Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 101279 August 6, 1992

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,

vs.
HON. RUBEN D. TORRES, as Secretary of the Department of Labor & Employment, and JOSE N. SARMIENTO, as
Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, respondents.

De Guzman, Meneses & Associates for petitioner.

GRIÑO-AQUINO, J.:

This petition for prohibition with temporary restraining order was filed by the Philippine Association of Service Exporters (PASEI, for
short), to prohibit and enjoin the Secretary of the Department of Labor and Employment (DOLE) and the Administrator of the Philippine
Overseas Employment Administration (or POEA) from enforcing and implementing DOLE Department Order No. 16, Series of 1991 and
POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, temporarily suspending the recruitment by private employment agencies
of Filipino domestic helpers for Hong Kong and vesting in the DOLE, through the facilities of the POEA, the task of processing and
deploying such workers.

PASEI is the largest national organization of private employment and recruitment agencies duly licensed and authorized by the POEA,
to engaged in the business of obtaining overseas employment for Filipino landbased workers, including domestic helpers.

On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids employed in Hong Kong, DOLE
Secretary Ruben D. Torres issued Department Order No. 16, Series of 1991, temporarily suspending the 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 business of deploying such Hong Kong-bound workers.

In view of the need to establish mechanisms that will enhance the protection for Filipino domestic helpers going to
Hong Kong, the recruitment of the same by private employment agencies is hereby temporarily suspended effective 1
July 1991. As such, the DOLE through the facilities of the Philippine Overseas Employment Administration shall take
over the processing and deployment of household workers bound for Hong Kong, subject to guidelines to be issued
for said purpose.

In support of this policy, all DOLE Regional Directors and the Bureau of Local Employment's regional offices are
likewise directed to coordinate with the POEA in maintaining a manpower pool of prospective domestic helpers to
Hong Kong on a regional basis.

For compliance. (Emphasis ours; p. 30, Rollo.)

Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 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 accreditation of Hong
Kong recruitment agencies intending to hire Filipino domestic helpers.

Subject: Guidelines on the Temporary Government Processing and Deployment of Domestic Helpers to Hong Kong.

Pursuant to Department Order No. 16, series of 1991 and in order to operationalize the temporary government
processing and deployment of domestic helpers (DHs) to Hong Kong resulting from the temporary suspension of
recruitment by private employment agencies for said skill and host market, the following guidelines and mechanisms
shall govern the implementation of said policy.

I. Creation of a joint POEA-OWWA Household Workers Placement Unit (HWPU)

An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the supervision of the POEA shall take
charge of the various operations involved in the Hong Kong-DH industry segment:
 The HWPU shall have the following functions in coordination with appropriate units and other entities concerned:

1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies

2. Manpower Pooling

3. Worker Training and Briefing

4. Processing and Deployment

5. Welfare Programs

II. Documentary Requirements and Other Conditions for Accreditation of Hong Kong Recruitment Agencies or
Principals

Recruitment agencies in Hong Kong intending to hire Filipino DHs for their employers may negotiate with the HWPU
in Manila directly or through the Philippine Labor Attache's Office in Hong Kong.

xxx xxx xxx

X. Interim Arrangement

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 Philippine agencies concerned. Thereafter, all contracts shall be processed with the HWPU.

Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General in Hong kong a list of their
accepted applicants 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 contracts for processing. After the exhaustion of their respective pools the
only source of applicants will be the POEA manpower pool.

For strict compliance of all concerned. (pp. 31-35, Rollo.)

On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37, Series of 1991, on the processing of
employment contracts of domestic workers for Hong Kong.

TO: All Philippine and Hong Kong Agencies engaged in the recruitment of Domestic helpers for Hong Kong

Further to Memorandum Circular No. 30, series of 1991 pertaining to the government processing and deployment of
domestic helpers (DHs) to Hong Kong, processing of employment contracts which have been attested by the Hong
Kong Commissioner of Labor up to 30 June 1991 shall be processed by the POEA Employment Contracts
Processing Branch up to 15 August 1991 only.

Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from the Philippines shall recruit under the
new scheme which requires prior accreditation which the POEA.

Recruitment agencies in Hong Kong may apply for accreditation at the Office of the Labor Attache, Philippine
Consulate General where a POEA team is posted until 31 August 1991. Thereafter, those who failed to have
themselves accredited in Hong Kong may proceed to the POEA-OWWA Household Workers Placement Unit in
Manila for accreditation before their recruitment and processing of DHs shall be allowed.

Recruitment agencies in Hong Kong who have some accepted applicants in their pool after the cut-off period shall
submit this list of workers upon accreditation. Only those DHs in said list will be allowed processing outside of the
HWPU manpower pool.

For strict compliance of all concerned. (Emphasis supplied, p. 36, Rollo.)

On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the aforementioned DOLE and POEA circulars
and to prohibit their implementation for the following reasons:

1. that the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in issuing
said circulars;
 2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair and
oppressive; and

3. that the requirements of publication and filing with the Office of the National Administrative Register were not
complied with.

There is no merit in the first and second grounds of the petition.

Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and placement activities.

Art. 36. Regulatory Power. — The Secretary of Labor shall have the power to restrict and regulate the recruitment
and placement activities of all agencies within the coverage of this title [Regulation of Recruitment and Placement
Activities] and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives
and implement the provisions of this title. (Emphasis ours.)

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 the Overseas Employment Development Board, the National Seamen Board, and the overseas
employment functions of the Bureau of Employment Services, is broad and far-ranging for:

1. Among the functions inherited by the POEA from the defunct Bureau of Employment Services was the power and
duty:

"2. To establish and maintain a registration and/or licensing system to regulate private sector
participation in the recruitment and placement of workers, locally and overseas, . . ." (Art. 15, Labor
Code, Emphasis supplied). (p. 13, Rollo.)

2. It assumed from the defunct Overseas Employment Development Board the power and duty:

3. To recruit and place workers for overseas employment of Filipino contract workers on a
government to government arrangement and in such other sectors as policy may dictate . . . (Art.
17, Labor Code.) (p. 13, Rollo.)

3. From the National Seamen Board, the POEA took over:

2. To regulate and supervise the activities of agents or representatives of shipping companies in

the hiring of seamen for overseas employment; and secure the best possible terms of employment
for contract seamen workers and secure compliance therewith. (Art. 20, Labor Code.)

The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and oppressive.
It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More
and more administrative bodies are necessary to help in the regulation of society's ramified activities. "Specialized in the particular field
assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature
or the courts of justice" (Ibid.).

It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of Filipino
landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the same fall
within the "administrative and policing powers expressly 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 Labor Code involves a grant of police power
(City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas the power to
"regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the
public, then of the utility and of its patrons" (Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218).

The Solicitor General, in his Comment, aptly observed:

. . . Said Administrative Order [i.e., DOLE Administrative Order No. 16] merely restricted the scope or area of
petitioner's business operations by excluding therefrom recruitment and deployment of domestic helpers for Hong
Kong till after the establishment of the "mechanisms" that will enhance the protection of Filipino domestic helpers
going to Hong Kong. In fine, other than the recruitment and deployment of Filipino domestic helpers for Hongkong,
petitioner may still deploy other class of Filipino workers either for Hongkong and other countries and all other classes
of Filipino workers for other countries.

Said administrative issuances, intended to curtail, if not to end, rampant violations of the rule against excessive
collections of placement and documentation fees, travel fees and other charges committed by private employment
 agencies recruiting and deploying domestic helpers to Hongkong. [They are reasonable, valid and justified under the
general welfare clause of the Constitution, since the recruitment and deployment business, as it is conducted today,
is affected with public interest.

xxx xxx xxx

The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is merely a
remedial measure, and expires after its purpose shall have been attained. This is evident from the tenor of
Administrative Order No. 16 that recruitment of Filipino domestic helpers going to Hongkong by private employment
agencies are hereby "temporarily suspended effective July 1, 1991."

The alleged takeover is limited in scope, being confined to recruitment of domestic helpers going to Hongkong only.

xxx xxx xxx

. . . the justification for the takeover of the processing and deploying of domestic helpers for Hongkong resulting from
the restriction of the scope of petitioner's business is confined solely to the unscrupulous practice of private
employment agencies victimizing applicants for employment as domestic helpers for Hongkong and not the whole
recruitment business in the Philippines. (pp. 62-65, Rollo.)

The questioned circulars are therefore a valid exercise of the police power as delegated to the executive branch of Government.

Nevertheless, they are legally invalid, defective and unenforceable for lack of power publication and filing in the Office of the National
Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book
VII of the Administrative Code of 1987 which provide:

Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the Official Gazatte,
unless it is otherwise provided. . . . (Civil Code.)

Art. 5. Rules and Regulations. — The Department of Labor and other government agencies charged with the
administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules
and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their
adoption in newspapers of general circulation. (Emphasis supplied, Labor Code, as amended.)

Sec. 3. Filing. — (1) Every agency shall file with the University of the Philippines Law Center, three (3) certified
copies of every rule 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:

. . . Administrative rules and regulations must also be published if their purpose is to enforce or implement existing
law pursuant also to a valid delegation. (p. 447.)

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the
administrative agency and not the public, need not be published. Neither is publication required of the so-called
letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties. (p. 448.)

We agree that publication must be in full or it is no publication at all since its purpose is to inform the public of the
content of the laws. (p. 448.)

For lack of proper publication, the administrative circulars in question may not be enforced and implemented.
WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order No. 16, Series of 1991, and POEA
Memorandum Circulars Nos. 30 and 37, Series of 1991, by the public respondents is hereby SUSPENDED pending compliance with
the statutory requirements of publication and filing under the aforementioned laws of the land.

SO ORDERED.

Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Medialdea, Regalado, Davide, Jr., Romero, Nocon and Bellosillo, JJ.,
concur.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 113219 August 14, 1995

ANICETO G. MATEO, MAXIMO SAN DIEGO, QUIRINO MATEO, DANIEL FRANCISCO, and LEONILA KUIZON, petitioners,
vs.
HONORABLE COURT OF APPEALS, HON. ARTURO A. MARAVE, and EDGAR STA. MARIA, respondents.

PUNO, J.:

Upon complaint of some Morong Water District (MOWAD) employees, petitioners, all Board Members of MOWAD, conducted an
investigation on private respondent Edgar Sta. Maria, then General Manager.1 On December 13, 1992, private respondent was placed
under preventive suspension and Maximo San Diego was designated in his place as Acting General Manager. He was later dismissed
on January 7, 1993.

On January 18, 1993, private respondent filed a Special Civil Action for Quo Warranto and Mandamus with Preliminary
Injunction2 before the Regional Trial Court of Rizal, Branch 78, challenging his dismissal by petitioners. The petition embodied three (3)
causes of action. It reads:

xxx xxx xxx

FIRST CAUSE OF ACTION

xxx xxx xxx

II-2 Petitioner is the General Manager of the MOWAD since August 1984 with concomitant security of tenure in office and
could not be removed either temporarily or permanently, except for cause and only after compliance with the elementary rules
of due process;

II-3 However, on December 14, 1992, contrary to the tenets of justice and fairness, as well as for want of procedural due
process, the respondents (petitioners) and members of the Board of Directors of the MOWAD have arbitrarily, whimsically, and
unilaterally stopped and prohibited the petitioner from exercising his rights and performing his duties as General Manager of
the MOWAD and, in his place, have designated the respondent (petitioner) Maximo San Diego as Acting General Manager . . .

II-4 On December 15, 1992, while petitioner was out of office on official travel, . . . thru stealth and strategy, the respondents
have conspired and helped one another in removing the petitioner from the Office of the General Manager of the MOWAD by
forcibly destroying its door and locked it with a replaced door-knob and all attempts on his part to gain access and entry
proved futile; . . .

SECOND CAUSE OF ACTION

xxx xxx xxx

III-2 On January 7, 1993, . . . in confabulation with his co-respondents and members of the Board of Directors of the MOWAD,
the respondent Aniceto G. Mateo slapped the petitioner with an Order terminating his services as General Manger . . .

III-5 Petitioner has a clear right to the Office of General Manager of the MOWAD which is being usurped or unlawfully held by
respondent Maximo San Diego in conspiracy with his co-respondents; . . .

THIRD CAUSE OF ACTION

xxx xxx xxx

 IV-1-a Petitioner is entitled to the relief mandated, and the whole or part of such relief consists in restraining the commission,
or continuance of the acts complained of more particularly the continuous acts of repondents in stopping and prohibiting him
from exercising his rights and performing his duties as General Manager of the MOWAD and from stopping and prohibiting him
to gain access and entry to office. 3

Petitioners, in turn, moved to dismiss the case on two (2) grounds: (1) the court had no jurisdiction over disciplinary actions of
government employees which is vested exclusively in the Civil Service Commission; and (2) quo warranto was not the proper
remedy.4 Respondent Judge Arturo Marave denied the Motion to Dismiss on April 26, 1993, and the Motion for Reconsideration on
June 9, 1993.5

Petitioners then elevated the matter to this Court through a petition for certiorari under Rule 65 which was referred to respondent Court
of Appeals for adjudication. In its Decision, dated November 24, 1993, respondent Court of Appeals dismissed the petition for lack of
merit, and in its Resolution, dated January 11, 1994, denied the Motion for Reconsideration.6

The main issue in this petition for review is whether or not the Regional Trial Court of Rizal has jurisdiction over Sp. Civil Case No. 014-
M involving dismissal of an employee of quasi-public corporation.

We hold that it has no jurisdiction.

There is no question that MOWAD is a quasi-public corporation created pursuant to Presidential Decree (P.D.) No. 198, known as the
provincial Water Utilities Act of 1973, as amended.7 In Davao City Water District v. Civil Service Commissions 8 the Court en banc ruled
that employees of government-owned or controlled corporations with original charter fall under the jurisdiction of the Civil Service
Commission, viz:

xxx xxx xxx

As early as Baguio Water District v. Trajano et, al., We already ruled that a water district is a corporation created pursuant to a
special
law — P.D. No. 198, as amended, and as such its officers and employees are covered by the Civil Service Law.

In another case (Hagonoy Water District v. NLRC), We ruled once again that local water districts are quasi-public corporations
whose employees belong to the Civil Service. (emphasis omitted)

Indeed, the established rule is that the hiring and firing of employees of goverment-own and controlled corporations are governed by
the provisions of the Civil Service Law and Rules and Regulations. 9

Presidential Decee No. 807, Executive Order No. 292, 10 and Rule II section 1 of Memorandum Circular No. 44 series of 1990 of the
Civil Service Commission spell out the initial remedy of private respondent against illegal dismissal. They categorically provide that the
party aggrieved by a decision, ruling, order, or action of an agency of the government involving termination of services may appeal to
the Commission within fifteen (15) days. Thereafter, private respondent could go on certiorari to this Court under Rule 65 of the Rules
of Court if he still feels aggrieved by the ruling of the Civil Service Commission. So We held in Mancita v. Barcinas, 11 viz:

xxx xxx xxx

[N]o appeal lies from the decision of the Service Commission, * and that parties aggrieved thereby may proceed to this Court
alone on certiorari under Rule 65 of the Rules of Court, within thirty (30) days from receipt of a copy thereof, pursuant to
section 7, Article IX of the 1987 Constitution. We quote:

Sec. 7. Unless otherwise provided by this Constitution or by law, any decision, order, or ruling of each
Commission may be brought to the Supreme Court on certiorari by the party within thirty days from receipt of
a copy thereof.

The Civil Service Commission under the Constitution, is the single arbiter of all contests relating to the Civil service and as
such, its judgments are unappealable and subject only to this Court's certiorari judgment.

Mancita, however, no longer governs for under the present rule, Revised Circular No. 1-91 as amended by Revised Administrative
Circular No. 1-95 which took effect on June 1, 1995, final resolutions of the Civil Service Commission shall be appealable to the Court
of Appeals. In any event, whether under the old rule or present rule, Regional Trial Courts have no jurisdiction to entertain cases
involving dismissal of officers and employees covered by the Civil Service Law.

