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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 164785 April 29, 2009

ELISEO F. SORIANO, Petitioner,


vs.
MA. CONSOLIZA P. LAGUARDIA, in her capacity as Chairperson of the Movie and Television Review and
Classification Board, MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD, JESSIE L.
GALAPON, ANABEL M. DELA CRUZ, MANUEL M. HERNANDEZ, JOSE L. LOPEZ, CRISANTO
SORIANO, BERNABE S. YARIA, JR., MICHAEL M. SANDOVAL, and ROLDAN A.
GAVINO, Respondents.

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

G.R. No. 165636 April 29, 2009

ELISEO F. SORIANO Petitioner,


vs.
MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD, ZOSIMO G. ALEGRE, JACKIE
AQUINO-GAVINO, NOEL R. DEL PRADO, EMMANUEL BORLAZA, JOSE E. ROMERO IV, and
FLORIMONDO C. ROUS, in their capacity as members of the Hearing and Adjudication Committee of the
MTRCB, JESSIE L. GALAPON, ANABEL M. DELA CRUZ, MANUEL M. HERNANDEZ, JOSE L.
LOPEZ, CRISANTO SORIANO, BERNABE S. YARIA, JR., MICHAEL M. SANDOVAL, and ROLDAN A.
GAVINO, in their capacity as complainants before the MTRCB Respondents.

DECISION

VELASCO, JR., J.:

In these two petitions for certiorari and prohibition under Rule 65, petitioner Eliseo F. Soriano seeks to nullify and
set aside an order and a decision of the Movie and Television Review and Classification Board (MTRCB) in
connection with certain utterances he made in his television show, Ang Dating Daan.

Facts of the Case

On August 10, 2004, at around 10:00 p.m., petitioner, as host of the program Ang Dating Daan, aired on UNTV 37,
made the following remarks:

Lehitimong anak ng demonyo; sinungaling;

Gago ka talaga Michael, masahol ka pa sa putang babae o di ba. Yung putang babae ang gumagana lang doon
yung ibaba, [dito] kay Michael ang gumagana ang itaas, o di ba! O, masahol pa sa putang babae yan. Sabi ng lola
ko masahol pa sa putang babae yan. Sobra ang kasinungalingan ng mga demonyong ito.1 x x x

Two days after, before the MTRCB, separate but almost identical affidavit-complaints were lodged by Jessie L.
Galapon and seven other private respondents, all members of the Iglesia ni Cristo (INC), 2 against petitioner in
connection with the above broadcast. Respondent Michael M. Sandoval, who felt directly alluded to in petitioner’s
remark, was then a minister of INC and a regular host of the TV program Ang Tamang Daan.3 Forthwith, the
MTRCB sent petitioner a notice of the hearing on August 16, 2004 in relation to the alleged use of some cuss words
in the August 10, 2004 episode of Ang Dating Daan.4

After a preliminary conference in which petitioner appeared, the MTRCB, by Order of August 16, 2004,
preventively suspended the showing of Ang Dating Daan program for 20 days, in accordance with Section 3(d) of
Presidential Decree No. (PD) 1986, creating the MTRCB, in relation to Sec. 3, Chapter XIII of the 2004
Implementing Rules and Regulations (IRR) of PD 1986 and Sec. 7, Rule VII of the MTRCB Rules of
Procedure.5 The same order also set the case for preliminary investigation.

The following day, petitioner sought reconsideration of the preventive suspension order, praying that Chairperson
Consoliza P. Laguardia and two other members of the adjudication board recuse themselves from hearing the
case.6 Two days after, however, petitioner sought to withdraw7 his motion for reconsideration, followed by the filing
with this Court of a petition for certiorari and prohibition,8 docketed as G.R. No. 164785, to nullify the preventive
suspension order thus issued.

On September 27, 2004, in Adm. Case No. 01-04, the MTRCB issued a decision, disposing as follows:

WHEREFORE, in view of all the foregoing, a Decision is hereby rendered, finding respondent Soriano liable for his
utterances and thereby imposing on him a penalty of three (3) months suspension from his program, "Ang Dating
Daan".

Co-respondents Joselito Mallari, Luzviminda Cruz and UNTV Channel 37 and its owner, PBC, are hereby
exonerated for lack of evidence.

SO ORDERED.9

Petitioner then filed this petition for certiorari and prohibition with prayer for injunctive relief, docketed as G.R. No.
165636.

In a Resolution dated April 4, 2005, the Court consolidated G.R. No. 164785 with G.R. No. 165636.

In G.R. No. 164785, petitioner raises the following issues:

THE ORDER OF PREVENTIVE SUSPENSION PROMULGATED BY RESPONDENT [MTRCB] DATED 16


AUGUST 2004 AGAINST THE TELEVISION PROGRAM ANG DATING DAAN x x x IS NULL AND
VOID FOR BEING ISSUED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION

(A) BY REASON THAT THE [IRR] IS INVALID INSOFAR AS IT PROVIDES FOR THE ISSUANCE
OF PREVENTIVE SUSPENSION ORDERS;

(B) BY REASON OF LACK OF DUE HEARING IN THE CASE AT BENCH;

(C) FOR BEING VIOLATIVE OF EQUAL PROTECTION UNDER THE LAW;

(D) FOR BEING VIOLATIVE OF FREEDOM OF RELIGION; AND

(E) FOR BEING VIOLATIVE OF FREEDOM OF SPEECH AND EXPRESSION. 10

In G.R. No. 165636, petitioner relies on the following grounds:


SECTION 3(C) OF [PD] 1986, IS PATENTLY UNCONSTITUTIONAL AND ENACTED WITHOUT OR IN
EXCESS OF JURISDICTION x x x CONSIDERING THAT:

SECTION 3(C) OF [PD] 1986, AS APPLIED TO PETITIONER, UNDULY INFRINGES ON THE


CONSTITUTIONAL GUARANTEE OF FREEDOM OF RELIGION, SPEECH, AND EXPRESSION AS IT
PARTAKES OF THE NATURE OF A SUBSEQUENT PUNISHMENT CURTAILING THE SAME;
CONSEQUENTLY, THE IMPLEMENTING RULES AND REGULATIONS, RULES OF PROCEDURE, AND
OFFICIAL ACTS OF THE MTRCB PURSUANT THERETO, I.E. DECISION DATED 27 SEPTEMBER 2004
AND ORDER DATED 19 OCTOBER 2004, ARE LIKEWISE CONSTITUTIONALLY INFIRM AS APPLIED IN
THE CASE AT BENCH;

II

SECTION 3(C) OF [PD] 1986, AS APPLIED TO PETITIONER, UNDULY INFRINGES ON THE


CONSTITUTIONAL GUARANTEE OF DUE PROCESS OF LAW AND EQUAL PROTECTION UNDER THE
LAW; CONSEQUENTLY, THE [IRR], RULES OF PROCEDURE, AND OFFICIAL ACTS OF THE MTRCB
PURSUANT THERETO, I.E., DECISION DATED 27 SEPTEMBER 2004 AND ORDER DATED 19 OCTOBER
2004, ARE LIKEWISE CONSTITUTIONALLY INFIRM AS APPLIED IN THE CASE AT BENCH; AND

III

[PD] 1986 IS NOT COMPLETE IN ITSELF AND DOES NOT PROVIDE FOR A SUFFICIENT STANDARD
FOR ITS IMPLEMENTATION THEREBY RESULTING IN AN UNDUE DELEGATION OF LEGISLATIVE
POWER BY REASON THAT IT DOES NOT PROVIDE FOR THE PENALTIES FOR VIOLATIONS OF ITS
PROVISIONS. CONSEQUENTLY, THE [IRR], RULES OF PROCEDURE, AND OFFICIAL ACTS OF THE
MTRCB PURSUANT THERETO, I.E. DECISION DATED 27 SEPTEMBER 2004 AND ORDER DATED 19
OCTOBER 2004, ARE LIKEWISE CONSTITUTIONALLY INFIRM AS APPLIED IN THE CASE AT BENCH11

G.R. No. 164785

We shall first dispose of the issues in G.R. No. 164785, regarding the assailed order of preventive suspension,
although its implementability had already been overtaken and veritably been rendered moot by the equally assailed
September 27, 2004 decision.

It is petitioner’s threshold posture that the preventive suspension imposed against him and the relevant IRR
provision authorizing it are invalid inasmuch as PD 1986 does not expressly authorize the MTRCB to issue
preventive suspension.

Petitioner’s contention is untenable.

Administrative agencies have powers and functions which may be administrative, investigatory, regulatory, quasi-
legislative, or quasi-judicial, or a mix of the five, as may be conferred by the Constitution or by statute. 12 They have
in fine only such powers or authority as are granted or delegated, expressly or impliedly, by law. 13 And in
determining whether an agency has certain powers, the inquiry should be from the law itself. But once ascertained as
existing, the authority given should be liberally construed. 14

A perusal of the MTRCB’s basic mandate under PD 1986 reveals the possession by the agency of the authority,
albeit impliedly, to issue the challenged order of preventive suspension. And this authority stems naturally from, and
is necessary for the exercise of, its power of regulation and supervision.

Sec. 3 of PD 1986 pertinently provides the following:


Section 3. Powers and Functions.—The BOARD shall have the following functions, powers and duties:

xxxx

c) To approve or disapprove, delete objectionable portions from and/or prohibit the x x x production, x x x
exhibition and/or television broadcast of the motion pictures, television programs and publicity materials subject of
the preceding paragraph, which, in the judgment of the board applying contemporary Filipino cultural values as
standard, are objectionable for being immoral, indecent, contrary to law and/or good customs, injurious to the
prestige of the Republic of the Philippines or its people, or with a dangerous tendency to encourage the commission
of violence or of wrong or crime such as but not limited to:

xxxx

vi) Those which are libelous or defamatory to the good name and reputation of any person, whether living or dead;

xxxx

(d) To supervise, regulate, and grant, deny or cancel, permits for the x x x production, copying, distribution, sale,
lease, exhibition, and/or television broadcast of all motion pictures, television programs and publicity materials, to
the end that no such pictures, programs and materials as are determined by the BOARD to be objectionable in
accordance with paragraph (c) hereof shall be x x x produced, copied, reproduced, distributed, sold, leased,
exhibited and/or broadcast by television;

xxxx

k) To exercise such powers and functions as may be necessary or incidental to the attainment of the purposes and
objectives of this Act x x x. (Emphasis added.)

The issuance of a preventive suspension comes well within the scope of the MTRCB’s authority and functions
expressly set forth in PD 1986, more particularly under its Sec. 3(d), as quoted above, which empowers the MTRCB
to "supervise, regulate, and grant, deny or cancel, permits for the x x x exhibition, and/or television broadcast of all
motion pictures, television programs and publicity materials, to the end that no such pictures, programs and
materials as are determined by the BOARD to be objectionable in accordance with paragraph (c) hereof shall be x x
x exhibited and/or broadcast by television."

Surely, the power to issue preventive suspension forms part of the MTRCB’s express regulatory and supervisory
statutory mandate and its investigatory and disciplinary authority subsumed in or implied from such mandate. Any
other construal would render its power to regulate, supervise, or discipline illusory.

Preventive suspension, it ought to be noted, is not a penalty by itself, being merely a preliminary step in an
administrative investigation.15 And the power to discipline and impose penalties, if granted, carries with it the power
to investigate administrative complaints and, during such investigation, to preventively suspend the person subject
of the complaint.16

To reiterate, preventive suspension authority of the MTRCB springs from its powers conferred under PD 1986. The
MTRCB did not, as petitioner insinuates, empower itself to impose preventive suspension through the medium of
the IRR of PD 1986. It is true that the matter of imposing preventive suspension is embodied only in the IRR of PD
1986. Sec. 3, Chapter XIII of the IRR provides:

Sec. 3. PREVENTION SUSPENSION ORDER.––Any time during the pendency of the case, and in order to prevent
or stop further violations or for the interest and welfare of the public, the Chairman of the Board may issue a
Preventive Suspension Order mandating the preventive x x x suspension of the permit/permits involved, and/or
closure of the x x x television network, cable TV station x x x provided that the temporary/preventive order thus
issued shall have a life of not more than twenty (20) days from the date of issuance.

But the mere absence of a provision on preventive suspension in PD 1986, without more, would not work to deprive
the MTRCB a basic disciplinary tool, such as preventive suspension. Recall that the MTRCB is expressly
empowered by statute to regulate and supervise television programs to obviate the exhibition or broadcast of, among
others, indecent or immoral materials and to impose sanctions for violations and, corollarily, to prevent further
violations as it investigates. Contrary to petitioner’s assertion, the aforequoted Sec. 3 of the IRR neither amended
PD 1986 nor extended the effect of the law. Neither did the MTRCB, by imposing the assailed preventive
suspension, outrun its authority under the law. Far from it. The preventive suspension was actually done in
furtherance of the law, imposed pursuant, to repeat, to the MTRCB’s duty of regulating or supervising television
programs, pending a determination of whether or not there has actually been a violation. In the final analysis, Sec. 3,
Chapter XIII of the 2004 IRR merely formalized a power which PD 1986 bestowed, albeit impliedly, on MTRCB.

Sec. 3(c) and (d) of PD 1986 finds application to the present case, sufficient to authorize the MTRCB’s assailed
action. Petitioner’s restrictive reading of PD 1986, limiting the MTRCB to functions within the literal confines of
the law, would give the agency little leeway to operate, stifling and rendering it inutile, when Sec. 3(k) of PD 1986
clearly intends to grant the MTRCB a wide room for flexibility in its operation. Sec. 3(k), we reiterate, provides, "To
exercise such powers and functions as may be necessary or incidental to the attainment of the purposes and
objectives of this Act x x x." Indeed, the power to impose preventive suspension is one of the implied powers of
MTRCB. As distinguished from express powers, implied powers are those that can be inferred or are implicit in the
wordings or conferred by necessary or fair implication of the enabling act.17 As we held in Angara v. Electoral
Commission, when a general grant of power is conferred or a duty enjoined, every particular power necessary for
the exercise of one or the performance of the other is also conferred by necessary implication. 18 Clearly, the power
to impose preventive suspension pending investigation is one of the implied or inherent powers of MTRCB.

We cannot agree with petitioner’s assertion that the aforequoted IRR provision on preventive suspension is
applicable only to motion pictures and publicity materials. The scope of the MTRCB’s authority extends beyond
motion pictures. What the acronym MTRCB stands for would suggest as much. And while the law makes specific
reference to the closure of a television network, the suspension of a television program is a far less punitive measure
that can be undertaken, with the purpose of stopping further violations of PD 1986. Again, the MTRCB would
regretfully be rendered ineffective should it be subject to the restrictions petitioner envisages.

Just as untenable is petitioner’s argument on the nullity of the preventive suspension order on the ground of lack of
hearing. As it were, the MTRCB handed out the assailed order after petitioner, in response to a written notice,
appeared before that Board for a hearing on private respondents’ complaint. No less than petitioner admitted that the
order was issued after the adjournment of the hearing, 19 proving that he had already appeared before the MTRCB.
Under Sec. 3, Chapter XIII of the IRR of PD 1986, preventive suspension shall issue "[a]ny time during the
pendency of the case." In this particular case, it was done after MTRCB duly apprised petitioner of his having
possibly violated PD 198620 and of administrative complaints that had been filed against him for such violation. 21

At any event, that preventive suspension can validly be meted out even without a hearing. 22

Petitioner next faults the MTRCB for denying him his right to the equal protection of the law, arguing that, owing to
the preventive suspension order, he was unable to answer the criticisms coming from the INC ministers.

Petitioner’s position does not persuade. The equal protection clause demands that "all persons subject to legislation
should be treated alike, under like circumstances and conditions both in the privileges conferred and liabilities
imposed."23 It guards against undue favor and individual privilege as well as hostile discrimination. 24 Surely,
petitioner cannot, under the premises, place himself in the same shoes as the INC ministers, who, for one, are not
facing administrative complaints before the MTRCB. For another, he offers no proof that the said ministers, in their
TV programs, use language similar to that which he used in his own, necessitating the MTRCB’s disciplinary action.
If the immediate result of the preventive suspension order is that petitioner remains temporarily gagged and is
unable to answer his critics, this does not become a deprivation of the equal protection guarantee. The Court need
not belabor the fact that the circumstances of petitioner, as host of Ang Dating Daan, on one hand, and the INC
ministers, as hosts of Ang Tamang Daan, on the other, are, within the purview of this case, simply too different to
even consider whether or not there is a prima facie indication of oppressive inequality.

Petitioner next injects the notion of religious freedom, submitting that what he uttered was religious speech, adding
that words like "putang babae" were said in exercise of his religious freedom.

The argument has no merit.

The Court is at a loss to understand how petitioner’s utterances in question can come within the pale of Sec. 5,
Article III of the 1987 Constitution on religious freedom. The section reads as follows:

No law shall be made respecting the establishment of a religion, or prohibiting the free exercise thereof. The free
exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever be
allowed. No religious test shall be required for the exercise of civil or political rights.

There is nothing in petitioner’s statements subject of the complaints expressing any particular religious belief,
nothing furthering his avowed evangelical mission. The fact that he came out with his statements in a televised bible
exposition program does not automatically accord them the character of a religious discourse. Plain and simple
insults directed at another person cannot be elevated to the status of religious speech. Even petitioner’s attempts to
place his words in context show that he was moved by anger and the need to seek retribution, not by any religious
conviction. His claim, assuming its veracity, that some INC ministers distorted his statements respecting amounts
Ang Dating Daan owed to a TV station does not convert the foul language used in retaliation as religious speech.
We cannot accept that petitioner made his statements in defense of his reputation and religion, as they constitute no
intelligible defense or refutation of the alleged lies being spread by a rival religious group. They simply illustrate
that petitioner had descended to the level of name-calling and foul-language discourse. Petitioner could have chosen
to contradict and disprove his detractors, but opted for the low road.

Petitioner, as a final point in G.R. No. 164785, would have the Court nullify the 20-day preventive suspension order,
being, as insisted, an unconstitutional abridgement of the freedom of speech and expression and an impermissible
prior restraint. The main issue tendered respecting the adverted violation and the arguments holding such issue
dovetails with those challenging the three-month suspension imposed under the assailed September 27, 2004
MTRCB decision subject of review under G.R. No. 165636. Both overlapping issues and arguments shall be jointly
addressed.

G.R. No. 165636

Petitioner urges the striking down of the decision suspending him from hosting Ang Dating Daan for three months
on the main ground that the decision violates, apart from his religious freedom, his freedom of speech and
expression guaranteed under Sec. 4, Art. III of the Constitution, which reads:

No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people
peaceably to assemble and petition the government for redress of grievance.

He would also have the Court declare PD 1986, its Sec. 3(c) in particular, unconstitutional for reasons articulated in
this petition.

We are not persuaded as shall be explained shortly. But first, we restate certain general concepts and principles
underlying the freedom of speech and expression.

It is settled that expressions by means of newspapers, radio, television, and motion pictures come within the broad
protection of the free speech and expression clause.25 Each method though, because of its dissimilar presence in the
lives of people and accessibility to children, tends to present its own problems in the area of free speech protection,
with broadcast media, of all forms of communication, enjoying a lesser degree of protection. 26 Just as settled is the
rule that restrictions, be it in the form of prior restraint, e.g., judicial injunction against publication or threat of
cancellation of license/franchise, or subsequent liability, whether in libel and damage suits, prosecution for sedition,
or contempt proceedings, are anathema to the freedom of expression. Prior restraint means official government
restrictions on the press or other forms of expression in advance of actual publication or dissemination. 27 The
freedom of expression, as with the other freedoms encased in the Bill of Rights, is, however, not absolute. It may be
regulated to some extent to serve important public interests, some forms of speech not being protected. As has been
held, the limits of the freedom of expression are reached when the expression touches upon matters of essentially
private concern.28 In the oft-quoted expression of Justice Holmes, the constitutional guarantee "obviously was not
intended to give immunity for every possible use of language." 29 From Lucas v. Royo comes this line: "[T]he
freedom to express one’s sentiments and belief does not grant one the license to vilify in public the honor and
integrity of another. Any sentiments must be expressed within the proper forum and with proper regard for the rights
of others."30

Indeed, as noted in Chaplinsky v. State of New Hampshire,31 "there are certain well-defined and narrowly limited
classes of speech that are harmful, the prevention and punishment of which has never been thought to raise any
Constitutional problems." In net effect, some forms of speech are not protected by the Constitution, meaning that
restrictions on unprotected speech may be decreed without running afoul of the freedom of speech clause. 32 A
speech would fall under the unprotected type if the utterances involved are "no essential part of any exposition of
ideas, and are of such slight social value as a step of truth that any benefit that may be derived from them is clearly
outweighed by the social interest in order and morality." 33 Being of little or no value, there is, in dealing with or
regulating them, no imperative call for the application of the clear and present danger rule or the balancing-of-
interest test, they being essentially modes of weighing competing values, 34 or, with like effect, determining which of
the clashing interests should be advanced.

Petitioner asserts that his utterance in question is a protected form of speech.

The Court rules otherwise. It has been established in this jurisdiction that unprotected speech or low-value
expression refers to libelous statements, obscenity or pornography, false or misleading advertisement, insulting or
"fighting words", i.e., those which by their very utterance inflict injury or tend to incite an immediate breach of
peace and expression endangering national security.

The Court finds that petitioner’s statement can be treated as obscene, at least with respect to the average child.
Hence, it is, in that context, unprotected speech. In Fernando v. Court of Appeals, the Court expressed difficulty in
formulating a definition of obscenity that would apply to all cases, but nonetheless stated the ensuing observations
on the matter:

There is no perfect definition of "obscenity" but the latest word is that of Miller v. California which established
basic guidelines, to wit: (a) whether to the average person, applying contemporary standards would find the work,
taken as a whole, appeals to the prurient interest; (b) whether the work depicts or describes, in a patently offensive
way, sexual conduct specifically defined by the applicable state law; and (c) whether the work, taken as a whole,
lacks serious literary, artistic, political, or scientific value. But, it would be a serious misreading of Miller to
conclude that the trier of facts has the unbridled discretion in determining what is "patently offensive." x x x What
remains clear is that obscenity is an issue proper for judicial determination and should be treated on a case to case
basis and on the judge’s sound discretion.35

Following the contextual lessons of the cited case of Miller v. California, 36 a patently offensive utterance would
come within the pale of the term obscenity should it appeal to the prurient interest of an average listener applying
contemporary standards.

A cursory examination of the utterances complained of and the circumstances of the case reveal that to an average
adult, the utterances "Gago ka talaga x x x, masahol ka pa sa putang babae x x x. Yung putang babae ang gumagana
lang doon yung ibaba, [dito] kay Michael ang gumagana ang itaas, o di ba!" may not constitute obscene but merely
indecent utterances. They can be viewed as figures of speech or merely a play on words. In the context they were
used, they may not appeal to the prurient interests of an adult. The problem with the challenged statements is that
they were uttered in a TV program that is rated "G" or for general viewership, and in a time slot that would likely
reach even the eyes and ears of children.

While adults may have understood that the terms thus used were not to be taken literally, children could hardly be
expected to have the same discernment. Without parental guidance, the unbridled use of such language as that of
petitioner in a television broadcast could corrupt impressionable young minds. The term "putang babae" means "a
female prostitute," a term wholly inappropriate for children, who could look it up in a dictionary and just get the
literal meaning, missing the context within which it was used. Petitioner further used the terms, "ang gumagana lang
doon yung ibaba," making reference to the female sexual organ and how a female prostitute uses it in her trade, then
stating that Sandoval was worse than that by using his mouth in a similar manner. Children could be motivated by
curiosity and ask the meaning of what petitioner said, also without placing the phrase in context. They may be
inquisitive as to why Sandoval is different from a female prostitute and the reasons for the dissimilarity. And upon
learning the meanings of the words used, young minds, without the guidance of an adult, may, from their end, view
this kind of indecent speech as obscene, if they take these words literally and use them in their own speech or form
their own ideas on the matter. In this particular case, where children had the opportunity to hear petitioner’s words,
when speaking of the average person in the test for obscenity, we are speaking of the average child, not the average
adult. The average child may not have the adult’s grasp of figures of speech, and may lack the understanding that
language may be colorful, and words may convey more than the literal meaning. Undeniably the subject speech is
very suggestive of a female sexual organ and its function as such. In this sense, we find petitioner’s utterances
obscene and not entitled to protection under the umbrella of freedom of speech.

Even if we concede that petitioner’s remarks are not obscene but merely indecent speech, still the Court rules that
petitioner cannot avail himself of the constitutional protection of free speech. Said statements were made in a
medium easily accessible to children. With respect to the young minds, said utterances are to be treated as
unprotected speech.

No doubt what petitioner said constitutes indecent or offensive utterances. But while a jurisprudential pattern
involving certain offensive utterances conveyed in different mediums has emerged, this case is veritably one of first
impression, it being the first time that indecent speech communicated via television and the applicable norm for its
regulation are, in this jurisdiction, made the focal point. Federal Communications Commission (FCC) v. Pacifica
Foundation,37 a 1978 American landmark case cited in Eastern Broadcasting Corporation v. Dans, Jr.38 and Chavez
v. Gonzales,39 is a rich source of persuasive lessons. Foremost of these relates to indecent speech without prurient
appeal component coming under the category of protected speech depending on the context within which it was
made, irresistibly suggesting that, within a particular context, such indecent speech may validly be categorized as
unprotected, ergo, susceptible to restriction.

In FCC, seven of what were considered "filthy" words40 earlier recorded in a monologue by a satiric humorist later
aired in the afternoon over a radio station owned by Pacifica Foundation. Upon the complaint of a man who heard
the pre-recorded monologue while driving with his son, FCC declared the language used as "patently offensive" and
"indecent" under a prohibiting law, though not necessarily obscene. FCC added, however, that its declaratory order
was issued in a "special factual context," referring, in gist, to an afternoon radio broadcast when children were
undoubtedly in the audience. Acting on the question of whether the FCC could regulate the subject utterance, the US
Supreme Court ruled in the affirmative, owing to two special features of the broadcast medium, to wit: (1) radio is a
pervasive medium and (2) broadcasting is uniquely accessible to children. The US Court, however, hastened to add
that the monologue would be protected speech in other contexts, albeit it did not expound and identify a compelling
state interest in putting FCC’s content-based regulatory action under scrutiny.

The Court in Chavez41 elucidated on the distinction between regulation or restriction of protected speech that is
content-based and that which is content-neutral. A content-based restraint is aimed at the contents or idea of the
expression, whereas a content-neutral restraint intends to regulate the time, place, and manner of the expression
under well-defined standards tailored to serve a compelling state interest, without restraint on the message of the
expression. Courts subject content-based restraint to strict scrutiny.
With the view we take of the case, the suspension MTRCB imposed under the premises was, in one perspective,
permissible restriction. We make this disposition against the backdrop of the following interplaying factors: First,
the indecent speech was made via television, a pervasive medium that, to borrow from Gonzales v. Kalaw
Katigbak,42 easily "reaches every home where there is a set [and where] [c]hildren will likely be among the avid
viewers of the programs therein shown"; second, the broadcast was aired at the time of the day when there was a
reasonable risk that children might be in the audience; and third, petitioner uttered his speech on a "G" or "for
general patronage" rated program. Under Sec. 2(A) of Chapter IV of the IRR of the MTRCB, a show for general
patronage is "[s]uitable for all ages," meaning that the "material for television x x x in the judgment of the BOARD,
does not contain anything unsuitable for children and minors, and may be viewed without adult guidance or
supervision." The words petitioner used were, by any civilized norm, clearly not suitable for children. Where a
language is categorized as indecent, as in petitioner’s utterances on a general-patronage rated TV program, it may be
readily proscribed as unprotected speech.

A view has been advanced that unprotected speech refers only to pornography, 43 false or misleading
advertisement,44 advocacy of imminent lawless action, and expression endangering national security. But this list is
not, as some members of the Court would submit, exclusive or carved in stone. Without going into specifics, it may
be stated without fear of contradiction that US decisional law goes beyond the aforesaid general exceptions. As the
Court has been impelled to recognize exceptions to the rule against censorship in the past, this particular case
constitutes yet another exception, another instance of unprotected speech, created by the necessity of protecting the
welfare of our children. As unprotected speech, petitioner’s utterances can be subjected to restraint or regulation.

Despite the settled ruling in FCC which has remained undisturbed since 1978, petitioner asserts that his utterances
must present a clear and present danger of bringing about a substantive evil the State has a right and duty to prevent
and such danger must be grave and imminent.45

Petitioner’s invocation of the clear and present danger doctrine, arguably the most permissive of speech tests, would
not avail him any relief, for the application of said test is uncalled for under the premises. The doctrine, first
formulated by Justice Holmes, accords protection for utterances so that the printed or spoken words may not be
subject to prior restraint or subsequent punishment unless its expression creates a clear and present danger of
bringing about a substantial evil which the government has the power to prohibit. 46 Under the doctrine, freedom of
speech and of press is susceptible of restriction when and only when necessary to prevent grave and immediate
danger to interests which the government may lawfully protect. As it were, said doctrine evolved in the context of
prosecutions for rebellion and other crimes involving the overthrow of government.47 It was originally designed to
determine the latitude which should be given to speech that espouses anti-government action, or to have serious and
substantial deleterious consequences on the security and public order of the community. 48 The clear and present
danger rule has been applied to this jurisdiction.49 As a standard of limitation on free speech and press, however, the
clear and present danger test is not a magic incantation that wipes out all problems and does away with analysis and
judgment in the testing of the legitimacy of claims to free speech and which compels a court to release a defendant
from liability the moment the doctrine is invoked, absent proof of imminent catastrophic disaster.50 As we observed
in Eastern Broadcasting Corporation, the clear and present danger test "does not lend itself to a simplistic and all
embracing interpretation applicable to all utterances in all forums." 51

To be sure, the clear and present danger doctrine is not the only test which has been applied by the courts. Generally,
said doctrine is applied to cases involving the overthrow of the government and even other evils which do not
clearly undermine national security. Since not all evils can be measured in terms of "proximity and degree" the
Court, however, in several cases—Ayer Productions v. Capulong52 and Gonzales v. COMELEC,53 applied the
balancing of interests test. Former Chief Justice Fred Ruiz Castro, in Gonzales v. COMELEC, elucidated in his
Separate Opinion that "where the legislation under constitutional attack interferes with the freedom of speech and
assembly in a more generalized way and where the effect of the speech and assembly in terms of the probability of
realization of a specific danger is not susceptible even of impressionistic calculation," 54 then the "balancing of
interests" test can be applied.

The Court explained also in Gonzales v. COMELEC the "balancing of interests" test:
When particular conduct is regulated in the interest of public order, and the regulation results in an indirect,
conditional, partial abridgment of speech, the duty of the courts is to determine which of the two conflicting interests
demands the greater protection under the particular circumstances presented. x x x We must, therefore, undertake the
"delicate and difficult task x x x to weigh the circumstances and to appraise the substantiality of the reasons
advanced in support of the regulation of the free enjoyment of rights x x x.

In enunciating standard premised on a judicial balancing of the conflicting social values and individual interests
competing for ascendancy in legislation which restricts expression, the court in Douds laid the basis for what has
been called the "balancing-of-interests" test which has found application in more recent decisions of the U.S.
Supreme Court. Briefly stated, the "balancing" test requires a court to take conscious and detailed consideration of
the interplay of interests observable in a given situation or type of situation.

xxxx

Although the urgency of the public interest sought to be secured by Congressional power restricting the individual’s
freedom, and the social importance and value of the freedom so restricted, "are to be judged in the concrete, not on
the basis of abstractions," a wide range of factors are necessarily relevant in ascertaining the point or line of
equilibrium. Among these are (a) the social value and importance of the specific aspect of the particular freedom
restricted by the legislation; (b) the specific thrust of the restriction, i.e., whether the restriction is direct or indirect,
whether or not the persons affected are few; (c) the value and importance of the public interest sought to be secured
by the legislation––the reference here is to the nature and gravity of the evil which Congress seeks to prevent; (d)
whether the specific restriction decreed by Congress is reasonably appropriate and necessary for the protection of
such public interest; and (e) whether the necessary safeguarding of the public interest involved may be achieved by
some other measure less restrictive of the protected freedom. 55

This balancing of interest test, to borrow from Professor Kauper, 56 rests on the theory that it is the court’s function in
a case before it when it finds public interests served by legislation, on the one hand, and the free expression clause
affected by it, on the other, to balance one against the other and arrive at a judgment where the greater weight shall
be placed. If, on balance, it appears that the public interest served by restrictive legislation is of such nature that it
outweighs the abridgment of freedom, then the court will find the legislation valid. In short, the balance-of-interests
theory rests on the basis that constitutional freedoms are not absolute, not even those stated in the free speech and
expression clause, and that they may be abridged to some extent to serve appropriate and important interests. 57 To
the mind of the Court, the balancing of interest doctrine is the more appropriate test to follow.

In the case at bar, petitioner used indecent and obscene language and a three (3)-month suspension was slapped on
him for breach of MTRCB rules. In this setting, the assertion by petitioner of his enjoyment of his freedom of
speech is ranged against the duty of the government to protect and promote the development and welfare of the
youth.

After a careful examination of the factual milieu and the arguments raised by petitioner in support of his claim to
free speech, the Court rules that the government’s interest to protect and promote the interests and welfare of the
children adequately buttresses the reasonable curtailment and valid restraint on petitioner’s prayer to continue as
program host of Ang Dating Daan during the suspension period.

No doubt, one of the fundamental and most vital rights granted to citizens of a State is the freedom of speech or
expression, for without the enjoyment of such right, a free, stable, effective, and progressive democratic state would
be difficult to attain. Arrayed against the freedom of speech is the right of the youth to their moral, spiritual,
intellectual, and social being which the State is constitutionally tasked to promote and protect. Moreover, the State is
also mandated to recognize and support the vital role of the youth in nation building as laid down in Sec. 13, Art. II
of the 1987 Constitution.

The Constitution has, therefore, imposed the sacred obligation and responsibility on the State to provide protection
to the youth against illegal or improper activities which may prejudice their general well-being. The Article on
youth, approved on second reading by the Constitutional Commission, explained that the State shall "extend social
protection to minors against all forms of neglect, cruelty, exploitation, immorality, and practices which may foster
racial, religious or other forms of discrimination." 58

Indisputably, the State has a compelling interest in extending social protection to minors against all forms of neglect,
exploitation, and immorality which may pollute innocent minds. It has a compelling interest in helping parents,
through regulatory mechanisms, protect their children’s minds from exposure to undesirable materials and
corrupting experiences. The Constitution, no less, in fact enjoins the State, as earlier indicated, to promote and
protect the physical, moral, spiritual, intellectual, and social well-being of the youth to better prepare them fulfill
their role in the field of nation-building.59 In the same way, the State is mandated to support parents in the rearing of
the youth for civic efficiency and the development of moral character. 60

Petitioner’s offensive and obscene language uttered in a television broadcast, without doubt, was easily accessible to
the children. His statements could have exposed children to a language that is unacceptable in everyday use. As
such, the welfare of children and the State’s mandate to protect and care for them, as parens patriae, 61 constitute a
substantial and compelling government interest in regulating petitioner’s utterances in TV broadcast as provided in
PD 1986.

