪ Against the spouses Marcos, deficiency
income tax amounting to Php 149,551.70
(1985) and Php 184 million (1986).
▪ Against petitioner Marcos, deficiency income
tax amounting to Php 20,410 (1982-1985).
o The above assessments were not protested by the
heirs of the decedent within 30 days of service of
said assessments.
▪ Respondent avers that copies of the
assessments were issued upon the heirs of
the decedent.
▪ Said issuances were to their last known
addresses (San Juan homes of Imelda and
Bongbong) as well as the office of Bongbong
in the House of Representatives.
· A total of 30 Notices of Levy on real property were issued
against the Marcoses.
o During the auction, no bidders were present, and as
such the properties of the Marcoses were declared
forfeited in favor of the government.
· Bongbong Marcos in this case is assailing the decision of
the Court of Appeals which ruled that the deficiency income
and estate tax assessments issued by the BIR was already
final and unappealable.

o Due to such finality, the subsequent levy of real
properties is a tax remedy resorted to by the
government.
[ARGUMENTS OF PETITIONER]
· Petitioner filed the instant petition for certiorari and
prohibition under Rule 65 with prayer for temporary
restraining order and/or writ preliminary injunction.
· [1] Petitioner argues that the notices of levy and sale and
the subsequent sale of properties of the decedent by the
BIR were null and void.
o They disregarded established procedure for the
enforcement of taxes due upon the estate of the
deceased.
o Petitioner invokes Domingo v. Garlitos: the claimant
must first present a claim before the probate
court so that the court may order the administrator
to pay the taxes due.
▪ This remedy is exclusive and cannot be
effected through any other means.
· [2] Petitioner also argues that the probate court is not
precluded from denying a request by the government for
the immediate payment of taxes.
o The government should order the payment of the
same only within the period fixed by the probate
court for the payment of all the debts of the
decedent.
o CIR v. Administratrix of the Estate of Echarri: If the
government presents a claim for taxes against the
estate of a deceased person, the probate court (or
the court having control over the administration
proceedings) has the authority to order payment by
the administrator.
▪ BUT this also means that the probate court
has the “negative authority” to deny the
same.
[ARGUMENTS OF RESPONDENT]
· [1] Respondent argues that the authority of the state to
collect taxes is paramount, and the pendency of probate
proceedings over the estate of the decedent does not stop
its authority to assess and collect estate taxes through
summary remedies.
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oClaims for payment of estate and income taxes due
and assessed after the death of the decedent does
not need to be in the form of a claim against the
estate.
o Such assessed deficiency taxes should be paid
immediately.
· [2] The probate court is not the government agency which
decides whether an estate is liable for payment of estate or
income taxes.
o The probate court is a court with special and limited
jurisdiction.
Issues + Held:
[MAIN - AUTHORITY OF BIR and DOJ]
1. Whether the Bureau of Internal Revenue can collect
estate tax deficiencies, by the summary remedy of
levying upon and sale of the real properties of the
decedent, without the cognition and authority of the
probate court — YES, as the nature of the process of
estate tax collection, as well as the NIRC and
jurisprudence, shows that the approval of the probate court
is not a requirement in the collection of such taxes.
• The collection of estate taxes is not made against the
property of the decedent, or a claim against the estate, but
against the interest or property right of any heir,
legatee, devisee, etc. has in the properties formerly
held by the decedent.
• Section 3 of the NIRC1 shows that the enforcement and
collection of estate tax is executive in character.
o In the case of Vera v. Fernandez, the necessity of
government funding under the lifeblood doctrine
justifies the exemption of tax claims against the
estate of the decedent from the application of the
statute of non-claims.
o The court may direct the payment of estate taxes
upon motion showing that the taxes have ben
assessed against the estate.
o “Such liberal treatment of internal revenue taxes in
the private proceedings extends so far, even to
1
The powers and duties of the Bureau of Internal Revenue shall comprehend the assessment and collection
of all national internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties, and
􏰁nes connected therewith, including the execution of judgments in all cases decided in its favor by the Court
of Tax Appeals and the ordinary courts. Said Bureau shall also give effect to and administer the supervisory
and police power conferred to it by this Code or other laws.

allowing the enforcement of tax obligations against
the heirs of the decedent, even after distribution of
the estate’s properties.”
o It is clear that the approval of the probate court
or as a settlement tribunal over the deceased is
not a mandatory requirement in the collection
of estate taxes.
• Nothing in the NIRC and in pertinent remedial laws imply
the necessity of the probate or estate settlement court’s
approval of the state’s claim for estate taxes, before the
same can be enforced and collected.
o Section 87 of the NIRC goes against the
contention of the petitioner that the probate court
approves the assessment and collection of the estate
tax.
o Under such provision, the probate court cannot
authorize the executor or judicial administrator of
the decedent’s estate to distribute any share of the
estate until the Commissioner of Internal
Revenue certifies that estate taxes have been
paid.
o Section 229 of the NIRC also states that if the
taxpayer would like to protest the assessment by the
BIR, the taxpayer must file such protest within 30
days from receipt of the assessment.
▪ Petitioner not only failed to file the required
estate tax return within the required period,
but also never questioned the assessments
served upon them.
▪ Due to such failure, the assessments have
become final, leading to the collection of the
BIR of the taxes through levy.
2. Whether the assessment of the BIR to the amount of
Php 23.3 billion was improper since it deviated from
the findings of the Department of Justice’s Panel of
Prosecutors. — NO, as the DOJ is not tasked with the
determination of the amount of taxes due upon Marcos’
estate; the BIR is tasked with such.
• The determination and assessments of the BIR are
presumed correct and made in good faith.
o It is the taxpayer who has the duty of proving that
such assessments were made with any irregularities.
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PAGE 6 of 19
o Absent any proof of irregularity in the performance
of official duties, the assessment of the BIR will not
be disturbed.
o Even if an assessment is based on estimates, it is
prima facie valid and lawful if it does not appear that
it was arrived at arbitrarily or capriciously.
▪ The burden of proof is on the taxpayer to
clearly show that the assessment was
erroneous.
▪ Failure to present proof of error in the
assessment will justify the affirmation of the
courts of such assessments.
• In the instant case, petitioner has not pointed out any
provision in the memorandum of the Special Audit Team
giving rise to the questioned assessment which bears any
trace of falsity.
[TAX ISSUES]
1. Whether, granting that the assessment was made
validly, the collection (Notices of Levy) was done in
violation of the law — NO, as the Notices of Levy upon
real property were issued within the prescriptive period
and in accordance with the provisions of the NIRC.
• Petitioner here argues that while the assessment may have
been validly undertaken by the Government, the collection
of the taxes was done in violation of the law.
o Petitioner argues that manner and method of
collection may be questioned separately from and
regardless of the finality of the assessment because
the Government does not have unlimited power to
enforce collection.
o Petitioner points out that Memorandum Circular No.
38-68 mandates the issuance of Notices of Levy 3
months ≥ x ≥ 6 months where x is the date of the
last service of tax assessment.
▪ Petitioner points out that the Notices of Levy
were issued 17 months after the last service
in their case, making Notices of Levy void.
• The Court disagrees, holding that the deficiency tax
assessment had already become final, executory, and
demandable.
o Thus, the same can be collected through the
summary remedy of distraint or levy.
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o Section 223 of the NIRC provides for exceptions as

to the period of limitation of assessment and
collection.
▪ Under such provision, in case a taxpayer fails
to file a return, the tax may be assessed at
any time within 10 years after the omission.
• Any tax assessed may be collected by
levy upon real property within 3 years
following the assessment.

