FIRST DIVISION
G.R. No. 202943, March 25, 2015
THE DEPARTMENT OF HEALTH, REPRESENTED BY
SECRETARY ENRIQUE T. ONA, AND THE FOOD AND
DRUG ADMINISTRATION (FORMERLY THE BUREAU OF
FOOD AND DRUGS), REPRESENTED BY ASSISTANT
SECRETARY OF HEALTH NICOLAS B. LUTERO III,
OFFICER-IN-CHARGE, Petitioners, v. PHILIP MORRIS
PHILIPPINES MANUFACTURING, INC., Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the
Decision2 dated August 26, 2011 and the
Resolution3 dated August 3, 2012 rendered by the Court
of Appeals (CA) in CA-G.R. SP No. 109493, finding grave
abuse of discretion on the part of petitioners the
Department of Health (DOH) and the Food and Drug
Administration (FDA), then known as the Bureau of
Food and Drugs (BFAD), for denying respondent Philip
Morris Philippines Manufacturing, Inc.’s (PMPMI)
permit applications for its tobacco sales promotions.
The Facts
On November 19, 2008, PMPMI, through the
advertising agency PCN Promopro, Inc. (PCN), by virtue
of Article 1164 of Republic Act No. (RA) 73945 or the
“Consumer Act of the Philippines,” applied for a sales
promotion permit before the BFAD, now the FDA, for
its Gear Up Promotional Activity (Gear Up Promo).6 The
application included the mechanics for the promotional
activity, as well as relevant materials and fees.7
With more than fifteen (15) days lapsing without the
BFAD formally acting upon the application, PMPMI then
inquired about its status. However, PMPMI was only
verbally informed of the existence of a Memorandum
issued by the DOH purportedly prohibiting tobacco
companies from conducting any tobacco promotional
activities in the country. On January 8, 2009, PCN
requested8 the BFAD to formally place on record the
lack of any formal action on its Gear Up
Promo application.9
Meanwhile, on November 28, 2008, PMPMI, through
another advertising agency, Arc Worldwide Philippines
Co. (AWPC), filed another application for a sales
promotional permit, this time for its Golden Stick
Promotional Activity (Golden Stick Promo) which the
BFAD, however, refused outright, pursuant to a
directive of the BFAD Director that all permit
applications for promotional activities of tobacco
companies will no longer be accepted. Despite inquiries,
the BFAD merely advised AWPC to await the formal
written notice regarding its application.10
Eventually, in a letter11 dated January 5, 2009, the BFAD,
through Director IV Leticia Barbara B. Gutierrez, M.S.
(Dir. Gutierrez), denied PMPMI’s Gear Up
Promo application in accordance with the instructions
of the Undersecretary of Health for Standards and
Regulations, directing that as of July 1, 2008,
“all promotions, advertisements and/or sponsorships of
tobacco products are already prohibited,” based on the
provisions of RA 921112 or the “Tobacco Regulation Act
of 2003.”13
On January 19, 2009, PMPMI filed an administrative
appeal14 before the DOH Secretary, assailing the BFAD’s
denial of its Gear Up Promo application, as well as its
refusal to accept the Golden Stick Promo application. In
its appeal, PMPMI maintained that under RA
9211, promotion is not prohibited but
merely restricted,  and that while there are specific
provisions therein totally banning tobacco advertising
and sponsorships, no similar provision could be found
banning promotion.15 It likewise averred that it had
acquired a vested right over the granting of its sales
promotional permit applications, considering that the
BFAD has been granting such applications prior to
January 5, 2009. Finally, it insisted that the denial of its
promotional permit applications was tantamount to a
violation of its right to due process as well as their right
to property.16
The DOH Ruling
In a Consolidated Decision17 dated April 30, 2009, then
DOH Secretary Francisco T. Duque III (Sec. Duque)
denied PMPMI’s appeal, as well as all other similar
actions filed by other tobacco companies and thereby
affirmed the action of the BFAD denying their sales
promotional permit applications, pursuant to the
provisions of RA 9211.18
In denying PMPMI’s and other tobacco companies’
promotional applications, the DOH ruled that the
issuance of permits for sales promotional activities was
never a ministerial duty of the BFAD; rather, it was a
discretionary power to be exercised within the confines
of the law. Moreover, previous approvals of sales
promotional permit applications made by the BFAD did
not create a vested right on the part of the tobacco
companies to have all applications approved.19
The DOH likewise ruled that the intent and purpose of
RA 9211 was to completely ban tobacco
advertisements, promotions, and sponsorships, as
promotion is inherent in both advertising and
sponsorship. As such, if RA 9211 completely
prohibited advertisements and sponsorships, then it is
clear that promotion, which is necessarily included in
both activities, is likewise prohibited, explaining further
that the provisions of RA 9211 should not be
interpreted in a way as would render them ridiculous or
meaningless.20
Lastly, the DOH cited the Philippines’ obligation to
observe the provisions of the Framework Convention on
Tobacco Control (FCTC), an international treaty, which
has been duly ratified and adopted by the country on
June 6, 2005.21
Aggrieved, PMPMI elevated the matter to the
CA via petition for certiorari and mandamus,22 docketed
as CA G.R. SP No. 109493, ascribing grave abuse of
discretion upon the DOH in refusing to grant its sales
promotional permit applications, maintaining, inter alia,
that RA 9211 still allows promotion activities
notwithstanding the phase-out of advertising and
sponsorship activities after July 1, 2008.
The CA Ruling
In a Decision23 dated August 26, 2011, the CA granted
the petition and nullified the Consolidated Decision of
the DOH upon a finding that the provisions of RA 9211
were clear when it
distinguished promotion from advertising and sponsors
hip, so much so that while the latter two (2) activities
were completely banned as of July 1, 2008, the same
does not hold true with regard to promotion, which was
only restricted. The CA held that the DOH cannot
exercise carte blanche  authority to deny PMPMI’s
promotional permit applications, adding that “[w]hen
the law is clear and free from any doubt or ambiguity,
there is no room for construction or interpretation, only
for application.”24
Furthermore, it ruled that the DOH is bereft of any
authority to enforce the provisions of RA 9211, in view
of the creation of the Inter-Agency Committee–Tobacco
(IAC-Tobacco) under Section 29 of the said law, which
shall have the “exclusive power and function to
administer and implement the provisions of [RA 9211] x
x x.”25 Thus, even though PMPMI originally applied for
sales promotional permits under Article 116 in relation
to Article 109 of RA 7394, from which the DOH derives
its authority to regulate tobacco sales promotions, the
said provision has already been repealed by Section 39
of RA 9211,26 which states:
Section 39. Repealing Clause. – DOH Administrative
Orders No. 10[,] s. 1993 and No. 24[,] s. 2003 are hereby
repealed. Article 94 of Republic Act No. 7394, as
amended, otherwise known as the Consumer Act of the
Philippines, is hereby amended.
All other laws, decrees, ordinances, administrative
orders, rules and regulations, or any part thereof, which
are inconsistent with this Act are likewise repealed or
amended accordingly. 
Hence, the CA ruled that the DOH wrongfully arrogated
unto itself the authority given to the IAC-Tobacco to
administer and implement the provisions of RA 9211,
which includes regulation of tobacco promotions.27
Dissatisfied, the DOH, through the Office of the Solicitor
General (OSG), moved for the reconsideration28 of the
said Decision, which the CA denied in a
Resolution29 dated August 3, 2012, hence, this petition.
The Issues Before the Court
The essential issues to be resolved are: (a) whether or
not the CA erred in finding that the authority of the
DOH, through the BFAD, to regulate tobacco sales
promotions under Article 116 in relation to Article 109
of RA 7394 had already been impliedly repealed by RA
9211, which created the IAC-Tobacco and granted upon
it the exclusive authority to administer and implement
the provisions thereof; and (b) whether or not the CA
erred in ascribing grave abuse of discretion upon the
DOH when the latter held that RA 9211 has also
completely prohibited tobacco promotions as of July 1,
2008.
The Court’s Ruling
The petition is bereft of merit.
At the core of the present controversy are the pertinent
provisions of RA 7394, i.e., Article 116 in relation to
Article 109, to wit:
Article 116. Permit to Conduct Promotion. – No person
shall conduct any sales campaigns, including beauty
contest, national in character, sponsored and promoted
by manufacturing enterprises without first securing a
permit from the concerned department at least thirty
(30) calendar days prior to the commencement thereof.
Unless an objection or denial is received within fifteen
(15) days from filing of the application, the same shall
be deemed approved and the promotion campaign or
activity may be conducted: Provided, That any sales
promotion campaign using medical prescriptions or any
part thereof or attachment thereto for raffles or a
promise of reward shall not be allowed, nor a permit be
issued therefor. (Emphasis supplied)
Article 109. Implementing Agency. – The Department of
Trade and Industry shall enforce the provisions of this
Chapter and its implementing rules and regulations:
Provided, That with respect to food, drugs, cosmetics,
devices, and hazardous substances, it shall be enforced
by the Department of Health. (Emphasis and
underscoring supplied)
The DOH derives its authority to rule upon applications
for sales promotion permits from the above-cited
provisions. On the other hand, Section 29 of RA 9211
creating the IAC-Tobacco provides:
Section 29. Implementing Agency. – An Inter-Agency
Committee-Tobacco (IAC-Tobacco), which shall have
the exclusive power and function to administer and
implement the provisions of this Act, is hereby created.
The IAC-Tobacco shall be chaired by the Secretary of the
Department of Trade and Industry (DTI) with the
Secretary of the Department of Health (DOH) as Vice
Chairperson. The IAC-Tobacco shall have the following
as members:
a. Secretary of the Department of Agriculture
(DA);
b. Secretary of the Department of Justice (DOJ);
c. Secretary of the Department of Finance (DOF);
d. Secretary of the Department of Environment
and Natural Resources (DENR);
e. Secretary of the Department of Science and
Technology (DOST);
f. Secretary of the Department of Education
(DepEd);
g. Administrator of the National Tobacco
Administration (NTA);
h. A representative from the Tobacco Industry to
be nominated by the legitimate and recognized
associations of the industry; and
i. A representative from a nongovernment
organization (NGO) involved in public health
promotion nominated by DOH in consultation
with the concerned NGOs[.]
The Department Secretaries may designate their
Undersecretaries as their authorized representative to
the IAC. (Emphasis and underscoring supplied)
It is the CA’s pronouncement that the creation of the
IAC-Tobacco effectively and impliedly repealed30 the
above-quoted provisions of RA 7394, thereby removing
the authority of the DOH to rule upon applications for
sales promotional permits filed by tobacco companies
such as those filed by PMPMI subject of this case.
