SECOND DIVISION

[G.R. No. 106296. July 5, 1996]

ISABELO T. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES, respondents.* DECISION
MENDOZA, J.:

This is a petition to review the decision of the Court of Appeals dated July 15, 1992, the dispositive portion of which reads: WHEREFORE, the present petition is partially granted. The questioned Orders and writs directing (1) reinstatement of respondent Isabelo T. Crisostomo to the position of President of the Polytechnic University of the Philippines, and (2) payment of salaries and benefits which said respondent failed to receive during his suspension insofar as such payment includes those accruing after the abolition of the PCC and its transfer to the PUP, are hereby set aside. Accordingly, further proceedings consistent with this decision may be taken by the court a quo to determine the correct amounts due and payable to said respondent by the said university. The background of this case is as follows: Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce (PCC), having been appointed to that position by the President of the Philippines on July 17, 1974. During his incumbency as president of the PCC, two administrative cases were filed against petitioner for illegal use of government vehicles, misappropriation of construction materials belonging to the college, oppression and harassment, grave misconduct, nepotism and dishonesty. The administrative cases, which were filed with the Office of the President, were subsequently referred to the Office of the Solicitor General for investigation. Charges of violations of R.A. No. 3019, 3 (e) and R.A. No. 992, 20-21 and R.A. No. 733, 14 were likewise filed against him with the Office of Tanodbayan.

On June 14, 1976, three (3) informations for violation of Sec. 3 (e) of the Anti-Graft and Corrupt Practices Act (R.A. No. 3019, as amended) were filed against him. The informations alleged that he appropriated for himself a bahay kubo, which was intended for the College, and construction materials worth P250,000.00, more or less. Petitioner was also accused of using a driver of the College as his personal and family driver.[1] On October 22, 1976, petitioner was preventively suspended from office pursuant to R.A. No. 3019, 13, as amended. In his place Dr. Pablo T. Mateo, Jr. was designated as officer-in-charge on November 10, 1976, and then as Acting President on May 13, 1977. On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos, CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS. Mateo continued as the head of the new University. On April 3, 1979, he was appointed Acting President and on March 28, 1980, as President for a term of six (6) years. On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment acquitting petitioner of the charges against him. The dispositive portion of the decision reads: WHEREFORE, the Court finds the accused, Isabelo T. Crisostomo, not guilty of the violations charged in all these three cases and hereby acquits him therefrom, with costs de oficio. The bail bonds filed by said accused for his provisional liberty are hereby cancelled and released. Pursuant to the provisions of Section 13, R.A. No. 3019, as amended, otherwise known as The Anti-Graft and Corrupt Practices Act, and under which the accused has been suspended by this Court in an Order dated October 22, 1976, said accused is hereby ordered reinstated to the position of President of the Philippine College of Commerce, now known as the Polytechnic University of the Philippines, from which he has been suspended. By virtue of said reinstatement, he is entitled to receive the salaries and other benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him. The bail bonds filed by the accused for his provisional liberty in these cases are hereby cancelled and released. SO ORDERED.

The cases filed before the Tanodbayan (now the Ombudsman) were likewise dismissed on August 8, 1991 on the ground that they had become moot and academic. On the other hand, the administrative cases were dismissed for failure of the complainants to prosecute them. On February 12, 1992, petitioner filed with the Regional Trial Court a motion for execution of the judgment, particularly the part ordering his reinstatement to the position of president of the PUP and the payment of his salaries and other benefits during the period of suspension. The motion was granted and a partial writ of execution was issued by the trial court on March 6, 1992. On March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor as acting president of the PUP, following the expiration of the term of office of Dr. Nemesio Prudente, who had succeeded Dr. Mateo. Petitioner was one of the five nominees considered by the President of the Philippines for the position. On April 24, 1992, the Regional Trial Court, through respondent Judge Teresita Dy-Liaco Flores, issued another order, reiterating her earlier order for the reinstatement of petitioner to the position of PUP president. A writ of execution, ordering the sheriff to implement the order of reinstatement, was issued. In his return dated April 28, 1992, the sheriff stated that he had executed the writ by installing petitioner as President of the PUP, although Dr. Gellor did not vacate the office as he wanted to consult with the President of the Philippines first. This led to a contempt citation against Dr. Gellor. A hearing was set on May 7, 1992. On May 5, 1992, petitioner also moved to cite Department of Education, Culture and Sports Secretary Isidro Cario in contempt of court. Petitioner assumed the office of president of the PUP. On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and prohibition (CA G.R. No. 27931), assailing the two orders and the writs of execution issued by the trial court. It also asked for a temporary restraining order. On June 25, 1992, the Court of Appeals issued a temporary restraining order, enjoining petitioner to cease and desist from acting as president of the PUP pursuant to the reinstatement orders of the trial court, and enjoining further proceedings in Criminal Cases Nos. VI-2329-2331. On July 15, 1992, the Seventh Division of the Court of Appeals rendered a decision,[2] the dispositive portion of which is set forth at the beginning of this opinion. Said decision set aside the orders and writ of reinstatement issued by the trial court. The payment of salaries and benefits to petitioner accruing

after the conversion of the PCC to the PUP was disallowed. Recovery of salaries and benefits was limited to those accruing from the time of petitioners suspension until the conversion of the PCC to the PUP. The case was remanded to the trial court for a determination of the amounts due and payable to petitioner. Hence this petition. Petitioner argues that P.D. No. 1341, which converted the PCC into the PUP, did not abolish the PCC. He contends that if the law had intended the PCC to lose its existence, it would have specified that the PCC was being abolished rather than converted and that if the PUP was intended to be a new institution, the law would have said it was being created. Petitioner claims that the PUP is merely a continuation of the existence of the PCC, and, hence, he could be reinstated to his former position as president. In part the contention is well taken, but, as will presently be explained, reinstatement is no longer possible because of the promulgation of P.D. No. 1437 by the President of the Philippines on June 10, 1978. P.D. No. 1341 did not abolish, but only changed, the former Philippine College of Commerce into what is now the Polytechnic University of the Philippines, in the same way that earlier in 1952, R.A. No. 778 had converted what was then the Philippine School of Commerce into the Philippine College of Commerce. What took place was a change in academic status of the educational institution, not in its corporate life. Hence the change in its name, the expansion of its curricular offerings, and the changes in its structure and organization. As petitioner correctly points out, when the purpose is to abolish a department or an office or an organization and to replace it with another one, the lawmaking authority says so. He cites the following examples: E.O. No. 709: 1. There is hereby created a Ministry of Trade and Industry, hereinafter referred to as the Ministry. The existing Ministry of Trade established pursuant to Presidential Decree No. 721 as amended, and the existing Ministry established pursuant to Presidential Decree No. 488 as amended, are abolished together with their services, bureaus and similar agencies, regional offices, and all other entities under their supervision and control. . . . E.O. No. 710:

 1. There is hereby created a Ministry of Public Works and Highways, hereinafter referred to as the Ministry. The existing Ministry of Public Works established pursuant to Executive Order No. 546 as amended, and the existing Ministry of Public Highways established pursuant to Presidential Decree No. 458 as amended, are abolished together with their services, bureaus and similar agencies, regional offices, and all other entities within their supervision and control. . . . R.A. No. 6975: 13. Creation and Composition. - A National Police Commission, hereinafter referred to as the Commission, is hereby created for the purpose of effectively discharging the functions prescribed in the Constitution and provided in this Act. The Commission shall be a collegial body within the Department. It shall be composed of a Chairman and four (4) regular commissioners, one (1) of whom shall be designated as Vice-Chairman by the President. The Secretary of the Department shall be the exofficio Chairman of the Commission, while the Vice-Chairman shall act as the executive officer of the Commission. xxx xxx xxx

90. Status of Present NAPOLCOM, PC-INP. - Upon the effectivity of this Act, the present National Police Commission, and the Philippine Constabulary-Integrated National Police shall cease to exist. The Philippine Constabulary, which is the nucleus of the integrated Philippine Constabulary-Integrated National Police, shall cease to be a major service of the Armed Forces of the Philippines. The Integrated National Police, which is the civilian component of the Philippine ConstabularyIntegrated National Police, shall cease to be the national police force and in lieu thereof, a new police force shall be established and constituted pursuant to this Act. In contrast, P.D. No. 1341, provides: 1. The present Philippine College of Commerce is hereby converted into a university to be known as the Polytechnic University of the Philippines, hereinafter referred to in this Decree as the University. As already noted, R.A. No. 778 earlier provided: 1. The present Philippine School of Commerce, located in the City of Manila, Philippines, is hereby granted full college status and converted into the Philippine College of Commerce, which will offer not only its present one-year and two-year vocational commercial curricula, the latter leading to the titles of Associate in Business Education and/or Associate in Commerce, but also four-year courses leading

to the degrees of Bachelor of Science in Business in Education and Bachelor of Science in Commerce, and five-year courses leading to the degrees of Master of Arts in Business Education and Master of Arts in Commerce, respectively. The appellate court ruled, however, that the PUP and the PCC are not one and the same institution but two different entities and that since petitioner Crisostomos term was coterminous with the legal existence of the PCC, petitioners term expired upon the abolition of the PCC. In reaching this conclusion, the Court of Appeals took into account the following: a) After respondent Crisostomos suspension, P.D. No. 1341 (entitled CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS) was issued on April 1, 1978. This decree explicitly provides that PUPs objectives and purposes cover not only PCCs offering of programs in the field of commerce and business administration but also programs in other polytechnic areas and in other fields such as agricultu re, arts and trades and fisheries . . . (section 2). Being a university, PUP was conceived as a bigger institution absorbing, merging and integrating the entire PCC and other national schools as may be transferred to this new state university. b) The manner of selection and appointment of the university head is substantially different from that provided by the PCC Charter. The PUP President shall be appointed by the President of the Philippines upon recommendation of the Secretary of Education and Culture after consultation with the University Board of Regents (section 4, P.D. 1341). The President of PCC, on the other hand, was appointed by the President of the Philippines upon recommendation of the Board of Trustees (Section 4, R.A. 778). c) The composition of the new universitys Board of Regents is likewise different from that of the PCC Board of Trustees (which included the chairman of the Senate Committee on Education and the chairman of the House Committee on Education, the President of the PCC Alumni Association as well as the President of the Chamber of Commerce of the Philippines). Whereas, among others, the NEDA Director-General, the Secretary of Industry and the Secretary of Labor are members of the PUP Board of Regents. (Section 6, P.D. 1341). d) The decree moreover transferred to the new university all the properties including equipment and facilities:

. . . owned by the Philippine College of Commerce and such other National Schools as may be integrated . . . including their obligations and appropriations . . . (Sec. 12; Italics supplied).[3] But these are hardly indicia of an intent to abolish an existing institution and to create a new one. New course offerings can be added to the curriculum of a school without affecting its legal existence. Nor will changes in its existing structure and organization bring about its abolition and the creation of a new one. Only an express declaration to that effect by the lawmaking authority will. The Court of Appeals also cites the provision of P.D. No. 1341 as allegedly implying the abolition of the PCC and the creation of a new one the PUP in its stead: 12. All parcels of land, buildings, equipment and facilities owned by the Philippine College of Commerce and such other national schools as may be integrated by virtue of this decree, including their obligations and appropriations thereof, shall stand transferred to the Polytechnic University of the Philippines, provided, however, that said national schools shall continue to receive their corresponding shares from the special education fund of the municipal/provincial/city government concerned as are now enjoyed by them in accordance with existing laws and/or decrees. The law does not state that the lands, buildings and equipment owned by the PCC were being transferred to the PUP but only that they stand transferred to it. Stand transferred simply means, for example, that lands transferred to the PCC were to be understood as transferred to the PUP as the new name of the institution. But the reinstatement of petitioner to the position of president of the PUP could not be ordered by the trial court because on June 10, 1978, P.D. No. 1437 had been promulgated fixing the term of office of presidents of state universities and colleges at six (6) years, renewable for another term of six (6) years, and authorizing the President of the Philippines to terminate the terms of incumbents who were not reappointed. P.D. No. 1437 provides: 6. The head of the university or college shall be known as the President of the university or college. He shall be qualified for the position and appointed for a term of six (6) years by the President of the Philippines upon recommendation of the Secretary of Education and Culture after consulting with the Board which may be renewed for another term upon recommendation of the Secretary of Education and Culture after consulting the Board. In case of vacancy by reason of death, absence or resignation, the Secretary of Education and Culture shall have the authority to

designate an officer in charge of the college or university pending the appointment of the President. The powers and duties of the President of the university or college, in addition to those specifically provided for in this Decree shall be those usually pertaining to the office of the president of a university or college. 7. The incumbent president of a chartered state college or university whose term may be terminated according to this Decree, shall be entitled to full retirement benefits: provided that he has served the government for at least twenty (20) years; and provided, further that in case the number of years served is less than 20 years, he shall be entitled to one month pay for every year of service. In this case, Dr. Pablo T. Mateo Jr., who had been acting president of the university since April 3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, with the result that petitioners term was cut short. In accordance with 7 of the law, therefore, petitioner became entitled only to retirement benefits or the payment of separation pay. Petitioner must have recognized this fact, that is why in 1992 he asked then President Aquino to consider him for appointment to the same position after it had become vacant in consequence of the retirement of Dr. Prudente. WHEREFORE, the decision of the Court of Appeals is MODIFIED by SETTING ASIDE the questioned orders of the Regional Trial Court directing the reinstatement of the petitioner Isabelo T. Crisostomo to the position of president of the Polytechnic University of the Philippines and the payment to him of salaries and benefits which he failed to receive during his suspension in so far as such payment would include salaries accruing after March 28, 1980 when petitioner Crisostomos term was terminated. Further proceedings in accordance with this decision may be taken by the trial court to determine the amount due and payable to petitioner by the university up to March 28, 1980. SO ORDERED.

EN BANC

[G.R. No. 115844. August 15, 1997]

CESAR G. VIOLA, Chairman, Bgy. 167, Zone 15, District II, Manila, petitioner, vs. HON. RAFAEL M. ALUNAN III, Secretary, DILG, ALEX L. DAVID, President/Secretary General, National Liga ng mga Barangay, LEONARDO L. ANGAT, President, City of Manila, Liga ng mga Barangay,respondents. DECISION
MENDOZA, J.:

This is a petition for prohibition challenging the validity of Art. III, 1-2 of the Revised Implementing Rules and Guidelines for the General Elections of the Liga ng mga Barangay Officers so far as they provide for the election of first, second and third vice presidents and for auditors for the National Liga ng mga Barangay and its chapters. The provisions in question read: 1. Local Liga Chapters. The Municipal, City, Metropolitan and Provincial Chapters shall directly elect the following officers and directors to constitute their respective Board of Directors, namely: 1.1 President 1.2 Executive Vice-President 1.3 First Vice-President 1.4 Second Vice-President 1.5 Third Vice-President 1.6 Auditor 1.7 Five (5) Directors 2. National Liga. The National Liga shall directly elect the following officers and directors to constitute the National Liga Board of Directors namely: 2.1 President 2.2 Executive Vice-President 2.3 First Vice-President 2.4 Second Vice-President 2.5 Third Vice-President

2.6 Secretary General 2.7 Auditor 2.8 Five (5) Directors Petitioner Cesar G. Viola brought this action as barangay chairman of Bgy. 167, Zone 15, District II, Manila against then Secretary of Interior and Local Government Rafael M. Alunan III, Alex L. David, president/secretary general of the National Liga ng mga Barangay, and Leonardo L. Angat, president of the City of Manila Liga ng mga Barangay, to restrain them from carrying out the elections for the questioned positions on July 3, 1994. Petitioners contention is that the positions in question are in excess of those provided in the Local Government Code (R.A. No. 7160), 493 of which mentions as elective positions only those of president, vice president, and five members of the board of directors in each chapter at the municipal, city, provincial, metropolitan political subdivision, and national levels. Petitioner argues that, in providing for the positions of first, second and third vice presidents and auditor for each chapter, 1-2 of the Implementing Rules expand the number of positions authorized in 493 of the Local Government Code in violation of the principle that implementing rules and regulations cannot add or detract from the provisions of the law they are designed to implement. Although the elections are now over, the issues raised in this case are likely to arise again in future elections of officers of the Liga ng mga Barangay. For one thing, doubt may be cast on the validity of the acts of those elected. For another, this comes within the rule that courts will decide a question which is otherwise moot and academic if it is capable of repetition, yet evading review.
[1]

We will therefore proceed to the merits of this case. Petitioners contention that the additional positions in question have been created without authority of law is untenable. To begin with, the creation of these positions was actually made in the Constitution and By-laws of the Liga ng Mga Barangay, which was adopted by the First Barangay National Assembly on January 11, 1994. This Constitution and By-laws provide in pertinent parts: ARTICLE VI OFFICERS AND DIRECTORS

Section 1. Organization of Board of Directors of Local Chapters. - The chapters shall directly elect their respective officers, namely, a president; executive vice president; first, second, and third vice presidents; auditor; and five (5) members to constitute the Board of Directors of their respective chapter. Thereafter, the Board shall appoint a secretary, treasurer, and public relations officer from among the five (5) members, with the rest serving as Directors of Board. The Board may create such other positions as it may deem necessary for the management of the chapter. Pending elections of the president of the municipal, city, provincial and metropolitan chapters of the Liga, the incumbent presidents of the ABCs of the municipality, city province and Metropolitan Manila shall continue to act as presidents of the corresponding Liga chapters, subject to the provisions of the Local Government Code of 1991. Section 2. Organization of Board of Directors of the National Liga. - The National Liga shall be composed of the presidents of the provincial Liga chapters, highly urbanized and independent component city chapters, and the metropolitan chapter who shall directly elect their respective officers, namely, a president, executive vice president; first, second, and third vice president, auditor, secretary general; and five (5) members to constitute the Board of Directors of the National Liga. Thereafter, the Board shall appoint a treasurer, secretary and public relations officers from among the five (5) members with the rest serving as directors of the Board. The Board may create such other positions as it may deem necessary for the management of the National Liga. Pending election of Secretary-General, the incumbent president of the Pambansang Katipunan ng mga Barangay (PKB) shall act as the SecretaryGeneral. The incumbent members of the Board of the PKB, headed by the SecretaryGeneral who continue to be presidents of the respective chapters of the Liga to which they belong, shall constitute a committee to exercise the powers and duties of the National Liga and with the primordial responsibility of drafting a Constitution and By-Laws needed for the organization of the Liga as a whole pursuant to the provisions of the Local Government Code of 1991. The post of executive vice president is in reality that of the vice president in 493 of the LGC, so that the only additional positions created for each chapter in the Constitution and By-laws are those of first, second and third vice presidents and auditor. Contrary to petitioners contention, the creation of the additional positions is authorized by the LGC which provides as follows: 493. Organization. The liga at the municipal, city, provincial, metropolitan political subdivision, and national levels directly elect a president, a vice-president, and five (5) members of the board of directors. The board shall appoint its secretary and treasurer and create such other positions as it may deem necessary for the management of the chapter. A secretary-general shall be elected from among the members of the national liga and shall be charged with the overall operation of the

liga on the national level. The board shall coordinate the activities of the chapters of the liga. (emphasis added) This provision in fact requires and not merely authorizes the board of directors to create such other positions as it may deem necessary for the management of the chapter and belies petitioners claim that said provision (493) limits the officers of a chapter to the president, vice president, five members of the board of directors, secretary, and treasurer. That Congress can delegate the power to create positions such as these has been settled by our decisions upholding the validity of reorganization statutes authorizing the President of the Philippines to create, abolish or merge offices in the executive department. The question is whether, in making a delegation of this power to the board of directors of each chapter of the Liga ng Mga Barangay, Congress provided a sufficient standard so that, in the phrase of Justice Cardozo, administrative discretion may be canalized within proper banks that keep it from overflowing.
[2] [3]

Statutory provisions authorizing the President of the Philippines to make reforms and changes in government owned or controlled corporations for the purpose of promoting simplicity, economy and efficiency in their operations and empowering the Secretary of Education to prescribe minimum standards of adequate and efficient instruction in private schools and colleges have been found to be sufficient for the purpose of valid delegation. Judged by these cases, we hold that 493 of the Local Government Code, in directing the board of directors of the liga to create such other positions as may be deemed necessary for the management of the chapter[s], embodies a fairly intelligible standard. There is no undue delegation of power by Congress.
[4] [5]

Justice Davide contends in dissent, however, that only the Board of Directors and not any other body is vested with the power to create other positions as may be necessary for the management of the chapter and that, in any case, there is no showing that the Barangay National Assembly was authorized to draft the Constitution and By-laws because he is unable to find any law creating it. The Barangay National Assembly is actually the Pambansang Katipunan ng mga Barangay (PKB) referred to in Art. 210(f)(2)(3) of the Rules and Regulations Implementing the Local Government Code of 1991, which Justice Davides dissent cites. It will be helpful to quote these provisions: (2) A secretary-general shall be elected from among the members of the national liga who shall be responsible for the overall operation of the liga. Pending election of a secretary-general under this rule, the incumbent president of the pambansang katipunan ng mga barangay shall act as the secretary-general. The incumbent

members of the board of the pambansang katipunan ng mga barangay, headed by the secretary-general, who continue to be presidents of the respective chapters of the liga to which they belong, shall constitute a committee to exercise the powers and duties of the national liga and draft or amend the constitution and by-laws of the national liga to conform to the provisions of this Rule. (3) The board of directors shall coordinate the activities of the various chapters of the liga. (Emphasis added) Pursuant to these provisions, pending the organization of the Liga ng mga Barangay, the board of directors of the PKB was constituted into a committee, headed by the PKB president, who acted as secretary general, with a two-fold mandate: [1] exercise the powers and duties of the national liga and [2] draft or amend the constitution and by-laws of the national liga to conform to the provisions of this Rule. The board of directors of the PKB, functioning in place of the board of directors of the National Liga ng mga Barangay, exercised one of these powers of the National Liga board, namely, to create additional positions which it deemed necessary for the management of a chapter. There is therefore no basis for the claim that because the power to create additional positions in the Liga or its chapters is vested only in the board of directors the exercise of this power by the Barangay National Assembly is unauthorized and illegal and the positions created are void. The Barangay National Assembly was actually the Pambansang Katipunan ng mga Barangay or PKB. Pending the organization of the Liga ng mga Barangay, it served as the Liga. But it is contended in the dissent that Section 493 of the LGC . . . vests the power to create additional positions in the Board of Directors of the chapter. The implication seems to be that the board of the directors at the national level did not have that power. It is necessary to consider the organizational structure of the Liga ng mga Barangay as provided in the LGC, as follows: 492. Representation, Chapters, National Liga. - Every barangay shall be represented in said liga by the punong barangay, or in his absence or incapacity, by a sanggunian member duly elected for the purpose among its members, who shall attend all meetings or deliberations called by the different chapters of the liga. The liga shall have chapters at the municipal, city, provincial and metropolitan political subdivision levels.

The municipal and city chapters of the liga shall be composed of the barangay representatives of municipal and city barangays, respectively. The duly elected presidents of component municipal and city chapters shall constitute the provincial chapter or the metropolitan political subdivision chapter. The duly elected presidents of highly-urbanized cities, provincial chapters, the Metropolitan Manila chapter and metropolitan political subdivision chapters shall constitute the National Liga ng mga Barangay. 493. Organization. The liga at the municipal, city, provincial, metropolitan political subdivision, and national levels directly elect a president, a vice-president, and five (5) members of the board of directors. The board shall appoint its secretary and treasurer and create such other positions as it may deem necessary for the management of the chapter. A secretary-general shall be elected from among the members of the national liga and shall be charged with the overall operation of the liga on the national level. The board shall coordinate the activities of the chapters of the liga. (Emphasis added) While the board of directors of a local chapter can create additional positions to provide for the needs of the chapter, the board of directors of the National Liga must be deemed to have the power to create additional positions not only for its management but also for that of all the chapters at the municipal, city, provincial and metropolitan political subdivision levels. Otherwise the National Liga would be no different from the local chapters. There would then be only so many local chapters without a national one, when what is contemplated in the above-quoted provisions of the LGC is that there should be one Liga ng mga Barangay with local chapters at all levels of local government units. The dissent, by denying to the board of directors at the National Liga the power to create additional positions in the local chapters, would reduce such board to a board of a local chapter. The fact is that 493 grants the power to create positions not only to the boards of the local chapters but to the board of the Liga at the national level as well. Indeed what was done in the Constitution and By-laws of their liga was to create additional positions in each chapter, whether national or local, without however precluding the boards of directors of the chapters as well as that of the national liga from creating other positions for their peculiar needs. The creation by the board of the National Liga of the positions of first, second and third vice presidents, auditors and public relations officers was intended to provide uniform officers for the various chapters in line with the mandate in Art. 210(g)(2) of the Rules and Regulations Implementing the Local

Government Code of 1991 to the Barangay National Assembly to formulate uniform constitution and by-laws applicable to the national liga and all local chapters. The various chapters could have different minor officers depending on their local needs, but they must have the same major elective officers, meaning to say, the additional vice presidents and auditors. The dissent further argues that, following the rule of ejusdem generis, what may be created as additional positions can only be appointive ones because the positions of secretary and treasurer are appointive positions. The rule might apply if what is involved is the appointment of other officers. But what we are dealing with in this case is the creation of additional positions. Section 493 actually gives the board the power to [1] appoint its secretary and treasurer and [2] create such other positions as it may deem necessary for the management of the chapter. The additional positions to be created need not therefore be appointive positions. Nor is it correct to say that 493, in providing that additional positions to be created must be those which are deemed necessary for the management of the chapter, contemplates only appointive positions. Management positions are not necessarily limited to appointive positions. Elective officers, such as the president and vice president, can be expected to be involved in the general administration or management of the chapter. Hence, the creation of other elective positions which may be deemed necessary for the management of the chapter is within the purview of 493. WHEREFORE, the petition for prohibition is DISMISSED for lack of merit. SO ORDERED.

EN BANC
LOUIS BAROK C. BIRAOGO, Petitioner, - versus THE PHILIPPINE TRUTH COMMISSION OF 2010, Respondent. x-----------------------x REP. EDCEL C. LAGMAN, REP. RODOLFO B. ALBANO, JR., REP. SIMEON A. DATUMANONG, and REP. ORLANDO B. FUA, SR., Petitioners, G.R. No. 193036 Present: CORONA, C.J., CARPIO, CARPIO MORALES, VELASCO, JR., NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, ABAD, VILLARAMA, JR., PEREZ, MENDOZA, and SERENO, JJ. Promulgated: December 7, 2010 G.R. No. 192935

- versus -

EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. and DEPARTMENT OF BUDGET AND MANAGEMENT SECRETARY FLORENCIO B. ABAD, Respondents.

x -------------------------------------------------------------------------------------- x

DECISION
MENDOZA, J.:
When the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. --- Justice Jose P. Laurel[1] The role of the Constitution cannot be overlooked. It is through the Constitution that the fundamental powers of government are established, limited and defined, and by which these powers are distributed among the several departments.[2] The Constitution is the basic and paramount law to which all other laws must conform and to which all persons, including the highest officials of the land, must defer.[3] Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be simply made to sway and accommodate the call of situations and much more tailor itself to the whims and caprices of government and the people who run it.[4] For consideration before the Court are two consolidated cases[5] both of which essentially assail the validity and constitutionality of Executive Order No. 1, dated July 30, 2010, entitled Creating the Philippine Truth Commission of 2010.

The first case is G.R. No. 192935, a special civil action for prohibition instituted by petitioner Louis Biraogo (Biraogo) in his capacity as a citizen and taxpayer. Biraogo assails Executive Order No. 1 for being violative of the legislative power of Congress under Section 1, Article VI of the Constitution[6] as it

usurps the constitutional authority of the legislature to create a public office and to appropriate funds therefor.[7] The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition filed by petitioners Edcel C. Lagman, Rodolfo B. Albano Jr., Simeon A. Datumanong, and Orlando B. Fua, Sr. (petitioners-legislators) as incumbent members of the House of Representatives. The genesis of the foregoing cases can be traced to the events prior to the historic May 2010 elections, when then Senator Benigno Simeon Aquino III declared his staunch condemnation of graft and corruption with his slogan, Kung walang corrupt, walang mahirap. The Filipino people, convinced of his sincerity and of his ability to carry out this noble objective, catapulted the good senator to the presidency. To transform his campaign slogan into reality, President Aquino found a need for a special body to investigate reported cases of graft and corruption allegedly committed during the previous administration. Thus, at the dawn of his administration, the President on July 30, 2010, signed Executive Order No. 1 establishing the Philippine Truth Commission of 2010 (Truth Commission). Pertinent provisions of said executive order read:
EXECUTIVE ORDER NO. 1 CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010 WHEREAS, Article XI, Section 1 of the 1987 Constitution of the Philippines solemnly enshrines the principle that a public office is a public trust and mandates that public officers and employees, who are servants of the people, must at all times be accountable to the latter, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice, and lead modest lives; WHEREAS, corruption is among the most despicable acts of defiance of this principle and notorious violation of this mandate; WHEREAS, corruption is an evil and scourge which seriously affects the political, economic, and social life of a nation; in a very special way it inflicts untold misfortune and misery on the poor, the marginalized and underprivileged sector of society;

WHEREAS, corruption in the Philippines has reached very alarming levels, and undermined the peoples trust and confidence in the Government and its institutions; WHEREAS, there is an urgent call for the determination of the truth regarding certain reports of large scale graft and corruption in the government and to put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to deter others from committing the evil, restore the peoples faith and confidence in the Government and in their public servants; WHEREAS, the Presidents battlecry during his campaign for the Presidency in the last elections kung walang corrupt, walang mahirap expresses a solemn pledge that if elected, he would end corruption and the evil it breeds; WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported cases of graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and secure justice for all; WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No. 292, otherwise known as the Revised Administrative Code of the Philippines, gives the President the continuing authority to reorganize the Office of the President. NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order: SECTION 1. Creation of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as the COMMISSION, which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people, committed by public officers and employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration; and thereafter recommend the appropriate action or measure to be taken thereon to ensure that the full measure of justice shall be served without fear or favor. The Commission shall be composed of a Chairman and four (4) members who will act as an independent collegial body. SECTION 2. Powers and Functions. The Commission, which shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough factfinding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration and thereafter submit its finding and recommendations to the President, Congress and the Ombudsman. In particular, it shall:

a) Identify and determine the reported cases of such graft and corruption which it will investigate; b) Collect, receive, review and evaluate evidence related to or regarding the cases of large scale corruption which it has chosen to investigate, and to this end require any agency, official or employee of the Executive Branch, including government-owned or controlled corporations, to produce documents, books, records and other papers; c) Upon proper request or representation, obtain information and documents from the Senate and the House of Representatives records of investigations conducted by committees thereof relating to matters or subjects being investigated by the Commission; d) Upon proper request and representation, obtain information from the courts, including the Sandiganbayan and the Office of the Court Administrator, information or documents in respect to corruption cases filed with the Sandiganbayan or the regular courts, as the case may be; e) Invite or subpoena witnesses and take their testimonies and for that purpose, administer oaths or affirmations as the case may be; f) Recommend, in cases where there is a need to utilize any person as a state witness to ensure that the ends of justice be fully served, that such person who qualifies as a state witness under the Revised Rules of Court of the Philippines be admitted for that purpose; g) Turn over from time to time, for expeditious prosecution, to the appropriate prosecutorial authorities, by means of a special or interim report and recommendation, all evidence on corruption of public officers and employees and their private sector co-principals, accomplices or accessories, if any, when in the course of its investigation the Commission finds that there is reasonable ground to believe that they are liable for graft and corruption under pertinent applicable laws; h) Call upon any government investigative or prosecutorial agency such as the Department of Justice or any of the agencies under it, and the Presidential AntiGraft Commission, for such assistance and cooperation as it may require in the discharge of its functions and duties; i) Engage or contract the services of resource persons, professionals and other personnel determined by it as necessary to carry out its mandate; j) Promulgate its rules and regulations or rules of procedure it deems necessary to effectively and efficiently carry out the objectives of this Executive Order and to ensure the orderly conduct of its investigations, proceedings and hearings, including the presentation of evidence; k) Exercise such other acts incident to or are appropriate and necessary in connection with the objectives and purposes of this Order.