Ruling: The Court resolves to DENY the petition.

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Perez v. LPG Refillers Association
G.R. 159149– June 26, 2006
J. Quisumbing
Topic: A Surprise Topic
Doctrine: For an administrative regulation to have the force of
penal law, (1) the violation of the administrative regulation must
be made a crime by the delegating statute itself; and (2) the
penalty for such violation must be provided by the statute itself.
Petitioner: Vincent Perez (Secretary of Department of Energy)
Respondents: LPG Refillers Association of the Philippines, Inc.
Case Summary: The respondent is assailing the validity of the
implementing Circular of BP33, the law penalizing acts involving
petroleum products. It is arguing that some acts or omissions
mentioned in the Circular are not part of the law. The SC says
otherwise. The Circular is valid since it satisfies the requirement
for a valid administrative regulation [SEE DOCTRINE]. The SC
reiterated that the acts mentioned in the Circular gave the
specifics for the “general” terms mentioned in the law.
Facts:
 LPG Refillers Association of the Philippines, Inc.
[Respondent] is assailing the validity of Department of
Energy’s [DoE] Circular No. 2000-06-010, the
implementing circular of BP33, for being contrary to law.
BP33 penalizes illegal trading, hoarding, overpricing,
adulteration, underdelivery, and underfilling of petroleum
products. BP33 sets the monetary penalty for violators to a
minimum of P20,000 and a maximum of P50,000.
 Respondent is arguing that the circular contains acts and
omissions not expressly penalized by BP33 and RA8479
(Downstream Oil Industry Deregulation Act of 1998).
NOTE: The full list of acts and omissions penalized by the
Circular is found in the full text. Some headers are: (1) No
Price Display Board, (2) No Weighing Scale, (3) No Tare
Weight or Incorrect Tare Weight Markings, (4) No
Appropriate LPG Seal, (5) No Trade Name, Unbranded LPG
Cylnders, No Serial Number, etc.
 RTC Ruling: RTC nullified the circular on the ground that
it introduces offenses not included in the law. The court
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intimated that the Circular, in providing penalties on a per
cylinder basis for each violation, might exceed the
maximum penalty under the law.
Issues + Held:
1. W/N the RTC erred in declaring the provisions of the
Circular null and void, and prohibiting the Circular’s
implementation [YES]
 DoE’s Defense: The penalties for the acts and omissions
enumerated in the Circular are sanctioned by Sections 1 2
and 3-A3 10 of BP33, and Section 23 4 of RA 8479. Added to
this, Sections 5(g)5 and 21 of RA7638 also authorize the
DoE to impose the penalties provided in the Circular.
 [IMPT] SC: For an administrative regulation, such as the
Circular in this case, to have the force of penal law, (1) the
violation of the administrative regulation must be made a
crime by the delegating statute itself; and (2) the penalty
for such violation must be provided by the statute itself.
o On the first requirement: Under the general
description of what constitutes criminal acts
involving petroleum products (adulteration,
2
Declaration of Policy. — It is the declared policy of the State to institutionalize as a national way of life
energy conservation geared towards the judicious and efficient use of energy in order to enhance availability
of energy supplies required to support economic, social and developmental goals. In view of the continuing
uncertainty of the international oil supply, it is imperative that measures to conserve energy be strengthened
and that acts and activities involving petroleum and/or petroleum products contrary to the intent and spirit of
judicious usage and conservation of energy, which are inimical to the public interest and national security, be
prohibited and appropriate sanction therefor be imposed.
3
Rules and Regulations; Administrative sanctions for violation thereof. — The Bureau of Energy
Utilization shall issue such rules and regulations as are necessary to carry into effect the provisions of this Act,
subject to the approval of the Minister of Energy, after consultation with the affected industry sectors. Said
rules and regulations shall take effect fifteen (15) days from the date of its publication in two (2) newspapers of
general circulation.
The Bureau of Energy Utilization is empowered to impose in an administrative proceeding, after due notice
and hearing, upon any person who violates any provision of such rules and regulations, a fine of not more than
ten thousand pesos (P10,000.00) or to suspend or remove the license or permit of a hauler, marketer, refiller,
dealer, sub- dealer or retail outlet: Provided, That hearing in any administrative proceedings may be waived by
respondent. Provided, Further, That during the pendency of such administrative proceeding, the Bureau may
suspend the business operations of such hauler, marketer, refiller, dealer, sub-dealer or retailer or retail outlet
operator when the suspension is consistent with public interest. . . .
xxx xxx xxx
The administrative sanction that may be imposed shall be without prejudice to the filing of a criminal action as
the case may warrant.
4
Implementing Rules and Regulations. — The DOE, in coordination with the Board, the DENR, DFA,
Department of Labor and Employment (DOLE), Department of Health (DOH), DOF, DTI, National Economic
and Development Authority (NEDA) and TLRC, shall formulate and issue the necessary implementing rules
and regulations within sixty (60) days after the effectivity of this Act.
5
SEC. 5. Powers and Functions. — The Department shall have the following powers and functions: (g)
Formulate and implement programs, including a system of providing incentives and penalties, for the judicious
and efficient use of energy in all energy-consuming sectors of the economy;

underfilling, hoarding, etc.), the Circular merely lists
the various modes by which the said criminal acts
may be perpetrated (no weighing scale, no tare
weight, no authorized seal, etc.). These specific acts
and omissions are obviously within the
contemplation of the law, which seeks to curb the
pernicious practices of some petroleum merchants.
o On the second requirement: Under the Circular,
the maximum pecuniary penalty for retail outlets is
P20,000, which is within the P20k – P50k range
imposed by the law. However, for the refillers,
marketers, and dealers, the Circular is silent as to
any maximum monetary penalty. This mere silence,
nonetheless, does not amount to violation of the
aforesaid statutory maximum limit. Further, the
mere fact that the Circular provides penalties on a
per cylinder basis does not in itself run counter to
the law since all that BP33 prescribes are the
minimum and the maximum limits of penalties.
 The Circular merely implements the said law, albeit it is
silent on the maximum pecuniary penalty for refillers,
marketers, and dealers. Nothing in the Circular
contravenes the law. To nullify the Circular in this case
would be to render inutile government efforts to protect the
general consuming public against the nefarious practices of
some unscrupulous LPG traders.
Ruling: WHEREFORE, the petition is GRANTED. The assailed
Circular No. 2000-06-010 of DOE is declared valid. The Decision
and Order of the Regional Trial Court of Pasig City, Branch 161, in
SCA Case No. 2318, nullifying said Circular and prohibiting its
implementation are hereby REVERSED and SET ASIDE.
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BPI Leasing v. CA
G.R. No. 127624 - November 18, 2003
Azcuna, J.
Topic: ¯\_(ツ)_/¯
Doctrine: Regulations may only be applied retroactively if there is
an express provision stating so. A legislative rule is in the matter
of subordinate legislation, designed to implement a primary
legislation by providing the details thereof.
Petitioners: BPI Leasing Corporation (BLC)
Respondents: Court of Appeals, Court of Tax Appeals, and
Commissioner Of Internal Revenue (CIR)
Case Summary: BLC paid taxes for contractors’ tax. CIR issued
a new regulation late in the year changing the liability of
corporations like BLC from contractors’ tax to gross receipts
tax. The new tax liability of BLC is smaller so BLC asked for a
refund stating that the regulation should be applied
retroactively. CIR argued that the regulation expressly states
that the regulation is to be applied prospectively. CTA, CA, and
SC agree with CIR.
Facts:
 BLC is a corporation engaged in the business of leasing
properties.
 For the calendar year 1986, BLC paid the CIR a total of
P1,139,041.49 representing 4% "contractor’s percentage tax"
then imposed by Section 205 of the National Internal Revenue
Code, based on its gross rentals from equipment leasing for the
said year amounting to P27,783,725.42.
 11/10/86 - CIR issued Revenue Regulation 19-86. Section 6.2
thereof provided that finance and leasing companies registered
under RA 5980 (Financing Company Act) shall be subject to
gross receipt tax of 5%-3%-1% on actual income earned.
o This means that companies registered under RA 5980,
such as BLC, are not liable for "contractor’s percentage
tax", but are, instead, subject to "gross receipts tax"
under Section 260 (now Section 122) of the NIRC.
 Since BLC had earlier paid the "contractor’s percentage tax," it
re-computed its tax liabilities under the "gross receipts tax"
and arrived at the amount of P361,924.44

