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Prepared by: Atty. Judiel M. Pareja

A. In General
1. People vs. Maceran, October 18, 1977
Aquino J.
On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes,
Nazario Aquino and Carlito del Rosario were charged by a Constabulary
investigator in the municipal court of Sta. Cruz, Laguna with having violated
Fisheries Administrative Order No. 84-1. It was alleged in the complaint that
the five accused in the morning of March 1, 1969 resorted to electro fishing in
the waters of Barrio San Pablo Norte, Sta. Cruz using a device or equipment
to catch fish thru electric current which thereby destroy any aquatic animals
within its current reach, to the detriment and prejudice of the populace. The
municipal court quashed the complaint and the CFI affirmed such dismissal.
Hence this petition.
Whether or not the 1967 regulation, penalizing electro fishing in fresh water
fisheries, promulgated by the Secretary of Agriculture and Natural Resources
and the Commissioner of Fisheries under the old Fisheries Law and the law
creating the Fisheries Commission is valid.
No. The court held that the that the Secretary of Agriculture and Natural
Resources and the Commissioner of Fisheries exceeded their authority in
issuing Fisheries Administrative Orders Nos. 84 and 84-1 and that those
orders are not warranted under the Fisheries Commission, Republic Act No.
The reason is that the Fisheries Law does not expressly prohibit electro
fishing. As electro fishing is not banned under that law, the Secretary of
Agriculture and Natural Resources and the Commissioner of Fisheries are
powerless to penalize it. In other words, Administrative Orders Nos. 84 and
84-1, in penalizing electro fishing, are devoid of any legal basis.
Had the lawmaking body intended to punish electro fishing, a penal provision
to that effect could have been easily embodied in the old Fisheries Law.
Administrative regulations adopted under legislative authority by a particular

department must be in harmony with the provisions of the law, and should be
for the sole purpose of carrying into effect its general provisions. By such
regulations, of course, the law itself cannot be extended to amend or expand
the statutory requirements or to embrace matters not covered by the statute.

2. Smart Communications, Inc. vs. NTC, August 12, 2003

Facts: Petitioners Isla Communications Co., Inc. and Pilipino Telephone
Corporation filed against the National Telecommunications Commission, an
action for declaration of nullity of NTC Memorandum Circular No. 13-6-2000
(the Billing Circular). Petitioners allege that the NTC has no jurisdiction to
regulate the sale of consumer goods such as the prepaid call cards since
such jurisdiction belongs to the Department of Trade and Industry under the
Consumer Act of the Philippines; that the Billing Circular is oppressive,
confiscatory and violative of the constitutional prohibition against deprivation
of property without due process of law; that the Circular will result in the
impairment of the viability of the prepaid cellular service by unduly prolonging
the validity and expiration of the prepaid SIM and call cards; and that the
requirements of identification of prepaid card buyers and call balance
announcement are unreasonable. Hence, they prayed that the Billing Circular
be declared null and void ab initio.
Issue :WON the RTC has jurisdiction over the case
Held: Petitions are granted. The issuance by the NTC of Memorandum
Circular No. 13-6-2000 and its Memorandum dated October 6, 2000 was
pursuant to its quasi-legislative or rule-making power. As such, petitioners
were justified in invoking the judicial power of the Regional Trial Court to
assail the constitutionality and validity of the said issuances. What is
assailed is the validity or constitutionality of a rule or regulation issued
by the administrative agency in the performance of its quasi-legislative
function, the regular courts have jurisdiction to pass upon the same.
The determination of whether a specific rule or set of rules issued by an
administrative agency contravenes the law or the constitution is within
the jurisdiction of the regular courts. Indeed, the Constitution vests the
power of judicial review or the power to declare a law, treaty, international or
executive agreement, presidential decree, order, instruction, ordinance, or
regulation in the courts, including the regional trial courts. This is within the
scope of judicial power, which includes the authority of the courts to
determine in an appropriate action the validity of the acts of the political
departments. Judicialx power includes the duty of the courts of justice to

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settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.
Not to be confused with the quasi-legislative or rule-making power of an
administrative agency is its quasi-judicial or administrative adjudicatory
power. This is 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 the law itself in enforcing and administering the same law. The
administrative body exercises its quasi-judicial power when it performs
in a judicial manner an act which is essentially of an executive or
administrative nature, where the power to act in such manner is
incidental to or reasonably necessary for the performance of the
executive or administrative duty entrusted to it. In carrying out their
quasi-judicial functions, the administrative officers or bodies are
required to investigate facts or ascertain the existence of facts, hold
hearings, weigh evidence, and draw conclusions from them as basis for
their official action and exercise of discretion in a judicial nature.

B. Delegation of Legislative Power

1. Compania General de Tabacos de Filipinas vs. Board of
Public Utility, March 06,1916
corporation organized under the laws of Spain and engaged in business in
the Philippine Islands as a common carrier of passengers and merchandise
by water: On June 7, 1915, the Board of Public Utility Commissioners issued
and caused to be served an order to show cause why they should not be
required to present detailed annual reports respecting its finances and
operations respecting the vessels owned and operated by it, in the form and
containing the matters indicated by the model attached to the petition.
They are ordered to present annually on or before March first of each year a
detailed report of finances and operations of such vessels as are operated by
it as a common carrier within the Philippine Islands, in the form and

containing the matters indicated in the model of annual report which

accompanied the order to show cause herein.
the board to require the report asked for on the ground that the provision of
Act No. 2307 relied on by said board as authority for such requirement was, if
construed as conferring such power, invalid as constituting an unlawful
attempt on the part of the Legislature to delegate legislative power to the
board. It is cumbersome and unnecessarily prolix and that the preparation of
the same would entail an immense amount of clerical work."

Whether or not it is constitutional to require COMPANIA GENERAL DE
TABACOS DE FILIPINAS to pass a detailed report to the Board of Public
Utility Commissioners of the Philippine Islands?
Whether the power to require the detailed report is strictly legislative, or
administrative, or merely relates to the execution of the law?
The order appealed from is set aside and the cause is returned to the Board
of Public Utility Commissioners with instructions to dismiss the proceeding.
The section of Act No. 2307 under which the Board of Public Utility
Commissioners relies for its authority, so far as pertinent to the case at hand,
reads as follows:
Sec. 16. The Board shall have power, after hearing, upon notice, by order in
writing, to require every public utility as herein defined: (e) To furnish
annually a detailed report of finances and operations, in such form and
containing such matters as the Board may from time to time by order

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The statute which authorizes a Board of Public Utility Commissioners to

require detailed reports from public utilities, leaving the nature of the report,
the contents thereof, the general lines which it shall follow, the principle upon
which it shall proceed, indeed, all other matters whatsoever, to the exclusive
discretion of the board, is not expressing its own will or the will of the State
with respect to the public utilities to which it refers.
Such a provision does not declare, or set out, or indicate what information
the State requires, what is valuable to it, what it needs in order to impose
correct and just taxation, supervision or control, or the facts which the State
must have in order to deal justly and equitably with such public utilities and to
require them to deal justly and equitably with the State. The Legislature
seems simply to have authorized the Board of Public Utility Commissioners
to require what information the board wants. It would seem that the
Legislature, by the provision in question, delegated to the Board of Public
Utility Commissioners all of its powers over a given subject-matter in a
manner almost absolute, and without laying down a rule or even making a
suggestion by which that power is to be directed, guided or applied.
The true distinction is between the delegation of power to make the law,
which necessarily involves a discretion as to what shall be, and conferring
authority or discretion as to its execution, to be exercised under and in
pursuance of the law. The first cannot be done; to the latter no valid objection
can be made.

out of details in the exercise of the power so conferred. This, we think, is not
a delegation of legislative authority.
In the case at bar the provision complained of does not law "down the
general rules of action under which the commission shall proceed." nor does
it itself prescribe in detail what those reports shall contain. Practically
everything is left to the judgment and discretion of the Board of Public Utility
Commissioners, which is unrestrained as to when it shall act, why it shall act,
how it shall act, to what extent it shall act, or what it shall act upon.
The Legislature, by the provision in question, has abdicated its powers and
functions in favor of the Board of Public Utility Commissioners with respect to
the matters therein referred to, and that such Act is in violation of the Act of
Congress of July 1, 1902. The Legislature, by the provision referred to, has
not asked for the information which the State wants but has authorized and
board to obtain the information which the board wants.
People vs. Vera, November 16, 1937
Cu Unjieng was convicted by the trial court in Manila. He filed for
reconsideration which was elevated to the SC and the SC remanded the
appeal to the lower court for a new trial. While awaiting new trial, he
appealed for probation alleging that the he is innocent of the crime he was

