QUASI-LEGISLATIVE POWER (RULE MAKING POWER)

Legislative power
Power to make, alter, and repeal laws.
Doctrine of Separation of Powers
Non-delegation of legislative power
Power conferred upon the legislature to make laws cannot be delegated by that department to any
other body or authority.
Exception to the doctrine of Non-delegation of legislative power
a.
b.
c.
d.
e.

Delegation to the President (e.g. Sec. 23(2) (war) and 28(2) (tariff rates), Art. IV, Constitution)
Delegation to the local governments (e.g. Sec. 48, Local Government Code)
Delegation to the people
Delegation to the Supreme Court (e.g. Sec. 5(5), Art. VIII, Constitution)
Delegation to Administrative Agencies.

Cases:
1. US v. Barrias, 11 Phil. 327 (1908)
Lesson: Fixing of penalties for violation of laws is a matter purely within the hands of the legislature.
SCs words: The complaint in this instance was framed with reference, as its authority, to sections 311
and 319 [19 and 311] of Act No. 355, of the Philippine Customs Administrative Act, as amended by
Acts Nos. 1235 and 1480. Under Act No. 1235, the Collector is not only empowered to make suitable
regulations, but also to "fix penalties for violation thereof," not exceeding a fine of P500. This
provision of the statute does, indeed, present a serious question.
In the case of The Board of Harbor Commissioners of the Port of Eureka vs. Excelsior Redwood
Company (88 Cal., 491), it was ruled that harbor commissioners can not impose a penalty under
statutes authorizing them to do so, the court saying:"Conceding that the legislature could delegate to
the plaintiff the authority to make rules and regulations with reference to the navigation of Humboldt
Bay, the penalty for the violation of such rules and regulations is a matter purely in the hands of the
legislature."
Notes:
"One of the settled maxims in constitutional law is, that the power conferred upon the legislature to
make laws can not be delegated by that department to any other body or authority. Where the
sovereign power of the State has located the authority, there it must remain; and by the constitutional
agency alone the laws must be made until the constitution itself is changed. The power to whose
judgment, wisdom, and patriotism this high prerogative has been intrusted can not relieve itself of the
responsibility by choosing other agencies upon which the power shall be developed, nor can it
substitute the judgment, wisdom, and patriotism of any other body for those to which alone the
people have seen fit to confide this sovereign trust." (Cooley's Constitutional Limitations, 6th ed., p.
137.)
This doctrine is based on the ethical principle that such a delegated power constitutes not only a right
but a duty to be performed by the delegate by the instrumentality of his own judgment acting
immediately upon the matter of legislation and not through the intervening mind of another.

2. People v. Vera, 65 Phil. 56 (1937)

Lesson: Old Probation Law violated the doctrine of non-delegation when it placed the discretion to the
local governments the decision to allocate for the salary of the probation officer.

3. Maceda v. Macaraig, 197 SCRA 771 (1991)

Lesson: Executive Order No. 93 is complete and it also provided sufficient standard. A reading of
Section 3 of said law shows that it set the policy to be the greater national interest. Also, delegation of
legislative power has become the rule and its non-delegation the exception.
SCs words: The standards of the delegated power are also clearly provided for. The required
"standard" need not be expressed. In Edu vs. Ericta and in De la Llana vs. Alba, this Court held: "The
standard may be either express or implied. If the former, the non-delegated objection is easily met.
The standard though does not have to be spelled out specifically. It could be implied from the policy
and purpose of the act considered as a whole."
In People vs. Rosenthal the broad standard of "public interest" was deemed sufficient. In Calalang vs.
Williams, it was "public welfare" and in Cervantes vs. Auditor General, it was the purpose of
promotion of "simplicity, economy and efficiency." And, implied from the purpose of the law as a
whole, "national security" was considered sufficient standard and so was "protection of fish-fry or fish
eggs."
The observation of petitioner that the approval of the President was not even required in said
Executive Order of the tax exemption privilege approved by the FIRB, unlike in previous similar
issuances, is not well-taken. On the contrary, under Section 1 (f) of Executive Order No. 93,
aforestated, such tax and duty exemptions extended by the FIRB must be approved by the President.
In this case, FIRB Resolution No. 17-87 was approved by the respondent Executive Secretary, by
authority of the President, on October 15, 1987.
Mr. Justice Isagani A. Cruz commenting on the delegation of legislative power stated
"The latest in our jurisprudence indicates that delegation of legislative power has become the rule and
its non-delegation the exception. The reason is the increasing complexity of modern life and many
technical fields of governmental functions as in matters pertaining to tax exemptions. This is coupled
by the growing inability of the legislature to cope directly with the many problems demanding its
attention. The growth of society has ramified its activities and created peculiar and sophisticated
problems that the legislature cannot be expected reasonably to comprehend. Specialization even in
legislation has become necessary. To many of the problems attendant upon present day undertakings,
the legislature may not have the competence, let alone the interest and the time, to provide the
required direct and efficacious, not to say specific solutions."
Thus, in the case of Tablarin vs. Gutierrez, 51 this Court enunciated the rationale in favor of
delegation of legislative functions
"One thing however, is apparent in the development of the principle of separation of powers and that
is that the maxim of delegatus non potest delegare or delegati potestas non potest delegare, adopted
this practice (Delegibus et Consuetudiniis, Anglia edited by G.E. Woodline, Yale University Press, 1922,
Vol. 2, p. 167) but which is also recognized in principle in the Roman Law (d. 17.18.3) has been made
to adapt itself to the complexities of modern government, giving rise to the adoption, within certain
limits, of the principle of subordinate legislation, not only in the United States and England but in
practically all modern governments. (People vs. Rosenthal and Osmea, 68 Phil. 318, 1939).
Accordingly, with the growing complexities of modern life, the multiplication of the subjects of
governmental regulation, and the increased difficulty of administering the laws, there is a constantly
growing tendency toward the delegation of greater power by the legislative, and toward the approval
of the practice by the Courts." (Emphasis supplied.)

