SPECIAL SECOND DIVISION

April 26, 2017

G.R. No. 217872

ALLIANCE FOR THE FAMILY FOUNDATION, PHILIPPINES, INC. (ALFI) and ATTY. MARIA
CONCEPCION S. NOCHE, in her own behalf and as President of ALFI, JOSE S. SANDEJAS,
ROSIE B. LUISTRO, ELENITA S.A. SANDEJAS, EMILY R. LAWS, EILEEN Z. ARANETA, SALV
ACION C. MONTEIRO, MARIETTA C. GORREZ, ROLANDO M. BAUTISTA, RUBEN T. UMALI,
and MILDRED C. CASTOR , Petitioners
vs.
HON. JANETTE L. GARIN, Secretary-Designate of the Department of Health; NICOLAS
B.LUTERO III, Assistant Secretary of Health, Officer-in-Charge, Food and Drug
Administration; and MARIA LOURDES C. SANTIAGO, Officer in-Charge, Center for Drug
Regulation and Research, Respondents

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

G.R. No. 221866

MARIA CONCEPCION S. NOCHE, in her own behalf and as counsel of Petitioners, JOSE S.
SANDEJAS, ROSIE B. LUISTRO, ELENITA S.A. SANDEJAS, EMILY R. LAWS EILEEN Z.
ARANETA, SALVACION C. MONTEIRO MARIETTA C. GORREZ, ROLANDO M. BAUTISTA,
RUBEN T. UMALI, and MILDRED C. CASTOR, Petitioners
vs.
HON. JANETTE L. GARIN, Secretary-Designate of the Department of Health; NICOLAS B.
LUTERO III, Assistant Secretary of Health; NICOLAS B. LUTERO III, Assistant Secretary of
Health, Officer-in-Charge, Food and Drug Administration; and MARIA LOURDES C.
SANTIAGO, Officer-in-Charge, Center for Drug Regulation and Research, Respondents.

RESOLUTION

MENDOZA, J.:

Subject of this resolution is the Omnibus Motion  filed by the respondents, thru the Office of the
1

Solicitor General (OSG), seeking partial reconsideration of the August 24, 2016 Decision
(Decision),  where the Court resolved the: [1] Petition for Certiorari, Prohibition, Mandamus with
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Prayer for Issuance of a Temporary Restraining Order and/or Writ of Preliminary Prohibitory and
Mandatory Injunction (G.R. No. 217872); and the [2] Petition for Contempt of Court (G.R. No.
221866), in the following manner:
WHEREFORE, the case docketed as G.R No. 217872 is hereby REMANDED to the Food and
Drugs Administration which is hereby ordered to observe the basic requirements of due process by
conducting a hearing, and allowing the petitioners to be heard, on the re-certified, procured and
administered contraceptive drugs and devices, including Implanon and lmplanon NXT, and to
determine whether they are abortifacients or non-abortifacients.

Pursuant to the expanded jurisdiction of this Court and its power to issue rules for the protection and
enforcement of constitutional rights, the Court hereby:

1. DIRECTS the Food and Drug Administration to formulate the rules of procedure in the
screening, evaluation and approval of all contraceptive drugs and devices that will be used
under Republic Act No. 10354. The rules of procedure shall contain the following minimum
requirements of due process: (a) publication, notice and hearing, (b) interested parties shall
be allowed to intervene, (c) the standard laid down in the Constitution, as adopted under
Republic Act No. 10354, as to what constitutes allowable contraceptives shall be strictly
followed, that is, those which do not harm or destroy the life of the unborn from
conception/fertilization, (d) in weighing the evidence, all reasonable doubts shall be resolved
in favor of the protection and preservation of the right to life of the unborn from
conception/fertilization, and (e) the other requirements of administrative due process, as
summarized in Ang Tibay v. CIR, shall be complied with.

2. DIRECTS the Department of Health in coordination with other concerned agencies to

formulate the rules and regulations or guidelines which will govern the purchase and
distribution/ dispensation of the products or supplies under Section 9 of Republic Act No.
10354 covered by the certification from the Food and Drug Administration that said product
and supply is made available on the condition that it will not be used as an abortifacient
subject to the following minimum due process requirements: (a) publication, notice and
hearing, and (b) interested parties shall be allowed to intervene. The rules and regulations or
guidelines shall provide sufficient detail as to the manner by which said product and supply
shall be strictly regulated in order that they will not be used as an abortifacient and in order
to sufficiently safeguard the right to life of the unborn.

3. DIRECTS the Department of Health to generate the complete and correct list of the
government's reproductive health programs and services under Republic Act No. 10354
which will serve as the template for the complete and correct information standard and,
hence, the duty to inform under Section 23(a)(l) of Republic Act No. 10354. The Department
of Health is DIRECTED to distribute copies of this template to all health care service
providers covered by Republic Act No. 10354.

The respondents are hereby also ordered to amend the Implementing Rules and Regulations to
conform to the rulings and guidelines in G.R. No. 204819 and related cases.

The above foregoing directives notwithstanding, within 30 days from receipt of this disposition, the
Food and Drugs Administration should commence to conduct the necessary hearing guided by the
cardinal rights of the parties laid down in CIR v. Ang Tibay.

Pending the resolution of the controversy, the motion to lift the Temporary Restraining Order is
DENIED.

With respect to the contempt petition, docketed as G.R No. 221866, it is hereby DENIED for lack of
concrete basis.
SO ORDERED. 3

Arguments of the Respondents

Part 1: Due Process need not be

complied with as the questioned
acts of the Food and Drug
Administration (FDA) were in
the exercise of its Regulatory Powers

In the subject Omnibus Motion, the respondents argued that their actions should be sustained, even
if the petitioners were not afforded notice and hearing, because the contested acts of registering, re-
certifying, procuring, and administering contraceptive drugs and devices were all done in the
exercise of its regulatory power.  They contended that considering that the issuance of the certificate
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of product registration (CPR) by the FDA under Section 7.04, Rule  of the Implementing Rules and
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Regulations of Republic Act (R.A.) No. 10354 (RH-IRR) did not involve the adjudication of the
parties' opposing rights and liabilities through an adversarial proceeding, the due process
requirements of notice and hearing need not be complied with. 6

Stated differently, the respondents assert that as long as the act of the FDA is exercised pursuant to
its regulatory power, it need not comply with the due process requirements of notice and hearing.

Corollary to this, the respondents wanted the Court to consider that the FDA had delineated its
functions among different persons and bodies in its organization. Thus, they asked the Court to
make a distinction between the "quasi-judicial powers" exercised by the Director-General of the
FDA under Section 2(b)  of Article 3, Book I of the Implementing Rules and Regulations (IRR) of
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R.A. No. 9711,  and the "regulatory/administrative powers" exercised by the FDA under Section

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2(c )(1)   of the same. For the respondents, the distinction given in the above-cited provisions was all
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but proof that the issuance of CPR did not require notice and hearing.

After detailing the process by which the FDA's Center for Drug Regulation and
Research (CDRR) examined and tested the contraceptives for non-abortifacience,   the respondents
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stressed that the Decision wreaked havoc on the organizational structure of the FDA, whose myriad
of functions had been carefully delineated in the IRR of R.A. No. 9711.   The respondents, thus,
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prayed for the lifting of the Temporary Restraining Order (TR0).  12

Part 2: The requirements of due

process need not be complied with as
the elements of procedural due
process laid down in Ang Tibay v.
CIR are not applicable

The respondents further claimed in their omnibus motion that the requirements of due process need
not be complied with because the standards of procedural due process laid down in Ang Tibay v.
CIR   were inapplicable considering that: a) substantial evidence could not be used as a measure in
13

determining whether a contraceptive drug or device was abortifacient;   b) the courts had neither
14

jurisdiction nor competence to review the findings of the FDA on the non-abortifacient character of
contraceptive drugs or devices;   c) the FDA was not bound by the rules of admissibility and
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presentation of evidence under the Rules of Court;   and d) the findings of the FDA could not be
16

subject of the rule on res judicata and stare-decisis.  17

The respondents then insisted that Implanon and Implanon NXT were not abortifacients and
lamented that the continued injunction of the Court had hampered the efforts of the FDA to provide
for the reproductive health needs of Filipino women. For the respondents, to require them to afford
the parties like the petitioners an opportunity to question their findings would cause inordinate delay
in the distribution of the subject contraceptive drugs and devices which would have a dire impact on
the effective implementation of the RH Law.

The Court's Ruling

After an assiduous assessment of the arguments of the parties, the Court denies the Omnibus
Motion, but deems that a clarification on some points is in order.

Judicial Review

The powers of an administrative body are classified into two fundamental powers: quasi-
legislative and quasi-judicial. Quasi-legislative power, otherwise known as the power of
subordinate legislation, has been defined as the authority delegated by the lawmaking body to the
administrative body to adopt rules and regulations intended to carry out the provisions of law and
implement legislative policy.   "[A] legislative rule is in the nature of subordinate legislation, designed
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to implement a primary legislation by providing the details thereof."   The exercise by the
19

administrative body of its quasi-legislative power through the promulgation of regulations of general
application does not, as a rule, require notice and hearing. The only exception being where the
Legislature itself requires it and mandates that the regulation shall be based on certain facts as
determined at an appropriate investigation. 20

Quasi-judicial power, on the other hand, is known as the power of the administrative agency to
determine questions of fact to which the legislative policy is to apply, in accordance with the
standards laid down by the law itself.  As it involves the exercise of discretion in determining the
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rights and liabilities of the parties, the proper exercise of quasi-judicial power requires the
concurrence of two elements: one, jurisdiction which must be acquired by the administrative body
and two, the observance of the requirements of due process, that is, the right to notice and
hearing. 22

On the argument that the certification proceedings were conducted by the FDA in the exercise of its
"regulatory powers" and, therefore, beyond judicial review, the Court holds that it has the power to
review all acts and decisions where there is a commission of grave abuse of discretion. No less than
the Constitution decrees that the Court must exercise its duty to ensure that no grave abuse of
discretion amounting to lack or excess of jurisdiction is committed by any branch or instrumentality of
the Government. Such is committed when there is a violation of the constitutional mandate that "no
person is deprived of life, liberty, and property without due process of law." The Court's power
cannot be curtailed by the FDA's invocation of its regulatory power.

In so arguing, the respondents cited Atty. Carlo L. Cruz in his book, Philippine Administrative Law.

Lest there be any inaccuracy, the relevant portions of the book cited by the respondents are hereby
quoted as follows:

xxx.

B. The Quasi-Judicial Power

xxx

2. Determinative Powers

To better enable the administrative body to exercise its quasi judicial authority, it is also vested
with what is known as determinative powers and functions.

Professor Freund classifies them generally into the enabling powers and the directing powers. The
latter includes the dispensing, the examining, and the summary powers.

The enabling vowers  are those that permit the doing of an act which the law undertakes
to regulate  and which would be unlawful with government approval. The most common
example is the issuance of licenses to engage in a particular business or occupation, like the
operation of a liquor store or restaurant. x x x.   [Emphases and underscoring supplied]
23

From the above, two things are apparent: one, the "enabling powers" cover "regulatory powers" as
defined by the respondents; and two, they refer to a subcategory of a quasi-judicial power which, as
explained in the Decision, requires the compliance with the twin requirements of notice and hearing.
Nowhere from the above-quoted texts can it be inferred that the exercise of "regulatory power"
places an administrative agency beyond the reach of judicial review. When there is grave abuse of
discretion, such as denying a party of his constitutional right to due process, the Court can come in
and exercise its power of judicial review. It can review the challenged acts, whether exercised by the
FDA in its ministerial, quasi-judicial or regulatory power. In the past, the Court exercised its power of
judicial review over acts and decisions of agencies exercising their regulatory powers, such as
DPWH,   TRB,   NEA,   and the SEC,  among others. In Diocese of Bacolod v. Commission on
24 25 26 27

Elections,  the Court properly exercised its power of judicial review over a Comelec resolution issued
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in the exercise of its regulatory power.

Clearly, the argument of the FDA is flawed.

Petitioners were Denied their

Right to Due Process

Due process of law has two aspects: substantive and procedural. In order that a particular act may
not be impugned as violative of the due process clause, there must be compliance with both the
substantive and the procedural requirements thereof.   Substantive due process refers to the
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intrinsic validity of a law that interferes with the rights of a person to his property.  Procedural due
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process, on the other hand, means compliance with the procedures or steps, even periods,
prescribed by the statute, in conformity with the standard of fair play and without arbitrariness on the
part of those who are called upon to administer it. 31

The undisputed fact is that the petitioners were deprived of their constitutional right to due process of
law.

As expounded by the Court, what it found to be primarily deplorable is the failure of the respondents
to act upon, much less address, the various oppositions filed by the petitioners against the product
registration, recertification, procurement, and distribution of the questioned contraceptive drugs and
devices. Instead of addressing the petitioners' assertion that the questioned contraceptive drugs and
devices fell within the definition of an "abortifacient" under Section 4(a) of the RH Law because of
their "secondary mechanism of action which induces abortion or destruction of the fetus inside the
mother's womb or the prevention of the fertilized ovum to reach and be implanted in the mother's
womb,"32 the respondents chose to ignore them and proceeded with the registration, recertification,
procurement, and distribution of several contraceptive drugs and devices.

A cursory reading of the subject Omnibus Motion shows that the respondents proffer no cogent
explanation as to why they did not act on the petitioners' opposition. As stated by the Court in the
Decision, rather than provide concrete action to meet the petitioners' opposition, the respondents
simply relied on their challenge questioning the propriety of the subject petition on technical and
procedural grounds.   The Court, thus, finds the subject motion to be simply a rehash of the earlier
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arguments presented before, with the respondents still harping on the peculiarity of the FDA's
functions to exempt it from compliance with the constitutional mandate that "no person shall be
deprived oflife, liberty and property without due process of law."

The law and the rules demand

compliance with due process
requirements

A reading of the various provisions, cited by the respondents in support of their assertion that due
process need not be complied with in the approval of contraceptive drugs or devices, all the more
reinforces the Court's conclusion that the FDA did fail to afford the petitioners a genuine opportunity
to be heard.

As outlined by the respondents themselves, the steps by which the FDA approves contraceptive
drugs or devices, demand compliance with the requirements of due process viz:

Step 1. Identify contraceptive products in the database. Create another database containing the
following details of contraceptive products: generic name, dosage strength and form, brand name (if
any), registration number, manufacturer, MAH, and the period of validity of the CPR.

Step 2. Identify contraceptive products which are classified as essential medicines in the Philippine
Drug Formulary.

Step 3. Retrieve the contraceptive product's file and the CPR duplicate of all registered contraceptive
products. Create a database of the contraceptive product's history, including its initial, renewal,
amendment, and/or variation applications.

Step 4. Conduct a preliminary review of the following:

a. general physiology of female reproductive system, including hormones involved, female

reproductive cycle, and conditions of the female reproductive system during pregnancy.

b. classification of hormonal contraceptives;

c. regulatory status of the products in benchmark countries; and

d. mechanism of action of hormonal contraceptives based on reputable journals, meta-

analyses, systemic reviews, evaluation of regulatory authorities in other countries, textbooks,
among others.

Step 5. Issue a notice to all concerned MAHs, requiring them to submit scientific evidence
that their product is non-abortifacient, as defined in the RH Law and Imbong.
Step 6. Post a list of contraceptive products which were applied for re-certification for public
comments in the FDA website.

Step 7. Evaluate contraceptive products for re-certification.

A. Part I (Review of Chemistry, Manufacture and Controls)

1. Unit Dose and Finished Product Formulation

2. Technical Finished Product Specifications

3. Certificate of Analysis

B. Part II (Evaluation of Whether the Contraceptive Product is Abortifacient)

1. Evaluation of the scientific evidence submitted by the applicant and the public.

2. Review and evaluation of extraneous evidence, e.g., scientific journals, meta-analyses,

etc.

Step 8. Assess and review the documentary requirements submitted by the applicant. Technical
reviewers considered scientific evidence such as meta-analyses, systemic reviews, national and
clinical practice guidelines and recommendations of international medical organizations submitted by
the companies, organizations and individuals, to be part of the review.  [Emphases and Underlining
34

supplied]

The Court notes that the above-outlined procedure is deficient insofar as it only allows public
comments to cases of re-certification. It fails to allow the public to comment in cases where a
reproductive drug or device is being subject to the certification process for the first time. This
is clearly in contravention of the mandate of the Court in lmbong that the IRR should be
amended to conform to it.

More importantly, the Court notes that Step 5 requires the FDA to issue a notice to all concerned
MAHs and require them to submit scientific evidence that their product is non-abortifacient; and that
Step 6 requires the posting of the list of contraceptive products which were applied for re-
certification for public comments in the FDA website.

If an opposition or adverse comment is filed on the ground that the drug or devise has
abortifacient features or violative of the RH Law, based on the pronouncements of the Court in Im
bong or any other law or rule, the FDA is duty-bound to take into account and consider the basis of
the opposition.

To conclude that product registration, recertification, procurement, and distribution of the questioned
contraceptive drugs and devices by the FDA in the exercise of its regulatory power need not comply
with the requirements of due process would render the issuance of notices to concerned MAHs and
the posting of a list of contraceptives for public comment a meaningless exercise. Concerned MAHs
and the public in general will be deprived of any significant participation if what they will submit will
not be considered.

Section 7.04, Rule 7 of the IRR of the RH Law (RH-IRR),  relied upon by the respondents in support
35

of their claims, expressly allows the consideration of conflicting evidence, such as that supplied

by the petitioners in support of their opposition to the approval of certain contraceptive drugs and
devices. In fact, the said provision mandates that the FDA utilize the "best evidence available" to
ensure that no bortifacient is approved as a family planning drug or device. It bears mentioning that
the same provision even allows an independent evidence review group (ERG) to ensure that
evidence for or against the certification of a contraceptive drug or device is duly considered.

Structure of the FDA

As earlier mentioned, the respondents argue that the Decision "wreaked havoc on the organizational
structure of the FDA, whose myriad of functions have been carefully delineated under R.A. No. 9711
IRR."  Citing Section 7.04, Rule 7 of the RH-IRR, the FDA insists that the function it exercises in
36

certifying family planning supplies is in the exercise of its regulatory power, which cannot be the
subject of judicial review, and that it is the Director-General of the FDA who exercises quasi-
judicial powers, citing Section 2(b) of Article 3, Book I of the RH-IRR.37

The FDA wants the Court to consider that, as a body, it has a distinct and separate personality from
the Director-General, who exercises quasi-judicial power. The Court cannot accommodate the
position of the respondents. Section 6(a) of R.A. No. 3720, as amended by Section 7 of R.A. No.
9711,  provides that "(a) The FDA shall be headed by a director-general with the rank of
38

undersecretary, xxx." How can the head be separated from the body?

For the record, Section 4 of R.A. No. 3720, as amended by Section 5 of R.A. No. 9711, also
recognizes compliance with the requirements of due process, although the proceedings are not
adversarial. Thus:

Section 5. Section 4 of Republic Act No. 3720, as amended, is hereby further amended to read as
follows:

"SEC. 4. To carry out the provisions of this Act, there is hereby created an office to be called the
Food and Drug Administration (FDA) in the Department of Health (DOH). Said Administration shall
be under the Office of the Secretary and shall have the following functions, powers and duties:

"(a) To administer the effective implementation of this Act and of the rules and regulations issued
pursuant to the same;

"(b) To assume primary jurisdiction in the collection of samples of health products;

"(c) To analyze and inspect health products in connection with the implementation of this Act;

"(d) To establish analytical data to serve as basis for the preparation of health products standards,
and to recommend standards of identity, purity, safety, efficacy, quality and fill of container;

"(e) To issue certificates of compliance with technical requirements to serve as basis for the
issuance of appropriate authorization and spot-check for compliance with regulations regarding
operation of manufacturers, importers, exporters, distributors, wholesalers, drug outlets, and other
establishments and facilities of health products, as determined by the FDA;

"xxx

"(h) To conduct appropriate tests on all applicable health products prior to the issuance of
appropriate authorizations to ensure safety, efficacy, purity, and quality;
"(i) To require all manufacturers, traders, distributors, importers, exporters, wholesalers, retailers,
consumers, and non-consumer users of health products to report to the FDA any incident that
reasonably indicates that said product has caused or contributed to the death, serious illness or
serious injury to a consumer, a patient, or any person;

"G) To issue cease and desist orders motu propio or upon verified com plaint for health products,
whether or not registered with the FDA Provided, That for registered health products, the cease and
desist order is valid for thirty (30) days and may be extended for sixty (60) days only after due
process has been observed;

"(k) After due process, to order the ban, recall, and/or withdrawal of any health product found to
have caused the death, serious illness or serious injury to a consumer or patient, or is found to be
imminently injurious, unsafe, dangerous, or grossly deceptive, and to require all concerned to
implement the risk management plan which is a requirement for the issuance of the appropriate
authorization;

"(l) To strengthen the post market surveillance system in monitoring health products as defined in
this Act and incidents of adverse events involving such products;

"(m) To develop and issue standards and appropriate authorizations that would cover
establishments, facilities and health products;

"(n) To conduct, supervise, monitor and audit research studies on health and safety issues of health
products undertaken by entities duly approved by the FDA;

"(o) To prescribe standards, guidelines, and regulations with respect to information, advertisements
and other marketing instruments and promotion, sponsorship, and other marketing activities about
the health products as covered in this Act;

"(p) To maintain bonded warehouses and/or establish the same, whenever necessary or
appropriate, as determined by the director-general for confiscated goods in strategic areas of the
country especially at major ports of entry; and

"(q) To exercise such other powers and perform such other functions as may be necessary to carry
out its duties and responsibilities under this Act. [Emphases supplied]

The Cardinal Rights of Parties in

Administrative Proceedings as
laid down in Ang Tibay v. CIR

In Ang Tibay v. CJR,  the Court laid down the cardinal rights of parties in administrative proceedings,
39

as follows:

1) The right to a hearing, which includes the right to present one's case and submit evidence in
support thereof;

2) The tribunal must consider the evidence presented;

3) The decision must have something to support itself;

4) The evidence must be substantial;

5) The decision must be rendered on the evidence presented at the hearing, or at least contained in
the record and disclosed to the parties affected;

6) The tribunal or body or any of its judges must act on its or his own independent consideration of
the law and facts of the controversy and not simply accept the views of a subordinate in arriving at a
decision; and

7) The board or body should, in all controversial questions, render its decision in such a manner that
the parties to the proceeding can know the various issues involved, and the reason for the decision
rendered.  40

In the Decision, the Court found that the FDA certified, procured and administered contraceptive
drugs and devices, without the observance of the basic tenets of due process, that is, without notice
and without public hearing. It appeared that, other than the notice inviting stakeholders to apply for
certification/recertification of their reproductive health products, there was no showing that the
respondents considered the opposition of the petitioners. Thus, the Court wrote:

Rather than provide concrete evidence to meet the petitioners' opposition, the respondents simply
relied on their challenge questioning the propriety of the subject petition on technical and procedural
grounds. The Court notes that even the letters submitted by the petitioners to the FDA and the DOH
seeking information on the actions taken by the agencies regarding their opposition were left
unanswered as if they did not exist at all. The mere fact that the RH Law was declared as not
unconstitutional does not permit the respondents to run roughshod over the constitutional rights,
substantive and procedural, of the petitioners.

Indeed, although the law tasks the FDA as the primary agency to determine whether a contraceptive
drug or certain device has no abortifacient effects, its findings and conclusion should be allowed to
be questioned and those who oppose the same must be given a genuine opportunity to be heard in
their stance. After all, under Section 4(k) of R.A. No. 3720, as amended by R.A. No. 9711, the FDA
is mandated to order the ban, recall and/ or withdrawal of any health product found to have caused
death, serious illness or serious injury to a consumer or patient, or found to be imminently injurious,
unsafe, dangerous, or grossly deceptive, after due process.

Due to the failure of the respondents to observe and comply with the basic requirements of due
process, the Court is of the view that the certifications/re-certifications and the distribution of the
questioned contraceptive drugs by the respondents should be struck down as violative of the
constitutional right to due process.

Verily, it is a cardinal precept that where there is a violation of basic constitutional rights, the courts
are ousted from their jurisdiction. The violation of a party's right to due process raises a serious
jurisdictional issue which cannot be glossed over or disregarded at will. Where the denial of the
fundamental right to due process is apparent, a decision rendered in disregard of that right is void for
lack of jurisdiction. This rule is equally true in quasi-judicial and administrative proceedings, for the
constitutional guarantee that no man shall be deprived of life, liberty, or property without due process
is unqualified by the type of proceedings (whether judicial or administrative) where he stands to lose
the same. 41

The Court stands by that finding and, accordingly, reiterates its order of remand of the case to the
FDA.

Procedure in the FDA; No Trial-Type Hearing

The Court is of the view that the FDA need not conduct a trial-type hearing. Indeed, due process
does not require the conduct of a trial-type hearing to satisfy its requirements. All that the
Constitution requires is that the FDA afford the people their right to due process of law and decide
on the applications submitted by MAHs after affording the oppositors like the petitioners a genuine
opportunity to present their science-based evidence. As earlier pointed out, this the FDA failed to do.
It simply ignored the opposition of the petitioners. In the case of Perez, et al. v. Philippine Telegraph
and Telephone Company, et al.,   it was stated that:
42

A formal trial-type hearing is not even essential to due process. It is enough that the parties are
given a fair and reasonable opportunity to explain their respective sides of the controversy and to
present supporting evidence on which a fair decision can be based.

In the fairly recent case of Vivo v. Pagcor,  the Court explained:

43

The observance of fairness in the conduct of any investigation is at the very heart of procedural due
process. The essence of due process is to be heard, and, as applied to administrative proceedings,
this means a fair and reasonable opportunity to explain one's side, or an opportunity to seek a
reconsideration of the action or ruling complained of. Administrative due process cannot be fully
equated with due process in its strict judicial sense, for in the former a formal or trial-type
hearing is not always necessary, and technical rules of procedure are not strictly
applied. Ledesma v. Court of Appeals elaborates on the well-established meaning of due process in
administrative proceedings in this wise:

x x x Due process, as a constitutional precept, does not always and in all situations require a trial-
type proceeding. Due process is satisfied when a person is notified of the charge against him and
given an opportunity to explain or defend himself. In administrative proceedings, the filing of charges
and giving reasonable opportunity for the person so charged to answer the accusations against him
constitute the minimum requirements of due process. The essence of due process is simply to be
heard, or as applied to administrative proceedings, an opportunity to explain one's side, or an
opportunity to seek a reconsideration of the action or ruling complained of. [Emphasis supplied;
citations omitted]

Best Evidence Available

Section 5, Rule 133 of the Rules of Court provides:

Section 5. In all cases filed before administrative or quasi-judicialbodies, a fact may be deemed

established if it is supported by substantialevidence, or the amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.

As applied to certification proceedings at the FDA, "substantial evidence" refers to the best

scientific evidence available,  "including but not limited to: meta analyses, systematic reviews,
44

national clinical practice guidelines where available, and recommendations of international medical
organizations," needed to support a conclusion whether a contraceptive drug or device is an
abortifacient or not. The FDA need not be bound or limited by the evidence adduced by the parties,
but it can conduct its own search for related scientific data. It can also consult other technical
scientific experts known in their fields. It is also not bound by the principle of stare decisis or res
judicata, but may update itself and cancel certifications motu proprio when new contrary scientific
findings become available or there arise manifest risks which have not been earlier predicted.

On the Competence of the Court

to review the Findings of the FDA
The fact that any appeal to the courts will involve scientific matters will neither place the actions of
the respondents beyond the need to comply with the requirements of Ang Tibay nor place the
actions of the FDA in certification proceedings beyond judicial review.

It should be pointed out that nowhere in Batas Pambansa Blg. 129, as amended, are the courts
ousted of their jurisdiction whenever the issues involve questions of scientific nature. A court is not
considered incompetent either in reviewing the findings of the FDA simply because it will be
weighing the scientific evidence presented by both the FDA and its oppositors in determining
whether the contraceptive drug or device has complied with the requirements of the law.

Although the FDA is not strictly bound by the technical rules on evidence, as stated in the Rules of
Court, or it cannot be bound by the principle of stare decisis or res judicata, it is not excused from
complying with the requirements of due process. To reiterate for emphasis, due process does not
require that the FDA conduct trial-type hearing to satisfy its requirements. All that the Constitution
requires is that the FDA afford the people their right to due process of law and decide on the
applications submitted by the MAHs after affording the oppositors, like the petitioners, a genuine
opportunity to present their sciencebased evidence.

The Appellate Procedure;

Appeal to the Office of the President

Incidentally, Section 32 of R.A. No. 3720 and Section 9 of Executive Order (E.O.) No. 247 provide
that any decision by the FDA would then be appealable to the Secretary of Health, whose decision,
in tum, may be appealed to the Office of the President (OP). Thus:

Sec. 32. The orders, rulings or decisions of the FDA shall be appealable to the Secretary of
Health. - An appeal shall be deemed perfected upon filing of the notice of appeal and posting of the
corresponding appeal bond.

An appeal shall not stay the decision appealed from unless an order from the Secretary of Health is
issued to stay the execution thereof.

Sec. 9. Appeals. - Decisions of the Secretary (DENR, DA, DOH or DOST) may be appealed to

the Office of the President. Recourse to the courts shall be allowed after exhaustion of all
administrative remedies.

In view thereof, the Court should modify that part of the Decision which allows direct appeal of the
FDA decision to the Court of Appeals.  As stated in the said decision, the FDA decision need not be
1âwphi1

appealed to the Secretary of Health because she herself is a party herein. Considering that the
Executive

Secretary is not a party herein, the appeal should be to the OP as provided in Section 9.

On the Prayer to Lift the TRO

The respondents lament that the assailed decision undermines the functions of the FDA as the
specialized agency tasked to determine whether a contraceptive drug or device is safe, effective and
non-abortifacient. They also claim that the assailed decision requiring notice and hearing would
unduly delay the issuance of CPR thereby affecting public access to State-funded contraceptives.
Finally, in a veritable attempt to sow panic, the respondents claim that the TRO issued by the Court
would result in "a nationwide stockout of family planning supplies in accredited public health
facilities and the commercial market. "45

On this score, it should be clarified that the Decision simply enjoined the respondents from
registering, recertifying, procuring, and administering only those contraceptive drugs and devices
which were the subjects of the petitioners' opposition, specifically Implanon and Implanon NXT. It
never meant to enjoin the processing of the entire gamut of family planning supplies that have been
declared as unquestionably non-abortifacient. Moreover, the injunction issued by the Court was only
subject to the condition that the respondents afford the petitioners a genuine opportunity to their right
to due process.

As the Decision explained, the Court cannot lift the TRO prior to the summary hearing to be
conducted by the FDA. To do so would render the summary hearing an exercise in futility.
Specifically, the respondents would want the Court to consider their argument that Implanon and
Implanon NXT have no abortifacient effects. According to them, "the FDA tested these devices for
safety, efficacy, purity, quality, and non-abortiveness prior to the issuance of certificates of
registration and recertification, and after the promulgation of Imbong."   The Court, however,
46

cannot make such determination or pronouncement at this time. To grant its prayer to lift the
TRO would be premature and presumptuous. Any declaration by the Court at this time would
have no basis because the FDA, which has the mandate and expertise on the matter, has to first
resolve the controversy pending before its office.

This Court also explained in the Decision that the issuance of the TRO did not mean that the FDA
should stop fulfilling its mandate to test, analyze, scrutinize, and inspect other drugs and devices.
Thus:

Nothing in this resolution, however, should be construed as restraining or stopping the FDA from
carrying on its mandate and duty to test, analyze, scrutinize, and inspect drugs and devices. What
are being enjoined are the grant of certifications/re-certifications of contraceptive drugs without
affording the petitioners due process, and the distribution and administration of the questioned
contraceptive drugs and devices including Implanon and Implanon NXT until they are determined to
be safe and non-abortifacient. 47

On Delay

The respondents claim that this judicial review of the administrative decision of the FDA in certifying
and recertifying drugs has caused much delay in the distribution of the subject drugs with a dire
impact on the effective implementation of the RH Law.

In this regard, the respondents have only themselves to blame. Instead of complying with the orders
of the Court as stated in the Decision to conduct a summary hearing, the respondents have returned
to this Court, asking the Court to reconsider the said decision claiming that it has wreaked havoc on
the organizational structure of the FDA.

Had the FDA immediately conducted a summary hearing, by this time it would have finished it and
resolved the opposition of the petitioners.  Note that there was already a finding by the FDA, which
1âwphi1

was its basis in registering, certifying and recertifying the questioned drugs and devices. The
pharmaceutical companies or the MAHs need not present the same evidence it earlier adduced to
convince the FDA unless they want to present additional evidence to fortify their positions. The only
entities that would present evidence would be the petitioners to make their point by proving with
relevant scientific evidence that the contraceptives have abortifacient effects. Thereafter, the FDA
can resolve the controversy.
Indeed, in addition to guaranteeing that no person shall be deprived of life, liberty and property
without due process of law,  the Constitution commands that "all persons shall have the right to a
48

speedy disposition of their cases before all judicial, quasi-judicial and administrative bodies."
49

WHEREFORE, the August 24, 2016 Decision is MODIFIED. Accordingly, the Food and Drug
Administration is ordered to consider the oppositions filed by the petitioners with respect to the listed
drugs, including Implanon and Implanon NXT, based on the standards of the Reproductive Health
Law, as construed in lmbong v. Ochoa, and to decide the case within sixty (60) days from the date it
will be deemed submitted for resolution.

After compliance with due process and upon promulgation of the decision of the Food and Drug
Administration, the Temporary Restraining Order would be deemed lifted if the questioned drugs and
devices are found not abortifacients.

After the final resolution by the Food and Drug Administration, any appeal should be to the Office of
the President pursuant to Section 9 of E.O. No. 247.

As ordered in the August 24, 2016 Decision, the Food and Drug Administration is directed to amend
the Implementing Rules and Regulations of R.A. No. 10354 so that it would be strictly compliant with
the mandates of the Court in lmbong v. Ochoa.

SO ORDERED.

JOSE CATRAL MENDOZA,

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

EN BANC
 June 20, 2017

G.R. No. 223244

RHODELIA L. SAMBO and LORYL J. AVILA, Petitioners

vs.
COMMISSION ON AUDIT, represented by Chairperson MA. GRACIA M. PULIDO TAN,
Chairperson, Respondent

DECISION

PERALTA, J.:

Before the Court is a petition for certiorari   under Rule 65 in relation to Rule 64 of the Rules of Court
1

seeking to nullify Commission on Audit (COA) Decision No. 2015-024   dated January 29, 2015 of
2

the COA partly affirming Decision No. 201 O-C-005 dated May 13, 2010 of the COA Regional
Office (RO) No. V, which partly lifted the Notice of Disallowance (ND) No. REG. 08-01-101   dated
3

September 12, 2008 as regards the payment of benefits to several employees of Quedan and Rural
Credit Guarantee Corporation (QUEDANCOR), Region V for the Calendar Years (CYs) 2006 and
2007 in the total amount of ₱94,913.15.

The factual antecedents are as follows:

QUEDANCOR is a government-owned and controlled corporation (GOCC) created under Republic

Act No. 7393.   Petitioners Rhodelia L. Sambo (Samba) and Loryl J. Avila (Avila) are the Acting
4

Regional Assistant Vice President and Regional Accountant, respectively, of QUEDANCOR,

Regional Office V.  5

In September 12, 2008, the Audit Team Leader (ATL)/Residcnt Auditor in QUEDANCOR of COA
Naga City issued ND No. REG. 08-01- 101 dated September 12, 2008 disallowing disbursement and
payments in the total amount of ₱94,913.15. The disallowed expenditures consist of benefits to
several employees of QUEDANCOR for the CY s 2006 and 2007, as follows:

1. Year End Benefits (YEB) for CY 2007 in the amount of ₱6,815.50;

2. Medicine Reimbursements for CY 2007 in the amount of ₱53,097.65;

3. Performance Bonus (PerB) for CY 2007 in the amount of ₱25,000.00;

4. Productivity Incentive Benefit (PIE) for CY 2006 in the amount of ₱l0, 000.00.

The reason for the disallowance by the A TL was that the payees for the YEB, PerB and PIB are
casual employees and, therefore, not entitled to receive the benefits and allowances. The
appointments were merely covered by Special Orders issued by the QUEDANCOR President and
Chief Executive Officer (COE) and were without approval of the Civil Service Commission (CSC).
Hence, the employees' contracts of services are not governed by the CSC laws, rules and
regulations. The A TL stated that the nature of the employment of the payees is in the nature of
contracts of service or job orders. Being such, their employment cannot be classified as government
service because there is no employer and employee relationship between them and QUEDANCOR.
Hence, they are not entitled to receive the benefits enjoyed by government employees like the YEB,
PerB and PIB.  6
The following rules and regulations were cited as bases for the disallowance:

1. Item 3 .2 of Budget Circular (BC) No. 2005-6 dated October 28, 2005 on the "Updated Rules and
Regulations on the Grant of the Year-End Bonus and Cash Gift to Government Personnel for FY
2005 and Years Thereafter";

2. Item 2.2 of BC No. 2005-07 dated December 15, 2005 on the "Grant of Performance Bonus for
FY 2005";

3. Item 2.1. l of National Compensation Circular (NCC) No. 73 dated December 27, 1994 entitled
the "Grant of Productivity Incentive Benefit for CY 1994 and Years Thereafter." 7

The Medicine Reimbursements were disallowed in audit in the absence of statutory authority for its
grant, citing Section 84(1) of Presidential Decree (P.D.) 1445, otherwise known as the Government
Auditing Code of the Philippines, which provides that revenue funds shall not be paid out of any
public treasury or depository except in pursuance of an appropriation law or other specific statutory
authority. 8 According to the ATL, a mere Memorandum issued by the President and COE of
QUEDANCOR authorizing the grant of medicine reimbursement is not the "statutory authority"
contemplated by P.D. 1445.

The ND No. REG. 08-01-101 enumerates the following persons as liable for the disallowed amounts:

1. the payees;

2. petitioner Avila for certifying on the completeness and propriety of the supporting documents and
the cash availability;

3. petitioner Sambo for approving the payments;

4. Federico A. Espiritu, Executive Vice-President of QUEDANCOR for issuing the following:

(a) QUEDANCOR No. 061 dated February 8, 2008 authorizing the payees to claim 10%
compensation adjustment effective July 2007 as regards the payment of YEBs;

(b) QUEDANCOR No. 08 dated January 29, 2008 authorizing the payees to claim PerB for
Fiscal Year 2007; and

(c) QUEDANCOR No. 181 dated March 15, 2007 authorizing the payees to claim PIB for CY
2006;

5. Nelson C. Buenaflor, President and COE of QUEDANCOR for issuing QUEDANCOR Circular No.
294 dated June 3, 2004 authorizing the claim for medical reimbursement in the absence of statutory
authority for the grant of the benefit.

The officers, together with the payees named in ND No. REG. 08-01- 101, filed a motion for
reconsideration with the A TL, but the same was denied.  9

On February 18, 2010, petitioners and the concerned employees payees elevated the matter to the
COA Regional Director in Region V by filing a Memorandum for the appellants.   They argued that:
10

(a) they are only following the policies, guidelines, letters of authority and special orders issued by
their head office in the grant of the questioned benefits; (b) they are in good faith as their functions
are only ministerial; (c) they have proof that they have, in fact, submitted CSC authenticated Plantilla
of Casual Appointments and Contractual Appointments in the Quedancor Regional Office with
attestation from the CSC.  11

In her answer to the appeal, the ATL maintained that the disallowance was proper in its entirety and
reiterated that appellants were not entitled to the subject benefits. 
12

In view of the submission of the CSC approved Plantilla of Casual Appointments by Quedancor
effective September 7, 2007, the Regional Director of COA Regional Office (RO) V lifted the
disallowance on the PerB equivalent to the pro-rated amount of ₱2,000.00 from each of the five
payees, or a total of ₱l0, 000.00. Thus, the total disallowed amount of ₱41,815.50 as stated in the
ND was reduced to ₱31,815.50 broken down as follows: ₱6,815.50 for YEB, ₱15,000.00 for PerB
and ₱10,000.00 for PIB. The dispositive portion of Decision No. 20 I O-C0-005 dated May 13, 2010
states:

WHEREFORE, premises considered, the disallowance appealed from is LIFTED as to the amount of

₱l0, 000.00 while the remaining amount of ₱84,913.15 is AFFIRMED WITH MODIFICATION in that
the appellants are no longer required to refund the amount disallowed on the basis of good faith,
consistent with the rulings of the Supreme Court in the cases of Ronnie H. Lumayna, et al., vs.
Commission on Audit, Remedios T. Blanquera, et al. v. Hon. Angel C. Alcala, et al. and Home
Development Mutual Fund v. COA.  13

Upon automatic review,   the COA Commission Proper rendered a Decision dated January 29, 2015
14

partly approving the said Decision No. 20 I O-C-005 of COA RO No. V:

Thus, this Commission agrees with the decision of the RD of COA RO No. V dated May 13, 2010,
lifting the disallowance on the PerB equivalent to the pro-rated amount to which employees were
entitled to receive upon submission of a copy of their appointment approved by the CSC, to wit:

xxxx

However, the RD might have overlooked the name of Mr. Reinhard Arceo and included instead Ms.
Meriam A. Borromeo in lifting the above disallowance. Hence, the above RD's Decision dated May
13, 2010 partially lifting the PerB is corrected as to Ms. Borromeo who shall be replaced by Mr.
Arceo.

On the other hand, the employees who were considered "probationary" but without the original
appointment issued by the CSC were not entitled to the said benefits. Thus, the remaining
disallowance in the total amount of ₱31,815.50 representing YEB (₱6,815.50), PerB (₱15,000.00)
and PIB (₱l0, 000.00) is proper.

As to the propriety of the grant of medicine reimbursements, the ATL is correct in disallowing the
same for lack of legal basis.

x x x. 
15

The decretal potion of the Decision reads:

WHEREFORE, premises considered, Commission on Audit Regional Office No. V Decision No.

2010-C-005 dated May 13, 2010 is hereby PARTLY APPROVED. Accordingly, the disallowance on
the Performance Bonus granted to the employees who were able to submit their appointments duly
approved/attested to by the Civil Service Commission, in the amount of ₱10,000.00 is
hereby LIFTED, with the name of Ms. Meriam A. Borromeo to be replaced by Mr. Reinhard Arceo.
However, the disallowance of the Year-end bonus, remaining Performance Bonus and Productivity
Incentive Bonus in the total amount of ₱31,815.50 and the Medicine Reimbursements in the amount
of ₱53,097.65 is AFFIRMED. The officers who authorized/certified/approved the payment of the
disallowed benefits shall be solidarily liable for the total disallowance, but the rank-and file
employees who received the benefits in good faith need not refund the amount they each received.  16

However, the disallowance of the Year-end bonus, remaining Performance Bonus and Productivity
Incentive Bonus in the total amount of ₱31,815.50 and the Medicine Reimbursements in the amount
of ₱53,097.65 is AFFIRMED. The officers who authorized/certified/approved the payment of the
disallowed benefits shall be solidarily liable for the total disallowance, but the rank-and file
employees who received the benefits in good faith need not refund the amount they each received.  16

A Motion for Reconsideration   dated May 11, 2015 was filed by petitioners and Atty. Renato Z.
17

Enciso (one of the payees for the grant for medical reimbursement) but the same was denied in the
Resolution dated October 15, 2015.  18

Hence, this petition, raising the following issues:

THE RESPONDENT COMMISSION ON AUDIT GRAVELY ABUSED ITS DISCRETION

AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RENDERED THE
DECISION DA TED JANUARY 29, 2015, HOLDING THE PETITIONERS IN THEIR CAPACITIES
AS THE AUTHORIZING/CERTIFYING AND APPROVING OFFICERS SOLIDARJL Y LIABLE FOR
THE TOTAL DISALLOW ANCE.

THE RESPONDENT COMMISSION ON AUDIT GRAVELY ABUSED ITS DISCRETION

AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RULED THAT ONLY THE
OFFICERS WHO AUTHORIZED/CERTIFIED/APPROVED THE PAYMENT OF THE DISALLOWED
BENEFITS ARE SOLIDARILY LIABLE BUT EXEMPTING FROM ANY SPECIFIC LIABILITY THE
BOARD OF DIRECTORS, PRESIDENT AND CEO OF QUEDANCOR, WI-IO MADE THE POLICY
GUIDELINES AND ISSUED THE LETTERS OF AUTHORITY AUTHORIZING THE PAYMENT OF
THE DISALLOWED BENEFITS.  19

Petitioners argue in their petition that (a) they could not be held liable for the disallowance as they
are mere subordinate officers performing ministerial functions in good faith when they certified and
approved the disbursements of employee benefits disallowed by the COA; and (b) it is the Policy-
Makers, Board of Directors, President and CEO of QUEDANCOR, who made the circulars and
guidelines for the payments of disallowed benefits, that should be held directly and primarily liable
for the disallowance not the subordinate officers who merely followed it to the letter.

In the Comment   of respondent, it argued that petitioners failed to prove that they acted in good
20

faith in disregarding the provisions of RA 6758   and Administrative Order (AO) 103 dated January
21

14, 1994 pertaining to payment of allowances. RA 6758 standardizes the salary rates of government
officials and employees,   while AO 103 enjoins head of government agencies from granting
22

incentive benefits without prior approval of the President. Respondent averred that the blatant
disregard of the petitioners (approving officers) to abide with the provisions of AO 103 overcame the
presumption of good faith invoking the rulings in Executive Director Casal v. COA,   Dr. Velasco, et
23

al. v. COA,   and Tesda v. COA. 

24 25

We dismiss the petition.

Presidential Decree No. 1445 spells out the rule on general liability for unlawful expenditures:

Section 103. General liability for unlawfitl expenditures. Expenditures of government funds or uses of

government property in violation of law or regulations shall be a personal liability of the official or
employee found to be directly responsible therefor.  26

Under this provision, an official or employee shall be personally liable for unauthorized expenditures
if the following requisites are present, to wit: (a) there must be an expenditure of government funds
or use of government property; (b) the expenditure is in violation of law or regulation; and (c) the
official is found directly responsible therefor.
27

Related to the foregoing is Section 19 of COA Circular No. 94-001, the Manual of Certificate of
Settlement and Balances, which provides for the bases for determining the extent of personal
liability:

19.1. The liability of public officers and other persons for audit disallowances shall be determined on
the basis of (a) the nature of the allowance; (b) the duties and responsibilities of the officers/persons
concerned; (c) the extent of their participation or involvement in the disallowed transaction; and (d)
the amount of losses or damages suffered by the government thereby. The following are illustrative
examples:

x x xx

19.1.3. Public officers who approve or authorize transactions involving the expenditure of
government funds and uses of government properties shall be liable for all losses arising out of their
negligence or failure to exercise the diligence of a good father of a family.

Clearly, therefore, public officials who are directly responsible for, or participated in making the illegal
expenditures, as well as those who actually received the amounts therefrom shall be solidarily liable
for their reimbursement.  28

However, in cases involving the disallowance of salaries, emoluments, benefits, and allowances due
to government employees, jurisprudence has settled that recipients or payees in good faith need not
refund these disallowed amounts. For as long as there is no showing of ill intent and the
disbursement was made in good faith, public officers and employees who receive subsequently
disallowed benefits or allowances may keep the amounts disbursed to them.  29

On the part of the approving officers, they shall only be required to refund if they are found to have
acted in bad faith or were grossly negligent amounting to bad faith. In common usage, the term
"good faith" is ordinarily used to describe that state of mind denoting "honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder upon inquiry; an honest
intention to abstain from taking any unconscientious advantage of another, even through
technicalities of law, together with absence of all information, notice, or benefit or belief of facts
which render transaction unconscientious."  30

In the present case, we take note that petitioners are not disputing the amount of disallowance which
was lowered to ₱84,9l3.15 from the amount stated in the ND which is ₱94,913.15. They are merely
arguing that they should not be held liable being merely subordinate officers who followed the
guidelines issued by QUEDANCOR, as follows:
a) QUEDANCOR Authority No. 258 issued by the Executive Vice-President of QUEDANCOR
authorizing "Advance Payment of One-Half of the Amount of the Year End Bonus and Cash Giff for
CY 2007"; 31

b) QUEDANCOR Authority No. 578 dated November 22, 2007 issued by the Executive Vice-
President of QUEDANCOR authorizing the payment of the "Remaining Bonus and Cash Gift for CY
2007"; 32

c) QUEDANCOR Authority No. 604 dated December 21, 2007 issued by the Executive Vice-
President of QUEDANCOR authorizing the "Grant of the Performance Bonus for FY 2007"·  33

d) QUEDANCOR Authority No. 038 dated January 29, 2008 issued by the Executive Vice-President
of QUEDANCOR authorizing the "Grant of the Remaining Half of the Performance Bonus for FY
2007"; 34

e) QUEDANCOR Authority No. 511 dated November 4, 2008 issued by the Executive Vice-
President of QUEDANCOR authorizing the "Payment of Productivity Incentive Bonus for CY
2007";   and '
35

j) Circular No. 294 Series of 2004 issued by the President and COE of QUEDANCOR which
provides for the "Implementing Guidelines for Grant of Medicine Allowance for QUEDANCOR
Employees." 36

Jurisprudence holds that, absent any showing of bad faith and malice, there is a presumption of
regularity in the performance of official duties. However, this presumption must fail in the presence of
an explicit rule that was violated. For instance, in Reyna v. COA,   this Court affirmed the liability of
37

the public officers therein, notwithstanding their proffered claims of good faith, since their actions
violated an explicit rule in the Land Bank of the Philippines' Manual on Lending Operations.  38

In similar regard, this Court, in Casal v. COA,   sustained the liability of certain officers of the
39

National Museum who again, notwithstanding their good faith participated in approving and
authorizing the incentive award granted to its officials and employees in violation of AO Nos. 268
and 29 which prohibit the grant of productivity incentive benefits or other allowances of similar nature
unless authorized by the Office of the President. We held that, even if the grant of the incentive
award was not for a dishonest purpose, the patent disregard of the issuances of the President and
the directives of the COA amounts to gross negligence, making the "approving officers" liable for the
refund of the disallowed incentive award. We ratiocinated, thus:

The failure of petitioners-approving officers to observe all these issuances cannot be deemed a
mere lapse consistent with the presumption of good faith. Rather, even if the grant of the incentive
award were not for a dishonest purpose as they claimed, the patent disregard of the issuances of the
President and the directives of the COA amounts to gross negligence, making them liable for the
refund thereof. x x x.

In the case of Dr. Velasco, et al. v. COA,   the Tariff Commission granted Merit Incentive Award to
40

its officials and employees in contravention of Presidential Administrative Order Nos. 16 and 103
which both mandate that the productivity incentive benefit should not be granted without prior
approval and authorization from the President. This Court then held that:

x x x the blatant failure of the petitioners-approving officers to abide with the provisions of AO 103
and AO 161 overcame the presumption of good faith. The deliberate disregard of these issuances is
equivalent to gross negligence amounting to bad faith. Therefore, the petitioners-approving officers
are accountable for the refund of the subject incentives which they received.

This Court applied by analogy the Casal and Velasco rulings in the case of Tesda v. COA,   wherein
41

we held the approving officers of Technical Education and Skills Development

Authority (TESDA) liable for the excess Extraordinary and Miscellaneous Expenses (EME) received
by them, thus:

In the petition filed before the Court, TESDA alleged that the various memoranda issued by the
Director-General authorized the TESDA officials designated as TESDP project officers to claim EME
under the TES DP Fund. TESDA did not cite a specific provision of law authorizing such EME, but
claimed that its grant had been an "institutional practice," showing the lack of statutory authority to
pay such EME. Despite this lack of authority for granting additional EME, the then Director-General
still permitted EME in excess of the allowable amount and extended EME to officials not entitled to it,
patently contrary to the 2004-2007 GAAs. x x x

Accordingly, the Director-General's blatant violation of the clear provisions of the Constitution, the
2004-2007 GAAs and the COA circulars is equivalent to gross negligence amounting to bad faith. He
is required to refund the EME he received from the TESDP Fund for himself. x x x.

In the case at bar, We find that the petitioners have equally failed to make a case justifying their non-
observance of existing auditing rules and regulations, as follows:

a) Item 3.2 of Budget Circular (BC) No. 2005-6 dated October 28, 2005 Re "Updated Rules and
Regulations on the Grant of the Year-End Bonus and Cash Gift to Government Personnel for FY
2005 and Years Thereafter" which provides that "consultants, experts, student laborers, apprentices,
laborers of contracted projects ("pakyaw"), mail contractors, those paid on piecework bases, and
others similarly situated" shall not be entitled to the one-half (112) YEB or the full YEB;

b) Item 2.2 of BC No. 2005-07 dated December 15, 2005 Re "Grant of Performance Bonus for FY
2005" which provides that "all personnel of national government agencies including government-
owned or controlled corporations (GOCCs) and government financial institutions (GFIs) whether on
permanent, temporary, casual or contractual basis provided that their salaries/wages are charged
against their Personal Services allocation and who have rendered at least four (4) months of service
as of November 30, 2005, are entitled to receive the Perb in the amount of Five Thousand Pesos
(₱5, 000.00) each. "

c) Item 2.1.1 of National Compensation Circular (NCC) No. 73 dated December 27, 1994 Re "Grant
of Productivity Incentive Benefit (PIB) for CY 1994 and Years Thereafter" which states that "casual,
temporary and full-time contractual personnel shall refer only to those whose positions have been
approved by the Department of Budget and Management and whose hiring have been approved by
the Civil Service Commission ".

d) Section 84(1) of P .D. 1445 which states that "revenue funds shall not be paid out of any public
treasury or depository except in pursuance of an appropriation law or other specific statutory
authority."

Petitioners failed to faithfully discharge their respective duties and to exercise the required diligence
which resulted in the irregular disbursements paid to the employees whose appointments have not
been approved by the CSC. Being a GOCC, QUEDANCOR is bound by civil service laws. Under the
Constitution,   the CSC is the central personnel agency of the government, including GOCCs. It
42

primarily deals with matters affecting the career development, rights and welfare of government
employees.   In this light, the ruling of the COA Commission Proper in not appreciating good faith on
43

the part of the petitioners must perforce be upheld.  44

Petitioners pointed out that they have sent a query dated April 23, 2007 seeking clarification and
guidance from their Head Office as regards the disbursements of benefits, but failed to receive any
clarification on the matter of the presumption on the regular performance of official duties unless
there is a clear showing of bad faith. We note, however, that the letter is dated April 2007, while
some of the checks for the disallowed benefits and allowances were issued prior to April 2007.

Furthermore, petitioners invoked the case of Maritime Industry Authority v. COA   claiming that the
45

"officers who participated in the approval of the disallowed benefits are required to refund only the
amounts received when they are found to be in bad faith or grossly negligent amounting to bad
faith." This claim of petitioners is erroneous.
1âwphi1

In the case of Silang v. COA,   We did not hold liable the rank and file employees who received the
46

incentives on the honest belief that they are entitled to the benefits but We ruled otherwise with
respect to the officers who directly participated in the negotiations pertaining to the disallowed
incentives:

Their unexplained failure in this wise, therefore, goes against their claim of good faith in the
allowance and payments of the CNA Incentives, especially since the 2008 CNA Incentive had
already been disallowed even prior to the approval of Ordinance No. 09-01 authorizing the release of
the 2009 CNA Incentive. That they did not receive any amount from the disallowed benefits does not
exculpate them from personal and solidary liability for reimbursement therefor, under the legal
provisions abovequoted, as receipt of the disallowed benefits is inconsequential, absent any

showing of good faith. As aptly pointed out by Associate Justice Arturo D. Brion during the
deliberations on this case, the receipt or non-receipt of illegally disbursed funds is immaterial to the
solidary liability of the government officials directly responsible therefor, as in the case of Maritime
Industry Authority v. COA, where the Court held the approving officers therein who acted in bad faith
as solidarity liable to return the disallowed funds, even if they never got hold of them. 47

Lastly, the argument of petitioners that they, as the approving officers, are the only ones held
solidarily liable while exempting the President and COE of QUEDANCOR who made the guidelines
is not true. It is explicitly stated in (ND) No. REG. 08-01-101 48 which was affirmed by the COA
Commission Proper that the President and CEO as well as the Vice President of QUEDANCOR are
made liable for issuing the aforesaid guidelines and authorizing the release of the aforesaid benefits.
This solidary liability is in accordance with Book VI, Chapter V, Section 43 of the Administrative
Code, which provides:

Liability for Illegal Expenditures. - Every expenditure or obligation authorized or incurred in violation
of the provisions of this Code or of the general and special provisions contained in the annual
General or other Appropriations Act shall be void. Every payment made in violation of said
provisions shall be illegal and every official or employee authorizing or making such payment, or
taking part therein, and every person receiving such payment shall be jointly and severally liable to
the Government for the full amount so paid or received.

WHEREFORE, premises considered, the DISMISSED. The Commission on Audit Decision January

29, 2015 is hereby AFFIRMED. instant petition is No. 2015-024 dated

SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice

Re: Letter of Lucena Ofenido Reyes alleging illicit activities of a certain Atty. Cajayon involving cases in
the Court of Appeals, Cagayan De Oro City/Re: Letter-complaint of Sylvia Adante Charging Hon. Jane
Aurora C. Lantion, Associate Justice, Court of Appeals, Cagayan De Oro City, and Atty. Dorothy Cajayon
with "Systematic Practices of Corruption"
A.M. No. 16-12-03-CA/IPI No. 17-248-CA-J
June 6, 2017

Facts:

On October 1 7, 2016, Adante filed before the Office of the Ombudsman (Ombudsman) a letter, alleging
that it was "intimated to [her]" that Atty. Cajayon, whom she met only once, was in cahoots with Justice
Lantion in engaging in the shameful business of "selling" decisions involving cases from the CA-CDO to
the highest bidder. Subsequently, or on October 25, 2017, Ofendoreyes filed before the same agency a
letter, requesting the latter to investigate and stop the purported partnership of Atty. Cajayon and Justice
Lantion from the business of selling decisions in exchange for money. Both letter-complaints were
respectively referred by the Ombudsman to this Court on November 22, 20164 and November 23, 2016,
which were, consequently, docketed as IPI No. 17-248-CA-J and A.M. No. 16-12-03-CA. In a Resolution
dated January 10, 2017, the Court referred the administrative matters to the Office of the Court
Administrator (OCA) to study the possible consolidation of the same.

The OCA's Report and Recommendation

In a Memorandum dated February 14, 2017, the OCA recommended that the matters be consolidated,
considering that both letter-complaints involve the same respondents, i.e., Atty. Cajayon and Justice
Lantion, and issue, i.e., the sale of favorable decisions involving cases in the CA-CDO to the highest
bidder. The OCA, however, observed that the letter-complaints were insufficient in form and substance in
that they: (1) were not verified; and (2) lacked affidavits of persons who may have personal knowledge of
the facts to prove or substantiate the letter-complaints' allegations against respondents, as well as
supporting documents. Moreover, it echoed the rule that in administrative proceedings, the burden of
proof that the respondent committed the acts complained of rests on the complainant, and that in the
absence of evidence against a court employee or magistrate to discipline for a grave offense, the
presumption that the respondent has regularly performed his duties will prevail.

Issue:

Whether or not Atty. Cajayon and Justice Lantion should be held administratively liable.

Ruling:
Under the Rules of Court, administrative complaints both against lawyers and judges of regular and
special courts as well as Justices of the Court of Appeals and the Sandiganbayan must be verified and
supported by affidavits of persons who have personal knowledge of the facts alleged therein or by
documents which may substantiate said allegations. For lawyers, these requirements are stated in
Section 1, Rule 139-B of the Rules of Court:

SECTION 1. How Instituted. - Proceedings for the disbarment, suspension, or discipline of attorneys may
be taken by the Supreme Court motu propio, or by the Integrated Bar of the Philippines (IBP) upon the
verified complaint of any person. The complaint shall state clearly and concisely the facts complained of
and shall be supported by affidavits of persons having personal knowledge of the facts therein alleged
and/or by such documents as may substantiate said facts. (Emphasis and underscoring supplied)
Meanwhile, for judges and Justices of the Court of Appeals and the Sandiganbayan, the requirements are
found in Section 1, Rule 140 of the Rules of Court.

PS. CANOS v. ATTY. ESCOBIDO

SPOUSES RODEL and ELEANOR CANOS, Complainants, - versus  - ATTY.  LOUISE MARIE
THERESE B. ESCOBIDO, Clerk of Court V, Branch 19, Regional Trial Court, Digos City, Respondent.
A.M. No. P-15-3315
February 6, 2017

FACTS:

When Escobido learned that Sps. Cafios are selling jewelry and imported goods, she offered to get some
items to resell as she used to be in the same business. Since Sps. Cafios trusted Escobido as clerk of
court and as a lawyer, they agreed to her proposal. Sometime between January and November 2010,
Escobido purchased from Sps. Cafios, on credit, various jewelry and imported goods amounting to P
4,777,945.00. The purchases were covered by Trust Receipt Agreements. As payment, Escobido issued
postdated checks, some of which were made good during the first ten months. However, the rest of the
checks amounting to P3,827,299.30 were returned or refused payment by the drawee banks for the
reason "ACCOUNT CLOSED." Aside from Escobido's purchases on credit, she also borrowed money
from Sps. Cafios. As payment, she issued postdated checks in the total amount of Pl 64,866.10 which
were likewise dishonored for the same reason.

On February 15, 2012, Escobido executed an Undertaking and acknowledged only P2,545,339.25 as the
amount she owed to Sps. Cafios. Despite the demands by Sps. Cafios, she refused to pay her obligations
amounting to P3,604,065.40 Finally, Sps. Cafios alleged that Escobido also used her position and
profession to intimidate and coerce them from filing cases against her.

In her defense, Escobido claimed belied Sps. Cafios' allegations. She claimed she had known Rodel
since 1993 when she was still studying law and became her boyfriend. In 2009, they met again as he
frequented her office to follow up cases which paved the way for business opportunities. Escobido said
was Rodel who persuaded her to help them sell their goods on a consignment basis. The business was
doing well for months until Sps. Cafios introduced the jewelry business to Escobido where they proposed
that they will give Escobido a "dealer's price," provided that anything she gets from them will be
considered sold unless defective. At first, she was able to pay her debts until most of her customers
started to miss their payments. Escobido told Rodel about her problem and he merely advised her to be
careful next time and gave her an extended period within which to pay. Thus, despite her outstanding
balance, Sps. Cafios continued to sell her jewelry. She decided to stop due to her increasing bad debts.
She told them that she would just return whatever jewelry she could get back from her customers who
had been remiss in their payments. Sps. Cafios refused because the jewelry was already considered sold
and they feared that their quality might have already deteriorated. She tried to pay her debts, even
borrowing from loan sharks until she could no longer pay.

ISSUE:

Escobido should be held administratively liable for willful failure to pay just debts and conduct prejudicial
to the best interest of the service.

HELD:

The Court agrees with the OCA that Escobido should be held administratively liable for willful failure to
pay just debts and conduct prejudicial to the best interest of the service.

Executive Order No. (EO) 292, otherwise known as the Administrative Code of 1987, provides that a
public employee's failure to pay just debts is a ground for disciplinary action. Section 22, Rule XIV of the
Rules Implementing Book V of EO 292, as modified by Section 46, Rule 10 of the Revised Rules on
Administrative Cases in the Civil Service (RRACCS), defines "just debts" as those: (a) claims adjudicated
by a court of law; or (b) claims the existence and justness of which are admitted by the debtor.

The court agrees with the OCA that Escobido' s repeated acts of contracting loans and paying them with
worthless checks reflect bad faith on her part. It must be noted that Escobido, as clerk of court, is not a
mere public employee. She is both an employee of the Court and a member of the Bar. Thus, she is
expected to meet a high standard of uprightness and propriety. By deliberately failing to meet her
contractual obligations, she fell short of such standard. The court likewise agree that Escobido holds a
position of trust : and confidence with concomitant duties and responsibilities that require from its holder
competence, honesty, and integrity so essential for the proper and effective administration of justice. Her
actuation, although arising from a private transaction, tarnished the image of the Judiciary.

EN BANC

January 24, 2017

A.M. No. P-16-3564

JUDGE ANDREW U. BARCENA, Complainant,

vs.
CLERK OF COURT II THELMA S. ABADILLA, CASHIER I ROSELLER O. ISRAEL, CLERK IV
ULYSSES D. DUPAYA, CLERK III ROY C. ROSALES and JUNIOR PROCESS SERVER JAMES
D. LORILLA, all of the Office of the Clerk of Court, Municipal Trial Court, Lal-lo, Cagayan,
Respondents.

DECISION

PER CURIAM:

Before the Court is an administrative complaint filed by Judge Andrew U. Barcena (Judge

Barcena), Presiding Judge, Branch 1, Municipal Trial Court (MTC), Lal-lo, Cagayan, against James
D. Lorilla, Junior Process Server (Lorilla); Ulysses Dupaya, Clerk IV (Dupaya),· Roy Rosales, Clerk
III (Rosales); Roseller Israel, Cashier I (Israel); and Thelma S. Abadilla (Abadilla), Clerk of Court II,
all of the Office of the Clerk of Court, MTC (OCC), for gross insubordination and gross disrespect to
a judicial authority.

