Republic of the Philippines

SUPREME COURT

THIRD DIVISION

G.R. No. 151899 August 16, 2005

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC., Petitioners,

vs.
PROVINCE OF LAGUNA and MANUEL E. LEYCANO, JR., in his capacity as the Provincial Treasurer of the Province of
Laguna, Respondents.

DECISION

GARCIA, J.:

Twice, this Court has denied the earlier plea of petitioner Philippine Long Distance Company, Inc. (PLDT) to be adjudged exempt
from the payment of franchise tax assessed against it by local government units. The first was in the 2001 case of PLDT vs. City
of Davao and the second, in the very recent case of PLDT vs. City of Bacolod, et al. . Indeed, no less than the Court en banc, in
1 2

its Resolution of March 25, 2003 , denied PLDT’s motion for reconsideration in Davao. In both cases, the Court in effect ruled
3

that the desired relief is not legally feasible.

No less than PLDT’s third, albeit this time involving the Province of Laguna, the instant similar petition for review
on certiorari under Rule 45 of the Rules of Court seeks the reversal of the decision dated 28 November 2001 of the Regional
4

Trial Court at Laguna, dismissing PLDT’s petition in its Civil Case No. SC-3953, an action for refund of franchise tax.

Except for inconsequential factual details which understandably vary from the first two (2) PLDT cases, the legal landscape is
practically the same:

PLDT is a holder of a legislative franchise under Act No. 3436, as amended, to render local and international telecommunications
services. On August 24, 1991, the terms and conditions of its franchise were consolidated under Republic Act No. 7082, Section 5

12 of which embodies the so-called "in-lieu-of-all taxes" clause, whereunder PLDT shall pay a franchise tax equivalent to three
percent (3%) of all its gross receipts, which franchise tax shall be "in lieu of all taxes". More specifically, the provision pertinently
reads:

SEC. 12. xxx In addition thereto, the grantee, its successors or assigns shall pay a franchise tax equivalent to three percent (3%)
of all gross receipts of the telephone or other telecommunications businesses transacted under this franchise by the grantee, its
successors or assigns, and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof: xxx (Italics ours).

Meanwhile, or on January 1, 1992, Republic Act No. 7160, otherwise known as the Local Government Code, took effect. Section
137 of the Code, in relation to Section 151 thereof, grants provinces and other local government units the power to impose local
franchise tax on businesses enjoying a franchise, thus:

SEC. 137. Franchise Tax. – Notwithstanding any exemption granted by any law or other special law, the province may impose a
tax on businesses enjoying a franchise, at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual
receipts for the preceding calendar year based on the incoming receipt, or realized, within its territorial jurisdiction.

By Section 193 of the same Code, all tax exemption privileges then enjoyed by all persons, whether natural or juridicial, save
those expressly mentioned therein, were withdrawn, necessarily including those taxes from which PLDT is exempted under the
"in-lieu-of-all taxes" clause in its charter. We quote Section 193:

SEC. 193. Withdrawal of Tax Exemption Privileges. – Unless otherwise provided in this Code, tax exemptions or incentives
granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled
corporations, except local water districts, cooperatives duly registered under R.A. 6938, non-stock and non-profit hospitals and
educational institutions, are hereby withdrawn upon the effectivity of this Code.

Invoking its authority under Section 137, supra, of the Local Government Code, the Province of Laguna, through its local
legislative assembly, enacted Provincial Ordinance No. 01-92, made effective January 1, 1993, imposing a franchise tax upon all
businesses enjoying a franchise, PLDT included.

On January 28, 1998, PLDT, in compliance with the aforementioned Ordinance, paid the Province of Laguna its local franchise
tax liability for the year 1998 in the amount of One Million Eighty-One Thousand Two Hundred Twelve and 10/100 Pesos
(₱1,081,212.10).

Prior thereto, Congress, aiming to level the playing field among telecommunication companies, enacted Republic Act No. 7925,
otherwise known as the Public Telecommunications Policy Act of the Philippines, which took effect on March 16, 1995. To achieve
the legislative intent, Section 23 thereof, also known as the "most-favored treatment" clause, provides for an equality of treatment
in the telecommunications industry, to wit:

SEC. 23. Equality of Treatment in the Telecommunications Industry – Any advantage, favor, privilege, exemption, or immunity
granted under existing franchises, or may hereafter be granted, shall ipso facto become part of previously granted
telecommunications franchises and shall be accorded immediately and unconditionally to the grantees of such
franchises: Provided, however, That the foregoing shall neither apply to nor affect provisions of telecommunications franchises
concerning territory covered by the franchise, the life span of the franchise, or the type of the service authorized by the franchise.

Then, on June 2, 1998, the Department of Finance, thru its Bureau of Local Government Finance (BLGF), issued a ruling to the
effect that as of March 16, 1995, the effectivity date of the Public Telecommunications Policy Act of the Philippines, PLDT, among
6

other telecommunication companies, became exempt from local franchise tax. Pertinently, the BLGF ruling reads:

It appears that RA 7082 further amending Act No. 3436 which granted to PLDT a franchise to install, operate and maintain a
telephone system throughout the Philippine Islands was approved on August 3, 1991. Section 12 of said franchise, likewise
contains the ‘in lieu of all taxes’ proviso.

In this connection, Section 23 of RA 7929, quoted hereunder, which was approved on March 1, 1995 provides for the equality of
treatment in the telecommunications industry:

xxx xxx xxx

On the basis of the aforequoted Section 23 of RA 7925, PLDT as a telecommunications franchise holder becomes automatically
covered by the tax exemption provisions of RA 7925, which took effect on March 16, 1995.

Accordingly, PLDT shall be exempt from the payment of franchise and business taxes imposable by LGUs under Sections 137
and 143, respectively of the LGC [Local Government Code], upon the effectivity of RA 7925 on March 16, 1995. However, PLDT
shall be liable to pay the franchise and business taxes on its gross receipts realized from January 1, 1992 up to March 15, 1995,
during which period PLDT was not enjoying the ‘most favored clause’ provision of RA 7025 [sic].