On the other hand, while the DOH and the BFAD
concede that the creation of the IAC-Tobacco expressly
grants upon the IAC-Tobacco the exclusive power and
function to administer and implement its provisions,
they nevertheless maintain that RA 9211 did not
remove their authority under RA 7394 to regulate
tobacco sales promotions.31 They point out that this
much can be deduced from the lack of provisions in RA
9211 and its implementing rules laying down the
procedure for the processing of applications for tobacco
sales promotions permit.32 As such, the DOH, through
the BFAD, retains the authority to rule on PMPMI’s
promotional permit applications.
The Court agrees with the CA.
After a meticulous examination of the above-quoted
pertinent provisions of RA 7394 and RA 9211, the Court
finds that the latter law impliedly repealed the relevant
provisions of the former with respect to the authority of
the DOH to regulate tobacco sales promotions.
At this point, the Court notes that both laws separately
treat “promotion” as one of the activities related to
tobacco: RA 7394 defines “sales promotion” under
Article 4 (bm), while RA 9211 speaks of “promotion” or
“tobacco promotion” under Section 4 (l).
“Sales promotion” is defined in Article 4 (bm) of RA
7394, to wit:
Article 4. Definition of Terms. – For purposes of this Act,
the term:
x x x x
bm) “Sales Promotion” means techniques intended
for broad consumer participation which contain
promises of gain such as prizes, in cash or in kind,
as reward for the purchase of a product, security,
service or winning in contest, game, tournament and
other similar competitions which involve determination
of winner/s and which utilize mass media or other
widespread media of information. It also
means techniques purely intended to increase the
sales, patronage and/or goodwill of a to go beyond the ambit of the definitions provided in
product. (Emphases and underscoring supplied)
Identifying its Gear Up Promo and Golden Stick
Promo  to be activities that fall under sales promotion  as
contemplated in the said provision, PMPMI filed its
permit applications under Article 116 of RA 7394 before
the BFAD.
Meanwhile, Section 4 (l) of RA 9211 defines
“promotion” as follows:
Section 4. Definition of Terms. – As used in this Act:
x x x x
l. “Promotion” – refers to an event or activity organized
by or on behalf of a tobacco manufacturer, distributor
or retailer with the aim of promoting a brand of
tobacco product, which event or activity would not
occur but for the support given to it by or on behalf of
the tobacco manufacturer, distributor or retailer. It may
also refer to the display of a tobacco product or
manufacturer’s name, trademark, logo, etc. on non-
tobacco products. This includes the paid use of tobacco
products bearing the brand names, trademarks, logos,
etc. in movies, television and other forms of
entertainment. For the purpose of this Act, promotion
shall be understood as tobacco promotion[.] (Emphases
and underscoring supplied)
As adverted to elsewhere, the IAC-Tobacco shall have
the exclusive power and function to administer and
implement the provisions of RA 9211, which includes
the conduct of regulating promotion.
The Court has judiciously scrutinized the above
definitions and finds that there is no substantial
difference between the activities that would fall under
the purview of “sales promotion” in RA 7394, as well as
those under “promotion” in RA 9211, as would warrant
a delineation in the authority to regulate its conduct. In
fact, the techniques, activities, and methods mentioned
in the definition of “sales promotion” can be subsumed
under the more comprehensive and broad scope of
“promotion.”
In order to fully understand the depth and scope of
these marketing activities, the Court finds it necessary
our laws.
Outside RA 7394, “sales promotion” refers to activities
which make use of “media and non-media marketing
communication for a pre-determined, limited time to
increase consumer demand, stimulate market demand
or improve product availability,”33 “to provide added
value or incentives to consumers, wholesalers, retailers,
or other organizational customers to stimulate
immediate sales” and “product interest, trial, or
purchase.” 34 Examples of devices used in “sales
promotion” are contests, coupons, freebies, point-of-
purchase displays, premiums, raffle prizes, product
samples, sweepstakes, and rebates.35
On the other hand, “promotion” is a term frequently
used in marketing which pertains to “raising customer
awareness of a product or brand, generating sales, and
creating brand loyalty”36 which utilize the following
subcategories: personal selling, advertising, sales
promotion, direct marketing, and publicity.37 The three
basic objectives of promotion are: (1) to present
information to consumers as well as others; (2) to
increase demand; and (3) to differentiate a
product.38 “Promotion” can be done through various
methods, e.g., internet advertisements, special events,
endorsements, incentives in the purchase of a product
like discounts (i.e., coupons), free items, or contests.39
Consequently, if “sales promotion” is considered as one
of the subcategories of “promotion,” it is clear,
therefore, that “promotion” necessarily incorporates
the activities that fall under “sales promotion.”
Considering that the common and fundamental purpose
of these marketing strategies is to raise customer
awareness in order to increase consumer demand or
sales, drawing a demarcation line between “promotion”
and “sales promotion” as two distinct and separate
activities would be unnecessarily stretching their
meanings and, accordingly, sow more confusion.
Moreover, the techniques, methods, and devices
through which “sales promotion” are usually
accomplished can likewise be considered as activities
relating to “promotion,” like raffle contests, which
necessarily require prizes and drawing of winners,
discounts, and freebies.
Concomitantly, while the Court acknowledges the
attempt of the Department of Justice (DOJ), through its
DOJ Opinion No. 29, series of 2004,40 (DOJ Opinion) to
reconcile and harmonize the apparently conflicting
provisions of RA 7394 and RA 9211 in this respect, to
the Court’s mind, it is more logical to conclude that
“sales promotion” and “promotion” are actually one
and the same. The DOJ, in fact, referred41 to “product
promotion” in RA 9211 as “promotion per se” which,
therefore, can be taken to mean an all-encompassing
activity or marketing strategy which may reasonably
and logically include “sales promotion.” Besides, the
DOJ Opinion is merely persuasive and not necessarily
controlling.42
Furthermore, the declared policy of RA 9211 where
“promotion” is defined includes the institution of “a
balanced policy whereby the use, sale and
advertisements of tobacco products shall be regulated
in order to promote a healthful environment and
protect the citizens from the hazards of tobacco smoke
x x x.”43 Hence, if the IAC-Tobacco was created and
expressly given the exclusive authority to implement
the provisions of RA 9211 in accordance with the
foregoing State policy, it signifies that it shall also take
charge of the regulation of the use, sale, distribution,
and advertisements of tobacco products, as well as all
forms of “promotion” which essentially includes “sales
promotion.” Therefore, with this regulatory power
conferred upon the IAC-Tobacco by RA 9211, the DOH
and the BFAD have been effectively and impliedly
divested of any authority to act upon applications for
tobacco sales promotional permit, including PMPMI’s.
Finally, it must be stressed that RA 9211 is a special
legislation which exclusively deals with the subject of
tobacco products and related activities. On the other
hand, RA 7394 is broader and more general in scope,
and treats of the general welfare and interests of
consumers vis-à-vis proper conduct for business and
industry. As such, lex specialis derogat generali. General
legislation must give way to special legislation on the
same subject, and generally is so interpreted as to
embrace only cases in which the special provisions are
not applicable. In other words, where two statutes are
of equal theoretical application to a particular case, the
one specially designed therefore should prevail.44
In fine, the Court agrees with the CA that it is the IAC-
Tobacco and not the DOH which has the primary
jurisdiction to regulate sales promotion activities as
explained in the foregoing discussion. As such, the
DOH’s ruling, including its construction of RA 9211 (i.e.,
that it completely  banned tobacco advertisements,
promotions, and sponsorships, as promotion is inherent
in both advertising and sponsorship), are declared null
and void, which, as a necessary consequence, precludes
the Court from further delving on the same. As it
stands, the present applications filed by PMPMI are thus
remanded to the IAC-Tobacco for its appropriate action.
Notably, in the proper exercise of its rule-making
authority, nothing precludes the IAC-Tobacco from
designating any of its pilot agencies (which, for instance,
may even be the DOH45) to perform its multifarious
functions under RA 9211.
WHEREFORE, the petition is DENIED. The Decision
dated August 26, 2011 and the Resolution dated August
3, 2012 of the Court of Appeals in CA-G.R. SP No.
109493 are hereby AFFIRMED with
the MODIFICATION in that the present permit
applications filed by respondent Philip Morris
Philippines Manufacturing, Inc. for its tobacco sales
promotions are hereby REMANDED to the Inter-Agency
Committee-Tobacco for appropriate action.
SO ORDERED.
LOKIN v. COMELEC
GR No. 179431-32 – June 22 2010 – Bersamin
FACTS:
 1. Citizens’ Battle Against Corruption (CIBAC) was
one of the organized groups duly registered
under the party-list system of representation
that manifested their intent to participate in the
14 May 2007 synchronized national and local
elections.
2. Through its president, CIBAC submitted a list of
5 nominees (Villanueva, Lokin, Jr., Cruz-
Gonzales, Tugna, & Galang) from which its
representatives would be chosen should CIBAC
obtain the required number of qualifying votes.
This list was later published in 2 newspapers of
general circulation.
3. However, prior to the elections, CIBAC, still
through Villanueva, filed a certificate of
nomination, substitution and amendment of the
previous list of nominees whereby it withdrew
the nominations of Lokin, Tugna and Galang and
substituted Borje as one of the nominees.
4. June 20 2007: Following the close of the polls,
Villanueva sent a letter to COMELEC
Chairperson Abalos, transmitting therewith the
signed petitions of more than 81% of the CIBAC
members averring that Lokin, Tugna and Galang
were not among the nominees presented and
proclaimed by CIBAC.
5. June 26 2007: CIBAC supposedly through its
counsel, filed with the COMELEC en banc sitting
as the National Board of Canvassers a motion
seeking the proclamation of Lokin as its second
nominee. This motion was opposed by
Villanueva and Cruz-Gonzales.
COMELEC EB: failed to act on the matter.
6. Villanueva then filed a petition to confirm the
certificate of nomination, substitution and
amendment of the list of nominees of CIBAC.
7. CIBAC was among those proclaimed to have
won the elections, garnering 2 seats.
COMELEC EB: approves the withdrawal of the
nomination of Lokin, Tugna and Galang and the
substitution thereby with Cruz-Gonzales as second
nominee and Borje as third nominee. Villanueva acting
in his capacity as the president of CIBAC were presumed
to be within the scope of his authority as such.