IN VIEW HEREOF, the petition is GRANTED and the decision of respondent Court of Appeals dated November 24, 1993 and its
Resolution dated January 1, 1994 in CA G.R. SP No. 31530 are ANNULLED and SET ASIDE. No costs.
SO ORDERED.

Narvasa, C.J., Regalado, Mendoza and Francisco, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 97203 May 26, 1993

HON. ISIDRO CARIÑO, substituted by HON. ARMANDO V. FABELLA, Secretary of Education, Culture and Sports, and
VENANCIO R. NAVA, Regional Director, DECS Region IX, Davao City, petitioners,
vs.
HON. IGNACIO M. CAPULONG, Presiding Judge of RTC-Makati, Br. 134 and AMA COMPUTER COLLEGE, INC., Davao City and
AMA COMPUTER COLLEGE, respondents.

The Solicitor General for plaintiff-appellee.

Mauricio C. Ulep for private respondents.

PADILLA, J.:

This is a petition for certiorari with a prayer for the issuance of a writ of preliminary injunction, to annul and set aside the order of
respondent Judge dated 15 November 1990 and the writ of preliminary injunction issued pursuant to the said order, dated 16 November
1990, and to enjoin the respondent Judge from implementing the order of 15 November 1990 and from further conducting proceedings
in Special Civil Case No. 90-2917 until further orders from this Court.

As prayed for, this Court issued on 28 February 1991 a temporary restraining order, viz. "effective immediately and continuing until
further orders from this Court You, RESPONDENT JUDGE, your agents, representatives, or any person or persons acting in your place
or stead are hereby ORDERED to CEASE and DESIST from implementing your Order dated November 15, 1990 and from conducting
further proceedings in Special Civil Case No. 90-2917 entitled "Ama Computer College, et al. vs. Hon. Isidro Carino, et al." 1

The antecedents are as follows:

By virtue of a "Contract of Lease with Option to Buy" entered into with Light Bringer School (LBS) on 14 May 1990, Ama Computer
College (AMA) took possession of the premises of the former located at Marfori Heights, Davao City. LBS is a duly recognized and
licensed elementary school which transferred its operation elsewhere in Davao City.

On 21 May 1990, Regional Director Venancio R. Nava, Region IX-DECS, received AMA's letter of intent to operate as an educational
institution in Davao City.2 Responding to the said letter, Regional Director Venancio R. Nava reminded AMA "of the provisions of the
Rules and Regulations of Batas Pambansa Blg. 232, specifically Article E, Section 7, Rule III that the filing of the application shall be at
least one (1) year before the opening of classes" and the "provisions of the Private School Law reiterated in the Educational Act of 1992
which prohibits the operation of unauthorized schools or courses." 3

Nevertheless, AMA proceeded to announce its opening through news and print media, and thereupon, started to enroll students in
elementary, secondary and tertiary levels. Taking remedial action, the DECS Regional Director directed AMA to stop enrollment and to
desist from operating without prior authorization.4

AMA, however, not only continued the enrollment but even started to hold regular classes, and thereafter, on 15 June 1990, filed a
formal application to operate. Acknowledging receipt of the said operation, the Regional Director reiterated the earlier directive for AMA
to stop operation with a warning that further failure to comply "would constrain the Office to invoke the Memorandum Agreement with
the Defense Department to stop unlawful operation of the school."5 Again, AMA ignored the directive and continued to operate illegally.

On 22 June 1990, a DECS inspection team was sent to the premises of AMA to look into the case. In its report,6 the inspection team
confirmed AMA's defiance of the DECS directive. Hence, military assistance was requested by the Regional Director to effect closure of
AMA Computer College, Inc., Davao City. However, in a letter dated 25 June 1990, AMA's Officer-in-Charge requested that the closure
be held in abeyance for fifteen (15) days,7 which the Regional Director denied on the same day.8

On even date, i.e. on 25 June 1990, the Regional Director received a letter from AMA asking that the parties await the decision of the
Secretary of DECS on its application for permit to operate before the closure order is effected. 9 On 27 June, 1990, the Secretary of
DECS denied AMA's
application.10

On 6 July 1990, AMA filed with the RTC of Manila, Branch 18, a petition for prohibition, certiorari and mandamus against the Hon. Isidro
Carino, DEC's Secretary and Atty. Venancio R. Nava, Regional Director, Department of Education, Culture and Sports, Region IX to
annul and set aside the closure order and to enjoin the respondents from closing or padlocking AMACC, Davao City. The case was
docketed as Civil Case No. 90-53615.11 On 26 July 1990, the trial court dismissed the petition for lack of merit. Thereafter, AMA filed
with the Court of Appeals a petition for certiorari in CA-G.R. SP No. 22357 assailing the 26 July order of the court a quo, but, again, the
Court of Appeals peremptorily dismissed the petition 12 and also denied its motion for reconsideration.13

Under the cloak of an organization of parents of students styling themselves as AMACC-PARENTS Organization, AMA filed another
petition for prohibition and/or mandamus with preliminary injunction with the RTC of Davao City, Branch 8, docketed therein as Civil
Case No. 20-230-90, entitled "Freddie Retotal, Ricardo Fuentes, Calixta Holazo, Ursula Reyes, in their own behalf and in behalf of the
other members of AMACC Parents' Organization vs. Venancio Nava, in his capacity as Regional Director, Department of Education,
Culture and Sports."14 On 7 August 1990, the court dismissed the petition. 15

AMA, however, in order to thwart the closure or padlocking of its school in Davao City, filed with the RTC of Makati, Branch 134,
presided over by respondent Judge, another petition for mandamus, with damages, preliminary injunction and/or restraining order
against Hon. Isidro Carino, Secretary and Director, Department of Education, Culture and Sports, Region IX to compel the respondents
to approve petitioners' application for permit to operate retroactive to the commencement of school year 1990-1991, and to enjoin the
closure and/or padlocking of AMA-Davao school, docketed therein as SP Civil Case No. 90-2917.16

Petitioners, through the Office of the Solicitor General, moved to dismiss AMA's petition on the ground that (1) AMA is not entitled to the
writ of mandamus as petitioners' authority to grant or deny the permit to operate is discretionary and not ministerial; (2) AMA failed to
comply with the provisions of the Education Act; (3) AMA is blatantly engaging in forum shopping; (4) AMA failed to exhaust available
administrative remedies before resorting to court; and (5) lack of territorial jurisdiction over petitioner Regional Director and AMA-
Davao.17

On 15 November 1990, the respondent Judge issued an order 18 directing the issuance of a writ of preliminary injunction, the dispositive
portion of which reads as follows:

WHEREFORE, in view of the foregoing reasons, let a writ of preliminary injunction be issued, upon filing of petitioners
of a bond in the amount of P500,000.00, duly approved by this Court, enjoining and restraining the respondent Hon.
Isidro Carino, his agents, representatives and any person acting for and his behalf, from implementing the closing
and/or padlocking AMA Computer College, Inc. - Davao City Branch, until further orders from this Court. 19

and on the following day, i.e., on 16 November 1990, issued the writ of preliminary injunction. 20

Hence, the petitioners filed the present petition, claiming that respondent Judge acted with grave abuse of discretion amounting to lack
or excess of his jurisdiction in issuing the order dated 15 November 1990 and the writ of preliminary injunction dated 16 November
1990, and that there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law except through the present
petition. Acting upon the petition, the Court required the private respondents to comment on the petition. 21

Instead of filing their comment, the private respondents filed a Manifestation and Motion for the Dismissal of the Petition on the
following grounds: (1) A compromise agreement has already been effected between AMA Computer College and the Department of
Education completely altering the factual situation in the case at bar; and (2) The grounds relied upon for this petition for certiorari no
longer exist.22

As required by the Court, the petitioners filed their comment 23 on the aforesaid Manifestation and Motion, while the private respondents
filed by their reply24 thereto. As further required by the Court, the petitioners filed a
rejoinder25 to the private respondents' reply, and the private respondents their sur-rejoinder26 to the petitioners' rejoinder

On 5 November 1991, the Court denied the private respondents' Manifestation and Motion for the dismissal of the petition, and directed
them to file their comment on the main petition as required in the resolution of 14 February 1991. 27

In their comment28 on the petition, the private respondents simply reiterated the allegations contained in their Manifestation and Motion
for the dismissal of the petition.

Thereafter, "the Court Resolved to (a) CONSIDER the comment as ANSWER to the petition; (b) GIVE DUE COURSE to the petition;
and (c) CALENDAR this case for deliberation."29

After careful deliberation, the Court holds that the petition is meritorious; hence, the same should be granted.
The respondent Judge committed grave abuse of discretion amounting to lack or excess of his jurisdiction in issuing the order of 15
November 1990 directing the issuance of a writ of preliminary injunction and in issuing the writ on 16 November 1990.

Under Batas Pambansa Blg. 232, otherwise known as the "Education Act of 1982", the establishment and operation of schools are
subject to the prior authorization of the government and shall be effected by recognition. And for the implementation of the law, the
Ministry (now Department) of Education, Culture and Sports (DECS) is empowered to prescribe the rules and regulations governing
recognition.30

The Implementing Rules and Regulations of Batas Pambansa Blg. 232 provide, among others, as follows :

Section 1. Policy — Pursuant to the Constitution, all educational institutions shall be under the supervision or, and
subject to regulation by the State.

Consequently, no school or educational institution shall be established, nor operate any educational program,
whether formal or non-formal, except by law or pursuant to law and in accordance with these Rules.

xxx xxx xxx

Sec. 4. Establishment of School — The establishment of new schools shall be the subject to the following :

xxx xxx xxx

d. The establishment of a new private school, including that of a branch school or extension class, shall be subject to
the prior approval of the Ministry pursuant to Act. No. 2706, as amended, the Educational Act of 1982, and other
education related and applicable laws . . . .

Sec. 5. Recognition of Schools — In view of the State Policy that education programs and/or operations shall be of
good quality, and therefore shall at least satisfy the minimum standards with respect to curricula, teaching staff,
physical plant and facilities, and of administrative and management viability, no institution established as a school
shall operate without prior government authorization to conduct or undertake educational operations. . . . 31

The Implementing Rules and Regulations of Batas Pambansa Blg. 232, further provide :

Sec. 11. Effects of Non-Recognition. — Contrariwise, the effects of non-recognition of a school or any of its programs
or courses of studies, or specifically the non-issuance by the Ministry (Department) of the permit or certificate of
government recognition therefore as provided in Sections 8 and 9 under this Rule, shall be any or all of the following :

a. At the option of the Ministry, either the total closure of the school or its program or courses of studies for lack of
authority to operate.

xxx xxx xxx

c. Disqualification of the school to confer any title or degree, or to award any certificate or diploma to any pupil or
student enrolled in the non-recognized program or course or studies.32

As a rule, a writ of preliminary injunction, as an ancillary or preventive remedy, may only be resorted to by a litigant to protect or
preserve his rights or interest, and for no other purpose, during the pendency of the principal action. Before a writ of preliminary
injunction may be issued, there must be a clear showing by the complainant that there exists a right to be protected and that the acts
against which the writ is directed are violative of said right. 33

In the case at bar, the private respondents' application for a permit to operate AMACC-Davao City as an educational institution was
denied by the petitioners. Otherwise stated, the private respondents do not have a permit to operate or a certificate of recognition from
the government to undertake educational or school operations. In fine, the private respondents do not have any existing right that
needed to be protected during the pendency of their principal action for mandamus. Hence, the "closing" and/or "padlocking" of
AMACC-Davao City would not and did not violate any right of the private respondents.

Moreover, it is not the function of the writ of preliminary injunction to restrain a public officer from performing a duty imposed by law or
to permit the doing of that which is declared unlawful. 34 Under Batas Pambansa Blg. 232 and its Implementing Rules and Regulations,
the establishment and operation of schools are subject to the prior authorization of the government. And, as sanctions for operating
without permit, the DECS is authorized either to impose the total closure of school and/or to disqualify the school from conferring title or
degree in the non-recognized program or course of studies. In ordering the total closure of AMACC-Davao City, the petitioners were
only performing their duties as public officers; hence, the respondent Judge should not have issued the writ of preliminary injunction. In
issuing the writ, he allowed the private respondents to continue the operation of AMACC-Davao City as an educational institution
without a permit or certificate of government recognition, thereby sanctioning the act which is unlawful.

In directing the issuance of the writ of preliminary injunction, the respondent Judge reasoned out that the private respondents "need full
protection for by law against irreparable damage that they may sustain by virtue of the closure order." In this connection, it would suffice
to state that the mere "possibility of irreparable damage, without proof of an actually existing right, is no ground for an injunction, being
a mere damnum absque injuria."35

Finally, the action filed by the private respondents in the court below is a petition for mandamus to compel the petitioners to approve
their application to operate AMACC-Davao City as an educational institution. As a rule, mandamus will lie only to compel an officer to
perform a ministerial duty but not a discretionary function. 36 A ministerial duty is one which is so clear and specific as to leave no room
for the exercise of discretion in its performance. On the other hand, a discretionary duty is that which by nature requires the exercise of
judgment. As explained in the case of Symaco vs. Aquino,37 —

A purely ministerial act or duty to a discretional act, is one which an officer or tribunal performs in a given state of
facts, in a prescribed manner, in obedience to the mandate of legal authority, without regard to or the exercise of his
own judgment, upon the propriety of the act done. If the law imposes a duty upon a public officer, and gives him the
right to decide how or when the duty shall be performed, such duty is ministerial only when the discharge of the same
requires neither the exercise of official discretion nor judgment.

In the present case, the issuance of the permit in question is not a ministerial duty of the petitioners. It is a discretionary duty or function
on the part of the petitioners because it had to be exercised in accordance with — and not in violation of — the law and its
Implementing Rules and Regulations. Thus, as aptly observed by the Solicitor General in his Motion to Dismiss the
petition —

Establishment or recognition of private schools through government grant of permits is governed by law, specifically
Batas Pambansa Blg. 232. The authority to grant permit is vested upon the judgment of the Department of Education,
Culture and Sports, which prescribes the rules and regulations governing the recognition on private schools (Section
27, Batas Pambansa Blg. 232).

Whether to grant or not a permit is not a ministerial duty of the Department of Education, Culture and Sports. Rather it
is a discretionary duty to be exercised in accordance with the rules and regulations prescribed.

In the case at bar, petitioner has been operating a school without a permit in blatant violation of law. Public
respondent has no ministerial duty to issue to petitioner a permit to operate a school in Davao City before petitioner
has even filed an application or before his application has been first processed in accordance with the rules and
regulations on the matter. Certainly, public respondent is not enjoined by any law to grant such permit or to allow
such operation without a permit, without first processing an application. To do so is violation of the Educational Act.38

ACCORDINGLY, the petition is GRANTED and the order dated 15 November 1990 and the writ of preliminary injunction dated 16
November 1990 are hereby ANNULLED and SET ASIDE. The petition for mandamus before the respondent court is DISMISSED.

The Temporary Restraining Order heretofore issued by this Court is hereby made PERMANENT.

SO ORDERED.

Narvasa, C.J., Cruz, Feliciano, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 76633 October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner,

vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND EMPLOYMENT, HEARING
OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.

Jimenea, Dala & Zaragoza Law Office for petitioner.

The Solicitor General for public respondent.

Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.:

The private respondent in this case was awarded the sum of P192,000.00 by the Philippine Overseas Employment Administration
(POEA) for the death of her husband. The decision is challenged by the petitioner on the principal ground that the POEA had no
jurisdiction over the case as the husband was not an overseas worker.

Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan, March 15, 1985. His
widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the
vessel, argued that the complaint was cognizable not by the POEA but by the Social Security System and should have been filed
against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties
ruled in favor of the complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial expenses.

The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal on the ground of non-exhaustion of
administrative remedies.

Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations Commission, on the theory inter alia that
the agency should be given an opportunity to correct the errors, if any, of its subordinates. This case comes under one of the
exceptions, however, as the questions the petitioner is raising are essentially questions of law. 1 Moreover, the private respondent
himself has not objected to the petitioner's direct resort to this Court, observing that the usual procedure would delay the disposition of
the case to her prejudice.

The Philippine Overseas Employment Administration was created under Executive Order No. 797, promulgated on May 1, 1982, to
promote and monitor the overseas employment of Filipinos and to protect their rights. It replaced the National Seamen Board created
earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is vested with "original and
exclusive jurisdiction over all cases, including money claims, involving employee-employer relations arising out of or by virtue of any law
or contract involving Filipino contract workers, including seamen." These cases, according to the 1985 Rules and Regulations on
Overseas Employment issued by the POEA, include "claims for death, disability and other benefits" arising out of such employment. 2

The petitioner does not contend that Saco was not its employee or that the claim of his widow is not compensable. What it does urge is
that he was not an overseas worker but a 'domestic employee and consequently his widow's claim should have been filed with Social
Security System, subject to appeal to the Employees Compensation Commission.

We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas employee of the petitioner at the time
he met with the fatal accident in Japan in 1985.

Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as "employment of a worker
outside the Philippines, including employment on board vessels plying international waters, covered by a valid contract. 3 A contract
worker is described as "any person working or who has worked overseas under a valid employment contract and shall include
seamen" 4 or "any person working overseas or who has been employed by another which may be a local employer, foreign employer,
principal or partner under a valid employment contract and shall include seamen." 5 These definitions clearly apply to Vitaliano Saco for
it is not disputed that he died while under a contract of employment with the petitioner and alongside the petitioner's vessel, the M/V
Eastern Polaris, while berthed in a foreign country. 6
It is worth observing that the petitioner performed at least two acts which constitute implied or tacit recognition of the nature of Saco's
employment at the time of his death in 1985. The first is its submission of its shipping articles to the POEA for processing, formalization
and approval in the exercise of its regulatory power over overseas employment under Executive Order NO. 797. 7 The second is its
payment 8 of the contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was created by P.D.
No. 1694 "for the purpose of providing social and welfare services to Filipino overseas workers."

Significantly, the office administering this fund, in the receipt it prepared for the private respondent's signature, described the subject of
the burial benefits as "overseas contract worker Vitaliano Saco." 9 While this receipt is certainly not controlling, it does indicate, in the
light of the petitioner's own previous acts, that the petitioner and the Fund to which it had made contributions considered Saco to be an
overseas employee.

The petitioner argues that the deceased employee should be likened to the employees of the Philippine Air Lines who, although
working abroad in its international flights, are not considered overseas workers. If this be so, the petitioner should not have found it
necessary to submit its shipping articles to the POEA for processing, formalization and approval or to contribute to the Welfare Fund
which is available only to overseas workers. Moreover, the analogy is hardly appropriate as the employees of the PAL cannot under the
definitions given be considered seamen nor are their appointments coursed through the POEA.

The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the POEA pursuant to its Memorandum
Circular No. 2, which became effective on February 1, 1984. This circular prescribed a standard contract to be adopted by both foreign
and domestic shipping companies in the hiring of Filipino seamen for overseas employment. A similar contract had earlier been
required by the National Seamen Board and had been sustained in a number of cases by this Court. 10 The petitioner claims that it had
never entered into such a contract with the deceased Saco, but that is hardly a serious argument. In the first place, it should have done
so as required by the circular, which specifically declared that "all parties to the employment of any Filipino seamen on board any
ocean-going vessel are advised to adopt and use this employment contract effective 01 February 1984 and to desist from using any
other format of employment contract effective that date." In the second place, even if it had not done so, the provisions of the said
circular are nevertheless deemed written into the contract with Saco as a postulate of the police power of the State. 11

But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the principle of non-delegation of legislative
power. It contends that no authority had been given the POEA to promulgate the said regulation; and even with such authorization, the
regulation represents an exercise of legislative discretion which, under the principle, is not subject to delegation.

The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No. 797, reading as follows:

... The governing Board of the Administration (POEA), as hereunder provided shall promulgate the necessary rules
and regulations to govern the exercise of the adjudicatory functions of the Administration (POEA).

Similar authorization had been granted the National Seamen Board, which, as earlier observed, had itself prescribed a standard
shipping contract substantially the same as the format adopted by the POEA.

The second challenge is more serious as it is true that legislative discretion as to the substantive contents of the law cannot be
delegated. What can be delegated is the discretion to determine how the law may be enforced, not what the law shall be. The
ascertainment of the latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by the
legislature to the delegate. Thus, in Ynot v. Intermediate Apellate Court 12 which annulled Executive Order No. 626, this Court held:

We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed
in the questioned executive order. It is there authorized that the seized property shall be distributed to charitable
institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in
the case of carabaos.' (Italics supplied.) The phrase "may see fit" is an extremely generous and dangerous condition,
if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in
vain for the usual standard and the reasonable guidelines, or better still, the limitations that the officers must observe
when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the
answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely,
there is here a 'roving commission a wide and sweeping authority that is not canalized within banks that keep it from
overflowing,' in short a clearly profligate and therefore invalid delegation of legislative powers.

There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz, the completeness test and
the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature
such that when it reaches the delegate the only thing he will have to do is enforce it. 13 Under the sufficient standard test, there must be
adequate guidelines or stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from running
riot. 14

Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to step into the shoes
of the legislature and exercise a power essentially legislative.
The principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important in
the case of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when
executive or judicial powers have to be delegated by the authorities to which they legally certain. In the case of the legislative power,
however, such occasions have become more and more frequent, if not necessary. This had led to the observation that the delegation of
legislative power has become the rule and its non-delegation the exception.

The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope directly with the
myriad problems demanding its attention. The growth of society has ramified its activities and created peculiar and sophisticated
problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has become necessary.
To many of the problems attendant upon present-day undertakings, the legislature may not have the competence to provide the
required direct and efficacious, not to say, specific solutions. These solutions may, however, be expected from its delegates, who are
supposed to be experts in the particular fields assigned to them.

The reasons given above for the delegation of legislative powers in general are particularly applicable to administrative bodies. With the
proliferation of specialized activities and their attendant peculiar problems, the national legislature has found it more and more
necessary to entrust to administrative agencies the authority to issue rules to carry out the general provisions of the statute. This is
called the "power of subordinate legislation."

With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in' the details which the
Congress may not have the opportunity or competence to provide. This is effected by their promulgation of what are known as
supplementary regulations, such as the implementing rules issued by the Department of Labor on the new Labor Code. These
regulations have the force and effect of law.

Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribed thereby has been applied in a
significant number of the cases without challenge by the employer. The power of the POEA (and before it the National Seamen Board)
in requiring the model contract is not unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority.
That standard is discoverable in the executive order itself which, in creating the Philippine Overseas Employment Administration,
mandated it to protect the rights of overseas Filipino workers to "fair and equitable employment practices."

Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest" in People v. Rosenthal 15 "justice and
equity" in Antamok Gold Fields v. CIR 16 "public convenience and welfare" in Calalang v. Williams 17 and "simplicity, economy and
efficiency" in Cervantes v. Auditor General, 18 to mention only a few cases. In the United States, the "sense and experience of men"
was accepted in Mutual Film Corp. v. Industrial Commission, 19 and "national security" in Hirabayashi v. United States. 20

It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42 since March 1985 and that
she was also paid a P1,000.00 funeral benefit by the Social Security System. In addition, as already observed, she also received a
P5,000.00 burial gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude allowance of the private
respondent's claim against the petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen
under Memorandum Circular No. 2, Series of 1984, that—

Section C. Compensation and Benefits.—

1. In case of death of the seamen during the term of his Contract, the employer shall pay his beneficiaries the amount
of:

a. P220,000.00 for master and chief engineers

b. P180,000.00 for other officers, including radio operators and master electrician

c. P 130,000.00 for ratings.

2. It is understood and agreed that the benefits mentioned above shall be separate and distinct from, and will be in
addition to whatever benefits which the seaman is entitled to under Philippine laws. ...

3. ...

c. If the remains of the seaman is buried in the Philippines, the owners shall pay the beneficiaries of
the seaman an amount not exceeding P18,000.00 for burial expenses.

The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the National Seamen Board on July
12,1976, providing an follows:

Income Benefits under this Rule Shall be Considered Additional Benefits.—

 All compensation benefits under Title II, Book Four of the Labor Code of the Philippines (Employees Compensation
and State Insurance Fund) shall be granted, in addition to whatever benefits, gratuities or allowances that the
seaman or his beneficiaries may be entitled to under the employment contract approved by the NSB. If applicable, all
benefits under the Social Security Law and the Philippine Medicare Law shall be enjoyed by the seaman or his
beneficiaries in accordance with such laws.

The above provisions are manifestations of the concern of the State for the working class, consistently with the social justice policy and
the specific provisions in the Constitution for the protection of the working class and the promotion of its interest.

One last challenge of the petitioner must be dealt with to close t case. Its argument that it has been denied due process because the
same POEA that issued Memorandum Circular No. 2 has also sustained and applied it is an uninformed criticism of administrative law
itself. Administrative agencies are vested with two basic powers, the quasi-legislative and the quasi-judicial. The first enables them to
promulgate implementing rules and regulations, and the second enables them to interpret and apply such regulations. Examples
abound: the Bureau of Internal Revenue adjudicates on its own revenue regulations, the Central Bank on its own circulars, the
Securities and Exchange Commission on its own rules, as so too do the Philippine Patent Office and the Videogram Regulatory Board
and the Civil Aeronautics Administration and the Department of Natural Resources and so on ad infinitum on their respective
administrative regulations. Such an arrangement has been accepted as a fact of life of modern governments and cannot be considered
violative of due process as long as the cardinal rights laid down by Justice Laurel in the landmark case of Ang Tibay v. Court of
Industrial Relations 21 are observed.

Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor of the private respondent, in line
with the express mandate of the Labor Code and the principle that those with less in life should have more in law.

When the conflicting interests of labor and capital are weighed on the scales of social justice, the heavier influence of the latter must be
counter-balanced by the sympathy and compassion the law must accord the underprivileged worker. This is only fair if he is to be given
the opportunity and the right to assert and defend his cause not as a subordinate but as a peer of management, with which he can
negotiate on even plane. Labor is not a mere employee of capital but its active and equal partner.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining order dated December 10, 1986
is hereby LIFTED. It is so ordered.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Footnotes
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 124360 November 5, 1997

FRANCISCO S. TATAD, petitioner,

vs.
THE SECRETARY OF THE DEPARTMENT OF ENERGY AND THE SECRETARY OF THE DEPARTMENT OF
FINANCE, respondents.

G.R. No. 127867 November 5, 1997

EDCEL C. LAGMAN, JOKER P. ARROYO, ENRIQUE GARCIA, WIGBERTO TANADA, FLAG HUMAN RIGHTS FOUNDATION,
INC., FREEDOM FROM DEBT COALITION (FDC), SANLAKAS, petitioners,
vs.
HON. RUBEN TORRES in his capacity as the Executive Secretary, HON. FRANCISCO VIRAY, in his capacity as the Secretary
of Energy, CALTEX Philippines, Inc., PETRON Corporation and PILIPINAS SHELL Corporation, respondents.

PUNO, J.:

The petitions at bar challenge the constitutionality of Republic Act No. 8180 entitled "An Act Deregulating the Downstream Oil Industry
and For Other Purposes".1 R.A. No. 8180 ends twenty six (26) years of government regulation of the downstream oil industry. Few
cases carry a surpassing importance on the life of every Filipino as these petitions for the upswing and downswing of our economy
materially depend on the oscillation of oil.

First, the facts without the fat. Prior to 1971, there was no government agency regulating the oil industry other than those dealing with
ordinary commodities. Oil companies were free to enter and exit the market without any government interference. There were four (4)
refining companies (Shell, Caltex, Bataan Refining Company and Filoil Refining) and six (6) petroleum marketing companies (Esso,
Filoil, Caltex, Getty, Mobil and Shell), then operating in the country. 2

In 1971, the country was driven to its knees by a crippling oil crisis. The government, realizing that petroleum and its products are vital
to national security and that their continued supply at reasonable prices is essential to the general welfare, enacted the Oil Industry
Commission Act.3 It created the Oil Industry Commission (OIC) to regulate the business of importing, exporting, re-exporting, shipping,
transporting, processing, refining, storing, distributing, marketing and selling crude oil, gasoline, kerosene, gas and other refined
petroleum products. The OIC was vested with the power to fix the market prices of petroleum products, to regulate the capacities of
refineries, to license new refineries and to regulate the operations and trade practices of the industry. 4

In addition to the creation of the OIC, the government saw the imperious need for a more active role of Filipinos in the oil industry. Until
the early seventies, the downstream oil industry was controlled by multinational companies. All the oil refineries and marketing
companies were owned by foreigners whose economic interests did not always coincide with the interest of the Filipino. Crude oil was
transported to the country by foreign-controlled tankers. Crude processing was done locally by foreign-owned refineries and petroleum
products were marketed through foreign-owned retail outlets. On November 9, 1973, President Ferdinand E. Marcos boldly created the
Philippine National Oil Corporation (PNOC) to break the control by foreigners of our oil industry.5 PNOC engaged in the business of
refining, marketing, shipping, transporting, and storing petroleum. It acquired ownership of ESSO Philippines and Filoil to serve as its
marketing arm. It bought the controlling shares of Bataan Refining Corporation, the largest refinery in the country. 6 PNOC later put up
its own marketing subsidiary — Petrophil. PNOC operated under the business name PETRON Corporation. For the first time, there was
a Filipino presence in the Philippine oil market.

In 1984, President Marcos through Section 8 of Presidential Decree No. 1956, created the Oil Price Stabilization Fund (OPSF) to
cushion the effects of frequent changes in the price of oil caused by exchange rate adjustments or increase in the world market prices
of crude oil and imported petroleum products. The fund is used (1) to reimburse the oil companies for cost increases in crude oil and
imported petroleum products resulting from exchange rate adjustment and/or increase in world market prices of crude oil, and (2) to
reimburse oil companies for cost underrecovery incurred as a result of the reduction of domestic prices of petroleum products. Under
the law, the OPSF may be sourced from:

1. any increase in the tax collection from ad valorem tax or customs duty imposed on petroleum products subject to
tax under P.D. No. 1956 arising from exchange rate adjustment,
 2. any increase in the tax collection as a result of the lifting of tax exemptions of government corporations, as may be
determined by the Minister of Finance in consultation with the Board of Energy,

3. any additional amount to be imposed on petroleum products to augment the resources of the fund through an
appropriate order that may be issued by the Board of Energy requiring payment of persons or companies engaged in
the business of importing, manufacturing and/or marketing petroleum products, or

4. any resulting peso costs differentials in case the actual peso costs paid by oil companies in the importation of
crude oil and petroleum products is less than the peso costs computed using the reference foreign exchange rate as
fixed by the Board of Energy.7

By 1985, only three (3) oil companies were operating in the country — Caltex, Shell and the government-owned PNOC.