The Supreme Court held that there was no delegation of legislative power, it
The Congress may not delegate its purely legislative powers to a
commission, but, having laid down the general rules of action under which a
commission shall proceed, it may require of that commission the application
of such rules to particular situations and the investigation of facts, with a view
to making orders in a particular matter within the rules laid down by the
In section 20 (of the Commerce Act), Congress has authorized the
commission to require annual reports. The act itself prescribes in detail what
those reports shall contain. In other words, Congress has laid down general
rules for the guidance of the Commission, leaving to it merely the carrying

convicted of. Judge Tuason of the Manila CFI directed the appeal to the
Insular Probation Office. The IPO denied the application. However, Judge
Vera upon another request by petitioner allowed the petition to be set for
hearing. The City Prosecutor countered alleging that Vera has no power to
place Cu Unjieng under probation because it is in violation of Sec. 11 Act No.
4221 which provides that the act of Legislature granting provincial boards the
power to provide a system of probation to convicted person. Nowhere in the
law is stated that the law is applicable to a city like Manila because it is only
indicated therein that only provinces are covered. And even if Manila is
covered by the law it is unconstitutional because Sec 1 Art 3 of the
Constitution provides equal protection of laws. The said law provides

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absolute discretion to provincial boards and this also constitutes undue

delegation of power. Further, the said probation law may be an
encroachment of the power of the executive to provide pardon because
providing probation, in effect, is granting freedom, as in pardon.
ISSUE: Whether or not there is undue delegation of power.
HELD: The act of granting probation is not the same as pardon. In fact it is
limited and is in a way an imposition of penalty. There is undue delegation of
power because there is no set standard provided by Congress on how

deserving farmers through dispersal as theDirector of Animal Industry may

the carabaos.On January 13, 1984, Petitioners 6 carabaos were confiscated
by the police station commander of Barotac Nuevo, Iloilo for having been
transported from Masbate to Iloilo in violation of EO 626-A. He issued a writ
for replevin, challenging the constitutionality of said EO. The trial court
sustained the confiscation of the animals and declined to rule on the validity
of the law on the ground that it lacked authority to do so. Its decision was
affirmed by the IAC.Hence, this petition for review filed by Petitioner
ISSUE: WON it is an improper exercise of legislative power by the former

provincial boards must act in carrying out a system of probation. The

provincial boards are given absolute discretion which is violative of the
constitution and the doctrine of the non delegability of power. Further, it is a
violation of equity so protected by the constitution. The challenged section of
Act No. 4221 in section 11 which reads as follows: This Act shall apply
only in those provinces in which the respective provincial boards have
provided for the salary of a probation officer at rates not lower than
those now provided for provincial fiscals. Said probation officer shall
be appointed by the Secretary of Justice and shall be subject to the
direction of the Probation Office. This only means that only provinces that
can provide appropriation for a probation officer may have a system of
probation within their locality. This would mean to say that convicts in
provinces where no probation officer is instituted may not avail of their right
to probation.
Ynot vs. IAC, March 20, 1987
In 1980 President Marcos amended Executive Order No. 626-A which orders
that nocarabao and carabeef shall be transported from one province
to another; such
violation shall
subject to confiscation and forfeiture by the government, to be distributed to c
haritableinstitutions and other similar institutions as the Chairman of the Nati
onal Meat Inspection Commission may see fit for the carabeef and to

RULING: The challenged measure is denominated an executive order but it

is really presidential decree, promulgating a new rule instead of merely
implementing an existing law. It was issued by President Marcos not for the
purpose of taking care that the laws were faithfully executed but in the
exercise of his legislative authority under Amendment No. 6. It was provided
thereunder that whenever in his judgment there existed a grave emergency
or a threat or imminence thereof or whenever the legislature failed or was
unable to act adequately on any matter that in his judgment required
immediate action, he could, in order to meet the exigency, issue decrees,
orders or letters of instruction that were to have the force and effect of law.
As there is no showing of any exigency to justify the exercise of that
extraordinary power then, the petitioner has reason, indeed, to question the
validity of the executive order. Nevertheless, since the determination of the
grounds was supposed to have been made by the President "in his
judgment, " a phrase that will lead to protracted discussion not really
necessary at this time, we reserve resolution of this matter until a more
appropriate occasion. For the nonce, we confine ourselves to the more
fundamental question of due process.
Pelaez vs. Auditor General, December 24, 1965
FACTS: During the period from September 4 to October 29, 1964 the
President of the Philippines, purporting to act pursuant to Section 68 of the
Revised Administrative Code, issued Executive Orders Nos. 93 to 121, 124

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and 126 to 129; creating thirty-three (33) municipalities enumerated in the

margin. Soon after the date last mentioned, or on November 10, 1964
petitioner Emmanuel Pelaez, as Vice President of the Philippines and as
taxpayer, instituted the present special civil action, for a writ of prohibition
with preliminary injunction, against the Auditor General, to restrain him, as
well as his representatives and agents, from passing in audit any expenditure
of public funds in implementation of said executive orders and/or any
Petitioner alleges that said executive orders are null and void, upon the
ground that said Section 68 has been impliedly repealed by Republic Act No.
2370 effective January 1, 1960 and constitutes an undue delegation of
legislative power. The third paragraph of Section 3 of Republic Act No. 2370,
Barrios shall not be created or their boundaries altered nor their names
changed except under the provisions of this Act or by Act of Congress.
Respondent herein relies upon Municipality of Cardona vs. Municipality of
ISSUE: W/N the President, who under this new law cannot even create a
composed of several barrios, since barrios are units of municipalities
HELD: On Cardona vs Municipality of Binangonan, such claim is untenable,
for said case involved, not the creation of a new municipality, but a mere
transfer of territory from an already existing municipality (Cardona) to
another municipality (Binagonan), likewise, existing at the time of and prior
to said transfer. It is obvious, however, that, whereas the power to fix such
common boundary, in order to avoid or settle conflicts of jurisdiction between
adjoining municipalities, may partake of an administrative nature involving,
as it does, the adoption of means and ways to carry into effect the law
creating said municipalities the authority to create municipal corporations
is essentially legislative in nature. In the language of other courts, it is strictly
a legislative function or solely and exclusively the exercise of legislative
Although Congress may delegate to another branch of the Government the
power to fill in the details in the execution, enforcement or administration of a
law, it is essential, to forestall a violation of the principle of separation of
powers, that said law: (a) be complete in itself it must set forth therein

the policy to be executed, carried out or implemented by the delegate2

and (b) fix a standard the limits of which are sufficiently
determinate or determinable to which the delegate must conform in
the performance of his functions. Indeed, without a statutory declaration of
policy, the delegate would in effect, make or formulate such policy, which is
the essence of every law; and, without the aforementioned standard, there
would be no means to determine, with reasonable certainty, whether the
delegate has acted within or beyond the scope of his authority. Hence, he
could thereby arrogate upon himself the power, not only to make the law, but,
also and this is worse to unmake it, by adopting measures inconsistent
with the end sought to be attained by the Act of Congress, thus nullifying the
principle of separation of powers and the system of checks and balances,
and, consequently, undermining the very foundation of our Republican
Section 68 of the Revised Administrative Code does not meet these well
settled requirements for a valid delegation of the power to fix the details in
the enforcement of a law. It does not enunciate any policy to be carried out or
implemented by the President. Neither does it give a standard sufficiently
precise to avoid the evil effects above referred to.
The power of control under the provision Section 10 (1) of Article VII of the
Consti implies the right of the President to interfere in the exercise of such
discretion as may be vested by law in the officers of the executive
departments, bureaus, or offices of the national government, as well as to act
in lieu of such officers. This power is denied by the Constitution to the
Executive, insofar as local governments are concerned. With respect to the
latter, the fundamental law permits him to wield no more authority than that of
checking whether said local governments or the officers thereof perform their
duties as provided by statutory enactments. Hence, the President cannot
interfere with local governments, so long as the same or its officers act
Within the scope of their authority. He may not enact an ordinance which the
municipal council has failed or refused to pass, even if it had thereby violated
a duty imposed thereto by law, although he may see to it that the
corresponding provincial officials take appropriate disciplinary action therefor.
Neither may he vote, set aside or annul an ordinance passed by said council
within the scope of its jurisdiction, no matter how patently unwise it may be.
He may not even suspend an elective official of a regular municipality or take
any disciplinary action against him, except on appeal from a decision of the

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Upon the other hand if the President could create a municipality, he

could, in effect, remove any of its officials, by creating a new
municipality and including therein the barrio in which the official
concerned resides, for his office would thereby become vacant. Thus,
by merely brandishing the power to create a new municipality (if he had
it), without actually creating it, he could compel local officials to submit
to his dictation, thereby, in effect, exercising over them the power of
control denied to him by the Constitution.