8. Cruz-Gonzales was proclaimed as the official
second nominee of CIBAC and took her oath of
office as a Party-List representative.
9. Lokin filed a SCA for mandamus before the SC
seeking to compel COMELEC to proclaim him as
the official second nominee of CIBAC.
10. In its comment, the COMELEC posits that once
the proclamation of the winning party-list
organization has been done and its nominee has
assumed office, any question relating to the
election, returns and qualifications of the
candidates to the House of Reps. falls under the
jurisdiction of the HRET. Thus, Lokin should
have raised the question he posed in an election
protest or in a SCA for quo warranto.
ISSUE: W/N the proper recourse is a petition for quo
warranto not mandamus. MANDAMUS
HELD:
An election protest proposes to oust the winning
candidate from office. It is strictly a contest between
the defeated and the winning candidates, based on the
grounds of electoral frauds and irregularities, to
determine who between them has actually obtained the
majority of the legal votes cast and is entitled to hold
the office. It can only be filed by a candidate who has
duly filed a certificate of candidacy and has been voted
for in the preceding elections.
A special civil action for quo warranto refers to
questions of disloyalty to the State, or of ineligibility of
the winning candidate. The objective of the action is to
unseat the ineligible person from the office, but not to
install the petitioner in his place. Any voter may initiate
the action, which is, strictly speaking, not a contest
where the parties strive for supremacy because the
petitioner will not be seated even if the respondent may
be unseated.
The controversy involving Lokin is neither an election
protest nor an action for quo warranto, for it concerns a
very peculiar situation in which Lokin is seeking to be
seated as the second nominee of CIBAC. Although an
election protest may properly be available to one party-
list organization seeking to unseat another partylist
organization to determine disloyalty of CruzGonzales to
the Republic of the Philippines, or some other cause of
disqualification for her.

Lokin has correctly brought this special civil action for
certiorari against the COMELEC to seek the review of
the September 14, 2007 resolution of the COMELEC in
accordance with Section 7 of Article IXA of the 1987
Constitution, notwithstanding the oath and assumption
of office by CruzGonzales. The constitutional mandate is
now implemented by Rule 64 of the 1997 Rules of Civil
Procedure, which provides for the review of the
judgments, final orders or resolutions of the COMELEC
and the Commission on Audit. As Rule 64 states, the
mode of review is by a petition for certiorari in
accordance with Rule 65 to be filed in the Supreme
Court within a limited period of 30 days. Undoubtedly,
the Court has original and exclusive jurisdiction over
Lokin’s petitions for certiorari and for mandamus
against the COMELEC.
Petitions for certiorari and mandamus was granted.
Section 13 of Resolution No. 7804 was declared invalid
and of no effect to the extent that it authorizes a party-
list organization to withdraw its nomination of a
nominee once it has submitted the nomination to the
Commission on Elections. The COMELEC was ordered to
forthwith proclaim petitioner Luis K. Lokin, Jr. as a Party-
List Representative representing Citizens’ Battle Against
Corruption in the House of Representatives.
G.R. No. 179695             December 18, 2008
MIKE A. FERMIN, petitioner, vs.COMMISSION ON
ELECTIONS and UMBRA RAMIL BAYAM DILANGALEN,
respondents.
G.R. No. 182369             December 18, 2008
MIKE A. FERMIN, petitioner, vs.COMMISSION ON
ELECTIONS and UMBRA RAMIL BAYAM DILANGALEN,
respondents.
FACTS:
Mike A. Fermin, the petitioner in both cases, was a
registered voter of Barangay Payan, Kabuntalan. On
December 13, 2006, claiming that he had been a
resident of Barangay Indatuan for 1 year and 6 months,
petitioner applied with the COMELEC for the transfer of
his registration record to the said barangay. In the
meantime, the creation of North Kabuntalan was
ratified in a plebiscite on December 30, 2006, formally
making Barangay Indatuan a component of Northern
Kabuntalan.
Thereafter, on January 8, 2007, the COMELEC approved
petitioner's application for the transfer of his voting
record and registration as a voter of Barangay Indatuan,
Northern Kabuntalan. On March 29, 2007, Fermin filed
his Certificate of Candidacy (CoC) for mayor of Northern
Kabuntalan in the May 14, 2007 National and Local
Elections. Private respondent filed a disqualification
case against petitioner. The petition alleged that the
petitioner did not possess the period of residency
required for candidacy and that he perjured himself in
his CoC and in his application for transfer of voting
record. Elections were held without any decision being
rendered by the COMELEC in the said case. After the
counting and canvassing of votes, Dilangalen emerged
as the victor. Fermin subsequently filed an election
protest with the Regional Trial Court (RTC), Branch 13 of
Cotabato City.
On June 29, 2007, the COMELEC 2nd Division,
disqualified Fermin for not being a resident of Northern
Kabuntalan. It ruled that, based on his declaration that
he is a resident of Barangay Payan as of April 27, 2006
in his oath of office before Datu Andal Ampatuan,
Fermin could not have been a resident of Barangay
Indatuan for at least one year.
Petitioner argues that he has been a resident of
Barangay Indatuan long before the creation of Northern
Kabuntalan. This change of residence prompted him to
apply for the transfer of his voter’s registration record
from Barangay Payan to Barangay Indatuan. Moreover,
the one year residency requirement under the law is
not applicable to candidates for elective office in a
newly created municipality, because the length of
residency of all its inhabitants is reckoned from the
effective date of its creation.
ISSUE: Whether or not the COMELEC gravely abuse its
discretion when it declared petitioner as not a resident
of the locality for at least one year prior to the May 14,
2007 elections
HELD: YES.
The Court finds the COMELEC to have gravely abused its
discretion when it precipitately declared that Fermin
was not a resident of Northern Kabuntalan for at least
one year prior to the said elections. COMELEC relied on
a single piece of evidence to support its finding that
petitioner was not a resident of Barangay Indatuan,
Northern Kabuntalan, i.e., the oath of office subscribed
and sworn to before Governor Datu Andal Ampatuan, in
which petitioner indicated that he was a resident of
Barangay Payan, Kabuntalan as of April 27, 2006.
However, this single piece of evidence does not
necessarily support a finding that petitioner was not a
resident of Northern Kabuntalan as of May 14, 2006, or
one year prior to the May 14, 2007 elections. Petitioner
merely admitted that he was a resident of another
locality as of April 27, 2006, which was more than a year
before the elections. It is not inconsistent with his
subsequent claim that he complied with the residency
requirement for the elective office, as petitioner could
have transferred to Barangay Indatuan after April 27,
2006, on or before May 14, 2006.
Neither does this evidence support the allegation that
petitioner failed to comply with the residency
requirement for the transfer of his voting record from
Barangay Payan to Barangay Indatuan. Given that a
voter is required to reside in the place wherein he
proposes to vote only for six months immediately
preceding the election, petitioner’s application for
transfer on December 13, 2006 does not contradict his
earlier admission that he was a resident of Barangay
Payan as of April 27, 2006.
The mere filing of a petition and the convenient
allegation therein that a candidate does not reside in
the locality where he seeks to be elected is insufficient
to effect the cancellation of his CoC. Convincing
evidence must substantiate every allegation.
Fort Bonifacio vs CIR
Case Digest GR 173425 Jan 22 2013
Facts:
In 1995, Fort Bonifacio Development Corporation
purchased from the national government a portion of
the Fort Bonifacio reservation. On January 1, 1996, the
enactment of RA 7716 extended the coverage of VAT to
real properties held primarily for sale to customers or
held for lease in the ordinary course of trade or
business. Thus, FBDC sought to register by submitting to
BIR an inventory of all its real properties, the book value
of which aggregated to about P71 B.
In October 1996, FBDC started selling Global City lots to
interested buyers. For the first quarter of 1997, it paid
the output VAT by making cash payments to the BIR and
credited its unutilized input tax credit on purchases of
goods and services. Realizing that its 8% transitional
input tax credit was not applied in computing its output
VAT for the first quarter of 1997, FBDC filed with the BIR
a claim for refund of the amount erroneously paid as
output VAT for the said period.
The CTA denied refund on the ground that “the benefit
of transitional input tax credit comes with the condition
that business taxes should have been paid first.” It
contends that since FBDC acquired the Global City
property under a VAT-free sale transaction, it cannot
avail of the transitional input tax credit. The CTA
likewise pointed out that under RR 7-95, implementing
Section 105 of the old NIRC, the 8% transitional input
tax credit should be based on the value of the
improvements on land such as buildings, roads,
drainage system and other similar structures,
constructed on or after January 1, 1998, and not on the
book value of the real property.
Issue 1: W/N prior payment of taxes is required in
availing of the transitional input tax credit
No. First, nothing in Sec 105 of the NIRC indicates that
prior payment of taxes is necessary to avail of the
transitional input tax credit. Clearly, all it requires is for
the taxpayer to file a beginning inventory with the BIR.
Courts cannot limit the application or coverage of a law
nor can it impose conditions not provided therein
because to do so constitutes judicial legislation.
Second, prior payment of taxes is not required to avail
of the transitional input tax credit because it is not a tax
refund per se but a tax credit. Tax credit is not
synonymous to tax refund. Tax refund is defined as the
money that a taxpayer overpaid and is thus returned by
the taxing authority. Tax credit, on the other hand, is an
amount subtracted directly from one’s total tax liability.
It is any amount given to a taxpayer as a subsidy, a
refund, or an incentive to encourage investment. Thus,
unlike a tax refund, prior payment of taxes is not a
prerequisite to avail of a tax credit.
Lastly, the fact that FBDC acquired the Global City
property under a tax-free transaction makes no
difference as prior payment of taxes is not a pre-
requisite.
Issue 2: W/N the transitional input tax credit applies
only to the value of improvements
No. Section 4.105-1 of RR 7-95, insofar as it limits the
transitional input tax credit to the value of the
improvement of the real properties, is a nullity. The 8%
transitional input tax credit should not be limited to the
value of the improvements on the real properties but
should include the value of the real properties as well.
Hence, since FBDC is entitled to the 8% transitional
input tax credit which is more than sufficient to cover its
output tax for the first taxable quarter, the amount of
VAT output taxes erroneously paid must be refunded.
Issue 3: W/N the Tax Code allows either a cash refund
or a tax credit for input VAT
Yes. First, a careful reading of Section 112 of the Tax
Code shows that it does not prohibit cash refund or tax
credit of transitional input tax in the case of zero-rated
or effectively zero-rated VAT registered taxpayers, who
do not have any output VAT.
