BUKLOD NG KAWANING EIIB, CESAR personnel occupying positions specified therein Ruling: Yes.
ed therein Ruling: Yes. The general rule has always been
POSADA, REMEDIOS G. PRINCESA,
BENJAMIN KHO, BENIGNO MANGA, LULU
MENDOZA
vs.
HON. EXECUTIVE SECRETARY RONALDO B.
ZAMORA, HON. SECRETARY JOSE PARDO,
DEPARTMENT OF FINANCE, HON.
SECRETARY BENJAMIN DIOKNO,
DEPARTMENT OF BUDGET AND
MANAGEMENT, HON. SECRETARY ARTEMIO
TUQUERO, DEPARTMENT OF JUSTICE
Facts: On June 30, 1987, former President
Corazon C. Aquino, issued Executive Order No.
1273 establishing the Economic Intelligence and
Investigation Bureau (EIIB). The EIIB was
designated to perform particular functions on
intelligence and investigation of matters affecting
the national economy.
Eleven years after, or on January 7, 2000,
President Joseph Estrada issued Executive Order
No. 191 entitled “Deactivation of the Economic
Intelligence and Investigation Bureau.” Former
President Estrada ordered the deactivation of EIIB
and the transfer of its functions to the Bureau of
Customs and the National Bureau of Investigation.
President Estrada then issued EO No. 1968
creating the Presidential Anti-Smuggling Task
Force “Aduana.”
Then the day feared by the EIIB employees came.
On March 29, 2000, President Estrada issued
Executive Order No. 223 providing that all EIIB
shall be deemed separated from the service
effective April 30, 2000, pursuant to a bona fide
reorganization resulting to abolition, redundancy,
merger, division, or consolidation of positions.
Agonizing over the loss of their employment,
petitioners now come before the SC, invoking its
power of judicial review of Executive Order Nos.
191 and 223. Petitioners contend that the
issuance of the afore-mentioned executive orders
is: (a) a violation of their right to security of tenure;
(b) tainted with bad faith as they were not actually
intended to make the bureaucracy more efficient
but to give way to Task Force Aduana, the
functions of which are essentially and substantially
the same as that of EIIB; and (c) a usurpation of
the power of Congress to decide whether or not to
abolish the EIIB.
Arguing in behalf of respondents, the Solicitor
General maintains that: (a) the President enjoys
the totality of the executive power provided under
Sections 1 and 7, Article VII of the Constitution,
thus, he has the authority to issue Executive Order
Nos. 191 and 223; (b) the said executive orders
were issued in the interest of national economy, to
avoid duplicity of work and to streamline the
functions of the bureaucracy; and (c) the EIIB was
not abolished, it was only deactivated.
Issue: Is the petitioner correct in contending that
only the legislature has the power to abolish an
office and that it violated their constitutional right
to security of tenure?
that the power to abolish a public office is lodged
with the legislature. This proceeds from the legal
precept that the power to create includes the
power to destroy. A public office is either created
by the Constitution, by statute, or by authority of
law. Thus, except where the office was created by
the Constitution itself, it may be abolished by the
same legislature that brought it into existence. The
exception, however, is that as far as bureaus,
agencies or offices in the executive department
are concerned, the President’s power of control
may justify him to inactivate the functions of a
particular office, or certain laws may grant him the
broad authority to carry out reorganization
measures.
EEIB employees’ right to security of tenure is not
violated. Valid abolition of offices is neither
removal nor separation of the incumbents. If the
public office ceases to exist, there is no separation
or dismissal to speak of.
LOUIS “BAROK” C. BIRAOGO
vs.
THE PHILIPPINE TRUTH COMMISSION
Facts: Pres. Aquino signed E. O. No. 1
establishing Philippine Truth Commission of 2010
(PTC) dated July 30, 2010.
PTC is a mere ad hoc body formed under the
Office of the President with the primary task to
investigate reports of graft and corruption
committed by third-level public officers and
employees, their co-principals, accomplices and
accessories during the previous administration,
and to submit its finding and recommendations to
the President, Congress and the Ombudsman.
PTC has all the powers of an investigative body.
But it is not a quasi-judicial body as it cannot
adjudicate, arbitrate, resolve, settle, or render
awards in disputes between contending parties.
All it can do is gather, collect and assess evidence
of graft and corruption and make
recommendations. It may have subpoena powers
but it has no power to cite people in contempt,
much less order their arrest. Although it is a fact-
finding body, it cannot determine from such facts if
probable cause exists as to warrant the filing of an
information in our courts of law.