FCC explains the duty of the government to act as parens patriae to protect the children who, because of age or
interest capacity, are susceptible of being corrupted or prejudiced by offensive language, thus:

[B]roadcasting is uniquely accessible to children, even those too young to read. Although Cohen’s written message,
["Fuck the Draft"], might have been incomprehensible to a first grader, Pacifica’s broadcast could have enlarged a
child’s vocabulary in an instant. Other forms of offensive expression may be withheld from the young without
restricting the expression at its source. Bookstores and motion picture theaters, for example, may be prohibited from
making indecent material available to children. We held in Ginsberg v. New York that the government’s interest in
the "well-being of its youth" and in supporting "parents’ claim to authority in their own household" justified the
regulation of otherwise protected expression. The ease with which children may obtain access to broadcast material,
coupled with the concerns recognized in Ginsberg, amply justify special treatment of indecent broadcasting.

Moreover, Gonzales v. Kalaw Katigbak likewise stressed the duty of the State to attend to the welfare of the young:

x x x It is the consensus of this Court that where television is concerned, a less liberal approach calls for observance.
This is so because unlike motion pictures where the patrons have to pay their way, television reaches every home
where there is a set. Children then will likely will be among the avid viewers of the programs therein shown. As was
observed by Circuit Court of Appeals Judge Jerome Frank, it is hardly the concern of the law to deal with the sexual
fantasies of the adult population. It cannot be denied though that the State as parens patriae is called upon to
manifest an attitude of caring for the welfare of the young. 62

The compelling need to protect the young impels us to sustain the regulatory action MTRCB took in the narrow
confines of the case. To reiterate, FCC justified the restraint on the TV broadcast grounded on the following
considerations: (1) the use of television with its unique accessibility to children, as a medium of broadcast of a
patently offensive speech; (2) the time of broadcast; and (3) the "G" rating of the Ang Dating Daan program. And in
agreeing with MTRCB, the court takes stock of and cites with approval the following excerpts from FCC:

It is appropriate, in conclusion, to emphasize the narrowness of our holding. This case does not involve a two-way
radio conversation between a cab driver and a dispatcher, or a telecast of an Elizabethan comedy. We have not
decided that an occasional expletive in either setting would justify any sanction. x x x The [FFC’s] decision rested
entirely on a nuisance rationale under which context is all important. The concept requires consideration of a host of
variables. The time of day was emphasized by the [FFC]. The content of the program in which the language is used
will affect the composition of the audience x x x. As Mr. Justice Sutherland wrote a ‘nuisance may be merely a right
thing in the wrong place, like a pig in the parlor instead of the barnyard.’ We simply hold that when the [FCC] finds
that a pig has entered the parlor, the exercise of its regulatory power does not depend on proof that the pig is
obscene. (Citation omitted.)
There can be no quibbling that the remarks in question petitioner uttered on prime-time television are blatantly
indecent if not outright obscene. It is the kind of speech that PD 1986 proscribes necessitating the exercise by
MTRCB of statutory disciplinary powers. It is the kind of speech that the State has the inherent prerogative, nay
duty, to regulate and prevent should such action served and further compelling state interests. One who utters
indecent, insulting, or offensive words on television when unsuspecting children are in the audience is, in the
graphic language of FCC, a "pig in the parlor." Public interest would be served if the "pig" is reasonably restrained
or even removed from the "parlor."

Ergo, petitioner’s offensive and indecent language can be subjected to prior restraint.

Petitioner theorizes that the three (3)-month suspension is either prior restraint or subsequent punishment that,
however, includes prior restraint, albeit indirectly.

After a review of the facts, the Court finds that what MTRCB imposed on petitioner is an administrative sanction or
subsequent punishment for his offensive and obscene language in Ang Dating Daan.

To clarify, statutes imposing prior restraints on speech are generally illegal and presumed unconstitutional breaches
of the freedom of speech. The exceptions to prior restraint are movies, television, and radio broadcast censorship in
view of its access to numerous people, including the young who must be insulated from the prejudicial effects of
unprotected speech. PD 1986 was passed creating the Board of Review for Motion Pictures and Television (now
MTRCB) and which requires prior permit or license before showing a motion picture or broadcasting a TV program.
The Board can classify movies and television programs and can cancel permits for exhibition of films or television
broadcast.lavvphi1.net

The power of MTRCB to regulate and even impose some prior restraint on radio and television shows, even
religious programs, was upheld in Iglesia Ni Cristo v. Court of Appeals. Speaking through Chief Justice Reynato S.
Puno, the Court wrote:

We thus reject petitioner’s postulate that its religious program is per se beyond review by the respondent Board. Its
public broadcast on TV of its religious program brings it out of the bosom of internal belief. Television is a medium
that reaches even the eyes and ears of children. The Court iterates the rule that the exercise of religious freedom can
be regulated by the State when it will bring about the clear and present danger of some substantive evil which the
State is duty bound to prevent, i.e., serious detriment to the more overriding interest of public health, public morals,
or public welfare. x x x

xxxx

While the thesis has a lot to commend itself, we are not ready to hold that [PD 1986] is unconstitutional for
Congress to grant an administrative body quasi-judicial power to preview and classify TV programs and enforce its
decision subject to review by our courts. As far back as 1921, we upheld this setup in Sotto vs. Ruiz, viz:

"The use of the mails by private persons is in the nature of a privilege which can be regulated in order to avoid its
abuse. Persons possess no absolute right to put into the mail anything they please, regardless of its character." 63

Bernas adds:

Under the decree a movie classification board is made the arbiter of what movies and television programs or parts of
either are fit for public consumption. It decides what movies are "immoral, indecent, contrary to law and/or good
customs, injurious to the prestige of the Republic of the Philippines or its people," and what "tend to incite
subversion, insurrection, rebellion or sedition," or "tend to undermine the faith and confidence of the people in their
government and/or duly constituted authorities," etc. Moreover, its decisions are executory unless stopped by a
court.64
Moreover, in MTRCB v. ABS-CBN Broadcasting Corporation,65 it was held that the power of review and prior
approval of MTRCB extends to all television programs and is valid despite the freedom of speech guaranteed by the
Constitution. Thus, all broadcast networks are regulated by the MTRCB since they are required to get a permit
before they air their television programs. Consequently, their right to enjoy their freedom of speech is subject to that
requirement. As lucidly explained by Justice Dante O. Tinga, government regulations through the MTRCB became
"a necessary evil" with the government taking the role of assigning bandwidth to individual broadcasters. The
stations explicitly agreed to this regulatory scheme; otherwise, chaos would result in the television broadcast
industry as competing broadcasters will interfere or co-opt each other’s signals. In this scheme, station owners and
broadcasters in effect waived their right to the full enjoyment of their right to freedom of speech in radio and
television programs and impliedly agreed that said right may be subject to prior restraint—denial of permit or
subsequent punishment, like suspension or cancellation of permit, among others.

The three (3) months suspension in this case is not a prior restraint on the right of petitioner to continue with the
broadcast of Ang Dating Daan as a permit was already issued to him by MTRCB for such broadcast. Rather, the
suspension is in the form of permissible administrative sanction or subsequent punishment for the offensive and
obscene remarks he uttered on the evening of August 10, 2004 in his television program, Ang Dating Daan. It is a
sanction that the MTRCB may validly impose under its charter without running afoul of the free speech clause. And
the imposition is separate and distinct from the criminal action the Board may take pursuant to Sec. 3(i) of PD 1986
and the remedies that may be availed of by the aggrieved private party under the provisions on libel or tort, if
applicable. As FCC teaches, the imposition of sanctions on broadcasters who indulge in profane or indecent
broadcasting does not constitute forbidden censorship. Lest it be overlooked, the sanction imposed is not per se for
petitioner’s exercise of his freedom of speech via television, but for the indecent contents of his utterances in a "G"
rated TV program.

More importantly, petitioner is deemed to have yielded his right to his full enjoyment of his freedom of speech to
regulation under PD 1986 and its IRR as television station owners, program producers, and hosts have impliedly
accepted the power of MTRCB to regulate the broadcast industry.

Neither can petitioner’s virtual inability to speak in his program during the period of suspension be plausibly treated
as prior restraint on future speech. For viewed in its proper perspective, the suspension is in the nature of an
intermediate penalty for uttering an unprotected form of speech. It is definitely a lesser punishment than the
permissible cancellation of exhibition or broadcast permit or license. In fine, the suspension meted was simply part
of the duties of the MTRCB in the enforcement and administration of the law which it is tasked to implement.
Viewed in its proper context, the suspension sought to penalize past speech made on prime-time "G" rated TV
program; it does not bar future speech of petitioner in other television programs; it is a permissible subsequent
administrative sanction; it should not be confused with a prior restraint on speech. While not on all fours, the Court,
in MTRCB,66 sustained the power of the MTRCB to penalize a broadcast company for exhibiting/airing a pre-taped
TV episode without Board authorization in violation of Sec. 7 of PD 1986.

Any simplistic suggestion, however, that the MTRCB would be crossing the limits of its authority were it to regulate
and even restrain the prime-time television broadcast of indecent or obscene speech in a "G" rated program is not
acceptable. As made clear in Eastern Broadcasting Corporation, "the freedom of television and radio broadcasting
is somewhat lesser in scope than the freedom accorded to newspaper and print media." The MTRCB, as a regulatory
agency, must have the wherewithal to enforce its mandate, which would not be effective if its punitive actions would
be limited to mere fines. Television broadcasts should be subject to some form of regulation, considering the ease
with which they can be accessed, and violations of the regulations must be met with appropriate and proportional
disciplinary action. The suspension of a violating television program would be a sufficient punishment and serve as
a deterrent for those responsible. The prevention of the broadcast of petitioner’s television program is justified, and
does not constitute prohibited prior restraint. It behooves the Court to respond to the needs of the changing times,
and craft jurisprudence to reflect these times.

Petitioner, in questioning the three-month suspension, also tags as unconstitutional the very law creating the
MTRCB, arguing that PD 1986, as applied to him, infringes also upon his freedom of religion. The Court has earlier
adequately explained why petitioner’s undue reliance on the religious freedom cannot lend justification, let alone an
exempting dimension to his licentious utterances in his program. The Court sees no need to address anew the
repetitive arguments on religious freedom. As earlier discussed in the disposition of the petition in G.R. No. 164785,
what was uttered was in no way a religious speech. Parenthetically, petitioner’s attempt to characterize his speech as
a legitimate defense of his religion fails miserably. He tries to place his words in perspective, arguing evidently as an
afterthought that this was his method of refuting the alleged distortion of his statements by the INC hosts of Ang
Tamang Daan. But on the night he uttered them in his television program, the word simply came out as profane
language, without any warning or guidance for undiscerning ears.

As to petitioner’s other argument about having been denied due process and equal protection of the law, suffice it to
state that we have at length debunked similar arguments in G.R. No. 164785. There is no need to further delve into
the fact that petitioner was afforded due process when he attended the hearing of the MTRCB, and that he was
unable to demonstrate that he was unjustly discriminated against in the MTRCB proceedings.

Finally, petitioner argues that there has been undue delegation of legislative power, as PD 1986 does not provide for
the range of imposable penalties that may be applied with respect to violations of the provisions of the law.

The argument is without merit.

In Edu v. Ericta, the Court discussed the matter of undue delegation of legislative power in the following wise:

It is a fundamental principle flowing from the doctrine of separation of powers that Congress may not delegate its
legislative power to the two other branches of the government, subject to the exception that local governments may
over local affairs participate in its exercise. What cannot be delegated is the authority under the Constitution to make
laws and to alter and repeal them; the test is the completeness of the statute in all its term and provisions when it
leaves the hands of the legislature. To determine whether or not there is an undue delegation of legislative power,
the inquiry must be directed to the scope and definiteness of the measure enacted. The legislature does not abdicate
its functions when it describes what job must be done, who is to do it, and what is the scope of his authority. For a
complex economy, that may indeed be the only way in which the legislative process can go forward. A distinction
has rightfully been made between delegation of power to make laws which necessarily involves a discretion as to
what it shall be, which constitutionally may not be done, and delegation of authority or discretion as to its execution
to be exercised under and in pursuance of the law, to which no valid objection can be made. The Constitution is thus
not to be regarded as denying the legislature the necessary resources of flexibility and practicability.

To avoid the taint of unlawful delegation, there must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lays down fundamental policy. Otherwise, the charge of
complete abdication may be hard to repel. A standard thus defines legislative policy, marks its limits, maps out its
boundaries and specifies the public agency to apply it. It indicates the circumstances under which the legislative
command is to be effected. It is the criterion by which legislative purpose may be carried out. Thereafter, the
executive or administrative office designated may in pursuance of the above guidelines promulgate supplemental
rules and regulations.67

Based on the foregoing pronouncements and analyzing the law in question, petitioner’s protestation about undue
delegation of legislative power for the sole reason that PD 1986 does not provide for a range of penalties for
violation of the law is untenable. His thesis is that MTRCB, in promulgating the IRR of PD 1986, prescribing a
schedule of penalties for violation of the provisions of the decree, went beyond the terms of the law.

Petitioner’s posture is flawed by the erroneous assumptions holding it together, the first assumption being that PD
1986 does not prescribe the imposition of, or authorize the MTRCB to impose, penalties for violators of PD 1986.
As earlier indicated, however, the MTRCB, by express and direct conferment of power and functions, is charged
with supervising and regulating, granting, denying, or canceling permits for the exhibition and/or television
broadcast of all motion pictures, television programs, and publicity materials to the end that no such objectionable
pictures, programs, and materials shall be exhibited and/or broadcast by television. Complementing this provision is
Sec. 3(k) of the decree authorizing the MTRCB "to exercise such powers and functions as may be necessary or
incidental to the attainment of the purpose and objectives of [the law]." As earlier explained, the investiture of
supervisory, regulatory, and disciplinary power would surely be a meaningless grant if it did not carry with it the
power to penalize the supervised or the regulated as may be proportionate to the offense committed, charged, and
proved. As the Court said in Chavez v. National Housing Authority:

x x x [W]hen a general grant of power is conferred or duty enjoined, every particular power necessary for the
exercise of the one or the performance of the other is also conferred. x x x [W]hen the statute does not specify the
particular method to be followed or used by a government agency in the exercise of the power vested in it by law,
said agency has the authority to adopt any reasonable method to carry out its function. 68

Given the foregoing perspective, it stands to reason that the power of the MTRCB to regulate and supervise the
exhibition of TV programs carries with it or necessarily implies the authority to take effective punitive action for
violation of the law sought to be enforced. And would it not be logical too to say that the power to deny or cancel a
permit for the exhibition of a TV program or broadcast necessarily includes the lesser power to suspend?

The MTRCB promulgated the IRR of PD 1986 in accordance with Sec. 3(a) which, for reference, provides that
agency with the power "[to] promulgate such rules and regulations as are necessary or proper for the implementation
of this Act, and the accomplishment of its purposes and objectives x x x." And Chapter XIII, Sec. 1 of the IRR
providing:

Section 1. VIOLATIONS AND ADMINISTRATIVE SANCTIONS.––Without prejudice to the immediate filing of


the appropriate criminal action and the immediate seizure of the pertinent articles pursuant to Section 13, any
violation of PD 1986 and its Implementing Rules and Regulations governing motion pictures, television programs,
and related promotional materials shall be penalized with suspension or cancellation of permits and/or licenses
issued by the Board and/or with the imposition of fines and other administrative penalty/penalties. The Board
recognizes the existing Table of Administrative Penalties attached without prejudice to the power of the Board to
amend it when the need arises. In the meantime the existing revised Table of Administrative Penalties shall be
enforced. (Emphasis added.)

This is, in the final analysis, no more than a measure to specifically implement the aforequoted provisions of Sec.
3(d) and (k). Contrary to what petitioner implies, the IRR does not expand the mandate of the MTRCB under the
law or partake of the nature of an unauthorized administrative legislation. The MTRCB cannot shirk its
responsibility to regulate the public airwaves and employ such means as it can as a guardian of the public.

In Sec. 3(c), one can already find the permissible actions of the MTRCB, along with the standards to be applied to
determine whether there have been statutory breaches. The MTRCB may evaluate motion pictures, television
programs, and publicity materials "applying contemporary Filipino cultural values as standard," and, from there,
determine whether these audio and video materials "are objectionable for being immoral, indecent, contrary to law
and/or good customs, [etc.] x x x" and apply the sanctions it deems proper. The lawmaking body cannot possibly
provide for all the details in the enforcement of a particular statute. 69 The grant of the rule-making power to
administrative agencies is a relaxation of the principle of separation of powers and is an exception to the non-
delegation of legislative powers.70 Administrative regulations or "subordinate legislation" calculated to promote the
public interest are necessary because of "the growing complexity of modern life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of administering the law." 71 Allowing the MTRCB some
reasonable elbow-room in its operations and, in the exercise of its statutory disciplinary functions, according it
ample latitude in fixing, by way of an appropriate issuance, administrative penalties with due regard for the severity
of the offense and attending mitigating or aggravating circumstances, as the case may be, would be consistent with
its mandate to effectively and efficiently regulate the movie and television industry.

But even as we uphold the power of the MTRCB to review and impose sanctions for violations of PD 1986, its
decision to suspend petitioner must be modified, for nowhere in that issuance, particularly the power-defining Sec. 3
nor in the MTRCB Schedule of Administrative Penalties effective January 1, 1999 is the Board empowered to
suspend the program host or even to prevent certain people from appearing in television programs. The MTRCB, to
be sure, may prohibit the broadcast of such television programs or cancel permits for exhibition, but it may not
suspend television personalities, for such would be beyond its jurisdiction. The MTRCB cannot extend its exercise
of regulation beyond what the law provides. Only persons, offenses, and penalties clearly falling clearly within the
letter and spirit of PD 1986 will be considered to be within the decree’s penal or disciplinary operation. And when it
exists, the reasonable doubt must be resolved in favor of the person charged with violating the statute and for whom
the penalty is sought. Thus, the MTRCB’s decision in Administrative Case No. 01-04 dated September 27, 2004 and
the subsequent order issued pursuant to said decision must be modified. The suspension should cover only the
television program on which petitioner appeared and uttered the offensive and obscene language, which sanction is
what the law and the facts obtaining call for.

In ending, what petitioner obviously advocates is an unrestricted speech paradigm in which absolute permissiveness
is the norm. Petitioner’s flawed belief that he may simply utter gutter profanity on television without adverse
consequences, under the guise of free speech, does not lend itself to acceptance in this jurisdiction. We repeat:
freedoms of speech and expression are not absolute freedoms. To say "any act that restrains speech should be
greeted with furrowed brows" is not to say that any act that restrains or regulates speech or expression is per se
invalid. This only recognizes the importance of freedoms of speech and expression, and indicates the necessity to
carefully scrutinize acts that may restrain or regulate speech.

WHEREFORE, the decision of the MTRCB in Adm. Case No. 01-04 dated September 27, 2004 is hereby
AFFIRMED with the MODIFICATION of limiting the suspension to the program Ang Dating Daan. As thus
modified, the fallo of the MTRCB shall read as follows:

WHEREFORE, in view of all the foregoing, a Decision is hereby rendered, imposing a penalty of THREE (3)
MONTHS SUSPENSION on the television program, Ang Dating Daan, subject of the instant petition.

Co-respondents Joselito Mallari, Luzviminda Cruz, and UNTV Channel 37 and its owner, PBC, are hereby
exonerated for lack of evidence.

Costs against petitioner.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-66614 January 25, 1988

PRIMITIVO LEVERIZA, FE LEVERIZA, PARUNGAO & ANTONIO C. VASCO, petitioners,


vs.
INTERMEDIATE APPELLATE COURT, MOBIL OIL PHILIPPINES & CIVIL AERONAUTICS
ADMINISTRATION, respondents.

BIDIN, J.:

This is a Petition for Review on certiorari seeking the reversal of the decision of the Intermediate Appellate Court,
Third Division * dated February 29, 1984 in AC-G.R. No. CV No. 61705 entitled Mobil Oil Philippines, Inc.,
plaintiff-appellee vs. Primitivo Leveriza Parungao, Antonio C. Vasco and Civil Aeronautics Administration,
defendants-appellants; Primitive Leveriza, Fe Leveriza Parungao and Antonio C. Leveriza, cross-defendant,
affirming in toto the decision of the trial court dated April 6, 1976.

As found by the trial court and adopted by the Intermediate Appellate Court, the facts of this case are as follows:

Around three contracts of lease resolve the basic issues in the instant case. These three contracts
are as follows:

First Contract. — For purposes of easy reference and brevity, this contract shall be referred to
hereinafter as Contract A. This is a "CONTRACT OF LEASE", executed between the REPUBLIC
OF THE PHILIPPINES, represented by Defendant CIVIL AERONAUTICS
ADMINISTRATION, as lessor, and ROSARIO C. LEVERIZA, as lessee, on April 2, 1965, over a
certain parcel of land at the MIA area, consisting of approximately 4,502 square meters, at a
monthly rental of P450.20, for a period of 25 years, (Exhibit "A", Exhibit "I-Leverizas", Exhibit
"I-CAA").

Second Contracts. — For purposes of easy references and brevity, this contract shall be referred to
hereinafter as Contract B. This is a "LEASE AGREEMENT", executed between ROSARIO C.
LEVERIZA, as lessor, and Plaintiff MOBIL OIL PHILIPPINES, INC., as lessee on May 21, 1965,
over 3,000 square meters of that SAME Parcel of land subject of Contract A above mentioned, at a
monthly rental of P1,500.00, for a period of 25 years (Exhibit 'B', Exhibit 4-Leverizas' ).

Third Contract. — For purposes of easy reference and brevity, this contract shall be referred to
hereinafter as Contract C. This is a "LEASE AGREEMENT", executed between Defendant CIVIL
AERONAUTICS ADMINISTRATION, as lessor, and plaintiff MOBIL OIL PHILIPPINES, INC.,
as lessee, on June 1, 1968 over that SAME parcel of land (Lot A, on plan being a portion of
Parcel, Psu 2031), containing an area of 3,000 square meters more or less, at a monthly rental of
P.25 per square meter for the second 200 square meters, and P.20 per square meter for the rest, for
a period of 29 (sic) years. (Exhibit "C").

There is no dispute among the parties that the subject matter of the three contracts of lease above
mentioned, Contract A, Contract B, and Contract C, is the same parcel of land, with the noted
difference that while in Contract A, the area leased is 4,502 square meters, in Contract B and
Contract C, the area has been reduced to 3,000 square meters. To summarize:

Contract A — a lease contract of April 2, 1965 between the Republic of the


Philippines, represented by Defendant Civil Aeronautics Administration and
Rosario C. Leveriza over a parcel of land containing an area of 4,502 square
meters, for 25 years.

Contract B — a lease contract (in effect a sublease) of May 21, 1965 between
defendant Rosario C. Leveriza and plaintiff Mobil Oil Philippines, Inc. over the
same parcel of land, but reduced to 3,000 square meters for 25 years; and

Contract C — a lease contract of June 1, 1968 between defendant Civil


Aeronautics Administration and plaintiff Mobil Oil Philippines, Inc., over the
same parcel of land, but reduced to 3,000 square meters, for 25 years.

It is important to note, for a clear understanding of the issues involved, that it appears that
defendant Civil Aeronautics Administration as LESSOR, leased the same parcel of land, for
durations of time that overlapped to two lessees, to wit: (1) Defendant Rosario C. Leveriza, and
that plaintiff Mobil Oil Philippines, Inc., as LESSEE, leased the same parcel of land from two
lessors, to wit: (1) defendant Rosario C. Leveriza and (2) defendant Civil Aeronautics
Administration, Inc., for durations of time that also overlapped.

For purposes of brevity defendant Civil Aeronautics Administration shall be referred to hereinafter
as defendant CAA.

Rosario C. Leveriza, the lessee in Contract A and the lessor in Contract B, is now deceased. This
is the reason why her successor-in-interest, her heirs, are sued, namely: Defendants Primitive
Leveriza, her second husband, (now also deceased), Fe Leveriza Parungao, her daughter by her
second husband, and Antonio C. Vasco, her son by her first husband. For purposes of brevity,
these defendants shall be referred to hereinafter as Defendants Leveriza.

Plaintiff Mobil Oil Philippines, Inc., shall be referred to hereinafter simply as the Plaintiff. (pp.
95-99, Record on Appeal).

Plaintiff in this case seeks the rescission or cancellation of Contract A and Contract B on the
ground that Contract A from which Contract B is derived and depends has already been cancelled
by the defendant Civil Aeronautics Administration and maintains that Contract C with the
defendant CAA is the only valid and subsisting contract insofar as the parcel of land, subject to the
present litigation is concerned. On the other hand, defendants Leverizas' claim that Contract A
which is their contract with CAA has never been legally cancelled and still valid and subsisting;
that it is Contract C between plaintiff and defendant CAA which should be declared void.

Defendant CAA asserts that Exhibit "A" is still valid and subsisting because its cancellation by
Guillermo Jurado was ineffective and asks the court to annul Contract A because of the violation
committed by defendant Leveriza in leasing the parcel of land to plaintiff by virtue of Contract B
without the consent of defendant CAA. Defendant CAA further asserts that Contract C not having
been approved by the Director of Public Works and Communications is not valid. ...

xxx xxx xxx

After trial, the lower court render judgment on April 6, 1976 the dispositive part of which reads:
WHEREFORE, after having thus considered the evidence of all the parties, testimonial and
documentary, and their memoranda and reply-memoranda, this Court hereby renders judgment:

1. Declaring Contract A as having been validly cancelled on June 28, 1966, and
has therefore ceased to have any effect as of that date;

2. Declaring that Contract B has likewise ceased to have any effect as of June
28, 1966 because of the cancellation of Contract A;

3. Declaring that Contract C was validly entered into on June 1, 1968, and that it
is still valid and subsisting;

4. Ordering defendant CAA to refund to defendants Leverizas the amount of


P32,189.30 with 6% per annum until fully paid;

5. Ordering defendants Leverizas to refund to plaintiff the amount of P48,000.00


with 6% interest per annum until fully paid;

6. Dismissing defendants Leverizas' four counterclaims against plaintiff;

7. Dismissing defendants Leverizas' cross-claim against defendant CAA;

8. Dismissing defendant CAA's counterclaim against plaintiff;

9. Dismissing defendant CAA's counterclaim against defendant Leverizas.

No pronouncements as to costs.

On June 2, 1976, defendant Leveriza filed a motion for new trial on the ground of newly discovered evidence, lack
of jurisdiction of the court over the case and lack of evidentiary support of the decision which was denied in the
order of November 12,1976 (Rollo, p. 17).

On July 27, 1976, the CAA filed a Motion for Reconsideration, averring that because the lot lease was properly
registered in the name of the Republic of the Philippines, it was only the President of the Philippines or an officer
duly designated by him who could execute the lease contract pursuant to Sec. 567 of the Revised Administrative
Code; that the Airport General Manager has no authority to cancel Contract A, the contract entered into between the
CAA and Leveriza, and that Contract C between the CAA and Mobil was void for not having been approved by the
Secretary of Public Works and Communications. Said motion was however denied on November 12, 1976 (Rollo, p.
18).

On appeal, the Intermediate Appellate Court, being in full accord with the trial court, rendered a decision on
February 29, 1984, the dispositive part of which reads:

WHEREFORE, finding no reversible error in the decision of the lower court dated April 6, 1976,
the same is hereby affirmed in toto.

Hence, this petition.

The petitioners raised the following assignment of errors:

I
THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE
ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION (CAA) HAD THE
STATUTORY AUTHORITY TO LEASE, EVEN WITHOUT APPROVAL OF THE THEN
SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, REAL PROPERTY
BELONGING TO THE REPUBLIC OF THE PHILIPPINES.

II

THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE


ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION HAD
STATUTORY AUTHORITY, WITHOUT THE APPROVAL OF THE THEN SECRETARY OF
PUBLIC WORKS AND COMMUNICATIONS, TO CANCEL A LEASE CONTRACT OVER
REAL PROPERTY OWNED BY THE REPUBLIC OF THE PHILIPPINES, WHICH
CONTRACT WAS APPROVED, AS REQUIRED BY LAW, BY THE SECRETARY.

III

THE INTERMEDIATE APPELLATE COURT ERRED WHEN IT RULED THAT THE


CONTRACT OF SUBLEASE (CONTRACT B) ENTERED INTO BETWEEN PETITIONERS'
PREDECESSOR-IN-INTEREST AND RESPONDENT MOBIL OIL PHILIPPINES, INC. WAS
WITHOUT THE CONSENT OF THE ADMINISTRATOR OF THE CIVIL AERONAUTICS
ADMINISTRATION.

The petition is devoid of merit.

There is no dispute that Contract "A" at the time of its execution was a valid contract. The issue therefore is whether
or not said contract is still subsisting after its cancellation by CAA on the ground of a sublease executed by
petitioners with Mobil Oil Philippines without the consent of CAA and the execution of another contract of lease
between CAA and Mobil Oil Philippines (Contract "C").

Petitioners contend that Contract "A" is still subsisting because Contract "B" is a valid sublease and does not
constitute a ground for the cancellation of Contract "A", while Contract "C", a subsequent lease agreement between
CAA and Mobil Oil Philippines is null and void, for lack of approval by the Department Secretary. Petitioners
anchor their position on Sections 567 and 568 of the Revised Administrative Code which require among others, that
subject contracts should be executed by the President of the Philippines or by an officer duly designated by him,
unless authority to execute the same is by law vested in some other officer (Petition, Rollo, pp. 15-16).

At the other extreme, respondent Mobil Oil Philippines asserts that Contract "A" was validly cancelled on June 28,
1966 and so was Contract "B" which was derived therefrom. Accordingly, it maintains that Contract "C" is the only
valid contract insofar as the parcel of land in question is concerned and that approval of the Department Head is not
necessary under Section 32 (par. 24) of the Republic Act 776 which expressly vested authority to enter into such
contracts in the Administrator of CAA (Comment; Rollo, p. 83).

On its part, respondent Civil Aeronautics Administration took the middle ground with its view that Contract "A" is
still subsisting as its cancellation is ineffective without the approval of the Department Head but said contract is not
enforceable because of petitioners' violation of its terms and conditions by entering into Contract "B" of sublease
without the consent of CAA. The CAA further asserts that Contract "C" not having been approved by the Secretary
of Public Works and Communications, is not valid (Rollo, p. 43). However, in its comment filed with the Supreme
Court, the CAA made a complete turnabout adopting the interpretation and ruling made by the trial court which was
affirmed by the Intermediate Appellate Court (Court of Appeals), that the CAA Administrator has the power to
execute the deed or contract of lease involving real properties under its administration belonging to the Republic of
the Philippines without the approval of the Department Head as clearly provided in Section 32, paragraph (24) of
Republic Act 776.
The issue narrows down to whether or not there is a valid ground for the cancellation of Contract "A."

Contract "A" was entered into by CAA as the lessor and the Leverizas as the lessee specifically "for the purpose of
operating and managing a gasoline station by the latter, to serve vehicles going in and out of the airport."

As regards prior consent of the lessor to the transfer of rights to the leased premises, the provision of paragraph 7 of
said Contract reads in full:

7. The Party of the Second part may transfer her rights to the leased premises but in such
eventuality, the consent of the Party of the First Part shall first be secured. In any event, such
transfer of rights shall have to respect the terms and conditions of this agreement.

Paragraph 8 provides the sanction for the violation of the above-mentioned terms and conditions of the contract.
Said paragraph reads:

8. Failure on the part of the Party of the Second Part to comply with the terms and conditions
herein agreed upon shall be sufficient for revocation of this contract by the Party of the First Part
without need of judicial demand.

It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract "B") with Mobil Oil
Philippines without the consent of CAA (lessor). The cancellation of the contract was made in a letter dated June 28,
1966 of Guillermo P. Jurado, Airport General Manager of CAA addressed to Rosario Leveriza, as follows:

(Letterhead)

June 28, 1966

Mrs. Rosario Leveriza


Manila International Airport

Madam:

It has been found out by the undersigned that you have sublet the property of the
CAA leased to you and by virtue of this, your lease contract is hereby cancelled
because of the violation of the stipulations of the contract. I would like to inform
you that even without having sublet the said property the said contract would
have been cancelled as per attached communication.

Very truly yours,

For the Director:

(Sgd.) Illegible
(Typed)

GUILLERMO P. JURADO
Airport General Manager

Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that the Airport General
Manager had no legal authority to make the cancellation. They maintain that it is only the Secretary of Public Works
and Communications, acting for the President, or by delegation of power, the Director of Civil Aeronautics
Administration who could validly cancel the contract. They do admit, however, and it is evident from the records
that the Airport General Manager signed "For the Director." Under the circumstances, there is no question that such
act enjoys the presumption of regularity, not to mention the unassailable fact that such act was subsequently
affirmed or ratified by the Director of the CAA himself (Record on Appeal, pp. 108-110).

Petitioners argue that cancelling or setting aside a contract approved by the Secretary is, in effect, repealing an act of
the Secretary which is beyond the authority of the Administrator.

Such argument is untenable. The terms and conditions under which such revocation or cancellation may be made,
have already been specifically provided for in Contract "A" which has already been approved by the Department
Head, It is evident that in the implementation of aforesaid contract, the approval of said Department Head is no
longer necessary if not redundant.

It is further contended that even granting that such cancellation was effective, a subsequent billing by the
Accounting Department of the CAA has in effect waived or nullified the rescission of Contract "A."

It will be recalled that the questioned cancellation of Contract "A" was among others, mainly based on the violation
of its terms and conditions, specifically, the sublease of the property by the lessee without the consent of the lessor.

The billing of the petitioners by the Accounting Department of the CAA if indeed it transpired, after the cancellation
of Contract "A" is obviously an error. However, this Court has already ruled that the mistakes of government
personnel should not affect public interest. In San Mauricio Mining Company v. Ancheta (105 SCRA 391, 422), it
has been held that as a matter of law rooted in the protection of public interest, and also as a general policy to protect
the government and the people, errors of government personnel in the performance of their duties should never
deprive the people of the right to rectify such error and recover what might be lost or be bartered away in any
actuation, deal or transaction concerned. In the case at bar, the lower court in its decision which has been affirmed
by the Court of Appeals, ordered the CAA to refund to the petitioners the amount of rentals which was not due from
them with 6% interest per annum until fully paid.

Petitioners further assail the interpretation of Contract "A", claiming that Contract "B" was a mere sublease to
respondent Mobil Oil Philippines, Inc. and requires no prior consent of CAA to perfect the same. Citing Article
1650 of the Civil Code, they assert that the prohibition to sublease must be expressed and cannot be merely implied
or inferred (Rollo, p. 151).