The legislative authority could not or is not expected to state all the detailed situations wherein the tax
exemption privileges of persons or entities would be restored. The task may be assigned to an
administrative body like the FIRB.
Moreover, all presumptions are indulged in favor of the constitutionality and validity of the statute.
Such presumption can be overturned if its invalidity is proved beyond reasonable doubt. Otherwise, a
liberal interpretation in favor of constitutionality of legislation should be adopted.
E.O. No. 93 is complete in itself and constitutes a valid delegation of legislative power to the FIRB. And
as above discussed, the tax exemption privilege that was restored to NPC by FIRB Resolution No. 1787 of June 1987 includes exemption from indirect taxes and duties on petroleum products used in its
operation.

4. Eastern Shipping Lines, Inc. v. POEA, 166 SCRA 533 (1988)

Lesson: 2 tests explained. Also, the reason for the delegation.
SCs words: There are two accepted tests to determine whether or not there is a valid delegation of
legislative power, viz,, the completeness test and the sufficient standard test. Under the first test, the
law must be complete in all its terms and conditions when it leaves the legislature such that when it
reaches the delegate the only thing he will have to do is enforce it. Under the sufficient standard test,
there must be adequate guidelines or limitations in the law to map out the boundaries of the
delegate's authority and prevent the delegation from running riot. 14 Both tests are intended to
prevent a total transference of legislative authority to the delegate, who is not allowed to step into the
shoes of the legislature and exercise a power essentially legislative.
The principle of non-delegation of powers is applicable to all the three major powers of the
Government but is especially important in the case of the legislative power because of the many
instances when its delegation is permitted. The occasions are rare when executive or judicial powers
have to be delegated by the authorities to which they legally pertain. In the case of the legislative
power, however, such occasions have become more and more frequent, if not necessary. This had led
to the observation that the delegation of legislative power has become the rule and its non-delegation
the exception.
The reason is the increasing complexity of the task of government and the growing inability of the
legislature to cope directly with the myriad problems demanding its attention. The growth of society
has ramified its activities and created peculiar and sophisticated problems that the legislature cannot
be expected reasonably to comprehend. Specialization even in legislation has become necessary. To
many of the problems attendant upon present-day undertakings, the legislature may not have the
competence to provide the required direct and efficacious, not to say, specific solutions. These
solutions may, however, be expected from its delegates, who are supposed to be experts in the
particular fields assigned to them.
The reasons given above for the delegation of legislative powers in general are particularly applicable
to administrative bodies. With the proliferation of specialized activities and their attendant peculiar
problems, the national legislature has found it more and more necessary to entrust to administrative
agencies the authority to issue rules to carry out the general provisions of the statute. This is called
the "power of subordinate legislation."
With this power, administrative bodies may implement the broad policies laid down in a statute by
"filling in" the details which the Congress may not have the opportunity or competence to provide.
This is effected by their promulgation of what are known as supplementary regulations, such as the
implementing rules issued by the Department of Labor on the new Labor Code. These regulations have
the force and effect of law.

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

5. Rabor v. CSC, 61 SCAD 569 or 244 SCRA 614 (1995)

Lesson: High degree of detail not necessary in a law that delegates power to administrative agencies
to exercise subordinate legislation.
SCs words: Clearly, therefore, Cena when it required a considerably higher degree of detail in the
statute to be implemented, went against prevailing doctrine. It seems clear that if the governing or
enabling statute is quite detailed and specific to begin with, there would be very little need (or
occasion) for implementing administrative regulations. It is, however, precisely the inability of
legislative bodies to anticipate all (or many) possible detailed situations in respect of any relatively
complex subject matter, that makes subordinate, delegated rule-making by administrative agencies so
important and unavoidable. All that may be reasonably demanded is a showing that the delegated
legislation consisting of administrative regulations are germane to the general purposes projected by
the governing or enabling statute. This is the test that is appropriately applied in respect of Civil
Service Memorandum Circular No. 27, Series of 1990, and to this test we now turn.
We consider that the enabling statute that should appropriately be examined in the present Civil
Service law - found in Book V, Title I, Subtitle A, of Executive Order No. 292 dated 25 July 1987,
otherwise known as the Administrative Code of 1987 - and not alone P.D. No. 1146, otherwise known
as the "Revised Government Service Insurance Act of 1977." For the matter of extension of service of
retirees who have reached sixty-five (65) years of age is an area that is covered by both statutes and
not alone by Section 11 (b) of P.D. No. 1146. This is crystal clear from examination of many provisions
of the present civil service law.