Petitioners asked the Court to declare it
unconstitutional and to enjoin the PTC from
performing its functions. They argued that:
(a) E.O. No. 1 violates separation of powers as it
arrogates the power of the Congress to create a
public office and appropriate funds for its
operation.
(b) The provision of Book III, Chapter 10, Section
31 of the Administrative Code of 1987 cannot
legitimize E.O. No. 1 because the delegated
authority of the President to structurally reorganize
the Office of the President to achieve economy,
simplicity and efficiency does not include the
power to create an entirely new public office which
was hitherto inexistent like the “Truth
Commission.”
(c) E.O. No. 1 illegally amended the Constitution
and statutes when it vested the “Truth
Commission” with quasi-judicial powers
duplicating, if not superseding, those of the Office
of the Ombudsman created under the 1987
Constitution and the DOJ created under the
Administrative Code of 1987.
(d) E.O. No. 1 violates the equal protection clause
as it selectively targets for investigation and
prosecution officials and personnel of the previous
administration as if corruption is their peculiar
species even as it excludes those of the other
administrations, past and present, who may be
indictable.
Respondents, through OSG, questioned the legal
standing of petitioners and argued that:
1] E.O. No. 1 does not arrogate the powers of
Congress because the President’s executive
power and power of control necessarily include
the inherent power to conduct investigations to
ensure that laws are faithfully executed and that,
in any event, the Constitution, Revised
Administrative Code of 1987, PD No. 141616 (as
amended), R.A. No. 9970 and settled
jurisprudence, authorize the President to create or
form such bodies.
2] E.O. No. 1 does not usurp the power of
Congress to appropriate funds because there is
no appropriation but a mere allocation of funds
already appropriated by Congress.
3] The Truth Commission does not duplicate or
supersede the functions of the Ombudsman and
the DOJ, because it is a fact-finding body and not
a quasi-judicial body and its functions do not
duplicate, supplant or erode the latter’s
jurisdiction.
4] The Truth Commission does not violate the
equal protection clause because it was validly
created for laudable purposes.
Issues: 1. WON the petitioners have legal
standing to file the petitions and question E. O.
No. 1;
2. WON E. O. No. 1 violates the principle of
separation of powers by usurping the powers of
Congress to create and to appropriate funds for
public offices, agencies and commissions;
3. WON E. O. No. 1 supplants the powers of the
Ombudsman and the DOJ;
4. WON E. O. No. 1 violates the equal protection
clause.
Ruling: The power of judicial review is subject to
limitations, to wit: (1) there must be an actual case
or controversy calling for the exercise of judicial
power; (2) the person challenging the act must
have the standing to question the validity of the
subject act or issuance; otherwise stated, he must
have a personal and substantial interest in the
case such that he has sustained, or will sustain,
direct injury as a result of its enforcement; (3) the
question of constitutionality must be raised at the
earliest opportunity; and (4) the issue of
constitutionality must be the very lis mota of the
case.

1. The petition primarily invokes usurpation of the
power of the Congress as a body to which they
belong as members. To the extent the powers of
Congress are impaired, so is the power of each
member thereof, since his office confers a right to
participate in the exercise of the powers of that
institution.
Legislators have a legal standing to see to it that
the prerogative, powers and privileges vested by
the Constitution in their office remain inviolate.
Thus, they are allowed to question the validity of
any official action which, to their mind, infringes on
their prerogatives as legislators.
With regard to Biraogo, he has not shown that he
sustained, or is in danger of sustaining, any
personal and direct injury attributable to the
implementation of E. O. No. 1.
Locus standi is “a right of appearance in a court of
justice on a given question.” In private suits,
standing is governed by the “real-parties-in
interest” rule. It provides that “every action must
be prosecuted or defended in the name of the real
party in interest.” Real-party-in interest is “the
party who stands to be benefited or injured by the
judgment in the suit or the party entitled to the
avails of the suit.”
Difficulty of determining locus standi arises in
public suits. Here, the plaintiff who asserts a
“public right” in assailing an allegedly illegal official
action, does so as a representative of the general
public. He has to show that he is entitled to seek
judicial protection. He has to make out a sufficient
interest in the vindication of the public order and
the securing of relief as a “citizen” or “taxpayer.
The person who impugns 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.” The Court,
however, finds reason in Biraogo’s assertion that
the petition covers matters of transcendental
importance to justify the exercise of jurisdiction by
the Court. There are constitutional issues in the
petition which deserve the attention of this Court in
view of their seriousness, novelty and weight as
precedents
The Executive is given much leeway in ensuring
that our laws are faithfully executed. The powers
of the President are not limited to those specific
powers under the Constitution. One of the
recognized powers of the President granted
pursuant to this constitutionally-mandated duty is
the power to create ad hoc committees. This flows
from the obvious need to ascertain facts and
determine if laws have been faithfully executed.