The Complainant's Position

In his Affidavit-Complaint,   dated July 16, 2010, Judge Barcena stated that he was also the Acting
1

Presiding Judge of Branch 3, MTC, and the designated Executive Judge of the MTC. He further
narrated the events as follows:

2. On July 15, 2010 around 11:30 o'clock in the morning, I was inside my chamber at MTC Branch I
busy working when Mr. Peter Cusipag, Clerk II in my Court, came in and informed me that four (4)
male personnel of the OCC, namely, James D. Lorilla, Junior Process Server; Ulysses D. Dupaya,
Clerk IV; Roy C. Rosales, Clerk II; and Roseller O. Israel, Cashier I, were outside my chamber in an
angry mood and demanding that I sign their accomplished Performance Evaluation Forms (PEFs)
for the period January-June 2010;

3. At that time, Estelita P. Constantino, Court Stenographer II in my Court, was inside my chamber
encoding an Order which I just finished dictating to her;

4. Mr. Cusipag was already holding the PEFs of OCC personnel including that of Thelma S. Abadilla,
Clerk of Court II, which were handed to him by Mr. Lorilla. The PEFs of all the OCC personnel,
except that of Ms. Abadilla, were already signed by them as Ratees and by Ms. Abadilla as Rater. I
will also sign as the Next Higher Supervisor. The PEF (for supervisor) of Ms. Abadilla was already
accomplished as she already rated herself when I should be the one rating her performance being
the Rater;

5. Mr. Cusipag informed me further that James Lorilla wanted to know if I would sign their PEFs right
away;

6. As I was then busy drafting a decision, I just listened to Mr. Cusipag and knowing that I was busy
drafting a decision, he went out still holding the PEFs;

7. Sometime in the first week of July, Ms. Judy Cusipag, Records Officer of the OCC, went to my
chamber purposely to let me sign the accomplished PEFs of all OCC staff including that of Ms.
Abadilla. I instructed her that I will confer with each staff to assess their individual performance
before I will sign their PEFs;
8. On July 12, 2010, Ms. Leticia U. Israel, Branch Clerk of Court, MTC Branch III, also went to my
office to have their already accomplished PEFs signed. I also instructed her that I will confer with
each staff to assess and evaluate their individual ratings before I will sign their PEFs. As my
instruction is clear, she did not anymore insist;

9. On that same day, Ms. Abadilla went to my office and again asked me to sign their PEFs. I
repeated to her my earlier instruction to Ms. Cusipag that I will confer with each staff to assess and
evaluate their performance before I will sign their PEFs;

10. I specifically instructed Ms. Abadilla to hold meanwhile their PEFs anyway the period of
submission of performance ratings to the Office of the Court Administrator is not yet due as I know
for a fact that the deadline is still in August 10 and reiterated my directive that I will sign their PEFs
on the third week of July after I shall have conferred with each staff and review the ratings they
themselves have already indicated in their respective PEFs;

11. On July 14, 2010, Ms. Abadilla went again to my office insisting that I should sign their PEFs and
again repeated my earlier directive that I will sign those PEFs only after I shall have conferred with
each of the staff which I will do on the third week of July as by that time I would be done with the
more pressing concerns in the office;

12. That is why I was surprised when Mr. Cusipag informed me that Mr. Lorilla and his three male
companions are in my office, demanding that I should sign their PEFs despite my earlier verbal
instructions to Ms. Abadilla, their immediate supervisor, that I would first personally confer with the
OCC staff regarding their ratings before I will sign the PEFs;

13. I decided then to inquire from Ms. Abadilla why her process server and other male employees
are demanding that I will sign their PEFs right then and how come they have in their possession their
PEFs which is a willful disregard of my verbal instructions to her to hold the PEFs and that I would
sign them only after I shall have conferred with the OCC staff and evaluated the ratings which they
themselves indicated in their PEFs;

14. It was about 12:00 o'clock noon of that fateful day when I went out of my chamber to request one
of my staff to call for Ms. Abadilla. I saw my staff Estelita Constantino, Avelina Evangelista and
Corazon Vasquez still inside the office. I also notice Mr. Lorilla, with a grim expression on his face,
standing near my chamber;

15. Since Mr. Lorilla was there anyway, I instructed him to call his superior, Ms. Abadilla;

16. Much to my surprise, instead of complying with my instruction, Mr. Lorilla suddenly flew into
rage, pointed his forefinger right at my face and angrily shouted, "Bakit ayaw mong pirmahan ang
rating namin! Bakit si Thelma ang tinatawag mo eh nandito naman ako! Hindi ako natatakot sayo!"
(Why do you refuse to sign our ratings! Why do you want to call for Thelma when I am already here!
I am not afraid of you!);

17. I was shocked by the vicious tirade and menacing demeanor of Mr. Lorilla but I just ignored him.
I repeated my instruction for him to call Ms. Abadilla and then headed towards my chamber as I
wanted to avoid the menacing and adversarial demeanor of Mr. Lorilla;

18. As I turned my back from Mr. Lorilla, he suddenly attacked me by fiercely grabbing and
strangling my neck with his right arm while his left arm strongly clamped my body, leaving me
choking and totally immobilized;
19. While Mr. Lorilla was strangling my neck and clamped my body tightly, I felt a sharp object
pointed at my neck;

20. I struggled hard to break free but Mr. Lorilla strangled me harder determined to choke me to
death. Ms. Constantino tried to pull Mr. Lorilla away from me but she failed because Mr. Lorilla is a
very strong man with big body built;

21. When I was already choking and losing breath, I struggled hard but failed. Then, somebody
whom I learned later to be Alex Tugade, Court Utility Worker of MTC Branch II, extricated the hands
of Mr. Lorilla from my neck and body although it took him some time before he could totally extricate
Mr. Lorilla away from me;

22. I was losing breath and consciousness by the time Mr. Lorilla was extricated from me. It took me
some time to catch my breath and breathe normally. When I finally regained my normal breathing
and composure from the onslaught of Mr. Lorilla, my entire neck was in deep pain. I also felt a
stinging pain just below my left ear and when I examined it, I found a wound just below my left ear;

xxxx 2

On July 19, 2010, Judge Barcena wrote a letter  to then Executive Judge Conrado F.
3

Manauis (Executive Judge Manauis), Regional Trial Court, Aparri, Cagayan, (RTC) and reported the

incident that transpired on July 15, 2010 in his office. Attaching the complaint-affidavit and the
affidavits of the court employees who witnessed the said incident, Judge Barcena stated that he
would file criminal and administrative charges against Lorilla, Dupaya, Rosales, Israel, and Abadilla.

On even date, Executive Judge Manauis issued the Memorandum  requiring the said OCC
4

employees to reply to the affidavit-complaint of Judge Barcena. In compliance, the said court
employees submitted their Reply,   dated July 29, 2010, stating that they were adopting as part of
5

their reply the counter-affidavits and the affidavits of their witnesses which they executed before the
Office of the Provincial Prosecutor (OPP) in relation to the criminal case filed by Judge Barcena.

In his letter-referral,   dated August 2, 2010, addressed to Deputy Court Administrator Raul B.
6

Villanueva (DCA Villanueva), Executive Judge Manauis recommended that the respondents be

charged with gross insubordination and gross disrespect to judicial authority and be subjected to an
investigation.

Acting thereon, DCA Villanueva required the respondents to comment on the charges against
them.   The respondents, in turn, filed their respective comments, reiterating and adopting their reply
7

submitted to the Office of Executive Judge Manauis.

The Respondents' Position

In his Counter-Affidavit,  Lorilla averred that:

8

3.9 About 11:30 o'clock in the morning of 15 July 2010, I together with Ulysses D. Dupaya, Roy C.
Rosales and Rosseler O. Israel, all staff of OCC, saw Leo Arteta of MTC-Br. 3 allegedly called by
Judge Barcena regarding the approval of their PEFs, hence, we also decided to go to Judge
Barcena to politely inquire if we can also courteously request Judge Barcena to approve our PEFs;
3.10 The folder containing our PEFs was left on the table of Ms. Cusipag as she temporarily left our
office at that time but she left an instruction to Mr. Ulysses D. Dupaya that we can readily get said
folder if ever Judge Barcena needs the same for his approval;

3.11 As such, we decided to bring the folder containing our PEFs to the chambers of Judge Barcena
in order to request for his approval;

3.12 When we arrived thereat, we inquired from Avelina Evangelista, MTC-Br. 1 staff, if we can
respectfully request Judge Barcena to approve our performance rating. Ms Evangelista instructed
Mr. Pedro Cusipag, another MTC-Br. 1 staff, to inquire the same inside the chamber of Judge
Barcena;

3.13 When Mr. Pedro Cusipag returned, he informed us to wait for a while because he was still busy,
hence, we waited for further instruction;

3.14. After a few minutes, I saw Leticia I. Israel, Clerk of Court I of MTC-Br. 1, entered the chambers
of Judge Barcena but I do not know if she noticed us as I was then seated behind the back door of
MTC-Br. 1 while Ulysses D. Dupaya, Roy C. Rosales and Rosseler O. Israel were seated in benches
of the session hall of MTC-Br. 1;

3.15 I noticed that Leticia U. Israel went out then returned back again. Likewise, I observed that Ms.
Estelita Constantino, an MTC-Br. 1 staff, was also going in and out the judge's chamber as if looking
for a document regarding the deadline of submission of PEF;

3.16 At about 12:00 o'clock noon, Ulysses D. Dupaya, Roy C. Rosales and Rosseler O. Israel told
me that they will just go ahead in order to take their lunch. They requested me to stay behind in
order to courteously inquire if we can leave the folder containing their PEFs and just return in the
afternoon;

3.17 They even retorted that I should be the one to inquire because I have a very good professional
relationship with Judge Barcena because they know that Judge Barcena even commented that I
should be given an excellent in my performance rating due to my initiative in serving summons,
subpoena and other processes of the court, thus, I acceded also to their request;

3.18 As such, I asked Mrs. Constantino in a well-mannered voice if we can leave the folder
containing their PEFs and just return in the afternoon. Ms. Constantino, in turn, directed Ms.
Corazon Vasquez to go inside the chamber to ask Judge Barcena regarding the same;

3.19 Ms. Corazon Vasquez entered the chambers of Judge Barcena and then she came out.

3.20 Then Judge Barcena also came out of his chambers, then he suddenly threw the folder
containing our PEFs against one of the tables thereat;

3.21 At the same time, Judge Barcena lambasted me with insidious as well as insulting words and
he shouted repeatedly, at the top his lungs, the words "Punyeta kyo, kinukulit nyo ako! Tawagin nyo
nga ang punyetang Thelmang yan!" Meaning "You bastard, you keep on pestering me. You call that
bitch Thelma" while finger-pointing me;

3.22 Afterwhich, Judge Barcena approached me and kept on finger pointing me while uttering
defamatory and threatening words against me;
3.23 Then all of a sudden, Judge Barcena strongly pushed me away which caused me to lose my
balance;

3.24 Considering I was about to fall down, I held the hands of Judge Barcena which caused both of
us to fall down;

3.25 When both of us fell down, I was beneath and Judge Barcena was on top of me;

3.26 As I thought that he had a clear intention of harming me, I tried to protect myself as he was
grappling me;

3.27 We were even able to stand-up while grappling with each other;

3.28 During the struggle, I might have accidentally and inadvertently scratch my watch against the
neck of Judge Barcena but I must categorically state that I was not holding a weapon or any sharp
object during the scuffle;

3.29 When I noticed that Alex Tugade of MTC-Br. 2 arrived, I was able to extricate myself from
Judge Barcena;

3.30 Thereafter, Ms. Thelma Sac-Abadilla arrived and Judge Barcena turned his ire on her as the
latter kept on blaming the former for the incident;

3.31 Judge Barcena was insisting that Ms. Abadilla directed me to go to him but Ms. Abadilla
respectfully and courteously replied that she did not know that I and/ or any OCC personnel went to
him for the approval of our PEFs.

xxxx9

In their Joint Counter-Affidavit,   Dupaya, Rosales and Israel corroborated the statement of Lorilla
10

and asserted that Abadilla did not give them their PEFs; that Abadilla did not instruct them to go to
Judge Barcena for his signature; that they went to the office of Judge Barcena on their own volition;
and that if they were not instructed to wait, they would have left the office of Judge Barcena
immediately, but having been told to wait, they did so patiently.

Abadilla, on the other hand, argued in her Counter-Affidavit  that the charge of gross insubordination
11

was baseless as there was no specific order or directive of Judge Barcena that she disobeyed.
Abadilla asserted that she neither demanded nor insisted that their PEFs be signed or approved by
him after they had received his verbal instruction that he would first confer with each and every one
of them; and that she neither gave the folder containing the PEFs to her co-respondents nor
instructed them to go to the office of Judge Barcena to have them signed. Abadilla further denied
any knowledge on her co-respondents' alleged plan to attack Judge Barcena. She recalled that on
July 15, 2010, at around 12:00 o'clock noon, she was summoned to the office of Judge Barcena by
Corazon Vasquez (Vasquez), a personnel of MTC-Branch I. While on their way to Judge Barcena's
office, they heard commotions, and upon entering the room, Judge Barcena shouted at her and
accused her as the one who directed Lorilla to see him, and it was he who yelled at her and uttered
demeaning and humiliating remarks against her.

The Complainant's Reply

In his Reply-Affidavit,   dated August 18, 2010, Judge Barcena insisted that there was conspiracy
12

among respondents Lorilla, Dupaya, Rosales, and Israel to storm his office with the sole and ulterior
motive of coercing him into signing their PEFs, and that when he did not sign them, Lorilla boldly and
shamelessly assaulted him and almost choked him to death. To prove conspiracy, Judge Barcena
submitted the Affidavit   of Dante Quinto (Quinto), Junior Process Server I, stating that immediately
13

prior to the choking incident, he overheard Rosales utter the following remarks, "Guyuden yun ta
ikugtagugtar tay dita kanal len!" translated as "Pull him out and we will kick him to the canal."

As to the charge of insubordination against Abadilla, Judge Barcena claimed that after he gave his
verbal instruction to confer with each employee before signing their PEFs, Abadilla, in willful
disregard of his order, came to his office twice to seek approval of their PEFs; that he also verbally
instructed Abadilla to keep in her custody the PEFs of the OCC employees until he could have
conferred with each of them, but he was surprised to find out that the said PEFs were in the custody
of Lorilla, who was not authorized to keep them.

Supplemental Comment of
Dupaya, Rosales and Israel

In their Supplemental Comment,   dated December 20, 2010, Dupaya, Rosales and Israel denied
14

that Rosales uttered the words, "Pull him out and we will kick him to the canal, " and claimed that the
same was merely concocted in order to probably justify the unfounded theory of evident
premeditation. They further stated that even assuming that the said utterances were made, there
was no allegation in the affidavit of Quinto that the utterances were addressed to Judge Barcena.

In its Report,   dated March 26, 2012, the Office of the Court Administrator (OCA) recommended
15

that the evaluation of the administrative complaint be held in abeyance until after the final resolution
of the criminal case for frustrated murder filed by Judge Barcena against the respondents. It was
also recommended that Lorilla be suspended until further orders from the Court due to the strained
relationship between him and Judge Barcena.

In its Resolution,   dated July 18, 2012, the Court noted the March 26, 2012 Report of the OCA.
16

On September 17, 2012, the Court issued another Resolution   directing Executive Judge Manauis
17

to investigate the incident and to submit a report thereon and to assign Lorilla to another court
pending investigation of the incident. The Court further instructed the Clerk of Court of the RTC to
inform the Court of the status of the frustrated murder case against the respondents.

On November 27, 2012, the Court received the Manifestation  filed by Judge Oscar T. Zaldivar,
18

Vice-Executive Judge/Acting Executive Judge of the RTC, with the information that Executive Judge
Manauis had passed away and that he was inhibiting himself from conducting the investigation of the
case because Judge Barcena was his close friend.

On the same date, the Court also received the Manifestation,   submitted by Jane S. Paga, Clerk of
19

Court VI, informing the Court that the OPP had filed the Information for Direct Assault with Attempted
Murder against Lorilla by reason of the said incident.

Thus, upon the recommendation of the OCA, the Court, in its Resolution,  dated June 26, 2013,
20

referred the investigation of the incident to Judge Conrado T. Tabaco (Investigating Judge) of RTC-
Branch 9.

The Findings of the Investigating Judge

In his Report,  dated May 15, 2015, the Investigating Judge found no basis to hold Abadilla, Dupaya,
21

Rosales, and Israel administratively liable for gross insubordination and gross disrespect to judicial
authority as the theory of conspiracy had not been established and there was no showing that they
disobeyed an order or directive from Judge Barcena. With respect to Lorilla, however, the
Investigating Judge found that his act constituted grave misconduct, having deviated from the
prescribed norms of behavior demanded of court personnel, and recommended that he be
suspended for a period of six (6) months.

The Report and Recommendation of the OCA

In its Memorandum,   dated August 17, 2016, the OCA found Lorilla liable for grave misconduct but
22

dismissed the complaint against Abadilla, Dupaya and Israel for insufficiency of evidence. The OCA
was of the view that the complainant failed to prove the existence of conspiracy among the
respondents.

With respect to Rosales, the OCA opined that he should be held administratively liable for
discourtesy as it gave credence to the statement of Quinto as to the "gutter-like" remarks uttered by
Rosales at around 11:20 o'clock in the morning or immediately before the scuffle, for there could be
no other conclusion except that those words were directed towards Judge Barcena. The OCA thus
recommended that:

1. the instant complaint be RE-DOCKETED as a regular administrative matter;

2. respondent Junior Process Server James D. Lorilla, Office of the Clerk of Court, Municipal Trial
Court, Lal-lo, Cagayan, be found GUILTY of grave misconduct and be penalized
with SUSPENSION from office without pay for two (2) years, with WARNING that a repetition of the
same or similar act shall be dealt with more severely;

3. respondent Roy C. Rosales be found GUILTY of discourtesy in the course of official duties and
that he be FINED in the amount of ₱3,000.00 and WARNED that the repetition of a similar offense
shall be dealt with severely; and

4. the charges against co-respondents Clerk of Court II Thelma S. Abadilla, Cashier I Roseller O.
Israel, and Clerk IV Ulysses D. Dupaya, all of the Office of the Clerk of Court, same court,
be DISMISSED for insufficiency of evidence.

Respectfully submitted.  23

The Ruling of the Court

Liability of Abadilla, Dupaya and Israel

The Court adopts the recommendation of the OCA to dismiss the administrative complaint against
Abadilla, Dupaya and Israel for want of sufficient evidence. Judge Barcena failed to present
evidence to support his accusation against them. Other than his bare assertion that the respondents
conspired in planning and assaulting him, he failed to establish that there was indeed a community
of criminal design existing among the respondents to commit the offense. Their mere presence at
the office of Judge Barcena prior to the physical assault is not sufficient ground to hold them liable
as conspirators. The existence of conspiracy cannot be presumed.   Like the physical act
24

constituting the crime, conspiracy must be proven through clear and convincing evidence. 25
Liability of Rosales

With regard to Rosales, the Court gives him the benefit of the doubt. In administrative cases, the
quantum of proof required is substantial evidence or such evidence as a reasonable mind may
accept as adequate to support a conclusion.   The complainant has the burden of proving by
26

substantial evidence the allegations in the complaint.

In the case at bench, there was no sufficient and convincing evidence to hold Rosales
administratively liable for discourtesy.  The affidavit of Quinto was devoid of any indication that the
1âwphi1

purported derogatory remarks were directed towards Judge Barcena. It merely alleged that Quinto
heard Rosales utter the derogatory remarks on the morning of July 15, 2010 and that when he
learned that Lorilla attacked Judge Barcena, he told Peter Cusipag what he heard because the said
utterances "could have pertained to Judge Barcena." The affidavit is hereby quoted, thus:

1. On July 15, 2010, around 11:20 o'clock in the morning, I was inside the office of MTC Branch 3,
Lal-lo, playing the guitar and practicing for our number in the cultural presentation for the town fiesta
when I heard someone utter this statement: "Guyuden yun ta ikugtakugtar tay dita kanal len!" (Pull
him out and we will kick him to the canal);

2. I wanted to know who was talking so I looked out of the window and saw that it was Roy Rosales,
Clerk I of OCC, MTC, Lal-lo, Cagayan, who uttered said statement;

3. Around 12:00 o'clock noon, I went home for lunch.  When I reported back to office around 12:24
1âwphi1

o'clock in the afternoon, I was informed of the incident that James Lorilla strangled Judge Barcena
inside our office;

4. I also learned that prior to the incident when James Lorilla strangled Judge Barcena, Roy
Rosales, Ulysses Dupaya and Roseller Israel went to our office in the company of James Lorilla;

5. So when I heard what happened to Judge Barcena, I suddenly recalled the statement which Roy
Rosales uttered earlier that "Guyuden yun ta ikugtakugtar tay dita kanal len!" (Pull him out and we
will kick him to the canal);

6. I related to Peter Cusipag about the statement of Roy Rosales which I heard as I thought that the
statement could have pertained to Judge Barcena; and

7. I attest to the veracity of the foregoing averments. 27

Liability of Lorilla

With respect to Lorilla, the Court agrees with the findings of the OCA that his actuations constituted
grave misconduct.

Misconduct is a transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, unlawful behavior, willful in character, improper or wrong behavior.   Any
28

transgression or deviation from the established norm of conduct, work-related or not, amounts to
misconduct.  The misconduct is grave if it involves any of the additional elements of corruption,
29

willful intent to violate the law, or to disregard established rules, which must be established by
substantial evidence. 30
In the present case, Lorilla denied that he assaulted Judge Barcena. He claimed that it was Judge
Barcena who lambasted him with the use of insidious and insulting words and suddenly pushed him
away. He explained that he merely pulled the hands of Judge Barcena as he was about to lose his
balance when the former pushed him. This claim, however, was refuted by the sworn statements of
Avelina S. Evangelista (Evangelista) and Pedro U. Cusipag (Cusipag).   Both Evangelista and
31 32

Cusipag narrated that Judge Barcena went out of his chamber and asked Lorilla to call Abadilla but
instead of complying, he pointed his finger towards Judge Barcena and confronted him in an angry
and menacing manner. Thereafter, he forcibly grabbed Judge Barcena and arm-locked his neck and
body.

Without a doubt, Lorilla failed to live up to the ethical norm expected of him as an employee of the
Judiciary. Shouting at Judge Barcena and physically assaulting him within the court premises in the
presence of the court employees clearly exhibit rudeness and disrespect not only towards him but to
the court as well. Granting that he was provoked by Judge Barcena's uncouth behavior, his conduct
remains inexcusable. Court employees are expected to be well-mannered, civil and considerate in
their actuations, both in their relations with co-workers and the transacting public. Boorishness, foul
language and any misbehavior in court premises must always be avoided. 33

Time and again, the Court has stressed that fighting or misunderstanding is a disgraceful sight
reflecting adversely on the good image of the Judiciary.   It displays a cavalier attitude towards the
34

seriousness and dignity with which court business should be treated.   Professionalism, respect for
35

the rights of others, good manners, and right conduct are expected of all judicial officers and
employees.   Their behavior and actuations must be characterized by propriety and decorum and
36

should at all times embody prudence, restraint, courtesy and dignity. 37

Under Section 46 (A) (3), Rule 10 of the Revised Rules on Administrative Cases in Civil Service,
grave misconduct is a grave offense punishable by dismissal even for the first offense. In the present
case, the Court notes that this is not the first time that Lorilla was found administratively liable. In the
case of Aquino v. Israel,   he was found liable for misconduct and fined in the amount of ₱l,000.00
38

for punching a co-employee. He seemed undeterred despite the earlier warning that any repetition of
similar infraction would be dealt with more severely. Given the foregoing, the recommended penalty
of suspension for a period of two years is insufficient. The Court imposes upon him the supreme
penalty of dismissal. He has no place in the Judiciary.

On a final note, the Court is not unaware of the heavy case load of the first level courts but this
incident could have been avoided if proper communication was made to each and every office under
Judge Barcena's supervision. Judge Barcena is advised to implement a more efficient and
systematic approach in the supervision of employees within his administrative area like keeping a
schedule of signing documents. He is also reminded that courtesy is likewise expected of him, in his
conduct and language, towards his subordinates. Needless to state, the use of vile and demeaning
words should be completely avoided.

WHEREFORE, finding James D. Lorilla, Junior Process Server, Office of the Clerk of Court,
Municipal Trial Court, Lal-lo, Cagayan, GUILTY of Grave Misconduct, the Court hereby orders
his DISMISSAL from the service with FORFEITURE of all benefits, except accrued leave credits,
and with prejudice to reemployment in any branch or instrumentality of the government including
government-owned or controlled corporations.

The complaint against Thelma S. Abadilla, Clerk of Court II; Roseller O. Israel, Cashier I; Ulysses D.
Dupaya, Clerk IV; and Roy Rosales, Clerk III, all of Office of the Clerk of Court, Municipal Trial Court,
Lal-lo, Cagayan, is DISMISSED for insufficiency of evidence.
SO ORDERED.

MARIA LOURDES P.A. SERENO

Chief Justice
Chairperson

FIRST DIVISION

A.C. No. 11165, February 06, 2017

ORLANDO S. CASTELO, ELENA C. CAMA, OSWALDO CASTELO, JOCELYN

LLANILLO, AND BENJAMIN CASTELO, Complainants, v. ATTY. RONALD
SEGUNDINO C. CHING, Respondent.

DECISION

CAGUIOA, J.:

A notarized document is entitled to full faith and credit upon its face. Thus, a notary
public should observe utmost care in performing his duties to preserve public
confidence in the integrity of notarized documents.1

The salient facts, as borne by the records, are:

Sometime in late 2013, Complainants Orlando S. Castelo, Elena C. Cama, Oswaldo

Castelo, Jocelyn Llanillo, and Benjamin Castelo (Castelo heirs) received summons from
the Metropolitan Trial Court, Branch 22, Manila (MeTC) for an ejectment case2 filed
against them by Leonida Delen and Spouses Nestor Delen and Julibel Delen (the
Delens), who alleged that they were the owners of the house and lot located at 2511 A.
Sulu Street, Sta. Cruz, Manila (subject property). The subject property was then the
residence of the Castelo heirs,3 and was covered by Transfer Certificate of Title (TCT)
No. 291223 of the Registry of Deeds for the City of Manila (RD) in the name of the
Delens.4

Upon verifying the authenticity of TCT No. 291223 with the RD, the Castelo heirs
discovered that the previous title covering the subject property, TCT No. 240995, which
was in the name of the Castelo heirs' parents, Spouses Benjamin Castelo and
Perzidia5 S. Castelo (Spouses Castelo), had been cancelled6 by virtue of a Deed of
Absolute Sale dated March 24, 2010 (Deed).7 The Deed was purportedly executed by
the Spouses Castelo and the Delens, and was notarized by Respondent Atty. Ronald
Segundino C. Ching (Atty. Ching), despite the fact that Perzidia S. Castelo died on May
4, 2009,8 as shown in her Death Certificate.9 The Castelo heirs also learned that the
acknowledgment page of the Deed showed that only community tax certificates had
been presented to Atty. Ching, and not valid government issued identification cards as
required by the 2004 Rules on Notarial Practice.10

With this discovery, the Castelo heirs filed on June 2, 2014 with the Integrated Bar of
the Philippines (IBP) this administrative case against Atty. Ching based on the latter's
gross negligence in notarizing the Deed.11

Atty. Ching, for his part, denied having notarized the Deed. He countered that he did
not know the Spouses Castelo and the Delens, and that the Deed presented by the
Castelo heirs had been falsified. Atty. Ching continued that his purported signature in
the Deed was forged.12 To prove the alleged forgery, Atty. Ching presented specimens
of his signatures that he used in signing pleadings and notarizing documents.13

At the scheduled mandatory conference on September 1, 2014,14the Castelo heirs and

Atty. Ching were present.15 The Castelo heirs moved for the issuance of an Ex-
Parte Motion for Issuance of Subpoena Duces Tecum and Ad Testificandum16 to Atty.
Jennifer H. Dela Cruz-Buendia, the Clerk of Court and Ex-Officio Sheriff of the Regional
Trial Court (RTC) of Manila, or any of her duly authorized records officers, to appear at
the next scheduled mandatory conference with Books No. 16 and 17, Series of 2010 of
the Notarial Register (Atty. Ching's notarial books), which allegedly contained the
original copy of the Deed. The IBP issued the subpoena,17 and the mandatory
conference was reset to November 13, 2014.18

In the November 13, 2014 resetting of the mandatory conference which was the
last,19 Atty. Ching's notarial books were presented.20 However, Atty. Ching failed to
attend the said conference and refute the authenticity of the Deed. Upon verification,
the IBP concluded that the copy of the Deed presented by the Castelo heirs in their
Complaint was indeed a faithful machine copy of the original contained in Atty. Ching's
notarial books.21 Thereafter, the Castelo heirs submitted their position paper.22 Atty.
Ching, however, failed to submit his.

After due proceedings, Commissioner Eduardo R. Robles (Commissioner Robles)

rendered a Report and Recommendation23 on December 3, 2014, finding that Atty.
Ching was grossly negligent in notarizing the Deed.24 The dispositive portion reads:

UPON THE FOREGOING, considering the seriousness of the consequences of

respondent's gross negligence, it is recommended that respondent's notarial
commission be cancelled immediately, and that he be disqualified from ever being
commissioned again as notary public.25
In its Resolution26 dated February 21, 2015, the IBP Board of Governors resolved to
adopt and approve with modification the said Report and Recommendation, thus: chanRoblesvirtualLawlibrary

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with

modification, the Report and Recommendation of the Investigating Commissioner in
the above-entitled case, herein made part of this Resolution as Annex "A", for gross
negligence in Respondent's notarial service. Hence, Atty. Ronald Segundino C. Ching's
notarial commission if presently commissioned is immediately REVOKED. Further, he
is PERPETUALLY DISQUALIFIED from being commissioned as Notary Public and
SUSPENDED from the practice of law for six (6) months.27
After a judicious examination of the records and submission of the parties, the Court
has no compelling reason to diverge from the factual findings of Commissioner Robles
and the recommended penalty of the IBP Board of Governors.

Gross negligence on the part of a notary public encompasses the failure to observe any
of the requirements of a notarial act under the 2004 Rules on Notarial Practice which
would result in putting the rights of a person to his liberty or property in jeopardy. This
includes, among others, failing to require the presence of the signatories to a notarial
instrument and ascertaining their identities through competent evidence thereof,28 and
allowing, knowingly or unknowingly, people, other than the notary public himself, to
sign notarial documents, affix the notarial seal therein, and make entries in the notarial
register.29

In Spouses Santuyo v. Hidalgo,30 the Court ruled that Atty. Hidalgo was grossly
negligent not only in the supposed notarization of a deed of sale of a parcel of land
purchased by the Spouses Santuyo, but also in allowing his office secretaries to make
the necessary entries in his notarial registry which was supposed to be done and kept
by him alone. This resulted in an ownership dispute between the Spouses Santuyo and
a certain Danilo German which led to the filing of a case of estafa through falsification
of a public document against the Spouses Santuyo, thus: chanRoblesvirtualLawlibrary

After going over the evidence submitted by the parties, complainants did not
categorically state that they appeared before respondent to have the deed of sale
notarized. Their appearance before him could have bolstered this allegation that
respondent signed the document and that it was not a forgery as he claimed. The
records show that complainants themselves were not sure if respondent, indeed, signed
the document; what they were sure of was the fact that his signature appeared
thereon. They had no personal knowledge as well as to who actually affixed the
signature of respondent on the deed.

Furthermore, complainants did not refute respondent's contention that he only met
complainant Benjamin Santuyo six years after the alleged notarization of the deed of
sale. Respondent's assertion was corroborated by one Mrs. Lyn Santy in an affidavit
executed on November 17, 2001 wherein she stated that complainant Editha Santuyo
had to invite respondent to her house on November 5, 1997 to meet her husband since
the two had to be introduced to each other. The meeting between complainant
Benjamin Santuyo and respondent was arranged after the latter insisted that Mr.
Santuyo personally acknowledge a deed of sale concerning another property that the
spouses bought.

In finding respondent negligent in performing his notarial functions, the IBP reasoned
out:chanRoblesvirtualLawlibrary

xxxx

Considering that the responsibility attached to a notary public is sensitive respondent

should have been more discreet and cautious in the execution of his duties as such and
should not have wholly entrusted everything to the secretaries; otherwise he should not
have been commissioned as notary public.

For having wholly entrusted the preparation and other mechanics of the document for
notarization to the secretary there can be a possibility that even the respondent's
signature which is the only one left for him to do can be done by the secretary or
anybody for that matter as had been the case herein.

As it is respondent had been negligent not only in the supposed notarization but
foremost in having allowed the office secretaries to make the necessary entries in his
notarial registry which was supposed to be done and kept by him alone; and should not
have relied on somebody else.31
In this case, Commissioner Robles observed that while Atty. Ching denied having
notarized the Deed32 by showing the discrepancy between his purported signature
therein33 and the specimen signatures34 he submitted in his Answer, he miserably failed
to explain how the Deed ended up in his notarial books. Commissioner Robles
concluded that while it would not be fair to conclude that Atty. Ching actually signed the
Deed, he was nonetheless grossly negligent for failing to give a satisfactory reason why
a supposedly forged Deed was duly recorded in his notarial books.35

The Court completely agrees with Commissioner Robles' observation. While there may
be reasons to give Atty. Ching the benefit of the doubt as to who signed the Deed, the
Court does not and cannot lose sight of the fact that Atty. Ching still failed in ensuring
that only documents which he had personally signed and sealed with his notarial seal,
after satisfying himself with the completeness of the same and the identities of the
parties who affixed their signatures therein, would be included in his notarial register.
This also means that Atty. Ching failed to properly store and secure his notarial
equipment in order to prevent other people from notarizing documents by forging his
signature and affixing his notarial seal, and recording such documents in his notarial
books, without his knowledge and consent. This is gross negligence.

Such gross negligence on the part of Atty. Ching in letting another person notarize the
Deed had also unduly put the Castelo heirs in jeopardy of losing their property. To
make matters worse, the real property subject of the Deed was the residence, nay, the
family home of the Castelo heirs, a property that their parents had worked hard for in
order to provide them and their children a decent shelter and the primary place where
they could bond together as a family - a property which had already acquired
sentimental value on the part of the Castelo heirs, which no amount of money could
ever match. One can just imagine the pain and anguish of losing a home to
unscrupulous people who were able to transfer title to such property and file a case in
court in order to eject them - all because of the negligence of a notary public in keeping
his notarial books and instruments from falling into the wrong hands.

This is not to say, however, that the Court has ruled on whether or not the Deed in this
case was indeed forged. Such issue is civil, and perhaps criminal, in nature which
should be passed upon in a proper case, and not in an administrative or disciplinary
proceeding such as this case.36

As for the penalty to be imposed, and taking into account the possible undue
deprivation of property on the part of the Castelo heirs as a result of Atty. Ching's gross
negligence, the Court agrees with, and hereby adopts, the recommended penalty of the
IBP.

As a final note, this case should serve as a reminder for notaries public, as well as for
lawyers who are applying for a commission, that the duty to public service and to the
administration of public justice is the primary consideration in the practice of law.37 This
duty to public service is made more important when a lawyer is commissioned as a
notary public. Like the duty to defend a client's cause within the bounds of law, a
notary public has the additional duty to preserve public trust and confidence in his
office38 by observing extra care and diligence in ensuring the integrity of every
document that comes under his notarial seal, and seeing to it that only documents that
he personally inspected and whose signatories he personally identified are recorded in
his notarial books. In addition, notaries public should properly secure the equipment
they use in performing notarial acts, in order for them not to fall into the wrong hands,
and be used in acts that would undermine the public's trust and confidence in the office
of the notary public.

WHEREFORE, Atty. Ronald Segundino C. Ching is found GUILTY of gross negligence in

the performance of his duties as notary public. His existing notarial commission, if any,
is hereby REVOKED, and he is also PERPETUALLY DISQUALIFIED from being
commissioned as a notary public. Moreover, he is hereby SUSPENDED FROM THE
PRACTICE OF LAW FOR SIX (6) MONTHS. He is STERNLY WARNED that a
repetition of the same or similar act will be dealt with more severely.

Atty. Ching is also DIRECTED to inform the Court of the date of his receipt of this
Decision to determine the reckoning point of the effectivity of his suspension.

Let a copy of this Decision be made part of Atty. Ching's records in the Office of the Bar
Confidant, and copies be furnished the Integrated Bar of the Philippines and the Office
of the Court Administrator for circulation to all courts.

SO ORDERED.

Sereno, C. J., (Chairperson), Leonardo-De Castro, Del Castillo, and Perlas-Bernabe, JJ.,

concur.
 En Banc

March 7, 2017

G.R. No. 197762

CAREER EXECUTIVE SERVICE BOARD represented by CHAIRPERSON BERNARDO P.

ABESAMIS, EXECUTIVE DIRECTOR MA. ANTHONETTE VELASCO-ALLONES, and DEPUTY
EXECUTIVE DIRECTOR ARTURO M. LACHICA, Petitioner
vs
CIVIL SERVICE COMMISSION represented by CHAIRMAN FRANCISCO T. DUQUE III AND
PUBLIC ATTORNEY'S OFFICE, CHIEF PUBLIC ATTORNEY PERSIDA V. RUEDA-ACOSTA,
DEPUTY CHIEF PUBLIC ATTORNEYS MACAPANGCAT A. MAMA, SYLVESTRE A. MOSING,
REGIONAL PUBLIC ATTORNEYS CYNTHIA M. VARGAS, FRISCO F. DOMALSIN, TOMAS B.
PADILLA, RENATO T. CABRIDO, SALVADOR S. HIPOLITO, ELPIDIO C. BACUYAG,
DIOSDADO S. SAVELLANO, RAMON N. GOMEZ, MARIE G-REE R. CALINAWAN, FLORENCIO
M. DILOY, EDGARDO D. GONZALEZ, NUNILA P. GARCIA, FRANCIS A. CALATRAVA,
DATUMANONG A. DUMAMBA, EDGAR Q. BALANSAG, PUBLIC ATTORNEY IV MARVIN R.
OSIAS, PUBLIC ATTORNEY IV HOWARD B. AREZA, PUBLIC ATTORNEY IV IMELDA C.
ALFORTE-GANANCIAL, Respondents

DECISION

SERENO, CJ.:

The dispute in this case concerns the classification of certain positions in the Public Attorney's Office
(PAO).The Court is asked to determine, in particular, whether these positions are properly included
in the Career Executive Service (CES); and whether the occupants of these positions must obtain
third-level eligibility to qualify for permanent appointment. To resolve these questions, the Court
must also delineate the respective jurisdictions granted by law to the competing authorities involved
in this case - the Civil Service Commission (CSC) and the Career Executive Service Board (CESB).

FACTUAL ANTECEDENTS

In this Petition for Certiorari and Prohibition,  the CESB  seeks the reversal of the Decision  and
1 2 3

Resolution  of the CSC declaring that (a) it had the jurisdiction to resolve an appeal from a CESB
4

Resolution  refusing to declassify certain positions in PAO; and (b) the PAO positions involved in the
5

appeal do not require third-level eligibility.

The facts leading to the controversy are not in dispute.

On 24 September 2010, the PAO received a copy of the CESB Report on the CES Occupancy of the
Department of Justice (DOJ).  This document stated, among others, that out of 35 filled positions in
6

the PAO, 33 were occupied by persons without the required CES eligibility.

In response to the report, PAO Deputy Chief Public Attorney Silvestre A. Mosing (Deputy Chief
Mosing) sent a letter  to CESB Executive Director Maria Anthonette V. Allones. He informed her that
7

the positions of Chief Public Attorney, Deputy Chief Public Attorneys, and Regional Public Attorneys
(subject positions) were already permanent in nature pursuant to Section 6  of Republic Act No.
8

(R.A.) 9406, which accorded security of tenure to the occupants thereof.

A second letter dated 9 November 2010  was sent to the CESB by Deputy Chief Mosing to reiterate
9

its earlier communication. The letter also contained supplementary arguments in support of the
assertion that the subject positions were permanent posts; hence, their occupants may only be
removed for cause provided by law. Based on the foregoing premises, the PAO requested the
deletion of its office from the Data on CES Occupancy for the Department of Justice (DOJ).

On 18 November 2010, the PAO received the reply sent to Deputy Chief Mosing by the CESB,
through Deputy Executive Director Arturo M. Lachica.  The latter informed Deputy Chief Mosing that
10

the CESB would conduct a position classification study on the specified PAO positions to determine
whether they may still be considered CES positions in the DOJ.

The DOJ Legal Opinion

While the matter was pending, PAO Deputy Chief Mosing wrote a letter to then DOJ Secretary Leila
M. de Lima to inform her about the communications sent by the PAO to the CESB.  He also
11

reiterated the PAO's opinion that the subject positions must be considered permanent in nature, and
not subject to CES requirements. 12

In a letter  sent to Chief Public Attorney Persida V. Rueda-Acosta on 3 January 2011, Chief State
13

Counsel Ricardo V. Paras III elucidated the legal opinion of the DOJ on the matter:

Based on the foregoing, your claim that the appointments of the top-level officials of the PAO are
permanent is without merit. For one, the positions of the Chief Public Attorney, Deputy Chief Public
Attorney and Regional Public Attorneys are part of the CES. xxx

xxxx

Secondly, since the Chief Public Attorney, Deputy Chief Public Attorneys and Regional Public
Attorneys are occupying CES positions, it is required by law that they should be CES eligibles to
become permanent appointees to the said position. x x x.

xxxx

This leads to the inevitable conclusion that the appointments of the Chief Public Attorney, Deputy
Chief Public Attorneys and Regional Public Attorneys are not permanent, despite your claims to the
contrary, considering that they do not possess the required CES eligibility for the said positions. As
such, they cannot invoke their right to security of tenure even if it was expressly guaranteed to them
by the PAO Law.

xxxx
Considering that the appointments of the Chief Public Attorney, Deputy Chief Public Attorneys and
Regional Public Attorneys are temporary, they are required to subsequently take the CES
examination. In the absence of any evidence that would show compliance with the said condition, it
is presumed that the top-level officials of the PAO are non-CES eligibles; therefore they may be
removed from office by the appointing authority without violating their constitutional and statutory
rights to security of tenure.
14

The DOJ also noted that the permanent nature of an appointment does not automatically translate to
an exemption from CES coverage, as it is only the CESB that has the authority to exempt certain
positions from CES requirements.  The DOJ further rejected the claim that the occupants of the
15

subject positions were exercising quasi-judicial functions. It explained that while the lawyers of the
PAO regularly conduct mediation, conciliation or arbitration of disputes, their functions do not entail
the rendition of judgments or decisions - an essential element of the exercise of quasi-judicial
functions.16

The CSC Legal Opinion

It appears that while waiting for the CESB to respond to its letters, the PAO wrote to the CSC to
request a legal opinion on the same matter.  The PAO thereafter informed the CESB of the former's
17

decision to seek the opinion and requested the latter to issue no further opinion or statement, oral or
written, relative to the qualifications of the PAO officials.
18

On 7 January 2011, the CSC issued the requested legal opinion.  Citing its mandate as an
19

independent constitutional commission and its authority under the Administrative Code to "render
opinions and rulings on all personnel and other civil service matters," the CSC declared that third-
level eligibility is not required for the subject positions in the PAO:

The law is explicit that the positions [of] Chief Public Attorney, Deputy Chief Public Attorney and
Regional Public Attorney in PAO shall have the same qualifications for appointment, among other
things, as those of the Chief State Prosecutor, Assistant Chief State Prosecutor and Regional State
Prosecutor, respectively. These, of course include, the eligibility requirement for these positions. x x
x.

xxxx

The Prosecution Service Act of 2010 explicitly provides that the Prosecutor General (the retitled
position of Chief State Prosecutor) has the same qualifications for appointment, among other things,
as those of the Presiding Justice of the Court of Appeals (CA). Further, the Senior Deputy State
Prosecutor and the Regional Prosecutor have the same qualifications as those of an associate
justice of the CA. x x x.

xxxx

No less than the Constitution provides that justices and judges in the judiciary are required, among
other things, practice of law as requirement for appointment thereto. Pointedly, the Presiding Justice
and the Associate Justice of the Court of Appeals (CA) have the same qualifications as those
provided for in the Constitution for Justices of the Supreme Court[,] which includes, among other
requirements, practice of law. This means that the Constitution and the Civil Service Law prescribe
RA 1080 (BAR) as the appropriate civil service eligibility therefor. Accordingly, any imposition of a
third-level eligibility (e.g. CESE, CSEE) is not proper, if not, illegal under the circumstances. In fact,
even in the 1997 Qualification Standards Manual of the Commission, all of these positions require
RA 1080 BAR eligibility for purposes of appointment.
 xxxx

Thus, it is the Commission's op1mon that for purposes of permanent appointment to the positions of
Chief Public Attorney, Deputy Chief Public Attorney and Regional Public Attorney, no thirdlevel
eligibility is required but only RA 1080 (BAR) civil service eligibility.
20

CESB Resolution No. 918

On 12 January 2011, the CESB issued Resolution No. 918  (CESB Resolution No, 918) denying the
21

PAO's request to declassify the subject positions. Citing the Position Classification Study  submitted
22

by its secretariat, the CESB noted that the positions in question "require leadership and managerial
competence"  and were thus part of the CES. Hence, the appointment of persons without third-level
23

eligibility for these posts cannot be considered permanent. The CESB explained:

WHEREAS, pursuant to its mandate to identify positions of equivalent rank as CES positions, the
Secretariat revisited its previous classification as part of the CES [ ofj the above positions of PAO
and conducted a position classification of the above positions and arrived at the following findings:

1. The positions of Chief Public Attorney, Deputy Chief Public Attorneys, Regional Public Attorneys
and Assistant Regional Public Attorneys who are all presidential appointees fall within the criteria set
under CESB Resolution No. 299, s. 2009, namely:

a. The position is a career position;

b. The position is above division chief level;

c. The duties and responsibilities of the position require the performance of executive or
managerial functions.

2. While Section 3 of Republic Act 9406 which provides that:

SEC. 3. A new Section 14-A, is hereby inserted in Chapter 5, Title III, Book IV of Executive Order
No. 292, otherwise known as the "Administrative Code of 1987", to read as follows:

"SEC. 14-A Powers and Functions. - The PAO shall independently discharge its mandate to render,
free of charge, legal representation, assistance, and counselling to indigent persons in criminal, civil,
labor, administrative and other quasi-judicial cases. In the exigency of the service, the PAO may be
called upon by proper government authorities to render such service to other persons, subject to
existing laws, rules and regulations."

The aforecited provision does not limit the mandate of PAO to perform only non-executive functions.
All that the aforecited provision states is that the PAO is mandated to render legal representation,
assistance and counseling to indigent persons in criminal, civil, labor, administrative and other quasi-
judicial cases, free of charge. Notably, the positions of Chief Public Attorney, Deputy Chief Public
Attorney, Regional Public Attorneys and Assistant Regional Public Attorneys evidently require
leadership and managerial competence.

xxxx

WHEREAS, it is undisputed that the subject pos1t10ns are CES in nature and as such, the eligibility
requirement for appointment thereto is CES eligibility.
With regard to the question of its jurisdiction over the matter as against that of the CSC, the CESB
stated:

WHEREAS, under Section 8, Chapter 2, Book V of EO 292, it is the Board which has the mandate
over Third-level positions in the Career Service and not the CSC. Section 8, Chapter 2, Book V of
EO 292 provides:

Section 8. Classes of Positions in the Civil Service. - (l) Classes of positions in the career service,
appointment to which requires examinations shall be grouped into three major levels as follows:

xxxx

(c) The third-level shall cover positions in the Career Executive Service.

(2) x x x Entrance to the third-level shall be prescribed by the Career Executive Service Board.

WHEREAS, in the case of De Jesus v. People, G.R. No. 61998, February 22, 1983, 120 SCRA 760,
the Supreme Court ruled that "where there are two acts, one of which is special and particular and
the other general which, if standing alone, would include the same matter and thus conflict with the
special act, the special must prevail since it evinces the legislative intent more clearly than that of a
general statute and must be taken as intended to constitute an exception to the general act."

WHEREAS, following the above-cited rule, it is clear that Section 8, Chapter 2, Book V of EO 292 is
the exception to [the] general act pertaining to the authority of the CSC;

xxxx

WHEREAS, it is clear that the mandate of the Board is in accordance with existing laws and
pertinent jurisprudence on matters pertaining to the CES[.] 24

Aggrieved by the CESB Resolution, the PAO filed a Verified Notice of Appeal  and an Urgent Notice
25

of Appeal  with the CSC.

26

PROCEEDINGS BEFORE THE CSC

Before the CSC, the PAO assailed CESB Resolution No. 918 on the following grounds: (a) the
resolution was rendered contrary to R.A. 9406 in relation to R.A. 10071,  the 1987 Constitution and
27

the CSC letter-opinion; and (b) the CESB usurped the legislative function of Congress when the
former required additional qualifications for appointment to certain PAO positions. The PAO likewise
asserted that its appeal had been brought to the CSC, because the latter had the power to review
decisions and actions of one of its attached agencies - the CESB.

In an Order  dated 17 January 2011, the CSC directed the CESB to comment on the appeal.
28

Instead of submitting a comment, however, the CESB filed a Motion for Clarification  to assail the
29

authority of the CSC to review its Decision. It asserted that the CSC had no jurisdiction to decide the
appeal given that (a) the appeal involved a controversy between two government entities regarding
questions of law;  and (b) the CESB was an autonomous agency whose actions were appealable to
30

the Office of the President.  In addition, the CESB emphasized the inability of the CSC to render an
31

unbiased ruling on the case, considering the latter's previous legal opinion on the appropriate
eligibility for key positions in the PA0.
32
In a Decision  dated 15 February 2011, the CSC granted the appeal and reversed CESB Resolution
33

No. 918.

As a preliminary matter, the CSC ruled that it could assume jurisdiction over the appeal, which
involved the employment status and qualification standards of employees belonging to the civil
service. It was supposedly a matter falling within its broad and plenary authority under the
Constitution and the Administrative Code. The CSC also declared that the authority of the CESB
over third-level employees was limited to the imposition of entry requirements and "should not be
interpreted as cutting off the reach of the Commission over this particular class of
positions."  Moreover, the CESB was declared subject to the revisory power of the CSC, given that
34

an attached office is not entirely and totally insulated from its mother agency.  With respect to the
35

provision in the Integrated Reorganization Plan  on appeals from the CESB to the Office of the
36

President, the CSC construed this requirement as pertaining only to disciplinary proceedings. 37

On the merits, the CSC ruled in favor of the PAO officials. It declared that the CESB would be in
violation of R.A. 9406 if the latter would require an additional qualification - in this case, third-level
eligibility - for purposes of permanent appointments to certain PAO positions:

The foregoing elaboration shows the qualifications of the subject PAO positions under the existing
laws. It is gleaned that nowhere in these laws is there a reference to third-level eligibility and CESO
rank as qualification requirements for attaining tenurial security. All that the laws uniformly prescribe
for the positions in question is practice of law for certain period of time, which presupposes a bar
license. This being the case, the CESB cannot, in the guise of enforcing and administering the
policies of the third-level, validly impose qualifications in addition to what the laws prescribe. It
cannot add another layer of qualification requirement which is not otherwise specified in the statutes.
As an administrative agency, the CESB can only promulgate rules and regulations which must be
consistent with and in harmony with the provisions of the laws, and it cannot add or subtract thereto.
Most evidently, therefore, in promulgating the assailed resolution, which sets out additional
qualifications for the subject positions in the PAO, the CESB has overstepped the bounds of its
authority. x x x.

In so saying, the Commission does not lose sight of the power of the CESB to identify other
positions equivalent to those enumerated in the Administrative Code of 1987 as being part of the
third-level or CES for as long as they come within the ambit of the appointing prerogative of the
President. Yet, such grant of authority is derived from a general law (the Administrative Code) and
hence, it must be deemed circumscribed or qualified by the special law governing the PAO.
Reiteratively, the PAO Law, in conjunction with other laws, merely fixes practice of law as the
principal qualification requirement for the positions of Acosta, et al.

WHEREFORE, foregoing premises considered, the instant appeal is hereby GRANTED.

Accordingly, the CESB Resolution No. 918 dated Jnaury 12, 2011 is REVERSED and SET ASIDE
for not being in conformity with law and jurisprudence. It is declared that the following key positions
in the Public Attorney's Office do not require third-level eligibility and CESO rank for purposes of
tenurial security:

1. Chief Public Attorney;

2. Deputy Chief Public Attorneys;

3. Regional Public Attorneys; and

4. Assistant Regional Public Attorneys. 38

The CESB sought reconsideration of the Decision, but its motion was denied. 39

PROCEEDINGS BEFORE THIS COURT

On 9 August 2011, the CESB filed the instant Petition  imputing grave abuse of discretion to
40

respondent CSC. It asserts that (a) the CSC has no jurisdiction to review the Resolution of the
CESB, given the latter's autonomy as an attached agency; (b) CESB Resolution No. 918 should
have been appealed to the Office of the President, and not to the CSC, in accordance with Article IV,
Part III of the Integrated Reorganization Plan. The subject PAO positions are supposedly part of the
CES, based on criteria established by the CESB.  These criteria were set pursuant to the latter's
41

power to identify positions belonging to the third-level of the civil service and to prescribe the
requirements for entry thereto. The Petition further reiterates the alleged inability of the CSC to
decide the case with impartiality.

In its Comment,  the CSC contends that the Petition filed by the CESB before this Court should be
42

dismissed outright for being an improper remedy and for violating the hierarchy of courts. The CSC
further asserts its jurisdiction over the PAO's appeal from the CESB Resolution in this case. Citing its
mandate as the central personnel agency of the government based on the 1987 Constitution and the
Administrative Code, the CSC insists that it has broad authority to administer and enforce the
constitutional and statutory provisions on the merit system for all levels and ranks of the civil service.
This authority allegedly encompasses the power to review and revise the decisions and actions of
offices attached to it, such as the CESB. It also claims that the present dispute involves a personnel
action that is within its jurisdiction.

Respondents PAO and its officials have also filed their own Comment  on the Petition. They assert
43

that (a) the Petition should be dismissed outright as it is tainted with serious procedural and
jurisdictional flaws; (b) the CSC properly exercised its jurisdiction when it resolved the appeal in this
case; and (c) CESB Resolution No. 918 contravened R.A. 9406 in relation to the 1987 Constitution,
R.A. 10071 and the CSC letteropinion dated 7 January 2011.

Because the instant case involves the contradictory views of two government offices, the Court
likewise required the Office of the Solicitor General (OSG) to comment on the matter as the lawyer
of the government tasked to uphold the best interest of the latter.

On 28 February 2012, the OSG filed the required Comment.  On the issue of jurisdiction, it supports
44

the view of the CSC and the PAO. It cites the Constitution and the Administrative Code as the
sources of the authority of the CSC to review rulings of the CESB, particularly with regard to
personnel matters such as the reclassification of positions.

As to the merits of the case, the OSG asserts that the subject positions in the PAO should be
declassified from the CES. It points out that the primary function of these PAO officials -- the
provision of legal assistance to the indigent - is specialized in nature; in contrast, their managerial
functions are merely incidental to their role. The OSG further contends that the manifest intent of the
law is to require PAO officials to have the same qualifications as their counterpmis in the National
Prosecution Service (NPS). Consequently, the OSG argued that the decision of the CESB to
declassify certain posts in the NPS should have likewise resulted in the declassification of the
corresponding positions in the PAO.

In its Reply to the Comment of the OSG,  the CESB urges the Court to adhere to the alleged
45

limitations on the general authority of the CSC over all matters concerning the civil service. In
particular, the CESB asserts its specific and exclusive mandate to administer all matters pertaining
to the third-level of the career service. Included in these matters is the power to promulgate rules,
standards and procedures for the selection, classification, compensation and career development of
its members. Moreover, the CESB insists that it is an agency within the Executive Department under
the Integrated Reorganization Plan; hence, its decisions are appealable only to the Office of the
President. Lastly, the CESB maintains that the subject positions properly belong to the CES,
considering that executive and managerial functions must be exercised by the occupants thereof.

ISSUES

The following issues are presented for resolution:

(1) Whether a petition for certiorari and prohibition was the proper remedy to question the assailed
CSC Decision and Resolution

(2) Whether the CSC had the jurisdiction to resolve the appeal filed by the PAO and to reverse
CESB Resolution No. 918

(3) Whether the CSC acted in accordance with law when it reversed the CESB and declared that
third-level eligibility is not required for occupants of the subject PAO positions

OUR RULING

We DENY the Petition.

At the outset, we note that the CESB availed itself of an improper remedy to challenge the ruling of
the CSC. In any event, after a judicious consideration of the case, we find that the CSC acted within
its jurisdiction when it resolved the PAO's appeal and reversed CESB Resolution No. 918. The CSC
also correctly ruled that third-level eligibility is not required for the subject positions.

A petition for certiorari and prohibitinn is

not the appropriate remedy to challenge
the ruling of the CSC.

As a preliminary matter, this Court must address the objections of respondents to the remedy
availed of by the CESB to question the ruling of the CSC.

Respondents contend that the Petition for Certiorari and Prohibition filed by the CESB before this
Court was improper, because the remedy of appeal was available via a petition for review under
Rule 43. On the other hand, the CESB insists that a Rule 65 petition is proper, because it is
disputing the authority and jurisdiction of the CSC.

We find in favor of respondents.

It is settled that a resort to the extraordinary remedies of certiorari and prohibition is proper only in
cases where (a) a tribunal, a board or an officer exercising judicial or quasi-judicial functions has
acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; and (b) there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law. Rule 65 of the Rules of Civil Procedure requires the concurrence of both
these requisites:

Section l. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that judgment be rendered
annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental
reliefs as law and justice may require. 1âwphi1

The petition shall be accompanied by a certified true copy of the judgment, order or resolution
subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn
certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46.

Section 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board, officer
or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess
of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction,
and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment he rendered commanding the respondent to desist from further
proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as
law and justice may require.

The petition shall likewise be accompanied by a certified true copy of the judgment, order or
resolution subject thereof copies of all pleadings and documents relevant and pertinent thereto, and
a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46.
(Emphasis supplied)

In this case, the second requirement is plainly absent. As respondents correctly observed, there was
an appeal available to the CESB in the form of a petition for review under Rule 43 of the Rules of
Civil Procedure. Section 1 of Rule 43 specifically provides for appeals from decisions of the CSC:

Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of
Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-
judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil
Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission,
Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics
Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification
Administration, Energy Regulatory Board, National Telecommunications Commission, Department of
Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees
Compensation Commission, Agricultural Invention Board, Insurance Commission, Philippine Atomic
Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and
voluntary arbitrators authorized by law.

xxxx

Section 5. How appeal taken. - Appeal shall be taken by filing a verified petition for review in seven
(7) legible copies with the Court of Appeals, with proof of service of a copy thereof on the adverse
party and on the court or agency a quo. The original copy of the petition intended for the Court of
Appeals shall be indicated as such by the petitioner.

Upon the filing of the petition, the petitioner shall pay to the clerk of court of the Court of Appeals the
docketing and other lawful fees and deposit the sum of ₱500.00 for costs. Exemption from payment
of docketing and other lawful fees and the deposit for costs may be granted by the Court of Appeals
upon a verified motion setting forth valid grounds therefor. If the Court of Appeals denies the motion,
the petitioner shall pay the docketing and other lawful fees and deposit for costs within fifteen (15)
days from notice of the denial. (Emphasis supplied)

In an attempt to justify its resort to certiorari and prohibition under Rule 65, the CESB asserts that
the allegations in its Petition - the patent illegality of the assailed Decision and Resolution of the
CSC, as well as the lack of jurisdiction and the grave abuse of discretion attending the latter's ruling -
are not suitable for an appeal under Rule 43. It argues that since these grounds properly pertain to a
petition for certiorari and prohibition, this remedy is more appropriate.

We find the CESB's contention untenable. As previously stated, certiorari and prohibition are proper
only if both requirements are present, that is, if the appropriate grounds are invoked; and an appeal
or any plain, speedy, and adequate remedy is unavailable. Mere reference to a ground under Rule
65 is not sufficient. This Court has, in fact, dismissed a Petition for Certiorari assailing another CSC
Resolution precisely on this ground. In Mahinay v. Court of Appeals,  the Court ruled:
46

As provided by Rule 43 of the Rules of Court, the proper mode of appeal from the decision of a
quasi-judicial agency, like the CSC, is a petition for review filed with the CA.

The special civil action of certiorari under Rule 65 of the Rules of Court may be resorted to only
when any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or
in excess of its/his jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary
course of law.

In this case, petitioner clearly had the remedy of appeal provided by Rule 43 of the Rules of
Court. Madrigal Tran.\port, Inc. v. Lapanday Holdings Corporation held:

Where appeal is available to the aggrieved party, the action for certiorari will not be entertained.
Remedies of appeal (including petitions for review) and certiorari are mutually exclusive, not
alternative or successive. Hence, certiorari is not and cannot be a substitute for an appeal,
especially if one's own negligence or error in one's choice of remedy occasioned such loss or lapse.
One of the requisites of certiorari is that there be no available appeal or any plain, speedy and
adequate remedy. Where an appeal is available, certiorari will not prosper, even if the ground
therefor is grave abuse of discretion. (Emphasis and underscoring supplied)

Here, the CESB could have appealed the CSC Decision and Resolution to the CA via a petition for
review under Rule 43. Hence, the filing of the instant Petition for Certiorari and Prohibition is
improper regardless of the grounds invoked therein.

Moreover, we find no reason to allow the CESB to avail itself of the extraordinary remedies
of certiorari and prohibition. Indeed, the petition itself cites no exceptional circumstance  other than
47

the supposed transcendental importance of the issues raised, "as the assailed CSC Decision is
gravely prejudicial to the mandate of the Petitioner." Even when confronted by respondents with
regard to the availability of an appeal, the CESB still failed to cite any special justification for its
refusal to avail itself of an appeal. Instead, it opted to focus on the nature of the grounds asserted in
its Petition. For the reasons stated above, a mere reference to grave abuse of discretion cannot
justify a resort to a petition under Rule 65.

Considering the failure of the CESB to offer a compelling explanation for its insistence upon the
special remedies of certiorari and prohibition, the Court finds no justification for a liberal application
of the rules.
In any event, the contentions of the CESB are without merit. As will be further explained, we find no
grave abuse of discretion on the part of the CSC. In resolving the appeal filed by the PAO, the CSC
merely exercised the authority granted to it by the Constitution as the central personnel agency of
the government.

The CSC acted within its }urisdiction

when it resolved the PAO's appeal and
reversed CESB Resolution No. 918.

At its core, this case requires the Court to delineate the respective authorities granted by law to two
agencies involved in the management of government personnel - the CSC and the CESB. This
particular dispute involves not only the jurisdiction of each office over personnel belonging to the
third-level of the civil service, but also the relationship between the two offices.

On the one hand, the CESB asserts its jurisdiction over members of the CES. Specifically, it refers to
the identification and classification of positions belonging to the third-level, as well as the
establishment of the qualifications for appointment to those posts. The CESB further emphasizes its
autonomy from the CSC on the basis of this Court's ruling that its status as an attached agency only
pertains to policy and program coordination.

The CSC, on the other hand, defends its authority to review actions and decisions of its attached
agencies, including the CESB. The CSC further claims original and appellate jurisdiction over
administrative cases involving contested appointments, pursuant to its constitutional mandate as the
central personnel agency of the government.

In the interest of the effective and efficient organization of the civil service, this Court must ensure
that the respective powers and functions of the CSC and the CESB are well-defined. After analyzing
and harmonizing the legal provisions pertaining to each of these two agencies, the Court concludes
that the CSC has the authority to review CESB Resolution No. 918. We have arrived at this
conclusion after a consideration of (a) the broad mandate of the CSC under the Constitution and the
Administrative Code; and (b) the specific and narrowly tailored powers granted to the CESB in the
Integrated Reorganization Plan and the Administrative Code.

As the central personnel agency of the

government, the CSC has broad authority
to pass upon all civil service matters.

Article IX-B of the 1987 Constitution entrusts to the CSC  the administration of the civil service,
48

which is comprised of "all branches, subdivisions, instrumentalities, and agencies of the

Government, including government-owned or controlled corporations with original charters."  In 49

particular, Section 3 of Article IX-B provides for the mandate of this independent constitutional
commission:

SECTION 3. The Civil Service Commission, as the central personnel agency of the Government,
shall establish a career service and adopt measures to promote morale, efficiency, integrity,
responsiveness, progressiveness, and courtesy in the civil service. It shall strengthen the merit and
rewards system, integrate all human resources development programs for all levels and ranks, and
institutionalize a management climate conducive to public accountability. It shall submit to the
President and the Congress an annual report on its personnel programs. (Emphases supplied)

The proceedings of the 1986 Constitutional Commission reveal the intention to emphasize the status
of the CSC as the "central personnel agency of the Government with all powers and functions
inherent in and incidental to human resources management."  As a matter of fact, the original
50

proposed provision on the functions of the CSC reads:

Sec. 3. The Civil Service Commission, as the central personnel agency of the government. shall
establish a career service, promulgate and enforce policies on personnel actions, classif[y] positions,
prescribe conditions of employment except as to compensation and other monetary benefits which
shall be provided by law, and exercise alt powers and functions inherent in and incidental to human
resources management, to promote morale, efficiency, and integrity in the Civil Service. It shall
submit to the President and the Congress an aimual report on its personnel programs, and perform
such other functions as may be provided by law.  (Emphases supplied)
51

Although the specific powers of the CSC are not enumerated in the final version of 1987
Constitution,  it is evident from the deliberations of the framers that the concept of a "central
52

personnel agency" was considered all-encompassing. The concept was understood to be sufficiently
broad as to include the authority to promulgate and enforce policies on personnel actions, to classify
positions, and to exercise all powers and functions inherent in and incidental to human resources
management:

MR. FOZ. Will the amendment reduce the powers and functions of the Civil Service as embodied in
our original draft?

MS. AQUINO: No, it will not. The proposed deletion of lines 35 to 40 of page 2 until line 1 of page 3
would not in any way minimize the powers of the Civil Service (Commission] because they are
deemed implicitly included in the all-embracing definition and concept of "central personnel agency
of the government." I believe that the lines we have mentioned are but redundant articulation of that
same concept, unnecessary surplusage.

MR. FOZ. For instance, will the power or function to promulgate policies on personnel actions be
encompassed by the Commissioner's amendment?

MS. AQUINO. It is not an amendment because I am retaining lines 33 to 35. I proposed an

amendment after the words "career service.'' I am only doing away with unnecessary redundancy.

MR. FOZ. Can we say that all of the powers enumerated in the original provision are still being
granted by the Civil Service Commission despite the elimination of the listing of these powers and
functions?

MS. AQUINO. Yes, Mr. Presiding Officer, in the nature of a central personnel agency, it would have
to necessarily execute all of these functions.

MR. FOZ. And will the elimination of all these specific functions be a source of ambiguity and
controversies later on as to the extent of the powers and functions of the commission?

MS. AQUINO. I submit that this would not be susceptible of ambiguity because the concept of a
central personnel agency is a generally accepted concept and as experience would bear out, this
function is actually being carried out already by the Civil Service Commission, except that we are
integrating this concept. I do not think that it would be susceptible of any ambiguity.

MR. REGALADO. Mr. Presiding Officer.

THE PRESIDING OFFICER (Mr. Treñas). Yes, Commissioner Regalado is recognized.

MR. REGALADO. This is more for clarification.

The original Section 3 states, among others, the functions of the Civil Service Commission - to
promulgate and enforce policies on personnel actions. Will Commissioner Aquino kindly indicate to
us the corresponding provisions and her proposed amendment which would encompass the powers
to promulgate and enforce policies on personnel actions?

MS. AQUINO. It is my submission that the same functions are already subsumed under the concept
of a central personnel agency.

MR. REGALADO. In other words, all those functions enumerated from line 35 on page 2 to line I of
page 3 inclusive, are understood to be encompassed in the phrase "central personnel agency of the
government."

MS. AQUINO. Yes, Mr. Presiding Officer, except that on line 40 of page 2 and line 1 of the
subsequent page, it was only subjected to a little modification.

MR. REGALADO. May we, therefore, make it of record that the phrase"... promulgate and enforce
policies on personnel actions, classify positions, prescribe conditions of employment except as to
compensation and other monetary benefits which shall be provided by law" is understood to be
subsumed under and included in the concept of a central personnel agency.

MS. AQUINO. I would have no objection to that.  (Emphases and underscoring supplied)
53

In accordance with the foregoing deliberations, the mandate of the CSC should therefore be read as
the comprehensive authority to perform all functions necessary to ensure the efficient administration
of the entire civil service, including the CES.

The Administrative Code of 1987 further reinforces this view. Book V, Title I, Subtitle A, Chapter 3,
Section 12 thereof enumerates the specific powers and functions of the CSC while recognizing its
comprehensive authority over all civil service matters. Section 12, Items (1) to (5), (11), (14), and
(19), are of particular relevance to this dispute:

SECTION 12. Powers and Functions.-The Commission shall have the following powers and
functions:

(1) Administer and enforce the constitutional and statutory provisions on the merit system for all
levels and ranks in the Civil Service;

(2) Prescribe, amend and enforce rules and regulations for carrying into effect the provisions of the
Civil Service Law and other pertinent laws;

(3) Promulgate policies, standards and guidelines for the Civil Service and adopt plans and
programs to promote economical, efficient and effective personnel administration in the government;

(4) Formulate policies and regulations for the administration, maintenance and implementation of
position classification and compensation and set standards for the establishment, allocation and
reallocation of pay scales, classes and positions;
(5) Render opinion and rulings on all personnel and other Civil Service matters which shall be
binding on all heads of departments, offices and agencies and which may be brought to the
Supreme Court on certiorari;

xxxx

(11) Hear and decide administrative cases instituted by or brought before it directly or on appeal,
including contested appointments, and review decisions and actions of its offices and of the
agencies attached to it. Officials and employees who fail to comply with such decisions, orders, or
rulings shall be liable for contempt of the Commission. Its decisions, orders, or rulings shall be final
and executory. Such decisions, orders, or rulings may be brought to the Supreme Court
on certiorari by the aggrieved party within thirty (30) days from receipt of a copy thereof;

xxxx

(14) Take appropriate action on all appointments and other personnel matters in the Civil Service
including extension of Service beyond retirement age;

xxxx

(19) Perform all functions properly belonging to a central personnel agency and such other functions
as may be provided by law.

It is evident from the foregoing constitutional and statutory provisions that the CSC, as the central
personnel agency of the government, has been granted the broad authority and the specific powers
to pass upon all civil service matters. The question before the Court today is whether this broad
authority encompasses matters pertaining to the CES and are, as such, recognized to be within the
jurisdiction of the CESB.

To allow us to understand the legal framework governing the two agencies and to harmonize the
provisions of law, it is now necessary for the Court to examine the history and the mandate of the
CESB. It may thereby determine the proper relation between the CSC and the CESB.

The CESB has been granted specific and limited powers under the law.