Delegation of legislative power to Administrative Agencies

a. Quasi-legislative or rule-making powers of administrative agencies
b. Kinds of rule-making power
1. Rule-making by reason of particular delegation of authority (subordinate legislation)
2. Rule-making by the constructuion and interpretation of a statute being administered (interpretative
legislation)
3 kinds:
Interpretation as incident of the execution of a law
Interpretation handed down by the Secretary of Justice upon the request of a government agency or
official
Intyerpretation in adversary proceedings
3. Determination of facts under a delegated power as to which a statue shall go into effect (contingent
legislation)
c. Reasons for delegation of legislative power

Delegation of legislative pwer has become more and more frequent, if not necessary. This has led to
the observation that the delegation of legislative power has become the rule and its non-delegation
the exception.
The reasons for the delegation of legislative power are the increasing complexity of the task of
government and the growing inability of the legislature to cope directly with the myriad problems
demanding its attention. The growth of society has ramified its activites and created peculiar and
sophisticated
problems
that
the
legislature
cannot
be
expected
reasonably
to
comprehend. Specialization even in legislation has become necessary.
d. What can and cannot be delegated
What can be delegated Legislature may properly delegate to administrative agency any legislative
power other than the making, altering or repealing of a law, the determination of legislative policies
and objectives to be achieved, and the formulation and promulgation of a defined and binding rule of
conduct. It can delegate the discretion as to how the law shall be enforced, to issue rules to fill in
details, to ascertain facts on which the law will operate, to exercise police power, and to fix rates. To
be valid, however, the delegation has to pass the competence and sufficiency of standard tests.
What cannot be delegated Doctrine of separation of pwers prohibits the delegation of that which is
purely legislative in nature. This consists of the power to make the law, or to determine what the law
shall be, and to alter or repeal it.
e. Test to determine validity of delegation
1. Completeness test The law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate the only thing he will have to do is to enforce it.
2. Sufficient standard test - There must be adequate guidelines or limitations in the law to map out the
boundaries of the delegates authority and prevent the delegation from running riot.
Case:
1.

ABAKADA Guro Party List v. Purisima, G.R. No. 166715, August 14, 2008
Lessons: (1) Clarifying the 2 tests. (2) It is unlawful for congress to exercise veto on the IRRs of an
administrative agency.
SCs words:
On the 2 tests: Two tests determine the validity of delegation of legislative power: (1) the
completeness test and (2) the sufficient standard test. A law is complete when it sets forth therein the
policy to be executed, carried out or implemented by the delegate. It lays down a sufficient standard
when it provides adequate guidelines or limitations in the law to map out the boundaries of the
delegates authority and prevent the delegation from running riot. To be sufficient, the standard
must specify the limits of the delegates authority, announce the legislative policy and identify the
conditions under which it is to be implemented.
RA 9335 adequately states the policy and standards to guide the President in fixing revenue targets
and the implementing agencies in carrying out the provisions of the law. Section 2 spells out the policy
of the law:
SEC. 2. Declaration of Policy. It is the policy of the State to optimize the revenue-generation
capability and collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) by
providing for a system of rewards and sanctions through the creation of a Rewards and Incentives
Fund and a Revenue Performance Evaluation Board in the above agencies for the purpose of
encouraging their officials and employees to exceed their revenue targets.
Section 4 canalized within banks that keep it from overflowing the delegated power to the President
to fix revenue targets:

SEC. 4. Rewards and Incentives Fund. A Rewards and Incentives Fund, hereinafter referred to as the
Fund, is hereby created, to be sourced from the collection of the BIR and the BOC in excess of their
respective revenue targets of the year, as determined by the Development Budget and
Coordinating Committee (DBCC), in the following percentages:
Excess of Collection of the Percent (%) of the Excess
Excess the Revenue Targets
Collection to Accrue to the Fund
30% or below

15%

More than 30%

15% of the first 30%

plus 20% of the
remaining excess

The Fund shall be deemed automatically appropriated the year immediately following the year when
the revenue collection target was exceeded and shall be released on the same fiscal year.
Revenue targets shall refer to the original estimated revenue collection expected of the BIR
and the BOC for a given fiscal year as stated in the Budget of Expenditures and Sources of
Financing (BESF) submitted by the President to Congress. The BIR and the BOC shall submit to
the DBCC the distribution of the agencies revenue targets as allocated among its revenue districts in
the case of the BIR, and the collection districts in the case of the BOC.
xxx xxx xxx (emphasis supplied)
Revenue targets are based on the original estimated revenue collection expected respectively of the
BIR and the BOC for a given fiscal year as approved by the DBCC and stated in the BESF submitted by
the President to Congress. Thus, the determination of revenue targets does not rest solely on the
President as it also undergoes the scrutiny of the DBCC.
On the other hand, Section 7 specifies the limits of the Boards authority and identifies the conditions
under which officials and employees whose revenue collection falls short of the target by at least 7.5%
may be removed from the service:
SEC. 7. Powers and Functions of the Board. The Board in the agency shall have the following powers
and functions:
xxx xxx xxx
(b) To set the criteria and procedures for removing from service officials and employees whose
revenue collection falls short of the target by at least seven and a half percent (7.5%), with
due consideration of all relevant factors affecting the level of collection as provided in the
rules and regulations promulgated under this Act, subject to civil service laws, rules and
regulations and compliance with substantive and procedural due process: Provided, That the
following exemptions shall apply:

On legislative veto: The Joint Congressional Oversight Committee in RA 9335 was created for the
purpose of approving the implementing rules and regulations (IRR) formulated by the DOF, DBM,
NEDA, BIR, BOC and CSC. On May 22, 2006, it approved the said IRR. From then on, it
became functus officio and ceased to exist. Hence, the issue of its alleged encroachment on the
executive function of implementing and enforcing the law may be considered moot and academic.
Concept and bases of congressional oversight

Broadly defined, the power of oversight embraces all activities undertaken by Congress to enhance its
understanding of and influence over the implementation of legislation it has enacted. Clearly, oversight
concerns post-enactment measures undertaken by Congress: (a) to monitor bureaucratic compliance
with program objectives, (b) to determine whether agencies are properly administered, (c) to
eliminate executive waste and dishonesty, (d) to prevent executive usurpation of legislative authority,
and (d) to assess executive conformity with the congressional perception of public interest.
Categories of congressional oversight functions
The acts done by Congress purportedly in the exercise of its oversight powers may be divided
into three categories, namely: scrutiny, investigation and supervision.
a. Scrutiny - Congressional scrutiny implies a lesser intensity and continuity of attention to
administrative operations. Its primary purpose is to determine economy and efficiency of the operation
of government activities. In the exercise of legislative scrutiny, Congress may request information and
report from the other branches of government. It can give recommendations or pass resolutions for
consideration of the agency involved.
b. Congressional investigation - While congressional scrutiny is regarded as a passive process of
looking at the facts that are readily available, congressional investigation involves a more intense
digging of facts. The power of Congress to conduct investigation is recognized by the 1987
Constitution under section 21, Article VI,
c. Legislative supervision - The third and most encompassing form by which Congress exercises its
oversight power is thru legislative supervision. Supervision connotes a continuing and informed
awareness on the part of a congressional committee regarding executive operationsin a given
administrative area. While both congressional scrutiny and investigation involve inquiry into past
executive branch actions in order to influence future executive branch performance, congressional
supervision allows Congress to scrutinize the exercise of delegated law-making authority, and permits
Congress to retain part of that delegated authority.
Congress has two options when enacting legislation to define national policy within the broad horizons
of its legislative competence. It can itself formulate the details or it can assign to the executive branch
the responsibility for making necessary managerial decisions in conformity with those standards.
In the latter case, the law must be complete in all its essential terms and conditions when it leaves the
hands of the legislature. Thus, what is left for the executive branch or the concerned administrative
agency when it formulates rules and regulations implementing the law is to fill up details
(supplementary rule-making) or ascertain facts necessary to bring the law into actual operation
(contingent rule-making).
Administrative regulations enacted by administrative agencies to implement and interpret the law
which they are entrusted to enforce have the force of law and are entitled to respect. Such rules and
regulations partake of the nature of a statute and are just as binding as if they have been written in
the statute itself. As such, they have the force and effect of law and enjoy the presumption of
constitutionality and legality until they are set aside with finality in an appropriate case by a
competent court. Congress, in the guise of assuming the role of an overseer, may not pass upon their
legality by subjecting them to its stamp of approval without disturbing the calculated balance of
powers established by the Constitution. In exercising discretion to approve or disapprove the IRR
based on a determination of whether or not they conformed with the provisions of RA 9335, Congress
arrogated judicial power unto itself, a power exclusively vested in this Court by the Constitution.

2.

Gutierrez v. DBM, G.R. No. 153266, March 18, 2010 (and other allied cases)

Lesson: If the law is clear, no need for IRR to be implemented. In this case, no need for publication of
the IRR.

(1)
(2)
(3)
(4)
(5)
(6)
(7)