The purpose of allowing ad hoc investigating
bodies to exist is to allow an inquiry into matters
which the President is entitled to know so that he
can be properly advised and guided in the
performance of his duties relative to the execution
and enforcement of the laws of the land.
2. There will be no appropriation but only an
allotment or allocations of existing funds already
appropriated. There is no usurpation on the part of
the Executive of the power of Congress to
appropriate funds. There is no need to specify the
amount to be earmarked for the operation of the
commission because, whatever funds the
Congress has provided for the Office of the
President will be the very source of the funds for
the commission. The amount that would be
allocated to the PTC shall be subject to existing
auditing rules and regulations so there is no
impropriety in the funding.
3. PTC will not supplant the Ombudsman or the
DOJ or erode their respective powers. If at all, the
investigative function of the commission will
complement those of the two offices. The function
of determining probable cause for the filing of the
appropriate complaints before the courts remains
to be with the DOJ and the Ombudsman. PTC’s
power to investigate is limited to obtaining facts so
that it can advise and guide the President in the
performance of his duties relative to the execution
and enforcement of the laws of the land.
4. Court finds difficulty in upholding the
constitutionality of Executive Order No. 1 in view
of its apparent transgression of the equal
protection clause enshrined in Section 1, Article III
(Bill of Rights) of the 1987 Constitution.
Equal protection requires that all persons or things
similarly situated should be treated alike, both as
to rights conferred and responsibilities imposed. It
requires public bodies and institutions to treat
similarly situated individuals in a similar manner.
The purpose of the equal protection clause is to
secure every person within a state’s jurisdiction
against intentional and arbitrary discrimination,
whether occasioned by the express terms of a
statue or by its improper execution through the
state’s duly constituted authorities.
There must be equality among equals as
determined according to a valid classification.
Equal protection clause permits classification.
Such classification, however, to be valid must
pass the test of reasonableness. The test has four
requisites: (1) The classification rests on
substantial distinctions; (2) It is germane to the
purpose of the law; (3) It is not limited to existing
conditions only; and (4) It applies equally to all
members of the same class.
The classification will be regarded as invalid if all
the members of the class are not similarly treated,
both as to rights conferred and obligations
imposed.
Executive Order No. 1 should be struck down as
violative of the equal protection clause. The clear
mandate of truth commission is to investigate and
find out the truth concerning the reported cases of
graft and corruption during the previous
administration only. The intent to single out the
previous administration is plain, patent and
manifest.
Arroyo administration is but just a member of a
class, that is, a class of past administrations. It is
not a class of its own. Not to include past
administrations similarly situated constitutes
arbitrariness which the equal protection clause
cannot sanction. Such discriminating
differentiation clearly reverberates to label the
commission as a vehicle for vindictiveness and
selective retribution. Superficial differences do not
make for a valid classification.
The PTC must not exclude the other past
administrations. The PTC must, at least, have the
authority to investigate all past administrations.
The Constitution is the fundamental and
paramount law of the nation to which all other laws
must conform and in accordance with which all
private rights determined and all public authority
administered. Laws that do not conform to the
Constitution should be stricken down for being
unconstitutional.
WHEREFORE, the petitions are GRANTED.
Executive Order No. 1 is hereby declared
UNCONSTITUTIONAL insofar as it is violative of
the equal protection clause of the Constitution.
CIR
vs.
BICOLANDIA DRUG
Bicolandia Drug Corporation, a corporation
engaged in the business of retailing
pharmaceutical products under the business style
of Mercury Drug, granted the 20 percent sales
discount to qualified senior citizens purchasing
their medicines in compliance with R.A. No. 7432.
Respondent treated this discount as a deduction
from its gross income in compliance with Revenue
Regulations No. 2-94, which implemented R.A.
No. 7432. On April 15, 1996, respondent filed its
1995 Corporate Annual Income Tax Return
declaring a net loss position with nil income tax
liability.
On December 27, 1996, respondent filed a claim
for tax refund or credit in the amount of PhP
because its net losses for the year 1995 prevented
it from benefiting from the treatment of sales
discounts as a deduction from gross sales during
the said taxable year.