On the basis of the aforequoted ruling, PLDT refused to pay the Province of Laguna its local franchise tax liability for 1999. And,
on December 22, 1999, it even filed with the Office of the Provincial Treasurer a written claim for refund of the amount it paid as
local franchise tax for 1998.

With no refund having been made, PLDT instituted with the Regional Trial Court at Laguna a petition therefor against the Province
and its Provincial Treasurer, which petition was thereat docketed as Civil Case No. SC-3953.

In its decision of November 28, 2001, the trial court denied PLDT’s petition, thus:

WHEREFORE, the petition is denied. Petitioner PLDT is not exempt from paying local franchise and business taxes to the
Respondent Province. Refund is denied. For failure to substantiate the claim for exemplary damages and attorneys fees, the
same is likewise denied.

SO ORDERED.

Hence, this recourse by PLDT, faulting the trial court, as follows:

5.01.a. THE LOWER COURT ERRED IN NOT HOLDING THAT UNDER PETITIONER’S FRANCHISE (REPUBLIC ACT
NO.7082), AS AMENDED AND EXPANDED BY SECTION 23 OF REPUBLIC ACT NO. 7925, TAKING INTO ACCOUNT THE
FRANCHISES OF GLOBE TELECOM INC., (GLOBE) (REPUBLIC ACT NO. 7229) AND SMART COMMUNICATIONS, INC.
(SMART) (REPUBLIC ACT NO.7294), WHICH ARE SPECIAL PROVISIONS AND WERE ENACTED SUBSEQUENT TO THE
LOCAL GOVERNMENT CODE, NO FRANCHISE TAXES MAY BE IMPOSED ON PETITIONER BY RESPONDENT PROVINCE.

5.01.b. THE LOWER COURT ERRED IN NOT HOLDING THAT SECTION 137 OF THE LOCAL GOVERNMENT CODE, WHICH
ALLOWS RESPONDENT PROVINCE TO IMPOSE THE FRANCHISE TAX, AND SECTION 193 THEREOF, WHICH PROVIDES
FOR WITHDRAWAL OF TAX EXEMPTION PRIVILEGES, ARE NOT APPLICABLE IN THIS CASE.

5.01.c. THE LOWER COURT ERRED IN APPLYING PRINCIPLES OF STATUTORY CONSTRUCTION THAT TAX
EXEMPTIONS ARE DISFAVORED AND IN HOLDING THAT SECTION 23 OF REPUBLIC ACT NO. 7925 (PUBLIC
TELECOMMUNICATIONS POLICY ACT) DOES NOT SUPPORT PETITIONER’S POSITION IN THIS CASE.

5.01.d. THE LOWER COURT ERRED IN NOT GIVING WEIGHT TO THE RULING OF THE DEPARTMENT OF FINANCE,
THROUGH ITS BUREAU OF LOCAL GOVERNMENT FINANCE, THAT PETITIONER IS EXEMPT FROM THE PAYMENT OF
FRANCHISE AND BUSINESS TAXES IMPOSABLE BY LOCAL GOVERNMENT UNITS UNDER THE LOCAL GOVERNMENT
CODE.
5.01.e. THE LOWER COURT ERRED IN NOT GRANTING PETITIONER’S CLAIM FOR TAX REFUND.

5.01.f. THE LOWER COURT ERRED IN DENYING THE PETITION BELOW.

We note, quite interestingly, that except for the particular local government units involved in the earlier case of PLDT vs. City of
Davao and the very recent case of PLDT vs. City of Bacolod, et al., the arguments presently advanced by petitioner on the issues
7 8

raised herein are but a mere reiteration if not repetition of the very same arguments it has already raised in the two (2) earlier
PLDT cases. For sure, the errors presently assigned are substantially the same as those in Davao and in Bacolod, all of which
have been adequately addressed and passed upon by this Court in its decisions therein as well as in its en banc Resolution
in Davao.

In PLDT vs. City of Davao, and again in PLDT vs. City of Bacolod, et al., this Court has interpreted Section 23 of Rep. Act No.
7925. There, we ruled that Section 23 does not operate to exempt PLDT from the payment of franchise tax. We quote what we
have said in Davao and reiterated in Bacolod.

In sum, it does not appear that, in approving §23 of R.A. No. 7925, Congress intended it to operate as a blanket tax exemption
to all telecommunications entities. Applying the rule of strict construction of laws granting tax exemptions and the rule that doubts
should be resolved in favor of municipal corporations in interpreting statutory provisions on municipal taxing powers, we hold that
§23 of R.A. No. 7925 cannot be considered as having amended petitioner's franchise so as to entitle it to exemption from the
imposition of local franchise taxes. Consequently, we hold that petitioner is liable to pay local franchise taxes in the amount of
₱3,681,985.72 for the period covering the first to the fourth quarter of 1999 and that it is not entitled to a refund of taxes paid by
it for the period covering the first to the third quarter of 1998.
9

The Court explains further:

To begin with, tax exemptions are highly disfavored. The reason for this was explained by this Court in Asiatic Petroleum Co. v.
Llanes, in which it was held:

. . . Exemptions from taxation are highly disfavored, so much so that they may almost be said to be odious to the law. He who
claims an exemption must be able to point to some positive provision of law creating the right. . . As was said by the Supreme
Court of Tennessee in Memphis vs. U. & P. Bank (91 Tenn., 546, 550), ‘The right of taxation is inherent in the State. It is a
prerogative essential to the perpetuity of the government; and he who claims an exemption from the common burden must justify
his claim by the clearest grant of organic or statute law.’ Other utterances equally or more emphatic come readily to hand from
the highest authority. In Ohio Life Ins. and Trust Co. vs. Debolt (16 Howard, 416), it was said by Chief Justice Taney, that the
right of taxation will not be held to have been surrendered, ‘unless the intention to surrender is manifested by words too plain to
be mistaken.’ In the case of the Delaware Railroad Tax (18 Wallace, 206, 226), the Supreme Court of the United States said that
the surrender, when claimed, must be shown by clear, unambiguous language, which will admit of no reasonable construction
consistent with the reservation of the power. If a doubt arises as to the intent of the legislature, that doubt must be solved in favor
of the State. In Erie Railway Company vs. Commonwealth of Pennsylvania (21 Wallace, 492, 499), Mr. Justice Hunt, speaking
of exemptions, observed that a State cannot strip itself of the most essential power of taxation by doubtful words. ‘It cannot, by
ambiguous language, be deprived of this highest attribute of sovereignty.’ In Tennessee vs. Whitworth (117 U.S., 129, 136), it
was said: ‘In all cases of this kind the question is as to the intent of the legislature, the presumption always being against any
surrender of the taxing power.’ In Farrington vs. Tennessee and County of Shelby (95 U.S., 379, 686), Mr. Justice Swayne said:
‘. . . When exemption is claimed, it must be shown indubitably to exist. At the outset, every presumption is against it. A well-
founded doubt is fatal to the claim. It is only when the terms of the concession are too explicit to admit fairly of any other
construction that the proposition can be supported.’

The tax exemption must be expressed in the statute in clear language that leaves no doubt of the intention of the legislature to
grant such exemption. And, even if it is granted, the exemption must be interpreted in strictissimi juris against the taxpayer and
liberally in favor of the taxing authority.

xxx xxx xxx

The fact is that the term ‘exemption’ in §23 is too general. A cardinal rule in statutory construction is that legislative intent must
be ascertained from a consideration of the statute as a whole and not merely of a particular provision. For, taken in the abstract,
a word or phrase might easily convey a meaning which is different from the one actually intended. A general provision may
actually have a limited application if read together with other provisions. Hence, a consideration of the law itself in its entirety and
the proceedings of both Houses of Congress is in order.

xxx xxx xxx

R.A. No. 7925 is thus a legislative enactment designed to set the national policy on telecommunications and provide the structures
to implement it to keep up with the technological advances in the industry and the needs of the public. The thrust of the law is to
promote gradually the deregulation of the entry, pricing, and operations of all public telecommunications entities and thus promote
a level playing field in the telecommunications industry. There is nothing in the language of §23 nor in the proceedings of both
the House of Representatives and the Senate in enacting R.A. No. 7925 which shows that it contemplates the grant of tax
exemptions to all telecommunications entities, including those whose exemptions had been withdrawn by the LGC.
What this Court said in Asiatic Petroleum Co. v. Llanes applies mutatis mutandis to this case: ‘When exemption is claimed, it
must be shown indubitably to exist. At the outset, every presumption is against it. A well-founded doubt is fatal to the claim. It is
only when the terms of the concession are too explicit to admit fairly of any other construction that the proposition can be
supported.’ In this case, the word ‘exemption’ in §23 of R.A. No. 7925 could contemplate exemption from certain regulatory or
reporting requirements, bearing in mind the policy of the law. It is noteworthy that, in holding Smart and Globe exempt from local
taxes, the BLGF did not base its opinion on §23 but on the fact that the franchises granted to them after the effectivity of the LGC
exempted them from the payment of local franchise and business taxes.

As before, PLDT argues that because Smart Communications, Inc. (SMART) and Globe Telecom (GLOBE) under whose
respective franchises granted after the effectivity of the Local Government Code, are exempt from franchise tax, it follows that
petitioner is likewise exempt from the franchise tax sought to be collected by the Province of Laguna, on the reasoning that the
grant of tax exemption to SMART and GLOBE ipso facto applies to PLDT, consistent with the "most-favored-treatment" clause
found in Section 23 of the Public Telecommunications Policy Act of the Philippines (Rep. Act No. 7925).

Again, there is nothing novel in petitioner’s contention. For sure, in Davao, this Court even adverted to PLDT’s similar argument
therein, thus:

Finally, it [PLDT] argues that because Smart and Globe are exempt from the franchise tax, it follows that it must likewise be
exempt from the tax being collected by the City of Davao because the grant of tax exemption to Smart and Globe ipso
facto extended the same exemption to it,

which argument this Court rejected in said case in the following wise:

The acceptance of petitioner’s theory would result in absurd consequences. To illustrate: In its franchise, Globe is required to
pay a franchise tax of only one and one-half percentum (1/2% [sic] ) of all gross receipts from its transactions while Smart is
required to pay a tax of three percent (3%) on all gross receipts from business transacted. Petitioner’s theory would require that,
to level the playing field, any "advantage, favor, privilege, exemption, or immunity" granted to Globe must be extended to all
telecommunications companies, including Smart. If, later, Congress again grants a franchise to another telecommunications
company imposing, say, one percent (1%) franchise tax, then all other telecommunications franchises will have to be adjusted to
"level the playing field" so to speak. This could not have been the intent of Congress in enacting Section 23 of Rep. Act 7925.
Petitioner’s theory will leave the Government with the burden of having to keep track of all granted telecommunications franchises,
lest some companies be treated unequally. It is different if Congress enacts a law specifically granting uniform advantages, favor,
privilege, exemption or immunity to all telecommunications entities.

On PLDT’s motion for reconsideration in Davao, the Court added in its en banc Resolution of March 25, 2003, that even as it is
10

a state policy to promote a level playing field in the communications industry, Section 23 of Rep. Act No. 7925 does not refer to
tax exemption but only to exemption from certain regulations and requirements imposed by the National Telecommunications
Commission:

xxx. The records of Congress are bereft of any discussion or even mention of tax exemption. To the contrary, what the Chairman
of the Committee on Transportation, Rep. Jerome V. Paras, mentioned in his sponsorship of H.B. No. 14028, which became R.A.
No. 7925, were ‘equal access clauses’ in interconnection agreements, not tax exemptions. He said:

There is also a need to promote a level playing field in the telecommunications industry. New entities must be granted protection
against dominant carriers through the encouragement of equitable access charges and equal access clauses in interconnection
agreements and the strict policing of predatory pricing by dominant carriers. Equal access should be granted to all operators
connecting into the interexchange network. There should be no discrimination against any carrier in terms of priorities and/or
quality of services.