In May, 1987, President Corazon C. Aquino signed Executive Order No. 172 creating the Energy Regulatory Board to regulate the
business of importing, exporting, re-exporting, shipping, transporting, processing, refining, marketing and distributing energy resources
"when warranted and only when public necessity requires." The Board had the following powers and functions:

1. Fix and regulate the prices of petroleum products;

2. Fix and regulate the rate schedule or prices of piped gas to be charged by duly
franchised gas companies which distribute gas by means of underground pipe system;

3. Fix and regulate the rates of pipeline concessionaries under the provisions of R.A. No.
387, as amended . . . ;

4. Regulate the capacities of new refineries or additional capacities of existing refineries

and license refineries that may be organized after the issuance of (E.O. No. 172) under
such terms and conditions as are consistent with the national interest; and

5. Whenever the Board has determined that there is a shortage of any petroleum product,
or when public interest so requires, it may take such steps as it may consider necessary,
including the temporary adjustment of the levels of prices of petroleum products and the
payment to the Oil Price Stabilization Fund . . . by persons or entities engaged in the
petroleum industry of such amounts as may be determined by the Board, which may
enable the importer to recover its cost of importation.8

On December 9, 1992, Congress enacted R.A. No. 7638 which created the Department of Energy to prepare, integrate, coordinate,
supervise and control all plans, programs, projects, and activities of the government in relation to energy exploration, development,
utilization, distribution and conservation.9 The thrust of the Philippine energy program under the law was toward privatization of
government agencies related to energy, deregulation of the power and energy industry and reduction of dependency on oil-fired
plants.10 The law also aimed to encourage free and active participation and investment by the private sector in all energy activities.
Section 5(e) of the law states that "at the end of four (4) years from the effectivity of this Act, the Department shall, upon approval of the
President, institute the programs and timetable of deregulation of appropriate energy projects and activities of the energy industry."

Pursuant to the policies enunciated in R.A. No. 7638, the government approved the privatization of Petron Corporation in 1993. On
December 16, 1993, PNOC sold 40% of its equity in Petron Corporation to the Aramco Overseas Company.

In March 1996, Congress took the audacious step of deregulating the downstream oil industry. It enacted R.A. No. 8180, entitled the
"Downstream Oil Industry Deregulation Act of 1996." Under the deregulated environment, "any person or entity may import or purchase
any quantity of crude oil and petroleum products from a foreign or domestic source, lease or own and operate refineries and other
downstream oil facilities and market such crude oil or use the same for his own requirement," subject only to monitoring by the
Department of
Energy.11

The deregulation process has two phases: the transition phase and the full deregulation phase. During the transition phase, controls of
the non-pricing aspects of the oil industry were to be lifted. The following were to be accomplished: (1) liberalization of oil importation,
exportation, manufacturing, marketing and distribution, (2) implementation of an automatic pricing mechanism, (3) implementation of an
automatic formula to set margins of dealers and rates of haulers, water transport operators and pipeline concessionaires, and (4)
restructuring of oil taxes. Upon full deregulation, controls on the price of oil and the foreign exchange cover were to be lifted and the
OPSF was to be abolished.

The first phase of deregulation commenced on August 12, 1996.

On February 8, 1997, the President implemented the full deregulation of the Downstream Oil Industry through E.O. No. 372.
The petitions at bar assail the constitutionality of various provisions of R.A No. 8180 and E.O. No. 372.

In G.R. No. 124360, petitioner Francisco S. Tatad seeks the annulment of section 5(b) of R.A. No. 8180. Section 5(b) provides:

b) Any law to the contrary notwithstanding and starting with the effectivity of this Act, tariff duty shall be imposed and collected
on imported crude oil at the rate of three percent (3%) and imported refined petroleum products at the rate of seven percent
(7%), except fuel oil and LPG, the rate for which shall be the same as that for imported crude oil: Provided, That beginning on
January 1, 2004 the tariff rate on imported crude oil and refined petroleum products shall be the same: Provided, further, That
this provision may be amended only by an Act of Congress.

The petition is anchored on three arguments:

First, that the imposition of different tariff rates on imported crude oil and imported refined petroleum products violates the equal
protection clause. Petitioner contends that the 3%-7% tariff differential unduly favors the three existing oil refineries and discriminates
against prospective investors in the downstream oil industry who do not have their own refineries and will have to source refined
petroleum products from abroad.

Second, that the imposition of different tariff rates does not deregulate the downstream oil industry but instead controls the oil industry,
contrary to the avowed policy of the law. Petitioner avers that the tariff differential between imported crude oil and imported refined
petroleum products bars the entry of other players in the oil industry because it effectively protects the interest of oil companies with
existing refineries. Thus, it runs counter to the objective of the law "to foster a truly competitive market."

Third, that the inclusion of the tariff provision in section 5(b) of R.A. No. 8180 violates Section 26(1) Article VI of the Constitution
requiring every law to have only one subject which shall be expressed in its title. Petitioner contends that the imposition of tariff rates in
section 5(b) of R.A. No. 8180 is foreign to the subject of the law which is the deregulation of the downstream oil industry.

In G.R. No. 127867, petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique Garcia, Wigberto Tanada, Flag Human Rights Foundation,
Inc., Freedom from Debt Coalition (FDC) and Sanlakas contest the constitutionality of section 15 of R.A. No. 8180 and E.O. No. 392.
Section 15 provides:

Sec. 15. Implementation of Full Deregulation. — Pursuant to Section 5(e) of Republic Act No. 7638, the DOE shall, upon
approval of the President, implement the full deregulation of the downstream oil industry not later than March 1997. As far as
practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world market
are declining and when the exchange rate of the peso in relation to the US dollar is stable. Upon the implementation of the full
deregulation as provided herein, the transition phase is deemed terminated and the following laws are deemed repealed:

xxx xxx xxx

E.O. No. 372 states in full, viz.:

WHEREAS, Republic Act No. 7638, otherwise known as the "Department of Energy Act of 1992," provides that, at the end of
four years from its effectivity last December 1992, "the Department (of Energy) shall, upon approval of the President, institute
the programs and time table of deregulation of appropriate energy projects and activities of the energy sector;"

WHEREAS, Section 15 of Republic Act No. 8180, otherwise known as the "Downstream Oil Industry Deregulation Act of
1996," provides that "the DOE shall, upon approval of the President, implement full deregulation of the downstream oil industry
not later than March, 1997. As far as practicable, the DOE shall time the full deregulation when the prices of crude oil and
petroleum products in the world market are declining and when the exchange rate of the peso in relation to the US dollar is
stable;"

WHEREAS, pursuant to the recommendation of the Department of Energy, there is an imperative need to implement the full
deregulation of the downstream oil industry because of the following recent developments: (i) depletion of the buffer fund on or
about 7 February 1997 pursuant to the Energy Regulatory Board's Order dated 16 January 1997; (ii) the prices of crude oil
had been stable at $21-$23 per barrel since October 1996 while prices of petroleum products in the world market had been
stable since mid-December of last year. Moreover, crude oil prices are beginning to soften for the last few days while prices of
some petroleum products had already declined; and (iii) the exchange rate of the peso in relation to the US dollar has been
stable for the past twelve (12) months, averaging at around P26.20 to one US dollar;

WHEREAS, Executive Order No. 377 dated 31 October 1996 provides for an institutional framework for the administration of
the deregulated industry by defining the functions and responsibilities of various government agencies;

WHEREAS, pursuant to Republic Act No. 8180, the deregulation of the industry will foster a truly competitive market which can
better achieve the social policy objectives of fair prices and adequate, continuous supply of environmentally-clean and high
quality petroleum products;
 NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by the powers vested in me by law, do
hereby declare the full deregulation of the downstream oil industry.

In assailing section 15 of R.A. No. 8180 and E.O. No. 392, petitioners offer the following submissions:

First, section 15 of R.A. No. 8180 constitutes an undue delegation of legislative power to the President and the Secretary of Energy
because it does not provide a determinate or determinable standard to guide the Executive Branch in determining when to implement
the full deregulation of the downstream oil industry. Petitioners contend that the law does not define when it is practicable for the
Secretary of Energy to recommend to the President the full deregulation of the downstream oil industry or when the President may
consider it practicable to declare full deregulation. Also, the law does not provide any specific standard to determine when the prices of
crude oil in the world market are considered to be declining nor when the exchange rate of the peso to the US dollar is considered
stable.

Second, petitioners aver that E.O. No. 392 implementing the full deregulation of the downstream oil industry is arbitrary and
unreasonable because it was enacted due to the alleged depletion of the OPSF fund — a condition not found in R.A. No. 8180.

Third, section 15 of R.A. No. 8180 and E.O. No. 392 allow the formation of a de facto cartel among the three existing oil companies —
Petron, Caltex and Shell — in violation of the constitutional prohibition against monopolies, combinations in restraint of trade and unfair
competition.

Respondents, on the other hand, fervently defend the constitutionality of R.A. No. 8180 and E.O. No. 392. In addition, respondents
contend that the issues raised by the petitions are not justiciable as they pertain to the wisdom of the law. Respondents further aver that
petitioners have no locus standi as they did not sustain nor will they sustain direct injury as a result of the implementation of R.A. No.
8180.

The petitions were heard by the Court on September 30, 1997. On October 7, 1997, the Court ordered the private respondents oil
companies "to maintain the status quo and to cease and desist from increasing the prices of gasoline and other petroleum fuel products
for a period of thirty (30) days . . . subject to further orders as conditions may warrant."

We shall now resolve the petitions on the merit. The petitions raise procedural and substantive issues bearing on the constitutionality of
R.A. No. 8180 and E.O. No. 392. The procedural issues are: (1) whether or not the petitions raise a justiciable controversy, and (2)
whether or not the petitioners have the standing to assail the validity of the subject law and executive order. The substantive issues are:
(1) whether or not section 5 (b) violates the one title — one subject requirement of the Constitution; (2) whether or not the same section
violates the equal protection clause of the Constitution; (3) whether or not section 15 violates the constitutional prohibition on undue
delegation of power; (4) whether or not E.O. No. 392 is arbitrary and unreasonable; and (5) whether or not R.A. No. 8180 violates the
constitutional prohibition against monopolies, combinations in restraint of trade and unfair competition.

We shall first tackle the procedural issues. Respondents claim that the avalanche of arguments of the petitioners assail the wisdom of
R.A. No. 8180. They aver that deregulation of the downstream oil industry is a policy decision made by Congress and it cannot be
reviewed, much less be reversed by this Court. In constitutional parlance, respondents contend that the petitions failed to raise a
justiciable controversy.

Respondents' joint stance is unnoteworthy. Judicial power includes not only the duty of the courts to settle actual controversies
involving rights which are legally demandable and enforceable, but also the duty to determine whether or not there has been grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government.12 The
courts, as guardians of the Constitution, have the inherent authority to determine whether a statute enacted by the legislature
transcends the limit imposed by the fundamental law. Where a statute violates the Constitution, it is not only the right but the duty of the
judiciary to declare such act as unconstitutional and void. 13 We held in the recent case of Tanada v. Angara:14

xxx xxx xxx

In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no doubt
raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. The question thus posed is
judicial rather than political. The duty to adjudicate remains to assure that the supremacy of the Constitution is upheld. Once a
controversy as to the application or interpretation of a constitutional provision is raised before this Court, it becomes a legal
issue which the Court is bound by constitutional mandate to decide.

Even a sideglance at the petitions will reveal that petitioners have raised constitutional issues which deserve the resolution of this Court
in view of their seriousness and their value as precedents. Our statement of facts and definition of issues clearly show that petitioners
are assailing R.A. No. 8180 because its provisions infringe the Constitution and not because the law lacks wisdom. The principle of
separation of power mandates that challenges on the constitutionality of a law should be resolved in our courts of justice while doubts
on the wisdom of a law should be debated in the halls of Congress. Every now and then, a law may be denounced in court both as
bereft of wisdom and constitutionally infirmed. Such denunciation will not deny this Court of its jurisdiction to resolve the constitutionality
of the said law while prudentially refusing to pass on its wisdom.
The effort of respondents to question the locus standi of petitioners must also fall on barren ground. In language too lucid to be
misunderstood, this Court has brightlined its liberal stance on a petitioner's locus standi where the petitioner is able to craft an issue of
transcendental significance to the people.15 In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan,16 we stressed:

xxx xxx xxx

Objections to taxpayers' suit for lack of sufficient personality, standing or interest are, however, in the main procedural matters.
Considering the importance to the public of the cases at bar, and in keeping with the Court's duty, under the 1987 Constitution,
to determine whether or not the other branches of government have kept themselves within the limits of the Constitution and
the laws and that they have not abused the discretion given to them, the Court has brushed aside technicalities of procedure
and has taken cognizance of these petitions.

There is not a dot of disagreement between the petitioners and the respondents on the far reaching importance of the validity of RA No.
8180 deregulating our downstream oil industry. Thus, there is no good sense in being hypertechnical on the standing of petitioners for
they pose issues which are significant to our people and which deserve our forthright resolution.

We shall now track down the substantive issues. In G.R. No. 124360 where petitioner is Senator Tatad, it is contended that section 5(b)
of R.A. No. 8180 on tariff differential violates the provision17 of the Constitution requiring every law to have only one subject which
should be expressed in its title. We do not concur with this contention. As a policy, this Court has adopted a liberal construction of the
one title — one subject rule. We have consistently ruled18 that the title need not mirror, fully index or catalogue all contents and minute
details of a law. A law having a single general subject indicated in the title may contain any number of provisions, no matter how diverse
they may be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in furtherance of such
subject by providing for the method and means of carrying out the general subject. 19 We hold that section 5(b) providing for tariff
differential is germane to the subject of R.A. No. 8180 which is the deregulation of the downstream oil industry. The section is supposed
to sway prospective investors to put up refineries in our country and make them rely less on imported petroleum. 20 We shall, however,
return to the validity of this provision when we examine its blocking effect on new entrants to the oil market.

We shall now slide to the substantive issues in G.R. No. 127867. Petitioners assail section 15 of R.A. No. 8180 which fixes the time
frame for the full deregulation of the downstream oil industry. We restate its pertinent portion for emphasis, viz.:

Sec. 15. Implementation of Full Deregulation — Pursuant to section 5(e) of Republic Act No. 7638, the DOE shall, upon
approval of the President, implement the full deregulation of the downstream oil industry not later than March 1997. As far as
practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world market
are declining and when the exchange rate of the peso in relation to the US dollar is stable . . .

Petitioners urge that the phrases "as far as practicable," "decline of crude oil prices in the world market" and "stability of the peso
exchange rate to the US dollar" are ambivalent, unclear and inconcrete in meaning. They submit that they do not provide the
"determinate or determinable standards" which can guide the President in his decision to fully deregulate the downstream oil industry.
In addition, they contend that E.O. No. 392 which advanced the date of full deregulation is void for it illegally considered the depletion of
the OPSF fund as a factor.

The power of Congress to delegate the execution of laws has long been settled by this Court. As early as 1916 in Compania General
de Tabacos de Filipinas vs. The Board of Public Utility Commissioners,21 this Court thru, Mr. Justice Moreland, held that "the true
distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and
conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the
latter no valid objection can be made." Over the years, as the legal engineering of men's relationship became more difficult, Congress
has to rely more on the practice of delegating the execution of laws to the executive and other administrative agencies. Two tests have
been developed to determine whether the delegation of the power to execute laws does not involve the abdication of the power to make
law itself. We delineated the metes and bounds of these tests in Eastern Shipping Lines, Inc. VS. POEA,22 thus:

There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz: the completeness
test and the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves
the legislative such that when it reaches the delegate the only thing he will have to do is to enforce it. Under the sufficient
standard test, there must be adequate guidelines or limitations in the law to map out the boundaries of the delegate's authority
and prevent the delegation from running riot. Both tests are intended to prevent a total transference of legislative authority to
the delegate, who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative.

The validity of delegating legislative power is now a quiet area in our constitutional landscape. As sagely observed, delegation of
legislative power has become an inevitability in light of the increasing complexity of the task of government. Thus, courts bend as far
back as possible to sustain the constitutionality of laws which are assailed as unduly delegating legislative powers. Citing Hirabayashi
v. United States23 as authority, Mr. Justice Isagani A. Cruz states "that even if the law does not expressly pinpoint the standard, the
courts will bend over backward to locate the same elsewhere in order to spare the statute, if it can, from constitutional infirmity." 24

Given the groove of the Court's rulings, the attempt of petitioners to strike down section 15 on the ground of undue delegation of
legislative power cannot prosper. Section 15 can hurdle both the completeness test and the sufficient standard test. It will be noted that
Congress expressly provided in R.A. No. 8180 that full deregulation will start at the end of March 1997, regardless of the occurrence of
any event. Full deregulation at the end of March 1997 is mandatory and the Executive has no discretion to postpone it for any purported
reason. Thus, the law is complete on the question of the final date of full deregulation. The discretion given to the President is to
advance the date of full deregulation before the end of March 1997. Section 15 lays down the standard to guide the judgment of the
President — he is to time it as far as practicable when the prices of crude oil and petroleum products in the world market
are declining and when the exchange rate of the peso in relation to the US dollar is stable.