 BLC then filed a claim for a refund with the CIR for the amount
of P777,117.05, representing the difference between what it
had paid as "contractor’s percentage tax" and what it allegedly
should have paid for "gross receipts tax” under the RR.
 Petitioner subsequently filed a petition for review with the
CTA.
o CTA dismissed the petition saying the RR may only
be applied prospectively such that it only covers all
leases written on or after January 1, 1987. Since
BLC’s rental income was all received prior to 1986,
it follows that these are not covered by the RR. Their
subsequent MFR was also dismissed.
 CA affirmed the CTA decision.
 BLC now appeals and contends that the RR may be applied
retroactively, and thus their claim for refund must be
approved.
 The CIR on the other hand maintains that the provision on the
date of effectivity of the RR means that it is to be applied
prospectively.
Issues + Held:
2. W/N the instant petition substantially complies with SC
Circular 28 – 91 – NO. [UNIMPORTANT]
- SC: Petition should be dismissed outright for failure to comply
with the Circular.
o certification was executed by counsel who has not been
shown to have specific authority to sign the same for
BLC.
o The certificate of non-forum shopping may be signed,
for and on behalf of a corporation, by a specifically
authorized lawyer who has personal knowledge of the
facts required to be disclosed in such document. (BA
Savings Bank v. Sia)
3. Whether the Revenue Regulation is legislative or
interpretative in nature? – Legislative
- Administrative issuances may be distinguished according to
their nature and substance: legislative and interpretative.
o A legislative rule is in the matter of subordinate
legislation, designed to implement a primary
legislation by providing the details thereof.
Admin Law (¯\_(ツ)_/¯)
PAGE 10 of 19
o An interpretative rule, on the other hand, is designed to
provide guidelines to the law which the administrative
agency is in charge of enforcing.
- The RR is LEGISLATIVE in nature.
o Section 1 of the RR plainly states that it was
promulgated pursuant to Section 277 of the NIRC.
Section 277 (now Section 244) is an express grant of
authority to the Secretary of Finance to promulgate all
needful rules and regulations for the effective
enforcement of the provisions of the NIRC.
o The Court held that the application of Section 277 calls
for none other than the exercise of quasi-legislative or
rule-making authority (PICOP v. CA).
- Revenue Regulation 19-86 was issued pursuant to the rule-
making power of the Secretary of Finance, thus making it
legislative, and not interpretative as alleged by BLC.
4. W/N there was a lack of due process in the issuance of
the RR – NO.
- BLC cited CIR v Fortune Tobacco, where the Court nullified a
revenue memorandum circular which reclassified certain
cigarettes and subjected them to a higher tax rate, holding it
invalid for lack of notice, publication and public hearing.
o SC: the Court invalidated the revenue memoranda in
the cited case because the same increased the tax
liabilities of the affected taxpayers without affording
them due process.
o In this case, the RR would be beneficial to the taxpayers
as they are subjected to lesser taxes. Thus, there would
be no need for such notices, publications, and public
hearings.
5. W/N application of the RR should be prospective or
retroactive – Prospective.
- Statutes, including administrative rules and regulations,
operate prospectively only, unless the legislative intent to the
contrary is manifest by express terms or by necessary
implication.
- In the present case, there is no indication that the RR may
operate retroactively.
- Furthermore, there is an express provision stating that it "shall
take effect on January 1, 1987," and that it "shall be applicable
to all leases written on or after the said date."
o It’s clear that it must be given prospective application.
 PAGE 11 of 19

Ruling: WHEREFORE, the petition for review is hereby DENIED,

and the assailed decision and resolution of the Court of Appeals
are AFFIRMED. No pronouncement as to costs.

Admin Law (¯\_(ツ)_/¯)


Abakada Guro Party List v. Purisima | G.R. No. 166715
14 August 2008 | PONENTE: Corona, J.
*From Consti 1 pool*
Petitioner/s: Abakada Guro Party List
Respondent/s: Cesar Purisima
Nature of the Case: Special Civil Action
SUMMARY: Petitioner Abakada Guro Party List sought to
prevent respondents from enacting RA 9335 as they claimed that
its system of rewards invited corruption, that the law is violative
of the equal protection clause, that it unduly delegates legislative
power, and that it violates the separation of powers. The Court
rules that it does not do any of what it is accused of doing except
that the JCOCs veto power is violative of the separation of
FACTS:
- Congress enacted to optimize the revenue-generation
capability and collection of the Bureau of Internal Revenue
(BIR) and the Bureau of Customs (BOC).
o 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).
o Covers all officials and employees of the BIR and the
BOC with at least six months of service, regardless
of employment status.
- Petitioners, as taxpayers, filed their petition challenging the
RA. They contend
o That the law transforms the BIR and BOC
officers and employees into “bounty hunters,”
as they will only do their best only in consideration
of a reward.
 System of rewards invites corruption daw
o 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.
 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.
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PAGE 12 of 19
| That that the law unduly delegates the power to
o
fix revenue targets to the President as it lacks a
sufficient standard on that matter.6
o That the creation of a congressional oversight
committee violates the separation of powers
 the creation of the congressional oversight
committee permits legislative participation in
the implementation and enforcement of the
law.
- Respondents counter:
o That the issue is premature (no actual case or
controversy)
o That the assertion that labels employees and officers
is mere speculation and does not suffice to invalidate
the law
o that law validly classifies the BIR and the BOC
because the functions they perform are distinct from
those of the other government agencies and
instrumentalities.
o That the law provides a sufficient standard that will
guide the executive in the implementation of its
provisions.
o that 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.
ISSUE + RULING:
1. Whether the petitioners have standing. NO (but, well, ayun.)
- 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.
- “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
6
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 to dismiss BIR or BOC personnel