SECTION 3. Staffing Requirements. x x x. SECTION 4. Detail of Employees. x x x. SECTION 5. Engagement of Experts. x x x SECTION 6. Conduct of Proceedings. x x x. SECTION 7. Right to Counsel of Witnesses/Resource Persons. x x x. SECTION 8. Protection of Witnesses/Resource Persons. x x x. SECTION 9. Refusal to Obey Subpoena, Take Oath or Give Testimony. Any government official or personnel who, without lawful excuse, fails to appear upon subpoena issued by the Commission or who, appearing before the Commission refuses to take oath or affirmation, give testimony or produce documents for inspection, when required, shall be subject to administrative disciplinary action. Any private person who does the same may be dealt with in accordance with law. SECTION 10. Duty to Extend Assistance to the Commission. x x x.

SECTION 11. Budget for the Commission. The Office of the President shall provide the necessary funds for the Commission to ensure that it can exercise its powers, execute its functions, and perform its duties and responsibilities as effectively, efficiently, and expeditiously as possible. SECTION 12. Office. x x x. SECTION 13. Furniture/Equipment. x x x. SECTION 14. Term of the Commission. The Commission shall accomplish its mission on or before December 31, 2012. SECTION 15. Publication of Final Report. x x x. SECTION 16. Transfer of Records and Facilities of the Commission. x x x. SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and corruption during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive Order.

SECTION 18. Separability Clause. If any provision of this Order is declared unconstitutional, the same shall not affect the validity and effectivity of the other provisions hereof. SECTION 19. Effectivity. This Executive Order shall take effect immediately. DONE in the City of Manila, Philippines, this 30th day of July 2010. (SGD.) BENIGNO S. AQUINO III By the President: (SGD.) PAQUITO N. OCHOA, JR. Executive Secretary

Nature of the Truth Commission As can be gleaned from the above-quoted provisions, the Philippine Truth Commission (PTC) is a mere ad hoc body formed under the Office of the President with theprimary task to investigate reports of graft and corruption committed by third-level public officers and employees, their co-principals, accomplices and accessories during the previous administration, and thereafter to submit its finding and recommendations to the President, Congress and the Ombudsman. Though it has been described as an independent collegial body, it is essentially an entity within the Office of the President Proper and subject to his control. Doubtless, it constitutes a public office, as an ad hoc body is one.[8] To accomplish its task, the PTC shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987. It is not, however, a quasi-judicial body as it cannot adjudicate, arbitrate, resolve, settle, or render awards in disputes between contending parties. All it can do is gather, collect and assess evidence of graft and corruption and make recommendations. It may have subpoena powers but it has no power to cite people in contempt, much less order their arrest. Although it is a fact-finding body, it cannot determine from such facts if probable cause exists as to warrant the filing of an information in our courts of law. Needless to state, it cannot impose criminal, civil or administrative penalties or sanctions.

The PTC is different from the truth commissions in other countries which have been created as official, transitory and non-judicial fact-finding bodies to establish the facts and context of serious violations of human rights or of international humanitarian law in a countrys past.[9] They are usually established by states emerging from periods of internal unrest, civil strife or authoritarianism to serve as mechanisms for transitional justice. Truth commissions have been described as bodies that share the following characteristics: (1) they examine only past events; (2) they investigate patterns of abuse committed over a period of time, as opposed to a particular event; (3) they are temporary bodies that finish their work with the submission of a report containing conclusions and recommendations; and (4) they are officially sanctioned, authorized or empowered by the State.[10] Commissions members are usually empowered to conduct research, support victims, and propose policy recommendations to prevent recurrence of crimes. Through their investigations, the commissions may aim to discover and learn more about past abuses, or formally acknowledge them. They may aim to prepare the way for prosecutions and recommend institutional reforms.[11] Thus, their main goals range from retribution to reconciliation. The Nuremburg and Tokyo war crime tribunals are examples of a retributory or vindicatory body set up to try and punish those responsible for crimes against humanity. A form of a reconciliatory tribunal is the Truth and Reconciliation Commission of South Africa, the principal function of which was to heal the wounds of past violence and to prevent future conflict by providing a cathartic experience for victims. The PTC is a far cry from South Africas model. The latter placed more emphasis on reconciliation than on judicial retribution, while the marching order of the PTC is the identification and punishment of perpetrators. As one writer[12] puts it:
The order ruled out reconciliation. It translated the Draconian code spelled out by Aquino in his inaugural speech: To those who talk about reconciliation, if they mean that they would

like us to simply forget about the wrongs that they have committed in the past, we have this to say: There can be no reconciliation without justice. When we allow crimes to go unpunished, we give consent to their occurring over and over again.

The Thrusts of the Petitions Barely a month after the issuance of Executive Order No. 1, the petitioners asked the Court to declare it unconstitutional and to enjoin the PTC from performing its functions. A perusal of the arguments of the petitioners in both cases shows that they are essentially the same. The petitioners-legislators summarized them in the following manner: (a) E.O. No. 1 violates the separation of powers as it arrogates the power of the Congress to create a public office and appropriate funds for its operation. (b) The provision of Book III, Chapter 10, Section 31 of the Administrative Code of 1987 cannot legitimize E.O. No. 1 because the delegated authority of the President to structurally reorganize the Office of the President to achieve economy, simplicity and efficiency does not include the power to create an entirely new public office which was hitherto inexistent like the Truth Commission. (c) E.O. No. 1 illegally amended the Constitution and pertinent statutes when it vested the Truth Commission with quasi -judicial powers duplicating, if not superseding, those of the Office of the Ombudsman created under the 1987 Constitution and the Department of Justice created under the Administrative Code of 1987. (d) E.O. No. 1 violates the equal protection clause as it selectively targets for investigation and prosecution officials and personnel of the previous administration as if corruption is their peculiar species even as it excludes those of the other administrations, past and present, who may be indictable. (e) The creation of the Philippine Truth Commission of 2010 violates the consistent and general international practice of four

decades wherein States constitute truth commissions to exclusively investigate human rights violations, which customary practice forms part of the generally accepted principles of international law which the Philippines is mandated to adhere to pursuant to the Declaration of Principles enshrined in the Constitution. (f) The creation of the Truth Commission is an exercise in futility, an adventure in partisan hostility, a launching pad for trial/conviction by publicity and a mere populist propaganda to mistakenly impress the people that widespread poverty will altogether vanish if corruption is eliminated without even addressing the other major causes of poverty. (g) The mere fact that previous commissions were not constitutionally challenged is of no moment because neither laches nor estoppel can bar an eventual question on the constitutionality and validity of an executive issuance or even a statute.[13] In their Consolidated Comment,[14] the respondents, through the Office of the Solicitor General (OSG), essentially questioned the legal standing of petitioners and defended the assailed executive order with the following arguments: 1] E.O. No. 1 does not arrogate the powers of Congress to create a public office because the Presidents executive power and power of control necessarily include the inherent power to conduct investigations to ensure that laws are faithfully executed and that, in any event, the Constitution, Revised Administrative Code of 1987 (E.O. No. 292), [15] Presidential Decree (P.D.) No. 1416[16] (as amended by P.D. No. 1772), R.A. No. 9970,[17] and settled jurisprudence that authorize the President to create or form such bodies. 2] E.O. No. 1 does not usurp the power of Congress to appropriate funds because there is no appropriation but a mere allocation of funds already appropriated by Congress. 3] The Truth Commission does not duplicate or supersede the functions of the Office of the Ombudsman (Ombudsman) and the

Department of Justice (DOJ),because it is a fact-finding body and not a quasi-judicial body and its functions do not duplicate, supplant or erode the latters jurisdiction. 4] The Truth Commission does not violate the equal protection clause because it was validly created for laudable purposes. The OSG then points to the continued existence and validity of other executive orders and presidential issuances creating similar bodies to justify the creation of the PTC such as Presidential Complaint and Action Commission (PCAC) by President Ramon B. Magsaysay, Presidential Committee on Administrative Performance Efficiency (PCAPE)by President Carlos P. Garcia and Presidential Agency on Reform and Government Operations (PARGO) by President Ferdinand E. Marcos.[18] From the petitions, pleadings, transcripts, and memoranda, the following are the principal issues to be resolved: 1. Whether or not the petitioners have the legal standing to file their respective petitions and question Executive Order No. 1; 2. Whether or not Executive Order No. 1 violates the principle of separation of powers by usurping the powers of Congress to create and to appropriate funds for public offices, agencies and commissions; 3. Whether or not Executive Order No. 1 supplants the powers of the Ombudsman and the DOJ; 4. Whether or not Executive Order No. 1 violates the equal protection clause; and 5. Whether or not petitioners are entitled to injunctive relief. Essential requisites for judicial review

Before proceeding to resolve the issue of the constitutionality of Executive Order No. 1, the Court needs to ascertain whether the requisites for a valid exercise of its power of judicial review are present. Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there must be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the standing to question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.[19] Among all these limitations, only the legal standing of the petitioners has been put at issue. Legal Standing of the Petitioners The OSG attacks the legal personality of the petitioners-legislators to file their petition for failure to demonstrate their personal stake in the outcome of the case. It argues that the petitioners have not shown that they have sustained or are in danger of sustaining any personal injury attributable to the creation of the PTC. Not claiming to be the subject of the commissions investigations, petitioners will not sustain injury in its creation or as a result of its proceedings.[20] The Court disagrees with the OSG in questioning the legal standing of the petitioners-legislators to assail Executive Order No. 1. Evidently, their petition primarily invokes usurpation of the power of the Congress as a body to which they belong as members. This certainly justifies their resolve to take the cudgels for Congress as an institution and present the complaints on the usurpation of their power and rights as members of the legislature before the Court. As held in Philippine Constitution Association v. Enriquez,[21]

To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of the powers of that institution. An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which can be questioned by a member of Congress. In such a case, any member of Congress can have a resort to the courts.

Indeed, legislators have a legal standing to see to it that the prerogative, powers and privileges vested by the Constitution in their office remain inviolate. Thus, they are allowed to question the validity of any official action which, to their mind, infringes on their prerogatives as legislators.[22] With regard to Biraogo, the OSG argues that, as a taxpayer, he has no standing to question the creation of the PTC and the budget for its operations.[23] It emphasizes that the funds to be used for the creation and operation of the commission are to be taken from those funds already appropriated by Congress. Thus, the allocation and disbursement of funds for the commission will not entail congressional action but will simply be an exercise of the Presidents power over contingent funds. As correctly pointed out by the OSG, Biraogo has not shown that he sustained, or is in danger of sustaining, any personal and direct injury attributable to the implementation of Executive Order No. 1. Nowhere in his petition is an assertion of a clear right that may justify his clamor for the Court to exercise judicial power and to wield the axe over presidential issuances in defense of the Constitution. The case of David v. Arroyo[24] explained the deep-seated rules on locus standi. Thus:
Locus standi is defined as a right of appearance in a court of justice on a given question. In private suits, standing is governed by the real-parties-in interest rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that every action must be prosecuted or defended in the name of the real party in interest. Accordingly, the real-party-in interest is the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit.

Succinctly put, the plaintiffs standing is based on his own right to the relief sought. The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a public right in assailing an allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any other person. He could be suing as a stranger, or in the category of a citizen, or taxpayer. In either case, he has to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a citizen or taxpayer. Case law in most jurisdictions now allows both citizen and taxpayer standing in public actions. The distinction was first laid down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayers suit is in a different category from the plaintiff in a citizens suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins: In matter of mere public right, howeverthe people are the real partiesIt is at least the right, if not the duty, of every citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be remedied. With respect to taxpayers suits, Terr v. Jordan held that the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to his injury cannot be denied. However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United State Supreme Court laid down the more stringent direct injury test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The same Court ruled that for a private individual to invoke the judicial power to determine the validity of an executive or legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of the public.

This Court adopted the direct injury test in our jurisdiction. In People v. Vera, it held that the person who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result. The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate, Manila Race Horse Trainers Association v. De la Fuente, Pascual v. Secretary of Public Works and Anti-Chinese League of the Philippines v. Felix. [Emphases included. Citations omitted]

Notwithstanding, the Court leans on the doctrine that the rule on standing is a matter of procedure, hence, can be relaxed for nontraditional plaintiffs like ordinary citizens, taxpayers, and legislators when the public interest so requires, such as when the matter is of transcendental importance, of overreaching significance to society, or of paramount public interest.[25] Thus, in Coconut Oil Refiners Association, Inc. v. Torres,[26] the Court held that in cases of paramount importance where serious constitutional questions are involved, the standing requirements may be relaxed and a suit may be allowed to prosper even where there is no direct injury to the party claiming the right of judicial review. In the firstEmergency Powers Cases,[27] ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders although they had only an indirect and general interest shared in common with the public. The OSG claims that the determinants of transcendental importance[28] laid down in CREBA v. ERC and Meralco[29] are non-existent in this case. The Court, however, finds reason in Biraogos assertion that the petition covers matters of transcendental importance to justify the exercise of jurisdiction by the Court. There are constitutional issues in the petition which deserve the attention of this Court in view of their seriousness, novelty and weight as precedents. Where the issues are of transcendental and paramount importance not only to the public but also to the Bench and the Bar, they should be resolved for the guidance of all.[30] Undoubtedly, the Filipino people are more than interested to know the status of the Presidents first effort to bring about a promised change to the country. The Court takes cognizance of the petition not due to overwhelming political

undertones that clothe the issue in the eyes of the public, but because the Court stands firm in its oath to perform its constitutional duty to settle legal controversies with overreaching significance to society. Power of the President to Create the Truth Commission In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth Commission is a public office and not merely an adjunct body of the Office of the President.[31]Thus, in order that the President may create a public office he must be empowered by the Constitution, a statute or an authorization vested in him by law. According to petitioner, such power cannot be presumed[32] since there is no provision in the Constitution or any specific law that authorizes the President to create a truth commission.[33] He adds that Section 31 of the Administrative Code of 1987, granting the President the continuing authority to reorganize his office, cannot serve as basis for the creation of a truth commission considering the aforesaid provision merely uses verbs such as reorganize, transfer, consolidate, merge, and abolish.[34] Insofar as it vests in the President the plenary power to reorganize the Office of the President to the extent of creating a public office, Section 31 is inconsistent with the principle of separation of powers enshrined in the Constitution and must be deemed repealed upon the effectivity thereof.[35] Similarly, in G.R. No. 193036, petitioners-legislators argue that the creation of a public office lies within the province of Congress and not with the executive branch of government. They maintain that the delegated authority of the President to reorganize under Section 31 of the Revised Administrative Code: 1) does not permit the President to create a public office, much less a truth commission; 2) is limited to the reorganization of the administrative structure of the Office of the President; 3) is limited to the restructuring of the internal organs of the Office of the President Proper, transfer of functions and transfer of agencies; and 4) only to achieve simplicity, economy and efficiency.[36] Such continuing authority of the President to reorganize his office is limited, and by issuing Executive Order No. 1, the President overstepped the limits of this delegated authority. The OSG counters that there is nothing exclusively legislative about the creation by the President of a fact-finding body such as a truth commission.

Pointing to numerous offices created by past presidents, it argues that the authority of the President to create public offices within the Office of the President Proper has long been recognized.[37]According to the OSG, the Executive, just like the other two branches of government, possesses the inherent authority to create factfinding committees to assist it in the performance of its constitutionally mandated functions and in the exercise of its administrative functions.[38] This power, as the OSG explains it, is but an adjunct of the plenary powers wielded by the President under Section 1 and his power of control under Section 17, both of Article VII of the Constitution.[39] It contends that the President is necessarily vested with the power to conduct fact-finding investigations, pursuant to his duty to ensure that all laws are enforced by public officials and employees of his department and in the exercise of his authority to assume directly the functions of the executive department, bureau and office, or interfere with the discretion of his officials.[40] The power of the President to investigate is not limited to the exercise of his power of control over his subordinates in the executive branch, but extends further in the exercise of his other powers, such as his power to discipline subordinates,[41] his power for rule making, adjudication and licensing purposes[42] and in order to be informed on matters which he is entitled to know.[43] The OSG also cites the recent case of Banda v. Ermita,[44] where it was held that the President has the power to reorganize the offices and agencies in the executive department in line with his constitutionally granted power of control and by virtue of a valid delegation of the legislative power to reorganize executive offices under existing statutes. Thus, the OSG concludes that the power of control necessarily includes the power to create offices. For the OSG, the President may create the PTC in order to, among others, put a closure to the reported large scale graft and corruption in the government.[45] The question, therefore, before the Court is this: Does the creation of the PTC fall within the ambit of the power to reorganize as expressed in Section 31 of the Revised Administrative Code? Section 31 contemplates reorganization as limited by the following functional and structural lines: (1) restructuring the

internal organization of the Office of the President Proper by abolishing, consolidating or merging units thereof or transferring functions from one unit to another; (2) transferring any function under the Office of the President to any other Department/Agency or vice versa; or (3) transferring any agency under the Office of the President to any other Department/Agency or vice versa. Clearly, the provision refers to reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. These point to situations where a body or an office is already existent but a modification or alteration thereof has to be effected. The creation of an office is nowhere mentioned, much less envisioned in said provision. Accordingly, the answer to the question is in the negative. To say that the PTC is borne out of a restructuring of the Office of the President under Section 31 is a misplaced supposition, even in the plainest meaning attributable to the term restructure an alteration of an existing structure. Evidently, the PTC was not part of the structure of the Office of the President prior to the enactment of Executive Order No. 1. As held in Buklod ng Kawaning EIIB v. Hon. Executive Secretary,[46]
But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. We must not lose sight of the very source of the power that which constitutes an express grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), "the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President." For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President. In Canonizado v. Aguirre [323 SCRA 312 (2000)], we ruled that reorganization "involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions." It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the Department of Finance. It falls under the Office of the President. Hence, it is

subject to the Presidents continuing authority to reorganize. [Emphasis Supplied]

In the same vein, the creation of the PTC is not justified by the Presidents power of control. Control is essentially the power to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former with that of the latter.[47] Clearly, the power of control is entirely different from the power to create public offices. The former is inherent in the Executive, while the latter finds basis from either a valid delegation from Congress, or his inherent duty to faithfully execute the laws. The question is this, is there a valid delegation of power from Congress, empowering the President to create a public office? According to the OSG, the power to create a truth commission pursuant to the above provision finds statutory basis under P.D. 1416, as amended by P.D. No. 1772.[48]The said law granted the President the continuing authority to reorganize the national government, including the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities, transfer appropriations, and to standardize salaries and materials. This decree, in relation to Section 20, Title I, Book III of E.O. 292 has been invoked in several cases such as Larin v. Executive Secretary.[49] The Court, however, declines to recognize P.D. No. 1416 as a justification for the President to create a public office. Said decree is already stale, anachronistic and inoperable. P.D. No. 1416 was a delegation to then President Marcos of the authority to reorganize the administrative structure of the national government including the power to create offices and transfer appropriations pursuant to one of the purposes of the decree, embodied in its last Whereas clause:
WHEREAS, the transition towards the parliamentary form of government will necessitate flexibility in the organization of the national government.

Clearly, as it was only for the purpose of providing manageability and resiliency during the interim, P.D. No. 1416, as amended by P.D. No. 1772, became functus oficioupon the convening of the First Congress, as expressly provided in Section 6, Article XVIII of the 1987 Constitution. In fact, even the Solicitor General agrees with this view. Thus:
ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was enacted was the last whereas clause of P.D. 1416 says it was enacted to prepare the transition from presidential to parliamentary. Now, in a parliamentary form of government, the legislative and executive powers are fused, correct? SOLICITOR GENERAL CADIZ: Yes, Your Honor.

ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416 was issued. Now would you agree with me that P.D. 1416 should not be considered effective anymore upon the promulgation, adoption, ratification of the 1987 Constitution. SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.] 1416, Your Honor. ASSOCIATE JUSTICE CARPIO: The power of the President to reorganize the entire National Government is deemed repealed, at least, upon the adoption of the 1987 Constitution, correct. SOLICITOR GENERAL CADIZ: Yes, Your Honor.[50]

While the power to create a truth commission cannot pass muster on the basis of P.D. No. 1416 as amended by P.D. No. 1772, the creation of the PTC finds justification under Section 17, Article VII of the Constitution, imposing upon the President the duty to ensure that the laws are faithfully executed. Section 17 reads:
Section 17. The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the laws be faithfully executed. (Emphasis supplied).

As correctly pointed out by the respondents, the allocation of power in the three principal branches of government is a grant of all powers inherent in them. The Presidents power to conduct investigations to aid him in ensuring the faithful execution of laws in this case, fundamental laws on public accountability and transparency is inherent in the Presidents powers as the Chief Executive. That the authority of the President to conduct investigations and to create bodies to execute this power is not explicitly mentioned in the Constitution or in statutes does not mean that he is bereft of such authority.[51] As explained in the landmark case of Marcos v. Manglapus:[52]
x x x. The 1987 Constitution, however, brought back the presidential system of government and restored the separation of legislative, executive and judicial powers by their actual distribution among three distinct branches of government with provision for checks and balances. It would not be accurate, however, to state that "executive power" is the power to enforce the laws, for the President is head of state as well as head of government and whatever powers inhere in such positions pertain to the office unless the Constitution itself withholds it. Furthermore, the Constitution itself provides that the execution of the laws is only one of the powers of the President. It also grants the President other powers that do not involve the execution of any provision of law, e.g., his power over the country's foreign relations. On these premises, we hold the view that although the 1987 Constitution imposes limitations on the exercise of specific powers of the President, it maintains intact what is traditionally

considered as within the scope of "executive power." Corollarily, the powers of the President cannot be said to be limited only to the specific powers enumerated in the Constitution. In other words, executive power is more than the sum of specific powers so enumerated. It has been advanced that whatever power inherent in the government that is neither legislative nor judicial has to be executive. x x x.

Indeed, the Executive is given much leeway in ensuring that our laws are faithfully executed. As stated above, the powers of the President are not limited to those specific powers under the Constitution.[53] One of the recognized powers of the President granted pursuant to this constitutionally-mandated duty is the power to create ad hoccommittees. This flows from the obvious need to ascertain facts and determine if laws have been faithfully executed. Thus, in Department of Health v. Camposano,[54] the authority of the President to issue Administrative Order No. 298, creating an investigative committee to look into the administrative charges filed against the employees of the Department of Health for the anomalous purchase of medicines was upheld. In said case, it was ruled:
The Chief Executives power to create the Ad hoc Investigating Committee cannot be doubted. Having been constitutionally granted full control of the Executive Department, to which respondents belong, the President has the obligation to ensure that all executive officials and employees faithfully comply with the law. With AO 298 as mandate, the legality of the investigation is sustained. Such validity is not affected by the fact that the investigating team and the PCAGC had the same composition, or that the former used the offices and facilities of the latter in conducting the inquiry. [Emphasis supplied]

It should be stressed that the purpose of allowing ad hoc investigating bodies to exist is to allow an inquiry into matters which the President is entitled to know so that he can be properly advised and guided in the performance of his duties relative to the execution and enforcement of the laws of the land. And if history is to be revisited, this was also the objective of the investigative bodies created in the past like the PCAC, PCAPE, PARGO, the Feliciano Commission, the Melo

Commission and the Zenarosa Commission. There being no changes in the government structure, the Court is not inclined to declare such executive power as non-existent just because the direction of the political winds have changed. On the charge that Executive Order No. 1 transgresses the power of Congress to appropriate funds for the operation of a public office, suffice it to say that there will be no appropriation but only an allotment or allocations of existing funds already appropriated. Accordingly, there is no usurpation on the part of the Executive of the power of Congress to appropriate funds. Further, there is no need to specify the amount to be earmarked for the operation of the commission because, in the words of the Solicitor General, whatever funds the Congress has provided for the Office of the President will be the very source of the funds for the commission.[55] Moreover, since the amount that would be allocated to the PTC shall be subject to existing auditing rules and regulations, there is no impropriety in the funding. Power of the Truth Commission to Investigate The Presidents power to conduct investigations to ensure that laws are faithfully executed is well recognized. It flows from the faithful-execution clause of the Constitution under Article VII, Section 17 thereof.[56] As the Chief Executive, the president represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department. He has the authority to directly assume the functions of the executive department.[57] Invoking this authority, the President constituted the PTC to primarily investigate reports of graft and corruption and to recommend the appropriate action. As previously stated, no quasi-judicial powers have been vested in the said body as it cannot adjudicate rights of persons who come before it. It has been said that Quasi-judicial powers involve the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by law itself in enforcing and administering the same law.[58] In simpler terms, judicial discretion is involved in the exercise of these quasi-judicial power, such that it is exclusively vested in the judiciary and must be clearly authorized by the legislature in the case of administrative agencies.

The distinction between the power to investigate and the power to adjudicate was delineated by the Court in Cario v. Commission on Human Rights.[59] Thus:
"Investigate," commonly understood, means to examine, explore, inquire or delve or probe into, research on, study. The dictionary definition of "investigate" is "to observe or study closely: inquire into systematically: "to search or inquire into: x x to subject to an official probe x x: to conduct an official inquiry." The purpose of investigation, of course, is to discover, to find out, to learn, obtain information. Nowhere included or intimated is the notion of settling, deciding or resolving a controversy involved in the facts inquired into by application of the law to the facts established by the inquiry. The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or observation. To trace or track; to search into; to examine and inquire into with care and accuracy; to find out by careful inquisition; examination; the taking of evidence; a legal inquiry;" "to inquire; to make an investigation," "investigation" being in turn described as "(a)n administrative function, the exercise of which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; x x an inquiry, judicial or otherwise, for the discovery and collection of facts concerning a certain matter or matters." "Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine, resolve, rule on, settle. The dictionary defines the term as "to settle finally (the rights and duties of the parties to a court case) on the merits of issues raised: x x to pass judgment on: settle judicially: x x act as judge." And "adjudge" means "to decide or rule upon as a judge or with judicial or quasi-judicial powers: x x to award or grant judicially in a case of controversy x x." In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally. Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or decree, or to sentence or condemn. x x. Implies a judicial determination of a fact, and the entry of a judgment." [Italics included. Citations Omitted]

Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of justice, or even a quasi-judicial agency or office. The function of receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function. To be considered as such, the act of receiving evidence and arriving at factual conclusions in a controversy must be accompanied by the authority of applying the law to the factual conclusions to the end that the controversy may be decided or resolved authoritatively, finally and definitively, subject to appeals or modes of review as may be provided by law.[60] Even respondents themselves admit that the commission is bereft of any quasi-judicial power.[61] Contrary to petitioners apprehension, the PTC will not supplant the Ombudsman or the DOJ or erode their respective powers. If at all, the investigative function of the commission will complement those of the two offices. As pointed out by the Solicitor General, the recommendation to prosecute is but a consequence of the overall task of the commission to conduct a factfinding investigation.[62] The actual prosecution of suspected offenders, much less adjudication on the merits of the charges against them,[63] is certainly not a function given to the commission. The phrase, when in the course of its investigation, under Section 2(g), highlights this fact and gives credence to a contrary interpretation from that of the petitioners. The function of determining probable cause for the filing of the appropriate complaints before the courts remains to be with the DOJ and the Ombudsman.[64] At any rate, the Ombudsmans power to investigate under R.A. No. 6770 is not exclusive but is shared with other similarly authorized government agencies. Thus, in the case of Ombudsman v. Galicia,[65] it was written:
This power of investigation granted to the Ombudsman by the 1987 Constitution and The Ombudsman Act is not exclusive but is shared with other similarly authorized government agencies such as the PCGG and judges of municipal trial courts and municipal circuit trial courts. The power to conduct preliminary investigation on charges against public employees and officials is likewise concurrently shared with the Department of Justice. Despite the passage of the Local Government Code in 1991, the Ombudsman retains concurrent jurisdiction with the

Office of the President and the local Sanggunians to investigate complaints against local elective officials. [Emphasis supplied].