Petitioners contend that the words "as far as practicable," "declining" and "stable" should have been defined in R.A. No. 8180 as they
do not set determinate or determinable standards. The stubborn submission deserves scant consideration. The dictionary meanings of
these words are well settled and cannot confuse men of reasonable intelligence. Webster defines "practicable" as meaning possible to
practice or perform, "decline" as meaning to take a downward direction, and "stable" as meaning firmly established. 25 The fear of
petitioners that these words will result in the exercise of executive discretion that will run riot is thus groundless. To be sure, the Court
has sustained the validity of similar, if not more general standards in other cases. 26

It ought to follow that the argument that E.O. No. 392 is null and void as it was based on indeterminate standards set by R.A. 8180 must
likewise fail. If that were all to the attack against the validity of E.O. No. 392, the issue need not further detain our discourse. But
petitioners further posit the thesis that the Executive misapplied R.A. No. 8180 when it considered the depletion of the OPSF fund as a
factor in fully deregulating the downstream oil industry in February 1997. A perusal of section 15 of R.A. No. 8180 will readily reveal that
it only enumerated two factors to be considered by the Department of Energy and the Office of the President, viz.: (1) the time when the
prices of crude oil and petroleum products in the world market are declining, and (2) the time when the exchange rate of the peso in
relation to the US dollar is stable. Section 15 did not mention the depletion of the OPSF fund as a factor to be given weight by the
Executive before ordering full deregulation. On the contrary, the debates in Congress will show that some of our legislators wanted to
impose as a pre-condition to deregulation a showing that the OPSF fund must not be in deficit.27 We therefore hold that the Executive
department failed to follow faithfully the standards set by R.A. No. 8180 when it considered the extraneous factor of depletion of the
OPSF fund. The misappreciation of this extra factor cannot be justified on the ground that the Executive department considered anyway
the stability of the prices of crude oil in the world market and the stability of the exchange rate of the peso to the dollar. By considering
another factor to hasten full deregulation, the Executive department rewrote the standards set forth in R.A. 8180. The Executive is
bereft of any right to alter either by subtraction or addition the standards set in R.A. No. 8180 for it has no power to make laws. To cede
to the Executive the power to make law is to invite tyranny, indeed, to transgress the principle of separation of powers. The exercise of
delegated power is given a strict scrutiny by courts for the delegate is a mere agent whose action cannot infringe the terms of agency.
In the cases at bar, the Executive co-mingled the factor of depletion of the OPSF fund with the factors of decline of the price of crude oil
in the world market and the stability of the peso to the US dollar. On the basis of the text of E.O. No. 392, it is impossible to determine
the weight given by the Executive department to the depletion of the OPSF fund. It could well be the principal consideration for the early
deregulation. It could have been accorded an equal significance. Or its importance could be nil. In light of this uncertainty, we rule that
the early deregulation under E.O. No. 392 constitutes a misapplication of R.A. No. 8180.

We now come to grips with the contention that some provisions of R.A. No. 8180 violate section 19 of Article XII of the 1987
Constitution. These provisions are:

(1) Section 5 (b) which states — "Any law to the contrary notwithstanding and starting with the effectivity of this Act, tariff duty
shall be imposed and collected on imported crude oil at the rate of three percent (3%) and imported refined petroleum
products at the rate of seven percent (7%) except fuel oil and LPG, the rate for which shall be the same as that for imported
crude oil. Provided, that beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum products shall
be the same. Provided, further, that this provision may be amended only by an Act of Congress."

(2) Section 6 which states — "To ensure the security and continuity of petroleum crude and products supply, the DOE shall
require the refiners and importers to maintain a minimum inventory equivalent to ten percent (10%) of their respective annual
sales volume or forty (40) days of supply, whichever is lower," and

(3) Section 9 (b) which states — "To ensure fair competition and prevent cartels and monopolies in the downstream oil
industry, the following acts shall be prohibited:

xxx xxx xxx

(b) Predatory pricing which means selling or offering to sell any product at a price unreasonably below the
industry average cost so as to attract customers to the detriment of competitors.

On the other hand, section 19 of Article XII of the Constitution allegedly violated by the aforestated provisions of R.A. No. 8180
mandates: "The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or
unfair competition shall be allowed."

A monopoly is a privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right or power
to carry on a particular business or trade, manufacture a particular article, or control the sale or the whole supply of a particular
commodity. It is a form of market structure in which one or only a few firms dominate the total sales of a product or service. 28 On the
other hand, a combination in restraint of trade is an agreement or understanding between two or more persons, in the form of a
contract, trust, pool, holding company, or other form of association, for the purpose of unduly restricting competition, monopolizing trade
and commerce in a certain commodity, controlling its, production, distribution and price, or otherwise interfering with freedom of trade
without statutory authority.29 Combination in restraint of trade refers to the means while monopoly refers to the end.30

Article 186 of the Revised Penal Code and Article 28 of the New Civil Code breathe life to this constitutional policy. Article 186 of the
Revised Penal Code penalizes monopolization and creation of combinations in restraint of
trade, 31 while Article 28 of the New Civil Code makes any person who shall engage in unfair competition liable for damages. 32

Respondents aver that sections 5(b), 6 and 9(b) implement the policies and objectives of R.A. No. 8180. They explain that the 4% tariff
differential is designed to encourage new entrants to invest in refineries. They stress that the inventory requirement is meant to
guaranty continuous domestic supply of petroleum and to discourage fly-by-night operators. They also submit that the prohibition
against predatory pricing is intended to protect prospective entrants. Respondents manifested to the Court that new players have
entered the Philippines after deregulation and have now captured 3% — 5% of the oil market.

The validity of the assailed provisions of R.A. No. 8180 has to be decided in light of the letter and spirit of our Constitution, especially
section 19, Article XII. Beyond doubt, the Constitution committed us to the free enterprise system but it is a system impressed with its
own distinctness. Thus, while the Constitution embraced free enterprise as an economic creed, it did not prohibit per se the operation of
monopolies which can, however, be regulated in the public interest.33 Thus too, our free enterprise system is not based on a market of
pure and unadulterated competition where the State pursues a strict hands-off policy and follows the let-the-devil devour the hindmost
rule. Combinations in restraint of trade and unfair competitions are absolutely proscribed and the proscription is directed both against
the State as well as the private sector.34 This distinct free enterprise system is dictated by the need to achieve the goals of our national
economy as defined by section 1, Article XII of the Constitution which are: more equitable distribution of opportunities, income and
wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an
expanding productivity as the key to raising the quality of life for all, especially the underprivileged. It also calls for the State to protect
Filipino enterprises against unfair competition and trade practices.

Section 19, Article XII of our Constitution is anti-trust in history and in spirit. It espouses competition. The desirability of competition is
the reason for the prohibition against restraint of trade, the reason for the interdiction of unfair competition, and the reason for regulation
of unmitigated monopolies. Competition is thus the underlying principle of section 19, Article XII of our Constitution which cannot be
violated by R.A. No. 8180. We subscribe to the observation of Prof. Gellhorn that the objective of anti-trust law is "to assure a
competitive economy, based upon the belief that through competition producers will strive to satisfy consumer wants at the lowest price
with the sacrifice of the fewest resources. Competition among producers allows consumers to bid for goods and services, and thus
matches their desires with society's opportunity costs." 35 He adds with appropriateness that there is a reliance upon "the operation of
the 'market' system (free enterprise) to decide what shall be produced, how resources shall be allocated in the production process, and
to whom the various products will be distributed. The market system relies on the consumer to decide what and how much shall be
produced, and on competition, among producers to determine who will manufacture it."

Again, we underline in scarlet that the fundamental principle espoused by section 19, Article XII of the Constitution is competition for it
alone can release the creative forces of the market. But the competition that can unleash these creative forces is competition that is
fighting yet is fair. Ideally, this kind of competition requires the presence of not one, not just a few but several players. A market
controlled by one player (monopoly) or dominated by a handful of players (oligopoly) is hardly the market where honest-to-goodness
competition will prevail. Monopolistic or oligopolistic markets deserve our careful scrutiny and laws which barricade the entry points of
new players in the market should be viewed with suspicion.

Prescinding from these baseline propositions, we shall proceed to examine whether the provisions of R.A. No. 8180 on tariff differential,
inventory reserves, and predatory prices imposed substantial barriers to the entry and exit of new players in our downstream oil
industry. If they do, they have to be struck down for they will necessarily inhibit the formation of a truly competitive market. Contrariwise,
if they are insignificant impediments, they need not be stricken down.

In the cases at bar, it cannot be denied that our downstream oil industry is operated and controlled by an oligopoly, a foreign oligopoly
at that. Petron, Shell and Caltex stand as the only major league players in the oil market. All other players belong to the lilliputian
league. As the dominant players, Petron, Shell and Caltex boast of existing refineries of various capacities. The tariff differential of 4%
therefore works to their immense benefit. Yet, this is only one edge of the tariff differential. The other edge cuts and cuts deep in the
heart of their competitors. It erects a high barrier to the entry of new players. New players that intend to equalize the market power of
Petron, Shell and Caltex by building refineries of their own will have to spend billions of pesos. Those who will not build refineries but
compete with them will suffer the huge disadvantage of increasing their product cost by 4%. They will be competing on an uneven field.
The argument that the 4% tariff differential is desirable because it will induce prospective players to invest in refineries puts the cart
before the horse. The first need is to attract new players and they cannot be attracted by burdening them with heavy disincentives.
Without new players belonging to the league of Petron, Shell and Caltex, competition in our downstream oil industry is an idle dream.

The provision on inventory widens the balance of advantage of Petron, Shell and Caltex against prospective new players. Petron, Shell
and Caltex can easily comply with the inventory requirement of R.A. No. 8180 in view of their existing storage facilities. Prospective
competitors again will find compliance with this requirement difficult as it will entail a prohibitive cost. The construction cost of storage
facilities and the cost of inventory can thus scare prospective players. Their net effect is to further occlude the entry points of new
players, dampen competition and enhance the control of the market by the three (3) existing oil companies.
Finally, we come to the provision on predatory pricing which is defined as ". . . selling or offering to sell any product at a price
unreasonably below the industry average cost so as to attract customers to the detriment of competitors." Respondents contend that
this provision works against Petron, Shell and Caltex and protects new entrants. The ban on predatory pricing cannot be analyzed in
isolation. Its validity is interlocked with the barriers imposed by R.A. No. 8180 on the entry of new players. The inquiry should be to
determine whether predatory pricing on the part of the dominant oil companies is encouraged by the provisions in the law blocking the
entry of new players. Text-writer
Hovenkamp,36 gives the authoritative answer and we quote:

xxx xxx xxx

The rationale for predatory pricing is the sustaining of losses today that will give a firm monopoly profits in the future. The
monopoly profits will never materialize, however, if the market is flooded with new entrants as soon as the successful predator
attempts to raise its price. Predatory pricing will be profitable only if the market contains significant barriers to new entry.

As aforediscsussed, the 4% tariff differential and the inventory requirement are significant barriers which discourage new players to
enter the market. Considering these significant barriers established by R.A. No. 8180 and the lack of players with the comparable clout
of PETRON, SHELL and CALTEX, the temptation for a dominant player to engage in predatory pricing and succeed is a chilling reality.
Petitioners' charge that this provision on predatory pricing is anti-competitive is not without reason.

Respondents belittle these barriers with the allegation that new players have entered the market since deregulation. A scrutiny of the
list of the alleged new players will, however, reveal that not one belongs to the class and category of PETRON, SHELL and CALTEX.
Indeed, there is no showing that any of these new players intends to install any refinery and effectively compete with these dominant oil
companies. In any event, it cannot be gainsaid that the new players could have been more in number and more impressive in might if
the illegal entry barriers in R.A. No. 8180 were not erected.

We come to the final point. We now resolve the total effect of the untimely deregulation, the imposition of 4% tariff differential on
imported crude oil and refined petroleum products, the requirement of inventory and the prohibition on predatory pricing on the
constitutionality of R.A. No. 8180. The question is whether these offending provisions can be individually struck down without
invalidating the entire R.A. No. 8180. The ruling case law is well stated by author Agpalo,37 viz.:

xxx xxx xxx

The general rule is that where part of a statute is void as repugnant to the Constitution, while another part is valid, the valid
portion, if separable from the invalid, may stand and be enforced. The presence of a separability clause in a statute creates
the presumption that the legislature intended separability, rather than complete nullity of the statute. To justify this result, the
valid portion must be so far independent of the invalid portion that it is fair to presume that the legislature would have enacted
it by itself if it had supposed that it could not constitutionally enact the other. Enough must remain to make a complete,
intelligible and valid statute, which carries out the legislative intent. . . .

The exception to the general rule is that when the parts of a statute are so mutually dependent and connected, as conditions,
considerations, inducements, or compensations for each other, as to warrant a belief that the legislature intended them as a
whole, the nullity of one part will vitiate the rest. In making the parts of the statute dependent, conditional, or connected with
one another, the legislature intended the statute to be carried out as a whole and would not have enacted it if one part is void,
in which case if some parts are unconstitutional, all the other provisions thus dependent, conditional, or connected must fall
with them.

R.A. No. 8180 contains a separability clause. Section 23 provides that "if for any reason, any section or provision of this Act is declared
unconstitutional or invalid, such parts not affected thereby shall remain in full force and effect." This separability clause notwithstanding,
we hold that the offending provisions of R.A. No. 8180 so permeate its essence that the entire law has to be struck down. The
provisions on tariff differential, inventory and predatory pricing are among the principal props of R.A. No. 8180. Congress could not
have deregulated the downstream oil industry without these provisions. Unfortunately, contrary to their intent, these provisions on tariff
differential, inventory and predatory pricing inhibit fair competition, encourage monopolistic power and interfere with the free interaction
of market forces. R.A. No. 8180 needs provisions to vouchsafe free and fair competition. The need for these vouchsafing provisions
cannot be overstated. Before deregulation, PETRON, SHELL and CALTEX had no real competitors but did not have a free run of the
market because government controls both the pricing and non-pricing aspects of the oil industry. After deregulation, PETRON, SHELL
and CALTEX remain unthreatened by real competition yet are no longer subject to control by government with respect to their pricing
and non-pricing decisions. The aftermath of R.A. No. 8180 is a deregulated market where competition can be corrupted and where
market forces can be manipulated by oligopolies.

The fall out effects of the defects of R.A. No. 8180 on our people have not escaped Congress. A lot of our leading legislators have
come out openly with bills seeking the repeal of these odious and offensive provisions in R.A. No. 8180. In the Senate, Senator Freddie
Webb has filed S.B. No. 2133 which is the result of the hearings conducted by the Senate Committee on Energy. The hearings
revealed that (1) there was a need to level the playing field for the new entrants in the downstream oil industry, and (2) there was no
law punishing a person for selling petroleum products at unreasonable prices. Senator Alberto G. Romulo also filed S.B. No. 2209
abolishing the tariff differential beginning January 1, 1998. He declared that the amendment ". . . would mean that instead of just three
(3) big oil companies there will be other major oil companies to provide more competitive prices for the market and the consuming
public." Senator Heherson T . Alvarez, one of the principal proponents of R.A. No. 8180, also filed S.B. No. 2290 increasing the penalty
for violation of its section 9. It is his opinion as expressed in the explanatory note of the bill that the present oil companies are engaged
in cartelization despite R.A. No. 8180, viz,:

xxx xxx xxx

Since the downstream oil industry was fully deregulated in February 1997, there have been eight (8) fuel price adjustments
made by the three oil majors, namely: Caltex Philippines, Inc.; Petron Corporation; and Pilipinas Shell Petroleum Corporation.
Very noticeable in the price adjustments made, however, is the uniformity in the pump prices of practically all petroleum
products of the three oil companies. This, despite the fact, that their selling rates should be determined by a combination of
any of the following factors: the prevailing peso-dollar exchange rate at the time payment is made for crude purchases,
sources of crude, and inventory levels of both crude and refined petroleum products. The abovestated factors should have
resulted in different, rather than identical prices.