Eastern Shipping Lines vs. POEA, October 18, 1988

A Chief Officer of a ship was killed in an accident in Japan. The widow filed a
complaint for charges against the Eastern Shipping Lines with POEA, based
on a Memorandum Circular No. 2, issued by the POEA which stipulated
death benefits and burial for the family of overseas workers. ESL questioned
the validity of the memorandum circular as violative of the principle of nondelegation of legislative power. It contends that no authority had been given
the POEA to promulgate the said regulation; and even with such
authorization, the regulation represents an exercise of legislative discretion
which, under the principle, is not subject to delegation. Nevertheless, POEA
Whether or not the Issuance of Memorandum Circular No. 2 is a violation of
No. SC held that there was a valid delegation of powers.
The authority to issue the said regulation is clearly provided in Section 4(a) of
Executive Order No. 797. ... "The governing Board of the Administration
(POEA), as hereunder provided shall promulgate the necessary rules and
regulations to govern the exercise of the adjudicatory functions of the
It is true that legislative discretion as to the substantive contents of the law

cannot be delegated. What can be delegated is the discretion to determine

how the law may be enforced, not what the law shall be. The ascertainment
of the latter subject is a prerogative of the legislature. This prerogative cannot
be abdicated or surrendered by the legislature to the delegate.
The reasons given above for the delegation of legislative powers in general
are particularly applicable to administrative bodies. With the proliferation of
specialized activities and their attendant peculiar problems, the national
legislature has found it more and more necessary to entrust to administrative
agencies the authority to issue rules to carry out the general provisions of the
statute. This is called the "power of subordinate legislation."
With this power, administrative bodies may implement the broad policies laid
down in a statute by "filling in' the details which the Congress may not have
the opportunity or competence to provide. This is effected by their
promulgation of what are known as supplementary regulations, such as the
implementing rules issued by the Department of Labor on the new Labor
Code. These regulations have the force and effect of law.
There are two accepted tests to determine whether or not there is a valid
1. Completeness test - the law must be complete in all its terms and
conditions when it leaves the legislature such that when it reaches the
delegate the only thing he will have to do is enforce it.
2. Sufficient standard test - there must be adequate guidelines or stations
in the law to map out the boundaries of the delegate's authority and prevent
Both tests are intended to prevent a total transference of legislative authority
to the delegate, who is not allowed to step into the shoes of the legislature
and exercise a power essentially legislative.
Edu vs. Ericta, October 24, 1970
Judge Ericta and Teddy C. Galo filed suit for certiorari and prohibition with
preliminary injunction assailing the validity of enactment of the Reflector as

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well as Admin Order No. 2 implementing it, as an invalid exercise of the

police power for being violative of the due process clause. Galo followed with
a manifestation that in the event that Judge would uphold said statute
constitutional, A.O. No. 2 of the Land Transportation Commissioner,
implementing such legislation be nullified as an undue exercise of legislative
Whether Reflector Law and Administrative Order is constitutional and valid.
Yes. Reflector Law is enacted under the police power in order to promote
public safety and order.
Justice Laurel identified police power with state authority to enact legislation
that may interfere with personal liberty or property in order to promote the
general welfare. Persons and property could thus "be subjected to all kinds
of restraints and burdens in order to secure the general comfort, health and
prosperity of the state." The police power is thus a dynamic agency, suitably
vague and far from precisely defined, rooted in the conception that men in
organizing the state and imposing upon its government limitations to
safeguard constitutional rights did not intend thereby to enable an individual
citizen or a group of citizens to obstruct unreasonably the enactment of such
salutary measures calculated to insure communal peace, safety, good order,
and welfare.
The same lack of success marks the effort of respondent Galo to impugn the
validity of Administrative Order No. 2 issued by petitioner in his official
capacity, duly approved by the Secretary of Public Works and
Communications, for being contrary to the principle of non-delegation of
legislative power. Such administrative order, which took effect on April 17,
1970, has a provision on reflectors in effect reproducing what was set forth in
the Act.
It is a fundamental principle flowing from the doctrine of separation of powers
that Congress may not delegate its legislative power to the two other
branches of the government, subject to the exception that local governments
may over local affairs participate in its exercise. What cannot be delegated is

the authority under the Constitution to make laws and to alter and repeal
them; the test is the completeness of the statute in all its term and provisions
when it leaves the hands of the legislature. To determine whether or not
there is an undue delegation of legislative power the inquiry must be directed
to the scope and definiteness of the measure enacted. The legislature does
not abdicate its functions when it describes what job must be done, who is to
do it, and what is the scope of his authority.
It bears repeating that the Reflector Law construed together with the Land
Transportation Code. Republic Act No. 4136, of which it is an amendment,
leaves no doubt as to the stress and emphasis on public safety which is the
prime consideration in statutes of this character. There is likewise a
categorical affirmation Of the power of petitioner as Land Transportation
Commissioner to promulgate rules and regulations to give life to and
translate into actuality such fundamental purpose. His power is clear. There
has been no abuse. His Administrative Order No. 2 can easily survive the
attack, far-from-formidable, launched against it by respondent Galo.

Beltran vs. Secretary of Health, November 25, 2005

Facts: In January of 1994, the New Tropical Medicine Foundation, with the
assistance of the U.S. Agency for International Development (USAID)
released its final report of a study on the Philippine blood banking system
entitled Project to Evaluate the Safety of the Philippine Blood Banking
System. It was revealed that of the blood units collected in 1992, 64.4 %
were supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by
government hospital-based blood banks, and 7.4% by private hospital-based
blood banks ; showing that the Philippines heavily relied on commercial
sources of blood. It was further found, among other things, that blood sold by
persons to blood commercial banks are three times more likely to have any
of the four (4) tested infections or blood transfusion transmissible diseases,
namely, malaria, syphilis, Hepatitis B and Acquired Immune Deficiency
Syndrome (AIDS) than those donated to PNRC.
Republic Act No. 7719 or the National Blood Services Act of 1994 was then
enacted into law on April 2, 1994. The Act seeks to provide an adequate
supply of safe blood by promoting voluntary blood donation and by regulating

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blood banks in the country. One of the provisions of the said act was the
phasing out of commercial blood banks within 2 years from its effectivity.
Petitioners, comprising the majority of the Board of Directors of the Philippine
Association of Blood Banks assail the constitutionality of RA 7719 on the
ground among others that it is an improper and unwarranted delegation of
legislative power. According to petitioners, the Act was incomplete when it
was passed by the Legislature, and the latter failed to fix a standard to which
the Secretary of Health must conform in the performance of his functions.
Petitioners also contend that the two-year extension period that may be
granted by the Secretary of Health for the phasing out of commercial blood
banks pursuant to Section 7 of the Act constrained the Secretary to legislate,
thus constituting undue delegation of legislative power.
Held: In testing whether a statute constitutes an undue delegation of
legislative power or not, it is usual to inquire whether the statute was
complete in all its terms and provisions when it left the hands of the
Legislature so that nothing was left to the judgment of the administrative
body or any other appointee or delegate of the Legislature. Except as to
matters of detail that may be left to be filled in by rules and regulations to be
adopted or promulgated by executive officers and administrative boards, an
act of the Legislature, as a general rule, is incomplete and hence invalid if it
does not lay down any rule or definite standard by which the administrative
board may be guided in the exercise of the discretionary powers delegated to
Republic Act No. 7719 or the National Blood Services Act of 1994 is
complete in itself. It is clear from the provisions of the Act that the Legislature
intended primarily to safeguard the health of the people and has mandated
several measures to attain this objective. One of these is the phase out of
commercial blood banks in the country. The law has sufficiently provided a
definite standard for the guidance of the Secretary of Health in carrying out
its provisions, that is, the promotion of public health by providing a safe and
adequate supply of blood through voluntary blood donation. By its provisions,

it has conferred the power and authority to the Secretary of Health as to its
execution, to be exercised under and in pursuance of the law.
The Secretary of Health has been given, under Republic Act No. 7719, broad
powers to execute the provisions of said Act. Specifically, Section 23 of
Administrative Order No. 9 provides that the phase-out period for commercial
blood banks shall be extended for another two years until May 28, 1998
based on the result of a careful study and review of the blood supply and
demand and public safety. This power to ascertain the existence of facts
and conditions upon which the Secretary may effect a period of extension for
said phase-out can be delegated by Congress. The true distinction between
the power to make laws and discretion as to its execution is illustrated by the
fact that the delegation of power to make the law, which necessarily involves
a discretion as to what it shall be, and conferring an authority or discretion as
to its execution, to be exercised under and in pursuance of the law. The first
cannot be done; to the latter no valid objection can be made.

