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(Refam) – for the treatment of adults and children suffering from pulmonary and
1. G.R. No. 190837 March 5, 2014 extra-pulmonary tuberculosis.13 On November 15, 1996, respondents applied for
and were issued a CPR for such drug, valid for five (5) years, or until November 15,
REPUBLIC OF THE PHILIPPINES, represented by the BUREAU OF FOOD 2001.14 At the time of the CPR’s issuance, Refam did not undergo BA/BE testing
AND DRUGS (now FOOD AND DRUG ADMINISTRATION), Petitioner, since there was still no facility capable of conducting BA/BE testing. Sometime in
vs. 2001, respondents applied for and were granted numerous yearly renewals of their
DRUGMAKER'S LABORATORIES, INC. and TERRAMEDIC, INC., Respondents. CPR for Refam, which lasted until November 15, 2006, albeit with the condition that
they submit satisfactory BA/BE test results for said drug.15
DECISION
Accordingly, respondents engaged the services of the University of the Philippines’
PERLAS-BERNABE, J.: (Manila) Department of Pharmacology and Toxicology, College of Medicine to
conduct BA/BE testing on Refam, the results of which were submitted to the
This is a direct recourse to the Court from the Regional Trial Court of Muntinlupa FDA.16 In turn, the FDA sent a letter dated July 31, 2006 to respondents, stating
City, Branch 256 (RTC), through a petition for review on certiorari,1 raising a pure that Refam is "not bioequivalent with the reference drug."17 This notwithstanding,
question of law. In particular, petitioner Republic of the Philippines, represented by the FDA still revalidated respondents’ CPR for Refam two (2) more times, effective
the Bureau.of Food and Drugs (BFAD), now Food and Drug Administration (FDA), until November 15, 2008, the second of which came with a warning that no more
assails the Order2dated December 18, 2009 of the RTC in Civil Case No. 08-124 further revalidations shall be granted until respondents submit satisfactory BA/BE
which: (a) declared BF AD Circular Nos. 1 and 8, series of 1997 (Circular Nos. 1 test results for Refam.18
and 8, s. 1997) null and void; (b) ordered the issuance of writs of permanent
injunction and prohibition against the FDA in implementing the aforesaid circulars; Instead of submitting satisfactory BA/BE test results for Refam, respondents filed
and ( c) directed the FDA to issue Certificates of Product Registration (CPR) in favor a petition for prohibition and annulment of Circular Nos. 1 and 8, s. 1997 before
of respondents Drugmaker's Laboratories, Inc. and Terrarriedic, Inc. (respondents). the RTC, alleging that it is the DOH, and not the FDA, which was granted the
authority to issue and implement rules concerning RA 3720. As such, the issuance
The Facts of the aforesaid circulars and the manner of their promulgation contravened the
law and the Constitution.19 They further averred that that the non-renewal of the
The FDA3 was created pursuant to Republic Act No. (RA) 3720,4 otherwise known CPR due to failure to submit satisfactory BA/BE test results would not only affect
as the "Food, Drug, and Cosmetic Act," primarily in order "to establish safety or Refam, but their other products as well.20
efficacy standards and quality measures for foods, drugs and devices, and cosmetic
product[s]."5 On March 15, 1989, the Department of Health (DOH), thru then- During the pendency of the case, RA 9711,21 otherwise known as the "Food and
Secretary Alfredo R.A. Bengzon, issued Administrative Order No. (AO) 67, s. 1989, Drug Administration [FDA] Act of 2009," was enacted into law.
entitled "Revised Rules and Regulations on Registration of Pharmaceutical
Products." Among others, it required drug manufacturers to register certain drug The RTC Ruling
and medicine products with the FDA before they may release the same to the
market for sale. In this relation, a satisfactory In an Order22 dated December 18, 2009, the RTC ruled in favor of respondents, and
bioavailability6/bioequivalence7 (BA/BE) test is needed for a manufacturer to secure thereby declared Circular Nos. 1 and 8, s. 1997 null and void, ordered the issuance
a CPR for these products. However, the implementation of the BA/BE testing of writs of permanent injunction and prohibition against the FDA in implementing
requirement was put on hold because there was no local facility capable of the aforesaid circulars, and directed the FDA to issue CPRs in favor of respondents’
conducting the same. The issuance of Circular No. 1, s. 19978 resumed the FDA’s products.
implementation of the BA/BE testing requirement with the establishment of BA/BE
testing facilities in the country. Thereafter, the FDA issued Circular No. 8, s. The RTC held that there is nothing in RA 3720 which granted either the FDA the
19979 which provided additional implementation details concerning the BA/BE authority to issue and implement the subject circulars, or the Secretary of Health
testing requirement on drug products.10 the authority to delegate his powers to the FDA. For these reasons, it concluded
that the issuance of Circular Nos. 1 and 8, s.
Respondents manufacture and trade a "multisource pharmaceutical product"11 with
the generic name of rifampicin12– branded as "Refam 200mg/5mL Suspension"
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1997 constituted an illegal exercise of legislative and administrative powers and, to conform with the doctrine of separation of powers and, as an adjunct, the
hence, must be struck down.23 doctrine of non-delegability of legislative power.30

Accordingly, the RTC issued a Writ of Permanent Injunction24 dated January 19, An administrative regulation may be classified as a legislative rule, an interpretative
2010, enjoining the FDA and all persons acting for and under it from enforcing rule, or a contingent rule. Legislative rules are in the nature of subordinate
Circular Nos. 1 and 8, s. 1997 and directing them to approve the renewal and legislation and designed to implement a primary legislation by providing the details
revalidation of respondents’ products without submitting satisfactory BA/BE test thereof.31 They usually implement existing law, imposing general, extra-statutory
results. obligations pursuant to authority properly delegated by Congress32 and effect a
change in existing law or policy which affects individual rights and
Aggrieved, the FDA sought direct recourse to the Court through the instant petition obligations.33 Meanwhile, interpretative rules are intended to interpret, clarify or
with an urgent prayer for the immediate issuance of a temporary restraining order explain existing statutory regulations under which the administrative body
and/or a writ of preliminary injunction against the implementation of the RTC’s operates. Their purpose or objective is merely to construe the statute being
Order dated December 18, 2009 and Writ of Permanent Injunction dated January administered and purport to do no more than interpret the statute. Simply, they
19, 2010.25 The Court granted FDA’s application and issued a Temporary try to say what the statute means and refer to no single person or party in particular
Restraining Order26 dated February 24, 2010, effective immediately and continuing but concern all those belonging to the same class which may be covered by the
until further orders. said rules.34 Finally, contingent rules are those issued by an administrative
authority based on the existence of certain facts or things upon which the
The Issue Before the Court enforcement of the law depends.35

The primordial issue in this case is whether or not the FDA may validly issue and In general, an administrative regulation needs to comply with the requirements laid
implement Circular Nos. 1 and 8, s. 1997. In resolving this issue, there is a need down by Executive Order No. 292, s. 1987, otherwise known as the "Administrative
to determine whether or not the aforesaid circulars partake of administrative rules Code of 1987," on prior notice, hearing, and publication in order to be valid and
and regulations and, as such, must comply with the requirements of the law for its binding, except when the same is merely an interpretative rule. This is because
issuance. "[w]hen an administrative rule is merely interpretative in nature, its applicability
needs nothing further than its bare issuance, for it gives no real consequence more
The FDA contends that it has the authority to issue Circular Nos. 1 and 8, s. 1997 than what the law itself has already prescribed. When, on the other hand, the
as it is the agency mandated by law to administer and enforce laws, including rules administrative rule goes beyond merely providing for the means that can facilitate
and regulations issued by the DOH, that pertain to the registration of or render least cumbersome the implementation of the law but substantially
pharmaceutical products.27 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,
For their part, respondents maintain that under RA 3720, the power to make rules before that new issuance is given the force and effect of law."36
to implement the law is lodged with the Secretary of Health, not with the
FDA.28 They also argue that the assailed circulars are void for lack of prior hearing, In the case at bar, it is undisputed that RA 3720, as amended by Executive Order
consultation, and publication.29 No. 175, s. 198737 prohibits, inter alia, the manufacture and sale of pharmaceutical
products without obtaining the proper CPR from the FDA.38 In this regard, the FDA
The Court’s Ruling has been deputized by the same law to accept applications for registration of
pharmaceuticals and, after due course, grant or reject such applications.39 To this
The petition is meritorious. end, the said law expressly authorized the Secretary of Health, upon the
recommendation of the FDA Director, to issue rules and regulations that pertain to
Administrative agencies may exercise quasi-legislative or rule-making powers only the registration of pharmaceutical products.40
if there exists a law which delegates these powers to them. Accordingly, the rules
so promulgated must be within the confines of the granting statute and must In accordance with his rule-making power under RA 3720, the Secretary of Health
involve no discretion as to what the law shall be, but merely the authority to fix the issued AO 67, s. 1989 in order to provide a comprehensive set of guidelines
details in the execution or enforcement of the policy set out in the law itself, so as covering the registration of pharmaceutical products. AO 67, s. 1989, required,
among others, that certain pharmaceutical products undergo BA/BE testing prior to
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the issuance of CPR, contrary to respondents’ assertion that it was Circular Nos. 1 A careful scrutiny of the foregoing issuances would reveal that AO 67, s. 1989 is
and 8, s. 1997 that required such tests.41 actually the rule that originally introduced the BA/BE testing requirement as a
component of applications for the issuance of CPRs covering certain pharmaceutical
Despite the fact that the BA/BE testing requirement was already in place as early products. As such, it is considered an administrative regulation – a legislative rule
as the date of effectivity of AO 67, s. 1989, its implementation was indefinitely to be exact – issued by the Secretary of Health in consonance with the express
shelved due to lack of facilities capable of conducting the same. It was only authority granted to him by RA 3720 to implement the statutory mandate that all
sometime in 1997 when technological advances in the country paved the way for drugs and devices should first be registered with the FDA prior to their manufacture
the establishment of BA/BE testing facilities, thus allowing the rule’s enforcement. and sale. Considering that neither party contested the validity of its issuance, the
Owing to these developments, the FDA (then, the BFAD) issued Circular No. 1, s. Court deems that AO 67, s. 1989 complied with the requirements of prior hearing,
1997, the full text of which reads: notice, and publication pursuant to the presumption of regularity accorded to the
government in the exercise of its official duties.42
In Annex 1 of A.O. 67 s. 1989 which is entitled Requirement for Registration
provides that "Bioavailability/Bioequivalence study for certain drugs as determined On the other hand, Circular Nos. 1 and 8, s. 1997 cannot be considered as
by BFAD" is required for [(i)] Tried and Tested Drug, (ii) Established Drug, and (iii) administrative regulations because they do not: (a) implement a primary legislation
Pharmaceutical Innovation of Tried and Tested or Established Drug. by providing the details thereof; (b) interpret, clarify, or explain existing statutory
regulations under which the FDA operates; and/or (c) ascertain the existence of
Drugs requiring strict precaution in prescribing and dispensing contained in the List- certain facts or things upon which the enforcement of RA 3720 depends. In fact,
B (Prime) were the drugs identified by BFAD in the process of registration that will the only purpose of these circulars is for the FDA to administer and supervise the
be required "Bioavailability/Bioequivalence" studies. However, due to the implementation of the provisions of AO 67, s. 1989, including those covering the
supervening factor that there had yet been no bioavailability testing unit in the BA/BE testing requirement, consistent with and pursuant to RA 3720.43 Therefore,
country when the A.O. 67 s. 1989 became effective, the Bureau did not strictly the FDA has sufficient authority to issue the said circulars and since they would not
enforce the said requirement. affect the substantive rights of the parties that they seek to govern – as they are
not, strictly speaking, administrative regulations in the first place – no prior
The supervening factor no longer exist [sic] as of date. As a matter of fact, one of hearing, consultation, and publication are needed for their validity.
the registered products tested by the Bioavailability Testing Unit at the University
of Sto. Tomas under the NDP Cooperation Project of the Philippines and Australia In sum, the Court holds that Circular Nos. 1 and 8, s. 1997 are valid issuances and
failed to meet the standard of bioavailability. This finding brings forth the fact that binding to all concerned parties, including the respondents in this case.
there may be registered products which do not or may no longer meet
bioavailability standard. As a final note, while the proliferation of generic drugs and medicines is indeed a
welcome development as it effectively ensures access to affordable quality drugs
Wherefore, all drugs manufacturers, traders, distributor-importers of products and medicines for all through their lower prices, the State, through the FDA, which
contained or identified in the list b’ (prime) provided for by BFAD, a copy of which is the government instrumentality tasked on this matter, must nevertheless be
is made part of this circular, are advised that all pending initial and renewal vigilant in ensuring that the generic drugs and medicines released to the market
registration of the products aforementioned, as well as all applications for initial are safe and effective for use.
and renewal registration of the same, shall henceforth be required to submit
bioavailability test with satisfactory results on the products sought to be registered WHEREFORE, the petition is GRANTED. The Order dated December 18, 2009 and
or renewed conducted by any bioavailability testing units here or abroad, duly the Writ of Permanent Injunction dated January 19, 2010 of the Regional Trial Court
recognized by the BFAD under the Dept. of Health.1âwphi1 (Emphases and of Muntinlupa City, Branch 256 in Civil Case No. 08-124 are hereby SET ASIDE.
underscoring supplied) BFAD Circular Nos. 1 and 8, series of 1997 are declared VALID. Accordingly, the
Court's Temporary Restraining Order dated February 24, 2010 is hereby made
The FDA then issued Circular No. 8, s. 1997 to supplement Circular No. 1, s. 1997 PERMANENT.
in that it reiterates the importance of the BA/BE testing requirement originally
provided for by AO 67, s. 1989.1âwphi1 SO ORDERED.
POLITICAL REV |Admin Law Assign 1|4

2. G.R. No. 78385 August 31, 1987 this reduction, the petitioner still opposed the increases. On April 23, 1987, the
petitioner, through counsel, sent a telegram to the President of the Philippines
PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner, urging the suspension of the implementation of Department Order No. 37. 4 No
vs. response appears to have been obtained from the Office of the President.
THE SECRETARY OF EDUCATION, CULTURE AND SPORTS, respondent.
Thus, on May 20, 1987, the petitioner, allegedly on the basis of the public interest,
GANCAYCO, J.: went to this Court and filed the instant Petition for prohibition, seeking that
judgment be rendered declaring the questioned Department Order unconstitutional.
This is an original Petition for prohibition with a prayer for the issuance of a writ of The thrust of the Petition is that the said Department Order was issued without any
preliminary injunction. legal basis. The petitioner also maintains that the questioned Department Order
was issued in violation of the due process clause of the Constitution in asmuch as
The record of the case discloses that the herein petitioner Philippine Consumers the petitioner was not given due notice and hearing before the said Department
Foundation, Inc. is a non-stock, non-profit corporate entity duly organized and Order was issued.
existing under the laws of the Philippines. The herein respondent Secretary of
Education, Culture and Sports is a ranking cabinet member who heads the In support of the first argument, the petitioner argues that while the DECS is
Department of Education, Culture and Sports of the Office of the President of the authorized by law to regulate school fees in educational institutions, the power to
Philippines. regulate does not always include the power to increase school fees. 5

On February 21, 1987, the Task Force on Private Higher Education created by the Regarding the second argument, the petitioner maintains that students and parents
Department of Education, Culture and Sports (hereinafter referred to as the DECS) are interested parties that should be afforded an opportunity for a hearing before
submitted a report entitled "Report and Recommendations on a Policy for Tuition school fees are increased. In sum, the petitioner stresses that the questioned Order
and Other School Fees." The report favorably recommended to the DECS the constitutes a denial of substantive and procedural due process of law.
following courses of action with respect to the Government's policy on increases in
school fees for the schoolyear 1987 to 1988 — Complying with the instructions of this Court, 6 the respondent Secretary submitted
a Comment on the Petition. 7The respondent Secretary maintains, inter alia, that
(1) Private schools may be allowed to increase its total school fees the increase in tuition and other school fees is urgent and necessary, and that the
by not more than 15 per cent to 20 per cent without the need for assailed Department Order is not arbitrary in character. In due time, the petitioner
the prior approval of the DECS. Schools that wish to increase submitted a Reply to the Comment. 8 Thereafter, We considered the case submitted
school fees beyond the ceiling would be subject to the discretion for resolution.
of the DECS;
After a careful examination of the entire record of the case, We find the instant
(2) Any private school may increase its total school fees in excess Petition devoid of merit.
of the ceiling, provided that the total schools fees will not exceed
P1,000.00 for the schoolyear in the elementary and secondary We are not convinced by the argument that the power to regulate school fees "does
levels, and P50.00 per academic unit on a semestral basis for the not always include the power to increase" such fees. Section 57 (3) of Batas
collegiate level. 1 Pambansa Blg. 232, otherwise known as The Education Act of 1982, vests the DECS
with the power to regulate the educational system in the country, to wit:
The DECS took note of the report of the Task Force and on the basis of the same,
the DECS, through the respondent Secretary of Education, Culture and Sports SEC. 57. Educations and powers of the Ministry. The Ministry shall:
(hereinafter referred to as the respondent Secretary), issued an Order
authorizing, inter alia, the 15% to 20% increase in school fees as recommended by xxx xxx xxx
the Task Force. The petitioner sought a reconsideration of the said Order,
apparently on the ground that the increases were too high. 2 Thereafter, the DECS (3) Promulgate rules and regulations necessary for the
issued Department Order No. 37 dated April 10, 1987 modifying its previous Order administration, supervision and regulation of the educational
and reducing the increases to a lower ceiling of 10% to 15%, accordingly. 3 Despite system in accordance with declared policy.
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xxx xxx xxx 9


the Task Force created by the DECS, on which it based its decision to allow an
increase in school fees, was made judiciously. Moreover, upon the instance of the
Section 70 of the same Act grants the DECS the power to issue rules which are petitioner, as it so admits in its Petition, the DECS had actually reduced the original
likewise necessary to discharge its functions and duties under the law, to wit: rates of 15% to 20% down to 10% to 15%, accordingly. Under the circumstances
peculiar to this case, We cannot consider the assailed Department Order arbitrary.
SEC. 70. Rule-making Authority. — The Minister of Education and
Culture, charged with the administration and enforcement of this Under the Rules of Court, it is presumed that official duty has been regularly
Act, shall promulgate the necessary implementing rules and performed. 10 In the absence of proof to the contrary, that presumption prevails.
regulations. This being so, the burden of proof is on the party assailing the regularity of official
proceedings. In the case at bar, the petitioner has not successfully disputed the
In the absence of a statute stating otherwise, this power includes the power to presumption.
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 We commend the petitioner for taking the cudgels for the public, especially the
with the DECS if it is to properly and effectively discharge its functions and duties parents and the students of the country. Its zeal in advocating the protection of the
under the law. consumers in its activities should be lauded rather than discouraged. But a more
convincing case should be made out by it if it is to seek relief from the courts some
We find the remaining argument of the petitioner untenable. The petitioner invokes time in the future. Petitioner must establish that respondent acted without or in
the due process clause of the Constitution against the alleged arbitrariness of the excess of her jurisdiction; or with grave abuse of discretion, and there is no appeal
assailed Department Order. The petitioner maintains that the due process clause or any other plain, speedy, and adequate remedy in the ordinary course of law
requires that prior notice and hearing are indispensable for the Department Order before the extraordinary writ of prohibition may issue. 11
to be validly issued.
This Court, however, does not go to the extent of saying that it gives its
We disagree. judicial imprimatur to future increases in school fees. The increases must not be
unreasonable and arbitrary so as to amount to an outrageous exercise of
The function of prescribing rates by an administrative agency may be either a government authority and power. In such an eventuality, this Court will not hesitate
legislative or an adjudicative function. If it were a legislative function, the grant of to exercise the power of judicial review in its capacity as the ultimate guardian of
prior notice and hearing to the affected parties is not a requirement of due process. the Constitution.
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. WHEREFORE, in view of the foregoing, the instant Petition for prohibition is hereby
When the rules and/or rates laid down by an administrative agency are meant to DISMISSED for lack of merit. We make no pronouncement as to costs.
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 SO ORDERED.
to a particular party, based upon a finding of fact, then its function is quasi-judicial
in character. 9a

Is Department Order No. 37 issued by the DECS in the exercise of its legislative
function? We believe so. The assailed Department Order prescribes the maximum
school fees that may be charged by all private schools in the country for schoolyear
1987 to 1988. This being so, prior notice and hearing are not essential to the
validity of its issuance.

This observation notwithstanding, there is a failure on the part of the petitioner to


show clear and convincing evidence of such arbitrariness. As the record of the case
discloses, the DECS is not without any justification for the issuance of the
questioned Department Order. It would be reasonable to assume that the report of
POLITICAL REV |Admin Law Assign 1|6

3. G.R. No. L-59234 September 30, 1982 taxi operator has not only covered the cost of his taxis, but has
made reasonable profit for his investments;
TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO
and ACE TRANSPORTATION CORPORATION, petitioners, NOW, THEREFORE, pursuant to this policy, the Board hereby
vs. declares that no car beyond six years shall be operated as taxi,
THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU and in implementation of the same hereby promulgates the
OF LAND TRANSPORTATION, respondents. following rules and regulations:

MELENCIO-HERRERA, J.: 1. As of December 31, 1977, all taxis of Model 1971 and earlier
are ordered withdrawn from public service and thereafter may no
This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction longer be registered and operated as taxis. In the registration of
and Temporary Restraining Order" filed by the Taxicab Operators of Metro Manila, cards for 1978, only taxis of Model 1972 and later shall be
Inc., Felicisimo Cabigao and Ace Transportation, seeks to declare the nullity of accepted for registration and allowed for operation;
Memorandum Circular No. 77-42, dated October 10, 1977, of the Board of
Transportation, and Memorandum Circular No. 52, dated August 15, 1980, of the 2. As of December 31, 1978, all taxis of Model 1972 are ordered
Bureau of Land Transportation. withdrawn from public service and thereafter may no longer be
registered and operated as taxis. In the registration of cars for
Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic 1979, only taxis of Model 1973 and later shall be accepted for
corporation composed of taxicab operators, who are grantees of Certificates of registration and allowed for operation; and every year thereafter,
Public Convenience to operate taxicabs within the City of Manila and to any other there shall be a six-year lifetime of taxi, to wit:
place in Luzon accessible to vehicular traffic. Petitioners Ace Transportation
Corporation and Felicisimo Cabigao are two of the members of TOMMI, each being 1980 — Model 1974
an operator and grantee of such certificate of public convenience.
1981 — Model 1975, etc.
On October 10, 1977, respondent Board of Transportation (BOT) issued
Memorandum Circular No. 77-42 which reads: All taxis of earlier models than those provided above are hereby
ordered withdrawn from public service as of the last day of
SUBJECT: Phasing out and Replacement of registration of each particular year and their respective plates shall
be surrendered directly to the Board of Transportation for
Old and Dilapidated Taxis subsequent turnover to the Land Transportation Commission.

WHEREAS, it is the policy of the government to insure that only For an orderly implementation of this Memorandum Circular, the
safe and comfortable units are used as public conveyances; rules herein shall immediately be effective in Metro-Manila. Its
implementation outside Metro- Manila shall be carried out only
WHEREAS, the riding public, particularly in Metro-Manila, has, time after the project has been implemented in Metro-Manila and only
and again, complained against, and condemned, the continued after the date has been determined by the Board. 1
operation of old and dilapidated taxis;
Pursuant to the above BOT circular, respondent Director of the Bureau of Land
WHEREAS, in order that the commuting public may be assured of Transportation (BLT) issued Implementing Circular No. 52, dated August 15, 1980,
comfort, convenience, and safety, a program of phasing out of old instructing the Regional Director, the MV Registrars and other personnel of BLT, all
and dilapidated taxis should be adopted; within the National Capitol Region, to implement said Circular, and formulating a
schedule of phase-out of vehicles to be allowed and accepted for registration as
WHEREAS, after studies and inquiries made by the Board of public conveyances. To quote said Circular:
Transportation, the latter believes that in six years of operation, a
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Pursuant to BOT Memo-Circular No. 77-42, taxi units with year On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent
models over six (6) years old are now banned from operating as Motion", praying for an early hearing of their petition. The case was heard on
public utilities in Metro Manila. As such the units involved should February 20, 1981. Petitioners presented testimonial and documentary evidence,
be considered as automatically dropped as public utilities and, offered the same, and manifested that they would submit additional documentary
therefore, do not require any further dropping order from the BOT. proofs. Said proofs were submitted on March 27, 1981 attached to petitioners'
pleading entitled, "Manifestation, Presentation of Additional Evidence and
Henceforth, taxi units within the National Capitol Region having Submission of the Case for Resolution." 3
year models over 6 years old shall be refused registration. The
following schedule of phase-out is herewith prescribed for the On November 28, 1981, petitioners filed before the same Board a "Manifestation
guidance of all concerned: and Urgent Motion to Resolve or Decide Main Petition" praying that the case be
resolved or decided not later than December 10, 1981 to enable them, in case of
denial, to avail of whatever remedy they may have under the law for the protection
Year Model Automatic
of their interests before their 1975 model cabs are phased-out on January 1, 1982.
Phase-Out
Year
Petitioners, through its President, allegedly made personal follow-ups of the case,
but was later informed that the records of the case could not be located.
1980
On December 29, 1981, the present Petition was instituted wherein the following
queries were posed for consideration by this Court:
1974 1981
A. Did BOT and BLT promulgate the questioned memorandum
circulars in accord with the manner required by Presidential Decree
1975 1982 No. 101, thereby safeguarding the petitioners' constitutional right
to procedural due process?

1976 1983 B. Granting, arguendo, that respondents did comply with the
procedural requirements imposed by Presidential Decree No. 101,
would the implementation and enforcement of the assailed
1977 memorandum circulars violate the petitioners' constitutional rights
to.

etc. etc. (1) Equal protection of the law;

Strict compliance here is desired. 2 (2) Substantive due process;


and
In accordance therewith, cabs of model 1971 were phase-out in registration year
1978; those of model 1972, in 1979; those of model 1973, in 1980; and those of (3) Protection against arbitrary
model 1974, in 1981. and unreasonable classification
and standard?
On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case
No. 80-7553, seeking to nullify MC No. 77-42 or to stop its implementation; to allow On Procedural and Substantive Due Process:
the registration and operation in 1981 and subsequent years of taxicabs of model
1974, as well as those of earlier models which were phased-out, provided that, at Presidential Decree No. 101 grants to the Board of Transportation the power
the time of registration, they are roadworthy and fit for operation.
POLITICAL REV |Admin Law Assign 1|8

4. To fix just and reasonable standards, classification, regulations, Dispensing with a public hearing prior to the issuance of the Circulars is neither
practices, measurements, or service to be furnished, imposed, violative of procedural due process. As held in Central Bank vs. Hon. Cloribel and
observed, and followed by operators of public utility motor Banco Filipino, 44 SCRA 307 (1972):
vehicles.
Pevious notice and hearing as elements of due process, are
Section 2 of said Decree provides procedural guidelines for said agency to follow in constitutionally required for the protection of life or vested
the exercise of its powers: property rights, as well as of liberty, when its limitation or loss
takes place in consequence of a judicial or quasi-judicial
Sec. 2. Exercise of powers. — In the exercise of the powers proceeding, generally dependent upon a past act or event which
granted in the preceding section, the Board shag proceed promptly has to be established or ascertained. It is not essential to the
along the method of legislative inquiry. validity of general rules or regulations promulgated to govern
future conduct of a class or persons or enterprises, unless the law
Apart from its own investigation and studies, the Board, in its provides otherwise. (Emphasis supplied)
discretion, may require the cooperation and assistance of the
Bureau of Transportation, the Philippine Constabulary, particularly Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary
the Highway Patrol Group, the support agencies within the and oppressive because the roadworthiness of taxicabs depends upon their kind of
Department of Public Works, Transportation and Communications, maintenance and the use to which they are subjected, and, therefore, their actual
or any other government office or agency that may be able to physical condition should be taken into consideration at the time of registration. As
furnish useful information or data in the formulation of the Board public contend, however, it is impractical to subject every taxicab to constant and
of any policy, plan or program in the implementation of this recurring evaluation, not to speak of the fact that it can open the door to the
Decree. adoption of multiple standards, possible collusion, and even graft and corruption.
A reasonable standard must be adopted to apply to an vehicles affected uniformly,
The Board may also can conferences, require the submission of fairly, and justly. The span of six years supplies that reasonable standard. The
position papers or other documents, information, or data by product of experience shows that by that time taxis have fully depreciated, their
operators or other persons that may be affected by the cost recovered, and a fair return on investment obtained. They are also generally
implementation of this Decree, or employ any other suitable dilapidated and no longer fit for safe and comfortable service to the public specially
means of inquiry. considering that they are in continuous operation practically 24 hours everyday in
three shifts of eight hours per shift. With that standard of reasonableness and
In support of their submission that they were denied procedural due process, absence of arbitrariness, the requirement of due process has been met.
petitioners contend that they were not caged upon to submit their position papers,
nor were they ever summoned to attend any conference prior to the issuance of On Equal Protection of the Law:
the questioned BOT Circular.
Petitioners alleged that the Circular in question violates their right to equal
It is clear from the provision aforequoted, however, that the leeway accorded the protection of the law because the same is being enforced in Metro Manila only and
Board gives it a wide range of choice in gathering necessary information or data in is directed solely towards the taxi industry. At the outset it should be pointed out
the formulation of any policy, plan or program. It is not mandatory that it should that implementation outside Metro Manila is also envisioned in Memorandum
first call a conference or require the submission of position papers or other Circular No. 77-42. To repeat the pertinent portion:
documents from operators or persons who may be affected, this being only one of
the options open to the Board, which is given wide discretionary authority. For an orderly implementation of this Memorandum Circular, the
Petitioners cannot justifiably claim, therefore, that they were deprived of procedural rules herein shall immediately be effective in Metro Manila. Its
due process. Neither can they state with certainty that public respondents had not implementation outside Metro Manila shall be carried out only after
availed of other sources of inquiry prior to issuing the challenged Circulars. the project has been implemented in Metro Manila and only after
operators of public conveyances are not the only primary sources of the data and the date has been determined by the Board. 4
information that may be desired by the BOT.
POLITICAL REV |Admin Law Assign 1|9

In fact, it is the understanding of the Court that implementation of the Circulars in


Cebu City is already being effected, with the BOT in the process of conducting
studies regarding the operation of taxicabs in other cities.

The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs
in this city, compared to those of other places, are subjected to heavier traffic
pressure and more constant use. This is of common knowledge. Considering that
traffic conditions are not the same in every city, a substantial distinction exists so
that infringement of the equal protection clause can hardly be successfully claimed.

As enunciated in the preambular clauses of the challenged BOT Circular, the


overriding consideration is the safety and comfort of the riding public from the
dangers posed by old and dilapidated taxis. The State, in the exercise, of its police
power, can prescribe regulations to promote the health, morals, peace, good order,
safety and general welfare of the people. It can prohibit all things hurtful to comfort,
safety and welfare of society. 5 It may also regulate property rights. 6 In the
language of Chief Justice Enrique M. Fernando "the necessities imposed by public
welfare may justify the exercise of governmental authority to regulate even if
thereby certain groups may plausibly assert that their interests are disregarded". 7

In so far as the non-application of the assailed Circulars to other transportation


services is concerned, it need only be recalled that the equal protection clause does
not imply that the same treatment be accorded all and sundry. It applies to things
or persons Identically or similarly situated. It permits of classification of the object
or subject of the law provided classification is reasonable or based on substantial
distinction, which make for real differences, and that it must apply equally to each
member of the class. 8 What is required under the equal protection clause is the
uniform operation by legal means so that all persons under Identical or similar
circumstance would be accorded the same treatment both in privilege conferred
and the liabilities imposed. 9 The challenged Circulars satisfy the foregoing criteria.

Evident then is the conclusion that the questioned Circulars do not suffer from any
constitutional infirmity. To declare a law unconstitutional, the infringement of
constitutional right must be clear, categorical and undeniable. 10

WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed.
No costs.

SO ORDERED.
POLITICAL REV |Admin Law Assign 1|10

4. G.R. No. 163980 August 3, 2006 Prior to the passage of R.A. No. 9207, a number of presidential issuances authorized
the creation and development of what is now known as the National Government
HOLY SPIRIT HOMEOWNERS ASSOCIATION, INC. and NESTORIO F. Center (NGC).
APOLINARIO, in his personal capacity and as President of Holy Spirit
Homeowners Association, Inc., Petitioners, On March 5, 1972, former President Ferdinand Marcos issued Proclamation No.
vs. 1826, reserving a parcel of land in Constitution Hills, Quezon City, covering a little
SECRETARY MICHAEL DEFENSOR, in his capacity as Chairman of the over 440 hectares as a national government site to be known as the NGC. 1
Housing and Urban Development Coordinating Council (HUDCC), ATTY.
EDGARDO PAMINTUAN, in his capacity as General Manager of the On August 11, 1987, then President Corazon Aquino issued Proclamation No. 137,
National Housing Authority (NHA), MR. PERCIVAL CHAVEZ, in his capacity excluding 150 of the 440 hectares of the reserved site from the coverage of
as Chairman of the PresidentialCommission for the Urban Poor (PCUP), Proclamation No. 1826 and authorizing instead the disposition of the excluded
MAYOR FELICIANO BELMONTE, in his capacity as Mayor of Quezon City, portion by direct sale to the bona fide residents therein. 2
SECRETARY ELISEA GOZUN, in her capacity as Secretary of the
Department of Environment and Natural Resources (DENR) and In view of the rapid increase in population density in the portion excluded by
SECRETARY FLORENTE SORIQUEZ, in his capacity as Secretary of the Proclamation No. 137 from the coverage of Proclamation No. 1826, former
Department of Public Works and Highways (DPWH) as ex-officio President Fidel Ramos issued Proclamation No. 248 on September 7, 1993,
members of the NATIONAL GOVERNMENT CENTER ADMINISTRATION authorizing the vertical development of the excluded portion to maximize the
COMMITTEE, Respondents. number of families who can effectively become beneficiaries of the government’s
socialized housing program. 3
DECISION
On May 14, 2003, President Gloria Macapagal-Arroyo signed into law R.A. No. 9207.
TINGA, J.: Among the salient provisions of the law are the following:

The instant petition for prohibition under Rule 65 of the 1997 Rules of Civil Sec. 2. Declaration of Policy. – It is hereby declared the policy of the State to secure
Procedure, with prayer for the issuance of a temporary restraining order and/or the land tenure of the urban poor. Toward this end, lands located in the NGC,
writ of preliminary injunction, seeks to prevent respondents from enforcing the Quezon City shall be utilized for housing, socioeconomic, civic, educational,
implementing rules and regulations (IRR) of Republic Act No. 9207, otherwise religious and other purposes.
known as the "National Government Center (NGC) Housing and Land Utilization Act
of 2003." Sec. 3. Disposition of Certain Portions of the National Government Center Site to
Bona Fide Residents. – Proclamation No. 1826, Series of 1979, is hereby amended
Petitioner Holy Spirit Homeowners Association, Inc. (Association) is a homeowners by excluding from the coverage thereof, 184 hectares on the west side and 238
association from the West Side of the NGC. It is represented by its president, hectares on the east side of Commonwealth Avenue, and declaring the same open
Nestorio F. Apolinario, Jr., who is a co-petitioner in his own personal capacity and for disposition to bona fide residents therein: Provided, That the determination of
on behalf of the association. the bona fide residents on the west side shall be based on the census survey
conducted in 1994 and the determination of the bona fide residents on the east
Named respondents are the ex-officio members of the National Government Center side shall be based on the census survey conducted in 1994 and occupancy
Administration Committee (Committee). At the filing of the instant petition, the verification survey conducted in 2000: Provided, further, That all existing legal
Committee was composed of Secretary Michael Defensor, Chairman of the Housing agreements, programs and plans signed, drawn up or implemented and actions
and Urban Development Coordinating Council (HUDCC), Atty. Edgardo Pamintuan, taken, consistent with the provisions of this Act are hereby adopted.
General Manager of the National Housing Authority (NHA), Mr. Percival Chavez,
Chairman of the Presidential Commission for Urban Poor (PCUP), Mayor Feliciano Sec. 4. Disposition of Certain Portions of the National Government Center Site for
Belmonte of Quezon City, Secretary Elisea Gozun of the Department of Environment Local Government or Community Facilities, Socioeconomic, Charitable, Educational
and Natural Resources (DENR), and Secretary Florante Soriquez of the Department and Religious Purposes. – Certain portions of land within the aforesaid area for local
of Public Works and Highways (DPWH). government or community facilities, socioeconomic, charitable, educational and
religious institutions are hereby reserved for disposition for such
POLITICAL REV |Admin Law Assign 1|11

purposes: Provided, That only those institutions already operating and with Petitioner association has the legal standing to institute the instant petition,
existing facilities or structures, or those occupying the land may avail of the whether or not it is the duly recognized association of homeowners in the NGC.
disposition program established under the provisions this Act; Provided, further, There is no dispute that the individual members of petitioner association are
That in ascertaining the specific areas that may be disposed of in favor of residents of the NGC. As such they are covered and stand to be either benefited or
these institutions, the existing site allocation shall be used as basis injured by the enforcement of the IRR, particularly as regards the selection process
therefore: Provided, finally. That in determining the reasonable lot allocation of of beneficiaries and lot allocation to qualified beneficiaries. Thus, petitioner
such institutions without specific lot allocations, the land area that may be association may assail those provisions in the IRR which it believes to be
allocated to them shall be based on the area actually used by said institutions at unfavorable to the rights of its members. Contrary to the OSG’s allegation that the
the time of effectivity of this Act. (Emphasis supplied.) failure of petitioner association and its members to qualify as beneficiaries
effectively bars them from questioning the provisions of the IRR, such circumstance
In accordance with Section 5 of R.A. No. 9207, 4 the Committee formulated the precisely operates to confer on them the legal personality to assail the IRR.
Implementing Rules and Regulations (IRR) of R.A. No. 9207 on June 29, 2004. Certainly, petitioner and its members have sustained direct injury arising from the
Petitioners subsequently filed the instant petition, raising the following issues: enforcement of the IRR in that they have been disqualified and eliminated from the
selection process. While it is true that petitioners claim rights over the NGC West
WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE Side only and thus cannot be affected by the implementation of Section 3.1 (b.2),
RULES AND REGULATIONS OF REPUBLIC ACT NO. 9207, OTHERWISE KNOWN AS which refers to the NGC East Side, the rest of the assailed provisions of the IRR,
"NATIONAL GOVERNMENT CENTER (NGC) HOUSING AND LAND UTILIZATION ACT namely, Sections 3.1 (a.4), 3.2 (a.1) and 3.2 (c.1), govern the disposition of lots
OF 2003" SHOULD BE DECLARED NULL AND VOID FOR BEING INCONSISTENT in the West Side itself or all the lots in the NGC.
WITH THE LAW IT SEEKS TO IMPLEMENT.
We cannot, therefore, agree with the OSG on the issue of locus standi. The petition
WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE does not merit dismissal on that ground.
RULES AND REGULATIONS OF REPUBLIC ACT NO. 9207, OTHERWISE KNOWN AS
"NATIONAL GOVERNMENT CENTER (NGC) HOUSING AND LAND UTILIZATION ACT There are, however, other procedural impediments to the granting of the instant
OF 2003" SHOULD BE DECLARED NULL AND VOID FOR BEING ARBITRARY, petition. The OSG claims that the instant petition for prohibition is an improper
CAPRICIOUS AND WHIMSICAL. 5 remedy because the writ of prohibition does not lie against the exercise of a quasi-
legislative function. 9 Since in issuing the questioned IRR of R.A. No. 9207, the
First, the procedural matters. Committee was not exercising judicial, quasi-judicial or ministerial function, which
is the scope of a petition for prohibition under Section 2, Rule 65 of the 1997 Rules
The Office of the Solicitor General (OSG) argues that petitioner Association cannot of Civil Procedure, the instant prohibition should be dismissed outright, the OSG
question the implementation of Section 3.1 (b.2) and Section 3.2 (c.1) since it does contends. For their part, respondent Mayor of Quezon City 10 and respondent
not claim any right over the NGC East Side. Section 3.1 (b.2) provides for the NHA 11 contend that petitioners violated the doctrine of hierarchy of courts in filing
maximum lot area that may be awarded to a resident-beneficiary of the NGC East the instant petition with this Court and not with the Court of Appeals, which has
Side, while Section 3.2 (c.1) imposes a lot price escalation penalty to a qualified concurrent jurisdiction over a petition for prohibition.
beneficiary who fails to execute a contract to sell within the prescribed
period. 6 Also, the OSG contends that since petitioner association is not the duly The cited breaches are mortal. The petition deserves to be spurned as a
recognized people’s organization in the NGC and since petitioners not qualify as consequence.
beneficiaries, they cannot question the manner of disposition of lots in the NGC. 7
Administrative agencies possess quasi-legislative or rule-making powers and quasi-
"Legal standing" or locus standi has been defined as a personal and substantial judicial or administrative adjudicatory powers. Quasi-legislative or rule-making
interest in the case such that the party has sustained or will sustain direct injury as power is the power to make rules and regulations which results in delegated
a result of the governmental act that is being challenged…. The gist of the question legislation that is within the confines of the granting statute and the doctrine of
of standing is whether a party alleges "such personal stake in the outcome of the non-delegability and separability of powers. 12
controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for illumination of difficult In questioning the validity or constitutionality of a rule or regulation issued by an
constitutional questions." 8 administrative agency, a party need not exhaust administrative remedies before
POLITICAL REV |Admin Law Assign 1|12

going to court. This principle, however, applies only where the act of the directed against any tribunal, corporation, board, officer or person, whether
administrative agency concerned was performed pursuant to its quasi-judicial exercising judicial, quasi-judicial or ministerial functions, ordering said entity or
function, and not when the assailed act pertained to its rule-making or quasi- person to desist from further proceedings when said proceedings are without or in
legislative power. 13 excess of said entity’s or person’s jurisdiction, or are accompanied with grave abuse
of discretion, and there is no appeal or any other plain, speedy and adequate
The assailed IRR was issued pursuant to the quasi-legislative power of the remedy in the ordinary course of law. 21 Prohibition lies against judicial or
Committee expressly authorized by R.A. No. 9207. The petition rests mainly on the ministerial functions, but not against legislative or quasi-legislative functions.
theory that the assailed IRR issued by the Committee is invalid on the ground that Generally, the purpose of a writ of prohibition is to keep a lower court within the
it is not germane to the object and purpose of the statute it seeks to implement. limits of its jurisdiction in order to maintain the administration of justice in orderly
Where what is assailed is the validity or constitutionality of a rule or regulation channels. 22 Prohibition is the proper remedy to afford relief against usurpation of
issued by the administrative agency in the performance of its quasi-legislative jurisdiction or power by an inferior court, or when, in the exercise of jurisdiction in
function, the regular courts have jurisdiction to pass upon the same. 14 handling matters clearly within its cognizance the inferior court transgresses the
bounds prescribed to it by the law, or where there is no adequate remedy available
Since the regular courts have jurisdiction to pass upon the validity of the assailed in the ordinary course of law by which such relief can be obtained. 23 Where the
IRR issued by the Committee in the exercise of its quasi-legislative power, the principal relief sought is to invalidate an IRR, petitioners’ remedy is an ordinary
judicial course to assail its validity must follow the doctrine of hierarchy of courts. action for its nullification, an action which properly falls under the jurisdiction of the
Although the Supreme Court, Court of Appeals and the Regional Trial Courts have Regional Trial Court. In any case, petitioners’ allegation that "respondents are
concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo performing or threatening to perform functions without or in excess of their
warranto, habeas corpus and injunction, such concurrence does not give the jurisdiction" may appropriately be enjoined by the trial court through a writ of
petitioner unrestricted freedom of choice of court forum. 15 injunction or a temporary restraining order.

True, this Court has the full discretionary power to take cognizance of the petition In a number of petitions, 24 the Court adequately resolved them on other grounds
filed directly with it if compelling reasons, or the nature and importance of the without adjudicating on the constitutionality issue when there were no compelling
issues raised, so warrant. 16 A direct invocation of the Court’s original jurisdiction reasons to pass upon the same. In like manner, the instant petition may be
to issue these writs should be allowed only when there are special and important dismissed based on the foregoing procedural grounds. Yet, the Court will not shirk
reasons therefor, clearly and specifically set out in the petition. 17 from its duty to rule on the merits of this petition to facilitate the speedy resolution
of this case. In proper cases, procedural rules may be relaxed or suspended in the
In Heirs of Bertuldo Hinog v. Melicor, 18 the Court said that it will not entertain interest of substantial justice. And the power of the Court to except a particular
direct resort to it unless the redress desired cannot be obtained in the appropriate case from its rules whenever the purposes of justice require it cannot be
courts, and exceptional and compelling circumstances, such as cases of national questioned. 25
interest and of serious implications, justify the availment of the extraordinary
remedy of writ of certiorari, calling for the exercise of its primary jurisdiction. 19 A Now, we turn to the substantive aspects of the petition. The outcome,
perusal, however, of the petition for prohibition shows no compelling, special or however, is just as dismal for petitioners.
important reasons to warrant the Court’s taking cognizance of the petition in the
first instance. Petitioner also failed to state any reason that precludes the lower Petitioners assail the following provisions of the IRR:
courts from passing upon the validity of the questioned IRR. Moreover, as provided
in Section 5, Article VIII of the Section 3. Disposition of Certain portions of the NGC Site to the bonafide residents

Constitution, 20 the Court’s power to evaluate the validity of an implementing rule 3.1. Period for Qualification of Beneficiaries
or regulation is generally appellate in nature. Thus, following the doctrine of
hierarchy of courts, the instant petition should have been initially filed with the xxxx
Regional Trial Court.
(a.4) Processing and evaluation of qualifications shall be based on the Code of
A petition for prohibition is also not the proper remedy to assail an IRR issued in Policies and subject to the condition that a beneficiary is qualified to acquire only
the exercise of a quasi-legislative function. Prohibition is an extraordinary writ
POLITICAL REV |Admin Law Assign 1|13

one (1) lot with a minimum of 36 sq. m. and maximum of 54 sq. m. and subject its bona fide residents and the manner by which this area may be distributed to
further to the availability of lots. qualified beneficiaries. Section 4, R.A. No. 9207, on the other hand, governs the lot
disposition to government institutions. While it is true that Section 4 of R.A. No.
xxxx 9207 has a proviso mandating that the lot allocation shall be based on the land
area actually used or occupied at the time of the law’s effectivity, this proviso
(b.2) Applications for qualification as beneficiary shall be processed and evaluated applies only to institutional beneficiaries consisting of the local government,
based on the Code of Policies including the minimum and maximum lot allocation socioeconomic, charitable, educational and religious institutions which do not have
of 35 sq. m. and 60 sq. m. specific lot allocations, and not to the bona fide residents of NGC. There is no
proviso which even hints that a bona fide resident of the NGC is likewise entitled to
xxxx the lot area actually occupied by him.

