2021 UST Pre Week The Law Pertaining To The State and Its Relationship

University
of Santo Tomas
Faculty of Civil Law

The Law Pertaining

to the State and Its
Relationship with
Its Citizens
PRE-WEEK NOTES 2020/21 BAR EXAMINATIONS

PART I: POLITICAL LAW

ACADEMICS COMMITTEE

SECRETARY GENERAL: Maria Frances Faye R. Gutierrez
EXECUTIVE COMMITTEE: John Edward F. Fronda, Angel Isah M.
Romero, Kirby Anne C. Renia, Karen Abbie C. Aspiras, Jose Christian
Anthony I. Pinzon

University of Santo Tomas

POLITICAL LAW
PRE-WEEK NOTES

POLITICAL LAW COMMITTEE

COMMITTEE HEAD: Maria Crisanta M. Paloma

SUBJECT HEADS: Michael Gino D. Azurin and Francine Blaise M. Loja

MEMBERS: Mary Angelica B. Bassig, Danie Lois B. Bautista, Exequiel
S. Bellosillo, Julius Ernhest P. Berame, Lyn Jeen I. Binua, Patricia Mae
H. Cabaña, Joahnna Paula P. Corpuz, Jhayrone A. De Roxas, Jerchiel
Wilfred M. Delgado, Irish Kate B. Maramag, Pia Aila D. Martinez, Sarah
May D. Medalle, Joanna Nicole A. Paz, Katherine S. Policarpio, Bryan
Jay L. Santos, Patricia Ingrid M. See, and Astrid A. Solis

Atty. Al Conrad B. Espaldon
ADVISER
Political Law
BASIC PRINCIPLES OF POLITICAL LAW controversies to the Judiciary. Each is prevented from
invading the domain of the others. (Senate Blue Ribbon
Doctrine of Constitutional Supremacy Committee v. Majaducon, G.R. No. 136760, July 29, 2003)

Under this doctrine, if a law or contract violates any norm Q: May respondents DOJ Sec. De Lima and Asst. Chief
of the Constitution, that law or contract, whether State Prosecutor Fadullon be compelled by the writ of
promulgated by the legislative or by the executive branch mandamus to charge Dalandag as an accused for
or entered into by private persons for private purposes, is multiple murder in relation to the Maguindanao
null and void and without any force and effect. Since the massacre even if he is under the Witness Protection
Constitution is the fundamental, paramount, and supreme Program?
law of the nation, it is deemed written in every statute and
contract. (Manila Prince Hotel v. GSIS, G.R. No. A: NO. Consistent with the principle of separation of powers
122156, February 3, 1997) enshrined in the Constitution, the Court deems it a sound
judicial policy not to interfere in the conduct of preliminary
DOCTRINE OF SEPARATION OF POWERS investigations, and to allow the Executive Department,
through the Department of Justice, exclusively to determine
Legislation belongs to the Congress, implementation to the what constitutes sufficient evidence to establish probable
executive, and settlement of legal controversies and cause for the prosecution of supposed offenders. By way of
adjudication of rights to the judiciary. Each department has exception, however, judicial review may be allowed where
exclusive cognizance of and is supreme in matters falling it is clearly established that the public prosecutor
within its own constitutionally allocated sphere. Each is committed grave abuse of discretion, that is, when he has
therefore prevented from invading the domain of the exercised his discretion “in an arbitrary, capricious,
others. whimsical or despotic manner by reason of passion or
personal hostility, patent and gross enough as to amount to
Plea bargaining in drug cases an evasion of a positive duty or virtual refusal to perform a
duty enjoined by law.”
Plea bargaining operates as a means to implement an
existing right by regulating the judicial process for Dalandag who admitted his participation in the commission
enforcing rights and duties recognized by substantive law of the Maguindanao massacre was no hindrance to his
and for justly administering remedy and redress for a admission into the Witness Protection Program as a state
disregard or infraction of them. (Estipona v. Lobrigo, G.R. No. witness, for all that was necessary was for him to appear not
226679, August 15, 2017) the most guilty. Accordingly, he could not anymore be
charged for his participation in the Maguindanao massacre,
The power to promulgate rules of pleading, practice, and as to which his admission operated as an acquittal, unless
procedure is the exclusive domain of the Judicial he later on refuses or fails to testify in accordance with the
department and no longer shared with the Executive and sworn statement that became the basis for his discharge
Legislative departments. The adoption of the plea against those now charged for the crimes. (Ampatuan, Jr., v.
bargaining framework in Drug Cases under Section 23 of De Lima, G.R. No. 197291, April 3, 2013)
Republic Act No. 9165, or the Comprehensive Dangerous
Drugs Act of 2002 is unconstitutional for the inclusion of the Q: Pres. Aquino III signed E.O. No. 1 establishing the
provision in the law encroaches on the exclusive Philippine Truth Commission, a special body to
constitutional power of the Supreme Court. (Estipona v. investigate reported cases of graft and corruption
Lobrigo, G.R. No. 226679, August 15, 2017) allegedly committed during the Arroyo administration.
Is E.O. No. 1 constitutional?
Exceptions of plea bargaining in drug cases
A: NO. The President has no power to create a public office.
1. Imposable penalty is life imprisonment or life It is not shared by Congress with the President, until and
imprisonment to death. unless Congress enacts legislation that delegates a part of
2. Sale, trading, etc. of dangerous drugs involving other the power to the President, or any other officer or agency. It
kinds of dangerous drugs, except shabu and marijuana. is already settled that the President’s power of control can
(Section 5 of Republic Act No. 9165, or the only mean the power of an officer to alter, modify, or set
Comprehensive Dangerous Drugs Act of 2002) aside what a subordinate officer had done in the
performance of his duties, and to substitute the judgment of
SC as final arbiter the former for that of the latter. As such, the creation by the
President of a public office like the Truth Commission,
Pursuant to the principle of separation of powers, the without either a provision of the Constitution or a proper
correctness of the decisions of the SC as final arbiter of all law enacted by Congress authorizing such creation, is not
justifiable disputes is conclusive upon all other an act that the power of control includes. (Biraogo v. The
departments of the government; the Ombudsman has no Philippine Truth Commission, G.R. No. 192935, 7 December
power to review the decisions of the SC by entertaining a 2010, Bersamin, J. separate opinion)
complaint against the Justices of the SC for knowingly
rendering an unjust decision. (In re: Laureta, G.R. No. L- Q: Amog was elected Congressman. Before the end of
68635, May 14, 1987) her first year in office, she inflicted physical injuries on
a colleague. Charges were filed in court against her as
Q: May the RTC or any court prohibit a committee of the well as in the House Ethics Committee. Later, the HoR,
Senate like the Blue Ribbon Committee from requiring dividing along party lines, voted to expel her. Claiming
a person to appear before it when it is conducting that her expulsion was railroaded and tainted by
investigation in aid of legislation? bribery, she filed a petition seeking a declaration by the
SC that the House gravely abused its discretion and
A: NO. The RTC or any court may not do so because that violated the Constitution. She prayed that her expulsion
would be violative of the principle of separation of powers. be annulled and that she should be restored by the
The principle essentially means that legislation belongs to Speaker to her position as Congressman. Is Amog’s
Congress, execution to the Executive and settlement of legal petition before the Supreme Court justiciable?
UNIVERSITY OF SANTO TOMAS 1 PRE–WEEK NOTES

2021 GOLDEN NOTES 2021 & 2022
Political Law
A: NO. As stated in Alejandrino v. Quezon, et al. (46 Phil. 83), branch courtesy is but a consequence of the doctrine of
the Supreme Court held that it could not compel the Senate separation of powers.
to reinstate a Senator who assaulted another Senator and
was suspended for disorderly behavior. It could not compel 2. Petitioners are putting in issue not only the validity of
a separate and co-equal department to take any particular the exercise of the delegated power, but also the
action. In Osmeña v. Pendatun (109 Phil. 863), it was held validity of the delegation itself. They are thus,
that the Supreme Court could not interfere with the collaterally attacking the validity of the Social Security
suspension of a Congressman for disorderly behavior, Act's provisions. Collateral attacks on a presumably
because the House of Representatives is the judge of what valid law are not allowed. Unless a law, rule, or act is
constitutes disorderly behavior. The assault of a fellow annulled in a direct proceeding, it is presumed valid.
Senator constitutes disorderly behavior. However, under Simply put, what are needed for a valid delegation are:
Sec. 1, Art. VIII of the 1987 Constitution, the Supreme Court a. the completeness of the statute making the
may inquire whether or not the decision to expel Amog is delegation; and
tainted with grave abuse of discretion amounting to lack or b. the presence of a sufficient standard.
excess of jurisdiction.
The Social Security Act is complete in its terms; it also
Q: Joey Tribbiani was convicted of estafa. When his case contains a sufficient standard for the Social Security
reached the SC, some Justices proposed to alter the Commission to fix the monthly contribution rate and
penalties provided for under RPC on the basis of the the minimum and maximum monthly salary credits.
ratio of P1.00 to P100.00, believing that it is not fair to
apply the range of penalties, which was based on the 3. A case is ripe for adjudication when the challenged
value of money in 1932, to crimes committed at governmental act is a completed action such that there
present. However, other justices opposed the said is a direct, concrete, and adverse effect on the
proposal for it amounts to judicial legislation. Is the petitioner. Courts may only take cognizance of a case or
opposition correct? controversy if the petitioner has exhausted all remedies
available to it under the law. The doctrine ensures that
A: YES. The opposition is correct because the Court cannot the administrative agency exercised its power to its full
modify the said range of penalties because that would extent, including its authority to correct or reconsider
constitute judicial legislation. What the legislature's its actions. It would, thus, be premature for courts to
perceived failure in amending the penalties provided for in take cognizance of the case prior to the exhaustion of
the said crimes cannot be remedied through this Court's remedies, not to mention it would violate the principle
decisions, as that would be encroaching upon the power of of separation of powers. (KMU v. President Aquino, G.R.
another branch of the government. No. 210500, April 02, 2019, J. Leonen)

Verily, the primordial duty of the Court is merely to apply PRINCIPLE OF CHECKS AND BALANCES
the law in such a way that it shall not usurp legislative
powers by judicial legislation and that in the course of such It allows one department to resist encroachments upon its
application or construction, it should not make or supervise prerogatives or to rectify mistakes or excesses committed
legislation, or under the guise of interpretation, modify, by the other departments.
revise, amend, distort, remodel, or rewrite the law, or give
the law a construction which is repugnant to its terms. Executive check on the other two branches
Succinctly put, the Court should shy away from encroaching
upon the primary function of a co-equal branch of the
government; otherwise, this would lead to an inexcusable EXECUTIVE CHECK
breach of the doctrine of separation of powers by means of Legislative Judiciary
judicial legislation. (Corpuz v. People, G.R. No. 180016, April - Through its power of pardon, it
29, 2014) may set aside the judgment of
Through its
the judiciary.
Q: KMU instituted an action which called upon the Court veto power
to determine the validity of the Social Security System - Also by power of appointment –

(SSS) premium hike. Upon recommendation of the power to appoint members of
Social Service Commission (SSC), the President the Judiciary.
approved (a) the SSS members' contribution rate from
10.4% to 11% and (b) the maximum monthly salary Legislative check on the other two branches
credit from ₱15,000.00 to ₱16,000.00. The employer
would pay a contribution rate of 7.37% (from 7.07%);
LEGISLATIVE CHECK
the employee, 3.63% (from 3.33%). They assailed the
actions of the President, the SSS and SSC. The Executive Judiciary
government moved to dismiss on the following
grounds: (1) the President is immune from suit; (2) Override the veto of Revoke or amend the
there was valid delegation of power to SSC and SSS; and the President decisions by either:
(3) petitioner did not exhaust administrative remedies. - Enacting a new law
Rule on the objections of the government. - Amending the old law,
giving it certain definition
A: The objections must be sustained. and interpretation different

from the old.
1. The president cannot be charged with any suit, civil or
criminal in nature, during his or her incumbency in Reject certain Impeachment of SC members
office. This is in line with the doctrine of the president's appointments made
immunity from suit. The president is the head of the by the president
executive branch, a co-equal of the judiciary under the
Constitution. His or her prerogative is entitled to
respect from other branches of government. Inter-

2021 GOLDEN NOTES 2021 & 2022
Political Law
Revoke the It is the supreme and uncontrollable power inherent in a

proclamation of Define, prescribe, apportion State by which the State is governed. The following are the
martial law or jurisdiction of lower courts: characteristics of sovereignty:
suspension of the - Prescribe the qualifications
privilege of the writ of lower court judges 1. Permanent;
of habeas corpus - Impeachment 2. Exclusive;
- Determination of 3. Comprehensive;
salaries of judges. 4. Absolute;
Impeachment 5. Indivisible;
Determine the 6. Inalienable; and
salaries of the 7. Imprescriptible. (Laurel v. Misa, G.R. No. L-409, Jan. 30,
president or vice 1947)
president
Imperium vs. Dominium
Concur to or reject

treaties the president
BASIS IMPERIUM DOMINIUM
may enter into
The State’s authority to Capacity of the

govern as embraced in state to own or
Judicial check on the other two branches
the concept of acquire

sovereignty; includes property. (Lee
It may declare (through the SC as the final arbiter) the acts
passing laws governing Hong Hok v.
of both the legislature and executive as unconstitutional or Definition
a territory, maintaining David, G.R. No. L-
invalid so long as there is grave abuse of discretion and
peace and order over it, 30389, Dec. 27,
amounting to lack or excess of jurisdiction. Extent
and defeating it against 1972)
Q: An appropriations law granting the legislators lump- foreign invasion. (Lee
sum funds in which they have full discretion on what Hong Hok v. David, G.R.
project it would fund and how much the project would No. L-30389, Dec. 27,
cost, was passed. Is such law unconstitutional? 1972)

A: YES. NOTE: Sovereignty is deemed absolute, subject to
restrictions and limitations.
1. It violated the principle of separation of powers -

Insofar as it has allowed legislators to wield, in varying
gradations, non-oversight, post-enactment authority Principle of Auto-Limitation (2006 BAR)
in vital areas of budget execution.
It is the doctrine where a state adheres to principles of
2. It violated the principle of non-delegability of international law as a limitation/restriction to the exercise
legislative power - insofar as it has conferred unto of its sovereignty.
legislators the power of appropriation by giving them
personal, discretionary funds from which they are able NOTE: While sovereignty has traditionally been deemed
to fund specific projects which they themselves absolute and all-encompassing on the domestic level, it is
determine.
however subject to restrictions and limitations voluntarily

agreed to by the Philippines, expressly or impliedly, as a
3. Denied the President’s power to veto items - insofar
as it has created a system of budgeting wherein items member of the family of nations. By the doctrine of
are not textualized into the appropriations bill, it has incorporation, the country is bound by generally accepted
flouted the prescribed procedure of presentment. principles of international law, which are considered to be
4. Impaired public accountability - insofar as it has automatically part of our own laws. Thus, sovereignty of a
diluted the effectiveness of congressional oversight by state is not absolute on an international level.
giving legislators a stake in the affairs of budget
execution, an aspect of governance which they may be Corollary, a state has agreed to surrender some of its
called to monitor and scrutinize. sovereign rights in exchange for greater benefits that it may
derive by being a member of the family of nations or by
5. Subverted genuine local autonomy - insofar as it has
virtue of treaty stipulations.
authorized legislators, who are national officers, to

intervene in affairs of purely local nature, despite the
FUNDAMENTAL POWERS OF THE STATE
existence of capable local institutions.

The following are the fundamental/inherent powers of the
6. Transgressed the principle of non-delegability - state:
insofar as it has conferred to the President the power
to appropriate funds intended by law for energy- 1. Police Power
related purposes only to other purposes he may deem 2. Power of Eminent Domain
fit as well as other public funds under the broad 3. Power of Taxation
classification of "priority infrastructure development
projects." (Belgica v. Ochoa, G.R. No. 208566, Nov. 19, 1. POLICE POWER
2013)
Police power is the power of the State to promote public
SOVEREIGNTY welfare by restraining and regulating the use of liberty and
property. It is the most pervasive, the least limitable, and

2021 GOLDEN NOTES 2021 & 2022
Political Law
the most demanding of the three fundamental powers of the lobby, open to public view and in the presence of the
State. owner, manager or duly authorized representative of
such hotel, motel or lodging house. The same law
The State, in order to promote general welfare, may provides that the premises and facilities of such hotels,
interfere with personal liberty, with property, and with motels and lodging houses would be open for
business and occupations. Persons may be subjected to all inspection either by the City Mayor, or the Chief of
kinds of restraint and burdens in order to secure the Police, or their duly authorized representatives. It
general comfort, health, and prosperity of the state and to increased their annual license fees as well. Is the
this fundamental aim of our Government, the rights of the ordinance constitutional?
individual are subordinated. (Ortigas and Co., Limited
Partnership v. Feati Bank and Trust Co, G.R. No. L-24670, A: YES. The mantle of protection associated with the due
December 14, 1979) process guaranty does not cover the hotel and motel
operators. This particular manifestation of a police power
Requisites for a valid exercise of police power measure being specifically aimed to safeguard public
morals is immune from such imputation of nullity resting
1. Lawful subject – The interests of the public generally, as purely on conjecture and unsupported by anything of
distinguished from those of a particular class, require substance. To hold otherwise would be to unduly restrict
the exercise of the police power; and and narrow the scope of police power which has been
properly characterized as the most essential, insistent and
2. Lawful means – The means employed are reasonably the least limitable of powers, extending as it does to all the
necessary for the accomplishment of the purpose and great public needs.
not unduly oppressive upon individuals. (National
Development Company and New Agrix, Inc. v. Philippine There is no question that the challenged ordinance was
Veterans Bank, 192 SCRA 257, December 10, 1990) precisely enacted to minimize certain practices hurtful to
public morals. The challenged ordinance then proposes to
Q: President Rodrigo Duterte issued Proclamation No. check the clandestine harboring of transients and guests of
475 formally declaring a state of calamity in Boracay these establishments by requiring these transients and
and ordering its closure for six (6) months. On account guests to fill up a registration form, prepared for the
of this, Boracay residents Zabal and Jacosalem filed a purpose, in a lobby open to public view at all times, and by
petition alleging that they would suffer grave and introducing several other amendatory provisions
irreparable damage as their livelihood depends on the calculated to shatter the privacy that characterizes the
tourist activities therein. They attacked the order on registration of transients and guests. Moreover, the
the ground that it is an invalid exercise of legislative increase in the license fees was intended to discourage
powers. Is the order invalid? "establishments of the kind from operating for purposes
other than legal" and at the same time, to increase "the
A: NO. The assailed governmental measure is within the income of the city government." (Ermita-Malate Hotel v. City
scope of police power. As defined, it consists of (1) Mayor of Manila, G.R. No. L-24693, July 31, 1967)
imposition or restraint upon liberty or property, (2) in
order to foster the common good. It is not capable of exact Q: The City of Manila enacted Ordinance No. 7774, the
definition but has been purposely veiled in general terms to purpose of which is to prohibit motel and inn operators
underscore its all-comprehensive embrace. from offering short-time admission, as well as pro-
rated or “wash-up” rates for abbreviated stays. Is the
The motivating factor in the issuance of Proclamation No. ordinance a valid exercise of police power?
475 is without a doubt the interest of the public in general.
Police power constitutes an implied limitation to the Bill of A: NO. A reasonable relation must exist between the
Rights, and that even liberty itself, the greatest of all rights, purposes of the measure and the means employed for its
is subject to the far more overriding demands and accomplishment, for even under the guise of protecting the
requirements of the greater number. The only question now public interest, personal rights and those pertaining to
is whether the temporary closure of Boracay as a tourist private property will not be permitted to be arbitrarily
destination for six months is reasonably necessary under invaded. It must also be evident that no other alternative for
the circumstances? The answer is in the affirmative. the accomplishment of the purpose less intrusive of private
rights can work. In the present case, there are less intrusive
Tourist arrivals in the island were clearly far more than measures which can be employed such as curbing out the
Boracay could handle. Certainly, the closure of Boracay, prostitution and drug use through active police force. The
albeit temporarily, gave the island its much needed ordinance has a lawful purpose but does not have the lawful
breather, and likewise afforded the government the means hence, unconstitutional. (White Light Corporation vs.
necessary leeway in its rehabilitation program. Note that City of Manila, G.R. No. 122846, January 20, 2009)
apart from review, evaluation and amendment of relevant
policies, the bulk of the rehabilitation activities involved 2. EMINENT DOMAIN
inspection, testing, demolition, relocation, and
construction. These works could not have easily been done Power of eminent domain
with tourists present. The rehabilitation works in the first
place were not simple, superficial or mere cosmetic but Eminent domain is the right or power of a sovereign State
rather quite complicated, major, and permanent in to appropriate private property to particular uses to
character as they were intended to serve as long-term promote public welfare. It is an indispensable attribute of
solutions to the problem. (Zabal v. Duterte, G.R. No. 238467, sovereignty; a power grounded in the primary duty of
February 12, 2019) government to serve the common need and advance the
general welfare. The power of eminent domain is
Q: Hotel and motel operators in Manila sought to inseparable in sovereignty being essential to the existence
declare Ordinance 4670 as unconstitutional for being of the State and inherent in government. (NTC vs. Oroville
unreasonable, thus violative of the due process clause. Dev’t Corp., G.R. No. 223366, August 1, 2017)
The Ordinance requires the clients of hotels, motels
and lodging house to fill out a prescribed form in a Requisites for a valid taking

2021 GOLDEN NOTES 2021 & 2022
Political Law
The Court has recognized the following requisites for the cases. In choosing to reduce their agreement into writing,
valid exercise of the power of eminent domain: they are deemed to have done so meticulously and carefully,
employing specific - frequently, even technical - language as
1. The property taken must be private property; are appropriate to their context.
2. There must be genuine necessity to take the private
property; It is undisputed that the Deed of Absolute Sale between
3. The taking must be for public use; petitioner and respondent does not contain any provision
4. There must be payment of just compensation; and regarding the payment of interest. Petitioner agreed to
5. The taking must comply with due process of law. convey its property upon full payment of the purchase price
(Manotok v. National Housing Authority, G.R. No. L- without reservation for any claim of interest. (Republic v.
55166-67, May 21, 1987, cited in Manapat v. Court of Jose Gamir-Consuelo Diaz Heirs, Association, Inc., G.R. No.
Appeals, G.R. No. 110478) 218732, November 12, 2018)

A party is entitled to just compensation despite the fact that 3. TAXATION
no apparent physical taking was done by the government.
Compensation cannot be just to the owner in case of It is the process by which the government, through its
property that is immediately taken unless there is prompt legislative branch, imposes and collects revenues to defray
payment, considering that the owner thereby immediately the necessary expenses of the government, and to be able to
suffers not only the loss of his property but also the loss of carry out, in particular, any and all projects that are
its fruits or income. Thus, in addition, the owner is entitled supposed to be for the common good. Simply put, taxation
to legal interest from the time of the taking of the property is the method by which these contributions are exacted.
until the actual payment in order to place the owner in a
position as good as, but not better than, the position he was Lifeblood Doctrine
in before the taking occurred. (National Power Corporation
v. Heirs of Macabangkit Sangkay, G.R. No. 165828, August 24, Taxes are the lifeblood of the government, for without taxes,
2011) the government can neither exist nor endure. A principal
NOTE: In view of the discontinuance of the proceedings and attribute of sovereignty, the exercise of taxing power
the eventual return of the property to the owners, there is derives its source from the very existence of the state whose
no need to pay “just compensation” to them because their social contract with its citizens obliges it to promote public
property would not be taken. However, instead of full interest and common good. The theory behind the exercise
market value of the property, the expropriator should of the power to tax emanates from necessity; without taxes,
compensate the owners for the disturbance of their property government cannot fulfill its mandate of promoting the
rights from the time of entry until the time of restoration of general welfare and well-being of the people. (National
the possession by paying to them actual or other Power Corporation v. City of Cabanatuan, G.R. No. 149110,
compensatory damages. April 9, 2003)
The expropriator who has taken possession of the property Uniformity and equality of taxation
subject of expropriation is obliged to pay reasonable
compensation to the landowner for the period of such GR: The power to tax operates with the same force and
possession although the proceedings had been effect in every place where the subject of it is found. This is
discontinued on the ground that the public purpose for the known as geographical uniformity.
expropriation had meanwhile ceased. (Republic v. Heirs of
Borbon, G.R. No. 165354, January 12, 2015) XPN: The rule on uniformity does not prohibit classification
for purposes of taxation, provided the requisites for valid
Q: In 2005, after a series of negotiations, Jose Gamir- classification are met. (Ormoc Sugar v. Treasurer of Ormoc,
Consuelo Diaz Heirs, Association, Inc. (JG-CD Heirs) and G.R. No. L-23794, February 17, 1968)
the Republic of the Philippines, through the DPWH,
executed a Deed of Absolute Sale where it was agreed Tax exemptions may either be
that JG-CD Heirs would sell its 1,836 sqm property to
Petitioner Republic. The property was eventually 1. Constitutional; or
registered in petitioner's name after respondent's
receipt of the full consideration. The said parcel of land NOTE: Requisites for Constitutional exemption:
forms part of Sta. Ana Avenue, a national road, in Davao
City. After the perfection of the transaction, JG-CD Heirs Actual, Direct and Exclusive Use by the following:
demanded payment of interest because the DPWH
occupied the property since 1957. DPWH refused to pay a. Educational;
the interest as demanded by JG-CD Heirs. Is JG-CD Heirs b. Charitable institutions; and
entitled to payment of interest from 1957 up to 2005? c. Religious organizations. [Sec. 28(3), Art. VI, 1987
Constitution]
A: JG-CD Heirs is not entitled to payment of interest. The
government did not exercise its power of eminent domain. 2. Statutory.
In order for the State to exercise its power of eminent
domain, the following requirements must be present: (a) NOTE: It has to be passed by majority of all the
that it is for a particular purpose; and (b) that just members of the Congress. [Sec. 28(4), Art. VI, 1987
compensation is paid to the property owner. Essentially, Constitution]
expropriation is an involuntary sale where the landowner
is practically an unwilling seller. Expropriation proceedings Revocability of tax exemptions
or court intervention would be unnecessary should a deed
of sale be executed where the parties come to an agreement 1. Exemption is granted gratuitously – revocable; and
as to the price of the property to be sold. 2. Exemption is granted for valuable consideration (non-
impairment of contracts) – irrevocable.
The parties are bound by their sale contract transferring the
property without the condition applicable in expropriation Tax vs. License fee

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Political Law
Ordinarily, license fees are in the nature of the exercise of with COA before a suit may be filed in court.
police power because they are in the form of regulation by The COA must act upon the claim within 60
the State and considered as a manner of paying off days. Rejection of the claim authorizes the
administration costs. However, if the license fee is higher claimant to elevate the matter to the Supreme
than the cost of regulating, then it becomes a form of Court on certiorari;
taxation. (Ermita-Malate Hotel v. City Mayor of Manila, G.R. ii. Art. 2180, NCC – Tort committed by special
No. L-24693, October 23, 1967) agent;
iii. Art. 2189, NCC – LGUs liable for injuries or
Q: The Quezon City government assessed real property death caused by defective condition of roads or
taxes on MWSS. The MWSS challenged the assessment public works under their control or
arguing that as a GOCC, it is exempt from payment of supervision (City of Manila v. Teotico, et al., G.R.
real property taxes. Is the legal argument of MWSS No. L-23052, January 29, 1968);
correct? iv. Sec. 22(a)(2), RA 7160, LGC of 1991 – LGUs have
power to sue and be sued; and
A: The legal argument of MWSS is subject to qualification. In v. Sec. 24 of LGC – LGUs and their officials are not
MWSS v. Quezon City, the Court held that a government exempt from liability for death or injury to
instrumentality exercising corporate powers is not liable persons or damage to property.
for the payment of real property taxes on its properties
unless it is alleged and proven that the beneficial use of its NOTE: The express consent of the State to be sued must be
properties have been extended to a taxable person. (G.R. No. embodied in a duly enacted statute and may not be given
194388, November 7. 2018, J. Leonen) by a mere counsel of the government. (Republic v. Purisima,
G.R. No. L-36084, Aug. 31, 1977)
Section 234 (a) of the LGC provides that any real property
owned by the Republic or its political subdivisions are NOTE: The actions of President Aquino cannot be deemed
exempt from the payment of real property tax "except when as a waiver of State immunity. Whatever acts or utterances
the beneficial use thereof has been granted, for that then President Aquino may have done or said, the same
consideration or otherwise, to a taxable person." Under the are not tantamount to the State having waived its immunity
beneficial use doctrine, it is the lessee of the government from suit. The President's act of joining the marchers, days
which has the burden of paying the real property taxes after the incident, does not mean that there was an
assessed by the local government on the subject property. admission by the State of any liability. Moreover,
(GSIS v. City Treasurer and City Assessor of the City of Manila, petitioners rely on President Aquino's speech promising
G.R. No. 186242, December 23, 2009) that the government would address the grievances of the
rallyists. By this alone, it cannot be inferred that the State
STATE IMMUNITY has admitted any liability, much less can it be inferred that
it has consented to the suit. (Republic v. Sandoval, G.R. No.
Doctrine of State Immunity 84607, March 19, 1993)

The State may not be sued without its consent. (1987 b. Special law
Constitution, Art. XVI, Sec. 3) i. By virtue of PD 1620, the grant of immunity to
IRRI is clear and unequivocal, and an express
GR: All states are sovereign equals and cannot assert waiver by its Director General is the only way
jurisdiction over one another, consonant with the public by which it may relinquish or abandon this
international law principle of par in parem non habet immunity. (Callado, v. IRRI, G.R. No. 106483,
imperium. A contrary disposition would "unduly vex the May 22, 1995)
peace of nations." (Arigo v. Swift, G.R. No. 206510, September
16, 2014) 2. Implied consent
a. When the State commences litigation, it becomes
NOTE: This privilege of immunity from suit pertains to the vulnerable to counterclaim. (Froilan v. Pan Oriental
President by virtue of the office and may be invoked only by Shipping, G.R. No. L-6060, September 30, 1954)
the holder of the office; not by any other person in the
President’s behalf. Thus, an accused in a criminal case in NOTE: The Republic of the Philippines intervened in the
which the President is the complainant cannot raise the case merely to unite with the defendant Attorney General of
presidential privilege as a defense to prevent the case from the United States in resisting plaintiff’s claims, and for that
proceeding against such accused. (Luis Beltran v. Hon. reason asked no affirmative relief. The Republic did not
Ramon Makasiar, G.R. No. 82827, November 14, 1988.) waive its immunity from suit. This is not a case where the
state takes the initiative against a private party by filing a
NOTE: The rule is that if the judgment against such officials complaint in intervention, thereby surrendering its
will require the state itself to perform an affirmative act to privileged position and coming down to the level of the
satisfy the same, the suit may be regarded as against the defendant, but one where the state, as one of the
state itself although it has not been formally impleaded. defendants, merely resisted a claim against it precisely on
(Garcia v. Chief of Staff, G.R. No. L-20213, January 31, 1966) the ground among others, of its privileged position, which
exempts it from suit. (Lim v. Brownell, G.R. No. L-8587, March
XPN: A State may be sued if it gives consent, whether 24, 1960)
express or implied.
b. When State enters into a business contract.
Forms of consent (Municipality of San Fernando v. Firme, G.R. No. L-
52179, April 8, 1991)
1. Express consent
a. General law Capacities of the State in entering into contracts
i. Act No. 3083 and CA 327 as amended by Secs.
49-50, PD 1445 – Money claims arising from 1. In jure gestionis – By right of economic or business
contracts which could serve as a basis of civil relations; commercial, or proprietary acts. MAY BE
action between private parties to be first filed SUED. (US v. Guinto, G.R. No. 76607, February 26, 1990)

2021 GOLDEN NOTES 2021 & 2022
Political Law
NOTE: The State may be said to have descended to the Q: Spouses Sison sued the Philippine National Railways
level of an individual and can thus be deemed to have for damages for the death of their son who fell from an
tacitly given its consent to be sued only when it enters overloaded train belonging to the PNR. The trial court
into business contracts. Consequently, the restrictive dismissed the suit on the ground that the charter of the
application of State immunity is proper only in such PNR, as amended by PD 741, has made the same a
case. (Restrictive Theory of State Immunity from government instrumentality, and thus immune from
suit) suit. Is the dismissal proper?

2. In jure imperii – By right of sovereign power and in the A: NO. The PNR is not immune from suit. It did not remove
exercise of sovereign functions. No implied consent. itself from the operation of Arts. 1732 to 1766 of the Civil
(US v. Ruiz, G.R. No. L-35645, May 22, 1985) Code on common carriers. Not all government entities,
whether corporate or non-corporate, are immune from
NOTE: In exercising the power of eminent domain, the suits. Immunity from suit is determined by the character of
State exercises a power jure imperii. Yet, it has been the objects for which the entity is organized. When the
held that where property has been taken without the government enters into a commercial business, it abandons
payment of just compensation, the defense of its sovereign capacity and is to be treated like any other
immunity from suit cannot be set up in an action for corporation. In this case, the State divested itself of its
payment by the owner. (Republic v. Sandiganbayan, sovereign capacity when it organized the PNR which is no
G.R. No. 90478, November 21, 1991) different from its predecessors, the Manila Railroad
Company. (Spouses Malong v. PNRC, G.R. No. L-49930, August
Q: Do all contracts entered into by the government 7, 1985)
operate as a waiver of its non-suability?
Suability vs. Liability vs. Execution
A: NO. Distinction must still be made between one which is
executed in the exercise of its sovereign function and BASIS SUABILITY LIABILITY EXECUTION
another which is done in its proprietary capacity. A State
may be said to have descended to the level of an individual Depends on Depends on Depends on
and can be deemed to have actually given its consent to be the consent of the the appro-
sued only when it enters into business contracts. It does not As to the State to be applicable priation of
apply where the contract relates to the exercise of its basis sued law and the funds by the
sovereign functions. (Department of Agriculture v. NLRC G.R. established Congress
No. 104269, Nov. 11, 1993) facts

When suit is considered as suit against the State The circum- The State A judgment
As a stance that a can never be against the
1. The Republic is sued by name; conse- State is suable held liable if State cannot
2. The suit is against an unincorporated government quence does not it is not be automati-
agency performing propriety functions; and of ano- necessarily suable. cally executed.
3. The suit is on its face against a government officer but ther mean that it is
the case is such that ultimate liability will belong to the liable.
government. (Republic v. Sandoval, G.R. No. 84607,
March 19, 1993) NOTE: It is one thing to consent to being sued, another to
admit liability, thus the phrase, “waiver of immunity by
Q: The USS Guardian of the US Navy ran aground on an the State does not mean a concession of its liability.”
area near the Tubbataha Reefs, a marine habitat of
which entry and certain human activities are prevented When the State gives its consent to be sued, it does not
and afforded protection by Philippine laws and thereby necessarily consent to an unrestrained execution
UNCLOS. Bishop Arigo of Palawan filed a petition for the against it. (Republic v. Hidalgo, G.R. No. 161657, October 4,
issuance of Writ of Kalikasan and impleaded US officials 2007)
in their capacity as commanding officers of the US Navy.
He argues that there is a waiver of immunity from suit Suit against a public officer
found in the Visiting Forces Agreement (VFA) between
the US and the Philippines, and invoke federal statutes GR: The true test in determining whether a suit against a
in the US under which agencies of the US have public officer is a suit against the State is that, if a public
statutorily waived their immunity to any action. Is he officer or agency is sued and made liable, the State will
correct? have to perform an affirmative act of appropriating the
needed amount to satisfy the judgment. If the State will
A: NO. The VFA is an agreement which defines the have to do so, then, it is a suit against the State.
treatment of United States troops and personnel visiting the
Philippines to promote “common security interests” XPNs:
between the US and the Philippines in the region. The 1. The public official is charged in his official capacity for
invocation of US federal tort laws and even common law is acts that are unlawful and injurious to the rights of
thus improper considering that it is the VFA which governs others. Public officials are not exempt, in their
disputes involving US military ships and crew navigating personal capacity, from liability arising from acts
Philippine waters in pursuance of the objectives of the committed in bad faith; or
agreement. However, the waiver of State immunity under
the VFA pertains only to criminal jurisdiction and 2. The public official is clearly being sued not in his
applicable only to US personnel under VFA and not to official capacity but in his personal capacity, although
special civil actions such as the present petition for issuance the acts complained of may have been committed
of a Writ of Kalikasan. The principle of State immunity while he occupied a public position. (Lansang v. CA,
therefore bars the exercise of jurisdiction by this Court over G.R. No. 102667, February 23, 2000)
the persons of the US Officials. (Arigo v. Swift, G.R. No.
206510, September 16, 2014)

2021 GOLDEN NOTES 2021 & 2022
Political Law
NOTE: As a matter of doctrine, illegal acts of government 3. Such exercise must be for a limited period only; and
agents do not bind the State, and the Government is never
estopped from questioning the acts of its officials, more so NOTE: If the Congress does not expressly take back the
if they are erroneous, let alone irregular. This principle power by means of a Resolution, the same shall cease
applies in land registration cases. Certainly, the State will upon its next Adjournment.
not be allowed to abdicate its authority over lands of the
public domain just because its agents and officers have been 4. Such exercise must be subject to restrictions prescribed
negligent in the performance of their duties. (Republic v. Sps. by the Congress. [Sec. 23 (2), Art. VI, 1987 Constitution]
Benigno, G.R. No. 205492, March 11, 2015)
DELEGATION OF POWERS BILL OF RIGHTS

Principle of Non-Delegability It is a set of prescriptions setting forth the fundamental civil
and political rights of the individual, and imposing
GR: What has been delegated cannot be delegated. limitations on the powers of government as a means of
securing the enjoyment of those rights.
It is based upon the ethical principle that such delegated
power constitutes not only as a right, but also as a duty to Bill of Rights not to be invoked against private
be performed by the delegate through the instrumentality individuals
of his own judgment and not through the intervening mind
of another. A further delegation of such power, unless The Bill of Rights cannot be invoked against private
permitted by the sovereign power, would constitute a individuals. In the absence of governmental interference,
negation of this duty in violation of the trust reposed in the the liberties guaranteed by the Constitution cannot be
delegate. (Cruz and Cruz, supra at 160) invoked. The equal protection erects no shield against
private conduct, however discriminatory or wrongful.
XPNS: (Yrasegui v. PAL, G.R. No. 168081, October 17, 2008)
1. Delegations to the People at large;
NOTE: However, where the husband invoked his right to
a. R.A. 6735 – The Initiative and Referendum Act as privacy of communication and correspondence against a
authorized by the constitutional mandate for the private individual, his wife, who had forcibly taken from his
creation of a system of legislation by initiative and cabinet documents and private correspondence, and
referendum presented as evidence against him, the Supreme Court held
b. A plebiscite is required in the creation, division, these papers are inadmissible in evidence, upholding the
merger, abolition of province, city, municipality, or husband’s right to privacy. (Zulueta v. CA, G.R. No. 107383,
barangay or the substantial alteration of its February 20, 1996)
boundary.
NOTE: These are more of reservations of power by the DUE PROCESS OF LAW
people than delegations considering the fact that the
people are repositories of all governmental powers. Due process clause (1992, 1999, 2007, 2009 BAR)

2. Emergency powers of the President; No person shall be deprived of life, liberty, or property
3. Tariff powers of the President; without due process of law, nor shall any person be denied
4. Delegation to local governments; and the equal protection of the laws. (1987 Constitution, Art. III,
5. Delegation to Administrative bodies of the power of Sec. 1)
subordinate legislation. (Cruz and Cruz, supra at 162)
Due process is a law which hears before it condemns, which
Tests for Valid Delegation proceeds upon inquiry and renders judgment only after
trial. (Trustees of Dartmouth College v. Woodward, 17 U.S. (4
1. Completeness Test – The law must be complete in itself, Wheat.) 518 (1819))
setting forth therein the policy to be executed, carried
out, or implemented by the delegate. Q: A criminal complaint was filed by the Office of the
Ombudsman before the Sandiganbayan against Atty.
2. Sufficient Standard Test – The law must fix a standard, Labay for two counts of violation of Article 217 of the
the limits of which are sufficiently determinate or RPC. Accused Labay moved for reconsideration since he
determinable, to which the delegate must conform in the was not aware of the fact-finding investigation
performance of his functions. conducted by the Office of the Ombudsman because he
never received a copy of the affidavit of complaint and
its attachments. The same was, however, denied. He
NOTE: For subordinate legislation to be valid, the then instituted an action before the Supreme Court to
Administrative Code of 1987 requires the filing of rules enjoin the Sandiganbayan the criminal proceedings
adopted by the administrative agencies with the UP Law and remand the matter to the Office of the Ombudsman
Center, in addition to compliance with completeness test for reinvestigation. Decide with reason.
and sufficient standard test. (Quezon City PTCA Federation.
Inc. v. DepEd, G.R. No. 188720, February 23, 2016, J. Leonen) A: The petition of Atty. Labay should be granted. His due
process was violated when he was not furnished a copy of
Emergency Powers the complaint affidavit and his constitutional right to
attachments during the preliminary investigation.
For the delegation of emergency powers to the President to
be valid, the following requisites must concur: Section 1, Article III of the 1987 Constitution guarantees the
right of every person to due process before they are
1. It is done during war or national emergency; deprived of their life, liberty, or property. Due process in
2. It must allow the President to exercise such powers criminal prosecutions is further emphasized under Section
which are necessary and proper to carry out a declared 14, Article III which provides that no person shall be held to
national policy;

2021 GOLDEN NOTES 2021 & 2022
Political Law
answer for a criminal offense without due process of law. NOTE: Due process in disciplinary cases involving students
The same provision also states that the accused shall be does not entail proceedings and hearings similar to those
presumed innocent until the contrary is proved and shall prescribed for actions and proceedings in courts of justice;
enjoy the right to be informed of the nature and cause of the that the proceedings may be summary; that cross-
accusation against him.
examination is not an essential part of the investigation or
Criminal due process requires that the procedure hearing; and that the required proof in a student
established by law, or the rules be followed to assure that disciplinary action, which is an administrative case, is
the State makes no mistake in taking the life or liberty neither proof beyond reasonable doubt nor preponderance
except that of the guilty. All the necessary measures must of evidence but only substantial evidence or “such relevant
be taken to guarantee procedural due process throughout evidence as a reasonable mind might accept as adequate to
all stages of a criminal prosecution until rendition of support a conclusion.”
judgment. (Labay v. Sandiganbayan, G.R. Nos. 235937-40,
July 23, 2018) What is crucial is that official action must meet minimum

standards of fairness to the individual, which generally
NOTE: The due process clause prohibits the annihilation of
vested rights. A state may not impair vested rights by encompass the right of adequate notice and a meaningful
legislative enactment, by the enactment or by the opportunity to be heard.
subsequent repeal of a municipal ordinance, or by a change
in the constitution of the State, except in a legitimate It is not required that procedural due process be afforded at
exercise of the police power. (Ayog v. Cusi G.R. No. L-46729 every stage of developing disciplinary action. What is
November 19, 1982) required is that an adequate hearing be held before the final
act of dismissal. (Cudia v. Superintendent of the PMA, G.R. No.
KINDS OF DUE PROCESS 211362, February 24, 2015)

Due process means: c. LEVELS OF SCRUTINY

1. There shall be a law prescribed in harmony with the Void-for-Vagueness Doctrine
general powers of the legislature;
2. It shall be reasonable in its operation; A law is vague when it lacks comprehensive standards that
3. It shall be enforced according to the regular methods of men of common intelligence must necessarily guess at its
procedure prescribed; and common meaning and differ as to its application. The
4. It shall be applicable alike to all citizens of the State or Supreme Court held that the doctrine can only be invoked
to all of a class. (People v. Cayat, G.R. No. L-45987, May 5, against that species of legislation that is utterly vague on its
1939) face, i.e., that which cannot be clarified either by a saving
clause or by construction. (Estrada v. Sandiganbayan, G.R.
a. SUBSTANTIVE DUE PROCESS No. 148560, November 19, 2001)

It requires the intrinsic validity of the law in interfering EQUAL PROTECTION OF LAWS
with the rights of the person to his life, liberty, or property. LEVELS OF SCRUTINY (2015 BAR)
If a law is invoked to take away one’s life, liberty or
property, the more specific concern of substantive due 1. Rational Basis Test (Differential review) – The
process is not to find out whether said law is being enforced traditional test, which requires "only that government
in accordance with procedural formalities but whether the must not impose differences in treatment except upon
said law is a proper exercise of legislative power. some reasonable differentiation fairly related to the
object of regulation." Simply put, it merely demands
NOTE: Publication of laws is part of substantive due
that the classification in the statute reasonably relates
process. It is a rule of law that before a person may be bound
to the legislative purpose. (Concurring Opinion of Justice
by law, he must be officially and specifically informed of its
Leonardo-De Castro in Garcia v. Drilon, G.R. No. 179267,
contents. For the publication requirement, “laws” refer to
June 25, 2013)
all statutes, including those of local application and private
laws. This does not cover internal regulations issued by 2. Strict Scrutiny Test – This refers to the standard for
administrative agencies, which are governed by the LGC. determining the quality and the amount of
Publication must be full, or there is none at all. (Tañada vs. governmental interest brought to justify the regulation
Tuvera, G.R. No. L-63915, December 29, 1986) of fundamental freedoms. Strict scrutiny is used today
to test the validity of laws dealing with the regulation of
b. PROCEDURAL DUE PROCESS speech, gender, or race as well as other fundamental
rights as expansion from its earlier applications to
Procedural due process is the aspect of due process which equal protection. (White Light Corporation v. City of
serves as a restriction on actions of judicial and quasi- Manila, G.R. No. 122846, January 20, 2009)
judicial agencies of the government. It refers to the method
and manner by which a law is enforced. 3. Intermediate Scrutiny Test –It requires that the
classification (means) must serve an important
The fundamental elements of procedural due process governmental objective (ends) and is substantially
(NOJ) related to the achievement of such objective. A
classification based on sex is the best-established
1. Notice (to be meaningful, must be as to time and example of an intermediate level of review. (Concurring
place); Opinion of Justice Leonardo-De Castro in Garcia v. Drilon,
2. Opportunity to be heard; and G.R. No. 179267, June 25, 2013)
3. Court/tribunal must have jurisdiction.
Q: Zomer Development filed a complaint for
Declaration of Nullity of Notice of Sale, Certificate of

2021 GOLDEN NOTES 2021 & 2022
Political Law
Sale and TCT because Section 47, R.A. No. 8791 is seized. (HPS Software and Communication Corporation
unconstitutional. It argued that the subject provision and Yap v. PLDT, G.R. Nos. 170217 and 170694,
violated its right to equal protection since the law December 10, 2012)
provides a shorter period for redemption of three (3)
months or earlier to juridical entities compared to the Mere “reliable information” will not satisfy the
one (1) year redemption period given to natural “personal knowledge” requirement
persons. This discrimination, it argued, gave "undue
advantage to lenders who are non-banks." Is this The long-standing rule in this jurisdiction, applied with a
argument tenable? great degree of consistency, is that “reliable information”
alone is not sufficient to justify a warrantless arrest under
A: NO. The argument of Zomer Development is untenable. Section 5(a), Rule 113. The rule requires, in addition, that
The difference in the treatment of juridical persons and the accused perform some overt act that would indicate that
natural persons was based on the nature of the properties he “has committed, is actually committing, or is attempting
foreclosed — whether these are used as residence, for to commit an offense.” (People v. Nuevas, G.R. No. 170233,
which the more liberal one-year redemption period is February 22, 2007)
retained, or used for industrial or commercial purposes, in
which case a shorter term is deemed necessary to reduce Q: The trial court found Gilbert guilty beyond
the period of uncertainty in the ownership of property and reasonable doubt of violating Article 11, Section 5 of RA
enable mortgagee banks to dispose sooner of these No. 9165, otherwise known as the Comprehensive
acquired assets. Dangerous Drugs Act of 2002. The conviction was
affirmed by the CA. Gilbert moved for his acquittal,
The rational basis test may be applied to determine the arguing that the prosecution failed to prove an
constitutionality of R.A. No. 8971, Section 47. The rational unbroken chain of custody. Is Gilbert entitled to
basis test requires only that there be a legitimate acquittal?
government interest and that there is a reasonable
connection between it and the means employed to achieve A: YES. Sebilleno is entitled to acquittal. The elements to
it. There is, thus, a legitimate government interest in the sustain convictions for violation of Section 5 of the
protection of the banking industry and a legitimate Comprehensive Dangerous Drugs Act, or the illegal sale of
government interest in the protection of foreclosed dangerous drugs are "(1) proof that the transaction or sale
residential properties owned by natural persons. The took place and (2) the presentation in court of the corpus
shortened period of redemption for juridical entities may delicti or the illicit drug as evidence." The prosecution must
be considered to be the reasonable means for the protection prove with moral certainty the corpus delicti, to which it
of both these interests. (Zomer Development Company, Inc. failed to discharge this burden.
v. Court of Appeals, G.R. 194461, January 7, 2020, J. Leonen)
This requires the performance of two (2) actions: physical
NOTE: The constitutional guaranty of the equal protection inventory and photographing. Section 21(l) is specific as to
clause may not be invoked against a private entity. In the when and where these actions must be done. As to when, it
absence of governmental interference, the liberties must be "immediately after seizure and confiscation." As to
guaranteed by the Constitution cannot be invoked. Put where, it depends on whether the seizure was supported by
differently, the Bill of Rights is not meant to be invoked a search warrant. If a search warrant was served, the
against acts of private individuals. Indeed, the US Supreme physical inventory and photographing must be done at the
Court, in interpreting the Fourteenth Amendment, which is exact same place that the search warrant is served. In case
the source of our equal protection guarantee, is consistent or warrantless seizures, these actions must be done at the
in saying that the equal protection erects no shield against nearest police station or at the nearest office of the
private conduct, however discriminatory or wrongful. apprehending officer/team. whichever is practicable.
Private actions, no matter how egregious, cannot violate the (People v. Sebilleno, G.R. No. 221457, January 13, 2020, J.
equal protection guarantee. (Yrasuegui v. Philippine Airlines, Leonen)
Inc. G.R. No. 168081, October 17, 2008)
WARRANTLESS SEARCHES
RIGHT AGAINST UNREASONABLE (2000, 2009, 2015 BAR)
SEARCHES AND SEIZURES
1. Visual search is made of moving vehicles at
Search warrant checkpoints;
2. Search as an incident to a valid arrest;
Search warrant is an order in writing, issued in the name of
the People of the Philippine Islands, signed by a judge or a NOTE: Consent to a search is not to be lightly inferred,
justice of the peace, and directed to a peace officer, but shown by clear and convincing evidence. Consent
commanding him to search for personal property and bring must also be voluntary in order to validate an
it before the court. (Rodriguez vs. Villamiel, G.R. No. 44328, otherwise illegal search; that is, the consent must be
December 23, 1937 cited Sec. 96, General Orders No. 58, as unequivocal, specific, intelligently given, and
amended by Sec. 6 of Act No. 2886) uncontaminated by any duress or coercion. [Caballes v
CA, G.R. No. 136292, 373 SCRA 221 (2002)] (2015 BAR)
Valid Warrant, Requisites (P-J-E-P)
3. Customs search;
1. It must be issued upon determination of Probable 4. Searches of vessels and aircraft for violation of
cause; immigration and drug laws;
2. The probable cause must be determined by the Judge 5. Searches of buildings and premises to enforce
himself and not by the applicant or any other person; fire. Sanitary, and building regulations; and
3. In the determination of probable cause, the judge must 6. Exigent and emergency circumstances. (People
Examine, under oath or affirmation, the complainant v. De Gracia, G. R. Nos. 102009-10, July 6, 1994)
and such witnesses as the latter may produce; and
4. The warrant issued must Particularly describe the Tip is hearsay
place to be searched and persons and things to be

2021 GOLDEN NOTES 2021 & 2022
Political Law
In situations involving warrantless searches and seizures, The balance lies in the concept of "suspiciousness" present
"law enforcers cannot act solely on the basis of confidential in the situation where the police officer finds himself or
or tipped information. A tip is still hearsay no matter how herself in. This may be undoubtedly based on the
reliable it may be. It is not sufficient to constitute probable experience of the police officer. Experienced police officers
cause in the absence of any other circumstance that will have personal experience dealing with criminals and
arouse suspicion. (People v. Sapla, G.R. No. 244045, June 16, criminal behavior. Hence, they should have the ability to
2020) discern — based on facts that they themselves observe —
whether an individual is acting in a suspicious manner.
Q: Can the police conduct a warrantless intrusive Clearly, a basic criterion would be that the police officer,
search of a vehicle on the sole basis of an unverified tip with his or her personal knowledge, must observe the facts
relayed by an anonymous informant to apprehend a leading to the suspicion of an illicit act.
suspect?
In Manalili v. Court of Appeals, the police officers were
A: NO. In a search of a moving vehicle, the vehicle is the initially informed about a place frequented by people
target and not a specific person; the vehicle was abusing drugs. When they arrived, one of the police officers
intentionally used as a means to transport illegal items. In a saw a man with "reddish eyes and [who was] walking in a
similar case decided by the Court, it is worthy to note that swaying manner." The suspicion increased when the man
the information relayed to the police officers was that a avoided the police officers. These observations led the
passenger of that particular bus was carrying marijuana police officers to conclude that the man was high on drugs.
such that when the police officers boarded the bus, they These were sufficient facts observed by the police officers
searched the bag of the person matching the description "to stop[the] petitioner [and] investigate."
given by their informant and not the cargo or contents of
the said bus. Here, the actual target of the police officers was
the person and not the vehicle. (Ibid) In People v. Solayao, police officers noticed a man who
appeared drunk. This man was also "wearing a camouflage
Plain View Doctrine (2012 BAR) uniform or a jungle suit." Upon seeing the police, the man
fled. His flight added to the suspicion. After stopping him,
Under the plain view doctrine, objects falling in the "plain the police officers found an unlicensed "homemade
view" of an officer, who has a right to be in the position to firearm" in his possession. This court ruled that "[u]nder
have that view, are subject to seizure and may be presented the circumstances, the government agents could not
as evidence. It applies when the following requisites concur: possibly have procured a search warrant first." This was
(J-I-A) also a valid search.
1. The law enforcement officer in search of the
evidence has a valid justification for an intrusion In these cases, the police officers using their senses
or is in a position from which he can view a observed facts that led to the suspicion. Seeing a man with
particular area; reddish eyes and walking in a swaying manner, based on
2. The discovery of the evidence in plain view is their experience, is indicative of a person who uses
inadvertent; and dangerous and illicit drugs. A drunk civilian in guerrilla
3. It is immediately apparent to the officer that the wear is probably hiding something as well. (People vs.
item he observes may be evidence of a crime, Cogaed, G.R. No. 200334, July 30, 2014, J. Leonen)
contraband, or otherwise subject to seizure.
Checkpoints
The law enforcement officer must lawfully make an initial
intrusion or properly be in a position from which he can Searches conducted in checkpoints are lawful, provided the
particularly view the area. In the course of such lawful checkpoint complies with the following requisites:
intrusion, he came inadvertently across a piece of evidence
incriminating the accused. The object must be open to eye 1. The establishment of checkpoint must be
and hand, and its discovery inadvertent. (Fajardo v. People, pronounced;
G.R. No. 190889, January 10, 2011) 2. It must be stationary, not roaming; and
3. The search must be limited to visual search and
Use of a thermal imaging device to scan a house must not be an intrusive search.

Officers are on a public street and they are engaged in more A checkpoint is akin to a stop-and-frisk situation whose
than naked-eye surveillance of a home. The thermovision object is either to determine the identity of suspicious
imaging is an unlawful search. The plain view doctrine is not individuals or to maintain the status quo momentarily while
applicable in this case because it was not seen by the naked the police officers seek to obtain more information.
eye. (Valmonte v. De Villa, G.R. No. 83988, September 29, 1989)
The Government used a device that is not in general public Knock and Announce Principle
use, to explore details of the home that would previously
have been unknowable without physical intrusion, the Q: With a valid warrant to search a house, Los Angeles
surveillance is a "search" and is presumptively deputies knocked on the door and announced their
unreasonable without a warrant. [Kyllo v. United States, 533 presence. Z answered. The deputies entered the house
U.S. 27 (2001)] after ordering Z to lie face down on the ground. The
deputies found in a bedroom X and Y, who had been
Stop-and-frisk search (2009, 2012 BAR)
sleeping unclothed, and ordered them out of bed.
Without success, X and Y attempted to cover themselves
"Stop and frisk" searches (sometimes referred to as Terry
as they were held at gunpoint for one to two minutes
searches) are necessary for law enforcement. That is, law
enforcers should be given the legal arsenal to prevent the before they were allowed to retrieve a robe. X and Y
commission of offenses. However, this should be balanced argued that the deputies violated their rights by
with the need to protect the privacy of citizens in obtaining a warrant in reckless fashion and conducting
accordance with Article III, Section 2 of the Constitution.

2021 GOLDEN NOTES 2021 & 2022
Political Law
an unreasonable search and detention. Is X and Y that the vehicle looked suspicious simply because it is not
correct? common for such to be covered with kakawati leaves does
not constitute "probable cause" as would justify the conduct
A: NO. In executing a search warrant, officers may take of a search without a warrant. Furthermore, the police
reasonable action to secure the premises and to ensure authorities did not claim to have received any confidential
their own safety and the efficacy of the search. The orders report or tipped information that Rudy was carrying stolen
by the police to the occupants, in the context of this lawful cable wires in his vehicle which could otherwise have
search, were permissible, and perhaps necessary, to protect sustained their suspicion. (G. R. No. 136292, January 15,
the safety of the deputies. Blankets and bedding can conceal 2002)
a weapon.
WARRANTLESS ARRESTS AND DETENTION
The deputies needed a moment to secure the room and
ensure that other persons were not close by or did not An arrest can be made by a peace officer or a private person
present a danger. Deputies were not required to turn their without a warrant in the following instances:
backs to allow X and Y to retrieve clothing or to cover 1. “In flagrante delicto” arrest when:
themselves with the sheets. Rather, the risk of harm to both
the police and the occupants is minimized if the officers (a) the person to be arrested executed an overt act
routinely exercise unquestioned command of the situation. indicating that he has just committed, is actually
(Los Angeles County v. Rettele, US Supreme Court, 21 May committing, or is attempting to commit a crime;
2007) and
(b) such overt act is done in the presence or within the
Q: Luz was flagged down by PO3 Alteza for driving a view of the arresting officer (Valdez v. People, G.R.
No. 170180, 23 November 2007)
motorcycle without a helmet. Alteza invited Luz to their
sub-station and while issuing a citation ticket for 2. “Hot pursuit” arrest when:
violation of municipal ordinance, Alteza was alerted by
the latter’s uneasy movement and asked him to put out (a) an offense has just been committed; and
the contents of the pocket of his jacket. It was revealed (b) the arresting officer has probable cause to believe
that Luz was in possession of prohibited drugs. Can the based on personal knowledge of facts or
roadside questioning of a motorist detained pursuant circumstances that the person to be arrested has
to a routine traffic stop be considered a formal arrest? committed it. (Pestilos v. Generoso, G.R. No. 182601,
November 10, 2014).

A: NO. There was no valid arrest of appellant. When he was 3. When the person to be arrested is a prisoner who has
flagged down for committing a traffic violation, he was not, escaped from a penal establishment or place where he
ipso facto and solely for this reason, arrested. The time he is serving final judgment or is temporarily confined
was waiting for Alteza to write his citation ticket could not while his case is pending, or has escaped while being
be said to have been under arrest. The period during which transferred from one confinement to another.
appellant was in the police station may be characterized
merely as waiting time. Luz could not be said to have been Effects of unreasonable searches and seizures

under arrest. There was no intention on the part of Alteza
The chain of custody is essential in establishing the link
to arrest him, deprive him of his liberty, or take him into between the articles confiscated from the accused to the
custody. In fact, Alteza himself testified that it was only for evidence that is ultimately presented to the court for its
the sake of convenience that they were waiting at the sub- appreciation. The exhibit’s level of susceptibility to
station. There being no valid arrest, the warrantless search fungibility, alteration or tampering — without regard to
that resulted from it was likewise illegal. (Luz v. People of whether the same is advertent or otherwise not - dictates
the Philippines, G.R. No. 197788, February 29, 2012) the level of strictness in the application of the chain of
custody rule. (People v. Ronaldo De Guzman, G.R. No. 186498,
In Valeroso v. CA, the scope of the warrantless search is not March 26, 2010)
without limitations. A valid arrest allows the seizure of
PRIVACY OF COMMUNICATION AND
evidence or dangerous weapons either on the person of the CORRESPONDENCE
one arrested or within the area of his immediate control.
The purpose of the exception is to protect the arresting Expectation of Privacy Test (Katz test)
officer from being harmed by the person arrested, who
might be armed with a concealed weapon, and to prevent This test was applied by SC in cases where a claim of
the latter from destroying evidence within reach. Search government intrusion is made. In Katz v. U.S, the U.S.
made in the locked cabinet cannot be said to have been Supreme Court held that people had an expectation of
within one’s immediate control. Thus, the search exceeded privacy in phone conversations, even calls made in public
phone booths. Thus, even physical public places, individuals
the bounds of what may be considered as an incident to a
may expect the constitutional protection of the right to
lawful arrest. (G.R. No. 164815, September 3, 2009) privacy. The right also extends to personal communications
which now includes text messages sent through cyberspace.
In Caballes v. CA, when a vehicle is stopped and subjected to
an extensive search, such a warrantless search would be Habeas Data
constitutionally permissible only if the officers conducting
the search have reasonable or probable cause to believe, The writ of habeas data is a remedy available to any person
before the search, that either the motorist is a law-offender whose right to privacy in life, liberty or security is violated
or threatened by an unlawful act or omission of a public
or they will find the instrumentality or evidence pertaining official or employee, or of a private individual or entity
to a crime in the vehicle to be searched. However, the fact

2021 GOLDEN NOTES 2021 & 2022
Political Law
engaged in the gathering, collecting or storing of data or NOTE: There need not be total suppression; even
information regarding the person, family, home and restriction of circulation constitutes censorship.
correspondence of the aggrieved party. It is an independent
and summary remedy designed to protect the image, The right to freedom of expression applies to the entire
privacy, honor, information, and freedom of information of continuum of speech from utterances made to conduct
an individual, and to provide a forum to enforce one’s right enacted, and even to inaction itself as a symbolic manner of
to the truth and to informational privacy. It seeks to protect communication. (Diocese of Bacolod v COMELEC, G.R. No.
a person’s right to control information regarding oneself, 205728, January 21, 2015, as penned by J. Leonen)
particularly in instances in which such information is being
collected through unlawful means in order to achieve TYPES OF REGULATION
unlawful ends. (Vivares and Sps. Suzara v. St. Theresa’s
College of Cebu, G.R. No. 202666, September 29, 2014) a. PRIOR RESTRAINT AND SUBSEQUENT PUNISHMENT

The right to privacy is not absolute Without taking into account any extenuating circumstances
that may favor the respondents, we can identify the bare
A limited intrusion into a person's privacy has long been acts of closing the radio stations or preventing their
regarded as permissible where that person is a public figure operations as an act of prior restraint against speech,
and the information sought to be elicited from him or to be expression or of the press.
published about him constitute of a public character.
Succinctly put, the right of privacy cannot be invoked to Prior restraint refers to official governmental restrictions
resist publication and dissemination of matters of public on the press or other forms of expression in advance of
interest. (Ayer Productions Pty. Ltd. v. Capulong, G.R. No. actual publication or dissemination. While any system of
82380, April 29, 1988) prior restraint comes to court bearing a heavy burden
against its constitutionality, not all prior restraints on
Q: Can the exclusionary rule be applied as against speech are invalid. (Newsounds Broadcasting Network v. Dy,
private individuals who violate the right to privacy? G.R. No. 170270, April 2, 2009)

A: YES. Although generally, the Bill of Rights can only be NOTE: There need not be total suppression.
invoked against violations of the government, the Court has
recognized an instance where it may also be applied as b. CONTENT-BASED AND CONTENT-NEUTRAL
against a private individual. The right to privacy of REGULATIONS
communication may be invoked against the wife who went
to the clinic of her husband and there took documents Freedom from prior restraint is largely freedom from
consisting of private communications between her husband government censorship of publications, whatever the form
and his alleged paramour. (Zulueta v. CA, G.R. No. 107383, of censorship, and regardless of whether it is wielded by the
February 20, 1996) executive, legislative or judicial branch of the government.
Even the closure of the business and printing offices of
Exclusionary Rule certain newspapers, resulting in the discontinuation of their
printing and publication, are deemed as previous restraint
GR: Any evidence obtained in violation of the Constitution or censorship.
shall be inadmissible for any purpose in any proceeding.
[Sec. 3 (2), Art. III, 1987 Constitution] Any law or official that requires some form of permission to
be had before publication can be made, commits an
XPNS: infringement of the constitutional right, and remedy can be
had at the courts. (Chavez v. Gonzales, G.R. No. 168338,
1. In the absence of any governmental interference, the February 15, 2008)
protection guaranteed by the Constitution cannot be
invoked against the State. (People v. Marti, G.R. No. c. INCITEMENT AND ADVOCACY
78109, January 18, 1991)
2. It may be used in judicial or administrative action that d. SPECIFICITY OF REGULATION AND OVERBREADTH
may be filed against the erring officer. (Cruz and Cruz, DOCTRINE
Constitutional Law, 2015 Ed, p. 330)
3. There is an express or implied waiver. Facial Challenge (2015 BAR)

FREEDOM OF SPEECH AND EXPRESSION A challenge to a statute in court, in which the plaintiff
alleges that the legislation is always, and under all
No law shall be passed abridging the freedom of speech, of circumstances, unconstitutional, and therefore void.
expression, or of the press, or of the right of the people
peaceably to assemble and petition the government for Facial challenge is allowed to be made to a vague statute and
redress of grievances. (Art. III, Sec. 4, 1987 Philippine to one which is overbroad because of possible “chilling
Constitution) effect” upon protected speech. The theory is that “[w]hen
statutes regulate or proscribe speech and no readily
NOTE: The scope of freedom of expression is so broad that apparent construction suggests itself as a vehicle for
it extends protection to nearly all forms of communication. rehabilitating the statutes in a single prosecution, the
It protects speech, print and assembly regarding secular as transcendent value to all society of constitutionally
well as political causes, and is not confined to any particular protected expression is deemed to justify allowing attacks
field of human interest. The protection covers myriad on overly broad statutes with no requirement that the
matters of public interest or concern embracing all issues, person making the attack demonstrate that his own conduct
about which information is needed or appropriate, so as to could not be regulated by a statute drawn narrow
enable members of society to cope with the exigencies of specificity.” (Estrada v. Sandiganbayan GR. 148560,
their period. (Chavez v. Gonzales G.R. No. 168338, February November 19, 2001)
15, 2008) (2014 BAR)


2021 GOLDEN NOTES 2021 & 2022
Political Law
The rule established in our jurisdiction is, only statutes on The ownership and management of mass media shall be
free speech, religious freedom, and other fundamental limited to citizens of the Philippines, or to corporations,
rights may be facially challenged. (Southern Hemisphere cooperatives or associations, wholly-owned and managed
Engagement Network, Inc. v. Anti-Terrorism Council, G.R. No. by such citizens. (Section 11(1), Article XVI, 1987
178552, October 5, 2010) Constitution of the Philippines)
Overbreadth Doctrine (2010, 2014 BAR) SPECIAL TOPICS IN FREE EXPRESSION CASES

The overbreadth doctrine decrees that a governmental a. DEFAMATION AND LIBEL
purpose to control or prevent activities constitutionally
subject to state regulations may not be achieved by means Q: What is libel?
which sweep unnecessarily broadly and thereby invade the A: It is a public and malicious imputation of a crime, or of a
area of protected freedoms. (Southern Hemisphere vice or defect, real or imaginary, or any act, omission,
Engagement Network, Inc. v. Anti-Terrorism Council, G.R. No. condition, status, or circumstance tending to cause the
178552, October 5, 2010) dishonor, discredit, or contempt of a natural or juridical
person, or to blacken the memory of one who is dead.
NOTE: The application of the overbreadth doctrine is (Article 353, Revised Penal Code)
limited to a facial kind of challenge and, owing to the given
rationale of a facial challenge, applicable only to free speech Libel is not protected speech
cases.
The constitutional guarantee against prior restraint and
Distinguished from an as-applied challenge which subsequent punishment, the jurisprudential requirement of
considers only extant facts affecting real litigants, a facial “actual malice”, and the legal protection afforded by “the
invalidation is an examination of the entire law, pinpointing privilege communications” all ensure that protected speech
its flaws and defects, not only on the basis of its actual remains guarded. As long as the expression or speech falls
operation to the parties, but also on the assumption or within the protected sphere, it is the solemn duty of the
prediction that its very existence may cause others not courts to ensure that the rights of the people are protected.
before the court to refrain from constitutionally protected (Disini v. Secretary of Justice, G.R. No. 203335, April 22,
speech or activities. (Disini v. Sec. of Justice, G.R. No. 203335, 2014)
February 11, 2014)
b. SEDITION AND SPEECH IN RELATION TO REBELLION
e. SPEECH REGULATION IN RELATION TO ELECTION
Fictitious Suicide Photo and Letter
A law which prohibits any person making use of the media
from selling or giving print space or air time free of charge When a fictitious suicide photo and letter were published in
for campaign or other political purposes is a valid exercise newspapers of general circulation expressing
of police power. (National Press Club v. COMELEC, G.R. No. disappointment in the Roxas administration and instructing
102653, March 5, 1992) a fictitious wife to teach their children to burn photos of the
President, the Court held that such act constitutes inciting
The COMELEC prohibition on the publishing of SWS’ survey to sedition. Such utterance suggests or incites rebellious
results days before the elections is invalid because: conspiracies or riots and tends to turn the people against
the constituted authorities, or to provoke violence from
1. It imposes a prior restraint on the freedom of opposition groups who may seek to silence the writer,
expression; which is the sum and substance of the offense under
2. It is a direct and total suppression of a category of consideration. (Espuelas v. People, G.R. No. L-2990)
expression even though such expression is only for a
limited period; and c. OBSCENITY / PORNOGRAPHY
3. The governmental interest sought to be promoted can
be achieved by means other than suppression of Obscenity
freedom and expression. (SWS v. COMELEC, G.R. No.
147571, May 5, 2001) The case of Miller v. California, established basic guidelines,
to wit: (A-PO-L)
Freedom of the Press
1. Whether the Average person, applying contemporary
When the press is silenced, or otherwise muffled in its standards, would find that the work, taken as a whole,
undertaking of acting as a sounding board, the people appeals to the prurient interest;
ultimately would be the victims. (GMA Network v. COMELEC, 2. Whether the work depicts or describes, in a Patently
G.R. No. 205357, September 2, 2014) Offensive way, sexual conduct specifically defined by
the application state law; and
Regulation of speech in the context of electoral campaigns 3. Whether the work, taken as a whole, Lacks serious
made by persons who are not candidates or who do not literary, artistic, political or scientific value.
speak as members of a political party which are, taken as a
whole, principally advocacies of a social issue that the No one will be subject to prosecution for the sale or
public must consider during elections is unconstitutional. exposure of obscene materials unless these materials depict
Such regulation is inconsistent with the guarantee of or describe patently offensive “hard core” sexual conduct.
according the fullest possible range of opinions coming What remains clear is that obscenity is an issue for judicial
from the electorate including those that can catalyze candid, determination and should be treated on a case-to-case
uninhibited, and robust debate in the criteria for the choice basis, and on the judge’s sound discretion. (Fernando v.
of a candidate. (Diocese of Bacolod v COMELEC, G.R. No. Court of Appeals, G.R. No. 159751, December 6, 2006)
205728, January 21, 2015 as penned by J. Leonen)
d. SPEECH OF PUBLIC OFFICERS
f. SPEECH REGULATION IN RELATION TO MEDIA
Limitations on freedom of expression (2014 BAR)

2021 GOLDEN NOTES 2021 & 2022
Political Law
It should be exercised within the bounds of laws enacted for This means that the state should adopt a “position of
the promotion of social interests and the protection of other neutrality” when it comes to religious matters. (Political
equally important individual rights such as: Law Reviewer, Suarez, p. 252 citing CJ Fernando, 2011)

Free Exercise Clause
1. Laws against obscenity, libel and slander (contrary to

public policy);
The Free Exercise Clause affords absolute protection to
2. Right to privacy of an individual;
individual religious convictions. However, the government
3. Right of state/government to be protected from
is able to regulate the times, places, and manner of its
seditious attacks;
exercise. (Cantwell v. Connecticut, 310 U.S. 296, May 20,
4. Legislative immunities;
1940)
5. Fraudulent matters;
6. Advocacy of imminent lawless conducts; Under the Free Exercise Clause, religious belief is absolutely
7. Fighting words; and protected, religious speech and proselytizing are highly
8. Guarantee implies only the right to reach a willing protected but subject to restraints applicable to non-
audience but not the right to compel others to listen, religious speech, and unconventional religious practice
see or read. receives less protection; nevertheless, conduct, even if it
violates the law, could be accorded protection. (Estrada v.
Libel cases involving public officials and the discharge Escritor, A.M. No. P-02-1651, June 22, 2006)
of their functions
Q: Ang Ladlad, an organization composed of LGBTs,
Even if the defamatory statement is false, no liability can applied for registration with the COMELEC to
attach if it relates to official conduct, unless the public participate in the party-list elections. The COMELEC
official concerned proves that the statements was made dismissed the petition on moral grounds, stating the
with actual malice — that is, with knowledge that it was definition of sexual orientation of the LGBT sector
false or with reckless disregard of whether it was false or makes it crystal clear that petitioner tolerates
not. (Vasquez v. CA, G.R. No. 118971, September 15, 1999) immorality which offends religious beliefs based on the
Bible and the Koran. Ang Ladlad argued that the denial
FREEDOM OF RELIGION of registration, insofar as it justified the exclusion by
using religious dogma, violated the constitutional
No law shall be made respecting an establishment of guarantees against the establishment of religion. Is this
religion or prohibiting the free exercise thereof. The free argument correct?
exercise and enjoyment of religious profession and
worship, without discrimination or preference, shall A: YES. It was a grave violation of the non-establishment
forever be allowed. No religious test shall be required for clause for the COMELEC to utilize the Bible and the Koran to
the exercise of civil or political rights. (Section 5, Article III, justify the exclusion of Ang Ladlad. Our Constitution
1987 Constitution) provides in Art. III, Sec. 5 that “no law shall be made
respecting an establishment of religion, or prohibiting the
Guarantees contained in Sec. 5 Art. III of the 1987 free exercise thereof.” At bottom, what our non-
Constitution (1996, 1997, 1998, 2003, 2009, 2012 BAR) establishment clause calls for is government neutrality in
religious matters. Clearly, governmental reliance on
1. Non-establishment clause; and religious justification is inconsistent with this policy of
2. Free exercise clause. neutrality. (Ang Ladlad v. COMELEC, G.R. No. 190582, April 8,
2010)
Benevolent Neutrality Doctrine or the Doctrine of
Accommodation RIGHTS OF PERSONS UNDER CUSTODIAL
INVESTIGATION
The benevolent neutrality theory believes that with respect
to these governmental actions, accommodation of religion Start of Custodial Investigation
may be allowed, not to promote the government's favored
form of religion, but to allow individuals and groups to Custodial investigation commences when a person is taken
exercise their religion without hindrance into custody and is singled out as a suspect in the
commission of a crime under investigation and the police
Doctrine of Separation of Church and the State officers begin to ask questions on the suspect's
participation therein and which tend to elicit an admission.
The principle of separation of Church and State was, thus, (Ariel Lopez v. People of the Philippines, G.R. No. 212186, June
enshrined in Article II, Section 6 of the 1987 Constitution. 29, 2016, as penned by J. Leonen)
Verily, the principle of separation of Church and State is
based on mutual respect. Generally, the State cannot The following are the rights of suspects: (2013 BAR)
meddle in the internal affairs of the church, much less
question its faith and dogmas or dictate upon it. It cannot 1. Right to remain silent;
favor one religion and discriminate against another. On the 2. Right to competent and independent counsel,
other hand, the church cannot impose its beliefs and preferably of his own choice;
convictions on the State and the rest of the citizenry. It 3. Right to be reminded that if he cannot afford the
cannot demand that the nation follow its beliefs, even if it services of counsel, he would be provided with one;
sincerely believes that they are good for the country. 4. Right to be informed of his rights;
(Imbong vs. Ochoa, G.R. No. 204819, April 8, 2014) 5. Right against torture, force, violence, threat,
intimidation or any other means which vitiate the free
Non-Establishment Clause will;
6. Right against secret detention places, solitary,
Art. III, Sec. 5 states that “No law shall be made respecting an incommunicado, or similar forms of detention; and
establishment of religion, or prohibiting the free exercise 7. Right to have confessions or admissions obtained in
thereof.” violation of these rights considered inadmissible in

2021 GOLDEN NOTES 2021 & 2022
Political Law
evidence. (Miranda v Arizona, 384 U.S. 436, June 13, 6. There is Undue risk that he may commit another crime
1966) during the pendency of the appeal.