Nor does the term ‘exemption’ in § 23 of R.A. No. 7925 mean tax exemption. The term refers to exemption from certain regulations
and requirements imposed by the National Telecommunications Commission (NTC). For instance, R.A. No. 7925, § 17 provides:
‘The Commission shall exempt any specific telecommunications service from its rate or tariff regulations if the service has
sufficient competition to ensure fair and reasonable rates or tariffs.’ Another exemption granted by the law in line with its policy
of deregulation is the exemption from the requirement of securing permits from the NTC every time a telecommunications
company imports equipment. 11

PLDT’s third assigned error has likewise been squarely addressed in the same en banc Resolution, when the Court rejected
PLDT’s contention that the "in-lieu-of-all-taxes" clause does not refer to "tax exemption" but to "tax exclusion" and hence,
the strictissimi juris rule does not apply. The en banc explains that these two terms actually mean the same thing, such that the
rule that tax exemption should be applied in strictissimi juris against the taxpayer and liberally in favor of the government applies
equally to tax exclusions:

Indeed, both in their nature and in their effect there is no difference between tax exemption and tax exclusion. Exemption is an
immunity or privilege; it is freedom from a charge or burden to which others are subjected. Exclusion, on the other hand, is the
removal of otherwise taxable items from the reach of taxation, e.g., exclusions from gross income and allowable deductions.
Exclusion is thus also an immunity or privilege which frees a taxpayer from a charge to which others are subjected. Consequently,
the rule that tax exemption should be applied in strictissimi juris against the taxpayer and liberally in favor of the government
applies equally to tax exclusions. To construe otherwise the ‘in lieu of all taxes’ provision invoked is to be inconsistent with the
theory that R.A. No. 7925, § 23 grants tax exemption because of a similar grant to Globe and Smart. 12
As in Davao, PLDT presently faults the trial court for not giving weight to the ruling of the BLGF which, to petitioner’s mind, is an
administrative agency with technical expertise and mastery over the specialized matters assigned to it. Again, to quote from our
ruling in Davao:

To be sure, the BLGF is not an administrative agency whose findings on questions of fact are given weight and deference in the
courts. The authorities cited by petitioner pertain to the Court of Tax Appeals, a highly specialized court which performs judicial
functions as it was created for the review of tax cases. In contrast, the BLGF was created merely to provide consultative services
and technical assistance to local governments and the general public on local taxation, real property assessment, and other
related matters, among others. The question raised by petitioner is a legal question, to wit, the interpretation of §23 of R.A. No.
7925. There is, therefore, no basis for claiming expertise for the BLGF that administrative agencies are said to possess in their
respective fields.
13

With the reality that the arguments presently advanced by petitioner are but a mere reiteration if not a virtual repetition of the very
same arguments it has already raised in Davao and in Bacolod, all of which arguments and submissions have been extensively
addressed and adequately passed upon by this Court in its decisions in said two (2) PLDT cases, and noting that the instant
recourse has not raised any new fresh issue to warrant a second look, it, too, must have to fall.

WHEREFORE, and on the basis of our consistent ruling in PLDT vs. City of Davao and PLDT vs. City of Bacolod, et al., the
petition is DENIED and the assailed decision of the trial court AFFIRMED.

With treble costs against petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-23625 November 25, 1983

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,

vs.
MARIANO TERRADO, PEDRO TERRADO and CASIMIRO FLORES, defendants-appellees.

G.R. No.L-23626 November 25, 1983

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,

vs.
REMEDIOS GUNDRAN, PEDRO TERRADO, CASIMIRO FLORES, and BRUNO GUNDRAN, defendants-appellees.

G.R. No. L-23627 November 25, 1983

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellants,

vs.
GERTRUDES OBO, PEDRO TERRADO, CASIMIRO FLORES, and BRUNO GUNDRAN. defendants-appellees.

The Solicitor General for plaintiff-appellee.

German G. Vilgera for defendants-appellees.

CONCEPCION, JR., J.: ñé+.£ªwph!1

APPEAL from the orders of the Court of First Instance of Camarines Sur, all dated April 15, 1963, which dismissed Criminal Case
No. 7613 of said court, entitled: "The People of the Philippines, plaintiff, versus Mariano Terrado, et al., defendants"; Criminal
Case No. 7614, entitled: the People of the Philippines, plaintiff, versus Remedios Gundran, et al., defendants"; and Criminal Case
No. 7615, entitled: "The People of the Philippines, plaintiff, versus Gertrudes Obo, et al., defendants", on the ground that "the
crimes committed by the accused are either perjury defined under Section 129 of the Commonwealth Act No. 141 and punished
under Art. 183 of the Revised Penal Code, or offenses relating to 'unlawful occupation and destruction of public forest' defined
and punished under Section 2751 of the Revised Administrative code, as amended by Acts 115 and 171" and had already
prescribed.

The appellant maintains that the facts charged in the informations constitute the crimes of falsification of public documents,
defined and penalized under Art. 171, par. 4, of the Revised Penal Code, and that the criminal actions have not Yet prescribed.