On April 6, 1998, respondent appealed to the
Court of Tax Appeals in order to toll the running of
two (2)-year prescriptive period to file a claim for
refund pursuant to Section 230 of the Tax Code
then. Respondent argued that since Section 4 of
R.A. No. 7432 provided that discounts granted to
senior citizens may be claimed as tax credit,
Section 2(i) of Revenue Regulations No. 2-94,
which referred to the tax credit as the amount
representing the 20 percent discount that "shall be
deducted by the said establishments from their
gross income for income tax purposes and from
their gross sales for value-added tax or other
percentage tax purposes," is illegal, void and
without effect for being inconsistent with the
statute it implements.
Petitioner maintained that Revenue Regulations
No. 2-94 is valid since the law tasked the
Department of Finance, among other government
offices, with the issuance of the necessary rules
and regulations to carry out the objectives of the
law.
Issue: Is there a tax credit in the instance by virtue
of R.A. No. 7432? YES.
Ruling: This time around, there is no conflict
between the law and the implementing Revenue
Regulations. Under Revenue Regulations No. 4-
2006, "(o)nly the actual amount of the discount
granted or a sales discount not exceeding 20% of
the gross selling price can be deducted from the
gross income, net of value added tax, if
applicable, for income tax purposes, and from
gross sales or gross receipts of the business
enterprise concerned, for VAT or other percentage
tax purposes." Under the new law, there is no tax
credit to speak of, only deductions.
Petitioner can find some vindication in the
amendment made to R.A. No. 7432 by R.A. No.
9257, which may be more in consonance with the
principles of taxation, but as it was R.A. No. 7432
in force at the time this case arose, this law
controls the result in this particular case, for which
reason the petition must fail.
This case should remind all heads of executive
agencies which are given the power to promulgate
rules and regulations, that they assume the roles
of lawmakers. It is well-settled that a regulation
should not conflict with the law it implements.
Thus, those drafting the regulations should study
well the laws their rules will implement, even to the
extent of reviewing the minutes of the
deliberations of Congress about its intent when it
drafted the law. They may also consult the
Secretary of Justice or the Solicitor General for
their opinions on the drafted rules. Administrative
rules, regulations and orders have the efficacy and
force of law so long as they do not contravene any
statute or the Constitution. It is then the duty of the
agencies to ensure that their rules do not deviate
from or amend acts of Congress, for their
regulations are always subordinate to law.
BLAS F. OPLE
vs.
RUBEN D. TORRES, ALEXANDER AGUIRRE,
HECTOR VILLANUEVA, CIELITO HABITO,
ROBERT BARBERS, CARMENCITA REODICA,
CESAR SARINO, RENATO VALENCIA, TOMAS
P. AFRICA, HEAD OF THE NATIONAL
COMPUTER CENTER and CHAIRMAN OF THE
COMMISSION ON AUDIT
Facts: On December 12, 1996, then President
Ramos enacted Administrative order no. 308,
which laid down the ground work for the
implementation of a National ID system. The A.O.
mandated major government agencies to pool
their resources together to implement a
centralized data bank of all citizens which shall be
used to streamline day to day government
transactions and minimize rampant red taping and
corruption among government employees.
Herein petitioner Senator Blas Ople, filed the case
at bar questioning the said A.O. on 3 grounds 1)
implementation of a national ID system requires a
legislative act, as such A.O. no. 308 is usurpation
of legislative functions. 2) that said A.O. tends to
infringe the right to privacy of citizens 3) the
appropriation of funds for the implementation of
said A.O. is also an exclusive legislative function.
On the other hand, herein respondent as
Executive Secretary refutes all said arguments.
Issue: 1. Whether or not A.O. no. 308 is a
valid exercise of the Executive power.
2. Whether or not the issuance of A.O. 308 by
the President in establishing a national
computerized identification reference system is an
unconstitutional usurpation of the legislative
powers of the Congress.
Ruling:
1. The Supreme Court ruled in the negative.
In holding the A.O. no. 308 as an invalid exercise
of the Presidents Executive power, the Court
provided the following:
1. As raised by petitioner, A.O. no.
308 does indeed infringe upon the
legislature’s exclusive function as it laid
down a system whereby compliance
therewith is a condition to transact with the
government.
2. A.O. no. 308 is a potential threat to
the Constitutional right to Privacy as it
allows the government to pool various data
regarding an individual without any clear
concise direction as to the manner to
keeping, safeguards against improper use,
and any definite answer as to what type of
information may or may not be used.
• But what is not arguable is the
broadness, the vagueness, the
overbreadth of A.O. No. 308 which if
implemented will put our people's right to
privacy in clear and present danger.