Also, Executive Order No. 1 cannot contravene the power of the Ombudsman to investigate criminal cases under Section 15 (1) of R.A. No. 6770, which states:
(1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in the exercise of its primary jurisdiction, it may take over, at any stage, from any investigatory agency of government, the investigation of such cases. [Emphases supplied]

The act of investigation by the Ombudsman as enunciated above contemplates the conduct of a preliminary investigation or the determination of the existence of probable cause. This is categorically out of the PTCs sphere of functions. Its power to investigate is limited to obtaining facts so that it can advise and guide the President in the performance of his duties relative to the execution and enforcement of the laws of the land. In this regard, the PTC commits no act of usurpation of the Ombudsmans primordial duties. The same holds true with respect to the DOJ. Its authority under Section 3 (2), Chapter 1, Title III, Book IV in the Revised Administrative Code is by no means exclusive and, thus, can be shared with a body likewise tasked to investigate the commission of crimes. Finally, nowhere in Executive Order No. 1 can it be inferred that the findings of the PTC are to be accorded conclusiveness. Much like its predecessors, the Davide Commission, the Feliciano Commission and the Zenarosa Commission, its findings would, at best, be recommendatory in nature. And being so, the Ombudsman and the DOJ have a wider degree of latitude to decide whether or not to reject the recommendation. These offices, therefore, are not deprived of their

mandated duties but will instead be aided by the reports of the PTC for possible indictments for violations of graft laws. Violation of the Equal Protection Clause Although the purpose of the Truth Commission falls within the investigative power of the President, the Court finds difficulty in upholding the constitutionality of Executive Order No. 1 in view of its apparent transgression of the equal protection clause enshrined in Section 1, Article III (Bill of Rights) of the 1987 Constitution. Section 1 reads:
Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

The petitioners assail Executive Order No. 1 because it is violative of this constitutional safeguard. They contend that it does not apply equally to all members of the same class such that the intent of singling out the previous administration as its sole object makes the PTC an adventure in partisan hostility.[66] Thus, in order to be accorded with validity, the commission must also cover reports of graft and corruption in virtually all administrations previous to that of former President Arroyo.[67] The petitioners argue that the search for truth behind the reported cases of graft and corruption must encompass acts committed not only during the administration of former President Arroyo but also during prior administrations where the same magnitude of controversies and anomalies[68] were reported to have been committed against the Filipino people. They assail the classification formulated by the respondents as it does not fall under the recognized exceptions because first, there is no substantial distinction between the group of officials targeted for investigation by Executive Order No. 1 and other groups or persons who abused their public office for personal gain; and second, the selective classification is not germane to the purpose of Executive Order No. 1 to end corruption.[69] In order to attain constitutional permission, the petitioners advocate that the commission should deal with graft and grafters prior and

subsequent to the Arroyo administration with the strong arm of the law with equal force.[70] Position of respondents According to respondents, while Executive Order No. 1 identifies the previous administration as the initial subject of the investigation, following Section 17 thereof, the PTC will not confine itself to cases of large scale graft and corruption solely during the said administration.[71] Assuming arguendo that the commission would confine its proceedings to officials of the previous administration, the petitioners argue that no offense is committed against the equal protection clause for the segregation of the transactions of public officers during the previous administration as possible subjects of investigation is a valid classification based on substantial distinctions and is germane to the evils which the Executive Order seeks to correct.[72] To distinguish the Arroyo administration from past administrations, it recited the following: First. E.O. No. 1 was issued in view of widespread reports of large scale graft and corruption in the previous administration which have eroded public confidence in public institutions. There is, therefore, an urgent call for the determination of the truth regarding certain reports of large scale graft and corruption in the government and to put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to deter others from committing the evil, restore the peoples faith and confidence in the Government and in their public servants. Second. The segregation of the preceding administration as the object of fact-finding is warranted by the reality that unlike with administrations long gone, the current administration will most likely bear the immediate consequence of the policies of the previous administration. Third. The classification of the previous administration as a separate class for investigation lies in the reality that the evidence of possible criminal activity, the evidence that could lead to recovery of public monies illegally dissipated, the policy lessons to be learned to ensure that anti-corruption laws are faithfully executed, aremore

easily established in the regime that immediately precede the current administration. Fourth. Many administrations subject the transactions of their predecessors to investigations to provide closure to issues that are pivotal to national life or even as a routine measure of due diligence and good housekeeping by a nascent administration like the Presidential Commission on Good Government (PCGG), created by the late President Corazon C. Aquino under Executive Order No. 1 to pursue the recovery of ill-gotten wealth of her predecessor former President Ferdinand Marcos and his cronies, and the Saguisag Commission created by former President Joseph Estrada under Administrative Order No, 53, to form an ad-hoc and independent citizens committee to investigate all the facts and circumstances surrounding Philippine Centennial projects of his predecessor, former President Fidel V. Ramos.[73] [Emphases supplied] Concept of the Equal Protection Clause One of the basic principles on which this government was founded is that of the equality of right which is embodied in Section 1, Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process, as every unfair discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause, however, to provide for a more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may be challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protectionclause.[74] According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed.[75] It requires public bodies and institutions to treat similarly situated individuals in a similar manner.[76] The purpose of the equal protection clause is to secure every person within a states jurisdiction against intentional and arbitrary discrimination, whether occasioned by

the express terms of a statue or by its improper execution through the states duly constituted authorities.[77] In other words, the concept of equal justice under the law requires the state to govern impartially, and it may not draw distinctions between individuals solely on differences that are irrelevant to a legitimate governmental objective.[78] The equal protection clause is aimed at all official state actions, not just those of the legislature.[79] Its inhibitions cover all the departments of the government including the political and executive departments, and extend to all actions of a state denying equal protection of the laws, through whatever agency or whatever guise is taken. [80] It, however, does not require the universal application of the laws to all persons or things without distinction. What it simply requires is equality among equals as determined according to a valid classification. Indeed, the equal protection clause permits classification. Such classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1) The classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to existing conditions only; and

(4) It applies equally to all members of the same class.[81] Superficial differences do not make for a valid classification.[82] For a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong to the class. [83] The classification will be regarded as invalid if all the members of the class are not similarly treated, both as to rights conferred and obligations imposed. It is not necessary that the classification be made with absolute symmetry, in the sense that the members of the class should possess the same characteristics in equal degree. Substantial similarity will suffice; and as long as this is achieved, all those covered by the classification are to be treated equally. The mere fact that an individual belonging to a class differs from the other members, as long as that class is substantially distinguishable from all others, does not justify the non-application of the law to him.[84] The classification must not be based on existing circumstances only, or so constituted as to preclude addition to the number included in the class. It must be of such a nature as to embrace all those who may thereafter be in similar circumstances and conditions. It must not leave out or underinclude those that should otherwise fall into a certain classification. As elucidated in Victoriano v. Elizalde Rope Workers' Union[85] and reiterated in a long line of cases,[86] The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity of rights. The Constitution does not require that things which are different in fact be treated in law as though they were the same. The equal protection clause does not forbid discrimination as to things that are different. It does not prohibit legislation which is limited either in the object to which it is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other

departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars. A law is not invalid because of simple inequality. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. All that is required of a valid classification is that it be reasonable, which means that the classification should be based on substantial distinctions which make for real differences, that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it must apply equally to each member of the class. This Court has held that the standard is satisfied if the classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary. [Citations omitted]

Applying these precepts to this case, Executive Order No. 1 should be struck down as violative of the equal protection clause. The clear mandate of the envisioned truth commission is to investigate and find out the truth concerning the reported cases of graft and corruption during the previous administration[87] only. The intent to single out the previous administration is plain, patent and manifest. Mention of it has been made in at least three portions of the questioned executive order. Specifically, these are:
WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported cases of graft and corruption during theprevious administration, and which will recommend the prosecution of the offenders and secure justice for all; SECTION 1. Creation of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as the COMMISSION, which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people, committed by public officers and employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration; and thereafter recommend the appropriate action

or measure to be taken thereon to ensure that the full measure of justice shall be served without fear or favor. SECTION 2. Powers and Functions. The Commission, which shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration and thereafter submit its finding and recommendations to the President, Congress and the Ombudsman. [Emphases supplied]

In this regard, it must be borne in mind that the Arroyo administration is but just a member of a class, that is, a class of past administrations. It is not a class of its own. Not to include past administrations similarly situated constitutes arbitrariness which the equal protection clause cannot sanction. Such discriminating differentiation clearly reverberates to label the commission as a vehicle for vindictiveness and selective retribution. Though the OSG enumerates several differences between the Arroyo administration and other past administrations, these distinctions are not substantial enough to merit the restriction of the investigation to the previous administration only. The reports of widespread corruption in the Arroyo administration cannot be taken as basis for distinguishing said administration from earlier administrations which were also blemished by similar widespread reports of impropriety. They are not inherent in, and do not inure solely to, the Arroyo administration. As Justice Isagani Cruz put it, Superficial differences do not make for a valid classification.[88]

The public needs to be enlightened why Executive Order No. 1 chooses to limit the scope of the intended investigation to the previous administration only. The OSG ventures to opine that to include other past administrations, at this point, may unnecessarily overburden the commission and lead it to lose its effectiveness.[89] The reason given is specious. It is without doubt irrelevant to the

legitimate and noble objective of the PTC to stamp out or end corruption and the evil it breeds.[90] The probability that there would be difficulty in unearthing evidence or that the earlier reports involving the earlier administrations were already inquired into is beside the point. Obviously, deceased presidents and cases which have already prescribed can no longer be the subjects of inquiry by the PTC. Neither is the PTC expected to conduct simultaneous investigations of previous administrations, given the bodys limited time and resources. The law does not require the impossible (Lex non cogit ad impossibilia).[91] Given the foregoing physical and legal impossibility, the Court logically recognizes the unfeasibility of investigating almost a centurys worth of graft cases. However, the fact remains that Executive Order No. 1 suffers from arbitrary classification. The PTC, to be true to its mandate of searching for the truth, must not exclude the other past administrations. The PTC must, at least, have the authority to investigate all past administrations. While reasonable prioritization is permitted, it should not be arbitrary lest it be struck down for being unconstitutional. In the often quoted language of Yick Wo v. Hopkins,[92]

Though the law itself be fair on its face and impartial in appearance, yet, if applied and administered by public authority with an evil eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances, material to their rights, the denial of equal justice is still within the prohibition of the constitution. [Emphasis supplied] It could be argued that considering that the PTC is an ad hoc body, its scope is limited. The Court, however, is of the considered view that although its focus is restricted, the constitutional guarantee of equal protection under the laws should not in any way be circumvented. The Constitution is the fundamental and paramount law of the nation to which all other laws must conform and in accordance with which all private rights determined and all public authority administered.[93] Laws that do not conform to the Constitution should be stricken

down for being unconstitutional.[94] While the thrust of the PTC is specific, that is, for investigation of acts of graft and corruption, Executive Order No. 1, to survive, must be read together with the provisions of the Constitution. To exclude the earlier administrations in the guise of substantial distinctions would only confirm the petitioners lament that the subject executive order is only an adventure in partisan hostility. In the case of US v. Cyprian,[95] it was written: A rather limited number of such classifications have routinely been held or assumed to be arbitrary; those include: race, national origin, gender, political activity or membership in a political party,union activity or membership in a labor union, or more generally the exercise of first amendment rights. To reiterate, in order for a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong to the class.[96] Such a classification must not be based on existing circumstances only, or so constituted as to preclude additions to the number included within a class, but must be of such a nature as to embrace all those who may thereafter be in similar circumstances and conditions. Furthermore, all who are in situations and circumstances which are relative to the discriminatory legislation and which are indistinguishable from those of the members of the class must be brought under the influence of the law and treated by it in the same way as are the members of the class.[97] The Court is not unaware that mere underinclusiveness is not fatal to the validity of a law under the equal protection clause.[98] Legislation is not unconstitutional merely because it is not all-embracing and does not include all the evils within its reach.[99] It has been written that a regulation challenged under the equal protection clause is not devoid of a rational predicate simply because it happens to be incomplete.[100] In several instances, the underinclusiveness was not considered a valid reason to strike down a law or regulation where the purpose can be attained in future legislations or regulations. These cases refer to the step by step process.[101] With regard to equal protection claims, a legislature does not run the risk of losing the entire remedial scheme simply because it fails, through inadvertence or otherwise, to cover every evil that might conceivably have been attacked.[102]

In Executive Order No. 1, however, there is no inadvertence. That the previous administration was picked out was deliberate and intentional as can be gleaned from the fact that it was underscored at least three times in the assailed executive order. It must be noted that Executive Order No. 1 does not even mention any particular act, event or report to be focused on unlike the investigative commissions created in the past. The equal protection clause is violated by purposeful and intentional discrimination.[103] To disprove petitioners contention that there is deliberate discrimination, the OSG clarifies that the commission does not only confine itself to cases of large scale graft and corruption committed during the previous administration. [104] The OSG points to Section 17 of Executive Order No. 1, which provides:

SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and corruption during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive Order.

The Court is not convinced. Although Section 17 allows the President the discretion to expand the scope of investigations of the PTC so as to include the acts of graft and corruption committed in other past administrations, it does not guarantee that they would be covered in the future. Such expanded mandate of the commission will still depend on the whim and caprice of the President. If he would decide not to include them, the section would then be meaningless. This will only fortify the fears of the petitioners that the Executive Order No. 1 was crafted to tailor-fit the prosecution of officials and personalities of the Arroyo administration.[105]

The Court tried to seek guidance from the pronouncement in the case of Virata v. Sandiganbayan,[106] that the PCGG Charter (composed of Executive Orders Nos. 1, 2 and 14) does not violate the equal protection clause. The

decision, however, was devoid of any discussion on how such conclusory statement was arrived at, the principal issue in said case being only the sufficiency of a cause of action. A final word The issue that seems to take center stage at present is - whether or not the Supreme Court, in the exercise of its constitutionally mandated power of Judicial Review with respect to recent initiatives of the legislature and the executive department, is exercising undue interference. Is the Highest Tribunal, which is expected to be the protector of the Constitution, itself guilty of violating fundamental tenets like the doctrine of separation of powers? Time and again, this issue has been addressed by the Court, but it seems that the present political situation calls for it to once again explain the legal basis of its action lest it continually be accused of being a hindrance to the nations thrust to progress. The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987 Constitution, is vested with Judicial Power that includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave of abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review which is the power to declare a treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation unconstitutional. This power also includes the duty to rule on the constitutionality of the application, or operation of presidential decrees, proclamations, orders, instructions, ordinances, and other regulations. These provisions, however, have been fertile grounds of conflict between the Supreme Court, on one hand, and the two co-equal bodies of government, on the other. Many times the Court has been accused of asserting superiority over the other departments. To answer this accusation, the words of Justice Laurel would be a good source of enlightenment, to wit: And when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other

departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them.[107] Thus, the Court, in exercising its power of judicial review, is not imposing its own will upon a co-equal body but rather simply making sure that any act of government is done in consonance with the authorities and rights allocated to it by the Constitution. And, if after said review, the Court finds no constitutional violations of any sort, then, it has no more authority of proscribing the actions under review. Otherwise, the Court will not be deterred to pronounce said act as void and unconstitutional. It cannot be denied that most government actions are inspired with noble intentions, all geared towards the betterment of the nation and its people. But then again, it is important to remember this ethical principle: The end does not justify the means. No matter how noble and worthy of admir ation the purpose of an act, but if the means to be employed in accomplishing it is simply irreconcilable with constitutional parameters, then it cannot still be allowed.[108] The Court cannot just turn a blind eye and simply let it pass. It will continue to uphold the Constitution and its enshrined principles. The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be allowed to sap its strength nor greed for power debase its rectitude.[109]

Lest it be misunderstood, this is not the death knell for a truth commission as nobly envisioned by the present administration. Perhaps a revision of the executive issuance so as to include the earlier past administrations would allow it to pass the test of reasonableness and not be an affront to the Constitution. Of all the branches of the government, it is the judiciary which is the most interested in knowing the truth and so it will not allow itself to be a hindrance or obstacle to its attainment. It must, however, be emphasized that the search for

the truth must be within constitutional bounds for ours is still a government of laws and not of men.[110] WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared UNCONSTITUTIONAL insofar as it is violative of the equal protection clause of the Constitution. As also prayed for, the respondents are hereby ordered to cease and desist from carrying out the provisions of Executive Order No. 1. SO ORDERED.

SECOND DIVISION KAPISANAN NG MGA KAWANI NG ENERGY REGULATORY BOARD, Petitioner, G.R. No. 150974 Present: QUISUMBING,* J., Chairperson, CARPIO,** CARPIO MORALES, TINGA, and VELASCO, JR., JJ.

- versus -

COMMISSIONER FE B. BARIN, DEPUTY COMMISSIONERS CARLOS R. ALINDADA, LETICIA V. IBAY, OLIVER B. BUTALID, and MARY ANNE B. COLAYCO, of the ENERGY REGULATORY COMMISSION, Respondents.

Promulgated:

June 29, 2007

x-------------------------------------------------- x

DECISION CARPIO, J.: The Case This is a special civil action for certiorari and [1] prohibition of the selection and appointment of employees of the Energy Regulatory Commission (ERC) by the ERC Board of Commissioners.

Petitioner Kapisanan ng mga Kawani ng Energy Regulatory Board (KERB) seeks to declare Section 38 of Republic Act No. 9136 (RA 9136), which abolished the Energy Regulatory Board (ERB) and created the ERC, as unconstitutional and to prohibit the ERC Commissioners from filling up the ERCs plantilla.

The Facts RA 9136, popularly known as EPIRA (for Electric Power Industry Reform Act of 2001), was enacted on 8 June 2001 and took effect on 26 June 2001. Section 38 of RA 9136 provides for the abolition of the ERB and the creation of the ERC. The pertinent portions of Section 38 read:
Creation of the Energy Regulatory Commission. There is hereby created an independent, quasi-judicial regulatory board to be named the Energy Regulatory Commission (ERC). For this purpose, the existing Energy Regulatory Board (ERB) created under Executive Order No. 172, as amended, is hereby abolished. The Commission shall be composed of a Chairman and four (4) members to be appointed by the President of the Philippines. x x x Within three (3) months from the creation of the ERC, the Chairman shall submit for the approval of the President of the Philippines the new organizational structure and plantilla positions necessary to carry out the powers and functions of the ERC. xxxx The Chairman and members of the Commission shall assume office at the beginning of their terms: Provided, That, if upon the effectivity of this Act, the Commission has not been constituted and the new staffing pattern and plantilla positions have not been approved and filled-up, the current Board and existing personnel of ERB shall continue to hold office.

The existing personnel of the ERB, if qualified, shall be given preference in the filling up of plantilla positions created in the ERC, subject to existing civil service rules and regulations.

At the time of the filing of this petition, the ERC was composed of Commissioner Fe B. Barin and Deputy Commissioners Carlos R. Alindada, Leticia V. Ibay, Oliver B.Butalid, and Mary Anne B. Colayco (collectively, Commissioners). The Commissioners assumed office on 15 August 2001. Pursuant to Section 38 of RA 9136, the Commissioners issued the proposed Table of Organization, Staffing Pattern, and Salary Structure on 25 September 2001 which the President of the Philippines approved on 13 November 2001. Meanwhile, KERB submitted to the Commissioners its Resolution No. 2001-02 on 13 September 2001. Resolution No. 2001-02 requested the Commissioners for an opportunity to be informed on the proposed plantilla positions with their equivalent qualification standards. On 17 October 2001, the Commissioners issued the guidelines for the selection and hiring of ERC employees. A portion of the guidelines reflects the Commissioners view on the selection and hiring of the ERC employees vis-avis Civil Service rules, thus:
Since R.A. 9136 has abolished the Energy Regulatory Board (ERB), it is the view of the Commission that the provisions of Republic Act No. 6656 (An Act to Protect the Security of [Tenure of] Civil Service Officers and Employees in the Implementation of Government Reorganization) will not directly apply to ERCs current efforts to establish a new organization. Civil Service laws, rules and regulations, however, will have suppletory application to the extent possible in regard to the selection and placement of employees in the ERC.[2] (Emphasis supplied)

On 5 November 2005, KERB sent a letter to the Commissioners stating the KERB members objection to the Commissioners stand that Civil Service laws, rules and regulations have suppletory application in the selection and placement of the ERC employees. KERB asserted that RA 9136 did not abolish the ERB or change the ERBscharacter as an economic regulator of the electric power

industry. KERB insisted that RA 9136 merely changed the ERBs name to the ERC and expanded the ERBs functions and objectives. KERB sent the Commissioners yet another letter on 13 November 2001. KERB made a number of requests: (1) the issuance of a formal letter related to the date of filing of job applications, including the use of Civil Service application form no. 212; (2) the creation of a placement/recruitment committee and setting guidelines relative to its functions, without prejudice to existing Civil Service rules and regulations; and (3) copies of the plantilla positions and their corresponding qualification standards duly approved by either the President of the Philippines or the Civil Service Commission (CSC). Commissioner Barin replied to KERBs letter on 15 November 2001. She stated that Civil Service application form no. 212 and the ERC-prescribed application format are substantially the same. Furthermore, the creation of a placement/recruitment committee is no longer necessary because there is already a prescribed set of guidelines for the recruitment of personnel. The ERC hired an independent consultant to administer the necessary tests for the technical and managerial levels. Finally, the ERC already posted theplantilla positions, which prescribe higher standards, as approved by the Department of Budget and Management. Commissioner Barin stated that positions in the ERC do not need the prior approval of the CSC, as the ERC is only required to submit the qualification standards to the CSC. On 5 December 2001, the ERC published a classified advertisement in the Philippine Star. Two days later, the CSC received a list of vacancies and qualification standards from the ERC. The ERC formed a Selection Committee to process all applications. KERB, fearful of the uncertainty of the employment status of its members, filed the present petition on 20 December 2001. KERB later filed an Urgent Ex Parte Motion to Enjoin Termination of Petitioner ERB Employees on 2 January 2002. However, before the ERC received KERBs pleadings, the Selection Committee already presented its list of proposed appointees to the Commissioners. In their Comment, the Commissioners describe the status of the ERB employees appointment in the ERC as follows:

As of February 1, 2002, of the two hundred twelve (212) ERB employees, one hundred thirty eighty [sic] (138) were rehired and appointed to ERC plantilla positions and sixty six (66) opted to retire or be separated from the service. Those who were rehired and those who opted to retire or be separated constituted about ninety six (96%) percent of the entire ERB employees. The list of the ERB employees appointed to new positions in the ERC is attached hereto as Annex 1. Only eight (8) ERB employees could not be appointed to new positions due to the reduction of the ERC plantilla and the absence of positions appropriate to their respective qualifications and skills. The appropriate notice was issued to each of them informing them of their separation from the service and assuring them of their entitlement to separation pay and other benefits in accordance with existing laws.[3]

The Issues KERB raises the following issues before this Court:
1. Whether Section 38 of RA 9136 abolishing the ERB is constitutional; and

2. Whether the Commissioners of the ERC were correct in disregarding and considering merely suppletory in character the protective mantle of RA 6656 as to the ERB employees or petitioner in this case.[4] The Ruling of the Court The petition has no merit. We disregard the procedural defects in the petition, such as KERBs personality to file the petition on behalf of its alleged members and Elmar Agirs authority to institute the action, because of the demands of public interest.[5]

Constitutionality of the ERBs Abolition and the ERCs Creation All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there must be a clear and unequivocal breach of the Constitution. KERB failed to show any breach of the Constitution. A public office is created by the Constitution or by law or by an officer or tribunal to which the power to create the office has been delegated by the legislature.[6] The power to create an office carries with it the power to abolish. President Corazon C. Aquino, then exercising her legislative powers, created the ERB by issuing Executive Order No. 172 on 8 May 1987. The question of whether a law abolishes an office is a question of legislative intent. There should not be any controversy if there is an explicit declaration of abolition in the law itself.[7] Section 38 of RA 9136 explicitly abolished the ERB. However, abolition of an office and its related positions is different from removal of an incumbent from his office. Abolition and removal are mutually exclusive concepts. From a legal standpoint, there is no occupant in an abolished office. Where there is no occupant, there is no tenure to speak of. Thus, impairment of the constitutional guarantee of security of tenure does not arise in the abolition of an office. On the other hand, removal implies that the office and its related positions subsist and that the occupants are merely separated from their positions.[8] A valid order of abolition must not only come from a legitimate body, it must also be made in good faith. An abolition is made in good faith when it is not made for political or personal reasons, or when it does not circumvent the constitutional security of tenure of civil service employees.[9] Abolition of an office may be brought about by reasons of economy, or to remove redundancy of functions, or a clear and explicit constitutional mandate for such termination of employment.[10] Where one office is abolished and replaced with another office vested with similar functions, the abolition is a legal nullity. [11] When there is a void abolition, the incumbent is deemed to have never ceased holding office.

KERB asserts that there was no valid abolition of the ERB but there was merely a reorganization done in bad faith. Evidences of bad faith are enumerated in Section 2 of Republic Act No. 6656 (RA 6656),[12] Section 2 of RA 6656 reads:
No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party: (a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) Where an office is abolished and another performing substantially the same functions is created; (c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same function as the original offices; (e) Where the removal violates the order of separation provided in Section 3 hereof.

KERB claims that the present case falls under the situation described in Section 2(b) of RA 6656. We thus need to compare the provisions enumerating the powers and functions of the ERB and the ERC to see whether they have substantially the same functions. Under Executive Order No. 172, the ERB has the following powers and functions:

SEC. 3. Jurisdiction, Powers and Functions of the Board. When warranted and only when public necessity requires, the Board may regulate the business of importing, exporting, re-exporting, shipping, transporting, processing, refining, marketing and distributing energy resources. Energy resource means any substance or phenomenon which by itself or in combination with others, or after processing or refining or the application to it of technology, emanates, generates or causes the emanation or generation of energy, such as but not limited to, petroleum or petroleum products, coal, marsh gas, methane gas, geothermal and hydroelectric sources of energy, uranium and other similar radioactive minerals, solar energy, tidal power, as well as nonconventional existing and potential sources. The Board shall, upon proper notice and hearing, exercise the following, among other powers and functions: (a) Fix and regulate the prices of petroleum products; (b) Fix and regulate the rate schedule or prices of piped gas to be charged by duly franchised gas companies which distribute gas by means of underground pipe system; (c) Fix and regulate the rates of pipeline concessionaires under the provisions of Republic Act No. 387, as amended, otherwise known as the Petroleum Act of 1949, as amended by Presidential Decree No. 1700; (d) Regulate the capacities of new refineries or additional capacities of existing refineries and license refineries that may be organized after the issuance of this Executive Order, under such terms and conditions as are consistent with the national interest; (e) Whenever the Board has determined that there is a shortage of any petroleum product, or when public interest so requires, it may take such steps as it may consider necessary, including the temporary adjustment of the levels of prices of petroleum products and the payment to the Oil Price Stabilization Fund created under Presidential Decree No. 1956 by persons or entities engaged in the petroleum industry of such amounts as may be determined by the Board, which will enable the importer to recover its cost of importation.

SEC. 4. Reorganized or Abolished Agency. (a) The Board of Energy is hereby reconstituted into the Energy Regulatory Board, and the formers powers and functions under Republic Act No. 6173, as amended by Presidential Decree No. 1208, as amended, are transferred to the latter. (b) The regulatory and adjudicatory powers and functions exercised by the Bureau of Energy Utilization under Presidential Decree No. 1206, as amended, are transferred to the Board, the provisions of Executive Order No. 131 notwithstanding. SEC. 5. Other Transferred Powers and Functions. The power of the Land Transportation Commission to determine, fix and/or prescribe rates or charges pertaining to the hauling of petroleum products are transferred to the Board. The power to fix and regulate the rates or charges pertinent to shipping or transporting of petroleum products shall also be exercised by the Board. The foregoing transfer of powers and functions shall include applicable funds and appropriations, records, equipment, property and such personnel as may be necessary; Provided, That with reference to paragraph (b) of Section 4 hereof, only such amount of funds and appropriations of the Bureau of Energy Utilization, as well as only the personnel thereof who are completely or primarily involved in the exercise by said Bureau of its regulatory and adjudicatory powers and functions, shall be affected by such transfer: Provided, further, That the funds and appropriations as well as the records, equipment, property and all personnel of the reorganized Board of Energy shall be transferred to the Energy Regulatory Board. SEC. 6. Power to Promulgate Rules and Perform Other Acts. The Board shall have the power to promulgate rules and regulations relevant to procedures governing hearings before it and enforce compliance with any rule, regulation, order or other requirements: Provided, That said rules and regulations shall take effect fifteen (15) days after publication in the Official Gazette. It shall also perform such other acts as may be necessary or conducive to the exercise of its powers and functions, and the attainment of the purposes of this Order.

On the other hand, Section 43 of RA 9136 enumerates the basic functions of the ERC.
SEC. 43. Functions of the ERC. The ERC shall promote competition, encourage market development, ensure customer choice and discourage/penalize abuse of market power in the restructured electricity industry. In appropriate cases, the ERC is authorized to issue cease and desist order after due notice and hearing. Towards this end, it shall be responsible for the following key functions in the restructured industry: (a) Enforce the implementing rules and regulations of this Act; (b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in accordance with law, a National Grid Code and a Distribution Code which shall include, but not limited to, the following: (i) Performance standards for TRANSCO O & M Concessionaire, distribution utilities and suppliers: Provided, That in the establishment of the performance standards, the nature and function of the entities shall be considered; and (ii) Financial capability standards for the generating companies, the TRANSCO, distribution utilities and suppliers: Provided, That in the formulation of the financial capability standards, the nature and function of the entity shall be considered: Provided, further, That such standards are set to ensure that the electric power industry participants meet the minimum financial standards to protect the public interest. Determine, fix, and approve, after due notice and public hearings the universal charge, to be imposed on all electricity end-users pursuant to Section 34 hereof; (c) Enforce the rules and regulations governing the operations of the electricity spot market and the activities of the spot market operator and other participants in the spot market, for the purpose of ensuring a greater supply and rational pricing of electricity; (d) Determine the level of cross subsidies in the existing retail rate until the same is removed pursuant to Section 73 hereof;

(e) Amend or revoke, after due notice and hearing, the authority to operate of any person or entity which fails to comply with the provisions hereof, the IRR or any order or resolution of the ERC. In the event a divestment is required, the ERC shall allow the affected party sufficient time to remedy the infraction or for an orderly disposal, but shall in no case exceed twelve (12) months from the issuance of the order; (f) In the public interest, establish and enforce a methodology for setting transmission and distribution wheeling rates and retail rates for the captive market of a distribution utility, taking into account all relevant considerations, including the efficiency or inefficiency of the regulated entities. The rates must be such as to allow the recovery of just and reasonable costs and a reasonable return on rate base (RORB) to enable the entity to operate viably. The ERC may adopt alternative forms of internationally-accepted rate setting methodology as it may deem appropriate. The rate-setting methodology so adopted and applied must ensure a reasonable price of electricity. The rates prescribed shall be non-discriminatory. To achieve this objective and to ensure the complete removal of cross subsidies, the cap on the recoverable rate of system losses prescribed in Section 10 of Republic Act No. 7832, is hereby amended and shall be replaced by caps which shall be determined by the ERC based on load density, sales mix, cost of service, delivery voltage and other technical considerations it may promulgate. The ERC shall determine such form of rate-setting methodology, which shall promote efficiency. In case the rate setting methodology used is RORB, it shall be subject to the following guidelines: (i) For purposes of determining the rate base, the TRANSCO or any distribution utility may be allowed to revalue its eligible assets not more than once every three (3) years by an independent appraisal company: Provided, however, That ERC may give an exemption in case of unusual devaluation: Provided, further, That the ERC shall exert efforts to minimize price shocks in order to protect the consumers; (ii) Interest expenses are not allowable deductions from permissible return on rate base; (iii) In determining eligible cost of services that will be passed on to the end-users, the ERC shall establish minimum efficiency performance standards for the TRANSCO and

distribution utilities including systems losses, interruption frequency rates, and collection efficiency; (iv) Further, in determining rate base, the TRANSCO or any distribution utility shall not be allowed to include management inefficiencies like cost of project delays not excused by forcemajeure, penalties and related interest during construction applicable to these unexcused delays; and

(v) Any significant operating costs or project investments of TRANSCO and distribution utilities which shall become part of the rate base shall be subject to the verification of the ERC to ensure that the contracting and procurement of the equipment, assets and services have been subjected to transparent and accepted industry procurement and purchasing practices to protect the public interest. (g) Three (3) years after the imposition of the universal charge, ensure that the charges of the TRANSCO or any distribution utility shall bear no cross subsidies between grids, within grids, or between classes of customers, except as provided herein; (h) Review and approve any changes on the terms and conditions of service of the TRANSCO or any distribution utility; (i) Allow the TRANSCO to charge user fees for ancillary services to all electric power industry participants or self-generating entities connected to the grid. Such fees shall be fixed by the ERC after due notice and public hearing; (j) Set a lifeline rate for the marginalized end-users; (k) Monitor and take measures in accordance with this Act to penalize abuse of market power, cartelization, and anti-competitive or discriminatory behavior by any electric power industry participant;

(l) Impose fines or penalties for any non-compliance with or breach of this Act, the IRR of this Act and the rules and regulations which it promulgates or administers; (m) Take any other action delegated to it pursuant to this Act; (n) Before the end of April of each year, submit to the Office of the President of the Philippines and Congress, copy furnished the DOE, an annual report containing such matters or cases which have been filed before or referred to it during the preceding year, the actions and proceedings undertaken and its decision or resolution in each case. The ERC shall make copies of such reports available to any interested party upon payment of a charge which reflects the printing costs. The ERC shall publish all its decisions involving rates and anticompetitive cases in at least one (1) newspaper of general circulation, and/or post electronically and circulate to all interested electric power industry participants copies of its resolutions to ensure fair and impartial treatment; (o) Monitor the activities of the generation and supply of the electric power industry with the end in view of promoting free market competition and ensuring that the allocation or pass through of bulk purchase cost by distributors is transparent, non-discriminatory and that any existing subsidies shall be divided pro rata among all retail suppliers;

(p) Act on applications for or modifications of certificates of public convenience and/or necessity, licenses or permits of franchised electric utilities in accordance with law and revoke, review and modify such certificates, licenses or permits in appropriate cases, such as in cases of violations of the Grid Code, Distribution Code and other rules and regulations issued by the ERC in accordance with law; (q) Act on applications for cost recovery and return on demand side management projects; (r) In the exercise of its investigative and quasi-judicial powers, act against any participant or player in the energy sector for violations of any law, rule and regulation governing the same, including the rules on cross ownership, anticompetitive practices, abuse of market positions

and similar or related acts by any participant in the energy sector, or by any person as may be provided by law, and require any person or entity to submit any report or data relative to any investigation or hearing conducted pursuant to this Act; (s) Inspect, on its own or through duly authorized representatives, the premises, books of accounts and records of any person or entity at any time, in the exercise of its quasi-judicial power for purposes of determining the existence of any anticompetitive behavior and/or market power abuse and any violation of rules and regulations issued by the ERC; (t) Perform such other regulatory functions as are appropriate and necessary in order to ensure the successful restructuring and modernization of the electric power industry, such as, but not limited to, the rules and guidelines under which generation companies, distribution utilities which are not publicly listed shall offer and sell to the public a portion not less than fifteen percent (15%) of their common shares of stocks: Provided, however, That generation companies, distribution utilities or their respective holding companies that are already listed in the PSE are deemed in compliance. For existing companies, such public offering shall be implemented not later than five (5) years from the effectivity of this Act. New companies shall implement their respective public offerings not later than five (5) years from the issuance of their certificate of compliance; and (u) The ERC shall have the original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties imposed by the ERC in the exercise of the abovementioned powers, functions and responsibilities and over all cases involving disputes between and among participants or players in the energy sector. All notices of hearings to be conducted by the ERC for the purpose of fixing rates or fees shall be published at least twice for two successive weeks in two (2) newspapers of nationwide circulation.