3.2. Execution of the Contract to Sell Petitioners’ interpretation is also not supported by the policy of R.A. No. 9207 and
the prior proclamations establishing the NGC. The government’s policy to set aside
(a) Westside public property aims to benefit not only the urban poor but also the local
government and various government institutions devoted to socioeconomic,
(a.1) All qualified beneficiaries shall execute Contract to Sell (CTS) within sixty (60) charitable, educational and
days from the effectivity of the IRR in order to avail of the lot at P700.00 per sq.
m. religious purposes. 26 Thus, although Proclamation No. 137 authorized the sale of
lots to bona fide residents in the NGC, only a third of the entire area of the NGC
xxxx was declared open for disposition subject to the condition that those portions being
used or earmarked for public or quasi-public purposes would be excluded from the
(c) for both eastside and westside housing program for NGC residents. The same policy of rational and optimal land
use can be read in Proclamation No. 248 issued by then President Ramos. Although
(c.1) Qualified beneficiaries who failed to execute CTS on the deadline set in item the proclamation recognized the rapid increase in the population density in the
a.1 above in case of westside and in case of eastside six (6) months after approval NGC, it did not allocate additional property within the NGC for urban poor housing
of the subdivision plan shall be subjected to lot price escalation. but instead authorized the vertical development of the same 150 hectares identified
previously by Proclamation No. 137 since the distribution of individual lots would
The rate shall be based on the formula to be set by the National Housing Authority not adequately provide for the housing needs of all the bona fide residents in the
factoring therein the affordability criteria. The new rate shall be approved by the NGC.
NGC-Administration Committee (NGC-AC).
In addition, as provided in Section 4 of R.A. No. 9207, the institutional beneficiaries
Petitioners contend that the aforequoted provisions of the IRR are constitutionally shall be allocated the areas actually occupied by them; hence, the portions intended
infirm as they are not germane to and/or are in conflict with the object and purpose for the institutional beneficiaries is fixed and cannot be allocated for other non-
of the law sought to be implemented. institutional beneficiaries. Thus, the areas not intended for institutional
beneficiaries would have to be equitably distributed among the bona fide residents
First. According to petitioners, the limitation on the areas to be awarded to qualified of the NGC. In order to accommodate all qualified residents, a limitation on the
beneficiaries under Sec. 3.1 (a.4) and (b.2) of the IRR is not in harmony with the area to be awarded to each beneficiary must be fixed as a necessary consequence.
provisions of R.A. No. 9207, which mandates that the lot allocation to qualified
beneficiaries shall be based on the area actually used or occupied by bona Second. Petitioners note that while Sec. 3.2 (a.1) of the IRR fixes the selling rate
fide residents without limitation to area. The argument is utterly baseless. of a lot at P700.00 per sq. m., R.A. No. 9207 does not provide for the price. They
add Sec. 3.2 (c.1) penalizes a beneficiary who fails to execute a contract to sell
The beneficiaries of lot allocations in the NGC may be classified into two groups, within six (6) months from the approval of the subdivision plan by imposing a price
namely, the urban poor or the bona fide residents within the NGC site and certain escalation, while there is no such penalty imposed by R.A. No. 9207. Thus, they
government institutions including the local government. Section 3, R.A. No. 9207 conclude that the assailed provisions conflict with R.A. No. 9207 and should be
mandates the allocation of additional property within the NGC for disposition to nullified. The argument deserves scant consideration.
POLITICAL REV |Admin Law Assign 1|14

Where a rule or regulation has a provision not expressly stated or contained in the In subordinate legislation, as long as the passage of the rule or regulation had the
statute being implemented, that provision does not necessarily contradict the benefit of a hearing, the procedural due process requirement is deemed complied
statute. A legislative rule is in the nature of subordinate legislation, designed to with. That there is observance of more than the minimum requirements of due
implement a primary legislation by providing the details thereof. 27 All that is process in the adoption of the questioned IRR is not a ground to invalidate the
required is that the regulation should be germane to the objects and purposes of same.
the law; that the regulation be not in contradiction to but in conformity with the
standards prescribed by the law. 28 In sum, the petition lacks merit and suffers from procedural deficiencies.

In Section 5 of R.A. No. 9207, the Committee is granted the power to WHEREFORE, the instant petition for prohibition is DISMISSED. Costs against
administer, formulate guidelines and policies, and implement the disposition of the petitioners.
areas covered by the law. Implicit in this authority and the statute’s objective of
urban poor housing is the power of the Committee to formulate the manner by SO ORDERED.
which the reserved property may be allocated to the beneficiaries. Under this broad
power, the Committee is mandated to fill in the details such as the qualifications of
beneficiaries, the selling price of the lots, the terms and conditions governing the
sale and other key particulars necessary to implement the objective of the law.
These details are purposely omitted from the statute and their determination is left
to the discretion of the Committee because the latter possesses special knowledge
and technical expertise over these matters.

The Committee’s authority to fix the selling price of the lots may be likened to the
rate-fixing power of administrative agencies. In case of a delegation of rate-fixing
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. 29 In this regard, petitioners do
not even claim that the selling price of the lots is unreasonable.

The provision on the price escalation clause as a penalty imposed to a beneficiary


who fails to execute a contract to sell within the prescribed period is also within the
Committee’s authority to formulate guidelines and policies to implement R.A. No.
9207. The Committee has the power to lay down the terms and conditions
governing the disposition of said lots, provided that these are reasonable and just.
There is nothing objectionable about prescribing a period within which the parties
must execute the contract to sell. This condition can ordinarily be found in a
contract to sell and is not contrary to law, morals, good customs, public order, or
public policy.

Third. Petitioners also suggest that the adoption of the assailed IRR suffers from a
procedural flaw. According to them the IRR was adopted and concurred in by
several representatives of people’s organizations contrary to the express mandate
of R.A. No. 9207 that only two representatives from duly recognized peoples’
organizations must compose the NGCAC which promulgated the assailed IRR. It is
worth noting that petitioner association is not a duly recognized people’s
organization.
POLITICAL REV |Admin Law Assign 1|15

5. G.R. No. 157286 June 16, 2006 The Antecedents

THE PUBLIC SCHOOLS DISTRICT SUPERVISORS ASSOCIATION (PSDSA), Ever since the Department of Education (DepEd)1 was founded decades ago, its
its officers, to wit: DR. ANILLA A. CALAMBA, President; DR. CARMELITA L. management had been so centralized in the Manila office. Schools in the national,
PALABAY, Gen. Vice-President; MS. ESTELITA R. REYES, Board Secretary; regional, and division levels merely followed and implemented the orders and
DR. THELMA A. GALANG, Asst. Board Secretary; MR. FERNANDO LAVITA, memoranda issued by the Education Secretary. Due to the evolution of the learning
Treasurer; MS. LITA DIONISIO, Asst. Treasurer; MS. ROSELILY PADRE, process and the onset of information technology, there was a need for a radical
Auditor; MR. ROMAN CALICDAN, Asst. Auditor; MR. TOMO-AY, MR. OSCAR change in the governance of the DepEd. Thus, a study on how to improve the
PEÑAFLORIDA, Bus. Managers; DR. ANTONETTE ANG, DR. MAGNITA management of the Department was conducted, and one of the proposals was the
LABRADOR, P.R.O.’S; MR. BONIFACIO MIGUEL (Region I), MR. JOSE abolition of the office of the district supervisor.
CALAGUI (Region II), DR. REYNALDO SAGUM (Region III), MR. RUBEN
PANAHON (Region IV), MR. OSCAR BARBA (Region V), MS. IRMA GANELA Then Senator Tessie Aquino-Oreta, the Chairman of the Committee on Education,
(Region VI), DR. ERLINDA NAPULI (Region VII), DR. PONCIANO GABIETA authored Senate Bill No. 2191, the thrust of which was to change the existing
(Region VIII), MR. FEDERICO FIDEL (Region IX), MR.EMILIANO V. management style and focus on the schools where the teaching-learning process
RODRIGUEZ (Region X), MS. EDWINA ALAG (Region XI), MR. occurs. The bill was intended to highlight shared governance in the different levels
DOMINADOR ATAM (Region XII), MS. CONSUELO VELASCO (NCR), MR. in the DECS hierarchy and establish authority, accountability, and responsibility for
VICTORINO AGMATA (CAR), MS. NATIVIDAD SALASAB (ARMM-CARAGA), achieving higher learning outcomes. While the governance of basic education would
All PSDSA Vice-Presidents for their respective Regions: DR. LOLITA begin at the national level, the field offices (regions, divisions, schools, and learning
CABANAYAN, MR. CICERO AKLANG, DR. RUSTICO OCAMPO, MR. ROMEO centers) would translate the policy into programs, projects, and services to fit local
SANTOS, MR. EMMANUEL CAMA, MR. ROMEO TUMAOB, MR. JOVENCIO needs.2 The national level was likewise to be tasked to define the roles and
MENDOZA, MR. ALEJANDRO BARING, JR., MS. BERNARDITA APOSTOL, MS. responsibilities of, and provide resources to the field offices which would implement
LORETA MACALUDAS, DR. MYRNA LYN MARACON, MS. ELIZABETH SAN educational programs, projects, and services in communities they serve.3 At the
DIEGO, SITH HINDRON DAMMANG, MS. IMMACULADA BRINGAS, and MS. forefront would be the DepEd Secretary, vested with the overall authority and
GLORIA DERECHO, all members of the PSDSA Board of Directors, in their supervision over the operations of the department on the national, regional,
own behalf as current District Supervisors and IN REPRESENTATION OF division, and schools district level.4
ALL DISTRICT SUPERVISORS OF THE DEPARTMENT OF
EDUCATION, Petitioners, Republic Act No. 9155, otherwise known as the "Governance of Basic Education Act
vs. 2001," became a law on August 11, 2001, in accordance with Section 27(1), Article
HON. EDILBERTO C. DE JESUS, Department Secretary, THE DEPARTMENT VI of the Constitution. Under the law, each regional office shall have a director, an
OF EDUCATION, and THE DEPARTMENT OF BUDGET AND assistant director, and an office staff for program promotion and support, planning,
MANAGEMENT, Respondents. administrative and fiscal services.5 The regional director was given the authority to
hire, place and evaluate all employees in the regional office except for the position
DECISION of assistant director,6 as well as the authority, accountability, and responsibility to
determine the organization component of the divisions and districts, and approve
CALLEJO, SR., J.: the staffing pattern of all employees therein;7 evaluate all division superintendents
and assistant division superintendents in the region;8 and other functions as may
This is a Petition for Prohibition with prayer for temporary restraining order and/or be assigned by the proper authorities.9
preliminary injunction filed by the Public Schools District Supervisor Association
(PSDSA) seeking to declare as unconstitutional Rule IV, Section 4.3; Rule V, A division, on the other hand, is headed by a schools division superintendent with
Sections 5.1 and the second paragraph of Section 5.2; and Rule VI, Section 6.2, the following responsibilities, among others: to supervise the operations of all public
paragraph 11 of Department of Education Order No. 1, Series of 2003. The petition and private elementary, secondary, and integrated schools, and learning
likewise seeks to compel, by way of a writ of mandamus, the Department of centers;10 to hire, place and evaluate all division supervisors and schools district
Education, Culture, and Sports (DECS) and the Department of Budget and supervisors as well as all employees in the divisions, both teaching and non-
Management (DBM) to upgrade the salary grade level of the district supervisors teaching personnel, including school heads, except for the assistant division
from Salary Grade (SG) 19 to SG 24.
POLITICAL REV |Admin Law Assign 1|16

superintendent;11 and perform other functions as may be assigned by proper National Committee on Legal Aid to make representations for the resolution of the
authorities.12 following administrative issues:

The office of the schools district supervisor has been retained under the law. Each 1. Restoration of the functions, duties, responsibilities, benefits,
district is headed by a school district supervisor and an office staff for program prerogatives, and position level of Public Schools District Supervisors.
promotion. However, the responsibilities of the schools district supervisor are
limited to the following: (1) providing professional and instructional advice and 2. Upgrading of Salary Grade level of Public Schools District Supervisors
support to the school heads and teachers/facilitators of schools and learning centers from Salary Grade Level 19 to Salary Grade Level 24 under DBM Circular
in the district or cluster thereof; (2) curricula supervision; and (3) performing such No. 36, otherwise known as the Compensation and Position Classification
other functions as may be assigned by proper authorities. The schools district Rules and Regulation.16
supervisors have no administrative, management, control or supervisory functions
over the schools and learning centers within their respective districts.13 In a Letter dated March 1, 2002 addressed to then DepEd Secretary Raul Roco, the
IBP stated that, per its review of the documents submitted by the PSDSA, it found
On the school level, an Elementary School Principal (ESP) was designated as school the latter’s position valid and legal, to wit:
head for all public elementary schools; and a Secondary School Principal (SSP) for
high schools or a cluster thereof.14 The ESP and the SSP serve as both instructional First: The basis for the abolition of the position of District Supervisors under the
leaders and administrative managers with the following authority, accountability Attrition Law and DECS Department Order No. 110, Series of 1991 is no longer
and responsibility: valid and rendered moot and academic due to issuance of DECS Department Order
No. 22, Series of 1996 and the passage by Congress of the Philippines of Republic
(7) Administering and managing all personnel, physical, and fiscal Act No. 9155, otherwise known as the Basic Education Governance Act of 2000.
resources of the school; Under R.A. 9155, school districts are mandated to be maintained and
responsibilities of Public School’s Districts Supervisors have been clearly defined.
(8) Recommending the staffing complement of the school based on its
needs; Second: There is a clear case of discrimination of grant of salaries and benefits to
District Supervisors compared to salaries and benefits received by the School
(9) Encouraging staff development; Principals – which position is lower in the hierarchy of positions as prepared by the
Department of Education and the Department of Budget and Management. School
xxxx Principals and District Supervisors enjoy the same level of Salary Grade even if the
latter position is considered as a promotion and enjoys a higher level of position
(11) Accepting donations, gifts, bequests, and grants for the purpose of than that of the position of School Principals.17
upgrading teachers’/learning facilitators’ competencies, improving and
expanding school facilities, and providing instructional materials and The PSDSA thus requested the DepEd Secretary to call an immediate consultation
equipment. Such donations or grants must be reported to the appropriate with the district supervisors nationwide through a convention, and their valid inputs
district supervisors and division superintendents; and be considered in formulating the rules and regulations to be urged by the DepEd.
However, the Secretary failed to reply. Thus, the IBP reiterated the concerns raised
(12) Performing such other functions as may be assigned by proper by the PSDSA in a Letter18 to the DepEd dated April 15, 2002.
authorities.15
On January 6, 2003, DepEd Secretary Edilberto C. De Jesus issued DECS Office
Under Section 14 of the law, the DepEd Secretary is mandated to "promulgate the Order No. 1, which constitutes the Implementing Rules and Regulations (IRR) of
implementing rules and regulations within ninety (90) days after the approval of R.A. No. 9155. Sections 4.1 to 4.3, Rule IV of the IRR provide:
the Act, provided that the principle of shared governance shall be fully implemented
within two (2) years" after such approval. SECTION 4.1. The Schools Division Superintendent. – A division shall consist of a
province or city which shall have a schools division superintendent. There shall be
Before the DepEd could issue the appropriate implementing rules and regulations, at least one assistant schools division superintendent and office staff for programs
petitioner sought the legal assistance of the Integrated Bar of the Philippines (IBP)
POLITICAL REV |Admin Law Assign 1|17

promotion, planning, administrative, fiscal, legal, ancillary, and other support The schools division superintendent shall have disciplinary authority only over the
services. non-teaching personnel under his jurisdiction.

SECTION 4.2. Authority, Accountability, and Responsibility of the Schools Division Such exercise of disciplinary authority by the schools division superintendent over
Superintendent. – Consistent with the national educational policies, plans, and the non-teaching personnel shall be subject to the civil service laws, rules and
standards, the schools division superintendents shall have authority, accountability, regulations, and procedures and guidelines to be issued by the Secretary of
and responsibility for the following: Education relative to this matter.

1) Developing and implementing division education development plans; The Regional Director shall continue exercising disciplinary authority over the
teaching personnel insofar as the latter are covered by specific and exclusive
2) Planning and managing the effective and efficient performance of all disciplinary provisions under the Magna Carta for Public School Teachers (R.A. No.
personnel, physical, and fiscal resources of the division, including 4670).19
professional staff development;
Sections 5.1 and 5.2, Rule V of the IRR, in turn, provide:
3) Hiring, placing, and evaluating all division supervisors and schools
district supervisors as well as all employees in the division, both teaching SECTION 5.1. The Schools District Supervisor. – A school district shall have a school
and non-teaching personnel, including school heads, except for the district supervisor and office staff for program promotion.
assistant division superintendents;
The schools district supervisor shall primarily perform staff functions and shall not
4) Monitoring the utilization of funds provided by the national government exercise administrative supervision over school principals, unless specifically
and the local government units to the schools and learning centers; authorized by the proper authorities. The main focus of his/her functions shall be
instructional and curricula supervision aimed at raising academic standards at the
5) Ensuring compliance of quality standards for basic education programs school level.
and for this purpose strengthening the role of division supervisors as
subject area specialists; The schools district supervisor shall be specifically responsible for:

6) Promoting awareness of, and adherence by, all schools and learning 1) Providing professional and instructional advice and support to the school
centers to accreditation standards prescribed by the Secretary of heads and teachers/facilitators of schools and learning centers in the
Education; district or cluster thereof;

7) Supervising the operations of all public and private elementary, 2) Curricula supervision; and
secondary, and integrated schools, and learning centers; and
3) Performing such other functions as may be assigned by the Secretary,
8) Performing such other functions as may be assigned by the Secretary Regional Directors, and Schools Division Superintendents where they
and/or Regional Director. belong.

SECTION 4.3. Appointing and Disciplinary Authority of the Schools Division The schools district supervisor being mentioned in this section shall refer to a public
Superintendent. – The schools district superintendent shall appoint the division schools district supervisor.
supervisors and school district supervisors as well as all employees in the division,
both teaching and non-teaching personnel, including school heads, except for the SECTION 5.2. The School District. – A school district already existing at the time of
assistant schools division superintendent, subject to the civil service laws, rules and the passage of this Act shall be maintained. However, an additional school district
regulations, and the policies and guidelines to be issued by the Secretary of may be established by the regional director based on criteria set by the Secretary
Education for the purpose. and on the recommendation of the schools division superintendent. For this
purpose, the Secretary of Education shall set standards and formulate criteria as
basis of the Regional Directors of the establishment of an additional school district.20
POLITICAL REV |Admin Law Assign 1|18

On March 13, 2003, the PSDSA, the national organization of about 1,800 public be of no use if the office has no administrative supervision over schools within its
school district supervisors of the DepEd, in behalf of its officers and members, filed respective districts.
the instant petition for prohibition and mandamus, alleging that:
Petitioners assert that under the IRR, the schools district supervisors primarily
I. THE ACT OF THE DEPARTMENT OF EDUCATION IN REMOVING PETITIONERS’ perform staff functions and shall not exercise administrative supervision over school
ADMINISTRATIVE SUPERVISION OVER ELEMENTARY SCHOOLS AND ITS principals, unless specifically authorized by the proper authorities. Thus, under the
PRINCIPALS (SCHOOL HEADS) WITHIN HIS/HER DISTRICT AND CONVERTING IRR, the exercise of administrative supervision over school principals was made
HIS/HER ADMINISTRATIVE FUNCTION TO THAT OF PERFORMING STAFF FUNCTION discretionary and subject to the whims and caprices of "the proper authorities." The
FOR THE DIVISION OFFICE PER SECTION 5.1 RULE V OF THE IMPLEMENTING logical inference of this provision, petitioners aver, is that the administrative
RULES AND REGULATIONS OF REPUBLIC ACT 9155 (DEPED ORDER NO. 1, SERIES supervisory powers can be withdrawn from a district supervisor without any reason
OF 2003) IS A GROSS VIOLATION OF REPUBLIC ACT 9155 – THE GOVERNANCE OF at all, a provision which has no basis in the enabling law.
BASIC EDUCATION ACT OF 2001.
Petitioners further contend that the DepEd has no authority to incorporate its plan
II. THE IMPLEMENTING RULES AND REGULATION OF REPUBLIC ACT 9155 AS of downgrading the position of district supervisor, that is, from being an
PROMULGATED UNDER DEPED ORDER NO. 1, SERIES OF 2003 EXPANDED THE LAW administrator of a particular district office to a position performing a staff function,
AND INCLUDED PROVISIONS WHICH ARE DIAMETRICALLY OPPOSED TO THE to exercise administrative supervision over the school principals only when
LETTER AND SPIRIT OF THE SUBJECT LAW. specifically authorized by proper authorities. Petitioners insist that respondent
Education Secretary was focused on removing the level of management in the
III. THE DOWNGRADING OF SALARY GRADE LEVEL OF THE PUBLIC SCHOOLS district office, such that the IRR empower school heads (principals) to have
DISTRICT SUPERVISOR OR THE NEGLECT OR REFUSAL OF THE DEPARTMENT OF administrative and instructional supervision of school or cluster of schools, while
EDUCATION AND THE DEPARTMENT OF BUDGET AND MANAGEMENT TO UPGRADE supervision of all public and private elementary, secondary, and integrated schools
THE SALARY GRADE LEVEL OF PUBLIC SCHOOLS DISTRICT TO A RESPECTABLE and learning centers was given to the division office.
LEVEL OF SALARY GRADE HIGHER THAN THAT OF THE PRINCIPALS – DESPITE
CLEAR INTENTION OF R.A. 9155 TO RETAIN THE POSITION OF PSDS IN THE Petitioners further insist that respondent Education Secretary failed to consider the
HIERARCHY OF ADMINISTRATIVE MANAGERS AND OFFICERS OF THE DEPARTMENT fact that R.A. No. 9155 strengthened the district office as a mid-level administrative
OF EDUCATION – IS UNCONSTITUTIONAL AND ILLEGAL.21 field office of the DepEd. The law even mandates to allow the district supervisor to
have an office staff for program promotion in the district office. Apart from the
Petitioners maintain that the questioned provisions of the IRR are invalid because current administrative functions inherent in the district office, DECS Service Manual
they "extended or expanded and modified" the provisions of R.A. No. 9155. They 2000 vested additional specific functions to the district offices, to provide
argue that the said law should be read in harmony with other "existing educational professional and instructional advice and support to the school heads and
laws" which it did not specifically repeal, such as Batas Pambansa Blg. 232, teachers/facilitators of schools and learning centers in the district, as well as
otherwise known as "The Education Act of 1982," as amended by R.A. No. 7798; curricula supervision.
R.A. No. 4670, otherwise known as the "Magna Charta for Public School Teachers";
and R.A. No. 7784 captioned "An Act to Strengthen Teacher Education in the Petitioners posit that R.A. No. 9155 did not, in anyway, allow or authorize the
Philippines by Establishing Centers of Excellence, Creating a Teacher Education reorganization of the entire DepEd; it never reduced the position, rank,
Council for the Purpose, Appropriating Funds Therefore, and for Other Purposes." classification, and salary grade level of district supervisors, nor abolished the
district offices which are responsible for the administration and management of
Petitioners assert that under Section 7(D) of R.A. No. 9155, the district offices of elementary schools within its jurisdiction. It did not remove from the district
the DepEd are intended as field offices where the district supervisors can assist the supervisors the function of administrative supervision over schools within their
ESPs and teachers/learning facilitators within their district as experienced respective areas. In fact, petitioners insist, what the law did was to give the district
educational managers. Thus, the district supervisors were not divested of the supervisor additional responsibility of providing professional and instructional
inherent administrative functions to manage and oversee the schools within their advice and support to the school heads and teachers/facilitators of schools and
respective districts, including their subordinates. They emphasize that the law learning centers in the district or cluster thereof.
provides an "office staff for program promotion" in the school districts, which would
POLITICAL REV |Admin Law Assign 1|19

Petitioners point out that under Section 4.3, paragraph (b), Rule IV of the IRR, the On their plea for mandamus, petitioners pray that the Court compel the DepEd and
schools division superintendent was given the power to appoint the division the DBM to upgrade their present salary grade. They claim that the position of an
supervisors and schools district supervisor and other employees subject to civil ESP is already classified as SG 21, which is higher by two grades than that of district
service laws, rules, and regulations, and the policies and guidelines to be issued by supervisors, SG 19. Considering their higher position in the department’s pecking
the Secretary of Education for the purpose. On the other hand, the school division order, vis-à-vis that of the ESPs, petitioners opine that to rectify the present grade-
superintendent shall have disciplinary authority only over the non-teaching level distortion, their salary grade should be upgraded to SG 24.22
personnel under his jurisdiction. Such exercise of disciplinary authority by the
schools division superintendent over the non-teaching personnel shall be subject to For its part, the Office of the Solicitor General (OSG) avers that a perusal of Section
civil service laws, rules, and regulations, and procedures and guidelines to be issued 7(D) of R.A. No. 9155 shows that the district supervisor has limited responsibilities,
by the Secretary of Education relative to this matter. The regional director shall and that the power to exercise administrative supervision over the ESPs is not
continue exercising disciplinary authority over the teaching personnel in so far as covered by any of those responsibilities. The Education Secretary is the disciplining
the latter are covered by specific and exclusive disciplinary provisions under the authority in the DepEd, with the regional directors acting as the disciplining
Magna Carta for Public School Teachers (R.A. 4670). authority in their respective regions.

Petitioners posit that this grant of disciplining authority to the regional director for As to petitioners’ gripe that the IRR deleted district supervisors from among those
teaching personnel who commit violations of laws, rules, and regulations is school heads who should report when "[a]ccepting donations, gifts, bequests, and
definitely not provided for in R.A. No. 9155. The division superintendent was given grants for the purpose of upgrading teachers’/learning facilitators’ competencies,
the power not only to hire and appoint the division supervisors, district supervisors, improving and expanding school facilities, and providing instructional materials and
school heads, or principals as well as employees in the division, both teaching and equipment," the OSG avers that this reportorial function is "directory" and merely
non-teaching positions. However, when it comes to disciplining officers and for "convenience."
teaching personnel who commit infractions or violations of law, rules, and
regulations of the DepEd, the exercise of such disciplining authority is lodged in the Anent petitioners’ grievance on their alleged stagnant salary grade level, the OSG
hands of the regional director. Petitioners point out that the power to hire teachers points out that the same is "already provided for under FY 2003 GAA, [thus],
is in the hands of the division superintendent; principles of administrative rules and petitioners’ complaint against the non-increase of their SG level is already moot
procedure provide that the authority to hire and appoint carries with it the authority and academic." The OSG also emphasizes that the upgrading of the ESP’s salary
to discipline and fire the hired and appointed personnel particularly if the law is grade over the petitioners is not violative of petitioners’ right to equal protection of
silent thereon. Since the division superintendent has the authority to hire teaching the law, since "district supervisors and ESPs are not similarly situated."
personnel within its division, he/she should also take the responsibility of
disciplining erring teachers and employees. If the set-up of placing the power of In reply, petitioners contend that the upgrading of the salary grade level of district
hiring and power to discipline or fire an errant personnel is separated or divided supervisors to SG 21 is an admission by the DepEd and by the DBM of the validity
between two offices of the DepEd, the proliferation of "palakasan" or "bata-bata" of their demand to increase their salary grade to a respectable SG 24.
system will flourish, to the detriment of the public education system and public
service. The petition is partially granted.

Petitioners also point out that under Section 7(E)(11) of R.A. No. 9155, school It must be stressed that the power of administrative officials to promulgate rules in
heads are authorized to accept gifts, donations, bequests, and grants for the the implementation of a statute is necessarily limited to what is provided for in the
purpose of upgrading teacher’s/learning facilitator’s competencies, improving and legislative enactment.23 The implementing rules and regulations of a law cannot
expanding school facilities and providing instructional materials and equipment, extend the law or expand its coverage, as the power to amend or repeal a statute
which, in turn, shall be reported to the appropriate district supervisors and division is vested in the legislature.24 It bears stressing, however, that administrative bodies
superintendents. However, under Section 6.2(11), Rule VI of the IRR, on the are allowed under their power of subordinate legislation to implement the broad
authority, accountability, and responsibility of school heads, district supervisors policies laid down in a statute by "filling in" the details. All that is required is that
were deleted as one of the administrative officers to whom such reporting is to be the regulation be germane to the objectives and purposes of the law; that the
made. Petitioners conclude that to the extent that the division superintendents are regulation does not contradict but conforms with the standards prescribed by
not mandated to report donations and grants to district supervisors, the IRR is void. law.25 Moreover, as a matter of policy, this Court accords great respect to the
decisions and/or actions of administrative authorities not only because of the
POLITICAL REV |Admin Law Assign 1|20

doctrine of separation of powers but also for their presumed knowledgeability and The President:
expertise in the enforcement of laws and regulations entrusted to their
jurisdiction.26 The rationale for this rule relates not only to the emergence of the Why do we not say AND SHALL NOT BE INCLUDED?
multifarious needs of a modern or modernizing society and the establishment of
diverse administrative agencies for addressing and satisfying those needs; it also Senator Cayetano:
relates to the accumulation of experience and growth of specialized capabilities by
the administrative agency charged with implementing a particular statute.27 Yes, better yet, Mr. President. I thank the Chair for that amendment.

We have reviewed the IRR and find that Section 4.3 of Rule IV, and Sections 5.1 The President:
and 5.2 of Rule V are valid. The provisions merely reiterate and implement the
related provisions of R.A. No. 9155. Under the law, a division superintendent has All right. Can we approve that? The sponsor accepts the amendment, I assume.
the authority and responsibility to hire, place, and evaluate all division supervisors
and district supervisors as well as all employees in the division, both teaching and Senator Aquino-Oreta:
non-teaching personnel, including school heads.28 A school head is a person
responsible for the administrative and instructional supervision of the schools or Yes, Mr. President.
cluster of schools.29 The division superintendent, on the other hand, supervises the
operation of all public and private elementary, secondary, and integrated schools The President:
and learning centers.30
Is there any objection from the floor? (Silence) There being none, the amendment
Administrative supervision means "overseeing or the power or authority of an is approved.
officer to see that their subordinate officers perform their duties. If the latter fails
or neglects to fulfill them, the former may take such action or steps as prescribed Senator Cayetano:
by law to make them perform their duties."31
Thank you, Mr. President.
A plain reading of the law will show that the schools district supervisors have no
administrative supervision over the school heads; their responsibility is limited to In line 17, it ends with the conjunction "and." I would like to propose an amendment
those enumerated in Section 7(D) of R.A. No. 9155, to wit: by inserting a new paragraph (b). This is, of course, the duties and responsibilities
of schools district supervisors. It is to SUPERVISE SCHOOL PRINCIPALS IN THE
(1) Providing professional and instructional advice and support to the DISTRICT, because right now, this is exactly their job.
school heads and teachers/facilitators of schools and learning centers in
the district or cluster thereof; Again, the reality is, there are efforts to minimize, if not remove, the principal
function of school supervisors, which is to supervise school principals in the district.
(2) Curricula supervision; and I just want it to be there to ensure that their primary functions remain as such.

(3) Performing such other functions as may be assigned by proper Therefore, what appears as paragraph (b) in line 18 will now be subparagraph (c).
authorities.
The President:
As gleaned from the Senate deliberations on Senate Bill No. 2191, the district
supervisors were divested of any administrative supervision over elementary and What does the sponsor say?
public high schools. The Senate resolved to vest the same in the division
superintendents, and the Lower House concurred. Senator Rene Cayetano proposed Senator Aquino-Oreta:
that the traditional function of the school supervisors of exercising administrative
supervision over the elementary and public high schools be maintained. However, Mr. President, may I just explain. There are two school supervisors. One is for the
Senator Tessie Aquino-Oreta, the Chairperson of the Senate Committee on academic function and the other is for the administrative function. As such, if these
Education and the Sponsor of the Bill, objected to such proposal: two supervisors will dictate to the principals, then our thrust in reducing the level
POLITICAL REV |Admin Law Assign 1|21

of bureaucracy might not be met. Also, the thrust of this governance bill really is But precisely, Mr. President, we are not doing that, we are not taking them out.
to flesh out the importance of the school as the heart of education here. In that What we are saying is for the school supervisor to focus on the curriculum because
heart, we have the teacher, the student, and the school head. in the administration of the affairs of the school, we are saying that the principal
knows best how to administer or how to run the school better. And so, we are
What we are trying to do here is to bring to the forefront the school itself. In fact, saying here that school supervisors will be there contrary to the view of that ADB
right now, there is a move in the DECS to do away with the school supervisor in study. We will maintain them, but the focus of the school supervisors will be on the
charge of administrative and leave that function to the principal. If the principal, curriculum of the schools.
the school head will be dictated upon by these two school supervisors, we might
not be able to achieve what we want to do here – putting to the forefront the school Senator Cayetano:
itself. Meaning, putting to the forefront the school head, the teacher, and the
student. Mr. President, again I thank the lady senator. But again let us look at who
supervisors of schools are. Supervisors of schools once upon a time were all school
Senator Cayetano: principals. They rose from the ranks, that is why they are fully aware of the
administrative as well as the instructional capability of the principals now who are
Mr. President, I would like to thank the sponsor for that enlightenment. That is under them. To remove their right to supervise, – now it is the ADB, I am correct,
precisely my point. the lady senator is correct because as I said I was not sure – to remove this
traditional function would really render the supervisors practically without anything
Not too long ago, I was a speaker before the school supervisors all over the land. to do. That is why they are now being justified that henceforth there will be no
One of the points that they complained about was, in most cases, their job to principals that will be promoted as school supervisors because when the school
supervise school principals is now being removed or have been removed simply supervisors reach the age of retirement and retire, no principals shall be promoted
because – and I may be inaccurate here – the Japanese government – I know it is to that level. But these school supervisors now, Mr. President, were once upon a
a foreign government that funded a study of the organizational setup of the DECS time in their professional lives principals, and they know best how the schools
– has recommended the abolition of school supervisors. should be run – administratively and instructionally. That is the reason for that, Mr.
President.
This is the reason this representation would like to ensure that the traditional
function of the school supervisors, among which is to supervise school principals, The President:
remain as such. What is good for the Japanese education is not necessarily good
for the Philippines. This representation knows that this is precisely one of the What does the sponsor say?
complaints of the school supervisors.
Senator Cayetano:
The lady sponsor admitted that, indeed, there is an effort to phase out the school
supervisors. That is precisely my point, Mr. President. I do not want the school So, may I ask the sponsor to accept this, Mr. President.
supervisors to be phased out simply because a foreign government which funded
the study of our education has suggested it. Senator Aquino-Oreta:

The President: Mr. President, what was the amendment?

What does the sponsor say? Senator Cayetano:

Senator Aquino-Oreta: To insert a new paragraph, paragraph (b) in line 18, which states: SUPERVISE
SCHOOL PRINCIPALS IN THE DISTRICT.
Mr. President, actually, it is not Japanese. It is an ADB proposal to the DECS. The
DECS had a study made on how to improve the management order of the DECS. The President:
That was one of the proposals. They gave three proposals. One of them was to take
out the school supervisors.
POLITICAL REV |Admin Law Assign 1|22

May I suggest, THE SUPERVISION OF SCHOOL PRINCIPALS IN THE DISTRICT, SUSPENSION OF CONSIDERATION OF S. NO. 2191
because –
Senator Tatad:
Senator Cayetano:
Mr. President, we are still trying to find a way out of these conflicting points of view
Yes, Mr. President. on the role of the supervisor. To allow the parties to have a little more time to work
on this, I move that we suspend consideration of Senate Bill No.
The President: 2191. (Underscoring supplied)32

– the antecedent for that is, "The schools district supervisor shall be responsible When the session resumed, Senator Cayetano no longer pursued his proposed
for." amendment, and moved instead that the same be amended to read "Curricula
Supervision." The Senate approved the proposal of the Senator:
Senator Cayetano:
The President:
That is right, Mr. President. Supervision, yes.
The session is resumed. Senator Cayetano is recognized.
The President:
CAYETANO AMENDMENT
What does the sponsor say?
Senator Cayetano:
Senator Aquino-Oreta:
Thank you, Mr. President.
Mr. President, may I have one minute?
With the permission of the lady senator, after consulting her and the Majority
SUSPENSION OF SESSION Leader, I would like to propose an amendment by rewording the original
amendment I was proposing last night. The reworded proposed amendment would
Senator Tatad: be like this: CURRICULA SUPERVISION.

Mr. President, I move that we suspend the session for one minute. The President:

The President: That would be on what page?

Is there any objection? (Silence) There being none, the session is suspended for Senator Cayetano:
one minute.
That would be on page 10, line 17, as a new paragraph (b).
It was 5:33 p.m.
The President:
RESUMPTION OF SESSION
And how will it read?
At 5:43 p.m., the session was resumed.
Senator Cayetano:
The President:
CURRICULA SUPERVISION.
The session is resumed.
The President:
POLITICAL REV |Admin Law Assign 1|23

Just that? transfer to vacant division supervisor positions, provided they meet the qualification
standards for such positions.36 For his part, in his DECS Order No. 22, Series of
Senator Cayetano: 1996, DECS Secretary Ricardo T. Gloria restored the district supervisor positions
but only on a selective basis and subject to the following guidelines:
Just that, Mr. President.
a) Schools superintendents, with the concurrence/approval of their
Senator Tatad: regional directors, may have the option to restore the position in selected
districts after a careful evaluation of need. For this purpose, the number of
Put a semicolon (;). schools and their geographical location and distance for effective
monitoring, the availability of regular transportation, urban-rural setting,
Senator Cayetano: etc., should be considered in the decision.

And because of that, line 18 which is paragraph (b), should now be paragraph (c). b) The role of the district supervisor as an instructional leader and resource
for teachers, rather than merely as an administrative supervisor, should
The President: be emphasized in their functions and duties.

What does the sponsor say? c) In the event of restoration and appointment of the position in a particular
district, the school superintendent shall ensure that the system of field
Senator Aquino-Oreta: supervision previous to the issuance of DECS Orders No. 110, s. 1991 and
No. 41, s. 1994 shall, likewise, be restored. Correspondingly, the
The amendment is accepted, Mr. President. (Underscoring supplied)33 designation of coordinating principals in affected districts shall be
withdrawn.
Thus, under R.A. No. 9155, administrative supervision over school heads is not one
of those responsibilities conferred on district supervisors. d) Should a division office opt not to restore some or all district supervisor
positions, the funds for such positions may be used to create new positions
It is a settled rule of statutory construction that the express mention of one person, or upgrade existing positions, subject to the approval of the Department
thing, act, or consequence excludes all others. This rule is expressed in the familiar of Budget and Management.
maxim expressio unius est exclusio alterius. Where a statute, by its terms, is
expressly limited to certain matters, it may not, by interpretation or construction, e) Considering that a number of vacated district supervisor positions in
be extended to others. The rule proceeds from the premise that the legislature some divisions may have been converted to other positions and/or
would not have made specified enumerations in a statute had the intention been otherwise phased out since 1991, appointments of district supervisors shall
not to restrict its meaning and to confine its terms to those expressly mentioned.34 be issued by regional directors only upon verification from the Department
of Budget and Management that the said position may be filled.
It is not surprising that Senator Aquino-Oreta maintained her position that district
supervisors should not have administrative control or even supervision over ESPs It is enjoined that regional directors and schools superintendents shall exert special
and SSPs. As early as 1990, the DECS had adopted the policy that, effective January effort to ensure that the implementation of this Order shall be harmonious and
1, 1991, the positions of district supervisors and division supervisors would be conducive to field supervision.37
gradually phased out by not filling-up these positions as they become vacant.35 On
September 17, 1991, then DECS Secretary Isidro Cariño issued DECS Order No. Under DECS Order No. 36, Series of 1998 issued by DECS Secretary Erlinda C.
110, Series of 1991, declaring that, to foster better considerations and articulation Pefianco, the positions of district supervisors were restored to their original status
of progress in the elementary level, all elementary school principals shall report as a supervisory level in the DECS administrative hierarchy subject to the following
directly to the school division superintendents. In his Order dated June 22, 1994, guidelines:
then DECS Secretary Armand V. Fabella declared that DECS Order No. 110 shall
remain in effect, with the recommendation that, in order to facilitate the phase-out
of district supervisor positions, incumbent district supervisors were encouraged to
POLITICAL REV |Admin Law Assign 1|24

1.1 The positions of Education and District Supervisors are hereby restored to their Section 7 of RA 9155, on School District Level, pertinently provides that "a school
original status as a supervisory level in the DECS administrative hierarchy, subject district shall have a school district supervisor and an office staff for program
to the following guidelines: promotion," and that the schools district supervisor shall be responsible for: (1)
"(p)roviding professional and instructional advice and support to the school heads
1.1.1 The functions of a district supervisor as an instructional leader and and teachers/facilitators of schools and learning centers in the district [or] cluster
resource person for teachers should be emphasized. thereof;" (2) "(c)urricula supervision;" and, (3) "(p)erforming such other functions
as may be assigned by the proper authorities."
In the event of restoration and appointment of public schools district supervisor,
the designation of the coordinating principal shall be withdrawn. A perusal of Section 7 shows that the District Supervisor has limited responsibilities,
and that the power to exercise administrative supervision over the ESPs is not
Appointment of district supervisors shall be issued by regional directors only upon covered by responsibility nos. 1 and 2. Neither is that power covered by the
verification from the Department of Budget and Management that the positions still directive that the District Supervisor shall have an office staff for program
exist since a number of vacated district supervisor positions in some divisions may promotion. The only logical conclusion, therefore, that can be derived from the
have been converted to other positions and/or otherwise phased out since 1991.38 aforesaid enumeration of responsibilities is that the District Supervisor may only
exercise administrative supervision over ESPs when such function is assigned by
However, as already stated, the Senate resolved to maintain the positions of district proper authorities. And, since the DepEd Secretary specifically declared through
supervisors but limited their responsibilities only to those enumerated in Section the IRR of RA 9155, that the District Supervisor shall not exercise administrative
7(D) of R.A. No. 9155 to conform to the basic thrust and objectives of the law. Far supervision over the ESPs, unless otherwise authorized, petitioners cannot
from strengthening the office of the district supervisors as a mid-head field office complain against the said declaration. On this score, it is settled that the intent of
of the DepEd, the law limited the authority and responsibility attached to such the statute is the law (Philippine National Bank v. Office of the President, 252 SCRA
position. 5 [1996]). In the absence of legislative intent to the contrary, words and phrases
used in a statute should be given their plain, ordinary and common usage meaning
While it is true that the district supervisor is given a support staff for program (Mustang Lumber, Inc. v. Court of Appeals, 257 SCRA 430 [1996]).
promotion, it cannot thereby be implied that he/she likewise has administrative
supervision over ESPs and SSPs. Such a construction has no basis in law and in Needless to say, Section 7, on Division Level, further provides that the School
fact. Indeed, such a construction of the statute defeats the very purpose of the law. Division Superintendent shall have authority, accountability and responsibility for,
among others, "(s)upervising the operation of all public and private elementary,
It is a basic precept that the intent of the legislature is the controlling factor in the secondary and integrated schools, and learning centers." To claim, therefore, that
interpretation of the statute. The particular words, clauses, and phrases should not the District Supervisor has administrative supervision over the ESPs would also
be studied as detached and isolated expression, but the whole and every part of violate the above-quoted provision.41
the statute must be considered in fixing the meaning of any of its parts and in order
to produce a harmonious whole.39 The Court likewise declares that the last paragraph of Section 4.3 of the IRR, stating
that the regional director shall continue exercising disciplinary authority over the
Besides, Congress enumerated the duties and responsibilities of a district teaching personnel insofar as the latter are covered by specific and exclusive
supervisor. Congress would not have made specific enumerations in a statute if it disciplinary provisions under R.A. No. 4670 ("Magna Carta for Public School
had the intention not to restrict or limit its meaning and confine its terms only to Teachers") does not contravene R.A. No. 9155. Indeed, the IRR merely reiterates
those expressly enumerated. Courts may not, in the guise of interpretation, enlarge the DECS Rules of Procedure, DECS Order No. 33, issued on March 30, 1999 by the
the scope of a statute and include situations not provided nor intended by DepEd Secretary, and R.A. No. 4670 which was approved on June 18, 1966, and
Congress.40 pursuant to Section 7, Chapter II, Book IV of the 1987 Administrative Code, which
provides that the DepEd Secretary is empowered to
The submission of the OSG, that the schools district supervisors have the
administrative supervision over school heads, is more in accord with the law, to a. Promulgate rules and regulations necessary to carry out department
wit: objectives, policies, functions, plans, programs, and projects; and
POLITICAL REV |Admin Law Assign 1|25

b. Promulgate administrative issuances necessary for the efficient Sec. 9. Administrative Charges. Administrative charges against a teacher shall be
administration of the offices under the Secretary and for execution of the heard initially by a committee composed of the corresponding School
laws relative thereto. Superintendent of the Division or a duly authorized representative who should, at
least, have the rank of a division supervisor, where the teacher belongs, as
Additionally, the IRR was issued by the DepEd Secretary pursuant to Section chairman, a representative of the local or, in its absence, any existing provincial or
7(A)(1) of R.A. No. 9155, which mandates that the Secretary formulate national national teacher’s organization and a supervisor of the Division, the last two to be
educational policies and enhance the employment status, professional competence, designated by the Director of Public Schools. The committee shall submit its findings
welfare, and working conditions of all the DepEd personnel.42 and recommendations to the Director of Public Schools within thirty days from the
termination of the hearings: Provided, however, That where the school
We agree that R.A. No. 9155 does not provide who has disciplinary authority over superintendent is the complainant or an interested party, all the members of the
the teaching personnel of the DepEd. However, under Section 3, Chapter III of committee shall be appointed by the Secretary of Education.
DECS Order No. 33, Series of 1999, otherwise known as the 1999 DECS Rules of
Procedure, the disciplining authority in the DECS is the DepEd Secretary, with the Anent the issue on reporting of acceptance of donations, Section 7(E)(11) of R.A.
regional directors acting as such in their respective regions except those appointed No. 9155 provides:
by the President.43
(11) Accepting donations, gifts, bequests, and grants for the purpose of upgrading
The officers and employees referred to in the Rules of Procedure include teachers teachers’/learning facilitators’ competencies, improving and expanding school
who, under R.A. No. 4670, shall mean: facilities, and providing instructional materials and equipment. Such donations or
grants must be reported to the appropriate district supervisors and division
x x x all persons engaged in classroom teaching, in any level of instruction, on full- superintendents. (emphasis supplied)
time basis, including guidance counselors, school librarians, industrial arts, or
vocational instructors, and all other persons performing supervisory and/or However, Section 6.2(11), Rule VI of the IRR provides that:
administrative functions in all schools, colleges and universities operated by the
Government or its political subdivisions; but shall not include school nurses, school (11) Accepting donations, gifts, bequests, and grants in accordance with existing
physicians, school dentists, and other school employees. laws and policy of the Department for the purpose of upgrading teachers’/learning
facilitators’ competencies, improving and expanding school facilities, and providing
A division superintendent of schools is not a disciplining authority over teachers, instructional materials and equipment. Such donations or grants must be reported
whether under R.A. No. 4670 or under the DECS Rules of Procedure. In fact, under to the division superintendents. (emphasis supplied)
Section 2, Chapter VII of such Rules of Procedure, a division superintendent is a
chairperson of the investigating committee over formal complaints filed against We agree with petitioners’ contention that, under the law, donations and grants
such teachers: must be reported to the appropriate district supervisors and not only to the division
superintendents. The use in the law of the word "must" is an expression of the
a) When the respondent is an elementary or secondary school teacher, head mandatory nature of the reporting of donations and grants to district supervisors.
teacher, principal, district supervisor/chair/coordinator or Education Supervisor I – The reason for the provision is that such grants and donations which are intended
to upgrade teachings/learning facilitators’ competencies, improve and expand
(1) The schools division superintendent or his or her duly authorized school facilities, and provide instructional materials and equipment will assist the
representative, as chairperson; school district supervisors in the performance of their duties and responsibilities
under Section 7(D) of R.A. No. 9155, and submit appropriate recommendations to
(2) The duly authorized representative of the school, district, or division the proper administrative officers.
teacher’s organization, as member; and
On petitioner’s plaint of the failure of respondents to upgrade their salary grade
(3) The division supervisor for elementary or secondary education where level to at most SG 21, and for the issuance of the writ of mandamus mandating
the respondent belongs, as member. respondents to increase their salary grade from SG 19 to 24, the same is
premature.
The foregoing rule is based on Section 9 of R.A. No. 4670 which reads:
POLITICAL REV |Admin Law Assign 1|26

There is no showing in the petition that, before filing their petition, petitioners a. The Teachers’ Preparation Pay Schedule shall be prepared by the
sought an adjustment of level of their salary grade from SG 19 to SG 21 before Commission in consultation with the Department of Education and Culture.
respondents or the Civil Service Commission. Section 17 of Presidential Decree No. Under this system, the teacher's academic or educational preparation,
985, as amended by Section 14 of R.A. No. 6758, otherwise known as the Salary teaching experience in both private and public schools, and extra-curricular
Standardization Law, provides: activities for professional growth, shall be considered in pursuance of the
principle of 'equal pay for equal training and experience.'
Sec. 17. Powers and Functions. – The Budget Commission (now Department of
Budget and Management), principally through the OCPC (now CPCB, Compensation xxxx
and Position Classification Board) shall, in addition to those provided under other
Sections of this Decree, have the following powers and functions: d. The Budget Commission, in coordination and consultation with the
Department of Education and Culture and the Civil Service Commission
a. Administer the compensation and position classification system established may, when future needs require, modify, change or otherwise improve on
herein and revise it as necessary; the salary system herein established for the teaching and closely related
occupations, any change that may be made as provided herein shall
xxxx become part of the implementing rules of this Decree to be issued by the
Budget Commission upon prior approval by the President.
f. Certify classification actions and changes in class or grade of positions whenever
the facts warrant, such certification to be binding on administrative, certifying, Moreover, the issue of whether or not respondents should be compelled to adjust
payroll, disbursing, accounting and auditing officers of the national government and upwards the salary grade of petitioners to SG 21 has become moot and academic,
government-owned or controlled corporations and financial institutions. because, on November 3, 2003, the DepEd and the DBM issued Joint Circular No.
1, Series of 2003 containing the guidelines in the implementation of the Salary
Sections 10 and 11 of R.A. No. 9155 provide: Upgrading for District and Education Supervisors, to wit:

SEC. 10. The Secretary of Education and the Secretary of Budget and Management 4.0 GUIDELINES
shall, within ninety (90) days from the approval of this Act, jointly promulgate the
guidelines on the allocation, distribution, and utilization of resources provided by 4.1 To maintain the previous salary grade relationships under RA No. 6758
the national government for the field offices, taking into consideration the among the PSDS and ES I, on the one hand, and Elementary School
uniqueness of the working conditions of the teaching service. Principal (ESP) IV and Secondary School Principal (SSP) II, on the other
hand, and to preserve the consistency in the salary grade relationships of
The Secretary of the Department of Education shall ensure that resources said positions, the following are hereby authorized:
appropriated for the field offices are adequate and that resources for school
personnel, school desks, and textbooks and other instructional materials intended 4.1.1 Upgrading of the PSDS and ES I positions from SG-19 to SG-
are allocated directly and released immediately by the Department of Budget and 20 in July 2003 and to SG-21 in July 2004;
Management to said offices.
4.1.2 Upgrading of the ES II positions by two (2) salary grades
SEC. 11. The Secretary of the Department of Education, subject to civil service laws from SG-20 to SG-21 in July 2003 and to SG-22 in July 2004;
and regulations, shall issue appropriate personnel policy rules and regulations that
will best meet the requirements of the teaching profession taking into consideration 4.1.3 A one-step salary adjustment to incumbents of ES III
the uniqueness of the working conditions of the teaching service. positions starting July 2003 and another one-step salary
adjustment starting July 2004;
And insofar as the salary system for teaching positions is concerned, Section 14
provides: 4.1.4 A one-step salary adjustment to incumbents of CES positions
starting July 2003 and another one-step salary adjustment
SEC. 14. The Salary System for Teaching Position. – The salary grade of a teacher starting July 2004.
shall be determined in accordance with the following:
POLITICAL REV |Admin Law Assign 1|27

4.2 Attached herewith is Annex A containing the summary of the guidelines 8.0 CONTRIBUTIONS
for the salary upgrading of positions authorized herein.
The salary adjustments authorized herein are subject to the mandatory
5.0 SALARY RULES requirements for life and retirement premiums, and health insurance premiums.