3. A.O. no. 308 failed to substantiate
any justifiable reason to allow the would be
infringement. To streamline government
transactions and to remove red taping was
 not sufficiently shown to be valid reasons
to counter act the strict protection of the
individual’s right to privacy.
2. While Congress is vested with the
power to enact laws, the President executes the
laws.As head of the Executive Department, the
President is the Chief Executive.Corollary to the
power of control, the President has the duty of
supervising the enforcement of laws for the
maintenance of general peace and public order.
Thus, he is granted administrative power over
bureaus and offices under his control to enable
him to discharge his duties
effectively.Administrative power is concerned with
the work of applying policies and enforcing orders
as determined by proper governmental organs.
As said administrative order redefines the
parameters of some basic rights of our citizenry
vis-a-vis the State as well as the line that
separates the administrative power of the
President to make rules and the legislative power
of Congress, it ought to be evident that it deals
with a subject that should be covered by law.From
these precepts, the Supreme Court holds that
A.O. No. 308 involves a subject that is not
appropriate to be covered by an administrative
order. The dissenting opinions of the Justices
unduly expand the limits of administrative
legislation and consequently erode the plenary
power of Congress to make laws. This is contrary
to the established approach defining the traditional
limits of administrative legislation. As well stated
by Fisher: ". . . Many regulations however, bear
directly on the public. It is here that administrative
legislation must he restricted in its scope and
application. Regulations are not supposed to be a
substitute for the general policy-making that
Congress enacts in the form of a public law.
Although administrative regulations are entitled to
respect, the authority to prescribe rules and
regulations is not an independent source of power
to make laws."
Thus, Adminisrative Order No. 308 entitled
"Adoption of a National Computerized
Identification Reference System" was declared
null and void for being unconstitutional by the
Supreme Court.
PHILIPPINE NATIONAL OIL COMPANY
vs.
CA
Facts: The Petitions before this Court originated
from a sworn statement submitted by private
respondent Tirso B. Savellano (Savellano) to the
Bureau of Internal Revenue (BIR)
Savellano informed the BIR that PNB had failed
to withhold the 15% final tax on interest earnings
and/or yields from the money placements of
PNOC with the said bank
PNOC wrote the BIR on 25 September 1986, and
made an offer to compromise its tax liability
Then BIR Commissioner Bienvenido A. Tan, in a
letter, dated 22 June 1987, accepted the
compromise.
On 07 January 1988, private respondent
Savellano, through his legal counsel, wrote the
BIR to demand payment of the balance of his
informer's reward
BIR Commissioner Tan replied through a letter,
dated 08 March 1988, that private respondent
Savellano was already fully paid the informer's
reward equivalent to 15% of the amount of tax
actually collected by the BIR pursuant to its
compromise agreement with PNOC.
Private respondent Savellano submitted another
letter, dated 24 March 1988, to BIR Commissioner
Tan, seeking reconsideration of his decision to
compromise the tax liability of PNOC. In the same
letter, private respondent Savellano questioned
the legality of the compromise... agreement
entered into by the BIR and PNOC and claimed
that the tax liability should have been collected in
full.
While the aforesaid Motion for Reconsideration
was still pending with the BIR, private respondent
Savellano filed a Petition for Review ad cautelam
with the CTA
BIR Commissioner Tan asserted that the Petition
stated no cause of action against him
PNOC and PNB filed separate Motions to Dismiss,
both arguing that the CTA lacked jurisdiction to
decide the case.
The CTA, on 28 May 1992, rendered its decision,
wherein it upheld its jurisdiction
PNOC and PNB filed separate appeals with the
Court of Appeals seeking the reversal of the CTA
decision
The BIR and PNOC eventually reached a
compromise agreement.
Private respondent Savellano questioned the
validity of the compromise agreement because the
reduced amount of tax collected from PNOC, by
virtue of the compromise agreement, also
proportionately reduced his informer's reward.
He then requested the BIR Commissioner to
review and reconsider
Acting on the request of private respondent
Savellano, the new BIR Commissioner declared
the compromise agreement to be without basis
and issued the demand letter, dated 16 January
1991, against PNB, as the withholding agent for
PNOC.
offices, agencies and instrumentalities, including resolution of the issues raised and grant complete
government-owned or controlled corporations. relief to the parties.
