Gudani vs.
Senga
Facts: Senator Rodolfo Biazon invited several senior officers of the
AFP, including Gen. Gudani and Col. Balutan, to appear at a public
hearing before the Senate Committee on National Defense and
Security to shed light on the “Hello Garci” controversy. Gudani and
Balutan were directed by AFP Chief of Staff Gen. Senga, per
instruction of Pres. Arroyo, not testify before said Committee. On the
very day of the hearing, President Gloria-Macapagal-Arroyo issued
Executive Order No. 464 enjoining officials of the executive
department including the military establishment from appearing in
any legislative inquiry without her approval. However, the two
testified before the Senate, prompting Gen. Senga to issue an order
directing Gudani and Balutan to appear before the Office of the
Provost Marshal General (OPMG) on 3 October 2005 for
investigation. The following day, Gen. Gudani was compulsorily
retired from military service. After investigation, the OPMG
recommended that the two be charged with violation of Article of War
65, on willfully disobeying a superior officer. Thus, Gudani and
Balutan filed a petition for certiorari and prohibition seeking that (1)
the order of President Arroyo be declared unconstitutional; (2) the
charges against them be quashed; and (3) Gen. Senga and their
successors-in-interest or persons acting for and on their behalf or
orders, be permanently enjoined from proceeding against them, as a
consequence of their having testified before the Senate.  title as commander-in-chief and all the prerogatives and functions
Issue:
1. May the President prevent a member of the armed forces from
testifying before a legislative inquiry? 
2. How may the members of the military be compelled to attend
legislative inquiries even if the President desires otherwise?
3. Does the court-martial have jurisdiction over Gudani considering
his retirement last 4 October 2005?
Held: 
1. Yes. The President has constitutional authority to do so, by virtue
of her power as commander-in-chief, and that as a consequence a
military officer who defies such injunction is liable under military
justice. Our ruling that the President could, as a general rule, require
military officers to seek presidential approval before appearing before
Congress is based foremost on the notion that a contrary rule unduly
diminishes the prerogatives of the President as commander-in-chief.
Congress holds significant control over the armed forces in matters
such as budget appropriations and the approval of higher-rank
promotions, yet it is on the President that the Constitution vests the
appertaining to the position. Again, the exigencies of military
discipline and the chain of command mandate that the Presidents
ability to control the individual members of the armed forces be
accorded the utmost respect. Where a military officer is torn between
obeying the President and obeying the Senate, the Court will without
hesitation affirm that the officer has to choose the President. After all,
the Constitution prescribes that it is the President, and not the
Senate, who is the commander-in-chief of the armed forces.
2. At the same time, the refusal of the President to allow members of
the military to appear before Congress is still subject to judicial relief.
The Constitution itself recognizes as one of the legislature’s functions
is the conduct of inquiries in aid of legislation. Inasmuch as it is ill-
advised for Congress to interfere with the President’s power as
commander-in-chief, it is similarly detrimental for the President to
unduly interfere with Congress’s right to conduct legislative inquiries.
The impasse did not come to pass in this petition, since petitioners
testified anyway despite the presidential prohibition. Yet the Court is
aware that with its pronouncement today that the President has the
right to require prior consent from members of the armed forces, the
clash may soon loom or actualize.
We believe and hold that our constitutional and legal order sanctions
a modality by which members of the military may be compelled to
attend legislative inquiries even if the President desires otherwise, a
modality which does not offend the Chief Executive’s prerogatives as
commander-in-chief. The remedy lies with the courts.
The fact that the executive branch is an equal, coordinate branch of
government to the legislative creates a wrinkle to any basic rule that
persons summoned to testify before Congress must do so. There is
considerable interplay between the legislative and executive
branches, informed by due deference and respect as to their various
constitutional functions. Reciprocal courtesy idealizes this
relationship; hence, it is only as a last resort that one branch seeks to
compel the other to a particular mode of behavior. The judiciary, the
third coordinate branch of government, does not enjoy a similar
dynamic with either the legislative or executive branches. Whatever
weakness inheres on judicial power due to its inability to originate
national policies and legislation, such is balanced by the fact that it is
the branch empowered by the Constitution to compel obeisance to its
rulings by the other branches of government.
3. An officer whose name was dropped from the roll of officers
cannot be considered to be outside the jurisdiction of military
authorities when military justice proceedings were initiated against
him before the termination of his service. Once jurisdiction has been
acquired over the officer, it continues until his case is terminated.
Military jurisdiction has fully attached to Gen. Gudani inasmuch as
both the acts complained of and the initiation of the proceedings
against him occurred before he compulsorily retired on 4 October
2005. (Gudani vs. Senga, GR No. 170165, August 15, 2006) 
 as the "Hello Garci" tapes, allegedly contained the President’s
instructions to COMELEC Commissioner Virgilio Garcillano to
manipulate in her favor results of the 2004 presidential elections.
These recordings were to become the subject of heated legislative
hearings conducted separately by committees of both Houses of
Congress.1

G.R. No. 170338 December 23, 2008 In the House of Representatives (House), on June 8, 2005, then
Minority Floor Leader Francis G. Escudero delivered a privilege
VIRGILIO O. GARCILLANO, petitioner, speech, "Tale of Two Tapes," and set in motion a congressional
vs. investigation jointly conducted by the Committees on Public
THE HOUSE OF REPRESENTATIVES COMMITTEES ON PUBLIC Information, Public Order and Safety, National Defense and Security,
INFORMATION, PUBLIC ORDER AND SAFETY, NATIONAL Information and Communications Technology, and Suffrage and
DEFENSE AND SECURITY, INFORMATION AND Electoral Reforms (respondent House Committees). During the
COMMUNICATIONS TECHNOLOGY, and SUFFRAGE AND inquiry, several versions of the wiretapped conversation emerged.
ELECTORAL REFORMS, respondents. But on July 5, 2005, National Bureau of Investigation (NBI) Director
Reynaldo Wycoco, Atty. Alan Paguia and the lawyer of former NBI
NACHURA, J.: Deputy Director Samuel Ong submitted to the respondent House
Committees seven alleged "original" tape recordings of the supposed
More than three years ago, tapes ostensibly containing a wiretapped three-hour taped conversation. After prolonged and impassioned
conversation purportedly between the President of the Philippines debate by the committee members on the admissibility and
and a high-ranking official of the Commission on Elections authenticity of the recordings, the tapes were eventually played in the
(COMELEC) surfaced. They captured unprecedented public attention chambers of the House.2
and thrust the country into a controversy that placed the legitimacy of
the present administration on the line, and resulted in the near- On August 3, 2005, the respondent House Committees decided to
collapse of the Arroyo government. The tapes, notoriously referred to suspend the hearings indefinitely. Nevertheless, they decided to
prepare committee reports based on the said recordings and the
testimonies of the resource persons.3
Alarmed by these developments, petitioner Virgilio O. Garcillano
(Garcillano) filed with this Court a Petition for Prohibition and
Injunction, with Prayer for Temporary Restraining Order and/or Writ
of Preliminary Injunction4 docketed as G.R. No. 170338. He prayed
that the respondent House Committees be restrained from using
these tape recordings of the "illegally obtained" wiretapped
conversations in their committee reports and for any other purpose.
He further implored that the said recordings and any reference
thereto be ordered stricken off the records of the inquiry, and the
respondent House Committees directed to desist from further using
the recordings in any of the House proceedings.5
Without reaching its denouement, the House discussion and debates
on the "Garci tapes" abruptly stopped.
After more than two years of quiescence, Senator Panfilo Lacson
roused the slumbering issue with a privilege speech, "The
Lighthouse That Brought Darkness." In his discourse, Senator
Lacson promised to provide the public "the whole unvarnished truth –
the what’s, when’s, where’s, who’s and why’s" of the alleged wiretap,
and sought an inquiry into the perceived willingness
telecommunications providers to participate in nefarious wiretapping
activities.
On motion of Senator Francis Pangilinan, Senator Lacson’s speech
was referred to the Senate Committee on National Defense and
Security, chaired by Senator Rodolfo Biazon, who had previously
filed two bills6 seeking to regulate the sale, purchase and use of
wiretapping equipment and to prohibit the Armed Forces of the
Philippines (AFP) from performing electoral duties.7
In the Senate’s plenary session the following day, a lengthy debate
ensued when Senator Richard Gordon aired his concern on the
possible transgression of Republic Act (R.A.) No. 42008 if the body
were to conduct a legislative inquiry on the matter. On August 28,
2007, Senator Miriam Defensor-Santiago delivered a privilege
speech, articulating her considered view that the Constitution
absolutely bans the use, possession, replay or communication of the
contents of the "Hello Garci" tapes. However, she recommended a
legislative investigation into the role of the Intelligence Service of the
AFP (ISAFP), the Philippine National Police or other government
entities in the alleged illegal wiretapping of public officials.9
On September 6, 2007, petitioners Santiago Ranada and Oswaldo
Agcaoili, retired justices of the Court of Appeals, filed before this
Court a Petition for Prohibition with Prayer for the Issuance of a
of Temporary Restraining Order and/or Writ of Preliminary Injunction,10
docketed as G.R. No. 179275, seeking to bar the Senate from
conducting its scheduled legislative inquiry. They argued in the main
that the intended legislative inquiry violates R.A. No. 4200 and
Section 3, Article III of the Constitution.11
As the Court did not issue an injunctive writ, the Senate proceeded
with its public hearings on the "Hello Garci" tapes on September 7,12
1713 and October 1,14 2007.
Intervening as respondents,15 Senators Aquilino Q. Pimentel, Jr.,
Benigno Noynoy C. Aquino, Rodolfo G. Biazon, Panfilo M. Lacson,
Loren B. Legarda, M.A. Jamby A.S. Madrigal and Antonio F.
Trillanes filed their Comment16 on the petition on September 25,
2007.
The Court subsequently heard the case on oral argument.17
On October 26, 2007, Maj. Lindsay Rex Sagge, a member of the
ISAFP and one of the resource persons summoned by the Senate to
appear and testify at its hearings, moved to intervene as petitioner in
G.R. No. 179275.18
On November 20, 2007, the Court resolved to consolidate G.R. Nos.
170338 and 179275.19
It may be noted that while both petitions involve the "Hello Garci"
recordings, they have different objectives–the first is poised at
preventing the playing of the tapes in the House and their
subsequent inclusion in the committee reports, and the second seeks
to prohibit and stop the conduct of the Senate inquiry on the
wiretapped conversation.
The Court dismisses the first petition, G.R. No. 170338, and grants
the second, G.R. No. 179275.
-I-
Before delving into the merits of the case, the Court shall first resolve
the issue on the parties’ standing, argued at length in their pleadings.
In Tolentino v. COMELEC,20 we explained that "‘[l]egal standing’ or
locus standi refers to a personal and substantial interest in a case
such that the party has sustained or will sustain direct injury because
of the challenged governmental act x x x," thus,
generally, a party will be allowed to litigate only when (1) he can
show that he has personally suffered some actual or threatened
injury because of the allegedly illegal conduct of the government; (2)
the injury is fairly traceable to the challenged action; and (3) the
injury is likely to be redressed by a favorable action.21
The gist of the question of standing is whether a party has "alleged
such a personal stake in the outcome of the controversy as to assure
that concrete adverseness which sharpens the presentation of issues
upon which the court so largely depends for illumination of difficult
constitutional questions."22
However, considering that locus standi is a mere procedural
technicality, the Court, in recent cases, has relaxed the stringent
direct injury test. David v. Macapagal-Arroyo23 articulates that a
"liberal policy has been observed, allowing ordinary citizens,
members of Congress, and civic organizations to prosecute actions
involving the constitutionality or validity of laws, regulations and
rulings."24 The fairly recent Chavez v. Gonzales25 even permitted a
non-member of the broadcast media, who failed to allege a personal
stake in the outcome of the controversy, to challenge the acts of the
Secretary of Justice and the National Telecommunications
Commission. The majority, in the said case, echoed the current
policy that "this Court has repeatedly and consistently refused to
wield procedural barriers as impediments to its addressing and
resolving serious legal questions that greatly impact on public
interest, in keeping with the Court’s duty under the 1987 Constitution
to determine whether or not other branches of government have kept
themselves within the limits of the Constitution and the laws, and that
they have not abused the discretion given to them."26
In G.R. No. 170338, petitioner Garcillano justifies his standing to
initiate the petition by alleging that he is the person alluded to in the
"Hello Garci" tapes. Further, his was publicly identified by the
members of the respondent committees as one of the voices in the
recordings.27 Obviously, therefore, petitioner Garcillano stands to be
directly injured by the House committees’ actions and charges of
electoral fraud. The Court recognizes his standing to institute the
petition for prohibition.
In G.R. No. 179275, petitioners Ranada and Agcaoili justify their
standing by alleging that they are concerned citizens, taxpayers, and
members of the IBP. They are of the firm conviction that any attempt
to use the "Hello Garci" tapes will further divide the country. They
wish to see the legal and proper use of public funds that will
necessarily be defrayed in the ensuing public hearings. They are
worried by the continuous violation of the laws and individual rights,
and the blatant attempt to abuse constitutional processes through the
conduct of legislative inquiries purportedly in aid of legislation.28
Intervenor Sagge alleges violation of his right to due process
considering that he is summoned to attend the Senate hearings
without being apprised not only of his rights therein through the
publication of the Senate Rules of Procedure Governing Inquiries in
Aid of Legislation, but also of the intended legislation which
underpins the investigation. He further intervenes as a taxpayer
bewailing the useless and wasteful expenditure of public funds
involved in the conduct of the questioned hearings.29
Given that petitioners Ranada and Agcaoili allege an interest in the
execution of the laws and that intervenor Sagge asserts his
constitutional right to due process,30 they satisfy the requisite
personal stake in the outcome of the controversy by merely being
citizens of the Republic.
Following the Court’s ruling in Francisco, Jr. v. The House of
Representatives,31 we find sufficient petitioners Ranada’s and
Agcaoili’s and intervenor Sagge’s allegation that the continuous
conduct by the Senate of the questioned legislative inquiry will
necessarily involve the expenditure of public funds.32 It should be
noted that in Francisco, rights personal to then Chief Justice Hilario
G. Davide, Jr. had been injured by the alleged unconstitutional acts
of the House of Representatives, yet the Court granted standing to
the petitioners therein for, as in this case, they invariably invoked the
vindication of their own rights–as taxpayers, members of Congress,
citizens, individually or in a class suit, and members of the bar and of
the legal profession–which were also supposedly violated by the
therein assailed unconstitutional acts.33
Likewise, a reading of the petition in G.R. No. 179275 shows that the
petitioners and intervenor Sagge advance constitutional issues which
deserve the attention of this Court in view of their seriousness,
novelty and weight as precedents. The issues are of transcendental
and paramount importance not only to the public but also to the
Bench and the Bar, and should be resolved for the guidance of all.34
Thus, in the exercise of its sound discretion and given the liberal
attitude it has shown in prior cases climaxing in the more recent case
of Chavez, the Court recognizes the legal standing of petitioners
Ranada and Agcaoili and intervenor Sagge.
- II -
The Court, however, dismisses G.R. No. 170338 for being moot and
academic. Repeatedly stressed in our prior decisions is the principle
that the exercise by this Court of judicial power is limited to the
determination and resolution of actual cases and controversies.35 By
actual cases, we mean existing conflicts appropriate or ripe for
judicial determination, not conjectural or anticipatory, for otherwise
the decision of the Court will amount to an advisory opinion. The
power of judicial inquiry does not extend to hypothetical questions
because any attempt at abstraction could only lead to dialectics and
barren legal questions and to sterile conclusions unrelated to
actualities.36 Neither will the Court determine a moot question in a
case in which no practical relief can be granted. A case becomes
moot when its purpose has become stale.37 It is unnecessary to
indulge in academic discussion of a case presenting a moot question
as a judgment thereon cannot have any practical legal effect or, in
the nature of things, cannot be enforced.38
In G.R. No. 170338, petitioner Garcillano implores from the Court, as
aforementioned, the issuance of an injunctive writ to prohibit the
respondent House Committees from playing the tape recordings and
from including the same in their committee report. He likewise prays
that the said tapes be stricken off the records of the House
proceedings. But the Court notes that the recordings were already
played in the House and heard by its members.39 There is also the
widely publicized fact that the committee reports on the "Hello Garci"
inquiry were completed and submitted to the House in plenary by the
respondent committees.40 Having been overtaken by these events,
the Garcillano petition has to be dismissed for being moot and
academic. After all, prohibition is a preventive remedy to restrain the
doing of an act about to be done, and not intended to provide a
remedy for an act already accomplished.41
- III -
As to the petition in G.R. No. 179275, the Court grants the same.
The Senate cannot be allowed to continue with the conduct of the
questioned legislative inquiry without duly published rules of
procedure, in clear derogation of the constitutional requirement.
Section 21, Article VI of the 1987 Constitution explicitly provides that
"[t]he Senate or the House of Representatives, or any of its
respective committees may conduct inquiries in aid of legislation in
accordance with its duly published rules of procedure." The requisite
of publication of the rules is intended to satisfy the basic
requirements of due process.42 Publication is indeed imperative, for
it will be the height of injustice to punish or otherwise burden a citizen
for the transgression of a law or rule of which he had no notice
whatsoever, not even a constructive one.43 What constitutes
publication is set forth in Article 2 of the Civil Code, which provides
that "[l]aws shall take effect after 15 days following the completion of
their publication either in the Official Gazette, or in a newspaper of
general circulation in the Philippines."44
The respondents in G.R. No. 179275 admit in their pleadings and
even on oral argument that the Senate Rules of Procedure
Governing Inquiries in Aid of Legislation had been published in
newspapers of general circulation only in 1995 and in 2006.45 With
respect to the present Senate of the 14th Congress, however, of
which the term of half of its members commenced on June 30, 2007,
no effort was undertaken for the publication of these rules when they
first opened their session.
Recently, the Court had occasion to rule on this very same question.
In Neri v. Senate Committee on Accountability of Public Officers and
Investigations,46 we said:
Fourth, we find merit in the argument of the OSG that respondent
Committees likewise violated Section 21 of Article VI of the
Constitution, requiring that the inquiry be in accordance with the
"duly published rules of procedure." We quote the OSG’s
explanation:

The phrase "duly published rules of procedure" requires the Senate
of every Congress to publish its rules of procedure governing
inquiries in aid of legislation because every Senate is distinct from
the one before it or after it. Since Senatorial elections are held every
three (3) years for one-half of the Senate’s membership, the
composition of the Senate also changes by the end of each term.
Each Senate may thus enact a different set of rules as it may deem
fit. Not having published its Rules of Procedure, the subject hearings
in aid of legislation conducted by the 14th Senate, are therefore,
procedurally infirm.
Justice Antonio T. Carpio, in his Dissenting and Concurring Opinion,
reinforces this ruling with the following rationalization:
The present Senate under the 1987 Constitution is no longer a
continuing legislative body. The present Senate has twenty-four
members, twelve of whom are elected every three years for a term of
six years each. Thus, the term of twelve Senators expires every
three years, leaving less than a majority of Senators to continue into
the next Congress. The 1987 Constitution, like the 1935 Constitution,
requires a majority of Senators to "constitute a quorum to do
business." Applying the same reasoning in Arnault v. Nazareno, the
Senate under the 1987 Constitution is not a continuing body because
less than majority of the Senators continue into the next Congress.
The consequence is that the Rules of Procedure must be
republished by the Senate after every expiry of the term of twelve
Senators.47
The subject was explained with greater lucidity in our Resolution48
(On the Motion for Reconsideration) in the same case, viz.:
On the nature of the Senate as a "continuing body," this Court sees
fit to issue a clarification. Certainly, there is no debate that the
Senate as an institution is "continuing," as it is not dissolved as an
entity with each national election or change in the composition of its
members. However, in the conduct of its day-to-day business the
Senate of each Congress acts separately and independently of the
Senate of the Congress before it. The Rules of the Senate itself
confirms this when it states:
RULE XLIV
UNFINISHED BUSINESS
SEC. 123. Unfinished business at the end of the session shall be
taken up at the next session in the same status.
All pending matters and proceedings shall terminate upon the
expiration of one (1) Congress, but may be taken by the succeeding
Congress as if present for the first time.
Undeniably from the foregoing, all pending matters and proceedings,
i.e., unpassed bills and even legislative investigations, of the Senate
of a particular Congress are considered terminated upon the
expiration of that Congress and it is merely optional on the Senate of
the succeeding Congress to take up such unfinished matters, not in
the same status, but as if presented for the first time. The logic and
practicality of such a rule is readily apparent considering that the
Senate of the succeeding Congress (which will typically have a
different composition as that of the previous Congress) should not be
bound by the acts and deliberations of the Senate of which they had
no part. If the Senate is a continuing body even with respect to the
conduct of its business, then pending matters will not be deemed
terminated with the expiration of one Congress but will, as a matter
of course, continue into the next Congress with the same status.
This dichotomy of the continuity of the Senate as an institution and of
the opposite nature of the conduct of its business is reflected in its
Rules. The Rules of the Senate (i.e. the Senate’s main rules of
procedure) states:
RULE LI
AMENDMENTS TO, OR REVISIONS OF, THE RULES
SEC. 136. At the start of each session in which the Senators elected
in the preceding elections shall begin their term of office, the
President may endorse the Rules to the appropriate committee for
amendment or revision.
The Rules may also be amended by means of a motion which should
be presented at least one day before its consideration, and the vote
of the majority of the Senators present in the session shall be
required for its approval.
RULE LII
DATE OF TAKING EFFECT
SEC. 137. These Rules shall take effect on the date of their adoption
and shall remain in force until they are amended or repealed.
Section 136 of the Senate Rules quoted above takes into account
the new composition of the Senate after an election and the
possibility of the amendment or revision of the Rules at the start of
each session in which the newly elected Senators shall begin their
term.
However, it is evident that the Senate has determined that its main
rules are intended to be valid from the date of their adoption until
they are amended or repealed. Such language is conspicuously
absent from the Rules. The Rules simply state "(t)hese Rules shall
take effect seven (7) days after publication in two (2) newspapers of
general circulation." The latter does not explicitly provide for the
continued effectivity of such rules until they are amended or
repealed. In view of the difference in the language of the two sets of
Senate rules, it cannot be presumed that the Rules (on legislative
inquiries) would continue into the next Congress. The Senate of the
next Congress may easily adopt different rules for its legislative
inquiries which come within the rule on unfinished business.
The language of Section 21, Article VI of the Constitution requiring
that the inquiry be conducted in accordance with the duly published
rules of procedure is categorical. It is incumbent upon the Senate to
publish the rules for its legislative inquiries in each Congress or
otherwise make the published rules clearly state that the same shall
be effective in subsequent Congresses or until they are amended or
repealed to sufficiently put public on notice.
If it was the intention of the Senate for its present rules on legislative
inquiries to be effective even in the next Congress, it could have
easily adopted the same language it had used in its main rules
regarding effectivity.
Respondents justify their non-observance of the constitutionally
mandated publication by arguing that the rules have never been
amended since 1995 and, despite that, they are published in booklet
form available to anyone for free, and accessible to the public at the
Senate’s internet web page.49
The Court does not agree. The absence of any amendment to the
rules cannot justify the Senate’s defiance of the clear and
unambiguous language of Section 21, Article VI of the Constitution.
The organic law instructs, without more, that the Senate or its
committees may conduct inquiries in aid of legislation only in
accordance with duly published rules of procedure, and does not
make any distinction whether or not these rules have undergone
amendments or revision. The constitutional mandate to publish the
said rules prevails over any custom, practice or tradition followed by
the Senate.
Justice Carpio’s response to the same argument raised by the
respondents is illuminating:
The publication of the Rules of Procedure in the website of the
Senate, or in pamphlet form available at the Senate, is not sufficient
under the Tañada v. Tuvera ruling which requires publication either
in the Official Gazette or in a newspaper of general circulation. The
Rules of Procedure even provide that the rules "shall take effect
seven (7) days after publication in two (2) newspapers of general
circulation," precluding any other form of publication. Publication in
accordance with Tañada is mandatory to comply with the due
process requirement because the Rules of Procedure put a person’s
liberty at risk. A person who violates the Rules of Procedure could be
arrested and detained by the Senate.
The invocation by the respondents of the provisions of R.A. No. Senate Committees, because no published rules governed it, in clear
8792,50 otherwise known as the Electronic Commerce Act of 2000, contravention of the Constitution.
to support their claim of valid publication through the internet is all
the more incorrect. R.A. 8792 considers an electronic data message With the foregoing disquisition, the Court finds it unnecessary to
or an electronic document as the functional equivalent of a written discuss the other issues raised in the consolidated petitions.
document only for evidentiary purposes.51 In other words, the law
merely recognizes the admissibility in evidence (for their being the WHEREFORE, the petition in G.R. No. 170338 is DISMISSED, and
original) of electronic data messages and/or electronic documents.52 the petition in G.R. No. 179275 is GRANTED. Let a writ of prohibition
It does not make the internet a medium for publishing laws, rules and be issued enjoining the Senate of the Republic of the Philippines
regulations. and/or any of its committees from conducting any inquiry in aid of
legislation centered on the "Hello Garci" tapes.
Given this discussion, the respondent Senate Committees, therefore,
could not, in violation of the Constitution, use its unpublished rules in
the legislative inquiry subject of these consolidated cases. The
conduct of inquiries in aid of legislation by the Senate has to be
deferred until it shall have caused the publication of the rules,
because it can do so only "in accordance with its duly published rules
of procedure."

Very recently, the Senate caused the publication of the Senate Rules
of Procedure Governing Inquiries in Aid of Legislation in the October
31, 2008 issues of Manila Bulletin and Malaya. While we take judicial
notice of this fact, the recent publication does not cure the infirmity of
the inquiry sought to be prohibited by the instant petitions. Insofar as
the consolidated cases are concerned, the legislative investigation
subject thereof still could not be undertaken by the respondent
 MANUELITO R. LUNA, Petitioner, 
vs.
G.R. No. 209287               July 1, 2014 SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY
AS HEAD OF THE DEPARTMENT OF BUDGET AND
MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG MANAGEMENT; AND EXECUTIVE SECRETARY PAQUITO
ALYANSANG MAKABAYAN; JUDY M. TAGUIWALO, OCHOA, IN HIS OFFICIAL CAPACITY AS ALTER EGO OF THE
PROFESSOR, UNIVERSITY OF THE PHILIPPINES DILIMAN, CO- PRESIDENT, Respondents.
CHAIRPERSON, PAGBABAGO; HENRI KAHN, CONCERNED
CITIZENS MOVEMENT; REP. LUZ ILAGAN, GABRIELA x-----------------------x
WOMEN'S PARTY REPRESENTATIVE; REP. CARLOS ISAGANI
ZARATE, BAY AN MUNA PARTY-LIST REPRESENTATIVE;
RENATO M. REYES, JR., SECRETARY GENERAL OF BAYAN; G.R. No. 209155
MANUEL K. DAYRIT, CHAIRMAN, ANG KAPATIRAN PARTY;
VENCER MARI E. CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; ATTY. JOSE MALV AR VILLEGAS, JR., Petitioner, 
VICTOR VILLANUEVA, CONVENOR, YOUTH ACT vs.
NOW, Petitioners,  THE HONORABLE EXECUTIVE SECRETARY PAQUITO N.
vs. OCHOA, JR.; AND THE SECRETARY OF BUDGET AND
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE MANAGEMENT FLORENCIO B. ABAD, Respondents.
REPUBLIC OF THE PHILIPPINES; PAQUITO N. OCHOA, JR.,
EXECUTIVE SECRETARY; AND FLORENCIO B. ABAD, x-----------------------x
SECRETARY OF THE DEPARTMENT OF BUDGET AND
MANAGEMENT, Respondents. G.R. No. 209164

x-----------------------x PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA),

REPRESENTED BY DEAN FROILAN M. BACUNGAN, BENJAMIN
G.R. No. 209135 E. DIOKNO AND LEONOR M. BRIONES, Petitioners, 
vs.
AUGUSTO L. SY JUCO JR., Ph.D., Petitioner,  DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON.
vs. FLORENCIO B. ABAD, Respondents.
FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY
OF DEPARTMENT OF BUDGET AND MANAGEMENT; AND HON. x-----------------------x
FRANKLIN MAGTUNAO DRILON, IN HIS CAP A CITY AS THE
SENATE PRESIDENT OF THE PHILIPPINES, Respondents. G.R. No. 209260

x-----------------------x INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner, 