The person under custodial investigation must be informed Bail for special, humanitarian and compelling
that: circumstances

1. He has the right to remain silent and that any statement Bail can be granted to a person not only to those charged in
he makes may be used as evidence against him; criminal proceedings but also to extraditees upon a clear
2. He has the right to the presence of an attorney, either and convincing showing: (1) that the detainee will not be a
retained or appointed; and flight risk or a danger to the community; and (2) that there
3. He has the right to be informed of the two rights. exist special, humanitarian, and compelling circumstances.
(Enrile v. Sandiganbayan, G.R. No. 213847, August 18, 2015)
RIGHTS OF THE ACCUSED
Bail for an extraditee
(D-I-C-A-S-WIT-E-D-B)
While our extradition law does not provide for the grant of
1. Due process; bail to an extraditee, however, there is no provision
2. Be presumed Innocent; prohibiting him or her from filing a motion for bail, a right
3. Be heard by himself and Counsel; to due process under the Constitution.
4. Be informed of the nature and cause of the Accusation
against him; The applicable standard of due process, however, should
5. A Speedy, impartial and public trial; not be the same as that in criminal proceedings. In the latter,
6. Meet the witnesses face to face; the standard of due process is premised on the presumption
7. Have compulsory process to secure the attendance of of innocence of the accused. As Purganan correctly points
witnesses and production of evidence on his behalf; out, it is from this major premise that the ancillary
8. Against double jeopardy; and presumption in favor of admitting to bail arises. Bearing in
9. Bail. mind the purpose of extradition proceedings, the premise
behind the issuance of the arrest warrant and the
Right to appeal not a natural right "temporary detention" is the possibility of flight of the
potential extraditee. This is based on the assumption that
The right to appeal is neither a natural right nor part of due such extraditee is a fugitive from justice. Given the
process. It is a mere statutory right, but once given, denial foregoing, the prospective extraditee thus bears the onus
constitutes violation of due process. probandi of showing that he or she is not a flight risk and
should be granted bail. (Government of Hong Kong v. Olalia,
Bail as a matter of right vs. when bail is discretionary G.R. No. 153675, April 19, 2007).

RIGHT DISCRETIONARY Equipoise Rule
1. BEFORE 1. AFTER conviction of the
conviction by the MTC, MTCC or MCTC Where the evidence adduced by the parties is evenly
MTC, MTCC or balanced, the constitutional presumption of innocence
MCTC; and 2. The offense is NOT should tilt the balance in favor of the accused. (Corpuz v.
punishable by death, People, G.R. No. 74259, February 14, 1991)
2. Before conviction reclusion perpetua or life
by the RTC imprisonment (Sections 4 RIGHT TO SPEEDY DISPOSITION OF CASES
and 5, Rule 114 of the Rules
3. The offense must of Court) Reckoning of ‘Delay’
NOT be The application for bail may be
punishable by acted upon by the trial court In People v. Sandiganbayan, Fifth Division, the ruling that
death, reclusion despite the filing of a notice of fact-finding investigations are included in the period
perpetua, or life appeal for determination of inordinate delay is abandoned.
imprisonment
NOTE: As long as the original With respect to fact-finding at the level of the Ombudsman,
record has not yet been the Ombudsman must provide for reasonable periods based
transmitted to the appellate upon its experience with specific types of cases,
court. compounded with the number of accused and the
complexity of the evidence required.
Bail shall be denied upon showing of the following or
similar circumstances: (6-R-E-P-F-U) These time limits must be strictly complied with. If it has
been alleged that there was delay within the stated time
1. The penalty imposed by the trial court is imprisonment periods, the burden of proof is on the defense to show that
exceeding 6 years there has been a violation of their right to speedy trial or
2. He is a Recidivist, quasi-recidivist or habitual their right to speedy disposition of cases. The defense must
delinquent or has committed a crime aggravated by be able to prove first, that the case took much longer than
reiteration was reasonably necessary to resolve, and second, that
3. He has Escaped from confinement, evaded sentence or efforts were exerted to protect their constitutional rights.
violated the conditions of his bail without valid
justification What may constitute a reasonable time to resolve a
4. He committed the offense while under Probation, proceeding is not determined by "mere mathematical
parole or conditional pardon reckoning." It requires consideration of a number of factors,
5. The circumstances of the case indicate the probability including the time required to investigate the complaint, to
of Flight if released on bail file the information, to conduct an arraignment, the
application for bail, pre-trial, trial proper, and the
submission of the case for decision. Unforeseen

2021 GOLDEN NOTES 2021 & 2022
Political Law
circumstances, such as unavoidable postponements or regarded as with express consent of the accused, who is
force majeure, must also be taken into account. (Cagang v. therefore deemed to have waived the right to plea double
Sandiganbayan, G.R. No. 206438 and 206458, July 31, 2018, jeopardy.
as penned by J. Leonen)
XPNs:
RIGHT AGAINST DOUBLE JEOPARDY
a. Dismissal based on insufficiency of evidence;
No person shall be twice put in jeopardy of punishment for (Saldariega v. Panganiban, G.R. Nos. 211933 &
the same offense. If an act is punished by a law and an 211960, April 15, 2015)
ordinance, conviction or acquittal under either shall b. Dismissal because of denial of accused’s right to
constitute a bar to another prosecution for the same act. speedy trial; and (Ibid.)
c. Accused is discharged to be a State witness.
Two kinds of double jeopardy 6. When the case was provisionally dismissed;
7. The graver offense developed due to supervening facts
1. Double jeopardy for the same offense; (1st sentence, arising from the same act or omission constituting the
Sec. 21 of Art. III); and former charge;

2. Double jeopardy for the same act. (2nd sentence, Sec. NOTE: Doctrine of Supervening Event - The accused
21 of Art. III); (People v. Quijada, 259 SCRA 191, July 24, may still be prosecuted for another offense if a
1995) subsequent development changes the character of the
first indictment under which he may have already been
Legal jeopardy attaches only upon: charged or convicted.

(Com-Fi-A-P-A,WEC) 8. The facts constituting the graver charge became known
or were discovered only after a plea was entered in the
1. Valid complaint or information; former complaint or information;
2. Filed before a competent court; 9. The plea of guilty to a lesser offense was made without
3. The arraignment of the accused; the consent of the prosecutor and of the offended party
4. To which he had pleaded; and except as otherwise provided in Sec. 1(f) of Rule 116.
5. Defendant was previously acquitted or convicted, or
the case dismissed or otherwise terminated without his BILL OF ATTAINDER
express consent. (Saldariega v. Panganiban, G.R. Nos.
211933 & 211960, April 15, 2015) A bill of attainder is generally understood as a legislative act
which inflicts punishment on individuals or members of a
NOTE: Consent of the accused to the dismissal cannot be particular group without a judicial trial.
implied or presumed; it must be expressed as to have no
doubt as to the accused’s conformity. (Caes v. IAC, 179 SCRA
54, November 6, 1989) A bill of attainder encroaches on the courts' power to
determine the guilt or innocence of the accused and to
To substantiate a claim of double jeopardy, the following impose the corresponding penalty, violating the doctrine of
must be proven: separation of powers. (Fuertes vs. Senate, G.R. No. 208162,
January 07, 2020, as penned by. J. Leonen)
1. A first jeopardy must have attached prior to the
second; NOTE: For a law to be considered a bill of attainder, it must
2. The first jeopardy must have been validly terminated; be shown to contain all of the following: "a specification of
and certain individuals or a group of individuals, the imposition
3. The second jeopardy must be for the same offense or of a punishment, penal or otherwise, and the lack of judicial
the second offense includes or is necessarily included trial." The most essential of these elements is the complete
in the offense charged in the first information or is an exclusion of the courts from the determination of guilt and
attempt to commit the same or is a frustration thereof. imposable penalty. (Ibid)

Exceptions to the right against double jeopardy RIGHTS DURING EXPROPRIATION

1. When the trial court acted with grave abuse of Q: Upon request of the DPWH, Ortigas and Company
discretion amounting to lack or excess of jurisdiction; Limited Partnership reserved certain portions of its
(Bangayan, Jr. v. Bangayan, G.R. No. 172777, and De Asis subdivision for road expansion of the government.
Delfin v. Bangayan, G.R. No. 172792, October 19, 2011) When asked to pay, DPWH refused to pay by invoking
2. The accused was not acquitted nor was there a valid and the Property Registration Decree insisting that the
legal dismissal or termination of the case; portion used for the road widening for the C-5 flyover
3. Dismissal of the case was during the preliminary
investigation; project is construed as a donation. Ortigas and
4. It does not apply to administrative cases; and Company therefore filed a civil suit against DPWH
5. Dismissal or termination of the case was with the seeking compensation over its property. Will the case
express consent of the accused. filed by Ortigas and Company prosper?

NOTE: When the dismissal is made at the instance of the A: YES. As held in Republic v. Castellvi (G.R. No. L-20620,
accused, there is no double jeopardy. (People v. Quijada, 160 August 15, 1974), a property owner is entitled to just
SCRA 516, July 24, 1996) compensation when government takes his property for a
public purpose.
GR: Double jeopardy is not available when the case is
dismissed other than on the merits or other than by
acquittal or conviction upon motion of the accused The lot was reserved for road widening at the instance of
personally, or through counsel, since such dismissal is DPWH. The intention to take the property for public use was

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Political Law
obvious from the completion of the road widening for the C-

5 flyover project and from the fact that the general public Apportionment of legislative districts
was already taking advantage of the thoroughfare. The right
to compensation under Article III, Section 9 of the Legislative apportionment is the determination of the
number of representatives which a State, country, or other
Constitution was put in place to protect the individual from subdivision may send to a legislative body. It is the
and restrain the State’s sovereign power of eminent allocation of seats in a legislative body in proportion to the
domain, which is the government’s power to condemn population; the drawing of voting district lines so as to
private properties within its territory for public use or equalize population and voting power. (Bagabuyo v.
purpose. (Republic v. Ortigas and Company, G.R. No. 171496, COMELEC, G.R. No. 176970, December 8, 2008)
March 03, 2014, J. Leonen)
Each city with a population of at least 250,000 shall have at
NOTE: Upon payment by the plaintiff to the defendant of the least one representative. Each province, irrespective of the
compensation fixed by the judgment, with legal interest number of inhabitants, shall have at least one
representative.
thereon from the taking of the possession of the property,

or after tender to him of the amount so fixed and payment While Sec. 5(3) of Art. VI requires a city to have a minimum
of the costs, the plaintiff shall have the right to enter upon population of 250,000 to be entitled to one representative;
the property expropriated and to appropriate it for the it does not have to increase its population by another
public use or purpose defined in the judgment, or to retain 250,000 to be entitled to an additional district. (Senator
it should he have taken immediate possession thereof Aquino III v. COMELEC, G.R. No. 189793, April 7, 2010)
under the provisions of Section 2 hereof. If the defendant
and his counsel absent themselves from the court, or NOTE: Sec. 5(3), Art. VI of the 1987 Constitution
decline to receive the amount tendered, the same shall be which requires 250,000 minimum population apply only for
a city to be entitled to a representative but not for a
ordered to be deposited in court and such deposit shall have province. The provision draws a plain and clear distinction
the same effect as actual payment thereof to the defendant between the entitlement of a city to a district, on one hand,
or the person ultimately adjudged entitled thereto. (Sec. 10, and the entitlement of a province to a district on the other.
Rule 67, Rules of Court) For while a province is entitled to at least a representative,
with nothing mentioned about population, a city must first
LEGISLATIVE DEPARTMENT meet a population minimum of 250,000 in order to be
similarly entitled. (Aquino and Robredo v. COMELEC, G.R. No.
Legislative power 189793, April 7, 2010)

The power or competence to propose, enact, ordain, Manner of reapportionment
amend/alter, modify, abrogate or repeal laws. It is vested in
the Congress which shall consist of a Senate and a House of Reapportionment is the realignment or change in legislative
Representatives, except to the extent reserved to the people districts brought about by changes in population and
by the provision on initiative and referendum. mandated by the constitutional requirement of equality of
representation. (Bagabuyo v. COMELEC, G.R. No. 176970,
The following may exercise legislative power: December 8, 2008)

1. Congress NOTE: The Constitution does not require a plebiscite for the
2. Regional/Local Government Units creation of a new legislative district by a legislative
3. The People through initiative and referendum. (2002 reapportionment. It is required only for the creation of new
BAR) local government units. (Bagabuyo v. COMELEC, 2008, G.R.
No. 176970, December 8, 2008) (2015 BAR)
NOTE:
Q: Congress enacted a law creating the legislative
1. Cross-Border Transfer of Funds Principle (Section district of Malolos based on a certification of the
25(5) of Article VI, 1987 Constitution) demographic projection from NSO stating that by 2010,
Malolos is expected to reach the population of 250,000,
GR: No law shall be passed authorizing any transfer of hence entitling it to one legislative district. Is the law
appropriations. valid?

XPNs: The following officers may, by law, be authorized A: NO. Congress cannot establish a new legislative district
to augment any item in the general appropriations law based on a projected population of the National Statistics
for their respective offices from savings in other items Office to meet the population requirement of the
of their respective appropriations: Constitution in the reapportionment of legislative districts.
a. President
b. Senate President A city that has attained a population of 250,000 is entitled
c. House Speaker to a legislative district only in the “immediately following
d. Chief Justice election.” In short, a city must first attain the 250,000
e. Heads of Constitutional Commissions population, and thereafter such city shall have a district
(Araullo v. Aquino, G.R. No. 209287, July 1, representative in the immediately following election. There
2014; in relation to Demetria v. Alba, G.R. No. is no showing in the present case that the City of Malolos
71977, February 27, 1987) has attained or will attain a population of 250,000, whether
actual or projected, before May 10, 2010 elections. Thus, the
2. Section 29(1) of Article VI, 1987 Constitution City of Malolos is not qualified to have a legislative district
(memorize the provision as much as possible) of its own under Sec. 5(3), Art. VI of the 1987 Constitution
and Sec 3 of the Ordinance appended to the 1987
No money shall be paid out of the Treasury except in Constitution. (Aldaba v. COMELEC, G.R. No. 188078, January
pursuance of an appropriation made by law. 25, 2010)

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Political Law
LEGISLATIVE PRIVILEGES, INHIBITIONS, the 1987 Constitution. (Liban v. Gordon, G.R. No. 175352, July
AND DISQUALIFICATIONS 15, 2009)

Legislative Privilege Instances when Congress is voting separately and
voting jointly
No member shall be questioned or held liable in any forum
other than his respective Congressional body for any debate SEPARATE JOINT
or speech in Congress or in any committee thereof. (1987 1. Choosing the President in case 1. When revoking
Constitution, Art. VI, Sec. 11; Pobre v. Sen. Santiago, A.C. No. of a tie (1987 Constitution, Art. or extending the
7399, August 25, 2009) VII, Sec. 4). proclamation
2. Determining President’s suspending the
Limitations on Legislative Privilege inability to discharge the privilege of writ
powers and duties of his office of habeas corpus
1. Protection is only against the forum other than the (1987 Constitution, Art. VII, Sec. (1987
Congress itself. Thus, for defamatory remarks, which 11). Constitution, Art.
are otherwise privileged, a member may be 3. Confirming nomination of VII, Sec. 18).
sanctioned by either the Senate or the HoR, as the case Vice-President (1987 2. When revoking
may be. Constitution, Art. VII, Sec. 9). or extending the
2. The “speech or debate” must be made in performance 4. Declaring the existence of a declaration of
of their duties as members of Congress. state of war in joint session martial law (1987
(1987 Constitution, Art. VI, Sec. Constitution, Art.
NOTE: The remarks of Sen. Trillanes fall outside the 23, Par. 1). VII, Sec. 18).
privilege of speech or debate under Sec. 11, Art. VI of the Proposing Constitutional
1987 Constitution. The statements were clearly not part of amendments (1987 Constitution,
any speech delivered in the Senate or any of its committees. Art. XVII, Sec. 1).
They were not also spoken during any debate. It cannot
likewise be successfully contended that they were made in Instances when Congress votes by majority
the official discharge or performance of Sen. Trillanes’ INSTANCES WHEN NUMBER OF VOTES REQUIRED
duties as a Senator, as the remarks were not part of or CONGRESS VOTES
integral to the legislative process. To participate in or Elect the Senate Majority vote of all its respective
respond to media interviews is not an official function of President or House members (1987 Constitution,
any lawmaker; it is not demanded by his sworn duty nor is of Representatives Art. VI , Sec. 16, Par. 1)
it a component of the process of enacting laws. (Sen. Speaker
Antonio Trillanes vs. Hon. Evangeline Castillo-Marigomen, Commission on Majority vote of all the members
G.R. No. 223451, March 14, 2018) Appointments ruling (1987 Constitution, Art. VI, Sec.
18)

Passing a law Majority of all the members of
Prohibitions attached to a legislator during his term granting any tax Congress (1987 Constitution, Art.
exemption VI , Sec. 28, Par. 4)
INCOMPATIBLE
FORBIDDEN OFFICE
OFFICE Instances when Congress votes other than majority
1 sentence of
st 2 sentence of Sec. 13,
nd

Sec. 13, Art.VI Art. VI INSTANCES WHEN NUMBER OF VOTES
Senator or any member of HoR CONGRESS VOTES REQUIRED
May not hold any Cannot be appointed to any office
other office or which have been created, or the To suspend or expel a 2/3 of all its members (1987
employment in emoluments thereof increased member in Constitution, Art. VI, Sec. 16,
the Government, during the term for which he was accordance with its Par. 3)
during his term elected rules and proceedings
without forfeiting To enter the Yeas and 1/5 of the members present
his seat NOTE: After such term, and even if Nays in the Journal (1987 Constitution, Art. VI,
he is re-elected, the
Sec. 16, Par. 4)
disqualification no longer applies
and he may therefore be To declare the 2/3 of both houses in joint
appointed to the office. existence of a state of session voting separately
Automatically Even if he is willing to forfeit his war (1987 Constitution, Art. VI,
forfeits seat upon seat, he may not be appointed to Sec. 23)
the member’s said office
assumption of such ELECTORAL TRIBUNALS AND THE
other office. Purpose: to prevent trafficking in COMMISSION ON APPOINTMENTS
public office.
XPN: Holds other Composition of the Electoral Tribunal (ET)
office in ex-officio
capacity 1. 3 Supreme Court Justices designated by the Chief
More of an More of a prohibition Justice;
inhibition 2. 6 members of the Senate or the House of
Representatives, as the case may be, chosen on the
basis of proportional representation from the political
NOTE: The Office of the Chairman of the Philippine National parties and from those registered under the party-list
Red Cross is not a government office or an office in a GOCC system represented therein. (1987 Constitution, Art.
for purposes of the prohibition in Section 13, Article VI of VI, Sec. 17)


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Political Law
NOTE: Rule 6(a) of the 2015 HRET Rules which requires the is no indication that it was made during plenary or in open
presence of at least one Justice and four members of the session and, thus, it remains unclear whether the required
Tribunal to constitute a quorum does not violate the equal oath of office was indeed complied with. (G.R. No. 207264,
protection clause. Without this rule, it would be possible for June 25, 2013)
five members of the House of Representatives to convene
and have a quorum even when no Justice is present. It COMMISSION ON APPOINTMENTS
should be noted that the presence of the three Justices, as
against six members of the House of Representatives, was Composition of the Commission on Appointments
intended as an additional guarantee to ensure impartiality
in the judgment of cases before it. Hence, there is a 1. Senate President as ex-officio chairman
substantial distinction and a valid classification between 2. 12 Senators
the Justices of the Supreme Court and the members of the 3. 12 members of the HoR (1987 Constitution, Art. VI, Sec.
House of Representatives. (Regina Ongsiako Reyes v. HRET, 18)
G.R. No. 221103, October 16, 2018)
Presidential appointments subject to confirmation by
Jurisdiction of the ETs the Commission (ExAm-CCO)

Each electoral tribunal shall be the sole judge of all contests 1. Heads of the Executive departments
relating to the election, returns, and qualifications of XPN: Vice-President who is appointed to the post
their respective members (1987 Constitution, Art. VI, Sec.
17). This includes determining the validity or invalidity of a 2. Ambassadors, other public ministers, or consuls
proclamation declaring a particular candidate as the 3. Officers of the AFP from the rank of Colonel or naval
winner. Each ET is also vested with rule-making power. Captain
(Lazatin v. HRET, G.R. No. L-84297, Dec. 8, 1988) 4. Other officers whose appointments are vested in him
by the Constitution
NOTE: It is independent of the Houses of Congress and its
decisions may be reviewed by the Supreme Court only upon a. Chairman and members of 3 Constitutional
showing of grave abuse of discretion. Commissions
b. Regular members of the Judicial and Bar Council
Electoral contest c. Members of the Regional Consultative Council

Where a defeated candidate challenges the qualification NOTE: The enumeration is exclusive.
and claims for himself the seat of the proclaimed winner. In
the absence of an election contest, ET is without POWERS OF CONGRESS
jurisdiction.
1. LEGISLATIVE INQUIRIES
When the winning candidate is considered as member AND OVERSIGHT FUNCTIONS
of the Senate or HoR
Matters that can be the subject of inquiries in aid of
Once he has: (POA) legislation
1. been Proclaimed
2. taken his Oath; and Indefinite. The field of legislation is very wide, and because
NOTE: The oath must be made: of such, the field of inquiry is also very broad and may cover
a. Before the Senate President or Speaker of the administrative, social, economic, political problem
House, as the case may be; and (inquiries), discipline of members, etc. Suffice it to say that
b. In open session. (Reyes v. COMELEC, G.R. No. it is “intrinsic” in and co-extensive with legislative power.
207264, June 25, 2013) (Arnault v. Nazareno, G.R. No. L-3820, July 18, 1950)

NOTE: If the stated purpose of the investigation is to
3. Assumed office
determine the existence of violations of the law, the

investigation is no longer “in aid of legislation” but “in aid of
NOTE: Once a winning candidate has been proclaimed,
prosecution.” This violates the principle of separation of
taken his oath, and assumed office, the COMELEC’s
powers and is beyond the scope of Congressional powers.
jurisdiction over the election contest relating to his election,

returns and qualifications ends, and the HRET’s (or SET’s)
own jurisdiction begins. (Vinzons-Chato v. COMELEC, G.R. Limitations on legislative investigation

No. 172131, April 2, 2007)
1. The persons appearing in or affected by such

In Reyes v. COMELEC, Gemma cannot be considered a legislative inquiries shall be respected.
Member of the HoR because, primarily, she has not yet
2. The Rules of procedures to be followed in such
assumed office. The jurisdiction of the HRET begins only
inquiries shall be published for the guidance of those
after the candidate is considered a Member of the HoR. To who will be summoned. This must be strictly followed
be considered a Member of the HoR, there must be a so that the inquiries are confined only to the legislative
concurrence of the following requisites: (1) a valid
purpose and to avoid abuses.
proclamation, (2) a proper oath, and (3) assumption of
office. 3. The investigation must be in aid of legislation.

The term of office of a Member of the HoR begins only “at 4. Congress may not summon the President as witness or
noon on the thirtieth day of June next following their investigate the latter in view of the doctrine of
election.” Thus, until such time, the COMELEC retains separation of powers except in impeachment cases.
jurisdiction. Consequently, before there is a valid or official
taking of the oath it must be made (1) before the Speaker of 5. Congress may no longer punish the witness in
the House of Representatives, and (2) in open session. Here, contempt after its final adjournment. The basis of the
although she made the oath before Speaker Belmonte, there power to impose such penalty is the right to self-

2021 GOLDEN NOTES 2021 & 2022
Political Law
preservation. And such right is enforceable only jurisdiction over petitions for habeas corpus. If filed before
during the existence of the legislature. (Lopez v. Delos the CA, the latter acquires jurisdiction to the exclusion of all
Reyes, G.R. No. L-34361, Nov. 5, 1930) others, including the SC. (Agcaoili v. Fariñas, G.R. No. 232395,
July 03, 2018)
6. Congress may no longer inquire into the same
justiciable controversy already before the court. Oversight power of Congress
(Bengzon v. Senate Blue Ribbon Committee, G.R. No.
89914, November 20, 1991) Embraces all activities undertaken by Congress to enhance
its understanding of and influence over the implementation
NOTE: A legislative investigation in aid of legislation and of legislation it has enacted. It concerns post-enactment
court proceedings have different purposes. Thus, the mere measures undertaken by Congress. (Opinion of J. Puno,
filing of a criminal or an administrative complaint before a Macalintal v. COMELEC, G.R. No. 157013, July 10, 2003)
court or quasi-judicial body should not automatically bar
the conduct of legislative investigation. This also applies to NOTE: The mere filing of criminal or an administrative
appealed cases and special civil actions awaiting final complaint before a court or quasi-judicial body should not
disposition before the SC. (Romero II v. Sen. Estrada, G.R. No. automatically bar the conduct of legislative investigation.
174105, April 2, 2009) Otherwise, it would be extremely easy to subvert any
extended inquiry by Congress through the convenient ploy
Contempt powers of Congress of instituting a criminal or an administrative complaint.
Surely, the exercise of sovereign legislative authority, of
Even if the Constitution only provides that Congress may which the power of legislative inquiry is an essential
punish its members for disorderly behavior or expel the component, cannot be made subordinate to a criminal or
same, it is not an exclusion of power to hold other persons administrative investigation. (Romero II v. Sen. Estrada, G.R.
in contempt. No. 174105, April 2, 2009)

Q: In the exercise of its power to investigate in aid of Congressional Inquiry
legislation, can Congress cite a person in contempt and
detain him indefinitely? In a case decided by the Court, it was held that Court may
not enjoin the Senate from proceeding with its
A: NO. The period of detention under the Senate’s inherent congressional inquiry. Except only when it exercises the
power of contempt is not indefinite. The Court finds that the power to punish for contempt, the Senate Committee
period of imprisonment under the inherent power of cannot penalize violators even if there is overwhelming
contempt by the Senate during inquiries in aid of legislation evidence of criminal culpability. Other than proposing or
should only last until the termination of the legislative initiating amendatory or remedial legislation, the Senate
inquiry under which the said power is invoked or when Committee can only recommend measures to address or
Congress adjourns sine die. If Congress decides to extend remedy whatever irregularities may be unearthed during
the period of imprisonment for the contempt committed by the investigation, although it may include in its Report a
a witness beyond the duration of the legislative inquiry or recommendation for the criminal indictment of persons
after it has already adjourned, then it may file a criminal who may appear liable. At best, the recommendation, along
case under the existing statute or enact a new law to with the evidence, contained in the Committee Report
increase the definite period of imprisonment. would be persuasive, but it is still up to the prosecutorial
agencies and the courts to determine the liabilities of the
Further, the Court rules that the legislative inquiry of offender. (Standard Chartered Bank (Philippine Branch) v.
the Senate terminates on two instances: Senate Committee on Banks, Financial Institutions and
Currencies, G.R. No. 167173, December 27, 2007)
First, upon the approval or disapproval of the Committee
Report. Evidently, the Committee Report is the culmination 2. NON-LEGISLATIVE
of the legislative inquiry. Its approval or disapproval
signifies the end of such legislative inquiry and it is now up Power of Impeachment
to the Senate whether or not to act upon the said Committee
Report in the succeeding order of business. At that point, The following are the steps in an impeachment process
the power of contempt simultaneously ceases and the (2012, 2019 BAR)
detained witness should be released. As the legislative Constitution provides that the House of Representatives
inquiry ends, the basis for the detention of the recalcitrant shall have the exclusive power to initiate all cases of
witness likewise ends. impeachment. (1987 Constitution, Art XI, Sec. 3 (1))

Second, the legislative inquiry of the Senate also terminates NOTE: The power to impeach is essentially a non-legislative
upon the expiration of one (1) Congress. As stated in Neri, prerogative and can be exercised by Congress only within
all pending matters and proceedings, such as unpassed bills the limits of the authority conferred upon it by the
and even legislative investigations, of the Senate are Constitution. (Gutierrez v. House of Representatives
considered terminated upon the expiration of that Congress Committee on Justice, G.R. No. 193459, February 15, 2011)
and it is merely optional on the Senate of the succeeding
Congress to take up such unfinished matters, not in the The Senate has the sole power to try and decide all cases of
same status, but as if presented for the first time. Again, impeachment [1987 Constitution, Art. XI, Sec. 3(6)]. Hence,
while the Senate is a continuing institution, its judgment in an impeachment proceeding is normally not
proceedings are terminated upon the expiration of that subject to judicial review.
Congress at the final adjournment of its last session. Hence,
as the legislative inquiry ends upon that expiration, the XPN: Courts may annul the proceedings if there is a
imprisonment of the detained witnesses likewise ends. showing of a grave abuse of discretion or non-compliance
(Balag vs. Senate, G.R. No. 234608, July 03, 2018) with the procedural requirements of the Constitution.

NOTE: The remedy in such cases is a Petition for Writ of PROCESS OF LEGISLATION
Habeas Corpus. The SC, CA, and the RTC enjoy concurrent

2021 GOLDEN NOTES 2021 & 2022
Political Law
Rules regarding the passage of bills considered a non-chartered government-owned and

controlled corporation. As such, all its funds are subject to
1. No bill passed by either House shall become a law the audit of the Commission on Audit. All employees of the
unless it has passed 3 readings on separate days. Philippine Tourism Authority who received honoraria from
the CFI must therefore return all amounts received
2. Printed copies of the bill in its final form should be otherwise, they will violate the double compensation rule.
distributed to the Members 3 days before its passage (Oriondo v. COA, G.R. No. 211293, June 4, 2019, J. Leonen)
3. Upon the last reading of a bill, no amendment thereto
shall be allowed. A. QUALIFICATIONS, ELECTION, AND TERM OF THE
4. The vote on the bill shall be taken immediately after PRESIDENT AND VICE-PRESIDENT
the last reading of a bill.
5. The yeas and the nays shall be entered in the Journal. Qualifications of the President and the Vice-President
(VP)
XPN: The certification of the President, due to the necessity
1. Natural-born citizen of the Philippines;
of its immediate enactment to meet a public calamity or
2. A registered voter;
emergency, dispenses with the reading on separate days 3. Able to read and write;
and the printing of the bill in the final form before its final 4. At least forty years of age on the day of the election;
approval. (Tolentino v. Secretary of Finance, G.R. No. 115455, and
October 30, 1995) 5. A resident of the Philippines for at least ten years
immediately preceding such election. (1987
Instances when a bill becomes a law (1991, 1993, 1996 Constitution, Art. VII, Sec. 2).
BAR)
NOTE: The enumeration is exclusive.
1. Approved and signed by the President
NOTE: The legislative functions of the Twelfth Congress
2. Presidential veto overridden by 2/3 vote of all may have come to a close upon the final adjournment of its
members of both Houses regular session on June 11, 2004, but this does not affect its
3. Failure of the President to veto the bill and to return it non-legislative functions, such that of being the National
with his objections to the House where it originated, Board of Canvassers. In fact, the joint public session of both
within 30 days after the date of receipt Houses of Congress convenes by express directive of
4. A bill calling a special election for President and Vice- Section 4, Article VII of the Constitution to canvass the votes
President under Sec. 10. Art. VII becomes a law upon for and to proclaim the newly elected President and Vice-
its approval on the third reading and final reading. President has not, and cannot adjourn sine die until it has
accomplished its constitutionally mandated tasks.
Q: A petition before the Supreme Court was filed (Pimentel v. Congress, G.R. No. 163783, June 22, 2004)
assailing the constitutionality of the K-12 Education
Law because the enrolled bill which the President B. PRIVILEGES, INHIBITIONS AND DISQUALIFICATIONS
signed into law varies significantly from the reconciled
version of the bill as approved by Congress and 1. PRESIDENTIAL IMMUNITY
reported in the Senate Journal. Will the challenge
prosper? Doctrine of Executive Immunity

A: NO. The enrolled bill prevails over the entries in a The President is immune from suit or from being brought to
congressional journal. Under the enrolled bill doctrine, the court during the period of his incumbency and tenure.
signing of a bill by the Speaker of the House and the Senate
President and the certification of the Secretaries of both Reason: Assures that the President is free to exercise his
Houses of Congress that it was passed is conclusive not only Presidential duties and responsibilities without any
as to its provisions but also as to its due enactment. hindrance or distraction.

The rationale behind the enrolled bill doctrine rests on the The privilege of immunity can only be invoked by the
consideration that "the respect due to coequal and President by virtue of the office, not by any other person on
independent departments requires the [Judiciary] to act behalf of the President.
upon that assurance, and to accept, as having passed
Congress, all bills authenticated in the manner stated; NOTE: The President, like all other government officials, is
leaving the court to determine, when the question properly subject to the same laws that apply to all citizens. No case
arises, as in the instant consolidated cases, whether the Act, has been found in which an official was granted immunity
so authenticated, is in conformity with the Constitution." from suit from his unofficial acts. The rationale for official
Jurisprudence will show that the Court has consistently immunity is inapplicable where only personal, private
adhered to the enrolled bill doctrine. (CoTesCUP v. Secretary conduct by a President is at issue. (Clinton v. Jones, 520 U.S.
of Education and Development, G. R. No. 216930, October 9. 681, 1997)
2018)
Q: Sen. de Lima delivered a privilege speech on the floor
EXECUTIVE DEPARTMENT of the Senate calling a stop to the alleged extrajudicial
killings committed in the course of the crackdown on
Q: The Corregidor Foundation, Inc. (CFI) was drugs, and urging her colleagues in the Senate to
incorporated with the SEC but was funded by the Office conduct investigations of the alleged victims.
of the President. Is CFI a private or a public
corporation? In response, President Duterte issued a number of
public statements against Sen. De Lima, including
A: While CFI was registered with the SEC, the funds used to denunciations of her corruption and immorality. The
incorporate it came from the national treasury. Thus, CFI is statements prompted her to initiate a petition for the

2021 GOLDEN NOTES 2021 & 2022
Political Law
issuance of a writ of habeas data against President demonstrated, specific need for evidence in a pending
Duterte. May the incumbent President be haled to court criminal trial. (Trump v. Vance, 591 U.S., 2020)
even for the limited purpose under the Rules on the
Writ of Habeas Data? Limitation of executive privilege

A: NO. Sen. De Lima argues that the rationale for GR: It is only the President that can invoke executive
Presidential immunity does not apply in her case because privilege, but he may authorize his alter egos to invoke the
the proceedings for the writ of habeas data do not involve privilege on his behalf. In such case, the alter ego must state
the determination of administrative, civil, or criminal that the authority is “By order of the President,” which
liabilities. Again, we remind that immunity does not hinge means that he personally consulted with the President.
on the nature of the suit. In short, presidential immunity is (Neri v. Senate, ibid)
not intended to immunize the President from liability or
accountability. XPN: A public officer who holds a position of trust by the
President, may be allowed to invoke executive privilege
The rationale for the grant of immunity from suit is to even if it is not invoked on behalf of the President. The fact
assure the exercise of Presidential duties and functions free that some members of the committee were not part of the
from any hindrance of distraction, considering that being President’s Cabinet was of no moment. What should
the Chief Executive of the Government is a job that, aside determine whether or not information was within the ambit
from requiring all of the office-holder's time, also demands of the exception from the people’s right to access to
undivided attention. (De Lima vs. Duterte, G.R. No. 227635, information was not the composition of the body, but the
October 15, 2019) nature of the information to be accessed. (Sereno v.
Committee on Trade and Related Matters, G.R. No. 175210,
Immunity can be classified either by (a) extent, i.e., absolute, February 1, 2010)
or qualified; or (b) duration, i.e., permanent, or temporary.
Unlike its American counterpart, the concept of presidential C. POWERS OF THE PRESIDENT
immunity under our governmental and constitutional
system does not distinguish whether or not the suit pertains GENERAL EXECUTIVE AND
to an official act of the President. Neither does immunity ADMINISTRATIVE POWERS
hinge on the nature of the suit. The lack of distinctions
prevents us from making any distinctions. Guided by Specific powers of the President
judicial precedents, the concept is clear and allows no
qualifications or restrictions that the President cannot be 1. Appointing power (1987 Constitution, Art. VII, Sec. 16)
sued while holding such office. (De Lima v. President 2. Power of control over all executive departments,
Duterte, G.R. No. 227635, October 15, 2019) bureaus and offices (1987 Constitution, Art. VII, Sec. 17)
3. Commander-in-Chief powers (calling-out power,
NOTE: The President, during his tenure of office or actual power to place the Philippines under martial law, and
incumbency, may not be sued in any civil or criminal case, power to suspend the privilege of the writ of habeas
and there is no need to provide for it in the Constitution or corpus) (1987 Constitution, Art. VII, Sec. 18)
law. It will degrade the dignity of the high office of the 4. Pardoning power (1987 Constitution, Art. VII, Sec. 19)
President, the Head of State, if he can be dragged into court
litigations while serving as such. Furthermore, it is NOTE: The President cannot grant pardon to an official who
important that he be freed from any form of harassment, has been removed by impeachment. However, if such
hindrance or distraction to enable him to fully attend to the official was criminally convicted, the President can still
performance of his official duties and functions. Unlike the grant him pardon because the charge of impeachment is
legislative and judicial branch, only one constitutes the separate from the criminal conviction imposed upon him.
executive branch and anything which impairs his
usefulness in the discharge of many great and important Pardon can be granted to an official who has been
duties imposed upon him by the Constitution necessarily administratively sanctioned. If criminal offenses can be
impairs the operation of the Government. (Zabal v. Duterte, pardoned, administrative cases can be pardoned as well.
G.R. No. 238467, February 12, 2019)
5. Borrowing power (1987 Constitution, Art. VII, Sec. 20)
2. PRESIDENTIAL PRIVILEGE 6. Diplomatic/Treaty-making power (1987 Constitution,
Art. VII, Sec. 21)
Scope of executive privilege 7. Budgetary power (1987 Constitution, Art. VII, Sec. 22)
8. Informing power (1987 Constitution, Art. VII, Sec. 23)
1. Conversations and correspondences to enable the 9. Veto power (1987 Constitution, Art. VI, Sec. 27)
President and those who assist him to freely “explore 10. Power of general supervision over local governments
alternatives in the process of shaping policies and (1987 Constitution, Art. X, Sec. 4)
making decisions and to do so in a way many would be 11. Power to call special session (1987 Constitution, Art.
unwilling to express except privately.” VI, Sec. 15)
2. It likewise covers military, diplomatic and other
national security matters which, in the interest of POWER OF APPOINTMENT
national security, should not be divulged.
3. It includes information between inter-government a. IN GENERAL
agencies prior to the conclusion of treaties and
executive agreements, discussions in closed-door The selection of an individual who is to exercise the
Cabinet meetings, and matters affecting national functions of a given office. It may be made verbally but it is
security and public order. usually done in writing through what is called the
commission.
NOTE: The Congress may be able to mandate the President
to surrender his financial records. The President’s NOTE: The President’s power to appoint must be exercised
generalized assertion of privilege must yield to the in accordance with existing laws. The faithful execution
clause under Section 17, Article VII of the Constitution is

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Political Law
best construed as an obligation imposed on the President, (Villena v. Sec. of the Interior, G.R. No. L-46570, April 21,
not a separate grant of power. It simply underscores the 1939).
rule of law and, corollarily, the cardinal principle that the
President is not above the laws but is obliged to obey and XPNs to the Alter Ego doctrine
execute them. (Almario v. Executive Secretary, G.R. No.
189028, July 16, 2013) 1. If the acts are disapproved or reprobated by the
President;
Section 16, Article VII of the Constitution states that the 2. If the President is required to act in person by law or by
Congress may, by law, vest the appointment of other the Constitution. (e.g. executive clemency)
officers lower in rank in the President alone, in the courts,
or in the heads of departments, agencies, commissions, or NOTE: It would appear though that the doctrine of qualified
boards. The officers whom the heads of departments, political agency would not be applicable to acts of cabinet
agencies, commissions, or boards may appoint must be of secretaries done in their capacity as ex-officio board
lower rank than those vested by law with the power to directors of a GOCC of which they become a member not by
appoint. (Rufino v. Endriga, G.R. No. 139554, July 21, 2006) appointment of the President but by authority of law (See:
Trade and Investment Development Corporation of the
b. LIMITATIONS ON THE EXERCISE / POWER OF Philippines v. Manalang-Demigillo, G.R. Nos. 168613 &
APPOINTMENT 185571).

2. Midnight Appointments Essence of the Alter Ego doctrine

GR: Two months immediately before the next presidential Applying this doctrine, the power of the President to
elections and up to the end of his term, a President or Acting reorganize the National Government may be validly
President shall not make appointments. delegated to his Cabinet Members exercising control over a
particular executive department (DENR v. DENR Region XII
XPN: Temporary appointments to executive positions when Employees, G.R. No. 149724, August 19, 2003).
continued vacancies therein will prejudice public service or
endanger public safety. (1987 Constitution, Art. VII, Sec. 15) The doctrine of qualified political agency declares that, save
in matters on which the Constitution or the circumstances
NOTE: The ban on making presidential appointments require the President to act personally, executive and
around the time of presidential elections in Section 15, administrative functions are exercised through executive
Article VII of the Constitution is confined to appointments departments headed by cabinet secretaries, whose acts are
made in the Executive Department and not in the Judiciary. presumptively the acts of the President unless disapproved
(De Castro v. Judicial and Bar Council, G.R. No. 191002, March by the latter. There can be no question that the act of the
17, 2010) secretary is the act of the President, unless repudiated by
the latter. (Hontiveros-Baraquel v. Toll Regulatory Board,
POWER OF CONTROL AND SUPERVISION G.R. No. 181293, February 23, 2015).

The President shall have control of all executive NOTE: The power of supervision does not include the
departments, bureaus and offices. (1987 Constitution, Art. power of control; but the power of control necessarily
VII, Sec. 17) includes the power of supervision.

Control vs. Supervision COMMANDER-IN-CHIEF POWERS

BASIS CONTROL SUPERVISION Scope of the President’s Commander-in-Chief Powers
The supervisor or
superintendent Absolute authority over the persons and actions of the
An officer in members of the armed forces. (Gudani v. Senga, G.R. No.
merely sees to it that
control lays down 170165, Aug. 15, 2006).
Nature the rules are followed,
the rules in the
but he himself does
doing of an act. The President as Commander-in-Chief can prevent the
not lay down such
rules. Army General from appearing in a legislative investigation
The supervisor does and, if disobeyed, can subject him to court martial. (Gudani
If the rules are not v. Senga, G.R. No. 170165, August 15, 2006).
not have the discretion
followed, the
to modify or replace
officer in control Q: The President declared martial law in Mindanao and
them. If the rules are
As to may, in his suspended the privilege of the writ of habeas corpus for
not observed, he may
discretion discretion, order 90 days. Can the Congress revoke the exercise of the
order the work done
of the offi- the act undone or Commander-in-Chief powers of the President?
or re-done but only to
cer re-done by his
conform to the
subordinate or he A: YES. The Congress in a joint session can revoke the
prescribed rules.
may even decide proclamation of martial law and the suspension of the
(Drilon v. Lim, G.R. No.
to do it himself. privilege of the writ of habeas corpus because the 90-day
112497, Aug. 4, 1994)
period is beyond the 60-day period prescribed in Section 18
DOCTRINE OF QUALIFIED POLITICAL AGENCY of Article VII. (Padilla v. Congress, G.R. No. 231671, July 25,
2017)
“Doctrine of Qualified Political Agency” or “Alter Ego
Principle” (2014, 2015 BAR) DIPLOMATIC POWER

The acts of the secretaries of the Executive departments Sources of the President’s diplomatic powers
performed and promulgated in the regular course of
business are presumptively the acts of the Chief Executive 1. The Constitution
2. The status of sovereignty and independence

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Political Law
Scope of the foreign relations powers of the President (Government of Hong Kong v. Olalia, G.R. No.
(N-ARC-DP-Reco) 153675, April 19, 2007).

1. Negotiate treaties and other international agreements. NOTE: The adjudication of facts upon which the
However, such treaty or international agreement deportation is predicated devolved on the
requires the concurrence of the Senate, (Art. VII, Sec. 21) President whose decision is final and executory
which may opt to do the following: (Tan Tong v. Deportation Board, G.R. No. L-7680,
April 30, 1955).
a. Approve with 2/3 majority;
b. Disapprove outright; or 6. Decide that a diplomatic officer who has become
c. Approve conditionally, with suggested Persona non grata be recalled.
amendments which, if re-negotiated and the
Senate’s suggestions are incorporated, the treaty 7. Recognize governments and withdraw recognition.
will go into effect without need of further Senate
approval. VETO POWERS

NOTE: Executive agreements, however, do not require GR: The President must approve entirely or disapprove in
legislative concurrence. (Bayan Muna v. Romulo, G.R. No. toto.
159618, February 1, 2011) (2015 BAR)
XPN: Line or Item Veto
An executive agreement is a “treaty” within the meaning of
that word in international law and constitutes enforceable Applies to appropriation, revenue and tariff bills, any
domestic law (Nicolas v. Romulo, G.R. No. 175888, February particular item or items of which may be disapproved
11, 2009). without affecting the item or items to which he does not
object.
Requisites of Executive Agreement (under the Vienna
Convention): JUDICIAL DEPARTMENT

a. The agreement must be between states; It is the duty of the courts of justice to settle actual
b. It must be written; and controversies involving rights, which are legally
c. It must be governed by international law (China demandable and enforceable and to determine whether or
National Machinery and Equipment Corporation v. not there has been a grave abuse of discretion amounting to
Sta. Maria, G.R. No. 185572, February 7, 2012). lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government. [1987 Constitution, Art.
Hence, it is within the authority of the President to refuse to VIII, Sec. 1(2)]
submit a treaty to the Senate or, having secured its consent
for its ratification, refuse to ratify it. Although the refusal of NOTE: There are special bodies created within the three
a state to ratify a treaty which has been signed in its behalf branches. For the Judicial Branch, these are the: 1)
is a serious step that should not be taken lightly, such Presidential Electoral Tribunal (PET); and 2) Judicial and
decision is within the competence of the President alone. Bar Council (JBC) [1987 Constitution, Art. VIII, Sec. 8(1)].
(Pimentel v. Exec. Sec., G.R. No. 158088, July 6, 2005)
NOTE: When members of the SC sit as members of the PET,
2. Appoint ambassadors, other public ministers, and they become triers of facts and law.
consuls.
3. Receive ambassadors and other public ministers JUDICIAL POWER
accredited to the Philippines.
4. Contract and guarantee foreign loans on behalf of RP Body vested with judicial power
(1987 Constitution, Art. VII, Sec. 20). (1994, 1999 BAR)
It is vested in one Supreme Court and in such lower courts
5. Deport aliens – as may be established by law. (1987 Constitution, Art. VIII,
Sec. 1)
a. This power is vested in the President by virtue of
his office, subject only to restrictions as may be Judicial Inquiry
provided by legislation as regards to the grounds The power of the court to inquire into the exercise of
for deportation (Revised Administrative Code, Sec. discretionary powers to determine whether or not there
69). has been a grave abuse of discretion amounting to lack or
b. In the absence of any legislative restriction to excess of jurisdiction.
authority, the President may still exercise this
power. Q: Paragraph 2 of Sec. 14 of the Ombudsman Act (R.A.
c. The power to deport aliens is limited by the 6770) provides: “No court shall hear any appeal or
requirements of due process, which entitles the application for remedy against the decision or findings
alien to a full and fair hearing. of the Ombudsman, except the Supreme Court, on pure
question of law.” Decide on the constitutionality of this
NOTE: Summary deportation shall be observed in provision.
cases where the charge against the alien is
overstaying or expiration of his passport. (Board of A: Since the Par. 2 of Sec. 14 of R.A. 6770 limits the remedy
Commissioners v. Jong Keun Park, G.R. No. 159835, against “decision or findings” of the Ombudsman to a Rule
January 21, 2010) 45 appeal and thus – similar to the Par. 4 of Sec. 27 of RA
6770 – attempts to effectively increase the Supreme Court’s
d. An alien has the right to apply for bail provided that appellate jurisdiction without its advice and concurrence,
a certain standard for the grant is necessarily met therefore, the former provision is also unconstitutional and
invalid. (Carpio-Morales v. Court of Appeals, G.R. No. 217126-
27, November 10, 2015)

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Political Law
Locus standi: “a mere procedural technicality, has been

JUDICIAL REVIEW defined as a personal and substantial interest in a case such
that the party has sustained or will sustain direct injury as
Exhaustion of administrative remedies is different with the a result of the governmental act that is being challenged.”
concept of primary jurisdiction because in the concept of (Anak Mindanao Party-list Group v. The Executive Secretary,
primary jurisdiction, the court would never step in. The G.R. No. 166052, August 29, 2007).
court will have to wait. Exhaustion of administrative
remedies is more akin with the adjudicatory powers. To have standing, one must show that: (In-T-Re)
Prior exhaustion of administrative remedies may be
dispensed with and judicial action may be validly resorted 1. He has suffered some actual or threatened injury as a
to immediately when: result of the allegedly illegal conduct of the
government;
a) there is a violation of due process; 2. The injury is fairly traceable to the challenged action;
b) the issue involved is purely a legal question; and
c) the administrative action is patently illegal 3. The injury is likely to be redressed by a favorable
amounting to lack or excess of jurisdiction; action. (Francisco, Jr. & Hizon v. Toll Regulatory Board,
d) there is estoppel on the part of the administrative G.R. Nos. 166910, October 19, 2010)
agency concerned;
e) there is irreparable injury; Legal personality
f) the respondent is a department secretary whose
acts as an alter ego of the President bear the GR: If there is no actual or potential injury, complainant has
implied and assumed approval of the latter; no legal personality to raise constitutional questions.
g) to require exhaustion of administrative remedies
would be unreasonable; XPN: If the question is of transcendental importance.
h) it would amount to a nullification of a claim;
i) the subject matter is a private land in land case Principle of Transcendental Importance is determined
proceedings; by: (CDO)
j) the rule does not provide a plain, speedy and
adequate remedy; or 1. The Character of the funds or other assets involved in
k) there are circumstances indicating the urgency of the case;
judicial intervention. (Diocese of Bacolod v. 2. The presence of a clear case of Disregard of a
COMELEC, G.R. No. 205728, January 21, 2015) constitutional or statutory prohibition by the public
respondent agency or instrumentality of the
NOTE: You can never reinstate a provision or law that has government;
been proved unconstitutional back in operation. (Sameer 3. The lack of any Other party with a more direct and
Overseas Placement v. Cabiles, G.R. No. 170139, August 05, specific interest in raising the questions being raised.
2014) (Francisco, et al., v. House of Representatives, Ibid.)

Ministerial duty of a sheriff NOTE: Given that petitioners allege “An interest in the
execution of the laws” and the “constitutional right to due
The duty of a sheriff is ministerial. A sheriff should not ask process”, they satisfy the requisite personal stake in the
for extra money to serve or execute the orders of a court. outcome of the controversy by merely being citizens of the
Once the decision of the court has become final and Republic considering that the issues are of transcendental
executory, it is MINISTERIAL. No discretion to delay or to and paramount importance – not only to the public but
advance its execution. (Litonjua v. Marcelino, A.M. No. P-18- also to the Bench and the Bar. As such, it should be
3865, October 09, 2018) resolved for the guidance of all.” (Garcillano v. HoR, G.R. No.
170338, December 23, 2008)
Anonymous Letters
The proceeding involves the assertion of a public right.
NOTE: The SC may act on an anonymous letter as long as (Francisco Jr. v. HoR, G.R. No. 160261, November 10, 2003)
what is involved are judges, justices, and employees of the
court. (Anonymous v. Ibarreta, A.M. No. P-19-3916, June 17, When the right to information is invoked. (AKBAYAN v.
2019) Aquino, G.R. No. 170516, July 16, 2008)

Concept of relativity of laws When freedom of expression, which has been considered
as “an issue of overarching significance to our society,” is
A law may be good at one point but under this concept, it involved. (Chavez v. Gonzales, G.R. No. 168338, February 15,
will change overtime. 2008)

a. REQUISITES OF JUDICIAL REVIEW (ALEN) NOTE: Transcendental importance is not allowed to be
invoked when issues/allegations raised require reception
Requisites of Judicial Review (A-L-E-N) of evidence. The General Rule is that the Supreme Court
not a trier of facts. (Gios-Samar v. Department of
1. Actual case or Controversy Transportation and Civil Aviation Authority of the
Philippines, G.R. No. 217158, March 12, 2019)
It involves a conflict of legal rights, assertion of opposite
legal claims susceptible of legal resolution. Rule on Taxpayer as Proper Party

2. Locus Standi An ordinary taxpayer, or a group of tax payers, can raise the
question of the validity of an appropriation law. “The
One who has sustained or is in immediate danger of transcendental importance to the public of these cases
sustaining an injury as a result of the act complained of. demands that they be settled promptly and definitely,
(People v. Vera, G.R. No. 45685November 16, 1937)

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Political Law
brushing aside technicalities of procedure.” (Araneta v. NOTE: The doctrine of operative fact does not always apply
Dinglasan, G.R. No. L-2044, August 26, 1949) and is not always the consequence of every declaration of
constitutional invalidity. It can be invoked only in situations
NOTE: The transcendental importance doctrine was first where the nullification of the effects of what used to be a
applied by the Supreme Court in Araneta v. Dinglasan valid law would result in inequity and injustice; but where
wherein the Court relaxed the rule on legal standing. no such result would ensue, the general rule that an
unconstitutional law is totally ineffective should apply.
3. Earliest opportunity
As a general rule, the nullification of an unconstitutional law
Constitutional question must be raised at the earliest or act carries with it the illegality of its effects. However, in
possible opportunity. cases where nullification of the effects will result in inequity
and injustice, the operative fact doctrine may apply.
GR: It must be raised in the pleadings. (Municipality of Tupi v Faustino, G.R. No. 231896, August 20,
2019 citing the ruling in Araullo v. Aquino, G.R. No. 209287,
XPNS: February 3, 2015)

In Criminal cases – It may be brought at any stage of the c. POLITICAL QUESTION DOCTRINE
proceedings according to the discretion of the judge (trial These are questions which, under the Constitution, are to be
or appeal) because no one shall be brought within the terms decided by the people in their sovereign capacity, or in
of the law who are not clearly within them and the act shall regard to which full discretionary authority has been
not be punished when the law does not clearly punish them. delegated to the legislative or executive branch of the
government. (Tañada v. Cuenco, G.R. No. L-10520, February
In Civil cases – It may be brought anytime if the resolution 28, 1957)
of the constitutional issue is inevitable in resolving the main
issue. Political Question Doctrine

In every case, when the jurisdiction of the lower court is in NOTE: The doctrine that the power of judicial review
question except when there is estoppel. (Tijam v. cannot be exercised when the issue is a political question. It
Sibonghanoy, G.R. No. L-21450, April 15, 1968) constitutes another limitation on such power of the
judiciary. (Tañada v. Cuenco, ibid.)
4. Necessity of deciding constitutional questions
Justiciable questions vs. Political questions
As long as there are other bases which courts can use for
decision, constitutionality of the law will not be touched, BASIS JUSTICIABLE POLITICAL QUESTIONS
thus, courts should refrain from resolving any QUESTIONS
constitutional issue "unless the constitutional question is Imply a given Questions which involve the
the lis mota of the case." right legally policy or the wisdom of the
demandable law or act, or the morality or
Lis mota means "the cause of the suit or action." Given the and efficacy of the same.
presumed validity of an executive act, the petitioner who enforceable, Generally it cannot be
claims otherwise has the burden of showing first that the an act or inquired into by the courts.
case cannot be resolved unless the constitutional question omission Further, these are questions
he raised is determined by the Court. (General v. Urro, G.R. violative of which under the
No. 191560, March 29, 2011) such right, Constitution:
and a remedy
Q: Claiming that he was “a concerned Filipino citizen granted and a. are decided by the people
and taxpayer” and he had “not suffered any personal Defi- sanctioned in their sovereign
injury” out of the controversy, Petitioner asked the SC nition by law for capacity; and
to “prohibit” the NTC from complying with Speaker said breach of b. where full discretionary
Cayetano and Alvarez’ letter urging the agency to grant right. authority has been
ABS-CBN provisional authority to operate while delegated by the
Congress has yet to decide on the latter’s franchise Constitution either to the
renewal. He averred that the letter violated the executive or legislative
doctrine of separation of powers of the state and department.
invoked the high court’s role in the system of checks
and balances. Did the petitioner have legal standing to
file the petition?

A: NO. Petitioner has no legal standing to sue. The petitioner
is too distant, his interest is too inchoate and speculative for
the Court to take cognizance of the case. (Gadon v. NTC, June
20, 2020) Effect of the expanded definition of judicial power on
the political question doctrine (1995, 1997, 2004 BAR)
b. OPERATIVE FACT DOCTRINE
The 1987 Constitution expands the concept of judicial
The implementation/enforcement of presidential decrees review. Under the expanded definition, the Court cannot
prior to their publication in the Official Gazette is an agree that the issue involved is a political question beyond
operative fact which may have consequences which cannot the jurisdiction of the court to review. When the grant of
be justly ignored. The past cannot always be erased by a power is qualified, conditional or subject to limitations, the
new judicial declaration that an all-inclusive statement of a issue of whether the prescribed qualifications or conditions
principle of absolute retroactive invalidity cannot be have been met or the limitations respected is justiciable—
justified. (Tañada v. Tuvera, G.R. No. L-63915, April 24, 1985) the problem being one of legality or validity, not its wisdom.
Moreover, the jurisdiction to delimit constitutional

2021 GOLDEN NOTES 2021 & 2022
Political Law
boundaries has been given to the SC. When political 1. All cases involving the constitutionality of a Treaty,
questions are involved, the Constitution limits the international or executive agreement, or law;
delimitation as to whether or not there has been a grave 2. All cases which under the Rules of Court may be
abuse of discretion amounting to lack or excess of required to be heard en banc;
jurisdiction on the part of the official whose action is being 3. All cases involving the constitutionality, application or
questioned. operation of Presidential decrees, proclamations,
orders, instructions, ordinances, and other
JUDICIAL AND BAR COUNCIL (JBC) regulations;
4. Cases heard by a Division when the required majority
a. COMPOSITION OF THE JBC in the division is not obtained;
5. Cases where the SC modifies or reverses a doctrine or
The creation of the JBC is intended to curtail the influence principle of law Previously laid either en banc or in
of politics in Congress in the appointment of judges, and the division;
understanding is that seven (7) persons will compose the 6. Administrative cases involving the discipline or
JBC. To broaden the scope of congressional representation dismissal of Judges of lower courts;
in the JBC is tantamount to the inclusion of a subject matter 7. Election contests for president or vice-president.
which was not included in the provision as enacted. (Chavez
v. Judicial and Bar Council, G.R. No. 202242, April 16, 2013) Q: Petitioner was sentenced to die by way of lethal
injection. He sought the issuance of a Temporary
b. POWERS OF THE JBC Restraining Order to move the date of his execution.
Functions of the JBC (2000 BAR) The Department of Justice opposed the petition since
the Decision had become final and executory, its
The principal function of the JBC is to recommend execution already entered the exclusive ambit of
appointees to the judiciary. It may, however, exercise such authority of the executive authority. The issuance of the
TRO may be construed as trenching on that sphere of
functions as the SC may assign to it. (1987 Constitution, Art. executive authority. Did the Supreme Court lose
VIII, Sec. 8) jurisdiction over execution of the decision against
Echegaray?
NOTE: The duty of the JBC to submit a list of nominees
before the start of the President’s mandatory 90-day period A: The rule on finality of judgment cannot divest the
to appoint is ministerial, but its selection of the candidates Supreme Court of its jurisdiction to execute and enforce the
whose names will be in the list to be submitted to the same judgment. There is a difference between the
President lies within the discretion of the JBC. (De Castro v. jurisdiction of the court to execute its judgment and its
JBC, G.R. No. 191002, March 17, 2010) jurisdiction to amend, modify or alter the same. The former
continues even after the judgment has become final for the
THE SUPREME COURT purpose of enforcement of judgment; the latter terminates
when the judgment becomes final.
1. COMPOSITION OF THE SUPREME COURT
In accord with this unquestioned jurisdiction, the Court has
promulgated rules concerning pleading, practice, and
1. Chief Justice
procedure which, among others, spelled out the rules on
2. 14 Associate Justices execution of judgments. These rules are all predicated on
the assumption that courts have the inherent, necessary,
Divisions of the SC and incidental power to control and supervise the process
of execution of their decisions. Rule 39 governs execution,
It may sit en banc or in its discretion, in divisions of three, satisfaction, and effects of judgments in civil cases. Rule 120
five, or seven members. [1987 Constitution, Art. VIII, Sec. governs judgments in criminal cases. This is a constitutional
4(1)] prerogative vested in the Supreme Court to ensure its
independence. The rules should not diminish, increase, or
modify substantive rights. (Echegaray v. Secretary of Justice,
Qualifications for appointments to the SC G.R. No. 132601, January 19, 1999)

1. Natural born citizen of the Philippines; CONSTITUTIONAL COMMISSIONS
2. At least 40 years of age; and
3. A judge of a lower court or engaged in the practice of Independent Constitutional Commissions:
law in the Philippines for 15 years or more. [1987
Constitution, Art. VIII, Sec. 7(1)] 1. Civil Service Commission (CSC)
2. Commission on Elections (COMELEC)
The members of the judiciary are appointed by the 3. Commission on Audit (CoA)
President of the Philippines from among a list of at least
three (3) nominees prepared by the Judicial and Bar Council Composition of the members

(JBC) for every vacancy.
1. CSC (3 letters = 3 members)
2. COMELEC (7 letters = 7 members)
NOTE: The appointment shall need no confirmation from 3. COA (3 letters = 3 members)
the Commission on Appointments. (1987 Constitution, Art.
VIII, Sec. 9) CIVIL SERVICE COMMISSION (CSC)

2. POWERS AND FUNCTIONS OF THE SUPREME COURT
The Civil Service embraces every branch, agency,
En Banc Decisions; Cases that should be heard by the SC subdivision, and instrumentality of the government,
en banc (T-Ru-P-Pre-Ju-D-e) including every government-owned or controlled
corporations whether performing governmental or

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Political Law
proprietary functions. [1987 Constitution, Art. IX-B, Sec. Bases of the constitutional guaranty of security of
2(1)] tenure in the civil service (1999, 2005 BAR)
The prohibition against suspension or dismissal of an
NOTE: Decisions by the CSC are to be appealed first to the officer or employee of the Civil Service “except for cause
Court of Appeals, whereas decisions by the COA are to be provided by law” is “a guaranty of both procedural and
appealed straight to the Supreme Court. substantive due process.” “Not only must removal or
suspension be in accordance with the procedure prescribed
Employees of the Philippine National Red Cross (PNRC) by law, but also they can only be made on the basis of a valid
are subject to the jurisdiction of the Civil Service cause provided by law.” (Land Bank of the Philippines
Commission v. Rowena O. Paden, G.R. No. 157607, July 7, 2009)

While the PNRC is sui generis, employees of the PNRC can be
COMMISSION ON ELECTIONS (COMELEC)
subject to the jurisdiction of the CSC because the PNRC
receives some form of subsidy in the Government.
Composition of the COMELEC
The sui generis character of PNRC requires us to approach
controversies involving the PNRC on a case-to-case basis. In 1. Chairman
this particular case, the CA did not err in ruling that the CSC
has jurisdiction over the PNRC because the issue at hand is 2. Six (6) Commissioners
the enforcement of labor laws and penal statutes, thus, in
this particular matter, the PNRC can be treated as a GOCC, NOTE: Term is seven (7) years without reappointment.
and as such, it is within the ambit of Rule I, Section 1 of the
Implementing Rules of Republic Act 6713. (Torres v. de If the appointment was ad interim, a subsequent renewal of
Leon, G.R. No. 199440, January 18, 2016) the appointment does not violate the prohibition on
reappointments because no previous appointment was
Constitutional Functions of the CSC
confirmed by the Commission on Appointments. The total

As the central personnel agency of the government, it: term of both appointments must not exceed the 7-year limit.
(Matibag v. Benipayo, G.R. No. 149036, April 2, 2002)
1. Establishes a career service;
2. Adopts measures to promote morale, efficiency, Qualifications
integrity, responsiveness, progressiveness and
courtesy in the Civil Service; 1. Natural-born citizen;
3. Strengthens the merits and rewards system; 2. At least 35 years old at the time of appointment;
4. Integrates all human resources and development
programs for all levels and ranks; and 3. College degree holder; and
5. Institutionalizes a management climate conducive to 4. Not a candidate in any election immediately preceding
public accountability. (1987 Constitution, Art. IX-B, Sec. the appointment.
3)

Composition of the CSC NOTE: Majority of the members, including the Chairman,
shall be members of the Philippine Bar who have been
1. Chairman; and engaged in the practice of law for at least ten years. [1987
2. Two Commissioners Constitution, Art. IX-C, Sec 1(1)]

The Chairman and the Commissioners shall be appointed by Constitutional powers and functions of the COMELEC
the President with the consent of the Commission on (1991, 1996, 2001 BAR)
Appointments for a term of seven years without
reappointment. [1987 Constitution, Art. IX-B, Sec 1(2)]
1. Enforce and administer all laws and regulations relative
Qualifications to the conduct of an election, plebiscite, initiative,
referendum, and recall.
1. Natural-born citizen;
2. At least 35 years old at the time of appointment; Note: COMELEC may order the correction of manifest
3. With proven capacity for public administration; and errors in the tabulation or tallying results during the
4. Not a candidate in any election immediately preceding canvassing and petitions for this purpose may be filed
the appointment. [1987 Constitution, Art. IX-B, Sec 1(1)] directly with the Commission even after the
proclamation of the winning candidates.
Classification

1. Career Service; and 2. Exercise:
2. Non-Career Service.
a. Exclusive original jurisdiction over all contests
Requisites for a CES employee to acquire security of relating to the election, returns and qualifications
tenure: of all elective:
i. Regional
i. CES eligibility; and ii. Provincial
ii. Appointment to the appropriate CES rank. (Señeres iii. City officials
v. Sabido, G.R. No. 172902, October 21, 2015.) b. Exclusive appellate jurisdiction over all contests
involving:
APPOINTMENTS TO THE CIVIL SERVICE
i. Elective municipal officials decided by trial
courts of general jurisdiction.