The phrase “except transitional input tax” in Section 112
of the Tax Code was inserted to distinguish creditable
input tax from transitional input tax credit. Transitional
input tax credits are input taxes on a taxpayer’s
beginning inventory of goods, materials, and supplies
equivalent to 8% (then 2%) or the actual VAT paid on
such goods, materials and supplies, whichever is higher.
It may only be availed of once by first-time VAT
taxpayers. Creditable input taxes, on the other hand,
are input taxes of VAT taxpayers in the course of their
trade or business, which should be applied within two
years after the close of the taxable quarter when the
sales were made.
As regards Section 110, while the law only provides for a
tax credit, a taxpayer who erroneously or excessively
pays his output tax is still entitled to recover the
payments he made either as a tax credit or a tax refund.
Here, since FBDC still has available transitional input tax
credit, it filed a claim for refund to recover the output
VAT it erroneously or excessively paid for the 1st
quarter of 1997. Thus, there is no reason for denying its
claim for tax refund/credit.
Heirs of Reyes vs. Garilao (2009)
FACTS
The Heirs of Reyes (HEIRS) were registered co-owners of
a 100-ha parcel of cadastral land with TCT in Bataan.
These were originally owned by Antonia and Aurelio
Reyes. When Aurelio died, the widow and the eight
children divided the property.
In 1988, Garilao et. al (GARILAO) were recipients of
emancipation patents of the said property as farmer
beneficiaries. About 5 years later, the HEIRS filed a
petition to cancel the EPs issued by the DARAB. A
month before the said petition, they also filed an
application for retention of 5 hectares each based on RA
6657, Sec. 6, which was granted by the DAR Regional
Director.
GARILAO appealed the decision of the DAR Regional
Director to the DAR Secretary, who issued an order in
their favor setting aside the retention rights. The DAR
Secretary found that each of the HEIRS owned, aside
from the property, other non-agricultural properties
located in Makati and Manila. The DAR Secretary
further held that landowners who own lands devoted to
non-agricultural purposes are presumed to derive
adequate income therefrom to support themselves and
their families.
The HEIRS appealed to the CA, which however
dismissed their petition. The CA ruled that Admin Order
No. 4 (1991) and Letter of Instruction (LOI) No. 474,
restricted the right of retention of landowners. It found
that the heirs did not exercise their right of retention
under PD 27, and said that provisions of RA no. 6657 on
retention limits applied. According to the said issuances,
landowners who own other non-agricultural lands and
derived adequate income therefrom have no right of
retention.
The HEIRS now appeal the said decision.
ISSUE
WON the heirs still had retention rights either under PD
27 or RA 6657
HELD
NONE. PD27 was issued decreeing
emancipation of tenants from bondage of the soil. Said
law provided that a landowner may retain an area not
more than 7 hectares, if such landowner is cultivating
such area or will now cultivate it. Pres. Marcos issued
LOI No. 474 which directed the Sec. of Agrarian Reform
to: 
“…undertake to place under the Land Transfer Program
of the government pursuant to Presidential Decree No.
27, all tenanted rice/corn lands with areas of seven
hectares or less belonging to landowners who own
other agricultural lands of more than seven hectares in
aggregate areas or lands used for residential,
commercial, industrial or other urban purposes from
which they derive adequate income to support
themselves and their families.”
LOI No. 474, thus, amended PD No. 27 by removing “any
right of retention from persons who own other
agricultural lands of more than 7 hectares, or lands used
for residential, commercial, industrial or other purposes
from which they derive adequate income to support
themselves and their families.”  T. GAKO, respondents.
Section 6 of RA No. 6657 only provided for a right of
retention of 5 hectares. Thereafter, Admin Order No. 4
(1991) was issued which declared that “An owner of
tenanted rice and corn lands may not retain these
lands, …If he, as of 21 October 1972, owned more than
24 hectares of tenanted rice and corn lands; or by virtue
of LOI 474, if he, as of 21 October 1976, owned less than
24 hectares of tenanted rice or corn lands, but
additionally owned the following:
1. Other agricultural lands of more
than seven hectares, whether
tenanted or not, whether cultivated
or not, and regardless of the income
derived therefrom; or
2. Lands used for residential,
commercial, industrial, or other
urban purposes, from which he
derives adequate income to
support himself and his family.[31]  be ensured that nutrition and health claims are not
Based on the foregoing, LOI No. 474 provides for a
restrictive condition on the exercise of the right of
retention, specifically disqualifying landowners who
“own other agricultural lands of more than seven
hectares in aggregate areas, or lands used for
residential, commercial, industrial or other urban
purposes from which they derive adequate income to
support themselves and their families.” Said condition is
essentially the same one contained in Administrative
Order No. 4, series of 1991.
On the contention that RA 6675 repealed LOI no. 474,
while RA No. 6675 is the law of general application, LOI
No. 474 may still be applied to the latter. Hence,
landowners under RA No. 6675 are entitled to retain
five hectares of their landholding; however, if they too
own other “lands used for residential, commercial,
industrial or other urban purposes from which they
derive adequate income to support themselves and
their families,” they are disqualified from exercising
their right of retention.
G.R. No. 173034 October 9, 2007
PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF
THE PHILIPPINES, petitioner, vs. HEALTH SECRETARY
FRANCISCO T. DUQUE III; HEALTH UNDER SECRETARIES
DR. ETHELYN P. NIETO, DR. MARGARITA M. GALON,
ATTY. ALEXANDER A. PADILLA, & DR. JADE F. DEL
MUNDO; and ASSISTANT SECRETARIES DR. MARIO C.
VILLAVERDE, DR. DAVID J. LOZADA, AND DR. NEMESIO
FACTS : Named as respondents are the Health
Secretary, Undersecretaries, and Assistant Secretaries
of the Department of Health (DOH). For purposes of
herein petition, the DOH is deemed impleaded as a co-
respondent since respondents issued the questioned
RIRR in their capacity as officials of said executive
agency.1Executive Order No. 51 (Milk Code) was issued
by President Corazon Aquino on October 28, 1986 by
virtue of the legislative powers granted to the president
under the Freedom Constitution. One of the preambular
clauses of the Milk Code states that the law seeks to
give effect to Article 112 of the International Code of
Marketing of Breastmilk Substitutes (ICMBS), a code
adopted by the World Health Assembly (WHA) in 1981.
From 1982 to 2006, the WHA adopted several
Resolutions to the effect that breastfeeding should be
supported, promoted and protected, hence, it should
permitted for breastmilk substitutes.In 1990, the
Philippines ratified the International Convention on the
Rights of the Child. Article 24 of said instrument
provides that State Parties should take appropriate
measures to diminish infant and child mortality, and
ensure that all segments of society, specially parents
and children, are informed of the advantages of
breastfeeding. On May 15, 2006, the DOH issued herein
assailed RIRR which was to take effect on July 7, 2006.
Issue: . Whether Administrative Order or the Revised
Implementing Rules and Regulations (RIRR) issued by
the Department of Health (DOH) is not constitutional;
Held: YES

under Article 23, recommendations of the WHA do not
come into force for members,in the same way that
conventions or agreements under Article 19 and
regulations under Article 21 come into force. Article 23
of the WHO Constitution reads:
Article 23. The Health Assembly shall have authority to
make recommendations to Members with respect to
any matter within the competence of the Organization
for an international rule to be considered as customary
law, it must be established that such rule is being
followed by states because they consider it obligatory
to comply with such rules
Under the 1987 Constitution, international law can
become part of the sphere of domestic law either
By transformation or incorporation. The transformation
method requires that an international law be
transformed into a domestic law through a
constitutional mechanism such as local legislation. The
incorporation method applies when, by mere
constitutional declaration, international law is deemed
to have the force of domestic law.
Consequently, legislation is necessary to transform the
provisions of the WHA Resolutions into domestic law.
The provisions of the WHA Resolutions cannot be
considered as part of the law of the land that can be
implemented by executive agencies without the need of
a law enacted by the legislature.
OMBUDSMAN Carpio-Morales v. CA and Jejomar Binay
G.R. Nos. 217126-27, November 10, 2015 Doctrine of
Condonation Abandoned
FACTS:
A complaint/affidavit was filed before the Office of the
Ombudsman against Binay, Jr. and other public officers
and employees of the City Government of Makati
(Binay, Jr.,  et al), accusing them of Plunder and violation
of RA 3019, otherwise known as “The Anti-Graft and
Corrupt Practices Act,” in connection with the five
phases of the procurement and construction of the
Makati City Hall Parking Building.
Before Binay, Jr.,  et al.’s  filing of their counter-
affidavits, the Ombudsman issued the order placing
Binay, Jr.,  et al.  under preventive suspension for not
more than six months without pay, during the pendency
of the OMB Cases.
The Ombudsman ruled that the requisites for the
preventive suspension of a public officer are present,
and that their continued stay in office may prejudice the
investigation relative to the OMB Cases filed against
them.
Binay, Jr. filed a petition for certiorari before the CA
seeking the nullification of the preventive suspension
order, and praying for the issuance of a TRO and/or WPI
to enjoin its implementation.
Primarily, Binay, Jr. argued that he could not be held
administratively liable for any anomalous activity
attending any of the five phases of the Makati Parking
Building project since: (a) Phases I and II were
undertaken before he was elected Mayor of Makati in
2010; and (b) Phases III to V transpired during his first
term and that his re-election as City Mayor of Makati
for a second term effectively condoned his
administrative liability therefor, if any, thus rendering
the administrative cases against him moot and
academic.
Prior to the hearing of the oral arguments before the
CA, the Ombudsman filed the present petition before
this Court, assailing the CA’s Resolution, which granted
Binay, Jr.’s prayer for TRO.
The Ombudsman claims that the CA had no jurisdiction
to grant Binay, Jr.’s prayer for a TRO.
ISSUE:
Whether or not the doctrine of condonation should
apply in Binay’s case.
RULING:
The petition is partly meritorious.
This Court simply finds no legal authority to sustain the
condonation doctrine in this jurisdiction. It was a
doctrine adopted from one class of US rulings way back
in 1959 and thus, out of touch from – and now rendered
obsolete by – the current legal regime. In consequence,
it is high time for this Court to abandon the condonation
doctrine that originated from Pascual, and affirmed in
the cases following the same, such as Aguinaldo,
Salalima, Mayor Garcia, and Governor Garcia, Jr.  which
were all relied upon by the CA.
It should, however, be clarified that this Court’s
abandonment of the condonation doctrine should
be prospective in application for the reason that judicial
decisions applying or interpreting the laws or the
Constitution, until reversed, shall form part of the legal
system of the Philippines.