Aside from Section 43, additional functions of the ERC are scattered throughout RA 9136:

1. SEC. 6. Generation Sector. Generation of electric power, a business affected with public interest, shall be competitive and open. Upon the effectivity of this Act, any new generation company shall, before it operates, secure from the Energy Regulatory Commission (ERC) a certificate of compliance pursuant to the standards set forth in this Act, as well as health, safety and environmental clearances from the appropriate government agencies under existing laws. xxxx 2. SEC. 8. Creation Company. x x x of the National Transmission

That the subtransmission assets shall be operated and maintained by TRANSCO until their disposal to qualified distribution utilities which are in a position to take over the responsibility for operating, maintaining, upgrading, and expanding said assets. xxx In case of disagreement in valuation, procedures, ownership participation and other issues, the ERC shall resolve such issues. xxxx 3. SEC. 23. Functions of Distribution Utilities. x x x Distribution utilities shall submit to the ERC a statement of their compliance with the technical specifications prescribed in the Distribution Code and the performance standards prescribed in the IRR of this Act. Distribution utilities which do not comply with any of the prescribed technical specifications and performance standards shall submit to the ERC a plan to comply, within three (3) years, with said prescribed technical specifications and performance standards. The ERC shall, within sixty (60) days upon receipt of such plan, evaluate the same and notify the distribution utility concerned of its action. Failure to submit a feasible and credible plan and/or failure to implement the same shall serve as grounds for the imposition of appropriate sanctions, fines or penalties.

xxxx 4. SEC. 28. De-monopolization and Shareholding Dispersal. In compliance with the constitutional mandate for dispersal of ownership and de-monopolization of public utilities, the holdings of persons, natural or juridical, including directors, officers, stockholders and related interests, in a distribution utility and their respective holding companies shall not exceed twenty-five (25%) percent of the voting shares of stock unless the utility or the company holding the shares or its controlling stockholders are already listed in the Philippine Stock Exchange (PSE): Provided, That controlling stockholders of small distribution utilities are hereby required to list in the PSE within five (5) years from the enactment of this Act if they already own the stocks. New controlling stockholders shall undertake such listing within five (5) years from the time they acquire ownership and control. A small distribution company is one whose peak demand is equal to Ten megawatts (10MW). The ERC shall, within sixty (60) days from the effectivity of this Act, promulgate the rules and regulations to implement and effect this provision. xxxx 5. SEC. 29. Supply Sector. x x x all suppliers of electricity to the contestable market shall require a license from the ERC. For this purpose, the ERC shall promulgate rules and regulations prescribing the qualifications of electricity suppliers which shall include, among other requirements, a demonstration of their technical capability, financial capability, and creditworthiness: Provided, That the ERC shall have authority to require electricity suppliers to furnish a bond or other evidence of the ability of a supplier to withstand market disturbances or other events that may increase the cost of providing service. xxxx 6. SEC. 30. Wholesale Electricity Spot Market. x x x

Subject to the compliance with the membership criteria, all generating companies, distribution utilities, suppliers, bulk consumers/end-users and other similar entities authorized by the ERC shall be eligible to become members of the wholesale electricity spot market. The ERC may authorize other similar entities to become eligible as members, either directly or indirectly, of the wholesale electricity spot market. xxxx 7. SEC. 31. Retail Competition and Open Access. x x x Upon the initial implementation of open access, the ERC shall allow all electricity end-users with a monthly average peak demand of at least one megawatt (1MW) for the preceding twelve (12) months to be the contestable market. xxx Subsequently and every year thereafter, the ERC shall evaluate the performance of the market. x x x 8. SEC. 32. NPC Stranded Debt Recovery. xxx and Contract Cost

The ERC shall verify the reasonable amounts and determine the manner and duration for the full recovery of stranded debt and stranded contract costs as defined herein x x x x 9. SEC. 34. Universal Charge. Within one (1) year from the effectivity of this Act, a universal charge to be determined, fixed and approved by the ERC, shall be imposed on all electricity end-users x x x x 10. SEC. 35. Royalties, Returns and Tax Rates for Indigenous Energy Resources. x x x To ensure lower rates for end-users, the ERC shall forthwith reduce the rates of power from all indigenous sources of energy. 11. SEC. 36. Unbundling of Rates and Functions. x x x

each distribution utility shall file its revised rates for the approval by the ERC. x x x x 12. SEC. 40. Enhancement of Technical Competence. The ERC shall establish rigorous training programs for its staff for the purpose of enhancing the technical competence of the ERC in the following areas: evaluation of technical performance and monitoring of compliance with service and performance standards, performance-based rate-setting reform, environmental standards and such other areas as will enable the ERC to adequately perform its duties and functions. 13. SEC. 41. Promotion of Consumer Interests. The ERC shall handle consumer complaints and ensure the adequate promotion of consumer interests. 14. SEC. 45. Cross Ownership, Market Power Abuse and AntiCompetitive Behavior. No participant in the electricity industry may engage in any anti-competitive behavior including, but not limited to, cross-subsidization, price or market manipulation, or other unfair trade practices detrimental to the encouragement and protection of contestable markets. xxxx (c) x x x The ERC shall, within one (1) year from the effectivity of this Act, promulgate rules and regulations to promote competition, encourage market development and customer choice and discourage/penalize abuse of market power, cartelization and any anticompetitive or discriminatory behavior, in order to further the intent of this Act and protect the public interest. Such rules and regulations shall define the following: (a) the relevant markets for purposes of establishing abuse or misuse of monopoly or market position; (b) areas of isolated grids; and (c) the periodic reportorial requirements of electric power industry participants as may be necessary to enforce the provisions of this Section.

The ERC shall, motu proprio, monitor and penalize any market power abuse or anticompetitive or discriminatory act or behavior by any participant in the electric power industry. 15. SEC. 51. Powers. The PSALM Corp. shall, in the performance of its functions and for the attainment of its objective, have the following powers: x x x (e) To liquidate the NPC stranded contract costs utilizing proceeds from sales and other property contributed to it, including the proceeds from the universal charge; xxxx 16. SEC. 60. Debts of Electric Cooperatives. x x x The ERC shall ensure a reduction in the rates of electric cooperatives commensurate with the resulting savings due to the removal of the amortization payments of their loans. x x x x 17. SEC. 62. Joint Congressional Power Commission. x x x x x x the Power Commission is hereby empowered to require the DOE, ERC, NEA, TRANSCO, generation companies, distribution utilities, suppliers and other electric power industry participants to submit reports and all pertinent data and information relating to the performance of their respective functions in the industry. xxx xxxx 18. SEC. 65. Environmental Protection. Participants in the generation, distribution and transmission sub-sectors of the industry shall comply with all environmental laws, rules, regulations and standards promulgated by the Department of Environment and Natural Resources including, in appropriate cases, the establishment of an environmental guarantee fund.

19. SEC. 67. NPC Offer of Transition Supply Contracts. Within six (6) months from the effectivity of this Act, NPC shall file with the ERC for its approval a transition supply contract duly

negotiated with the distribution utilities containing the terms and conditions of supply and a corresponding schedule of rates, consistent with the provisions hereof, including adjustments and/or indexation formulas which shall apply to the term of such contracts. xxxx 20. SEC. 69. Renegotiation of Power Purchase and Energy Conversion Agreements between Government Entities. Within three (3) months from the effectivity of this Act, all power purchase and energy conversion agreements between the PNOCEnergy Development Corporation (PNOC-EDC) and NPC, including but not limited to the Palimpinon, Tongonan and Mt. Apo Geothermal complexes, shall be reviewed by the ERC and the terms thereof amended to remove any hidden costs or extraordinary mark-ups in the cost of power or steam above their true costs. All amended contracts shall be submitted to the Joint Congressional Power Commission for approval. The ERC shall ensure that all savings realized from the reduction of said markups shall be passed on to all end-users.

After comparing the functions of the ERB and the ERC, we find that the ERC indeed assumed the functions of the ERB. However, the overlap in the functions of the ERB and of the ERC does not mean that there is no valid abolition of the ERB. The ERC has new and expanded functions which are intended to meet the specific needs of a deregulated power industry. Indeed, National Land Titles and Deeds Registration Administration v. Civil Service Commission stated that:
[I]f the newly created office has substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the one abolished, even though it embraces all or some of the duties of the old office it will be considered as an abolition of one office and the creation of a new or different one. The same is true if one office is abolished and its duties, for reasons of economy are given to an existing officer or office.[13]

KERB argues that RA 9136 did not abolish the ERB nor did it alter its essential character as an economic regulator of the electric power industry. x x x RA 9136 rather changed merely ERBs name and title to that of the ERC even as it expanded its functions and objectives to keep pace with the times. To uphold KERBs argument regarding the invalidity of the ERBs abolition is to ignore the developments in the history of energy regulation.
The regulation of public services started way back in 1902 with the enactment of Act No. 520 which created the Coastwise Rate Commission. In 1906, Act No. 1507 was passed creating the Supervising Railway Expert. The following year, Act No. 1779 was enacted creating the Board of Rate Regulation. Then, Act No 2307, which was patterned after the Public Service Law of the State of New Jersey, was approved by the Philippine Commission in 1914, creating the Board of Public Utility Commissioners, composed of three members, which absorbed all the functions of the Coastwise Rate Commission, the Supervising Railway Expert, and the Board of Rate Regulation. Thereafter, several laws were enacted on public utility regulation. On November 7, 1936, Commonwealth Act No. 146, otherwise known as the Public Service Law, was enacted by the National Assembly. The Public Service Commission (PSC) had jurisdiction, supervision, and control over all public services, including the electric power service. After almost four decades, significant developments in the energy sector changed the landscape of economic regulation in the country.

April 30, 1971 R.A. No. 6173 was passed creating the Oil Industry Commission (OIC), which was tasked to regulate the oil industry and to ensure the adequate supply of petroleum products at reasonable prices. September 24, 1972 then President Ferdinand E. Marcos issued Presidential Decree No. 1 which ordered the preparation of the Integrated Reorganization Plan by the Commission on Reorganization. The Plan abolished the PSC and transferred the

regulatory and adjudicatory functions pertaining to the electricity industry and water resources to then Board of Power and Waterworks (BOPW).

October 6, 1977 the government created the Department of Energy (DOE) and consequently abolished the OIC, which was replaced by the creation of the Board of Energy (BOE) through Presidential Decree No. 1206. The BOE, in addition, assumed the powers and functions of the BOPW over the electric power industry. May 8, 1987 the BOE was reconstituted into the Energy Regulatory Board (ERB), pursuant to Executive Order No. 172 issued by then President Corazon C. Aquino as part of her governments reorganization program. The rationale was to consolidate and entrust into a single body all the regulatory and adjudicatory functions pertaining to the energy sector. Thus, the power to regulate the power rates and services of private electric utilities was transferred to the ERB. December 28, 1992 Republic Act No. 7638 signed, where the power to fix the rates of the National Power Corporation (NPC) and the rural electric cooperatives (RECs) was passed on to the ERB. Non-pricing functions of the ERB with respect to the petroleum industry were transferred to the DOE, i.e., regulating the capacities of new refineries. February 10, 1998 enactment of Republic Act 8479: Downstream Oil Industry Deregulation Act of 1998, which prescribed a five-month transition period, before full deregulation of the oil industry, during which ERB would implement an automatic pricing mechanism (APM) for petroleum products every month. June 12, 1998 the Philippine oil industry was fully deregulated, thus, ERBs focus of responsibility centered on the electric industry. June 8, 2001 enactment of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001. The Act abolished the ERB and created in its place the Energy Regulatory Commission (ERC) which is a purely

independent regulatory body performing the combined quasijudicial, quasi-legislative and administrative functions in the electric industry.[14]

Throughout the years, the scope of the regulation has gradually narrowed from that of public services in 1902 to the electricity industry and water resources in 1972 to the electric power industry and oil industry in 1977 to the electric industry alone in 1998. The ERC retains the ERBs traditional rate and service regulation functions. However, the ERC now also has to promote competitive operations in the electricity market. RA 9136 expanded the ERCs concerns to encompass both the consumers and the utility investors. Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of the assets of the National Power Corporation (NPC), the transition to a competitive structure, and the delineation of the roles of various government agencies and the private entities. The law ordains the division of the industry into four (4) distinct sectors, namely: generation, transmission, distribution and supply. Corollarily, the NPC generating plants have to privatized and its transmission business spun off and privatized thereafter.
In tandem with the restructuring of the industry is the establishment of a strong and purely independent regulatory body. Thus, the law created the ERC in place of the Energy Regulatory Board (ERB). To achieve its aforestated goal, the law has reconfigured the organization of the regulatory body. x x x[15]

There is no question in our minds that, because of the expansion of the ERCs functions and concerns, there was a valid abolition of the ERB. Thus, there is no merit toKERBs allegation that there is an impairment of the security of tenure of the ERBs employees. WHEREFORE, we DISMISS the petition. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 155336 November 25, 2004

COMMISSION ON HUMAN RIGHTS EMPLOYEES' ASSOCIATION (CHREA) Represented by its President, MARCIAL A. SANCHEZ, JR., petitioner, vs. COMMISSION ON HUMAN RIGHTS, respondent.

DECISION

CHICO-NAZARIO, J.: Can the Commission on Human Rights lawfully implement an upgrading and reclassification of personnel positions without the prior approval of the Department of Budget and Management? Before this Court is a petition for review filed by petitioner Commission on Human Rights Employees' Association (CHREA) challenging the Decision1 dated 29 November 2001 of the Court of Appeals in CA-G.R. SP No. 59678 affirming the Resolutions2 dated 16 December 1999 and 09 June 2000 of the Civil Service Commission (CSC), which sustained the validity of the upgrading and reclassification of certain personnel positions in the Commission on Human Rights (CHR) despite the disapproval thereof by the Department of Budget and Management (DBM). Also assailed is the resolution dated 11 September 2002 of the Court of Appeals denying the motion for reconsideration filed by petitioner. The antecedent facts which spawned the present controversy are as follows: On 14 February 1998, Congress passed Republic Act No. 8522, otherwise known as the General Appropriations Act of 1998. It provided for Special Provisions Applicable to All Constitutional Offices Enjoying Fiscal Autonomy. The last portion of Article XXXIII covers the appropriations of the CHR. These special provisions state: 1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations as authorized in this Act, the Constitutional Commissions and Offices enjoying fiscal autonomy are authorized to formulate and implement the organizational structures of their respective offices, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in their personal services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws,

which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws. 2. Use of Savings. The Constitutional Commissions and Offices enjoying fiscal autonomy are hereby authorized to use savings in their respective appropriations for: (a) printing and/or publication of decisions, resolutions, and training information materials; (b) repair, maintenance and improvement of central and regional offices, facilities and equipment; (c) purchase of books, journals, periodicals and equipment; (d) necessary expenses for the employment of temporary, contractual and casual employees; (e) payment of extraordinary and miscellaneous expenses, commutable representation and transportation allowances, and fringe benefits for their officials and employees as may be authorized by law; and (f) other official purposes, subject to accounting and auditing rules and regulations. (Emphases supplied) on the strength of these special provisions, the CHR, through its then Chairperson Aurora P. Navarette-Recia and Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras, Vicente P. Sibulo, and Jorge R. Coquia, promulgated Resolution No. A98-047 on 04 September 1998, adopting an upgrading and reclassification scheme among selected positions in the Commission, to wit: WHEREAS, the General Appropriations Act, FY 1998, R.A. No. 8522 has provided special provisions applicable to all Constitutional Offices enjoying Fiscal Autonomy, particularly on organizational structures and authorizes the same to formulate and implement the organizational structures of their respective offices to fix and determine the salaries, allowances and other benefits of their personnel and whenever public interest so requires, make adjustments in the personnel services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpanded balance of, or savings in the appropriations of their respective offices; Whereas, the Commission on Human Rights is a member of the Constitutional Fiscal Autonomy Group (CFAG) and on July 24, 1998, CFAG passed an approved Joint Resolution No. 49 adopting internal rules implementing the special provisions heretoforth mentioned; NOW THEREFORE, the Commission by virtue of its fiscal autonomy hereby approves and authorizes the upgrading and augmentation of the commensurate amount generated from savings under Personal Services to support the implementation of this resolution effective Calendar Year 1998; Let the Human Resources Development Division (HRDD) prepare the necessary Notice of Salary Adjustment and other appropriate documents to implement this resolution; . . . .3 (Emphasis supplied) Annexed to said resolution is the proposed creation of ten additional plantilla positions, namely: one Director IV position, with Salary Grade 28 for the Caraga Regional Office, four Security Officer II with Salary Grade 15, and five Process Servers, with Salary Grade 5 under the Office of the Commissioners. 4

On 19 October 1998, CHR issued Resolution No. A98-0555 providing for the upgrading or raising of salary grades of the following positions in the Commission: Number of Positions 12 Position Title From To Attorney VI Director IV (In the Regional Field Offices) Director III Director IV Financial & Director IV Management Officer II Budget Budget Officer III Officer IV Accountant Chief III Accountant Cashier III Cashier V Information Director IV Officer V Salary Grade Total Salary Requirements

From 26

To 28

P229,104.00

4 1

27 24

28 28

38,928.00 36,744.00

1 1 1 1

18 18 18 24

24 24 24 28

51,756.00 51,756.00 51,756.00 36,744.006

It, likewise, provided for the creation and upgrading of the following positions: A. Creation Number of Positions 4 Position Title Security Officer II (Coterminous) Salary Grade 15 Total Salary Requirements 684,780.00

B. Upgrading Number of Positions Position Title To Director IV Security Officer II Salary Grade From 25 11 To 28 15 Total Salary Requirements P28,092.00 57,456.00 ---------------P 85,548.007

From 1 Attorney V 2 Security Officer I Total 3

To support the implementation of such scheme, the CHR, in the same resolution, authorized the augmentation of a commensurate amount generated from savings under Personnel Services.

By virtue of Resolution No. A98-062 dated 17 November 1998, the CHR "collapsed" the vacant positions in the body to provide additional source of funding for said staffing modification. Among the positions collapsed were: one Attorney III, four Attorney IV, one Chemist III, three Special Investigator I, one Clerk III, and one Accounting Clerk II.8 The CHR forwarded said staffing modification and upgrading scheme to the DBM with a request for its approval, but the then DBM secretary Benjamin Diokno denied the request on the following justification: Based on the evaluations made the request was not favorably considered as it effectively involved the elevation of the field units from divisions to services. The present proposal seeks further to upgrade the twelve (12) positions of Attorney VI, SG-26 to Director IV, SG-28. This would elevate the field units to a bureau or regional office, a level even higher than the one previously denied. The request to upgrade the three (3) positions of Director III, SG-27 to Director IV, SG-28, in the Central Office in effect would elevate the services to Office and change the context from support to substantive without actual change in functions. In the absence of a specific provision of law which may be used as a legal basis to elevate the level of divisions to a bureau or regional office, and the services to offices, we reiterate our previous stand denying the upgrading of the twelve (12) positions of Attorney VI, SG-26 to Director III, SG-27 or Director IV, SG-28, in the Field Operations Office (FOO) and three (3) Director III, SG-27 to Director IV, SG-28 in the Central Office. As represented, President Ramos then issued a Memorandum to the DBM Secretary dated 10 December 1997, directing the latter to increase the number of Plantilla positions in the CHR both Central and Regional Offices to implement the Philippine Decade Plan on Human Rights Education, the Philippine Human Rights Plan and Barangay Rights Actions Center in accordance with existing laws. (Emphasis in the original) Pursuant to Section 78 of the General Provisions of the General Appropriations Act (GAA) FY 1998, no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President, thus, the creation of a Finance Management Office and a Public Affairs Office cannot be given favorable recommendation. Moreover, as provided under Section 2 of RA No. 6758, otherwise known as the Compensation Standardization Law, the Department of Budget and Management is directed to establish and administer a unified compensation and position classification system in the government. The Supreme Court ruled in the case of Victorina Cruz vs. Court of Appeals, G.R. No. 119155, dated January 30, 1996, that this Department has the sole power and discretion to administer the compensation and position classification system of the National Government. Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law. We therefore reiterate our previous stand on the matter.9 (Emphases supplied)

In light of the DBM's disapproval of the proposed personnel modification scheme, the CSC-National Capital Region Office, through a memorandum dated 29 March 1999, recommended to the CSCCentral Office that the subject appointments be rejected owing to the DBM's disapproval of the plantilla reclassification. Meanwhile, the officers of petitioner CHREA, in representation of the rank and file employees of the CHR, requested the CSC-Central Office to affirm the recommendation of the CSC-Regional Office. CHREA stood its ground in saying that the DBM is the only agency with appropriate authority mandated by law to evaluate and approve matters of reclassification and upgrading, as well as creation of positions. The CSC-Central Office denied CHREA's request in a Resolution dated 16 December 1999, and reversed the recommendation of the CSC-Regional Office that the upgrading scheme be censured. The decretal portion of which reads: WHEREFORE, the request of Ronnie N. Rosero, Hubert V. Ruiz, Flordeliza A. Briones, George Q. Dumlao [and], Corazon A. Santos-Tiu, is hereby denied.10 CHREA filed a motion for reconsideration, but the CSC-Central Office denied the same on 09 June 2000. Given the cacophony of judgments between the DBM and the CSC, petitioner CHREA elevated the matter to the Court of Appeals. The Court of Appeals affirmed the pronouncement of the CSC-Central Office and upheld the validity of the upgrading, retitling, and reclassification scheme in the CHR on the justification that such action is within the ambit of CHR's fiscal autonomy. The fallo of the Court of Appeals decision provides: IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED and the questioned Civil Service Commission Resolution No. 99-2800 dated December 16, 1999 as well as No. 001354 dated June 9, 2000, are hereby AFFIRMED. No cost.11 Unperturbed, petitioner filed this petition in this Court contending that: A. THE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT UNDER THE 1987 CONSTITUTION, THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY. B. THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE CONSTRUCTION OF THE COMMISSION ON HUMAN RIGHTS OF REPUBLIC ACT NO. 8522 (THE GENERAL APPROPRIATIONS ACT FOR THE FISCAL YEAR 1998) DESPITE ITS BEING IN SHARP CONFLICT WITH THE 1987 CONSTITUTION AND THE STATUTE ITSELF. C. THE COURT OF APPEALS SERIOUSLY AND GRAVELY ERRED IN AFFIRMING THE VALIDITY OF THE CIVIL SERVICE COMMISSION RESOLUTION NOS. 992800 AND 001354 AS WELL AS THAT OF THE OPINION OF THE DEPARTMENT OF JUSTICE IN

STATING THAT THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY UNDER THE 1987 CONSTITUTION AND THAT THIS FISCAL AUTONOMY INCLUDES THE ACTION TAKEN BY IT IN COLLAPSING, UPGRADING AND RECLASSIFICATION OF POSITIONS THEREIN.12 The central question we must answer in order to resolve this case is: Can the Commission on Human Rights validly implement an upgrading, reclassification, creation, and collapsing of plantilla positions in the Commission without the prior approval of the Department of Budget and Management? Petitioner CHREA grouses that the Court of Appeals and the CSC-Central Office both erred in sanctioning the CHR's alleged blanket authority to upgrade, reclassify, and create positions inasmuch as the approval of the DBM relative to such scheme is still indispensable. Petitioner bewails that the CSC and the Court of Appeals erroneously assumed that CHR enjoys fiscal autonomy insofar as financial matters are concerned, particularly with regard to the upgrading and reclassification of positions therein. Respondent CHR sharply retorts that petitioner has no locus standi considering that there exists no official written record in the Commission recognizing petitioner as a bona fide organization of its employees nor is there anything in the records to show that its president, Marcial A. Sanchez, Jr., has the authority to sue the CHR. The CHR contends that it has the authority to cause the upgrading, reclassification, plantilla creation, and collapsing scheme sans the approval of the DBM because it enjoys fiscal autonomy. After a thorough consideration of the arguments of both parties and an assiduous scrutiny of the records in the case at bar, it is the Court's opinion that the present petition is imbued with merit. On petitioner's personality to bring this suit, we held in a multitude of cases that a proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of.13 Here, petitioner, which consists of rank and file employees of respondent CHR, protests that the upgrading and collapsing of positions benefited only a select few in the upper level positions in the Commission resulting to the demoralization of the rank and file employees. This sufficiently meets the injury test. Indeed, the CHR's upgrading scheme, if found to be valid, potentially entails eating up the Commission's savings or that portion of its budgetary pie otherwise allocated for Personnel Services, from which the benefits of the employees, including those in the rank and file, are derived. Further, the personality of petitioner to file this case was recognized by the CSC when it took cognizance of the CHREA's request to affirm the recommendation of the CSC-National Capital Region Office. CHREA's personality to bring the suit was a non-issue in the Court of Appeals when it passed upon the merits of this case. Thus, neither should our hands be tied by this technical concern. Indeed, it is settled jurisprudence that an issue that was neither raised in the complaint nor in the court below cannot be raised for the first time on appeal, as to do so would be offensive to the basic rules of fair play, justice, and due process.14 We now delve into the main issue of whether or not the approval by the DBM is a condition precedent to the enactment of an upgrading, reclassification, creation and collapsing of plantilla positions in the CHR. Germane to our discussion is Rep. Act No. 6758, An Act Prescribing a Revised Compensation and Position Classification System in the Government and For Other Purposes, or the Salary Standardization Law, dated 01 July 1989, which provides in Sections 2 and 4 thereof that it is the

DBM that shall establish and administer a unified Compensation and Position Classification System. Thus: SEC. 2. Statement of Policy. -- It is hereby declared the policy of the State to provide equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions. In determining rates of pay, due regard shall be given to, among others, prevailing rates in the private sector for comparable work. For this purpose, the Department of Budget and Management (DBM) is hereby directed to establish and administer a unified Compensation and Position Classification System, hereinafter referred to as the System as provided for in Presidential Decree No. 985, as amended, that shall be applied for all government entities, as mandated by the Constitution. (Emphasis supplied.) SEC. 4. Coverage. The Compensation and Position Classification System herein provided shall apply to all positions, appointive or elective, on full or part-time basis, now existing or hereafter created in the government, including government-owned or controlled corporations and government financial institutions. The term "government" refers to the Executive, the Legislative and the Judicial Branches and the Constitutional Commissions and shall include all, but shall not be limited to, departments, bureaus, offices, boards, commissions, courts, tribunals, councils, authorities, administrations, centers, institutes, state colleges and universities, local government units, and the armed forces. The term "government-owned or controlled corporations and financial institutions" shall include all corporations and financial institutions owned or controlled by the National Government, whether such corporations and financial institutions perform governmental or proprietary functions. (Emphasis supplied.) The disputation of the Court of Appeals that the CHR is exempt from the long arm of the Salary Standardization Law is flawed considering that the coverage thereof, as defined above, encompasses the entire gamut of government offices, sans qualification. This power to "administer" is not purely ministerial in character as erroneously held by the Court of Appeals. The word to administer means to control or regulate in behalf of others; to direct or superintend the execution, application or conduct of; and to manage or conduct public affairs, as to administer the government of the state.15 The regulatory power of the DBM on matters of compensation is encrypted not only in law, but in jurisprudence as well. In the recent case of Philippine Retirement Authority (PRA) v. Jesusito L. Buag,16 this Court, speaking through Mr. Justice Reynato Puno, ruled that compensation, allowances, and other benefits received by PRA officials and employees without the requisite approval or authority of the DBM are unauthorized and irregular. In the words of the Court Despite the power granted to the Board of Directors of PRA to establish and fix a compensation and benefits scheme for its employees, the same is subject to the review of the Department of Budget and Management. However, in view of the express powers granted to PRA under its charter, the extent of the review authority of the Department of Budget and Management is limited. As stated in Intia, the task of the Department of Budget and Management is simply to review the compensation and benefits plan of the government agency or entity concerned and determine if the same complies with the prescribed policies and guidelines issued in this regard. The role of the Department of Budget and Management is supervisorial in nature, its main duty being to ascertain that the proposed compensation, benefits and other incentives to be given to PRA officials and employees adhere to the policies and guidelines issued in accordance with applicable laws.