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Political Law
ii. Elective barangay officials decided by The dissatisfied party may file a motion for reconsideration
courts of limited jurisdiction. before the COMELEC en banc. If the en banc’s decision is still
c. Contempt powers not favorable, the same, in accordance with Sec. 7, Art. IX-A,
i. COMELEC can exercise this power only in “may be brought to the SC on certiorari within 30 days from
relation to its adjudicatory or quasi- receipt of copy thereof.” (Reyes v. RTCof Oriental Mindoro,
judicial functions. It cannot exercise this in G.R. No. 108886, May 5, 1995)
connection with its purely executive or
ministerial functions. NOTE: The fact that decisions, final orders or rulings of the
ii. If it is a pre-proclamation controversy, the COMELEC in contests involving elective municipal and
COMELEC exercises quasi- barangay offices are final, executory and not appealable,
judicial/administrative powers. (1987 Constitution, Art. IX-C, Sec. 2[2]) does not preclude
iii. Its jurisdiction over contests (after recourse to the SC by way of a special civil action of
proclamation), is in exercise of its judicial certiorari. (Galido v. COMELEC, G.R. No. 95346, January 18,
functions. 1991)

NOTE: The COMELEC may issue writs of certiorari, COMELEC can exercise its power of contempt in
prohibition, and mandamus in exercise of its connection with its functions as the National Board of
appellate functions. Canvassers during the elections
The effectiveness of a government institution vested with
3. Decide, except those involving the right to vote, all quasi-judicial power hinges on its authority to compel
questions affecting elections, including determination attendance of the parties and/or their witnesses in hearings
of the number and location of polling places, and proceedings. Suchlike, the COMLEC’s investigative
appointment of election officials and inspectors, and power to punish individuals who refuse to appear during a
registration of voters. fact-finding investigation, despite a previous notice and
order to attend, cannot be withheld, for it is an essential to
NOTE: Questions involving the right to vote fall within its constitutional mandate to secure the conduct of honest
the jurisdiction of ordinary courts. and credible elections. (Bedol v. COMELEC, G.R. No. 179830,
4. Deputize, with the concurrence of the President, law December 3, 2009)
enforcement agencies and instrumentalities of the
government, including the AFP, for the exclusive Function of Senate Electoral Tribunal (SET)
purpose of ensuring free, orderly, honest, peaceful and
credible elections. The SET has jurisdiction to entertain and resolve two types
5. Registration of political parties, organizations, or of electoral contests against a Member of the Senate: a)
coalitions and accreditation of citizens’ arms of the petition for quo warranto, and b) election protest. Mutually
COMELEC. exclusive, a petition for quo warranto cannot include an
6. File, upon a verified complaint, or on its own initiative, election protest, nor can an election protest include a
petitions in court for inclusion or exclusion of voters; petition for quo warranto.
investigate and, where appropriate, prosecute cases of
violations of election laws, including acts or omissions Any registered voter who seeks to disqualify a Member of
constituting election frauds, offenses and malpractices. the Senate on the ground of ineligibility or disloyalty to the
Republic of the Philippines must file a petition for quo
NOTE: The grant of exclusive power to investigate and warranto within ten (10) days from the respondent’s
prosecute cases of election offenses to the COMELEC proclamation. However, if the basis of ineligibility is on
was not by virtue of the Constitution but by the OEC citizenship, the petition may be filed any time during the
which was eventually amended by Sec. 43 of RA 9369. respondent’s tenure; if the ground is loss of the required
Thus, the DOJ now conducts preliminary investigation qualifications, the petition may be filed at any time during
of election offenses concurrently with the COMELEC the respondent’s tenure, as soon as the required
and no longer as mere deputies. (Jose Miguel T. Arroyo qualification is lost. The petitioner may not be a candidate,
v. DOJ, et al., G.R. No. 199082, September 18, 2012) unlike in an election protest, which is filed only by a
candidate who duly filed a certificate of candidacy and had
7. Recommend to the Congress effective measures to been voted for the office of Senator. In an election protest,
minimize election spending, including limitation of the filing period is thirty (30) days from prostester’s
places where propaganda materials shall be posted, proclamation.
and to prevent and penalize all forms of election frauds,
offenses, malpractices, and nuisance candidacies. Under the 2013 Rules of the Tribunal, joint election protests
8. Recommend to the President the removal of any officer are not allowed, but for good and sufficient reasons, the
or employee it has deputized, or the imposition of any Tribunal may order the consolidation of individual protests,
other disciplinary action, for violation or disregard of, hear, and decide them jointly.
or disobedience to its directive, order, or decision.
9. Submit to the President and the Congress a COMMISSION ON AUDIT (COA)
comprehensive report on the conduct of each election,

plebiscite, initiative, referendum, or recall. Powers and duties of COA

Remedy of a dissatisfied party in election cases decided 1. Examine, audit and settle all accounts pertaining to
by the COMELEC in division revenue and receipts of, and expenditures or uses of


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Political Law
funds and property owned or held in trust or 2. To remove from them any temptation to take
pertaining to government. advantage of their official positions for selfish
2. Keep general accounts of government and preserve purposes.
vouchers and supporting papers. (2019 BAR)
3. Authority to define the scope of its audit and Q: Can President Arroyo appoint CSC Chairman Duque
examination, establish techniques and methods III as a concurrent GOCC Board Member?
required therein.
4. Promulgate accounting and auditing rules and A: NO. When the CSC Chairman sits as a member of the
regulations, including those for prevention and governing Boards of the GSIS, PHILHEALTH, ECC and
disallowance. (1987 Constitution, Art. IX-D, Sec. 2) HDMF, he may exercise powers and functions, which are not
anymore derived from his position as CSC Chairman, and
NOTE: Decisions by the CSC are to be appealed first to the receive per diem, a form of additional compensation that is
Court of Appeals, whereas decisions by the COA are to be disallowed by the concept of an ex officio position by virtue
appealed straight to the Supreme Court. of its clear contravention of the proscription set by Section
2, Article IX-A of the 1987 Constitution. This situation goes
Q: Is the Boy Scouts of the Philippines subject to audit against the principle behind an ex officio position, and must,
by the Commission on Audit? therefore, be held unconstitutional. (Funa v. Duque III, G.R.
No. 191672, November 25, 2014)
A: Yes, it is. Historically, the BSP had been subjected to
government audit in so far as public funds had been infused LAW ON PUBLIC OFFICERS
thereto. However, this practice should not preclude the
exercise of the audit jurisdiction of COA, clearly set forth Public office
under the Constitution. Since the BSP, under its amended
charter, continues to be a public corporation or a It is the right, authority, and duty created and conferred by
government instrumentality, it is subject to the exercise by law, by which for a given period, either fixed by law or
the COA of its audit jurisdiction in the manner consistent enduring at the pleasure of the creating power, an
with the provisions of the BSP Charter. (Boy Scouts of the individual is invested with some portion of the sovereign
Philippines v. Commission on Audit, G.R. No. 177131, June 7, functions of the government, to be exercised by him for the
2011) benefit of the public. (Fernandez v. Sto. Tomas, G.R. No.
116418, March 7, 1995)
Three Step Rule
Characteristics of public office (P3VN)
Item 15 of CSC Memorandum Circular No. 3, Series of 2001
on the three-salary-grade rule states that "[a]n employee 1. It is a Public trust – The principle of “public office is a
may be promoted or transferred to a position which is not public trust” means that the officer holds the public
more than three (3) salary, pay or job grades higher than office in trust for the benefit of the people—to whom
the employee's present position x x x[.]" However, this rule such officers are required to be accountable at all times,
is subject to the exception of "very meritorious cases." and to serve with utmost responsibility, loyalty, and
efficiency, act with patriotism and justice, and lead
If the current Salary Grade (SG) is 15, the maximum modest lives. (1987 Constitution, Art. XI, Sec. 1)
promotion is SG 18. In this case, Rebong was not allowed to
take the position. Upon review, the Court of Appeals 2. It is not a Property and is outside commerce of man. It
allowed the appointment. cannot be the subject of a contract. The concept "public
office is not a property” means that no officer can
SC held that Rebong falls within the exception of “very acquire vested right in the holding of a public office, nor
meritorious cases”. Rebong fits all the qualifications. He is can his right to hold the office be transmitted to his
the best candidate for the supervisory position. (Civil heirs upon his death. Nevertheless, the right to hold a
Service Commission vs. Rebong, G.R. No. 215932, June 03, public office is a protected right – secured by due
2019) process and the provision of Constitution on security of
tenure. (Santos v. Secretary of Labor, G.R. No. L-21624,
PROHIBITED OFFICES & INTERESTS February 27, 1968)

No member of a Constitutional Commission shall, during his 3. It is Personal to the public officer – It is not a property
tenure: transmissible to the heirs of the officer upon the latter’s
death. (Santos v. Secretary of Labor, G.R. No. L-21624,
1. Hold any other office or employment; February 27, 1968)
2. Engage in the practice of any profession;
3. Engage in the active management and control of any 4. It is not a Vested right.
business which in any way may be affected by the
function of his office; or NOTE: However, right to a public office is nevertheless
a protected right. It cannot be taken from its incumbent
4. Be financially interested, directly or indirectly, in any without due process. (Morfe v. Mutuc, G.R. No. L-20387,
contract with, or in any franchise or privilege granted January 31, 1968; Aparri v. CA, G.R. No. L-30057, January.
by the Government, any of its subdivisions, agencies or 31, 1984)
instrumentalities, including GOCCs or their
subsidiaries. (1987 Constitution, Art. IX-A, Sec. 2) 5. It is not a Natural right – Under our political system, the
(1998, 2015 BAR) right to hold public office exists only because and by
virtue of some law expressly or impliedly creating and
Purpose conferring it.

1. To compel the chairmen and members of the Elements of a public office (CALIC)
Constitutional Commissions to devote their full
attention to the discharge of their duties; and 1. Created by Constitution or by law or by some body or

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Political Law
agency to which the power to create the office has been It belongs to where the people have chosen to place it by
delegated; their Constitution or laws. (63C Am. Jur. 2d Public Officers
2. Vested with Authority to exercise some portion of the and Employees 738, 1997)
sovereign power of the State;
3. The powers conferred and the duties to be discharged 2. Entrusted to designated elected and appointed public
must be defined directly or impliedly by the Legislature officials.
or through legislative authority;
4. Duties are performed Independently without control The appointment of public officials is generally looked upon
unless those of a subordinate; and as properly belonging to the executive department.
5. Continuing and permanent. (Fernandez v. Sto. Tomas, Appointments may also be made by Congress or the courts,
G.R. No. 116418, March 7, 1995; Tejada v. Domingo, G.R. but when so made should be taken as an incident to the
No. 91860, January 13, 1992) discharge of functions within their respective spheres.
MODES AND KINDS OF APPOINTMENT (Government v. Springer, 50 Phil. 259, affirmed in Springer v.
Government, 277 U.S. 189, 72 Ed. 845, 48 S.CT. 480 [1928])
Appointment NOTE: The general rule is that the appointing power is the
exclusive prerogative of the President, upon which no
The act of designation by the executive officer, board, or limitations may be imposed by Congress, except those
body to whom that power has been delegated, the resulting from the need of securing the concurrence of the
individual who is to exercise the powers and functions of a Commission of Appointments and from the exercise of the
given office. It refers to the nomination or designation of an limited power to prescribe the qualifications or
individual to an office. (Borromeo v. Mariano, G.R. No. L- disqualifications to a given appointive office. (Rafael v.
16808, January 3, 1921) Embroidery and Apparel Control and Inspections Board, G.R.
No. L-19978, September 29, 1967)
It is, in law, equivalent to “filling a vacancy”. (Conde v.
National Tobacco Corp., G.R. No. L-11985, January 28, 1961) Where the law is silent as to who is the appointing
authority, it is understood to be the President of the
NOTE: It is a basic precept in the law of public officers that Philippines. (Rufino v. Endriga, G.R. No. 139554, July 21,
no person, no matter how qualified and eligible he is for a 2006)
certain position, may be appointed to an office which is not
vacant. There can be no appointment to a non-vacant Absent any contrary statutory provision, the power to
position. The incumbent must first be legally removed, or appoint carries with it the power to remove or discipline.
his appointment validly terminated before one could be (Aguirre, Jr. v. De Castro, G.R. No. 127631, December 17,
validly installed to succeed him. (Garces v. Court of Appeals, 1999)
G.R. No. 114795, July 17, 1996)
Appointee’s acceptance of office
Nature of appointment
GR: An appointee’s acceptance of office is not necessary to
Appointment is an essentially discretionary power and complete or to make the appointment valid where there is
must be performed by the officer in which it is vested no provision of law to the contrary.
according to his best lights, the only condition being that the
appointee should possess the qualifications required by XPN: Acceptance, however, is necessary to enable the
law. If he does, then the appointment cannot be faulted on appointee to have full possession, enjoyment, and
the ground that there are others better qualified who responsibility of an office. (Borromeo v Mariano, G.R. No. L-
should have been preferred. This is a political question 16808, January 3, 1921; Lacson v. Romero, G.R. No. L-3081,
involving considerations of wisdom which only the October 14, 1949)
appointing authority can decide. (Luego v. CSC, G.R. No. L-
69137, August 5, 1986) NOTE: An appointee cannot impose his own conditions for
the acceptance of a public office. He may only either accept
Appointment vs. Designation or decline it. (De Leon, 2014)

APPOINTMENT DESIGNATION Kinds of Appointments
It is the selection by the It connotes merely the
proper authority of an imposition by law of 1. Permanent – An appointment in the civil service issued
individual who is to exercise additional duties on an to a person who meets all the requirements for the
the functions of a given incumbent official. position to which he is being appointed, including the
office. appropriate eligibility prescribed, in accordance with
It connotes permanence. Shall hold the office only in the provisions of law, rules and standards promulgated
When completed, usually a temporary capacity and in pursuance thereof. It lasts until lawfully terminated,
with its confirmation, maybe replaced at will by thus, enjoys security of tenure. [P.D. 807 (Civil Service
appointment results in the appointing authority. It Decree), Sec. 25(a)]
security of tenure unless he does not confer security of
is replaceable at the tenure in the person 2. Temporary – A kind of appointment issued to a person
pleasure because of the named. who meets all the requirements for the position to
nature of his office. which he is being appointed, except the appropriate
Essentially executive in Legislative in nature. civil service eligibility, in the absence of appropriate
nature. eligibilities and it becomes necessary in the public
(Binamira v. Garrucho, G.R. (Binamira v. Garrucho, G.R. interest to fill a vacancy. [P.D. 807, Sec. 25(b)]
No. 92008, July 30, 1990) No. 92008, July 30, 1990)
NOTE: Temporary appointment shall not exceed 12
Appointing authority months, but the appointee may be replaced sooner if a
qualified civil service eligible becomes available. [P.D.
1. Inherently belongs to the people. 807, Sec. 25(b)]


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Political Law
One who holds a temporary or acting appointment has An acting appointment is merely temporary. (Sevilla v. CA,
no fixed tenure of office, and, therefore, his enjoyment G.R. No. 88498, June 9, 1992) A temporary appointment
can be terminated at the pleasure of the appointing cannot become a permanent appointment, unless a new
power even without hearing or cause. (Erasmo v. Home appointment, which is permanent, is made. (Marohombsar
Insurance & Guaranty Corporation, G.R. No. 139251, v. Alonto, G.R. No. 93711, February 25, 1991)
August 29, 2002)
However, if the acting appointment was made because of a
However, if the appointment is for a specific period, the temporary vacancy, the temporary appointee holds office
appointment may not be revoked until the expiration of until the assumption of office by the permanent appointee.
the term. In such case, this temporary appointment cannot be used by
the appointing authority as an argument or justification in
NOTE: Acquisition of civil service eligibility will not order to evade or avoid the security of tenure principle
automatically convert the temporary appointment into provided for under the Constitution and the Civil Service
a permanent one. (Prov. of Camarines Sur v. CA, G.R. No. Law. (Gayatao v. CSC, G.R. No. 93064, June 22, 1992)
104639, July 14, 1995)
POWERS AND DUTIES OF PUBLIC OFFICERS
3. Provisional appointment – One which may be issued,
upon the prior authorization of the Commissioner of the Sources of powers of public officers
CSC, to a person who has not qualified in an appropriate
examination but who otherwise meets the requirements 1. Expressly conferred upon him by the Act appointing
for appointment to a regular position in the competitive him;
service, whenever a vacancy occurs and the filling
2. Expressly annexed to the office by law; and
thereof is necessary in the interest of the service and
there is no appropriate register of eligibles at the time of 3. Attached to the office by common law as incidents to it.
appointment. (Jimenea v. Guanzon, G.R. No. L-24795,
January 29, 1968) NOTE: In general, the powers and duties of public officers
are prescribed by the Constitution or by statute or both.
Temporary Appointment vs. Provisional Appointment Public officers have only those powers expressly granted or
(1994 BAR) necessarily implied by law. If broader powers are desirable,
they must be conferred by the proper authority. They
TEMPORARY PROVISIONAL cannot merely be assumed by administrative officers, nor
APPOINTMENT APPOINTMENT
can they be created by the courts in the proper exercise of
Issued to a person to a Issued upon to the prior
position needed only for a authorization of CSC. [Sec their judicial functions. [63C Am. Jur. 2d Public Officers and
limited period not 24(e), Civil Service Act of Employees 883 (1997)]
exceeding twelve months. 1959]
[Sec 24(d), Civil Service Act RIGHTS OF PUBLIC OFFICERS
of 1959]
Necessary in the public Vacancy occurs and the filing Rights and privileges of public officers
interest to fill the vacancy. thereof is necessary in the
Right to: (O-C-A-Va-Ma-Re-Lo-P-Se-P)
interest of the service &
there is no appropriate
register of eligible at the time 1. Office;
of appointment. 2. Compensation/salary;
Meets all requirements for Has not qualified in an 3. Appointment;
position except civil appropriate examination but 4. Vacation and sick leave;
service eligibility. [Sec otherwise meets 5. Maternity leave;
25(b), Civil Service Act of requirements for 6. Retirement pay;
1959] appointment to a regular 7. Longevity pay;
position. 8. Pension;
9. Self-organization; and
NOTE: Provisional appointments in general have already 10. Protection of temporary employees.
been abolished by R.A. 6040. However, it still applies with
regard to teachers under the Magna Carta for Public School Prohibition against diminution of salary of
Teachers. constitutional officers

4. Regular appointment – One made by the President Congress is given the power to fix the salaries of certain
while Congress is in session, takes effect only after constitutional officers, but after it has done so, it may not
confirmation by the Commission on Appointments and, reduce the salary of any of them during his term or tenure.
once approved, continues until the end of the term of This provision is intended to secure their independence.
the appointee. [1987 Constitution, Art. IX (A), Sec. 3]

Mere eligibility for optional retirement at the time of death,
5. Ad interim appointment– One made by the President
while Congress is not in session, which takes effect not actual retirement, suffices to grant survivorship
benefits upon the bereaved surviving spouse of a deceased
immediately, but ceases to be valid if:
a. Disapproved by the CA; or magistrate. Even if so declared ineligible for said optional
b. Upon the next adjournment of Congress, either in retirement, there is established ground to deem the former
regular or special session, the CA has not acted Chief Justice as involuntarily retired due to the events
upon it. (1990, 1994 BAR) immediately following his ouster by impeachment. As Chief
Justice Corona had met the qualifications for an optional
Acting Appointment (2003 BAR) retirement, his widow, who likewise possesses none of the
disqualifications under AC No. 81-2010 for entitlement,
must be consoled by the grant of the benefits that are legally

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Political Law
accorded to her as a surviving legitimate spouse of a negligent subordinates, overwork, multiple assignments or
magistrate under RA 9946. (Re: Letter of Mrs. Ma. Cristina positions, or plain incompetence—is suddenly swept into a
Roco Corona Requesting The Grant Of Retirement And Other conspiracy conviction simply because he did not personally
Benefits To The Late Former Chief Justice Renato C. Corona examine every single detail, painstakingly trace every step
And Her Claim For Survivorship Pension As His Wife Under from inception, and investigate the motives of every person
Republic Act No. 994, A.M. No. 20-07-10-SC, January 12, 2021) involved in a transaction before affixing his signature as the
final approving authority.
LIABILITIES OF PUBLIC OFFICERS
All heads of offices have to rely to a reasonable extent on
GR: A public officer is not liable for injuries sustained by their subordinates and on the good faith of those who
another due to official acts done within the scope of prepare bids, purchase supplies, or enter into negotiations.
authority. There has to be some added reason why he should examine
each voucher in such detail. (Arias v. Sandiganbayan, G.R.
XPNs: No. 81563, December 19, 1989)
1. Otherwise provided by law;
2. Statutory liability; (New Civil Code, Articles 27, 32, 34); NOTE: It must include certification from the subordinate
3. Presence of bad faith, malice, or negligence; and the supporting documents, otherwise Arias doctrine
cannot be upheld.
NOTE: Absent of any showing of bad faith or malice, every
public official is entitled to the presumption of good faith as NOTE: The ruling in Arias v. Sandiganbayan that heads of
well as regularity in the performance or discharge of official offices may rely to a certain extent on their subordinates is
duties. (Blaquera v. Alcala, G.R. No. 109406, September 11, not automatic. As held in Cesa v. Office of the Ombudsman,
1998) when there are facts that point to an irregularity and the
officer failed to take steps to rectify it, even tolerating it, the
4. Liability on contracts entered into in excess or without Arias doctrine is inapplicable. (Ombudsman v. de los
authority; and Reyes, G.R. No. 208976, October 13, 2014, as penned by J.
5. Liability on tort if the public officer acted beyond the LEONEN)
limits of authority and there is bad faith. (USA v. Reyes,
G.R. No. 79253, March 1, 1993) Condonation Doctrine
Three-fold responsibility/liability of public officers
The condonation doctrine connotes a complete
1. Criminal liability; extinguishment of liability of a public officer or “denying the
2. Civil liability; and right to remove one from office because of misconduct
3. Administrative liability. during a prior term.”

Liabilities of ministerial officers (MNM) Prospective application of the doctrine

1. Non-feasance – It is the neglect to perform an act which Under the new ruling, the Supreme Court simply finds no
is the officer's legal obligation to perform. legal authority to sustain the condonation doctrine in this
2. Misfeasance – The failure to observe the proper degree jurisdiction. The abandonment of the condonation doctrine
of care, skill, and diligence required in the performance should be prospective in application for the reason that
of official duty; and judicial decisions applying or interpreting the laws or the
3. Malfeasance – It refers to the performance of an act Constitution, until reversed, shall form part of the legal
which the officer had no legal right to perform. system of the Philippines. (Carpio-Morales v. CA, G.R. No.
217126-27, November 10, 2015)
NOTE: The plaintiff must show that he has suffered an
injury, and that it results from a breach of duty which the The condonation doctrine would not apply to appointive
officer owed him. officials since, as to them, there is no sovereign will to
disenfranchise. (Carpio-Morales v. CA, ibid.)
Command Responsibility Doctrine (L-R-O-A-R)
NOTE: RA 9184 is a law requiring the conduct of bidding
A superior officer is liable for the acts of his subordinate in (award of contracts based on bidding). Meanwhile under
the following instances: Sec. 85, of PD 1445 there are two requisites before private
entity can enter into contracts with the government:
1. He negligently or willfully employs or Retains unfit or
incompetent subordinates; 1. No contract involving the expenditure of public funds
2. He negligently or willfully fails to Require his shall be entered into unless there is an appropriation
subordinates to conform to prescribed regulations; therefor, the unexpended balance of which, free of
3. He negligently or carelessly Oversees the business of other obligations, is sufficient to cover the proposed
the office as to give his subordinates the opportunity expenditure.
for default;
4. He directed, cooperated, or Authorized the wrongful 2. Notwithstanding this provision, contracts for the
act; or procurement of supplies and materials to be carried in
5. The Law expressly makes him liable. (E.O. No. 292, stock may be entered into under regulations of the
Administrative Code of 1987, Book I, Chap. 9, Sections 38 Commission provided that when issued, the supplies
and 39) and materials shall be charged to the proper
appropriation account.
Arias Doctrine
Concept of passive recipient
The head of office is not required to examine every single
detail of any transaction from its inception until it is finally The requisites in appreciating good faith on the part of
approved. We would be setting a bad precedent if a head of officers responsible for the disallowed disbursement, are:
office plagued by all too common problems—dishonest or (1) they acted in good faith believing that they could

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disburse the disallowed amounts based on the provisions of Steps in the impeachment process (2012 BAR)
the law; and (2) that they lacked knowledge of facts or
circumstances which would render the disbursement Constitution provides that the House of Representatives
illegal, such when there is no similar ruling by this Court shall have the exclusive power to initiate all cases of
prohibiting a particular disbursement or when there is no impeachment. (Sec. 3(1), Art. XI, 1987 Constitution)
clear and unequivocal law or administrative order barring
the same. (Balayan Water District vs COA, G.R. No. 229780, 1. Initiating impeachment case
January 22, 2019) a. Verified complaint filed by any member of the
House of Representatives or any citizen upon
Impeachment resolution of endorsement by any member thereof;

It is a method of national inquest into the conduct of public NOTE: If the verified complaint is filed by at least
men. It is an extraordinary means of removal exercised by 1/3 of all the members of the House of
the legislature over a selected number of officials, the Representatives, the same shall constitute the
purpose being to ensure the highest care in their indictment Articles of Impeachment, and trial by the Senate
and conviction and the imposition of special penalties in shall forthwith proceed. [1987 Constitution, Art. XI,
case of finding a guilt, taking into account the degree or Sec. 3 (4)]
nature of the offense committed and the high status of the
wrongdoers. (Cruz and Cruz, Philippine Political Law, 2014) b. Inclusion in the Order of Business within 10
session days;
Impeachable officers c. Referred to the proper committee within 3 session
days from its inclusion;
1. President; d. The committee, after hearing, and by majority vote
2. Vice-President; of all its members, shall submit its report to the
3. Members of the Supreme Court; House of Representatives together with the
4. Members of the Constitutional Commissions; and corresponding resolution within 60 session days of
5. Ombudsman. such referral;
e. Placing on calendar the Committee resolution
NOTE: The enumeration is exclusive. (1987 Constitution, within 10 days from submission;
Art. XI, Sec. 2) f. Discussion on the floor of the report; and
g. A vote of at least 1/3 of all the members of the
Grounds for impeachment (CTB-GOB) (1999, 2012, House of Representatives shall be necessary either
2013 BAR) to affirm a favorable resolution with the Articles of
Impeachment of the committee or override its
1. Culpable violation of the Constitution; contrary resolution. [(1987 Constitution, Art. XI, Sec.
2. Treason; 3 (2-3)]
3. Bribery;
4. Graft and Corruption; 2. Trial and Decision in impeachment proceedings
5. Other high crimes; and a. The Senators take an oath or affirmation; and
6. Betrayal of public trust (1987 Constitution, Art. XI, Sec.
2) NOTE: When the President of the Philippines shall
be impeached, the Chief Justice of the Supreme
NOTE: The enumeration is exclusive. Court shall preside, otherwise the Senate President
shall preside in all other cases of impeachment.
Culpable violation of the Constitution (Senate Resolution No. 890)

It refers to wrongful, intentional or willful disregard or b. A decision of conviction must be concurred in by at
flouting of the fundamental law. Obviously, the act must be least 2/3 of all the members of Senate.
deliberate and motivated by bad faith to constitute a ground
for impeachment. NOTE: The power to impeach is essentially a non-legislative
prerogative and can be exercised by Congress only within
Betrayal of public trust the limits of the authority conferred upon it by the
Constitution. (Gutierrez v. House of Representatives
This refers to “acts which are just short of being criminal but Committee on Justice, G.R. No. 193459, February 15, 2011)
constitute gross faithlessness against public trust, tyrannical
abuse of power, inexcusable negligence of duty, favoritism, The Senate has the sole power to try and decide all cases of
and gross exercise of discretionary powers.” Acts that should impeachment. [1987 Constitution, Art. XI, Sec. 3(6)] Hence,
constitute betrayal of public trust as to warrant removal from judgment in an impeachment proceeding is normally not
office may be less than criminal but must be attended by bad subject to judicial review.
faith and of such gravity and seriousness as the other grounds
for impeachment. (Gonzales III v. Office of the President, G.R. XPN: Courts may annul the proceedings if there is a showing
No. 196231, September 4, 2012) of a grave abuse of discretion or non-compliance with the
procedural requirements of the Constitution.
A new ground was added as a catch-all to cover all manner of
offenses unbecoming a public functionary but not punishable One-year bar rule (2014 BAR)
by criminal statutes like (BIT):
Once an impeachment complaint has been initiated in the
1. Inexcusable negligence of duty foregoing manner, another may not be filed against the
2. Tyrannical abuse of authority same official within a one-year period. [Gutierrez v. HoR
3. Breach of official duty by malfeasance or misfeasance, Committee on Justice, ibid.; 1987 Constitution, Art. XI, Sec.
cronyism, favoritism, obstruction of duty. (Cruz, 3(5)]
Philippine Political Law)
Purpose of the one-year bar rule

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eligible, or that there was want of power in the electing

1. To prevent undue or too frequent harassment; and body, or that there was some other defect or irregularity in
2. To allow the legislature to do its principal task of its exercise, wherein such ineligibility, want of power, or
legislation. (Francisco v. House of Representatives defect being unknown to the public.
supra.)
De jure officer vs. De facto officer
Effects of conviction in impeachment (2012 BAR)
(L-D-R) DE JURE OFFICER DE FACTO OFFICER
Has lawful title to the Has possession of and
1. Removal from office; office. performs the duties under a
2. Disqualification to hold any other office under the colorable title without being
Republic of the Philippines; and technically qualified in all
3. Party convicted shall be liable and subject to points of law to act.
prosecution, trial and punishment according to law. Holding of office rests Holding of office rests on
[1987 Constitution, Art. XI, Sec. 3 (7)] on right. reputation.
Officer cannot be Officer may be ousted in a
IMMUNITY OF PUBLIC OFFICERS removed through a direct proceeding against
direct proceeding (quo him.
It is an exemption that a person or entity enjoys from the warranto).
normal operation of the law such as a legal duty or liability,
either criminal or civil.
De facto officer vs. Usurper
Immunity of public officers from liabilities to third
persons USURPER
DE FACTO OFFICER
(2000 Bar)
It is well-settled, as a general rule, that public officers of the
government, in the performance of their public functions, Complies with the 3 elements of a de jure Takes
are not liable to third persons, either for the misfeasances officer, namely: possession of
or positive wrongs, or for the non-feasances, negligence, or an office and
omissions of duty of their official subordinates. (McCarthy v. 1. Existence of a de jure office; does official
Aldanese, G.R. No. L-19715, March 5, 1923) 2. Must possess the legal acts without
qualifications for the office in any actual or
Applicability of the doctrine question; and apparent
3. Must have qualified himself to authority.
This doctrine is applicable only whenever a public officer is perform the duties of such office
in the performance of his public functions. On the other according to the mode prescribed
hand, this doctrine does not apply whenever a public officer by law.
acts outside the scope of his public functions. Has color of right or title to office. Has neither
color of right
NOTE: A public officer enjoys only qualified, NOT absolute or title to
immunity. office.

Distinction between official immunity and State Acts are rendered valid as to the public Acts are
immunity until his title is adjudged insufficient. absolutely
void.
STATE IMMUNITY OFFICIAL IMMUNITY
Principle of Concept of Municipal Law. GR: The rightful incumbent of a public Not entitled to
International Law. office may recover from an officer de compensation
Availed of by States Availed of by public officials facto the salary received by the latter
against an against the members of the during the time of his tenure even
international court or public. though he entered into the office in
tribunal. good faith and under color of title.
The purpose is to To protect the public official
protect the assets of from liability arising from XPN:
Where there is no de jure public officer,
the State from any negligence in the performance
the officer de facto who in good faith has
judgment. of his discretionary duties.
had possession of the office and has
discharged the duties pertaining
NOTE: When public officials perform purely ministerial thereto, is legally entitled to the
duties, however, they may be held liable.
emoluments of the office, and may, in an

appropriate action, recover the salary,
DE FACTO AND DE JURE OFFICERS fees and other compensations attached
to the office. (Gen. Manager, Philippine
De jure officer Ports Authority v. Monserate, G.R. No.
129616, April 17, 2002)
A de jure officer is one who is in all respects legally
appointed or elected and qualified to exercise the office.
TERMINATION OF OFFICIAL RELATION
De facto officer (2000, 2004, 2009, 2010 BAR)
Modes of terminating official relationships
A de facto officer is one who assumed office under the color
of a known appointment or election but which appointment 1. Expiration of term or tenure;
or election is void for reasons that the officer was not 2. Reaching the age limit for retirement;
3. Resignation;

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Political Law
4. Recall; absolutely vacates the first office. That the second office is
5. Removal; inferior to the first does not affect the rule.
6. Abandonment;
7. Acceptance of an incompatible office; Termination of official relationship through conviction
8. Abolition of office; by final judgment
9. Prescription of the right to office;
10. Impeachment; When the penalty imposed carries with it the accessory
11. Death; penalty of disqualification.
12. Failure to assume office;
13. Conviction of a crime; or Quo Warranto
14. Filing of a COC.
It is a proceeding or writ issued by the court to determine
NOTE: Appointive officials, active members of the Armed the right to use an office, position or franchise and to oust
Forces of the Philippines, and officers and employees of the the person holding or exercising such office, position or
GOCCs, shall be resigned from his office upon the filing of franchise if his right is unfounded or if a person performed
his COC. (Quinto v. COMELEC, G.R. No. 189698, February 22, acts considered as grounds for forfeiture of said exercise of
2010,) position, office, or franchise.

Elective officials shall continue to hold office, whether he is NOTE: It is commenced by a verified petition brought in the
running for the same or a different position. (Fair Elections name of the Republic of the Philippines or in the name of the
Act, Sec. 14 expressly repealed B.P. Blg. 881, Sec. 67) person claiming to be entitled to a public office or position
usurped or unlawfully held or exercised by another. (Rules
Resignation (2000 BAR) of Court, Rule 66, Sec. 1)

It is the act of giving up or declining a public office and One-year prescriptive period applies only to private
renouncing the further right to use such office indefinitely. individuals
In order to constitute a complete and operative act of
resignation, the officer or employee must show a clear The long line of cases decided by this Court since the 1900's,
intention to relinquish or surrender his position which specifically explained the spirit behind the rule
accompanied by an act of relinquishment. Resignation providing a prescriptive period for the filing of an action for
implies of the intention to surrender, renounce, relinquish quo warranto, reveals that such limitation can be applied
the office. (Estrada v. Desierto, G.R. No. 146738, March 2, only against private individuals claiming rights to a public
2001) office, not against the State. (Republic vs. Sereno, G.R. No.
237428, June 19, 2018)
It must be in writing and accepted by the accepting
authority as provided for by law. Quo warranto under Rule 66 vs. Quo warranto in
electoral proceedings
Removal
QUO WARRANTO IN
It refers to the forcible and permanent separation of the QUO WARRANTO UNDER
ELECTORAL
incumbent from office before the expiration of the public RULE 66
PROCEEDINGS
officer's term. (Feria, Jr. v. Mison, G.R. No. 8196, August 8, The issue is legality of the The issue is eligibility of
1989) occupancy of the office by the person elected.
virtue of a legal appointment.
Recall Grounds: usurpation, Grounds: ineligibility or
forfeiture, or illegal disqualification to hold
It is an electoral mode of removal employed directly by the association. (Rules of Court, the office. (OEC, Sec. 253)
people themselves through the exercise of their right of Rule 66, Sec. 1)
suffrage. It is a political question not subject to judicial Presupposes that the Petition must be filed
review. It is a political question that has to be decided by the respondent is already within 10 days from the
people in their sovereign capacity. (Evardone v. COMELEC, actually holding office and proclamation of the
G.R. No. 94010, December 2, 1991) action must be commenced candidate.
within one year from cause of
NOTE: Recall only applies to local officials. ouster or from the time the
right of petitioner to hold
Abandonment (2000 BAR) office arose.
Petitioner is person entitled Petitioner may be any
It is the voluntary relinquishment of an office by the holder to office. voter even if he is not
with the intention of terminating his possession and control entitled to the office.
thereof. Person adjudged entitled to Actual or compensatory
the office may bring a damages are recoverable
Q: Does the acceptance of an incompatible office ipso separate action against the in quo warranto
facto vacate the other? respondent to recover proceedings under the
damages. (Rules of Court, Rule OEC.
A: GR: Yes. 66, Sec. 11)

XPN: Where such acceptance is authorized by law. ACCOUNTABILITY OF PUBLIC OFFICERS

NOTE: It is contrary to the policy of the law that the same Public office is a public trust. Public officers and employees
individual should undertake to perform inconsistent and must, at all times, be accountable to the people, serve them
incompatible duties. He who, while occupying one office, with utmost responsibility, integrity, loyalty, and efficiency;
accepts another incompatible with the first, ipso facto, act with patriotism and justice, and lead modest lives.
(Section 1, Article XI, 1987 Constitution)

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Political Law
The Ombudsman shall enjoy fiscal autonomy. Its approved

Types of Accountability annual appropriations shall be automatically and regularly
released. (1987 Constitution, Art. XI, Sec. 14)
1. Administrative
2. Criminal Q: May Secretary Lopez who was issued an ad interim
appointment by the President continue to discharge
ADMINISTRATIVE ACCOUNTABILITY OF PUBLIC her duties after the Commission on Appointments
OFFICERS rejected her nomination?

Disciplinary Action A: NO. Secretary Lopez can no longer discharge her duties
despite having issued an ad interim appointment by the
It is a proceeding, which seeks the imposition of disciplinary President once the Commission on Appointments rejected
sanction against, or the dismissal or suspension of, a public her nomination. An ad interim appointment is a permanent
officer or employee on any of the grounds prescribed by law appointment because it takes effect immediately and can no
after due hearing. longer be withdrawn by the President once the appointee
has qualified into office. The fact that it is subject to
Availability of appeal in administrative disciplinary confirmation by the Commission on Appointments does not
cases alter its permanent character. The second paragraph of
Section 16, Article VII of the Constitution provides as
1. Appeal is available if the penalty is: (DDS) follows: "The President shall have the power to make
a. Demotion; appointments during the recess of the Congress, whether
b. Dismissal; or voluntary or compulsory, but such appointments shall be
c. Suspension for more than 30 days or fine effective only until disapproval by the Commission on
equivalent to more than 30 days’ salary. [P.D. 807, Appointments or until the next adjournment of the
Sec. 37(a)] Congress." Thus, the ad interim appointment remains
effective until such disapproval or next adjournment,
NOTE: Decisions are initially appealable to the department signifying that it can no longer be withdrawn or revoked by
heads and then to the CSC. Only the respondent in the the President. (Matibag v. Benipayo, G.R. No. 149036. April 2,
administrative disciplinary case, not the complainant, can 2002)
appeal to the CSC from an adverse decision. The
complainant in an administrative disciplinary case is only a ADMINISTRATIVE LAW
witness, and as such, the latter cannot be considered as an
aggrieved party entitled to appeal from an adverse decision. Administration
(Mendez v. CSC, G. R. No. 95575, December 23, 1991)
1. As an institution–It refers to the group or aggregate of
2. Appeal is NOT available if the penalty is: (SF-CRAE) persons in whose hands the reins of government are
a. Suspension for not more than 30 days; for the time being.
b. Fine not more than 30 days’ salary;
c. Censure; 2. As a function –It pertains to the execution, in non-
d. Reprimand; judicial matters, of the law or will of the State as
e. Admonition; or expressed by competent authority. (Nachura, ibid at
f. When the respondent is exonerated. 493)

NOTE: In the second case, the decision becomes final and POWERS OF ADMINISTRATIVE AGENCIES
executory by express provision of law.
Administrative power or function
Availability of the services of the Solicitor General
Involves the regulation and control over the conduct and
If the public official is sued for damages arising out of a affairs of individuals for their own welfare and the
felony for his own account, the State is not liable and the promulgation of rules and regulations to better carry out
Solicitor General is not authorized to represent him the policy of the legislature or such as are devolved upon
therefore. The Solicitor General may only do so in suits for the administrative agency by the organic law of its
damages arising not from a crime but from the existence. (In re: Rodolfo U. Manzano, A.M. No. 88-7-1861-
performance of a public officer’s duties. (Vital-Gozon v. CA, RTC, October 5, 1988)
G.R No. 101428, August 5, 1992)
2. THE OMBUDSMAN AND THE OFFICE OF THE SPECIAL Powers of administrative agencies
PROSECUTOR
1. Discretionary – The law imposes a duty upon a public
Composition of the Ombudsman: officer, and gives him the right to decide how or when
the duty shall be performed; and
1. The Ombudsman; 2. Ministerial – One which is as clear and specific as to
2. One overall Deputy; leave no room for the exercise of discretion in its
3. At least one Deputy each for Luzon, Visayas, and performance.
Mindanao; and
4. A Deputy for the military establishment may also be Basic powers of administrative agencies
appointed. (1987 Philippine Constitution, Art. XI, Sec. 5)
1. Quasi-legislative power or rule-making power;
NOTE: The Ombudsman can investigate the acts of the 2. Quasi-judicial or adjudicatory power; and
Supreme Court. (2003 BAR) 3. Determinative power.

Ombudsman’s fiscal autonomy Quasi-legislative vs. Quasi-judicial power

QUASI-LEGISLATIVE QUASI-JUDICIAL

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Political Law
Operates on the future. Operates based on past

facts. Source of the power to promulgate administrative rules
General application. Particular application and regulations
(applies only to the
parties involved). Derived from the legislature, by virtue of a valid delegation,
May be assailed in court Can only be challenged either express or implied.
without subscribing to the in court with prior
Doctrine of Exhaustion of exhaustion of Doctrine of Subordinate Legislation
Administrative Remedies administrative remedies.
(DEAR). Power of administrative agency to promulgate rules and
Does not require prior notice Requires prior notice regulations on matters within their own specialization.
and hearing (except when the and hearing (except
law requires it). when the law does not With the power of subordinate legislation, administrative
require it). bodies may implement the broad policies laid down in a
May be assailed in court Appealed to the Court of statute by “filling in” the details which the Congress may not
through an ordinary action. Appeals via petition for have the opportunity or competence to provide. This is
review (Rule 43). effected by their promulgation of supplementary
regulations, which have the force and effect of law. (The
Non-similarity of functions and powers of Conference of Maritime Manning Agencies, Inc. v. POEA, G.R.
administrative agencies No. 114714, April 21, 1995)

Not all administrative agencies perform the same functions Reason behind the delegation
or exercise the same types of powers. While some act
merely as investigative or advisory bodies, most It is well established in this jurisdiction that, while the
administrative agencies have investigative, rule-making, making of laws is a non-delegable activity that corresponds
and determinative functions, or at least two of such exclusively to Congress, nevertheless the latter may
functions. constitutionally delegate authority to promulgate rules and
regulations to implement a given legislation and effectuate
RULE-MAKING POWER its policies, for the reason that the legislature often finds it
impracticable (if not impossible) to anticipate and provide
The exercise of delegated legislative power, involving no for the multifarious and complex situations that may be met
discretion as to what the law shall be, but merely the in carrying the law into effect. All that is required is that:
authority to fix the details in the execution or enforcement
of a policy set out in the law itself. (Nachura, Outline 1. The regulation should be germane to the objects and
Reviewer in Political Law, p. 494) purposes of the law; and
2. That the regulation be not in contradiction with it but
It is the power to make rules and regulations which results conforms to the standards that the law prescribes.
in delegated legislation that is within the confines of the (People of the Philippines v. Exconde, G.R. No. L-9820,
granting statute and the doctrine of non-delegability and August 30, 1957)
separation of powers. (Holy Spirit Homeowners Association
vs. Secretary Defensor, G.R. No. 163980, August 3, 2006)
a. KINDS OF ADMINISTRATIVE RULES AND
Legislative vs. Quasi-legislative power REGULATIONS

LEGISLATIVE QUASI-LEGISLATIVE 1. Supplementary or detailed legislation – pertains to
rules and regulations that fix details in the execution of
Determine what the Determine how the law shall be
a policy in the law, e.g. IRRs of the Labor Code. This is
law shall be enforced.
also called a legislative rule or subordinate legislation;
Cannot be delegated. Can be delegated.
2. Interpretative legislation – pertains to rules and
Limitations to the exercise of quasi-legislative power regulations construing or interpreting the provisions of
a statute to be enforced and they are binding on all
1. Within the limits of the powers granted to concerned until they are changed, e.g. BIR Circulars;
administrative agencies;
2. Cannot make rules or regulations which are 3. Contingent legislation – made by an administrative
inconsistent with the provision of the Constitution or authority on the existence of certain facts or things
statute; upon which the enforcement of the law depends and
3. Cannot defeat the purpose of the statute; are issued upon the happening of a certain contingency
4. May not amend, alter, modify, supplant, enlarge, or limit which the administrative body is given the discretion to
the terms of the statute; determine;
5. A rule or regulation must be uniform in operation,
reasonable and not unfair or discriminatory. 4. Procedural;
5. Internal; and
Administrative rule 6. Penal.

Any agency statement of general applicability, that Administrative issuances according to their nature and
implements or interprets a law, fixes and describes substance:
procedures in, or practice requirements of, an agency,
including its regulations. The term includes memoranda or 1. Legislative Rule – It is in the matter of subordinate
statements concerning the internal administration or legislation, designed to implement a primary legislation
management of an agency not affecting the rights of, or by providing the details thereof; and
procedure available to the public. [Administrative Code of
1987, Book VII, Chapter 1, Sec. 2 (2)]

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Political Law
2. Interpretative rule – Provides guidelines to the law Requisites for a valid delegation of quasi-legislative or
which the administrative agency is in charge of rule-making power
enforcing. (BPI Leasing v. CA, G.R. No. 127624, November 1. Completeness Test - The statute is complete in itself,
18, 2003) setting forth the policy to be executed by the agency;
and
b. REQUISITES FOR VALIDITY
2. Sufficient Standard Test - Statute fixes a standard,
1. Issued under authority of law; mapping out the boundaries of the agency’s authority
2. Within the scope and purview of the law; to which it must conform.
3. It must be reasonable; It lays down a sufficient standard when it
4. Publication in the Official Gazette or in a newspaper of provides adequate guidelines or limitations in the law to
general circulation, as provided in Executive Order No. map out the boundaries of the delegate’s authority and
200 prevent the delegation from running riot. To be sufficient,
the standard must specify the limits of the delegate’s
Required as a condition precedent to the effectivity of authority, announce the legislative policy and identify the
a law to inform the public of the contents of the law or conditions under which it is to be implemented. (ABAKADA
rules and regulations before their rights and interests Guro Party List v. Purisima, G.R. No. 166715, August 14, 2008)
are affected by the same. (Philippine International
Trading Corporation v. COA, G.R. No. 132593, June 25,
1999) The administrative body may not make rules and
regulations which are inconsistent with the provisions of
NOTE: If not otherwise required by law, an agency the Constitution or a statute, particularly the statute it is
shall, as far as practicable, publish or circulate notices administering or which created it, or which are in
of proposed rules and afford interested parties the derogation of, or defeat, the purpose of a statute. (Dagan v.
opportunity to submit their views prior to the Philippine Racing Commission G.R. No. 175220, February 12,
adoption of any rule. [1987 Administrative Code, 2009)
Administrative Procedure, Sec. 9(1)] (2000, 2009
BAR) Filing of copies of administrative rules and regulations
before the UPLC
Exceptions to the requirement of publication
Each agency must file with the Office of the National
a. Interpretative regulations; Administrative Register (ONAR) of the University of the
b. Internal regulations; and Philippines Law Center three certified copies of every rule
c. Letters of instructions. (Tañada v. Tuvera G.R. No. adopted by it. Administrative issuances which are not
L-63915, December 29, 1986) published or filed with the ONAR are ineffective and may not
be enforced. (Administrative Code of 1987, Sec. 3; GMA v.
5. Necessity for notice and hearing MTRCB, G.R. No. 148579, February 5, 2007)

GR: An administrative body need not comply with the However, not all rules and regulations adopted by every
requirements of notice and hearing, in the government agency are to be filed with the UP Law Center.
performance of its executive or legislative functions, Only those of general or of permanent character are to be
such as issuing rules and regulations. (Corona v. United filed. According to the UP Law Center’s guidelines for
Harbor Pilots Association of the Philippines, G.R. No. receiving and publication of rules and regulations,
111963, December 12, 1997) “interpretative regulations and those merely internal in
nature, that is, regulating only the personnel of the
XPNs: The legislature itself requires it and mandates administrative agency and not the public,” need not be filed
that the regulation shall be based on certain facts as with the UP Law Center. (The Board of Trustees of the GSIS
determined at an appropriate investigation. (Hon. v. Velasco, G.R. No. 170463, February 2, 2011)
Executive Secretary v. Southwing Heavy Industries, Inc.,
G.R. No. 164171, August 22, 2006) Contemporaneous Construction

An administrative rule in the nature of subordinate The construction placed upon the statute by an executive or
legislation is designed to implement a law providing administrative officer called upon to execute or administer
its details, and before it is adopted, there must be a such statute. They are usually in the form of circulars,
hearing under the Administrative Code of 1987. Those directives, opinions, and rulings.
which are merely interpretative rules need not comply
with the hearing requirement. (CIR v. CA, G.R. No. In the construction of a doubtful and ambiguous law, the
11976, August 26, 1996) contemporaneous construction of those who are called
upon to act under the law and were appointed to carry its
Additional requisites for administrative rules and provisions into effect (i.e., the practice and interpretive
regulations with penal sanctions regulations by officers, administrative agencies,
departmental heads, and other officials charged with the
Requisites to be complied with: duty of administering and enforcing a statute), is entitled to
very great respect. (Lim Hoa Ting v. Central Bank of the
1. Law must declare the act punishable; Philippines, G.R. No. L-10666, September 24, 1958)
2. Law must define or fix the penalty; and
3. Rules must be published in the Official Gazette or in a Effect of Administrative Interpretations to Courts
newspaper of general circulation. (Hon. Secretary Perez
v. LPG Refillers Association of the Philippines, G.R. No. The construction given to a statute by an administrative
159149, June 26, 2006) agency charged with the interpretation and application of
that statute should be accorded great weight by the courts,
unless such construction is clearly shown to be in sharp
conflict with the governing statute or the Constitution and

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Political Law
other laws. (Nestle Philippines Inc. v. CA, G.R. No. 86738, be made pursuant to one. It is enough that the investigation
November 13, 1991) be for a lawfully authorized purpose. The purpose of the
subpoena is to discover evidence, not to prove a pending
Administrative regulations enacted by administrative charge, but upon which to make one if the discovered
agencies to implement and interpret the law have the force evidence so justifies. (Evangelista v. Jarencio, G.R. No. L-
of law and enjoy the presumption of constitutionality and 29274, November 27, 1975)
legality until they are set aside with finality in an
appropriate case by a competent court. (NASECORE v. A subpoena meets the requirements for enforcement if:
MERALCO, G.R. No. 191150, October 10, 2016) a. The inquiry is within the authority of the agency;
b. The demand is not to indefinite; and
2. ADJUDICATORY POWER c. The information is reasonably relevant. (Evangelista
v. Jarencio, ibid)
Power of administrative authorities to make
determinations of facts in the performance of their official 2. Contempt power
duties and to apply the law as they construe it to the facts
so found. It partakes the nature of judicial power, but Quasi-judicial agencies that have the power to cite persons
exercised by a person other than a judge. for indirect contempt can only do so by initiating them in
the proper RTC. It is not within their jurisdiction and
The proceedings partake of the character of judicial competence to decide the indirect contempt cases. These
proceedings. Administrative body is normally granted the matters are still within the province of the Regional Trial
authority to promulgate its own rules of procedure, Courts. (Land Bank of the Philippines v. Listana, G.R. No.
provided they do not increase, diminish or modify 152611, August 5, 2003)
substantive rights, and subject to disapproval by the
Supreme Court. (Nachura, Outline Reviewer in Political Law, Two ways of charging a person with indirect contempt:
p. 504)
1. Through a verified petition; or
Unless expressly granted, administrative agencies are 2. By order or formal charge initiated by the court motu
bereft of quasi-judicial powers. The jurisdiction of proprio (Land Bank of the Philippines v. Listana, ibid)
administrative agencies is dependent entirely upon the
provisions of the statutes reposing power in them; they NOTE: In any contested case, the agency shall have the
cannot confer it upon themselves. (Taule v. Santos, G.R. No. power to require the attendance of witnesses or the
90336, August 12, 1991) production of books, papers, documents and other
pertinent data, upon request of any party before or during
While it is a fundamental rule that an administrative agency the hearing upon showing of general relevance. Unless
has only such powers that are expressly granted to it by law, otherwise provided by law, the agency may, in case of
it is likewise a settled rule that an administrative agency has disobedience, invoke the aid of the Regional Trial Court
also such powers as are necessarily implied in the exercise within whose jurisdiction the contested case being heard
of its express powers. (Laguna Lake Development Authority falls. The Court may punish contumacy or refusal as
v. CA, G.R. No. 110120, March 16, 1994) contempt. (Administrative Code of 1987, Book VII, Chapter 3,
Sec. 13)
Limited jurisdiction of quasi-judicial agencies
a. ADMINISTRATIVE DUE PROCESS
An administrative body could wield only such powers as are
specifically granted to it by its enabling statute. Its Nature of administrative proceedings
jurisdiction is interpreted strictissimi juris.
It is summary in nature.
Conditions for the Proper Exercise of Quasi-Judicial
Power Inapplicability of technical rules of procedure and
evidence in administrative proceedings
1. Jurisdiction must be properly acquired by the
administrative body; and The technical rules of procedure and of evidence prevailing
2. Due process must be observed in the conduct of the in courts of law and equity are not controlling in
proceedings. administrative proceedings to free administrative boards
or agencies from the compulsion of technical rules so that
Quasi-Judicial Power includes the following: the mere admission of matter which would be deemed
incompetent in judicial proceedings would not invalidate an
1. Subpoena power administrative order.

It is a process directed to a person requiring him or her to Cardinal requirements of due process in administrative
attend and to testify at the hearing or the trial of an action, proceedings (1994 BAR)
or at any investigation conducted by competent authority,
or for the taking of his deposition. It may also require such 1. Right to a hearing which includes the right to present
person to bring with him or her any books, documents, or one’s case and submit evidence in support thereof;
other things under his or her control, in which case it is 2. The tribunal must consider the evidence presented;
called a subpoena duces tecum. (Rule 21, Sec. 1, 1997 Rules 3. The decision must be supported by evidence;
of Civil Procedure, as amended) 4. Such evidence must be substantial;
5. The decision must be rendered on the evidence
Administrative agencies may enforce subpoenas issued in presented at the hearing or at least contained in the
the course of investigations, whether or not adjudication is record, and disclosed to the parties affected;
involved, and whether or not probable cause is shown and 6. The tribunal or body or any of its judges must act on its
even before the issuance of a complaint. It is not necessary, own independent consideration of the law and facts of
as in the case of a warrant, that a specific charge or the controversy in arriving at a decision;
complaint of violation of law be pending or that the order

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7. The board or body should render decision in such a The right to counsel which may not be waived, unless in
manner that parties can know the various issues writing and in the presence of counsel, as recognized by the
involved and the reasons for the decision rendered. Constitution, is a right of a suspect in a custodial
(Ang Tibay v. CIR, G.R. No. L-46496, February 27, 1940) investigation. It is not an absolute right and may, thus, be
invoked or rejected in criminal proceeding and, with more
NOTE: The essence of due process in administrative reason, in an administrative inquiry. (Lumiqued v. Exevea,
proceedings is the opportunity to explain one’s side or seek G.R No. 117565, November 18, 1997)
a reconsideration of the action or ruling complained of. As
long as the parties are given the opportunity to be heard Quantum of proof required in administrative
before judgment is rendered, the demands of due process proceedings
are sufficiently met. What is offensive to due process is the
denial of the opportunity to be heard. (Flores v. Substantial evidence – that amount of relevant evidence that
Montemayor, G.R. No. 170146, June 6, 2011) a reasonable mind might accept as adequate to support a
Trial-type hearing not required conclusion.

Due process in an administrative context does not require b. ADMINISTRATIVE APPEAL AND REVIEW
trial-type proceedings similar to those in courts of justice. Administrative appeal
Where opportunity to be heard either through oral
arguments or through pleadings is accorded, there is no It includes the review by a higher agency of decisions
denial of procedural due process. The requirements are rendered by an administrative agency, commenced by
satisfied where the parties are afforded fair and reasonable petition of an interested party.
opportunity to explain their side of the controversy at hand.
It is not violative of due process when an administrative NOTE: Under the 1987 Administrative Code, administrative
agency resolves cases based solely on position papers, appeals from a final decision of an agency are taken to the
affidavits, or documentary evidence submitted by the Department Head, unless otherwise provided by law or
parties as affidavits of witnesses which may take the place executive order.
of their direct testimony. (Lastimoso v. Asayo, G.R. No.
154243, December 4, 2007) Administrative review

Effect of non-observance of notice and hearing A superior officer or department head, upon his or her own
volition, may review the decision of an administrative
As a rule, it will invalidate the administrative proceedings. agency or that of a subordinate’s decision pursuant to the
A failure to comply with the requirements may result in a power of control.
failure to acquire jurisdiction.
It is, however, subject to the caveat that a final and
NOTE: Right to notice may be waived. executory decision is not included within the power of
control, and hence can no longer be altered by
Necessity of Notice and Hearing administrative review.

A hearing may take place after the deprivation occurs. What Enforcement of Administrative Decisions
the law prohibits is not the absence of previous notice but
the absolute absence thereof and the lack of opportunity to 1. As provided for by law; or
be heard. 2. Through the court’s intervention.

NOTE: There has been no denial of due process if any c. ADMINISTRATIVE RES JUDICATA
irregularity in the premature issuance of the assailed
decision has been remedied by an order giving the petitions Non-applicability of the doctrine of res judicata
the right to participate in the hearing of the MR. The
opportunity granted by, technically, allowing petitioners to The doctrine of res judicata applies only to judicial or quasi-
finally be able to file their comment in the case, resolves the judicial proceedings and not to the exercise of purely
procedural irregularity previously inflicted upon administrative functions. Administrative proceedings are
petitioners. (Nasecore v. ERC, G.R. No. 190795, July 6, 2011) non-litigious and summary in nature; hence, res judicata
does not apply. (Nasipit Lumber Company, Inc. v. NLRC, G.R.
Exceptions to the requirement of notice and hearing No. 54424, August 31, 1989)

1. Urgency of immediate action; In administrative law, a quasi-judicial proceeding involves
2. Tentativeness of administrative action; (a) taking and evaluating evidence; (b) determining facts
3. Grant or revocation of licenses or permits to operate based upon the evidence presented; and (c) rendering an
certain businesses affecting public order or morals; order or decision supported by the facts proved. The
4. Summary abatement of nuisance per se which affects exercise of quasi-judicial functions involves a
safety of persons or property; determination, with respect to the matter in controversy, of
5. Preventive suspension of public officer or employee what the law is; what the legal rights and obligations of the
facing administrative charges; contending parties are; and based thereon and the facts
6. Cancellation of a passport of a person sought for obtaining, the adjudication of the respective rights and
criminal prosecution; obligations of the parties. (Ligtas v. People, G.R. No.
7. Summary proceedings of distraint and levy upon 200751, August 17, 2015, as penned by J. LEONEN)
property of a delinquent taxpayer;
8. Replacement of a temporary or acting appointee; and Two concepts of res judicata:
9. Right was previously offered but not claimed.
1. Bar by previous judgment
Inapplicability of the right to counsel in administrative
inquiries There is “bar by previous judgment” when, as between the
first case where the judgment was rendered and the second

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Political Law
case that is sought to be barred, there is identity of parties, 4. Factual findings not supported by evidence;
subject matter, and causes of action. In this instance, the 5. Grave abuse of discretion, arbitrariness, or
judgment in the first case constitutes an absolute bar to the capriciousness is manifest;
second action. (Ligtas v. People, ibid) 6. When expressly allowed by statute; and
7. Error in appreciation of the pleadings and in the
2. Conclusiveness of judgment interpretation of the documentary evidence presented
by the parties.
If a particular point or question is in issue in the second
action, and the judgment will depend on the determination Fact-finding quasi-judicial body
of that particular point or question, a former judgment
between the same parties will be final and conclusive in the A fact-finding quasi-judicial body (e.g., Land Transportation
second if that same point or question was in issue and Franchising and Regulatory Board) whose decisions (on
adjudicated in the first suit. Identity of cause of action is not questions regarding certificate of public convenience) are
required but merely identity of issue. (Ligtas v. People, ibid.) influenced not only by the facts as disclosed by the evidence
in the case before it but also by the reports of its field agents
Elements of res judicata: and inspectors that are periodically submitted to it, has the
power to take into consideration the result of its own
1. The judgment sought to bar the new action must be observation and investigation of the matter submitted to it
final; for decision, in connection with other evidence presented at
2. It must have been rendered by a court having the hearing of the case. (Pantranco South Express, Inc. v.
jurisdiction over the subject matter and the parties; Board of Transportation, G.R. No. L-49664, November 22,
2. The disposition of the case must be a judgment on the 1990)
merits; and
3. There must be identity of parties, subject matter, and Investigatory power
causes of action (ibid.)
Power to inspect, secure, or require the disclosure of
NOTE: Should identity of parties, subject matter, and causes information by means of accounts, records, reports,
of action be shown in the two cases, then res judicata in its statements and testimony of witnesses. It is implied and not
aspect as a “bar by prior judgment” would apply. If as inherent in administrative agencies.
between the two cases, only identity of parties can be
shown, but not identical causes of action, then res judicata Power to issue subpoena not inherent in administrative
as “conclusiveness of judgment” applies. (ibid.) bodies

Exceptions to the Non-Applicability of Res Judicata in Administrative bodies may summon witnesses and require
Administrative Proceedings the production of evidence only when duly allowed by law,
and always only in connection with the matter they are
1. Naturalization proceedings or those involving authorized to investigate.
citizenship and immigration;
2. Labor relations; and Power to cite a person in contempt not inherent in
3. Decisions affecting family relations, personal status or administrative bodies
condition, and capacity of persons.
It must be expressly conferred upon the body, and
NOTE: It is well settled that findings of fact of quasi-judicial additionally, must be used only in connection with its quasi-
agencies, such as the COA, are generally accorded respect judicial as distinguished from its purely administrative or
and even finality by this Court, if supported by substantial routinary functions.
evidence, in recognition of their expertise on the specific
matters under their jurisdiction. (Reyna v. COA, G.R. No. NOTE: If there is no express grant, the agency must invoke
167219, February 8, 2011) the aid of the RTC under Rule 71 of the Rules of Court.

3. FACT-FINDING, INVESTIGATIVE, LICENSING AND Q: May administrative agencies issue warrants of arrest
RATE-FIXING POWERS or administrative searches?

Fact-finding power A: GR: NO. Under the 1987 Constitution, only a judge may
issue warrants.
1. Power to declare the existence of facts which call into
operation the provisions of a statute; and XPN: In cases of deportation of illegal and undesirable
2. Power to ascertain and determine appropriate facts as aliens, an arrest ordered by the President or his duly
a basis for procedure in the enforcement of particular authorized representatives, in order to carry out a final
laws. decision of deportation, is valid. (Salazar v. Achacoso, G.R.
No. 81510, March 14, 1990)
NOTE: The mere fact that an officer is required by law to
inquire the existence of certain facts and to apply the law Licensing power
thereto in order to determine what his official conduct shall
be and the fact that these acts may affect private rights do The action of an administrative agency in granting or
not constitute an exercise of judicial powers. (Lovina v. denying, or in suspending or revoking, a license, permit,
Moreno, G.R. No. L-17821, November 21, 1963) franchise, or certificate of public convenience and necessity.
(Sañado v. CA, G.R. No. 108338, April 17, 2007)
Exceptions to the rule that findings of facts of
administrative agencies are binding on the courts License

1. Findings are vitiated by fraud, imposition, or collusion; Includes the whole or any part of any agency’s permit,
2. Procedure which led to factual findings is irregular; certificate, passport, clearance, approval, registration,
3. Palpable errors are committed; charter, membership, statutory exemption or other form of

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Political Law
permission, or regulation of the exercise of a right or Requirements for the delegation of the power to
privilege. [1987 Administrative Code, Administrative ascertain facts to be valid
Procedure, Sec. 2(10)]
The law delegating the power to determine some facts or
Licensing state of things upon which the law may take effect or its
operation suspended must provide the standard, fix the
It includes agency process involving the grant, renewal, limits within which the discretion may be exercised, and
denial, revocation, suspension, annulment, withdrawal, define the conditions therefor. Absent these requirements,
limitation, amendment, modification or conditioning of a the law and the rules issued thereunder are void, the former
license. [1987 Administrative Code, Administrative being an undue delegation of legislative power and the
Procedure, Sec. 2(11)] latter being the exercise of rule-making without legal basis.
(U.S. v. Ang Tang Ho, G.R. No. L-17122, February 27, 1992)
NOTE: Except in cases of willful violation of pertinent laws,
rules and regulations or when public security, health, or Standard required on delegated power to fix rates
safety requires otherwise, no license may be withdrawn,
suspended, revoked or annulled without notice and It is required that the rate be reasonable and just. (American
hearing. [1987 Administrative Code, Administrative Tobacco Co. v. Director of Patents, G.R. No. L-26803, October
Procedure, Sec. 17(2)] 14, 1975)

Nature of an administrative agency’s act if it is In any case, the rates must both be non-confiscatory and
empowered by a statute to revoke a license for non- must have been established in the manner prescribed by
compliance or violation of agency regulations the legislature. Even in the absence of an express
requirement as to reasonableness, this standard may be
Where a statute empowers an agency to revoke a license for implied. A rate-fixing order, though temporary or
non-compliance with or violation of agency regulations, the provisional it may be, is not exempt from the procedural
administrative act is of a judicial nature, since it depends requirements of notice and hearing when prescribed by
upon the ascertainment of the existence of certain past or statute, as well as the requirement of reasonableness.
present facts upon which a decision is to be made and rights (Philippine Communications Satellite Corporation v. NTC,
and liabilities determined. (Sañado v. CA, supra) G.R. No. 84818, December 18, 1989)

Rate Re-delegating power to fix rates is prohibited
The power delegated to an administrative agency to fix
It means any charge to the public for a service open to all rates cannot, in the absence of a law authorizing it, be
and upon the same terms, including individual or joint rates, delegated to another. This is expressed in the maxim,
tolls, classification or schedules thereof, as well as potestas delagata non delegari potest. (Kilusang Mayo Uno
communication, mileage, kilometrage and other special Labor Center v. Garcia, Jr., G.R. No. 115381, December 23,
rates which shall be imposed by law or regulation to be 1994)
observed and followed by a person. [1987 Administrative
Code, Administrative Procedure, Sec. 2(3)] POWER TO FIX RATES
POWER TO FIX RATE
EXERCISED AS A
Rate-fixing power EXERCISED AS A QUASI-
LEGISLATIVE
JUDICIAL FUNCTION
FUNCTION
It is the power usually delegated by the legislature to Rules and/or rates laid Rules and the rate imposed
administrative agencies for the latter to fix the rates which down are meant to apply exclusively to a
public utility companies may charge the public. apply to all enterprises. particular party.
Prior notice and Prior notice and hearing are
NOTE: The power to fix rates is essentially legislative but hearing to the affected essential to the validity of
may be delegated. (Philippine Inter-Island v. CA, G.R. No. parties is not a such rates. But an
100481, January 22, 1997) requirement, except administrative agency may
where the legislature be empowered by law to
The legislature may directly provide for these rates, wages, itself requires it. approve provisionally, when
or prices. But while the legislature may deal directly with demanded by urgent public
these subjects, it has been found more advantageous to need, rates of public utilities
place the performance of these functions in some without a hearing.
administrative agency. The need for dispatch, for flexibility
and technical know-how is better met by entrusting the DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE
rate-fixing to an agency other than the legislature itself. REMEDIES
(Cortes, 1963)
Doctrine of Primary Jurisdiction vs. Doctrine of
Rate-fixing procedure Exhaustion of Administrative Remedies

The administrative agencies perform this function either by DOCTRINE OF
issuing rules and regulations in the exercise of their quasi- DOCTRINE OF PRIMARY EXHAUSTION OF
legislative power or by issuing orders affecting a specified JURISDICTION ADMINISTRATIVE
person in the exercise of its quasi-judicial power. REMEDIES
Both deal with the proper relationships between the
NOTE: In the fixing of rates, no rule or final order shall be courts and administrative agencies.
valid unless the proposed rates shall have been published Case is within the concurrent Claim is cognizable in
in a newspaper of general circulation at least two weeks jurisdiction of the court and the first instance by an
before the first hearing thereon. [1987 Administrative Code, an administrative agency but administrative agency
Administrative Procedure, Sec. 9(2)] (2000, 2009 BAR) the determination of the case alone.
requires the technical

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Political Law
expertise of the PETITION NOT TO GIVE DUE COURSE TO OR CANCEL A

administrative agency. CERTIFICATE OF CANDIDACY

Although the matter is within Judicial interference is A verified petition seeking to deny due course to a
the jurisdiction of the court, it withheld until the certificate of candidacy may be filed by any person
must yield to the jurisdiction administrative. process exclusively on the ground that material representation
of the administrative agency. has been completed. contained therein as required is false.