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.”
2. Whether the officers and employees under the law can be held
accountable under the RA. YES.
- 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.
- 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.
- 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 contrary to
public accountability.
3. Whether the equal protection clause is violated. NO.
- Equal Protection: equality under the same conditions and
among persons similarly situated
- Citing Victoriano v. Elizalde Rope Workers’ Union
o The Constitution does not require that things which
are different in fact be treated in law as though they
were the same.
o 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.
o The 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 arbitrary.
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PAGE 13 of 19
- There is valid classification in this case. Since the subject of
the law isrevenue –generation capability and collection of
the BIR and the BOC, the incentives and/or sanctions
provided in the law should logically pertain to said
agencies. 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.
4. Whether there is undue delegation of legislative power. NO.
- Two tests determine the validity of delegation of legislative
power: the completeness test and 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. 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.
- 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.
- The RA satisfies all these requirements
o RA 9335 adequately states the policy and standards
to guide the president:
 Section 2 adequately spells out the provisions
of the law
 Section 4 sets the standards for how excess
collections go into the fund and fixing of
revenue targets by the president
 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.
 Section 7 specifies the limits of the boards’
authority in that it can’t terminate employee

without due process and only if pursuant to
some law
o 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.
 The yardstick for removal (7.5% below
target) is reasonable because failing to meet
it is analogous to inefficiency &
incompetence, which are fair grounds for
removal.
5. Whether Section 12 of RA 9335 violates the separation of
power. YES.
*Note: Court said that the issue was rendered moot
and academic since the Joint Congressional Oversight
committee was made funcus officio and it ceased to
exist after the approval of the Implementing Rules
and Regulations (IRR) (as stipulated in Section 12). But
it sought to discuss it and ruled on it anyway.
- Section 12 outlines the provision on the enactment of a
Joint Congressional Oversight Committee (JCOC)
- J. Puno in Makalintal v Comelec: JCOCs are not inherently
unconstitutional since the power of oversight is held to be
an intrinsic power of the legislative branch.
o The acts done by Congress purportedly in the
exercise of its oversight powers may be divided
into three categories,
namely: scrutiny, investigation and supervision.
o Scrutiny
 Its primary purpose is to determine economy
and efficiency of the operation of government
activities.
 Can give recommendations or pass
resolutions
 Can request information and report from the
other branches of govt
o Congressional investigation
 “a more intense digging of facts”
 outlined in Section 21, Article 6 of the
Constitution
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PAGE 14 of 19
o Legislative Supervision
 Most encompassing form of oversight.
 Connotes a continuing and informed
awareness on the part of a congressional
committee regarding executive operations
 Uses veto provisions when granting the
President or any executive agency the power
to promulgate regulations with the force of
law
 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
 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. 
o 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.
- 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.
- However, the Constitution imposes two basic and related
constraints on Congress. It may not vest itself, any of its
committees or its members with either executive or judicial
power. And, when it exercises its legislative power, it must
follow the "single, finely wrought and exhaustively
considered, procedures" specified under the Constitution,
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:
o (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 confirmation and
o (2) investigation and monitoring of the
implementation of laws pursuant to the power of
Congress to conduct inquiries in aid of legislation.
o 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.  o “Legislative power is vested in Congress which
- JCOC allows Congress to alter the IRRs of an agency thru
legislative veto. IRRs have the presumption of
constitutionality unless set aside in a competent court.
Admin Law (¯\_(ツ)_/¯)
PAGE 15 of 19
- Allowing JCOC’s veto power usurps the power of the
Judiciary by passing on the legality of IRRs.
DISPOSITION: petition is PARTIALLY GRANTED. Section 12
of RA 9335 creating a JCOC 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.
Notes
On the “Considered Opinion of Justice Tinga”
- The requirement that the IRR be subject to approval by
Congress as a condition for their effectivity violates
bicameralism. (Based on separate opinion of J. Tinga)
o A valid exercise of legislative powers requires the
act of both Senate and the House of
Representatives. Legislative power cannot be
exercised solely by either chamber alone, nor by a
committee of either or both chambers. Assuming
that legislative veto is valid, both a single chamber
veto and a congressional legislative veto are invalid
o Every bill passed by Congress must first be
presented to the President for approval or veto
before it becomes law. Lawmaking is a joint act of
Legislature and Executive. Assuming that legislative
veto is a valid legislative act, it cannot take effect
without being presented to the President even if
approved by both chambers of Congress.
o From the moment a law becomes effective, it leaves
the hands of the legislature and can now be
enforced by the executive. Any provision of law
which empowers Congress to play a role in the
implementation of the law violates separation of
powers and is thus, unconstitutional.
QUOTABLE QUOTES: Most important point is this
o “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”
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.”
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PAGE 16 of 19
Gutierrez v. DBM
G.R. Number 153266 – March 18, 2010
J. Abad
Topic: [no topic specified]
Doctrine/s: Delegated rule-making is a practical necessity in
modern governance because of the increasing complexity and
variety of public functions. Such power is, however, necessarily
limited to what the law provides. Administrative agencies
implement the broad policies laid down in a law by “filling in” only
its details.
Administrative rules and regulations must be published if their
purpose is to enforce or implement existing law pursuant to a valid
delegation.
GR. No. 153266
Petitioner: Victoria C. Gutierrez, Joel R. Perez, Araceli L. Yambot,
Corazon F. Soriano, Lorna P. Tamor, Romeo S. Consignado, Divina
R. Sulit, Estrelita F. Iresare, Rosalinda L. Alpay, Aurea L. Ilagan
And All The Other Concerned Employees Of The Office Of The
Solicitor General
Respondent: Department Of Budget And Management, Honorable
Secretary Emilia T. Boncodin And Director Luz M. Cantor
+ Intervenors
GR No. 159007
Petitioners: Estrellita C. Amponin, Judith A. Cudal, Romeo A.
Pagalan, Marissa F. Pariñas, And Raymond F. Flores, Et Al
Respondents: Commission On Audit, Guilermo N. Carague, In His
Capacity As Chairman, Raul C. Flores, In His Capacity As
Commissioner, Commission On Audit, And Emmanuel M. Dalman,
In His Capacity As Commissioner, Commission On Audit
GR No. 159029
Petitioners: Augusto R. Nieves, Bonifacio H. Ativo, Tarcela P.
Detera, Nilda G. Cielo, Anthony M. Bravo, Maria Lourdes G.
Barrozo, Antonio E. Fuentes, Alfredo D. Donor, Rico B. Nava, Sr.,
Dolores C. Huidem And All The Other Concerned Employees Of
The Sorsogon State College
Respondents: Department Of Budget And Management And
Honorable Secretary Emilia T. Boncodin
GR No. 170084