The fact that the three (3) oil companies' petroleum products are uniformly priced suggests collusion, amounting to
cartelization, among Caltex Philippines, Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation to fix the prices of
petroleum products in violation of paragraph (a), Section 9 of R.A. No. 8180.

To deter this pernicious practice and to assure that present and prospective players in the downstream oil industry conduct
their business with conscience and propriety, cartel-like activities ought to be severely penalized.

Senator Francisco S. Tatad also filed S.B. No. 2307 providing for a uniform tariff rate on imported crude oil and refined petroleum
products. In the explanatory note of the bill, he declared in no uncertain terms that ". . . the present set-up has raised serious public
concern over the way the three oil companies have uniformly adjusted the prices of oil in the country, an indication of a possible
existence of a cartel or a cartel-like situation within the downstream oil industry. This situation is mostly attributed to the foregoing
provision on tariff differential, which has effectively discouraged the entry of new players in the downstream oil industry."

In the House of Representatives, the moves to rehabilitate R.A. No. 8180 are equally feverish. Representative Leopoldo E. San
Buenaventura has filed H.B. No. 9826 removing the tariff differential for imported crude oil and imported refined petroleum products. In
the explanatory note of the bill, Rep. Buenaventura explained:

xxx xxx xxx

As we now experience, this difference in tariff rates between imported crude oil and imported refined petroleum
products, unwittingly provided a built-in-advantage for the three existing oil refineries in the country and eliminating competition
which is a must in a free enterprise economy. Moreover, it created a disincentive for other players to engage even initially in
the importation and distribution of refined petroleum products and ultimately in the putting up of refineries. This tariff differential
virtually created a monopoly of the downstream oil industry by the existing three oil companies as shown by their uniform and
capricious pricing of their products since this law took effect, to the great disadvantage of the consuming public.

Thus, instead of achieving the desired effects of deregulation, that of free enterprise and a level playing field in the
downstream oil industry, R.A. 8180 has created an environment conducive to cartelization, unfavorable, increased, unrealistic
prices of petroleum products in the country by the three existing refineries.

Representative Marcial C. Punzalan, Jr., filed H.B. No. 9981 to prevent collusion among the present oil companies by strengthening the
oversight function of the government, particularly its ability to subject to a review any adjustment in the prices of gasoline and other
petroleum products. In the explanatory note of the bill, Rep. Punzalan, Jr., said:

xxx xxx xxx

To avoid this, the proposed bill seeks to strengthen the oversight function of government, particularly its ability to review the
prices set for gasoline and other petroleum products. It grants the Energy Regulatory Board (ERB) the authority to review
prices of oil and other petroleum products, as may be petitioned by a person, group or any entity, and to subsequently compel
any entity in the industry to submit any and all documents relevant to the imposition of new prices. In cases where the Board
determines that there exist collusion, economic conspiracy, unfair trade practice, profiteering and/or overpricing, it may take
any step necessary to protect the public, including the readjustment of the prices of petroleum products. Further, the Board
may also impose the fine and penalty of imprisonment, as prescribed in Section 9 of R.A. 8180, on any person or entity from
the oil industry who is found guilty of such prohibited acts.

By doing all of the above, the measure will effectively provide Filipino consumers with a venue where their grievances can be
heard and immediately acted upon by government.

Thus, this bill stands to benefit the Filipino consumer by making the price-setting process more transparent and making it
easier to prosecute those who perpetrate such prohibited acts as collusion, overpricing, economic conspiracy and unfair trade.
Representative Sergio A.F . Apostol filed H.B. No. 10039 to remedy an omission in R.A. No. 8180 where there is no agency in
government that determines what is "reasonable" increase in the prices of oil products. Representative Dente O. Tinga, one of
the principal sponsors of R.A. No. 8180, filed H.B. No. 10057 to strengthen its anti-trust provisions. He elucidated in its explanatory
note:

xxx xxx xxx

The definition of predatory pricing, however, needs to be tightened up particularly with respect to the definitive benchmark
price and the specific anti-competitive intent. The definition in the bill at hand which was taken from the Areeda-Turner test in
the United States on predatory pricing resolves the questions. The definition reads, "Predatory pricing means selling or offering
to sell any oil product at a price below the average variable cost for the purpose of destroying competition, eliminating a
competitor or discouraging a competitor from entering the market."

The appropriate actions which may be resorted to under the Rules of Court in conjunction with the oil deregulation law are
adequate. But to stress their availability and dynamism, it is a good move to incorporate all the remedies in the law itself. Thus,
the present bill formalizes the concept of government intervention and private suits to address the problem of antitrust
violations. Specifically, the government may file an action to prevent or restrain any act of cartelization or predatory pricing,
and if it has suffered any loss or damage by reason of the antitrust violation it may recover damages. Likewise, a private
person or entity may sue to prevent or restrain any such violation which will result in damage to his business or property, and if
he has already suffered damage he shall recover treble damages. A class suit may also be allowed.

To make the DOE Secretary more effective in the enforcement of the law, he shall be given additional powers to gather
information and to require reports.

Representative Erasmo B. Damasing filed H.B. No. 7885 and has a more unforgiving view of R.A. No. 8180. He wants it completely
repealed. He explained:

xxx xxx xxx

Contrary to the projections at the time the bill on the Downstream Oil Industry Deregulation was discussed and debated upon
in the plenary session prior to its approval into law, there aren't any new players or investors in the oil industry. Thus, resulting
in practically a cartel or monopoly in the oil industry by the three (3) big oil companies, Caltex, Shell and Petron. So much so,
that with the deregulation now being partially implemented, the said oil companies have succeeded in increasing the prices of
most of their petroleum products with little or no interference at all from the government. In the month of August, there was an
increase of Fifty centavos (50¢) per liter by subsidizing the same with the OPSF, this is only temporary as in March 1997, or a
few months from now, there will be full deregulation (Phase II) whereby the increase in the prices of petroleum products will be
fully absorbed by the consumers since OPSF will already be abolished by then. Certainly, this would make the lives of our
people, especially the unemployed ones, doubly difficult and unbearable.

The much ballyhooed coming in of new players in the oil industry is quite remote considering that these prospective investors
cannot fight the existing and well established oil companies in the country today, namely, Caltex, Shell and Petron. Even if
these new players will come in, they will still have no chance to compete with the said three (3) existing big oil companies
considering that there is an imposition of oil tariff differential of 4% between importation of crude oil by the said oil refineries
paying only 3% tariff rate for the said importation and 7% tariff rate to be paid by businessmen who have no oil refineries in the
Philippines but will import finished petroleum/oil products which is being taxed with 7% tariff rates.

So, if only to help the many who are poor from further suffering as a result of unmitigated increase in oil products due to
deregulation, it is a must that the Downstream Oil Industry Deregulation Act of 1996, or R.A. 8180 be repealed completely.

Various resolutions have also been filed in the Senate calling for an immediate and comprehensive review of R.A. No. 8180 to prevent
the downpour of its ill effects on the people. Thus, S. Res. No. 574 was filed by Senator Gloria M. Macapagal entitled Resolution
"Directing the Committee on Energy to Inquire Into The Proper Implementation of the Deregulation of the Downstream Oil Industry and
Oil Tax Restructuring As Mandated Under R.A. Nos. 8180 and 8184, In Order to Make The Necessary Corrections In the Apparent
Misinterpretation Of The Intent And Provision Of The Laws And Curb The Rising Tide Of Disenchantment Among The Filipino
Consumers And Bring About The Real Intentions And Benefits Of The Said Law." Senator Blas P. Ople filed S. Res. No. 664 entitled
resolution "Directing the Committee on Energy To Conduct An Inquiry In Aid Of Legislation To Review The Government's Oil
Deregulation Policy In Light Of The Successive Increases In Transportation, Electricity And Power Rates, As well As Of Food And
Other Prime Commodities And Recommend Appropriate Amendments To Protect The Consuming Public." Senator Ople observed:

xxx xxx xxx

WHEREAS, since the passage of R.A. No. 8180, the Energy Regulatory Board (ERB) has imposed successive increases in oil
prices which has triggered increases in electricity and power rates, transportation fares, as well as in prices of food and other
prime commodities to the detriment of our people, particularly the poor;
 WHEREAS, the new players that were expected to compete with the oil cartel-Shell, Caltex and Petron-have not come in;

WHEREAS, it is imperative that a review of the oil deregulation policy be made to consider appropriate amendments to the
existing law such as an extension of the transition phase before full deregulation in order to give the competitive market
enough time to develop;

WHEREAS, the review can include the advisability of providing some incentives in order to attract the entry of new oil
companies to effect a dynamic competitive market;

WHEREAS, it may also be necessary to defer the setting up of the institutional framework for full deregulation of the oil
industry as mandated under Executive Order No. 377 issued by President Ramos last October 31, 1996 . . .

Senator Alberto G. Romulo filed S. Res. No. 769 entitled resolution "Directing the Committees on Energy and Public Services In Aid Of
Legislation To Assess The Immediate Medium And Long Term Impact of Oil Deregulation On Oil Prices And The Economy." Among the
reasons for the resolution is the finding that "the requirement of a 40-day stock inventory effectively limits the entry of other oil firms in
the market with the consequence that instead of going down oil prices will rise."

Parallel resolutions have been filed in the House of Representatives. Representative Dante O. Tinga filed H. Res. No. 1311 "Directing
The Committee on Energy To Conduct An Inquiry, In Aid of Legislation, Into The Pricing Policies And Decisions Of The Oil Companies
Since The Implementation of Full Deregulation Under the Oil Deregulation Act (R.A. No. 8180) For the Purpose of Determining In the
Context Of The Oversight Functions Of Congress Whether The Conduct Of The Oil Companies, Whether Singly Or Collectively,
Constitutes Cartelization Which Is A Prohibited Act Under R.A. No. 8180, And What Measures Should Be Taken To Help Ensure The
Successful Implementation Of The Law In Accordance With Its Letter And Spirit, Including Recommending Criminal Prosecution Of the
Officers Concerned Of the Oil Companies If Warranted By The Evidence, And For Other Purposes." Representatives Marcial
C. Punzalan, Jr. Dante O. Tinga and Antonio E. Bengzon III filed H.R. No. 894 directing the House Committee on Energy to inquire into
the proper implementation of the deregulation of the downstream oil industry. House Resolution No. 1013 was also filed
by Representatives Edcel C. Lagman, Enrique T . Garcia, Jr. and Joker P. Arroyo urging the President to immediately suspend the
implementation of E.O. No. 392.

In recent memory there is no law enacted by the legislature afflicted with so much constitutional deformities as R.A. No. 8180. Yet, R.A.
No. 8180 deals with oil, a commodity whose supply and price affect the ebb and flow of the lifeblood of the nation. Its shortage of supply
or a slight, upward spiral in its price shakes our economic foundation. Studies show that the areas most impacted by the movement of
oil are food manufacture, land transport, trade, electricity and water. 38 At a time when our economy is in a dangerous downspin, the
perpetuation of R.A. No. 8180 threatens to multiply the number of our people with bent backs and begging bowls. R.A. No. 8180 with its
anti-competition provisions cannot be allowed by this Court to stand even while Congress is working to remedy its defects.

The Court, however, takes note of the plea of PETRON, SHELL and CALTEX to lift our restraining order to enable them to adjust
upward the price of petroleum and petroleum products in view of the plummeting value of the peso. Their plea, however, will now have
to be addressed to the Energy Regulatory Board as the effect of the declaration of unconstitutionality of R.A. No. 8180 is to revive the
former laws it repealed.39 The length of our return to the regime of regulation depends on Congress which can fasttrack the writing of a
new law on oil deregulation in accord with the Constitution.

With this Decision, some circles will chide the Court for interfering with an economic decision of Congress. Such criticism is charmless
for the Court is annulling R.A. No. 8180 not because it disagrees with deregulation as an economic policy but because as cobbled by
Congress in its present form, the law violates the Constitution. The right call therefor should be for Congress to write a new oil
deregulation law that conforms with the Constitution and not for this Court to shirk its duty of striking down a law that offends the
Constitution. Striking down R.A. No. 8180 may cost losses in quantifiable terms to the oil oligopolists. But the loss in tolerating the
tampering of our Constitution is not quantifiable in pesos and centavos. More worthy of protection than the supra-normal profits of
private corporations is the sanctity of the fundamental principles of the Constitution. Indeed when confronted by a law violating the
Constitution, the Court has no option but to strike it down dead. Lest it is missed, the Constitution is a covenant that grants and
guarantees both the political and economic rights of the people. The Constitution mandates this Court to be the guardian not only of the
people's political rights but their economic rights as well. The protection of the economic rights of the poor and the powerless is of
greater importance to them for they are concerned more with the exoterics of living and less with the esoterics of liberty. Hence, for as
long as the Constitution reigns supreme so long will this Court be vigilant in upholding the economic rights of our people especially from
the onslaught of the powerful. Our defense of the people's economic rights may appear heartless because it cannot be half-hearted.

IN VIEW WHEREOF, the petitions are granted. R.A. No. 8180 is declared unconstitutional and E.O. No. 372 void.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-23825 December 24, 1965

EMMANUEL PELAEZ, petitioner,

vs.
THE AUDITOR GENERAL, respondent.

Zulueta, Gonzales, Paculdo and Associates for petitioner.

Office of the Solicitor General for respondent.

CONCEPCION, J.:

During the period from September 4 to October 29, 1964 the President of the Philippines, purporting to act pursuant to Section 68 of the
Revised Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-three (33) municipalities
enumerated in the margin.1 Soon after the date last mentioned, or on November 10, 1964 petitioner Emmanuel Pelaez, as Vice
President of the Philippines and as taxpayer, instituted the present special civil action, for a writ of prohibition with preliminary
injunction, against the Auditor General, to restrain him, as well as his representatives and agents, from passing in audit any expenditure
of public funds in implementation of said executive orders and/or any disbursement by said municipalities.

Petitioner alleges that said executive orders are null and void, upon the ground that said Section 68 has been impliedly repealed by
Republic Act No. 2370 and constitutes an undue delegation of legislative power. Respondent maintains the contrary view and avers
that the present action is premature and that not all proper parties — referring to the officials of the new political subdivisions in
question — have been impleaded. Subsequently, the mayors of several municipalities adversely affected by the aforementioned
executive orders — because the latter have taken away from the former the barrios composing the new political subdivisions —
intervened in the case. Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando were allowed to and did appear
as amici curiae.

The third paragraph of Section 3 of Republic Act No. 2370, reads:

Barrios shall not be created or their boundaries altered nor their names changed except under the provisions of this Act or by
Act of Congress.

Pursuant to the first two (2) paragraphs of the same Section 3:

All barrios existing at the time of the passage of this Act shall come under the provisions hereof.

Upon petition of a majority of the voters in the areas affected, a new barrio may be created or the name of an existing one may
be changed by the provincial board of the province, upon recommendation of the council of the municipality or municipalities in
which the proposed barrio is stipulated. The recommendation of the municipal council shall be embodied in a resolution
approved by at least two-thirds of the entire membership of the said council: Provided, however, That no new barrio may be
created if its population is less than five hundred persons.

Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be created or their boundaries altered
nor their names changed" except by Act of Congress or of the corresponding provincial board "upon petition of a majority of the voters
in the areas affected" and the "recommendation of the council of the municipality or municipalities in which the proposed barrio is
situated." Petitioner argues, accordingly: "If the President, under this new law, cannot even create a barrio, can he create a municipality
which is composed of several barrios, since barrios are units of municipalities?"