In Victorina Cruz v. Court of Appeals,17 we held that the DBM has the sole power and discretion to administer the compensation and position classification system of the national government. In Intia, Jr. v. Commission on Audit,18 the Court held that although the charter19 of the Philippine Postal Corporation (PPC) grants it the power to fix the compensation and benefits of its employees and exempts PPC from the coverage of the rules and regulations of the Compensation and Position Classification Office, by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is, nonetheless, subject to the review of the DBM. This Court intoned: It should be emphasized that the review by the DBM of any PPC resolution affecting the compensation structure of its personnel should not be interpreted to mean that the DBM can dictate upon the PPC Board of Directors and deprive the latter of its discretion on the matter. Rather, the DBM's function is merely to ensure that the action taken by the Board of Directors complies with the requirements of the law, specifically, that PPC's compensation system "conforms as closely as possible with that provided for under R.A. No. 6758." (Emphasis supplied.) As measured by the foregoing legal and jurisprudential yardsticks, the imprimatur of the DBM must first be sought prior to implementation of any reclassification or upgrading of positions in government. This is consonant to the mandate of the DBM under the Revised Administrative Code of 1987, Section 3, Chapter 1, Title XVII, to wit: SEC. 3. Powers and Functions. The Department of Budget and Management shall assist the President in the preparation of a national resources and expenditures budget, preparation, execution and control of the National Budget, preparation and maintenance of accounting systems essential to the budgetary process, achievement of more economy and efficiency in the management of government operations, administration of compensation and position classification systems, assessment of organizational effectiveness and review and evaluation of legislative proposals having budgetary or organizational implications. (Emphasis supplied.) Irrefragably, it is within the turf of the DBM Secretary to disallow the upgrading, reclassification, and creation of additional plantilla positions in the CHR based on its finding that such scheme lacks legal justification. Notably, the CHR itself recognizes the authority of the DBM to deny or approve the proposed reclassification of positions as evidenced by its three letters to the DBM requesting approval thereof. As such, it is now estopped from now claiming that the nod of approval it has previously sought from the DBM is a superfluity. The Court of Appeals incorrectly relied on the pronouncement of the CSC-Central Office that the CHR is a constitutional commission, and as such enjoys fiscal autonomy.20 Palpably, the Court of Appeals' Decision was based on the mistaken premise that the CHR belongs to the species of constitutional commissions. But, Article IX of the Constitution states in no uncertain terms that only the CSC, the Commission on Elections, and the Commission on Audit shall be tagged as Constitutional Commissions with the appurtenant right to fiscal autonomy. Thus: Sec. 1. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. Sec. 5. The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released.

Along the same vein, the Administrative Code, in Chapter 5, Sections 24 and 26 of Book II on Distribution of Powers of Government, the constitutional commissions shall include only the Civil Service Commission, the Commission on Elections, and the Commission on Audit, which are granted independence and fiscal autonomy. In contrast, Chapter 5, Section 29 thereof, is silent on the grant of similar powers to the other bodies including the CHR. Thus: SEC. 24. Constitutional Commissions. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. SEC. 26. Fiscal Autonomy. The Constitutional Commissions shall enjoy fiscal autonomy. The approved annual appropriations shall be automatically and regularly released. SEC. 29. Other Bodies. There shall be in accordance with the Constitution, an Office of the Ombudsman, a Commission on Human Rights, and independent central monetary authority, and a national police commission. Likewise, as provided in the Constitution, Congress may establish an independent economic and planning agency. (Emphasis ours.) From the 1987 Constitution and the Administrative Code, it is abundantly clear that the CHR is not among the class of Constitutional Commissions. As expressed in the oft-repeated maxim expressio unius est exclusio alterius, the express mention of one person, thing, act or consequence excludes all others. Stated otherwise, expressium facit cessare tacitum what is expressed puts an end to what is implied.21 Nor is there any legal basis to support the contention that the CHR enjoys fiscal autonomy. In essence, fiscal autonomy entails freedom from outside control and limitations, other than those provided by law. It is the freedom to allocate and utilize funds granted by law, in accordance with law, and pursuant to the wisdom and dispatch its needs may require from time to time.22 In Blaquera v. Alcala and Bengzon v. Drilon,23 it is understood that it is only the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman, which enjoy fiscal autonomy. Thus, in Bengzon,24 we explained: As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions. ... The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. In the interest of comity and cooperation, the Supreme Court, [the] Constitutional Commissions, and the Ombudsman have so far

limited their objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision. (Emphasis supplied.) Neither does the fact that the CHR was admitted as a member by the Constitutional Fiscal Autonomy Group (CFAG) ipso facto clothed it with fiscal autonomy. Fiscal autonomy is a constitutional grant, not a tag obtainable by membership. We note with interest that the special provision under Rep. Act No. 8522, while cited under the heading of the CHR, did not specifically mention CHR as among those offices to which the special provision to formulate and implement organizational structures apply, but merely states its coverage to include Constitutional Commissions and Offices enjoying fiscal autonomy. In contrast, the Special Provision Applicable to the Judiciary under Article XXVIII of the General Appropriations Act of 1998 specifically mentions that such special provision applies to the judiciary and had categorically authorized the Chief Justice of the Supreme Court to formulate and implement the organizational structure of the Judiciary, to wit: 1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations authorized in this Act, the Chief Justice of the Supreme Court is authorized to formulate and implement organizational structure of the Judiciary, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in the personal services itemization including, but not limited to, the transfer of item or creation of new positions in the Judiciary; PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing law, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws. (Emphasis supplied.) All told, the CHR, although admittedly a constitutional creation is, nonetheless, not included in the genus of offices accorded fiscal autonomy by constitutional or legislative fiat. Even assuming en arguendo that the CHR enjoys fiscal autonomy, we share the stance of the DBM that the grant of fiscal autonomy notwithstanding, all government offices must, all the same, kowtow to the Salary Standardization Law. We are of the same mind with the DBM on its standpoint, thusBeing a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law.25 (Emphasis supplied.) The most lucid argument against the stand of respondent, however, is the provision of Rep. Act No. 8522 "that the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws."26 Indeed, the law upon which respondent heavily anchors its case upon has expressly provided that any form of adjustment in the organizational structure must be within the parameters of the Salary Standardization Law.

The Salary Standardization Law has gained impetus in addressing one of the basic causes of discontent of many civil servants.27 For this purpose, Congress has delegated to the DBM the power to administer the Salary Standardization Law and to ensure that the spirit behind it is observed. This power is part of the system of checks and balances or system of restraints in our government. The DBM's exercise of such authority is not in itself an arrogation inasmuch as it is pursuant to the paramount law of the land, the Salary Standardization Law and the Administrative Code. In line with its role to breathe life into the policy behind the Salary Standardization Law of "providing equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions," the DBM, in the case under review, made a determination, after a thorough evaluation, that the reclassification and upgrading scheme proposed by the CHR lacks legal rationalization. The DBM expounded that Section 78 of the general provisions of the General Appropriations Act FY 1998, which the CHR heavily relies upon to justify its reclassification scheme, explicitly provides that "no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President." Here, the DBM discerned that there is no law authorizing the creation of a Finance Management Office and a Public Affairs Office in the CHR. Anent CHR's proposal to upgrade twelve positions of Attorney VI, SG-26 to Director IV, SG-28, and four positions of Director III, SG-27 to Director IV, SG-28, in the Central Office, the DBM denied the same as this would change the context from support to substantive without actual change in functions. This view of the DBM, as the law's designated body to implement and administer a unified compensation system, is beyond cavil. The interpretation of an administrative government agency, which is tasked to implement a statute is accorded great respect and ordinarily controls the construction of the courts. In Energy Regulatory Board v. Court of Appeals,28 we echoed the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies. To be sure, considering his expertise on matters affecting the nation's coffers, the Secretary of the DBM, as the President's alter ego, knows from where he speaks inasmuch as he has the front seat view of the adverse effects of an unwarranted upgrading or creation of positions in the CHR in particular and in the entire government in general. WHEREFORE, the petition is GRANTED, the Decision dated 29 November 2001 of the Court of Appeals in CA-G.R. SP No. 59678 and its Resolution dated 11 September 2002 are hereby REVERSED and SET ASIDE. The ruling dated 29 March 1999 of the Civil Service CommisionNational Capital Region is REINSTATED. The Commission on Human Rights Resolution No. A98047 dated 04 September 1998, Resolution No. A98-055 dated 19 October 1998 and Resolution No. A98-062 dated 17 November 1998 without the approval of the Department of Budget and Management are disallowed. No pronouncement as to costs. SO ORDERED.

EN BANC
ANAK MINDANAO PARTYLIST GROUP, as represented by Rep. Mujiv S. Hataman, and MAMALO DESCENDANTS ORGANIZATION, INC., as represented by its Chairman Romy Pardi, Petitioners, G.R. No. 166052 Present: PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, VELASCO, JR., NACHURA, and REYES, JJ.

- versus -

THE EXECUTIVE SECRETARY, THE HON. EDUARDO R. ERMITA, and Promulgated: THE SECRETARY OF AGRARIAN/LAND REFORM, August 29, 2007 THE HON. RENE C. VILLA, Respondents. x----------------------------------------------------------------------------------------x

DECISION

CARPIO MORALES, J.: Petitioners Anak Mindanao Party-List Group (AMIN) and Mamalo Descendants Organization, Inc. (MDOI) assail the constitutionality of Executive Order (E.O.) Nos. 364 and 379, both issued in 2004, via the present Petition for Certiorari and Prohibition with prayer for injunctive relief.

E.O. No. 364, which on September 27, 2004, reads:

President

Gloria Macapagal-Arroyo

issued

EXECUTIVE ORDER NO. 364 TRANSFORMING THE DEPARTMENT OF AGRARIAN REFORM INTO THE DEPARTMENT OF LAND REFORM WHEREAS, one of the five reform packages of the Arroyo administration is Social Justice and Basic [N]eeds; WHEREAS, one of the five anti-poverty measures for social justice is asset reform; WHEREAS, asset reforms covers [sic] agrarian reform, urban land reform, and ancestral domain reform; WHEREAS, urban land reform is a concern of the Presidential Commission [for] the Urban Poor (PCUP) and ancestral domain reform is a concern of the National Commission on Indigenous Peoples (NCIP); WHEREAS, another of the five reform packages of the Arroyo administration is Anti-Corruption and Good Government; WHEREAS, one of the Good Government reforms of the Arroyo administration is rationalizing the bureaucracy by consolidating related functions into one department; WHEREAS, under law and jurisprudence, the President of the Philippines has broad powers to reorganize the offices under her supervision and control; NOW[,] THEREFORE[,] I, Gloria Macapagal-Arroyo, by the powers vested in me as President of the Republic of the Philippines, do hereby order: SECTION 1. The Department of Agrarian Reform is hereby transformed into the Department of Land Reform. It shall be responsible for all land reform in the country, including agrarian reform, urban land reform, and ancestral domain reform.

SECTION 2. The PCUP is hereby placed under the supervision and control of the Department of Land Reform. The Chairman of the PCUP shall be ex-officio Undersecretary of the Department of Land Reform for Urban Land Reform. SECTION 3. The NCIP is hereby placed under the supervision and control of the Department of Land Reform. The Chairman of the NCIP shall be ex-officio Undersecretary of the Department of Land Reform for Ancestral Domain Reform. SECTION 4. The PCUP and the NCIP shall have access to the services provided by the Departments Finance, Management and Administrative Office; Policy, Planning and Legal Affairs Office, Field Operations and Support Services Office, and all other offices of the Department of Land Reform. SECTION 5. All previous issuances that conflict with this Executive Order are hereby repealed or modified accordingly. SECTION 6. This Executive Order takes effect immediately. (Emphasis and underscoring supplied)

E.O. No. 379, which amended E.O. No. 364 a month later or on October 26, 2004, reads:
EXECUTIVE ORDER NO. 379 AMENDING EXECUTIVE ORDER NO. 364 ENTITLED TRANSFORMING THE DEPARTMENT OF AGRARIAN REFORM INTO THE DEPARTMENT OF LAND REFORM WHEREAS, Republic Act No. 8371 created the National Commission on Indigenous Peoples; WHEREAS, pursuant to the Administrative Code of 1987, the President has the continuing authority to reorganize the administrative structure of the National Government.

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and existing laws, do hereby order: Section 1. Amending Section 3 of Executive Order No. 364. Section 3 of Executive Order No. 364, dated September 27, 2004 shall now read as follows: Section 3. The National Commission on Indigenous Peoples (NCIP) shall be an attached agency of the Department of Land Reform. Section 2. Compensation. The Chairperson shall suffer no diminution in rank and salary. Section 3. Repealing Clause. All executive issuances, rules and regulations or parts thereof which are inconsistent with this Executive Order are hereby revoked, amended or modified accordingly. Section 4. Effectivity. This Executive Order shall take effect immediately. (Emphasis and underscoring in the original)

Petitioners contend that the two presidential issuances are unconstitutional for violating:
THE CONSTITUTIONAL PRINCIPLES OF SEPARATION OF POWERS AND OF THE RULE OF LAW[;] - THE CONSTITUTIONAL SCHEME AND POLICIES FOR AGRARIAN REFORM, URBAN LAND REFORM, INDIGENOUS PEOPLES RIGHTS AND ANCESTRAL DOMAIN[; AND] - THE CONSTITUTIONAL RIGHT OF THE PEOPLE AND THEIR ORGANIZATIONS TO EFFECTIVE AND REASONABLE PARTICIPATION IN DECISION-MAKING, INCLUDING [1] THROUGH ADEQUATE CONSULTATION[.]

By Resolution of December 6, 2005, this Court gave due course to the Petition and required the submission of memoranda, with which petitioners and respondents complied on March 24, 2006 and April 11, 2006, respectively.

The issue on the transformation of the Department of Agrarian Reform (DAR) into the Department of Land Reform (DLR) became moot and academic, however, the department having reverted to its former name by virtue of E.O. No. 456[2] which was issued on August 23, 2005. The Court is thus left with the sole issue of the legality of placing the Presidential Commission[3] for the Urban Poor (PCUP) under the supervision and control of the DAR, and the National Commission on Indigenous Peoples (NCIP) under the DAR as an attached agency. Before inquiring into the validity of the reorganization, petitioners locus standi or legal standing, inter alia,[4] becomes a preliminary question. The Office of the Solicitor General (OSG), on behalf of respondents, concedes that AMIN[5] has the requisite legal standing to file this suit as member[6] of Congress. Petitioners find it impermissible for the Executive to intrude into the domain of the Legislature. They posit that an act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which can be questioned by a member of Congress.[7] They add that to the extent that the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of the powers of that institution.[8] Indeed, a member of the House of Representatives has standing to maintain inviolate the prerogatives, powers and privileges vested by the Constitution in his office.[9] The OSG questions, however, the standing of MDOI, a registered peoples organization of Teduray and Lambangian tribesfolk of (North) Upi and South Upi in theprovince of Maguindanao. As co-petitioner, MDOI alleges that it is concerned with the negative impact of NCIPs becoming an attached agency of the DAR on the processing of ancestral

domain claims. It fears that transferring the NCIP to the DAR would affect the processing of ancestral domain claims filed by its members. Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The gist of the question of standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions.[10] It has been held that a party who assails the constitutionality of a statute must have a direct and personal interest. It must show not only that the law or any governmental act is invalid, but also that it sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that it suffers thereby in some indefinite way. It must show that it has been or is about to be denied some right or privilege to which it is lawfully entitled or that it is about to be subjected to some burdens or penalties by reason of the statute or act complained of.[11] For a concerned party to be allowed to raise a constitutional question, it must show that (1) it has personally suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government, (2) the injury is fairly traceable to the challenged action, and (3) the injury is likely to be redressed by a favorable action.[12] An examination of MDOIs nebulous claims of negative impact and probable setbacks[13] shows that they are too abstract to be considered judicially cognizable. And the line of causation it proffers between the challenged action and alleged injury is too attenuated. Vague propositions that the implementation of the assailed orders will work injustice and violate the rights of its members cannot clothe MDOI with the requisite standing. Neither would its status as a peoples organization vest it with the legal standing to assail the validity of the executive orders.[14]

La Bugal-Blaan Tribal Association, Inc. v. Ramos,[15] which MDOI cites in support of its claim to legal standing, is inapplicable as it is not similarly situated with the therein petitioners who alleged personal and substantial injury resulting from the mining activities permitted by the assailed statute. And so is Cruz v. Secretary of Environment and Natural Resources,[16] for the indigenous peoples leaders and organizations were not the petitioners therein, who necessarily had to satisfy the locus standi requirement, but were intervenors who sought and were allowed to be impleaded, not to assail but to defend the constitutionality of the statute. Moreover, MDOI raises no issue of transcendental importance to justify a relaxation of the rule on legal standing. To be accorded standing on the ground of transcendental importance, Senate of the Philippines v. Ermita[17] requires that the following elements must be established: (1) the public character of the funds or other assets involved in the case, (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of government, and (3) the lack of any other party with a more direct and specific interest in raising the questions being raised. The presence of these elements MDOI failed to establish, much less allege. Francisco, Jr. v. Fernando[18] more specifically declares that the transcendental importance of the issues raised must relate to the merits of the petition. This Court, not being a venue for the ventilation of generalized grievances, must thus deny adjudication of the matters raised by MDOI. Now, on AMINs position. AMIN charges the Executive Department with transgression of the principle of separation of powers. Under the principle of separation of powers, Congress, the President, and the Judiciary may not encroach on fields allocated to each of them. The legislature is generally limited to the enactment of laws, the executive to the enforcement of laws, and the judiciary to their interpretation and application to cases and controversies. The principle presupposes mutual respect by and between the

executive, legislative and judicial departments of the government and calls for them to be left alone to discharge their duties as they see fit.[19] AMIN contends that since the DAR, PCUP and NCIP were created by statutes,[20] they can only be transformed, merged or attached by statutes, not by mere executive orders. While AMIN concedes that the executive power is vested in the President[21] who, as Chief Executive, holds the power of control of all the executive departments, bureaus, and offices,[22] it posits that this broad power of control including the power to reorganize is qualified and limited, for it cannot be exercised in a manner contrary to law, citing the constitutional duty[23] of the President to ensure that the laws, including those creating the agencies, be faithfully executed. AMIN cites the naming of the PCUP as a presidential commission to be clearly an extension of the President, and the creation of the NCIP as an independent agency under the Office of the President.[24] It thus argues that since the legislature had seen fit to create these agencies at separate times and with distinct mandates, the President should respect that legislative disposition. In fine, AMIN contends that any reorganization of these administrative agencies should be the subject of a statute. AMINs position fails to impress. The Constitution confers, by express provision, the power of control over executive departments, bureaus and offices in the President alone. And it lays down a limitation on the legislative power.
The line that delineates the Legislative and Executive power is not indistinct. Legislative power is the authority, under the Constitution, to make laws, and to alter and repeal them. The Constitution, as the will of the people in their original, sovereign and unlimited capacity, has vested this power in the Congress of the Philippines. The grant of legislative power to Congress is broad,

general and comprehensive. The legislative body possesses plenary power for all purposes of civil government. Any power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it elsewhere. In fine, except as limited by the Constitution, either expressly or impliedly, legislative power embraces all subjects and extends to matters of general concern or common interest. While Congress is vested with the power to enact laws, the President executes the laws. The executive power is vested in the President. It is generally defined as the power to enforce and administer the laws. It is the power of carrying the laws into practical operation and enforcing their due observance. As head of the Executive Department, the President is the Chief Executive. He represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department. He has control over the executive department, bureaus and offices. This means that he has the authority to assume directly the functions of the executive department, bureau and office, or interfere with the discretion of its officials. Corollary to the power of control, the President also has the duty of supervising and enforcement of laws for the maintenance of general peace and public order. Thus, he is granted administrative power over bureaus and offices under his control to enable him to discharge his duties effectively.[25] (Italics omitted, underscoring supplied)

The Constitutions express grant of the power of control in the President justifies an executive action to carry out reorganization measures under a broad authority of law.[26] In enacting a statute, the legislature is presumed to have deliberated with full knowledge of all existing laws and jurisprudence on the subject.[27] It is thus reasonable to conclude that in passing a statute which places an agency under the Office of the President, it was in accordance with existing laws and jurisprudence on the Presidents power to reorganize.

In establishing an executive department, bureau or office, the legislature necessarily ordains an executive agencys position in the scheme of administrative structure. Such determination is primary,[28] but subject to the Presidents continuing authority to reorganize the administrative structure. As far as bureaus, agencies or offices in the executive department are concerned, the power of control may justify the President to deactivate the functions of a particular office. Or a law may expressly grant the President the broad authority to carry out reorganization measures.[29] The Administrative Code of 1987 is one such law:[30]
SEC. 30. Functions of Agencies under the Office of the President. Agencies under the Office of the President shall continue to operate and function in accordance with their respective charters or laws creating them, except as otherwise provided in this Code or by law. SEC. 31. Continuing Authority of the President to Reorganize his Office. The President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may take any of the following actions: (1) Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers System and the Common Staff Support System, by abolishing, consolidating, or merging units thereof or transferring functions from one unit to another; (2) Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions to the Office of the President from other Departments and Agencies; and (3) Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from other departments or agencies.[31] (Italics in the original; emphasis and underscoring supplied)

In carrying out the laws into practical operation, the President is best equipped to assess whether an executive agency ought to continue operating in

accordance with its charter or the law creating it. This is not to say that the legislature is incapable of making a similar assessment and appropriate action within its plenary power. The Administrative Code of 1987 merely underscores the need to provide the President with suitable solutions to situations on hand to meet the exigencies of the service that may call for the exercise of the power of control.
x x x The law grants the President this power in recognition of the recurring need of every President to reorganize his office to achieve simplicity, economy and efficiency. The Office of the President is the nerve center of the Executive Branch. To remain effective and efficient, the Office of the President must be capable of being shaped and reshaped by the President in the manner he deems fit to carry out his directives and policies. After all, the Office of the President is the command post of the President. This is the rationale behind the Presidents continuing authority to reorganize the administrative structure of the Office of the President.[32]

The Office of the President consists of the Office of the President proper and the agencies under it.[33] It is not disputed that PCUP and NCIP were formed as agencies under the Office of the President.[34] The Agencies under the Office of the President refer to those offices placed under the chairmanship of the President, those under the supervision and control of the President, those under the administrative supervision of the Office of the President, those attached to the Office for policy and program coordination, and those that are not placed by law or order creating them under any special department.[35] As thus provided by law, the President may transfer any agency under the Office of the President to any other department or agency, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency. Gauged against these guidelines,[36] the challenged executive orders may not be said to have been issued with grave abuse of discretion or in violation of the rule of law. The references in E.O. 364 to asset reform as an anti-poverty measure for social justice and to rationalization of the bureaucracy in furtherance of good

government[37]encapsulate a portion of the existing policy in the Executive Office. As averred by the OSG, the President saw it fit to streamline the agencies so as not to hinder the delivery of crucial social reforms.[38] The consolidation of functions in E.O. 364 aims to attain the objectives of simplicity, economy and efficiency as gathered from the provision granting PCUP and NCIP access to the range of services provided by the DARs technical offices and support systems.[39] The characterization of the NCIP as an independent agency under the Office of the President does not remove said body from the Presidents control and supervision with respect to its performance of administrative functions. So it has been opined:
That Congress did not intend to place the NCIP under the control of the President in all instances is evident in the IPRA itself, which provides that the decisions of the NCIP in the exercise of its quasijudicial functions shall be appealable to the Court of Appeals, like those of the National Labor Relations Commission (NLRC) and the Securities and Exchange Commission (SEC). Nevertheless, the NCIP, although independent to a certain degree, was placed by Congress under the office of the President and, as such, is still subject to the Presidents power of control and supervision granted under Section 17, Article VII of the Constitution with respect to its performance of administrative functions[.][40] (Underscoring supplied)

In transferring the NCIP to the DAR as an attached agency, the President effectively tempered the exercise of presidential authority and considerably recognized that degree of independence. The Administrative Code of 1987 categorizes administrative relationships into (1) supervision and control, (2) administrative supervision, and (3) attachment.[41] With respect to the third category, it has been held that an attached agency has a larger measure of independence from the Department to which it is attached than one which is under departmental supervision and control or administrative supervision. This is borne out by the lateral relationship between the Department and the attached agency. The attachment is merely for policy and

program coordination.[42] Indeed, the essential autonomous character of a board is not negated by its attachment to a commission.[43] AMIN argues, however, that there is an anachronism of sorts because there can be no policy and program coordination between conceptually different areas of reform. It claims that the new framework subsuming agrarian reform, urban land reform and ancestral domain reform is fundamentally incoherent in view of the widely different contexts.[44] And it posits that it is a substantive transformation or reorientation that runs contrary to the constitutional scheme and policies. AMIN goes on to proffer the concept of ordering the law [45] which, so it alleges, can be said of the Constitutions distinct treatment of these thre e areas, as reflected in separate provisions in different parts of the Constitution.[46] It argues that the Constitution did not intend an over-arching concept of agrarian reform to encompass the two other areas, and that how the law is ordered in a certain way should not be undermined by mere executive orders in the guise of administrative efficiency. The Court is not persuaded.

The interplay of various areas of reform in the promotion of social justice is not something implausible or unlikely.[47] Their interlocking nature cuts across labels and works against a rigid pigeonholing of executive tasks among the members of the Presidents official family. Notably, the Constitution inhibited from identifying and compartmentalizing the composition of the Cabinet. In vesting executive power in one person rather than in a plural executive, the evident intention was to invest the power holder with energy.[48] AMIN takes premium on the severed treatment of these reform areas in marked provisions of the Constitution. It is a precept, however, that inferences drawn from title, chapter or section headings are entitled to very little weight.[49] And so must reliance on sub-headings,[50] or the lack thereof, to support a strained deduction be given the weight of helium.

Secondary aids may be consulted to remove, not to create doubt. [51] AMINs thesis unsettles, more than settles the order of things in construing the Constitution. Its interpretation fails to clearly establish that the so-called ordering or arrangement of provisions in the Constitution was consciously adopted to imply a signification in terms of government hierarchy from where a constitutional mandate can per se be derived or asserted. It fails to demonstrate that the ordering or layout was not simply a matter of style in constitutional drafting but one of intention in government structuring. With its inherent ambiguity, the proposed interpretation cannot be made a basis for declaring a law or governmental act unconstitutional. A law has in its favor the presumption of constitutionality. For it to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution. The ground for nullity must be clear and beyond reasonable doubt.[52] Any reasonable doubt should, following the universal rule of legal hermeneutics, be resolved in favor of the constitutionality of a law.[53] Ople v. Torres[54] on which AMIN relies is unavailing. In that case, an administrative order involved a system of identification that required a delicate adjustment of various contending state policies properly lodged in the legislative arena. It was declared unconstitutional for dealing with a subject that should be covered by law and for violating the right to privacy. In the present case, AMIN glaringly failed to show how the reorganization by executive fiat would hamper the exercise of citizens rights and privileges. It rested on the ambiguous conclusion that the reorganization jeopardizes economic, social and cultural rights. It intimated, without expounding, that the agendum behind the issuances is to weaken the indigenous peoples rights in favor of the mining industry. And it raised concerns about the possible retrogression in DARs performance as the added workload may impede the implementation of the comprehensive agrarian reform program. AMIN has not shown, however, that by placing the NCIP as an attached agency of the DAR, the President altered the nature and dynamics of the jurisdiction and adjudicatory functions of the NCIP concerning all claims and disputes involving rights of indigenous cultural communities and

indigenous peoples. Nor has it been shown, nay alleged, that the reorganization was made in bad faith.[55] As for the other arguments raised by AMIN which pertain to the wisdom or soundness of the executive decision, the Court finds it unnecessary to pass upon them. The raging debate on the most fitting framework in the delivery of social services is endless in the political arena. It is not the business of this Court to join in the fray. Courts have no judicial power to review cases involving political questions and, as a rule, will desist from taking cognizance of speculative or hypothetical cases, advisory opinions and cases that have become moot.[56] Finally, a word on the last ground proffered for declaring the unconstitutionality of the assailed issuances that they violate Section 16, Article XIII of the Constitution[57]on the peoples right to participate in decision -making through adequate consultation mechanisms. The framers of the Constitution recognized that the consultation mechanisms were already operating without the States action by law, such that the role of the State would be mere facilitation, not necessarily creation of these consultation mechanisms. The State provides the support, but eventually it is the people, properly organized in their associations, who can assert the right and pursue the objective. Penalty for failure on the part of the government to consult could only be reflected in the ballot box and would not nullify government action.[58]

WHEREFORE, the petition is DISMISSED. Executive Order Nos. 364 and 379 issued on September 27, 2004 and October 26, 2004, respectively, are declared not unconstitutional. SO ORDERED.

FIRST DIVISION

[G.R. No. 152845. August 5, 2003]

DRIANITA BAGAOISAN, FELY MADRIAGA, SHIRLY TAGABAN, RICARDO SARANDI, SUSAN IMPERIAL, BENJAMIN DEMDEM, RODOLFO DAGA, EDGARDO BACLIG, GREGORIO LABAYAN, HILARIO JEREZ, and MARIA CORAZON CUANANG, petitioners, vs. NATIONAL TOBACCO ADMINISTRATION, represented by ANTONIO DE GUZMAN and PERLITA BAULA, respondents. DECISION
VITUG, J.:

President Joseph Estrada issued on 30 September 1998 Executive Order No. 29, entitled Mandating the Streamlining of the National Tobacco Administration (NTA), a government agency under the Department of Agriculture. The order was followed by another issuance, on 27 October 1998, by President Estrada of Executive Order No. 36, amending Executive Order No. 29, insofar as the new staffing pattern was concerned, by increasing from four hundred (400) to not exceeding seven hundred fifty (750) the positions affected thereby. In compliance therewith, the NTA prepared and adopted a new Organization Structure and Staffing Pattern (OSSP) which, on 29 October 1998, was submitted to the Office of the President. On 11 November 1998, the rank and file employees of NTA Batac, among whom included herein petitioners, filed a letter-appeal with the Civil Service Commission and sought its assistance in recalling the OSSP. On 04 December 1998, the OSSP was approved by the Department of Budget and Management (DBM) subject to certain revisions. On even date, the NTA created a placement committee to assist the appointing authority in the selection and placement of permanent personnel in the revised OSSP. The results of the evaluation by the committee on the individual qualifications of applicants to the positions in the new OSSP were then disseminated and posted at the central and provincial offices of the NTA. On 10 June 1996, petitioners, all occupying different positions at the NTA office in Batac, Ilocos Norte, received individual notices of termination of their

employment with the NTA effective thirty (30) days from receipt thereof. Finding themselves without any immediate relief from their dismissal from the service, petitioners filed a petition for certiorari, prohibition and mandamus,with prayer for preliminary mandatory injunction and/or temporary restraining order, with the Regional Trial Court (RTC) of Batac, Ilocos Norte, and prayed 1) that a restraining order be immediately issued enjoining the respondents from enforcing the notice of termination addressed individually to the petitioners and/or from committing further acts of dispossession and/or ousting the petitioners from their respective offices; 2) that a writ of preliminary injunction be issued against the respondents, commanding them to maintain the status quo to protect the rights of the petitioners pending the determination of the validity of the implementation of their dismissal from the service; and 3) that, after trial on the merits, judgment be rendered declaring the notice of termination of the petitioners illegal and the reorganization null and void and ordering their reinstatement with backwages, if applicable, commanding the respondents to desist from further terminating their services, and making the injunction permanent.