The condonation doctrine was first enunciated in
Pascual v. Hon. Provincial Board of Nueva Ecija, There is
no truth in Pascual’s postulation that the courts would
be depriving the electorate of their right to elect their
officers if condonation were not to be sanctioned. In
political law, election pertains to the process by which a
particular constituency chooses an individual to hold a
public office.
In this jurisdiction, there is, again, no legal basis to
conclude that election automatically implies
condonation. Neither is there any legal basis to say that
every democratic and republican state has an inherent
regime of condonation. If condonation of an elective
official’s administrative liability would perhaps, be
allowed in this jurisdiction, then the same should have
been provided by law under our governing legal
mechanisms. May it be at the time of Pascual or at
present, by no means has it been shown that such a
law, whether in a constitutional or statutory provision,
exists.
Therefore, inferring from this manifest absence, it
cannot be said that the electorate’s will has been
abdicated.
Dagan v. Phil. Racing Commission (Philracom)
G.R. No. 175220
February 12, 2009
Tinga
FACTS:
 Aug. 11, 2004- Philracom issued a directive
directing the Manila Jockey Club, Inc. (MJCI) and
Philippine Racing Club, Inc. (PRCI) to
immediately come up with their respective
Clubs’ House Rule to address Equine Infectious
Anemia (EIA) problem and to rid their facilities
of horses infected with EIA.
 Said directive was issued pursuant to
Administrative Order No. 5 dated 28 March
1994 by the Department of Agriculture
declaring it unlawful for any person, firm or
corporation to ship, drive, or transport horses
from any locality or place except when
accompanied by a certificate issued by the
authority of the Director of the Bureau of
Animal Industry (BAI).
 In compliance with the directive, MJCI and PRCI
ordered the owners of racehorses stable in their
establishments to submit the horses to blood
sampling and administration of the Coggins
Test  to determine whether they are afflicted
with the EIA virus.  Subsequently, on 17
September 2004, Philracom issued copies of the
guidelines for the monitoring and eradication of
EIA.(2nd directive)
 Petitioners refused to comply with the
directives. Despite resistance from petitioners,
the blood testing proceeded.  The horses,
whose owners refused to comply were banned
from the races, were removed from the actual
day of race, prohibited from renewing their
licenses or evicted from their stables. 
 Racehorse owners complained before the
Office of the President (OP) which in turn issued
a directive instructing Philracom to investigate
the matter.
 Petitioners filed for a TRO with the RTC-
granted. RTC however dismissed their petition
for injunction because: 1. The issue is already
moot since almost all racehorse owners
complied with the directives; and 2. It is a valid
exercise of police power.
 Upon appeal, CA affirmed the RTC decision in
toto.
 SC level:
Petitioner's arguments: 1. They maintain that the
assailed guidelines do not comply with due process
requirements; 2. No investigation or at least a summary
proceeding was conducted affording petitioners an
opportunity to be heard. 3. assailed guidelines are ultra
vires  in that the sanctions imposed for refusing to
submit to medical examination are summary eviction
from the stables or arbitrary banning of participation in
the races, notwithstanding the penalties prescribed in
the contract of lease.
 Philracom's arguments:Philracom also justified
its right under  the  law  to regulate horse
raciing  MJCI adds that Philracom need not
delegate its rule-making power to the former
since MJCI’s right to formulate its internal rules
 is subsumed under the franchise granted to it
by Congress.
 That is why petitioners raise for the first time
the issue that Philracom had unconstitutionally
delegated its rule-making power to PRCI and
MJCI in issuing  the directive for them to come
up with club rules. They said that power
granted to PRCI and MJCI under their respective
franchises is limited to: (1) the construction,
operation and maintenance of racetracks; (2)
the establishment of branches for booking
purposes; and (3) the conduct of horse races.  Complete: Philracom was created for the purpose of
ISSUE: WON there is a valid delegation of legislative
power to Philracom
RULING: YES
The validity of an administrative issuance, such as the
assailed guidelines, hinges on compliance with the
following requisites:
 
1.     Its promulgation must be authorized by the
legislature;
2.     It must be promulgated in accordance with the
prescribed procedure;
3.     It must be within the scope of the authority given
by the legislature;
4.     It must be reasonable.[
All the prescribed requisites are met as regards the
questioned issuances. Philracom’s authority is drawn
from P.D. No. 420.  The delegation made in the
presidential decree is valid. Philracom did not exceed its
authority.  And the issuances are fair and reasonable.  speed of horse or materially harm their condition;
FIRST REQUISITE:
 The rule is that what has been delegated cannot be
delegated, or as expressed in the Latin maxim: potestas
delegate non delegare potest.  This rule is based upon
the ethical principle that such delegated power
constitutes not only a right but a duty to be performed
by the delegate by the instrumentality of his own
judgment acting immediately upon the matter of
legislation and not through the intervening mind of
another.[29]  This rule however admits of recognized
exceptions[30] such as the grant of rule-making power
to administrative agencies.  They have been granted by
Congress with the authority to issue rules to regulate
the implementation of a law entrusted to them. 
However, in every case of permissible delegation, there
must be a showing that the delegation itself is valid.  It
is valid only if the law (a) is complete in itself, setting
forth therein the policy to be executed, carried out, or
implemented by the delegate; and (b) fixes a standard—
the limits of which are sufficiently determinate and
determinable—to which the delegate must conform in
the performance of his functions.
P.D. No. 420 hurdles the tests of completeness and
standards sufficiency. 
carrying out the declared policy in Section 1 which is “to
promote and direct the accelerated development and
continued growth of horse racing not only in pursuance
of the sports development program but also in order to
insure the full exploitation of the sport as a source of
revenue and employment.” Philracom was granted
exclusive jurisdiction and control over every aspect of
the conduct of horse racing, including the framing and
scheduling of races, the construction and safety of race
tracks, and the security of racing. 
Sufficient Standards: Section 9 provides for Specific
Powers: To register race horses, horse owners or
associations or federations thereof, and to regulate the
construction of race tracks and to grant permit for the
holding of races; To issue, suspend or revoke permits
and licenses;order the suspension of any racing event
in case of violation of any law, ordinance or rules and
regulations;
g.       To prohibit the use of improper devices, drugs,
stimulants or other means to enhance or diminish the
No delegation of rule-making power to MJCI and PRCI
The Philracom directive is merely instructive in
character. Compliance with the Philracom’s directive is
part of the mandate of PRCI and MJCI under Sections
1[33]  of R.A. No. 7953[34] and Sections 1[35] and
2[36] of 8407.[As correctly proferred by MJCI, its duty is
not derived from the delegated authority of Philracom
but arises from the franchise granted to them by
Congress
SECOND REQUISITE:
While it is conceded that the guidelines were issued a
month after Philracom’s directive, this circumstance
does not render the directive nor the guidelines void.
Philracom has every right to issue directives to MJCI and
PRCI with respect to the conduct of horse racing, with
or without implementing guidelines.
Lack of publication:As a rule, the issuance of rules and
regulations in the exercise of an administrative agency
of its quasi-legislative power does not require notice
and hearing.[40]  InAbella, Jr. v. Civil Service
Commission,[41] this Court had the occasion to rule that
prior notice and hearing are not essential to the
validity of rules or regulations issued in the exercise of
quasi-legislative powers since there is no
determination of past events or facts that have to be
established or ascertained.[
Third requisite:
The administrative body may not make rules and
regulations which are inconsistent with the provisions
of the Constitution or a statute, particularly the statute
it is administering or which created it, or which are in
derogation of, or defeat, the purpose of a statute.The
assailed guidelines prescribe the procedure for
monitoring and eradicating EIA.  These guidelines are in
accord with Philracom’s mandate under the law to
regulate the conduct of horse racing in the country.
Fourth requisite:
The assailed guidelines do not appear to be
unreasonable or discriminatory.  In fact, all horses
stabled at the MJCI and PRCI’s premises underwent
the same procedure.  The guidelines implemented were
undoubtedly reasonable as they bear a reasonable
relation to the purpose sought to be accomplished, i.e.,
the complete riddance of horses infected with EIA.
Horse-owners were also informed beforehand. The
lease contract executed between petitioner and MJC
contains a proviso reserving the right of the lessor, MJCI
in this case, the right to determine whether a particular
horse is a qualified horse. In addition, Philracom’s rules
and regulations on horse racing provide that horses
must be free from any contagious disease or illness in
order to be eligible as race entries.
Merida Waterworks District V. Bacarro (2008)
G.R. No. 165993 September 30, 2008
FACTS:
Merida Water District, a government-owned and
controlled corporation4 that operates the water utility
services in the municipality of Merida, Leyte conducted
a public hearing for the purpose of increasing the water
rate
March 7, 2002: Merida Water District received a letter
from the Local Water Utilities Administration (LWUA)
that on March 5, 2002, the LWUA Board of Trustees, per
Board Resolution No. 63, series of 2002, confirmed
Merida Water District’s proposed water rates.
September 3, 2002: Merida implemented a water rate
increase of P90 for the first ten cubic meters of water
consumption.
February 13, 2003: consumers of Merida Water District,
filed a Petition for Injunction, etc. because the rates are
contrary to the rate increase agreed upon during the
public hearing
Merida filed a motion to dismiss (then later motion for
reconsideration) with the RTC due to failure to exhaust
administrative remedies under Presidential Decree
(P.D.) No. 198, the Provincial Water Utilities Act of 1973,
as amended by P.D. Nos. 768 and 1479 - denied
Petition for Review on Certiorari with the CA (then later
motion for reconsideration) - denied
Petition for Review on Certiorari with the SC
ISSUE: W/N there is lack of jurisdiction with the RTC
since the primary jurisdiction should belong to the
NWRB under P.D. No. 1067. (The NWRB does not
exercise exclusive jurisdiction)
HELD: YES. petition is GRANTED
petitioners failed to cite any law which impliedly grants
the NWRB original and exclusive jurisdiction to resolve a
dispute regarding the increase of water rates. A grant of
exclusive jurisdiction cannot be implied from the
language of a statute in the absence of a clear legislative
intent to that effect. An administrative agency with
quasi-judicial power is a tribunal of limited jurisdiction,
and its jurisdiction should be interpreted in strictissimi
juris."
