G.R. No.

166052 August 29, 2007

ANAK MINDANAO PARTY-LIST GROUP, as represented by Rep. Mujiv S. Hataman, and MAMALO DESCENDANTS ORGANIZATION, INC., as
represented by its Chairman Romy Pardi, Petitioners,
vs.
THE EXECUTIVE SECRETARY, THE HON. EDUARDO R. ERMITA, and THE SECRETARY OF AGRARIAN/LAND REFORM, THE HON. RENE C.
VILLA, Respondents.
DECISION
CARPIO MORALES, J.:
Petitioners Anak Mindanao Party-List Group (AMIN) and Mamalo Descendants Organization, Inc. (MDOI) assail the constitutionality of Executive Order (E.O.) Nos.
364 and 379, both issued in 2004, via the present Petition for Certiorari and Prohibition with prayer for injunctive relief.
E.O. No. 364, which President Gloria Macapagal-Arroyo issued on September 27, 2004, reads:
EXECUTIVE ORDER NO. 364
TRANSFORMING THE DEPARTMENT OF AGRARIAN REFORM INTO THE DEPARTMENT OF LAND REFORM
WHEREAS, one of the five reform packages of the Arroyo administration is Social Justice and Basic [N]eeds;
WHEREAS, one of the five anti-poverty measures for social justice is asset reform;
WHEREAS, asset reforms covers [sic] agrarian reform, urban land reform, and ancestral domain reform;
WHEREAS, urban land reform is a concern of the Presidential Commission [for] the Urban Poor (PCUP) and ancestral domain reform is a concern of the National
Commission on Indigenous Peoples (NCIP);
WHEREAS, another of the five reform packages of the Arroyo administration is Anti-Corruption and Good Government;
WHEREAS, one of the Good Government reforms of the Arroyo administration is rationalizing the bureaucracy by consolidating related functions into one department;
WHEREAS, under law and jurisprudence, the President of the Philippines has broad powers to reorganize the offices under her supervision and control;
NOW[,] THEREFORE[,] I, Gloria Macapagal-Arroyo, by the powers vested in me as President of the Republic of the Philippines, do hereby order:
SECTION 1. The Department of Agrarian Reform is hereby transformed into the Department of Land Reform. It shall be responsible for all land reform in the country,
including agrarian reform, urban land reform, and ancestral domain reform.
SECTION 2. The PCUP is hereby placed under the supervision and control of the Department of Land Reform. The Chairman of the PCUP shall be ex-officio
Undersecretary of the Department of Land Reform for Urban Land Reform.
SECTION 3. The NCIP is hereby placed under the supervision and control of the Department of Land Reform. The Chairman of the NCIP shall be ex-officio
Undersecretary of the Department of Land Reform for Ancestral Domain Reform.
SECTION 4. The PCUP and the NCIP shall have access to the services provided by the Departments Finance, Management and Administrative Office; Policy, Planning
and Legal Affairs Office, Field Operations and Support Services Office, and all other offices of the Department of Land Reform.
SECTION 5. All previous issuances that conflict with this Executive Order are hereby repealed or modified accordingly.
SECTION 6. This Executive Order takes effect immediately. (Emphasis and underscoring supplied)
E.O. No. 379, which amended E.O. No. 364 a month later or on October 26, 2004, reads:
EXECUTIVE ORDER NO. 379
AMENDING EXECUTIVE ORDER NO. 364 ENTITLED TRANSFORMING THE DEPARTMENT OF AGRARIAN REFORM INTO THE DEPARTMENT OF
LAND REFORM
WHEREAS, Republic Act No. 8371 created the National Commission on Indigenous Peoples;
WHEREAS, pursuant to the Administrative Code of 1987, the President has the continuing authority to reorganize the administrative structure of the National
Government.
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and
existing laws, do hereby order:
Section 1. Amending Section 3 of Executive Order No. 364. Section 3 of Executive Order No. 364, dated September 27, 2004 shall now read as follows:
"Section 3. The National Commission on Indigenous Peoples (NCIP) shall be an attached agency of the Department of Land Reform."
Section 2. Compensation. The Chairperson shall suffer no diminution in rank and salary.
Section 3. Repealing Clause. All executive issuances, rules and regulations or parts thereof which are inconsistent with this Executive Order are hereby revoked,
amended or modified accordingly.
Section 4. Effectivity. This Executive Order shall take effect immediately. (Emphasis and underscoring in the original)
Petitioners contend that the two presidential issuances are unconstitutional for violating:
- THE CONSTITUTIONAL PRINCIPLES OF SEPARATION OF POWERS AND OF THE RULE OF LAW[;]
- THE CONSTITUTIONAL SCHEME AND POLICIES FOR AGRARIAN REFORM, URBAN LAND REFORM, INDIGENOUS PEOPLES RIGHTS
AND ANCESTRAL DOMAIN[; AND]
- THE CONSTITUTIONAL RIGHT OF THE PEOPLE AND THEIR ORGANIZATIONS TO EFFECTIVE AND REASONABLE PARTICIPATION IN
DECISION-MAKING, INCLUDING THROUGH ADEQUATE CONSULTATION[.] 1
By Resolution of December 6, 2005, this Court gave due course to the Petition and required the submission of memoranda, with which petitioners and respondents
complied on March 24, 2006 and April 11, 2006, respectively.
The issue on the transformation of the Department of Agrarian Reform (DAR) into the Department of Land Reform (DLR) became moot and academic, however, the
department having reverted to its former name by virtue of E.O. No. 4562 which was issued on August 23, 2005.
The Court is thus left with the sole issue of the legality of placing the Presidential Commission 3 for the Urban Poor (PCUP) under the supervision and control of the
DAR, and the National Commission on Indigenous Peoples (NCIP) under the DAR as an attached agency.
Before inquiring into the validity of the reorganization, petitioners locus standi or legal standing, inter alia,4 becomes a preliminary question.
The Office of the Solicitor General (OSG), on behalf of respondents, concedes that AMIN 5 has the requisite legal standing to file this suit as member 6 of Congress.
Petitioners find it impermissible for the Executive to intrude into the domain of the Legislature. They posit that an act of the Executive which injures the institution of
Congress causes a derivative but nonetheless substantial injury, which can be questioned by a member of Congress. 7 They add that to the extent that the powers of
Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of the powers of that institution. 8
Indeed, a member of the House of Representatives has standing to maintain inviolate the prerogatives, powers and privileges vested by the Constitution in his office. 9
The OSG questions, however, the standing of MDOI, a registered peoples organization of Teduray and Lambangian tribesfolk of (North) Upi and South Upi in the
province of Maguindanao.
As co-petitioner, MDOI alleges that it is concerned with the negative impact of NCIPs becoming an attached agency of the DAR on the processing of ancestral domain
claims. It fears that transferring the NCIP to the DAR would affect the processing of ancestral domain claims filed by its members.
Locus standi or legal standing has been defined as a personal and substantial interest in a 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. 10
It has been held that a party who assails the constitutionality of a statute must have a direct and personal interest. It must show not only that the law or any
governmental act is invalid, but also that it sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that it