DOCTRINE OF FINALITY OF ADMINISTRATIVE ACTION The petition may be filed not later than 25 days from the
time of filing of the COC, and shall be decided, after due
It provides that no resort to courts will be allowed unless notice and hearing, not later than 15 days before the
administrative action has been completed and there is election.
nothing left to be done in the administrative structure.
In addition, the COMELEC may motu proprio or upon
ELECTION LAW verified petition refuse to give due course to or cancel a COC
if shown that it was filed to: (Put-Ca-No)
JURISDICTION OF COMELEC OVER POLITICAL PARTIES
1. Put the election process in mockery or disrepute;
In Palmares v. Commission on Elections, to which the 2. Cause confusion among the voters by the similarity of
assailed Resolution made reference and which involved the the names of the registered candidates; or
Nacionalista Party, the Court held that the COMELEC has 3. Clearly demonstrate that the candidate has no bona fide
intention to run for the office for which the COC has
jurisdiction over the issue of leadership in a political party.
Under the Constitution, the COMELEC is empowered to been filed and thus prevent a faithful determination of
the true will of the electorate. (OEC, Sec. 69)
register political parties. [Sec. 2(5), Article IX-C] Necessarily,
the power to act on behalf of a party and the responsibility
NOTE: If the certificate of candidacy is void ab initio, then
for the acts of such political party must be fixed in certain
legally the person who filed such void certificate of
persons acting as its officers. In the exercise of the power
candidacy was never a candidate in the elections at any
to register political parties, the COMELEC must determine
time. All votes for such non-candidate are stray votes and
who these officers are. Consequently, if there is any
should not be counted. Thus, such non-candidate can never
controversy as to leadership, the COMELEC may, in a proper
be a first-placer in the elections. There can be no
case brought before it, resolve the issue incidental to its
substitution because the COC is void ab initio. Vice Mayor
power to register political parties. (Laban ng
does not assume the position of Mayor; the mayoral
Demokratikong Pilipino v. COMELEC, G.R. No. 161265,
candidate who obtained the second highest number of votes
February 24, 2004)
shall instead assume office. (Maquiling v. COMELEC, G.R. No.

195649, April 16, 2013)
NUISANCE CANDIDATES

Any registered candidate for the same office may file a
Distinguish the rule under Section 68 and Section 78 of
petition to declare a duly registered candidate as a nuisance
the Omnibus Election Code (2016 BAR)
candidate, personally or through duly authorized

representative with COMELEC, within five days from the
last day of filing of COC. [R.A. 6646 (The Electoral Reforms SECTION 68 SECTION 78
Law of 1987), Sec. 5]
Petition for Petition to deny due course

disqualification or cancel a certificate of
Ministerial Duty of Comelec to Receive Certificates
candidacy

GR: The COMELEC shall have the ministerial duty to receive The commission of Violations of other penal
and acknowledge receipt of the COCs; Provided, that said prohibited acts and laws; false material
certificates are under oath and contain all the required data possession of a representation of the
and in the form prescribed by the Commission. (OEC, Sec. 7; permanent resident contents of the certificate of
Cerafica vs. COMELEC, G.R. No. 205136, December 2, 2014) status in a foreign country candidacy
Substitution is allowed No substitution is allowed
XPNs: COMELEC may go beyond the face of the COC in the COC is deemed valid COC is deemed void ab initio
following:
All the offenses mentioned in Section 68 refer to election
1. Nuisance candidates (OEC, Sec. 69); offenses under the OEC, not to violations of other penal
2. Petition to deny due course or to cancel a COC (OEC, laws. There is absolutely nothing in the language of Section
Sec. 78); or 68 that would justify including violation of the three-term
3. Filing of a disqualification case on any of the limit rule, or conviction by final judgment of the crime of
grounds enumerated in Sec. 68, OEC. falsification under the Revised Penal Code, as one of the
grounds or offenses covered under Section 68.
NOTE: In a multi-slot office, all votes cast in favor of the
nuisance candidate whose name is confusingly similar to a On the other hand, Section 78 of the OEC states that a
bona fide candidate shall not be automatically credited in certificate of candidacy may be denied or cancelled when
the latter's favor. If the ballot contains one (1) vote for the there is false material representation of the contents of the
nuisance candidate and no vote for the bona fide candidate, certificate of candidacy. Section 74 of the OEC details the
that vote will be counted in the latter's favor. However, if contents of the certificate of candidacy such that it shall
the nuisance candidate and the bona fide candidate each state that the person filing it is announcing his candidacy for
gets a vote, only one (1) vote will be counted in the latter's the office stated therein and that he is eligible for said office.
favor. (Zapanta v. COMELEC, G.R. No. 233016, March 05, (Ara Tea v. COMELEC, G.R. No. 195229, October 9, 2012)
2019, as penned by J. Leonen)
ELECTION PROTEST


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Political Law
Post-election disputes It must be initiated by filing a protest that must contain the
following allegations:
These are disputes which arise or are instituted after
proclamation of winning candidates and which issues 1. The protestant is a candidate who duly filed a COC and
pertain to the casting and counting of votes (election was voted for in the election;
protests), or to the eligibility or disloyalty of the winning 2. The protestee has been proclaimed; and
candidates (quo warranto). 3. The petition was filed within 10 days after the
proclamation. (Miro vs. COMELEC, G.R. No. L-57574,
Nature and purpose of an election contest April 20, 1983)

It is a special summary proceeding, the object of which is to Effect if the protestant accepts a permanent
expedite the settlement of controversies between appointment
candidates as to who received the majority of legal votes.
Acceptance of a permanent appointment to a regular office
NOTE: Statutes providing for election contests are to be during the pendency of his protest is an abandonment of the
liberally construed to the end that the will of the people in electoral protest. The same is true if a protestant voluntarily
the choice of public officers may not be defeated by mere sought election to an office whose term would extend
technical objections. It is imperative that his claim be beyond the expiry date of the term of the contested office,
immediately cleared, not only for the benefit of the winner and after winning the said election, took her oath and
but for the sake of public interest, which can only be assumed office and thereafter continuously serves it. The
achieved by brushing aside technicalities of procedure reason for this is that the dismissal of the protest would
which protract and delay the trial of an ordinary action. serve public interest as it would dissipate the aura of
(Vialogo v. COMELEC, G.R. No. 194143, October 4, 2011) uncertainty as to the results of the presidential election,
thereby enhancing the all-to crucial political stability of the
Where election protests can be filed nation during this period of national recovery. (Santiago vs.
Ramos, P.E.T. Case No. 001, February 13, 1996)
1. COMELEC – The sole judge of all contests relating to
elections, returns, and qualifications of all elective In assuming the office of Senator, one has effectively
regional, provincial and city officials (reviewable by SC abandoned or withdrawn this protest. Such abandonment
under Rule 64 using Rule 65); or withdrawal operates to render moot the instant protest.
Moreover, the dismissal of this protest would serve public
NOTE: Decisions of COMELEC en banc are appealable to interest as it would dissipate the aura of uncertainty as to
SC (2001 BAR) the results of the election. (Legarda vs. De Castro, PET case
no. 003, January 18, 2008)
2. Presidential Electoral Tribunal (PET) – Against the
President and Vice President; Requisites for an execution pending appeal in election
3. SET – Against a senator; protest cases
4. HRET –Against a representative;
5. RTC – Over contests for municipal officials which may 1. It must be upon motion by the prevailing party with
be appealed to COMELEC; and notice to the adverse party;
6. MeTC or MTC – For barangay officials which may be 2. There must be “good reasons” for the said execution;
appealed to COMELEC. and
3. The order granting the said execution must state the
NOTE: If an appeal/petition for certiorari is filed by a good reasons. (Navarosa vs. COMELEC, G.R. No. 157957,
person before the SC based on a decision of either the First September 18, 2003)
Division or Second Division of the COMELEC, you must rule
that the petition must be dismissed because the SC has no “Good reasons”
jurisdiction. Decisions and orders by the two Divisions of
the COMELEC will have to await the review of the COMELEC A combination of two or more of the following:
en banc. That’s why the SC has no jurisdiction. Appeal must 1. That public interest is involved or the will of the
be done first before the en banc. (Relate to Section 7, Article electorate;
IX-A, 1987 Constitution. “Of all its members” cannot mean 2. The shortness of the remaining portion of the term of
“Division” because each Division is only composed of three the contested office; or
Commissioners) 3. The length of time that the election contest has been
pending. (Ramas vs. COMELEC, G.R. No. 130831.
Grounds for the filing of election protests (F-Vo-T-Pre- February 10, 1998)
M-Un-D-O)
NOTE: If instead of issuing a preliminary injunction in place
1. Fraud; of a TRO, a court opts to decide the case on its merits with
2. Vote-buying; the result that it also enjoins the same acts covered by its
3. Terrorism; TRO, it stands to reason that the decision amounts to a grant
4. Presence of flying voters; of preliminary injunction. Such injunction should be
5. Misreading or misappreciation of ballots; deemed in force pending any appeal from the decision. The
6. Disenfranchisement of voters; view that execution pending appeal should still continue
7. Unqualified members of board of election inspector; notwithstanding a decision of the higher court enjoining
and such execution—does not make sense. It will render quite
8. Other election irregularities. inutile the proceedings before such court. (Panlilio vs.
COMELEC, G.R. No. 184286, February 26, 2010)
NOTE: Pendency of election protest is not a sufficient basis
to enjoin the protestee from assuming office. Best pieces of evidence in an election contest

Content of an election protest 1. Ballots are the best and most conclusive evidence in an
election contest where the correctness of the number of

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Political Law
votes of each candidate is involved (Delos Reyes vs. administration of

COMELEC, G.R. No. 170070, February 28, 2007); and local affairs. As
2. Election returns are the best evidence when the ballots such, it acts as a
are lost, destroyed, tampered or fake. separate entity
for its own
Right to withdraw purposes, and not
a subdivision of
A protestant has the right to withdraw his protest or drop the State. (Bara
polling places from his protest. The protestee, in such cases, Lidasan v.
has no cause to complain because the withdrawal is the COMELEC, G.R.
exclusive prerogative of the protestant. No. L-28089,
October 25, 1967)
LOCAL GOVERNMENTS
REQUISITES FOR CREATION, CONVERSION, DIVISION,
MUNICIPAL CORPORATIONS MERGER, OR DISSOLUTION

Elements: A local government unit may be created, divided, merged,
abolished or its boundaries substantially altered either by
1. Legal creation or incorporation; law enacted by Congress in the case of a province, city,
2. Corporate name by which artificial personality or legal municipality or any other political subdivision of or by
entity is known and which all corporate acts are done; ordinance passed by the Sangguniang Panlalawigan or
3. Inhabitants constituting the population who are Sangguniang Panlungsod concerned in the case of a
invested with the political and corporate powers which barangay located within its territorial jurisdiction, subject
are executed through duly constituted officers and to such limitations and requirements prescribed in the
agents; and Code. (Section 6, Local Government Code)
4. Place or territory within which the local civil
government and corporate functions are exercised. NOTE: Plebiscite is not required to create a congressional
(Martin, Pub. Corp., 1971) district as this is considered to be automatically created
based on the provision of Section 5(3) of Article VI.
Two-fold character of a municipal corporation Article VIII, Section 2 of the 1973 Constitution retained the
concept of equal representation "in accordance with the
1. Government - the municipal corporation is an agent of number of their respective inhabitants and on the basis of a
the State for the government of the territory and the uniform and progressive ratio" with each district being, as
inhabitants within the municipal limits. The municipal far as practicable, contiguous, compact and adjacent
corporation exercises by delegation a part of the territory. This formulation was essentially carried over to
sovereignty of the State. the 1987 Constitution, distinguished only from the previous
one by the presence of party-list representatives. In neither
2. Private - the municipal corporation acts in a similar Constitution was a plebiscite required. (Bagabuyo vs.
category as a business corporation performing Comelec, G.R. No. 176970, December 8, 2008)
functions not strictly government or political. The
municipal corporation stands for the community in the Requisites for creation of Local Government Units
administration of local affairs which is wholly beyond
the sphere of the public purposes for which its 1. Petition to be filed by residents;
governmental powers are conferred. 2. Comment to be made by the city council;
3. Compliance with the indicators, namely: income,
BASIS QUASI- MUNICIPAL population, and land area;
CORPORATION CORPORATION 4. Sponsorship or law to be in the halls of Congress;
Created as an A body politic and 5. Comment from Land Management Bureau, Department
agency of the corporate entity of Finance, and Philippine Statistics Authority;
State for a narrow endowed with 6. Conduct of a plebiscite to be done 120 days from the
As to and limited powers to be creation of the LGU;
nature purpose exercised by it in 7. Election of officers;
conformity with 8. Oath taking of all winning candidates.
law
Indicators
Has no personal Has dual
or private functions: 1. Income - It must be sufficient based on acceptable
interests to be standards, to provide for all essential government
subserved, but is 1. Public or facilities and services and special functions
simply required governmental – commensurate with the size of its population, as
by the State to do by acting as an expected of the LGU concerned.
some public work agent of the State
(Concurring for the 2. Population - It shall be determined as the total number
As to
Opinion of Justice government of of inhabitants within the territorial jurisdiction of the
function
Feliciano in the territory and LGU concerned.
Fontanilla v. its inhabitants
Maliaman, G.R. 3. Land Area - It must be contiguous, unless it comprises
Nos. L-55963 & 2. Private or of two or more islands or is separated by an LGU
61045, February proprietary – by independent of the other property identified by metes
27, 1991) acting as an agent and bounds with technical descriptions and sufficient
of the community to provide for such basic services and facilities to meet
in the the requirements of its populace.

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Political Law
Rules indispensable to decentralization. Because of this, there is

no question that the law favors devolution. (Mangune vs.
The Congress may not delegate to the President the power Ermita, G.R. No. 182604, September 27, 2016)
to create local government units, because the power to
create local government units is lodged exclusively in Decentralization of administration
Congress. (Pelaez vs. Auditor General, G.R. No. L-23825,
December 24, 1965) There is decentralization of administration when the
central government delegates administrative powers to
The plebiscite should be conducted in the entire unit and political subdivisions in order to broaden the base of
not only in the break-away unit (Tan vs. COMELEC, G.R. No. government power and in the process, make local
73155, July 11, 1986) governments more responsive and more accountable and
ensure their fullest development as self-reliant
The 120-day requirement is only permissive and not communities and make them more effective partners in the
mandatory because of the publication requirement insofar pursuit of national development and social progress.
as the passage of a law creating a local government unit is
concerned. (Cawaling vs. COMELEC, G.R. No. 146319, October Decentralization of administration is the delegation of
26, 2001) administrative powers to the local government unit in
order to broaden the base of governmental powers.
There is no need to conduct a plebiscite in a legislative re- (Limbona v. Mangelin, G.R. No. 80391, February 29, 1989)
apportionment because there is actually no change in the
nomenclature of the LGU (Bagabuyo vs. COMELEC, G.R. No. Decentralization of power
176970, December 8, 2008)
On the other hand, decentralization of power involves
COMELEC cannot abolish a local government unit because abdication of political power in favor of local government
in this case the “ghost precinct” does not necessarily mean units declared to be autonomous. This is termed as
that it should be abolished, since it does not cease to devolution. (The Local Government Code Revisited 2011 Ed.,
function. It is just that there are no inhabitants or voters at p. 8, Aquilino Pimentel, Jr.)
present. (Sultan Usman Sarangani vs. COMELEC, G.R. No.
135927, June 26, 2000) Decentralization of power is the abdication by the national
government of governmental powers. (Limbona v.
Q: Are the voters of a city which used to be a component Mangelin, G.R. No. 80391, February 29, 1989)
city of a province entitled to vote in a plebiscite for the
division of said province, even after the city has been Congress on its control to the Local Government Units
converted into a highly urbanized city (HUC)?
The basic relationship between the national legislature and
A: NO. HUCs, as conceptualized in our local government the local government units has not been enfeebled by the
laws, are essentially cities that have attained a level of new provisions in the Constitution strengthening the policy
population growth and economic development which the of local autonomy. Without meaning to detract from that
legislature has deemed sufficient for devolution of policy, we here confirm that Congress retains control of the
governmental powers as self-contained political units. As local government units although in significantly reduced
such, these cities are intended to function as first-level degree now than under our previous Constitutions. The
political and administrative subdivisions in their own right, power to create still includes the power to destroy. The
on par with provinces. For this reason, Article X, Section 12 power to grant still includes the power to withhold or recall.
of the Constitution provides that “cities that are highly By and large, however, the national legislature is still the
urbanized, as determined by law, x x x shall be independent principal of the local government units, which cannot defy
of the province.” This constitutionally mandated its will or modify or violate it. (Lina v. Paño, G.R. No. 129093,
independence from provincial units is explicitly declared in August 30, 2001)
Section 29 of the Local Government Code and manifests
itself throughout said code in three forms: first, exclusion Q: In 2008, the DSWD launched the "Pantawid
from participation in provincial elections; second, direct Pamilyang Pilipino Program" (4Ps). This government
Presidential supervision over HUCs and their local chief intervention scheme "provides cash grant to extreme
executives; and third, other special distinctions provided in poor households to allow the members of the families
the Code. Hence, it can no longer be considered as a to meet certain human development goals." A
“political unit directly affected” by the proposed division of Memorandum of Agreement executed by the DSWD
the province; and perforce, the qualified voters of the HUC with each participating LGU outlines in detail the
are properly excluded from the coverage of the plebiscite. obligation of both parties during the intended five-year
(Del Rosario vs. COMELEC, G.R. No. 247610, March 20, 2020). implementation. Congress, for its part, sought to ensure
the success of the 4Ps by providing it with funding. Does
PRINCIPLE OF LOCAL AUTONOMY this encroach upon the local autonomy of the LGUs?

The principle of local autonomy essentially means A: NO. The purpose of the delegation is to make governance
decentralization. Autonomy is either: more directly responsive and effective at the local
1. Decentralization of administration; or levels. But to enable the country to develop as a whole, the
2. Decentralization of power. programs and policies effected locally must be integrated
and coordinated towards a common national goal. Thus,
Decentralization policy-setting for the entire country still lies in the
President and Congress. While the Local Government Code
Decentralization is the devolution of national charges the LGUs to take on the functions and
administration, not power, to local governments. One form responsibilities that have already been devolved upon them
of decentralization is devolution, which involves the from the national agencies on the aspect of providing for
transfer of powers, responsibility, and resources for the basic services and facilities in their respective jurisdictions,
performance of certain functions from the central the same law provides a categorical exception of cases
government to the LGUs. It has been said that devolution is involving nationally-funded projects, facilities, programs

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Political Law
and services. The national government is, thus, not

precluded from taking a direct hand in the formulation and NOTE: A “no report, no release” policy may not be validly
implementation of national development programs enforced against offices vested with fiscal autonomy such as
especially where it is implemented locally in coordination Constitutional Commissions and local governments. The
with the LGUs concerned. (Pimentel, Jr. vs. Executive automatic release provision found in the Constitution
Secretary Ochoa, G.R. No. 195770, July 17, 2012) means that these local government units cannot be required
to perform any act to receive the “just share” accruing to
Presidential Power of General Supervision them from the national coffers. (Civil Service Commission v.
Department of Budget and Management, G.R. No. 158791,
The president’s power over LGUs is limited to supervision, July 22, 2005)
not control.
The 1987 Constitution is forthright and unequivocal in
The president exercises “general supervision” over the ordering that the just share of the LGUs in the national taxes
LGUs, but only to “ensure that local affairs are administered shall be automatically released to them. With Congress
according to law.” It means “overseeing or the authority of having established the just share through the LGC, it seems
an officer to see that the subordinate officer performs their to be beyond debate that the inclusion of the just share of
duties. If the subordinate officers fail or neglect to fulfill the LGUs in the annual GAAs is unnecessary, if not
their duties, the official may take such action or steps as superfluous. Hence, the just share of the LGUs in the
prescribed by law to make them perform their duties. (The national taxes shall be released to them without need of
Local Government Code Revisited, 2011 Ed., p. 14, Aquilino yearly appropriation. (Mandanas vs Ochoa. G.R. 199802, July
Pimentel Jr.) 3, 2018)

Dual Personality of LGUs POWERS OF LOCAL GOVERNMENT UNITS

LGUs have a dual personality: political and corporate. Being 1. TAXING POWER
political units of government and as agents of the national
government, LGUs exercise governmental powers. On the Nature of the power of taxation of LGUs
other hand, as a corporate entity, they exercise powers which

are proprietary in nature but which they can perform for the
benefit of their constituencies. (The Local Government Code Although the power to tax is inherent in the State, the same
Revisited 2011 ed., p. 62, Aquilino Pimentel, Jr.) is not true for the LGUs to whom the power must be
delegated by Congress and must be exercised within the
e.g. Under Philippine laws, the City of Manila is a political guidelines and limitations that Congress may provide.
body corporate and as such is endowed with the faculties of (Geron v. Pilipinas Shell, G.R. No. 18763, July 8, 2015)
municipal corporations to be exercised by and through its
city government in conformity with law, and in its proper ARMM’s taxing power
corporate name. It may sue and be sued, and contract and be
contracted with. Its powers are twofold in character – public,
governmental or political on the one hand, and corporate, The ARMM has the legislative power to create sources of
private and proprietary on the other. Governmental powers revenues within its territorial jurisdiction and subject to
are those exercised in administering the powers of the state the provisions of the 1987 Constitution and national laws.
and promoting the public welfare and they include the [1987 Constitution, Art. X, Sec. 20(2)]
legislative, judicial, public and political. Municipal powers on
the one hand are exercised for the special benefit and Main sources of revenues of LGUs (TFC-IRA-ES)
advantage of the community and include those which are
ministerial, private and corporate. (City of Manila v.
Intermediate Appellate Court, G.R. No. 71159, November 15, 1. Taxes, fees, and charges. (1987 Constitution Art. X, Sec.
1989) 5) (TFC)
2. Internal Revenue Allotment (IRA) - Just share in the
Local Fiscal Autonomy national taxes which shall be automatically released
to them. (1987 Constitution Art. X, Sec. 6)
Fiscal autonomy means that local governments have the
power to create their own sources of revenue in addition to NOTE: The current sharing is 40% local and 60%
their equitable share in the national taxes released by the national. The share cannot be reduced except if there is
national government, as well as the power to allocate their unmanageable public sector deficit.
resources in accordance with their own priorities. It
extends to the preparation of their budgets, and local
officials in turn have to work within the constraints thereof. Q: Mandanas, et al, alleged that the insertion by
They are not formulated at the national level and imposed Congress of the words internal revenue in the phrase
on local governments, whether they are relevant to local national taxes found in Section 284 of the LGC caused
needs and resources or not. Further, a basic feature of local the diminution of the base for determining the just
fiscal autonomy is the constitutionally mandated automatic share of the LGUs, and should be declared
release of the shares of local governments in the national unconstitutional as it contravened Section 6, Article X
internal revenue. (Province of Batangas v. Romulo, G.R. No. of the 1987 Constitution. Is limiting the LGU’s IRA to
152774, May 27, 2004) national internal revenue taxes contrary to the
Constitution?
Automatic release of LGU shares

The shares of the LGUs in the central government taxes and A: YES. Section 6, Article X the 1987 Constitution textually
in the proceeds of natural resources within their territories commands the allocation to the LGUs of a just share in the
shall be automatically and directly released to them. (The national taxes. Carrying out the provision’s mandate,
Local Government Code Revisited 2011 Ed., p. 129, Aquilino Congress enacted Section 284, Title III (Shares of Local
Pimentel Jr.) Government Units in the Proceeds of National Taxes), of the

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Political Law
LGC which says, “Section 284. Allotment of Internal Revenue Sanggunian shall be determined on the basis of
Taxes. - Local government units shall have a share in the the proportion of the votes obtained by each
national internal revenue taxes x x x” winning candidate to the total number of registered
voters in each district in the immediately preceding
local election. [LGC, Sec. 44 (d)(3)]
The phrase national internal revenue taxes engrafted in
Section 284 is undoubtedly more restrictive than the term NOTE: Should the Mayor’s CoC be denied or cancelled
national taxes written in Section 6. As such, Congress has subsequent to his proclamation because it was later found
actually departed from the letter of the 1987 Constitution that he is ineligible to run for the position, the candidate for
stating that national taxes should be the base from which the same position who garnered the next highest vote (not
the just share of the LGU comes. Such departure is the Vice Mayor) shall be proclaimed as the winner.
impermissible. Technically, such candidate is the first-placer for the reason
that a void CoC cannot produce any legal effect and
It is clear from the foregoing clarification that the exclusion therefore, an ineligible candidate is not considered a
candidate at all (Maquiling v. COMELEC, G.R No. 195649,
of other national taxes like customs duties from the base for April 16, 2013).
determining the just share of the LGUs contravened the
express constitutional edict in Section 6, Article X the 1987 b. DISCIPLINE
Constitution. (Mandanas v. Ochoa, G.R. No. 199802, July 3,
2018) DOCTRINE OF CONDONATION

3. Equitable share in the proceeds of the utilization and The abandonment of the condonation doctrine is
development of the national wealth within their areas. prospective and can still be invoked in cases prior to
(1987 Constitution Art. X, Sec. 7) (ES) Carpio Morales v. CA dated November 10, 2015

The Court’s abandonment of the condonation doctrine
2. LOCAL OFFICIALS should be PROSPECTIVE in application for the reason that
judicial decisions applying or interpreting the laws or the
a. VACANCIES AND SUCCESSION Constitution, until reversed, shall form part of the legal
system of the Philippines. Hence, while the future may
Rules of succession in case of permanent vacancies ultimately uncover the doctrine’s error, it should be, as a
(1995, 1996, 2002 BAR) general rule, recognized as “good law” prior to its
abandonment. Consequently, people’s reliance thereupon
A. In case of permanent vacancy in:
should be respected (Conchita Carpio-Morales v. Court of
1. Office of the Governor Appeals, G.R. No. 217126-27, November 10, 2015).

a. Vice-Governor; in his absence, It is not necessary for the official to have been re-elected
b. Highest ranking Sanggunian member; in case of to exactly the same position; what is material is that he
the permanent disability of highest ranking was reelected by the same electorate
Sanggunian member,
c. Second highest ranking Sanggunian member This Court had already clarified that the condonation
doctrine can be applied to a public officer who was elected to
2. Office of the Mayor a different position provided that it is shown that the body
politic electing the person to another office is the same. It is
a. Vice-Mayor; in his absence, not necessary for the official to have been reelected to exactly
b. Highest ranking Sanggunian member; in case of the same position; what is material is that he was reelected
the permanent disability of highest ranking by the same electorate. (Aguilar v. Benlot, G.R. No. 232806,
Sanggunian member, January 21, 2019).
c. Second highest ranking Sanggunian member
NOTE: Aguilar v. Benlot was pending during the
3. Office of the Vice Governor or Vice-Mayor abandonment by Carpio-Morales v. Court of Appeals of the
doctrine of condonation. Hence, the Supreme Court applied
a. Highest ranking Sanggunian member; in case of the condonation doctrine to Aguilar v. Benlot.
the permanent disability of highest ranking
Sanggunian member, NATIONAL ECONOMY AND PATRIMONY
b. Second highest ranking Sanggunian member ACQUISITION, OWNERSHIP AND TRANSFER OF PUBLIC
AND PRIVATE LANDS
NOTE: The highest ranking municipal councilor’s
succession to the office of vice-mayor cannot be Foreign nationals can own condominium units
considered a voluntary renunciation of his office as
councilor, since it occurred by operation of law. They can own Philippine real estate through the purchase
(Montebon v. COMELEC, G.R. No. 180444, April 8, of condominium units or townhouses constituted under the
2008) Condominium principle with Condominium Certificates of
Title as long as the alien interest in such corporation does
4. Office of the Punong Barangay not exceed the limits imposed by existing laws. (Sec. 5, RA
4726)
a. Highest ranking Sanggunian member; in
case of the permanent disability of highest It expressly allows foreigners to acquire condominium
ranking Sanggunian member, units and shares in condominium corporations up to not
b. Second highest ranking Sanggunian more than 40% of the total and outstanding capital stock of
member a Filipino-owned or controlled corporation. As long as the
60% of the members of this Condominium Corporation are
NOTE: For purposes of succession, ranking in the Filipino, the remaining members can be foreigners. (Jacobus

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Political Law
Bernhard Hulst v. PR Builders, Inc., GR No. 156364, September or to corporations or associations organized under the laws
25, 2008) of the Philippines at least 60% of whose capital is owned by
such citizens, nor shall such franchise, certificate or
FRANCHISES, AUTHORITY, AND CERTIFICATES FOR authorization be exclusive character or for a longer period
PUBLIC UTILITIES than 50 years…” (Tatad v. Garcia, G.R. No. 114222, April 6,

1995).
Public Utility

Exclusivity of a public utility franchise
A "public utility" is a business or service engaged in

regularly supplying the public with some commodity or
A franchise to operate a public utility is not an exclusive
service of public consequence such as electricity, gas, water,
private property of the franchisee. Under the Constitution,
transportation, telephone or telegraph service. (Sec. 13, CA
no franchisee can demand or acquire exclusivity in the
No. 146; National Power Corporation v. CA, GR No. 112702, operation of a public utility. Thus, a franchisee cannot
September 26, 1997) complain of seizure or taking of property because of the
Public utilities are privately owned and operated issuance of another franchise to a competitor (Pilipino
businesses whose services are essential to the general Telephone Corp. v. NTC, G.R. No. 138295, August 28, 2003).
public. They are enterprises which specially cater to the
needs of the public and conduce to their comfort and Foreigners who own substantial stockholdings in a
convenience. As such, public utility services are impressed corporation, engaged in the advertising industry,
with public interest and concern. (Kilusang Mayo Uno Labor cannot sit as a treasurer of said corporation (1989 BAR)
Center v. Garcia, LTFRB, GR No. 115381, December 23, 1994)
A treasurer of the corporation is an executive and managing
Operation of a Public Utility officer. The advertising industry is impressed with public
interest, and shall be regulated by law for the protection of
No franchise, certificate, or any other form of authorization consumers and promotion of the general welfare. The
for the operation of a public utility shall be granted except participation of foreign investors in the governing body of
to citizens of the Philippines or to corporations or entities in such industry shall be limited to their
associations organized under the laws of the Philippines at proportionate share in the capital thereof, and all the
least sixty per centum of whose capital is owned by such executive and managing officers of such entities must be
citizens, nor shall such franchise, certificate, or citizens of the Philippines. [Art. XVI, Sec 11 (2), 1987
authorization be exclusive in character or for a longer Constitution]
period than fifty years. (Sec. 11, Art. XII, 1987 Constitution)
Ownership requirement
Thus, only Filipino citizens or corporations at least 60% of
whose capital is Filipino owned are qualified to acquire a 1. Advertising- 70% of their capital must be owned by
franchise, certificate, or authorized to operate a public Filipino citizens [Art. XVI, Sec. 1(2)]
utility. 2. Mass Media- must be wholly owned by Filipino citizens
[Art. XVI, Sec. 11(1)]
Operation vs. Ownership of Public Utilities 3. Educational institutions- 60% of their capital must be
owned by Filipino citizens [Art. XIV, Sec. 4(2)]
The Constitution requires a franchise for the operation of a
public utility. However, it does not require a franchise Interpretation of the term “capital” as used in Sec. 11,
before one can own the facilities needed to operate a public Art. XII in determining compliance with the ownership
utility. requirement

Delegation of authority to grant franchise
Refers only to shares of stock entitled to vote in the election
GR: Under the Constitution, Congress has the authority to of directors, and only to common shares and not to the total
grant a public utility franchise outstanding capital stock comprising both common and
non-voting preferred shares.
XPN: In case of valid delegation of legislative authority to
some administrative agencies to issue franchises of certain Considering that common shares have voting rights which
public utilities. translate to control, as opposed to preferred shares which
usually have no voting rights, the term "capital" in Sec. 11,
Franchise requirement before one can operate a public Art. XII of the Constitution refers only to common shares.
utility (1994 BAR) However, if the preferred shares also have the right to vote
in the election of directors, then the term "capital" shall
The Constitution, in no uncertain terms, requires a include such preferred shares because the right to
franchise for the operation of a public utility. However, it participate in the control or management of the corporation
does not require a franchise before one can own the is exercised through the right to vote in the election of
facilities needed to operate a public utility so long as it does directors. In short, the term "capital" in Sec. 11, Art. XII of
not operate them to serve the public. the Constitution refers only to shares of stock that can vote
in the election of directors (Gamboa v. Sec. of Finance, G.R.
Sec. 11, Art. XII provides that, “No franchise, certificate or No. 176579, June 28, 2011).
any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines NOTE: The Constitution expressly declares as State policy
the development of an economy “effectively controlled” by

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Political Law
Filipinos. Consistent with such State policy, the Constitution 1. Laws of Peace. They govern normal relations between
explicitly reserves the ownership and operation of public States in the absence of war.
utilities to Philippine nationals, who are defined in the
Foreign Investments Act of 1991 as Filipino citizens, or 2. Laws of War. They govern relations between hostile or
corporations or associations at least 60% of whose capital belligerent states during wartime.
with voting rights belong to Filipinos (Gamboa v. Sec. of
Finance, ibid.). 3. Laws of Neutrality. They govern relations between a
non-participant State and a participant State during
State Take-Over of Business Affected with Public wartime or among non-participating States.
Interest; Requisites
Obligations Erga Omnes
The State may take over or direct the operation of any
privately owned public utility or business affected with An obligation of every State towards the international
public interest provided that: community as a whole. All states have a legal interest in its
compliance, and thus all States are entitled to invoke
1. There is national emergency;
responsibility for breach of such an obligation. (Case
2. The public interest so requires; and
Concerning the Barcelona Traction, ICJ 1970)
3. Under reasonable terms prescribed by it. (Sec. 17, Art.

XII, 1987 Constitution)
NOTE: Such obligations derive, for example, in
contemporary international law, from the outlawing of acts
Q: Charoen, a foreign-owned company engaged in
of aggression, and of genocide, as also from the principles
agribusiness, applied for registration with the Board of
and rules concerning the basic rights of the human person,
Investments (Board) as a new producer in the swine,
including protection from slavery and racial discrimination.
poultry, and fishery industries. The Alliance of
Some of the corresponding rights of protection have
Agribusinesses in the Philippines (AAP), an
entered into the body of general international law others
organization of domestic companies, assailed the
are conferred by international instruments of universal or
Board’s approval of the ABC’s applications for quasi-universal character. (Vinuya v. Romulo, G.R. No.
registration for being violative of the constitutional
162230, April 28, 2010)
provisions against foreign ownership of enterprises in

industries imbued with public interest. Is the
Examples of Obligations Erga Omnes
contention of AAP correct?

1. Outlawing of acts of aggression;
A. NO. The Constitution does not prohibit foreign
ownership of industries in the Philippines, save for certain 2. Outlawing of genocide;
industries, such as advertising, public utilities, mass media, 3. Basic human rights; and,
educational institutions, ownership of private lands, and 4. Protection from slavery and racial discrimination.
the exploration, development, and utilization of natural
resources. The Foreign Investments Act of 1991 declares Jus Cogens
that as much as 100% foreign ownership in domestic
enterprises may be allowed, except for industries in the Also referred to as ‘peremptory norm of general
negative list. In this regard, the Board does not place international law’.
“agriculture/agribusiness and fishery” in the negative lists
for a number of years already. Thus, agribusiness, not being
a nationalized or partly nationalized industry, may be made Literally means “compelling law.” A norm accepted and
the subject of foreign investment. (National Federation of recognized by the international community of States as a
Hog Farmers, Inc. v. Board of Investments, et al, G.R. No. whole as a norm from which no derogation is permitted and
205835, June 23, 2020, as penned by J. Leonen) which can be modified only by a subsequent norm of
general international law having the same character.
PUBLIC INTERNATIONAL LAW (Vienna Convention on the Law of Treaties, Art. 53)

Public International Law (PIL) Elements of Jus Cogens

It is a body of legal principles, norms, and processes which 1. A norm accepted and recognized by international
regulates the relations of States and other international community of states as a whole;
persons and governs their conduct affecting the interest of 2. No derogation is permitted; and,
the international community as a whole. (Magallona, 2005) 3. Which can only be modified by a subsequent norm
having the same character.
Private International Law (PRIL) or Conflict of Laws
Examples or Norms with Jus Cogens in character
It is that part of law which comes into play when the issue
before the court affects some fact, event or transaction that 1. Laws on genocide;
is so clearly connected with a foreign system of law as to 2. Principle of self-determination;
necessitate recourse to that system. (Sempio-Diy, Conflict of 3. Principle of racial non-discrimination;
Laws, 2004 ed., p. 1, citing Cheshire, Private International 4. Crimes against humanity;
Law, 1947 ed., p. 6) 5. Prohibition against slavery and slave trade;
6. Piracy; and
Grand Divisions of PIL (P-War-N) 7. Torture.


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Distinguish Jus Cogens from Erga Omnes Obligation make such rules applicable in the domestic sphere. It is
opposed to the doctrine of transformation, which states that
1. All jus cogens rules create erga omnes obligations while international law only forms a part of municipal law if
only some rules creating erga omnes obligations are accepted as such by statute or judicial decisions.

rules of jus cogens. NOTE: The doctrine of incorporation is adopted in our
Constitution under Art. II, Sec. 2 which states that “The
2. With regard to jus cogens obligations, the emphasis is Philippines… adopts the generally accepted principles of
on their recognition by the international community ‘as international law as part of the law of the land.”
a whole,’ whilst with regard to obligations erga omnes,
the emphasis is on their nature. Doctrine of Transformation

3. The legal consequences of violations or rules creating It provides that the generally accepted rules of international
erga omnes obligations differ from those of breach of law are not per se binding upon the state but must first be
embodied in legislation enacted by the lawmaking body and
the rules of jus cogens in that in addition to the
so transformed into municipal law. [Cruz, International Law
consequences deriving from a breach of erga omnes (2003 Ed.), p. 6]
obligations further consequences, specified in Art. 53 of
the Vienna Convention on the Law of Treaties (VCLT), Through the treaty-making power of the President, rules
follow from violations of the rules of jus cogens. and principles embodied in a treaty in force would be
transformed into Philippine law and shall become valid and
NOTE: Under Art. 53 of the VCLT, a treaty is void if, at the effective upon concurrence of at least two-thirds of all the
time of its conclusion, it conflicts with a jus cogens norm. Members of the Senate. (1987 Constitution, Art. VII, Sec. 21)
Also, if a new jus cogens rule emerges, any existing treaty
International Law vs. Municipal Law
which is in conflict with the rule becomes void and
terminates. BASIS INTERNATIONAL LAW MUNICIPAL LAW
Issued by a political
Ex Aequo Et Bono Enacting Adopted by states as a
superior for
Authority common rule of action.
observance.
The concept of ex aequo et bono literally means “according Regulate relations of
Regulate relations of
to the right and good” or “from equity and conscience.” Purpose states and other
individuals among
themselves or with
international persons.
A judgment based on considerations of fairness, not on their own states.
considerations of existing law, that is, to simply decide the Applies to the conduct
of States and
case based upon a balancing of the equities. (Brownlie, Applies to a single
international
2003) Scope of
organizations, their
country or nation and
Applicatio within a determined
relations with each
NOTE: Under Art. 38 (1)(c) of the Statute of the n territory and to its
other or, their relations
International Court of Justice (ICJ), equity is referred to as: inhabitants.
with persons, natural or
1) a general principle of international law; and 2) a way juridical.
of infusing elements of reasonableness and Derived principally
Consists mainly of
“individualized” justice whenever a law leaves a margin from treaties,
enactments from the
of discretion to a Court in deciding a case. Source(s) international customs
lawmaking authority
and general principles
of each state.
of law.
If the principle of equity is accepted, customary law may be
Remedy in Redressed thru local
supplemented or modified in order to achieve justice. Resolved thru state-to-
case of administrative and
(Kaczorowska, 4th Ed., 2010) state transactions.
violation judicial processes.
Collective responsibility
Under Art. 38(2) of the Statute of the ICJ, a decision may be Individual
Scope of Reason: because it
responsibility
made ex aequo et bono, i.e. the court should decide the case Respon- attaches directly to the

not on legal considerations but solely on what is fair and sibility state and not to its

reasonable in the circumstances of the case (equity nationals
contralegem). However, the parties must expressly Not subject to judicial
authorize the court to decide a case ex auquo et bono. notice before
international tribunals

Role in (Vienna Convention on
Art. 33 of the United Nations Commission on International Subject to judicial notice
Inter- the Law of Treaties,
Trade Law’s Arbitration Rules (1976) provides that the before international
national Art. 27; Permanent
arbitrators shall consider only the applicable law, unless tribunals.
Tribunals Court of International
the arbitral agreement allows the arbitrators to consider Justice, 1931, Polish
ex aequo et bono, or amiable compositeur. Nationals in Danzig
Case).
RELATIONSHIP BETWEEN INTERNATIONAL AND
NATIONAL LAW Types of Transformation Theories

Doctrine of Incorporation 1. Hard Transformation Theory. Only legislation can
transform international law into domestic law. Courts
It means that the rules of international law form part of the
law of the land and no further legislative action is needed to may apply international law only when authorized by
legislation; and,

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2. Soft Transformation Theory. Either a judicial or derive by being a member of the family of nations or by
legislative act of a state can transform International virtue of treaty stipulations.
Law into domestic law. Correlation of Reciprocity and the Principle of Auto-
Limitation
Rules to be observed in case there is conflict between
international law and domestic law When the Philippines enters into treaties, necessarily,
these international agreements may contain limitations on
Efforts should first be exerted to harmonize them, so as to Philippine sovereignty. The consideration in this partial
give effect to both since it is to be presumed that municipal surrender of sovereignty is the reciprocal commitment of
law was enacted with proper regard for the generally other contracting States in granting the same privilege and
accepted principles of international law in observance of immunities to the Philippines.
the Incorporation Clause in Section 2, Article II of the
Constitution. NOTE: For example, this kind of reciprocity in relation to
the principle of auto-limitation characterizes the
In a situation however, where the conflict is irreconcilable, Philippine commitments under WTO-GATT. (Ibid.)
and a choice has to be made between a rule of international
law and municipal law, jurisprudence dictates that SOURCES OF INTERNATIONAL LAW
municipal law should be upheld by the municipal courts for
the reason that such courts are organs of municipal law and 1. ARTICLE 38,
are accordingly bound by it in all circumstances. The fact INTERNATIONAL COURT OF JUSTICE STATUTE
that international law has been made part of the law of the
land does not pertain to or imply the primacy of The International Court of Justice, whose function is to
international law over national or municipal law in the decide in accordance with international law such disputes
municipal sphere. as are submitted to it, shall apply: (Article 38, Statute of the
International Court of Justice)
The doctrine of incorporation decrees that rules of
international law are given equal standing with, but are Primary Sources (2012 BAR)
not superior to, national legislative enactments.
Accordingly, the principle of lex posterior derogat priori 1. International conventions or treaties;
takes effect – a treaty may repeal a statute and a statute may 2. International custom; and
repeal a treaty. 3. The general principles of law recognized by civilized
nations
In states where the Constitution is the highest law of the
land, such as the Republic of the Philippines, both statutes Subsidiary Sources
and treaties may be invalidated if they are in conflict with
the Constitution. (Secretary of Justice v. Hon. Ralph C. 1. Judicial decisions; and
Lantion, G.R. No. 139465, January 18, 2000) 2. Teachings of the most highly qualified publicists of
various nations.
Pacta Sunt Servanda (2000 BAR)
NOTE: While primary sources create law, the subsidiary
International agreements must be performed in good faith. sources constitute evidence of what the law is.
A treaty engagement is not a mere moral obligation but
creates a legally binding obligation on the parties. A state International Conventions or Treaties
which has contracted a valid international agreement is
bound to make in its legislation such modification as may A treaty is an international agreement concluded between
be necessary to ensure fulfillment of the obligation states in written form and governed by international law,
undertaken. whether embodied in a single instrument or in two or more
related instruments and whatever its particular
Principle of Auto-Limitation (2006 BAR) designation. [Art. 2 (1)(a) of the Vienna Convention on the
Law of Treaties]
It is the doctrine where a state adheres to principles of
international law as a limitation/restriction to the (See discussions under the heading Treaties, and the Vienna
exercise of its sovereignty. Convention on the Law of Treaties)

NOTE: While sovereignty has traditionally been deemed International Custom or Customary International Law
absolute and all-encompassing on the domestic level, it is (CIL)
however subject to restrictions and limitations voluntarily
agreed to by the Philippines, expressly or impliedly, as a A custom is a practice which has grown between states and
member of the family of nations. By the doctrine of has come to be accepted as binding by the mere fact of
incorporation, the country is bound by generally accepted persistent usage over a long period of time. [Cruz,
principles of international law, which are considered to be International Law (2003 Ed.), p. 22]
automatically part of our own laws. Thus, sovereignty of a
state is not absolute on an international level. A customary rule requires the presence of two
elements:
Corollary, a state has agreed to surrender some of its
sovereign rights in exchange for greater benefits that it may

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1. An objective element (general practice) consisting of a Dissenting States.

relatively uniform and constant State practice; and,
XPN: Dissenting States are not bound by international
2. A psychological element consisting of subjective customs if they had consistently objected to it while the
conviction of a State that it is legally bound to behave in project was merely in the process of formation (Persistent
a particular way in respect of a particular type of Objector Rule).
situation. This element is usually referred to as the
opinio juris sive necessitates. Dissent, however protects only the dissenter and does not
apply to other States. A State joining the international law
No particular length of time is required for the formation of system for the first time after a practice has become
customary norms so long as the existence of the two customary law is bound by such practice.
elements of custom is manifest. [North Sea Continental Shelf
Cases (ICJ, 1969)] Persistent Objector Rule

The Objective Element – General Practice If during the formative stage of a rule of customary
international law, a State persistently objects to that
This is normally constituted by the repetition of certain developing rule it will not be bound by it. Once a customary
behavior on the part of a State for a certain length of time rule has come into existence, it will apply to all States except
which manifests a certain attitude, without ambiguity, any persistent objectors.
regarding a particular matter. Evidence of state practice
may include a codifying treaty, if a sufficient number of However, an objecting State, in order to rely on the
states sign, ratify, or accede. persistent objector rule, must: (1) raise its objection at the
formative stage of the rule in question; (2) be consistent in
However, as no particular duration is required for maintaining its objection; and, (3) inform other States of its
practice to become law, on some occasions, instant objection.
customs come into existence. For that reason, a few
repetitions over a short period of time may suffice or many This is particularly important with regard to a rule which
over a long period of time or even no repetition at all in so has been almost universally accepted. If a State remains
far as an instant custom is concerned. However, the shorter silent, its silence will be interpreted as acquiescence to the
the time, the more extensive the practice would have to be new rule.
to become law.
NOTE: The burden of proof is on the objecting State. The
A practice must be constant and uniform, in particular persistent objector rule does not apply if the CIL has already
with regard to the affected States, but complete evolved into a jus cogens rule.
uniformity is not required. It would suffice that conduct The relationship between treaties and international
is generally consistent with the rule and that instances of custom
practice inconsistent with the rule are treated as breaches
of that practice concerned, this will usually mean They co-exist, develop each other and, sometimes, clash. If
widespread but not necessarily universal adherence to the there is a clash between a customary rule and a provision of
rule. a treaty because they are of equal authority (except when
the customary rule involved is of a jus cogens nature
Indeed, custom may be either general or regional. General whereupon being superior it will prevail), the one which is
customs apply to the international community as a whole. identified as being the lex specialis will prevail. The lex
Local or regional customs apply to a group of States or just specialis will be determined contextually.
two States in their relations inter se.
Treaties resulting to rules of customary law
The Subjective Element – Opinio Juris Sive Necessitates
Treaties may give rise to rules of customary law when the
To assume the status of CIL, the rule in question must be following conditions are present:
regarded by States as being binding in law, i.e. that they are
under a legal obligation to obey it. 1. The provisions of the treaty should be fundamentally
norm-creating in character;
The main purpose of the opinio juris sive necessitates is to 2. Participation in the treaty or convention must include
distinguish between customary rule and mere usage those States whose interest would be affected by the
followed out of courtesy or habit. Usage, while also a long provision in question; and,
established way of doing things, is not coupled with opinio 3. Within the period of time since the adoption of the
juris (conviction that it is obligatory and right). treaty or convention, State practice must have been
both extensive and uniform.
NOTE: In the North Sea Continental Shelf Cases, the ICJ
stated that the party asserting a rule of customary NOTE: The party invoking the rule must be the one to prove
international law bears the burden of proving it meets both that the rule meets all the requirements for the creation of
requirements (objective and psychological elements). customary law

Binding effect of international customs The treaty may also reflect a custom in three ways:

GR: All States are bound by international customs, including 1. It may be declarative of a custom; or,

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2. It may crystallize a rule of custom in statu nascendi; or, Such works are resorted to by judicial tribunals not for the
3. It may serve to generate a rule of customary law in the speculation of their authors concerning what the law ought
future. to be, but for trustworthy evidence of what the law really
is. (Justice Gray in Paquete Habana case, 175 U.S. 677)
General Principles of Law
Requisites to be a most highly qualified publicist:
The general principles of law are mostly derived from the
law of nature and are observed by the majority of states 1. His writings must be fair and impartial representation
because they are believed to be good and just. [Cruz, of law; and,
International Law (2003 Ed.), p 24] 2. He/she acknowledged authority in the field.

These are rules derived mainly from natural law, observed, Burdens of Proof
and recognized by civilized nations. (Nachura, Outline
Reviewer in Political Law, p. 644) In the Corfu Channel Case (U.K. v. Albania, 1949), the ICJ set
out the burdens of proof applicable to cases before it.
Reference to such principles is taken whenever no
municipal law, custom or treaty is applicable, as directed The Applicant normally carries the burden of proof with
under Art. 38 of the ICJ. In order to exist, they must be respect to factual allegations contained in its claim by a
recognized by civilized nations. preponderance of the evidence.

NOTE: The main objective of inserting the third source in The burden falls on the Respondent with respect to factual
Art. 38 is to fill in gaps in treaty and customary law and to allegations contained in a crossclaim. However, the Court
meet the possibility of a non liquet. may draw an adverse inference if evidence is solely in the
control of one party that refuses to produce it.
Non liquet means the possibility that a court or tribunal Hard Law (2009 BAR)
could not decide a case because of a ‘gap’ in law.
Means binding laws; to constitute law, a rule, instrument or
e.g.: Burden of proof, admissibility of evidence, waiver, decision must be authoritative and prescriptive. In
estoppel, unclean hands, necessity, and force majeure. international law, hard law includes treaties or
international agreements, as well as customary laws.
Judicial Decisions These instruments result in legally enforceable
commitments for countries (states) and other international
As there is no binding authority of precedent in subjects.
international law, international court and tribunal cases do
not make law. Judicial decisions are, therefore, strictly Soft Law (2009 BAR)
speaking not a formal source of law. However, they clarify
the existing law on the topic and may, in some These are non-binding rules of international law. Soft law is
circumstances, create a new principle in international law. of relevance and importance to the development of
They can also be considered evidence of State practice. international law because it:

Judicial decisions, whether from international tribunals or 1. Has the potential of law-making, i.e. It may be a
from domestic courts, are useful to the extent they address starting point for later ‘hardening’ of non-binding
international law directly or demonstrate a general provisions (e.g. UNGA resolutions may be translated
principle. into binding treaties);
2. May provide evidence of an existing customary
Art. 59 of the Statute of the ICJ, provides that, “decisions of rule;
the courts have no binding force, except for the parties and 3. May be formative of the opinio juris or of state
in respect of the case concerned.” practice that creates a new customary rule;
4. May be helpful as a means of a purposive
This provision shows that: (1) the Decision of the ICJ has no interpretation of international law;
binding authority; and, (2) the ICJ does not make law. 5. May be incorporated within binding treaties but in
provisions which the parties do not intend to be
NOTE: In practice, the ICJ will follow the previous decisions binding;
so as to have judicial consistency, or if it does not follow, the 6. May in other ways assist in the development and
court will distinguish its previous decisions from the case application of general international law.
actually being heard. (Interpretation of Peace Treaties,
1950) NOTE: The importance of soft law is emphasized by the fact
that not only States, but also non-State actors participate in
Teachings of Authoritative Publicists (Including the international law-making process through the creation
Learned Writers) of soft law. Nevertheless, soft law is made up of rules lacking
binding force, and the general view is that it should not be
“Teachings” refer simply to the writings of learned scholars. considered as an independent, formal source of
However, Article 38(1)(d) of the ICJ is expressly limited to international law despite the fact that it may produce
teachings of “the most highly qualified publicists.” significant legal effects.


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Q: Ang Ladlad was incorporated in 2003, and first 3. EFFECTS OF ACTIONS OF ORGANS OF
applied for registration with the COMELEC in 2006. The INTERNATIONAL ORGANIZATIONS CREATED BY
application for accreditation was denied on the ground TREATY
that the organization had no substantial membership
base. On August 17, 2009, Ang Ladlad again filed a Effects of Actions of Organs of International
Petition for registration with the COMELEC. On Organizations Created by a Treaty
November 11, 2009, after admitting the petitioner’s
evidence, the COMELEC (Second Division) dismissed Although international organizations have personality in
the Petition on moral grounds. In this Petition before international law, their powers and privileges are by no
the Court, Ang Ladlad invokes that the Yogyakarta means like those of States. Their powers and privileges are
Principles - a set of international principles relating to limited by the constituent instrument that created them.
sexual orientation and gender identity, intended to (An Introduction to Public International Law, Bernas)
address documented evidence of abuse of rights of
lesbian, gay, bisexual, and transgender (LGBT) The Court goes on to point out that international
individuals, reflects binding principles of international organizations are subject of international law which do not,
law. Can the Court consider these principles as binding unlike States, possess a general competence. International
under international law? organizations are governed by the principle of speciality,
that is to say, they are invested by the States which create
A: NO, the Court cannot rely on the application of the them with powers, the limits of which are a function of the
Yogyakarta Principle. common interests whose promotion those States entrust to
them. (ICJ Advisory Opinion on the Use of Nuclear Weapons)
There are declarations and obligations outlined in said
Principles which are not reflective of the current state of Q: Iberian Energy Corporation (IEC) was incorporated
international law, and do not find basis in any of the sources in Canada and its shares of stocks were public listed in
of international law enumerated under Article 38(1) of the the New York Stock Exchange. IEC won a bid to supply
power for the entire Bahamas. A number of Americans
Statute of the International Court of Justice. Petitioner also bought shares of stocks in the IEC because the
has not undertaken any objective and rigorous analysis of anticipated good returns. However, the government of
these alleged principles of international law to ascertain the Bahamas was not satisfied with the performance of
their true status. IEC so it seized all its asset. The American stockholders
of IEC approached its government and sought its
International law is full of principles that promote assistance to recover their investments in IEC. The U.S.
international cooperation, harmony, and respect for human government instituted the claim on behalf the
rights, most of which amount to no more than well-meaning American stockholders against the government of
desires, without the support of either State practice or Bahamas before the International Court of Justice. Will
the action instituted by the U.S. government on behalf
opinio juris. These principles are at best - de lege ferenda -
its citizens against the Bahamas before the ICJ prosper?
and do not constitute binding obligations on the
Philippines. Much of contemporary international law is A: NO. The case instituted by the U.S. government against
characterized by the soft law nomenclature. the Bahamas before the ICJ will not prosper. In the case of
Belgium v. Spain, the ICJ ruled that the Belgian government
2. EFFECT OF UNITED NATIONS DECLARATIONS, lacked the standing to exercise diplomatic protection of
SECURITY COUNCIL RESOLUTIONS Belgian shareholders in a Canadian company with respect
to measures taken against that company in Spain. The Court
ruled on the side of the Spanish, holding that only the
Effect of United Nations Declarations/Resolutions
nationality of the corporation (the Canadians) can sue.

United Nations General Assembly (UNGA) resolutions are The case is important as it demonstrates how the concept of
formal expressions of the opinion or will of United Nations diplomatic protection under international law can apply
organs. UNGA resolutions are merely recommendations, equally to corporations as to individuals. (Belgium vs. Spain,
not laws, and thus not binding on member states. International Court of Justice, General List No. 50, February
5, 1970)
NOTE: But if they are supported by all the Sates, they are
expression of opinio juris communis. Resolutions can also INTERNATIONAL ENVIRONMENTAL LAW
be a reflection of what has become customary law. (An
Introduction to Public International Law, Bernas) Precautionary PrincipleNARY PRINCIPLE

Effect of Security Council Resolutions Principle 15 of the Rio Declaration, commonly known as the
Precautionary Principle states:

Pursuant to Art. 25 of the UN Charter, all members of the UN In order to protect the environment, the precautionary
agree to accept and carry out the decisions of the Security approach shall be widely applied by States according to
Council. While other organs of the United Nations make their capabilities. Where there are threats of serious
recommendations to member states, only the Security damage, lack of full scientific certainly shall not be used as a
Council has the power to make decisions that member reason for postponing cost-effective measures to prevent
states are then obligated to implement under the Charter. environmental degradation.
NOTE: This principle advocates that the potential harm
should be addressed even with minimal predictability at
hand. The Precautionary Principle requires a high degree of
prudence on the part of the stakeholders. Decision makers

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Political Law
are not only mandated to account for scientific uncertainty agriculture, and serious health hazards from consumption
but can also take positive action, e.g., restrict a product or of GM foods. For a biodiversity-rich country like the
activity even when there is scientific uncertainty. Philippines, the natural and unforeseen consequences of
contamination and genetic pollution would be disastrous
Under Rule 20 of the Rules of Procedure for Environmental and irreversible.
Cases, the Precautionary Principle is adopted as a rule of
evidence. The Supreme Court’s adoption of the The SC permanently stopped the field testing for BT Talong,
Precautionary Principle in the newly promulgated Rules of upholding the decision of the CA which stopped the field
Procedure for Environmental Cases affords plaintiffs a trials for the genetically modified eggplant. The SC is the
better chance of proving their cases where the risks of first in the world to adopt the precautionary principle
environmental harm are not easy to prove. regarding GMO products in its decision. (International
Service for the Acquisition of Agri-biotech Applications, Inc. v.
BT Talong Case Greenpeace Southeast Asia Philippines, G.R. No. 209271, July
26, 2016).
Q: Greenpeace Southeast Asia and farmer-scientist
coalition MASIPAG asked the CA to stop the planting of Polluter Pays Principle
BT (Bacillus thuringiensis) talong in test fields. CA,
citing the precautionary principle, granted the petition. It means that the party responsible for producing the
CA held that “the precautionary principle set forth pollutants must bear responsibility for shouldering the
under Section 1, Rule 20 of the Rules of Procedure for costs of the damage done to the environment. It is expressly
Environmental Cases is relevant, considering the stated in Principle 16 of the Rio Declaration on
Philippines' rich biodiversity and uncertainty Environment and Development: “National authorities
surrounding the safety of Bt talong. It noted the should endeavor to promote the internalization of
possible irreversible effects of the field trials and the environment costs and the use of economic instruments,
introduction of BT talong to the market, and found the taking into account the approach that the polluter should, in
existing regulations issued by the DA and the principle, bear the cost of pollution, with due regard to the
Department of Science and Technology (DOST) public interest and without distorting international trade
insufficient to guarantee the safety of the environment and investment”. (Rio Declaration, Principle 16)
and the health of the people.” The petitioners argue that
precautionary principle is not applicable considering
that the field testing is only a part of a continuing study
being done to ensure that the field trials have no
significant and negative impact on the environment.
There is thus no resulting environmental damage of
such magnitude as to prejudice the life, health,
property of inhabitants in two or more cities or
provinces. Is the CA correct?

A: YES. The CA is correct.

When there is lack of full scientific certainty in establishing
a causal link between human activity and environmental
effect, the court shall apply the precautionary principle in
resolving the case before it. The constitutional right of the
people to a balanced and healthful ecology shall be given the
benefit of the doubt. (Rule 20, Sec. 1, Rules of Procedure for
Environmental Cases)

For purposes of evidence, the precautionary principle
should be treated as a principle of last resort, where
application of the regular Rules of Evidence would cause in
an inequitable result for the environmental plaintiff — (a)
settings in which the risks of harm are uncertain; (b)
settings in which harm might be irreversible and what is
lost is irreplaceable; and (c) settings in which the harm that
might result would be serious.

When these features — uncertainty, the possibility of
irreversible harm, and the possibility of serious harm —
coincide, the case for the precautionary principle is
strongest. When in doubt, cases must be resolved in favor of
the constitutional right to a balanced and healthful ecology.
Parenthetically, judicial adjudication is one of the strongest
fora in which the precautionary principle may find
applicability.

Eggplants (talong) are a staple vegetable in the country and
grown by small-scale farmers, majority of whom are poor
and marginalized. While the goal of increasing crop yields
to raise farm incomes is laudable, independent scientific
studies revealed uncertainties due to unfulfilled economic
benefits from Bt crops and plants, adverse effects on the
environment associated with use of GE technology in

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AMENDMENTS AND REVISIONS OF THE CONSTITUTION

Amendment vs. Revision

BASIS AMENDMENT REVISION
Definition An isolated or piecemeal change by adding, deleting, A revamp or rewriting of the whole
or reducing without altering the basic principles instrument, altering the substantial
involved. entirety of the Constitution.

Tests to determine whether a proposed change is an amendment or a revision

1. Quantitative test

Is the proposed change so extensive in its provisions as to change directly the ‘substantial entirety’ of the Constitution
by the deletion or alteration of numerous existing provisions?

2. Qualitative test

Will the change accomplish such far reaching changes in the nature of our basic governmental plan as to amount to a
revision? (Lambino v. Comelec, G.R. No. 174153, October 25, 2006)

Procedure to Amend or Revise the Constitution:

BASIS CONSTITUENT ASSEMBLY CONSTITUTIONAL CONVENTION PEOPLE’S INITIATIVE
(ConAss) (ConCon)
How proposed By Congress, acting as 1. By Congress, upon a vote of 2/3 of By the people, upon a petition
Constituent Assembly upon ALL its members (to call for a thru a plebiscite (at least 12%
a vote of ¾ of ALL its ConCon); OR of the TOTAL number of
members (2014 Bar) 2. By Congress, upon a majority registered voters, of which
vote of ALL its members to submit every legislative district must be
to the Electorate the question of represented by 3% of the
calling a ConCon (+Plebiscite) registered voters therein (1987
(1987 Constitution, Art. XVII, Sec. 3) Constitution, Art. XVII, Sec. 2)
(+Full text of the proposed
amendments attached in the
NOTE: Although the law is NOTE: Although the law is silent on petition)
silent on whether the voting whether the voting is done
is done separately or separately or jointly, the prevailing NOTE: No amendment shall be
jointly, the prevailing view view is for separate voting as the authorized more than once
is for separate voting as the Congress is bicameral. every five years thereafter.
Congress is bicameral.
Coverage Amendment or Revision Amendment ONLY

Legal 1. Manner of Proposal; or Propositions can be declared
Questions 2. Manner of calling ConCon null and void for violation of the
(Subject to - This is a case where Congress, acting as a ConAss, calls for a Constitution.
Judicial ConCon but does not provide details for the calling of such ConCon,
Review) and Congress, in exercising its ordinary legislative power, may
supply such details.
Political Substance of the proposal.
Questions
Whether ConAss or ConCon should initiate the amendment or
revision.
Limits No amendment be authorized
oftener than once every 5
years (1987 Constitution, Art.
XVII, Sec. 2).


2021 GOLDEN NOTES 2021 & 2022

The Law Pertaining

to the State and Its
Relationship with
Its Citizens
PRE-WEEK NOTES 2020/21 BAR EXAMINATIONS

PART II: LABOR LAW & TAXATION LAW

ACADEMICS COMMITTEE

SECRETARY GENERAL: Maria Frances Faye R. Gutierrez
EXECUTIVE COMMITTEE: John Edward F. Fronda, Angel Isah M.
Romero, Kirby Anne C. Renia, Karen Abbie C. Aspiras, Jose Christian
Anthony I. Pinzon


LABOR LAW
PRE-WEEK NOTES

LABOR LAW COMMITTEE

COMMITTEE HEAD: Kiara Louise T. Baliwag

SUBJECT HEADS: Nicolo Bongolan, Patricia Cabaña, Beatrice Fangon

MEMBERS: Beya Marie Amaro, Jean Almira Bulong, Mary Ann
Crisostomo, John Matthew Cruel, Christian John Dela Cruz, Ivy Mikhaela
Ferriols, Danice Gan, Lovely Mae Macaraeg, Georjhia Czarinah Malaluan,
Riza Flor Mosquera, Dheza Penaranda, Angelica Roscea Quiambao,
Patricia Anne Recto, Monique Rens, Kharina Mar Salvador, Gian Justin
Verona

Atty. Teodoro Lorenzo A. Fernandez
ADVISER

Labor law
BASIC PRINCIPLES Social justice is “neither communism, nor despotism, nor

atomism, nor anarchy,” but the humanization of laws and
The State affirms labor as a primary social economic force. the equalization of social and economic forces by the
It shall protect the rights of workers and promote their State so that justice in its rational and objectively secular
welfare. (1987 Constitution, Art. II, Sec. 18) conception may at least be approximated. (Calalang v.
Williams, G.R. No. 47800 [1940])
Basic Rights of Workers Guaranteed by the Constitution
CONSTRUCTION IN FAVOR OF LABOR
1. Security of tenure;
2. Living wage; All doubts in the implementation and interpretation of the
3. Share in the fruits of production; provisions of this Code, including its implementing rules
4. Just and humane working conditions; and regulations, shall be resolved in favor of labor. (LC, Art.
5. Self-organization; 4)
6. Collective bargaining;
7. Collective negotiations; In case of doubt, all labor legislation and all labor contracts
8. Engage in peaceful concerted activities, including the shall be construed in favor of the safety and decent living for
right to strike; and the laborer. (NCC, Art. 1702)
9. Participate in policy and decision-making processes.
(1987 Constitution, Art. XIII, Sec. 3) Protection to Labor

Applicability of the Labor Code When the conflicting interests of labor and capital are
weighed on the scales of social justice, the heavier influence
GR: All rights and benefits granted to workers under the LC of the latter must be counter-balanced by the sympathy and
shall apply alike to all workers, whether agricultural or non- compassion the law must accord the underprivileged
agricultural. (LC, Art. 6) worker.

XPNs: This is in line with the express mandate of the Labor Code
1. Government Ees and the principle that those with less in life should have
2. Ees of government-owned and controlled more in law. (Eastern Shipping Lines v. POEA, G.R. No. 76633
corporations (GOCCs) created by special or original [1988])
charter
3. Foreign governments Limitation to Protection of Labor
4. International agencies
5. Corporate officers / intra-corporate disputes which 1. Recognition of management rights. The law also
fall under PD 902-A and now fall under the jurisdiction recognizes that management has rights which are also
of the regular courts pursuant to the Securities entitled to respect and enforcement in the interest of
Regulation Code. fair play. (St. Luke’s Medical Center Ees Ass’n v. NLRC,
6. Local water district except where the NLRC’s G.R. No. 162053 [2007])
jurisdiction is invoked.
7. As may otherwise be provided by the LC. 2. Principle of Non-Oppression. Neither capital nor
labor shall act oppressively against the other, or
Test to Determine the Applicability of the LC to GOCC; impair the interest or convenience of the public. (NCC,
‘Original Charter or Manner of Creation Test’ Art. 1701)

When a GOCC is created by a special charter, it is subject to BURDEN OF PROOF AND QUANTUM OF EVIDENCE
the provisions of the Civil Service Law while those
incorporated under the general Corporation Law is subject Summary of Rules Regarding Burden of Proof
to the provisions of the Labor Code. (PNOC-EDC v. Legardo,
G.R. No. 58494 [1989]) 1. Existence of Er-Ee Relationship: Employee
2. Fact of Dismissal: Employee
Labor Dispute between Government Employees 3. Validity of Dismissal: Employer

It is the Public Sector Labor-Management Council, not the Before the employer must bear the burden of proving that
DOLE, who shall hear the dispute. (EO No. 180, Sec. 15, June the dismissal was legal, the employee must first establish by
1, 1987) substantial evidence the fact of his dismissal from service.
If there is no dismissal, then there can be no question as to
Applicability without Er-Ee Relationship the legality or illegality thereof. (Remoticado v. Typical
Construction Trading Corp., G.R. No. 206529 [2018], as
The LC may apply even if the parties are not employers and penned by J. Leonen)
employees of each other. It is not correct to say that
employment relationship is a pre-condition to the Quantum of Evidence Required
applicability of the Code (e.g., illegal recruitment, misuse of
POEA license). (Azucena, Vol. 1, 2016, p. 33) As a rule, the quantum of proof required in labor
proceedings is substantial evidence, that is, relevant
SOCIAL JUSTICE evidence which a reasonable mind might accept as
adequate to justify or prove the conclusion. However, the
The State shall promote social justice in all phases of onus probandi to prove the validity of dismissal rests upon
national development. (1987 Constitution, Art. II, Sec. 10) the employer to prove that the dismissal of an employee is
for a just cause with clear and convincing evidence. This

2021 GOLDEN NOTES 2021 & 2022
Labor law
quantum of proof required is to give flesh and blood to the
security of tenure clause of the constitution. (Duty Free 2. Rules that fix the methodology and bind or restrict the
Phils. v. Tria, G.R. No. 174809 [2012]) party hired to the use of such means or methods.
These addresses both the result AND the means
EMPLOYER-EMPLOYEE RELATIONSHIP employed to achieve it and hence, employer-employee
relationship exists. (Insular Life Assurance Co. v. NLRC,
Existence of an Employment Relationship G.R. 84484 [1989])

Employment relationship is determined by law and not by The main determinant therefore is whether the rules set by
contract. (Insular Life Assurance Co. Ltd. v. NLRC, G.R. No. the employer are meant to control not just the results but
119930 [1998]) also the means and methods. (Orozco v. CA, G.R. 155207
[2008])
Er-Ee Relation as a Question of Law (Stipulation that No
Er-Ee Relationship Exists) NOTE: However, in certain cases the control test is not
sufficient to give a complete picture of the relationship
It is axiomatic that the existence of an Er-Ee relationship between the parties, owing to the complexity of such a
cannot be negated by expressly repudiating it in the relationship where several positions have been held by the
management contract and providing therein that the Ee is worker. The better approach is to adopt the two-tiered
an independent contractor when the terms of the test. (Francisco v. NLRC, G.R. No. 170087 [2006])
agreement clearly show otherwise. For, the employment
status of a person is defined and prescribed by law and Economic Dependency Test (Two-Tiered Test)
not by what the parties say it should be. In determining the
status of the management contract, the Four-Fold Test on This two-tiered test would provide us with a framework of
employment has to be applied. (Insular Life Assurance Co. analysis, which would take into consideration the totality of
Ltd. v. NLRC, G.R. No. 119930 [1998]) circumstances surrounding the true nature of the
relationship between the parties. This is especially
Er-Ee Relation as a Question of Fact appropriate in this case where there is no written
agreement or terms of reference to base the relationship on
The existence of an employer-employee relationship and due to the complexity of the relationship based on the
depends upon the facts of each case. (Social Security System various positions and responsibilities given to the worker
v. CA, G.R. No. 100388, Dec. 14, 2000) over the period of the latter’s employment. (ibid.)