On 9 September 1968, Congress enacted R.A. 5435 authorizing the President to reorganize
different executive departments, bureaus, offices, agencies, and instrumentalities of the government.
The statute also created a Commission on Reorganization with the mandate to study and investigate
the status of all offices in the executive branch. This commission was also tasked to submit an
integrated reorganization plan to the President, and later on to Congress, for approval. The
Commission was given until 31 December 1970 to present its plan to the President. 54

After the conduct of hearings and intensive studies, a proposed Integrated Reorganization Plan  was 55

submitted to then President Ferdinand E. Marcos on 31 December 1970. The plan included a
proposal to develop a professionalized and competent civil service through the establishment of the
CES - a group of senior administrators carefully selected for managerial posts in the higher
levels.  To promulgate standards for the CES, the Commission on Reorganization recommended the
56

creation of the CESB:

To promulgate standards, rules and procedures regarding the selection, classification, compensation
and career development of members of the Career Executive Service, a Board is proposed to be
established. The Board shall be composed of high-level officials to provide a government-wide view
and to ensure effective support for the establishment and development of a corps of highly
competent, professional administrators. 57

The plan was referred to a presidential commission for review, but Martial Law was declared before
the proposal could be acted upon. Four days after the declaration of Martial Law, however, the
Integrated Reorganization Plan was approved by former President Marcos through Presidential
Decree No. 1.  This approved plan included the creation of the CES and the CESB.
58

The CES was created to "form a continuing pool of well-selected and development-oriented career
administrators who shall provide competent and faithful service."  The CESB was likewise
59

established to serve as the governing body of the CES  with the following functions: (a) to
60

promulgate rules, standards and procedures for the selection, classification, compensation and
career development of members of the CES;  (b) to set up the organization and operation of the civil
61

service in accordance with the guidelines provided in the plan;  (c) to prepare a program of training
62

and career development for members of the CES;  (d) to investigate and adjudicate administrative
63

complaints against members of the CES. 64

When the Administrative Code was enacted in 1987, the CESB was given the additional authority to
(a) identify other officers belonging to the CES in keeping with the conditions imposed by law;  and
65

(b) prescribe requirements for entrance to the third-level. 66

Based on the foregoing provisions, it is clear that the powers granted to the CESB are specific and
limited. This Court must now determine whether it is possible to interpret these powers in harmony
with the broad constitutional mandate of the CSC.

The specific powers of the CESB must be

narrowly interpreted as exceptions to the
comprehensive authority granted to the
CSC by the Constitution and relevant
statutes.

As we have earlier observed, the interplay between the broad mandate of the CSC and the specific
authority granted to the CESB is at the root of this controversy. The question we must resolve, in
particular, is whether the CSC had the authority to review and ultimately reverse CESB Resolution
No. 918, upon the appeal of the PAO.

For its part, the CESB contends that the Integrated Reorganization Plan and the Administrative
Code have granted it the exclusive authority to identify the positions belonging to the third-level of
the civil service and to prescribe the eligibility requirements for appointments thereto.  It thus asserts
67

that the foregoing matters are beyond the revisory jurisdiction of the CSC, and must instead be
appealed to the Office of the President in accordance with the specific provisions of the
aforementioned laws. This special mandate must allegedly prevail over the general authority granted
to the CSC.

As to its status as an attached agency, the CESB cites this Court's pronouncement in Eugenio
v. CSC  on its autonomy from its mother agency. The CESB contends that its attachment to the
68

CSC is only for the purpose of "policy and program coordination."  Allegedly, this attachment does
69

not mean that the former's decisions, particularly CESB Resolution No. 918, are subject to the
CSC's review.
On the other hand, the CSC asserts its jurisdiction to act upon the appeal from CESB Resolution No.
918 by virtue of its status as the central personnel agency of the government. It contends that the
CESB 's authority to prescribe entrance requirements for the third-level of the civil service does not
mean that the CSC no longer has jurisdiction over that class of positions. It also points out that the
case involves a personnel action that is within the jurisdiction conferred upon it by law.

We uphold the position of the CSC.

It is a basic principle in statutory construction that statutes must be interpreted in harmony with the
Constitution and other laws.  In this case, the specific powers of the CESB over members of the
70

CES must be interpreted in a manner that takes into account the comprehensive mandate of the
CSC under the Constitution and other statutes.

The present case involves the classification of positions belonging to the CES and the qualifications
for these posts. These are matters clearly within the scope of the powers granted to the CESB under
the Administrative Code and the Integrated Reorganization Plan. However, this fact alone does not
push the matter beyond the reach of the CSC.

As previously discussed, the CSC, as the central personnel agency of the government, is given the
comprehensive mandate to administer the civil service under Article IX-B, Section 3 of the 1987
Constitution; and Section 12, Items (4), (5), and (14) of the Administrative Code. It has also been
expressly granted the power to promulgate policies, standards, and guidelines for the civil service;
and to render opinions and rulings on all personne1 and other civilservice matters. 71

Here, the question of whether the subject PAO positions belong to the CES is clearly a civil service
matter falling within the comprehensive jurisdiction of the CSC. Further, considering the
repercussions of the issue concerning the appointments of those occupying the posts in question,
the jurisdiction of the CSC over personnel actions is implicated.

It must likewise be emphasized that the CSC has been granted the authority to review the decisions
of agencies attached to it under Section 12(11), Chapter 3, Subtitle A, Title I, Book V of the
Administrative Code:

SECTION 12. Powers and Functions.--The Commission shall have the following powers and
functions:

(11) Hear and decide administrative cases instituted by or brought before it directly or on appeal,
including contested appointments, and review decisions and actions of its offices and of the
agencies attached to it. Officials and employees who fail to comply with such decisions, orders, or
rulings shall be liable for contempt of the Commission. Its decisions, orders, or rulings shall be final
and executory. Such decisions, orders, or rulings may be brought to the Supreme Court
on certiorari by the aggrieved party within thirty (30) days from receipt of a copy thereof;

Since the CESB is an attached agency of the CSC,  the former's decisions are expressly subject to
72

the CSC's review on appeal.

Against the express mandate given to the CSC in the foregoing provision, the contention of the
CESB that its decisions may only be appealed to the Office of the President must fail. We note that
the supporting provision  cited by the CESB in support of its argument refers only to administrative
73

cases involving the discipline of members of the CES:

5. The Board shall promulgate rules, standards and procedures on the selection, classification,
compensation and career development of members of the Career Executive Service. The Board
shall set up the organization and operation of the Service in accordance with the following
guidelines:

xxxx

h. Discipline. Investigation and adjudication of administrative complaints against members of the

Career Executive Service shall be governed by Article VI, Chapter II and Paragraph I (d) of Article II,
Chapter III of this Part; provided that appeals shall be made to the Career Executive Service Board
instead of the Civil Service Commission. Administrative cases involving members of the Service on
assignment with the Board shall be investigated and adjudicated by the Board with the right to
appeal to the Office of the President. (Emphasis supplied)

In our view, the foregoing rule on appeals to the Office of the President only covers disciplinary
cases involving members of the CES. It is evident that this special rule was created for that
particular type of case, because members of the CES arc all presidential appointees. Given that the
power to appoint generally carries with it the power to discipline,  it is only reasonable for the
74

president to be given the ultimate authority to discipline presidential appointees. But this special rule
cannot apply to the matter at hand, because CESB Resolution No. 918 did not involve a disciplinary
case. Since it was clearly outside the scope of the foregoing provision, the Resolution did not come
within the jurisdiction of the Office of the President. It was therefore correctly appealed to the CSC.

From the above discussion, it is evident that the CSC acted within its jurisdiction when it resolved the
PAO's appeal. The arguments of the CESB on this point must perforce be rejected.

The CSC correctly ruled that third level

eligibility is not required for the subject
positions.

The Court now comes to the final issue for resolution - whether the CSC ruled in accordance with
law when the latter declared that it was not necessary for occupants of the subject PAO posts to
possess third-level eligibility.

On this point, the CESB argues that third-level eligibility is required for the positions pursuant to R.A.
9406 in relation to R.A. 10071. It avers that R.A. 9406 requires the Chief Public Attorney, Deputy
Chief Public Attorneys, Regional Public Attorneys and Assistant Regional Public Attorneys to have
the same qualifications for appointment, rank, salaries, allowances and retirement privileges as the
Chief State Prosecutor, Assistant Chief State Prosecutor, Regional State Prosecutor and Assistant
Regional State Prosecutor of the NPS under P.D. 1275. The latter law is the old one that governs
the NPS and requires third-level eligibility for senior prosecutorial posts. According to the CESB,
R.A. 10071 cannot apply, because R.A. 9406 could not have referred to a law that had not yet been
enacted at the time. It also asserts that the subsequent declassification of prosecutors cannot benefit
members of the PAO, because the prosecutors exercise quasi-judicial functions while the PAO
members do not.

On the other hand, the CSC argues that nowhere in R.A. 9406, P.D. 1275, R.A. 10071 or Batas
Pambansa Blg. (B.P.) 129 is there a reference to third-level eligibility and CESO rank as qualification
requirements. It emphasizes that the CESB cannot add to the provisions of these laws, which only
require the practice of law for a certain period of time and presuppose a bar license. The PAO, for its
part, maintains that the posts concerned are highly technical in nature because they primarily involve
legal practice, and any managerial functions performed are merely incidental to their principal roles.
It also claims that the legislature could never have intended to require third-level eligibility for
occupants of the subject posts when it enacted R.A. 9406.

After a careful consideration of the relevant statutes and rules, this Court agrees with the conclusion
of the CSC. To require the occupants of the subject PAO positions to possess third-level eligibility
would be to amend the law and defeat its spirit and intent.

The CESB effectively amended the

law when it required the occupants
of the subject PAO positions to
obtain third-level eligibility.

The authority to prescribe qualifications for pos1t10ns in the government is lodged in Congress  as 75

part of its plenary legislative power to create, abolish and modify public offices to meet societal
demands.  From this authority emanates the right to change the qualifications for existing statutory
76

offices.
77

It was in the exercise of this power that the legislature enacted Section 5 of R.A. 9406, which
provides for the qualifications for the Chief Public Attorney, Deputy Chief Public Attorneys, Regional
Public Attorneys and Assistant Regional Public Attorneys:

SEC. 5. Section 16, Chapter 5, Title III, Book IV of Executive Order No. 292, as amended, is hereby
further amended to read as follows:

SEC. 16. The Chief Public Attorney and Other PAO Officials. - The PAO shall be headed by a Chief
Public Attorney and shall be assisted by two (2) Deputy Chief Public Attorneys. Each

PAO Regional Office established in each of the administrative regions of the country shall be headed
by a Regional Public Attorney who shall be assisted by an Assistant Regional Public

Attorney. The authority and responsibility for the exercise of the mandate of the PAO and for the
discharge of its powers and functions shall be vested in the Chief Public Attorney.

xxxx

The Chief Public Attorney shall have the same qualifications for appointment, rank, salaries,
allowances, and retirement privileges as those of the Chief State Prosecutor of the National
Prosecution Service. The Deputy Chief Public Attorneys shall have the same qualifications for
appointment, rank, salaries, allowances, and retirement privileges as those of the Assistant Chief
State Prosecutor of the National Prosecution Service.

xxxx

The Regional Public Attorney and the Assistant Regional Public Attorney shall have the same
qualifications for appointment, rank, salaries, allowances, and retirement privileges as those of a
Regional State Prosecutor and the Assistant Regional State Prosecutor of the National Prosecution
Service respectively.

At the time of the enactment of R.A. 9406, the qualifications of officials of the NPS, to which the
foregoing provision referred, were provided by Section 3 of P.D. 1275:
Section 3. Prosecution Staff; Organization, Qualifications, Appointment. The Prosecution Staff shall
be composed of prosecuting officers in such number as hereinbelow determined. It shall be headed
by a Chief State Prosecutor who shall be assisted by three Assistants Chief State Prosecutors.

The Chief State Prosecutor, the three Assistants Chief State Prosecutors; and the members of the
Prosecution Staff shall be selected from among qualified and professionally trained members of the
legal profession who arc of proven integrity and competence and have been in the actual practice of
the legal profession for at least five (5) years prior to their appointment or have held during
like period, any position requiring the qualifications of a lawyer. (Emphases supplied)

Soon after, R.A. 10071 or the Prosecution Service Act of 2010  was passed. In updating the
78

qualifications for senior positions in the NPS, Congress again opted to refer to another set of
positions, this time in the judiciary:

SECTION 14. Qualifications, Rank and Appointment of the Prosecutor General. - The Prosecutor
General shall have the same qualifications for appointment, rank, category, prerogatives, salary
grade and salaries, allowances, emoluments and other privileges, shall be subject to the same
inhibitions and disqualifications, and shall enjoy the same retirement and other benefits as those of
the Presiding Justice of the Court of Appeals and shall be appointed by the President.

SECTION 15. Ranks of Prosecutors. - The Prosecutors m the National Prosecution Service shall
have the following ranks:

Rank Position/Title

Prosecutor V (I) Senior Deputy State Prosecutors;

(2) Regional Prosecutors; and

(3) Provincial Prosecutors or City Prosecutors of provinces or cities with at least twenty-five

(25) prosecutors and City Prosecutors of cities within a metropolitan area established by law
Prosecutor IV (1) Deputy State Prosecutors;

(2) Deputy Regional Prosecutors

(3) Provincial Prosecutors or City Prosecutors of provinces or cities with less than twenty-five (25)
prosecutors; and

(4) Deputy Provincial Prosecutors or Deputy City Prosecutors of provinces or cities with at least
twenty- five (25) prosecutors; and Deputy City Prosecutors of cities within a metropolitan area
established by law.

xxxx

SECTION 16. Qualifications, Ranks and Appointments of Prosecutors and Other Prosecution

Officers. - Prosecutors with the rank of Prosecutor V shall have the same qualifications for
appointment, rank, category, prerogatives, salary grade and salaries, allowances, emoluments and
other privileges, shall be subject to the same inhibitions and disqualifications, and shall enjoy the
same retirement and other benefits as those of an Associate Justice of the Court of Appeals.
Prosecutors with the rank of Prosecutor IV shall have the same qualifications for appointment, rank,
category, prerogatives, salary grade and salaries, allowances, emoluments and other privileges,
shall be subject to the same inhibitions and disqualifications, and shall enjoy the same retirement
and other benefits as those of a Judge of the

Regional Trial Court.

A reading of B.P. 129 reveals, in turn, that the Presiding Justice and the Associate Justices of the
Court of Appeals  are required to have the same qualifications as the members of this Court.   On
79 80

the other hand, judges of the regional trial courts are governed by a separate provision. 81

Based on the foregoing, it is clear that occupants of the subject PAO positions are only mandated to
comply with requirements as to age, citizenship, education, and experience. Since third-level
eligibility is not at all mentioned in the law, it would be improper for the CESB to impose this
additional qualification as a prerequisite to permanent appointments.  To do so would be to amend
82

the law and to overrule Congress.

While the CESB has been granted the power to prescribe entrance requirements for the third-level of
the civil service, this power cannot be construed as the authority to modify the qualifications
specifically set by law for certain positions. Hence, even granting that the occupants of the subject
positions indeed exercise managerial and executive functions as incidents of their primary roles, the
CESB has no power to impose additional qualifications for them. It cannot use the authority granted
to it by Congress itself to defeat the express provisions of statutes enacted by the latter.

It is also beyond the power of the CESB to question or overrule the specific qualifications imposed
by Congress for the subject positions. The legislature must be deemed to have considered the
entirety of the functions attendant to these posts when it enacted R.A. 9406 and prescribed the
relevant qualifications for each position. The choice not to require third level eligibility in this instance
must be respected - not only by the CESB but also by this Court - as a matter that goes into the
wisdom and the policy of a statute. 83

The intent of R.A. 9406 to establish

and maintain the parity in
qualifications between the senior
officials of the PAO and the NPS
must he respected.

This Court must likewise reject the CESB's contention that the declassification of positions in the
NPS (as a result of the enactment of R.A. 10071) cannot benefit the PAO because of a supposed
difference in their functions. This argument goes against the express terms and the clear intent of
R.A. 9406 and is therefore untenable.

As stated previously, Section 5 of R.A. 9406 amended the Administrative Code of 1987. The
amendment was done to provide for "the same qualifications for appointment, rank, salaries,
allowances, and retirement privileges" of senior officials of both the PAO and the NPS. The
deliberations of Congress on R.A. 9406 reveal its intention to establish parity between the two
offices. The lawmakers clearly viewed these officers as counterparts in the administration of justice:

Senator Enrile. Well, I agree with the gentleman. As I said, we should equalize the prosecution and
the defense. The PAO Office is actually an arm of the same government to protect those who need
protection.
Senator Pimentel. That is right.

Senator Enrile. At the same time, the Prosecution Service is the arm of the government to punish
those who would need punishment. So, these two perform the same class of service for the nation
and they should be equalized.

Senator Pimentel. Yes, I totally agree with that, that is why precisely I made this observation that
talking alone of starting pay, the level of starting pay of a PAO lawyer should not be lower than the
starting pay of a prosecutor.

Now maybe at the proper time we can insert that amendment.

Senator Enrile. I will be glad to receive the proposed amendment.  (Emphases supplied)
84

During the bicameral conference on the proposed bill, Senator Franklin M. Drilon explained that
equal treatment of the two offices was essential:

SEN. DRILON. Yes, this is our amendment that the PAO chief should have the same salary as the
Chief State Prosecutor and down the line, the Assistant Chief State Prosecutor, etcetera. And I want
to put this on record because there are PAO lawyers here. There are PAO lawyers here before us
and we want to explain why we have placed this.

xxxx

SEN. DRILON. All right. As I said - you know, I want to put on record why we had tried to streamline
the salary structure and place it at the same level as the Chief State Prosecutor. Because we do not
want a salary distortion in the Department of Justice where you have the PAO higher than the
prosecutors. That's why we want to put them on equal footing rather than mag - you know, there'll be
whipsawing. You place the prosecutors below the PAO. I can assure you that tomorrow the PAO will
come to us - the prosecutors will come to us and say, "Put us higher than the PAO lawyers." So you
will have whipsawing here. 85

Although these statements were made to address the specific issue of salary, this Court considers
them as manifestations of the intent to create and maintain parity between prosecutors and public
attorneys. In Re: Vicente S. E. Veloso,  this Court considered similar provisions in other laws as
86

confirmations of the legislative intent to grant equal treatment to certain classes of public officers:

Nonetheless, there are existing laws which expressly require the qualifications for appointment,
confer the rank, and grant the salaries, privileges, and benefits of members of the Judiciary on other
public officers in the Executive Department, such as the following:

(a) the Solicitor General and Assistant Solicitor Generals of the Office of the Solicitor General
(OSG); and

(b) the Chief Legal Counsel and the Assistant Chief Legal Counsel, the Chief State Prosecutor, and
the members of the National Prosecution Service (NPS) in the Department of Justice.

The intention of the above laws is to establish a parity in qualifications required, the rank conferred,
and the salaries and benefits given to members of the Judiciary and the public officers covered by
the said laws. The said laws seek to give equal treatment to the specific public officers in the
executive department and the Judges and Justices who are covered by Batas Pambansa Blg. 129,
as amended, and other relevant laws. In effect, these laws recognize that public officers who are
expressly identified in the laws by the special nature of their official functions render services which
are as important as the services rendered by the Judges and Justices. They acknowledge the
respective roles of those public officers and of the members of the Judiciary in the promotion of
justice and the proper functioning of our legal and judicial systems.

To fulfill the legislative intent to accord equal treatment to senior officials of the PAO and the NPS,
parity in their qualifications for appointment must be maintained. Accordingly, the revised
qualifications of those in the NPS must also be considered applicable to those in the PAO. The
declassification of positions in the NPS should thus benefit their counterpart positions in the PAO.
There is no justification for treating the two offices differently, given the plain provisions and the
rationale of the law.

This Court would render nugatory both the terms and the intent of the law if it sustains the view of
the CESB. We cannot construe R.A. 9046 in relation to P.D. 1275 only, while disregarding the
amendments brought about by R.A. 10071. To do so would defeat the legislature's very purpose,
which is to equalize the qualifications of the NPS and the PAO.

Based on the foregoing discussion, it is evident that the CSC acted within its jurisdiction and
authority as the central personnel agency of the government when it passed upon the appeal filed by
the PAO from CESB Resolution No. 918. Further, there was no grave abuse of discretion on the part
of the CSC when it reversed the said resolution, which refused to declassify the subject PAO
positions. As the CSC noted, the third-level eligibility required by the CESB as an additional
qualification for these posts contravened not only the express terms, but also the clear intent of R.A.
9406.

For the reasons stated above, and as a consequence of the improper remedy the CESB has
resorted to, this Court must dismiss the instant petition.

WHEREFORE, the Petition for Certiorari and Prohibition is DISMISSED for lack of merit. CSC

Decision No. 110067 and Resolution No. 1100719 dated 15 February 2011 and 1 June 2011,
respectively, are hereby AFFIRMED.

SO ORDERED.

MARIA LOURDES P.A. SERENO

Chief Justice

WE CONCUR:

MARIA LOURDES P.A. SERENOMARIA LOURDES P.A. SERENO MARIA LOURDES

P.A.SERENO
Chief Justice MARIA LOURDES P.A. SERENO
 SECOND DIVISION

G.R. No. 218463, March 01, 2017

HENRY R. GIRON, Petitioner, v. HON. EXECUTIVE SECRETARY PAQUITO N.

OCHOA, JR., HON. SANGGUNIANG PANLUNGSOD OF QUEZON CITY AND HON.
KAGAWAD ARNALDO A. CANDO, Respondents.

DECISION

MENDOZA, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court seeks the
review of the May 13, 2015 Decision1 of the Office of the President (OP) in OP-DC Case
No. 15-A-007, which dismissed the appeal of petitioner Henry R. Giron (Giron) from the
March 13, 2014 Resolution2 of the City Council of Quezon City (City Council), dismissing
the administrative complaint against respondent Arnaldo A. Cando (Cando), then the
Barangay Chairman of Capri, Novaliches, Quezon City.

The Antecedents

On November 6, 2012, Giron, together with Marcelo B. Macasinag, Eliseo M. Cruz,

Benjamin Q. Osi and Crisanto A. Canciller, filed before the Ombudsman a complaint for
Dishonesty, Grave Abuse of Authority and Violation of Section 389 (b) of Republic Act
(R.A.) No. 71603 against Cando, then the Barangay Chairman of Capri, for illegally
using electricity in three (3) of his computer shops.

On November 8, 2012, the case was referred to the Office of the Vice Mayor of Quezon
City and was calendared for the January 14, 2013 session of the City Council. The case
was later endorsed to the Special Investigation Committee on Administrative Cases
Against Elective Barangay Officials (Committee) for a hearing. On a scheduled hearing
on June 30, 2013, only Giron appeared.

The investigation, however, was suspended because of the coming October 2013
Barangay Elections. During the said elections, Cando vied for the position of Barangay
Kagawad and won. He assumed office on December 1, 2013.

On March 13, 2014, the City Council adopted the Resolution4 of the Committee, dated
January 24, 2014, recommending the dismissal of the case against Cando for being
moot and academic. It cited as basis the doctrine first enunciated in Pascual v.
Provincial Board of Nueva Ecija (Pascual)5 and reiterated in Aguinaldo v. Santos
(Aguinaldo),6 where the Court stated that "a public official cannot be removed for
administrative misconduct committed during a prior term, since his re-election to office
operates as a condonation of the officer's previous misconduct to the extent of cutting
off the right to remove him therefor."7

Giron moved for reconsideration, arguing that the doctrine of condonation was only
applicable when the re-election of the public official was to the same position. On
October 27, 2014, the City Council adopted the recommendation of the Committee to
deny Giron's motion for reconsideration.8

On November 18, 2014, Giron appealed to the OP, where it was docketed as OP-DC
Case No. 15-A-007. On May 13, 2015, the OP, through respondent Executive Secretary
Pacquito N. Ochoa, Jr., dismissed the appeal for lack of merit. The OP opined that the
"condonation rule applied even if [Cando] runs for a different position as long as the
wrongdoing that gave rise to his culpability was committed prior to the date of
election."9

Giron did not move for reconsideration. Instead, he directly filed this petition before this
Court. His justification for his disregard of the rule on exhaustion of administrative
remedies was that the issues being raised in this petition were purely questions of law
or of public interest.

ISSUES

A. WHETHER OR NOT G.R. NO. L-11959 (Pascual Case) STILL LEGAL

AND RELEVANT UNDER THE 1987 CONSTITUTION.

B. WHETHER OR NOT G.R. NO. 94115 (Aguinaldo Doctrine) IS

UNCONSTITUTIONAL INSOFAR AS IT VIOLATES PUBLIC
ACCOUNTABLITY OF 1987 CONSTITUTION AND REPUBLIC ACT
6713 THE CODE OF CONDUCT AND ETHICAL STANDARDS FOR
PUBLIC OFFICIALS AND EMPLOYEES.

C. WHETHER OR NOT THE DOCTRINE OF CONDONATION APPLIES TO

PUBLIC OFFICIALS REELECTED TO OTHER POSITION[S].10

Basically, petitioner Giron wants this Court to revisit the condonation doctrine and prays
for the Court:chanRoblesvirtualLawlibrary

"1.
To declare that G.R. No. L-11959 (Pascual case) is irrelevant under the present 1987
Constitution;
2.
To nullify G.R. No. 94115 (Aguinaldo doctrine) as it contravenes the Public
Accountability [provisions] of 1987 Constitution and violates Republic Act [No.] 6713
and Republic Act [No.] 7160; and
3.
If [it would be] ruled that the condonation doctrine [would] still [be] valid, it does not
apply to reelection to other position."11
Respondent Cando disagrees. On procedural grounds, he seeks the dismissal of the
petition grounded on Giron's failure to exhaust administrative remedies as no motion
for reconsideration was filed with the OP. As to the merits, the respondent asserts that
the Aguinaldo condonation doctrine applies in his case and that the re-election to office,
contemplated under the said doctrine, includes election to a different post.
The OSG, on the other hand, insists that the petition should be dismissed on the ground
of violation of the rule on exhaustion of administrative remedies. It points out that the
issues raised by Giron have been rendered moot and academic by the Court's ruling
in Conchita Carpio-Morales v. Court of Appeals and Jejomar Erwin S. Binay, Jr.,(Carpio-
Morales),12 wherein the Aguinaldo doctrine was abandoned but its application was made
prospective. Thus, its reliance on the ruling should be respected.

The Ruling of the Court

Procedural Issues

Plain is the rule that before a party is allowed to seek intervention of the courts,
exhaustion of available administrative remedies, like filing a motion for reconsideration,
is a pre-condition. As held in a catena of cases, the courts of justice, for reasons of
comity and convenience, will shy away from a dispute until the system of administrative
redress has been completed and complied with, so as to give the administrative agency
concerned every opportunity to correct its error and dispose of the case. This availment
of administrative remedy entails lesser expenses and provides for a speedier disposition
of controversies.13 Generally, absent any finding of waiver or estoppel, the case is
susceptible of dismissal for lack of cause of action.14

In this case, petitioner Giron raises the issue of whether the condonation doctrine still
applies if the public official is elected to a new position. As he has raised a pure
question of law, his failure to seek further administrative remedy may be excused. It
has been held that the requirement of a motion for reconsideration may be dispensed
with in the following instances: (1) when the issue raised is one purely of law; (2)
where public interest is involved; (3) in cases of urgency; and (4) where special
circumstances warrant immediate or more direct action.15

For the same reason, the Court glosses over the failure of the petitioner to properly
observe the hierarchy of courts. Under the rules, he should have first brought this to
the Court of Appeals through a petition for review under Rule 43. Section 1 thereof
reads:chanRoblesvirtualLawlibrary

Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders of
the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or
authorized by any quasi-judicial agency in the exercise of its quasi-judicial
functions. Among these agencies are the Civil Service Commission, Central Board of
Assessment Appeals, Securities and Exchange Commission, Office of the President,
Land Registration Authority, Social Security Commission, Civil Aeronautics Board,
Bureau of Patents, Trademarks and Technology Transfer, National Electrification
Administration, Energy Regulatory Board, National Telecommunications Commission,
Department of Agrarian Reform under Republic Act No. 6657, Government Service
Insurance System, Employees Compensation Commission, Agricultural Inventions
Board, Insurance Commission, Philippine Atomic Energy Commission, Board of
Investments, Construction Industry Arbitration Commission, and voluntary arbitrators
authorized by law. [Emphasis supplied]
As a rule, direct resort to this Court is frowned upon in line with the principle that the
Court is the court of last resort, and must remain to be so if it is to satisfactorily
perform the functions conferred to it by the Constitution. The rule, however, admits of
exceptions, namely: "(a) where there is estoppel on the part of the party invoking the
doctrine; (b) where the challenged administrative act is patently illegal, amounting to
lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will
irretrievably prejudice the complainant; (d) where the amount involved is relatively so
small as to make the rule impractical and oppressive; (e) where the question
involved is purely legal and will ultimately have to be decided by the courts of
justice; (f) where judicial intervention is urgent; (g) where the application of the
doctrine may cause great and irreparable damage; (h) where the controverted acts
violate due process; (i) where the issue of non-exhaustion of administrative remedies
has been rendered moot; (j) where there is no other plain, speedy and adequate
remedy; (k) where strong public interest is involved; and (1) in quo warranto
proceedings."16

Substantive Issue

The OSG is correct that the condonation doctrine has been abandoned by the Court
in Carpio-Morales.17 In the said case, the Court declared the doctrine as
unconstitutional, but stressed that its application should only be prospective. Thus: chanRoblesvirtualLawlibrary

It should, however, be clarified that this Court's abandonment of the condonation

doctrine should be prospective in application for the reason that judicial decisions
applying or interpreting the laws or the Constitution, until reversed, shall form part of
the legal system of the Philippines. Unto this Court devolves the sole authority to
interpret what the Constitution means, and all persons are bound to follow its
interpretation. As explained in De Castro v. Judicial Bar Council,
Judicial decisions assume the same authority as a statute itself and, until authoritatively
abandoned, necessarily become, to the extent that they are applicable, the criteria that
must control the actuations, not only of those called upon to abide by them, but also of
those duty-bound to enforce obedience to them.
Hence, while the future may ultimately uncover a doctrine's error, it should be, as a
general rule, recognized as "good law" prior to its abandonment. Xxx [Emphasis
supplied]
In this case, however, Giron insists that although the abandonment is prospective, it
does not apply to public officials elected to a different position.

On this issue, considering the ratio decidendi behind the doctrine, the Court agrees with
the interpretation of the administrative tribunals below that the condonation doctrine
applies to a public official elected to another office. The underlying theory is that each
term is separate from other terms. Thus, in Carpio-Morales, the basic considerations
are the following: first, the penalty of removal may not be extended beyond the term in
which the public officer was elected for each term is separate and distinct;18second, an
elective official's re-election serves as a condonation of previous misconduct, thereby
cutting the right to remove him therefor;19 and third, courts may not deprive the
electorate, who are assumed to have known the life and character of candidates, of
their right to elect officers. In this case, it is a given fact that the body politic, who
elected him to another office, was the same.

It should be stressed, however, that the doctrine is now abandoned. As concluded in

the said case,
Xxx. In consequence, it is high time for this Court to abandon the condonation doctrine
that originated from Pascual, and affirmed in the cases following the same, such
as Aguinaldo, Salalima, Mayor Garcia, and Governor Garcia, Jr. which were all relied
upon by the CA.20
WHEREFORE, the petition is DENIED. The May 13, 2015 Decision of the Office of the
President in OP-DC Case No. 15-A-007, adopting the March 13, 2014 Resolution of the
City Council of Quezon City is AFFIRMED.

This disposition is, however, without prejudice to any criminal case filed, or may be
filed, against Arnaldo A. Cando for theft of electricity.

SO ORDERED.

Carpio, (Chairperson), Peralta, and Jardeleza, JJ., concur.

Leonen, J., on official leave.

EN BANC  

January 10, 2017

G.R. No. 202781

CRISANTO M. AALA, ROBERT N. BALAT, DATU BELARDO M. BUNGAD, CESAR B.

CUNTAPAY, LAURA S. DOMINGO, GLORIA M. GAZMEN-TAN, and JOCELYN P. SALUDARES-
CADAYONA, Petitioners,
vs.
HON. REY T. UY, in his capacity as the City Mayor of Tagum City, Davao del Norte, MR.
ALFREDO H. SILAWAN, in his capacity as City Assessor of Tagum City, HON. DE CARLO L.
UY, HON. ALLAN L. RELLON, HON. MARIA LINA F. BAURA, HON. NICANDRO T.
SUAYBAGUIO, JR., HON. ROBERT L. SO, HON. JOEDEL T. CAASI, HON. OSCAR M.
BERMUDEZ, HON. ALAN D. ZULUETA, HON. GETERITO T. GEMENTIZA, HON. TRISTAN
ROYCE R. AALA, HON. FRANCISCO C. REMITAR, in their capacity as City Councilors of
Tagum City, Davao del Norte, HON. ALFREDO R. PAGDILAO, in his capacity as ABC
representative, and HON. MARIE CAMILLE C. MANANSALA, in her capacity as SKF
representative, Respondents.

DECISION
LEONEN, J.:

Parties must comply with the doctrines on hierarchy of courts and exhaustion of administrative
remedies. Otherwise, they run the risk of bringing premature cases before this Court, which may
result to protracted litigation and overclogging of dockets.

This resolves the original action for Certiorari, Prohibition, and Mandamus  filed by petitioners
1

Crisanto M. Aala, Robert N. Balat, Datu Belardo M. Bungad, Cesar B. Cuntapay, Laura S. Domingo,
Gloria M. Gazmen-Tan, and Jocelyn P.Saludares-Cadayona.  They question the validity of City
2

Ordinance No. 558, s-2012 of the City of Tagum, Davao del Norte, which the Sangguniang
Panlungsod of Tagum City enacted on March 19, 2012.  3

On July 12, 2011, the Sangguniang Panlungsod of Tagum City's Committee on Finance conducted a
public hearing for the approval of a proposed ordinance. The proposed ordinance sought to adopt a
new schedule of market values and assessment levels of real properties in Tagum City  . 4

On November 3, 2011, the Sangguniang Panlungsod of Tagum City passed City Ordinance No. 516,
s-2011, entitled An Ordinance Approving the New Schedule of Market Values, its Classification, and
Assessment Level of Real Properties in the City of Tagum.   The ordinance was approved by Mayor
5

Rey T. Uy (Mayor Uy) on November 11,2011 and was immediately forwarded to the Sangguniang
Panlalawigan of Davao del Norte for review. 6

On February 7, 2012, the Sangguniang Panlalawigan of Davao del Norte's Committee on Ways and
Means/Games and Amusement issued a report dated February 1, 2012 declaring City Ordinance
No. 516, s-2011 valid.   It also directed the Sangguniang Panlungsod of Tagum City to revise the
7

ordinance based on the recommendations of the Provincial Assessor's Office. 8

Consequently, the Sangguniang Panlalawigan of Davao del Norte returned City Ordinance No. 516,
s-2011 to the Sangguniang Panlungsod of Tagum City for modification. 9

As a result of the amendments introduced to City Ordinance No. 516, s-2011, on March 19, 2012,
the Sangguniang Panlungsod of Tagum City passed City Ordinance No. 558, s-2012.   The new 10

ordinance was approved by Mayor Uy on April 10, 2012. On the same day, it was transmitted for
review to the Sangguniang Panlalawigan of Davao del Norte. The Sangguniang Panlalawigan of
Davao del Norte received the proposed ordinance on April 12, 2012.  11

On April 30, 2012, Engineer Crisanto M. Aala (Aala) and Colonel Jorge P. Ferido (Ferido ), both
residents of Tagum City, filed before the Sangguniang Panlalawigan of Davao del Norte an
Opposition/Objection to City Ordinance No. 558, s-2012.   The opposition was docketed as Case
12

No. DOCS-12-000362 and was referred to the Committee on Ways and Means/Games and
Amusement.   The Committee conducted a hearing to tackle the matters raised in the Opposition.
13 14

Present at the hearing were oppositors Aala and Ferido, their counsel, Alfredo H. Silawan, City
Assessor of Tagum City, and Atty. Rolando Tumanda, City Legal Officer of Tagum City.  15

In their Opposition/Objection,   Aala and Ferido asserted that City Ordinance No. 558, s-2012
16

violated Sections 130(a),   198(a) and (b),   199(b),   and 201  of the Local Government Code of
17 18 19 20

1991.   They alleged that Sections III C 1, 2, and 3 as well as Sections III G 1(b) and 4(g)  of the
21 22

proposed ordinance divided Tagum City into different zones, classified real properties per zone, and
fixed its market values depending on where they were situated  without taking into account the
23

"distinct and fundamental differences . . . and elements of value"  of each property.
24
Aala and Ferido asserted that the proposed ordinance classified and valued those properties located
in a predominantly commercial area as commercial, regardless of the purpose to which they were
devoted.   According to them, this was erroneous because real property should be classified,
25

valued, and assessed not according to its location but on the basis of actual use.  Moreover, they
26

pointed out that the proposed ordinance imposed exorbitant real estate taxes, which the residents of
Tagum City could not afford to pay. 27

After the hearing, the Sangguniang Panlalawigan of Davao del Norte's Committee on Ways and
Means/Games and Amusement issued Committee Report No. 5 dated May 4, 2012, which returned
City Ordinance No. 558, s-2012 to the Sangguniang Panlungsod of Tagum City.   The Sangguniang
28

Panlalawigan of Davao del Norte also directed the Sangguniang Panlungsod ofTagum City to give
attention and due course to the oppositors' concerns. 29

On May 22, 2012, the Sangguniang Panlungsod ofTagum City issued Resolution No. 808, s-2012
dated May 14, 2012, requesting the Sangguniang Panlalawigan of Davao del Norte to reconsider its
position on City Ordinance No. 558, s-2012. 30

On June 18, 2012, the Sangguniang Panlalawigan of Davao del Norte issued Resolution No.
428  declaring as invalid Sections III C 1, 2, and 3, Sections III D (1) and (2), and Sections G l(b)
31

and 4(g) of City Ordinance No. 558, s-2012.  32

However, on July 9, 2012, the Sangguniang Panlungsod of Tagum City passed Resolution No. 874,
s-2012 declaring City Ordinance No. 558, s-2012 as valid.  The Sangguniang Panlungsod of Tagum
33

City cited as its basis Section 56(d)  of the Local. Government Code of 1991 and Department of
34

Interior and Local Government Opinion No. 151 dated November 25, 2010.  It argued that the
35

Sangguniang Panlalawigan of Davao del Norte failed to take action on City Ordinance No. 558, s-
2012 within 30 days from its receipt on April 12, 2012.  Hence, under Section 56(d) of the Local
36

Government Code of 1991, City Ordinance No. 558, s-2012 enjoys the presumption of validity. 37

On July 13, 2012, City Ordinance No. 558, s-2012 was published in the July 13-19, 2012 issue of
Trends and Time,  a newspaper of general circulation in Tagum City. 
38 39

Alarmed by the impending implementation of City Ordinance No. 558, s-2012, petitioners filed before
this Court an original action for Certiorari, Prohibition, and Mandamus on August 13, 2012.  The 40

Petition included a prayer for the issuance of a temporary restraining order and a writ of preliminary
injunction. 41

In their Petition, petitioners seek to nullify the ordinance on the ground that respondents enacted it
with grave abuse of discretion.  Petitioners invoke this Court's original jurisdiction under Article VIII,
42

Section 5(1) of the Constitution   in view of the need to immediately resolve the issues they have
43

raised.  44

Petitioners allege that there is an urgent need to restrain the implementation of City Ordinance No.
558, s-2012.  Otherwise, the City Government of Tagum would proceed with "the collection of
45

exorbitant real property taxes to the great damage and prejudice of . . . petitioners and the
thousands of taxpayers inhabiting Tagum City[.]" 46

On October 16, 2012, respondent Geterito T. Gementiza (Gementiza) filed a Motion  praying that he
47

be dropped as a respondent in the case. According to respondent Gementiza, he had opposed the
passage of City Ordinance No. 558, s-2012 during the deliberations of the Sangguniang Panlungsod
of Tagum City.  In the Resolution  dated October 23, 2012, this Court required the parties to file a
48 49

comment on respondent Gementiza's Motion.

On October 31, 2012, respondents filed a Comment  on the Petition. In the Resolution  dated
50 51

December 4, 2012, this Court noted the Comment and required petitioners to file a reply to the
Comment.

Meanwhile, on February 20, 2013, respondents filed a Manifestation 52

stating that the implementation of City Ordinance No. 558, s-2012 had been

deferred due to the wide extent of damage caused by Typhoon Pablo in Tagum City. 53

On February 25, 2013, petitioners and respondents filed their respective Comments  on respondent
54

Gementiza's Motion. Petitioners argued that the passage of the questioned ordinance was a collegial
act of the Sangguniang Panlungsod of Tagum City, of which respondent Gementiza was a member.
Hence, respondent Gementiza should still be impleaded in the case regardless of whether or not he
opposed the passage of the ordinance. 55

On March 6, 2013, petitioners filed a Reply  to the Comment dated October 18, 2012.
56
1âwphi1

In the Resolution  dated March 19, 2013, this Court gave due course to the Petition, treated
57

respondents' Comment as an answer, and required the parties to submit their memoranda. On July
10, 2013, petitioners filed their Memorandum  dated June 20, 2013. On September 6, 2013,
58

respondents filed their Memorandum  dated August 2, 2013.

59

Petitioners allege that Tagum City is predominantly agricultural.   Although it boasts of expansive
60

highways "lined with tall palm trees" and a state-of-the-art city hall, Tagum City still has an
outstanding debt of ₱450 million.  The income level of its 240,000 inhabitants remains constant, and
61

due to unreasonable business taxes, most businesses have either scaled down or closed.  62

Set against this factual backdrop, petitioners assail the validity of City Ordinance No. 558, s-
2012.  They claim that the ordinance imposes exorbitant real estate taxes because of the
1âwphi1

Sangguniang Panlungsod's erroneous classification and valuation of real properties.  63

Petitioners are concerned residents of Tagum City who would be directly affected by the
implementation of the questioned ordinance.  Well-aware of the doctrines on the hierarchy of courts
64

and exhaustion of administrative remedies, they beg this Court's indulgence to allow immediate and
direct resort to it.   According to petitioners, this case is exempt from the application of the doctrine
65

on hierarchy of courts. They anchor their claim on the ground that the redress they desire cannot be
obtained in the appropriate courts.   Furthermore, petitioners assert that the issue they have raised
66

is purely legal and that the case involves paramount public interest, which warrants the relaxation of
the rule on exhaustion of administrative remedies.  67

Petitioners believe that compliance with Section 187 of the Local Government Code of 1991 would
harm the taxpayers of Tagum City.   They argue that the cited provision hardly constitutes an
68

efficacious remedy that can provide the redress they urgently seek.   According to petitioners, there
69

is nothing that would prevent the City Government of Tagum from collecting exorbitant real property
taxes since the Secretary of Justice does not have the power to suspend the implementation of the
questioned ordinance.  Moreover, the 60-day period given to the Secretary of Justice within which to
70

render a decision would merely constitute delay and give the City Government of Tagum enough
time to assess and collect exorbitant real property taxes. 71
Petitioners also believe that upon receipt of an assessment, they would be precluded from
questioning the excessiveness of the real property tax imposed by way of protest.   Under the Local
72

Government Code of 1991, the amount of real property tax assessed must first be paid before a
protest may be entertained.   However, petitioners contend that the taxpayers of Tagum City would
73

not be able to comply with this rule due to lack of money.   Petitioners justify immediate resort to this
74

Court due to this impasse.  75

In their Comment,   respondents attack the propriety of the remedy of which petitioners have availed
76

themselves. Respondents point out that the extraordinary remedy of certiorari is only directed
against judicial and quasi-judicial acts.   According to respondents, the Sangguniang Panlungsod of
77

Tagum City exercised a legislative function in enacting the questioned ordinance and is, thus,
beyond the scope of a petition for certiorari.   Moreover, there is a plain, speedy, and adequate
78

remedy available to petitioners under the law.   Citing Section 187 of the Local Government Code of
79

1991, respondents argue that petitioners should have exhausted administrative remedies by filing an
appeal before the Secretary of Justice. 80

Respondents further argue that in directly filing their Petition before this Court, petitioners violated
the doctrine on hierarchy of courts.  They stress that the Supreme Court, Court of Appeals, and the
81

Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, and
mandamus.  82

Respondents also allege that the Petition raises factual issues, which warrants the dismissal of the
Petition. 83

Going into the substantive aspect of the case, petitioners contend that the ordinance created only
two (2) categories of real properties. Petitioners point out that Sections III C and D, which pertain to
the classification of commercial and industrial lands, list all the streets and barrios in Tagum
City.   Because of this, petitioners argue that the ordinance effectively categorized all lands in
84

Tagum City either into commercial or industrial lands, regardless of the purpose to which they were
devoted and the extent of their development.  85

Petitioners further contend that since all lands in Tagum City had been classified as commercial or
industrial, all buildings and improvements would likewise be classified as commercial or industrial.
Otherwise, an absurd situation would arise where the building and the land on which it stands would
have a different classification.  86

In other words, petitioners claim that the ordinance created a blanket classification of real properties
without regard to the principle of actual use. To the mind of petitioners, this blanket classification
"does not conform to the reality that Tagum City is not that far advanced and commercially
developed like Ayala Avenue [in] Makati City where [almost all] of the properties fronting the entire
breadth of Ayala Avenue are . . . used for commercial purposes." 87

In classifying real properties based on location, petitioners argue that the ordinance contravenes
Section 217 of the Local Government Code of 1991, which provides that "[ r] eal property shall be
classified, valued and assessed on the basis of its actual use regardless of where located, whoever
owns it, and whoever uses it."  Petitioners highlight the necessity in properly classifying real
88

properties based on actual use because the classification of real property determines the
assessment level that would be applied in computing the real property tax due.  89

Petitioners add that because all real properties in Tagum City were classified into commercial or
industrial properties, their valuation would then correspond to that of commercial or industrial
properties as the case may be.  In effect, the ordinance provided a uniform market value for all real
90
properties without regard to the principle of actual use.  According to petitioners, this is erroneous.
91

They further add that the schedule of fair market values was arbitrarily prepared by those who do not
know the basic principles of property valuation.  92

By way of example, petitioners point out that the market values of residential lands, which were
reclassified under the ordinance as commercial, increased from ₱600.00 per square meter to
₱5,000.00 per square meter, or by 833% in a span of only three (3) years.  According to petitioners,
93

this violates Section 191 of the Local Government Code of 1991. 94

Petitioners allege that the ordinance equated the market values of unused and undeveloped lands to
that of fully developed lands.   Hence, the ordinance discriminates against poor land owners who do
95

not have the means to pay the increased amount of real property taxes.  Petitioners claim that what
96

the Sangguniang Panlungsod had actually determined were the zonal values of real properties in
Tagum City and not the market values. 97

Petitioners contend that respondents committed grave abuse of discretion in fixing the new schedule
of market values by usurping or arrogating unto itself the City Assessor's authority to fix the schedule
of market values.  Being "personally acquainted with the nature, condition, and value of the said real
98

properties" in a given locality, the City Assessor is in the best position to fix the schedule of market
values.  However, petitioners believe that the schedule of market values was prepared by the
99

Sangguniang Panlungsod of Tagum City, and not by the City Assessor.   They also believe that the
100

City Assessor abdicated his duty and unlawfully neglected to perform what was mandated under
Section 212 of the Local Government Code of 1991.  101

Petitioners conclude that what the Sangguniang Panlungsod of Tagum City had undertaken was a
general revision of real property assessments and property classification under Section 212 of the
Local Government Code of 1991.   They argue that "the general revision of [real property]
102

assessments and property classification cannot be made simultaneously with the ordinance adopting
[a new] schedule of fair market values." 103

Petitioners raise the sole substantive issue of whether respondents committed grave abuse of
discretion in preparing, enacting, and approving City Ordinance No. 558, s-2012, which imposes
exorbitant real property taxes in violation of the equal protection clause, due process clause, and the
rule on uniformity in taxation. 
104

On the other hand, respondents argue that petitioners misconstrued the ordinance.   They claim
105

that a careful reading of the provisions would reveal that there were four (4) categories by which real
properties were to be classified, valued, and assessed, namely: agricultural, residential, commercial,
and industrial.   Although the ordinance lists specific roads and areas in Tagum City classified as
106

commercial and industrial, this does not mean that all properties located in commercial and industrial
areas would automatically be classified as such.  107

Respondents stress that the principle of actual use still plays an important role in the classification
and assessment of real properties.   For the proper computation of the real property tax due, real
108

properties located in commercial and industrial areas will be assessed depending on how they are
used.   To illustrate, if a parcel of land located along a commercial area is used partly for
109

commercial purposes and partly for agricultural purposes, then the fair market value of the portion
used for commercial purposes will correspond to that of commercial lands, while the fair market
value of the portion used for agricultural purposes will correspond to that of agricultural lands. 
110

Respondents reiterate their claim that the Sangguniang Panlalawigan of Davao del Norte acted
beyond the 30-day reglementary period under Section 56(d) of the Local Government Code of
1991.   Citing Department of Interior and Local Government's Opinion No. 151 dated November 25,
111

2010, respondents argue that the phrase "take action" means that the Sangguniang Panlalawigan,
within 30 days from receipt of the ordinance or resolution, "should have issued their legislative action
in the form of a [r]esolution containing their disapproval in whole or in part [of] any ordinance or
resolution submitted to them for review[.]"   Since the Sangguniang Panlalawigan of Davao del
112

Norte received the questioned ordinance on April 12, 2012, it had until May 12, 2012 to take
action.   However, the Sangguniang Panlalawigan of Davao del Norte only issued Resolution No.
113

428 on June 18, 2012.  114

For this Court's resolution are the following issues:

Procedural

First, whether this case falls under the exceptions to the doctrine on hierarchy of courts;

Second, whether this case falls under the exceptions to the rule on exhaustion of administrative
remedies;

Third, whether petitioners correctly availed themselves of the extraordinary remedies of certiorari,
prohibition, and mandamus; and

Lastly, whether respondent Gementiza should be dropped as a respondent in the case.

Substantive

First, whether respondents committed grave abuse of discretion amounting to lack or excess of
jurisdiction in preparing, enacting, and approving City Ordinance No. 558, s-2012;

Second, whether City Ordinance No. 558, s-2012 classifies all real properties in Tagum City into
commercial or industrial properties only;

Third, whether the schedule market values conform to the principle that real properties shall be
valued on the basis of actual use;

Fourth, whether City Ordinance No. 558, s-2012 imposes exorbitant real property taxes; and

Lastly, whether City Ordinance No. 558, s-2012 is unconstitutional for violation of the equal
protection clause, due process clause, and the rule on uniformity in taxation.

We deny the Petition for serious procedural errors.

The doctrine on hierarchy of courts is a practical judicial policy designed to restrain parties from
directly resorting to this Court when relief may be obtained before the lower courts.   The logic
115

behind this policy is grounded on the need to prevent "inordinate demands upon the Court's time
and attention which are better devoted to those matters within its exclusive jurisdiction," as well as to
prevent the congestion of the Court's dockets.   Hence, for this Court to be able to "satisfactorily
116

perform the functions assigned to it by the fundamental charter[,]" it must remain as a "court of last
resort."   This can be achieved by relieving the Court of the "task of dealing with causes in the first
117

instance."  118
As expressly provided in the Constitution, this Court has original jurisdiction "over petitions
for certiorari, prohibition, mandamus, quo warranto, and habeas corpus."  However, this Court has
119

emphasized in People v. Cuaresma that the power to issue writs of certiorari, prohibition, and
120

mandamus does not exclusively pertain to this Court.   Rather, it is shared with the Court of Appeals
121

and the Regional Trial Courts.   Nevertheless, "this concurrence of jurisdiction" does not give parties
122

unfettered discretion as to the choice of forum. The doctrine on hierarchy of courts is determinative
of the appropriate venue where petitions for extraordinary writs should be filed.   Parties cannot 123

randomly select the court or forum to which their actions will be directed.

There is another reason why this Court enjoins strict adherence to the doctrine on hierarchy of
courts. As explained in Diocese of Bacolod v. Commission on Elections,   "[t]he doctrine that
124

requires respect for the hierarchy of courts was created by this court to ensure that every level of the
judiciary performs its designated roles in an effective and efficient manner."   Thus: 125

Trial courts do not only determine the facts from the evaluation of the evidence presented before
them. They are likewise competent to determine issues of law which may include the validity of an
ordinance, statute, or even an executive issuance in relation to the Constitution. To effectively
perform these functions, they are territorially organized into regions and then into branches. Their
writs generally reach within those territorial boundaries. Necessarily, they mostly perform the all-
important task of inferring the facts from the evidence as these are physically presented before
them. In many instances, the facts occur within their territorial jurisdiction, which properly present the
'actual case' that makes ripe a determination of the constitutionality of such action. The
consequences, of course, would be national in scope. There are, however, some cases where resort
to courts at their level would not be practical considering their decisions could still be appealed
before the higher courts, such as the Court of Appeals.

The Court of Appeals is primarily designed as an appellate court that reviews the determination of
facts and law made by the trial courts. It is collegiate in nature. This nature ensures more
standpoints in the review of the actions of the trial court. But the Court of Appeals also has original
jurisdiction over most special civil actions. Unlike the trial courts, its writs can have a nationwide
scope. It is competent to determine facts and, ideally, should act on constitutional issues that may
not necessarily be novel unless there are factual questions to determine.

This court, on the other hand, leads the judiciary by breaking new ground or further reiterating - in
the light of new circumstances or in the light of some confusions of bench or bar - existing
precedents. Rather than a court of first instance or as a repetition of the actions of the Court of
Appeals, this court promulgates these doctrinal devices in order that it truly performs that
role.   (Citation omitted)
126

Consequently, this Court will not entertain direct resort to it when relief can be obtained in the lower
courts.   This holds especially true when questions of fact are raised.   Unlike this Court, trial courts
127 128

and the Court of Appeals are better equipped to resolve questions of fact.   They are in the best
129

position to deal with causes in the first instance.

However, the doctrine on hierarchy of courts is not an inflexible rule.   In Spouses Chua v.
130

Ang,   this Court held that "[a] strict application of this rule may be excused when the reason behind
131

the rule is not present in a case[.]"   This Court has recognized that a direct invocation of its original
132

jurisdiction may be warranted in exceptional cases as when there are compelling reasons clearly set
forth in the petition,   or when what is raised is a pure question of law. 
133 134

In a fairly recent case, we summarized other well-defined exceptions to the doctrine on hierarchy of
courts. Immediate resort to this Court may be allowed when any of the following grounds are
present: (1) when genuine issues of constitutionality are raised that must be addressed immediately;
(2) when the case involves transcendental importance; (3) when the case is novel; (4) when the
constitutional issues raised are better decided by this Court; (5) when time is of the essence; (6)
when the subject of review involves acts of a constitutional organ; (7) when there is no other plain,
speedy, adequate remedy in the ordinary course of law; (8) when the petition includes questions that
may affect public welfare, public policy, or demanded by the broader interest of justice; (9) when the
order complained of was a patent nullity; and (10) when the appeal was considered as an
inappropriate remedy.  135

None of the exceptions to the doctrine on hierarchy of courts are present in this case. Significantly,
although petitioners raise questions of law, other interrelated factual issues have emerged from the
parties' arguments, which this Court deems indispensable for the proper disposition of this case.

In Republic v. Sandiganbayan,   this Court explained that a question of fact exists:

136

when the doubt or difference arises as to the truth or falsehood of facts or when the query invites
calibration of the whole evidence considering mainly the credibility of the witnesses, the existence
and relevancy of specific surrounding circumstances as well as their relation to each other and to the
whole, and the probability of the situation.   (Citations omitted)
137

The resolution of the first substantive issue of whether respondents committed grave abuse of
discretion in preparing, enacting, and approving City Ordinance No. 558, s-2012 requires the
presentation of evidence on the procedure undertaken by the City Government of Tagum.

The second substantive issue, which involves the alleged blanket classification of real properties, is
likewise factual in nature. There is still a dispute on whether the questioned ordinance truly limited
the classification of real properties into two (2) categories. This Court cannot resolve this issue
without further evidence from the parties, particularly from the Sangguniang Panlungsod of Tagum
City.

The third and fourth issues, which are essential for the proper disposition of this case, are questions
of fact. To determine whether the schedule of fair market values conforms to the principle of actual
use requires evidence from the person or persons who prepared it. These individuals must show the
process and method they employed in arriving at the schedule of market values.

It is worth mentioning that several of petitioners' assertions, on which their arguments are based, are
purely speculative. For instance, petitioners claim that the Sangguniang Panlungsod of Tagum City
usurped the City Assessor's authority in fixing the schedule of fair market values.   Yet, they offer no
138

evidence to support their allegation. They merely rely on a comparison between the new schedule of
market values and the schedule of market va1ues in a previous ordinance.  139

With regard to the fourth issue, petitioners invite this Court to compare the new schedule of fair
market values with the old schedule of fair market values and determine whether the increase was
exorbitant. In the absence of any evidence, this Court does not have the technical expertise to make
such determination. We cannot simply rely on bare numbers.

In order to resolve these factual issues, we will be tasked to receive evidence from both parties.
However, the initial reception and appreciation of evidence are functions that this Court cannot
perform. These functions are best left to the trial courts. This Court is not a trier of facts.   The
140

factual issues in this case should have been raised and ventilated in the proper forum.
 II

Parties are generally precluded from immediately seeking the intervention of courts when "the law
provides for remedies against the action of an administrative board, body, or officer."  The practical
141

purpose behind the principle of exhaustion of administrative remedies is to provide an orderly

procedure by giving the administrative agency an "opportunity to decide the matter by itself correctly
[and] to prevent unnecessary and premature resort to the courts." 142

Under Section 187 of the Local Government Code of 1991, aggrieved taxpayers who question the
validity or legality of a tax ordinance are required to file an appeal before the Secretary of Justice
before they seek intervention from the regular courts. Section 187 of the Local Government Code of
1991 provides:

SECTION 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures;
Mandatory Public Hearings. - The procedure for approval of local tax ordinances and revenue
measures shall be in accordance with the provisions of this Code: Provided, That public hearings
shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any
question on the constitutionality or legality of tax ordinances or revenue measures may be raised on
appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render
a decision within sixty (60) days from the date of receipt of the appeal: Provided, however, That such
appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and
payment of the tax, fee, or charge levied therein: Provided, finally, That within thirty (30) days after
receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting
upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent
jurisdiction.

In Reyes v. Court of Appeals,   this Court declared the mandatory nature of Section 187 of the
143

Local Government Code of 1991 :

[T]he law requires that the dissatisfied taxpayer who questions the validity or legality of a tax
ordinance must file his appeal to the Secretary of Justice, within 30 days from effectivity thereof. In
case the Secretary decides the appeal, a period also of 30 days is allowed for an aggrieved party to
go to court. But if the Secretary does not act thereon, after the lapse of 60 days, a party could
already proceed to seek relief in court. These three separate periods are clearly given for
compliance as a prerequisite before seeking redress in a competent court. Such statutory periods
are set to prevent delays as well as enhance the orderly and speedy discharge of judicial functions.
For this reason the courts construe these provisions of statutes as mandatory.   (Emphasis
144

supplied, citations omitted)

The same principle was reiterated in Jardine Davies Insurance Brokers, Inc. v.
Aliposa.   In Jardine, the then Sangguniang Bayan of Makati enacted Municipal Ordinance No. 92-
145

072, otherwise known as the Makati Revenue Code, which provided for the schedule of "real estate,
business, and franchise taxes . . . at rates higher than those in the Metro Manila Revenue Code."
Under this ordinance, Jardine Davies Insurance Brokers, Inc. (Jardine) was assessed taxes, fees,
and charges. Jardine believed that the ordinance was void. It filed before the Regional Trial Court a
case seeking a refund for alleged overpayment of taxes. The trial court dismissed the complaint.
Aggrieved, Jardine filed before this Court a Petition for review raising pure questions of law. Ruling
on the Petition, this Court observed that Jardine essentially questioned the validity of the tax
ordinance without filing an appeal before the Secretary of Justice, in violation of Section 187 of the
Local Government Code of 1991:
In this case, petitioner, relying on the resolution of the Secretary of Justice in The Philippine Racing
Club, Inc. v. Municipality of Makati case, posited in its complaint that the ordinance which was the
basis of respondent Makati for the collection of taxes from petitioner was null and void. However, the
Court agrees with the contention of respondents that petitioner was proscribed from filing its
complaint with the RTC of Makati for the reason that petitioner failed to appeal to the Secretary of
Justice within 30 days from the effectivity date of the ordinance as mandated by Section 187 of the
Local Government Code[.]  146

The doctrine of exhaustion of administrative remedies, like the doctrine on hierarchy of courts, is not
an iron-clad rule. It admits of several well-defined exceptions. Province of Zamboanga del Norte v.
Court of Appeals has held that the principle of exhaustion of administrative remedies may be
147

dispensed in the following instances:

(1) [W]hen there is a violation of due process; (2) when the issue involved is purely a legal question;
(3) when the administrative action is patently illegal and amounts to lack or excess of jurisdiction; (4)
when there is estoppel on the part of the administrative agency concerned; (5) when there is
irreparable injury; (6) when the respondent is a department secretary whose acts, as an alter ego of
the President, bears the implied and assumed approval of the latter; (7) when to require exhaustion
of administrative remedies would be unreasonable; (8) when it would amount to a nullification of a
claim; (9) when the subject matter is a private land in land case proceedings; (10) when the rule
does not provide a plain, speedy and adequate remedy; (11) when there are circumstances
indicating the urgency of judicial intervention; and unreasonable delay would greatly prejudice the
complainant; (12) when no administrative review is provided by law; (13) where the rule of qualified
political agency applies; and (14) when the issue of non-exhaustion of administrative remedies has
been rendered moot.  148

Thus, in Alta Vista Golf and Country Club v. City of Cebu,   this Court excluded the case from the
149

strict application of the principle on exhaustion of administrative remedies, particularly for non-
compliance with Section 187 of the Local Government Code of 1991, on the ground that the issue
raised in the Petition was purely legal. 150

In this case, however, the issues involved are not purely legal. There are factual issues that need to
be addressed for the proper disposition of the case. In other words, this case is still not ripe for
adjudication.

To question the validity of the ordinance, petitioners should have first filed an appeal before the
Secretary of Justice. However, petitioners justify direct resort to this Court on the ground that they
are entangled in a "catch- 22 situation."   They believe that filing an appeal before the Secretary of
151

Justice would merely delay the process and give the City Government of Tagum ample time to
collect real property taxes.  152

The questioned ordinance was published in July 2012.   Had petitioners immediately filed an
153

appeal, the Secretary of Justice would have had enough time to render a decision. Section 187 of
the Local Government Code of 1991 gives the Secretary of Justice 60 days to act on the appeal.
Within 30 days from receipt of an unfavorable decision or upon inaction by the Secretary of Justice
within the time prescribed, aggrieved taxpayers may opt to lodge the appropriate proceeding before
the regular courts.  154

The "catch-22 situation" petitioners allude to does not exist. Under Section 166 of the Local
Government Code of 1991, local taxes "shall accrue on the first (1st) day of January of each
year."  When the questioned ordinance was published in July 2012, the City Government of Tagum
155
could not have immediately issued real property tax assessments. Hence, petitioners had ample
time within which to question the validity of the tax ordinance.

In cases where the validity or legality of a tax ordinance is questioned, the rule that real property
taxes must first be paid before a protest is lodged does not apply. Taxpayers must first receive an
assessment before this rule is triggered.   In Jardine, this Court ruled that prior payment under
156

protest is not required >>

when the taxpayer is questioning the very authority of the assessor to impose taxes:

Hence, if a taxpayer disputes the reasonableness of an increase in a real estate tax assessment, he
is required to "first pay the tax" under protest. Otherwise, the city or municipal treasurer will not act
on his protest. In the case at bench, however, the petitioners are questioning the very authority and
power of the assessor, acting solely and independently, to impose the assessment and of the
treasurer to collect the tax. These are not questions merely of amounts of the increase in the tax but
attacks on the very validity of any increase.   (Emphasis and citation omitted)
157

Given the serious procedural errors committed by petitioners, we find no genuine reason to dwell on
and resolve the other issues presented in this case. The factual issues raised by petitioners could
have been properly addressed by the lower courts had they adhered to the doctrines of hierarchy of
courts and exhaustion of administrative remedies. These rules were established for a reason. While
petitioners' enthusiasm in their advocacy may be admirable, their overzealousness has further
delayed their cause.

WHEREFORE, the Petition for Certiorari, Prohibition, and Mandamus is DISMISSED.

SO ORDERED.

MARVIC M.V.F. LEONEN

Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO DIOSDADO M. PERALTA

Associate Justice Associate Justice

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

JOSE CATRAL MENDOZA BIENVENIDO L. REYES

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE FRANCIS H. JARDELEZA

 Associate Justice Associate Justice

THIRD DIVISION

February 15, 2017

G.R. No. 186339

VIVENCIO, EUGENIO, JOJI AND MYRNA, ALL SURNAMED MATEO, Petitioners

vs.
DEPARTMENT OF AGRARIAN REFORM, LAND BANK OF THE PHILIPPINES AND MARIANO T.
RODRIGUEZ, ET AL., Respondents

DECISION

REYES, J.:

For review  is the Decision  rendered on August 4, 2008 and Resolution  issued on January 28, 2009
1 2 3

by the Court of Appeals (CA) in CA-G.R. CV No. 79581. The CA granted the appeal filed by the
herein respondents, Department of Agrarian Reform (DAR), Land Bank of the Philippines (LBP)  and
4

Mariano T. Rodriguez, et al., seeking to reverse the Decision  dated July 4, 2002 of the Regional
5

Trial Court (RTC) of Sorsogon City, Sorsogon, Branch 52, sitting as Special Agrarian Court (SAC), in
Civil Case No. 97-6331, a complaint for determination of just compensation filed by the herein
petitioners, Vivencio Mateo (Vivencio), Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos
(collectively, the Mateos). The SAC ordered the LBP to pay the Mateos the amount of
₱71,143,623.00 as just compensation for 112.3112 hectares of coconut and rice lands (subject
property) covered by Transfer Certificate of Title (TCT) No. T-22822, which was expropriated by the
DAR for distribution to farmer-beneficiaries under the provisions of Republic Act (R.A.) No.
6657,  otherwise known as the Comprehensive Agrarian Reform Program (CARP) Law of 1988.
6

Antecedents

The CA aptly summed up the facts of the case before the rendition of the SAC decision as follows:

[The Mateos] were the registered owners of [coconut and rice lands] with [a total area] of 1,323,112
square meters situated at Fabrica, Bacon, Sorsogon and [were] covered by TCT No. T-22822. A
portion of the land[s] was brought under the coverage of the [CARP] of the government and for this
reason[,] the [DAR] entered the premises sometime in June 1994. [LBP] valued [the Mateos'] land at
fifty-two thousand pesos (₱52,000.00) per [ha]. [The Mateos,] however[,] rejected the LBP's
valuation.
On April 30, 1997, [the Mateos] filed a complaint against LBP, [DAR], and the farmer beneficiaries of
the land for just compensation. The case was docketed as Civil Case No. 97-6331 and raffled to the
[SAC], presided by respondent Judge Honesto A. Villamor. 7

The LBP and DAR filed their respective answers arguing that since no summary administrative
proceedings to determine the amount of just compensation had been conducted yet, the complaint
of the Mateos was premature. 8

Pre-trial ensued and was terminated. The SAC granted the request of the parties for the
appointment of two commissioners, namely, Mr. Jesus Empleo and Engr. Florencio Dino (Engr.
Dino), to represent the LBP and the Mateos, respectively. 9

Among the evidence offered by the Mateos during the trial were: (a) the testimonies of their father,
Dr. Eleseo Mateo, Engr. Dino, farmer Manuel Docot and caretaker Danilo Federio; (b) TCT No. T-
22822; (c) Memorandum of Valuation (MoV), Claim Folder Profile and Valuation Summary of
Agricultural Land; (d) deeds of sale covering two parcels of land less than two ha in size in
Sorsogon, which were purchased for ₱300,000.00 and ₱400,000.00 per ha; (e) newspaper clipping
of Eduardo Cojuangco, who was selling his land in Sorsogon for ₱350,000.00 per ha; (f) Engr. Dino's
Report; and (g) deed of sale of a lot in Cabi-an, Sorsogon bought by the government for
₱245,000.00 per ha. 10

On the other hand, the DAR presented: (a) the testimonies of agriculturist Romeo Brotamante,
government employee Ireneo Defeo and farmer Cresenciano Lagajeno; (b) a Field Investigation
Report dated March 29, 1996; (c) ledger cards bearing dates from December 2, 1994 to June 9,
1997; and (d) two pass books, the second of which indicated withdrawals in the total amount of
₱601,789.97.  The LBP, on its part, offered (a) the testimony of Monita Balde, and (b) a Claims
11

Valuation and Processing Form. 12

Ruling of the SAC

The decretal portion of the SAC Decision  dated July 4, 2002 reads:
13

WHEREFORE, premises considered, judgment is hereby rendered:

1. Fixing the amount of SEVENTY-ONE MILLION, ONE HUNDRED FORTY-THREE THOUSAND,

SIX HUNDRED TWENTY-THREE ([₱]71,143,623.00) Pesos, Philippine currency[,] to be the just
compensation for the l12[.]3112 [has] of agricultural land situated at Fabrica, District of Bacon, City
of Sorsogon covered by TCT No. T-22822 owned by the [Mateos] which property was taken by the
government pursuant to the [CARP] of the government [as] provided by R.A. N[o]. 6657.