On the other hand, Rep. Act No. 1125 is a special COMMISSIONER OF CUSTOMS
law dealing with a specific subject matter the VS
creation of the CTA, which shall exercise exclusive HYPERMIX FEEDS
appellate jurisdiction over the tax disputes and Facts:
controversies.. November 7 2003, petitioner Commissioner of
Customs issued CMO 27-2003 (Customs
Section 1 of P.D. No. 242 explicitly provides that Memorandum Order).
only disputes, claims and controversies solely
between or among departments, bureaus, offices, Under the memorandum, for tariff purposes, wheat
agencies, and instrumentalities of the National is classified according to:
Government, including constitutional offices or a) Importer or consignee
agencies, as well as government-owned and b) Country of origin,
controlled corporations, shall be administratively c) Port of discharge.
settled or adjudicated.
Depending on these factors wheat would be
While the BIR is obviously a government bureau, classified as either as food grade or food feed.
and both PNOC and PNB are government-owned
and controlled corporations, respondent Savellano The corresponding tariff for food grade wheat was
is a private citizen. 3%, for food feed grade 7%.

Issues: Does the CTA have jurisdiction of the
case?
Ruling:
The CTA correctly retained jurisdiction
Sustained herein is the contention of private
respondent Savellano that P.D. No. 242 is a
general law that deals with administrative
settlement or adjudication of disputes, claims and
controversies between or among government
It was private respondent Savellano who gave the
BIR the information that resulted in the
investigation of PNOC and PNB; who requested
the BIR Commissioner to reconsider the
compromise agreement in question; and who
initiated CTA Case No. 4249 by filing a Petition for
Review.
The ends of justice were best served whenthe
CTA continued to exercise its jurisdiction over
CTA Case No. 4249. The CTA, which had
assumed jurisdiction over all the parties to the
controversy, could render a comprehensive
A month after the issuance of CMO 27-200
respondent filed a petition for declaratory for Relief
with the Regional Trial Court of Las Piñas City.
Respondent contented that CMO 27-2003 was
issued without following the mandate of the
Revised Administrative Code on public
participation, prior notice, and publication or
registration with University of the Philippines Law
Canter.
Respondent also alleged that the regulation
summarily adjudged it to be a feed grade supplier
without the benefit of prior assessment and
examination, despite having imported food grade
wheat, it would be subjected to the 7% tariff upon
the arrival of the shipment, forcing to pay 133%.
Respondent also claimed that the equal protection
clause of the Constitution was violated and
asserted that the retroactive application of the
regulation was confiscatory in nature.
Petitioners filed a Motion to Dismiss. They alleged
that: 1. The RTC did not have jurisdiction over the
subject matter of the case, 2. an action for
declaratory relief (Rule 63, Sec.1 “who may file
petition”) was improper, 3. CMO 27-2003 was
internal administrative rule not legislative in
nature, and 4. The claims of respondent were
speculative and premature, because the Bureau of
Customs had yet to examine respondent’s
products.
RTC held that a petition for declaratory relief was
proper remedy, and that respondent was the
proper party to file it.
Issue:
Whether or not the CMO 27-2003 of the petitioner
met the requirements for the Revised
Administrative Code? Whether or not the content
of the CMO 27-2003 met the requirement of the
equal protection clause of the Constitution
Ruling:
NO
• The petitioners violated respondents’ right
to due process in the issuance of CMO 27-2003
when they failed to observe the requirements
under the Administrative Code which are:
Sec 3. Filing. (1) Every agency shall file with the
University of the Philippines Law Center three (3)
certified copies of every rule adopted by it. Rules
in force on the date of effectively of this Code
which are not filed within three (3) months from
that date shall not thereafter be the bases of any
sanction against any party of persons.
Sec 9. Public Participation. - (1) If not otherwise
required by law, an agency shall, as far as
practicable, publish or circulate notices of
proposed rules and afford interested parties the
opportunity to submit their views prior to the
adoption of any rule. (2) In the fixing of rates, no
rule or final order shall be valid unless the
proposed rates shall have been published in a
newspaper of general circulation at least 2 weeks
before the first hearing thereon.(3) In case of
opposition, the rules on contested cases shall be
observed.
CMO 27-2003 is not constitutional because it
failed to meet the equal protection clause. We do
not see how the quality of wheat is affected by
who imports it, where it is discharged or which
country it came from.
The Equal Protection Clause means that no
person or class of persons shall be deprived of the
same protection of laws enjoyed by other persons
or other classes in the same place in the like
circumstances. The guarantee of equal protection
of laws is not violated when there is a reasonable
classification.
For a classification to be reasonable, it must be
shown that
a) it rests on substantial distinctions;
b) it is germane to the purpose of the law;
c) it is not limited to existing conditions only;
and
d) it applies equally to all members of the
same class.