The doctrine of exhaustion does not apply when
jurisdiction is exclusive. An administrative agency’s
exclusive jurisdiction over a certain dispute renders the
courts without jurisdiction to adjudicate the same at
that stage. The doctrine of exhaustion applies "where a
claim is cognizable in the first instance by an
administrative agency alone; judicial intervention is
withheld until the administrative process has run its
course. To cite Abe-Abe v. Manta as the authority to
support the allegation that the NWRB has original and
exclusive jurisdiction over a dispute regarding a water
rate increase is a strained construction of this Court’s
pronouncements. Thus, petitioners’ contention that the
RTC has no jurisdiction because the NWRB has original
and exclusive jurisdiction over a dispute concerning the
increase of water rates is clearly without merit.
One of the reasons for the doctrine of exhaustion is the
separation of powers, which enjoins upon the Judiciary
a becoming policy of non-interference with matters
coming primarily (albeit not exclusively) within the
competence of the other departments. The theory is
that the administrative authorities are in a better
position to resolve questions addressed to their
particular expertise and that errors committed by
subordinates in their resolution may be rectified by
their superiors if given a chance to do so… It may be
added that strict enforcement of the rule could also
relieve the courts of a considerable number of
avoidable cases which otherwise would burden their
heavily loaded dockets.
Although the doctrine of exhaustion does not preclude
in all cases a party from seeking judicial relief, cases
where its observance has been disregarded require a
strong showing of the inadequacy of the prescribed
procedure and of impending harm. Respondents justify
their failure to observe the administrative process on
the following exceptions to the doctrine of exhaustion
of administrative remedies: (1) patent illegality; and (2)
a denial of due process. However, respondents fail to
show that the instant case merits the application of
these exceptions.
Jurisprudence affirming the failure to observe the
doctrine of exhaustion due to a denial of due process
involves instances when the party seeking outright
judicial intervention was denied the opportunity to be
heard. Here, respondents admit that Merida Water
District conducted a public hearing. . The existence of a
hearing for this purpose renders the allegation of a
denial of due process without merit. The failure of the
respondents to show that the instant case falls within
the exceptions to the doctrine of exhaustion
necessitates in the due observance of exhausting the
proper administrative remedies before seeking judicial
intervention.
SECURITIES AND EXCHANGE COMMISSION, petitioner,
vs. GMA NETWORK, INC., respondent.
Facts: Petitioner GMA filed an application for various
amendments to its Articles of Incorporation and By-
Laws with the respondent SEC. The amendments
include, among others, the change in the corporate
name of from "Republic Broadcasting System, Inc." to
"GMA Network, Inc." as well as the extension of the
corporate term for another 50 years.
The petitioner had been assessed by the SEC’s
Corporate and Legal Department a separate filing fee
for the application for extension of corporate term
(P1,212,200.00) The petitioner formally protested the
assessment. SEC approved the other amendments.
(corporate name and the principal purpose)
The petitioner requested for an official opinion/ruling
from the SEC on the validity and propriety of the
assessment. SEC, through Assoc. Commissioner Fe
Eloisa C. Gloria, issued its ruling upholding the validity of
the questioned assessment.
An appeal was taken by the petitioner on the ground
that the assessment is not in accordance with law. SEC
En Banc issued the assailed order dismissing the
petitioner’s appeal for lack of merit.
It filed an appeal with CA. GMA argued that its
application for the extension of its corporate term is
akin to an amendment and not to a filing of new articles
of incorporation. It further averred that the basis for the
assessment is not valid. (SEC Memorandum Circular No.
2, Series of 1994)
CA agreed with the SEC’s submission that an extension
of the corporate term is a grant of a fresh license for a
corporation. As such, it is not an ordinary amendment.
However, the CA ruled that the Memorandum Circular
is invalid and ineffective for not having been published
in accordance with law.
Issue: Whether or not the Memorandum Circular (MC)
is valid.
Held: GMA points out that the MC No. 1, Series of 1986
refers to the filing fees for amended articles of
incorporation where the amendment consists of
extending the term of corporate existence. The
questioned circular, on the other hand, refers only to
filing fees for articles of incorporation. Thus, the former
circular should apply to its case. Assuming that MC No.
2, Series of 1994 is applicable, GMA avers that the latter
did not take effect for it was neither filed with the UP
Law Center nor published either in the Official Gazette
or in a newspaper of general circulation.
R.A. No. 3531 provides SEC shall be entitled to collect
and receive the same fees it assesses and collects both
for the filing of articles of incorporation and the filing of
an amended articles of incorporation for purposes of
extending the term of corporate existence.
R.A. No. 3531 provides a standard which should guide
the SEC in fixing and imposing its rates and fees. If such
mandate were the only consideration, the Court would
have been inclined to rule that the SEC was correct in
imposing the filing fees as outlined in the questioned
MC.
However, we agree with the CA that the questioned MC
is invalid as it was not published in the Official Gazette
or in a newspaper of general circulation. Furthermore it
has not been filed with the Office of the National
Administrative Register of the University of the
Philippines Law Center as required in the Administrative
Code of 1987.
The MC cannot be construed as simply interpretative of
R.A. No. 3531. This is an implementation of the
mandate of R.A. No. 3531 and indubitably regulates and
affects the public at large. It cannot be considered a
mere internal rule or regulation, nor an interpretation
of the law.
The petition is denied.
Gregorio Honasan II petitioner vs.
The Panel of Investigating Prosecutors
Of the Department of Justice
G.R.No. 159747 April 13,2004
Facts:
·         August 4, 2003: CIDG-PNP/P Director Edguardo
Matillano  filed an affidavit-complaint with the
Department of Justice (DOJ) which contains the
following in part:
o   July 27, 2003: crime of coup d’ etat  was committed
by military personnel who occupied Oakwood and
Senator Gregorio “Gringo” Honasan, II
o   On or about 11 p.m. June 4,2003: A meeting was
held and presided by Senator Honasan in a house
located in San Juan, Metro Manila
o   Early morning of July 27, 2003: Capt. Gerardo
Gambala, in behalf of the military rebels occupying
Oakwood, made a public statement aired on national
television, stating their withdrawal of support to the
chain of command of the AFP and the Government of
President Gloria Macapagal Arroyo. Willing to risk their
lives to achieve the National Recovery Agenda (NRA) of
Senator Honasan which they believe is the only program
that would solve the ills of society.
·         Sworn statement of AFP Major Perfecto Ragil
stated that:
o   June 4, 2003 about 11 pm: Senator Gregorio
“Gringo” Honasan arrived with Capt. Turinga to hold the
NRP meeting where they concluded the use of force,
violence and armed struggle to achieve the vision of
NRP where a junta will be constituted which will run the
new government. They had a blood compact and that
he only participated due to the threat made by Senator
Honasan when he said “Kung kaya nating pumatay sa
ating mga kalaban, kaya din nating pumatay sa mga
kasamahang magtataksil.”
o   July 27, 2003: He saw on TV that Lieutenant Antonio
Trillanes, Captain Gerardo Gambala, Captain Alejano
and some others who were present during the NRP
meeting he attended, having a press conference about
their occupation of the Oakwood Hotel.  He saw that
the letter "I" on the arm bands and the banner is the
same letter "I" in the banner is the same as their blood
compact wound. 
·         August 27, 2003: Senator Honasan appeared with
counsel at the DOJ to file a a Motion for Clarification
questioning DOJ's jurisdiction over the case since the
imputed acts were committed in relation to his public
office  by a group of public officials with Salary Grade 31
which should be handled by the Office of the
Ombudsman and the Sandiganbayan
·         Senator Honasan then filed a petition for certiorari
under Rule 65 of the Rules of Court against the DOJ
Panel and its members, CIDG-PNP-P/Director Eduardo
Matillano and Ombudsman Simeon V. Marcelo,
attributing grave abuse of discretion on the part of the
DOJ Panel in issuing the aforequoted Order of
September 10, 2003 directing him to file his respective
counter-affidavits and controverting evidence on the
ground that the DOJ has no jurisdiction to conduct the
preliminary investigation
Issues:
1. Whether in regards to Ombudsman-DOJ
Circular no. 95-001, the office of the
Ombudsman should deputize the prosecutors of
the DOJ to conduct the preliminary
investigation.
2. Whether the Ombudsman-DOJ Joint Circular no.
95-001 is ineffective on the ground that it was
not published
3. Whether the Ombudsman has jurisdiction to
conduct the preliminary investigation because
the petitioner is a public officer with salary
grade 31 (Grade 27 or Higher) thereby falling
within the jurisdiction of the Sandigan Bayan.
Held: Wherefore, the petition for certiorari is
DISMISSED for lack of merit
1.      No.
 Ombudsman cases involving criminal offenses
may be subdivided into two classes, to wit: (1)
those cognizable by the Sandiganbayan, and (2)
those falling under the jurisdiction of the
regular courts. The difference between the two,
aside from the category of the courts wherein
they are filed, is on the authority to investigate
as distinguished from the authority to prosecute
 The power to investigate or conduct a
preliminary investigation on any Ombudsman
case may be exercised by an investigator or
prosecutor of the Office of the Ombudsman, or
by any Provincial or City Prosecutor or their
assistance, either in their regular capacities or
as deputized Ombudsman prosecutors.
 circular supports the view of the respondent
Ombudsman that it is just an internal
agreement between the Ombudsman and the
DOJ
 The Constitution, The Ombudsman Act of 1989,
Administrative order no. 8 of the office of the
Ombudsman. The prevailing jurisprudence and
under the Revised Rules on Criminal Procedure,
All recognize and uphold the concurrent
jurisdiction of the Ombudsman and the DOJ to
conduct preliminary investigation on charges
filed against public officers and employees.
 The DOJ Panel need not be authorized nor
deputized by the Ombudsman to conduct the
preliminary investigation for complaints filed
with it because the DOJ's authority to act as the
principal law agency of the government and
investigate the commission of crimes under the
Revised Penal Code is derived from the Revised
Administrative Code which had been held in the
Natividad case13 as not being contrary to the
Constitution. Thus, there is not even a need to
delegate the conduct of the preliminary
investigation to an agency which has the
jurisdiction to do so in the first place. However,
the Ombudsman may assert its primary
jurisdiction at any stage of the investigation.
2.      No.
·         In the case of People vs. Que Po Lay, 94 Phil. 640
(1954). The only circulars and regulations which
prescribe a penalty for its violation should be published
before becoming effective.
·         In the case of Taňada V. Tuvera, 146 Scra 453
(1986), The Honorable Court rules that:
o   Interpretative regulations and those merely internal
in nature, that is regulating only the personnel of the
administrative agency and not the public, need not be
published. Neither is publication required of the so
called letters of instructions issued by the administrative
superiors concerning the rules on guidelines to be
followed by their subordinates in performance of their
duties.