Petitioners: Kapisanan Ng Mga Manggagawa Sa Bureau Of
Agricultural Statistics (Kmb), Evelyn C. Tidon, Ripol O. Abalos,
Beatriz L. Hubilla, Ma. Cheryl J. Tajonera, Lolita De Hernandez,
Flora M. Mabamba, Delilah G. Bassig And All Concerned
Incumbent And Retired Employees Of The Bureau Of Agricultural
Statistics, Department Of Agriculture
Respondents: Department Of Budget And Management And
Honorable Secretary Romulo Neri
GR No. 172713
Petitioners: Natl Housing Authority
Respondents: Epifanio P. Recana, Mercedes Amurao, Erasmo
Apostol, Florendo Asuncion, Fiorello Josefina Baltazar, Et Al
GR No. 173119
Petitioners: Insurance Commission Officers And Employees,
Represented By Insurance Commission Employees Welfare
Association (Icewa), Et Al.
Respondents: Department Of Budget And Management And/Or
Honorable Secretary Rolando G. Andaya, Jr
GR No. 176477
Petitioners: Fiber Industry Development Authority Employees
Association (Fidaea), Remedios V.J. Abgona, Celerina T. Hilario,
Quirino U. Santos, Grace Aurora F. Pastores, Rhisa V. Pegenia, Et
Al.
Respondents: Department Of Budget And Management And/Or
Honorable Secretary Rolando G. Andaya, Jr.
GR No. 177990
Petitioners: Bureau Of Animal Industry Employees Association
(Baiea), Lory C. Bangalisan, Edgardo Vinculado, Lorenzo J. Abarca,
Rolando M. Vasquez, Alfredo B. Ducusin, Et Al
Respondents: Department Of Budget And Management And/Or
Honorable Secretary Rolando G. Andaya, Jr
AM No. 06-4-02-SB
Re: Request Of Sandiganbayan For Authority To Use Their Savings
To Pay Their Cola Differential From July 1, 1989 To March 16,
1999.
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PAGE 17 of 19
Case Summary:
This is a consolidation of cases which question the inclusion of
certain allowances and fringe benefits into the standardized
salary rates for offices in the national governmentt, state
universities and colleges, and local government units as
required by the Compensation and Position Classification Act of
1989 and National Compensation Circular (NCC) 59, in
pursuant to R.A. 6758.
The Supreme Court resolved the issues presented by the
petitions saying that the contested Cost of Living Allowance
(COLA) is deemed already incorporated in the standardized
salary rates of government employees under the general rule of
integration. It is not intended as a reimbursement of expenses
incurred in the performance of official duties. The DBM
specifically identified it as an allowance or additional
compensation integrated into the standardized salary rates.
The said department is clothed with authority to make rules
and regulations, by virtue of its delegated rule-making power.
And as for the initial non-publication of the CCC, while
publication is a condition precedent for the effectivity of such
rules or regulations, the integration of the said COLA is not
dependent on the CCC 10 nor NCC 59.
Facts:
 R.A. 6758 (Compensation and Position Classification
Act of 1989) was enacted to rationalize the
compensation of govt employees.
o Sec. 127 of the RA directed the consolidation of
allowances and additional compensation already
being enjoyed by employees into their standardized
salary rates. But it exempted certain addtl
compensations that the employees may be receiving
from such consolidation.
 Pursuant to Sec. 12, the Dept of Budget and Management
(DBM) issued NCC 59 covering the offices of the natl
govt, state univs and colleges, and local govt units. It
7
Section 12. Consolidation of Allowances and Compensation.—All allowances, except for representation
and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and
crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service
personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be
determined by the DBM, shall be deemed included in the standardized-salary rates herein prescribed. Such
other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1,
1989 not integrated into the standardized salary rates shall continue to be authorized.

enumerated the specific allowances and addtl
compensations which were deemed integrated in the basic
salaries, including, the Cost of Living Allowance (COLA)
and Inflation Connected Allowance (ICA).
o DBM also issued Corporate Compensation
Circular 10 (CCC 10) covering all GOCCs and
govt financial institutions. This was re-issued on
Feb. 15, 1999 and published on Mar 16, 1999.
 The Commission on Audit disallowed the payments of
honoraria and other allowances which were deemed
integrated into the standardized salary rates.
o GOCC employees question the validity of CCC 10
due to its non-publication.
o The Court declared the CCC 10 ineffective because
of non-publication. It ordered the COA to pass on
audit the employees’ honoraria which they were
receiving prior to RA 6758.
 DBM issued Budget Circular 2001-03, clarifying that only
the exempt allowances under Sec 12 of RA 6758 may
continue to be granted the employees. All others are
deemed integrated in the standardized salary rates.
o Payment of allowances and compensation (COLA,
amelioration allowances, ICA) were unauthorized.
 May 16, 2002 – Employees of the Office of SolGen filed a
petition for certiorari and mandamus (G.R. 153266)
questioning the propriety of integrating their COLA into
their standardized salary rates.
o Employees of other offices followed suit.
 (G.R. 159007) Petitioners questioned the disallowance of
the allowances and fringe benefits that the COA auditing
personnel assigned to the GSIS used to get.
 (G.R. 173119) Petitioners questioned the disallowance of
the ICA that used to be paid to the officials and employees
of the insurance commission.
 The Court consolidated the petitions and considered them
as a class suit for all govt employees, excluding employees
of GOCCs and govt financial institutions.
 Oct 26, 2005 – DBM issued Natl Budget Circular 2005-
502 which provided that all Supreme Court rulings on the
integration of allowances under RA 6758 applied only to
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PAGE 18 of 19
specific GOCCs since the consolidated cases covering the
natl govt employees are still pending with the Court.
o Payment of allowances and benefits remained
prohibited until otherwise provided by law or ruled
by the Court.
o All agency heads and other officials and employees
found to have authorized the grant of COLA and
other allowances and benefits already integrated in
the basic salary shall personally held liable for such
payment.
Issues + Held:
6. W/N the COLA should be deemed integrated into the
standardized salary rates of the concerned govt employees
by virtue of Sec. 12 of RA 6758 – YES.
o Petitioners: DBM needs to promulgate rules and
regulations before the COLA they were getting prior
to RA 6758 can be deemed integrated in their
standardized salary rates.
o Respondent: RA 6758 already specified the
allowances and benefits that were not to be
integrated in the new salary rates. All other
allowances, such as COLA, are deemed integrated in
the salary rates.
o COURT: The first sentence of Sec. 12 of RA 6758
notes “all allowances” were deemed integrated
into the standardized salary rates except
certain allowances
1) Representation and transportation
allowances
2) Clothing and laundry allowances
3) Subsistence allowances of marine
officers and crew on board govt vessels
4) Subsistence allowances of hospital
personnel
5) Hazard pay
6) Allowances of foreign service personnel
stationed abroad
7) Such other addtl compensation not
otherwise specified in Sec. 12 as may be
determined by the DBM
 While it enumerated certain exclusions,
it also authorized the DBM to identify

such other addtl compensation that may
be granted over and above the
standardized salary rates.
 Phil. Ports Authority Employees Hired After
07/01/1989 v. CoA: While Sec. 12 could be
considered self-executing in regard to items
1-6, it was not so in regard to item 7.
 DBM still needed to amplify item 7
since once cannot simply assume what
other allowances were excluded from
the standardized salary rates. Only
upon the issuance and effectivity of
the corresponding IRRs that item 7
could be deemed legally completed.
 Delegated rule-making is a practical
necessity in modern governance because
of the increasing complexity and variety
of public functions. Congress has
endowed administrative agencies like
DBM with the power to make rules and
regulations to implement a given
legislation and effectuate policies.
 Such power is necessarily limited
to what the law provides.
 IRRs cannot extend the law or
expand its coverage. Power to
amend or repeal a statute belongs
to the legislature.
 Administrative agencies
implement the broad policies by
filling in only its details. The
regulations must be germane to
the objectives and purposes of the
law and must conform to the
standards prescribed by law.
 ITC, the DBM promulgated NCC 59 and
CCC 10. But instead of identifying some
of the addtl exclusions that Sec 12 of RA
6758 permit to make, the DBM made a
list of what allowances and benefits are
deemed integrated into the salary rates.
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PAGE 19 of 19
 NCC 59 identified the addtl
compensation deemed integrated8.
The list is consistent with Sec. 12. RA
6758 did not prohibit DBM from
identifying what fell into the class of
“all allowances”.
 With respect to what employees’
benefits fell outside the term apart
from what the law specified, the DBM
needed to promulgate rules and
regulations identifying those excluded
benefits.
 Inevitable conclusion: Until and unless
the DBM issued such rules and
regulations, the exclusions in items 1-
6 remain exclusive. Thus, not being an
enumerated exclusion COLA is
deemed already incorporated in the
standardized salary rates of govt
employees under the general rule of
integration.
 Natl Tobacco Administration v. CoA:
Items 1-6 all belong to a category of
8
(1) Cost of Living Allowance (COLA);
(2) Inflation connected allowance;
(3) Living Allowance;
(4) Emergency Allowance;
(5) Additional Compensation of Public Health Nurses assigned to public health nursing;
(6) Additional Compensation of Rural Health Physicians;
(7) Additional Compensation of Nurses in Malacañang Clinic;
(8) Nurses Allowance in the Air Transportation Office;
(9) Assignment Allowance of School Superintendents;
(10) Post allowance of Postal Service Office employees;
(11) Honoraria/allowances which are regularly given except the following:
a. those for teaching overload;
b. in lieu of overtime pay;
c. for employees on detail with task forces/ special projects;
d. researchers, experts and specialists who are acknowledged authorities in their field of
specialization;
e. lecturers and resource persons;
f. Municipal Treasurers deputized by the Bureau of Internal Revenue to collect and remit internal
revenue collections; and
g. Executive positions in State Universities and Colleges filled by designation from among their
faculty members. (12) Subsistence Allowance of employees except those authorized under EO
[Executive Order] 346 and uniformed personnel of the Armed Forces of the Philippines and
Integrated National Police;
(13) Laundry Allowance of employees except those hospital/sanitaria personnel who attend directly to patients
and who by the nature of their duties are required to wear uniforms, prison guards and uniformed personnel of
the Armed Forces of the Philippines and Integrated National Police; and
(14) Incentive allowance/fee/pay except those authorized under the General Appropriations Act and Section
33 of P.D. 807.