As correctly found by the Court of Appeals, petitioners in asserting the non- necessity for a prior consent interprets
the first sentence of paragraph 7 of Contract "A" to refer to an assignment of lease under Article 1649 of the Civil
Code and not to a mere sublease. A careful scrutiny of said paragraph of Contract "A" clearly shows that it speaks of
transfer of rights of Rosario Leveriza to the leased premises and not to assignment of the lease (Rollo, pp. 48-49).

Petitioners likewise argued that it was contemplated by the parties to Contract "A" that Mobil Oil Philippines would
be the owner of the gasoline station it would construct on the leased premises during the period of the lease, hence, it
is understood that it must be given a right to use and occupy the lot in question in the form of a sub-lease (Rollo, p.
152).

In Contract "A", it was categorically stated that it is the lessee (petitioner) who will manage and operate the gasoline
station. The fact that Mobil Oil was mentioned in that contract was clearly not intended to give approval to a
sublease between petitioners and said company but rather to insure that in the arrangements to be made between
them, it must be understood that after the expiration of the lease contract, whatever improvements have been
constructed in the leased premises shall be relinquished to CAA. Thus, this Court held that "the primary and
elementary rule of construction of documents is that when the words or language thereof is clear and plain or readily
understandable by any ordinary reader thereof, there is absolutely no room for interpretation or construction
anymore." (San Mauricio Mining Company v. Ancheta, supra).
Finally, petitioners contend that the administrator of CAA cannot execute without approval of the Department
Secretary, a valid contract of lease over real property owned by the Republic of the Philippines, citing Sections 567
and 568 of the Revised Administrative Code, which provide as follows:

SEC. 567. Authority of the President of the Philippines to execute contracts relative to real
property. — When the Republic of the Philippines is party to a deed conveying the title to real
property or is party to any lease or other contract relating to real property belonging to said
government, said deed or contract shall be executed on behalf of said government by the President
of the Philippines or by an officer duly designated by him, unless authority to execute the same is
by law expressly vested in some other officer. (Emphasis supplied)

SEC. 568. Authority of national officials to make contract. — Written contracts not within the
purview of the preceding section shall, in the absence of special provision, be executed, with the
approval of the proper Department Head, by the Chief of the Bureau or Office having control of
the appropriation against which the contract would create a charge; or if there is no such chief, by
the proper Department Head himself or the President of the Philippines as the case may require.

On the other hand, respondent CAA avers that the CAA Administrator has the authority to lease real property
belonging to the Republic of the Philippines under its administration even without the approval of the Secretary of
Public Works and Communications, which authority is expressly vested in it by law, more particularly Section 32
(24) of Republic Act 776, which reads:

Sec. 32. Powers and Duties of the Administrator. — Subject to the general control and supervision
of the Department Head, the Administrator shall have, among others, the following powers and
duties:

xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila International
Airport and all government aerodromes except those controlled or operated by the Armed Forces
of the Philippines including such power and duties as: ... (b) to enter into, make and execute
contracts of any kind with any person, firm, or public or private corporation or entity; (c) to
acquire, hold, purchase, or lease any personal or real property; right of ways, and easements which
may be proper or necessary: Provided, that no real property thus acquired and any other real
property of the Civil Aeronautics Administration shall be sold without the approval of the
President of the Philippines. ...

There is no dispute that the Revised Administrative Code is a general law while Republic Act 776
is a special law nor in the fact that the real property subject of the lease in Contract "C" is real
property belonging to the Republic of the Philippines.

Under 567 of the Revised Administrative Code, such contract of lease must be executed: (1) by the President of the
Philippines, or (2) by an officer duly designated by him or (3) by an officer expressly vested by law. It is readily
apparent that in the case at bar, the Civil Aeronautics Administration has the authority to enter into Contracts of
Lease for the government under the third category. Thus, as correctly ruled by the Court of Appeals, the Civil
Aeronautics Administration has the power to execute the deed or contract involving leases of real properties
belonging to the Republic of the Philippines, not because it is an entity duly designated by the President but because
the said authority to execute the same is, by law expressly vested in it.

Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director) of the Civil
Aeronautics Administration by reason of its creation and existence, administers properties belonging to the Republic
of the Philippines and it is on these properties that the Administrator must exercise his vast power and discharge his
duty to enter into, make and execute contract of any kind with any person, firm, or public or private corporation or
entity and to acquire, hold, purchase, or lease any personal or real property, right of ways and easements which may
be proper or necessary. The exception, however, is the sale of properties acquired by CAA or any other real
properties of the same which must have the approval of the President of the Philippines. The Court of appeals took
cognizance of the striking absence of such proviso in the other transactions contemplated in paragraph (24) and is
convinced as we are, that the Director of the Civil Aeronautics Administration does not need the prior approval of
the President or the Secretary of Public Works and Communications in the execution of Contract "C."

In this regard, this Court, ruled that another basic principle of statutory construction mandates that general
legislation must give way to special legislation on the same subject, and generally be so interpreted as to embrace
only cases in which the special provisions are not applicable (Sto. Domingo v. De los Angeles, 96 SCRA 139),. that
specific statute prevails over a general statute (De Jesus v. People, 120 SCRA 760) and that where two statutes are
of equal theoretical application to a particular case, the one designed therefor specially should prevail (Wil
Wilhensen, Inc. v. Baluyot, 83 SCRA 38)

WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of Appeals appealed from
is AFFIRMED in toto.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

A.M. No. 88-7-1861-RTC October 5, 1988

IN RE: DESIGNATION OF JUDGE RODOLFO U. MANZANO AS MEMBER OF THE ILOCOS NORTE


PROVINCIAL COMMITTEE ON JUSTICE.

PADILLA, J.:

On 4 July 1988, Judge Rodolfo U. Manzano, Executive Judge, RTC, Bangui, Ilocos Norte, Branch 19, sent this
Court a letter which reads:

Hon. Marcelo Fernan


Chief Justice of the Supreme Court
of the Philippines
Manila

Thru channels: Hon. Leo Medialdea


Court Administrator
Supreme Court of the Philippines

Sir:

By Executive Order RF6-04 issued on June 21, 1988 by the Honorable Provincial Governor of
Ilocos Norte, Hon. Rodolfo C. Farinas, I was designated as a member of the Ilocos Norte
Provincial Committee on Justice created pursuant to Presidential Executive Order No. 856 of 12
December 1986, as amended by Executive Order No. 326 of June 1, 1988. In consonance with
Executive Order RF6-04, the Honorable Provincial Governor of Ilocos Norte issued my
appointment as a member of the Committee. For your ready reference, I am enclosing herewith
machine copies of Executive Order RF6-04 and the appointment.

Before I may accept the appointment and enter in the discharge of the powers and duties of the
position as member of the Ilocos (Norte) Provincial Committee on Justice, may I have the honor to
request for the issuance by the Honorable Supreme Court of a Resolution, as follows:

(1) Authorizing me to accept the appointment and to as assume and discharge


the powers and duties attached to the said position;

(2) Considering my membership in the Committee as neither violative of the


Independence of the Judiciary nor a violation of Section 12, Article VIII, or of
the second paragraph of Section .7, Article IX (B), both of the Constitution, and
will not in any way amount to an abandonment of my present position as
Executive Judge of Branch XIX, Regional Trial Court, First Judicial Region,
and as a member of the Judiciary; and

(3) Consider my membership in the said Committee as part of the primary


functions of an Executive Judge.
May I please be favored soon by your action on this request.

Very respectfully yours,

(Sgd) RODOLFO U. MANZANO


Judge

An examination of Executive Order No. 856, as amended, reveals that Provincial/City Committees on Justice are
created to insure the speedy disposition of cases of detainees, particularly those involving the poor and indigent
ones, thus alleviating jail congestion and improving local jail conditions. Among the functions of the Committee
are—

3.3 Receive complaints against any apprehending officer, jail warden, final or judge who may be
found to have committed abuses in the discharge of his duties and refer the same to proper
authority for appropriate action;

3.5 Recommend revision of any law or regulation which is believed prejudicial to the proper
administration of criminal justice.

It is evident that such Provincial/City Committees on Justice perform administrative functions. Administrative
functions are those which involve the regulation and control over the conduct and affairs of individuals for; their
own welfare and the promulgation of rules and regulations to better carry out the policy of the legislature or such as
are devolved upon the administrative agency by the organic law of its existence (Nasipit Integrated Arrastre and
Stevedoring Services Inc., vs. Tapucar, SP-07599-R, 29 September 1978, Blacks Law Dictionary).

Furthermore, under Executive Order No. 326 amending Executive Order No. 856, it is provided that—

Section 6. Supervision.—The Provincial/City Committees on Justice shall be under the


supervision of the Secretary of justice Quarterly accomplishment reports shall be submitted to the
Office of the Secretary of Justice.

Under the Constitution, the members of the Supreme Court and other courts established by law shag not be
designated to any agency performing quasi- judicial or administrative functions (Section 12, Art. VIII, Constitution).

Considering that membership of Judge Manzano in the Ilocos Norte Provincial Committee on Justice, which
discharges a administrative functions, will be in violation of the Constitution, the Court is constrained to deny his
request.

Former Chief Justice Enrique M. Fernando in his concurring opinion in the case of Garcia vs. Macaraig (39 SCRA
106) ably sets forth:

2. While the doctrine of separation of powers is a relative theory not to be enforced with pedantic
rigor, the practical demands of government precluding its doctrinaire application, it cannot justify
a member of the judiciary being required to assume a position or perform a duty non-judicial in
character. That is implicit in the principle. Otherwise there is a plain departure from its command.
The essence of the trust reposed in him is to decide. Only a higher court, as was emphasized by
Justice Barredo, can pass on his actuation. He is not a subordinate of an executive or legislative
official, however eminent. It is indispensable that there be no exception to the rigidity of such a
norm if he is, as expected, to be confined to the task of adjudication. Fidelity to his sworn
responsibility no less than the maintenance of respect for the judiciary can be satisfied with
nothing less.
This declaration does not mean that RTC Judges should adopt an attitude of monastic insensibility or unbecoming
indifference to Province/City Committee on Justice. As incumbent RTC Judges, they form part of the structure of
government. Their integrity and performance in the adjudication of cases contribute to the solidity of such structure.
As public officials, they are trustees of an orderly society. Even as non-members of Provincial/City Committees on
Justice, RTC judges should render assistance to said Committees to help promote the laudable purposes for which
they exist, but only when such assistance may be reasonably incidental to the fulfillment of their judicial duties.

ACCORDINGLY, the aforesaid request of Judge Rodolfo U. Manzano is DENIED.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 102976 October 25, 1995

IRON AND STEEL AUTHORITY, petitioner,


vs.
THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER CORPORATION, respondents.

FELICIANO, J.:

Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P.D.) No. 272 dated 9 August 1973
in order, generally, to develop and promote the iron and steel industry in the Philippines. The objectives of the ISA
are spelled out in the following terms:

Sec. 2. Objectives — The Authority shall have the following objectives:

(a) to strengthen the iron and steel industry of the Philippines and to expand the domestic and
export markets for the products of the industry;

(b) to promote the consolidation, integration and rationalization of the industry in order to increase
industry capability and viability to service the domestic market and to compete in international
markets;

(c) to rationalize the marketing and distribution of steel products in order to achieve a balance
between demand and supply of iron and steel products for the country and to ensure that industry
prices and profits are at levels that provide a fair balance between the interests of investors,
consumers suppliers, and the public at large;

(d) to promote full utilization of the existing capacity of the industry, to discourage investment in
excess capacity, and in coordination, with appropriate government agencies to encourage capital
investment in priority areas of the industry;

(e) to assist the industry in securing adequate and low-cost supplies of raw materials and to reduce
the excessive dependence of the country on imports of iron and steel.

The list of powers and functions of the ISA included the following:

Sec. 4. Powers and Functions. — The authority shall have the following powers and functions:

xxx xxx xxx

(j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale
and/or lease to the companies involved if it is shown that such use of the State's power is
necessary to implement the construction of capacity which is needed for the attainment of the
objectives of the Authority;

xxx xxx xxx

(Emphasis supplied)

P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9 August 1973. 1 When ISA's
original term expired on 10 October 1978, its term was extended for another ten (10) years by Executive Order No.
555 dated 31 August 1979.

The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National Development Corporation
which is itself an entity wholly owned by the National Government, embarked on an expansion program embracing,
among other things, the construction of an integrated steel mill in Iligan City. The construction of such a steel mill
was considered a priority and major industrial project of the Government. Pursuant to the expansion program of the
NSC, Proclamation No. 2239 was issued by the President of the Philippines on 16 November 1982 withdrawing
from sale or settlement a large tract of public land (totalling about 30.25 hectares in area) located in Iligan City, and
reserving that land for the use and immediate occupancy of NSC.

Since certain portions of the public land subject matter Proclamation No. 2239 were occupied by a non-operational
chemical fertilizer plant and related facilities owned by private respondent Maria Cristina Fertilizer Corporation
("MCFC"), Letter of Instruction (LOI), No. 1277, also dated 16 November 1982, was issued directing the NSC to
"negotiate with the owners of MCFC, for and on behalf of the Government, for the compensation of MCFC's present
occupancy rights on the subject land." LOI No. 1277 also directed that should NSC and private respondent MCFC
fail to reach an agreement within a period of sixty (60) days from the date of LOI No. 1277, petitioner ISA was to
exercise its power of eminent domain under P.D. No. 272 and to initiate expropriation proceedings in respect of
occupancy rights of private respondent MCFC relating to the subject public land as well as the plant itself and
related facilities and to cede the same to the NSC.2

Negotiations between NSC and private respondent MCFC did fail. Accordingly, on 18 August 1983, petitioner ISA
commenced eminent domain proceedings against private respondent MCFC in the Regional Trial Court, Branch 1,
of Iligan City, praying that it (ISA) be places in possession of the property involved upon depositing in court the
amount of P1,760,789.69 representing ten percent (10%) of the declared market values of that property. The
Philippine National Bank, as mortgagee of the plant facilities and improvements involved in the expropriation
proceedings, was also impleaded as party-defendant.

On 17 September 1983, a writ of possession was issued by the trial court in favor of ISA. ISA in turn placed NSC in
possession and control of the land occupied by MCFC's fertilizer plant installation.

The case proceeded to trial. While the trial was ongoing, however, the statutory existence of petitioner ISA expired
on 11 August 1988. MCFC then filed a motion to dismiss, contending that no valid judgment could be rendered
against ISA which had ceased to be a juridical person. Petitioner ISA filed its opposition to this motion.

In an Order dated 9 November 1988, the trial court granted MCFC's motion to dismiss and did dismiss the case. The
dismissal was anchored on the provision of the Rules of Court stating that "only natural or juridical persons or
entities authorized by law may be parties in a civil case." 3 The trial court also referred to non-compliance by
petitioner ISA with the requirements of Section 16, Rule 3 of the Rules of Court. 4

Petitioner ISA moved for reconsideration of the trial court's Order, contending that despite the expiration of its term,
its juridical existence continued until the winding up of its affairs could be completed. In the alternative, petitioner
ISA urged that the Republic of the Philippines, being the real party-in-interest, should be allowed to be substituted
for petitioner ISA. In this connection, ISA referred to a letter from the Office of the President dated 28 September
1988 which especially directed the Solicitor General to continue the expropriation case.
The trial court denied the motion for reconsideration, stating, among other things that:

The property to be expropriated is not for public use or benefit [__] but for the use and benefit [__]
of NSC, a government controlled private corporation engaged in private business and for profit,
specially now that the government, according to newspaper reports, is offering for sale to the
public its [shares of stock] in the National Steel Corporation in line with the pronounced policy of
the present administration to disengage the government from its private business
ventures.5 (Brackets supplied)

Petitioner went on appeal to the Court of Appeals. In a Decision dated 8 October 1991, the Court of Appeals
affirmed the order of dismissal of the trial court. The Court of Appeals held that petitioner ISA, "a government
regulatory agency exercising sovereign functions," did not have the same rights as an ordinary corporation and that
the ISA, unlike corporations organized under the Corporation Code, was not entitled to a period for winding up its
affairs after expiration of its legally mandated term, with the result that upon expiration of its term on 11 August
1987, ISA was "abolished and [had] no more legal authority to perform governmental functions." The Court of
Appeals went on to say that the action for expropriation could not prosper because the basis for the proceedings, the
ISA's exercise of its delegated authority to expropriate, had become ineffective as a result of the delegate's
dissolution, and could not be continued in the name of Republic of the Philippines, represented by the Solicitor
General:

It is our considered opinion that under the law, the complaint cannot prosper, and therefore, has to
be dismissed without prejudice to the refiling of a new complaint for expropriation if the Congress
sees it fit." (Emphases supplied)

At the same time, however, the Court of Appeals held that it was premature for the trial court to have ruled
that the expropriation suit was not for a public purpose, considering that the parties had not yet rested their
respective cases.

In this Petition for Review, the Solicitor General argues that since ISA initiated and prosecuted the action for
expropriation in its capacity as agent of the Republic of the Philippines, the Republic, as principal of ISA, is entitled
to be substituted and to be made a party-plaintiff after the agent ISA's term had expired.

Private respondent MCFC, upon the other hand, argues that the failure of Congress to enact a law further extending
the term of ISA after 11 August 1988 evinced a "clear legislative intent to terminate the juridical existence of ISA,"
and that the authorization issued by the Office of the President to the Solicitor General for continued prosecution of
the expropriation suit could not prevail over such negative intent. It is also contended that the exercise of the
eminent domain by ISA or the Republic is improper, since that power would be exercised "not on behalf of the
National Government but for the benefit of NSC."

The principal issue which we must address in this case is whether or not the Republic of the Philippines is entitled to
be substituted for ISA in view of the expiration of ISA's term. As will be made clear below, this is really the only
issue which we must resolve at this time.

Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:

Sec. 1. Who May Be Parties. — Only natural or juridical persons or entities authorized by law
may be parties in a civil action.

Under the above quoted provision, it will be seen that those who can be parties to a civil action may be
broadly categorized into two (2) groups:

(a) those who are recognized as persons under the law whether natural, i.e., biological persons, on
the one hand, or juridical person such as corporations, on the other hand; and
(b) entities authorized by law to institute actions.

Examination of the statute which created petitioner ISA shows that ISA falls under category (b) above. P.D. No.
272, as already noted, contains express authorization to ISA to commence expropriation proceedings like those here
involved:

Sec. 4. Powers and Functions. — The Authority shall have the following powers and functions:

xxx xxx xxx

(j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale
and/or lease to the companies involved if it is shown that such use of the State's power is
necessary to implement the construction of capacity which is needed for the attainment of the
objectives of the Authority;

xxx xxx xxx

(Emphasis supplied)

It should also be noted that the enabling statute of ISA expressly authorized it to enter into certain kinds of
contracts "for and in behalf of the Government" in the following terms:

xxx xxx xxx

(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the government,
for the bulk purchase of materials, supplies or services for any sectors in the industry, and to
maintain inventories of such materials in order to insure a continuous and adequate supply thereof
and thereby reduce operating costs of such sector;

xxx xxx xxx

(Emphasis supplied)

Clearly, ISA was vested with some of the powers or attributes normally associated with juridical personality. There
is, however, no provision in P.D. No. 272 recognizing ISA as possessing general or comprehensive juridical
personality separate and distinct from that of the Government. The ISA in fact appears to the Court to be a non-
incorporated agency or instrumentality of the Republic of the Philippines, or more precisely of the Government of
the Republic of the Philippines. It is common knowledge that other agencies or instrumentalities of the Government
of the Republic are cast in corporate form, that is to say, are incorporated agencies or instrumentalities, sometimes
with and at other times without capital stock, and accordingly vested with a juridical personality distinct from the
personality of the Republic. Among such incorporated agencies or instrumentalities are: National Power
Corporation;6 Philippine Ports Authority;7 National Housing Authority;8 Philippine National Oil
Company;9 Philippine National Railways; 10 Public Estates Authority; 11 Philippine Virginia Tobacco
Administration,12 and so forth. It is worth noting that the term "Authority" has been used to designate both
incorporated and non-incorporated agencies or instrumentalities of the Government.

We consider that the ISA is properly regarded as an agent or delegate of the Republic of the Philippines. The
Republic itself is a body corporate and juridical person vested with the full panoply of powers and attributes which
are compendiously described as "legal personality." The relevant definitions are found in the Administrative Code of
1987:

Sec. 2. General Terms Defined. — Unless the specific words of the text, or the context as a whole,
or a particular statute, require a different meaning:
(1) Government of the Republic of the Philippines refers to the corporate governmental
entity through which the functions of government are exercised throughout the Philippines,
including, save as the contrary appears from the context, the various arms through which political
authority is made effective in the Philippines, whether pertaining to the autonomous regions, the
provincial, city, municipal or barangay subdivisions or other forms of local government.

xxx xxx xxx

(4) Agency of the Government refers to any of the various units of the Government, including a
department, bureau, office, instrumentality, or government-owned or controlled corporation, or a
local government or a distinct unit therein.

xxx xxx xxx

(10) Instrumentality refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some if
not all corporate powers, administering special funds, and enjoying operational autonomy, usually
through a charter. This term includes regulatory agencies, chartered institutions and government-
owned or controlled corporations.

xxx xxx xxx

(Emphases supplied)

When the statutory term of a non-incorporated agency expires, the powers, duties and functions as well as the assets
and liabilities of that agency revert back to, and are re-assumed by, the Republic of the Philippines, in the absence of
special provisions of law specifying some other disposition thereof such as, e.g., devolution or transmission of such
powers, duties, functions, etc. to some other identified successor agency or instrumentality of the Republic of the
Philippines. When the expiring agency is an incorporated one, the consequences of such expiry must be looked for,
in the first instance, in the charter of that agency and, by way of supplementation, in the provisions of the
Corporation Code. Since, in the instant case, ISA is a non-incorporated agency or instrumentality of the Republic, its
powers, duties, functions, assets and liabilities are properly regarded as folded back into the Government of the
Republic of the Philippines and hence assumed once again by the Republic, no special statutory provision having
been shown to have mandated succession thereto by some other entity or agency of the Republic.

The procedural implications of the relationship between an agent or delegate of the Republic of the Philippines and
the Republic itself are, at least in part, spelled out in the Rules of Court. The general rule is, of course, that an action
must be prosecuted and defended in the name of the real party in interest. (Rule 3, Section 2) Petitioner ISA was, at
the commencement of the expropriation proceedings, a real party in interest, having been explicitly authorized by its
enabling statute to institute expropriation proceedings. The Rules of Court at the same time expressly recognize the
role of representative parties:

Sec. 3. Representative Parties. — A trustee of an expressed trust, a guardian, an executor or


administrator, or a party authorized by statute may sue or be sued without joining the party for
whose benefit the action is presented or defended; but the court may, at any stage of the
proceedings, order such beneficiary to be made a party. . . . . (Emphasis supplied)

In the instant case, ISA instituted the expropriation proceedings in its capacity as an agent or delegate or
representative of the Republic of the Philippines pursuant to its authority under P.D. No. 272. The present
expropriation suit was brought on behalf of and for the benefit of the Republic as the principal of ISA. Paragraph 7
of the complaint stated:
7. The Government, thru the plaintiff ISA, urgently needs the subject parcels of land for the
construction and installation of iron and steel manufacturing facilities that are indispensable to the
integration of the iron and steel making industry which is vital to the promotion of public interest
and welfare. (Emphasis supplied)

The principal or the real party in interest is thus the Republic of the Philippines and not the National Steel
Corporation, even though the latter may be an ultimate user of the properties involved should the
condemnation suit be eventually successful.

From the foregoing premises, it follows that the Republic of the Philippines is entitled to be substituted in the
expropriation proceedings as party-plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little
differently, the expiration of ISA's statutory term did not by itself require or justify the dismissal of the eminent
domain proceedings.

It is also relevant to note that the non-joinder of the Republic which occurred upon the expiration of ISA's statutory
term, was not a ground for dismissal of such proceedings since a party may be dropped or added by order of the
court, on motion of any party or on the court's own initiative at any stage of the action and on such terms as are
just. 13 In the instant case, the Republic has precisely moved to take over the proceedings as party-plaintiff.

In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, 14 the Court recognized that the Republic
may initiate or participate in actions involving its agents. There the Republic of the Philippines was held to be a
proper party to sue for recovery of possession of property although the "real" or registered owner of the property
was the Philippine Ports Authority, a government agency vested with a separate juridical personality. The Court
said:

It can be said that in suing for the recovery of the rentals, the Republic of the Philippines acted as
principal of the Philippine Ports Authority, directly exercising the commission it had earlier
conferred on the latter as its agent. . . .15 (Emphasis supplied)

In E.B. Marcha, the Court also stressed that to require the Republic to commence all over again another
proceeding, as the trial court and Court of Appeals had required, was to generate unwarranted delay and
create needless repetition of proceedings:

More importantly, as we see it, dismissing the complaint on the ground that the Republic of the
Philippines is not the proper party would result in needless delay in the settlement of this
matter and also in derogation of the policy against multiplicity of suits. Such a decision would
require the Philippine Ports Authority to refile the very same complaint already proved by the
Republic of the Philippines and bring back as it were to square one. 16 (Emphasis supplied)

As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of the Philippines for the
ISA upon the ground that the action for expropriation could not prosper because the basis for the proceedings, the
ISA's exercise of its delegated authority to expropriate, had become legally ineffective by reason of the expiration of
the statutory term of the agent or delegated i.e., ISA. Since, as we have held above, the powers and functions of ISA
have reverted to the Republic of the Philippines upon the termination of the statutory term of ISA, the question
should be addressed whether fresh legislative authority is necessary before the Republic of the Philippines may
continue the expropriation proceedings initiated by its own delegate or agent.

While the power of eminent domain is, in principle, vested primarily in the legislative department of the
government, we believe and so hold that no new legislative act is necessary should the Republic decide, upon being
substituted for ISA, in fact to continue to prosecute the expropriation proceedings. For the legislative authority, a
long time ago, enacted a continuing or standing delegation of authority to the President of the Philippines to
exercise, or cause the exercise of, the power of eminent domain on behalf of the Government of the Republic of the
Philippines. The 1917 Revised Administrative Code, which was in effect at the time of the commencement of the
present expropriation proceedings before the Iligan Regional Trial Court, provided that:
Sec. 64. Particular powers and duties of the President of the Philippines. — In addition to his
general supervisory authority, the President of the Philippines shall have such other specific
powers and duties as are expressly conferred or imposed on him by law, and also, in particular, the
powers and duties set forth in this Chapter.

Among such special powers and duties shall be:

xxx xxx xxx

(h) To determine when it is necessary or advantageous to exercise the right of eminent domain in
behalf of the Government of the Philippines; and to direct the Secretary of Justice, where such act
is deemed advisable, to cause the condemnation proceedings to be begun in the court having
proper jurisdiction. (Emphasis supplied)

The Revised Administrative Code of 1987 currently in force has substantially reproduced the foregoing
provision in the following terms:

Sec. 12. Power of eminent domain. — The President shall determine when it is necessary or
advantageous to exercise the power of eminent domain in behalf of the National Government,
and direct the Solicitor General, whenever he deems the action advisable, to institute expopriation
proceedings in the proper court. (Emphasis supplied)

In the present case, the President, exercising the power duly delegated under both the 1917 and 1987
Revised Administrative Codes in effect made a determination that it was necessary and advantageous to
exercise the power of eminent domain in behalf of the Government of the Republic and accordingly
directed the Solicitor General to proceed with the suit. 17

It is argued by private respondent MCFC that, because Congress after becoming once more the depository of
primary legislative power, had not enacted a statute extending the term of ISA, such non-enactment must be deemed
a manifestation of a legislative design to discontinue or abort the present expropriation suit. We find this argument
much too speculative; it rests too much upon simple silence on the part of Congress and casually disregards the
existence of Section 12 of the 1987 Administrative Code already quoted above.

Other contentions are made by private respondent MCFC, such as, that the constitutional requirement of "public
use" or "public purpose" is not present in the instant case, and that the indispensable element of just compensation is
also absent. We agree with the Court of Appeals in this connection that these contentions, which were adopted and
set out by the Regional Trial Court in its order of dismissal, are premature and are appropriately addressed in the
proceedings before the trial court. Those proceedings have yet to produce a decision on the merits, since trial was
still on going at the time the Regional Trial Court precipitously dismissed the expropriation proceedings. Moreover,
as a pragmatic matter, the Republic is, by such substitution as party-plaintiff, accorded an opportunity to determine
whether or not, or to what extent, the proceedings should be continued in view of all the subsequent developments in
the iron and steel sector of the country including, though not limited to, the partial privatization of the NSC.

WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October 1991 to the extent that it
affirmed the trial court's order dismissing the expropriation proceedings, is hereby REVERSED and SET ASIDE
and the case is REMANDED to the court a quo which shall allow the substitution of the Republic of the Philippines
for petitioner Iron and Steel Authority and for further proceedings consistent with this Decision. No pronouncement
as to costs.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 120319 October 6, 1995

LUZON DEVELOPMENT BANK, petitioner,


vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA in
her capacity as VOLUNTARY ARBITRATOR, respondents.

ROMERO, J.:

From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon Development
Bank Employees (ALDBE) arose an arbitration case to resolve the following issue:

Whether or not the company has violated the Collective Bargaining Agreement provision and the
Memorandum of Agreement dated April 1994, on promotion.

At a conference, the parties agreed on the submission of their respective Position Papers on December 1-15, 1994.
Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's Position Paper on January 18,
1995. LDB, on the other hand, failed to submit its Position Paper despite a letter from the Voluntary Arbitrator
reminding them to do so. As of May 23, 1995 no Position Paper had been filed by LDB.

On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective Bargaining
Agreement provision nor the Memorandum of Agreement on promotion.

Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary Arbitrator and to
prohibit her from enforcing the same.

In labor law context, arbitration is the reference of a labor dispute to an impartial third person for determination on
the basis of evidence and arguments presented by such parties who have bound themselves to accept the decision of
the arbitrator as final and binding.

Arbitration may be classified, on the basis of the obligation on which it is based, as either compulsory or voluntary.

Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their
right to strike and are compelled to accept the resolution of their dispute through arbitration by a third party. 1 The
essence of arbitration remains since a resolution of a dispute is arrived at by resort to a disinterested third party
whose decision is final and binding on the parties, but in compulsory arbitration, such a third party is normally
appointed by the government.

Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a voluntary
arbitration clause in their collective agreement, to an impartial third person for a final and binding
resolution.2 Ideally, arbitration awards are supposed to be complied with by both parties without delay, such that
once an award has been rendered by an arbitrator, nothing is left to be done by both parties but to comply with the
same. After all, they are presumed to have freely chosen arbitration as the mode of settlement for that particular
dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide their case.
Above all, they have mutually agreed to de bound by said arbitrator's decision.

In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to include therein
provisions for a machinery for the resolution of grievances arising from the interpretation or implementation of the
CBA or company personnel policies.3 For this purpose, parties to a CBA shall name and designate therein a
voluntary arbitrator or a panel of arbitrators, or include a procedure for their selection, preferably from those
accredited by the National Conciliation and Mediation Board (NCMB). Article 261 of the Labor Code accordingly
provides for exclusive original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the
interpretation or implementation of the CBA and (2) the interpretation or enforcement of company personnel
policies. Article 262 authorizes them, but only upon agreement of the parties, to exercise jurisdiction over other
labor disputes.

On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the following
enumerated cases:

. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in the absence of stenographic notes,
the following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits,
all other claims, arising from employer-employee relations, including those of persons in domestic
or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless
of whether accompanied with a claim for reinstatement.

xxx xxx xxx

It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators is
quite limited compared to the original jurisdiction of the labor arbiter and the appellate jurisdiction of the National
Labor Relations Commission (NLRC) for that matter.4 The state of our present law relating to voluntary arbitration
provides that "(t)he award or decision of the Voluntary Arbitrator . . . shall be final and executory after ten (10)
calendar days from receipt of the copy of the award or decision by the parties," 5 while the "(d)ecision, awards, or
orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or orders."6 Hence, while there is an express mode of
appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the
decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not, elevated to the
Supreme Court itself on a petition for certiorari,7 in effect equating the voluntary arbitrator with the NLRC or the
Court of Appeals. In the view of the Court, this is illogical and imposes an unnecessary burden upon it.

In Volkschel Labor Union, et al. v. NLRC, et al.,8 on the settled premise that the judgments of courts and awards of
quasi-judicial agencies must become final at some definite time, this Court ruled that the awards of voluntary
arbitrators determine the rights of parties; hence, their decisions have the same legal effect as judgments of a court.
In Oceanic Bic Division (FFW), et al. v. Romero, et al.,9 this Court ruled that "a voluntary arbitrator by the nature of
her functions acts in a quasi-judicial capacity." Under these rulings, it follows that the voluntary arbitrator, whether
acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but independent of, and apart from, the
NLRC since his decisions are not appealable to the latter.10

Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall exercise:

xxx xxx xxx

(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange Commission, the Employees Compensation
Commission and the Civil Service Commission, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17
of the Judiciary Act of 1948.

xxx xxx xxx

Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered
as a quasi-judicial agency, board or commission, still both he and the panel are comprehended within the concept of
a "quasi-judicial instrumentality." It may even be stated that it was to meet the very situation presented by the quasi-
judicial functions of the voluntary arbitrators here, as well as the subsequent arbitrator/arbitral tribunal operating
under the Construction Industry Arbitration Commission,11 that the broader term "instrumentalities" was purposely
included in the above-quoted provision.

An "instrumentality" is anything used as a means or agency. 12 Thus, the terms governmental "agency" or
"instrumentality" are synonymous in the sense that either of them is a means by which a government acts, or by
which a certain government act or function is performed. 13 The word "instrumentality," with respect to a state,
contemplates an authority to which the state delegates governmental power for the performance of a state
function.14 An individual person, like an administrator or executor, is a judicial instrumentality in the settling of an
estate,15 in the same manner that a sub-agent appointed by a bankruptcy court is an instrumentality of the
court,16 and a trustee in bankruptcy of a defunct corporation is an instrumentality of the state. 17

The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under
the provisions therefor in the Labor Code and he falls, therefore, within the contemplation of the term
"instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his functions and powers are provided for in
the Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as
contemplated therein. It will be noted that, although the Employees Compensation Commission is also provided for
in the Labor Code, Circular No. 1-91, which is the forerunner of the present Revised Administrative Circular No. 1-
95, laid down the procedure for the appealability of its decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to
the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those
of the quasi-judicial agencies, boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform
procedure for the appellate review of adjudications of all quasi-judicial entities18 not expressly excepted from the
coverage of Sec. 9 of B.P. 129 by either the Constitution or another statute. Nor will it run counter to the legislative
intendment that decisions of the NLRC be reviewable directly by the Supreme Court since, precisely, the cases
within the adjudicative competence of the voluntary arbitrator are excluded from the jurisdiction of the NLRC or the
labor arbiter.

In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the
Arbitration Law, arbitration is deemed a special proceeding of which the court specified in the contract or
submission, or if none be specified, the Regional Trial Court for the province or city in which one of the parties
resides or is doing business, or in which the arbitration is held, shall have jurisdiction. A party to the controversy
may, at any time within one (1) month after an award is made, apply to the court having jurisdiction for an order
confirming the award and the court must grant such order unless the award is vacated, modified or corrected. 19

In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial court.
Consequently, in a petition for certiorari from that award or decision, the Court of Appeals must be deemed to have
concurrent jurisdiction with the Supreme Court. As a matter of policy, this Court shall henceforth remand to the
Court of Appeals petitions of this nature for proper disposition.

ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 116418 March 7, 1995

SALVADOR C. FERNANDEZ and ANICIA M. DE LIMA, petitioners,


vs.
HON. PATRICIA A. STO. TOMAS, Chairman, and HON. RAMON B. ERENETA, Commissioner, Civil
Service Commission, respondents.

FELICIANO, J.:

In this Petition for Certiorari, Prohibition and Mandamus with Prayer for a Temporary Restraining Order,
petitioners Salvador C. Fernandez and Anicia M. de Lima assail the validity of Resolution No. 94-3710 of the Civil
Service Commission ("Commission") and the authority of the Commission to issue the same.

Petitioner Fernandez was serving as Director of the Office of Personnel Inspection and Audit ("OPIA") while
petitioner de Lima was serving as Director of the Office of the Personnel Relations ("OPR"), both at the Central
Office of the Civil Service Commission in Quezon City, Metropolitan Manila. While petitioners were so serving,
Resolution No. 94-3710 signed by public respondents Patricia A.. Sto. Tomas and Ramon Ereneta, Jr., Chairman
and Commissioner, respectively, of the Commission, was issued on 7 June 1994.1 Resolution No. 94-3710 needs to
be quoted in full:

RESOLUTION NO. 94-3710

WHEREAS, Section 17 of Book V of Executive Order 292 provides that ". . . as an independent
constitutional body, the Commission may effect changes in the organization as the need arises;"

WHEREAS, the Commission finds it imperative to effect changes in the organization to


streamline its operations and improve delivery of public service;

WHEREAS, the Commission finds it necessary to immediately effect changes in the organization
of the Central Offices in view of the need to implement new programs in lieu of those functions
which were transferred to the Regional Offices;

WHEREFORE, foregoing premises considered, the Commission hereby RESOLVES to effect the
following changes in its organization, specifically in the Central Offices:

1. The OCSS [Office of Career Systems and Standards], OPIA [Office of Personnel Inspection
and Audit] and OPR [Office of Personnel Relations] are merged to form the Research and
Development Office (RDO).

2. The Office for Human Resource Development (OHRD) is renamed Human Resource
Development Office (HRDO).
3. The following functions and the personnel assigned to the unit performing said functions are
hereby transferred to HRDO:

a. Administration of the Honor and Awards program under OCSS;

b. Registration and Accreditation of Unions under OPR; and

c. Accreditation of Agencies to take final action on appointments under OPIA.

4. The Office for Central Personnel Records (OCPR) is renamed Management Information Office
(MIO).

5. The Information technology functions of OPM and the personnel assigned to the unit are
transferred to MIO.

6. The following functions of OPM and the personnel assigned to the unit performing said
functions are hereby transferred to the Office of the Executive Director:

a. Financial Audit and Evaluation;

b. Internal Management and Improvement;

c. Research and Statistics; and

d. Planning and Programming.

7. The library service and its personnel under OCPR are transferred to the Central Administrative
Office.

8. The budget allocated for the various functions shall be transferred to the Offices where the
functions are transferred. Records, fixtures and equipment that go with the functions shall be
moved to where the functions are transferred.

Annex A contains the manning list for all the offices, except the OCES.

The changes in the organization and in operations shall take place before end of July 1994.

Done in Quezon City, July 07, 1994.

(Signed)
Patricia A. Sto. Tomas
Chairman

(Signed) Did not participate


Ramon P. Ereneta, Jr., Thelma P. Gaminde
Commissioner Commissioner

Attested by:
(Signed)
Carmencita Giselle B. Dayson
Board Secretary V 2
During the general assembly of officers and employees of the Commission held in the morning of 28 July 1994,
Chairman Sto. Tomas, when apprised of objections of petitioners, expressed the determination of the Commission to
implement Resolution No. 94-3710 unless restrained by higher authority.

Petitioners then instituted this Petition. In a Resolution dated 23 August 1994, the Court required public respondents
to file a Comment on the Petition. On 21 September 1994, petitioners filed an Urgent Motion for Issuance of a
Temporary Restraining Order, alleging that petitioners had received Office Orders from the Commission assigning
petitioner Fernandez to Region V at Legaspi City and petitioner de Lima to Region III in San Fernando, Pampanga
and praying that public respondents be restrained from enforcing these Office Orders. The Court, in a Resolution
dated 27 September 1994, granted this Motion and issued the Temporary Restraining Order prayed for by
petitioners.

The Commission filed its own Comment, dated 12 September 1994, on the Petition and then moved to lift the
Temporary Restraining Order. The Office of the Solicitor General filed a separate Comment dated 28 November
1994, defending the validity of Resolution No. 94-3710 and urging dismissal of the Petition. Petitioners filed
separate Replies to these Comments. The Commission in turn filed a Rejoinder (denominated "Comment [on] the
Reply").

The principal issues raised in this Petition are the following:

(1) Whether or not the Civil Service Commission had legal authority to issue Resolution No. 94-
3710 to the extent it merged the OCSS [Office of Career Systems and Standards], the OPIA
[Office of Personnel Inspection and Audit] and the OPR [Office of Personnel Relations], to form
the RDO [Research and Development Office]; and

(2) Whether or not Resolution No. 94-3710 violated petitioners' constitutional right to security of
tenure.

I.

The Revised Administrative Code of 1987 (Executive Order No. 292 dated 25 July 1987) sets out, in Book V, Title
I, Subtitle A, Chapter 3, the internal structure and organization of the Commission in the following terms:

Sec. 16. Offices in the Commission — The Commission shall have the following offices:

(1) The Office of the Executive Director — . . .

(2) The Merit System Protection Board — . . .

(3) The Office of Legal Affairs — . . .

(4) The Office of Planning and Management — . . .

(5) The Central Administrative Office — . . .

(6) The Office of Central Personnel Records — . . .

(7) The Office of Position Classification and


Compensation — . . .

(8) The Office of Recruitment, Examination and


Placement — . . .
(9) The Office of Career Systems and Standards shall provide leadership and assistance in the
formulation and evaluation of personnel systems and standards relative to performance appraisal,
merit promotion and employee incentive benefits and awards.

(10) The Office of Human Resource Development — . . .

(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and
regulations for the effective conduct of inspection and audit of personnel and personnel
management programs and the exercise of delegated authority; provide technical and advisory
services to Civil Service Regional Offices and government agencies in the implementation of their
personnel programs and evaluation systems.

(12) The Office of Personnel Relations shall provide leadership and assistance in the development
and implementation of policies, standards, rules and regulations governing corporate officials and
employees in the areas of recruitment, examination, placement, career development, merit and
awards systems, position classification and compensation, performance appraisal, employee
welfare and benefits, discipline and other aspects of personnel management on the basis of
comparable industry practices.

(13) The Office of the Corporate Affairs — . . .

(14) The Office of Retirement Administration — . . .

(15) The Regional and Field Offices. — . . . (Emphases in the original)

Immediately after the foregoing listing of offices of the Commission and their respective functions, the 1987
Revised Administrative Code goes on to provide as follows:

Sec. 17. Organizational Structure. — Each office of the Commission shall be headed by a
Director with at least one (1) Assistant Director, and may have such divisions as are necessary to
carry out their respective functions. As an independent constitutional body, the Commission may
effect chances in the organization as the need arises.

xxx xxx xxx 3

(Emphasis supplied)

Examination of the foregoing statutory provisions reveals that the OCSS, OPIA and OPR, and as well each of the
other Offices listed in Section 16 above, consist of aggregations of Divisions, each of which Divisions is in turn a
grouping of Sections. Each Section, Division and Office comprises a group of positions within the agency called the
Civil Service Commission, each group being entrusted with a more or less definable function or functions. These
functions are related to one another, each of them being embraced by a common or general subject matter. Clearly,
each Office is an internal department or organizational unit within the Commission and that accordingly, the OCSS,
OPIA and OPR, as well as all the other Offices within the Commission constitute administrative subdivisions of the
CSC. Put a little differently, these offices relate to the internal structure of the Commission.

What did Resolution No. 94-3710 of the Commission do? Examination of Resolution No. 94-3710 shows that
thereby the Commission re-arranged some of the administrative units (i.e., Offices) within the Commission and,
among other things, merged three (3) of them (OCSS, OPIA and OPR) to form a new grouping called the "Research
and Development Office (RDO)." The same Resolution renamed some of the Offices of the Commission, e.g., the
Office for Human Resource Development (OHRD) was renamed Human Resource Development Office (HRDO);
the Office for Central Personnel Records (OCPR) was renamed Management Information Office (MIO). The
Commission also re-allocated certain functions moving some functions from one Office to another; e.g., the
information technology function of OPM (Office of Planning and Management) was transferred to the newly named
Management Information Office (MIO). This re-allocation or re-assignment of some functions carried with it the
transfer of the budget earmarked for such function to the Office where the function was transferred. Moreover, the
personnel, records, fixtures and equipment that were devoted to the carrying out of such functions were moved to
the Offices to where the functions were transferred.

The objectives sought by the Commission in enacting Resolution No. 94-3710 were described in that Resolution in
broad terms as "effect[ing] changes in the organization to streamline [the Commission's] operations and improve
delivery of service." These changes in internal organization were rendered necessary by, on the one hand, the
decentralization and devolution of the Commission's functions effected by the creation of fourteen (14) Regional
Offices and ninety-five (95) Field Offices of the Commission throughout the country, to the end that the
Commission and its staff may be brought closer physically to the government employees that they are mandated to
serve. In the past, its functions had been centralized in the Head Office of the Commission in Metropolitan Manila
and Civil Service employees all over the country were compelled to come to Manila for the carrying out of
personnel transactions. Upon the other hand, the dispersal of the functions of the Commission to the Regional
Offices and the Field Offices attached to various governmental agencies throughout the country makes possible the
implementation of new programs of the Commission at its Central Office in Metropolitan Manila.

The Commission's Office Order assigning petitioner de Lima to the CSC Regional Office No. 3 was precipitated by
the incumbent Regional Director filing an application for retirement, thus generating a need to find a replacement
for him. Petitioner de Lima was being assigned to that Regional Office while the incumbent Regional Director was
still there to facilitate her take over of the duties and functions of the incumbent Director. Petitioner de Lima's prior
experience as a labor lawyer was also a factor in her assignment to Regional Office No. 3 where public sector unions
have been very active. Petitioner Fernandez's assignment to the CSC Regional Office No. 5 had, upon the other
hand, been necessitated by the fact that the then incumbent Director in Region V was under investigation and needed
to be transferred immediately to the Central Office. Petitioner Fernandez was deemed the most likely designee for
Director of Regional Office No. 5 considering that the functions previously assigned to him had been substantially
devolved to the Regional Offices such that his reassignment to a Regional Office would result in the least disruption
of the operations of the Central Office.4

It thus appears to the Court that the Commission was moved by quite legitimate considerations of administrative
efficiency and convenience in promulgating and implementing its Resolution No. 94-3710 and in assigning
petitioner Salvador C. Fernandez to the Regional Office of the Commission in Region V in Legaspi City and
petitioner Anicia M. de Lima to the Commission's Regional Office in Region III in San Fernando, Pampanga. It is
also clear to
the Court that the changes introduced and formalized through Resolution No. 94-3710 — re-naming of existing
Offices; re-arrangement of the groupings of Divisions and Sections composing particular Offices; re-allocation of
existing functions (and related personnel; budget, etc.) among the re-arranged Offices — are precisely the kind of
internal changes which are referred to in Section 17 (Book V, Title I, Subtitle A, Chapter 3) of the 1987 Revised
Administrative Code), quoted above, as "chances in the organization" of the Commission.

Petitioners argue that Resolution No. 94-3710 effected the "abolition" of public offices, something which may be
done only by the same legislative authority which had created those public offices in the first place.

The Court is unable, in the circumstances of this case, to accept this argument. The term "public office" is frequently
used to refer to the right, authority and duty, created and conferred by law, by which, for a given period either fixed
by law or enduring at the pleasure of the creating power, an individual is invested with some portion of the
sovereign functions of government, to be exercised by that individual for the benefit of the public. 5 We consider that
Resolution No. 94-3710 has not abolished any public office as that term is used in the law of public officers. 6 It is
essential to note that none of the "changes in organization" introduced by Resolution No. 94-3710 carried with it or
necessarily involved the termination of the relationship of public employment between the Commission and any of
its officers and employees. We find it very difficult to suppose that the 1987 Revised Administrative Code having
mentioned fourteen (14) different "Offices" of the Civil Service Commission, meant to freeze those Offices and to
cast in concrete, as it were, the internal organization of the commission until it might please Congress to change
such internal organization regardless of the ever changing needs of the Civil Service as a whole. To the contrary, the
legislative authority had expressly authorized the Commission to carry out "changes in the organization," as the need
[for such changes] arises." 7 Assuming, for purposes of argument merely, that legislative authority was necessary to
carry out the kinds off changes contemplated in Resolution No. 94-3710 (and the Court is not saying that such
authority is necessary), such legislative authority was validly delegated to the Commission by Section 17 earlier
quoted. The legislative standards to be observed and respected in the exercise of such delegated authority are set out
not only in Section 17 itself (i.e., "as the need arises"), but also in the Declaration of Policies found in Book V, Title
I, Subtitle A, Section 1 of the 1987 Revised Administrative Code which required the Civil Service Commission

as the central personnel agency of the Government [to] establish a


career service, adopt measures to promote — efficiency — [and] responsiveness . . . in the civil
service . . . and that personnel functions shall be decentralized, delegating the corresponding
authority to the departments, offices and agencies where such functions can be effectively
performed. (Emphasis supplied)

II.

We turn to the second claim of petitioners that their right to security of tenure was breached by the respondents in
promulgating Resolution No. 94-3710 and ordering petitioners' assignment to the Commission's Regional Offices in
Regions III and V. Section 2(3) of Article IX(B) of the 1987 Constitution declared that "no officer or employee of
the Civil Service shall be removed or suspended except for cause provided by law." Petitioners in effect contend that
they were unlawfully removed from their positions in the OPIA and OPR by the implementation of Resolution No.
94-3710 and that they cannot, without their consent, be moved out to the Regional Offices of the Commission.

We note, firstly, that appointments to the staff of the Commission are not appointments to a specified public office
but rather appointments to particular positions or ranks. Thus, a person may be appointed to the position of Director
III or Director IV; or to the position of Attorney IV or Attorney V; or to the position of Records Officer I or Records
Officer II; and so forth. In the instant case, petitioners were each appointed to the position of Director IV, without
specification of any particular office or station. The same is true with respect to the other persons holding the same
position or rank of Director IV of the Commission.

Section 26(7), Book V, Title I, Subtitle A of the 1987 Revised Administrative Code recognizes reassignment as a
management prerogative vested in the Commission and, for that matter, in any department or agency of government
embraced in the civil service:

Sec. 26. Personnel Actions. — . . .

xxx xxx xxx

As used in this Title, any action denoting the movement or progress of personnel in the civil
service shall be known as personnel action. Such action shall include appointment through
certification, promotion, transfer, re-instatement, re-employment, detail, reassignment, demotion,
and separation. All personnel actions shall be in accordance with such rules, standards, and
regulations as may be promulgated by the Commission.

xxx xxx xxx

(7) Reassignment. An employee may be re-assigned from one organizational unit to another in the
same agency, Provided, That such re-assignment shall not involve a reduction in rank status and
salary. (Emphasis supplied)

It follows that the reassignment of petitioners Fernandez and de Lima from their previous positions in OPIA and
OPR, respectively, to the Research and Development Office (RDO) in the Central Office of the Commission in
Metropolitan Manila and their subsequent assignment from the RDO to the Commission's Regional Offices in
Regions V and III had been effected with express statutory authority and did not constitute removals without lawful
cause. It also follows that such re-assignment did not involve any violation of the constitutional right of petitioners
to security of tenure considering that they retained their positions of Director IV and would continue to enjoy the
same rank, status and salary at their new assigned stations which they had enjoyed at the Head Office of the
Commission in Metropolitan Manila. Petitioners had not, in other words, acquired a vested right to serve at the
Commission's Head Office.

Secondly, the above conclusion is compelled not only by the statutory provisions relevant in the instant case, but
also by a long line of cases decided by this Court in respect of different agencies or offices of government.

In one of the more recent of these cases, Department of Education Culture and Sports, etc., et al. v. Court of
Appeals, et al.,8 this Court held that a person who had been appointed as "Secondary School Principal II" in the
Division of City Schools, District II, Quezon City, National Capital Region, and who had been stationed as High
School Principal in the Carlos Albert High School in Quezon for a number of years, could lawfully be reassigned or
transferred to the Manuel Roxas High School, also in Quezon City, without demotion in rank or diminution of salry.
This Court held:

The aforequoted provision of Republic Act No. 4670 particularly Section 6 thereof which provides
that except for cause and in the exigencies of the service no teacher shall be transferred without his
consent from one station to another, finds no application in the case at bar as this is predicated
upon the theory that the teacher concerned is appointed — not merely assigned — to a particular
station. Thus:

The rule pursued by plaintiff only goes so far as


the appointed indicates a specification. Otherwise, the constitutionally ordained
security of tenure cannot shield her. In appointments of this nature, this Court
has consistently rejected the officer's demand to remain — even as public
service dictates that a transfer be made — in a particular station. Judicial attitude
toward transfers of this nature is expressed in the following statement in Ibañez,
et al. vs. Commission on Elections, et al. (G.R. No.
L-26558, April 27, 1967; 19 SCRA 1002 [1967]);

That security of tenure is an essential and constitutionally


guaranteed feature of our Civil Service System, is not open to
debate. The mantle of its protection extends not only against
removals without cause but also against unconsented transfer
which, as repeatedly enunciatEd, are tantamount to removals
which are within the ambit of the fundamental
guarantee. However, the availability of that security of tenure
necessarily depends, in the first instance, upon the nature of
the appointment (Hojilla vs. Marino, 121 Phil. 280 [1965].)
Such that the rule which proscribes transfers without consent
as anathema to the security of tenure is predicated upon the
theory that the officer involved is appointed — not
merely assigned — to a particular station (Miclat v. Ganaden,
et al., 108 Phil. 439 [1960]; Jaro v. Hon. Valencia, et al., 118
Phil. 728 [1963]). [Brillantes v. Guevarra, 27 SCRA 138
(1969)]

The appointment of Navarro as principal does not refer to any particular station or school. As
such, she could be assigned to any station and she is not entitled to stay permanently at any
specific school. (Bongbong v. Parado, 57 SCRA 623) When she was assigned to the Carlos Albert
High School, it could not have been with the intention to let her stay in said school permanently.
Otherwise, her appointment would have so stated. Consequently, she may be assigned to any
station or school in Quezon City as the exigencies of public service require even without consent.
As this Court ruled in Brillantes v. Guevarra, 27 SCRA 138,
143 —

Plaintiff's confident stride falters. She took too loose a view of the applicable
jurisprudence. Her refuge behind the mantle of security of tenure guaranteed by
the Constitution is not impenetrable. She proceeds upon the assumption that she
occupies her station in Sinalang Elementary School by appointment. But her
first appointment as Principal merely reads thus: "You are hereby appointed a
Principal (Elementary School) in the Bureau of Public Schools, Department of
Education", without mentioning her station. She cannot therefore claim security
of tenure as Principal of Sinalang Elementary School or any particular
station. She may be assigned to any station as exigency of public service
requires, even without her consent. She thus has no right of choice.9 (Emphasis
supplied; citation omitted)

In the very recent case of Fernando, et al. v. Hon. Sto. Tomas, etc., et
a1., 10 the Court addressed appointments of petitioners as "Mediators-Arbiters in the National Capital Region" in
dismissing a challenge on certiorari to resolutions of the CSC and orders of the Secretary of Labor. The Court said:

Petitioners were appointed as Mediator Arbiters in the National Capital Region. They were not,
however, appointed to a specific station or particular unit of the Department of Labor in the
National Capital Region (DOLE-NCR). Consequently, they can always be reassigned from one
organizational unit to another of the same agency where, in the opinion of respondent Secretary,
their services may be used more effectively. As such they can neither claim a vested right to the
station to which they were assigned nor to security of tenure thereat. As correctly observed by the
Solicitor General, petitioners' reassignment is not a transfer for they were not removed from their
position as med-arbiters. They were not given new appointments to new positions. It indubitably
follows, therefore, that Memorandum Order No. 4 ordering their reassignment in the interest of the
service is legally in order.11 (Emphases supplied)

In Quisumbing v. Gumban, 12 the Court, dealing with an appointment in the Bureau of Public Schools of the
Department of Education, Culture and Sports, ruled as follows:

After a careful scrutiny of the records, it is to be underscored that the appointment of private
respondent Yap is simply that of a District Supervisor of the Bureau of Public Schools which does
not indicate a specific station (Rollo, p. 13). A such, she could be assigned to any station and she
is no entitled to stay permanently at any specific station (Bongbong v. Parado, 57 SCRA 623
[1974]; Department of Education, Culture and Sports v. Court of Appeals [G.R. 81032, March 22,
1990] citing Brillantes v. Guevarra [27 SCRA 138 [1969]). 13

Again, in Ibañez v. Commission on Elections, 14 the Court had before it petitioners' appointments as "Election
Registrars in the Commission of Elections," without any intimation to what city, municipality or municipal district
they had been appointed as such. 15 The Court held that since petitioners "were not appointed to, and consequently
not entitled to any security of tenure or permanence in, any specific station," "on general principles, they [could] be
transferred as the exigencies of the service required," and that they had no right to complain against any change in
assignment. The Court further held that assignment to a particular station after issuance of the appointment was not
necessary to complete such appointment:

. . . . We cannot subscribe to the theory that an assignment to a particular station, in the light of
the terms of the appointments in question, was necessary to complete the said appointments. The
approval thereof by the Commissioner of Civil Service gave those appointments the stamp of
finality. With the view that the respondent Commission then took of its power in the premises and
the demand of the mission it set out to accomplish with the appointments it extended, said
appointments were definitely meant to be complete as then issued. The subsequent assignment of
the appointees thereunder that the said respondent Commission held in reserve to be exercised as
the needs of each locality justified did not in any way detract from the perfection attained by the
appointments beforehand. And the respective appointees were entitled only to such security of
tenure as the appointment papers concerned actually conferred — not in that of any place to which
they may have been subsequently assigned. . . . As things stand, in default of any particular
station stated in their respective appointments, no security of tenure can be asserted by the
petitioners on the basis of the mere assignments which were given to them. A contrary rule will
erase altogether the demarcation line we have repeatedly drawn
between appointment and assignment as two distinct concepts in the law of public
officers. 16 (Emphases supplied)

The petitioner, in Miclat v. Ganaden, 17 had been appointed as a "Welfare Office Incharge, Division of Urban, Rural
and Community Administration, Social Welfare Administration." She was assigned as Social Welfare Incharge of
the Mountain Province, by an office order of the Administrator, Social Welfare Administration. After a little more
than a year; petitioner was assigned elsewhere and respondent Ganaden transferred to petitioner's first station in
Baguio City. The Court ruled that petitioner was not entitled to remain in her first station, In Jaro v. Hon. Valencia,
et al., 18 petitioner Dr. Jaro had been appointed "Physician in the Municipal Maternity and Charity Clinics, Bureau
of Hospitals." He was first assigned to the Municipal Maternity and Charity Clinics in Batulati, Davao, and later to
the corresponding clinic in Saug, Davao and then to Catil, Davao. He was later assigned to the Municipality of
Padada, also of Davao Province. He resisted his last assignment and brought mandamus against the Secretary of
Health to compel the latter to return him to his station in Catil, Davao as Municipal Health Officer thereof. The
Court, applying Miclat v. Ganaden dismissed this Petition holding that his appointment not being to any specific
station but as a physician in the Municipal Maternity and Charity Clinics, Bureau of Hospitals, he could be
transferred or assigned to any station where, in the opinion of the Secretary of Health, his services may be utilized
more effectively. 19

Also noteworthy is Sta. Maria v. Lopez 20 which involved the appointment of petitioner Sta. Maria as "Dean,
College of Education, University of the Philippines." Dean Sta. Maria was transferred by the President of the
University of the Philippines to the Office of the President, U.P., without demotion in rank or salary, thereby
acceding to the demands of student activists who were boycotting their classes in the U.P. College of Education.
Dean Sta. Maria assailed his transfer as an illegal and unconstitutional removal from office. In upholding Dean Sta.
Maria's claim, the Court, speaking through Mr. Justice Sanchez, laid down the applicable doctrine in the following
terms:

4. Concededly, transfers there are which do not amount to removal. Some such transfer can be
effected without the need for charges being preferred, without trial or hering, and even without the
consent of the employee.

The clue to such transfers may be found in the "nature of the appointment." Where the
appointment does not indicate a specific station, an employee may be transferred or reassigned
provided the transfer affects no substantial change in title, rank and salary. Thus one who is
appointed "principal in the Bureau of Public Schools" and is designated to head a pilot school may
be transferred to the post of principal of another school.

And the rule that outlaws unconsented transfers as anathema to security of tenure applies only to
an officer who is appointed — not merely assigned — to a particular station. Such a rule does not
prescribe a transfer carried out under a specific statute that empowers the head of an agency to
periodically reassign the employees and officers in order to improve the service of the agency. The
use of approved techniques or methods in personnel management to harness the abilities of
employees to promote optimum public service cannot-be objected to. . . .

5. The next point of inquiry is whether or not Administrative Order 77 would stand the test of
validity vis-a-vis the principles just enunciated.
xxx xxx xxx

To be stressed at this point, however, is that the appointment of Sta. Maria is that of "Dean,
College of Education, University of the Philippines." He is not merely a dean "in the
university." His appointment is to a specific position; and, more importantly, to a specific
station. 21 (Citations omitted; emphases supplied)

For all the foregoing we conclude that the reassignment of petitioners Fernandez and de Lima from their stations in
the OPIA and OPR, respectively, to the Research Development Office (RDO) and from the RDO to the
Commissions Regional Offices in Regions V and III, respectively, without their consent, did not constitute a
violation of their constitutional right to security of tenure.

WHEREFORE, the Petition for Certiorari, Prohibition and Mandamus with Prayer for Writ of Preliminary
Injunction or Temporary Restraining Order is hereby DISMISSED. The Temporary Restraining Order issued by this
Court on 27 September 1994 is hereby LIFTED. Costs against petitioners.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 115863 March 31, 1995

AIDA D. EUGENIO, petitioner,


vs.
CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR
ENRIQUEZ, JR., respondents.

PUNO, J.:

The power of the Civil Service Commission to abolish the Career Executive Service Board is challenged in this
petition for certiorari and prohibition.

First the facts. Petitioner is the Deputy Director of the Philippine Nuclear Research Institute. She applied for a
Career Executive Service (CES) Eligibility and a CESO rank on August 2, 1993, she was given a CES eligibility.
On September 15, 1993, she was recommended to the President for a CESO rank by the Career Executive Service
Board. 1

All was not to turn well for petitioner. On October 1, 1993, respondent Civil Service Commission 2 passed
Resolution No. 93-4359, viz:

RESOLUTION NO. 93-4359

WHEREAS, Section 1(1) of Article IX-B provides that Civil Service shall be administered by the
Civil Service Commission, . . .;

WHEREAS, Section 3, Article IX-B of the 1987 Philippine Constitution provides that "The Civil
Service Commission, as the central personnel agency of the government, is mandated to establish
a career service and adopt measures to promote morale, efficiency, integrity, responsiveness,
progresiveness and courtesy in the civil service, . . .";

WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the Administrative Code of 1987 grants
the Commission the power, among others, to administer and enforce the constitutional and
statutory provisions on the merit system for all levels and ranks in the Civil Service;

WHEREAS, Section 7, Title I, Subtitle A, Book V of the Administrative Code of 1987 Provides,
among others, that The Career Service shall be characterized by (1) entrance based on merit and
fitness to be determined as far as practicable by competitive examination, or based highly
technical qualifications; (2) opportunity for advancement to higher career positions; and (3)
security of tenure;

WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the administrative Code of 1987 provides
that "The third level shall cover Positions in the Career Executive Service";
WHEREAS, the Commission recognizes the imperative need to consolidate, integrate and unify
the administration of all levels of positions in the career service.

WHEREAS, the provisions of Section 17, Title I, Subtitle A. Book V of the Administrative Code
of 1987 confers on the Commission the power and authority to effect changes in its organization
as the need arises.

WHEREAS, Section 5, Article IX-A of the Constitution provides that the Civil Service
Commission shall enjoy fiscal autonomy and the necessary implications thereof;

NOW THEREFORE, foregoing premises considered, the Civil Service Commission hereby
resolves to streamline reorganize and effect changes in its organizational structure. Pursuant
thereto, the Career Executive Service Board, shall now be known as the Office for Career
Executive Service of the Civil Service Commission. Accordingly, the existing personnel, budget,
properties and equipment of the Career Executive Service Board shall now form part of the Office
for Career Executive Service.

The above resolution became an impediment. to the appointment of petitioner as Civil Service Officer, Rank IV. In a
letter to petitioner, dated June 7, 1994, the Honorable Antonio T. Carpio, Chief Presidential legal Counsel, stated:

xxx xxx xxx

On 1 October 1993 the Civil Service Commission issued CSC Resolution No. 93-4359 which
abolished the Career Executive Service Board.

Several legal issues have arisen as a result of the issuance of CSC Resolution No. 93-4359,
including whether the Civil Service Commission has authority to abolish the Career Executive
Service Board. Because these issues remain unresolved, the Office of the President has refrained
from considering appointments of career service eligibles to career executive ranks.

xxx xxx xxx

You may, however, bring a case before the appropriate court to settle the legal issues arising from
issuance by the Civil Service Commission of CSC Resolution No. 93-4359, for guidance of all
concerned.

Thank You.

Finding herself bereft of further administrative relief as the Career Executive Service Board which recommended
her CESO Rank IV has been abolished, petitioner filed the petition at bench to annul, among others, resolution No.
93-4359. The petition is anchored on the following arguments:

A.

IN VIOLATION OF THE CONSTITUTION, RESPONDENT COMMISSION USURPED THE


LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ABOLISHED THE CESB, AN
OFFICE CREATED BY LAW, THROUGH THE ISSUANCE OF CSC: RESOLUTION NO. 93-
4359;

B.

ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT CSC USURPED THE


LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ILLEGALLY AUTHORIZED THE
TRANSFER OF PUBLIC MONEY, THROUGH THE ISSUANCE OF CSC RESOLUTION NO.
93-4359.

Required to file its Comment, the Solicitor General agreed with the contentions of petitioner. Respondent
Commission, however, chose to defend its ground. It posited the following position:

ARGUMENTS FOR PUBLIC RESPONDENT-CSC

I. THE INSTANT PETITION STATES NO CAUSE OF ACTION AGAINST THE PUBLIC


RESPONDENT-CSC.

II. THE RECOMMENDATION SUBMITTED TO THE PRESIDENT FOR APPOINTMENT TO


A CESO RANK OF PETITIONER EUGENIO WAS A VALID ACT OF THE CAREER
EXECUTIVE SERVICE BOARD OF THE CIVIL SERVICE COMMISSION AND IT DOES
NOT HAVE ANY DEFECT.

III. THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM QUESTIONING THE


VALIDITY OF THE RECOMMENDATION OF THE CESB IN FAVOR OF PETITIONER
EUGENIO SINCE THE PRESIDENT HAS PREVIOUSLY APPOINTED TO CESO RANK
FOUR (4) OFFICIALS SIMILARLY SITUATED AS SAID PETITIONER. FURTHERMORE,
LACK OF MEMBERS TO CONSTITUTE A QUORUM. ASSUMING THERE WAS NO
QUORUM, IS NOT THE FAULT OF PUBLIC RESPONDENT CIVIL SERVICE
COMMISSION BUT OF THE PRESIDENT WHO HAS THE POWER TO APPOINT THE
OTHER MEMBERS OF THE CESB.

IV. THE INTEGRATION OF THE CESB INTO THE COMMISSION IS AUTHORIZED BY


LAW (Sec. 12 (1), Title I, Subtitle A, Book V of the Administrative Code of the 1987). THIS
PARTICULAR ISSUE HAD ALREADY BEEN SETTLED WHEN THE HONORABLE
COURT DISMISSED THE PETITION FILED BY THE HONORABLE MEMBERS OF THE
HOUSE OF REPRESENTATIVES, NAMELY: SIMEON A. DATUMANONG, FELICIANO R.
BELMONTE, JR., RENATO V. DIAZ, AND MANUEL M. GARCIA IN G.R. NO. 114380. THE
AFOREMENTIONED PETITIONERS ALSO QUESTIONED THE INTEGRATION OF THE
CESB WITH THE COMMISSION.

We find merit in the petition.3

The controlling fact is that the Career Executive Service Board (CESB) was created in the Presidential Decree (P.D.)
No. 1 on September 1, 19744 which adopted the Integrated Plan. Article IV, Chapter I, Part of the III of the said Plan
provides:

Article IV — Career Executive Service

1. A Career Executive Service is created to form a continuing pool of well-selected and


development oriented career administrators who shall provide competent and faithful service.

2. A Career Executive Service hereinafter referred to in this Chapter as the Board, is created to
serve as the governing body of the Career Executive Service. The Board shall consist of the
Chairman of the Civil Service Commission as presiding officer, the Executive Secretary and the
Commissioner of the Budget as ex-officio members and two other members from the private sector
and/or the academic community who are familiar with the principles and methods of personnel
administration.

xxx xxx xxx


5. The Board shall promulgate rules, standards and procedures on the selection, classification,
compensation and career development of members of the Career Executive Service. The Board
shall set up the organization and operation of the service. (Emphasis supplied)

It cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished by the legislature.
This follows an unbroken stream of rulings that the creation and abolition of public offices is primarily a legislative
function. As aptly summed up in AM JUR 2d on Public Officers and
Employees, 5 viz:

Except for such offices as are created by the Constitution, the creation of public offices is
primarily a legislative function. In so far as the legislative power in this respect is not restricted by
constitutional provisions, it supreme, and the legislature may decide for itself what offices are
suitable, necessary, or convenient. When in the exigencies of government it is necessary to create
and define duties, the legislative department has the discretion to determine whether additional
offices shall be created, or whether these duties shall be attached to and become ex-officio duties
of existing offices. An office created by the legislature is wholly within the power of that body,
and it may prescribe the mode of filling the office and the powers and duties of the incumbent, and
if it sees fit, abolish the office.

In the petition at bench, the legislature has not enacted any law authorizing the abolition of the CESB. On the
contrary, in all the General Appropriations Acts from 1975 to 1993, the legislature has set aside funds for the
operation of CESB. Respondent Commission, however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book V
of the Administrative Code of 1987 as the source of its power to abolish the CESB. Section 17 provides:

Sec. 17. Organizational Structure. — Each office of the Commission shall be headed by a
Director with at least one Assistant Director, and may have such divisions as are necessary
independent constitutional body, the Commission may effect changes in the organization as the
need arises.