SCs words: As will be noted from the first sentence above, all allowances were deemed integrated
into the standardized salary rates except the following:
representation and transportation allowances;
clothing and laundry allowances;
subsistence allowances of marine officers and crew on board government vessels;
subsistence allowances of hospital personnel;
hazard pay;
allowances of foreign service personnel stationed abroad; and
such other additional compensation not otherwise specified in Section 12 as may be determined by the
DBM.
But, while the provision enumerated certain exclusions, it also authorized the DBM to identify such
other additional compensation that may be granted over and above the standardized salary
rates. In Philippine Ports Authority Employees Hired After July 1, 1989 v. Commission on Audit, the
Court has ruled that while Section 12 could be considered self-executing in regard to items (1) to (6),
it was not so in regard to item (7). The DBM still needed to amplify item (7) since one cannot simply
assume what other allowances were excluded from the standardized salary rates. It was only upon
the issuance and effectivity of the corresponding implementing rules and regulations that item (7)
could be deemed legally completed.
Delegated rule-making is a practical necessity in modern governance because of the increasing
complexity and variety of public functions. Congress has endowed administrative agencies like
respondent DBM with the power to make rules and regulations to implement a given legislation and
effectuate its policies. Such power is, however, necessarily limited to what the law
provides. Implementing rules and regulations cannot extend the law or expand its coverage, as the
power to amend or repeal a statute belongs to the legislature. Administrative agencies implement the
broad policies laid down in a law by filling in only its details. The regulations must be germane to
the objectives and purposes of the law and must conform to the standards prescribed by law.
On publication: It is a settled rule that publication is required as a condition precedent to
theeffectivity of a law to inform the public of its contents before their rights and interests are affected
by the same. Administrative rules and regulations must also be published if their purpose is to enforce
or implement existing law pursuant also to a valid delegation.
Nonetheless, as previously discussed, the integration of COLA into the standardized salary rates is not
dependent on the publication of CCC 10 and NCC 59. This benefit is deemed included in the
standardized salary rates of government employees since it falls under the general rule of integration
all allowances.
More importantly, the integration was not by mere legal fiction since it was factually integrated into
the employees salaries. Records show that the government employees were informed by their
respective offices of their new position titles and their corresponding salary grades when they were
furnished with the Notices of Position Allocation and Salary Adjustment (NPASA). The NPASA provided
the breakdown of the employees gross monthly salary as of June 30, 1989 and the composition of his
standardized pay under R.A. 6758. Notably, the COLA was considered part of the employees monthly
income.
In truth, petitioners never really suffered any diminution in pay as a consequence of the consolidation
of COLA into their standardized salary rates. There is thus nothing in these cases which can be the
subject of a back pay since the amount corresponding to COLA was never withheld from petitioners in
the first place.

Consequently, the non-publication of CCC 10 and NCC 59 in the Official Gazette or newspaper of
general circulation does not nullify the integration of COLA into the standardized salary rates upon
the effectivity of R.A. 6758. As the Court has said in Philippine International Trading Corporation v.
Commission on Audit, the validity of R.A. 6758 should not be made to depend on the validity of its
implementing rules.

3.

BPI Leasing v. Court of Appeals, G.R. No. 127624, Nov. 18, 2003
Lesson: Subordinate and interpretative legislation distinguished. General rule is prospective application
of administrative rules.
SCs words: Administrative issuances may be distinguished according to their nature and substance:
legislative and interpretative. A legislative rule is in the matter of subordinate legislation, designed to
implement a primary legislation by providing the details thereof. An interpretative rule, on the other
hand, is designed to provide guidelines to the law which the administrative agency is in charge of
enforcing.
The Court finds the questioned revenue regulation to be legislative in nature. Section 1 of Revenue
Regulation 19-86 plainly states that it was promulgated pursuant to Section 277 of the NIRC. Section
277 (now Section 244) is an express grant of authority to the Secretary of Finance to promulgate all
needful rules and regulations for the effective enforcement of the provisions of the NIRC. In Paper
Industries Corporation of the Philippines v. Court of Appeals, the Court recognized that the application
of Section 277 calls for none other than the exercise of quasi-legislative or rule-making
authority. Verily, it cannot be disputed that Revenue Regulation 19-86 was issued pursuant to the
rule-making power of the Secretary of Finance, thus making it legislative, and not interpretative as
alleged by BLC.
BLC further posits that, assuming the revenue regulation is legislative in nature, it is invalid
After upholding the validity of Revenue Regulation 19-86, the Court now resolves whether its
application should be prospective or retroactive.
On non-retroactivity: The principle is well entrenched that statutes, including administrative rules and
regulations, operate prospectively only, unless the legislative intent to the contrary is manifest by
express terms or by necessary implication. In the present case, there is no indication that the revenue
regulation may operate retroactively.
Furthermore, there is an express provision stating that it shall take effect on January 1, 1987, and
that it shall be applicable to all leases written on or after the said date. Being clear on its
prospective application, it must be given its literal meaning and applied without further interpretation.
Thus, BLC is not in a position to invoke the provisions of Revenue Regulation 19-86 for lease rentals it
received prior to January 1, 1987.
It is also apt to add that tax refunds are in the nature of tax exemptions. As such, these are regarded
as in derogation of sovereign authority and are to be strictly construed against the person or entity
claiming the exemption. The burden of proof is upon him who claims the exemption and he must be
able to justify his claim by the clearest grant under Constitutional or statutory law, and he cannot be
permitted to rely upon vague implications. Nothing that BLC has raised justifies a tax refund.

4.

Board of Trustees v. Velasco, G.R. No. 170436, February 2, 2011

Lesson: Internal rules do not need publication.