Carbonilla vs. BAR, September 14, 2011

C. Kinds of Administrative Rules and Regulations
BPI Leasing Corporation vs. CA, November 18, 2003
Administrative issuances may be distinguished according to
their nature and substance: legislative and interpretative. A
legislative rule is in the matter of subordinate legislation,
designed to implement a primary legislation by providing the
details thereof. An interpretative rule, on the other hand, is
designed to provide guidelines to the law which the
administrative agency is in charge of enforcing.[15]
The Court finds the questioned revenue regulation to be
legislative in nature. Section 1 of Revenue Regulation 19-86
plainly states that it was promulgated pursuant to Section 277 of
the NIRC. Section 277 (now Section 244) is an express grant of
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authority to the Secretary of Finance to promulgate all needful

rules and regulations for the effective enforcement of the
provisions of the NIRC. In Paper Industries Corporation of the
Philippines v. Court of Appeals,[16] the Court recognized that
the application of Section 277 calls for none other than the
exercise of quasi-legislative or rule-making authority. Verily, it
cannot be disputed that Revenue Regulation 19-86 was issued
pursuant to the rule-making power of the Secretary of Finance,
thus making it legislative, and not interpretative as alleged by
BLC further posits that, assuming the revenue regulation is
legislative in nature, it is invalid for want of due process as no
prior notice, publication and public hearing attended the
issuance thereof. To support its view, BLC cited CIR v. Fortune
Tobacco, et al.,[17] wherein the Court nullified a revenue
memorandum circular which reclassified certain cigarettes and
subjected them to a higher tax rate, holding it invalid for lack of
notice, publication and public hearing.
The doctrine enunciated in Fortune Tobacco, and reiterated in
CIR v. Michel J. Lhuillier Pawnshop, Inc.,[18] is that when an
administrative rule goes beyond merely providing for the means
that can facilitate or render less cumbersome the
implementation of the law and substantially increases the
burden of those governed, it behooves the agency to accord at
least to those directly affected a chance to be heard and,
thereafter, to be duly informed, before the issuance is given the
force and effect of law. In Lhuillier and Fortune Tobacco, the
Court invalidated the revenue memoranda concerned because
the same increased the tax liabilities of the affected taxpayers
without affording them due process. In this case, Revenue

Regulation 19-86 would be beneficial to the taxpayers as they

are subjected to lesser taxes. Petitioner, in fact, is invoking
Revenue Regulation 19-86 as the very basis of its claim for
refund. If it were invalid, then petitioner all the more has no right
to a refund.
Commissioner of Internal Revenue vs. CA (Bellosillos Separate
Opinion), August 29, 1996
In fine, petitioner opines that RMC 37-93 is merely an
interpretative ruling of the BIR which can thus become effective
without any prior need for notice and hearing, nor publication,
and that its issuance is not discriminatory since it would apply
under similar circumstances to all locally manufactured
The Court must sustain both the appellate court and the tax
Petitioner stresses on the wide and ample authority of the BIR in
the issuance of rulings for the effective implementation of the
provisions of the National Internal Revenue Code. Let it be
made clear that such authority of the Commissioner is not here
doubted. Like any other government agency, however, the CIR
may not disregard legal requirements or applicable principles in
the exercise of its quasi-legislative powers.
Let us first distinguish between two kinds of administrative
issuances - a legislative rule and an interpretative rule.
In Misamis Oriental Association of Coco Traders, Inc., vs.
Department of Finance Secretary, [11] the Court expressed:
"x x x a legislative rule is in the nature of subordinate legislation,
designed to implement a primary legislation by providing the
details thereof. In the same way that laws must have the benefit
Page 9 of 25

of public hearing, it is generally required that before a legislative

rule is adopted there must be hearing. In this connection, the
Administrative Code of 1987 provides:
"Public Participation. - If not otherwise required by law, an
agency shall, as far as practicable, publish or circulate notices
of proposed rules and afford interested parties the opportunity to
submit their views prior to the adoption of any rule.
"(2) In the fixing of rates, no rule or final order shall be valid
unless the proposed rates shall have been published in a
newspaper of general circulation at least two (2) weeks before
the first hearing thereon.
"(3) In case of opposition, the rules on contested cases shall
be observed.
"In addition such rule must be published. On the other
hand, interpretative rules are designed to provide guidelines to
the law which the administrative agency is in charge of
enforcing." [12]
It should be understandable that when an administrative rule is
merely interpretative in nature, its applicability needs nothing
further than its bare issuance for it gives no real consequence
more than what the law itself has already prescribed. When,
upon the other hand, the administrative rule goes beyond
merely providing for the means that can facilitate or render least
cumbersome the implementation of the law but substantially
adds to or increases the burden of those governed, it behooves
the agency to accord at least to those directly affected a chance
to be heard, and thereafter to be duly informed, before that new
issuance is given the force and effect of law.

Administrative agencies possess quasi-legislative or rule
making powers and quasi-judicial or administrative adjudicatory
powers. Quasi-legislative or rule making power is the power to
make rules and regulations which results in delegated
legislation that is within the confines of the granting statute and
the doctrine of nondelegability and separability of powers.
Interpretative rule, one of the three (3) types of quasi-legislative
or rule making powers of an administrative agency (the other
two being supplementary or detailed legislation, and contingent
legislation), is promulgated by the administrative agency to
interpret, clarify or explain statutory regulations under which the
administrative body operates. The purpose or objective of an
interpretative rule is merely to construe the statute being
administered. It purports to do no more than interpret the
statute. Simply, the rule tries to say what the statute
means. Generally, it refers to no single person or party in
particular but concerns all those belonging to the same class
which may be covered by the said interpretative rule. It need
not be published and neither is a hearing required since it is
issued by the administrative body as an incident of its power to
enforce the law and is intended merely to clarify statutory
provisions for proper observance by the people. In Taada v.
Tuvera,[6] this Court expressly said that "[i]nterpretative
regulations x x x need not be published."

Page 10 of 25

D. Requisites for Validity

Executive Secretary vs. Southwing Heavy Industries, February
20, 2006
Police power is inherent in a government to enact laws, within
constitutional limits, to promote the order, safety, health, morals,
and general welfare of society. It is lodged primarily with the
legislature. By virtue of a valid delegation of legislative power, it
may also be exercised by the President and administrative
boards, as well as the lawmaking bodies on all municipal levels,
including the barangay.[16] Such delegation confers upon the
President quasi-legislative power which may be defined as the
authority delegated by the law-making body to the
administrative body to adopt rules and regulations intended to
carry out the provisions of the law and implement legislative
policy.[17] To be valid, an administrative issuance, such as an
executive order, must comply with the following requisites:
Its promulgation must be authorized by the legislature;
It must be promulgated in accordance with the
prescribed procedure;
It must be within the scope of the authority given by the
legislature; and
It must be reasonable.[18]

The Congress may, by law, authorize the President to
fix within specified limits, and subject to such limitations and
restrictions as it may impose, tariff rates, import and export
quotas, tonnage and wharfage dues, and other duties or
imposts within the framework of the national development
program of the Government.[19] (Emphasis supplied)

Dagan vs. Philippine Racing Commission, February 12, 2009

The validity of an administrative issuance, such as the assailed
guidelines, hinges on compliance with the following requisites:
1. Its promulgation must be authorized by the legislature;
2. It must be promulgated in accordance with the prescribed
3. It must be within the scope of the authority given by the
4. It must be reasonable.[28]

Contrary to the conclusion of the Court of Appeals, EO 156

actually satisfied the first requisite of a valid administrative
order. It has both constitutional and statutory bases.

All the prescribed requisites are met as regards the questioned

issuances. Philracoms authority is drawn from P.D. No.
420. The delegation made in the presidential decree is valid.
Philracom did not exceed its authority. And the issuances are
fair and reasonable.

Delegation of legislative powers to the President is permitted in

Section 28(2) of Article VI of the Constitution. It provides:

The rule is that what has been delegated cannot be delegated,

or as expressed in the Latin maxim: potestas delegate non
Page 11 of 25

delegare potest. This rule is based upon the ethical principle

that such delegated power constitutes not only a right but a duty
to be performed by the delegate by the instrumentality of his
own judgment acting immediately upon the matter of legislation
and not through the intervening mind of another.[29] This rule
however admits of recognized exceptions[30] such as the grant
of rule-making power to administrative agencies. They have
been granted by Congress with the authority to issue rules to
regulate the implementation of a law entrusted to
them. Delegated rule-making has become a practical necessity
in modern governance due to the increasing complexity and
variety of public functions.[31]
However, in every case of permissible delegation, there must be
a showing that the delegation itself is valid. It is valid only if the
law (a) is complete in itself, setting forth therein the policy to be
executed, carried out, or implemented by the delegate; and (b)
fixes a standardthe limits of which are sufficiently determinate
and determinableto which the delegate must conform in the
performance of his functions. A sufficient standard is one which
defines legislative policy, marks its limits, maps out its
boundaries and specifies the public agency to apply it. It
indicates the circumstances under which the legislative
command is to be effected.[32]
P.D. No. 420 hurdles the tests of completeness and standards