vs.
G.R. No. 209136 SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF
BUDGET AND MANAGEMENT (DBM),Respondent.
x-----------------------x
G.R. No. 209442
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN
MABANTE AND REV. JOSE L. GONZALEZ,Petitioners, 
vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF
THE PHILIPPINES, REPRESENTED BY SENATE PRESIDENT
FRANKLIN M. DRILON; THE HOUSE OF REPRESENTATIVES,
REPRESENTED BY SPEAKER FELICIANO BELMONTE, JR.; THE
EXECUTIVE OFFICE, REPRESENTED BY EXECUTIVE
SECRETARY PAQUITO N. OCHOA, JR.; THE DEPARTMENT OF
BUDGET AND MANAGEMENT, REPRESENTED BY SECRETARY
FLORENCIO ABAD; THE DEPARTMENT OF FINANCE,
REPRESENTED BY SECRETARY CESAR V. PURISIMA; AND
THE BUREAU OF TREASURY, REPRESENTED BY ROSALIA V.
DE LEON, Respondents.
x-----------------------x
G.R. No. 209517
CONFEDERATION FOR UNITY, RECOGNITION AND ADV AN
CEMENT OF GOVERNMENT EMPLOYEES (COURAGE),
REPRESENTED BY ITS 1ST VICE PRESIDENT, SANTIAGO
DASMARINAS, JR.; ROSALINDA NARTATES, FOR HERSELF
AND AS NATIONAL PRESIDENT OF THE CONSOLIDATED
UNION OF EMPLOYEES NATIONAL HOUSING AUTHORITY
(CUENHA); MANUEL BACLAGON, FOR HIMSELF AND AS
PRESIDENT OF THE SOCIAL WELFARE EMPLOYEES
ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL
WELFARE AND DEVELOPMENT CENTRAL OFFICE (SWEAP-
DSWD CO); ANTONIA PASCUAL, FOR HERSELF AND AS
NATIONAL PRESIDENT OF THE DEPARTMENT OF AGRARIAN
REFORM EMPLOYEES ASSOCIATION (DAREA); ALBERT
MAGALANG, FOR HIMSELF AND AS PRESIDENT OF THE
ENVIRONMENT AND MANAGEMENT BUREAU EMPLOYEES
UNION (EMBEU); AND MARCIAL ARABA, FOR HIMSELF AND
AS PRESIDENT OF THE KAPISANAN PARA SA KAGALINGAN
NG MGA KAW ANI NG MMDA (KKKMMDA), Petitioners, 
vs.
BENIGNO SIMEON C. AQUINO Ill, PRESIDENT OF THE
REPUBLIC OF THE PHILIPPINES; PAQUITO OCHOA, JR.,
EXECUTIVE SECRETARY; AND HON. FLORENCIO B. ABAD,
SECRETARY OF THE DEPARTMENT OF BUDGET AND
MANAGEMENT, Respondents.
x-----------------------x
G.R. No. 209569
VOLUNTEERS AGAINST CRIME AND CORRUPTION (VACC),
REPRESENTED BY DANTE L. JIMENEZ,Petitioner, 
vs.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND
FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF
BUDGET AND MANAGEMENT, Respondents.
DECISION
BERSAMIN, J.:
For resolution are the consolidated petitions assailing the
constitutionality of the Disbursement Acceleration Program(DAP),
National Budget Circular (NBC) No. 541, and related issuances of
the Department of Budget and Management (DBM) implementing the
DAP.
At the core of the controversy is Section 29(1) of Article VI of the
1987 Constitution, a provision of the fundamental law that firmly
ordains that "[n]o money shall be paid out of the Treasury except in
pursuance of an appropriation made by law." The tenor and context
of the challenges posed by the petitioners against the DAP indicate
that the DAP contravened this provision by allowing the Executive to
allocate public money pooled from programmed and unprogrammed
funds of its various agencies in the guise of the President exercising
his constitutional authority under Section 25(5) of the 1987
Constitution to transfer funds out of savings to augment the
appropriations of offices within the Executive Branch of the
Government. But the challenges are further complicated by the
interjection of allegations of transfer of funds to agencies or offices
outside of the Executive.
Antecedents
What has precipitated the controversy?
On September 25, 2013, Sen. Jinggoy Ejercito Estrada delivered a
privilege speech in the Senate of the Philippines to reveal that some
Senators, including himself, had been allotted an additional ₱50
Million each as "incentive" for voting in favor of the impeachment of
Chief Justice Renato C. Corona.
Responding to Sen. Estrada’s revelation, Secretary Florencio Abad
of the DBM issued a public statement entitled Abad: Releases to
Senators Part of Spending Acceleration Program,1 explaining that the
funds released to the Senators had been part of the DAP, a program
designed by the DBM to ramp up spending to accelerate economic
expansion. He clarified that the funds had been released to the
Senators based on their letters of request for funding; and that it was
not the first time that releases from the DAP had been made
because the DAP had already been instituted in 2011 to ramp up
spending after sluggish disbursements had caused the growth of the
gross domestic product (GDP) to slow down. He explained that the
funds under the DAP were usually taken from (1) unreleased
appropriations under Personnel Services;2 (2) unprogrammed funds;
(3) carry-over appropriations unreleased from the previous year; and
(4) budgets for slow-moving items or projects that had been
realigned to support faster-disbursing projects.
The DBM soon came out to claim in its website3 that the DAP
releases had been sourced from savings generated by the
Government, and from unprogrammed funds; and that the savings
had been derived from (1) the pooling of unreleased appropriations,
like unreleased Personnel Services4 appropriations that would lapse
at the end of the year, unreleased appropriations of slow-moving
projects and discontinued projects per zero based budgeting
findings;5 and (2) the withdrawal of unobligated allotments also for
slow-moving programs and projects that had been earlier released to
the agencies of the National Government.
The DBM listed the following as the legal bases for the DAP’s use of
savings,6 namely: (1) Section 25(5), Article VI of the 1987
Constitution, which granted to the President the authority to augment
an item for his office in the general appropriations law; (2) Section 49
(Authority to Use Savings for Certain Purposes) and Section 38
(Suspension of Expenditure Appropriations), Chapter 5, Book VI of
Executive Order (EO) No. 292 (Administrative Code of 1987); and (3)
the General Appropriations Acts (GAAs) of 2011, 2012 and 2013,
particularly their provisions on the (a) use of savings; (b) meanings of
savings and augmentation; and (c) priority in the use of savings.
As for the use of unprogrammed funds under the DAP, the DBM
cited as legal bases the special provisions on unprogrammed fund
contained in the GAAs of 2011, 2012 and 2013.
The revelation of Sen. Estrada and the reactions of Sec. Abad and
the DBM brought the DAP to the consciousness of the Nation for the
first time, and made this present controversy inevitable. That the
issues against the DAP came at a time when the Nation was still
seething in anger over Congressional pork barrel – "an appropriation
of government spending meant for localized projects and secured
solely or primarily to bring money to a representative’s district"7 –
excited the Nation as heatedly as the pork barrel controversy.
Nine petitions assailing the constitutionality of the DAP and the
issuances relating to the DAP were filed within days of each other, as
follows: G.R. No. 209135 (Syjuco), on October 7, 2013; G.R. No.
209136 (Luna), on October 7, 2013; G.R. No. 209155 (Villegas), 8 on
October 16, 2013; G.R. No. 209164 (PHILCONSA), on October 8,
2013; G.R. No. 209260 (IBP), on October 16, 2013; G.R. No. 209287
(Araullo), on October 17, 2013; G.R. No. 209442 (Belgica), on
October 29, 2013; G.R. No. 209517 (COURAGE), on November6,
2013; and G.R. No. 209569 (VACC), on November 8, 2013.
In G.R. No. 209287 (Araullo), the petitioners brought to the Court’s
attention NBC No. 541 (Adoption of Operational Efficiency Measure
– Withdrawal of Agencies’ Unobligated Allotments as of June 30,
2012), alleging that NBC No. 541, which was issued to implement
the DAP, directed the withdrawal of unobligated allotments as of
June 30, 2012 of government agencies and offices with low levels of
obligations, both for continuing and current allotments.
In due time, the respondents filed their Consolidated Comment
through the Office of the Solicitor General (OSG).
The Court directed the holding of oral arguments on the significant
issues raised and joined.
Issues
Under the Advisory issued on November 14, 2013, the presentations
of the parties during the oral arguments were limited to the following,
to wit:
Procedural Issue:
A. Whether or not certiorari, prohibition, and mandamus are proper
remedies to assail the constitutionality and validity of the
Disbursement Acceleration Program (DAP), National Budget Circular
(NBC) No. 541, and all other executive issuances allegedly
implementing the DAP. Subsumed in this issue are whether there is
a controversy ripe for judicial determination, and the standing of
petitioners.
Substantive Issues:
B. Whether or not the DAP violates Sec. 29, Art. VI of the 1987
Constitution, which provides: "No money shall be paid out of the
Treasury except in pursuance of an appropriation made by law."
C. Whether or not the DAP, NBC No. 541, and all other executive
issuances allegedly implementing the DAP violate Sec. 25(5), Art. VI
of the 1987 Constitution insofar as:
(a)They treat the unreleased appropriations and
unobligated allotments withdrawn from government
agencies as "savings" as the term is used in Sec.
25(5), in relation to the provisions of the GAAs of
2011, 2012 and 2013;
(b)They authorize the disbursement of funds for
projects or programs not provided in the GAAs for
the Executive Department; and
(c)They "augment" discretionary lump sum
appropriations in the GAAs.
D. Whether or not the DAP violates: (1) the Equal Protection Clause,
(2) the system of checks and balances, and (3) the principle of public
accountability enshrined in the 1987 Constitution considering that it
authorizes the release of funds upon the request of legislators.
E. Whether or not factual and legal justification exists to issue a
temporary restraining order to restrain the implementation of the
DAP, NBC No. 541, and all other executive issuances allegedly
implementing the DAP.
In its Consolidated Comment, the OSG raised the matter of
unprogrammed funds in order to support its argument regarding the
President’s power to spend. During the oral arguments, the propriety
of releasing unprogrammed funds to support projects under the DAP
was considerably discussed. The petitioners in G.R. No. 209287
(Araullo) and G.R. No. 209442 (Belgica) dwelled on unprogrammed
funds in their respective memoranda. Hence, an additional issue for
the oral arguments is stated as follows:
F. Whether or not the release of unprogrammed funds under the
DAP was in accord with the GAAs.
During the oral arguments held on November 19, 2013, the Court
directed Sec. Abad to submit a list of savings brought under the DAP
that had been sourced from (a) completed programs; (b)
discontinued or abandoned programs; (c) unpaid appropriations for
compensation; (d) a certified copy of the President’s directive dated
June 27, 2012 referred to in NBC No. 541; and (e) all circulars or
orders issued in relation to the DAP.9
In compliance, the OSG submitted several documents, as follows:
(1) A certified copy of the Memorandum for the President
dated June 25, 2012 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and their Realignment);10
(2) Circulars and orders, which the respondents identified as
related to the DAP, namely:
a. NBC No. 528 dated January 3, 2011 (Guidelines
on the Release of Funds for FY 2011);
b. NBC No. 535 dated December 29, 2011
(Guidelines on the Release of Funds for FY 2012);
c. NBC No. 541 dated July 18, 2012 (Adoption of
Operational Efficiency Measure – Withdrawal of
Agencies’ Unobligated Allotments as of June 30,
2012);
d. NBC No. 545 dated January 2, 2013 (Guidelines
on the Release of Funds for FY 2013);
e. DBM Circular Letter No. 2004-2 dated January 26,
2004 (Budgetary Treatment of
Commitments/Obligations of the National
Government);
f. COA-DBM Joint Circular No. 2013-1 dated March
15, 2013 (Revised Guidelines on the Submission of
Quarterly Accountability Reports on Appropriations,
Allotments, Obligations and Disbursements);
g. NBC No. 440 dated January 30, 1995 (Adoption
of a Simplified Fund Release System in the
Government).
(3) A breakdown of the sources of savings, including savings
from discontinued projects and unpaid appropriations for
compensation from 2011 to 2013
On January 28, 2014, the OSG, to comply with the Resolution issued
on January 21, 2014 directing the respondents to submit the
documents not yet submitted in compliance with the directives of the
Court or its Members, submitted several evidence packets to aid the
Court in understanding the factual bases of the DAP, to wit:
(1) First Evidence Packet11 – containing seven memoranda
issued by the DBM through Sec. Abad, inclusive of annexes,
listing in detail the 116 DAP identified projects approved and
duly signed by the President, as follows:
a. Memorandum for the President dated October 12,
2011 (FY 2011 Proposed Disbursement Acceleration
Program (Projects and Sources of Funds);
b. Memorandum for the President dated December
12, 2011 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and its Realignment);
c. Memorandum for the President dated June 25,
2012 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and their Realignment);
d. Memorandum for the President dated September
4, 2012 (Release of funds for other priority projects
and expenditures of the Government);
 e. Memorandum for the President dated December
19, 2012 (Proposed Priority Projects and
Expenditures of the Government);
f. Memorandum for the President dated May 20,
2013 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and their Realignment
to Fund the Quarterly Disbursement Acceleration
Program); and
g. Memorandum for the President dated September
25, 2013 (Funding for the Task Force Pablo
Rehabilitation Plan).
(2) Second Evidence Packet12 – consisting of 15 applications
of the DAP, with their corresponding Special Allotment
Release Orders (SAROs) and appropriation covers;
(3) Third Evidence Packet13 – containing a list and
descriptions of 12 projects under the DAP;
(4) Fourth Evidence Packet14 – identifying the DAP-related
portions of the Annual Financial Report (AFR) of the
Commission on Audit for 2011 and 2012;
(5) Fifth Evidence Packet15 – containing a letter of
Department of Transportation and Communications(DOTC)
Sec. Joseph Abaya addressed to Sec. Abad recommending
the withdrawal of funds from his agency, inclusive of
annexes; and
(6) Sixth Evidence Packet16 – a print-out of the Solicitor
General’s visual presentation for the January 28, 2014 oral
arguments.
On February 5, 2014,17 the OSG forwarded the Seventh Evidence
Packet,18 which listed the sources of funds brought under the DAP,
the uses of such funds per project or activity pursuant to DAP, and
the legal bases thereof.
On February 14, 2014, the OSG submitted another set of documents
in further compliance with the Resolution dated January 28, 2014,
viz:
(1) Certified copies of the certifications issued by the Bureau of
Treasury to the effect that the revenue collections exceeded the
original revenue targets for the years 2011, 2012 and 2013, including
collections arising from sources not considered in the original
revenue targets, which certifications were required for the release of
the unprogrammed funds as provided in Special Provision No. 1 of
Article XLV, Article XVI, and Article XLV of the 2011, 2012 and 2013
GAAs; and (2) A report on releases of savings of the Executive
Department for the use of the Constitutional Commissions and other
branches of the Government, as well as the fund releases to the
Senate and the Commission on Elections (COMELEC).
RULING
I.
Procedural Issue:
a) The petitions under Rule 65 are proper remedies
All the petitions are filed under Rule 65 of the Rules of Court, and
include applications for the issuance of writs of preliminary
prohibitory injunction or temporary restraining orders. More
specifically, the nature of the petitions is individually set forth
hereunder, to wit:
Certiorari, Prohibition and
G.R. No. 209135 (Syjuco)
Mandamus
G.R. No. 209136 (Luna) Certiorariand Prohibition
G.R. No. 209155 (Villegas) Certiorariand Prohibition
 G.R. No. 209164
Certiorariand Prohibition
(PHILCONSA)
G.R. No. 209260 (IBP) Prohibition
G.R. No. 209287 (Araullo) Certiorariand Prohibition
G.R. No. 209442 (Belgica) Certiorari
G.R. No. 209517
Certiorari and Prohibition
(COURAGE)
G.R. No. 209569 (VACC) Certiorari and Prohibition
The respondents submit that there is no actual controversy that is
ripe for adjudication in the absence of adverse claims between the
parties;19 that the petitioners lacked legal standing to sue because no
allegations were made to the effect that they had suffered any injury
as a result of the adoption of the DAP and issuance of NBC No. 541;
that their being taxpayers did not immediately confer upon the
petitioners the legal standing to sue considering that the adoption
and implementation of the DAP and the issuance of NBC No. 541
were not in the exercise of the taxing or spending power of
Congress;20 and that even if the petitioners had suffered injury, there
were plain, speedy and adequate remedies in the ordinary course of
law available to them, like assailing the regularity of the DAP and
related issuances before the Commission on Audit (COA) or in the
trial courts.21
The respondents aver that the special civil actions of certiorari and
prohibition are not proper actions for directly assailing the
constitutionality and validity of the DAP, NBC No. 541, and the other
executive issuances implementing the DAP.22
In their memorandum, the respondents further contend that there is
no authorized proceeding under the Constitution and the Rules of
Court for questioning the validity of any law unless there is an actual
case or controversy the resolution of which requires the
determination of the constitutional question; that the jurisdiction of
the Court is largely appellate; that for a court of law to pass upon the
constitutionality of a law or any act of the Government when there is
no case or controversy is for that court to set itself up as a reviewer
of the acts of Congress and of the President in violation of the
principle of separation of powers; and that, in the absence of a
pending case or controversy involving the DAP and NBC No. 541,
any decision herein could amount to a mere advisory opinion that no
court can validly render.23
The respondents argue that it is the application of the DAP to actual
situations that the petitioners can question either in the trial courts or
in the COA; that if the petitioners are dissatisfied with the ruling either
of the trial courts or of the COA, they can appeal the decision of the
trial courts by petition for review on certiorari, or assail the decision
or final order of the COA by special civil action for certiorari under
Rule 64 of the Rules of Court.24
The respondents’ arguments and submissions on the procedural
issue are bereft of merit.
Section 1, Article VIII of the 1987 Constitution expressly provides:
Section 1. The judicial power shall be vested in one Supreme Court
and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable
and enforceable, and 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.
Thus, the Constitution vests judicial power in the Court and in such
lower courts as may be established by law. In creating a lower court,
Congress concomitantly determines the jurisdiction of that court, and
that court, upon its creation, becomes by operation of the
Constitution one of the repositories of judicial power.25 However, only
the Court is a constitutionally created court, the rest being created by
Congress in its exercise of the legislative power.
The Constitution states that judicial power includes the duty of the
courts of justice not only "to settle actual controversies involving
rights which are legally demandable and enforceable" but also "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." It has thereby expanded the
concept of judicial power, which up to then was confined to its
traditional ambit of settling actual controversies involving rights that
were legally demandable and enforceable.
The background and rationale of the expansion of judicial power
under the 1987 Constitution were laid out during the deliberations of
the 1986 Constitutional Commission by Commissioner Roberto R.
Concepcion (a former Chief Justice of the Philippines) in his
sponsorship of the proposed provisions on the Judiciary, where he
said:–
The Supreme Court, like all other courts, has one main function: to
settle actual controversies involving conflicts of rights which are
demandable and enforceable. There are rights which are guaranteed
by law but cannot be enforced by a judicial party. In a decided case,
a husband complained that his wife was unwilling to perform her
duties as a wife. The Court said: "We can tell your wife what her
duties as such are and that she is bound to comply with them, but we
cannot force her physically to discharge her main marital duty to her
husband. There are some rights guaranteed by law, but they are so
personal that to enforce them by actual compulsion would be highly
derogatory to human dignity." This is why the first part of the second
paragraph of Section 1 provides that: Judicial power includes the
duty of courts to settle actual controversies involving rights which are
legally demandable or enforceable…
The courts, therefore, cannot entertain, much less decide,
hypothetical questions. In a presidential system of government, the
Supreme Court has, also, another important function. The powers of
government are generally considered divided into three branches:
the Legislative, the Executive and the Judiciary. Each one is
supreme within its own sphere and independent of the others.
Because of that supremacy power to determine whether a given law
is valid or not is vested in courts of justice.
Briefly stated, courts of justice determine the limits of power of the
agencies and offices of the government as well as those of its
officers. In other words, the judiciary is the final arbiter on the
question whether or not a branch of government or any of its officials
has acted without jurisdiction or in excess of jurisdiction, or so
capriciously as to constitute an abuse of discretion amounting to
excess of jurisdiction or lack of jurisdiction. This is not only a judicial
power but a duty to pass judgmenton matters of this nature.
This is the background of paragraph 2 of Section 1, which means
that the courts cannot hereafter evade the duty to settle matters of
this nature, by claiming that such matters constitute a political
question. (Bold emphasis supplied)26
Upon interpellation by Commissioner Nolledo, Commissioner
Concepcion clarified the scope of judicial power in the following
manner:–
MR. NOLLEDO. x x x
The second paragraph of Section 1 states: "Judicial power includes
the duty of courts of justice to settle actual controversies…" The term
"actual controversies" according to the Commissioner should refer to
questions which are political in nature and, therefore, the courts
should not refuse to decide those political questions. But do I
understand it right that this is restrictive or only an example? I know
there are cases which are not actual yet the court can assume
jurisdiction. An example is the petition for declaratory relief.
May I ask the Commissioner’s opinion about that?
MR. CONCEPCION. The Supreme Court has no jurisdiction to grant
declaratory judgments.
MR. NOLLEDO. The Gentleman used the term "judicial power" but
judicial power is not vested in the Supreme Court alone but also in
other lower courts as may be created by law.
MR. CONCEPCION. Yes.
MR. NOLLEDO. And so, is this only an example?
MR. CONCEPCION. No, I know this is not. The Gentleman seems to
identify political questions with jurisdictional questions. But there is a
difference.
MR. NOLLEDO. Because of the expression "judicial power"?
MR. CONCEPCION. No. Judicial power, as I said, refers to ordinary
cases but where there is a question as to whether the government
had authority or had abused its authority to the extent of lacking
jurisdiction or excess of jurisdiction, that is not a political question.
Therefore, the court has the duty to decide.27
Our previous Constitutions equally recognized the extent of the
power of judicial review and the great responsibility of the Judiciary in
maintaining the allocation of powers among the three great branches
of Government. Speaking for the Court in Angara v. Electoral
Commission,28 Justice Jose P. Laurel intoned:
x x x In times of social disquietude or political excitement, the great
landmarks of the Constitution are apt to be forgotten or marred, if not
entirely obliterated. In cases of conflict, the judicial department is the
only constitutional organ which can be called upon to determine the
proper allocation of powers between the several department and
among the integral or constituent units thereof.
xxxx
The Constitution is a definition of the powers of government. Who is
to determine the nature, scope and extent of such powers? The
Constitution itself has provided for the instrumentality of the judiciary
as the rational way. And when the judiciary mediates to allocate
constitutional boundaries, it does not assert any superiority over the
other department; it does not in reality nullify or invalidate an act of
the legislature, but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an
actual controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in what is
termed "judicial supremacy" which properly is the power of judicial
review under the Constitution. x x x29
What are the remedies by which the grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch
or instrumentality of the Government may be determined under the
Constitution?
The present Rules of Court uses two special civil actions for
determining and correcting grave abuse of discretion amounting to
lack or excess of jurisdiction. These are the special civil actions for
certiorari and prohibition, and both are governed by Rule 65. A
similar remedy of certiorari exists under Rule 64, but the remedy is
expressly applicable only to the judgments and final orders or
resolutions of the Commission on Elections and the Commission on
Audit.
The ordinary nature and function of the writ of certiorari in our
present system are aptly explained in Delos Santos v. Metropolitan
Bank and Trust Company:30
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.
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. Section 1, Rule 65 of the
Rules of Court compellingly provides the requirements for that
purpose, viz:
xxxx
The sole office of the writ of certiorari is the correction of errors of
jurisdiction, which includes the commission of grave abuse of
discretion amounting to lack of jurisdiction. In this regard, mere
abuse of discretion is not enough to warrant the issuance of the writ.
The abuse of discretion must be grave, which means either that the
judicial or quasi-judicial power was exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, or that
the respondent judge, tribunal or board evaded a positive duty, or
virtually refused to perform the duty enjoined or to act in
contemplation of law, such as when such judge, tribunal or board
exercising judicial or quasi-judicial powers acted in a capricious or
whimsical manner as to be equivalent to lack of jurisdiction.31
Although similar to prohibition in that it will lie for want or excess of
jurisdiction, certiorari is to be distinguished from prohibition by the
fact that it is a corrective remedy used for the re-examination of
some action of an inferior tribunal, and is directed to the cause or
proceeding in the lower court and not to the court itself, while
prohibition is a preventative remedy issuing to restrain future action,
and is directed to the court itself. 32 The Court expounded on the
nature and function of the writ of prohibition in Holy Spirit
Homeowners Association, Inc. v. Defensor:33
A petition for prohibition is also not the proper remedy to assail an
IRR issued in the exercise of a quasi-legislative function. Prohibition
is an extraordinary writ directed against any tribunal, corporation,
board, officer or person, whether exercising judicial, quasi-judicial or
ministerial functions, ordering said entity or person to desist from
further proceedings when said proceedings are without or in excess
of said entity’s or person’s jurisdiction, or are accompanied with
grave abuse of discretion, and there is no appeal or any other plain,
speedy and adequate remedy in the ordinary course of law.
Prohibition lies against judicial or ministerial functions, but not
against legislative or quasi-legislative functions. Generally, the
purpose of a writ of prohibition is to keep a lower court within the
limits of its jurisdiction in order to maintain the administration of
justice in orderly channels. Prohibition is the proper remedy to afford
relief against usurpation of jurisdiction or power by an inferior court,
or when, in the exercise of jurisdiction in handling matters clearly
within its cognizance the inferior court transgresses the bounds
prescribed to it by the law, or where there is no adequate remedy
available in the ordinary course of law by which such relief can be
obtained. Where the principal relief sought is to invalidate an IRR,
petitioners’ remedy is an ordinary action for its nullification, an action
which properly falls under the jurisdiction of the Regional Trial Court.
In any case, petitioners’ allegation that "respondents are performing
or threatening to perform functions without or in excess of their
jurisdiction" may appropriately be enjoined by the trial court through
a writ of injunction or a temporary restraining order.
With respect to the Court, however, the remedies of certiorari and
prohibition are necessarily broader in scope and reach, and the writ
of certiorari or prohibition may be issued to correct errors of
jurisdiction committed not only by a tribunal, corporation, board or
officer exercising judicial, quasi-judicial or ministerial functions but
also to set right, undo and restrain any act of grave abuse of
discretion amounting to lack or excess of jurisdiction by any branch
or instrumentality of the Government, even if the latter does not
exercise judicial, quasi-judicial or ministerial functions. This
application is expressly authorized by the text of the second
paragraph of Section 1, supra.
Thus, petitions for certiorari and prohibition are appropriate remedies
to raise constitutional issues and to review and/or prohibit or nullify
the acts of legislative and executive officials.34
Necessarily, in discharging its duty under Section 1, supra, to set
right and undo any act of grave abuse of discretion amounting to lack
or excess of jurisdiction by any branch or instrumentality of the
Government, the Court is not at all precluded from making the inquiry
provided the challenge was properly brought by interested or
affected parties. The Court has been thereby entrusted expressly or
by necessary implication with both the duty and the obligation of
determining, in appropriate cases, the validity of any assailed
legislative or executive action. This entrustment is consistent with the
republican system of checks and balances.35
Following our recent dispositions concerning the congressional pork
barrel, the Court has become more alert to discharge its
constitutional duty. We will not now refrain from exercising our
expanded judicial power in order to review and determine, with
authority, the limitations on the Chief Executive’s spending power.
b) Requisites for the exercise of the
power of judicial review were
complied with
The requisites for the exercise of the power of judicial review are the
following, namely: (1) there must bean actual case or justiciable
controversy before the Court; (2) the question before the Court must
be ripe for adjudication; (3) the person challenging the act must be a
proper party; and (4) the issue of constitutionality must be raised at
the earliest opportunity and must be the very litis mota of the case.36
The first requisite demands that there be an actual case calling for
the exercise of judicial power by the Court.37 An actual case or
controversy, in the words of Belgica v. Executive Secretary Ochoa:38
x x x 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. In
other words, "[t]here must be a contrariety of legal rights that can be
interpreted and enforced on the basis of existing law and
jurisprudence." Related to the requirement of an actual case or
controversy is the requirement of "ripeness," meaning that the
questions raised for constitutional scrutiny are already ripe for
adjudication. "A question is ripe for adjudication when the act being
challenged has had a direct adverse effect on the individual
challenging it. It is a prerequisite 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." "Withal, courts will decline to pass upon
constitutional issues through advisory opinions, bereft as they are of
authority to resolve hypothetical or moot questions."
An actual and justiciable controversy exists in these consolidated
cases. The incompatibility of the perspectives of the parties on the
constitutionality of the DAP and its relevant issuances satisfy the
requirement for a conflict between legal rights. The issues being
raised herein meet the requisite ripeness considering that the
challenged executive acts were already being implemented by the
DBM, and there are averments by the petitioners that such
implementation was repugnant to the letter and spirit of the
Constitution. Moreover, the implementation of the DAP entailed the
allocation and expenditure of huge sums of public funds. The fact
that public funds have been allocated, disbursed or utilized by reason
or on account of such challenged executive acts gave rise, therefore,
to an actual controversy that is ripe for adjudication by the Court.
It is true that Sec. Abad manifested during the January 28, 2014 oral
arguments that the DAP as a program had been meanwhile
discontinued because it had fully served its purpose, saying: "In
conclusion, Your Honors, may I inform the Court that because the
DAP has already fully served its purpose, the Administration’s
economic managers have recommended its termination to the
President. x x x."39
The Solicitor General then quickly confirmed the termination of the
DAP as a program, and urged that its termination had already
mooted the challenges to the DAP’s constitutionality, viz:
DAP as a program, no longer exists, thereby mooting these present
cases brought to challenge its constitutionality. Any constitutional
challenge should no longer be at the level of the program, which is
now extinct, but at the level of its prior applications or the specific
disbursements under the now defunct policy. We challenge the
petitioners to pick and choose which among the 116 DAP projects
they wish to nullify, the full details we will have provided by February
5. We urge this Court to be cautious in limiting the constitutional
authority of the President and the Legislature to respond to the
dynamic needs of the country and the evolving demands of
governance, lest we end up straight jacketing our elected
representatives in ways not consistent with our constitutional
structure and democratic principles.40
A moot and academic case is one that ceases to present a justiciable
controversy by virtue of supervening events, so that a declaration
thereon would be of no practical use or value.41
The Court cannot agree that the termination of the DAP as a
program was a supervening event that effectively mooted these
consolidated cases. Verily, the Court had in the past exercised its
power of judicial review despite the cases being rendered moot and
academic by supervening events, like: (1) when there was a grave
violation of the Constitution; (2) when the case involved a situation of
exceptional character and was of paramount public interest; (3) when
the constitutional issue raised required the formulation of controlling
principles to guide the Bench, the Bar and the public; and (4) when
the case was capable of repetition yet evading review.42
Assuming that the petitioners’ several submissions against the DAP
were ultimately sustained by the Court here, these cases would
definitely come under all the exceptions. Hence, the Court should not
abstain from exercising its power of judicial review.
Did the petitioners have the legal standing to sue?
Legal standing, as a requisite for the exercise of judicial review,
refers to "a right of appearance in a court of justice on a given
question."43 The concept of legal standing, or locus standi, was
particularly discussed in De Castro v. Judicial and Bar
Council,44 where the Court said:
In public or constitutional litigations, the Court is often burdened with
the determination of the locus standi of the petitioners due to the
ever-present need to regulate the invocation of the intervention of the
Court to correct any official action or policy in order to avoid
obstructing the efficient functioning of public officials and offices
involved in public service. It is required, therefore, that the petitioner
must have a personal stake in the outcome of the controversy, for, as
indicated in Agan, Jr. v. Philippine International Air Terminals Co.,
Inc.:
The question on legal standing is whether such parties have "alleged
such a personal stake in the outcome of the controversy as to assure
that concrete adverseness which sharpens the presentation of issues
upon which the court so largely depends for illumination of difficult
constitutional questions." Accordingly, it has been held that the
interest of a person assailing the constitutionality of a statute must be
direct and personal. He must be able to show, not only that the law
or any government act is invalid, but also that he sustained or is in
imminent danger of sustaining some direct injury as a result of its
enforcement, and not merely that he suffers thereby in some
indefinite way. It must appear that the person complaining has been
or is about to be denied some right or privilege to which he is lawfully
entitled or that he is about to be subjected to some burdens or
penalties by reason of the statute or act complained of.
It is true that as early as in 1937, in People v. Vera, the Court
adopted the direct injury test for determining whether a petitioner in a
public action had locus standi. There, the Court held that the person
who would assail the validity of a statute must have "a personal and
substantial interest in the case such that he has sustained, or will
sustain direct injury as a result." Vera was followed in Custodio v.
President of the Senate, Manila Race Horse Trainers’ Association v.
De la Fuente, Anti-Chinese League of the Philippines v. Felix, and
Pascual v. Secretary of Public Works.
Yet, the Court has also held that the requirement of locus standi,
being a mere procedural technicality, can be waived by the Court in
the exercise of its discretion. For instance, in 1949, in Araneta v.
Dinglasan, the Court liberalized the approach when the cases had
"transcendental importance." Some notable controversies whose
petitioners did not pass the direct injury test were allowed to be
treated in the same way as in Araneta v. Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this
Court decided to resolve the issues raised by the petition due to their
"far reaching implications," even if the petitioner had no personality to
file the suit. The liberal approach of Aquino v. Commission on
Elections has been adopted in several notable cases, permitting
ordinary citizens, legislators, and civic organizations to bring their
suits involving the constitutionality or validity of laws, regulations, and
rulings.
However, the assertion of a public right as a predicate for challenging
a supposedly illegal or unconstitutional executive or legislative action
rests on the theory that the petitioner represents the public in
general. Although such petitioner may not be as adversely affected
by the action complained against as are others, it is enough that he
sufficiently demonstrates in his petition that he is entitled to
protection or relief from the Court in the vindication of a public right.
Quite often, as here, the petitioner in a public action sues as a citizen
or taxpayer to gain locus standi. That is not surprising, for even if the
issue may appear to concern only the public in general, such
capacities nonetheless equip the petitioner with adequate interest to
sue. In David v. Macapagal-Arroyo, the Court aptly explains why:
Case law in most jurisdiction snow allows both "citizen" and
"taxpayer" standing in public actions. The distinction was first laid
down in Beauchamp v. Silk, where it was held that the plaintiff in a
taxpayer’s suit is in a different category from the plaintiff in a citizen’s
suit. In the former, the plaintiff is affected by the expenditure of public
funds, while in the latter, he is but the mere instrument of the public
concern. As held by the New York Supreme Court in People ex rel
Case v. Collins: "In matter of mere public right, however…the people
are the real parties…It is at least the right, if not the duty, of every
citizen to interfere and see that a public offence be properly pursued
and punished, and that a public grievance be remedied." With
respect to taxpayer’s suits, Terr v. Jordan held that "the right of a
citizen and a taxpayer to maintain an action in courts to restrain the
unlawful use of public funds to his injury cannot be denied."45
The Court has cogently observed in Agan, Jr. v. Philippine
International Air Terminals Co., Inc.46 that "[s]tanding is a peculiar
concept in constitutional law because in some cases, suits are not
brought by parties who have been personally injured by the operation
of a law or any other government act but by concerned citizens,
taxpayers or voters who actually sue in the public interest."
Except for PHILCONSA, a petitioner in G.R. No. 209164, the
petitioners have invoked their capacities as taxpayers who, by
averring that the issuance and implementation of the DAP and its
relevant issuances involved the illegal disbursements of public funds,
have an interest in preventing the further dissipation of public funds.
The petitioners in G.R. No. 209287 (Araullo) and G.R. No. 209442
(Belgica) also assert their right as citizens to sue for the enforcement
and observance of the constitutional limitations on the political
branches of the Government.47
On its part, PHILCONSA simply reminds that the Court has long
recognized its legal standing to bring cases upon constitutional
issues.48 Luna, the petitioner in G.R. No. 209136, cites his additional
capacity as a lawyer. The IBP, the petitioner in G.R. No. 209260,
stands by "its avowed duty to work for the rule of law and of
paramount importance of the question in this action, not to mention
its civic duty as the official association of all lawyers in this country."49
Under their respective circumstances, each of the petitioners has
established sufficient interest in the outcome of the controversy as to
confer locus standi on each of them.
In addition, considering that the issues center on the extent of the
power of the Chief Executive to disburse and allocate public funds,
whether appropriated by Congress or not, these cases pose issues
that are of transcendental importance to the entire Nation, the
petitioners included. As such, the determination of such important
issues call for the Court’s exercise of its broad and wise discretion
"to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions
raised."50
II.
Substantive Issues
1.
Overview of the Budget System
An understanding of the Budget System of the Philippines will aid the
Court in properly appreciating and justly resolving the substantive
issues.
a) Origin of the Budget System
The term "budget" originated from the Middle English word bouget
that had derived from the Latin word bulga (which means bag or
purse).51
In the Philippine setting, Commonwealth Act (CA) No. 246 (Budget
Act) defined "budget" as the financial program of the National
Government for a designated fiscal year, consisting of the
statements of estimated receipts and expenditures for the fiscal year
for which it was intended to be effective based on the results of
operations during the preceding fiscal years. The term was given a
different meaning under Republic Act No. 992 (Revised Budget Act)
by describing the budget as the delineation of the services and
products, or benefits that would accrue to the public together with the
estimated unit cost of each type of service, product or benefit. 52 For a
forthright definition, budget should simply be identified as the
financial plan of the Government,53 or "the master plan of
government."54
The concept of budgeting has not been the product of recent
economies. In reality, financing public goals and activities was an
idea that existed from the creation of the State.55 To protect the
people, the territory and sovereignty of the State, its government
must perform vital functions that required public expenditures. At the
beginning, enormous public expenditures were spent for war
activities, preservation of peace and order, security, administration of
justice, religion, and supply of limited goods and services.56 In order
to finance those expenditures, the State raised revenues through
taxes and impositions.57 Thus, budgeting became necessary to
allocate public revenues for specific government functions.58 The
State’s budgeting mechanism eventually developed through the
years with the growing functions of its government and changes in its
market economy.
The Philippine Budget System has been greatly influenced by
western public financial institutions. This is because of the country’s
past as a colony successively of Spain and the United States for a
long period of time. Many aspects of the country’s public fiscal
administration, including its Budget System, have been naturally
patterned after the practices and experiences of the western public
financial institutions. At any rate, the Philippine Budget System is
presently guided by two principal objectives that are vital to the
development of a progressive democratic government, namely: (1) to
carry on all government activities under a comprehensive fiscal plan
developed, authorized and executed in accordance with the
Constitution, prevailing statutes and the principles of sound public
management; and (2) to provide for the periodic review and
disclosure of the budgetary status of the Government in such detail
so that persons entrusted by law with the responsibility as well as the
enlightened citizenry can determine the adequacy of the budget
actions taken, authorized or proposed, as well as the true financial
position of the Government.59
b) Evolution of the Philippine Budget System
The budget process in the Philippines evolved from the early years of
the American Regime up to the passage of the Jones Law in 1916. A
Budget Office was created within the Department of Finance by the
Jones Law to discharge the budgeting function, and was given the
responsibility to assist in the preparation of an executive budget for
submission to the Philippine Legislature.60
As early as under the 1935 Constitution, a budget policy and a
budget procedure were established, and subsequently strengthened
through the enactment of laws and executive acts.61 EO No. 25,
issued by President Manuel L. Quezon on April 25, 1936, created the
Budget Commission to serve as the agency that carried out the
President’s responsibility of preparing the budget.62 CA No. 246, the
first budget law, went into effect on January 1, 1938 and established
the Philippine budget process. The law also provided a line-item
budget as the framework of the Government’s budgeting
system,63 with emphasis on the observance of a "balanced budget"
to tie up proposed expenditures with existing revenues.
CA No. 246 governed the budget process until the passage on June
4, 1954 of Republic Act (RA) No. 992,whereby Congress introduced
performance-budgeting to give importance to functions, projects and
activities in terms of expected results.64 RA No. 992 also enhanced
the role of the Budget Commission as the fiscal arm of the
Government.65
The 1973 Constitution and various presidential decrees directed a
series of budgetary reforms that culminated in the enactment of PD
No. 1177 that President Marcos issued on July30, 1977, and of PD
No. 1405, issued on June 11, 1978. The latter decree converted the
Budget Commission into the Ministry of Budget, and gave its head
the rank of a Cabinet member.
The Ministry of Budget was later renamed the Office of Budget and
Management (OBM) under EO No. 711. The OBM became the DBM
pursuant to EO No. 292 effective on November 24, 1989.
66
c) The Philippine Budget Cycle
Four phases comprise the Philippine budget process, specifically: (1)
Budget Preparation; (2) Budget Legislation; (3) Budget Execution;
and (4) Accountability. Each phase is distinctly separate from the
others but they overlap in the implementation of the budget during
the budget year.
c.1.Budget Preparation67
The budget preparation phase is commenced through the issuance
of a Budget Call by the DBM. The Budget Call contains budget
parameters earlier set by the Development Budget Coordination
Committee (DBCC) as well as policy guidelines and procedures to
aid government agencies in the preparation and submission of their
budget proposals. The Budget Call is of two kinds, namely: (1) a
National Budget Call, which is addressed to all agencies, including
state universities and colleges; and (2) a Corporate Budget Call,
which is addressed to all government-owned and -controlled
corporations (GOCCs) and government financial institutions (GFIs).
Following the issuance of the Budget Call, the various departments
and agencies submit their respective Agency Budget Proposals to
the DBM. To boost citizen participation, the current administration
has tasked the various departments and agencies to partner with civil
society organizations and other citizen-stakeholders in the
preparation of the Agency Budget Proposals, which proposals are
then presented before a technical panel of the DBM in scheduled
budget hearings wherein the various departments and agencies are
given the opportunity to defend their budget proposals. DBM bureaus
thereafter review the Agency Budget Proposals and come up with
recommendations for the Executive Review Board, comprised by the
DBM Secretary and the DBM’s senior officials. The discussions of
the Executive Review Board cover the prioritization of programs and
their corresponding support vis-à-vis the priority agenda of the
National Government, and their implementation.
The DBM next consolidates the recommended agency budgets into
the National Expenditure Program (NEP)and a Budget of
Expenditures and Sources of Financing (BESF). The NEP provides
the details of spending for each department and agency by program,
activity or project (PAP), and is submitted in the form of a proposed
GAA. The Details of Selected Programs and Projects is the more
detailed disaggregation of key PAPs in the NEP, especially those in
line with the National Government’s development plan. The Staffing
Summary provides the staffing complement of each department and
agency, including the number of positions and amounts allocated.
The NEP and BESF are thereafter presented by the DBM and the
DBCC to the President and the Cabinet for further refinements or
reprioritization. Once the NEP and the BESF are approved by the
President and the Cabinet, the DBM prepares the budget documents
for submission to Congress. The budget documents consist of: (1)
the President’s Budget Message, through which the President
explains the policy framework and budget priorities; (2) the BESF,
mandated by Section 22, Article VII of the Constitution,68 which
contains the macroeconomic assumptions, public sector context,
breakdown of the expenditures and funding sources for the fiscal
year and the two previous years; and (3) the NEP.
Public or government expenditures are generally classified into two
categories, specifically: (1) capital expenditures or outlays; and (2)
current operating expenditures. Capital expenditures are the
expenses whose usefulness lasts for more than one year, and which
add to the assets of the Government, including investments in the
capital of government-owned or controlled corporations and their
subsidiaries.69 Current operating expenditures are the purchases of
goods and services in current consumption the benefit of which does
not extend beyond the fiscal year.70 The two components of current
expenditures are those for personal services (PS), and those for
maintenance and other operating expenses(MOOE).
Public expenditures are also broadly grouped according to their
functions into: (1) economic development expenditures (i.e.,
expenditures on agriculture and natural resources, transportation and
communications, commerce and industry, and other economic
development efforts);71 (2) social services or social development
expenditures (i.e., government outlay on education, public health and
medicare, labor and welfare and others);72 (3) general government or
general public services expenditures (i.e., expenditures for the
general government, legislative services, the administration of
justice, and for pensions and gratuities);73 (4) national defense
expenditures (i.e., sub-divided into national security expenditures
and expenditures for the maintenance of peace and order); 74 and (5)
public debt.75
Public expenditures may further be classified according to the nature
of funds, i.e., general fund, special fund or bond fund.76
On the other hand, public revenues complement public expenditures
and cover all income or receipts of the government treasury used to
support government expenditures.77
Classical economist Adam Smith categorized public revenues based
on two principal sources, stating: "The revenue which must defray…
the necessary expenses of government may be drawn either, first
from some fund which peculiarly belongs to the sovereign or
commonwealth, and which is independent of the revenue of the
people, or, secondly, from the revenue of the people." 78 Adam
Smith’s classification relied on the two aspects of the nature of the
State: first, the State as a juristic person with an artificial personality,
and, second, the State as a sovereign or entity possessing supreme
power. Under the first aspect, the State could hold property and
engage in trade, thereby deriving what is called its quasi private
income or revenues, and which "peculiarly belonged to the
sovereign." Under the second aspect, the State could collect by
imposing charges on the revenues of its subjects in the form of
taxes.79
In the Philippines, public revenues are generally derived from the
following sources, to wit: (1) tax revenues(i.e., compulsory
contributions to finance government activities); 80 (2) capital
revenues(i.e., proceeds from sales of fixed capital assets or scrap
thereof and public domain, and gains on such sales like sale of
public lands, buildings and other structures, equipment, and other
properties recorded as fixed assets); 81 (3) grants(i.e., voluntary
contributions and aids given to the Government for its operation on
specific purposes in the form of money and/or materials, and do not
require any monetary commitment on the part of the recipient);82 (4)
extraordinary income(i.e., repayment of loans and advances made
by government corporations and local governments and the receipts
and shares in income of the Banko Sentral ng Pilipinas, and other
receipts);83 and (5) public borrowings(i.e., proceeds of repayable
obligations generally with interest from domestic and foreign
creditors of the Government in general, including the National
Government and its political subdivisions).84
More specifically, public revenues are classified as follows:85
General Income Specific Income Initially, the President’s Budget is assigned to the House of
Representatives’ Appropriations Committee on First Reading. The
Subsidy Income from
Income TaxesNational
Appropriations Committee and its various Sub-Committees schedule
Government Property Taxes and conduct budget hearings to examine the PAPs of the
Subsidy from Central Office Taxes on Goods and Services departments and agencies. Thereafter, the House of
87
Subsidy from Taxes Regional
on International Trade Representatives
and drafts the General Appropriations Bill (GAB).
Office/Staff Bureaus Transactions
Income from Government
Other Taxes 6.Fines and Penalties-Tax Revenue The GABis sponsored, presented and defended by the House of
Services Representatives’ Appropriations Committee and Sub-Committees in
Other Specific Income plenary session. As with other laws, the GAB is approved on Third
Income from Government
Business Operations Reading before the House of Representatives’ version is transmitted
to the Senate.88
Sales Revenue
Rent Income After transmission, the Senate conducts its own committee hearings
Insurance Income on the GAB. To expedite proceedings, the Senate may conduct its
Dividend Income committee hearings simultaneously with the House of
Representatives’ deliberations. The Senate’s Finance Committee
Interest Income
and its Sub-Committees may submit the proposed amendments to
Sale of Confiscated Goods and the GAB to the plenary of the Senate only after the House of
Properties Representatives has formally transmitted its version to the Senate.
Foreign Exchange (FOREX) The Senate version of the GAB is likewise approved on Third
Gains Reading.89
Miscellaneous Operating and
Service Income The House of Representatives and the Senate then constitute a
Fines and Penalties-Government panel each to sit in the Bicameral Conference Committee for the
Services and Business Operations purpose of discussing and harmonizing the conflicting provisions of
their versions of the GAB. The "harmonized" version of the GAB is
Income from Grants and
next presented to the President for approval.90 The President reviews
Donations
the GAB, and prepares the Veto Message where budget items are
subjected to direct veto,91 or are identified for conditional
implementation.
c.2. Budget Legislation86
If, by the end of any fiscal year, the Congress shall have failed to
The Budget Legislation Phase covers the period commencing from pass the GAB for the ensuing fiscal year, the GAA for the preceding
the time Congress receives the President’s Budget, which is fiscal year shall be deemed re-enacted and shall remain in force and
inclusive of the NEPand the BESF, up to the President’s approval of effect until the GAB is passed by the Congress.92
the GAA. This phase is also known as the Budget Authorization
Phase, and involves the significant participation of the Legislative c.3. Budget Execution93
through its deliberations.
With the GAA now in full force and effect, the next step is the
implementation of the budget. The Budget Execution Phase is
primarily the function of the DBM, which is tasked to perform the
following procedures, namely: (1) to issue the programs and
guidelines for the release of funds; (2) to prepare an Allotment and
Cash Release Program; (3) to release allotments; and (4) to issue
disbursement authorities.
The implementation of the GAA is directed by the guidelines issued
by the DBM. Prior to this, the various departments and agencies are
required to submit Budget Execution Documents(BED) to outline
their plans and performance targets by laying down the physical and
financial plan, the monthly cash program, the estimate of monthly
income, and the list of obligations that are not yet due and
demandable.
Thereafter, the DBM prepares an Allotment Release Program
(ARP)and a Cash Release Program (CRP).The ARP sets a limit for
allotments issued in general and to a specific agency. The CRP fixes
the monthly, quarterly and annual disbursement levels.
Allotments, which authorize an agency to enter into obligations, are
issued by the DBM. Allotments are lesser in scope than
appropriations, in that the latter embrace the general legislative
authority to spend. Allotments may be released in two forms –
through a comprehensive Agency Budget Matrix (ABM),94 or,
individually, by SARO.95
Armed with either the ABM or the SARO, agencies become
authorized to incur obligations96 on behalf of the Government in order
to implement their PAPs. Obligations may be incurred in various
ways, like hiring of personnel, entering into contracts for the supply of
goods and services, and using utilities.
In order to settle the obligations incurred by the agencies, the DBM
issues a disbursement authority so that cash may be allocated in
payment of the obligations. A cash or disbursement authority that is
periodically issued is referred to as a Notice of Cash Allocation
(NCA),97 which issuance is based upon an agency’s submission of its
Monthly Cash Program and other required documents. The NCA
specifies the maximum amount of cash that can be withdrawn from a
government servicing bank for the period indicated. Apart from the
NCA, the DBM may issue a Non-Cash Availment Authority(NCAA) to
authorize non-cash disbursements, or a Cash Disbursement
Ceiling(CDC) for departments with overseas operations to allow the
use of income collected by their foreign posts for their operating
requirements.
Actual disbursement or spending of government funds terminates the
Budget Execution Phase and is usually accomplished through the
Modified Disbursement Scheme under which disbursements
chargeable against the National Treasury are coursed through the
government servicing banks.
c.4. Accountability98
Accountability is a significant phase of the budget cycle because it
ensures that the government funds have been effectively and
efficiently utilized to achieve the State’s socio-economic goals. It also
allows the DBM to assess the performance of agencies during the
fiscal year for the purpose of implementing reforms and establishing
new policies.
An agency’s accountability may be examined and evaluated through
(1) performance targets and outcomes; (2) budget accountability
reports; (3) review of agency performance; and (4) audit conducted
by the Commission on Audit(COA).
2.
Nature of the DAP as a fiscal plan
a. DAP was a program designed to
promote economic growth
Policy is always a part of every budget and fiscal decision of any
Administration.99 The national budget the Executive prepares and
presents to Congress represents the Administration’s "blueprint for rebounded from a 29% contraction to a 34% growth as of September
public policy" and reflects the Government’s goals and 2013.111
strategies.100 As such, the national budget becomes a tangible
representation of the programs of the Government in monetary The DAP thus proved to be a demonstration that expenditure was a
terms, specifying therein the PAPs and services for which specific policy instrument that the Government could use to direct the
amounts of public funds are proposed and allocated. 101 Embodied in economies towards growth and development.112 The Government, by
every national budget is government spending.102 spending on public infrastructure, would signify its commitment of
ensuring profitability for prospective investors.113 The PAPs funded
When he assumed office in the middle of 2010, President Aquino under the DAP were chosen for this reason based on their: (1)
made efficiency and transparency in government spending a multiplier impact on the economy and infrastructure development; (2)
significant focus of his Administration. Yet, although such focus beneficial effect on the poor; and (3) translation into
resulted in an improved fiscal deficit of 0.5% in the gross domestic disbursements.114
product (GDP) from January to July of 2011, it also unfortunately
decelerated government project implementation and payment b. History of the implementation of
schedules.103 The World Bank observed that the Philippines’ the DAP, and sources of funds
economic growth could be reduced, and potential growth could be under the DAP
weakened should the Government continue with its underspending
and fail to address the large deficiencies in infrastructure.104 The How the Administration’s economic managers conceptualized and
economic situation prevailing in the middle of 2011 thus paved the developed the DAP, and finally presented it to the President remains
way for the development and implementation of the DAP as a unknown because the relevant documents appear to be scarce.
stimulus package intended to fast-track public spending and to push
economic growth by investing on high-impact budgetary PAPs to be
funded from the "savings" generated during the year as well as from The earliest available document relating to the genesis of the DAP
unprogrammed funds.105 In that respect, the DAP was the product of was the memorandum of October 12,2011 from Sec. Abad seeking
"plain executive policy-making" to stimulate the economy by way of the approval of the President to implement the proposed DAP. The
accelerated spending.106The Administration would thereby accelerate memorandum, which contained a list of the funding sources for
government spending by: (1) streamlining the implementation ₱72.11 billion and of the proposed priority projects to be
process through the clustering of infrastructure projects of the funded,115 reads:
Department of Public Works and Highways (DPWH) and the
Department of Education (DepEd),and (2) front loading PPP-related MEMORANDUM FOR THE PRESIDENT
projects107 due for implementation in the following year.108
xxxx
Did the stimulus package work?
SUBJECT: FY 2011 PROPOSED DISBURSEMENT
The March 2012 report of the World Bank,109 released after the initial ACCELERATION PROGRAM (PROJECTS AND SOURCES OF
implementation of the DAP, revealed that the DAP was partially FUNDS)
successful. The disbursements under the DAP contributed 1.3
percentage points to GDP growth by the fourth quarter of DATE: OCTOBER 12, 2011
2011.110 The continued implementation of the DAP strengthened
growth by 11.8% year on year while infrastructure spending
 Mr. President, this is to formally confirm your approval of the
Disbursement Acceleration Program totaling ₱72.11 billion. We are discontinuance) and to declare as
already working with all the agencies concerned for the immediate savings from Zero-based Budgeting savings and with
execution of the projects therein. Initiative authority to use
for priority
projects
A. Fund Sources for the Acceleration Program
FY 2011 Budget 7,748 FY 2011 Agency For information
Amount items for Budget items that can
Action
realignment be realigned within the
Fund Sources (In million Description
Requested agency to fund new fast
Php)
disbursing projects
DPWH-3.981 Billion
FY 2011 30,000 Unreleased Personnel Declare as
DA – 2.497 Billion
Unreleased Services (PS) savings and
DOT – 1.000 Billion
Personal appropriations which approve/
DepEd – 270 Million
Services (PS) will lapse at the end of authorize its use
Appropriations FY 2011 but may be for the 2011
pooled as savings and Disbursement 72.110    
realigned for priority AccelerationB. Projects in the Disbursement Acceleration Program
programs that require Program
immediate funding (Descriptions of projects attached as Annex A)
FY 2011 482 Unreleased  
Unreleased appropriations (slow GOCCs and GFIs
Appropriations moving projects and
programs for Agency/Project Allotment
discontinuance) (SARO and NCA Release) (in Million Php)

FY 2010 12,336 Supported by the GFI 1. LRTA: Rehabilitation

Approve and of LRT 1 and 2 1,868
Unprogrammed Dividends authorize
2. its use NHA: 11,050
Fund for the 2011
Disbursement
a. Resettlement of North Triangle residents to 450
Acceleration
Camarin A7
Program
b. Housing for BFP/BJMP 500
c. On-site development for families living 10,000
FY 2010 21,544 Unreleased With along prior dangerous
Carryover appropriations (slow approval
d. from
Relocation sites for informal settlers 100
Appropriation moving projects and the along
President in and its tributaries
Iloilo River
programs for November 2010
3. PHIL. HEART CENTER: Upgrading of 357 Agency/Project Allotment
ageing physical plant and medical equipment (SARO) Cash
(In Million Requirement
4. CREDIT INFO CORP: Establishment of 75 Php) (NCA)
centralized credit information system
13. DOF-BIR: NPSTAR
5. PIDS: purchase of land to relocate the PIDS 100 centralization of data    
office and building construction processing and others (To be    
synchronized with GFMIS    
6. HGC: Equity infusion for credit insurance 400 activities) 758 758
and mortgage guaranty operations of HGC
14. COA: IT infrastructure
7. PHIC: Obligations incurred (premium 1,496 program and hiring of    
subsidy for indigent families) in January-June additional litigational experts 144 144
2010, booked for payment in Jul[y] – Dec
2010. The delay in payment is due to the 15. DND-PAF: On Base Housing
delay in the certification of the LGU Facilities and Communication    
counterpart. Without it, the NG is obliged to Equipment 30 30
pay the full amount.
16. DA: 2,959 2,223
8. Philpost: Purchase of foreclosed property. 644 a. Irrigation, FMRs and
Payment of Mandatory Obligations, (GSIS, Integrated Community Based Multi-Species    
PhilHealth, ECC), Franking Privilege Hatchery and Aquasilvi    
Farming 1,629 1,629
9. BSP: First equity infusion out of Php 40B 10,000 b. Mindanao Rural
capitalization under the BSP Law Development Project 919 183
10. PCMC: Capital and Equipment Renovation 280 c. NIA Agno River Integrated
11. LCOP: 105 Irrigation Project 411 411
a. Pediatric Pulmonary Program 17. DAR: 1,293 1,293
b. Bio-regenerative Technology Program 35 a. Agrarian Reform
(Stem-Cell Research – subject to legal Communities Project 2 1,293 132
review and presentation) 70
b. Landowners Compensation 5,432
12. TIDCORP: NG Equity infusion 570 18. DBM: Conduct of National
TOTAL 26,945 Survey of    
Farmers/Fisherfolks/Ips 625 625

19. DOJ: Operating requirements

NGAs/LGUs of 50 investigation agents and    
15 state attorneys 11 11 midwives 294 294

20. DOT: Preservation of the Cine 28. TESDA: Training Program in

Corregidor Complex 25 25 partnership with BPO industry    
and other sectors 1,100 1,100
21. OPAPP: Activities for Peace
Process (PAMANA- Project     29. DILG: Performance Challenge
details: budget breakdown,     Fund (People Empowered    
implementation plan, and     Community Driven    
conditions on fund release     Development with DSWD and    
attached as Annex B) 1,819 1,819 NAPC) 250 50

22. DOST 425 425 30. ARMM: Comprehensive Peace

a. Establishment of National and Development Intervention 8,592 8,592
Meterological and Climate    
Center 275 275 31. DOTC-MRT: Purchase of
b. Enhancement of Doppler additional MRT cars 4,500 -
Radar Network for National    
Weather Watch, Accurate     32. LGU Support Fund 6,500 6,500
Forecasting and Flood Early     33. Various Other Local Projects 6,500 6,500
Warning 190 190
34. Development Assistance to the
23. DOF-BOC: To settle the Province of Quezon 750 750
principal obligations with    
PDIC consistent with the     TOTAL 45,165 44,000
agreement with the CISS and    
SGS 2,800 2,800 C. Summary

24. OEO-FDCP: Establishment of

Fund Sources
the National Film Archive and    
Identified for Allotments Cash
local cinematheques, and other    
Approval for Release Requirements for
local activities 20 20
(In Million Release in FY
25. DPWH: Various infrastructure Php) 2011
projects 5,500 5,500
Total 72,110 72,110 70,895
26. DepEd/ERDT/DOST: Thin
GOCCs 26,895 26,895
Client Cloud Computing    
Project 270 270 NGAs/LGUs 45,165 44,000
27. DOH: Hiring of nurses and For His Excellency’s Consideration
(Sgd.) FLORENCIO B. ABAD 1.0 The DBM, during the course of performance
reviews conducted on the agencies’ operations,
[/] APPROVED particularly on the implementation of their
projects/activities, including expenses incurred in
undertaking the same, have identified savings out of
[ ] DISAPPROVED
the 2011 General Appropriations Act. Said savings
correspond to completed or discontinued projects
(Sgd.) H.E. BENIGNO S. AQUINO, III under certain departments/agencies which may be
pooled, for the following:
OCT 12, 2011
1.1 to provide for new activities which have
The memorandum of October 12, 2011 was followed by another not been anticipated during preparation of
memorandum for the President dated December 12, the budget;
2011116 requesting omnibus authority to consolidate the savings and
unutilized balances for fiscal year 2011. Pertinent portions of the 1.2 to augment additional requirements of
memorandum of December 12, 2011 read: on-going priority projects; and

MEMORANDUM FOR THE PRESIDENT 1.3 to provide for deficiencies under the
Special Purpose Funds, e.g., PDAF,
xxxx Calamity Fund, Contingent Fund

SUBJECT: Omnibus Authority to Consolidate Savings/Unutilized 1.4 to cover for the modifications of the
Balances and its Realignment original allotment class allocation as a result
of on-going priority projects and
DATE: December 12, 2011 implementation of new activities

This is to respectfully request for the grant of Omnibus Authority to 2.0 x x x x