5.1 For purposes of the salary upgrading herein authorized, the basic salary 9.0 SAVING CLAUSE
of the employee concerned shall be adjusted as follows:
Conflicts arising from the implementation of the provisions of this Circular shall be
5.1.1 Effective July 1, 2003 – at the same salary step of his resolved by the Department of Education, upon prior consultation with the
assigned salary grade as of June 30, 2003 (Illustrative Example A) Department of Budget and Management.
adopting the Salary Schedule prescribed under National Budget
Circular (NBC) No. 474 (Annex B); 10.0 EFFECTIVITY

5.1.2 Effective July 1, 2004 – at the same salary step of his This Circular Letter shall take effect on July 1, 2003.
assigned salary grade as of June 30, 2004 (Illustrative Example A)
adopting the Salary Schedule prescribed under National Budget IN VIEW OF ALL THE FOREGOING, the petition for prohibition is PARTIALLY
Circular (NBC) No. 474 (Annex B). GRANTED. Joint Circular No. 1, Series of 2003 is declared valid, except Section
6.2(11), Rule VI thereof which provides that "donations or grants shall be reported
5.2 The transition allowance as defined in 3.2 being received by the PSDS only to the division superintendents." Such donations or grants must also be
and ES, if any, shall be considered as advance entitlement of the salary reported to the appropriate school district supervisors, as mandated by Republic
increase herein authorized. (Illustrative Examples B and C) Act No. 9155. Petitioners’ prayer for the issuance of a writ of mandamus is DENIED
for lack of merit. No costs.
5.3 No step adjustment shall be granted to incumbents of positions whose
salary already falls at or exceeds the maximum step (eighth step) of the SO ORDERED.
salary grade allocation of their positions. (Illustrative Example D)

5.4 The herein salary increases shall be effected through the issuance of a
Notice of Salary Adjustment (NOSA) by the duly authorized official. (Annex
C)

6.0 FUNDING SOURCE

The amounts necessary to implement the salary adjustments authorized herein


shall be charged against the Nationwide lump sum appropriation for the purpose
amounting to fifty million pesos (P50,000,000) in the DepEd’s budget in RA 9206,
the CY 2003 General Appropriations Act. For CY 2004, the same shall be charged
against the lump sum appropriation for the purpose that may be included in the
2004 budget.

7.0 POST-AUDIT

Any salary adjustment paid under this Circular shall be subject to post-audit by the
DBM – ROs concerned. Any payments thereof which are not in accordance herewith
shall be adjusted accordingly.
POLITICAL REV |Admin Law Assign 1|28

6. G.R. No. 92646-47 October 4, 1991 or from the President of the Philippines; moreover, conditions (a), (b) and
(c) stated in the immediately preceding clause did not then exist;
AUGUSTO TOLEDO, petitioner,
vs. WHEREAS, the appointment then of Atty. Toledo was made in violation of
CIVIL SERVICE COMMISSION and COMMISSION ON law and pursuant to Section 7, Rule III of the Civil Service Rules on
ELECTIONS, respondents. Personnel Action, the appointment was void from the beginning.

PARAS, J.: NOW, THEREFORE, be it resolved, as it is hereby resolved, to DECLARE as


VOID from the beginning the appointment of Atty. Augusto Toledo as
Petitioner Atty. Augusto Toledo was appointed by then Comelec Chairman Ramon Manager of the Education and Information Department of this Commission.
Felipe as Manager of the Education and Information Department of the Comelec, (pp. 49-50, Rollo)
on May 21, 1986. At the time of his appointment, petitioner, having been born on
July 8, 1927 was already more than fifty-seven (57) years old. It was the first time Petitioner appealed the foregoing Comelec Resolution No. 2066 to public
petitioner joined the government service as he was then engaged in active private respondent CSC on February 4, 1989.
practice prior to said appointment.
On July 12, 1989, public respondent CSC promulgated Resolution No. 89-468 which
Petitioner's appointment papers, particularly Civil Service Form No. 333 and his disposed of the appeal, thus:
oath of office were endorsed by the Comelec to the Civil Service Commission (CSC,
for brevity) on June 11, 1986, for approval and attestation. However, no prior WHEREFORE, foregoing premises considered, the Commission resolved to
request for exemption from the provisions of Section 22, Rule III of the Civil Service declare, as it hereby declares the appointment of Augusto V. Toledo as
Rules on Personnel Action and Policies (CSRPAP, for brevity) was secured. Said Manager, Information and Education Department, Commission on
provision prohibits the appointment of persons 57 years old or above into the Elections, there being no basis in law, merely voidable and not void ab
government service without prior approval by the Civil Service Commission (CSC initio. Hence, Atty. Toledo is considered a de facto officer from the time he
Memorandum Circular No. 5, Series of 1983). assumed office on June 16, 1986, until and up to the promulgation of
COMELEC Resolution No. 2066 on January 29, 1989. (pp. 35-36, Rollo)
Petitioner officially reported for work and assumed the functions of his office on
June 16, 1986. Unable to obtain a reconsideration from the aforesaid Resolution, petitioner filed
the present petition for certiorari.
On January 29, 1989, public respondent Comelec, upon discovery of the lack of
authority required under Section 22, Rule III of the CSRPAP, and CSC Memorandum It is first contended by petitioner that CSC Resolution No. 89-468 is without legal
Circular No. 5, Series of 1983 issued Resolution No. 2066, the pertinent portion of basis because the CSRPAP is invalid and unenforceable for not having been
which is hereinbelow quoted, to wit: published in the Official Gazette or in any newspaper of general circulation as
required under Section 9(b) of P.D. 807. This being the case, petitioner argues that
WHEREAS, for the validity then of the appointment of Atty. Toledo as the requirement of prior CSC authority to appoint persons 57 years or older under
Manager of the Education and Information Department it was necessary Section 22, Rule III of the CSRPAP has not "become effective" and cannot be
that not only must prior authority from the Civil Service Commission be invoked against him.
obtained considering that he was more than fifty-seven (57) years old at
the time, it must as well be shown that (a) the exigencies of the service so It will be recalled that the Civil Service Act of 1959 (Republic Act No. 2260) took
required, (b) Atty. Toledo possesses special qualification not possessed by effect on June 19, 1959. That act, among other things, established a Civil Service
other officers or employees in the Commission, and (c) the vacancy cannot Commission one of the functions of which was, "with the approval by the President,
be filled by promotion of qualified officers or employees in the Commission; to prescribe, amend, and enforce suitable rules and regulations for carrying into
effect the provisions of ... the Civil Service Law," said rules "to become effective
WHEREAS, there is nothing in the 120 File of Atty. Toledo that indicates thirty days after publication in the Official Gazette" [Sec. 16 (e)].
that such authority was even obtained from the Civil Service Commission
POLITICAL REV |Admin Law Assign 1|29

The Commission subsequently adopted and promulgated rules intended to carry Omitted, it will be observed, was reference to the "President of the Senate" and the
the law into effect, known as the Revised Civil Service Rules. Those rules were "Speaker of the House of Representatives," both of whom were expressly
published in the supplement to Vol. 58, No. 49 of the Official Gazette, dated mentioned in the counterpart provision in the former rules (Section 5, Rule
December 3, 1962. VI, supra).

Section 5, Rule VI of those Revised Civil Service Rules provided that: Noteworthy, too, is that there is no provision at all in PD 807 dealing in any manner
with the appointment, reinstatement or re-employment in the Government service
SEC. 5. No person shall be appointed or reinstated in the service if he is of any person already 57 years or any particular age, for that matter. Again, the
already 57 years old, unless the President of the Philippines, President of provision regarding persons 57 years of age was purely a creation of the
the Senate, Speaker of the House of Representatives, or the Chief Justice Commission, having no reference to any provision in the decree intended to be
of the Supreme Court, as the case may be, determines that he possesses implemented.
special qualifications and his services are needed.
It was this provision of the CSRPAP (Sec. 22, Rule III) which was applied to Toledo.
It is worthy of note, however, that the statute itself (RA 2260) contained no According to the CSC, since prior authority for Toledo's appointment had never
provision prohibiting appointment or reinstatement in the Government service of been obtained — indeed, it would appear that the appointment papers were not
any person who was already 57 years old, or otherwise requiring that some transmitted by the COMELEC to the CSC until February, 1989 at which time Toledo's
limitation as regards to age be placed on employment in the Government service. appointment was "approved as permanent" by the Executive Director of said CSC—
This prohibition was purely a creation of the Civil Service Commission. the appointment had to be struck down.

On October 6, 1975, pursuant to the 1973 Constitution, Presidential Decree No. Now, these rules and regulations (CSRPAP) were never published either in the
807 was issued by President Marcos, establishing "an independent Civil Service Official Gazette or any newspaper of general circulation, at least as of the time that
Commission." The decree, known as the "Civil Service Decree of the Philippines," Section 22, Rule III thereof was applied to Toledo to the latter's prejudice. As much
repealed or accordingly modified all laws, rules, and regulations or parts thereof was admitted by the Chairman of the Commission, Hon. Patricia A. Sto. Tomas in
inconsistent" with its provisions (Sec. 59), although it declared that "the former a letter written by her to Toledo dated February 2, 1989. In that letter, the
Civil Service Commission created under Republic Act No. 2260, as amended, and Chairman stated that (a) the Commission had "no record of the publication of said
as organized under the Integrated Reorganization Plan may serve as the nucleus Rules ("Rules on Personnel Actions and Policies") in newspapers of general
of the Civil Service Commission" (Fourth Whereas Clause, Preamble). Like RA 2260 circulation" although said Rules were "published and distributed by the National
which it superseded, PD 807 empowered the Commission to "prescribe, amend, Media Production Center in 1975," and that (b) only "the Rule on Promotion
and enforce suitable rules and regulations for carrying into effect the provisions of embodied in CSC Resolution No. 83-343 repealing Rule V of the said Rules was
the Decree," and also provided that said "rules and regulations shall become published on August 15, 1983 in Volume 79 No. 33 of the Official Gazette" (Annex
effective thirty (30) days after publication in the Official Gazette or in any I, petition). The lack of publication is also attested by the Director of the National
newspaper of general circulation." Printing Office who, in a Certification issued by him on January 30, 1989, stated
that "the RULES ON PERSONNEL ACTIONS AND POLICIES' promulgated on
The new Civil Service Commission adopted "rules and regulations for carrying into November 20, 1975 by the Civil Service Commission implementing Presidential
effect the provisions" of the Civil Service Decree on November 20, 1983. The rules Decree No. 807 was not submitted to this office for publication" (Annex J, petition).
were named, "Civil Service Rules on Personnel Actions and Policies" (CSRPAP).
Section 22, Rule III of the CSRPAP is substantially the same as Section 5, Rule VI The Revised Civil Service Rules implementing R.A. No. 2260 cannot be considered
of the quondam "Revised Civil Service Rules" and it reads as follows: valid and effective after RA 2260 was repealed and superseded by PD 807. PD 807
was obviously intended to take the place of RA 2260. In all matters dealt with by
SEC. 22. No person shall be appointed, reinstated, or re-employed in the both laws, the provisions of PD 807 were obviously intended to be controlling. So,
service if he is already 57 years old, unless the President, or the Chief also, the rules promulgated by the Civil Service Commission to carry the provisions
Justice of the Supreme Court, in the case of employees in the judiciary, of PD 807 into effect were meant to supersede or take the place of the rules
determines that he possesses special qualifications urgently needed by the implementing RA 2260. In other words, PD 807 and the CSRPAP were intended to
hiring agency. make RA 2260 and its implementing rules functus officio, render them without force
POLITICAL REV |Admin Law Assign 1|30

and effect except only as regards any provision, if at all, not dealt with by PD 807 Apart from this, the CSRPAP cannot be considered effective as of the time of the
or the CSRPAP. application to Toledo of a provision thereof, for the reason that said rules were
never published, as is admitted on all sides. The argument that the CSRPAP need
Now, it may reasonably be assumed that the law-making authority at the time, the not be published, because they were "a mere reiteration of existing law" and had
President, was aware of the provision on 57-year old persons in the Revised Civil been "circularized," flies in the teeth of the explicit and categorical requirement of
Service Rules promulgated under RA 2260. Yet when he promulgated PD 807 the PD 807 that rules and regulations for carrying into effect the provisions of the
President did not see fit to incorporate therein any provision regarding 57-year old Decree shall become effective thirty (30) days after publication in the Official
persons or for that matter, to prescribe any age beyond which persons could Gazette or in any newspaper of general circulation. Moreover, the CSRPAP cannot
become ineligible for appointment, reintatement or re-employment. This surely is properly be considered a mere reiteration of existing law, for as already discussed,
an indication of an intention not to continue the provision in effect. the implementing rule governing 57-year old persons is invalid and cannot in any
sense be considered "existing law."
In any event, the provision on 57-year old persons in the Revised Civil Service
Rules (under said RA 2260) cannot be accorded validity. As already pointed out, it Assuming without conceding that the rule regarding employment of 57-year old
is entirely a creation of the Civil Service Commission, having no basis in the law persons is valid and enforceable, it can only apply, according to its express terms,
itself which it was meant to implement. It cannot be related to or connected with to employees under the supervision of the Chief Justice of the Supreme Court, or
any specific provision of the law which it is meant to carry into effect, such as a of the President of the Philippines, these two being the only officials mentioned as
requirement, for instance, that age should be reckoned as a factor in the having to give consent to the employment of said persons. It cannot be construed
employment or reinstatement of an individual, or a direction that there be a as applying to employees over whom neither the President nor the Chief Justice
determination of some point in a person's life at which he becomes unemployable, exercises supervision, such as the Senate or the House of Representatives, or the
or employable only under specific conditions. It was therefore an unauthorized act COMELEC or other Constitutional Commissions.
of legislation on the part of the Civil Service Commission. It cannot be justified as
a valid exercise of its function of promulgating rules and regulations for that One last word. There is absolutely no question about the fact that the only reason
function, to repeat, may legitimately be exercised only for the purpose of carrying for Toledo's separation from the service was the fact that he was already more than
the provisions of the law into effect; and since there is no prohibition or restriction 57 years old when he was invited to work in the COMELEC by its former Chairman,
on the employment of 57-year old persons in the statute—or any provision but through no fault of his own, not all the conditions for his employment appear
respecting age as a factor in employment—there was nothing to carry into effect to have been satisfied. There is no question that it was not Toledo's fault that his
through an implementing rule on the matter. papers were tardily submitted to the Civil Service Commission and approval of his
appointment was made only by the Executive Director of the Commission and not
The power vested in the Civil Service Commission was to implement the law or put by the Chairman thereof (to whom the function of the President of approving
it into effect, not to add to it; to carry the law into effect or execution, not to supply appointments like those of Toledo had been delegated under LOI 47, CSC Memo
perceived omissions in it. "By its administrative regulations, of course, the law itself Circular No. 5, Series of 1983). There is no question, too, that he was actively
can not be extended; said regulations 'cannot amend an act of Congress.' " (Teoxon engaged in law practice when taken into the COMELEC. There is absolutely no
v. Members of the Board of Administrators, Philippine Veterans Administration, 33 question about the fact that he was otherwise a competent and efficient officer of
SCRA 585, 589 [1970], citing Santos v. Estenzo, 109 Phil. 419 [1960]; see also, the COMELEC and had not given the remotest cause for dismissal. These are
Animos v. Philippine Veterans Affairs Office, 174 SCRA 214, 223-224 [1989] in turn equitable considerations proscribing application to him of the provision in question,
citing Teoxon). assuming its validity, or impelling at least a restrictive application thereof so that it
may not work to his prejudice.
The considerations just expounded also conduce to the conclusion of the invalidity
of Section 22, Rule III of the CSRPAP. The enactment of said section, relative to Premises considered, the petition is hereby GRANTED.
57-year old persons, was also an act of supererogation on the part of the Civil
Service Commission since the rule has no relation to or connection with any SO ORDERED.
provision of the law supposed to be carried into effect. The section was an addition
to or extension of the law, not merely a mode of carrying it into effect.
POLITICAL REV |Admin Law Assign 1|31

7. G.R. No. L-32166 October 18, 1977 Section 76 of the same law punishes any person who uses an obnoxious or
poisonous substance in fishing with a fine of not more than five hundred pesos nor
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, more than five thousand, and by imprisonment for not less than six months nor
vs. more than five years.
HON. MAXIMO A. MACEREN CFI, Sta. Cruz, Laguna, JOSE BUENAVENTURA,
GODOFREDO REYES, BENJAMIN REYES, NAZARIO AQUINO and CARLO It is noteworthy that the Fisheries Law does not expressly punish .electro fishing."
DEL ROSARIO, accused-appellees. Notwithstanding the silence of the law, the Secretary of Agriculture and Natural
Resources, upon the recommendation of the Commissioner of Fisheries,
AQUINO, J.: promulgated Fisheries Administrative Order No. 84 (62 O.G. 1224), prohibiting
electro fishing in all Philippine waters. The order is quoted below: ñé+.£ªwph!1
This is a case involving the validity of a 1967 regulation, penalizing electro fishing
in fresh water fisheries, promulgated by the Secretary of Agriculture and Natural SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS OF
Resources and the Commissioner of Fisheries under the old Fisheries Law and the THE PHILIPPINES.
law creating the Fisheries Commission.
Pursuant to Section 4 of Act No. 4003, as amended, and Section 4 of R.A. No. 3512,
On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario the following rules and regulations regarding the prohibition of electro fishing in all
Aquino and Carlito del Rosario were charged by a Constabulary investigator in the waters of the Philippines are promulgated for the information and guidance of all
municipal court of Sta. Cruz, Laguna with having violated Fisheries Administrative concerned.ñé+.£ªwph!1
Order No. 84-1.
SECTION 1. — Definition. — Words and terms used in this Order 11
It was alleged in the complaint that the five accused in the morning of March 1, construed as follows:
1969 resorted to electro fishing in the waters of Barrio San Pablo Norte, Sta. Cruz
by "using their own motor banca, equipped with motor; with a generator colored (a) Philippine waters or territorial waters of the Philippines' includes all
green with attached dynamo colored gray or somewhat white; and electrocuting waters of the Philippine Archipelago, as defined in the t between the United
device locally known as sensored with a somewhat webbed copper wire on the tip States and Spain, dated respectively the tenth of December, eighteen
or other end of a bamboo pole with electric wire attachment which was attached to hundred ninety eight and the seventh of November, nineteen hundred. For
the dynamo direct and with the use of these devices or equipments catches fish the purpose of this order, rivers, lakes and other bodies of fresh waters are
thru electric current, which destroy any aquatic animals within its cuffed reach, to included.
the detriment and prejudice of the populace" (Criminal Case No. 5429).
(b) Electro Fishing. — Electro fishing is the catching of fish with the use of
Upon motion of the accused, the municipal court quashed the complaint. The electric current. The equipment used are of many electrical devices which
prosecution appealed. The Court of First Instance of Laguna affirmed the order of may be battery or generator-operated and from and available source of
dismissal (Civil Case No. SC-36). The case is now before this Court on appeal by electric current.
the prosecution under Republic Act No. 5440.
(c) 'Persons' includes firm, corporation, association, agent or employee.
The lower court held that electro fishing cannot be penalize because electric current
is not an obnoxious or poisonous substance as contemplated in section I I of the (d) 'Fish' includes other aquatic products.
Fisheries Law and that it is not a substance at all but a form of energy conducted
or transmitted by substances. The lower court further held that, since the law does SEC. 2. — Prohibition. — It shall be unlawful for any person to engage in
not clearly prohibit electro fishing, the executive and judicial departments cannot electro fishing or to catch fish by the use of electric current in any portion of
consider it unlawful. the Philippine waters except for research, educational and scientific purposes
which must be covered by a permit issued by the Secretary of Agriculture
As legal background, it should be stated that section 11 of the Fisheries Law and Natural Resources which shall be carried at all times.
prohibits "the use of any obnoxious or poisonous substance" in fishing.
POLITICAL REV |Admin Law Assign 1|32

SEC. 3. — Penalty. — Any violation of the provisions of this Administrative And since the instant case was filed in the municipal court of Sta. Cruz, Laguna, a
Order shall subject the offender to a fine of not exceeding five hundred pesos provincial capital, the order of d rendered by that municipal court was directly
(P500.00) or imprisonment of not extending six (6) months or both at the appealable to the Court, not to the Court of First Instance of Laguna (Sec. 45 and
discretion of the Court. last par. of section 87 of the Judiciary Law; Esperat vs. Avila, L-25992, June 30,
1967, 20 SCRA 596).
SEC. 4. — Repealing Provisions. — All administrative orders or parts thereof
inconsistent with the provisions of this Administrative Order are hereby It results that the Court of First Instance of Laguna had no appellate jurisdiction
revoked. over the case. Its order affirming the municipal court's order of dismissal is void for
lack of motion. This appeal shall be treated as a direct appeal from the municipal
SEC. 5. — Effectivity. — This Administrative Order shall take effect six (60) court to this Court. (See People vs. Del Rosario, 97 Phil. 67).
days after its publication in the Office Gazette.
In this appeal, the prosecution argues that Administrative Orders Nos. 84 and 84-
On June 28, 1967 the Secretary of Agriculture and Natural Resources, upon the 1 were not issued under section 11 of the Fisheries Law which, as indicated above,
recommendation of the Fisheries Commission, issued Fisheries Administrative punishes fishing by means of an obnoxious or poisonous substance. This contention
Order No. 84-1, amending section 2 of Administrative Order No. 84, by restricting is not well-taken because, as already stated, the Penal provision of Administrative
the ban against electro fishing to fresh water fisheries (63 O.G. 9963). Order No. 84 implies that electro fishing is penalized as a form of fishing by means
of an obnoxious or poisonous substance under section 11.
Thus, the phrase "in any portion of the Philippine waters" found in section 2, was
changed by the amendatory order to read as follows: "in fresh water fisheries in The prosecution cites as the legal sanctions for the prohibition against electro
the Philippines, such as rivers, lakes, swamps, dams, irrigation canals and other fishing in fresh water fisheries (1) the rule-making power of the Department
bodies of fresh water." Secretary under section 4 of the Fisheries Law; (2) the function of the
Commissioner of Fisheries to enforce the provisions of the Fisheries Law and the
The Court of First Instance and the prosecution (p. 11 of brief) assumed that electro regulations Promulgated thereunder and to execute the rules and regulations
fishing is punishable under section 83 of the Fisheries Law (not under section 76 consistent with the purpose for the creation of the Fisheries Commission and for
thereof), which provides that any other violation of that law "or of any rules and the development of fisheries (Sec. 4[c] and [h] Republic Act No. 3512; (3) the
regulations promulgated thereunder shall subject the offender to a fine of not more declared national policy to encourage, Promote and conserve our fishing resources
than two hundred pesos (P200), or in t for not more than six months, or both, in (Sec. 1, Republic Act No. 3512), and (4) section 83 of the Fisheries Law which
the discretion of the court." provides that "any other violation of" the Fisheries Law or of any rules and
regulations promulgated thereunder "shall subject the offender to a fine of not more
That assumption is incorrect because 3 of the aforequoted Administrative Order No. than two hundred pesos, or imprisonment for not more than six months, or both,
84 imposes a fm of not exceeding P500 on a person engaged in electro fishing, in the discretion of the court."
which amount the 83. It seems that the Department of Fisheries prescribed their
own penalty for swift fishing which penalty is less than the severe penalty imposed As already pointed out above, the prosecution's reference to section 83 is out of
in section 76 and which is not Identified to the at penalty imposed in section 83. place because the penalty for electro fishing under Administrative order No. 84 is
not the same as the penalty fixed in section 83.
Had Administrative Order No. 84 adopted the fighter penalty prescribed in on 83,
then the crime of electro fishing would be within the exclusive original jurisdiction of We are of the opinion that the Secretary of Agriculture and Natural Resources and
the inferior court (Sec. 44 [f], Judiciary Law; People vs. Ragasi, L-28663, the Commissioner of Fisheries exceeded their authority in issuing Fisheries
September 22, Administrative Orders Nos. 84 and 84-1 and that those orders are not warranted
under the Fisheries Commission, Republic Act No. 3512.
We have discussed this pre point, not raised in the briefs, because it is obvious that
the crime of electro fishing which is punishable with a sum up to P500, falls within The reason is that the Fisheries Law does not expressly prohibit electro fishing. As
the concurrent original jurisdiction of the inferior courts and the Court of First electro fishing is not banned under that law, the Secretary of Agriculture and
instance (People vs. Nazareno, L-40037, April 30, 1976, 70 SCRA 531 and the cases Natural Resources and the Commissioner of Fisheries are powerless to penalize it.
cited therein).
POLITICAL REV |Admin Law Assign 1|33

In other words, Administrative Orders Nos. 84 and 84-1, in penalizing electro electricity as defined in paragraphs (1), (m) and (d), respectively,
fishing, are devoid of any legal basis. of Section 3 hereof: ...

Had the lawmaking body intended to punish electro fishing, a penal provision to The decree Act No. 4003, as amended, Republic Acts Nos. 428, 3048, 3512 and
that effect could have been easily embodied in the old Fisheries Law. 3586, Presidential Decrees Nos. 43, 534 and 553, and all , Acts, Executive Orders,
rules and regulations or parts thereof inconsistent with it (Sec. 49, P. D. No. 704).
That law punishes (1) the use of obnoxious or poisonous substance, or explosive in
fishing; (2) unlawful fishing in deepsea fisheries; (3) unlawful taking of marine The inclusion in that decree of provisions defining and penalizing electro fishing is
molusca, (4) illegal taking of sponges; (5) failure of licensed fishermen to report a clear recognition of the deficiency or silence on that point of the old Fisheries Law.
the kind and quantity of fish caught, and (6) other violations. It is an admission that a mere executive regulation is not legally adequate to
penalize electro fishing.
Nowhere in that law is electro fishing specifically punished. Administrative Order
No. 84, in punishing electro fishing, does not contemplate that such an offense fails Note that the definition of electro fishing, which is found in section 1 (c) of Fisheries
within the category of "other violations" because, as already shown, the penalty for Administrative Order No. 84 and which is not provided for the old Fisheries Law, is
electro fishing is the penalty next lower to the penalty for fishing with the use of now found in section 3(d) of the decree. Note further that the decree penalty electro
obnoxious or poisonous substances, fixed in section 76, and is not the same as the fishing by "imprisonment from two (2) to four (4) years", a punishment which is
penalty for "other violations" of the law and regulations fixed in section 83 of the more severe than the penalty of a time of not excluding P500 or imprisonment of
Fisheries Law. not more than six months or both fixed in section 3 of Fisheries Administrative
Order No. 84.
The lawmaking body cannot delegate to an executive official the power to declare
what acts should constitute an offense. It can authorize the issuance of regulations An examination of the rule-making power of executive officials and administrative
and the imposition of the penalty provided for in the law itself. (People vs. Exconde agencies and, in particular, of the Secretary of Agriculture and Natural Resources
101 Phil. 11 25, citing 11 Am. Jur. 965 on p. 11 32). (now Secretary of Natural Resources) under the Fisheries Law sustains the view
that he ex his authority in penalizing electro fishing by means of an administrative
Originally, Administrative Order No. 84 punished electro fishing in all waters. Later, order.
the ban against electro fishing was confined to fresh water fisheries. The
amendment created the impression that electro fishing is not condemnable per se. Administrative agent are clothed with rule-making powers because the lawmaking
It could be tolerated in marine waters. That circumstances strengthens the view body finds it impracticable, if not impossible, to anticipate and provide for the
that the old law does not eschew all forms of electro fishing. multifarious and complex situations that may be encountered in enforcing the law.
All that is required is that the regulation should be germane to the defects and
However, at present, there is no more doubt that electro fishing is punishable under purposes of the law and that it should conform to the standards that the law
the Fisheries Law and that it cannot be penalized merely by executive revolution prescribes (People vs. Exconde 101 Phil. 1125; Director of Forestry vs. Muñ;oz, L-
because Presidential Decree No. 704, which is a revision and consolidation of all 24796, June 28, 1968, 23 SCRA 1183, 1198; Geukeko vs. Araneta, 102 Phil. 706,
laws and decrees affecting fishing and fisheries and which was promulgated on May 712).
16, 1975 (71 O.G. 4269), expressly punishes electro fishing in fresh water and salt
water areas. The lawmaking body cannot possibly provide for all the details in the enforcement
of a particular statute (U.S. vs. Tupasi Molina, 29 Phil. 119, 125, citing U.S. vs.
That decree provides: ñé+.£ªwph!1 Grimaud 220 U.S. 506; Interprovincial Autobus Co., Inc. vs. Coll. of Internal
Revenue, 98 Phil. 290, 295-6).
SEC. 33. — Illegal fishing, dealing in illegally caught fish or
fishery/aquatic products. — It shall he unlawful for any person to The grant of the rule-making power to administrative agencies is a relaxation of
catch, take or gather or cause to be caught, taken or gathered fish the principle of separation of powers and is an exception to the nondeleption of
or fishery/aquatic products in Philippine waters with the use of legislative, powers. Administrative regulations or "subordinate legislation calculated
explosives, obnoxious or poisonous substance, or by the use of to promote the public interest are necessary because of "the growing complexity of
modem life, the multiplication of the subjects of governmental regulations, and the
POLITICAL REV |Admin Law Assign 1|34

increased difficulty of administering the law" Calalang vs. Williams, 70 Phil. 726; 316). As he exercises the rule-making power by delegation of the lawmaking body,
People vs. Rosenthal and Osmeñ;a, 68 Phil. 328). it is a requisite that he should not transcend the bound demarcated by the statute
for the exercise of that power; otherwise, he would be improperly exercising
Administrative regulations adopted under legislative authority by a particular legislative power in his own right and not as a surrogate of the lawmaking body.
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, Article 7 of the Civil Code embodies the basic principle that administrative or
of course, the law itself cannot be extended. (U.S. vs. Tupasi Molina, supra). An executive acts, orders and regulations shall be valid only when they are not contrary
administrative agency cannot amend an act of Congress (Santos vs. Estenzo, 109 to the laws or the Constitution."
Phil. 419, 422; Teoxon vs. Members of the d of Administrators, L-25619, June 30,
1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-28952, December 29, As noted by Justice Fernando, "except for constitutional officials who can trace their
1971, 42 SCRA 660; Deluao vs. Casteel, L-21906, August 29, 1969, 29 SCRA 350). competence to act to the fundamental law itself, a public office must be in the
statute relied upon a grant of power before he can exercise it." "department zeal
The rule-making power must be confined to details for regulating the mode or may not be permitted to outrun the authority conferred by statute." (Radio
proceeding to carry into effect the law as it his been enacted. The power cannot be Communications of the Philippines, Inc. vs. Santiago, L-29236, August 21, 1974,
extended to amending or expanding the statutory requirements or to embrace 58 SCRA 493, 496-8).
matters not covered by the statute. Rules that subvert the statute cannot be
sanctioned. (University of Santo Tomas vs. Board of Tax A 93 Phil. 376, 382, citing "Rules and regulations when promulgated in pursuance of the procedure or
12 C.J. 845-46. As to invalid regulations, see of Internal Revenue vs. Villaflor 69 authority conferred upon the administrative agency by law, partake of the nature
Phil. 319, Wise & Co. vs. Meer, 78 Phil. 655, 676; Del March vs. Phil. Veterans of a statute, and compliance therewith may be enforced by a penal sanction
Administrative, L-27299, June 27, 1973, 51 SCRA 340, 349). provided in the law. This is so because statutes are usually couched in general
terms, after expressing the policy, purposes, objectives, remedies and sanctions
There is no question that the Secretary of Agriculture and Natural Resources has intended by the legislature. The details and the manner of carrying out the law are
rule-making powers. Section 4 of the Fisheries law provides that the Secretary oftentimes left to the administrative agency entrusted with its enforcement. In this
"shall from time to time issue instructions, orders, and regulations consistent" with sense, it has been said that rules and regulations are the product of a delegated
that law, "as may be and proper to carry into effect the provisions thereof." That power to create new or additional legal provisions that have the effect of law." The
power is now vested in the Secretary of Natural Resources by on 7 of the Revised rule or regulation should be within the scope of the statutory authority granted by
Fisheries law, Presidential December No. 704. the legislature to the administrative agency. (Davis, Administrative Law, p. 194,
197, cited in Victories Milling Co., Inc. vs. Social Security Commission, 114 Phil.
Section 4(h) of Republic Act No. 3512 empower the Co of Fisheries "to prepare and 555, 558).
execute upon the approval of the Secretary of Agriculture and Natural Resources,
forms instructions, rules and regulations consistent with the purpose" of that In case of discrepancy between the basic law and a rule or regulation issued to
enactment "and for the development of fisheries." implement said law, the basic law prevails because said rule or regulation cannot
go beyond the terms and provisions of the basic law (People vs. Lim, 108 Phil.
Section 79(B) of the Revised Administrative Code provides that "the Department 1091).
Head shall have the power to promulgate, whenever he may see fit do so, all rules,
regulates, orders, memorandums, and other instructions, not contrary to law, to This Court in its decision in the Lim case, supra, promulgated on July 26, 1960,
regulate the proper working and harmonious and efficient administration of each called the attention of technical men in the executive departments, who draft rules
and all of the offices and dependencies of his Department, and for the strict and regulations, to the importance and necessity of closely following the legal
enforcement and proper execution of the laws relative to matters under the provisions which they intend to implement so as to avoid any possible
jurisdiction of said Department; but none of said rules or orders shall prescribe misunderstanding or confusion.
penalties for the violation thereof, except as expressly authorized by law."
The rule is that the violation of a regulation prescribed by an executive officer of
Administrative regulations issued by a Department Head in conformity with law the government in conformity with and based upon a statute authorizing such
have the force of law (Valerie vs. Secretary of culture and Natural Resources, 117 regulation constitutes an offense and renders the offender liable to punishment in
Phil. 729, 733; Antique Sawmills, Inc. vs. Zayco, L- 20051, May 30, 1966, 17 SCRA
POLITICAL REV |Admin Law Assign 1|35

accordance with the provisions of the law (U.S. vs. Tupasi Molina, 29 Phil. 119, the said provision "is null and void and without effect". Hence, the charge against
124). Santos was dismiss.

In other words, a violation or infringement of a rule or regulation validly issued can A penal statute is strictly construed. While an administrative agency has the right
constitute a crime punishable as provided in the authorizing statute and by virtue to make ranks and regulations to carry into effect a law already enacted, that power
of the latter (People vs. Exconde 101 Phil. 1125, 1132). should not be confused with the power to enact a criminal statute. An administrative
agency can have only the administrative or policing powers expressly or by
It has been held that "to declare what shall constitute a crime and how it shall be necessary implication conferred upon it. (Glustrom vs. State, 206 Ga. 734, 58
punished is a power vested exclusively in the legislature, and it may not be Second 2d 534; See 2 Am. Jr. 2nd 129-130).
delegated to any other body or agency" (1 Am. Jur. 2nd, sec. 127, p. 938; Texas
Co. vs. Montgomery, 73 F. Supp. 527). Where the legislature has delegated to executive or administrative officers and
boards authority to promulgate rules to carry out an express legislative purpose,
In the instant case the regulation penalizing electro fishing is not strictly in the rules of administrative officers and boards, which have the effect of extending,
accordance with the Fisheries Law, under which the regulation was issued, because or which conflict with the authority granting statute, do not represent a valid precise
the law itself does not expressly punish electro fishing. The instant case is similar of the rule-making power but constitute an attempt by an administrative body to
to People vs. Santos, 63 Phil. 300. The Santos case involves section 28 of Fish and legislate (State vs. Miles, Wash. 2nd 322, 105 Pac. 2nd 51).
Game Administrative Order No. 2 issued by the Secretary of Agriculture and Natural
Resources pursuant to the aforementioned section 4 of the Fisheries Law. In a prosecution for a violation of an administrative order, it must clearly appear
that the order is one which falls within the scope of the authority conferred upon
Section 28 contains the proviso that a fishing boat not licensed under the Fisheries the administrative body, and the order will be scrutinized with special care. (State
Law and under the said administrative order may fish within three kilometers of the vs. Miles supra).
shoreline of islands and reservations over which jurisdiction is exercised by naval
and military reservations authorities of the United States only upon receiving The Miles case involved a statute which authorized the State Game Commission "to
written permission therefor, which permission may be granted by the Secretary adopt, promulgate, amend and/or repeal, and enforce reasonable rules and
upon recommendation of the military or naval authorities concerned. A violation of regulations governing and/or prohibiting the taking of the various classes of
the proviso may be proceeded against under section 45 of the Federal Penal Code. game.Under that statute, the Game Commission promulgated a rule that "it shall
be unlawful to offer, pay or receive any reward, prize or compensation for the
Augusto A. Santos was prosecuted under that provision in the Court of First hunting, pursuing, taking, killing or displaying of any game animal, game bird or
Instance of Cavite for having caused his two fishing boats to fish, loiter and anchor game fish or any part thereof."
without permission from the Secretary within three kilometers from the shoreline
of Corrigidor Island. Beryl S. Miles, the owner of a sporting goods store, regularly offered a ten-down
cash prize to the person displaying the largest deer in his store during the open for
This Court held that the Fisheries Law does not prohibit boats not subject to license hunting such game animals. For that act, he was charged with a violation of the
from fishing within three kilometers of the shoreline of islands and reservations rule Promulgated by the State Game Commission.
over which jurisdiction is exercised by naval and military authorities of the United
States, without permission from the Secretary of Agriculture and Natural Resources It was held that there was no statute penalizing the display of game. What the
upon recommendation of the military and naval authorities concerned. statute penalized was the taking of game. If the lawmaking body desired to prohibit
the display of game, it could have readily said so. It was not lawful for the
As the said law does not penalize the act mentioned in section 28 of the administrative board to extend or modify the statute. Hence, the indictment against
administrative order, the promulgation of that provision by the Secretary "is Miles was quashed. The Miles case is similar to this case.
equivalent to legislating on the matter, a power which has not been and cannot be
delegated to him, it being expressly reserved" to the lawmaking body. "Such an act WHEREFORE, the lower court's decision of June 9, 1970 is set aside for lack of
constitutes not only an excess of the regulatory power conferred upon the Secretary appellate jurisdiction and the order of dismissal rendered by the municipal court of
but also an exercise of a legislative power which he does not have, and therefore" Sta. Cruz, Laguna in Criminal Case No. 5429 is affirmed. Costs de oficio.SO
ORDERED.
POLITICAL REV |Admin Law Assign 1|36

8. G.R. No. 101279 August 6, 1992 pool of prospective domestic helpers to Hong Kong on a regional
basis.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,
vs. For compliance. (Emphasis ours; p. 30, Rollo.)
HON. RUBEN D. TORRES, as Secretary of the Department of Labor &
Employment, and JOSE N. SARMIENTO, as Administrator of the Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, respondents. 30, Series of 1991, dated July 10, 1991, providing GUIDELINES on the Government
processing and deployment of Filipino domestic helpers to Hong Kong and the
GRIÑO-AQUINO, J.: accreditation of Hong Kong recruitment agencies intending to hire Filipino domestic
helpers.
This petition for prohibition with temporary restraining order was filed by the
Philippine Association of Service Exporters (PASEI, for short), to prohibit and enjoin Subject: Guidelines on the Temporary Government Processing and
the Secretary of the Department of Labor and Employment (DOLE) and the Deployment of Domestic Helpers to Hong Kong.
Administrator of the Philippine Overseas Employment Administration (or POEA)
from enforcing and implementing DOLE Department Order No. 16, Series of 1991 Pursuant to Department Order No. 16, series of 1991 and in order
and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, temporarily to operationalize the temporary government processing and
suspending the recruitment by private employment agencies of Filipino domestic deployment of domestic helpers (DHs) to Hong Kong resulting
helpers for Hong Kong and vesting in the DOLE, through the facilities of the POEA, from the temporary suspension of recruitment by private
the task of processing and deploying such workers. employment agencies for said skill and host market, the following
guidelines and mechanisms shall govern the implementation of
PASEI is the largest national organization of private employment and recruitment said policy.
agencies duly licensed and authorized by the POEA, to engaged in the business of
obtaining overseas employment for Filipino landbased workers, including domestic I. Creation of a joint POEA-OWWA Household Workers Placement
helpers. Unit (HWPU)

On June 1, 1991, as a result of published stories regarding the abuses suffered by An ad hoc, one stop Household Workers Placement Unit [or HWPU]
Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres under the supervision of the POEA shall take charge of the various
issued Department Order No. 16, Series of 1991, temporarily suspending the operations involved in the Hong Kong-DH industry segment:
recruitment by private employment agencies of "Filipino domestic helpers going to
Hong Kong" (p. 30, Rollo). The DOLE itself, through the POEA took over the The HWPU shall have the following functions in coordination with
business of deploying such Hong Kong-bound workers. appropriate units and other entities concerned:

In view of the need to establish mechanisms that will enhance the 1. Negotiations with and Accreditation of Hong Kong Recruitment
protection for Filipino domestic helpers going to Hong Kong, the Agencies
recruitment of the same by private employment agencies
is hereby temporarily suspended effective 1 July 1991. As such, 2. Manpower Pooling
the DOLE through the facilities of the Philippine Overseas
Employment Administration shall take over the processing and 3. Worker Training and Briefing
deployment of household workers bound for Hong Kong, subject
to guidelines to be issued for said purpose. 4. Processing and Deployment

In support of this policy, all DOLE Regional Directors and the 5. Welfare Programs
Bureau of Local Employment's regional offices are likewise
directed to coordinate with the POEA in maintaining a manpower II. Documentary Requirements and Other Conditions for
Accreditation of Hong Kong Recruitment Agencies or Principals
POLITICAL REV |Admin Law Assign 1|37

Recruitment agencies in Hong Kong intending to hire Filipino DHs proceed to the POEA-OWWA Household Workers Placement Unit in
for their employers may negotiate with the HWPU in Manila directly Manila for accreditation before their recruitment and processing of
or through the Philippine Labor Attache's Office in Hong Kong. DHs shall be allowed.

xxx xxx xxx Recruitment agencies in Hong Kong who have some accepted
applicants in their pool after the cut-off period shall submit this list
X. Interim Arrangement of workers upon accreditation. Only those DHs in said list will be
allowed processing outside of the HWPU manpower pool.
All contracts stamped in Hong Kong as of June 30 shall continue
to be processed by POEA until 31 July 1991 under the name of the For strict compliance of all concerned. (Emphasis supplied, p.
Philippine agencies concerned. Thereafter, all contracts shall be 36, Rollo.)
processed with the HWPU.
On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to
Recruitment agencies in Hong Kong shall submit to the Philippine annul the aforementioned DOLE and POEA circulars and to prohibit their
Consulate General in Hong kong a list of their accepted applicants implementation for the following reasons:
in their pool within the last week of July. The last day of acceptance
shall be July 31 which shall then be the basis of HWPU in accepting 1. that the respondents acted with grave abuse of discretion
contracts for processing. After the exhaustion of their respective and/or in excess of their rule-making authority in issuing said
pools the only source of applicants will be the POEA manpower circulars;
pool.
2. that the assailed DOLE and POEA circulars are contrary to the
For strict compliance of all concerned. (pp. 31-35, Rollo.) Constitution, are unreasonable, unfair and oppressive; and

On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 3. that the requirements of publication and filing with the Office of
37, Series of 1991, on the processing of employment contracts of domestic workers the National Administrative Register were not complied with.
for Hong Kong.
There is no merit in the first and second grounds of the petition.
TO: All Philippine and Hong Kong Agencies engaged in the
recruitment of Domestic helpers for Hong Kong Article 36 of the Labor Code grants the Labor Secretary the power to restrict and
regulate recruitment and placement activities.
Further to Memorandum Circular No. 30, series of 1991 pertaining
to the government processing and deployment of domestic helpers Art. 36. Regulatory Power. — The Secretary of Labor shall have
(DHs) to Hong Kong, processing of employment contracts which the power to restrict and regulate the recruitment and placement
have been attested by the Hong Kong Commissioner of Labor up activities of all agencies within the coverage of this title
to 30 June 1991 shall be processed by the POEA Employment [Regulation of Recruitment and Placement Activities] and is
Contracts Processing Branch up to 15 August 1991 only. hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the
Effective 16 August 1991, all Hong Kong recruitment agent/s provisions of this title. (Emphasis ours.)
hiring DHs from the Philippines shall recruit under the new scheme
which requires prior accreditation which the POEA. On the other hand, the scope of the regulatory authority of the POEA, which was
created by Executive Order No. 797 on May 1, 1982 to take over the functions of
Recruitment agencies in Hong Kong may apply for accreditation at the Overseas Employment Development Board, the National Seamen Board, and
the Office of the Labor Attache, Philippine Consulate General the overseas employment functions of the Bureau of Employment Services, is broad
where a POEA team is posted until 31 August 1991. Thereafter, and far-ranging for:
those who failed to have themselves accredited in Hong Kong may
POLITICAL REV |Admin Law Assign 1|38

1. Among the functions inherited by the POEA from the defunct and control with due regard for the interests, first and foremost, of the public, then
Bureau of Employment Services was the power and duty: of the utility and of its patrons" (Philippine Communications Satellite Corporation
vs. Alcuaz, 180 SCRA 218).
"2. To establish and maintain a registration
and/or licensing system to regulate private sector The Solicitor General, in his Comment, aptly observed:
participation in the recruitment and placement of
workers, locally and overseas, . . ." (Art. 15, . . . Said Administrative Order [i.e., DOLE Administrative Order
Labor Code, Emphasis supplied). (p. 13, Rollo.) No. 16] merely restricted the scope or area of petitioner's business
operations by excluding therefrom recruitment and deployment of
2. It assumed from the defunct Overseas Employment domestic helpers for Hong Kong till after the establishment of the
Development Board the power and duty: "mechanisms" that will enhance the protection of Filipino domestic
helpers going to Hong Kong. In fine, other than the recruitment
3. To recruit and place workers for overseas and deployment of Filipino domestic helpers for Hongkong,
employment of Filipino contract workers on a petitioner may still deploy other class of Filipino workers either for
government to government arrangement and in Hongkong and other countries and all other classes of Filipino
such other sectors as policy may dictate . . . (Art. workers for other countries.
17, Labor Code.) (p. 13, Rollo.)
Said administrative issuances, intended to curtail, if not to end,
3. From the National Seamen Board, the POEA took over: rampant violations of the rule against excessive collections of
placement and documentation fees, travel fees and other charges
2. To regulate and supervise the activities of committed by private employment agencies recruiting and
agents or representatives of shipping companies deploying domestic helpers to Hongkong. [They are reasonable,
in the hiring of seamen for overseas employment; valid and justified under the general welfare clause of the
and secure the best possible terms of Constitution, since the recruitment and deployment business, as it
employment for contract seamen workers and is conducted today, is affected with public interest.
secure compliance therewith. (Art. 20, Labor
Code.) xxx xxx xxx

The vesture of quasi-legislative and quasi-judicial powers in administrative bodies The alleged takeover [of the business of recruiting and placing
is not unconstitutional, unreasonable and oppressive. It has been necessitated by Filipino domestic helpers in Hongkong] is merely a remedial
"the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, measure, and expires after its purpose shall have been attained.
177 SCRA 72, 79). More and more administrative bodies are necessary to help in This is evident from the tenor of Administrative Order No. 16 that
the regulation of society's ramified activities. "Specialized in the particular field recruitment of Filipino domestic helpers going to Hongkong by
assigned to them, they can deal with the problems thereof with more expertise and private employment agencies are hereby "temporarily
dispatch than can be expected from the legislature or the courts of justice" (Ibid.). suspended effective July 1, 1991."