E. Fact-finding and Rate-Fixing

Lovina vs. Moreno, November 29, 1963

HON. FLORENCIO MORENO, as Secretary of Public Works
and Communications, and BENJAMINYONZON,
Pampanga complained that appellees had blocked the "Sapang
Bulati", a navigable river in the same municipality and asked
that the obstructions be ordered removed, under the provisions
of Republic Act No. 2056. After notice and hearing to the
of Public
Communications found the constructions to be a public
nuisance in navigable waters, and ordered the land owners,
spouses Lovina, to remove five (5) closures of Sapang Bulati.
After receipt of the decision, the appellees filed a petition in CFI
of Manila to restrain the Secretary from enforcing his decision.
The trial court, after due hearing, granted a permanent
injunction. It held that Republic Act No. 2056 is unconstitutional
and that Sapang Bulati is not a navigable river but a private
stream.The appellees contention is that Republic Act No. 2056
is unconstitutional because it invests the Secretary of
PublicWorks and Communications with sweeping, unrestrained,
final and unappealable authority to pass upon the issues of
whether a river or stream is public and navigable, whether a
dam encroaches upon such waters and is constitutive as a
public nuisance, and whether the law applies to the state of
facts, thereby Constituting an alleged unlawful delegation of
judicial power to the Secretary of Public Works and
Issue: Whether or not there is an unlawful delegation of judicial

Page 12 of 25

Held:The contentions of the appellees are not tenable. R.A.

2056 merely empowers the Secretary to remove unauthorized
obstructions or encroachments upon public streams,
constructions that no private person was anyway entitled to
make, because the bed of navigable streams is public property,
and ownership thereof is not acquirable by adverse possession.
It is true that the exercise of the Secretary's power under the
Act necessarily involves the determination of some questions of
fact, such as the existence of the stream and its previous
navigable character; but these functions, whether judicial or
quasi-judicial, are merely incidental to the exercise of the power
granted by law to clear navigable streams of unauthorized
obstructions or encroachments, and authorities are clear that
they are, validly conferrable upon executive officials provided
the party affected is given opportunity to be heard, as is
expressly required by Republic Act No. 2056, section 2.The
mere fact that an officer is required by law to inquire the
existence of certain facts and to apply the law thereto in order to
determine what his official conduct shall be and the fact that
these acts may affect private, rights do not constitute an
exercise of judicial powers. Accordingly, a statute may give to
non-judicial officers the power to declare the existence of facts
which call into operation its provisions, and similarly may grant
to commissioners and other subordinate officer, power to
ascertain and determine appropriate facts as a basis for
procedure in the enforcement of particular laws. It is noteworthy
that Republic Act 2605 authorizes removal of the unauthorized
dikes either as "public nuisances or as prohibited constructions"
on public navigable streams, and those of appellees clearly
are in the latter class. In fine, it is held that Republic Act No.
2056 does not constitute an unlawful delegation of judicial
power to the Secretary of Public Works; that the findings of fact

of the Secretary of Public Works under Republic Act No. 2056

should be respected in the absence of illegality, error of law,
fraud, or imposition, so long as the said, findings are supported
by substantial evidence submitted to him. The decision
appealed from is reversed, and the writs of injunction issued
therein are annulled and set aside.

Vigan Electric Light Company, Inc. vs. Public Service

Commission, January 30, 1964
This is
an original action
for certiorari to annul an order of respondent Public Service
Commission ordering the reduction of rates of Vigan Electric
Light Co. PSC averred that Vigan Electric making a net
operating profit in excess of the allowable return of 12% on its
invested capital, and that it is in the public interest and in
consonance with Section 3 of Republic Act No. 3043 that
reduction of its rates to the extent of its excess revenue be put
into effect immediately. Vigan Electric contended that the
reduction of rate is unconstitutional because it has been ordered
without notice and hearing, thus issued without due process of
that ratefixing is a legislative function;
that legislative or rule-making
powers may constitutionally be exercised without previous
notice of hearing; and that the decision in Ang Tibay vs. Court of
Industrial Relations(69 Phil., 635) in which we held that such
notice and hearing are essential to the validity of a decision of
the Public Service Commission is not inpoint because, unlike
the order complained of which respondent claims to be
legislative in nature the Ang Tibay case referred to a
proceeding involving the exercise of judicial functions.
Page 13 of 25

ISSUE: Whether or not the Congress validly delegated

legislative power to the PSC?
HELD: No. Congress has not delegated, and cannot delegate
legislative powers to the Public Service Commission.
Consistently with the principle of separation of powers, which
underlies our constitutional system, legislative powers may not
be delegated except to local governments, and only to
matters purely of local concern. However, Congress may delega
te to administrative agencies of the government the power to
supply the details in the execution or enforcement of a policy
laid down by it which is complete in itself. Such law is not
deemed complete unless it lays down a standard or pattern
sufficiently fixed or determinate, or, at least, determinable
without requiring another legislation, to guide the administrative
body concerned in the performance of its duty to implement or
enforce said Policy. Otherwise, there would be no reasonable
means to ascertain whether or not said body has acted within
the scope of its authority, and, as a consequence, the power of
legislation would eventually be exercised by a branch of the
Government other than that in which it is lodged by the
Constitution, in violation, not only of the allocation of powers
therein made, but, also, of the principle of separation of powers.
Although the rule-making power and even the power to fix
rates when such rules and/or rates are meant to apply to all
agiven kind throughout the Philippines
may partake of a legislative character, such is not the nature of
the order complained of. Indeed, the same applies exclusively to
petitioner herein. What is more, it is predicated upon the finding
of fact based upon a report submitted by the
General Auditing Office that petitioner is making a profit
of more than 12% of its invested capital, which is denied by

petitioner. Obviously, the latter is entitled to cross-examine the

maker of said report, and to introduce evidence to disprove the
contents thereof and/or explain or complement the same, as
well as to refute the conclusion drawn therefrom by the
other words, in making said finding of fact, respondent performe
d a function partaking of a quasi-judicial character the valid
exercise of which demands previous notice and hearing
PhilComSat Corporation vs. Alcuaz, December 18, 1989
FACTS: By virtue of RA 5514, Philippine Communications
Satellite Corporation was granted a franchise to establish,
construct, maintain and operate in the Philippines, at such
places as the grantee may select, station or stations and
associated equipment and facilities for international satellite
communications. Under this franchise, it was likewise granted
the authority to construct and operate such ground facilities as
needed to deliver telecommunications services from the
communications satellite system and ground terminal or
terminals. Under Sec 5 of the same law, PhilComSat was
exempt from the jurisdiction, control and regulation of the Public
Service Commission later known as the National
Telecommunications Commission. However, EO 196 was later
proclaimed and the same has placed PhilComSat under the
jurisdiction of NTC. Consequently, PhilComSat has to acquire
permit to operate from NTC in order to continue operating its
existing satellites. NTC gave the necessary permit but it
however directed PhilComSat to reduce its current rates by
15%. NTC based its power to fix the rates on EO 546.
PhilComSat assailed the said directive and holds that the
enabling act (EO 546) of respondent NTC empowering it to fix
Page 14 of 25

rates for public service communications does not provide the

necessary standards constitutionally required hence there is an
undue delegation of legislative power, particularly the
adjudicatory powers of NTC. PhilComSat asserts that nowhere
in the provisions of EO 546, providing for the creation of
respondent NTC and granting its rate-fixing powers, nor of EO
196, placing petitioner under the jurisdiction of respondent NTC,
can it be inferred that respondent NTC is guided by any
standard in the exercise of its rate-fixing and adjudicatory
powers. PhilComSat subsequently clarified its said submission
to mean that the order mandating a reduction of certain rates is
undue delegation not of legislative but of quasi-judicial power to
respondent NTC, the exercise of which allegedly requires an
express conferment by the legislative body.
ISSUE: Whether or not there is an undue delegation of power.
HELD: Fundamental is the rule that delegation of legislative
power may be sustained only upon the ground that some
standard for its exercise is provided and that the legislature in
making the delegation has prescribed the manner of the
exercise of the delegated power. Therefore, when the
administrative agency concerned, NTC in this case, establishes
a rate, its act must both be non-confiscatory and must have
been established in the manner prescribed by the legislature;
otherwise, in the absence of a fixed standard, the delegation of
power becomes unconstitutional. In case of a delegation of ratefixing power, the only standard which the legislature is required
to prescribe for the guidance of the administrative authority is
that the rate be reasonable and just. However, it has been held
that even in the absence of an express requirement as to

reasonableness, this standard may be implied. In the case at

bar, the fixed rate is found to be of merit and reasonable.