Respondent answers in the affirmative, upon the theory that a new municipality can be created without creating new barrios, such as,
by placing old barrios under the jurisdiction of the new municipality. This theory overlooks, however, the main import of the petitioner's
argument, which is that the statutory denial of the presidential authority to create a new barrio implies a negation of the bigger power to
create municipalities, each of which consists of several barrios. The cogency and force of this argument is too obvious to be denied or
even questioned. Founded upon logic and experience, it cannot be offset except by a clear manifestation of the intent of Congress to
the contrary, and no such manifestation, subsequent to the passage of Republic Act No. 2379, has been brought to our attention.

Moreover, section 68 of the Revised Administrative Code, upon which the disputed executive orders are based, provides:
 The (Governor-General) President of the Philippines may by executive order define the boundary, or boundaries, of any
province, subprovince, municipality, [township] municipal district, or other political subdivision, and increase or diminish the
territory comprised therein, may divide any province into one or more subprovinces, separate any political division other than a
province, into such portions as may be required, merge any of such subdivisions or portions with another, name any new
subdivision so created, and may change the seat of government within any subdivision to such place therein as the public
welfare may require: Provided, That the authorization of the (Philippine Legislature) Congress of the Philippines shall first be
obtained whenever the boundary of any province or subprovince is to be defined or any province is to be divided into one or
more subprovinces. When action by the (Governor-General) President of the Philippines in accordance herewith makes
necessary a change of the territory under the jurisdiction of any administrative officer or any judicial officer, the (Governor-
General) President of the Philippines, with the recommendation and advice of the head of the Department having executive
control of such officer, shall redistrict the territory of the several officers affected and assign such officers to the new districts
so formed.

Upon the changing of the limits of political divisions in pursuance of the foregoing authority, an equitable distribution of the
funds and obligations of the divisions thereby affected shall be made in such manner as may be recommended by the (Insular
Auditor) Auditor General and approved by the (Governor-General) President of the Philippines.

Respondent alleges that the power of the President to create municipalities under this section does not amount to an undue delegation
of legislative power, relying upon Municipality of Cardona vs. Municipality of Binañgonan (36 Phil. 547), which, he claims, has settled it.
Such claim is untenable, for said case involved, not the creation of a new municipality, but a mere transfer of territory — from
an already existing municipality (Cardona) to another municipality (Binañgonan), likewise, existing at the time of and prior to said
transfer (See Gov't of the P.I. ex rel. Municipality of Cardona vs. Municipality, of Binañgonan [34 Phil. 518, 519-5201) — in
consequence of the fixing and definition, pursuant to Act No. 1748, of the common boundaries of two municipalities.

It is obvious, however, that, whereas the power to fix such common boundary, in order to avoid or settle conflicts of jurisdiction between
adjoining municipalities, may partake of an administrative nature — involving, as it does, the adoption of means and ways to carry into
effect the law creating said municipalities — the authority to create municipal corporations is essentially legislative in nature. In the
language of other courts, it is "strictly a legislative function" (State ex rel. Higgins vs. Aicklen, 119 S. 425, January 2, 1959) or "solely
and exclusively the exercise of legislative power" (Udall vs. Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of
Washington has put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405, 409), "municipal corporations are purely the
creatures of statutes."

Although1a Congress may delegate to another branch of the Government the power to fill in the details in the execution, enforcement or
administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in
itself — it must set forth therein the policy to be executed, carried out or implemented by the delegate 2 — and (b) fix a standard — the
limits of which are sufficiently determinate or determinable — to which the delegate must conform in the performance of his
functions.2a Indeed, without a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the
essence of every law; and, without the aforementioned standard, there would be no means to determine, with reasonable certainty,
whether the delegate has acted within or beyond the scope of his authority. 2b Hence, he could thereby arrogate upon himself the power,
not only to make the law, but, also — and this is worse — to unmake it, by adopting measures inconsistent with the end sought to be
attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and,
consequently, undermining the very foundation of our Republican system.

Section 68 of the Revised Administrative Code does not meet these well settled requirements for a valid delegation of the power to fix
the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President. Neither does
it give a standard sufficiently precise to avoid the evil effects above referred to. In this connection, we do not overlook the fact that,
under the last clause of the first sentence of Section 68, the President:

... may change the seat of the government within any subdivision to such place therein as the public welfare may require.

It is apparent, however, from the language of this clause, that the phrase "as the public welfare may require" qualified, not the clauses
preceding the one just quoted, but only the place to which the seat of the government may be transferred. This fact becomes more
apparent when we consider that said Section 68 was originally Section 1 of Act No. 1748,3 which provided that, "whenever in the
judgment of the Governor-General the public welfare requires, he may, by executive order," effect the changes enumerated therein (as
in said section 68), including the change of the seat of the government "to such place ... as the public interest requires." The opening
statement of said Section 1 of Act No. 1748 — which was not included in Section 68 of the Revised Administrative Code — governed
the time at which, or the conditions under which, the powers therein conferred could be exercised; whereas the last part of the first
sentence of said section referred exclusively to the place to which the seat of the government was to be transferred.

At any rate, the conclusion would be the same, insofar as the case at bar is concerned, even if we assumed that the phrase "as the
public welfare may require," in said Section 68, qualifies all other clauses thereof. It is true that in Calalang vs. Williams (70 Phil. 726)
and People vs. Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and "public interest," respectively, as sufficient
standards for a valid delegation of the authority to execute the law. But, the doctrine laid down in these cases — as all judicial
pronouncements — must be construed in relation to the specific facts and issues involved therein, outside of which they do not
constitute precedents and have no binding effect.4 The law construed in the Calalang case conferred upon the Director of Public Works,
with the approval of the Secretary of Public Works and Communications, the power to issue rules and regulations to promote safe
transit upon national roads and streets. Upon the other hand, the Rosenthal case referred to the authority of the Insular Treasurer,
under Act No. 2581, to issue and cancel certificates or permits for the sale of speculative securities. Both cases involved grants
to administrative officers of powers related to the exercise of their administrative functions, calling for the determination of questions
of fact.

Such is not the nature of the powers dealt with in section 68. As above indicated, the creation of municipalities, is not
an administrative function, but one which is essentially and eminently legislative in character. The question of whether or not "public
interest" demands the exercise of such power is not one of fact. it is "purely a legislative question "(Carolina-Virginia Coastal Highway
vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or a political question (Udall vs. Severn, 79 P. 2d. 347-349). As the
Supreme Court of Wisconsin has aptly characterized it, "the question as to whether incorporation is for the best interest of the
community in any case is emphatically a question of public policy and statecraft" (In re Village of North Milwaukee, 67 N.W. 1033, 1035-
1037).

For this reason, courts of justice have annulled, as constituting undue delegation of legislative powers, state laws granting the judicial
department, the power to determine whether certain territories should be annexed to a particular municipality (Udall vs. Severn, supra,
258-359); or vesting in a Commission the right to determine the plan and frame of government of proposed villages and what functions
shall be exercised by the same, although the powers and functions of the village are specifically limited by statute (In re Municipal
Charters, 86 Atl. 307-308); or conferring upon courts the authority to declare a given town or village incorporated, and designate its
metes and bounds, upon petition of a majority of the taxable inhabitants thereof, setting forth the area desired to be included in such
village (Territory ex rel Kelly vs. Stewart, 23 Pac. 405-409); or authorizing the territory of a town, containing a given area and
population, to be incorporated as a town, on certain steps being taken by the inhabitants thereof and on certain determination by a court
and subsequent vote of the inhabitants in favor thereof, insofar as the court is allowed to determine whether the lands embraced in the
petition "ought justly" to be included in the village, and whether the interest of the inhabitants will be promoted by such incorporation,
and to enlarge and diminish the boundaries of the proposed village "as justice may require" (In re Villages of North Milwaukee, 67 N.W.
1035-1037); or creating a Municipal Board of Control which shall determine whether or not the laying out, construction or operation of a
toll road is in the "public interest" and whether the requirements of the law had been complied with, in which case the board shall enter
an order creating a municipal corporation and fixing the name of the same (Carolina-Virginia Coastal Highway vs. Coastal Turnpike
Authority, 74 S.E. 2d. 310).

Insofar as the validity of a delegation of power by Congress to the President is concerned, the case of Schechter Poultry Corporation
vs. U.S. (79 L. Ed. 1570) is quite relevant to the one at bar. The Schechter case involved the constitutionality of Section 3 of the
National Industrial Recovery Act authorizing the President of the United States to approve "codes of fair competition" submitted to him
by one or more trade or industrial associations or corporations which "impose no inequitable restrictions on admission to membership
therein and are truly representative," provided that such codes are not designed "to promote monopolies or to eliminate or oppress
small enterprises and will not operate to discriminate against them, and will tend to effectuate the policy" of said Act. The Federal
Supreme Court held:

To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without precedent. It supplies no standards for any
trade, industry or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact
determined by appropriate administrative procedure. Instead of prescribing rules of conduct, it authorizes the making of codes
to prescribe them. For that legislative undertaking, Sec. 3 sets up no standards, aside from the statement of the general aims
of rehabilitation, correction and expansion described in Sec. 1. In view of the scope of that broad declaration, and of the nature
of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting
laws for the government of trade and industry throughout the country, is virtually unfettered. We think that the code making
authority thus conferred is an unconstitutional delegation of legislative power.

If the term "unfair competition" is so broad as to vest in the President a discretion that is "virtually unfettered." and, consequently,
tantamount to a delegation of legislative power, it is obvious that "public welfare," which has even a broader connotation, leads to the
same result. In fact, if the validity of the delegation of powers made in Section 68 were upheld, there would no longer be any legal
impediment to a statutory grant of authority to the President to do anything which, in his opinion, may be required by public welfare or
public interest. Such grant of authority would be a virtual abdication of the powers of Congress in favor of the Executive, and would
bring about a total collapse of the democratic system established by our Constitution, which it is the special duty and privilege of this
Court to uphold.

It may not be amiss to note that the executive orders in question were issued after the legislative bills for the creation of the
municipalities involved in this case had failed to pass Congress. A better proof of the fact that the issuance of said executive orders
entails the exercise of purely legislative functions can hardly be given.

Again, Section 10 (1) of Article VII of our fundamental law ordains:

The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all
local governments as may be provided by law, and take care that the laws be faithfully executed.

The power of control under this provision implies the right of the President to interfere in the exercise of such discretion as may be
vested by law in the officers of the executive departments, bureaus, or offices of the national government, as well as to act in lieu of
such officers. This power is denied by the Constitution to the Executive, insofar as local governments are concerned. With respect to
the latter, the fundamental law permits him to wield no more authority than that of checking whether said local governments or the
officers thereof perform their duties as provided by statutory enactments. Hence, the President cannot interfere with local governments,
so long as the same or its officers act Within the scope of their authority. He may not enact an ordinance which the municipal council
has failed or refused to pass, even if it had thereby violated a duty imposed thereto by law, although he may see to it that the
corresponding provincial officials take appropriate disciplinary action therefor. Neither may he vote, set aside or annul an ordinance
passed by said council within the scope of its jurisdiction, no matter how patently unwise it may be. He may not even suspend an
elective official of a regular municipality or take any disciplinary action against him, except on appeal from a decision of the
corresponding provincial board.5

Upon the other hand if the President could create a municipality, he could, in effect, remove any of its officials, by creating a new
municipality and including therein the barrio in which the official concerned resides, for his office would thereby become vacant. 6 Thus,
by merely brandishing the power to create a new municipality (if he had it), without actually creating it, he could compel local officials to
submit to his dictation, thereby, in effect, exercising over them the power of control denied to him by the Constitution.

Then, also, the power of control of the President over executive departments, bureaus or offices implies no more than the authority to
assume directly the functions thereof or to interfere in the exercise of discretion by its officials. Manifestly, such control does not include
the authority either to abolish an executive department or bureau, or to create a new one. As a consequence, the alleged power of the
President to create municipal corporations would necessarily connote the exercise by him of an authority even greater than that of
control which he has over the executive departments, bureaus or offices. In other words, Section 68 of the Revised Administrative Code
does not merely fail to comply with the constitutional mandate above quoted. Instead of giving the President less power over local
governments than that vested in him over the executive departments, bureaus or offices, it reverses the process and does the exact
opposite, by conferring upon him more power over municipal corporations than that which he has over said executive departments,
bureaus or offices.

In short, even if it did entail an undue delegation of legislative powers, as it certainly does, said Section 68, as part of the Revised
Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935,
which is utterly incompatible and inconsistent with said statutory enactment. 7

There are only two (2) other points left for consideration, namely, respondent's claim (a) that "not all the proper parties" — referring to
the officers of the newly created municipalities — "have been impleaded in this case," and (b) that "the present petition is premature."

As regards the first point, suffice it to say that the records do not show, and the parties do not claim, that the officers of any of said
municipalities have been appointed or elected and assumed office. At any rate, the Solicitor General, who has appeared on behalf of
respondent Auditor General, is the officer authorized by law "to act and represent the Government of the Philippines, its offices and
agents, in any official investigation, proceeding or matter requiring the services of a lawyer" (Section 1661, Revised Administrative
Code), and, in connection with the creation of the aforementioned municipalities, which involves a political, not proprietary, function,
said local officials, if any, are mere agents or representatives of the national government. Their interest in the case at bar has,
accordingly, been, in effect, duly represented.8

With respect to the second point, respondent alleges that he has not as yet acted on any of the executive order & in question and has
not intimated how he would act in connection therewith. It is, however, a matter of common, public knowledge, subject to judicial
cognizance, that the President has, for many years, issued executive orders creating municipal corporations and that the same have
been organized and in actual operation, thus indicating, without peradventure of doubt, that the expenditures incidental thereto have
been sanctioned, approved or passed in audit by the General Auditing Office and its officials. There is no reason to believe, therefore,
that respondent would adopt a different policy as regards the new municipalities involved in this case, in the absence of an allegation to
such effect, and none has been made by him.

WHEREFORE, the Executive Orders in question are hereby declared null and void ab initio and the respondent permanently restrained
from passing in audit any expenditure of public funds in implementation of said Executive Orders or any disbursement by the
municipalities above referred to. It is so ordered.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur.

Zaldivar, J., took no part.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 96409 February 14, 1992

CITIZEN J. ANTONIO M. CARPIO, petitioner,

vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF LOCAL GOVERNMENTS, THE SECRETARY OF NATIONAL DEFENSE
and THE NATIONAL TREASURER, respondents.

PARAS, J.:

At the very outset, it should be well to set forth the constitutional provision that is at the core of the controversy now confronting us,
thus:

Article XVI, Section 6:

The State shall establish and maintain one police force, which stall be national in scope and civilian in character, to
be administered and controlled by a national police commission. The authority of local executives over the police
units in their jurisdiction shall be provided by law. 1

With the aforequoted provision in mind, Congress passed Republic Act No. 6975 entitled "AN ACT ESTABLISHING THE PHILIPPINE
NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER
PURPOSES" as the consolidated version of House Bill No. 23614 and Senate Bill No. 463.

2
Following the said Act's approval by President Corazon C. Aquino on December 13, 1990, it was published on December 17, 1990.

Presently, however, petitioner as citizen, taxpayer and member of the Philippine Bar sworn to defend the Constitution, filed the petition
now at bar on December 20, 1990, seeking this Court's declaration of unconstitutionality of RA 6975 with prayer for temporary
restraining order.

But in an en banc resolution dated December 27, 1990, We simply required the public respondents to file their Comment, without
however giving due course to the petition and the prayer therein. Hence, the Act took effect after fifteen days following its publication, or
on January 1, 1991. 3

Before we settle down on the merits of the petition, it would likewise be well to discuss albeit briefly the history of our police force and
the reasons for the ordination of Section 6, Article XVI in our present Constitution.