It is noteworthy that the assailed circulars do not prohibit the petitioner from The alleged takeover is limited in scope, being confined to
engaging in the recruitment and deployment of Filipino landbased workers for recruitment of domestic helpers going to Hongkong only.
overseas employment. A careful reading of the challenged administrative issuances
discloses that the same fall within the "administrative and policing powers expressly xxx xxx xxx
or by necessary implication conferred" upon the respondents (People vs. Maceren,
79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the . . . the justification for the takeover of the processing and
Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 deploying of domestic helpers for Hongkong resulting from the
SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas restriction of the scope of petitioner's business is confined solely
the power to "regulate" means "the power to protect, foster, promote, preserve, to the unscrupulous practice of private employment agencies
POLITICAL REV |Admin Law Assign 1|39

victimizing applicants for employment as domestic helpers for . . . Administrative rules and regulations must also be published if
Hongkong and not the whole recruitment business in the their purpose is to enforce or implement existing law pursuant also
Philippines. (pp. 62-65, Rollo.) to a valid delegation. (p. 447.)

The questioned circulars are therefore a valid exercise of the police power as Interpretative regulations and those merely internal in nature, that
delegated to the executive branch of Government. is, regulating only the personnel of the administrative agency and
not the public, need not be published. Neither is publication
Nevertheless, they are legally invalid, defective and unenforceable for lack of power required of the so-called letters of instructions issued by
publication and filing in the Office of the National Administrative Register as administrative superiors concerning the rules or guidelines to be
required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) followed by their subordinates in the performance of their duties.
and 4, Chapter 2, Book VII of the Administrative Code of 1987 which provide: (p. 448.)

Art. 2. Laws shall take effect after fifteen (15) days following the We agree that publication must be in full or it is no publication at
completion of their publication in the Official Gazatte, unless it is all since its purpose is to inform the public of the content of the
otherwise provided. . . . (Civil Code.) laws. (p. 448.)

Art. 5. Rules and Regulations. — The Department of Labor and For lack of proper publication, the administrative circulars in question may not be
other government agencies charged with the administration and enforced and implemented.
enforcement of this Code or any of its parts shall promulgate the
necessary implementing rules and regulations. Such rules and WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE
regulations shall become effective fifteen (15) days after Department Order No. 16, Series of 1991, and POEA Memorandum Circulars Nos.
announcement of their adoption in newspapers of general 30 and 37, Series of 1991, by the public respondents is hereby SUSPENDED
circulation. (Emphasis supplied, Labor Code, as amended.) pending compliance with the statutory requirements of publication and filing under
the aforementioned laws of the land.
Sec. 3. Filing. — (1) Every agency shall file with the University of
the Philippines Law Center, three (3) certified copies of every rule SO ORDERED.
adopted by it. Rules in force on the date of effectivity of this Code
which are not filed within three (3) months shall not thereafter be
the basis of any sanction against any party or persons. (Emphasis
supplied, Chapter 2, Book VII of the Administrative Code of 1987.)

Sec. 4. Effectivity. — In addition to other rule-making


requirements provided by law not inconsistent with this Book, each
rule shall become effective fifteen (15) days from the date of filing
as above provided unless a different date is fixed by law, or
specified in the rule in cases of imminent danger to public health,
safety and welfare, the existence of which must be expressed in a
statement accompanying the rule. The agency shall take
appropriate measures to make emergency rules known to persons
who may be affected by them. (Emphasis supplied, Chapter 2,
Book VII of the Administrative Code of 1987).

Once, more we advert to our ruling in Tañada vs. Tuvera, 146 SCRA 446 that:
POLITICAL REV |Admin Law Assign 1|40

9. G.R. No. L-64279 April 30, 1984 The replevin order could not be executed by the sheriff. In his order of April 25,
1983 Judge Domingo Medina Angeles, who heard the case at Daet and who was
ANSELMO L. PESIGAN and MARCELINO L. PESIGAN, petitioners, later transferred to Caloocan City, dismissed the case for lack of cause of action.
vs.
JUDGE DOMINGO MEDINA ANGELES, Regional Trial Court, Caloocan City The Pesigans appealed to this Court under Rule 45 of the Rules of Court and section
Branch 129, acting for REGIONAL TRIAL COURT of Camarines Norte, now 25 of the Interim Rules and pursuant to Republic Act No. 5440, a 1968 law which
presided over by JUDGE NICANOR ORIÑO, Daet Branch 40; DRA. BELLA S. superseded Rule 42 of the Rules of Court.
MIRANDA, ARNULFO V. ZENAROSA, ET AL., respondents.
We hold that the said executive order should not be enforced against the Pesigans
AQUINO, J.:ñé+.£ªwph!1 on April 2, 1982 because, as already noted, it is a penal regulation published more
than two months later in the Official Gazette dated June 14, 1982. It became
At issue in this case is the enforceability, before publication in the Official Gazette effective only fifteen days thereafter as provided in article 2 of the Civil Code and
of June 14, 1982, of Presidential Executive Order No. 626-A dated October 25, section 11 of the Revised Administrative Code.
1980, providing for the confiscation and forfeiture by the government of carabaos
transported from one province to another. The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and
regulations which prescribe penalties. Publication is necessary to apprise the public
Anselmo L. Pesigan and Marcelo L. Pesigan, carabao dealers, transported in an of the contents of the regulations and make the said penalties binding on the
Isuzu ten-wheeler truck in the evening of April 2, 1982 twenty-six carabaos and a persons affected thereby. (People vs. Que Po Lay, 94 Phil. 640; Lim Hoa Ting vs.
calf from Sipocot, Camarines Sur with Padre Garcia, Batangas, as the destination. Central Bank of the Phils., 104 Phil. 573; Balbuna vs. Secretary of Education, 110
Phil. 150.)
They were provided with (1) a health certificate from the provincial veterinarian of
Camarines Sur, issued under the Revised Administrative Code and Presidential The Spanish Supreme Court ruled that "bajo la denominacion generica de leyes, se
Decree No. 533, the Anti-Cattle Rustling Law of 1974; (2) a permit to transport comprenden tambien los reglamentos, Reales decretos, Instrucciones, Circulares y
large cattle issued under the authority of the provincial commander; and (3) three Reales ordenes dictadas de conformidad con las mismas por el Gobierno en uso de
certificates of inspection, one from the Constabulary command attesting that the su potestad (1 Manresa, Codigo Civil, 7th Ed., p. 146.)
carabaos were not included in the list of lost, stolen and questionable animals; one
from the LIvestock inspector, Bureau of Animal Industry of Libmanan, Camarines Thus, in the Que Po Lay case, a person, convicted by the trial court of having
Sur and one from the mayor of Sipocot. violated Central Bank Circular No. 20 and sentenced to six months' imprisonment
and to pay a fine of P1,000, was acquitted by this Court because the circular was
In spite of the permit to transport and the said four certificates, the carabaos, while published in the Official Gazette three months after his conviction. He was not
passing at Basud, Camarines Norte, were confiscated by Lieutenant Arnulfo V. bound by the circular.
Zenarosa, the town's police station commander, and by Doctor Bella S. Miranda,
provincial veterinarian. The confiscation was basis on the aforementioned Executive That ruling applies to a violation of Executive Order No. 626-A because
Order No. 626-A which provides "that henceforth, no carabao, regardless of age, its confiscation and forfeiture provision or sanction makes it a penal statute. Justice
sex, physical condition or purpose and no carabeef shall be transported from one and fairness dictate that the public must be informed of that provision by means of
province to another. The carabaos or carabeef transported in violation of this publication in the Gazette before violators of the executive order can be bound
Executive Order as amended shall be subject to confiscation and forfeiture by the thereby.
government to be distributed ... to deserving farmers through dispersal as the
Director of Animal Industry may see fit, in the case of carabaos" (78 OG 3144). The cases of Police Commission vs. Bello, L-29960, January 30, 1971, 37 SCRA 230
and Philippine Blooming Mills vs. Social Security System, 124 Phil. 499, cited by
Doctor Miranda distributed the carabaos among twenty-five farmers of Basud, and the respondents, do not involve the enforcement of any penal regulation.
to a farmer from the Vinzons municipal nursery (Annex 1).
Commonwealth Act No. 638 requires that all Presidential executive orders having
The Pesigans filed against Zenarosa and Doctor Miranda an action for replevin for general applicability should be published in the Official Gazette. It provides that
the recovery of the carabaos allegedly valued at P70,000 and damages of P92,000.
POLITICAL REV |Admin Law Assign 1|41

"every order or document which shag prescribe a penalty shall be deemed to have
general applicability and legal effect."

Indeed, the practice has always been to publish executive orders in the Gazette.
Section 551 of the Revised Administrative Code provides that even bureau
"regulations and orders shall become effective only when approved by the
Department Head and published in the Official Gazette or otherwise publicly
promulgated". (See Commissioner of Civil Service vs. Cruz, 122 Phil. 1015.)

In the instant case, the livestock inspector and the provincial veterinarian of
Camarines Norte and the head of the Public Affairs Office of the Ministry of
Agriculture were unaware of Executive Order No. 626-A. The Pesigans could not
have been expected to be cognizant of such an executive order.

It results that they have a 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 Zenarosa acted in good faith in ordering the
forfeiture and dispersal of the carabaos.

WHEREFORE, the trial court's order of dismissal and the confiscation and dispersal
of the carabaos are reversed and set aside. Respondents Miranda and Zenarosa are
ordered to restore the carabaos, with the requisite documents, to the petitioners,
who as owners are entitled to possess the same, with the right to dispose of them
in Basud or Sipocot, Camarines Sur. No costs.

SO ORDERED.1äwphï1.ñët
POLITICAL REV |Admin Law Assign 1|42

10. G.R. No. L-36130 January 17, 1985 Pursuant to said Memorandum respondent collected from petitioners, over the
latter's vehement protests, the following inspection fees:
LA SUERTE CIGAR AND CIGARETTE FACTORY, BATAAN CIGAR AND
CIGARETTE FACTORY, INC., LA PERLA INDUSTRIES, INC., PIONEER (a) 199,632.19 during the period from September 1967 to April
TOBACCO CORPORATION, INSULAR-YEBANA TOBACCO CORPORATION, 1969, in CTA Case No. 2031;
LAS BUENAS FABRICA DE CIGARILLOS, INC., LA DICHA CIGAR &
CIGARETTE FACTORY, CONSOLIDATED TOBACCO INDUSTRIES OF THE (b) 1,406,877.64 during the period from September 1967 to
PHILIPPINES, INC., LA CAMPANA FABRICA DE TABACOS, INC., August 1969, in CTA Case No. 2048.
ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION, FORTUNE
TOBACCO CORPORATION, BAGUMBUHAY CIGAR AND CIGARETTE Petitioners in two separate cases, sought the refund of the aforementioned
FACTORY, STANDARD CIGARETTE MANUFACTURING CO., INC., and D.L. inspection fees collected from them CTA Case No. 2031 was submitted by
TERUEL TOBACCO CO., INC., petitioners, petitioners for summary judgment. In a decision dated November 28, 1970, CTA
vs. denied the claim for the refund of the amount of P199,632.19.
COURT OF TAX APPEALS and HON. MISAEL P. VERA, in his capacity as
Commissioner of Internal Revenue, respondents.
Before the finality of the said decision, however, petitioners moved for a
reconsideration thereby praying that in case of a denial, CTA Case No. 2031 be
G.R. No. L-36131 January 17, 1985 reopened for the reception of evidence in support of their argument that there was
no inspection made by the BIR nor were inspection labels affixed to the boxes and
ALHAMBRA INDUSTRIES, INC., LA FLOR DE LA ISABELA, INCORPORADA packages containing the cigars and cigarettes which would warrant the imposition
and COLUMBIA TOBACCO COMPANY, INC., petitioners, and collection of the disputed tobacco inspection fees.
vs.
COURT OF TAX APPEALS and HON. MISAEL P. VERA, in his capacity as
On September 28, 1971, the CTA granted petitioners' motion to reopen but denied
Commissioner of Internal Revenue,respondents. the motion for reconsideration. Said court likewise ordered that CTA Cases Nos.
2048 and 2031 be heard jointly. After hearing, the CTA on December 15, 1972
denied both claims.
CUEVAS, J.:
Petitioners contend that the CTA erred:
Petition for Review on certiorari of the decisions 1 of the Court of Tax Appeals in
CTA Cases Nos. 2048 and 2031, denying petitioners' claims for the refund of
I
P1,606,509.83 imposed and collected by respondent Commissioner of Internal
Revenue as tobacco inspection fees on cigars and cigarettes manufactured for
IN REACHING A CONCLUSION CONTRARY TO PETITIONERS'
domestic sale and/or consumption.
POSITION THAT INSPECTION FEES COLLECTED FROM THEM BY
RESPONDENT ON THE CIGARS AND CIGARETTES MANUFACTURED
These two cases were heard jointly by the Court of Tax Appeals the parties being BY THEM FOR DOMESTIC SALE OR CONSUMPTION WERE SO
represented by one and the same counsel and involving as they do, the same legal COLLECTED ILLEGALLY AND HENCE, SHOULD BE REFUNDED TO
issues. The amounts involved are not disputed. THEM;

On August 22, 1967, respondent Commissioner of Internal Revenue issued II


Memorandum Circular No. 30-67 2requiring the inspection of (a) all locally produced
leaf tobacco and partially manufactured tobacco intended for domestic sale, for
IN REFUSING TO HOLD THAT RESPONDENT COMMISSIONER'S
factory use or for export; (b) all manufactured products of tobacco contemplated
REVENUE MEMORANDUM CIRCULAR WHICH PURPORTS TO
in Sec. 194(m) of the Tax Code intended for domestic sale; and (c) all imported
DECLARE PETITIONERS LIABLE FOR THE AFORESAID INSPECTION
foreign leaf tobacco and partially manufactured tobacco for domestic sale or factory
FEES, AND IN VIRTUE OF WHICH, THE SAID FEES WERE
use, and the collection of the corresponding inspection fees.
POLITICAL REV |Admin Law Assign 1|43

COLLECTED, IS WITHOUT ANY BINDING FORCE AND EFFECT ON As amended, (by RA 31) said Section 6, Republic Act No. 31 (October 1, 1946) now
THE LATTER, BECAUSE OF THE ADMITTED FACT THAT IT IS NOT reads:
A REGULATION PROMULGATED BY THE SECRETARY OF FINANCE,
AS REQUIRED BY SECTION 4(j) AND 338 OF THE NIRC, AND Sec. 6. The Commissioner of Internal Revenue shall have the
FURTHER, BECAUSE OF THE EQUALLY ADMITTED FACT THAT IT power and it shall be his duty:
HAS NEVER BEEN PUBLISHED IN THE OFFICIAL GAZETTE, AS
REQUIRED NOT ONLY BY ART. 2 OF THE CIVIL CODE, BUT ALSO
xxx xxx xxx
BY SEC. 79(b) OF THE REVISED ADMINISTRATIVE CODE;

(c) To require, whenever it shall be deemed expedient, the


III inspection of and affixture of inspection labels to tobacco removed
from province of its origin to another or other provinces before
IN DISREGARDING THE FACT BORNE OUT BY UNDISPUTED such removal or to tobacco for domestic sale or factory use.
EVIDENCE THAT NO INSPECTION OF THE CIGARS AND (Emphasis supplied)
CIGARETTES AFOREMENTIONED WAS ACTUALLY CONDUCTED
FOR WHICH REASON NO COLLECTION OF INSPECTION FEES WAS
The amendatory bill (House Bill No. 735) which later on became Republic Act No.
LEGALLY WARRANTED; and
31, carried the following explanatory note:

IV
EXPLANATORY NOTE

IN FAILING TO HOLD THAT THE PROVISIONS OF THE TOBACCO Under Section 6 of the Tobacco Inspection Law (Act No. 2613), the
INSPECTION LAW (SEC. 6[c]) UNDER WHICH THE SAID REVENUE Collector of Internal Revenue is authorized to promulgate rules
MEMORANDUM CIRCULAR PURPORTS TO DECLARE PETITIONERS' relative to the classification, marking and packaging of leaf
CIGAR AND CIGARETTES FOR DOMESTIC SALE OR CONSUMPTION tobacco for domestic sale or for exportation in order to insure the
SUBJECT TO INSPECTION AND THE PAYMENT OF INSPECTION use of leaf tobacco of good quality and its handling under sanitary
FEES, REFER ALONE TO LEAF TOBACCO FOR DOMESTIC SALE OR conditions. Section 1 of the attached bill seeks to extend this
FACTORY USE, NOT TO CIGARS AND CIGARETTES FOR DOMESTIC regulatory power of the Collector of Internal Revenue to leaf
CONSUMPTION, AND HENCE, THE SAID MEMORANDUM CIRCULAR tobacco intended for factory use.
IS ULTRA VIRES AND VOID.

xxx xxx xxx


Section 6(c) of Act 2613 (Tobacco Inspection Law), before its amendment by
Republic Act No. 3 1, provides:
xxx xxx xxx

Sec. 6. The Commissioner of Internal Revenue shall have the


Under the present law only leaf and manufactured tobacco for
power and it shall be his duty: ...
export to the United States are subject to inspection. Under the
proposed amendment, the standard type and packing of all leaf
xxx xxx xxx and manufactured tobacco for export to any foreign country will
come under the regulatory power of the Collector of Internal
(c) To require, whenever it shall be deemed expedient, the Revenue. (Emphasis supplied)
inspection of and affixture of inspection labels to tobacco removed
from the province before such removal or to tobacco for domestic
It was petitioners' contention that the amendatory portion reading "or to tobacco
sale or factory use.
for domestic sale or factory use" in Sec. 6(c) of Act 2613, refers to leaf tobacco
whether for local sale or factory use and does not include cigars and cigarettes for
domestic sale or consumption.
POLITICAL REV |Admin Law Assign 1|44

We do not agree. coverage of said sections to either leaf or manufactured tobacco,


it qualified the word 'tobacco' with such antecedent words. In
Prior to the amendment of said Act, Sec. 6 and 7 thereof, already covered the Section 6(c) of Act 2613, as amended, no such qualification was
inspection of leaf tobacco, partially manufactured tobacco or local sale and leaf made by Congress, thereby showing the broad scope and meaning
tobacco and its products for export. If the intention of Congress was to apply the of the word tobacco. For the Court to adopt petitioners'
amendment to those items already covered by Act 2613, then the word "leaf" construction that tobacco means 'leaf tobacco' would be engaging
should have been easily included to modify the term "tobacco". The omission of the in unauthorized judicial legislation by rewriting the law and
word "leaf" is a clear indication that Congress intended to include within the purview inserting words and phrases not found in it.
of the law a new item; namely, manufactured tobacco products for domestic sale
and imported tobacco for factory use. xxx xxx xxx

As aptly held by the CTA: Settled is the rule that where the law does not distinguish, we should not
distinguish. 3
xxx xxx xxx
The validity and efficacy of Revenue Memorandum Circular No. 30-67 is now being
Petitioners' contention that the phrase 'tobacco for domestic sale' assailed by petitioners on the ground that it is not a regulation promulgated by the
refers to leaf tobacco alone is restrictive, misleading, and against Secretary of Finance (now Minister of Finance) and that it has never been published
sound statutory construction. in the Official Gazette as required by the Civil Code and the Revised Administrative
Code.
Webster's New International Dictionary 2nd Edition, p. 2653
defines tobacco as the leaves of the tobacco plant, prepared by As herein earlier mentioned, the word "leaf", although used to modify the term
drying and various manufacturing processes, and use either for "tobacco" only in the Explanatory Note to then House Bill No. 735 was omitted when
smoking or chewing, or as snuff, or the manufactured products the Bill was signed into law (RA 31). However, when General Circular No. V-27
from tobacco leave smoking or chewing tobacco cigar cigarette dated October 29, 1946 was issued by then Collector of Internal Revenue Bibiano
etc. collectively L. Meer to implement the provisions of Sections 6, 7 and 14 of Act 2613 (Tobacco
Inspection Law), the word "leaf" was erroneously included therein, causing damage
From the above definition, it is clear that the word "tobacco" refers to the financial stability of the Government as the inspection fees due on cigars and
both to leaf and manufactured tobacco such as cigars, and cigarettes for domestic sale and imported leaf and partially manufactured tobacco
cigarettes It is to be noted that either Section 6(c) of Act No. 2613 for factory use were not collected for more than twenty (20) years. Such error was
or the amendatory law does not make a distinction as to the only discovered when an Assistant Chief of the Tobacco Inspection Service of the
meaning of the word "tobacco". Since our la g body used the word BIR appeared in a public hearing of the Joint Legislative-Executive Tax Commission.
tobacco in the general sense without any qualification, this Court As a result thereof, the Philippine Tobacco Board, a policy making body of the
is powerless to give it a restrictive meaning. National Government on Tobacco Authority, adopted Resolution No. 2-67
interpreting the phrase "tobacco for domestic sale" as referring to wholesale
disposal of tobacco products by cigar and cigarettes factories to its dealers while
xxx xxx xxx
the phrase "tobacco for factory use" meant "imported leaf tobacco" intended for
use by cigar and cigarette factories in the manufacture of tobacco products. The
If Congress of the Philippines really intended to restrict the approval of this Resolution on May 31, 1967 prompted respondent Commissioner
meaning of the word 'tobacco' under Republic Act No. 31, which to promulgate Memorandum Circular No. 30-67 which was approved by then
took effect on October 1, 1946, in order to limit the scope of the Secretary of Finance Eduardo Z. Romualdez and the effectivity of which is
term tobacco under the law originally passed in 1916 and its specifically dated September 1, 1967 and not contingent on its publication in the
implementing Regulations Nos. 17 and 47, it could have easily Official Gazette.
inserted the word "leaf" to modify "tobacco" contained in the
amendatory law. An examination of Sections 6(a), 6(b) and
7, supra, reveals that, if our lawmaking body intended to limit the
POLITICAL REV |Admin Law Assign 1|45

Thus, the assailed Revenue Memorandum Circular was issued to rectify the error in When an administrative agency renders an opinion by means of a circular or
General Circular No. V-27 and to interpret the phrase "tobacco for domestic sale or Memorandum, it merely interprets a pre-existing law, and no publication is
factory use" with the view of arresting huge losses of tobacco inspection fees which necessary for its validity. 4 Construction by an executive branch of government of
were not collected and imposed since the said Circular (No. V-27) took effect. a particular law although not binding upon courts must be given weight as the
Furthermore, the questioned Revenue Memorandum Circular was also issued to construction come from the branch of the government called upon to implement
apprise those concerned of the construction and interpretation which should be the law. 5
accorded to Act No. 2613, as amended, and which respondent is duty bound to
enforce. It is an opinion on how the law should be construed and there was no The promulgation of Revenue Memorandum Circular No. 30-67 being in accordance
attempt whatsoever to enlarge or restrict the meaning of the law. with the Revised Administrative Code, having been issued by the Commissioner of
Internal Revenue with the approval of the Secretary (now Minister) of Finance for
The basis for the issuance of said Memorandum Circular was so stated in Resolution the implementation of the Tobacco Inspection Law, has therefore the force and
No. 2-67 of the Tobacco Board, wherein petitioners as members of the Manila effect of law.
Tobacco Association, Inc. were duly represented, the pertinent portions of which
read: Tobacco Inspection fees are undoubtedly National Internal Revenue taxes, they
being one of the miscellaneous taxes provided for under the Tax Code. Section 228
xxx xxx xxx (formerly Section 302) of Chapter VII of the Code specifically provides for the
collection and manner of payment of the said inspection fees. It is within the power
WHEREAS, tills original recommendation of Mr. Hernandez was and duty of the Commissioner to collect the same, even without inspection, should
perfectly in accordance with eating law, more particularly Sec. 1 tobacco products be removed clandestinely or surreptitiously from the
of Republic Act No. 31 which took effect since September 25, establishment of the wholesaler, manufacturer or redrying plant and from the
1946, but perhaps thru oversight by the former Commissioners customs custody in case of imported leaf tobacco. Errors, omissions or flaws
and officers of the Tobacco Inspection Service the property and committed by BIR inspectors and representatives while in the performance of their
legality of effecting the inspection of tobacco products for local duties cannot be set up as estoppel nor estop the Government from collecting a tax
sales and imported leaf tobacco for factory use might have legally due. 6 Tobacco inspection fees are levied and collected for purposes of
overlooked resulting in huge losses of tobacco inspection fees ... regulation and control and also as a source of revenue since fifty percentum (50%)
(Emphasis supplied) of said fees shall accrue to the Tobacco Inspection Fee Fund created by Sec. 12 of
Act No. 2613, as amended and the other fifty percentum to the Cultural Center of
the Philippines. (Sec. 88, Chapter VII, NIRC)
As admitted by counsel for petitioners, the latter were each furnished with a copy
of the Revenue Memorandum Circular in question and the purpose of the law, that
is to inform or notify those who may be affected, has been substantially complied Under the circumstances, a refund of the tobacco inspection fees collected from
with. Since it was further admitted by petitioners that said Memorandum is but a petitioners is not legally warranted.
"Memorandum Circular for purposes of the internal administration of the BIR and
not a regulation within the contemplation of Sections 4 and 338 of the NIRC and As disclosed by the records, the party-litigants agreed that Mr. Vicente Chua's,
Section 79(b) of the Revised Administrative Code", said circular needs no (Production Manager of La Suerte Cigar & Cigarette Factory) testimony shall be
publication in the Official Gazette as erroneously argued by the petitioners. considered as the Procedure of inspection followed in all factories of petitioners,
thus: 7
Section 79(b) of the Revised Administrative Code so provides:
... before the cigarettes were removed from the factory, they were
Chiefs, of bureaus or offices, may, however, be authorized to invoiced by the revenue agents assigned there to check on the
promulgate circulars or information or instructions for the number of cases of cigarettes to be removed; revenue agents
government of the officers and employees in the interior checked the quantity of cigarettes manufactured, quantity of
administration of the business of each bureau or office, and in such cigarettes removed, strip stamps affixed; and early in the morning
case said circular shall not be required to be published. before the start of the operation, the revenue agents checked the
POLITICAL REV |Admin Law Assign 1|46

cigarette bobbins strip stamps and saw to it that cigarettes


removed were properly recorded in the books.

From the testimonies of other witnesses for petitioners, it was shown that revenue
agents and tobacco inspectors "saw to it that an raw materials for use in the
manufacture of the finished products were duly recorded; and in the process of
manufacture, all tobacco products found unfit for sales were segregated by the
factory employees thru the supervision of the revenue agents."

The CTA held that the foregoing belie petitioners' assertions that no actual
inspection was conducted to justify the collection of the tobacco inspection fees.
The findings of the Tax Court are duly supported by evidence. We find no cogent
reason to disturb the same. They are therefore binding on this Court.

Accordingly, the petition for review is hereby DISMISSED. Costs against petitioners.

SO ORDERED.
POLITICAL REV |Admin Law Assign 1|47

11. G.R. No. 187854 November 12, 2013 already been afforded the sufficient opportunity to confront, hear, and answer the
charges against him during the administrative inquiry. The petitioner was then
RAY PETER O. VIVO, Petitioner, allowed to submit his answer on March 26, 2002.
vs.
PHILIPPINE AMUSEMENT AND GAME CORPORATION Thereafter, the CIU tendered its investigation report to PAGCOR’s Adjudication
(PAGCOR), Respondent. Committee.9

DECISION The Adjudication Committee summoned the petitioner to appear before it on May
8, 2002 in order to address questions regarding his case. His counsel moved for
BERSAMIN, J.: the re-scheduling of the meeting because he would not be available on said date,
but the Adjudication Committee denied the request upon the reason that the
By petition for review on certiorari the petitioner seeks the review and reversal of presence of counsel was not necessary in the proceedings. His counsel moved for
the decision promulgated on February 27, 2009,1 whereby the Court of Appeals CA) the reconsideration of the denial of the request.10
reversed and set aside the resolutions of the Civil Service Commission CSC) dated
April 20072 and August 1, 2007.3 The petitioner received the letter dated May 15, 2002 from Ela informing him of the
resolution of the PAGCOR Board of Directors in its May 14, 2002 meeting to the
Also under review is the denial by the CA of the petitioner’s motion for effect that he was being dismissed from the service.11
reconsideration through the resolution promulgated May 11, 2009.4
After the petitioner’s motion for reconsideration vis-à-vis the resolution of the
Antecedents PAGCOR Board of Directors dismissing him from the service was denied, he
appealed his dismissal to the CSC.
The petitioner was employed by respondent Philippine Amusement and Gaming
Corporation (PAGCOR) on September 9, 1986, and was PAGCOR’s Managing Head In its resolution dated April 11, 2007, the CSC ruled that PAGCOR had violated the
of its Gaming Department at the time of his dismissal from office.5 On February 21, petitioner’s right to due process, and accordingly set aside his dismissal from the
2002, he received a letter from Teresita S. Ela, the Senior Managing Head of service, viz:
PAGCOR’s Human Resources Department, advising that he was being
administratively charged with gross misconduct, rumor-mongering, conduct In fine, the Commission finds that the right of Vivo to due process was violated
prejudicial to the interest of the company, and loss of trust and confidence;6 that when he was ousted from his office without the corresponding Board Resolution
he should submit a written explanation of the charges; and that he was at the same that should have set out the collegial decision of the PAGCOR Board of Directors.
time being placed under preventive suspension.7
WHEREFORE, foregoing premises considered, the appeal of Ray Peter O. Vivo is
On February 26, 2002, the petitioner’s counsel, replying to Ela’s letter, assailed the hereby GRANTED. The letters dated May 15, 2002 and June 5, 2002 issued by
propriety of the show-cause memorandum as well as the basis for placing the Teresita S. Ela, Senior Managing Head, Human Resource Department, Philippine
petitioner under preventive suspension. Amusement and Gaming Corporation (PAGCOR), are SET ASIDE.12

On March 14, 2002, the petitioner received the summons for him to attend an xxxx
administrative inquiry, instructing him to appear before PAGCOR’s Corporate
Investigation Unit (CIU) on March 15, 2002.8 At the petitioner’s request, however, The CSC remanded the case to PAGCOR with the instruction for PAGCOR to
the inquiry was conducted at his residence on said date. His statement was taken complete its reinvestigation within three months from receipt of the resolution.
in a question-and-answer format. He was also furnished the memorandum of
charges that recited the accusations against him and indicated the acts and After the CSC denied its motion for reconsideration, PAGCOR elevated the case to
omissions constituting his alleged offenses. The memorandum of charges was the CA.
based on the statements of PAGCOR personnel who had personal knowledge of the
accusations against him. However, when his counsel requested to be furnished On February 27, 2009, the CA promulgated its decision reversing and setting aside
copies of the statements, PAGCOR rejected the request on the ground that he had the decision of the CSC upon its finding that the petitioner had been accorded
POLITICAL REV |Admin Law Assign 1|48

procedural due process. The CA remanded the case to the CSC for the In administrative proceedings, the filing of charges and giving reasonable
determination of the appeal of the petitioner on the merits, specifically the issue of opportunity for the person so charged to answer the accusations against him
whether the dismissal had been for cause.13 constitute the minimum requirements of due process. The essence of due process
is simply to be heard, or as applied to administrative proceedings, an opportunity
Hence, this appeal. to explain one’s side, or an opportunity to seek a reconsideration of the action or
ruling complained of.18
Issue
The petitioner actively participated in the entire course of the investigation and
The petitioner raises the following issues, namely: hearings conducted by PAGCOR. He received the letter from Ela apprising him of
his being administratively charged for several offenses, and directing him to submit
1. The conclusion of the Court of Appeals that Petitioner’s right for (sic) an explanation in writing. He was later on properly summoned to appear before the
due process was not violated transgressed (sic) the fundamental rules in CIU, which conducted its proceedings in his own residence upon his request. During
administrative due process. the administrative inquiry, the CIU served him a copy of the memorandum of
charges, which detailed the accusations against him and specified the acts and
2. The Court of Appeals decision in setting aside CSC Resolutions Nos. omissions constituting his alleged offenses. He was also given the opportunity to
070732, dated 01 April 2007, and 071485, dated 01 August 2007, is appear before the Adjudication Committee to answer clarificatory questions. Lastly,
contrary to the Uniform Rules on Administrative Cases in the Civil Service he was informed through a memorandum of the decision of the Board of Directors
and settled jurisprudence.14 dismissing him from the service.

The petitioner would have the Court hold that PAGCOR’s failure to furnish him a In contrast, the petitioner could not dispute the observance of his right to due
copy of the Board Resolutions authorizing his dismissal and denying his motion for process by PAGCOR as set forth herein. He made no credible showing of the
reconsideration was a fatal and irreparable defect in the administrative proceedings supposed violation of his right to due process. He was heard through the written
that ultimately resulted in the illegality of his dismissal from the service. He further statement he submitted in response to the memorandum of the charges against
argues that he was denied due process by PAGCOR’s refusal to re-schedule the him. He actively participated in the administrative inquiry conducted by the CIU at
Adjudication Committee meeting in order to enable his counsel to attend the his own residence. He was afforded the opportunity to clarify his position in the
meeting with him, because the refusal constituted a violation of his right to be proceedings before the Adjudication Committee. He was also able to appeal the
represented by counsel. adverse decision to dismiss him from the service to the CSC. There is also no
question that PAGCOR complied with the twin-notice requirement prior to the
Ruling termination of his employment, the first notice being made through Ela’s letter
dated February 21, 2002 informing him on his being administratively charged for
The petition for review lacks merit. the offenses mentioned, and the second being through the letter dated May 15,
2002 advising him that PAGCOR’s Board of Directors had resolved to dismiss him
The observance of fairness in the conduct of any investigation is at the very heart from the service. It is settled that there is no denial of procedural due process
of procedural due process. The essence of due process is to be heard, and, as where the opportunity to be heard either through oral arguments or through
applied to administrative proceedings, this means a fair and reasonable opportunity pleadings is accorded.19
to explain one’s side, or an opportunity to seek a reconsideration of the action or
ruling complained of.15 Administrative due process cannot be fully equated with due The petitioner takes the CA to task for not considering: (1) PAGCOR’s failure to
process in its strict judicial sense, for in the former a formal or trial-type hearing is furnish him copies of the Board Resolutions referred to by Ela in the memorandum
not always necessary,16 and technical rules of procedure are not strictly applied. served on him, and (2) the refusal of PAGCOR to have him be represented by
Ledesma v. Court of Appeals17 elaborates on the well-established meaning of due counsel.
process in administrative proceedings in this wise:
The petitioner cannot be sustained.
x x x Due process, as a constitutional precept, does not always and in all situations
require a trial-type proceeding. Due process is satisfied when a person is notified As the CA found, and correctly so, the petitioner’s pleadings explicitly admitted that
of the charge against him and given an opportunity to explain or defend himself. his dismissal had been effected through board resolutions. That he was not
POLITICAL REV |Admin Law Assign 1|49

furnished copies of the board resolutions did not negate the existence of the The petitioner was not denied due process of law, for he was afforded the fair and
resolutions, and did not invalidate the contents of the board resolutions. It is reasonable opportunity to explain his side. That, to us, was sufficient to meet the
beyond question that he was duly informed of the subject-matter of the board requirements of due process.29 In Casimiro v. Tandog,30 the Court pronounced:
resolutions. Consequently, the CSC’s conclusion that his dismissal had been
unauthorized was unfounded. In any case, even assuming for the sake of argument The essence of procedural due process is embodied in the basic requirement of
that there was no board resolution approving his dismissal, the lapse did not render notice and a real opportunity to be heard. In administrative proceedings, such as
his dismissal illegal but unauthorized. However, as the CA succinctly put it, an in the case at bar, procedural due process simply means the opportunity to explain
unauthorized act could be the subject of ratification.20 one’s side or the opportunity to seek a reconsideration of the action or ruling
complained of. "To be heard" does not mean only verbal arguments in court; one
As regards the supposed denial of the petitioner’s right to counsel, it is underscored may be heard also thru pleadings. Where opportunity to be heard, either through
that PAGCOR denied his request to re-schedule the conference before the oral arguments or pleadings, is accorded, there is no denial of procedural due
Adjudication Committee because his counsel would not be available on the day fixed process.
for that purpose. In its letter denying the request, the Adjudication Committee
asserted that the presence of counsel was not indispensable in the conduct of its In administrative proceedings, procedural due process has been recognized to
proceedings. We find nothing objectionable in the denial of the request. In an include the following: (1) the right to actual or constructive notice of the institution
administrative proceeding like that conducted against the petitioner, a respondent of proceedings which may affect a respondent’s legal rights; (2) a real opportunity
has the option of engaging the services of counsel. As such, the right to counsel is to be heard personally or with the assistance of counsel, to present witnesses and
not imperative because administrative investigations are themselves inquiries evidence in one’s favor, and to defend one’s rights; (3) a tribunal vested with
conducted only to determine whether there are facts that merit disciplinary competent jurisdiction and so constituted as to afford a person charged
measures against erring public officers and employees, with the purpose of administratively a reasonable guarantee of honesty as well as impartiality; and (4)
maintaining the dignity of government service.21 a finding by said tribunal which is supported by substantial evidence submitted for
consideration during the hearing or contained in the records or made known to the
It is noteworthy, however, that the petitioner was actually assisted by his counsel parties affected.
from the outset of the administrative case against him. That counsel, Atty. Cesar
B. Jimenea Jr. of the Jimenea and Associates, ensured that the petitioner’s every In fine, the CA committed no reversible error in holding that P AGCOR had properly
concern reached PAGCOR, and that he was clarified of any matter affecting his observed the requirements of due process in its administrative proceedings against
rights all throughout the investigation and hearings. As the records indicate, his the petitioner. WHEREFORE, the Court DENIES the petition for review on certiorari
counsel sent to Ela a letter calling attention to supposedly palpable violations of his AFFIRMS the decision promulgated on February 27, 2009 by the Court of Appeals;
client’s right to due process, and objecting to Ela’s right to place his client under REQUIRES the Civil Service Commission to determine the petitioner's appeal on the
preventive suspension. The same counsel filed in behalf of the petitioner the letter- merits, particularly the issue of whether the dismissal was for cause; and ORDERS
requests to be furnished certain documents and records of the investigation,22 his the petitioner to pay the costs of suit.
answer to the memorandum of charges,23 the letter-request for the re-setting of
the conference before the Adjudication Committee,24 the reconsideration of the SO ORDERED.
letter denying the request,25 and the motion to reconsider the decision of the Board
of Directors to dismiss him from the service.26

In any event, any procedural defect in the proceedings taken against the petitioner
was cured by his filing of the motion for reconsideration and by his appealing the
adverse result to the CSC.1âwphi1 The Court held in Gonzales v. Civil Service
Commission27 that any defect in the observance of due process is cured by the filing
of a motion for reconsideration, and that denial of due process cannot be
successfully invoked by a party who was afforded the opportunity to be heard. In
Autencio v. Mañara,28 the Court observed that defects in procedural due process
may be cured when the party has been afforded the opportunity to appeal or to
seek reconsideration of the action or ruling complained of.
POLITICAL REV |Admin Law Assign 1|50

12. G.R. No. 127838 January 21, 1999 days from receipt. On June 17, 1992, respondent Lucas submitted a letter to Jose
P. Nitullano, assistant head, BOPI, denying the charges. According to Lucas, he did
CIVIL SERVICE COMMISSION, petitioner, not touch the thigh of complainant Linatok, that what transpired was that he
vs. accidentally brushed Linatok's leg when he reached for his shoes and that the same
JOSE J. LUCAS, respondent. was merely accidental and he did not intend nor was there malice when his hand
got in contact with Linatok's leg.
PARDO, J.:
On May 31, 1993, after a formal investigation by the BOPI, DA, the board issued a
The petition for review on certiorari before the Court assails the decision of the resolution finding respondent guilty of simple misconduct5 and recommending a
Court of Appeals1 which set aside the resolution of the Civil Service penalty of suspension for one (1) month and one (1) day. The Secretary of
Commission2 and reinstated that of the Board of Personnel Inquiry (BOPI for Agriculture approved the recommendation.
brevity), Office of the Secretary, Department of Agriculture,3 suspending
respondent for one month, for simple misconduct. In due time, respondent appealed the decision to the Civil Service Commission
(CSC). On July 7, 1994, the CSC issued a resolution finding respondent guilty of
To provide a factual backdrop of the case, a recital of the facts is necessary. grave misconduct and imposing on him the penalty of dismissal from the
service.6 Respondent moved for reconsideration but the CSC denied the motion.
On May 26, 1992, Raquel P. Linatok, an assistant information officer at the
Agricultural Information Division, Department of Agriculture (DA for brevity), filed Then, respondent appealed to the Court of Appeals. On October 29, 1996, the Court
with the office of the Secretary, DA, an affidavit-complaint against respondent Jose of Appeals promulgated its decision setting aside the resolution of the CSC and
J. Lucas, a photographer of the same agency, for misconduct. reinstating the resolution of the BOPI, DA, stating thus: "It is true that the Civil
Service Act does not define grave and simple misconduct. There is, however, no
Raquel described the incident in the following manner: question that these offenses fall under different categories. This is clear from a
perusal of memorandum circular No. 49-89 dated August 3, 1989 (also known as
While standing before a mirror, near the office door of Jose J. the guidelines in the application of penalties in administrative cases) itself which
Lucas, Raquel noticed a chair at her right side which Mr. Jose classifies administrative offenses into three: grave, less grave and light offenses.
Lucas, at that very instant used to sit upon. Thereafter, Mr. Lucas The charge of grave misconduct falls under the classification of grave offenses while
bent to reach for his shoe. At that moment she felt Mr. Lucas' hand simple misconduct is classified as a less grave offense. The former is punishable by
touching her thigh and running down his palm up to her ankle. She dismissal while the latter is punishable either by suspension (one month and one
was shocked and suddenly faced Mr. Lucas and admonished him day to six months), if it is the first offense; or by dismissal, if it is the second. Thus,
not to do it again or she will kick him. But Lucas touched her again they should be treated as separate and distinct offenses.7
and so she hit Mr. Lucas. Suddenly Mr. Lucas shouted at her saying
"lumabas ka na at huwag na huwag ka nang papasok dito kahit The Court of Appeals further ruled that "a basic requirement of due process on the
kailan" A verbal exchange then ensued and respondent Lucas other hand is that a person must be duly informed of the charges against him
grabbed Raquel by the arm and shoved her towards the door (Felicito Sajonas vs. National Labor Relations Commission, 183 SCRA 182). In the
causing her to stumble, her both hands protected her face from instant case however, Lucas came to know of the modification of the charge against
smashing upon the door. him only when he received notice of the resolution dismissing him from the service.8

Mr. Lucas, bent on literally throwing the affiant out of the office, Hence, this petition.
grabbed her the second time while she attempted to regain her
posture after being pushed the first time. . . . while doing all this, The issues are (a) whether respondent Lucas was denied due process when the
Mr. Lucas shouted at the affiant, saying, "labas, huwag ka nang CSC found him guilty of grave misconduct on a charge of simple misconduct, and
papasok dito kahit kailan".4 (b) whether the act complained of constitutes grave misconduct.

On June 8, 1992, the Board of Personnel Inquiry, DA, issued a summons requiring Petitioner anchors its position on the view that "the formal charge against a
respondent to answer the complaint, not to file a motion to dismiss, within five (5) respondent in an administrative case need not be drafted with the precision of an
POLITICAL REV |Admin Law Assign 1|51

information in a criminal prosecution. It is sufficient that he is apprised of the


substance of the charge against him; what is controlling is the allegation of the acts
complained of, and not the designation of the offense.9

We deny the petition.