2. Ordering the [LBP] to pay the [Mateos] the amount of Seventy-One Million, one Hundred forty-
three thousand[,] six hundred twenty-three (₱71,143,623.00) Pesos[,] Philippine currency[,] in the
manner provided by R.A. No. 6657 by way of full payment of the said just compensation after
deducting whatever amount [was] previously received by the [Mateos] from the [LBP] as part of the
just compensation.

3. Without pronouncement as to cost.

SO ORDERED. 14

In rendering its judgment, the SAC rationalized as follows:

Under R.A. No. 6657, it provides that in determining the just compensation, the initial determination
thereof may be agreed upon by the [LBP], the official entity made responsible under Executive Order
No. 405, series of 1990 to determine the valuation and compensation of agricultural landholdings
made under the coverage of the CARP and the [l]andowner. In the event of disagreement, the
matter is referred to the DAR Adjudication Board for further determination. If no agreement is
reached, the landowner may elevate the matter for judicial determination.

Initially, the [DAR] Adjudicat[ion] Board x x x valued the prope1iy in question adopting the [LBP's]
valuation in the amount of ₱6,l 12,598.86 for the 72.2268 [has] and the amount of ₱2,949,313.14 for
the 36.3196 [ha] but these valuation was rejected by [the Mateos].

After due consideration of [Engr. Dino's] Repmi submitted to the Court[,] as well as the [Report of
Empleo] and the Pass Book evidencing the Lease Rentals presented by the defendant DAR, as well
as the testimon[ies] of [the Mateos] and their witnesses and also considering the applicable law, the
Sanggunian Panlalawigan Resolution No. [0]3-99 providing for an updated schedule of fair market
value of real properties in the Province of Sorsogon and the jurisprudence on the matter, the Comi
hereby adopts the commissioner's report submitted by Engr. [Dino] as part of this decision. The
Court also took into consideration the evidence submitted on comparable sales transaction of the
nearby landholdings executed by Jose Maria Simo, Jr. in favor of the National Housing Authority
selling the property at Two Million[,] Three Hundred Thirty-three Thousand[,] One Hundred Seventy
Pesos (₱2,335,170.00) Philippine currency, for the 159,968 square meters land x x x.  The repo1i of
15

[Engr. Dino] x x x represents only the fair market value of the land but does not include the value of
the coconut trees and the actual production of the coconut trees. Although it valued the
improvements in the property for acquisition, it did not include the value of the trees/hectare and the
actual production of the coconut trees as well as the potentials of the land in term[ s] of productivity
and proximity to the center of commerce, the City of Sorsogon.

Commissioner's Report of [Engr.] Dino:

xxxx

ACCESSIBILITY AND LOCATION

The subject property is located in Barangay San Isidro, Sorsogon. It is barely one kilometer away
from the Bacon Airport and the Sorsogon-Bacon Highway. It could be reached through the San
Vicente-Buhatan Road - a dormant overland artery linking the district of Bacon to the City of
Sorsogon.

PROPERTY APPRAISAL

Provincial Ordinance No. 03-99, also known as "An Ordinance Providing for an Updated Schedule of
Fair Market Values of Real Properties in the Province of Sorsogon" was used as the basis for
determining the unit values of lands and other improvements found in the subject real property.
However, with respect to the appraisal of timber producing tree species, the approximate extractable
lumber was multiplied by the prevailing market price per board foot.

[Engr. Dino made a detailed assessment computing the subject property's Fair Market Value to be
₱4,764,323.00, and the fruit-bearing and timber-producing trees found thereon amounting to
₱806,870.00 and ₱445, 110.00, respectively. Engr. Dino, thus, concluded that just compensation for
the subject property should amount to ₱6,016,303.00.]
On the matter of the land valuation submitted by [Engr. Dino] for the [Mateos], the Court considers
said land valuation too low considering that the land subject for acquisition is within the city limit of
the City of Sorsogon and as shown by the evidence of the [Mateos], the land was a subject of a
housing subdivision and can command a price of not less than ₱350,000.00 per [ha]. The area for
acquisition is ideal not only for housing subdivision but as expansion for commercial district of the
City of Sorsogon. It has all the potentials of a city within the city. It has abundant water supply and
accessible to the center of commerce. The [Mateos] also submitted evidence of comparable sales
transactions of the nearby landholdings executed by Jose Maria Simo, Jr. in favor of the National
Housing Authority selling the property with an area of 159,968 sq. m. for the amount of ₱2,335,
170.00 x x x. As the property is within the city of Sorsogon, the selling price of land is ₱l,000.00 per
square meter. The land subject of acquisition is an agricultural land but it cannot be denied that [in]
the present time[,] the land commands [a] higher price especially that the exchange rate of peso to
dollar is 1 dollar to 50 pesos. Evidence also show that the [parents of the Mateos] acquired the
property for ₱l,000.00 per [ha] and it took them three (3) years to clear the property and after another
three years, they planted coconuts which are now fruit bearing trees. x x x[.]

xxxx

[The SAC then adopted Engr. Dino's valuation of the improvements found in the subject property
and made estimates of the total amount the coconuts, copra and rice harvested therefrom could
have fetched from 1994-2002. The SAC also assessed the price of the subject property to be
₱500,000.00 per ha.]

RECAPITULATION:

₱54,000,000.00 - Fair Market Value of 108 hectares coconut land at

₱500,000.00

13,057,397.00 - Net produce of copra from 1994 to 2002

806,820.00 - Value of the improvements inside the 108.0000

hectares

445,110.00 - Value of the coconut trunk[s]

₱68,309,327.00 - Total value of the 108 [has] coconut land

1,750,000.00 -Fair Market Value of 3.7649 [has] of Riceland at

₱500,000.00

1,686,085.00 - Net Produce of the Riceland from year 1994 to 2002

₱71,745,412.00 - Grand Total Value of the Coconut land and Riceland

with an area of 112.3112 [has]

 601,789.0 - less the amount previously received by [the Mateos]

0 as lease rentals

₱71,143,623.00 - Total amount of Just Compensation 16

Proceedings Before the CA

The LBP and the DAR both filed notices of appeal, but no brief was filed by the latter before the CA. 17

On the LBP's part, it mainly argued that the complaint of the Mateos was premature as the DAR
Adjudication Board (DARAB) had not yet made an administrative valuation of the subject property
and that the SAC, in determining just compensation, failed to consider the guidelines provided for in
Section 17  of R.A. No. 6657.
18 19

The Mateos sought the dismissal of the appeal. They claimed that had the DAR promptly sent them
notices of acquisition and made preliminary valuation of the subject property, they would have
complied with the administrative procedures and found no need to institute an action before the
SAC. Further, while Section 50  of R.A. No. 6657 grants the DAR the primary 'jurisdiction to
20

adjudicate agrarian reform matters, Section 57  of the same statute confers original and exclusive
21

jurisdiction over the RTCs as SACs to take cognizance of petitions for determination of just
compensation of landowners. 22

On August 4, 2008, the CA rendered the herein assailed Decision  setting aside the SAC's judgment
23

and dismissing without prejudice the complaint of the Mateos. The CA explained that:

Since the DARAB is clothed with quasi-judicial authority to make a preliminary determination of just
compensation of lands acquired under R.A. No. 6657, x x x and it appearing from the records and
[the Mateos'] own admission that [the] said administrative agency had not yet taken cognizance of,
and passed upon the issue of just compensation when [the Mateos] prematurely filed with the
court a quo the complaint for determination of just compensation, thus failing to exhaust the
prescribed administrative remedy and, in the process, preventing the DARAB from complying with
[the] said administrative process which is mandatory, We resolve to grant the appeal.

Jurisprudence teems with pronouncements that before a party is allowed to seek the intervention of
the court, it is a pre-condition that he should have availed of all the means of administrative
processes afforded him.x x x The premature invocation of [the] court's intervention is fatal to one's
cause of action[.] x x x[.]

xxxx

Anent the issue on just compensation, Section 17 of [R.A.] No. 6657 provides the guideposts for its
determination[.] x x x[.]

xxxx

As defined, just compensation is the full and fair equivalent of the property taken from its owner by
the expropriator. While We agree with the trial court's submission that "the measure is not the taker's
gain but the owner's loss'', and that the word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the property to be taken
shall be real, substantial, full and ample, We likewise subscribe to appellant LBP's contention that
"just compensation", in contemplation of agrarian reform, is quite different from just compensation
involving an ordinary exercise of the power of eminent domain. Thus, as correctly pointed out by
LBP, just compensation must be viewed in the context of social justice enshrined in the fundamental
law to make it easier for the disadvantaged to be able to obtain land.

Moreover, it is clear from the decision of the trial court that aside from the court a quo's lack of
jurisdiction to take cognizance of the present case, its computation totally disregarded Section 17 of
R.A. No. 6657, which, as earlier reproduced, prescribes the factors for determining just
compensation of lands acquired thereunder.  (Citations omitted)
24

In the Resolution  dated January 28, 2009, the CA denied the motion for reconsideration  filed by
25 26

the Mateos.

Issues

Aggrieved, the Mateos are before this Court essentially raising the following issues: 27

1. Whether or not the CA erred in negating the jurisdiction of the RTC, as a SAC, to determine in the
first instance and in the absence of the conduct of prior administrative proceedings, questions of just
compensation to be paid to landowners.

2. Whether or not the CA erroneously held that the SAC disregarded the provisions of Section 17 of
R.A. No. 6657 in determining the amount of just compensation to be paid for the subject property.

In support of the instant petition, the Mateos, citing LBP v. Wycoco,  reiterate that even without the
28

DAR's final valuation of the agricultural land for expropriation, the RTC, as a SAC, can validly take
cognizance of a case for determination of just compensation in accordance with Section 57 of R.A.
No. 6657. Otherwise, if the DAR would vest in administrative officials' original jurisdiction in
compensation cases, the jurisdiction conferred upon the RTC, as a SAC, by the said Section 57 is
undermined. 29

Additionally, the Mateos argue that the rule on exhaustion of administrative remedies admits of
exceptions, one of which is when there are circumstances indicating the urgency of judicial
intervention, like in the case at bar. The Mateos were prematurely deprived of the subject property in
1994, and as compensation therefor, a trust account was belatedly created for them in 1997 or three
years after the illegal entry.
30

The Mateos likewise assert that the SAC had conscientiously made a fair determination of the
subject property's value on the basis of the factors enumerated in Section 17 of R.A. No. 6657. The
SAC considered the following: (a) nature and actual use of the subject property; (b) current value of
similar property; (c) annual income derived from the subject property at the time of taking by the
DAR; (d) cost of acquisition of the land and sworn valuation by the Mateos, both in relation to
currency inflations; (e) Provincial Schedule of Fair Market Value (FMV) of Real Property in the
Province of Sorsogon; and (f) just compensation for the damages incurred by the Mateos as a
consequence of the DAR and the LBP's concerted acts of taking the subject property without
compliance with due process. It was, thus, error for the CA to haphazardly conclude, without
substantiation, that the SAC disregarded the legal requisites in determining just compensation. 31

In their comments,  the DAR and the LBP seek the dismissal of the instant petition.
32

On its part, the DAR, citing Republic of the Philippines v. Express Telecommunication Co.,
Inc.,  emphasizes that the premature invocation of the court's intervention is fatal to a cause of
33

action.  Further, the Market Data Approach used by the SAC in determining just compensation for
34

the subject property is not in accord with Section 17 of R.A. No. 6657 and the formula fixed by law in
arriving at such valuations. 35

The LBP, on the other hand, quoting Hongkong & Shanghai Banking Corporation, Ltd. v. G.G.
Sportswear Manufacturing Corporation,  stresses that the doctrine of exhaustion of administrative
36
remedies is a cornerstone of our judicial system; hence, it cannot be disregarded.  The LBP also
37

assailed the valuation of just compensation made by the SAC, which erroneously considered factors
not provided for in Section 17 of R.A. No. 6657, such as the subject property's potential use and
comparative sales of adjacent non-agricultural lots.  The LBP adds that in determining just
38

compensation, the SAC instead fatally overlooked the mandatory formula prescribed in DAR
Administrative Order (AO) No. 6, series of 1992. 39

Ruling of the Court

The instant petition is partially meritorious.

On jurisdiction and the doctrine of

exhaustion of administrative
remedies

Section 50 of R.A. No. 6657, in part, provides that the DAR is vested with ''primary jurisdiction to
determine and adjudicate agrarian reform matters" and "exclusive original jurisdiction over all
matters involving the implementation of agrarian reform" except those falling under the jurisdiction of
the Department of Agriculture (DA) and the Department of Environment and Natural Resources.

Section 57, on the other hand, confers "special" and "original and exclusive" jurisdiction to the SAC
over all petitions of landowners for the determination of just compensation.

In Wycoco,  the Court outlined the procedure involved in determining just compensation for
40

agricultural landowners, viz.:

Under Section 1 of Executive Order No. 405, Series of 1990, the [LBP] is charged with the initial
responsibility of determining the value of lands placed under land reform and the just compensation
to be paid for their taking. Through a notice of voluntary offer to sell (VOS) submitted by the
landowner, accompanied by the required documents, the DAR evaluates the application and
determines the land's suitability for agriculture. The LBP likewise reviews the application and the
supporting documents and determines the valuation of the land. Thereafter, the DAR issues the
Notice of Land Valuation to the landowner. In both voluntary and compulsory acquisition, where the
landowner rejects the offer, the DAR opens an account in the name of the landowner and conducts a
summary administrative proceeding. If the landowner disagrees with the valuation, the matter may
be brought to the [RTC] acting as a [SAC]. This in essence is the procedure for the determination of
just compensation.  (Citations omitted)
41

Anent the application of Sections 50 and 57 of R.A. No. 6657, in relation to the proper procedure
which must be followed in cases involving determination of just compensation for
landowners, Ramon Alfonso v. LBP and DAR  is emphatic that:
42

In San Miguel Properties, Inc. v. Perez, we explained the reasons why Congress, in its judgment,
may choose to grant primary jurisdiction over matters within the erstwhile jurisdiction of the courts, to
an agency:

The doctrine of primary jurisdiction bas been increasingly called into play on matters demanding the
special competence of administrative agencies even if such matters are at the same time within the
jurisdiction of the courts. A case that requires for its determination the expertise, specialized
skills, and knowledge of some administrative board or commission because it involves
technical matters or intricate questions of fact, relief must first be obtained in an appropriate
administrative proceeding before a remedy will be supplied by the courts although the matter
comes within the jurisdiction of the courts. The application of the doctrine does not call for the
dismissal of the case in the court but only for its suspension until after the matters within the
competence of the administrative body are threshed out and determined.

xxxx

Rule 43 of the Revised Rules of Court, which provides for a uniform procedure for appeals from a
long list of quasi-judicial agencies to the [CA], is a loud testament to the power of Congress to
vest myriad agencies with the preliminary jurisdiction to resolve controversies within their
particular areas of expertise and experience.

In fact, our landmark ruling in Association has already validated the grant by Congress to the
DAR of the primary jurisdiction to determine just compensation. There, it was held that RA
6657 does not suffer from the vice of the decree voided in EPZA, where the valuation scheme was
voided by the Court for being an "impermissible encroachment on judicial prerogatives." x x x[.]

xxxx

Unlike EPZA, and in answer to the question raised in one of the dissents, the scheme provided by
Congress under RA 6657 does not take discretion away from the courts in determining just
compensation in agrarian cases. Far from it. In fact, the DAR valuation formula is set up in such
away that its application is dependent on the existence of a ce1iain set of facts, the ascertainment of
which falls within the discretion of the court.

xxxx

x x x Congress thus clearly conceded that courts have the power to look into the "justness" of the
use of a formula to determine just compensation, and the "justness" of the factors and their weights
chosen to flow into it.

In fact, the regulatory scheme provided by Congress in fact sets the stage for
a heightened judicial review of the DAR's preliminary determination of just compensation
pursuant to Section 17 of RA 6657. In case of a proper challenge, SACs are actually empowered
to conduct a de novo review of the DAR's decision. Under RA 6657, a full trial is held where SA Cs
are authorized to (1) appoint one or more commissioners, (2) receive, hear, and retake the testimony
and evidence of the parties, and (3) make findings of fact anew. In other words, in exercising its
exclusive and original jurisdiction to determine just compensation under RA 6657, the SAC is
possessed with exactly the same powers and prerogatives of [the RTC] under Rule 67 of the
Revised Rules of Court.

In such manner, the SAC thus conducts a more exacting type of review, compared to the procedure
provided either under Rule 43 of the Revised Rules of. Court, which governs appeals from decisions
of administrative agencies to the [CA], or under Book VII, Chapter 4, Section 25 of the Administrative
Code of 1987, which provides for a default administrative review process. In both cases, the
reviewing court decides based on the record, and the agency's findings of fact are held to be binding
when supported by substantial evidence. The SAC, in contrast, retries the whole case, receives new
evidence, and holds a full evidentiary hearing.

xxxx
Justice Velasco correctly pointed out this Court's statement in Belista excepting petitions for
determination of just compensation from the list of cases falling within the DAR's original and
exclusive jurisdiction. Justice Velasco is also correct when he stated that the Court, in Heirs of
Vidad, summarized and affirmed rulings which "invariably upheld the [SAC's] original and exclusive
jurisdiction x x x notwithstanding the seeming failure to exhaust administrative remedies before the
DAR." Later on, he would point out, again correctly, the seemingly conflicting rulings issued by this
Court regarding the imposition upon the courts of a formula to determine just compensation.

xxxx

Justice Velasco reads both Belista and Heirs of Vidad as bases to show that SACs possess
original and exclusive jurisdiction to determine just compensation, regardless of prior
exercise by the DAR of its primary jurisdiction.

We do not disagree with the rulings in Belista and Heirs of Vidad, both of which acknowledge

the grant of primary jurisdiction to the DAR, subject to judicial review. We are, however, of
the view that the better rule would be to read these seemingly conflicting cases without
having to disturb established doctrine.

Belista,  for example, should be read in conjunction with Association,  the landmark case
directly resolving the constitutionality of RA 6657. In Association, this Court unanimously
upheld the grant of jurisdiction accorded to the DAR under Section 16  to preliminarily
43

determine just compensation. This grant of primary jurisdiction is specific, compared to the
general grant of quasi-judicial power to the DAR under Section 50. Belista,  which speaks of
exceptions to the general grant of quasi-judicial power under Section 50, cannot be read to
extend to the specific grant of primary jurisdiction under Section 16.

xxxx

Considering the validity of the grant of primary jurisdiction, our ruling in Heirs of Vidad should also be
reconciled with the rationale behind the doctrine of primary jurisdiction. In this sense, neither
landowner nor agency can disregard the administrative process provided under the law
without offending the already established doctrine of primary jurisdiction:

xxxx

Section 18, on the other hand, merely recognizes the possibility that the landowner will disagree with
the DAR/LBP's offer. In such case, and where the landowner elevates the issue to the court, the
court needs to rule on the offer of the DAR and the LBP. Since the government's offer is required by
law to be founded on Section 1 7, the court, in exercising judicial review, will necessarily rule on the
DAR determination based on the factors enumerated in Section 17.

Now, whether the court accepts the determination of the DAR will depend on its exercise of
discretion. This is the essence of judicial review. That the court can reverse, affirm or modify the
DAR/LBP's determination cannot, however, be used to argue that Section 18 excuses observance
from Section 17 in cases of disagreement.  (Citations omitted, emphasis ours and italics in the
44

original)

Alfonso  is unequivocal that administrative remedies cannot be dispensed with and direct resort to
45

the SAC is proscribed. However, the foregoing rule cannot be applied in the case at bar for reasons
discussed below.
While the Court recognizes the primacy of the doctrine of exhaustion of administrative remedies in
our judicial system, it bears emphasizing that the principle admits of exceptions, among which is
when there is unreasonable delay or official inaction that irretrievably prejudices a
complainant.  This exception is attendant herein where the LBP and the DAR entered the property
46

of the Mateos sometime in 1994,  but deposited cash and Agrarian Reform Bonds as payment
47

therefor only on December 13, 1996 and February 11, 1997.  The LBP and the DAR were
48

indisputably aware that the Mateos rejected the price offered as just compensation for the subject
property. Still, at the time the Mateos filed their suit before the SAC, no summary administrative
proceeding was yet initiated by the DAR to make further valuation. The SAC even had to issue no
less than three orders dated November 12, 1997, January 7, 1998 and March 18, 1998 for the DAR
to conduct the necessary proceedings.  DAR's delay and inaction had unjustly prejudiced the
49

Mateos and precluding them from filing a complaint before the SAC shall result in an injustice, which
the law never intends.

It bears stressing as well that on December 21, 2000 and March 22, 2001, while trial before the SAC
was underway, the DARAB rendered decisions in the summary administrative proceedings
upholding the valuations previously made by the LBP and rejected by the Mateos.  At that point,
50

referring the case back :to the DAR would have been completely moot as any challenge raised
against the valuation shall be cognizable by the SAC. Clearly, there were no more administrative
remedies to exhaust.

Prescinding from the above, the CA erred in ordering the dismissal of the Mateos' complaint before
the SAC. The doctrine of exhaustion of administrative remedies finds no application in the instant
case where the DAR took no initiative and inordinately delayed the conduct of summary
administrative proceedings, and where during the pendency of the case before the SAC, the DARAB
rendered decisions affirming the LBP's prior valuations of the subject property.

On non-compliance with Section 17

of R.A. No. 6657 and DAR AOs,
and the consequent remand of the
case to the SAC

In Alfonso,  the Court summed up the guidelines in just compensation cases, viz. :

51

First, in determining just compensation, courts are obligated to apply both the compensation
valuation factors enumerated by the Congress under Section 17 of RA 6657 and the basic formula
laid down by the DAR.x x x[.]

xxxx

Second, the formula, being an administrative regulation issued by the DAR pursuant to its rule-
making and subordinate legislation power under RA 6657, has the force and effect of law. Unless
declared invalid in a case where its validity is directly put in issue, courts must consider their use and
application.x x x[.]

xxxx

Third, courts, in the exercise of their judicial discretion, may relax the application of the formula to fit
the peculiar circumstances of a case.  They must, however, clearly explain the reason for any
1avvphi1

deviation; otherwise, they will be considered in grave abuse of discretion.x x x[.]

 xxxx

When acting within the parameters set by the law itself, the RTC-SACs, however, are not strictly
bound to apply the DAR formula to its minute detail, particularly when faced with situations that do
not warrant the formula's strict application; they may, in the exercise of their discretion, relax the
formula's application to fit the factual situations before them. They must, however, clearly explain the
reason for any deviation from the factors and formula that the law and the rules have provided.

The situation where a deviation is made in the exercise of judicial discretion should at all times be
distinguished from a situation where there is utter and blatant disregard of the factors spelled out by
law and by the implementing rules. For in [the latter case], the RTC-SAC's action already amounts to
grave abuse of discretion for having been taken outside of the contemplation of the law.  (Citations
52

and emphasis omitted)

In the case at bench, the SAC's deviation from the prescribed procedures in determining just
compensation due to the Mateos is evident as discussed hereunder.

The SAC made no exact finding as to when the subject property was taken by the government.
Without anything more, the SAC merely mentioned Vivencio's testimony that in the early part of June
of 1994, the DAR entered the subject property.  However, the SAC did not discuss when the subject
53

property was actually transferred through the issuance of emancipation patents, certificates of land
ownership awards or any other titles to the farmer beneficiaries. The dates are significant as they are
to be considered as the time of taking, and just compensation must be valued in relation thereto. 54

Reference to any DAR AOs or formulas is conspicuously absent as well. Note that on October 30,
1992, the DAR issued AO No. 6, which was later amended by AO No. 11, series of 1994.  The 55

applicability of AO No. 11 in the case at bar is, however, still uncertain pending the SAC 's
determination of when: the subject property was actually transferred to the farmer beneficiaries.
Further, prior to the conclusion of the Mateos' just compensation complaint before the SAC, the DAR
issued AO No. 5, series of 1998 on April 15, 1998.  Item II(I) thereof, however, provides that "all
56

claims whose [MoV] have not yet been forwarded to DAR shall be valued in accordance with this
[AO]." Considering that in the case of the Mateos, the MoV was forwarded by the LBP to the DAR on
September 30, 1996,  AO No. 6 and not AO No. 5, shall apply.
57

Item II(A) of AO No. 6 provides:

A. There shall be one basic formula for the valuation of lands covered by [Voluntary Offer to Sell] or
[Compulsory Acquisition] regardless of the date of offer or coverage of the claim:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where: LV = Land Value

  CNI = Capitalized Net Income

  CS = Comparable Sales

  MV = Market Value per Tax Declaration

The above formula shall be used if all the three factors are present, relevant, and applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:

LV = (CNI x 0.9) + (MV x 0.1)

A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:

LV =(CS x 0.9) + (MV x 0.1)

A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be:

LV=MVx2

A. 4 In all the above, the computed value using the applicable formula or the Declared Value by
Landowner (DV), whichever is lower, shall be adopted as the Land Value.

DV shall refer to the amount indicated in the Landowner's offer or the Listasaka declaration,
whichever is lower, in case of VOS. In case of CA, this shall refer to the amount indicated in the
Listasaka. Both LO's offer and Listasaka shall be grossed-up using the immediately preceding
semestral Regional Consumer Price Index (RCPI), from the date of the offer or the date of Listasaka
up to the date of receipt of claim folders by LBP from DAR for processing.

Items B, C and D of AO No. 6 also indicate very detailed guidelines on how Capitalized Net Income
(CNI), Comparable Sales (CS) and Market Value per Tax Declaration (MV) shall be computed.

However, in the valuation of the subject property owned by the Mateos, the SAC did not even
minutely refer to any formula mandated to be applied by pertinent DAR regulations. There was
also no explanation at all as to why the case should be excepted from the application of AO No. 6.

Further, the SAC did not specifically lay down its basis in concluding that the FMV of the subject
property is ₱500,000.00 per ha. The SAC referred to Sanggunian Panlalawigan Resolution No. 03-
99, which provided for an updated schedule of FMV s of real properties in the Province of
Sorsogon.  However, it is settled that the valuation of the property should be pegged at the time of
58

taking, not of filing of the complaint, pendency of the proceedings or rendition of judgment. 59

As to the CS transactions which were considered as evidence, the SAC did not elaborate if they had
indeed satisfied the guidelines set forth by AO No. 6 as regards their sizes and locations.60

Anent the productivity of the subject property, the SAC made estimates, the bases of which are
likewise unclear. The estimated earnings were also unwarrantedly cumulated covering the period of
1994 to 2002.  Note that in Item II(B) of AO No. 6, in computing CNI, only "one years average gross
61

production immediately preceding the date of offer in case of Voluntary Offer to Sell or date of notice
of coverage in case of CA" is included as among the factors.

Inevitably then, the Court is constrained to remand the case to the SAC to determine the just
compensation due to the Mateos. As bases therefor, Section 17 of R.A. No. 6657, AO No. 6 and
pertinent DAR AOs explicitly providing for their application over pending cases involving just
compensation for lands taken before the effectivity of the AOs, shall be applied.

It is significant to note that R.A. No. 6657 was first amended by R.A. No. 8532,  which augmented
62

the funds in the implementation of the CARP. Thereafter, Section 7 of R.A. No. 9700  amended
63

Section 17 of R.A. No. 6657, which now reads as follows:

Sec. 17. Determination of Just Compensation. -In determining just compensation, the cost of
acquisition of the land, the value of the standing crop, the current value of like properties, its nature,
actual use and income, the sworn valuation by the owner, the tax declarations, the assessment
made by government assessors, and seventy percent (70%) of the zonal valuation of the Bureau of
Internal Revenue (BIR), translated into a basic formula by the DAR, shall be considered, subject to
the final decision of the proper court. The social and economic benefits contributed by the farmers
and the farmworkers and by the Government to the property as well as the non-payment of taxes or
loans secured from any government financing institution on the said land shall be considered as
additional factors to determine its valuation. (Underscoring ours)

On the other hand, the transitory provision of DAR AO No. 2, series of 2009,  in part, provides
64

that "with respect to land valuation, all Claim Folders received by LBP prior to July 1, 2009 shall be
valued in accordance with Section 17 of R.A. No. 6657 prior to its amendment by R.A. No.
9700." Accordingly then, in LBP v. Heirs of Jesus Alsua,  the Court "excepted from the application
65

of the amended Section 17 all claim folders received by LBP prior to July 1, 2009, which shall be
valued in accordance with Section 17 of [R.A. No.] 6657, as amended, prior to its further
amendment by [R.A.] No. 9700." 66

In the case of the Mateos, the Claim Folder was received by LBP earlier than July 1, 2009; hence,
the amendments in Section 17, as introduced by R.A. No. 9700, shall not be applicable. Just
compensation shall be determined in accordance with Section 17 of R.A. No. 6657 prior to its
amendment by R.A. No. 9700.

Note too that the LBP valued the subject property at more or less ₱52,000.00 per ha without
considering factors relating to productivity and the prices of comparable parcels of land.   Engr.
67

Dino, on his part, determined that the entire subject property is ₱6,016,303.00, sans ample
substantiation of the amounts used.  The SAC valued the subject prope1iy at ₱71,143,623.00,
68

without using any formulas mandated by any DAR AO or explaining why it dispensed with the
application thereof.

Repetitive as it may be, the SAC is reminded that the valuation shall be based at the time of taking
of the subject property, not the date of the filing of or period of pendency of the suit, or the rendition
of judgment. While the valuation may prove outdated, it should be stressed that the purpose of
payment is not to reward the owners for the property taken but to compensate them for the loss
thereof.69

In applying the basic formula prescribed by the DAR in determining just compensation, it is important
that the values to be used are documented, verified and accurate. In considering CNI as a factor,
information obtained from government agencies such as the DA and the Philippine Coconut
Authority, tasked to regulate or monitor agricultural production, shall be useful. Anent the
determination of MV and CS, the parties' mere allegations, without substantiation, do not suffice.

Moreover, since the Mateos were deprived of the subject property without prompt payment of just
compensation, if indeed as alleged the transfers to the farmer beneficiaries were made in 1994, the
DAR, as the institution tasked to initiate the summary administrative valuation proceedings, violated
proprietary rights. Hence, the Mateos should be entitled to actual or compensatory damages, which
in this case should be the legal interest on the value of the subject property at the time of taking up
to full payment.70

The following facts need to be emphasized: (a) the Mateos claimed that DAR's entry into the subject
property occurred in June 1994; (b) the complaint for just compensation was filed before the SAC on
April 30, 1997; and (c) deposits by LBP of cash and Agrarian Reform Bonds in favor of the Mateos
were made on December 13, 1996 and February 11, 1997.

The Court has allowed the grant of legal interest in expropriation cases where there is delay in the
payment since the just compensation due to the landowners was deemed to be an effective
forbearance on the part of the State. Legal interest shall be pegged at the rate of 12% interest per
annum from the time of taking until June 30, 2013 only. Thereafter, or beginning July 1, 2013, until
fully paid, interest shall be at six percent (6%) per annum in line with the amendment introduced by
Bangko Sentral ng Pilipinas-Monetary Board Circular No. 799,  series of 2013.
71 72

IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision and

Resolution dated August 4, 2008 and January 28, 2009, respectively, of the Court of Appeals in CA-
G.R. CV No. 79581 are hereby REVERSED only insofar as they dismissed the complaint for just
compensation filed by Vivencio Mateo, Eugenio Mateo, Joji Mateo Morales and Myrna Mateo
Santos. However, the petition is DENIED insofar as it seeks to sustain the valuation of the subject
property in Civil Case No. 97-6331 made by the Regional Trial Court of Sorsogon City, Sorsogon,
Branch 52, sitting as Special Agrarian Court.

The case is hereby REMANDED to the trial court to determine with utmost dispatch the just
compensation due to Vivencio Mateo, Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos
strictly in accordance with Section 17 of Republic Act No. 6657 prior to its amendment by Republic
Act No. 9700, pertinent Administrative Orders issued by the Department of Agrarian Reform, and the
guidelines set forth in this Decision. To be deducted from the final valuation is the total amount
withdrawn by Vivencio Mateo, Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos from
the cash and Agrarian Reform Bonds deposited in their names by the Land Bank of the Philippines.
The remaining balance shall be subject to annual legal interest at the rate of twelve percent (12%)
from the time of taking until June 30, 2013, and six percent (6%) from July 1, 2013 until full payment.
The trial court is directed to SUBMIT a report on its findings and recommendations within SIX (6)
MONTHS from notice hereof.

SO ORDERED.

BIENVENIDO L. REYES
Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson

SECOND DIVISION
 G.R. No. 221134, March 01, 2017

OFFICE OF THE OMBUDSMAN-MINDANAO, Petitioner, v. RICHARD T. MARTEL

AND ABEL A. GUIÑARES, Respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari seeking to reverse and set aside the February
4, 2015 Decision1 and the October 16, 2015 Resolution2 of the Court of Appeals (CA) in
CA-G.R. SP No. 05473-MIN, which reduced the administrative penalty imposed upon
respondents Richard T. Martel (Martel) and Abel A. Guiñares (Guiñares) by the Office of
the Ombudsman-Mindanao (Ombudsman) in its February 25, 2011 Decision and
February 28, 2013 Order in Case No. OMB-M-A-05-450-L.

The Antecedents

In 2003, Martel was the Provincial Accountant of Davao del Sur while Guiñares was its
Provincial Treasurer. They both served as ex officio members of the Provincial Bids and
Awards Committee (PBAC) of Davao del Sur, together with Victoria Givero Mier (Mier),
Provincial Budget Officer; Edgar Cajiling Gan (Gan), Provincial Board Member; and Allan
Putong (Putong), Provincial General Services Officer (PGSO).

In the Purchase Requests, dated January 24, 2003, February 18, 2003 and July 15,
2003, the Office of the Governor of Davao del Sur requested the acquisition of five
service vehicles, namely: two (2) Toyota Hilux 4x4 SR5, one (1) Mitsubishi L300 Exceed
DX, and two (2) Ford Ranger XLT 4x4 M/T, for the use of the Governor and the Vice-
Governor.

The procurement of the five (5) vehicles was not subjected to a public bidding as it was
immediately effected through direct purchase pursuant to the recommendation of
Putong as PGSO. The recommendation was approved by the members of the PBAC,
which included Martel and Guiñares. Accordingly, the said vehicles were purchased and
delivered to the provincial government. The disbursement vouchers for the five (5)
vehicles were signed by Martel and Guiñares as Provincial Accountant and Provincial
Treasurer, respectively.3

Subsequently, a concerned citizen wrote to the Ombudsman, reporting the lack of

public bidding of the said procurement. Acting thereon, the Ombudsman launched an
investigation concerning the acquisition of the said vehicles.

The Ombudsman's Ruling

In its Decision, dated June 14, 2012, the Ombudsman found Martel, Guiñares, Putong,
and Mier guilty of grave misconduct and gross neglect of duty. The Ombudsman opined
that these PBAC officers improperly resorted to direct purchase, completely
disregarding the required public bidding. Gan, however, was relieved of his
administrative liability due to his re-election as provincial board member. The decretal
portion reads:
WITH THE FOREGOING PREMISES, this Office finds substantial evidence to sanction
respondents Richard Tan Martel, Allan Cudera Putong, Victoria Givero Mier and Abel
Arquillano Guiñares for Grave Misconduct and Gross Neglect of Duty. Pursuant to
Administrative Order No. 17, this Office hereby orders said respondents DISMISSED
from service together with all its accessory penalties. The incumbent Honorable
Governor of the Province of Davao del Sur is hereby directed to implement this Office's
Decision and to submit a compliance report within ten (10) days from the
implementation thereof. As for respondent Edgar Cajilig Gan, the case is hereby
rendered DISMISSED pursuant to the Doctrine of Condonation as declared in the case
of Aguinaldo vs. Santos 212 SCRA 768.4
Martel, Guiñares, Mier, and Putong moved for reconsideration, arguing that they had no
intent to commit any irregularity as they only approved the recommendation of the
PGSO to directly purchase the vehicles. On the other hand, Putong asserted that he
merely adopted the previous practice in his office where the vehicles would be
purchased from the car dealers because no one participates in a public bidding of
vehicles. He also added that he was removed as PGSO in 2004 and was not a party to
the whole process of the procurement of the vehicles.

In its Order,5 dated February 28, 2013, the Ombudsman partially granted the motion
for reconsideration of Putong. Because Putong had been relieved from his position as
PGSO in 2004 pursuant to Memorandum Order No. 221-2004, he had limited
participation in the anomalous procurement of the vehicles. Thus, the Ombudsman
lowered his penalty of dismissal to one (1) year suspension without pay. It, however,
sustained the penalty of dismissal against Martel, Guiñares and Mier due to their full
participation in the purchase and acquisition of the service vehicles. The fallo reads:
chanRoblesvirtualLawlibrary

WITH THE FOREGOING PREMISES the subject Motions of RICHARD TAN MARTEL and
ABEL ARQUILLANO GUIÑARES are hereby DENIED. The Decision 25 February 2011
stands in so far as respondents RICHARD TAN MARTEL, ABEL ARQUILLANO GUIÑARES
and VICTORIA GIVERO MIER, are concerned. As for respondent Putong, the subject
Motion for Reconsideration is granted. Accordingly, the Provincial Governor of Davao
Del Sur is hereby directed to implement the penalty of DISMISSAL from service with all
its accessory penalties for respondents Martel, Guiñares and Mier, and to submit to this
Office his compliance report, within five (5) days from receipt hereof. With regard to
respondent Putong, he is hereby suspended for a period of one (1) year without pay.
The Provincial Governor is also directed to implement the suspension of respondent
Putong and is likewise, directed to submit a compliance report, within five days from
receipt hereof.

SO ORDERED.6
Undaunted, Martel and Guiñares appealed before the CA under Rule 43 of the Rules of
Court.

The CA Ruling

In its assailed decision, dated February 4, 2015, the CA found that the PBAC members
committed a violation when they resorted to a negotiated purchase even without a prior
public bidding. Under Republic Act (R.A.) No. 9184 and R.A. No. 7160, negotiated
procurement can only be resorted to when there are two (2) failed biddings. The CA
ruled that there was no failure of bidding because no public bidding was ever
conducted. It also observed that the PBAC violated (1) Section 18 of R.A. No. 9184
prohibiting the reference of brand names for the purpose of procurement; and (2) COA
Circular No. 75-6 precluding government officials or employees from using more than
one motor vehicle.

Further, the CA did not give credence to the excuse of Martel and Guiñares that they
merely followed the recommendation of Putong as PGSO. The appellate court
emphasized that under R.A. No. 9184, the PBAC had the final and independent
authority to determine the mode of procurement.

The CA, however, lowered the penalty imposed on Martel and Guiñares from dismissal
to one (1) year suspension without pay. The appellate court opined that the penalty
should be lowered because aside from the fact that there was no proof of overpricing or
damage to the government, the length of service of Martel and Guiñares warranted a
mitigated penalty. It explained that the penalty imposed upon them must be the same
as that imposed on Putong, who was also a member of the PBAC which approved the
mode of procurement; and that a graver penalty would violate their right to equal
protection. The CA disposed the appeal in this wise:chanRoblesvirtualLawlibrary

WHEREFORE, foregoing premises considered, the 25 February 2011 Decision of the

Office of the Ombudsman is AFFIRMED with MODIFICATION. The penalty of dismissal
meted upon petitioners RICHARD T. MARTEL and ABEL A. GUIÑARES is hereby lowered
to ONE YEAR SUSPENSION WITHOUT PAY.

SO ORDERED.7
The Ombudsman moved for reconsideration, but its motion was denied by the CA in its
Resolution, dated October 16, 2015.

Hence, this petition.

ISSUE

THE COURT OF APPEALS COMMITTED AN ERROR IN THE INTERPRETATION OF

LAW WHEN IT AUTOMATICALLY CONSIDERED LENGTH OF SERVICE AS A
MITIGATING CIRCUMSTANCE IN FAVOR OF RESPONDENTS.8
The Ombudsman, through the Office of the Solicitor General (OSG), argues that the CA
should not have decreased the administrative penalty of the respondents because of
their length of service as "(l)ength of service can either be a mitigating or aggravating
circumstance depending on the factual milieu of each case." In this case, the OSG
argues that the respondents' length of service should have taught them "that integrity
once destroyed will remain as such," and should have made them dutiful in the
performance of their function. Because of their length of service, they should have
known that the lack of public bidding was a gross and blatant violation of R.A. No.
9184, which constituted grave misconduct and gross neglect of duty, and that they
should not have allowed themselves to be manipulated or dictated in reference to their
duties as such illegal acts of bypassing the procurement laws would cater to the whims
of their political padrinos.9

In addition, the Ombudsman asserts that the mitigation of the respondents' penalty
from dismissal from service to mere one (1) year suspension is unwarranted; that
Putong's penalty was mitigated because of his limited participation, unlike the
respondents who actively participated in the entire procurement process; and that
Martel and Guiñares knew of the illegal practice of foregoing public bidding but they still
signed the five (5) disbursement vouchers for the vehicles, as Provincial Accountant
and Provincial Treasurer, respectively.

In their Comment,10 the respondents countered that the motion for reconsideration filed
by the petitioners before the CA was improperly served on them rendering it a mere
scrap of paper, and so, it could not have tolled the running of the period to appeal and
allowed the judgment to attain finality; that the CA had the power to lower the penalty
against them considering that there was no bad faith on their part; and that the penalty
imposed on them should be the same penalty imposed on Putong because the latter
was also a member of the PBAC.

The Court's Ruling

The Court finds the petition meritorious.

The procurement of the vehicles violated R.A No. 9184 and R.A No. 7160 and CO A
Circular No. 92-386

At the onset, the applicable laws in the present case must be determined. Procurement
of service vehicles by government is covered by R.A. No. 9184 or Government
Procurement Reform Act, which took effect on January 26, 2003, and before that, by
R.A. No. 7160, otherwise known as An Act Providing for a Local Government Code of
1991. COA Circular No. 92-386, which prescribes rules and regulation on Supply and
Property Management in Local Government Units (LGUs), pursuant to Section 383 of
R.A. No. 7160, also applies.

Section 10 of R.A. No. 9184 provides that "[a]ll procurement shall be done through
Competitive Bidding, except as provided for in Article XVI of this Act." Likewise, Section
27 of COA Circular 92-386 provides that "[e]xcept as otherwise provided herein,
acquisition of supplies or property by local government units shall be through
competitive public bidding." Hence, there is a clear mandate by R.A. No. 9184 and COA
Circular 92-386 that public bidding is the primary process to procure goods and services
for the government.

A competitive public bidding aims to protect public interest by giving it the best possible
advantages thru open competition. It is precisely the mechanism that enables the
government agency to avoid or preclude anomalies in the execution of public
contracts.11 Strict observance of the rules, regulations, and guidelines of the bidding
process is the only safeguard to a fair, honest and competitive public bidding.12

Only in exceptional circumstances that R.A. No. 9184 and R.A No 7610 allow the
procuring entity to forego the strict requirement of a public bidding. Section 53 of R.A.
No. 9184 provides that negotiated procurement may be availed by the procuring entity
only in specific occasions, such as when there are two (2) failed biddings. Similarly,
Section 369 of R.A. No. 7160 provides that negotiated purchase may be availed in case
where public bidding has failed for two (2) consecutive times. Section 35 of R.A. No.
9184 provides, among others, that there is a failure to bid if no bids are received.
In this case, no public bidding was conducted in the procurement of the service vehicles
for the Governor and Vice-Governor. The absence of public bidding was a glaring
violation of R.A. No. 9184 and R.A. No. 7160 and COA Circular No. 92-386, unless the
respondents could prove that the resort to a negotiated bidding, as approved by the
PBAC, was proper.

The CA and the Ombudsman similarly found that the PBAC utterly failed to justify the
negotiated procurement. There was no failure to bid because there was no invitation to
bid and no bids could have ever been received.

The respondents, however, reasoned out that it was upon the recommendation of the
PGSO that they resorted to the direct purchase of the vehicles and the PBAC merely
approved the recommendation of the PGSO.

The argument utterly lacks merit.

Under the laws, the Bids and Awards Committee shall, among others, conduct the
evaluation of bids, and recommend award of contract to the head of the procuring
entity.13 It shall ensure that the procuring entity abides by the standard set forth by the
procurement law. In the LGUs, the committee on awards shall decide the winning bids
on procurement.14

Accordingly, as members of the PBAC, the respondents were not bound by the
recommendation of the PGSO to determine the mode of procurement. As an
independent committee, the PBAC was solely responsible for the conduct of the
procurement and could not pass the buck to others. As correctly stated by the CA, the
PBAC had control over the approval of the mode of procurement and the respondents
could not wash their hands from liability thereof. Their role in choosing the mode of
procurement was clearly an active action, and not a passive one as the respondents
would want to convey.15

A scrutiny of the records would show that the respondents committed other violations
of the procurement laws and regulations. The Purchase Request,16 with a stamp of
direct purchase on its face, stated the specific brand of the vehicles to be purchased,
instead of the technical specifications needed by the procuring entity, in clear violation
of Section 24 of COA Circular No. 92-386. Section 1817 of R.A. No. 9184 plainly provides
that reference to brand names for the procurement of goods shall not be allowed. The
underlying policy behind this prohibition is to prevent undue preference on certain
goods or products and ensure fair and equal competition among the bidders. In spite of
the glaring display of the vehicles' brand names on the purchase request, the PBAC still
approved the same. The CA observed that the PBAC itself made the bidding impossible
because it pre-determined the suppliers as it indicated the preferred brand of the
vehicles.

Another violation committed by the respondents was that they allowed the governor of
Davao del Sur to purchase and use more than one vehicle, which was evidently
contrary to COA Circular No. 75-6. The said provision dictates that a government official
or employee is not allowed to use more than one service vehicle, to wit: chanRoblesvirtualLawlibrary

III. Officials entitled to use of more than one motor vehicle - With the exception of the
President, no government official and employee authorized to use any vehicle operated
and maintained from the funds appropriated in the decree shall be allowed to use more
than one such motor vehicle; PROVIDED, HOWEVER that the Chief Justice of the
Supreme Court may be allowed to use two motor vehicles.
Notwithstanding these glaring violations of the procurement laws and the illegal
approval of the vehicles' procurement by the PBAC, Martel and Guiñares actively
participated in the acquisition of the same by signing the disbursement vouchers as
Provincial Accountant and Provincial Treasurer, respectively. Hence, due to the acts of
the respondents, the government disbursed public funds for illegally procured service
vehicles.

The Respondents committed Grave Misconduct and Gross Neglect of Duty

Misconduct is a transgression of some established and definite rule of action, more

particularly, unlawful behavior or gross neglect of duty by a public officer.18 The
misconduct is considered to be grave if it also involves other elements such as
corruption or the willful intent to violate the law or to disregard established rules, which
must be proven by substantial evidence; otherwise, the misconduct is only simple. In
grave misconduct, the elements of corruption, clear intent to violate the law, or flagrant
disregard of an established rule, must be evident.19

On the other hand, "gross negligence implies a want or absence of, or failure to
exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless
disregard of consequences without exerting any effort to avoid them."20

In Lagoc v. Malaga,21 where the members of the BAC did not conduct a public bidding
because the invitation to bid was not published and they favored a specific contractor,
the Court held that their actions constituted grave misconduct when they conducted the
procurement process without a public bidding. The Court emphasized that it was the
duty of the BAC to ensure that the rules and regulations for the conduct of bidding for
government projects were faithfully observed.

In this case, respondents Martel and Guiñares, as members of the PBAC, being the
Provincial Treasurer and the Provincial Auditor, respectively, committed the following
transgressions: chanRoblesvirtualLawlibrary

1. They failed to conduct a public or competitive bidding as a mode of

procurement.

2. Without any basis in law, they allowed the resort to negotiated

procurement in violation of Sections 35, 48, 50 and 53 of R.A. No. 9184;
Sections 356, 366 and 369 of R.A. No. 7160; and COA Circular No. 92-
386.
 3. In the direct purchase of the vehicles, they specified the brand name of
the units they wanted to procure, instead of technical descriptions only,
which violated Section 18 of R.A. No. 9184.

4. They approved the purchase of more than one service vehicle for the use
of the governor, in violation of COA Circular No. 75-6.

5. They signed and issued the disbursement vouchers for the vehicles
despite their illegal procurement.

Length of service does not justify mitigation of penalty; Putong had a limited
participation

Even though it affirmed the administrative guilt of the respondents for grave
misconduct and gross neglect of duty, warranting the penalty of dismissal from service,
the CA downgraded their penalty to one (1) year suspension without pay. The appellate
court explained that aside from the fact that there was no proof of overpricing or
damage to the government, the length of government service of the respondents
should mitigate their penalty. Martel was appointed Provincial Accountant in 1992;
while Guiñares was appointed Provincial Treasurer in 2001. The CA also stated that
justice and fairness dictated that the respondents should suffer the same penalty meted
out to Putong, who was also a member of the PBAC.

The Court disagrees.

First, the element of misappropriation is not indispensable in an administrative charge

of grave misconduct.22 Thus, the lack of proof of overpricing or damage to the
government does not ipso facto amount to a mitigated penalty.

Second, length of service is not a magic phrase that, once invoked, will automatically
be considered as a mitigating circumstance in favor of the party invoking it. Length of
service can either be a mitigating or aggravating circumstance depending on the factual
milieu of each case. Length of service, in other words, is an alternative circumstance.23

In University of the Philippines v. Civil Service Commission,24 the length of service of

the respondent therein was not considered; instead, the Court took it against the said
respondent because her length of service, among other things, helped her in the
commission of the offense. In Bondoc v. Mantala,25 it was asserted that jurisprudence
was replete with cases declaring that a grave offense could not be mitigated by the fact
that the accused was a first-time offender or by the length of service of the accused.
While in most cases, length of service was considered in favor of the respondent, it was
not considered where the offense committed was found to be serious or grave.

Here, Martel and Guiñares had been the Provincial Accountant and the Provincial
Treasurer, respectively, and both were members of the PB AC for a number of years.
With their extensive experience, it was expected that they were knowledgeable with the
various laws on the procurement process. Thus, it is truly appalling that the
respondents failed to apply the basic rule that all procurement shall be done through
competitive bidding and that only in exceptional circumstances could public bidding be
dispensed with. As previously discussed, they also committed several violations during
the course of the procurement which underscored the seriousness of their
transgressions.

Third, as to the argument that the respondents should have the same penalty imposed
on Putong, the same fails to persuade. As properly explained by the Ombudsman, there
was a substantial distinction between the participation of Putong and that of the
respondents. It found that Putong, after being relieved from his position as PGSO in
2004 per Memorandum Order No. 221-2004, no longer had any participation in the
preparation of the purchase orders, inspection and payment of the vehicles. Thus, due
to the limited participation of Putong, the Ombudsman reduced his penalty from
dismissal to one (1) year suspension without pay.

In the case of Martel and Guiñares, the Ombudsman imposed the penalty of dismissal
because of their full participation in the questionable procurement and the
disbursement of funds. It was duly established that the disbursement vouchers for the
five (5) vehicles were signed by Martel and Guiñares as Provincial Accountant and
Provincial Treasurer, respectively. The continuous and active participation of the
respondents led to the acquisition of the illegally procured goods. Because of their
indispensable role in the transactions, the taxpayer's hard-earned money were illegally
disbursed. Thus, the Court finds that the respondents do not deserve a mitigated
penalty.

On a final note, it must be stressed that serious offenses, such as grave misconduct
and gross neglect of duty, have always been and should remain anathema in the civil
service. They inevitably reflect on the fitness of a civil servant to continue in office.
When an officer or employee is disciplined, the object sought is not the punishment of
such officer or employee, but the improvement of public service and the preservation of
the public's faith and confidence in the government.26 Indeed, public office is a public
trust.

WHEREFORE, the petition is GRANTED. The February 4, 2015 Decision and the
October 16, 2015 Resolution of the Court of Appeals in CA-G.R. SP No. 05473-MIN
are REVERSED and SET ASIDE. The February 28, 2013 Order of the Ombudsman in
OMB-M-A-05-450-L, is hereby REINSTATED.

SO ORDERED.

Carpio, (Acting C. J., Chairperson), Velasco, Jr.,* and Peralta, JJ., concur.

Leonen, J., on official leave.

Endnotes:
 SECOND DIVISION

G.R. No. 204766, March 06, 2017

DEPARTMENT OF HEALTH, REPRESENTED BY SECRETARY ENRIQUE T.

ONA, Petitioner, v. GLORIA B. AQUINTEY, EDUARDO F. MENDOZA AND AGNES N.
VILLANUEVA, Respondent.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari seeking the reversal and setting
aside of the Decision1 and Resolution2 of the Court of Appeals (CA), dated March 20,
2012 and November 27, 2012, respectively, in CA-G.R. SP No. 108775. The assailed
Decision reversed and set aside the October 6, 2008 and March 31, 2009 Resolutions of
the Civil Service Commission (CSC) finding herein respondents guilty of gross
insubordination and imposing upon them the penalty of nine (9) months suspension,
while the questioned CA Resolution denied petitioner's Motion for Reconsideration.

The pertinent factual and procedural antecedents of the case are as follows: chanRoblesvirtualLawlibrary

On February 24, 2004, the Center for Health Development I, represented by Dr.
Eduardo C. Janairo (Dr. Janairo), in his capacity as Officer-in-Charge (OIC) of the Ilocos
Training and Regional Medical Center (ITRMC) in San Fernando, La Union, filed before
the Department of Health (DOH) an administrative complaint charging herein
respondents with gross insubordination, grave misconduct, gross neglect of duty and
conduct prejudicial to the best interest of the service. The complaint basically alleged
that respondents, with full knowledge that Dr. Janairo was the lawfully designated OIC
of ITRMC, disregarded and defied the orders issued to them by the latter without any
valid or justifiable reason.3

Prior to the filing of the above administrative complaint, Dr. Janairo was involved in a
dispute as to who, between him and a certain Dr. Gilbert De Leon (Dr. De Leon), was
the lawfully designated OIC of the ITRMC.

Records disclose that on February 4, 2002, then DOH Secretary, Dr. Manuel A. Dayrit,
designated Dr. De Leon as OIC of the ITRMC for a fixed term of one year, or until
February 4, 2003. It would appear that Dr. De Leon remained in his position beyond the
on;e-year period or until June 6, 2003 when Secretary Dayrit issued Department Order
Nos. 108-A and 108-I relieving him of his duties and responsibilities as OIC and
designating Dr. Janairo as his replacement.

Claiming that he was aggrieved by such replacement, Dr. De Leon filed a petition for
injunction and/or temporary restraining order (TRO) with the Regional Trial Court (RTC)
of San Fernando, La Union. This dispute between Dr. Janairo and Dr. De Leon spawned
a series of cases, including the present petition, which eventually reached this Court.

Meanwhile, on June 23, 2003, the RTC issued a TRO and, thereafter, on July 11, 2003,
a writ of preliminary injunction, directing Secretary Dayrit to cease and desist from
enforcing his order relieving Dr. De Leon from his post as OIC and designating Dr.
Janairo as his replacement.

Secretary Dayrit and Dr. Janairo then pled a petition for certiorari with the CA
questioning the writ of preliminary injunction issued by the RTC. On November 10,
2003, the CA issued a Resolution which ordered the maintenance of the status quo.
Pertinent portions of the said Resolution read as follows: ChanRoblesVirtualawlibrary

x x x    x x x    x x x

Without delving yet on the merits of the main petition, this court finds that there is a
need to maintain status quo so as not to preempt and render nugatory whatever
resolution this Court may hand down in its consideration of the main petition x x x

x x x    x x x    x x x

While we are in the process of determining whether or not the issuance by the
Respondent Judge of the mandatory injunction (sic) was done with caution and within
the parameters of the law, the status quo should be respected in the meantime.

x x x    x x x    x x x

WHEREFORE, in the interest of an orderly and efficient service and in order to preserve
the respective rights of the parties pending actual resolution of the principal
controversy, this Court resolves to grant the petitioner's application and hereby issues a
Writ of Preliminary Injunction effective until Resolution of the instant Petition
for Certiorari.

ACCORDINGLY, this Court hereby RESOLVES to direct respondent Judge and/or any
person acting under his authority to cease and desist from implementing or enforcing
the Order dated 11 July 2003 x x x

RESOLVED FURTHER, to direct private respondent Dr. Gilbert De Leon to cease and
desist from discharging and/or performing the duties as Officer-in-Charge of Ilocos
Training and Regional Medical Center (ITRMC), San Fernando City, La Union.

RESOLVED FINALLY, to direct both parties to maintain status quo or the last, actual,
peaceable non-contested status which preceded the original controversy in the court a
quo, which is the assumption by petitioner Dr. Eduardo Janairo.4 chanroblesvirtuallawlibrary

Thereafter, Secretary Dayrit issued Department Order No. 231-D,5 directing Dr. Janairo
to perform his function as OIC of ITRMC. Nonetheless, Dr. De Leon refused to vacate
the office and continued to perform the duties of the OIC.

Subsequent to the issuance of Department Order No. 231-D, Dr. Janairo, issued several
Office Orders, Memoranda and letters addressed separately to respondents, as
follows:
ChanRoblesVirtualawlibrary

a. Office Order No. 1414 dated November 14, 2003, directing respondents Aquintey and
Mendoza to undertake the inventory of equipment, supplies and materials, drugs and
medicines, medical/surgical/lab supplies and all other properties of the hospital and to
report directly to Janairo the results thereof. Under this Order, Aquintey and Mendoza
were temporarily relieved of their duties as Administrative Officer IV and Accountant
III, respectively.

b. Memorandum No. 55 dated November 18, 2003, addressed to Aquintey and

Mendoza, as well as Memorandum No. 60 dated November 20, 2003, addressed to
Villanueva, directing the three respondents to cease and desist from discharging and/or
performing the duties and responsibilities inherent to their respective positions. They
were, likewise, ordered to refrain from signing official documents pertinent to the day-
to-day operations of the hospital and to turn over all records and other pertinent
documents of all operational transactions of ITRMC to Dr. Janairo.

c. Letter dated November 20, 2003, requiring Aquintey and Mendoza to submit their
written comment/answer within 48 hours for their failure to comply with the directives
stated in Office Order No. 1414 and Memorandum No. 55.

d. Memorandum No. 34 dated November 17, 2003, advising Mendoza and Villanueva to
hold all transactions awaiting payment and/or issuance of checks in the ITRMC.

e. Memorandum No. 66 dated November 25, 2003, directing Villanueva to turn over all
accountabilities to the designated OIC Cashier to be witnessed by the resident
auditors; chanrobleslaw

f. Office Memorandum No. 068-A dated December 5, 2003, ordering Villanueva to

discuss with Dr. Janairo the deteriorating condition of ITRMC; and

g. Memorandum No. 71 dated December 11, 2003, directing Villanueva to turn over to
the Budget Officer III of the ITRMC within 48 hours from receipt of the said
Memorandum various documents consisting of checkbooks for 9 accounts,
disbursement records, records of checks issued and cancelled, passbooks and cash
receipt journal.
However, respondents did not comply with the said issuances leading to the filing of the
abovementioned administrative case against them before the DOH, which was docketed
as Administrative Case No. 51-04.

On July 12, 2007, then DOH Secretary Francisco T. Duque III, who took over from
Secretary Dayrit, rendered a Decision6 in the said administrative case finding herein
respondents guilty of gross insubordination, grave misconduct, gross neglect of duty
and conduct prejudicial to the best interest of the service, and imposing on them the
penalty of dismissal from the service including all its accessory penalties.

Secretary Duque ruled that respondents' refusal to recognize the authority of Dr.
Janairo as the duly designated OIC of the ITRMC and their willful and intentional
disregard of his lawful and reasonable directives rendered them liable for administrative
sanctions.

Respondents appealed the above Decision to the CSC and, on October 6, 2008, the CSC
issued Resolution No. 0818897 disposing as follows: ChanRoblesVirtualawlibrary

WHEREFORE, the appeal of Gloria B. Aquintey, Eduardo F. Mendoza, and Agnes N.

Villanueva is hereby PARTLY GRANTED. Accordingly, the Decision dated July 12, 2007
of the Secretary of Health, Department of Health, finding them guilty of Grave
Misconduct, Gross Neglect of Duty, Gross Insubordination, and Conduct Prejudicial to
the Best Interest of the Service and imposing upon them the penalty of dismissal from
the service, and the Resolution dated February 13, 2008, denying their motion for
reconsideration are MODIFIED to the extent that Aquintey, Mendoza and Villanueva
are found guilty only of Gross Insubordination and are hereby imposed the penalty of
nine (9) months suspension.8 chanroblesvirtuallawlibrary

The CSC held that it is clear from the language of the status quo order issued by the CA
in the certiorari case filed by Secretary Dayrit and Dr. Janairo that the last actual,
peaceable and uncontested status which preceded the original controversy in the
appellate court refers to the assumption of office by Dr. Janairo; hence, respondents'
failure to comply with the various issuances of Dr. Janairo amounts to gross
insubordination. However, the CSC did not find respondents liable for grave
misconduct, conduct prejudicial to the best interest of the service and gross neglect of
duty. Thus, the CSC imposed upon them the penalty of suspension for nine months.

Respondents filed a motion for partial reconsideration, but the CSC denied it in its
Resolution No. 090489 dated March 31, 2009.

Unsatisfied with the above Resolution, respondents filed a petition for review with the
CA.

On March 20, 2012, the CA promulgated its assailed Decision with the following
dispositive portion: ChanRoblesVirtualawlibrary

WHEREFORE, premises considered, the instant Petition is hereby GRANTED and CSC

Resolutions Nos. 081889 dated October 6, 2008 and 090489 dated March 31, 2009,
finding petitioners Gloria B. Aquintey, Eduardo F. Mendoza and Agnes N. Villanueva
guilty of Gross Insubordination and imposing upon them the penalty of nine (9) months
suspension, are hereby REVERSED and SET ASIDE. The Secretary of Health is hereby
directed to pay the petitioners their salaries during the 9-month suspension.

SO ORDERED.9 chanroblesvirtuallawlibrary

The CA ruled that, while there was no question that herein respondents indeed refused
to obey the orders of Dr. Janairo as the duly designated OIC of the ITRMC, such
disobedience was based on their belief in good faith that it was Dr. De Leon who was
entitled to the position being contested. As such, their mistake upon a doubtful question
of law excuses them from administrative liability.

Herein petitioner filed a motion for reconsideration, but the CA denied it in its
Resolution dated November 27, 2012.

Hence, this petition for review on certiorari based on the sole ground that the assailed
Decision of the CA is not in accord with law and jurisprudence.
The Court finds the petition meritorious.

The basic issue in the present case is whether or not respondents are guilty of gross
insubordination when they chose not to follow the various orders of Dr. Janairo which
were issued in his capacity as OIC of the ITRMC.

Insubordination is defined as a refusal to obey some orders, which a superior officer is

entitled to give and have obeyed.10 The term imports a willful or intentional disregard of
the lawful and reasonable instructions of the employer.11

In her Answer to the show-cause letter of Dr. Janairo, respondent Aquintey, aside from
refusing to obey the directives of the former, even accused him of grave misconduct,
abuse of authority and usurpation of authority. On the other hand, respondent Mendoza
never filed an answer or comment to Dr. Janairo's show-cause letter. On her part,
respondent Villanueva never attempted to see and meet with Dr. Janairo to discuss the
condition of the hospital, as required by the latter. These instances clearly show that
respondents never recognized Dr. Janairo's authority as OIC.

There can be no denying that respondents were aware of the November 10, 2003
Resolution of the CA which ordered the maintenance of the status quo. The supposed
confusion as to what the CA considers as the status quo in the present controversy is
more imagined than real as the fact remains that the language of the CA in its
Resolution clearly considered Dr. Janairo's assumption of the office of the OIC as
the status quo, when the appellate court held, thus: ChanRoblesVirtualawlibrary

RESOLVED FINALLY, to direct both parties to maintain status quo or the last, actual,
peaceable non-contested status which preceded the original controversy in the court a
quo, which is the assumption by petitioner Dr. Eduardo Janairo.12 chanroblesvirtuallawlibrary

Also, in the same Resolution, the CA directed the RTC to cease and desist from
implementing its Order which prevents the Secretary of Health from designating Dr.
Janairo as the OIC. The necessary implication of such directive is that the CA recognizes
Dr. Janairo's assumption of the office of OIC of the ITRMC, pending its resolution of the
controversy as to who is rightfully entitled to the contested position.

Moreover, the said Resolution also clearly directed Dr. De Leon to cease and desist from
discharging and/or performing the duties of OIC of the ITRMC.

Furthermore, any doubts which may have been entertained by respondents as to who
was really entitled to the contested office of the OIC, should have been cleared when
DOH Secretary Dayrit issued Department Order No. 231-D which affirmed Dr. Janairo's
assumption of the office of OIC of the ITRMC. Respondents had no excuse in not
recognizing Secretary Dayrit's Order as he occupies a position which is even higher than
that of Dr. Janairo or Dr. De Leon. As DOH employees, they are bound to obey the
lawful orders of the DOH Secretary, notwithstanding any legal issues that may exist
between Dr. De Leon and Dr. Janairo. Thus, it becomes apparent that, in view of the
clear language of the above CA Resolution and the DOH Secretary's Order, respondents'
deliberate refusal to obey Dr. Janairo is not prompted by confusion or by what they
claim as their belief in good faith, but by their personal preference or bias in favor of
Dr. De Leon and against Dr. Janairo. Thus, respondents' defiance of the successive
memoranda and office orders of Dr. Janairo clearly constitutes gross insubordination as
it was a continuing intentional refusal to obey a direct order which is reasonable and
was given by and with proper authority.

In administrative proceedings, the quantum of proof necessary for a finding of guilt is

substantial evidence or such relevant evidence as a reasonable mind may accept as
adequate to support a conclusion.13 Well-entrenched is the rule that substantial proof,
and not clear and convincing evidence or proof beyond reasonable doubt, is sufficient
as basis for the imposition of any disciplinary action upon the employee.14 The standard
of substantial evidence is satisfied where the employer has reasonable ground to
believe that the employee is responsible for the misconduct and his participation therein
renders him unworthy of trust and confidence demanded by his position.15 In this case,
the attending facts and the evidence presented, point to no other conclusion than the
administrative liability of respondents for gross insubordination.

Under Section 52, Rule IV of the Uniform Rules on Administrative Cases in the Civil
Service, which are the applicable Rules at the time of the commission of the offense,
gross insubordination is a grave offense punishable by suspension from six months and
one day to one year for the first offense. There being no mitigating nor aggravating
circumstance, the Court finds no error in the CSC's imposition of the penalty of
suspension for nine (9) months.

WHEREFORE, the instant petition is GRANTED. The assailed Decision and Resolution
of the Court of Appeals, dated March 20, 2012 and November 27, 2012, respectively,
are REVERSED and SET ASIDE. Resolution No. 081889 of the Civil Service
Commission, dated October 6, 2008, finding respondents GUILTY of GROSS
INSUBORDINATION, and imposing upon them the penalty of NINE (9) MONTHS
SUSPENSION, is REINSTATED.