Petitioners violated respondents right to equal
protection of laws when they provided for
unreasonable classification in the application of
the regulation. Petitioner Commissioner of
Customs went beyond his powers of delegated
authority when the regulation limited the powers of
the customs officer to examine and assess
imported articles.
BOIE-TAKEDA
vs
DELA SERNA
Facts:
PD 851 – required all employers to pay their
employees basic salary of not more than
P1,000.00 a month, 13th month pay
DOLE Implementing Guidelines- included
“”commissions” and bonus in the computations of
the 13th month pay
BOIE- Takeda Chemicals - did not include
commissions of its medical representatives in the
computation of their 13month pay. Thus it was
ordered by DOLE to pay the differential.
BOIE- Takeda argues that PD 851 and its
implementing rules speak of BASIC salary and
therefore exclude all other remunerations which
are not part of the BASIC salary
Ruling:
a. In including commissions in the computation of
13th month pay, DOLE unduly expanded concept
of “basic salary” as defined in PD 851
b. Implementing rules cannot add or detract from
the provisions of the law it is designed to
implement. They cannot widen its scope.
Administrative agency cannot amend on Act of
Congress.
Cannot Exceed Basic Law Provisions of They
must be within the scope and purview of the
statutory authority granted by legislature.
It is a fundamental rule that implementing rules
cannot add to or detract from the provisions of the
law it is designed to implement. Administrative
regulations adopted under legislative authority by
a particular department must be in harmony with
the provisions of the law they are intended to carry
into effect. They cannot widen its scope. An
administrative agency cannot amend an act of
Congress.
ASTEC v. ERC
Facts:
Petitioners are rural electric cooperatives
established under P.D. No. 269.
BATELEC I, QUEZELCO I and QUEZELCO II are
members of the Association of Southern Tagalog
Electric Cooperatives, Inc. (ASTEC). PRESCO is
a member of the Central Luzon Electric
Cooperatives Association, Inc. (CLECA).
BATELEC I, et al. are engaged in the distribution
of electricity.
On 8 December 1994, R.A. No. 7832 or the Anti-
Electricity and Electric Transmission
Lines/Materials Pilferage Act of 1994 was
enacted. The law imposed a cap on the
recoverable rate of system loss that may be
charged by rural electric cooperatives to their
consumers. The IRR of R.A. No. 7832 required
every rural electric cooperative to file with the
Energy Regulatory Board (ERB), on or before 30
September1995, an application for approval of an
amended Power Purchase Agreement (PPA)
Clause incorporating the cap on the recoverable
rate of system loss to be included in its schedule
of rates.
On 8 June 2001, R.A. No. 9136 or the Electric
Power Industry Reform Act of 2001 (EPIRA) was
also enacted. Section 38 of the EPIRA abolished
the ERB, and created the Energy Regulatory
Commission (ERC). The ERC issued an Order
which provides that rural electric cooperatives
should only recover from their members and
patrons the actual cost of power purchased from
power suppliers. The ERC also ordered
BATELEC, et al. to refund their respective over-
recoveries to end-users. In addition, the ERC also
adopted the new "grossed-up factor mechanism"
in the computation of the over-recoveries of the
electric cooperatives to be remitted to their
consumers.
Thus, BATELEC I, et al. moved to reconsider the
said orders but the ERC denied the same. On
appeal, the CA upheld the validity of the ERC
Orders.
Issue:
Whether or not the assailed orders are invalid for
non-publication, non-submission to the U.P. Law
Center and for their retroactivity?
Ruling:
The petition is partly meritorious. CIVIL LAW:
publication of laws
Procedural due process demands that
administrative rules and regulations be published
in order to be effective. In Tanada v. Tuvera, this
Court articulated the fundamental requirement of
publication, thus: "We hold therefore that all
statutes, including those of local application and
private laws, shall be published as a condition for
their effectivity, which shall begin fifteen days after
publication unless a different effectivity date is
fixed by the legislature. Administrative rules and
regulations must also be published if their purpose
is to enforce or implement existing law pursuant
also to a valid delegation."
There are, however, several exceptions to the
requirement of publication. First, an interpretative
regulation does not require publication in order to
be effective. The applicability of an interpretative
regulation "needs nothing further than its bare
issuance for it gives no real consequence more
than what the law itself has already prescribed." It
"adds nothing to the law" and "does not affect the
substantial rights of any person." Second, a
regulation that is merely internal in nature does
not require publication for its effectivity. It seeks to
regulate only the personnel of the administrative
agency and not the general public. Third, a letter
of instruction issued by an administrative agency
concerning rules or guidelines to be followed by
subordinates in the performance of their duties
does not require publication in order to be
effective.