But as well pointed out by petitioner and the Solicitor General, Section 17 must be read together with Section 16 of
the said Code which enumerates the offices under the respondent Commission, viz:

Sec. 16. Offices in the Commission. — The Commission shall have the following offices:

(1) The Office of the Executive Director headed by an Executive Director, with a Deputy
Executive Director shall implement policies, standards, rules and regulations promulgated by the
Commission; coordinate the programs of the offices of the Commission and render periodic
reports on their operations, and perform such other functions as may be assigned by the
Commission.

(2) The Merit System Protection Board composed of a Chairman and two (2) members shall have
the following functions:

xxx xxx xxx

(3) The Office of Legal Affairs shall provide the Chairman with legal advice and assistance; render
counselling services; undertake legal studies and researches; prepare opinions and ruling in the
interpretation and application of the Civil Service law, rules and regulations; prosecute violations
of such law, rules and regulations; and represent the Commission before any court or tribunal.

(4) The Office of Planning and Management shall formulate development plans, programs and
projects; undertake research and studies on the different aspects of public personnel management;
administer management improvement programs; and provide fiscal and budgetary services.
(5) The Central Administrative Office shall provide the Commission with personnel, financial,
logistics and other basic support services.

(6) The Office of Central Personnel Records shall formulate and implement policies, standards,
rules and regulations pertaining to personnel records maintenance, security, control and disposal;
provide storage and extension services; and provide and maintain library services.

(7) The Office of Position Classification and Compensation shall formulate and implement
policies, standards, rules and regulations relative to the administration of position classification
and compensation.

(8) The Office of Recruitment, Examination and Placement shall provide leadership and assistance
in developing and implementing the overall Commission programs relating to recruitment,
execution and placement, and formulate policies, standards, rules and regulations for the proper
implementation of the Commission's examination and placement programs.

(9) The Office of Career Systems and Standards shall provide leadership and assistance in the
formulation and evaluation of personnel systems and standards relative to performance appraisal,
merit promotion, and employee incentive benefit and awards.

(10) The Office of Human Resource Development shall provide leadership and assistance in the
development and retention of qualified and efficient work force in the Civil Service; formulate
standards for training and staff development; administer service-wide scholarship programs;
develop training literature and materials; coordinate and integrate all training activities and
evaluate training programs.

(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and
regulations for the effective conduct or inspection and audit personnel and personnel management
programs and the exercise of delegated authority; provide technical and advisory services to Civil
Service Regional Offices and government agencies in the implementation of their personnel
programs and evaluation systems.

(12) The Office of Personnel Relations shall provide leadership and assistance in the development
and implementation of policies, standards, rules and regulations in the accreditation of employee
associations or organizations and in the adjustment and settlement of employee grievances and
management of employee disputes.

(13) The Office of Corporate Affairs shall formulate and implement policies, standards, rules and
regulations governing corporate officials and employees in the areas of recruitment, examination,
placement, career development, merit and awards systems, position classification and
compensation, performing appraisal, employee welfare and benefit, discipline and other aspects of
personnel management on the basis of comparable industry practices.

(14) The Office of Retirement Administration shall be responsible for the enforcement of the
constitutional and statutory provisions, relative to retirement and the regulation for the effective
implementation of the retirement of government officials and employees.

(15) The Regional and Field Offices. — The Commission shall have not less than thirteen (13)
Regional offices each to be headed by a Director, and such field offices as may be needed, each to
be headed by an official with at least the rank of an Assistant Director.

As read together, the inescapable conclusion is that respondent Commission's power to reorganize is
limited to offices under its control as enumerated in Section 16, supra. From its inception, the CESB was
intended to be an autonomous entity, albeit administratively attached to respondent Commission. As
conceptualized by the Reorganization Committee "the CESB shall be autonomous. It is expected to view
the problem of building up executive manpower in the government with a broad and positive
outlook." 6 The essential autonomous character of the CESB is not negated by its attachment to respondent
Commission. By said attachment, CESB was not made to fall within the control of respondent
Commission. Under the Administrative Code of 1987, the purpose of attaching one functionally inter-
related government agency to another is to attain "policy and program coordination." This is clearly etched
out in Section 38(3), Chapter 7, Book IV of the aforecited Code, to wit:

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

Respondent Commission also relies on the case of Datumanong, et al., vs. Civil Service Commission, G. R. No.
114380 where the petition assailing the abolition of the CESB was dismissed for lack of cause of action. Suffice to
state that the reliance is misplaced considering that the cited case was dismissed for lack of standing of the
petitioner, hence, the lack of cause of action.

IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent Commission is hereby
annulled and set aside. No costs.

SO ORDERED.
EN BANC

G.R. No. 163980 August 3, 2006

HOLY SPIRIT HOMEOWNERS ASSOCIATION, INC. and NESTORIO F. APOLINARIO, in his personal
capacity and as President of Holy Spirit Homeowners Association, Inc., Petitioners,
vs.
SECRETARY MICHAEL DEFENSOR, in his capacity as Chairman of the Housing and Urban Development
Coordinating Council (HUDCC), ATTY. EDGARDO PAMINTUAN, in his capacity as General Manager of
the National Housing Authority (NHA), MR. PERCIVAL CHAVEZ, in his capacity as Chairman of the
Presidential Commission for the Urban Poor (PCUP), MAYOR FELICIANO BELMONTE, in his capacity as
Mayor of Quezon City, SECRETARY ELISEA GOZUN, in her capacity as Secretary of the Department of
Environment and Natural Resources (DENR) and SECRETARY FLORENTE SORIQUEZ, in his capacity as
Secretary of the Department of Public Works and Highways (DPWH) as ex-officio members of the
NATIONAL GOVERNMENT CENTER ADMINISTRATION COMMITTEE, Respondents.

DECISION

TINGA, J.:

The instant petition for prohibition under Rule 65 of the 1997 Rules of Civil Procedure, with prayer for the issuance
of a temporary restraining order and/or writ of preliminary injunction, seeks to prevent respondents from enforcing
the implementing rules and regulations (IRR) of Republic Act No. 9207, otherwise known as the "National
Government Center (NGC) Housing and Land Utilization Act of 2003."

Petitioner Holy Spirit Homeowners Association, Inc. (Association) is a homeowners association from the West Side
of the NGC. It is represented by its president, Nestorio F. Apolinario, Jr., who is a co-petitioner in his own personal
capacity and on behalf of the association.

Named respondents are the ex-officio members of the National Government Center Administration Committee
(Committee). At the filing of the instant petition, the Committee was composed of Secretary Michael Defensor,
Chairman of the Housing and Urban Development Coordinating Council (HUDCC), Atty. Edgardo Pamintuan,
General Manager of the National Housing Authority (NHA), Mr. Percival Chavez, Chairman of the Presidential
Commission for Urban Poor (PCUP), Mayor Feliciano Belmonte of Quezon City, Secretary Elisea Gozun of the
Department of Environment and Natural Resources (DENR), and Secretary Florante Soriquez of the Department of
Public Works and Highways (DPWH).

Prior to the passage of R.A. No. 9207, a number of presidential issuances authorized the creation and development
of what is now known as the National Government Center (NGC).

On March 5, 1972, former President Ferdinand Marcos issued Proclamation No. 1826, reserving a parcel of land in
Constitution Hills, Quezon City, covering a little over 440 hectares as a national government site to be known as the
NGC. 1

On August 11, 1987, then President Corazon Aquino issued Proclamation No. 137, excluding 150 of the 440
hectares of the reserved site from the coverage of Proclamation No. 1826 and authorizing instead the disposition of
the excluded portion by direct sale to the bona fide residents therein. 2

In view of the rapid increase in population density in the portion excluded by Proclamation No. 137 from the
coverage of Proclamation No. 1826, former President Fidel Ramos issued Proclamation No. 248 on September 7,
1993, authorizing the vertical development of the excluded portion to maximize the number of families who can
effectively become beneficiaries of the government’s socialized housing program. 3
On May 14, 2003, President Gloria Macapagal-Arroyo signed into law R.A. No. 9207. Among the salient provisions
of the law are the following:

Sec. 2. Declaration of Policy. – It is hereby declared the policy of the State to secure the land tenure of the urban
poor. Toward this end, lands located in the NGC, Quezon City shall be utilized for housing, socioeconomic, civic,
educational, religious and other purposes.

Sec. 3. Disposition of Certain Portions of the National Government Center Site to Bona Fide Residents. –
Proclamation No. 1826, Series of 1979, is hereby amended by excluding from the coverage thereof, 184 hectares on
the west side and 238 hectares on the east side of Commonwealth Avenue, and declaring the same open for
disposition to bona fide residents therein: Provided, That the determination of the bona fide residents on the west
side shall be based on the census survey conducted in 1994 and the determination of the bona fide residents on the
east side shall be based on the census survey conducted in 1994 and occupancy verification survey conducted in
2000: Provided, further, That all existing legal agreements, programs and plans signed, drawn up or implemented
and actions taken, consistent with the provisions of this Act are hereby adopted.

Sec. 4. Disposition of Certain Portions of the National Government Center Site for Local Government or
Community Facilities, Socioeconomic, Charitable, Educational and Religious Purposes. – Certain portions of land
within the aforesaid area for local government or community facilities, socioeconomic, charitable, educational and
religious institutions are hereby reserved for disposition for such purposes: Provided, That only
those institutions already operating and with existing facilities or structures, or those occupying the land may avail
of the disposition program established under the provisions this Act; Provided, further, That in ascertaining the
specific areas that may be disposed of in favor of these institutions, the existing site allocation shall be used as basis
therefore: Provided, finally. That in determining the reasonable lot allocation of such institutions without specific
lot allocations, the land area that may be allocated to them shall be based on the area actually used by said
institutions at the time of effectivity of this Act. (Emphasis supplied.)

In accordance with Section 5 of R.A. No. 9207, 4 the Committee formulated the Implementing Rules and
Regulations (IRR) of R.A. No. 9207 on June 29, 2004. Petitioners subsequently filed the instant petition, raising the
following issues:

WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE RULES AND
REGULATIONS OF REPUBLIC ACT NO. 9207, OTHERWISE KNOWN AS "NATIONAL GOVERNMENT
CENTER (NGC) HOUSING AND LAND UTILIZATION ACT OF 2003" SHOULD BE DECLARED NULL
AND VOID FOR BEING INCONSISTENT WITH THE LAW IT SEEKS TO IMPLEMENT.

WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE RULES AND
REGULATIONS OF REPUBLIC ACT NO. 9207, OTHERWISE KNOWN AS "NATIONAL GOVERNMENT
CENTER (NGC) HOUSING AND LAND UTILIZATION ACT OF 2003" SHOULD BE DECLARED NULL
AND VOID FOR BEING ARBITRARY, CAPRICIOUS AND WHIMSICAL. 5

First, the procedural matters.

The Office of the Solicitor General (OSG) argues that petitioner Association cannot question the implementation of
Section 3.1 (b.2) and Section 3.2 (c.1) since it does not claim any right over the NGC East Side. Section 3.1 (b.2)
provides for the maximum lot area that may be awarded to a resident-beneficiary of the NGC East Side, while
Section 3.2 (c.1) imposes a lot price escalation penalty to a qualified beneficiary who fails to execute a contract to
sell within the prescribed period. 6 Also, the OSG contends that since petitioner association is not the duly
recognized people’s organization in the NGC and since petitioners not qualify as beneficiaries, they cannot question
the manner of disposition of lots in the NGC. 7

"Legal standing" or locus standi has been defined as a personal and substantial interest in the case such that the party
has sustained or will sustain direct injury as a result of the governmental act that is being challenged…. The gist of
the question of standing is whether a party alleges "such personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions." 8

Petitioner association has the legal standing to institute the instant petition, whether or not it is the duly recognized
association of homeowners in the NGC. There is no dispute that the individual members of petitioner association are
residents of the NGC. As such they are covered and stand to be either benefited or injured by the enforcement of the
IRR, particularly as regards the selection process of beneficiaries and lot allocation to qualified beneficiaries. Thus,
petitioner association may assail those provisions in the IRR which it believes to be unfavorable to the rights of its
members. Contrary to the OSG’s allegation that the failure of petitioner association and its members to qualify as
beneficiaries effectively bars them from questioning the provisions of the IRR, such circumstance precisely operates
to confer on them the legal personality to assail the IRR. Certainly, petitioner and its members have sustained direct
injury arising from the enforcement of the IRR in that they have been disqualified and eliminated from the selection
process. While it is true that petitioners claim rights over the NGC West Side only and thus cannot be affected by
the implementation of Section 3.1 (b.2), which refers to the NGC East Side, the rest of the assailed provisions of the
IRR, namely, Sections 3.1 (a.4), 3.2 (a.1) and 3.2 (c.1), govern the disposition of lots in the West Side itself or all
the lots in the NGC.

We cannot, therefore, agree with the OSG on the issue of locus standi. The petition does not merit dismissal on that
ground.

There are, however, other procedural impediments to the granting of the instant petition. The OSG claims that the
instant petition for prohibition is an improper remedy because the writ of prohibition does not lie against the
exercise of a quasi-legislative function. 9 Since in issuing the questioned IRR of R.A. No. 9207, the Committee was
not exercising judicial, quasi-judicial or ministerial function, which is the scope of a petition for prohibition under
Section 2, Rule 65 of the 1997 Rules of Civil Procedure, the instant prohibition should be dismissed outright, the
OSG contends. For their part, respondent Mayor of Quezon City 10 and respondent NHA 11 contend that petitioners
violated the doctrine of hierarchy of courts in filing the instant petition with this Court and not with the Court of
Appeals, which has concurrent jurisdiction over a petition for prohibition.

The cited breaches are mortal. The petition deserves to be spurned as a consequence.

Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative


adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which
results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability
and separability of powers. 12

In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party
need not exhaust administrative remedies before going to court. This principle, however, applies only where the act
of the administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the
assailed act pertained to its rule-making or quasi-legislative power. 13

The assailed IRR was issued pursuant to the quasi-legislative power of the Committee expressly authorized by R.A.
No. 9207. The petition rests mainly on the theory that the assailed IRR issued by the Committee is invalid on the
ground that it is not germane to the object and purpose of the statute it seeks to implement. Where what is assailed is
the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its
quasi-legislative function, the regular courts have jurisdiction to pass upon the same. 14

Since the regular courts have jurisdiction to pass upon the validity of the assailed IRR issued by the Committee in
the exercise of its quasi-legislative power, the judicial course to assail its validity must follow the doctrine of
hierarchy of courts. Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give the petitioner unrestricted freedom of choice of court forum. 15
True, this Court has the full discretionary power to take cognizance of the petition filed directly with it if compelling
reasons, or the nature and importance of the issues raised, so warrant. 16 A direct invocation of the Court’s original
jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. 17

In Heirs of Bertuldo Hinog v. Melicor, 18 the Court said that it will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of
national interest and of serious implications, justify the availment of the extraordinary remedy of writ of certiorari,
calling for the exercise of its primary jurisdiction. 19 A perusal, however, of the petition for prohibition shows no
compelling, special or important reasons to warrant the Court’s taking cognizance of the petition in the first instance.
Petitioner also failed to state any reason that precludes the lower courts from passing upon the validity of the
questioned IRR. Moreover, as provided in Section 5, Article VIII of the

Constitution, 20 the Court’s power to evaluate the validity of an implementing rule or regulation is generally
appellate in nature. Thus, following the doctrine of hierarchy of courts, the instant petition should have been initially
filed with the Regional Trial Court.

A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a quasi-legislative
function. Prohibition is an extraordinary writ directed against any tribunal, corporation, board, officer or person,
whether exercising judicial, quasi-judicial or ministerial functions, ordering said entity or person to desist from
further proceedings when said proceedings are without or in excess of said entity’s or person’s jurisdiction, or are
accompanied with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy
in the ordinary course of law. 21 Prohibition lies against judicial or ministerial functions, but not against legislative
or quasi-legislative functions. Generally, the purpose of a writ of prohibition is to keep a lower court within the
limits of its jurisdiction in order to maintain the administration of justice in orderly channels. 22 Prohibition is the
proper remedy to afford relief against usurpation of jurisdiction or power by an inferior court, or when, in the
exercise of jurisdiction in handling matters clearly within its cognizance the inferior court transgresses the bounds
prescribed to it by the law, or where there is no adequate remedy available in the ordinary course of law by which
such relief can be obtained. 23 Where the principal relief sought is to invalidate an IRR, petitioners’ remedy is an
ordinary action for its nullification, an action which properly falls under the jurisdiction of the Regional Trial Court.
In any case, petitioners’ allegation that "respondents are performing or threatening to perform functions without or
in excess of their jurisdiction" may appropriately be enjoined by the trial court through a writ of injunction or a
temporary restraining order.

In a number of petitions, 24 the Court adequately resolved them on other grounds without adjudicating on the
constitutionality issue when there were no compelling reasons to pass upon the same. In like manner, the instant
petition may be dismissed based on the foregoing procedural grounds. Yet, the Court will not shirk from its duty to
rule on the merits of this petition to facilitate the speedy resolution of this case. In proper cases, procedural rules
may be relaxed or suspended in the interest of substantial justice. And the power of the Court to except a particular
case from its rules whenever the purposes of justice require it cannot be questioned. 25

Now, we turn to the substantive aspects of the petition. The outcome, however, is just as dismal for petitioners.

Petitioners assail the following provisions of the IRR:

Section 3. Disposition of Certain portions of the NGC Site to the bonafide residents

3.1. Period for Qualification of Beneficiaries

xxxx

(a.4) Processing and evaluation of qualifications shall be based on the Code of Policies and subject to the condition
that a beneficiary is qualified to acquire only one (1) lot with a minimum of 36 sq. m. and maximum of 54 sq. m.
and subject further to the availability of lots.
xxxx

(b.2) Applications for qualification as beneficiary shall be processed and evaluated based on the Code of Policies
including the minimum and maximum lot allocation of 35 sq. m. and 60 sq. m.

xxxx

3.2. Execution of the Contract to Sell

(a) Westside

(a.1) All qualified beneficiaries shall execute Contract to Sell (CTS) within sixty (60) days from the effectivity of
the IRR in order to avail of the lot at P700.00 per sq. m.

xxxx

(c) for both eastside and westside

(c.1) Qualified beneficiaries who failed to execute CTS on the deadline set in item a.1 above in case of westside and
in case of eastside six (6) months after approval of the subdivision plan shall be subjected to lot price escalation.

The rate shall be based on the formula to be set by the National Housing Authority factoring therein the affordability
criteria. The new rate shall be approved by the NGC-Administration Committee (NGC-AC).

Petitioners contend that the aforequoted provisions of the IRR are constitutionally infirm as they are not germane to
and/or are in conflict with the object and purpose of the law sought to be implemented.

First. According to petitioners, the limitation on the areas to be awarded to qualified beneficiaries under Sec. 3.1
(a.4) and (b.2) of the IRR is not in harmony with the provisions of R.A. No. 9207, which mandates that the lot
allocation to qualified beneficiaries shall be based on the area actually used or occupied by bona fide residents
without limitation to area. The argument is utterly baseless.

The beneficiaries of lot allocations in the NGC may be classified into two groups, namely, the urban poor or
the bona fide residents within the NGC site and certain government institutions including the local government.
Section 3, R.A. No. 9207 mandates the allocation of additional property within the NGC for disposition to its bona
fide residents and the manner by which this area may be distributed to qualified beneficiaries. Section 4, R.A. No.
9207, on the other hand, governs the lot disposition to government institutions. While it is true that Section 4 of R.A.
No. 9207 has a proviso mandating that the lot allocation shall be based on the land area actually used or occupied at
the time of the law’s effectivity, this proviso applies only to institutional beneficiaries consisting of the local
government, socioeconomic, charitable, educational and religious institutions which do not have specific lot
allocations, and not to the bona fide residents of NGC. There is no proviso which even hints that a bona fide resident
of the NGC is likewise entitled to the lot area actually occupied by him.

Petitioners’ interpretation is also not supported by the policy of R.A. No. 9207 and the prior proclamations
establishing the NGC. The government’s policy to set aside public property aims to benefit not only the urban poor
but also the local government and various government institutions devoted to socioeconomic, charitable, educational
and

religious purposes. 26 Thus, although Proclamation No. 137 authorized the sale of lots to bona fide residents in the
NGC, only a third of the entire area of the NGC was declared open for disposition subject to the condition that those
portions being used or earmarked for public or quasi-public purposes would be excluded from the housing program
for NGC residents. The same policy of rational and optimal land use can be read in Proclamation No. 248 issued
by then President Ramos. Although the proclamation recognized the rapid increase in the population density in the
NGC, it did not allocate additional property within the NGC for urban poor housing but instead authorized the
vertical development of the same 150 hectares identified previously by Proclamation No. 137 since the distribution
of individual lots would not adequately provide for the housing needs of all the bona fide residents in the NGC.

In addition, as provided in Section 4 of R.A. No. 9207, the institutional beneficiaries shall be allocated the areas
actually occupied by them; hence, the portions intended for the institutional beneficiaries is fixed and cannot be
allocated for other non-institutional beneficiaries. Thus, the areas not intended for institutional beneficiaries would
have to be equitably distributed among the bona fide residents of the NGC. In order to accommodate all qualified
residents, a limitation on the area to be awarded to each beneficiary must be fixed as a necessary consequence.

Second. Petitioners note that while Sec. 3.2 (a.1) of the IRR fixes the selling rate of a lot at P700.00 per sq. m., R.A.
No. 9207 does not provide for the price. They add Sec. 3.2 (c.1) penalizes a beneficiary who fails to execute a
contract to sell within six (6) months from the approval of the subdivision plan by imposing a price escalation, while
there is no such penalty imposed by R.A. No. 9207. Thus, they conclude that the assailed provisions conflict with
R.A. No. 9207 and should be nullified. The argument deserves scant consideration.

Where a rule or regulation has a provision not expressly stated or contained in the statute being implemented, that
provision does not necessarily contradict the statute. A legislative rule is in the nature of subordinate legislation,
designed to implement a primary legislation by providing the details thereof. 27 All that is required is that the
regulation should be germane to the objects and purposes of the law; that the regulation be not in contradiction to
but in conformity with the standards prescribed by the law. 28

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

The Committee’s authority to fix the selling price of the lots may be likened to the rate-fixing power of
administrative agencies. In case of a delegation of rate-fixing power, the only standard which the legislature is
required to prescribe for the guidance of the administrative authority is that the rate be reasonable and just.
However, it has been held that even in the absence of an express requirement as to reasonableness, this standard may
be implied. 29 In this regard, petitioners do not even claim that the selling price of the lots is unreasonable.

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

Third. Petitioners also suggest that the adoption of the assailed IRR suffers from a procedural flaw. According to
them the IRR was adopted and concurred in by several representatives of people’s organizations contrary to the
express mandate of R.A. No. 9207 that only two representatives from duly recognized peoples’ organizations must
compose the NGCAC which promulgated the assailed IRR. It is worth noting that petitioner association is not a duly
recognized people’s organization. In subordinate legislation, as long as the passage of the rule or regulation had the
benefit of a hearing, the procedural due process requirement is deemed complied with. That there is observance of
more than the minimum requirements of due process in the adoption of the questioned IRR is not a ground to
invalidate the same. In sum, the petition lacks merit and suffers from procedural deficiencies. WHEREFORE, the
instant petition for prohibition is DISMISSED. Costs against petitioners. SO ORDERED.
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.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner,


vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL
MANAGEMENT & DEVELOPMENT CORP., respondents.

G.R. No. 118745 October 6, 1995

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner,


vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL
MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents.

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out
to such an extent as deny justice to the landowner whenever truth and justice happen to be on his side. 1 As
eloquently stated by Justice Isagani Cruz:

. . . social justice — or any justice for that matter — is for the deserving, whether he be a
millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we
are called upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends
its sympathy and compassion. But never is it justified to prefer the poor simply because they are
poor, or to reject the rich simply because they are rich, for justice must always be served, for poor
and rich alike, according to the mandate of the law.2

In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution.

Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745)
and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-
G.R. SP No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated.3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private
respondents' Petition for Certiorari and Mandamus and ruled as follows:

WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby
GRANTED:

a) DAR Administrative Order No. 9, Series of 1990 is


declared null and void insofar as it provides for the opening of trust accounts in
lieu of deposits in cash or bonds;
b) Respondent Landbank is ordered to immediately deposit — not merely
"earmark", "reserve" or "deposit in trust" — with an accessible bank designated
by respondent DAR in the names of the following petitioners the following
amounts in cash and in government financial instruments — within the
parameters of Sec. 18 (1) of RA 6657:

P 1,455,207.31 Pedro L. Yap

P 135,482.12 Heirs of Emiliano Santiago

P 15,914,127.77 AMADCOR;

c) The DAR-designated bank is ordered to allow the petitioners to withdraw the


above-deposited amounts without prejudice to the final determination of just
compensation by the proper authorities; and

d) Respondent DAR is ordered to


1) immediately conduct summary administrative proceedings to determine the
just compensation for the lands of the petitioners giving the petitioners 15 days
from notice within which to submit evidence and to 2) decide the cases within 30
days after they are submitted for decision.4

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5 denying their motion for
reconsideration.

Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer
schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No.
6657).

Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of
compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this
Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private
respondents questioned the validity of DAR Administrative Order No. 6, Series of 1992 6 and DAR
Administrative Order No. 9, Series of 1990,7 and sought to compel the DAR to expedite the pending
summary administrative proceedings to finally determine the just compensation of their properties, and the
Landbank to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in
trust accounts" for private respondents, and to allow them to withdraw the same.

Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent
Court of Appeals for proper determination and disposition.

As found by respondent court , the following are undisputed:

Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of
petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in
the names of farmer beneficiaries collectively, based on the request of the DAR together with a
certification of the Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked
for Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283,
respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed
beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying
with the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and
Landbank bonds in an accessible bank. (Rollo, p. 6).
The above allegations are not disputed by any of the respondents.

Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners
of a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by
TCT No. NT-60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late
Emiliano F. Santiago; that in November and December 1990, without notice to the petitioners, the
Landbank required and the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX
"B") to pay rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the
net harvest; that on 24 October 1991 the DAR Regional Director issued an order directing the
Landbank to pay the landowner directly or through the establishment of a trust fund in the amount
of P135,482.12, that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the
name of Emiliano F. Santiago. (ANNEX "E"; Rollo,
p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual
Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p.
133).

The above allegations are not disputed by the respondents except that respondent Landbank claims
1) that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed
of Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the
ATDU, did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99).

Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity)


alleges — with respect to its properties located in San Francisco, Quezon — that the properties of
AMADCOR in San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with
an area of 209.9215 hectares and another parcel covered by TCT No. 10832 with an area of
163.6189 hectares; that a summary administrative proceeding to determine compensation of the
property covered by TCT No. 34314 was conducted by the DARAB in Quezon City without
notice to the landowner; that a decision was rendered on 24 November 1992 (ANNEX "F") fixing
the compensation for the parcel of land covered by TCT No. 34314 with an area of 209.9215
hectares at P2,768,326.34 and ordering the Landbank to pay or establish a trust account for said
amount in the name of AMADCOR; and that the trust account in the amount of P2,768,326.34
fixed in the decision was established by adding P1,986,489.73 to the first trust account established
on 19 December 1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in
Tabaco, Albay, it is alleged that the property of AMADCOR in Tabaco, Albay is covered by TCT
No. T-2466 of the Register of Deeds of Albay with an area of 1,629.4578 hectares'; that
emancipation patents were issued covering an area of 701.8999 hectares which were registered on
15 February 1988 but no action was taken thereafter by the DAR to fix the compensation for said
land; that on 21 April 1993, a trust account in the name of AMADCOR was established in the
amount of P12,247,217.83', three notices of acquisition having been previously rejected by
AMADCOR. (Rollo, pp. 8-9)

The above allegations are not disputed by the respondents except that respondent Landbank claims
that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due
notice to it (Rollo, p. 100).8

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with
grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in
cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and the
titles are cancelled as provided under Section 16(e) of RA 6657. 9 Private respondents also assail the fact that the
DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as
landowners despite the clear mandate that before taking possession of the property, the compensation must be
deposited in cash or in bonds. 10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power
pursuant to Section 49 of RA 6657.11 Moreover, the DAR maintained that the issuance of the "Certificate of
Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the ruling in the case
of Association of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No.
78742, July 14, 1989 (175 SCRA 343). 12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with
Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also
used.13

On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents.14 Petitioners filed a motion for reconsideration but respondent court denied the same. 15

Hence, the instant petitions.

On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the
appeal has no merit and is merely intended to delay the finality of the appealed decision. 16 The Court, however,
denied the motion and instead required the respondents to file their comments. 17

Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9,
Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2)
in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the
amounts deposited in trust pending the final resolution of the cases it has filed for just compensation.

Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657
referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit.
Thus, in opting for the opening of a trust account as the acceptable form of deposit through Administrative Circular
No. 9, petitioner DAR did not commit any grave abuse of discretion since it merely exercised its power to
promulgate rules and regulations in implementing the declared policies of RA 6657.

The contention is untenable. Section 16(e) of RA 6657 provides as follows:

Sec. 16. Procedure for Acquisition of Private Lands —

xxx xxx xxx

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of
the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of Deeds to issue a
Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis
supplied)

It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear
nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust
account" among the valid modes of deposit, that should have been made express, or at least, qualifying words ought
to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no ambiguity
in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".

The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be
disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of
jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative
enactment.18 In this regard, it must be stressed that the function of promulgating rules and regulations may be
legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of
administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is that
administrative regulations cannot extend
the law and amend a legislative enactment,19 for settled is the rule that administrative regulations must be in
harmony with the provisions of the law. And in case there is a discrepancy between the basic law and an
implementing rule or regulation, it is the former that prevails. 20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued
Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the
landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very
specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke
LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of
the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for
being null and void.

Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts deposited
in trust in their behalf pending the final resolution of the cases involving the final valuation of their properties,
petitioners assert the negative.

The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of
RA 6657 and payment of final compensation as provided under Section 18 21 of the same law. According to
petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final
valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference
to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the landowner because the
latter amount is only provisional and intended merely to secure possession of the property pending final valuation.
To further bolster the contention petitioners cite the following pronouncements in the case of "Association of Small
Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22

The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well-accepted principle
of eminent domain.

xxx xxx xxx

The CARP Law, for its part conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR
of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains
with the landowner. No outright change of ownership is contemplated either.

xxx xxx xxx

Hence the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.

Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found
that:

. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led
the Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary
of Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not
always required to be made fully in money" — even as the Supreme Court admits in the same case
"that the traditional medium for the payment of just compensation is money and no other" — the
Supreme Court in said case did not abandon the "recognized rule . . . that title to the property
expropriated shall pass from the owner to the expropriator only upon full payment of the just
compensation." 23 (Emphasis supplied)
We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the
extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the
traditional mode of payment of compensation and recognized payment other than in cash. It did not, however,
dispense with the settled rule that there must be full payment of just compensation before the title to the expropriated
property is transferred.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and
determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to
appropriate the amounts already deposited in their behalf as compensation for their properties simply because they
rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use of
such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents'
properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding that which
rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association" case) that
is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must rectify.

Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final
compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The
immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property
for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that:

. . . within the context of the State's inherent power of eminent domain, just compensation means
not only the correct determination of the amount to be paid to the owner of the land but also the
payment of the land within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered "just" for the property owner is made to suffer the
consequence of being immediately deprived of his land while being made to wait for a decade or
more before actually receiving the amount necessary to cope with his loss. 24 (Emphasis supplied)

The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of
the Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer. 25 But despite
this, cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still
optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must
be stressed, however, that in the pursuit of this objective, vigilance over the rights of the landowners is equally
important because social justice cannot be invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection.26

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the
appealed decision is AFFIRMED in toto.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 127685 July 23, 1998

BLAS F. OPLE, petitioner,

vs.

RUBEN D. TORRES, ALEXANDER AGUIRRE, HECTOR VILLANUEVA, CIELITO HABITO, ROBERT


BARBERS, CARMENCITA REODICA, CESAR SARINO, RENATO VALENCIA, TOMAS P. AFRICA,
HEAD OF THE NATIONAL COMPUTER CENTER and CHAIRMAN OF THE COMMISSION ON
AUDIT, respondents.

PUNO, J.:

The petition at bar is a commendable effort on the part of Senator Blas F. Ople to prevent the shrinking of the right
to privacy, which the revered Mr. Justice Brandeis considered as "the most comprehensive of rights and the right
most valued by civilized men." 1 Petitioner Ople prays that we invalidate Administrative Order No. 308
entitled "Adoption of a National Computerized Identification Reference System" on two important
constitutional grounds, viz: one, it is a usurpation of the power of Congress to legislate, and two, it
impermissibly intrudes on our citizenry's protected zone of privacy. We grant the petition for the rights
sought to be vindicated by the petitioner need stronger barriers against further erosion.

A.O. No. 308 was issued by President Fidel V. Ramos On December 12, 1996 and reads as follows:

ADOPTION OF A NATIONAL COMPUTERIZED

IDENTIFICATION REFERENCE SYSTEM

WHEREAS, there is a need to provide Filipino citizens and foreign residents with the facility
to conveniently transact business with basic service and social security providers and other
government instrumentalities;

WHEREAS, this will require a computerized system to properly and efficiently identify
persons seeking basic services on social security and reduce, if not totally eradicate
fraudulent transactions and misrepresentations;

WHEREAS, a concerted and collaborative effort among the various basic services and social
security providing agencies and other government intrumentalities is required to achieve
such a system;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by


virtue of the powers vested in me by law, do hereby direct the following:
Sec. 1. Establishment of a National Compoterized Identification Reference System. A
decentralized Identification Reference System among the key basic services and social
security providers is hereby established.

Sec. 2. Inter-Agency Coordinating Committee. An Inter-Agency Coordinating Committee


(IACC) to draw-up the implementing guidelines and oversee the implementation of the
System is hereby created, chaired by the Executive Secretary, with the following as
members:

Head, Presidential Management Staff

Secretary, National Economic Development Authority

Secretary, Department of the Interior and Local Government

Secretary, Department of Health

Administrator, Government Service Insurance System,

Administrator, Social Security System,

Administrator, National Statistics Office

Managing Director, National Computer Center.

Sec. 3. Secretariat. The National Computer Center (NCC) is hereby designated as secretariat
to the IACC and as such shall provide administrative and technical support to the IACC.

Sec. 4. Linkage Among Agencies. The Population Reference Number (PRN) generated by the
NSO shall serve as the common reference number to establish a linkage among concerned
agencies. The IACC Secretariat shall coordinate with the different Social Security and
Services Agencies to establish the standards in the use of Biometrics Technology and in
computer application designs of their respective systems.