Philippine Interisland Shipping Association vs. CA, January 22,

Philippines Interisland Shipping Association vs CAIt came to
pass that a response from a clamor of harbour pilots for an
increase in pilotagerates was given by the then President
Marcos through the issuance of an E.O No. 1088


PUBLICPORTS. The executive order increased substantially
the rates of the existing pilotage fees previously fixed by the
PPA. During that time the President was exercising legislative
power and was authorized. However, PPA was reluctant to
enforce the same arguing that it was issued hastily and it was
just an Administrative Order whereby PPA has the power to
revised EO 1088 which it did so by issuing A.O. No. 43-86,
which fixed lower rates of pilotage fees, and even entirely left
the fees to be paid for pilotage to the agreement of the parties to
a contract..
Issue: Is E.O. No. 1088 an Administrative Order and by virtue of
which PPA has the power to modify the same.
Held: EO 1088 is a law.
The fixing of rates is essentially a legislative power.is no basis
for petitioners' argument that rate fixing is merely an exercise of
Page 15 of 25

administrative power, that if President Marcos had power to

revise the rates previously fixed by the PPA through the
issuance of E.O. No. 1088, the PPA could in turn revise those
fixed by the President, as the PPA actually did in A.O. No. 4386,which fixed lower rates of pilotage fees, and even entirely left
the fees to be paid for pilotage to the agreement of the parties to
a contract. The orders previously issued by the PPA were in the
nature of subordinate legislation, promulgated by it in the
exercise of delegated power. As such these could only be
amended or revised by law, as the President did by E.O. No.
1088. It is not an answer to say that E.O. No. 1088 should not
be considered a statute because that would imply the
withdrawal of power from the PPA. What determines whether an
act is a law or an administrative issuance is not its form but its
nature. Here, as we have already said, the power to fix the rates
of charges for services, including pilotage service, has always
been regarded as legislative in character.
EO 1088 is not meant simply to fix new pilotage rates. Its
legislative purpose is the rationalization of pilotage service
charges through the imposition if uniform and adjusted rates for
foreign & coastwise vessels in all Philippine ports.
The PPA is duty-bound to comply with EO 1088. PPA may
increase the rates but it may not decrease them below those
mandated by EO 1088.
Since the PPA circulars are inconsistent with EO 1088, they are
void and ineffective. Administrative/Executive acts, orders and
regulations are only valid when they are not contrary to the laws
or the Constitution.
Philippine Consumers Foundation, Inc. vs. Secretary of DECS,
August 31, 1987

If the rates prescribed by an administrative agency is in the

exercise of its quasi-legislative powers, prior notice and hearing
is not essential to the validity of its issuance.
FACTS: The Task Force on Private Higher Education created
by DECS submitted a report recommending an increase in
school fees. DECS took note of the report and issued an Order
authorizing a 15% to 20% increase as recommended. Petitioner
sought for reconsideration on the ground that the increases
were too high. Thereafter, the Order was modified reducing the
increases to a lower ceiling of 10% to 15%. Petitioner still
protested the increases and filed a petition for prohibition,
seeking to declare the questioned Department Order
unconstitutional for it was issued without any legal basis and for
violation of the due process clause for lack of due notice and
hearing before issuance.
ISSUE: Whether the Department Order is valid?
HELD: YES. The power of the DECS, as granted by law, to
regulate school fees include the power to prescribe school fees.
No other government agency has been vested with the authority
to fix school fees and as such, the power should be considered
lodged with the DECS if it is to properly and effectively
discharge its functions and duties under the law. As to the issue
of due process, there is no such violation. The function of
prescribing rates by an administrative agency may be either a
legislative or an adjudicative function. If it were a legislative
function, the grant of prior notice and hearing to the affected
parties is not a requirement of due process. As regards rates
prescribed by an administrative agency in the exercise of its
quasi-judicial function, prior notice and hearing are essential to
the validity of such rates. When the rules and/or rates laid down
Page 16 of 25

by an administrative agency are meant to apply to all

enterprises of a given kind throughout the country, they may
partake of a legislative character. Where the rules and the rates
imposed apply exclusively to a particular party, based upon a
finding of fact, then its function is quasi-judicial in character. In
this case, the Department Order prescribes the maximum
school fees that may be charged by all private schools in the
country for the school year 1987 to 1988. Hence, it applies to all
enterprises of a given kind throughout the country and the
issuance of the department order is in the exercise of DECs
quasi-legislative power. This being so, prior notice and hearing
is not essential to the validity of its issuance.
F. Construction and Administrative Interpretation
Victorias Milling Company, Inc. vs. Social Security Commission,
March 07, 1962
When an administrative agency promulgates rules and
regulations, it "makes" a new law with the force and effect of a
valid law, while when it renders an opinion or gives a statement
of policy, it merely interprets a pre-existing law.
FACTS: The SSS issued Circular No. 22 which provides that, in
computing the premiums due, all employers will include in the
employees remuneration all bonuses and overtime pay.
Victorias Milling Compnay protested the circular as being
contradictory to its previous Circular which expressly excluded
overtime pay and bonus in the computation of premium
contributions. Victorias questioned its validity for lack of
authority on the part of the SSS to promulgate it without the
approval of the President and for lack of publication in the OG.
SSS argues that Circular No. 22 is not a rule or regulation, but a
mere administrative interpretation in light of the amendments

introduced by an amendatory law. Hence, there is no need for

approval of the President and publication in the OG to be
ISSUE: Whether Circular No. 22 is a rule or regulation?
HELD: NO, Circular No. 22 is an administrative interpretation.
There is a distinction between an administrative rule or
regulation and an administrative interpretation of a law whose
enforcement is entrusted to an administrative body. When an
administrative agency promulgates rules and regulations, it
"makes" a new law with the force and effect of a valid law, while
when it renders an opinion or gives a statement of policy, it
merely interprets a pre-existing law. Rules and regulations when
promulgated in pursuance of the procedure or authority
conferred upon the administrative agency by law, partake of the
nature of a statute, and compliance therewith may be enforced
by a penal sanction provided in the law. A rule is binding on the
courts so long as the procedure fixed for its promulgation is
followed and its scope is within the statutory authority granted
by the legislature, On the other hand, administrative
interpretation of the law is at best merely advisory, for it is the
courts that finally determine what the law means. In this case,
Circular No. 22 was issued by the SSS, in view of the
amendment of the provisions of the Social Security Law defining
the term compensation. While prior to the amendment,
bonuses and overtime pay were expressly exclude, such
exemption was deleted by the amendatory law. Hence, it thus
became necessary for the SSS to interpret the effect of such
deletion through Circular No. 22.

Page 17 of 25

Tayug Rural Bank vs. Central Bank, November 28, 1986

FACTS: Tayug Rural is a bank in Pangasinan which took out 13
loans from Central Bank in 1962 and 1963, all covered by
promissory notes, amounting to 813k. In late 1964, Central
Bank released a circular; Memorandum Circular No. DLC-8 thru
the Director of Loans and Credit. This circular all informed all
rural banks that an additional 10% per annum penalty interest
would be assessed on all past due loans beginning 1965. This
was enforced beginning July 1965. In 1969, the outstanding
balance of Tayug was at 444k. Tayug Rural filed a case in CFI
Manila to recover the 10% penalty it paid up to 1968, amounting
to about 16k, and to restrain Central bank from further imposing
the penalty. Central Bank filed a counterclaim for the
outstanding balance including the10% penalty, stating that it
was legally imposed under the Rules and Regulations
Governing RuralBanks promulgated by the Monetary Board on
1958, under RA 720.Tayugs defense was that the counterclaim
should be dismissed since the unpaid obligation of Tayug was
due to Central Banks flexible and double standard policy of its
rediscounting privileges to Tayug Rural and its subsequent
arbitrary and illegal imposition of the 10% penalty. Tayug Rural
contends that no such 10% penalty starting from 1965 was
included in the promissory notes covering the loans. The lower
court, in its Order dated March 3, 1970, stated that "only a legal
question has been raised in the pleadings" and upholding the
stand of plaintiff Rural Bank, decided the case in its favor.
(Rollo, p. 34).
Appellant appealed the decision of the trial court to the Court of
Appeals, for determination of questions of facts and of law.
However, in its decision promulgated April 13, 1977, the Court
of Appeals, finding no controverted facts and taking note of the

statement of the lower court in its pre-trial Order dated March 3,

1970 that only a legal question has been raised in the
pleadings, (Record on Appeal, p. 61), ruled that the resolution of
the appeal will solely depend on the legal issue of whether or
not the Monetary Board had authority to authorize Appellant
Central Bank to impose a penalty rate of 10% per annum on
past due loans of rural banks which had failed to pay their
accounts on time and ordered the certification of this case to
this Court for proper determination
ISSUE: WON The Central Bank can validly impose the 10%
penalty via Memorandum Circular No. DLC-8
Held: NO.Nowhere in any of the above-quoted pertinent
provisions of R.A. 720 nor in any other provision of R.A. 720 for
that matter, is the monetary Board authorized to mete out on
rural banks an additional penalty rate on their past due accounts
with Appellant. As correctly stated by the trial court, while the
Monetary Board possesses broad supervisory powers,
nonetheless, the retroactive imposition of administrative
penalties cannot be taken as a measure supervisory in
Administrative rules and regulations have the force and effect of
law. There are, however, limitations to the rule-making power of
administrative agencies. A rule shaped out by jurisprudence is
that when Congress authorizes promulgation of administrative
rules and regulations to implement given legislation, all that is
required is that the regulation be not in contradiction with it, but
conform to the standards that the law prescribes. The rule
delineating the extent of the binding force to be given to
administrative rules and regulations was explained by the Court
in Teoxon v. Member of the Board of Administrators (33 SCRA
Page 18 of 25

