BLAQUERA V. ALCALA (CASTRO) Remedios Blaquera, Romeo Acosta, Dinah Agati, etc..
) are officials and
11 September 1998 | Purisima, J. | Delegation of power to tax
PETITIONER: (CONSOLIDATED PETITIONS) Remedios Blaquera et.al
RESPONDENTS: Hon. Angel Alcala, in his capacity as Secretary of DENR
and Hon. Carlito Aleta, in his capacity as Director of the Philippine Nuclear
Research Center
PETITIONER: Association of Dedicated Employees of the Philippine Tourism
Authority (ADEPT)
RESPONDENT: Commission on Audit
SUMMARY: Several petitions were filed before the Supreme Court assailing
the validity of the Administrative issuances of President Ramos pertaining to the
limitations and prohibitions on the grant of the productivity incentive bonus.
Furthermore, one of the consolidated petitions discussed the nature of a GOCC
performing governmental and proprietary functions. PTA in this case was
adjudged to be a GOCC performing governmental functions because of the
original charter it possesses and at the same time th applicability of the Civil
service commission laws in the said GOCC. After ruling on the nature of the
PTA. SC was confronted on the issue of the President’s power of control as to
the executive departments. The issue is whether or not the President’s
administrative orders encroached the power of the CSC and whethe or not it has
the power of the executive department and the Supreme Court ruled that the
President has indeed the power of control of the executive department and it did
not encroached on the power of the CSC. The President as the chief executive
and head of the government has the power provided by the constitution to have
the authority or control over the executive department.
DOCTRINE: The President is the head of the government. Governmental power
and authority are exercised and implemented through him. His power includes
the control of executive departments as provided under Sec. 17, Art. VII of the
Constitution.
Control means the power of an officer to alter or modify or set aside what a
subordinate officer had done in the performance of his duties and to substitute
the judgment of the former for that of the latter. The President can, by virtue of
his power of control, review, modify, alter or nullify any action or decision of his
subordinate in the executive departments, bureau or offices under him.
FACTS:
1. Herein several petitoners (as in sobrang dami nilang named sa petitions e.g.
employees of several government agencies who were paid incentive
benefits for the year 1992 pursuant to EO 292 also known as the
Administrative Code and the Omnibus rules implementing EO 292.
2. President Ramos then issued Administrative order no. 29 authorizing the
grant of productivity incentive benefits for the year 1992 in the maximum
amount of 1,000 pesos and reiterating the prohibition under Section 7 of the
Administrative order no. 268 enjoining the grant of productivity incentive
benefits without prior approval of the President
3. Section 4 of AO 29 directed all departments, offices and agencies which
authorized payment of CY 1992 Productivity Incentive Bonus in excess of
the amount authorized under Section 1 are directed to immediately cause
the return/refund of the excess within a period of six months to commence
fifteen (15) days after the issuance of this Order.
4. In compliance therewith, the heads of the departments or agencies of the
government concerned, who are the herein respondents, caused the
deduction from petitioners’ salaries or allowances of the amounts needed to
cover the alleged overpayments.
5. To prevent the respondent officials from making further deductions from
their salaries or allowances, the petitioner employees have come before the
Supreme Court to seek a relief
6. (DISCUSSION OF THE GOVERNMENTAL AND PROPRIETARY
FUNCTIONS OF A GOCC FACTS # 6 TO 18 ) In one of the petitions,
though the facts are different the petition poses a common issue with the
other consolidated cases. In the said petition, Association of Dedicated
Employees of the Philippine Tourism Authority (ADEPT), is an association
of employees of the Philippine Tourism Authority (PTA) who were granted
productivity incentive bonus for calendar year 1992 pursuant to Republic
Act No. 6971 (RA 6971), otherwise known as the Productivity Incentives
Act of 1990. Subject bonus was, however, disallowed by the Corporate
Auditor on the ground that it was prohibited under Administrative Order
No. 29. The disallowance of the bonus in question was finally brought on
appeal to the Commission on Audit (COA) which denied the appeal in its
Decision stating that insofar as the coverage of the law is concerned, it only
refers to business enterprise including GOCC’s performing proprietary
functions
7. The PTA is a GOCC created in pursuant of the policy of the state to
implement policies and program of the Department of Tourism and not for
proprietary function
8. Furthermore, although Supplemental Rules and Regulations implementing
R.A. 6971 was issued only on December 27, 1991, the law itself is clear
that it pertains to private business enterprises whose employees are covered
by the Labor Code of the Philippines
9. Secondly, Administrative Order No. 29 which is the basis for the grant of
the productivity incentive bonus/benefits on 1992 also expressly provides
prohibiting payments of similar benefits in future years unless duly
 authorized by the President.