Sec. 5. Conduct of Information Dissemination Campaign. The Office of the Press Secretary, in
coordination with the National Statistics Office, the GSIS and SSS as lead agencies and other
concerned agencies shall undertake a massive tri-media information dissemination campaign
to educate and raise public awareness on the importance and use of the PRN and the Social
Security Identification Reference.

Sec. 6. Funding. The funds necessary for the implementation of the system shall be sourced
from the respective budgets of the concerned agencies.

Sec. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall submit regular reports
to the Office of the President through the IACC, on the status of implementation of this
undertaking.

Sec. 8. Effectivity. This Administrative Order shall take effect immediately.

DONE in the City of Manila, this 12th day of December in the year of Our Lord, Nineteen
Hundred and Ninety-Six.
(SGD.) FIDEL V. RAMOS

A.O. No. 308 was published in four newspapers of general circulation on January 22, 1997 and January 23,
1997. On January 24, 1997, petitioner filed the instant petition against respondents, then Executive Secretary
Ruben Torres and the heads of the government agencies, who as members of the Inter-Agency Coordinating
Committee, are charged with the implementation of A.O. No. 308. On April 8, 1997, we issued a temporary
restraining order enjoining its implementation.

Petitioner contends:

A. THE ESTABLISNMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION


REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF A.O.
NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS,
THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE
POWERS OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES.

B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE


IMPLEMENTATION OF A.O. NO. 308 IS AN UNCONSTITUTIONAL USURPATION OF
THE EXCLUSIVE RIGHT OF CONGRESS TO APPROPRIATE PUBLIC FUNDS FOR
EXPENDITURE.

C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE


GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF RIGHTS
ENSHRINED IN THE CONSTITUTION. 2

Respondents counter-argue:

A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD WARRANT


A JUDICIAL REVIEW;

B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND
ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT ENCROACHING ON
THE LEGISLATIVE POWERS OF CONGRESS;

C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE


IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED FROM THE BUDGETS
OF THE CONCERNED AGENCIES;

3
D. A.O. NO. 308 [1996] PROTECTS AN INDIVIDUAL'S INTEREST IN PRIVACY.

We now resolve.

As is usual in constitutional litigation, respondents raise the threshold issues relating to the standing to sue of
the petitioner and the justiciability of the case at bar. More specifically, respondents aver that petitioner has
no legal interest to uphold and that the implementing rules of A.O. No. 308 have yet to be promulgated.

These submissions do not deserve our sympathetic ear. Petitioner Ople is a distinguished member of our
Senate. As a Senator, petitioner is possessed of the requisite standing to bring suit raising the issue that the
issuance of A.O. No. 308 is a usurpation of legislative power. 4 As taxpayer and member of the Government
Service Insurance System (GSIS), petitioner can also impugn the legality of the misalignment of public funds
and the misuse of GSIS funds to implement A.O. No. 308. 5
The ripeness for adjudication of the Petition at bar is not affected by the fact that the implementing rules of
A.O. No. 308 have yet to be promulgated. Petitioner Ople assails A.O. No. 308 as invalid per se and as
infirmed on its face. His action is not premature for the rules yet to be promulgated cannot cure its fatal
defects. Moreover, the respondents themselves have started the implementation of A.O. No. 308 without
waiting for the rules. As early as January 19, 1997, respondent Social Security System (SSS) caused the
publication of a notice to bid for the manufacture of the National Identification (ID) card. 6 Respondent
Executive Secretary Torres has publicly announced that representatives from the GSIS and the SSS have
completed the guidelines for the national identification system. 7 All signals from the respondents show their
unswerving will to implement A.O. No. 308 and we need not wait for the formality of the rules to pass
judgment on its constitutionality. In this light, the dissenters insistence that we tighten the rule on standing is
not a commendable stance as its result would be to throttle an important constitutional principle and a
fundamental right.

II

We now come to the core issues. Petitioner claims that A.O. No. 308 is not a mere administrative order but a
law and hence, beyond the power of the President to issue. He alleges that A.O. No. 308 establishes a system
of identification that is all-encompassing in scope, affects the life and liberty of every Filipino citizen and
foreign resident, and more particularly, violates their right to privacy.

Petitioner's sedulous concern for the Executive not to trespass on the lawmaking domain of Congress is
understandable. The blurring of the demarcation line between the power of the Legislature to make laws and
the power of the Executive to execute laws will disturb their delicate balance of power and cannot be allowed.
Hence, the exercise by one branch of government of power belonging to another will be given a stricter
scrutiny by this Court.

The line that delineates Legislative and Executive power is not indistinct. Legislative power is "the authority,
under the Constitution, to make laws, and to alter and repeal them." 8 The Constitution, as the will of the
people in their original, sovereign and unlimited capacity, has vested this power in the Congress of the
Philippines. 9 The grant of legislative power to Congress is broad, general and comprehensive. 10 The
legislative body possesses plenary power for all purposes of civil government. 11 Any power, deemed to be
legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it
elsewhere. 12 In fine, except as limited by the Constitution, either expressly or impliedly, legislative power
embraces all subjects and extends to matters of general concern or common interest. 13

While Congress is vested with the power to enact laws, the President executes the laws. 14 The executive
power is vested in the Presidents. 15 It is generally defined as the power to enforce and administer the
laws. 16 It is the power of carrying the laws into practical operation and enforcing their due observance. 17

As head of the Executive Department, the President is the Chief Executive. He represents the government as a
whole and sees to it that all laws are enforced by the officials and employees of his department. 18 He has
control over the executive department, bureaus and offices. This means that he has the authority to assume
directly the functions of the executive department, bureau and office or interfere with the discretion of its
officials.19 Corollary to the power of control, the President also has the duty of supervising the enforcement of
laws for the maintenance of general peace and public order. Thus, he is granted administrative power over
bureaus and offices under his control to enable him to discharge his duties effectively. 20

Administrative power is concerned with the work of applying policies and enforcing orders as determined by
proper governmental organs. 21 It enables the President to fix a uniform standard of administrative efficiency
and check the official conduct of his agents. 22 To this end, he can issue administrative orders, rules and
regulations.

Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not appropriate to be
covered by an administrative order. An administrative order is:
Sec. 3. Administrative Orders. — Acts of the President which relate to particular aspects of
governmental operation in pursuance of his duties as administrative head shall be
promulgated in administrative orders. 23

An administrative order is an ordinance issued by the President which relates to specific aspects in
the administrative operation of government. It must be in harmony with the law and should be for
the sole purpose of implementing the law and carrying out the legislative policy. 24 We reject the
argument that A.O. No. 308 implements the legislative policy of the Administrative Code of 1987.
The Code is a general law and "incorporates in a unified document the major structural, functional
and procedural principles of governance." 25 and "embodies changes in administrative structure and
procedures designed to serve the
people." 26 The Code is divided into seven (7) Books: Book I deals with Sovereignty and General
Administration, Book II with the Distribution of Powers of the three branches of Government, Book
III on the Office of the President, Book IV on the Executive Branch, Book V on Constitutional
Commissions, Book VI on National Government Budgeting, and Book VII on Administrative
Procedure. These Books contain provisions on the organization, powers and general administration
of the executive, legislative and judicial branches of government, the organization and administration
of departments, bureaus and offices under the executive branch, the organization and functions of
the Constitutional Commissions and other constitutional bodies, the rules on the national
government budget, as well as guideline for the exercise by administrative agencies of quasi-
legislative and quasi-judicial powers. The Code covers both the internal administration of
government, i.e, internal organization, personnel and recruitment, supervision and discipline, and
the effects of the functions performed by administrative officials on private individuals or parties
outside government. 27

It cannot be simplistically argued that A.O. No. 308 merely implements the Administrative Code of 1987. It
establishes for the first time a National Computerized Identification Reference System. Such a System
requires a delicate adjustment of various contending state policies — the primacy of national security, the
extent of privacy interest against dossier-gathering by government, the choice of policies, etc. Indeed, the
dissent of Mr. Justice Mendoza states that the A.O. No. 308 involves the all-important freedom of thought. As
said administrative order redefines the parameters of some basic rights of our citizenry vis-a-vis the State as
well as the line that separates the administrative power of the President to make rules and the legislative
power of Congress, it ought to be evident that it deals with a subject that should be covered by law.

Nor is it correct to argue as the dissenters do that A.D. No. 308 is not a law because it confers no right,
imposes no duty, affords no proctection, and creates no office. Under A.O. No. 308, a citizen cannot transact
business with government agencies delivering basic services to the people without the contemplated
identification card. No citizen will refuse to get this identification card for no one can avoid dealing with
government. It is thus clear as daylight that without the ID, a citizen will have difficulty exercising his rights
and enjoying his privileges. Given this reality, the contention that A.O. No. 308 gives no right and imposes no
duty cannot stand.

Again, with due respect, the dissenting opinions unduly expand the limits of administrative legislation and
consequently erodes the plenary power of Congress to make laws. This is contrary to the established
approach defining the traditional limits of administrative legislation. As well stated by Fisher: ". . . Many
regulations however, bear directly on the public. It is here that administrative legislation must he restricted in
its scope and application. Regulations are not supposed to be a substitute for the general policy-making that
Congress enacts in the form of a public law. Although administrative regulations are entitled to respect, the
authority to prescribe rules and regulations is not an independent source of power to make laws." 28

III

Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it cannot pass constitutional
muster as an administrative legislation because facially it violates the right to privacy. The essence of privacy
is the "right to be let alone." 29 In the 1965 case of Griswold v. Connecticut, 30 the United States Supreme
Court gave more substance to the right of privacy when it ruled that the right has a constitutional foundation.
It held that there is a right of privacy which can be found within the penumbras of the First, Third, Fourth,
Fifth and Ninth Amendments, 31 viz:

Specific guarantees in the Bill of Rights have penumbras formed by emanations from these
guarantees that help give them life and substance . . . various guarantees create zones of
privacy. The right of association contained in the penumbra of the First Amendment is one,
as we have seen. The Third Amendment in its prohibition against the quartering of soldiers
"in any house" in time of peace without the consent of the owner is another facet of that
privacy. The Fourth Amendment explicitly affirms the ''right of the people to be secure in
their persons, houses and effects, against unreasonable searches and seizures." The Fifth
Amendment in its Self-Incrimination Clause enables the citizen to create a zone of privacy
which government may not force him to surrender to his detriment. The Ninth Amendment
provides: "The enumeration in the Constitution, of certain rights, shall not be construed to
deny or disparage others retained by the people."

In the 1968 case of Morfe v. Mutuc, 32 we adopted the Griswold ruling that there is a constitutional
right to privacy. Speaking thru Mr. Justice, later Chief Justice, Enrique Fernando, we held:

xxx xxx xxx

The Griswold case invalidated a Connecticut statute which made the use of contraceptives a
criminal offence on the ground of its amounting to an unconstitutional invasion of the right
of privacy of married persons; rightfully it stressed "a relationship lying within the zone of
privacy created by several fundamental constitutional guarantees." It has wider implications
though. The constitutional right to privacy has come into its own.

So it is likewise in our jurisdiction. The right to privacy as such is accorded recognition


independently of its identification with liberty; in itself, it is fully deserving of constitutional
protection. The language of Prof. Emerson is particularly apt: "The concept of limited
government has always included the idea that governmental powers stop short of certain
intrusions into the personal life of the citizen. This is indeed one of the basic distinctions
between absolute and limited government. Ultimate and pervasive control of the individual,
in all aspects of his life, is the hallmark of the absolute state. In contrast, a system of limited
government safeguards a private sector, which belongs to the individual, firmly
distinguishing it from the public sector, which the state can control. Protection of this
private sector — protection, in other words, of the dignity and integrity of the individual —
has become increasingly important as modern society has developed. All the forces of a
technological age — industrialization, urbanization, and organization — operate to narrow
the area of privacy and facilitate intrusion into it. In modern terms, the capacity to maintain
and support this enclave of private life marks the difference between a democratic and a
totalitarian society."

Indeed, if we extend our judicial gaze we will find that the right of privacy is recognized and enshrined in
several provisions of our Constitution. 33 It is expressly recognized in section 3 (1) of the Bill of Rights:

Sec. 3. (1) The privacy of communication and correspondence shall be inviolable except upon
lawful order of the court, or when public safety or order requires otherwise as prescribed by
law.

Other facets of the right to privacy are protectad in various provisions of the Bill of Rights, viz: 34

Sec. 1. No person shall be deprived of life, liberty, or property without due process of law,
nor shall any person be denied the equal protection of the laws.
Sec. 2. The right of the people to be secure in their persons, houses papers, and effects
against unreasonable searches and seizures of whatever nature and for any purpose shall be
inviolable, and no search warrant or warrant of arrest shall issue except upon probable
cause to be determined personally by the judge after examination under oath or affirmation
of the complainant and the witnesses he may produce, and particularly describing the place
to be searched and the persons or things to be seized.

xxx xxx xxx

Sec. 6. The liberty of abode and of changing the same within the limits prescribed by law
shall not be impaired except upon lawful order of the court. Neither shall the right to travel
be impaired except in the interest of national security, public safety, or public health as may
be provided by law.

xxx xxx xxx

Sec. 8. The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for purposes not contrary to law shall not be abridged.

Sec. 17. No person shall be compelled to be a witness against himself.

Zones of privacy are likewise recognized and protected in our laws. The Civil Code provides that "[e]very
person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons"
and punishes as actionable torts several acts by a person of meddling and prying into the privacy of
another. 35 It also holds a public officer or employee or any private individual liable for damages for any
violation of the rights and liberties of another person, 36 and recognizes the privacy of letters and other
private communications. 37 The Revised Penal Code makes a crime the violation of secrets by an officer, 38 the
revelation of trade and industrial secrets, 39 and trespass to dwelling. 40 Invasion of privacy is an offense in
special laws like the Anti-Wiretapping Law, 41 the Secrecy of Bank Deposits Act 42 and the Intellectual
Property Code. 43 The Rules of Court on privileged communication likewise recognize the privacy of certain
information. 44

Unlike the dissenters, we prescind from the premise that the right to privacy is a fundamental right
guaranteed by the Constitution, hence, it is the burden of government to show that A.O. No. 308 is justified
by some compelling state interest and that it is narrowly drawn. A.O. No. 308 is predicated on two
considerations: (1) the need to provides our citizens and foreigners with the facility to conveniently transact
business with basic service and social security providers and other government instrumentalities and (2) the
need to reduce, if not totally eradicate, fraudulent transactions and misrepresentations by persons seeking
basic services. It is debatable whether these interests are compelling enough to warrant the issuance of A.O.
No. 308. But what is not arguable is the broadness, the vagueness, the overbreadth of A.O. No. 308 which if
implemented will put our people's right to privacy in clear and present danger.

The heart of A.O. No. 308 lies in its Section 4 which provides for a Population Reference Number (PRN) as a
"common reference number to establish a linkage among concerned agencies" through the use of
"Biometrics Technology" and "computer application designs."

Biometry or biometrics is "the science of the applicatin of statistical methods to biological facts; a
mathematical analysis of biological data." 45 The term "biometrics" has evolved into a broad category of
technologies which provide precise confirmation of an individual's identity through the use of the individual's
own physiological and behavioral characteristics. 46 A physiological characteristic is a relatively stable
physical characteristic such as a fingerprint, retinal scan, hand geometry or facial features. A behavioral
characteristic is influenced by the individual's personality and includes voice print, signature and
keystroke. 47 Most biometric idenfication systems use a card or personal identificatin number (PIN) for initial
identification. The biometric measurement is used to verify that the individual holding the card or entering
the PIN is the legitimate owner of the card or PIN. 48

A most common form of biological encoding is finger-scanning where technology scans a fingertip and turns
the unique pattern therein into an individual number which is called a biocrypt. The biocrypt is stored in
computer data banks 49 and becomes a means of identifying an individual using a service. This technology
requires one's fingertip to be scanned every time service or access is provided. 50 Another method is the
retinal scan. Retinal scan technology employs optical technology to map the capillary pattern of the retina of
the eye. This technology produces a unique print similar to a finger print. 51 Another biometric method is
known as the "artificial nose." This device chemically analyzes the unique combination of substances
excreted from the skin of people. 52 The latest on the list of biometric achievements is the thermogram.
Scientists have found that by taking pictures of a face using infra-red cameras, a unique heat distribution
pattern is seen. The different densities of bone, skin, fat and blood vessels all contribute to the individual's
personal "heat signature." 53

In the last few decades, technology has progressed at a galloping rate. Some science fictions are now science
facts. Today, biometrics is no longer limited to the use of fingerprint to identify an individual. It is a new
science that uses various technologies in encoding any and all biological characteristics of an individual for
identification. It is noteworthy that A.O. No. 308 does not state what specific biological characteristics and
what particular biometrics technology shall be used to identify people who will seek its coverage. Considering
the banquest of options available to the implementors of A.O. No. 308, the fear that it threatens the right to
privacy of our people is not groundless.

A.O. No. 308 should also raise our antennas for a further look will show that it does not state whether
encoding of data is limited to biological information alone for identification purposes. In fact, the Solicitor
General claims that the adoption of the Identification Reference System will contribute to the "generation of
population data for development planning." 54 This is an admission that the PRN will not be used solely for
identification but the generation of other data with remote relation to the avowed purposes of A.O. No. 308.
Clearly, the indefiniteness of A.O. No. 308 can give the government the roving authority to store and retrieve
information for a purpose other than the identification of the individual through his PRN.

The potential for misuse of the data to be gathered under A.O. No. 308 cannot be undarplayed as the
dissenters do. Pursuant to said administrative order, an individual must present his PRN everytime he deals
with a government agency to avail of basic services and security. His transactions with the government
agency will necessarily be recorded — whether it be in the computer or in the documentary file of the agency.
The individual's file may include his transactions for loan availments, income tax returns, statement of assets
and liabilities, reimbursements for medication, hospitalization, etc. The more frequent the use of the PRN, the
better the chance of building a huge formidable informatin base through the electronic linkage of the
files. 55 The data may be gathered for gainful and useful government purposes; but the existence of this vast
reservoir of personal information constitutes a covert invitation to misuse, a temptation that may be too great
for some of our authorities to resist. 56

We can even grant, arguendo, that the computer data file will be limited to the name, address and other basic
personal infomation about the individual. 57 Even that hospitable assumption will not save A.O. No. 308 from
constitutional infirmity for again said order does not tell us in clear and categorical terms how these
information gathered shall he handled. It does not provide who shall control and access the data, under what
circumstances and for what purpose. These factors are essential to safeguard the privacy and guaranty the
integrity of the information. 58 Well to note, the computer linkage gives other government agencies access to
the information. Yet, there are no controls to guard against leakage of information. When the access code of
the control programs of the particular computer system is broken, an intruder, without fear of sanction or
penalty, can make use of the data for whatever purpose, or worse, manipulate the data stored within the
system. 59

It is plain and we hold that A.O. No. 308 falls short of assuring that personal information which will be
gathered about our people will only be processed for unequivocally specified purposes. 60 The lack of proper
safeguards in this regard of A.O. No. 308 may interfere with the individual's liberty of abode and travel by
enabling authorities to track down his movement; it may also enable unscrupulous persons to access
confidential information and circumvent the right against self-incrimination; it may pave the way for "fishing
expeditions" by government authorities and evade the right against unreasonable searches and
seizures. 61 The possibilities of abuse and misuse of the PRN, biometrics and computer technology are
accentuated when we consider that the individual lacks control over what can be read or placed on his ID,
much less verify the correctness of the data encoded. 62 They threaten the very abuses that the Bill of Rights
seeks to prevent. 63

The ability of sophisticated data center to generate a comprehensive cradle-to-grave dossier on an individual
and transmit it over a national network is one of the most graphic threats of the computer revolution. 64 The
computer is capable of producing a comprehensive dossier on individuals out of information given at
different times and for varied purposes. 65 It can continue adding to the stored data and keeping the
information up to date. Retrieval of stored date is simple. When information of a privileged character finds
its way into the computer, it can be extracted together with other data on the subject. 66 Once extracted, the
information is putty in the hands of any person. The end of privacy begins.

Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions would dismiss its danger to
the right to privacy as speculative and hypothetical. Again, we cannot countenance such a laidback posture.
The Court will not be true to its role as the ultimate guardian of the people's liberty if it would not
immediately smother the sparks that endanger their rights but would rather wait for the fire that could
consume them.

We reject the argument of the Solicitor General that an individual has a reasonable expectation of privacy
with regard to the Natioal ID and the use of biometrics technology as it stands on quicksand. The
reasonableness of a person's expectation of privacy depends on a two-part test: (1) whether by his conduct,
the individual has exhibited an expectation of privacy; and (2) whether this expectation is one that society
recognizes as reasonable. 67 The factual circumstances of the case determines the reasonableness of the
expectation. 68 However, other factors, such as customs, physical surroundings and practices of a particular
activity, may serve to create or diminish this expectation. 69 The use of biometrics and computer technology in
A.O. No. 308 does not assure the individual of a reasonable expectation of privacy. 70 As technology advances,
the level of reasonably expected privacy decreases. 71 The measure of protection granted by the reasonable
expectation diminishes as relevant technology becomes more widely accepted. 72 The security of the computer
data file depends not only on the physical inaccessibility of the file but also on the advances in hardware and
software computer technology. A.O. No. 308 is so widely drawn that a minimum standard for a reasonable
expectation of privacy, regardless of technology used, cannot be inferred from its provisions.

The rules and regulations to be by the IACC cannot remedy this fatal defect. Rules and regulations merely
implement the policy of the law or order. On its face, A.O. No. gives the IACC virtually infettered discretion
to determine the metes and bounds of the ID System.

Nor do your present laws prvide adequate safeguards for a reasonable expectation of privacy.
Commonwealth Act. No. 591 penalizes the disclosure by any person of data furnished by the individual to the
NSO with imprisonment and fine. 73 Republic Act. No. 1161 prohibits public disclosure of SSS employment
records and reports. 74 These laws, however, apply to records and data with the NSO and the SSS. It is not
clear whether they may be applied to data with the other government agencies forming part of the National
ID System. The need to clarify the penal aspect of A.O. No. 308 is another reason why its enactment should be
given to Congress.

Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right of privacy by using the
rational relationship test. 75 He stressed that the purposes of A.O. No. 308 are: (1) to streamline and speed up
the implementation of basic government services, (2) eradicate fraud by avoiding duplication of services, and
(3) generate population data for development planning. He cocludes that these purposes justify the incursions
into the right to privacy for the means are rationally related to the end. 76
We are not impressed by the argument. In Morfe v. Mutuc, 77 we upheld the constitutionality of R.A. 3019, the
Anti-Graft and Corrupt Practices Act, as a valid police power measure. We declared that the law, in
compelling a public officer to make an annual report disclosing his assets and liabilities, his sources of income
and expenses, did not infringe on the individual's right to privacy. The law was enacted to promote morality
in public administration by curtailing and minimizing the opportunities for official corruption and
maintaining a standard of honesty in the public service. 78

The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a statute, not an
administrative order. Secondly, R.A. 3019 itself is sufficiently detailed. The law is clear on what practices
were prohibited and penalized, and it was narrowly drawn to avoid abuses. IN the case at bar, A.O. No. 308
may have been impelled by a worthy purpose, but, it cannot pass constitutional scrutiny for it is not narrowly
drawn. And we now hod that when the integrity of a fundamental right is at stake, this court will give the
challenged law, administrative order, rule or regulation a stricter scrutiny. It will not do for the authorities to
invoke the presumption of regularity in the performance of official duties. Nor is it enough for the authorities
to prove that their act is not irrational for a basic right can be diminished, if not defeated, even when the
government does not act irrationally. They must satisfactorily show the presence of compelling state interests
and that the law, rule or regulation is narrowly drawn to preclude abuses. This approach is demanded by the
1987 Constitution whose entire matrix is designed to protect human rights and to prevent authoritarianism.
In case of doubt, the least we can do is to lean towards the stance that will not put in danger the rights
protected by the Constitutions.

The case of Whalen v. Roe 79 cited by the Solicitor General is also off-line. In Whalen, the United States
Supreme Court was presented with the question of whether the State of New York could keep a centralized
computer record of the names and addresses of all persons who obtained certain drugs pursuant to a doctor's
prescription. The New York State Controlled Substance Act of 1972 required physicians to identify parties
obtaining prescription drugs enumerated in the statute, i.e., drugs with a recognized medical use but with a
potential for abuse, so that the names and addresses of the patients can be recorded in a centralized computer
file of the State Department of Health. The plaintiffs, who were patients and doctors, claimed that some
people might decline necessary medication because of their fear that the computerized data may be readily
available and open to public disclosure; and that once disclosed, it may stigmatize them as drug
addicts. 80 The plaintiffs alleged that the statute invaded a constitutionally protected zone of privacy, i.e., the
individual interest in avoiding disclosure of personal matters, and the interest in independence in making
certain kinds of important decisions. The U.S. Supreme Court held that while an individual's interest in
avoiding disclosuer of personal matter is an aspect of the right to privacy, the statute did not pose a grievous
threat to establish a constitutional violation. The Court found that the statute was necessary to aid in the
enforcement of laws designed to minimize the misuse of dangerous drugs. The patient-identification
requirement was a product of an orderly and rational legislative decision made upon recommmendation by a
specially appointed commission which held extensive hearings on the matter. Moreover, the statute was
narrowly drawn and contained numerous safeguards against indiscriminate disclosure. The statute laid down
the procedure and requirements for the gathering, storage and retrieval of the informatin. It ebumerated who
were authorized to access the data. It also prohibited public disclosure of the data by imposing penalties for
its violation. In view of these safeguards, the infringement of the patients' right to privacy was justified by a
valid exercise of police power. As we discussed above, A.O. No. 308 lacks these vital safeguards.

Even while we strike down A.O. No. 308, we spell out in neon that the Court is not per se agains the use of
computers to accumulate, store, process, retvieve and transmit data to improve our bureaucracy. Computers
work wonders to achieve the efficiency which both government and private industry seek. Many information
system in different countries make use of the computer to facilitate important social objective, such as better
law enforcement, faster delivery of public services, more efficient management of credit and insurance
programs, improvement of telecommunications and streamlining of financial activities. 81 Used wisely, data
stored in the computer could help good administration by making accurate and comprehensive information
for those who have to frame policy and make key decisions. 82 The benefits of the computer has revolutionized
information technology. It developed the internet, 83 introduced the concept of cyberspace 84 and the
information superhighway where the individual, armed only with his personal computer, may surf and
search all kinds and classes of information from libraries and databases connected to the net.
In no uncertain terms, we also underscore that the right to privacy does not bar all incursions into individual
privacy. The right is not intended to stifle scientific and technological advancements that enhance public
service and the common good. It merely requires that the law be narrowly focused 85 and a compelling
interest justify such intrusions. 86 Intrusions into the right must be accompanied by proper safeguards and
well-defined standards to prevent unconstitutional invasions. We reiterate that any law or order that invades
individual privacy will be subjected by this Court to strict scrutiny. The reason for this stance was laid down
in Morfe v. Mutuc, to wit:

The concept of limited government has always included the idea that governmental powers
stop short of certain intrusions into the personal life of the citizen. This is indeed one of the
basic disctinctions between absolute and limited government. Ultimate and pervasive control
of the individual, in all aspects of his life, is the hallmark of the absolute state. In contrast, a
system of limited government safeguards a private sector, which belongs to the individual,
firmly distinguishing it from the public sector, which the state can control. Protection of this
private sector — protection, in other words, of the dignity and integrity of the individual —
has become increasingly important as modern society has developed. All the forces of a
technological age — industrialization, urbanization, and organization — operate to narrow
the area of privacy and facilitate intrusion into it. In modern terms, the capacity to maintain
and support this enclave of private life marks the difference between a democratic and a
totalitarian society. 87

IV

The right to privacy is one of the most threatened rights of man living in a mass society. The threats emanate
from various sources — governments, journalists, employers, social scientists, etc. 88 In th case at bar, the
threat comes from the executive branch of government which by issuing A.O. No. 308 pressures the people to
surrender their privacy by giving information about themselves on the pretext that it will facilitate delivery of
basic services. Given the record-keeping power of the computer, only the indifferent fail to perceive the
danger that A.O. No. 308 gives the government the power to compile a devastating dossier against
unsuspecting citizens. It is timely to take note of the well-worded warning of Kalvin, Jr., "the disturbing
result could be that everyone will live burdened by an unerasable record of his past and his limitations. In a
way, the threat is that because of its record-keeping, the society will have lost its benign capacity to
forget." 89 Oblivious to this counsel, the dissents still say we should not be too quick in labelling the right to
privacy as a fundamental right. We close with the statement that the right to privacy was not engraved in our
Constitution for flattery.

IN VIEW WHEREOF, the petition is granted and Adminisrative Order No. 308 entitled "Adoption of a
National Computerized Identification Reference System" declared null and void for being unconstitutional.

SO ORDERED.
EN BANC

G.R. No. 157286 June 16, 2006

THE PUBLIC SCHOOLS DISTRICT SUPERVISORS ASSOCIATION (PSDSA), its officers, to wit: DR.
ANILLA A. CALAMBA, President; DR. CARMELITA L. PALABAY, Gen. Vice-President; MS. ESTELITA
R. REYES, Board Secretary; DR. THELMA A. GALANG, Asst. Board Secretary; MR. FERNANDO
LAVITA, Treasurer; MS. LITA DIONISIO, Asst. Treasurer; MS. ROSELILY PADRE, Auditor; MR.
ROMAN CALICDAN, Asst. Auditor; MR. TOMO-AY, MR. OSCAR PEÑAFLORIDA, Bus. Managers; DR.
ANTONETTE ANG, DR. MAGNITA LABRADOR, P.R.O.’S; MR. BONIFACIO MIGUEL (Region I), MR.
JOSE CALAGUI (Region II), DR. REYNALDO SAGUM (Region III), MR. RUBEN PANAHON (Region
IV), MR. OSCAR BARBA (Region V), MS. IRMA GANELA (Region VI), DR. ERLINDA NAPULI (Region
VII), DR. PONCIANO GABIETA (Region VIII), MR. FEDERICO FIDEL (Region IX), MR.EMILIANO V.
RODRIGUEZ (Region X), MS. EDWINA ALAG (Region XI), MR. DOMINADOR ATAM (Region XII), MS.
CONSUELO VELASCO (NCR), MR. VICTORINO AGMATA (CAR), MS. NATIVIDAD SALASAB
(ARMM-CARAGA), All PSDSA Vice-Presidents for their respective Regions: DR. LOLITA CABANAYAN,
MR. CICERO AKLANG, DR. RUSTICO OCAMPO, MR. ROMEO SANTOS, MR. EMMANUEL CAMA,
MR. ROMEO TUMAOB, MR. JOVENCIO MENDOZA, MR. ALEJANDRO BARING, JR., MS.
BERNARDITA APOSTOL, MS. LORETA MACALUDAS, DR. MYRNA LYN MARACON, MS.
ELIZABETH SAN DIEGO, SITH HINDRON DAMMANG, MS. IMMACULADA BRINGAS, and MS.
GLORIA DERECHO, all members of the PSDSA Board of Directors, in their own behalf as current District
Supervisors and IN REPRESENTATION OF ALL DISTRICT SUPERVISORS OF THE DEPARTMENT
OF EDUCATION, Petitioners,
vs.
HON. EDILBERTO C. DE JESUS, Department Secretary, THE DEPARTMENT OF EDUCATION, and
THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.

DECISION

CALLEJO, SR., J.:

This is a Petition for Prohibition with prayer for temporary restraining order and/or preliminary injunction filed by
the Public Schools District Supervisor Association (PSDSA) seeking to declare as unconstitutional Rule IV, Section
4.3; Rule V, Sections 5.1 and the second paragraph of Section 5.2; and Rule VI, Section 6.2, paragraph 11 of
Department of Education Order No. 1, Series of 2003. The petition likewise seeks to compel, by way of a writ of
mandamus, the Department of Education, Culture, and Sports (DECS) and the Department of Budget and
Management (DBM) to upgrade the salary grade level of the district supervisors from Salary Grade (SG) 19 to SG
24.

The Antecedents

Ever since the Department of Education (DepEd)1 was founded decades ago, its management had been so
centralized in the Manila office. Schools in the national, regional, and division levels merely followed and
implemented the orders and memoranda issued by the Education Secretary. Due to the evolution of the learning
process and the onset of information technology, there was a need for a radical change in the governance of the
DepEd. Thus, a study on how to improve the management of the Department was conducted, and one of the
proposals was the abolition of the office of the district supervisor.

Then Senator Tessie Aquino-Oreta, the Chairman of the Committee on Education, authored Senate Bill No. 2191,
the thrust of which was to change the existing management style and focus on the schools where the teaching-
learning process occurs. The bill was intended to highlight shared governance in the different levels in the DECS
hierarchy and establish authority, accountability, and responsibility for achieving higher learning outcomes. While
the governance of basic education would begin at the national level, the field offices (regions, divisions, schools, and
learning centers) would translate the policy into programs, projects, and services to fit local needs. 2 The national
level was likewise to be tasked to define the roles and responsibilities of, and provide resources to the field offices
which would implement educational programs, projects, and services in communities they serve. 3 At the forefront
would be the DepEd Secretary, vested with the overall authority and supervision over the operations of the
department on the national, regional, division, and schools district level.4

Republic Act No. 9155, otherwise known as the "Governance of Basic Education Act 2001," became a law on
August 11, 2001, in accordance with Section 27(1), Article VI of the Constitution. Under the law, each regional
office shall have a director, an assistant director, and an office staff for program promotion and support, planning,
administrative and fiscal services.5 The regional director was given the authority to hire, place and evaluate all
employees in the regional office except for the position of assistant director, 6 as well as the authority, accountability,
and responsibility to determine the organization component of the divisions and districts, and approve the staffing
pattern of all employees therein;7 evaluate all division superintendents and assistant division superintendents in the
region;8 and other functions as may be assigned by the proper authorities. 9

A division, on the other hand, is headed by a schools division superintendent with the following responsibilities,
among others: to supervise the operations of all public and private elementary, secondary, and integrated schools,
and learning centers;10 to hire, place and evaluate all division supervisors and schools district supervisors as well as
all employees in the divisions, both teaching and non-teaching personnel, including school heads, except for the
assistant division superintendent;11 and perform other functions as may be assigned by proper authorities. 12

The office of the schools district supervisor has been retained under the law. Each district is headed by a school
district supervisor and an office staff for program promotion. However, the responsibilities of the schools district
supervisor are limited to the following: (1) providing professional and instructional advice and support to the school
heads and teachers/facilitators of schools and learning centers in the district or cluster thereof; (2) curricula
supervision; and (3) performing such other functions as may be assigned by proper authorities. The schools district
supervisors have no administrative, management, control or supervisory functions over the schools and learning
centers within their respective districts.13

On the school level, an Elementary School Principal (ESP) was designated as school head for all public elementary
schools; and a Secondary School Principal (SSP) for high schools or a cluster thereof.14 The ESP and the SSP serve
as both instructional leaders and administrative managers with the following authority, accountability and
responsibility:

(7) Administering and managing all personnel, physical, and fiscal resources of the school;

(8) Recommending the staffing complement of the school based on its needs;

(9) Encouraging staff development;

xxxx

(11) Accepting donations, gifts, bequests, and grants for the purpose of upgrading teachers’/learning
facilitators’ competencies, improving and expanding school facilities, and providing instructional materials
and equipment. Such donations or grants must be reported to the appropriate district supervisors and
division superintendents; and

(12) Performing such other functions as may be assigned by proper authorities. 15

Under Section 14 of the law, the DepEd Secretary is mandated to "promulgate the implementing rules and
regulations within ninety (90) days after the approval of the Act, provided that the principle of shared governance
shall be fully implemented within two (2) years" after such approval.
Before the DepEd could issue the appropriate implementing rules and regulations, petitioner sought the legal
assistance of the Integrated Bar of the Philippines (IBP) National Committee on Legal Aid to make representations
for the resolution of the following administrative issues:

1. Restoration of the functions, duties, responsibilities, benefits, prerogatives, and position level of Public
Schools District Supervisors.