SO ORDERED. chanroblesvirtuallawlibrary

Carpio, (Chairperson), Mendoza, Perlas-Bernabe,* and Leonen, JJ., concur. cralawlawlibrary

DECISION

SERENO, C.J.:

Before us are consolidated Petitions for Certiorari, Prohibition and Mandamus, under
Rule 65 of the 1997 Revised Rules of Court. These Petitions seek to nullify certain
provisions of Revenue Regulation No. (RR) 10-2008. The RR was issued by the Bureau
of Internal Revenue (BIR) on 24 September 2008 to implement the provisions of
Republic Act No. (R.A.) 9504. The law granted, among others, income tax exemption
for minimum wage earners (MWEs), as well as an increase in personal and additional
exemptions for individual taxpayers.

Petitioners assail the subject RR as an unauthorized departure from the legislative

intent of R.A. 9504. The regulation allegedly restricts the implementation of the MWEs'
income tax exemption only to the period starting from 6 July 2008, instead of applying
the exemption to the entire year 2008. They further challenge the BIR's adoption of the
prorated application of the new set of personal and additional exemptions for taxable
year 2008. They also contest the validity of the RR's alleged imposition of a condition
for the availment by MWEs of the exemption provided by R.A. 9504. Supposedly, in the
event they receive other benefits in excess of P30,000, they can no longer avail
themselves of that exemption. Petitioners contend that the law provides for the
unconditional exemption of MWEs from income tax and, thus, pray that the RR be
nullified. chanroblesvirtuallawlibrary

ANTECEDENT FACTS

R.A. 9504

On 19 May 2008, the Senate filed its Senate Committee Report No. 53 on Senate Bill
No. (S.B.) 2293. On 21 May 2008, former President Gloria M. Arroyo certified the
passage of the bill as urgent through a letter addressed to then Senate President
Manuel Villar. On the same day, the bill was passed on second reading IN the Senate
and, on 27 May 2008, on third reading. The following day, 28 May 2008, the Senate
sent S.B. 2293 to the House of Representatives for the latter's concurrence.

On 04 June 2008, S.B. 2293 was adopted by the House of Representatives as an

amendment to House Bill No. (H.B.) 3971.

On 17 June 2008, R.A. 9504 entitled "An Act Amending Sections 22, 24, 34, 35, 51,
and 79 of Republic Act No. 8424, as Amended, Otherwise Known as the National
Internal Revenue Code of 1997," was approved and signed into law by President
Arroyo. The following are the salient features of the new law:
chanRoblesvirtualLawlibrary

1. It increased the basic personal exemption from P20,000 for a single

individual, P25,000 for the head of the family, and P32,000 for a married
individual to P50,000 for each individual.

2. It increased the additional exemption for each dependent not exceeding

four from P8,000 to P25,000.

3. It raised the Optional Standard Deduction (OSD) for individual taxpayers

from 10% of gross income to 40% of the gross receipts or gross sales.

4. It introduced the OSD to corporate taxpayers at no more than 40% of

their gross income.

5. It granted MWEs exemption from payment of income tax on their

minimum wage, holiday pay, overtime pay, night shift differential pay and
hazard pay.1

Section 9 of the law provides that it shall take effect 15 days following its publication in
the Official Gazette or in at least two newspapers of general circulation. Accordingly,
R.A. 9504 was published in the Manila Bulletin and Malaya on 21 June 2008. On 6 July
2008, the end of the 15-day period, the law took effect.

RR 10-2008

On 24 September 2008, the BIR issued RR 10-2008, dated 08 July 2008, implementing
the provisions of R.A. 9504. The relevant portions of the said RR read as follows:
chanRoblesvirtualLawlibrary

SECTION 1. Section 2.78.1 of RR 2-98, as amended, is hereby further amended to

read as follows:

Sec. 2.78.1. Withholding of Income Tax on Compensation Income.

xxxx

The amount of 'de minimis' benefits conforming to the ceiling herein prescribed shall
not be considered in determining the P30,000.00 ceiling of 'other benefits' excluded
from gross income under Section 32 (b) (7) (e) of the Code. Provided that, the excess
of the 'de minimis' benefits over their respective ceilings prescribed by these
regulations shall be considered as part of 'other benefits' and the employee receiving it
will be subject to tax only on the excess over the P30,000.00 ceiling. Provided,
further, that MWEs receiving 'other benefits' exceeding the P30,000.00 limit
shall be taxable on the excess benefits, as well as on his salaries, wages and
allowances, just like an employee receiving compensation income beyond the
SMW.

xxxx

(B) Exemptions from Withholding Tax on Compensation. - The following income

payments are exempted from the requirements of withholding tax on compensation:

xxxx

(13) Compensation income of MWEs who work in the private sector and being paid the
Statutory Minimum Wage (SMW), as fixed by Regional Tripartite Wage and Productivity
Board (RTWPB)/National Wages and Productivity Commission (NWPC), applicable to the
place where he/she is assigned.

The aforesaid income shall likewise be exempted from income tax.

'Statutory Minimum Wage' (SMW) shall refer to the rate fixed by the Regional Tripartite
Wage and Productivity Board (RTWPB), as defined by the Bureau of Labor and
Employment Statistics (BLES) of the Department of Labor and Employment (DOLE).
The RTWPB of each region shall determine the wage rates in the different regions based
on established criteria and shall be the basis of exemption from income tax for this
purpose.

Holiday pay, overtime pay, night shift differential pay and hazard pay earned by the
aforementioned MWE shall likewise be covered by the above exemption. Provided,
however, that an employee who receives/earns additional compensation such
as commissions, honoraria, fringe benefits, benefits in excess of the allowable
statutory amount of P30,000.00, taxable allowances and other taxable income
other than the SMW, holiday pay, overtime pay, hazard pay and night shift
differential pay shall not enjoy the privilege of being a MWE and, therefore,
his/her entire earnings are not exempt from income tax, and consequently,
from withholding tax.

MWEs receiving other income, such as income from the conduct of trade, business,
or practice of profession, except income subject to final tax, in addition to
compensation income are not exempted from income tax on their entire income earned
during the taxable year. This rule, notwithstanding, the SMW, holiday pay, overtime
pay, night shift differential pay and hazard pay shall still be exempt from
withholding tax.

For purposes of these regulations, hazard pay shall mean the amount paid by the
employer to MWEs who were actually assigned to danger or strife-torn areas, disease-
infested places, or in distressed or isolated stations and camps, which expose them to
great danger of contagion or peril to life. Any hazard pay paid to MWEs which does not
satisfy the above criteria is deemed subject to income tax and consequently, to
withholding tax.

xxxx

SECTION 3. Section 2.79 of RR 2-98, as amended, is hereby further amended to read

as follows:

Sec. 2.79. Income Tax Collected at Source on Compensation Income.-

(A) Requirement of Withholding. - Every employer must withhold from compensation

paid an amount computed in accordance with these Regulations. Provided, that no
withholding of tax shall be required on the SMW, including holiday pay, overtime pay,
night shift differential and hazard pay of MWEs in the private/public sectors as defined
in these Regulations. Provided, further, that an employee who receives
additional compensation such as commissions, honoraria, fringe benefits,
benefits in excess of the allowable statutory amount of P30,000.00, taxable
allowances and other taxable income other than the SMW, holiday pay,
overtime pay, hazard pay and night shift differential pay shall not enjoy the
privilege of being a MWE and, therefore, his/her entire earnings are not
exempt from income tax and, consequently, shall be subject to withholding
tax.

xxxx

For the year 2008, however, being the initial year of implementation of R.A. 9504,
there shall be a transitory withholding tax table for the period from July 6 to December
31, 2008 (Annex "D") determined by prorating the annual personal and additional
exemptions under R.A. 9504 over a period of six months. Thus, for individuals,
regardless of personal status, the prorated personal exemption is P25,000. and for each
qualified dependent child (QDC), P12,500.

xxxx
SECTION 9. Effectivity. -

These Regulations shall take effect beginning July 6, 2008. (Emphases supplied) ChanRoblesVirtualawlibrary

The issuance and effectivity of RR 10-2008 implementing R.A. 9504 spawned the
present Petitions.

G.R. No. 184450

Petitioners Jaime N. Soriano et al. primarily assail Section 3 of RR 10-2008 providing

for the prorated application of the personal and additional exemptions for taxable year
2008 to begin only effective 6 July 2008 for being contrary to Section 4 of Republic Act
No. 9504.2

Petitioners argue that the prorated application of the personal and additional
exemptions under RR 10-2008 is not "the legislative intendment in this
jurisdiction."3 They stress that Congress has always maintained a policy of "full taxable
year treatment"4 as regards the application of tax exemption laws. They allege further
that R.A. 9504 did not provide for a prorated application of the new set of personal and
additional exemptions.5

G.R. No. 184508

Then Senator Manuel Roxas, as principal author of R.A. 9504, also argues for a full
taxable year treatment of the income tax benefits of the new law. He relies on what he
says is clear legislative intent In his "Explanatory Note of Senate Bill No. 103," he
stresses "the very spirit of enacting the subject tax exemption law"6 as follows:
chanRoblesvirtualLawlibrary

With the poor, every little bit counts, and by lifting their burden of paying income tax,
we give them opportunities to put their money to daily essentials as well as
savings. Minimum wage earners can no longer afford to be taxed and to be
placed in the cumbersome income tax process in the same manner as higher-
earning employees. It is our obligation to ease their burdens in any way we
can.7 (Emphasis Supplied) ChanRoblesVirtualawlibrary

Apart from raising the issue of legislative intent, Senator Roxas brings up the following
legal points to support his case for the full-year application of R.A. 9504's income tax
benefits. He says that the pro rata application of the assailed RR deprives MWEs of the
financial relief extended to them by the law;8 that Umali  v. Estanislao9 serves as
jurisprudential basis for his position that R.A. 9504 should be applied on a full-year
basis to taxable year 2008;10 and that the social justice provisions of the 1987
Constitution, particularly Articles II and XIII, mandate a full application of the law
according to the spirit of R.A. 9504.11

On the scope of exemption of MWEs under R.A. 9504, Senator Roxas argues that the
exemption of MWEs is absolute, regardless of the amount of the other benefits they
receive. Thus, he posits that the Department of Finance (DOF) and the BIR committed
grave abuse of discretion amounting to lack and/or excess of jurisdiction. They
supposedly did so when they provided in Section 1 of RR 10-2008 the condition that an
MWE who receives "other benefits" exceeding the P30,000 limit would lose the tax
exemption.12 He further contends that the real intent of the law is to grant income tax
exemption to the MWE without any limitation or qualification, and that while it would be
reasonable to tax the benefits in excess of P30,000, it is unreasonable and unlawful to
tax both the excess benefits and the salaries, wages and allowances.13

G.R. No. 184538

Petitioner Trade Union Congress of the Philippine contends that the provisions of R.A.
9504 provide for the application of the tax exemption for the full calendar year 2008. It
also espouses the interpretation that R.A. 9504 provides for the unqualified tax
exemption of the income of MWEs regardless of the other benefits they receive.14 In
conclusion, it says that RR 10-2008, which is only an implementing rule, amends the
original intent of R.A. 9504, which is the substantive law, and is thus null and void.

G.R. No. 185234

Petitioners Senator Francis Joseph Escudero, the Tax Management Association of the
Philippines, Inc., and Ernesto Ebro allege that R.A. 9504 unconditionally grants MWEs
exemption from income tax on their taxable income, as wel1 as increased personal and
additional exemptions for other individual taxpayers, for the whole year 2008. They
note that the assailed RR 10-2008 restricts the start of the exemptions to 6 July 2008
and provides that those MWEs who received "other benefits" in excess of P30,000 are
not exempt from income taxation. Petitioners believe this RR is a "patent nullity"15 and
therefore void.

Comment of the OSG

The Office of the Solicitor General (OSG) filed a Consolidated Comment16 and took the
position that the application of R.A. 9504 was intended to be prospective, and not
retroactive. This was supposedly the general rule under the rules of statutory
construction: law will only be applied retroactively if it clearly provides for retroactivity,
which is not provided in this instance.17

The OSG contends that Umali v. Estanislao is not applicable to the present case. It
explains that R.A. 7167, the subject of that case, was intended to adjust the personal
exemption levels to the poverty threshold prevailing in 1991. Hence, the Court in that
case held that R.A. 7167 had been given a retroactive effect. The OSG believes that the
grant of personal exemptions no longer took into account the poverty threshold level
under R.A. 9504, because the amounts of personal exemption far exceeded the poverty
threshold levels.18

The OSG further argues that the legislative intent of non-retroactivity was effectively
confirmed by the "Conforme" of Senator Escudero, Chairperson of the Senate
Committee on Ways and Means, on the draft revenue regulation that became RR 10-
2008. chanroblesvirtuallawlibrary

ISSUES

Assailing the validity of RR 10-2008, all four Petitions raise common issues, which may
be distilled into three major ones:
First, whether the increased personal and additional exemptions provided by R.A. 9504
should be applied to the entire taxable year 2008 or prorated, considering that R.A.
9504 took effect only on 6 July 2008.

Second, whether an MWE is exempt for the entire taxable year 2008 or from 6 July
2008 only.

Third, whether Sections 1 and 3 of RR 10-2008 are consistent with the law in providing
that an MWE who receives other benefits in excess of the statutory limit of P30,00019 is
no longer entitled to the exemption provided by R.A. 9504. chanroblesvirtuallawlibrary

THE COURT'S RULING

I.

Whether the increased personal and additional exemptions provided by R.A.

9504 should be applied to the entire taxable year 2008 or prorated,
considering that the law took effect only on 6 July 2008

The personal and additional exemptions established by R.A. 9504 should be applied to
the entire taxable year 2008.

Umali is applicable.

Umali  v. Estanislao20 supports this Court's stance that R.A. 9504 should be applied on a
full-year basis for the entire taxable year 2008.21 In Umali, Congress enacted R.A. 7167
amending the 1977 National Internal Revenue Code (NIRC). The amounts of basic
personal and additional exemptions given to individual income taxpayers were adjusted
to the poverty threshold level. R.A. 7167 came into law on 30 January 1992.
Controversy arose when the Commission of Internal Revenue (CIR) promulgated RR 1-
92 stating that the regulation shall take effect on compensation income earned
beginning 1 January 1992. The issue posed was whether the increased personal and
additional exemptions could be applied to compensation income earned or received
during calendar year 1991, given that R.A. 7167 came into law only on 30 January
1992, when taxable year 1991 had already closed.

This Court ruled in the affirmative, considering that the increased exemptions were
already available on or before 15 April 1992, the date for the filing of individual income
tax returns. Further, the law itself provided that the new set of personal and additional
exemptions would be immediately available upon its effectivity. While R.A. 7167 had
not yet become effective during calendar year 1991, the Court found that it was a piece
of social legislation that was in part intended to alleviate the economic plight of the
lower-income taxpayers. For that purpose, the new law provided for adjustments "to
the poverty threshold level" prevailing at the time of the enactment of the law. The
relevant discussion is quoted below:
chanRoblesvirtualLawlibrary

[T]he Court is of the considered view that Rep. Act 7167 should cover or extend to
compensation income earned or received during calendar year 1991.
Sec. 29, par.(L), Item No. 4 of the National Internal Revenue Code, as amended,
provides:
chanRoblesvirtualLawlibrary

Upon the recommendation of the Secretary of Finance, the President shall automatically
adjust not more often than once every three years, the personal and additional
exemptions taking into account, among others, the movement in consumer price
indices, levels of minimum wages, and bare subsistence levels. ChanRoblesVirtualawlibrary

As the personal and additional exemptions of individual taxpayers were last adjusted in
1986, the President, upon the recommendation of the Secretary of Finance, could have
adjusted the personal and additional exemptions in 1989 by increasing the same even
without any legislation providing for such adjustment. But the President did not.

However, House Bill 28970, which was subsequently enacted by Congress as Rep. Act
7167, was introduced in the House of Representatives in 1989 although its passage was
delayed and it did not become effective law until 30 January 1992. A perusal, however,
of the sponsorship remarks of Congressman Hernando B. Perez, Chairman of the House
Committee on Ways and Means, on House Bill 28970, provides an indication of the
intent of Congress in enacting Rep. Act 7167. The pertinent legislative journal contains
the following:
chanRoblesvirtualLawlibrary

At the outset, Mr. Perez explained that the Bill Provides for increased personal
additional exemptions to individuals in view of the higher standard of living.

The Bill, he stated, limits the amount of income of individuals subject to income tax to
enable them to spend for basic necessities and have more disposable income.

xxxx

Mr. Perez added that inflation has raised the basic necessities and that it had been
three years since the last exemption adjustment in 1986.

xxxx

Subsequently, Mr. Perez stressed the necessity of passing the measure to mitigate the
effects of the current inflation and of the implementation of the salary standardization
law. Stating that it is imperative for the government to take measures to ease the
burden of the individual income tax tilers, Mr. Perez then cited specific examples of how
the measure can help assuage the burden to the taxpayers.

He then reiterated that the increase in the prices of commodities has eroded the
purchasing power of the peso despite the recent salary increases and emphasized that
the Bill will serve to compensate the adverse effects of inflation on the taxpayers. xxx
(Journal of the House of Representatives, May 23, 1990, pp. 32-33). ChanRoblesVirtualawlibrary

It will also be observed that Rep. Act 7167 speaks of the adjustments that it provides
for, as adjustments "to the poverty threshold level." Certainly, "the poverty threshold
level" is the poverty threshold level at the time Rep. Act 7167 was enacted by
Congress, not poverty threshold levels in futuro, at which time there may be need of
further adjustments in personal exemptions. Moreover, the Court can not lose sight
of the fact that these personal and additional exemptions are fixed amounts to
which an individual taxpayer is entitled, as a means to cushion the devastating
effects of high prices and a depreciated purchasing power of the currency. In
the end, it is the lower-income and the middle-income groups of taxpayers
(not the high-income taxpayers) who stand to benefit most from the increase
of personal and additional exemptions provided for by Rep. Act 7167. To that
extent, the act is a social legislation intended to alleviate in part the present
economic plight of the lower income taxpayers. It is intended to remedy the
inadequacy of the heretofore existing personal and additional exemptions for
individual taxpayers.

And then, Rep. Act 7167 says that the increased personal exemptions that it provides
for shall be available thenceforth, that is, after Rep. Act 7167 shall have
become effective. In other words, these exemptions are available upon the
filing of personal income tax returns which is, under the National Internal
Revenue Code, done not later than the 15th day of April after the end of a
calendar year. Thus, under Rep. Act 7167, which became effective, as
aforestated, on 30 January 1992, the increased exemptions are literally
available on or before 15 April 1992 (though not before 30 January 1992). But
these increased exemptions can be available on 15 April 1992 only in respect of
compensation income earned or received during the calendar year 1991.

The personal exemptions as increased by Rep. Act 7167 cannot be regarded as

available in respect of compensation income received during the 1990 calendar year;
the tax due in respect of said income had already accrued, and been presumably paid,
by 15 April 1991 and by 15 July 1991, at which time Rep. Act 7167 had not been
enacted. To make Rep. Act 7167 refer back to income received during 1990 would
require language explicitly retroactive in purport and effect, language that would have
to authorize the payment of refunds of taxes paid on 15 April 1991 and 15 July 1991:
such language is simply not found in Rep. Act 7167.

The personal exemptions as increased by Rep. Act 7167 cannot be regarded as

available only in respect of compensation income received during 1992, as the
implementing Revenue Regulations No. 1-92 purport to provide. Revenue
Regulations No. 1-92 would in effect postpone the availability of the increased
exemptions to 1 January-15 April 1993, and thus literally defer the effectivity
of Rep. Act 7167 to 1 January 1993. Thus, the implementing regulations collide
frontally with Section 3 of Rep. Act 7167 which states that the statute "shall take effect
upon its approval." The objective of the Secretary of Finance and the Commissioner of
Internal Revenue in postponing through Revenue Regulations No. 1-92 the legal
effectivity of Rep. Act 7167 is, of course, entirely understandable-to defer to 1993 the
reduction of governmental tax revenues which irresistibly follows from the application of
Rep. Act 7167. But the law-making authority has spoken and the Court can not refuse
to apply the law-maker's words. Whether or not the government can afford the drop in
tax revenues resulting from such increased exemptions was for Congress (not this
Court) to decide.22 (Emphases supplied) ChanRoblesVirtualawlibrary

In this case, Senator Francis Escudero's sponsorship speech for Senate Bill No. 2293
reveals two important points about R.A. 9504: (1) it is a piece of social legislation; and
(2) its intent is to make the proposed law immediately applicable, that is, to taxable
year 2008:
chanRoblesvirtualLawlibrary

Mr. President, distinguished colleagues, Senate Bill No. 2293 seeks, among others, to
exempt minimum wage earners from the payment of income and/or withholding tax. It
is an attempt to help our people cope with the rising costs of commodities that
seem to be going up unhampered these past few months.

Mr. President, a few days ago, the Regional Tripartite and Wages Productivity Board
granted an increase of P20 per day as far as minimum wage earners arc concerned. By
way of impact, Senate Bill No. 2293 would grant our workers an additional salary or
take-home pay of approximately P34 per day, given the exemption that will be granted
to all minimum wage earners. It might be also worthy of note that on the part of the
public sector, the Senate Committee on Ways and Means included, as amongst those
who will be exempted from the payment of income tax and/or withholding tax.
government workers receiving Salary Grade V. We did not make any distinction so as to
include Steps 1 to 8 of Salary Grade V as long as one is employed in the public sector
or in government.

In contradistinction with House Bill No. 3971 approved by the House of Representatives
pertaining to a similar subject matter, the House of Representatives, very much like the
Senate, adopted the same levels of exemptions which are:
chanRoblesvirtualLawlibrary

From an allowable personal exemption for a single individual of P20,000, to a head of

family of P25,000, to a married individual of P32,000, both the House and the Senate
versions contain a higher personal exemption of P50,000. ChanRoblesVirtualawlibrary

Also, by way of personal additional exemption as far as dependents are concerned, up

to four, the House, very much like the Senate, recommended a higher ceiling of
P25,000 for each dependent not exceeding four, thereby increasing the maximum
additional exemptions and personal additional exemptions to as high as P200,000,
depending on one's status in life.

The House also, very much like the Senate, recommended by way of trying to address
the revenue loss on the part of the government, an optional standard deduction (OSD)
on gross sales, and/or gross receipts as far as individual taxpayers are concerned.
However, the House, unlike the Senate, recommended a Simplified Net Income Tax
Scheme (SNITS) in order to address the remaining balance of the revenue loss.

By way of contrast, the Senate Committee on Ways and Means recommended, in lieu of
SNITS, an optional standard deduction of 40% for corporations as far as their gross
income is concerned.

Mr. President, if we total the revenue loss as well as the gain brought about by the 40%
OSD on individuals on gross sales and receipts and 40% on gross income as far as
corporations are concerned, with a conservative availment rate as computed by the
Department of Finance, the government would still enjoy a gain of P.78 billion or P780
million if we use the high side of the computation however improbable it may be.

For the record, we would like to state that if the availment rate is computed at 15% for
individuals and 10% for corporations, the potential high side of a revenue gain would
amount to approximately P18.08 billion.

Mr. President, we have received many suggestions increasing the rate of personal
exemptions and personal additional exemptions. We have likewise received various
suggestions pertaining to the expansion of the coverage of the tax exemption granted
to minimum wage earners to encompass as well other income brackets.
However, the only suggestion other than or outside the provisions contained in House
Bill No. 3971 that the Senate Committee on Ways and Means adopted, was an
expansion of the exemption to cover overtime, holiday, nightshirt differential, and
hazard pay also being enjoyed by minimum wage earners. It entailed an additional
revenue loss of P1 billion approximately on the part of the government. However, Mr.
President, that was taken into account when I stated earlier that there will still be a
revenue gain on the conservative side on the part of government of P780 million.

Mr. President, [my distinguished colleagues in the Senate,  we wish to provide a

higher exemption for our countrymen because of the incessant and constant
increase in the price of goods. Nonetheless, not only Our Committee, but also the
Senate and Congress, must act responsibly in recognizing that much as we would like
to give all forms of help that we can and must provide to our people, we also need to
recognize the need of the government to defray its expenses in providing services to
the public. This is the most that we can give at this time because the government
operates on a tight budget and is short on funds when it comes to the discharge of its
main expenses.]23

Mr. President, time will perhaps come and we can improve on this version, but
at present, this is the best, I believe, that we can give our people. But by way of
comparison, it is still P10 higher than what the wage boards were able to give minimum
wage earners. Given that, we were able to increase their take-home pay by the
amount equivalent to the tax exemption we have granted.

We urge our colleagues, Mr. President, to pass this bill in earnest so that we
can immediately grant relief to our people.

Thank you, Mr. President. (Emphases Supplied)24 ChanRoblesVirtualawlibrary

Clearly, Senator Escudero expressed a sense of urgency for passing what would
subsequently become R.A. 9504. He was candid enough to admit that the bill needed
improvement, but because time was of the essence, he urged the Senate to pass the
bill immediately. The idea was immediate tax relief to the individual taxpayers,
particularly low compensation earners, and an increase in their take-home pay.25 cralawred

Senator Miriam Defensor-Santiago also remarked during the deliberations that "the
increase in personal exemption from P20,000 to P50,000 is timely and appropriate
given the increased cost of living. Also, the increase in the additional exemption for
dependent children is necessary and timely."26

Finally, we consider the President's certification of the necessity of e immediate

enactment of Senate Bill No. 2293. That certification became e basis for the Senate to
dispense with the three-day rule27 for passing a bill. It evinced the intent of the
President to afford wage earners immediate tax relief from the impact of a worldwide
increase in the prices of commodities. Specifically, the certification stated that the
purpose was to "address the urgent need to cushion the adverse impact of the global
escalation of commodity prices upon the most vulnerable within the low income group
by providing expanded income tax relief."28

In sum, R.A. 9504, like R.A. 7167 in Umali, was a piece of social legislation clearly
intended to afford immediate tax relief to individual taxpayers, particularly low-income
compensation earners. Indeed, if R.A. 9504 was to take effect beginning taxable year
2009 or half of the year 2008 only, then the intent of Congress to address the increase
in the cost of living in 2008 would have been negated.

Therefore, following Umali, the test is whether the new set of personal and additional
exemptions was available at the time of the filing of the income tax return. In other
words, while the status of the individual taxpayers is determined at the close of the
taxable year,29 their personal and additional exemptions - and consequently the
computation of their taxable income - are reckoned when the tax becomes due, and not
while the income is being earned or received.

The NIRC is clear on these matters. The taxable income of an individual taxpayer shall
be computed on the basis of the calendar year.30 The taxpayer is required to fi1e an
income tax return on the 15th of April of each year covering income of the preceding
taxable year.31 The tax due thereon shall be paid at the time the return is filed.32

It stands to reason that the new set of personal and additional exemptions, adjusted as
a form of social legislation to address the prevailing poverty threshold, should be given
effect at the most opportune time as the Court ruled in Umali.

The test provided by Umali is consistent with Ingalls v. Trinidad,33 in which the Court
dealt with the matter of a married person's reduced exemption. As early as 1923, the
Court already provided the reference point for determining the taxable income:
chanRoblesvirtualLawlibrary

[T]hese statutes dealing with the manner of collecting the income tax and with the
deductions to be made in favor of the taxpayer have reference to the time when the
return is filed and the tax assessed. If Act No. 2926 took, as it did take, effect on
January 1, 1921, its provisions must be applied to income tax returns filed, and
assessments made from that date. This is the reason why Act No. 2833, and Act No.
2926, in their respective first sections, refer to income received during the preceding
civil year. (Italics in the original)
ChanRoblesVirtualawlibrary

There, the exemption was reduced, not increased, and the Court effectively ruled that
income tax due from the individual taxpayer is properly determined upon the filing of
the return. This is done after the end of the taxable year, when all the incomes for the
immediately preceding taxable year and the corresponding personal exemptions and/or
deductions therefor have been considered. Therefore, the taxpayer was made to pay a
higher tax for his income earned during 1920, even if the reduced exemption took
effect on 1 January 1921.

In the present case, the increased exemptions were already available much earlier than
the required time of filing of the return on 15 April 2009. R.A. 9504 came into law on 6
July 2008, more than nine months before the deadline for the filing of the income tax
return for taxable year 2008. Hence, individual taxpayers were entitled to claim the
increased amounts for the entire year 2008. This was true despite the fact that incomes
were already earned or received prior to the law's effectivity on 6 July 2008.

Even more compelling is the fact that R.A. 9504 became effective during the taxable
year in question. In Umali, the Court ruled that the application of the law was
prospective, even if the amending law took effect after the close of the taxable year in
question, but before the deadline for the filing of the return and payment of the taxes
due for that year. Here, not only did R.A. 9504 take effect before the deadline for the
filing of the return and payment for the taxes due for taxable year 2008, it took effect
way before the close of that taxable year. Therefore, the operation of the new set of
personal and additional exemption in the present case was all the more prospective.

Additionally, as will be discussed later, the rule of full taxable year treatment for the
availment of personal and additional exemptions was established, not by the
amendments introduced by R.A. 9504, but by the provisions of the 1997 Tax Code
itself. The new law merely introduced a change in the amounts of the basic and
additional personal exemptions. Hence, the fact that R.A. 9504 took effect only on 6
July 2008 is irrelevant.

The present case is substantially identical with Umali and not with Pansacola.

Respondents argue that Umali is not applicable to the present case. They contend that
the increase in personal and additional exemptions were necessary in that case to
conform to the 1991 poverty threshold level; but that in the present case, the amounts
under R.A. 9504 far exceed the poverty threshold level. To support their case,
respondents cite figures allegedly coming from the National Statistical Coordination
Board. According to those figures, in 2007, or one year before the effectivity of R.A.
9504, the poverty threshold per capita was P14,866 or P89,196 for a family of six.34

We are not persuaded.

The variance raised by respondents borders on the superficial. The message of Umali is
that there must be an event recognized by Congress that occasions the immediate
application of the increased amounts of personal and additional exemptions. In Umali,
that event was the failure to adjust the personal and additional exemptions to the
prevailing poverty threshold level. In this case, the legislators specified the increase in
the price of commodities as the basis for the immediate availability of the new amounts
of personal and additional exemptions.

We find the facts of this case to be substantially identical to those of Umali.

First, both cases involve an amendment to the prevailing tax code. The present
petitions call for the interpretation of the effective date of the increase in personal and
additional exemptions. Otherwise stated, the present case deals with an amendment
(R.A. 9504) to the prevailing tax code (R.A. 8424 or the 1997 Tax Code). Like the
present case, Umali involved an amendment to the then prevailing tax code - it
interpreted the effective date of R.A. 7167, an amendment to the 1977 NIRC, which
also increased personal and additional exemptions.

Second, the amending law in both cases reflects an intent to make the new set of
personal and additional exemptions immediately available after the effectivity of the
law. As already pointed out, in Umali, R.A. 7167 involved social legislation intended to
adjust personal and additional exemptions. The adjustment was made in keeping with
the poverty threshold level prevailing at the time.
Third, both cases involve social legislation intended to cure a social evil - R.A. 7167
was meant to adjust personal and additional exemptions in relation to the poverty
threshold level, while R.A. 9504 was geared towards addressing the impact of the
global increase in the price of goods.

Fourth, in both cases, it was clear that the intent of the legislature was to hasten the
enactment of the law to make its beneficial relief immediately available.

Pansacola is not applicable.

In lieu of Umali, the OSG relies on our ruling in Pansacola v. Commissioner of Internal
Revenue.35 In that case, the 1997 Tax Code (R.A. 8424) took effect on 1 January 1998,
and the petitioner therein pleaded for the application of the new set of personal and
additional exemptions provided thereunder to taxable year 1997. R.A. 8424 explicitly
provided for its effectivity on 1 January 1998, but it did not provide for any retroactive
application.

We ruled against the application of the new set of personal and additional exemptions
to the previous taxable year 1997, in which the filing and payment of the income tax
was due on 15 April 1998, even if the NIRC had already taken effect on 1 January
1998. This court explained that the NIRC could not be given retroactive application,
given the specific mandate of the law that it shall take effect on 1 January 1998; and
given the absence of any reference to the application of personal and additional
exemptions to income earned prior to 1 January 1998. We further stated that what the
law considers for the purpose of determining the income tax due is the status at the
close of the taxable year, as opposed to the time of filing of the return and payment of
the corresponding tax.

The facts of this case are not identical with those of Pansacola.

First, Pansacola interpreted the effectivity of an entirely new tax code - R.A. 8424, the

Tax Reform Act of 1997. The present case, like Umali, involves a mere amendment of
some specific provisions of the prevailing tax code: R.A. 7167 amending then P.D. 1158
(the 1977 NIRC) in Umali and R.A. 9504 amending R.A. 8424 herein.

Second, in Pansacola, the new tax code specifically provided for an effective date - the
beginning of the following year - that was to apply to all its provisions, including new
tax rates, new taxes, new requirements, as well as new exemptions. The tax code did
not make any exception to the effectivity of the subject exemptions, even if transitory
provisions36 specifically provided for different effectivity dates for certain provisions.

Hence, the Court did not find any legislative intent to make the new rates of personal
and additional exemptions available to the income earned in the year previous to R.A.
8424's effectivity. In the present case, as previously discussed, there was a clear intent
on the part of Congress to make the new amounts of personal and additional
exemptions immediately available for the entire taxable year 2008. R.A. 9504 does not
even need a provision providing for retroactive application because, as mentioned
above, it is actually prospective - the new law took effect during the taxable year in
question.
Third, in Pansacola, the retroactive application of the new rates of personal and
additional exemptions would result in an absurdity - new tax rates under the new law
would not apply, but a new set of personal and additional exemptions could be availed
of. This situation does not obtain in this case, however, precisely because the new law
does not involve an entirely new tax code. The new law is merely an amendment to the
rates of personal and additional exemptions.

Nonetheless, R.A. 9504 can still be made applicable to taxable year 2008, even if we
apply the Pansacola test. We stress that Pansacola considers the close of the taxable
year as the reckoning date for the effectivity of the new exemptions. In that case, the
Court refused the application of the new set of personal exemptions, since they were
not yet available at the close of the taxable year. In this case, however, at the close of
the taxable year, the new set of exemptions was already available. In fact, it was
already available during the taxable year - as early as 6 July 2008 - when the new law
took effect.

There may appear to be some dissonance between the Court's declarations

in Umali and those in Pansacola, which held:
chanRoblesvirtualLawlibrary

Clearly from the above-quoted provisions, what the law should consider for the purpose
of determining the tax due from an individual taxpayer is his status and qualified
dependents at the close of the taxable year and not at the time the return is filed and
the tax due thereon is paid. Now comes Section 35(C) of the NIRC which provides,

xxxx

Emphasis must be made that Section 35(C) of the NIRC allows a taxpayer to still claim
the corresponding full amount of exemption for a taxable year, e.g. if he marries; have
additional dependents; he, his spouse, or any of his dependents die; and if any of his
dependents marry, turn 21 years old; or become gainfully employed. It is as if the
changes in his or his dependents status took place at the close of the taxable year.

Consequently, his correct taxable income and his corresponding allowable

deductions e.g. personal and additional deductions, if any, had already been
determined as of the end of the calendar year.

xxx. Since the NIRC took effect on January 1, 1998, the increased amounts of personal
and additional exemptions under Section 35, can only be allowed as deductions from
the individual taxpayers gross or net income, as the case maybe, for the taxable year
1998 to be filed in 1999. The NIRC made no reference that the personal and additional
exemptions shall apply on income earned before January 1, 1998.37 ChanRoblesVirtualawlibrary

It must be remembered, however, that the Court therein emphasized that Umali was

interpreting a social legislation:
chanRoblesvirtualLawlibrary

In Umali, we noted that despite being given authority by Section 29(1)(4) of the
National Internal Revenue Code of 1977 to adjust these exemptions, no adjustments
were made to cover 1989. Note that Rep. Act No. 7167 is entitled "An Act Adjusting the
Basic Personal and Additional Exemptions Allowable to Individuals for Income Tax
Purposes to the Poverty Threshold Level, Amending for the Purpose Section 29,
Paragraph (L), Items (1) and (2) (A), of the National Internal Revenue Code, As
Amended, and For Other Purposes." Thus, we said in Umali, that the adjustment
provided by Rep. Act No. 7167 effective 1992, should consider the poverty threshold
level in 1991, the time it was enacted. And we observed therein that since the
exemptions would especially benefit lower and middle-income taxpayers, the exemption
should be made to cover the past year 1991. To such an extent, Rep. Act No. 7167 was
a social legislation intended to remedy the non-adjustment in 1989. And as cited
in Umali, this legislative intent is also clear in the records of the House of
Representatives Journal.

This is not so in the case at bar. There is nothing in the NIRC that expresses any such
intent. The policy declarations in its enactment do not indicate it was a social
legislation that adjusted personal and additional exemptions according to the
poverty threshold level nor is there any indication that its application should
retroact. xxx38 (Emphasis Supplied) ChanRoblesVirtualawlibrary

Therefore, the seemingly inconsistent pronouncements in Umali and Pansacola are

more apparent than real. The circumstances of the cases and the laws interpreted, as
well as the legislative intents thereof, were different.

The policy in this jurisdiction is full taxable year treatment.

We have perused R.A. 9504, and we see nothing that expressly provides or even
suggests a prorated application of the exemptions for taxable year 2008. On the other
hand, the policy of full taxable year treatment, especially of the personal and additional
exemptions, is clear under Section 35, particularly paragraph C of R.A. 8424 or the
1997 Tax Code:
chanRoblesvirtualLawlibrary

SEC. 35. Allowance of Personal Exemption for Individual Taxpayer. -

(A) In General. - For purposes of determining the tax provided in Section 24(A) of this
Title, there shall be allowed a basic personal exemption as follows:

xxxx

(B) Additional Exemption for Dependents. - There shall be allowed an additional

exemption of... for each dependent not exceeding four (4).

xxxx

(C) Change of Status. - If the taxpayer marries or should have additional dependent(s)

as defined above during the taxable year, the taxpayer may claim the corresponding
additional exemption, as the case may be, in full for such year.

If the taxpayer dies during the taxable year, his estate may still claim the personal and
additional exemptions for himself and his dependent(s) as if he died at the close of
such year.

If the spouse or any of the dependents dies or if any of such dependents marries,
becomes twenty-one (21) years old or becomes gainfully employed during the taxable
year, the taxpayer may still claim the same exemptions as if the spouse or any of
the dependents died, or as if such dependents married, became twenty-one (21) years
old or became gainfully employed at the close of such year. (Emphases supplied) ChanRoblesVirtualawlibrary
Note that paragraph C does not allow the prorating of the personal and additional
exemptions provided in paragraphs A and B, even in case a status changing event
occurs during the taxable year. Rather, it allows the fullest benefit to the individual
taxpayer. This manner of reckoning the taxpayer's status for purposes of the personal
and additional exemptions clearly demonstrates the legislative intention; that is, for the
state to give the taxpayer the maximum exemptions that can be availed,
notwithstanding the fact that the latter's actual status would qualify only for a lower
exemption if prorating were employed.

We therefore see no reason why we should make any distinction between the income
earned prior to the effectivity of the amendment (from 1 January 2008 to 5 July 2008)
and that earned thereafter (from 6 July 2008 to 31 December 2008) as none is
indicated in the law. The principle that the courts should not distinguish when the law
itself does not distinguish squarely applies to this case.39

We note that the prorating of personal and additional exemptions was employed in the
1939 Tax Code. Section 23(d) of that law states:
chanRoblesvirtualLawlibrary

Change of status. - If the status of the taxpayer insofar as it affects the personal and
additional exemptions for himself or his dependents, changes during the taxable
year, the amount of the personal and additional exemptions shall be
apportioned, under rules and regulations prescribed by the Secretary of
Finance, in accordance with the number of months before and after such
change. For the purpose of such apportionment a fractional part of a month shall be
disregarded unless it amounts to more than half a month, in which case it shall be
considered as a month.40 (Emphasis supplied) ChanRoblesVirtualawlibrary

On 22 September 1950, R.A. 590 amended Section 23(d) of the 1939 Tax Code by
restricting the operation of the prorating of personal exemptions. As amended, Section
23(d) reads:
chanRoblesvirtualLawlibrary

(d) Change of status. - If the status of the taxpayer insofar as it affects the personal
and additional exemption for himself or his dependents, changes during the taxable
year by reason of his death, the amount of the personal and additional exemptions
shall be apportioned, under rules and regulations prescribed by the Secretary of
Finance, in accordance with the number of months before and after such change. For
the purpose of such apportionment a fractional part of a month shall be disregarded
unless it amounts to more than half a month, in which case it shall be considered as a
month.41 (Emphasis supplied) ChanRoblesVirtualawlibrary

Nevertheless, in 1969, R. A. 6110 ended the operation of the prorating scheme in our
jurisdiction when it amended Section 23(d) of the 1939 Tax Code and adopted a full
taxable year treatment of the personal and additional exemptions. Section 23(d), as
amended, reads:
chanRoblesvirtualLawlibrary

(d) Change of status.

If the taxpayer married or should have additional dependents as defined in subsection

(c) above during the taxable year the taxpayer may claim the corresponding personal
exemptions in full for such year.

If the taxpayer should die during the taxable year, his estate may still claim the
personal and additional deductions for himself and his dependents as if he died at the
close of such year.
If the spouse or any of the dependents should die during the year, the taxpayer may
still claim the same deductions as if they died at the close of such year. ChanRoblesVirtualawlibrary

P.D. 69 followed in 1972, and it retained the full taxable year scheme. Section 23(d)
thereof reads as follows:
chanRoblesvirtualLawlibrary

(d) Change of status. - If the taxpayer marries or should have additional dependents as
defined in subsection (c) above during the taxable year the taxpayer may claim the
corresponding personal exemptions in full for such year.

If the taxpayer should die during the taxable year, his estate may still claim the
personal and additional deductions for himself and his dependents as if he died at the
close of such year.

If the spouse or any of the dependents should die or become twenty-one years old
during the taxable year, the taxpayer may still claim the same exemptions as if they
died, or as if such dependents became twenty-one years old at the close of such
year. ChanRoblesVirtualawlibrary

The 1977 Tax Code continued the policy of full taxable year treatment. Section 23(d)
thereof states:
chanRoblesvirtualLawlibrary

(d) Change of status. - If the taxpayer married or should have additional dependents as
defined in subsection (c) above during the taxable year, the taxpayer may claim the
corresponding personal exemption in full for such year.

If the taxpayer should die during the taxable year, his estate may still claim the
personal and additional exemptions for himself and his dependents as if he died at the
close of such year.

If the spouse or any of the dependents should die or become twenty-one years old
during the taxable year, the taxpayer may still claim the same exemptions as if they
died, or as if such dependents became twenty-one years old at the close of such
year. ChanRoblesVirtualawlibrary

While Section 23 of the 1977 Tax Code underwent changes, the provision on full
taxable year treatment in case of the taxpayer's change of status was left
untouched.42 Executive Order No. 37, issued on 31 July 1986, retained the change of
status provision verbatim. The provision appeared under Section 30(1)(3) of the NIRC,
as amended:
chanRoblesvirtualLawlibrary

(3) Change of status. - If the taxpayer married or should have additional dependents as
defined above during the taxable year, the taxpayer may claim the corresponding
personal and additional exemptions, as the case may be, in full for such year.

If the taxpayer should die during the taxable year, his estate may still claim the
personal and additional exemptions for himself and his dependents as if he died at the
close of such year.

If the spouse or any of the dependents should die or if any of such dependents
becomes twenty-one years old during the taxable year, the taxpayer may still claim the
same exemptions as if they died, or if such dependents become twenty-one years old at
the close of such year. ChanRoblesVirtualawlibrary
Therefore, the legislative policy of full taxable year treatment of the personal and
additional exemptions has been in our jurisdiction continuously since 1969. The
prorating approach has long since been abandoned. Had Congress intended to revert to
that scheme, then it should have so stated in clear and unmistakeable terms. There is
nothing, however, in R.A. 9504 that provides for the reinstatement of the prorating
scheme. On the contrary, the change-of-status provision utilizing the full-year scheme
in the 1997 Tax Code was left untouched by R.A. 9504.

We now arrive at this important point: the policy of full taxable year treatment is
established, not by the amendments introduced by R.A. 9504, but by the provisions of
the 1997 Tax Code, which adopted the policy from as early as 1969.

There is, of course, nothing to prevent Congress from again adopting a policy that
prorates the effectivity of basic personal and additional exemptions. This policy,
however, must be explicitly provided for by law to amend the prevailing law, which
provides for full-year treatment. As already pointed out, R.A. 9504 is totally silent on
the matter. This silence cannot be presumed by the BIR as providing for a half-year
application of the new exemption levels. Such presumption is unjust, as incomes do not
remain the same from month to month, especially for the MWEs.

Therefore, there is no legal basis for the BIR to reintroduce the prorating of the new
personal and additional exemptions. In so doing, respondents overstepped the bounds
of their rule-making power. It is an established rule that administrative regulations are
valid only when these are consistent with the law.43 Respondents cannot amend, by
mere regulation, the laws they administer.44 To do so would violate the principle of non-
delegability of legislative powers.45

The prorated application of the new set of personal and additional exemptions for the
year 2008, which was introduced by respondents, cannot even be justified under the
exception to the canon of non-delegability; that is, when Congress makes a delegation
to the executive branch.46 The delegation would fail the two accepted tests for a valid
delegation of legislative power; the completeness test and the sufficient standard
test.47 The first test requires the law to be complete in all its terms and conditions, such
that the only thing the delegate will have to do is to enforce it.48 The sufficient standard
test requires adequate guidelines or limitations in the law that map out the boundaries
of the delegate's authority and canalize the delegation.49

In this case, respondents went beyond enforcement of the law, given the absence of a
provision in R.A. 9504 mandating the prorated application of the new amounts of
personal and additional exemptions for 2008. Further, even assuming that the law
intended a prorated application, there are no parameters set forth in R.A. 9504 that
would delimit the legislative power surrendered by Congress to the delegate. In
contrast, Section 23(d) of the 1939 Tax Code authorized not only the prorating of the
exemptions in case of change of status of the taxpayer, but also authorized the
Secretary of Finance to prescribe the corresponding rules and regulations. chanroblesvirtuallawlibrary

II.

Whether an MWE is exempt for the entire taxable year 2008 or from 6 July
2008 only
The MWE is exempt for the entire taxable year 2008.

As in the case of the adjusted personal and additional exemptions, the MWE exemption
should apply to the entire taxable year 2008, and not only from 6 July 2008 onwards.

We see no reason why Umali cannot be made applicable to the MWE exemption, which

is undoubtedly a piece of social legislation. It was intended to alleviate the plight of the
working class, especially the low income earners. In concrete terms, the exemption
translates to a P34 per day benefit, as pointed out by Senator Escudero in his
sponsorship speech.50

As it stands, the calendar year 2008 remained as one taxable year for an individual
taxpayer. Therefore, RR 10-2008 cannot declare the income earned by a minimum
wage earner from 1 January 2008 to 5 July 2008 to be taxable and those earned by
him for the rest of that year to be tax-exempt. To do so would be to contradict the
NIRC and jurisprudence, as taxable income would then cease to be determined on a
yearly basis.

Respondents point to the letter of former Commissioner of Internal Revenue Lilia B.

Hefti dated 5 July 2008 and petitioner Sen. Escudero's signature on
the Conforme portion thereof. This letter and the conforme supposedly establish the
legislative intent not to make the benefits of R.A. 9504 effective as of 1 January 2008.

We are not convinced. The conforme is irrelevant in the determination of legislative

intent.

We quote below the relevant portion of former Commissioner Hefti's letter:

chanRoblesvirtualLawlibrary

Attached herewith are salient features of the proposed regulations to implement RA

9504 xxx. We have tabulated critical issues raised during the public hearing and
comments received from the public which we need immediate written resolution based
on the inten[t]ion of the law more particularly the effectivity clause. Due to the
expediency and clamor of the public for its immediate implementation, may we request
your confirmation on the proposed recommendation within five (5) days from receipt
hereof. Otherwise, we shall construe your affirmation.51 ChanRoblesVirtualawlibrary

We observe that a Matrix of Salient Features of Proposed Revenue Regulations per R.A.
9504 was attached to the letter.52 The Matrix had a column entitled "Remarks" opposite
the Recommended Resolution. In that column, noted was a suggestion coming from
petitioner TMAP:
chanRoblesvirtualLawlibrary

TMAP suggested that it should be retroactive considering that it was [for] the benefit of
the majority and to alleviate the plight of workers. Exemption should be applied for the
whole taxable year as provided in the NIRC. xxx Umali v. Estanislao [ruled] that the
increase[d] exemption in 1992 [was applicable] [to] 1991.

Majority issues raised during the public hearing last July 1, 2008 and emails received
suggested [a] retroactive implementation. 53 Italics in the original) ChanRoblesVirtualawlibrary

The above remarks belie the claim that the conforme is evidence of the legislative
intent to make the benefits available only from 6 July 2008 onwards. There would have
been no need to make the remarks if the BIR had merely wanted to confirm was the
availability of the law's benefits to income earned starting 6 July 2008. Rather, the
implication is that the BIR was requesting the conformity of petitioner Senator Escudero
to the proposed implementing rules, subject to the remarks contained in the Matrix.
Certainly, it cannot be said that Senator Escudero's conforme is evidence of legislative
intent to the effect that the benefits of the law would not apply to income earned from
1 January 2008 to 5 July 2008.

Senator Escudero himself states in G.R. No. 185234:

chanRoblesvirtualLawlibrary

In his bid to ensure that the BIR would observe the effectivity dates of the grant of tax
exemptions and increased basic personal and additional exemptions under Republic Act
No. 9504, Petitioner Escudero, as Co-Chairperson of the Congressional Oversight
Committee on Comprehensive Tax Reform Program, and his counterpart in the House of
Representatives, Hon. Exequiel B. Javier, conveyed through a letter, dated 16
September 2008, to Respondent Teves the legislative intent that "Republic Act (RA) No.
9504 must be made applicable to the entire taxable year 2008" considering that it was
"a social legislation intended to somehow alleviate the plight of minimum wage earners
or low income taxpayers". They also jointly expressed their "fervent hope that the
corresponding Revenue Regulations that will be issued reflect the true legislative intent
and rightful statutory interpretation of R.A. No. 9504."54
ChanRoblesVirtualawlibrary

Senator Escudero repeats in his Memorandum:

chanRoblesvirtualLawlibrary

On 16 September 2008, the Chairpersons (one of them being herein Petitioner Sen.
Escudero) of the Congressional Oversight Committee on Comprehensive Tax Reform
Program of both House of Congress wrote Respondent DOF Sec. Margarito Teves, and
requested that the revenue regulations (then yet still to be issued)55 to implement
Republic Act No. 9504 reflect the true intent and rightful statutory interpretation
thereof, specifically that the grant of tax exemption and increased basic personal and
additional exemptions be made available for the entire taxable year 2008. Yet, the DOF
promulgated Rev. Reg. No. 10-2008 in contravention of such legislative intent. xxx.56 ChanRoblesVirtualawlibrary

We have gone through the records and we do not see anything that would to suggest
that respondents deny the senator's assertion.

Clearly, Senator Escudero's assertion is that the legislative intent is to make the MWE's
tax exemption and the increased basic personal and additional exemptions available for
the entire year 2008. In the face of his assertions, respondents' claim that
his conforme to Commissioner Hefti's letter was evidence of legislative intent becomes
baseless and specious. The remarks described above and the subsequent letter sent to
DOF Secretary Teves, by no less than the Chairpersons of the Bi-cameral Congressional
Oversight Committee on Comprehensive Tax Reform Program, should have settled for
respondents the matter of what the legislature intended for R.A. 9504's exemptions.

Accordingly, we agree with petitioners that RR 10-2008, insofar as it allows the

availment of the MWE's tax exemption and the increased personal and additional
exemptions beginning only on 6 July 2008 is in contravention of the law it purports to
implement.

A clarification is proper at this point. Our ruling that the MWE exemption is available for
the entire taxable year 2008 is premised on the fact of one's status as an MWE; that is,
whether the employee during the entire year of 2008 was an MWE as defined by R.A.
9504. When the wages received exceed the minimum wage anytime during the taxable
year, the employee necessarily loses the MWE qualification. Therefore, wages become
taxable as the employee ceased to be an MWE. But the exemption of the employee
from tax on the income previously earned as an MWE remams.

This rule reflects the understanding of the Senate as gleaned from the exchange
between Senator Miriam Defensor-Santiago and Senator Escudero:
chanRoblesvirtualLawlibrary

Asked by Senator Defensor-Santiago on how a person would be taxed if, during the
year, he is promoted from Salary Grade 5 to Salary Grade 6 in July and ceases to be a
minimum wage employee, Senator Escudero said that the tax computation would be
based starting on the new salary in July.57 ChanRoblesVirtualawlibrary

As the exemption is based on the employee's status as an MWE, the operative phrase is
when the employee ceases to be an MWE. Even beyond 2008, it is therefore possible
for one employee to be exempt early in the year for being an MWE for that period, and
subsequently become taxable in the middle of the same year with respect to the
compensation income, as when the pay is increased higher than the minimum wage.
The improvement of one's lot, however, cannot justly operate to make the employee
liable for tax on the income earned as an MWE.

Additionally, on the question of whether one who ceases to be an MWE may still be
entitled to the personal and additional exemptions, the answer must necessarily be yes.
The MWE exemption is separate and distinct from the personal and additional
exemptions. One's status as an MWE does not preclude enjoyment of the personal and
additional exemptions. Thus, when one is an MWE during a part of the year and later
earns higher than the minimum wage and becomes a non-MWE, only earnings for that
period when one is a non-MWE is subject to tax. It also necessarily follows that such an
employee is entitled to the personal and additional exemptions that any individual
taxpayer with taxable gross income is entitled.

A different interpretation will actually render the MWE exemption a totally oppressive
legislation. It would be a total absurdity to disqualifY an MWE from enjoying as much as
P150,00058 in personal and additional exemptions just because sometime in the year,
he or she ceases to be an MWE by earning a little more in wages. Laws cannot be
interpreted with such absurd and unjust outcome. It is axiomatic that the legislature is
assumed to intend right and equity in the laws it passes.59

Critical, therefore, is how an employee ceases to become an MWE and thus ceases to
be entitled to an MWE's exemption.

III.

Whether Sections 1 and 3 of RR 10-2008 are consistent with the law in

declaring that an MWE who receives other benefits in excess of the statutory
limit of P30,000 is no longer entitled to the exemption provided by R.A. 9504,
is consistent with the law.

Sections 1 and 3 of RR 10-2008 add a requirement not found in the law by effectively
declaring that an MWE who receives other benefits in excess of the statutory limit of
P30,000 is no longer entitled to the exemption provided by R.A. 9504.

The BIR added a requirement not found in the law.

The assailed Sections 1 and 3 of RR 10-2008 are reproduced hereunder for easier
reference.
SECTION 1. Section 2.78.1 of RR 2-98, as amended, is hereby further amended to
read as follows:
chanRoblesvirtualLawlibrary

Sec. 2.78.1. Withholding of Income Tax on Compensation Income. -

(A) Compensation Income Defined. - xxx

xxxx
(3) Facilities and privileges of relatively small value. - Ordinarily, facilities, and
privileges (such as entertainment. medical services, or so-called "courtesy" discounts
on purchases), otherwise known as "de minimis benefits," furnished or offered by an
employer to his employees, are not considered as compensation subject to income tax
and consequently to withholding tax, if such facilities or privileges are of relatively small
value and are offered or furnished by the employer merely as means of promoting the
health, goodwill, contentment, or efficiency of his employees.

The following shall be considered as "de minimis" benefits not subject to income tax,
hence, not subject to withholding tax on compensation income of both managerial and
rank and file employees:
chanRoblesvirtualLawlibrary

(a) Monetized unused vacation leave credits of employees not exceeding ten (10) days
during the year and the monetized value of leave credits paid to government officials
and employees; chanrobleslaw

(b) Medical cash allowance to dependents of employees not exceedingP750.00 per

employee per semester or P125 per month; chanrobleslaw

(c) Rice subsidy of P1,500.00 or one (1) sack of 50-kg. rice per month amounting to
not more than P1,500.00; chanrobleslaw

(d) Uniforms and clothing allowance not exceeding P4,000.00 per annum; chanrobleslaw

(e) Actual yearly medical benefits not exceeding P10,000.00 per annum; chanrobleslaw

(f) Laundry allowance not exceeding P300.00 per month; chanrobleslaw

(g) Employees achievement awards, e.g., for length of service or safety achievement,
which must be in the form of a tangible personal property other than cash or gift
certificate, with an annual monetary value not exceeding P10,000.00 received by the
employee under an established written plan which does not discriminate in favor of
highly paid employees; chanrobleslaw

(h) Gifts given during Christmas and major anniversary celebrations not exceeding
P5,000.00 per employee per annum; chanrobleslaw

(i) Flowers, fruits, books, or similar items given to employees under special
circumstances, e.g., on account of illness, marriage, birth of a baby, etc.; and
(j) Daily meal allowance for overtime work not exceeding twenty-five percent (25%) of
the basic minimum wage.60 ChanRoblesVirtualawlibrary

The amount of 'de minimis' benefits conforming to the ceiling herein prescribed shall
not be considered in determining the P30,000.00 ceiling of 'other benefits' excluded
from gross income under Section 32(b)(7)(e) of the Code. Provided that, the excess of
the 'de minimis' benefits over their respective ceilings prescribed by these regulations
shall be considered as part of 'other benefits' and the employee receiving it will be
subject to tax only on the excess over the P30,000.00 ceiling. Provided, further, that
MWEs rece1vmg 'other benefits' exceeding the P30,000.00 limit shall be
taxable on the excess benefits, as well as on his salaries, wages and
allowances, just like an employee receiving compensation income beyond the
SMW.

Any amount given by the employer as benefits to its employees, whether classified as
'de minimis' benefits or fringe benefits, shall constitute [a] deductible expense upon
such employer.

Where compensation is paid in property other than money, the employer shall make
necessary arrangements to ensure that the amount of the tax required to be withheld is
available for payment to the Bureau of Internal Revenue.

xxxx ChanRoblesVirtualawlibrary

(B) Exemptions from Withholding Tax on Compensation. - The following income

payments are exempted from the requirements of withholding tax on compensation:

xxxx

(13) Compensation income of MWEs who work in the private sector and being
paid the Statutory Minimum Wage (SMW), as fixed by Regional Tripartite Wage
and Productivity Board (RTWPB)/National Wages and Productivity Commission (NWPC),
applicable to the place where he/she is assigned.

The aforesaid income shall likewise be exempted from income tax.

"Statutory Minimum Wage" (SMW) shall refer to the rate fixed by the Regional
Tripartite Wage and Productivity Board (RTWPB), as defined by the Bureau of Labor and
Employment Statistics (BLES) of the Department of Labor and Employment (DOLE).
The RTWPB of each region shall determine the wage rates in the different regions based
on established criteria and shall be the basis of exemption from income tax for this
purpose.

Holiday pay, overtime pay, night shift differential pay and hazard pay earned by the
aforementioned MWE shall likewise be covered by the above exemption. Provided,
however, that an employee who receives/earns additional compensation such
as commissions, honoraria, fringe benefits, benefits in excess of the allowable
statutory amount of P30,000.00, taxable allowances and other taxable income
other than the SMW, holiday pay, overtime pay, hazard pay and night shift
differential pay shall not enjoy the privilege of being a MWE and, therefore,
his/her entire earnings are not exempt form income tax, and consequently, from
withholding tax.
MWEs receiving other income, such as income from the conduct of trade,
business, or practice of profession, except income subject to final tax, in addition to
compensation income are not exempted from income tax on their entire income earned
during the taxable year. This rule, notwithstanding, the [statutory minimum
wage], [h]oliday pay, overtime pay, night shift differential pay and hazard pay
shall still be exempt from withholding tax.

For purposes of these regulations, hazard pay shall mean xxx.

In case of hazardous employment, xxx

The NWPC shall officially submit a Matrix of Wage Order by region xxx

Any reduction or diminution of wages for purposes of exemption from income tax shall
constitute misrepresentation and therefore, shall result to the automatic disallowance of
expense, i.e. compensation and benefits account, on the part of the employer. The
offenders may be criminally prosecuted under existing laws.

(14) Compensation income of employees in the public sector with compensation

income of not more than the SMW in the non-agricultural sector, as fixed by
RTWPB/NWPC, applicable to the place where he/she is assigned.

The aforesaid income shall likewise be exempted from income tax.

The basic salary of MWEs in the public sector shall be equated to the SMW in the non-
agricultural sector applicable to the place where he/she is assigned. The determination
of the SMW in the public sector shall likewise adopt the same procedures and
consideration as those of the private sector.

Holiday pay, overtime pay, night shift differential pay and hazard pay earned by the
aforementioned MWE in the public sector shall likewise be covered by the above
exemption. Provided, however, that a public sector employee who receives
additional compensation such as commissions, honoraria, fringe benefits,
benefits in excess of the allowable statutory amount of P30,000.00, taxable
allowances and other taxable income other than the SMW, holiday pay, overtime pay,
night shift differential pay and hazard pay shall not enjoy the privilege of being a
MWE and, therefore, his/her entire earnings are not exempt from income
tax and, consequently, from withholding tax.

MWEs receiving other income, such as income from the conduct of trade,
business, or practice of profession, except income subject to final tax, in addition to
compensation income are not exempted from income tax on their entire income earned
during the taxable year. This rule, notwithstanding, the SMW, Holiday pay,
overtime pay, night shift differential pay and hazard pay shall still be exempt
from withholding tax.

For purposes of these regulations, hazard pay shall mean xxx

In case of hazardous employment, xxx

xxxx

SECTION 3. Section 2.79 of RR 2-98, as amended, is hereby further amended to read

as follows:

Sec. 2.79. Income Tax Collected at Source on Compensation Income.-

(A) Requirement of Withholding. - Every employer must withhold from compensation

paid an amount computed in accordance with these Regulations. Provided, that no
withholding of tax shall be required on the SMW, including holiday pay, overtime pay,
night shift differential and hazard pay of MWEs in the private/public sectors as defined
in these Regulations. Provided, further, that an employee who receives
additional compensation such as commissions, honoraria, fringe benefits,
benefits in excess of the allowable statutory amount of P30,000.00, taxable
allowances and other taxable income other than the SMW, holiday pay,
overtime pay, hazard pay and night shift differential pay shall not enjoy the
privilege of being a MWE and, therefore, his/her entire earnings are not
exempt from income tax and, consequently, shall be subject to withholding
tax.

xxxx

For the year 2008, however, being the initial year of implementation of R.A. 9504,
there shall be a transitory withholding tax table for the period from July 6 to December
31, 2008 (Annex "D") determined by prorating the annual personal and additional
exemptions under R.A. 9504 over a period of six months. Thus, for individuals,
regardless of personal status, the prorated personal exemption is P25,000, and for each
qualified dependent child (QDC), P12,500. ChanRoblesVirtualawlibrary

On the other hand, the pertinent provisions of law, which are supposed to be
implemented by the above-quoted sections of RR 10-2008, read as follows:
chanRoblesvirtualLawlibrary

SECTION 1. Section 22 of Republic Act No. 8424, as amended, otherwise known as the
National Internal Revenue Code of 1997, is hereby further amended by adding the
following definitions after Subsection (FF) to read as follows:
chanRoblesvirtualLawlibrary

Section 22. Definitions. - when used in this Title:61

(A) xxx

(FF) xxx

(GG) The term 'statutory minimum wage' shall refer to the rate fixed by the
Regional Tripartite Wage and Productivity Board, as defined by the Bureau of
Labor and Employment Statistics (BLES) of the Department of Labor and Employment
(DOLE).

(HH) The term 'minimum wage earner' shall refer to a worker in the private
sector paid the statutory minimum wage, or to an employee in the public
sector with compensation income of not more than the statutory minimum
wage in the non-agricultural sector where he/she is assigned. ChanRoblesVirtualawlibrary
SECTION 2. Section 24(A) of Republic Act No. 8424, as amended, otherwise known as
the National Internal Revenue Code of 1997, is hereby further amended to read as
follows:
chanRoblesvirtualLawlibrary

SEC. 24. Income Tax Rates. -

(A) Rates of Income Tax on Individual Citizen and Individual Resident Alien of the
Philippines. -

(1) xxx

xxxx; and

(c) On the taxable income defined in Section 31 of this Code, other than income subject
to tax under Subsections (B), (C) and (D) of this Section, derived for each taxable year
from all sources within the Philippines by an individual alien who is a resident of the
Philippines.

(2) Rates of Tax on Taxable Income of Individuals.

The tax shall be computed in accordance with and at the rates established in the
following schedule:

xxxx

For married individuals, the husband and wife, subject to the provision of Section 51
(D) hereof, shall compute separately their individual income tax based on their
respective total taxable income: Provided, That if any income cannot be definitely
attributed to or identified as income exclusively earned or realized by either of the
spouses, the same shall be divided equally between the spouses for the purpose of
determining their respective taxable income.

Provided, That minimum wage earners as defined in Section 22(HH) of this

Code shall be exempt from the payment of income tax on their taxable income:
Provided, further, That the holiday pay, overtime pay, night shift differential
pay and hazard pay received by such minimum wage earners shall likewise be
exempt from income tax.

xxxx ChanRoblesVirtualawlibrary

SECTION 5. Section 51(A)(2) of Republic Act No. 8424, as amended, otherwise known
as the National Internal Revenue Code of 1997, is hereby further amended to read as
follows:
chanRoblesvirtualLawlibrary

SEC. 51. Individual Return. -

(A) Requirements. -

(1) Except as provided in paragraph (2) of this Subsection, the following individuals are
required to file an income tax return:

(a) xxx
xxxx

(2) The following individuals shall not be required to file an income tax return:

(a) xxx

(b) An individual with respect to pure compensation income, as defined in Section 32(A)
(1), derived from sources within the Philippines, the income tax on which has been
correctly withheld under the provisions of Section 79 of this Code:

Provided, That an individual deriving compensation concurrently from two or more

employers at any time during the taxable year shall file an income tax return; chanrobleslaw

(c) xxx; and

(d) A minimum wage earner as defined in Section 22(HH) of this Code or an

individual who is exempt from income tax pursuant to the provisions of this Code and
other laws, general or special.

xxxx ChanRoblesVirtualawlibrary

SECTION 6. Section 79(A) of Republic Act No. 8424, as amended, otherwise known as
the National Internal Revenue Code of 1997, is hereby further amended to read as
follows:
chanRoblesvirtualLawlibrary

SEC. 79. Income Tax Collected at Source. -

(A) Requirement of Withholding. - Except in the case of a minimum wage
earner as defined in Section 22(HH) of this Code, every employer making
payment of wages shall deduct and withhold upon such wages a tax determined in
accordance with the rules and regulations to be prescribed by the Secretary of Finance,
upon recommendation of the Commissioner. (Emphases supplied) ChanRoblesVirtualawlibrary

Nowhere in the above provisions of R.A. 9504 would one find the qualifications
prescribed by the assailed provisions of RR 10-2008. The provisions of the law are clear
and precise; they leave no room for interpretation - they do not provide or require any
other qualification as to who are MWEs.

To be exempt, one must be an MWE, a term that is clearly defined. Section 22(HH)
says he/she must be one who is paid the statutory minimum wage if he/she works in
the private sector, or not more than the statutory minimum wage in the non-
agricultural sector where he/she is assigned, if he/she is a government employee. Thus,
one is either an MWE or he/she is not. Simply put, MWE is the status acquired upon
passing the litmus test - whether one receives wages not exceeding the prescribed
minimum wage.

The minimum wage referred to in the definition has itself a clear and definite meaning.
The law explicitly refers to the rate fixed by the Regional Tripartite Wage and
Productivity Board, which is a creation of the Labor Code.62 The Labor Code clearly
describes wages and Minimum Wage under Title II of the Labor Code. Specifically,
Article 97 defines "wage" as follows:
chanRoblesvirtualLawlibrary

(f) "Wage" paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or other method of calculating
the same, which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or for services rendered
or to be rendered and includes the fair and reasonable value, as determined by the
Secretary of Labor and Employment, of board, lodging, or other facilities customarily
furnished by the employer to the employee. "Fair and reasonable value" shall not
include any profit to the employer, or to any person affiliated with the employer.
ChanRoblesVirtualawlibrary

While the Labor Code's definition of "wage" appears to encompass any payments of any
designation that an employer pays his or her employees, the concept of minimum wage
is distinct.63 "Minimum wage" is wage mandated; one that employers may not freely
choose on their own to designate in any which way.