The records of the cases show that in November, 1951 and May, 1952, Gertrudes Obo, Remedios Gundran, and Mariano Terrado
applied for, and were issued free patents for contiguous parcels of land situated in Barrio Paculago Ragay, Camarines Sur, each
containing an area of more than 23 hectares, and more particularly known as Lots 7, 8 and 9 of Plan Psu-1 25902, respectively.
As the said parcels of land were allegedly forest land and, hence, not disposable, Mariano Terrado, Remedios Gundran, and
Gertrudes Obo were charged before the Court of First Instance of Camarines Sur on March 13, 1962, in three separate
informations for falsification of public documents, defined and penalized under Art. 171 of the Revised Penal Code, docketed
therein as Criminal Case Nos. 7613, 7614, and 7615, respectively, together with Pedro Terrado, a licensed private land surveyor;
Casimiro Flores, a public land inspector of the Bureau of Lands; and Bruno Gundran, the District Land Officer of District No. 10
of the Bureau of Lands, for having conspired, confederated, cooperated together, and helped one another, through false and
fraudulent misrepresentations in wilfully, unlawfully, and feloniously with full knowledge of their falsity, preparing or causing to be
prepared, documents containing false narration of facts, more particularly, the (1) applications for free patent; (2) notices of
application for free patent; (3) final inspection reports; and (4) first indorsements of District Land Officer Bruno Gundran, wherein
they made it appear to the Director of Lands and the Secretary of Agriculture and Natural Resources that the applicants
possessed all the necessary qualifications and had complied with all the requirements of law to entitle them to a free patent,
when in truth and in fact, as they all fully well knew, all their manifestations were false and fraudulent and that the said applicants
had not complied with any or all of the requirements of the law to entitle them to a free patent. The informations further alleged
that Casimiro Flores and Bruno Gundran had taken advantage of their respective official positions in making the untruthful
statements. Before the arraignment, the defendants filed separate motions to quash the informations on the ground that the
crimes charged in the informations do not constitute the offense of falsification of public documents, and that the same had
already prescribed. After proper hearing, the trial court dismissed the informations as aforesaid. Hence, the present recourse.
While the informations sufficiently alleged the commission of falsification of public documents under Art. 171 of the Revised Penal
Code, the offenses alleged to have been committed have already prescribed since the preparation and submission of false
affidavits in support of a petition or claim respecting lands of the public domain is also punishable as perjury under Sec. 129 of
Commonwealth Act No. 141, as amended, which reads, as follows: têñ.£îhqwâ£

Sec. 129. Any person who present or causes to be presented, or cooperates in the presentation of, any false
application, declaration, or evidence, or makes or causes to be made or cooperates in the making of a false
affidavit in support of any petition, claim, or objection respecting lands of the public domain, shall be deemed
guilty of perjury and punished as such.

Falsification of public documents is punishable by prision mayor and a fine not to exceed P 5,000.00. Prison mayor is an afflictive
1

penalty, and hence, prescribes in 15 years. Perjury, upon the other hand, is punishable by arresto mayor in its maximum period
2 3

to prision correccional in its minimum period, or from four (4) months and one (1) day to two (2) years and four (4) months, which
4

is correctional in nature, and prescribes in ten (10) years. However, Public Act No. 3326, as amended by Act 3585 and Act
5 6

3763, provides that "violations penalized by special laws shall, unless otherwise provided in such acts, prescribe in accordance
with the following rules: (a) after a year for offenses punished only by a fine or by imprisonment for not more than one month, or
both; (b) after four years for those punished by imprisonment for more than one month, but less than two years; (c) after eight
years for those punished by imprisonment for two years or more, but less than six years; and (d) after twelve years for any other
offense punished by imprisonment for six years or more, except the crime of treason, which shall prescribe after twenty years",
so that perjury which is punishable by imprisonment of from four (4) months and one (1) day to two (2) years and four (4) months
prescribes after eight years.

Penal statutes, substantive and remedial or procedural are, by consecrated rule, to be strictly applied against the government
and liberally in favor of the accused. As it would be more favorable to the herein accused to apply Section 129 of Commonwealth
7

Act 141 and Act 3326, as amended, in connection with the prescriptive period of the offenses charged, the same should be
applied. Considering, therefore, that the offenses were alleged to have been committed during the period from May 15, 1952 to
February 2, 1953, with respect to Criminal Case No. 7613; from May 28, 1952 to August 18, 1952, with respect to Criminal Case
No. 7614; and from November 16, 1951 to February 21, 1952, with respect to

Criminal Case No. 7615, and the informations were filed only on March 13, 1962, or more than eight (8) years after the said
offenses were allegedly committed, the lower court correctly ruled that the crimes in question had already prescribed.

WHEREFORE, the judgment appealed from should be, as it is hereby, AFFIRMED. Without costs.

SO ORDERED. 1äwphï1.ñët

Makasiar (Chairman), Guerrero, Abad Santos, De Castro and Escolin JJ., concur.

Separate Opinions

AQUINO, J., dissenting:

I dissent with all due deference to Mr. Justice Concepcion's opinion.

The crime is perjury under article 183 of the Revised Penal Code punished by arresto mayor maximum to prision
correccional minimum, a correccional penalty. The crime prescribes in ten years under article 90 of the Revised Penal Code.
Therefore, the ten-year prescriptive period under article 90 should be applied, not the eight-year period prescribed in Act No.
3326 as amended by Acts Nos. 3585 and 3763.

The crimes alleged in Criminal Cases Nos. 7613 and 7614 were committed from May 15, 1952 to February 2, 1983 and from
May 28 to August 18, 1952, respectively, As the informations in those two cases were filed on March 13, 1962, the ten-year
period had not yet elapsed.

Said ten-year period had elapsed with respect to the crime alleged in Criminal Case No. 7615. Only that crime had prescribed.
 G.R. No. 144664 March 15, 2004

ASIAN TRANSMISSION CORPORATION, petitioner,

vs.
The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN M. BACUNGAN as Voluntary Arbitrator, KISHIN A.
LALWANI, Union, Union representative to the Panel Arbitrators; BISIG NG ASIAN TRANSMISSION LABOR UNION
(BATLU); HON. BIENVENIDO T. LAGUESMA in his capacity as Secretary of Labor and Employment; and DIRECTOR
CHITA G. CILINDRO in her capacity as Director of Bureau of Working Conditions, respondents.