As well stated by the Court of Appeals, there is an existing guideline of the CSC
distinguishing simple and grave misconduct. In the case of Landrito vs. Civil Service
Commission, we held that "in grave misconduct as distinguished from simple
misconduct, the elements of corruption, clear intent to violate the law or flagrant
disregard of established rule, must be manifest,10 which is obviously lacking in
respondent's case. Respondent maintains that as he was charged with simple
misconduct, the CSC deprived him of his right to due process by convicting him of
grave misconduct.

We sustain the ruling of the Court of Appeals11 that: (a) a basic requirement of due
process is that a person must be duly informed of the charges against him12 and
that (b) a person can not be convicted of a crime with which he was not charged.13

Administrative proceedings are not exempt from basic and fundamental procedural
principles, such as the right to due process in investigations and hearings.14

The right to substantive and procedural due process is applicable in administrative


proceedings.15

Of course, we do not in any way condone respondent's act. Even in jest, he had no
right to touch complainant's leg. However, under the circumstances, such act is not
constitutive of grave misconduct, in the absence of proof that respondent was
maliciously motivated. We note that respondent has been in the service for twenty
(20) years and this is his first offense.

IN VIEW WHEREOF, the Court hereby DENIES the petition for review
on certiorari and AFFIRMS the decision of the Court of Appeals in CA-G.R. SP No.
37137.1âwphi1.nêt

No cost.

SO ORDERED.
POLITICAL REV |Admin Law Assign 1|52

13. G.R. No. 198140 P50,000.00 but SPO1 Sistemio rejected it outright; and that, eventually, they
agreed on P200,000.00.
IA1 ERWIN L. MAGCAMIT, Petitioner,
vs. After the agreed monetary consideration was produced, the PDEA agents allegedly
INTERNAL AFFAIRS SERVICE - PHILIPPINE DRUG ENFORCEMENT instructed Jaen’s son, Delfin, to wait at the ATM machine outside PDEA. Jaen still
AGENCY, as represented by SI V ROMEO M. ENRIQUEZ AND DIRECTOR remained in detention after a lapse of several hours.
GENERAL DIONISIO R. SANTIAGO, Respondents.
The narration was reinforced by the sworn statements dated April 15,
DECISION 2008 and April 17, 2008, of Compliance Investigator I Dolorsindo M. Paner (CI
Paner) who recalled that IO2 Renato Infante (IO2 Infante) told him to meet him at
BRION, J.: the office for an important matter about their operation; and that when IO2 Infante
arrived, he handed the money to CI Paner who then counted it on the spot. This
We resolve the petition for review on certiorari under Rule 45 of the Rules of incident was allegedly captured by a surveillance camera.
Court1 filed by IA1 Erwin L. Magcamit (Magcamit) from the March 17, 2011
decision2 and the August 9, 2011 Resolution3 of the Court of Appeals (CA) in CA- On July 10, 2008, Magcamit filed his motion for reconsideration arguing that the
G.R. SP No. 108281. The CA upheld the March 17, 2009 decision of the Civil Service IAS-PDEA committed errors of law and/or irregularities prejudicial to his interest;
Commission (CSC) denying Magcamit's appeal from the May 20, 2008 its decision, too, was not supported by the evidence on record.
memorandum of the Internal Affairs Service of the Philippine Drug Enforcement
Agency (JAS-PDEA), which found Magcamit guilty of grave misconduct and, Aside from the procedural lapses Magcamit claimed the IAS-PDEA had
consequently, recommending his dismissal from the service. committed, he raised the fact that his name never came up in the sworn
statements submitted to SI V Enriquez. Moreover, he argued that the
THE FACTUAL ANTECEDENTS application of the "doctrine of implied conspiracy" was misplaced because the
evidence on record did not show any act showing that he participated in the alleged
In a letter dated April 13, 2008, addressed to Director General Dionisio R. Santiago, extortion.
a person named Delfin gave information about an alleged extortion done to his
mother by Magcamit and other PDEA agents. The PDEA agents denied the On July 23, 2008, SI V Enriquez denied the motion for reconsideration of
irregularities imputed to them and maintained that the letter-complaint was made Magcamit and his co-agents as they had been duly afforded administrative due
only to destroy their reputation. process and had been given a fair and reasonable opportunity to explain their side.
He added that the absence of a preliminary investigation was not fatal to their case.
On May 5, 2008, Magcamit and his co-agents, namely, IO3 Carlo Aldeon, IO2 Lastly, he maintained that direct proof is not necessary to establish conspiracy as
Renato Infante, IO2 Ryan Alfaro, and IO2 Apolinario Mationg, Jr., were formally long as it is shown that the parties demonstrate they concur with the criminal design
charged with Grave Misconduct for demanding and/or obtaining P200,000.00 from and its objective.
Luciana M. Jaen (Jaen) in exchange for her release after she was apprehended in a
buy-bust operation in Lipa City. After they had submitted their Answer, their case Magcamit responded by filing a notice of appeal and elevating his case to the CSC.
was submitted for recommendation and action.
In its March 17, 2009 decision, the CSC denied Magcamit’s appeal and affirmed
In a memorandum dated May 20, 2008, Special Investigator V Romeo M. Enriquez his dismissal from the civil service. It ruled that administrative tribunals exercising
(SI V Enriquez) found Magcamit and his co-agents liable for grave misconduct and quasi-judicial powers – such as the IAS-PDEA – are unfettered by the rigidity of
recommended that they be dismissed from the civil service. Accordingly, they were certain procedural requirements especially when due process has been
dismissed on June 5, 2008. fundamentally and essentially observed. It found that Magcamit was positively
identified by CI Paner in his sworn statement as the person who identified the
SI V Enriquez gave credence to Jaen’s narration of events that when she sought members of the group who received their respective shares from the P200,000.00,
help from the team leader of the buy-bust team, she was referred to SPO1 Peter thus, establishing his participation in the extortion. The CSC noted that Magcamit
Sistemio (SPO1 Sistemio) as the person who would facilitate her release; that SPO1 failed to controvert this allegation against him.
Sistemio bluntly demanded money in exchange; that she had initially offered
POLITICAL REV |Admin Law Assign 1|53

Reiterating the grounds he relied upon in his appeal to the CSC, Magcamit filed a complaint executed by CI Paner on May 7, 2008, that was only attached to the
petition for review under Rule 43 with the CA, imputing error on the part of the CSC IAS-PDEA’s comment before the CSC.
in affirming his dismissal from the service.
As to his alleged participation in the extortion, Magcamit alleges that he never had
THE CA DECISION any discussion with CI Paner about each agent’s share in the P200,000.00. He
argues that he could not have refuted the allegation against him since he
In its March 17, 2011 decision, the CA denied the petition for review and upheld was not even aware of CI Paner’s sworn statement until the case was
the March 17, 2009 CSC decision. brought up before the CSC.

The CA held that the CSC, in investigating complaints against civil servants, is not Magcamit claims support for his case after the dismissal of the criminal complaint
bound by technical rules of procedure and evidence applicable in judicial filed against him and his co-agents. In its June 18, 2010 resolution, the Quezon
proceedings; that rules of procedure are to be construed liberally to promote their City Prosecutor’s Office found the evidence against them insufficient to prove that
objective and to assist the parties in obtaining a just, speedy, and inexpensive they requested or received any money from Jaen.
determination of their respective claims and defenses.
Finally, Magcamit maintains that the purported surveillance video is inadmissible
The CA found that the CSC correctly appreciated CI Paner’s sworn statement which as evidence because it was not authenticated nor shown to him.
described Magcamit’s link to the extortion. The CA said that apart from his bare
and self-serving claim, Magcamit failed to show that CI Paner was actuated by ill OUR RULING
motive or hate in imputing a serious offense to him.
We GRANT the present petition because Magcamit’s dismissal was unsupported by
On August 9, 2011, the CA denied Magcamit’s motion for reconsideration; hence, substantial evidence.
the present petition for review on certiorari before this Court.
Although Magcamit assails that the letter-complaint should not have been
THE PETITION entertained to begin with as it was not in accord with the Revised Rules on
Administrative Cases in the Civil Service (RACCS),4 we do not find any need to
Magcamit filed the present petition on the following grounds: dwell on this point. The administrative complaint was initiated when Jaen and Delfin
executed sworn statements and filed them with the IAS-PDEA. As the CA correctly
1. his right to due process was denied because gross irregularities attended pointed out, the letter-complaint did not, by itself, commence the administrative
the administrative investigation conducted by the IAS-PDEA; and proceedings against Magcamit; it merely triggered a fact-finding investigation by
the IAS-PDEA. Accordingly, these sworn statements – together with the letter-
2. the evidence on record does not support his dismissal. complaint – were used as pieces of evidence to build a prima facie case for extortion
warranting a formal charge for grave misconduct.
Magcamit contends that the anonymous letter-complaint of a certain Delfin should
not have been given due course as it was not corroborated by any documentary or Administrative determinations of contested cases are by their nature quasi-judicial;
direct evidence and there was no obvious truth to it. Worse, the letter-complaint there is no requirement for strict adherence to technical rules that are observed in
had no narration of relevant and material facts showing the acts or omission truly judicial proceedings.5 As a rule, technical rules of procedure and evidence are
allegedly committed by Magcamit and his co-agents. Further, the letter-complaint relaxed in administrative proceedings in order "to assist the parties in obtaining
only referred to him as "Erwin" and did not specifically identify him. just, speedy and inexpensive determination of their respective claims and
defenses."6 By relaxing technical rules, administrative agencies are, thus, given
Magcamit claims that he was deprived of his right to seek a formal investigation leeway in coming up with a decision.
because the IAS-PDEA deliberately failed to inform him of this right.
Nonetheless, in deciding disciplinary cases pursuant to their quasi-judicial powers,
Magcamit questions how the IAS-PDEA never presented him with pieces of evidence administrative agencies must still comply with the fundamental principle of due
– specifically CI Paner’s sworn statement – that were considered against him. He process. Administrative tribunals exercising quasi-judicial powers are unfettered by
emphasizes that the CSC and the CA affirmed his dismissal based on an affidavit of the rigidity of certain procedural requirements, subject to the observance of
POLITICAL REV |Admin Law Assign 1|54

fundamental and essential requirements of due process in justiciable cases The first of the enumerated rights pertains to the substantive rights of a party at
presented before them.7 the hearing stage of the proceedings.10

Due process in administrative cases, in essence, is simply an opportunity to explain The second, third, fourth, fifth, and sixth aspects of the Ang Tibay requirements
one’s side or to seek a reconsideration of the action or ruling. For as long as the are reinforcements of the right to a hearing and are the inviolable rights applicable
parties were given fair and reasonable opportunity to be heard before judgment at the deliberative stage, as the decision maker decides on the evidence
was rendered, the demands of due process were sufficiently met.8 presented during the hearing.11 These standards set forth the guiding
considerations in deliberating on the case and are the material and substantial
The cardinal primary rights and principles in administrative proceedings that must components of decision making.12
be respected are those outlined in the landmark case of Ang Tibay v. Court of
Industrial Relations,9 quoted below: Finally, the last requirement, relating to the form and substance of the decision of
a quasi-judicial body, further complements the hearing and decision-making due
(1) The first of these rights is the right to a hearing, which includes the process rights and is similar in substance to the constitutional requirement that a
right of the party interested or affected to present his own case and submit decision of a court must state distinctly the facts and the law upon which it is
evidence in support thereof. based.13

(2) Not only must the party be given an opportunity to present his case At the hearing stage, while Magcamit was never afforded a formal investigation, we
and to adduce evidence tending to establish the rights which he asserts have consistently ruled that there is no violation of procedural due process even if
but the tribunal must consider the evidence presented. no formal or trial-type hearing was conducted, where the party was given a chance
to explain his side of the controversy.
(3) While the duty to deliberate does not impose the obligation to decide
right, it does imply a necessity which cannot be disregarded, namely, that Before the IAS-PDEA, Magcamit had the opportunity to deny and controvert the
of having something to support its decision. A decision with absolutely complaint against him when he filed his reply to the letter-complaint and his answer
nothing to support it is a nullity, a place when directly attached. to the formal charge. Dissatisfied with the IAS-PDEA’s decision, he elevated his
case to the CSC which likewise found him guilty of conspiring with his co-agents,
(4) Not only must there be some evidence to support a finding or rendering him liable for gross misconduct. From these developments, it can hardly
conclusion, but the evidence must be substantial. "Substantial evidence is be said that the IAS-PDEA and the CSC denied Magcamit his opportunity to be
more than a mere scintilla. It means such relevant evidence as a heard.
reasonable mind might accept as adequate to support a conclusion."
In addition, Magcamit was duly represented by counsel who could properly apprise
(5) The decision must be rendered on the evidence presented at the him of what he is entitled to under law and jurisprudence.1âwphi1 Thus, he cannot
hearing, or at least contained in the record and disclosed to the parties claim that he was deprived of his right to a formal hearing because the IAS-PDEA
affected. failed to inform him of such right.

(6) The Court of Industrial Relations or any of its judges, therefore, must With the issue on due process at the hearing stage resolved, we now move on to
act on its or his own independent consideration of the law and facts of the discuss the merits of the petition before us.
controversy, and not simply accept the views of a subordinate in arriving
at a decision. Claiming that he was not involved in the extortion, Magcamit argues that the CSC
and the CA misappreciated the facts when they considered the affidavit of complaint
(7) The Court of Industrial Relations should, in all controversial questions, CI Paner executed on May 7, 2008, as substantial evidence supporting the
render its decision in such a manner that the parties to the proceeding can conclusion that he conspired with his co-agents. This issue involves a question of
know the various issues involved, and the reasons for the decisions fact as there is need for a calibration of the evidence, considering mainly the
rendered. The performance of this duty is inseparable from the authority credibility of witnesses and the existence and the relevancy of specific surrounding
conferred upon it. circumstances, their relation to one another and to the whole, and the probabilities
of the situation.14
POLITICAL REV |Admin Law Assign 1|55

In cases brought before us via a petition for review on certiorari, we are limited to As the CSC did, the CA ruled that Magcamit participated in the extortion on the
the review of errors of law.15 We, however, may review the findings of fact when basis of Paner’s May 7, 2008 alone. Accordingly, it affirmed the CSC’s
they fail to consider relevant facts that, if properly taken into account, would justify resolution.1âwphi1
a different conclusion or when there is serious ground to believe that a possible
miscarriage of justice would result.16 Under these circumstances, the CA erred in affirming the CSC’s dismissal of the
respondent on the basis of Paner’s May 7, 2008 affidavit – a document that was
We recall that only the April 17, 2008 affidavit of Jaen and the April 17, 2008 not part of the proceedings before the IAS-PDEA.
affidavit of Delfin were attached to the formal charge for grave misconduct against
Magcamit and four (4)17 other members of the PDEA‒Special Enforcement Service Given how the evidence against him came out, we find that Magcamit could not
(SES). This formal charge required them to submit their respective position papers have adequately and fully disputed the allegations against him since during the
on the administrative charge. Notably, both affidavits never mentioned the administrative investigation he was not properly apprised of all the evidence against
name of Magcamit. him. We point out that Magcamit could not have refuted the May 7, 2008 affidavit
of Paner, which was the sole basis of the CSC’s and the CA’s finding of Magcamit’s
SI V Enriquez’s memorandum/decision dated May 20, 2008 – which found Magcamit liability; notably, the formal charge requiring him and his co-accused to file their
and his four co-accused guilty of grave misconduct, and recommended their position papers was dated May 5, 2008. Corollarily, Magcamit and his co-agents
dismissal from the service – relied on the affidavits of CI Paner dated April 15, 2008 were not even furnished a copy of the affidavits of CI Paner dated April 15, 2008
and April 17, 2008, respectively, which it considered to have "reinforced the and April 17, 2008 before the recommendation for dismissal came out. Magcamit
allegations" of Jaen and her son, Delfin. CI Paner’s two affidavits were never was thus blindsided and forced to deal with pieces of evidence he did not even know
shown to Magcamit. At any rate, CI Paner’s two affidavits, like the affidavits existed.
of Jaen and Delfin, did not mention Magcamit.
Thus, the requirement that "[t]he decision must be rendered on the evidence
Probably realizing that the April 17, 2008 affidavit of Jaen, the April 17, 2008 presented at the hearing, or at least contained in the record AND disclosed to
affidavit of Delfin, and the April 15, 2008 and April 17, 2008 affidavits of CI Paner the parties affected," was not complied with. Magcamit was not properly apprised
did not mention the involvement of Magcamit in the extortion, the CSC’s Resolution of the evidence presented against him, which evidence were eventually made the
No. 090431 dated March 17, 2009, used as basis another affidavit of CI bases of the decision finding him guilty of grave misconduct and recommending his
Paner (dated May 7, 2008) in affirming the May 20, 2008 decision of the IAS-PDEA. dismissal.
Curiously, the CSC termed this affidavit as CI Paner’s ‘original affidavit’ although it
was the third affidavit that CI Paner had executed. Although, in the past, we have held that the right to due process of a respondent
in an administrative case is not violated if he filed a motion for reconsideration to
The evidence on record shows that CI Paner executed three (3) affidavits with refute the evidence against him, the present case should be carefully examined for
different dates,18 relating to the manner the members of the PDEA-SES tried to purposes of the application of this rule. Here, the evidence of Magcamit’s
give him a share of the P200,000.00 they extorted from Jaen. It must be noted, participation was made available to him only after he had elevated the case to the
however, that it was only the Affidavit of Complaint dated May 7, 2008, that linked CSC. Prior to that, or when the IAS-PDEA came up with the decision finding him
Magcamit to the scheme. Curiously, this affidavit was never mentioned, despite guilty of gross misconduct, there was no substantial evidence proving Magcamit
being a more complete narration of what transpired, in SI V Enriquez’ was even involved.
recommendation dated May 20, 2008. In fact, the investigating officer referred only
to the affidavits dated April 15, 2008 and April 17, 2008.19 We consider, too, that even if we take into account CI Paner’s May 7, 2008 affidavit,
we find this document to be inadequate to hold – even by standards of substantial
Surprisingly, the CSC ruled that the statements of CI Paner in his May 7, 2008 evidence – that Magcamit participated in the PDEA’s extortion activities.
affidavit "was never controverted by Magcamit" although the latter had not been
furnished this document. It was only when Magcamit requested for certified true We note that the CSC and the CA linked Magcamit to the alleged extortion in
copies of the Comment and the other documents submitted by the IAS-PDEA to the paragraph 13 of CI Paner' s May 7, 2008 affidavit of complaint, which reads:
CSC that he discovered the existence of Paner’s May 7, 2008 affidavit.
13. That pretending nothing had happened and yet projecting to the group that I
am a bit apprehensive as to the evident inequality in the sharing of the extorted
POLITICAL REV |Admin Law Assign 1|56

money from subject Jaen, I was able to talk with Agent Erwin Magcamit, one of the
members of the arresting team, and asked the latter as to how the group came up
with the Php21,500.00 sharing for each member out of the Php200,000.00; from
which Agent Magcamit simply said to me that such was the sharing and everybody
except me seemed to have consented; in addition thereto, Agent Magcamit vividly
mentioned all other members who got their share of the Php21,500.00,
namely, [1] Carlo S. Aldeon, [2] P03 Emerson Adaviles, [3], P02 Reywin
Bariuad, [4] 102 Renato Infante, [S] 102 Apolinario Mationg, [6] 102 Ryan
Alfaro, and [7] P03 Peter Sistemio.20

We discern no showing from this allegation that Magcamit extorted money from
Jaen, or that he was among those who took part in the division of the money
allegedly extorted from Jaen. For conspiracy to exist, it must be proven or at least
inferred from the acts of the alleged perpetrator before, during, and after the
commission of the crime. It cannot simply be surmised that conspiracy existed
because Magcamit was part of the team that took part in the buy-bust operation
which resulted in Jaen's arrest. In other words, respondents failed to pinpoint
Magcamit's participation in the extortion that would make him administratively
liable.

After evaluating the totality of evidence on record, we find that the records are
bereft of substantial evidence to support the conclusion that Magcamit should be
held administratively liable for grave misconduct; Magcamit was dismissed from
the service based on evidence that had not been disclosed to him. By affirming this
dismissal, the CA committed a grave reversible error.

WHEREFORE, premises considered, we GRANT the present petition.1avvphi1 The


March 17, 2011 decision and the August 9, 2011 resolution of the Court of Appeals
in CA-G.R. SP No. 108281 are hereby REVERSED and SET ASIDE. The Philippine
Drug Enforcement Agency is ORDERED to reinstate IA1 Erwin L. Magcamit to his
previous position without loss of seniority rights and with full payment of his
salaries, backwages, and benefits from the time of his dismissal from the service
up to his reinstatement.

SO ORDERED.
POLITICAL REV |Admin Law Assign 1|57

14. G.R. No. 143964 July 26, 2004 case allows the Court to evaluate the role of the National Telecommunications
Commission ("NTC") in this day and age.
GLOBE TELECOM, INC., petitioner,
vs. The NTC is at the forefront of the government response to the avalanche of
THE NATIONAL TELECOMMUNICATIONS COMMISSION, COMMISSIONER inventions and innovations in the dynamic telecommunications field. Every
JOSEPH A. SANTIAGO, DEPUTY COMMISSIONERS AURELIO M. UMALI and regulatory action it undertakes is of keen interest not only to industry analysts and
NESTOR DACANAY, and SMART COMMUNICATIONS, INC.respondents. players but to the public at large. The intensive scrutiny is understandable given
the high financial stakes involved and the inexorable impact on consumers. And
DECISION its rulings are traditionally accorded respect even by the courts, owing traditional
deference to administrative agencies equipped with special knowledge, experience
TINGA, J.: and capability to hear and determine promptly disputes on technical matters.9

Telecommunications services are affected by a high degree of public At the same time, judicial review of actions of administrative agencies is essential,
interest.1 Telephone companies have historically been regulated as common as a check on the unique powers vested unto these instrumentalities.10 Review is
carriers,2 and indeed, the 1936 Public Service Act has classified wire or wireless available to reverse the findings of the specialized administrative agency if the
communications systems as a "public service," along with other common carriers.3 record before the Court clearly precludes the agency's decision from being justified
by a fair estimate of the worth of the testimony of witnesses or its informed
Yet with the advent of rapid technological changes affecting the telecommunications judgment on matters within its special competence, or both.11 Review may also be
industry, there has been a marked reevaluation of the traditional paradigm warranted to ensure that the NTC or similarly empowered agencies act within the
governing state regulation over telecommunications. For example, the United confines of their legal mandate and conform to the demands of due process and
States Federal Communications Commission has chosen not to impose strict equal protection.12
common regulations on incumbent cellular providers, choosing instead to let go of
the reins and rely on market forces to govern pricing and service terms.4 Antecedent Facts

In the Philippines, a similar paradigm shift can be discerned with the passage of Globe and private respondent Smart Communications, Inc. ("Smart") are both
the Public Telecommunications Act of 1995 ("PTA"). As noted by one of the law's grantees of valid and subsisting legislative franchises,13 authorizing them, among
principal authors, Sen. John Osmeña, under prior laws, the government regulated others, to operate a Cellular Mobile Telephone System ("CMTS"), utilizing
the entry of pricing and operation of all public telecommunications entities. The new the Global System for Mobile Communication ("GSM") technology.14 Among the
law proposed to dismantle gradually the barriers to entry, replace government inherent services supported by the GSM network is the Short Message
control on price and income with market instruments, and shift the focus of Services (SMS),15 also known colloquially as "texting," which has attained immense
government's intervention towards ensuring service standards and protection of popularity in the Philippines as a mode of electronic communication.
customers.5 Towards this goal, Article II, Section 8 of the PTA sets forth the
regulatory logic, mandating that "a healthy competitive environment shall be On 4 June 1999, Smart filed a Complaint16 with public respondent NTC, praying that
fostered, one in which telecommunications carriers are free to make business NTC order the immediate interconnection of Smart's and Globe's GSM networks,
decisions and to interact with one another in providing telecommunications particularly their respective SMS or texting services. The Complaint arose from the
services, with the end in view of encouraging their financial viability while inability of the two leading CMTS providers to effect interconnection. Smart alleged
maintaining affordable rates."6 The statute itself defines the role of the government that Globe, with evident bad faith and malice, refused to grant Smart's request for
to "promote a fair, efficient and responsive market to stimulate growth and the interconnection of SMS.17
development of the telecommunications facilities and services."7
On 7 June 1999, NTC issued a Show Cause Order, informing Globe of
The present petition dramatizes to a degree the clash of philosophies between the Complaint, specifically the allegations therein that, "among others…despite
traditional notions of regulation and the au corant trend to deregulation. formal request made by Smart to Globe for the interconnection of their respective
Appropriately, it involves the most ubiquitous feature of the mobile phone, Short SMS or text messaging services, Globe, with evident bad faith, malice and to the
Messaging Service ("SMS")8 or "text messaging," which has been transformed from prejudice of Smart and Globe and the public in general, refused to grant Smart's
a mere technological fad into a vital means of communication. And propitiously, the request for the interconnection of their respective SMS or text messaging services,
POLITICAL REV |Admin Law Assign 1|58

in violation of the mandate of Republic Act 7925, Executive Order No. 39, and their In its Memorandum, Globe also called the attention of the appellate court to the
respective implementing rules and regulations."18 earlier decision of NTC pertaining to the application of Isla Communications Co.,
Inc. ("Islacom") to provide SMS, allegedly holding that SMS is a deregulated special
Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing grounds feature of the telephone network and therefore does not require the prior approval
that the Complaint was premature, Smart's failure to comply with the conditions of NTC.27Globe alleged that its departure from its ruling in the Islacom case
precedent required in Section 6 of NTC Memorandum Circular 9-7-93,19 and its constitutes a denial of equal protection of the law.
omission of the mandatory Certification of Non-Forum Shopping.20 Smart
responded that it had already submitted the voluminous documents asked by Globe On 22 November 1999, a Decision28 was promulgated by the Former Special Fifth
in connection with other interconnection agreements between the two carriers, and Division of the Court of Appeals29affirming in toto the NTC Order. Interestingly, on
that with those voluminous documents the interconnection of the SMS systems the same day Globe and Smart voluntarily agreed to interconnect their respective
could be expedited by merely amending the parties' existing CMTS-to-CMTS SMS systems, and the interconnection was effected at midnight of that day.30
interconnection agreements.21
Yet, on 21 December 1999, Globe filed a Motion for Partial
On 19 July 1999, NTC issued the Order now subject of the present petition. In Reconsideration,31 seeking to reconsider only the portion of the Decision that
the Order, after noting that both Smart and Globe were "equally blameworthy" for upheld NTC's finding that Globe lacked the authority to provide SMS and its
their lack of cooperation in the submission of the documentation required for imposition of a fine. Both Smart and NTC filed their respective comments, stressing
interconnection and for having "unduly maneuvered the situation into the present therein that Globe indeed lacked the authority to provide SMS.32 In reply, Globe
impasse,"22 NTC held that since SMS falls squarely within the definition of "value- asserted that the more salient issue was whether NTC complied with its own Rules
added service" or "enhanced-service" given in NTC Memorandum Circular No. 8- of Practice and Procedure before making the finding of want of authority and
9-95 (MC No. 8-9-95) the implementation of SMS interconnection is mandatory imposing the fine. Globe also reiterated that it has been legally operating its SMS
pursuant to Executive Order (E.O.) No. 59.23 system since 1994 and that SMS being a deregulated special feature of the
telephone network it may operate SMS without prior approval of NTC.
The NTC also declared that both Smart and Globe have been providing SMS without
authority from it, in violation of Section 420 (f) of MC No. 8-9-95 which requires After the Court of Appeals denied the Motion for Partial Reconsideration,33 Globe
PTEs intending to provide value-added services (VAS) to secure prior approval from elevated the controversy to this Court.
NTC through an administrative process. Yet, in view of what it noted as the
"peculiar circumstances" of the case, NTC refrained from issuing a Show Cause Globe contends that the Court of Appeals erred in holding that the NTC has the
Order with a Cease and Desist Order, and instead directed the parties to secure the power under Section 17 of the Public Service Law34 to subject Globe to an
requisite authority to provide SMS within thirty (30) days, subject to the payment administrative sanction and a fine without prior notice and hearing in violation of
of fine in the amount of two hundred pesos (P200.00) "from the date of violation the due process requirements; that specifically due process was denied Globe
and for every day during which such violation continues."24 because the hearings actually conducted dwelt on different issues; and, the
appellate court erred in holding that any possible violation of due process
Globe filed with the Court of Appeals a Petition for Certiorari and Prohibition25 to committed by NTC was cured by the fact that NTC refrained from issuing a Show
nullify and set aside the Order and to prohibit NTC from taking any further action Cause Order with a Cease and Desist Order, directing instead the parties to secure
in the case. It reiterated its previous arguments that the complaint should have the requisite authority within thirty days. Globe also contends that in treating it
been dismissed for failure to comply with conditions precedent and the non-forum differently from other carriers providing SMS the Court of Appeals denied it equal
shopping rule. It also claimed that NTC acted without jurisdiction in declaring that protection of the law.
it had no authority to render SMS, pointing out that the matter was not raised as
an issue before it at all. Finally, Globe alleged that the Order is a patent nullity as The case was called for oral argument on 22 March 2004. Significantly, Smart has
it imposed an administrative penalty for an offense for which neither it nor Smart deviated from its original position. It no longer prays that the Court affirm the
was sufficiently charged nor heard on in violation of their right to due process.26 assailed Decision and Order, and the twin rulings therein that SMS is VAS and that
Globe was required to secure prior authority before offering SMS. Instead, Smart
The Court of Appeals issued a Temporary Restraining Order on 31 August 1999. now argues that SMS is not VAS and that NTC may not legally require either Smart
or Globe to secure prior approval before providing SMS. Smart has also chosen not
to make any submission on Globe's claim of due process violations.35
POLITICAL REV |Admin Law Assign 1|59

As presented during the oral arguments, the central issues are: (1) whether NTC MC No. 14-11-97 is a deregulated service that needs no prior authorization from
may legally require Globe to secure NTC approval before it continues providing NTC. Globe further contends that NTC's requiring it to secure prior authorization
SMS; (2) whether SMS is a VAS under the PTA, or special feature under NTC MC violates the due process and equal protection clauses, since earlier it had exempted
No. 14-11-97; and (3) whether NTC acted with due process in levying the fine the similarly situated Islacom from securing NTC approval prior to its operation of
against Globe.36 Another issue is also raised – whether Globe should have first filed SMS.45
a motion for reconsideration before the NTC, but this relatively minor question can
be resolved in brief. On the other hand, the assailed NTC Decision invokes the NTC Implementing Rules
of the PTA (MC No. 8-9-95) to justify its claim that Globe and Smart need to secure
Necessity of Filing Motion for Reconsideration prior authority from the NTC before offering SMS.

Globe deliberately did not file a motion for reconsideration with the NTC before The statutory basis for the NTC's determination must be thoroughly examined. Our
elevating the matter to the Court of Appeals via a petition for certiorari. Generally, first level of inquiry should be into the PTA. It is the authority behind MC No. 8-9-
a motion for reconsideration is a prerequisite for the filing of a petition for 95. It is also the law that governs all public telecommunications entities ("PTEs") in
certiorari.37 In opting not to file the motion for reconsideration, Globe asserted the Philippines.46
before the Court of Appeals that the case fell within the exceptions to the general
rule.38 The appellate court in the questioned Decision cited the purported Public Telecommunications Act
procedural defect,39 yet chose anyway to rule on the merits as well.
The PTA has not strictly adopted laissez-faire as its underlying philosophy to
Globe's election to elevate the case directly to the Court of Appeals, skipping the promote the telecommunications industry. In fact, the law imposes strictures that
standard motion for reconsideration, is not a mortal mistake. According to Globe, restrain within reason how PTEs conduct their business. For example, it requires
the Order is a patent nullity, it being violative of due process; the motion for that any access charge/revenue sharing arrangements between all interconnecting
reconsideration was a useless or idle ceremony; and, the issue raised purely one of carriers that are entered into have to be submitted for approval to NTC.47 Each
law.40Indeed, the circumstances adverted to are among the recognized exceptions "telecommunication category"48 established in the PTA is governed by detailed
to the general rule.41 Besides, the issues presented are of relative importance and regulations. Also, international carriers and operators of mobile radio services are
novelty42 so much so that it is judicious for the Court to resolve them on the merits required to provide local exchange service in unserved or underserved areas.49
instead of hiding behind procedural fineries.
At the same time, the general thrust of the PTA is towards modernizing the legal
The Merits framework for the telecommunications services sector. The transmutation has
become necessary due to the rapid changes as well within the telecommunications
Now, on to the merits of the petition. industry. As noted by Senator Osmeña in his sponsorship speech:

Deregulation is the mantra in this age of globalization. Globe invokes it in support [D]ramatic developments during the last 15 years in the field of
of its claim that it need not secure prior authority from NTC in order to operate semiconductors have drastically changed the telecommunications sector –
SMS. The claim has to be evaluated carefully. After all, deregulation is not a magic worldwide as well as in the Philippines. New technologies have
incantation that wards off the spectre of intrusive government with the mere fundamentally altered the structure, the economics and the nature of
invocation of its name. The principles, guidelines, rules and regulations that govern competition in the telecommunications business. Voice telephony is
a deregulated system must be firmly rooted in the law and regulations that institute perhaps the most popular face of telecommunications, but it is no longer
or implement the deregulation regime.43 The implementation must likewise be fair the only one. There are other faces – such as data communications,
and evenhanded. electronic mail, voice mail, facsimile transmission, video conferencing,
mobile radio services like trunked radio, cellular radio, and personal
Globe hinges its claim of exemption from obtaining prior approval from the NTC on communications services, radio paging, and so on. Because of the mind-
NTC Memorandum Circular No. 14-11-97 ("MC No. 14-11-97"). Globe notes that in boggling developments in semiconductors, the traditional boundaries
a 7 October 1998 ruling on the application of Islacom for the operation of SMS, NTC between computers, telecommunications, and broadcasting are
declared that the applicable circular for SMS is MC No. 14-11-97.44 Under this ruling, increasingly becoming blurred.50
it is alleged, NTC effectively denominated SMS as a "special feature" which under
POLITICAL REV |Admin Law Assign 1|60

One of the novel introductions of the PTA is the concept of a "value-added service" exchange services are to be cross-subsidized by other telecommunications services
("VAS"). Section 11 of the PTA governs the operations of a "value-added service within the same company until universal access is achieved.60 Section 10 of the PTA
provider," which the law defines as "an entity which relying on the transmission, specifically affirms the requirements set by E.O. No. 109. The relevance to VAS is
switching and local distribution facilities of the local exchange and inter-exchange clear: public policy maintains that the offer of VAS by PTEs cannot interfere with
operators, and overseas carriers, offers enhanced services beyond those ordinarily the fundamental provision by PTEs of their other public service requirements.
provided for by such carriers."51 Section 11 recognizes that VAS providers need not
secure a franchise, provided that they do not put up their own network.52However, More pertinently to the case at bar, the qualification highlights the fact that the
a different rule is laid down for telecommunications entities such as Globe and PLDT. legal rationale for regulation of VAS is severely limited. There is an implicit
The section unequivocally requires NTC approval for the operation of a value-added recognition that VAS is not strictly a public service offering in the way that voice-
service. It reads, viz: to-voice lines are, for example, but merely supplementary to the basic service.
Ultimately, the regulatory attitude of the State towards VAS offerings by PTEs
Telecommunications entities may provide VAS, subject to the additional is to treat its provisioning as a "business decision" subject to the discretion
requirements that: of the offeror, so long as such services do not interfere with mandatory public
service requirements imposed on PTEs such as those under E.O. No. 109. Thus,
a) prior approval of the Commission is secured to ensure that non-PTEs are not similarly required to secure prior approval before
such VAS offerings are not cross-subsidized from the proceeds of offering VAS, as they are not burdened by the public service requirements
their utility operations; prescribed on PTEs.61 Due regard must be accorded to this attitude, which is in
consonance with the general philosophy of deregulation expressed in the PTA.
b) other providers of VAS are not discriminated against in rates nor
denied equitable access to their facilities; and The Pertinent NTC Memorandum Circulars

c) separate books of accounts are maintained for the VAS. (Emphasis Next, we examine the regulatory framework devised by NTC in dealing with VAS.
supplied)53
NTC relied on Section 420(f) of the Implementing Rules of the PTA ("Implementing
Oddly enough, neither the NTC nor the Court of Appeals cited the above-quoted Rules") as basis for its claim that prior approval must be secured from it before
provision in their respective decisions, which after all, is the statutory premise for Globe can operate SMS. Section 420 of the Implementing Rules, contained in MC
the assailed regulatory action. This failure is but a mere indicia of the pattern of No. 8-9-95, states in full:
ignorance or incompetence that sadly attends the actions assailed in this petition.
VALUE ADDED SERVICES (VAS)
It is clear that the PTA has left open-ended what services are classified as "value-
added," prescribing instead a general standard, set forth as a matter of principle (a) A non-PTE VAS provider shall not be required to secure a franchise
and fundamental policy by the legislature.54 The validity of this standard set by from Congress.
Section 11 is not put into question by the present petition, and there is no need to
inquire into its propriety.55 The power to enforce the provisions of the PTA, including (b) A non-PTE VAS provider can utilize its own equipment capable only of
the implementation of the standards set therein, is clearly reposed with the NTC.56 routing, storing and forwarding messages in whatever format for the
purpose of providing enhanced or augmented telecommunications
It can also be gleaned from Section 11 that the requirement that PTEs secure prior services. It shall not put up its own network. It shall use the transmission
approval before offering VAS is tied to a definite purpose, i.e., "to ensure that network, toll or local distribution, of the authorized PTES.
such VAS offerings are not cross-subsidized from the proceeds of their
utility operations." The reason is related to the fact that PTEs are considered as (c) The provision of VAS shall not in any way affect the cross subsidy to
public services,57 and mandated to perform certain public service functions. Section the local exchange network by the international and national toll services
11 should be seen in relation to E.O. 109, which mandates that "international and CMTS service.
gateway operators shall be required to provide local exchange service,"58 for the
purpose of ensuring availability of reliable and affordable telecommunications (d) Entities intending to provide value added services only shall submit to
service in both urban and rural areas of the country.59 Under E.O. No. 109, local the commission application for registration for approval. The application
POLITICAL REV |Admin Law Assign 1|61

form shall include documents showing, among others, system Still, there is MC No. 14-11-97, entitled "Deregulating the Provision of Special
configuration, mode of operation, method of charging rates, lease Features in the Telephone Network." Globe invokes this circular as it had been
agreement with the PTE, etc. previously cited by the NTC as applicable to SMS.

(e) The application for registration shall be acted upon by the Commission On 2 October 1998, Islacom wrote a letter to the NTC, informing the agency that
through an administrative process within thirty (30) days from date of "it will be offering the special feature" of SMS for its CMTS, and citing therein that
application. the notice was being given pursuant to NTC Memorandum Circular No. 14-11-
97.65 In response, the NTC acknowledged receipt of the letter "informing" it of
(f) PTEs intending to provide value added services are required to Islacom's "offering the special feature" of SMS for its CMTS, and instructed Islacom
secure prior approval by the Commission through an administrative to "adhere to the provisions of MC No. 14-11-97."66The clear implication of the
process. letter is that NTC considers the Circular as applicable to SMS.

(g) VAS providers shall comply strictly with the service performance and An examination of MC No. 14-11-97 further highlights the state of regulatory
other standards prescribed commission. (Emphasis supplied.) confusion befalling the NTC. The relevant portions thereof are reproduced below:

Instead of expressly defining what VAS is, the Implementing Rules defines what SUBJECT: DEREGULATING THE PROVISION OF SPECIAL
"enhanced services" are, namely: "a service which adds a feature or value not FEATURES IN THE TELEPHONE NETWORK.
ordinarily provided by a public telecommunications entity such as format, media
conversion, encryption, enhanced security features, computer processing, and the For the purpose of exempting specific telecommunications service from
like."62 Given that the PTA defines VAS as "enhanced services," the definition rate or tariff regulations if the service has sufficient competition to ensure
provided in the Implementing Rules may likewise be applied to VAS. Still, the fair and reasonable rates or tariffs, the Commission hereby
language of the Implementing Rules is unnecessarily confusing. Much trouble would deregulates the provision of special features inherent to the
have been spared had the NTC consistently used the term "VAS" as it is used in the Telephone Network.
PTA.
Section 1. For the purpose of this Circular, Special Feature shall refer
The definition of "enhanced services" in the Implementing Rules, while more distinct to a feature inherent to the telephone network which may not be
than that under the PTA, is still too sweeping. Rather than enumerating what ordinarily provided by a Telephone Service Provider such as call
possible features could be classified as VAS or enhanced services, the Implementing waiting, call forwarding, conference calling, speed dialing, caller ID,
Rules instead focuses on the characteristics of these features. The use of the phrase malicious call ID, call transfer, charging information, call pick-up, call
"the like,"63and its implications of analogy, presumes that a whole myriad of barring, recorded announcement, no double connect, warm line, wake-up
technologies can eventually be subsumed under the definition of "enhanced call, hotline, voicemail, and special features offered to customers with
services." The NTC should not be necessarily faulted for such indistinct formulation PABXs such as direct inward dialing and number hunting, and the like;
since it could not have known in 199564 what possible VAS would be available in the provided that in the provision of the feature, no law, rule, regulation or
future. The definition laid down in the Implementing Rules may validly serve as a international convention on telecommunications is circumvented or
guide for the NTC to determine what emergent offerings would fall under VAS. violated. The Commission shall periodically update the list of
special features in the Telephone Network which, including the
Still, owing to the general nature of the definition laid down in the Implementing charging of rates therefor, shall be deregulated.
Rules, the expectation arises that the NTC would promulgate further issuances
defining whether or not a specific feature newly available in the market is a VAS. Section 2. A duly authorized Telephone Service Provider shall inform the
Such expectation is especially demanded if the NTC is to penalize PTEs who fail to Commission in writing of the special features it can offer and
obtain prior approval in accordance with Section 11 of the PTA. To our knowledge, the corresponding rates thirty (30) days prior to launch date.
the NTC has yet to come out with an administrative rule or regulation listing which
of the offerings in the market today fall under VAS or "enhanced services." xxx
POLITICAL REV |Admin Law Assign 1|62

Section 4. Authorized Telephone Service Providers shall continue to charge Every party subject to administrative regulation deserves an opportunity
their duly approved rates for special services for 3 months from the to know, through reasonable regulations promulgated by the agency, of
effectivity of this circular, after which they may set their own rates. the objective standards that have to be met. Such rule is integral to due
process, as it protects substantive rights. Such rule also promotes harmony within
xxx (Emphasis supplied) the service or industry subject to regulation. It provides indubitable opportunities
to weed out the most frivolous conflicts with minimum hassle, and certain footing
Just like VAS as defined under the PTA, "special features" are also "not ordinarily in deciding more substantive claims. If this results in a tenfold in administrative
provided" by the telephone company. Considering that MC No. 14-11-97 was rules and regulations, such price is worth paying if it also results in clarity and
promulgated after the passage of the PTA, it can be assumed that the authors of consistency in the operative rules of the game. The administrative process will best
the Circular were well aware of the regulatory scheme formed under the PTA. be vindicated by clarity in its exercise.70
Moreover, MC No. 14-11-97 repeatedly invokes the word "deregulation," and it
cannot be denied that the liberalization ethos was introduced by the PTA. Yet, the In short, the legal basis invoked by NTC in claiming that SMS is VAS has not been
net effect of MC No. 14-11-97 is to add to the haze beclouding the NTC's rationale duly established. The fault falls squarely on NTC. With the dual classification of
for regulation. The introduction of a new concept, "special feature," which is not SMS as a special feature and a VAS and the varying rules pertinent to each
provided for in the PTA just adds to the confusion, especially in light of the classification, NTC has unnecessarily complicated the regulatory framework to the
similarities between "special features" and VAS. Moreover, there is no requirement detriment of the industry and the consumers. But does that translate to a finding
that a PTE seeking to offer "special features" must secure prior approval from the that the NTC Order subjecting Globe to prior approval is void? There is a fine line
NTC. between professional mediocrity and illegality. NTC's byzantine approach to SMS
regulation is certainly inefficient. Unfortunately for NTC, its actions have also
Is SMS a VAS, "enhanced service," or a "special feature"? Apparently, even the NTC transgressed due process in many ways, as shown in the ensuing elucidation.
is unsure. It had told Islacom that SMS was a "special feature," then subsequently
held that it was a "VAS." However, the pertinent laws and regulations had not Penalized Via a Quasi-Judicial Process,
changed from the time of the Islacom letter up to the day the Order was issued. Globe and Smart are Entitled to
Only the thinking of NTC did. Corresponding Protections

More significantly, NTC never required ISLACOM to apply for prior approval in order It is essential to understand that the assailed Order was promulgated by NTC in the
to provide SMS, even after the Order to that effect was promulgated against Globe exercise of its quasi-judicial functions. The case arose when Smart had filed the
and Smart. This fact was admitted by NTC during oral arguments.67 NTC's treatment initial complaint against Globe before NTC for interconnection of SMS.71 NTC issued
of Islacom, apart from being obviously discriminatory, puts into question whether a Show Cause Order requiring Globe to answer Smart's charges. Hearings were
or not NTC truly believes that SMS is VAS. NTC is unable to point out any conducted, and a decision made on the merits, signed by the three Commissioners
subsequent rule or regulation, enacted after it promulgated the adverse order of the NTC, sitting as a collegial body.72
against Globe and Smart, affirming the newly-arrived determination that SMS is
VAS. The initial controversy may have involved a different subject matter,
interconnection, which is no longer contested. It cannot be denied though that the
In fact, as Smart admitted during the oral arguments, while it did comply with the findings and penalty now assailed before us was premised on the same exercise of
NTC Order requiring it to secure prior approval, it was never informed by the NTC jurisdiction. Thus, it is not relevant to this case that the process for obtaining prior
of any action on its request.68 While NTC counters that it did issue a Certificate of approval under the PTA and its Implementing Rules is administrative in nature.
Registration to Smart, authorizing the latter as a provider of SMS, such Certificate While this may be so, the assailed NTC's determination and corresponding penalty
of Registration was issued only on 13 March 2003, or nearly four (4) years after were rendered in the exercise of quasi-judicial functions. Therefore, all the
Smart had made its request.69 This inaction indicates a lack of seriousness on the requirements of due process attendant to the exercise of quasi-judicial power apply
part of the NTC to implement its own rulings. Also, it tends to indicate the lack of to the present case. Among them are the seven cardinal primary rights in justiciable
belief or confusion on NTC's part as to how SMS should be treated. Given the cases before administrative tribunals, as enumerated in Ang Tibay v. CIR.73They
abstract set of rules the NTC has chosen to implement, this should come as no are synthesized in a subsequent case, as follows:
surprise. Yet no matter how content the NTC may be with its attitude of sloth
towards regulation, the effect may prove ruinous to the sector it regulates.
POLITICAL REV |Admin Law Assign 1|63