privilege called allowances which are
usually granted to officials and
employees of the govt to reimburse
expenses incurred in their official
functions. Item 7 is a catch-all proviso
for benefits in the nature of
allowances similar to those
enumerated.
 COLA is not intended to reimburse
expenses incurred in the performance
of their official duties. It is a benefit
intended to cover increases in the cost
of living. It should be integrated into
the standardized salary rates.
7. W/N the ICA may still be paid to officials and employees of
the insurance commission – NO.
o Petitioners of the insurance commission: Question
the disallowance of their ICA.
o COURT: The 2nd sentence of Sec. 12 RA 6758 was
interpreted by the court as referring to benefits in
the nature of financial assistance or a bonus. In
financial assistance, reimbursement is not
necessary, while in the case of allowance,
reimbursement is required.
o ITC, ICA falls under the general rule of
integration. The DBM identified it as an
allowance of addtl compensation
integrated into the standardized salary
rates. ICA is granted due to inflation and
upon determination that the current salary of
the insurance commission employees is
insufficient to address the problem.
 DBM determines whether there is
a need for ICA and the fund from
which it will be taken. The
insurance commission cannot
determined what allowances are
necessary and then grant them to
its officials and employees without
DBM’s approval.
 ICA does not qualify under the 2nd
sentence of Sec. 12—there was no
showing that the employees were
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PAGE 20 of 19
actually receiving it prior to RA 6758.
No evidence that the ICA were paid in
the subsequent yrs after 1981 and/or
1984. Withoyt a subsequent
authorization granting ICA to the
insurance commission officials and
employees, there can be no legal basis
for its continued grant from July 1,
1986.
8. W/N the GSIS may still pay the allowances and fringe
benefits to COA auditing personnel assigned to it – NO.
o Petitioners COA personnel: Question the
disallowance of their allowances and fringe benefits
based on the allowances given to GSIS personnel.
Since CCC 10 was ineffective, the disallowance
should be lifted.
o COURT: It is clear that the benefits were withheld
from them on the basis of Sec. 189 RA 6758.
o Sec. 18 was complete in itself and was
operative without the aid of any
enabling/supplementary legislation. The IRRs
were only for those provisions which require
further interpretation.
o Notwithstanding the initial non-publication of
CCC 10, the disallowance of petitioners’
allowances and fringe benefits as COA
auditing personnel assigned to the GSIS was
valid upon the effectivity of RA 6758.
o Tejada v. Domingo: COA personnel assigned
to auditing units of GOCCs or govt financial
institutions can receive only such salaries,
allowances or benefits paird directly by the
COA out of its appropriations and
contributions. COA is barred from billing
GOCCs and govt financial institutions for
9
Section 18. Additional Compensation of Commission on Audit Personnel and of Other Agencies.—In
order to preserve the independence and integrity of the Commission on Audit (COA), its officials and
employees are prohibited from receiving salaries, honoraria, bonuses, allowances or other emoluments from
any government entity, local government unit, and government-owned and controlled corporations, and
government financial institution, except those compensation paid directly by the COA out of its appropriations
and contributions. Government entities, including government-owned or controlled corporations including
financial institutions and local government units are hereby prohibited from assessing or billing other
government entities, government-owned or controlled corporations including financial institutions or local
government units for services rendered by its officials and employees as part of their regular functions for
purposes of paying additional compensation to said officials and employees.

services rendered by its personnel as part of
their regular audit functions for purposes of
paying addtl compensation.
o Villareña c. COA: COA officials are treated
differently from other natl govt officials. Their
primary function is to prevent irregular,
unnecessary, excessive, or extravagant
expenditures of govt funds. They must act
with independence and integrity, hence they
need to be insulated from unwarranted
influences. The disallowance is valid.
9. W/N the non-publication of NCC 69 in the Official Gazette
or newspaper nullified the integration of the COLA into the
standardized salary rates – NO.
o Petitioners: Since CCC 10 covering all GOCCs and
govt financial institutions was ineffective until its re-
issuance and publication, its counterpart NCC 5
covering offices of the natl govt, state univs and
colleges and local govt units should also be
ineffective until its re-issuance and publication.
COLA should not be deemed integrated into the
salary rates from 1989-2004.
o Respondents: The fact that NCC 59 was not
published should not be an obstacle to the
integration of COLA intro the salary rates. Budget
Circular 2001-03, reiterating NCC 59, should not be
held ineffective since it merely reaffirms the
mandate of Sec. 12 RA 6758.
o COURT: Publication is required as a condition
precedent to the effectivity of a law to inform
the public of its contents before their rights
and interest are affected. Administrative rules
and regulations must also be published if their
purpose is to enforce or implement existing law
pursuant also to a valid delegation.
o ITC, the integration of COLA in the salary
rates is not dependent on the publication
of CCC 10 and NCC 59. It is already
deemed included since it falls under “all
allowances”.
o The govt employees were informed by
their offices of their new position titles
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PAGE 21 of 19
and their salary grades when they were
furnished with the Notices of Position
Allocation and Salary Adjustment
(NPASA). It provided the breakdown of
the employee’s gross monthly salary and
the composition of his standardized pay
under RA 6758.
o Petitioners did not suffer any diminution in
pay as a consequence of the COLA
consolidation. COLA was never withheld
hence there is not back pay to speak of.
o Non-publication of CCC 10 and NCC 59 in the
Official Gazette or newspaper does not nullify
the integration of COLA into the standardized
salary rates upon the effectivity of RA 6758.
The RA’s validity is not dependent on its
implementing rules.
10. W/N the grant of COLA to military and police personnel to
the exclusion of other govt employees violates the equal
protection clause – NO.
o Petitioners: Continued grant of COLA to military and
police personnel under CCC 10 and NCC 59 violates
the equal protection clause.
o Respondents: Petitioners may seem to be
questioning the issuances, but in reality they are
attacking the very constitutionality of Sec. 1110 RA
6758 which allows the uniformed personnel to
continue receiving their COLA over and above their
basic pay.
o COURT: Constitutionality of a statute cannot be
attacked collaterally. It must be pleased directly.
More importantly, the Court is not persuaded that
the grant of COLA to the uniformed personnel runs
afoul to the equal protection clause.
10
Section 11. Military and Police Personnel.—The base pay of uniformed personnel of the Armed Forces of
the Philippines and the Integrated National Police shall be as prescribed in the salary schedule for these
personnel in R.A. 6638 and R.A. 6648. The longevity pay of these personnel shall be as prescribed under R.A.
6638, and R.A. 1134 as amended by R.A. 3725 and R.A. 6648: Provided, however, That the longevity pay of
uniformed personnel of the Integrated National Police shall include those services rendered as uniformed
members of the police, jail and fire departments of the local government units prior to the police integration.
All existing types of allowances authorized for uniformed personnel of the Armed Forces of the Philippines and
Integrated National Police such as cost of living allowance, longevity pay, quarters allowance, subsistence
allowance, clothing
allowance, hazard pay and other allowances shall continue to be authorized.