2. Upgrading of Salary Grade level of Public Schools District Supervisors from Salary Grade Level 19 to
Salary Grade Level 24 under DBM Circular No. 36, otherwise known as the Compensation and Position
Classification Rules and Regulation.16

In a Letter dated March 1, 2002 addressed to then DepEd Secretary Raul Roco, the IBP stated that, per its review of
the documents submitted by the PSDSA, it found the latter’s position valid and legal, to wit:

First: The basis for the abolition of the position of District Supervisors under the Attrition Law and DECS
Department Order No. 110, Series of 1991 is no longer valid and rendered moot and academic due to issuance of
DECS Department Order No. 22, Series of 1996 and the passage by Congress of the Philippines of Republic Act No.
9155, otherwise known as the Basic Education Governance Act of 2000. Under R.A. 9155, school districts are
mandated to be maintained and responsibilities of Public School’s Districts Supervisors have been clearly defined.

Second: There is a clear case of discrimination of grant of salaries and benefits to District Supervisors compared to
salaries and benefits received by the School Principals – which position is lower in the hierarchy of positions as
prepared by the Department of Education and the Department of Budget and Management. School Principals and
District Supervisors enjoy the same level of Salary Grade even if the latter position is considered as a promotion and
enjoys a higher level of position than that of the position of School Principals. 17

The PSDSA thus requested the DepEd Secretary to call an immediate consultation with the district supervisors
nationwide through a convention, and their valid inputs be considered in formulating the rules and regulations to be
urged by the DepEd. However, the Secretary failed to reply. Thus, the IBP reiterated the concerns raised by the
PSDSA in a Letter18 to the DepEd dated April 15, 2002.

On January 6, 2003, DepEd Secretary Edilberto C. De Jesus issued DECS Office Order No. 1, which constitutes the
Implementing Rules and Regulations (IRR) of R.A. No. 9155. Sections 4.1 to 4.3, Rule IV of the IRR provide:

SECTION 4.1. The Schools Division Superintendent. – A division shall consist of a province or city which shall
have a schools division superintendent. There shall be at least one assistant schools division superintendent and
office staff for programs promotion, planning, administrative, fiscal, legal, ancillary, and other support services.

SECTION 4.2. Authority, Accountability, and Responsibility of the Schools Division Superintendent. – Consistent
with the national educational policies, plans, and standards, the schools division superintendents shall have
authority, accountability, and responsibility for the following:

1) Developing and implementing division education development plans;

2) Planning and managing the effective and efficient performance of all personnel, physical, and fiscal
resources of the division, including professional staff development;

3) Hiring, placing, and evaluating all division supervisors and schools district supervisors as well as all
employees in the division, both teaching and non-teaching personnel, including school heads, except for the
assistant division superintendents;

4) Monitoring the utilization of funds provided by the national government and the local government units
to the schools and learning centers;
5) Ensuring compliance of quality standards for basic education programs and for this purpose
strengthening the role of division supervisors as subject area specialists;

6) Promoting awareness of, and adherence by, all schools and learning centers to accreditation standards
prescribed by the Secretary of Education;

7) Supervising the operations of all public and private elementary, secondary, and integrated schools, and
learning centers; and

8) Performing such other functions as may be assigned by the Secretary and/or Regional Director.

SECTION 4.3. Appointing and Disciplinary Authority of the Schools Division Superintendent. – The schools
district superintendent shall appoint the division supervisors and school district supervisors as well as all employees
in the division, both teaching and non-teaching personnel, including school heads, except for the assistant schools
division superintendent, subject to the civil service laws, rules and regulations, and the policies and guidelines to be
issued by the Secretary of Education for the purpose.

The schools division superintendent shall have disciplinary authority only over the non-teaching personnel under his
jurisdiction.

Such exercise of disciplinary authority by the schools division superintendent over the non-teaching personnel shall
be subject to the civil service laws, rules and regulations, and procedures and guidelines to be issued by the
Secretary of Education relative to this matter.

The Regional Director shall continue exercising disciplinary authority over the teaching personnel insofar as the
latter are covered by specific and exclusive disciplinary provisions under the Magna Carta for Public School
Teachers (R.A. No. 4670).19

Sections 5.1 and 5.2, Rule V of the IRR, in turn, provide:

SECTION 5.1. The Schools District Supervisor. – A school district shall have a school district supervisor and office
staff for program promotion.

The schools district supervisor shall primarily perform staff functions and shall not exercise administrative
supervision over school principals, unless specifically authorized by the proper authorities. The main focus of
his/her functions shall be instructional and curricula supervision aimed at raising academic standards at the school
level.

The schools district supervisor shall be specifically responsible for:

1) Providing professional and instructional advice and support to the school heads and teachers/facilitators
of schools and learning centers in the district or cluster thereof;

2) Curricula supervision; and

3) Performing such other functions as may be assigned by the Secretary, Regional Directors, and Schools
Division Superintendents where they belong.

The schools district supervisor being mentioned in this section shall refer to a public schools district supervisor.

SECTION 5.2. The School District. – A school district already existing at the time of the passage of this Act shall be
maintained. However, an additional school district may be established by the regional director based on criteria set
by the Secretary and on the recommendation of the schools division superintendent. For this purpose, the Secretary
of Education shall set standards and formulate criteria as basis of the Regional Directors of the establishment of an
additional school district.20

On March 13, 2003, the PSDSA, the national organization of about 1,800 public school district supervisors of the
DepEd, in behalf of its officers and members, filed the instant petition for prohibition and mandamus, alleging that:

I. THE ACT OF THE DEPARTMENT OF EDUCATION IN REMOVING PETITIONERS’ ADMINISTRATIVE


SUPERVISION OVER ELEMENTARY SCHOOLS AND ITS PRINCIPALS (SCHOOL HEADS) WITHIN
HIS/HER DISTRICT AND CONVERTING HIS/HER ADMINISTRATIVE FUNCTION TO THAT OF
PERFORMING STAFF FUNCTION FOR THE DIVISION OFFICE PER SECTION 5.1 RULE V OF THE
IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT 9155 (DEPED ORDER NO. 1, SERIES
OF 2003) IS A GROSS VIOLATION OF REPUBLIC ACT 9155 – THE GOVERNANCE OF BASIC
EDUCATION ACT OF 2001.

II. THE IMPLEMENTING RULES AND REGULATION OF REPUBLIC ACT 9155 AS PROMULGATED
UNDER DEPED ORDER NO. 1, SERIES OF 2003 EXPANDED THE LAW AND INCLUDED PROVISIONS
WHICH ARE DIAMETRICALLY OPPOSED TO THE LETTER AND SPIRIT OF THE SUBJECT LAW.

III. THE DOWNGRADING OF SALARY GRADE LEVEL OF THE PUBLIC SCHOOLS DISTRICT
SUPERVISOR OR THE NEGLECT OR REFUSAL OF THE DEPARTMENT OF EDUCATION AND THE
DEPARTMENT OF BUDGET AND MANAGEMENT TO UPGRADE THE SALARY GRADE LEVEL OF
PUBLIC SCHOOLS DISTRICT TO A RESPECTABLE LEVEL OF SALARY GRADE HIGHER THAN THAT
OF THE PRINCIPALS – DESPITE CLEAR INTENTION OF R.A. 9155 TO RETAIN THE POSITION OF PSDS
IN THE HIERARCHY OF ADMINISTRATIVE MANAGERS AND OFFICERS OF THE DEPARTMENT OF
EDUCATION – IS UNCONSTITUTIONAL AND ILLEGAL.21

Petitioners maintain that the questioned provisions of the IRR are invalid because they "extended or expanded and
modified" the provisions of R.A. No. 9155. They argue that the said law should be read in harmony with other
"existing educational laws" which it did not specifically repeal, such as Batas Pambansa Blg. 232, otherwise known
as "The Education Act of 1982," as amended by R.A. No. 7798; R.A. No. 4670, otherwise known as the "Magna
Charta for Public School Teachers"; and R.A. No. 7784 captioned "An Act to Strengthen Teacher Education in the
Philippines by Establishing Centers of Excellence, Creating a Teacher Education Council for the Purpose,
Appropriating Funds Therefore, and for Other Purposes."

Petitioners assert that under Section 7(D) of R.A. No. 9155, the district offices of the DepEd are intended as field
offices where the district supervisors can assist the ESPs and teachers/learning facilitators within their district as
experienced educational managers. Thus, the district supervisors were not divested of the inherent administrative
functions to manage and oversee the schools within their respective districts, including their subordinates. They
emphasize that the law provides an "office staff for program promotion" in the school districts, which would be of
no use if the office has no administrative supervision over schools within its respective districts.

Petitioners assert that under the IRR, the schools district supervisors primarily perform staff functions and shall not
exercise administrative supervision over school principals, unless specifically authorized by the proper authorities.
Thus, under the IRR, the exercise of administrative supervision over school principals was made discretionary and
subject to the whims and caprices of "the proper authorities." The logical inference of this provision, petitioners
aver, is that the administrative supervisory powers can be withdrawn from a district supervisor without any reason at
all, a provision which has no basis in the enabling law.

Petitioners further contend that the DepEd has no authority to incorporate its plan of downgrading the position of
district supervisor, that is, from being an administrator of a particular district office to a position performing a staff
function, to exercise administrative supervision over the school principals only when specifically authorized by
proper authorities. Petitioners insist that respondent Education Secretary was focused on removing the level of
management in the district office, such that the IRR empower school heads (principals) to have administrative and
instructional supervision of school or cluster of schools, while supervision of all public and private elementary,
secondary, and integrated schools and learning centers was given to the division office.

Petitioners further insist that respondent Education Secretary failed to consider the fact that R.A. No. 9155
strengthened the district office as a mid-level administrative field office of the DepEd. The law even mandates to
allow the district supervisor to have an office staff for program promotion in the district office. Apart from the
current administrative functions inherent in the district office, DECS Service Manual 2000 vested additional specific
functions to the district offices, to provide professional and instructional advice and support to the school heads and
teachers/facilitators of schools and learning centers in the district, as well as curricula supervision.

Petitioners posit that R.A. No. 9155 did not, in anyway, allow or authorize the reorganization of the entire DepEd; it
never reduced the position, rank, classification, and salary grade level of district supervisors, nor abolished the
district offices which are responsible for the administration and management of elementary schools within its
jurisdiction. It did not remove from the district supervisors the function of administrative supervision over schools
within their respective areas. In fact, petitioners insist, what the law did was to give the district supervisor additional
responsibility of providing professional and instructional advice and support to the school heads and
teachers/facilitators of schools and learning centers in the district or cluster thereof.

Petitioners point out that under Section 4.3, paragraph (b), Rule IV of the IRR, the schools division superintendent
was given the power to appoint the division supervisors and schools district supervisor and other employees subject
to civil service laws, rules, and regulations, and the policies and guidelines to be issued by the Secretary of
Education for the purpose. On the other hand, the school division superintendent shall have disciplinary authority
only over the non-teaching personnel under his jurisdiction. Such exercise of disciplinary authority by the schools
division superintendent over the non-teaching personnel shall be subject to civil service laws, rules, and regulations,
and procedures and guidelines to be issued by the Secretary of Education relative to this matter. The regional
director shall continue exercising disciplinary authority over the teaching personnel in so far as the latter are covered
by specific and exclusive disciplinary provisions under the Magna Carta for Public School Teachers (R.A. 4670).

Petitioners posit that this grant of disciplining authority to the regional director for teaching personnel who commit
violations of laws, rules, and regulations is definitely not provided for in R.A. No. 9155. The division superintendent
was given the power not only to hire and appoint the division supervisors, district supervisors, school heads, or
principals as well as employees in the division, both teaching and non-teaching positions. However, when it comes
to disciplining officers and teaching personnel who commit infractions or violations of law, rules, and regulations of
the DepEd, the exercise of such disciplining authority is lodged in the hands of the regional director. Petitioners
point out that the power to hire teachers is in the hands of the division superintendent; principles of administrative
rules and procedure provide that the authority to hire and appoint carries with it the authority to discipline and fire
the hired and appointed personnel particularly if the law is silent thereon. Since the division superintendent has the
authority to hire teaching personnel within its division, he/she should also take the responsibility of disciplining
erring teachers and employees. If the set-up of placing the power of hiring and power to discipline or fire an errant
personnel is separated or divided between two offices of the DepEd, the proliferation of "palakasan" or "bata-bata"
system will flourish, to the detriment of the public education system and public service.

Petitioners also point out that under Section 7(E)(11) of R.A. No. 9155, school heads are authorized to accept gifts,
donations, bequests, and grants for the purpose of upgrading teacher’s/learning facilitator’s competencies, improving
and expanding school facilities and providing instructional materials and equipment, which, in turn, shall be
reported to the appropriate district supervisors and division superintendents. However, under Section 6.2(11), Rule
VI of the IRR, on the authority, accountability, and responsibility of school heads, district supervisors were deleted
as one of the administrative officers to whom such reporting is to be made. Petitioners conclude that to the extent
that the division superintendents are not mandated to report donations and grants to district supervisors, the IRR is
void.

On their plea for mandamus, petitioners pray that the Court compel the DepEd and the DBM to upgrade their
present salary grade. They claim that the position of an ESP is already classified as SG 21, which is higher by two
grades than that of district supervisors, SG 19. Considering their higher position in the department’s pecking order,
vis-à-vis that of the ESPs, petitioners opine that to rectify the present grade-level distortion, their salary grade should
be upgraded to SG 24.22

For its part, the Office of the Solicitor General (OSG) avers that a perusal of Section 7(D) of R.A. No. 9155 shows
that the district supervisor has limited responsibilities, and that the power to exercise administrative supervision over
the ESPs is not covered by any of those responsibilities. The Education Secretary is the disciplining authority in the
DepEd, with the regional directors acting as the disciplining authority in their respective regions.

As to petitioners’ gripe that the IRR deleted district supervisors from among those school heads who should report
when "[a]ccepting donations, gifts, bequests, and grants for the purpose of upgrading teachers’/learning facilitators’
competencies, improving and expanding school facilities, and providing instructional materials and equipment," the
OSG avers that this reportorial function is "directory" and merely for "convenience."

Anent petitioners’ grievance on their alleged stagnant salary grade level, the OSG points out that the same is
"already provided for under FY 2003 GAA, [thus], petitioners’ complaint against the non-increase of their SG level
is already moot and academic." The OSG also emphasizes that the upgrading of the ESP’s salary grade over the
petitioners is not violative of petitioners’ right to equal protection of the law, since "district supervisors and ESPs are
not similarly situated."

In reply, petitioners contend that the upgrading of the salary grade level of district supervisors to SG 21 is an
admission by the DepEd and by the DBM of the validity of their demand to increase their salary grade to a
respectable SG 24.

The petition is partially granted.

It must be stressed that the power of administrative officials to promulgate rules in the implementation of a statute is
necessarily limited to what is provided for in the legislative enactment. 23 The implementing rules and regulations of
a law cannot extend the law or expand its coverage, as the power to amend or repeal a statute is vested in the
legislature.24 It bears stressing, however, that administrative bodies are allowed under their power of subordinate
legislation to implement the broad policies laid down in a statute by "filling in" the details. All that is required is that
the regulation be germane to the objectives and purposes of the law; that the regulation does not contradict but
conforms with the standards prescribed by law.25 Moreover, as a matter of policy, this Court accords great respect to
the decisions and/or actions of administrative authorities not only because of the doctrine of separation of powers
but also for their presumed knowledgeability and expertise in the enforcement of laws and regulations entrusted to
their jurisdiction.26 The rationale for this rule relates not only to the emergence of the multifarious needs of a
modern or modernizing society and the establishment of diverse administrative agencies for addressing and
satisfying those needs; it also relates to the accumulation of experience and growth of specialized capabilities by the
administrative agency charged with implementing a particular statute. 27

We have reviewed the IRR and find that Section 4.3 of Rule IV, and Sections 5.1 and 5.2 of Rule V are valid. The
provisions merely reiterate and implement the related provisions of R.A. No. 9155. Under the law, a division
superintendent has the authority and responsibility to hire, place, and evaluate all division supervisors and district
supervisors as well as all employees in the division, both teaching and non-teaching personnel, including school
heads.28 A school head is a person responsible for the administrative and instructional supervision of the schools or
cluster of schools.29 The division superintendent, on the other hand, supervises the operation of all public and private
elementary, secondary, and integrated schools and learning centers. 30

Administrative supervision means "overseeing or the power or authority of an officer to see that their subordinate
officers perform their duties. If the latter fails or neglects to fulfill them, the former may take such action or steps as
prescribed by law to make them perform their duties." 31

A plain reading of the law will show that the schools district supervisors have no administrative supervision over the
school heads; their responsibility is limited to those enumerated in Section 7(D) of R.A. No. 9155, to wit:
(1) Providing professional and instructional advice and support to the school heads and teachers/facilitators
of schools and learning centers in the district or cluster thereof;

(2) Curricula supervision; and

(3) Performing such other functions as may be assigned by proper authorities.

As gleaned from the Senate deliberations on Senate Bill No. 2191, the district supervisors were divested of any
administrative supervision over elementary and public high schools. The Senate resolved to vest the same in the
division superintendents, and the Lower House concurred. Senator Rene Cayetano proposed that the traditional
function of the school supervisors of exercising administrative supervision over the elementary and public high
schools be maintained. However, Senator Tessie Aquino-Oreta, the Chairperson of the Senate Committee on
Education and the Sponsor of the Bill, objected to such proposal:

The President:

Why do we not say AND SHALL NOT BE INCLUDED?

Senator Cayetano:

Yes, better yet, Mr. President. I thank the Chair for that amendment.

The President:

All right. Can we approve that? The sponsor accepts the amendment, I assume.

Senator Aquino-Oreta:

Yes, Mr. President.

The President:

Is there any objection from the floor? (Silence) There being none, the amendment is approved.

Senator Cayetano:

Thank you, Mr. President.

In line 17, it ends with the conjunction "and." I would like to propose an amendment by inserting a new paragraph
(b). This is, of course, the duties and responsibilities of schools district supervisors. It is to SUPERVISE SCHOOL
PRINCIPALS IN THE DISTRICT, because right now, this is exactly their job.

Again, the reality is, there are efforts to minimize, if not remove, the principal function of school supervisors, which
is to supervise school principals in the district. I just want it to be there to ensure that their primary functions remain
as such.

Therefore, what appears as paragraph (b) in line 18 will now be subparagraph (c).

The President:

What does the sponsor say?


Senator Aquino-Oreta:

Mr. President, may I just explain. There are two school supervisors. One is for the academic function and the other
is for the administrative function. As such, if these two supervisors will dictate to the principals, then our thrust in
reducing the level of bureaucracy might not be met. Also, the thrust of this governance bill really is to flesh out the
importance of the school as the heart of education here. In that heart, we have the teacher, the student, and the school
head.

What we are trying to do here is to bring to the forefront the school itself. In fact, right now, there is a move in the
DECS to do away with the school supervisor in charge of administrative and leave that function to the principal. If
the principal, the school head will be dictated upon by these two school supervisors, we might not be able to achieve
what we want to do here – putting to the forefront the school itself. Meaning, putting to the forefront the school
head, the teacher, and the student.

Senator Cayetano:

Mr. President, I would like to thank the sponsor for that enlightenment. That is precisely my point.

Not too long ago, I was a speaker before the school supervisors all over the land. One of the points that they
complained about was, in most cases, their job to supervise school principals is now being removed or have been
removed simply because – and I may be inaccurate here – the Japanese government – I know it is a foreign
government that funded a study of the organizational setup of the DECS – has recommended the abolition of school
supervisors.

This is the reason this representation would like to ensure that the traditional function of the school supervisors,
among which is to supervise school principals, remain as such. What is good for the Japanese education is not
necessarily good for the Philippines. This representation knows that this is precisely one of the complaints of the
school supervisors.

The lady sponsor admitted that, indeed, there is an effort to phase out the school supervisors. That is precisely my
point, Mr. President. I do not want the school supervisors to be phased out simply because a foreign government
which funded the study of our education has suggested it.

The President:

What does the sponsor say?

Senator Aquino-Oreta:

Mr. President, actually, it is not Japanese. It is an ADB proposal to the DECS. The DECS had a study made on how
to improve the management order of the DECS. That was one of the proposals. They gave three proposals. One of
them was to take out the school supervisors.

But precisely, Mr. President, we are not doing that, we are not taking them out. What we are saying is for the school
supervisor to focus on the curriculum because in the administration of the affairs of the school, we are saying that
the principal knows best how to administer or how to run the school better. And so, we are saying here that school
supervisors will be there contrary to the view of that ADB study. We will maintain them, but the focus of the school
supervisors will be on the curriculum of the schools.

Senator Cayetano:

Mr. President, again I thank the lady senator. But again let us look at who supervisors of schools are. Supervisors of
schools once upon a time were all school principals. They rose from the ranks, that is why they are fully aware of
the administrative as well as the instructional capability of the principals now who are under them. To remove their
right to supervise, – now it is the ADB, I am correct, the lady senator is correct because as I said I was not sure – to
remove this traditional function would really render the supervisors practically without anything to do. That is why
they are now being justified that henceforth there will be no principals that will be promoted as school supervisors
because when the school supervisors reach the age of retirement and retire, no principals shall be promoted to that
level. But these school supervisors now, Mr. President, were once upon a time in their professional lives principals,
and they know best how the schools should be run – administratively and instructionally. That is the reason for that,
Mr. President.

The President:

What does the sponsor say?

Senator Cayetano:

So, may I ask the sponsor to accept this, Mr. President.

Senator Aquino-Oreta:

Mr. President, what was the amendment?

Senator Cayetano:

To insert a new paragraph, paragraph (b) in line 18, which states: SUPERVISE SCHOOL PRINCIPALS IN THE
DISTRICT.

The President:

May I suggest, THE SUPERVISION OF SCHOOL PRINCIPALS IN THE DISTRICT, because –

Senator Cayetano:

Yes, Mr. President.

The President:

– the antecedent for that is, "The schools district supervisor shall be responsible for."

Senator Cayetano:

That is right, Mr. President. Supervision, yes.

The President:

What does the sponsor say?

Senator Aquino-Oreta:

Mr. President, may I have one minute?

SUSPENSION OF SESSION
Senator Tatad:

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

The President:

Is there any objection? (Silence) There being none, the session is suspended for one minute.

It was 5:33 p.m.

RESUMPTION OF SESSION

At 5:43 p.m., the session was resumed.

The President:

The session is resumed.

SUSPENSION OF CONSIDERATION OF S. NO. 2191

Senator Tatad:

Mr. President, we are still trying to find a way out of these conflicting points of view on the role of the supervisor.
To allow the parties to have a little more time to work on this, I move that we suspend consideration of Senate Bill
No. 2191. (Underscoring supplied)32

When the session resumed, Senator Cayetano no longer pursued his proposed amendment, and moved instead that
the same be amended to read "Curricula Supervision." The Senate approved the proposal of the Senator:

The President:

The session is resumed. Senator Cayetano is recognized.

CAYETANO AMENDMENT

Senator Cayetano:

Thank you, Mr. President.

With the permission of the lady senator, after consulting her and the Majority Leader, I would like to propose an
amendment by rewording the original amendment I was proposing last night. The reworded proposed amendment
would be like this: CURRICULA SUPERVISION.

The President:

That would be on what page?

Senator Cayetano:

That would be on page 10, line 17, as a new paragraph (b).


The President:

And how will it read?

Senator Cayetano:

CURRICULA SUPERVISION.

The President:

Just that?

Senator Cayetano:

Just that, Mr. President.

Senator Tatad:

Put a semicolon (;).

Senator Cayetano:

And because of that, line 18 which is paragraph (b), should now be paragraph (c).

The President:

What does the sponsor say?

Senator Aquino-Oreta:

The amendment is accepted, Mr. President. (Underscoring supplied)33

Thus, under R.A. No. 9155, administrative supervision over school heads is not one of those responsibilities
conferred on district supervisors.

It is a settled rule of statutory construction that the express mention of one person, thing, act, or consequence
excludes all others. This rule is expressed in the familiar maxim expressio unius est exclusio alterius. Where a
statute, by its terms, is expressly limited to certain matters, it may not, by interpretation or construction, be extended
to others. The rule proceeds from the premise that the legislature would not have made specified enumerations in a
statute had the intention been not to restrict its meaning and to confine its terms to those expressly mentioned. 34

It is not surprising that Senator Aquino-Oreta maintained her position that district supervisors should not have
administrative control or even supervision over ESPs and SSPs. As early as 1990, the DECS had adopted the policy
that, effective January 1, 1991, the positions of district supervisors and division supervisors would be gradually
phased out by not filling-up these positions as they become vacant.35 On September 17, 1991, then DECS Secretary
Isidro Cariño issued DECS Order No. 110, Series of 1991, declaring that, to foster better considerations and
articulation of progress in the elementary level, all elementary school principals shall report directly to the school
division superintendents. In his Order dated June 22, 1994, then DECS Secretary Armand V. Fabella declared that
DECS Order No. 110 shall remain in effect, with the recommendation that, in order to facilitate the phase-out of
district supervisor positions, incumbent district supervisors were encouraged to transfer to vacant division supervisor
positions, provided they meet the qualification standards for such positions. 36 For his part, in his DECS Order No.
22, Series of 1996, DECS Secretary Ricardo T. Gloria restored the district supervisor positions but only on a
selective basis and subject to the following guidelines:

a) Schools superintendents, with the concurrence/approval of their regional directors, may have the option
to restore the position in selected districts after a careful evaluation of need. For this purpose, the number of
schools and their geographical location and distance for effective monitoring, the availability of regular
transportation, urban-rural setting, etc., should be considered in the decision.

b) The role of the district supervisor as an instructional leader and resource for teachers, rather than merely
as an administrative supervisor, should be emphasized in their functions and duties.

c) In the event of restoration and appointment of the position in a particular district, the school
superintendent shall ensure that the system of field supervision previous to the issuance of DECS Orders
No. 110, s. 1991 and No. 41, s. 1994 shall, likewise, be restored. Correspondingly, the designation of
coordinating principals in affected districts shall be withdrawn.

d) Should a division office opt not to restore some or all district supervisor positions, the funds for such
positions may be used to create new positions or upgrade existing positions, subject to the approval of the
Department of Budget and Management.

e) Considering that a number of vacated district supervisor positions in some divisions may have been
converted to other positions and/or otherwise phased out since 1991, appointments of district supervisors
shall be issued by regional directors only upon verification from the Department of Budget and
Management that the said position may be filled.

It is enjoined that regional directors and schools superintendents shall exert special effort to ensure that the
implementation of this Order shall be harmonious and conducive to field supervision. 37

Under DECS Order No. 36, Series of 1998 issued by DECS Secretary Erlinda C. Pefianco, the positions of district
supervisors were restored to their original status as a supervisory level in the DECS administrative hierarchy subject
to the following guidelines:

1.1 The positions of Education and District Supervisors are hereby restored to their original status as a supervisory
level in the DECS administrative hierarchy, subject to the following guidelines:

1.1.1 The functions of a district supervisor as an instructional leader and resource person for teachers
should be emphasized.

In the event of restoration and appointment of public schools district supervisor, the designation of the coordinating
principal shall be withdrawn.

Appointment of district supervisors shall be issued by regional directors only upon verification from the Department
of Budget and Management that the positions still exist since a number of vacated district supervisor positions in
some divisions may have been converted to other positions and/or otherwise phased out since 1991. 38

However, as already stated, the Senate resolved to maintain the positions of district supervisors but limited their
responsibilities only to those enumerated in Section 7(D) of R.A. No. 9155 to conform to the basic thrust and
objectives of the law. Far from strengthening the office of the district supervisors as a mid-head field office of the
DepEd, the law limited the authority and responsibility attached to such position.

While it is true that the district supervisor is given a support staff for program promotion, it cannot thereby be
implied that he/she likewise has administrative supervision over ESPs and SSPs. Such a construction has no basis in
law and in fact. Indeed, such a construction of the statute defeats the very purpose of the law.
It is a basic precept that the intent of the legislature is the controlling factor in the interpretation of the statute. The
particular words, clauses, and phrases should not be studied as detached and isolated expression, but the whole and
every part of the statute must be considered in fixing the meaning of any of its parts and in order to produce a
harmonious whole.39

Besides, Congress enumerated the duties and responsibilities of a district supervisor. Congress would not have made
specific enumerations in a statute if it had the intention not to restrict or limit its meaning and confine its terms only
to those expressly enumerated. Courts may not, in the guise of interpretation, enlarge the scope of a statute and
include situations not provided nor intended by Congress.40

The submission of the OSG, that the schools district supervisors have the administrative supervision over school
heads, is more in accord with the law, to wit:

Section 7 of RA 9155, on School District Level, pertinently provides that "a school district shall have a school
district supervisor and an office staff for program promotion," and that the schools district supervisor shall be
responsible for: (1) "(p)roviding professional and instructional advice and support to the school heads and
teachers/facilitators of schools and learning centers in the district [or] cluster thereof;" (2) "(c)urricula supervision;"
and, (3) "(p)erforming such other functions as may be assigned by the proper authorities."

A perusal of Section 7 shows that the District Supervisor has limited responsibilities, and that the power to exercise
administrative supervision over the ESPs is not covered by responsibility nos. 1 and 2. Neither is that power covered
by the directive that the District Supervisor shall have an office staff for program promotion. The only logical
conclusion, therefore, that can be derived from the aforesaid enumeration of responsibilities is that the District
Supervisor may only exercise administrative supervision over ESPs when such function is assigned by proper
authorities. And, since the DepEd Secretary specifically declared through the IRR of RA 9155, that the District
Supervisor shall not exercise administrative supervision over the ESPs, unless otherwise authorized, petitioners
cannot complain against the said declaration. On this score, it is settled that the intent of the statute is the law
(Philippine National Bank v. Office of the President, 252 SCRA 5 [1996]). In the absence of legislative intent to the
contrary, words and phrases used in a statute should be given their plain, ordinary and common usage meaning
(Mustang Lumber, Inc. v. Court of Appeals, 257 SCRA 430 [1996]).

Needless to say, Section 7, on Division Level, further provides that the School Division Superintendent shall have
authority, accountability and responsibility for, among others, "(s)upervising the operation of all public and private
elementary, secondary and integrated schools, and learning centers." To claim, therefore, that the District Supervisor
has administrative supervision over the ESPs would also violate the above-quoted provision.41

The Court likewise declares that the last paragraph of Section 4.3 of the IRR, stating that the regional director shall
continue exercising disciplinary authority over the teaching personnel insofar as the latter are covered by specific
and exclusive disciplinary provisions under R.A. No. 4670 ("Magna Carta for Public School Teachers") does not
contravene R.A. No. 9155. Indeed, the IRR merely reiterates the DECS Rules of Procedure, DECS Order No. 33,
issued on March 30, 1999 by the DepEd Secretary, and R.A. No. 4670 which was approved on June 18, 1966, and
pursuant to Section 7, Chapter II, Book IV of the 1987 Administrative Code, which provides that the DepEd
Secretary is empowered to

a. Promulgate rules and regulations necessary to carry out department objectives, policies, functions, plans,
programs, and projects; and

b. Promulgate administrative issuances necessary for the efficient administration of the offices under the
Secretary and for execution of the laws relative thereto.

Additionally, the IRR was issued by the DepEd Secretary pursuant to Section 7(A)(1) of R.A. No. 9155, which
mandates that the Secretary formulate national educational policies and enhance the employment status, professional
competence, welfare, and working conditions of all the DepEd personnel.42
We agree that R.A. No. 9155 does not provide who has disciplinary authority over the teaching personnel of the
DepEd. However, under Section 3, Chapter III of DECS Order No. 33, Series of 1999, otherwise known as the 1999
DECS Rules of Procedure, the disciplining authority in the DECS is the DepEd Secretary, with the regional directors
acting as such in their respective regions except those appointed by the President.43

The officers and employees referred to in the Rules of Procedure include teachers who, under R.A. No. 4670, shall
mean:

x x x all persons engaged in classroom teaching, in any level of instruction, on full-time basis, including guidance
counselors, school librarians, industrial arts, or vocational instructors, and all other persons performing supervisory
and/or administrative functions in all schools, colleges and universities operated by the Government or its political
subdivisions; but shall not include school nurses, school physicians, school dentists, and other school employees.

A division superintendent of schools is not a disciplining authority over teachers, whether under R.A. No. 4670 or
under the DECS Rules of Procedure. In fact, under Section 2, Chapter VII of such Rules of Procedure, a division
superintendent is a chairperson of the investigating committee over formal complaints filed against such teachers:

a) When the respondent is an elementary or secondary school teacher, head teacher, principal, district
supervisor/chair/coordinator or Education Supervisor I –

(1) The schools division superintendent or his or her duly authorized representative, as chairperson;

(2) The duly authorized representative of the school, district, or division teacher’s organization, as member;
and

(3) The division supervisor for elementary or secondary education where the respondent belongs, as
member.

The foregoing rule is based on Section 9 of R.A. No. 4670 which reads:

Sec. 9. Administrative Charges. Administrative charges against a teacher shall be heard initially by a committee
composed of the corresponding School Superintendent of the Division or a duly authorized representative who
should, at least, have the rank of a division supervisor, where the teacher belongs, as chairman, a representative of
the local or, in its absence, any existing provincial or national teacher’s organization and a supervisor of the
Division, the last two to be designated by the Director of Public Schools. The committee shall submit its findings
and recommendations to the Director of Public Schools within thirty days from the termination of the hearings:
Provided, however, That where the school superintendent is the complainant or an interested party, all the members
of the committee shall be appointed by the Secretary of Education.