There are cardinal primary rights which must be respected even in phraseology that evinces no causal relation to the definition in M.C. No. 8-9-
proceedings of this character. The first of these rights is the right to a 95. Neither did the NTC endeavor to explain why the "transmission of data"
hearing, which includes the right of the party interested or affected to necessarily classifies SMS as a VAS.
present his own case and submit evidence in support thereof. Not only
must the party be given an opportunity to present his case and to adduce In fact, if "the transmission of data over [the] CMTS" is to be reckoned as the
evidence tending to establish the rights which he asserts but the tribunal determinative characteristic of SMS, it would seem that this is already sufficiently
must consider the evidence presented. While the duty to deliberate does covered by Globe and Smart's respective legislative franchises.78 Smart is
not impose the obligation to decide right, it does imply a necessity which authorized under its legislative franchise to establish and operate integrated
cannot be disregarded, namely, that of having something to support its telecommunications/computer/ electronic services for public domestic and
decision. Not only must there be some evidence to support a finding or international communications,79 while Globe is empowered to establish and operate
conclusion, but the evidence must be substantial. The decision must be domestic telecommunications, and stations for transmission and reception of
rendered on the evidence presented at the hearing, or at least contained messages by means of electricity, electromagnetic waves or any kind of energy,
in the record and disclosed to the parties affected.74 force, variations or impulses, whether conveyed by wires, radiated through space
or transmitted through other media and for the handling of any and all types of
NTC violated several of these cardinal rights due Globe in the promulgation of the telecommunications services.80
assailed Order.
The question of the proper legal classification of VAS is uniquely technical, tied as
First. The NTC Order is not supported by substantial evidence. Neither does it at is to the scientific and technological application of the service or feature. Owing
sufficiently explain the reasons for the decision rendered. to the dearth of substantive technical findings and data from the NTC on which a
judicial review may reasonably be premised, it is not opportunely proper for the
Our earlier discussion pertained to the lack of clear legal basis for classifying SMS Court to make its own technical evaluation of VAS, especially in relation to
as VAS, owing to the failure of the NTC to adopt clear rules and regulations to that SMS. Judicial fact-finding of the de novo kind is generally abhorred and the shift
effect. Muddled as the legal milieu governing SMS already is, NTC's attempt to of decisional responsibility to the judiciary is not favored as against the
apply its confusing standards in the case of Globe and Smart is even more substantiated and specialized determination of administrative agencies.81 With
disconcerting. The very rationale adopted by the NTC in its Order holding that greater reason should this be the standard for the exercise of judicial review when
SMS is VAS is short and shoddy. Astoundingly, the Court of Appeals affirmed the the administrative agency concerned has not in the first place come out with a
rationale bereft of intelligent inquiry, much less comment. Stated in full, the technical finding based on evidence, as in this case.
relevant portion of the NTC Order reads:
Yet at the same time, this absence of substantial evidence in support of the finding
xxx Getting down [to] the nitty-gritty, Globe's SMS involves the that SMS is VAS already renders reversible that portion of the NTC Order.
transmission of data over its CMTS which is Globe's basic service. SMS is
not ordinarily provided by a CMTS operator like Globe, and since Moreover, the Order does not explain why the NTC was according the VAS offerings
SMS enhances Globe's CMTS, SMS fits in to a nicety [sic] with the of Globe and Smart a different regulatory treatment from that of Islacom. Indeed,
definition of "value-added-service" or "enhanced-service" under NTC to this day, NTC has not offered any sensible explanation why Islacom was accorded
Memorandum Circular 8-9-95 (Rule 001, Item 15).75 to a less onerous regulatory requirement, nor have they compelled Islacom to suffer
the same burdens as Globe and Smart.
The Court usually accords great respect to the technical findings of administrative
agencies in the fields of their expertise, even if they are infelicitously worded. While stability in the law, particularly in the business field, is desirable, there is no
However, the above-quoted "finding" is nothing more than bare assertions, demand that the NTC slavishly follow precedent.82 However, we think it
unsupported by substantial evidence.76 The Order reveals that no deep inquiry was essential, for the sake of clarity and intellectual honesty, that if an
made as to the nature of SMS or what its provisioning entails. In fact, the Court is administrative agency decides inconsistently with previous action, that it
unable to find how exactly does SMS "fits into a nicety" with NTC M.C. No. 8-9-95, explain thoroughly why a different result is warranted, or if need be, why
which defines "enhanced services" as analogous to "format, media conversion, the previous standards should no longer apply or should be
encryption, enhanced security features, computer processing, and the like."77 The overturned.83 Such explanation is warranted in order to sufficiently
NTC merely notes that SMS involves the "transmission of data over [the] CMTS," a establish a decision as having rational basis.84 Any inconsistent decision
POLITICAL REV |Admin Law Assign 1|64

lacking thorough, ratiocination in support may be struck down as being no evidence is procured pertinent to a particular issue, any eventual resolution of
arbitrary. And any decision with absolutely nothing to support it is a that issue on substantive grounds despite the absence of evidence is flawed.
nullity.85 Moreover, if the parties did have evidence to counter the ruling but were wrongfully
denied the opportunity to offer the evidence, the result would be embarrassing on
Second. Globe and Smart were denied opportunity to present evidence on the the adjudicator.
issues relating to the nature of VAS and the prior approval.
Thus, the comical, though expected, result of a definitive order which is totally
Another disturbing circumstance attending this petition is that until the unsupported by evidence. To this blatant violation of due process, this Court stands
promulgation of the assailed Order Globe and Smart were never informed of the athwart.
fact that their operation of SMS without prior authority was at all an issue for
consideration. As a result, neither Globe or Smart was afforded an opportunity to Third. The imposition of fine is void for violation of due process
present evidence in their behalf on that point.
The matter of whether NTC could have imposed the fine on Globe in the
NTC asserts that since Globe and Smart were required to submit their respective assailed Order is necessarily related to due process considerations. Since this
Certificates of Public Convenience and Necessity and franchises, the parties were question would also call to fore the relevant provisions of the Public Service Act, it
sufficiently notified that the authority to operate such service was a matter which deserves its own extensive discussion.
NTC could look into. This is wrong-headed considering the governing law and
regulations. It is clear that before NTC could penalize Globe and Smart for Globe claims that the issue of its authority to operate SMS services was never raised
unauthorized provision of SMS, it must first establish that SMS is VAS. Since there as an issue in the Complaint filed against it by Smart. Nor did NTC ever require
was no express rule or regulation on that question, Globe and Smart would be well Globe to justify its authority to operate SMS services before the issuance of
within reason if they submitted evidence to establish that SMS was not VAS. the Order imposing the fine.
Unfortunately, no such opportunity arose and no such arguments were raised
simply because Globe and Smart were not aware that the question of their authority The Court of Appeals, in its assailed decision, upheld the power of NTC to impose a
to provide SMS was an issue at all. Neither could it be said that the requisite of fine and to make a pronouncement on Globe's alleged lack of operational authority
prior authority was indubitable under the existing rules and regulations. without need of hearing, simply by citing the provision of the Public Service
Considering the prior treatment towards Islacom, Globe (and Smart, had it chosen Act90 which enumerates the instances when NTC may act motu proprio. That is
to do so) had every right to rely on NTC's disposal of Islacom's initiative and to Section 17, paragraph (a), which reads thus:
believe that prior approval was not necessary.
Sec. 17. Proceedings of [the National Telecommunications Commission]
Neither was the matter ever raised during the hearings conducted by NTC on without previous hearing. The Commission shall have power, without
Smart's petition. This claim has been repeatedly invoked by Globe. It is borne out previous hearing, subject to established limitations and exceptions and
by the records or the absence thereof. NTC could have easily rebuffed this claim saving provisions to the contrary:
by pointing to a definitive record. Yet strikingly, NTC has not asserted that the
matter of Globe's authority was raised in any pleading or proceeding. In fact, Globe (a) To investigate, upon its own initiative, or upon complaint in writing,
in its Consolidated Reply before this Court challenged NTC to produce the any matter concerning any public service as regards matters under its
transcripts of the hearings it conducted to prove that the issue of Globe's authority jurisdiction; to require any public service to furnish safe, adequate, and
to provide SMS was put in issue. The Court similarly ordered the NTC to produce proper service as the public interest may require and warrant; to enforce
such transcripts.86 NTC failed to produce any.87 compliance with any standard, rule, regulation, order or other requirement
of this Act or of the Commission, and to prohibit or prevent any public
The opportunity to adduce evidence is essential in the administrative process, as service as herein defined from operating without having first secured a
decisions must be rendered on the evidence presented, either in the hearing, or at certificate of public convenience or public necessity and convenience, as
least contained in the record and disclosed to the parties affected.88The requirement the case may be, and require existing public services to pay the fees
that agencies hold hearings in which parties affected by the agency's action can be provided for in this Act for the issuance of the proper certificate of public
represented by counsel may be viewed as an effort to regularize this struggle for convenience or certificate of public necessity and convenience, as the case
advantage within a legislative adversary framework.89 It necessarily follows that if
POLITICAL REV |Admin Law Assign 1|65

may be, under the penalty, in the discretion of the Commission, of the exercise of its quasi-judicial functions. Inherently, notice and hearing are
revocation and cancellation of any acquired rights. indispensable for the valid exercise by an administrative agency of its quasi-judicial
functions. As the Court held in Central Bank of the Phil. v. Hon. Cloribel:95
On the other hand, NTC itself, in the Order, cites Section 21 as the basis for its
imposition of fine on Globe. The provision states: [T]he necessity of notice and hearing in an administrative proceeding
depends on the character of the proceeding and the circumstances
Sec. 21. Every public service violating or failing to comply with the terms involved. In so far as generalization is possible in view of the great variety
and conditions of any certificate or any orders, decisions or regulations of of administrative proceedings, it may be stated as a general rule that notice
the Commission shall be subject to a fine of not exceeding two hundred and hearing are not essential to the validity of administrative action where
pesos per day for every day during which such default or violation the administrative body acts in the exercise of executive, administrative,
continues; and the Commission is hereby authorized and empowered to or legislative functions; but where a public administrative body acts in a
impose such fine, after due notice and hearing. [Emphasis supplied.] judicial or quasi-judicial matter, and its acts are particular and immediate
rather than general and prospective, the person whose rights or property
Sections 17 and 21 of the Public Service Act confer two distinct powers on may be affected by the action is entitled to notice and hearing.96
NTC. Under Section 17, NTC has the power to investigate a PTE compliance with a
standard, rule, regulation, order, or other requirement imposed by law or the The requirement of notice and hearing becomes even more imperative if the statute
regulations promulgated by NTC, as well as require compliance if necessary. By the itself demands it, as in the case of Section 21 of the Public Service Act.
explicit language of the provision, NTC may exercise the power without need of
prior hearing. However, Section 17 does not include the power to impose fine in As earlier stated, the Court is convinced that prior to the promulgation of the
its enumeration. It is Section 21 which adverts to the power to impose fine and in assailed Order Globe was never notified that its authority to operate SMS was put
the same breath requires that the power may be exercised only after notice and in issue. There is an established procedure within NTC that provides for the steps
hearing. that should be undertaken before an entity such as Globe could be subjected to a
disciplinary measure. Section 1, Rule 10 of the NTC Rules of Procedure provides
Section 21 requires notice and hearing because fine is a sanction, regulatory and that any action, the object of which is to subject a holder of a certificate of public
even punitive in character. Indeed, the requirement is the essence of due convenience or authorization, or any person operating without authority from NTC,
process. Notice and hearing are the bulwark of administrative due process, the to any penalty or a disciplinary or other measure shall be commenced by the filing
right to which is among the primary rights that must be respected even in of a complaint. Further, the complaint should state, whenever practicable, the
administrative proceedings.91 The right is guaranteed by the Constitution itself and provisions of law or regulation violated, and the acts or omissions complained of as
does not need legislative enactment. The statutory affirmation of the requirement constituting the offense.97 While a complaint was indeed filed against Globe by
serves merely to enhance the fundamental precept. The right to notice and hearing Smart, the lack of Globe's authority to operate SMS was not raised in
is essential to due process and its non-observance will, as a rule, invalidate the the Complaint, solely predicated as it was on Globe's refusal to interconnect with
administrative proceedings.92 Smart.98

In citing Section 21 as the basis of the fine, NTC effectively concedes the necessity Under the NTC Rules of Procedure, NTC is to serve a Show Cause Order on the
of prior notice and hearing. Yet the agency contends that the sanction was justified respondent to the complaint, containing therein a "statement of the particulars and
by arguing that when it took cognizance of Smart's complaint for interconnection, matters concerning which the Commission is inquiring and the reasons for such
"it may very well look into the issue of whether the parties had the requisite actions."99 The Show Cause Order served on Globe in this case gave notice of
authority to operate such services."93 As a result, both parties were sufficiently Smart's charge that Globe, acting in bad faith and contrary to law, refused to
notified that this was a matter that NTC could look into in the course of the allow the interconnection of their respective SMS systems.100 Again, the lack of
proceedings. The parties subsequently attended at least five hearings presided by authority to operate SMS was not adverted to in NTC's Show Cause Order.
NTC.94
The records also indicate that the issue of Globe's authority was never raised in the
That particular argument of the NTC has been previously disposed of. But it is subsequent hearings on Smart's complaint. Quite noticeably, the respondents
essential to emphasize the need for a hearing before a fine may be imposed, as it themselves have never asserted that the matter of Globe's authority was raised in
is clearly a punitive measure undertaken by an administrative agency in the any pleading or proceeding. In fact, Globe in its Consolidated Reply before this
POLITICAL REV |Admin Law Assign 1|66

Court challenged NTC to produce the transcripts of the hearings it conducted to proactive position, promulgating the necessary rules and regulations to cope up
prove that the issue of Globe's authority to provide SMS was put in issue. It did with the advent of the technologies it superintends. With the persistent advent of
not produce any transcript. new offerings in the telecommunications industry, the NTC's role will become more
crucial than at any time before. If NTC's behavior in the present case is but
Being an agency of the government, NTC should, at all times, maintain a due regard indicative of a malaise pervading this crucial regulatory arm of the State, the Court
for the constitutional rights of party litigants.101 In this case, NTC blindsided Globe fears the resultant confusion within the industry and the consuming public. The
with a punitive measure for a reason Globe was not made aware of, and in a manner credibility of an administrative agency entrusted with specialized fields subsists not
that contravened express provisions of law. Consequently, the fine imposed by NTC on judicial doctrine alone, but more so on its intellectual strength, adherence to
on Globe is also invalid. Otherwise put, since the very basis for the fine was invalidly law, and basic fairness.
laid, the fine is necessarily void.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated
Conclusion 22 November 1999, as well as its Resolution dated 29 July 2000, and the
assailed Order of the NTC dated 19 July 1999 are hereby SET ASIDE. No cost.
In summary: (i) there is no legal basis under the PTA or the memorandum circulars
promulgated by the NTC to denominate SMS as VAS, and any subsequent SO ORDERED.
determination by the NTC on whether SMS is VAS should be made with proper
regard for due process and in conformity with the PTA; (ii) the
assailed Order violates due process for failure to sufficiently explain the reason for
the decision rendered, for being unsupported by substantial evidence, and for
imputing violation to, and issuing a corresponding fine on, Globe despite the
absence of due notice and hearing which would have afforded Globe the right to
present evidence on its behalf.

Thus, the Order effectively discriminatory and arbitrary as it is, was issued with
grave abuse of discretion and it must be set aside. NTC may not legally require
Globe to secure its approval for Globe to continue providing SMS. This does not
imply though that NTC lacks authority to regulate SMS or to classify it as
VAS. However, the move should be implemented properly, through unequivocal
regulations applicable to all entities that are similarly situated, and in an even-
handed manner.

Concurrently, the Court realizes that the PTA is not intended to constrain the
industry within a cumbersome regulatory regime.102 The policy as pre-ordained by
legislative fiat renders the traditionally regimented business in an elementary free
state to make business decisions, avowing that it is under this atmosphere that the
industry would prosper.103 It is disappointing at least if the deregulation thrust of
the law is skirted deliberately. But it is ignominious if the spirit is defeated through
a crazy quilt of vague, overlapping rules that are implemented haphazardly.

By no means should this Decision be interpreted as removing SMS from the ambit
of jurisdiction and review by the NTC. The issue before the Court is only the prior
approval requirement as imposed on Globe and Smart. The NTC will continue to
exercise, by way of its broad grant, jurisdiction over Globe and Smart's SMS
offerings, including questions of rates and customer complaints. Yet caution must
be had. Much complication could have been avoided had the NTC adopted a
POLITICAL REV |Admin Law Assign 1|67

15. G.R. No. 73705 August 27, 1987 On January 23, 1984, petitioner filed a Petition for Review with this Court, docketed
as G.R. No. 66381, but the same was denied in a Resolution dated February 29,
VICTORIAS MILLING CO., INC., petitioner, 1984.
vs.
OFFICE OF THE PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS and On April 2, 1984, petitioner filed an appeal with the Office of the President, but in
PHILIPPINE PORTS AUTHORITY, respondents. a Decision dated July 27, 1984 (Record, p. 22), the same was denied on the sole
ground that it was filed beyond the reglementary period. A motion for
PARAS, J.: Reconsideration was filed, but in an Order dated December 16, 1985, the same was
denied (ibid., pp. 3-21): Hence, the instant petition.
This is a petition for review on certiorari of the July 27, 1984 Decision of the Office
of the Presidential Assistant For Legal Affairs dismissing the appeal from the The Second Division of this Court, in a Resolution dated June 2, 1986, resolved to
adverse ruling of the Philippine Ports Authority on the sole ground that the same require the respondents to comment (ibid., p. 45); and in compliance therewith,
was filed beyond the reglementary period. the Solicitor General filed his Comment on June 4, 1986 (Ibid., pp. 50-59).

On April 28, 1981, the Iloilo Port Manager of respondent Philippine Ports Authority In a Resolution of July 2, 1986, petitioner was required to file a reply (Ibid., p. 61)
(PPA for short) wrote petitioner Victorias Milling Co., requiring it to have its tugboats but before receipt of said resolution, the latter filed a motion on July 1, 1986 praying
and barges undergo harbor formalities and pay entrance/clearance fees as well as that it be granted leave to file a reply to respondents' Comment, and an extension
berthing fees effective May 1, 1981. PPA, likewise, requiring petitioner to secure a of time up to June 30, 1986 within which to file the same. (Ibid., p. 62).
permit for cargo handling operations at its Da-an Banua wharf and remit 10% of
its gross income for said operations as the government's share. On July 18, 1986, petitioner filed its reply to respondents' Comment (Ibid., pp. 68-
76).
To these demands, petitioner sent two (2) letters, both dated June 2, 1981, wherein
it maintained that it is exempt from paying PPA any fee or charge because: (1) the The Second Division of this Court, in a Resolution dated August 25, 1986, resolved
wharf and an its facilities were built and installed in its land; (2) repair and to give due course to the petition and to require the parties to file their respective
maintenance thereof were and solely paid by it; (3) even the dredging and simultaneous memoranda (Ibid., p. 78).
maintenance of the Malijao River Channel from Guimaras Strait up to said private
wharf are being done by petitioner's equipment and personnel; and (4) at no time On October 8, 1986, the Solicitor General filed a Manifestation and Rejoinder,
has the government ever spent a single centavo for such activities. Petitioner stating, among others, that respondents are adopting in toto their Comment of
further added that the wharf was being used mainly to handle sugar purchased June 3, 1986 as their memorandum; with the clarification that the assailed PPA
from district planters pursuant to existing milling agreements. Administrative Order No. 13-77 was duly published in full in the nationwide
circulated newspaper, "The Times Journal", on November 9,1977 (ibid., pp. 79-81).
In reply, on November 3, 1981, PPA Iloilo sent petitioner a memorandum of PPA's
Executive Officer, Maximo Dumlao, which justified the PPA's demands. Further The sole legal issue raised by the petitioner is —
request for reconsideration was denied on January 14, 1982.
WHETHER OR NOT THE 30-DAY PERIOD FOR APPEAL UNIDER SECTION 131
On March 29, 1982, petitioner served notice to PPA that it is appealing the case to OF PPA ADMINISTRATIVE ORDER NO. 13-77 WAS TOLLED BY THE
the Court of Tax Appeals; and accordingly, on March 31, 1982, petitioner filed a PENDENCY OF THE PETITIONS FILED FIRST WITH THE COURT OF TAX
Petition for Review with the said Court, entitled "Victorias Milling Co., Inc. v. APPEALS, AND THEN WITH THIS HONORABLE TRIBUNAL.
Philippine Ports Authority," and docketed therein as CTA Case No. 3466.
The instant petition is devoid of merit.
On January 10, 1984, the Court of Tax Appeals dismissed petitioner's action on the
ground that it has no jurisdiction. It recommended that the appeal be addressed to Petitioner, in holding that the recourse first to the Court of Tax Appeals and then
the Office of the President. to this Court tolled the period to appeal, submits that it was guided, in good faith,
by considerations which lead to the assumption that procedural rules of appeal then
enforced still hold true. It contends that when Republic Act No. 1125 (creating the
POLITICAL REV |Admin Law Assign 1|68

Court of Tax Appeals) was passed in 1955, PPA was not yet in existence; and under As to petitioner's contention that Administrative Order No. 13-77, specifically its
the said law, the Court of Tax Appeals had exclusive appellate jurisdiction over Section 131, only provides for appeal when the decision is adverse to the
appeals from decisions of the Commissioner of Customs regarding, among others, government, worth mentioning is the observation of the Solicitor General that
customs duties, fees and other money charges imposed by the Bureau under the petitioner misleads the Court. Said Section 131 provides —
Tariff and Customs Code. On the other hand, neither in Presidential Decree No.
505, creating the PPA on July 11, 1974 nor in Presidential Decree No. 857, revising Sec. 131. Supervisory Authority of General Manager and PPA
its charter (said decrees, among others, merely transferred to the PPA the powers Board. — If in any case involving assessment of port charges, the
of the Bureau of Customs to impose and collect customs duties, fees and other Port Manager/OIC renders a decision adverse to the government,
money charges concerning the use of ports and facilities thereat) is there any such decision shall automatically be elevated to, and reviewed by,
provision governing appeals from decisions of the PPA on such matters, so that it the General Manager of the authority; and if the Port Manager's
is but reasonable to seek recourse with the Court of Tax Appeals. Petitioner, decision would be affirmed by the General Manager, such decision
likewise, contends that an analysis of Presidential Decree No. 857, shows that the shall be subject to further affirmation by the PPA Board before it
PPA is vested merely with corporate powers and duties (Sec. 6), which do not and shall become effective; Provided, however, that if within thirty
can not include the power to legislate on procedural matters, much less to (30) days from receipt of the record of the case by the General
effectively take away from the Court of Tax Appeals the latter's appellate Manager, no decision is rendered, the decision under review shall
jurisdiction. become final and executory; Provided further, that any party
aggrieved by the decision of the General Manager as affirmed by
These contentions are untenable for while it is true that neither Presidential Decree the PPA Board may appeal said decision to the Office of the
No. 505 nor Presidential Decree No. 857 provides for the remedy of appeal to the President within thirty (30) days from receipt of a copy
Office of the President, nevertheless, Presidential Decree No. 857 empowers the thereof.(Emphasis supplied).
PPA to promulgate such rules as would aid it in accomplishing its purpose. Section
6 of the said Decree provides — From a cursory reading of the aforequoted provision, it is evident that the above
contention has no basis.
Sec. 6. Corporate Powers and Duties —
As to petitioner's allegation that to its recollection there had been no prior
a. The corporate duties of the Authority shall be: publication of said PPA Administrative Order No. 13-77, the Solicitor General
correctly pointed out that said Administrative Order was duly published in full in the
xxx xxx xxx nationwide newspaper, "The Times Journal", on November 9,1977.

(III) To prescribe rules and regulations, Moreover, it must be stated that as correctly observed by the Solicitor General, the
procedures, and guidelines governing the facts of this case show that petitioner's failure to appeal to the Office of the
establishment, construction, maintenance, and President on time stems entirely from its own negligence and not from a purported
operation of all other ports, including private ignorance of the proper procedural steps to take. Petitioner had been aware of the
ports in the country. rules governing PPA procedures. In fact, as embodied in the December 16, 1985
Order of the Office of the President, petitioner even assailed the PPA's rule making
xxx xxx xxx powers at the hearing before the Court of Tax Appeals.

Pursuant to the aforequoted provision, PPA enacted Administrative Order No. 13- It is axiomatic that the right to appeal is merely a statutory privilege and may be
77 precisely to govern, among others, appeals from PPA decisions. It is now finally exercised only in the manner and in accordance with the provision of law (United
settled that administrative rules and regulations issued in accordance with law, like CMC Textile Workers Union vs. Clave, 137 SCRA 346, citing the cases of Bello vs.
PPA Administrative Order No. 13-77, have the force and effect of law (Valerio vs. Fernando, 4 SCRA 138; Aguila vs. Navarro, 55 Phil. 898; and Santiago vs.
Secretary of Agriculture and Natural Resources, 7 SCRA 719; Antique Sawmills, Valenzuela, 78 Phil. 397).
Inc. vs. Zayco, et al., 17 SCRA 316; and Macailing vs. Andrada, 31 SCRA 126), and
are binding on all persons dealing with that body.
POLITICAL REV |Admin Law Assign 1|69

Furthermore, even if petitioner's appeal were to be given due course, the result
would still be the same as it does not present a substantially meritorious case
against the PPA.

Petitioner maintains and submits that there is no basis for the PPA to assess and
impose the dues and charges it is collecting since the wharf is private, constructed
and maintained at no expense to the government, and that it exists primarily so
that its tugboats and barges may ferry the sugarcane of its Panay planters.

As correctly stated by the Solicitor General, the fees and charges PPA collects are
not for the use of the wharf that petitioner owns but for the privilege of navigating
in public waters, of entering and leaving public harbors and berthing on public
streams or waters. (Rollo, pp. 056-057).

In Compañia General de Tabacos de Filipinas vs. Actg. Commissioner of Customs


(23 SCRA 600), this Court laid down the rule that berthing charges against a vessel
are collectible regardless of the fact that mooring or berthing is made from a private
pier or wharf. This is because the government maintains bodies of water in
navigable condition and it is to support its operations in this regard that dues and
charges are imposed for the use of piers and wharves regardless of their ownership.

As to the requirement to remit 10% of the handling charges, Section 6B-(ix) of the
Presidential Decree No. 857 authorized the PPA "To levy dues, rates, or charges for
the use of the premises, works, appliances, facilities, or for services provided by or
belonging to the Authority, or any organization concerned with port operations."
This 10% government share of earnings of arrastre and stevedoring operators is in
the nature of contractual compensation to which a person desiring to operate
arrastre service must agree as a condition to the grant of the permit to operate.

PREMISES CONSIDERED, the instant petition is hereby DISMISSED.

SO ORDERED.
POLITICAL REV |Admin Law Assign 1|70

16. G.R. No. L-25018 May 26, 1969 of a privilege, being quasi-criminal in character. With his assertion that he was
entitled to the relief demanded consisting of perpetually restraining the respondent
ARSENIO PASCUAL, JR., petitioner-appellee, Board from compelling him to testify as witness for his adversary and his readiness
vs. or his willingness to put a bond, he prayed for a writ of preliminary injunction and
BOARD OF MEDICAL EXAMINERS, respondent-appellant, SALVADOR after a hearing or trial, for a writ of prohibition.
GATBONTON and ENRIQUETA GATBONTON, intervenors-appellants.
On February 9, 1965, the lower court ordered that a writ of preliminary injunction
FERNANDO, J.: issue against the respondent Board commanding it to refrain from hearing or
further proceeding with such an administrative case, to await the judicial disposition
The broad, all-embracing sweep of the self-incrimination clause,1 whenever of the matter upon petitioner-appellee posting a bond in the amount of P500.00.
appropriately invoked, has been accorded due recognition by this Court ever since
the adoption of the Constitution.2 Bermudez v. Castillo,3 decided in 1937, was quite The answer of respondent Board, while admitting the facts stressed that it could
categorical. As we there stated: "This Court is of the opinion that in order that the call petitioner-appellee to the witness stand and interrogate him, the right against
constitutional provision under consideration may prove to be a real protection and self-incrimination being available only when a question calling for an incriminating
not a dead letter, it must be given a liberal and broad interpretation favorable to answer is asked of a witness. It further elaborated the matter in the affirmative
the person invoking it." As phrased by Justice Laurel in his concurring opinion: "The defenses interposed, stating that petitioner-appellee's remedy is to object once he
provision, as doubtless it was designed, would be construed with the utmost is in the witness stand, for respondent "a plain, speedy and adequate remedy in
liberality in favor of the right of the individual intended to be served." 4 the ordinary course of law," precluding the issuance of the relief sought.
Respondent Board, therefore, denied that it acted with grave abuse of discretion.
Even more relevant, considering the precise point at issue, is the recent case
of Cabal v. Kapunan,5where it was held that a respondent in an administrative There was a motion for intervention by Salvador Gatbonton and Enriqueta
proceeding under the Anti-Graft Law 6 cannot be required to take the witness stand Gatbonton, the complainants in the administrative case for malpractice against
at the instance of the complainant. So it must be in this case, where petitioner was petitioner-appellee, asking that they be allowed to file an answer as intervenors.
sustained by the lower court in his plea that he could not be compelled to be the Such a motion was granted and an answer in intervention was duly filed by them
first witness of the complainants, he being the party proceeded against in an on March 23, 1965 sustaining the power of respondent Board, which for them is
administrative charge for malpractice. That was a correct decision; we affirm it on limited to compelling the witness to take the stand, to be distinguished, in their
appeal. opinion, from the power to compel a witness to incriminate himself. They likewise
alleged that the right against self-incrimination cannot be availed of in an
Arsenio Pascual, Jr., petitioner-appellee, filed on February 1, 1965 with the Court administrative hearing.
of First Instance of Manila an action for prohibition with prayer for preliminary
injunction against the Board of Medical Examiners, now respondent-appellant. It A decision was rendered by the lower court on August 2, 1965, finding the claim of
was alleged therein that at the initial hearing of an administrative case7 for alleged petitioner-appellee to be well-founded and prohibiting respondent Board "from
immorality, counsel for complainants announced that he would present as his first compelling the petitioner to act and testify as a witness for the complainant in said
witness herein petitioner-appellee, who was the respondent in such malpractice investigation without his consent and against himself." Hence this appeal both by
charge. Thereupon, petitioner-appellee, through counsel, made of record his respondent Board and intervenors, the Gatbontons. As noted at the outset, we find
objection, relying on the constitutional right to be exempt from being a witness for the petitioner-appellee.
against himself. Respondent-appellant, the Board of Examiners, took note of such
a plea, at the same time stating that at the next scheduled hearing, on February 1. We affirm the lower court decision on appeal as it does manifest fealty to the
12, 1965, petitioner-appellee would be called upon to testify as such witness, unless principle announced by us in Cabal v. Kapunan. 8 In that proceeding for certiorari
in the meantime he could secure a restraining order from a competent authority. and prohibition to annul an order of Judge Kapunan, it appeared that an
administrative charge for unexplained wealth having been filed against petitioner
Petitioner-appellee then alleged that in thus ruling to compel him to take the under the Anti-Graft Act,9the complainant requested the investigating committee
witness stand, the Board of Examiners was guilty, at the very least, of grave abuse that petitioner be ordered to take the witness stand, which request was granted.
of discretion for failure to respect the constitutional right against self-incrimination, Upon petitioner's refusal to be sworn as such witness, a charge for contempt was
the administrative proceeding against him, which could result in forfeiture or loss filed against him in the sala of respondent Judge. He filed a motion to quash and
POLITICAL REV |Admin Law Assign 1|71

upon its denial, he initiated this proceeding. We found for the petitioner in not go unpunished and that the truth must be revealed, such desirable objectives
accordance with the well-settled principle that "the accused in a criminal case may should not be accomplished according to means or methods offensive to the high
refuse, not only to answer incriminatory questions, but, also, to take the witness sense of respect accorded the human personality. More and more in line with the
stand." democratic creed, the deference accorded an individual even those suspected of
the most heinous crimes is given due weight. To quote from Chief Justice Warren,
It was noted in the opinion penned by the present Chief Justice that while the "the constitutional foundation underlying the privilege is the respect a government
matter referred to an a administrative charge of unexplained wealth, with the Anti- ... must accord to the dignity and integrity of its citizens." 14
Graft Act authorizing the forfeiture of whatever property a public officer or
employee may acquire, manifestly out proportion to his salary and his other lawful It is likewise of interest to note that while earlier decisions stressed the principle of
income, there is clearly the imposition of a penalty. The proceeding for forfeiture humanity on which this right is predicated, precluding as it does all resort to force
while administrative in character thus possesses a criminal or penal aspect. The or compulsion, whether physical or mental, current judicial opinion places equal
case before us is not dissimilar; petitioner would be similarly disadvantaged. He emphasis on its identification with the right to privacy. Thus according to Justice
could suffer not the forfeiture of property but the revocation of his license as a Douglas: "The Fifth Amendment in its Self-Incrimination clause enables the citizen
medical practitioner, for some an even greater deprivation. to create a zone of privacy which government may not force to surrender to his
detriment." 15 So also with the observation of the late Judge Frank who spoke of "a
To the argument that Cabal v. Kapunan could thus distinguished, it suffices to refer right to a private enclave where he may lead a private life. That right is the hallmark
to an American Supreme Court opinion highly persuasive in character. 10 In the of our democracy." 16 In the light of the above, it could thus clearly appear that no
language of Justice Douglas: "We conclude ... that the Self-Incrimination Clause of possible objection could be legitimately raised against the correctness of the
the Fifth Amendment has been absorbed in the Fourteenth, that it extends its decision now on appeal. We hold that in an administrative hearing against a medical
protection to lawyers as well as to other individuals, and that it should not be practitioner for alleged malpractice, respondent Board of Medical Examiners cannot,
watered down by imposing the dishonor of disbarment and the deprivation of a consistently with the self-incrimination clause, compel the person proceeded
livelihood as a price for asserting it." We reiterate that such a principle is equally against to take the witness stand without his consent.
applicable to a proceeding that could possibly result in the loss of the privilege to
practice the medical profession. WHEREFORE, the decision of the lower court of August 2, 1965 is affirmed. Without
pronouncement as to costs.
2. The appeal apparently proceeds on the mistaken assumption by respondent
Board and intervenors-appellants that the constitutional guarantee against self-
incrimination should be limited to allowing a witness to object to questions the
answers to which could lead to a penal liability being subsequently incurred. It is
true that one aspect of such a right, to follow the language of another American
decision, 11 is the protection against "any disclosures which the witness may
reasonably apprehend could be used in a criminal prosecution or which could lead
to other evidence that might be so used." If that were all there is then it becomes
diluted.lawphi1.ñet

The constitutional guarantee protects as well the right to silence. As far back as
1905, we had occasion to declare: "The accused has a perfect right to remain silent
and his silence cannot be used as a presumption of his guilt." 12Only last year,
in Chavez v. Court of Appeals, 13 speaking through Justice Sanchez, we reaffirmed
the doctrine anew that it is the right of a defendant "to forego testimony, to remain
silent, unless he chooses to take the witness stand — with undiluted, unfettered
exercise of his own free genuine will."

Why it should be thus is not difficult to discern. The constitutional guarantee, along
with other rights granted an accused, stands for a belief that while crime should
POLITICAL REV |Admin Law Assign 1|72

17. G.R. No. L-80160 June 26, 1989 e. Respondent-appellee provincial governor appealed to the Office of the President
from the CSC rulings alluded to.
GOVERNOR FELICISIMO T. SAN LUIS, THE SANGGUNIANG
PANLALAWIGAN, PROVINCIAL ENGINEER JUANITO C. RODIL AND f. On May 29, 1974, there issued OP Decision 954, Series of 1974 reversing the
PROVINCIAL TREASURER AMADEO C. ROMEY, ALL OF LAGUNA, petitioners, CSC rulings without prejudice to the decision of the Local Review Board [which had
vs. in fact already sustained the one-year suspension under date of May 6, 1974].
COURT OF APPEALS AND MARIANO L. BERROYA, JR., respondents.
g. On petitioner-appellant's motion for reconsideration, the Office of the President
CORTES, J.: rendered OP Decision 1834, Series of 1976, dated May 19, 1976, setting aside OP
Decision 954, declaring the one-year suspension improper, and ordering payment
The instant petition for certiorari and mandamus and/or appeal by certiorari assails of back salaries to Berroya.
the appellate court's ruling that mandamus lies to compel the reinstatement of a
quarry superintendent in the provincial government of Laguna who was initially h. Respondent-appellant moved for reconsideration of OP Decision 1834 on June
detailed or transferred to another office, then suspended, and finally dismissed 14, 1976. The said motion for reconsideration was denied on November 6, 1978.
following his expose of certain anomalies and irregularities committed by
government employees in the province. i. In the interim, respondent-appellant provincial governor issued an Order of April
27, 1977 dismissing Berroya for alleged neglect of duty, frequent unauthorized
The background facts, as narrated by the respondent Court of Appeals are: absences, conduct prejudicial to the best interest of duty and abandonment of
office, which order of dismissal was appealed by Berroya to the Civil Service
Records show that at all pertinent times, petitioner-appellant (private respondent Commission on May 12, 1977.
herein) had been the quarry superintendent in the Province of Laguna since his
appointment as such on May 31, 1959. In April and May of 1973, petitioner- j. On January 23, 1979, the Civil Service Commission resolved said appeal by
appellant denounced graft and corrupt practices by employees of the provincial declaring the dismissal unjustified, exonerating Berroya of charges, and directing
government of Laguna. Thereafter, the development of events may be briefly his reinstatement as quarry superintendent.
encapsulated as follows:
k. On February l4, 1979, respondent-appellee provincial governor sought relief from
a. On July 20, l973, herein respondent-appellee provincial governor (one of the the CSC decision of January 23, 1979 declaring Berroya's dismissal unjustified.
petitioners herein) issued Office Order No. 72 transferring Berroya to the office of
the Provincial Engineer. An amended office order invoked LOI 14-B for said transfer. 1. On October 15, 1979, the CSC Merit System Board denied said motion for
reconsideration in its Resolution No. 567.
b. Berroya challenged said transfer, and on October 25, 1973, the Civil Service
Commission ruled the same violative of Section 32, RA 2260, and ordered that m. Thereafter, respondent-appellee provincial governor moved anew to set aside
Berroya be reverted to his regular position of quarry superintendent. O.P. Decision 1834, Series of 1976-the first motion for reconsideration of which had
been denied on November 6, 1978. (ref. #h, supra). The Office of the President
c. On December 12, 1973, instead of complying with the CSC directive that Berroya dismissed said motion on March 27, 1981.
be reverted to his regular position, herein respondent-appellee provincial governor
suspended Berroya for alleged gross discourtesy, inefficiency and insubordination. Petitioner-appellant's formal demand for reinstatement to the position of quarry
On that basis, reconsideration of the CSC directive that Berroya be reverted to the superintendent having been disdained despite the factual antecedents aforestated,
position of quarry superintendent was sought as academic (sic). he filed, [on May 27, 1980] the antecedent Civil Case No. SC-1834 for mandamus
to compel his reversion to the position of quarry superintendent at the Oogong
d. On February 26, 1974 the Civil Service Commission reiterated its October 25, Quarry, with back salaries for the entire period of his suspension and dismissal
1973 directive for the immediate reversion of Berroya to his former position, and (exclusive of leaves of absence with pay), and prayed for moral and exemplary
ruled the one-year suspension illegal. damages, attorney's fees and expenses of suit.
POLITICAL REV |Admin Law Assign 1|73

Respondents-appellees moved to dismiss said petition for mandamus, as amended, WHEREFORE, judgment is hereby rendered:
and opposed the therein application for preliminary injunctive relief for immediate
reinstatement. 1. Ordering respondents to reinstate petitioner to any position
equivalent to that of a quarry superintendent which has been
In an Order of December 1, 1980, the trial court denied the application for abolished in the present plantilla of the provincial government of
preliminary injunctive relief "until after the parties shall have adduced evidence, Laguna as reorganized pursuant to PD 1136 without diminution in
pro and con the grant of injunctive relief", and similarly deferred its resolution on rank and salary;
the motion to dismiss "for lack of merit for the present ... until after the trial."
2. Ordering respondents to pay the back salary of petitioner from
On December 15, 1980, respondents-appellees answered the petition for April 26, 1977 to September 1, 1977 only and appropriating funds
mandamus and prayed that judgment be rendered- therefor, as soon as this decision becomes final;

1. Dismissing the Complaint and denying the prayer for 3. Dismissing all claims and counterclaims of both parties for other
Preliminary Injunction; damages including attorney's fees [Rollo, p. 35].

2. Declaring petitioner to have been legally separated or dismissed On June 6, 1985, herein private respondent Berroya appealed from the decision of
from the government service; the Regional Trial Court dated May 17, 1985. The appeal was resolved by the
respondent Court of Appeals in his favor in a decision which was promulgated on
3. Order petitioner to pay each of them the sum of P 200,000.00 April 30, 1987, the decretal portion of which states:
by way of moral damages; P 100,000.00 as exemplary damages
and P 10,000.00 as attorney's fees plus P 300.00 each per court WHEREFORE, the present appeal is accordingly resolved as follows:
appearance; other litigation expenses which may be incurred as
may be proved in due course; and to pay the costs of suit [Rollo, (a) Petitioner-appellant is ordered to be reinstated to the position of quarry
pp. 35-37]. superintendent of the Oogong Quarry in Laguna or to the position which said office
may now be called pursuant to the reorganization of the plantilla of the Provincial
During the pendency of the civil case for mandamus, on April 9, 1981 petitioner Government of Laguna under PD 1136, without diminution in rank and salary;
provincial governor filed a petition for relief from O.P. Decision 1834 with the Office
of the President. This was denied on November 27, 1984 on the ground that only (b) Respondents-appellees are ordered to pay the back salary of petitioner-
one motion for reconsideration of O.P. Decision 1834 was allowed, the petition for appellant corresponding to the period of suspension and of illegal dismissal from
relief being the third such motion filed by petitioner. the service, exclusive of that corresponding to leaves of absences with pay;

On May 17, 1985, after trial, the court a quo rendered its decision finding the (c) Respondents-appellants (sic) are ordered, jointly and severally, to pay
transfer of petitioner- appellant from his position of quarry superintendent to the petitioner-appellant the sum of P 50,000.00 as and for moral damages;
office of the Provincial Engineer sufficiently warranted. Furthermore, his one-year
suspension was found to be proper under LOI 14-B and unassailable upon (d) Respondents-appellants (sic) are ordered, jointly and severally, to pay
affirmation by the Local Review Board. His summary dismissal was likewise found petitioner-appellant the further sum of P 20,000.00 as and for attorney's fees, plus
to be a justified exercise of the authority granted under LOI 14-B. The trial Court costs and expenses of suit.
further decided "that none of the respondents should be held personally liable in
their private capacity to the petitioner because their actuations are not at all tainted The decision of May 17, 1985, in Civil Case No. SC-1748 is accordingly set aside
with malice and bad faith" [Rollo, p. 38]. forthwith.