TESTS TO DETERMINE EXISTENCE Elements

1. The putative Er’s power to control the Ee with respect
Four-Fold Test (indicia of determination)
to the means and methods by which the work is to be

accomplished (Four-fold test);
1. Selection and engagement of the employee;
2. The underlying economic realities of the activity or
2. Payment of wages;
relationship (economic reality test).
3. Power of dismissal; and

4. Power of control. (Azucena, Vol. 1, 2016 p. 189)
Proper Standard for Economic Dependence

It is the so-called “control test” that is the most important
The proper standard is whether the worker is dependent on
element.
the alleged Er for his continued employment in that line of

business.
Control Test

Mode of Compensation; Not Determinative Of Er-Ee
The control test assumes primacy in the overall
Relationship
consideration. There is an Er-Ee relationship when the

person for whom the services are performed reserves the
Piece-rate, boundary, and pakyaw are merely methods of
right to control not only the end achieved but also the
pay computation and do not prove whether the payee is an
manner and means used to achieve that end. (Television and
employee or not. (Azucena, Vol. 1, 2016, p. 197)
Production Exponents Inc. v. Servana, 542 SCRA 578 [2008])

Boundary-Hulog System
The power of control refers to the existence of power and

not necessarily to the actual exercise thereof. It is not
Under the boundary-hulog scheme, a dual juridical
essential for the employer to actually supervise the
relationship was created: that of employer-employee and
performance of duties of the employee; it is enough that the
vendor-vendee. The boundary system is a scheme by an
employer has the right to wield that power. (Republic v.
owner/operator engaged in transporting passengers as a
Asiapro Cooperative, G.R. No. 172101 [2007])
common carrier to primarily govern the compensation of

the driver, that is, the latter’s daily earnings are remitted to
Kinds of Control Exercised by an Er
the owner/operator less the excess of the boundary which

represents the driver’s compensation. Under this system,
Not every form of control will have the effect of establishing
the owner/operator exercises control and supervision over
an employer-employee relationship. Thus, a line should be
the driver. (Villamaria v. CA and Bustamante, G.R. No.
drawn between:
165881 [2006])

1. Rules that merely serve as guidelines, which aims
NOTE: Taxi or jeepney drivers under the “boundary”
ONLY to promote the result. In such case, no
system are Ees of the taxi or jeepney owners/operators;
employer-employee relationship exists.

2021 GOLDEN NOTES 2021 & 2022
Labor law
also the passenger bus drivers and conductors. (Jardin v. a. Pre-notice – the notice to apprise the employee
NLRC and Goodman Taxi, G.R. No. 119268 [2000]) of the particular acts or omissions for which
dismissal is sought and is considered as the
TERMINATION OF EMPLOYMENT proper charge;

TERMINATION BY EMPLOYER b. Post-notice – the notice informing the employee
of the employer’s decision to dismiss him which

notice must come only after the employee is
Coverage of Termination of Employment
given a reasonable period from receipt of the

first notice within which to answer the charge,
Applies to all establishments or undertakings whether for
and ample opportunity to be heard and defend
profit or not. (LC, Art. 293)
himself.

Termination is a broader concept that is used to denote
2. Hearing (opportunity to be heard) – the worker
dismissal or lay-off. It may also imply complete severance
may answer the allegations against him in the notice
of employer-employee relationship.
of dismissal within a reasonable period from receipt of

the notice of dismissal with the ample opportunity to
On the other hand, dismissal is a form of ending an
be heard.
employer-employee relationship initiated either by the

employee or employer.
3. Judgement/Decision to Dismiss – it should be in

writing and should clearly state all the reasons for
Lay-off is a termination initiated by the employer without
dismissal.
prejudice to reinstatement or recall of an employee who has

been temporarily separated brought about by adverse
NOTE: The burden of proving that the termination was for
economic conditions.
a valid or authorized cause shall rest on the Er. (LC, Art.

292[b])
Security of Tenure is the right not to be removed from one’s

job without valid cause and valid procedure. It extends to
Just Causes for Termination
regular as well as nonregular employment. (Kiamco v. NLRC,

G.R. No. 129449 [1999])
1. Serious misconduct or willful disobedience by the Ee

of the lawful orders of his Er or representative in
Power to Dismiss Not Absolute
connection with his work;

2. Gross and habitual neglect by the Ee of his duties;
GR: An employer can dismiss or lay-off an employee for just
3. Fraud or willful breach by the Ee of the trust reposed
and authorized causes enumerated under Art. 297 and Art.
in him by his Er or duly organized representative;
298 of the LC.
4. Commission of a crime or offense by the Ee against

the person of his Er or any immediate member of his
XPN: The right of an employer to freely discharge his
family or his duly authorized representative;
employees is subject to regulation by the State, in the
5. Other causes analogous to the foregoing. (LC, Art.
exercise of its paramount police power. (MERALCO v. NLRC,
297)
G.R. No. 78763 [1989])

Serious Misconduct
REQUISITES FOR VALIDITY
It is an improper or wrong conduct; the transgression of
Two-Fold Requirement for Lawful Dismissal some established and definite rule of action, a forbidden act,
a dereliction of duty, willful in character, and implies
1. Substantive – legality or illegality of the act of wrongful intent and not mere error in judgment. To be
dismissal (just and authorized causes) serious within the meaning and intendment of the law, the
2. Procedural – legality or illegality of the manner of misconduct must be of such grave and aggravated character
dismissal (due process; notice and hearing) and not merely trivial or unimportant. (Villamor Golf Club v.
Pehid, G.R. No. 166152 [2005])
SUBSTANTIVE DUE PROCESS
a. JUST CAUSE Elements:
1. It must be serious or of such a grave and aggravated
Basis character;
2. Must relate to the performance of the Ees’ duties;
As a measure of self-protection against acts inimical to its 3. Ee has become unfit to continue working for the Er.
interest, a company has the right to dismiss its erring (Philippine Aeolus Automotive United Corp. v. NLRC,
employees. An employer cannot be compelled to continue G.R. No. 124617 [2000])
employing an employee guilty of acts inimical to the
employer's interest, justifying loss of confidence in him. NOTE: A teacher exclaiming "anak ng puta" after having
(Yabut v. Meralco, G.R. No. 190436 [2012]) encountered a student is an unquestionable act of
misconduct. However, whether it is serious misconduct that
Procedural Requirements of Dismissal for Just Causes: warrants the teacher's dismissal will depend on the context
of the phrase's use.
1. Notice (two-notice rule) – the employer is required
to furnish an employee who is to be dismissed with 2 While uttering an expletive out loud in the spur of the
written notices before such termination: moment is not grave misconduct per se, the refusal to
acknowledge this mistake and the attempt to cause further

2021 GOLDEN NOTES 2021 & 2022
Labor law
damage and distress to a minor student cannot be mere them. (NBS v. CA, G.R. No. 146741 [2002])
errors of judgment. Petitioner's subsequent acts are willful,
which negate professionalism in his behavior. They b. Habitual neglect implies repeated failure to perform
contradict a professor's responsibility of giving primacy to one’s duties over a period of time, depending upon the
the students' interests and respecting the institution in circumstance. (JGB and Associates v. NLRC, G.R. No.
which he teaches. In the interest of self-preservation, 10939 [1996])
petitioner refused to answer for his own mistake; instead,
he played the victim and sought to find fault in a student XPN: An employee who was grossly negligent in the
who had no ill motive against him. Indeed, had he been performance of his duty, though such negligence committed
modest enough to own up to his first blunder, petitioner's was not habitual, may be dismissed especially if the grossly
case would have gone an entirely different way. (Adamson negligent act resulted in substantial damage to the
University Faculty and Employees Union, et al. v. Adamson company. (LBC Express v. Mateo, G.R. No. 168215 [2009])
University, G.R. No. 227070 [2020], as penned by J. Leonen)
Requisites of Poor Performance as a Ground for
Willful Disobedience Termination

Requisites: 1. Employer must prove that it has set standards of
performance expected of the employee;
1. The Ees assailed conduct must have been willful or 2. These standards must be reasonable and in
intentional, the willfulness being characterized by a connection with the employee’s work; and
wrongful and perverse attitude; and 3. There must be proof that the employee failed to meet
the standards despite the given reasonable
2. The disobeyed orders, regulations, or instructions of opportunity to meet the same.
the Er must be:
a. Reasonable and lawful Abandonment as a Just Cause for Termination
b. Sufficiently known to the Ee
c. In connection with the duties which the Ee has It means deliberate and unjustified refusal of an employee to
been engaged to discharge. (Cosep v. NLRC, G.R. resume his employment. It is a form of neglect of duty,
No. 124966 [1998]; Realda v. New Age Graphics, hence, a just cause for termination of employment by the
G.R. No. 192190 [2012]) employer.

Disobeying an Order to Transfer For a valid finding of abandonment, two (2) factors must be
present:
The refusal to obey a valid transfer order constitutes willful
disobedience of a lawful order of an employer. Employees 1. The failure to report for work, or absence without
may object to, negotiate, and seek redress against valid or justifiable reason; and
employers for rules or orders that they regard as unjust or 2. A clear intention to sever Er-Ee relationship, with the
illegal. However, until and unless these rules or orders are 2nd element as the more determinative factor, being
declared illegal or improper by competent authority, the manifested by some overt acts. (Sta. Catalina College
employees ignore or disobey them at their peril. But v. NLRC, G.R. No. 144483 [2003])
transfer should not result to demotion of rank, which is
tantamount to constructive dismissal. (Manila Pavilion NOTE: In case of abandonment, the ER is still required
Hotel v. Henry Delada, G.R. No. 189947 [2012]) under the law to notify the employee of his termination.
There is still a need to observe the two-notice rule and
Q. Is refusal to a promotion by an Ee an act of opportunity to be heard requirement. (New Puerto
insubordination or willful disobedience? Commercial v. Lopez, G.R. No. 169999 [2010])

A. NO. There is no law that compels an Ee to accept a Fraud or Willful Breach of Trust
promotion because a promotion is in the nature of a gift or
reward, which a person has the right to refuse. The exercise Fraud
of the Ee of the right to refuse a promotion cannot be
considered in law as insubordination or willful Fraud, in its general sense, is deemed to comprise anything
disobedience. (PT&T Corp. v. CA, G.R. No. 152057 [2003]) calculated to deceive, including all acts, omissions, and
concealment involving a breach of legal or equitable duty,
Gross and Habitual Negligence trust, or confidences justly reposed, resulting in damage to
another, or by which an undue and unconscientious
It implies a want or absence of or failure to exercise advantage is taken of another. Deceit is a species of fraud.
diligence that an ordinary prudent man would use in his (Galvez v. CA, G.R. No. 187919 [2012])
own affairs. However, such neglect must not only be gross
but must also be habitual in character. (DOLE Manual) Willful Breach of Trust

Degree of Negligence as a Just Cause for Termination A breach is willful if it is done intentionally, knowingly, and
purposely without justifiable excuse, as distinguished from
GR: Gross and habitual negligence. an act done carelessly, thoughtlessly, heedlessly and
inadvertently (Austria v. NLRC, G.R. No. 124382, Aug. 6,
a. Gross neglect is the want or absence of or failure to 1999). But loss of trust or confidence can be based on gross
exercise slight care or diligence, or the entire absence negligence. (School of the Holy Spirit of Quezon City v.
of care. It evinces a thoughtless disregard of Taguiam, G.R. No. 165565 [2008])
consequences without exerting any effort to avoid

2021 GOLDEN NOTES 2021 & 2022
Labor law
Requisites of Fraud or Willful Breach of Trust Requisites

1. There must be an act, omission, or concealment; 1. There must be an act or omission punishable/
2. The act, omission, or concealment involves a breach of prohibited by law; and
legal duty, trust, or confidence justly reposed; 2. The act or omission was committed by the employee
3. It must be committed against the employer or his/her against the person of the employer, any immediate
representative; and member of his/her family, or his/her duly authorized
4. It must be in connection with the employee’s work. representative. (Sec. 5.2 [f], D.O. No. 147-15)

Loss of Confidence NOTE: A criminal case need not be actually filed.
Commission of acts constituting a crime itself is sufficient.
There is loss of confidence when the employer has (National Labor Union, Inc. v. Standard Vacuum Oil Company.
reasonable ground or has basis to believe that the employee G.R. No. L-48170 [1941])
is responsible for the misconduct and the nature of his
participation renders him unworthy of the trust and Conviction not a Condition Sine Qua Non
confidence demanded by his position. Proof beyond
reasonable doubt is not required. (Jerusalem v. Keppel The conviction of an employee in a criminal case is not
Monte Bank, G.R. No. 169564 [2011]) indispensable to warrant his dismissal by his employer.
(Starlite Plastic Industrial Corporation v. NLRC. G.R. No.
Loss of Trust and Confidence as a Just Cause For 78491 [1989])
Termination:
Ratio: The quantum of evidence needed is merely
1. It applies only to cases involving: substantial evidence to terminate an employee under these
grounds.
a. Ees occupying positions of trust and
confidence (confidential and managerial Ees) Analogous Cases
– To this class belong managerial Ees, i.e., those
vested with the powers or prerogatives to lay Requisites
down management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign 1. There must be an act or omission similar to those
or discipline Ees or effectively recommend such specified just causes; and
managerial actions. 2. The act or omission was voluntary and/or willful on
the part of the employees. (Sec. 5.2 [g], D.O. No. 147-15)
Position of trust and confidence is one where a
person is entrusted with confidence on delicate E.g.:
matters, or with the custody, handling, or care and 1. Violation of company rules and regulations
protection of the employer’s property (Pandoy v. 2. Immorality, Drunkenness or Fighting inside the
NLRC, G.R. No. 67664 [1992]) and/or funds. premise
(Gonzales v. NLRC, 355 SCRA 197 [2001]) 3. Gross inefficiency
4. Illegally diverting Er’s products
b. Ees routinely charged with the care and 5. Failure to heed an order not to join an illegal picket
custody of the Er’s money or property – To this 6. Violation of safety rules and code of discipline
class belong cashiers, auditors, property 7. Theft of company property
custodians, etc., or those who, in the normal and
routine exercise of their functions, regularly Guidelines to Determine the Validity Of Termination
handle significant amounts of money or property.
(Mabeza v. NLRC, G.R. No. 118506 [1997]) Validity of termination per se is determined by compliance
with two-notice rule, hearing (opportunity to be heard),
2. The loss of trust and confidence must be based on and the presence of a just or authorized cause.
willful breach.
b. AUTHORIZED CAUSES
3. The act constituting the breach must be “work-related”
such as would show the Ee concerned to be unfit to Authorized causes – initiated by the employer’s exercise of
continue working for the Er. (Gonzales v. NLRC, G.R. No. management prerogative, who shall be liable to pay
131653 [2001]) separation pay as mandated by law. It does not usually
require delinquency or culpability on the part of the
4. It must be substantial and founded on clearly employee.
established facts sufficient to warrant the Ee’s
separation from employment. (Sulpicio Lines Inc. v. Authorized causes of termination by the Er:
Gulde, G.R. No. 149930 [2002])
1. Installation of labor-saving devices
5. Fraud must be committed against the Er or his 2. Redundancy
representatives. E.g.: 3. Retrenchment
a. Falsification of time cards 4. Closing or cessation of operation of the establishment
b. Theft of company property or undertaking
c. Unauthorized use of company vehicle 5. Disease

Commission of a Crime or Offense Installation of Labor-Saving Devices
(Automation)

2021 GOLDEN NOTES 2021 & 2022
Labor law
Automation is a management prerogative of replacing 3. Seniority (Phil. Tuberculosis Society, Inc. v. National
manpower with machine power in order to effect more Labor Union, G.R. No. 115414 [1998])
economy and greater efficiency in the method of
production. Redundancy vs. Retrenchment

Requisites for a Valid Automation REDUNDANCY RETRENCHMENT
Involves losses, closures or
1. Written notice to the employee and to the DOLE at Does not involve losses or cessation of operations of
least one (1) month before the intended date of the closing or cessation of establishment or
termination; operations of the undertaking due to serious
2. Payment of separation pay of at least one (1) month establishment. business losses or financial
for every year of service; reverses.
3. Good faith in the discharge of employees; and
4. Reasonable criteria to be used in implementing NOTE: In preventive retrenchment, retrenchment may be
automation. undertaken by the employer before losses are actually
sustained.
Redundancy
Closure of Business
It is the superfluity in the performance of a particular work.
It exists where the services of an Ee are in excess of what is Test for the Validity of Closure or Cessation of
reasonably demanded by the actual requirements of the Establishment or Undertaking
enterprise. (Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249
[1991]) To be a valid ground for termination the following must be
present:
Requisites of a Valid Redundancy
1. There must be a decision to close or cease operation of
1. Written notice served on both the Ees and the DOLE at the enterprise by the management;
least 1 month prior to separation from work; 2. The decision was made in good faith; and
2. Payment of separation pay equivalent to at least 1 3. There is no other option available to the employer
month pay or at least 1 month pay for every year of except to close or cease operations. (Sec. 5.4 [d], D.O.
service, whichever is higher; No. 147, s. of 2015)
3. Good faith in abolishing redundant position; and
4. Fair and reasonable criteria in ascertaining what Payment of Separation Pay in Case of Closure
positions are to be declared redundant. (DAP v. CA, G.R.
No. 165811 [2005]) Payment of separation pay is required only where closure
is neither due to serious business losses nor due to an act of
Retrenchment Government. (North Davao Mining Corp v. NLRC, G.R. No.
112546 [1996]; NFL v. NLRC, G.R. No. 127718 [2000])
It is the reduction of personnel usually due to poor financial
returns as to cut down on costs of operations in terms of Basis for Computation: Latest salary rate, unless reduced
salaries and wages to prevent bankruptcy of the company. by the employer to circumvent the law, in which case, it
(Poquiz, Vol. 2, 2018, p. 560) shall be based on the rate before its deduction. (IRR of LC,
Book IV, Rule I, Sec. 10)
Requisites of a Valid Retrenchment
Disease
1. Written notice served on both the Ee and the DOLE at
least 1 month prior to the intended date of It must be incurable within 6 months and the continued
retrenchment; employment is prohibited by law or prejudicial to his health
2. Payment of separation pay equivalent to at least one as well as to the health of his co-Ees with a certification from
month pay or at least 1/2 month pay for every year of the public health officer that the disease is incurable within
service, whichever is higher; 6 months despite due to medication and treatment.
3. Good faith in effecting retrenchment;
4. Proof of expected or actual losses; Entitlement to Reinstatement
5. To show that the employer first instituted cost
reduction measures in other measures in other areas An Ee suffering from a disease is entitled to a reinstatement,
of production before undertaking retrenchment as a provided he presents a certification by a competent public
last resort; and health authority that he is fit to return to work. (Cebu Royal
6. The Er used fair and reasonable criteria in Plant v. Deputy Minister, G.R. No. L-58639 [1987])
ascertaining who would be retained among the Ees.
(FASAP v. PAL, G.R. No. 178083 [2009]) Other Authorized Causes

Criteria in Selecting Employees to be Retrenched 1. Total and permanent disability of Ee
2. Valid application of union security clause
There must be fair and reasonable criteria to be used in 3. Expiration of period in term of employment
selecting Ees to be dismissed such as: 4. Completion of project in project employment
5. Failure in probation
1. Less preferred status; 6. Relocation of business to a distant place
2. Efficiency rating; 7. Defiance of return-to work-order
8. Commission of Illegal acts in strike

2021 GOLDEN NOTES 2021 & 2022
Labor law
9. Violation of contractual agreement
10. Retirement Purpose of the Two Notices Served to the Ee and the
DOLE 1 month Prior to Termination
PROCEDURAL DUE PROCESS
1. To give the Ees some time to prepare for the eventual
Q: What are the twin-requirements of due process loss of their jobs and their corresponding income, look
which the employer must observe in terminating or for other employment and ease the impact of the loss
dismissing an employee? Explain. (2009 BAR) of their jobs.
2. To give the DOLE the opportunity to ascertain the
A: The twin requirements of due process are notice and veracity of the alleged cause of termination. (PT&T
hearing to be given to the worker. There is likewise a two- Corp. v. NLRC, G.R. No. 147002 [2005])
notice requirement rule, with the first notice pertaining to
specific causes or grounds for termination and a directive to NOTE: Under the Omnibus Rules, reasonable opportunity
submit a written explanation within a reasonable period. means every kind of assistance that management must
The second notice pertains to notice of termination. accord to the Ees to enable them to prepare adequately for
Pursuant to Perez v. PT&T Company (G.R. No. 152048 their defense. This should be construed as a period of at
[2009]), the Court held that a hearing or conference is not least five (5) calendar days from receipt of the notice.
mandatory, as long as the employee is given “ample
opportunity to be heard”, i.e., any meaningful opportunity The essence of due process is simply an opportunity to be
(verbal or written) to answer the charges against him or her heard, or as applied to administrative proceedings, an
and submit evidence in support of the defense, whether in a opportunity to explain one’s side or an opportunity to seek
hearing, conference, or some other fair, just and equitable a reconsideration of the action or ruling complained of.
way. (PLDT v. Bolso, 530 SCRA 550 [2007])
EFFECT OF
POSSIBLE SITUATIONS LIABILITY OF EMPLOYER
TERMINATION
NO Liability
a. With Just or Authorized Cause
VALID
b. With Due Process
Separation Pay if for Authorized Cause
Reinstatement + Full Backwages
a. W/o Just or Authorized Cause
INVALID
b. With Due Process
If Reinstatement not possible — Separation Pay
Reinstatement + Full Backwages
a. W/o Just or Authorized Cause
INVALID
b. W/o Due
If Reinstatement not possible — Separation Pay
Liable for noncompliance with procedural requirements
a. With Just or Authorized Cause
VALID
b. W/o Due Process
Separation Pay if for Authorized Cause
NOTE: The Agabon ruling was modified by JAKA Food 4. Totality of infractions
Processing v. Pacot (G.R. No. 151378 [2005]), where it was 5. Nature of the business
held that: 6. First-offense rule
7. Principle of equity
1. If based on just cause (LC, Art. 297), but the Er failed 8. Principle of compassion and understanding
to comply with the notice requirement, the sanction to
be imposed upon him should be tempered because Separation Pay
the dismissal process was, in effect, initiated by an act
imputable to the Ee; and Separation pay refers to the amount due to the Ee who has
2. If based on authorized causes (LC, Art. 298), but the been terminated from service for causes authorized by law.
Er failed to comply with the notice requirement, the It is intended to provide the Ee with the wherewithal during
sanction should be stiffer because the dismissal the period he is looking for another employment. (Gabuay v.
process was initiated by Er’s exercise of his Oversea Paper Supply, G.R. No. 148837 [2004])
management prerogative.
Instances when Ee is Entitled to Separation Pay
Principle of Commensurate Penalty or Proportionality
Rule 1. When the termination of employment is due to causes
authorized by law (LC, Art. 298)
Employer’s directives must always be fair and reasonable, 2. When the severance of employment is caused by a
and the corresponding penalties, when prescribed must be disease, particularly when the Ee is found to be
commensurate to the offense involved and to the degree of suffering from any disease and whose continued
the infraction. (Moreno v. San Sebastian College-Recoletos, employment is prohibited by law or is prejudicial to
Manila, 550 SCRA 414 [2008]) his health and of his co-Ees (LC, Art. 299)
3. When the termination from service has been declared
Circumstances Affecting Validity of Dismissal illegal, but his reinstatement to his former position is
no longer feasible for some valid reason (Gabuay v.
1. Gravity of the offense Oversea Paper Supply, G.R. No. 148837 [2004])
2. Employment position
3. Length of service

2021 GOLDEN NOTES 2021 & 2022
Labor law
4. In case of pre-termination of employment contract in To gauge if constructive dismissal exists, the test is whether
job-contracting arrangement (D.O 18-02, Rules a reasonable person in the employee's standing was
Implementing Art. 106 – 109, LC) impelled to surrender his or her post under the given
5. Where separation pay is awarded as a measure of situation. It is a dismissal in disguise because the doing
social or compassionate justice (PLDT v. NLRC, G.R. No. equates to a "dismissal but made to appear as if it were not."
L-80609 [1988]) Hence, "the law recognizes and resolves this situation in
favor of employees in order to protect their rights and
Liability of Corporate Officers interests from the coercive acts of the employer." (Donna
Jacob v. First Step Manpower Int’l Services, Inc., G.R. No.
GR: Officers of a corporation are not personally liable for 229984 [2020], as penned by J. Leonen)
their official acts unless it is shown that they have exceeded
their authority. Burden of Proof in Constructive Dismissal

XPN: Where the incorporators and directors belong to a In case of a constructive dismissal, the employer has the
single family, the corporation and its members can be burden of proving that the transfer and demotion of an
considered as one in order to avoid its being used as an employee are for valid and legitimate grounds such as
instrument to commit injustice, or to further an end genuine business necessity. Failure of the employer to
subversive of justice. The shield of corporate fiction shall be overcome this burden of proof, the employee's demotion
pierced when it is deliberately and maliciously designed to shall no doubt be tantamount to unlawful constructive
evade financial obligations to employees. (Pabalan v. NLRC, dismissal. (SIMIFRU v. Baya, G.R. No. 188269 [2017])
G.R. No. 898799 [1990]) Officers, then, become personally
liable. Reliefs from Illegal Dismissal

NOTE: In labor cases, particularly, corporate directors and In case where the worker is illegally terminated, his
officers are solidarily liable with the corporation for the remedies are:
termination of employment of corporate employees done
with malice or in bad faith. (Uichico, et al. v. NLRC, et al., G.R. 1. Reinstatement without loss of seniority rights – Actual
No. 121434 [1997]) reinstatement or payroll reinstatement
2. Full backwages – means no deduction
PREVENTIVE SUSPENSION 3. Separation pay in lieu of reinstatement
4. Damages, including Attorney’s fees
It means that during the pendency of the investigation, the 5. 6% legal interest on monetary award
Er may place the Ee under preventive suspension leading to
termination when there is an imminent threat or a Forms of Reinstatement
reasonable possibility of a threat to the lives and properties
of the Er, his family and representatives as well as the 1. Actual or physical – The Ee should be reinstated to
offender’s co-workers by the continued service of the Ee. his position which he occupies prior to his dismissal
(Sec. 8, Rule XXIII, Book V, IRR) under the same terms and conditions prevailing prior
to his dismissal or separation or, if not longer
Duration of Preventive Suspension available, to a substantially equivalent position.

It should not last for more than 30 days. It can be extended 2. Payroll – The Ee although not admitted back to work,
provided the Ee’s wages are paid after the 30-day period. would nevertheless be included in the payroll and
Preventive suspension exceeding 30 days will amount to entitled to receive salary and other benefits as if she
constructive dismissal. were in fact working. (Azucena, 2016)

ILLEGAL DISMISSAL NOTE: Employer is given the option to reinstate either
actually or in payroll.

1. NO JUST OR AUTHORIZED CAUSE
Q: Is an illegally dismissed Ee entitled to reinstatement

as a matter of right?
Under the Labor Code, employers may only terminate

employment for a just or authorized cause and after
A: GR: YES.
complying with procedural due process requirements. In

illegal dismissal cases, the burden of proof that employees
XPNs: Proceeds from an illegal dismissal wherein
were validly dismissed rests on the employers. Failure to reinstatement is ordered but cannot be carried out as in the
discharge this burden means that the dismissal is illegal.
following cases:
(Julita Aldovino et al., v. Gold and Green Manpower et al. G.R.

No. 200811 [2019], as penned by J. Leonen)
1. Reinstatement cannot be effected in view of the long

passage of time or because of the realities of the
2. CONSTRUCTIVE DISMISSAL
situation;

2. It would be inimical to the Er’s interest;
It occurs when there is cessation of work because continued
3. When reinstatement is no longer feasible;
employment is rendered impossible, unreasonable, or
4. When it will not serve the best interest of the parties
unlikely as when there is a demotion in rank or diminution
involved;
in pay or when a clear discrimination, insensibility, or
5. Company will be prejudiced by reinstatement;
disdain by an Er becomes unbearable to the Ee leaving the
6. When it will not serve a prudent purpose;
latter with no other option but to quit. (The University of
7. When there is resultant strained relation (applies to
Immaculate Conception v. NLRC, G.R. No. 181146 [2011])
both confidential and managerial Ees only);


2021 GOLDEN NOTES 2021 & 2022
Labor law
8. When the position has been abolished (applies to Entitlement to backwages of the illegally dismissed Ee flows
managerial, supervisory and rank-and-file Ees) from law. Even if he does not ask for it, it may be given. (St.
Michael’s Institute v. Santos, G.R. No. 145280 [2001])
NOTE: In such cases, it would be more prudent to order
payment of separation pay instead of reinstatement. MONEY CLAIMS ARISING FROM ER-EE RELATIONSHIP
(Quijano v. Mercury Drug Corp., G.R. No. 126561 [1998])
Prescriptive Period for Filing Money Claims
Q: Is there any violation of the “No work, No pay” in
payroll reinstatement? Money claims arising from Er-Ee relations accruing during
the effectivity of the Labor Code shall be filed within three
A: Generally, yes. However, since it is the mandate of the (3) years from the time the cause of action accrued;
law, although it is harsh, there is no violation under the otherwise they shall be forever barred. (LC, Art. 306)
dictum of dura lex sed lex. (Poquiz, Vol. 2, 2018, p. 460)
WHEN NOT DEEMED DISMISSED;
Thus, while payroll reinstatement would in fact be EE ON FLOATING STATUS
unacceptable because it sanctions the payment of salaries to

one not rendering service, it may still be the lesser evil
An Employment is Not Deemed Terminated When:
compared to the intolerable presence in the workplace of an

unwanted employee. (Maranao Hotel v. NLRC, G.R. No.
1. There is a bona fide suspension of the operation of a
110027 [1994])
business or undertaking for a period not exceeding six

(6) months; or,
Order of Reinstatement
2. The fulfilment by the employee of a military or civic

duty. (LC, Art. 301)
An order for reinstatement entitles an Ee to receive his

accrued backwages from the moment the reinstatement
Floating Status
order was issued up to the date when the same was

reversed by a higher court without fear of refunding what
The floating status of an employee should last only for a
he had received. (Pfizer v. Velasco, G.R. No. 177467 [2011])
legally prescribed period of time. When that floating status

of an employee lasts for more than six (6) months, he may
Rule on Wages during Reinstatement Pending Appeal
be considered to have been illegally dismissed from the

service. Thus, he is entitled to the corresponding benefits
Dismissed Ee whose case was favorably decided by the LA
for his separation. (Agro Commercial Security Services
is entitled to receive wages pending appeal upon
Agency, Inc. v. NLRC, G.R. Nos. 82823-24 [1989])
reinstatement, which is immediately executory. Unless

there is a restraining order, it is ministerial upon the LA to
implement the order of reinstatement and it is mandatory TERMINATION BY EMPLOYEE
on the Er to comply therewith.
WITH NOTICE TO THE EMPLOYER
Wenphil Doctrine
An employee may terminate without just cause the Er-Ee
In case of payroll reinstatement, the reinstated employee is relationship by serving a written notice on the employer at
not required to return the salary he received during the least one (1) month in advance. The Er upon whom no such
period the lower court or tribunal declared that he was no notice was served may hold the Ee liable for damages.
illegally dismissed, even if the employer's appeal would (LC, Art. 300)
eventually be ruled in its favor. Such non-requirement to
reimburse salary presupposes that salary must in fact be WITHOUT NOTICE TO EMPLOYER
paid to the concerned employee when he or she is ordered
reinstated pending appeal. (Wenphil Corporation v. Abing, et An employee may put an end to the relationship without
al, G.R. No. 207983 [2014]) serving any notice on the employer for any of the following
just causes:
Doctrine of Strained Relations
1. Serious insult by the Er or his representative on the
It is when the Er can no longer trust the Ee and vice versa honor and person of the Ee;
or there were imputations of bad faith to each other; 2. Inhumane and unbearable treatment accorded by the
reinstatement could not effectively serve as a remedy. This Ee by the Er or his representative;
rule applies only to positions which require trust and 3. Commission of a crime or offense by the Er or his
confidence. (Globe Mackay v. NLRC, G.R. No. 82511 [1992]) representative against the person of the Ee or any of
the immediate members of his family; and
Separation Pay in Lieu of Reinstatement When: 4. Other causes analogous to any of the foregoing. (ibid.)

Doctrine of Strained Relations (applies to confidential and The abovementioned just causes could compel an Ee to
managerial Ees only) resign which metamorphoses into a case of constructive
dismissal. (Poquiz, Vol. 2, 2018, p. 571)
In case the position has been abolished (applies to both
managerial and rank and file Ees) DISTINGUISH VOLUNTARY RESIGNATION
AND CONSTRUCTIVE DISMISSAL
Backwages

Q: What is the difference between resignation and
constructive dismissal? (2019 BAR)

2021 GOLDEN NOTES 2021 & 2022
Labor law
A: First, Resignation is at the instance of the employee, declaring that there is an Er-Ee relationship between the
whereas constructive dismissal is at the instance of the principal and the employees of the supposed contractor,
employer. and the labor-only contractor is considered as a mere agent
of the principal, the real employer. (Allied Banking Corp. v.
Second, Resignation is voluntary, whereas in constructive Reynold Calumpang, G.R. No. 219435 [2018])
dismissal there is vitiated consent.
Confirming Elements
Third, Resignation means no separation pay, whereas
constructive dismissal means payment of separation pay and To have labor-only contracting, the essential element of
damages. supplying workers to another is not enough. To it must be
added either one of two confirming elements:
Fourth, Resignation must be at least with 30 days’ notice on
the part of the employee, whereas in constructive dismissal 1. Lack of substantial capital or investment and
the employee can leave anytime. performance of activities directly related; or
2. The contractor does not exercise control over the
NOTE: There is no provision in the Labor Code that grants performance of the employees. (Azucena, Vol. I, 2016,
separation pay to voluntarily resigning Ee, except when it p. 369)
is stipulated in the employment contract, a collective
bargaining agreement (CBA), or it is sanctioned by NOTE: If the essential element is absent, there can be no
established policy or practice. (“J” Marketing Corp. v. Taran, LOC. And even, if the essential element is present, but
G.R. No. 163924 [2009], as cited in Poquiz, Vol. 2, 2018, p. 576) confirming element one or two is absent, there is still no
LOC. (Azucena, Vol. I, 2016, p. 369)
Withdrawal of Resignation
RIGHTS OF EMPLOYEES; MEMBERSHIP IN UNIONS
Resignation is withdrawable even if the employee has called
it irrevocable. (Custodio v. Ministry of Labor and RIGHT TO SELF ORGANIZATION
Employment, G.R. No. 643174 [1990]) But after it is accepted

or approved by the employer, its withdrawal needs the
Refers to the right of workers and employees to form, join
employer’s consent. (Azucena, 2016)
or assist unions, organizations or associations for purposes

of collective bargaining and/or for mutual aid and
Resignation, a “Win-Win” Solution
protection, including the right to engage in peaceful

concerted activities and participate in policy-decision
Where the Ee negotiated for an improvement of the
making processes affecting their rights and benefits.
resignation package and he managed to obtain an

acceptable one, resignation is a “win-win” solution because
Extent of the Right to Self-organization
it was the product of a mutually beneficial arrangement. An

Ee cannot later on claim that he was “tricked or was morally
It includes at least two (2) rights:
or psychologically hoodwinked to draft, sign and tender his
1. The right to form, join or assist labor organizations;
resignation letter.” (Gan v. Galderama Phils., Inc., G.R. No.
and
17767 [2013])
2. The right to engage in lawful concerted activities. (LC,

Art. 257)
“LABOR-ONLY” CONTRACTING

Purpose of Exercise of Right to Self-organization
Labor-only contracting refers to an arrangement where

the contractor, who does not have substantial capital or
1. Collective bargaining; and
investment in the form of tools, equipment, machineries,
2. Mutual aid and protection (LC, Art. 257)
work premises, among others, supplies workers to an

employer and the workers recruited are performing
activities which are directly related to the principal WHO MAY OR MAY NOT EXERCISE THE RIGHT
business of such employer. (LC, Art. 106)
Who May Exercise the Right
It is a prohibited act, an arrangement where the contractor
or subcontractor merely recruits, supplies or places 1. All persons employed in commercial, industrial and
workers to perform a job, work or service for a principal. agricultural enterprises and in religious, charitable,
medical, or educational institutions, whether
Essential Elements of Labor-Only Contracting operating for profit or not (LC, Art. 253);
2. Ambulant, intermittent and itinerant workers, self-
1. The contractor or subcontractor does not have employed people, rural workers and those without
substantial capital or investment to actually perform any definite employers may form labor organizations
the job, work or service under its own account and for their mutual aid and protection (ibid.);
responsibility; and 3. Supervisory Ees;

2. The employees recruited, supplied or placed by such NOTE: Supervisory Ees shall not be eligible for
contractor or subcontractor are performing activities membership in the collective bargaining unit of rank-
which are directly related to the main business of the and-file employee but may join, assist, or form
principal. (Sasan v. NLRC, G.R. No. 176240 [2008]) separate collective bargaining unit and/or labor
organizations of their own. (LC, Art. 255)
NOTE: A finding that a contractor is a labor-only contractor,
as opposed to permissible job contracting, is equivalent to

2021 GOLDEN NOTES 2021 & 2022
Labor law
4. Security guards (MERALCO v. SOLE, G.R. No. 91902 of management prerogatives”. Considered negotiable are
[1991]); such matters as schedule of vacation, leaves, etc. (Azucena,
5. Employee – non-member of a cooperative (Central Vol. 2, 2016, p. 261)
Negros Electric Cooperative, Inc. v. SOLE, G.R. No.
94045 [1991]); COMMINGLING OR MIXTURE OF MEMBERSHIP
6. Homeworkers (Secs. 3-4, D.O. 5, Feb. 4, 1992);
7. Ees of government corporations established under Categories of Employees (in the Private Sector)
the Corporation Code (LC, Art. 254);
8. Alien Ees with valid working permits; and 1. Managerial
2. Supervisory
NOTE: The alien Ees must have valid working 3. Rank-and-file
permits issued by the DOLE and must be nationals of
a country which grants the same or similar rights to Categories of Employees (in the Government)
Filipino workers, as certified by the DFA, or which
has ratified ILO Conventions No. 87 and 98. (LC, Art. 1. High level or managerial
284) 2. Rank-and-file

9. Confidential Ees who do not give access or is not NOTE: Professors who are not exercising managerial or
allowed access to confidential labor relations highly confidential functions are rank-and-file employees.
information or whose access to confidential labor They may organize themselves into a separate collective
relations information is merely incidental in the bargaining unit, if so minded, considering that mutuality of
performance of their functions. (SMC Supervisors and interest is wanting between the academic and nonacademic
Exempt Employees Union v. Laguesma, 277 SCRA 370 personnel of the university. (UP v. Ferrer-Calleja, G.R. No.
[1997]; Poquiz, Vol. 2, 2018, pp. 191-193) 96189 [1992])

Who CANNOT Form, Join or Assist Labor Organizations Supervisory employees may join the same federation or
national union of rank-and-file employees
1. Managerial Ees;
2. Confidential Ees (in the field of labor relations); The rank-and-file union and the supervisors’ union
3. Ees of international organizations; operating within the same establishment may join the same
4. Employee-members of a cooperative; federation or national union. (LC, Art. 255)
5. Members of AFP, police officers, policemen, firemen,
and jail guards; Effect of Inclusion as Members of Ees Outside the
6. High level government employees. Bargaining Unit

Religious Objectors can Form and Join their Own union The inclusion as union members of employees outside the
bargaining unit shall not be a ground for the cancellation of
Recognition of the tenets of a sect should not infringe on the the registration of the union. Said employees are
basic right to self-organization granted by the Constitution automatically deemed removed from the list of
to workers, regardless of religious affiliation. (Kapatiran sa membership of said union. (LC, Art. 256; as amended by RA
Meat and Canning Division v. Hon. Pura Calleja, G.R. No. L- 9481) Such mixed membership shall not be a ground for
82914 [1988]) cancellation of union registration. (Poquiz, Vol. 2, 2018, p.
209)
NOTE: Religious objectors also have the right to vote in a
certification election. (Reyes v. Trajano, G.R. No. 84433 Registration of a Union
[1992])
A labor organization may be registered or not. If registered,
Government Ees have the Right to Self-organization it is considered “legitimate labor organization” (LLO).
However, a labor organization is not “illegitimate” just
The highest law of the land guarantees to government because it is unregistered. It is still a lawful organization but
employees the right to organize and to negotiate, but not the it has no legal personality to demand collective bargaining
right to strike. (Azucena, Vol. 2, 2016, p. 259) The right to with the employer. (Azucena, Vol. 2, 2016, p. 186-187)
self-organization of government employees pertains to all
branches, subdivision, instrumentalities and agencies of the NOTE: It is the fact of being registered with DOLE that
Government, including GOCCs with original charters. (E.O. makes a labor organization legitimate. Registration under
No. 180) the corporation law before the Securities and Exchange
Commission (SEC) only has the effect of giving it juridical
Government Ees’ Right to Organize is for a Limited personality to represent itself in regular courts but it does
Purpose not grant the rights and privileges of a legitimate labor
organization. (Phil. Land-Sea-Air Labor Union, Inc. v. CIR, 93
Only terms and conditions not fixed by law may be the Phil. 747)
subject of negotiation by the duly recognized employees’
RIGHTS AND CONDITIONS OF MEMBERSHIP
organization of government employees and the appropriate
government authorities. Terms and conditions of
employment that are fixed by law are excluded from Membership in the Union does not necessarily mean
negotiation. (E.O. No. 180) coverage in the CBA

Declared to be “not negotiable” are matters “that require Inclusion or coverage in the CBA depends on the
appropriation of funds” and “those that involve the exercise stipulations in the CBA itself. It is the CBA which defines its

2021 GOLDEN NOTES 2021 & 2022
Labor law
coverage as agreed by the parties. Qualifying for union Payments used for a special purpose. Especially if required
membership does not necessarily mean inclusion in the only for a limited time. (ibid., p. 237)
coverage of the CBA.
Requisites to Collect Special Assessment
Membership in the CBU does not mean membership in
the union No special assessments, attorney’s fees, negotiation fees or
any other extraordinary fees may be checked off from any
Inclusion or membership in the union depends on the amount due to an employee unless there is:
union’s constitution and by-laws. Inclusion in the collective 1. Authorization by a written resolution of the majority
bargaining unit (CBU) depends on the determination of its of all members at the general membership meeting
appropriateness. duly called for that purpose;
2. Secretary’s record of the minutes of the meeting;
Affiliation/Disaffiliation 3. Individual written authorization for check-off duly
signed by the employee concerned. (ABS-CBN
A local union may affiliate with or disaffiliate from a Supervisors Employees Union Members v. ABS-CBN
federation. This is an exercise of the right of association Corp., G.R. No. 106518 [1999])
recognized by the Constitution.
The authorization should specify the:
Between the chapter and the federation, affiliation or 1. Amount;
disaffiliation is a contractual relation. Hence, even if 2. Purpose; and
disaffiliation is a matter of right, the local must comply with 3. Beneficiary of the deduction.
the obligations under the CBL such as manner and period of
notice. Union dues

Disaffiliation of Local Union from the Federation These are regular monthly contributions paid by the
members to the union in exchange for the benefits given to
GR: A labor union may disaffiliate from the mother union to them by the CBA and to finance the activities of the union in
form an independent union only during the 60-day freedom representing the union.
period immediately preceding the expiration of the CBA.
Union Dues vs. Agency Fees
XPN: Even before the onset of the freedom period,
disaffiliation may still be carried out, but such must be UNION DUES AGENCY FEES
effected by the majority of the union members in the Collected by the union from non-
bargaining unit. Collected from members belonging to the same
union members bargaining unit who receive the
Disaffiliation must be by Majority Decision benefits under the CBA.

There must be an
Disaffiliation has to be decided by the entire membership Can be assessed even without the
individual written
through secret balloting in accordance with Art. 250(d). written authorization of the
authorization by
employee concerned.
individual members.
Substitutionary Doctrine

This doctrine holds that the employees cannot revoke the COLLECTIVE BARGAINING
validly executed collective bargaining contract with their
employer by the simple expedient of changing their DUTY TO BARGAIN COLLECTIVELY
bargaining agent. The new agent must respect the contract.
The employees, thru their new bargaining agent, cannot The duty to bargain collectively means the performance of
renege on the collective bargaining contract, except to a mutual obligation to meet and convene promptly and
negotiate with the management for the shortening thereof. expeditiously in good faith for the purpose of:
(Elisco-Elirol Labor Union, G.R. No. L-41955 [1977])
1. Negotiating an agreement with respect to wages,
Note that the only consideration for the “substitutionary” hours of work and all other terms and conditions of
doctrine is the employer’s interest in the existing employment;
bargaining agreement, the agent’s (union’s) interest never 2. Including proposals for adjusting any grievances or
enters into the picture. (Poquiz, Vol. 2, 2018, p. 259, citing questions arising under such agreement; and
Benguet Consolidated Inc v. BCI Employees and Workers 3. Executing a contract incorporating such agreements if
Union, G.R. L-24711 [1968]) requested by either party but such duty does not
compel any party to agree to a proposal or to make any
RIGHTS OF LABOR ORGANIZATIONS concession. (LC, Art. 263)
4. Negotiation over the terms of a new contract or

proposed modifications, when an existing agreement
CHECK OFF, ASSESSMENT, AGENCY FEES is validly opened for negotiations (Azucena, Vol. 2,
2016, p. 374)
Check-off
Jurisdictional Preconditions of Collective Bargaining:
It is a method of deducting from an Ee’s pay at a prescribed
period, the amounts due the union for fees, fines and 1. Possession of the status of majority representation of
assessments. the employees’ representative;
2. Proof of majority representation; and
Assessments

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3. A demand to bargain.
NOTE: Failure to register the CBA does not make it invalid
NOTE: An employer’s duty to recognize and bargain or unenforceable. Once it is duly entered into and signed by
collectively with a union does not arise until the union the parties, a CBA becomes effective as between the parties
requests the employer to bargain. whether or not it has been certified by the BLR. (Liberty
Flour Mills Employees Association v. Liberty Flour Mills, G.R.
Q: When should bargaining begin and when should it Nos. 58768-70 [1989]) However, its non-registration
end? renders the contract-bar rule inoperative.

A: It begins when the three (3) jurisdictional preconditions Ratification of the CBA
are present, the collective bargaining should begin within
the 12 months following the determination and certification GR: The agreement negotiated by the employees' EBR
of the employees’ exclusive bargaining representative. The should be ratified or approved by the majority of all the
period is known as certification year. workers in the bargaining unit. The proper ratifying group
is not the majority union but the majority of all the workers
The law encourages expeditious and good-faith in the bargaining unit represented by the negotiation.
negotiations but fixes no time limit for completion of the
negotiation. The law dictates no deadline. It depends upon XPN: Ratification of the CBA by the employees is not needed
the will and agreement of the negotiating panels. (Azucena, when the CBA is a product of an arbitral award by a proper
Vol. 2, 2016, p. 382-383) government authority (LC, Art. 278 [g]) or a voluntary
arbitrator. (LC, Art. 275)
Q: Differentiate “surface bargaining” from “blue-sky
bargaining.” (2010 BAR) Effectivity

A: SURFACE BARGAINING is defined as “going through the The effectivity date depends on whether the CBA is the first
motions of negotiating” without any legal intent to reach an CBA or a renegotiated CBA.
agreement. The determination of whether a party has
engaged in unlawful surface bargaining is a question of the 1. First CBA - Effectivity date depends upon the
intent of the party in question, which can only be inferred agreement of the parties.
from the totality of the challenged party’s conduct both at
and away from the bargaining table. It involves the question NOTE: The determining point is the date the parties
of whether an employer’s conduct demonstrates an agreed, not the date they signed.
unwillingness to bargain in good faith or is merely hard
bargaining. (Standard Chartered Bank Employees Union 2. Renegotiated CBA - If within six (6) months from the
(NUBE) v. Confesor, 432 SCRA 308 [2004]) expiry date of the old CBA, then the new CBA starts to
take effect on the date following such expiry date. If
BLUE-SKY BARGAINING is defined as “unrealistic and beyond six (6) months, the retroaction date will have
unreasonable demands in negotiations by either or both to be agreed upon by the parties.
labor and management, where neither concedes anything
and demands the impossible.” (ibid.) NOTE: The date is important particularly in relation to
wage increase because a long retroaction period will mean
Deadlock sizeable back pay to employees.

It is synonymous with impasse or a standstill which Duration of a CBA
presupposes reasonable effort at good faith bargaining but
despite noble intentions does not conclude an agreement 1. Economic and Non-Economic Aspect – may last for a
between the parties. maximum period of 3 years after the execution of the
CBA.
Remedies in Case of Deadlock 2. Representation Aspect – may last for 5 years. It
refers to the identity and majority status of the union
The parties, during renegotiation, may: that negotiated the CBA as the exclusive bargaining
representative.
1. Call upon the NCMB to intervene for the purpose of
conducting conciliation or preventive mediation; 60-Day Freedom Period (Representative Aspect)
2. Refer the matter for voluntary arbitration or
compulsory arbitration; During the 60-day freedom period:
3. Declare a strike or lockout upon compliance with the
legal requirements (this remedy is a remedy of last 1. A labor union may disaffiliate from the mother union
resort). to form a local or independent union only during the
60-day freedom period immediately preceding the
COLLECTIVE BARGAINING AGREEMENT expiration of the five-year term of the CBA.
2. Either party can serve a written notice to terminate or
Refers to a contract executed upon request of either the modify agreement at least 60 days prior to the
employer or the exclusive bargaining representative of the expiration of the five-year term of the CBA.
employees incorporating the agreement reached after 3. A PCE may be filed.
negotiations with respect to wages, hours of work and all
other terms and conditions of employment, including 60–Day Notice Period (Non-representative Aspect)
proposals for adjusting any grievances or questions under
such agreement.

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The freedom period under Art. 265 & 268 is different from XPN: Otherwise limited by law, contract, and principles of
the other 60-day period mentioned in Art. 264. The latter fair play and justice.
speaks of the right of the parties to propose modifications
to the existing CBA, as an exception to the rule that the CBA So long as the company’s prerogatives are exercised in good
cannot be modified during its lifetime, within 60 days prior faith for the advancement of the employer’s interest and not
the expiration of its economic/non-economic aspect. This 60- for the purpose of defeating or circumventing the rights of
day period does not and cannot refer to the representative the employees under special laws or under valid
status of the incumbent union since the acquisition or loss agreements, the SC will uphold them. (San Miguel Brewery
of representative status is to be resolved through CE. Sales v. Ople, G.R. No. 53515 [1989])

Hold-over Principle Limitations on Management Prerogative

It shall be the duty of both parties to keep the status quo and It is circumscribed by limitations found in:
to continue in full force and effect the terms and conditions 1. Law;
of the existing agreement during the 60-day period and/or 2. CBA;
until a new agreement is reached by the parties. Despite the 3. Employment contract;
lapse of the formal effectivity of the CBA the law still 4. Employer policy or practice; or
considers the same as continuing in force and effect until a 5. General principles of fair play and justice.
new CBA shall have been validly executed.
RIGHT TO DISCIPLINE
MANAGEMENT PREROGATIVE
The employer has the prerogative to instill discipline in his
MANAGEMENT RIGHTS employees and to impose reasonable penalties, including
dismissal, on erring employees pursuant to company rules
Fundamental Management Rights (SPIT) and regulations. (San Miguel Corporation v. NLRC, G.R. No.
87277 [1989])
1. Right to Select employees
2. Right to Prescribe rules RIGHT TO TRANSFER OF EMPLOYEES
3. Right to reasonable return on Investments
4. Right to Transfer or discharge employees Transfer is the lateral movement from one position to
another of equivalent rank, level or salary without break of
Right to Hire service.

It is both a right and a prerogative. An ER has the right to Transferring employees, to the extent that it is done fairly
select EEs and decide when to engage them. He has the right and in good faith, is a valid exercise of management
under the law, to full freedom in employing any person free prerogative and will not, in and of itself, sustain a charge of
to accept employment from him, and this, except as constructive dismissal. (Manalo v. Ateneo De Naga
restricted by valid statute and valid contract, at a wage and University, et al., G.R. No. 185058 [2015], as penned by J.
under conditions agreeable to them. Leonen)

Right to Return of Investments Burden of Proving that the Transfer was Reasonable

This includes the right to make profit. The Er must be able to show that the transfer is not
unreasonable, inconvenient or prejudicial to the Ee;
Consistent with the policy of the State to bridge the gap nor does it involve a demotion in rank or a diminution
between the underprivileged workingman and the more of his salaries, privileges and other benefits. Should the
affluent employers, the balance in favor of the workingman Er fail to overcome this burden of proof, the Ee’s transfer
should be titled without being blind to the concomitant shall be tantamount to constructive dismissal. (Blue Dairy
right of the employer to the protection of his property. Corporation v. NLRC, 314 SCRA 401 [1999])
(Gelmart Industries Phils., Inc. v. NLRC, G.R. No. 55668
[1989]) Right to Demote

MANAGEMENT PREROGATIVE An employee may be demoted due to his failure to observe
proper diligence in his work, and also because of his
GR: Management prerogative is the right of the employer indolence, habitual tardiness, and absences. (Petrophil
to regulate all aspects of employment, such as: Corporation v. NLRC, et al., G.R. No. L-64048 [1986])

1. Freedom to prescribe work assignments; PRODUCTIVITY STANDARD
2. Working methods;
3. Processes to be followed; Q: May an Er impose productivity standards for its
4. Regulation regarding transfer of Ees; workers?
5. Supervision of their work, lay-off and discipline; and
6. Dismissal and recall of work. (Goya, Inc. v. Goya, Inc. A: YES. An Er is entitled to impose productivity standards
Ees Union-FFW, G.R. No. 170054 [2013]) for its workers. In fact, non-compliance may be visited with
a penalty even more severe than demotion. The practice of
NOTE: It presupposes the existence of an Er-EE a company in laying off workers because they failed to make
relationship. (ibid.) the work quota has been recognized in this jurisdiction.
Failure to meet the sales quota assigned to each of them

2021 GOLDEN NOTES 2021 & 2022
Labor law
constitute a just cause of their dismissal, regardless of the when the employee is prevented from setting up a
permanent or probationary status of their employment. competing business.
This management prerogative of requiring standards may
be availed of so long as they are exercised in good faith for Non-solicitation clause
the advancement of the Er’s interest. (Leonardo v. NLRC, G.R.
No. 125303 [2000]) When a duty is imposed on the employee not to approach
his former employer’s customers or prospective
BONUS customers, or when the employee is prevented from taking
customers/clients of his former employer.
It is an amount granted and paid to an Ee for his industry
and loyalty which contributed to the success of the Er’s Non-poaching clause
business and made possible the realization of profits.
When the employee is prevented from enticing his former
Q: Can bonus be demanded? employer’s staff away from the business, the aim is to
prevent the employee from taking key employees with him
A: GR: NO. Bonus is not demandable as a matter of right. It to his new employment or business.
is a management prerogative given in addition to what is
ordinarily received by or strictly due to recipient. MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-
(Producers Bank of the Phil. v. NLRC, G.R. No. 100701 [2001]) EMPLOYEES

XPNs: Given for a long period of time, provided that: Q: Is the stipulation in the employment contract
a. Consistent and deliberate – Er continued giving prohibiting an Ee from marrying another Ee of a
benefit without any condition imposed for its competitor company a valid exercise of management
payment; prerogative?
b. Er knew he was not required to give benefit;
c. Nature of benefit is not dependent on profit; A: YES. The policy is not aimed at restricting a personal
d. Made part of the wage or compensation agreed and prerogative that belongs only to the individual. However, an
stated in the employment contract; Ee’s personal decision does not detract the Er from
e. It was promised to be given without any conditions exercising management prerogatives to ensure maximum
imposed for its payment in which case it is deemed profit and business success. It does not impose an absolute
part of the wage; prohibition against relationships between its Ees and those
f. It has ripened into practice. (Marcos v. NLRC, G.R. No. of competitor companies. Its Ees are free to cultivate
111744 [1995]) relationships with and marry persons of their own
choosing. What the company merely seeks to avoid is a
CHANGE OF WORK HOURS conflict of interest between the employee and the company
that may arise out of such relationships. It is also not
The working hours may be changed, at the discretion of the violative of the equal protection clause because it is a settled
company, should such change be necessary for its principle that the commands of the equal protection clause
operations, and that employees shall observe such rules as are addressed only to the State or those acting under color
have been laid down by the company. (Interphil of its authority.
Laboratories Union-FFW v. Interphil Laboratories, Inc., G.R.
No. 142824 [2001]) RIGHT TO DISMISS

BONA FIDE OCCUPATIONAL QUALIFICATION It is management prerogative to transfer, demote, discipline
(BFOQ) RULE and even to dismiss an employee to protect its business,
provided it is not tainted with unfair labor practice. (ibid.;

See also the discussion under Termination of Employment).
Where the job itself necessarily requires a particular

question qualification, then the job applicant or worker who
does not possess it may be disqualified on that basis. This RECRUITMENT AND PLACEMENT
will not be unlawful discrimination. (Azucena, Vol. 1, 2016,
p. 479) DEFINITION OF RECRUITMENT AND PLACEMENT

To justify a BFOQ, the Er must prove two factors: 1. Any act of Canvassing, Enlisting, Transporting,
Contracting, Hiring, Utilizing, or Procuring workers
1. That the employment qualification is reasonably (CETCHUP); and
related to the essential operation of the job involved;
and 2. Includes Contact services, Referrals, Advertising or
2. That there is a factual basis for believing that all or Promising for employment, locally or abroad, whether
substantially all persons meeting the qualification for profit or not. (LC, Art. 13[b]) (CRAP)
would be unable to properly perform the duties of the
job. (Star Paper v. Simbol, G.R. No. 164774 [2006]) NOTE: Regardless of the number of persons dealt with,
recruitment and placement are still constituted. The
POST-EMPLOYMENT RESTRICTIONS proviso merely lays down a rule of evidence that where a
fee is collected in consideration of a promise or offer of
Non-compete clause employment to two (2) or more prospective workers, the
individual or entity dealing with them shall be deemed to be
When the employee is prevented from directly competing engaged in the act of recruitment and placement. The words
or working for a competitor of his former employer, or

2021 GOLDEN NOTES 2021 & 2022
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"shall be deemed" create that presumption. (People v. Panis, Prescription of action: 20 years (Sec. 12, R.A.
G.R. L-58674-77 [1990]) 8042)

ILLEGAL RECRUITMENT NOTE: The number of offenders is not material in large
scale recruitment. What is important as qualifying element
Illegal recruitment means any recruitment activities, is that there should be at least three (3) victims of such
including the prohibited practices enumerated under Art. illegal recruitment, individually or as a group. (People v.
34 of the Labor Code, to be undertaken by non-licensees or Laurel, G.R. No. 120353 [1998])
non-holders of authority. (LC, Art. 38[a])
Failure to reimburse

ELEMENTS OF ILLEGAL RECRUITMENT
Under Sec. 5(m) of RA 10022, failure to reimburse expenses
incurred by the worker in connection with his
1. The offender is a licensee/non-licensee or documentation and processing for purposes of deployment
holder/non-holder of authority engaged in the in cases where the deployment does not actually take place
recruitment and placement of workers; and without the worker’s fault, amounts to illegal recruitment.

2. The offender undertakes:
ILLEGAL RECRUITMENT AS
a. Any act of canvassing, enlisting, contracting,
DISTINGUISHED FROM ESTAFA
transporting, utilizing, hiring, or procuring
workers and includes referring, contract
services, promising or advertising for Illegal recruitment and estafa cases may be filed
employment abroad, whether for profit or not simultaneously or separately. The filing of charges for
(LC, Art. 13[b]); or illegal recruitment does not bar the filing of estafa, and vice
b. Any prohibited practices enumerated under Art. versa. (People v. Bilaber, 465 Phil. 726 [2004])
34 of the Labor Code. (LC, Art. 34; RA 8042, Sec. 5,
as amended by RA 10022) ILLEGAL RECRUITMENT ESTAFA
Malum prohibitum Malum in se
“Non-licensee or non-holder of authority” means any It is not required that it be Accused defrauded
person, corporation, or entity which has not been issued a shown that the recruiter another by abuse of
valid license or authority to engage in recruitment and wrongfully represented confidence, or by means of
placement by the SOLE, or whose license or authority has himself as a licensed deceit.
been suspended, revoked, or cancelled by the POEA or the recruiter.
SOLE. (Sec. 1[d], Rules Implementing PD 1920; Poquiz, Vol. 1, It is enough that the It is essential that the false
2018, p. 136) victims were deceived as statement or fraudulent
they relied on representation constitutes
Two Kinds of Illegal Recuiter misrepresentation and the very cause or the only
scheme that caused them motive which induces the
1. May be a licensee – performs any of the prohibited to entrust their money in complainant to part with
practices enumerated under Sec. 5 or RA 10022; exchange of what they the thing of value.
2. May be a non-licensee – any person, corporation or later discovered was a vain
entity: hope of obtaining
a. Which has not been issued a valid license or employment abroad.
authority to engage in recruitment and
placement by the SOLE; or TERMINATION OF CONTRACT OF
b. Whose license or authority has been MIGRANT WORKER
suspended, revoked, or cancelled by the POEA
or the SOLE. Relief of a Worker When Terminated Without Valid
Cause
TYPES OF ILLEGAL RECRUITMENT
1. Full reimbursement of his placement fee with 12%
1. Simple – committed by a licensee or holder of authority interest per annum;
against one or two persons only. 2. Plus salaries for the unexpired portion of his
employment contract. (RA 10022)
Prescription of action: 5 years (Sec. 12, R.A. 8042)
NOTE: The three-month option is declared unconstitutional
2. Illegal Recruitment as Economic Sabotage – it is for violating the equal protection clause and the substantive
economic sabotage when illegal recruitment is: due process rule in the Constitution. (Serrano v. Gallant
Maritime Services Inc., G.R. No. 167614 [2009])
a. Syndicated – committed by a syndicate if carried
out by a group of three (3) or more persons in This shall be given retroactive effect, because an
conspiracy or confederation with one another; unconstitutional clause in the law confers no rights,
imposes no duties and affords no protection. The
b. Large Scale or qualified – committed against unconstitutional provision is inoperative, as if it were not
three (3) or more persons individually or as a passed into law at all. (Skippers United Pacific, Inc. v. Doza,
group (People v. Sadiosa, G.R. No. 107084 [1998]) et. al, G.R. No. 175558 [2012])
despite the lack of necessary license from POEA.
(People v. Alzona, G.R. No. 132029 [2004]) However, Sec. 7 of RA 10022 amended Sec. 10 of the
Migrant Workers Act, and once again reiterated the

2021 GOLDEN NOTES 2021 & 2022
Labor law
provision as above quoted. Nonetheless, the Court in the en A party desiring to appeal may file with the Supreme Court
banc case of Sameer Overseas Placement Agency, Inc. v. Joy a verified petition for review on certiorari under Rule 45
Cabiles still declared such as unconstitutional despite its within fifteen (15) days from notice of the judgment, final
replication. (G.R. No. 170139 [2014]) order or resolution appealed from. (Sea Power Shipping
Enterprises, Inc. v. CA, G.R. No. 138270 [2001])
REMEDIES
(LABOR STANDARDS VIOLATION) BUREAU OF LABOR RELATIONS (BLR)

Labor Standards Coverage of the BLR’s Jurisdiction and Functions

1. Conditions of employment; The BLR no longer handles all labor management disputes;
a. Hours of work rather its functions and jurisdiction are largely confined
to:
b. Rest periods 1. Union matters;
c. Service charge 2. Collective bargaining registry; and
2. Wages 3. Labor education.
3. Leaves
Kinds of Cases within BLR’s Jurisdiction
4. Sexual harassment in the work environment
5. Working conditions for special groups of The BLR has original and exclusive jurisdiction over:
employees 1. Inter-union disputes;
2. Intra-union disputes;
REMEDIES 3. Other related labor relations disputes

Availability of Judicial Review of the NLRC’s decision Q: Briefly discuss the powers and responsibilities of the
following in the scheme of the Labor Code: x x x (b)
Judicial review of NLRC’s decision is available through a Bureau of Labor Relations (2019 BAR)
petition for certiorari (Rule 65) which should be initially
filed with the CA in strict observance of the doctrine on the A: The BLR has the following administrative functions:
hierarchy of courts as the appropriate forum for the relief a. Registration of labor unions;
desired. The CA is procedurally equipped to resolve unclear b. Keeping of registry of labor unions; and
or ambiguous factual finding, aside from the increased c. Maintenance and custody of CBAs
number of its component divisions. (St. Martin Funeral
Home v. NLRC, G.R. No. 130866 [1998]) Decisions Appealable to the BLR

Injunction or a temporary restraining order (TRO) 1. Decisions of the Labor Relations Divisions in the
Regional Offices of the DOLE denying the registration
The power of the NLRC to enjoin or restrain, any actual or of labor unions are appealable by the applicant union
threatened, commission of, any or all, prohibited or to the BLR within 10 days from receipt of notice
unlawful acts under Art. 225 of LC can only be exercised in thereof. (LC, Art. 243)
labor disputes.
2. Decisions of Med-Arbiters in intra-union disputes.
Persons Authorized to Issue a TRO
However, under Art. 272 of the LC, the decisions of the
1. President (LC, Art. 278[g]) Med-Arbiter in inter-union disputes (certification elections)
2. SOLE (LC, Art. 278[g]) are not appealable to the BLR but to the SOLE. (Poquiz, Vol.
3. NLRC (LC, Art. 225) 2, 2018, p. 97)

COURT OF APPEALS NATIONAL CONCILIATION AND MEDIATION BOARD
(Rules of Court, Rule 65) (NCMB)

GR: Decisions of the DOLE Secretary, NLRC, and BLR in its The NCMB refers to the agency attached to the DOLE
appellate jurisdiction, are NOT appealable to the CA as per principally in-charge of the settlement of labor disputes
the St. Martin Ruling. However, their decisions may be through conciliation, mediation and of the promotion of
elevated to the CA via petition for certiorari under rule voluntary approaches to labor dispute prevention and
65. settlement.

XPN: Rule 43 of Rules of Court – Appeals from the Court NCMB is NOT a Quasi-judicial agency
of Tax Appeals and Quasi-Judicial Agencies to the Court of
Appeals. NCMB is not a quasi-judicial agency. Thus, the NCMB’s
ruling cannot be elevated to, and be cognizable by, the
SUPREME COURT Court of Appeals.
(Rules of Court, Rule 45)
Rule 43 of the Rules of Court applies only to awards,
How to Appeal from a Judgment, or Final Order or judgments, final orders or resolutions of or authorized by
Resolution, of the Court of Appeals any quasi-judicial agency in the exercise of its quasi-judicial
functions. Hence, NCMB’s decision, not having been
rendered by a quasi-judicial body, cannot be elevated to the
Court of Appeals under the said rule.

2021 GOLDEN NOTES 2021 & 2022
Labor law
NOTE: The NCBM’s conciliation and mediation functions carrying messages back reaching their own
are discharged by its Conciliators-Mediators. (Poquiz, Vol. 2, and forth between the mutually acceptable
2018, p. 112) parties, and generally being settlement of the dispute.
a good fellow who tries to
Jurisdiction over Conciliation. Mediation, and keep things calm and
Voluntary Arbitration Cases forward-looking in a tense
situation.
Cases arising from the implementation or interpretation of It is the process where a It is when a 3rd party
CBAs that are the subject of grievance procedure and/or disinterested 3rd party studies each side of the
voluntary arbitration are cognizable by the NCMB. meets with management dispute then makes
and labor, at their request proposals for the
Alternative Modes of Settlement of Labor Dispute or otherwise, during a labor disputants to consider. The
dispute or in CB mediator cannot make an
1. Voluntary Arbitration conferences, and by cooling award nor render a
2. Conciliation tempers, aids in reaching decision.
3. Mediation an agreement.

ALL Labor Disputes are Required to be Submitted to Preventive Mediation
Mandatory Conciliation-Mediation
A preventive mediation case refers to the potential labor
GR: All issues arising from labor and employment shall be dispute which is the subject of a formal or informal request
subject to mandatory conciliation-mediation. The LA or the for conciliation and mediation assistance sought by either
appropriate DOLE agency or office that has jurisdiction over or both parties or upon the initiative of the NCMB to avoid
the dispute shall entertain only endorsed or referred cases the occurrence of an actual labor dispute.
by the duly authorized officer. (LC, as amended by RA
103960, Art. 234[a]) How to Initiate Preventive Mediation

XPNs: Preventive mediation proceeding may be initiated in two
1. Grievance machinery and Voluntary Arbitration, in (2) ways:
which case, their agreement will govern; 1. By filing a notice or request of preventive mediation,
2. When excepted by the SLE. (Ibid.) as distinguished from a notice of strike/lockout, or
2. By conversion of the notice of strike/lockout into a
NOTE: Any or both parties involved in the dispute may pre- preventive mediation case.
terminate the conciliation-mediation proceedings and
request referral or endorsement to the appropriate DOLE DOLE REGIONAL DIRECTOR
agency or office which has jurisdiction over the dispute, or
if both parties so agree, refer the unresolved issues to Jurisdiction of the DOLE Regional Directors
voluntary arbitration. (LC, as amended by RA 103960, Art.
234[a]) The Dole Regional Directors have original and exclusive
jurisdiction over the following cases:
Court Cannot Fix Resort to Voluntary Arbitration
1. Labor standards enforcement cases under Art. 128;
Resort to VA dispute should not be fixed by the court but by 2. Small money claims cases arising from labor
the parties relying on their strengths and resources. standards violations in the amount not exceeding
P5,000.00 and not accompanied with a claim or
Legal Basis of Conciliation and Mediation reinstatement under Art. 129;
3. Occupational safety and health violation;
The State shall promote x x x the preferential use of 4. Registration of unions and cancellation thereof, cases
voluntary modes of settling disputes including filed against unions and other labor relations related
conciliation and shall ensure mutual compliance by the cases;
parties thereof in order to foster industrial peace. (1987 5. Complaints against private recruitment and
Constitution, Art. 13, Sec. 3) placement agencies for local employment; and
6. Cases submitted to them for voluntary arbitration in
NOTE: A similar provision is echoed in the Declaration of their capacity as Ex-Officio Voluntary Arbitrators
Policy under Art. 218(a) of the LC, as amended. under D.O. No. 83-07, Series of 2007.