SCs words: Not all rules and regulations adopted by every government agency are to be filed with the
UP Law Center. Only those of general or of permanent character are to be filed. According to the UP
Law Centers guidelines for receiving and publication of rules and regulations, 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 filed with the UP Law Center.
Resolution No. 372 was about the new GSIS salary structure, Resolution No. 306 was about the
authority to pay the 2002 Christmas Package, and Resolution No. 197 was about the GSIS merit
selection and promotion plan. Clearly, the assailed resolutions pertained only to internal rules meant
to regulate the personnel of the GSIS. There was no need for the publication or filing of these
resolutions with the UP Law Center.

f. Requisites for validity of administrative rules and regulations

1.
2.
3.
4.

Must be germane to the objects and purposes of the law

Conform to the standards that the law prescribes
Must be reasonable
Must be related solely to carrying into effects the general provisions of the law.
Cases:

1. Dagan v. Philippine Racing Commission, G.R. No. 175220, February 12, 2009
Lesson: Requisites, explained.

1.
2.
3.
4.

SCs words: The validity of an administrative issuance, such as the assailed guidelines, hinges on
compliance with the following requisites:
Its promulgation must be authorized by the legislature;
It must be promulgated in accordance with the prescribed procedure;
It must be within the scope of the authority given by the legislature;
It must be reasonable.
All the prescribed requisites are met as regards the questioned issuances. Philracoms authority is
drawn from P.D. No. 420. The delegation made in the presidential decree is valid. Philracom did not
exceed its authority. And the issuances are fair and reasonable. Xxx
P.D. No. 420 hurdles the tests of completeness and standards sufficiency.
Philracom was created for the purpose of carrying out the declared policy in Section 1 which is to
promote and direct the accelerated development and continued growth of horse racing not only in
pursuance of the sports development program but also in order to insure the full exploitation of the
sport as a source of revenue and employment. Furthermore, Philracom was granted exclusive
jurisdiction and control over every aspect of the conduct of horse racing, including the framing and
scheduling of races, the construction and safety of race tracks, andthe security of racing. P.D. No.
420 is already complete in itself.
Clearly, there is a proper legislative delegation of rule-making power to Philracom. Clearly too, for its
part Philracom has exercised its rule-making power in a proper and reasonable manner. More
specifically, its discretion to rid the facilities of MJCI and PRCI of horses afflicted with EIA is aimed at
preserving the security and integrity of horse races.
Petitioners also question the supposed delegation by Philracom of its rule-making powers to MJCI and
PRCI.

There is no delegation of power to speak of between Philracom, as the delegator and MJCI and PRCI
as delegates. The Philracom directive is merely instructive in character. Philracom had instructed
PRCI and MJCI to immediately come up with Clubs House Rule to address the problem and rid their
facilities of horses infected with EIA. PRCI and MJCI followed-up when they ordered the racehorse
owners to submit blood samples and subject their race horses to blood testing. Compliance with the
Philracoms directive is part of the mandate of PRCI and MJCI under Sections 11 of R.A. No. 7953 and
Sections 1 and 2 of 8407.
As correctly proferred by MJCI, its duty is not derived from the delegated authority of Philracom but
arises from the franchise granted to them by Congress allowing MJCI to do and carry out all such
acts, deeds and things as may be necessary to give effect to the foregoing. As justified by PRCI,
obeying the terms of the franchise and abiding by whatever rules enacted by Philracom is its duty.
As to the second requisite, petitioners raise some infirmities relating to Philracoms guidelines. They
question the supposed belated issuance of the guidelines, that is, only after the collection of blood
samples for the Coggins Test was ordered. While it is conceded that the guidelines were issued a
month after Philracoms directive, this circumstance does not render the directive nor the guidelines
void. The directives validity and effectivity are not dependent on any supplemental
guidelines. Philracom has every right to issue directives to MJCI and PRCI with respect to the conduct
of horse racing, with or without implementing guidelines.

On publication: Petitioners also argue that Philracoms guidelines have no force and effect for lack of
publication and failure to file copies with the University of the Philippines (UP) Law Center as required
by law.
As a rule, the issuance of rules and regulations in the exercise of an administrative agency of its quasilegislative power does not require notice and hearing, In Abella, Jr. v. Civil Service Commission, this
Court had the occasion to rule that prior notice and hearing are not essential to the validity of rules or
regulations issued in the exercise of quasi-legislative powers since there is no determination of past
events or facts that have to be established or ascertained.
The third requisite for the validity of an administrative issuance is that it must be within the limits of
the powers granted to it. The administrative body may not make rules and regulations which are
inconsistent with the provisions of the Constitution or a statute, particularly the statute it is
administering or which created it, or which are in derogation of, or defeat, the purpose of a statute.
The assailed guidelines prescribe the procedure for monitoring and eradicating EIA. These guidelines
are in accord with Philracoms mandate under the law to regulate the conduct of horse racing in the
country.
Anent the fourth requisite, the assailed guidelines do not appear to be unreasonable or
discriminatory. In fact, all horses stabled at the MJCI and PRCIs premises underwent the same
procedure. The guidelines implemented were undoubtedly reasonable as they bear a reasonable
relation to the purpose sought to be accomplished, i.e., the complete riddance of horses infected with
EIA.
It also appears from the records that MJCI properly notified the racehorse owners before the test was
conducted. Those who failed to comply were repeatedly warned of certain consequences and
sanctions.
Furthermore, extant from the records are circumstances which allow respondents to determine from
time to time the eligibility of horses as race entries. The lease contract executed between petitioner
and MJC contains a proviso reserving the right of the lessor, MJCI in this case, the right to determine
whether a particular horse is a qualified horse. In addition, Philracoms rules and regulations on horse

racing provide that horses must be free from any contagious disease or illness in order to be eligible
as race entries.
All told, we find no grave abuse of discretion on the part of Philracom in issuing the contested
guidelines and on the part MJCI and PRCI in complying with Philracoms directive.