However, although the trial court upheld the validity of Berroya's dismissal, it With costs against respondents-appellees.
nevertheless ordered his reinstatement to an equivalent position as a matter of
equity. Hence, the dispositive portion of its decision reads as follows: SO ORDERED. [Rollo, p. 43.]
POLITICAL REV |Admin Law Assign 1|74

Petitioners moved to reconsider the decision of the appellate court but their motion Fourth
was denied. Hence, the instant petition docketed as G.R. No. 80160, which is "both
or alternatively an original action for certiorari and mandamus and an appeal by THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS
certiorari" [See Rollo, p. 1, et seq.] Another petition for review of the Court of WELL AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE DECISION OF THE
Appeals' decision was filed with this Court on October 8, 1987 docketed as G.R. No. LOCAL BOARD OF REVIEW UNDER LOI 14-B MAY BE REVIEWED UNDER THE
79985 by the same petitioners. However, in a resolution dated November 16, 1987, CONSTITUTIONAL PREROGATIVE OF THE PRESIDENT TO SUPERVISE LOCAL
the Court noted the manifestation/motion filed by petitioners stating, among other GOVERNMENT UNITS, WHICH INCLUDES THE AUTHORITY TO REVIEW, MODIFY OR
things, that the petition docketed as G.R. No. 79985 be considered withdrawn and REVERSE DECISION INVOLVING SUSPENSION OF LOCAL OFFICIALS AND
the petition dated October 16, 1987 which was filed on October 19, 1987 and EMPLOYEES.
docketed as G.R. No. 80160 be considered as the main and real petition [Rollo, p.
50]. Fifth

Accordingly, the parties were required to submit their respective pleadings in G.R. THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS
No. 80160. The petition in G.R. No. 80160 contains the following assignment of WELL AS EXCEEDED ITS JURISDICTION IN CONCLUDING IN RATHER STRONG
errors: LANGUAGE THAT THE "ABOLITION OF THE POSITION OF QUARRY
SUPERINTENDENT FROM THE PLANTILLA OF THE PROVINCIAL GOVERNMENT OF
First LAGUNA MUST BE VIEWED WITH (sic) ABERRATION AND AN ANOMALY, IN THE
LIGHT OF UNCONTROVERTED SHOWING THAT QUARRY OPERATIONS AT THE SAME
THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION AS WELL AS SITE CONTINUE TO DATE, AS WOULD MILITATE AGAINST ATTENDANCE OF GOOD
EXCEEDED ITS JURISDICTION IN DENYING PETITIONERS' MOTION FOR FAITH IN THE ABOLITION OF SAID OFFICE."
RECONSIDERATION BY MEANS OF A MERE MINUTE RESOLUTION, STATING NO
LEGAL BASIS THEREFOR, IN GROSS VIOLATION OF THE CONSTITUTION'S Sixth
EXPRESS MANDATE AND WHEN IT STATED AND HELD IN SAID RESOLUTION "THAT
NO NEW REASON HAS BEEN ADDUCED [IN SAID MOTION] TO JUSTIFY A REVERSAL THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS
OR MODIFICATION OF [ITS] FINDINGS AND CONCLUSIONS". WELL AS EXCEEDED ITS JURISDICTION IN ORDERING THE PAYMENT OF PRIVATE
RESPONDENTS BACK SALARIES FOR THE PERIOD OF HIS SUSPENSION AS WELL
Second AS DISMISSAL UNTIL REINSTATEMENT AS QUARRY SUPERINTENDENT, AND IN
AWARDING MORAL DAMAGES IN THE SUM OF P50,000.00 AND ATTORNEY'S FEES
THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS IN THE SUM OF P20,000.00 IN FAVOR OF THE PRIVATE RESPONDENT BERROYA,
WELL AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE RESPONDENT AND IN HOLDING ALL THE PETITIONERS HEREIN SOLIDARILY LIABLE FOR THE
MARIANO L. BERROYA, JR. DOES NOT FALL UNDER THE CATEGORY OF PAYMENT OF AFORESAID BACK SALARIES AND DAMAGES [Rollo, pp. 13-14].
"NOTORIOUSLY UNDESIRABLE" AND THAT THE "APPLICABILITY OF LOI 14-B TO
RESPONDENT BERROYA IS OPEN TO QUESTION AS HE WAS NEVER ASKED TO The first error assigned in the instant petition is not well taken. A thorough perusal
RESIGN AS BEING NOTORIOUSLY UNDESIRABLE". of the assailed resolution of the respondent CA denying petitioners' motion for
reconsideration reveals clearly its legal basis. Thus, its resolution stating that
Third
Considering that the motion for reconsideration of the decision promulgated on April
THE RESPONDENT COURT BLATANTLY ERRED AND GRAVELY ABUSED ITS 30, 1987 filed by respondent-appellee merely reiterates the grounds and
DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE arguments already discussed, thoroughly analyzed and passed upon by this Court;
"RECALL" OF THE DISMISSAL ORDER IS ITSELF ATTENDED BY A TOUCH OF and that no new reason has been adduced to justify a reversal or modification of
MYSTERY, MENTIONED ONLY IN THE TESTIMONY OF PETITIONER PROVINCIAL the findings and conclusion of this Court.
GOVERNOR, UNFORTIFIED BY ANY WRITING THEREOF, AND NOT ADVERTED TO IN
THE DECEMBER 15, 1980 ANSWER FILED IN THE ANTECEDENT mandamus ACTION, WHEREFORE, the motion for reconsideration is DENIED for lack of merit [Rollo, p.
AND IN NOT FINDING THAT RESPONDENT BERROYA COMMITTED ABANDONMENT 45; Emphasis supplied].
OF OFFICE.
POLITICAL REV |Admin Law Assign 1|75

constitutes sufficient compliance with the constitutional mandate that no motion for rendered. The Office of the President denied such petition in a resolution dated
reconsideration of a decision of the court shall be denied without stating the legal March 27, 1981 [Folder of Exhibits, Vol. 1, p. 210] on the strength of Executive
basis therefor (1987 Constitution, Art. VIII, Sec. 14, par. 2). Order No. 19, Series of 1966 which empowers said office to act upon petitions for
reconsideration, even if filed late, in exceptionally meritorious cases. Said Office
The resolution of the remaining assigned errors hinges on a determination of the further pointed out that upon review of the records of the case, it was shown that
effect of the decisions rendered in favor of Berroya by two administrative agencies. Berroya's motion for reconsideration was filed on July 15, 1974 and not on July 15,
1975 as erroneously indicated in O.P. Decision No. 1834 [Folder of Exhibits, Vol. 1,
A. It is worth noting that the issue of legality of the order of suspension by petitioner p. 213].
Governor dated December 12, 1973 had already been passed upon in a decision of
the Office of the President (O.P. Decision No. 1834) dated May 19, 1976 reversing From the foregoing, it can be seen that OP Decision No. 1834 had already attained
its earlier ruling in O.P. Decision No. 954 dated May 29, 1974. The Office of the finality upon denial of the first motion for reconsideration in view of the clear
President categorically ruled as follows: provisions of the applicable law at the time. Executive Order No. 19, Series of 1966,
which provides:
xxx xxx xxx
xxx xxx xxx
It is not disputed that the Governor, in issuing his Order of Suspension, was
exercising an authority legally endowed upon (sic) him by LOI 14-B, but it must not 5. Petitions for reconsideration filed after the lapse of the aforesaid period (fifteen
be an unbridled exercise of such authority.... days from receipt of the decision) shall not be entertained unless the Office of the
President, for exceptionally meritorious causes, decides to act thereon, provided
A review of the records discloses that the only act of the governor which was that only one petition for reconsideration by any party shall be allowed [Emphasis
sustained by the Local Review Board was his imposing the suspension on Berroya supplied.]
for alleged discourtesy. This Office is prone to adopt a contrary stand on the matter
taking into consideration the circumstances leading to the writing of the so-called Accordingly, the filing of the second petition for reconsideration could not have
"dishonest' statements of the petitioner. It is unfortunate that the Local Review stayed the finality of the aforesaid decision.
Board took it as an infraction of the Civil Service Rules and Regulations. It must be
observed that the said statements were made in the course of a pending case before In a last ditch attempt to assail the validity of O.P. Decision No. 1834, a petition for
the Civil Service Commission, and in defense of the position of the petitioner. relief was filed by herein petitioners on April 9, 1981, during the pendency of the
Although the said statements, by themselves, may be considered as lacking in mandamus case. This petition was finally denied in a resolution of the office dated
refinement, still this fact alone does not justify the drastic action taken against the November 27, 1984.
petitioner in this case. . . .
B. On the other hand, the validity of Berroya's dismissal was already passed upon
In view of the foregoing, this Office rules that the suspension order was unjustified. by the Merit Systems Board of the Civil Service Commission in MSB Case No. 40.
Considering that respondent Berroya has already served the suspension order and In a decision promulgated on January 23, 1979, the Merit Systems Board held as
that his suspension was not proper, it is hereby ordered that he be entitled to the follows:
payment of his back salaries corresponding to the period of his suspension [Folder
of Exhibits, Vol. 1, pp. 102-103]. After carefully perusing the records of this case, this board is convinced that there
is no strong evidence of guilt against Berroya. In fact, there is not even sufficient
From this decision of the Office of the President, petitioner Governor filed a petition evidence to maintain the charges against him. Hence, the same does not fall within
for reconsideration dated June 14, 1976 which was denied for lack of merit in a the scope of Section 40, Presidential Decree No. 807.
resolution of the Office of the President dated November 6, 1978 [Folder of Exhibits,
Vol. 1, p. 170]. On July 3, 1979, petitioner governor filed a second petition to The record does not show that Berroya is notoriously undesirable. On the contrary,
reconsider O.P. Decision No. 1834 on the main ground that the disputed decision his performance ratings from the period ending December 31, 1969 to the period
is null and void ab initio allegedly because Berroya filed his motion for ending June 30, 1973 are all very satisfactory.
reconsideration of O.P. Decision No. 954 only on July 15, 1975 or after a lapse of
one year and forty seven (47) days from the date when the said decision was
POLITICAL REV |Admin Law Assign 1|76

Such being the case, he is not notoriously undesirable under the standard laid down Furthermore, the trial court's act of reviewing and setting aside the findings of the
by the President, to wit: "the test of being notoriously undesirable is two-fold: two administrative bodies was in gross disregard of the basic legal precept that
whether it is common knowledge or generally known as universally believed to be accords finality to administrative findings of facts.
true or manifest to the world that petitioner committed the acts imputed against
him, and whether he had contracted the habit for any of the enumerated The general rule, under the principles of administrative law in force in this
misdemeanors". The same are not present in the case of Berroya. On the contrary jurisdiction, is that decisions of administrative officers shall not be disturbed by the
he should be given recognition for his efforts in exposing the irregularities allegedly courts, except when the former have acted without or in excess of their jurisdiction,
committed by some authorities of the Laguna Provincial Government which led to or with grave abuse of discretion. Findings of administrative officials and agencies
the filing of criminal as well as administrative cases against such officials. who have acquired expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but at times even finality if such
Foregoing premises considered, this Board finds the order of dismissal dated April findings are supported by substantial] evidence. . . . [Lianga Bay Logging Co., Inc.
27, 1977, without justifiable basis. Wherefore, the Board hereby exonerates Engr. v. Lopez Enage, G.R. No. L-30637, July 16, 1987,152 SCRA 80].
Mariano Berroya, Jr. of the charges against him. Consequently, it is hereby directed
that he be reinstated to his position as Quarry Superintendent of Laguna Finally, the Court cannot ignore the undisputed fact that the decisions rendered by
immediately, [Folder of Exhibits, Vol. 1, pp. 175-176]. the Office of the President and the Merit Systems Board had attained finality without
petitioners having taken any timely legal recourse to have the said decisions
The motion for reconsideration from this decision was denied in a resolution of the reviewed by the courts. On the other hand, Berroya, in order to enforce his right to
Board dated October 15, 1979. This decision was therefore already final when reinstatement and to back salaries pursuant to these final and executory
Berroya instituted suit in 1980 to compel petitioner to reinstate him to his former administrative rulings, instituted a suit for mandamus to compel petitioners to
position and to pay his back salaries. comply with the directives issued by the two administrative agencies.

Since the decisions of both the Civil Service Commission and the Office of the Since private respondent Berroya had established his clear legal right to
President had long become final and executory, the same can no longer be reviewed reinstatement and back salaries under the aforementioned final and executory
by the courts. It is well-established in our jurisprudence that the decisions and administrative decisions, it became a clear ministerial duty on the part of the
orders of administrative agencies, rendered pursuant to their quasi-judicial authorities concerned to comply with the orders contained in said decisions [Tanala
authority, have upon their finality, the force and binding effect of a final judgment v. Legaspi, G.R. No. L-22537, March 31, 1965,13 SCRA 566 at 574-575].
within the purview of the doctrine of resjudicata [Brillantes v. Castro, 99 Phil. 497
(1956), Ipekdjian Merchadising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430, The established rule is that a writ of mandamus lies to enforce a ministerial duty or
September 30, 1963, 9 SCRA 72.] The rule of res judicata which forbids the "the performance of an act which the law specifically enjoins as a duty resulting
reopening of a matter once judicially determined by competent authority applies as from office, trust or station" [Section 3, Rule 65 of the Revised Rules of Court;
well to the judicial and quasi-judicial acts of public, executive or administrative Lianto v. Mohamad Ali Dimaporo, et al., G.R. No. L-21905, March 31, 1966, 16
officers and boards acting within their jurisdiction as to the judgments of courts SCRA 599]. In this case, the appropriate administrative agencies having
having general judicial powers [Brillantes v. Castro, supra at 503]. determined with finality that Berroya's suspension and dismissal were without just
cause, his reinstatement becomes a plain ministerial duty of the petitioner
Indeed, the principle of conclusiveness of prior adjudications is not confined in its Provincial Governor, a duty whose performance may be controlled and enjoined by
operation to the judgments of what are ordinarily known as courts, but it extends mandamus [Ynchausit and Co. v. Wright, 47 Phil. 866 (1925); Tee and Co. v.
to all bodies upon whom judicial powers had been conferred. Hence, whenever any Wright, 53 Phil. 194 (1929); Gementiza v. Court of Appeals, G.R. Nos. L-41717-
board, tribunal or person is by law vested with authority to judicially determine a 33, April 12, 1982,113 SCRA 477; Laganapan v. Asedillo, G.R. No. L-28353,
question, like the Merit Systems Board of the Civil Service Commission and the September 30, 1987, 154 SCRA 377].
Office of the President, for instance, such determination, when it has become final,
is as conclusive between the same parties litigating for the same cause as though Thus, this Tribunal upholds the appellate court's judgment for the reinstatement of
the adjudication had been made by a court of general jurisdiction [Ipekdjian respondent Berroya and payment of his back salaries corresponding to the period
Merchandising Co., Inc. v. Court of Tax Appeals, supra at 76]. of suspension and of illegal dismissal from service, exclusive of that corresponding
to leaves of absences with pay. However, as respondent Berroya can no longer be
reinstated because he has already reached the compulsory retirement age of sixty
POLITICAL REV |Admin Law Assign 1|77

five years on December 7, 1986,** he should be paid his back salaries [Salcedo v. (i)t having been clearly shown by evidence, that respondent,
Court of Appeals, G.R. No. L-40846, January 31, 1978, 81 SCRA 408] and also all Deogracias Remo, in his capacity as Mayor of Goa, refused to
the retirement and leave privileges that are due him as a retiring employee in reinstate the petitioner to his former position in the police force of
accordance with law [Tanala v. Legaspi, supra at 576]. Goa, despite the orders of Malacanang to do so (Exhs. G and I),
and inspite of the opinion of the Secretary of Finance (Exh. H), the
According to settled jurisprudence, Berroya, as an illegally terminated civil service respondent Mayor of Goa, willfully acted in bad faith, and
employee is entitled to back salaries limited only to a maximum period of five years therefore, he, as Mayor of Goa, should pay for damages caused to
Laganapan v. Asedillo, supra; Balquidra v. CFI of Capiz, Branch II, G.R. No. L- the petitioner, Angel Enciso. [At pp. 807-808.]
40490, October 28, 1977, 80 SCRA 123; Salcedo v. Court of Appeals, supra,
Gementiza v. Court of Appeals, supra]. It is well-settled that when a public officer goes beyond the scope of his duty,
particularly when acting tortiously, he is not entitled to protection on account of his
That petitioners Provincial Governor, Provincial Treasurer and Provincial Engineer office, but is liable for his acts like any private individual [Palma v. Graciano, 99
of Laguna, the Sangguniang Panlalawigan of Laguna and the Province of Laguna, Phil. 72 (1956)].
formally impleaded herein,'** are liable for back salaries in case of illegal
termination of a civil service employee finds support in earlier decisions of this Court Thus, in Mendoza v. De Leon [33 Phil. 508 (1916)], it was held:
[Balquidra v. Court of First Instance of Capiz, Branch II, supra; Gementiza v. Court
of Appeals, supra; Rama v. Court of Appeals, G.R. Nos. L-44484, 1,44842, L-44894, Nor are officers or agents of the Government charged with the performance of
L-44591, March 16, 1987,148 SCRA 496; Laganapan v. Asedillo, supra]. governmental duties which are in their nature legislative or quasi-judicial liable for
the consequences of their official acts, unless it be shown that they act wilfully and
However, the petitioners Juanito Rodil and Amado Romey must be held liable only maliciously and with the express purpose of inflicting injury upon the plaintiff [at
in their official capacities as Provincial Engineer and Provincial Treasurer, 513; Emphasis supplied].
respectively since they had been expressly sued by Berroya as such [Petition for
mandamus with Preliminary Injunction, Record, Vol. 1, p. 1, et seq.; Gray v. De Accordingly, applying the principle that a public officer, by virtue of his office alone,
Vera, G.R. No. L-23966, May 22, 1969, 28 SCRA 268]. is not immune from damages in his personal capacity arising from illegal acts done
in bad faith [Tabuena v. Court of Appeals, G.R. No. L-16290, October 31, 1961, 3
The same does not hold true for petitioner provincial governor who was found by SCRA 413; Correa v. Court of First Instance of Bulacan, G. R. No. L-46096, July 30,
the appellate court to have acted in bad faith as manifested by his contumacious 1979, 92 SCRA 312], the Court holds that petitioner Felicisimo T. San Luis, the
refusal to comply with the decisions of the two administrative agencies, thus Provincial Governor of Laguna who has been sued both in his official and private
prompting respondent Berroya to secure an indorsement from the Minister of Local capacities, must be held personally liable to Berroya for the consequences of his
Government and Community Development dated November 15, 1979 for his illegal and wrongful acts.
reinstatement [Annex "Y-9", Folder of Exhibits, Vol. 1, p. 207]. The Minister's
directive having been ignored, Berroya was compelled to bring an action for In this regard, the Court sustains the appellate court's finding that petitioner San
mandamus. Luis must be held liable to Berroya for moral damages since justice demands that
the latter be recompensed for the mental suffering and hardship he went through
Where, as in this case, the provincial governor obstinately refused to reinstate the in order to vindicate his right, apart from the back salaries legally due him [Rama
petitioner, in defiance of the orders of the Office of the President and the Ministry v. Court of Appeals,supra at p. 5061]. The appellate court was clearly warranted in
of Local Government and in palpable disregard of the opinion of the Civil Service awarding moral damages in favor of respondent Berroya because of the obstinacy
Commission, the appellate court's finding of bad faith cannot be faulted and of petitioner Governor who arbitrarily and without legal justification refused
accordingly, will not be disturbed by this Tribunal Enciso v. Remo, G.R. No. L- Berroya's reinstatement in defiance of directives of the administrative agencies with
23670, September 30, 1969, 29 SCRA 580.] This is in line with our previous ruling final authority on the matter. We agree with the appellate court that the sum of P
in Remo v. Palacio [107 Phil. 803 (1960)] that 50,000.00 for moral damages is a reasonable award considering the mental anguish
and serious anxiety suffered by Berroya as a result of the wrongful acts of petitioner
xxx xxx xxx Governor in refusing to reinstate him.
POLITICAL REV |Admin Law Assign 1|78

Finally, as correctly adjudged by respondent court, petitioner San Luis must


likewise answer to Berroya for attorney's fees plus costs and expenses of suit, which
have been fixed by said court at P 20,000.00, in view of the wrongful refusal of
petitioner provincial governor to afford Berroya his plainly valid and just claim for
reinstatement and back salaries [Rollo, p. 42].

WHEREFORE, the assailed decision of the appellate court is hereby MODIFIED as


follows: (1) the petitioners, in their official capacities, are ordered to pay private
respondent Berroya, his back salaries for a maximum period of five years; (2) since
the reinstatement of Berroya can no longer be ordered by reason of his having
reached the retirement age, he should instead be paid all the retirement benefits
to which he is entitled under the law; and (3) petitioner Felicisimo T. San Luis, in
his personal capacity, is further ordered to pay Berroya the sum of P 50,000.00 as
and for moral damages, the sum of P 20,000.00 as and for attorney's fees plus
costs and other expenses of suit. This decision shall be IMMEDIATELY EXECUTORY.

SO ORDERED.
POLITICAL REV |Admin Law Assign 1|79

18. G.R. No. 216914, December 06, 2016 The following day, 26 February 2015, SPCMB wrote public respondent, Presiding
Justice of the CA, Andres B. Reyes, Jr.:
SUBIDO PAGENTE CERTEZA MENDOZA AND BINAY LAW
OFFICES, Petitioner, v. THE COURT OF APPEALS, HON. ANDRES B. REYES, The law firm of Subido Pagente Certeza Mendoza and Binay was surprised to receive
JR., IN HIS CAPACITY AS PRESIDING JUSTICE OF THE COURT OF a call from Manila Times requesting for a comment regarding a [supposed petition]
APPEALS, AND THE ANTI-MONEY LAUNDERING COUNCIL, REPRESENTED filed by the Republic of the Philippines represented by the Anti-Money Laundering
BY ITS MEMBERS, HON. AMANDO M. TETANGCO, JR., GOVERNOR OF THE Council before the Court of Appeals seeking to examine the law office's bank
BANGKO SENTRAL NG PILIPINAS, HON. TERESITA J. HERBOSA, accounts.
CHAIRPERSON OF THE SECURITIES AND EXCHANGE COMMISSION, AND
HON. EMMANUEL F. DOOC, INSURANCE COMMISSIONER OF THE To verify the said matter, the law office is authorizing its associate Atty. Jose Julius
INSURANCE COMMISSION, Respondents. R. Castro to inquire on the veracity of said report with the Court of Appeals. He is
likewise authorized to secure copies of the relevant documents of the case, such as
DECISION the petition and orders issued, if such a case exists.

PEREZ, J.: As this is a matter demanding serious and immediate attention, the Firm
respectfully manifests that if no written response is received within 24-hours from
Challenged in this petition for certiorari1 and prohibition under Rule 65 of the Rules receipt of this letter, we shall be at liberty to assume that such a case exists and
of Court is the constitutionality of Section 11 of Republic Act (R.A.) No. 9160, the we shall act accordingly.
Anti-Money Laundering Act, as amended, specifically the Anti-Money Laundering
Council's authority to file with the Court of Appeals (CA) in this case, an ex- Hoping for your immediate action.
parte application for inquiry into certain bank deposits and investments, including
related accounts based on probable cause.
Respectfully yours,
For the Firm
In 2015, a year before the 2016 presidential elections, reports abounded on the
supposed disproportionate wealth of then Vice President Jejomar Binay and the rest
CLARO F. CERTEZA5
of his family, some of whom were likewise elected public officers. The Office of the
Ombudsman and the Senate conducted investigations2 and inquiries3 thereon
ostensibly based on their respective powers delineated in the Constitution. Within twenty four (24) hours, Presiding Justice Reyes wrote SPCMB denying its
request, thus:
From various news reports announcing the inquiry into then Vice President Binay's
bank accounts, including accounts of members of his family, petitioner Subido Anent your request for a comment on a supposed petition to inquire into your law
Pagente Certeza Mendoza & Binay Law Firm (SPCMB) was most concerned with the office's bank accounts, please be informed that a petition of this nature is strictly
article published in the Manila Times on 25 February 2015 entitled "Inspect Binay confidential in that when processing the same, not even the handling staff members
Bank Accounts" which read, in pertinent part: of the Office of the Presiding Justice know or have any knowledge who the subject
bank account holders are, as well as the bank accounts involved.
xxx The Anti-Money Laundering Council (AMLC) asked the Court of Appeals (CA) to
allow the [C]ouncil to peek into the bank accounts of the Binays, their corporations, Please be informed further that clearly under the rules, the Office of the Presiding
and a law office where a family member was once a partner. Justice is strictly mandated not to disclose, divulge, or communicate to anyone
directly or indirectly, in any manner or by any means, the fact of the filing of any
xxxx petition brought before this Court by the Anti-Money Laundering Council, its
contents and even its entry in the logbook.
Also the bank accounts of the law office linked to the family, the Subido Pagente
Certeza Mendoza & Binay Law Firm, where the Vice President's daughter Abigail Trusting that you find satisfactory the foregoing explanation.6
was a former partner.4
POLITICAL REV |Admin Law Assign 1|80

By 8 March 2015, the Manila Times published another article entitled, "CA orders
RESPONDENT COURT OF APPEALS IN RELATION THERETO VIOLATES
probe of Binay's assets" reporting that the appellate court had issued a Resolution
PETITIONER'S RIGHT TO DUE PROCESS;
granting the ex-parte application of the AMLC to examine the bank accounts of
SPCMB:

2. A CARTE BLANCHE AUTHORITY TO EXAMINE ANY AND ALL TRANSACTIONS


The Court of Appeals (CA) has officially issued an order for examination of Vice
PERTAINING TO PETITIONER'S BANK ACCOUNTS VIOLATES THE
President Jejomar Binay's bank accounts.
ATTORNEY-CLIENT PRIVILEGE WHICH IS SACROSANCT IN THE LEGAL
PROFESSION;
In granting the petition of the Anti-Money Laundering Council (AMLC), the CA also
ordered the inspection of the bank deposits of Binay's wife, children, and a law
office connected to him.
3. A BLANKET AUTHORITY TO EXAMINE PETITIONER'S BANK ACCOUNTS,
INCLUDING ANY AND ALL TRANSACTIONS THEREIN FROM ITS OPENING
xxx xxx xxx
UP TO THE PRESENT, PARTAKES THE NATURE OF A GENERAL WARRANT
THAT IS CLEARLY INTENDED TO AID A MERE FISHING EXPEDITION;
The bank accounts of the law office linked to Binay - the Subido Pagente Certeza
Mendoza & Binay where Binay's daughter, Makati City (Metro Manila) Rep. Mar-
len Abigail Binay was a partner, are also included in the probe, the sources said.7
4. THERE IS NOTHING IN THE ANTI-MONEY LAUNDERING ACT THAT ALLOWS
OR JUSTIFIES THE WITHHOLDING OF INFORMATION AND/OR ANY COURT
Forestalled in the CA thus alleging that it had no ordinary, plain, speedy, and
RECORDS OR PROCEEDINGS PERTAINING TO AN EXAMINATION OF A
adequate remedy to protect its rights and interests in the purported ongoing
BANK ACCOUNT, ESPECIALLY IF THE COURT HAS ALREADY GRANTED THE
unconstitutional examination of its bank accounts by public respondent Anti-Money
AUTHORITY TO CONDUCT THE EXAMINATION;
Laundering Council (AMLC), SPCMB undertook direct resort to this Court via this
petition for certiorari and prohibition on the following grounds:
5. THE PETITIONER DID NOT COMMIT, NOR HAS THE PETITIONER BEEN
A. THE ANTI-MONEY LAUNDERING ACT IS UNCONSTITUTIONAL INSOFAR AS
IMPLEADED IN ANY COMPLAINT INVOLVING ANY PREDICATE CRIME THAT
IT ALLOWS THE EXAMINATION OF A BANK ACCOUNT WITHOUT ANY
WOULD JUSTIFY AN INQUIRY INTO ITS BANK ACCOUNTS; AND
NOTICE TO THE AFFECTED PARTY:cralawlawlibrary

1. IT VIOLATES THE PERSON'S RIGHT TO DUE PROCESS; AND 7. THE EXAMINATION OF THE PETITIONER'S BANK ACCOUNTS IS A FORM OF
POLITICAL PERSECUTION OR HARASSMENT.8

2. IT VIOLATES THE PERSON'S RIGHT TO PRIVACY.


In their Comment, the AMLC, through the Office of the Solicitor General (OSG),
points out a supposed jurisdictional defect of the instant petition, i.e., SPCMB failed
B. EVEN ASSUMING ARGUENDO THAT THE ANTI-MONEY LAUNDERING ACT to implead the House of Representatives which enacted the AMLA and its
IS CONSTITUTIONAL, THE RESPONDENTS COMMITTED GRAVE ABUSE OF amendments. In all, the OSG argues for the dismissal of the present petition,
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION highlighting that the AMLC's inquiry into bank deposits does not violate due process
CONSIDERING THAT:cralawlawlibrary nor the right to privacy:

1. Section 11's allowance for AMLC's ex-parte application for an inquiry into
1. THE REFUSAL OF RESPONDENT PRESIDING JUSTICE TO PROVIDE particular bank deposits and investments is investigative, not adjudicatory;
PETITIONER WITH A COPY OF THE EX-PARTE APPLICATION FOR BANK
EXAMINATION FILED BY RESPONDENT AMLC AND ALL OTHER PLEADINGS, 2. The text of Section 11 itself provides safeguards and limitations on the allowance
MOTIONS, ORDERS, RESOLUTIONS, AND PROCESSES ISSUED BY THE to the AMLC to inquire into bank deposits: (a) issued by the CA based on probable
POLITICAL REV |Admin Law Assign 1|81

cause; and (b) specific compliance to the requirements of Sections 2 and 3, Article On the sole procedural issue of whether SPCMB ought to have impleaded Congress,
III of the Constitution; the contention of the OSG though novel is untenable. All cases questioning the
constitutionality of a law does not require that Congress be impleaded for their
3. The ex-parte procedure for investigating bank accounts is necessary to achieve resolution. The requisites of a judicial inquiry are elementary:
a legitimate state objective;
1. There must be an actual case or controversy; party;
4. There is no legitimate expectation of privacy as to the bank records of a
depositor; 2. The question of constitutionality must be raised by the proper party;

5. The examination of, and inquiry, into SPCMB's bank accounts does not violate 3. The constitutional question must be raised at the earliest possible opportunity;
Attorney-Client Privilege; and and

6. A criminal complaint is not a pre-requisite to a bank inquiry order. 4. The decision of the constitutional question must be necessary to the
determination of the case itself.9
In their Reply, SPCMB maintains that the ex-parte proceedings authorizing inquiry
of the AMLC into certain bank deposits and investments is unconstitutional, The complexity of the issues involved herein require us to examine the assailed
violating its rights to due process and privacy. provision vis-a-vis the constitutional proscription against violation of due process.
The statute reads:
Before anything else, we here have an original action turning on three crucial
matters: (1) the petition reaches us from a letter of the Presiding Justice of the CA SEC. 11. Authority to Inquire into Bank Deposits. - Notwithstanding the provisions
in response to a letter written by SPCMB; (2) SPCMB's bank account has been of Republic Act No. 1405, as amended; Republic Act No. 6426, as amended;
reported to be a related account to Vice President Binay's investigated by the AMLC Republic Act No. 8791; and other laws, the AMLC may inquire into or examine any
for anti-money laundering activities; and (3) the constitutionality of Section 11 of particular deposit or investment, including related accounts, with any banking
the AMLA at its recent amendment has not been squarely raised and addressed. institution or non-bank financial institution upon order of any competent court
based on an ex parte application in cases of violations of this Act, when it has been
To obviate confusion, we act on this petition given that SPCMB directly assails the established that there is probable cause that the deposits or investments, including
constitutionality of Section 11 of the AMLA where it has been widely reported that related accounts involved, are related to an unlawful activity as defined in Section
Vice President Binay's bank accounts and all related accounts therewith are subject 3(i) hereof or a money laundering offense under Section 4 hereof; except that no
of an investigation by the AMLC. In fact, subsequent events from the filing of this court order shall be required in cases involving activities defined in Section 3(i)(1),
petition have shown that these same bank accounts (including related accounts) (2), and (12) hereof, and felonies or offenses of a nature similar to those mentioned
were investigated by the Ombudsman and both Houses of the Legislature. However, in Section 3(i)(1), (2), and (12), which are punishable under the penal laws of other
at the time of the filing of this petition, SPCMB alleged that its accounts have been countries, and terrorism and conspiracy to commit terrorism as defined and
inquired into but not subjected to a freeze order under Section 10 of the AMLA. penalized under Republic Act No. 9372.
Thus, as previously noted, with its preclusion of legal remedies before the CA which
under the AMLA issues the ex-parte bank inquiry and freeze orders, Sections 10 The Court of Appeals shall act on the application to inquire into or examine any
and 11, respectively, SPCMB establishes that it has no plain, speedy and adequate deposit or investment with any banking institution or non-bank financial institution
remedy in the ordinary course of law to protect its rights and interests from the within twenty-four (24) hours from filing of the application.
purported unconstitutional intrusion by the AMLC into its bank accounts.
To ensure compliance with this Act, the Bangko Sentral ng Pilipinas may, in the
The foregoing shall be addressed specifically and bears directly on the disposition course of a periodic or special examination, check the compliance of a covered
of the decision herein. institution with the requirements of the AMLA and its implementing rules and
regulations.
Additionally, we note that the OSG did not question how this petition reaches us
from a letter of the appellate court's Presiding Justice, only that, procedurally,
SPCMB should have impleaded Congress.
POLITICAL REV |Admin Law Assign 1|82

For purposes of this section, 'related accounts' shall refer to accounts, the funds this Act, when it has been established that there is probable cause that the
and sources of which originated from and/or are materially linked to the monetary deposits or investments are related to an unlawful activity as defined in
instrument(s) or property(ies) subject of the freeze order(s). Section 3(i) hereof or a money laundering offense under Section 4 hereof,
except that no court order shall be required in cases involving unlawful
A court order ex parte must first be obtained before the AMLC can inquire into these activities defined in Sections 3(i)1, (2) and (12).
related Accounts: Provided, That the procedure for the ex parte application of
the ex partecourt order for the principal account shall be the same with that of the To ensure compliance with this Act, the Bangko Sentral ng Pilipinas (BSP) may
related accounts. inquire into or examine any deposit of investment with any banking institution or
non bank financial institution when the examination is made in the course of a
The authority to inquire into or examine the main account and the related accounts periodic or special examination, in accordance with the rules of examination of the
shall comply with the requirements of Article III, Sections 2 and 3 of the 1987 BSP. (Emphasis supplied)
Constitution, which are hereby incorporated by reference.10
Of course, Section 11 also allows the AMLC to inquire into bank accounts without
The due process clause of the Constitution reads: having to obtain a judicial order in cases where there is probable cause that the
deposits or investments are related to kidnapping for ransom, certain violations of
SECTION 1. No person shall be deprived of life, liberty or property without due the Comprehensive Dangerous Drugs Act of 2002, hijacking and other violations
process of law, nor shall any person be denied the equal protection of the laws. 11 under R.A. No. 6235, destructive arson and murder. Since such special
circumstances do not apply in this case, there is no need for us to pass comment
The right to due process has two aspects: (1) substantive which deals with the on this proviso. Suffice it to say, the proviso contemplates a situation distinct from
extrinsic and intrinsic validity of the law; and (2) procedural which delves into the that which presently confronts us, and for purposes of the succeeding discussion,
rules government must follow before it deprives a person of its life, liberty or our reference to Section 11 of the AMLA excludes said proviso.
property.12
In the instances where a court order is required for the issuance of the bank inquiry
As presently worded, Section 11 of the AMLA has three elements: (1) ex- order, nothing in Section 11 specifically authorizes that such court order may be
parte application by the AMLC; (2) determination of probable cause by the CA; and issued ex parte. It might be argued that this silence does not preclude the ex
(3) exception of court order in cases involving unlawful activities defined in Sections parte issuance of the bank inquiry order since the same is not prohibited under
3(i)(1), (2), and (12). Section 11. Yet this argument falls when the immediately preceding provision,
Section 10, is examined.
As a brief backgrounder to the amendment to Section 11 of the AMLA, the text
originally did not specify for an ex-parte application by the AMLC for authority to SEC 10. Freezing of Monetary Instrument or Property. — The Court of
inquire into or examine certain bank accounts or investments. The extent of this Appeals, upon application ex parte by the AMLC and after determination that
authority was the topic of Rep. of the Phils. v. Hon. Judge Eugenio, Jr., et al. probable cause exists that any monetary instrument or property is in any way
(Eugenio)13 where the petitioner therein, Republic of the Philippines, asseverated related to an unlawful activity as defined in Section 3(i) hereof, may issue a freeze
that the application for that kind of order under the questioned section of the AMLA order which shall be effective immediately. The freeze order shall be for a
did not require notice and hearing. Eugenio schooled us on the AMLA, specifically period of twenty (20) days unless extended by the court.
on the provisional remedies provided therein to aid the AMLC in enforcing the law:
Although oriented towards different purposes, the freeze order under Section 10
It is evident that Section 11 does not specifically authorize, as a general rule, the and the bank inquiry order under Section 11 are similar in that they are
issuanceex-parte of the bank inquiry order. We quote the provision in full: extraordinary provisional reliefs which the AMLC may avail of to effectively combat
and prosecute money laundering offenses. Crucially, Section 10 uses specific
SEC. 11. Authority to Inquire into Bank Deposits. — Notwithstanding the language to authorize an ex parte application for the provisional relief therein, a
provisions of Republic Act No. 1405, as amended, Republic Act No. 6426, as circumstance absent in Section 11. If indeed the legislature had intended to
amended, Republic Act No. 8791, and other laws, the AMLC may inquire into or authorize ex parte proceedings for the issuance of the bank inquiry order, then it
examine any particular deposit or investment with any banking institution or non could have easily expressed such intent in the law, as it did with the freeze order
bank financial institution upon order of any competent court in cases of violation of under Section 10.
POLITICAL REV |Admin Law Assign 1|83

Even more tellingly, the current language of Sections 10 and 11 of the AMLA was the AMLC into certain bank deposits or investments, notice to the affected party is
crafted at the same time, through the passage of R.A. No. 9194. Prior to the required.
amendatory law, it was the AMLC, not the Court of Appeals, which had authority to
issue a freeze order, whereas a bank inquiry order always then required, without Heeding the Court's observance in Eugenio that the remedy of the Republic then
exception, an order from a competent court. It was through the same enactment lay with the legislative, Congress enacted Republic Act No. 10167 amending Section
that ex parte proceedings were introduced for the first time into the AMLA, in the 11 of the AMLA and specifically inserted the word ex-parte appositive of the nature
case of the freeze order which now can only be issued by the Court of Appeals. It of this provisional remedy available to the AMLC thereunder.
certainly would have been convenient, through the same amendatory law, to allow
a similar ex parte procedure in the case of a bank inquiry order had Congress been It is this current wording of Section 11 which SPCMB posits as unconstitutional and
so minded. Yet nothing in the provision itself, or even the available legislative purportedly actually proscribed in Eugenio.
record, explicitly points to an ex parte judicial procedure in the application for a
bank inquiry order, unlike in the case of the freeze order. We do not subscribe to SPCMB's position.

That the AMLA does not contemplate ex parte proceedings in applications for bank Succinctly, Section 11 of the AMLA providing for ex-parte application and inquiry
inquiry orders is confirmed by the present implementing rules and regulations of by the AMLC into certain bank deposits and investments does not violate
the AMLA, promulgated upon the passage of R.A. No. 9194. With respect to freeze substantive due process, there being no physical seizure of property involved at
orders under Section 10, the implementing rules do expressly provide that the that stage. It is the preliminary and actual seizure of the bank deposits or
applications for freeze orders be filed ex parte, but no similar clearance is granted investments in question which brings these within reach of the judicial process,
in the case of inquiry orders under Section 11. These implementing rules were specifically a determination that the seizure violated due process.14 In
promulgated by the Bangko Sentral ng Pilipinas, the Insurance Commission and the fact, Eugenio delineates a bank inquiry order under Section 11 from a freeze order
Securities and Exchange Commission, and if it was the true belief of these under Section 10 on both remedies' effect on the direct objects,i.e. the bank
institutions that inquiry orders could be issued ex partesimilar to freeze orders, deposits and investments:
language to that effect would have been incorporated in the said Rules. This is
stressed not because the implementing rules could authorize ex parteapplications On the other hand, a bank inquiry order under Section 11 does not necessitate any
for inquiry orders despite the absence of statutory basis, but rather because the form of physical seizure of property of the account holder. What the bank inquiry
framers of the law had no intention to allow such ex parte applications. order authorizes is the examination of the particular deposits or investments in
banking institutions or non-bank financial institutions. The monetary instruments
Even the Rules of Procedure adopted by this Court in A.M. No. 05-11-04-SC to or property deposited with such banks or financial institutions are not seized in a
enforce the provisions of the AMLA specifically authorize ex parte applications with physical sense, but are examined on particular details such as the account holder's
respect to freeze orders under Section 10 but make no similar authorization with record of deposits and transactions. Unlike the assets subject of the freeze order,
respect to bank inquiry orders under Section 11. the records to be inspected under a bank inquiry order cannot be physically seized
or hidden by the account holder. Said records are in the possession of the bank and
The Court could divine the sense in allowing ex parte proceedings under Section 10 therefore cannot be destroyed at the instance of the account holder alone as that
and in proscribing the same under Section 11. A freeze order under Section 10 on would require the extraordinary cooperation and devotion of the bank.15
the one hand is aimed at preserving monetary instruments or property in any way
deemed related to unlawful activities as defined in Section 3(i) of the AMLA. The At the stage in which the petition was filed before us, the inquiry into certain bank
owner of such monetary instruments or property would thus be inhibited from deposits and investments by the AMLC still does not contemplate any form of
utilizing the same for the duration of the freeze order. To make such freeze order physical seizure of the targeted corporeal property. From this cite, we proceed to
anteceded by a judicial proceeding with notice to the account holder would allow examine whether Section 11 of the law violates procedural due process.
for or lead to the dissipation of such funds even before the order could be issued.
(Citations omitted.) As previously stated, the AMLA now specifically provides for an ex-parte application
for an order authorizing inquiry or examination into bank deposits or investments
Quite apparent from the foregoing is that absent a specific wording in the AMLA which continues to pass constitutional muster.
allowing for ex-parteproceedings in orders authorizing inquiry and examination by
POLITICAL REV |Admin Law Assign 1|84

Procedural due process is essentially the opportunity to be heard.16 In this case, at on June 17, 1999, the following day or less than 24 hours later, the Department of
the investigation stage by the AMLC into possible money laundering offenses, Justice received the request, apparently without the Department of Foreign affairs
SPCMB demands that it have notice and hearing of AMLC's investigation into its discharging its duty thoroughly evaluating the same and its accompanying
bank accounts. documents. xxx.

We are not unaware of the obiter in Eugenio17 and cited by SPCMB, voicing xxxx
misgivings on an interpretation of the former Section 11 of the AMLA allowing
for ex-parte proceedings in bank inquiry orders, to wit: [T]he record cannot support the presumption of regularity that the Department of
Foreign Affairs thoroughly reviewed the extradition request and supporting
There certainly is fertile ground to contest the issuance of an ex-parte order. documents and that it arrived at a well-founded judgment that the request and its
Section 11 itself requires that it be established that "there is probable cause that annexed documents satisfy the requirements of law. XXX.
the deposits or investments are related to unlawful activities," and it obviously is
the court which stands as arbiter whether there is indeed such probable cause. The The evaluation process, just like the extradition proceedings, proper
process of inquiring into the existence of probable cause would involve the function belongs to a class by itself. It is sui generis. It is not a criminal
of determination reposed on the trial court. Determination clearly implies a function investigation, but it is also erroneous to say that it is purely an exercise of
of adjudication on the part of the trial court, and not a mechanical application of a ministerial functions. At such stage, the executive authority has the power:
standard pre-determination by some other body. The word "determination" implies (a) to make a technical assessment of the completeness and sufficiency of
deliberation and is, in normal legal contemplation, equivalent to "the decision of a the extradition papers; (b) to outrightly deny the request if on its face and
court of justice." on the face of the supporting documents the crimes indicated are not
extraditable; and (c) to make a determination whether or not the request
The court receiving the application for inquiry order cannot simply take the AMLC's is politically motivated, or that the offense is a military one which is not
word that probable cause exists that the deposits or investments are related to an punishable under non-military penal legislation. Hence, said process may
unlawful activity. It will have to exercise its own determinative function in order to be characterized as an investigative or inquisitorial process in contrast to
be convinced of such fact. The account holder would be certainly capable of a proceeding conducted in the exercise of an administrative body's quasi-
contesting such probable cause if given the opportunity to be apprised of judicial power.
the pending application to inquire into his account; hence a notice
requirement would not be an empty spectacle. It may be so that the process In administrative law, a quasi-judicial proceeding involves: (a) taking and
of obtaining the inquiry order may become more cumbersome or prolonged because evaluation of evidence; (b) determining facts based upon the evidence presented;
of the notice requirement, yet we fail to see any unreasonable burden cast by such and (c) rendering an order or decision supported by the facts proved. Inquisitorial
circumstance. After all, as earlier stated, requiring notice to the account holder power, which is also known as examining or investigatory power, is one of the
should not, in any way, compromise the integrity of the bank records subject of the determinative powers of an administrative body which better enables it to exercise
inquiry which remain in the possession and control of the bank. (Emphasis supplied) its quasi-judicial authority. This power allows the administrative body to inspect the
records and premises, and investigate the activities, of persons or entities coming
On that score, the SPCMB points out that the AMLC 's bank inquiry is preliminary under its jurisdiction, or to require disclosure of information by means of accounts,
to the seizure and deprivation of its property as in a freeze order under Section 10 records, reports, testimony of witnesses, production of documents, or otherwise.
of the AMLA which peculiarity lends itself to a sui generis proceeding akin to the
evaluation process in extradition proceedings pronounced in Secretary of Justice v. The power of investigation consists in gathering, organizing, and analyzing
Hon. Lantion.18 Under the extradition law, the Secretary of Foreign Affairs is bound evidence, which is a useful aid or tool in an administrative agency's performance of
to make a finding that the extradition request and its supporting documents are its rule-making or quasi-judicial functions. Notably, investigation is indispensable
sufficient and complete in form and substance before delivering the same to the to prosecution.19(Emphasis supplied, citations omitted)
Secretary of Justice. We ruled:
The submission of AMLC requires a determination whether the AMLC is an
[L]ooking at the factual milieu of the case before us, it would appear that there was administrative body with quasi-judicial powers; corollary thereto, a determination
failure to abide by the provisions of Presidential Decree No. 1069. For while it is of the jurisdiction of the AMLC.
true that the extradition request was delivered to the Department of Foreign Affairs
POLITICAL REV |Admin Law Assign 1|85

Lim v. Gamosa20 is enlightening on jurisdiction and the requirement of a specific 2. The DOJ or the Ombudsman conducts the preliminary investigation proceeding
grant thereof in the enabling law. We declared that the creation of the National and if after due notice and hearing finds probable cause for money laundering
Commission on Indigenous Peoples (NCIP) by the Indigenous Peoples Rights Act offences, shall file the necessary information before the Regional Trial Courts or the
(IPRA) did not confer it exclusive and original, nor primary jurisdiction, in all claims Sandiganbayan;22
and disputes involving rights of IPs and ICCs where no such specific grant is
bestowed. 3. The RTCs or the Sandiganbayan shall try all cases on money laundering, as may
be applicable.23
In this instance, the grant of jurisdiction over cases involving money laundering
offences is bestowed on the Regional Trial Courts and the Sandiganbayan as the Nowhere from the text of the law nor its Implementing Rules and Regulations can
case may be. In fact, Rule 5 of the IRR is entitled Jurisdiction of Money we glean that the AMLC exercises quasi-judicial functions whether the actual
Laundering Cases and Money Laundering Investigation Procedures: preliminary investigation is done simply at its behest or conducted by the
Department of Justice and the Ombudsman.
Rule 5.a. Jurisdiction of Money Laundering Cases. The Regional Trial Courts
shall have the jurisdiction to try all cases on money laundering. Those committed Again, we hark back to Lantion citing Ruperto v. Torres,23-a where the Court had
by public officers and private persons who are in conspiracy with such public officers occasion to rule on the functions of an investigatory body with the sole power of
shall be under the jurisdiction of the Sandiganbayan. investigation:

Rule 5.b. Investigation of Money Laundering Offenses. - The AMLC shall [Such a body] does not exercise judicial functions and its power is limited to
investigate: investigating facts and making findings in respect thereto. The Court laid down the
test of determining whether an administrative body is exercising judicial functions
(1) suspicious transactions; or merely investigatory functions: Adjudication signifies the exercise of power and
(2) covered transactions deemed suspicious after an investigation conducted by authority to adjudicate upon the rights and obligations of the parties before it.
the AMLC; Hence, if the only purpose for investigation is to evaluate evidence submitted before
(3) money laundering activities; and it based on the facts and Circumstances presented to it, and if the agency is not
(4) other violations of the AMLA, as amended. authorized to make a final pronouncement affecting the parties, then there is an
absence of judicial discretion and judgment.
The confusion on the scope and parameters of the AMLC's investigatory powers and
whether such seeps into and approximates a quasi-judicial agency's inquisitorial adjudicate in regard to the rights and obligations of both the Requesting State and
powers lies in the AMLC's investigation and consequent initial determination of the prospective extraditee. Its only power is to determine whether the papers
whether certain activities are constitutive of anti-money laundering offenses. comply with the requirements of the law and the treaty and, therefore, sufficient
to be the basis of an extradition petition. Such finding is thus merely initial and not
The enabling law itself, the AMLA, specifies the jurisdiction of the trial courts, RTC final. The body has no power to determine whether or not the extradition should
and Sandiganbayan, over money laundering cases, and delineates the investigative be effected. That is the role of the court. The body's power is limited to an initial
powers of the AMLC. finding of whether or not the extradition petition can be filed in court.

Textually, the AMLA is the first line of defense against money laundering in It is to be noted, however, that in contrast to ordinary investigations, the evaluation
compliance with our international obligation. There are three (3) stages of procedure is characterized by certain peculiarities. Primarily, it sets into motion the
determination, two (2) levels of investigation, falling under three (3) jurisdictions: wheels of the extradition process. Ultimately, it may result in the deprivation of
liberty of the prospective extraditee. This deprivation can be effected at two
1. The AMLC investigates possible money laundering offences and initially stages: First, the provisional arrest of the prospective extraditee pending the
determines whether there is probable cause to charge any person with a money submission of the request. This is so because the Treaty provides that in case of
laundering offence under Section 4 of the AMLA, resulting in the filing of a complaint urgency, a contracting party may request the provisional arrest of the person
with the Department of Justice or the Office of the Ombudsman;21 sought pending presentation of the request (Paragraph [1], Article 9, RP-US
Extradition Treaty), but he shall be automatically discharged after 60 days if no
request is submitted (Paragraph 4). Presidential Decree No. 1069 provides for a
POLITICAL REV |Admin Law Assign 1|86

shorter period of 20 days after which the arrested person could be discharged during the NBI investigation, we stressed that the functions of this agency are
(Section 20[d]). Logically, although the Extradition Law is silent on this respect, merely investigatory and informational in nature:
the provisions only mean that once a request is forwarded to the Requested State,
the prospective extraditee may be continuously detained, or if not, subsequently [The NBI] has no judicial or quasi-judicial powers and is incapable of granting any
rearrested (Paragraph [5], Article 9, RP-US Extradition Treaty), for he will only be relief to any party. It cannot even determine probable cause. The NBI is an
discharged if no request is submitted. Practically, the purpose of this detention is investigative agency whose findings are merely recommendatory. It undertakes
to prevent his possible flight from the Requested State. Second, the temporary investigation of crimes upon its own initiative or as public welfare may require in
arrest of the prospective extraditee during the pendency of the extradition petition accordance with its mandate. It also renders assistance when requested in the
in court (Section 6, Presidential Decree No. 1069). investigation or detection of crimes in order to prosecute the persons responsible.