[1]

The RTC, on 09 September 2000, ordered the NTA to appoint petitioners in the new OSSP to positions similar or comparable to their respective former assignments. A motion for reconsideration filed by the NTA was denied by the trial court in its order of 28 February 2001. Thereupon, the NTA filed an appeal with the Court of Appeals, raising the following issues: I. Whether or not respondents submitted evidence as proof that petitioners, individually, were not the best qualified and most deserving among the incumbent applicant-employees. Whether or not incumbent permanent employees, including herein petitioners, automatically enjoy a preferential right and the right of first refusal to appointments/reappointments in the new Organization Structure And Staffing Pattern (OSSP) of respondent NTA. Whether or not respondent NTA in implementing the mandated reorganization pursuant to E.O. No. 29, as amended by E.O. No. 36, strictly adhere to the implementing rules on reorganization, particularly RA 6656 and of the Civil Service Commission Rules on Government Reorganization.

II.

III.

IV. Whether or not the validity of E.O. Nos. 29 and 36 can be put in issue in the instant case/appeal.
[2]

On 20 February 2002, the appellate court rendered a decision reversing and setting aside the assailed orders of the trial court. Petitioners went to this Court to assail the decision of the Court of Appeals, contending that I. The Court of Appeals erred in making a finding that went beyond the issues of the case and which are contrary to those of the trial court and that it overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion; The Court of Appeals erred in upholding Executive Order Nos. 29 and 36 of the Office of the President which are mere administrative issuances which do not have the force and effect of a law to warrant abolition of positions and/or effecting total reorganization; The Court of Appeals erred in holding that petitioners removal from the service is in accordance with law;

II.

III.

IV. The Court of Appeals erred in holding that respondent NTA was not guilty of bad faith in the termination of the services of petitioners; (and) V. The Court of Appeals erred in ignoring case law/jurisprudence in the abolition of an office.
[3]

In its resolution of 10 July 2002, the Court required the NTA to file its comment on the petition. On 18 November 2002, after the NTA had filed its comment of 23 September 2002, the Court issued its resolution denying the petition for failure of petitioners to sufficiently show any reversible error on the part of the appellate court in its challenged decision so as to warrant the exercise by this Court of its discretionary appellate jurisdiction. A motion for reconsideration filed by petitioners was denied in the Courts resolution of 20 January 2002. On 21 February 2003, petitioners submitted a Motion to Admit Petition For En Banc Resolution of the case allegedly to address a basic question, i.e., the legal and constitutional issue on whether the NTA may be reorganized by an executive fiat, not by legislative action. In their Petition for an En Banc Resolution petitioners would have it that [4]

1. The Court of Appeals decision upholding the reorganization of th e National Tobacco Administration sets a dangerous precedent in that: a) A mere Executive Order issued by the Office of the President and procured by a government functionary would have the effect of a blanket authority to reorganize a bureau, office or agency attached to the various executive departments; b) The President of the Philippines would have the plenary power to reorganize the entire government Bureaucracy through the issuance of an Executive Order, an administrative issuance without the benefit of due deliberation, debate and discussion of members of both chambers of the Congress of the Philippines; c) The right to security of tenure to a career position created by law or statute would be defeated by the mere adoption of an Organizational Structure and Staffing Pattern issued pursuant to an Executive Order which is not a law and could thus not abolish an office created by law; 2. The case law on abolition of an office would be disregarded, ignored and abandoned if the Court of Appeals decision subject matter of this Petition would remain undisturbed and untouched. In other words, previous doctrines and precedents of this Highest Court would in effect be reversed and/or modified with the Court of Appeals judgment, should it remain unchallenged. 3. Section 4 of Executive Order No. 245 dated July 24, 1987 (Annex D, Petition), issued by the Revolutionary government of former President Corazon Aquino, and the law creating NTA, which provides that the governing body of NTA is the Board of Directors, would be rendered meaningless, ineffective and a dead letter law because the challenged NTA reorganization which was erroneously upheld by the Court of Appeals was adopted and implemented by then NTA Administrator Antonio de Guzman without the corresponding authority from the Board of Directors as mandated therein. In brief, the reorganization is an ultra vires act of the NTA Administrator. 4. The challenged Executive Order No. 29 issued by former President Joseph Estrada but unsigned by then Executive Secretary Ronaldo Zamora would in effect be erroneously upheld and given legal effect as to supersede, amend and/or modify Executive Order No. 245, a law issued during the Freedom Constitution of President Corazon Aquino. In brief, a mere executive order would amend, supersede and/or render ineffective a law or statute.
[5]

In order to allow the parties a full opportunity to ventilate their views on the matter, the Court ultimately resolved to hear the parties in oral

argument. Essentially, the core question raised by them is whether or not the President, through the issuance of an executive order, can validly carry out the reorganization of the NTA. Notwithstanding the apparent procedural lapse on the part of petitioner to implead the Office of the President as party respondent pursuant to Section 7, Rule 3, of the 1997 Revised Rules of Civil Procedure, this Court resolved to rule on the merits of the petition.
[6]

Buklod ng Kawaning EIIB vs. Zamora ruled that the President, based on existing laws, had the authority to carry out a reorganization in any branch or agency of the executive department. In said case, Buklod ng Kawaning EIIB challenged the issuance, and sought the nullification, of Executive Order No. 191 (Deactivation of the Economic Intelligence and Investigation Bureau) and Executive Order No. 223 (Supplementary Executive Order No. 191 on the Deactivation of the Economic Intelligence and Investigation Bureau and for Other Matters) on the ground that they were issued by the President with grave abuse of discretion and in violation of their constitutional right to security of tenure. The Court explained:
[7]

The general rule has always been that the power to abolish a public office is lodged with the legislature. This proceeds from the legal precept that the power to create includes the power to destroy. A public office is either created by the Constitution, by statute, or by authority of law. Thus, except where the office was created by the Constitution itself, it may be abolished by the same legislature that brought it into existence. The exception, however, is that as far as bureaus, agencies or offices in the executive department are concerned, the Presidents power of control may justify him to inactivate the functions of a particular office, or certain laws may grant him the broad authority to carry out reorganization measures. The case in point is Larin v. Executive Secretary [280 SCRA 713]. In this case, it was argued that there is no law which empowers the President to reorganize the BIR. In decreeing otherwise, this Court sustained the following legal basis, thus: `Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR. `We do not agree. `x x x `Section 48 of R.A. 7645 provides that: xxx

``Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch. The heads of departments, bureaus and offices and agencies are hereby directed to identify their respective activities which are no longer essential in the delivery of public services and which may be scaled down, phased out or abolished, subject to civil service rules and regulations. x x x. Actual scaling down, phasing out or abolitionof the activities shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. `Said provision clearly mentions the acts of `scaling down, phasing out and abolition of offices only and does not cover the creation of offices or transfer of functions. Nevertheless, the act of creating and decentralizing is included in the subsequent provision of Section 62 which provides that: ``Sec. 62. Unauthorized organizational changes. Unless otherwise created by law or directed by the President of the Philippines, no organizational unit or changes in key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act. `The foregoing provision evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned. `x x x xxx

`Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states: ``Sec. 20. Residual Powers. Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law. `This provision speaks of such other powers vested in the President under the law. What law then gives him the power to reorganize? It is Presidential Decree No. 1772 which amended Presidential Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials. The validity of these two decrees are unquestionable. The 1987 Constitution clearly provides that `all laws, decrees, executive orders, proclamations, letter of instructions and other executive issuances

not inconsistent with this Constitution shall remain operative until amended, repealed or revoked. So far, there is yet no law amending or repealing said decrees. Now, let us take a look at the assailed executive order. In the whereas clause of E.O. No. 191, former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted in Larin, thus: `Sec. 77. Organized Changes. Unless otherwise provided by law or directed by the President of the Philippines, no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act. We adhere to the x x x ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure. Such a ruling further finds support in Section 78 of Republic Act No. 8760. Under this law, the heads of departments, bureaus, offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of this respective mandates, missions, objectives, functions, programs, projects, activities and systems and procedures; (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down, phased-out or abolished; and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. The law has spoken clearly. We are left only with the duty to sustain. But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. We must not lose sight of the very source of the power that which constitutes an express grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President. In Canonizado vs. Aguirre [323 SCRA 312], we ruled that reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. It takes place when there is an alteration of the existing

structure of government offices or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the Department of Finance. It falls under the Office of the President. Hence, it is subject to the Presidents continuing authority to reorganize. It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department, what is then left for us to resolve is whether or not the reorganization is valid. In this jurisdiction, reorganizations have been regarded as valid provided they are pursued in good faith. Reorganization is carried out in `good faith if it is for the purpose of economy or to make bureaucracy more efficient. Pertinently, Republic Act No. 6656 provides for the circumstances which may be considered as evidence of bad faith in the removal of civil service employees made as a result of reorganization, to wit: (a) where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) where an office is abolished and another performing substantially the same functions is created;(c) where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) where there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices, and (e) where the removal violates the order of separation.
[8]

The Court of Appeals, in its now assailed decision, has found no evidence of bad faith on the part of the NTA; thus In the case at bar, we find no evidence that the respondents committed bad faith in issuing the notices of non-appointment to the petitioners. Firstly, the number of positions in the new staffing pattern did not increase. Rather, it decreased from 1,125 positions to 750. It is thus natural that ones position may be lost through the removal or abolition of an office. Secondly, the petitioners failed to specifically show which offices were abolished and the new ones that were created performing substantially the same functions. Thirdly, the petitioners likewise failed to prove that less qualified employees were appointed to the positions to which they applied. x x x x x x x. x x

Fourthly, the preference stated in Section 4 of R.A. 6656, only means that old employees should be considered first, but it does not necessarily follow that they should then automatically be appointed. This is because the law does not preclude the infusion of new blood, younger dynamism, or necessary talents into the government service, provided that the acts of the appointing power are bonafide for the best interest of the public service and the person chosen has the needed qualifications.
[9]

These findings of the appellate court are basically factual which this Court must respect and be held bound. It is important to emphasize that the questioned Executive Orders No. 29 and No. 36 have not abolished the National Tobacco Administration but merely mandated its reorganization through the streamlining or reduction of its personnel. Article VII, Section 17, of the Constitution, expressly grants the President control of all executive departments, bureaus, agencies and offices which may justify an executive action to inactivate the functions of a particular office or to carry out reorganization measures under a broad authority of law. Section 78 of the General Provisions of Republic Act No. 8522 (General Appropriations Act of FY 1998) has decreed that the President may direct changes in the organization and key positions in any department, bureau or agency pursuant to Article VI, Section 25, of the Constitution, which grants to the Executive Department the authority to recommend the budget necessary for its operation. Evidently, this grant of power includes the authority to evaluate each and every government agency, including the determination of the most economical and efficient staffing pattern, under the Executive Department.
[10] [11] [12]

In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo D. Zamora, in his capacity as the Executive Secretary, et al., this Court has had occasion to also delve on the Presidents power to reorganize the Office of the President under Section 31(2) and (3) of Executive Order No. 292 and the power to reorganize the Office of the President Proper. The Court has there observed:
[13]

x x x. Under Section 31(1) of EO 292, the President can reorganize the Office of the President Proper by abolishing, consolidating or merging units, or by transferring functions from one unit to another. In contrast, under Section 31(2) and (3) of EO 292, the Presidents power to reorganize offices outside the Office of the President Proper but still within the Office of the President is limited to merely transferring functions or agencies from the Office of the President to Departments or Agencies, and vice versa.

The provisions of Section 31, Book III, Chapter 10, of Executive Order No. 292 (Administrative Code of 1987), above-referred to, reads thusly: SEC. 31. Continuing Authority of the President to Reorganize his Office. The President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may take any of the following actions: (1) Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers System and the Common Staff Support System, by abolishing, consolidating or merging units thereof or transferring functions from one unit to another; (2) Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions to the Office of the President from other Departments and Agencies; and (3) Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from other departments and agencies. The first sentence of the law is an express grant to the President of a continuing authority to reorganize the administrative structure of the Office of the President. The succeeding numbered paragraphs are not in the nature of provisos that unduly limit the aim and scope of the grant to the President of the power to reorganize but are to be viewed in consonance therewith. Section 31(1) of Executive Order No. 292 specifically refers to the Presidents power to restructure the internal organization of the Office of the President Proper, by abolishing, consolidating or merging units hereof or transferring functions from one unit to another, while Section 31(2) and (3) concern executive offices outside the Office of the President Proper allowing the President to transfer any function under the Office of the President to any other Department or Agency and vice-versa, and the transfer of any agency under the Office of the President to any other department or agency and viceversa.
[14]

In the present instance, involving neither an abolition nor transfer of offices, the assailed action is a mere reorganization under the general provisions of the law consisting mainly ofstreamlining the NTA in the interest of simplicity, economy and efficiency. It is an act well within the authority of President motivated and carried out, according to the findings of the appellate

court, in good faith, a factual assessment that this Court could only but accept.
[15]

In passing, relative to petitioners Motion for an En Banc Resolution of the Case, it may be well to remind counsel, that the Court En Banc is not an appellate tribunal to which appeals from a Division of the Court may be taken. A Division of the Court is the Supreme Court as fully and veritably as the Court En Banc itself and a decision of its Division is as authoritative and final as a decision of the Court En Banc. Referrals of cases from a Division to the Court En Banc do not take place as just a matter of routine but only on such specified grounds as the Court in its discretion may allow.
[16]

WHEREFORE, the Motion to Admit Petition for En Banc resolution and the Petition for an En Banc Resolution are DENIED for lack of merit. Let entry of judgment be made in due course. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 84301. April 7, 1993. NATIONAL LAND TITLES AND DEEDS REGISTRATION ADMINISTRATION, petitioner, vs. CIVIL SERVICE COMMISSION and VIOLETA L. GARCIA, respondents. The Solicitor General for petitioner. Raul R. Estrella for private respondent. SYLLABUS 1. ADMINISTRATIVE LAW; EXECUTIVE ORDER NO. 649; REORGANIZED LAND REGISTRATION COMMISSION TO NALTDRA; EXPRESSLY PROVIDED THE ABOLITION OF EXISTING POSITIONS. Executive Order No. 649 authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA). It abolished all the positions in the now defunct LRC and required new appointments to be issued to all employees of the NALTDRA. The question of whether or not a law abolishes an office is one of legislative intent about which there can be no controversy whatsoever if there is an explicit declaration in the law itself. A closer examination of Executive Order No. 649 which authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA), reveals that said law in express terms, provided for the abolition of existing positions. Thus, without need of any interpretation, the law mandates that from the moment an implementing order is issued, all positions in the Land Registration Commission are deemed non-existent. This, however, does not mean removal. Abolition of a position does not involve or mean removal for the reason that removal implies that the post subsists and that one is merely separated therefrom. (Arao vs. Luspo, 20 SCRA 722 [1967]) After abolition, there is in law no occupant. Thus, there can be no tenure to speak of. It is in this sense that from the standpoint of strict law, the question of any impairment of security of tenure does not arise. (De la Llana vs. Alba, 112 SCRA 294 [1982]) 2. ID.; ID.; ID.; REORGANIZATION, VALID WHEN PURSUED IN GOOD FAITH; CASE AT BAR. Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. Two questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2) was it done in good faith? There is no dispute over the authority to carry out a valid reorganization in any branch or agency of the Government. Under Section 9, Article XVII of the 1973 Constitution. The power to reorganize is, however; not absolute. We have held in Dario vs. Mison that reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. This court has pronounced that if the newly created office has substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the one abolished, even though it embraces all or some of the duties of the old office it will be considered as an abolition of one office and the

creation of a new or different one. The same is true if one office is abolished and its duties, for reasons of economy are given to an existing officer or office. Executive Order No. 649 was enacted to improve the services and better systematize the operation of the Land Registration Commission. A reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. To this end, the requirement of Bar membership to qualify for key positions in the NALTDRA was imposed to meet the changing circumstances and new development of the times. Private respondent Garcia who formerly held the position of Deputy Register of Deeds II did not have such qualification. It is thus clear that she cannot hold any key position in the NALTDRA, The additional qualification was not intended to remove her from office. Rather, it was a criterion imposed concomitant with a valid reorganization measure. 3. ID.; ID.; ID.; THERE IS NO VESTED PROPERTY RIGHT TO BE RE-EMPLOYED IN A REORGANIZED OFFICE; CASE AT BAR. There is no such thing as a vested interest or an estate in an office, or even an absolute right to hold it. Except constitutional offices which provide for special immunity as regards salary and tenure, no one can be said to have any vested right in an office or its salary. None of the exceptions to this rule are obtaining in this case. To reiterate, the position which private respondent Garcia would like to occupy anew was abolished pursuant to Executive Order No. 649, a valid reorganization measure. There is no vested property right to be re employed in a reorganized office. Not being a member of the Bar, the minimum requirement to qualify under the reorganization law for permanent appointment as Deputy Register of Deeds II, she cannot be reinstated to her former position without violating the express mandate of the law. DECISION CAMPOS, JR., J p: The sole issue for our consideration in this case is whether or not membership in the bar, which is the qualification requirement prescribed for appointment to the position of Deputy Register of Deeds under Section 4 of Executive Order No. 649 (Reorganizing the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration or NALTDRA) should be required of and/or applied only to new applicants and not to those who were already in the service of the LRC as deputy register of deeds at the time of the issuance and implementation of the abovesaid Executive Order. The facts, as succinctly stated in the Resolution ** of the Civil Service Commission, are as follows: "The records show that in 1977, petitioner Garcia, a Bachelor of Laws graduate and a first grade civil service eligible was appointed Deputy Register of Deeds VII under permanent status. Said position was later reclassified to Deputy Register of Deeds III pursuant to PD 1529, to which position, petitioner was also appointed under permanent status up to September 1984. She was for two years, more or less, designated as Acting Branch Register of Deeds of Meycauayan, Bulacan. By virtue of Executive Order No. 649 (which took effect on February 9, 1981) which authorized the restructuring of the Land Registration Commission to National Land Titles and Deeds Registration Administration and regionalizing the Offices of the Registers therein, petitioner Garcia was issued an appointment as Deputy Register of Deeds II on October 1, 1984, under temporary status, for not being a member of the Philippine Bar. She appealed to the Secretary of Justice but her request was denied. Petitioner Garcia moved for reconsideration but her motion remained unacted. On October 23, 1984, petitioner Garcia was administratively charged with Conduct Prejudicial to the Best Interest of the Service. While said case was pending decision, her temporary appointment as such was renewed in 1985. In a Memorandum dated October 30, 1986, the then Minister, now Secretary, of Justice notified petitioner Garcia of the termination of her services as Deputy Register of Deeds II on the ground that she was "receiving bribe money". Said Memorandum of Termination which took

effect on February 9, 1987, was the subject of an appeal to the Inter-Agency Review Committee which in turn referred the appeal to the Merit Systems Protection Board (MSPB). In its Order dated July 6, 1987, the MSPB dropped the appeal of petitioner Garcia on the ground that since the termination of her services was due to the expiration of her temporary appointment, her separation is in order. Her motion for reconsideration was denied on similar ground." 1 However, in its Resolution 2 dated June 30, 1988, the Civil Service Commission directed that private respondent Garcia be restored to her position as Deputy Register of Deeds II or its equivalent in the NALTDRA. It held that "under the vested right theory the new requirement of BAR membership to qualify for permanent appointment as Deputy Register of Deeds II or higher as mandated under said Executive Order, would not apply to her (private respondent Garcia) but only to the filling up of vacant lawyer positions on or after February 9, 1981, the date said Executive Order took effect." 3 A fortiori, since private respondent Garcia had been holding the position of Deputy Register of Deeds II from 1977 to September 1984, she should not be affected by the operation on February 1, 1981 of Executive Order No. 649. Petitioner NALTDRA filed the present petition to assail the validity of the above Resolution of the Civil Service Commission. It contends that Sections 8 and 10 of Executive Order No. 649 abolished all existing positions in the LRC and transferred their functions to the appropriate new offices created by said Executive Order, which newly created offices required the issuance of new appointments to qualified office holders. Verily, Executive Order No. 649 applies to private respondent Garcia, and not being a member of the Bar, she cannot be reinstated to her former position as Deputy Register of Deeds II. We find merit in the petition. Executive Order No. 649 authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA). It abolished all the positions in the now defunct LRC and required new appointments to be issued to all employees of the NALTDRA. The question of whether or not a law abolishes an office is one of legislative intent about which there can be no controversy whatsoever if there is an explicit declaration in the law itself. 4 A closer examination of Executive Order No. 649 which authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA), reveals that said law in express terms, provided for the abolition of existing positions, to wit: Sec. 8. Abolition of Existing Positions in the Land Registration Commission . . . All structural units in the Land Registration Commission and in the registries of deeds, and all Positions therein shall cease to exist from the date specified in the implementing order to be issued by the President pursuant to the preceding paragraph. Their pertinent functions, applicable appropriations, records, equipment and property shall be transferred to the appropriate staff or offices therein created. (Emphasis Supplied.) Thus, without need of any interpretation, the law mandates that from the moment an implementing order is issued, all positions in the Land Registration Commission are deemed non-existent. This, however, does not mean removal. Abolition of a position does not involve or mean removal for the reason that removal implies that the post subsists and that one is merely separated therefrom. 5 After abolition, there is in law no occupant. Thus, there can be no tenure to speak of. It is in this

sense that from the standpoint of strict law, the question of any impairment of security of tenure does not arise. 6 Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. Two questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2) was it done in good faith? There is no dispute over the authority to carry out a valid reorganization in any branch or agency of the Government. Under Section 9, Article XVII of the 1973 Constitution, the applicable law at that time: Sec. 9. All officials and employees in the existing Government of the Republic of the Philippines shall continue in office until otherwise provided by law or decreed by the incumbent President of the Philippines, but all officials whose appointments are by this Constitution vested in the Prime Minister shall vacate their respective offices upon the appointment and qualifications of their successors. The power to reorganize is, however; not absolute. We have held in Dario vs. Mison 7 that reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. This court has pronounced 8 that if the newly created office has substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the one abolished, even though it embraces all or some of the duties of the old office it will be considered as an abolition of one office and the creation of a new or different one. The same is true if one office is abolished and its duties, for reasons of economy are given to an existing officer or office. Executive Order No. 649 was enacted to improve the services and better systematize the operation of the Land Registration Commission. 9 A reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. 10 To this end, the requirement of Bar membership to qualify for key positions in the NALTDRA was imposed to meet the changing circumstances and new development of the times. 11 Private respondent Garcia who formerly held the position of Deputy Register of Deeds II did not have such qualification. It is thus clear that she cannot hold any key position in the NALTDRA, The additional qualification was not intended to remove her from office. Rather, it was a criterion imposed concomitant with a valid reorganization measure. A final word, on the "vested right theory" advanced by respondent Civil Service Commission. There is no such thing as a vested interest or an estate in an office, or even an absolute right to hold it. Except constitutional offices which provide for special immunity as regards salary and tenure, no one can be said to have any vested right in an office or its salary. 12 None of the exceptions to this rule are obtaining in this case. To reiterate, the position which private respondent Garcia would like to occupy anew was abolished pursuant to Executive Order No. 649, a valid reorganization measure. There is no vested property right to be re employed in a reorganized office. Not being a member of the Bar, the minimum requirement to qualify under the reorganization law for permanent appointment as Deputy Register of Deeds II, she cannot be reinstated to her former position without violating the express mandate of the law. WHEREFORE, premises considered, We hereby GRANT the petition and SET ASIDE the questioned Resolution of the Civil Service Commission reinstating private respondent to her former position as Deputy Register of Deeds II or its equivalent in the National Land Titles and Deeds Registration Administration.SO ORDERED.

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. 101251 November 5, 1992 ELISEO A. SINON, petitioner, vs. CIVIL SERVICE COMMISSION, DEPARTMENT OF AGRICULTURE-REORGANIZATION APPEALS BOARD AND JUANA BANAN, respondents.

CAMPOS, JR., J.: This petition for certiorari seeks to annul the following Resolutions of the public respondents Civil Service Commission (the "CSC") * and Department of Agriculture Reorganization Appeals Board (the "DARAB"), ** to wit: 1. Resolution No. 97 dated August 23, 1989, issued by respondent DARAB which revoked petitioner's permanent appointment as Municipal Agriculture Officer (MAO) and appointed, in his stead, private respondent Juana Banan (Rollo 17); 2. Resolution dated February 8, 1991 issued by the respondent CSC affirming the aforementioned Resolution of respondent DARAB (Rollo 22); 3. Resolution dated July 11, 1991 issued by the respondent CSC which denied petitioner's motion for the reconsideration of the respondent Commission's Resolution dated February 8, 1991. 1 The antecedent facts are as follows: Prior to the reorganization of the then Minister of Agriculture and Food (the "MAF"), the private respondent Juana Banan was the incumbent Municipal Agricultural Officer (MAO) of the aforesaid Minister in Region II, Cagayan, while the petitioner Eliseo Sinon occupied the position of Fisheries Extension Specialist (FES) II in the Bureau of Fisheries and Aquatic Resources (BFAR) in the same region. However, the reorganization of the MAF into the Department of Agriculture (the "DA"), with the issuance of Executive Order No. 116 dated 30 January 1987, called for the evaluation of the following employees for twenty nine position of MAO in Region II, Cagayan. The list as prepared by the Placement Committee included the herein petitioner Sinon but excluded the respondent Banan: 1. Binoya, Vicente 76.20% 2. Cabana, Isidro 75.01% 3. Sebastian, Alice 74.18% 4. Zingapan, Benjamin 70.73% 5. Guzman, Wilhemina de la P. 70.50% 6. Gervacio, Agnes 69.86%

7. Somera, Hilario S. 68.13% 8. Tolentino, Julian R. 67.64% 9. Guillermo, Pedro 67.22% 10. Tambio, Rodolfo 67.00% 11. Aquino, Martina 66.94% 12. Bassig, Pio P. 66.84% 13. Rumpon, Danilo P. 65.61% 14. Zareno, Bernardo 65.57% 15. Madrid, Angel S. 65.57% 16. Callangan, Napoleon 65.45% 17. Fiesta, Felicisimo 65.29% 18. Alvarez, Benefranco 64.99% 19. Baggayan, Samuel O. 64.42% 20. Umbay, Pedro T. 64.01% 21. De la Cruz, Florencio M. 62.07% 22. Leonador, Ernesto T. 61.88% 23. Miguel, Jose 61.86% 24. Berlan, Herminia C. 61.76% 25. Soliman, Clemente 61.52% 26. Llopis, Lino 61.47% 27. Baliuag, Felicidad 61.39% 28. Aresta, Leticia 60.67% 29. Sinon, Eliseo A. 60.66% 2

(Emphasis supplied)
Thus, respondents Banan filed an appeal with the DARAB for re-evaluation of the qualification of all those included in the aforementioned list made by the Placement Committee. On August 23, 1989, the DARAB released Resolution No. 97 in which the ranking for 29 MAO prepared by the Placement Committee was re-evaluated as follows:

1. Binoya, Vicente 76.20% 2. Cabana, Isidro 75.01% 3. Sebastian, Alice 72.18% 4. Zingapan, Benjamin 70.73% 5. Guzman, Wilhemina de la P. 70.50% 6. Gervacio, Agnes 70.04% 7. Somera, Hilario S. 68.13% 8. Tolentino, Julian Jr. 67.22% 9. Guillermo, Pedro 67.22% 10. Tambio, Rodolfo 67.00% 11. Aquino, Martina D. 66.94% 12. Bassig, Pio P. 66.84% 13. Rumpon, Danilo P. 65.61% 14. Madrid, Angel 65.57% 15. Callangan, Napoleon 65.45% 16. Fiesta, Felicisimo 65.29% 17. Alvarez, Benefranco 64.99% 18. Baggayan, Samuel O. 64.42% 19. Umbay, Pedro T. 64.01% 20. De la Cruz, Florencio M. 62.07% 21. Leonador, Ernesto T. 61.88% 22. Miguel, Jose L. 61.86% 23. Berlan, Herminia C. 61.76% 24. Soliman, Clemente 61.52% 25. Zareno, Bernardo 61.50% 26. Llopis, Lino 61.47% 27. Baliuag, Felicidad 61.39%

28. Aresta, Leticia 60.67% 29. Banan, Juana 59.32% 2

(Emphasis supplied)
In this re-evaluation, petitioner Sinon was displaced by the respondent Banan and this same resolution was duly approved by the Secretary of the Department of Agriculture, Carlos G. Dominguez, who also affixed his signature on the same date. However, on August 30, 1988, Sinon received an appointment as MAO for Region II in Cagayan as approved by Regional Director Gumersindo D. Lasam on the basis of the first evaluation made by the Placement Committee. Thus, Sinon filed an appeal docketed as Civil Service Case No. 573 on November 22, 1989 to the CSC. This appeal was granted mainly for two reasons: first, the respondent DARAB failed to file its Comment within the period required; and second, the evaluation of the qualification of the employees is a question of fact which the appointing authority or the Placement Committee assisting him is in a better position to determine. Hence, the Resolution dated 28 February 1989 of the DARAB was set aside. 4 On March 19, 1990, Banan filed a Motion for Reconsideration in which she pitted her qualifications against Sinon for the last slot in the 29 available MAO positions. At the same time, she pointed out that to allow the findings of the Placement Committee to supersede the DARAB resolution which the Secretary of Agriculture had approved would be tantamount to giving precedence to the Placement Committee over the head of the agency. Finally, on February 8, 1991, CSC, after reviewing the Comment filed by the DARAB which had not been considered earlier in the Civil Service Case No. 573, the CSC granted respondent Banan's Motion for Reconsideration and gave due course to her appointment by the DARAB. On March 21, 1991, Sinon filed a Motion for Reconsideration of the February 8, 1991 Resolution which however was denied by the CSC in its assailed Resolution dated July 11, 1991. According to the respondent CSC: Mr. Sinon strongly argued that the findings of the Placement Committee on the qualifications of the parties should be accorded deference and greater weight over that of the RAB. Under the Placement Committee's evaluation, Mr. Sinon garnered 60.66 while Ms. Juana Banan earned 57.32 after assessing the contending parties qualification in education, relevant experience, eligibility and other factors. Following the request of several parties for reevaluation, the RAB in their decision gave Mr. Sinon 57.66 while Ms. Banan obtained 59.32. Seemingly the findings of the two bodies are in conflict. Mr. Sinon argues that the findings of the Placement Committee should prevail since it is specially mandated by RA 6656. We disagree. The Placement Committee's function is recommendatory in nature. The agency's Reorganization Appeals Board was specially created by the Circular of the Office of the President dated October 2, 1987 and conferred with authority to review appeals and complaints of officials and employees affected by the reorganization. the decision of the agency RAB has the imprimatur of the Secretary of that agency and is therefore controlling in matters of and is therefore controlling in matters of appointment. Under this principle, the decision of the DARAB in this case enjoys precedence over the Placement Committee. 5 Hence, this petition was filed with a prayer for a writ of preliminary injunction and/or restraining order to enjoin the execution of the assailed resolutions. Without giving due course to the petition for a writ of preliminary injunction, the court required the parties to file their respective Comments. 6 On 12 November 1991, the Court gave due course to the petition and required the parties to submit their respective Memoranda. 7

The main issue for Our consideration is this: whether or not the CSC committed grave abuse discretion in reviewing and re-evaluating the ring or qualification of the petitioner Sinon. The arguments of the petitioner can be summed up as follows: 1). In issuing the Resolution of 8 February 1991, the CSC in effect revoked the appointment that the petitioner received as early as 30 August 1989 and which was deemed permanent by virtue of the approval of the Regional Director of the Department of Agriculture: 2). In giving petitioner a rating of only 57.66%, 8 from his previous rating of 60.66% and at the same time
according a rating of 59.32% to private respondent from a rating of only 57.32%, the CSC departed from its power which is limited only to that of "review", and hence encroached upon the power of appointment exclusively lodged in the appointment authority;

3) In giving due course to the appointment of respondent Banan in its Resolution of 8 February 1991, CSC was directing the appointment of a substitute of their own choice when the power to appoint was exclusively lodged in the appointing authority. We rule as follows. By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility. 9 Contrary to the allegations of the petitioner, We do not find any evidence of grave abuse of discretion on the part of the CSC when it issued Resolution dated 8 February 1991 which in effect approved the appointment of respondent Banan over petitioner Sinon. With the reorganization of the MAF into the DA with Executive order No. 116, it became imperative to "protect the security of tenure of Civil Service Officers and employees in the implementation of government reorganization". Thus, Congress passed Republic Act No. 6656. 10 It was under the same law of R.A. 6656 that the Placement Committee was created: Section 6. In order that the best qualified and mot deserving persons shall be appointed in any reorganization, there shall be created a Placement Committee in each department or agency to assist the appointing authority in the judicious selection and placement of personnel . The Committee shall consist of two (2) members appointed by the head of the department or agency, a representative of the appointing authority, and two (2) members duly elected by the employees holding positions in the first and second levels of the career service: Provided, that if there is a registered employee association with a majority of the employees as members, that employee association shall also have a representative in the Committee: Provided, Further, that immediately upon the approval of the staffing pattern of the department or agency concerned, such staffing pattern shall be made known to all officers and employees of the agency who shall be invited to apply for any of the positions authorized therein. Such application shall be considered by the committee in the placement and selection of personnel. (Emphasis supplied). To "assist" mean to lend an aid to, 11 or to contribute effort in the complete accomplishment of an ultimate

purpose intended to be effected by those engaged.