DECISION

CARPIO-MORALES, J.:

Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 Rules of Civil Procedure
the nullification of the March 28, 2000 Decision1 of the Court of Appeals denying its petition to annul 1) the March 11, 1993
"Explanatory Bulletin"2 of the Department of Labor and Employment (DOLE) entitled "Workers’ Entitlement to Holiday Pay on
April 9, 1993, Araw ng Kagitingan and Good Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31,
1998 Decision3 of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to April 9, 1998, and
3) the September 18, 19984 Resolution of the Panel of Voluntary Arbitration denying its Motion for Reconsideration.

The following facts, as found by the Court of Appeals, are undisputed:

The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory
Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9,
1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng
Kagitingan [which is also a legal holiday]. The bulletin reads:

"On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is also Araw ng Kagitingan,
i.e., two regular holidays falling on the same day, this Department is of the view that the covered employees are entitled to at
least two hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100% represents the payment
of holiday pay on April 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw
ng Kagitingan.

Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan x x
xx

Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only 100% of
their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.

In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner
and BATLU, the controversy was submitted for voluntary arbitration. x x x x On July 31, 1998, the Office of the Voluntary Arbitrator
rendered a decision directing petitioner to pay its covered employees "200% and not just 100% of their regular daily wages for
the unworked April 9, 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday." (Emphasis
and underscoring supplied)

Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:

ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail
and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation
equivalent to twice his regular rate; and

(c) As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the
first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December
and the day designated by law for holding a general election,

which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are now:

1. New Year’s Day January 1

2. Maundy Thursday Movable Date

3. Good Friday Movable Date

 4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)

5. Labor Day May 1

6. Independence Day June 12

7. National Heroes Day Last Sunday of August

8. Bonifacio Day November 30

9. Christmas Day December 25

10. Rizal Day December 30

In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of the
Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula which
is not changed by the fact that there are two holidays falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and
at the same time was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for every year
should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just because April 9 (Araw ng
Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday."

In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining
Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent
to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays
during the effectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance from the clear intent
that all holidays shall be compensated."5

The Court of Appeals further held that "in the absence of an explicit provision in law which provides for [a] reduction of holiday
pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code
provisions on holiday pay must be resolved in favor of labor."

By the present petition, petitioners raise the following issues:

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE PARTIES
AND SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES THEMSELVES

II

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING
THAT ANY DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATED IN THE EXPLANATORY BULLETIN WAS LAID
TO REST BY THE REISSUANCE OF THE SAID EXPLANATORY BULLETIN

III

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTING THAT THE SAID BULLEITN WAS
NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT [Department of
Labor and Employment] DOLE MAY PROMULGATE

IV

WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BY ISSUING
EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE
LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL
PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITS EXPLANATORY BULLETIN
DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998 DESPITE THE
RULINGS OF THE SUPREME COURT TO THE CONTRARY
VI

WHETHER OR NOT RESPONDENTS’ ACTS WILL DEPRIVE PETITIONER OF PROPERTY WITHOUT DUE PROCESS BY
THE "EXPLANATORY BULLETIN" AS WELL AS EQUAL PROTECTION OF LAWS

The petition is devoid of merit.

At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition for review on certiorari under Rule
45 of the 1997 Rules of Civil Procedure, petitioner lodged the present petition for certiorari under Rule 65.

[S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of
its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If
the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he
cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction.

The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action
under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is
clear that the decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action
or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the
appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of
judgment or denial of motion for reconsideration.

xxx

For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and
adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and
adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or
agency. In this case, appeal was not only available but also a speedy and adequate remedy.6

The records of the case show that following petitioner’s receipt on August 18, 2000 of a copy of the August 10, 2000 Resolution
of the Court of Appeals denying its Motion for Reconsideration, it filed the present petition for certiorari on September 15, 2000,
at which time the Court of Appeals decision had become final and executory, the 15-day period to appeal it under Rule 45 having
expired.

Technicality aside, this Court finds no ground to disturb the assailed decision.

Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor.7 Its
purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other
words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay."8 It is also intended to
enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural
significance.

Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day
(November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to
commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May
1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the
religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.

As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays.9 The
provision is mandatory,10 regardless of whether an employee is paid on a monthly or daily basis.11 Unlike a bonus, which is a
management prerogative,12 holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the
enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the
ten holiday pay benefits a worker is entitled to receive.

It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law
must be taken to mean exactly what it says.13 In the case at bar, there is nothing in the law which provides or indicates that the
entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.

Petitioner’s assertion that Wellington v. Trajano14 has "overruled" the DOLE March 11, 1993 Explanatory Bulletin does not lie.
In Wellington, the issue was whether monthly-paid employees are entitled to an additional day’s pay if a holiday falls on a
Sunday. This Court, in answering the issue in the negative, observed that in fixing the monthly salary of its
employees, Wellington took into account "every working day of the year including the holidays specified by law and excluding
only Sunday." In the instant case, the issue is whether daily-paid employees are entitled to be paid for two regular holidays which
fall on the same day.15

In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including
its implementing rules and regulations, shall be resolved in favor of labor. For the working man’s welfare should be the primordial
and paramount consideration.16
Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that "Nothing in the law or the
rules shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked regular holidays
as provided in existing individual or collective agreement or employer practice or policy."17

From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to pay for the legal holidays
as required by law. Thus, the 1997-1998 CBA incorporates the following provision:

ARTICLE XIV
PAID LEGAL HOLIDAYS

The following legal holidays shall be paid by the COMPANY as required by law:

1. New Year’s Day (January 1st)

2. Holy Thursday (moveable)

3. Good Friday (moveable)

4. Araw ng Kagitingan (April 9th)

5. Labor Day (May 1st)

6. Independence Day (June 12th)

7. Bonifacio Day [November 30]

8. Christmas Day (December 25th)

9. Rizal Day (December 30th)

10. General Election designated by law, if declared public non-working holiday

11. National Heroes Day (Last Sunday of August)

Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the holiday pay.