During the Commonwealth period, we had the Philippine Constabulary as the nucleus of the Philippine Ground Force (PGF), now the
Armed Forces of the Philippines (AFP). The PC was made part of the PGF but its administrative, supervisory and directional control
was handled by the then Department of the Interior. After the war, it remained as the "National Police" under the Department of National
Defense, as a major service component of the AFP. 4

Later, the Integration Act of 1975 5 created the Integrated National Police (INP) under the Office of the President, with the PC as the
nucleus, and the local police forces as the civilian components. The PC-INP was headed by the PC Chief who, as concurrent Director-
General of the INP, exercised command functions over the INP. 6

The National Police Commission (NAPOLCOM) 7 exercised administrative control and supervision while the local executives exercised
operational supervision and direction over the INP units assigned within their respective localities. 8

The set-up whereby the INP was placed under the command of the military component, which is the PC, severely eroded the INP's
civilian character and the multiplicity in the governance of the PC-INP resulted in inefficient police service. 9 Moreover, the integration of
the national police forces with the PC also resulted in inequities since the military component had superior benefits and privileges. 10
The Constitutional Commission of 1986 was fully aware of the structural errors that beset the system. Thus, Com. Teodulo C. Natividad
explained that:

xxx xxx xxx

MR. NATIVIDAD. . . . The basic tenet of a modern police organization is to remove it from the
military. 11

xxx xxx xxx

Here in our draft Constitution, we have already made a constitutional postulate that the military cannot occupy any
civil service position [in Section 6 of the Article on the Civil Service 12] Therefore, in keeping with this and because of
the universal acceptance that a police force is a civilian function, a public service, and should not be performed by
military force, one of the basic reforms we are presenting here is that it should be separated from the military force
which is the PC. 13

xxx xxx xxx

Furthermore:

xxx xxx xxx

. . . the civilian police cannot blossom into full profession because most of the key positions are being occupied by the
military So, it is up to this Commission to remove the police from such a situation so that it can develop into a truly
professional civilian police. . . . 14

Hence, the "one police force, national in scope, and civilian in character" provision that is now Article XVI, Section 6 of the 1987
Constitution.

And so we now come to the merits of the petition at hand.

In the main, petitioner herein respectfully advances the view that RA 6975 emasculated the National Police Commission by limiting its
power "to administrative control" over the Philippine National Police (PNP), thus, "control" remained with the Department Secretary
under whom both the National Police Commission and the PNP were placed. 15

We do not share this view.

To begin with, one need only refer to the fundamentally accepted principle in Constitutional Law that the President has control of all
executive departments, bureaus, and offices to lay at rest petitioner's contention on the matter.

This presidential power of control over the executive branch of government extends over all executive officers from Cabinet Secretary
to the lowliest clerk 17 and has been held by us, in the landmark case of Mondano vs. Silvosa, 18 to mean "the power of [the President]
to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former with that of the latter." It is said to be at the very "heart of the meaning of Chief Executive." 19

Equally well accepted, as a corollary rule to the control powers of the President, is the "Doctrine of Qualified Political Agency". As the
President cannot be expected to exercise his control powers all at the same time and in person, 20 he will have to delegate some of
them to his Cabinet members.

Under this doctrine, which recognizes the establishment of a single executive, 21 "all executive and administrative organizations are
adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief
Executive, and, except in cases where the Chief Executive is required by the Constitution or law to act in person on the exigencies of
the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are
performed by and through the executive departments, and the acts of the Secretaries of such departments, performed and promulgated
in the regular course of business, unless disapproved or reprobated by the Chief Executive presumptively the acts of the Chief
Executive." 22 (emphasis ours)

Thus, and in short, "the President's power of control is directly exercised by him over the members of the Cabinet who, in turn, and by
his authority, control the bureaus and other offices under their respective jurisdictions in the executive department." 23

Additionally, the circumstance that the NAPOLCOM and the PNP are placed under the reorganized Department of Interior and Local
Government is merely an administrative realignment that would bolster a system of coordination and cooperation among the citizenry,
 24
local executives and the integrated law enforcement agencies and public safety agencies created under the assailed Act, the funding
of the PNP being in large part subsidized by the national government.

Such organizational set-up does not detract from the mandate of the Constitution that the national police force shall be administered
and controlled by a national police commission as at any rate, and in fact, the Act in question adequately provides for administration
and control at the commission level, as shown in the following provisions, to wit:

Sec. 14. Powers and Functions of the Commission. — The Commission shall exercise the following powers and
functions:

xxx xxx xxx

(i) Approve or modify plans and programs on education and training, logistical requirements, communications,
records, information systems, crime laboratory, crime prevention and crime reporting;

(j) Affirm, reverse or modify, through the National Appellate Board, personnel disciplinary actions involving demotion
or dismissal from the service imposed upon members of the Philippine National Police by the Chief of the PNP;

(k) Exercise appellate jurisdiction through .the regional. appellate boards over administrative cases against policemen
and over decisions on claims for police benefits;

xxx xxx xxx

Sec. 26. The Command and direction of the PNP shall be vested in the Chief of the PNP . . . Such command and
direction of the Chief of the PNP may be delegated to subordinate officials with respect to the units under their
respective commands, in accordance with the rules and regulations prescribed by the Commission. . . .

xxx xxx xxx

Sec. 35. . . . To enhance police operational efficiency and effectiveness, the Chief of the PNP may constitute such
other support units as may be necessary subject to the approval of the Commission. . . .

xxx xxx xxx

Sec. 37. . . . There shall be established a performance evaluation system which shall be administered in accordance
with the rules, regulations and standards; and a code of conduct promulgated by the Commission for members of the
PNP. . . .

xxx xxx xxx

Petitioner further asserts that in manifest derogation of the power of control of the NAPOLCOM over the PNP, RA 6975 vested the
power to choose the PNP Provincial Director and the Chiefs of Police in the Governors and Mayors, respectively; the power of
"operational supervision and control" over police units in city and municipal mayors; in the Civil Service Commission, participation in
appointments to the positions of Senior Superintendent to Deputy Director-General as well as the administration of qualifying entrance
examinations; disciplinary powers over PNP members in the "People's Law Enforcement Boards" and in city and municipal mayors. 25

Once more, we find no real controversy upon the foregoing assertions.

It is true that when the Constitutional Commissioners of 1986 provided that the authority of local executives over the police units in their
jurisdiction shall be provided by law, they intended that the day-to-day functions of police work like crime, investigation, crime
prevention activities, traffic control, etc., would be under the operational control of the local executives as it would not be advisable to
give full control of the police to the local executives. 26

27
They reasoned that in the past, this gave rise to warlordism, bossism, and sanctuaries for vices and abuses.

It would appear then that by vesting in the local executives the power to choose the officers in question, the Act went beyond the
bounds of the Constitution's intent.

Not so. We find light in the principle of constitutional construction that every presumption should be indulged in favor of constitutionality
and the court in considering the validity of the statute in question should give it such reasonable construction as can be reached to bring
it within the fundamental
law. 28
Under the questioned provisions, which read as follows:

D. PARTICIPATION OF LOCAL EXECUTIVES IN THE ADMINISTRATION OF THE PNP.

Sec. 51. Powers of Local Government Officials over the PNP Units or Forces.

Governors and mayors shall be deputized as representatives of the Commission in their respective territorial
jurisdictions. As such, the local executives shall discharge the following functions:

a.) Provincial Governor — (1) . . .

The provincial governor shall choose the provincial director from a list of three (3) eligibles recommended by the PNP
Regional Director.

4) . . . City and municipal mayors shall have the following authority over the PNP units in their respective jurisdictions:

i.) Authority to choose the chief of police from a list of five (5) eligibles recommended by the Provincial Police
Director. . . . (Emphasis ours)

full control remains with the National Police Commission.

We agree, and so hold, with the view of the Solicitor General that "there is no usurpation of the power of control of the NAPOLCOM
under Section 51 because under this very same provision, it is clear that the local executives are only acting as representatives of the
NAPOLCOM. . . . As such deputies, they are answerable to the NAPOLCOM for their actions in the exercise of their functions under
that section. Thus, unless countermanded by the NAPOLCOM, their acts are valid and binding as acts of the NAPOLCOM." 29 It is
significant to note that the local officials, as NAPOLCOM representatives, will choose the officers concerned from a list of eligibles
(those who meet the general qualifications for appointment to the PNP) 30 to be recommended by PNP officials.

The same holding is true with respect to the contention on the operational supervision and control exercised by the local officials. Those
officials would simply be acting as representatives of the Commission.

As regards the assertion involving the Civil Service Commission, suffice it to say that the questioned provisions, which read:

Sec. 31. Appointment of PNP Officers and Members. — The Appointment of the officers and members of the PNP
shall be effected in the following manner:

a.) Police Officer I to Senior Police Officer IV. — Appointed by the PNP regional director for regional personnel or by
the Chief of the PNP for national headquarters personnel and attested by the Civil Service Commission;

b.) Inspector to Superintendent. — Appointed by the Chief of the PNP, as recommended by their immediate
superiors, and attested by the Civil Service Commission;

c.) Senior Superintendent to Deputy Director-General. — Appointed by the President upon recommendation of the
Chief of the PNP, with proper endorsement by the Chairman of the Civil Service
Commission . . .

Sec. 32. Examinations for Policemen. — The Civil Service Commission shall administer the qualifying entrance
examinations for policemen on the basis of the standards set by the NAPOLCOM.

precisely underscore the civilian character of the national police force, and will undoubtedly professionalize the same.

The grant of disciplinary powers over PNP members to the "People's Law Enforcement Boards" (or the PLEB) and city and municipal
mayors is also not in derogation of the commission's power of control over the PNP.

Pursuant to the Act, the Commission exercises appellate jurisdiction, thru the regional appellate boards, over decisions of both the
PLEB and the said mayors. This is so under Section 20(c). Furthermore, it is the Commission which shall issue the implementing
guidelines and procedures to be adopted by the PLEB for in the conduct of its hearings, and it may assign NAPOLCOM hearing officers
to act as legal consultants of the PLEBs (Section 43-d4, d5).

As a disciplinary board primarily created to hear and decide citizen's complaints against erring officers and members of the PNP, the
establishment of PLEBs in every city, and municipality would all the more help professionalize the police force.
Petitioner would likewise have this Court imagine that Section 12 of the questioned Act, the pertinent portion of which reads:

Sec. 12. Relationship of the Department with the Department of National Defense. — During a period of twenty- four
(24) months from the effectivity of this Act, the Armed Forces of the Philippines (AFP) shall continue its present role
of preserving the internal and external security of the State: Provided, that said period may be extended by the
President, if he finds it justifiable, for another period not exceeding twenty-four (24) months, after which, the
Department shall automatically take over from the AFP the primary role of preserving internal security, leaving to the
AFP its primary role of preserving external security.

xxx xxx xxx

constitutes an "encroachment upon, interference with, and an abdication by the President of, executive control and commander-in-chief
powers."

That We are not disposed to do for such is not the case at all here. A rejection thus of petitioner's submission anent Section 12 of the
Act should be in order in the light of the following exchanges during the CONCOM deliberations of Wednesday, October 1, 1986:

xxx xxx xxx

MR. RODRIGO. Just a few questions. The President of the Philippines is the Commander-in-Chief of all the armed
forces.

MR. NATIVIDAD. Yes, Madam President.

MR. RODRIGO. Since the national police is not integrated with the armed forces, I do not suppose they come under
the Commander-in-Chief powers of the President of the Philippines.

MR. NATIVIDAD. They do, Madam President. By law they are under the supervision and control of the President of
the Philippines.

MR. RODRIGO. Yes, but the President is not the Commander-in-Chief of the national police.

MR. NATIVIDAD. He is the President.

MR. RODRIGO. Yes, the Executive. But they do not come under that specific provision that the President is
Commander-in-Chief of all the armed forces.

MR. NATIVIDAD. No, not under the Commander-in-Chief provision.

MR. RODRIGO. There are two other powers of the President. The President has control over departments, bureaus
and offices, and supervision over local governments. Under which does the police fall, under control or under
supervision?

MR. NATIVIDAD. Both, Madam President.

MR. RODRIGO. Control and Supervision.

MR. NATIVIDAD. Yes, in fact, the National Police Commission is under the Office of the President. (CONCOM
RECORDS, Vol. 5, p. 296)

It thus becomes all too apparent then that the provision herein assailed precisely gives muscle to and enforces the proposition that the
national police force does not fall under the Commander-in-Chief powers of the President. This is necessarily so since the police force,
not being integrated with the military, is not a part of the Armed Forces of the Philippines. As a civilian agency of the government, it
properly comes within, and is subject to, the exercise by the President of the power of executive control.

Consequently, Section 12 does not constitute abdication of commander-in-chief powers. It simply provides for the transition period or
process during which the national police would gradually assume the civilian function of safeguarding the internal security of the State.
Under this instance, the President, to repeat, abdicates nothing of his war powers. It would bear to here state, in reiteration of the
preponderant view, that the President, as Commander-in-Chief, is not a member of the Armed Forces. He remains a civilian whose
duties under the Commander-in-Chief provision "represent only a part of the organic duties imposed upon him. All his other functions
are clearly civil in nature." 31 His position as a civilian Commander-in-Chief is consistent with, and a testament to, the constitutional
principle that "civilian authority is, at all times, supreme over the military." (Article II, Section 3, 1987 Constitution)
Finally, petitioner submits that the creation of a "Special Oversight Committee" under Section 84 of the Act, especially the inclusion
therein of some legislators as members (namely: the respective Chairmen of the Committee on Local Government and the Committee
on National Defense and Security in the Senate, and the respective Chairmen of the Committee on Public Order and Security and the
Committee on National Defense in the House of Representatives) is an "unconstitutional encroachment upon and a diminution of, the
President's power of control over all executive departments, bureaus and offices."

But there is not the least interference with the President's power of control under Section 84. The Special Oversight Committee is
simply an ad hoc or transitory body, established and tasked solely with planning and overseeing the immediate "transfer, merger and/or
absorption" into the Department of the Interior and Local Governments of the "involved agencies." This it will undertake in accordance
with the phases of implementation already laid down in Section 85 of the Act and once this is carried out, its functions as well as the
committee itself would cease altogether. 32 As an ad hoc body, its creation and the functions it exercises, decidedly do not constitute an
encroachment and in diminution of the power of control which properly belongs to the President. What is more, no executive
department, bureau or office is placed under the control or authority, of the committee. 33

As a last word, it would not be amiss to point out here that under the Constitution, there are the so-called independent Constitutional
Commissions, namely: The Civil Service Commission, Commission on Audit, and the Commission on Elections. (Article IX-A, Section 1)

As these Commissions perform vital governmental functions, they have to be protected from external influences and political pressures.
Hence, they were made constitutional bodies, independent of and not under any department of the government. 34 Certainly, they are
not under the control of the President.

The Constitution also created an independent office called the "Commission on Human Rights." (Article XIII, Section 17[1]).However,
this Commission is not on the same level as the Constitutional Commissions under Article IX, although it is independent like the latter
Commissions. 35 It still had to be constituted thru Executive Order No. 163 (dated May 5, 1987).

In contrast, Article XVI, Section 6 thereof, merely mandates the statutory creation of a national police commission that will administer
and control the national police force to be established thereunder.

This commission is, for obvious reasons, not in the same category as the independent Constitutional Commissions of Article IX and the
other constitutionally created independent Office, namely, the Commission on Human Rights.

By way of resume, the three Constitutional Commissions (Civil Service, Audit, Elections) and the additional commission created by the
Constitution (Human Rights) are all independent of the Executive; but the National Police Commission is not. 36 In fact, it was stressed
during the CONCOM deliberations that this commission would be under the President, and hence may be controlled by the President,
thru his or her alter ego, the Secretary of the Interior and Local Government.

WHEREFORE, having in view all of the foregoing holdings, the instant petition is hereby DISMISSED for lack of merit.

SO ORDERED.