consolidate savings/unutilized balances in FY 2011 corresponding to
completed or discontinued projects which may be pooled to fund
additional projects or expenditures.
In addition, Mr. President, this measure will allow us to undertake
projects even if their implementation carries over to 2012 without
necessarily impacting on our budget deficit cap next year.
BACKGROUND
2.1 x x x
2.2 x x x
ON THE UTILIZATION OF POOLED SAVINGS
3.0 It may be recalled that the President approved
our request for omnibus authority to pool
savings/unutilized balances in FY 2010 last
November 25, 2010.
4.0 It is understood that in the utilization of the
pooled savings, the DBM shall secure the
corresponding approval/confirmation of the
President. Furthermore, it is assured that the
proposed realignments shall be within the authorized
Expenditure level.
5.0 Relative thereto, we have identified some
expenditure items that may be sourced from the said
pooled appropriations in FY 2010 that will expire on
December 31, 2011 and appropriations in FY 2011
that may be declared as savings to fund additional
expenditures.
5.1 The 2010 Continuing Appropriations
(pooled savings) is proposed to be spent for
the projects that we have identified to be
immediate actual disbursements considering
that this same fund source will expire on
December 31, 2011.
5.2 With respect to the proposed
expenditure items to be funded from the FY
2011 Unreleased Appropriations, most of
these are the same projects for which the
DBM is directed by the Office of the
President, thru the Executive Secretary, to
source funds.
6.0 Among others, the following are such proposed
additional projects that have been chosen given their
multiplier impact on economy and infrastructure
development, their beneficial effect on the poor, and
their translation into disbursements. Please note that
we have classified the list of proposed projects as
follows:
7.0 x x x
FOR THE PRESIDENT’S APPROVAL
8.0 Foregoing considered, may we respectfully
request for the President’s approval for the following:
8.1 Grant of omnibus authority to
consolidate FY 2011 savings/unutilized
balances and its realignment; and
8.2 The proposed additional projects
identified for funding.
For His Excellency’s consideration and approval.
(Sgd.)
[/] APPROVED
[ ] DISAPPROVED
(Sgd.) H.E. BENIGNO S. AQUINO, III
DEC 21, 2011
Substantially identical requests for authority to pool savings and to
fund proposed projects were contained in various other memoranda
from Sec. Abad dated June 25, 2012,117 September 4,
2012,118 December 19, 2012,119 May 20, 2013,120 and September 25,
2013.121 The President apparently approved all the requests,
withholding approval only of the proposed projects contained in the
June 25, 2012 memorandum, as borne out by his marginal note
therein to the effect that the proposed projects should still be "subject
to further discussions."122
In order to implement the June25, 2012 memorandum, Sec. Abad
issued NBC No. 541 (Adoption of Operational Efficiency Measure –
Withdrawal of Agencies’ Unobligated Allotments as of June 30,
2012),123 reproduced herein as follows:
NATIONAL BUDGET CIRCULAR No. 541
July 18, 2012
TO: All Heads of Departments/Agencies/State Universities and
Colleges and other Offices of the National Government, Budget and
Planning Officers; Heads of Accounting Units and All Others
Concerned
SUBJECT : Adoption of Operational Efficiency Measure –
Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012
1.0 Rationale
The DBM, as mandated by Executive Order (EO) No. 292
(Administrative Code of 1987), periodically reviews and evaluates the
departments/agencies’ efficiency and effectiveness in utilizing
budgeted funds for the delivery of services and production of goods,
consistent with the government priorities.
In the event that a measure is necessary to further improve the
operational efficiency of the government, the President is authorized
to suspend or stop further use of funds allotted for any agency or
expenditure authorized in the General Appropriations Act.
Withdrawal and pooling of unutilized allotment releases can be
effected by DBM based on authority of the President, as mandated
under Sections 38 and 39, Chapter 5, Book VI of EO 292.
For the first five months of 2012, the National Government has not
met its spending targets. In order to accelerate spending and sustain
the fiscal targets during the year, expenditure measures have to be
implemented to optimize the utilization of available resources.
Departments/agencies have registered low spending levels, in terms
of obligations and disbursements per initial review of their 2012
performance. To enhance agencies’ performance, the DBM conducts
continuous consultation meetings and/or send call-up letters,
requesting them to identify slow-moving programs/projects and the
factors/issues affecting their performance (both pertaining to internal
systems and those which are outside the agencies’ spheres of
control). Also, they are asked to formulate strategies and
improvement plans for the rest of 2012.
Notwithstanding these initiatives, some departments/agencies have
continued to post low obligation levels as of end of first semester,
thus resulting to substantial unobligated allotments.
In line with this, the President, per directive dated June 27, 2012
authorized the withdrawal of unobligated allotments of agencies with
low levels of obligations as of June 30, 2012, both for continuing and
current allotments. This measure will allow the maximum utilization of
available allotments to fund and undertake other priority expenditures
of the national government.
2.0 Purpose
2.1 To provide the conditions and parameters on the
withdrawal of unobligated allotments of agencies as
of June 30, 2012 to fund priority and/or fast-moving
programs/projects of the national government;
2.2 To prescribe the reports and documents to be
used as bases on the withdrawal of said unobligated
allotments; and
2.3 To provide guidelines in the utilization or
reallocation of the withdrawn allotments.
3.0 Coverage
3.1 These guidelines shall cover the withdrawal of
unobligated allotments as of June 30, 2012 of all
national government agencies (NGAs) charged
against FY 2011 Continuing Appropriation (R.A.
No.10147) and FY 2012 Current Appropriation (R.A.
No. 10155), pertaining to:
 3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating
Expenses (MOOE) related to the
implementation of programs and projects, as
well as capitalized MOOE; and
3.1.3 Personal Services corresponding to
unutilized pension benefits declared as
savings by the agencies concerned based
on their updated/validated list of pensioners.
3.2 The withdrawal of unobligated allotments may
cover the identified programs, projects and activities
of the departments/agencies reflected in the DBM
list shown as Annex A or specific programs and
projects as may be identified by the agencies.
4.0 Exemption
These guidelines shall not apply to the following:
4.1 NGAs
4.1.1 Constitutional Offices/Fiscal Autonomy
Group, granted fiscal autonomy under the
Philippine Constitution; and
4.1.2 State Universities and Colleges,
adopting the Normative Funding allocation
scheme i.e., distribution of a predetermined
budget ceiling.
4.2 Fund Sources
4.2.1 Personal Services other than pension
benefits;
4.2.2 MOOE items earmarked for specific
purposes or subject to realignment
conditions per General Provisions of the
GAA:
• Confidential and Intelligence Fund;
• Savings from Traveling,
Communication, Transportation and
Delivery, Repair and Maintenance,
Supplies and Materials and Utility
which shall be used for the grant of
Collective Negotiation Agreement
incentive benefit;
• Savings from mandatory
expenditures which can be realigned
only in the last quarter after taking
into consideration the agency’s full
year requirements, i.e., Petroleum,
Oil and Lubricants, Water,
Illumination, Power Services,
Telephone, other Communication
Services and Rent.
4.2.3 Foreign-Assisted Projects (loan
proceeds and peso counterpart);
4.2.4 Special Purpose Funds such as: E-
Government Fund, International
Commitments Fund, PAMANA, Priority
Development Assistance Fund, Calamity
Fund, Budgetary Support to GOCCs and
Allocation to LGUs, among others;
4.2.5 Quick Response Funds; and
 4.2.6 Automatic Appropriations i.e.,
Retirement Life Insurance Premium and
Special Accounts in the General Fund.
5.0 Guidelines
5.1 National government agencies shall continue to
undertake procurement activities notwithstanding the
implementation of the policy of withdrawal of
unobligated allotments until the end of the third
quarter, FY 2012. Even without the allotments, the
agency shall proceed in undertaking the
procurement processes (i.e., procurement planning
up to the conduct of bidding but short of awarding of
contract) pursuant to GPPB Circular Nos. 02-2008
and 01-2009 and DBM Circular Letter No. 2010-9.
5.2 For the purpose of determining the amount of
unobligated allotments that shall be withdrawn, all
departments/agencies/operating units (OUs) shall
submit to DBM not later than July 30, 2012, the
following budget accountability reports as of June
30, 2012;
• Statement of Allotments, Obligations and
Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited
under item 5.2 of this Circular, the agency’s latest
report available shall be used by DBM as basis for
withdrawal of allotment. The DBM shall
compute/approximate the agency’s obligation level
as of June 30 to derive its unobligated allotments as
of same period. Example: If the March 31 SAOB or
FRO reflects actual obligations of P 800M then the
June 30 obligation level shall approximate to ₱1,600
M (i.e., ₱800 M x 2 quarters).
5.4 All released allotments in FY 2011 charged
against R.A. No. 10147 which remained unobligated
as of June 30, 2012 shall be immediately considered
for withdrawal. This policy is based on the following
considerations:
5.4.1 The departments/agencies’ approved
priority programs and projects are assumed
to be implementation-ready and doable
during the given fiscal year; and
5.4.2 The practice of having substantial
carryover appropriations may imply that the
agency has a slower-than-programmed
implementation capacity or agency tends to
implement projects within a two-year
timeframe.
5.5. Consistent with the President’s directive, the
DBM shall, based on evaluation of the reports cited
above and results of consultations with the
departments/agencies, withdraw the unobligated
allotments as of June 30, 2012 through issuance of
negative Special Allotment Release Orders
(SAROs).
5.6 DBM shall prepare and submit to the President,
a report on the magnitude of withdrawn allotments.
The report shall highlight the agencies which failed
to submit the June 30 reports required under this
Circular.
5.7 The withdrawn allotments may be:
 5.7.1 Reissued for the original programs and
projects of the agencies/OUs concerned,
from which the allotments were withdrawn;
5.7.2 Realigned to cover additional funding
for other existing programs and projects of
the agency/OU; or
5.7.3 Used to augment existing programs
and projects of any agency and to fund
priority programs and projects not
considered in the 2012 budget but expected
to be started or implemented during the
current year.
5.8 For items 5.7.1 and 5.7.2 above, agencies/OUs
concerned may submit to DBM a Special Budget
Request (SBR), supported with the following:
5.8.1 Physical and Financial Plan (PFP);
5.8.2 Monthly Cash Program (MCP); and
5.8.3 Proof that the project/activity has
started the procurement processes i.e.,
Proof of Posting and/or Advertisement of the
Invitation to Bid.
5.9 The deadline for submission of request/s
pertaining to these categories shall be until the end
of the third quarter i.e., September 30, 2012. After
said cut-off date, the withdrawn allotments shall be
pooled and form part of the overall savings of the
national government.
5.10 Utilization of the consolidated withdrawn
allotments for other priority programs and projects as
cited under item 5.7.3 of this Circular, shall be
subject to approval of the President. Based on the
approval of the President, DBM shall issue the
SARO to cover the approved priority expenditures
subject to submission by the agency/OU concerned
of the SBR and supported with PFP and MCP.
5.11 It is understood that all releases to be made out
of the withdrawn allotments (both 2011 and 2012
unobligated allotments) shall be within the approved
Expenditure Program level of the national
government for the current year. The SAROs to be
issued shall properly disclose the appropriation
source of the release to determine the extent of
allotment validity, as follows:
• For charges under R.A. 10147 – allotments
shall be valid up to December 31, 2012; and
• For charges under R.A. 10155 – allotments
shall be valid up to December 31, 2013.
5.12 Timely compliance with the submission of
existing BARs and other reportorial requirements is
reiterated for monitoring purposes.
6.0 Effectivity
This circular shall take effect immediately.
(Sgd.) FLORENCIO B. ABAD
Secretary
As can be seen, NBC No. 541 specified that the unobligated
allotments of all agencies and departments as of June 30, 2012 that
were charged against the continuing appropriations for fiscal year
2011 and the 2012 GAA (R.A. No. 10155) were subject to withdrawal
through the issuance of negative SAROs, but such allotments could
be either: (1) reissued for the original PAPs of the concerned
agencies from which they were withdrawn; or (2) realigned to cover
additional funding for other existing PAPs of the concerned agencies;
or (3) used to augment existing PAPs of any agency and to fund
priority PAPs not considered in the 2012 budget but expected to be
started or implemented in 2012. Financing the other priority PAPs
was made subject to the approval of the President. Note here that
NBC No. 541 used terminologies like "realignment" and
"augmentation" in the application of the withdrawn unobligated
allotments.
Taken together, all the issuances showed how the DAP was to be
implemented and funded, that is — (1) by declaring "savings" coming
from the various departments and agencies derived from pooling
unobligated allotments and withdrawing unreleased appropriations;
(2) releasing unprogrammed funds; and (3) applying the "savings"
and unprogrammed funds to augment existing PAPs or to support
other priority PAPs.
c. DAP was not an appropriation
measure; hence, no appropriation
law was required to adopt or to
implement it
Petitioners Syjuco, Luna, Villegas and PHILCONSA state that
Congress did not enact a law to establish the DAP, or to authorize
the disbursement and release of public funds to implement the DAP.
Villegas, PHILCONSA, IBP, Araullo, and COURAGE observe that
the appropriations funded under the DAP were not included in the
2011, 2012 and 2013 GAAs. To petitioners IBP, Araullo, and
COURAGE, the DAP, being actually an appropriation that set aside
public funds for public use, should require an enabling law for its
validity. VACC maintains that the DAP, because it involved huge
allocations that were separate and distinct from the GAAs,
circumvented and duplicated the GAAs without congressional
authorization and control.
The petitioners contend in unison that based on how it was
developed and implemented the DAP violated the mandate of
Section 29(1), Article VI of the 1987 Constitution that "[n]o money
shall be paid out of the Treasury except in pursuance of an
appropriation made by law."
The OSG posits, however, that no law was necessary for the
adoption and implementation of the DAP because of its being neither
a fund nor an appropriation, but a program or an administrative
system of prioritizing spending; and that the adoption of the DAP was
by virtue of the authority of the President as the Chief Executive to
ensure that laws were faithfully executed.
We agree with the OSG’s position.
The DAP was a government policy or strategy designed to stimulate
the economy through accelerated spending. In the context of the
DAP’s adoption and implementation being a function pertaining to
the Executive as the main actor during the Budget Execution Stage
under its constitutional mandate to faithfully execute the laws,
including the GAAs, Congress did not need to legislate to adopt or to
implement the DAP. Congress could appropriate but would have
nothing more to do during the Budget Execution Stage. Indeed,
appropriation was the act by which Congress "designates a particular
fund, or sets apart a specified portion of the public revenue or of the
money in the public treasury, to be applied to some general object of
governmental expenditure, or to some individual purchase or
expense."124 As pointed out in Gonzales v. Raquiza:125 ‘"In a strict
sense, appropriation has been defined ‘as nothing more than the
legislative authorization prescribed by the Constitution that money
may be paid out of the Treasury,’ while appropriation made by law
refers to ‘the act of the legislature setting apart or assigning to a
particular use a certain sum to be used in the payment of debt or
dues from the State to its creditors.’"126
On the other hand, the President, in keeping with his duty to faithfully
execute the laws, had sufficient discretion during the execution of the
budget to adapt the budget to changes in the country’s economic
situation.127 He could adopt a plan like the DAP for the purpose. He
could pool the savings and identify the PAPs to be funded under the
DAP. The pooling of savings pursuant to the DAP, and the
identification of the PAPs to be funded under the DAP did not involve
appropriation in the strict sense because the money had been otherwise impede the efficient implementation of the PAPs set by
already set apart from the public treasury by Congress through the Congress in the GAA.
GAAs. In such actions, the Executive did not usurp the power vested
in Congress under Section 29(1), Article VI of the Constitution. Congress has traditionally allowed much flexibility to the President in
allocating funds pursuant to the GAAs,129particularly when the funds
3. are grouped to form lump sum accounts.130 It is assumed that the
Unreleased appropriations and withdrawn agencies of the Government enjoy more flexibility when the GAAs
unobligated allotments under the DAP provide broader appropriation items.131 This flexibility comes in the
were not savings, and the use of such form of policies that the Executive may adopt during the budget
appropriations contravened Section 25(5), execution phase. The DAP – as a strategy to improve the country’s
Article VI of the 1987 Constitution. economic position – was one policy that the President decided to
carry out in order to fulfill his mandate under the GAAs.
Notwithstanding our appreciation of the DAP as a plan or strategy
validly adopted by the Executive to ramp up spending to accelerate Denying to the Executive flexibility in the expenditure process would
economic growth, the challenges posed by the petitioners constrain be counterproductive. In Presidential Spending Power,132 Prof. Louis
us to dissect the mechanics of the actual execution of the DAP. The Fisher, an American constitutional scholar whose specialties have
management and utilization of the public wealth inevitably demands included budget policy, has justified extending discretionary authority
a most careful scrutiny of whether the Executive’s implementation of to the Executive thusly:
the DAP was consistent with the Constitution, the relevant GAAs and
other existing laws. [T]he impulse to deny discretionary authority altogether should be
resisted. There are many number of reasons why obligations and
a. Although executive discretion outlays by administrators may have to differ from appropriations by
and flexibility are necessary in legislators. Appropriations are made many months, and sometimes
the execution of the budget, any years, in advance of expenditures. Congress acts with imperfect
transfer of appropriated funds knowledge in trying to legislate in fields that are highly technical and
should conform to Section 25(5), constantly undergoing change. New circumstances will develop to
Article VI of the Constitution make obsolete and mistaken the decisions reached by Congress at
the appropriation stage. It is not practicable for Congress to adjust to
We begin this dissection by reiterating that Congress cannot each new development by passing separate supplemental
anticipate all issues and needs that may come into play once the appropriation bills. Were Congress to control expenditures by
budget reaches its execution stage. Executive discretion is confining administrators to narrow statutory details, it would perhaps
necessary at that stage to achieve a sound fiscal administration and protect its power of the purse but it would not protect the purse itself.
assure effective budget implementation. The heads of offices, The realities and complexities of public policy require executive
particularly the President, require flexibility in their operations under discretion for the sound management of public funds.
performance budgeting to enable them to make whatever
adjustments are needed to meet established work goals under xxxx
changing conditions.128 In particular, the power to transfer funds can
give the President the flexibility to meet unforeseen events that may x x x The expenditure process, by its very nature, requires
substantial discretion for administrators. They need to exercise
judgment and take responsibility for their actions, but those actions
ought to be directed toward executing congressional, not
administrative policy. Let there be discretion, but channel it and use it
to satisfy the programs and priorities established by Congress.
In contrast, by allowing to the heads of offices some power to
transfer funds within their respective offices, the Constitution itself
ensures the fiscal autonomy of their offices, and at the same time
maintains the separation of powers among the three main branches
of the Government. The Court has recognized this, and emphasized
so in Bengzon v. Drilon,133 viz:
The Judiciary, the Constitutional Commissions, and the Ombudsman
must have the independence and flexibility needed in the discharge
of their constitutional duties. The imposition of restrictions and
constraints on the manner the independent constitutional offices
allocate and utilize the funds appropriated for their operations is
anathema to fiscal autonomy and violative not only of the express
mandate of the Constitution but especially as regards the Supreme
Court, of the independence and separation of powers upon which the
entire fabric of our constitutional system is based.
In the case of the President, the power to transfer funds from one
item to another within the Executive has not been the mere offshoot
of established usage, but has emanated from law itself. It has existed
since the time of the American Governors-General.134 Act No. 1902
(An Act authorizing the Governor-General to direct any unexpended
balances of appropriations be returned to the general fund of the
Insular Treasury and to transfer from the general fund moneys which
have been returned thereto), passed on May 18, 1909 by the First
Philippine Legislature,135 was the first enabling law that granted
statutory authority to the President to transfer funds. The authority
was without any limitation, for the Act explicitly empowered the
Governor-General to transfer any unexpended balance of
appropriations for any bureau or office to another, and to spend such
balance as if it had originally been appropriated for that bureau or
office.
From 1916 until 1920, the appropriations laws set a cap on the
amounts of funds that could be transferred, thereby limiting the
power to transfer funds. Only 10% of the amounts appropriated for
contingent or miscellaneous expenses could be transferred to a
bureau or office, and the transferred funds were to be used to cover
deficiencies in the appropriations also for miscellaneous expenses of
said bureau or office.
In 1921, the ceiling on the amounts of funds to be transferred from
items under miscellaneous expenses to any other item of a certain
bureau or office was removed.
During the Commonwealth period, the power of the President to
transfer funds continued to be governed by the GAAs despite the
enactment of the Constitution in 1935. It is notable that the 1935
Constitution did not include a provision on the power to transfer
funds. At any rate, a shift in the extent of the President’s power to
transfer funds was again experienced during this era, with the
President being given more flexibility in implementing the budget.
The GAAs provided that the power to transfer all or portions of the
appropriations in the Executive Department could be made in the
"interest of the public, as the President may determine."136
In its time, the 1971 Constitutional Convention wanted to curtail the
President’s seemingly unbounded discretion in transferring
funds.137 Its Committee on the Budget and Appropriation proposed to
prohibit the transfer of funds among the separate branches of the
Government and the independent constitutional bodies, but to allow
instead their respective heads to augment items of appropriations
from savings in their respective budgets under certain
limitations.138 The clear intention of the Convention was to further
restrict, not to liberalize, the power to transfer
appropriations.139 Thus, the Committee on the Budget and
Appropriation initially considered setting stringent limitations on the
power to augment, and suggested that the augmentation of an item
of appropriation could be made "by not more than ten percent if the
original item of appropriation to be augmented does not exceed one
million pesos, or by not more than five percent if the original item of
appropriation to be augmented exceeds one million pesos."140 But
two members of the Committee objected to the ₱1,000,000.00
threshold, saying that the amount was arbitrary and might not be
reasonable in the future. The Committee agreed to eliminate the
₱1,000,000.00 threshold, and settled on the ten percent limitation.141
In the end, the ten percent limitation was discarded during the
plenary of the Convention, which adopted the following final version
under Section 16, Article VIII of the 1973 Constitution, to wit:
(5) No law shall be passed authorizing any transfer of appropriations;
however, the President, the Prime Minister, the Speaker, the Chief
Justice of the Supreme Court, and the heads of Constitutional
Commissions may by law be authorized to augment any item in the
general appropriations law for their respective offices from savings in
other items of their respective appropriations.
The 1973 Constitution explicitly and categorically prohibited the
transfer of funds from one item to another, unless Congress enacted
a law authorizing the President, the Prime Minister, the Speaker, the
Chief Justice of the Supreme Court, and the heads of the
Constitutional omissions to transfer funds for the purpose of
augmenting any item from savings in another item in the GAA of their
respective offices. The leeway was limited to augmentation only, and
was further constricted by the condition that the funds to be
transferred should come from savings from another item in the
appropriation of the office.142
On July 30, 1977, President Marcos issued PD No. 1177, providing
in its Section 44 that:
Section 44. Authority to Approve Fund Transfers. The President shall
have the authority to transfer any fund appropriated for the different
departments, bureaus, offices and agencies of the Executive
Department which are included in the General Appropriations Act, to
any program, project, or activity of any department, bureau or office
included in the General Appropriations Act or approved after its
enactment.
The President shall, likewise, have the authority to augment any
appropriation of the Executive Department in the General
Appropriations Act, from savings in the appropriations of another
department, bureau, office or agency within the Executive Branch,
pursuant to the provisions of Article VIII, Section 16 (5) of the
Constitution.
In Demetria v. Alba, however, the Court struck down the first
paragraph of Section 44 for contravening Section 16(5)of the 1973
Constitution, ruling:
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the
privilege granted under said Section 16. It empowers the President to
indiscriminately transfer funds from one department, bureau, office or
agency of the Executive Department to any program, project or
activity of any department, bureau or office included in the General
Appropriations Act or approved after its enactment, without regard as
to whether or not the funds to be transferred are actually savings in
the item from which the same are to be taken, or whether or not the
transfer is for the purpose of augmenting the item to which said
transfer is to be made. It does not only completely disregard the
standards set in the fundamental law, thereby amounting to an
undue delegation of legislative powers, but likewise goes beyond the
tenor thereof. Indeed, such constitutional infirmities render the
provision in question null and void.143
It is significant that Demetria was promulgated 25 days after the
ratification by the people of the 1987 Constitution, whose Section
25(5) of Article VI is identical to Section 16(5), Article VIII of the 1973
Constitution, to wit:
Section 25. x x x
xxxx
5) No law shall be passed authorizing any transfer of appropriations;
however, the President, the President of the Senate, the Speaker of
the House of Representatives, the Chief Justice of the Supreme
Court, and the heads of Constitutional Commissions may, by law, be
authorized to augment any item in the general appropriations law for
their respective offices from savings in other items of their respective
appropriations.
xxxx
The foregoing history makes it evident that the Constitutional
Commission included Section 25(5), supra, to keep a tight rein on the
exercise of the power to transfer funds appropriated by Congress by
the President and the other high officials of the Government named
therein. The Court stated in Nazareth v. Villar:144
In the funding of current activities, projects, and programs, the
general rule should still be that the budgetary amount contained in
the appropriations bill is the extent Congress will determine as
sufficient for the budgetary allocation for the proponent agency. The
only exception is found in Section 25 (5), Article VI of the
Constitution, by which the President, the President of the Senate, the
Speaker of the House of Representatives, the Chief Justice of the
Supreme Court, and the heads of Constitutional Commissions are
authorized to transfer appropriations to augmentany item in the GAA
for their respective offices from the savings in other items of their
respective appropriations. The plain language of the constitutional
restriction leaves no room for the petitioner’s posture, which we
should now dispose of as untenable.
It bears emphasizing that the exception in favor of the high officials
named in Section 25(5), Article VI of the Constitution limiting the
authority to transfer savings only to augment another item in the GAA
is strictly but reasonably construed as exclusive. As the Court has
expounded in Lokin, Jr. v. Commission on Elections:
When the statute itself enumerates the exceptions to the application
of the general rule, the exceptions are strictly but reasonably
construed. The exceptions extend only as far as their language fairly
warrants, and all doubts should be resolved in favor of the general
provision rather than the exceptions. Where the general rule is
established by a statute with exceptions, none but the enacting
authority can curtail the former. Not even the courts may add to the
latter by implication, and it is a rule that an express exception
excludes all others, although it is always proper in determining the
applicability of the rule to inquire whether, in a particular case, it
accords with reason and justice.
The appropriate and natural office of the exception is to exempt
something from the scope of the general words of a statute, which is
otherwise within the scope and meaning of such general words.
Consequently, the existence of an exception in a statute clarifies the
intent that the statute shall apply to all cases not excepted.
Exceptions are subject to the rule of strict construction; hence, any
doubt will be resolved in favor of the general provision and against
the exception. Indeed, the liberal construction of a statute will seem
to require in many circumstances that the exception, by which the
operation of the statute is limited or abridged, should receive a
restricted construction.
Accordingly, we should interpret Section 25(5), supra, in the context
of a limitation on the President’s discretion over the appropriations
during the Budget Execution Phase.
b. Requisites for the valid transfer of
appropriated funds under Section
25(5), Article VI of the 1987
Constitution
The transfer of appropriated funds, to be valid under Section 25(5),
supra, must be made upon a concurrence of the following requisites,
namely:
(1) There is a law authorizing the President, the President of
the Senate, the Speaker of the House of Representatives,
the Chief Justice of the Supreme Court, and the heads of the
Constitutional Commissions to transfer funds within their
respective offices;
(2) The funds to be transferred are savings generated from
the appropriations for their respective offices; and (3) The
purpose of the transfer is to augment an item in the general
appropriations law for their respective offices.
b.1. First Requisite–GAAs of 2011 and A reading shows, however, that the aforequoted provisions of the
2012 lacked valid provisions to GAAs of 2011 and 2012 were textually unfaithful to the Constitution
authorize transfers of funds under for not carrying the phrase "for their respective offices" contained in
the DAP; hence, transfers under the Section 25(5), supra. The impact of the phrase "for their respective
DAP were unconstitutional offices" was to authorize only transfers of funds within their offices
(i.e., in the case of the President, the transfer was to an item of
Section 25(5), supra, not being a self-executing provision of the appropriation within the Executive). The provisions carried a different
Constitution, must have an implementing law for it to be operative. phrase ("to augment any item in this Act"), and the effect was that
That law, generally, is the GAA of a given fiscal year. To comply with the 2011 and 2012 GAAs thereby literally allowed the transfer of
the first requisite, the GAAs should expressly authorize the transfer funds from savings to augment any item in the GAAs even if the item
of funds. belonged to an office outside the Executive. To that extent did the
2011 and 2012 GAAs contravene the Constitution. At the very least,
the aforequoted provisions cannot be used to claim authority to
Did the GAAs expressly authorize the transfer of funds?
transfer appropriations from the Executive to another branch, or to a
constitutional commission.
In the 2011 GAA, the provision that gave the President and the other
high officials the authority to transfer funds was Section 59, as
Apparently realizing the problem, Congress inserted the omitted
follows:
phrase in the counterpart provision in the 2013 GAA, to wit:
Section 59. Use of Savings. The President of the Philippines, the
Section 52. Use of Savings. The President of the Philippines, the
Senate President, the Speaker of the House of Representatives, the
Senate President, the Speaker of the House of Representatives, the
Chief Justice of the Supreme Court, the Heads of Constitutional
Chief Justice of the Supreme Court, the Heads of Constitutional
Commissions enjoying fiscal autonomy, and the Ombudsman are
Commissions enjoying fiscal autonomy, and the Ombudsman are
hereby authorized to augment any item in this Act from savings in
hereby authorized to use savings in their respective appropriations to
other items of their respective appropriations.
augment actual deficiencies incurred for the current year in any item
of their respective appropriations.
In the 2012 GAA, the empowering provision was Section 53, to wit:
Even had a valid law authorizing the transfer of funds pursuant to
Section 53. Use of Savings. The President of the Philippines, the Section 25(5), supra, existed, there still remained two other
Senate President, the Speaker of the House of Representatives, the requisites to be met, namely: that the source of funds to be
Chief Justice of the Supreme Court, the Heads of Constitutional transferred were savings from appropriations within the respective
Commissions enjoying fiscal autonomy, and the Ombudsman are offices; and that the transfer must be for the purpose of augmenting
hereby authorized to augment any item in this Act from savings in an item of appropriation within the respective offices.
other items of their respective appropriations.
b.2. Second Requisite – There were
In fact, the foregoing provisions of the 2011 and 2012 GAAs were no savings from which funds
cited by the DBM as justification for the use of savings under the could be sourced for the DAP
DAP.145 Were the funds used in the DAP actually savings?
The petitioners claim that the funds used in the DAP — the
unreleased appropriations and withdrawn unobligated allotments —
were not actual savings within the context of Section 25(5), supra,
and the relevant provisions of the GAAs. Belgica argues that
"savings" should be understood to refer to the excess money after
the items that needed to be funded have been funded, or those that
needed to be paid have been paid pursuant to the budget. 146 The
petitioners posit that there could be savings only when the PAPs for
which the funds had been appropriated were actually implemented
and completed, or finally discontinued or abandoned. They insist that
savings could not be realized with certainty in the middle of the fiscal
year; and that the funds for "slow-moving" PAPs could not be
considered as savings because such PAPs had not actually been
abandoned or discontinued yet.147 They stress that NBC No. 541, by
allowing the withdrawn funds to be reissued to the "original program
or project from which it was withdrawn," conceded that the PAPs
from which the supposed savings were taken had not been
completed, abandoned or discontinued.148
The OSG represents that "savings" were "appropriations balances,"
being the difference between the appropriation authorized by
Congress and the actual amount allotted for the appropriation; that
the definition of "savings" in the GAAs set only the parameters for
determining when savings occurred; that it was still the President (as
well as the other officers vested by the Constitution with the authority
to augment) who ultimately determined when savings actually
existed because savings could be determined only during the stage
of budget execution; that the President must be given a wide
discretion to accomplish his tasks; and that the withdrawn
unobligated allotments were savings inasmuch as they were clearly
"portions or balances of any programmed appropriation…free from
any obligation or encumbrances which are (i) still available after the
completion or final discontinuance or abandonment of the work,
activity or purpose for which the appropriation is authorized…"
We partially find for the petitioners.
In ascertaining the meaning of savings, certain principles should be
borne in mind. The first principle is that Congress wields the power of
the purse. Congress decides how the budget will be spent; what
PAPs to fund; and the amounts of money to be spent for each PAP.
The second principle is that the Executive, as the department of the
Government tasked to enforce the laws, is expected to faithfully
execute the GAA and to spend the budget in accordance with the
provisions of the GAA.149 The Executive is expected to faithfully
implement the PAPs for which Congress allocated funds, and to limit
the expenditures within the allocations, unless exigencies result to
deficiencies for which augmentation is authorized, subject to the
conditions provided by law. The third principle is that in making the
President’s power to augment operative under the GAA, Congress
recognizes the need for flexibility in budget execution. In so doing,
Congress diminishes its own power of the purse, for it delegates a
fraction of its power to the Executive. But Congress does not thereby
allow the Executive to override its authority over the purse as to let
the Executive exceed its delegated authority. And the fourth principle
is that savings should be actual. "Actual" denotes something that is
real or substantial, or something that exists presently in fact, as
opposed to something that is merely theoretical, possible, potential
or hypothetical.150
The foregoing principles caution us to construe savings strictly
against expanding the scope of the power to augment. It is then
indubitable that the power to augment was to be used only when the
purpose for which the funds had been allocated were already
satisfied, or the need for such funds had ceased to exist, for only
then could savings be properly realized. This interpretation prevents
the Executive from unduly transgressing Congress’ power of the
purse.
The definition of "savings" in the GAAs, particularly for 2011, 2012
and 2013, reflected this interpretation and made it operational, viz:
Savings refer to portions or balances of any programmed
appropriation in this Act free from any obligation or encumbrance
which are: (i) still available after the completion or final
discontinuance or abandonment of the work, activity or purpose for
which the appropriation is authorized; (ii) from appropriations
balances arising from unpaid compensation and related costs
pertaining to vacant positions and leaves of absence without pay;
and (iii) from appropriations balances realized from the
implementation of measures resulting in improved systems and
efficiencies and thus enabled agencies to meet and deliver the
required or planned targets, programs and services approved in this
Act at a lesser cost.
The three instances listed in the GAAs’ aforequoted definition were a
sure indication that savings could be generated only upon the
purpose of the appropriation being fulfilled, or upon the need for the
appropriation being no longer existent.
The phrase "free from any obligation or encumbrance" in the
definition of savings in the GAAs conveyed the notion that the
appropriation was at that stage when the appropriation was already
obligated and the appropriation was already released. This
interpretation was reinforced by the enumeration of the three
instances for savings to arise, which showed that the appropriation
referred to had reached the agency level. It could not be otherwise,
considering that only when the appropriation had reached the agency
level could it be determined whether (a) the PAP for which the
appropriation had been authorized was completed, finally
discontinued, or abandoned; or (b) there were vacant positions and
leaves of absence without pay; or (c) the required or planned targets,
programs and services were realized at a lesser cost because of the
implementation of measures resulting in improved systems and
efficiencies.
The DBM declares that part of the savings brought under the DAP
came from "pooling of unreleased appropriations such as unreleased
Personnel Services appropriations which will lapse at the end of the
year, unreleased appropriations of slow moving projects and
discontinued projects per Zero-Based Budgeting findings."
The declaration of the DBM by itself does not state the clear legal
basis for the treatment of unreleased or unalloted appropriations as
savings.
The fact alone that the appropriations are unreleased or unalloted is
a mere description of the status of the items as unalloted or
unreleased. They have not yet ripened into categories of items from
which savings can be generated. Appropriations have been
considered "released" if there has already been an allotment or
authorization to incur obligations and disbursement authority. This
means that the DBM has issued either an ABM (for those not
needing clearance), or a SARO (for those needing clearance), and
consequently an NCA, NCAA or CDC, as the case may be.
Appropriations remain unreleased, for instance, because of
noncompliance with documentary requirements (like the Special
Budget Request), or simply because of the unavailability of funds.
But the appropriations do not actually reach the agencies to which
they were allocated under the GAAs, and have remained with the
DBM technically speaking. Ergo, unreleased appropriations refer to
appropriations with allotments but without disbursement authority.
For us to consider unreleased appropriations as savings, unless
these met the statutory definition of savings, would seriously
undercut the congressional power of the purse, because such
appropriations had not even reached and been used by the agency
concerned vis-à-vis the PAPs for which Congress had allocated
them. However, if an agency has unfilled positions in its plantilla and
did not receive an allotment and NCA for such vacancies,
appropriations for such positions, although unreleased, may already
constitute savings for that agency under the second instance.
Unobligated allotments, on the other hand, were encompassed by
the first part of the definition of "savings" in the GAA, that is, as
"portions or balances of any programmed appropriation in this Act
free from any obligation or encumbrance." But the first part of the
definition was further qualified by the three enumerated instances of
when savings would be realized. As such, unobligated allotments
could not be indiscriminately declared as savings without first
determining whether any of the three instances existed. This signified
that the DBM’s withdrawal of unobligated allotments had disregarded
the definition of savings under the GAAs.
Justice Carpio has validly observed in his Separate Concurring
Opinion that MOOE appropriations are deemed divided into twelve
monthly allocations within the fiscal year; hence, savings could be
generated monthly from the excess or unused MOOE appropriations
other than the Mandatory Expenditures and Expenditures for
Business-type Activities because of the physical impossibility to
obligate and spend such funds as MOOE for a period that already
lapsed. Following this observation, MOOE for future months are not
savings and cannot be transferred.
The DBM’s Memorandum for the President dated June 25, 2012
(which became the basis of NBC No. 541) stated:
ON THE AUTHORITY TO WITHDRAW UNOBLIGATED
ALLOTMENTS
5.0 The DBM, during the course of performance reviews
conducted on the agencies’ operations, particularly on the
implementation of their projects/activities, including
expenses incurred in undertaking the same, have been
continuously calling the attention of all National Government
agencies (NGAs) with low levels of obligations as of end of
the first quarter to speedup the implementation of their
programs and projects in the second quarter.
6.0 Said reminders were made in a series of consultation
meetings with the concerned agencies and with call-up
letters sent.
7.0 Despite said reminders and the availability of funds at the
department’s disposal, the level of financial performance of
some departments registered below program, with the
targeted obligations/disbursements for the first semester still
not being met.
8.0 In order to maximize the use of the available allotment,
all unobligated balances as of June 30, 2012, both for
continuing and current allotments shall be withdrawn and
pooled to fund fast moving programs/projects.
9.0 It may be emphasized that the allotments to be
withdrawn will be based on the list of slow moving projects to
be identified by the agencies and their catch up plans to be
evaluated by the DBM.
It is apparent from the foregoing text that the withdrawal of
unobligated allotments would be based on whether the allotments
pertained to slow-moving projects, or not. However, NBC No. 541 did
not set in clear terms the criteria for the withdrawal of unobligated
allotments, viz:
3.1. These guidelines shall cover the withdrawal of
unobligated allotments as of June 30, 2012 ofall national
government agencies (NGAs) charged against FY 2011
Continuing Appropriation (R.A. No. 10147) and FY 2012
Current Appropriation (R.A. No. 10155), pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses
(MOOE) related to the implementation of programs
and projects, as well as capitalized MOOE; and
3.1.3 Personal Services corresponding to unutilized
pension benefits declared as savings by the
agencies concerned based on their
undated/validated list of pensioners.
A perusal of its various provisions reveals that NBC No. 541 targeted
the "withdrawal of unobligated allotments of agencies with low levels
of obligations"151 "to fund priority and/or fast-moving
programs/projects."152 But the fact that the withdrawn allotments
could be "[r]eissued for the original programs and projects of the
agencies/OUs concerned, from which the allotments were
withdrawn"153 supported the conclusion that the PAPs had not yet
been finally discontinued or abandoned. Thus, the purpose for which
the withdrawn funds had been appropriated was not yet fulfilled, or
did not yet cease to exist, rendering the declaration of the funds as
savings impossible.
Worse, NBC No. 541 immediately considered for withdrawal all
released allotments in 2011 charged against the 2011 GAA that had
remained unobligated based on the following considerations, to wit:
 5.4.1 The departments/agencies’ approved priority programs
and projects are assumed to be implementation-ready and
doable during the given fiscal year; and
5.4.2 The practice of having substantial carryover
appropriations may imply that the agency has a slower-than-
programmed implementation capacity or agency tends to
implement projects within a two-year timeframe.
Such withdrawals pursuant to NBC No. 541, the circular that affected
the unobligated allotments for continuing and current appropriations
as of June 30, 2012, disregarded the 2-year period of availability of
the appropriations for MOOE and capital outlay extended under
Section 65, General Provisions of the 2011 GAA, viz:
Section 65. Availability of Appropriations. — Appropriations for
MOOE and capital outlays authorized in this Act shall be available for
release and obligation for the purpose specified, and under the same
special provisions applicable thereto, for a period extending to one
fiscal year after the end of the year in which such items were
appropriated: PROVIDED, That appropriations for MOOE and capital
outlays under R.A. No. 9970 shall be made available up to the end of
FY 2011: PROVIDED, FURTHER, That a report on these releases
and obligations shall be submitted to the Senate Committee on
Finance and the House Committee on Appropriations.
and Section 63 General Provisions of the 2012 GAA, viz:
Section 63. Availability of Appropriations. — Appropriations for
MOOE and capital outlays authorized in this Act shall be available for
release and obligation for the purpose specified, and under the same
special provisions applicable thereto, for a period extending to one
fiscal year after the end of the year in which such items were
appropriated: PROVIDED, That a report on these releases and
obligations shall be submitted to the Senate Committee on Finance
and the House Committee on Appropriations, either in printed form or
by way of electronic document.154
Thus, another alleged area of constitutional infirmity was that the
DAP and its relevant issuances shortened the period of availability of
the appropriations for MOOE and capital outlays.
Congress provided a one-year period of availability of the funds for
all allotment classes in the 2013 GAA (R.A. No. 10352), to wit:
Section 63. Availability of Appropriations.— All appropriations
authorized in this Act shall be available for release and obligation for
the purposes specified, and under the same special provisions
applicable thereto, until the end of FY 2013: PROVIDED, That a
report on these releases and obligations shall be submitted to the
Senate Committee on Finance and House Committee on
Appropriations, either in printed form or by way of electronic
document.
Yet, in his memorandum for the President dated May 20, 2013, Sec.
Abad sought omnibus authority to consolidate savings and unutilized
balances to fund the DAP on a quarterly basis, viz:
7.0 If the level of financial performance of some department
will register below program, even with the availability of
funds at their disposal, the targeted
obligations/disbursements for each quarter will not be met. It
is important to note that these funds will lapse at the end of
the fiscal year if these remain unobligated.
8.0 To maximize the use of the available allotment, all
unobligated balances at the end of every quarter, both for
continuing and current allotments shall be withdrawn and
pooled to fund fast moving programs/projects.
9.0 It may be emphasized that the allotments to be
withdrawn will be based on the list of slow moving projects to
be identified by the agencies and their catch up plans to be
evaluated by the DBM.
The validity period of the affected appropriations, already given the
brief Lifes pan of one year, was further shortened to only a quarter of
a year under the DBM’s memorandum dated May 20, 2013.
The petitioners accuse the respondents of forcing the generation of
savings in order to have a larger fund available for discretionary
spending. They aver that the respondents, by withdrawing
unobligated allotments in the middle of the fiscal year, in effect
deprived funding for PAPs with existing appropriations under the
GAAs.155
The respondents belie the accusation, insisting that the unobligated
allotments were being withdrawn upon the instance of the
implementing agencies based on their own assessment that they
could not obligate those allotments pursuant to the President’s
directive for them to spend their appropriations as quickly as they
could in order to ramp up the economy.156
We agree with the petitioners.
Contrary to the respondents’ insistence, the withdrawals were upon
the initiative of the DBM itself. The text of NBC No. 541 bears this
out, to wit:
5.2 For the purpose of determining the amount of unobligated
allotments that shall be withdrawn, all
departments/agencies/operating units (OUs) shall submit to DBM not
later than July 30, 2012, the following budget accountability reports
as of June 30, 2012;
• Statement of Allotments, Obligation and Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2
of this Circular, the agency’s latest report available shall be used by
DBM as basis for withdrawal of allotment. The DBM shall
compute/approximate the agency’s obligation level as of June 30 to
derive its unobligated allotments as of same period. Example: If the
March 31 SAOB or FRO reflects actual obligations of P 800M then
the June 30 obligation level shall approximate to ₱1,600 M (i.e.,
₱800 M x 2 quarters).
The petitioners assert that no law had authorized the withdrawal and
transfer of unobligated allotments and the pooling of unreleased
appropriations; and that the unbridled withdrawal of unobligated
allotments and the retention of appropriated funds were akin to the
impoundment of appropriations that could be allowed only in case of
"unmanageable national government budget deficit" under the
GAAs,157 thus violating the provisions of the GAAs of 2011, 2012 and
2013 prohibiting the retention or deduction of allotments.158
In contrast, the respondents emphasize that NBC No. 541 adopted a
spending, not saving, policy as a last-ditch effort of the Executive to
push agencies into actually spending their appropriations; that such
policy did not amount to an impoundment scheme, because
impoundment referred to the decision of the Executive to refuse to
spend funds for political or ideological reasons; and that the
withdrawal of allotments under NBC No. 541 was made pursuant to
Section 38, Chapter 5, Book VI of the Administrative Code, by which
the President was granted the authority to suspend or otherwise stop
further expenditure of funds allotted to any agency whenever in his
judgment the public interest so required.
The assertions of the petitioners are upheld. The withdrawal and
transfer of unobligated allotments and the pooling of unreleased
appropriations were invalid for being bereft of legal support.
Nonetheless, such withdrawal of unobligated allotments and the
retention of appropriated funds cannot be considered as
impoundment.
According to Philippine Constitution Association v.
Enriquez:159 "Impoundment refers to a refusal by the President, for
whatever reason, to spend funds made available by Congress. It is
the failure to spend or obligate budget authority of any type."
Impoundment under the GAA is understood to mean the retention or
deduction of appropriations. The 2011 GAA authorized impoundment
only in case of unmanageable National Government budget deficit, to
wit:
Section 66. Prohibition Against Impoundment of Appropriations. No
appropriations authorized under this Act shall be impounded through
retention or deduction, unless in accordance with the rules and
regulations to be issued by the DBM: PROVIDED, That all the funds
appropriated for the purposes, programs, projects and activities
authorized under this Act, except those covered under the
Unprogrammed Fund, shall be released pursuant to Section 33 (3),
Chapter 5, Book VI of E.O. No. 292.
Section 67. Unmanageable National Government Budget Deficit.
Retention or deduction of appropriations authorized in this Act shall
be effected only in cases where there is an unmanageable national
government budget deficit.
Unmanageable national government budget deficit as used in this
section shall be construed to mean that (i) the actual national
government budget deficit has exceeded the quarterly budget deficit
targets consistent with the full-year target deficit as indicated in the
FY 2011 Budget of
Expenditures and Sources of Financing submitted by the President
and approved by Congress pursuant to Section 22, Article VII of the
Constitution, or (ii) there are clear economic indications of an
impending occurrence of such condition, as determined by the
Development Budget Coordinating Committee and approved by the
President.
The 2012 and 2013 GAAs contained similar provisions.
The withdrawal of unobligated allotments under the DAP should not
be regarded as impoundment because it entailed only the transfer of
funds, not the retention or deduction of appropriations.
Nor could Section 68 of the 2011 GAA (and the similar provisions of
the 2012 and 2013 GAAs) be applicable. They uniformly stated:
Section 68. Prohibition Against Retention/Deduction of Allotment.
Fund releases from appropriations provided in this Act shall be
transmitted intact or in full to the office or agency concerned. No
retention or deduction as reserves or overhead shall be made,
except as authorized by law, or upon direction of the President of the
Philippines. The COA shall ensure compliance with this provision to
the extent that sub-allotments by agencies to their subordinate
offices are in conformity with the release documents issued by the
DBM.
The provision obviously pertained to the retention or deduction of
allotments upon their release from the DBM, which was a different
matter altogether. The Court should not expand the meaning of the
provision by applying it to the withdrawal of allotments.
The respondents rely on Section 38, Chapter 5, Book VI of the
Administrative Code of 1987 to justify the withdrawal of unobligated
allotments. But the provision authorized only the suspension or
stoppage of further expenditures, not the withdrawal of unobligated
allotments, to wit:
Section 38. Suspension of Expenditure of Appropriations.- Except as
otherwise provided in the General Appropriations Act and whenever
in his judgment the public interest so requires, the President, upon
notice to the head of office concerned, is authorized to suspend or
otherwise stop further expenditure of funds allotted for any agency,
or any other expenditure authorized in the General Appropriations
Act, except for personal services appropriations used for permanent
officials and employees.
Moreover, the DBM did not suspend or stop further expenditures in
accordance with Section 38, supra, but instead transferred the funds
to other PAPs.
It is relevant to remind at this juncture that the balances of
appropriations that remained unexpended at the end of the fiscal
year were to be reverted to the General Fund.1âwphi1 This was the
mandate of Section 28, Chapter IV, Book VI of the Administrative
Code, to wit:
Section 28. Reversion of Unexpended Balances of Appropriations,
Continuing Appropriations.- Unexpended balances of appropriations
authorized in the General Appropriation Act shall revert to the
unappropriated surplus of the General Fund at the end of the fiscal
year and shall not thereafter be available for expenditure except by
subsequent legislative enactment: Provided, that appropriations for
capital outlays shall remain valid until fully spent or reverted:
provided, further, that continuing appropriations for current operating
expenditures may be specifically recommended and approved as
such in support of projects whose effective implementation calls for
multi-year expenditure commitments: provided, finally, that the
President may authorize the use of savings realized by an agency
during given year to meet non-recurring expenditures in a
subsequent year.
The balances of continuing appropriations shall be reviewed as part
of the annual budget preparation process and the preparation
process and the President may approve upon recommendation of
the Secretary, the reversion of funds no longer needed in connection
with the activities funded by said continuing appropriations.
The Executive could not circumvent this provision by declaring
unreleased appropriations and unobligated allotments as savings
prior to the end of the fiscal year.
b.3. Third Requisite – No funds from
savings could be transferred under
the DAP to augment deficient items
not provided in the GAA
The third requisite for a valid transfer of funds is that the purpose of
the transfer should be "to augment an item in the general
appropriations law for the respective offices." The term "augment"
means to enlarge or increase in size, amount, or degree.160
The GAAs for 2011, 2012 and 2013 set as a condition for
augmentation that the appropriation for the PAP item to be
augmented must be deficient, to wit: –
x x x Augmentation implies the existence in this Act of a program,
activity, or project with an appropriation, which upon implementation,
or subsequent evaluation of needed resources, is determined to be
deficient. In no case shall a non-existent program, activity, or project,
be funded by augmentation from savings or by the use of
appropriations otherwise authorized in this Act.
In other words, an appropriation for any PAP must first be
determined to be deficient before it could be augmented from
savings. Note is taken of the fact that the 2013 GAA already made
this quite clear, thus:
Section 52. Use of Savings. The President of the Philippines, the
Senate President, the Speaker of the House of Representatives, the
Chief Justice of the Supreme Court, the Heads of Constitutional
Commissions enjoying fiscal autonomy, and the Ombudsman are
hereby authorized to use savings in their respective appropriations to
augment actual deficiencies incurred for the current year in any item
of their respective appropriations.
As of 2013, a total of ₱144.4 billion worth of PAPs were implemented
through the DAP.161
Of this amount ₱82.5 billion were released in 2011 and ₱54.8 billion
in 2012.162 Sec. Abad has reported that 9% of the total DAP releases
were applied to the PAPs identified by the legislators.163
The petitioners disagree, however, and insist that the DAP supported
the following PAPs that had not been covered with appropriations in
the respective GAAs, namely:
(i) ₱1.5 billion for the Cordillera People’s Liberation Army;
(ii) ₱1.8 billion for the Moro National Liberation Front;
 (iii) ₱700 million for assistance to Quezon Province;164
(iv) ₱50 million to ₱100 (million) each to certain senators;165
(v) ₱10 billion for the relocation of families living along
dangerous zones under the National Housing Authority;
(vi) ₱10 billion and ₱20 billion equity infusion under the
Bangko Sentral;
(vii) ₱5.4 billion landowners’ compensation under the
Department of Agrarian Reform; APPROPRIATION
(viii) ₱8.6 billion for the ARMM comprehensive peace and
development program; A.03.a.01.a
(ix) ₱6.5 billion augmentation of LGU internal revenue
allotments
(x) ₱5 billion for crucial projects like tourism road
construction under the Department of Tourism and the
Department of Public Works and Highways;
(xi) ₱1.8 billion for the DAR-DPWH Tulay ng Pangulo;
Upon careful review of the documents contained in the seven
evidence packets, we conclude that the "savings" pooled under the
DAP were allocated to PAPs that were not covered by any
appropriations in the pertinent GAAs.
For example, the SARO issued on December 22, 2011 for the highly
vaunted Disaster Risk, Exposure, Assessment and Mitigation
(DREAM) project under the Department of Science and Technology
(DOST) covered the amount of ₱1.6 Billion,169 broken down as
follows:
PARTICULARS AMOUNT
AUTHORIZED
Generation of new knowledge and technologies
and research capability building in priority areas
identified as strategic to National Development
Personnel Services
Maintenance and Other Operating Expenses  P 43,504,024
Capital Outlays 1,164,517,589
391,978,387
P 1,600,000,000
the pertinent provision of the 2011 GAA (R.A. No. 10147) showed
that Congress had appropriated only ₱537,910,000 for MOOE, but
nothing for personnel services and capital outlays, to wit:

(xii) ₱1.96 billion for the DOH-DPWH rehabilitation of

regional health units; and Personne Maintenan Capital TOTAL
l ce Outlays
Services and Other
(xiii) ₱4 billion for the DepEd-PPP school infrastructure
Operating
projects.166
Expenditur
es
In refutation, the OSG argues that a total of 116 DAP-financed PAPs
were implemented, had appropriation covers, and could properly be III Operations
accounted for because the funds were released following and .
pursuant to the standard practices adopted by the DBM.167 In support a Funding 177,406, 1,887,365, 49,090,0 2,113,861,
of its argument, the OSG has submitted seven evidence packets . Assistance to 000 000 00 000
containing memoranda, SAROs, and other pertinent documents Science
relative to the implementation and fund transfers under the DAP.168 and
 Technology The consequence was that any PAP requiring expenditure that did
Activities not receive any appropriation under the GAAs could only be a new
PAP, any funding for which would go beyond the authority laid down
1 Central Office 1,554,238, 1,554,238, by Congress in enacting the GAAs. That happened in some
. 000 000 instances under the DAP.
a.
Generatio In relation to the December 22, 2011 SARO issued to the Philippine
n of new Council for Industry, Energy and Emerging Technology Research
knowledg and Development (DOST-PCIEETRD)171 for Establishment of the
e and Advanced Failure Analysis Laboratory, which reads:
technologi
es and APPROPRIATIO PARTICULARS AMOUNT
research AUTHORIZED
capability
building in
priority Development, integration and coordination of the National
areas Research System for Industry, Energy and Emerging
identified Technology and Related Fields
as Capital Outlays P 300,000,000
strategic the appropriation code and the particulars appearing in the SARO did
to not correspond to the program specified in the GAA, whose
National particulars were Research and Management Services(inclusive of
Developm 537,910,0 537,910,00 the following activities: (1) Technological and Economic Assessment
ent 00 0 for Industry, Energy and Utilities; (2) Dissemination of Science and
Aside from this transfer under the DAP to the DREAM project Technology Information; and (3) Management of PCIERD
exceeding by almost 300% the appropriation by Congress for the Information System for Industry, Energy and Utilities. Even assuming
program Generation of new knowledge and technologies and that Development, integration and coordination of the National
research capability building in priority areas identified as strategic to Research System for Industry, Energy and Emerging Technology
National Development, the Executive allotted funds for personnel and Related Fields– the particulars stated in the SARO – could fall
services and capital outlays. The Executive thereby substituted its under the broad program description of Research and Management
will to that of Congress. Worse, the Executive had not earlier Services– as appearing in the SARO, it would nonetheless remain a
proposed any amount for personnel services and capital outlays in new activity by reason of its not being specifically stated in the GAA.
the NEP that became the basis of the 2011 GAA.170 As such, the DBM, sans legislative authorization, could not validly
fund and implement such PAP under the DAP.
It is worth stressing in this connection that the failure of the GAAs to
set aside any amounts for an expense category sufficiently indicated In defending the disbursements, however, the OSG contends that
that Congress purposely did not see fit to fund, much less implement, the Executive enjoyed sound discretion in implementing the budget
the PAP concerned. This indication becomes clearer when even the given the generality in the language and the broad policy objectives
President himself did not recommend in the NEP to fund the PAP. identified under the GAAs;172 and that the President enjoyed
unlimited authority to spend the initial appropriations under his
authority to declare and utilize savings,173 and in keeping with his
duty to faithfully execute the laws.
Although the OSG rightly contends that the Executive was authorized
to spend in line with its mandate to faithfully execute the laws (which
included the GAAs), such authority did not translate to unfettered
discretion that allowed the President to substitute his own will for that
of Congress. He was still required to remain faithful to the provisions
of the GAAs, given that his power to spend pursuant to the GAAs
was but a delegation to him from Congress. Verily, the power to
spend the public wealth resided in Congress, not in the
Executive.174 Moreover, leaving the spending power of the Executive
unrestricted would threaten to undo the principle of separation of
powers.175
Congress acts as the guardian of the public treasury in faithful
discharge of its power of the purse whenever it deliberates and acts
on the budget proposal submitted by the Executive.176 Its power of
the purse is touted as the very foundation of its institutional
strength,177 and underpins "all other legislative decisions and
regulating the balance of influence between the legislative and
executive branches of government."178 Such enormous power
encompasses the capacity to generate money for the Government,
to appropriate public funds, and to spend the money.179 Pertinently,
when it exercises its power of the purse, Congress wields control by
specifying the PAPs for which public money should be spent.
It is the President who proposes the budget but it is Congress that
has the final say on matters of appropriations.180For this purpose,
appropriation involves two governing principles, namely: (1) "a
Principle of the Public Fisc, asserting that all monies received from
whatever source by any part of the government are public funds;"
and (2) "a Principle of Appropriations Control, prohibiting expenditure
of any public money without legislative authorization."181To conform
with the governing principles, the Executive cannot circumvent the
prohibition by Congress of an expenditure for a PAP by resorting to
either public or private funds.182 Nor could the Executive transfer
appropriated funds resulting in an increase in the budget for one
PAP, for by so doing the appropriation for another PAP is necessarily
decreased. The terms of both appropriations will thereby be violated.
b.4 Third Requisite – Cross-border
augmentations from savings were
prohibited by the Constitution
By providing that the President, the President of the Senate, the
Speaker of the House of Representatives, the Chief Justice of the
Supreme Court, and the Heads of the Constitutional Commissions
may be authorized to augment any item in the GAA "for their
respective offices," Section 25(5), supra, has delineated borders
between their offices, such that funds appropriated for one office are
prohibited from crossing over to another office even in the guise of
augmentation of a deficient item or items. Thus, we call such
transfers of funds cross-border transfers or cross-border
augmentations.
To be sure, the phrase "respective offices" used in Section 25(5),
supra, refers to the entire Executive, with respect to the President;
the Senate, with respect to the Senate President; the House of
Representatives, with respect to the Speaker; the Judiciary, with
respect to the Chief Justice; the Constitutional Commissions, with
respect to their respective Chairpersons.
Did any cross-border transfers or augmentations transpire?
During the oral arguments on January 28, 2014, Sec. Abad admitted
making some cross-border augmentations, to wit:
JUSTICE BERSAMIN:
Alright, the whole time that you have been Secretary of Department
of Budget and Management, did the Executive Department ever
redirect any part of savings of the National Government under your
control cross border to another department?
SECRETARY ABAD:
Well, in the Memos that we submitted to you, such an instance, Your
Honor
JUSTICE BERSAMIN:
Can you tell me two instances? I don’t recall having read your
material.
SECRETARY ABAD:
Well, the first instance had to do with a request from the House of
Representatives. They started building their e-library in 2010 and
they had a budget for about 207 Million but they lack about 43 Million
to complete its 250 Million requirements. Prior to that, the COA, in an
audit observation informed the Speaker that they had to continue
with that construction otherwise the whole building, as well as the
equipments therein may suffer from serious deterioration. And at that
time, since the budget of the House of Representatives was not
enough to complete 250 Million, they wrote to the President
requesting for an augmentation of that particular item, which was
granted, Your Honor. The second instance in the Memos is a request
from the Commission on Audit. At the time they were pushing very
strongly the good governance programs of the government and
therefore, part of that is a requirement to conduct audits as well as
review financial reports of many agencies. And in the performance of
that function, the Commission on Audit needed information
technology equipment as well as hire consultants and litigators to
help them with their audit work and for that they requested funds
from the Executive and the President saw that it was important for
the Commission to be provided with those IT equipments and
litigators and consultants and the request was granted, Your Honor.
JUSTICE BERSAMIN:
These cross border examples, cross border augmentations were not
supported by appropriations…
SECRETARY ABAD:
They were, we were augmenting existing items within their…
(interrupted)
JUSTICE BERSAMIN:
No, appropriations before you augmented because this is a cross
border and the tenor or text of the Constitution is quite clear as far as
I am concerned. It says here, "The power to augment may only be
made to increase any item in the General Appropriations Law for
their respective offices." Did you not feel constricted by this
provision?
SECRETARY ABAD:
Well, as the Constitution provides, the prohibition we felt was on the
transfer of appropriations, Your Honor. What we thought we did was
to transfer savings which was needed by the Commission to address
deficiency in an existing item in both the Commission as well as in
the House of Representatives; that’s how we saw…(interrupted)
JUSTICE BERSAMIN:
So your position as Secretary of Budget is that you could do that?
SECRETARY ABAD:
In an extreme instances because…(interrupted)
JUSTICE BERSAMIN:
No, no, in all instances, extreme or not extreme, you could do that,
that’s your feeling.
SECRETARY ABAD:
Well, in that particular situation when the request was made by the
Commission and the House of Representatives, we felt that we
needed to respond because we felt…(interrupted).183
 The records show, indeed, that funds amounting to ₱143,700,000.00
and ₱250,000,000.00 were transferred under the DAP respectively to
the COA184 and the House of Representatives.185 Those transfers of
funds, which constituted cross-border augmentations for being from
the Executive to the COA and the House of Representatives, are
graphed as follows:186
AMOUNT
(In thousand pesos)
DATE
FICE PURPOSE
RELEASED Reserve
Imposed
mmission on IT Infrastructure Program and hiring of 11/11/11  
dit additional litigation experts
ngress – Completion of the construction of the 07/23/12 207,034
use of Legislative Library and Archives (Savings of HOR)
presentatives Building/Congressional e-library
The respondents further stated in their memorandum that the
President "made available" to the "Commission on Elections the
savings of his department upon [its] request for funds…" 187 This was
another instance of a cross-border augmentation.
The respondents justified all the cross-border transfers thusly:
99. The Constitution does not prevent the President from transferring
savings of his department to another department upon the latter’s
request, provided it is the recipient department that uses such funds
to augment its own appropriation. In such a case, the President
merely gives the other department access to public funds but he
cannot dictate how they shall be applied by that department whose
fiscal autonomy is guaranteed by the Constitution.188
In the oral arguments held on February 18, 2014, Justice Vicente V.
Mendoza, representing Congress, announced a different
characterization of the cross-border transfers of funds as in the
nature of "aid" instead of "augmentation," viz:
HONORABLE MENDOZA:
The cross-border transfers, if Your Honors please, is not an
application of the DAP. What were these cross-border transfers?
They are transfers of savings as defined in the various General
Appropriations Act. So, that makes it similar to the DAP, the use of
savings. There was a cross-border which appears to be in violation
of Section 25, paragraph 5 of Article VI, in the sense that the border
was crossed. But never has it been claimed that the purpose was to
augment a deficient item in another department of the government or
agency of the government. The cross-border transfers, if Your
Releases
Honors please, were in the nature of [aid] rather than augmentations.
Here is a government entity separate and independent from the
Executive Department solely in need of public funds. The President
143,700
is there 24 hours a day, 7 days a week. He’s in charge of the whole
operation although six or seven heads of government offices are
given the power to augment. Only the President stationed there and
250,000
in effect in-charge and has the responsibility for the failure of any part
of the government. You have election, for one reason or another, the
money is not enough to hold election. There would be chaos if no
money is given as an aid, not to augment, but as an aid to a
department like COA. The President is responsible in a way that the
other heads, given the power to augment, are not. So, he cannot
very well allow this, if Your Honor please.189
JUSTICE LEONEN:
May I move to another point, maybe just briefly. I am curious that the
position now, I think, of government is that some transfers of savings
is now considered to be, if I’m not mistaken, aid not augmentation.
Am I correct in my hearing of your argument?
HONORABLE MENDOZA:
That’s our submission, if Your Honor, please.
JUSTICE LEONEN:
May I know, Justice, where can we situate this in the text of the HONORABLE MENDOZA:
Constitution? Where do we actually derive the concepts that
transfers of appropriation from one branch to the other or what Very extra-ordinary situations.
happened in DAP can be considered a said? What particular text in
the Constitution can we situate this? JUSTICE LEONEN:

HONORABLE MENDOZA: But Counsel, this would be new doctrine, in case?

There is no particular provision or statutory provision for that matter, HONORABLE MENDOZA:
if Your Honor please. It is drawn from the fact that the Executive is
the executive in-charge of the success of the government.
Yes, if Your Honor please.190
JUSTICE LEONEN:
Regardless of the variant characterizations of the cross-border
transfers of funds, the plain text of Section 25(5), supra, disallowing
So, the residual powers labelled in Marcos v. Manglapus would be cross border transfers was disobeyed. Cross-border transfers,
the basis for this theory of the government? whether as augmentation, or as aid, were prohibited under Section
25(5), supra.
HONORABLE MENDOZA:
4.
Yes, if Your Honor, please. Sourcing the DAP from unprogrammed
funds despite the original revenue targets
JUSTICE LEONEN: not having been exceeded was invalid

A while ago, Justice Carpio mentioned that the remedy is might be to
go to Congress. That there are opportunities and there have been
opportunities of the President to actually go to Congress and ask for
supplemental budgets?
HONORABLE MENDOZA:
Funding under the DAP were also sourced from unprogrammed
funds provided in the GAAs for 2011, 2012,and 2013. The
respondents stress, however, that the unprogrammed funds were not
brought under the DAP as savings, but as separate sources of funds;
and that, consequently, the release and use of unprogrammed funds
were not subject to the restrictions under Section 25(5), supra.