The policy guidelines of the ERC on the treatment
of discounts extended by power suppliers are
interpretative regulations. Publication is not
necessary for the effectivity of the policy
guidelines. As interpretative regulations, the policy
guidelines of the ERC on the treatment of
discounts extended by power suppliers are also
not required to be filed with the U.P. Law Center in
order to be effective.
In light of these, the grossed-up factor mechanism
does not merely interpret R.A. No. 7832 or its
IRR.It is also not merely internal in nature. The
grossed-up factor mechanism amends the IRR by
providing an additional numerical standard that
must be observed and applied in the
implementation of the PPA. The grossed-up factor
mechanism is therefore an administrative rule that
should be published and submitted to the U.P.
Law Center in order to be effective.
As previously stated, it does not appear from the
records that the grossed-up factor mechanism
was published and submitted to the U.P. Law
Center. Thus, it is ineffective and may not serve
as a basis for the computation of over-recoveries.
The portions of the over-recoveries arising from
the application of the mechanism are therefore
invalid. Furthermore, the application of the
grossed-up factor mechanism to periods of PPA
implementation prior to its publication and
disclosure renders the said mechanism invalid for
having been applied retroactively.
PARTLY GRANTED
Abellar
vs.
CSC
"Petitioner Francisco A. Abella, Jr., a lawyer,
retired from the Philippine Economic Zone
Authority (PEZA), on July 1, 1996 as Department
Manager of the Legal Services Department. He
held a civil service eligibility for the position of
Department Manager, having completed the
training program for Executive Leadership and
Management in 1982 under the Civil Service
Academy, pursuant to CSC Resolution No. 850
dated April 16, 1979, which was then the required
eligibility for said position.
It appears, however, that on May 31, 1994, the
Civil Service Commission issued Memorandum
Circular No. 21, series of 1994, the pertinent
provisions of which read:
'1. Positions Covered by the Career Executive
Service
xxx xxx xxx
(b) In addition to the above identified positions and
other positions of the same category which had
been previously classified and included in the
CES, all other third level positions of equivalent
category in all branches and instrumentalities of
the national government, including government
owned and controlled corporations with original
charters are embraced within the Career
Executive Service provided that they meet the
following criteria:
'1. the position is a career position;
'2. the position is above division chief level
'3. the duties and responsibilities of the position
require the performance of executive or
managerial functions.
'4. Status of Appointment of Incumbents of
Positions Included Under the Coverage of the
CES. Incumbents of positions which are declared
to be Career Executive Service positions for the
first time pursuant to this Resolution who hold
permanent appointments thereto shall remain
under permanent status in their respective
positions. However, upon promotion or transfer to
other Career Executive Service (CES) positions,
these incumbents shall be under temporary status
in said other CES positions until they qualify.'
"Two years after his retirement, petitioner was
hired by the Subic Bay Metropolitan Authority
(SBMA) on a contractual basis. On January 1,
1999, petitioner was issued by SBMA a
permanent employment as Department Manager
III, Labor and Employment Center. However,
when said appointment was submitted to
respondent Civil Service Commission Regional
Office No. III, it was disapproved on the ground
that petitioner's eligibility was not appropriate.
Petitioner was advised by SBMA of the
disapproval of his appointment. In view thereof,
petitioner was issued a temporary appointment as
Department Manager III, Labor and Employment
Center, SBMA on July 9, 1999.
courtesy in the Civil Service."48 It further requires
that appointments in the civil service be made only
through merit and fitness to be determined by
competitive examination.49 Civil Service laws
have expressly empowered the CSC to issue and
enforce rules and regulations to carry out its
mandate.
In the exercise of its authority, the CSC deemed it
appropriate to clearly define and identify positions
covered by the Career Executive Service.50
Logically, the CSC had to issue guidelines to meet
this objective, specifically through the issuance of
the challenged Circular.

Petitioner appealed the disapproval of his

permanent appointment by respondent to the Civil
Service Commission, which issued Resolution No.
000059, dated January 10, 2000, affirming the
action taken by respondent. Petitioner's motion for
reconsideration thereof was denied by the CSC in
Resolution No. 001143 dated May 11, 2000..

Ruling:
CSC Authorized to Issue Rules and
Regulations

The Constitution mandates that, as "the central

personnel agency of the government,"47 the CSC
should "establish a career service and adopt
measures to promote the morale, efficiency,
integrity, responsiveness, progressiveness, and