 st
Congress, thru 1 par. of Sec. 11, intended
the uniformed personnel to be continually
governed by their respective compensation
laws—military: RA 6638, police: RA 6975.
There are valid reasons to treat uniformed
personnel differently as the ones I charged of
the defense of the State and maintenance of
internal peace and order.
 They are expected to be stationed
virtually anywhere in the country—to
a variety of low, moderate, and high-
cost areas. Since their basic pay does
not vary based on location, the COLA
is intended to help them offset the
effects of living in higher cost areas.
Ruling: Petitions GR No. 172713 is GRANTED; Petitions GR Nos.
153266, 159007, 159029, 170084, 173119, 176477, 177990 and
A.M. 06-4-02-SB are DENIED.
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PAGE 22 of 19
Board of Trustees v. Velasco
Case Summary: Velasco and Molina were placed by the GSIS
Board of Trustees on preventive suspension due to grave
misconduct and deprived of their benefits, particularly the step
increment. Due to the GSIS Board’s denial of their request, the
respondents filed a case with the RTC filing for a petition of
prohibition and writ of preliminary injunction, contesting that
the Resolutions were void for not being filed with the ONAR and
that they had been . The RTC ruled in their favor, but the SC
held that internal regulations need not be filed in the ONAR,
only those of general or of permanent character. However, the
SC ruled that the respondents were entitled to the step
increment, and it should be delayed only for the number of days
they were suspended (similar to treatment of VLs and punitive
suspensions re: step increment).
G.R. 170463 - February 2, 2011
J. Carpio
Topic:
Doctrine: Only rules and regulations of general or of permanent
character are to be filed with the Office of the National
Administrative Register (ONAR). Internal regulations need not be
filed.
Petitioners: THE BOARD OF TRUSTEES OF THE GOVERNMENT
SERVICE INSURANCE SYSTEM and WINSTON F. GARCIA, in his
capacity as GSIS President and General Manager
Respondents: ALBERT M. VELASCO and MARIO I. MOLINA
Facts:
● May 23, 2002 - The GSIS Board of Trustees administratively
charged Velasco and Molina with grave misconduct and
placed them under preventive suspension for 90 days due
to alleged participation in a GSIS employee demonstration
calling for the ouster of its president and manager, Winston
F. Garcia.
● April 4, 2003 - Molina wrote to the GSIS Senior Vice
President Concepcion L. Madarang for implementation of
his step increment (the increase in salary from step to step
within the salary grade of a position).
● April 23, 2003 - The SVP denied his request citing GSIS
Board Resolution No. 372, which approved the new GSIS
salary structure, its implementing rules and regulations,

and the adoption of the supplemental guidelines on step
increment and promotion11.
● Respondents similarly asked to avail of the employee
privileges under GSIS Board Resolution No. 306
(Resolution No. 306) approving Christmas raffle benefits for
all GSIS officials and employees effective year 2002, but
this request was also denied due to the pending
administrative case.
● Aug. 27, 2003 - GSIS Board issued Board Resolution No.
197 (Resolution No. 197) approving the following policy
recommendations:
B. On the disqualification from promotion of an employee
with a pending administrative case
To adopt the policy that an employee with pending
administrative case shall be disqualified from the following
during the pendency of the case:
a) Promotion;
b) Step Increment;
c) Performance-Based Bonus; and
d) Other benefits and privileges.
● Nov. 14, 2003 - Molina and Velasco filed a petition for
prohibition with writ of preliminary injunction with the
RTC, claiming they were denied their benefits under
Resolution No. 306. They also sought to enjoin
implementation of Board Resolutions No. 372 and 197.
Respondents argued that they were deprived of their right
to presumption of innocence and due process (being
punished without hearing). Molina also argued that he had
already earned his right to the step increment prior to the
issuance of the aforementioned Board Resolutions. Finally,
they argued that the three resolutions were ineffective
because they were not registered with the University
of the Philippines (UP) Law Center pursuant to the
Revised Administrative Code of 1987.
● Nov. 23, 2003 - GSIS Board filed their comment with
motion to dismiss and opposition.
● Dec. 2, 2003 - Respondents filed opposition to the motion to
dismiss.
11
A. Step Increment
xxxx
III. Specific Rules:
x x xx
3. The step increment adjustment of an employee who is on preventive suspension shall be withheld until such
time that a decision on the case has been rendered. x x x x
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PAGE 23 of 19
● Dec. 5, 2003 - The Board filed its reply.
● Jan. 16, 2004 - The RTC denied petitioners’ motion to
dismiss and granted respondents’ prayer for a writ of
preliminary injunction.
● Feb. 26, 2004 - The Board’s MR was denied.
● Sept. 24, 2004 - Petition for prohibition was granted by
RTC. Board Resolutions No. 372 and 197 were declared
null and void.
● Oct. 7, 2005 - The Board’s MR was denied.
● On the RTC’s ruling:
o Jurisdiction - it can take cognizance of the petition
because the "territorial area" referred to in Section
4, Rule 65 of the Rules of Court "does not
necessarily delimit to a particular locality but rather
to the judicial region where the office or agency is
situated so that the prohibitive writ can be
enforced."
o On the merits - Depriving the respondents of their
benefits was unjustified since it would deprive them
of what is legally due them without due process of
law, inflict punishment on them without hearing, and
violate their right to be presumed innocent.
o Effectivity of the Resolutions - The assailed
resolutions were not registered with the UP Law
Center, per certification of the Office of the National
Administrative Register (ONAR).21 Since they were
not registered, the trial court declared that the
assailed resolutions have not become effective citing
Sections 3 and 4, Chapter 2, Book 7 of the Revised
Administrative Code of 198712.
Issues + Held: (1&2 are jurisdictional)
12
SEC. 3. Filing. - (1) Every agency shall file with the University of the Philippines Law Center three (3)
certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not
filed within three (3) months from that date shall not thereafter be the basis of any sanction against any party
of persons.
(2) The records officer of the agency, or his equivalent functionary, shall carry out the requirements of this
section under pain of disciplinary action.
(3) A permanent register of all rules shall be kept by the issuing agency and shall be open to the public
inspection.
SEC. 4. Effectivity. - In addition to other rule-making requirements provided by law not inconsistent with this
Book, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a
different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and
welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall
take appropriate measures to make emergency rules known to persons who may be affected by them.
 PAGE 24 of 19