 OMB-DOJ Joint Circulars no. 95-001 is merely an
internal circular between the DOJ and the office
of the Ombudsman, Outlining authority and
responsibilities among prosecutors of the DOJ
and of the office of the Ombudsman in the
conduct of preliminary investigation. It does not
regulate the conduct of persons or the public, in
general.
3.      No. Whether or not the offense is within exclusive
jurisdiction or not will not resolve the present petition
so as not to pre-empt the result of the investigation
conducted by the DOJ Panel.
PHILIPPINE PORTS AUTHORITY (PPA) EMPLOYEES
HIRED AFTER JULY 1, 1989, Petitioners, v. COMMISSION
ON AUDIT (COA); Carpio Morales, * ARTHUR H. HINAL,
in His Capacity Callejo Sr., as the Philippine Ports
Authority Azcuna,* Corporate Auditor; RAQUEL R.
Tinga, HABITAN, in Her Capacity as Director Nazario,
and of Corporate Audit Office II, COA; Garcia, JJ. and
SANTOS M. ALQUIZALAS, in His Capacity as General
Counsel, COA, Respondent.
DECISION
PANGANIBAN, Acting C.J.:
"Those that have less in life should have more in law to
give them a better chance at competing with those that
have more inlife."1 Accordingly, in case of doubt, laws
should be interpreted to favor the working class - -
whether in the government or in the private sector - - in
order to give flesh and vigor to the pro-poor and pro-
labor provisions of our Constitution.
The Case
Before us is a Petition for Certiorari2 under Rule 65 of
the Rules of Court, assailing the May 27, 2003
Decision3 and the October 16, 2003 Resolution4 of the
Commission on Audit (COA). The dispositive part of the
Decision reads as follows:
"Wherefore, premises considered the instant petitions
are hereby denied for lack of merit."5
The assailed COA Resolution denied reconsideration.
The Facts
The COA narrates the factual antecedents in this wise:
"Records will bear that the PPA has been paying its
officials and employees COLA and amelioration
allowance equivalent to 40% and 10%, respectively, of
their basic salary pursuant to various legislative and
administrative issuances. During the last quarter of
1989, the PPA discontinued the payment thereof in
view of Corporate Compensation Circular (CCC) No. 10
prescribing the implementing rules and regulations of
R.A. No. 6758 otherwise known as the Salary
Standardization Law which integrated said allowances
into the basic salary effective July 1, 1989. However, the
Supreme Court in the case of Rodolfo de Jesus, et al. v.
COA, G.R. No. 109023 dated August 12, 1998, declared
CCC No. 10 as ineffective and unenforceable due to
non-publication. Consequently, the PPA Board of
Directors passed Resolution No. 1856 directing the
payment of COLA and amelioration backpay to PPA
personnel in the service during the period July 1, 1989
to March 16, 1999, the date of publication of CCC No.
10.
"Doubting the validity of said Resolution, the PPA
Auditor requested the opinion of the General Counsel
on the propriety of the payment of the backpay. In fully
concurring with the recommendation of the then
Director, CAO II, the General Counsel ruled that 'in
order for a PPA employee to be entitled to backpay
representing COLA and amelioration pay equivalent to
40% and 10% respectively, of their basic salary, the
following conditions must concur:
1) he has to be an incumbent as of July 1, 1989;
andcralawlibrary
2) has been receiving the COLA and amelioration pay as
of July 1, 1989.'
Aggrieved, PPA sought reconsideration of the said
advisory opinion which was denied by the General
Counsel in a 1st Indorsement dated September 13,
2001, since she found no cogent reason to set aside the
earlier opinion. The PPA Auditor accordingly ruled
against the grant of the subject backpay. Hence, the
instant petitions for review anchored on the following
arguments:
1) The unenforceability of CCC No. 10 did not alter the
nature of COLA and amelioration allowance into a 'not
integrated' benefit within the purview of the second
sentence of Section 12, R.A. No. 6758 but merely
rendered them unidentified as integrated allowances;
2) The jurisprudence laid in PPA v. COA, 214 SCRA 653 is
not applicable in the determination of who are
entitled to the payment of backpay for COLA and
amelioration allowance;
3) There is no valid reason not to treat 'non-incumbents'
at par with 'incumbents' during the period of
ineffectivity of CCC No. 10; andcralawlibrary
4) PPA employees hired after July 1, 1989 are entitled to
the payment of backpay representing COLA and
amelioration allowance."6
Ruling of the Commission on Audit
The COA ruled that "in the absence of effective
integration of the COLA and amelioration allowance into
the basic salary in 1989, the inevitable conclusion is that
they are deemed not integrated from the time RA 6758
was promulgated until DBM-CCC No. 10 was published
in March 1999." During that period, it thus disallowed
the disputed allowances on the ground that these fell
under the second sentence of Section 12 of RA 6758. It
held that only officials hired on or before July 1, 1989
were entitled to receive back pay equivalent to the
additional compensation (COLA and amelioration
allowance) mentioned.
Hence, this Petition.7
The Issue
Petitioner raised this sole issue for our consideration:
"Whether or not herein petitioners - - who were hired
by the Philippine Ports Authority on various dates after
July 1, 1989 - - are entitled to the payment of back pay
for cost of living allowance (COLA) and amelioration
allowance."8
The Court's Ruling
The Petition is meritorious.
Sole Issue:
Entitlement to COLA
and Amelioration Allowance
In its "Manifestation and Motion in Lieu of Comment,"
the Office of the Solicitor General (OSG) disagreed with
the COA and argued that "petitioners [were] legally
entitled to their accrued COLA and amelioration
allowance as a matter of right." Thus, this Court
required respondents to defend themselves.
Accordingly, the Office of the COA General Counsel
prepared and filed the Comment and Memorandum on
behalf of respondents.
Petitioners assail the COA for allowing only incumbents
as of July 1, 1989 to receive COLA and amelioration
allowance during the "ineffectivity" of DBM-CCC No. 10;
that is, from July 1, 1989 to March 16, 1999. They
contend that the COLA and the amelioration allowance
did not automatically become "not integrated" benefits,
within the purview of the second sentence of Section 12
of RA No. 6758, which reads as follows:
"SEC. 12. Consolidation of Allowances and
Compensation.  - - All allowances, except for
representation and transportation allowances; clothing
and laundry allowances; subsistence allowances of
marine officers and crew on board government vessels
and hospital personnel; hazard pay; allowances of
foreign service personnel stationed abroad; and such
other additional compensation not otherwise specified
herein as may be determined by the DBM, shall be
deemed included in the standardized salary rates herein
prescribed. Such other additional compensation,
whether in cash or in kind, being received by
incumbents only as of July 1, 1989 not integrated into
the standardized salary rates shall continue to be
authorized."
A reading of the first sentence of this provision readily
reveals that all allowances are "deemed included" or
integrated into the prescribed standardized salary rates,
except the following: (a) representation and
transportation allowances, (b) clothing and laundry
allowances, (c) subsistence allowances of marine
officers and crew on board government vessels, (d)
subsistence allowances of hospital personnel, (e) hazard
pay, (f) allowances of foreign service personnel
stationed abroad, and (g) such other additional
compensation not otherwise specified in Section
12.  These additional "non-integrated benefits" (item g)
were to be determined by the Department of Budget
and Management (DBM) in an appropriate issuance.
Clearly, the last clause of the first sentence of Section
12, which is a "catch-all" proviso, necessarily entails the
DBM's promulgation of pertinent implementing rules
and regulations. These will identify the "additional
compensation" that may be given over and above the
standardized salary rates.
Pursuant to its authority under Section 23 of RA 6758,
the DBM thus issued on October 2, 1989, DBM-CCC No.
10, Section 4.0 of which enumerated the various
allowances that were deemed "integrated" into the
standardized basic salary. Admittedly, among these
allowances were the COLA and the amelioration
allowance.
However, because of its lack of publication in either
the Official Gazette  or in a newspaper of general
circulation, DBM-CCC No. 10 was declared ineffective on
August 12, 1998, in De Jesus v. COA,9 which we quote:
"In the present case under scrutiny, its is decisively clear
that DDM-CCC No. 10, which completely disallows
payment of allowances and other additional
compensation to government officials and employees,
starting November 1, 1989, is not a mere interpretative
or internal regulation. It is something more than
that. And why not, when it tends to deprive
government workers of their allowances and additional
compensation sorely needed to keep body and soul
together. At the very least, before the said circular
under attack may be permitted to substantially reduce
their income, the government officials and employees
concerned should be apprised and alerted by the
publication of the subject circular in the Official Gazette
or in a newspaper of general circulation in the
Philippines - to the end that they be given amplest
opportunity to voice out whatever opposition they may
have, and to ventilate their stance on the subject
matter. This approach is more in keeping with
democratic precepts and rudiments of fairness and
transparency."10
In other words, during the period that DBM-CCC No. 10
was in legal limbo,11 the COLA and the amelioration
allowance were not
effectively integrated into the standardized salaries.
Hence, it would be incorrect to contend that because
those allowances were not effectively integrated under
the first sentence, then they were "non-integrated
benefits" falling under the second sentence of Section
12 of RA 6758. Their characterization must be deemed
to have also been in legal limbo, pending the effectivity
of DBM-CCC No. 10. Consequently, contrary to the
ruling of the COA, the second sentence does not apply
to the present case. By the same token, the policy
embodied in the provision - - the non-diminution of
benefits in favor of incumbents as of July 1, 1989 - - is
also inapplicable.
The parties fail to cite any law barring the continuation
of the grant of the COLA and the amelioration
allowance during the period when DBM-CCC No. 10 was
in legal limbo.
The present case should be distinguished from PNB v.
Palma,12 in which the respondents sought
by mandamus to compel the petitioner therein to grant
them certain fringe benefits and allowances that
continued to be given to Philippine National Bank (PNB)
employees hired prior to July 1, 1989. This Court held
that PNB could not be compelled to do so, because the
respondents had been hired after that date. Under
Section 12 of RA 6758, only "incumbent" government
employees (as of July 1, 1989) already receiving those
benefits may continue to receive them, apart from their
standardized pay.
In the present case, the PPA already granted  herein
petitioners the COLA and the amelioration allowances,
even if they were hired after July 1, 1989. The only issue
is whether they should have continued to receive the
benefits during the period of the "ineffectivity" of DBC-
CCC No. 10; that is, from July 1, 1989 to March 16, 1999,
the period during which those allowances were not
deemed integrated into their standard salary rates.