Anent the issue on reporting of acceptance of donations, Section 7(E)(11) of R.A. No. 9155 provides:

(11) Accepting donations, gifts, bequests, and grants for the purpose of upgrading teachers’/learning facilitators’
competencies, improving and expanding school facilities, and providing instructional materials and equipment. Such
donations or grants must be reported to the appropriate district supervisors and division superintendents. (emphasis
supplied)

However, Section 6.2(11), Rule VI of the IRR provides that:

(11) Accepting donations, gifts, bequests, and grants in accordance with existing laws and policy of the Department
for the purpose of upgrading teachers’/learning facilitators’ competencies, improving and expanding school
facilities, and providing instructional materials and equipment. Such donations or grants must be reported to the
division superintendents. (emphasis supplied)
We agree with petitioners’ contention that, under the law, donations and grants must be reported to the appropriate
district supervisors and not only to the division superintendents. The use in the law of the word "must" is an
expression of the mandatory nature of the reporting of donations and grants to district supervisors. The reason for
the provision is that such grants and donations which are intended to upgrade teachings/learning facilitators’
competencies, improve and expand school facilities, and provide instructional materials and equipment will assist
the school district supervisors in the performance of their duties and responsibilities under Section 7(D) of R.A. No.
9155, and submit appropriate recommendations to the proper administrative officers.

On petitioner’s plaint of the failure of respondents to upgrade their salary grade level to at most SG 21, and for the
issuance of the writ of mandamus mandating respondents to increase their salary grade from SG 19 to 24, the same
is premature.

There is no showing in the petition that, before filing their petition, petitioners sought an adjustment of level of their
salary grade from SG 19 to SG 21 before respondents or the Civil Service Commission. Section 17 of Presidential
Decree No. 985, as amended by Section 14 of R.A. No. 6758, otherwise known as the Salary Standardization Law,
provides:

Sec. 17. Powers and Functions. – The Budget Commission (now Department of Budget and Management),
principally through the OCPC (now CPCB, Compensation and Position Classification Board) shall, in addition to
those provided under other Sections of this Decree, have the following powers and functions:

a. Administer the compensation and position classification system established herein and revise it as necessary;

xxxx

f. Certify classification actions and changes in class or grade of positions whenever the facts warrant, such
certification to be binding on administrative, certifying, payroll, disbursing, accounting and auditing officers of the
national government and government-owned or controlled corporations and financial institutions.

Sections 10 and 11 of R.A. No. 9155 provide:

SEC. 10. The Secretary of Education and the Secretary of Budget and Management shall, within ninety (90) days
from the approval of this Act, jointly promulgate the guidelines on the allocation, distribution, and utilization of
resources provided by the national government for the field offices, taking into consideration the uniqueness of the
working conditions of the teaching service.

The Secretary of the Department of Education shall ensure that resources appropriated for the field offices are
adequate and that resources for school personnel, school desks, and textbooks and other instructional materials
intended are allocated directly and released immediately by the Department of Budget and Management to said
offices.

SEC. 11. The Secretary of the Department of Education, subject to civil service laws and regulations, shall issue
appropriate personnel policy rules and regulations that will best meet the requirements of the teaching profession
taking into consideration the uniqueness of the working conditions of the teaching service.

And insofar as the salary system for teaching positions is concerned, Section 14 provides:

SEC. 14. The Salary System for Teaching Position. – The salary grade of a teacher shall be determined in
accordance with the following:

a. The Teachers’ Preparation Pay Schedule shall be prepared by the Commission in consultation with the
Department of Education and Culture. Under this system, the teacher's academic or educational
preparation, teaching experience in both private and public schools, and extra-curricular activities for
professional growth, shall be considered in pursuance of the principle of 'equal pay for equal training and
experience.'

xxxx

d. The Budget Commission, in coordination and consultation with the Department of Education and
Culture and the Civil Service Commission may, when future needs require, modify, change or otherwise
improve on the salary system herein established for the teaching and closely related occupations, any
change that may be made as provided herein shall become part of the implementing rules of this Decree to
be issued by the Budget Commission upon prior approval by the President.

Moreover, the issue of whether or not respondents should be compelled to adjust upwards the salary grade of
petitioners to SG 21 has become moot and academic, because, on November 3, 2003, the DepEd and the DBM
issued Joint Circular No. 1, Series of 2003 containing the guidelines in the implementation of the Salary Upgrading
for District and Education Supervisors, to wit:

4.0 GUIDELINES

4.1 To maintain the previous salary grade relationships under RA No. 6758 among the PSDS and ES I, on
the one hand, and Elementary School Principal (ESP) IV and Secondary School Principal (SSP) II, on the
other hand, and to preserve the consistency in the salary grade relationships of said positions, the following
are hereby authorized:

4.1.1 Upgrading of the PSDS and ES I positions from SG-19 to SG-20 in July 2003 and to SG-21
in July 2004;

4.1.2 Upgrading of the ES II positions by two (2) salary grades from SG-20 to SG-21 in July 2003
and to SG-22 in July 2004;

4.1.3 A one-step salary adjustment to incumbents of ES III positions starting July 2003 and
another one-step salary adjustment starting July 2004;

4.1.4 A one-step salary adjustment to incumbents of CES positions starting July 2003 and another
one-step salary adjustment starting July 2004.

4.2 Attached herewith is Annex A containing the summary of the guidelines for the salary upgrading of
positions authorized herein.

5.0 SALARY RULES

5.1 For purposes of the salary upgrading herein authorized, the basic salary of the employee concerned
shall be adjusted as follows:

5.1.1 Effective July 1, 2003 – at the same salary step of his assigned salary grade as of June 30,
2003 (Illustrative Example A) adopting the Salary Schedule prescribed under National Budget
Circular (NBC) No. 474 (Annex B);

5.1.2 Effective July 1, 2004 – at the same salary step of his assigned salary grade as of June 30,
2004 (Illustrative Example A) adopting the Salary Schedule prescribed under National Budget
Circular (NBC) No. 474 (Annex B).

5.2 The transition allowance as defined in 3.2 being received by the PSDS and ES, if any, shall be
considered as advance entitlement of the salary increase herein authorized. (Illustrative Examples B and C)
5.3 No step adjustment shall be granted to incumbents of positions whose salary already falls at or exceeds
the maximum step (eighth step) of the salary grade allocation of their positions. (Illustrative Example D)

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

6.0 FUNDING SOURCE

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

7.0 POST-AUDIT

Any salary adjustment paid under this Circular shall be subject to post-audit by the DBM – ROs concerned. Any
payments thereof which are not in accordance herewith shall be adjusted accordingly.

8.0 CONTRIBUTIONS

The salary adjustments authorized herein are subject to the mandatory requirements for life and retirement
premiums, and health insurance premiums.

9.0 SAVING CLAUSE

Conflicts arising from the implementation of the provisions of this Circular shall be resolved by the Department of
Education, upon prior consultation with the Department of Budget and Management.

10.0 EFFECTIVITY

This Circular Letter shall take effect on July 1, 2003.

IN VIEW OF ALL THE FOREGOING, the petition for prohibition is PARTIALLY GRANTED. Joint Circular No.
1, Series of 2003 is declared valid, except Section 6.2(11), Rule VI thereof which provides that "donations or grants
shall be reported only to the division superintendents." Such donations or grants must also be reported to the
appropriate school district supervisors, as mandated by Republic Act No. 9155. Petitioners’ prayer for the issuance
of a writ of mandamus is DENIED for lack of merit. No costs.

SO ORDERED.
FIRST DIVISION

G.R. No. 131082 June 19, 2000

ROMULO, MABANTA, BUENAVENTURA, SAYOC & DE LOS ANGELES, petitioner,


vs.
HOME DEVELOPMENT MUTUAL FUND, respondent.

DAVIDE, JR., C.J.:

Once again, this Court is confronted with the issue of the validity of the Amendments to the Rules and Regulations
Implementing Republic Act No. 7742, which require the existence of a plan providing for both provident/retirement
and housing benefits for exemption from the Pag-IBIG Fund coverage under Presidential Decree No. 1752, as
amended.

Pursuant to Section 19 1 of P.D. No. 1752, as amended by R.A. No. 7742, petitioner Romulo, Mabanta,
Buenaventura, Sayoc and De Los Angeles (hereafter PETITIONER), a law firm, was exempted for the period 1
January to 31 December 1995 from the Pag-IBIG Fund coverage by respondent Home Development Mutual Fund
(hereafter HDMF) because of a superior retirement plan. 2

On 1 September 1995, the HDMF Board of Trustees, pursuant to Section 5 of Republic Act No. 7742, issued Board
Resolution No. 1011, Series of 1995, amending and modifying the Rules and Regulations Implementing R.A. No.
7742. As amended, Section 1 of Rule VII provides that for a company to be entitled to a waiver or suspension of
Fund coverage, 3 it must have a plan providing for both provident/retirement and housing benefits superior to those
provided under the Pag-IBIG Fund.

On 16 November 1995, PETITIONER filed with the respondent an application for Waiver or Suspension of Fund
Coverage because of its superior retirement plan. 4 In support of said application, PETITIONER submitted to the
HDMF a letter explaining that the 1995 Amendments to the Rules are invalid. 5

In a letter dated 18 March 1996, the President and Chief Executive Officer of HDMF disapproved PETITIONER's
application on the ground that the requirement that there should be both a provident retirement fund and a housing
plan is clear in the use of the phrase "and/or," and that the Rules Implementing R.A. No. 7742 did not amend nor
repeal Section 19 of P.D. No. 1752 but merely implement the law. 6

PETITIONER's appeal 7 with the HDMF Board of Trustees was denied for having been rendered moot and academic
by Board Resolution No. 1208, Series of 1996, removing the availment of waiver of the mandatory coverage of the
Pag-IBIG Fund, except for distressed employers. 8

On 31 March 1997, PETITIONER filed a petition for review 9 before the Court of Appeals. On motion by HDMF,
the Court of Appeals dismissed 10 the petition on the ground that the coverage of employers and employees under the
Home Development Mutual Fund is mandatory in character as clearly worded in Section 4 of P.D. No. 1752, as
amended by R.A. No. 7742. There is no allegation that petitioner is a distressed employer to warrant its exemption
from the Fund coverage. As to the amendments to the Rules and Regulations Implementing R.A. No. 7742, the same
are valid. Under P.D. No. 1752 and R.A. No. 7742 the Board of Trustees of the HDMF is authorized to promulgate
rules and regulations, as well as amendments thereto, concerning the extension, waiver or suspension of coverage
under the Pag-IBIG Fund. And the publication requirement was amply met, since the questioned amendments were
published in the 21 October 1995 issue of the Philippine Star, which is a newspaper of general circulation.

PETITIONER's motion for reconsideration 11 was denied. 12 Hence, on 6 November 1997, PETITIONER filed a
petition before this Court assailing the 1995 and the 1996 Amendments to the Rules and Regulations Implementing
Republic Act No. 7742 for being contrary to law. In support thereof, PETITIONER contends that the subject 1995
Amendments issued by HDMF are inconsistent with the enabling law, P.D. No. 1752, as amended by R.A. No.
7742, which merely requires as a pre-condition for exemption from coverage the existence of either a superior
provident/retirement plan or a superior housing plan, and not the concurrence of both plans. Hence, considering that
PETITIONER has a provident plan superior to that offered by the HDMF, it is entitled to exemption from the
coverage in accordance with Section 19 of P.D. No. 1752. The 1996 Amendment are also void insofar as they
abolished the exemption granted by Section 19 of P.D. 1752, as amended. The repeal of such exemption involves
the exercise of legislative power, which cannot be delegated to HMDF.

PETITIONER also cites Section 9 (1), Chapter 2, Book VII of the Administrative Code of 1987, which provides:

Sec. 9. Public Participation — (1) If not otherwise required by law, an agency shall, as far as practicable,
publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their
views prior to the adoption of any rule.

Since the Amendments to the Rules and Regulations Implementing Republic Act No. 7742 involve an imposition of
an additional burden, a public hearing should have first been conducted to give chance to the employers, like
PETITIONER, to be heard before the HDMF adopted the said Amendments. Absent such public hearing, the
amendments should be voided.

Finally, PETITIONER contends that HDMF did not comply with Section 3, Chapter 2, Book VII of the
Administrative Code of 1987, which provides that "[e]very agency shall file with the University of the Philippines
Law Center three (3) certified copies of every rule adopted by it."

On the other hand, the HDMF contends that in promulgating the amendments to the rules and regulations which
require the existence of a plan providing for both provident and housing benefits for exemption from the Fund
Coverage, the respondent Board was merely exercising its rule-making power under Section 13 of P.D. No. 1752. It
had the option to use "and" only instead of "or" in the rules on waiver in order to effectively implement the Pag-
IBIG Fund Law. By choosing "and," the Board has clarified the confusion brought about by the use of "and/or" in
Section 19 of P.D. No. 1752, as amended.

As to the public hearing, HDMF maintains that as can be clearly deduced from Section 9(1), Chapter 2, Book VII of
the Revised Administrative Code of 1987, public hearing is required only when the law so provides, and if not, only
if the same is practicable. It follows that public hearing is only optional or discretionary on the part of the agency
concerned, except when the same is required by law. P.D. No. 1752 does not require that pubic hearing be first
conducted before the rules and regulations implementing it would become valid and effective. What it requires is the
publication of said rules and regulations at least once in a newspaper of general circulation. Having published said
1995 and 1996 Amendments through the Philippine Star on 21 October 1995 1 and 15 November
1996, 14 respectively, HDMF has complied with the publication requirement.

Finally, HDMF claims that as early as 18 October 1996, it had already filed certified true copies of the Amendments
to the Rules and Regulations with the University of the Philippines Law Center. This fact is evidenced by certified
true copies of the Certification from the Office of the National Administrative Register of the U.P. Law Center. 15

We find for the PETITIONER.

The issue of the validity of the 1995 Amendments to the Rules and Regulations Implementing R.A. No. 7742,
specifically Section I, Rule VII on Waiver and Suspension, has been squarely resolved in the relatively recent case
of China Banking Corp. v. The Members of the Board of Trustees of the HDMF. 16 We held in that case that Section
1 of Rule VII of the Amendments to the Rules and Regulations Implementing R.A. No. 7742, and HDMF Circular
No. 124-B prescribing the Revised Guidelines and Procedure for Filing Application for Waiver or Suspension of
Fund Coverage under P.D. No. 1752, as amended by R.A. No. 7742, are null and void insofar as they require that an
employer should have both a provident/retirement plan and a housing plan superior to the benefits offered by the
Fund in order to qualify for waiver or suspension of the Fund coverage. In arriving at said conclusion, we ruled:

The controversy lies in the legal signification of the words "and/or."


In the instant case, the legal meaning of the words "and/or" should be taken in its ordinary
signification, i.e., "either and or; e.g. butter and/or eggs means butter and eggs or butter or eggs.

The term "and/or" means that the effect shall be given to both the conjunctive "and" and the
disjunctive "or"; or that one word or the other may be taken accordingly as one or the other will
best effectuate the purpose intended by the legislature as gathered from the whole statute. The
term is used to avoid a construction which by the use of the disjunctive "or" alone will exclude the
combination of several of the alternatives or by the use of the conjunctive "and" will exclude the
efficacy of any one of the alternatives standing alone.1avvphi1

It is accordingly ordinarily held that the intention of the legislature in using the term "and/or" is that the
word "and" and the word "or" are to be used interchangeably.

It . . . seems to us clear from the language of the enabling law that Section 19 of P.D. No. 1752 intended
that an employer with a provident plan or an employee housing plan superior to that of the fund may obtain
exemption from coverage. If the law had intended that the employee [sic] should have both a superior
provident plan and a housing plan in order to qualify for exemption, it would have used the words "and"
instead of "and/or." Notably, paragraph (a) of Section 19 requires for annual certification of waiver or
suspension, that the features of the plan or plans are superior to the fund or continue to be so. The law
obviously contemplates that the existence of either plan is considered as sufficient basis for the grant of an
exemption; needless to state, the concurrence of both plans is more than sufficient. To require the existence
of both plans would radically impose a more stringent condition for waiver which was not clearly
envisioned by the basic law. By removing the disjunctive word "or" in the implementing rules the
respondent Board has exceeded its authority.

It is without doubt that the HDMF Board has rule-making power as provided in Section 51 17 of R.A. No. 7742 and
Section 13 18 of P.D. No. 1752. However, it is well-settled that rules and regulations, which are the product of a
delegated power to create new and additional legal provisions that have the effect of law, should be within the scope
of the statutory authority granted by the legislature to the administrative agency. 19 It is required that the regulation
be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the
standards prescribed by law. 20

In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the 1995
Amendments to the Rules and Regulations Implementing R.A. No. 7742 that employers should have both
provident/retirement and housing benefits for all its employees in order to qualify for exemption from the Fund, it
effectively amended Section 19 of P.D. No. 1752. And when the Board subsequently abolished that exemption
through the 1996 Amendments, it repealed Section 19 of P.D. No. 1752. Such amendment and subsequent repeal of
Section 19 are both invalid, as they are not within the delegated power of the Board. The HDMF cannot, in the
exercise of its rule-making power, issue a regulation not consistent with the law it seeks to apply. Indeed,
administrative issuances must not override, supplant or modify the law, but must remain consistent with the law they
intend to carry out. 21 Only Congress can repeal or amend the law.

While it may be conceded that the requirement of having both plans to qualify for an exemption, as well as the
abolition of the exemption, would enhance the interest of the working group and further strengthen the Home
Development Mutual Fund in its pursuit of promoting public welfare through ample social services as mandated by
the Constitution, we are of the opinion that the basic law should prevail. A department zeal may not be permitted to
outrun the authority conferred by the statute. 22

Considering the foregoing conclusions, it is unnecessary to dwell on the other issues raised. WHEREFORE, the
petition is GRANTED. The assailed decision of 31 July 1997 of the Court of Appeals in CA-G.R. No. SP-43668 and
its Resolution of 15 October 1997 are hereby REVERSED and SET ASIDE. The disapproval by the Home
Development Mutual Fund of the application of the petitioner for waiver or suspension ofFund coverage is SET
ASIDE, and the Home Development Mutual Fund is hereby directed to refund to petitioner all sums of money it
collected from the latter. SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 110526 February 10, 1998

ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner,


vs.
PHILIPPINE COCONUT AUTHORITY, respondent.

MENDOZA, J.:

At issue in this case is the validity of a resolution, dated March 24, 1993, of the Philippine Coconut Authority in
which it declares that it will no longer require those wishing to engage in coconut processing to apply to it for a
license or permit as a condition for engaging in such business.

Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as APCD) brought this suit
for certiorari and mandamus against respondent Philippine Coconut Authority (PCA) to invalidate the latter's Board
Resolution No. 018-93 and the certificates of registration issued under it on the ground that the resolution in
question is beyond the power of the PCA to adopt, and to compel said administrative agency to comply instead with
the mandatory provisions of statutes regulating the desiccated coconut industry, in particular, and the coconut
industry, in general.

As disclosed by the parties' pleadings, the facts are as follows:

On November 5, 1992, seven desiccated coconut processing companies belonging to the APCD brought suit in the
Regional Trial Court, National Capital Judicial Region in Makati, Metro Manila, to enjoin the PCA from issuing
permits to certain applicants for the establishment of new desiccated coconut processing plants. Petitioner alleged
that the issuance of licenses to the applicants would violate PCA's Administrative Order No. 02, series of 1991, as
the applicants were seeking permits to operate in areas considered "congested" under the administrative order. 1

On November 6, 1992, the trial court issued a temporary restraining order and, on November 25, 1992, a writ of
preliminary injunction, enjoining the PCA from processing and issuing licenses to Primex Products, Inc., Coco
Manila, Superstar (Candelaria) and Superstar (Davao) upon the posting of a bond in the amount of P100,000.00. 2

Subsequently and while the case was pending in the Regional Trial Court, the Governing Board of the PCA issued
on March 24, 1993 Resolution No. 018-93, providing for the withdrawal of the Philippine Coconut Authority from
all regulation of the coconut product processing industry. While it continues the registration of coconut product
processors, the registration would be limited to the "monitoring" of their volumes of production and administration
of quality standards. The full text of the resolution reads:

RESOLUTION NO. 018-93


POLICY DECLARATION DEREGULATING
THE ESTABLISHMENT OF NEW COCONUT
PROCESSING PLANTS
WHEREAS, it is the policy of the State to promote free enterprise unhampered by protective regulations
and unnecessary bureaucratic red tapes;

WHEREAS, the deregulation of certain sectors of the coconut industry, such as marketing of coconut oils
pursuant to Presidential Decree No. 1960, the lifting of export and commodity clearances under Executive
Order No. 1016, and relaxation of regulated capacity for the desiccated coconut sector pursuant to
Presidential Memorandum of February 11, 1988, has become a centerpiece of the present dispensation;

WHEREAS, the issuance of permits or licenses prior to business operation is a form of regulation which is
not provided in the charter of nor included among the powers of the PCA;

WHEREAS, the Governing Board of PCA has determined to follow and further support the deregulation
policy and effort of the government to promote free enterprise;

NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no


longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut product
processor/factory, coconut fiber plant or any similar coconut processing plant to apply with PCA and the
latter shall no longer issue any form of license or permit as condition prior to establishment or operation of
such mills or plants;

RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned
coconut product processors for the purpose of monitoring their volumes of production, administration of
quality standards with the corresponding service fees/charges.

ADOPTED this 24th day of March 1993, at Quezon City. 3

The PCA then proceeded to issue "certificates of registration" to those wishing to operate desiccated coconut
processing plants, prompting petitioner to appeal to the Office of the President of the Philippines on April 26, 1993
not to approve the resolution in question. Despite follow-up letters sent on May 25 and June 2, 1993, petitioner
received no reply from the Office of the President. The "certificates of registration" issued in the meantime by the
PCA has enabled a number of new coconut mills to operate. Hence this petition.

Petitioner alleges:

RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR BEING AN
UNDUE EXERCISE OF LEGISLATIVE POWER BY AN ADMINISTRATIVE BODY.

II

ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS WITHOUT ANY
BASIS, ARBITRARY, UNREASONABLE AND THEREFORE IN VIOLATION OF SUBSTANTIVE
DUE PROCESS OF LAW.

III

IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED THE


PROCEDURAL DUE PROCESS REQUIREMENT OF CONSULTATION PROVIDED IN
PRESIDENTIAL DECREE NO. 1644, EXECUTIVE ORDER NO. 826 AND PCA ADMINISTRATIVE
ORDER NO. 002, SERIES OF 1991.
On the other hand, in addition to answering petitioner's arguments, respondent PCA alleges that this petition should
be denied on the ground that petitioner has a pending appeal before the Office of the President. Respondent accuses
petitioner of forum-shopping in filing this petition and of failing to exhaust available administrative remedies before
coming to this Court. Respondent anchors its argument on the general rule that one who brings an action under Rule
65 must show that one has no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.

I.

The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously
urged by the Solicitor General on behalf of respondent, has obviously no application here. The resolution in question
was issued by the PCA in the exercise of its rule-making or legislative power. However, only judicial review of
decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion
doctrine. The exhaustion doctrine stands as a bar to an action which is not yet complete 4 and it is clear, in the case
at bar, that after its promulgation the resolution of the PCA abandoning regulation of the desiccated coconut
industry became effective. To be sure, the PCA is under the direct supervision of the President of the
Philippines but there is nothing in P.D. No. 232, P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining the
powers and functions of the PCA which requires rules and regulations issued by it to be approved by the
President before they become effective.

In any event, although the APCD has appealed the resolution in question to the Office of the President,
considering the fact that two months after they had sent their first letter on April 26, 1993 they still had to
hear from the President's office, meanwhile respondent PCA was issuing certificates of registration
indiscriminately to new coconut millers, we hold that petitioner was justified in filing this case on June 25,
1993.5 Indeed, after writing the Office of the President on April 26, 1993 6 petitioner sent inquiries to that
office not once, but twice, on May 26, 1993 7 and on June 2, 1993,8 but petitioner did not receive any reply.

II.

We now turn to the merit of the present petition. The Philippine Coconut Authority was originally created by
P.D. 232 on June 30, 1973, to take over the powers and functions of the Coconut Coordinating Council, the
Philippine Coconut Administration and the Philippine Coconut Research Institute. On June 11, 1978, by P.D.
No. 1468, it was made "an independent public corporation . . . directly reporting to, and supervised by, the
President of the Philippines,"9 and charged with carrying out the State's policy "to promote the rapid
integrated development and growth of the coconut and other palm oil industry in all its aspects and to ensure
that the coconut farmers become direct participants in, and beneficiaries of, such development and
growth."10 through a regulatory scheme set up by law.11

Through this scheme, the government, on August 28, 1982, temporarily prohibited the opening of new
coconut processing plants and, four months later, phased out some of the existing ones in view of
overproduction in the coconut industry which resulted in cut-throat competition, underselling and smuggling
of poor quality products and ultimately in the decline of the export performance of coconut-based
commodities. The establishment of new plants could be authorized only upon determination by the PCA of
the existence of certain economic conditions and the approval of the President of the Philippines. Thus,
Executive Order No. 826, dated August 28, 1982, provided:

Sec. 1. Prohibition. — Except as herein provided, no government agency or instrumentality shall


hereafter authorize, approve or grant any permit or license for the establishment or operation of new
desiccated coconut processing plants, including the importation of machinery or equipment for the
purpose. In the event of a need to establish a new plant, or expand the capacity, relocate or upgrade
the efficiencies of any existing desiccated plant, the Philippine Coconut Authority may, upon proper
determination of such need and evaluation of the condition relating to:

a. the existing market demand;


b. the production capacity prevailing in the country or locality;

c. the level and flow of raw materials; and

d. other circumstances which may affect the growth or viability of the industry concerned,

authorize or grant the application for, the establishment or expansion of capacity, relocation or
upgrading of efficiencies of such desiccated coconut processing plant, subject to the approval of the
President.

On December 6, 1982, a phase-out of some of the existing plants was ordered by the government after finding
that "a mere freeze in the present capacity of existing plants will not afford a viable solution to the problem
considering that the total available limited market is not adequate to support all the existing processing
plants, making it imperative to reduce the number of existing processing plants." 12 Accordingly, it was
ordered:13

Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action as may be necessary
to reduce the number of existing desiccated coconut processing plants to a level which will insure the
survival of the remaining plants. The Authority is hereby directed to determine which of the existing
processing plants should be phased out and to enter into appropriate contracts with such plants for
the above purpose.

It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87, authorizing the establishment
and operation of additional DCN plants, in view of the increased demand for desiccated coconut products in
the world's markets, particularly in Germany, the Netherlands and Australia. Even then, the opening of new
plants was made subject to "such implementing guidelines to be set forth by the Authority" and "subject to
the final approval of the President."

The guidelines promulgated by the PCA, as embodied in Administrative Order No. 002, series of 1991, inter
alia authorized the opening of new plants in "non-congested areas only as declared by the PCA" and subject
to compliance by applicants with "all procedures and requirements for registration under Administrative
Order No. 003, series of 1981 and this Order." In addition, as the opening of new plants was premised on the
increased global demand for desiccated coconut products, the new entrants were required to submit sworn
statements of the names and addresses of prospective foreign buyers.

This form of "deregulation" was approved by President Aquino in her memorandum, dated February 11,
1988, to the PCA. Affirming the regulatory scheme, the President stated in her memorandum:

It appears that pursuant to Executive Order No. 826 providing measures for the protection of the
Desiccated Coconut Industry, the Philippine Coconut Authority evaluated the conditions relating to:
(a) the existing market demands; (b) the production capacity prevailing in the country or locality; (c)
the level and flow of raw materials; and (d) other circumstances which may affect the growth or
viability of the industry concerned and that the result of such evaluation favored the expansion of
production and market of desiccated coconut products.

In view hereof and the favorable recommendation of the Secretary of Agriculture, the deregulation
of the Desiccated Coconut Industry as recommended in Resolution No. 058-87 adopted by the PCA
Governing Board on October 28, 1987 (sic) is hereby approved.14

These measures — the restriction in 1982 on entry into the field, the reduction the same year of the number of
the existing coconut mills and then the lifting of the restrictions in 1987 — were adopted within the
framework of regulation as established by law "to promote the rapid integrated development and growth of
the coconut and other palm oil industry in all its aspects and to ensure that the coconut farmers become
direct participants in, and beneficiaries of, such development and growth." 15 Contrary to the assertion in the
dissent, the power given to the Philippine Coconut Authority — and before it to the Philippine Coconut
Administration — "to formulate and adopt a general program of development for the coconut and other
palm oils industry"16 is not a roving commission to adopt any program deemed necessary to promote the
development of the coconut and other palm oils industry, but one to be exercised in the context of this
regulatory structure.

In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the questioned resolution
which allows not only the indiscriminate opening of new coconut processing plants but the virtual
dismantling of the regulatory infrastructure whereby, forsaking controls theretofore placed in its keeping, the
PCA limits its function to the innocuous one of "monitoring" compliance by coconut millers with quality
standards and volumes of production. In effect, the PCA would simply be compiling statistical data on these
matters, but in case of violations of standards there would be nothing much it would do. The field would be
left without an umpire who would retire to the bleachers to become a mere spectator. As the PCA provided in
its Resolution No. 018-93:

NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA


shall no longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut product
processor/factory, coconut fiber plant or any similar coconut processing plant to apply with PCA and
the latter shall no longer issue any form of license or permit as condition prior to establishment or
operation of such mills or plants;

RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the
aforementioned coconut product processors for the purpose of monitoring their volumes of
production, administration of quality standards with the corresponding service fees/charges.

The issue is not whether the PCA has the power to adopt this resolution to carry out its mandate under the
law "to promote the accelerated growth and development of the coconut and other palm oil industry." 17 The
issue rather is whether it can renounce the power to regulate implicit in the law creating it for that is what the
resolution in question actually is.

Under Art. II, § 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the PCA is "To formulate and
adopt a general program of development for the coconut and other palm oil industry in all its aspects." By
limiting the purpose of registration to merely "monitoring volumes of production [and] administration of
quality standards" of coconut processing plants, the PCA in effect abdicates its role and leaves it almost
completely to market forces how the coconut industry will develop.

Art. II, § 3 of P.D. No. 1468 further requires the PCA:

(h) To regulate the marketing and the exportation of copra and its by-products by establishing
standards for domestic trade and export and, thereafter, to conduct an inspection of all copra and its
by-products proposed for export to determine if they conform to the standards established;

Instead of determining the qualifications of market players and preventing the entry into the field of those
who are unfit, the PCA now relies entirely on competition — with all its wastefulness and inefficiency — to do
the weeding out, in its naive belief in survival of the fittest. The result can very well be a repeat of 1982 when
free enterprise degenerated into a "free-for-all," resulting in cut-throat competition, underselling, the
production of inferior products and the like, which badly affected the foreign trade performance of the
coconut industry.

Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk other statutory provisions,
particularly those of P.D. No. 1644, to wit:
Sec. 1. The Philippine Coconut Authority shall have full power and authority to regulate the
marketing and export of copra, coconut oil and their by-products, in furtherance of the steps being
taken to rationalize the coconut oil milling industry.

Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine Coconut Authority may
initiate and implement such measures as may be necessary to attain the rationalization of the coconut
oil milling industry, including, but not limited to, the following measures:

(a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil and their by-
products;

(b) Prescription of quality standards;

(c) Establishment of maximum quantities for particular periods and particular markets;

(d) Inspection and survey of export shipments through an independent international superintendent
or surveyor.

In the exercise of its powers hereunder, the Philippine Coconut Authority shall consult with, and be
guided by, the recommendation of the coconut farmers, through corporations owned or controlled by
them through the Coconut Industry Investment Fund and the private corporation authorized to be
organized under Letter of Instructions No. 926.

and the Revised Coconut Code (P.D. No. 1468), Art. II, § 3, to wit:

(m) Except in respect of entities owned or controlled by the Government or by the coconut farmers
under Sections 9 and 10, Article III hereof, the Authority shall have full power and authority to
regulate the production, distribution and utilization of all subsidized coconut-based products, and to
require the submission of such reports or documents as may be deemed necessary by the Authority
to ascertain whether the levy payments and/or subsidy claims are due and correct and whether the
subsidized products are distributed among, and utilized by, the consumers authorized by the
Authority.

The dissent seems to be saying that in the same way that restrictions on entry into the field were imposed in
1982 and then relaxed in 1987, they can be totally lifted now without prejudice to reimposing them in the
future should it become necessary to do so. There is really no renunciation of the power to regulate, it is
claimed. Trimming down of PCA's function to registration is not an abdication of the power to regulate but is
regulation itself. But how can this be done when, under Resolution No. 018-93, the PCA no longer requires a
license as condition for the establishment or operation of a plant? If a number of processing firms go to areas
which are already congested, the PCA cannot stop them from doing so. If there is overproduction, the PCA
cannot order a cut back in their production. This is because the licensing system is the mechanism for
regulation. Without it the PCA will not be able to regulate coconut plants or mills.

In the first "whereas" clause of the questioned resolution as set out above, the PCA invokes a policy of free
enterprise that is "unhampered by protective regulations and unnecessary bureaucratic red tape" as
justification for abolishing the licensing system. There can be no quarrel with the elimination of "unnecessary
red tape." That is within the power of the PCA to do and indeed it should eliminate red tape. Its success in
doing so will be applauded. But free enterprise does not call for removal of "protective regulations."

Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic
principle.18 Although the present Constitution enshrines free enterprise as a policy, 19 it nonetheless reserves to
the government the power to intervene whenever necessary to promote the general welfare. This is clear from
the following provisions of Art. XII of the Constitution which, so far as pertinent, state:
Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and similar
collective organizations, shall have the right to own, establish, and operate economic
enterprises, subject to the duty of the State to promote distributive justice and to intervene when the
common good so demands.

Sec. 19. 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. (Emphasis added).

At all events, any change in policy must be made by the legislative department of the government. The
regulatory system has been set up by law. It is beyond the power of an administrative agency to dismantle it.
Indeed, petitioner charges the PCA of seeking to render moot a case filed by some of its members questioning
the grant of licenses to certain parties by adopting the resolution in question. It is alleged that members of
petitioner complained to the court that the PCA had authorized the establishment and operation of new
plants in areas which were already crowded, in violation of its Administrative Order No. 002, series of 1991.
In response, the Regional Trial Court issued a writ of preliminary injunction, enjoining the PCA from issuing
licenses to the private respondent in that case.

These allegations of petitioner have not been denied here. It would thus seem that instead of defending its
decision to allow new entrants into the field against petitioner's claim that the PCA decision violated the
guidelines in Administrative Order No. 002, series of 1991, the PCA adopted the resolution in question to
render the case moot. In so doing, the PCA abdicated its function of regulation and left the field to
untrammeled competition that is likely to resurrect the evils of cut-throat competition, underselling and
overproduction which in 1982 required the temporary closing of the field to new players in order to save the
industry.

The PCA cannot rely on the memorandum of then President Aquino for authority to adopt the resolution in
question. As already stated, what President Aquino approved in 1988 was the establishment and operation of
new DCN plants subject to the guidelines to be drawn by the PCA.20 In the first place, she could not have
intended to amend the several laws already mentioned, which set up the regulatory system, by a mere
memoranda to the PCA. In the second place, even if that had been her intention, her act would be without
effect considering that, when she issued the memorandum in question on February 11, 1988, she was no
longer vested with legislative authority.21

WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all certificates of registration
issued under it are hereby declared NULL and VOID for having been issued in excess of the power of the
Philippine Coconut Authority to adopt or issue.

SO ORDERED.