12

In contrast, to "recommend" 13 is to present one's advice or choice as having one's approval or to represent

or urge as advisable or expedient. It involves the Idea that another has the final decision.
Clearly, the Placement Committee was charged with the duty of exercising the same discretionary functions as the appointing authority in the judicious selection and placement of personnel when the law empowered it to "assist" the appointment authority.

The same law also allows any officer or employee aggrieved by the appointments to file an appeal with the appointing authority who shall made a decision within thirty (30) days from the filing thereof. If the same employee is still not satisfied with the decision of the appointing authority, he may further appeal within ten (10) days from the receipt thereof the CSC. 14 In the case at bar, the Circular dated October 2, 1987 of the Office of the President created the agency Reorganization Appeals Board to address the problem of the employees affected by the reorganizations. The foregoing legal measures spell out the remedies of aggrieved parties which make it impossible to give the status of finality to any appointment until all protests or oppositions are duly heard. Thus, while it is true that the appointment paper received by petitioner Sinon on 30 August 1989 for the position of MAO had not conferred any permanent status and was still subject to the following conditions attached to any appointment in the civil service: Provided that there is no pending administrative case against the appointee, no pending protest against the appointment, nor any decision by competent authority that will adversely affect the approval of the appointment . 15 Hence, for as long as the re-evaluation of the qualification filed by Banan was pending, the petitioner cannot claim that he had been issued with a "complete" appointment. Neither is there any point in asserting that his appointment had "cured" whatever changes was subsequently recommended by the DARAB. 16 The fact that the DARAB is capable of re-evaluating the findings of the Placement Committed only to find that Sinon is not qualified should no be taken as a grave abuse of discretion. We cannot subscribe to petitioner Sinon's insistence that the public respondent CSC had disregarded the findings of the Placement Committee. The truth is, these findings of the Placement Committee. The truth is, these findings were re-evaluated and the report after such re-evaluation was submitted to and approved by the Secretary of Agriculture. The CSC affirmed the findings of the DARAB. Because of all the foregoing circumstances, the jurisprudence cited by the petitioner Sinon appears to be incorrect.
17

Neither do we find in the Resolution of 8 February 1991, any statement by the CSC directing the appointment of the respondent Banan. Hence, there was no directive from the CSC that may be misinterpreted as a usurpation of any appointing power. 18 Besides, in affirming the appointment of Banan as recommended by the DARAB and approved by the Secretary of Agriculture, the CSC is only being consistent with the law. Section 4 or R.A. 6656 mandates that officers and employees holding permanent appointments shall be given preference for appointment to the new positions in the approved staffing pattern comparable to their former positions. Also, the term incumbent officer and the privileges generally accorded to them would more aptly refer to Banan and not to petitioner Sinon whose appointment was never confirmed completely. 19 There is no dispute that the position of MAO in the old staffing pattern is most

comparable to the MAO in the new staffing pattern.

Finally, the Solicitor General in behalf of the CSC correctly noted that the petitioner Sinon had conveniently omitted the then Secretary of Agriculture who had affixed his approval on the findings of the DARAB. Petitioner Sinon knew fully well that as head of the agency, the Secretary of Agriculture was the appointing authority. It must be recalled that the whole purpose of reorganization is that is it is a "process of restructuring the bureaucracy's organizational and functional set-up, to make it more viable in terms of the economy, efficiency, effectiveness and make it more responsive to the needs of its public clientele as authorized by law." 20 For as long

as the CSC confines itself within the limits set out by law and does not encroach upon the prerogatives endowed to other authorities, this Court must sustain the Commission.
WHEREFORE, the petition is DENIED with costs against the petitioner.

SO ORDERED. Gutierrez, Jr., Cruz, Feliciano, Padilla, Regalado, Davide, Romero, Nocon and Bellosillo, JJ., concur. Narvasa, C.J. and Medialdea, JJ., is on leave. Bidin, concur in the result.

Separate Opinions

GRIO-AQUINO, J., concurring: In the result only for we ruled in Bustamante vs. Executive Secretary 186 SCRA 109 and Pari-an vs. Civil Service Commission, 202 SCRA 772 that the reorganization of the Department of Agriculture was null and void.

Separate Opinions GRIO-AQUINO, J., concurring: In the result only for we ruled in Bustamante vs. Executive Secretary 186 SCRA 109 and Pari-an vs. Civil Service Commission, 202 SCRA 772 that the reorganization of the Department of Agriculture was null and void.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 93355 April 7, 1992 LUIS B. DOMINGO, petitioner, vs. DEVELOPMENT BANK OF THE PHILIPPINES and CIVIL SERVICE COMMISSION, respondents.

REGALADO, J.: This special civil action impugns the resolution 1 of respondent Civil Service Commission (CSC)
promulgated on April 10, 1990 in CSC Case No. 473 setting aside its earlier resolution of November 27, 1989 and affirming the separation of petitioner Luis B. Domingo as Senior Training and Career Development Officer of the Development Bank of the Philippines (DBP).

Petitioner was employed by DBP as Senior Training and Career Development Officer on permanent status from February, 1979 to December 1986. On December 3, 1986, Executive Order No 81 (The Revised Charter of DBP) was passed authorizing the reorganization of DBP in this wise: Sec. 32. Authority to Reorganize. In view of the new scope of operations of the Bank, a reorganization of the Bank and a reduction in force are hereby authorized to achieve simplicity and economy in operations, including adopting a new staffing pattern to suit the reduced operations envisioned. The formulation of the program of reorganization shall be completed within six months after the approval of this Charter, and the full implementation of the reorganization program within thirty months thereafter. Further, Sections 33 and 34 thereof provide: Sec. 33. Implementing Details; Organization and Staffing of the Bank. xxx xxx xxx In the implementation of the reorganization of the Bank, as authorized under the preceding section, qualified personnel of the Bank may be appointed to appropriate positions in the new staffing pattern thereof and those not so appointed are deemed separated from the service. No preferential or priority rights shall be given to or enjoyed by any officer or personnel of the Bank for appointment to any position in the new staffing pattern nor shall any officer or personnel be considered as having prior or vested rights with respect to retention in the Bank or in any position as may have been created in its new staffing pattern, even if he should be the incumbent of a similar position therein.

xxx xxx xxx Sec. 34. Separation Benefits. All those who shall retire from the service or are separated therefrom on account of the reorganization of the Bank under the provisions of this Charter shall be entitled to all gratuities and benefits provided for under existing laws and/or supplementary retirement plans adopted by and effective in the Bank: . . . Pursuant thereto, DBP issued Board Resolution No. 304-87 allowing the issuance of temporary appointments to all DBP personnel in order to fully implement the reorganization. The resolution states in part: It is understood that pursuant to Section 32 of the new DBP Charter full implementation of the reorganization program shall be completed within a period of thirty-six (36) months from the approval of this Charter. In this connection, the plantilla approved and appointments issued are purely interim and the Bank is reserving its right to put in place the permanent structure of the Bank as well as the permanent appointments thereto until the end of the 36-month period. 2 In effect, said resolution authorized the issuance of temporary appointments to all DBP personnel to allow maximum flexibility in the implementation of the reorganization. Such temporary appointments issued had a maximum period of twelve (12) months during which period the performance of the incumbents were assessed on the basis of the results of their evaluation. With the passage of Executive Order No. 81 and Board Resolution No. 304 87, DBP undertook the evaluation and comparative assessment of all its personnel under the CSC approved New Performance Appraisal System, a peer and control rating process which served as an assessment tool of DBP's screening process. Petitioner Domingo was issued a temporary appointment on January 2, 1987 for a period of one (1) year, which was renewed for another period up to November 30, 1988. Thereafter, in a memorandum 3 dated November 23, 1988 issued by the Final Review Committee, petitioner got a
performance rating of "below average," by reason of which his appointment was "made to lapse."

Consequently, petitioner, together with a certain Evangeline Javier, filed with the CSC a joint verified complaint 4against DBP for illegal dismissal. The complainants therein alleged that their dismissal
constituted a violation of the Civil Service Law against the issuance of temporary appointments to permanent employees, as well as of their right to security of tenure and due process.

On November 27, 1989, CSC issued a resolution 5 in CSC Case No. 473 directing "the reappointment
of Mr. Domingo and Ms. Javier as Senior Training and Career Development Officer and Research Analyst or any such equivalent rank under the staffing pattern of DBP." The order for reappointment was premised on the findings of the CSC that "(t)he action of the DBP to issue temporary appointments to all DBP personnel in order to allow for the maximum flexibility in evaluating the performance of incumbents is not in accord with civil service law rules," in that "(t)o issue a temporary appointment to one who has been on permanent status before will deprive the employee of benefits accorded permanent employees and will adversely affect his security of tenure," aside from the fact that such an act is contrary to Section 25 (a) of Presidential Decree No. 807.

DBP filed a motion for reconsideration 6 on December 27, 1989 alleging, inter alia, that the issuance of
temporary appointments to all the DBP employees was purely an interim arrangement; that in spite of the temporary appointment, they continued to enjoy the salary, allowances and other benefits corresponding

to permanent employees; that there can be no impairment of herein petitioner's security of tenure since the new DBP charter expressly provides that "qualified personnel of the bank may be appointed to appropriate positions in the new staffing pattern and those not so appointed are deemed separated from the service;" that petitioner was evaluated and comparatively assessed under a rating system approved by the respondent commission; and that petitioner cannot claim that he was denied due process of law considering that, although several appeals were received by the Final Review Committee from other employees similarly situated, herein petitioner never appealed his rating or the extension of his temporary appointment although he was advised to do so by his direct supervisor.

On April 10, 1990, CSC rendered the questioned resolution setting aside its previous decision and affirming the separation of herein petitioner. In so ruling, CSC explained that: While it is true that this Commission ruled that the issuance of temporary appointment to all DBP personnel in order to allow "for maximum flexibility" in evaluating the performance of incumbents is not in accord with civil service laws and rules, however it cannot lose sight of the fact that appellants are among those who indeed got a below average rating (unsatisfactory) when their performance were reevaluated and comparatively reassessed by the Final Review Committee of the Bank approved by the Vice Chairman. xxx xxx xxx In effect, the determinative factor for retention and the separation from the service is the individual performance rating. While the Commission supports the principle of merit and fitness and strongly protects the security of tenure of civil service officials and employees which are the essence of careerism in the civil service, it does not however, sanction the reappointment of said officials and employees who have fallen short of the performance necessary in order to maintain at all times efficiency and effectiveness in the Office. It bears stressing that the DBP submitted the records and documents in support of its allegations that Mr. Domingo and Ms. Javier have indeed got(ten) a below average rating (unsatisfactory) during the filing of the instant motion for reconsideration. Had DBP promptly submitted the records/documents supporting its allegations, this Commission at the outset should have sustained the separation of the appellants from the service on ground of poor performance (below average rating, unsatisfactory) after the reassessment and re-evaluation by the Bank through the Final Review Committee. The CSC could not have guessed that such was the basis of the DBP's termination of Domingo and Javier until the papers were submitted to it. ... It must be pointed out that appellants' separation from the service was the lapse of their temporary appointment. The non-extension or non-issuance of permanent appointments were principally based on their below average rating (unsatisfactory) performance after they were reevaluated and comparatively reassessed by the Final Review Committee of the Bank. After all, the 1986 DBP Revised Charter (E.O. No. 81) gives the Bank a wide latitude of discretion in the reappointment of its personnel, subject to existing civil service laws, rules and regulations.

There is no doubt that the DBP conducted a reevaluation and comparative reassessment of its employees for placement/retention (for permanent) and for separation from the service and found out that appellants are wanting of performance, having been rated as "Below Average." 7 Hence this petition, whereby petitioner raises the following issues: 1. Petitioner's tenure of office was violated by respondents; 2. Petitioner was not afforded a day in court and was denied procedural due process in the unilateral evaluation by his peers of his efficiency ratings for the years 1987 and 1988; 3. Average and below average efficiency ratings are not valid grounds for termination of the service of petitioner; 4. Section 5 of the rules implementing Republic Act No. 6656 is repugnant to the constitutional mandate that "no officer or employee of the Civil Service be removed or suspended except for causeprovided by law;" and 5. Section 16, Article XVIII, Transitory Provisions of the New Constitution was also violated by respondents. 8 I. Petitioner puts in issue the validity of the reorganization implemented by DBP in that the same violates his right to security of tenure. He contends that government reorganization cannot be a valid ground to terminate the services of government employees, pursuant to the ruling in the case of Dario vs. Mison, et al. 9 This statement of petitioner is incomplete and inaccurate, if not outright erroneous. Either petitioner misunderstood or he totally overlooked what was stated in the aforecited decision which held that "reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith." As we said in Dario: Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make bureaucracy more efficient. In that event, no dismissal (in case of dismissal) or separation actually occurs because the position itself ceases to exist. And in that case, security of tenure would not be a Chinese wall. Clearly, from our pronouncements in Dario, reorganization is a recognized valid ground for separation of civil service employees, subject only to the condition that it be done in good faith. No less than the Constitution itself in Section 16 of the Transitory Provisions, together with Sections 33 and 34 of Executive Order No. 81 and Section 9 of Republic Act No. 6656, support this conclusion with the declaration that all those not so appointed in the implementation of said reorganization shall be deemed separated from the service with the concomitant recognition of their entitlement to appropriate separation benefits and/or retirement plans of the reorganized government agency. The facts of this case, particularly the evaluation process adopted by DBP, bear out the existence of good faith in the course of reorganization.

As a tool in the assessment process, a bank-wide peer and control rating process was implemented. Under this process, the peers and supervisors rated the DBP employees. 10 To make the reorganization as open, representative and fair as possible, two principal groups were formed: (1) the Group Placement Screening Committee (GPSC) and (2) the Central Placement Screening Committee (CPSC), to review all recommendations (for retention or separation) prior to submissions to the Chairman an the Board of Directors. The members of the two screening committees were the Department and Group Heads and representatives from the Career Officials Association and the DBP Employees Union. The CPSC was further represented by the DBP Civil Service Officer, who sat as consultant to help resolve questions on Civil Service rules and regulations. As an assessment tool to the Bank's screening process, a peer and control rating process was implemented bank-wide, the results of which were used as a gauge to determine the suitability of an employee to stay in the Bank. Through this rating, the Bank determines the value of the individual employee to the Bank with the help of his peers (peer rating) and his supervisors (control rating). 11 Also, as part of the evaluation process, a Final Review Committee, composed of the group, department or unit head, the heads of the Human Resource Center and of the Personnel Services, and representatives from the Career Officials Association and the Employees Union, was created to screen further and to recommend the change in status of the employee's appointment from temporary to permanent beginning 1988. For the rank and file level, the committee was chaired by the Vice-Chairman while the officer level was presided over by the Chairman of the Bank. 12 The performance rating system used and adopted by DBP was duly approved by the Civil Service Commission. Herein petitioner was evaluated and comparatively assessed under this approved rating system. This is shown by the memorandum to the Vice-Chairman from the DBP Final Review Committee wherein petitioner, among other DBP employees, was evaluated and rated on his performance, and was shown to have gotten a rating of "below average." 13 In the comment 14 filed by DBP with the CSC, respondent bank explained the procedure it adopted in the
evaluation of herein petitioner, together with one Evangeline Javier, to wit:

xxx xxx xxx 4. During the second phase of the screening process, the Bank used several instruments for determining proficiency or skills on the job. More than skills, however, the evaluation also covered trait factors to determine a positive work attitude. The Bank placed a premium on work attitude because it believes that technical and professional skills can easily be acquired by an ordinary normal individual as long as he has the right attitude towards learning. 5. These attitudes are part of the new corporate culture outlined in the corporate philosophy instituted for the Bank and disseminated thru the various corporate culture seminars, monthly tertulias, speeches of the Chairman and numerous various internal communications and bulletins. One of the most important values emphasized was TEAMWORK due to the very lean personnel force that the Bank was left with and the competition it has to contend with in the industry. 6. Mr. Domingo and Miss Javier were subjected to this rating process as all other employees of the Bank were.

xxx xxx xxx 8. Mr. Domingo and Miss Javier were recommended for a renewal of temporary status after assessment of their performance because of several indications of lack of skill and their inability to work with others in the department where they were stationed. In a compassionate stance, it was considered in the Central Personnel Committee to transfer them to another department or unit of the Bank where they may be more effective and productive, but they expressed preference to stay in the training unit of the Bank, the Human Resource Center. 9. Along with others whose performance for 1987 was found wanting, Mr. Domingo and Miss Javier were recommended for reappointment as temporary for another period from January to November 1988 to give the Bank sufficient time to consider their cases. However, in an evaluation of performance for all extendees in November 1988, Mr. Domingo and Miss Javier were again found wanting having both acquired a rating of "Below Average." In addition, it is not disputed that DBP now has less than 2,000 employees from a former high level of around 4,000 employees in 1986. And, under Section 27 of Presidential Decree No. 807, the Government is authorized to lay off employees in case of a reduction due to reorganization, thus: Sec. 27. Reduction in Force. Whenever it becomes necessary because of lack of work or funds or due to a change in the scope or nature of an agency's program, or as a result of reorganization, to reduce the staff of any department or agency, those in the same group or class of positions in one or more agencies within the particular department or agency wherein the reduction is to be effected shall be reasonably compared in terms of relative fitness, efficiency and length of service, and those found to be least qualified for the remaining positions shall be laid off. Lastly, petitioner failed to invoke the presence of any of the circumstances enumerated under Section 2 of Republic Act No. 6656 which would show or tend to show the existence of bad faith in the implementation of the reorganization. Quintessentially, the reorganization having been conducted in accordance with the mandate of Dario, it can safely be concluded that indeed the reorganization was attended by good faith, ergo, valid. The dismissal of herein petitioner is a removal for cause which, therefore, does not violate his security of tenure. As a final note on this issue, we quote with approval the statement of Mme. Justice Ameurfina A. Melencio-Herrera in her dissenting opinion in the above-cited case: To be sure, the reorganization could affect the tenure of members of the career service as defined in Section 5, Article IV of Presidential Decree No. 807, and may even result in the separation from office of some meritorious employees. But even then, the greater good of the greatest number and the right of the citizenry to a good government, and as they themselves have mandated through the vehicle of Proclamation No. 3, provide the justification for the said injury to the individual. In terms of values, the interest of an employee to security of tenure must yield to the interest of the entire populace and to an efficient and honest government. II. Petitioner also maintains that "average" and "below average" efficiency ratings are not valid grounds for his termination from the service.

It has become a basic and primordial concern of the State to insure and promote the constitutional mandate that appointments in the civil service shall be made only according to merit and fitness pursuant to its adopted policy of requiring public officers and employees to serve with the highest degree of responsibility, integrity, loyalty and efficiency. 15 As a matter of fact, the development and
retention of a competent and efficient work force in the public service is considered as a primary concern of the Government. 16 Hence, employees are selected on the basis of merit and fitness to perform the duties and assume the responsibilities of the position to which they are appointed. 17 Concomitantly, the government has committed itself to engender a continuing program of career and personnel development for all government employees, 18 by establishing a performance evaluation system to be administered in such manner as to continually foster the improvement of individual employee efficiency and organizational effectiveness. 19

All these abundantly show that the State puts a premium on an individual's efficiency, merit and fitness before one is accepted into the career service. A civil service employee's efficiency rating, therefore, is a decisive factor for his continued service with the Government. The inescapable conclusion is that a "below average" efficiency rating is sufficient justification for the termination of a government employee such as herein petitioner. This is the reason why, painful as it may be, petitioner's separation must be affirmed if public good is to be subserved. In the words of respondent commission in its questioned resolution, it cannot "sanction the reappointment of said officials and employees who have fallen short of the performance necessary in order to maintain at all times efficiency and effectiveness in the Office." 20 III. Petitioner finally contends that where the purpose of the evaluation proceeding is to ascertain whether he should be retained or separated from the service, it is a proceeding to determine the existence of a ground for his termination and, therefore, he should be afforded a day in court, pursuant to the requirements of procedural due process, to defend himself against any adverse findings in the process of evaluation of his performance. Petitioner's contention cannot be sustained. Section 2 of Republic Act No. 6656 provides that "no officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing." Thus, there is no question that while dismissal due to abona fide reorganization is recognized as a valid cause, this does not justify a detraction from the mandatory requirement of notice and hearing. However, it is equally true and it is a basic rule of due process that "what the law prohibits is not the absence of previous notice but the absolute absence thereof and the lack of opportunity to be heard." 21 There is no violation of
procedural due process even where no hearing was conducted for as long as the party was given a chance to present his evidence and defend himself.

The records show that petitioner had the opportunity to present his side and/or to contest the results of the evaluation proceedings. In DBP's motion for the reconsideration of the original decision of respondent commission, respondent bank averred: It may be stated that although several appeals were received by the Final Review Committee from other employees similarly situated (i.e., also given temporary appointments for 1988), Mr. Domingo and Miss Javier never appealed their ratings or the extension of their temporary appointments in 1988. Even at this writing, the Bank has not received any formal appeal from them although they were advised to do so by their direct supervisor. 22 The fact that petitioner made no appeal to the Final Review Committee was duly considered by respondent commission in resolving said motion for reconsideration and in affirming the separation

of petitioner from the service, noting that "appellants Mr. Domingo, and Miss Javier did not file or submit their opposition to the motion for reconsideration." Consequently, petitioner cannot, by his own inaction, legally claim that he was denied due process of law. Considering petitioner's years of service, despite the unfortunate result of the reorganization insofar as he is concerned, he should be allowed separation and other retirement benefits accruing to him by reason of his termination, as provided for in Section 16, Article XVIII of the 1987 Constitution, as well as in Section 9 of Republic Act No. 6656 and Section 34 of Executive Order No. 81. WHEREFORE, no grave abuse of discretion having been committed by respondent Civil Service Commission, its challenged resolution of April 10, 1990 is hereby AFFIRMED. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 115863 March 31, 1995 AIDA D. EUGENIO, petitioner, vs. CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR ENRIQUEZ, JR.,respondents.

PUNO, J.: The power of the Civil Service Commission to abolish the Career Executive Service Board is challenged in this petition for certiorari and prohibition. First the facts. Petitioner is the Deputy Director of the Philippine Nuclear Research Institute. She applied for a Career Executive Service (CES) Eligibility and a CESO rank on August 2, 1993, she was given a CES eligibility. On September 15, 1993, she was recommended to the President for a CESO rank by the Career Executive Service Board. 1 All was not to turn well for petitioner. On October 1, 1993, respondent Civil Service Commission 2 passed Resolution No. 93-4359, viz: RESOLUTION NO. 93-4359 WHEREAS, Section 1(1) of Article IX-B provides that Civil Service shall be administered by the Civil Service Commission, . . .; WHEREAS, Section 3, Article IX-B of the 1987 Philippine Constitution provides that "The Civil Service Commission, as the central personnel agency of the government, is mandated to establish a career service and adopt measures to promote morale, efficiency, integrity, responsiveness, progresiveness and courtesy in the civil service, . . ."; WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the Administrative Code of 1987 grants the Commission the power, among others, to administer and enforce the constitutional and statutory provisions on the merit system for all levels and ranks in the Civil Service; WHEREAS, Section 7, Title I, Subtitle A, Book V of the Administrative Code of 1987 Provides, among others, that The Career Service shall be characterized by (1) entrance based on merit and fitness to be determined as far as practicable by competitive examination, or based highly technical qualifications; (2) opportunity for advancement to higher career positions; and (3) security of tenure;

WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the administrative Code of 1987 provides that "The third level shall cover Positions in the Career Executive Service"; WHEREAS, the Commission recognizes the imperative need to consolidate, integrate and unify the administration of all levels of positions in the career service. WHEREAS, the provisions of Section 17, Title I, Subtitle A. Book V of the Administrative Code of 1987 confers on the Commission the power and authority to effect changes in its organization as the need arises. WHEREAS, Section 5, Article IX-A of the Constitution provides that the Civil Service Commission shall enjoy fiscal autonomy and the necessary implications thereof; NOW THEREFORE, foregoing premises considered, the Civil Service Commission hereby resolves to streamline reorganize and effect changes in its organizational structure. Pursuant thereto, the Career Executive Service Board, shall now be known as the Office for Career Executive Service of the Civil Service Commission. Accordingly, the existing personnel, budget, properties and equipment of the Career Executive Service Board shall now form part of the Office for Career Executive Service. The above resolution became an impediment. to the appointment of petitioner as Civil Service Officer, Rank IV. In a letter to petitioner, dated June 7, 1994, the Honorable Antonio T. Carpio, Chief Presidential legal Counsel, stated: xxx xxx xxx On 1 October 1993 the Civil Service Commission issued CSC Resolution No. 934359 which abolished the Career Executive Service Board. Several legal issues have arisen as a result of the issuance of CSC Resolution No. 93-4359, including whether the Civil Service Commission has authority to abolish the Career Executive Service Board. Because these issues remain unresolved, the Office of the President has refrained from considering appointments of career service eligibles to career executive ranks. xxx xxx xxx You may, however, bring a case before the appropriate court to settle the legal issues arising from issuance by the Civil Service Commission of CSC Resolution No. 93-4359, for guidance of all concerned. Thank You. Finding herself bereft of further administrative relief as the Career Executive Service Board which recommended her CESO Rank IV has been abolished, petitioner filed the petition at bench to annul, among others, resolution No. 93-4359. The petition is anchored on the following arguments: A.