2. Smart Communications Inc., v. NTC, G.R. No. 151908, August 12, 2003
Lesson: Rule-making and Adjudication distinguished.
SCs words: 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.
The rules and regulations that administrative agencies promulgate, which are the product of a
delegated legislative 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. 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. They must conform to
and be consistent with the provisions of the enabling statute in order for such rule or regulation to be
valid. Constitutional and statutory provisions control with respect to what rules and regulations may
be promulgated by an administrative body, as well as with respect to what fields are subject to
regulation by it. It may not make rules and regulations which are inconsistent with the provisions of
the Constitution or a statute, particularly the statute it is administering or which created it, or which
are in derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an
administrative order, the former must prevail.
Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its
quasi-judicial or administrative adjudicatory power. This is the power to hear and determine questions
of fact to which the legislative policy is to apply and to decide in accordance with the standards laid
down by the law itself in enforcing and administering the same law. The administrative body exercises
its quasi-judicial power when it performs in a judicial manner an act which is essentially of an
executive or administrative nature, where the power to act in such manner is incidental to or
reasonably necessary for the performance of the executive or administrative duty entrusted to it. In
carrying out their quasi-judicial functions, the administrative officers or bodies are required to
investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw
conclusions from them as basis for their official action and exercise of discretion in a judicial nature.
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 applies
only where the act of the administrative agency concerned was performed pursuant to its quasijudicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power.
In Association of Philippine Coconut Dessicators v. Philippine Coconut Authority, it was held: 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.

3. Conte v. Commission on Audit, 76 SCAD 16 or 264 SCRA 19 (1996)

Lesson: Administrative issuances should adhere to the statutes that they are supposed to implement.

SCs words: It is doctrinal that in case of conflict between a statute and an administrative order, the
former must prevail. A rule or regulation must conform to and be consistent with the provisions of the
enabling statute in order for such rule or regulation to be valid. The rule-making power of a public
administrative body is a delegated legislative power, which it may not use either to abridge the
authority given it by the Congress or the Constitution or to enlarge its power beyond the scope
intended. Constitutional and statutory provisions control with respect to what rules and regulations
may be promulgated by such a body, as well as with respect to what fields are subject to regulation by
it. It may not make rules and regulations which are inconsistent with the provisions of the
Constitution or a statute, particularly the statute it is administering or which created it, or which are in
derogation of, or defeat, the purpose of a statute. Though well-settled is the rule that retirement laws
are liberally interpreted in favor of the retiree, nevertheless, there is really nothing to interpret in
either RA 4968 or Res. 56, and correspondingly, the absence of any doubt as to the ultra-vires nature
and illegality of the disputed resolution constrains us to rule against petitioners.
As a necessary consequence of the invalidity of Res. 56, we can hardly impute abuse of discretion of
any sort to respondent Commission for denying petitioners request for reconsideration of the 3rd
Indorsement of July 10, 1989. On the contrary, we hold that public respondent in its assailed Decision
acted with circumspection in denying petitioners claim. It reasoned thus: After a careful evaluation of
the facts herein obtaining, this Commission finds the instant request to be devoid of merit. It bears
stress that the financial assistance contemplated under SSS Resolution No. 56 is granted to SSS
employees who opt to retire under R.A. No. 660. In fact, by the aggrieved parties own admission
(page 2 of the request for reconsideration dated January 12, 1993), it is a financial assistance granted
by the SSS management to its employees, in addition to the retirement benefits under Republic Act
No. 660. (underscoring supplied for emphasis) There is therefore no question, that the said financial
assistance partakes of the nature of a retirement benefit that has the effect of modifying existing
retirement laws particularly R.A. No. 660.
g. Penal rules and regulations

Cases:
1.

People v. Santos, 63 Phil. 300 (1936)

Lesson: Effect when administrative agency issue orders that are beyond its authority.
SCs words: The herein accused and appellee Augusto A. Santos is charged with having ordered his
fishermen to manage and operate the motor launches Malabon II and Malabon III registered in his
name and to fish, loiter and anchor within three kilometers of the shore line of the Island of Corregidor
over which jurisdiction is exercised by naval and military authorities of the United States, without
permission from the Secretary of Agriculture and Commerce.
These acts constitute a violation of the conditional clause of section 28 above quoted, which reads as
follows: "Provided, That boats not subject to license under Act No. 4003 and this order may fish within
the areas mentioned above (within 3 kilometers of the shore line of islands and reservations over
which jurisdiction is exercised by naval and military authorities of the United States, particularly
Corregidor) only upon receiving written permission therefor, which permission may be granted by the
Secretary of Agriculture and Commerce upon recommendation of the military or naval authorities
concerned."
Act No. 4003 contains no similar provision prohibiting boats not subject to license from fishing within
three kilometers of the shore line of islands and reservations over which jurisdiction is exercised by
naval and military authorities of the United States, without permission from the Secretary of
Agriculture and Commerce upon recommendation of the military and naval authorities concerned.
Inasmuch as the only authority granted to the Secretary of Agriculture and Commerce, by section 4 of