588), thus: "The recognition of the power of administrative

officials to promulgate rules in the implementation of the statute,
as necessarily limited to what is provided for in the legislative
enactment. The Court held in the same case that "A rule is
binding on the courts so long as the procedure fixed for its
promulgation is followed and its scope is within the statute
granted by the legislature, even if the courts are not in
agreement with the policy stated therein or its innate wisdom
...." On the other hand, "administrative interpretation of the
law is at best merely advisory, for it is the courts that finally
determine what the law means." Indeed, it cannot be
otherwise as the Constitution limits the authority of the
President, in whom all executive power resides, to take care
that the laws be faithfully executed. No lesser administrative,
executive office, or agency then can, contrary to the express
language of the Constitution, assert for itself a more extensive
prerogative. Necessarily, it is bound to observe the
constitutional mandate. There must be strict compliance with the
1984, 127 SCRA 342).
In case of discrepancy between the basic law and a rule or
regulation issued to implement said law, the basic law prevails
because said rule or regulation cannot go beyond the terms and
provisions of the basic law (People v. Lim, 108 Phil. 1091).
Rules that subvert the statute cannot be sanctioned (University
of St. Tomas v. Board of Tax Appeals, 93 Phil. 376; Del Mar v.
Phil. Veterans Administration, 51 SCRA 340). Except for
constitutional officials who can trace their competence to act to
the fundamental law itself, a public official must locate in the
statute relied upon a grant of power before he can exercise it.
Department zeal may not be permitted to outrun the authority
conferred by statute (Radio Communications of the Philippines,
Inc. v. Santiago, L-29236, August 21, 1974, 58 SCRA 493).

When promulgated in pursuance of the procedure or authority

conferred upon the administrative agency by law, the rules and
regulations partake of the nature of a statute, and compliance
therewith may be enforced by a penal sanction provided in the
law. Conversely, the rule is likewise clear. Hence an
administrative agency cannot impose a penalty not so provided
in the law authorizing the promulgation of the rules and
regulations, much less one that is applied retroactively.
Pharmaceutical and Health Care Association of the Philippines
vs. Duque, October 09, 2007
Petition for certiorari seeking to nullify the Revised Implementing
Rules and Regulations (RIRR) of E.O. 51 (Milk Code). Petitioner
claims that the RIRR is not valid as it contains provisions that
are not constitutional and go beyond what it is supposed to
implement. Milk Code was issued by President Cory Aquino
under the Freedom Constitution on Oct.1986. One of the
preambular clauses of the Milk Code states that the law seeks
to give effect to Art 11 of the Intl Code of Marketing and
Breastmilk Substitutes(ICBMS), a code adopted by the World
Health Assembly(WHA). From 1982-2006, The WHA also
adopted severe resolutions to the effect that breastfeeding
should be supported, hence, it should be ensured that nutrition
and health claims are not permitted for breastmilk substitutes. In
2006, the DOH issued the assailed RIRR.
Sub-Issue: W/N the pertinent intl agreements entered into by
the Phil are part of the law of the land and may be implemented
Page 19 of 25

by DOH through the RIRR. If yes, W/N the RIRR is in accord

with intl agreements
MAIN: W/N the DOH acted w/o or in excess of their jurisdiction,
or with grave abuse of discretion amounting to lack of excess of
jurisdiction and in violation of the Constitution by promulgating
the RIRR.
Yes for ICBMS. Under 1987 Consti, intl law can become
domestic law by transformation (thru constitutional mechanism
such as local legislation) or incorporation (mere constitutional
declaration i.e treaties) The ICBMS and WHA resolutions were
not treaties as they have not been concurred by 2/3 of all
members of the Senate as required under Sec, 21, Art 8.
However, the ICBMS had been transformed into domestic law
through a local legislation such as the Milk Code. The Milk Code
is almost a verbatim reproduction of ICBMS.
No for WHA Resolutions. The Court ruled that DOH failed to
establish that the provisions pertinent WHA resolutions are
customary intl law that may be deemed part of the law of the
land. For an intl rule to be considered as customary law, it must
be established that such rule is being followed by states
because they consider it as obligatory to comply with such rules
(opinion juris). The WHO resolutions, although signed by most
of the member states, were enforced or practiced by at least a
majority of member states. Unlike the ICBMS whereby
legislature enacted most of the provisions into the law via the
Milk Code, the WHA Resolutions (specifically providing for
exclusive breastfeeding from 0-6 months, breastfeeding up to

24 Months and absolutely prohibiting ads for breastmilk

substitutes) have not been adopted as domestic law nor are
they followed in our country as well. The Filipinos have the
option of how to take care of their babies as they see fit. WHA
Resolutions may be classified as SOFT LAW non-binding
norms, principles and practices that influence state behavior.
Soft law is not part of intl law.
Main issue:
Yes. Some parts of the RIRR were not in consonance with the
Milk Code such as Sec. 4(f) ->advertising, promotions of formula
are prohibited,
Sec 11 -> prohibitions for advertising breastmilk substitutes
intended for infants and young children uo to 24 months
And Sec 46 -> sanctions for advertising .
These provisions are declared null and void. The DOH and
respondents are prohibited from implementing said provisions
Hilado vs. Collector of Customs, August 31, 1956


Emilio Hilado filed his income tax return for 1951 with the
treasurer of Bacolod City, claiming a deductible item of
P12,837.65 from his gross income pursuant to General Circular
V-123 issued by the Collector of Internal Revenue. The
Secretary of Finance, through the Collector, issued General
Circular V-139 which revoked and declared void Circular V-123;
and laid down the rule[s] that losses of property which occurred
in World War II from fires, storms, shipwreck or other casualty,
Page 20 of 25

or from robbery, theft, or embezzlement are deductible in the

year of actual loss or destruction of said property. The
deductions were disallowed.
Whether Internal Revenue Laws were enforced during the war
and whether Hilado can claim compensation for destruction of
his property during the war.
Philippines Internal Revenue Laws are not political in nature and
as such were continued in force during the period of enemy
occupation and in effect were actually enforced by the
occupation government. Such tax laws are deemed to be laws
of the occupied territory and not of the occupying enemy. As of
the end of 1945, there was no law which Hilado could claim for
the destruction of his properties during the battle for the
liberation of the Philippines. Under the Philippine Rehabilitation
Act of 1948, the payment of claims by the War Damage
Commission depended upon its discretions non-payment of
which does not give rise to any enforceable right. Assuming
that the loss (deductible item) represents a portion of the 75% of
his war damage claim, the amount would be at most a proper
deduction of his 1950 gross income (not on his 1951 gross
income) as the last installment and notice of discontinuation of
payment by the War Damage

Facts: During the period pertinent to this case, petitioner

corporation was engaged in the business of telecasting local as
well as foreign films acquired from foreign corporations not
engaged in trade or business within the Philippines. for which
petitioner paid rentals after withholding income tax of 30%of
one-half of the film rentals. In implementing Section 4(b) of the
Tax Code, the Commissioner issued General Circular V-334.
Pursuant thereto, ABS-CBN Broadcasting Corp. dutifully
withheld and turned over to the BIR 30% of of the film rentals
paid by it to foreign corporations not engaged in trade or
business in the Philippines. The last year that the company
withheld taxes pursuant to the Circular was in 1968. On 27 June
1908, RA 5431 amended Section 24 (b) of the Tax Code
increasing the tax rate from 30% to 35% and revising the tax
basis from such amount referring to rents, etc. to gross
income. In 1971, the Commissioner issued a letter of
assessment and demand for deficiency withholding income tax
for years 1965 to 1968. The company requested for
reconsideration; where the Commissioner did not act upon.
Ruling: The principle of legislative approval of administrative
interpretation by re-enactment clearly obtains in this case. It
provides that "the re-enactment of a statute substantially
unchanged is persuasive indication of the adoption by Congress
of a prior executive construction. 7 Note should be taken of the
fact that this case involves not a mere opinion of the
Commissioner or ruling rendered on a mere query, but a
Circular formally issued to "all internal revenue officials" by the
then Commissioner of Internal Revenue.