Clearly, there is an impending threat to a prospective extraditee's liberty as early Since the NBI's findings were merely recommendatory, we find that no denial of
as during the evaluation stage. It is not only an imagined threat to his liberty, but the respondent's due process right could have taken place; the NBI's findings were
a very imminent one. still subject to the prosecutor's and the Secretary of Justice's actions for purposes
of finding the existence of probable cause. We find it significant that the specimen
Because of these possible consequences, we conclude that the evaluation process signatures in the possession of Metrobank were submitted by the respondents for
is akin to an administrative agency conducting an investigative proceeding, the the consideration of the city prosecutor and eventually of the Secretary of Justice
consequences of which are essentially criminal since such technical assessment sets during the preliminary investigation proceedings. Thus, these officers had the
off or commences the procedure for, and ultimately, the deprivation of liberty of a opportunity to examine these signatures.
prospective extraditee, As described by petitioner himself, this is a "tool" for
criminal law enforcement. In essence, therefore, the evaluation process partakes The respondents were not likewise denied their right to due process when the NBI
of the nature of a criminal investigation. In a number of cases, we had occasion to issued the questioned documents report. We note that this report merely stated
make available to a respondent in an administrative case or investigation certain that the signatures appearing on the two deeds and in the petitioner's submitted
constitutional rights that are ordinarily available only in criminal prosecutions. sample signatures were not written by one and the same person. Notably, there
Further, as pointed out by Mr. Justice Mendoza during the oral arguments, there was no categorical finding in the questioned documents report that the respondents
are rights formerly available only at the trial stage that had been advanced to an falsified the documents. This report, too, was procured during the conduct of the
earlier stage in the proceedings, such as the right to counsel and the right against NBI's investigation at the petitioner's request for assistance in the investigation of
self-incrimination.24 (Citations omitted) the alleged crime of falsification. The report is inconclusive and does not prevent
the respondents from securing a separate documents examination by handwriting
In contrast to the disposition in Lantion that the evaluation process before the experts based on their own evidence. On its own, the NBI's questioned documents
Department of Foreign Affairs is akin to an administrative agency conducting report does not directly point to the respondents' involvement in the crime charged.
investigative proceedings with implications on the consequences of criminal Its significance is that, taken together with the other pieces of evidence submitted
liability, i.e., deprivation of liberty of a prospective extraditee, the sole investigative by the parties during the preliminary investigation, these evidence could be
functions of the AMLC finds more resonance with the investigative functions of the sufficient for purposes of finding probable cause — the action that the Secretary of
National Bureau of Investigation (NBI). Justice undertook in the present case.

That the AMLC does not exercise quasi-judicial powers and is simply an As carved out in Shu, the AMLC functions solely as an investigative body in the
investigatory body finds support in our ruling in Shu v. Dee.25 In that case, instances mentioned in Rule 5.b.26 Thereafter, the next step is for the AMLC to file
petitioner Shu had filed a complaint before the NBI charging respondents therein a Complaint with either the DOJ or the Ombudsman pursuant to Rule 6.b.
with falsification of two (2) deeds of real estate mortgage submitted to the
Metropolitan Bank and Trust Company (Metrobank). After its investigation, the NBI Even in the case of Estrada v. Office of the Ombudsman,27 where the conflict arose
came up with a Questioned Documents Report No. 746-1098 finding that the at the preliminary investigation stage by the Ombudsman, we ruled that the
signatures of petitioner therein which appear on the questioned deeds are not the Ombudsman's denial of Senator Estrada's Request to be furnished copies of the
same as the standard sample signatures he submitted to the NBI. Ruling on the counter-affidavits of his co-respondents did not violate Estrada's constitutional right
specific issue raised by respondent therein that they had been denied due process to due process where the sole issue is the existence of probable cause for the
purpose of determining whether an information should be filed and does not prevent
POLITICAL REV |Admin Law Assign 1|87

Estrada from requesting a copy of the counter-affidavits of his co-respondents Furthermore, the technical rules on evidence are not binding on the fiscal who has
during the pre-trial or even during trial. We expounded on the nature of preliminary jurisdiction and control over the conduct of a preliminary investigation. If by its
investigation proceedings, thus: very nature a preliminary investigation could be waived by the accused, we find no
compelling justification for a strict application of the evidentiary rules. In addition,
It should be underscored that the conduct of a preliminary investigation is only for considering that under Section 8, Rule 112 of the Rules of Court, the record of the
the determination of probable cause, and "probable cause merely implies preliminary investigation does not form part of the record of the case in the Regional
probability of guilt and should be determined in a summary manner. A preliminary Trial Court, then the testimonies of Galarion and Hanopol may not be admitted by
investigation is not a part of the trial and it is only in a trial where an accused can the trial court if not presented in evidence by the prosecuting fiscal. And, even if
demand the full exercise of his rights, such as the right to confront and cross- the prosecution does present such testimonies, petitioner can always object thereto
examine his accusers to establish his innocence." Thus, the rights of a respondent and the trial court can rule on the admissibility thereof; or the petitioner can, during
in a preliminary investigation are limited to those granted by procedural law. the trial, petition said court to compel the presentation of Galarion and Hanopol for
purposes of cross-examination. (Citations and emphasis omitted)
A preliminary investigation is defined as an inquiry or proceeding for the purpose
of determining whether there is sufficient ground to engender a well founded belief Plainly, the AMLC's investigation of money laundering offenses and its
that a crime cognizable by the Regional Trial Court has been committed and that determination of possible money laundering offenses, specifically its inquiry into
the respondent is probably guilty thereof, and should be held for trial. The quantum certain bank accounts allowed by court order, does not transform it into an
of evidence now required in preliminary investigation is such evidence sufficient to investigative body exercising quasi-judicial powers. Hence, Section 11 of the AMLA,
"engender a well founded belief' as to the fact of the commission of a crime and authorizing a bank inquiry court order, cannot be said to violate SPCMB's
the respondent's probable guilt thereof A preliminary investigation is not the constitutional right to procedural due process.
occasion for the full and exhaustive display of the parties' evidence; it is for the
presentation of such evidence only as may engender a well-grounded belief that an We now come to a determination of whether Section 11 is violative of the
offense has been committed and that the accused is probably guilty thereof. We constitutional right to privacy enshrined in Section 2, Article III of the Constitution.
are in accord with the state prosecutor's findings in the case at bar that there exists SPCMB is adamant that the CA's denial of its request to be furnished copies of
prima facie evidence of petitioner's involvement in the commission of the crime, it AMLC's ex-parte application for a bank inquiry order and all subsequent pleadings,
being sufficiently supported by the evidence presented and the facts obtaining documents and orders filed and issued in relation thereto, constitutes grave abuse
therein. of discretion where the purported blanket authority under Section 11: (1) partakes
of a general warrant intended to aid a mere fishing expedition; (2) violates the
Likewise devoid of cogency is petitioner's argument that the testimonies of Galarion attorney-client privilege; (3) is not preceded by predicate crime charging SPCMB of
and Hanopol are inadmissible as to him since he was not granted the opportunity a money laundering offense; and (4) is a form of political harassment [of SPCMB's]
of cross-examination. clientele.

It is a fundamental principle that the accused in a preliminary investigation has no We shall discuss these issues jointly since the assailed Section 11 incorporates by
right to cross-examine the witnesses which the complainant may present. Section reference that "[t]he authority to inquire into or examine the main and the related
3, Rule 112 of the Rules of Court expressly provides that the respondent shall only accounts shall comply with the requirements of Article III, Sections 2 and 3 of the
have the right to submit a counter-affidavit, to examine all other evidence 1987 Constitution." On this point, SPCMB asseverates that "there is nothing in the
submitted by the complainant and, where the fiscal sets a hearing to propound AMLA that allows or justifies the withholding of information and/or any court records
clarificatory questions to the parties or their witnesses, to be afforded an or proceedings pertaining to an examination of a bank account, especially if the
opportunity to be present but without the right to examine or cross-examine. Thus, court has already granted the authority to conduct the examination."
even if petitioner was not given the opportunity to cross-examine Galarion and
Hanopol at the time they were presented to testify during the separate trial of the The theme of playing off privacy rights and interest against that of the state's
case against Galarion and Roxas, he cannot assert any legal right to cross-examine interest in curbing money laundering offenses is recurring.28
them at the preliminary investigation precisely because such right was never
available to him. The admissibility or inadmissibility of said testimonies should be The invoked constitutional provisions read:
ventilated before the trial court during the trial proper and not in the preliminary
investigation.
POLITICAL REV |Admin Law Assign 1|88

SEC. 2. The right of the people to be secure in their persons, houses, papers, and instrumentalities, are hereby considered as of an absolutely confidential
effects against unreasonable searches and seizures of whatever nature and for any nature and may not be examined, inquired or looked into by any person,
purpose shall be inviolable, and no search warrant or warrant of arrest shall issue government official, bureau or office, except upon written permission of the
except upon probable cause to be determined personally by the judge after depositor, or in cases of impeachment, or upon order of a competent court in cases
examination under oath or affirmation of the complainant and the witnesses he of bribery or dereliction of duty of public officials, or in cases where the money
may produce, and particularly describing the place to be searched and the person deposited or invested is the subject matter of the litigation.
or things to be seized.
Because of the Bank Secrecy Act, the confidentiality of bank deposits remains a
SEC. 3. (1) The privacy of communication and correspondence shall be inviolable basic state policy in the Philippines. Subsequent laws, including the AMLA, may
except upon lawful order of the court, or when public policy or order requires have added exceptions to the Bank Secrecy Act, yet the secrecy of bank deposits
otherwise as prescribed by law. still lies as the general rule. It falls within the zones of privacy recognized by our
laws. The framers of the 1987 Constitution likewise recognized that bank accounts
(2) Any evidence obtained in violation of this or the preceding section shall be are not covered by either the right to information under Section 7, Article III or
inadmissible for any purpose in any proceeding. under the requirement of full public disclosure under Section 28, Article II. Unless
the Bank Secrecy Act is repealed or amended, the legal order is obliged to conserve
Once again, Eugenio29 offers guidance: the absolutely confidential nature of Philippine bank deposits.

The Court's construction of Section 11 of the AMLA is undoubtedly influenced by Any exception to the rule of absolute confidentiality must be specifically legislated.
right to privacy considerations. If sustained, petitioner's argument that a bank Section 2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank
account may be inspected by the government following an ex parte proceeding accounts may be examined by "any person, government official, bureau or office";
about which the depositor would know nothing would have significant implications namely when: (1) upon written permission of the depositor; (2) in cases of
on the right to privacy, a right innately cherished by all notwithstanding the legally impeachment; (3) the examination of bank accounts is upon order of a competent
recognized exceptions thereto. The notion that the government could be so court in cases of bribery or dereliction of duty of public officials; and (4) the money
empowered is cause for concern of any individual who values the right to privacy deposited or invested is the subject matter of the litigation. Section 8 of R.A. Act
which, after all, embodies even the right to be "let alone," the most comprehensive No. 3019, the Anti-Graft and Corrupt Practices Act, has been recognized by this
of rights and the right most valued by civilized people. Court as constituting an additional exception to the rule of absolute confidentiality,
and there have been other similar recognitions as well.
One might assume that the constitutional dimension of the right to privacy, as
applied to bank deposits, warrants our present inquiry. We decline to do so. The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the
Admittedly, that question has proved controversial in American AMLC may inquire into a bank account upon order of any competent court in cases
jurisprudence. Notably, the United States Supreme Court in U.S. v. of violation of the AMLA, it having been established that there is probable cause
Miller held that there was no legitimate expectation of privacy as to the that the deposits or investments are related to unlawful activities as defined in
bank records of a depositor. Moreover, the text of our Constitution has not Section 3(i) of the law, or a money laundering offense under Section 4 thereof.
bothered with the triviality of allocating specific rights peculiar to bank Further, in instances where there is probable cause that the deposits or investments
deposits. are related to kidnapping for ransom, certain violations of the Comprehensive
Dangerous Drugs Act of 2002, hijacking and other violations under R.A. No. 6235,
However, sufficient for our purposes, we can assert there is a right to privacy destructive arson and murder, then there is no need for the AMLC to obtain a court
governing bank accounts in the Philippines, and that such right finds application to order before it could inquire into such accounts.
the case at bar. The source of such right is statutory, expressed as it is in R.A. No.
1405 otherwise known as the Bank Secrecy Act of 1955. The right to privacy is It cannot be successfully argued the proceedings relating to the bank inquiry order
enshrined in Section 2 of that law, to wit: under Section 11 of the AMLA is a "litigation" encompassed in one of the exceptions
to the Bank Secrecy Act which is when "the money deposited or invested is the
SECTION 2. All deposits of whatever nature with banks or banking subject matter of the litigation." The orientation of the bank inquiry order is simply
institutions in the Philippines including investments in bonds issued by the to serve as a provisional relief or remedy. As earlier stated, the application for such
Government of the Philippines, its political subdivisions and its does not entail a full-blown trial.
POLITICAL REV |Admin Law Assign 1|89

Nevertheless, just because the AMLA establishes additional exceptions to the Bank (2) The CA, independent of the AMLC's demonstration of probable cause, itself
Secrecy Act it does not mean that the later law has dispensed with the general makes a finding of probable cause that the deposits or investments are related to
principle established in the older law that "[a]ll deposits of whatever nature with an unlawful activity under Section 3(i) or a money laundering offense under Section
banks or banking institutions in the Philippines x x x are hereby considered as of 4 of the AMLA;
an absolutely confidential nature." Indeed, by force of statute, all bank deposits are
absolutely confidential, and that nature is unaltered even by the legislated (3) A bank inquiry court order ex-parte for related accounts is preceded by a bank
exceptions referred to above. There is disfavor towards construing these exceptions inquiry court order ex-parte for the principal account which court order ex-parte for
in such a manner that would authorize unlimited discretion on the part of the related accounts is separately based on probable cause that such related account
government or of any party seeking to enforce those exceptions and inquire into is materially linked to the principal account inquired into; and
bank deposits. If there are doubts in upholding the absolutely confidential nature
of bank deposits against affirming the authority to inquire into such accounts, then (4) The authority to inquire into or examine the main or principal account and the
such doubts must be resolved in favor of the former. Such a stance would persist related accounts shall comply with the requirements of Article III, Sections 2 and 3
unless Congress passes a law reversing the general state policy of preserving the of the Constitution.
absolutely confidential nature of Philippine bank accounts. (Citations omitted,
emphasis supplied) The foregoing demonstrates that the inquiry and examination into the bank account
are not undertaken whimsically and solely based on the investigative discretion of
From the foregoing disquisition, we extract the following principles: the AMLC. In particular, the requirement of demonstration by the AMLC, and
determination by the CA, of probable cause emphasizes the limits of such
1. The Constitution did not allocate specific rights peculiar to bank deposits; governmental action. We will revert to these safeguards under Section 11 as we
specifically discuss the CA's denial of SPCMB's letter request for information
2. The general rule of absolute confidentiality is simply statutory,30i.e. not specified concerning the purported issuance of a bank inquiry order involving its accounts.
in the Constitution, which has been affirmed in jurisprudence;31
First. The AMLC and the appellate court are respectively required to demonstrate
3. Exceptions to the general rule of absolute confidentiality have been carved out and ascertain probable cause. Ret. Lt. Gen. Ligot, et al. v. Republic of the
by the Legislature which legislation have been sustained, albeit subjected to Philippines,33 which dealt with the adjunct provisional remedy of freeze order under
heightened scrutiny by the courts;32 and Section 10 of the AMLA, defined probable cause, thus:

4. One such legislated exception is Section 11 of the AMLA. The probable cause required for the issuance of a freeze order differs from the
probable cause required for the institution of a criminal action, xxx.
The warning in Eugenio that an ex-parte proceeding authorizing the government to
inspect certain bank accounts or investments without notice to the depositor would As defined in the law, the probable cause required for the issuance of a freeze order
have significant implications on the right to privacy still does not preclude such a refers to "such facts and circumstances which would lead a reasonably discreet,
bank inquiry order to be allowed by specific legislation as an exception to the prudent or cautious man to believe that an unlawful activity and/or money
general rule of absolute confidentiality of bank deposits. laundering offence is about to be, is being or has been committed and that the
account or any monetary instrument or property subject thereof sought to
We thus subjected Section 11 of the AMLA to heightened scrutiny and found nothing be frozen is in any way related to said unlawful activity and/or money
arbitrary in the allowance and authorization to AMLC to undertake an inquiry into laundering offense."
certain bank accounts or deposits. Instead, we found that it provides safeguards
before a bank inquiry order is issued, ensuring adherence to the general state policy In other words, in resolving the issue of whether probable cause exits, the CA's
of preserving the absolutely confidential nature of Philippine bank accounts: statutorily-guided determination's focus is not on the probable commissions of an
unlawful activity (or money laundering) that the office of the Ombudsman has
(1) The AMLC is required to establish probable cause as basis for its ex- already determined to exist, but on whether the bank accounts, assets, or other
parte application for bank inquiry order; monetary instruments sought to be frozen are in any way related to any of the
illegal activities enumerated under R.A. 9160, as amended. Otherwise stated,
probable cause refers to the sufficiency of the relation between an unlawful activity
POLITICAL REV |Admin Law Assign 1|90

and the property or monetary instrument which is the focal point of Section 10 of find that there is nothing therein which precludes the owner of the account from
RA No. 9160, as amended. xxx. (Emphasis supplied) challenging the basis for the issuance thereof.

Second. As regards SPCMB's contention that the bank inquiry order is in the nature The present controversy revolves around the issue of whether or not the appellate
of a general warrant, Eugenio already declared that Section 11, even with the court, through the Presiding Justice, gravely abused its discretion when it effectively
allowance of an ex parte application therefor, "is not a search warrant or warrant denied SPCMB's letter-request for confirmation that the AMLC had applied (ex-
of arrest as it contemplates a direct object but not the seizure of persons or parte) for, and was granted, a bank inquiry order to examine SPCMB's bank
property."34 It bears repeating that the ''bank inquiry order" under Section 11 is a accounts relative to the investigation conducted on Vice-President Binay's accounts.
provisional remedy to aid the AMLC in the enforcement of the AMLA.
We recall the Presiding Justice's letter to SPCMB categorically stating that "under
Third. Contrary to the stance of SPCMB, the bank inquiry order does not the rules, the Office of the Presiding Justice is strictly mandated not to disclose,
contemplate that SPCMB be first impleaded in a money laundering case already divulge, or communicate to anyone directly or indirectly, in any manner or by any
filed before the courts: means, the fact of the filing of the petition brought before [the Court of Appeals]
by the [AMLC], its contents and even its entry in the logbook." Note that the letter
We are unconvinced by this proposition, and agree instead with the then Solicitor did not cite the aforementioned rules that were supposedly crystal clear to foreclose
General who conceded that the use of the phrase "in cases of' was unfortunate, yet ambiguity. Note further that Rules 10.c.3 and 10.d of the IRR on Authority to File
submitted that it should be interpreted to mean "in the event there are violations" Petitions for Freeze Order provides that:
of the AMLA, and not that there are already cases pending in court concerning such
violations. If the contrary position is adopted, then the bank inquiry order would be Rule 10.c. Duty of Covered Institutions upon receipt thereof. —
limited in purpose as a tool in aid of litigation of live cases, and wholly inutile as a
means for the government to ascertain whether there is sufficient evidence to Rule 10.c.1. Upon receipt of the notice of the freeze order, the covered institution
sustain an intended prosecution of the account holder for violation of the AMLA. concerned shall immediately freeze the monetary instrument or property and
Should that be the situation, in all likelihood the AMLC would be virtually deprived related accounts subject thereof.
of its character as a discovery tool, and thus would become less circumspect in
filing complaints against suspect account holders. After all, under such set-up the Rule 10.c.2. The covered institution shall likewise immediately furnish a copy of
preferred strategy would be to allow or even encourage the indiscriminate filing of the notice of the freeze order upon the owner or holder of the monetary instrument
complaints under the AMLA with the hope or expectation that the evidence of or property or related accounts subject thereof.
money laundering would somehow .surface during the trial. Since the AMLC could
not make use of the bank inquiry order to determine whether there is evidentiary Rule 10.c.3. Within twenty-four (24) hours from receipt of the freeze order, the
basis to prosecute the suspected malefactors, not filing any case at all would not covered institution concerned shall submit to the Court of Appeals and the AMLC,
be an alternative. Such unwholesome set-up should not come to pass. Thus Section by personal delivery, a detailed written return on the freeze order, specifying all
11 cannot be interpreted in a way that would emasculate the remedy it has the pertinent and relevant information which shall include the following:
established and encourage the unfounded initiation of complaints for money
laundering.35 (Citation omitted) (a) the account numbers;
(b) the names of the account owners or holders;
Guided as we are by prior holdings, and bound as we are by the requirements for (c) the amount of the monetary instrument, property or related accounts as of
issuance of a bank inquiry order under Section 11 of the AMLA, we are hard pressed the time they were frozen;
to declare that it violates SPCMB's right to privacy. (d) all relevant information as to the nature of the monetary instrument or
property;
Nonetheless, although the bank inquiry order ex-parte passes constitutional (e) any information on the related accounts pertaining to the monetary
muster, there is nothing in Section 11 nor the implementing rules and regulations instrument or property subject of the freeze order; and
of the AMLA which prohibits the owner of the bank account, as in his instance (f) the time when the freeze thereon took effect.
SPCMB, to ascertain from the CA, post issuance of the bank inquiry order ex-parte,
if his account is indeed the subject of an examination. Emphasized by our discussion Rule 10.d. Upon receipt of the freeze order issued by the Court of Appeals and
of the safeguards under Section 11 preceding the issuance of such an order, we upon verification by the covered institution that the related accounts originated
POLITICAL REV |Admin Law Assign 1|91

from and/or are materially linked to the monetary instrument or property subject Undeniably, there is probable and preliminary governmental action against SPCMB
of the freeze order, the covered institution shall freeze these related accounts geared towards implementation of the AMLA directed at SPCMB's property,
wherever these may be found. although there is none, as yet, physical seizure thereof, as in freezing of bank
accounts under Section 10 of the AMLA.40 Note, however, that the allowance to
The return of the covered institution as required under Rule 10.c.3 shall include the question the bank inquiry order we carve herein is tied to the appellate court's
fact of such freezing and an explanation as to the grounds for the identification of issuance of a freeze order on the principal accounts. Even in Eugenio, while
the related accounts. declaring that the bank inquiry order under Section II then required prior notice of
such to the account owner, we recognized that the determination of probable cause
If the related accounts cannot be determined within twenty-four (24) hours from by the appellate court to issue the bank inquiry order can be contested. As presently
receipt of the freeze order due to the volume and/or complexity of the transactions worded and how AMLC functions are designed under the AMLA, the occasion for the
or any other justifiable factor(s), the covered institution shall effect the freezing of issuance of the freeze order upon the actual physical seizure of the investigated
the related accounts, monetary instruments and properties as soon as practicable and inquired into bank account, calls into motions the opportunity for the bank
and shall submit a supplemental return thereof to the Court of Appeals and the account owner to then question, not just probable cause for the issuance of the
AMLC within twenty-four (24) hours from the freezing of said related accounts, freeze order under Section I 0, but, to begin with, the determination of probable
monetary instruments and properties. cause for an ex-parte bank inquiry order into a purported related account under
Section II.
The foregoing rule, in relation to what Section 11 already provides, signifies that ex-
parte bank inquiry orders on related accounts may be questioned alongside, albeit In enacting the amendment to Section II of the AMLC, the legislature saw it fit to
subsequent to, the issuance of the initial freeze order of the subject bank accounts. place requirements before a bank inquiry order may be issued. We discussed these
The requirements and procedure for the issuance of the order, including the return requirements as basis for a valid exception to the general rule on absolute
to be made thereon lay the grounds for judicial review thereof. We expound. confidentiality of bank accounts. However, these very safe guards allow SPCMB,
post issuance of the ex-parte bank inquiry order, legal bases to question the
An act of a court or tribunal can only be considered tainted with grave abuse of propriety of such issued order, if any. To emphasize, this allowance to the owner
discretion when such act is done in a capricious or whimsical exercise of judgment of the bank account to question the bank inquiry order is granted only after issuance
as is equivalent to lack of jurisdiction. It is well-settled that the abuse of discretion of the freeze order physically seizing the subject bank account. It cannot be
to be qualified as "grave" must be so patent or gross as to constitute an evasion of undertaken prior to the issuance of the freeze order.
a positive duty or a virtual refusal to perform the duty or to act at all in
contemplation of law.36 In this relation, case law states that not every error in the While no grave abuse of discretion could be ascribed on the part of the appellate
proceedings, or every erroneous conclusion of law or fact, constitutes grave abuse court when it explained in its letter that petitions of such nature "is strictly
of discretion.37 The degree of gravity, as above-described, must be met. confidential in that when processing the same, not even the handling staff
members of the Office of the Presiding Justice know or have any knowledge who
That the propriety of the issuance of the bank inquiry order is a justiciable issue the subject bank account holders are, as well as the bank accounts involved," it
brooks no argument. A justiciable controversy refers to an existing case or was incorrect when it declared that "under the rules, the Office of the Presiding
controversy that is appropriate or ripe for judicial determination, not one that is Justice is strictly mandated not to disclose, divulge, or communicate to anyone
conjectural or merely anticipatory.38 directly or indirectly, in any manner or by any means, the fact of the filing of any
petition brought before [the Court of Appeals] by the Anti-Money Laundering
As previously adverted to in our discussion on the right to privacy, the clash of Council, its contents and even its entry in the logbook." As a result, the appellate
privacy rights and interest against that of the government's is readily apparent. court effectively precluded and prevented SPCMB of any recourse, amounting to a
However, the statutorily enshrined general rule on absolute confidentiality of bank denial of SPCMB's letter request.
accounts remains. Thus, the safeguards instituted in Section II of the AMLA and
heretofore discussed provide for certain well defined limits, as in the language We cannot overemphasize that SPCMB, as the owner of the bank account which
of Baker v. Carr, "judicially discoverable standards" for determining the validity of may be the subject of inquiry of the AMLC, ought to have a legal remedy to question
the exercise of such discretion by the appellate court in denying the letter-request the validity and propriety of such an order by the appellate court under Section 11
of SPCMB.39 In short, Section II itself provides the basis for the judicial inquiry and of the AMLA even if subsequent to the issuance of a freeze order. Moreover, given
which the owner of the bank accounts subject of the AMLC inquiry may invoke. the scope of inquiry of the AMLC, reaching and including even related accounts,
POLITICAL REV |Admin Law Assign 1|92

which inquiry into specifies a proviso that: "[t]hat the procedure for the ex- or, say, P1,000.00 worth of tax liability, and because of this the deposit of this
parte application of the ex-parte court order for the principal account shall be the individual [has been] attached by the [BIR].
same with that of the related accounts," SPCMB should be allowed to question the
government intrusion. Plainly, by implication, SPCMB can demonstrate the absence Mr. Ramos: The attachment will only apply after the court has pronounced sentence
of probable cause, i.e. that it is not a related account nor are its accounts materially declaring the liability of such person. But where the primary aim is to determine
linked to the principal account being investigated.41 whether he has a bank deposit in order to bring about a proper assessment by the
[BIR], such inquiry is not allowed by this proposed law.
In BSB Group, Inc. v. Go,42 we recounted the objective of the absolute
confidentiality rule which is protection from unwarranted inquiry or investigation if Mr. Marcos: But under our rules of procedure and under the Civil Code, the
the purpose of such inquiry or investigation is merely to determine the existence attachment or garnishment of money deposited is allowed. Let us assume for
and nature, as well as the amount of the deposit in any given bank account: instance that there is a preliminary attachment which is for garnishment or for
holding liable all moneys deposited belonging to a certain individual, but such
xxx. There is, in fact, much disfavor to construing these primary and supplemental attachment or garnishment will bring out into the open the value of such deposit.
exceptions in a manner that would authorize unbridled discretion, whether Is that prohibited by... the law?
governmental or otherwise, in utilizing these exceptions as authority for
unwarranted inquiry into bank accounts. It is then perceivable that the present Mr. Ramos: It is only prohibited to the extent that the inquiry... is made only for
legal order is obliged to conserve the absolutely confidential nature of bank the purpose of satisfying a tax liability already declared for the protection of the
deposits. right in favor of the government; but when the object is merely to inquire whether
he has a deposit or not for purposes of taxation, then this is fully covered by the
The measure of protection afforded by the law has been explained in China Banking law. x x x
Corporation v. Ortega. That case principally addressed the issue of whether the
prohibition against an examination of bank deposits precludes garnishment in Mr. Marcos: The law prohibits a mere investigation into the existence and the
satisfaction of a judgment. Ruling on that issue in the negative, the Court found amount of the deposit.
guidance in the relevant portions of the legislative deliberations on Senate Bill No.
351 and House Bill No. 3977, which later became the Bank Secrecy Act, and it held Mr. Ramos: Into the very nature of such deposit. x x x (Citations omitted)
that the absolute confidentiality rule in R.A. No. 1405 actually aims at protection
from unwarranted inquiry or investigation if the purpose of such inquiry or What is reflected by the foregoing disquisition is that the law plainly prohibits a
investigation is merely to determine the existence and nature, as well as the mere investigation into the existence and the amount of the deposit. We relate the
amount of the deposit in any given bank account. Thus, principle to SPCMB's relationship to the reported principal account under
investigation, one of its clients, former Vice President Binay. SPCMB as the owner
x x x The lower court did not order an examination of or inquiry into the deposit of of one of the bank accounts reported to be investigated by the AMLC for probable
B&B Forest Development Corporation, as contemplated in the law. It merely money laundering offenses should be allowed to pursue remedies therefrom where
required Tan Kim Liong to inform the court whether or not the defendant B&B Forest there are legal implications on the inquiry into its accounts as a law firm. While we
Development Corporation had a deposit in the China Banking Corporation only for do not lapse into conjecture and cannot take up the lance for SPCMB on probable
purposes of the garnishment issued by it, so that the bank would hold the same violation of the attorney-client privilege based on pure speculation, the extent of
intact and not allow any withdrawal until further order. It will be noted from the information obtained by the AMLC concerning the clients of SPCMB has not been
discussion of the conference committee report on Senate Bill No. 351 and House fully drawn and sufficiently demonstrated. At the same time, the owner of bank
Bill No. 3977 which later became Republic Act No. 1405, that it was not the intention accounts that could be potentially affected has the right to challenge whether the
of the lawmakers to place banks deposits beyond the reach of execution to satisfy requirements for issuance of the bank inquiry order were indeed complied with
a final judgment Thus: given that such has implications on its property rights. In this regard, SPCMB's
obeisance to promulgated rules on the matter could have afforded it a remedy,
x x x Mr. Marcos: Now, for purposes of the record, I should like the Chairman of even post issuance of the bank inquiry order.
the Committee on Ways and Means to clarify this further. Suppose an individual
has a tax case. He is being held liable by the Bureau of Internal Revenue [(BIR)] Rule 10.b. of the IRR defines probable cause as "such facts and circumstances
which would lead a reasonably discreet, prudent or cautious man to believe that an
POLITICAL REV |Admin Law Assign 1|93

unlawful activity and/or a money laundering offense is about to be, is being or has SEC. 54. Notice of freeze order.- The Court shall order that notice of the freeze
been committed and that the account or any monetary instrument or property order be served personally, in the same manner provided for the service of the
sought to be frozen is in any way related to said unlawful activity and/or money asset preservation order in Section 14 of this Rule, upon the respondent or any
laundering offense." Evidently, the provision only refers to probable cause for freeze person acting in his behalf and such covered institution or government agency. The
orders under Section 10 of the AMLA. From this we note that there is a court shall notify also such party in interest as may have appeared before
glaring lacunae in our procedural rules concerning the bank inquiry order under the court. (Emphasis supplied)
Section 11. Despite the advent of RA No. 10167, amending Section 11 of the AMLA,
we have yet to draft additional rules corresponding to the ex-parte bank inquiry We relate this Section 54 to the already cited Rule 10.d of the IRR
order under Section 11. A.M. No. 05-11-04-SC entitled "Rule of Procedure in Cases
of Civil Forfeiture, Asset Preservation, and Freezing of Monetary Instrument, Rule 10.d. Upon receipt of the freeze order issued by the Court of Appeals and
Property, or Proceeds Representing, Involving, or Relating to an Unlawful Activity upon verification by the covered institution that the related accounts originated
or Money Laundering Offense Under Republic Act No. 9160, as Amended," only from and/or are materially linked to the monetary instrument or property subject
covers what is already provided in the title. As we have already noted, the bank of the freeze order, the covered institution shall freeze these related accounts
inquiry order must likewise be governed by rules specific to its issuance where the wherever these may be found.
AMLC regularly invokes this provision and which, expectedly clashes with the rights
of bank account holders. The return of the covered institution as required under Rule 10.c.3 shall
include the fact of such freezing and an explanation as to the grounds for
Apart from Section 2, Rule IV of the 2009 Internal Rules of the CA (IRCA) reads: the identification of the related accounts.

SEC. 2. Action by the Presiding Justice or Executive Justice. — When a If the related accounts cannot be determined within twenty-four (24)
petition involves an urgent matter, such as an application for writ of habeas hours from receipt of the freeze order due to the volume and/or complexity
corpus, amparo or habeas data or for temporary restraining order, and there is of the transactions or any other justifiable factor(s), the covered
no way of convening the Raffle Committee or calling any of its members, the institution shall effect the freezing of the related accounts, monetary
Presiding Justice or the Executive Justice, as the case may be, or in his/her absence, instruments and properties as soon as practicable and shall submit a
the most senior Justice present, may conduct the raffle or act on the petition, supplemental return thereof to the Court of Appeals and the AMLC within
subject to raffle in the latter case on the next working day in accordance with Rule twenty-four (24) hours from the freezing of said related accounts,
III hereof. monetary instruments and properties. (Emphasis supplied)

(AMLA cases are limited to the first three most senior Justices as stated in demonstrating that the return of the Freeze Order must provide an explanation as
the law and are raffled by the Chairmen of the First, Second and Third to the grounds for the identification of the related accounts, or the requirement of
Divisions to the members of their Divisions only.) notice to a party in interest affected thereby whose bank accounts were examined.
This necessarily contemplates the procedure for a prior bank inquiry order which
Nothing in the IRCA justifies the disallowance to SPCMB of information and/or court we ought to provide for.
records or proceedings pertaining to the possible bank inquiry order covering its
bank deposits or investment. For exact reference, we cite A.M. No. 05-11-04-SC, Title VIII on Petitions for Freeze
Order in the CA which certain pertinent provisions we adopt and apply suppletorily
We note that the Presiding Justice's reply to the request for comment of SPCMB on as a separate Title on Petitions for Bank Inquiry Order:
the existence of a petition for bank inquiry order by the AMLC covering the latter's
account only contemplates the provisions of Section 10 of the AMLA, its IRR and TITLE VIII
the promulgated rules thereon. Such immediate and definitive foreclosure left PETITIONS FOR FREEZE ORDER IN THE COURT OF APPEALS
SPCMB with no recourse on how to proceed from what it perceived to be violation
of its rights as owner of the bank account examined. The reply of the Presiding SEC. 43. Applicability. - This Rule shall apply to petitions for freeze order in the
Justice failed to take into consideration Section 54 of A.M. No. 05-11-04-SC on Court of Appeals. The 2002 Internal Rules of the Court of Appeals, as amended,
Notice of Freeze Order which reads: shall apply suppletorily in all other aspects.
POLITICAL REV |Admin Law Assign 1|94

xxxx If the Court is satisfied from the verified allegations of the petition that there exists
probable cause that the monetary instrument, property, or proceeds are in any way
SEC. 46. Contents of the petition. - The petition shall contain the following related to or involved in any unlawful activity as defined in Section 3(i) of Republic
allegations: Act No. 9160, as amended by Republic Act No. 9194, it shall issue ex parte a freeze
order as hereinafter provided.

(a) The name and address of the respondent;


If the Court finds no substantial merit in the petition, it shall dismiss the petition
outright, stating the specific reasons for such dismissal.

(b) A specific description with particularity of the monetary instrument,


When the unanimous vote of the three justices of the Division cannot be obtained,
property or proceeds, their location, the name of the owner, holder,
the Presiding Justice or the Executive Justice shall designate two justices by raffle
lienholder or possessor, if known;
from among the other justices of the first three divisions to sit temporarily with
them forming a special division of five justices. The concurrence of a majority of
such special division shall be required for the pronouncement of a judgment or
(c) The grounds relied upon for the issuance of a freeze order; and
resolution.

SEC. 52. Issuance, form and contents of the freeze order - The freeze order shall:
(d) The supporting evidence showing that the subject monetary instrument,
property, or proceeds are in any way related to or involved in an unlawful
activity as defined under Section 3(i) of Republic Act No. 9160, as (a) issue in the name of the Republic of the Philippines represented by the
amended by Republic Act No. 9194. Anti-Money Laundering Council;
The petition shall be filed in seven clearly legible copies and shall be
accompanied by clearly legible copies of supporting documents duly
subscribed under oath. (b) describe with particularity the monetary instrument, property or proceeds
frozen, as well as the names of their owner or owners; and

xxxx
(c) direct the person or covered institution to immediately freeze the subject
SEC. 49. Confidentiality; prohibited disclosure. - The logbook and the entries
monetary instrument, property or proceeds or its related web of accounts.
therein shall be kept strictly confidential and maintained under the responsibility of
the Presiding Justice or the Executive Justices, as the case may be. No person,
including Court personnel, shall disclose, divulge or communicate to anyone directly SEC. 53. Freeze order.
or indirectly, in any manner or by any means, the fact of the filing of the petition
for freeze order, its contents and its entry in the logbook except to those authorized
by the Court. Violation shall constitute contempt of court. (a) Effectivity; post issuance hearing. - The freeze order shall be effective
immediately for a period of twenty days. Within the twenty-day period,
xxxx the court shall conduct a summary hearing, with notice to the parties, to
determine whether or not to modify or lift the freeze order, or extend its
SEC. 51. Action by the Court of Appeals.- All members of the Division of the Court effectivity as hereinafter provided.
to which the assigned justice belongs shall act on the petition within twenty-four
hours after its filing. However, if one member of the Division is not available, the
(b) Extension. - On motion of the petitioner filed before the expiration of
assigned justice and the other justice present shall act on the petition. If only the
twenty days from issuance of a freeze order, the court may for good cause
assigned justice is present, he shall act alone. The action of the two justices or of
extend its effectivity for a period not exceeding six months.
the assigned justice alone, as the case may be, shall be forthwith promulgated and
thereafter submitted on the next working day to the absent member or members
of the Division for ratification, modification or recall.
POLITICAL REV |Admin Law Assign 1|95

SEC. 54. Notice of freeze order.- The Court shall order that notice of the freeze accounts, of course after the issuance of the Freeze Order. Even in Ligot,43 we held
order be served personally, in the same manner provided for the service of the that by implication, where the law did not specify, the owner of the "frozen"
asset preservation order in Section 14 of this Rule, upon the respondent or any property may move to lift the freeze order issued under Section 10 of the AMLA if
person acting in his behalf and such covered institution or government agency. The he can show that no probable cause exists or the 20-day period of the freeze order
court shall notify also such party in interest as may have appeared before the court. has already lapsed without any extension being requested from and granted by the
CA. Drawing a parallel, such a showing of the absence of probable cause ought to
SEC. 55. Duty of respondent, covered institution or government agency upon be afforded SPCMB.
receipt of freeze order. - Upon receipt of a copy of the freeze order, the respondent,
covered institution or government agency shall immediately desist from and not Ligot clarifies that "probable cause refers to the sufficiency of the relation between
allow any transaction, withdrawal, deposit, transfer, removal, conversion, other an unlawful activity and the property or monetary instrument which is the focal
movement or concealment the account representing, involving or relating to the point of Section 10 of the AMLA, as amended." This same probable cause is likewise
subject monetary instrument, property, proceeds or its related web of accounts. the focal point in a bank inquiry order to further determine whether the account
under investigation is linked to unlawful activities and/or money laundering offense.
SEC. 56. Consolidation with the pending civil forfeiture proceedings - After the post- Thus, the specific applicability of Sections 52, 53, 54 and 57 Title VIII of A.M. No.
issuance hearing required in Section 53, the Court shall forthwith remand the case 05-11-04-SC covering the following: (1) Issuance, Form and Content of the Freeze
and transmit the records to the regional trial court for consolidation with the Order; (2) Effectivity of the Freeze Order and Post Issuance Hearing thereon; (3)
pending civil forfeiture proceeding. Notice of the Freeze Order; and (4) Appeal from the Freeze Order as separate Rules
for Petitions to Question the Bank Inquiry Order. And as held in Eugenio which now
SEC. 57. Appeal.- Any party aggrieved by the decision or ruling of the court may applies to the present Section 11 of the AMLA:
appeal to the Supreme Court by petition for review on certiorari under Rule 45 of
the Rules of Court. The appeal shall not stay the enforcement of the subject decision Although oriented towards different purposes, the freeze order under Section 10
or final order unless the Supreme Court directs otherwise. and the bank inquiry order under Section 11 are similar in that they are
extraordinary provisional reliefs which the AMLC may avail of to effectively combat
A reverse situation affords us a clearer picture of the arbitrary and total preclusion and prosecute money laundering offenses. Crucially, Section 10 uses specific
of SPCMB to question the bank inquiry order of the appellate court. In particular, language to authorize an ex parte application for the provisional relief therein, a
in an occasion where the appellate court denies the AMLC's ex-parte application for circumstance absent in Section 11. xxx.44
a bank inquiry order under Section 11, the AMLC can question this denial and assail
such an order by the appellate court before us on grave abuse of discretion. Among The cited rules cover and approximate the distinction made by Eugenio in declaring
others, the AMLC can demonstrate that it has established probable cause for its that the bank inquiry order is not a search warrant, and yet there are instituted
issuance, or if the situation contemplates a denial of an application for a bank requirements for the issuance of these orders given that such is now allowed ex-
inquiry order into a related account, the AMLC can establish that the account parte:
targeted is indeed a related account. The resolution on these factual and legal
issues ought to be reviewable, albeit post issuance of the Freeze Order, akin to the The Constitution and the Rules of Court prescribe particular requirements attaching
provision of an Appeal to the Supreme Court under Section 57 of A.M. No. 05-11- to search warrants that are not imposed by the AMLA with respect to bank inquiry
04-SC. orders. A constitutional warrant requires that the judge personally examine under
oath or affirmation the complainant and the witnesses he may produce, such
Palpably, the requirement to establish probable cause is not a useless supposition. examination being in the form of searching questions and answers. Those are
To establish and demonstrate the required probable cause before issuance of the impositions which the legislative did not specifically prescribe as to the bank inquiry
bank inquiry and the freeze orders is a screw on which the AMLC's intrusive order under the AMLA and we cannot find sufficient legal basis to apply them to
functions turns. We are hard pressed to justify a disallowance to an aggrieved Section 11 of the AMLA. Simply put, a bank inquiry order is not a search warrant
owner of a bank account to avail of remedies. or warrant of arrest as it contemplates a direct object but not the seizure of persons
or property.
That there are no specific rules governing the bank inquiry order does not signify
that the CA cannot confirm to the actual owner of the bank account reportedly being Even as the Constitution and the Rules of Court impose a high procedural standard
investigated whether it had in fact issued a bank inquiry order for covering its for the determination of probable cause for the issuance of search warrants which
POLITICAL REV |Admin Law Assign 1|96

Congress chose not to prescribe for the bank inquiry order under the AMLA, All told, we affirm the constitutionality of Section 11 of the AMLA allowing the ex-
Congress nonetheless disallowed ex parte applications for the inquiry order. We can parte application by the AMLC for authority to inquire into, and examine, certain
discern that in exchange for these procedural standards normally applied to search bank deposits and investments.
warrants, Congress chose instead to legislate a right to notice and a right to be
heard — characteristics of judicial proceedings which are not ex parte. Absent any Section 11 of the AMLA providing for the ex-parte bank deposit inquiry is
demonstrable constitutional infirmity, there is no reason for us to dispute such constitutionally firm for the reasons already discussed. The ex-parte inquiry shall
legislative policy choices.45 be upon probable cause that the deposits or investments are related to an unlawful
activity as defined in Section 3(i) of the law or a money laundering offense under
Thus, as an ex-parte bank inquiry order which Congress has now specifically Section 4 of the same law. To effect the limit on the ex-parte inquiry, the petition
allowed, the owner of a bank account post issuance of the freeze order has an under oath for authority to inquire, must, akin to the requirement of a petition for
opportunity under the Rules to contest the establishment of probable cause. freeze order enumerated in Title VIII of A.M. No. 05-11-04-SC, contain the name
and address of the respondent; the grounds relied upon for the issuance of the
Again, we cannot avoid the requirement-limitation nexus in Section 11. As it affords order of inquiry; and the supporting evidence that the subject bank deposit are in
the government authority to pursue a legitimate state interest to investigate money any way related to or involved in an unlawful activity.
laundering offenses, such likewise provides the limits for the authority given.
Moreover, allowance to the owner of the bank account, post issuance of the bank If the CA finds no substantial merit in the petition, it shall dismiss the petition
inquiry order and the corresponding freeze order, of remedies to question the order, outright stating the specific reasons for such denial. If found meritorious and there
will not forestall and waylay the government's pursuit of money launderers. That is a subsequent petition for freeze order, the proceedings shall be governed by the
the bank inquiry order is a separate from the freeze order does not denote that it existing Rules on Petitions for Freeze Order in the CA. From the issuance of a freeze
cannot be questioned. The opportunity is still rife for the owner of a bank account order, the party aggrieved by the ruling of the court may appeal to the Supreme
to question the basis for its very inclusion into the investigation and the Court by petition for review on certiorari under Rule 45 of the Rules of Court raising
corresponding freezing of its account in the process. all pertinent questions of law and issues, including the propriety of the issuance of
a bank inquiry order. The appeal shall not stay the enforcement of the subject
As noted in Eugenio, such an allowance accorded the account holder who wants to decision or final order unless the Supreme Court directs otherwise. The CA is
contest the issuance of the order and the actual investigation by the AMLC, does directed to draft rules based on the foregoing discussions to complement the
not cast an unreasonable burden since the bank inquiry order has already been existing A.M. No. 05-11-04-SC Rule of Procedure in Cases of Civil Forfeiture, Asset
issued. Further, allowing for notice to the account holder should not, in any way, Preservation, and Freezing of Monetary Instrument, Property, or Proceeds
compromise the integrity of the bank records subject of the inquiry which remain Representing, Involving, or Relating to an Unlawful Activity or Money Laundering
in the possession and control of the bank. The account holder so notified remains Offense under Republic Act No. 9160, as Amended for submission to the Committee
unable to do anything to conceal or cleanse his bank account records of suspicious on the Revision of the Rules of Court and eventual approval and promulgation of
or anomalous transactions, at least not without the whole hearted cooperation of the Court en banc.
the bank, which inherently has no vested interest to aid the account holder in such
manner. Rule 10.c.46 of the IRR provides for Duty of the Covered Institution WHEREFORE, the petition is DENIED. Section 11 of Republic Act No. 9160, as
receiving the Freeze Order. Such can likewise be made applicable to covered amended, is declared VALID and CONSTITUTIONAL.
institutions notified of a bank inquiry order.
SO ORDERED.
On the other hand, a scenario where SPCMB or any account holder under
examination later shows that the bank inquiry order was without the required
probable cause, the information obtained through the account reverts to, and
maintains, its confidentiality. In short, any and all information obtained therein by
the AMLC remains confidential, as if no examination or inquiry on the bank account
or investments was undertaken. The foregoing consequence can be added as a
Section in the Rules entitled "Effect of absence of probable cause."

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