In Article 99, minimum wage rates are to be prescribed by the Regional Tripartite
Wages and Productivity Boards. In Articles 102 to 105, specific instructions are given in
relation to the payment of wages. They must be paid in legal tender at least once every
two weeks, or twice a month, at intervals not exceeding 16 days, directly to the worker,
except in case of force majeure or death of the worker.

These are the wages for which a minimum is prescribed. Thus, the minimum wage
exempted by R.A. 9504 is that which is referred to in the Labor Code. It is distinct and
different from other payments including allowances, honoraria, commissions,
allowances or benefits that an employer may pay or provide an employee.

Likewise, the other compensation incomes an MWE receives that are also exempted by
R.A. 9504 are all mandated by law and are based on this minimum wage.

Additional compensation in the form of overtime pay is mandated for work beyond the
normal hours based on the employee's regular wage.64

Those working between ten o'clock in the evening and six o'clock in the morning are
required to be paid a night shift differential based on their regular
wage.65 Holiday/premium pay is mandated whether one works on regular holidays or on
one's scheduled rest days and special holidays. In all of these cases, additional
compensation is mandated, and computed based on the employee's regular wage.66

R.A. 9504 is explicit as to the coverage of the exemption: the wages that are not in
excess of the minimum wage as determined by the wage boards, including the
corresponding holiday, overtime, night differential and hazard pays.

In other words, the law exempts from income taxation the most basic compensation an
employee receives - the amount afforded to the lowest paid employees by the mandate
of law. In a way, the legislature grants to these lowest paid employees additional
income by no longer demanding from them a contribution for the operations of
government. This is the essence of R.A. 9504 as a social legislation. The government,
by way of the tax exemption, affords increased purchasing power to this sector of the
working class.

This intent is reflected in the Explanatory Note to Senate Bill No. 103 of Senator Roxas:
chanRoblesvirtualLawlibrary

This bill seeks to exempt minimum wage earners in the private sector and government
workers in Salary Grades 1 to 3, amending certain provisions of Republic Act 8424,
otherwise known as the National Internal Revenue Code of 1997, as amended.

As per estimates by the National Wages and Productivity Board, there are 7
million workers earning the minimum wage and even below. While these
workers are in the verge of poverty, it is unfair and unjust that the
Government, under the law, is taking away a portion of their already
subsistence-level income.

Despite this narrow margin from poverty, the Government would still be
mandated to take a slice away from that family's meager resources. Even if
the Government has recently exempted minimum wage earners from
withholding taxes, they are still liable to pay income taxes at the end of the
year. The law must be amended to correct this injustice. (Emphases supplied) ChanRoblesVirtualawlibrary

The increased purchasing power is estimated at about P9,500 a year.67 RR 10-2008,

however, takes this away. In declaring that once an MWE receives other forms of
taxable income like commissions, honoraria, and fringe benefits in excess of the non-
taxable statutory amount of P30,000, RR 10-2008 declared that the MWE immediately
becomes ineligible for tax exemption; and otherwise non-taxable minimum wage, along
with the other taxable incomes of the MWE, becomes taxable again.

Respondents acknowledge that R.A. 9504 is a social legislation meant for social
justice,68 but they insist that it is too generous, and that consideration must be given to
the fiscal position and financial capability of the government.69 While they acknowledge
that the intent of the income tax exemption of MWEs is to free low-income earners from
the burden of taxation, respondents, in the guise of clarification, proceed to redefine
which incomes may or may not be granted exemption. These respondents cannot do
without encroaching on purely legislative prerogatives.

By way of review, this P30,000 statutory ceiling on benefits has its beginning in 1994
under R. A. 7833, which amended then Section 28(b)(8) of the 1977 NIRC. It is
substantially carried over as Section 32(B) (Exclusion from Gross Income) of Chapter VI
(Computation of Gross Income) of Title II (Tax on Income) in the 1997 NIRC (R.A.
8424). R.A. 9504 does not amend that provision of R.A. 8424, which reads:
chanRoblesvirtualLawlibrary

SEC. 32. Gross Income. -

(A) General Definition. - xxx

(B) Exclusions from Gross Income. - The following items shall not be included in gross
income and shall be exempt from taxation under this title:
chanRoblesvirtualLawlibrary

(1) xxx

xxxx

(7) Miscellaneous Items. -

(a) xxx

xxxx

(e) 13th Month Pay and Other Benefits. - Gross benefits received by officials and
employees of public and private entities: Provided, however, That the total exclusion
under this subparagraph shall not exceed Thirty thousand pesos (P30,000) which shall
cover:
chanRoblesvirtualLawlibrary

(i) Benefits received by officials and employees of the national and local government
pursuant to Republic Act No. 668670; chanrobleslaw

(ii) Benefits received by employees pursuant to Presidential Decree No. 85171, as

amended by Memorandum Order No. 28, dated August 13, 1986; chanrobleslaw

(iii) Benefits received by officials and employees not covered by Presidential decree No.
851, as amended by Memorandum Order No. 28, dated August 13, 1986; and

(iv) Other benefits such as productivity incentives and Christmas bonus: Provided,
further, That the ceiling of Thirty thousand pesos (P30,000) may be increased through
rules and regulations issued by the Secretary of Finance, upon recommendation of the
Commissioner, after considering among others, the effect on the same of the inflation
rate at the end of the taxable year.

(f) xxx ChanRoblesVirtualawlibrary

The exemption granted to MWEs by R.A. 9504 reads:

chanRoblesvirtualLawlibrary

Provided, That minimum wage earners as defined in Section 22(HH) of this Code shall
be exempt from the payment of income tax on their taxable income: Provided,
further, That the holiday pay, overtime pay, night shift differential pay and hazard pay
received by such minimum wage earners shall likewise be exempt from income tax. ChanRoblesVirtualawlibrary

"Taxable income" is defined as follows:

chanRoblesvirtualLawlibrary

SEC. 31. Taxable Income Defined. - The term taxable income means the pertinent
items of gross income specified in this Code, less the deductions and/or personal and
additional exemptions, if any, authorized for such types of income by this Code or other
special laws. ChanRoblesVirtualawlibrary

A careful reading of these provisions will show at least two distinct groups of items of
compensation. On one hand are those that are further exempted from tax by R.A.
9504; on the other hand are items of compensation that R.A. 9504 does not amend and
are thus unchanged and in no need to be disturbed.

First are the different items of compensation subject to tax prior to R.A. 9504. These
are included in the pertinent items of gross income in Section 31. "Gross income" in
Section 32 includes, among many other items, "compensation for services in whatever
form paid, including, but not limited to salaries, wages, commissions, and similar
items." R.A. 9504 particularly exempts the minimum wage and its incidents; it does not
provide exemption for the many other forms of compensation.

Second are the other items of income that, prior to R.A. 9504, were excluded from
gross income and were therefore not subject to tax. Among these are other payments
that employees may receive from employers pursuant to their employer-employee
relationship, such as bonuses and other benefits. These are either mandated by law
(such as the 13th month pay) or granted upon the employer's prerogative or are
pursuant to collective bargaining agreements (as productivity incentives). These items
were not changed by R.A. 9504.
It becomes evident that the exemption on benefits granted by law in 1994 are now
extended to wages of the least paid workers under R.A. 9504. Benefits not beyond
P30,000 were exempted; wages not beyond the SMW are now exempted as well.
Conversely, benefits in excess of P30,000 are subject to tax and now, wages in excess
of the SMW are still subject to tax.

What the legislature is exempting is the MWE's minimum wage and other forms
statutory compensation like holiday pay, overtime pay, night shift differential pay, and
hazard pay. These are not bonuses or other benefits; these are wages. Respondents
seek to frustrate this exemption granted by the legislature.

In respondents' view, anyone rece1vmg 13th month pay and other benefits in excess of
P30,000 cannot be an MWE. They seek to impose their own definition of "MWE" by
arguing thus:
chanRoblesvirtualLawlibrary

It should be noted that the intent of the income tax exemption of MWEs is to free the
low-income earner from the burden of tax. R.A. No. 9504 and R.R. No. 10-2008 define
who are the low-income earners. Someone who earns beyond the incomes and benefits
above-enumerated is definitely not a low-income earner.72 ChanRoblesVirtualawlibrary

We do not agree.

As stated before, nothing to this effect can be read from R.A. 9504. The amendment is
silent on whether compensation-related benefits exceeding the P30,000 threshold
would make an MWE lose exemption. R.A. 9504 has given definite criteria for what
constitutes an MWE, and R.R. 10-2008 cannot change this.

An administrative agency may not enlarge, alter or restrict a provision of law. It cannot
add to the requirements provided by law. To do so constitutes lawmaking, which is
generally reserved for Congress.73 In CIR v. Fortune Tobacco,74 we applied the plain
meaning rule when the Commissioner of Internal Revenue ventured into unauthorized
administrative lawmaking:
chanRoblesvirtualLawlibrary

[A]n administrative agency issuing regulations may not enlarge, alter or restrict the
provisions of the law it administers, and it cannot engraft additional requirements not
contemplated by the legislature. The Court emphasized that tax administrators
are not allowed to expand or contract the legislative mandate and that the
"plain meaning rule" or verba legis in statutory construction should be applied
such that where the words of a statute are clear, plain and free from
ambiguity, it must be given its literal meaning and applied without attempted
interpretation.

As we have previously declared, rule-making power must be confined to details for

regulating the mode or proceedings in order to carry into effect the law as it has been
enacted, and it cannot be extended to amend or expand the statutory
requirements or to embrace matters not covered by the statute. Administrative
regulations must always be in harmony with the provisions of the law because any
resulting discrepancy between the two will always be resolved in favor of the basic
law.75 (Emphases supplied) ChanRoblesVirtualawlibrary

We are not persuaded that RR 10-2008 merely clarifies the law. The CIR's clarification
is not warranted when the language of the law is plain and clear.76
The deliberations of the Senate reflect its understanding of the outworking of this MWE
exemption in relation to the treatment of benefits, both those for the P30,000 threshold
and the de minimis benefits:
chanRoblesvirtualLawlibrary

Senator Defensor Santiago. Thank you. Next question: How about employees who
are only receiving a minimum wage as base pay, but are earning significant amounts of
income from sales, commissions which may be even higher than their base pay? Is
their entire income from commissions also tax-free? Because strictly speaking, they
are minimum wage earners. For purposes of ascertaining entitlement to tax
exemption, is the basis only the base pay or should it be the aggregate compensation
that is being received, that is, inclusive of commissions, for example?

Senator Escudero. Mr. President, what is included would be only the base pay and, if
any, the hazard pay, holiday pay, overtime pay and night shift differential received by a
minimum wage earner. As far as commissions are concerned, only to the extent
of P30,000 would be exempted. Anything in excess of P30,000 would already
be taxable if it is being received by way of commissions. Add to that de
minimis benefits being received by an employee, such as rice subsidy or clothing
allowance or transportation allowance would also be exempted; but they are exempted
already under the existing law.

Senator Defensor Santiago. I would like to thank the sponsor. That makes it
clear.77 (Emphases supplied) ChanRoblesVirtualawlibrary

Given the foregoing, the treatment of bonuses and other benefits that an employee
receives from the employer in excess of the P30,000 ceiling cannot but be the same as
the prevailing treatment prior to R.A. 9504 - anything in excess of P30,000 is taxable;
no more, no less.

The treatment of this excess cannot operate to disenfranchise the MWE from enjoying
the exemption explicitly granted by R.A. 9504.

The government's argument that the RR avoids a tax distortion has no merit.

The government further contends that the "clarification" avoids a situation akin to wage
distortion and discourages tax evasion. They claim that MWE must be treated equally as
other individual compensation income earners "when their compensation does not
warrant exemption under R.A. No. 9504. Otherwise, there would be gross inequity
between and among individual income taxpayers."78 For illustrative purposes,
respondents present three scenarios:
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37.1. In the first scenario, a minimum wage earner in the National Capital Region
receiving P382.00 per day has an annual salary of P119,566.00, while a non-minimum
wage earner with a basic pay of P385.00 per day has an annual salary of P120,505.00.
The difference in their annual salaries amounts to only P939.00, but the non-minimum
wage earner is liable for a tax of P8,601.00, while the minimum wage earner is tax-
exempt?

37.2. In the second scenario, the minimum wage earner's "other benefits" exceed the
threshold of P30,000.00 by P20,000.00. The nonminimum wage earner is liable for
P8,601.00, while the minimum wage earner is still tax-exempt.

37.3. In the third scenario, both workers earn "other benefits" at P50,000.00 more than
the P30,000 threshold. The non-minimum wage earner is liable for the tax of
P18,601.00, while the minimum wage earner is still tax-exempt.79 (Underscoring in the
original) ChanRoblesVirtualawlibrary

Again, respondents are venturing into policy-making, a function that properly belongs
to Congress. In British American Tobacco v. Camacho, we explained:80
We do not sit in judgment as a supra-legislature to decide, after a law is passed by
Congress, which state interest is superior over another, or which method is better
suited to achieve one, some or all of the state's interests, or what these interests
should be in the first place. This policy-determining power, by constitutional fiat,
belongs to Congress as it is its function to determine and balance these interests or
choose which ones to pursue. Time and again we have ruled that the judiciary does
not settle policy issues. The Court can only declare what the law is and not what the
law should be. Under our system of government, policy issues are within the domain of
the political branches of government and of the people themselves as the repository of
all state power. Thus, the legislative classification under the classification freeze
provision, after having been shown to be rationally related to achieve certain legitimate
state interests and done in good faith, must. perforce, end our inquiry.

Concededly, the finding that the assailed law seems to derogate, to a limited extent,
one of its avowed objectives (i.e. promoting fair competition among the players in the
industry) would suggest that, by Congress's own standards, the current excise tax
system on sin products is imperfect. But, certainly, we cannot declare a statute
unconstitutional merely because it can be improved or that it does not tend to achieve
all of its stated objectives. This is especially true for tax legislation which
simultaneously addresses and impacts multiple state interests. Absent a clear showing
of breach of constitutional limitations, Congress, owing to its vast experience and
expertise in the field of taxation, must be given sufficient leeway to formulate and
experiment with different tax systems to address the complex issues and problems
related to tax administration. Whatever imperfections that may occur, the same
should be addressed to the democratic process to refine and evolve a taxation
system which ideally will achieve most, if not all, of the state's objectives.

In fine, petitioner may have valid reasons to disagree with the policy decision
of Congress and the method by which the latter sought to achieve the same.
But its remedy is with Congress and not this Court. (Emphases supplied and
citations deleted) ChanRoblesVirtualawlibrary

Respondents cannot interfere with the wisdom of R.A. 9504. They must respect and
implement it as enacted.

Besides, the supposed undesirable "income distortion" has been addressed in the
Senate deliberations. The following exchange between Senators Santiago and Escudero
reveals the view that the distortion impacts only a few - taxpayers who are single and
have no dependents:
chanRoblesvirtualLawlibrary

Senator Santiago ....It seems to me awkward that a person is earning just P1 above the
minimum wage is already taxable to the full extent simply because he is earning PI
more each day, or o more than P30 a month, or P350 per annum. Thus, a single
individual earning P362 daily in Metro Manila pays no tax but the same individual if he
earns P363 a day will be subject to tax, under the proposed amended provisions, in the
amount of P4,875 - I no longer took into account the deductions of SSS, e cetera -
although that worker is just P360 higher than the minimum wage.

xxxx

I repeat, I am raising respectfully the point that a person who is earning just P1 above
the minimum wage is already taxable to the full extent just for a mere P1. May I please
have the Sponsor's comment.

Senator Escudero...I fully subscribe and accept the analysis and computation of the
distinguished Senator, Mr. President, because this was the very concern of this
representation when we were discussing the bill. It will create wage distortions up to
the extent wherein a person is paying or rather receiving a salary which is only higher
by P6,000 approximately from that of a minimum wage earner. So anywhere between
P1 to approximately P6,000 higher, there will be a wage distortion, although distortions
disappears as the salary goes up.

However, Mr. President, as computed by the distinguished Senator, the distortion is

only made apparent if the taxpayer is single or is not married and has no
dependents. Because at two dependents, the distortion would already
disappear; at three dependents, it would not make a difference anymore
because the exemption would already cover approximately the wage distortion
that would be created as far as individual or single taxpayers are
concerned.81 (Emphases in the original) ChanRoblesVirtualawlibrary

Indeed, there is a distortion, one that RR 10-2008 actually engenders. While

respondents insist that MWEs who are earning purely compensation income will lose
their MWE exemption the moment they receive benefits in excess of P30,000, RR 10-
2008 does not withdraw the MWE exemption from those who are earning other income
outside of their employer employee relationship. Consider the following provisions of RR
10-2008:
chanRoblesvirtualLawlibrary

Section 2.78.1 (B):

(B) Exemptions from Withholding Tax on Compensation. - The following income

payments are exempted from the requirements of withholding tax on compensation:

xxxx

(13) Compensation income of MWEs who work in the private sector and being
paid the Statutory Minimum Wage (SMW), as fixed by Regional Tripartite Wage
and Productivity Board (RTWPB)/National Wages and Productivity Commission (NWPC),
applicable to the place where he/she is assigned.

xxxx

Holiday pay, overtime pay, night shift differential pay and hazard pay earned by the
aforementioned MWE shall likewise be covered by the above exemption. Provided,
however, that an employee who receives/earns additional compensation such as
commissions, honoraria, fringe benefits, benefits in excess of the allowable statutory
amount of P30,000.00, taxable allowances and other taxable income other than the
SMW, holiday pay, overtime pay, hazard pay and night shift differential pay shall not
enjoy the privilege of being a MWE and, therefore, his/her entire earnings are not
exempt from income tax, and consequently, from withholding tax.

MWEs receiving other income, such as income from the conduct of trade,

business, or practice of profession, except income subject to final tax, in addition to
compensation income are not exempted from income tax on their entire income earned
during the taxable year. This rule, notwithstanding, the SMW, Holiday pay,
overtime pay, night shift differential pay and hazard pay shall still be exempt
from withholding tax.

xxxx

(14) Compensation income of employees in the public sector with compensation

income of not more than the SMW in the non agricultural sector, as fixed by
RTWPB/NWPC, applicable to the place where he/she is assigned.

xxxx

Holiday pay, overtime pay, night shift differential pay and hazard pay earned by the
aforementioned MWE in the public sector shall likewise be covered by the above
exemption. Provided, however, that a public sector employee who receives additional
compensation such as commissions, honoraria, fringe benefits, benefits in excess of the
allowable statutory amount of P30,000.00, taxable allowances and other taxable
income other than the SMW, holiday pay, overtime pay, night shift differential pay and
hazard pay shall not enjoy the privilege of being a MWE and, therefore, his/her entire
earnings are not exempt from income tax and, consequently, from withholding tax.

MWEs receiving other income, such as income from the conduct of trade,
business, or practice of profession, except income subject to final tax, in addition to
compensation income are not exempted from income tax on their entire income earned
during the taxable year. This rule, notwithstanding, the SMW, Holiday pay,
overtime pay, night shift differential pay and hazard pay shall still be exempt
from withholding tax. ChanRoblesVirtualawlibrary

These provisions of RR 10-2008 reveal a bias against those who are purely
compensation earners. In their consolidated comment, respondents reason:
chanRoblesvirtualLawlibrary

Verily, the interpretation as to who is a minimum wage earner as petitioners

advance will open the opportunity for tax evasion by the mere expedient of
pegging the salary or wage of a worker at the minimum and reflecting a worker's other
incomes as some other benefits. This situation will not only encourage tax
evasion, it will likewise discourage able employers from paying salaries or
wages higher than the statutory minimum. This should never be
countenanced.82 ChanRoblesVirtualawlibrary

Again, respondents are delving into policy-making they presume bad faith on the part
of the employers, and then shift the burden of this presumption and lay it on the backs
of the lowest paid workers. This presumption of bad faith does not even reflect
pragmatic reality. It must be remembered that a worker's holiday, overtime and night
differential pays are all based on the worker's regular wage. Thus, there will always be
pressure from the workers to increase, not decrease, their basic pay.

What is not acceptable is the blatant inequity between the treatment that RR 10-2008
gives to those who earn purely compensation income and that given to those who have
other sources of income. Respondents want to tax the MWEs who serve their employer
well and thus receive higher bonuses or performance incentives; but exempts the MWEs
who serve, m addition to their employer, their other business or professional interests.

We cannot sustain respondentsposition.

In sum, the proper interpretation of R.A. 9504 is that it imposes taxes only on the
taxable income received in excess of the minimum wage, but the MWEs will not lose
their exemption as such. Workers who receive the statutory minimum wage their basic
pay remain MWEs. The receipt of any other income during the year does not disqualify
them as MWEs. They remain MWEs, entitled to exemption as such, but the taxable
income they receive other than as MWEs may be subjected to appropriate taxes.

R.A. 9504 must be liberally construed.

We are mindful of the strict construction rule when it comes to the interpretation of tax
exemption laws.83 The canon, however, is tempered by several exceptions, one of which
is when the taxpayer falls within the purview of the exemption by clear legislative
intent. In this situation, the rule of liberal interpretation applies in favor of the grantee
and against the government.84

In this case, there is a clear legislative intent to exempt the minimum wage received by
an MWE who earns additional income on top of the minimum wage. As previously
discussed, this intent can be seen from both the law and the deliberations.

Accordingly, we see no reason why we should not liberally interpret R.A. 9504 in favor
of the taxpayers.

R.A. 9504 is a grant of tax relief long overdue.

We do not lose sight of the fact that R.A. 9504 is a tax relief that is long overdue.

Table 1 below shows the tax burden of an MWE over the years. We use as example one
who is a married individual without dependents and is working in the National Capital
Region (NCR). For illustration purposes, R.A. 9504 is applied as if the worker being paid
the statutory mmnnum wage is not tax exempt:
chanRoblesvirtualLawlibrary

Table 1 - Tax Burden of MWE over the years

NCR Minimum Daily

Wage85 Taxable Tax Due Tax
Law Effective
Income86 (Annual) Burden87
   

RA 716788 WO 3 (1993
P135.00 P24,255 P1,343.05 3.2%
Dec)
1992
    RA WO 5 (1997
749689 P185.00 P39,905 P3,064.55 5.3%
May)
 WO 6 (1998
P198.00 P29,974 P2,497.40 4.0%
90 Feb)
RA 8424
WO 13 (2007
1998 P362.00 P81,306 P10,761.20 9.5%
    (1997 Aug)
NIRC)
WO 14 (2008
P382.00 P87,566 P12,013.20 10.0%
June)
WO 14 (2008
P382.00 P69,566 P8,434.90 7.1%
Aug)
RA 950491 2008
WO 20 (2016
P491.00 P103,683 P15,236.60 9.9%
June)
As shown on Table 1, we note that in 1992, the tax burden upon an MWE was just
about 3.2%, when Congress passed R.A. 7167, which increased the personal
exemptions for a married individual without dependents from P12,000 to P18,000; and
R.A. 7496, which revised the table of graduated tax rates (tax table).

Over the years, as the minimum wage increased, the tax burden of the MWE likewise
increased. In 1997, the MWE's tax burden was about 5.3%. When R.A. 8424 became
effective in 1998, some relief in the MWE's tax burden was seen as it was reduced to
4.0%. This was mostly due to the increase in personal exemptions, which were
increased from P18,000 to P32,000 for a married individual without dependents. It may
be noted that while the tax table was revised, a closer scrutiny of Table 3 below would
show that the rates actually increased for those who were earning less.

As the minimum wage continued to increase, the MWE's tax burden likewise did - by
August 2007, it was 9.5%. This means that in 2007, of the P362 minimum wage, the
MWE's take-home pay was only P327.62, after a tax of P34.38.

This scenario does not augur well for the wage earners. Over the years, even with the
occasional increase in the basic personal and additional exemptions, the contribution
the government exacts from its MWEs continues to increase as a portion of their
income. This is a serious social issue, which R.A. 9504 partly addresses. With the P20
increase in minimum wage from P362 to P382 in 2008, the tax due thereon would be
about P30. As seen in their deliberations, the lawmakers wanted all of this amount to
become additional take-home pay for the MWEs in 2008.92

The foregoing demonstrates the effect of inflation. When tax tables do not get adjusted,
inflation has a profound impact in terms of tax burden. "Bracket creep," "the process
by which inflation pushes individuals into higher tax brackets,"93 occurs, and its
deleterious results may be explained as follows:
chanRoblesvirtualLawlibrary

[A]n individual whose dollar income increases from one year to the next might be
obliged to pay tax at a higher marginal rate (say 25% instead of 15%) on the increase,
this being a natural consequence of rate progression. If, however, due to inflation the
benefit of the increase is wiped out by a corresponding increase in the cost of
living, the effect would be a heavier tax burden with no real improvement in
the taxpayer's economic position. Wage and salary-earners are especially
vulnerable. Even if a worker gets a raise in wages this year, the raise will be
illusory if the prices of consumer goods rise in the same proportion. If her
marginal tax rate also increased, the result would actually be a decrease in the
taxpayer's real disposable income.94 ChanRoblesVirtualawlibrary

Table 2 shows how MWEs get pushed to higher tax brackets with higher tax rates due
only to the periodic increases in the minimum wage. This unfortunate development
illustrates how "bracket creep" comes about and how inflation alone increases their tax
burden:
chanRoblesvirtualLawlibrary

Table 2

Highest
Applicable Tax
NCR Minimum Daily Rate Tax Due Tax
Law Effective
Wage95 (Annual) Burden96
    (Bracket
Creep)
RA WO 3 (1993
P135.00 11% P1,343.05 3.2%
716797 Dec)
1992
    RA WO 5 (1997
P185.00 11% P3,064.55 5.3%
749698 May)

WO 6 (1998
1998 P198.00 10% P2,497.40 4.0%
RA Feb)
842499
WO 13
P362.00 20% P10,761.20 9.5%
(2007 Aug)
    (1997
NIRC) WO 14
P382.00 20% P12,013.20 10.0%
(2008 June)
WO 14
P382.00 15% P8,434.90 7.1%
RA (2008 Aug)
2008
9504100 WO 20
P491.00 20% P15,236.60 9.9%
(2016 June)
The overall effect is the diminution, if not elimination, of the progressivity of the rate
structure under the present Tax Code. We emphasize that the graduated tax rate
schedule for individual taxpayers, which takes into account the ability to pay, is
intended to breathe life into the constitutional requirement of equity.101

R.A. 9504 provides relief by declaring that an MWE, one who is paid the statutory
minimum wage (SMW), is exempt trom tax on that income, as well as on the associated
statutory payments for hazardous, holiday, overtime and night work.

R.R. 10-2008, however, unjustly removes this tax relief. While R.A. 9504 grants MWEs
zero tax rights from the beginning or for the whole year 2008, RR 10-2008 declares
that certain workers - even if they are being paid the SMW, "shall not enjoy the
privilege."
Following RR10-2008's "disqualification" injunction, the MWE will continue to be pushed
towards the higher tax brackets and higher rates. As Table 2 shows, as of June 2016,
an MWE would already belong to the 4th highest tax bracket of 20% (see also Table 3),
resulting in a tax burden of 9.9%. This means that for every P100 the MWE earns, the
government takes back P9.90.

Further, a comparative view of the tax tables over the years (Table 3) shows that while
the highest tax rate was reduced from as high as 70% under the 1977 NIRC, to 35% in
1992, and 32% presently, the lower income group actually gets charged higher taxes.
Before R.A. 8424, one who had taxable income of less than P2,500 did not have to pay
any income tax; under R.A. 8424, he paid 5% thereof. The MWEs now pay 20% or even
more, depending on the other benefits they receive including overtime, holiday, night
shift, and hazard pays.
Table 3 - Tax Tables: Comparison of Tax Brackets and Rates

Rates under R.A. Rates under R.A. Rates under R.A.

Taxable Income Bracket
7496(1992) 8424 (1998) 9504 (2008)
Not Over P2,500 0%
Over P2.500 but not over 5% 5%
1%
P5,000            
           
Over P5,000 but not over
3%
P10,000
Over P10,000 but not over
7%
P20,000 10% 10%
Over P20,000 but not over            
P30,000 11%
Over P30,000 but not over      
P40,000
           
Over P40,000 but not over
15% 15% 15%
P60,000
           
Over P60,000 but not over
P70,000 19%
Over P70,000 but not over      
P100,000 20% 20%
Over P100,000 but not over            
P140,000 24%
Over P140,000 but not over      
25% 25%
P250,000
Over P250,000 but not over
29% 30% 30%
P500,000
 Over P500,000 35% 34% 32%
The relief afforded by R.A.9504 is thus long overdue. The law must be now given full
effect for the entire taxable year 2008, and without the qualification introduced by RR
10-2008. The latter cannot disqualify MWEs from exemption from taxes on SMW and on
their on his SMW, holiday, overtime, night shift differential, and hazard pay. chanroblesvirtuallawlibrary

CONCLUSION

The foregoing considered, we find that respondents committed grave abuse of

discretion in promulgating Sections 1 and 3 of RR 10-2008, insofar as they provide for
(a) the prorated application of the personal and additional exemptions for taxable year
2008 and for the period of applicability of the MWE exemption for taxable year 2008 to
begin only on 6 July 2008; and (b) the disqualification of MWEs who earn purely
compensation income, whether in the private or public sector, from the privilege of
availing themselves of the MWE exemption in case they receive compensation related
benefits exceeding the statutory ceiling of P30,000.

As an aside, we stress that the progressivity of the rate structure under the present Tax
Code has lost its strength. In the main, it has not been updated since its revision in
1997, or for a period of almost 20 years. The phenomenon of "bracket creep" could be
prevented through the inclusion of an indexation provision, in which the graduated tax
rates are adjusted periodically without need of amending the tax law. The 1997 Tax
Code, however, has no such indexation provision. It should be emphasized that
indexation to inflation is now a standard feature of a modern tax code.102

We note, however, that R.A. 8424 imposes upon respondent Secretary of Finance and
Commissioner of Internal Revenue the positive duty to periodically review the other
benefits, in consideration of the effect of inflation thereon, as provided under Section
32(B)(7)(e) entitled "13th Month Pay and Other Benefits":
chanRoblesvirtualLawlibrary

(iv) Other benefits such as productivity incentives and Christmas bonus: Provided,
further, That the ceiling of Thirty thousand pesos (P30,000) may be increased through
rules and regulations issued by the Secretary of Finance, upon recommendation of the
Commissioner, after considering among others, the effect on the same of the inflation
rate at the end of the taxable year.
ChanRoblesVirtualawlibrary

This same positive duty, which is also imposed upon the same officials regarding the de
minimis benefits provided under Section 33(C)(4), is a duty that has been exercised
several times. The provision reads:
chanRoblesvirtualLawlibrary

(C) Fringe Benefits Not Taxable. - The following fringe benefits are not taxable under
this Section:

(1) xxx

xxxx

(4) De minimis benefits as defined in the rules and regulations to be promulgated by

the Secretary of Finance, upon recommendation of the Commissioner. ChanRoblesVirtualawlibrary

WHEREFORE, the Court resolves to

(a) GRANT the Petitions for Certiorari, Prohibition, and Mandamus; and

(b) DECLARE NULL and VOID the following provisions of Revenue Regulations No.
10-2008:

(i) Sections 1 and 3, insofar as they disqualify MWEs who earn purely compensation income
from the privilege of the MWE exemption in case they receive bonuses and other
compensation-related benefits exceeding the statutory ceiling of P30,000;
(ii) Section 3 insofar as it provides for the prorated application of the personal and additional
exemptions under R.A. 9504 for taxable year 2008, and for the period of applicability of
the MWE exemption to begin only on 6 July 2008.

(c) DIRECT respondents Secretary of Finance and Commissioner of Internal Revenue

to grant a refund, or allow the application of the refund by way of withholding tax
adjustments, or allow a claim for tax credits by (i) all individual taxpayers whose
incomes for taxable year 2008 were the subject of the prorated increase in personal
and additional tax exemption; and (ii) all MWEs whose minimum wage incomes were
subjected to tax for their receipt of the 13th month pay and other bonuses and benefits
exceeding the threshold amount under Section 32(B)(7)(e) of the 1997 Tax Code.

SO ORDERED.

Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Mendoza,
Reyes, Perlas-Bernabe, Leonen, Jardeleza, and Caguioa JJ., concur. chanRoblesvirtualLawlibrary

Endnotes:

A.C. No. 11533, June 06, 2017 - SPOUSES EDWIN AND GRETA CHUA, Complainants, v.
SACP TERESA BELINDA G. TAN-SOLLANO, DCP MARIA GENE Z. JULIANDA-SARMIENTO,
SDCP EUFROSINO A. SULLA, SACP SUWERTE L. OFRECIO-GONZALES, AND DCP
JOSELITO D.R. OBEJAS, ALL OF THE OFFICE OF THE CITY PROSECUTOR OF MANILA,
RELATIVE TO I.S. NO. XV-07-INV-15J-05513, Respondents.

EN BANC
 A.C. No. 11533, June 06, 2017

SPOUSES EDWIN AND GRETA CHUA, Complainants, v. SACP TERESA BELINDA G.

TAN-SOLLANO, DCP MARIA GENE Z. JULIANDA-SARMIENTO, SDCP EUFROSINO
A. SULLA, SACP SUWERTE L. OFRECIO-GONZALES, AND DCP JOSELITO D.R.
OBEJAS, ALL OF THE OFFICE OF THE CITY PROSECUTOR OF MANILA, RELATIVE
TO I.S. NO. XV-07-INV-15J-05513, Respondents.

RESOLUTION

REYES, J.:

For resolution is the administrative complaint1 for disbarment filed by complainants

Greta A. Chua (Greta) and Edwin S. Chua (Spouses Chua) against Senior Assistant City
Prosecutor Teresa Belinda G. Tan-Sollano (SACP Tan-Sollano), Deputy City Prosecutor
Maria Gene Z. Julianda-Sarmiento (DCP Julianda-Sarmiento), Senior Deputy City
Prosecutor Eufrosino A. Sulla (SDCP Sulla), SACP Suwerte L. Ofrecio-Gonzales (SACP
Ofrecio-Gonzales), and DCP Joselito D.R. Obejas (DCP Obejas) (collectively, the
respondents) for grave abuse of discretion, ignorance of the law, abuse of power or
authority, and gross misconduct.

Antecedent Facts

On October 12, 2015, Spouses Chua filed a Complaint2 for Perjury and False Testimony
against Atty. Rudy T. Tasarra (Atty. Tasarra), Luz O. Talusan (Talusan), Po Yi Yeung
Go, Jessica W. Ang, Ricky Ang, Eden C. Uy, and Ana Tiu, before the Office of the City
Prosecutor (OCP) of Manila docketed as XV-07-INV-15J-05513.

Spouses Chua alleged before the OCP of Manila that Talusan deliberately and wilfully
committed perjury when she narrated in her Complaint-Affidavits that on July 11, 2009,
Spouses Chua issued 11 post-dated checks in favor of Chain Glass Enterprises, Inc.
(CGEI), with an amount of P112,521.00 each, as payment for assorted glass and
aluminum products. According to Spouses Chua, however, the said statement is not
true because the said 11 post-dated checks were actually issued on February 23, 2009
by Greta in replacement of their previous bounced checks. Likewise, Atty. Tasarra and
the members of the Board of Directors of CGEI were likewise impleaded therein for
offering Talusan's testimony.3

In a Resolution4 dated December 28, 2015, SACP Tan-Sollano recommended the

dismissal of the charges against therein respondents for lack of probable cause. The
same was recommended for approval by DCP Julianda-Sarmiento and SDCP Sulla.

A Motion for Reconsideration5 was filed by Spouses Chua but the same was denied in a
Resolution6 dated August 9, 2016 issued by SACP Ofrecio-Gonzales and approved by
DCP Obejas after finding no cogent reason to reverse the Resolution dated December
28, 2015 of SACP Tan-Sollano.

Aggrieved with such findings, Spouses Chua instituted the instant case and averred that
the dismissal of XV-07-INV-15J-05513 was inappropriate and highly irregular
considering that the prosecution offered an "airtight case/evidence."7

Ruling of the Court

After a careful review of the records of the present case, the Court finds that Spouses
Chua failed to attribute clear and preponderant proof to show that the respondents
committed infractions in contravention with the standards provided for by the Code of
Professional Responsibility which would have warranted the imposition of administrative
sanctions against them.

"In administrative proceedings, the complainant has the burden of proving with
substantial evidence the allegations in the complaint. Mere allegation is not evidence
and is not equivalent to proof."8

Here, considering that Spouses Chua failed to present substantial proof to show the
prosecutors' culpability, the Court cannot rule out the possibility that the instant
administrative case was ill motivated being retaliatory in nature and aimed at striking
back at them for having participated in the dismissal of XV-07-INV-15J-05513, either as
investigating prosecutor or approving officer. In the absence of contrary evidence, what
will prevail is the presumption that the prosecutors involved herein have regularly
performed their official duties.

Moreover, in Maquiran v. Judge Grageda,9 the Court held that alleged error committed
by judges in the exercise of their adjudicative functions cannot be corrected through
administrative proceedings but should instead be assailed through judicial
remedies.10 Here, the same principle applies to prosecutors who exercise adjudicative
functions in the determination of the existence of probable cause to hold the accused
for trial in court.

Verily, an administrative complaint is not an appropriate remedy where judicial

recourse is still available, such as a motion for reconsideration, an appeal, or a petition
for certiorari.11 In the present case, as narrated by Spouses Chua, XV-07-INV-151-
05513 is still pending and active. As such, Spouses Chua still has remedies to contest
said ruling.

WHEREFORE, the instant administrative complaint against respondents Senior

Assistant City Prosecutor Teresa Belinda G. Tan-Sollano, Deputy City Prosecutor Maria
Gene Z. Julianda-Sarmiento, Senior Deputy City Prosecutor Eufrosino A. Sulla, Senior
Assistant City Prosecutor Suwerte L. Ofrecio-Gonzales, and Deputy City Prosecutor
Joselito D.R. Obejas is DISMISSED and this case is
considered CLOSED and TERMINATED.

SO ORDERED.
 EN BANC

G.R. No. 244806, September 17, 2019

AMANDO M. TETANGCO, JR., ARMANDO L. SURATOS, JUAN D. ZUNIGA, JR.,

ANTONIO A. BERNARDO, JR., VICTORIA C. BERCILES, TERESA T. MANGILA,
AND MA. CECILIA N. MARTIN, PETITIONERS, v. COMMISSION ON AUDIT,
RESPONDENTS.

DECISION

LAZARO-JAVIER, J.:

The Case

This Petition for Certiorari1 assails the following dispositions of the Commission on Audit
(COA):

1. Decision2 dated February 16, 2017 insofar as it affirmed the ruling of the

COA-Corporate Government Sector (COA-CGS) with respect to the
increases in the per diems paid to petitioners Amando M. Tetangco, Jr.,
Armando L. Suratos, and Juan D. De Zuñiga, Jr. and the grant to them of
representation and transportation allowance (RATA) and other bonuses, in
their capacity as members of the Board of Directors of the Philippine
International Convention Center Inc. (PICCI). Its dispositive portion
reads:

WHEREFORE, premises considered, the Petition for Review of Governor Amando M.

Tetangco, Jr., et al., Bangko Sentral ng Pilipinas, Manila, of Commission on Audit on
Corporate Government Sector-1 Decision No. 2014-01 dated April 30, 2014 is hereby
PARTIALLY GRANTED. Accordingly, the payment of P1,000.00 per diem for every
meeting in the total amount of P36,000.00 is LIFTED while the excess thereof in the
total amount of P358,000.00, and the payment of representation allowances and other
bonuses in the total amount of P224,500.00 disallowed under Notice of Disallowance
(ND) No. 12-001-GF-(10&11) dated February 28, 2012 are AFFIRMED, broken down as
follows:
 

NAME REPRESENTATION PER DIEM

ALLOWANCES AND
BONUSES
TOTAL ALLOWABLE EXCESS OF
 @P1,000.00/ P1,000/
RECEIVED
MEETING MEETING
Amando M. P155,000.00 P84,000.00 P10,000.00 P74,000.00
Tetangco, Jr.
Armando L. P51,112.90 P273,000.00 P22.000.00 P251,000.00
  Suratos

The sustained amount shall remain the liability of all persons named liable in the ND.
2. Resolution dated September 27, 2018, denying petitioners' motion for
reconsideration.

Antecedents

Pursuant to Presidential Decree 5203 (PD 520) dated July 23, 1974, the PICCI was
established to manage and operate the Philippine International Convention Center
known (PICC). The Bangko Sentral ng Pilipinas (BSP) (formerly Central Bank of the
Philippines) is the PICCI's sole stockholder.4

PD 520 provides that the PICCFs Board of Directors shall include the BSP Governor as
Chairperson, the Senior Deputy Governor as Vice Chairman, and five (5) other
members to be designated by the Monetary Board.5 Three (3) of herein petitioners:
Amando M. Tetangco, Jr. (then BSP Governor; Armando L. Suratos (then BSP Deputy
Governor); and Juan D. De Zuñiga, Jr. (then BSP Deputy Governor and General
Counsel) served in the PICCI Board from January 2010 to February 2011. As for
Suratos, he only served until December 2010.

On October 31, 2000, the Board proposed and the BSP-MB approved MB Resolution No.
1919, amending Section 8, Article III of the PICCI By-Laws, viz:6
Compensation. Directors, as such, shall not receive any salary for their services but
shall receive a per diem and allowances in such amounts as may be fixed by majority of
all members of the board of directors in a regular or special meeting and approved by
the Monetary Board. Nothing therein shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation therefor.
Between December 7, 2006 and December 23, 2010, the following resolutions were
also approved:

First: MB Resolution No. 1518 dated December 7, 2006, increasing each member's per
diem to P6,000 for regular meetings and P7,000 for executive meetings.7

Second: MB Resolution No. 1901 dated December 29, 2009, authorizing each member
to receive P10,000.00 RATA.8

Third: MB Resolution No. 1855 dated December 23, 2010, further increasing each
member's per diem to P9,000 for regular meetings and P9,500.00 for executive
meetings.9
In the implementation of these resolutions, the PICCI paid petitioners a total of
P618,500.00.10

Meanwhile, on August 9, 2010, the Court's decision in Singson, et at. v. COA11 came

out. The case also involved the grant of per diems and RATA to petitioners'
predecessors in the PICCI Board who themselves were BSP officers/members.
In Singson, the Court allowed the payment of P1,000.00 per diem and P1,500.00 RATA
based on the PICCI amended by laws and MB Resolutions. The Court held that these
grants did not violate the constitutional proscription against double compensation.

The Notice of Disallowance

No. 12-001-GF-(10&11)

On post-audit, Audit Team Leader Lolita Valenzuela and Supervising Auditor Ma. Teresa
R. Gojunco issued Notice of Disallowance (ND) No. 12-001-GF-(10&11) dated February
28, 2012 against PICCI's grant of per diems, RATA, and bonuses to petitioners
Tetangco, Suratos, and Zuniga in the total amount of Php618,500.00.

ND No. 12-001 -GF-( 10&11) contains the following breakdown:

1. Amando M. Tetangco, Jr.    P239,000.00
2. Armando L. Suratos          P324,112.90
3. Juan De Zunigo, Jr,           P55,387.10
                 Total                   P618,500.00
The Audit Team concluded12 that the benefits in question violated the rule against
double compensation and E.O. No. 24.13 For these benefits were given to petitioners in
their capacity as ex-officio members of the PICCI Board, albeit they were already
receiving salary from the BSP at the same time. The Audit Team further cited Section
8,14 Art. IX (B) of the 1987 Constitution and the ratio decidendi in Civil Liberties
Union v. Executive Secretary.15

The following persons were consequently directed to return the corresponding amounts
they received: a) Amando M. Tetangco, Jr., Chairman and payee; b) Armando L.
Suratos, Vice-Chairman and payee; c) Juan De Zuniga, Vice-Chairman and payee; d)
Victoria C. Berciles, Director of the Administrative Department who approved the
payment for RATA; e) Teresa T. Mangila, Senior Executive Assistant who made the
request for payment of RATA, per diems, and bonuses;16 and f) Ma. Cecilia N. Martin,
Junior Executive Asst, who made the request for payment17 of per diems for board
meetings.18

Petitioners' Defense

On appeal to the COA-CGS, petitioners essentially asserted:

One. The questioned benefits did not constitute double compensation. They were in
fact authorized per MB Resolution No. 34 dated January 12, 1994; No. 665 dated July
3, 1996; No. 1919 dated October 31, 2000, Sec. 30 of the Corporation Code, Sec. 8 of
the PICCI amended by laws, and the ruling in Singson, et al. v.
COA.19Singson ordained that the grant of RATA to ex officio members of the PICCI
Board who were primarily officers of the BSP did not violate the constitutional
proscription against double compensation.20

Two. The Audit Team misapplied the ruling in Civil Liberties Union21 to the present
case: True, in Civil Liberties Union, government officers are prohibited from holding
more than one government position except those which the official concerned holds in
his or her ex-officio capacity as an adjunct to his or her main office. He or she has no
right to receive additional compensation for his or her services rendered in an ex
officio capacity. But unlike in Civil Liberties Union, their functions and duties here as
members of the PICCI Board were far different from nor just an adjunct to their primary
positions as BSP officers.

The Dispositions of the COA-Corporate Government Sector

In denying petitioners' appeal under Decision22 dated April 30, 2014, the COA-CGS
basically reasoned:

Petitioners never disputed that they (were) ex-officio members of PICCI and they received
per diems, RATA, and bonuses in such capacity. Hence, Civil Liberties Union applied
a)
insofar as additional compensation (was) concerned vis-a-vis Sections 7 and 8 of Article
IX-B of the 1987 Constitution applied to them.
Although P.D. No. 520 designated petitioners as ex-officio members of PICCI Board of
Directors, the same law did not provide that they shall be entitled to additional
compensation. The grant of additional compensation to them was based only on the PICCI
b)
By-Laws which (was) by itself cannot be considered to have sufficiently authorized the
grant of the benefit in question. Additional compensation may be given only when
specifically authorized by law, not by mere PICCI by laws.
Singson resolved the issue of whether the grant of RAT A constituted double
compensation. Singson clarified that although the grant of RATA was permissible the
same should not equate to indirect compensation. Also, to be valid, the grant of RATA
c)
should be supported by evidence, such as receipts, invoices, or such relevant documents
showing that the amount was really used to defray expenses deemed unavoidable in
petitioners' discharge of their office in PICCI.
Petitioners cannot be deemed in good faith when they received the additional
d) compensation by way of RATA. It cannot bar the government either from recovering what
was unduly given them, otherwise, it would constitute unjust enrichment.

The Proceedings Before the COA Proper

On further appeal to the COA Proper, petitioners averred, in the main: a) the benefits 
did not constitute  double  compensation;  b) they were authorized to receive the
benefits from PICCI pursuant to Section 30 of the Corporation Code; and c) the benefits
were given them in good faith.23
On the other hand, the COA-CGS countered that petitioners' arguments were already
addressed in full, hence, should no longer be entertained anew.24

Ruling of the COA Proper

By Decision25 dated February 16, 2017 (Decision No. 2017-020), the COA Proper
modified. It ruled that since Singson allowed the grant of per diem in such amount not
exceeding Php 1,000.00, the same should be deducted from petitioners' total liabilities,
thus:
WHEREFORE, premises considered, the Petition for Review of Governor Amando M.
Tetangco, Jr., et al., Bangko Sentral ng Pilipinas, Manila, of Commission on Audit on
Corporate Government Sector-1 Decision No. 2014-01 dated Arpil 30, 2014 is hereby
PARTIALLY GRANTED. Accordingly, the payment of P1,000.00 per diem for every
meeting in the total amount of P36,000.00 is LIFTED while the excess thereof in the
total amount of P358,000.00, and the payment of representation allowances and other
bonuses in the total amount of P224,500.00 disallowed under Notice of Disallowance
(ND) No. 12-001-GF-(10&11) dated February 28, 2012 are AFFIRMED, broken down as
follows: 

NAME REPRESENTATION PER DIEM

ALLOWANCES
AND BONUSES
ALLOWABLE EXCESS OF
TOTAL
  @P 1,000.00/   P1,000
RECEIVED
MEETING /MEETING
Amando M. P155,000.00 P84,000.00 P10,000.00 P74,000.00
Tetangco, Jr.
Armando L. P51,112.90 P273,000.00 P22,000.00 P251,000.00
Suratos
Juan De Zuniga P18,387.10 P37,000.00 P4.000.00 P33,000.00
TOTAL P224,500.00 P394.000.00 P36,000.00 P358,000.00

The sustained amount shall remain the liability of all persons named liable in the ND.26

Petitioners' motion for reconsideration was denied through Resolution dated September
27, 2018.

The Present Petition

Petitioners now urge the Court to nullify, on ground of lack or excess of jurisdiction, the
assailed dispositions. They assert: (1) the amounts of per diems granted to ex-officio
members of the PICCI Board in excess of P1,000.00 were authorized under the PICCI
amended by-laws and Board Resolutions; (2) Memorandum Order No. 20 does not
apply to PICCI, a private corporation governed by the Corporation Code; (3) the
prohibition under E.O. No. 24 which took effect on March 21, 2011 cannot apply to
petitioners' receipt of the benefits in 2010 up until February 2011; and 4) Singson
squarely applies to the present case.27

For its part, the Office of the Solicitor General (OSG), through Solicitor General Jose C.
Calida, Senior State Solicitor B. Marc A. Canuto, and Senior State Solicitor Sharon E.
Millan-Decano, ripostes: (1) the notice of disallowance was issued in the exercise of the
COA's general audit power; (2) petitioners' newly submitted evidence i.e., Board
Resolutions and SEC Certificate of Filing of the Amended By-Laws are inadmissible; (3)
PICCI is covered by Memorandum Order (MO) No. 20; and (4) Singson is not
applicable here.28

Issues
   

1. Is PICCI a government-owned or controlled corporation, hence, subject to the

audit jurisdiction of COA?

2. Were the benefits received by  petitioners unauthorized, hence, constitute double
compensation?

3. Were the increases in the per diems and RATA validly authorized, hence, should
not be disallowed?

a. Is the PICCI subject to the prohibition under Memorandum Order No. 20?

b. Was the grant of the benefits subject to the prohibition under E.O. 24?

c. Were the newly submitted documents i.e., SEC Certificate of Filing of

PICCI Amended By-Laws, MB Resolution No.  1518, MB Resolution  No.
1855,  MB  Resolution No. 1901 attached to petitioners' motion for
reconsideration before the COA-Proper admissible in evidence?

4. Are petitioners solidarity liable for the return of the amounts in question?

Ruling

The PICCI is a Government

Owned and Controlled
Corporation (GOCC).

The PICCI was incorporated pursuant to P.D. No. 520, which provides:
Section 2. In order for the International Conference Center to enjoy autonomy of
operation, separate and distinct from that of the Central bank, the latter is hereby
authorized to organize a corporation to be known as the Manila International
Conference Center which will manage and operate the former, the capital of which shall
be fully subscribed by the Central Bank.

The governing powers and authority of the corporation shall be vested in, and exercised
by, a Board of Directors composed of the Central Bank Governor as Chairman, the
Senior Deputy as Vice Chairman, and five other members to be designated by the
Monetary Board.

xxx     xxx    xxx

PICCI's sole stockholder is the BSP. The Administrative Code of 1987 defines a GOCC in
this wise:
(13) government-owned or controlled corporations refer to any agency organized as a
stock or non-stock corporation vested with functions relating to public needs whether
governmental or proprietary in nature, and owned by the government directly or
indirectly through its instrumentalities either wholly, or where applicable as in the
case of stock corporations to the extent of at least 51% of its capital stock.
Verily, a corporation is a government-owned or controlled corporation when the
government directly or indirectly owns or controls at least a majority or 51% share of
the capital stock. A government-owned or controlled corporation is either a "parent"
corporation, i.e., one "created by special law" (Sec. 3 (a), PD 2029) or a "subsidiary"
corporation, i.e., one created pursuant to law where at least a majority of the
outstanding voting capital stock is owned by the parent government corporation and/or
other government-owned subsidiaries.29

The COA's audit jurisdiction extends not only to government agencies or

instrumentalities, but also to "government-owned and controlled corporations with
original charters as well as other government-owned or controlled corporations" without
original charters.30

In GSIS Family Bank Employees Union v. Villanueva,31 the Court clarified that a

government-owned or controlled corporation is: (1) established by original charter or
through the general corporation law; (2) vested with functions relating to public need
whether governmental or proprietary in nature; and (3) directly owned by the
government or by its instrumentality, or where the government owns a majority of the
outstanding capital stock. Possessing all three (3) attributes is necessary to be
classified as a government-owned or controlled corporation. In the case of the PICCI, it
may not be an originally chartered corporation, but it is a subsidiary corporation of BSP
organized in accordance with the Corporation Code of the Philippines.32

The personality of PICCI as a GOCC subsidiary of BSP has already been settled
in Singson, viz:
The PICCI is not an originally chartered corporation, but a subsidiary corporation of BSP
organized in accordance with the Corporation Code of the Philippines. The Articles of
Incorporation of PICCI was registered on July 29, 1976 in the Securities and Exchange
Commission. As such, PICCI does not fall within the coverage of NCC No. 67. As a
matter of fact, by virtue of P.D. [No.] 520, PICCI is exempt from the coverage of the
civil service law and regulations (and Constitution defining coverage of civil service as
limited to those with original [charter] (TUCP v. NHA, G.R. No. 49677, May 4, 1989,
Article IX-B, Sec. 1). Certainly, if PICCI is not part of the National Government, but a
mere subsidiary of a government-owned and/or controlled corporation (BSP), its
officers, and more importantly, its directors, are not covered by the term "national
government officials and employees" to which NCC No. 67 finds application.
Unquestionably, PICCI is a GOCC. Perforce, it is subject to the review and/audit of the
COA.

Singson33ordains that the grant of

per diems and RATA to BSP officials
concurrently holding ex officio
positions in PICCI does not violate
the constitutional proscription
against double compensation.

The Grant of per diems and RATA

To recall, the COA here allowed petitioners' receipt of per diems but not exceeding
P1,000.00. It, nonetheless, affirmed the total disallowance of the RATA granted
them, viz:

xxx         xxx         xxx

Thus, although the grant of per diems finds legal basis in Section 30 of the Corporation
Code of the Philippines, only the amount of P1,000.00 for every meeting shall be
allowed pursuant to the ruling of the Supreme Court in the Singson case, and pursuant
to the suspension of the grant of new increased benefit under MO No. 20.

As to the payment of Representation Allowance and Travel Allowance (RATA), this

Commission finds that its grant does not violate the provision against double
compensation under Section 8, Article IX-B of the 1987 Constitution,

xxx         xxx         xxx

However, as pointed out in the above-cited case, although there is no double

compensation, the By-Laws of PICCI authorized only the payment of per diem to the
members of its Board of Directors, and no other compensation. Thus, the payment of
representation allowances and bonuses is still in violation of Section 8, IX-B of the 1987
Constitution, as there is no law authorizing its payment.

Singson pointedly resolved as valid the grant of RATA to members of the PICCI Board
of Directors who are also BSP officers, viz:
xxx      xxx   xxx

Taking NCC No. 67 as a whole then, what it seeks to prevent is the dual collection of
RATA by a national official from the budgets of "more than one national agency." We
emphasize that the other source referred to in the prohibition is another national
agency. This can be gleaned from the fact that the sentence "no one shall be allowed to
collect RATA from more than one source" (the controversial prohibition) immediately
follows the sentence that RATA shall be paid from the budget of the national agency
where the concerned national officials and employees draw their salaries. The fact that
the other source is another national agency is supported by RA 7645 (the GAA of 1993)
invoked by respondent COA itself and, in fact, by all subsequent GAAs for that matter,
because the GAAs all essentially provide that (1) the RATA of national officials shall be
payable from the budgets of their respective national agencies and (2) those officials on
detail with other national agencies shall be paid their RATA only from the budget of
their parent national agency:

xxx         xxx         xxx

Clearly therefore, the prohibition in NCC No. 67 is only against the dual or multiple
collection of RATA by a national official from the budgets of two or more national
agencies. Stated otherwise, when a national official is on detail with another national
agency, he should get his RATA only from his parent national agency and not from the
other national agency he is detailed to.19 (Italics supplied.)

Moreover, Section 6 of Republic Act No. 7653 (The New Central Bank Act) defines that
the powers and functions of the BSP shall be exercised by the BSP Monetary Board,
which is composed of seven (7) members appointed by the President of the Philippines
for a term of six (6) years. MB Resolution No. 15,20 dated January 5, 1994, as amended
by MB Resolution No. 34, dated January 12, 1994, are valid corporate acts of
petitioners that became the bases for granting them additional monthly RATA of
P1,500.00, as members of the Board of Directors of PICCI. The RATA is distinct from
salary (as a form of compensation). Unlike salary which is paid for services rendered,
the RATA is a form of allowance intended to defray expenses deemed unavoidable in
the discharge of office. Hence, the RATA is paid only to certain officials who, by the
nature of their offices, incur representation and transportation expenses.21 Indeed,
aside from the RATA that they have been receiving from the BSP, the grant of
P1,500.00 RATA to each of the petitioners for every board meeting they attended, in
their capacity as members of the Board of Directors of PICCI, in addition to their
P1,000.00 per diem, does not run afoul the constitutional proscription against double
compensation.

xxx         xxx         xxx

The Court upholds the findings of respondent that petitioners' right to compensation as
members of the PICCI Board of Directors is limited only to per diem of P1,000.00 for
every meeting attended, by virtue of the PICCI By-Laws. In the same vein, we also
clarify that there has been no double compensation despite the fact that, apart from the
RATA they have been receiving from the BSP, petitioners have been granted the RATA
of P1,500.00 for every board meeting they attended, in their capacity as members of
the Board of Directors of PICCI, pursuant to MB Resolution No. 1523 dated January 5,
1994, as amended by MB Resolution No. 34 dated January 12, 1994, of the Bangko
Sentral ng Pilipinas. In this regard, we take into consideration the good faith of
petitioners.
Applying Singson here, we rule that like the grant of per diems, the payment of RATA
to petitioners Tentangco, Suratos and De Zuñiga does not violate the constitutional
proscription against double compensation.

In any event, the COA contradicted itself when in one breadth, it acknowledged the
application of Singson to this case, but in another, it disallowed the grant of RATA to
aforenamed petitioners for supposed lack of valid authority. In truth, Singson is one
such valid authority supporting the grant of RATA to petitioners. The other sources of
such authority are MB Resolution No. 34 dated January 12, 1994, No. 665 dated July 3,
1996, No. 1919 dated October 31, 2000, No. 1518 dated December 7, 2006, No. 1901
dated December 29, 2009, and No. 1855 dated December 23, 2010. These resolutions
were passed by the PICCI Board of Directors and approved no less by the BSP-MB
pursuant to Section 30 Corporation Code, viz:
Sec. 30. Compensation of Directors, - In the absence of any provision in the by-laws
fixing their compensation, the directors shall not receive any compensation, as such
directors, except for reasonable per diems; Provided, however, that any such
compensation (other than per diems) may be granted to directors by the vote of the
stockholders representing at least a majority of the outstanding capital stock at a
regular or special stockholders' meeting. In no case shall the total yearly compensation
of directors, as such directors, exceed ten (10%) percent of the net income before
income tax of the corporation during the preceding year.

Other Bonuses

We agree with the COA's pronouncement that the other bonuses granted to petitioners
in addition to per diems and RATA were unauthorized.

By definition, "bonus" is a gratuity or act of liberality of the giver. It is something given

in addition to what is ordinarily received by or strictly due the recipient. It is granted
and paid to an employee for his industry and loyalty which contributed to the success of
the employer's business and made possible the realization of profits.34 It is not a gift,
but a sum paid for services, or upon some other consideration, but in addition to or in
excess of that which would ordinarily be given.35

Verily, bonus is a form of compensation for services rendered: the very evil sought to
be curbed under Section 8, Art. IX-B of the 1987 Constitution, viz:
Section 8. No elective or appointive public officer or employee shall receive additional,
double, or indirect compensation, unless specifically authorized by law, nor accept
without the consent of the Congress, any present, emolument, office, or title of any
kind from any foreign government. Pensions or gratuities shall not be considered as
additional, double, or indirect compensation.

The increases in petitioners'

per diems and RAT A are valid.

As a GOCC, the PICCI is governed by compensation and position standards issued by

the Department of Budget and Management (DBM) and relevant laws.36 Among them is
Memorandum Order No. 2037 directing the suspension of any increases on the benefits
of GOCC employees and executives, thus:
SECTION 1. Immediately suspend the grant of any salary increases and new or
increased benefits such as, but not limited to, allowances; incentives; reimbursement of
expenses; intelligence, confidential or discretionary funds; extraordinary expenses, and
such other benefits not in accordance with those granted under SSL. This
suspension shall cover senior officer level positions, including Members of the Board of
Directors or Trustees.
Memorandum Order No. 20 aims to rationalize or harmonize the compensation and
benefits of senior officers in the government both in the GOCCs and National
Government. Its Whereas Clause provides:
WHEREAS, the study revealed a much superior pay package in GOCCs, GFIs and
subsidiaries exempted from the SSL, such that officers in these entities receive at least
twice what comparable positions receive in NGAs, and some heads of said entities even
exceed the average salary of their counterpart positions in the private sector in the
Philippines and in the ASEAN Region;

WHEREAS, Section 5, Article IX-B of the 1997 Constitution provides for the
standardization of compensation of government officials and employees including those
in GOCCs with original charters taking into account the nature of the responsibilities
pertaining to and the qualifications required for their positions;

WHEREAS, in line therewith there is a need to harmonize the pay practices in

these entities and place them at a level comparable to positions in NGAs to
preclude dichotomy in the bureaucracy brought about by the severe pay
imbalance between personnel of these special entities and the rest of the
bureaucracy following the SSL;
In fine, the proscribed increases under Memorandum Order No. 20 refer only to those
in excess of the benefits given to government officials holding comparable positions in
the National Government. On this score, the amounts of RATA and per diems granted to
officials of the National Government for 2010 were those specified under RA 9770 or
the General Appropriations Act of 2010, viz:
Sec. 47. Representation and Transportation Allowances. The following officials of
National Government Agencies, whil in the actual performance of their respective
functions, are hereby authorized monthly commutable representation and
transportation allowances payable from the programmed appropriations provided for
their respective offices at rates indicated below, which shall apply to each type of
allowance at:

(a) P11,000 for Department Secretaries;

(b) P8,700 for Department Undersecretaries;
(c) P7,800 for Department Assistant Secretaries;
(d) P7,000 for Bureau Directors and Department Regional Directors;
(e) P6,500 for Assistant Bureau Directors, Department Assistant Regional Directors
Bureau Regional Directors, and Department Service Chiefs;
(f) P5,500 for Assistant Bureau Regional Directors; and
(g) P4,000 for Chief of Divisions, identified as such in the Personal Services Itemization
and Plantilla of Personnel.

The determination of those that are of equivalent ranks with the above cited officials in
the government shall be made by the DBM.

xxx         xxx         xxx

Sec. 49. Honoraria. The respective agency appropriations for honoraria shall only be
paid to the following:
(a) Teaching personnel of the DepEd, TESDA, SUCs and other educational institutions,
engaged in actual classroom teaching, whose   teaching load is outside of the regular
office hours or in excess of the regular load;

(b)   Those who act as lecturers, resource persons, coordinators and facilitators in
seminars, training programs, and other similar activities in training institutions,
including those conducted by entities for their officials and employees wherein no
seminar   fees are collected from participants;

(c) Chairs and members of commissions, boards, councils, and other similar entities,
including the personnel thereof who are not  paid salaries nor per diems but
compensated in the form of honoraria as provided by law, rules and regulations;
The grant of honoraria to the foregoing shall be subject to the guidelines prescribed
under Budget Circular No. 2003-5, as amended by Budget Circular No. 2007-1 and
National Budget Circular No. 2007-510, Budget Circular No. 2007-2, and other
guidelines issued by the DBM.
Here, the COA disapproved the grant of per diems and RATA increases to its ex
officio members, without at all considering the foregoing guidelines. As it was, the COA
issued a bulk disallowance of the increases, sans any determination whether the same
were indeed in excess of the amounts received by petitioners' counterparts in the
National Government. Surely, Memorandum Order No. 20 intends to rationalize the
benefits of the government employees, not to discriminate GOCCs.

In line with the declared policy of the national government which is to provide "equal
pay for substantially equal work. Sec. 5, IX-B of the Constitution commands:
Section 5. The Congress shall provide for the standardization of compensation of
government officials and employees, including those in government-owned or controlled
corporations with original charters, taking into account the nature of the responsibilities
pertaining to, and the qualifications required for, their positions.
Executive Order No. 2438
applies prospectively.

The disallowed benefits here were given by the PICCI Board/BSP-MB between January
2010 February 2011. Executive Order No. 24 requiring the approval of the Philippine
President for any increase on the current rate of per diems took effect only on March
21, 2011. Executive Order No. 24, therefore, should not apply to the increases in
question which were granted to petitioners before Executive Order No. 24 took effect.

Article 4 of the Civil Code ordains that laws shall have no retroactive effect, unless the
contrary is provided. In the recent case of Felisa Agricultural Corp. v. National
Transmission Corp.,39 the Court decreed:
Statutes are generally applied prospectively unless they expressly allow a retroactive
application. It is well known that the principle that a new law shall not have retroactive
effect only governs rights arising from acts done under the rule of the former law.
However, if a right be declared for the first time by a subsequent law, it shall take
effect from that time even though it has arisen from acts subject to the former laws,
provided that it does not prejudice another acquired right of the same origin.
Since Executive Order No. 24 does not provide for its retroactive application, the same
may not be applied for the purpose of deauthorizing the grant of benefits prior to its
effectivity. At most, it may serve as guidelines to acts done upon its effectivity onward.

The newly submitted evidence before

the COA-Proper are admissible.

In their appeal first before the COA-Corporate Government Sector, and subsequently
before the COA-Proper, petitioners consistently invoked as valid bases for the
questioned grant of per diem and RAT A, PICCI's amended by-laws and MB Resolution
No. 34 dated January 12, 1994, No. 665 dated July 3, 1996, and No. 1919 dated
October 31, 2000.

In its Decision dated February 16, 2017, the COA-Proper allowed the grant of
P1,000.00 per diem, but disallowed the grant of RATA and the subsequent increases in
both per diems and RATA. The COA Proper enumerated the reasons for the
disallowance: a) the amended PICCI By-Laws even if approved by the BSP-Monetary
Board cannot take effect unless the SEC itself issued the Certification required under
Sec. 48 of the Corporation Code; b) the increases in the per diems were not supported
by Board Resolutions; and c) the PICCI By-Laws allowed payment of per diems only,
not of RATA or other benefits.

In support of their motion for reconsideration below, petitioners attached thereto the
following documents --- the SEC Certification on PICCI Amended By-Laws; MB
Resolution No. 1518 dated December 7, 2006; MB Resolution No. 1901 dated
December 29, 2009; and MB Resolution No. 1855 dated December 23, 2010, etc.

To begin with, there is nothing in the 2009 COA Rules of procedure which prohibits the
parties from presenting or submitting additional documents during the appeal
proceedings before the COA proper. At any rate, there is no showing, as none was
shown, that the aforesaid public documents were spurious, as to bar them from
admission as evidence.

In any case, the submission of these documents on motion for reconsideration before
COA Proper was simply in direct response to the COA's adverse findings in its assailed
decision.

Notably, the COA Proper itself did not deny the admission of the documents in question.
It is too late in the day for COA to now fault the submission of the documents before it
on motion for reconsideration.

Suffice it to state that technical rules of procedure do not strictly apply to

administrative cases. The parties therein should be given the amplest opportunity to
fully ventilate their claims and defenses, brushing aside technicalities in order to truly
ascertain the relevant facts and justly resolve the case on the merits. After all,
procedural rules are intended to secure, not override, substantial justice.40 So must it
be.