A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation
pay but will not entitle the employee to another vacation leave.

Under similar circumstances, the COMPANY will give a day’s wage for November 1st and December 31st whenever declared a
holiday. When required to work on said days, the employee will be paid according to Art. VI, Sec. 3B hereof.18

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

Vitug, (Chairman), Sandoval-Gutierrez, and Corona, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 92284 July 12, 1991

TEODORO J. SANTIAGO, petitioner,

vs.
THE COMMISSION ON AUDIT, and the GOVERNMENT SERVICE INSURANCE SYSTEM, respondents.

Leven S. Puno for petitioner.

Cesar R. Vidal for respondent GSIS.

CRUZ, J.:

The basic issue presented in this case is the correct interpretation of Executive Order No. 966, Section 9, providing as follows:

Sec. 9. Highest Basic Salary Rate. — The compensation of salary or pay which may be used in computing the
retirement benefits shall be limited to the highest salary rate actually received by an official/employee as fixed by law
and/or indicated in his duly approved appointment. This shall include salary adjustments duly authorized and
implemented by the presidential issuance(s) and budget circular(s), additional basic compensation or salary indicated
in an appointment duly approved as an exception to the prohibition on additional or double compensation, merit
increases, and compensation for substitutionary services or in an acting capacity. For this purpose, all other
compensation and/or fringe benefits such as per diems, allowances, bonuses, overtime pay, honoraria hazard pay,
flying time fees, consultancy or contractual fees, or fees in correcting and/or releasing examination papers shall not be
considered in the computation of the retirement benefits of an official/employee.

The question was raised by the petitioner in connection with the computation of his retirement benefits which he claims was not
made in conformity to the above-quoted requirement.

The petitioner was employed in the Commission on Audit as State Auditor IV with a monthly salary of P7,219.00. In 1988, he was
assigned to the COA Auditing Unit at the Department of Transportation and Communications and detailed to the Manila
International Airport Authority. On July 1, 1988, the board of directors of the MIAA passed the following resolution: 1

RESOLUTION NO. 88-70

RESOLVED, that, as recommended by Management, the designation of Mr. Teodoro J. Santiago, Jr., as Assistant
General Manager for Finance and Administration, effective 15 August 1988, be approved, as it is hereby approved,
subject to the following conditions:

1. He will retain his plantilla position in COA;

2. His compensation from MIAA, shall be the difference between the salary of AGM for Finance and Administration
(MIAA) and that of State Auditor IV (COA); and

3. His retirement benefits shall be chargeable against COA.

This resolution was duly communicated to the COA on July 11, 1988, with a request for the petitioner's indefinite detail to the
MIAA. In reply, Chairman Eufemio C. Domingo wrote MIAA on July 14, 1988, as follows: 2

. . . please be informed that we are authorizing such detail through appropriate office order up to February 15, 1989.
The order includes authority to collect representation and transportation allowances (RATA) of P1,200.00 each month
and other allowances attendant to the position chargeable against the funds of the NAIAA.

As regards your proposal that Mr. Santiago be allowed to collect the difference in salary of his position in the COA as
State Auditor IV and his designated position as Assistant General Manager thereat, likewise chargeable against the
funds of that office, this Commission interposes no objection to the proposal to pay him the difference between his
 present monthly salary of P7,219.00 and that of Assistant General Manager which reportedly amounts to P13,068.00
a month or a monthly difference of P5,849.00, provided that he is formally designated (not appointed) Assistant General
Manager by the Board of Directors, NAIAA, and that payment of his salary differential is approved by the same office.

xxx xxx xxx

On August 10, 1988, Secretary Reinerio O. Reyes, concurrently chairman of the MIAA board of directors, issued an office order
formally designating the petitioner as Acting Assistant General Manager for Finance and Administration, effective August 16,
1988.3

The petitioner served in this capacity and collected the differential salary of P5,849.00 plus his salary of P7,219.00 for a total
compensation of P13,068.00. He received this compensation until December 5, 1988, when he was transferred to the Presidential
Management Staff under COA Office Order No. 8811448 dated December 6, 1988.

On March 1, 1989, the petitioner retired after working in the government for 44 years.

In computing his retirement benefits, the Government Service Insurance System used as basis the amount of P13,068.00,
considering this the highest basic salary rate received by the petitioner in the course of his employment. The COA disagreed,
4

however, and paid his retirement benefits on the basis of only his monthly salary of P7,219.00 as State Auditor IV. 5

The petitioner requested recomputation based on what he claimed as his highest basic salary rate of P13,068.00. This was
denied on December 8, 1989, and he was so notified on February 5, 1990. On March 7, 1990, he came to this Court to seek
reversal of the decision of the COA on the ground of grave abuse of discretion.

We note at the outset that there is no dispute regarding the legality of the petitioner's occupying the second position in the MIAA
and receiving additional compensation for his services therein. As the Solicitor General observed. "What the petitioner was
receiving from the MIAA was the additional compensation allowed under Section 17 of Act No. 4187 which, in turn, is allowed
under Section 8, Paragraph B, Article IX of the Constitution."6

In Quimzon v. Ozaeta, this Court held that double appointments are not prohibited as long as the positions involved are not
7

incompatible, except that the officer or employee appointed cannot receive additional or double compensation unless specifically
authorized by law. The additional compensation received by the petitioner is not an issue in the case at bar because of its express
approval by the COA and the admission of the Solicitor General that it is allowed under the cited provision.