IN VIOLATION OF THE CONSTITUTION, RESPONDENT COMMISSION USURPED THE LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ABOLISHED THE CESB, AN OFFICE CREATED BY LAW, THROUGH THE ISSUANCE OF CSC: RESOLUTION NO. 93-4359; B. ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT CSC USURPED THE LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ILLEGALLY AUTHORIZED THE TRANSFER OF PUBLIC MONEY, THROUGH THE ISSUANCE OF CSC RESOLUTION NO. 93-4359. Required to file its Comment, the Solicitor General agreed with the contentions of petitioner. Respondent Commission, however, chose to defend its ground. It posited the following position: ARGUMENTS FOR PUBLIC RESPONDENT-CSC I. THE INSTANT PETITION STATES NO CAUSE OF ACTION AGAINST THE PUBLIC RESPONDENT-CSC. II. THE RECOMMENDATION SUBMITTED TO THE PRESIDENT FOR APPOINTMENT TO A CESO RANK OF PETITIONER EUGENIO WAS A VALID ACT OF THE CAREER EXECUTIVE SERVICE BOARD OF THE CIVIL SERVICE COMMISSION AND IT DOES NOT HAVE ANY DEFECT. III. THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM QUESTIONING THE VALIDITY OF THE RECOMMENDATION OF THE CESB IN FAVOR OF PETITIONER EUGENIO SINCE THE PRESIDENT HAS PREVIOUSLY APPOINTED TO CESO RANK FOUR (4) OFFICIALS SIMILARLY SITUATED AS SAID PETITIONER. FURTHERMORE, LACK OF MEMBERS TO CONSTITUTE A QUORUM. ASSUMING THERE WAS NO QUORUM, IS NOT THE FAULT OF PUBLIC RESPONDENT CIVIL SERVICE COMMISSION BUT OF THE PRESIDENT WHO HAS THE POWER TO APPOINT THE OTHER MEMBERS OF THE CESB. IV. THE INTEGRATION OF THE CESB INTO THE COMMISSION IS AUTHORIZED BY LAW (Sec. 12 (1), Title I, Subtitle A, Book V of the Administrative Code of the 1987). THIS PARTICULAR ISSUE HAD ALREADY BEEN SETTLED WHEN THE HONORABLE COURT DISMISSED THE PETITION FILED BY THE HONORABLE MEMBERS OF THE HOUSE OF REPRESENTATIVES, NAMELY: SIMEON A. DATUMANONG, FELICIANO R. BELMONTE, JR., RENATO V. DIAZ, AND MANUEL M. GARCIA IN G.R. NO. 114380. THE AFOREMENTIONED PETITIONERS ALSO QUESTIONED THE INTEGRATION OF THE CESB WITH THE COMMISSION. We find merit in the petition. 3 The controlling fact is that the Career Executive Service Board (CESB) was created in the Presidential Decree (P.D.) No. 1 on September 1, 1974 4 which adopted the Integrated Plan. Article IV,
Chapter I, Part of the III of the said Plan provides:

Article IV Career Executive Service

1. A Career Executive Service is created to form a continuing pool of well-selected and development oriented career administrators who shall provide competent and faithful service. 2. A Career Executive Service hereinafter referred to in this Chapter as the Board, is created to serve as the governing body of the Career Executive Service. The Board shall consist of the Chairman of the Civil Service Commission as presiding officer, the Executive Secretary and the Commissioner of the Budget as ex-officio members and two other members from the private sector and/or the academic community who are familiar with the principles and methods of personnel administration. xxx xxx xxx 5. The Board shall promulgate rules, standards and procedures on the selection, classification, compensation and career development of members of the Career Executive Service. The Board shall set up the organization and operation of the service. (Emphasis supplied) It cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished by the legislature. This follows an unbroken stream of rulings that the creation and abolition of public offices is primarily a legislative function. As aptly summed up in AM JUR 2d on Public Officers and Employees, 5 viz: Except for such offices as are created by the Constitution, the creation of public offices is primarily a legislative function. In so far as the legislative power in this respect is not restricted by constitutional provisions, it supreme, and the legislature may decide for itself what offices are suitable, necessary, or convenient. When in the exigencies of government it is necessary to create and define duties, the legislative department has the discretion to determine whether additional offices shall be created, or whether these duties shall be attached to and become ex-officio duties of existing offices. An office created by the legislature is wholly within the power of that body, and it may prescribe the mode of filling the office and the powers and duties of the incumbent, and if it sees fit, abolish the office. In the petition at bench, the legislature has not enacted any law authorizing the abolition of the CESB. On the contrary, in all the General Appropriations Acts from 1975 to 1993, the legislature has set aside funds for the operation of CESB. Respondent Commission, however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book V of the Administrative Code of 1987 as the source of its power to abolish the CESB. Section 17 provides: Sec. 17. Organizational Structure. Each office of the Commission shall be headed by a Director with at least one Assistant Director, and may have such divisions as are necessary independent constitutional body, the Commission may effect changes in the organization as the need arises. But as well pointed out by petitioner and the Solicitor General, Section 17 must be read together with Section 16 of the said Code which enumerates the offices under the respondent Commission, viz: Sec. 16. Offices in the Commission. The Commission shall have the following offices:

(1) The Office of the Executive Director headed by an Executive Director, with a Deputy Executive Director shall implement policies, standards, rules and regulations promulgated by the Commission; coordinate the programs of the offices of the Commission and render periodic reports on their operations, and perform such other functions as may be assigned by the Commission. (2) The Merit System Protection Board composed of a Chairman and two (2) members shall have the following functions: xxx xxx xxx (3) The Office of Legal Affairs shall provide the Chairman with legal advice and assistance; render counselling services; undertake legal studies and researches; prepare opinions and ruling in the interpretation and application of the Civil Service law, rules and regulations; prosecute violations of such law, rules and regulations; and represent the Commission before any court or tribunal. (4) The Office of Planning and Management shall formulate development plans, programs and projects; undertake research and studies on the different aspects of public personnel management; administer management improvement programs; and provide fiscal and budgetary services. (5) The Central Administrative Office shall provide the Commission with personnel, financial, logistics and other basic support services. (6) The Office of Central Personnel Records shall formulate and implement policies, standards, rules and regulations pertaining to personnel records maintenance, security, control and disposal; provide storage and extension services; and provide and maintain library services. (7) The Office of Position Classification and Compensation shall formulate and implement policies, standards, rules and regulations relative to the administration of position classification and compensation. (8) The Office of Recruitment, Examination and Placement shall provide leadership and assistance in developing and implementing the overall Commission programs relating to recruitment, execution and placement, and formulate policies, standards, rules and regulations for the proper implementation of the Commission's examination and placement programs. (9) The Office of Career Systems and Standards shall provide leadership and assistance in the formulation and evaluation of personnel systems and standards relative to performance appraisal, merit promotion, and employee incentive benefit and awards. (10) The Office of Human Resource Development shall provide leadership and assistance in the development and retention of qualified and efficient work force in the Civil Service; formulate standards for training and staff development; administer service-wide scholarship programs; develop training literature and materials; coordinate and integrate all training activities and evaluate training programs.

(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and regulations for the effective conduct or inspection and audit personnel and personnel management programs and the exercise of delegated authority; provide technical and advisory services to Civil Service Regional Offices and government agencies in the implementation of their personnel programs and evaluation systems. (12) The Office of Personnel Relations shall provide leadership and assistance in the development and implementation of policies, standards, rules and regulations in the accreditation of employee associations or organizations and in the adjustment and settlement of employee grievances and management of employee disputes. (13) The Office of Corporate Affairs shall formulate and implement policies, standards, rules and regulations governing corporate officials and employees in the areas of recruitment, examination, placement, career development, merit and awards systems, position classification and compensation, performing appraisal, employee welfare and benefit, discipline and other aspects of personnel management on the basis of comparable industry practices. (14) The Office of Retirement Administration shall be responsible for the enforcement of the constitutional and statutory provisions, relative to retirement and the regulation for the effective implementation of the retirement of government officials and employees. (15) The Regional and Field Offices. The Commission shall have not less than thirteen (13) Regional offices each to be headed by a Director, and such field offices as may be needed, each to be headed by an official with at least the rank of an Assistant Director. As read together, the inescapable conclusion is that respondent Commission's power to reorganize is limited to offices under its control as enumerated in Section 16, supra. From its inception, the CESB was intended to be an autonomous entity, albeit administratively attached to respondent Commission. As conceptualized by the Reorganization Committee "the CESB shall be autonomous. It is expected to view the problem of building up executive manpower in the government with a broad and positive outlook." 6 The essential autonomous
character of the CESB is not negated by its attachment to respondent Commission. By said attachment, CESB was not made to fall within the control of respondent Commission. Under the Administrative Code of 1987, the purpose of attaching one functionally inter-related government agency to another is to attain "policy and program coordination." This is clearly etched out in Section 38(3), Chapter 7, Book IV of the aforecited Code, to wit:

(3) Attachment. (a) This refers to the lateral relationship between the department or its equivalent and attached agency or corporation for purposes of policy and program coordination. The coordination may be accomplished by having the department represented in the governing board of the attached agency or corporation, either as chairman or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or agency comply with a system of periodic reporting which shall reflect the progress of programs and projects; and having the department or its equivalent provide general policies through its representative in the board, which shall serve as the framework for the internal policies of the attached corporation or agency.

Respondent Commission also relies on the case of Datumanong, et al., vs. Civil Service Commission, G. R. No. 114380 where the petition assailing the abolition of the CESB was dismissed for lack of cause of action. Suffice to state that the reliance is misplaced considering that the cited case was dismissed for lack of standing of the petitioner, hence, the lack of cause of action. IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent Commission is hereby annulled and set aside. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 112745 October 16, 1997 AQUILINO T. LARIN, petitioner, vs. THE EXECUTIVE SECRETARY, SECRETARY OF FINANCE, COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE AND THE COMMITTEE CREATED TO INVESTIGATE THE ADMINISTRATIVE COMPLAINT AGAINST AQUILINO T. LARIN, COMPOSED OF FRUMENCIO A. LAGUSTAN, JOSE B. ALEJANDRINO AND JAIME M. MAZA, respondents.

TORRES, JR., J.: Challenged in this petition is the validity of petitioner's removal from service as Assistant Commissioner of the Excise Tax Service of the Bureau of Internal Revenue. Incidentally, he questions Memorandum Order No. 164 issued by the Office of the President, which provides for the creation of "A Committee to Investigate the Administrative Complaint Against Aquilino T. Larin, Assistant Commissioner, Bureau of Internal Revenue" as well as the investigation made in pursuance thereto, and Administrative Order No. 101 dated December 2, 1993 which found him guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissal from office. Likewise, petitioner seeks to assail the legality of Executive Order No. 132, issued by President Ramos on October 26, 1993, which provides for the "Streamlining of the Bureau of Internal Revenue," and of its implementing rules issued by the Bureau of Internal Revenue, namely: a) Administrative Order No. 4-93, which provides for the "Organizational Structure and Statement of General Functions of Offices in the National Office" and b) Administrative Order No. 5-93, which provides for "Redefining the Areas of Jurisdiction and Renumbering of Regional And District Offices." The antecedent facts of the instant case as succinctly related by the Solicitor General are as follows: On September 18, 1992, 1 a decision was rendered by the Sandiganbayan convicting herein petitioner
Aquilino T. Larin, Revenue Specific Tax Officer, then Assistant Commissioner of the Bureau of Internal Revenue and his co-accused (except Justino E. Galban, Jr.) of the crimes of violation of Section 268 (4) of the National Internal Revenue Code and Section 3 (e) of R.A. 3019 in Criminal Cases Nos. 1420814209, entitled "People of the Philippines, Plaintiff vs. Aquilino T. Larin, Teodoro T. Pareno, Justino E. Galban, Jr. and Potenciana N. Evangelista, Accused," the dispositive portion of the judgment reads:

WHEREFORE, judgment is now rendered in Criminal Cases Nos. 14208 and 14209 convicting accused Assistant Commissioner for Specific Tax AQUILINO T. LARIN, Chief of the Alcohol Tax Division TEODORO P. PARENO, and Chief of the Revenue Accounting Division POTENCIANA M. EVANGELISTA:

xxx xxx xxx SO ORDERED. The fact of petitioner's conviction was reported to the President of the Philippines by the then Acting Finance Secretary Leong through a memorandum dated June 4, 1993. The memorandum states, inter alia: This is a report in the case of Assistant Commissioner AQUILINO T. LARIN of the Excise Tax Service, Bureau of Internal Revenue, a presidential appointee, one of those convicted in Criminal Case Nos. 14208-14209, entitled "People of the Philippines vs. Aquilino T. Larin, et. al." referred to the Department of Finance by the Commissioner of Internal Revenue. The cases against Pareno and Evangelista are being acted upon by the Bureau of Internal Revenue as they are non-presidential appointees. xxx xxx xxx It is clear from the foregoing that Mr. Larin has been found beyond reasonable doubt to have committed acts constituting grave misconduct. Under the Civil Service Laws and Rules which require only preponderance of evidence, grave misconduct is punishable by dismissal. Acting by authority of the President, Sr. Deputy Executive Secretary Leonardo A. Quisumbing issued Memorandum Order No. 164 dated August 25, 1993 which provides for the creation of an Executive Committee to investigate the administrative charge against herein petitioner Aquilino T. Larin. It states thus: A Committee is hereby created to investigate the administrative complaint filed against Aquilino T. Larin, Assistant Commissioner, Bureau of Internal Revenue, to be composed of: Atty. Frumencio A. Lagustan Chairman Assistant Executive Secretary for Legislation Mr. Jose B. Alejandro Member Presidential Assistant Atty. Jaime M. Maza Member Assistant Commissioner for Inspector Services Bureau of Internal Revenue The Committee shall have all the powers and prerogatives of (an) investigating committee under the Administrative Code of 1987 including the power to summon witnesses, administer oath or take testimony or evidence relevant to the investigation by subpoena ad testificandum and subpoenaduces tecum. xxx xxx xxx

The Committee shall convene immediately, conduct the investigation in the most expeditious manner, and terminate the same as soon as practicable from its first scheduled date of hearing. xxx xxx xxx Consequently, the Committee directed the petitioner to respond to the administrative charge leveled against him through a letter dated September 17, 1993, thus: Presidential Memorandum Order No. 164 dated August 25, 1993, a xerox copy of which is hereto attached for your ready reference, created an Investigation Committee to look into the charges against you which are also the subject of the Criminal Cases No. 14208 and 14209 entitled People of the Philippines vs. Aquilino T . Larin, et. al. The Committee has in its possession a certified true copy of the Decision of the Sandiganbayan in the above-mentioned cases. Pursuant to Presidential Memorandum Order No. 164, you are hereby directed to file your position paper on the aforementioned charges within seven (7) days from receipt hereof . . . . Failure to file the required position paper shall be considered as a waiver on your part to submit such paper or to be heard, in which case, the Committee shall deem the case submitted on the basis of the documents and records at hand. In compliance, petitioner submitted a letter dated September 30, 1993 which was addressed to Atty. Frumencio A. Lagustan, the Chairman of the Investigating Committee. In said latter, he asserts that, The case being sub-judice, I may not, therefore, comment on the merits of the issues involved for fear of being cited in contempt of Court. This position paper is thus limited to furnishing the Committee pertinent documents submitted with the Supreme Court and other tribunal which took cognizance of the case in the past, as follows: xxx xxx xxx The foregoing documents readily show that am not administratively liable or criminally culpable of the charges leveled against me, and that the aforesaid cases are mere persecutions caused to be filed and are being orchestrated by taxpayers who were prejudiced by multi-million peso assessments I caused to be issued against them in my official capacity as Assistant Commissioner, Excise Tax Office of the Bureau of Internal Revenue. In the same letter, petitioner claims that the administrative complaint against him is already barred: a) on jurisdictional ground as the Office of the Ombudsman had already taken cognizance of the case and had caused the filing only of the criminal charges against him, b) by res judicata, c) by double jeopardy, and d) because to proceed with the case would be redundant, oppressive and a plain persecution against him. Meanwhile, the President issued the challenged Executive Order No. 132 dated October 26, 1993 which mandates for the streamlining of the Bureau of Internal Revenue. Under said order, some

positions and functions are either abolished, renamed, decentralized or transferred to other offices, while other offices are also created. The Excise Tax Service or the Specific Tax Service, of which petitioner was the Assistant Commissioner, was one of those offices that was abolished by said executive order. The corresponding implementing rules of Executive Order No. 132, namely, Revenue Administrative Orders Nos. 4-93 and 5-93, were subsequently issued by the Bureau of Internal Revenue. On October 27, 1993, or one day after the promulgation of Executive Order No. 132, the President appointed the following as BIR Assistant Commissioners: 1. Bernardo A. Frianeza 2. Dominador L. Galura 3. Jaime D. Gonzales 4. Lilia C. Guillermo 5. Rizalina S. Magalona 6. Victorino C. Mamalateo 7. Jaime M. Maza 8. Antonio N. Pangilinan 9. Melchor S. Ramos 10. Joel L. Tan-Torres Consequently, the President, in the assailed Administrative Order No. 101 dated December 2, 1993, found petitioner guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissal with forfeiture of his leave credits and retirement benefits including disqualification for reappointment in the government service. Aggrieved, petitioner filed directly with this Court the instant petition on December 13, 1993 to question basically his alleged unlawful removal from office. On April 17, 1996 and while the instant petition is pending, this Court set aside the conviction of petitioner in Criminal Case Nos. 14208 and 14209. In his petition, petitioner challenged the authority of the President to dismiss him from office. He argued that in so far as presidential appointees who are Career Executive Service Officers are concerned, the President exercises only the power of control not the power to remove. He also averred that the administrative investigation conducted under Memorandum Order No. 164 is void as it violated his right to due process. According to him, the letter of the Committee dated September 17, 1993 and his position paper dated September 30, 1993 are not sufficient for purposes of complying with the requirements of due process. He alleged that he was not informed of the administrative charges leveled against him nor was he given official notice of his dismissal.

Petitioner likewise claimed that he was removed as a result of the reorganization made by the Executive Department in the BIR pursuant to Executive Order No. 132. Thus, he assailed said Executive Order No. 132 and its implementing rules, namely, Revenue Administrative Orders 4-93 and 5-93 for being ultra vires. He claimed that there is yet no law enacted by Congress which authorizes the reorganization by the Executive Department of executive agencies, particularly the Bureau of Internal Revenue. He said that the reorganization sought to be effected by the Executive Department on the basis of E.O. No. 132 is tainted with bad faith in apparent violation of Section 2 of R.A. 6656, otherwise known as the Act Protecting the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization. On the other hand. respondents contended that since petitioner is a presidential appointee, he falls under the disciplining authority of the President. They also contended that E.O. No. 132 and its implementing rules were validly issued pursuant to Sections 48 and 62 of Republic Act No. 7645. Apart from this, the other legal bases of E.O. No. 132 as stated in its preamble are Section 63 of E.O. No. 127 (Reorganizing the Ministry of Finance), and Section 20, Book III of E.O. No. 292, otherwise known as the Administrative Code of 1987. In addition, it is clear that in Section 11 of R.A. No. 6656 future reorganization is expressly contemplated and nothing in said law that prohibits subsequent reorganization through an executive order. Significantly, respondents clarified that petitioner was not dismissed by virtue of EO 132. Respondents claimed that he was removed from office because he was found guilty of grave misconduct in the administrative cases filed against him. The ultimate issue to be resolved in the instant case falls on the determination of the validity of petitioner's dismissal from office. Incidentally, in order to resolve this matter, it is imperative that We consider these questions: a) Who has the power to discipline the petitioner?, b) Were the proceedings taken pursuant to Memorandum Order No. 164 in accord with due process?, c) What is the effect of petitioner's acquittal in the criminal case to his administrative charge?, d) Does the President have the power to reorganize the BIR or to issue the questioned E.O. NO. 132?, and e) Is the reorganization of BIR pursuant to E.O. No. 132 tainted with bad faith? At the outset, it is worthy to note that the position of Assistant Commissioner of the BIR is part of the Career Executive Service. 2 Under the law, 3 Career Executive Service officers, namely, Undersecretary,
Assistant Secretary, Bureau Director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department Service and other officers of equivalent rank as may be identified by the Career Executive Service Board, are all appointed by the President. Concededly, petitioner was appointed as Assistant Commissioner in January, 1987 by then President Aquino. Thus, petitioner is a presidential appointee who belongs to career service of the Civil Service. Being a presidential appointee, he comes under the direct disciplining authority of the President. This is in line with the well settled principle that the "power to remove is inherent in the power to appoint" conferred to the President by Section 16, Article VII of the Constitution. Thus, it is ineluctably clear that Memorandum Order No. 164, which created a committee to investigate the administrative charge against petitioner, was issued pursuant to the power of removal of the President. This power of removal, however, is not an absolute one which accepts no reservation. It must be pointed out that petitioner is a career service officer. Under the Administrative Code of 1987, career service is characterized by the existence of security of tenure, as contra-distinguished from non-career service whose tenure is co-terminus with that of the appointing authority or subject to his pleasure, or limited to a period specified by law or to the duration of a particular project for which purpose the employment was made. As a career service officer, petitioner enjoys the right to security of tenure. No less than the 1987 Constitution guarantees the right of security of tenure of the employees of the civil service. Specifically, Section 36 of P.D. No. 807, as amended, otherwise known as Civil Service Decree of the Philippines, is emphatic that career service officers and employees who enjoy security of tenure may be removed only for any of the causes enumerated in said law. In other words, the fact that petitioner is a presidential appointee does not give the appointing authority the license to remove him at will or at his pleasure for it is an admitted fact that he is likewise a career service officer who under the law is the recipient of tenurial protection, thus, may only be removed for a cause and in accordance with procedural due process.

Was petitioner then removed from office for a legal cause under a valid proceeding? Although the proceedings taken complied with the requirements of procedural due process, this Court, however, considers that petitioner was not dismissed for a valid cause. It should be noted that what precipitated the creation of the investigative committee to look into the administrative charge against petitioner is his conviction by the Sandiganbayan in Criminal Case Nos. 14208 and 14209. As admitted by the respondents, the administrative case against petitioner is based on the Sandiganbayan Decision of September 18, 1992. Thus, in the Administrative Order No. 101 issued by Senior Deputy Executive Secretary Quisumbing which found petitioner guilty of grave misconduct, it clearly states that: This pertains to the administrative charge against Assistant Commissioner Aquilino T. Larin of the Bureau of Internal Revenue, for grave misconduct by virtue of a Memorandum signed by Acting Secretary Leong of the Department of Finance, on the basis of a decision handed down by the Hon. Sandiganbayan convicting Larin, et. al. in Criminal Case Nos. 14208 and 14209. 4 In a nutshell, the criminal cases against petitioner refer to his alleged violation of Section 268 (4) of the National Internal Revenue Code and of Section 3 (e) of R.A. No. 3019 as a consequence of his act of favorably recommending the grant of tax credit to Tanduay Distillery, Inc.. The pertinent portion of the judgment of the Sandiganbayan reads: As above pointed out, the accused had conspired in knowingly preparing false memoranda and certification in order to effect a fraud upon taxes due to the government. By their separate acts which had resulted in an appropriate tax credit of P180,701,682.00 in favor of Tanduay. The government had been defrauded of a tax revenue for the full amount, if one is to look at the availments or utilization thereof (Exhibits "AA" to "AA- 31-a"), or for a substantial portion thereof (P73,000,000.00) if we are to rely on the letter of Deputy Commissioner Eufracio D. Santos (Exhibits "21" for all the accused). As pointed out above, the confluence of acts and omissions committed by accused Larin, Pareno and Evangelista adequately prove conspiracy among them for no other purpose than to bring about a tax credit which Tanduay did not deserve. These misrepresentations as to how much Tanduay had paid in ad valorem taxes obviously constituted a fraud of tax revenue of the government . . . . 5 However, it must be stressed at this juncture that the conviction of petitioner by the Sandiganbayan was set asideby this Court in our decision promulgated on April 17, 1996 in G.R. Nos. 108037-38 and 107119-20. We specifically ruled in no uncertain terms that: a) petitioner can not be held negligent in relying on the certification of a co-equal unit in the BIR, b) it is not incumbent upon Larin to go beyond the certification made by the Revenue Accounting Division that Tanduay Distillery, Inc. had paid the ad valorem taxes, c) there is nothing irregular or anything false in Larin's marginal note on the memorandum addressed to Pareno, the Chief of Alcohol Tax Division who was also one of the accused, but eventually acquitted, in the said criminal cases, and d) there is no proof of actual agreement between the accused, including petitioner, to commit the illegal acts charged. We are emphatic in our resolution in said cases that there is nothing "illegal with the acts committed by the petitioner(s)." We also declare that "there is no showing that petitioner(s) had acted irregularly, or performed acts outside of his (their) official functions." Significantly, these acts which. We categorically declare to be not unlawful and improper in G.R. Nos. 108037-38 and G.R. Nos. 107119-20 are the very same acts for which petitioner is held to be administratively responsible. Any

charge of malfeasance or misfeasance on the part of the petitioner is clearly belied by our conclusion in said cases. In the light of this decisive pronouncement, We see no reason for the administrative charge to continue it must, thus, be dismissed. We are not unaware of the rule that since administrative cases are independent from criminal actions for the same act or omission, the dismissal or acquittal of the criminal charge does not foreclose the institution of administrative action nor carry with it the relief from administrative liability. 6 However, the circumstantial setting of the instant case sets it miles apart from the foregoing rule
and placed it well within the exception. Corollarily, where the very basis of the administrative case against petitioner is his conviction in the criminal action which was later on set aside by this Court upon a categorical and clear finding that the acts for which he was administratively held liable are not unlawful and irregular, the acquittal of the petitioner in the criminal case necessarily entails the dismissal of the administrative action against him, because in such a case, there is no more basis nor justifiable reason to maintain the administrative suit.

On the aspect of procedural due process, suffice it to say that petitioner was given every chance to present his side. The rule is well settled that the essence of due process in administrative proceedings is that a party be afforded a reasonable opportunity to be heard and to submit any evidence he may have in support of his defense.7 The records clearly show that on October 1, 1993
petitioner submitted his letter-response dated September 30, 1993 to the administrative charge filed against him. Aside from his letter, he also submitted various documents attached as annexes to his letter, all of which are evidences supporting his defense. Prior to this, he received a letter dated September 17, 1993 from the Investigation Committee requiring him to explain his side concerning the charge. It can not therefore be argued that petitioner was denied of due process.

Let us now examine Executive Order No. 132. As stated earlier, with the issuance of Executive Order No. 132, some of the positions and offices, including the office of Excise Tax Services of which petitioner was the Assistant Commissioner, were abolished or otherwise decentralized. Consequently, the President released the list of appointed Assistant Commissioners of the BIR. Apparently, petitioner was not included. We do not agree. Under its preamble, E.O. No. 132 lays down the legal bases of its issuance, namely: a) Section 48 and 62 of R.A. No. 7645, b) Section 63 of E.O. No. 127, and c) Section 20, Book III of E.O. No. 292. Section 48 of R.A. 7645 provides that: Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch. The heads of departments, bureaus and offices and agencies are hereby directed to identify their respective activities which are no longer essential in the delivery of public services and which may bescaled down, phased out or abolished, subject to civil service rules and regulations. . . . Actual scaling down, phasing out or abolition of the activities shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. (emphasis ours) Said provision clearly mentions the acts of "scaling down, phasing out and abolition" of offices only and does not cover the creation of offices or transfer of functions. Nevertheless, the act of creating and decentralizing is included in the subsequent provision of Section 62, which provides that:

Sec. 62. Unauthorized organizational charges. Unless otherwise created by law or directed by the President of the Philippines, no organizational unit of charges in key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act. (emphasis ours) The foregoing provision evidently shows that the President is authorized to effect organizational charges including the creation of offices in the department or agency concerned. The contention of petitioner that the two provisions are riders deserves scant consideration. Well settled is the rule that every law has in its favor the presumption of constitutionality. 8 Unless and until
a specific provision of the law is declared invalid and unconstitutional, the same is valid and biding for all intents and purposes.

Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states: Sec. 20. Residual Powers. Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law. (emphasis ours) This provision speaks of such other powers vested in the President under the law. What law then which gives him the power to reorganize? It is Presidential Decree No. 1772 9 which amended
Presidential Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials. The validity of these two decrees are unquestionable. The 1987 Constitution clearly provides that "all laws, decrees, executive orders, proclamations, letters of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed or revoked." 10 So far, there is yet no law amending or repealing said decrees. Significantly, the Constitution itself recognizes future reorganizations in the government as what is revealed in Section 16 of Article XVIII, thus:

Sec. 16. Career civil service employees separated from service not for cause but as a result of the . . . reorganization following the ratification of this Constitution shall be entitled to appropriate separation pay . . . However, We can not consider E.O. No. 127 signed on January 30, 1987 as a legal basis for the reorganization of the BIR. E.O. No. 127 should be related to the second paragraph of Section 11 of Republic Act No. 6656. Section 11 provides inter alia: xxx xxx xxx In the case of the 1987 reorganization of the executive branch, all departments and agencies which are authorized by executive orders promulgated by the President to reorganize shall have ninety daysfrom the approval of this act within which to implement their respective reorganization plans in accordance with the provisions of this Act. (emphasis ours)

Executive Order No. 127 was part of the 1987 reorganization contemplated under said provision. Obviously, it had become stale by virtue of the expiration of the ninety day deadline period. It can not thus be used as a proper basis for the reorganization of the BIR. Nevertheless, as shown earlier, there are other legal bases to sustain the authority of the President to issue the questioned E.O. NO. 132. While the President's power to reorganize can not be denied, this does not mean however that the reorganization itself is properly made in accordance with law. Well-settled is the rule that reorganization is regarded as valid provided it is pursued in good faith. Thus, in Dario vs. Mison, this Court has had the occasion to clarify that: As a general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make bureaucracy more efficient. In that event no dismissal or separation actually occurs because the position itself ceases to exist. And in that case the security of tenure would not be a Chinese wall. Be that as it may, if the abolition which is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, or otherwise not in good faith, no valid abolition takes place and whatever abolition is done is void ab initio. There is an invalid abolition as where there is merely a change of nomenclature of positions or where claims of economy are belied by the existence of ample funds. 11 In this regard, it is worth mentioning that Section 2 of R. A. No. 6656 lists down the circumstances evidencing bad faith in the removal of employees as a result of the reorganization, thus: Sec. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of the reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party: a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; b) Where an office is abolished and another performing substantially the same functions is created; c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; e) Where the removal violates the order of separation provided in Section 3 hereof. A reading of some of the provisions of the questioned E.O. No. 132 clearly leads us to an inescapable conclusion that there are circumstances considered as evidences of bad faith in the reorganization of the BIR.

Section 1.1.2 of said executive order provides that: 1.1.2 The Intelligence and Investigation Office and the Inspection Service are abolished. An Intelligence and Investigation Service is hereby created to absorb the same functions of the abolished office and service. . . . (emphasis ours) This provision is a clear illustration of the circumstance mentioned in Section 2 (b) of R.A. No. 6656 that an office is abolished and another one performing substantially the same function is created. Another circumstance is the creation of services and divisions in the BIR resulting to a significant increase in the number of positions in the said bureau as contemplated in paragraph (a) of Section 2 of R.A. No. 6656. Under Section 1.3 of E.O. No. 132, the Information Systems Group has two newly created Systems Services. Aside from this, six new divisions are also created. Under Section 1.2.1, three more divisions of the Assessment Service are formed. With these newly created offices, there is no doubt that a significant increase of positions will correspondingly follow. Furthermore, it is perceivable that the non-reappointment of the petitioner as Assistant Commissioner violates Section 4 of R.A. No. 6656. Under said provision, officers holding permanent appointments are given preference for appointment to the new positions in the approved staffing pattern comparable to their former positions or in case there are not enough comparable positions to positions next lower in rank. It is undeniable that petitioner is a career executive officer who is holding a permanent position. Hence, he should have been given preference for appointment in the position of Assistant Commissioner. As claimed by petitioner, Antonio Pangilinan who was one of those appointed as Assistant Commissioner, "is an outsider of sorts to the Bureau, not having been an incumbent officer of the Bureau at the time of the reorganization." We should not lose sight of the second paragraph of Section 4 of R.A. No. 6656 which explicitly states that no new employees shall be taken in until all permanent officers shall have been appointed for permanent position. IN VIEW OF THE FOREGOING, the petition is granted, and petitioner is hereby reinstated to his position as Assistant Commissioner without loss of seniority rights and shall be entitled to full backwages from the time of his separation from service until actual reinstatement unless, in the meanwhile, he would have reached the compulsory retirement age of sixty-five years in which case, he shall be deemed to have retired at such age and entitled thereafter to the corresponding retirement benefits. SO ORDERED.