1. W/N the trial court, and not the CSC has jurisdiction over respondent Velasco, plaintiff before the trial
the case--YES. court, is a resident of the City of Manila, the
○ Petitioners’ argument: Since the case involves petition could properly be filed in the City of Manila.
employee benefits, CSC should have jurisdiction ○ Additionally, BP 129, sec. 21(1) states that “Regional
over the case and the RTC should have dismissed it Trial Courts shall exercise original jurisdiction: (1)
for lack of jurisdiction. In the issuance of writs of certiorari, prohibition,
○ SC held that RTC had jurisdiction according to Secs. mandamus, quo warranto, habeas corpus and
2 and 4 of Rule 65 of the Rules of Court 13 (sec. 4 injunction, which may be enforced in any part of
relevant portion: if it related to acts or omissions their respective regions”. Since the National Capital
of a lower court or of a corporation, board, Judicial Region is comprised of the cities of Manila,
officer or person in the Regional Trial Court Quezon, Pasay, Caloocan, Malabon, Mandaluyong,
exercising jurisdiction over the territorial area Makati, Pasig, Marikina, Parañaque, Las Piñas,
as defined by the Supreme Court.). Muntinlupa, and Valenzuela and the municipalities
2. W/N a Special Civil Action for Prohibition against the GSIS of Navotas, San Juan, Pateros, and Taguig, a writ of
Board or its President and General Manager exercising prohibition issued by the regional trial court sitting
quasi-legislative and administrative functions in Pasay City in the City of Manila, is enforceable in Pasay City.
is outside the territorial jurisdiction of RTC-Manila, Branch 3. W/N internal rules and regulations need not require
19. --NO. publication with the Office of the National [Administrative]
○ Petitioners’ argument: Since the GSIS Board office is Register for their effectivity.--NO.
in Pasay, RTC Manila has no jurisdiction over the ○ Petitioners’ argument: No need to file Resolution
case. Nos. 372, 197, and 306 with the ONAR since they
○ SC: The petition for prohibition filed by respondents are merely internal regulations of GSIS personnel.
is a special civil action which may be filed in the ○ SC held that not all rules and regulations adopted by
Supreme Court, the Court of Appeals, the every government agency are to be filed with the UP
Sandiganbayan or the regional trial court, as the Law Center. Only those of general or of permanent
case may be. It is also a personal action because it character are to be filed. According to the UP Law
does not affect the title to, or possession of real Center’s guidelines for receiving and publication of
property, or interest therein. Thus, it may be rules and regulations, "interpretative regulations
commenced and tried where the plaintiff or any and those merely internal in nature, that is,
of the principal plaintiffs resides, or where the regulating only the personnel of the Administrative
defendant or any of the principal defendants agency and not the public," need not be filed with
resides, at the election of the plaintiff. Since the UP Law Center.
4. W/N a regulation, which disqualifies government employees
13
who have pending administrative cases from the grant of
Sec. 2. Petition for Prohibition. - When the proceedings of any tribunal, corporation, board, officer or step increment and Christmas raffle benefits is
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its
jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no unconstitutional.--YES
appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved ○ Petitioners’ argument: GSIS Board had the power to
thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered commanding the respondent to desist from further proceedings in the action or matter issue the assailed Resolutions to disqualify
specified therein, or otherwise granting such incidental reliefs as law and justice may require. respondents for step increment and from receiving
Sec. 4. Where petition filed. - The petition may be filed not later than sixty (60) days from notice of the
GSIS benefits from the time formal administrative
judgment, order or resolution sought to be assailed in the Supreme Court or, if it related to acts or omissions of charges were filed against them until the cases are
a lower court or of a corporation, board, officer or person in the Regional Trial Court exercising jurisdiction resolved.
over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether
or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its jurisdiction. If it ○ SC focused on the issue of step increment privileges.
involves the acts or omissions of a quasi-judicial agency, and unless otherwise provided by law or these Section 1(b), Rule II and Section 2, Rule III of Joint
Rules, the petition shall be filed in and cognizable only by the Court of Appeals.
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 PAGE 25 of 19

Circular No. 1, series of 1990 provide that the respondents’ case of preventive suspension should
employee must have satisfactorily served at be treated akin to suspension meted out as
least 3 continuous years14.” As there were no penalties, moreso because the suspension is merely
specific rules on the effects of preventive suspension preventive. The grant of step increment should
on step increment, the SC referred to CSC rules and only be delayed for the same number of days,
rulings on the effects of the penalty of suspension which must not exceed 90 days, that an official
and approved vacation leaves without pay on the or employee was serving the preventive
grant of step increment for guidance. The Court suspension.
affirmed (based on CSC rules on how VL affects ○
step increment15 and rulings on suspension as Ruling: WHEREFORE, we DENY the petition. We AFFIRM with MODIFICATION
the 24 September 2004 Decision and the 7 October 2005 Order of the Regional
penalties) that the computation of the three Trial Court of Manila, Branch 19 in Civil Case No. 03-108389. We DECLARE the
year period requirement will only be extended assailed provisions on step increment in GSIS Board Resolution Nos. 197 and 372
by the number of days that the employee was VOID. We MODIFY the 24 September 2004 Decision of the Regional Trial Court of
under suspension, i.e. the grant of step Manila, Branch 19 and rule that GSIS Board Resolution Nos. 197, 306 and 372
need not be filed with the University of the Philippines Law Center.
increment will only be delayed by the number
of days in suspension.
○ Preventive suspension pending investigation is
not a penalty. It is a measure intended to enable
the disciplining authority to investigate charges
against respondent by preventing the latter from
intimidating or in any way influencing witnesses
against him. If the investigation is not finished and a
decision is not rendered within that period, the
suspension will be lifted and the respondent will
automatically be reinstated16. Therefore, the

14
Rule II. Selection Criteria
Section 1. Step increments shall be granted to all deserving officials and employees x x x
(b) Length of Service – For those who have rendered continuous satisfactory service in a particular position for at least three (3)
years.
Rule III. Step Increments
xxxx
Section 2. Length of Service – A one (1) step increment shall be granted officials and employees for every three (3) years of
continuous satisfactory service in the position. Years of service in the position shall include the following:
(a) Those rendered before the position was reclassified to a position title with a lower or the same salary grade allocation; and
(b) Those rendered before the incumbent was transferred to another position within the same agency or to another agency
without a change in position title and salary grade allocation.

15
CSC Memorandum Circular No. 41, series of 1998, Section 60. Effect of vacation leave without pay on the grant of length of
service step increment. - For purposes of computing the length of service for the grant of step increment, approved vacation
leave without pay for an aggregate of fifteen (15) days shall not interrupt the continuity of the three-year service requirement for
the grant of step increment. However, if the total number of authorized vacation leave without pay included within the three-year
period exceeds fifteen (15) days, the grant of one-step increment will only be delayed for the same number of days that an
official or employee was absent without pay.

16
Chapter 7, Subtitle A, Title I, Book V of the Revised Administrative Code of 1987, SEC. 52. Lifting of Preventive Suspension.
Pending Administrative Investigation. - When the administrative case against the officer or employee under preventive
suspension is not finally decided by the disciplining authority within the period of ninety (90) days after the date of suspension of
the respondent who is not a presidential appointee, the respondent shall be automatically reinstated in the service: Provided,
That when the delay in the disposition of the case is due to the fault, negligence or petition of the respondent, the period of delay
shall not be counted in computing the period of suspension herein provided.
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