If there is time to do that, I would say yes. The documents contained in the Evidence Packets by the OSG have
confirmed that the unprogrammed funds were treated as separate
sources of funds. Even so, the release and use of the
JUSTICE LEONEN:
unprogrammed funds were still subject to restrictions, for, to start
with, the GAAs precisely specified the instances when the
So, the theory of aid rather than augmentation applies in extra- unprogrammed funds could be released and the purposes for which
ordinary situation? they could be used.
The petitioners point out that a condition for the release of the
unprogrammed funds was that the revenue collections must exceed
revenue targets; and that the release of the unprogrammed funds
was illegal because such condition was not met.191
The respondents disagree, holding that the release and use of the
unprogrammed funds under the DAP were in accordance with the
pertinent provisions of the GAAs. In particular, the DBM avers that
the unprogrammed funds could be availed of when any of the
following three instances occur, to wit: (1) the revenue collections
exceeded the original revenue targets proposed in the BESFs
submitted by the President to Congress; (2) new revenues were
collected or realized from sources not originally considered in the
BESFs; or(3) newly-approved loans for foreign assisted projects
were secured, or when conditions were triggered for other sources of
funds, such as perfected loan agreements for foreign-assisted
projects.192 This view of the DBM was adopted by all the respondents
in their Consolidated Comment.193
The BESFs for 2011, 2012 and 2013 uniformly defined
"unprogrammed appropriations" as appropriations that provided
standby authority to incur additional agency obligations for priority
PAPs when revenue collections exceeded targets, and when
additional foreign funds are generated.194 Contrary to the DBM’s
averment that there were three instances when unprogrammed funds
could be released, the BESFs envisioned only two instances. The
third mentioned by the DBM – the collection of new revenues from
sources not originally considered in the BESFs – was not included.
This meant that the collection of additional revenues from new
sources did not warrant the release of the unprogrammed funds.
Hence, even if the revenues not considered in the BESFs were
collected or generated, the basic condition that the revenue
collections should exceed the revenue targets must still be complied
with in order to justify the release of the unprogrammed funds.
The view that there were only two instances when the
unprogrammed funds could be released was bolstered by the
following texts of the Special Provisions of the 2011 and 2012 GAAs,
to wit:
2011 GAA
1. Release of Fund. The amounts authorized herein shall be
released only when the revenue collections exceed the original
revenue targets submitted by the President of the Philippines to
Congress pursuant to Section 22, Article VII of the Constitution,
including savings generated from programmed appropriations for the
year: PROVIDED, That collections arising from sources not
considered in the aforesaid original revenue targets may be used to
cover releases from appropriations in this Fund: PROVIDED,
FURTHER, That in case of newly approved loans for foreign-assisted
projects, the existence of a perfected loan agreement for the purpose
shall be sufficient basis for the issuance of a SARO covering the loan
proceeds: PROVIDED, FURTHERMORE, That if there are savings
generated from the programmed appropriations for the first two
quarters of the year, the DBM may, subject to the approval of the
President, release the pertinent appropriations under the
Unprogrammed Fund corresponding to only fifty percent (50%) of the
said savings net of revenue shortfall: PROVIDED, FINALLY, That the
release of the balance of the total savings from programmed
appropriations for the year shall be subject to fiscal programming and
approval of the President.
2012 GAA
1. Release of the Fund. The amounts authorized herein shall be
released only when the revenue collections exceed the original
revenue targets submitted by the President of the Philippines to
Congress pursuant to Section 22, Article VII of the Constitution:
PROVIDED, That collections arising from sources not considered in
the aforesaid original revenue targets may be used to cover releases
from appropriations in this Fund: PROVIDED, FURTHER, That in
case of newly approved loans for foreign-assisted projects, the
existence of a perfected loan agreement for the purpose shall be
sufficient basis for the issuance of a SARO covering the loan
proceeds.
As can be noted, the provisos in both provisions to the effect that
"collections arising from sources not considered in the aforesaid
original revenue targets may be used to cover releases from The present controversy on the unprogrammed funds was rooted in
appropriations in this Fund" gave the authority to use such additional the correct interpretation of the phrase "revenue collections should
revenues for appropriations funded from the unprogrammed funds. exceed the original revenue targets." The petitioners take the phrase
They did not at all waive compliance with the basic requirement that to mean that the total revenue collections must exceed the total
revenue collections must still exceed the original revenue targets. revenue target stated in the BESF, but the respondents understand
the phrase to refer only to the collections for each source of revenue
In contrast, the texts of the provisos with regard to additional as enumerated in the BESF, with the condition being deemed
revenues generated from newly-approved foreign loans were clear to complied with once the revenue collections from a particular source
the effect that the perfected loan agreement would be in itself already exceeded the stated target.
"sufficient basis" for the issuance of a SARO to release the funds but
only to the extent of the amount of the loan. In such instance, the The BESF provided for the following sources of revenue, with the
revenue collections need not exceed the revenue targets to warrant corresponding revenue target stated for each source of revenue, to
the release of the loan proceeds, and the mere perfection of the loan wit:
agreement would suffice.
TAX REVENUES
It can be inferred from the foregoing that under these provisions of
the GAAs the additional revenues from sources not considered in the Taxes on Net Income and Profits
BESFs must be taken into account in determining if the revenue Taxes on Property
collections exceeded the revenue targets. The text of the relevant Taxes on Domestic Goods and Services
provision of the 2013 GAA, which was substantially similar to those
of the GAAs for 2011 and 2012, already made this explicit, thus: General Sales, Turnover or VAT
Selected Excises on Goods
1. Release of the Fund. The amounts authorized herein shall be
released only when the revenue collections exceed the original Selected Taxes on Services
revenue targets submitted by the President of the Philippines to Taxes on the Use of Goods or Property or Permission to
Congress pursuant to Section 22, Article VII of the Constitution, Perform Activities
including collections arising from sources not considered in the Other Taxes
aforesaid original revenue target, as certified by the BTr: Taxes on International Trade and Transactions
PROVIDED, That in case of newly approved loans for foreign-
assisted projects, the existence of a perfected loan agreement for the
purpose shall be sufficient basis for the issuance of a SARO covering NON-TAX REVENUES
the loan proceeds.
Fees and Charges
Consequently, that there were additional revenues from sources not BTR Income
considered in the revenue target would not be enough. The total
revenue collections must still exceed the original revenue targets to Government Services
justify the release of the unprogrammed funds (other than those from Interest on NG Deposits
newly-approved foreign loans). Interest on Advances to Government Corporations
Income from Investments
 Interest on Bond Holdings This is to certify that the actual dividend collections remitted to the
National Government for the period January to March 2012
Guarantee Fee amounted to ₱19.419 billion compared to the full year program of
Gain on Foreign Exchange ₱5.5 billion for 2012.197
NG Income Collected by BTr
And, finally, for 2013, the OSG presented the certification dated July
Dividends on Stocks 3, 2013 issued by National Treasurer Rosalia V. De Leon, to wit:
NG Share from Airport Terminal Fee
NG Share from PAGCOR Income This is to certify that the actual dividend collections remitted to the
NG Share from MIAA Profit National Government for the period January to May 2013 amounted
to ₱12.438 billion compared to the full year program of
Privatization ₱10.0198 billion for 2013.
Foreign Grants
Moreover, the National Government accounted for the sale of the
Thus, when the Court required the respondents to submit a right to build and operate the NAIA expressway amounting to ₱11.0
certification from the Bureau of Treasury (BTr) to the effect that the billion in June 2013.199
revenue collections had exceeded the original revenue
targets,195 they complied by submitting certifications from the BTr and The certifications reflected that by collecting dividends amounting to
Department of Finance (DOF) pertaining to only one identified source ₱23.8 billion in 2011, ₱19.419 billion in 2012, and ₱12.438 billion in
of revenue – the dividends from the shares of stock held by the 2013 the BTr had exceeded only the ₱5.5 billion in target revenues in
Government in government-owned and controlled corporations. the form of dividends from stocks in each of 2011 and 2012, and only
the ₱10 billion in target revenues in the form of dividends from stocks
To justify the release of the unprogrammed funds for 2011, the OSG in 2013.
presented the certification dated March 4, 2011 issued by DOF
Undersecretary Gil S. Beltran, as follows: However, the requirement that revenue collections exceed the
original revenue targets was to be construed in light of the purpose
This is to certify that under the Budget for Expenditures and Sources for which the unprogrammed funds were incorporated in the GAAs
of Financing for 2011, the programmed income from dividends from as standby appropriations to support additional expenditures for
shares of stock in government-owned and controlled corporations is certain priority PAPs should the revenue collections exceed the
5.5 billion. resource targets assumed in the budget or when additional foreign
project loan proceeds were realized. The unprogrammed funds were
included in the GAAs to provide ready cover so as not to delay the
This is to certify further that based on the records of the Bureau of
implementation of the PAPs should new or additional revenue
Treasury, the National Government has recorded dividend income
sources be realized during the year.200 Given the tenor of the
amounting to ₱23.8 billion as of 31 January 2011.196
certifications, the unprogrammed funds were thus not yet supported
by the corresponding resources.201
For 2012, the OSG submitted the certification dated April 26, 2012
issued by National Treasurer Roberto B. Tan, viz:
The revenue targets stated in the BESF were intended to address
the funding requirements of the proposed programmed
appropriations. In contrast, the unprogrammed funds, as standby
appropriations, were to be released only when there were revenues
in excess of what the programmed appropriations required. As such,
the revenue targets should be considered as a whole, not
individually; otherwise, we would be dealing with artificial revenue
surpluses. The requirement that revenue collections must exceed
revenue target should be understood to mean that the revenue
collections must exceed the total of the revenue targets stated in the
BESF. Moreover, to release the unprogrammed funds simply
because there was an excess revenue as to one source of revenue
would be an unsound fiscal management measure because it would
disregard the budget plan and foster budget deficits, in contravention
of the Government’s surplus budget policy.202
We cannot, therefore, subscribe to the respondents’ view.
5.
Equal protection, checks and balances,
and public accountability challenges
The DAP is further challenged as violative of the Equal Protection
Clause, the system of checks and balances, and the principle of
public accountability.
With respect to the challenge against the DAP under the Equal
Protection Clause,203 Luna argues that the implementation of the
DAP was "unfair as it [was] selective" because the funds released
under the DAP was not made available to all the legislators, with
some of them refusing to avail themselves of the DAP funds, and
others being unaware of the availability of such funds. Thus, the DAP
practised "undue favoritism" in favor of select legislators in
contravention of the Equal Protection Clause.
Similarly, COURAGE contends that the DAP violated the Equal
Protection Clause because no reasonable classification was used in
distributing the funds under the DAP; and that the Senators who
supposedly availed themselves of said funds were differently treated
as to the amounts they respectively received.
Anent the petitioners’ theory that the DAP violated the system of
checks and balances, Luna submits that the grant of the funds under
the DAP to some legislators forced their silence about the issues and
anomalies surrounding the DAP. Meanwhile, Belgica stresses that
the DAP, by allowing the legislators to identify PAPs, authorized
them to take part in the implementation and execution of the GAAs, a
function that exclusively belonged to the Executive; that such
situation constituted undue and unjustified legislative encroachment
in the functions of the Executive; and that the President arrogated
unto himself the power of appropriation vested in Congress because
NBC No. 541 authorized the use of the funds under the DAP for
PAPs not considered in the 2012 budget.
Finally, the petitioners insist that the DAP was repugnant to the
principle of public accountability enshrined in the
Constitution,204 because the legislators relinquished the power of
appropriation to the Executive, and exhibited a reluctance to inquire
into the legality of the DAP.
The OSG counters the challenges, stating that the supposed
discrimination in the release of funds under the DAP could be raised
only by the affected Members of Congress themselves, and if the
challenge based on the violation of the Equal Protection Clause was
really against the constitutionality of the DAP, the arguments of the
petitioners should be directed to the entitlement of the legislators to
the funds, not to the proposition that all of the legislators should have
been given such entitlement.
The challenge based on the contravention of the Equal Protection
Clause, which focuses on the release of funds under the DAP to
legislators, lacks factual and legal basis. The allegations about
Senators and Congressmen being unaware of the existence and
implementation of the DAP, and about some of them having refused
to accept such funds were unsupported with relevant data. Also, the
claim that the Executive discriminated against some legislators on
the ground alone of their receiving less than the others could not of
itself warrant a finding of contravention of the Equal Protection
Clause. The denial of equal protection of any law should be an issue
to be raised only by parties who supposedly suffer it, and, in these
cases, such parties would be the few legislators claimed to have
been discriminated against in the releases of funds under the DAP.
The reason for the requirement is that only such affected legislators
could properly and fully bring to the fore when and how the denial of
equal protection occurred, and explain why there was a denial in
their situation. The requirement was not met here. Consequently, the
Court was not put in the position to determine if there was a denial of
equal protection. To have the Court do so despite the inadequacy of
the showing of factual and legal support would be to compel it to
speculate, and the outcome would not do justice to those for whose
supposed benefit the claim of denial of equal protection has been
made.
The argument that the release of funds under the DAP effectively
stayed the hands of the legislators from conducting congressional
inquiries into the legality and propriety of the DAP is speculative.
That deficiency eliminated any need to consider and resolve the
argument, for it is fundamental that speculation would not support
any proper judicial determination of an issue simply because nothing
concrete can thereby be gained. In order to sustain their
constitutional challenges against official acts of the Government, the
petitioners must discharge the basic burden of proving that the
constitutional infirmities actually existed.205 Simply put, guesswork
and speculation cannot overcome the presumption of the
constitutionality of the assailed executive act.
We do not need to discuss whether or not the DAP and its
implementation through the various circulars and memoranda of the
DBM transgressed the system of checks and balances in place in our
constitutional system. Our earlier expositions on the DAP and its
implementing issuances infringing the doctrine of separation of
powers effectively addressed this particular concern.
Anent the principle of public accountability being transgressed
because the adoption and implementation of the DAP constituted an
assumption by the Executive of Congress’ power of appropriation,
we have already held that the DAP and its implementing issuances
were policies and acts that the Executive could properly adopt and
do in the execution of the GAAs to the extent that they sought to
implement strategies to ramp up or accelerate the economy of the
country.
6.
Doctrine of operative fact was applicable
After declaring the DAP and its implementing issuances
constitutionally infirm, we must now deal with the consequences of
the declaration.
Article 7 of the Civil Code provides:
Article 7. Laws are repealed only by subsequent ones, and their
violation or non-observance shall not be excused by disuse, or
custom or practice to the contrary.
When the courts declared a law to be inconsistent with the
Constitution, the former shall be void and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid
only when they are not contrary to the laws or the Constitution.
A legislative or executive act that is declared void for being
unconstitutional cannot give rise to any right or
obligation.206 However, the generality of the rule makes us ponder
whether rigidly applying the rule may at times be impracticable or
wasteful. Should we not recognize the need to except from the rigid
application of the rule the instances in which the void law or
executive act produced an almost irreversible result?
The need is answered by the doctrine of operative fact. The doctrine,
definitely not a novel one, has been exhaustively explained in De
Agbayani v. Philippine National Bank:207
The decision now on appeal reflects the orthodox view that an
unconstitutional act, for that matter an executive order or a municipal
ordinance likewise suffering from that infirmity, cannot be the source
of any legal rights or duties. Nor can it justify any official act taken
under it. Its repugnancy to the fundamental law once judicially
declared results in its being to all intents and purposes a mere scrap
of paper. As the new Civil Code puts it: ‘When the courts declare a
law to be inconsistent with the Constitution, the former shall be void
and the latter shall govern.’ Administrative or executive acts, orders
and regulations shall be valid only when they are not contrary to the
laws of the Constitution. It is understandable why it should be so, the
Constitution being supreme and paramount. Any legislative or
executive act contrary to its terms cannot survive.
Such a view has support in logic and possesses the merit of
simplicity. It may not however be sufficiently realistic. It does not
admit of doubt that prior to the declaration of nullity such challenged
legislative or executive act must have been in force and had to be
complied with. This is so as until after the judiciary, in an appropriate
case, declares its invalidity, it is entitled to obedience and respect.
Parties may have acted under it and may have changed their
positions. What could be more fitting than that in a subsequent
litigation regard be had to what has been done while such legislative
or executive act was in operation and presumed to be valid in all
respects. It is now accepted as a doctrine that prior to its being
nullified, its existence as a fact must be reckoned with. This is merely
to reflect awareness that precisely because the judiciary is the
governmental organ which has the final say on whether or not a
legislative or executive measure is valid, a period of time may have
elapsed before it can exercise the power of judicial review that may
lead to a declaration of nullity. It would be to deprive the law of its
quality of fairness and justice then, if there be no recognition of what
had transpired prior to such adjudication.
In the language of an American Supreme Court decision: ‘The actual
existence of a statute, prior to such a determination [of
unconstitutionality], is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always be erased by
a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects, with respect
to particular relations, individual and corporate, and particular
conduct, private and official.’"
The doctrine of operative fact recognizes the existence of the law or
executive act prior to the determination of its unconstitutionality as an
operative fact that produced consequences that cannot always be
erased, ignored or disregarded. In short, it nullifies the void law or
executive act but sustains its effects. It provides an exception to the
general rule that a void or unconstitutional law produces no
effect.208 But its use must be subjected to great scrutiny and
circumspection, and it cannot be invoked to validate an
unconstitutional law or executive act, but is resorted to only as a
matter of equity and fair play.209 It applies only to cases where
extraordinary circumstances exist, and only when the extraordinary
circumstances have met the stringent conditions that will permit its
application.
We find the doctrine of operative fact applicable to the adoption and
implementation of the DAP. Its application to the DAP proceeds from
equity and fair play. The consequences resulting from the DAP and
its related issuances could not be ignored or could no longer be
undone.
To be clear, the doctrine of operative fact extends to a void or
unconstitutional executive act. The term executive act is broad
enough to include any and all acts of the Executive, including those
that are quasi legislative and quasi-judicial in nature. The Court held
so in Hacienda Luisita, Inc. v. Presidential Agrarian Reform
Council:210
Nonetheless, the minority is of the persistent view that the
applicability of the operative fact doctrine should be limited to
statutes and rules and regulations issued by the executive
department that are accorded the same status as that of a statute or
those which are quasi-legislative in nature. Thus, the minority
concludes that the phrase ‘executive act’ used in the case of De
Agbayani v. Philippine National Bank refers only to acts, orders, and
rules and regulations that have the force and effect of law. The
minority also made mention of the Concurring Opinion of Justice
Enrique Fernando in Municipality of Malabang v. Benito, where it was
supposedly made explicit that the operative fact doctrine applies to
executive acts, which are ultimately quasi-legislative in nature.
We disagree. For one, neither the De Agbayani case nor the
Municipality of Malabang case elaborates what ‘executive act’ mean.
Moreover, while orders, rules and regulations issued by the
President or the executive branch have fixed definitions and meaning
in the Administrative Code and jurisprudence, the phrase ‘executive
act’ does not have such specific definition under existing laws. It
should be noted that in the cases cited by the minority, nowhere can
it be found that the term ‘executive act’ is confined to the foregoing.
Contrarily, the term ‘executive act’ is broad enough to encompass
decisions of administrative bodies and agencies under the executive
department which are subsequently revoked by the agency in
question or nullified by the Court.
A case in point is the concurrent appointment of Magdangal B. Elma
(Elma) as Chairman of the Presidential Commission on Good
Government (PCGG) and as Chief Presidential Legal Counsel
(CPLC) which was declared unconstitutional by this Court in Public
Interest Center, Inc. v. Elma. In said case, this Court ruled that the
concurrent appointment of Elma to these offices is in violation of
Section 7, par. 2, Article IX-B of the 1987 Constitution, since these
are incompatible offices. Notably, the appointment of Elma as
Chairman of the PCGG and as CPLC is, without a question, an
executive act. Prior to the declaration of unconstitutionality of the
said executive act, certain acts or transactions were made in good
faith and in reliance of the appointment of Elma which cannot just be
set aside or invalidated by its subsequent invalidation.
In Tan v. Barrios, this Court, in applying the operative fact doctrine,
held that despite the invalidity of the jurisdiction of the military courts
over civilians, certain operative facts must be acknowledged to have
existed so as not to trample upon the rights of the accused therein.
Relevant thereto, in Olaguer v. Military Commission No. 34, it was
ruled that ‘military tribunals pertain to the Executive Department of
the Government and are simply instrumentalities of the executive
power, provided by the legislature for the President as Commander-
in-Chief to aid him in properly commanding the army and navy and
enforcing discipline therein, and utilized under his orders or those of
his authorized military representatives.’
Evidently, the operative fact doctrine is not confined to statutes and
rules and regulations issued by the executive department that are
accorded the same status as that of a statute or those which are
quasi-legislative in nature.
Even assuming that De Agbayani initially applied the operative fact
doctrine only to executive issuances like orders and rules and
regulations, said principle can nonetheless be applied, by analogy, to
decisions made by the President or the agencies under the executive
department. This doctrine, in the interest of justice and equity, can be
applied liberally and in a broad sense to encompass said decisions
of the executive branch. In keeping with the demands of equity, the
Court can apply the operative fact doctrine to acts and
consequences that resulted from the reliance not only on a law or
executive act which is quasi-legislative in nature but also on
decisions or orders of the executive branch which were later nullified.
This Court is not unmindful that such acts and consequences must
be recognized in the higher interest of justice, equity and fairness.
Significantly, a decision made by the President or the administrative
agencies has to be complied with because it has the force and effect
of law, springing from the powers of the President under the
Constitution and existing laws. Prior to the nullification or recall of
said decision, it may have produced acts and consequences in
conformity to and in reliance of said decision, which must be
respected. It is on this score that the operative fact doctrine should
be applied to acts and consequences that resulted from the
implementation of the PARC Resolution approving the SDP of HLI.
(Bold underscoring supplied for emphasis)
In Commissioner of Internal Revenue v. San Roque Power
Corporation,211 the Court likewise declared that "for the operative fact
doctrine to apply, there must be a ‘legislative or executive measure,’
meaning a law or executive issuance." Thus, the Court opined there
that the operative fact doctrine did not apply to a mere administrative
practice of the Bureau of Internal Revenue, viz:
Under Section 246, taxpayers may rely upon a rule or ruling issued
by the Commissioner from the time the rule or ruling is issued up to
its reversal by the Commissioner or this Court. The reversal is not
given retroactive effect. This, in essence, is the doctrine of operative
fact. There must, however, be a rule or ruling issued by the
Commissioner that is relied upon by the taxpayer in good faith. A
mere administrative practice, not formalized into a rule or ruling, will
not suffice because such a mere administrative practice may not be
uniformly and consistently applied. An administrative practice, if not
formalized as a rule or ruling, will not be known to the general public
and can be availed of only by those with informal contacts with the
government agency.
It is clear from the foregoing that the adoption and the
implementation of the DAP and its related issuances were executive
acts.1avvphi1 The DAP itself, as a policy, transcended a merely
administrative practice especially after the Executive, through the
DBM, implemented it by issuing various memoranda and circulars.
The pooling of savings pursuant to the DAP from the allotments
made available to the different agencies and departments was
consistently applied throughout the entire Executive. With the
Executive, through the DBM, being in charge of the third phase of the
budget cycle – the budget execution phase, the President could
legitimately adopt a policy like the DAP by virtue of his primary
responsibility as the Chief Executive of directing the national
economy towards growth and development. This is simply because
savings could and should be determined only during the budget
execution phase.
As already mentioned, the implementation of the DAP resulted into
the use of savings pooled by the Executive to finance the PAPs that
were not covered in the GAA, or that did not have proper
appropriation covers, as well as to augment items pertaining to other
departments of the Government in clear violation of the Constitution.
To declare the implementation of the DAP unconstitutional without
recognizing that its prior implementation constituted an operative fact
that produced consequences in the real as well as juristic worlds of
the Government and the Nation is to be impractical and unfair.
Unless the doctrine is held to apply, the Executive as the disburser
and the offices under it and elsewhere as the recipients could be
required to undo everything that they had implemented in good faith
under the DAP. That scenario would be enormously burdensome for
the Government. Equity alleviates such burden.
The other side of the coin is that it has been adequately shown as to
be beyond debate that the implementation of the DAP yielded
undeniably positive results that enhanced the economic welfare of
the country. To count the positive results may be impossible, but the
visible ones, like public infrastructure, could easily include roads,
bridges, homes for the homeless, hospitals, classrooms and the like.
Not to apply the doctrine of operative fact to the DAP could literally
cause the physical undoing of such worthy results by destruction,
and would result in most undesirable wastefulness.
Nonetheless, as Justice Brion has pointed out during the
deliberations, the doctrine of operative fact does not always apply,
and is not always the consequence of every declaration of
constitutional invalidity. It can be invoked only in situations where the
nullification of the effects of what used to be a valid law would result
in inequity and injustice;212but where no such result would ensue, the
general rule that an unconstitutional law is totally ineffective should
apply.
In that context, as Justice Brion has clarified, the doctrine of
operative fact can apply only to the PAPs that can no longer be
undone, and whose beneficiaries relied in good faith on the validity of
the DAP, but cannot apply to the authors, proponents and
implementors of the DAP, unless there are concrete findings of good
faith in their favor by the proper tribunals determining their criminal,
civil, administrative and other liabilities.
WHEREFORE, the Court PARTIALLY GRANTS the petitions for
certiorari and prohibition; and DECLARES the following acts and
practices under the Disbursement Acceleration Program, National
Budget Circular No. 541 and related executive issuances
UNCONSTITUTIONAL for being in violation of Section 25(5), Article
VI of the 1987 Constitution and the doctrine of separation of powers,
namely:
(a) The withdrawal of unobligated allotments from the
implementing agencies, and the declaration of the withdrawn
unobligated allotments and unreleased appropriations as
savings prior to the end of the fiscal year and without
complying with the statutory definition of savings contained
in the General Appropriations Acts;
 (b) The cross-border transfers of the savings of the
Nachura & Sarmiento for petitioner.
Executive to augment the appropriations of other offices
outside the Executive; and
The Solicitor General for public respondents.
(c) The funding of projects, activities and programs that were
not covered by any appropriation in the General
Appropriations Act.

The Court further DECLARES VOID the use of unprogrammed funds NARVASA, C.J.:
despite the absence of a certification by the National Treasurer that
the revenue collections exceeded the revenue targets for non-
compliance with the conditions provided in the relevant General The petitioner seeks the corrective,1 prohibitive and coercive
Appropriations Acts
remedies provided by Rule 65 of the Rules of Court,2 upon the
following posited grounds, viz.:3

1) the invalidity of the "TRUST ACCOUNT" in the books of

account of the Ministry of Energy (now, the Office of Energy Affairs),
created pursuant to § 8, paragraph 1, of P.D. No. 1956, as amended,
"said creation of a trust fund being contrary to Section 29 (3), Article
VI of the . . Constitution;4
G.R. No. 99886 March 31, 1993

2) the unconstitutionality of § 8, paragraph 1 (c) of P.D. No.

JOHN H. OSMEÑA, petitioner,
1956, as amended by Executive Order No. 137, for "being an undue
vs.
and invalid delegation of legislative power . . to the Energy
OSCAR ORBOS, in his capacity as Executive Secretary; JESUS
Regulatory Board;"5
ESTANISLAO, in his capacity as Secretary of Finance;
WENCESLAO DELA PAZ, in his capacity as Head of the Office of
3) the illegality of the reimbursements to oil companies, paid
Energy Affairs; REX V. TANTIONGCO, and the ENERGY
out of the Oil Price Stabilization Fund,6 because it contravenes § 8,
REGULATORY BOARD, respondents.
paragraph 2 (2) of
P. D. 1956, as amended; and
4) the consequent nullity of the Order dated December 10,
1990 and the necessity of a rollback of the pump prices and
petroleum products to the levels prevailing prior to the said Order.
It will be recalled that on October 10, 1984, President Ferdinand
Marcos issued P.D. 1956 creating a Special Account in the General
Fund, designated as the Oil Price Stabilization Fund (OPSF). The
OPSF was designed to reimburse oil companies for cost increases in
crude oil and imported petroleum products resulting from exchange
rate adjustments and from increases in the world market prices of
crude oil.
Subsequently, the OPSF was reclassified into a "trust liability
account," in virtue of E.O. 1024,7 and ordered released from the
National Treasury to the Ministry of Energy. The same Executive
Order also authorized the investment of the fund in government
securities, with the earnings from such placements accruing to the
fund.
President Corazon C. Aquino, amended P.D. 1956. She promulgated
Executive Order No. 137 on February 27, 1987, expanding the
grounds for reimbursement to oil companies for possible cost
underrecovery incurred as a result of the reduction of domestic
prices of petroleum products, the amount of the underrecovery being
left for determination by the Ministry of Finance.
Now, the petition alleges that the status of the OPSF as of March 31,
1991 showed a "Terminal Fund Balance deficit" of some P12.877
billion;8 that to abate the worsening deficit, "the Energy Regulatory
Board . . issued an Order on December 10, 1990, approving the
increase in pump prices of petroleum products," and at the rate of
recoupment, the OPSF deficit should have been fully covered in a
span of six (6) months, but this notwithstanding, the respondents —
Oscar Orbos, in his capacity as Executive Secretary; Jesus
Estanislao, in his capacity as Secretary of Finance; Wenceslao de la
Paz, in his capacity as Head of the Office of Energy Affairs;
Chairman Rex V. Tantiongco and the Energy Regulatory Board —
"are poised to accept, process and pay claims not authorized under
P.D. 1956."9
The petition further avers that the creation of the trust fund violates §
29(3), Article VI of the Constitution, reading as follows:
(3) All money collected on any tax levied for a special purpose
shall be treated as a special fund and paid out for such purposes
only. If the purpose for which a special fund was created has been
fulfilled or abandoned, the balance, if any, shall be transferred to the
general funds of the Government.
The petitioner argues that "the monies collected pursuant to . . P.D.
1956, as amended, must be treated as a 'SPECIAL FUND,' not as a
'trust account' or a 'trust fund,' and that "if a special tax is collected
for a specific purpose, the revenue generated therefrom shall 'be
treated as a special fund' to be used only for the purpose indicated,
and not channeled to another government objective." 10 Petitioner
further points out that since "a 'special fund' consists of monies
collected through the taxing power of a State, such amounts belong
to the State, although the use thereof is limited to the special
purpose/objective for which it was created." 11
He also contends that the "delegation of legislative authority" to the
ERB violates § 28 (2). Article VI of the Constitution, viz.:
(2) The Congress may, by law, authorize the President to fix,
within specified limits, and subject to such limitations and restrictions
as it may impose, tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts within the framework of
the national development program of the Government;
and, inasmuch as the delegation relates to the exercise of the power
of taxation, "the limits, limitations and restrictions must be
quantitative, that is, the law must not only specify how to tax, who
(shall) be taxed (and) what the tax is for, but also impose a specific
limit on how much to tax." 12
The petitioner does not suggest that a "trust account" is illegal per
se, but maintains that the monies collected, which form part of the
OPSF, should be maintained in a special account of the general fund
for the reason that the Constitution so provides, and because they
are, supposedly, taxes levied for a special purpose. He assumes that
the Fund is formed from a tax undoubtedly because a portion thereof
is taken from collections of ad valorem taxes and the increases
thereon.
It thus appears that the challenge posed by the petitioner is premised
primarily on the view that the powers granted to the ERB under P.D.
1956, as amended, partake of the nature of the taxation power of the
State. The Solicitor General observes that the "argument rests on the
assumption that the OPSF is a form of revenue measure drawing
from a special tax to be expended for a special purpose." 13 The
petitioner's perceptions are, in the Court's view, not quite correct.
To address this critical misgiving in the position of the petitioner on
these issues, the Court recalls its holding in Valmonte v. Energy
Regulatory Board, et al. 14 —
The foregoing arguments suggest the presence of misconceptions
about the nature and functions of the OPSF. The OPSF is a "Trust
Account" which was established "for the purpose of minimizing the
frequent price changes brought about by exchange rate adjustment
and/or changes in world market prices of crude oil and imported
petroleum products." 15 Under P.D. No. 1956, as amended by
Executive Order No. 137 dated 27 February 1987, this Trust Account
may be funded from any of the following sources:
a) Any increase in the tax collection from ad valorem tax or
customs duty imposed on petroleum products subject to tax under
this Decree arising from exchange rate adjustment, as may be
determined by the Minister of Finance in consultation with the Board
of Energy;
b) Any increase in the tax collection as a result of the lifting of
tax exemptions of government corporations, as may be determined
by the Minister of Finance in consultation with the Board of Energy:
c) Any additional amount to be imposed on petroleum products
to augment the resources of the Fund through an appropriate Order
that may be issued by the Board of Energy requiring payment of
persons or companies engaged in the business of importing,
manufacturing and/or marketing petroleum products;
d) Any resulting peso cost differentials in case the actual peso
costs paid by oil companies in the importation of crude oil and
petroleum products is less than the peso costs computed using the
reference foreign exchange rate as fixed by the Board of Energy.
xxx xxx xxx
The fact that the world market prices of oil, measured by the spot
market in Rotterdam, vary from day to day is of judicial notice.
Freight rates for hauling crude oil and petroleum products from
sources of supply to the Philippines may also vary from time to time.
The exchange rate of the peso vis-a-vis the U.S. dollar and other
convertible foreign currencies also changes from day to day. These
fluctuations in world market prices and in tanker rates and foreign
exchange rates would in a completely free market translate into
corresponding adjustments in domestic prices of oil and petroleum
products with sympathetic frequency. But domestic prices which vary
from day to day or even only from week to week would result in a
chaotic market with unpredictable effects upon the country's
economy in general. The OPSF was established precisely to protect
local consumers from the adverse consequences that such frequent
oil price adjustments may have upon the economy. Thus, the OPSF
serves as a pocket, as it were, into which a portion of the purchase
price of oil and petroleum products paid by consumers as well as
some tax revenues are inputted and from which amounts are drawn
from time to time to reimburse oil companies, when appropriate
situations arise, for increases in, as well as underrecovery of, costs
of crude importation. The OPSF is thus a buffer mechanism through
which the domestic consumer prices of oil and petroleum products
are stabilized, instead of fluctuating every so often, and oil
companies are allowed to recover those portions of their costs which
they would not otherwise recover given the level of domestic prices
existing at any given time. To the extent that some tax revenues are
also put into it, the OPSF is in effect a device through which the
domestic prices of petroleum products are subsidized in part. It
appears to the Court that the establishment and maintenance of the
OPSF is well within that pervasive and non-waivable power and
responsibility of the government to secure the physical and economic
survival and well-being of the community, that comprehensive
sovereign authority we designate as the police power of the State.
The stabilization, and subsidy of domestic prices of petroleum
products and fuel oil — clearly critical in importance considering,
among other things, the continuing high level of dependence of the
country on imported crude oil — are appropriately regarded as public
purposes.
Also of relevance is this Court's ruling in relation to the sugar
stabilization fund the nature of which is not far different from the
OPSF. In Gaston v. Republic Planters Bank, 16 this Court upheld the
legality of the sugar stabilization fees and explained their nature and
character, viz.:
The stabilization fees collected are in the nature of a tax, which is
within the power of the State to impose for the promotion of the sugar
industry (Lutz v. Araneta, 98 Phil. 148). . . . The tax collected is not in
a pure exercise of the taxing power. It is levied with a regulatory
purpose, to provide a means for the stabilization of the sugar
industry. The levy is primarily in the exercise of the police power of
the State (Lutz v. Araneta, supra).
xxx xxx xxx
The stabilization fees in question are levied by the State upon sugar
millers, planters and producers for a special purpose — that of
"financing the growth and development of the sugar industry and all
its components, stabilization of the domestic market including the
foreign market." The fact that the State has taken possession of
moneys pursuant to law is sufficient to constitute them state funds,
even though they are held for a special purpose (Lawrence v.
American Surety Co. 263 Mich. 586, 249 ALR 535, cited in 42 Am
Jur Sec. 2, p. 718). Having been levied for a special purpose, the
revenues collected are to be treated as a special fund, to be, in the
language of the statute, "administered in trust" for the purpose
intended. Once the purpose has been fulfilled or abandoned, the
balance if any, is to be transferred to the general funds of the
Government. That is the essence of the trust intended (SEE 1987
Constitution, Article VI, Sec. 29(3), lifted from the 1935 Constitution,
Article VI, Sec. 23(1). 17
The character of the Stabilization Fund as a special kind of fund is
emphasized by the fact that the funds are deposited in the Philippine
National Bank and not in the Philippine Treasury, moneys from which
may be paid out only in pursuance of an appropriation made by law
(1987) Constitution, Article VI, Sec. 29 (3), lifted from the 1935
Constitution, Article VI, Sec. 23(1). (Emphasis supplied).

Hence, it seems clear that while the funds collected may be referred
to as taxes, they are exacted in the exercise of the police power of
the State. Moreover, that the OPSF is a special fund is plain from the
special treatment given it by E.O. 137. It is segregated from the
general fund; and while it is placed in what the law refers to as a
"trust liability account," the fund nonetheless remains subject to the
scrutiny and review of the COA. The Court is satisfied that these
measures comply with the constitutional description of a "special
fund." Indeed, the practice is not without precedent.
With regard to the alleged undue delegation of legislative power, the
Court finds that the provision conferring the authority upon the ERB
to impose additional amounts on petroleum products provides a
sufficient standard by which the authority must be exercised. In
addition to the general policy of the law to protect the local consumer
by stabilizing and subsidizing domestic pump rates, § 8(c) of P.D.
1956 18 expressly authorizes the ERB to impose additional amounts
to augment the resources of the Fund.
What petitioner would wish is the fixing of some definite, quantitative
restriction, or "a specific limit on how much to tax." 19 The Court is
cited to this requirement by the petitioner on the premise that what is
involved here is the power of taxation; but as already discussed, this
is not the case. What is here involved is not so much the power of
taxation as police power. Although the provision authorizing the ERB
to impose additional amounts could be construed to refer to the
power of taxation, it cannot be overlooked that the overriding
consideration is to enable the delegate to act with expediency in
carrying out the objectives of the law which are embraced by the
police power of the State.
The interplay and constant fluctuation of the various factors involved
in the determination of the price of oil and petroleum products, and
the frequently shifting need to either augment or exhaust the Fund,
do not conveniently permit the setting of fixed or rigid parameters in
the law as proposed by the petitioner. To do so would render the
ERB unable to respond effectively so as to mitigate or avoid the
undesirable consequences of such fluidity. As such, the standard as
it is expressed, suffices to guide the delegate in the exercise of the
delegated power, taking account of the circumstances under which it
is to be exercised.
For a valid delegation of power, it is essential that the law delegating
the power must be (1) complete in itself, that is it must set forth the
policy to be executed by the delegate and (2) it must fix a standard
— limits of which
are sufficiently determinate or determinable — to which the delegate
must conform. 20
. . . As pointed out in Edu v. Ericta: "To avoid the taint of unlawful
delegation, there must be a standard, which implies at the very least
that the legislature itself determines matters of principle and lays
down fundamental policy. Otherwise, the charge of complete
abdication may be hard to repel. A standard thus defines legislative
policy, marks its limits, maps out its boundaries and specifies the
public agency to apply it. It indicates the circumstances under which
the legislative command is to be effected. It is the criterion by which
the legislative purpose may be carried out. Thereafter, the executive
or administrative office designated may in pursuance of the above
guidelines promulgate supplemental rules and regulations. The
standard may either be express or implied. If the former, the non-
delegation objection is easily met. The standard though does not
have to be spelled out specifically. It could be implied from the policy
and purpose of the act considered as a whole. 21
It would seem that from the above-quoted ruling, the petition for
prohibition should fail.
The standard, as the Court has already stated, may even be implied.
In that light, there can be no ground upon which to sustain the
petition, inasmuch as the challenged law sets forth a determinable
standard which guides the exercise of the power granted to the ERB.
By the same token, the proper exercise of the delegated power may
be tested with ease. It seems obvious that what the law intended was
to permit the additional imposts for as long as there exists a need to
protect the general public and the petroleum industry from the
adverse consequences of pump rate fluctuations. "Where the
standards set up for the guidance of an administrative officer and the
action taken are in fact recorded in the orders of such officer, so that
Congress, the courts and the public are assured that the orders in
the judgment of such officer conform to the legislative standard, there
is no failure in the performance of the legislative functions." 22
This Court thus finds no serious impediment to sustaining the validity
of the legislation; the express purpose for which the imposts are
permitted and the general objectives and purposes of the fund are
readily discernible, and they constitute a sufficient standard upon
which the delegation of power may be justified.
In relation to the third question — respecting the illegality of the
reimbursements to oil companies, paid out of the Oil Price
Stabilization Fund, because allegedly in contravention of § 8,
paragraph 2 (2) of P.D. 1956, amended 23 — the Court finds for the
petitioner.
The petition assails the payment of certain items or accounts in favor
of the petroleum companies (i.e., inventory losses, financing
charges, fuel oil sales to the National Power Corporation, etc.)
because not authorized by law. Petitioner contends that "these
claims are not embraced in the enumeration in § 8 of P.D. 1956 . .
since none of them was incurred 'as a result of the reduction of
domestic prices of petroleum products,'" 24 and since these items
are reimbursements for which the OPSF should not have responded,
the amount of the P12.877 billion deficit "should be reduced by
P5,277.2 million." 25 It is argued "that under the principle of ejusdem
generis . . . the term 'other factors' (as used in § 8 of P.D. 1956) . .
can only include such 'other factors' which necessarily result in the
reduction of domestic prices of petroleum products." 26
The Solicitor General, for his part, contends that "(t)o place said
(term) within the restrictive confines of the rule of ejusdem generis
would reduce (E.O. 137) to a meaningless provision."
This Court, in Caltex Philippines, Inc. v. The Honorable
Commissioner on Audit, et al., 27 passed upon the application of
ejusdem generis to paragraph 2 of § 8 of P.D. 1956, viz.:
The rule of ejusdem generis states that "[w]here words follow an
enumeration of persons or things, by words of a particular and
specific meaning, such general words are not to be construed in their
widest extent, but are held to be as applying only to persons or
things of the same kind or class as those specifically mentioned." 28
A reading of subparagraphs (i) and (ii) easily discloses that they do
not have a common characteristic. The first relates to price reduction
as directed by the Board of Energy while the second refers to
reduction in internal ad valorem taxes. Therefore, subparagraph (iii)
cannot be limited by the enumeration in these subparagraphs. What
should be considered for purposes of determining the "other factors"
in subparagraph (iii) is the first sentence of paragraph (2) of the
Section which explicitly allows the cost underrecovery only if such
were incurred as a result of the reduction of domestic prices of
petroleum products.
The Court thus holds, that the reimbursement of financing charges is
not authorized by paragraph 2 of § 8 of P.D. 1956, for the reason that
they were not incurred as a result of the reduction of domestic prices
of petroleum products. Under the same provision, however, the
payment of inventory losses is upheld as valid, being clearly a result
of domestic price reduction, when oil companies incur a cost
underrecovery for yet unsold stocks of oil in inventory acquired at a
higher price.
Reimbursement for cost underrecovery from the sales of oil to the
National Power Corporation is equally permissible, not as coming
within the provisions of P.D. 1956, but in virtue of other laws and
regulations as held in Caltex 29 and which have been pointed to by
the Solicitor General. At any rate, doubts about the propriety of such
reimbursements have been dispelled by the enactment of R.A. 6952,
establishing the Petroleum Price Standby Fund, § 2 of which
specifically authorizes the reimbursement of "cost underrecovery
incurred as a result of fuel oil sales to the National Power
Corporation."
Anent the overpayment refunds mentioned by the petitioner, no
substantive discussion has been presented to show how this is
prohibited by P.D. 1956. Nor has the Solicitor General taken any
effort to defend the propriety of this refund. In fine, neither of the
parties, beyond the mere mention of overpayment refunds, has at all
bothered to discuss the arguments for or against the legality of the
so-called overpayment refunds. To be sure, the absence of any
argument for or against the validity of the refund cannot result in its
disallowance by the Court. Unless the impropriety or illegality of the
overpayment refund has been clearly and specifically shown, there
can be no basis upon which to nullify the same.
Finally, the Court finds no necessity to rule on the remaining issue,
the same having been rendered moot and academic. As of date
hereof, the pump rates of gasoline have been reduced to levels
below even those prayed for in the petition.
WHEREFORE, the petition is GRANTED insofar as it prays for the
nullification of the reimbursement of financing charges, paid pursuant
to E.O. 137, and DISMISSED in all other respects.
SO ORDERED.
LUNG CENTER OF THE PHILIPPINES VS QUEZON CITY
Posted by kaye lee on 5:15 PM
G.R. No. 144104, June 29, 2004 [Constitutional Law - Article VI:
Legislative Department; Taxation ]
FACTS:
Petitioner is a non-stock, non-profit entity established by virtue of PD
No. 1823, seeks exemption from real property taxes when the City
Assessor issued Tax Declarations for the land and the hospital
building. Petitioner predicted on its claim that it is a charitable
institution. The request was denied, and a petition hereafter filed
before the Local Board of Assessment Appeals of Quezon City (QC-
LBAA) for reversal of the resolution of the City Assessor. Petitioner
alleged that as a charitable institution, is exempted from real property
taxes under Sec 28(3) Art VI of the Constitution. QC-LBAA dismissed
the petition and the decision was likewise affirmed on appeal by the
Central Board of Assessment Appeals of Quezon City. The Court of
Appeals affirmed the judgment of the CBAA.
ISSUE:
1. Whether or not petitioner is a charitable institution within the
context of PD 1823 and the 1973 and 1987 Constitution and Section
234(b) of RA 7160.
 property taxes while those leased to private entities are not exempt
2. Whether or not petitioner is exempted from real property taxes. from such taxes.

RULING:
1. Yes. The Court hold that the petitioner is a charitable institution
within the context of the 1973 and 1987 Constitution. Under PD
1823, the petitioner is a non-profit and non-stock corporation which,
subject to the provisions of the decree, is to be administered by the
Office of the President with the Ministry of Health and the Ministry of
Human Settlements. The purpose for which it was created was to
render medical services to the public in general including those who
are poor and also the rich, and become a subject of charity. Under
PD 1823, petitioner is entitled to receive donations, even if the gift or
donation is in the form of subsidies granted by the government.

2. Partly No. Under PD 1823, the lung center does not enjoy any
property tax exemption privileges for its real properties as well as the
building constructed thereon.
The property tax exemption under Sec. 28(3), Art. VI of the G.R. No. L-33713 July 30, 1975
Constitution of the property taxes only. This provision was implanted
by Sec.243 (b) of RA 7160.which provides that in order to be entitled EUSEBIO B. GARCIA, petitioner-appellant,
to the exemption, the lung center must be able to prove that: it is a vs.
charitable institution and; its real properties are actually, directly and HON. ERNESTO S. MATA, Secretary of National Defense, and
exclusively used for charitable purpose. Accordingly, the portions GENERAL MANUEL T. YAN, Chief of Staff, Armed Forces of the
occupied by the hospital used for its patients are exempt from real Philippines, respondents-appellees.
Emilio Purugganan for petitioner-appellant.
Office of the Solicitor General Estelito P. Mendoza, Assistant
Solicitor General Rosalio A. de Leon and Solicitor Eulogio Raquel-
Santos for respondents-appellees.
CASTRO, J.:
This is a petition for certiorari to review the decision of the Court of
First Instance of Quezon City, Branch IX, in civil case Q-13466,
entitled "Eusebio B. Garcia, petitioner, versus Hon. Ernesto Mata
(Juan Ponce Enrile), et al., respondents," declaring paragraph 11 of
the "Special Provisions for the Armed Forces of the Philippines" of
Republic Act No. 16001 unconstitutional and therefore invalid and
inoperative.
We affirm the judgment a quo.
The facts material to this case are embodied in the following
stipulation submitted jointly by both parties to the lower court:
Petitioner was a reserve officer on active duty with the Armed Forces
of the Philippines until his reversion to inactive status on 15
November 1960, pursuant to the provisions of Republic Act No.
2332. At the time of reversion, Petitioner held the rank of Captain
with a monthly emolument of P478.00, comprising his base and
longevity pay, quarters and subsistence allowances;
On June 18, 1955, the date when Republic Act No. 1382 took effect,
petitioner had a total of 9 years, 4 months and 12 days of
accumulated active commissioned service in the Armed Forces of
the Philippines;
On July 11, 1956, the date when Republic Act 1600 took effect,
petitioner had an accumulated active commissioned service of 10
years, 5 months and 5 days in the Armed Forces of the Philippines;
Petitioner's reversion to inactive status on 15 November 1960 was
pursuant to the provisions of Republic Act 2334, and such reversion
was neither for cause, at his own request, nor after court-martial
proceedings;
From 15 November 1960 up to the present, petitioner has been on
inactive status and as such, he has neither received any emoluments
from the Armed Forces of the Philippines, nor was he ever employed
in the Government in any capacity;
As a consequence of his reversion to inactive status, petitioner filed
the necessary petitions with the offices of the AFP Chief of Staff, the
Secretary of National Defense, and the President, respectively, but
received reply only from the Chief of Staff through the AFP Adjutant
General.
On September 17, 1969 the petitioner brought an action for
"Mandamus and Recovery of a Sum of Money" in the court a quo to
compel the respondents Secretary of National Defense and Chief of
Staff of the Armed Forces of the Philippines2 to reinstate him in the
active commissioned service of the Armed Forces of the Philippines,
to readjust his rank, and to pay all the emoluments and allowances
due to him from the time of his reversion to inactive status. On
December 2, 1970 the trial court dismissed the petition. The court
ruled that paragraph 11 of the "Special Provisions for the Armed
Forces of the Philippines" in Republic Act 1600 is "invalid,
unconstitutional and inoperative."
The petitioner had a total of 9 years, 4 months and 12 days of
accumulated active commissioned service in the AFP when Republic
Act 1382 took effect on June 18, 1955. Section I of this law provided:
Reserve officers with at least ten years of active accumulated
commissioned service who are still on active duty at the time of the
approval of this Act shall not be reverted into inactive status except
for cause after proper court-martial proceedings or upon their own
request: Provided, That for purposes of computing the length of
service, six months or more of active service shall be considered one
year. (emphasis supplied)
The petitioner's accumulated active commissioned service was thus
short of the minimum service requirement prescribed in the
aforequoted provision of R.A. 1382.
On July 11, 1956,3 while the petitioner was yet in the active service,
Republic Act 1600 was enacted into law. Paragraph 11 of the
SPECIAL PROVISIONS FOR THE ARMED FORCES OF THE
PHILIPPINES (on page 892 of the Act) provided as follows:
11. After the approval of this Act, and when there is no
emergency, no reserve officer of the Armed Forces of the Philippines
may be called to a tour of active duty for more than two years during
any period of five consecutive years: PROVIDED, That hereafter
reserve officers of the Armed Forces of the Philippines on active duty
for more than two years on the date of the approval of this Act except
those whose military and educational training, experience and
qualifications are deemed essential to the needs of the service, shall
be reverted to inactive status within one year from the approval of
this Act: PROVIDED, FURTHER, That reserve officers with at least
ten years of active accumulated commissioned service who are still
on active duty at the time of the approval of this Act shall not be
reverted to inactive status except for cause after proper court-martial
proceedings or upon their request; PROVIDED, FURTHER, That any
such reserve officer reverted to inactive status who has at least five
of active commissioned service shall be entitled to a gratuity
equivalent to one month's authorized base and longevity pay in the
rank held at the time of such reversion for every year of active
commissioned service; PROVIDED, FURTHER, That any reserve
officer who receives a gratuity under the provisions of this Act shall
not except during a National emergency or mobilization, be called to
a tour of active duty within five years from the date of reversion:
PROVIDED, FURTHER, That the Secretary of National Defense is
authorized to extend the tour of active duty of reserve officers who
are qualified military pilots and doctors; PROVIDED, FURTHER,
That any savings in the appropriations authorized in this Act for the
Department of National Defense notwithstanding any provision of this
Act to the contrary and any unexpended balance of certification to
accounts payable since 1 July 1949 regardless of purpose of the
appropriation shall be made available for the purpose of this
paragraph: AND PROVIDED, FINALLY, That the Secretary of
National Defense shall render a quarterly report to Congress as to
the implementation of the provisions of this paragraph. ( pp. 892-893,
RA 1600) (emphasis supplied)
The petitioner consequently argues that his reversion to inactive
status on November 15, 1960 was in violation of the abovequoted
provision which prohibits the reversion to inactive status of reserve
officers on active duty with at least ten years of accumulated active
commissioned service.
On the other hand, the respondents contend that the said provision
has no relevance or pertinence whatsoever to the budget in question
or to any appropriation item contained therein, and is therefore
proscribed by Art. VI, Sec. 19, par. 24 of the 1935 Constitution of the
Philippines, which reads:
No provision or enactment shall be embraced in the general
appropriation bill unless it relates specifically to some particular
appropriation therein; and any such provision or enactment shall be
limited in its operation to such appropriation.
A perusal of the challenged provision of R.A. 1600 fails to disclose its
relevance or relation to any appropriation item therein, or to the
Appropriation Act as a whole. From the very first clause of paragraph
11 itself, which reads,
After the approval of this Act, and when there is no emergency, no
reserve officer of the Armed Forces of the Philippines may be called
to a tour of active duty for more than two years during any period of
five consecutive years:
the incongruity and irrelevancy are already evident. While R.A. 1600
appropriated money for the operation of the Government for the
fiscal year 1956-1957, the said paragraph 11 refers to the
fundamental government policy matters of the calling to active duty
and the reversion to inactive status of reserve officers in the AFP.
The incongruity and irrelevancy continue throughout the entire
paragraph.
In the language of the respondents-appellees, "it was indeed a non-
appropriation item inserted in an appropriation measure in violation
of the constitutional inhibition against "riders" to the general
appropriation act." It was indeed a new and completely unrelated
provision attached to the Appropriation Act.
The paragraph in question also violated Art. VI, Sec. 21, par. 15 of
the 1935 Constitution of the Philippines which provided that "No bill
which may be enacted into law shall embrace more than one subject
which shall be expressed in the title of the bill." This constitutional
requirement nullified and rendered inoperative any provision
contained in the body of an act that was not fairly included in the
subject expressed in the title or was not germane to or properly
connected with that subject.
In determining whether a provision contained in an act is embraced
in the subject and is properly connected therewith, the subject to be
considered is the one expressed in the title of the act, and every fair
intendment and reasonable doubt should be indulged in favor of the
validity of the legislative enactment. But when an act contains
provisions which are clearly not embraced in the subject of the act,
as expressed in the title, such provisions are inoperative and without
effect.
We are mindful that the title of an act is not required to be an index to
the body of the act. Thus, in Sumulong vs. Comelec, 73 Phil. 288,
291, this Court held that it is "a sufficient compliance with such
requirement if the title expresses the general subject and all the
provisions of the statute are germane to that general subject." The
constitutional provision was intended to preclude the insertion of
riders in legislation, a rider being a provision not germane to the
subject-matter of the bill.6
The subject of R.A. 1600, as expressed in its title, is restricted to
"appropriating funds for the operation of the government." Any
provision contained in the body of the act that is fairly included in this
restricted subject or any matter properly connected therewith is valid
and operative. But, if a provision in the body of the act is not fairly
included in this restricted subject, like the provision relating to the
policy matters of calling to active duty and reversion to inactive duty
of reserve officers of the AFP, such provision is inoperative and of no
effect.
To quote the respondents-appellees on this point:
It is obvious that the statutory provision in question refers to security
of reserve officers from reversion to inactive status, whereas the
subject or title of the statute from which it derives its existence refers
to appropriations. Verily, it runs contrary to or is repugnant to the
above-quoted injunctive provision of the Constitution. Where a ACCORDINGLY, the instant petition is denied, and the decision of
conflict arises between a statute and the Constitution, the latter the lower court dismissing the complaint is hereby affirmed. No
prevails. It should be emphasized that a Constitution is superior to a pronouncement as to costs.
statute and is precisely called the "supreme law of the land" because
it is the fundamental or organic law which states the general Makalintal, C.J., Fernando, Makasiar, Esquerra, Muñoz Palma,
principles and builds the substantial foundation and general Aquino, Concepcion, Jr. and Martin, JJ., concur.
framework of law and government, and for that reason a statute
contrary to or in violation of the Constitution is null and void (Talabon Antonio, J., took no part.
vs. Iloilo Provincial Warden, 78 Phil. 599).1äwphï1.ñët If a law,
therefore, happens to infringe upon or violate the fundamental law, Teehankee, J., is on leave.
courts of justice may step in to nullify its effectiveness (Mabanag vs.
Lopez Vito, 78 Phil. 1).

Upon the foregoing dissertation, we declare Paragraph 11 of the

SPECIAL PROVISIONS FOR THE ARMED FORCES OF THE
PHILIPPINES as unconstitutional, invalid and inoperative. Being
unconstitutional, it confers no right and affords no protection. In legal
contemplation it is as though it has never been passed.7 Separate Opinions

Verily, not having shown a clear legal right to the position to which he
desires to be restored, the petitioner cannot compel the respondents
to reinstate and/or call him to active duty, promote or readjust his BARREDO, J., concurring:
rank, much less pay him back emoluments and allowances.
I cannot but concur in the able and scholarly opinion of Mr. Justice
Castro. There is indeed constant need to make it emphatically clear
that the Constitution proscribes the insertion of riders in the Budget,
the pernicious implications of which are too plain and well-known to
call for further elucidation. I am adding a few words here, only to
bolster, if I may, the conclusion that petitioner's pose would still be
unsustainable even if it could be assumed that the Special Provisions
invoked by him were constitutional.
According to the stipulation of facts submitted jointly by both parties
to the lower court, "(p)etitioner's reversion to inactive status on 15
November 1960 was pursuant to provisions of Republic Act 2334,
and such reversion was neither for cause, at his own request, nor
after court martial proceedings" and that "(o)n June 18, 1955, the
date when Republic Act 1382 took effect, petitioner had a total of
(only) 9 years, 4 months and 12 days of accumulated active
commission service in the Armed Forces of the Philippines." In other
words, indisputably petitioner is not in a position to invoke Republic
Act 1382 which provides as follows:
SECTION 1. Reserve Officers with at least ten years of active
accumulated commissioned service who are still on active duty at the
time of the approval of this Act shall not be reverted into inactive
status except for cause after proper court martial proceedings or
upon their own request: Provided, That for purposes of computing
the length of service, six months or more of active service shall be
considered one year.
for the simple reason that he lacked, as of the date of the approval of
this law, the 10-year accumulated active commissioned service
required thereby.
On June 19, 1959, Republic Act 2334 was enacted containing the
following pertinent provisions:
SEC. 2. After the approval of this Act, and except in time of
emergency, no reserve officer shall be called to extended tours of
active duty exceeding a total of two years within any period of five
consecutive years: Provided, That reserve officers on active duty for
more than two years on the date of approval of this Act, with the
exception of those covered by section three of this Act, shall be
reverted to inactive status within three years from the approval of this
Act: Provided, further, That hereafter calls to extended tours of active
duty of reserve officers shall be in proportion to the officers
requirement of each major service in the reserve force build-up
program of the Armed Forces of the Philippines and the priority for
selecting such reserve officers within each major service shall follow
the order of age groupings for the reserve force as defined in section
fifty-two of the National Defense Act, as amended.
SEC. 3. The provisions of section two of this Act shall not apply to
reserve officers covered by the provisions of Republic Act Numbered
Thirteen hundred eighty-two nor to those possessing technical
qualifications, skills, and competence which are indispensable to the
needs of the Armed Forces of the Philippines and for whom there are
no satisfactory replacements from among reserve officers in the
inactive status: Provided, That the selection of such officers shall be
as determined by a Board of Officers to be appointed by the Chief of
Staff.
Having the foregoing provisions in mind, it is clear to me that in
reverting petitioner to inactive status on November 15, 1960, the
Armed Forces authorities and original respondents herein, now
substituted respectively by the present incumbents, acted properly
and were merely complying with the injunction of Section 2 above
that "(r)eserve officers on active duty for more than two years on the
date of the approval of this Act, with the exception of those covered
by section three of this Act, shall be reverted to inactive status within
three years from the approval of this Act." As already stated, it is
definite that petitioner is not covered by the provisions of Republic
Act 1382 and there is no evidence here whatsoever that petitioner
comes within the other exception of the Act. We have not been
shown that, if he possesses the indispensable technical
qualifications, skills, etc. mentioned in Section 3, he has been
selected by the Board of Officers appointed by the Chief of Staff for
the purpose.
Now, under the Special Provision in question contained in the
National Budget for the fiscal year 1955-56 (Republic Act 1600),
reserve officers with at least ten years of active accumulated
commissioned service up to July 11, 1956, the date of its enactment,
and who were still on active duty on said date "shall not be reverted
to inactive status except for cause after proper court martial
proceedings or upon their request." Upon the other hand, as already
stated, under the subsequent law, Republic Act 2334, "(r)eserve
officers on active duty for more than two years on the date of the
approval of this Act" (June 19, 1959), with the exceptions already
noted which do not apply to petitioner, "shall be reverted to inactive
status within three years from the approval of this Act." To my mind,
there is irreconcilable repugnance between these two legal
provisions. The first prohibited reversion while the second ordains it
under practically identical circumstances. Accordingly, it is my
considered view that Republic Act 2334 has repealed the Special
Provision relied upon by petitioner, assuming its validity,
notwithstanding the absence of any specific repealing clause in this
later legislation. As I see it, the inconsistency between the two is so
clear and definite that one cannot stand together with the other. What
the first says should not be done (reversion), the later one enjoins
mandatorily to be accomplished.
As to the possible contention that petitioner had acquired a vested
right to a permanent status under the prior law, I believe it is plainly
within the power of the legislature to adjust the rights and status of
reserve officers of the Armed Forces. No member of the army has a
vested right in his employment, status or rank therein. One can easily
imagine the difficulties and complications, which can affect the
national security or the fiscal resources of the government, if the
legislature were deprived of the authority to adjust the tours of duty of
reserve officers according to the demands of the prevailing situation.
After all, from the very nature of things, every member of the reserve
force should be under constant notice that this status as such
member is subject to legislative control. Moreover, reversion cannot
be considered as depriving the, officer concerned totally of his
employment and benefits, for Section 4 of Republic Act 2334
provides in this connection as follows:
SEC. 4. Any reserve officer who is reverted to inactive duty under the
provisions of this Act after having completed an accumulated period
of active commissioned service of between five years and twenty
years shall, unless he is already entitled to the retirement benefits
under Republic Act Numbered Three hundred forty, as amended, be
entitled upon reversion to receive a gratuity equivalent to one
month's authorized base and longevity pay in the permanent rank
held at the time of such reversion multiplied by his years of active
commissioned service: Provided, That such reversion is not as a
result of court martial action or due to the officer's gross misconduct,
the intemparate use of drugs or alcoholics, or inefficiency: Provided,
however, That if a reserve officer is reemployed in a civilian office of
the government or government owned or controlled corporation, he
shall not be made to reimburse the amounts received by him as
gratuity under this Act: Provided, further, That if a reserve officer who
has received gratuity under this Act reenters the active service, he
shall not be eligible for a new gratuity until he has completed at least
five years of active commissioned service from the date of such
reentry, and no subsequent gratuity shall be paid covering any period
of active commissioned service for which he has already received
gratuity under this Act: Provided, further, That in case a reserve
officer who has received gratuity under this Act subsequently
reenters the active service and is retired pursuant to Republic Act
Numbered Three hundred forty, such gratuity shall be deducted from
his retirement gratuity or pensions: And provided, finally, That for
purposes of this section, any period of service amounting to six
months or more shall be counted as one year.
In conclusion, whether the Special Provision in question is
constitutional or not, petitioner cannot complain about his reversion
to inactive duty, considering the provisions of Republic Act 2334 by
virtue of which, according to the stipulation of facts, it was ordered by
respondents. Hence, the herein petition should be dismissed.
Separate Opinions
BARREDO, J., concurring:
I cannot but concur in the able and scholarly opinion of Mr. Justice
Castro. There is indeed constant need to make it emphatically clear
that the Constitution proscribes the insertion of riders in the Budget,
the pernicious implications of which are too plain and well-known to
call for further elucidation. I am adding a few words here, only to
bolster, if I may, the conclusion that petitioner's pose would still be
unsustainable even if it could be assumed that the Special Provisions
invoked by him were constitutional.
According to the stipulation of facts submitted jointly by both parties
to the lower court, "(p)etitioner's reversion to inactive status on 15
November 1960 was pursuant to provisions of Republic Act 2334,
and such reversion was neither for cause, at his own request, nor
after court martial proceedings" and that "(o)n June 18, 1955, the
date when Republic Act 1382 took effect, petitioner had a total of
(only) 9 years, 4 months and 12 days of accumulated active
commission service in the Armed Forces of the Philippines." In other
words, indisputably petitioner is not in a position to invoke Republic
Act 1382 which provides as follows:
SECTION 1. Reserve Officers with at least ten years of active
accumulated commissioned service who are still on active duty at the
time of the approval of this Act shall not be reverted into inactive
status except for cause after proper court martial proceedings or
upon their own request: Provided, That for purposes of computing
the length of service, six months or more of active service shall be
considered one year.
for the simple reason that he lacked, as of the date of the approval of
this law, the 10-year accumulated active commissioned service
required thereby.
On June 19, 1959, Republic Act 2334 was enacted containing the
following pertinent provisions:
SEC. 2. After the approval of this Act, and except in time of
emergency, no reserve officer shall be called to extended tours of
active duty exceeding a total of two years within any period of five
consecutive years: Provided, That reserve officers on active duty for
more than two years on the date of approval of this Act, with the
exception of those covered by section three of this Act, shall be
reverted to inactive status within three years from the approval of this
Act: Provided, further, That hereafter calls to extended tours of active
duty of reserve officers shall be in proportion to the officers
requirement of each major service in the reserve force build-up
program of the Armed Forces of the Philippines and the priority for
selecting such reserve officers within each major service shall follow
the order of age groupings for the reserve force as defined in section
fifty-two of the National Defense Act, as amended.
SEC. 3. The provisions of section two of this Act shall not apply to
reserve officers covered by the provisions of Republic Act Numbered
Thirteen hundred eighty-two nor to those possessing technical
qualifications, skills, and competence which are indispensable to the
needs of the Armed Forces of the Philippines and for whom there are
no satisfactory replacements from among reserve officers in the
inactive status: Provided, That the selection of such officers shall be
as determined by a Board of Officers to be appointed by the Chief of
Staff.
Having the foregoing provisions in mind, it is clear to me that in
reverting petitioner to inactive status on November 15, 1960, the
Armed Forces authorities and original respondents herein, now
substituted respectively by the present incumbents, acted properly
and were merely complying with the injunction of Section 2 above
that "(r)eserve officers on active duty for more than two years on the
date of the approval of this Act, with the exception of those covered
by section three of this Act, shall be reverted to inactive status within
three years from the approval of this Act." As already stated, it is
definite that petitioner is not covered by the provisions of Republic
Act 1382 and there is no evidence here whatsoever that petitioner
comes within the other exception of the Act. We have not been
shown that, if he possesses the indispensable technical
qualifications, skills, etc. mentioned in Section 3, he has been
selected by the Board of Officers appointed by the Chief of Staff for
the purpose.
Now, under the Special Provision in question contained in the
National Budget for the fiscal year 1955-56 (Republic Act 1600),
reserve officers with at least ten years of active accumulated
commissioned service up to July 11, 1956, the date of its enactment,
and who were still on active duty on said date "shall not be reverted
to inactive status except for cause after proper court martial
proceedings or upon their request." Upon the other hand, as already
stated, under the subsequent law, Republic Act 2334, "(r)eserve
officers on active duty for more than two years on the date of the
approval of this Act" (June 19, 1959), with the exceptions already
noted which do not apply to petitioner, "shall be reverted to inactive
status within three years from the approval of this Act." To my mind,
there is irreconcilable repugnance between these two legal
provisions. The first prohibited reversion while the second ordains it
under practically identical circumstances. Accordingly, it is my
considered view that Republic Act 2334 has repealed the Special
Provision relied upon by petitioner, assuming its validity,
notwithstanding the absence of any specific repealing clause in this
later legislation. As I see it, the inconsistency between the two is so
clear and definite that one cannot stand together with the other. What
the first says should not be done (reversion), the later one enjoins
mandatorily to be accomplished.
As to the possible contention that petitioner had acquired a vested
right to a permanent status under the prior law, I believe it is plainly
within the power of the legislature to adjust the rights and status of
reserve officers of the Armed Forces. No member of the army has a
vested right in his employment, status or rank therein. One can easily
imagine the difficulties and complications, which can affect the
national security or the fiscal resources of the government, if the
legislature were deprived of the authority to adjust the tours of duty of
reserve officers according to the demands of the prevailing situation.
After all, from the very nature of things, every member of the reserve
force should be under constant notice that this status as such
member is subject to legislative control. Moreover, reversion cannot
be considered as depriving the, officer concerned totally of his
employment and benefits, for Section 4 of Republic Act 2334
provides in this connection as follows:
SEC. 4. Any reserve officer who is reverted to inactive duty under the
provisions of this Act after having completed an accumulated period
of active commissioned service of between five years and twenty
years shall, unless he is already entitled to the retirement benefits
under Republic Act Numbered Three hundred forty, as amended, be
entitled upon reversion to receive a gratuity equivalent to one
month's authorized base and longevity pay in the permanent rank
held at the time of such reversion multiplied by his years of active
commissioned service: Provided, That such reversion is not as a
result of court martial action or due to the officer's gross misconduct,
the intemparate use of drugs or alcoholics, or inefficiency: Provided,
however, That if a reserve officer is reemployed in a civilian office of
the government or government owned or controlled corporation, he
shall not be made to reimburse the amounts received by him as
gratuity under this Act: Provided, further, That if a reserve officer who
has received gratuity under this Act reenters the active service, he
shall not be eligible for a new gratuity until he has completed at least
five years of active commissioned service from the date of such
reentry, and no subsequent gratuity shall be paid covering any period
of active commissioned service for which he has already received
gratuity under this Act: Provided, further, That in case a reserve
officer who has received gratuity under this Act subsequently
reenters the active service and is retired pursuant to Republic Act
Numbered Three hundred forty, such gratuity shall be deducted from
his retirement gratuity or pensions: And provided, finally, That for
purposes of this section, any period of service amounting to six
months or more shall be counted as one year.
In conclusion, whether the Special Provision in question is
constitutional or not, petitioner cannot complain about his reversion
to inactive duty, considering the provisions of Republic Act 2334 by
virtue of which, according to the stipulation of facts, it was ordered by
respondents. Hence, the herein petition should be dismissed.
Footnotes
 THE MEMBERS OF THE PROCESS SERVING UNIT AT THE
REGIONAL TRIAL COURT OF MANILA, respondents.