More specifically, Section 17 of Act No. 4187 provides:

Any existing act, rule or order to the contrary notwithstanding, no full time officer or employee of the government shall
hereafter receive directly or indirectly any kind of additional or extra compensation or salary including per diems and
bonuses from any fund of the government, its dependencies, and semi-government entities or boards created by
law except:

(1) Officers serving as chairman or members of entities and enterprise organized, operated, owned or
controlled by the government, who may be paid per them for each meeting actually attended or when an
official travel;

(2) Auditors and accountants;

(3) Provincial and municipal treasurers and their employees;

(4) Employees serving as observers of the Weather Bureau; and

(5) Those authorized to receive extra or additional compensation by virtue of the provision of this Act.
(Emphasis supplied)

The Solicitor General argues, albeit not too strongly, that the additional compensation received by the petitioner was merely an
honorarium and not a salary. As a mere honorarium, it would not fall under the provision of Section 9 and so should not be added
to his salary in computing his retirement benefits.

We cannot accept this contention. An honorarium is defined as something given not as a matter of obligation but in appreciation
for services rendered, a voluntary donation in consideration of services which admit of no compensation in money. The additional
8

compensation given to the petitioner was in the nature of a salary because it was receive by him as a matter of right in recompense
for services rendered by him as Acting Assistant General Manager for Finance and Administration. In fact, even Chairman
Domingo referred to it in his letter dated July 14, 1988, as the petitioner's "salary differential."

The Solicitor General's main argument is that the petitioner cannot invoke Section 9 because he was not appointed to the second
position in the MIAA but only designated thereto. It is stressed that under the said provision, "the compensation of salary or pay
which may be used in computing the retirement benefits shall be received by an official employee as fixed by law and/or indicated
in his duly approved appointment." The petitioner's additional salary was fixed not in a duly approved appointment but only in a
designation.

Belittling this argument, the petitioner maintains that there is no substantial distinction between appointment and designation. He
cites Mechem, who defines appointment as "the act of designation by the executive officer, board or body, to whom that power
has been delegated, of the individual, who is to exercise the functions of a given office." He also invokes Borromeo v.
9

Mariano, where this Court said that "the term "appoint," whether regarded in its legal or in its ordinary acceptation, is applied to
10

the nomination or designation of an individual."

Strictly speaking, there is an accepted legal distinction between appointment and designation. While appointment is the selection
by the proper authority of an individual who is to exercise the functions of a given office, designation, on the other hand, connotes
merely the imposition of additional duties, usually by law, upon a person already in the public service by virtue of an earlier
appointment (or election). Thus, the appointed Secretary of Trade and Industry is, by statutory designation, a member of the
11

National Economic and Development Authority. A person may also be designated in an acting capacity, as when he is called
12

upon to fill a vacancy pending the selection of a permanent appointee thereto or, more usually, the return of the regular incumbent.
In the absence of the permanent Secretary for example, an undersecretary is designated acting head of the department. 13

As the Court said in Binamira v. Garrucho: 14

Appointment may be defined as the selection, by the authority vested with the power, of an individual who is to exercise
the functions of a given office. When completed, usually with its confirmation, the appointment results in security of
tenure for the person chosen unless he is replaceable at pleasure because of the nature of his office. Designation, on
the other hand, connotes merely the imposition by law of additional duties on an incumbent official, as where, in the
case before us, the Secretary of Tourism is designated Chairman of the Board of Directors of the Philippine Tourism
Authority, or where, under the Constitution, three Justices of the Supreme Court are designated by the Chief Justice
to sit in the Electoral Tribunal of the Senate or the House of Representatives. It is said that appointment is essentially
executive while designation is legislative in nature.

Nevertheless, we agree with the petitioner that in the law in question, the term "appointment" was used in a general sense to
include the term "designation." In other words, no distinction was intended between the two terms in Section 9 of Executive Order
No. 966. We think this to be the more reasonable interpretation, especially considering that the provision includes in the highest
salary rate "compensation for substitutionary services or in an acting capacity." This need not always be conferred by a permanent
appointment. A contrary reading would, in our view, militate against the letter of the law, not to mention its spirit as we perceive
it. That spirit seeks to extend the maximum benefits to the retiree as an additional if belated recognition of his many years of loyal
and efficient service in the government.

As thus interpreted, Section 9 clearly covers the petitioner, who was designated Acting Assistant General Manager for Finance
and Administration in the office order issued by Secretary Reyes on August 10, 1988. The position was then vacant and could
be filled either by permanent appointment or by temporary designation. It cannot be said that the second position was only an
extension of the petitioner's office as State Auditor IV in the Commission on Audit as otherwise there would have been no need
for his designation thereto. The second office was distinct and separate from his position in the Commission on Audit. For the
additional services he rendered for the MIAA, he was entitled to additional compensation which, following the letter and spirit of
Section 9, should be included in his highest basic salary rate.

It is noteworthy that the petitioner occupied the second office not only for a few days or weeks but for more than three months. His 1âwphi1

designation as Acting Assistant General Manager for Finance and Administration was not a mere accommodation by the MIAA.
On the contrary, in his letter to Chairman Domingo requesting the petitioner's services. MIAA General Manager Evergisto C.
Macatulad said, "Considering his qualifications and work experience, we believe that a finance man of his stature and caliber can
be of great help in the efficient and effective performance of the Airport's functions."

Retirement laws should be interpreted liberally in favor of the retiree because their intention is to provide for his sustenance, and
hopefully even comfort, when he no longer has the stamina to continue earning his livelihood. After devoting the best years of
his life to the public service, he deserves the appreciation of a grateful government as best concretely expressed in a generous
retirement gratuity commensurate with the value and length of his services. That generosity is the least he should expect now
that his work is done and his youth is gone. Even as he feels the weariness in his bones and glimpses the approach of the
lengthening shadows, he should be able to luxuriate in the thought that he did his task well, and was rewarded for it.

WHEREFORE, the petition is GRANTED. The challenged resolution is SET ASIDE and judgment is hereby rendered DIRECTING
the computation of the petitioner's retirement benefits on the basis of his Highest Basic Salary Rate of P13,068.00, It is so ordered.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea,
Regalado and Davide, Jr., JJ., concur.