Singson is favorable to
petitioners.
As earlier stated, Singson held that the grant of per diems and RATA to petitioners'
predecessors in the PICCI Board of Directors who were also officers of BSP did not
violate the proscription against double compensation, thus:
Moreover, Section 6 of Republic Act No. 7653 (The New Central Bank Act) defines that
the powers and functions of the BSP shall be exercised by the BSP Monetary Board,
which is composed of seven (7) members appointed by the President of the Philippines
for a term of six (6) years. MB Resolution No. 15, dated January 5, 1994, as amended
by MB Resolution No. 34, dated January 12, 1994, are valid corporate acts of
petitioners that became the bases for granting them additional monthly RATA of
P1,500.00, as members of the Board of Directors of PICCI. The RATA is distinct from
salary (as a form of compensation). Unlike salary which is paid for services rendered,
the RATA is a form of allowance intended to defray expenses deemed unavoidable in
the discharge of office. Hence, the RATA is paid only to certain officials who, by the
nature of their offices, incur representation and transportation expenses. Indeed,
aside from the RATA that they have been receiving from the BSP, the grant of
P1,500.00 RATA to each of the petitioners for every board meeting they
attended, in their capacity as members of the Board of Directors of PICCI, in
addition to their P1,000.00 per diem, does not run afoul the constitutional
proscription against double compensation.41
ACCORDINGLY, the petition for certiorari is GRANTED. Save for the explicit
recognition of the Commission on Audit of petitioners' entitlement to per diems, the
Decision42 dated February 16, 2017 and Resolution dated September 27, 2018 of the
Commission on Audit are NULLIFIED.

SO ORDERED.

Bersamin, C.J.,  on official business.

Carpio, Peralta, Perlas-Bernabe, Leonen, Jardeleza, Caguioa, A. Reyes, Jr., J. Reyes,
Jr., Hernando, Carandang, Inting, and Zalameda, JJ., concur.
Gesmundo, J.,  on official business.

NOTICE OF JUDGMENT

Sirs/Mesdames:

Please take notice that on September 17, 2019 a Decision, copy attached herewith, was
rendered by the Supreme Court in the above-entitled case, the original of which was
received by this Office on November 19, 2019 at 1:55 p.m.

Very truly yours,

(Sgd. ) EDGAR O. ARICHETA

Clerk of Court
COBARDE-GAMALLO v. ESCANDOR
CINDY SHIELA COBARDE-GAMALLO v. JOSE ROMEO C. ESCANDOR

GR No. 184464

June 21, 2017

Facts:

Two cases arose from an administrative complaint for Violation of Republic Act No. 7877 (Anti-Sexual
Harassment Act of 1995) filed by Cindy Sheila Cobarde-Gamallo (Cobarde-Gamallo), a contractual
employee of the National Economic Development Authority, Regional Office No. 7 (NEDA 7), for the
UNICEF-assisted Fifth Country Program for Children (CPC V), against Jose Romeo C. Escandor
(Escandor), Regional Director of NEDA 7, before the Office of the Deputy Ombudsman for the Visayas
(OMB-Visayas), docketed as OMB-V-A-04-0492-I.

In a Decision dated March 21, 2007, there being substantial evidence, the OMB-Visayas, through Graft
Investigation and Prosecution Officer II Cynthia C. Maturan-Sibi, adjudged Escandor guilty of grave
misconduct and meted him with the penalty of dismissal from the service with all its accessory penalties.
This OMB-Visayas Decision was later approved by the then Ombudsman Ma. Merceditas N. Gutierrez
(Gutierrez) on June 14, 2007. Pursuant to Section 7, Rule III of the Rules of Procedure of the Office of the
Ombudsman, as amended by Administrative Order (AO) No. 17, the Office of the Ombudsman (OMB)
issued on even date an Order directing the implementation of the aforesaid Decision, particularly
Escandor's dismissal from the service, through the then Director General/Secretary of NEDA Romulo L.
Neri (Neri).

Aggrieved, Escandor went to the CA via a Petition for Certiorari (with application for Temporary
Restraining Order and Preliminary Injunction) under Rule 65 of the Rules of Court, seeking to set aside,
reverse and declare null and void the OMB Order dated June 14, 2007 directing the immediate
implementation and execution of the OMB-Visayas Decision dated March 21, 2007 (approved on June
14, 2007) dismissing him from the service. In support of his petition, Escandor claimed that he timely
moved for reconsideration of the said Decision; thus, it would be premature for the OMB and the NEDA to
dismiss him from the service. Escandor also cited several rulings of this Court to sustain his position that
the penalty of dismissal cannot be immediately executed pending any appeal or motion for
reconsideration. Lastly, Escandor sought the nullification of Section 7, Administrative Order No. 17 of the
OMB for being allegedly contrary to this Court's ruling in the cases cited by him.
Finding merit in Escandor's petition, the CA, in its now assailed Decision dated March 25, 2008, partly
granted the same, and, thus, enjoined Ombudsman Gutierrez and Secretary Neri from executing the
Decision dated March 21, 2007, as well as the Order dated June 14, 2007, in OMB-V-A-04-0492-I until
after the said Decision becomes final and executory. The CA held that there are good grounds to prevent
Ombudsman Gutierrez and Secretary Neri from enforcing the Decision dated March 21, 2007, as it has
not yet become final and executory considering the pendency of Escandor's Motion for Reconsideration
thereof. The CA based its Decision from the same cases cited by Escandor in his petition where this
Court declared that penalties other than public censure, reprimand, or suspension of not more than one
month, or a fine not equivalent to one month salary, cannot be immediately executed pending any appeal
or motion for reconsideration. With these, the CA considered it grave abuse of discretion to insist
Escandor's dismissal from the service despite the unequivocal pronouncements of this Court on the
matter and Escandor's pending motion for reconsideration with the OMB. The CA, however, declined to
nullify Section 7, Administrative Order No. 17 of the OMB.

Cobarde-Gamallo, Ombudsman Gutierrez and Secretary Neri sought reconsideration of the aforesaid CA
Decision but it was denied for lack of merit in the now questioned CA Resolution dated August 28, 2008.

Issue:

Whether or not the OMB's Decision and Order of Dismissal against Escandor can be immediately
implemented despite the pendency of his Motion for Reconsideration and/or Appeal.

Held:

Section 7, Rule III of the OMB Rules of Procedure, as amended by AO No. 17 dated September 15, 2003,
explicitly provides.

Section 7. Finality and execution of decision. - Where the respondent is absolved of the charge, and in
case of conviction where the penalty imposed is public censure or reprimand, suspension of not more
than one month, or a fine equivalent to one month salary, the decision shall be final, executory and
unappealable. In all other cases, the decision may be appealed to the Court of Appeals on a verified
petition for review under the requirements and conditions set forth in Rule 43 of the Rules of Court, within
fifteen (15) days from receipt of the written Notice of the Decision or Order denying the Motion for
Reconsideration.

An appeal shall not stop the decision from being executory. In case the penalty is suspension or removal
and the respondent wins such appeal, he shall be considered as having been under preventive
suspension and shall be paid the salary and such other emoluments that he did not receive by reason of
the suspension or removal.
A decision of the Office of the Ombudsman in administrative cases shall be executed as a matter of
course. The Office of the Ombudsman shall ensure that the decision shall be strictly enforced and
properly implemented. The refusal or failure by any officer without just cause to comply with an order of
the Office of the Ombudsman to remove, suspend, demote, fine, or censure shall be a ground for
disciplinary action against said officer.

It can be gleaned from the afore-quoted provision that the OMB's decisions in administrative cases may
either be unappealable or appealable. The unappealable decisions are final and executory, to wit: (1)
respondent is absolved of the charge; (2) the penalty imposed is public censure or reprimand; (3)
suspension of not more than one month; and (4) a fine equivalent to one month's salary. The appealable
decisions, on the other hand, are those falling outside the aforesaid enumeration, and may be appealed
to the CA under Rule 43 of the Rules of Court, within 15 days from receipt of the written notice of the
decision or order denying the motion for reconsideration. Section 7 is categorical in providing that an
appeal shall not stop the decision from being executory, and that such shall be executed as a matter of
course.

Also, Memorandum Circular (MC) No. 01, Series of 2006, of the OMB states:

Section 7, Rule III of Administrative Order No. 07, otherwise known as, the "Ombudsman Rules of
Procedure" provides that: "A decision of the Office of the Ombudsman in administrative cases shall be
executed as a matter of course."

In order that the foregoing rule may be strictly observed, all concerned are hereby enjoined to implement
all Ombudsman decisions, orders or resolutions in administrative disciplinary cases, immediately upon
receipt thereof by their respective offices.

The filing of a motion for reconsideration or a petition for review before the Office of the Ombudsman
does not operate to stay the immediate implementation of the foregoing Ombudsman decisions, orders or
resolutions.

Here, Escandor was ordered dismissed from the service. Undoubtedly, such decision against him is
appealable via Rule 43 to the CA. Nonetheless, the same is immediately executory even pending appeal
or in his case even pending his motion for reconsideration before the OMB as that is the clear mandate of
Section 7, Rule III of the OMB Rules of Procedure, as amended, as well as the OMB's MC No. 01, Series
of 2006. As such, Escandor's filing of a motion for reconsideration does not stay the immediate
implementation of the OMB's order of dismissal since "a decision of the [OMB] in administrative cases
shall be executed as a matter of course" under the afore-quoted Section 7.

Further, in applying Section 7, there is no vested right that is violated as the respondent in the
administrative case is considered preventively suspended while his case is on appeal and, in the event he
wins on appeal, he shall be paid the salary and such other emoluments that he did not receive by reason
of the suspension or removal. To note, there is no such thing as a vested interest in an office, or even an
absolute right to hold office. Except for constitutional offices that provide for special immunity as regards
salary and tenure, no one can be said to have any vested right in an office. Hence, no vested right of
Escandor would be violated as he would be considered under preventive suspension and entitled to the
salary and emoluments that he did not receive, by reason of his dismissal from the service, in the event
that his Motion for Reconsideration will be granted or that he wins in his eventual appeal.

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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-46496             February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and

NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.

Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial
Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.

LAUREL, J.:

The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-entitled
case has filed a motion for reconsideration and moves that, for the reasons stated in his motion, we
reconsider the following legal conclusions of the majority opinion of this Court:

1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o
que no sea para una determinada, termina o bien por voluntad de cualquiera de las partes o
cada vez que ilega el plazo fijado para el pago de los salarios segun costumbre en la
localidad o cunado se termine la obra;

2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya
colectivamente, con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus tarbajos
por haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de ser
empleados u obreros de la misma;
 3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus
osbreros sin tiempo fijo de duracion y sin ser para una obra determiminada y que se niega a
readmitir a dichos obreros que cesaron como consecuencia de un paro forzoso, no es
culpable de practica injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del
Commonwealth, aunque su negativa a readmitir se deba a que dichos obreros pertenecen a
un determinado organismo obrero, puesto que tales ya han dejado deser empleados suyos
por terminacion del contrato en virtud del paro.

The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the
judgement rendered by the majority of this Court and the remanding of the case to the Court of
Industrial Relations for a new trial, and avers:

1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather
soles in ANG TIBAY making it necessary for him to temporarily lay off the members of the
National Labor Union Inc., is entirely false and unsupported by the records of the Bureau of
Customs and the Books of Accounts of native dealers in leather.

2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme
to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT
with the Philippine Army.

3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re
supposed delay of leather soles from the States) was but a scheme to systematically prevent
the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army.

4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union
dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U.S.,
548, petitioner's printed memorandum, p. 25.)

5. That in the exercise by the laborers of their rights to collective bargaining, majority rule
and elective representation are highly essential and indispensable. (Sections 2 and 5,
Commonwealth Act No. 213.)

6. That the century provisions of the Civil Code which had been (the) principal source of
dissensions and continuous civil war in Spain cannot and should not be made applicable in
interpreting and applying the salutary provisions of a modern labor legislation of American
origin where the industrial peace has always been the rule.

7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating
against the National Labor Union, Inc., and unjustly favoring the National Workers'
Brotherhood.

8. That the exhibits hereto attached are so inaccessible to the respondents that even with
the exercise of due diligence they could not be expected to have obtained them and offered
as evidence in the Court of Industrial Relations.

9. That the attached documents and exhibits are of such far-reaching importance and effect
that their admission would necessarily mean the modification and reversal of the judgment
rendered herein.
The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the
respondent National Labor Union, Inc.

In view of the conclusion reached by us and to be herein after stead with reference to the motion for
a new trial of the respondent National Labor Union, Inc., we are of the opinion that it is not necessary
to pass upon the motion for reconsideration of the Solicitor-General. We shall proceed to dispose of
the motion for new trial of the respondent labor union. Before doing this, however, we deem it
necessary, in the interest of orderly procedure in cases of this nature, in interest of orderly procedure
in cases of this nature, to make several observations regarding the nature of the powers of the Court
of Industrial Relations and emphasize certain guiding principles which should be observed in the trial
of cases brought before it. We have re-examined the entire record of the proceedings had before the
Court of Industrial Relations in this case, and we have found no substantial evidence that the
exclusion of the 89 laborers here was due to their union affiliation or activity. The whole transcript
taken contains what transpired during the hearing and is more of a record of contradictory and
conflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It
is evident that these statements and expressions of views of counsel have no evidentiary value.

The Court of Industrial Relations is a special court whose functions are specifically stated in the law
of its creation (Commonwealth Act No. 103). It is more an administrative than a part of the integrated
judicial system of the nation. It is not intended to be a mere receptive organ of the Government.
Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and
deciding only cases that are presented to it by the parties litigant, the function of the Court of
Industrial Relations, as will appear from perusal of its organic law, is more active, affirmative and
dynamic. It not only exercises judicial or quasi-judicial functions in the determination of disputes
between employers and employees but its functions in the determination of disputes between
employers and employees but its functions are far more comprehensive and expensive. It has
jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question,
matter controversy or dispute arising between, and/or affecting employers and employees or
laborers, and regulate the relations between them, subject to, and in accordance with, the provisions
of Commonwealth Act No. 103 (section 1). It shall take cognizance or purposes of prevention,
arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to cause
a strike or lockout, arising from differences as regards wages, shares or compensation, hours of
labor or conditions of tenancy or employment, between landlords and tenants or farm-laborers,
provided that the number of employees, laborers or tenants of farm-laborers involved exceeds thirty,
and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or by
any or both of the parties to the controversy and certified by the Secretary of labor as existing and
proper to be by the Secretary of Labor as existing and proper to be dealth with by the Court for the
sake of public interest. (Section 4, ibid.) It shall, before hearing the dispute and in the course of such
hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable
agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall
investigate and study all industries established in a designated locality, with a view to determinating
the necessity and fairness of fixing and adopting for such industry or locality a minimum wage or
share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants
or less to landowners. (Section 5, ibid.) In fine, it may appeal to voluntary arbitration in the settlement
of industrial disputes; may employ mediation or conciliation for that purpose, or recur to the more
effective system of official investigation and compulsory arbitration in order to determine specific
controversies between labor and capital industry and in agriculture. There is in reality here a
mingling of executive and judicial functions, which is a departure from the rigid doctrine of the
separation of governmental powers.

In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated
September 13, 1939, we had occasion to joint out that the Court of Industrial Relations et al., G. R.
No. 46673, promulgated September 13, 1939, we had occasion to point out that the Court of
Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act requires
it to "act according to justice and equity and substantial merits of the case, without regard to
technicalities or legal forms and shall not be bound by any technicalities or legal forms and shall not
be bound by any technical rules of legal evidence but may inform its mind in such manner as it may
deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be restricted to the
specific relief claimed or demands made by the parties to the industrial or agricultural dispute, but
may include in the award, order or decision any matter or determination which may be deemed
necessary or expedient for the purpose of settling the dispute or of preventing further industrial or
agricultural disputes. (section 13, ibid.) And in the light of this legislative policy, appeals to this Court
have been especially regulated by the rules recently promulgated by the rules recently promulgated
by this Court to carry into the effect the avowed legislative purpose. The fact, however, that the
Court of Industrial Relations may be said to be free from the rigidity of certain procedural
requirements does not mean that it can, in justifiable cases before it, entirely ignore or disregard the
fundamental and essential requirements of due process in trials and investigations of an
administrative character. There are primary rights which must be respected even in proceedings of
this character:

(1) The first of these rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in support thereof. In the
language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed.
1129, "the liberty and property of the citizen shall be protected by the rudimentary
requirements of fair play.

(2) Not only must the party be given an opportunity to present his case and to adduce
evidence tending to establish the rights which he asserts but the tribunal must consider the
evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906,
80 law. ed. 1288.) In the language of this court in Edwards vs. McCoy, 22 Phil., 598, "the
right to adduce evidence, without the corresponding duty on the part of the board to consider
it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is
presented can thrust it aside without notice or consideration."

(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply
a necessity which cannot be disregarded, namely, that of having something to support it is a
nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This principle
emanates from the more fundamental is contrary to the vesting of unlimited power anywhere.
Law is both a grant and a limitation upon power.

(4) Not only must there be some evidence to support a finding or conclusion (City of Manila
vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the
evidence must be "substantial." (Washington, Virginia and Maryland Coach Co. v. national
labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means
such relevant evidence as a reasonable mind accept as adequate to support a conclusion."
(Appalachian Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989;
National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-
Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The
statute provides that "the rules of evidence prevailing in courts of law and equity shall not be
controlling.' The obvious purpose of this and similar provisions is to free administrative
boards from the compulsion of technical rules so that the mere admission of matter which
would be deemed incompetent inn judicial proceedings would not invalidate the
administrative order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct.
563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R.
Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and
 Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable
flexibility in administrative procedure does not go far as to justify orders without a basis in
evidence having rational probative force. Mere uncorroborated hearsay or rumor does not
constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board,
59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"

(5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected. (Interstate Commence
Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by
confining the administrative tribunal to the evidence disclosed to the parties, can the latter be
protected in their right to know and meet the case against them. It should not, however,
detract from their duty actively to see that the law is enforced, and for that purpose, to use
the authorized legal methods of securing evidence and informing itself of facts material and
relevant to the controversy. Boards of inquiry may be appointed for the purpose of
investigating and determining the facts in any given case, but their report and decision are
only advisory. (Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations
may refer any industrial or agricultural dispute or any matter under its consideration or
advisement to a local board of inquiry, a provincial fiscal. a justice of the peace or any public
official in any part of the Philippines for investigation, report and recommendation, and may
delegate to such board or public official such powers and functions as the said Court of
Industrial Relations may deem necessary, but such delegation shall not affect the exercise of
the Court itself of any of its powers. (Section 10, ibid.)

(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision. It may be that the volume of work is such that
it is literally Relations personally to decide all controversies coming before them. In the
United States the difficulty is solved with the enactment of statutory authority authorizing
examiners or other subordinates to render final decision, with the right to appeal to board or
commission, but in our case there is no such statutory authority.

(7) The Court of Industrial Relations should, in all controversial questions, render its decision
in such a manner that the parties to the proceeding can know the various issues involved,
and the reasons for the decision rendered. The performance of this duty is inseparable from
the authority conferred upon it.

In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to
the alleged agreement between the Ang Tibay and the National Worker's Brotherhood (appendix A),
the record is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a
national way, a conclusion of law.

This result, however, does not now preclude the concession of a new trial prayed for the by
respondent National Labor Union, Inc., it is alleged that "the supposed lack of material claimed by
Toribio Teodoro was but a scheme adopted to systematically discharged all the members of the
National Labor Union Inc., from work" and this avernment is desired to be proved by the petitioner
with the "records of the Bureau of Customs and the Books of Accounts of native dealers in leather";
that "the National Workers Brotherhood Union of Ang Tibay is a company or employer union
dominated by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further
alleges under oath that the exhibits attached to the petition to prove his substantial avernments" are
so inaccessible to the respondents that even within the exercise of due diligence they could not be
expected to have obtained them and offered as evidence in the Court of Industrial Relations", and
that the documents attached to the petition "are of such far reaching importance and effect that their
admission would necessarily mean the modification and reversal of the judgment rendered herein."
We have considered the reply of Ang Tibay and its arguments against the petition. By and large,
after considerable discussions, we have come to the conclusion that the interest of justice would be
better served if the movant is given opportunity to present at the hearing the documents referred to
in his motion and such other evidence as may be relevant to the main issue involved. The legislation
which created the Court of Industrial Relations and under which it acts is new. The failure to grasp
the fundamental issue involved is not entirely attributable to the parties adversely affected by the
result. Accordingly, the motion for a new trial should be and the same is hereby granted, and the
entire record of this case shall be remanded to the Court of Industrial Relations, with instruction that
it reopen the case, receive all such evidence as may be relevant and otherwise proceed in
accordance with the requirements set forth hereinabove. So ordered.

Avanceña, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.

DECISION
LEONEN, J.:
A perceived abuse cannot be cured by an abuse. Administrative agencies, such as the
Department of Agrarian Reform Adjudication Board (DARAB), are not courts of law exercising
judicial power. The power to issue writs of certiorari is an incident of judicial review. Thus,
administrative agencies may not issue writs of certiorari to annul acts of officers or state
organs even when they exercise supervisory authority over these officers or organs.

This resolves a Petition for Review on Certiorari[1] under Rule 45 of the 1997 Rules of Civil
Procedure praying that the assailed July 23, 2012 Decision[2] and January 9, 2013
Resolution[3] of the Court of Appeals be reversed and set aside. It is prayed that in lieu of
them, judgment be rendered directing respondent DARAB to dismiss the Petition for Certiorari
filed before it by respondent Land Bank of the Philippines (Landbank).

The assailed July 23, 2012 Decision denied the Petition for Certiorari and Prohibition filed by
Sergio Renato Q. Zoleta, Venancio Q. Zoleta, and Milagros Q. Zoleta-Garcia (petitioners). This
Decision found no grave abuse of discretion on the part of DARAB in issuing a resolution
granting Landbank's Petition for Certiorari against an order and alias writ of execution issued
by Regional Agrarian Reform Adjudicator (RARAD) Conchita C. Miñas (Regional Adjudicator
Miñas).[4] The assailed January 9, 2013 Resolution denied petitioners' Motion for
Reconsideration.[5]

On September 29, 1996, Eliza Zoleta (Eliza), through Venancio Q. Zoleta, voluntarily offered for
sale to the government, under the Comprehensive Agrarian Reform Program, a parcel of land
covered by Transfer Certificate of Title No. T-87673. This lot was located in Barangay Casay,
San Francisco, Quezon and had an area of approximately 136 hectares. [6]
Pursuant to Executive Order No. 405,[7] Landbank made a valuation of the land and determined
that only 125.4704 hectares of the property's 136 hectares were covered by the
Comprehensive Agrarian Reform Program.[8] It valued the covered portion at P3,986,639.57.
[9]
 Landbank then deposited this amount in the name of Eliza.[10]

Eliza rejected Landbank's valuation. Thus, the matter was endorsed to the Office of the
Provincial Agrarian Reform Adjudicator (PARAD) of Quezon II. [11] However, upon Eliza's
manifestation that the amount involved was beyond the jurisdiction of PARAD, the case was
transferred to the Office of RARAD.[12] The Office of RARAD then conducted summary
administrative proceedings pursuant to Section 16(d)[13] of Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988.[14]

On October 3, 2000, Regional Adjudicator Miñas rendered a Decision [15] fixing just

compensation at P8,938,757.72.[16]

Not satisfied with the amount, Landbank filed a Petition for Just Compensation before the
Regional Trial Court, Branch 56, Lucena City, acting as Special Agrarian Court, on November 7,
2000.[17]

On November 9, 2000, Eliza filed a Motion for Execution of Judgment before the Office of
Regional Adjudicator Miñas. This was unsuccessfully opposed by Landbank. [18]

On January 16, 2001, Regional Adjudicator Miñas granted Eliza's motion for execution and
issued an order directing the issuance of a writ of execution. The writ of execution, however,
was returned unsatisfied. Thus, Regional Adjudicator Miñas issued an alias writ of execution
on February 15, 2001. The following day, the DARAB Sheriff issued a Notice of Garnishment
and a Notice of Levy on Personal Property.[19]

Landbank sought from the Special Agrarian Court the quashal of the alias writ of execution
and, in the interim, the issuance of a temporary restraining order against its implementation.
In the Resolution dated March 27, 2001, the Special Agrarian Court denied Landbank's plea as
DARAB had never been impleaded by Landbank as respondent, thereby failing to vest the
Special Agrarian Court with jurisdiction over DARAB.[20]

Unable to obtain relief from the Special Agrarian Court, Landbank, on April 2, 2001, filed before
DARAB a "petition for certiorari pursuant to  paragraph 2, Section 3, Rule VIII of the [1994]
DARAB New Rules of Procedure."[21] It ascribed "grave abuse of discretion amounting to lack
or in excess of jurisdiction"[22] on the part of Regional Adjudicator Miñas in issuing the
January 16, 2001 Order and the February 15, 2001 Alias Writ of Execution. [23]

In the Resolution[24] dated May 12, 2006, DARAB granted Land Bank's petition for certiorari
and "annulled" the January 16, 2001 Order and the February 15, 2001 Alias Writ of Execution:

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Order dated 16
January 2001 and an Alias Writ of Execution dated 15 February 2001 pursuant to the Decision
in DARAB Case No. V-0412-0339-98 dated 03 October 2000 is hereby ANNULLED and herein
public respondent is hereby ordered to withdraw the same.

SO ORDERED.[25]
DARAB faulted Regional Adjudicator Miñas for relying on Rule XIV, Section 1 of the 1994
DARAB New Rules of Procedure (1994 Rules),[26] which allows for 15 days for petitions for
certiorari from DARAB rulings involving agrarian disputes to be brought to the Court of
Appeals, in concluding that her October 3, 2000 Decision had attained finality. It noted that
she should have instead relied on Rule XIII, Section 11[27] regarding the specific course of
relief from adjudicators' decisions on just compensation or valuation cases. [28]

Petitioners[29] then filed a Petition for Certiorari and Prohibition under Rule 65 of the 1997
Rules of Civil Procedure before the Court of Appeals alleging that DARAB exceeded its
authority when it granted Landbank's Petition for Certiorari under Rule VIII, Section 3 of the
1994 Rules.[30]

In its assailed July 23, 2012 Decision,[31] the Court of Appeals held that DARAB's actions were
sustained by its general "supervisory authority" and appellate jurisdiction over rulings of
RARADs and PARADs.[32]

In its assailed January 9, 2013 Resolution, the Court of Appeals denied petitioners' Motion for
Reconsideration.[33]

Hence, the present Petition was filed.

For resolution is the issue of whether it was proper for respondent DARAB to issue its May 12,
2006 Resolution, which granted respondent Landbank's "petition for certiorari pursuant to
paragraph 2, Section 3, Rule VIII of the [1994] DARAB New Rules of Procedure." [34]

It was not.

Jurisprudence has settled that DARAB possesses no power to issue writs of certiorari.

This Court's 2005 Decision in Department of Agrarian Reform Adjudication Board v.

Lubrica[35] concerned a controversy over the amount of just compensation due to a landowner,
which was initially brought before RARAD. RARAD decided in favor of the landowner and
ordered Landbank to pay an amount that was greater than its initial valuation. [36] Landbank
then filed a petition for just compensation before the Regional Trial Court, acting as a Special
Agrarian Court,[37] This petition was dismissed as Landbank failed to timely pay docket fees.
[38]
 RARAD then considered its ruling on the amount of just compensation final and executory,
and issued a writ of execution.[39] Landbank filed a Petition for Certiorari  before DARAB,
under Rule VIII, Section 3 of its 1994 Rules.[40] DARAB ruled for Landbank and prevented the
Regional Adjudicator from implementing her ruling.[41] This prompted the landowner to file a
Petition for Prohibition before the Court of Appeals, asking that DARAB be enjoined from
proceeding with the case, as it did not have jurisdiction over special civil actions
for certiorari.[42] The Court of Appeals ruled that DARAB had no jurisdiction over petitions
for certiorari.[43]

This Court sustained the ruling of the Court of Appeals. In doing so, this Court emphasized that
jurisdiction over the subject matter must be provided by law. It noted that there was no law
that vested DARAB with jurisdiction over petitions for certiorari.  Rather than finding
constitutional or statutory basis, DARAB's supposed certiorari  power was provided only by
its own rules of procedure:

Jurisdiction, or the legal power to hear and determine a cause or causes of action, must exist
as a matter of law. It is settled that the authority to issue writs of certiorari, prohibition, and
mandamus involves the exercise of original jurisdiction which must be expressly conferred by
the Constitution or by law. It is never derived by implication. Indeed, while the power to issue
the writ of certiorari is in some instance conferred on all courts by constitutional or statutory
provisions, ordinarily, the particular courts which have such power are expressly designated.

....

In general, the quantum of judicial or quasi-judicial powers which an administrative agency

may exercise is defined in the enabling act of such agency. In other words, the extent to
which an administrative entity may exercise such powers depends largely, if not wholly, on
the provisions of the statute creating or empowering such agency. The grant of original
jurisdiction on a quasi-judicial agency is not implied. There is no question that the legislative
grant of adjudicatory powers upon the DAR, as in all other quasi-judicial agencies, bodies and
tribunals, is in the nature of a limited and special jurisdiction, that is, the authority to hear and
determine a class of cases within the DAR's competence and field of expertise. In conferring
adjudicatory powers and functions on the DAR, the legislature could not have intended to
create a regular court of justice out of the DARAB, equipped with all the vast powers inherent
in the exercise of its jurisdiction. The DARAB is only a quasi-judicial body, whose limited
jurisdiction does not include authority over petitions for certiorari, in the absence of an
express grant in R.A. No. 6657, E.O. No. 229 and E.O. No. 129-A. [44] (Citations omitted)

This Court calibrates the pronouncements made in Department of Agrarian Reform

Adjudication Board v. Lubrica.  It is true that the lack of an express constitutional or statutory
grant of jurisdiction disables DARAB  from exercising certiorari  powers. Apart from this,
however, is a more fundamental reason for DARAB's disability.

As an administrative agency exercising quasi-judicial but not consummate judicial power,

DARAB is inherently incapable of issuing writs of certiorari.  This is not merely a matter of
statutorily stipulated competence but a question that hearkens to the separation of
government's tripartite powers: executive, legislative, and judicial. [45]

II

Conceived in England, transplanted into our jurisdiction during American occupation, and
presently existing under the 1987 Constitution, the remedy of the writ of certiorari was and
remains a means for superior judicial  bodies to undo the excesses of inferior tribunals.

The writ of certiorari  was a prerogative writ "issued by the King by virtue of his position as
fountain of justice and supreme head of the whole judicial administration." [46]

The King of England was considered the "supreme head of the nation with power over life,
limb, and property."[47] However, this status did not initially give him the absolute power to
pronounce judgment.[48] By the tradition carried over in the transition of Anglo-Saxon
chieftains "from the ducal to the royal dignity,"[49] the power to pronounce judgment was
reserved to the members of the community themselves, "in accordance with the Teutonic
institution of popular courts."[50] The power that the King held was the appointment of
persons, called sheriffs, "who[,] as royal representatives[,] called the popular courts together;
to see that justice was rendered in case of its denial; personally to judge those powerful
litigants who could not be controlled by the popular courts; and to execute or have executed
the sentences of the courts."[51]

Despite these limitations on his right to pronounce judgment, the King reserved the power to
decide on certain cases: first, those which affected the crown, such as criminal cases for
violation of the King's peace; and second, cases involving the revenue. The King and his
advisers, known as the Curia Regis or the King's Council, decided these cases. Its members
were later on referred to as "justices" with a select member being referred to as the "justitiar"
or chief justice.[52]

Over time, the ways of popular courts—grounded as they were in custom, rather than on
standardized mechanisms—and evidence of sheriffs' partiality required the intervention of the
King's Council, in order that cases may be "decided by such new methods as the wisdom of
the King and his counsellors might invent."[53] Thus, the King's council began to issue writs, to
serve as "expedients by which the jus honorarium  of the King as fountain of justice was
enabled to remedy the defects of the jus civile  or commune  as applied in the local popular
courts."[54]

In 1178, King Henry II realized that "there were too many justices in the Curia Regis to do the
work effectively."[55] Hence, he selected five (5) of his immediate personnel "before whom he
ordered the complaints of the people to be brought."[56] This group of five (5) people became
known as the King's Bench. This was called as such because its members were to sit "in
banco. "[57] In addition to these five (5) members, "the King was supposed always to sit in the
King's Bench,"[58] With the King sitting in it, the King's Bench "was regarded as the highest
court in the land."[59] Even then, the King "reserved the most difficult cases for his own
hearing."[60]

With the subsequent adoption of the Magna Carta, it was settled that "free persons and free
property were to be judged according to the law of the land." [61] To effect this precept, royal
courts were established, such as the Court of Common Pleas, where civil suits were litigated.
[62]

With the King still "reserv[ing] to himself the decision of the most difficult cases," [63] his
complete formal judicial supremacy emerged. "From his office proceeded all the writs which
were formulated by the King and his advisers, and by which actions were
commenced."[64] Over time, and owing to sheer multiplicity, many writs ceased to be "writs of
grace, granted by the King in his good pleasure"[65] but came to be issued to litigants "de
cursu"'or as a matter of course.[66]

While most writs were issued de cursu  and upon proper demand, there remained writs
reserved only for the King's Bench: certiorari, mandamus, prohibition, and quo
warranto.  Consistent with the status of the King's Bench as "the highest court in the
land,"[67] it "controlled the action of the other courts" through these writs. [68] Nevertheless,
the King's Bench issued these writs "only in extraordinary cases . . . and only when some
gross injustice was being done by other authorities."[69] They were used only sparingly and in
the most urgent of circumstances: "It remained the function of the King, through his court of
King's Bench, to [be the] judge of the necessity for their issue, and they accordingly came to
be known as prerogative writs."[70]

Spouses Delos Santos v. Metropolitan Bank and Trust Company[71]  recounted the purposes of
and circumstances under which writs of certiorari were issued by the King's Bench:

In the common law, from which the remedy of certiorari  evolved, the writ of certiorari  was
issued out of Chancery, or the King's Bench, commanding agents or officers of the inferior
courts to return the record of a cause pending before them, so as to give the party more sure
and speedy justice, for the writ would enable the superior court to determine from an
inspection of the record whether the inferior court's judgment was rendered without authority.
The errors were of such a nature that, if allowed to stand, they would result in a substantial
injury to the petitioner to whom no other remedy was available. If the inferior court acted
without authority, the record was then revised and corrected in matters of law. The writ
of certiorari  was limited to cases in which the inferior court was said to be exceeding its
jurisdiction or was not proceeding according to essential requirements of law and would lie
only to review judicial or quasi-judicial acts.[72] (Citations omitted)

The United States of America carried this English tradition. There, historically, only the courts
which "have inherited the jurisdiction of the English court of King's Bench" could issue a writ
of certiorari.[73]

The writ of certiorari,  as a means of judicially rectifying a jurisdictional error, was adopted
by the Philippines from the California Code of Civil Procedure. [74] Our 1901 Code of Civil
Procedure provided:

Section 220. Final Proceedings in Certiorari.  — When the proceedings complained of have

been fully certified, the court shall hear the parties and determine whether the inferior
tribunal, Board, or officer has regularly pursued its authority; and if it finds that such inferior
tribunal, Board, or officer has not regularly pursued its authority, it shall thereupon give final
judgment, either affirming, or annulling, or modifying the proceedings below, as the law
requires.

As Spouses Delos Santos v. Metropolitan Bank and Trust Company[75] further explained:

The concept of the remedy of certiorari  in our judicial system remains much the same as it
has been in the common law. In this jurisdiction, however, the exercise of the power to issue
the writ of certiorari  is largely regulated by laying down the instances or situations in the
Rules of Court in which a superior court may issue the writ of certiorari to an inferior court or
officer.[76]

Article VIII, Section 1 of the 1987 Constitution exclusively vests judicial power in this Court
"and in such lower courts as may be established by law." It identifies two (2) dimensions of
judicial power. First is "the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable." Second is these courts' 
same duty "to determine whether or not there has been a grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government."[77]

To effect the second dimension and pursuant to this Court's power to "[promulgate rules
concerning . . . pleading, practice, and procedure in all courts," [78] Rule 65 of the 1997 Rules of
Civil Procedure defines the parameters for availing the writ of certiorari:

SECTION 1.  Petition for certiorari.  — When any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty and praying
that judgment be rendered annulling or modifying the proceedings of such tribunal, board or
officer, and granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution
subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a
sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule
46.

The requisites for the issuance of a writ of certiorari  are settled:

(a) the petition must be directed against a tribunal, Board, or officer exercising judicial or quasi-judicial
functions;

(b) the tribunal, Board, or officer must have acted without or in excess of jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction; and

(c) there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law.
[79]
 (Citation omitted)

The second and third requisites remain consistent with the original, Common Law conception
of certiorari as availing when "the inferior court's judgment was rendered without authority,"
such that it "exceed[ed] its jurisdiction," and only when "no other remedy [is] available." [80]

A lower court or tribunal is deemed to have acted "without jurisdiction" when it decides a
case even if no law gives it the jurisdiction over its subject matter. [81] The decision of a lower
court or tribunal can also be overturned by certiorari  when it acts "in excess of jurisdiction"
or when it was given jurisdiction over the subject matter under the law but it "has
transcended the same or acted without any statutory authority." [82]

"Grave abuse of discretion" has been defined as:

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as
is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power
is exercised in an arbitrary or despotic manner by reason of passion or personal hostility and
must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal
to perform the duty enjoined by or to act at all in contemplation of law.

Grave abuse of discretion refers not merely to palpable errors of jurisdiction; or to violations of
the Constitution, the law and jurisprudence. It refers also to cases in which, for various
reasons, there has been a gross misapprehension of facts.[83] (Citations omitted)

A petition for review on certiorari  under Rule 45 should not be confused with a petition
for certiorari  under Rule 65. The first is a mode of appeal; the latter is an extraordinary
remedy used to correct errors of jurisdiction. It is through the latter that a writ of certiorari  is
issued. Precisely, for the writ to issue, there must be "no appeal, or any plain, speedy and
adequate remedy" available.[84]

III

The second dimension of judicial power under Article VIII, Section 1 of the 1987 Constitution
settles the certiorari  power as an incident of judicial review. Thus, judicial power includes
the power of the courts to declare the acts of the executive and legislative branches of the
government void, when they act beyond the powers conferred to them by law. [85] This second
dimension does not operate independently of, but within the parameters delimited by, the first
dimension.

The first dimension of judicial power under Article VIII, Section 1 of the 1987 Constitution
delimits the subject of judicial inquiry, that is, to "actual controversies involving rights which
are legally demandable and enforceable." The exercise of this power, then, is proper only
when a judicial question is raised, as opposed to a matter that is better left to the competence
of the other branches of the government.

Gonzales v. Climax Mining Ltd.[86] explained the concept of a judicial question, provided an

illustration of a controversy that involved a judicial question, and distinguished that example
from another controversy that did not involve a judicial question:

A judicial question is a question that is proper for determination by the courts, as opposed to a
moot question or one properly decided by the executive or legislative branch. A judicial
question is raised when the determination of the question involves the exercise of a judicial
function; that is, the question involves the determination of what the law is and what the legal
rights of the parties are with respect to the matter in controversy.

....

[W]hether the case involves void or voidable contracts is still a judicial question. It may, in
some instances, involve questions of fact especially with regard to the determination of the
circumstances of the execution of the contracts. But the resolution of the validity or voidness
of the contracts remains a legal or judicial question as it requires the exercise of judicial
function. It requires the ascertainment of what laws are applicable to the dispute, the
interpretation and application of those laws, and the rendering of a judgment based
thereon.  Clearly, the dispute is not a mining conflict. It is essentially judicial. The complaint
was not merely for the determination of rights under the mining contracts since the very
validity of those contracts is put in issue.[87] (Emphasis supplied, citations omitted)

The non-judicial "mining conflict" which Gonzales  referenced was explained to be a factual

or technical dispute that was more properly considered an "administrative matter," rather
than a judicial question:

On the other hand, a mining dispute is a dispute involving (a) rights to mining areas, (b)
mineral agreements, FTAAs, or permits, and (c) surface owners, occupants and
claimholders/concessionaires. Under Republic Act No. 7942 (otherwise known as the
Philippine Mining Act of 1995), the Panel of Arbitrators has exclusive and original jurisdiction
to hear and decide these mining disputes. The Court of Appeals, in its questioned decision,
correctly stated that the Panel's jurisdiction is limited only to those mining disputes which
raise questions of fact or matters requiring the application of technological knowledge and
experience.

In Pearson v. Intermediate Appellate Court,  this Court observed that the trend has been to
make the adjudication of mining cases a purely administrative matter. Decisions of the
Supreme Court on mining disputes have recognized a distinction between (1) the primary
powers granted by pertinent provisions of law to the then Secretary of Agriculture and Natural
Resources (and the bureau directors) of an executive or administrative nature, such as
granting of license, permits, lease and contracts, or approving, rejecting, reinstating or
canceling applications, or deciding conflicting applications, and (2) controversies or
disagreements of civil or contractual nature between litigants which are questions of a
judicial nature that may be adjudicated only by the courts of justice. [88] (Citations omitted)

Administrative agencies are created to aid the government in the regulation of the country's
"ramified activities."[89] The creation of these agencies has become necessary because of "the
growing complexity of the modern society."[90] These agencies are considered specialists,
which "can deal with the problems [in their respective fields] with more expertise and
dispatch than can be expected from the legislature or the courts of justice." [91]

Administrative agencies are part of the executive branch of the government. [92] However, due
to their highly specialized nature, they are not only vested executive powers but also with
quasi-legislative and quasi-judicial powers.[93]

Quasi-judicial power is "the power to hear and determine questions of fact  to which the
legislative policy is to apply and to decide in accordance with the standards laid down by the
law itself in enforcing and administering the same law."[94] It is limited to the adjudication of
the rights of the parties that are incidental  to the agency's functions under the law. Its
exercise does not amount to the executive's overreach into or appropriation of actual judicial
competence:

Quasi-judicial or administrative adjudicatory power is the power of the administrative agency

to adjudicate the rights of persons before it. The administrative body exercises its quasi-
judicial power when it performs  in a judicial manner an act which is essentially executive or
administrative in nature, where the power to act in such manner is incidental to or reasonably
necessary for the performance of the executive or administrative duty entrusted to it.
[95]
 (Emphasis supplied)

Quasi-judicial power is vested in administrative agencies because complex issues call for
"technical knowledge and speed in countless controversies which cannot possibly be handled
by regular courts."[96] Congress may, by law, grant administrative agencies the exclusive
original jurisdiction over cases within their competence.[97] Consistent with their specialized
but narrowly limited competencies, the scope of the quasi-judicial power vested in
administrative agencies is delineated in an agency's enabling statute:

In general, the quantum of judicial or quasi-judicial powers which an administrative agency

may exercise is defined in the enabling act of such agency. In other words, the extent to
which an administrative entity may exercise such powers depends largely, if not wholly, on
the provisions of the statute creating or empowering such agency. [98]

The basic nature of the certiorari  power as an incident of judicial review—an exercise which
must be limited to judicial questions that are beyond the competence of administrative
agencies—necessarily means that administrative agencies have no certiorari  powers.

The three (3) branches of our government—the Executive, Legislative, and Judicial branches—
are superior in their respective spheres. Subject to our system of checks and balances, one (1)
branch cannot encroach on the duties and prerogatives of another. The Legislative branch is
tasked with enacting laws;[99] the Executive is responsible for the implementation of laws; and
the Judiciary interprets the Constitution and laws.[100]

Determining whether an act of an officer or state organ exercising judicial or quasi-judicial

powers was made without or in excess of jurisdiction demands an examination of the law
delimiting that officer's or organ's jurisdiction. It is an exercise in legal interpretation. It is an
exercise that only courts, and not administrative agencies, are competent to engage in.

IV

Presidential Proclamation No. 131 instituted then President Corazon C. Aquino's

Comprehensive Agrarian Reform Program. Executive Order Nos. 229 and 129-A [101] put in place
mechanisms for implementing this Program.

Executive Order No. 229 vested the Department of Agrarian Reform with quasi-judicial powers
to resolve agrarian reform cases and incidental powers to punish for contempt and to issue
subpoenas and enforcement writs. It also specified an appeal mechanism for decisions
rendered by this Department:

Section 17. Quasi-Judicial Powers of the DAR.— The DAR is hereby vested with quasi-judicial
powers to determine and adjudicate agrarian reform matters, and shall have exclusive original
jurisdiction over all matters involving implementation of agrarian reform, except those falling
under the exclusive original jurisdiction of the DENR and the Department of Agriculture (DA).
The DAR shall have powers to punish for contempt arid to issue subpoena, subpoena duces
tecum  and writs to enforce its orders or decisions.

The decisions of the DAR may, in proper cases, be appealed to the Regional Trial Courts but
shall be immediately executory notwithstanding such appeal.

Executive Order No. 129-A created DARAB, which was tasked to "assume the powers and
functions with respect to the adjudication of agrarian reform cases." [102] Section 13 specifies
that the Board's powers may be delegated to the regional offices of the Department, subject to
its rules and regulations:

Section 13. Agrarian Reform Adjudication Board. — There is hereby created an Agrarian
Reform Adjudication Board under the Office of the Secretary. The Board shall be composed of
the Secretary as Chairman, two (2) Undersecretaries as may be designated by the Secretary,
the Assistant Secretary for Legal Affairs, and three (3) others to be appointed by the President
upon the recommendation of the Secretary as members. A Secretariat shall be constituted to
support the Board. The Board shall assume the powers and functions with respect to the
adjudication of agrarian reform cases under Executive Order No. 229 and this Executive Order.
These powers and functions may be delegated to the regional offices of the Department in
accordance with rules and regulations to be promulgated by the Board.

Republic Act No. 6657 or the Comprehensive Agrarian Reform Law of 1988 maintained the
quasi-judicial jurisdiction of the Department of Agrarian Reform:

Section 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive
original jurisdiction over all matters involving the implementation of agrarian reform except
those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources (DENR).

It shall not be bound by technical rules of procedure and evidence but shall proceed to hear
and decide all cases, disputes or controversies in a most expeditious manner, employing all
reasonable means to ascertain the facts of every case in accordance with justice and equity
and the merits of the case. Toward this end, it shall adopt a uniform rule of procedure to
achieve a just, expeditious and inexpensive determination of every action or proceeding
before it.

It shall have the power to summon witnesses, administer oaths, take testimony, require
submission of reports, compel the production of books and documents and answers to
interrogatories and issue subpoena, and subpoena duces tecum, and enforce its writs through
sheriffs or other duly deputized officers. It shall likewise have the power to punish direct and
indirect contempts [sic] in the same manner and subject to the same penalties as provided in
the Rules of Court.

Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or
their organizations in any proceedings before the DAR: Provided, however, That when there
are two or more representatives for any individual or group, the representatives should choose
only one among themselves to represent such party or group before any DAR proceedings.
Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be
immediately executory.

Pursuant to its power to "adopt a uniform, rule of procedure" under Republic Act No. 6657, the
Department of Agrarian Reform, through DARAB, adopted the Revised Rules of Procedure in
1989 (the 1989 Rules). The 1989 Rules were in lieu of "the previous Rules of Procedure
adopted on January 29, 1988, pursuant to Executive Order No. 129-A." [103]

The 1989 Rules delegated DARAB's adjudicatory powers to RARADs and PARADs [104] subject to
its "functional supervision."[105]

The 1989 Rules further provided that the decisions of PARADs and RARADs may be reviewed
by the Board upon a verified petition for review on certiorari.  Rule VIII, Section 3 of these
Rules stated:

Section 3. Totality of Case Assigned. — When a case is assigned to a RARAD or PARAD, any or
all incidents thereto shall be considered assigned to him, and the same shall be disposed of in
the same proceedings to avoid multiplicity of suits or proceedings.

The order or resolution of the Adjudicators on any issue, question, matter or incident raised
before them shall be valid and effective until the hearing shall have been terminated and the
case is decided on the merits, unless modified and reversed by the Board upon a verified
petition for review on certiorari. Such interlocutory orders shall not be the subject of an
appeal.

In 1994, the Department of Agrarian reform adopted new rules of procedure. As with the 1989
Rules, the 1994 Rules maintained that decisions of RARADs and PARADs were reviewable by
the Board upon a verified petition for certiorari,  which must have been preceded by the filing
of a motion for reconsideration. Rule VIII, Section 3 of these Rules stated:

SECTION 3. Totality of Case Assigned. — When a case is assigned to an Adjudicator, any or all
incidents thereto shall be considered assigned to him, and the same shall be disposed of in
the same proceedings to avoid multiplicity of suits or proceedings.

The order or resolution of the Adjudicator on any issue, question, matter or incident raised
before them shall be valid and effective until the hearing shall have been terminated and the
case is decided on the merits, unless modified and reversed by the Board upon a verified
petition for certiorari which cannot be entertained without filing a motion for reconsideration
with the Adjudicator a quo within five (5) days from receipt of the order, subject of the
petition. Such interlocutory order shall not be the subject of an appeal.

In 2003 the Department of Agrarian Reform adopted new rules of procedure (the 2003 Rules)
and again in 2009 (the 2009 Rules). Unlike the 1989 and 1994 Rules, the 2003 and 2009 Rules
no longer made reference to certiorari  as the Board's vehicle for reviewing decisions of
RARADs and PARADs. Instead, they merely stated that, in pursuit of its appellate jurisdiction,
the Board has the power to "review, reverse, modify, alter, or affirm resolutions, orders and
decisions of the Adjudicators."[106]

The DARAB May 12, 2006 Resolution subject of the present appeal, which gave rise to the
assailed Court of Appeals July 23, 2012 Decision, was issued in response to a pleading
specifically denominated as a "petition for certiorari" by respondent Landbank:

This is a petition for certiorari pursuant to paragraph 2, Section 3, Rule VIII of the DARAB New
Rules of Procedure seeking to annul and set aside the Order dated January 16, 2001 (sic) as
well as the Alias Writ of Execution dated February 15, 2000 issued by respondent RARAD
Miñas.[107]

In conformity with the relief sought by Landbank's petition for certiorari,  the DARAB May 12,
2006 Resolution "annulled" the January 16, 2001 Order and the February 15, 2001 Alias Writ of
Execution issued by Regional Adjudicator Miñas:

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Order dated 16
January 2001 and an Alias Writ of Execution dated 15 February 2001 pursuant to the Decision
in DARAB Case No. V-0412-0339-98 dated 03 October 2000 is hereby ANNULLED and herein
public respondent is hereby ordered to withdraw the same.

SO ORDERED.[108]

In its assailed July 23, 2012 Decision, the Court of Appeals justified DARAB's favorable action
on Landbank's petition for certiorari  by referencing DARAB's appellate jurisdiction over and
supervision of RARADs:

In Department of Agrarian Reform Adjudication Board vs. Court of Appeals,  the Supreme
Court observed, based on the provisions aforecited, that:

... the DAR's exclusive original jurisdiction (as set forth in Section 50 of the CARL) is exercised
through hierarchically arranged agencies, namely, the DARAB, RARAD and PARAD. The latter
two exercise "delegated authority," while the first exercises appellate jurisdiction over
resolutions, orders, decisions and other dispositions of the RARAD and the PARAD.

In other words, respondent DARAB which has appellate jurisdiction over the resolutions and
orders of RARAD and PARAD acted within the ambit of law when it annulled the highly
irregular orders of the regional adjudicator allowing the issuance of a writ of execution for the
purpose of enforcing the latter's October 3, 2000 Decision notwithstanding the glaring fact
that the same has not yet become final and executory in view of [Landbank]'s appeal to the
Special Agrarian Court in Lucena concerning the issue on the determination of the correct
value of the just compensation of the subject property. The Supreme Court recognizes the
supervisory authority of the DARAB over its delegates, namely, the RARADs and PARADs. [109]
The Court of Appeals may have been correct in noting that DARAB has supervisory authority
over RARADs, but it was mistaken in using it as basis for sanctioning DARAB's exercise
of certiorari  powers.

In Department of Agrarian Reform Adjudication Board v. Lubrica, [110] DARAB similarly pleaded

its authority over and supervision of RARADs as crafting an exception to the need for an
express constitutional or statutory grant of jurisdiction. This Court rebuffed DARAB's
reasoning:

DARAB takes exception to the general rule that jurisdiction over special civil actions must be
expressly conferred by law before a court or tribunal can take cognizance thereof. It believes
that this principle is applicable only in cases where the officials/entities contemplated to be
subject thereof are not within the administrative power/competence, or in any manner under
the control or supervision, of the issuing authority.

This Court is not persuaded. The function of a writ of certiorari is to keep an inferior court
within the bounds of its jurisdiction or to prevent it from committing such a grave abuse of
discretion amounting to excess of jurisdiction. In the instant case, the RARAD issued the order
of finality and the writ of execution upon the belief that its decision had become final and
executory, as authorized under Section 1, Rule XII of the DARAB Rules of Procedure. It is
worth noting that in its petition, DARAB maintains that in preventing the RARAD from
implementing its decision, it merely "exercised its residual power of supervision, to insure
that the RARAD acted within the bounds of delegated authority and/or prevent/avoid her from
committing grave and serious disservice to the Program." DARAB's action, therefore, is a
rectification of what it perceived as an abuse of the RARAD's jurisdiction. By its own
admission, DARAB took upon itself the power to correct errors of jurisdiction which is
ordinarily lodged with the regular courts by virtue of express constitutional grant or legislative
enactments.

This Court recognizes the supervisory authority of the DARAB over its delegates, namely, the
RARADs and PARADs, but the same should be exercised within the context of administrative
supervision and/or control. In the event that the RARADs or PARADs act beyond its
adjudicatory functions, nothing prevents the aggrieved party from availing of the extraordinary
remedy of certiorari, which is ordinarily within the jurisdiction of the regular courts.

That the statutes allowed the DARAB to adopt its own rules of procedure does not permit it
with unbridled discretion to grant itself jurisdiction ordinarily conferred only by the
Constitution or by law. Procedure, as distinguished from jurisdiction, is the means by which
the power or authority of a court to hear and decide a class of cases is put into action. Rules
of procedure are remedial in nature and not substantive. They cover only rules on pleadings
and practice.[111] (Citations omitted)

DARAB's reasoning failed to impress then; the same reasoning fails to impress now.

Not only are mere procedural rules incapable of supplanting a constitutional or statutory grant
of jurisdiction, no amount of textual wrangling negates the basic truth that DARAB is an
administrative agency belonging to the Executive, and not to the Judicial branch, of our
government.

Determining whether an action was made without or in excess of jurisdiction or with grave
abuse of discretion is a judicial question. In a petition for certiorari where these issues are
raised, the public officers or state organs exercising judicial or quasi-judicial powers are
impleaded as respondents. They themselves become party-litigants and it is their own legal
rights that are the subject of adjudication. A consideration of law is impelled to delineate their
proper rights and prerogatives. The controversy that ensues is inexorably beyond the
competence of administrative agencies. When presented with such a controversy, an
administrative agency must recuse and yield to courts of law.

Well-meaning intentions at rectifying a perceived breach of authority cannot be cured by an

actual breach of authority. As It was in DARAB v. Lubrica,  so it is true here that DARAB's
avowed good intentions cannot justify its exercise of powers that were never meant for it to
exercise.

DARAB's exercise of the innately judicial certiorari  power is an executive encroachment into

the judiciary. It violates the separation of powers; it is unconstitutional.

With or without a law enabling it, DARAB has no power to rule on jurisdictional controversies
via petitions for certiorari.  DARAB's self-serving grant to itself of the power to issue writs of
certiorari in the 1994 DARAB New Rules of Procedure is itself a grave abuse of discretion
amounting to lack or excess of jurisdiction. It must be annulled for running afoul of the
Constitution.

VI

It should suffice, to settle the present controversy, for us to state, as this Court did, that under
no circumstance may an administrative agency arrogate unto itself the power of judicial
review and to take cognizance of petitions for certiorari.  However, it does not also escape
our attention that the predicament that respondent Landbank finds itself in is no less the
result of its own unrefined legal maneuver.

Landbank rendered ineffectual its own immediate recourse to the Special Agrarian Court.
Before the Special Agrarian Court, it sought to restrain the looming actions of DARAB, acting
through its RARAD, to enforce a judgment. Despite this, it still failed to implead DARAB as a
respondent. Landbank's own oversight left the Special Agrarian Court with no reasonable
recourse but the denial of Landbank's plea.

Failing at obtaining relief from the Special Agrarian Court, Landbank sought relief from an
entirely different forum. Strikingly, this new forum is the same entity that it should have first
impleaded as an adverse party before the Special Agrarian Court. Before this forum, it would
then seek the issuance of what this Court long ago declared in Lubrica  to be an unfounded—
and what this Court is affirming now to be an unconstitutional—relief.

In keeping with our most basic constitutional principles and as a consequence of Landbank's
own failings, this Court must sustain the petitioners' position.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed July 23, 2012
Decision and January 9, 2013 Resolution of the Court of Appeals in CA-G.R. SP No. 113235
are REVERSED and SET ASIDE. Respondent Department of Agrarian Reform Adjudication
Board is ordered to dismiss the Petition for Certiorari,  docketed as DSCA 0219, filed before it
by respondent Land Bank of the Philippines.

SO ORDERED.

Carpio, (Chairperson), Peralta, Mendoza, and Martires, JJ., concur.

Facts

During the campaign period for the 2016 Presidential Election, then candidate Rodrigo
R. Duterte (Duterte) publicly announced that he would allow the burial of former
President Ferdinand E. Marcos (Marcos) at the Libingan Ng Mga Bayani (LNMB). He won
the May 9, 2016 election, garnering 16,601,997 votes. At noon of June 30, 2016, he
formally assumed his office at the Rizal Hall in the Malacañan Palace.

On August 7, 2016, public respondent Secretary of National Defense Delfin N.

Lorenzana issued a Memorandum to the public respondent Chief of Staff of the Armed
Forces of the Philippines (AFP), General Ricardo R. Visaya, regarding the interment of
Marcos at the LNMB, to wit: ChanRoblesVirtualawlibrary

Subject: Interment of the late Former President Ferdinand Marcos at LNMB

Reference: Verbal Order of President Rodrigo Duterte on July 11, 2016.

In compliance to (sic) the verbal order of the President to implement his election
campaign promise to have the remains of the late former President Ferdinand E. Marcos
be interred at the Libingan ng mga Bayani, kindly undertake all the necessary planning
and preparations to facilitate the coordination of all agencies concerned specially the
provisions for ceremonial and security requirements. Coordinate closely with the Marcos
family regarding the date of interment and the transport of the late former President's
remains from Ilocos Norte to the LNMB.

The overall OPR for this activity will [be] the PVAO since the LNMB is under its
supervision and administration. PVAO shall designate the focal person for this activity
who shall be the overall overseer of the event.

Submit your Implementing Plan to my office as soon as possible.1 chanroblesvirtuallawlibrary

On August 9, 2016, respondent AFP Rear Admiral Ernesto C. Enriquez issued the
following directives to the Philippine Army (PA) Commanding General: ChanRoblesVirtualawlibrary

SUBJECT:     Funeral Honors and Service

TO:              Commanding General, Philippine Army

                   Headquarters, Philippine Army
                   Fort Bonifacio, Taguig City
                   Attn: Assistant Chief of Staff for RRA, G9

1. Pursuant to paragraph 2b, SOP Number 8, GHQ, AFP dated 14 July 1992,
provide services, honors and other courtesies for the late Former
President Ferdinand E. Marcos as indicated:

    [x]
chanRoblesvirtualLawlibrary Vigil - Provide vigil
    [x] Bugler/Drummer
    [x] Firing Party
    [x] Military Host/Pallbearers
    [x] Escort and Transportation
    [x] Arrival/Departure Honors

2. His remains lie in state at Ilocos Norte

3. Interment will take place at the Libingan ng mga Bayani, Ft.

Bonifacio, Taguig City. Date: TBAL.

4. Provide all necessary military honors accorded for a President

5. POC: Administrator, PVAO BY COMMAND OF GENERAL VISAYA2

Dissatisfied with the foregoing issuance, the following were filed by petitioners:

1. Petition for Certiorari and Prohibition3 filed by Saturnino Ocampo and several

chanRoblesvirtualLawlibrary

others,4 in their capacities as human rights advocates or human rights violations victims
as defined under Section 3 (c) of Republic Act (R.A.) No. 10368 (Human Rights Victims
Reparation and Recognition Act of 2013).

2. Petition for Certiorari-in-Intervention5 filed by Rene A.V. Saguisag, Sr. and his

son,6 as members of the Bar and human rights lawyers, and his grandchild.7 chanrobleslaw

3. Petition for Prohibition8 filed by Representative Edcel C. Lagman, in his personal

capacity, as member of the House of Representatives and as Honorary Chairperson of
Families of Victims of Involuntary Disappearance (FIND), a duly-registered corporation
and organization of victims and families of enforced disappearance, mostly during the
martial law regime of the former President Marcos, and several others,9 in their official
capacities as duly-elected Congressmen of the House of Representatives of the
Philippines.

4. Petition for Prohibition10 filed by Loretta Ann Pargas-Rosales, former Chairperson of

the Commission on Human Rights, and several others,11 suing as victims of State-
sanctioned human rights violations during the martial law regime of Marcos.

5. Petition for Mandamus and Prohibition12 filed by Heherson T. Alvarez, former Senator

of the Republic of the Philippines, who fought to oust the dictatorship of Marcos, and
several others,13 as concerned Filipino citizens and taxpayers.
6. Petition for Certiorari and Prohibition14 filed by Zaira Patricia B. Baniaga and several
others,15 as concerned Filipino citizens and taxpayers.

7. Petition for Certiorari and Prohibition16 filed by Algamar A. Latiph, former

Chairperson of the Regional Human Rights Commission, Autonomous Region in Muslim
Mindanao, by himself and on behalf of the Moro17 who are victims of human rights
during the martial law regime of Marcos.

8. Petition for Certiorari and Prohibition18 filed by Leila M. De Lima as member of the

Senate of the Republic of the Philippines, public official and concerned citizen.

Issues

Procedural

1. Whether President Duterte's determination to have the remains of Marcos interred at

the LNMB poses a justiciable controversy.

2. Whether petitioners have locus standi to file the instant petitions.

3. Whether petitioners violated the doctrines of exhaustion of administrative remedies

and hierarchy of courts.

Substantive

1. Whether the respondents Secretary of National Defense and AFP Rear Admiral
committed grave abuse of discretion, amounting to lack or excess of jurisdiction, when
they issued the assailed memorandum and directive in compliance with the verbal order
of President Duterte to implement his election campaign promise to have the remains of
Marcos interred at the LNMB.

2. Whether the Issuance and implementation of the assailed memorandum and

directive violate the Constitution, domestic and international laws, particularly:

(a) Sections 2, 11, 13, 23, 26, 27 and 28 of Article II, Section 1 of Article III, Section
chanRoblesvirtualLawlibrary

17 of Article VII, Section 1 of Article XI, Section 3(2) of Article XIV, and Section 26 of
Article XVIII of the 1987 Constitution;

(b) R.A. No. 289;

(c) R.A. No. 10368;

(d) AFP Regulation G 161-375 dated September 11, 2000;

(e) The International Covenant on Civil and Political Rights;

(f) The "Basic Principles and Guidelines on the Right to a Remedy and Reparation for
Victims of Gross Violations of International Human Rights Law and Serious Violations of
International Humanitarian Law" of the United Nations (U.N.) General Assembly; and  cralawlawlibrary

(g) The "Updated Set of Principles for Protection and Promotion of Human Rights
through Action to Combat Impunity" of the U.N. Economic and Social Council;

3. Whether historical facts, laws enacted to recover ill-gotten wealth from the Marcoses
and their cronies, and the pronouncements of the Court on the Marcos regime have
nullified his entitlement as a soldier and former President to interment at the LNMB.

4. Whether the Marcos family is deemed to have waived the burial of the remains of
former President Marcos at the LNMB after they entered into an agreement with the
Government of the Republic of the Philippines as to the conditions and procedures by
which his remains shall be brought back to and interred in the Philippines.

Opinion

The petitions must be dismissed.

Procedural Grounds

Justiciable controversy

It is well settled that no question involving the constitutionality or validity of a law or

governmental act may be heard and decided by the Court unless the following
requisites for judicial inquiry are present: (a) there must be an actual case or
controversy calling for the exercise of judicial power; (b) the person challenging the act
must have the standing to question the validity of the subject act or issuance; (c) the
question of constitutionality must be raised at the earliest opportunity; and (d) the
issue of constitutionality must be the very lis mota of the case.19 In this case, the
absence of the first two requisites, which are the most essential, renders the discussion
of the last two superfluous.20chanrobleslaw

An "actual case or controversy" is one which involves a conflict of legal rights, an

assertion of opposite legal claims, susceptible of judicial resolution as distinguished
from a hypothetical or abstract difference or dispute.21 There must be a contrariety of
legal rights that can be interpreted and enforced on the basis of existing law and
jurisprudence.22 Related to the requisite of an actual case or controversy is the requisite
of "ripeness," which means that something had then been accomplished or performed
by either branch before a court may come into the picture, and the petitioner must
allege the existence of an immediate or threatened injury to itself as a result of the
challenged action.23 Moreover, the limitation on the power of judicial review to actual
cases and controversies carries the assurance that the courts will not intrude into areas
committed to the other branches of government.24 Those areas pertain to questions
which, under the Constitution, are to be decided by the people in their sovereign
capacity, or in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government.25  As they are concerned with
cralawred

questions of policy and issues dependent upon the wisdom, not legality of a particular
measure,26 political questions used to be beyond the ambit of judicial review. However,
the scope of the political question doctrine has been limited by Section 1 of Article VIII
of the 1987 Constitution when it vested in the judiciary the power to determine whether
or not there has been grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government.

The Court agrees with the OSG that President Duterte's decision to have the remains of
Marcos interred at the LNMB involves a political question that is not a justiciable
controversy. In the exercise of his powers under the Constitution and the Executive
Order (E.O.) No. 292 (otherwise known as the Administrative Code of 1987) to allow
the interment of Marcos at the LNMB, which is a land of the public domain devoted for
national military cemetery and military shrine purposes, President Duterte decided a
question of policy based on his wisdom that it shall promote national healing and
forgiveness. There being no taint of grave abuse in the exercise of such discretion, as
discussed below, President Duterte's decision on that political question is outside the
ambit of judicial review.

Locus standi

Defined as a right of appearance in a court of justice on a given question,27locus

standi requires that a party alleges such personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court depends for illumination of difficult constitutional
questions.28 Unless a person has sustained or is in imminent danger of sustaining an
injury as a result of an act complained of, such proper party has no
standing.29 Petitioners, who filed their respective petitions for certiorari, prohibition and
mandamus, in their capacities as citizens, human rights violations victims, legislators,
members of the Bar and taxpayers, have no legal standing to file such petitions
because they failed to show that they have suffered or will suffer direct and personal
injury as a result of the interment of Marcos at the LNMB.

Taxpayers have been allowed to sue where there is a claim that public funds are
illegally disbursed or that public money is being deflected to any improper purpose, or
that public funds are wasted through the enforcement of an invalid or unconstitutional
law.30 In this case, what is essentially being assailed is the wisdom behind the decision
of the President to proceed with the interment of Marcos at the LNMB. As taxpayers,
petitioners merely claim illegal disbursement of public funds, without showing that
Marcos is disqualified to be interred at the LNMB by either express or implied provision
of the Constitution, the laws or jurisprudence.

Petitioners Saguisag, et al.,31 as members of the Bar, are required to allege any direct
or potential injury which the Integrated Bar of the Philippines, as an institution, or its
members may suffer as a consequence of the act complained of.32 Suffice it to state
that the averments in their petition-in-intervention failed to disclose such injury, and
that their interest in this case is too general and shared by other groups, such that their
duty to uphold the rule of law, without more, is inadequate to clothe them with
requisite legal standing.33chanrobleslaw
As concerned citizens, petitioners are also required to substantiate that the issues
raised are of transcendental importance, of overreaching significance to society, or of
paramount public interest.34 In cases involving such issues, the imminence and clarity
of the threat to fundamental constitutional rights outweigh the necessity for
prudence.35 In Marcos v. Manglapus,36 the majority opinion observed that the subject
controversy was of grave national importance, and that the Court's decision would have
a profound effect on the political, economic, and other aspects of national life.
The ponencia explained that the case was in a class by itself, unique and could not
create precedent because it involved a dictator forced out of office and into exile after
causing twenty years of political, economic and social havoc in the country and who,
within the short space of three years (from 1986), sought to return to the Philippines to
die.