G.R. No. 83979 November 14, 1988.

LUIS D. BELTRAN, petitioner,

G.R. No. 82585 November 14, 1988
MAXIMO V. SOLIVEN, ANTONIO V. ROCES, FREDERICK K.
AGCAOLI, and GODOFREDO L. MANZANAS, petitioners,
vs.
THE HON. RAMON P. MAKASIAR, Presiding Judge of the Regional
Trial Court of Manila, Branch 35, UNDERSECRETARY SILVESTRE
BELLO III, of the Department of Justice, LUIS C. VICTOR, THE CITY
FISCAL OF MANILA and PRESIDENT CORAZON C. AQUINO,
respondents.
G.R. No. 82827 November 14, 1988
vs.
EXECUTIVE SECRETARY CATALINO MACARAIG, SECRETARY
OF JUSTICE SEDFREY ORDOÑEZ, UNDERSECRETARY OF
JUSTICE SILVESTRE BELLO III, THE CITY FISCAL OF MANILA
JESUS F. GUERRERO, and JUDGE RAMON P. MAKASIAR,
Presiding Judge of Branch 35 of the Regional Trial Court, at Manila,
respondents.
Angara, Abello, Concepcion, Regala and Cruz for petitioners in G.R.
No. 82585.
Perfecto V. Fernandez, Jose P. Fernandez and Cristobal P.
Fernandez for petitioner in G.R. Nos. 82827 and 83979.

LUIS D. BELTRAN, petitioner, RESOLUTION

vs.
THE HON. RAMON P. MAKASIAR, Presiding Judge of Branch 35 of
the Regional Trial Court, at Manila, THE HON. LUIS VICTOR, CITY
FISCAL OF MANILA, PEOPLE OF THE PHILIPPINES, PER CURIAM:
SUPERINTENDENT OF THE WESTERN POLICE DISTRICT, and
In these consolidated cases, three principal issues were raised: (1)
whether or not petitioners were denied due process when
informations for libel were filed against them although the finding of
the existence of a prima facie case was still under review by the
Secretary of Justice and, subsequently, by the President; (2) whether
or not the constitutional rights of Beltran were violated when
respondent RTC judge issued a warrant for his arrest without
personally examining the complainant and the witnesses, if any, to
determine probable cause; and (3) whether or not the President of
the Philippines, under the Constitution, may initiate criminal
proceedings against the petitioners through the filing of a complaint-
affidavit.
Subsequent events have rendered the first issue moot and
academic. On March 30, 1988, the Secretary of Justice denied
petitioners' motion for reconsideration and upheld the resolution of
the Undersecretary of Justice sustaining the City Fiscal's finding of a
prima facie case against petitioners. A second motion for
reconsideration filed by petitioner Beltran was denied by the
Secretary of Justice on April 7, 1988. On appeal, the President,
through the Executive Secretary, affirmed the resolution of the
Secretary of Justice on May 2, 1988. The motion for reconsideration
was denied by the Executive Secretary on May 16, 1988. With these
developments, petitioners' contention that they have been denied the
administrative remedies available under the law has lost factual
support.
It may also be added that with respect to petitioner Beltran, the
allegation of denial of due process of law in the preliminary
investigation is negated by the fact that instead of submitting his
counter- affidavits, he filed a "Motion to Declare Proceedings
Closed," in effect waiving his right to refute the complaint by filing
counter-affidavits. Due process of law does not require that the
respondent in a criminal case actually file his counter-affidavits
before the preliminary investigation is deemed completed. All that is
required is that the respondent be given the opportunity to submit
counter-affidavits if he is so minded.
The second issue, raised by petitioner Beltran, calls for an
interpretation of the constitutional provision on the issuance of
warrants of arrest. The pertinent provision reads:
Art. III, Sec. 2. The right of the people to be secure in their persons,
houses, papers and effects against unreasonable searches and
seizures of whatever nature and for any purpose shall be inviolable,
and no search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after
examination nder oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the place to
be searched and the persons or things to be seized.
The addition of the word "personally" after the word "determined" and
the deletion of the grant of authority by the 1973 Constitution to issue
warrants to "other responsible officers as may be authorized by law,"
has apparently convinced petitioner Beltran that the Constitution now
requires the judge to personally examine the complainant and his
witnesses in his determination of probable cause for the issuance of
warrants of arrest. This is not an accurate interpretation.
What the Constitution underscores is the exclusive and personal
responsibility of the issuing judge to satisfy himself of the existence
of probable cause. In satisfying himself of the existence of probable
cause for the issuance of a warrant of arrest, the judge is not
required to personally examine the complainant and his witnesses.
Following established doctrine and procedure, he shall: (1)
personally evaluate the report and the supporting documents
submitted by the fiscal regarding the existence of probable cause
and, on the basis thereof, issue a warrant of arrest; or (2) if on the
basis thereof he finds no probable cause, he may disregard the
fiscal's report and require the submission of supporting affidavits of
witnesses to aid him in arriving at a conclusion as to the existence of
probable cause.
Sound policy dictates this procedure, otherwise judges would be
unduly laden with the preliminary examination and investigation of
criminal complaints instead of concentrating on hearing and deciding
cases filed before their courts.
On June 30, 1987, the Supreme Court unanimously adopted Circular
No. 12, setting down guidelines for the issuance of warrants of
arrest. The procedure therein provided is reiterated and clarified in
this resolution.
It has not been shown that respondent judge has deviated from the
prescribed procedure. Thus, with regard to the issuance of the
warrants of arrest, a finding of grave abuse of discretion amounting
to lack or excess of jurisdiction cannot be sustained.
Anent the third issue, petitioner Beltran argues that "the reasons
which necessitate presidential immunity from suit impose a
correlative disability to file suit." He contends that if criminal
proceedings ensue by virtue of the President's filing of her complaint-
affidavit, she may subsequently have to be a witness for the
prosecution, bringing her under the trial court's jurisdiction. This,
continues Beltran, would in an indirect way defeat her privilege of
immunity from suit, as by testifying on the witness stand, she would
be exposing herself to possible contempt of court or perjury.
The rationale for the grant to the President of the privilege of
immunity from suit is to assure the exercise of Presidential duties
and functions free from any hindrance or distraction, considering that
being the Chief Executive of the Government is a job that, aside from
requiring all of the office holder's time, also demands undivided
attention.
But this privilege of immunity from suit, pertains to the President by
virtue of the office and may be invoked only by the holder of the
office; not by any other person in the President's behalf. Thus, an
accused in a criminal case in which the President is complainant
cannot raise the presidential privilege as a defense to prevent the
case from proceeding against such accused.
Moreover, there is nothing in our laws that would prevent the
President from waiving the privilege. Thus, if so minded the
President may shed the protection afforded by the privilege and
submit to the court's jurisdiction. The choice of whether to exercise
the privilege or to waive it is solely the President's prerogative. It is a
decision that cannot be assumed and imposed by any other person.
The petitions fail to establish that public respondents, through their
separate acts, gravely abused their discretion as to amount to lack of
jurisdiction. Hence, the writs of certiorari and prohibition prayed for
cannot issue.
WHEREFORE, finding no grave abuse of discretion amounting to
excess or lack of jurisdiction on the part of the public respondents,
the Court Resolved to DISMISS the petitions in G. R. Nos. 82585,
82827 and 83979. The Order to maintain the status quo contained in
the Resolution of the Court en banc dated April 7, 1988 and
reiterated in the Resolution dated April 26, 1988 is LIFTED.

As regards the contention of petitioner Beltran that he could not be

held liable for libel because of the privileged character or the
publication, the Court reiterates that it is not a trier of facts and that
such a defense is best left to the trial court to appreciate after
receiving the evidence of the parties.

As to petitioner Beltran's claim that to allow the libel case to proceed

would produce a "chilling effect" on press freedom, the Court finds no
basis at this stage to rule on the point.

Myers v. United States Case Brief
Statement of the Facts:
An 1876 federal law prohibited a first-, second-, or third-class
postmaster from being removed from office without approval by the
Senate. Specifically, the statute states that “Postmasters of the first,
second, and third classes shall be appointed and may be removed
by the President with the advice and consent of the Senate.”
President Woodrow Wilson removed first-class postmaster Myers
without Senate approval. Myers sought backpay, claiming that the
President’s action was in violation of the law.
Procedural History:
The Court of Claims dismissed Myers’ suit as out of time.
The U.S. Supreme Court agreed to hear the appeal.
Issue and Holding:
Does the President have the exclusive authority to remove executive
branch officials without the approval of the Senate? Yes.
Judgment:
The decision of the Court of Claims is affirmed.
Rule of Law or Legal Principle Applied:
The President has the exclusive power to remove executive branch
officers without Senate approval.
Reasoning:
The Constitution expressly states that the President shall appoint
executive branch officers with the advice and consent of the Senate.
The Constitution, however, is silent as to the removal executive
branch officers.
A review of the Constitutional Convention notes reveals that the
Constitution’s silence on removal was intentional. Those at the
Convention deemed it implicit in the Constitution that the President
had the exclusive authority to remove executive branch officers.
Further, allowing the President that exclusive authority is consistent
with the Constitution’s instruction that the President is responsible
that the laws are “faithfully executed.”

Therefore, the 1876 law requiring Senate approval for the removal of
Myers was unconstitutional. Myers’ case was properly dismissed.
Concurring and Dissenting Opinions:
Dissenting Opinion (Holmes):
The Postmaster is a creation of Congress, and Congress should
have a say in how postmasters are appointed and removed.
Dissenting Opinion (McReynolds):
Quotes from the Constitutional Convention also support the notion
that Senate approval is required before a President may remove an
executive branch official. Further, it would be unworkable to allow
the President to remove all executive branch officers on a whim.
Dissenting Opinion (Brandeis):
Marbury v. Madison stands for the proposition that the President
does not have the sole power to remove an inferior civil officer. This
case overrules that fundamental decision.
Significance:
Myers v. United States is a fascinating review of the President’s
powers under the Constitution and the legislative history of the
Constitution itself.
G.R. No. 104732 June 22, 1993
ROBERTO A. FLORES, DANIEL Y. FIGUEROA, ROGELIO T.
PALO, DOMINGO A. JADLOC, CARLITO T. CRUZ and MANUEL P.
REYES, petitioner,
vs.
HON. FRANKLIN M. DRILON, Executive Secretary, and RICHARD
J. GORDON, respondents.
Isagani M. Jungco, Valeriano S. Peralta, Miguel Famularcano, Jr.
and Virgilio E. Acierto for petitioners.
BELLOSILLO, J.:
The constitutionality of Sec. 13, par. (d), of R.A. 7227,1 otherwise
known as the "Bases Conversion and Development Act of 1992,"
under which respondent Mayor Richard J. Gordon of Olongapo City
was appointed Chairman and Chief Executive Officer of the Subic
Bay Metropolitan Authority (SBMA), is challenged in this original
petition with prayer for prohibition, preliminary injunction and
temporary restraining order "to prevent useless and unnecessary
expenditures of public funds by way of salaries and other operational
expenses attached to the office . . . ."2 Paragraph (d) reads —
(d) Chairman administrator — The President shall appoint a
professional manager as administrator of the Subic Authority with a
compensation to be determined by the Board subject to the approval
of the Secretary of Budget, who shall be the ex oficio chairman of the
Board and who shall serve as the chief executive officer of the Subic
Authority: Provided, however, That for the first year of its operations
from the effectivity of this Act, the mayor of the City of Olongapo shall
be appointed as the chairman and chief executive officer of the Subic
Authority (emphasis supplied).
Petitioners, who claim to be taxpayers, employees of the U.S. Facility
at the Subic, Zambales, and officers and members of the Filipino
Civilian Employees Association in U.S. Facilities in the Philippines,
maintain that the proviso in par. (d) of Sec. 13 herein-above quoted
in italics infringes on the following constitutional and statutory
provisions: (a) Sec. 7, first par., Art. IX-B, of the Constitution, which
states that "[n]o elective official shall be eligible for appointment or
designation in any capacity to any public officer or position during his
tenure,"3 because the City Mayor of Olongapo City is an elective
official and the subject posts are public offices; (b) Sec. 16, Art. VII,
of the Constitution, which provides that "[t]he President shall . . . .
appoint all other officers of the Government whose appointments are
not otherwise provided for by law, and those whom he may be
authorized by law to appoint",4 since it was Congress through the
questioned proviso and not the President who appointed the Mayor
to the subject posts;5 and, (c) Sec. 261, par. (g), of the Omnibus
Election Code, which says:
Sec. 261. Prohibited Acts. — The following shall be guilty of an
election offense: . . . (g) Appointment of new employees, creation of
new position, promotion, or giving salary increases. — During the
period of forty-five days before a regular election and thirty days
before a special election, (1) any head, official or appointing officer of
a government office, agency or instrumentality, whether national or
local, including government-owned or controlled corporations, who
appoints or hires any new employee, whether provisional, temporary
or casual, or creates and fills any new position, except upon prior
authority of the Commission. The Commission shall not grant the
authority sought unless it is satisfied that the position to be filled is
essential to the proper functioning of the office or agency concerned,
and that the position shall not be filled in a manner that may
influence the election. As an exception to the foregoing provisions, a
new employee may be appointed in case of urgent need: Provided,
however, That notice of the appointment shall be given to the
Commission within three days from the date of the appointment. Any
appointment or hiring in violation of this provision shall be null and
void. (2) Any government official who promotes, or gives any
increase of salary or remuneration or privilege to any government
official or employee, including those in government-owned or
controlled corporations . . . .
for the reason that the appointment of respondent Gordon to the
subject posts made by respondent Executive Secretary on 3 April
1992 was within the prohibited 45-day period prior to the 11 May
1992 Elections.
The principal question is whether the proviso in Sec. 13, par. (d), of
R.A. 7227 which states, "Provided, however, That for the first year of
its operations from the effectivity of this Act, the mayor of the City of
Olongapo shall be appointed as the chairman and chief executive
officer of the Subic Authority," violates the constitutional proscription
against appointment or designation of elective officials to other
government posts.
In full, Sec. 7 of Art. IX-B of the Constitution provides:
No elective official shall be eligible for appointment or designation in
any capacity to any public office or position during his tenure.
Unless otherwise allowed by law or by the primary functions of his
position, no appointive official shall hold any other office or
employment in the Government or any subdivision, agency or
instrumentality thereof, including government-owned or controlled
corporations or their subsidiaries.
The section expresses the policy against the concentration of several
public positions in one person, so that a public officer or employee
may serve full-time with dedication and thus be efficient in the
delivery of public services. It is an affirmation that a public office is a
full-time job. Hence, a public officer or employee, like the head of an
executive department described in Civil Liberties Union v. Executive
Secretary, G.R. No. 83896, and Anti-Graft League of the Philippines,
Inc. v. Philip Ella C. Juico, as Secretary of Agrarian Reform, G.R. No.
83815,6 ". . . . should be allowed to attend to his duties and
responsibilities without the distraction of other governmental duties or
employment. He should be precluded from dissipating his efforts,
attention and energy among too many positions of responsibility,
which may result in haphazardness and inefficiency . . . ."
Particularly as regards the first paragraph of Sec. 7, "(t)he basic idea
really is to prevent a situation where a local elective official will work
for his appointment in an executive position in government, and thus
neglect his constituents . . . ."7
In the case before us, the subject proviso directs the President to
appoint an elective official, i.e., the Mayor of Olongapo City, to other
government posts (as Chairman of the Board and Chief Executive
Officer of SBMA). Since this is precisely what the constitutional
proscription seeks to prevent, it needs no stretching of the
imagination to conclude that the proviso contravenes Sec. 7, first
par., Art. IX-B, of the Constitution. Here, the fact that the expertise of
an elective official may be most beneficial to the higher interest of the
body politic is of no moment.
It is argued that Sec. 94 of the Local Government Code (LGC)
permits the appointment of a local elective official to another post if
so allowed by law or by the primary functions of his office.8 But, the
contention is fallacious. Section 94 of the LGC is not determinative of
the constitutionality of Sec. 13, par. (d), of R.A. 7227, for no
legislative act can prevail over the fundamental law of the land.
Moreover, since the constitutionality of Sec. 94 of LGC is not the
issue here nor is that section sought to be declared unconstitutional,
we need not rule on its validity. Neither can we invoke a practice
otherwise unconstitutional as authority for its validity.
In any case, the view that an elective official may be appointed to
another post if allowed by law or by the primary functions of his
office, ignores the clear-cut difference in the wording of the two (2)
paragraphs of Sec. 7, Art.
IX-B, of the Constitution. While the second paragraph authorizes
holding of multiple offices by an appointive official when allowed by
law or by the primary functions of his position, the first paragraph
appears to be more stringent by not providing any exception to the
rule against appointment or designation of an elective official to the
government post, except as are particularly recognized in the
Constitution itself, e.g., the President as head of the economic and
planning agency;9 the Vice-President, who may be appointed
Member of the Cabinet; 10 and, a member of Congress who may be
designated ex officio member of the Judicial and Bar Council. 11
The distinction between the first and second paragraphs of Sec. 7,
Art. IX-B, was not accidental when drawn, and not without reason. It
was purposely sought by the drafters of the Constitution as shown in
their deliberation, thus —
MR. MONSOD. In other words, what then Commissioner is saying,
Mr. Presiding Officer, is that the prohibition is more strict with respect
to elective officials, because in the case of appointive officials, there
may be a law that will allow them to hold other positions.
MR. FOZ. Yes, I suggest we make that difference, because in the
case of appointive officials, there will be certain situations where the
law should allow them to hold some other positions. 12
The distinction being clear, the exemption allowed to appointive
officials in the second paragraph cannot be extended to elective
officials who are governed by the first paragraph.
It is further argued that the SBMA posts are merely ex officio to the
position of Mayor of Olongapo City, hence, an excepted
circumstance, citing Civil Liberties Union v. Executive Secretary, 13
where we stated that the prohibition against the holding of any other
office or employment by the President, Vice-President, Members of
the Cabinet, and their deputies or assistants during their tenure, as
provided in Sec. 13, Art. VII, of the Constitution, does not
comprehend additional duties and functions required by the primary
functions of the officials concerned, who are to perform them in an ex
officio capacity as provided by law, without receiving any additional
compensation therefor.
This argument is apparently based on a wrong premise. Congress
did not contemplate making the subject SBMA posts as ex officio or
automatically attached to the Office of the Mayor of Olongapo City
without need of appointment. The phrase "shall be appointed"
unquestionably shows the intent to make the SBMA posts appointive
and not merely adjunct to the post of Mayor of Olongapo City. Had it
been the legislative intent to make the subject positions ex officio,
Congress would have, at least, avoided the word "appointed" and,
instead, "ex officio" would have been used. 14
Even in the Senate deliberations, the Senators were fully aware that
subject proviso may contravene Sec. 7, first par., Art. IX-B, but they
nevertheless passed the bill and decided to have the controversy
resolved by the courts. Indeed, the Senators would not have been
concerned with the effects of Sec. 7, first par., had they considered
the SBMA posts as ex officio.
Cognizant of the complication that may arise from the way the
subject proviso was stated, Senator Rene Saguisag remarked that "if
the Conference Committee just said "the Mayor shall be the
Chairman" then that should foreclose the issue. It is a legislative
choice." 15 The Senator took a view that the constitutional
proscription against appointment of elective officials may have been
sidestepped if Congress attached the SBMA posts to the Mayor of
Olongapo City instead of directing the President to appoint him to the
post. Without passing upon this view of Senator Saguisag, it suffices
to state that Congress intended the posts to be appointive, thus
nibbling in the bud the argument that they are ex officio.
The analogy with the position of Chairman of the Metro Manila
Authority made by respondents cannot be applied to uphold the
constitutionality of the challenged proviso since it is not put in issue
in the present case. In the same vein, the argument that if no elective
official may be appointed or designated to another post then Sec. 8,
Art. IX-B, of the Constitution allowing him to receive double
compensation 16 would be useless, is non sequitur since Sec. 8
does not affect the constitutionality of the subject proviso. In any
case, the Vice-President for example, an elective official who may be
appointed to a cabinet post under Sec. 3, Art. VII, may receive the
compensation attached to the cabinet position if specifically
authorized by law.
Petitioners also assail the legislative encroachment on the appointing
authority of the President. Section 13, par. (d), itself vests in the
President the power to appoint the Chairman of the Board and the
Chief Executive Officer of SBMA, although he really has no choice
under the law but to appoint the Mayor of Olongapo City.
As may be defined, an "appointment" is "[t]he designation of a
person, by the person or persons having authority therefor, to
discharge the duties of some office or trust," 17 or "[t]he selection or
designation of a person, by the person or persons having authority
therefor, to fill an office or public function and discharge the duties of
the same. 18 In his treatise, Philippine Political
Law, 19 Senior Associate Justice Isagani A. Cruz defines
appointment as "the selection, by the authority vested with the
power, of an individual who is to exercise the functions of a given
office."
Considering that appointment calls for a selection, the appointing
power necessarily exercises a discretion. According to Woodbury, J.,
20 "the choice of a person to fill an office constitutes the essence of
his appointment," 21 and Mr. Justice Malcolm adds that an
"[a]ppointment to office is intrinsically an executive act involving the
exercise of discretion." 22 In Pamantasan ng Lungsod ng Maynila v.
Intermediate Appellate Court 23 we held:
The power to appoint is, in essence, discretionary. The appointing
power has the right of choice which he may exercise freely according
to his judgment, deciding for himself who is best qualified among
those who have the necessary qualifications and eligibilities. It is a
prerogative of the appointing power . . . .
Indeed, the power of choice is the heart of the power to appoint.
Appointment involves an exercise of discretion of whom to appoint; it
is not a ministerial act of issuing appointment papers to the
appointee. In other words, the choice of the appointee is a
fundamental component of the appointing power.
Hence, when Congress clothes the President with the power to
appoint an officer, it (Congress) cannot at the same time limit the
choice of the President to only one candidate. Once the power of
appointment is conferred on the President, such conferment
necessarily carries the discretion of whom to appoint. Even on the
pretext of prescribing the qualifications of the officer, Congress may
not abuse such power as to divest the appointing authority, directly
or indirectly, of his discretion to pick his own choice. Consequently,
when the qualifications prescribed by Congress can only be met by
one individual, such enactment effectively eliminates the discretion of
the appointing power to choose and constitutes an irregular
restriction on the power of appointment. 24
In the case at bar, while Congress willed that the subject posts be
filled with a presidential appointee for the first year of its operations
from the effectivity of R.A. 7227, the proviso nevertheless limits the
appointing authority to only one eligible, i.e., the incumbent Mayor of
Olongapo City. Since only one can qualify for the posts in question,
the President is precluded from exercising his discretion to choose
whom to appoint. Such supposed power of appointment, sans the
essential element of choice, is no power at all and goes against the
very nature itself of appointment.
While it may be viewed that the proviso merely sets the qualifications
of the officer during the first year of operations of SBMA, i.e., he must
be the Mayor of Olongapo City, it is manifestly an abuse of
congressional authority to prescribe qualifications where only one,
and no other, can qualify. Accordingly, while the conferment of the
appointing power on the President is a perfectly valid legislative act,
the proviso limiting his choice to one is certainly an encroachment on
his prerogative.
Since the ineligibility of an elective official for appointment remains all
throughout his tenure or during his incumbency, he may however
resign first from his elective post to cast off the constitutionally-
attached disqualification before he may be considered fit for
appointment. The deliberation in the Constitutional Commission is
enlightening:
MR. DAVIDE. On Section 4, page 3, line 8, I propose the substitution
of the word "term" with TENURE.
MR. FOZ. The effect of the proposed amendment is to make
possible for one to resign from his position.
MR. DAVIDE. Yes, we should allow that prerogative.
MR. FOZ. Resign from his position to accept an executive position.
MR. DAVIDE. Besides, it may turn out in a given case that because
of, say, incapacity, he may leave the service, but if he is prohibited
from being appointed within the term for which he was elected, we
may be depriving the government of the needed expertise of an
individual. 25
Consequently, as long as he is an incumbent, an elective official
remains ineligible for appointment to another public office.
Where, as in the case of respondent Gordon, an incumbent elective
official was, notwithstanding his ineligibility, appointed to other
government posts, he does not automatically forfeit his elective office
nor remove his ineligibility imposed by the Constitution. On the
contrary, since an incumbent elective official is not eligible to the
appointive position, his appointment or designation thereto cannot be
valid in view of his disqualification or lack of eligibility. This provision
should not be confused with Sec. 13, Art. VI, of the Constitution
where "(n)o Senator or Member of the House of Representatives
may hold any other office or employment in the Government . . .
during his term without forfeiting his seat . . . ." The difference
between the two provisions is significant in the sense that incumbent
national legislators lose their elective posts only after they have been
appointed to another government office, while other incumbent
elective officials must first resign their posts before they can be
appointed, thus running the risk of losing the elective post as well as
not being appointed to the other post. It is therefore clear that
ineligibility is not directly related with forfeiture of office. ". . . . The
effect is quite different where it is expressly provided by law that a
person holding one office shall be ineligible to another. Such a
provision is held to incapacitate the incumbent of an office from
accepting or holding a second office (State ex rel. Van Antwerp v
Hogan, 283 Ala. 445, 218 So 2d 258; McWilliams v Neal, 130 Ga
733, 61 SE 721) and to render his election or appointment to the
latter office void (State ex rel. Childs v Sutton, 63 Minn 147, 65 NW
262. Annotation: 40 ALR 945) or voidable (Baskin v State, 107 Okla
272, 232 p 388, 40 ALR 941)." 26 "Where the constitution, or
statutes declare that persons holding one office shall be ineligible for
election or appointment to another office, either generally or of a
certain kind, the prohibition has been held to incapacitate the
incumbent of the first office to hold the second so that any attempt to
hold the second is void (Ala. — State ex rel. Van Antwerp v. Hogan,
218 So 2d 258, 283 Ala 445)." 27
As incumbent elective official, respondent Gordon is ineligible for
appointment to the position of Chairman of the Board and Chief
Executive of SBMA; hence, his appointment thereto pursuant to a
legislative act that contravenes the Constitution cannot be sustained.
He however remains Mayor of Olongapo City, and his acts as SBMA
official are not necessarily null and void; he may be considered a de
facto officer, "one whose acts, though not those of a lawful officer,
the law, upon principles of policy and justice, will hold valid so far as
they involve the interest of the public and third persons, where the
duties of the office were exercised . . . . under color of a known
election or appointment, void because the officer was not eligible, or
because there was a want of power in the electing or appointing
body, or by reason of some defect or irregularity in its exercise, such
ineligibility, want of power or defect being unknown to the public . . . .
[or] under color of an election, or appointment, by or pursuant to a
public unconstitutional law, before the same is adjudged to be such
(State vs. Carroll, 38 Conn., 499; Wilcox vs. Smith, 5 Wendell [N.Y.],
231; 21 Am. Dec., 213; Sheehan's Case, 122 Mass, 445, 23 Am.
Rep., 323)." 28
Conformably with our ruling in Civil Liberties Union, any and all per
diems, allowances and other emoluments which may have been
received by respondent Gordon pursuant to his appointment may be
retained by him.
The illegality of his appointment to the SBMA posts being now
evident, other matters affecting the legality of the questioned proviso
as well as the appointment of said respondent made pursuant
thereto need no longer be discussed.
In thus concluding as we do, we can only share the lament of Sen.
Sotero Laurel which he expressed in the floor deliberations of S.B.
1648, precursor of R.A. 7227, when he articulated —
. . . . (much) as we would like to have the present Mayor of Olongapo
City as the Chief Executive of this Authority that we are creating;
(much) as I, myself, would like to because I know the capacity,
integrity, industry and dedication of Mayor Gordon; (much) as we
would like to give him this terrific, burdensome and heavy
responsibility, we cannot do it because of the constitutional
prohibition which is very clear. It says: "No elective official shall be
appointed or designated to another position in any capacity." 29
For, indeed, "a Constitution must be firm and immovable, like a
mountain amidst the strife of storms or a rock in the ocean amidst the
raging of the waves." 30 One of the characteristics of the
Constitution is permanence, i.e., "its capacity to resist capricious or
whimsical change dictated not by legitimate needs but only by
passing fancies, temporary passions or occasional infatuations of the
people with ideas or personalities . . . . Such a Constitution is not
likely to be easily tampered with to suit political expediency, personal
ambitions or ill-advised agitation for change." 31
Ergo, under the Constitution, Mayor Gordon has a choice. We have
no choice.
WHEREFORE, the proviso in par. (d), Sec. 13, of R.A. 7227, which
states: ". . . Provided, however, That for the first year of its
operations from the effectivity of this Act, the Mayor of the City of
Olongapo shall be appointed as the chairman and chief executive
officer of the Subic Authority," is declared unconstitutional;
consequently, the appointment pursuant thereto of the Mayor of
Olongapo City, respondent Richard J. Gordon, is INVALID, hence
NULL and VOID.
However, all per diems, allowances and other emoluments received
by respondent Gordon, if any, as such Chairman and Chief
Executive Officer may be retained by him, and all acts otherwise
legitimate done by him in the exercise of his authority as officer de
facto of SBMA are hereby UPHELD.
SO ORDERED.
G.R. No. 99336 June 9, 1992
MELANIO S. TORIO, Petitioner,
vs.
CIVIL SERVICE COMMISSION, NATIONAL PRINTING OFFICE, Executive Order No. 285 issued on July 25, 1987 abolished the
OFFICE OF THE PRESS SECRETARY and EFREN CAMACHO, General Services Administration (GSA) including all offices and
Respondents. agencies under it. The General Printing Office (GPO) which was
under the GSA was merged with the relevant printing units of the
x---------------x Philippine Information Agency (PIA) and out of the merger arose the
National Printing Office (NPO) which was placed under the control
G.R. No. 100178 and supervision of the Office of the Press Secretary (OPS). A new
plantilla of personnel for the NPO was prepared and approved and
JAIME ESPANOLA, Petitioner, the affected officers and employees continued to perform their
vs. respective duties and responsibilities in a hold-over capacity pending
CIVIL SERVICE COMMISSION, LETTY CANGAYDA, NATIONAL the implementation of the reorganization.
PRINTING OFFICE and THE OFFICE OF THE PRESS
SECRETARY, Respondents. The petitioner in G.R. No. 99336, Melanio Torio, was the Chief of the
Production Staff of the Printing Division, PIA, while the petitioner in
DECISION G.R. No. 100178, Jaime Espanola, was a Bindery Foreman at the
PIA. They continued discharging their functions in a hold-over
GUTIERREZ, JR., J.: capacity after the PIA was merged with the GSA. On March 1, 1988,
in accordance with the new staffing pattern of the NPO, petitioner
These two consolidated petitions assail the resolutions of the Civil Torio was temporarily appointed as Assistant Operations
Service Commission (CSC) revoking the appointment of herein Superintendent of Printing while petitioner Espanola was appointed
petitioners on the ground that they lacked the necessary civil service as Temporary Supervising Book-binder. Both appointments lapsed
eligibility at the time of the issuance of their appointments. on February 28, 1989. So on March 1, 1989, petitioner Torio was
extended a renewal appointment which was likewise in a temporary
The same series of events gave rise to the controversy in these two capacity while petitioner Espanola was issued another appointment
petitions.
as Supervising Bookbinder with a permanent status. On the same
date, Espanola was granted a testimonial eligibility.
On July 1, 1989, the positions of both petitioners were upgraded—
the Assistant Operations Superintendent of Printing was changed to
Assistant Superintendent of Printing and the Supervising Bookbinder
to Bookbinder IV. This time, another appointment was issued to Torio
for the upgraded position together with his change of status from
temporary to permanent. Espanola, on the other hand, was given
only a notice of the upgrading of his position inasmuch as he was
already holding it in a permanent capacity.
Prior to the appointments of the petitioners to the permanent items,
protests were lodged with the CSC. The protestants were Efren
Camacho and Letty Cangayda, the private respondents in G.R. No.
99336 and G.R. No. 100178, respectively. The CSC referred
Camacho’s protest to the NPO while Cangayda’s protest was
referred to the Reorganization Appeals Board of the OPS. The
offices concerned did not take any action on the referrals by the CSC
so the latter was constrained to resolve the protests based on the
available documents or papers before it.
On January 7, 1991, the CSC issued a resolution in CSC Case No.
796 revoking the appointment of Torio and ordering those qualified,
including Camacho, to be evaluated for the position. Subsequently,
on February 5, 1991, the CSC rendered another resolution in CSC
Case No. 832 cancelling Espanola’s appointment and ordering the
reappointment of Cangayda to the position. The motions for
reconsideration filed separately by the present petitioners were
denied for lack of merit. Hence, the present recourse to this Court.
As was stated earlier, the two petitions herein were consolidated in a
resolution of this Court on September 3, 1991. A temporary
restraining order, as prayed for by the petitioners, was issued
pursuant to the Court’s resolution dated October 10, 1991.
On the basis of the pleadings before us, we give due course to the
petitions and decide them on their respective merits.
The two petitions raise the following assignments of errors:
G.R. No. 99336.
I
"THE RESPONDENT CIVIL SERVICE COMMISSION DID NOT
CAREFULLY REVIEW THE RECORDS OF THE CASE IN
RESOLVING THE PETITIONER’S MOTION FOR
RECONSIDERATION.
II
"THE RESPONDENT CIVIL SERVICE COMMISSION WAS SERVICE WITHOUT DUE PROCESS OF LAW AND WITHOUT
UTTERLY WRONG IN RULING THAT AT THE TIME OF THE JUST AND VALID CAUSE.
ISSUANCE OF HIS APPOINTMENT IN QUESTION, PETITIONER
TORIO WAS NOT QUALIFIED FOR ALLEGED LACK OF II
ELIGIBILITY AND THE REQUIRED EXPERIENCE THEREFOR.
"THAT THE RESOLUTIONS ARE NOT SUPPORTED BY THE
III EVIDENCE ON RECORD.

"THE RESPONDENT CIVIL SERVICE COMMISSION WAS III

UTTERLY WRONG IN RULING ‘THAT IN THE PRESENCE OF
QUALIFIED EMPLOYEES IN THE AGENCY, THE PROPOSED
PLACEMENT OR APPOINTMENT OF ONE WHO IS NOT
QUALIFIED (NOT ELIGIBLE) IS NOT IN ORDER FOR THE
REASON THAT AT THE TIME THE APPOINTMENT IN QUESTION
WAS ISSUED, OTHER CONTENDERS WITH ‘PERMANENT
APPOINTMENTS LIKE PROTESTANT SANTIAGO WERE NEVER
CONSIDERED." (Rollo, G.R. No. 99336, p. 93)
G.R. No. 100178
I already expired. Consequently, the Commissioner has no authority to
"THAT IF THE AFORECITED RESOLUTIONS
RESPONDENT CIVIL SERVICE COMMISSION ARE ENFORCED,
PETITIONER, A PERMANENT CAREER CIVIL
EMPLOYEE WILL BE DISMISSED OR REMOVED FROM THE
"THAT ERRORS OF LAW OR IRREGULARITIES HAVE BEEN
COMMITTED WHICH ARE PREJUDICIAL TO THE INTEREST OF
THE PETITIONERS." (Rollo, G.R. No. 99336, p. 93)
Petitioner Torio alleges that at the time of his appointment, he was
already a civil service eligible having passed the career service
professional examination held on July 26, 1987 and the results of
which were released on January 13, 1988. He further contends that
Camacho’s protest has become moot and academic inasmuch as the
temporary appointment against which the protest was directed has
withdraw its previous approval which has lapsed. Torio likewise
OF THE stresses the fact that he has security of tenure as provided under the
Constitution such that his removal must only be for cause and after
SERVICE due process.
Private respondent Camacho, on the other hand, avers that the
Commision has the power to review appointments for the correction
of mistakes in the approval or disapproval thereof. Moreover, at the
time of Torio’s appointment, there were other qualified eligibles who
were not given the chance to be considered for the contested
position through no fault of their own. Thus, the Commission did not
exceed its authority when in the exercise of its power of review, it
revoked the appointment of petitioner.
The Solicitor General filed an adverse Comment stating that the CSC
committed grave abuse of discretion in revoking the permanent
appointment of petitioner Torio who was found to possess all the
qualifications required of the position. It added that an appointment is
essentially within the discretionary power of the appointing authority,
subject to the only condition that the appointee should possess the
qualifications required by law.
Petitioner Espanola, for his part, contends that he possesses the
qualifications for the position of Supervising Bookbinder (now
Bookbinder IV). He is a Supervising Bookbinder Eligible; he has
more than tenyears of service very relevant to the duties and
functions of Supervising Bookbinder; he is not facing any
administrative charge; and he possesses the minimum educational
qualifications to the position for all of which his appointment has
been approved by the CSC. He further contends that inasmuch as
his appointment has already been approved by the CSC, it cannot be
withdrawn, recalled or cancelled. He takes the same stand as
petitioner Torio with respect to the protest being moot and academic
as well as his security of tenure under the Constitution.
Private respondent Cangayda, on the other hand, claims that the
appointment of petitioner Espanola is a flagrant violation of Republic
Act 6656 entitled "An Act to Protect the Security of Tenure of
Government Officers and Employees in the Implementation of
Government Reorganization." She was a Supervising Bookbinder
under a permanent status prior to the re-organization and she
should, thus, thereafter, be appointed to the same item in the same
capacity pursuant to the provisions of the aforementioned Act. She
contends that her protest is primarily directed against her demotion
and non-reappointment to the position of Supervising Bookbinder as
well as the consequential appointment of petitioner in her stead and
not petitioner’s temporary appointment. Thus, petitioner Espanola’s
argument that his temporary appointment as Supervising Bookbinder
cannot be the subject of an appeal since the same has already
expired is offtangent. More importantly, Espanola is not qualified for
appointment to the contested position since at the time of his
appointment, he was not a civil service eligible and there was a civil
service eligible actually available and ready to accept the
appointment in the person of private respondent Cangayda. And
since the appointee is not qualified, the CSC, being the central
personnel agency of the government, can look into the legality of an
appointment and consequently order its revocation and cancellation.

The Solicitor General, in his comment for the public respondent
added that the subsequent acquisition of eligibility by the petitioner is
of no moment inasmuch as the reckoning point should be the time of
appointment and not any time before or after.
The CSC, in revoking the appointment of herein petitioners based its
resolutions primarily on the fact that the petitioners did not possess
the civil service eligibility called for by their respective positions. The
CSC ruled further, that their subsequent acquisition of eligibility will
not validate the otherwise invalid appointment inasmuch as the
material date is the date of appointment.
We first rule on the nature of the petitioner’s appointments.
The foregoing pronouncements of the CSC hold true only in-
concerned. However, it must be noted that under Section 25
Presidential Decree 807 otherwise known as the Civil Service
Decree of the Philippines, an appointee with a temporary status need
not possess the civil service eligibility required by the position
provided he meets the following qualifications: (1) it is necessary in
the public interest to fill a vacancy; (2) there are no appropriate
eligibles; (3) the temporary appointment shall not exceed twelve
months; and (4) he may be replaced sooner if a qualified civil service
eligible becomes available.
Still, at the time of the temporary appointment of petitioner Espanola,
a civil service eligible who was willing to accept the position was
available in the person of private respondent Cangayda. Apparently,
there was disregard of the mandate of the law when Espanola’s
temporary appointment was issued. Nevertheless, the petitioner has
correctly pointed out that the protest lodged by private respondent
Cangayda had become moot and academic inasmuch as petitioner
Espanola’s temporary appointment had already lapsed on February
28, 1989. It is erroneous for the CSC to treat Cangayda’s protest as
a continuing one. The same holds true for the protest lodged by
Camacho.
A permanent appointment is not a continuation of the temporary
appointment—these are two distinct acts of the appointing authority.
The fact that the appointees in the two appointments are one and the
same person is purely incidental. Any irregularities in the former
appointment are not to be automatically carried over to the latter. If
the protest is directed against the temporary appointment, it would be
illogical to carry-over the merits of the protest to the subsequent
permanent appointment.
The preceding ruling should not be construed to mean, however, that
by the mere expedient of appointing the temporary appointee to a
permanent status, the appointing authority can deprive the protestant
of an opportunity to question the appointment. First, the protestant is
not precluded from filing another protest directed against the
permanent appointment. Second, if it can be shown that the Prescinding from the foregoing discussions, it is established that the
appointment was purposely done to moot the protest or is questioned resolutions of the CSC should be declared inapplicable to
characterized by malice, then corrective action can be taken and, the petitioners because they refer to the temporary appointments
moreover, the erring officials can be proceeded against which had already lapsed when they were issued.
administratively.
At any rate, this Court deems it best to make a ruling on the validity
It must be emphasized that if a protest filed against a temporary of the permanent appointments inasmuch as the same has already
appointment is carried over to the subsequent permanent been put in issue in the present petitions. Moreover, if the present
appointment to the same position of the same person, an anomalous petitions be granted without prejudice to the private respondents’
situation will arise wherein the permanent appointee’s security to his right to file a protest against the permanent appointments of the
position would be jeopardized by considerations outside of his petitioners, then that would unduly prolong the resolution of who
permanent appointment. should rightfully be appointed to the contested positions to the
prejudice of the public service.
The chances of the occurrence of the previously described situation
would be minimized if the CSC promptly acts upon the protest. After THE PERMANENT APPOINTMENTS OF PETITIONERS
giving the department or agency to which the protest is referred as ESPANOLA AND TORIO
reasonable deadline to act, its inaction may be a basis for the CSC to
give positive relief. It is worthy of note that the CSC has recognized The Qualification Standard (QS) for the position of Bookbinder IV
the importance of the speedy disposition of cases in its resolution provides the following minimumn requirements:
No. 89-779, which provided for the Rules on Protest Cases requiring
the disposition of cases within 60 days from filing thereof. EDUCATION : Completion of Secondary School Course

The situation in the present petitions could have been prevented if EXPERIENCE : Two years of experience in bindery work
the CSC did not wait for two years before taking the appropriate
action on the protests filed. ELIGIBILITY : Bookbinder
Supervising Bookbinder
As to the QS for the position of Assistant Superintendent of Printing,
the following minimum requirements are prescribed:
EDUCATION: Bachelor’s degree preferably in Commerce or
Business Administration
EXPERIENCE: 4 years of progressive responsible experience in
different technical activities of printing operations or other related
work
ELIGIBILITY: Career service
Sub-professional
is to be considered as possessing the requisite civil service eligibility
for his position. The same holds true with petitioner Torio. At the time
of his permanent appointment, he was already a career service
professional, having passed the civil service examination held on
July 26, 1987 and the results of which released on January 13, 1988.
In fact, even at the time of Torio’s temporary appointment on March
1, 1988, he already possessed the civil service eligibility called for by
the position.
The QS established for the contested positions do not only
prescribed the eligibility but also the minimum education and
experience required of the position. Even if the petitioners possess
the required civil service eligibility, there would still be abuse of
discretion by the appointing authority if the other qualifications are
not satisfied.

The appointing authority should, thus, appoint persons to the Based on the QS listed above, the records show that both petitioners
contested positions possessing the aforementioned minimum possess qualifications required of the contested positions.
qualifications so as to be within ambits of the law. For even if the
appointing authority is given a wide latitude in the exercise of its Private respondent Cangayda, however, questions petitioner
discretion in personnel actions, the appointee must first possess the Espanola’s non-completion of a secondary course as prescribed by
minimum qualifications prescribed by law (Cortez v. The Civil Service the QS.
Commission, 195 SCRA 216 [1991]).
It would be appropriate to state at the outset that when necessary,
At the time petitioner Espanola was issued a permanent education, experience or training may be used interchangeably to
appointment, he was also granted testimonial eligibility such that he offset deficiencies (in fact, the CSC issued Memorandum Circular
No. 23 series of 1991 expressly allowing the offsetting of deficiencies
except the required eligibility). The necessity exists if the appointee’s
training or experience is of such a level that the same would more
than supplement the deficiency in education considering the
demands of the position in question. The converse holds true if the
appointee’s deficiency is in the required training or experience. The
decision as to when the conditions give rise to a necessity to
interchange education with experience and vice-versa upon the
sound discretion of the appointing authority. This is not to be viewed
as an unbridled license given to the appointing authority to appoint
whomsoever he desires. This is rather a recognition of the fact that
the appointing authority is in the best position to determine the needs
of his department or agency and how to satisfy those needs.
Moreover, it is precisely the province of the QS to provide the gauge
by which the appointing authority shall exercise his discretion. The
QS has been defined in Section 20, PD 807 as expressing the
minimum requirements for a class of position in terms of education,
training and experience, civil service eligibility, physical fitness and
other qualities required for successful performance. It is, thus, the
QS which provides for the considerations upon which the appointing
authority decides when the levels of education of experience may be
sufficient to offset each other.
With respect to petitioner Espanola’s case, the necessity to offset the
deficiency in education with his training is very apparent from his
work-experience. It must be stressed that the contested position
belongs to the trades and crafts group wherein the emphasis is
necessarily on the skill required by the work. There can be no doubt
that fitness for the job is developed through years of actual work.
Petitioner Espanola’s service record (Annex "D") shows that from
1973 until his permanent appointment in 1989, he had continuously
engaged in bindery work. It must likewise be pointed out that he was
extended a testimonial eligibility which is a confirmation by the
appointing authority of his capacity to perform the type of work which
his position requires. Worthy of note is the fact that at the time of the
grant of testimonial eligibility, the QS was already being enforced
such that the appointing authority is presumed to have taken into
consideration the standards prescribed by the QS. There is, thus, no
escaping the conclusion that Jaime Espanola is qualified to handle
the demands of the contested position.
However, this Court does not rule on the validity of the grant of
testimonial eligibility. The issue is not before us. Private respondent
Cangayda stated in her brief that an action to question the validity of
such grant shall be filed in due time. The pronouncements of this
Court, then, as to the validity of the appointment of petitioner
Espanola are without prejudice to the said action.
With respect to petitioner Torio, on the other hand, the records show
that he fully qualifies for the position to which he was appointed. The
Solicitor General, in his adverse comment, aptly summarized the
petitioner’s qualifications in the following manner:

"EDUCATION – 1981 To 1983 – "MBA" Candidate for Graduation,
Ateneo de Manila;
1965 to 1969 – "A.B. Political Science", University of the Philippines;
1960 to 1965 – "Valedictorian, High School", Luna Colleges; and
1955 to 1960 – "1st Honorable Mention, Elementary" Grade
Graduate.
ELIGIBILITY – Career Service Professional (81.48%) July 26, 1987.
(B) With the Government
(B-1) Sept. 1986 to Dec. 1986 – Acting Chief, Printing Division & Ex.
Asst. for Technical Services, PIA;
(B-2) Jan. 1987 to Feb. 1988 – Chief, Production Staff & Chief
Printing Div., PIA;
(B-3) Mar. 1, 1988 to Present – Assistant Printing Operations Supt.
(now Asst. Supt. Of Printing, NPO).
"Petitioner likewise participated, upon recommendation of his
department head as duly authorized by the Executive Secretary, in
the UNIDO Training Programme in the Field of Printing Industry held
in Karl Marx Stadt/Dresden/Leipzig, GDR from September 30 to
October 13, 1990 (Annexes "E", "E-1" to "E-5).
"On November 24 to December 5, 1986 petitioner attended and
actively participated in the Evaluation Workshop on Audiovisual
Materials for the Book Publishing Course conducted by the UP
Institute of Mass Communication in cooperation with UNESCO
(Paris) Annex "L-1). Later, particularly on May 28 to June 6, 1987,
petitioner completed a Seminar Workshop for Quality Printing
through Better Supervision of Printing Shop, conducted by the
Printing Industry Board Foundation (Annex "L-2"). Then again on
November 12 to 14, 1987 petitioner participated in the Seminar on
Promotion of PIA’s Programs conducted by the Philippine
Information Agency (Annex "L-3"). Still persistent with the quest for
better knowledge, petitioner again attended the Seminar/Workshop
on The Business of Book Publishing-Managing for Profit and
Economic Choices" conducted by Peter H. Neumann on November
24 to 27, 1987 sponsored by the United States Information Service
and the Book Development Association of the Philippines (Annex "L-
4")," (Rollo, G.R. No. 99336, p. 93-95)
Although petitioner Torio majored in Political Science and not in
Commerce or Business Administration, the QS provided that the
latter two are mere preferences. As to private respondent’s claim that
Torio had only one year, six months and eight days of experience in
printing operations at the time of his appointment (it must be noted,
however, that the private respondent was referring to Torio's
government service at the time of his temporary appointment since at
the time of permanent appointment, Torio had over two years of
government service), the QS provided that the experience may be on
other related work. The appointing power may have found Torio’s
previous work experiences sufficient to tack to the number of years
of experience in actual printing operations coupled with the
numerous seminars and trainings he had attended. There is thus, no
evident violation of the QS.
From the foregoing, it is established that petitioners Espanola and
Torio are qualified for the positions to which they were appointed.
The appointing authority’s exercise of discretion in the choice of
appointees must be respected even if there are other persons who
are likewise qualified for the position such as private respondents
Cangayda and Camacho. In fact, the CSC does not have the power
to overrule such discretion even if its finds that there are other
persons more qualified to the contested position. (italics supplied)
[De la Cruz v. The Civil Service Commission, G.R. No. 88333,
December 2, 1991; Cortez v. The Civil Service Commission, supra;
Gaspar v. Court of Appeals 190 SCRA 774 [1990]).
As has been held in Español v. The Civil Service Commission, G.R.
No. 85479, March 3, 1992, "every particular job in an office calls for
both formal and informal qualifications. Formal qualifications such as
age, number of academic units in a certain course, seminars
attended and so forth, may be valuable but so are such intangibles
as resourcefulness, team spirit, courtesy, initiative, loyalty, ambition,
prospects for the future and best interest of the service. Given the
demands of a certain job, who can do it best should be left to the
head of the Office concerned provided the legal requirements for the
office are satisfied."
This Court does not overlook the fact that prior to the reorganization
of the GSA, the petitioners were holding contractual or casual
employment. This circumstance is of utmost importance considering
the provision of Section 4, Republic Act. 6656:
"SECTION 4. Officers and employees holding permanent
appointments shall be given preference for appointment to the new
positions in the approved staffing pattern comparable to their former
positions or in case there are not enough comparable positions, to
positions next lower in rank. x x x"
In Medenilla v. The Civil Service Commission, 194 SCRA 278 [1991],
this Court stated the rationale for the preference given to permanent
employees in the following manner:
"x x x The preference given to permanent employees assumes that
employees working in a Department for longer periods have gained
not only superior skills but also greater dedication to the public
service. x x x"
The Court, then, continued by making the following observations:
x x x that the presumption is not always true and the law does not
preclude the infusion of new blood, younger dynamism or necessary
talents into the government service. "If, after considering all the
current employees, the Department Secretary cannot find among
them the person he needs to revive a moribund office or to upgrade
second rate performance, there is nothing in the Civil Service Law to
prevent him from reaching out to other Departments or to the private
sector provided all his acts are bona fide and for the best interest of
the public service and the person chosen has the needed
qualifications."
It is, thus, clear from the foregoing that employees or officers holding
permanent appointments do not automatically get appointed to the
new positions. The appointing authority is still given latitude in
making his choice considering the duty resting on his discretion to
see to it that the best interest of the public is served with each
appointment he makes. More so in cases of reorganization of offices,
where in making the new appointments, the appointing authority has
also to take into consideration the purposes and objectives of the
reorganization. In the present case, the reorganization was
undertaken to promote economy, efficiency and effectiveness in the
delivery of public services. The appointing authority should be given
sufficient discretion to be able to ensure that the purposes and
objectives are met. It is in this light that the appointments of
petitioners Espanola and Torio should be viewed.
Petitioners Espanola and Torio were validly appointed to the
questioned positions. Only the corollary issue of whether or not
private respondent Cangayda's security of tenure was violated by the
appointment of petitioner Espanola remains to be settled.
In Mendoza v. Quisumbing, 186 SCRA 108 [1990], the ruling in favor
of the dismissed personnel was made in the light of the finding that
the reorganization undertaken was not in good faith. The Court even
reiterated the principles in De La Llana v. Alba, 112 SCRA 294
[1982] and Cruz v. Primicias, 23 SCRA 998 [1968] that the abolition
of an office within the competence of a legitimate body if done in
good faith suffers from no infirmity and a valid abolition of office is
neither removal nor separation of the incumbents.
The same principles were enunciated earlier in Dario v. Mison, 176
SCRA 84 [1989] where the Court made the following declarations:
"x x x Reorganizations in this jurisdiction have been regarded as
valid provided they are pursued in good faith.1âwphi1 As a general
rule, a reorganization is carried out in ‘good faith’ if it is for the
purpose of economy or to make bureaucracy more efficient. In that
event, no dismissal (in case of a dismissal) or separation actually
occurs because the position itself ceases to exist. And in that case,
security of tenure would not be a Chinese wall. x x x" (Underscoring
supplied)
It is worthy to re-state that the present petitions arose due to the
abolition of the GSA and its merger with the relevant printing units of
the PIA giving rise to the NPO. There is no showing that the
reorganization was undertaken for any reason other than its purpose
of promoting economy, efficiency and effectiveness in the delivery of
public service. In fact, the private respondents did not put in issue the
validity of the reorganization of the offices. They questioned only
their non-appointment to the contested positions. We are constrained
to assume that there was in the present case, a bona fide
reorganization. Hence, private respondent Cangayda cannot
successfully impugn her alleged removal as illegal for under the facts
of the case, she was not dismissed; rather, her former position was
abolished. More important, this Court has ruled in Siete v. Santos,
190 SCRA 50 [1990] that Section 16, Article VIII of the 1987
Constitution explicitly authorizes the dismissal of career civil service
employees not for cause but as a result of the reorganization
following the ratification of said Constitution.
As to the alleged violation of Republic Act 6656, it must be
emphasized that the question has to be resolved in the light of the
prevailing bona fide rule in reorganization of the public offices. The
foregoing principle has been applied in Floreza v. Ongpin, 182 SCRA
692 [1990] where the Court ruled that:
"x x x Section 2 of Republic Act 6656 entitles a victim of a removal in
violation of the bona fide rule to a reinstatement or reappointment to
the position from which he was removed" (underscoring supplied).
There is nothing in this decision which precludes the more
appropriate recourse of private respondent Cangayda to appeal to
the better judgment of the Department Head to consider her for other
vacant positions more commensurate to her qualifications.
WHEREFORE, premises considered, the Court hereby GRANTS the
petitions in G.R. No. 99336 and G.R. No. 100178. The assailed
resolutions of the Civil Service Commission in CSC Case No. 796
and CSC case No. 832 are set aside. The permanent appointments
of petitioners Melanio S. Torio and Jaime Espanola are declared
valid. The temporary restraining order issued pursuant to the Court's
resolution dated October 10, 1991 is made permanent.
SO ORDERED.
 Ong died on May 22, 2009 during the pendency of the instant
petition.4 Admittedly, Ong's death rendered the prayer for
reinstatement in the petition for quo warranto as moot and academic.
However, substitution5 was sought because in the event that the
G.R. No. 184219 January 30, 2012 Court would rule that Ong was indeed entitled to the position he
claimed, backwages pertaining to him can still be paid to his legal
SAMUEL B. ONG, Petitioner, heirs. Per Resolution6 issued on January 10, 2011, we granted the
vs. motion for substitution. The deceased petitioner is now herein
OFFICE OF THE PRESIDENT, ET AL., Respondents. substituted by his wife Elizabeth, and children, Samuel Jr., Elizabeth
and Carolyn, all surnamed Ong.
DECISION
Antecedents Facts
REYES, J.:
The CA aptly summarized the facts of the case before the filing of the
The Case petition for quo warranto as follows:

Before us is a petition for review1 on certiorari under Rule 45 of the
Rules of Court filed by Samuel B. Ong (Ong) to assail the Decision2
rendered by the Court of Appeals (CA) on August 5, 2008 in CA-G.R.
SP No. 88673, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, the petition for quo
warranto filed in this case is hereby DENIED.
SO ORDERED.3
The petitioner [Ong] joined the National Bureau of Investigation (NBI)
as a career employee in 1978. He held the position of NBI Director I
from July 14, 1998 to February 23, 1999 and NBI Director II from
February 24, 1998 to September 5, 2001. On September 6, 2001,
petitioner was appointed Director III by the President. His
appointment paper pertinently reads:
"x x x
Pursuant to the provisions of existing laws, the following are hereby
appointed to the NATIONAL BUREAU OF INVESTIGATION,
DEPARTMENT OF JUSTICE co-terminus with the appointing
authority:
xxx
SAMUEL B. ONG - DIRECTOR III
(vice Carlos S. Caabay) [DEPUTY DIRECTOR]
x x x"
On June 3, 2004, the petitioner received from respondent Reynaldo
Wycoco Memorandum Circular No. 02-S.2004 informing him that his
appointment, being co-terminus with the appointing authority's
tenure, would end effectively at midnight on June 30, 2004 and,
unless a new appointment would be issued in his favor by the
President consistent with her new tenure effective July 1, 2004, he
would be occcupying his position in a de facto/hold[-]over status until
his replacement would be appointed.
On December 01, 2004, the President appointed respondent Victor
A. Bessat as NBI Director III as replacement of the petitioner.
Consequently, respondent Wycoco notified the petitioner that,
effective on December 17, 2004, the latter should cease and desist
from performing his functions as NBI Director III in view of the
presidential appointment of respondent Bessat as petitioner's
replacement. The petitioner received the aforementioned notice only
on January 27, 2005.7 (underscoring supplied and citations omitted)
On February 22, 2005, Ong filed before the CA a petition for quo
warranto. He sought for the declaration as null and void of (a) his
removal from the position of NBI Director III; and (b) his replacement
by respondent Victor Bessat (Bessat). Ong likewise prayed for
reinstatement and backwages.
The CA denied Ong's petition on grounds:
A petition for quo warranto is a proceeding to determine the right of a
person to the use or exercise of a franchise or office and to oust the
holder from its enjoyment, if his claim is not well-founded, or if he has
forfeited his right to enjoy the privilege.8 Where the action is filed by
a private person, in his own name, he must prove that he is entitled
to the controverted position, otherwise, respondent has a right to the
undisturbed possession of the office.9
Section 27 of the Administrative Code of 1987, as amended,
classifies the appointment status of public officers and employees in
the career service into permanent and temporary. A permanent
appointment shall be issued to a person who meets all the
requirements for the position to which he is being appointed,
including appropriate eligibility prescribed, in accordance with the
provisions of law, rules and standards promulgated in pursuance
thereof. In the absence of appropriate eligibles and it becomes
necessary in the public interest to fill a vacancy, a temporary
appointment shall be issued to a person who meets all the
requirements for the position to which he is being appointed except
the appropriate civil service eligibility; provided, that such temporary
appointment shall not exceed twelve months, but the appointee may
be replaced sooner if a qualified civil service eligible becomes
available.
x x x In Cuadra v. Cordova,10 temporary appointment is defined as
"one made in an acting capacity, the essence of which lies in its
temporary character and its terminability at pleasure by the
appointing power." Thus, the temporary appointee accepts the
position with the condition that he shall surrender the office when
called upon to do so by the appointing authority. The termination of a
temporary appointment may be with or without a cause since the
appointee serves merely at the pleasure of the appointing authority.
In the career executive service, the acquisition of security of tenure
presupposes a permanent appointment. As held in General v.
Roco,11 two requisites must concur in order that an employee in the
career executive service may attain security of tenure, to wit: 1) CES
eligibility[;] and 2) appointment to the appropriate CES rank.
In the present case, it is undisputed that the petitioner is a non-
CESO eligible. At best, therefore, his appointment could be regarded
only as temporary and, hence, he has no security of tenure. Such
being the case, his appointment can be withdrawn at will by the
President, who is the appointing authority in this case, and "at a
moment's notice."12
Moreover, a perusal of the petitioner's appointment will reveal that
his appointment as NBI Director III is co-terminous with the
appointing authority. Correlatively, his appointment falls under
Section 14 of the Omnibus Rules Implementing Book V of the
Revised Administrative Code of 1987 which provides that:13
"Sec. 14. An appointment may also be co-terminous which shall be
issued to a person whose entrance and continuity in the service is
based on the trust and confidence of the appointing authority or that
which is subject to his pleasure, or co-existent with his tenure, or
limited by the duration of project or subject to the availability of funds.
"
The co-terminous status may thus be classified as follows:
xxxx
(2) Co-terminous with the appointing authority –
when appointment is co-existent with the tenure of the appointing
authority or at his pleasure; x x x
xxxx
Thus, although petitioner's appointment is co-terminous with the
tenure of the President, he nevertheless serves at the pleasure of the
President and his appointment may be recalled anytime. The case of
Mita Pardo de Tavera v. Philippine Tuberculosis Society, Inc.14
delineated the nature of an appointment held "at the pleasure of the
appointing power" in this wise:
An appointment held at the pleasure of the appointing power is in
essence temporary in nature. It is co-extensive with the desire of the
Board of Directors. Hence, when the Board opts to replace the
incumbent, technically there is no removal but only an expiration of
term and in an expiration of term, there is no need of prior notice,
due hearing or sufficient grounds before the incumbent can be
separated from office. The protection afforded by Section 7.04 of the
Code of By-Laws on Removal [o]f Officers and Employees, therefore,
cannot be claimed by petitioner.
All told, petitioner's appointment as well as its consequent
termination falls within the ambit of the discretion bestowed on the
appointing authority, the President. Simply put, his appointment can
be terminated at any time for any cause and without the need of prior
notice or hearing since he can be removed from his office anytime.
His termination cannot be said to be violative of Section 2(3), Article
IX-B of the 1987 Constitution. When a temporary appointee is
required to relinquish his office, he is being separated from office
because his term has expired.15 Starkly put, upon the appointment
of respondent Bessat as his replacement, his term of office had
already expired.
Likewise, it is inconsequential that the petitioner was replaced by
another non-CESO eligible, respondent Besat. In a quo warranto
proceeding[,] the person suing must show that he has a clear right to
the office allegedly held unlawfully by another. Absent that right, the
lack of qualification or eligibility of the supposed usurper is
immaterial.16
Indeed, appointment is an essentially discretionary power and must
be performed by the officer in which it is vested according to his best
lights, the only condition being that the appointee should possess the
qualifications required by law. If he does, then the appointment
cannot be faulted on the ground that there are others better qualified
who should have been preferred. This is a political question involving
considerations of wisdom which only the appointing authority can
decide.17
In sum, quo warranto is unavailing in the instant case, as the public
office in question has not been usurped, intruded into or unlawfully
held by respondent Bessat. The petitioner had no legal right over the
disputed office and his cessation from office involves no removal but
an expiration of his term of office.18
Hence, the instant petition ascribing to the CA the following errors:
I.
THE CA ERRED WHEN IT SUSTAINED THE VALIDITY OF THE
PETITIONER'S REMOVAL BY RESPONDENT WYCOCO AS NBI
DIRECTOR III (DEPUTY DIRECTOR).19
II.
THE CA ERRED IN HOLDING THAT SINCE THE PETITIONER
HELD A CO-TERMINOUS APPOINTMENT, HE IS TERMINABLE AT
THE PLEASURE OF THE APPOINTING POWER.20
Citing Ambas v. Buenaseda21 and Decano v. Edu,22 the instant
petition emphasizes that the power of removal is lodged in the
appointing authority. Wycoco, and not the President, issued
Memorandum Circular (MC) No. 02-S.2004 informing Ong that his
co-terminous appointment as Director III ended effectively on June
30, 2004. The issuance of MC No. 02-S.2004 was allegedly
motivated by malice and revenge since Ong led the NBI employees
in holding rallies in July 2003 to publicly denounce Wycoco. Hence,
Bessat's assumption of the position was null and void since it was
technically still occupied by Ong at the time of the former's
appointment.
It is further alleged that it was erroneous for the CA to equate "an
appointment co-terminous with the tenure of the appointing authority
with one that is at the pleasure of such appointing authority."23
Citing Alba, etc.. v. Evangelista, etcl.,24 Ong's counsel distinguished
a "term" as "the time during which the officer may claim to hold office
as of right" from a "tenure" which "represents the term during which
the incumbent actually holds the office". Ong's appointment, from
which he cannot be removed without just cause, was co-terminous
with the President's tenure which ended not on June 30, 2004, but
only on June 30, 2010.
Section 2(b), Article IX-G of the 1987 Constitution and Jocom v.
Regalado25 are likewise cited to stress that government employees,
holding both career and non-career service positions, are entitled to
protection from arbitrary removal or suspension. In the case of Ong,
who started his employment in 1978 and rose from the ranks, it is
allegedly improper for the CA to impliedly infer that the President
acted in bad faith by converting his supposed promotional
appointment to one removable at the pleasure of the appointing
authority.
In its Comment26 to the petition, the Office of the Solicitor General
(OSG) maintains that the replacement of Ong by Bessat was fair, just
and in accord with the doctrine enunciated in Aklan College v.
Guarino,27 and with Sections 1328 and 14,29 Rule V, Civil Service
Commission (CSC) Resolution No. 91-1631 issued on December 27,
1991. Section 13 substantially provides that only a temporary
appointment can be issued to a person who does not have the
appropriate civil service eligibility. Section 14(2), on the other hand,
defines a co-terminous appointment as one co-existent with the
tenure of the appointing authority or at his pleasure. The last
paragraph of Section 14 states that appointments which are co-
terminous with the appointing authority shall not be considered as
permanent.
The OSG also points out that in issuing MC No. 02-S.2004, Wycoco
did not remove Ong as Director III but merely reminded the latter that
after June 30, 2004, his appointment shall lapse into a de facto/hold-
over status unless he was re-appointed. Ong's colleagues applied for
re-appointment. Bessat was in fact re-appointed as Director II on
August 13, 2004. Subsequently, on December 1, 2004, the President
appointed Bessat as Director III, effectively replacing Ong.
Further, the OSG claims that when Ong accepted promotional
appointments in the Career Executive Service (CES) for which he did
not have the required eligibility, he became a temporary employee
and had impliedly abandoned his right to security of tenure.
Our Ruling
The petition is bereft of merit.
MC No. 02-S.2004 did not remove Ong from the position of Director
III. Assuming arguendo that it did, the defect was cured when the
President, who was the appointing authority herself, in whose hands
were lodged the power to remove, appointed Bessat, effectively
revoking Ong's appointment.
MC No. 02-S.2004,30 addressed to Ong, Bessat, Deputy Director
Nestor Mantaring, and Regional Director Edward Villarta, in part
reads:
Records indicate your appointment status as "co-terminus" with the
appointing power's tenure which ends effectively at midnight of this
day, 30 June 2004.
Unless, therefore, a new appointment is extended to you by Her
Excellency GLORIA MACAPAGAL-ARROYO, consistent with her
new tenure effective 01 July 2004, your services shall lapse into a de
facto/hold[-]over status, to ensure continuity of service, until your
replacements are appointed in your stead.31
On December 1, 2004, the President appointed Bessat as Ong's
replacement.32 Bessat was notified on December 17, 2004. Wycoco
furnished Ong with a Notice,33 dated December 20, 2004, informing
the latter that he should cease from performing the functions of
Director III, effective December 17, 2004.
It is argued that in the hands of the appointing authority are lodged
the power to remove. Hence, Wycoco allegedly acted beyond the
scope of his authority when he issued MC No. 02-S.2004.
This Court notes that MC No. 02-S.2004 did not in effect remove
Ong from his post. It merely informed Ong that records of the NBI
showed that his co-terminous appointment had lapsed into a de
facto/hold-over status. It likewise apprised him of the consequences
of the said status.
Be that as it may, if we were to assume for argument's sake that
Wycoco removed Ong from his position as Director III by virtue of the
former's issuance of MC No. 02-S.2004, still, the defect was cured
when the President herself issued Bessat's appointment on
December 1, 2004. The appointing authority, who in this case was
the President, had effectively revoked Ong's appointment.
Ong lacked the CES eligibility required for the position of Director III
and his appointment was "co-terminus with the appointing authority."
His appointment being both temporary and co-terminous in nature, it
can be revoked by the President even without cause and at a short
notice.
This Court likewise finds no error in the CA's ruling that since Ong
held a co-terminous appointment, he was removable at the pleasure
of the appointing authority.
It is established that no officer or employee in the Civil Service shall
be removed or suspended except for cause provided by law.34
However, this admits of exceptions for it is likewise settled that the
right to security of tenure is not available to those employees whose
appointments are contractual and co-terminous in nature.35 1âwphi1
In the case at bar, Ong's appointment as Director III falls under the
classifications provided in (a) Section 14(2) of the Omnibus Rules
Implementing Book V of the Administrative Code, to wit, that which is
"co-existent with the tenure of the appointing authority or at his
pleasure"; and (b) Sections 13(b)36 and 14(2)37 of Rule V, CSC
Resolution No. 91-1631, or that which is both a temporary and a co-
terminous appointment. The appointment is temporary as Ong did
not have the required CES eligibility.
The case of Amores v. Civil Service Commission, et al.38 is
instructive anent the nature of temporary appointments in the CES to
which the position of Director III held by Ong belonged. The Court
declared:
An appointment is permanent where the appointee meets all the
requirements for the position to which he is being appointed,
including the appropriate eligibility prescribed, and it is temporary
where the appointee meets all the requirements for the position
except only the appropriate civil service eligibility.
xxxx
x x x Verily, it is clear that the possession of the required CES
eligibility is that which will make an appointment in the career
executive service a permanent one. x x x
Indeed, the law permits, on many occasions, the appointment of non-
CES eligibles to CES positions in the government in the absence of
appropriate eligibles and when there is necessity in the interest of
public service to fill vacancies in the government. But in all such
cases, the appointment is at best merely temporary as it is said to be
conditioned on the subsequent obtention of the required CES
eligibility. x x x
xxx
Security of tenure in the career executive service,
presupposes a permanent appointment, takes place upon passing
the CES examinations administered by the CES Board. x x x
At this juncture, what comes unmistakably clear is the fact that
because petitioner lacked the proper CES eligibility and therefore
had not held the subject office in a permanent capacity, there could
not have been any violation of petitioner’s supposed right to security
of tenure inasmuch as he had never been in possession of the said
right at least during his tenure as Deputy Director for Hospital
Support Services. Hence, no challenge may be offered against his
separation from office even if it be for no cause and at a moment’s
notice. Not even his own self-serving claim that he was competent to
continue serving as Deputy Director may actually and legally give
even the slightest semblance of authority to his thesis that he should
remain in office. Be that as it may, it bears emphasis that, in any
case, the mere fact that an employee is a CES eligible does not
automatically operate to vest security of tenure on the appointee
inasmuch as the security of tenure of employees in the career
executive service, except first and second-level employees, pertains
only to rank and not to the office or position to which they may be
appointed.[45]39 (underscoring supplied and citations omitted)
The Court is categorical in the Amores case that an appointee
without the requisite CES eligibility cannot hold the position in a
permanent capacity. Temporary appointments are made if only to
which prevent hiatus in the government's rendition of public service.
However, a temporary appointee can be removed even without
cause and at a moment's notice. As to those with eligibilities, their
rights to security of tenure pertain to ranks but not to the positions to
which they were appointed.
Ong never alleged that at any time during which he held the Director
III position, he had acquired the requisite eligibility. Thus, the right to
security of tenure did not pertain to him at least relative to the
Director III position.
The next logical query to be resolved then is whether or not Ong, as
an appointee holding a position "co-terminus with the appointing
authority," was entitled to remain as Director III until the end of the
President's tenure on June 30, 2010.
We likewise rule in the negative.
Both Section 14 of the Omnibus Rules Rules Implementing Book V
of the Administrative Code and Section 14 (2) of Rule V, CSC
Resolution No. 91-1631 define a co-terminous appointment as one
co-existent with the tenure of the appointing authority or at his
pleasure.
In Mita Pardo de Tavera v. Philippine Tuberculosis Society, Inc.40
cited by the CA in its decision, we sustained the replacement of an
incumbent, who held an appointment at the pleasure of the
appointing authority. Such appointment was in essence temporary in
nature. We categorized the incumbent's replacement not as removal
but rather as an expiration of term and no prior notice, due hearing or
cause were necessary to effect the same. In Decano v. Edu,41 we
ruled that the acceptance of a temporary appointment divests an
appointee of the right to security of tenure against removal without
cause. Further, in Carillo vs. CA,42 we stated that "one who holds a
temporary appointment has no fixed tenure of office; his employment
can be terminated at the pleasure of the appointing authority, there
being no need to show that the termination is for cause."
In Ong's case, his appointment was temporary and co-terminous.
The doctrines enunciated in the cases of Mita Pardo de Tavera,
Decano, and Carillo apply. Hence, no legal challenge can be
properly posed against the President's appointment of Bessat as
Ong's replacement. The CA correctly ruled that in quo warranto
proceedings, the petitioner must show that he has a clear right to the
office allegedly held unlawfully by another and in the absence of the
said right, the lack of qualification or eligibility of the supposed
usurper is immaterial. Stated differently, where a non-eligible holds a
temporary appointment, his replacement by another non-eligible is
not prohibited.43
We note that Ong's counsel had painstakingly drawn distinctions
between a term and a tenure. It is argued that since Ong's
appointment was co-terminous with the appointing authority, it should
not had lapsed into a de facto status but continued until the end of
the President's tenure on June 30, 2010.
 IN VIEW OF THE FOREGOING, the petition is DENIED. The
Under the Omnibus Rules Implementing the Revised Administrative Decision rendered by the Court of Appeals on August 5, 2008 in CA-
Code and CSC Resolution No. 91-1631, a co-terminous appointment G.R. SP No. 88673 is AFFIRMED.
is defined as one "co-existing with the tenure of the appointing
authority or at his pleasure." Neither law nor jurisprudence draws SO ORDERED.
distinctions between appointments "co-existing with the term of the
appointing authority" on one hand, and one "co-existing with the
appointing authority's tenure" on the other. In the contrary, under the
aforecited rules, tenure and term are used rather loosely and
interchangeably.

In Ong's case, the issues needed to be disposed of revolve around

the concepts of temporary and co-terminous appointments. The
distinctions between term and tenure find no materiality in the instant
petition. Besides, whether or not the President's term ended on June
30, 2004 or her tenure ceased on June 30, 2010, the fact remains
that she appointed Bessat as Director III, in effect revoking Ong's
temporary and co-terminous appointment.
This Court recognizes Ong's lengthy service rendered to the
government and deeply commisserates with his earlier plight.
However, we cannot grant Ong the reliefs he sought as law and
jurisprudence clearly dictate that being a temporary and co-
terminous appointee, he had no vested rights over the position of
Director III.
G.R. No. 79974 December 17, 1987
ULPIANO P. SARMIENTO III AND JUANITO G. ARCILLA,
petitioners,
vs.
SALVADOR MISON, in his capacity as COMMISSIONER OF THE
BUREAU OF CUSTOMS, AND GUILLERMO CARAGUE, in his
capacity as SECRETARY OF THE DEPARTMENT OF BUDGET,
respondents, COMMISSION ON APPOINTMENTS, intervenor.
PADILLA, J.:

Once more the Court is called upon to delineate constitutional
boundaries. In this petition for prohibition, the petitioners, who are
taxpayers, lawyers, members of the Integrated Bar of the Philippines
and professors of Constitutional Law, seek to enjoin the respondent
Salvador Mison from performing the functions of the Office of
Commissioner of the Bureau of Customs and the respondent
Guillermo Carague, as Secretary of the Department of Budget, from
effecting disbursements in payment of Mison's salaries and
emoluments, on the ground that Mison's appointment as
Commissioner of the Bureau of Customs is unconstitutional by
reason of its not having been confirmed by the Commission on
Appointments. The respondents, on the other hand, maintain the
constitutionality of respondent Mison's appointment without the
confirmation of the Commission on Appointments.
Because of the demands of public interest, including the need for
stability in the public service, the Court resolved to give due course
to the petition and decide, setting aside the finer procedural
questions of whether prohibition is the proper remedy to test
respondent Mison's right to the Office of Commissioner of the Bureau
of Customs and of whether the petitioners have a standing to bring
this suit.
By the same token, and for the same purpose, the Court allowed the
Commission on Appointments to intervene and file a petition in
intervention. Comment was required of respondents on said petition.
The comment was filed, followed by intervenor's reply thereto. The
parties were also heard in oral argument on 8 December 1987.
This case assumes added significance because, at bottom line, it
involves a conflict between two (2) great departments of government,
the Executive and Legislative Departments. It also occurs early in the
life of the 1987 Constitution.
The task of the Court is rendered lighter by the existence of relatively
clear provisions in the Constitution. In cases like this, we follow what
the Court, speaking through Mr. Justice (later, Chief Justice) Jose
Abad Santos stated in Gold Creek Mining Corp. vs. Rodriguez, 1
that:
The fundamental principle of constitutional construction is to give
effect to the intent of the framers of the organic law and of the people
adopting it. The intention to which force is to be given is that which is
embodied and expressed in the constitutional provisions themselves.
The Court will thus construe the applicable constitutional provisions,
not in accordance with how the executive or the legislative
department may want them construed, but in accordance with what
they say and provide.
Section 16, Article VII of the 1987 Constitution says:

The President shall nominate and, with the consent of the
Commission on Appointments, appoint the heads of the executive
departments, ambassadors, other public ministers and consuls, or
officers of the armed forces from the rank of colonel or naval captain,
and other officers whose appointments are vested in him in this
Constitution. He shall also appoint all other officers of the
Government whose appointments are not otherwise provided for by
law, and those whom he may be authorized by law to appoint. The
Congress may, by law, vest the appointment of other officers lower in
rank in the President alone, in the courts, or in the heads of the
departments, agencies, commissions or boards.
The President shall have the power to make appointments during the
recess of the Congress, whether voluntary or compulsory, but such
appointments shall be effective only until disapproval by the
Commission on Appointments or until the next adjournment of the
Congress.
It is readily apparent that under the provisions of the 1987
Constitution, just quoted, there are four (4) groups of officers whom
the President shall appoint. These four (4) groups, to which we will
hereafter refer from time to time, are:
First, the heads of the executive departments, ambassadors, other
public ministers and consuls, officers of the armed forces from the
rank of colonel or naval captain, and other officers whose
appointments are vested in him in this Constitution; 2
Second, all other officers of the Government whose appointments
are not otherwise provided for by law; 3
Third, those whom the President may be authorized by law to
appoint;
Fourth, officers lower in rank 4 whose appointments the Congress
may by law vest in the President alone.
The first group of officers is clearly appointed with the consent of the
Commission on Appointments. Appointments of such officers are
initiated by nomination and, if the nomination is confirmed by the
Commission on Appointments, the President appoints. 5
The second, third and fourth groups of officers are the present bone
of contention. Should they be appointed by the President with or
without the consent (confirmation) of the Commission on
Appointments? By following the accepted rule in constitutional and
statutory construction that an express enumeration of subjects
excludes others not enumerated, it would follow that only those
appointments to positions expressly stated in the first group require
the consent (confirmation) of the Commission on Appointments. But
we need not rely solely on this basic rule of constitutional executive departments and bureaus, officers of the army from the
construction. We can refer to historical background as well as to the rank of colonel, of the Navy and Air Forces from the rank of captain
records of the 1986 Constitutional Commission to determine, with or commander, and all other officers of the Government whose
more accuracy, if not precision, the intention of the framers of the appointments are not herein otherwise provided for, and those whom
1987 Constitution and the people adopting it, on whether the he may be authorized by law to appoint; but the Congress may by
appointments by the President, under the second, third and fourth law vest the appointment of inferior officers, in the President alone, in
groups, require the consent (confirmation) of the Commission on the courts, or in the heads of departments.
Appointments. Again, in this task, the following advice of Mr. Chief
Justice J. Abad Santos in Gold Creek is apropos: (4) The President shall havethe power to make appointments
during the recess of the Congress, but such appointments shall be
In deciding this point, it should be borne in mind that a constitutional effective only until disapproval by the Commission on Appointments
provision must be presumed to have been framed and adopted in the or until the next adjournment of the Congress.
light and understanding of prior and existing laws and with reference
to them. "Courts are bound to presume that the people adopting a xxx xxx xxx
constitution are familiar with the previous and existing laws upon the
subjects to which its provisions relate, and upon which they express (7) ..., and with the consent of the Commission on
their judgment and opinion in its adoption." (Barry vs. Truax 13 N.D., Appointments, shall appoint ambassadors, other public ministers and
131; 99 N.W., 769,65 L. R. A., 762.) 6 consuls ...

It will be recalled that, under Sec. 10, Article VII of the 1935 Upon the other hand, the 1973 Constitution provides that-
Constitution, it is provided that —
Section 10. The President shall appoint the heads of bureaus and
xxx xxx xxx offices, the officers of the Armed Forces of the Philippines from the
rank of Brigadier General or Commodore, and all other officers of
(3) The President shall nominate and with the consent of the The government whose appointments are not herein otherwise
Commission on Appointments, shall appoint the heads of the provided for, and those whom he may be authorized by law to
appoint. However, the Batasang Pambansa may by law vest in the
Prime Minister, members of the Cabinet, the Executive Committee,
Courts, Heads of Agencies, Commissions, and Boards the power to
appoint inferior officers in their respective offices.
Thus, in the 1935 Constitution, almost all presidential appointments
required the consent (confirmation) of the Commission on
Appointments. It is now a sad part of our political history that the
power of confirmation by the Commission on Appointments, under
the 1935 Constitution, transformed that commission, many times,
into a venue of "horse-trading" and similar malpractices.
On the other hand, the 1973 Constitution, consistent with the
authoritarian pattern in which it was molded and remolded by
successive amendments, placed the absolute power of appointment
in the President with hardly any check on the part of the legislature.
Given the above two (2) extremes, one, in the 1935 Constitution and
the other, in the 1973 Constitution, it is not difficult for the Court to
state that the framers of the 1987 Constitution and the people
adopting it, struck a "middle ground" by requiring the consent
(confirmation) of the Commission on Appointments for the first group
of appointments and leaving to the President, without such
confirmation, the appointment of other officers, i.e., those in the
second and third groups as well as those in the fourth group, i.e.,
officers of lower rank.
The proceedings in the 1986 Constitutional Commission support this
conclusion. The original text of Section 16, Article VII, as proposed
by the Committee on the Executive of the 1986 Constitutional
Commission, read as follows:
Section 16. The president shall nominate and, with the consent of a
Commission on Appointment, shall appoint the heads of the
executive departments and bureaus, ambassadors, other public
ministers and consuls, or officers of the armed forces from the rank
of colonel or naval captain and all other officers of the Government
whose appointments are not otherwise provided for by law, and
those whom he may be authorized by law to appoint. The Congress
may by law vest the appointment of inferior officers in the President
alone, in the courts, or in the heads of departments 7 [Emphasis
supplied].
The above text is almost a verbatim copy of its counterpart provision
in the 1935 Constitution. When the frames discussed on the floor of
the Commission the proposed text of Section 16, Article VII, a feeling
was manifestly expressed to make the power of the Commission on
Appointments over presidential appointments more limited than that
held by the Commission in the 1935 Constitution. Thus-
Mr. Rama: ... May I ask that Commissioner Monsod be
recognized
The President: We will call Commissioner Davide later. THE PRESIDENT: Commissioner Foz is recognized

Mr. Monsod: With the Chair's indulgence, I just want to take a few MR. FOZ: Madam President, my proposed amendment is on
minutes of our time to lay the basis for some of the amendments that page 7, Section 16, line 26 which is to delete the words "and
I would like to propose to the Committee this morning. bureaus," and on line 28 of the same page, to change the phrase
'colonel or naval captain to MAJOR GENERAL OR REAR ADMIRAL.
xxx xxx xxx This last amendment which is co-authored by Commissioner de
Castro is to put a period (.) after the word ADMIRAL, and on line 29
On Section 16, I would like to suggest that the power of the of the same page, start a new sentence with: HE SHALL ALSO
Commission on Appointments be limited to the department heads, APPOINT, et cetera.
ambassadors, generals and so on but not to the levels of bureau
heads and colonels. MR. REGALADO: May we have the amendments one by one.
The first proposed amendment is to delete the words "and bureaus"
xxx xxx xxx 8 (Emphasis supplied.) on line 26.

In the course of the debates on the text of Section 16, there were two MR. FOZ: That is correct.
(2) major changes proposed and approved by the Commission.
These were (1) the exclusion of the appointments of heads of MR. REGALADO: For the benefit of the other Commissioners,
bureaus from the requirement of confirmation by the Commission on what would be the justification of the proponent for such a deletion?
Appointments; and (2) the exclusion of appointments made under the
second sentence 9 of the section from the same requirement. The MR. FOZ: The position of bureau director is actually quite low
records of the deliberations of the Constitutional Commission show in the executive department, and to require further confirmation of
the following: presidential appointment of heads of bureaus would subject them to
political influence.
MR. ROMULO: I ask that Commissioner Foz be recognized
MR. REGALADO: The Commissioner's proposed amendment
by deletion also includes regional directors as distinguished from THE PRESIDENT: Is this clear now? What is the reaction of the
merely staff directors, because the regional directors have quite a Committee?
plenitude of powers within the regions as distinguished from staff
directors who only stay in the office. xxx xxx xxx

MR. FOZ: Yes, but the regional directors are under the MR. REGALADO: Madam President, the Committee feels that
supervisiopn of the staff bureau directors. this matter should be submitted to the body for a vote.

xxx xxx xxx MR. DE CASTRO: Thank you.

MR. MAAMBONG: May I direct a question to Commissioner MR. REGALADO: We will take the amendments one by one.
Foz? The Commissioner proposed an amendment to delete 'and We will first vote on the deletion of the phrase 'and bureaus on line
bureaus on Section 16. Who will then appoint the bureau directors if 26, such that appointments of bureau directors no longer need
it is not the President? confirmation by the Commission on Appointment.

MR. FOZ: It is still the President who will appoint them but their Section 16, therefore, would read: 'The President shall nominate,
appointment shall no longer be subject to confirmation by the and with the consent of a Commission on Appointments, shall
Commission on Appointments. appoint the heads of the executive departments, ambassadors. . . .

MR. MAAMBONG: In other words, it is in line with the same THE PRESIDENT: Is there any objection to delete the phrase
answer of Commissioner de Castro? 'and bureaus' on page 7, line 26? (Silence) The Chair hears none;
the amendments is approved.
MR. FOZ: Yes.
xxx xxx xxx
MR. MAAMBONG: Thank you.
MR. ROMULO: Madam President.
FR. BERNAS: It is a little vague.
THE PRESIDENT: The Acting Floor Leader is recognized.
MR. DAVIDE: In other words, there are positions provided for in the
THE PRESIDENT: Commissioner Foz is recognized Constitution whose appointments are vested in the President, as a
matter of fact like those of the different constitutional commissions.
MR. FOZ: Madam President, this is the third proposed
amendment on page 7, line 28. 1 propose to put a period (.) after FR. BERNAS: That is correct. This list of officials found in Section
'captain' and on line 29, delete 'and all' and substitute it with HE 16 is not an exclusive list of those appointments which
SHALL ALSO APPOINT ANY. constitutionally require confirmation of the Commission on
Appointments,
MR. REGALADO: Madam President, the Committee accepts
the proposed amendment because it makes it clear that those other MR. DAVIDE: That is the reason I seek the incorporation of the
officers mentioned therein do not have to be confirmed by the words I proposed.
Commission on Appointments.
FR. BERNAS: Will Commissioner Davide restate his proposed
MR. DAVIDE: Madam President. amendment?

THE PRESIDENT: Commissioner Davide is recognized. MR. DAVIDE: After 'captain,' add the following: AND OTHER
OFFICERS WHOSE APPOINTMENTS ARE VESTED IN HIM IN
xxx xxx xxx THIS CONSTITUTION.

MR. DAVIDE: So would the proponent accept an amendment to his FR. BERNAS: How about:"AND OTHER OFFICERS WHOSE
amendment, so that after "captain" we insert the following words: APPOINTMENTS REQUIRE CONFIRMATION UNDER THIS
AND OTHER OFFICERS WHOSE APPOINTMENTS ARE VESTED CONSTITUTION"?
IN HIM IN THIS CONSTITUTION?
MR. DAVIDE: Yes, Madam President, that is modified by the It is, therefore, clear that appointments to the second and third
Committee. groups of officers can be made by the President without the consent
(confirmation) of the Commission on Appointments.
FR. BERNAS: That will clarify things.
It is contended by amicus curiae, Senator Neptali Gonzales, that the
THE PRESIDENT: Does the Committee accept? second sentence of Sec. 16, Article VII reading-

MR. REGALADO: Just for the record, of course, that excludes He (the President) shall also appoint all other officers of the
those officers which the Constitution does not require confirmation by Government whose appointments are not otherwise provided for by
the Commission on Appointments, like the members of the judiciary law and those whom he may be authorized by law to appoint . . . .
and the Ombudsman. (Emphasis supplied)

MR. DAVIDE: That is correct. That is very clear from the with particular reference to the word "also," implies that the President
modification made by Commissioner Bernas. shall "in like manner" appoint the officers mentioned in said second
sentence. In other words, the President shall appoint the officers
THE PRESIDENT: So we have now this proposed amendment mentioned in said second sentence in the same manner as he
of Commissioners Foz and Davide. appoints officers mentioned in the first sentence, that is, by
nomination and with the consent (confirmation) of the Commission
xxx xxx xxx on Appointments.

THE PRESIDENT: Is there any objection to this proposed
amendment of Commissioners Foz and Davide as accepted by the
Committee? (Silence) The Chair hears none; the amendment, as
amended, is approved 10 (Emphasis supplied).
Amicus curiae's reliance on the word "also" in said second sentence
is not necessarily supportive of the conclusion he arrives at. For, as
the Solicitor General argues, the word "also" could mean "in addition;
as well; besides, too" (Webster's International Dictionary, p. 62, 1981
edition) which meanings could, on the contrary, stress that the word
"also" in said second sentence means that the President, in addition
to nominating and, with the consent of the Commission on
Appointments, appointing the officers enumerated in the first
sentence, can appoint (without such consent (confirmation) the
officers mentioned in the second sentence-
Rather than limit the area of consideration to the possible meanings
of the word "also" as used in the context of said second sentence,
the Court has chosen to derive significance from the fact that the first
sentence speaks of nomination by the President and appointment by
the President with the consent of the Commission on Appointments,
whereas, the second sentence speaks only of appointment by the
President. And, this use of different language in two (2) sentences
proximate to each other underscores a difference in message
conveyed and perceptions established, in line with Judge Learned
Hand's observation that "words are not pebbles in alien juxtaposition"
but, more so, because the recorded proceedings of the 1986
Constitutional Commission clearly and expressly justify such
differences.
As a result of the innovations introduced in Sec. 16, Article VII of the
1987 Constitution, there are officers whose appointments require no
confirmation of the Commission on Appointments, even if such
officers may be higher in rank, compared to some officers whose
appointments have to be confirmed by the Commission on
Appointments under the first sentence of the same Sec. 16, Art. VII.
Thus, to illustrate, the appointment of the Central Bank Governor
requires no confirmation by the Commission on Appointments, even
if he is higher in rank than a colonel in the Armed Forces of the
Philippines or a consul in the Consular Service.
But these contrasts, while initially impressive, merely underscore the
purposive intention and deliberate judgment of the framers of the
1987 Constitution that, except as to those officers whose
appointments require the consent of the Commission on
Appointments by express mandate of the first sentence in Sec. 16,
Art. VII, appointments of other officers are left to the President
without need of confirmation by the Commission on Appointments.
This conclusion is inevitable, if we are to presume, as we must, that
the framers of the 1987 Constitution were knowledgeable of what
they were doing and of the foreseable effects thereof.
Besides, the power to appoint is fundamentally executive or
presidential in character. Limitations on or qualifications of such
power should be strictly construed against them. Such limitations or
qualifications must be clearly stated in order to be recognized. But, it
is only in the first sentence of Sec. 16, Art. VII where it is clearly
stated that appointments by the President to the positions therein
enumerated require the consent of the Commission on
Appointments.
As to the fourth group of officers whom the President can appoint,
the intervenor Commission on Appointments underscores the third
sentence in Sec. 16, Article VII of the 1987 Constitution, which reads:
The Congress may, by law, vest the appointment of other officers
lower in rank in the President alone, in the courts, or in the heads of
departments, agencies, commissions, or boards. [Emphasis
supplied].
and argues that, since a law is needed to vest the appointment of
lower-ranked officers in the President alone, this implies that, in the
absence of such a law, lower-ranked officers have to be appointed
by the President subject to confirmation by the Commission on
Appointments; and, if this is so, as to lower-ranked officers, it follows
that higher-ranked officers should be appointed by the President,
subject also to confirmation by the Commission on Appointments.
The respondents, on the other hand, submit that the third sentence
of Sec. 16, Article VII, abovequoted, merely declares that, as to
lower-ranked officers, the Congress may by law vest their
appointment in the President, in the courts, or in the heads of the
various departments, agencies, commissions, or boards in the
government. No reason however is submitted for the use of the word
"alone" in said third sentence.
The Court is not impressed by both arguments. It is of the considered
opinion, after a careful study of the deliberations of the 1986
Constitutional Commission, that the use of the word alone" after the
word "President" in said third sentence of Sec. 16, Article VII is, more
than anything else, a slip or lapsus in draftmanship. It will be recalled
that, in the 1935 Constitution, the following provision appears at the
end of par. 3, section 1 0, Article VII thereof —
...; but the Congress may by law vest the appointment of inferior
officers, in the President alone, in the courts, or in the heads of
departments. [Emphasis supplied].
The above provision in the 1935 Constitution appears immediately
after the provision which makes practically all presidential
appointments subject to confirmation by the Commission on
Appointments, thus-
3. The President shall nominate and with the consent of the
Commission on Appointments, shall appoint the heads of the
executive departments and bureaus, officers of the Army from the
rank of colonel, of the Navy and Air Forces from the rank of captain
or commander, and all other officers of the Government whose
appointments are not herein provided for, and those whom he may
be authorized by law to appoint; ...
In other words, since the 1935 Constitution subjects, as a general
rule, presidential appointments to confirmation by the Commission on
Appointments, the same 1935 Constitution saw fit, by way of an
exception to such rule, to provide that Congress may, however, by
law vest the appointment of inferior officers (equivalent to 11 officers
lower in rank" referred to in the 1987 Constitution) in the President
alone, in the courts, or in the heads of departments,
In the 1987 Constitution, however, as already pointed out, the clear
and expressed intent of its framers was to exclude presidential
appointments from confirmation by the Commission on
Appointments, except appointments to offices expressly mentioned
in the first sentence of Sec. 16, Article VII. Consequently, there was
no reason to use in the third sentence of Sec. 16, Article VII the word
"alone" after the word "President" in providing that Congress may by
law vest the appointment of lower-ranked officers in the President
alone, or in the courts, or in the heads of departments, because the
power to appoint officers whom he (the President) may be authorized
by law to appoint is already vested in the President, without need of
confirmation by the Commission on Appointments, in the second
sentence of the same Sec. 16, Article VII.
Therefore, the third sentence of Sec. 16, Article VII could have stated
merely that, in the case of lower-ranked officers, the Congress may
by law vest their appointment in the President, in the courts, or in the
heads of various departments of the government. In short, the word
"alone" in the third sentence of Sec. 16, Article VII of the 1987
Constitution, as a literal import from the last part of par. 3, section 10,
Article VII of the 1935 Constitution, appears to be redundant in the
light of the second sentence of Sec. 16, Article VII. And, this
redundancy cannot prevail over the clear and positive intent of the
framers of the 1987 Constitution that presidential appointments,
except those mentioned in the first sentence of Sec. 16, Article VII,
are not subject to confirmation by the Commission on Appointments.
Coming now to the immediate question before the Court, it is evident
that the position of Commissioner of the Bureau of Customs (a
bureau head) is not one of those within the first group of
appointments where the consent of the Commission on
Appointments is required. As a matter of fact, as already pointed out,
while the 1935 Constitution includes "heads of bureaus" among
those officers whose appointments need the consent of the
Commission on Appointments, the 1987 Constitution on the other
hand, deliberately excluded the position of "heads of bureaus" from
appointments that need the consent (confirmation) of the
Commission on Appointments.
Moreover, the President is expressly authorized by law to appoint the
Commissioner of the Bureau of Customs. The original text of Sec.
601 of Republic Act No. 1937, otherwise known as the Tariff and
Customs Code of the Philippines, which was enacted by the
Congress of the Philippines on 22 June 1957, reads as follows:

601. Chief Officials of the Bureau.-The Bureau of Customs shall
have one chief and one assistant chief, to be known respectively as
the Commissioner (hereinafter known as the 'Commissioner') and
Assistant Commissioner of Customs, who shall each receive an
annual compensation in accordance with the rates prescribed by
existing laws. The Assistant Commissioner of Customs shall be
appointed by the proper department head.
Sec. 601 of Republic Act No. 1937, was amended on 27 October
1972 by Presidential Decree No. 34, amending the Tariff and
Customs Code of the Philippines. Sec. 601, as thus amended, now
reads as follows:
Sec. 601. Chief Officials of the Bureau of Customs.-The
Bureau of Customs shall have one chief and one assistant chief, to
be known respectively as the Commissioner (hereinafter known as
Commissioner) and Deputy Commissioner of Customs, who shall
each receive an annual compensation in accordance with the rates
prescribed by existing law. The Commissioner and the Deputy
Commissioner of Customs shall be appointed by the President of the
Philippines (Emphasis supplied.)
Of course, these laws (Rep. Act No. 1937 and PD No. 34) were
approved during the effectivity of the 1935 Constitution, under which
the President may nominate and, with the consent of the
Commission on Appointments, appoint the heads of bureaus, like the
Commissioner of the Bureau of Customs.
After the effectivity of the 1987 Constitution, however, Rep. Act No.
1937 and PD No. 34 have to be read in harmony with Sec. 16, Art.
VII, with the result that, while the appointment of the Commissioner
of the Bureau of Customs is one that devolves on the President, as
an appointment he is authorizedby law to make, such appointment,
however, no longer needs the confirmation of the Commission on
Appointments.
Consequently, we rule that the President of the Philippines acted
within her constitutional authority and power in appointing
respondent Salvador Mison, Commissioner of the Bureau of
Customs, without submitting his nomination to the Commission on
Appointments for confirmation. He is thus entitled to exercise the full
authority and functions of the office and to receive all the salaries
and emoluments pertaining thereto.
WHEREFORE, the petition and petition in intervention should be, as
they are, hereby DISMISSED. Without costs.
SO ORDERED.

G.R. No. 107369 August 11, 1999
JESULITO A. MANALO, petitioner,
vs.
PEDRO G. SISTOZA, REGINO ARO III, NICASIO MA. CUSTODIO,
GUILLERMO DOMONDON, RAYMUNDO L. LOGAN, WILFREDO R.
REOTUTAR, FELINO C. PACHECO, JR., RUBEN J. CRUZ,
GERONIMO B. VALDERRAMA, MERARDO G. ABAYA, EVERLINO
B. NARTATEZ, ENRIQUE T. BULAN, PEDRO J. NAVARRO,
DOMINADOR M. MANGUBAT, RODOLFO M. GARCIA and
HONORABLE SALVADOR M. ENRIQUEZ II In His Capacity as
Secretary of Budget and Management, respondents.
PURISIMA, J.:
The case at bar is not of first impression. The issue posed
concerning the limits of the power of the Commission on
Appointments to confirm appointments issued by the Chief Executive
has been put to rest in a number of cases. The court finds no basis
for departing from the ruling laid down in those cases.
In this special civil action for Prohibition under Rule 65 of the Revised
Rules of Court, petitioners question the constitutionality and legality
of the permanent appointments issued by former President Corazon
C. Aquino to the respondent senior officers of the Philippine National
Police who were promoted to the ranks of Chief Superintendent and
Director without their appointments submitted to the Commission on
Appointments for confirmation under Section 16, Article VII of the
1987 Constitution and Republic Act 6975 otherwise known as the
Local Government Act of 1990. Impleaded in the case is the former
Secretary of Budget and Management Salvador M. Enriquez III, who
approved and effected the disbursements for the salaries and other
emoluments of subject police officers.1âwphi1.nêt
The antecedents facts are as follows:
On December 13, 1990, Republic Act 6975 creating the Department
of Interior and Local Government was signed into law by former
President Corazon C. Aquino. Pertinent provisions of the said Act
read:
Sec. 26. Powers, Functions and Term of Office of the PNP Chief. —
The command and direction of the PNP shall be vested in the Chief
of the PNP who shall have the power to direct and control tactical as
well as strategic movements, deployment, placement, utilization of
the PNP or any of its units and personal, including its equipment,
facilities and other resources. Such command and direction of the
Chief of the PNP may be delegated to subordinate officials with
respect to the units under their respective commands, in accordance
with the rules and regulations prescribed by the Commission. The
Chief of the PNP shall also have the power to issue detailed
implementing policies and instructions regarding personnel, funds,
properties, records, correspondence and such other matters as may
be necessary to effectively carry out the functions, powers and duties
of the Bureau. The Chief of the PNP shall be appointed by the
President from among the senior officers down to the rank of the
chief superintendent, subject to confirmation by the Commission on
Appointments: Provided, That the Chief of the PNP shall serve a
term of office not to exceed four (4) years: Provided, further, That in
times of war or other national emergency declared by Congress, the
President may extend such term of office."1 (emphasis supplied).
Sec. 31. Appointment of PNP Officers and Members. — The
appointment of the officers and members of the PNP shall be
effected in the following manner:
(a) Police Officer I to Senior Police Officer IV — Appointed by the
PNP regional director for regional personnel or by the Chief of the
PNP for the national headquarters personnel and attested by the
Civil Service Commission;
(b) Inspector to Superintendent — Appointed by the Chief of the
PNP, as recommended by their immediate superiors, and attested by
the Civil Service Commission;
(c) Senior Superintendent to Deputy Director General — Appointed
by the President upon recommendation of the Chief of the PNP, with
the proper endorsement by the Chairman of the Civil Service
Commission and subject to confirmation by the Commission on
Appointments; and
(d) Director General — Appointed by the President from among the
senior officers down to the rank of chief superintendent in the
service, subject to confirmation by the Commission on Appointments;
Provided, That the Chief of the PNP shall serve a tour of duty not to
exceed four (4) years; Provided, further, That, in times of war or
other national emergency declared by Congress, the President may
extend such tour of duty. (emphasis supplied).
In accordance therewith, on March 10, 1992, the President of the
Philippines, through then Executive Secretary Franklin M. Drilon,
promoted the fifteen (15) respondent police officers herein, by
appointing them to positions in the Philippine National Police with the
rank of Chief Superintendent to
Director2, namely:
Chief Supt. PEDRO G. SISTOZA Director Budget and Management, under the then Secretary Salvador M.
Chief Supt. REGINO ARO III Director Enriquez III, authorized disbursements for their salaries and other
Chief Supt. NICASIO MA. CUSTODIO Director emoluments.
Chief Supt. GUILLERMO DOMONDON Director
Chief Supt. RAYMUNDO L. LOGAN Director On October 21, 1992, the petitioner brought before this Court this
Senior Supt. WILFREDO REOTUTAR Chief Superintendent present original petition for prohibition, as a taxpayer suit, to assail
Senior Supt. FELINO C. PACHECO, JR.Chief Superintendent the legality of subject appointments and disbursements made
Senior Supt. RUBEN J. CRUZ Chief Superintendent therefor.
Senior Supt. GERONIMO B. VALDERRAMA Chief
Superintendent Petitioner contends that:
Senior Supt. MERARDO G. ABAYA Chief Superintendent
Senior Supt. EVERLINO NARTATEZ Chief Superintendent I. Respondent officers, in assuming their offices and discharging the
Senior Supt. ENRIQUE T. BULAN Chief Superintendent functions attached thereto, despite their invalid appointments, in view
Senior Supt. PEDRO J. NAVARRO Chief Superintendent of the failure to secure the required confirmation of the Commission
Senior Supt. DOMINADOR MANGUBATChief Superintendent on Appointments as required by the Constitution and the law, are
Senior Supt. RODOLFO M. GARCIA Chief Superintendent acting without or in excess of their jurisdiction or with grave abuse of
The appointments of respondent police officers were in a permanent discretion, considering that:
capacity. Their letters of appointment stated in part:
A. Republic Act 6975 is a valid law that duly requires confirmation of
By virtue hereof, they may qualify and enter upon the performance of the appointments of officers from the rank of senior superintendent
the duties of the office, furnishing this office and the Civil Service and higher by the Commission on Appointments.
Commission with copies of their oath of office.3
B. The Philippine National Police is akin to the Armed Forces where
Without their names submitted to the Commission on Appointments the Constitution specifically requires confirmation by the Commission
for confirmation, the said police officers took their oath of office and on Appointments.
assumed their respective positions. Thereafter, the Department of
II. Respondent Secretary in allowing and/or effecting disbursements
in favor of respondent officers despite the unconstitutionality and
illegality of their appointments is acting without or in excess of his
jurisdiction or with grave abuse of discretion.
The petition must fail. It is not impressed with merit.
Petitioner theorizes that Republic Act 6975 enjoys the presumption of
constitutionality and that every statute passed by Congress is
presumed to have been carefully studied and considered before its
enactment. He maintains that the respect accorded to each
department of the government requires that the court should avoid,
as much as possible, deciding constitutional questions.
The Court agrees with petitioner. However, it is equally demanded
from the courts, as guardians of the Constitution, to see to it that
every law passed by Congress is not repugnant to the organic law.
Courts have the inherent authority to determine whether a statute
enacted by the legislature transcends the limit delineated by the
fundamental law.4 When it does, the courts will not hesitate to strike
down such unconstitutional law.
The power to make appointments is vested in the Chief Executive by
Section 16, Article VII of the Constitution, which provides:
Sec. 16. The President shall nominate and, with the consent
of the Commission on Appointments, appoint the heads of the
executive departments, ambassadors, other public ministers and
consuls, or officers of the armed forces from the rank of colonel or
naval captain, and other officers whose appointments are vested in
him in this Constitution. He shall also appoint all other officers of the
Government whose appointments are not otherwise provided for by
law, and those whom he may be authorized by law to appoint. The
Congress may, by law, vest the appointment of other officers lower in
rank in the President alone, in the courts, or in the heads of
departments, agencies, commissions, or boards.
The President shall have the power to make appointments during the
recess of the Congress, whether voluntary or compulsory, but such
appointments shall be effective only until disapproval by the
Commission on Appointments or until the next adjournment of the
Congress.
The aforecited provision of the Constitution has been the subject of
several cases on the issue of the restrictive function of the
Commission on Appointments with respect to the appointing power
of the President. This court touched upon the historical antecedent of
the said provision in the case of Sarmiento III vs. Mison5 in which it
was ratiocinated upon that Section 16 of Article VII of the 1987
Constitution requiring confirmation by the Commission on
Appointments of certain appointments issued by the President
contemplates a system of checks and balances between the
executive and legislative branches of government. Experience
showed that when almost all presidential appointments required the
consent of the Commission on Appointments, as was the case under
the 1935 Constitution, the commission became a venue of "horse-
trading" and similar malpractices.6 On the other hand, placing
absolute power to make appointments in the President with hardly
any check by the legislature, as what happened under 1973
Constitution, leads to abuse of such power. Thus was perceived the
need to establish a "middle ground" between the 1935 and 1973
Constitutions. The framers of the 1987 Constitution deemed it
imperative to subject certain high positions in the government to the
power of confirmation of the Commission on Appointments and to
allow other positions within the exclusive appointing power of the
President.1âwphi1.nêt
Conformably, as consistently interpreted and ruled in the leading
case of Sarmiento III vs. Mison 7, and in the subsequent cases of
Bautista vs. Salonga 8, Quintos-Deles vs. Constitutional
Commission9, and Calderon vs. Carale10; under Section 16, Article
VII, of the Constitution, there are four groups of officers of the
government to be appointed by the President:
First, the heads of the executive departments, ambassadors, other
public ministers and consuls, officers of the armed forces from the
rank of colonel or naval captain, and other officers whose
appointments are vested in him in this Constitution;
Second, all other officers of the Government whose appointments
are not otherwise provided for by law;
Third, those whom the President may be authorized by law to
appoint;
Fourth, officers lower in rank whose appointments the Congress may
by law vest in the President alone.
It is well-settled that only presidential appointments belonging to the
first group require the confirmation by the Commission on
Appointments. The appointments of respondent officers who are not
within the first category, need not be confirmed by the Commission
on Appointments. As held in the case of Tarrosa vs. Singson11
Congress cannot by law expand the power of confirmation of the
Commission on Appointments and require confirmation of
appointments of other government officials not mentioned in the first
sentence of Section 16 of Article VII of the 1987 Constitution.
Consequently, unconstitutional are Sections 26 and 31 of Republic
Act 6975 which empower the Commission on Appointments to
confirm the appointments of public officials whose appointments are
not required by the Constitution to be confirmed. But the
unconstitutionality of the aforesaid sections notwithstanding, the rest
of Republic Act 6975 stands. It is well-settled that when provisions of
law declared void are severable from the main statute and the
removal of the unconstitutional provisions would not affect the validity
and enforceability of the other provisions, the statute remains valid
without its voided sections.12
It is petitioner's submission that the Philippine National Police is akin
to the Armed Forces of the Philippines and therefore, the
appointments of police officers whose rank is equal to that of colonel
or naval captain require confirmation by the Commission on
Appointments.
This contention is equally untenable. The Philippine National Police
is separate and distinct from the Armed Forces of the Philippines.
The Constitution, no less, sets forth the distinction. Under Section 4
of Article XVI of the 1987 Constitution,
The Armed Forces of the Philippines shall be composed of a citizen
armed force which shall undergo military training and service, as may
be provided by law. It shall keep a regular force necessary for the
security of the State.
On the other hand, Section 6 of the same Article of the Constitution
ordains that:
The State shall establish and maintain one police force, which shall
be national in scope and civilian in character to be administered and
controlled by a national police commission. The authority of local
executives over the police units in their jurisdiction shall be provided
by law.
To so distinguish the police force from the armed forces, Congress
enacted Republic Act 6975 which states in part:
Sec. 2. Declaration of policy. — It is hereby declared to be the policy
of the State to promote peace and order, ensure public safety and
further strengthen local government capability aimed towards the
effective delivery of the basic services to the citizenry through the
establishment of a highly efficient and competent police force that is
national in scope and civilian in character. . . .
The policy force shall be organized, trained and equipped primarily
for the performance of police functions. Its national scope and civilian
character shall be paramount. No element of the police force shall be
military nor shall any position thereof be occupied by active members
of the Armed Forces of the Philippines.
Thereunder, the police force is different from and independent of the
armed forces and the ranks in the military are not similar to those in
the Philippine National Police. Thus, directors and chief
superintendents of the PNP, such as the herein respondent police
officers, do not fall under the first category of presidential appointees Without prejudice to the subsequent promulgation of more extended
requiring the confirmation by the Commission on Appointments. opinion, the Court adopted today, the following resolutions: .