Conciliation as distinguished from Mediation Recovery and Adjudicatory Power

CONCILIATION MEDIATION The RD or any of his duly authorized hearing officers is
An intervention by a An intervention by a empowered through summary proceeding and after due
neutral third party neutral third party notice, to hear and decide cases involving recovery of wages
and other monetary claims and benefits, including legal
The conciliator relies on his The mediator starts
interests.
persuasive expertise and advising the parties or

takes an active role in offering solutions or
assisting parties by trying alternatives to the DOLE SECRETARY
to keep disputants talking, problems with the end in
facilitating other view of assisting them Jurisdiction of the SOLE
procedural niceties, towards voluntarily

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Labor law
1. Assumption of jurisdiction over cases where labor 4. Require Ers to keep and maintain such
disputes are likely to cause a strike or lockout in an employment records as may be necessary in
industry indispensable to national interest (D.O. 40-
G03, S 2010) aid to the visitorial and enforcement powers;
2. Visitorial powers to over employers (Art. 128) 5. Conduct hearings within 24 hours to
3. Issue a writ of execution on a judgment (Art. 224) determine whether:
4. Suspend the effects of the termination pending a. An order for stoppage of work or
resolution of the dispute in the event of a prima facie
finding by the appropriate official of the Department suspension of operations shall be lifted
of Labor and Employment before whom such dispute or not; and
is pending that the termination may cause a serious b. Er shall pay the concerned Ees their
labor dispute or is in implementation of a mass lay-off salaries in case the violation is
[Art. 292 (b)]
attributable to his fault. (as amended by
Cases within the Appellate Jurisdiction of the SOLE RA 7730, Guico v. Secretary, G.R. No.
131750 [1998])
1. Appeal from and adverse decision of the POEA. (2003
POEA Rules and Regulations, Rule V, Part VII, Sec. 1; Powers of SOLE regarding Voluntary Arbitration
Eastern Mediterranean Maritime Ltd. and Agemar
Manning Agency Inc., v. Surio et. al., G.R. No. 154213 The SOLE may authorize any official to act as Voluntary
[2012]) Arbitrator upon the written request and agreement of the
parties to a labor dispute. (LC, Art. 219 [n]) He shall also
2. Appeal the order or results of a certification election approve, upon recommendation of the NCMB the guidelines
on the ground that the Rules and Regulations or parts in administering the Voluntary Arbitration Fund. (LC, Art.
thereof established by the SLE for the conduct of 276 [f])
election have been violated. (LC, Art. 259)
Power to Suspend Effects of Termination
3. A review of cancellation proceedings decided by the
BLR in the exercise of its exclusive and original The SOLE may suspend the effects of the termination
jurisdiction. (Abbott Laboratories Philippines, Inc. pending resolution of the dispute in the event of a prima
v. Abbott Laboratories Employees Union, G.R. No. facie finding by the appropriate official of the DOLE before
131374 [2000]) whom such dispute is pending that the termination may
cause serious labor dispute or is in implementation of a
NOTE: The SOLE has no jurisdiction over decisions of the mass layoff. (LC, Art. 292[b])
BLR rendered in the exercise of its appellate power to
review the decision of the RD in a petition to cancel the NOTE: Art. 292(b) of LC is applicable on suspension of the
union's certificate of registration, said decisions being final effects of termination if there is a showing that the
and unappealable. (Ibid.) termination may cause serious labor dispute within the
company while Art. 278(g) of LC on assumption of
Visitorial Power jurisdiction is applicable in cases of strike in establishments
affecting national interest, not just the company.
It constitutes:
1. Access to Er’s records and premises at any time of the Reinstatement Pending Resolution Of The Termination
day or night, whenever work is being undertaken; Dispute
2. To copy from said records;
3. Question any Ee and investigate any fact, condition or Suspension of the effects of termination will necessarily
matter which may be necessary to determine result in the immediate reinstatement of the terminated
violations or which may aid in the enforcement of the employees. An order of reinstatement pending resolution of
LC and of any wage order, or rules and regulation the case may thus be issued by the SOLE pursuant to this
issued pursuant thereto. power.

Enforcement Power Remedies

It is the power of the SOLE to: The remedy of an aggrieved party in a decision or resolution
1. Issue compliance orders; of the SOLE is to timely file a motion for reconsideration
2. Issue writs of execution for the enforcement as a precondition for any further or subsequent remedy,
of their orders, except in cases where the Er and then seasonably file a special civil action for certiorari
under Rule 65 of the 1997 Rules on Civil Procedure.
contests the findings of the labor officer and (Pildtranco Service Enterprises, Inc. v. PHILTRANCO
raise issues supported by documentary proof Worker’s Association, G.R. No. 180962 [2014])
which were not considered in the course of
inspection; See also discussion on Assumption of Jurisdiction under
Peaceful Concerted Activities.
3. Order stoppage of work or suspension of
operation when non-compliance with the law VOLUNTARY ARBITRATOR
or IRR poses grave and imminent danger to
health and safety of workers in the workplace; Cases falling under the Jurisdiction of the Grievance
Machinery


2021 GOLDEN NOTES 2021 & 2022
Labor law
Any grievance arising from:
1. The interpretation or implementation of the CBA; and NOTE: The propriety of filing a motion for reconsideration
2. The interpretation or enforcement of company was confirmed in Coca-Cola Bottlers Phil., etc. v. Coca-Cola
personnel policies (G.R. No. 155651 [2005]).

Both the Er and the Bargaining Representative of the Appeal
Ees are Required to Go through the Grievance
Machinery GR: Decisions of VA are final and executory after 10
calendar days from receipt of the copy of the award or
It is but logical, just and equitable that whoever is aggrieved decision by the parties. (LC, Art. 276)
should initiate settlement of grievance through the
grievance machinery. To impose compulsory procedure on XPN: Decisions of VA may still be subject to judicial review.
Ers alone would be oppressive of capital.
NOTE: Art. 276 deleted the word “unappealable” from Art.
Jurisdiction of Voluntary Arbitrator 278. It makes the voluntary arbitration award final and
executory after 10 calendar days from receipt of the copy of
Under the Labor Code, the jurisdiction of the Voluntary the award or decision by the parties. Presumably, the
Arbitrator or Panel of Voluntary Arbitrators include decision may still be reconsidered by the VA on the basis of
disputes involving: a motion for reconsideration duly filed during that period.
(Albert Teng v. Alfredo Pahagac, G.R. No. 169704 [2010])
a. Unresolved grievances arising from the
interpretation or implementation of a CBA; Mode of Appeal from VA to CA
b. The interpretation or enforcement of company
personnel policies; and In the case of Samahan ng Manggawa sa HYATT v. Bacungan,
c. All labor disputes, upon agreement of the parties, (G.R. No. 149050 [2009]), the Supreme Court ruled that a
including unfair labor practices and bargaining decision or award of a Voluntary arbitrator is appealable to
deadlock. the CA via petition for review under Rule 43, not Rule 65.

Powers of Voluntary Arbitrators The reason for this rule was explained in the case of Nippon
Paint Union v. CA, which the SC ruled that the mode of appeal
a. Adjudicatory power. (No. 64, NCMB Primer on from VA to CA is a petition for review under Rule 43. It is
Grievance Settlement and Voluntary Arbitration) not Rule 65 because a petition for certiorari, under that Rule
b. Compulsory power. (No. 80, Ibid) lies only where there is “no appeal” and “no plain, speed,
c. Power to conciliate and mediate. (No. 65, Ibid.) and adequate remedy in the ordinary course of law.”
d. Power to encourage the parties to enter into a Certiorari is not a substitute for a lapsed appeal.
stipulation of facts. (Rule V, NCMB Revised Procedural
Guidelines in the Conduct of Voluntary Arbitration XPNs: The Court cited situations when petition for
Proceedings) certiorari, despite availability of appeal, may be
e. Power to issue writ of execution. (Sec. 3, Ibid.) (Poquiz, entertained, such as:
2018, Vol. 2, p. 352)
1. When public welfare and advancement of public policy
Who will Designate the Voluntary Arbitrator / Panel in dictates;
Case the Parties Fail to Select 2. When the broader interest of justice so requires;
3. When the writs issued are null and void; or
It is the NCMB that shall designate the VA panel based on 4. When the questioned order amounts to an oppressive
the selection procedure provided by the CBA. (Manila exercise of judicial authority. (Azucena, Vol. 2, 2016, pp.
Central Line Free Workers Union v. Manila Central Line Corp., 561-562)
G.R. No. 109383 [1998])
NOTE: A VA by the nature of his functions acts in quasi-
Labor Arbiters can be Designated as Voluntary judicial capacity. There is no reason why the VA’s decisions
Arbitrators involving interpretation of law should be beyond the SC’s
review. Administrative officials are presumed to act in
There is nothing in the law that prohibits LAs from also accordance with law, yet the SC will not hesitate to pass
acting as voluntary arbitrators as long as the parties agree upon their work where a question of law is involved or
to have him hear and decide their dispute. (Manila Central where a showing of abuse of authority or discretion in their
Line Free Workers Union v. Manila Central Line Corp., G.R. No. official acts is properly raised in petitions for certiorari.
109383[1998]) (Continental Marble Corporation v. NLRC, G.R. No. L-43825
[1988])
Remedies

Motion for Reconsideration

As a general rule, pursuant to Sec. 7, Rule XIX of D.O. No.
No. 40-03, decision, order, resolution or award of the
voluntary arbitrator shall not be subject of a motion for
reconsideration. However, this rule cannot stand in a
petition for a writ of certiorari because such petition
inherently requires having filed a motion for
reconsideration. (Azucena, Vol. 2, 2016, p. 559)

2021 GOLDEN NOTES 2021 & 2022
Labor law
PRESCRIPTION OF ACTIONS

SUBJECT PRESCRIPTIVE PERIOD
Criminal Offenses penalized under 3 years from the date of commission or discovery thereof (People v. Duque, 212 SCRA
the LC and its IRR 607 [1992])
ULP 1 year from accrual of such ULP; otherwise forever barred (LC, Art. 305)
Money Claims
GR: 3 years from the time the cause of action accrued; otherwise forever barred (LC,

Art. 306)
[including incremental proceeds arising

from tuition fees under PD451 (MLQU
XPN: Promissory Estoppel
Association v. MLQU, G.R. No. 82312

[1989])
All money claims accruing prior to the Within 1 year from the date of effectivity, in accordance with IRR; otherwise, they
effectivity of the LC shall forever be barred
4 years. It commences to run from the date of formal dismissal. [Mendoza v. NLRC,
Illegal Dismissal
G.R. No. 122481 (1998)]
4 years – Since an award of backwages is merely consequent to a declaration of illegal

Claim for Backwages
dismissal. (Arriola v. Pilipino Star Ngayon, Inc., G.R. No. 175689 [2014])
Workmen’s Compensation claims

Dec. 31, 1974 shall be filed not later than Mar. 31, 1975 before the appropriate
accruing prior to the effectivity of the LC
regional offices of the DOLE. (LC, Art. 306)
and between Nov. 1, 1974-Dec. 31, 1974
Reinstatement 4 years (Callanta v. Carnation, G.R. No. 70615 [1986])
Simple Illegal Recruitment 5 years (RA 8042)
Syndicated or Large-scale
20 years (RA 8042)
Illegal Recruitment
After 3 years from the date of submission of the annual financial report to the DOLE
Union funds or from the date the same should have been submitted as required by law, whichever
comes earlier. (IRR of LC, Book VII, Rule II, Sec. 5)
20 years from the time of delinquency is known or the assessment is made or the
SSS Violations
benefit accrues as the case may be (RA 8282)(Lo v. CA, G.R. No. 128667 [1999])
GR: 10 years from the date of contingency
SSS Benefits
XPN: Life insurance and retirement. (SSS Office Order No. 2015-005)
GR: 4 years
GSIS Benefits
XPN: Life and retirement benefits – Imprescriptible
Employee’s Compensation Claims 3 years from accrual of cause of action

Q: For purposes of prescription, within what periods d. Offenses under the Labor Code
from the time the cause of action accrued should the
following cases be filed: (2019 BAR) A: Offenses penalized under this Code and the rules and
regulations issued pursuant thereto shall prescribe in three
a. Money claims arising from Er-Ee relations (3) years. (ibid.)

A: All money claims arising from employer-employee e. Illegal recruitment
relations accruing during the effectivity of this Code shall be
filed within three (3) years from the time the cause of A: Illegal recruitment cases under this Act shall prescribe in
action accrued; otherwise they shall be forever barred. (LC, five (5) years: Provided, however, that illegal recruitment
Art. 306 [291]) cases involving economic sabotage as defined herein shall
prescribe in twenty (20) years. (Sec. 12, R.A. 8042)
b. Illegal dismissal
Note that R.A. 8042 only applies to Migrant Workers. Illegal
A: The prescriptive period for filing an illegal dismissal recruitment for local employment is subject to the
complaint is four years from the time the cause of action provisions of the Labor Code, in particular, Art. 305, first
accrued. (Teekay Shipping Philippines, Inc., v. Ramier paragraph, to wit: offenses penalized under this Code x x x
Concha, G.R. No. 185463 [2012]; Art. 1146, Civil Code) shall prescribe in three (3) years.

c. Unfair labor practice

A: All unfair labor practices arising from Book V shall be
filed with the appropriate agency within one (1) year from
accrual of such unfair labor practice; otherwise, they shall
be forever barred. (LC, Art. 305)

2021 GOLDEN NOTES 2021 & 2022

TAXATION LAW
PRE-WEEK NOTES

TAXATION LAW COMMITTEE

COMMITTEE HEAD: Ma. Selyna V. Roño

MEMBERS: Louize Allaine T. Areño, Lesley Ysabel B. Sumagpang, Marfe B.
Gaddi, Airei Kim P. Guanga, Patricia Anne D. Bautista, Mervin Angelo V.
Manalo

Atty. Kenneth Glenn L. Manuel
Atty. Clarice Angeline V. Questin
ADVISERS
Taxation Law
for non-payment of other kinds of taxes where the law so
BASIC PRINCIPLES OF TAXATION expressly provides. (Dimaampao, 2015)
IN THE CONSTITUTION
UNIFORMITY AND EQUALITY OF TAXATION
Q: What is the lifeblood doctrine?
BASIS: The rule of taxation shall be uniform and equitable.
A: Taxes are the lifeblood of the nation through which the The Congress shall evolve a progressive system of taxation.
government agencies continue to operate and with which (Art. VI, Sec. 28(1))
the State effects its functions for the welfare of its
constituents. (CIR v CTA, G.R. No. 106611, July 21, 1994) Q: Explain the following concepts in taxation:
a. Uniformity;
Taxes should be collected promptly. No court shall have the b. Equitability; and
authority to grant an injunction to restrain the collection of c. Equality.
any internal revenue tax, fee or charge imposed by the NIRC.
(Angeles City v. Angeles Electric Cooperation, 622 SCRA 43, A:
2010) a. Uniformity – It means that all taxable articles or kinds
of property of the same class shall be taxed at the same
Q: What is the Necessity Theory? rate.

A: The theory behind the exercise of the power to tax A tax is considered uniform when it operates with the same
emanates from necessity. Without taxes, the government force and effect in every place where the subject is found.
cannot fulfill its mandate of promoting the general welfare Different articles may be taxed at different amounts
and well-being of the people. (Gerochi v. DOE, G.R. No. provided that the rate is uniform on the same class
159796, July 17, 2007) everywhere, with all people at all times.

Q: Explain the Benefits-Received Theory. b. Equitability – Taxation is said to be equitable when its
burden falls on those better able to pay.
A: Taxes are what we pay for a civilized society. Without
taxes, the government would be paralyzed for lack of c. Equality – It is accomplished when the burden of the
motive power to activate and operate it. Hence, despite the tax falls equally and impartially upon all the persons
natural reluctance to surrender part of one’s earned income and property subject to it.
to the taxing authorities, every person who is able must
contribute his share in the running of the government. The Q: Explain the requirement of uniformity as a limitation
government, for its part, is expected to respond in the form in the imposition and/or collection of taxes. (1998
of tangible and intangible benefits intended to improve the BAR)
lives of the people and enhance their material and moral
values. (CIR v. Algue, G.R. No. L-28896, February 17, 1988) A: Uniformity in the imposition and/or collection of taxes
means that all taxable articles, or kinds of property of the
CONSTITUTIONAL LIMITATIONS ON TAXATION same class shall be taxed at the same rate. The requirement
of uniformity is complied with when the tax operates with

the same force and effect in every place where the subject
Taxation, being inherent in sovereignty, need not be clothed
of it is found (Churchill & Tait v. Concepcion, 34 Phil. 969).
with any constitutional authority for it to be exercised by
Different articles may be taxed at different amounts
the sovereign state. Instead, constitutional provisions are
provided that the rate is uniform on the same class
meant and intended more to regulate and define, rather
everywhere with all people at all times. Accordingly,
than to grant, the power emanating therefrom.
singling out one particular class for taxation purposes does

not infringe the requirement of uniformity.
CONSTITUTIONAL LIMITATIONS:

PROVISIONS DIRECTLY AFFECTING TAXATION
Q: A law was passed exempting doctors and lawyers

from the operation of the value-added tax. Other
PROHIBITION AGAINST IMPRISONMENT FOR NON-
professionals complained and filed a suit questioning
PAYMENT OF POLL TAX
the law for being discriminatory and violative of the

equal protection clause of the Constitution since
BASIS: No person shall be imprisoned for debt or non-
complainants were not given the same exemption. Is
payment of a poll tax. (Art. III, Sec. 20)
the suit meritorious or not? Reason briefly. (2004 BAR)

A poll tax is one levied on persons who are residents within
A: YES, the suit is meritorious. The VAT is designed for
the territory of the taxing authority without regard to their
economic efficiency. Hence, should be neutral to those who
property, business, or occupation. Thus, only the basic
belong to the same class. Professionals are a class of
community tax under the LGC could qualify as a poll tax, and
taxpayers by themselves who, in compliance with the rule
the non-payment of other (additional) taxes imposed, not
of equality of taxation, must be treated alike for tax
being in the nature of poll taxes, may validly be subjected by
purposes. Exempting lawyers and doctors from a burden to
law to imprisonment. (Vitug, 2006)
which other professionals are subjected will make the law

discriminatory and violative of the equal protection clause
In other words, while a person may not be imprisoned for
of the Constitution. While singling out a class for taxation
non-payment of a cedula or poll tax, he may be imprisoned
purposes will not infringe upon this constitutional
limitation (Shell v. Vano, 94 Phil. 389 (1954)), singling out a

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
taxpayer from a class will no doubt transgress the avoid regressive taxes but only minimize them. (Tolentino
constitutional limitation [Ormoc Sugar Co. Inc., v. Treasurer et.al. v. Secretary of Finance, G.R. No. 115455, Oct. 30, 1995)
of Ormoc City, 22 SCRA 603 (1968)]. Treating doctors and
lawyers as a different class of professionals will not comply GRANT BY CONGRESS OF AUTHORITY TO
with the requirements of reasonable, hence a valid THE PRESIDENT TO IMPOSE TARIFF RATES
classification, because the classification is not based upon
substantial distinction which makes real differences. The BASIS: The Congress may, by law, authorize the President
classification does not comply with the requirement that it to fix within specified limits and subject to such limitations
should be germane to the purpose of the law either. (Pepsi- and restrictions at it may impose, tariff rates, import and
Cola Bottling Co., Inc. v. City of Butuan, 24 SCRA 789 (1968)) export quotas, tonnage and wharfage dues and other duties
or imposts within the framework of the national
NOTE: A levy of tax is not unconstitutional because it is not development program of the Government. (Art. VI, Sec. 28
intrinsically equal and uniform in its operation. The (2))
uniformity rule does not prohibit classification for purposes
of taxation. (British American Tobacco v. Jose Isidro N. Flexible tariff clause
Camacho, G.R. No. 163583, April 15, 2009)
This clause provides the authority given to the President to
Uniformity in taxation, like the kindred concept of equal adjust tariff rates under Sec. 1608 of R.A. 10863, known as
protection, merely requires that all subjects or objects of Customs Modernization and Tariff Act (CMTA) of 2016. This
taxation, similarly situated, are to be treated alike both in authority, however, is subject to limitations and restrictions
privileges and liabilities. Uniformity does not forfend indicated within the law itself.
classification as long as: (1) the standards that are used
therefor are substantial and not arbitrary; (2) the Requisites on the authority of the President in imposing
categorization is germane to achieve the legislative tax
purpose; (3) the law applies, all things being equal, to both
present and future conditions; and (4) the classification 1. Delegated by Congress through a law – The
applies equally well to all those belonging to the same class. authorization granted to the President must be
(Rufino R. Tan v. Ramon R. Del Rosario, Jr., G.R. Nos. 109289, embodied in a law. Hence, the justification cannot
October 3, 1994, 237 SCRA 324) All of the foregoing be supplied simply by inherent executive powers.
requirements of a valid classification having been met and
those which are singled out are a class in themselves, there It is Congress which authorizes the President to impose
is no violation of the “Equal Protection Clause” of the tariff rates, import and export quotas, tonnage and
Constitution. wharfage dues, and other duties or imposts. Thus, the
authority cannot come from the Finance Department, the
Q: Does the 20% Sales Discount for Senior Citizens and National Economic Development Authority, or the World
Persons with Disabilities violates the constitutional Trade Organization, no matter how insistent or persistent
right of equal protection clause? these bodies may be. (Southern Cross Cement Corporation v.
Cement Manufacturers Association of the Phil., G.R. No.
A: NO. The equal protection clause is not infringed by 158540, August 3, 2005)
legislation which applies only to those falling within a
specified class. If the groupings are characterized by 2. Subject to Congressional limits and restrictions –
substantial distinctions that make real differences, one class The authorization to the President can be exercised
may be treated and regulated differently from another. only within the specified limits set in the law and is
(Southern Luzon Drug Corporation v. DSWD, G.R. No. 199669, further subject to limitations and restrictions
April 25, 2017) which Congress may impose. Consequently, if
Congress specifies that the tariff rates should not
Progressive taxation exceed a given amount, the President cannot
impose a tariff rate that exceeds such amount.
Taxation is progressive when tax rate increases as the
income of the taxpayer increases. It is based on the principle Assuming there is a conflict between the specific limitation
that those who are able to pay more should shoulder the in the Constitution and the general executive power of
bigger portion of the tax burden. control and supervision, the former prevails in the specific
instance of safeguard measures such as tariffs and imposts
Q: Does the Constitution prohibit regressive taxes? and would thus serve to qualify the general grant to the
President of the power to exercise control and supervision
A: NO, the Constitution does not really prohibit the over his/her subalterns. (Southern Cross Cement
imposition of regressive taxes. What it simply provides is Corporation v. Cement Manufacturers Association of the Phil.,
that Congress shall evolve a progressive system of taxation. G.R. No. 158540, August 3, 2005)

Meaning of “evolve” as used in the Constitution 3. Within the framework of national development
program.
The constitutional provision has been interpreted to mean
simply that "direct taxes are to be preferred and as much as PROHIBITION AGAINST TAXATION OF RELIGIOUS,
possible, indirect taxes should be minimized.” The mandate CHARITABLE ENTITIES, AND EDUCATIONAL ENTITIES
of Congress is not to prescribe but to evolve a progressive
tax system. This is a mere directive upon Congress, not a BASIS: Charitable institutions, churches and parsonages or
justiciable right or a legally enforceable one. We cannot convents appurtenant thereto, mosques, non-profit

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
cemeteries, and all lands, buildings, and improvements, The words “dominant use” or “principal use” cannot be
actually, directly, and exclusively used for religious, substituted for the words “used exclusively” without doing
charitable, or educational purposes shall be exempt from violence to the Constitution and the law.
taxation. (Art. IV, Sec. 28 (3))
In sum, the Court ruled that the portions of the land leased
Q: What is the coverage of tax exemption? to private entities as well as those parts of the hospital
leased to private individuals are not exempt from taxes.
A: It covers real property taxes only. Accordingly, a
conveyance of such exempt property can be subject to Rules on taxation of non-stock corporations for
transfer taxes. charitable and religious purposes

Properties exempt under the Constitution from the 1. For purposes of income taxation
payment of property taxes
a. The income of non-stock corporations
1. Charitable institutions; operating exclusively for charitable and
2. Churches and parsonages or convents appurtenant religious purposes, no part of which inures to
thereto; the benefit of any member, organizer, officer,
3. Mosques; or any specific person, shall be exempt from
4. Non-profit cemeteries; and tax.
5. All lands, buildings, and improvements actually,
directly and exclusively used for religious, charitable or However, the income of whatever kind and nature from any
educational purposes shall be exempt from taxation. of their properties, real or personal or from any of their
(Art. VI, Sec. 28(3)) activities for profit regardless of the disposition made of
such income shall be subject to tax. (Sec. 30 (E) and last par.,
Meaning of “charitable” NIRC)

It is not restricted to relief of the poor or sick. The test NOTE: An organization may be considered as non-profit if
whether an enterprise is charitable or not is whether it it does not distribute any part of its income to stockholders
exists to carry out a purpose recognized in law as charitable or members. However, despite its being a tax-exempt
or whether it is maintained for gain, profit, or private institution, any income such institution earns from
advantage. (Lung Center of the Philippines v. Quezon City, G.R. activities conducted for profit is taxable, as expressly
No. 144104, June 29, 2004) provided in the last paragraph of Sec. 30. (CIR v. St. Luke’s
Medical Center, Inc., G.R. No. 195909, September 26, 2012)
Also, an organization must meet the substantive test of
charity. Charity is essentially a gift to an indefinite number Refer to “Income Taxation – Corporations exempt from
of persons which lessens the burden of government. In Income Tax” for further discussion.
other words, charitable institutions provide for free goods
and services to the public which would otherwise fall on the b. Donations received by religious, charitable,
shoulders of government. (CIR v. St. Luke’s Medical Center, and educational institutions are considered as
Inc., G.R. No. 195909 September 26, 2012) income but not taxable income as they are
items of exclusion. (Sec. 32(B)(3), NIRC)
Meaning of “actual, direct and exclusive use of the
property for religious, charitable, and educational On the part of the donor, such donations are deductible
purposes” expense provided that no part of the income of which inures
to the benefit of any private stockholder or individual in an
It is the direct, immediate, and actual application of the amount not exceeding 10% in case of individual, and 5% in
property itself to the purposes for which the charitable case of a corporation, of the taxpayer’s taxable income
institution is organized. It is not the use of the income from derived from trade or business or profession. (Sec. 34 (H),
the real property that is determinative of whether the NIRC)
property is used for tax-exempt purposes.
2. For purposes of estate tax – Donations in favor of
NOTE: In the case of Lung Center of the Philippines v. City charitable institutions are generally not subject to
Assessor of Quezon City (433 SCRA 119), the Court ruled that tax. Provided, however, that not more than 30% of the
under the 1987 Constitution, for “lands, buildings, and said bequests, devises, legacies, or transfers shall be
improvements” of the charitable institution to be used by such institutions for administration purposes.
considered exempt, the same should not only be (Sec. 87(D), NIRC)
“exclusively” used for charitable purposes; it is required
that such property be used “actually” and “directly” for such 3. For purposes of donor’s tax – Donations in favor of
purposes. religious and charitable institutions are generally not
subject to tax provided, however, that not more than
“Exclusive” is defined as possessed and enjoyed to the 30% of the said bequests, devises, legacies, or transfers
exclusion of others; debarred from participation or shall be used by such institutions for administration
enjoyment; and “exclusively” is defined, “in a manner to purposes. (Sec. 101, NIRC)
exclude; as enjoying a privilege exclusively.” If real property
is used for one or more commercial purposes, it is not SUMMARY OF RULES ON EXEMPTION OF PROPERTIES
exclusively used for the exempted purposes but is subject ACTUALLY, DIRECTLY, AND EXCLUSIVELY USED FOR
to taxation.

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
RELIGIOUS, EDUCATIONAL AND CHARITABLE The last paragraph of Section 30 of the Tax Code is without
PURPOSES force and effect with respect to non-stock, nonprofit
educational institutions. Provided, that the non-stock,
Covers real property tax only. The nonprofit educational institutions prove that its assets and
Coverage of income of whatever kind and nature revenues are used actually, directly, and exclusively for
constitutional from any of their properties, real or educational purposes. Moreover, the tax-exemption
provision personal, or from any of their constitutionally granted to nonstock, nonprofit educational
activities for profit regardless of the institutions, is not subject to limitations imposed by law.
disposition made of such income
shall be subject to tax. The tax exemption granted by the Constitution to non-stock,
Requisite to Property must be “actually, directly, nonprofit educational institutions is conditioned only on
avail of this and exclusively used” by religious, the actual, direct, and exclusive use of their assets,
exemption charitable, and educational revenues, and income for educational purposes. A plain
institutions. reading of the Constitution would show that Article XIV,
Test for the Use of the property for such Section 4(3) does not require that the revenues and income
grant of this purposes, not the ownership thereof. must have also been sourced from educational activities or
exemption activities related to the purposes of an educational
institution. The phrase all revenues is unqualified by any
NOTE: Under the 1987 Constitution, the doctrine of reference to the source of revenues.
exemption by incidental purpose is no longer applicable.
Such doctrine is only applicable to cases where the cause of When a non-stock, nonprofit educational institution proves
action arose under the 1935 Constitution. Under the 1987 that it uses its revenues actually, directly, and exclusively
Constitution, it must be proved that the properties are for educational purposes, it shall be exempted from income
ACTUALLY, DIRECTLY, and EXCLUSIVELY used for the tax, value-added tax, and local business tax. On the other
purpose of institution for the exemption to be granted. hand, when it also shows that it uses its assets in the form
(Sababan, 2008) of real property for educational purposes, it shall be
exempted from real property tax. (CIR vs. De La Salle
PROHIBITION AGAINST TAXATION OF NON-STOCK, University, Inc., G.R. No. 196596, November 9, 2016)
NON-PROFIT EDUCATIONAL INSTITUTIONS
Refer to “Income tax – Proprietary educational institutions
BASIS: All revenues and assets of non-stock, non-profit and non-profit hospitals” for further discussion.
educational institutions used actually, directly, and
exclusively for educational purposes shall be exempt from Q: UP is the registered owner of a parcel of land. UP
taxes and duties. entered into a contract of lease with ALI (Ayala Land
Inc.) over the subject land on 27 October 2006. The
Subject to conditions prescribed by law, all grants, leased property is now known as the UP-Ayala
endowments, donations, or contributions used actually, Technohub. In a Notice of Assessment addressed to ALI
directly, and exclusively for educational purposes shall be dated 23 August 2012, ALI was informed that the
exempt from tax. (Sec 4 (3) and (4), Art XIV) subject property has been "reclassified and assessed
for taxation purposes with an assessed value of
Actually, directly, and exclusively used P499,500,000.00 effective 2009." For the first time and
without a prior Notice of Assessment, a Statement of
The use of the term “actually, directly, and exclusively used” Delinquency dated 27 May 2014 addressed to UP was
referring to religious institutions cannot be applied to non- issued by the City Treasurer demanding the payment of
stock, non-profit educational institutions. The provision of real property tax on the subject property amounting to
Article VI, Section 28(3) applies to religious, charitable, and P106,992,990.00 for the years 2009 to 2013 and the
educational institutions – while Article XIV applies solely to first quarter of 2014. Is UP liable for real property tax
non-stock, non-profit educational institutions. imposed on the subject property leased by ALI?

ART. XIV, SEC. ART. VI, SEC. A: NO. The enactment and passage of R.A. 9500 in 2008
4(3) 28(3) superseded Sections 205(d) and 234(a) of the Local
Grantee Non-stock, non- Religious, Government Code. Before the passage of Republic Act No.
profit educational, 9500, there was a need to determine who had beneficial use
educational charitable of UP's property before the property may be subjected to
institution real property tax. After the passage of R.A. 9500, there is a
Tax All taxes and Real Property need to determine whether UP's property is used for
Exemptions duties. Tax educational purposes or support thereof before the
Granted property may be subjected to real property tax.

Hence, in this case, we should apply its literal interpretation Section 22 of R.A. 9500 allows UP to lease and develop its
– “solely” – in consonance with the principle of strictissimi land subject to certain conditions. The Contract of Lease
juris. The word “exclusively” indicates that the provision is between UP and ALI shows that there is an intent to develop
mandatory. (J. Dimaampao, 2015, citing McGee v. Republic, "a prestigious and dynamic science and technology park,
94 Phil. 821) where research and technology-based collaborative
projects between technology and the academe thrive,
thereby becoming a catalyst for the development of the
information technology and information technology-

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
enabled service". The development of the subject land is PRESIDENT’S VETO POWER ON APPROPRIATION,
clearly for an educational purpose, or at the very least, in REVENUE, TARIFF BILLS (ART BILL)
support of an educational purpose. (University of The
Philippines v. City Treasurer of Quezon City, G.R. 214044, June BASIS: The President shall have the power to veto any
19, 2019) particular item or items in an appropriation, revenue or
tariff bill but the veto shall not affect the item or items
MAJORITY VOTE OF CONGRESS FOR GRANT OF TAX which he does not object. (Art. VI, Sec. 27(2))
EXEMPTION
The item or items vetoed shall be returned to the Lower
BASIS: No law granting any tax exemption shall be passed House of Congress together with the objections of the
without the concurrence of a majority of all the members of President. If after consideration 2/3 of all the members of
Congress. (Section 28 (4), Art. VI) such House shall agree to pass the bill, it shall be sent,
together with the objection, to the other House by which it
The inherent power of the State to impose taxes carries with shall likewise be considered, and if approved by 2/3 of all
it the power to grant tax exemptions. the members of that House, it shall become a law. (J.
Dimaampao, 2015)
Granting of exemptions
NOTE: The President can only veto particular item or items
Exemptions may be created: for ART Bills. The President cannot veto particular item or
items with regard to non-ART Bills; he can only veto them
1. By the Constitution; or as a whole.
2. By statute, subject to limitations as the Constitution
may provide. NON-IMPAIRMENT OF JURISDICTION
OF THE SUPREME COURT
Required vote for grant of tax exemption
BASIS: The Supreme Court shall have the power to review,
In granting tax exemptions, the absolute majority vote of all revise, reverse, modify, or affirm on appeal on certiorari as
the members of Congress is required. It means at least 50% the laws or the Rules of Court may provide, final judgments
plus 1 of all the members voting separately. (Art. VI, Sec. or orders of lower courts in all cases involving the legality
28(4), 1987 Constitution) of any tax, impost, assessment, or toll or any penalty
imposed in relation thereto. (Art. VIII, Sec. 5(2)(b))
Tax amnesties, tax condonations, and tax refunds are in the
nature of tax exemptions. Such being the case, a law NOTE: These jurisdictions are concurrent with the Regional
granting tax amnesties, tax condonations, and tax refunds Trial Court (RTC). Thus, the petition should generally be
requires the vote of an absolute majority of the members of filed with the RTC following the hierarchy of courts.
the Congress. However, questions on tax laws are usually filed directly
with the Supreme Court as these are impressed with
Required vote for withdrawal of such grant of tax paramount public interest. It is also provided under Art. VI,
exemption Sec. 30 of the Constitution that “no law shall be passed
increasing the appellate jurisdiction of the Supreme Court
A relative majority or plurality of votes is sufficient, that is, without its advice and concurrence.”
majority of a quorum.
The courts cannot inquire into the wisdom of a taxing act,
PROHIBITION ON USE OF TAX LEVIED FOR SPECIAL EXCEPT when there is an allegation of violation of
PURPOSE constitutional limitations or restrictions.

BASIS: All money collected on any tax levied for a special GRANT OF POWER TO THE LGUS TO CREATE ITS OWN
purpose shall be treated as a special fund and paid out for SOURCES OF REVENUE
such purpose only. If the purpose for which a special fund
was created has been fulfilled or abandoned, the balance, if BASIS: Each LGU shall have the power to create its own
any, shall be transferred to the general funds of the sources of revenues and to levy taxes, fees and charges
government. (Sec. 29(3), Art. VI) subject to such guidelines and limitations as the Congress
may provide, consistent with the basic policy of local
NOTE: In Gaston v. Republic Planters Bank, 158 SCRA 626, autonomy. Such taxes, fees, and charges shall accrue
the Court ruled that the “stabilization fees” collected by the exclusively to the local governments. (Art. X, Sec. 5)
State for the promotion of the sugar industry were in the
nature of taxes and no implied trust was created for the Justification in the delegation of legislative taxing
benefit of sugar industries. Thus, the revenues derived power to local governments
therefrom are to be treated as a special fund to be
administered for the purpose intended. No part thereof Delegation of legislative taxing power to local governments
may be used for the exclusive benefit of any private person is justified by the necessary implication that the power to
or entity but for the benefit of the entire sugar industry. create political corporations for purposes of local self-
Once the purpose is achieved, the balance, if any remaining, government carries with it the power to confer on such local
is to be transferred to the general funds of the government. government agencies the authority to tax.
(Vitug, 2006)
Exception to non-delegation of legislative powers


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Taxation Law
The general principle against the delegation of legislative 1. Does R.A. 9337 violate Art. VI, Sec. 24 of the
powers as a consequence of the principle of separation of Constitution on exclusive origination of revenue
powers is subject to one well-established exception: bills?
legislative powers may be delegated to LGUs. Included in 2. Does R.A. 9337 violate Art. VI, Sec. 26(2) of the
this grant of legislative power is the grant of local taxing Constitution on the “No-Amendment Rule”?
power.
A:
Q: May Congress, under the 1987 Constitution, abolish 1. NO. It was H.B. Nos. 3555 and 3705 that initiated the
the power to tax of local governments? (2003 BAR) move for amending provisions of the NIRC dealing
mainly with the VAT. Upon transmittal of said House
A: NO. The Congress cannot abolish the local government’s bills to the Senate, the Senate came out with S.B. No.
power to tax as it cannot abrogate what is expressly granted 1950 proposing amendments not only to NIRC
by the fundamental law. The only authority conferred to provisions on the VAT but also amendments to NIRC
Congress is to provide the guidelines and limitations on the provisions on other kinds of taxes.
local government’s exercise of the power to tax.
Since there is no question that the revenue bill exclusively
The local government’s power to tax is the most originated in the House of Representatives, the Senate was
effective instrument to raise the needed revenues acting within its Constitutional power to introduce
amendments to the House bill when it included provisions
The right of LGUs to collect taxes due must always be upheld in S.B. No. 1950 amending corporate income taxes,
to avoid severe tax erosion. This consideration is consistent percentage, excise and franchise taxes. Verily, Art. VI, Sec.
with the State policy to guarantee the autonomy of the local 24 of the Constitution does not contain any prohibition or
government and the objective of the LGC that they enjoy limitation on the extent of the amendments that may be
genuine and meaningful local autonomy to empower them introduced by the Senate to the House revenue bill. The
to achieve their fullest development as self-reliant Senate can propose amendments and in fact, the
communities and make them effective partners in the amendments made are germane to the purpose of the house
attainment of national goals. (Dimaampao, 2015) bills, which is to raise revenues for the government. The
sections introduced by the Senate are germane to the
ORIGIN OF REVENUE AND TARIFF BILLS subject matter and purposes of the house bills, which is to
supplement our country’s fiscal deficit, among others. Thus,
BASIS: All appropriation, revenue or tariff bills, bills the Senate acted within its power to propose those
authorizing increase of the public debt, bills of local amendments.
application, and private bills shall originate exclusively in
the House of Representatives, but the Senate may propose 2. NO. The “no-amendment rule” refers only to the
or concur with amendments. (Art VI, Sec. 24) procedure to be followed by each house of Congress
with regard to bills initiated in each of said respective
What is required to originate in the House of houses, before said bill is transmitted to the other
Representatives is not the law but the revenue bill which house for its concurrence or amendment. Verily, to
must “originate exclusively” in the lower house. The bill construe said provision in a way as to proscribe any
may undergo such extensive changes that the result may be further changes to a bill after one house has voted on it
a rewriting of the whole. The Senate may not only concur would lead to absurdity as this would mean that the
with amendments but also propose amendments. To deny other house of Congress would be deprived of its
the Senate's power not only to “concur with amendments” Constitutional power to amend or introduce changes to
but also to “propose amendments” would be to violate the said bill. Thus, Art. VI, Sec. 26 (2) of the Constitution
coequality of legislative power of the two houses of cannot be taken to mean that the introduction by the
Congress and in fact make the House superior to the Senate. Bicameral Conference Committee of amendments and
(Tolentino v. Secretary of Finance, G.R. No. 115873, Aug. 25, modifications to disagreeing provisions in bills that
1994) have been acted upon by both houses of Congress is
prohibited. (ABAKADA Guro v. Executive Secretary, G.R.
Q: Why must appropriation, revenue, or tariff bills No. 168056, 168207, 168461, 168463 and 168730,
originate from the Congress? September 1, 2005)

A: On the theory that, elected as they are from the districts, NO APPROPRIATION OR USE OF PUBLIC MONEY FOR
the members of the House of Representatives can be RELIGIOUS PURPOSES
expected to be more sensitive to the local needs and
problems. BASIS: No public money or property shall be appropriated,
applied, paid, or employed directly or indirectly for the use,
Q: R.A. 9337 is a consolidation of three legislative bills benefit, or support of any sect, church, denomination,
namely, H.B. Nos. 3555 and 3705, and S.B. No. 1950. sectarian institution, or system of religion or of any priest,
Because of the conflicting provisions of the proposed preacher, minister, or other religious teacher or dignitary as
bills, the Senate agreed to the request of the House of such, except when such priest, preacher, minister or
Representatives for a committee conference. The dignitary is assigned to the armed forces or to any penal
Conference Committee on the Disagreeing Provisions of institution or government orphanage or leprosarium. (Art.
House Bill recommended the approval of its report, VI, Sec. 29(2))
which the Senate and the House of the Representatives
did. This is in consonance with the inviolable principle of
separation of the Church and State.

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Taxation Law
CONSTITUTIONAL LIMITATIONS: PROVISIONS imposed. (1 Cooley 824-825; Sison Jr. v. Ancheta, G.R. No.
INDIRECTLY AFFECTING TAXATION 59431, July 25, 1984)

DUE PROCESS The power to select subjects of taxation and apportion the
public burden among them includes the power to make
BASIS: No person shall be deprived of life, liberty, or classifications. The inequalities which result in the singling
property without due process of law x x x. (Art. III, Sec. 1) out of one particular class for taxation or exemption
infringe no Constitutional limitation. (Lutz v. Araneta, G.R.
REQUIREMENTS OF No. L-7859, Dec. 22, 1955)
DUE PROCESS IN TAXATION
Requisites for a valid classification (PEGS)
Substantive Due Process
1. Apply both to present and future conditions
1. Tax must be for public purpose; and 2. Apply equally to all members of the same class
2. It must be imposed within territorial jurisdiction. 3. Must be germane to the purposes of the law
4. Must be based on substantial distinction
Procedural Due Process
Q: Is Revenue Memorandum Circular No. 47-91
No arbitrariness or oppression either in the assessment or classifying copra as an agricultural non-food product
collection. discriminatory and violative of the equal protection
clause?
Q: When is deprivation of life, liberty, and property by
the government done in compliance with due process? A: NO. It is not violative and not discriminatory because
there is a material or substantial difference between
A: If the act is done: coconut farmers and copra producers, on one hand, and
1. Under authority of a law that is valid or the Constitution copra traders and dealers, on the other. The former produce
itself (substantive due process); and and sell copra, the latter merely sells copra. The
2. After compliance with fair and reasonable methods of Constitution does not forbid the differential treatment of
procedure prescribed by law (procedural due process). persons, so long as there is reasonable basis for classifying
them differently. (Misamis Oriental Association of Coco
Q: When may violation of due process be invoked by the Traders Inc. v. Secretary of Finance, G.R. No. 108524,
taxpayer? November 10, 1994)

A: The due process clause may be invoked where a taxing Principle of Equality
statute is so arbitrary that it finds no support in the
Constitution, as where it can be shown to amount to a It admits of classification or distinctions as long as they are
confiscation of property. (Reyes v. Almanzor, G.R. Nos. L- based upon real and substantial differences between the
49839-46 April 26, 1991) persons, property, or privileges and those not taxed must
bear some reasonable relation to the object or purpose of
While it is true that the Philippines as a State is not obliged legislation or to some permissible government policy or
to admit aliens within its territory, once an alien is legitimate end of the government.
admitted, he cannot be deprived of life without due process
of law. This guarantee includes the means of livelihood. The Q: The City Council of Ormoc enacted Ordinance No. 4,
shelter of protection under the due process and equal Series of 1964 taxing the production and exportation of
protection clause is given to all persons, both aliens and only centrifugal sugar. At the time of the enactment,
citizens. (Villegas v. Hiu Chiong Tsai Pao Ho, G.R. No. L-29646, plaintiff Ormoc Sugar Co. was the only sugar central in
Nov. 10, 1978) Ormoc. Petitioner alleged that said Ordinance is
unconstitutional for being violative of the equal
Illustrative cases of violations of the due process clause protection clause. Is the Ordinance valid?

1. Tax amounting to confiscation of property A: NO. Equal protection clause applies only to persons or
2. Subject of confiscation is outside the jurisdiction of the things identically situated and does not bar a reasonable
taxing authority classification of the subject of legislation. The classification,
3. Law is imposed for a purpose other than a public to be reasonable, should be in terms applicable to future
purpose conditions as well. The taxing ordinance should not be
4. Law which is applied retroactively imposes unjust and singular and exclusive as to exclude any substantially
oppressive taxes established sugar central, of the same class as Ormoc Sugar
5. The law is in violation of inherent limitations Co., from the coverage of the tax. (Ormoc Sugar Industry v.
City Treasurer of Ormoc City, G.R. No. L-23794, February 17,
EQUAL PROTECTION 1968)

BASIS: No person shall be denied the equal protection of the RELIGIOUS FREEDOM
laws. (Art. III, Sec. 1)
BASIS: No law shall be made respecting an establishment of
It means that all persons subjected to such legislation shall religion or prohibiting the free exercise thereof. The free
be treated alike, under like circumstances and conditions, exercise and enjoyment of religious profession and
both in the privileges conferred and in the liabilities worship, without discrimination or preference, shall

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
forever be allowed. No religious test shall be required for 1. If the grant of the exemption is merely a
the exercise of civil or political rights. (Art. III, Sec. 5) spontaneous concession by the legislature, such
exemption may be revoked. (Unilaterally granted
Q: Is the real property tax exemption of religious by law)
organizations violative of the non-establishment 2. If it is without payment of any consideration or the
clause? assumption of any new burden by the grantee, it is
a mere gratuity and exemption may be revoked.
A: NO. Neither the purpose nor the effect of the exemption (Franchise)
is the advancement or the inhibition of religion; and it 3. However, if the tax exemption constitutes a binding
constitutes neither personal sponsorship of, nor hostility to contract and for valuable consideration, the
religion. (Walz v. Tax Commission, 397 US 664) government cannot unilaterally revoke the tax
exemption. (Bilaterally agreed upon)
Q: Is the imposition of fixed license fee a prior restraint
on the freedom of the press and religious freedom? In Tolentino v. Secretary of Finance (1994), the Court ruled
that R.A. 7716 (E-VAT Law) does not violate the non-
A: YES. As a license fee is fixed in the amount and unrelated impairment clause. The contention that the imposition of
to the receipts of the taxpayer, the license fee, when applied the VAT on the sales and leases of real estate by virtue of
to a religious sect, is actually being imposed as a condition contracts entered into prior to the effectivity of the law
for the exercise of the sect’s right under the Constitution. would violate the constitutional provision that “No law
(Tolentino v. Secretary of Finance, G.R. No. 115873, August impairing the obligation of contracts shall be passed” is
25, 1994) without legal basis.

Q: Is a municipal license tax on the sale of bibles and The parties to a contract cannot fetter the exercise of the
religious articles by a non-stock, non-profit missionary taxing power of the State. For not only are existing laws
organization at minimal profits valid? read into contracts in order to fix obligations as between
parties, but the reservation of essential attributes of
A: NO. Such imposition of license tax constitutes sovereign power is also read into contracts as a basic
curtailment of religious freedom and worship which is postulate of the legal order.
guaranteed by the Constitution. (American Bible Society v.
City of Manila, 101 Phil. 386) The Contract Clause has never been thought as a limitation
on the exercise of the State’s power of taxation save only
Q: Is VAT registration restrictive of religious and press where a tax exemption has been granted for a valid
freedom? consideration.

A: NO. The VAT registration fee, although fixed in amount, Q: X Corporation was the recipient in 1990 of two tax
is not imposed for the exercise of a privilege but only for exemptions both from Congress, one law exempting the
defraying part of the cost of registration. (Tolentino v. company’s bond issues from taxes and the other
Secretary of Finance, G.R. No. 115873, August 25, 1994) exempting the company from taxes in the operation of
its public utilities. The two laws extending the tax
NON-IMPAIRMENT CLAUSE exemptions were revoked by Congress before their
expiry dates. Were the revocations constitutional?
BASIS: No law impairing the obligation of contracts shall be (1997 BAR)
passed. (Art. III, Sec. 10)
A: YES. The exempting statutes are both granted
Instances when there is impairment of the obligations unilaterally by Congress in the exercise of taxing powers.
of contract Since taxation is the rule and tax exemption, the exception,
any tax exemptions unilaterally granted can be withdrawn
When the law changes the terms of the contract by: at the pleasure of the taxing authority without violating the
1. Making new conditions; Constitution. (Mactan Cebu International Airport Authority
2. Changing conditions in the contract; or v. Marcos, G.R. No. 120082, September 11, 1996)
3. Dispenses with the conditions expressed therein.
FREEDOM OF THE PRESS
Rationale for the non-impairment clause in relation to
contractual tax exemption BASIS: No law shall be passed abridging the freedom of
speech, of expression, or of the press, or the right of the
When the State grants an exemption on the basis of a people peaceably to assemble and petition the government
contract, consideration is presumed to be paid to the State for redress of grievances. (Art. III, Sec. 4)
and the public is supposed to receive the whole equivalent
thereof. NOTE: Even with due recognition of its high estate and its
importance in a democratic society, however the press is
NOTE: This applies only where one party is the government not immune from general regulation by the State. It has
and the other party, a private person. been held that the publisher of a newspaper has no
immunity from the application of general laws. He has no
Rules regarding non-impairment of obligation and special privilege to invade the rights and liberty of others.
contract with respect to the grant of tax exemptions He must answer for libel. He may be punished for contempt
of court. Like others, he must pay equitable and

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
nondiscriminatory taxes on his business. (Tolentino v. NOTE: The remission or condonation of taxes due and
Secretary of Finance, G.R. No. 115873, August 25, 1994) payable to the exclusion of taxes already collected does not
constitute unfair discrimination. Each set of taxes is a class
Q: Explain the requirement of uniformity as a limitation by itself and the law would be open to attack as class
in the imposition and/or collection of taxes. (1998 legislation only if all taxpayers belonging to one class were
BAR) not treated alike. (Juan Luna Subdivision, Inc., v. Sarmiento,
G.R. L-3538, May 28, 1952)
A: Uniformity in the imposition and/or collection of taxes
means that all taxable articles, or kinds of property of the REQUISITES OF A VALID TAX
same class shall be taxed at the same rate. The requirement
of uniformity is complied with when the tax operates with Q: What are the requisites of a valid tax?
the same force and effect in every place where the subject
of it is found. (Churchill & Tait v. Concepcion, 34 Phil. 969) A:
1. It should be for a public purpose.
Q: Does the 20% Sales Discount for Senior Citizens and 2. It should be uniform;
Persons with Disabilities violates the constitutional 3. The person or property being taxed should be
right of equal protection clause? within the jurisdiction of the taxing authority; and
4. The tax must not impinge on the inherent and
A: NO. The equal protection clause is not infringed by constitutional limitations on the power of taxation.
legislation which applies only to those falling within a
specified class. If the groupings are characterized by GENERAL CONCEPTS IN TAXATION
substantial distinctions that make real differences, one class

may be treated and regulated differently from another.
Q: May tax laws be applied retroactively?
(Southern Luzon Drug Corporation v. DSWD, G.R. No. 199669,

April 25, 2017)
A: NO. Tax laws must only be imposed prospectively.

UNLESS, the law expressly provides for retroactive
Q: What is the basis for the prohibition against taxation
application. Retroactive application of revenue laws may be
of religious, charitable entities, and educational
allowed if it will not amount to denial of due process. There
entities?
is a violation of due process when the tax law imposes harsh

and oppressive tax. (CIR v. Acosta, G.R. No. 154068 August 3,
A: Charitable institutions, churches and parsonages or
2007)
convents appurtenant thereto, mosques, non-profit

cemeteries, and all lands, buildings, and improvements,
Q: Are tax laws imprescriptible?
actually, directly, and exclusively used for religious,

charitable, or educational purposes shall be exempt from
A: YES. Taxes are imprescriptible by reason that they are
taxation. (Art. IV, Sec. 28 (3))
the lifeblood of the government. However, tax laws may

provide for statute of limitations. In particular, the NIRC and
Q: What is the coverage of the tax exemption?
LGC provide for the prescriptive periods for assessment and

collection. Tax laws provide for statute of limitations in the
A: It covers real property taxes only.
collection of taxes for the purpose of safeguarding

taxpayers from any unreasonable examination,
Q: When may violation of due process be invoked by the
investigation or assessment. (CIR v. B.F. Goodrich Phils., G.R.
taxpayer?
No. 104171, February 24, 1999)

A: The due process clause may be invoked where a taxing
Q: What is the difference between tax evasion and tax
statute is so arbitrary that it finds no support in the
avoidance?
Constitution, as where it can be shown to amount to a

confiscation of property. (Reyes v. Almanzor, G.R. Nos. L-
A: Tax avoidance is a scheme where the taxpayer uses
49839- 46 April 26, 1991)
legally permissible alternative method of assessing taxable

property or income, in order to avoid or reduce tax liability.
Q: What is the “rational basis” test? Explain briefly.
On the other hand, tax evasion is It is a scheme used outside
(2010 BAR)
of those lawful means and when availed of. It usually

subjects the taxpayer to further or additional civil or
A: The rational basis test is applied to gauge the
criminal liabilities. (CIR v. The Estate of Benigno Toda Jr.,
constitutionality of an assailed law in the face of an equal
G.R. No. 30554, February 28, 2004)
protection challenge. It has been held that “in areas of social

and economic policy, a statutory classification that neither
Q: What is the rule regarding the compensation and
proceeds along suspect lines nor infringes constitutional
set-off of taxes?
rights must be upheld against equal protection challenge if

there is any reasonably conceivable state of facts that could
A: No set-off is admissible against the demands for taxes
provide a rational basis for the classification.” Under the
levied for general or local governmental purposes. Taxes
rational basis test, it is sufficient that the legislative
cannot be subject to compensation because the government
classification is rationally related to achieving some
and the taxpayer are not creditors and debtors of each
legitimate State interest. (British American Tobacco v.
other. (Philex Mining Corporation v. CIR, 356 Phil. 189,
Camacho and Parayno, GR No. 163583, April 15, 2009)
198;294 SCRA 687, 695 (1998), cited in CIR v. Toledo Power

Company, G.R. No. 196415. December 2, 2015)

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Q: Does said rule admit an exception? deductions and exemptions from the gross income, the
taxable income is subjected to one set of graduated tax rate
A: YES. Where both the claims of the government and the for individual or normal corporate income tax rate for
taxpayer against each other have already become due, corporation. (Mamalateo, 2014)
demandable, and fully liquidated, compensation takes place
by operation of law and both obligations are extinguished Q: What are the features of the Philippine Income Tax
to their concurrent amounts. In the case of the taxpayer’s Law?
claim against the government, the government must have
appropriated the amount thereto. (Domingo v. Garlitos, G.R. A:
No. L-18994, June 29, 1963) 1. Direct tax
2. Progressive tax
Offsetting can be allowed if the determination of the 3. Comprehensive
taxpayer’s liability is intertwined with the resolution of the 4. Semi-schedular or semi-global tax system
claim for tax refund of erroneously or illegally collected (Mamalateo, 2014)
taxes under Section 229 of the NIRC. (CIR v. Toledo Power
Company, G.R. No. 196415. December 2, 2015) Q: What are the General Principles of Income Taxation?

Q: What is the concept of tax amnesty? A:
1. A resident citizen (RC) is taxable on all income derived
A: Tax amnesty, being a general pardon or intentional from sources within and without the Philippines.
overlooking by the State of its authority to impose penalties 2. A non-resident citizen (NRC) is taxable only on income
on persons otherwise guilty of evasion or violation of a derived from sources within the Philippines.
revenue or tax law. It partakes of an absolute waiver by the 3. An individual citizen who is working and deriving
government of its right to collect what is due it and to give income from abroad as an overseas contract worker
tax evaders who wish to relent a chance to start with a clean (OCW) is taxable only on income from sources within
slate. (Asia International Auctioneers, Inc. v. CIR, G.R. No. the Philippines.
179115, September 26, 2012) 4. An alien, resident alien (RA), or non-resident alien
(NRA) is taxable only on income within the
Q: Can a taxpayer claim tax amnesty if he is a Philippines.
withholding tax agent? 5. A domestic corporation (DC) is taxable on all income
derived within and without the Philippines.
A: NO. The claim of a taxpayer under a tax amnesty shall be 6. A foreign corporation, (engaged or not in trade or
allowed when the liability involves the deficiency in business in the Philippines), is taxable only on income
payment of income tax. However, it must be disallowed derived from sources within the Philippines.
when the taxpayer is assessed on his capacity as a
withholding tax agent because the person who earned the Q: Who are Resident Citizens?
taxable income was another person other than the
withholding agent. (LG Electronics Philippines, Inc. v. CIR, A: A resident citizen can be (a) engaged in trade or business
G.R. No. 165451, December 3, 2014) or in the exercise of his profession in the Philippines; (b) not
engaged in trade or business or in the exercise of his
INCOME TAX profession; or (c) engaged in trade or business or in the
exercise of his profession and at the same time, he derives
Q: What is the concept of income tax? compensation and/or other income “mixed income.”
(Mamalateo, 2014)
A: Income taxation is in the nature of an excise taxation
system, or taxation on the exercise of privilege, the privilege Q: Who are considered Non-Resident Citizens?
to earn yearly profits from various sources. It is a system
that does not provide for the taxation of property. A:
(Domondon, 2013) 1. A citizen of the Philippines who establishes to the
satisfaction of the Commissioner the fact of his
Q: What are the different types of income tax systems? physical presence abroad with a definite intention to
reside therein.
A: Global – System employed where the tax system views 2. A citizen of the Philippines who leaves the Philippines
indifferently the tax base and generally treats in common all during the taxable year to reside abroad, either as an
categories of taxable income of the individual. (Tan v. Del immigrant or for employment on a permanent basis.
Rosario, Jr., 237 SCRA 324, 331) 3. A citizen of the Philippines who works and derives
income from abroad and whose employment thereat
Schedular – System employed where the income tax requires him to be physically present abroad most of
treatment varies and is made to depend on the kind or the time during the taxable year.
category of taxable income of the taxpayer. (Tan v. Del 4. A citizen who has been previously considered as non-
Rosario, Jr., 237 SCRA 324, 331) resident citizen and who arrives in the Philippines at
any time during the taxable year to reside
Others – All compensation income, business, or permanently in the Philippines shall likewise be
professional income, capital gain, passive income, and other treated as a non-resident citizen for the taxable year in
income not subject to final tax are added together to arrive which he arrives in the Philippines with respect to his
at the gross income. After deducting the allowable income derived from sources abroad until the date of
his arrival in the Philippines.

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
5. The taxpayer shall submit proof to the Commissioner Q: Distinguish Cash and Accrual Method.
to show his intention of leaving the Philippines to
reside permanently abroad or to return to and reside A: In cash method, income is recognized only upon actual or
in the Philippines as the case may be for purposes of constructive receipt of cash payments or property, but no
this section. (Sec. 22(E), NIRC) deductions are allowed from the cash income unless
actually disbursed through an actual or constructive
CONCEPT OF INCOME payment in cash or property. Stated otherwise, income is
earned when cash is collected, and expense is incurred
Q: What is the concept of income? when cash is disbursed.

A: Income refers to all wealth which flows into the taxpayer Meanwhile, in accrual method, income is recognized in the
other than as mere return of capital. It includes the forms of period it is earned, regardless of whether it has been
income specifically described as gains and profits, including received or not. In the same manner, expenses are
gains derived from the sale or other disposition of. capital accounted for in the period they are incurred and not in the
assets. (Sec. 36, RR No.2) period they are paid. (Domondon, 2013)

Income is a flow of service rendered by capital by payment Q: What are the income derived from sources within the
of money from it or any benefit rendered by a fund of capital Philippines?
in relation to such fund through a period of time. (Madrigal
v. Rafferty, G.R. No. 12287, August 8, 1918) A:
1. Interests derived from sources within the Philippines;
Q: What are the test to determine whether income is 2. Dividends from domestic and foreign corporations, if
earned for tax purposes? more than 50% of its gross income for the three-year
period ending with the close of the taxable year prior
A: to the declaration of dividends was derived from
Realization Test sources within the Philippines;
3. Compensation for services performed within the
There is no taxable income unless income is deemed Philippines;
realized. Revenue is generally recognized when both 4. Rentals and royalties from properties located in the
conditions are met: Philippines or any interest in such property including
1. The earning process is complete or virtually complete; rentals or royalties for the use of or for the privilege of
and using within the Philippines intellectual property
2. An exchange has taken place. (Manila Mandarin Hotels, rights such as trademarks, copyrights, patents, etc.;
Inc. v. CIR, CTA Case No. 5046, March 24, 1997) 5. Gains on sale of real property located in the
Philippines;
Claim of Right Doctrine 6. Gains on sale of personal property other than shares
of stock within the Philippines; and
A taxable gain is conditioned upon the presence of a claim 7. Gains on sale of shares of stock in a domestic
of right to the alleged gain and the absence of a definite corporation.
unconditional obligation to return or repay. (CIR v. Javier,
G.R. No. 78953) Q: What are the income derived from sources without
the Philippines?
Economic benefit test
A:
Taking into consideration the pertinent. provisions of law, 1. Interest and dividends derived from sources other
income realized is taxable only to the extent that the than those within the Philippines;
taxpayer is economically benefited. 2. Compensation for services performed outside the
Philippines; and
Severance test 3. Rentals and royalties from properties located outside
the Philippines or any interest in such property
Income is recognized when there is separation of something including rentals or royalties for the use of or for the
which is of exchangeable value. (Eisner v. Macomber, 252 US privilege of using outside the Philippines intellectual
189) property rights such as trademarks, copyrights,
patents, etc.
Q: Mr. Castillo is a resident Filipino citizen. He
purchased a parcel of land in Makati in 1970 at a Q: What are those income derived partly within and
consideration of ₱1 million. In 2011, the land had a fair partly without?
market value of ₱20 million. Mr. Ayala offered to buy
the same for ₱20 million. Is Mr. Castillo liable to pay for A: Items of gross income, expenses, losses and deductions,
income tax in 2011 based on the offer to buy by Mr. other than those above, shall be allocated or apportioned to
Ayala? (2011 BAR) sources within or without the Philippines, under the rules
and regulations prescribed by the Secretary of Finance,
A: NO. Mr. Castillo is not liable for income tax in 2011 was upon recommendation of the Commissioner.
for income tax attaches only if there is a gain realized
resulting from a closed and completed transaction. GROSS INCOME
(Madrigal v. Rafferty, G.R. No. L12287, August 7, 1918)

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Q: What is Gross Income? 4. Taxable under the tax benefit rule. Recovery of bad debts
previously allowed as deduction in the preceding years
A: Except when otherwise provided, gross income means all shall be included as part of the gross income in the year of
income derived from whatever source, including but not recovery to the extent of the income tax benefit of said
limited to the following items: deduction. (NIRC, Sec. 34E(1))

1. Compensation for services in whatever form paid, 5. Taxable. Since the car is used for personal purposes, it is
including, but not limited to fees, salaries, wages, considered as a capital asset hence the gain is considered
commissions and similar items income. (NIRC, Sec. 32(A)(3) and Sec. 39(A)(1))
2. Gross income derived from the conduct of trade or
business or the exercise of a profession Q: What is Compensation Income?
3. Gains derived from dealings in property
4. Interests A: Compensation income includes all remuneration for
5. Rents services rendered by an employee for his employer unless
6. Royalties specifically excluded under the NIRC. (Sec. 2.78.1, RR No. 2-
7. Dividends 1998)
8. Annuities
9. Prizes and winnings Q: What is the concept of Fringe Benefits?
10. Pensions and
11. Partner’s distributive share from the net income of the A: Fringe benefit is any good, service or other benefit
general professional partnership (NIRC, Sec. 32 (A)) furnished or granted by an employer, in cash or in kind, in
addition to basic salaries, to an individual employee, except
Q: Is money received under payment by mistake, a rank-and-file employee, such as but not limited to:
income subject to income tax?
1. Housing
A: Income paid or received through mistake may be 2. Expense account
considered as “income from whatever source derived” 3. Vehicle of any kind
irrespective of the voluntary or involuntary action of the 4. Household personnel such as maid, driver
taxpayer in producing income. Moreover, under the “claim 1. and others
of right doctrine,” the recipient even if he has the obligation 5. Interest on loans at less than market rate to the extent
to return the same has a voidable title to the money of the difference between the market rate and the
received through mistake. (Gutierrez v. CIR, CTA Case No. 65, actual rate granted
August 31, 1955) 6. Membership fees, dues and other expenses athletic
clubs or other similar organizations
Q: Explain briefly whether the following items are 7. Expenses for foreign travel
taxable or non-taxable: (1) Income from jueteng; (2) 8. Holiday and vacation expenses
Gain arising from expropriation of property; (3) Taxes 9. Educational assistance to the employee or his
paid and subsequently refunded, (4) Recovery of bad dependents
debts previously charged off; and (5) Gain on the sale of 10. Life or health insurance and other non-life insurance
a car used for personal purposes. (2005 BAR) premiums or similar amounts in excess of what the
law allows (Sec. 3 3(B), NIRC; Sec. 2.33 (B), RR No. 3-
A: 1998)
1. Taxable. Gross income includes "all income derived from
whatever source" (Sec. 32(A), NIRC), which was interpreted Q: Distinguish ordinary asset and capital asset (2003
as all income not expressly excluded or exempted from the BAR)
class of taxable income, irrespective of the voluntary or
involuntary action of the taxpayer in producing the income. A: Capital assets include property held by the taxpayer
Thus, the income may proceed from a legal or illegal source whether or not connected with his trade or business, but the
such as from jueteng. Unlawful gains, gambling winnings, term does not include any of the following, which are
etc. are subject to income tax. The NIRC stands as an consequently considered “ordinary assets”:
indifferent neutral party on the matter of where the income
comes from. (CIR v. Manning, G.R. No. L-28398, August 6, 1. Stock in trade of the taxpayer or other property of a
1975) kind which would be properly included in the
inventory of the taxpayer if on hand at the close of the
2. Taxable. Sale, exchange or other disposition of property taxable year;
to the government of real property is taxable. It includes 2. Property held by the taxpayer primarily for sale to
taking by the government through condemnation customers in the ordinary course of trade or business;
proceedings. (Gonzales v. CTA, G.R. No. L14532, May 26, 3. Property used in the trade or business of a character
1965) which is subject to the allowance for depreciation
provided in Sec. 34(f) of the NIRC; or
3. Taxable if the taxes were paid and subsequently claimed 4. Real property used in trade or business of the
as deduction and which are subsequently refunded or taxpayer. (Sec. 31(A)(1), NIRC)
credited. It shall be included as part of gross income in the
year of the receipt to the extent of the income tax benefit of
said deduction. (NIRC, Sec. 34(C)(1)) However, it is not
taxable if the taxes refunded were not originally claimed as
deductions.