10. Thirdly, the disallowance of the Auditor, PTA has already been resolved
when this Commission circularized thru COA Memorandum
11. Lastly, considering the title of RA 6971, i.e. An Act to encourage
productivity and maintain industrial peace by providing incentives to both
labor and capital, and its implementing rules and regulations prepared by
the Department of Labor and Employment and the Department of Finance,
COA concludes that said law/regulation pertains to agencies in the private
sector whose employees are covered by the Labor Code.
12. Because of the denial of PTA’S appeal they also seek relief before the
Supreme Court and they contend that they are a GOCC performing
proprietary function and therefore the Labor and employment secretary and
finance secretary exceeded their authority in issuing the supplemental rules
in RA 6971
13. According to the petitioner, PTA as created by PD 189 as amended by PD
564, PTA performs both governmental and proprietary functions
a. Governmental functions such as: implement the policies of
Department of Tourism, assist private enterprise, operate and
maintain tourist facilities, and coordinate all tourism project plans
and operations
b. Proprietary functions such as: develop tourist zones and assure
land availiability for private investors
14. The aforecited powers and functions of PTA are predominantly
governmental and principally geared towards development and promotion
of tourism, but it is irrefutable that PTA also performs proprietary functions
as shown in its charter.
15. To finally resolve on whether PTA shall be under the ambit of RA 6971 the
court ascertained the legislative intent and ruled that the GOCC mentioned
in the law are those GOCC’s created under the general corporation law,
with the right to bargain and under the labor code.
16. The legislative intent to place only GOCC’s performing proprietary
function is gleaned towards other provisions of law which envisions
collective bargaining, and other labor to management related provisions
17. In this case the rule on statutory construction was applied on interpreting as
a whole the law pertaining to the incentive benefits of those GOCC’s within
the coverage of the law and it goes to show that PTA is not under the ambit
of the said law because of the following:
a. Created by a special charter and not under the corporation law
b. Not governed by the labor code instead the civil service law
18. Hence, to ascertain whether a GOCC performs a governmental or
proprietary function it must be taken into consideration that if the purpose is
to obtain special corporate benefits or earn pecuniary profit, the function is
proprietary. While when it is in the interest of health, safety, and for
advancement of public good and welfare it is governmental.
ISSUES:
● Whether or not AO 29 and AO 268 issued by President Ramos
were issued in the valid exercise of presidential control over the
executive departments -Yes, it is a valid exercise of Presidential
control as the head of the executive department
● Whether or not A0 29 and AO 268 violate EO 292 which is a
law -No, because AO 29 and AO 268 were issued in the light of
the power of control of the President and it does not encroach the
power of the Civil Service Commission
RULING:
RATION:
● The President is the head of the government. Governmental power
and authority are exercised and implemented through him. His
power includes the control of executive departments as provided
under Sec. 17, Art. VII of the Constitution.
● Control means the power of an officer to alter or modify or set
aside what a subordinate officer had done in the performance
of his duties and to substitute the judgment of the former for
that of the latter. The President can, by virtue of his power of
control, review, modify, alter or nullify any action or decision of
his subordinate in the executive departments, bureau or offices
under him.
● When the President issued AO 29 limiting the amount of incentive
benefits, enjoining heads of government agencies from granting
incentive benefits without approval from him and directing the
refund of the excess over the prescribed amount, the President was
just exercising his power of control over executive departments.
● The President issued subject AOs to regulate the grant of
productivity incentive benefits and to prevent discontent,
dissatisfaction and demoralization among government personnel
by committing limited resources of government for the equal
payment of incentives and awards. The President was only
exercising his power of control by modifying the acts of the heads
of the government agencies who granted incentive benefits to their
employees without appropriate clearance from the Office of the
President, thereby resulting in the uneven distribution of
government resources. The President’s duty to execute the law is
of constitutional origin. So, too, is his control of executive
departments.
● Neither can it be said that the President encroached upon the
authority of the commission on Civil Service to grant the benefits
because AO 29 and AO 268 did not revoke the privilege of
employees to receive benefits it merely regulated the grant and
amount thereof.