In view of the foregoing disquisition and conclusion, the respondent On December 29, 1961, then President Carlos P. Garcia appointed
former Secretary Salvador M. Enriquez III of the Department of Dominador R. Aytona as ad interim Governor of the Central Bank.
Budget and Management, did not act with grave abuse of discretion On the same day, the latter took the corresponding oath.
in authorizing and effecting disbursements for the salaries and other
emoluments of the respondent police officers whose appointments On December 30, 1961, at noon, President-elect Diosdado
are valid. Macapagal assumed office; and on December 31, 1961, he issued
Administrative Order No. 2 recalling, withdrawing, and cancelling all
WHEREFORE, for lack of merit, the petition under consideration is ad interim appointment made by President Garcia after December
hereby DISMISSED. No pronouncement as to costs.1âwphi1.nêt 13, 1961, (date when he, Macapagal, had been proclaimed elected
by the Congress). On January 1, 1962, President Macapagal
SO ORDERED. appointed Andres V. Castillo as ad interim Governor of the Central
Bank, and the latter qualified immediately.
G.R. No. L-19313 January 19, 1962
On January 2, 1962, both appointed exercised the powers of their
DOMINADOR R. AYTONA, petitioner, office, although Castillo informed Aytona of his title thereto; and
vs. some unpleasantness developed in the premises of the Central
ANDRES V. CASTILLO, ET AL., respondents. Bank. However, the next day and thereafter, Aytona was definitely
prevented from holding office in the Central Bank.
R E S O L U T I O N.
So, he instituted this proceeding which is practically, a quo warranto,
BENGZON, C.J.: challenging Castillo's right to exercise the powers of Governor of the
Central Bank. Aytona claims he was validly appointed, had qualified
for the post, and therefore, the subsequent appointment and
qualification of Castillo was void, because the position was then
occupied by him. Castillo replies that the appointment of Aytona had
been revoked by Administrative Order No. 2 of Macapagal; and so,
the real issue is whether the new President had power to issue the
order of cancellation of the ad interim appointments made by the
past President, even after the appointees had already
qualified.1äwphï1.ñët
The record shows that President Garcia sent to the Commission on
Appointments — which was not then in session — a communication
dated December 29, 1961, submitting "for confirmation" ad interim
appointments of assistant director of lands, councilors, mayors,
members of the provincial boards, fiscals, justices of the peace,
officers of the army, etc.; and the name of Dominador R. Aytona as
Governor of the Central Bank occupies number 45, between a justice
of the peace and a colonel of the Armed Forces.
Another communication of President Garcia bearing the same date,
submitted a list of ad interim appointments of Foreign Affairs officers,
judges, fiscals, chiefs of police, justices of the peace, mayors,
councilors, etc. number 63 of which was that of Dominador R. Aytona
for Governor of the Philippines in the Boards of International
Monetary Fund, International Bank for Reconstruction and
Development, etc.
A third communication likewise dated December 29, 1961,
addressed to the Commission on Appointments submitted for
confirmation 124 names of persons appointed as judges of first
instance, members of provincial boards, and boards of government
corporations, fiscals, justice of the peace, even one associate justice
of this Court occupying position No. 8 and two associate justices of
the Court of Appeals (9 and 10) between an assistant of the Solicitor-
General's Office, and the chairman of the board of tax appeals of
Pasay City, who in turn are followed by judges of first instance, and
inserted between the latter is the name of another associate justice
of the Court of Appeals.
There were other appointments thus submitted by President Garcia
on that date, December 29, 1961. All in all, about three hundred fifty
(350) "midnight" or "last minute" appointments.
In revoking the appointments, President Macapagal is said to have
acted for these and other reasons: (1) the outgoing President should
have refrained from filling vacancies to give the new President
opportunity to consider names in the light of his new policies, which
were approved by the electorate in the last elections; (2) these
scandalously hurried appointments in mass do not fall within the
intent and spirit of the constitutional provision authorizing the
issuance of ad interim appointments; (3) the appointments were
irregular, immoral and unjust, because they were issued only upon
the condition that the appointee would immediately qualify obviously
to prevent a recall or revocation by the incoming President, with the
result that those deserving of promotion or appointment who
preferred to be named by the new President declined and were by-
passed; and (4) the abnormal conditions surrounding the
appointment and qualifications evinced a desire on the part of the
outgoing President merely subvert the policies of the incoming
administration.
It is admitted that many of the persons mentioned in the
communication to the Commission on Appointments dated
December 29, 1961, did not qualify. There is evidence that in the
night of December 29, there was a scramble in Malacañan of
candidates for positions trying to get their written appointments or
having such appointments changed to more convenient places, after
some last minute bargaining. There was unusual hurry in the
issuance of the appointments — which were not coursed through the
Department Heads — and in the confusion, a woman appointed
judge was designated "Mr." and a man was designated "Madam."
One appointee who got his appointment and was required to qualify,
resorted to the rush of asking permission to swear before a relative
official, and then never qualified.
We are informed, it is Malacañan's practice — which we find to be
logical — to submit ad interim appointments only when the
Commission on Appointments is in session. One good reason for the
practice is that only those who have accepted the appointment and
qualified are submitted for confirmation. Nevertheless, this time,
Malacañan submitted its appointments on the same day they were
issued; and the Commission was not then in session; obviously
because it foresaw the possibility that the incoming President would
refuse to submit later the appointees of his predecessor. As a result,
as already adverted to, some persons whose names were submitted
for confirmation had not qualified nor accepted their appointments.
Because of the haste and irregularities, some judges of first instance
qualified for districts wherein no vacancies existed, because the
incumbents had not qualified for other districts to which they had
been supposedly transferred or promoted.
Referring specifically to judges who had not qualified, the course of
conduct adopted by Former Chief Justice Moran is cited. Being
ambassador in Spain and desiring to return to this Court even as
associate justice, Moran was tendered an ad interim appointment
thereto by President Quirino, after the latter had lost the election to
President Magsaysay, and before leaving the Presidency. Said
Ambassador declined to qualify being of the opinion that the matter
should be left to the incoming newly-elected President.
Of course, nobody will assert that President Garcia ceased to be
such earlier than at noon of December 30, 1961. But it is common
sense to believe that after the proclamation of the election of
President Macapagal, his was no more than a "care-taker"
administration. He was duty bound to prepare for the orderly transfer
of authority the incoming President, and he should not do acts which
he ought to know, would embarrass or obstruct the policies of his
successor. The time for debate had passed; the electorate had
spoken. It was not for him to use powers as incumbent President to
continue the political warfare that had ended or to avail himself of
presidential prerogatives to serve partisan purposes. The filling up
vacancies in important positions, if few, and so spaced to afford
some assurance of deliberate action and careful consideration of the
need for the appointment and the appointee's qualifications may
undoubtedly be permitted. But the issuance of 350 appointments in
one night and planned induction of almost all of them a few hours
before the inauguration of the new President may, with some reason,
be regarded by the latter as an abuse Presidential prerogatives, the
steps taken being apparently a mere partisan effort to fill all vacant
positions1 irrespective of fitness and other conditions, and thereby
deprive the new administration of an opportunity to make the
corresponding appointments.
Normally, when the President makes appointments the consent of
the Commission on Appointments, he has benefit of their advice.
When he makes ad interim appointments, he exercises a special
prerogative and is bound to be prudent to insure approval of his
selection either previous consultation with the members of the
Commission or by thereafter explaining to them the reason such
selection. Where, however, as in this case, the Commission on
Appointments that will consider the appointees is different from that
existing at the time of the appointment2 and where the names are to
be submitted by successor, who may not wholly approve of the
selections, the President should be doubly careful in extending such
appointments. Now, it is hard to believe that in signing 350
appointments in one night, President Garcia exercised such "double
care" which was required and expected of him; and therefore, there
seems to be force to the contention that these appointments fall
beyond the intent and spirit of the constitutional provision granting to
the Executive authority to issue ad interim appointments.
Under the circumstances above described, what with the separation
of powers, this Court resolves that it must decline to disregard the
Presidential Administrative Order No. 2, cancelling such "midnight" or
"last-minute" appointments.
Of course, the Court is aware of many precedents to the effect that
once an appointment has been issued, it cannot be reconsidered,
specially where the appointee has qualified. But none of them refer
to mass ad interim appointments (three-hundred and fifty), issued in
the last hours of an outgoing Chief Executive, in a setting similar to
that outlined herein. On the other hand, the authorities admit of
exceptional circumstances justifying revocation3 and if any
circumstances justify revocation, those described herein should fit
the exception.
Incidentally, it should be stated that the underlying reason for VELASCO, JR., J.:
denying the power to revoke after the appointee has qualified is the
latter's equitable rights. Yet it is doubtful if such equity might be In this Petition for Certiorari and Prohibition under Rule 65, Dennis A.
successfully set up in the present situation, considering the rush B. Funa challenges the constitutionality of the appointment of
conditional appointments, hurried maneuvers and other happenings Reynaldo A. Villar as Chairman of the Commission on Audit and
detracting from that degree of good faith, morality and propriety accordingly prays that a judgment issue "declaring the
which form the basic foundation of claims to equitable relief. The unconstitutionality" of the appointment.
appointees, it might be argued, wittingly or unwittingly cooperated
with the stratagem to beat the deadline, whatever the resultant The facts of the case are as follows:
consequences to the dignity and efficiency of the public service.
Needless to say, there are instances wherein not only strict legality, On February 15, 2001, President Gloria Macapagal-Arroyo
but also fairness, justice and righteousness should be taken into (President Macapagal-Arroyo) appointed Guillermo N. Carague
account. (Carague) as Chairman of the Commission on Audit (COA) for a term
of seven (7) years, pursuant to the 1987 Constitution.1 Carague’s
WHEREFORE, the Court exercising its judgment and discretion in term of office started on February 2, 2001 to end on February 2,
the matter, hereby dismiss the action, without costs. 2008.

G.R. No. 192791 April 24, 2012 Meanwhile, on February 7, 2004, President Macapagal-Arroyo
appointed Reynaldo A. Villar (Villar) as the third member of the COA
DENNIS A. B. FUNA, Petitioner, for a term of seven (7) years starting February 2, 2004 until February
vs. 2, 2011.
THE CHAIRMAN, COMMISSION ON AUDIT, REYNALDO A.
VILLAR, Respondent. Following the retirement of Carague on February 2, 2008 and during
the fourth year of Villar as COA Commissioner, Villar was designated
DECISION as Acting Chairman of COA from February 4, 2008 to April 14, 2008.
Subsequently, on April 18, 2008, Villar was nominated and appointed
as Chairman of the COA. Shortly thereafter, on June 11, 2008, the
Commission on Appointments confirmed his appointment. He was to
serve as Chairman of COA, as expressly indicated in the
appointment papers, until the expiration of the original term of his
office as COA Commissioner or on February 2, 2011. Challenged in
this recourse, Villar, in an obvious bid to lend color of title to his hold
on the chairmanship, insists that his appointment as COA Chairman
accorded him a fresh term of seven (7) years which is yet to lapse.
He would argue, in fine, that his term of office, as such chairman, is
up to February 2, 2015, or 7 years reckoned from February 2, 2008
when he was appointed to that position.
Meanwhile, Evelyn R. San Buenaventura (San Buenaventura) was
appointed as COA Commissioner to serve the unexpired term of
Villar as Commissioner or up to February 2, 2011.
Before the Court could resolve this petition, Villar, via a letter dated
February 22, 2011 addressed to President Benigno S. Aquino III,
signified his intention to step down from office upon the appointment
of his replacement. True to his word, Villar vacated his position when
President Benigno Simeon Aquino III named Ma. Gracia Pulido-Tan
(Chairman Tan) COA Chairman. This development has rendered this
petition and the main issue tendered therein moot and academic.
case is considered moot and academic when its purpose has
become stale,2 or when it ceases to present a justiciable controversy
owing to the onset of supervening events,3 so that a resolution of the
case or a declaration on the issue would be of no practical value or
use.4 In such instance, there is no actual substantial relief which a
petitioner would be entitled to, and which will anyway be negated by
the dismissal of the basic petition.5 As a general rule, it is not within
Our charge and function to act upon and decide a moot case.
However, in David v. Macapagal-Arroyo,6 We acknowledged and
accepted certain exceptions to the issue of mootness, thus:
The "moot and academic" principle is not a magical formula that can
automatically dissuade the courts in resolving a case. Courts will
decide cases, otherwise moot and academic, if: first, there is a grave
violation of the Constitution, second, the exceptional character of the
situation and the paramount public interest is involved, third, when
constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar, and the public, and fourth, the
case is capable of repetition yet evading review.
Although deemed moot due to the intervening appointment of
Chairman Tan and the resignation of Villar, We consider the instant
case as falling within the requirements for review of a moot and
academic case, since it asserts at least four exceptions to the
mootness rule discussed in David, namely: there is a grave violation
of the Constitution; the case involves a situation of exceptional
character and is of paramount public interest; the constitutional issue
raised requires the formulation of controlling principles to guide the
bench, the bar and the public; and the case is capable of repetition
yet evading review.7 The situation presently obtaining is definitely of
such exceptional nature as to necessarily call for the promulgation of
principles that will henceforth "guide the bench, the bar and the
public" should like circumstance arise. Confusion in similar future
situations would be smoothed out if the contentious issues advanced
in the instant case are resolved straightaway and settled definitely.
There are times when although the dispute has disappeared, as in
this case, it nevertheless cries out to be addressed. To borrow from
Javier v. Pacificador,8 "Justice demands that we act then, not only
for the vindication of the outraged right, though gone, but also for the
guidance of and as a restraint in the future."
Both procedural and substantive issues are raised in this proceeding.
The procedural aspect comes down to the question of whether or not
the following requisites for the exercise of judicial review of an
executive act obtain in this petition, viz: (1) there must be an actual
case or justiciable controversy before the court; (2) the question
before it must be ripe for adjudication; (3) the person challenging the
act must be a proper party; and (4) the issue of constitutionality must
be raised at the earliest opportunity and must be the very litis mota of
the case.9
To Villar, all the requisites have not been met, it being alleged in
particular that petitioner, suing as a taxpayer and citizen, lacks the
necessary standing to challenge his appointment.10 On the other
hand, the Office of the Solicitor General (OSG), while recognizing the
validity of Villar’s appointment for the period ending February 11,
2011, has expressed the view that petitioner should have had filed a
petition for declaratory relief or quo warranto under Rule 63 or Rule
66, respectively, of the Rules of Court instead of certiorari under Rule
65.
Villar’s posture on the absence of some of the mandatory requisites
for the exercise by the Court of its power of judicial review must fail.
As a general rule, a petitioner must have the necessary personality
or standing (locus standi) before a court will recognize the issues
presented. In Integrated Bar of the Philippines v. Zamora, We
defined locus standi as:
x x x a personal and substantial interest in the case such that the
party has sustained or will sustain a direct injury as a result of the
governmental act that is being challenged. The term "interest" means
a material interest, an interest in issue affected by the decree, as
distinguished from mere interest in the question involved, or a mere
incidental interest. The gist of the question of standing is whether a
party alleges "such personal stake in the outcome of the controversy
as to assure the concrete adverseness which sharpens the
presentation of issues upon which the court depends for illumination
of difficult constitutional questions."11
To have legal standing, therefore, a suitor must show that he has
sustained or will sustain a "direct injury" as a result of a government
action, or have a "material interest" in the issue affected by the
challenged official act.12 However, the Court has time and again
acted liberally on the locus standi requirements and has accorded
certain individuals, not otherwise directly injured, or with material
interest affected, by a Government act, standing to sue provided a
constitutional issue of critical significance is at stake.13 The rule on
locus standi is after all a mere procedural technicality in relation to
which the Court, in a catena of cases involving a subject of
transcendental import, has waived, or relaxed, thus allowing non-
traditional plaintiffs, such as concerned citizens, taxpayers, voters or
legislators, to sue in the public interest, albeit they may not have
been personally injured by the operation of a law or any other
government act.14 In David, the Court laid out the bare minimum
norm before the so-called "non-traditional suitors" may be extended
standing to sue, thusly:
1.) For taxpayers, there must be a claim of illegal disbursement of
public funds or that the tax measure is unconstitutional;
2.) For voters, there must be a showing of obvious interest in the
validity of the election law in question;
3.) For concerned citizens, there must be a showing that the issues
raised are of transcendental importance which must be settled early;
and
4.) For legislators, there must be a claim that the official action
complained of infringes their prerogatives as legislators.
This case before Us is of transcendental importance, since it
obviously has "far-reaching implications," and there is a need to
promulgate rules that will guide the bench, bar, and the public in
future analogous cases. We, thus, assume a liberal stance and allow
petitioner to institute the instant petition.
Anent the aforestated posture of the OSG, there is no serious
disagreement as to the propriety of the availment of certiorari as a
medium to inquire on whether the assailed appointment of
respondent Villar as COA Chairman infringed the constitution or was
infected with grave abuse of discretion. For under the expanded
concept of judicial review under the 1987 Constitution, the corrective
hand of certiorari may be invoked not only "to settle actual
controversies involving rights which are legally demandable and
enforceable," but also "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."15
"Grave abuse of discretion" denotes:
such capricious and whimsical exercise of judgment as is equivalent
to lack of jurisdiction, or, in other words, where the power is
exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and it 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 or to act in contemplation of law.16
We find the remedy of certiorari applicable to the instant case in view
of the allegation that then President Macapagal-Arroyo exercised her
appointing power in a manner constituting grave abuse of discretion.
This brings Us to the pivotal substantive issue of whether or not
Villar’s appointment as COA Chairman, while sitting in that body and
after having served for four (4) years of his seven (7) year term as
COA commissioner, is valid in light of the term limitations imposed
under, and the circumscribing concepts tucked in, Sec. 1 (2), Art.
IX(D) of the Constitution, which reads:
(2) The Chairman and Commissioners [on Audit] shall be appointed
by the President with the consent of the Commission on
Appointments for a term of seven years without reappointment. Of
those first appointed, the Chairman shall hold office for seven years,
one commissioner for five years, and the other commissioner for
three years, without reappointment. Appointment to any vacancy
shall be only for the unexpired portion of the term of the predecessor.
In no case shall any member be appointed or designated in a
temporary or acting capacity. (Emphasis added.)17
And if valid, for how long can he serve?
At once clear from a perusal of the aforequoted provision are the
defined restricting features in the matter of the composition of COA
and the appointment of its members (commissioners and chairman)
designed to safeguard the independence and impartiality of the
commission as a body and that of its individual members.18 These
are, first, the rotational plan or the staggering term in the commission
membership, such that the appointment of commission members
subsequent to the original set appointed after the effectivity of the
1987 Constitution shall occur every two years; second, the maximum
but a fixed term-limit of seven (7) years for all commission members
whose appointments came about by reason of the expiration of term
save the aforementioned first set of appointees and those made to fill
up vacancies resulting from certain causes; third, the prohibition
against reappointment of commission members who served the full
term of seven years or of members first appointed under the
Constitution who served their respective terms of office; fourth, the
limitation of the term of a member to the unexpired portion of the
term of the predecessor; and fifth, the proscription against temporary
appointment or designation.
To elucidate on the mechanics of and the adverted limitations on the
matter of COA-member appointments with fixed but staggered terms
of office, the Court lays down the following postulates deducible from
pertinent constitutional provisions, as construed by the Court:
1. The terms of office and appointments of the first set of
commissioners, or the seven, five and three-year termers referred to
in Sec. 1(2), Art. IX(D) of the Constitution, had already expired.
Hence, their respective terms of office find relevancy for the most
part only in understanding the operation of the rotational plan. In
Gaminde v. Commission on Audit,19 the Court described how the
smooth functioning of the rotational system contemplated in said and
like provisions covering the two other independent commissions is
achieved thru the staggering of terms:
x x x [T]he terms of the first Chairmen and Commissioners of the
Constitutional Commissions under the 1987 Constitution must start
on a common date [February 02, 1987, when the 1987 Constitution
was ratified] irrespective of the variations in the dates of
appointments and qualifications of the appointees in order that the
expiration of the first terms of seven, five and three years should lead
to the regular recurrence of the two-year interval between the
expiration of the terms.
x x x In case of a belated appointment, the interval between the start
of the terms and the actual appointment shall be counted against the
appointee.20 (Italization in the original; emphasis added.)
Early on, in Republic v. Imperial,21 the Court wrote of two conditions,
"both indispensable to [the] workability" of the rotational plan. These
conditions may be described as follows: (a) that the terms of the first
batch of commissioners should start on a common date; and (b) that
any vacancy due to death, resignation or disability before the
expiration of the term should be filled only for the unexpired balance
of the term. Otherwise, Imperial continued, "the regularity of the
intervals between appointments would be destroyed." There appears
to be near unanimity as to the purpose/s of the rotational system, as
originally conceived, i.e., to place in the commission a new appointee
at a fixed interval (every two years presently), thus preventing a four-
year administration appointing more than one permanent and regular
commissioner,22 or to borrow from Commissioner Monsod of the
1986 CONCOM, "to prevent one person (the President of the
Philippines) from dominating the commissions."23 It has been
declared too that the rotational plan ensures continuity in, and, as
indicated earlier, secure the independence of, the commissions as a
body.24
2. An appointment to any vacancy in COA, which arose from an
expiration of a term, after the first chairman and commissioners
appointed under the 1987 Constitution have bowed out, shall, by
express constitutional fiat, be for a term of seven (7) years, save
when the appointment is to fill up a vacancy for the corresponding
unserved term of an outgoing member. In that case, the appointment
shall only be for the unexpired portion of the
commissioner’s term of office. There can only be an unexpired
portion when, as a direct result of his demise, disability, resignation
or impeachment, as the case may be, a sitting member is unable to
complete his term of office.25 To repeat, should the vacancy arise
out of the expiration of the term of the incumbent, then there is
technically no unexpired portion to speak of. The vacancy is for a
new and complete seven-year term and, ergo, the appointment
thereto shall in all instances be for a maximum seven (7) years.
3. Sec. 1(2), Art. IX(D) of the 1987 Constitution prohibits the
"reappointment" of a member of COA after his appointment for seven
(7) years. Writing for the Court in Nacionalista Party v. De Vera,26 a
case involving the promotion of then COMELEC Commissioner De
Vera to the position of chairman, then Chief Justice Manuel Moran
called attention to the fact that the prohibition
"reappointment" comes as a continuation of the requirement that the
commissioners––referring to members of the COMELEC under the
1935 Constitution––shall hold office for a term of nine (9) years. This
sentence formulation imports, notes Chief Justice Moran, that
reappointment is not an absolute prohibition.
4. The adverted system of regular rotation or the staggering of
appointments and terms in the membership for all three constitutional
commissions, namely the COA, Commission on Elections
departing (COMELEC) and Civil Service Commission (CSC) found in the 1987
Constitution was patterned after the amended 1935 Constitution for
the appointment of the members of COMELEC27 with this
difference: the 1935 version entailed a regular interval of vacancy
every three (3) years, instead of the present two (2) years and there
was no express provision on appointment to any vacancy being
limited to the unexpired portion of the his predecessor’s term. The
model 1935 provision reads:
Section 1. There shall be an independent Commission on Elections
composed of a Chairman and two other members to be appointed by
the President with the consent of the Commission on Appointments,
who shall hold office for a term of nine years and may not be
reappointed. Of the Members of the Commission first appointed, one
shall hold office for nine years, another for six years and the third for
against three years. x x x
Petitioner now asseverates the view that Sec. 1(2), Art. IX(D) of the
1987 Constitution proscribes reappointment of any kind within the
commission, the point being that a second appointment, be it for the
same position (commissioner to another position of commissioner) or
upgraded position (commissioner to chairperson) is a prohibited
reappointment and is a nullity ab initio. Attention is drawn in this
regard to the Court’s disposition in Matibag v. Benipayo.28
Villar’s promotional appointment, so it is argued, is void from the
start, constituting as it did a reappointment enjoined by the
Constitution, since it actually needed another appointment to a
different office and requiring another confirmation by the Commission
on Appointments.
Central to the adjudication of the instant petition is the correct
meaning to be given to Sec. 1(2), Article IX(D) of the Constitution on
the ban against reappointment in relation to the appointment issued
to respondent Villar to the position of COA Chairman.
Without question, the parties have presented two (2) contrasting and
conflicting positions. Petitioner contends that Villar’s appointment is
proscribed by the constitutional ban on reappointment under the
aforecited constitutional provision. On the other hand, respondent
Villar initially asserted that his appointment as COA Chairman is valid
up to February 2, 2015 pursuant to the same provision.
The Court finds petitioner’s position bereft of merit. The flaw lies in
regarding the word "reappointment" as, in context, embracing any
and all species of appointment.
The rule is that if a statute or constitutional provision is clear, plain
and free from ambiguity, it must be given its literal meaning and
applied without attempted interpretation.29 This is known as the plain
meaning rule enunciated by the maxim verba legis non est
recedendum, or from the words of a statute there should be no
departure.30
The primary source whence to ascertain constitutional intent or
purpose is the language of the provision itself.31 If possible, the
words in the Constitution must be given their ordinary meaning, save
where technical terms are employed. J.M. Tuason & Co., Inc. v. Land
Tenure Administration illustrates the verbal legis rule in this wise:
We look to the language of the document itself in our search for its
meaning. We do not of course stop there, but that is where we begin.
It is to be assumed that the words in which constitutional provisions
are couched express the objective sought to be attained. They are to
be given their ordinary meaning except where technical terms are
employed in which case the significance thus attached to them
prevails. As the Constitution is not primarily a lawyer’s document, it
being essential for the rule of law to obtain that it should ever be
present in the people’s consciousness, its language as much as
possible should be understood in the sense they have in common
use. What it says according to the text of the provision to be
construed compels acceptance and negates the power of the courts
to alter it, based on the postulate that the framers and the people
mean what they say. Thus there are cases where the need for
construction is reduced to a minimum.32 (Emphasis supplied.)
Let us dissect and examine closely the provision in question:
(2) The Chairman and Commissioners [on Audit] shall be appointed
by the President with the consent of the Commission on
Appointments for a term of seven years without reappointment. Of
those first appointed, the Chairman shall hold office for seven years,
one commissioner for five years, and the other commissioner for
three years, without reappointment. Appointment to any vacancy
shall be only for the unexpired portion of the term of the predecessor.
x x x (Emphasis added.)
The first sentence is unequivocal enough. The COA Chairman shall
be appointed by the President for a term of seven years, and if he
has served the full term, then he can no longer be reappointed or
extended another appointment. In the same vein, a Commissioner
who was appointed for a term of seven years who likewise served
the full term is barred from being reappointed. In short, once the
Chairman or Commissioner shall have served the full term of seven
years, then he can no longer be reappointed to either the position of
Chairman or Commissioner. The obvious intent of the framers is to
prevent the president from "dominating" the Commission by allowing
him to appoint an additional or two more commissioners.
The same purpose obtains in the second sentence of Sec. 1(2). The
Constitutional Convention barred reappointment to be extended to
commissioner-members first appointed under the 1987 Constitution
to prevent the President from controlling the commission. Thus, the
first Chairman appointed under the 1987 Constitution who served the
full term of seven years can no longer be extended a reappointment.
Neither can the Commissioners first appointed for the terms of five
years and three years be eligible for reappointment. This is the plain
meaning attached to the second sentence of Sec. 1(2), Article IX(D).
On the other hand, the provision, on its face, does not prohibit a
promotional appointment from commissioner to chairman as long as
the commissioner has not served the full term of seven years, further
qualified by the third sentence of Sec. 1(2), Article IX (D) that "the
appointment to any vacancy shall be only for the unexpired portion of
the term of the predecessor." In addition, such promotional
appointment to the position of Chairman must conform to the
rotational plan or the staggering of terms in the commission
membership such that the aggregate of the service of the
Commissioner in said position and the term to which he will be
appointed to the position of Chairman must not exceed seven years
so as not to disrupt the rotational system in the commission
prescribed by Sec. 1(2), Art. IX(D).
In conclusion, there is nothing in Sec. 1(2), Article IX(D) that explicitly
precludes a promotional appointment from Commissioner to
Chairman, provided it is made under the aforestated circumstances
or conditions.
It may be argued that there is doubt or ambiguity on whether Sec.
1(2), Art. IX(D), as couched, allows a promotional appointment from
Commissioner to Chairman. Even if We concede the existence of an
ambiguity, the outcome will remain the same. J.M. Tuason & Co.,
Inc.33 teaches that in case of doubt as to the import and react of a
constitutional provision, resort should be made to extraneous aids of
construction, such as debates and proceedings of the Constitutional
Convention, to shed light on and ascertain the intent of the framers
or the purpose of the provision being construed.
The understanding of the Convention as to what was meant by the
terms of the constitutional provision which was the subject of the
deliberation goes a long way toward explaining the understanding of
the people when they ratified it. The Court applied this principle in
Civil Liberties Union v. Executive Secretary:
A foolproof yardstick in constitutional construction is the intention
underlying the provision under consideration. Thus, it has been held
that the Court in construing a Constitution should bear in mind the
object sought to be accomplished by its adoption, and the evils, if
any, sought to be prevented or remedied. A doubtful provision will be
examined in the light of the history of the times, and the condition
and circumstances under which the Constitution was framed. The
object is to ascertain the reason which induced the framers of the
Constitution to enact the particular provision and the purpose sought
to be accomplished thereby, in order to construe the whole as to
make the words consonant to that reason and calculated to effect
that purpose.34 (Emphasis added.)
And again in Nitafan v. Commissioner on Internal Revenue:
x x x The ascertainment of that intent is but in keeping with the
fundamental principle of constitutional construction that the intent of
the framers of the organic law and of the people adopting it should
be given effect. The primary task in constitutional construction is to
ascertain and thereafter assure the realization of the purpose of the
framers and of the people in the adoption of the Constitution. It may
also be safely assumed that the people in ratifying the Constitution
were guided mainly by the explanation offered by the framers.35
(Emphasis added.)
Much weight and due respect must be accorded to the intent of the
framers of the Constitution in interpreting its provisions.
Far from prohibiting reappointment of any kind, including a situation
where a commissioner is upgraded to the position of chairman, the
1987 Constitution in fact unequivocally allows promotional
appointment, but subject to defined parameters. The ensuing
exchanges during the deliberations of the 1986 Constitutional
Commission (CONCOM) on a draft proposal of what would
eventually be Sec. 1(2), Art. IX(D) of the present Constitution amply
support the thesis that a promotional appointment is allowed
provided no one may be in the COA for an aggregate threshold
period of 7 years:
MS. AQUINO: In the same paragraph, I would propose an
amendment x x x. Between x x x the sentence which begins with "In
no case," insert THE APPOINTEE SHALL IN NO CASE SERVE AN
AGGREGATE PERIOD OF MORE THAN SEVEN YEARS. I was
thinking that this may approximate the situation wherein a
commissioner is first appointed as chairman. I am willing to withdraw
that amendment if there is a representation on the part of the
Committee that there is an implicit intention to prohibit a term that in
the aggregate will exceed more than seven years. If that is the
intention, I am willing to withdraw my amendment.
MR. MONSOD: If the [Gentlewoman] will read the whole Article, she
will notice that there is no reappointment of any kind and, therefore,
as a whole there is no way somebody can serve for more than seven
years. The purpose of the last sentence is to make sure that this
does not happen by including in the appointment both temporary and
acting capacities.
MS. AQUINO. Yes. Reappointment is fine; that is accounted for. But
I was thinking of a situation wherein a commissioner is upgraded to a
position of chairman. But if this provision is intended to cover that
kind of situation, then I am willing to withdraw my amendment.
MR. MONSOD. It is covered.
MR. FOZ. There is a provision on line 29 precisely to cover that
situation. It states: "Appointment to any vacancy shall be only for the
unexpired portion of the predecessor." In other words, if there is
upgrading of position from commissioner to chairman, the appointee
can serve only the unexpired portion of the term of the predecessor.
MS. AQUINO: But we have to be very specific x x x because it might
shorten the term because he serves only the unexpired portion of the
term of the predecessor.
MR. FOZ: He takes it at his own risk. He knows that he will only have
to serve the unexpired portion of the term of the predecessor.
(Emphasis added.)36
The phrase "upgrading of position" found in the underscored portion
unmistakably shows that Sec. 1(2), Art. IX(D) of the 1987
Constitution, for all its caveat against reappointment, does not per se
preclude, in any and all cases, the promotional appointment or
upgrade of a commissioner to chairman, subject to this proviso: the
appointee’s tenure in office does not exceed 7 years in all. Indeed,
such appointment does not contextually come within the restricting
phrase "without reappointment" twice written in that section. office and, hence, not, in the strict legal viewpoint, a reappointment.
Delegate Foz even cautioned, as a matter of fact, that a sitting Stated a bit differently, "reappointment" refers to a movement to one
commissioner accepting a promotional appointment to fill up an and the same office. Necessarily, a movement to a different position
unexpired portion pertaining to the higher office does so at the risk of within the commission (from Commissioner to Chairman) would
shortening his original term. To illustrate the Foz’s concern: assume constitute an appointment, or a second appointment, to be precise,
that Carague left COA for reasons other than the expiration of his but not reappointment.
threshold 7-year term and Villar accepted an appointment to fill up
the vacancy. In this situation, the latter can only stay at the COA and A similar opinion was expressed in the same Visarra case by the
served the unexpired portion of Carague’s unexpired term as concurring Justice Angelo Bautista, although he expressly alluded to
departing COA Chairman, even if, in the process, his (Villar’s) own 7- a promotional appointment as not being a prohibited appointment
year term as COA commissioner has not yet come to an end. In this under Art. X of the 1935 Constitution.
illustration, the inviolable regularity of the intervals between
appointments in the COA is preserved. Petitioner’s invocation of Matibag as additional argument to contest
the constitutionality of Villar’s elevation to the COA chairmanship is
Moreover, jurisprudence tells us that the word "reappointment" inapposite. In Matibag, then President Macapagal-Arroyo appointed,
means a second appointment to one and the same office.37 As ad interim, Alfredo Benipayo as COMELEC Chairman and
Justice Arsenio Dizon (Justice Dizon) aptly observed in his dissent in Resurreccion Borra and Florentino Tuason as Commissioners, each
Visarra v. Miraflor,38 the constitutional prohibition against the for a term of office of seven (7) years. All three immediately took their
reappointment of a commissioner refers to his second appointment oath of, and assumed, office. These appointments were twice
to the same office after holding it for nine years.39 As Justice Dizon renewed because the Commission on Appointments failed to act on
observed, "[T]he occupant of an office obviously needs no such the first two ad interim appointments. Via a petition for prohibition,
second appointment unless, for some valid cause, such as the some disgruntled COMELEC officials assail as infirm the
expiration of his term or resignation, he had ceased to be the legal appointments of Benipayo, et al.
occupant thereof." 40 The inevitable implication of Justice Dizon’s
cogent observation is that a promotion from commissioner to Matibag lists (4) four situations where the prohibition on
chairman, albeit entailing a second appointment, involves a different reappointment would arise, or to be specific, where the proviso "[t]he
Chairman and the Commissioners shall be appointed x x x for a term
of seven years without reappointment" shall apply. Justice Antonio T.
Carpio declares in his dissent that Villar’s appointment falls under a
combination of two of the four situations.
Conceding for the nonce the correctness of the premises depicted in
the situations referred to in Matibag, that case is of doubtful
applicability to the instant petition. Not only is it cast against a
different milieu, but the lis mota of the case, as expressly declared in
the main opinion, "is the very constitutional issue raised by
petitioner."41 And what is/are this/these issue/s? Only two defined
issues in Matibag are relevant, viz: (1) the nature of an ad interim
appointment and subsumed thereto the effect of a by-passed ad
interim appointment; and (2) the constitutionality of renewals of ad
interim appointments. The opinion defined these issues in the
following wise: "Petitioner [Matibag] filed the instant petition
questioning the appointment and the right to remain in office of
Benipayo, Borra and Tuason as Chairman and Commissioners of the
COMELEC, respectively. Petitioner claims that the ad interim
appointments of Benipayo, et al. violate the constitutional provisions
on the independence of COMELEC, as well as on the prohibitions on
temporary appointments and reappointments of its Chairman and
members." As may distinctly be noted, an upgrade or promotion was
not in issue in Matibag.
We shall briefly address the four adverted situations outlined in
Matibag, in which, as there urged, the uniform proviso on no
reappointment––after a member of any of the three constitutional
commissions is appointed for a term of seven (7) years––shall apply.
Matibag made the following formulation:
The first situation is where an ad interim appointee after confirmation
by the Commission on Appointments serves his full 7-year term.
Such person cannot be reappointed whether as a member or as
chairman because he will then be actually serving more than seven
(7) years.
The second situation is where the appointee, after confirmation,
serves part of his term and then resigns before his seven-year term
of office ends. Such person cannot be reappointed whether as a
member or as chair to a vacancy arising from retirement because a
reappointment will result in the appointee serving more than seven
years.
The third situation is where the appointee is confirmed to serve the
unexpired portion of someone who died or resigned, and the
appointee completes the unexpired term. Such person cannot be
reappointed whether as a member or as chair to a vacancy arising
from retirement because a reappointment will result in the appointee
also serving more than seven (7) years.
The fourth situation is where the appointee has previously served a
term of less than seven (7) years, and a vacancy arises from death
or resignation. Even if it will not result in his serving more than seven
years, a reappointment of such person to serve an unexpired term is
also prohibited because his situation will be similar to those
appointed under the second sentence of Sec. 1(20), Art. IX-C of the
Constitution [referring to the first set of appointees (the 5 and 3 year
termers) whose term of office are less than 7 years but are barred
from being reappointed under any situation]."42 (Words in brackets
and emphasis supplied.)
The situations just described constitute an obiter dictum, hence
without the force of adjudication, for the corresponding formulation of
the four situations was not in any way necessary to resolve any of
the determinative issues specifically defined in Matibag. An opinion
entirely unnecessary for the decision of the case or one expressed
upon a point not necessarily involved in the determination of the case
is an obiter.43
There can be no serious objection to the scenarios depicted in the
first, second and third situations, both hewing with the proposition
that no one can stay in any of the three independent commissions for
an aggregate period of more than seven (7) years. The fourth
situation, however, does not commend itself for concurrence
inasmuch as it is basically predicated on the postulate that
reappointment, as earlier herein defined, of any kind is prohibited
under any and all circumstances. To reiterate, the word
"reappointment" means a second appointment to one and the same
office; and Sec. 1(2), Art. IX(D) of the 1987 Constitution and similar
provisions do not peremptorily prohibit the promotional appointment
of a commissioner to chairman, provided the new appointee’s tenure
in both capacities does not exceed seven (7) years in all. The
statements in Matibag enunciating the ban on reappointment in the
aforecited fourth situation, perforce, must be abandoned, for, indeed,
a promotional appointment from the position of Commissioner to that
of Chairman is constitutionally permissible and not barred by Sec.
1(2), Art. IX (D) of the Constitution.
One of the aims behind the prohibition on reappointment, petitioner
urges, is to ensure and preserve the independence of COA and its
members,44 citing what the dissenting Justice J.B.L Reyes wrote in
Visarra, that once appointed and confirmed, the commissioners
should be free to act as their conscience demands, without fear of
retaliation or hope or reward. Pursued to its logical conclusion,
petitioner’s thesis is that a COA member may no longer act with
independence if he or she can be rewarded with a promotion or
appointment, for then he or she will do the bidding of the appointing
authority in the hope of being promoted or reappointed.
The unstated reason behind Justice J.B.L. Reyes’ counsel is that
independence is really a matter of choice. Without taking anything
away from the gem imparted by the eminent jurist, what Chief Justice
Moran said on the subject of independence is just as logically sound
and perhaps even more compelling, as follows:
A Commissioner, hopeful of reappointment may strive to do good.
Whereas, without that hope or other hope of material reward, his
enthusiasm may decline as the end of his term approaches and he
may even lean to abuses if there is no higher restrain in his moral
character. Moral character is no doubt the most effective safeguard
of independence. With moral integrity, a commissioner will be
independent with or without the possibility of reappointment.45
The Court is likewise unable to sustain Villar’s proposition that his
promotional appointment as COA Chairman gave him a completely
fresh 7-year term––from February 2008 to February 2015––given his
four (4)-year tenure as COA commissioner devalues all the past
pronouncements made by this Court, starting in De Vera, then
Imperial, Visarra, and finally Matibag. While there had been
divergence of opinion as to the import of the word "reappointment,"
there has been unanimity on the dictum that in no case can one be a
COA member, either as chairman or commissioner, or a mix of both
positions, for an aggregate term of more than 7 years. A contrary
view would allow a circumvention of the aggregate 7-year service
limitation and would be constitutionally offensive as it would wreak
havoc to the spirit of the rotational system of succession. Imperial,
passing upon the rotational system as it applied to the then
organizational set-up of the COMELEC, stated:
The provision that of the first three commissioners appointed "one
shall hold office for 9 years, another for 6 years and the third for 3
years," when taken together with the prescribed term of office for 9
years without reappointment, evinces a deliberate plan to have a
regular rotation or cycle in the membership of the commission, by
having subsequent members appointable only once every three
years.46
To be sure, Villar’s appointment as COA Chairman partakes of a
promotional appointment which, under appropriate setting, would be
outside the purview of the constitutional reappointment ban in Sec
1(2), Art. IX(D) of the Constitution. Nonetheless, such appointment,
even for the term appearing in the underlying appointment paper,
ought still to be struck down as unconstitutional for the reason as
shall be explained.
Consider:
In a mandatory tone, the aforecited constitutional provision decrees
that the appointment of a COA member shall be for a fixed 7-year
term if the vacancy results from the expiration of the term of the
predecessor. We reproduce in its pertinent part the provision referred
to:
(2) The Chairman and Commissioners [on Audit] shall be appointed x
x x for a term of seven years without reappointment. x x x
Appointment to any vacancy shall be only for the unexpired portion of
the term of the predecessor. x x x
Accordingly, the promotional appointment as COA Chairman of Villar
for a stated fixed term of less than seven (7) years is void for
violating a clear, but mandatory constitutional prescription. There can
be no denying that the vacancy in the position of COA chairman
when Carague stepped down in February 2, 2008 resulted from the
expiration of his 7-year term. Hence, the appointment to the vacancy
thus created ought to have been one for seven (7) years in line with
the verbal legis approach47 of interpreting the Constitution. It is to be
understood, however, following Gaminde, that in case of a belated
appointment, the interval between the start of the term and the actual
appointment shall be counted against the 7-year term of the
appointee. Posing, however, as an insurmountable barrier to a full 7-
year appointment for Villar is the rule against one serving the
commission for an aggregate term of more than seven (7) years.
Where the Constitution or, for that matter, a statute, has fixed the
term of office of a public official, the appointing authority is without
authority to specify in the appointment a term shorter or longer than
what the law provides. If the vacancy calls for a full seven-year
appointment, the President is without discretion to extend a
promotional appointment for more or for less than seven (7) years.
There is no in between. He or she cannot split terms. It is not within
the power of the appointing authority to override the positive
provision of the Constitution which dictates that the term of office of
members of constitutional bodies shall be seven (7) years.48 A
contrary reasoning "would make the term of office to depend upon
the pleasure or caprice of the [appointing authority] and not upon the
will [of the framers of the Constitution] of the legislature as expressed
in plain and undoubted language in the law."49
In net effect, then President Macapagal-Arroyo could not have had,
under any circumstance, validly appointed Villar as COA Chairman,
for a full 7-year appointment, as the Constitution decrees, was not
legally feasible in light of the 7-year aggregate rule. Villar had already
served 4 years of his 7-year term as COA Commissioner. A shorter
term, however, to comply with said rule would also be invalid as the
corresponding appointment would effectively breach the clear
purpose of the Constitution of giving to every appointee so appointed
subsequent to the first set of commissioners, a fixed term of office of
7 years. To recapitulate, a COA commissioner like respondent Villar
who serves for a period less than seven (7) years cannot be
appointed as chairman when such position became vacant as a
result of the expiration of the 7-year term of the predecessor
(Carague). Such appointment to a full term is not valid and
constitutional, as the appointee will be allowed to serve more than
seven (7) years under the constitutional ban.
On the other hand, a commissioner who resigned before serving his
7- year term can be extended an appointment to the position of
chairman for the unexpired period of the term of the latter, provided
the aggregate of the period he served as commissioner and the
period he will serve as chairman will not exceed seven (7) years.
This situation will only obtain when the chairman leaves the office by
reason of death, disability, resignation or impeachment. Let us
consider, in the concrete, the situation of then Chairman Carague
and his successor, Villar. Carague was appointed COA Chairman
effective February 2, 2001 for a term of seven (7) years, or up to
February 2, 2008. Villar was appointed as Commissioner on
February 2, 2004 with a 7-year term to end on February 2, 2011. If
Carague for some reason vacated the chairmanship in 2007, then
Villar can resign as commissioner in the same year and later be
appointed as chairman to serve only up to February 2, 2008, the end
of the unexpired portion of Carague’s term. In this hypothetical
scenario, Villar’s appointment to the position of chairman is valid and
constitutional as the aggregate periods of his two (2) appointments
will only be five (5) years which neither distorts the rotational scheme
nor violates the rule that the sum total of said appointments shall not
exceed seven (7) years. Villar would, however, forfeit two (2) years of
his original seven (7)-year term as Commissioner, since, by
accepting an upgraded appointment to Carague’s position, he
agreed to serve the unexpired portion of the term of the predecessor.
As illustrated earlier, following Mr. Foz’s line, if there is an upgrading
of position from commissioner to chairman, the appointee takes the
risk of cutting short his original term, knowing pretty well before hand
that he will serve only the unexpired portion of the term of his
predecessor, the outgoing COA chairman.
In the extreme hypothetical situation that Villar vacates the position
of chairman for causes other than the expiration of the original term
of Carague, the President can only appoint the successor of Villar for
the unexpired portion of the Carague term in line with Sec. 1(2), Art.
IX(D) of the Constitution. Upon the expiration of the original 7-year
term of Carague, the President can appoint a new chairman for a
term of seven (7) full years.
In his separate dissent, my esteemed colleague, Mr. Justice
Mendoza, takes strong exception to the view that the promotional
appointment of a sitting commissioner is plausible only when he is
appointed to the position of chairman for the unexpired portion of the
term of said official who leaves the office by reason of any the
following reasons: death, disability, resignation or impeachment, not
when the vacancy arises out as a result of the expiration of the 7-
year term of the past chairman. There is nothing in the Constitution,
so Justice Mendoza counters, that restricts the promotion of an
incumbent commissioner to the chairmanship only in instances
where the tenure of his predecessor was cut short by any of the four
events referred to. As earlier explained, the majority view springs
from the interplay of the following premises: The explicit command of
the Constitution is that the "Chairman and the Commissioners shall
be appointed by the President x x x for a term of seven years [and]
appointment to any vacancy shall be only for the unexpired portion of
the term of the predecessor." To repeat, the President has two and
only two options on term appointments. Either he extends an
appointment for a full 7-year term when the vacancy results from the
expiration of term, or for a shorter period corresponding to the
unexpired term of the predecessor when the vacancy occurs by
reason of death, physical disability, resignation or impeachment. If
the vacancy calls for a full seven-year appointment, the Chief
Executive is barred from extending a promotional appointment for
less than seven years. Else, the President can trifle with terms of
office fixed by the Constitution.
Justice Mendoza likewise invites attention to an instance in history
when a commissioner had been promoted chairman after the
expiration of the term of his predecessor, referring specifically to the
appointment of then COMELEC Commissioner Gaudencio Garcia to
succeed Jose P. Carag after the expiration of the latter’s term in
1959 as COMELEC chairman. Such appointment to the position of
chairman is not constitutionally permissible under the 1987
Constitution because of the policy and intent of its framers that a
COA member who has served his full term of seven (7) years or
even for a shorter period can no longer be extended another
appointment to the position of chairman for a full term of seven (7)
years. As revealed in the deliberations of the Constitutional
Commission that crafted the 1987 Constitution, a member of COA
who also served as a commissioner for less than seven (7) years in
said position cannot be appointed to the position of chairman for a
full term of seven (7) years since the aggregate will exceed seven (7)
years. Thus, the adverted Garcia appointment in 1959 made under
the 1935 Constitution cannot be used as a precedent to an
appointment of such nature under the 1987 Constitution. The dissent
further notes that the upgrading remained uncontested. In this
regard, suffice it to state that the promotion in question was either
legal or it was not. If it were not, no amount of repetitive practices
would clear it of invalidating taint.
Lastly, Villar’s appointment as chairman ending February 2, 2011
which Justice Mendoza considers as valid is likewise
unconstitutional, as it will destroy the rationale and policy behind the
rotational system or the staggering of appointments and terms in
COA as prescribed in the Constitution. It disturbs in a way the
staggered rotational system of appointment under Sec. 1(2), Art.
IX(D) of the 1987 Constitution. Consider: If Villar’s term as COA
chairman up to February 2, 2011 is viewed as valid and constitutional
as espoused by my esteemed colleague, then two vacancies have
simultaneously occurred and two (2) COA members going out of
office at once, opening positions for two (2) appointables on that date
as Commissioner San Buenaventura’s term also expired on that day.
This is precisely one of the mischiefs the staggering of terms and the
regular intervals appointments seek to address. Note that San
Buenaventura was specifically appointed to succeed Villar as
commissioner, meaning she merely occupied the position vacated by
her predecessor whose term as such commissioner expired on
February 2, 2011. The result is what the framers of the Constitution
doubtless sought to avoid, a sitting President with a 6-year term of
office, like President Benigno C. Aquino III, appointing all or at least
two (2) members of the three-man Commission during his term. He
appointed Ma. Gracia Pulido-Tan as Chairman for the term ending
February 2, 2015 upon the relinquishment of the post by respondent
Villar, and Heidi Mendoza was appointed Commissioner for a 7-year
term ending February 2, 2018 to replace San Buenaventura. If
Justice Mendoza’s version is adopted, then situations like the one
which obtains in the Commission will definitely be replicated in gross
breach of the Constitution and in clear contravention of the intent of
its framers. Presidents in the future can easily control the
Commission depriving it of its independence and impartiality.
To sum up, the Court restates its ruling on Sec. 1(2), Art. IX(D) of the
Constitution, viz:
1. The appointment of members of any of the three constitutional
commissions, after the expiration of the uneven terms of office of the
first set of commissioners, shall always be for a fixed term of seven
(7) years; an appointment for a lesser period is void and
unconstitutional.
The appointing authority cannot validly shorten the full term of seven
(7) years in case of the expiration of the term as this will result in the
distortion of the rotational system prescribed by the Constitution.
2. Appointments to vacancies resulting from certain causes (death,
resignation, disability or impeachment) shall only be for the
unexpired portion of the term of the predecessor, but such
appointments cannot be less than the unexpired portion as this will
likewise disrupt the staggering of terms laid down under Sec. 1(2),
Art. IX(D).
3. Members of the Commission, e.g. COA, COMELEC or CSC, who
were appointed for a full term of seven years and who served the
entire period, are barred from reappointment to any position in the
Commission. Corollarily, the first appointees in the Commission
under the Constitution are also covered by the prohibition against
reappointment.
4. A commissioner who resigns after serving in the Commission for
less than seven years is eligible for an appointment to the position of
Chairman for the unexpired portion of the term of the departing
chairman. Such appointment is not covered by the ban on
reappointment, provided that the aggregate period of the length of
service as commissioner and the unexpired period of the term of the
predecessor will not exceed seven (7) years and provided further
that the vacancy in the position of Chairman resulted from death,
resignation, disability or removal by impeachment. The Court clarifies MA. FE V. BOMBASE, LOIDA D. LUCES, MARIO S. FRANCISCO,
that "reappointment" found in Sec. 1(2), Art. IX(D) means a AMADO V. MANUEL and ROLANDO G. GARCIA, incumbent
movement to one and the same office (Commissioner to members of the Board, AMADO G. PEREZ and MA. FE V.
Commissioner or Chairman to Chairman). On the other hand, an BOMBASE, incumbent General Manager and Secretary-Treasurer,
appointment involving a movement to a different position or office respectively, petitioners,
(Commissioner to Chairman) would constitute a new appointment vs.
and, hence, not, in the strict legal sense, a reappointment barred HON. CARLOS G. DOMINGUEZ, Secretary of Agriculture, Regional
under the Constitution. Director of Region IV of the Department of Agriculture ROGELIO P.
MADRIAGA, RECTO CORONADO and Municipal Mayor IGNACIO
5. Any member of the Commission cannot be appointed or R. BUNYE, both in his capacity as Municipal Mayor of Muntinlupa,
designated in a temporary or acting capacity. Metro Manila and as Presiding Officer of Sangguniang Bayan ng
Muntinglupa, and JOHN DOES, respondents.
WHEREFORE the petition is PARTLY GRANTED. The appointment
of then Commissioner Reynaldo A. Villar to the position of Chairman G.R. No. 91927 January 13, 1992
of the Commission on Audit to replace Guillermo N. Carague, whose
term of office as such chairman has expired, is hereby declared IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS G.
UNCONSTITUTIONAL for violation of Sec. 1(2), Art. IX(D) of the TENSUAN, VICTOR E. AGUINALDO, ALEJANDRO I. MARTINEZ,
Constitution. EPIFANIO A. ESPELETA, REY E. BULAY, LUCIO B.
CONSTANTINO, ROMAN E. NIEFES, NEMESIO O. MOZO,
SO ORDERED. ROGER SMITH, RUFINO B. JOAQUIN, NOLASCO I. DIAZ, RUFINO
IBE and NESTOR SANTOS, petitioners,
G.R. No. 85439 January 13, 1992 vs.
THE SANDIGANBAYAN, THE OMBUDSMAN and ROGER C.
KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BERBANO, Special Prosecutor III, respondents.
BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC.
(KBMBPM), TERESITA A. FAJARDO, NADYESDA B. PONSONES,
Jose O. Villanueva and Roberto B. Romanillos for petitioners in G.R.
No. 85439.
Alampay & Manhit Law Offices for petitioners in G.R. No. 91927.
DAVIDE, JR., J.:
These cases have been consolidated because they are closely
linked with each other as to factual antecedents and issues.
The first case, G.R. No. 85439 (hereinafter referred to as the
Kilusang Bayan case), questions the validity of the order of 28
October 1988 of then Secretary of Agriculture Hon. Carlos G.
Dominguez which ordered: (1) the take-over by the Department of
Agriculture of the management of the petitioner Kilusang Bayan sa
Paglilingkod Ng Mga Magtitinda ng Bagong Pamilihang Bayan ng
Muntilupa, Inc. (KBMBPM) pursuant to the Department's regulatory
and supervisory powers under Section 8 of P.D. No. 175, as
amended, and Section 4 of Executive Order No. 13, (2) the creation
of a Management Committee which shall assume the management
of KBMBPM upon receipt of the order, (3) the disbandment of the
Board of Directors, and (4) the turn over of all assets, properties and
records of the KBMBPM the Management Committee.
The second case. G.R. No. 91927 (hereinafter referred to as the
Bunye case), seeks the nullification of the Resolution of 4 January
1990 of the Sandiganbayan admitting the Amended Information
against petitioners in Criminal Case No. 13966 and denying their
motion to order or direct preliminary investigation, and its Resolution
of 1 February 1990 denying the motion to reconsider the former.
The procedural and factual antecedents are not disputed.
On 2 September 1985, the Municipal Government of Muntinlupa
(hereinafter, Municipality), Metro Manila, thru its then Mayor Santiago
Carlos, Jr., entered into a contract with the KILUSANG BAYAN SA
PAGLILINGKOD NG MGA MAGTITINDA SA BAGONG
PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM)
represented by its General Manager, Amado Perez, for the latter's
management and operation of the new Muntinlupa public market.
The contract provides for a twenty-five (25) year term commencing
on 2 September 1985, renewable for a like period, unless sooner
terminated and/or rescinded by mutual agreement of the parties, at a
monthly consideration of Thirty-Five Thousand Pesos (P35,000) to
be paid by the KBMBPM within the first five (5) days of each month
which shall, however, be increased by ten percent (10%) each year
during the first five (5) years only. 1
The KBMBPM is a service cooperative organized by and composed
of vendors occupying the New Muntinlupa Public Market in Alabang,
Muntinlupa, Metro Manila pursuant to Presidential Decree No. 175
and Letter of Implementation No. 23; its articles of incorporation and
by-laws were registered with the then Office of the Bureau of
Cooperatives Development (thereafter the Bureau of Agricultural
Cooperatives Development or BACOD and now the Cooperative
Development Authority). 2
Following his assumption into office as the new mayor succeeding
Santiago Carlos, Jr., petitioner Ignacio Bunye, claiming to be
particularly scandalized by the "virtual 50-year term of the
agreement, contrary to the provision of Section 143, paragraph 3 of
Batas Pambansa Blg. 337," and the "patently inequitable rental,"
directed a review of the aforesaid contract. 3 He sought opinions
from both the Commission on Audit and the Metro Manila
Commission (MMC) on the validity of the instrument. In separate
letters, these agencies urged that appropriate legal steps be taken
towards its rescission. The letter of Hon. Elfren Cruz of the MMC
even granted the Municipality authority "to take the necessary legal
steps for the cancellation/recission of the above cited contract and
make representations with KBMBPM for the immediate
transfer/takeover of the possession, management and operation of
the New Muntinlupa Market to the Municipal Government of
Muntinlupa." 4
Consequently, upon representations made by Bunye with the
Municipal Council, the latter approved on 1 August 1988 Resolution
No. 45 abrogating the contract. To implement this resolution, Bunye,
together with his co-petitioners and elements of the Capital
Command of the Philippine Constabulary, proceeded, on 19 August
1986, to the public market and announced to the general public and
the stallholders thereat that the Municipality was taking over the
management and operation of the facility, and that the stallholders
should henceforth pay their market fees to the Municipality, thru the
Market Commission, and no longer to the KBMBPM. 5
On 22 August 1988, the KBMBPM filed with Branch 13 of the
Regional Trial Court of Makati a complaint for breach of contract,
specific performance and damages with prayer for a writ of
preliminary injunction against the Municipality and its officers, which
was docketed as Civil Case No. 88-1702. 6 The complaint was
premised on the alleged illegal take-over of the public market
effected "in excess of his (Bunye's) alleged authority" and thus
"constitutes breach of contract and duty as a public official."
The writ applied for having been denied, 7 the KBMBPM officers
resisted the attempts of Bunye and company to complete the take-
over; they continued holding office in the KBS building, under their
respective official capacities. The matter having been elevated to this
Court by way of certiorari, 8 We remanded the same to the Court of
Appeals which docketed it as C.A.-G.R. No. L-16930. 9
On 26 August 1988, Amado Perez filed with the Office of the
Ombudsman a letter-complaint charging Bunye and his co-
petitioners with oppression, harassment, abuse of authority and
violation of the Anti-Graft and Corrupt Practices Act 10 for taking
over the management and operation of the public market from
KBMBPM. 11
In a subpoena dated 7 October 1988, prosecutor Mothalib C. Onos
of the Office of the Special Prosecutor directed Bunye and his co-
petitioners to submit within ten (10) days from receipt thereof
counter-affidavits, affidavits of their witnesses and other supporting
documents. 12 The subpoena and letter-complaint were received on
12 October 1988.
On 20 October 1988, two (2) days before the expiration of the period
granted to file said documents, Bunye, et al. filed by mail an urgent
motion for extension of "at least fifteen (15) days from October 22,
1988" within which to comply 13 with the subpoena.
Thereafter, the following transpired which subsequently gave rise to
these petitions:
G.R. No. 85439
In the early morning of 29 October 1988, a Saturday, respondent
Madriaga and Coronado, allegedly accompanied by Mayor Bunye
and the latters' heavily armed men, both in uniform and in civilian
clothes, together with other civilians, namely: Romulo Bunye II,
Alfredo Bunye, Tomas Osias, Reynaldo Camilon, Benjamin
Taguibao, Benjamin Bulos and other unidentified persons, allegedly
through force, violence and intimidation, forcibly broke open the
doors of the offices of petitioners located at the second floor of the
KBS Building, new Muntinlupa Public Market, purportedly to serve
upon petitioners the Order of respondent Secretary of Agriculture
dated 28 October 1988, and to implement the same, by taking over
and assuming the management of KBMBPM, disbanding the then
incumbent Board of Directors for that purpose and excluding and
prohibiting the General Manager and the other officers from
exercising their lawful functions as such. 14 The Order of the
Secretary reads as follows: 15
ORDER
WHEREAS, the KILUSANG BAYAN SA PAGLILINGKOD NG MGA
MAGTITINDA NG BAGONG PAMILIHANG BAYAN NG
MUNTINLUPA, INC., (KBMBPM), Alabang, Muntinlupa, Metro Manila
is a Cooperative registered under the provisions of Presidential
Decree No. 175, as amended;
WHEREAS, the Department of Agriculture is empowered to regulate
and supervise cooperatives registered under the provisions of
Presidential Decree No. 175, as amended;
 1. THAT a Management Committee is hereby created
WHEREAS, the general membership of the KBMBPM has petitioned composed of the following:
the Department of Agriculture for assistance in the removal of the
members of the Board of Directors who were not elected by the a) Reg. Dir. or OIC RD — DA Region IV
general membership of said cooperative;
b) Atty. Rogelio P. Madriaga — BACOD
WHEREAS, the on-going financial and management audit of the
Department of Agriculture auditors show (sic) that the management c) Mr. Recto Coronado — KBMBPM
of the KBMBPM is not operating that cooperative in accordance with
PD. 175, LOI No. 23, the Circulars issued by DA/BACOD and the d) Mrs. Nadjasda Ponsones — KBMBPM
provisions of the by-laws of KBMBPM;
e) One (1) from the Municipal Government of Muntinlupa to be
WHEREAS, the interest of the public so demanding it is evident and designated by the Sangguniang Pambayan ng Muntinlupa;
urgently necessary that the KBMBPM MUST BE PLACED UNDER
MANAGEMENT TAKE-OVER of the Department of Agriculture in 2. THAT the Management Committee shall, upon receipt of this
order to preserve the financial interest of the members of the Order, assume the management of KBMBPM;
cooperative and to enhance the cooperative development program of
the government; 3. THAT the present Board of Directors is hereby disbanded
and the officers and Manager of the KBMBPM are hereby directed to
WHEREAS, it is ordered that the Department of Agriculture in the turnover all assets, properties and records of the KBMBPM to the
exercise of its regulatory and supervisory powers under Section 8 of Management Committee herein created;
PD 175, as amended, and Section 4 of Executive Order No. 113,
take over the management of KBMBPM under the following 4. THAT the Management Committee is hereby empowered to
directives: promulgate rules of procedure to govern its workings as a body;
5. THAT the Management Committee shall submit to the
undersigned thru the Director of BACOD monthly reports on the
operations of KBMBPM;
6. THAT the Management Committee shall call a General
Assembly of all registered members of the KBMBPM within Ninety
(90) days from date of this Order to decide such matters affecting the
KBMBPM, including the election of a new set of Board of Director
(sic).
This Order takes effect immediately and shall continue to be in force
until the members of the Board of Directors shall have been duly
elected and qualified.
Done this 28th day of October, 1988 at Quezon City.
As claimed by petitioners, the Order served on them was not written
on the stationary of the Department, does not bear its seal and is a
mere xerox copy.
The so-called petition upon which the Order is based appears to be
an unverified petition dated 10 October 1988 signed, according to
Mayor Bunye, 16 by 371 members of the KBMBPM.
On 2 November 1988, petitioners filed the petition in this case
alleging, inter alia, that:
(a) Respondent Secretary acted without or in excess of
jurisdiction in issuing the Order for he arrogated unto himself a
judicial function by determining the alleged guilt of petitioners on the
strength of a mere unverified petition; the disbandment of the Board
of Directors was done without authority of law since under Letter of
Implementation No. 23, removal of officers, directors or committee
members could be done only by the majority of the members entitled
to vote at an annual or special general assembly and only after an
opportunity to be heard at said assembly.
(b) Respondent Secretary acted in a capricious, whimsical,
arbitrary and despotic manner, so patent and gross that it amounted
to a grave abuse of discretion.
(c) The Order is a clear violation of the By-Laws of KBMBPM
and is likewise illegal and unlawful for it allows or tolerates the
violation of the penal provisions under paragraph (c), Section 9 of
P.D. No. 175.
(d) The Order is a clear violation of the constitutional right of the
individual petitioners to be heard. 17
They pray that upon the filing of the petition, respondents, their
agents, representatives or persons acting on their behalf be ordered
to refrain, cease and desist from enforcing and implementing the
questioned Order or from excluding the individual petitioners from the
exercise of their rights as such officers and, in the event that said
acts sought to be restrained were already partially or wholly done, to
immediately restore the management and operation of the public
market to petitioners, order respondents to vacate the premises and,
thereafter, preserve the status quo; and that, finally, the challenged
Order be declared null and void.
In the Resolution of 9 October 1988, 18 We required the respondents
to Comment on the petition. Before any Comment could be filed,
petitioners filed on 2 January 1989 an Urgent Ex-Parte Motion
praying that respondent Atty. Rogelio Madriaga, who had assumed
the position of Chairman of the Management Committee, be ordered
to stop and/or cancel the scheduled elections of the officers of the
KBMBPM on 6 January 1989 and, henceforth, desist from scheduling
any election of officers or Members of the Board of Directors thereof
until further orders on the Court. 19 The elections were,
nevertheless, held and a new board of directors was elected. So, on
19 January 1989, petitioners filed a supplemental motion 20 praying
that respondent Madriaga and the "newly elected Board of Directors
be ordered to cease and desist from assuming, performing or
exercising powers as such, and/or from removing or replacing the
counsels of petitioners as counsels for KBMBPM and for Atty.
Fernando Aquino, Jr., to cease and desist from unduly interfering
with the affairs and business of the cooperative."
Respondent Bunye, by himself, filed his Comment on 23 January
1989. 21 He denies the factual allegations in the petition and claims
that petitioners failed to exhaust administrative remedies. A reply
thereto was filed by petitioners on 7 February 1989. 22
Respondent Recto Coronado filed two (2) Comments. The first was
filed on 6 February 1989 23 by his counsel, Atty. Fernando Aquino,
Jr., and the second, which is for both him and Atty. Madriaga, was
filed by the latter on 10 February 1989. 24
On 20 February 1989, petitioners filed a Reply to the first Comment
of Coronado 25 and an Ex-Parte Motion for the immediate issuance
of a cease and desist order 26 praying that the so-called new
directors and officers of KBMBPM, namely: Tomas M. Osias,
Ildefonso B. Reyes, Paulino Moldez, Fortunato M. Medina, Aurora P.
del Rosario, Moises Abrenica, and Lamberto Casalla, be ordered to
immediately cease and desist from filing notices of withdrawals or
motions to dismiss cases filed by the Cooperative now pending
before the courts, administrative offices and the Ombudsman and
Tanodbayan, and that if such motions or notices were already filed,
to immediately withdraw and desist from further pursuing the same
until further orders of this Court. The latter was precipitated by the
Resolution No. 19 of the "new" board of directors withdrawing all
cases filed by its predecessors against Bunye, et al., and more
particularly the following cases: (a) G.R. No. 85439 (the instant
petition), (b) Civil Case No. 88-1702, (c) OSP Case No. 88-2110
before the Ombudsman, (d) IBP Case No. 88-0119 before the
Tanodbayan, and Civil Case No. 88-118 for Mandamus. 27
On 1 March 1989, We required the Solicitor General to file his
Comment to the petition and the urgent motion for the immediate
issuance of a cease and desist order. 28
A motion to dismiss the instant petition was filed on 30 March 1989.
29 On 19 April 1989, We resolved to dismiss the case and consider it
closed and terminated. 30 Thereupon, after some petitioners filed a
motion for clarification and reconsideration, We set aside the
dismissal order and required the new directors to comment on the
Opposition to Motion to Dismiss filed by the former. 31
The new board, on 14 June 1989, prayed that its Manifestation of 6
June 1989 and Opposition dated 9 June 1989, earlier submitted it
response to petitioners' motion for reconsideration of the order
dismissing the instant petition, be treated as its Comment. 32 Both
parties then continued their legal fencing, serving several pleadings
on each other.
In Our Resolution of 9 August 1989, 33 We gave the petition due
course and required the parties to submit their respective
Memoranda.
On 14 August 1989, petitioners filed an urgent ex-parte motion for
the immediate issuance of a cease and desist order 34 in view of the
new board's plan to enter into a new management contract; the
motion was noted by this Court on 23 August 1989. A second ex-
parte motion, noted on 18 October 1989, was filed on 19 September
1989 asking this court to consider the "Invitation to pre-qualify and
bid" for a new contract published by respondent Bunye. 35
In a belated Comment 36 for the respondent Secretary of Agriculture
filed on 22 September 1989, the Office of the Solicitor General
asserts that individual petitioners, who were not allegedly elected by
the members or duly designated by the BACOD Director, have no
right or authority to file this case; the assailed Order of the Secretary
was issued pursuant to P.D. No. 175, more particularly Section 8
thereof which authorizes him "(d) to suspend the operation or cancel
the registration of any cooperative after hearing and when in its
judgment and based on findings, such cooperative is operating in
violation of this Decree, rules and regulations, existing laws as well
as the by-laws of the cooperative itself;" the Order is reasonably
necessary to correct serious flaws in the cooperative and provide
interim measures until election of regular members to the board and
officers thereof; the elections conducted on 6 January 1989 are valid;
and that the motion to dismiss filed by the new board of directors
binds the cooperative. It prays for the dismissal of the petition.
Respondent Secretary of Agriculture manifested on 22 September
1989 that he is adopting the Comment submitted by the Office of the
Solicitor General as his memorandum; 37 petitioners and
respondents Coronado and Madriaga filed their separate
Memoranda on 6 November 1989; 38 while the new board of
directors submitted its Memorandum on 11 December 1989. 39
The new KBMBPM board submitted additional pleadings on 16
February 1990 which it deemed relevant to the issues involved
herein. Reacting, petitioners filed a motion to strike out improper and
inadmissible pleadings and annexes and sought to have the pleaders
cited for contempt. Although We required respondents to comment,
the latter did not comply.
Nevertheless, a manifestation was filed by the same board on 25
February 1991 40 informing this Court of the holding, on 9 January
1991, of its annual general assembly and election of its board of
directors for 1991. It then reiterates the prayer that the instant
petition be considered withdrawn and dismissed. Petitioners filed a
counter manifestation alleging that the instant petition was already
given due course on 9 August 1989. 41 In its traverse to the counter
manifestation, the new board insists that it "did not derive authority
from the October 28, 1988 Order, the acts of the Management
Committee, nor (sic) from the elections held in (sic) January 6,
1989," but rather from the members of the cooperative who elected
them into office during the elections.
Petitioners filed a rejoinder asserting that the election of new
directors is not a supervening event independent of the main issue in
the present petition and that to subscribe to the argument that the
issues in the instant petition became moot with their assumption into
office is to reward a wrong done.
G. R. NO. 91927
Petitioners claim that without ruling on their 20 October 1988 motion
for an extension of at last 15 days from 22 October 1988 within which
to file their counter-affidavits, which was received by the Office of the
Special Prosecutor on 3 November 1988, Special Prosecutor Onos
promulgated on 11 November 1988 a Resolution finding the
evidence on hand sufficient to establish a prima facie case against
respondents (herein petitioners) and recommending the filing of the
corresponding information against them before the Sandiganbayan.
42 Petitioners also claim that they submitted their counter-affidavits
on 9 November 1988. 43
In their motion dated 2 December 1988, petitioners move for a
reconsideration of the above Resolution, 44 which was denied by
Onos 45 in his 18 January 1989 Order. The information against the
petitioners was attached to this order.
Upon submission of the records for his approval, the Ombudsman
issued a first indorsement on 4 April 1989 referring to "Judge
Gualberto J. de la Llana, Acting Director , IEO/RSSO, this Office, the
within records of OSP Case No. 88-02110 . . . for further preliminary
investigation . . ." 46
Thereafter, on 28 April 1989, Bunye and company received a
subpoena from de la Llana requiring them to appear before the latter
on 25 April 1989, 47 submit a report and file comment. After being
granted an extension, Bunye and company submitted their comment
on 18 May 1989. 48
On 22 August 1989, de la Llana recommended the filing of an
information for violation of section 3 (e) of the Anti-Graft and Corrupt
Practices Act. 49 The case was referred to special prosecuting
officer Jose Parentela, Jr. who, in his Memorandum 50 to the
Ombudsman through the Acting Special Prosecutor, likewise urged
that an information be filed against herein petitioners. On 3 October
1989, the Ombudsman signed his conformity to the Memorandum
and approved the 18 January information prepared by Onos, which
was then filed with the Sandiganbayan.
Consequently, Bunye, et al. were served arrest warrants issued by
the Sandiganbayan. Detained at the NBI on 9 October 1989, they
claim to have discovered only then the existence of documents
recommending and approving the filing of the complaint and a
memorandum by special prosecutor Bernardita G. Erum proposing
the dismissal of the same. 51
Arraignment was set for 18 October 1989. 52
However, on 14 October 1989, petitioners filed with the
Sandiganbayan an "Omnibus Motion to Remand to the Office of the
Ombudsman; to Defer Arraignment and to Suspend Proceedings."
53
Subsequently, through new counsel, petitioners filed on 17 October
1989 a Consolidated Manifestation and Supplemental Motion 54
praying, inter alia, for the quashal of the information on the ground
that they were deprived of their right to a preliminary investigation
and that the information did not charge an offense.
The Sandiganbayan issued an order on 18 October 1989 deferring
arraignment and directing the parties to submit their respective
memoranda, 55 which petitioners complied with on 2 November
1989. 56 On 16 November 1989, special Prosecutor Berbano filed a
motion to admit amended
information. 57
On 17 November 1989, the Sandiganbayan handed down a
Resolution 58 denying for lack of merit the Omnibus Motion to
Remand the Case To The Office of the Ombudsman, to Defer
Arraignment and to Suspend Proceedings. Petitioners then filed a
motion to order a preliminary investigation 59 on the basis of the
introduction by the amended information of new, material and
substantive allegations, which the special prosecutor opposed, 60
thereby precipitating a rejoinder filed by petitioners. 61
On 4 January 1990, the Sandiganbayan handed down a Resolution
62 admitting the Amended Information and denying the motion to
direct preliminary investigation. Their motion to reconsider this
Resolution having been denied in the Resolution of 1 February 1990,
63 petitioners filed the instant petition on 12 February 1990.
Petitioners claim that respondent Sandiganbayan acted without or in
excess of jurisdiction or with manifest grave abuse of discretion
amounting to lack of jurisdiction in denying petitioners their right to
preliminary investigation and in admitting the Amended Information.
They then pray that: (a) the 4 January and 1 February 1990
Resolutions of the Sandiganbayan, admitting the amended
information and denying the motion for reconsideration, respectively,
be annulled; (b) a writ be issued enjoining the Sandiganbayan from
proceeding further in Criminal Case No. 13966; and (c) respondents
be enjoined from pursuing further actions in the graft case.
We required the respondents to Comment on the petition.
On 21 February 1990, petitioners' counsel filed a motion to drop
Epifanio Espeleta and Rey E. Dulay as petitioners, 64 and in the
Comment they filed on 30 March 1990, in compliance with Our
Resolution of 1 March 1990, they state that they do not interpose any
objection to the motion.
On 20 March 1990, the Office of the Solicitor General moved that it
be excused from filing comment for the respondents as it cannot
subscribe to the position taken by the latter with respect to the
questions of law involved. 65 We granted this motion in the
resolution of 8 May 1990.
Respondent Berbano filed his comment on 10 September 1991 and
petitioners replied on 20 December 1990; Berbano subsequently
filed a Rejoinder thereto on 11 January 1991. 66 The Sandiganbayan
then filed a manifestation proposing that it be excused from filing
comment as its position
on the matters in issue is adequately stated in the resolutions sought
to be annulled. 67 On 7 March 1991, We resolved to note the
manifestation and order the instant petition consolidated with G.R.
No. 85439.
The present dispute revolves around the validity of the antecedent
proceedings which led to the filing of the original information on 18
January 1989 and the amended information afterwards.
THE ISSUES AND THEIR RESOLUTION
1. G. R. No. 85439.
As adverted to in the introductory portion of this Decision, the
principal issue in G.R. No. 85439 is the validity of the 28 October
1988 Order of respondent Secretary of Agriculture. The exordium of
said Order unerringly indicates that its basis is the alleged petition of
the general membership of the KBMBPM requesting the Department
for assistance "in the removal of the members of the Board of
Directors who were not elected by the general membership" of the
cooperative and that the "ongoing financial and management audit of
the Department of Agriculture auditors show (sic) that the
management of the KBMBPM is not operating that cooperative in
accordance with P.D. 175, LOI 23, the Circulars issued by
DA/BACOD and the provisions and by-laws of KBMBPM." It is also
professed therein that the Order was issued by the Department "in
the exercise of its regulatory and supervisory powers under Section 8
of P.D. 175, as amended, and Section 4 of Executive Order No.
113."
Respondents challenge the personality of the petitioners to bring this
action, set up the defense of non-exhaustion of administrative
remedies, and assert that the Order was lawfully and validly issued
under the above decree and Executive Order.
We find merit in the petition and the defenses interposed do not
persuade Us.
Petitioners have the personality to file the instant petition and ask, in
effect, for their reinstatement as Section 3, Rule 65 of the Rules of
Court, defining an action for mandamus, permits a person who has
been excluded from the use and enjoyment of a right or office to
which he is entitled, to file suit. 68 Petitioners, as ousted directors of
the KBMBPM, are questioning precisely the act of respondent
Secretary in disbanding the board of directors; they then pray that
this Court restore them to their prior stations.
As to failure to exhaust administrative remedies, the rule is well-
settled that this requirement does not apply where the respondent is
a department secretary whose acts, as an alter ego of the President,
bear the implied approval of the latter, unless actually disapproved
by him. 69 This doctrine of qualified political agency ensures speedy
access to the courts when most needed. There was no need then to
appeal the decision to the office of the President; recourse to the
courts could be had immediately. Moreover, the doctrine of
exhaustion of administrative remedies also yields to other
exceptions, such as when the question involved is purely legal, as in
the instant case, 70 or where the questioned act is patently illegal,
arbitrary or oppressive. 71 Such is the claim of petitioners which, as
hereinafter shown, is correct.
And now on the validity of the assailed Order.
Regulation 34 of Letter of Implementation No. 23 (implementing P.D.
No. 175) provides the procedure for the removal of directors or
officers of cooperatives, thus:
An elected officer, director or committee member may be removed
by a vote of majority of the members entitled to vote at an annual or
special general assembly. The person involved shall have an
opportunity to be heard.
A substantially identical provision, found in Section 17, Article III of
the KBMBPM's by-laws, reads:
Sec. 17. Removal of Directors and Committee Members. —
Any elected director or committee member may be removed from
office for cause by a majority vote of the members in good standing
present at the annual or special general assembly called for the
purpose after having been given the opportunity to be heard at the
assembly.
Under the same article are found the requirements for the holding of
both the annual general assembly and a special general assembly.
Indubitably then, there is an established procedure for the removal of
directors and officers of cooperatives. It is likewise manifest that the
right to due process is respected by the express provision on the
opportunity to be heard. But even without said provision, petitioners
cannot be deprived of that right.
The procedure was not followed in this case. Respondent Secretary
of Agriculture arrogated unto himself the power of the members of
the KBMBPM who are authorized to vote to remove the petitioning
directors and officers. He cannot take refuge under Section 8 of P.D.
No. 175 which grants him authority to supervise and regulate all
cooperatives. This section does not give him that right.
An administrative officer has only such powers as are expressly
granted to him and those necessarily implied in the exercise thereof.
72 These powers should not be extended by implication beyond what
may to necessary for their just and reasonable execution. 73
Supervision and control include only the authority to: (a) act directly
whenever a specific function is entrusted by law or regulation to a
subordinate; (b) direct the performance of duty; restrain the
commission of acts; (c) review, approve, reverse or modify acts and
decisions of subordinate officials or
units; (d) determine priorities in the execution of plans and programs;
and (e) prescribe standards, guidelines, plans and programs.
Specifically, administrative supervision is limited to the authority of
the department or its equivalent to: (1) generally oversee the
operations of such agencies and insure that they are managed
effectively, efficiently and economically but without interference with
day-to-day activities; (2) require the submission of reports and cause
the conduct of management audit, performance evaluation and
inspection to determine compliance with policies, standards and
guidelines of the department; (3) take such action as may be
necessary for the proper performance of official functions, including
rectification of violations, abuses and other forms of mal-
administration; (4) review and pass upon budget proposals of such
agencies but may not increase or add to them. 74
The power to summarily disband the board of directors may not be
inferred from any of the foregoing as both P.D. No. 175 and the by-
laws of the KBMBPM explicitly mandate the manner by which
directors and officers are to be removed. The Secretary should have
known better than to disregard these procedures and rely on a mere
petition by the general membership of the KBMBPM and an on-going
audit by Department of Agriculture auditors in exercising a power
which he does not have, expressly or impliedly. We cannot concede
to the proposition of the Office of the Solicitor General that the
Secretary's power under paragraph (d), Section 8 of P.D. No. 175
above quoted to suspend the operation or cancel the registration of
any cooperative includes the "milder authority of suspending officers
and calling for the election of new officers." Firstly, neither
suspension nor cancellation includes the take-over and ouster of
incumbent directors and officers, otherwise the law itself would have
expressly so stated. Secondly, even granting that the law intended
such as postulated, there is the requirement of a hearing. None was
conducted.
Likewise, even if We grant, for the sake of argument, that said power
includes the power to disband the board of directors and remove the
officers of the KBMBPM, and that a hearing was not expressly
required in the law, still the Order can be validly issued only after
giving due process to the affected parties, herein petitioners.
Due process is guaranteed by the Constitution 75 and extends to
administrative proceedings. In the landmark case of Ang Tibay vs.
Court of Industrial Relations, 76 this Court, through Justice Laurel,
laid down the cardinal primary requirements of due process in
administrative proceedings, foremost of which is the right to a
hearing, which includes the right to present one's case and submit
evidence in support thereof. The need for notice and the opportunity
to be heard is the heart of procedural due process, be it in either
judicial or administrative proceedings. 77 Nevertheless, a plea of a
denial of procedural due process does not lie where a defect
consisting in an absence of notice of hearing was thereafter cured by
the aggrieved party himself as when he had the opportunity to be
heard on a subsequent motion for reconsideration. This is consistent
with the principle that what the law prohibits is not the absence of
previous notice but the absolute absence thereof and lack of an
opportunity to be heard. 78
In the instant case, there was no notice of a hearing on the alleged
petition of the general membership of the KBMBPM; there was, as
well, not even a semblance of a hearing. The Order was based solely
on an alleged petition by the general membership of the KBMBPM.
There was then a clear denial of due process. It is most unfortunate
that it was done after democracy was restored through the peaceful
people revolt at EDSA and the overwhelming ratification of a new
Constitution thereafter, which preserves for the generations to come
the gains of that historic struggle which earned for this Republic
universal admiration.
If there were genuine grievances against petitioners, the affected
members should have timely raise these issues in the annual general
assembly or in a special general assembly. Or, if such a remedy
would be futile for some reason or another, judicial recourse was
available.
Be that as it may, petitioners cannot, however, be restored to their
positions. Their terms expired in 1989, thereby rendering their prayer
for reinstatement moot and academic. Pursuant to Section 13 of the
by-laws, during the election at the first annual general assembly after
registration, one-half plus one (4) of the directors obtaining the
highest number of votes shall serve for two years, and the remaining
directors (3) for one year; thereafter, all shall be elected for a term of
two years. Hence, in 1988, when the board was disbanded, there
was a number of directors whose terms would have expired the next
year (1989) and a number whose terms would have expired two
years after (1990). Reversion to the status quo preceding 29 October
1988 would not be feasible in view of this turn of events. Besides,
elections were held in 1990 and 1991. 79 The affairs of the
cooperative are presently being managed by a new board of
directors duly elected in accordance with the cooperative's by-laws.
2. G. R. No. 91927.
The right of an accused to a preliminary investigation is not among
the rights guaranteed him in the Bill of Rights. As stated in Marcos, et
al. vs. Cruz, 80 "the preliminary investigation in criminal cases is not
a creation of the Constitution; its origin is statutory and it exists and
the right thereto can be invoked when so established and granted by
law. It is so specifically granted by procedural law. 81 If not waived,
absence thereof may amount to a denial of due process. 82
However, lack of preliminary investigation is not a ground to quash or
dismiss a complaint or information. Much less does it affect the
court's jurisdiction. In People vs. Casiano, 83 this Court ruled:
Independently of the foregoing, the absence of such investigation
[preliminary] did not impair the validity of the information or otherwise
render it defective. Much less did it affect the jurisdiction of the court
of first instance over the present case. Hence, had the defendant-
appellee been entitled to another preliminary investigation, and had
his plea of not guilty upon arraignment not implied a waiver of said
right, the court of first instance should have, either conducted such
preliminary investigation, or ordered the Provincial Fiscal to make it,
in pursuance of section 1687 of the Revised Administrative Code (as
amended by Republic Act No. 732), or remanded the record for said
investigation to the justice of the peace court, instead of dismissing
the case as it did in the order appealed from.
This doctrine was thereafter reiterated or affirmed in several case. 84
In the instant case, even if it is to be conceded for argument's sake
that there was in fact no preliminary investigation,
Sandiganbayan, per Doromal vs. Sandiganbayan, 85 "should merely
suspend or hold in abeyance proceedings upon the questioned
Amended Information and remand the case to the Office of the
Ombudsman for him to conduct a preliminary investigation."
It is Our view, however, that petitioners were not denied the right to
preliminary investigation. They, nevertheless, insist that
preliminary investigation conducted by the Office of the Special
Prosecutor existed more in form than in substance. This is anchored
on the failure by prosecutor Onos to consider the counter-affidavits
filed by petitioners. The same sin of omission is ascribed to Acting
Director de la Llana who purportedly failed to consider the comments
submitted by the petitioners pursuant to a subpoena dated 13 April
1989. The failure of special prosecutor Berbano to conduct a
preliminary investigation before amending the information is also
challenged.
It is finally urged that the Sandiganbayan completely disregarded the
"glaring anomaly that on its face the Information filed by the Office of
the Special Prosecutor" was prepared and subscribed on 18 January
1989, while the records indicate that the preliminary investigation
was concluded on 3 October 1989.
In his Comment, respondent Berbano dispassionately traces the
the genesis of the criminal information filed before the Sandiganbayan.
His assessment that a preliminary investigation sufficient in
substance and manner was conducted prior to the filing of the
information reflects the view of the Sandiganbayan, maintained in
both the 17 November 1989 and 4 January 1990 resolutions, that
there was compliance with the requirements of due process.
the Petitioners were provided a reasonable period within which to submit
their counter-affidavits; they did not avail of the original period; they
moved for an extension of at least fifteen (15) days from 22 October
1988. Despite the urgency of its nature, the motion was sent by mail.
The extension prayed for was good up to 6 November 1988. But, as
admitted by them, they filed the Counter-Affidavits only on 9
November 1988. Yet, they blamed prosecutor Onos for promulgating
the 11 November 1989 Resolution and for, allegedly, not acting on
the motion. Petitioners then should not lay the blame on Onos; they
should blame themselves for presuming that the motion would be
granted.
This notwithstanding, petitioners were able to file a Motion for
Reconsideration on 13 December 1988 requesting that the reviewing
prosecutor consider the belatedly filed documents; 86 thus, there is
the recommendation of prosecutor Bernardita Erum calling for the
dismissal of the charges on 2 March 1989, which, however, was not
sustained upon subsequent review. The Sandiganbayan, in its 17
November 1989 Resolution, succinctly summed up the matter when
it asserted that "even granting, for the sake of argument, that
prosecutor Onos . . . failed to consider accused-movants' counter-
affidavits, such defect was cured when a "Motion for
Reconsideration" was filed, and
which . . . de la Llana took into account upon review."
It may not then be successfully asserted that the counter-affidavits
were not considered by the Ombudsman in approving the
information. Perusal of the factual antecedents reveals that a second
investigation was conducted upon the "1st Indorsement" of the
Ombudsman of 4 April 1989. As a result, subpoenas were issued
and comments were asked to be submitted, which petitioners did, but
only after a further extension of fifteen (15) days from the expiration
of the original deadline. From this submission the matter underwent
further review.
Moreover, in the 18 January 1989 Order of prosecutor Onos, there
was an ample discussion of the defenses raised by the petitioners in
their counter-affidavits, thus negating the charge that the issues
raised by them were not considered at all. 87
It is indisputable that the respondents were not remiss in their duty to
afford the petitioners the opportunity to contest the charges thrown
their way. Due process does not require that the accused actually file
his counter-affidavits before the preliminary investigation is deemed
completed. All that is required is that he be given the opportunity to
submit such if he is so minded. 88
In any event, petitioners did in fact, although belatedly, submit their
counter-affidavits and as a result thereof, the prosecutors concerned
considered them in subsequent reviews of the information,
particularly in the re-investigation ordered by the Ombudsman.
And now, as to the protestation of lack of preliminary investigation
prior to the filing of the Amended Information. The prosecution may
amend the information without leave of court before arraignment, 89
and such does not prejudice the accused. 90 Reliance on the
pronouncements in Doromal vs. Sandiganbayan 91 is misplaced as
what obtained therein was the preparation of an entirely new
information as contrasted with mere amendments introduced in the
amended information, which also charges petitioners with violating
Section 3 (e) of the Anti-Graft Law.
In Gaspar vs. Sandiganbayan, 92 We held that there is no rule or law 2. DISMISSING, for lack of merit, the petition in G.R. No.
requiring the Tanodbayan to conduct another preliminary 91927.
investigation of a case under review by it. On the contrary, under
P.D. No. 911, in relation to Rule 12, Administrative Order No. VII, the No pronouncement as to costs.
Tanodbayan may, upon review, reverse the findings of the
investigator and thereafter "where he finds a prima facie case, to IT IS SO ORDERED.
cause the filing of an information in court against the respondent,
based on the same sworn statements or evidence submitted, without G.R. No. 96409 February 14, 1992
the necessity of conducting another preliminary investigation."
CITIZEN J. ANTONIO M. CARPIO, petitioner,
Respondent Sandiganbayan did not then commit any grave abuse of vs.
discretion in respect to its Resolutions of 4 January 1990 and 1 THE EXECUTIVE SECRETARY, THE SECRETARY OF LOCAL
February 1990. GOVERNMENTS, THE SECRETARY OF NATIONAL DEFENSE
and THE NATIONAL TREASURER, respondents.
The petition then must fail.