Act No. 4003, is to issue from time to time such instructions, orders, rules and regulations consistent
with said Act, as may be necessary and proper to carry into effect the provisions thereof and for the
conduct of proceedings arising under such provisions; and inasmuch as said Act No. 4003, as stated,
contains no provisions similar to those contained in the above quoted conditional clause of section 28
of Administrative Order No. 2, the conditional clause in question supplies a defect of the law,
extending it. This is equivalent to legislating on the matter, a power which has not been and cannot be
delegated to him, it being exclusively reserved to the then Philippine Legislature by the Jones Law, and
now to the National Assembly by the Constitution of the Philippines. Such act constitutes not only an
excess of the regulatory power conferred upon the Secretary of Agriculture and Commerce, but also
an exercise of a legislative power which he does not have, and therefore said conditional clause is null
and void and without effect (12 Corpus Juris, 845; Rubi vs. Provincial Board of Mindoro, 39 Phil., 660;
U. S. vs. Ang Tang Ho, 43 Phil., 1; U. S. vs. Barrias, 11 Phil., 327).
For the foregoing considerations, we are of the opinion and so hold that the conditional clause of
section 28 of Administrative Order No. 2, issued by the Secretary of Agriculture and Commerce, is null
and void and without effect, as constituting an excess of the regulatory power conferred upon him by
section 4 of Act No. 4003 and an exercise of a legislative power which has not been and cannot be
delegated to him.

2.

People v. Que Po Lay, 94 Phil. (1954)

Lesson: Necessity of publication.
SCs words: But the question of non-publication is fundamental and decisive. If as a matter of fact
Circular No. 20 had not been published as required by law before its violation, then in the eyes of the
law there was no such circular to be violated and consequently appellant committed no violation of the
circular or committed any offense, and the trial court may be said to have had no jurisdiction. This
question may be raised at any stage of the proceeding whether or not raised in the court below.

3.

People v. Maceren, 79 SCRA 450 (1977)

Lesson: The rule-making power must be confined to details for regulating the mode or proceeding to
carry into effect the law as it has been enacted.
SCs words: The inclusion in that decree of provisions defining and penalizing electro fishing is a clear
recognition of the deficiency or silence on that point of the old Fisheries Law. It is an admission that a
mere executive regulation is not legally adequate to penalize electro fishing.
The rule-making power must be confined to details for regulating the mode or proceeding to carry into
effect the law as it has been enacted. The power cannot be extended to amending or expanding the
statutory requirements or to embrace matters not covered by the statute. Rules that subvert the
statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax Appeals, 93 Phil. 376, 382,
citing 12 C.J. 845-46. As to invalid regulations, see Collector of Internal Revenue vs. Villaflor, 69 Phil.
319; Wise & Co. vs. Meer, 78 Phil. 655, 676; Del Mar vs. Phil. Veterans Administration, L-27299, June
27, 1973, 51 SCRA 340, 349).
There is no question that the Secretary of Agriculture and Natural Resources has rule-making powers.
Section 4 of the Fisheries Law provides that the Secretary "shall from time to time issue instructions,
orders, and regulations consistent" with that law, "as may be necessary and proper to carry into effect
the provisions thereof. That power is now vested in the Secretary of Natural Resources by section 7 of
the Revised Fisheries Law, Presidential Decree No. 704.
Section 4(h) of Republic Act No. 3512 empower the Commissioner of Fisheries "to prepare and
execute upon the approval of the Secretary of Agriculture and Natural Resources, forms, instructions,

rules and regulations consistent with the purpose" of that enactment "and for the development of
fisheries."
A penal statute is strictly construed. While an administrative agency has the right to make rules and
regulations to carry into effect a law already enacted, that power should not be confused with the
power to enact a criminal statute. An administrative agency can have only the administrative or
policing powers expressly or by necessary implication conferred upon it. (Glustrom vs. State, 206 Ga.
734, 58 SE 2d 534; See 2 Am. Jr. 2nd 129-130).
Where the legislature has delegated to executive or administrative officers and boards authority to
promulgate rules to carry out an express legislative purpose, the rules of administrative officers and
boards, which have the effect of extending, or which conflict with the authority-granting statute, do
not represent a valid exercise of the rule-making power but constitute an attempt by an administrative
body to legislate (State vs. Miles, 5 Wash. 2nd 322; 105 Pac. 2nd 51).
In a prosecution for a violation of an administrative order, it must clearly appear that the order is one
which falls within the scope of the authority conferred upon the administrative body, and the order will
be scrutinized with special care. (State vs. Miles, supra).