ABS-CBN Broadcasting Corporation vs. CTA, October 12, 1981

Page 21 of 25

G. Penal Regulations
US vs. Panlilio, December 08, 1914
The orders (rules and regulations) of an administrative officers
or body issued pursuant to a statute have the force of law but
are not penal in nature and a violation of such orders is not a
offense punishable by law unless the statute expressly
penalizes such violation.
FACTS: The accused was convicted of violation of Act 1760
relating to the quarantining of animals suffering from dangerous
communicable or contagious diseases and sentencing him to
pay a fine of P40 with subsidiary imprisonment in case of
insolvency and to pay the costs of trial. It is alleged that the
accused illegally and without being authorized to do so, and
while quarantine against the said carabaos exposed to
rinderpest was still in effect, permitted and ordered said
carabaous to be taken from the corral in which they were
quarantined and drove them from one place to another. The
accused contends that the facts alleged in the information and
proved on the trial do not constitute a violation of Act No. 1760
ISSUE: Whether accused can be penalized for violation of the
order of the Bureau of Agriculture?
HELD: NO. Nowhere in the law is the violation of the orders of
the Bureau of Agriculture prohibited or made unlawful, nor is
there provided any punishment for a violation of such orders.
Section 8 of Act No. 1760 provides that any person violating any
of the provisions of the Act shall, upon conviction, be punished.
However, the only sections of the Act which prohibit acts and
pronounce them as unlawful are Sections 3, 4 and 5. This case
does not fall within any of them. A violation of the orders of the

Bureau of Agriculture, as authorized by paragraph, is not a

violation of the provision of the Act. The orders of the Bureau of
Agriculture, while they may possibly be said to have the force of
law, are statutes and particularly not penal statutes, and a
violation of such orders is not a penal offense unless the statute
itself somewhere makes a violation thereof unlawful and
penalizes it. Nowhere in Act No. 1760 is a violation of the orders
of the Bureau of Agriculture made a penal offense, nor is such
violation punished in any way therein. However, the accused did
violate Art. 581, 2 of the Penal Code which punishes any
person who violates regulations or ordinances with reference to
epidemic disease among animals.
People vs. Santos, August 15, 1936
The herein accused and appellee Augusto A. Santos is charged
with having ordered his fishermen to manage and operate the
motor launches Malabon II and Malabon Ill registered in his
name and to fish, loiter and anchor within three kilometers of the
shore line of the Island of Corregidor over which jurisdiction is
exercised by naval and military authorities of the United States,
without permission from the Secretary of Agriculture and
The provisions of Administrative, Order No. 2 were issued by
the then Secretary of Agriculture and Natural Resources, now
Secretary of Agriculture and Commerce, by virtue of the
authority vested in him by section 4 of Act No. 4003.
These acts constitute a violation of the conditional clause of
section 28 above quoted, which reads as follows:

Page 22 of 25

Provided, That boats not subject to license under Act No. 4003
and this order may fish within the areas mentioned above
(within 3 kilometers of the shore line of islands and reservations
over which jurisdiction is exercised by naval and military
authorities of the United States, particularly Corregidor) only
upon receiving written permission therefor, which permission
may be granted by the Secretary of Agriculture and Commerce
upon recommendation of the military and naval authorities of

ISSUE: WON conditional clause is valid?

Act No. 4003 contains no similar provision prohibiting boats not
subject to license from fishing within three kilometers of the
shore line of islands and reservations over which jurisdiction is
exercised by naval and military authorities of the United States,
without permission from the Secretary of Agriculture and
Commerce upon recommendation of the military and naval
authorities concerned. Inasmuch as the only authority granted to
the Secretary of Agriculture and Commerce, by section 4 of Act
No. 4003, is to issue from time to time such instructions, orders,
rules, and regulations consistent with said Act, as may be
necessary and proper to carry into effect the provisions thereof
and for the conduct of proceedings arising under such
provisions; and inasmuch as said Act No. 4003, as stated,
contains no provisions similar to those contained in the above
quoted conditional clause of section 28 of Administrative Order
No. 2, the conditional clause in question supplies a defect of the
law, extending it. This is equivalent to legislating on the matter,
a power which has not been and cannot be delegated to him, it

being exclusively reserved to the then Philippine Legislature by

the Jones Law, and now to the National Assembly by the
Constitution of the Philippines. Such act constitutes not only an
excess of the regulatory power conferred upon the Secretary of
Agriculture and Commerce, but also an exercise of a legislative
power which he does not have, and therefore said conditional
clause is null and void and without effect
Pesigan vs. Angeles, April 30, 1984
Pesigan vs. Angeles, 129 SCRA 174 (1984)
FACTS: Anselmo and Marcelo Pesigan transported in the
evening of April 2, 1982 twenty-six carabaos and a calf from
Camarines Sur with Batangas as their destination. They were
provided with three certificates:
1) a health certificate from the provincial veterinarian,
2) permit to transfer/transport from the
provincial commander; and
3) three certificates of inspections.
In spite of the papers, the carabaos were confiscated by the
provincial veterinarian and the towns police station commander
while passing through Camarines Norte. The confiscation was
based on EO No. 626-A which prohibits the transportation of
carabaos and carabeef from one province to another.
ISSUE: Whether or not EO No. 626-A, providing for the
confiscation and forfeiture by the government of carabaos
transported from one province to another, dated October 25,
1980 is enforceable before publication in the Official Gazette on
Page 23 of 25

RULING: No. The said order is not enforceable against the

Pesigans on April 2. 1982 because it is a penal regulation
published more than two months later in the OG. It became
effective only fifteen days thereafter as provided in Article 2 of
the Civil Code and Sec-11 of the Revised Administrative Code.
The word laws in article 2 includes circulars and regulations
which prescribe penalties. Publication is necessary to apprise
the public of the contents of the regulations and make the said
penalties binding on the persons affected thereby.
Commonwealth Act No. 638 requires that all Presidential
executive orders having general applicability should be
published in the Official Gazette. It provides that every order or
document which shall prescribe a penalty shall be deemed to
have general applicability and legal effect. This applies to a
violation of EO No. 626-A because its confiscation and forfeiture
provision or sanction makes it a penal statute. It results that they
have cause of action for the recovery of the carabaos. The
summary confiscation was not in order. The recipients of the
carabaos should return them to the Pesigans. However, they
cannot transport the carabaos to Batangas because they are
now bound by the said executive order. Neither can they
recover damages. Doctor Miranda and Zenerosa acted in good
faith in ordering the forfeiture and dispersal of the carabaos.
Judgment: Order of dismissal and confiscation and dispersal of
the carabaos, reversed and set aside. Respondents to restore
carabaos, with the requisite documents, to petitioners for their
own disposal in Basud or Sipocot, Camarines Sur. No costs.
Important point: Publication is necessary to apprise the public of

the contents of the regulations and make the said penalties

binding on the persons affected hereby. Justice and fairness
dictate that the public must be informed of that provision by
means of the publication on the Gazette.
H. Effectivity of Rules
146 SCRA 446 (December 29, 1986)
This is a motion for reconsideration of the decision promulgated
on April 24, 1985. Respondent argued that while publication
was necessary as a rule, it was not so when it was otherwise
as when the decrees themselves declared that they were to
become effective immediately upon their approval.
1. Whether or not a distinction be made between laws of
general applicability and laws which are not as to their
2. Whether or not a publication shall be made in
publications of general circulation.
The clause unless it is otherwise provided refers to the date of
effectivity and not to the requirement of publication itself, which
cannot in any event be omitted. This clause does not mean that
the legislature may make the law effective immediately upon
approval, or in any other date, without its previous publication.
Laws should refer to all laws and not only to those of general
application, for strictly speaking, all laws relate to the people in
general albeit there are some that do not apply to them
directly. A law without any bearing on the public would be
invalid as an intrusion of privacy or as class legislation or as
an ultra vires act of the legislature. To be valid, the law must
Page 24 of 25

invariably affect the public interest eve if it might be directly

applicable only to one individual, or some of the people only,
and not to the public as a whole.
All statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which shall
begin 15 days after publication unless a different effectivity date
is fixed by the legislature.
Publication must be in full or it is no publication at all, since its
purpose is to inform the public of the content of the law.
Article 2 of the Civil Code provides that publication of laws must
be made in the Official Gazette, and not elsewhere, as a
requirement for their effectivity. The Supreme Court is not
called upon to rule upon the wisdom of a law or to repeal or
modify it if it finds it impractical.
The publication must be made forthwith, or at least as soon as
J. Cruz:
Laws must come out in the open in the clear light of the sun
instead of skulking in the shadows with their dark, deep
secrets. Mysterious pronouncements and rumored rules cannot
be recognized as binding unless their existence and contents
are confirmed by a valid publication intended to make full
disclosure and give proper notice to the people. The furtive law
is like a scabbarded saber that cannot faint, parry or cut unless
the naked blade is drawn.

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