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Q: State with reason the tax treatment of the following consolidation; or
in the preparation of annual income tax returns:
Income realized from sale of: a. Capital assets; and b. b. The acquisition by one corporation, in exchange solely
Ordinary assets. (2005 BAR) for all or a part of its voting stock, or in exchange solely
for all or part of the voting stock of a corporation
A: which is in control of the acquiring corporation, of
a. Generally, what are to be reported in the annual stock of another corporation if, immediately after the
income tax return are the capital gains derived from acquisition, the acquiring corporation has control of
the disposition of capital assets other than real such other corporation whether or not such acquiring
property or shares of stocks in domestic corporations, corporation had control immediately before the
which are not subject to final tax. Capital gains derived acquisition; or
from real properties and shares of stock not traded in
the stock exchange are subject to final tax (capital c. The acquisition by one corporation, in exchange solely
gains tax). for all or a part of its voting stock or in exchange solely
for all or part of the voting stock of a corporation
b. Income realized from sale of ordinary assets is part of which is in control of the acquiring corporation, of
Gross Income, included in the Income Tax Return. substantially all of the properties of another
(Sec.32(A)(3), NIRC) corporation. In determining whether the exchange is
solely for stock, the assumption by the acquiring
Q: Special rules pertaining to income or loss from corporation of a liability of the others shall be
dealings in property classified as capital asset disregarded; or

A: Loss limitation rule, loss carry-over rule, and holding d. No gain or loss shall also be recognized if property is
period rule. transferred to a corporation by a person, alone or
together with others, not exceeding four (4) persons,
Q: What is the Loss Limitation Rule? in exchange for stock or unit of participation in such a
corporation of which as a result of such exchange the
A: Losses from sale or exchanges of capital assets shall be transferor or transferors, collectively, gains or
allowed only up to the extent of the gains from such sales or maintains control of said corporation: Provided, that
exchanges. (Sec. 39(C),NIRC) stocks issued for services shall not be considered as
issued in return for property
Q: What is the Loss Carry-Over Rule?
Q: As to tax implication, distinguish shares of stocks not
A: If any taxpayer, other than a corporation, sustains in any listed and traded through stock exchange from those
taxable year a net capital loss, such loss (in an amount not listed and traded through stock exchange (2008, 2011
in excess of the net income for such year) shall be treated in BAR)
the succeeding taxable year as a loss from the sale or
exchange of a capital asset held for not more than 12 A:
months. (Sec. 39(D), NIRC) NOT LISTED AND LISTED AND
TRADED TRADED
Q: What is the Holding Period Rule? As to Income Business
nature
A: Where the taxpayer held the capital asset sold for more As to kind Capital gains tax Percentage tax
than 12 months, the gain derived therefrom is taxable only of tax
to the extent of 50%. Consequently, if the taxpayer held the As to rate Before TRAIN Before TRAIN Law:
capital asset sold for a year or less, the whole gain shall be Law: ½ of 1%
taxable. The same also applies to capital loss. It is a form of Not over ₱100,000
tax avoidance since the taxpayer can exploit it in order to – 5% Under TRAIN Law:
reduce his tax due. (Sec. 39(B), NIRC) In excess of 6/10 of 1%
₱100,000 – 10%
Q: What is the rule on recognition of gain or loss in
exchange of property? Under TRAIN
Law:
A: Upon the sale or exchange of property, the entire amount 15% final tax, if
of the gain or loss shall be recognized. covered by the
Q: What are tax-free exchanges? TRAIN Law

A: No gain or loss shall be recognized on a corporation or on For RFCs and
its stock or securities if such corporation is a party to a NRFCs under
reorganization and exchanges property in pursuance of a TRAIN Law:
plan of reorganization solely for stock or securities in Not over ₱100,000
another corporation that is a party to the reorganization. A – 5%
reorganization is defined as: In excess of
₱100,000 – 10%
a. A corporation, which is a party to a merger or As to tax Net capital gain Gross selling price
consolidation, exchanges property solely for stock in a base
corporation, which is a party to the merger or

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Q: Mr. H decided to sell the house and lot wherein he 2. The historical cost or adjusted basis of the real
and his family have lived for the past 10 years, hoping property sold or disposed will be carried over to the
to buy and move to a new house and lot closer to his new principal residence built or acquired.
children’s school. Concerned about the capital gains tax 3. The Commissioner has been duly notified, through a
that will be due on the sale of their house, Mr. H prescribed return, within 30 days from the date of sale
approaches you as a friend for advice if it is possible for or disposition of the person’s intention to avail of the
the sale of their house to be exempted from capital tax exemption.
gains tax and the conditions they must comply with to 4. Exemption was availed only once every 10 years.
avail themselves of said exemption. How will you
respond? (2015 Bar) Q: What is meant by “income subject to final tax?” (2001
Bar)
A: Mr. H may avail the exemption from capital gains tax on
sale of principal residence by natural persons. Under the A: Income subject to final tax refers to an income wherein
law, the following are the requisites: the tax due is fully collected through the withholding tax
1. Proceeds of the sale of the principal residence have system. Under this procedure, the payor of the income
been fully utilized in acquiring or constructing new withholds the tax and remits it to the government as a final
principal residence within 18 calendar months from settlement of the income tax due on said income. The
the date of sale or disposition. recipient is no longer required to include the item of income
subjected to “final tax” as part of his gross income in his
income tax returns.
Summary rules on the tax treatment of certain passive income as applied to individuals

RC NRC RA NRA-ETB NRA –NETB
Within
Sources of Income and Within Within Within Within
without
NATURE OF INCOME TAX RATE
INTEREST
On interest on currency bank deposits,
yield or other monetary benefits from
deposit substitutes, trust funds and
similar arrangements

XPN: 20% 20% 20% 20% 25%
If the depositor has an employee trust
fund or accredited retirement plan, such
interest income, yield or other
monetary benefit is exempt from final
withholding tax.
Interest income under the Expanded

Foreign Currency Deposit System

NOTE: If the loan is granted by a
foreign government, or an
15% Exempt 15% Exempt Exempt
international or regional financing
institution established by government,
the interest income of the lender shall
not be subject to the final withholding
tax.
Interest Income from long-term
deposit or investment in the form of
Held for:
savings, common or individual trust
5 years or more – exempt
funds, deposit substitutes, investment
4 years to less than 5 years – 5% Exempt
management accounts and other
3 years to less than 4 years – 12%
investments evidenced by certificates
less than 3 years – 20%
in such form prescribed by the BSP (RR
14-2012)
DIVIDEND

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Dividend from a DC or from a joint

stock company, insurance or mutual
fund company and regional operating
headquarters of a multinational
company; or on the share of an
individual in the distributable net
income after tax of partnership (except 10% 10% 10% 20% 25%
that of a GPP) of which he is a partner,
or on the share of an individual in the
net income after tax of an association, a
joint account or joint venture or
consortium taxable as a corporation of
which he is a member of co-venturer
ROYALTY INCOME
Royalties on books, literary works and
10% 10% 10% 10% 25%
musical composition
Other royalties (e.g., patents and
20% 20% 20% 20% 25%
franchises)
PRIZES AND WINNINGS
Prizes exceeding ₱10,000 20% 20% 20% 20% 25%
Winnings 20% 20% 20% 20% 25%
Winnings from Philippines Charity
sweepstakes and lotto winnings which Exempt Exempt Exempt Exempt 25%
are 10,000 pesos or less

More than 10,000 pesos 20% 20% 20% Exempt 25%

Summary rules on the tax treatment of certain passive income as applied to corporations (Sec. 27 (D))

Interests from any currency bank deposits, yield, 20% Short-term Shall be considered
or any other monetary benefits from deposit interest: 20% as part of gross
substitutes and from trust fund and similar income subject to
arrangement and Royalties derived from sources Long term interest: 30% NCIT.
within the Philippines 30%

NOTE: Interest income or yield earned by DC from
sources outside the Philippines shall not be
subject to final tax of 20% but included in the
gross income and subject to NCIT.
Interest Income derived under expanded foreign 15% 7.5% Exempt
currency deposit system
Interest derived by depositary bank under the 10% 10% Exempt
expanded foreign currency deposit system from
foreign currency loans granted to residents other
than offshore banking units (OBUs)

NOTE: If granted to non-residents, OBUs, local
commercial banks or branches foreign banks
authorized by BSP to transact business – EXEMPT
Interest received by NRFC on foreign loans (NIRC, – – 20%
Sec. 28 (5a))
Dividends received from Domestic Corporation Exempt Exempt 15% (subject to tax
(Inter-corporate Dividend) credit sparing rule)

Q: What are Tax-exempt interest income? 2. Regional or international financing institutions
established by foreign government (Sec. 25(A)(2),
A: NIRC)
1. From bank deposits. The recipient must be any 3. On loans extended by any of the above-mentioned
following tax-exempt recipients: entities
a. Foreign government 4. On bonds, debentures, and other certificate of
b. Financing institutions owned, controlled, or indebtedness received by any of the above-mentioned
financed by foreign government entities

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
5. On bank deposit maintained under the expanded 50 - 85% Proportionate
foreign currency deposit (partly within;
6. From long term investment or deposit with a maturity partly without)
period of 5 years or more. More than 85% Entirely within

Q: What are the rules regarding Inter-corporate Summary of tax treatment of dividend received from
dividends? domestic corporation

A: There is inter-corporate dividend when a dividend is RECIPIENT TAXABLE (TAX RATE) / EXEMPT
declared by one corporation and received by another DC / RFC Tax exempt
corporation which is a stockholder to the former. The RC, NRC, RA 10%
following rules shall apply: NRA – ETB 20%
NRA – NETB 25%
1. Dividends received from DC: NRFC 15% subject to credit sparing rule
a. Dividends received by a DC and RFC from a
domestic corporation shall not be subject to tax Q: BBB, Inc., a domestic corporation, enjoyed a
(Sec. 27(D)(4), Sec. 28(A)(7)(d), NIRC); particularly profitable year in 2014. In June 2015, its
b. Dividends received by a NRFC from a DC shall be
Board of Directors approved the distribution of cash
subject to 15% FWT. This is known as the tax
dividends to its stockholders. BBB, Inc. has individual
sparing rule. (Sec. 28(B)(5)(b), NIRC)
and corporate stockholders. What is the tax treatment

of the cash dividends received from BBB, Inc. by the
Tax sparing rule following stockholders?

a. A resident citizen
Under this rule, the dividends received shall be
b. Non-resident alien engaged in trade or business
subject to 15% FWT, provided, that the country in c. Non-resident alien not engaged in trade or
which the corporation is domiciled either (i) allows business
a tax credit of 15% against the taxes due from the d. Domestic corporation
foreign corporation for taxes deemed paid; or (ii) e. Non-resident foreign corporation (2015 Bar)
does not impose income tax on such dividends. (CIR
v. Wander Philippines Inc., G.R. No. L-68375, April 15,
A:
1988); otherwise, the dividend shall be subject to
a. A final withholding tax of 10% shall be imposed upon
30%.
cash dividends actually or constructively received by a

resident citizen from BBB, Inc. (Sec. 24(B)(2))
The phrase “deemed paid” “tax credit” does not
b. A final withholding tax of 20% shall be imposed upon
mean tax credit actually granted by the foreign cash dividends actually or constructively received by a
country. There is no statutory provision or revenue non-resident alien engaged in trade or business from
regulation requiring “actual grant”.
BBB, Inc. (Sec. 24(A)(2), NIRC)
c. A final withholding tax equal to 25% of the entire
The 15% represents the difference between the income received from all sources within the
NCIT of 30% on corporations and the 15% tax on Philippines, including the cash dividends received from
dividends. BBB, Inc. (Sec. 25(B), NIRC)
d. Dividends received by a domestic corporation from
2. Dividends received from a foreign corporation:
another domestic corporation, such as BBB, Inc., shall
a. Dividends received by a DC from a foreign
not be subject to tax. (Sec. 27(D)(4), NIRC)
corporation shall be subject to 30% NCIT;
e. Dividends received by a non-resident foreign
corporation from a domestic corporation are generally
b. Dividends received by RFC and NRFC from a foreign subject to an income tax of 30% to be withheld at
corporation shall be subject to 30% NCIT, IF the
source. (Sec. 28(B)(1), NIRC)
income of the foreign corporation is derived from
sources within the Philippines; IF the said income However, a final withholding tax of 15% is imposed on the
is derived from sources outside the Philippines, the amount of cash dividends received from a domestic
dividends received shall be exempt from tax. corporation like BBB, Inc. if the tax sparing rule applies (Sec.
28(B)(5)(b), NIRC). Pursuant to this rule, the lower rate of
Q: What is the rule in determining whether income is tax would apply if the country in which the non-resident
derived from sources within or without the foreign corporation is domiciled would allow as a tax credit
Philippines? against the tax due from it, taxes deemed paid in the
Philippines of 15% representing the difference between the
A: In determining whether income is derived from sources regular income tax rate and the preferential rate.
within or without the Philippines, the ratio of the foreign
corporation’s Philippine gross income to the world gross
Summary of treatment of royalty income:
income within the 3-year period preceding the declaration

of such dividend should be considered.
SUBJECT TO 10% FINAL TAX

Royalties on books, other literary works and musical
PHILIPPINE GROSS INCOME SOURCE OF
composition from sources within the Philippines.
= % WORLD GROSS INCOME INCOME
Less than 50% Entirely without

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Royalties derived from sources within the Philippines

other than royalties subject to 10% to final tax.
Royalties on books, other literary works and musical
composition from sources within the Philippines.
Q: What is “Tax Benefit Rule” or Equitable Doctrine of
Q: X purchased a life annuity for P100,000 which will Tax Benefit?
pay him P10,000 a year. The life expectancy of X is 12
years. How much is excluded from the gross income of A: It is a principle that if a taxpayer recovers a loss or
X? expense that was deducted in a previous year, the recovery
must be included in the current year's gross income up to
A: The P100,000 is excluded from the gross income of X the extent that it was previously deducted.
since it represents a return of premiums which is not
income but a return of capital. Two instances where tax benefit rule applies:
1. Recovery of bad debts
Q: What is the tax treatment for prizes and winnings? 2. Receipt of tax refund or credit

A: Generally, prizes exceeding P10,000 and other winnings Q: ABC, a domestic corporation, entered into a software
from sources within the Philippines shall be subject to 20% license agreement with XYZ, a non-resident foreign
final withholding tax, if received by a citizen, resident alien corporation based in the U.S. Under the agreement
or non-resident engaged in trade or business in the which the parties forged in the U.S., XYZ granted ABC
Philippines. If the recipient is a non-resident alien not the right to use a computer system program and to avail
engaged in trade or business in the Philippines, the prizes of technical know-how relative to such program. In
and other winnings shall be subject to 25% final consideration for such rights, ABC agreed to pay 5% of
withholding tax. If the recipient is a corporation (domestic the revenues it receives from customers who will use
or foreign), the prizes and other winnings are added to the and apply the program in the Philippines. Discuss the
corporation’s operating income and the net income is tax implication of the transaction. (2010 Bar)
subject to 30% corporate income tax.
A: The amount payable under the agreement is in the nature
RECIPIENTS TAX RATES of a royalty. The term royalty is broad enough to include
Citizen, resident alien or Subject to 20% compensation for the use of an intellectual property and
non-resident engaged in final supply of technical know-how as a means of enabling the
trade or business in the withholding tax application or enjoyment of any such property or right (Sec
Philippines 42(4) NIRC). The royalties paid to the non-resident US
Non-resident alien not Subject to 25% Corporation, equivalent to 5% of the revenues derived by
engaged in trade or final ABC for the use of the program in the Philippines, is subject
business in the Philippines withholding tax to a 30% final withholding tax, unless a lower tax rate is
Corporation (domestic or Subject to 30% prescribed under an existing tax treaty (Sec 28(B)(1) NIRC).
foreign) corporate
income tax Q: What are exclusions?

Q: What are prizes and winnings subject to income tax? A: Exclusions from gross income refer to the flow of wealth
to the taxpayers which are not considered part of gross
A: income for purposes of computing the taxpayer’s taxable
1. Prizes derived from sources within the Philippines not income due to the following:
exceeding ₱10,000 are included in the gross income
subject to regular income tax. 1. It does not come within the definition of income; or
2. Winnings derived from sources within the Philippines 2. It is exempted by the fundamental law or by statute.
is subject to final tax on passive income
3. PCSO and lotto winnings is subject to final tax on Q: What is the Rationale of Exclusions?
passive income
4. Prizes and winnings from sources outside the A: There are exclusions from the gross income either
Philippines because they:
1. Represent return of capital;
Q: What is the implication of the phrase “income from 2. Are not income, gain or profit;
any source”? 3. Are subject to another kind of internal revenue tax; or
4. Are income, gain or profit that is expressly exempt
A: Income from whatever source derived” implies that all from income tax under the Constitution, Tax treaty,
income not expressly exempted from the class of taxable NIRC, or general or a special law.
income under our laws form part of the taxable income,
irrespective of the voluntary or involuntary action of the Q: Differentiate tax exclusions from tax deductions.
taxpayer in producing the income. The source of the income (2019 Bar)
may be legal or illegal.
A: Tax exclusions pertain to the computation of gross
income while tax deductions pertains to the computation of
net income. Tax exclusions are something received or
earned by the taxpayer which do not form part of gross

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
income while tax deductions are something spent or paid in Q: What are the rules with respect to deductions?
earning gross income. Lastly, the former is flow of wealth to
the taxpayer which are not treated as part of gross income A:
for purposes of computing the taxpayer’s taxable income 1. Deductions must be paid or incurred in connection
due to the following reasons: with the taxpayer’s trade, business, or profession.
a. It is exempted by the fundamental law;
b. It is exempted by a statute; and Ordinary and necessary expenses must have been
c. It does not fall within the definition of income. paid or incurred during the taxable year for it to be
deductible from gross income. Further, the
On the other hand, tax deductions are the amounts which deduction shall be taken for the taxable year in
the law allows to be subtracted from gross income in order which 'paid or accrued' or 'paid or incurred.'
to arrive at net income. Otherwise, the expenses are barred as deductions in
subsequent years. (CIR v. Isabela Cultural
Q: What are the exclusions under the Constitution? Corporation, G.R. No. 172231, February 12, 2007)

A: 2. Deductions must be supported by adequate receipts
1. Income derived by the Government or its political or invoices.
subdivision is exempt from gross income, if the source 3. The withholding and payment of tax required must
of the income is from any public utility or from the be shown.
exercise of any essential governmental functions.
2. All revenues and assets of non-stock, non-profit Any income payment which is otherwise deductible shall be
educational institutions used actually, directly, and allowed as a deduction from gross income only if it is shown
exclusively for educational purposes shall be exempt that the income tax required to be withheld has been paid
from taxes and duties. (Article XIV, Sec. 4(3), 1987 to the BIR. (Sec. 2.58.5, RR No. 2-98)
Constitution)
Q: Distinguish: itemized deductions and optional
Q: What are the requisites for the exclusion of prizes standard deduction
and awards in sports competition from gross income?
ITEMIZED OPTIONAL
A: DEDUCTIONS STANDARD
1. All Prizes and awards; DEDUCTIONS
2. Granted to Athletes; Definitio Under the itemized In lieu of the itemized
3. In local and international sports Tournaments and n deductions, deductions, regular
competitions; and taxpayers list every or special, including
4. Sanctioned by their national sports associations. (Sec. item of business NOLCO. The
32(B)(7)(d), NIRC) expense they claim deduction is merely
as deductions. presumed as a fixed
Q: Mr. A, a citizen and resident of the Philippines, is a Deductions are percentage of gross
professional boxer. In a professional boxing match held strictly construed income for
in 2013, he won prize money in United States (US) against the corporations and
dollars equivalent to ₱300,000,000. taxpayer. gross sales or gross
receipts for
a. Is the prize money paid to and received by Mr. A in individuals.
the US taxable in the Philippines? Why? Deductio Deductible items Individuals:
b. May Mr. A's prize money qualify as an exclusion n allowed by the law 40% of total sales/
from his gross income? Why? (2015 Bar) revenues/ receipts/
fees
A: Corporations: 40%
a. YES. Under the NIRC, the income within and without of gross income
of a resident citizen is taxable. Since Mr. A is a resident Who may All taxpayers All taxpayers who are
Filipino citizen, his income worldwide is taxable in the avail? except those subject to tax on
Philippines. subject to tax on taxable net income
gross income (RC, NRC, RA, NRA-
b. NO. Under the law, all prizes and awards granted to (NRA-NETB & ETB, DC, RFC) can
athletes in local and international sports competitions NRFC). claim deductions
whether held in the Philippines or abroad and except the
sanctioned by their national sports association are following:
excluded from gross income. However, in this case, 1. NRA-ETB
there is no showing that the boxing match was 2. Taxpayers
sanctioned by the Philippine National Sports mandate to use
Commission. Therefore, the prize money is not itemized
excluded, and it would be considered as the taxpayer’s deductions
taxable and professional income. Substanti It must be It requires no proof of
ation of substantiated by expenses incurred.
DEDUCTIONS claim receipts.
(Banggawan, 2019)

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Q: What are the requirements for deductible items performed with relation to the business of the particular
taxpayer; and
A: 4. Must be subjected to withholding tax.
1. There must be specific provision of law allowing the
deductions, since deductions do not exist by Q: How is interest as a deduction from gross income
implication. defined? (1992 Bar)
2. The requirements of deductibility must be met.
3. There must be proof of entitlement to the deductions. A: Interest shall refer to the payment for the use or
The burden of proof to establish the validity of claimed forbearance or detention of money, regardless of the name
deduction is on the taxpayer. This is consistent with it is called or denominated. It includes the amount paid for
the rule that tax exemptions must be strictly construed the borrower’s use of money during the term of the loan, as
against the taxpayer and liberally in favor of the State. well as for his detention of money after the due date for its
4. The deductions must not have been waived. repayment (Sec. 2(a), RR No. 13-2000)
5. The withholding and payment of tax required must be
shown. (Domondon, 2013) Q: What is Optional Standard Deduction?
6. Expenses which are ordinary and necessary for the
conduct of trade or business, or profession. A: It is a fixed percentage deduction which is allowed to
7. It must be a legitimate and legal expenditure. certain taxpayers without regard to an expenditure. This is
8. As a general rule, there is no limitation as to the in lieu of the itemized deduction.
amount of expense, however, it must be reasonable.
The optional standard deduction is an amount not
NOTE: The premium is not deductible because it is not an exceeding:
ordinary business expense. The term "ordinary" is used in 1. 40% of the gross sales or gross receipts of a qualified
the income tax law in its common significance and it has the individual taxpayer; or
connotation of being normal, usual or customary. (Deputy v. 2. 40% of the gross income of a qualified corporation. (Sec.
Du Pont, 308 US 488 (1940)) Paying premiums for the 34(L), NIRC)
insurance of a person not connected to the company is not
normal, usual or customary. Another reason for its non- NOTE: The following persons who may not avail of the OSD:
deductibility is the fact that it can be considered as an illegal 1. Non-resident aliens (NRA), whether or not engaged in
compensation made to a government employee. This is so trade or business in the Philippines; and
because if the insured, his estate or heirs were made as the 2. Non- resident foreign corporations (NRFC)
beneficiary (because of the requirement of insurable
interest), the payment of premium will constitute bribes Q: What are the items not deductible?
which are not allowed as deduction from gross income. (Sec.
34(A)(1)(c), NIRC) A: In computing net income, no deduction shall in any case
be allowed in respect to:
NOTE: Payments made in exchange for the revelation of a
competitor’s trade secrets is considered as an expense 1. Personal, living or family expenses;
which is against law, morals, good customs or public policy, 2. Any amount paid out for new buildings of for permanent
which is not deductible. (3M Philippines, Inc. v. CIR, G.R. No. improvements, or betterments made to increase the
82833, September 26, 1988) value of any property or estate;
3. Any amount expended in restoring property or in
Also, the law will not allow the deduction of bribes, making good the exhaustion thereof for which an
kickbacks and other similar payments. Applying the allowance is or has been made (major repairs);
principle of ejusdem generis, payment made by Freezy 4. Premiums paid on any life insurance policy covering the
Corporation would fall under “other similar payments” life of any officer or employee, or of any person
which are not allowed as deduction from gross income. financially interested in any trade or business carried on
(Section 34(A)(1)(c), NIRC) by the taxpayer, individual, or corporate, when the
taxpayer is directly or indirectly a beneficiary under
Q: What are the requisites for deductibility of bonus? such policy (Sec. 36(A), NIRC);
(2006 Bar) 5. Interest expense, bad debts, and losses from sales of
property between related parties;
A: 6. Bribes, kickbacks, and other similar payments; and
1. The payment of the bonus is made in good faith for 7. Items where the requisites for deductibility are not
additional compensation; met.
2. It must be for personal services actually rendered;
3. The bonus when added to salaries is “reasonable” when
measured by the amount and quality of the services


2021 GOLDEN NOTES 2021 & 2022
Taxation Law
INCOME TAX ON INDIVIDUALS

General Principles and Applicable Tax Rates

INCOME DERIVED FROM GROSS OR NET RATE
SOURCES
INDIVIDUAL TAXPAYER IS A:
Within the Outside the Gross Income Taxation (GIT)
Philippines Philippines or Net Income Taxation (NIT)
Employee: NIT

Businessman: NIT or GIT, if he
availed of the OSD

Self-employed: NIT or 8% tax on
gross sales or receipts and non-
RC ✓ ✓ operating income in excess of 0-35%
₱250,000

NOTE: Gross sales or gross
receipts and other non-operating
income do not exceed the VAT
Threshold (₱3M)
NRC ✓ X NIT 0-35%
OCW/Seaman ✓ X NIT 0-35%
Employee: GIT
RA ✓ X 0-35%
Businessman: GIT
NIT
NRA-EBT ✓ X 0-35%
GIT
NRA-NEBT ✓ X 25%
Special Alien ✓ X GIT 25%

Estate Under Judicial Settlement ✓ ✓ NIT 0-35%
Irrevocable Trust ✓ ✓ NIT 0-35%
Co-owners ✓ ✓ NIT 0-35%

Q: What is the rule on Taxation on compensation Q: What are the rules regarding taxation of business
income? income/income from practice of profession?

A: Compensation income includes all remuneration for A:
services rendered by an employee for his employer unless Purely Self-Employed and/or Professionals
specifically excluded under the NIRC. (Sec. 2.78.1, RR No. 2- a. Self-employed individuals and/or professionals with
1998) The test is whether such income is received by virtue gross sales/gross receipts and other non-operating
of an employer-employee relationship. income NOT more than ₱3M – shall have the option to
avail of:
Q: What are excluded from compensation income i. Schedular tax rate (Sec. 24(A)(2)(a) of the NIRC);
subject to tax? or
ii. 8% of the gross sales/gross receipts and other
A: non-operating income in excess of ₱250,000
1. Fringe benefit subject to tax (No. 22, RMC No. 50-2018)
2. De minimis benefit b. Self-employed individuals and/or professionals with
3. 13th month pay and other benefits and payments gross sales/gross receipts and other non-operating
specifically excluded from taxable compensation income more than ₱3M – Schedular tax rate (Sec.
income 24(A)(2)(a), NIRC) only

NOTE: Only managerial or supervisory employees are Mixed Income Earners
entitled to a fringe benefit subject to the FBT. (Sec. 3, Sec. 33, a. All income from compensation – schedular tax rate
NIRC) (Sec. 24(A)(2)(a), NIRC)
b. All income from business or practice of profession

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
i. If gross sales and/or gross receipts and other Q: State the Outline of Taxes imposed on Domestic
non-operating income does not exceed ₱3M – Corporation.
Shall have the option to avail of:
• Schedular tax rate (Sec. 24(A)(2)(a), NIRC); A:
or 1. Normal corporate income tax (NCIT)
• 8% of the gross sales/gross receipts and - 30% of taxable income from all sources within and
other non-operating income NOTE: without the Philippines
₱250,000 shall not be deducted. (No. 22, RMC 2. Minimum corporate income tax (MCIT)
No. 50-2018) - 2% of gross income, if MCIT applies
ii. If gross sales and/or gross receipts and other 3. Gross income tax (Optional corporate income tax)
non-operating income exceeds ₱3M – schedular - 15% of gross income, if qualified
tax rate (Sec. 24(A)(2)(a), NIRC) 4. Improperly Accumulated Earnings Tax
- 10% of improperly accumulated earnings
Q: What is the tax treatment of partners in a general 5. Final tax on passive income
professional partnership?
Q: What is the nature of MCIT?
A: A general professional partnership (GPP) shall not be
subject to the income tax. Persons engaging in business as A: The MCIT is equal to 2% of the gross income of the
partners in a GPP shall be liable for income tax only in their corporation at the end of the taxable quarter, except income
separate and individual capacities. from income tax and income subject to final withholding
tax.
Special Rule on GPPs and the choice of deductions
Being a minimum income tax, a corporation should pay the
In computing a GPP’s distributable taxable income, the GPP MCIT whenever its normal corporate income tax (NCIT) is
may avail of the following deductions: lower than the MCIT, or when the firm reports a net loss in
a. Itemized expenses; or its tax return. Conversely, the NCIT is paid when it is higher
b. 40% optional standard deduction. than the MCIT. (Dimaampao, 2015)

Q: What is the tax treatment of the income derived by Q: What is the purpose of MCIT? (2001 Bar)
non-resident aliens engaged in trade or business?
A: The imposition of the MCIT is designed to forestall the
A: Non-Resident Aliens Engaged in Trade or Business are prevailing practice of corporations of over claiming
taxed on their income derived from all sources within the deductions in order to reduce their income tax payments.
Philippines in the same manner as an individual citizen or a
resident alien individual, subject to the schedule rate of 0- Q: What is the Coverage of the MCIT? (2001 Bar)
35%, subject to the rule of reciprocity.
A: The MCIT covers domestic and resident foreign
Q: What is the tax treatment of the income derived by corporations which are subject to the 30% normal
non-resident aliens not engaged in trade or business ? corporate income tax; hence, corporations which are
subject to special corporate taxes do not fall within the
A: Non-Resident Aliens Not Engaged in Trade or Business coverage of the MCIT.
are taxed on their income received from all sources within
the Philippines as interest, cash, and/or property dividends, Q: When shall the MCIT commence to be imposed on a
rents, salaries, wages, premiums, annuities, compensation, corporation?
remuneration, emoluments, or other fixed or determinable
annual or periodic or casual gains, profits, and income, and A: The MCIT is imposed beginning on the fourth taxable
capital gains, a tax equal to twenty-five percent (25%) of year immediately following the year in which the
such income. corporation commenced its business operations. For
purposes of the MCIT, the taxable year in which business
Q: What is the tax treatment of the income derived by operations commenced shall be the year in which the
Aliens employed by regional headquarters, regional domestic corporation registered with the BIR, regardless of
operating headquarters, offshore banking units, and whether the corporation is using the calendar year or fiscal
petroleum service contractors? year.

A: According to RR No. 8-2010 issued by the BIR, Q: KKK Corp. secured its Certificate of Incorporation
preferential income tax rate under subsection (C), (D) and from the Securities and Exchange Commission on June
(E) of Section 25 of the Tax Code shall no longer be 3, 2013. It commenced business operations on August
applicable to special aliens (like those employed by regional 12, 2013. In April 2014, Ms. J, an employee of KKK Corp.
headquarters, regional operating headquarters, offshore in charge of preparing the annual income tax return of
banking units, and petroleum service contractors), without the corporation for 2013, got confused on whether she
prejudice to preferential tax rates under existing tax should prepare payment for the regular corporate
treaties. As such, these special aliens are now subject to income tax or the minimum corporate income tax.
regular income tax rate. (RR. No. 8-2018)
a. As Ms. J's supervisor, what will be your advice?
b. What are the distinctions between regular
INCOME TAX ON CORPORATIONS
corporate income tax and minimum corporate
income tax? (2015 Bar)

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
thereof. (Sec.
A: 27(B), NIRC)
a. As Ms. J’s supervisor, I will advise that KKK Corp. should
prepare payment for the regular corporate income tax Q: De La Salle University leases out a portion of its
and not the minimum corporate income tax (MCIT) property to private concessionaires, i.e., commercial
Under the NIRC, MCIT is only applicable beginning the canteens and bookstores. The lease payments were
4th taxable year following the commencement of factually proven to be used for educational purposes.
business operation. (Sec. 27(E)(1), NIRC)
a. Is the land owned by De La Salle University subject
b. The distinctions between regular corporate income tax to real property tax?
and the minimum corporate income tax are the b. Are the lease payments received by De La Salle
following: University subject to income tax?
c. Are the lease payments received by De La Salle
i. As to taxpayer: Regular corporate income tax University subject to VAT? (2016 Bar)
applies to all corporate taxpayers while minimum
corporate income tax applies to domestic A:
corporations and resident foreign corporations. a. YES. The leased portion of the building may be subject
ii. As to tax rate: Regular corporate income tax is to real property tax. The test of exemption from
30% while minimum corporate income tax is 2%. taxation is the use of the property for purposes
iii. As to tax base: Regular corporate income tax is mentioned in the Constitution. The lease of a portion
based on the net taxable income while minimum of a school building for commercial purposes, removes
corporate income tax is based on gross income. such asset from the property tax exemption granted
iv. As to period of applicability: Regular corporate under the Constitution. There is no exemption
income tax is applicable once the corporation because the asset is not used actually, directly and
commenced its business operation, while exclusively for educational purposes. The commercial
minimum corporate income tax is applicable use of the property is also not incidental to and
beginning on the 4th taxable year following the reasonably necessary for the accomplishment of the
commencement of business operations. main purpose of a university, which is to educate its
v. As to imposition: The minimum corporate income students. (Abra Valley College, Inc. v. Aquino, 245 Phil.
tax is imposed whenever it is greater than the 83; 162 SCRA 106 (1988), cited in CIR vs. De La Salle
regular corporate income tax o the corporation. University, Inc., G.R. No. 196596, November 9, 2016)
(Sec. 27 (A) and (E), NIRC; RR No. 998)
b. &c.
Q: What is Improperly accumulated earnings tax? NO. If the university actually, directly and exclusively
uses for educational purposes the revenues earned
A: Domestic corporations as defined under the Tax Code from the lease of its school building, such revenues
and which are classified as closely-held corporations are shall be exempt from taxes and duties. The tax
subject to 10% improperly accumulated earnings tax on exemption no longer hinges on the use of the asset
their improperly accumulated earnings. (Sec. 29(A), NIRC) from which the revenues were earned, but on the
actual, direct and exclusive use of the revenues for
Q: What is the tax treatment on Proprietary Non-Profit educational purposes. To avail of the exemption, the
Educational Institutions and Non-Profit Hospitals? taxpayer must factually prove that it used actually,
directly and exclusively for educational purposes the
30% 10% Exempt revenues or income sought to be exempted.
Private, non- Private, non- Organized and
profit hospitals profit hospitals operated In sum, the crucial point of inquiry then is on the use of the
and proprietary and proprietary exclusively for assets or on the use of the revenues. These are two things
educational educational charitable that must be viewed and treated separately. (CIR vs. De La
institutions institutions purposes, and no Salle University, Inc., G.R. No. 196596, November 9, 2016)
whose gross whose gross part of its net
income from income from income or asset Q: Under Art. XIV, Sec. 4(3) of the 1987 Constitution, all
unrelated trade, unrelated trade, shall belong to or revenues and assets of non-stock, non-profit
business or business or inure to the educational institutions, used actually, directly, and
other activity other activity benefit of any exclusively for educational purposes, are exempt from
exceeds 50% of does not exceed member, taxes and duties. Are incomes derived from
total gross 50% of total organizer, officer dormitories, canteens and bookstores as well as
income from all gross income or any specific interest income on bank deposits and yields from
sources. from all sources. purpose. deposit substitutes automatically exempt from
taxation? (2000 Bar)
Hospitals and
educational A: NO. The interest income on bank deposits and yields
institutions from deposit substitutes are not automatically exempt
claiming to be from taxation. There must be a showing that the incomes
proprietary non- are used actually, directly, and exclusively for educational
profit but do not purposes.
meet the
definition

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
The income derived from dormitories, canteens, and Q: What is the rule on International carriers?
bookstores are not also automatically exempt from
taxation. There is still a requirement for evidence to show A: An international carrier refers to foreign airline
actual, direct and exclusive use for educational purposes. corporation doing business in the Philippines which has
landing rights in any Philippine port to perform
Q: What is the tax treatment of the income derived by a international air transportation services or flight
proprietary non-profit educational institutions and operations anywhere in the world.
proprietary non-profit hospitals?
They shall be taxed at 2.5% on their Gross Philippine
A: Section 27(b) of the NIRC did not remove the exemption Billings (GPB) unless it is subject to preferential rate or
from income tax of proprietary non-profit hospitals as exempt from tax on the basis of applicable tax
charitable institutions. The provision merely introduced treaty/international agreement to which the Philippines is
the preferential income tax rate of 10% for proprietary non- a signatory or on the basis of reciprocity, such that an
profit educational institutions and proprietary non-profit international carrier, whose home country grants income
hospitals. (CIR v. St. Luke’s Medical Center, G.R. No. 195909, tax exemption to Philippine carries, shall likewise be
September 26, 2012) exempt from income tax imposed under the NIRC.

Q: UP Los Banos, a government education institution, Q: What is Gross Philippine Billings? (2005 Bar)
requested for a confirmation for its tax exemption
under Section 30(l) of the Tax Code. Is UP Los Banos A: It refers to the amount of gross revenue realized from
exempt from income tax? carriage of persons, excess baggage, cargo and mail
originating from the Philippines in a continuous and
A: YES. Pursuant to Section 30(l) of the Tax Code, in uninterrupted flight, irrespective of the place of sale or
relation to Article XIV of the 1987 Philippine Constitution, issue and the place of payment of the ticket or passage
Government education institutions are exempt from tax on document. (Dimampao, 2015)
income used actually, directly and exclusively for
educational purposes. Q: What is the tax treatment of Foreign Currency
Deposit Units?
Q: What is the rule on taxation of Resident Foreign
Corporations? A: Income derived by a depository bank under the
expanded foreign currency deposit system from foreign
A: The general rule is that RFC shall be liable for a 30% currency transactions with local commercial banks,
income tax on their income from within the Philippines, including branches of foreign banks that may be authorized
except for: by the BSP to transact business with foreign currency
depository system units and other depository banks under
1. Resident foreign corporations that are international the expanded foreign currency deposit system, including
carriers which shall be taxed at 2 ½% on their Gross interest income from foreign currency loans granted by
Philippine Billings. (Sec 28(A)(3), NIRC) such depository banks under said expanded foreign
currency deposit system to residents, shall be subject to a
2. Income derived by offshore banking units final income tax at the rate of ten percent (10%) of such
authorized by the BSP, from foreign currency income.
transactions with non-residents, other offshore
banking units, local commercial banks, including Q: What is the rule on taxation of non-resident foreign
branches of foreign banks that may be authorized by corporations (NRFC)?
the BSP to transact business with offshore banking
units shall be exempt from all taxes except net A: A foreign corporation not engaged in trade or business in
income from such transactions as may be specified by the Philippines shall pay a tax equal to 30% of the gross
the Secretary of Finance, upon recommendation of the income during such taxable year from all sources within the
Monetary Board which shall be subject to the regular Philippines except capital gains from sale of shares of stock
income. Provided, however, that any interest income not traded in the stock exchange. (Sec. 28(B)(1), NIRC)
derived from foreign currency loans granted to
residents other than offshore banking units or local Q: A, B, and C, all lawyers, formed a partnership called
commercial banks, including local branches of foreign ABC Law Firm so that they can practice their profession
banks that may be authorized by the BSP to transact as lawyers. For the year 2012, ABC Law Firm received
business with offshore banking units, shall be subject earnings and paid expenses, among which are as
only to a final tax at the rate of ten percent. (10%). follows:
(Sec. 28 (A)(4), NIRC)
Earnings:
3. Regional or area headquarters (Sec. 22(DD), NIRC) Professional/legal fees from various clients;
shall not be subject to income tax. (Sec. 28(A)(6), Cash prize received from a religious society in
NIRC) recognition of the exemplary service of ABC Law Firm;
and
4. Regional operating headquarters as defined in Gains derived from sale of excess computers and
Section 22(EE) shall pay a tax of ten percent (10%) laptops.
of their taxable income. (Sec. 28(A)(6), NIRC)
Payments:
Salaries of office staff;

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Rentals for office space; and on his income from sources outside the
Representation expenses incurred in meetings with Philippines.
clients. b. Resident alien on income derived from sources
within the Philippines.
1. What are the items in the above-mentioned c. Resident citizen earning purely compensation
earnings which should be included in the income from two employers within the
computation of ABC Law Firm’s gross income? Philippines, whose income taxes have been
Explain. correctly withheld.
2. What are the items in the above-mentioned d. Resident citizen who falls under the
payments which may be considered as deductions classification of minimum wage earners.
from the gross income of ABC Law Firm? Explain. e. An individual whose sole income has been
3. If ABC Law Firm earns net income in 2012, what, if subjected to final withholding tax. (2015 Bar)
any, is the tax consequence on the part of ABC Law
Firm insofar as the payment of income tax is A:
concerned? What, if any, is the tax consequence on a. Not required. The income of a non-resident Filipino
the part of A, B, and C as individual partners, citizen is taxable only on income sourced within the
insofar as the payment of income tax is concerned? Philippines. Accordingly, his income from sources
(2014 Bar) outside the Philippines is exempt from income tax. (Sec.
51(A)(1)(b), NIRC)
A:
1. The three (3) items of earnings should be included in b. Required. A resident alien is taxable only on income
the computation of ABC Law Firm’s gross income. The derived from sources within the Philippines. (Sec.
professional or legal fees from various clients are 51(A)(1)(c), NIRC)
included as part of gross income being in the nature of
compensation for services. (Section 32(A)(1), NIRC). c. Required. A resident citizen who is earning purely
The cash prize from a religious society in recognition compensation income from two employers should file
of its exemplary services is also included there being income tax return. If the compensation income is
no law providing for its exclusion. This is not a prize in received concurrently from two employers during
recognition of any of the achievements enumerated the taxable year, the employee is not qualified for
under the law hence, should form part of gross income. substituted filing.
(Section 32(B)(7)(c), NIRC) The gains from sale of
excess computers and laptops should also be included d. Not required. Under the law, all minimum wage earners
as part of the firm’s gross income because the term in the private and public sector shall be exempt from
gross income specifically includes gains derived from payment of income tax. (Sec. 51(A)(2)(d), NIRC in
dealings in property. (Section 32(A)(3), NIRC) relation to R.A. No. 9504)

2. The law firm being formed as general professional e. Not required. Under the law, an individual whose sole
partnership is entitled to the same deductions allowed income has been subjected of final withholding tax
to corporation. (Section 26, NIRC) Hence, the three (3) pursuant to Sec. 57(A), NIRC, need not file a return. What
items of deductions mentioned in the problem are all he received is a tax paid income. (Sec. 51(A)(2)(c), NIRC)
deductible, they being in the nature of ordinary and
necessary expenses incurred in the practice of DONOR’S TAX
profession. (Section 34(A), NIRC) However, the amount
deductible for representation expenses incurred by a Q: What is Donor’s Tax?
taxpayer engaged in sale of services, including a law
firm, is subject to a ceiling of 1% of net revenue. (RR A: Donor’s tax is an excise tax imposed on the privilege of
No. 10-2002) transferring property by way of a gift inter vivos based on
pure act of liberality without any or less than adequate
3. The net income having been earned by the law firm consideration and without any legal compulsion to give.
which is formed and qualifies as a general professional
partnership, is not subject to income tax because the Transfers which may be considered as donation
earner is devoid of any income tax personality. Each
partner shall report as gross income his distributive 1. Sale/exchange/transfer of property for insufficient
shares, actuality or constructively received, in the net consideration;
income of the partnership. The partnership is merely
treated for income tax purposes as a pass-through GR: Where a property is transferred for less than adequate
entity so that its net income is not taxable at the level and full consideration in money or money’s worth, the
of the partnership bur said net income should be amount by which the FMV exceeds the consideration shall
attributed to the partners, whether or not distributed be deemed a gift and be included in computing the amount
to them, and they are liable to pay the income tax based of gifts made during the calendar year. It is as if the property
on their respective taxable income as individual was donated but in order to avoid paying donor’s tax, the
taxpayers. (Section 26, NIRC) donor opted to transfer the property for inadequate
consideration.
Q: Indicate whether each of the following individuals is
required or not required to file an income tax return: XPN:
a. Where the sale, exchange, or transfer is made in the
a. Filipino citizen residing outside the Philippines ordinary course of business which is:

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
i. Bona fide; The fair market value of the property given at the time of
ii. Made at arm’s length; the gift shall be the value of the gross gift.
iii. Free from any donative intent
b. Where property transferred is real property located in 2. Real property
the Philippines considered as capital asset, the
transfer is not subject to donor’s tax but to a capital The fair market value as determined by the CIR (zonal
gains tax, which is a final income tax of 6% of the fair value) at the time of donation or the value fixed by the
market value or gross selling price, whichever is assessor (assessed value), whichever is higher. (Sec. 102)
higher, and therefore, there can be no instance where
the seller can avoid any tax by selling his capital assets If there is no zonal value, the taxable base is the fair market
below its FMV. value that appears in the latest tax declaration. If there is an
improvement, the value of the improvement is the
2. Condonation/remission of debt; and construction cost per building permit and or occupancy
permit plus 10% per year after year of construction, or the
If the creditor condones the indebtedness of the debtor, the market value per latest tax declaration.
following rules apply:
a. On account of debtor’s services to the creditor the Q: What gifts are exempted from donor’s tax?
same is in taxable income to the debtor; or
b. If no services were rendered but the creditor simply A:
condones the debt, it is taxable gift and not a taxable 1. Donation for political campaign purposes (Sec. 99(C),
income. NIRC)
2. Certain gifts made by residents (Sec. 101(A), NIRC)
3. Renunciation of inheritance; exception 3. Certain gifts made by non-resident aliens (Sec. 101(B),
NIRC)
a. Renunciation by the surviving spouse of his/her share 4. Donation of intangibles subject to reciprocity (Sec. 104,
in the conjugal partnership or absolute community NIRC)
after the dissolution of the marriage in favor of the 5. Donation for athlete’s prizes and awards (R.A. 7549)
heirs of the deceased spouse or any other person/s is 6. Donation under the “Adopt-a-School Program” (R.A.
subject to donor’s tax. 8525)
b. General renunciation by an heir, including the 7. Exemption under other special laws
surviving spouse, of his/her share in the hereditary
estate left by the decedent is not subject to donor’s Tax credit for donor’s taxes paid to a foreign country
tax, unless specifically and categorically done in favor
of identified heir/s to the exclusion or disadvantage of The donor’s tax imposed by the NIRC upon a donor who was
the other co-heirs in the hereditary estate. (RR. No. 12 a citizen or a resident at the time of donation shall be
– 2018) credited with the amount of any donor’s taxes of any
character and description imposed by the authority of a
Determination of gross gift foreign country.

GROSS GIFT NET GIFT Q: Who may avail?
All property, real or The net economic benefit
personal, tangible or from the transfer that A: Only donors who are citizens or residents at the time of
intangible, that was given by accrues to the donee. the donation are entitled to claim tax credit.
the donor to the donee by
way of gift, without the NOTE: Limitations in donor’s tax credit follows the
benefit of any deduction. principles of limitations in estate tax credit.
(Sec. 104, NIRC)
Filing of return and payment
Q: What is the composition of gross gift?
Q: Who are liable to pay donor’s tax?
DONOR GROSS GIFT
RC, NRC, RA, All real properties, tangible and A: Any person making a donation is required to file donor’s
DC intangible personal properties wherever tax return unless the donation is specifically exempted
located under NIRC or other special laws. He is required for every
NRA, FC All real properties, tangible, and donation to accomplish under oath a donor’s tax return in
intangible properties located in the duplicate (Sec. 98, NIRC)
Philippines unless the reciprocity applies
Q: What is the rate of donor’s tax?
NOTE: A corporation, domestic (DC) or foreign (FC), cannot
be made liable to pay estate tax, but may be liable to pay A: R.A. No. 10963, otherwise known as the TRAIN Law has
donor’s tax. simplified the donor’s tax schedule from an eight-bracket
schedule with rates ranging from 2% to 15% to a single
Q: What is the valuation of gifts made in property? fixed rate of 6% of total gifts in excess of P250,000. It
removed the distinction between relatives and strangers in
A: terms of the imposition of donor’s tax, meaning regardless
1. Personal property of whether it is a relative or stranger, it will be subject to the
fixed rate of 6%.

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Taxation Law
Q: When is the filing of donor’s tax return? Q: Who are the persons liable to value-added tax?

A: Donor’s tax return is filed within 30 days after the date A:
the donation or gift is made. 1. Sells, barters, or exchanges goods or properties in the
course of trade or business;
VALUE-ADDED TAX 2. Sells services in the course of trade or business; or
3. Imports goods, whether or not in the course of trade
Q: What is Value Added Tax? or business. (Ingles, 2018)

A: Value Added Tax (VAT) is a business tax imposed and GR: The seller is the one statutorily liable for the payment
collected on every (a) sale, barter, or exchange of goods of the tax but the amount of the tax may be shifted or passed
or properties (real or personal), (b) lease of goods or on to the buyer, transferee or lessee of goods, properties or
properties (real or personal) or (c) rendition of services, services.
all in the course of trade or business, and (d) importation
of goods (whether or not in the course of trade or XPN: In case of importation, the importer is the one liable
business). (Sec. 105, NIRC) for VAT. (Sec. 107, NIRC)

Q: Can VAT be passed on to a buyer, transferee or Q: State the rule on imposition of value-added tax on
lessee? sale of goods or properties.

A: YES. VAT is an indirect tax, thus, it can be shifted or A:
passed on to the buyer, transferee or lessee of goods, 1. Those held for sale to customers in the ordinary
properties or services. (Sec. 105, NIRC) course of trade or business;
2. Those held for lease in the ordinary course of trade or
Q: What is the difference between VAT and Withholding business; and
Tax? 3. Those used in the trade or business of the seller (as it
is incidental to the taxpayer’s main business). (RR No.
A: To distinguish, in indirect taxes, the incidence of taxation 4–2007)
falls on one person but the burden thereof can be shifted or
passed on to another person. On the other hand, in Output tax shall be recognized by the seller and input tax
withholding taxes, the incidence and burden of taxation fall shall accrue to the buyer at the time of the execution of the
on the same entity, the statutory taxpayer. The burden of instrument of sale (at the time of consummation of sale)
taxation is not shifted to the withholding agent who merely Payments that are subsequent to “initial payments” shall no
collects, by withholding, the tax due from income payments longer be subject to output VAT. (RR No. 4–2007)
to entities arising from certain transactions and remits the
same to the government (Asia International Auctioneers, Q: What is output VAT?
Inc., v. CIR, G.R. No. 179115, September 26, 2012)
A: It is the value-added tax due on the sale or lease of
Q: Define Destination Principle and Cross-Border taxable goods or properties or services by (1) any person
Principle. registered or (2) required to register under Sec. 236 of the
NIRC. (Sec. 110(A)(3), NIRC)
A: The destination of the goods determines taxation or
exemption from tax. Export sales of goods are subject to Output tax may come from:
zero percent (0%) rate while imports of goods are subject 1. Actual sale
to twelve percent (12%) value added tax. Exports are zero- 2. Transaction deemed sales
rated because the consumption of such goods will be made
outside of the Philippines, while imports of goods are Q: What is input VAT?
subject to 12% value added tax because they are for
consumption within the Philippines. (Mamalateo, 2014) A: It means the value-added tax due on or paid by a VAT-
registered person on importation of goods or local
Q: Is the destination principle absolute? purchase of goods, properties or services, including lease
or use of properties, in the course of his trade or business.
A: NO. The law clearly provides for an exemption to the It shall also include the transitional input tax and the
destination principle; that is, for a zero percent (0%) VAT presumptive input tax determined in accordance with
rate for services that are performed in the Philippines, paid Section 111 of the NIRC. (Sec. 110(A)(3), NIRC)
for in acceptable foreign currency and accounted for in
accordance with the rules of BSP. (Sec. 108(B)(2) as cited in Input VAT or input tax represents the actual payments,
Commissioner of Internal Revenue v. American Express costs, and expenses incurred by a VAT-registered taxpayer
International, Inc., G.R. No. 152609, June 29, 2005) in connection with his purchase of goods and services. On
the other hand, when that person or entity sells his/its
Consistent with the destination principle, the purchases of products or services, the VAT-registered taxpayer generally
goods and services destined for consumption within an becomes liable for 10% (now 12%) of the selling price as
ECOZONE should be free of VAT; hence, no input VAT Output VAT or output tax. (CIR v. Benguet Corporation, G.R.
should then be paid on such purchases. With no input VAT No. 145559, July 14,2006)
paid, there is nothing to be refunded or credited under Sec.
112 of the NIRC. (Coral Bay Nickel Corp. v. CIR, G.R No. Q: Define “In the course of trade or business”.
190506, June 13, 2016)

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
A: The phrase “in the course of trade or business” means the A: The term “effectively zero-rated sale of goods and
regular conduct or pursuit of a commercial or an economic properties” shall refer to the local sale of goods and
activity, including transactions incidental thereto, by any properties by a VAT-registered person to a person or entity
person, regardless of whether or not the person engaged who was granted indirect tax exemption under special laws
therein is a non-stock, non-profit private organization or international agreement. Since the buyer is exempt from
(irrespective of the disposition of its net income and indirect tax, the seller cannot pass on the VAT and therefore,
whether or not it sells exclusively to members or their the exemption enjoyed by the buyer shall extend to the
guests) or government entity. (Sec. 105(par.3), NIRC) seller, making the sale effectively zero-rated. (R.M.C. 50-
2007)
XPNs to regularity:
1. Non-resident aliens who perform services in the Q: Distinguish Exempt Party and Exempt Transaction
Philippines are deemed to be making sales in the
course of trade or business, even if the performance of EXEMPT PARTY EXEMPT TRANSACTION
services is not regular. (Sec. 4.105-3, RR No. 16 – 2005) A person or entity granted Involves goods or services
2. Importations are subject to VAT whether in the course VAT exemption under the which, by their nature are
of trade or business or not. NIRC, special law or specifically listed in and
international agreement to expressly exempted from
Q: The Solicitor General, counsel for BIR, claims that which RP is a signatory, the VAT under the NIRC,
association dues, membership fees, and other and by virtue of which its without regard to the tax
assessment/charges collected by a condominium taxable transactions status of the parties in the
corporation are subject to VAT since they constitute become exempt from the transactions.
income payments or compensation for the beneficial VAT.
services it provides to its members and tenants. On the Such party is not subject to Transaction is not subject
other hand, the lawyer of the condominium the VAT, but may be to VAT, but the seller is not
corporations argues that such dues and fees are merely allowed a tax refund or allowed any tax refund or
held in trust by the condominium corporations credit of input tax paid, credit for any input taxes
exclusively for their members and used solely for depending on its paid.
administrative expenses in implementing the registration as a VAT or
condominium corporations’ purposes. Accordingly, the non-VAT taxpayer.
condominium corporations, do not actually render
services for a fee subject to VAT. Whose argument is REMEDIES
correct? Decide. (2014 BAR)
JURISDICTION OF COURTS
A: The lawyer of the condominium corporations is correct.

The association dues, membership fees, and other
The CTA has jurisdiction over both civil and criminal
assessment/charges do not constitute income payments
aspects of a tax case. The concentration of tax cases in one
because they were collected for the benefit of the unit
court will enhance the disposition of these cases since it will
owners and the condominium corporation is not created as
take them out of the jurisdiction of regular courts which,
a business entity. The collection is the money of the unit
admittedly, do not have expertise in the field of taxation.
owners pooled together and will be spent exclusively for the
(Dimaampao, 2015)
purpose of maintaining and preserving the building and its

premises which they themselves own and possess. (First e-
Salient features of R.A. 9282 regarding appeals
Bank Tower Condominium Corp., v. BIR, Special Civil Action

No. 121236, RTC Br. 146, Makati City)
The decisions of the CTA are no longer appealable to the CA.

The decision of a division of the CTA may be appealed to the
When an affiliate provides funds to a taxpayer who then
CTA En Banc, which in turn may be appealed directly to the
uses the funds to pay a third party, the transaction is not
SC only on questions of law.
subject to VAT, as there was no sale, barter, or exchange

between the affiliate and the taxpayer. The money was
Q: Does the CTA have jurisdiction over a special civil
simply given as a dole-out. (CIR v. Sony Philippines, Inc., G.R.
action for certiorari assailing an interlocutory order
No. 178697, November 17, 2010)
issued by the RTC in a local tax case?

Q: Define zero-rated sale.
A: YES. Although there is no categorical statement under

R.A. 1125 as well as the amendatory R.A. 9282, which
A: Zero-rated sale by a VAT-registered person is a taxable
provides that the CTA has jurisdiction over petitions for
transaction for VAT purposes but the sale does not result in
certiorari assailing interlocutory orders issued by the RTC
any output tax. However, the input tax on the purchases of
in local tax cases filed before it, the prevailing doctrine is
goods, properties or services related to such zero-rated sale
that a court may issue a writ of certiorari in aid of its
shall be available as tax credit or refund.
appellate jurisdiction if said court has jurisdiction to review,

by appeal or writ of error, the final orders or decisions of
To be subject to zero tax-rate, however, the seller must be a
the lower court. (The City Of Manila v. Hon. Grecia-Cuerdo,
VAT-registered person because if he is not VAT registered,
G.R. No. 175723, February 4, 2014)
the transactions entered into by him are exempt from the

tax.
EXCLUSIVE ORIGINAL AND APPELLATE JURISDICTION

OVER CIVIL CASES
Q: Define Effectively Zero-Rated Transactions.


2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Cases within the jurisdiction of the Court En banc (Sec. cases originally decided by them within their
2, Rule 4, Revised Rules of CTA (RRCTA)) jurisdiction. (Sec. 3 Rule 4 RRCTA)
However, where the amount is less than P1 million,
The Court en banc shall exercise exclusive appellate it is the RTC or the MTC that has jurisdiction, as the
jurisdiction to review by appeal the following: (ARMoR) case may be, depending on the jurisdictional
amount.
1. Decisions or resolutions on motions for
reconsideration or new trial of the Court in Divisions in NOTE: Undisputed assessments are already final
the exercise of its exclusive appellate jurisdiction over: and collectible. The taxpayer failed to seasonably
(ALT) protest the assessment within a period of 30 days
a. Cases arising from administrative agencies – from receipt of the notice of assessment.
BIR, BOC, DoF, DTI, and DA;
b. Local tax cases decided by the RTC in the b. Refunds of internal revenue taxes, fees or other
exercise of their original jurisdiction; and charges and penalties imposed thereto;
c. Tax collection cases decided by the RTC in the
exercise of their original jurisdiction involving c. Other matters arising under NIRC or other laws
final and executory assessments for taxes, fees, administered by the BIR.
charges and penalties, where the principal
amount of taxes and penalties claimed is less Q: What does “other matters” under the NIRC or
than P1 million pesos; the TCCP mean?

2. Decisions, resolutions or orders of the RTC in cases A: The term “other matters” includes cases which
decided or resolved by them in the exercise of their can be considered within the scope of the function
appellate jurisdiction over: of the BIR and BOC by applying the ejusdem generis
a. Local tax cases; rule (that is, such cases should be of the same
b. Tax collection cases; nature as those that have preceded them).

3. Decisions, resolutions or orders on motions for In CIR v. Hambrecht & Quist Philippines, Inc. (G.R. No.
reconsideration or new trial of the Court in Division in 169225, November 17, 2010), the term “other
the exercise of its exclusive original jurisdiction over matters” is limited only by the qualifying phrase
tax collection cases; and that follows it. The appellate jurisdiction of the CTA
is not limited to cases which involve the decisions
4. Decisions of the Central Board of Assessment Appeals of the CIR on matters relating to assessments or
(CBAA) in the exercise of its appellate jurisdiction over refunds. It covers other cases that arise out of the
cases involving the assessment and taxation of real NIRC or related laws administered by the BIR. The
property originally decided by the provincial or city issue of whether or not the BIR’s right to collect
board of assessment appeals. (Sec. 2, Rule 4, RRCTA) taxes had already prescribed is a subject matter
falling under the NIRC. In connection therewith, the
NIRC also states that the collection of taxes is one
NOTE: Decisions, orders, and resolutions of the RTC in local
of the duties of the BIR. Thus, from the foregoing,
tax cases do not include real property tax which is an ad
the issue of prescription of the BIR’s right to collect
valorem tax. The jurisdiction of the CTA en banc involves
taxes may be considered as covered by the term
only those real property tax cases originally decided by the
“other matters” over which the CTA has appellate
CBAA in the exercise of its appellate jurisdiction under Sec.
jurisdiction.
7(a)(5) of R.A. 9282 and under R.A. 7160. (Habawel v. CTA,

G.R. No. 174759, September 7, 2011)
Q: BDO questions a BIR ruling subjecting

interest income from zero-coupon bonds
Cases within the jurisdiction of the Court in divisions
issued by the government to the 20% final
(Sec. 3, Rule 4, RRCTA)
withholding tax as they are deemed to be

deposit substitutes. BDO filed it to the CTA, not
I. Exclusive Appellate Jurisdiction (DIReCTORS2) (Sec.
with the Secretary of Finance. CIR contends that
3(a), Rule 4, RRCTA)
it violates the principle of exhaustion of

administrative remedies. Is BDO correct?
1. Decisions of the CIR in cases involving: (DRO)

A: YES. The jurisdiction to review the rulings of the
a. Disputed assessments;
CIR pertains to the CTA. The questioned BIR

Rulings were issued in connection with the
Q: Which court has jurisdiction over
implementation of the NIRC. Under Sec. 7 of R.A.
undisputed assessments?
No. 1125 as amended by R.A. No. 9282, the CTA

shall exercise exclusive appellate jurisdiction to
A: Being an action for the collection of sum of
review by appeal on the Decisions of the CIR in
money, the CTA has exclusive original jurisdiction
cases involving disputed assessments, refunds of
over undisputed assessments when the amount
internal revenue taxes, fees or other charges,
involved is P1 million or more; and appellate
penalties in relation thereto or other matters
jurisdiction over appeals from the judgments,
arising under the NIRC or other laws administered
resolutions, or orders of the RTC in tax collection
by the BIR. Section 11 is likewise worded as follows:
Any party adversely affected by a decision, ruling

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
or inaction of the CIR, the Commissioner of A: NO. The CTA has no power motu proprio to review tax
Customs, the Secretary of Finance, the Secretary of cases. It can resolve cases only if a civil action for collection
Trade and Industry or the Secretary of Agriculture of sum of money is filed before it in the exercise of its
or the Central Board of Assessment Appeals or the exclusive original jurisdiction, or a petition for review is
Regional Trial Courts may file an appeal with the filed in the exercise of its exclusive appellate jurisdiction. An
CTA within 30 days after the receipt of such information may be filed with the CTA directly where the
decision or ruling. (Banco de Oro v. Republic, G.R. principal amount of taxes and fees, exclusive of charges and
No. 198756, January 13, 2015) penalties, is P1 million or more.

2. Inaction by the CIR in cases involving: (DROw) Q: Does the CTA have jurisdiction to rule on validity of
a. Disputed assessments; a Rule or Regulation issued by an administrative
b. Refunds of internal revenue taxes, fees or other agency?
charges and penalties imposed thereto;
c. Other matters arising under NIRC or other laws A: NO. While the law confers on the CTA jurisdiction to
administered by the BIR, where the NIRC provides resolve tax disputes in general, this does not include cases
a specific period for action. where the constitutionality of a law or rule is challenged.
Where what is assailed is the validity or constitutionality of
NOTE: The inaction by the CIR within the 180-day a law, or a rule or regulation issued by the administrative
period under Sec. 228 of the NIRC is deemed a agency in the performance of its quasi-legislative function,
denial. the regular courts have jurisdiction to pass upon the same.
(British American Tobacco v. Camacho, G.R. No. 163583,
3. Decisions, Orders or Resolutions of the RTC in the August 20, 2008)
exercise of their original jurisdiction over local tax
cases and tax collection cases. NOTE: However, in the case of Banco de Oro vs. Republic of
4. Decisions of the Commissioner of Customs (COC) in the Philippines (G.R. No. 198756, August 16, 2016), the
cases involving: (DSFO) Supreme Court ruled that the Court of Tax Appeals has
a. Liability for customs duties, fees or other money undoubted jurisdiction to pass upon the constitutionality or
charges; validity of a tax law or regulation when raised by the
b. Seizure, detention or release of property affected; taxpayer as a defense in disputing or contesting an
c. Fines, forfeitures or other penalties in relation assessment or claiming a refund. It is only in the lawful
thereto; or exercise of its power to pass upon all maters brought before
d. Other matters arising under Customs Law or other it, as sanctioned by Section 7 of Republic Act No. 1125, as
laws administered by the BOC. amended.

5. Decisions of the Secretary of Finance on customs This Court, however, declares that the Court of Tax Appeals
cases elevated for automatic review from decisions may likewise take cognizance of cases directly challenging
of the COC which are adverse to the Government the constitutionality or validity of a tax law or regulation or
under Section 2315 of the TCCP (now Sec. 1128 of the administrative issuance (revenue orders, revenue
CMTA) memorandum circulars, rulings).

NOTE: The purpose and rationale of the automatic In other words, within the judicial system, the law intends
review in customs cases- the provision for automatic the Court of Tax Appeals to have exclusive jurisdiction to
review by the COC and the Secretary of Finance of resolve all tax problems. Petitions for writs of certiorari
unappealed seizure and protest cases was conceived to against the acts and omissions of the said quasi-judicial
protect the government against corrupt and conniving agencies should, thus, be filed before the Court of Tax
customs collectors. (Yaokasin v. COC, G.R. No. 84111, Appeals.
December 22, 1989)
Republic Act No. 9282, a special and later law than Batas
6. Decisions of the Secretary of Trade and Industry, in Pambansa Blg. 129 provides an exception to the original
the case of non-agricultural product, commodity or jurisdiction of the Regional Trial Courts over actions
article, and the Secretary of Agriculture in the case questioning the constitutionality or validity of tax laws or
of agricultural product, commodity or article, regulations. Except for local tax cases, actions directly
involving dumping and countervailing duties under challenging the constitutionality or validity of a tax law or
Sections 301 and 302, respectively of the TCCP, and regulation or administrative issuance may be filed directly
safeguard measures under R.A. 8800, where either before the Court of Tax Appeals.
party may appeal the decision to impose or not to
impose said duties. Furthermore, with respect to administrative issuances
(revenue orders, revenue memorandum circulars, or
NOTE: The SC held that the lower courts can acquire rulings), these are issued by the Commissioner under its
jurisdiction over a claim for collection of deficiency power to make rulings or opinions in connection with the
taxes only after the assessment made by the CIR has implementation of the provisions of internal revenue laws.
become final and appealable, not where there is still a Tax rulings, on the other hand, are official positions of the
pending CTA case. (Yabes v. Flojo, G.R. No. L-46954, July Bureau on inquiries of taxpayers who request clarification
20, 1982) on certain provisions of the National Internal Revenue
Code, other tax laws, or their implementing regulations.
Q: Does the CTA have the power to review tax cases Hence, the determination of the validity of these issuances
motu proprio? (1977 BAR) clearly falls within the exclusive appellate jurisdiction of the

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Court of Tax Appeals under Section 7(1) of Republic Act No. 3(c), Rule 4, RRCTA)
1125, as amended, subject to prior review by the Secretary
of Finance, as required under Republic Act No. 8424. (Banco 1. Original jurisdiction in tax collection cases
de Oro vs. Republic of the Philippines, G.R. No. 198756, August involving final and executory assessments for taxes,
16, 2016) fees, charges and penalties, where the principal
amount of taxes and fees, exclusive of charges and
Q: Disputing the assessment, PAGCOR appealed to the penalties, claimed is one million pesos or more.
Secretary of Justice, on the basis of Sections 66 and 67
of the Revised Administrative Code, which provides NOTE: Collection cases where the principal amount of
that “all disputes/claims and controversies, solely taxes and fees, exclusive of charges and penalties
between or among the departments, bureaus, offices, claimed is less than P1 million shall be tried by the
agencies and instrumentalities of the National proper MTC, MeTC, or RTC, depending on their
Government, including government -owned and - respective jurisdiction. The jurisdiction of the CTA in
controlled corporations, such as those arising from the these cases shall be appellate. (Sec. 7(b)(1), R.A. 1125,
interpretation and application of statues, contracts or as amended by RA. No. 9282)
agreements shall be administratively settled or
adjudicated by the Secretary of Justice as Attorney- 2. Appellate jurisdiction over appeals from the
General of the National Government and as ex officio judgments, resolutions or orders of the Regional Trial
legal adviser of all government- owned or -controlled Courts in tax collection cases originally decided by
corporations if involving only questions of law.” them within their respective territorial jurisdiction.

The CIR contends that the CTA has jurisdiction EXCLUSIVE ORIGINAL AND APPELLATE JURISDICTION
pursuant to Section 7(1) of R.A. No. 1125, which grants OVER CRIMINAL CASES
the CTA the exclusive appellate jurisdiction to review,
among others, the decisions of the Commissioner of I. C Exclusive original jurisdiction
Internal Revenue “in cases involving disputed
assessments, refunds of internal revenue taxes, fees or The CTA in Division have exclusive original jurisdiction
other charges, penalties imposed in relation thereto, or over all criminal offenses arising from violations of the
other matters arising under the NIRC or other law or NIRC or TCCP and other laws administered by the BIR or
part of law administered by the Bureau of Internal the BOC, where the principal amount of taxes and fees,
Revenue. exclusive of charges and penalties, claimed is P1 million
or more.
Is PAGCOR correct?
Regular courts shall have jurisdiction in offenses or
A: NO. Following the rule on statutory construction felonies where:
involving a general and a special law, then P.D. No. 242 1. The principal amount of taxes and fees, exclusive of
should not affect R.A. No. 1125. R.A. No. 1125, specifically charges and penalties claimed is less than ₱1
Section 7 thereof on the jurisdiction of the CTA, constitutes million; or
an exception to P.D. No. 242. Disputes, claims and 2. No specified amount is claimed.
controversies, falling under Section 7 of R.A. No. 1125, even
though solely among government offices, agencies, and The jurisdiction of the CTA in these cases shall be
instrumentalities, including GOCCs, remain in the exclusive appellate. (Sec. 7(b)(1), R.A. 1125, as amended)
appellate jurisdiction of the CTA. Such a construction
resolves the alleged inconsistency or conflict between the Inclusion of civil action in criminal action
two statutes. (CIR v. Secretary of Justice, G.R. No. 177387,
November 9, 2016, citing Philippine National Oil Company v. Despite any provision of law or the Rules of Court, the
Court of Appeals, G.R. Nos. 109976 and 112800, April 26, criminal action and the corresponding civil action for
2005) the recovery of the civil liability for taxes and penalties,
shall at all times be simultaneously instituted with, and
In CIR v. Secretary of Justice, to restate, as a general rule, all jointly determined in the proceeding before the CTA.
disputes/claims and controversies, solely between or The filing of the criminal action is deemed to
among the departments, bureaus, offices, agencies and necessarily carry with it the filing of civil action, and no
instrumentalities of the National Government, including right to reserve the filing of such civil action
GOCCs, such as those arising from the interpretation and separately from the criminal action will be
application of statues, contracts or agreements shall be recognized. (Sec. 7, R.A. 1125, as amended)
administratively settled or adjudicated by the Secretary of
Justice or the Solicitor General. (Secs. 66-68, Revised II. Exclusive appellate jurisdiction
Administrative Code)
CTA in Divisions
As an exception, when the disputes/claims and
controversies involve a tax assessment, even when the 1. Appeals from the Judgments, Resolutions or Orders of
parties to the dispute are departments, bureaus, offices, the RTC in their original jurisdiction in criminal
agencies and instrumentalities of the National Government, offenses arising from violations of the NIRC or TCCP
including GOCCs, the exclusive appellate jurisdiction and other laws administered by the BIR or BOC, where
remains with the CTA. (Sec. 7, R.A. 1125) the principal amount of taxes and fees, exclusive of
charges and penalties, claimed is less than ₱1 million
II. Exclusive jurisdiction over tax collections cases (Sec. or where there is no specified amount claimed; and

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
2. Criminal offenses over Petitions for Review of the GR: There must be a PAN issued by the BIR before issuing a
Judgments, Resolutions or Orders of the RTC in the Formal Letter of Demand (FLD)/Final Assessment Notice
exercise of their appellate jurisdiction over tax cases (FAN)
originally decided by the MeTC, MTC and MCTC. (Sec.
7(b)(2)(b), RA. No. 1125 as amended by RA. No. 9282) XPN: PAN is not required in the following instances:
1. When the finding for any deficiency tax is the result of
CTA en banc mathematical error in the computation of the tax
appearing on the face of the tax return filed by the
1. Decisions, Resolutions or Orders on Motions for taxpayer; or
Reconsideration or New Trial of the Court in division 2. When the excise tax due on excisable articles has not
in the exercise of its exclusive original jurisdiction over been paid; or
criminal offenses arising from violations of the NIRC or 3. When a discrepancy has been determined between the
TCCP and other laws administered by the BIR or BOC tax withheld and the amount actually remitted by the
where the principal amount of taxes and fees, exclusive withholding agent; or
of charges and penalties is ₱1 million or more; 4. When an article locally purchased or imported by an
2. Decisions, Resolutions or Orders on Motions for Exempt person, such as, but not limited to, vehicles,
Reconsideration or New Trial of the Court in division capital equipment, machineries and spare parts, has
in the exercise of its exclusive appellate jurisdiction been sold, traded or transferred to non-exempt
over criminal offenses arising from violations of the persons (Sec. 228, NIRC); or
NIRC or TCCP and other laws administered by the BIR 5. When a taxpayer who opted to claim a refund or tax
or BOC; and credit of excess creditable withholding tax for a
3. Decisions, Resolutions or Orders of the RTC decided or taxable period was determined to have carried over
resolved by them in the exercise of their appellate and automatically applied the same amount claimed
jurisdiction over criminal offenses arising from against the estimated tax liabilities for the taxable
violations of the NIRC or TCCP and other laws quarter or quarters of the succeeding taxable year.
administered by the BIR or BOC where the principal (Sec. 3.1.2, RR No. 18-2013)
amount of taxes and fees, exclusive of charges and
penalties claimed is less than ₱1 million. In the above-cited cases, a FLD/FAN shall be issued
outright.
PRESCRIPTION;
REMEDIES AGAINST ASSESSMENT NOTICES Q: What is the period for the taxpayer to respond to PAN
via “Reply”?