At this point in time, the interment of Marcos at a cemetery originally established as a

national military cemetery and declared a national shrine would have no profound effect
on the political, economic, and other aspects of our national life considering that more
than twenty-seven (27) years since his death and thirty (30) years after his ouster
have already passed. Significantly, petitioners failed to demonstrate a clear and
imminent threat to their fundamental constitutional rights.

As human rights violations victims during the Martial Law regime, some of petitioners
decry re-traumatization, historical revisionism, and disregard of their state recognition
as heroes. Petitioners' argument is founded on the wrong premise that the LNMB is the
National Pantheon intended by law to perpetuate the memory of all Presidents, national
heroes and patriots. The history of the LNMB, as will be discussed further, reveals its
nature and purpose as a national military cemetery and national shrine, under the
administration of the AFP.

Apart from being concerned citizens and taxpayers, petitioners Senator De Lima, and
Congressman Lagman, et al.37 come before the Court as legislators suing to defend the
Constitution and to protect appropriated public funds from being used unlawfully. In the
absence of a clear showing of any direct injury to their person or the institution to
which they belong, their standing as members of the Congress cannot be
upheld.38 They do not specifically claim that the official actions complained of, i.e., the
memorandum of the Secretary of National Defense and the directive of the AFP Chief of
Staff regarding the interment of Marcos at the LNMB, encroach on their prerogatives as
legislators.39
chanrobleslaw

Exhaustion of Administrative Remedies

Petitioners violated the doctrines of exhaustion of administrative remedies and

hierarchy of courts. Under the doctrine of exhaustion of administrative remedies, before
a party is allowed to seek the intervention of the court, one should have availed first of
all the means of administrative processes available.40 If resort to a remedy within the
administrative machinery can still be made by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his jurisdiction,
then such remedy should be exhausted first before the court's judicial power can be
sought.41 For reasons of comity and convenience, courts of justice shy away from a
dispute until the system of administrative redress has been completed and complied
with, so as to give the administrative agency concerned every opportunity to correct its
error and dispose of the case.42 While there are exceptions43 to the doctrine of
exhaustion of administrative remedies, petitioners failed to prove the presence of any
of those exceptions.

Contrary to their claim of lack of plain, speedy, adequate remedy in the ordinary course
of law, petitioners should be faulted for failing to seek reconsideration of the assailed
memorandum and directive before the Secretary of National Defense. The Secretary of
National Defense should be given opportunity to correct himself, if warranted,
considering that AFP Regulations G 161-375 was issued upon his order. Questions on
the implementation and interpretation thereof demand the exercise of sound
administrative discretion, requiring the special knowledge, experience and services of
his office to determine technical and intricate matters of fact. If petitioners would still
be dissatisfied with the decision of the Secretary, they could elevate the matter before
the Office of the President which has control and supervision over the Department of
National Defense (DND).44 chanrobleslaw

Hierarchy of Courts

In the same vein, while direct resort to the Court through petitions for the
extraordinary writs of certiorari, prohibition and mandamus are allowed under
exceptional cases,45 which are lacking in this case, petitioners cannot simply brush
aside the doctrine of hierarchy of courts that requires such petitions to be filed first with
the proper Regional Trial Court (RTC). The RTC is not just a trier of facts, but can also
resolve questions of law in the exercise of its original and concurrent jurisdiction over
petitions for certiorari, prohibition and mandamus, and has the power to issue
restraining order and injunction when proven necessary.

In fine, the petitions at bar should be dismissed on procedural grounds alone. Even if
We decide the case based on the merits, the petitions should still be denied.

Substantive Grounds

There is grave abuse of discretion when an act is (1) done contrary to the Constitution,
the law or jurisprudence or (2) executed whimsically, capriciously or arbitrarily, out of
malice, ill will or personal bias.46 None is present in this case.

I
The President's decision to bury Marcos at the LNMB is in accordance with the
Constitution, the law or jurisprudence

Petitioners argue that the burial of Marcos at the LNMB should not be allowed because it
has the effect of not just rewriting history as to the Filipino people's act of revolting
against an authoritarian ruler but also condoning the abuses committed during the
Martial Law, thereby violating the letter and spirit of the 1987 Constitution, which is a
"post-dictatorship charter" and a "human rights constitution." For them, the ratification
of the Constitution serves as a clear condemnation of Marcos' alleged "heroism." To
support their case, petitioners invoke Sections 2,47 11,48 13,49 23,50 26,51 2752 and
2853 of Article II, Sec. 17 of Art. VII,54 Sec. 3(2) of Art. XIV,55 Sec. 1 of Art. XI,56 and
Sec. 26 of Art. XVIII57 of the Constitution.

There is no merit to the contention.

As the Office of the Solicitor General (OSG) logically reasoned out, while the
Constitution is a product of our collective history as a people, its entirety should not be
interpreted as providing guiding principles to just about anything remotely related to
the Martial Law period such as the proposed Marcos burial at the LNMB.

Tañada v. Angara58 already ruled that the provisions in Article II of the Constitution are
not self-executing. Thus: ChanRoblesVirtualawlibrary

By its very title, Article II of the Constitution is a "declaration of principles and state
policies." The counterpart of this article in the 1935 Constitution is called the "basic
political creed of the nation" by Dean Vicente Sinco. These principles in Article II are not
intended to be self executing principles ready for enforcement through the courts. They
are used by the judiciary as aids or as guides in the exercise of its power of judicial
review, and by the legislature in its enactment of laws. As held in the leading case
of Kilosbayan, Incorporated vs. Morato, the principles and state policies enumerated in
Article II x x x are not "self-executing provisions, the disregard of which can give rise to
a cause of action in the courts. They do not embody judicially enforceable constitutional
rights but guidelines for legislation."

In the same light, we held in Basco vs. Pagcor that broad constitutional principles need
legislative enactments to implement them x x x.

x x x

The reasons for denying a cause of action to an alleged infringement of broad

constitutional principles are sourced from basic considerations of due process and the
lack of judicial authority to wade "into the uncharted ocean of social and economic
policy making."59 chanroblesvirtuallawlibrary

In the same vein, Sec. 1 of Art. XI of the Constitution is not a self-executing provision
considering that a law should be passed by the Congress to clearly define and
effectuate the principle embodied therein. As a matter of fact, pursuant thereto,
Congress enacted R.A. No. 6713 ("Code of Conduct and Ethical Standards for Public
Officials and Employees"), R.A. No. 6770 ("The Ombudsman Act of 1989"), R.A. No.
7080 (An Act Defining and Penalizing the Crime of Plunder), and Republic Act No. 9485
("Anti-Red Tape Act of 2007"). To complement these statutes, the Executive Branch has
issued various orders, memoranda, and instructions relative to the norms of
behavior/code of conduct/ethical standards of officials and employees; workflow
charts/public transactions; rules and policies on gifts and benefits; whistle blowing and
reporting; and client feedback program.

Petitioners' reliance on Sec. 3(2) of Art. XIV and Sec. 26 of Art. XVIII of the
Constitution is also misplaced. Sec. 3(2) of Art. XIV refers to the constitutional duty of
educational institutions in teaching the values of patriotism and nationalism and respect
for human rights, while Sec. 26 of Art. XVIII is a transitory provision on sequestration
or freeze orders in relation to the recovery of Marcos' ill-gotten wealth. Clearly, with
respect to these provisions, there is no direct or indirect prohibition to Marcos'
interment at the LNMB.

The second sentence of Sec. 17 of Art. VII pertaining to the duty of the President to
"ensure that the laws be faithfully executed," which is identical to Sec. 1, Title I, Book
III of the Administrative Code of 1987,60 is likewise not violated by public respondents.
Being the Chief Executive, the President represents the government as a whole and
sees to it that all laws are enforced by the officials and employees of his or her
department.61 Under the Faithful Execution Clause, the President has the power to take
"necessary and proper steps" to carry into execution the law.62 The mandate is self-
executory by virtue of its being inherently executive in nature and is intimately related
to the other executive functions.63 It is best construed as an imposed obligation, not a
separate grant of power.64 The provision simply underscores the rule of law and,
corollarily, the cardinal principle that the President is not above the laws but is obliged
to obey and execute them.65 chanrobleslaw

Consistent with President Duterte's mandate under Sec. 17, Art. VII of the Constitution,
the burial of Marcos at the LNMB does not contravene R.A. No. 289, R.A. No. 10368,
and the international human rights laws cited by petitioners.

A. On R.A. No. 28966 chanrobleslaw

For the perpetuation of their memory and for the inspiration and emulation of this
generation and of generations still unborn, R.A. No. 289 authorized the construction of
a National Pantheon as the burial place of the mortal remains of all the Presidents of
the Philippines, national heroes and patriots.67 It also provided for the creation of a
Board on National Pantheon to implement the law.68 chanrobleslaw

On May 12, 1953, President Elpidio R. Quirino approved the site of the National
Pantheon at East Avenue, Quezon City.69 On December 23, 1953, he issued
Proclamation No. 431 to formally "withdraw from sale or settlement and reserve as a
site for the construction of the National Pantheon a certain parcel of land located in
Quezon City." However, on July 5, 1954, President Magsaysay issued Proclamation No.
42 revoking Proclamation Nos. 422 and 431, both series of 1953, and reserving the
parcels of land embraced therein for national park purposes to be known as Quezon
Memorial Park.

It is asserted that Sec. 1 of R.A. No 289 provides for the legal standard by which a
person's mortal remains may be interred at the LNMB, and that AFP Regulations G 161-
375 merely implements the law and should not violate its spirit and intent. Petitioners
claim that it is known, both here and abroad, that Marcos' acts and deed - the gross
human rights violations, the massive corruption and plunder of government coffers, and
his military record that is fraught with myths, factual inconsistencies, and lies - are
neither worthy of perpetuation in our memory nor serve as a source of inspiration and
emulation of the present and future generations. They maintain that public respondents
are not members of the Board on National Pantheon, which is authorized by the law to
cause the burial at the LNMB of the deceased Presidents of the Philippines, national
heroes, and patriots.

Petitioners are mistaken. Both in their pleadings and during the oral arguments, they
miserably failed to provide legal and historical bases as to their supposition that the
LNMB and the National Pantheon are one and the same. This is not at all unexpected
because the LNMB is distinct and separate from the burial place envisioned in R.A. No
289. The parcel of land subject matter of President Quirino's Proclamation No. 431,
which was later on revoked by President Magsaysay's Proclamation No. 42, is different
from that covered by Marcos' Proclamation No. 208. The National Pantheon does not
exist at present. To date, the Congress has deemed it wise not to appropriate any funds
for its construction or the creation of the Board on National Pantheon. This is indicative
of the legislative will not to pursue, at the moment, the establishment of a singular
interment place for the mortal remains of all Presidents of the Philippines, national
heroes, and patriots. Perhaps, the Manila North Cemetery, the Manila South Cemetery,
and other equally distinguished private cemeteries already serve the noble purpose but
without cost to the limited funds of the government.

Even if the Court treats R.A. No. 289 as relevant to the issue, still, petitioners'
allegations must fail. To apply the standard that the LNMB is reserved only for the
"decent and the brave" or "hero" would be violative of public policy as it will put into
question the validity of the burial of each and every mortal remains resting therein, and
infringe upon the principle of separation of powers since the allocation of plots at the
LNMB is based on the grant of authority to the President under existing laws and
regulations. Also, the Court shares the view of the OSG that the proposed interment is
not equivalent to the consecration of Marcos' mortal remains. The act in itself does not
confer upon him the status of a "hero." Despite its name, which is actually a misnomer,
the purpose of the LNMB, both from legal and historical perspectives, has neither been
to confer to the people buried there the title of "hero" nor to require that only those
interred therein should be treated as a "hero." Lastly, petitioners' repeated reference to
a "hero's burial" and "state honors," without showing proof as to what kind of burial or
honors that will be accorded to the remains of Marcos, is speculative until the specifics
of the interment have been finalized by public respondents.

B. On R.A. No. 1036870 chanrobleslaw

For petitioners, R.A. No. 10368 modified AFP Regulations G 161-375 by implicitly
disqualifying Marcos' burial at the LNMB because the legislature, which is a co-equal
branch of the government, has statutorily declared his tyranny as a deposed dictator
and has recognized the heroism and sacrifices of the Human Rights Violations Victims
(HRVVs)71 under his regime. They insist that the intended act of public respondents
damages and makes mockery of the mandatory teaching of Martial Law atrocities and
of the lives and sacrifices of its victims. They contend that "reparation" under R.A. No.
10368 is non-judicial in nature but a political action of the State through the Legislative
and Executive branches by providing administrative relief for the compensation,
recognition, and memorialization of human rights victims.

We beg to disagree.

Certainly, R.A. No. 10368 recognizes the heroism and sacrifices of all Filipinos who were
victims of summary execution, torture, enforced or involuntary disappearance, and
other gross human rights violations committed from September 21, 1972 to February
25, 1986. To restore their honor and dignity, the State acknowledges its moral and
legal obligation72 to provide reparation to said victims and/or their families for the
deaths, injuries, sufferings, deprivations and damages they experienced.

In restoring the rights and upholding the dignity of HRVVs, which is part of the right to
an effective remedy, R.A. No. 10368 entitles them to monetary and non-monetary
reparation. Any HRVV qualified under the law73 shall receive a monetary reparation,
which is tax-free and without prejudice to the receipt of any other sum from any other
person or entity in any case involving human rights violations.74 Anent the non-
monetary reparation, the Department of Health (DOH), the Department of Social
Welfare and Development (DSWD), the Department of Education (DepEd), the
Commission on Higher Education (CHED), the Technical Education and Skills
Development Authority (TESDA), and such other government agencies are required to
render the necessary services for the HRVVs and/or their families, as may be
determined by the Human Rights Victims' Claims Board (Board) pursuant to the
provisions of the law.75
chanrobleslaw

Additionally, R.A. No. 10368 requires the recognition of the violations committed
against the HRVVs, regardless of whether they opt to seek reparation or not. This is
manifested by enshrining their names in the Roll of Human Rights Violations Victims
(Roll) prepared by the Board.76 The Roll may be displayed in government agencies
designated by the HRVV Memorial Commission (Commission).77 Also, a
Memorial/Museum/Library shall be established and a compendium of their sacrifices
shall be prepared and may be readily viewed and accessed in the internet.78 The
Commission is created primarily for the establishment, restoration, preservation and
conservation of the Memorial/Museum/ Library/Compendium.79 chanrobleslaw

To memorialize80 the HRVVs, the Implementing Rules and Regulations of R.A. No.

10368 further mandates that: (1) the database prepared by the Board derived from the
processing of claims shall be turned over to the Commission for archival purposes, and
made accessible for the promotion of human rights to all government agencies and
instrumentalities in order to prevent recurrence of similar abuses, encourage continuing
reforms and contribute to ending impunity;81 (2) the lessons learned from Martial Law
atrocities and the lives and sacrifices of HRVVs shall be included in the basic and higher
education curricula, as well as in continuing adult learning, prioritizing those most prone
to commit human rights violations;82 and (3) the Commission shall publish only those
stories of HRVVs who have given prior informed consent.83 chanrobleslaw

This Court cannot subscribe to petitioners' logic that the beneficial provisions of R.A.
No. 10368 are not exclusive as it includes the prohibition on Marcos' burial at the LNMB.
It would be undue to extend the law beyond what it actually contemplates. With its
victim-oriented perspective, our legislators could have easily inserted a provision
specifically proscribing Marcos' interment at the LNMB as a "reparation" for the HRVVs,
but they did not. As it is, the law is silent and should remain to be so. This Court cannot
read into the law what is simply not there. It is irregular, if not unconstitutional, for Us
to presume the legislative will by supplying material details into the law. That would be
tantamount to judicial legislation.
Considering the foregoing, the enforcement of the HRVVs' rights under R.A. No 10368
will surely not be impaired by the interment of Marcos at the LNMB. As opined by the
OSG, the assailed act has no causal connection and legal relation to the law. The
subject memorandum and directive of public respondents do not and cannot interfere
with the statutory powers and functions of the Board and the Commission. More
importantly, the HRVVs' entitlements to the benefits provided for by R.A. No 10368 and
other domestic laws are not curtailed. It must be emphasized that R.A. No. 10368 does
not amend or repeal, whether express or implied, the provisions of the Administrative
Code or AFP Regulations G 161-375: ChanRoblesVirtualawlibrary

It is a well-settled rule of statutory construction that repeals by implication are not

favored. In order to effect a repeal by implication, the later statute must be so
irreconcilably inconsistent and repugnant with the existing law that they cannot be
made to reconcile and stand together. The clearest case possible must be made before
the inference of implied repeal may be drawn, for inconsistency is never presumed.
There must be a showing of repugnance clear and convincing in character. The
language used in the later statute must be such as to render it irreconcilable with what
had been formerly enacted. An inconsistency that falls short of that standard does not
suffice. x x x84 chanroblesvirtuallawlibrary

C. On International Human Rights Laws

Petitioners argue that the burial of Marcos at the LNMB will violate the rights of the
HRVVs to "full" and "effective" reparation, which is provided under the International
Covenant on Civil and Political Rights (ICCPR),85 the Basic Principles and Guidelines on
the Right to a Remedy and Reparation for Victims of Gross Violations of International
Human Rights Law and Serious Violations of International Humanitarian Law 86 adopted
by the U.N. General Assembly on December 16, 2005, and the Updated Set of
Principles for the Protection and Promotion of Human Rights Through Action to Combat
Impunity87 dated February 8, 2005 by the U.N. Economic and Social Council.

We do not think so. The ICCPR,88 as well as the U.N. principles on reparation and to
combat impunity, call for the enactment of legislative measures, establishment of
national programmes, and provision for administrative and judicial recourse, in
accordance with the country's constitutional processes, that are necessary to give effect
to human rights embodied in treaties, covenants and other international laws. The U.N.
principles on reparation expressly states: ChanRoblesVirtualawlibrary

Emphasizing that the Basic Principles and Guidelines contained herein do not entail

new international or domestic legal obligations but identify mechanisms, modalities,
procedures and methods for the implementation of existing legal obligations under
international human rights law and international humanitarian law which are
complementary though different as to their norms[.][Emphasis supplied]
The Philippines is more than compliant with its international obligations. When the
Filipinos regained their democratic institutions after the successful People Power
Revolution that culminated on February 25, 1986, the three branches of the
government have done their fair share to respect, protect and fulfill the country's
human rights obligations, to wit:

chanRoblesvirtualLawlibrary The 1987 Constitution contains provisions that promote and protect human rights
and social justice.

As to judicial remedies, aside from the writs of habeas corpus, amparo,89 and habeas

data,90 the Supreme Court promulgated on March 1, 2007 Administrative Order No. 25-
2007,91 which provides rules on cases involving extra-judicial killings of political
ideologists and members of the media. The provision of the Basic Principles and
Guidelines on the prevention of the victim's re-traumatization applies in the course of
legal and administrative procedures designed to provide justice and reparation.92
chanrobleslaw

On the part of the Executive Branch, it issued a number of administrative and executive
orders. Notable of which are the following:

1. A.O. No. 370 dated December 10, 1997 (Creating the Inter-Agency Coordinating
Committee on Human Rights)

2. E.O. No. 118 dated July 5, 1999 (Providing for the Creation of a National
Committee on the Culture of Peace)

3. E.O. No. 134 dated July 31, 1999 (Declaring August 12, 1999 and Every 12th
Day of August Thereafter as International Humanitarian Law Day)

4. E.O. No. 404 dated January 24, 2005 (Creating the Government of the Republic
of the Philippines Monitoring Committee [GRPMC] on Human Rights and
International Humanitarian Law)

5. A.O. No. 157 dated August 21, 2006 (Creating an Independent Commission to
Address Media and Activist Killings)

6. A.O. No. 163 dated December 8, 2006 (Strengthening and Increasing the
Membership of the Presidential Human Rights Committee, and Expanding Further
the Functions of Said Committee)93 chanrobleslaw

7. A.O. No. 181 dated July 3, 2007 (Directing the Cooperation and Coordination
Between the National Prosecution Service and Other Concerned Agencies of
Government for the Successful Investigation and Prosecution of Political and
Media Killings)

8. A.O. No. 197 dated September 25, 2007 (DND and AFP Coordination with PHRC
Sub-committee on Killings and Disappearances)

9. A.O. No. 211 dated November 26, 2007 (Creating a Task Force Against Political
Violence)

10.A.O. No. 249 dated December 10, 2008 (Further Strengthening Government
Policies, Plans, and Programs for the Effective Promotion and Protection of
Human Rights on the Occasion of the 60th Anniversary of the Universal
Declaration of Human Rights)
 11.E.O. No. 847 dated November 23, 2009 (Creating the Church-Police-Military-
Liaison Committee to Formulate and Implement a Comprehensive Program to
Establish Strong Partnership Between the State and the Church on Matters
Concerning Peace and Order and Human Rights)

12.A.O. No. 35 dated November 22, 2012 (Creating the Inter-Agency Committee on
Extra-Legal Killings, Enforced Disappearances, Torture and Other Grave
Violations of the Right to Life, Liberty and Security of Persons)

13.A.O. No. 1 dated October 11, 2016 (Creating the Presidential Task Force on
Violations of the Right to Life, Liberty and Security of the Members of the Media)

Finally, the Congress passed the following laws affecting human rights:

1. Republic Act No. 7438 (An Act Defining Certain Rights of Person Arrested,
Detained or Under Custodia/Investigation as well as the Duties of the Arresting,
Detaining and Investigating Officers and Providing Penalties for Violations
Thereof)

2. Republic Act No. 8371 (The Indigenous Peoples' Rights Act of 1997)

3. Republic Act No. 9201 (National Human Rights Consciousness Week Act of 2002)

4. Republic Act No. 9208 (Anti-Trafficking in Persons Act of 2003)

5. Republic Act No. 9262 (Anti-Violence Against Women and Their Children Act of
2004)

6. Republic Act No. 9344 (Juvenile Justice and Welfare Act of 2006)

7. Republic Act No. 9372 (Human Security Act of 2007)

8. Republic Act No. 9710 (The Magna Carta of Women)

9. Republic Act No. 9745 (Anti-Torture Act of 2009)

10.Republic Act No. 9851 (Philippine Act on Crimes Against International

Humanitarian Law, Genocide, and Other Crimes Against Humanity)

11.Republic Act No. 10121 (Philippine Disaster Risk Reduction and Management Act
of 2010)

12.Republic Act No. 10168 (The Terrorism Financing Prevention and Suppression
Act of 2012)

13.Republic Act No. 10353 (Anti-Enforced or Involuntary Disappearance Act of

2012)

14.Republic Act No. 10364 (Expanded Anti-Trafficking In Persons Act of 2012)

 15.Republic Act No. 10368 (Human Rights Victims Reparation And Recognition Act
of 2013)

16.Republic Act No. 10530 (The Red Cross and Other Emblems Act of 2013)

Contrary to petitioners' postulation, our nation's history will not be instantly revised by
a single resolve of President Duterte, acting through the public respondents, to bury
Marcos at the LNMB. Whether petitioners admit it or not, the lessons of Martial Law are
already engraved, albeit in varying degrees, in the hearts and minds of the present
generation of Filipinos. As to the unborn, it must be said that the preservation and
popularization of our history is not the sole responsibility of the Chief Executive; it is a
joint and collective endeavor of every freedom-loving citizen of this country.

Notably, complementing the statutory powers and functions of the Human Rights
Victims' Claims Board and the HRVV Memorial Commission in the memorialization of
HRVVs, the National Historical Commission of the Philippines (NHCP), formerly known
as the National Historical Institute (NHI),94 is mandated to act as the primary
government agency responsible for history and is authorized to determine all factual
matters relating to official Philippine history.95 Among others, it is tasked to: (a)
conduct and support all kinds of research relating to Philippine national and local
history; (b) develop educational materials in various media, implement historical
educational activities for the popularization of Philippine history, and disseminate,
information regarding Philippine historical events, dates, places and personages; and
(c) actively engage in the settlement or resolution of controversies or issues relative to
historical personages, places, dates and events.96 Under R.A. Nos. 10066 (National
Cultural Heritage Act of 2009)97 and 10086 (Strengthening Peoples' Nationalism
Through Philippine History Act),98 the declared State policy is to conserve, develop,
promote, and popularize the nation's historical and cultural heritage and
resources.99 Towards this end, means shall be provided to strengthen people's
nationalism, love of country, respect for its heroes and pride for the people's
accomplishments by reinforcing the importance of Philippine national and local history
in daily life with the end in view of raising social consciousness.100 Utmost priority shall
be given not only with the research on history but also its popularization.101 chanrobleslaw

II.
The President's decision to bury Marcos at the LNMB is not done whimsically,
capriciously or arbitrarily, out of malice, ill will or personal bias

Petitioners contend that the interment of Marcos at the LNMB will desecrate it as a
sacred and hallowed place and a revered national shrine where the mortal remains of
our country's great men and women are interred for the inspiration and emulation of
the present generation and generations to come. They erred.

A. National Shrines

As one of the cultural properties of the Philippines, national historical shrines (or
historical shrines) refer to sites or structures hallowed and revered for their history or
association as declared by the NHCP.102 The national shrines created by law and
presidential issuance include, among others: Fort Santiago (Dambana ng Kalayaan) in
Manila;103 all battlefield areas in Corregidor and Bataan;104 the site of First Mass in the
Philippines in Magallanes, Limasawa, Leyte;105 Aguinaldo Shrine or Freedom Shrine in
Kawit, Cavite;106 Fort San Antonio Abad National Shrine in Malate, Manila;107 Tirad Pass
National Shrine in Ilocos Sur;108 Ricarte Shrine109 and Aglipay Shrine110 in Batac, Ilocos
Norte; Liberty Shrine in Lapu-Lapu, Cebu;111 "Red Beach" or the landing point of
General Douglas MacArthur and the liberating forces in Baras, Palo, Leyte;112 Dapitan
City as a National Shrine City in Zamboanga Del Norte;113 General Leandro Locsin
Fullon National Shrine in Hamtic, Antique;114 and Mabini Shrine in Polytechnic University
of the Philippines - Mabini Campus, Sta. Mesa, Manila.115 As sites of the birth, exile,
imprisonment, detention or death of great and eminent leaders of the nation, it is the
policy of the Government to hold and keep the national shrines as sacred and hallowed
place.116 P.O. No. 105117 strictly prohibits and punishes by imprisonment and/or fine the
desecration of national shrines by disturbing their peace and serenity through digging,
excavating, defacing, causing unnecessary noise, and committing unbecoming acts
within their premises. R.A. No. 10066 also makes it punishable to intentionally modify,
alter, or destroy the original features of, or undertake construction or real estate
development in any national shrine, monument, landmark and other historic edifices
and structures, declared, classified, and marked by the NHCP as such, without the prior
written permission from the National Commission for Culture and the Arts (NCAA).118 chanrobleslaw

As one of the cultural agencies attached to the NCAA,119 the NHCP manages, maintains
and administers national shrines, monuments, historical sites, edifices and landmarks of
significant historico-cultural value.120 In particular, the NHCP Board has the power to
approve the declaration of historic structures and sites, such as national shrines,
monuments, landmarks and heritage houses and to determine the manner of their
identification, maintenance, restoration, conservation, preservation and protection.121 chanrobleslaw

Excluded, however, from the jurisdiction of the NHCP are the military memorials and
battle monuments declared as national shrines, which have been under the
administration, maintenance and development of the Philippine Veterans Affairs Office
(PVAO) of the DND. Among the military shrines are: Mt. Samat National Shrine in Pilar,
Bataan;122 Kiangan War Memorial Shrine in Linda, Kiangan, Ifugao;123 Capas National
Shrine in Capas, Tarlac;124 Ricarte National Shrine in Malasin, Batac, Ilocos
Norte;125 Balantang Memorial Cemetery National Shrine in Jaro, Iloilo;126 Balete Pass
National Shrine in Sta. Fe, Nueva Vizcaya;127 USAFIP, NL Military Shrine and Park in
Bessang Pass, Cervantes, Ilocos Sur;128 and the LNMB in Taguig City, Metro Manila.129 chanrobleslaw

B. The Libingan Ng Mga Bayani

At the end of World War II, the entire nation was left mourning for the death of
thousands of Filipinos. Several places served as grounds for the war dead, such as the
Republic Memorial Cemetery, the Bataan Memorial Cemetery, and other places
throughout the country. The Republic Memorial Cemetery, in particular, was established
in May 1947 as a fitting tribute and final resting place of Filipino military personnel who
died in World War II.

On October 23, 1954, President Ramon D. Magsaysay, Sr. issued E.O. No. 77, which
ordered "the remains of the war dead interred at the Bataan Memorial Cemetery,
Bataan Province, and at other places in the Philippines, be transferred to, and
reinterred at, the Republic Memorial Cemetery at Fort Wm Mckinley, Rizal Province" so
as to minimize the expenses for the maintenance and upkeep, and to make the remains
accessible to the widows, parents, children, relatives, and friends.

On October 27, 1954, President Magsaysay issued Proclamation No. 86, which changed
the name of Republic Memorial Cemetery to Libingan Ng Mga Bayani to symbolize "the
cause for which our soldiers have died" and to "truly express the nations esteem and
reverence for her war dead."130chanrobleslaw

On July 12, 1957, President Carlos P. Garcia issued Proclamation No. 423, which
reserved for military purposes, under the administration of the AFP Chief of Staff, the
land where LNMB is located. The LNMB was part of a military reservation site then
known as Fort Wm McKinley (now known as Fort Andres Bonifacio).

On May 28, 1967, Marcos issued Proclamation No. 208, which excluded the LNMB from
the Fort Bonifacio military reservation and reserved the LNMB for national shrine
purposes under the administration of the National Shrines Commission (NSC) under the
DND.

On September 24, 1972, Marcos, in the exercise of his powers as the AFP Commander-
in-Chief, and pursuant to Proclamation No. 1081 dated September 21, 1972, and
General Order No. 1 dated September 22, 1972, as amended, issued Presidential
Decree (P.D.) No. 1 which reorganized the Executive Branch of the National
Government through the adoption of the Integrated Reorganization Plan (IRP). Section
7, Article XV, Chapter I, Part XII thereof abolished the NSC and its functions together
with applicable appropriations, records, equipment, property and such personnel as
may be necessary were transferred to the NHI under the Department of Education
(DEC). The NHI was responsible for promoting and preserving the Philippine cultural
heritage by undertaking, inter alia, studies on Philippine history and national heroes
and maintaining national shrines and monuments.131 chanrobleslaw

Pending the organization of the DEC, the functions relative to the administration,
maintenance and development of national shrines tentatively integrated into the PVAO
in July 1973.

On January 26, 1977, President Marcos issued P.D. No. 1076. Section 7, Article XV,
Chapter I, Part XII of the IRP was repealed on the grounds that "the administration,
maintenance and development of national shrines consisting of military memorials or
battle monuments can be more effectively accomplished if they are removed from the
[DEC] and transferred to the [DND] by reason of the latter s greater capabilities and
resources" and that "the functions of the [DND] are more closely related and relevant
to the charter or significance of said national shrines." Henceforth, the PVAO through
the Military Shrines Service (MSS), which was created to perform the functions of the
abolished NSC - would administer, maintain and develop military memorials and battle
monuments proclaimed as national shrines.

On July 25, 1987, President Corazon C. Aquino issued the Administrative Code. The
Code retains PVAO under the supervision and control of the Secretary of National
Defense.132 Among others, PVAO shall administer, develop and maintain military
shrines.133 With the approval of PVAO Rationalization Plan on June 29, 2010, pursuant
to E.O. No. 366 dated October 4, 2004, MSS was renamed to Veterans Memorial and
Historical Division, under the supervision and control of PVAO, which is presently tasked
with the management and development of military shrines and the perpetuation of the
heroic deeds of our nation's veterans.

As a national military shrine, the main features, structures, and facilities of the LNMB
are as follows:

1. Tomb of the Unknown Soldiers - The main structure constructed at the center
of the cemetery where wreath laying ceremonies are held when Philippine
government officials and foreign dignitaries visit the LNMB. The following
inscription is found on the tomb: "Here lies a Filipino soldier whose name is
known only to God." Behind the tomb are three marble pillars representing the
three main island groups of the Philippines - Luzon, Visayas and Mindanao.
Buried here were the remains of 39,000 Filipino soldiers who were originally
buried in Camp O'Donnell Concentration Camp and Fort Santiago, Intramuros,
Manila.

2. Heroes Memorial Gate - A structure shaped in the form of a large concrete

tripod with a stairway leading to an upper view deck and a metal sculpture at the
center. This is the first imposing structure one sees upon entering the grounds of
the cemetery complex.

3. Black Stone Walls - Erected on opposite sides of the main entrance road
leading to the Tomb of the Unknown Soldiers and just near the Heroes Memorial
are two 12-foot high black stone walls which bear the words, "I do not know the
dignity of his birth, but I do know the glory of his death." that General Douglas
MacArthur made during his sentimental journey to the Philippines in 1961.

4. Defenders of Bataan and Corregidor Memorial Pylon - Inaugurated on April

5, 1977 by Secretary Renato S. De Villa in memory of the defenders of Bataan
and Corregidor during World War II. This monument is dedicated as an eternal
acknowledgment of their valor and sacrifice in defense of the Philippines.

5. Korean Memorial Pylon - A towering monument honoring the 112 Filipino

officers and men who, as members of the Philippine Expeditionary Forces to
Korea (PEFTOK), perished during the Korean War.

6. Vietnam Veterans Memorial Pylon - Dedicated to the members of the

Philippine contingents and Philippine civic action groups to Vietnam (PHILCON-V
and PHILCAG-V) who served as medical, dental, engineering construction,
community and psychological workers, and security complement. They offered
tremendous sacrifices as they alleviated human suffering in war-ravaged
Vietnam from 1964-1971. Inscribed on the memorial pylon are the words: "To
build and not to destroy, to bring the Vietnamese people happiness and not
sorrow, to develop goodwill and not hatred."
 7. Philippine World War II Guerillas Pylon - Erected by the Veterans Federation
of the Philippines as a testimony to the indomitable spirit and bravery of the
Filipino guerillas of World War II who refused to be cowed into submission and
carried on the fight for freedom against an enemy with vastly superior arms and
under almost insurmountable odds. Their hardship and sufferings, as well as
their defeats and victories, are enshrined in this memorial.134

Contrary to the dissent, P.D. No. 105135 does not apply to the LNMB. Despite the fact
that P.D. No. 208 predated P.D. No. 105,136 the LNMB was not expressly included in the
national shrines enumerated in the latter.137 The proposition that the LNMB is implicitly
covered in the catchall phrase "and others which may be proclaimed in the future as
National Shrines" is erroneous because:

chanRoblesvirtualLawlibrary (1) As stated, Marcos issued P.D. No. 208 prior to P.D. No. 105.

(2) Following the canon of statutory construction known as ejusdem generis,138 the

LNMB is not a site "of the birth, exile, imprisonment, detention or death of great and
eminent leaders of the nation." What P.D. No. 105 contemplates are the following
national shrines: Fort Santiago ("Dambana ng Kalayaan"), all battlefield areas in
Corregidor and Bataan, the site of First Mass in the Philippines, Aguinaldo Shrine or
Freedom Shrine, Fort San Antonio Abad National Shrine, Tirad Pass National Shrine,
Ricarte Shrine, Aglipay Shrine, Liberty Shrine, "Red Beach" or the landing point of
General Douglas MacArthur and the liberating forces, Dapitan City, General Leandro
Locsin Fullon National Shrine, and Mabini Shrine. Excluded are the military memorials
and battle monuments declared as national shrines under the PVAO, such as: Mt.
Samat National Shrine, Kiangan War Memorial Shrine, Capas National Shrine, Ricarte
National Shrine, Balantang Memorial Cemetery National Shrine, Balete Pass National
Shrine; USAFIP, NL Military Shrine and Park, and the LNMB.

(3) Since its establishment, the LNMB has been a military shrine under the jurisdiction
of the PVAO. While P.D. No. 1 dated September 24, 1972 transferred the
administration, maintenance and development of national shrines to the NHI under the
DEC, it never actually materialized. Pending the organization of the DEC, its functions
relative to national shrines were tentatively integrated into the PVAO in July 1973.
Eventually, on January 26, 1977, Marcos issued P.D. No. 1076. The PVAO, through the
MSS, was tasked to administer, maintain, and develop military memorials and battle
monuments proclaimed as national shrines. The reasons being that "the administration,
maintenance and development of national shrines consisting of military memorials or
battle monuments can be more effectively accomplished if they are removed from the
[DEC] and transferred to the [DND] by reason of the latter's greater capabilities and
resources" and that "the functions of the [DND] are more closely related and relevant
to the charter or significance of said national shrines."

The foregoing interpretation is neither narrow and myopic nor downright error. Instead,
it is consistent with the letter and intent of P.D. No. 105.

Assuming that P.D. No. 105 is applicable, the descriptive words "sacred and hallowed"
refer to the LNMB as a place and not to each and every mortal remains interred therein.
Hence, the burial of Marcos at the LNMB does not diminish said cemetery as a revered
and respected ground. Neither does it negate the presumed individual or collective
"heroism" of the men and women buried or will be buried therein. The "nations esteem
and reverence for her war dead," as originally contemplated by President Magsaysay in
issuing Proclamation No. 86, still stands unaffected. That being said, the interment of
Marcos, therefore, does not constitute a violation of the physical, historical, and cultural
integrity of the LNMB as a national military shrine.

At this juncture, reference should be made to Arlington National Cemetery (Arlington),

which is identical to the LNMB in terms of its prominence in the U.S. It is not amiss to
point that our armed forces have been patterned after the U.S. and that its military
code produced a salutary effect in the Philippines' military justice system.139 Hence,
relevant military rules, regulations, and practices of the U.S. have persuasive, if not the
same, effect in this jurisdiction.

As one of the U.S. Army national military cemeteries,140 the Arlington is under the
jurisdiction of the Department of the Army.141 The Secretary of the U.S. Army has the
responsibility to develop, operate, manage, administer, oversee, and fund the Army
national military cemeteries in a manner and to standards that fully honor the service
and sacrifices of the deceased members of the armed forces buried or inurned therein,
and shall prescribe such regulations and policies as may be necessary to administer the
cemeteries.142 In addition, the Secretary of the U.S. Army is empowered to appoint an
advisory committee, which shall make periodic reports and recommendations as well as
advise the Secretary with respect to the administration of the cemetery, the erection of
memorials at the cemetery, and master planning for the cemetery.143 chanrobleslaw

Similar to the Philippines, the U.S. national cemeteries are established as national
shrines in tribute to the gallant dead who have served in the U.S. Armed Forces.144 The
areas are protected, managed and administered as suitable and dignified burial grounds
and as significant cultural resources.145 As such, the authorization of activities that take
place therein is limited to those that are consistent with applicable legislation and that
are compatible with maintaining their solemn commemorative and historic
character.146chanrobleslaw

The LNMB is considered as a national shrine for military memorials. The PVAO, which is
empowered to administer, develop, and maintain military shrines, is under the
supervision and control of the DND. The DND, in turn, is under the Office of the
President.

The presidential power of control over the Executive Branch of Government is a self-
executing provision of the Constitution and does not require statutory implementation,
nor may its exercise be limited, much less withdrawn, by the legislature.147 This is why
President Duterte is not bound by the alleged 1992 Agreement148 between former
President Ramos and the Marcos family to have the remains of Marcos interred in
Batac, Ilocos Norte. As the incumbent President, he is free to amend, revoke or rescind
political agreements entered into by his predecessors, and to determine policies which
he considers, based on informed judgment and presumed wisdom, will be most
effective in carrying out his mandate.

Moreover, under the Administrative Code, the President has the power to reserve for
public use and for specific public purposes any of the lands of the public domain and
that the reserved land shall remain subject to the specific public purpose indicated until
otherwise provided by law or proclamation.149 At present, there is no law or executive
issuance specifically excluding the land in which the LNMB is located from the use it was
originally intended by the past Presidents. The allotment of a cemetery plot at the
LNMB for Marcos as a former President and Commander-in-Chief,150 a legislator,151 a
Secretary of National Defense,152 a military personnel,153 a veteran,154 and a Medal of
Valor awardee,155 whether recognizing his contributions or simply his status as such,
satisfies the public use requirement. The disbursement of public funds to cover the
expenses incidental to the burial is granted to compensate him for valuable public
services rendered.156 Likewise, President Duterte's determination to have Marcos'
remains interred at the LNMB was inspired by his desire for national healing and
reconciliation. Presumption of regularity in the performance of official duty prevails over
petitioners' highly disputed factual allegation that, in the guise of exercising a
presidential prerogative, the Chief Executive is actually motivated by utang na
loob (debt of gratitude) and bayad utang (payback) to the Marcoses. As the purpose is
not self-evident, petitioners have the burden of proof to establish the factual basis of
their claim. They failed. Even so, this Court cannot take cognizance of factual issues
since We are not a trier of facts.

C. AFP Regulations on the LNMB

A review of the regulations issued by the AFP Chief of Staff as to who may and may not
be interred at the LNMB underscores the nature and purpose of the LNMB as an active
military cemetery/grave site.

On May 13, 1947, the Chief of Staff of the Philippine Army, by the direction of the
President and by order of the Secretary of National Defense, issued General Orders No.
111, which constituted and activated, as of said date, the Graves Registration Platoon
as a unit of the Philippine Army.

On February 2, 1960, the AFP Chief of Staff, by order of the Secretary of National
Defense, issued AFP Regulations G 161-371 (Administrative and Special Staff Services,
Grave Registration Service), which provided that the following may be interred in the
LNMB: (a) World War II dead of the AFP and recognized guerillas; (b) Current dead of
the AFP; (c) Retired military personnel of the AFP; (d) Remains of former members of
the AFP who died while in the active service and in the Retired List of the AFP now
interred at different cemeteries and other places throughout the Philippines or the
Secretary of National Defense; and (e) Others upon approval of the Congress of the
Philippines, the President of the Philippines or the Secretary of National Defense. The
regulation also stated that the AFP Quartermaster General will be responsible for,
among other matters, the efficient operation of the Graves Registration Service; the
interment, disinterment and reinterment of the dead mentioned above; and
preservation of military cemeteries, national cemeteries, and memorials.

On July 31, 1973, the AFP Chief of Staff, by order of the Secretary of National Defense,
issued AFP Regulations G 161-372 (Administration and Operation of AFP Graves
Registration Installations), which superseded AFP Regulations G 161-371. It provided
that the following may be interred in the LNMB: (a) Deceased Veterans of the Philippine
Revolution of 1896/World War I; (b) Deceased World War II members of the AFP and
recognized guerillas; (c) Deceased military personnel of the AFP who died while in the
active duty; (d) Deceased retired military personnel of the AFP; (e) Deceased military
personnel of the AFP interred at different cemeteries and other places outside the
LNMB; and (f) Such remains of persons as the Commander-in-Chief of the AFP may
direct. The remains of the following were not allowed to be interred in the LNMB: (a)
The spouse of an active, or retired, deceased military personnel, recognized guerillas
who himself/herself is not a military personnel; and (b) AFP personnel who were
retireable but separated/reverted/discharged for cause, or joined and aided the enemy
of the Republic of the Philippines, or were convicted of capital or other criminal
offenses, involving moral turpitude. The regulation also stated that the Quartermaster
General shall be responsible for, among other matters, the efficient operation of the
AFP graves registration installations; the interment, disinterment and reinterment of
deceased military personnel mentioned above; and the preservation of military
cemeteries, proper marking and official recording of graves therein.

On April 9, 1986, AFP Chief of Staff Fidel V. Ramos, by order of National Defense
Minister, issued AFP Regulations G 161-373 (Allocation of Cemetery Plots at
the Libingan Ng Mga Bayani), which superseded AFP Regulations G 161-372. It
enumerated a list of deceased person who may be interred at the LNMB, namely: (a)
Medal of Valor Awardees; (b) Presidents or Commanders-in-Chief, AFP; (c) Ministers of
National Defense; (d) Chiefs of Staff, AFP; (e) General/Flag Officers of the AFP; (f)
Active and retired military personnel of the AFP; (g) Veterans of Philippine Revolution of
1896, WWI, WWII and recognized guerillas; and (h) Government Dignitaries,
Statesmen, National Artist and other deceased persons whose interment or reinterment
has been approved by the Commander-in-Chief, Batasang Pambansa or the Minister of
National Defense. The regulation also stated that the Quartermaster General shall be
responsible for the allocation of specific section/areas for the said deceased persons,
while the Commanding Officer of the Quartermaster Graves Registration Company shall
be charged with the preparation of grave sites, supervision of burials at LNMB and the
registration of graves.

On March 27, 1998, the AFP Chief of Staff, by order of the Secretary of National
Defense, issued AFP Regulations G 161-374 (Allocation of Cemetery Plots at
the Libingan Ng Mga Bayani), which superseded AFP Regulations G 161-373. It
provided that the following may be interred in the LNMB: (a) Medal of Valor Awardees;
(b) Presidents or Commanders-inChief, AFP; (c) Secretaries of National Defense; (d)
Chiefs of Staff, AFP; (e) General/Flag Officers of the AFP; (f) Active and retired military
personnel of the AFP; (g) Veterans of Philippine Revolution of 1890, WWI, WWII and
recognized guerillas; (h) Government Dignitaries, Statesmen, National Artists and other
deceased persons whose interment or reinterment has been approved by the
Commander-in-Chief, Congress or Secretary of National Defense; and (i) Former
Presidents, Secretaries of Defense, CSAFP, Generals/Flag Officers, Dignitaries,
Statesmen, National Artists, widows of former Presidents, Secretaries of National
Defense and Chief of Staff. The remains of the following were not allowed to be interred
in the LNMB: (a) Personnel who were dishonorably separated/reverted/discharged from
the service; and (b) Authorized personnel who were convicted by final judgment of an
offense involving moral turpitude. Like AFP Regulations G 161-373, it stated that the
Quartermaster General shall be responsible for the allocation of specific section/areas
for the deceased persons, whereas the Commanding Officer of the Quartermaster
Graves Registration Unit shall be charged with the preparation of grave sites,
supervision of burials, and the registration of graves.
Finally, on September 11, 2000, the AFP Chief of Staff, by the order of the Secretary of
National Defense, issued AFP Regulations G 161-375 (Allocation of Cemetery Plots at
the Libingan Ng Mga Bayani), which superseded AFP Regulations G 161-374. The
regulation stated that the Chief of Staff shall be responsible for the issuance of
interment directive for all active military personnel for interment, authorized personnel
(such as those former members of the AFP who laterally entered or joined the
Philippine Coast Guard [PCG] and the Philippine National Police [PNP]), and retirees,
veterans and reservists enumerated therein. The Quartermaster General is tasked to
exercise over-all supervision in the implementation of the regulation and the
Commander ASCOM, PA through the Commanding Officer of Grave Services Unit is
charged with the registration of the deceased/graves, the allocation of specific
section/area at the LNMB for interment of deceased, the preparation of grave sites, and
the supervision of burials.

Under AFP Regulations G 161-375, the following are eligible for interment at the LNMB:
(a) Medal of Valor Awardees; (b) Presidents or Commanders-in-Chief, AFP; (c)
Secretaries of National Defense; (d) Chiefs of Staff, AFP; (e) General/Flag Officers of
the AFP; (f) Active and retired military personnel of the AFP to include active draftees
and trainees who died in line of duty, active reservists and CAFGU Active Auxiliary
(CAA) who died in combat operations or combat related activities; (g) Former members
of the AFP who laterally entered or joined the PCG and the PNP; (h) Veterans of
Philippine Revolution of 1890, WWI, WWII and recognized guerillas; (i) Government
Dignitaries, Statesmen, National Artists and other deceased persons whose interment
or reinterment has been approved by the Commander-in-Chief, Congress or the
Secretary of National Defense; and G) Former Presidents, Secretaries of Defense,
Dignitaries, Statesmen, National Artists, widows of Former Presidents, Secretaries of
National Defense and Chief of Staff. Similar to AFP Regulations G 161-374, the
following are not qualified to be interred in the LNMB: (a) Personnel who were
dishonorably separated/reverted/discharged from the service; and (b) Authorized
personnel who were convicted by final judgment of an offense involving moral
turpitude.

In the absence of any executive issuance or law to the contrary, the AFP Regulations G
161-375 remains to be the sole authority in determining who are entitled and
disqualified to be interred at the LNMB. Interestingly, even if they were empowered to
do so, former Presidents Corazon C. Aquino and Benigno Simeon C. Aquino III, who
were themselves aggrieved at the Martial Law, did not revise the rules by expressly
prohibiting the burial of Marcos at the LNMB. The validity of AFP Regulations G 161-375
must, therefor, be sustained for having been issued by the AFP Chief of Staff acting
under the direction of the Secretary of National Defense, who is the alter ego of the
President.

x x x In Joson v. Torres, we explained the concept of the alter ego principle or the
doctrine of qualified political agency and its limit in this wise:

Under this doctrine, which recognizes the establishment of a single executive, all
chanRoblesvirtualLawlibrary

executive and administrative organizations are adjuncts of the Executive Department,

the heads of the various executive departments are assistants and agents of the Chief
Executive, and, except in cases where the Chief Executive is required by the
Constitution or law to act in person or the exigencies of the situation demand
that he act personally, the multifarious executive and administrative functions of the
Chief Executive are performed by and through the executive departments, and the acts
of the Secretaries of such departments, performed and promulgated in the regular
course of business, are, unless disapproved or reprobated by the Chief Executive
presumptively the acts of the Chief Executive. (Emphasis ours, citation omitted.)157 chanroblesvirtuallawlibrary

It has been held that an administrative regulation adopted pursuant to law has the
force and effect of law and, until set aside, is binding upon executive and administrative
agencies, including the President as the chief executor of laws.158 chanrobleslaw

1. Qualification under the AFP Regulations

AFP Regulations G 161-375 should not be stricken down in the absence of clear and
unmistakable showing that it has been issued with grave abuse of discretion amounting
to lack or excess of jurisdiction. Neither could it be considered ultra vires for
purportedly providing incomplete, whimsical, and capricious standards for qualification
for burial at the LNMB.

To compare, We again refer to the U.S. Army regulations on Arlington. In the U.S., the
Secretary of the Army, with the approval of the Secretary of Defense, determines
eligibility for interment or inurnment in the Army national military
cemeteries.159 Effective October 26, 2016, the rule160 is as follows: ChanRoblesVirtualawlibrary

Only those who qualify as a primarily eligible person or a derivatively eligible person are
eligible for interment in Arlington National Cemetery, unless otherwise prohibited as
provided for in §§ 553.19161-553.20,162 provided that the last period of active duty of
the service member or veteran ended with an honorable discharge.

(a) Primarily eligible persons. The following are primarily eligible persons for purposes
of interment:

(1) Any service member who dies on active duty in the U.S. Armed Forces (except
chanRoblesvirtualLawlibrary

those service members serving on active duty for training only), if the General Courts
Martial Convening Authority grants a certificate of honorable service.

(2) Any veteran retired from a Reserve component who served a period of active duty
(other than for training), is carried on the official retired list, and is entitled to receive
military retired pay.

(3) Any veteran retired from active military service and entitled to receive military
retired pay.

(4) Any veteran who received an honorable
October 1, 1949, who was discharged for a
on active duty (other than for training),
retirement under the provisions of 10 U.S.C.
date of
discharge from the Armed Forces prior to
permanent physical disability, who served
and who would have been eligible for
1201 had the statute been in effect on the
separation.

(5) Any veteran awarded one of the following decorations:

chanRoblesvirtualLawlibrary (i) Medal of Honor;163 chanrobleslaw

(ii) Distinguished Service Cross, Air Force Cross, or Navy Cross;

(iii) Distinguished Service Medal;

(iv) Silver Star; or

(v) Purple Heart.

(6) Any veteran who served on active duty (other than active duty for training) and
who held any of the following positions:

chanRoblesvirtualLawlibrary (i) President or Vice President of the United States;

(ii) Elected member of the U.S. Congress;

(iii) Chief Justice of the Supreme Court of the United States or Associate Justice of the
Supreme Court of the United States;

(iv) A position listed, at the time the person held the position, in 5 U.S.C. 5312164 or
5313165 (Levels I and II of the Executive Schedule); or

(v) Chief of Mission of a Category 4, 5, or post if the Department of State classified that
post as a Category 4, 5, or 5+ post during the person's tenure as Chief of Mission.

(7) Any former prisoner of war who, while a prisoner of war, served honorably in the
active military service, and who died on or after November 30, 1993.

(b) Derivatively eligible persons. The following individuals are derivatively eligible
persons for purposes of interment who may be interred if space is available in the
gravesite of the primarily eligible person:

(1) The spouse of a primarily eligible person who is or will be interred in Arlington
chanRoblesvirtualLawlibrary

National Cemetery. A former spouse of a primarily eligible person is not eligible for
interment in Arlington National Cemetery under this paragraph.

(2) The spouse of an active duty service member or an eligible veteran, who was:

(i) Lost or buried at sea, temporarily interred overseas due to action by the
chanRoblesvirtualLawlibrary

Government, or officially determined to be missing in action;

(ii) Buried in a U.S. military cemetery maintained by the American Battle Monuments
Commission; or

(iii) Interred in Arlington National Cemetery as part of a group burial (the derivatively
eligible spouse may not be buried in the group burial gravesite).

(3) The parents of a minor child or a permanently dependent adult child, whose
remains were interred in Arlington National Cemetery based on the eligibility of a
parent at the time of the child's death, unless eligibility of the non-service connected
parent is lost through divorce from the primarily eligible parent.

(4) An honorably discharged veteran who does not qualify as a primarily eligible
person, if the veteran will be buried in the same gravesite as an already interred
primarily eligible person who is a close relative, where the interment meets the
following conditions:

chanRoblesvirtualLawlibrary (i) The veteran is without minor or unmarried adult dependent children;

(ii) The veteran will not occupy space reserved for the spouse, a minor child, or a
permanently dependent adult child;

(iii) All other close relatives of the primarily eligible person concur with the interment of
the veteran with the primarily eligible person by signing a notarized statement;

(iv) The veteran's spouse waives any entitlement to interment in Arlington National
Cemetery, where such entitlement might be based on the veteran's interment in
Arlington National Cemetery. The Executive Director may set aside the spouse's waiver,
provided space is available in the same gravesite, and all close relatives of the primarily
eligible person concur;

(v) Any cost of moving, recasketing, or revaulting the remains will be paid from private
funds.
There is a separate list of eligible with respect to the inurnment of cremated remains in
the Columbarium,166 interment of cremated remains in the Unmarked Area,167 and
group burial.168 As a national military cemetery, eligibility standards for interment,
inurnment, or memorialization in Arlington are based on honorable military
service.169 Exceptions to the eligibility standards for new graves, which are rarely
granted, are for those persons who have made significant contributions that
directly and substantially benefited the U.S. military.170 chanrobleslaw

Judging from the foregoing, it is glaring that the U.S. Army regulations on Arlington and
the AFP Regulations G 161-375 on the LNMB, as a general rule, recognize and reward
the military services or military related activities of the deceased. Compared with the
latter, however, the former is actually less generous in granting the privilege of
interment since only the spouse or parent, under certain conditions, may be allowed "if
space is available in the gravesite of the primarily eligible person."

It is not contrary to the "well-established custom," as the dissent described it, to argue
that the word "bayani" in the LNMB has become a misnomer since while a symbolism of
heroism may attach to the LNMB as a national shrine for military memorial, the same
does not automatically attach to its feature as a military cemetery and to those who
were already laid or will be laid therein. As stated, the purpose of the LNMB, both from
the legal and historical perspectives, has neither been to confer to the people buried
there the title of "hero" nor to require that only those interred therein should be treated
as a "hero." In fact, the privilege of internment at the LNMB has been loosen up
through the years. Since 1986, the list of eligible includes not only those who rendered
active military service or military-related activities but also non-military personnel who
were recognized for their significant contributions to the Philippine society (such as
government dignitaries, statesmen, national artists, and other deceased persons whose
interment or reinterment has been approved by the Commander-in-Chief, Congress or
Secretary of National Defense). In 1998, the widows of former Presidents, Secretaries
of National Defense and Chief of Staff were added to the list. Whether or not the
extension of burial privilege to civilians is unwarranted and should be restricted in order
to be consistent with the original purpose of the LNMB is immaterial and irrelevant to
the issue at bar since it is indubitable that Marcos had rendered significant active
military service and military-related activities.

Petitioners did not dispute that Marcos was a former President and Commander-in-
Chief, a legislator, a Secretary of National Defense, a military personnel, a veteran, and
a Medal of Valor awardee. For his alleged human rights abuses and corrupt practices,
we may disregard Marcos as a President and Commander-in-Chief, but we cannot deny
him the right to be acknowledged based on the other positions he held or the awards he
received. In this sense, We agree with the proposition that Marcos should be viewed
and judged in his totality as a person. While he was not all good, he was not pure evil
either. Certainly, just a human who erred like us.

Our laws give high regard to Marcos as a Medal of Valor awardee and a veteran. R.A.
No. 9049171 declares the policy of the State "to consistently honor its military heroes in
order to strengthen the patriotic spirit and nationalist consciousness of the
military."172 For the "supreme self-sacrifice and distinctive acts of heroism and
gallantry,"173 a Medal of Valor awardee or his/her dependents/heirs/beneficiaries are
entitled to the following social services and financial rewards:

1. Tax-exempt lifetime monthly gratuity of Twenty Thousand Pesos (P20,000.00),

which is separate and distinct from any salary or pension that the awardee
currently receives or will receive from the government of the Philippines;174 chanrobleslaw

2. Precedence in employment in government agencies or government-owned or

controlled corporation, if the job qualifications or requirements are met;

3. Priority in the approval of the awardee's housing application under existing

housing programs of the government;

4. Priority in the acquisition of public lands under the Public Land Act and
preferential right in the lease of pasture lands and exploitation of natural
resources;

5. Privilege of obtaining loans in an aggregate amount not exceeding Five Hundred

Thousand Pesos (P500,000.00) from governmentowned or controlled financial
institutions without having to put up any collateral or constitute any pledge or
mortgage to secure the payment of the loan;

6. Twenty (20%) percent discount from all establishments relative to utilization of

transportation services, hotels and similar lodging establishments, restaurants,
recreation and sport centers and purchase of medicine anywhere in the country;
 7. Twenty (20%) percent discount on admission fees charged by theaters, cinema
houses and concert halls, circuses, carnivals and other similar places of culture,
leisure and amusement;

8. Free medical and dental services and consultation in hospital and clinics
anywhere in the country;

9. Exemption from the payment of tuition and matriculation fees in public or private
schools, universities, colleges and other educational institutions in any pre-
school, baccalaureate or post graduate courses such as or including course
leading to the degree of Doctor of Medicine (MD), Bachelor of Laws (LLB), and
Bachelor of Science in Nursing (BSN) or allied and similar courses; and  cralawlawlibrary

10.If interested and qualified, a quota is given to join the cadet corps of the
Philippine Military Academy or otherwise priority for direct commission, call to
active duty (CAD) and/or enlistment in regular force of the AFP.

On the other hand, in recognizing their patriotic services in times of war and peace for
the cause of freedom and democracy; for the attainment of national unity,
independence, and socioeconomic advancement; and for the maintenance of peace and
order,175 R.A. No. 6948, as amended,176 grants our veterans177 and their dependents or
survivors with pension (old age, disability, total administrative disability, and death)
and non-pension (burial, education, hospitalization, and medical care and treatment)
benefits as well as provisions from the local governments. Under the law, the benefits
may be withheld if the Commission on Human Rights certifies to the AFP General
Headquarters that the veteran has been found guilty by final judgment of a gross
human rights violation while in the service, but this factor shall not be considered
taken against his next of kin.178
chanrobleslaw

2. Disqualification under the AFP Regulations

Aside from being eligible for burial at the LNMB, Marcos possessed none of the
disqualifications stated in AFP Regulations G 161-375. He was neither convicted by final
judgment of the offense involving moral turpitude nor dishonorably
separated/reverted/discharged from active military service.

Petitioners, however, protest that a narrow interpretation of the AFP regulations

disregards historical context and the rule on statutory construction. They urge the Court
to construe statutes not literally but according to their spirit and reason.

It is argued that Marcos committed offenses involving moral turpitude for his gross
human rights violations, massive graft and corruption, and dubious military records, as
found by foreign and local courts as well as administrative agencies. By going into exile,
he deliberately evaded liability for his actions. And by allowing death to overtake him,
he inevitably escaped the prospect of facing accountability for his crimes. They also
contend that his removal in the 1986 popular uprising is a clear sign of his discharge
from the AFP. The People Power Revolution was the direct exercise of the Filipinos'
power to overthrow an illegitimate and oppressive regime. As a sovereign act, it
necessarily includes the power to adjudge him as dishonorably discharged from the
AFP.
Furthermore, according to petitioners, to limit the application of the disqualifying
provisions of AFP Regulations G 161-375 only to soldiers would be unfair (since, unlike
Presidents, soldiers have an additional cause for disqualification) and lead to absurd
results (because soldiers who were dishonorably discharged would be disqualified for
acts that are less atrocious than that committed by Marcos). Also, the AFP regulations
would place Marcos in the same class as the other Philippine Presidents when in fact he
is a class of his own, sui generis. The other Presidents were never removed by People
Power Revolution and were never subject of laws declaring them to have committed
human rights violations. Thus, the intended burial would be an act of similarly treating
persons who are differently situated.

Despite all these ostensibly persuasive arguments, the fact remains that Marcos was
not convicted by final judgment of any offense involving moral turpitude. No less than
the 1987 Constitution mandates that a person shall not be held to answer for a criminal
offense without due process of law and that, "[i]n all criminal prosecutions, the accused
shall be presum innocent until the contrary is proved, and shall enjoy the right to be
heard by himself and counsel, to be informed of the nature and cause of the accusation
against him, to have a speedy, impartial, and public trial, to meet the witnesses face to
face, and to have compulsory process to secure the attendance of witnesses and the
production of evidence in his behalf."179 Even the U.N. principles on reparation and to
combat impunity cited by petitioners unequivocally guarantee the rights of the accused,
providing that: ChanRoblesVirtualawlibrary

XIII. Rights of others

27. Nothing in this document is to be construed as derogating from internationally or

nationally protected rights of others, in particular the right of an accused person to
benefit from applicable standards of due process.

xxx

PRINCIPLE 9. GUARANTEES FOR PERSONS IMPLICATED

Before a commission identifies perpetrators in its report, the individuals concerned shall
be entitled to the following guarantees:

(a) The commission must try to corroborate information implicating individuals

chanRoblesvirtualLawlibrary

before they are named publicly;

(b) The individuals implicated shall be afforded an opportunity to provide a statement

setting forth their version of the facts either at a hearing convened by the commission
while conducting its investigation or through submission of a document equivalent to a
right of reply for inclusion in the commission's file.
To note, in the U.S., a person found to have committed a Federal or State capital crime
(i.e., a crime which a sentence of imprisonment for life or death penalty may be
imposed) but who has not been convicted by reason of not being available for trial due
to death or flight to avoid prosecution, may be ineligible for interment, inurnment, or
memorialization in an Army national military cemetery. Nevertheless, such ineligibility
must still observe the procedures specified in § 553.21.180 chanrobleslaw
The various cases cited by petitiOners, which were decided with finality by courts here
and abroad, have no bearing in this case since they are merely civil in nature; hence,
cannot and do not establish moral turpitude.

Also, the equal protection clause is not violated. Generally, there is no property right to
safeguard because even if one is eligible to be buried at the LNMB, such fact would only
give him or her the privilege to be interred therein. Unless there is a favorable
recommendation from the Commander-in-Chief, the Congress or the Secretary of
National Defense, no right can be said to have ripen. Until then, such inchoate right is
not legally demandable and enforceable.

Assuming that there is a property right to protect, the requisites of equal protection
clause are not met.181 In this case, there is a real and substantial distinction between a
military personnel and a former President. The conditions of dishonorable discharge
under the Articles of War182 attach only to the members of the military. There is also no
substantial distinction between Marcos and the three Philippine Presidents buried at the
LNMB (Presidents Quirino, Garcia, and Macapagal). All of them were not convicted of a
crime involving moral turpitude. In addition, the classification between a military
personnel and a former President is germane to the purposes of Proclamation No. 208
and P.D. No. 1076. While the LNMB is a national shrine for military memorials, it is
also an active military cemetery that recognizes the status or position held by the
persons interred therein.

Likewise, Marcos was honorably discharged from military service. PVAO expressly
recognized him as a retired veteran pursuant to R.A. No. 6948, as amended. Petitioners
have not shown that he was dishonorably discharged from military service under AFP
Circular 17, Series of 1987 (Administrative Discharge Prior to Expiration of Term of
Enlistment) for violating Articles 94, 95 and 97 of the Articles of War.183 The NHCP
study184 is incomplete with respect to his entire military career as it failed to cite and
include the official records of the AFP.

With respect to the phrase "[p]ersonnel who were dishonorably

separated/reverted/discharged from the service," the same should be viewed in light of
the definition provided by AFP Regulations G 161-375 to the term "active service" which
is "[s]ervice rendered by a military person as a Commissioned Officer, enlisted
man/woman, probationary officer, trainee or draftee in the Armed Forces of the
Philippines and service rendered by him/her as a civilian official or employee in the
Philippine Government prior to the date of his/her separation or retirement from the
Armed Forces of the Philippines, for which military and/or civilian service he/she shall
have received pay from the Philippine Government, and/or such others as may be
hereafter be prescribed by law as active service (PD 1638, as amended)."185 To my
mind, the word "service" should be construed as that rendered by a military person in
the AFP, including civil service, from the time of his/her commission, enlistment,
probation, training or drafting, up to the date of his/her separation or retirement from
the AFP. Civil service after honorable separation and retirement from the AFP is outside
the context of "service" under AFP Regulations G 161-375.

Hence, it cannot be conveniently claimed that Marcos' ouster from the presidency
during the EDSA Revolution is tantamount to his dishonorable separation, reversion or
discharge from the military service. The fact that the President is the Commander-in-
Chief of the AFP under the 1987 Constitution only enshrines the principle of supremacy
of civilian authority over the military. Not being a military person who may be
prosecuted before the court martial, the President can hardly be deemed "dishonorably
separated/reverted/discharged from the service" as contemplated by AFP Regulations G
161-375. Dishonorable discharge through a successful revolution is an extra-
constitutional and direct sovereign act of the people which is beyond the ambit of
judicial review, let alone a mere administrative regulation.

It is undeniable that former President Marcos was forced out of office by the people
through the so-called EDSA Revolution. Said political act of the people should not be
automatically given a particular legal meaning other than its obvious consequence- that
of ousting him as president. To do otherwise would lead the Court to the treacherous
and perilous path of having to make choices from multifarious inferences or theories
arising from the various acts of the people. It is not the function of the Court, for
instance, to divine the exact implications or significance of the number of votes
obtained in elections, or the message from the number of participants in public
assemblies. If the Court is not to fall into the pitfalls of getting embroiled in political and
oftentimes emotional, if not acrimonious, debates, it must remain steadfast in abiding
by its recognized guiding stars - clear constitutional and legal rules - not by the
uncertain, ambiguous and confusing messages from the actions of the people.

Conclusion

In sum, there is no clear constitutional or legal basis to hold that there was a grave
abuse of discretion amounting to lack or excess of jurisdiction which would justify the
Court to interpose its authority to check and override an act entrusted to the judgment
of another branch. Truly, the President's discretion is not totally unfettered. "Discretion
is not a freespirited stallion that runs and roams wherever it pleases but is reined in to
keep it from straying. In its classic formulation, 'discretion is not unconfined and
vagrant' but 'canalized within banks that keep it from overflowing.'"186 At bar, President
Duterte, through the public respondents, acted within the bounds of the law and
jurisprudence. Notwithstanding the call of human rights advocates, the Court must
uphold what is legal and just. And that is not to deny Marcos of his rightful place at the
LNMB. For even the Framers of our Constitution intend that full respect for human
rights is available at any stage of a person's development, from the time he or she
becomes a person to the time he or she leaves this earth.187 chanrobleslaw

There are certain things that are better left for history - not this Court - to adjudge. The
Court could only do so much in accordance with the clearly established rules and
principles. Beyond that, it is ultimately for the people themselves, as the sovereign, to
decide, a task that may require the better perspective that the passage of time
provides. In the meantime, the country must mov'e on and let this issue rest.

WHEREFORE, PREMISES CONSIDERED, the petitions are DISMISSED. Necessarily,

the Status Quo Ante Order is hereby LIFTED.