CONCLUSION PARAS, J.:

WHEREFORE, judgment is hereby rendered: At the very outset, it should be well to set forth the constitutional
provision that is at the core of the controversy now confronting us,
1. GRANTING the petition in G.R. No. 85439; declaring null thus:
and void the challenged Order of 28 October 1988 of the respondent
Secretary of Agriculture; but denying, for having become moot and Article XVI, Section 6:
academic, the prayer of petitioners that they be restored to their
positions in the KBMBPM.
The State shall establish and maintain one police force, which stall
be national in scope and civilian in character, to be administered and
controlled by a national police commission. The authority of local
executives over the police units in their jurisdiction shall be provided
by law. 1
With the aforequoted provision in mind, Congress passed Republic
Act No. 6975 entitled "AN ACT ESTABLISHING THE PHILIPPINE
NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF
THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER
PURPOSES" as the consolidated version of House Bill No. 23614
and Senate Bill No. 463.
Following the said Act's approval by President Corazon C. Aquino on
December 13, 1990, it was published on December 17, 1990. 2
Presently, however, petitioner as citizen, taxpayer and member of
the Philippine Bar sworn to defend the Constitution, filed the petition
now at bar on December 20, 1990, seeking this Court's declaration
of unconstitutionality of RA 6975 with prayer for temporary
restraining order.
But in an en banc resolution dated December 27, 1990, We simply
required the public respondents to file their Comment, without
however giving due course to the petition and the prayer therein.
Hence, the Act took effect after fifteen days following its publication,
or on January 1, 1991. 3
Before we settle down on the merits of the petition, it would likewise
be well to discuss albeit briefly the history of our police force and the
reasons for the ordination of Section 6, Article XVI in our present
Constitution.
During the Commonwealth period, we had the Philippine
Constabulary as the nucleus of the Philippine Ground Force (PGF),
now the Armed Forces of the Philippines (AFP). The PC was made
part of the PGF but its administrative, supervisory and directional
control was handled by the then Department of the Interior. After the
war, it remained as the "National Police" under the Department of
National Defense, as a major service component of the AFP. 4
Later, the Integration Act of 1975 5 created the Integrated National
Police (INP) under the Office of the President, with the PC as the
nucleus, and the local police forces as the civilian components. The
PC-INP was headed by the PC Chief who, as concurrent Director-
General of the INP, exercised command functions over the INP. 6
The National Police Commission (NAPOLCOM) 7 exercised
administrative control and supervision while the local executives
exercised operational supervision and direction over the INP units
assigned within their respective localities. 8
The set-up whereby the INP was placed under the command of the
military component, which is the PC, severely eroded the INP's
civilian character and the multiplicity in the governance of the PC-INP
resulted in inefficient police service. 9 Moreover, the integration of
the national police forces with the PC also resulted in inequities since
the military component had superior benefits and privileges. 10
The Constitutional Commission of 1986 was fully aware of the
structural errors that beset the system. Thus, Com. Teodulo C.
Natividad explained that:
xxx xxx xxx
MR. NATIVIDAD. . . . The basic tenet of a modern police
organization is to remove it from the military. 11
xxx xxx xxx
Here in our draft Constitution, we have already made a constitutional
postulate that the military cannot occupy any civil service position [in
Section 6 of the Article on the Civil Service 12] Therefore, in keeping
with this and because of the universal acceptance that a police force
is a civilian function, a public service, and should not be performed
by military force, one of the basic reforms we are presenting here is
that it should be separated from the military force which is the PC. 13
xxx xxx xxx
Furthermore:
xxx xxx xxx
. . . the civilian police cannot blossom into full profession because
most of the key positions are being occupied by the military So, it is
up to this Commission to remove the police from such a situation so
that it can develop into a truly professional civilian police. . . . 14
Hence, the "one police force, national in scope, and civilian in
character" provision that is now Article XVI, Section 6 of the 1987
Constitution.
And so we now come to the merits of the petition at hand.
In the main, petitioner herein respectfully advances the view that RA
6975 emasculated the National Police Commission by limiting its
power "to administrative control" over the Philippine National Police
(PNP), thus, "control" remained with the Department Secretary under
whom both the National Police Commission and the PNP were
placed. 15
We do not share this view.

To begin with, one need only refer to the fundamentally accepted
principle in Constitutional Law that the President has control of all
executive departments, bureaus, and offices to lay at rest petitioner's
contention on the matter.
This presidential power of control over the executive branch of
government extends over all executive officers from Cabinet
Secretary to the lowliest clerk 17 and has been held by us, in the
landmark case of Mondano vs. Silvosa, 18 to mean "the power of
[the President] to alter or modify or nullify or set aside what a
subordinate officer had done in the performance of his duties and to
substitute the judgment of the former with that of the latter." It is said
to be at the very "heart of the meaning of Chief Executive." 19
Equally well accepted, as a corollary rule to the control powers of the
President, is the "Doctrine of Qualified Political Agency". As the
President cannot be expected to exercise his control powers all at
the same time and in person, 20 he will have to delegate some of
them to his Cabinet members.
Under this doctrine, which recognizes the establishment of a single
executive, 21 "all 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 on 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, unless disapproved or reprobated by
the Chief Executive presumptively the acts of the Chief Executive."
22 (emphasis ours)
Thus, and in short, "the President's power of control is directly
exercised by him over the members of the Cabinet who, in turn, and
by his authority, control the bureaus and other offices under their
respective jurisdictions in the executive department." 23
Additionally, the circumstance that the NAPOLCOM and the PNP are
placed under the reorganized Department of Interior and Local
Government is merely an administrative realignment that would
bolster a system of coordination and cooperation among the
citizenry, local executives and the integrated law enforcement
agencies and public safety agencies created under the assailed Act,
24 the funding of the PNP being in large part subsidized by the
national government.
Such organizational set-up does not detract from the mandate of the
Constitution that the national police force shall be administered and
controlled by a national police commission as at any rate, and in fact,
the Act in question adequately provides for administration and control the Chief of the PNP may be delegated to subordinate officials with
at the commission level, as shown in the following provisions, to wit: respect to the units under their respective commands, in accordance
with the rules and regulations prescribed by the Commission. . . .
Sec. 14. Powers and Functions of the Commission. — The
Commission shall exercise the following powers and functions: xxx xxx xxx

xxx xxx xxx Sec. 35. . . . To enhance police operational efficiency and
effectiveness, the Chief of the PNP may constitute such other
(i) Approve or modify plans and programs on education and support units as may be necessary subject to the approval of the
training, logistical requirements, communications, records, Commission. . . .
information systems, crime laboratory, crime prevention and crime
reporting; xxx xxx xxx

(j) Affirm, reverse or modify, through the National Appellate Sec. 37. . . . There shall be established a performance
Board, personnel disciplinary actions involving demotion or dismissal evaluation system which shall be administered in accordance with
from the service imposed upon members of the Philippine National the rules, regulations and standards; and a code of conduct
Police by the Chief of the PNP; promulgated by the Commission for members of the PNP. . . .

(k) Exercise appellate jurisdiction through .the regional. xxx xxx xxx
appellate boards over administrative cases against policemen and
over decisions on claims for police benefits; Petitioner further asserts that in manifest derogation of the power of
control of the NAPOLCOM over the PNP, RA 6975 vested the power
xxx xxx xxx to choose the PNP Provincial Director and the Chiefs of Police in the
Governors and Mayors, respectively; the power of "operational
Sec. 26. The Command and direction of the PNP shall be supervision and control" over police units in city and municipal
vested in the Chief of the PNP . . . Such command and direction of mayors; in the Civil Service Commission, participation in
appointments to the positions of Senior Superintendent to Deputy the court in considering the validity of the statute in question should
Director-General as well as the administration of qualifying entrance give it such reasonable construction as can be reached to bring it
examinations; disciplinary powers over PNP members in the within the fundamental
"People's Law Enforcement Boards" and in city and municipal law. 28
mayors. 25
Under the questioned provisions, which read as follows:
Once more, we find no real controversy upon the foregoing
assertions. D. PARTICIPATION OF LOCAL EXECUTIVES IN THE
ADMINISTRATION OF THE PNP.
It is true that when the Constitutional Commissioners of 1986
provided that the authority of local executives over the police units in Sec. 51. Powers of Local Government Officials over the PNP
their jurisdiction shall be provided by law, they intended that the day- Units or Forces.
to-day functions of police work like crime, investigation, crime
prevention activities, traffic control, etc., would be under the Governors and mayors shall be deputized as representatives of the
operational control of the local executives as it would not be Commission in their respective territorial jurisdictions. As such, the
advisable to give full control of the police to the local executives. 26 local executives shall discharge the following functions:

They reasoned that in the past, this gave rise to warlordism, a.) Provincial Governor — (1) . . .
bossism, and sanctuaries for vices and abuses. 27
The provincial governor shall choose the provincial director from a
It would appear then that by vesting in the local executives the power list of three (3) eligibles recommended by the PNP Regional Director.
to choose the officers in question, the Act went beyond the bounds of
the Constitution's intent. 4) . . . City and municipal mayors shall have the following authority
over the PNP units in their respective jurisdictions:
Not so. We find light in the principle of constitutional construction that
every presumption should be indulged in favor of constitutionality and
i.) Authority to choose the chief of police from a list of five (5)
eligibles recommended by the Provincial Police Director. . . .
(Emphasis ours)
full control remains with the National Police Commission.
We agree, and so hold, with the view of the Solicitor General that
"there is no usurpation of the power of control of the NAPOLCOM
under Section 51 because under this very same provision, it is clear
that the local executives are only acting as representatives of the
NAPOLCOM. . . . As such deputies, they are answerable to the
NAPOLCOM for their actions in the exercise of their functions under
that section. Thus, unless countermanded by the NAPOLCOM, their
acts are valid and binding as acts of the NAPOLCOM." 29 It is
significant to note that the local officials, as NAPOLCOM
representatives, will choose the officers concerned from a list of
eligibles (those who meet the general qualifications for appointment
to the PNP) 30 to be recommended by PNP officials.
The same holding is true with respect to the contention on the
operational supervision and control exercised by the local officials.
Those officials would simply be acting as representatives of the
Commission.
As regards the assertion involving the Civil Service Commission,
suffice it to say that the questioned provisions, which read:
Sec. 31. Appointment of PNP Officers and Members. — The
Appointment of the officers and members of the PNP shall be
effected in the following manner:
a.) Police Officer I to Senior Police Officer IV. — Appointed by
the PNP regional director for regional personnel or by the Chief of
the PNP for national headquarters personnel and attested by the
Civil Service Commission;
b.) Inspector to Superintendent. — Appointed by the Chief of the
PNP, as recommended by their immediate superiors, and attested by
the Civil Service Commission;
c.) Senior Superintendent to Deputy Director-General. —
Appointed by the President upon recommendation of the Chief of the
PNP, with proper endorsement by the Chairman of the Civil Service
Commission . . .
Sec. 32. Examinations for Policemen. — The Civil Service
Commission shall administer the qualifying entrance examinations
for policemen on the basis of the standards set by the NAPOLCOM.
precisely underscore the civilian character of the national police
force, and will undoubtedly professionalize the same.
The grant of disciplinary powers over PNP members to the "People's
Law Enforcement Boards" (or the PLEB) and city and municipal
mayors is also not in derogation of the commission's power of control
over the PNP.
Pursuant to the Act, the Commission exercises appellate jurisdiction,
thru the regional appellate boards, over decisions of both the PLEB
and the said mayors. This is so under Section 20(c). Furthermore, it
is the Commission which shall issue the implementing guidelines and
procedures to be adopted by the PLEB for in the conduct of its
hearings, and it may assign NAPOLCOM hearing officers to act as
legal consultants of the PLEBs (Section 43-d4, d5).
As a disciplinary board primarily created to hear and decide citizen's
complaints against erring officers and members of the PNP, the
establishment of PLEBs in every city, and municipality would all the
more help professionalize the police force.
Petitioner would likewise have this Court imagine that Section 12 of
the questioned Act, the pertinent portion of which reads:
Sec. 12. Relationship of the Department with the Department
of National Defense. — During a period of twenty- four (24) months
from the effectivity of this Act, the Armed Forces of the Philippines
(AFP) shall continue its present role of preserving the internal and
external security of the State: Provided, that said period may be
extended by the President, if he finds it justifiable, for another period
not exceeding twenty-four (24) months, after which, the Department
shall automatically take over from the AFP the primary role of
preserving internal security, leaving to the AFP its primary role of
preserving external security.
xxx xxx xxx
constitutes an "encroachment upon, interference with, and an
abdication by the President of, executive control and commander-in-
chief powers."
That We are not disposed to do for such is not the case at all here. A
rejection thus of petitioner's submission anent Section 12 of the Act
should be in order in the light of the following exchanges during the
CONCOM deliberations of Wednesday, October 1, 1986:
xxx xxx xxx
MR. RODRIGO.Just a few questions. The President of the
Philippines is the Commander-in-Chief of all the armed forces.
MR. NATIVIDAD. Yes, Madam President.

MR. RODRIGO.Since the national police is not integrated with the
armed forces, I do not suppose they come under the Commander-in-
Chief powers of the President of the Philippines.
MR. NATIVIDAD. They do, Madam President. By law they are under
the supervision and control of the President of the Philippines.
MR. RODRIGO.Yes, but the President is not the Commander-in-
Chief of the national police.
MR. NATIVIDAD. He is the President.
MR. RODRIGO.Yes, the Executive. But they do not come under that
specific provision that the President is Commander-in-Chief of all the
armed forces.
MR. NATIVIDAD. No, not under the Commander-in-Chief provision.
MR. RODRIGO.There are two other powers of the President. The
President has control over departments, bureaus and offices, and
supervision over local governments. Under which does the police fall,
under control or under supervision?
MR. NATIVIDAD. Both, Madam President.
MR. RODRIGO.Control and Supervision.
MR. NATIVIDAD. Yes, in fact, the National Police Commission is
under the Office of the President. (CONCOM RECORDS, Vol. 5, p.
296)
It thus becomes all too apparent then that the provision herein
assailed precisely gives muscle to and enforces the proposition that
the national police force does not fall under the Commander-in-Chief
powers of the President. This is necessarily so since the police force,
not being integrated with the military, is not a part of the Armed
Forces of the Philippines. As a civilian agency of the government, it
properly comes within, and is subject to, the exercise by the
President of the power of executive control.
Consequently, Section 12 does not constitute abdication of
commander-in-chief powers. It simply provides for the transition
period or process during which the national police would gradually
assume the civilian function of safeguarding the internal security of
the State. Under this instance, the President, to repeat, abdicates
nothing of his war powers. It would bear to here state, in reiteration of
the preponderant view, that the President, as Commander-in-Chief,
is not a member of the Armed Forces. He remains a civilian whose
duties under the Commander-in-Chief provision "represent only a
part of the organic duties imposed upon him. All his other functions
are clearly civil in nature." 31 His position as a civilian Commander-
in-Chief is consistent with, and a testament to, the constitutional
principle that "civilian authority is, at all times, supreme over the
military." (Article II, Section 3, 1987 Constitution)
Finally, petitioner submits that the creation of a "Special Oversight
Committee" under Section 84 of the Act, especially the inclusion
therein of some legislators as members (namely: the respective
Chairmen of the Committee on Local Government and the
Committee on National Defense and Security in the Senate, and the
respective Chairmen of the Committee on Public Order and Security
and the Committee on National Defense in the House of
Representatives) is an "unconstitutional encroachment upon and a
diminution of, the President's power of control over all executive
departments, bureaus and offices."
But there is not the least interference with the President's power of
control under Section 84. The Special Oversight Committee is simply
an ad hoc or transitory body, established and tasked solely with
planning and overseeing the immediate "transfer, merger and/or
absorption" into the Department of the Interior and Local
Governments of the "involved agencies." This it will undertake in
accordance with the phases of implementation already laid down in
Section 85 of the Act and once this is carried out, its functions as well
as the committee itself would cease altogether. 32 As an ad hoc
body, its creation and the functions it exercises, decidedly do not
constitute an encroachment and in diminution of the power of control
which properly belongs to the President. What is more, no executive
department, bureau or office is placed under the control or authority,
of the committee. 33
As a last word, it would not be amiss to point out here that under the
Constitution, there are the so-called independent Constitutional
Commissions, namely: The Civil Service Commission, Commission
on Audit, and the Commission on Elections. (Article IX-A, Section 1)
As these Commissions perform vital governmental functions, they
have to be protected from external influences and political pressures.
Hence, they were made constitutional bodies, independent of and
not under any department of the government. 34 Certainly, they are
not under the control of the President.
The Constitution also created an independent office called the
"Commission on Human Rights." (Article XIII, Section
17[1]).However, this Commission is not on the same level as the
Constitutional Commissions under Article IX, although it is
independent like the latter Commissions. 35 It still had to be
constituted thru Executive Order No. 163 (dated May 5, 1987).
In contrast, Article XVI, Section 6 thereof, merely mandates the
statutory creation of a national police commission that will administer
and control the national police force to be established thereunder.
This commission is, for obvious reasons, not in the same category as
the independent Constitutional Commissions of Article IX and the
other constitutionally created independent Office, namely, the
Commission on Human Rights.

By way of resume, the three Constitutional Commissions (Civil

Service, Audit, Elections) and the additional commission created by
the Constitution (Human Rights) are all independent of the
Executive; but the National Police Commission is not. 36 In fact, it
was stressed during the CONCOM deliberations that this
commission would be under the President, and hence may be
controlled by the President, thru his or her alter ego, the Secretary of
the Interior and Local Government.

WHEREFORE, having in view all of the foregoing holdings, the

instant petition is hereby DISMISSED for lack of merit.

SO ORDERED.