Furthermore, in the PNB Decision, the employees
claimed a right to receive the allowances from July 1,
1989 to January 1, 1997. PNB was able to grant the
benefits post facto, because on that date (January 1,
1997) it had already been privatized and was thus no
longer subject to the restrictions imposed by RA 6758
(the Salary Standardization Law).
Tellingly, the subject matter of the PNB case involved
benefits that had not been deemed integrated into, but
in fact exempted from, the standardized salary rates. In
the present case, the subject matter refers to those
deemed included, but were placed "in limbo" as a result
of this Court's ruling in De Jesus v. COA.
To stress, the failure to publish DBM-CCC No. 10 meant
that the COLA and the amelioration allowance were not
effectively integrated into the standardized salaries of
the PPA employees as of July 1, 1989. The integration
became effective only on March 16, 1999. Thus, in
between those two dates, they were still entitled to
receive the two allowances.
Be it remembered that the "other additional
compensations" not expressly specified in Section 12 of
RA 6758 had to be determined by the DBM before they
could be deemed included or not included in the
standardized salary rates. True, Section 12 could be
considered self-executing in regard to items (a) to (f)
above, but it was not so in regard to item (g). It was only
upon the issuance and effectivity of the corresponding
DBM Implementing Rules and Regulations that the
enumeration found in item (g) could be deemed legally
completed.
As pointed out by the OSG, until and unless the DBM
issued those Implementing Rules categorically excluding
the COLA and the amelioration allowance, there could
not have been any valid notice to the government
employees concerned that indeed those allowances
were deemed included in the standardized salary
rates.13 Consequently, there was no reason or basis to
distinguish or classify PPA employees into two
categories for purposes of determining their
entitlement to the back payment of those unpaid
allowances during the period in dispute.
Hence, in consonance with the equal-protection clause
of the Constitution, and considering that the employees
were all similarly situated as to the matter of the COLA
and the amelioration allowance, they should all be
treated similarly. All - - not only incumbents as of July 1,
1989 - - should be allowed to receive back pay
corresponding to the said benefits, from July 1, 1989 to
the new effectivity date of DBM-CCC No. 10 - - March
16, 1999.
The principle of equal protection is not a barren concept
that may be casually swept aside. While it does not
demand absolute equality, it requires that all persons
similarly situated be treated alike, both as to privileges
conferred and liabilities enforced. Verily, equal
protection and security shall be accorded every person
under identical or analogous circumstances.14
WHEREFORE, the Petition is GRANTED  and the assailed
Decision and Resolution of the Commission on
Audit ANNULLED and SET ASIDE. No costs.
SO ORDERED.
Senate v. Ermita
FACTS:
This is a petition for certiorari and prohibition proffer
that the President has abused power by issuing E.O. 464
“Ensuring Observance of the Principles of Separation of
Powers, Adherence to the Rule on Executive Privilege
and Respect for the Rights of Public Officials Appearing
in Legislative Inquiries in
Aid of Legislation Under the Constitution, and for Other
Purposes”. Petitioners pray for its declaration as null
and void for being unconstitutional.
In the exercise of its legislative power, the Senate of the
Philippines, through its various Senate Committees,
conducts inquiries or investigations in aid of legislation
which call for, inter alia, the attendance of officials and
employees of the executive department, bureaus, and
offices including those employed in Government Owned
and Controlled Corporations, the Armed Forces of the
Philippines (AFP), and the Philippine National Police
(PNP).
The Committee of the Senate issued invitations to
various officials of the Executive Department for them
to appear as resource speakers in a public hearing on
the railway project, others on the issues of massive
election fraud in the Philippine elections, wire tapping,
and the role of military in the so-called “Gloriagate
Scandal”.
Said officials were not able to attend due to lack of
consent from the President as provided by E.O. 464,
Section 3 which requires all the public officials
enumerated in Section 2(b) to secure the consent of the
President prior to appearing before either house of
Congress.
ISSUE:
Is Section 3 of E.O. 464, which requires all the public
officials, enumerated in Section 2(b) to secure the
consent of the President prior to appearing before
either house of Congress, valid and constitutional?
RULING:
No. The enumeration in Section 2 (b) of E.O. 464 is
broad and is covered by the executive privilege. The
doctrine of executive privilege is premised on the fact
that certain information must, as a matter of necessity,
be kept confidential in pursuit of the public interest. The
privilege being, by definition, an exemption from the
obligation to disclose information, in this case to
Congress, the necessity must be of such high degree as
to outweigh the public interest in enforcing that
obligation in a particular case.
Congress undoubtedly has a right to information from
the executive branch whenever it is sought in aid of
legislation. If the executive branch withholds such
information on the ground that it is privileged, it must
so assert it and state the reason therefor and why it
must be respected.
The infirm provisions of E.O. 464, however, allow the
executive branch to evade congressional requests for
information without need of clearly asserting a right to
do so and/or proffering its reasons therefor. By the
mere expedient of invoking said provisions, the power
of Congress to conduct inquiries in aid of legislation is
frustrated.
--------------------------------------
Facts:
In 2005,scandalsinvolving anomalous transactions about
the North Rail Project as well as the Garci tapes
surfaced. This prompted the Senate to conduct a public
hearing to investigate the said anomalies particularly
the alleged overpricing in the NRP. The investigating
Senate committee issued invitations to certain
department heads and military officials to speak before
the committee as resource persons. Ermita submitted
that he and some of the department heads cannot
attend the said hearing due topressingmatters that
needimmediateattention. AFP Chief of Staff Senga
likewise sent asimilarletter. Drilon, the senate president,
excepted the said requests for they were sent belatedly
and arrangements were already made and scheduled.
Subsequently, GMA issued EO 464 which took effect
immediately. EO 464basicallyprohibited Department
heads, Senior officials of executive departments who in
the judgment of the department heads are covered by
the executive privilege; Generals and flag officers of the
Armed Forces of the Philippines and such other officers
who in the judgment of the Chief of Staff are covered by
the executive privilege; Philippine National Police (PNP)
officers with rank of chief superintendent or higher and
such other officers who in the judgment of the Chief of
the PNP are covered by the executive privilege; Senior
national security officials who in the judgment of the
National Security Adviser are covered by the executive
privilege; and Such other officers as may be determined
by the President, from appearing in such hearings
conducted by Congress without first securing the
president’s approval. The department heads and the
military officers who were invited by the Senate
committee then invoked EO 464 to except themselves.
Despite EO 464, the scheduled hearing proceeded with
only 2 military personnel attending. For defying
President Arroyo’s order barring military personnel
from testifying before legislative inquiries without her
approval, Brig. Gen. Gudani and Col. Balutan were
relieved from their military posts and were made to
face court martial proceedings. EO 464’s
constitutionality was assailed for it is alleged that it
infringes on the rights and duties of Congress to
conduct investigation in aid of legislation and conduct
oversight functions in the implementation of laws.
ISSUE:Whether or not EO 464 is constitutional.
HELD:The SC ruled that EO 464 is constitutional in part.
To determine the validity of the provisions of EO 464,
the SC sought to distinguish Section 21 from Section 22
of Art 6 of the 1987 Constitution. The Congress’ power
of inquiry is expressly recognized in Section 21 of Article
VI of the Constitution. Although there is no provision in
the Constitution expressly investing either House of
Congress with power to make investigations and exact
testimony to the end that it mayexerciseits legislative
functions advisedly and effectively, such power is so far
incidental to the legislative function as to be implied. In
other words, the power of inquiry – with process to
enforce it – is an essential and appropriate auxiliary to
the legislative function. A legislative body cannot
legislate wisely or effectively in the absence of
information respecting the conditions which the
legislation is intended to affect or change; and where
the legislative body does not itself possess the requisite
information – which is not infrequently true – recourse
must be had to others who do possess it. Section 22 on
the other hand provides for the QuestionHour. The
Question Hour is closely related with the legislative
power, and it is precisely as a complement to or a
supplement of the Legislative Inquiry. The appearance
of the members of Cabinet would be very, very essential
not only in theapplicationof check and balance but also,
in effect, in aid of legislation. Section 22 refers only to
Question Hour, whereas, Section 21 would refer
specifically to inquiries in aid of legislation, under which
anybody for that matter, may be summoned and if he
refuses, he can be held in contempt of the House. A
distinction was thus made between inquiries in aid of
legislation and the question hour. While attendance was
meant to be discretionary in the question hour, it was
compulsory in inquiries in aid of legislation. Sections 21
and 22, therefore, while closely related and
complementary to each other, should not be considered
as pertaining to the same power of Congress. One
specifically relates to the power to conduct inquiries in
aid of legislation, the aim of which is to elicit
information that may be used for legislation, while the
other pertains to the power to conduct a question hour,
the objective of which is to obtain information in pursuit
of Congress’ oversight function. Ultimately, the power
of Congress to compel the appearance of executive
officials under Section 21 and the lack of it under
Section 22 find their basis in the principle of separation
of powers. While the executive branch is a co-equal
branch of the legislature, it cannot frustrate the power
of Congress to legislate by refusing to comply with its
demands for information. When Congress exercises its
power of inquiry, the only way for department heads to
exempt themselves therefrom is by a valid claim of
privilege. They are not exempt by the mere fact that
they are department heads. Only one executive official
may be exempted from this power — the President on
whom executive power is vested, hence, beyond the
reach of Congress except through the power of
impeachment. It is based on her being the highest
official of the executive branch, and the due respect
accorded to a co-equal branch of government which is
sanctioned by a long-standing custom. The requirement
then to secure presidential consent under Section 1,
limited as it is only to appearances in the question hour,
is valid on its face. For under Section 22, Article VI of the
Constitution, the appearance of department heads in
the question hour is discretionary on their part. Section
1 cannot, however, be applied to appearances of
department heads in inquiries in aid of legislation.
Congress is not bound in such instances to respect the
refusal of the department head to appear in such
inquiry, unless a valid claim of privilege is subsequently
made, either by the President herself or by the
Executive Secretary.
When Congress merely seeks to be informed on how
department heads are implementing the statutes which
it has issued, its right to such information is not as
imperative as that of the President to whom, as Chief
Executive, such department heads must give a report of
their performance as a matter of duty. In such
instances, Section 22, in keeping with the separation of
powers, states that Congress may onlyrequesttheir
appearance. Nonetheless, when the inquiry in which
Congress requires their appearance is ‘in aid of
legislation’ under Section 21, the appearance is
mandatory for the same reasons stated in Arnault.