ASSESSMENT OF INTERNAL REVENUE TAXES
A: The taxpayer has 15 days from receipt of PAN to file a
written reply contesting the proposed assessment.
Q: What is Tax Assessment?
If the taxpayer fails to respond to PAN within the said
A: A formal written notice/communication with the period, the taxpayer shall be considered in default, in which
computation of the tax liability sent to the taxpayer and case, a FLD/FAN shall be issued calling for payment of the
demanding for the settlement of a due tax liability within taxpayer's deficiency tax liability, inclusive of the applicable
the indicated period thereof. penalties. (Par. 2, Sec. 3.1.1, RR No. 18-2013) The failure to
file a reply to PAN will not bar the taxpayer from protesting
Q: What is a Letter of Authority? the FAN because PAN is not the final assessment which can
be protested as contemplated under the NIRC.
A: It is an official document that authorizes a revenue officer
to examine and scrutinize a taxpayer’s books of accounts Q: When should there issuance of Formal letter of
and other accounting records, in order to determine the demand (FLD) and final assessment notice (FAN)?
taxpayer’s correct internal revenue tax liabilities. (Sec. 13,
NIRC) It should cover a taxable period not exceeding one A: The CIR or his duly authorized representative may issue
taxable year. The practice of issuing LAs covering audit of FLD or FAN:
“unverified prior years” is therefore prohibited. (CIR v. Sony
Philippines, Inc., G.R. No. 178697, November 17, 2010) 1. If there is no need to issue a PAN, because the
circumstances show that it fall within the exceptions
Q: What is Preliminary Assessment Notice (PAN)? for the issuance of PAN;
2. If the taxpayer is in default for failure to respond to a
A: If after review and evaluation by the Commissioner or his PAN within a period of 15 days from the receipt of
duly authorized representative, it is determined that there PAN; or
exists sufficient basis to assess the taxpayer for any 3. If the CIR or his duly authorized representative does
deficiency tax or taxes, the said Office shall issue to the not agree with the justifications stated by the taxpayer
taxpayer a PAN for the proposed assessment. It shall show in his reply to the PAN. (Domondon, 2014)
in detail the facts and the law, rules, and regulations, or
jurisprudence on which the proposed assessment is based. Q: What is the period to issue FLD or FAN?
(R.R. No. 18-2013)
A: If the taxpayer, within 15 days from date of receipt of the
Q: What are the rules to issuance of PAN? PAN, responds that he/it disagrees with the findings of
deficiency tax or taxes, an FLD/FAN shall be issued within
15 days from filing/submission of the taxpayer’s response,

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
calling for payment of the taxpayer's deficiency tax liability, rendered by the CIR. It is tantamount to a denial by inaction
inclusive of the applicable penalties. (RR No. 18-2013) by the CIR, which may still be appealed before the CTA and
the assessment evaluated on the basis of the available
NOTE: An FLD/FAN issued reiterating the immediate evidence and documents. (CIR v. Liquigaz Philippines Corp.,
payment of deficiency taxes and penalties previously made G.R. No. 215534, April 18, 2016)
in the PAN is a denial of the response to the PAN. (RMO 11-
2014) Q: What are the 3 important prescriptive periods?

FLD or FAN issued A:
Beyond 15-day period Valid, provided that, it is 1. Period to assess tax
issued within the period of 2. Period to collect tax
limitation to assess 3. Period to file a criminal action (Mamalateo, 2014)
internal revenue taxes
Less than 15-day period Shall constitute an Q: State the rule on prescriptive periods for making
administrative infraction assessments.
and the revenue officers
who caused the delay shall A: GR: The right to assess must be done within 3 years from
be subject to the date of:
administrative sanctions 1. Actual filing of the return, or
as provided for by law and 2. From the last date prescribed by law for the filing of
pertinent revenue such return, whichever is later.
issuances XPNs:
(RMO No. 11-2014) 1. False or fraudulent return with intent to evade tax:
within 10 years from discovery of falsity or fraud;
Q: What is Final Decision on Disputed Assessment 2. Failure to file any return at all: within 10 years from
(FDDA)? discovery of omission to file a return; and
3. Waiver of statute of limitations in writing, which must
A: It is the final decision of the CIR or a duly authorized be made before the expiration of the period of
representative on the protest to the FAN. Pursuant to the assessment of taxes: period agreed upon.
law and regulations, the FDDA should state the facts, the
applicable law, the rules and regulations, or the NOTE: The period agreed upon may be extended by
jurisprudence on which such decision is based. Otherwise, subsequent written agreements made before the
the decision shall be void for depriving the taxpayer of their period previously agreed upon.
right to due process. Without the facts and the law or
regulations on which such a decision is based, the taxpayer If the taxpayer files an amended return which is
cannot intelligently dispute the assessment. (Balauag, substantially different from the original return, the period
2020) of prescription of the right to issue the deficiency
assessment should be counted from the filing of the
Q: What is the effect of a void FDDA? amended return and not the original return. To hold
otherwise would pave the way for taxpayers to evade
A: FDDA that does not inform the taxpayer in writing of the payment of taxes by simply reporting in their original
facts and law on which it is based renders the decision void. return heavy losses and amending the same after the CIR
The written notice requirement for both the FLD and the has lost his authority to assess the proper tax.
FAN is in observance of due process — to afford the
taxpayer adequate opportunity to file a protest on the NOTE: Amendment is considered substantial when: (1)
assessment and thereafter file an appeal in case of an There is under declaration (exceeding 30% of that
adverse decision. declared) of taxable sales, receipts, or income; or (2) There
is overstatement (exceeding 30% of deductions). (Sec. 248
However, a void FDDA does not ipso facto render the (B), NIRC)
assessment void. The assessment remains valid
notwithstanding the nullity of the FDDA because the If the taxpayer files the wrong return, it is as though the
assessment itself differs from a decision on the disputed taxpayer filed no return at all. This is true even if all the
assessment. An FDDA that does not inform the taxpayer in necessary information was reflected in the erroneous
writing of the facts and law on which it is based renders the return. In situations like this, the 10-year prescriptive
decision void. Therefore, it is as if there was no decision period will apply. (Ingles, 2015, citing several cases)

Date of Filing the Return Prescriptive Period of Assessment Prescriptive Period of Collection
Before due date 3 years from due date 5 years from receipt of FAN by taxpayer;
On due date 3 years from due date
Beyond due date 3 years from actual filing NOTE: If taxpayer files fraudulent return or did
Fraudulent filing 10 years from discovery of bad not file any return, the BIR may collect without
faith/fraud assessment within 10 years of filing of
Non-filing 10 years from discovery of non-filing fraudulent return or discovery of non-filing

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Waiver by taxpayer: Depends on the agreement of the parties provided

that the agreement to extend is executed prior to the expiration of the
original period of assessment
Source: Pre-week notes in Taxation Law by Atty. Rizalina Lumbera, 2016 Bar Examinations

Q: Distinguish: False Returns, Fraudulent Returns, and Non-Filing of Returns.

A:
False Return Fraudulent Returns Failure to File a Return
Contains wrong information due to Intentional and deceitful with the sole Omission to file a return in the date
mistake, carelessness or ignorance. aim of evading the correct tax due. prescribed by law.
(Aznar v. CTA, G.R. No. L-20569, August
23, 1974)
Deviation from the truth, whether Intentional or deceitful entry with Omission can be intentional or not.
intentional or not. intent to evade the taxes due.
Does not make the taxpayer criminally Filing a fraudulent return will make The mere omission is already a
liable the taxpayer liable for the crime of violation regardless of the fraudulent
moral turpitude as it entails willfulness intent or willfulness of the individual.
and fraudulent intent on the part of the (CIR vs. Bank of Commerce, CTA EB Case
individual. (Republic v. Marcos II, G.R. No. 654, March 14, 2011)
Nos. 130371 & 130855, August 4, 2009,
595 SCRA 43)
Not subject to 50% penalty surcharge. Subject to 50% penalty surcharge. Not subject to 50% penalty surcharge.
The tax may be assessed, or a
proceeding in court for the collection
of such tax may be begun without
assessment, at any time within ten
years after the discovery of the falsity,
fraud or omission.

Q: What are the grounds for suspension of the assessment has been done at this point. (Ingles, 2015)
prescriptive period for both the power to assess and the The request must be granted by the CIR. A request for
power to collect? (LOW-PARA) reconsideration alone does not suspend the period to
collect.
A:
1. When taxpayer cannot be Located in the address given 7. When there is an Answer filed by the BIR to the
by him in the return. petition for review in the CTA. (Hermanos v. CIR, GR.
No. L-24972. September 30, 1969) where the court
XPN: He informs the CIR of any change in his address justified this by saying that in the answer filed by the
thru a written notice to the BIR. BIR, it prayed for the collection of taxes.

2. When the taxpayer is out of the Philippines. Q: When Commissioner is prohibited from making the
assessment or collection of taxes in a proceeding in
3. When the warrant of distraint and levy is duly served court?
upon the taxpayer, his authorized representative or a
member of his household with sufficient discretion A: When in the opinion of the CTA, the collection by the BIR
and no property is located. may jeopardize the interest of the Government and/or the
taxpayer, the Court in any stage of the proceeding may
Only period to collect is suspended. suspend the said collection and require the taxpayer either
to deposit the amount claimed or to file a surety bond for
4. Where the CIR is prohibited from making the not more than double the amount with the Court. (Sec. 11,
assessment or beginning distraint or levy or a R.A. No. 1125)
proceeding in court for 60 days thereafter, such as
where there is a Pending petition for review in the CTA TAXPAYER’S REMEDIES
from the decision on the protested assessment.
(Republic v. Ker & Co., GR L-21609; September 29, 1966) Q: What are the requisites of a protest?

5. Where CIR and the taxpayer Agreed in writing for the A:
extension of the assessment, the tax may be assessed 1. Must be in writing;
within the period so agreed upon. 2. Addressed to the CIR or his duly authorized
representative;
6. When the taxpayer Requests for reinvestigation which 3. State the facts, applicable law, rules and regulations or
is granted by the Commissioner. jurisprudence on which the protest is based otherwise
the protest would be void; and
Only the period to collect is suspended because 4. Must contain the following:

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
a. Name of the taxpayer and address for the NOTE: No request for reconsideration or reinvestigation
immediate past 3 taxable years; shall be granted on tax assessments that have already
b. Nature of the request, specifying the newly become final, executory and demandable
discovered evidence to be presented;
c. Taxable periods covered by the assessment; Q: What should the taxpayer state in his protest?
d. Amount and kind of tax involved and the
assessment notice number; A:
e. Date of receipt of the assessment notice or letter of 1. The nature of protest whether reconsideration or
demand; reinvestigation, specifying newly discovered or
f. Itemized statement of the finding to which the additional evidence he intends to present if it is a
taxpayer agrees (if any) as basis for the request for reinvestigation,
computation of the tax due, which must be paid 2. Date of the assessment notice, and
upon filing of the protest; 3. The applicable law, rules and regulations, or
g. Itemized schedule of the adjustments to which the jurisprudence on which his protest is based,
taxpayer does not agree; otherwise, his protest shall be considered void and
h. Statements of facts or law in support of the protest; without force and effect.
and
i. Documentary evidence as it may deem necessary Action of the Commissioner on the Protest Filed
and relevant to support its protest to be submitted
60 days from the filing thereof. Q: When is the period to act upon or decide on the
protest filed?
Q: What is the effect of a protest against an assessment?
A:
A: Prescriptive period provided by law to make collection 1. By the duly authorized representative
by distraint or levy or by a proceeding in court is a. Request for investigation – within 180 days from
interrupted once a taxpayer protests the assessment and submission of relevant documents
requests for its cancellation. b. Request for reconsideration - within 180 days from
filing of protest
Q: When is the period to file protest?
2. By CIR
A: The taxpayer or its authorized representative or tax
agent may protest administratively against the FLD/FAN 1. In case of protest – within 180 days from filing of
within thirty (30) days from date of receipt thereof. protest
2. In case of administrative appeal – within 180 days
Q: What are the kinds of protest? from the filing of administrative appeal

A: Administrative appeal – request for reconsideration filed
REQUEST FOR REQUEST FOR with the CIR to elevate the denial made by his duly
RECONSIDERATION REINVESTIGATION authorized representative
A claim for re-evaluation of A claim for re-evaluation of
the assessment based on the assessment based on Q: What are the possible Decisions on the protest filed?
existing records without newly discovered or
need of additional additional evidence. A:
evidence. 1. Direct grant or denial of protest
It may involve a question of It may also involve a
fact or law or both. question of fact or law or The decision of the Commissioner or his duly authorized
both. representative shall state:
It does not toll the statute It tolls the statute of a. The facts, the applicable law, rules and regulations, or
of limitations. limitations. jurisprudence on which such decision is based,
The sixty (60)-day period For requests for otherwise, the decision shall be void, and
for the submission of all reinvestigation, the b. That the same is his final decision.
relevant supporting taxpayer shall submit all
documents shall not apply relevant supporting 2. Indirect denial of protest
to requests for documents in support of
reconsideration. his protest within sixty a. Formal and final letter of demand from the BIR to the
(60) days from date of taxpayer
If the taxpayer fails to file a filing of his letter of b. Civil collection can also be considered as denial of
valid protest against the protest. Otherwise, the protest of assessment. (BIR v. Union Shipping Corp.,
FLD/FAN within thirty assessment shall become G.R. No. 66160, May 21, 1990)
(30) days from date of final, executory and
receipt thereof, the demandable. NOTE: Preliminary collection letter may serve as
assessment shall become assessment notice. (United International Pictures v. CIR, G.R.
final, executory and No. 110318, August 28, 1996)
demandable. c. Filing of criminal action against the taxpayer
d. Issuance of warrant of distraint and levy to enforce
collection of deficiency assessment is outright denial

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
of the request for reconsideration. (Hilado v. CIR, CTA prescription in his answer to the amended petition for
case 1256, Feb. 25, 1964) review.

3. Inaction by the CIR or his duly authorized Q: Distinguish the application of the 2-Year prescriptive
representative period under Sec. 112 and Sec. 229.

Q: What is the effect of failure to appeal? A:
1. Under Sec. 112, the 2-year prescriptive period applies
A: The decision or assessment becomes final and executory. only to the administrative claim before the CIR and not
The assessment is considered correct which may be to judicial claim before the CTA because the taxpayer
enforced by summary or judicial remedies. The assessment always has 30 days from the decision of the CIR or
which has become final and executory cannot be from the lapse of the 120-day period even after the
superseded by a new assessment. lapse of 2 years from the taxable quarter where the
sales were made (CIR v. Mindanao Geothermal II
NOTE: In an action for the collection of the tax by the Partnership, 713 SCRA 645, 2014)
government, the taxpayer is barred from re-opening the
question already decided. In a proceeding for collection of Thus, it is only the administrative claim that must be
tax by judicial action, the taxpayer’s defenses are similar to filed within the two-year prescriptive period; the
those of the defendant in a case for the enforcement of a judicial claim need not fall within the two-year
judgment by judicial action. prescriptive period.

Q: What are the remedies of taxpayer after payment? 2. Under Section 229, the decision of the CIR is
appealable to the CTA sitting in division within 30
A: days after the receipt but must be within the 2-year
TAX REFUND TAX CREDIT period from payment or filing of the final adjusted
The taxpayer asks for The taxpayer asks that the return. Thus, if the Commissioner denies the claim for
restitution of the money money paid be applied to refund within the 2-year period, the remedy is to file
paid as tax. There is actual his existing tax liability an appeal with the CTA 30 days from the receipt of
reimbursement except withholding taxes such denial. But, such 30-day period must also be
Actual reimbursement of Government issues Tax within the 2-year period. For example, if there are only
tax Credit Certificate (TCC) 10 days left within such 2-year period, then, the
which may be applied taxpayer has only 10 days within which to appeal his
against any internal claim. However, if there is an inaction on the part of
revenue tax, excluding the Commissioner and the 2-year period is about to
withholding taxes, for lapse, the remedy is to file an appeal also with the CTA
which the taxpayer is
directly liable. (Sec. 204 GOVERNMENT REMEDIES FOR COLLECTION OF
(C), NIRC) DELINQUENT TAXES

All TCCs issued by the BIR Tax Collection
shall not be allowed to be
transferred or assigned to Q: What are the two ways the government can collect?
any person. (Sec. 2, RR No.
14-2011) A:
1. Summary or administrative remedies
Q: Is a deficiency tax assessment a bar to a claim for tax 2. Judicial remedies
refund or tax credit? (2005 BAR)
Q: What are the requisites for collection?
A: Yes, the deficiency tax assessment is a bar to a tax refund
or credit. The taxpayer cannot be entitled to a refund and at A: GR: Collection is only allowed when there is already a
the same time liable for a tax deficiency assessment for the final assessment made for the determination of the tax due.
same year. The deficiency assessment creates a doubt as to
the truth and accuracy of the Tax Return. Said Return XPN: Judicial action to collect the tax liability is permitted
cannot therefore be the basis of the refund. (CIR v. CA, G.R. even without an assessment when the taxpayer:
No. 106611, July 21, 1994) 1. Files a false or fraudulent return with intent to evade
the tax; or
Q: State the rule on waiver of prescription in an action 2. Fails to file a return.
for refund.
In the above cases, collection must be done within 10 years
A: GR: The 2-year period is not jurisdictional. Therefore, if after the discovery of falsity, fraud, or omission. However,
the government failed to plead prescription in a motion to once an assessment is made against the taxpayer, the
dismiss or as a defense in its answer to the petition for government cannot avail of the 10-year period in Section
review, it is deemed waived. 222(A) If the assessment is made, then the period to collect
is five years from the assessment and not 10 years. (Ingles,
XPN: Taxpayer amends his petition for review alleging 2015) In sum, as a rule, the government can only file a
therein a new cause of action and the government pleads

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
proceeding in court to collect once the assessment has A: GR: No court shall have the authority to grant an
become final and unappealable. injunction to restrain the collection of any national internal
revenue, tax, fee or charge. (Sec. 219, R.A. 8424)
FALSE, FRAUDULENT, OR
RETURN WAS MADE FAILURE TO FILE A XPNs:
RETURN 1. Filing of Injunction with the CTA as an incident to its
appellate jurisdiction
Collection with prior assessment a. Showing that collection of the tax may jeopardize
the interest of the government and/or the
Collection should be taxpayer
made within 5 years from b. Deposit of the amount claimed or file a surety
the date of assessment, bond
either by: c. Showing by taxpayer that appeal is not frivolous
Same
1. Summary nor dilatory
proceedings; or 2. The SC, on exceptional cases of suits questioning the
2. Judicial proceedings. constitutionality of a tax law. (Tolentino v. Executive
(Sec.222 (c), NIRC) Secretary)
Collection without prior assessment 3. In case of local taxes, RTCs may issue an injunction
upon a suit questioning their validity
Collection is within 10 years
from discovery, of the falsity, NOTE: In the case of the collection of local taxes, there is no
fraud or omission to file a express prohibition in the Local Government Code
return. prohibiting courts from issuing an injunction to restrain
local governments from collecting taxes. Such statutory
Limited to purely judicial lapse or intent, however it may be viewed, may have
remedies (Section 222(A)) allowed preliminary injunction where local taxes are
involved. (Angeles City v. Angeles Electric Corporation, G.R.
Q: What is the No Injunction Rule? No. 166134 (2010))

IV. JUDICIAL REMEDIES

Q: State the Summary of Rule on Modes of Appeal as laid down in Mindanao II Geothermal Partnership case.

A:
Type of claim Inaction Appeal
Disputed assessments Inaction within 180-day period is a Appealable 30 days to CTA from receipt
deemed denial. of denial
Claims for refund of internal revenue Inaction within the 2-year prescriptive Appealable 30 days to CTA from receipt
taxes erroneously paid period (from date of payment). of denial provided it is within 2 years
from date of payment. The 2-year
period is not jurisdictional.
Claims for unutilized input VAT Inaction within 120-day or 90-day Appealable 30 days to CTA from receipt
period (as the case may be) is a deemed of denial or from the lapse of the 120-
denial. The 2-year period refers to day period to decide.
institution of administrative claim, and
it is jurisdictional.

NOTE: 90-day period to decide the claim for refund for VAT under TRAIN.


2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Q: State the Summary of Procedures in Q: Can the SC take cognizance of a petition for
Appealing a Decision to the CTA and Beyond. annulment of a decision of the CTA Division or
of the CTA En Banc?
A:
1. Appeal within 30 days from receipt of A: NO. A direct petition for annulment of a
decision or period of inaction of the CIR, judgment of the CTA to the SC, meanwhile, is
COC, Secretary of Finance, or the CBAA or unavailing, for the same reason that there is no
the RTC identical remedy with the High Court to annul a
final and executory judgment of the CA. R.A. No.
GR: Appeal to the CTA Division by a petition for 9282, Section 1 puts the CTA on the same level as
review under Rule 42 within 30 days. the CA, so that if the latter’s final judgments may
not be annulled before the SC, then the CTA’s own
XPN: In case of decisions of the CBAA or RTC in decisions similarly may not be so annulled. And
the exercise of its appellate jurisdiction, appeal more importantly, annulment of judgment is an
to EN BANC by a petition for review under Rule original action, yet, it is not among the cases
43. enumerated in the Constitution’s Article VIII,
Section 5 over which the SC exercises original
In criminal cases, appeal from the decision of jurisdiction. Annulment of judgment also often
the RTC decided in the exercise of its original requires an adjudication of facts, a task that the
jurisdiction is via a notice of appeal filed within Court loathes to perform, as it is not a trier of facts.
15 days from the receipt of decision. (CIR v. Kepco Ilijan Corporation, G.R. No. 199422,
June 21, 2016)
If the RTC acted in the exercise of its appellate
jurisdiction, appeal to the En Banc by a petition Q: What is the effect of the appeal to the CTA?
for review under Rule 43 within 15 days from (2004, 2010 Bar)
the receipt of decision.
A: GR: An appeal to the CTA shall not suspend
2. In case the decision of the Division was payment, levy, distraint and/or sale of any
adverse: File an MR or MNT with the same property of taxpayer for the satisfaction of his tax
division within 15 days from the receipt of the liability.
decision.
XPN: However, when in the opinion of the CTA, the
The MR or the MNT is a condition precedent collection of tax may jeopardize the interest of the
before bringing the case to the CTA En Banc. government and/or the taxpayer, the Court may
(COC vs. Marina Sales, G.R. No. 183868, suspend or restrain collection of tax and require
November 22, 2010) the taxpayer either to:
1. To deposit the amount claimed; or
3. In case the resolution of the Division on the 2. To file a surety bond for not more than
MR is still adverse: File a petition for review double the amount of the tax due (Sec. 11,
with the CTA En Banc under Rule 43 within 15 R.A. 1125)
days from the receipt of the decision. The same
rule applies for criminal cases.

In case the decision of the CTA En Banc is still
adverse: File a review on certiorari with the SC
under Rule 45 within 15 days from receipt of the
decision. (Ingles, 2015)

Q: Can the CTA En Banc entertain a petition for
annulment of a decision of the CTA Division?

A: NO. Annulment of judgment implies power by a
superior court over a subordinate one, as provided
for in Rule 47 of the Rules of Court. The laws
creating the CTA and expanding its jurisdiction
(R.A. Nos. 1125 and 9282) and the court’s own rules
of procedure (the Revised Rules of the CTA) do not
sanction such a procedure.
The CTA sitting En Banc cannot annul a decision of
one of its divisions. The divisions are not
considered separate and distinct courts but are
divisions of one and the same court; there is no
hierarchy of courts within the Court of Tax Appeals,
for they each remain as one court notwithstanding
that they also work in divisions. (CIR v. Kepco Ilijan
Corporation, G.R. No. 199422, June 21, 2016)


2021 GOLDEN NOTES 2021 & 2022
Taxation Law
BAR REMINDERS Aichi and San Roque doctrines; BIR Ruling No. DA-489-
03
JURISPRUDENCE
(CASES PENNED BY J. LEONEN) CIR v. Aichi Forging CIR v. San Roque Power
Company of Asia, Inc. Corporation

Observance of the 120-day Categorically recognized
INCOME TAX period is a mandatory an exception to the
and jurisdictional mandatory and
Deposit Substitutes: 20 or more corporate lenders at any requisite to the filing of a jurisdictional nature of the
one time. – The definition of deposit substitutes was judicial claim for refund 120-day period. It ruled
amended under the 1997 National Internal Revenue Code before the CTA. that BIR Ruling No. DA-
(NIRC), particularly Section 22(Y), with the addition of the 489-03 dated December
qualifying phrase for public — borrowing from 20 or more Succinctly put, once the 10, 2003 provided a valid
individual or corporate lenders at any one time. The administrative claim is claim for equitable
Congress specifically defined "public" to mean 20 or more filed within the 2-year estoppel under Section
individual or corporate lenders at any one time. Hence, the prescriptive period, the 246 of the NIRC. In
number of lenders is determinative of whether a debt claimant must wait for the essence, the aforesaid BIR
instrument should be considered a deposit substitute and 120-day period to end and, Ruling stated that
consequently subject to the 20% final withholding tax. thereafter, he is given a 30- "taxpayer-claimant need
Further, from the point of view of the financial market, the day period to file his not wait for the lapse of
phrase "at any one time" for purposes of determining the judicial claim before the the 120-day period
"20 or more lenders," would mean every transaction CTA, even if said 120-day before it could seek judicial
executed in the primary or secondary market in and 30-day periods would relief with the CTA by way
connection with the purchase or sale of securities. (Banco exceed the of Petition for Review."
De Oro v. Republic, G.R. No. 198756, January 13, 2015, En aforementioned 2-year
Banc) prescriptive period.

Section 2.58.3(B) of Revenue Regulation (R.R.) No. 2-98 To reconcile: Taxpayers who have relied on the Bureau of
clearly provides that proof of remittance is the Internal Revenue Ruling DA-489-03, from its issuance on
responsibility of the withholding agent and not of the December 10, 2003 until its reversal on October 6, 2010
taxpayer-refund claimant. Proof of actual remittance by the by this Court in Aichi, are, therefore, shielded from the
respondent is not needed in order to prove withholding and vice of prematurity. (CE Luzon Geothermal Power Co., Inc.
remittance of taxes to petitioner. (Commissioner of Internal v. CIR, G.R. No. 197526, July 26, 2017, Second Division)
Revenue (CIR) v. Philippine National Bank (PNB), G.R. No.
180290, September 29, 2014, Second Division) [NOTE: Under R.A. No. 10963 (TRAIN Law), the CIR is given
a 90-day period to decide.]
VALUE-ADDED TAX
The 30-day period provided in Section 112 of the 1997
Atlas and Mirant doctrines NIRC to appeal the decision of the Commissioner of Internal
Revenue or its inaction is statutorily provided. Failure to
Atlas Consolidated CIR v. Mirant Pagbilao comply is a jurisdictional error. The window of exemption
Mining v. CIR Corporation created in Commissioner of Internal Revenue v. San Roque
June 8, 2007 September 12, 2008 Power Corporation is limited to premature filing of the
It is more practical and Abandoned Atlas doctrine. judicial remedy. It does not cure lack of jurisdiction due to
reasonable to count the late filing. (CE Casecnan Water and Energy Company, Inc. v.
two-year prescriptive The reckoning frame CIR, G.R. No. 203928, July 22, 2015, Second Division)
period for filing a claim would always be the end
for refund/credit of input of the quarter when the TAX REMEDIES UNDER THE NATIONAL INTERNAL
VAT on zero-rated sales pertinent sales or REVENUE CODE (NIRC)
from the date of filing of transaction was made,
the return and payment of regardless when the input Tax assessments issued in violation of the due process
the tax due which, VAT was paid, applying rights of a taxpayer are null and void. The 1997 NIRC and
according to the law then Section 112(A) of the Tax revenue regulations allow a taxpayer to file a reply or
existing, should be made Code and not other otherwise to submit comments or arguments with
within 20 days from the provisions that pertain to supporting documents at each stage in the assessment
end of each quarter. erroneous tax payments. process. Due process requires the BIR to consider the
defenses and evidence submitted by the taxpayer and to
Thus, the 2013 San Roque case clarified the effectivity of the render a decision based on these submissions. Failure to
Atlas and Mirant doctrines on when to reckon the two-year adhere to these requirements constitutes a denial of due
prescriptive period as follows: “The Atlas doctrine, which process and taints the administrative proceedings with
held that claims for refund or credit of input VAT must invalidity. (CIR v. Avon Products Manufacturing, Inc., G.R.
comply with the two-year prescriptive period under Section Nos. 201398-99, October 3, 2018, Third Division)
229, should be effective only from its promulgation on 8
June 2007 until its abandonment on 12 September Compliance with Section 228 of the NIRC is a substantive
2008 in Mirant. The Atlas doctrine was limited to the requirement. It is not a mere formality. Providing the
reckoning of the two-year prescriptive period from the date taxpayer with the factual and legal bases for the
of payment of the output VAT.” (CBK Power Co., Ltd. v. CIR, assessment is crucial before proceeding with tax
G.R. No. 202066/205353, September 30, 2014, En Banc) collection. Tax collection should be premised on a valid
assessment, which would allow the taxpayer to present his

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
or her case and produce evidence for substantiation. An course of trade or business." KM Corporation paid the
assessment, in the context of the NIRC, is a “written notice taxes due under Section 21 under protest, claiming that
and demand made by the Bureau of Internal Revenue (BIR) (a) xxx and (b) this would amount to double taxation,
on the taxpayer for the settlement of a due tax liability that since its business was already taxed under Sections 15
is there definitely set and fixed.” (CIR v. Fitness by Design, and 17 of the Code. Does this amount to double
Inc., G.R. No. 215957, November 9, 2016. Second Division) taxation? (2018 BAR)

A Preliminary Assessment Notice (PAN) merely informs the A: Yes. The three taxes are all in the nature of local business
taxpayer of the initial findings of the Bureau of Internal taxes on wholesalers, retailers, and service providers which
Revenue. It does not contain a demand for payment but are imposed by the same taxing authority on the same
usually requires the taxpayer to reply within 15 days from subject matter for the same tax period; hence, the elements
receipt. Otherwise, the Commissioner of Internal Revenue of double taxation are present. (Nursery Care Corporation v.
will finalize an assessment and issue a Final Assessment Anthony Acebedo, G.R. No. 180651, July 30, 2014)
Notice (FAN). On the other hand, a FAN contains not only a
computation of tax liabilities but also a demand for payment TAX AVOIDANCE AND TAX EVASION
within a prescribed period. As soon as it is served, an (1989, 1996, 2000, 2005, 2008, 2014, 2016)
obligation arises on the part of the taxpayer concerned to
pay the amount assessed and demanded. It also signals the Q: Maria Suerte, a Filipino citizen, purchased a lot in
time when penalties and interests begin to accrue against Makati City in 1980 at a price of P1 million. Said
the taxpayer. Failure to file an administrative protest property has been leased to MAS Corporation, a
within 30 days from receipt of the FAN will render the domestic corporation engaged in manufacturing paper
assessment final, executory, and demandable. (CIR v. products, owned 99% by Maria Suerte. In October
Transitions Optical Philippines, Inc. G.R. No. 227544, 2007, EIP Corporation, a real estate developer,
November 22, 2017, Third Division) expressed its desire to buy the Makati property at its
fair market value of P300 million, payable as follows:
COURT OF TAX APPEALS (CTA) (a) P60 million down payment; and (b) balance,
payable equally in twenty-four (24) monthly
In an action for the refund of taxes allegedly erroneously consecutive installments. Upon the advice of a tax
paid, the Court of Tax Appeals may determine whether lawyer, Maria Suerte exchanged her Makati property
there are taxes that should have been paid in lieu of the for shares of stock of MAS Corporation. A BIR ruling,
taxes paid. Determining the proper category of tax that confirming the tax-free exchange of property for shares
should have been paid is not an assessment. It is incidental of stock, was secured from the BIR National Office and a
to determining whether or not there should be a refund. Certificate Authorizing Registration was issued by the
(SMI-ED Phil. Technology, Inc. v. CIR, G.R. No. 175410, Revenue District Officer (RDO) where the property was
November 12, 2014, Second Division) located. Subsequently, she sold her entire
stockholdings in MAS Corporation to EIP Corporation
DOUBLE TAXATION for P300 million. In view of the tax advice, Maria Suerte
(1996, 1997, 2004, 2015, 2017, 2018, 2019) paid only the capital gains tax of P29,895,000
(P100,000 x 5% plus P298,900,000 x 10%), instead of
Q: X, a lessor of a property, pays real estate tax on the the corporate income tax of P104,650,000 (35% on
premises, a real estate dealer’s tax based on rental P299 million gain from sale of real property). After
receipts and income tax on the rentals. X claims that evaluating the capital gains tax payment, the RDO
this is double taxation. (1996 BAR) wrote a letter to Maria Suerte, stating that she
committed tax evasion.
A: There is no double taxation. Double taxation means
taxing for the same tax period the same thing or activity Is the contention of the RDO tenable? Or was it tax
twice, when it should be taxed but once, by the same taxing avoidance that Maria Suerte had resorted to? Explain.
authority for the same purpose and with the same kind or (2008 BAR)
character of tax. The real estate tax is a tax on property; the
real estate dealer’s tax is a tax on the privilege to engage in A: The contention of the RDO is not tenable. Maria Suerte
business; while the income tax is a tax on the privilege to resorted to tax avoidance and not tax evasion. Tax
earn an income. These taxes are imposed by different taxing avoidance is the use of legal means to reduce tax liability
authorities and are essentially of different kind and and it is the legal right of a taxpayer to decrease the amount
character. (Villanueva v. City of Iloilo, 26 SCRA 578) of what otherwise would be his taxes by means which the
law permits. (Heng Tong Textiles Co., Inc. v. Commissioner,
Q: KM Corporation, doing business in the City of G.R. No. L-19737, August 26, 1968) There is nothing illegal
Kalookan, has been a distributor and retailer of about transferring first the property to a corporation in a
clothing and household materials. It has been paying tax-free exchange and later selling the shares obtained in
the City of Kalookan local taxes based on Sections 15 the exchange at a lower tax than what could have been
(Tax on Wholesalers, Distributors or Dealers) and 17 imposed if the property was sold directly.
(Tax on Retailers) of the Revenue Code of Kalookan City
(Code). Subsequently, the Sangguniang Panlungsod Q: Lucky V Corporation (Lucky) owns a 10-storey
enacted an ordinance amending the Code by inserting building on a 2,000 square meter lot in the City of
Section 21 which imposes a tax on "Businesses Subject Makati. It sold the lot and building to Rainier for P80
to Excise, Value-Added, and Percentage Taxes under million. One month after, Rainier sold the lot and
the National Internal Revenue Code (NIRC)," at the rate building to Healthy Smoke Company (HSC) for P200
of 50% of 1 % per annum on the gross sales and million, Lucky filed its annual return and declared its
receipts on persons "who sell goods and services in the gain from the sale of the lot and building in the amount
of P750,000.00.

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
A: No, the cash equivalent value of the housing facilities
An investigation conducted by the BIR revealed that inside the factory granted to the senior engineers are not
two months prior to the sale of the properties to considered as fringe benefits subject to tax. The housing
Rainier, Lucky received P40 million from HSC and not facility is furnished by the employer for his convenience or
from Rainier. Said amount of P40 million was debited advantage because it is furnished to ensure that the senior
by HSC and reflected in its trial balance as “other inv. – engineers are always available to attend to possible
Lucky Bldg.” The BIR concluded that there is tax evasion breakdown of machineries and equipment. Benefits which
since the real buyer of the properties of Lucky is HSC are granted for the convenience or advantage of the
and not Rainier. It issued an assessment for deficiency employer are exempt from the fringe benefits tax. (Sec.
income tax in the amount of P79 million against Lucky. 2.33(A), RR No. 03-98 implementing Sec. 33, NIRC)
Lucky argues that it resorted to tax avoidance or a tax
saving device, which is allowed by the NIRC and BIR Q: In 1990, Mr. Naval bought a lot for P1,000,000.00 in
rules since it paid the correct taxes based on the sale to a subdivision with the intention of building his
Rainier. On the other hand, Rainier and HSC also paid residence on it. In 1994, he abandoned his plan to build
the prescribed taxes arising from the sale by Rainier to his residence on it because the surrounding area
HSC. Is the BIR correct in assessing taxes on Lucky? became a depressed area and land values in the
Explain. (2016 BAR) subdivision went down; instead, he sold it for
P800,000.00. At the time of the sale, the zonal value was
A: YES. The BIR is correct in assessing the taxes on Lucky. P500,000.00.

There was no tax avoidance, instead there was tax evasion (a) Is the land a capital asset or an ordinary asset?
on the part of Lucky because of the simulated sale to Rainier Explain.
which had its apparent purpose to reduce the income tax to
be paid by Lucky on the sale to HSC. The sale to Rainier was A: The land is a capital asset because it is neither for sale in
simulated as evidenced by the fact that two months prior to the ordinary course of business nor a property used in the
the sale of the properties to Rainier, Lucky received trade or business of the taxpayer. (Sec. 33, NIRC)
P40million from HSC and not from Rainier. The
intermediary transaction (the simulated sale to Rainier) (b) Is there any income tax due on the sale? Explain.
was prompted more on the mitigation of tax liabilities than (1994 Bar)
for legitimate business purpose constitutes one of tax
evasion. A: YESÅ. Mr. Naval is liable to the 6% capital gains tax
imposed under the Tax Code based on the gross selling
TAXABLE INCOME FRINGE BENEFITS price of P 800,000.00 which is an amount higher than the
(1991, 1993, 1995, 2001, 2003, 2016, 2019) zonal value.

Q: As a way to augment the income of the employees of INCOME FROM DEALINGS IN PROPERTY
DEF, Inc., a private corporation, the management (1987, 1988, 1989, 1991, 1992, 1993, 1994, 1997,
decided to grant a special stipend of P50,000.00 for the 1998, 2001, 2003, 2005, 2007, 2008, 2009, 2012,
first vacation leave that any employee takes during a 2014, 2015, 2017, 2019)
given calendar year. In addition, the senior engineers
were also given housing inside the factory compound Q: In January 1970, Juan Gonzales bought one hectare
for the purpose of ensuring that there are available of agricultural land in Laguna for P100,000. This
engineers within the premises every time there is a property has a current fair market value of P10 million
breakdown in the factory machineries and equipment. in view of the construction of a concrete road traversing
the property. Juan Gonzales agreed to exchange his
(a) Is the special stipend part of the taxable income of agricultural lot in Laguna for a one-half hectare
the employees receiving the same? If so, what tax is residential property located in Batangas, with a fair
applicable and what is the tax rate? Explain. market value of P 10 million, owned by Alpha
Corporation, a domestic corporation engaged in the
A: The special stipend is a taxable income of an employee. If purchase and sale of real property. Alpha Corporation
the individual is a rank-and-file employee, the same forms acquired the property in 2007 for P 9 million.
part of his compensation income and it is subject to income
tax (or withholding tax on compensation) at a schedular (a) What is the nature of the real properties exchanged
rate. However, if the stipend allowance, if lumped-up with for tax purposes – capital asset or ordinary asset?
13th month pay and other benefits, the aggregate amount Explain.
do not exceed the exclusion threshold of P90,000.00, the
same shall be excluded from gross income and not subject A: The one hectare agricultural land owned by Juan
to income tax. Gonzales is a capital asset because it is not a real property
used in trade or business. The one-half hectare residential
If the employee is not a rank-and-file employee (but a property owned by Alpha Corporation is an ordinary asset
managerial or supervisory), the same is subject to fringe because the owner is engaged in the purchase and sale of
benefits tax or final tax at 35% based on the grossed-up real property. (Sec. 39, NIRC, RR No. 07-03)
monetary value of the special stipend. (Sec. 33, NIRC, as
amended) (b) Is Juan Gonzales subject to income tax on the
exchange of property? If so, what is the tax base and
(b) Is the cash equivalent value of the housing facilities rate? Explain.
received by the senior engineers subject to fringe
benefits tax? Explain. (2019 BAR) A: YES. The tax base in a taxable disposition of a real
property classified as a capital asset is the higher between

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
two values: the fair market value of the property received
in exchange and the fair market value of the property PRIZES AND AWARDS
exchanged. Since the fair market value of two properties are (1993, 1996, 2000, 2015, 2019)
the same, the said fair market value should be taken as the
tax base which is P 10 million. The income tax rate is 6%. Q: Mr. D, a Filipino amateur boxer, joined an Olympic
(Sec. 24(D)(1), NIRC) qualifying tournament held in Las Vegas, USA, where he
won the gold medal. Pleased with Mr. D's
(c) Is Alpha Corporation subject to income tax on the accomplishment, the Philippine Government, through
exchange of property? If so, what is the tax base and the Philippine Olympic Committee, awarded him a cash
rate? Explain. (2008 BAR) prize amounting to P1,000,000.00. Upon receipt of the
funds, he went to a casino in Pasay City and won the
A: YES. The gain from the exchange constitutes an item of P30,000,000.00 jackpot in the slot machine. The next
gross income, and being a business income, it must be day, he went to a nearby Lotto outlet and bought a Lotto
reported in the annual income tax return of Alpha ticket which won him a cash prize of P5,000.00. Which
Corporation. From the pertinent items of gross income, of the above sums of money is/are subject to income
deductions allowed by law from gross income can be tax? Explain. (2019 BAR)
claimed to arrive at the net income which is the tax base for
the corporate income tax rate of 35%. (Secs. 27(A) & 31, A: Only the amount of P30,000,000.00, constituting the
NIRC) winnings from casino, is subject to income tax, specifically
to a final tax at the rate of 20%. (Sec. 24(B)(1), NIRC, as
[NOTE: That from January 1, 2009 to June 30, 2020 the tax amended)
rate is 30%. (R.A. No. 9337; R.A. No. 11534 – CREATE Act)
Starting July 1, 2020, the tax rate for Domestic Corporations The cash prize of P1,000,000 is exempt from taxation under
in general is 25%, and the tax rate for Domestic Section 32(B)(7)(d) of the NIRC, as amended, considering
Corporations classified as Micro, Small and Medium that it is in the nature of a prize granted to Mr. D as an
Enterprise, is 20%. (Sec. 27(A), NIRC as amended by R.A. No. athlete after winning an international sports competition,
11534 – CREATE Act) For a corporation to be classified as i.e., an Olympic qualifying tournament, sanctioned by his
Micro, Small and Medium Enterprise, during the taxable national sports association.
year for which the tax is imposed, the net taxable income
does not exceed P5,000,000 and the total assets does not Meanwhile, under Section 24(B)(1) of the NIRC, the
exceed P100,000,000, excluding land on which the winnings amounting to P10,000 or less from Lotto shall be
particular business entity’s office, plant, and equipment are exempt from tax, therefore the Lotto prize of P5,000 is not
situated. (CREATE Act is not covered by 2020 bar syllabus)] subject to income tax. (NIRC, Sec. 24(B)(1), amended by
R.A.10963 – TRAIN Law)
PASSIVE INVESTMENT INCOME
(1994, 1995, 1997, 2000, 2003, 2005, 2015, 2018) TAX-FREE EXCHANGES
Q: Mr. Javier is a non-resident senior citizen. He (2018, 2019)
receives a monthly pension from the GSIS which he
deposits with the PNB-Makati Branch. Is he exempt Q: B transferred his ownership over a 1,000-square
from income tax and therefore not required to file an meter commercial land and three-door apartment to
income tax return? (2000 BAR) ABC Corp., a family corporation of which B is a
stockholder. The transfer was in exchange of 10,000
A: Mr. Javier is exempt from income tax on his monthly GSIS shares of stock of ABC Corp. As a result, B acquired 51%
pension (Sec. 32(B)(6)(f), NIRC) but not on the interest ownership of ABC Corp., with all the shares of stock
income that might accrue on the pensions deposited with having the right to vote. B paid no tax on the exchange,
PNB which are subject to final withholding tax. maintaining that it is a tax avoidance scheme allowed
under the law. The Bureau of Internal Revenue, on the
Consequently, since Mr. Javier’s sole taxable income would other hand, insisted that B's alleged scheme amounted
have been subjected to a final withholding tax, he is not to tax evasion. Should B pay taxes on the exchange?
required anymore to file an income tax return. (Sec. Explain. (2019 BAR)
51(A)(2)(c), NIRC)
A: No, B shall not pay taxes on the exchange. Section
Q: What are disguised dividends in income taxation? 40(C)(2) of the Tax Code provides that no gain or loss shall
Give an example. (1994 BAR) be recognized if property is transferred to a corporation by
a person in exchange for stocks in such corporation wherein
A: Disguised dividends are those income payments made by as a result of such exchange, such person, alone or together
a domestic corporation, which is a subsidiary of a non- with others, not exceeding four, gains control of the
resident foreign corporation, to the latter ostensibly for corporation. When B transferred the properties for shares
services rendered by the latter to the former, but which in ABC Corporation, he acquired control (51% of voting
payments are disproportionately larger than the actual shares) over the corporation, thus, the transaction shall not
value of the services rendered. In such case, the amount be subject to income tax, capital gains tax, and value added
over and above the true value of the service rendered shall tax.
be treated as a dividend and shall be subjected to the
corresponding tax on Philippine sourced gross income, or
such other preferential rate as may be provided under a ORDINARY AND NECESSARY TRADE, BUSINESS OR
corresponding Tax Treaty. PROFESSIONAL EXPENSES
(1988, 1989, 1990, 1993, 2006, 2009, 2016, 2017)
Example: Royalty payments under a corresponding
licensing agreement.

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
Q: Calvin Dela Pisa was a Permits and Licensing Officer Q: The Filipinas Hospital for Crippled Children is a
(rank-and-file) of Sta. Portia Realty Corporation charitable organization. X visited the hospital, on his
(SPRC). He invited the Regional Director of the Housing birthday, as was his custom. He gave P100,000.00 to the
and Land Use Regulatory Board (HLURB) to lunch at the hospital and P5,000.00 to a crippled girl whom he
Sulo Hotel in Quezon City to discuss the approval of particularly pitied. A crippled son of X is in the hospital
SPRC's application for a development permit in as one of its patients. X wants to exclude both the
connection with its subdivision development project in P100,000.00 and the P5,000.00 from his gross income.
Pasig City. At breakfast the following day, Calvin met a Discuss. (1993 BAR)
prospective client interested to enter into a joint
venture with SPRC for the construction of a residential A: Under the NIRC, charitable contributions to be
condominium unit in Cainta, Rizal. deductible must be:

Calvin incurred expenses for the lunch and breakfast 1. Actually paid or made to domestic corporations or
meetings he had with the Regional Director of HLURB associations organized and operated exclusively
and the prospective client, respectively. The expenses for religious, charitable, scientific, youth and sports
were duly supported by official receipts issued in his development, cultural or educational purposes or
name. At month's end, he requested the reimbursement for rehabilitation of veterans or to social welfare
of his expenses, and SPRC granted his request. institutions no part of which inures to the benefit
of any private individual;
(a) Can SPRC claim an allowable deduction for the 2. Made within the taxable year;
expenses incurred by Calvin? Explain your answer. 3. Not more than 10% (for individuals) of 5% (for
corporations) of the taxpayer’s taxable income to
A: NO. SPRC cannot claim as a deduction, the amount spent be computed without including the contribution.
for lunch in the meeting with the Regional Director of
HLURB. While the expense is business connected, the same Applying the above provisions of law to the case at bar, it is
is not allowed as deduction because it was incurred as an clear therefore that only the P100,000.00 contribution of X
indirect payment to a government official which, not only to Filipinas Hospital for Crippled Children qualified as a
amounts to a violation of the Anti-Graft and Corrupt deductible contribution.
Practices Act, but also constitutes bribes, kickbacks and
similar payments. (Sec 34(A)(1)(c), NIRC) The NIRC expressly provides that the same must be actually
paid to a charitable organization to be deductible. Note that
With respect, however, to the amount spent for breakfast the law accorded no privilege to similar contributions
with a prospective client, the same is deductible from gross extended to private individuals. Hence, the P5,000.00
income of SPRC. The expense complies with the contribution to the crippled girl cannot be claimed as a
requirements for deductibility, namely: (a) the expense deduction.
must be ordinary and necessary; (b) it must have been paid
or incurred during the taxable year; (c) it must have been BRIBES (1993, 1998, 2014)
paid or incurred in carrying on the trade or business of the
taxpayer, and (d) it must be supported by receipts, records Q: Freezy Corporation, a domestic corporation engaged
or other pertinent papers. (CIR v. General Foods (Phils.), Inc., in the manufacture and sale of ice cream, made
G.R. No. 143672, 2003) Section 34(A)(1)(b) of the NIRC, as payments to an officer of Frosty Corporation, a
amended, does not require that the substantiation be in the competitor in the ice cream business, in exchange for
form of official receipts or invoices issued in the name of the said officer’s revelation of Frosty Corporation’s trade
taxpayer claiming the expense. It must only be proven that secrets.
there is a “direct connection or relation of the expense being
deducted to the development, management, operation May Freezy Corporation claim the payment to the
and/or conduct of the trade, business or profession of the officer as deduction from its gross income? Explain.
taxpayer”. (2014 BAR)

(b) Is the reimbursement received by Calvin from SPRC A: NO. The payments made in exchange for the revelation of
subject to tax? Explain your answer. (2017 BAR) a competitor’s trade secrets is considered as an expense
which is against law, morals, good customs or public policy,
A: NO. Any amount paid as reimbursements for which is not deductible. (3M Philippines, Inc. v. CIR, GR No.
representation incurred by the employee in the 82833, 1988) Also, the law will not allow the deduction of
performance of his duties is not compensation subject to bribes, kickbacks and other similar payments. Applying the
withholding, if the following conditions are satisfied: (i) it is principle of ejusdem generis, payment made by Freezy
for ordinary and necessary representation expense paid or Corporation would fall under “other similar payments”
incurred by the employee in the pursuit of the trade, which are not allowed as deduction from gross income.
business or profession; and (ii) the employee is required to (Sec. 34(A)(1)(c). NIRC)
account/liquidate for the such expense in accordance with
the specific requirements of substantiation pursuant to Sec.
34 of the NIRC, as amended. The amounts are actually spent INCOME TAX ON RESIDENT CITIZENS, NON- RESIDENT
by the employee for the benefit of his employer, so no CITIZENS AND RESIDENT ALIENS
income is considered to have flowed to the employee. (1997, 1999, 2000, 2001, 2002, 2007, 2015, 2016,
2017, 2018, 2019)

CHARITABLE AND OTHER CONTRIBUTIONS
Q: Kronge Konsult, Inc. (KKI) is a Philippine
(1993, 1996, 1998, 2018)
corporation engaged in architectural design,
engineering, and construction work. Its principal office

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
is located in Makati City, but it has various June 2017 after KKl's project in Kuala Lumpur,
infrastructure projects in the country and abroad. Malaysia was completed. (2018 BAR)
Thus, KKI employs both local and foreign workers. The
company has adopted a policy that the employees' A: Compensation from January 1 up to the time of her return
salaries are paid in the currency of the country where in June 2017 is an income from a source without the
they are assigned or detailed. Philippines which is not taxable if received by a nonresident
citizen. (Secs. 23 & 42, NIRC) Compensation from June 2017
Below are some of the employees of KKI. Determine to December 31, 2017 is an income from a source within the
whether the compensation they received from KKI in Philippines and taxable to Karen, who is taxable on
2017 is taxable under Philippine laws and whether they worldwide income from the time she regained the status of
are required to file tax returns with the Bureau of a resident citizen and accordingly, must file returns to pay
Internal Revenue (BIR). for the tax, unless she is purely compensation income
earner for which the withholding tax on wages was
(a) Kris Konejero, a Filipino accountant in KKl's Tax correctly withheld by KKI. (Sec. 51(A)(2)(b), NIRC)
Department in the Makati office, and married to a
Filipino engineer also working in KKI; ITEMS TO BE INCLUDED AS PART OF GROSS ESTATE
(2001, 2003, 2005, 2007, 2013, 2018, 2019)
A: Taxable. (Sec. 23 & 24(A), NIRC) Kris must file tax returns
with the BIR, unless she qualifies for substituted filing of Q: Karissa is the registered owner of a beachfront
income tax returns because the tax was correctly withheld property in Kawayan, Quezon which she acquired in
by the employer. (Sec. 51(A)(2)(b), NIRC) 2015. Unknown to many, Karissa was only holding the
property in trust for a rich politician who happened to
(b) Klaus Kloner, a German national who heads KKl's be her lover. It was the politician who paid for the full
Design Department in its Makati office; purchase price of the Kawayan property. No deed of
trust or any other document showing that Karissa was
A: Taxable being an income earned by a resident alien from only holding the property in trust for the politician was
Philippine sources. (Sec. 23 & 24(A), NIRC) Klaus is required executed between him and Karissa.
to file a tax return unless the compensation income from
KKJ is his only returnable income and the withholding tax Karissa died single on May 1, 2017 due to a freak
thereon was correctly withheld by his employer. (Sec. surfing accident. She left behind a number of personal
51(A)(2)(b), NIRC) properties as well as real properties, including the
Kawayan property. Karissa's sister, Karen, took charge
(c) Krisanto Konde, a Filipino engineer in KKl's Design of registering Karissa's estate as a taxpayer and
Department who was hired to work at the principal reporting, for income tax and VAT purposes, the rental
office last January 2017. In April 2017, he was assigned income received by the estate from real properties.
and detailed in the company's project in Jakarta, However, it was only on October 1, 2017 when Karen
Indonesia, which project is expected to be completed in managed to file an estate tax return for her sister's
April 2019; estate. xxx xxx

A: His compensation from January 1 up to the time he left Should the beachfront property be included in
the Philippines is taxable and he must file tax returns, Karissa's gross estate? (2018 BAR)
unless the compensation income is his only returnable
income, and the withholding tax thereon was correctly A: YES. The property is registered in the name of the
withheld by KKI. (Sec. 51(A)(2)(b), NIRC) The compensation decedent, so it’s a property owned by her as of the time of
for his services abroad from the date of his actual death which must properly be included as part of her gross
assignment thereat up to the time of the completion of the estate. The extent of her interest in the property, which is
project is not taxable being an income from a source full ownership, must form part of her gross estate. (Sec.
without the Philippines earned by a non-resident citizen. 85(A), NIRC)
(Secs. 23 & 42, NIRC) He is not required to file a return for
this income derived from without, because said income is
not subject to income tax in the Philippines. (Sec. 23, NIRC) FUNERAL EXPENSES
(2018, 2019)
(d) Kamilo Konde, Krisanto's brother, also an engineer
assigned to KKl's project in Taipei, Taiwan. Since KKI Q: A, a resident Filipino citizen, died in December 2018.
provides for housing and other basic needs, Kamila A's only assets consist of a house and lot in Alabang,
requested that all his salaries, paid in Taiwanese where his heirs currently reside, as well as a house in
dollars, be paid to his wife in Manila in its Philippine Los Angeles, California, USA. In computing A's taxable
Peso equivalent; and net estate, his heirs only deducted: 1. ₱ 10,000,000.00
constituting the value of their house in Alabang as their
A: Not taxable and no need to file tax returns. Kamilo is a family home; and 2. ₱ 200,000.00 in funeral expenses
non-resident citizen who is taxable only on income from because no other expenses could be substantiated. Are
sources within the Philippines. Compensation for services both deductions claimed by A's heirs correct? Explain.
rendered outside of the Philippines is an income from a (2019 BAR)
source without the Philippines which is not subject to the
Philippine income tax. (Secs. 23 & 42, NIRC) A: NO. The claim of both deductions by the heirs is
incorrect. Only the claim for the deduction of the family
(e) Karen Karenina, a Filipino architect in KKl's Design home worth P 10,000,000.00 is correct, if the property is
Department who reported back to KKl's Makati office in the decedent’s family home as of the time of his death. (Sec.
86(A)(7), NIRC) As for the funeral expense, upon the

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
amendment introduced by R.A. No. 10963 – TRAIN Law,
funeral expense was not specified as a separate deductible (a) Is T Corp.'s contention regarding the prescription of
item, hence, not allowed as a deduction from the gross the assessment meritorious? Explain.
estate of the decedent.
A: NO. The three-year prescriptive period for the
EXEMPTION OF GIFTS FROM DONOR’S TAXES assessment of tax shall start to run from the last day
(1992, 1994, 1995, 2000, 2001, 2002, 2007, 2008, prescribed by law for the filing of the return, or the day the
2014, 2017, 2018, 2019) return was filed, whichever comes later. (Sec. 203, NIRC) In
the present case, since T. Corp. filed its annual income tax
Q: Due to rising liquidity problems and pressure from return on April 15, 2013, which is also the last day to file the
its concerned suppliers, P Corp. instituted a flash said return, the last day to assess shall fall on April 15, 2016.
auction sale of its shares of stock. P Corp. was then able By issuing the FAN on April 11, 2016, the right to assess
to sell its treasury shares to Z, Inc., an unrelated deficiency income tax for year 2012 has not yet prescribed.
corporation, for P l,000,000.00, which was only a little
below the valuation of P Corp. 's shares based on its (b) Should the CIR's motion to dismiss be granted?
latest audited financial statements. In connection Explain. (2019 BAR)
therewith, P Corp. sought a Bureau of Internal Revenue
ruling to confirm that, notwithstanding the price A: YES. Since the taxpayer failed to file a protest against the
difference between the selling price of the shares and FAN within 30 days from date of receipt, the assessment
their book value, the said transaction falls under one of had become final, executory, and demandable. (Sec. 228,
the recognized exemptions to donor's tax under the Tax NIRC, RR No. 18-13)
Code. Does the above transaction fall under any of the
exemptions? Explain. (2019 BAR) DECISION/INACTION OF THE COMMISSIONER
ON THE PROTEST FILED
A: YES. The transaction is not subject to donor’s tax. (1987, 1999, 2005, 2009, 2012, 2014)
Generally, the sale of property, other than real property
held as capital assets, for less than its fair market value is Q: In the examination conducted by the revenue
subject to donor’s tax on the amount by which the fair officials against the corporate taxpayer in 2010, the BIR
market value exceeds the consideration received. However, issued a final assessment notice and demand letter
if the sale of property is made in the ordinary course of which states: “It is requested that the above deficiency
business (i.e., (i) a transaction which is bona fide, (ii) at tax be paid immediately upon receipt hereof, inclusive
arm’s length, and (iii) free from any donative intent), the of penalties incident to delinquency. This is our final
sale will be considered made for an adequate and full decision based on investigation. If you disagree, you
consideration in money or money’s worth and will not be may appeal this final decision within 30 days from
subject to donor’s tax. (Sec. 100, NIRC, as amended by R.A. receipt hereof, otherwise said deficiency tax
No. 10963 – TRAIN Law) assessment shall become final, executory, and
demandable.” The assessment was immediately
In this case, the transfer was made in the ordinary course of appealed by the taxpayer to the Court of Tax Appeals,
business since it was done for a valid business purpose, without filing its protest against the assessment and
which is to address liquidity problems and relieve pressure without a denial thereof by the BIR. If you were the
from the Company’s suppliers. judge, would you deny the petition for review filed by
the taxpayer and consider the case as prematurely
PRESCRIPTIVE PERIOD FOR ASSESSMENT filed? Explain you answer. (2012 BAR)
GENERAL RULE
(1989, 1997, 1999, 2000, 2002, 2006, 2017, 2019) A: No, the Petition for Review should not be denied. The
case is an exception to the rule on exhaustion of
Q: After a Bureau of Internal Revenue (BIR) audit, T administrative remedies. The BIR is estopped from claiming
Corp., a domestic corporation engaged in buying and that the filing of the Petition for Review is premature
selling of scrap metals, was found to have deficiency because the taxpayer failed to exhaust all administrative
income tax of ₱25,000,000.00, including interests and remedies. The statement of the BIR in its Final
penalties, for the year 2012. For 2012, T Corp. filed its Assessment Notice and Demand Letter led the taxpayer
income tax return (ITR) on April 15, 2013 because it to conclude that only a final judicial ruling in his favor
used the calendar year for its accounting. The BIR sent would be accepted by the BIR. The taxpayer cannot be
the Preliminary Assessment Notice (PAN) on December blamed for not filing a protest against the Formal Letter of
23, 2015, and eventually, the Final Assessment Notice Demand with Assessment Notices since the language used
(FAN) on April 11, 2016, which were received by T Corp. and the tenor of the demand letter indicate that it is the final
on the same dates that they were sent. Upon receipt of decision of the respondent on the matter. The CIR should
the FAN, T Corp. filed its protest letter on June 25, 2016. indicate, in a clear and unequivocal language, whether his
action on a disputed assessment constitutes his final
Thereafter, and without action from the Commissioner determination thereon in order for the taxpayer concerned
of Internal Revenue (CIR), T Corp. filed a petition for to determine when his or her right to appeal to the tax court
review before the Court of Tax Appeals, alleging that accrues. Although there was no direct reference for the
the assessment has prescribed. taxpayer to bring the matter directly to the CTA, it cannot
be denied that the word “appeal” under prevailing tax laws
For its part, the CIR moved to dismiss the case, pointing refers to the filing of a Petition for Review with the CTA.
out that the assessment had already become final (Allied Bank vs CIR, GR No 175097, February 5, 2010)
because the protest was filed beyond the allowable
period.

2021 GOLDEN NOTES 2021 & 2022
Taxation Law
RECOVERY OF TAX ERROUNEOUSLY OR Q: On May 15, 2013, CCC, Inc. received the Final Decision
ILLEGALY COLLECTED on Disputed Assessment issued by the Commissioner of
(2002, 2005, 2017) Internal Revenue (CIR) dismissing the protest of CCC,
Inc. and affirming the assessment against said
Q: Wreck Corporation is a domestic corporation corporation. On June 10, 2013, CCC, Inc. filed a Petition
engaged in the business of importing, refining and for Review with the Court of Tax Appeals (CTA) in
selling petroleum products. During the period from division. On July 31, 2015, CCC, Inc. received a copy of
September 1, 2014 to December 31, 2014, Wreck the Decision dated July 22, 2015 of the CTA division
Corporation imported 225 million liters of Jet A-1 dismissing its Petition. CCC, Inc. immediately filed a
aviation fuel and paid the excise taxes thereon. Petition for Review with the CTA en banc on August 6,
Seventy-five percent (75%) of the total volume of 2015. Is the immediate appeal by CCC, Inc. to the CTA en
aviation fuel imported were actually sold to banc of the adverse Decision of the CTA division the
international carriers of Philippine and foreign proper remedy? (2015 BAR)
registries for their use or consumption outside of the
Philippines in the period from November 1, 2014 to A: NO. CCC, Inc. should first file a motion for reconsideration
December 31, 2014. Wreck Corporation did not pass on or motion for new trial with the CTA Division. Before the
to the international carriers the excise taxes it paid on CTA en banc could take cognizance of the petition for review
the importation of petroleum products. concerning a case falling under its exclusive appellate
jurisdiction, the litigant must sufficiently show that it
On June 25, 2015, Wreck Corporation filed an sought prior reconsideration or moved for a new trial with
administrative claim for refund or issuance of tax credit the concerned CTA Division. (Commissioner of Customs v.
certificate amounting to the excise taxes it had paid on Marina Sale, G.R. No. 183868, November 22, 2010, 635 SCRA
the importation of 225 million liters of Jet A-1 aviation 606; Rule 8, Sec. 1 of the Revised Rules of Court of Tax
fuel. Appeals)

If you were the Commissioner of Internal Revenue, will Q: Mr. Abraham Eugenio, a pawnshop operator, after
you grant Wreck Corporation's administrative claim having been required by the Revenue District Officer to
for refund or issuance of tax credit certificate? Explain pay value-added tax pursuant to a Revenue
your answer. (2017 BAR) Memorandum Order (RMO) of the Commissioner of
Internal Revenue, filed with the Regional Trial Court an
A: Yes, but only the excise tax which corresponds to the action questioning the validity of the RMO.
75% of the total volume of aviation fuel imported that were
actually sold to the international carriers. Wreck If you were the judge, will you dismiss the case? (2006
Corporation, as the statutory taxpayer who is directly liable BAR)
to pay the excise tax on its petroleum products, is entitled
to a refund or credit of the excise taxes it paid for petroleum A: YES. An RMO is in reality a ruling, or an opinion issued by
products sold to international carriers, the latter having the Commissioner in implementing the provisions of the
been granted exemption from the payment of said excise tax Tax Code dealing with the taxability of pawnshops. The
under Sec. 135(a) of the NIRC. (CIR v. Pilipinas Shell power to review rulings issued by the Commissioner is
Petroleum Corporation, G.R. No. 188497, 2014) lodged with the Court of Tax Appeals (CTA) and not with the
Regional Trial Court. A ruling falls within the purview of
“other matters arising under the Tax Code,’’ appealable only
OPTION TO CARRY OVER
to the CTA. (CIR v. Leal, 392 SCRA 9, 2002)
EXCESS QUARTERLY INCOME TAX PAID
Q: Globesmart Services, Inc. received a final assessment
(1992, 1994, 1997, 2008, 2012, 2013, 2017)
notice with formal letter of demand from the BIR for
deficiency income tax, value-added tax and withholding
Q: In its final adjustment return for the 2010 taxable tax for the taxable year 2016 amounting to P48 million.
year, ABC Corp. had excess tax credits arising from its Globesmart Services, Inc. filed a protest against the
overwithholding of income payments. It opted to carry assessment, but the Commissioner of Internal Revenue
over the excess tax credits to the following year. denied the protest. Hence, Globesmart Services, Inc.
Subsequently, ABC Corp. changed its mind and applied filed a petition for review in the CTA with an urgent
for a refund of the excess tax credits. Will the claim for motion to suspend the collection of tax.
refund prosper? (2013 BAR)
After hearing, the CTA Division issued a resolution
A: NO. The claim for refund will not prosper. While the law granting the motion to suspend but required
gives the taxpayer an option whether to carry-over or claim Globesmart Services, Inc. to post a surety bond
as refund the excess tax credits shown on its final equivalent to the deficiency assessment within 15 days
adjustment return, once the option to carry over has been from notice of the resolution. Globesmart Services, Inc.
made, such option shall be considered irrevocable for that moved for the partial reconsideration of the resolution
taxable period and no application for cash refund or and for the reduction of the bond to an amount it could
issuance of a tax credit certificate shall be allowed. (Sec. 76, obtain. The CTA Division issued another resolution
NIRC; CIR v. PL Management International Phils, Inc., GR No. reducing the amount of the surety bond to P24 million.
160949, April 4, 2011) The latter amount was still more than the net worth of
Globesmart Services, Inc. as reported in its audited
JURISDICTION OF THE COURT OF TAX APPEALS financial statements.
(1989, 1997, 1998, 2004, 2006, 2014, 2015, 2016,
2017, 2018) (a) May the collection of taxes be suspended? Explain
your answer.


2021 GOLDEN NOTES 2021 & 2022
Taxation Law
A: YES. As provided by R.A. No. 1125, as amended by R.A. middle part are occupied by the Church and a convent,
No. 9282, that when in the opinion of the Court the the eastern side by a school run by the Church itself, the
collection by the aforementioned government agencies may southeastern side by some commercial establishments,
jeopardize the interest of the Government and/or the while the rest of the property, in particular the
taxpayer, the Court at any stage of the proceeding may northwestern side, is idle or unoccupied. May the
suspend the collection and require the taxpayer either to Church claim tax exemption on the entire land? Decide
deposit the amount claimed or to file a surety bond for not with reasons. (2005 BAR)
more than double the amount with the Court.
A: NO. The portions of the land occupied and used by the
(b) Is the CTA Division justified in requiring Globesmart church, convent and school run by the church are exempt
Services, Inc. to post a surety bond as a condition for the from real property taxes while the portion of the land
suspension of the deficiency tax collection? Explain occupied by commercial establishments and the portion,
your answer. (2017 BAR) which is idle, are subject to real property taxes. The “usage”
of the property and not the “ownership" is the determining
A: NO. The Supreme Court in the Tridharma Case cited the factor whether or not the property is taxable. (Lung Center
case of Pacquiao v. Court of Tax Appeals (G.R. No. 213394, of the Philippines v. Q.C., 433 SCRA 119, 2004)
2016) where it ruled that the CTA should first conduct a
preliminary hearing for the proper determination of the PAYMENT UNDER PROTEST
necessity of a surety bond or the reduction thereof. In the (1988, 1991, 1993, 2014, 2018)
conduct of its preliminary hearing, the CTA must balance
the scale between the inherent power of the State to tax and Q: Madam X owns real property in Caloocan City. On July
its right to prosecute perceived transgressors of the law, on 1, 2014, she received a notice of assessment from the
one side, and the constitutional rights of petitioners to due City Assessor, informing her of a deficiency tax on her
process of law and the equal protection of the laws, on the property. She wants to contest the assessment. May
other. In this case, the CTA failed to consider that the Madam X refuse to pay the deficiency tax assessment
amount of the surety bond that it is asking Globesmart during the pendency of her appeal? (2014 BAR)
Services, Inc. to pay is more than its net worth. It is, thus,
necessary for the CTA to first conduct a preliminary hearing A: NO. The payment of the deficiency tax is a condition
to give the taxpayer an opportunity to prove its inability to before she can protest the deficiency assessment. It is the
come up with such amount. decision on the protest or inaction thereon that gives her
the right to appeal. This means that she cannot refuse to pay
ACTUAL USE PRINCIPLE the deficiency tax assessment during the pendency of the
(1988, 1990, 2000, 2001, 2003, 2005, 2009, 2018) appeal because it is the payment itself which gives rise to
the remedy. The law provides that no protest (which is the
Q: The Roman Catholic Church owns a 2–hectare lot in beginning of the disputation process) shall be entertained
a town in Tarlac province. The southern side and unless the taxpayer first pays the tax. (Sec. 252, LGC)

2021 GOLDEN NOTES 2021 & 2022

2021 UST Pre Week The Law Pertaining To The State and Its Relationship

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The Law Pertaining

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Revoke the It is the supreme and uncontrollable power inherent in a

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obvious from the completion of the road widening for the C-

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Rules regarding the passage of bills considered a non-chartered government-owned and

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Locus standi: “a mere procedural technicality, has been

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eligible, or that there was want of power in the electing

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The Ombudsman shall enjoy fiscal autonomy. Its approved

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Operates on the future. Operates based on past

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expertise of the PETITION NOT TO GIVE DUE COURSE TO OR CANCEL A

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votes of each candidate is involved (Delos Reyes vs. administration of

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Rules indispensable to decentralization. Because of this, there is

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and services. The national government is, thus, not

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