1
suffers thereby in some indefinite way. It must show that it has been or is about to be denied some right or privilege to which it is lawfully entitled or that it is about to
be subjected to some burdens or penalties by reason of the statute or act complained of. 11
For a concerned party to be allowed to raise a constitutional question, it must show that (1) it has personally suffered some actual or threatened injury as a result of the
allegedly illegal conduct of the government, (2) the injury is fairly traceable to the challenged action, and (3) the injury is likely to be redressed by a favorable action. 12
An examination of MDOIs nebulous claims of "negative impact" and "probable setbacks" 13 shows that they are too abstract to be considered judicially cognizable. And
the line of causation it proffers between the challenged action and alleged injury is too attenuated.
Vague propositions that the implementation of the assailed orders will work injustice and violate the rights of its members cannot clothe MDOI with the requisite
standing. Neither would its status as a "peoples organization" vest it with the legal standing to assail the validity of the executive orders. 14
La Bugal-Blaan Tribal Association, Inc. v. Ramos,15 which MDOI cites in support of its claim to legal standing, is inapplicable as it is not similarly situated with the
therein petitioners who alleged personal and substantial injury resulting from the mining activities permitted by the assailed statute. And so is Cruz v. Secretary of
Environment and Natural Resources,16 for the indigenous peoples leaders and organizations were not the petitioners therein, who necessarily had to satisfy the locus
standi requirement, but were intervenors who sought and were allowed to be impleaded, not to assail but to defend the constitutionality of the statute.
Moreover, MDOI raises no issue of transcendental importance to justify a relaxation of the rule on legal standing. To be accorded standing on the ground of
transcendental importance, Senate of the Philippines v. Ermita17 requires that the following elements must be established: (1) the public character of the funds or other
assets involved in the case, (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of
government, and (3) the lack of any other party with a more direct and specific interest in raising the questions being raised. The presence of these elements MDOI
failed to establish, much less allege.
Francisco, Jr. v. Fernando18 more specifically declares that the transcendental importance of the issues raised must relate to the merits of the petition.
This Court, not being a venue for the ventilation of generalized grievances, must thus deny adjudication of the matters raised by MDOI.
Now, on AMINs position. AMIN charges the Executive Department with transgression of the principle of separation of powers.
Under the principle of separation of powers, Congress, the President, and the Judiciary may not encroach on fields allocated to each of them. The legislature is generally
limited to the enactment of laws, the executive to the enforcement of laws, and the judiciary to their interpretation and application to cases and controversies. The
principle presupposes mutual respect by and between the executive, legislative and judicial departments of the government and calls for them to be left alone to
discharge their duties as they see fit.19
AMIN contends that since the DAR, PCUP and NCIP were created by statutes,20 they can only be transformed, merged or attached by statutes, not by mere executive
orders.
While AMIN concedes that the executive power is vested in the President 21 who, as Chief Executive, holds the power of control of all the executive departments,
bureaus, and offices,22 it posits that this broad power of control including the power to reorganize is qualified and limited, for it cannot be exercised in a manner
contrary to law, citing the constitutional duty23 of the President to ensure that the laws, including those creating the agencies, be faithfully executed.
AMIN cites the naming of the PCUP as a presidential commission to be clearly an extension of the President, and the creation of the NCIP as an "independent agency
under the Office of the President."24 It thus argues that since the legislature had seen fit to create these agencies at separate times and with distinct mandates, the
President should respect that legislative disposition.
In fine, AMIN contends that any reorganization of these administrative agencies should be the subject of a statute.
AMINs position fails to impress.
The Constitution confers, by express provision, the power of control over executive departments, bureaus and offices in the President alone. And it lays down a
limitation on the legislative power.
The line that delineates the Legislative and Executive power is not indistinct. Legislative power is "the authority, under the Constitution, to make laws, and to alter and
repeal them." 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. The
grant of legislative power to Congress is broad, general and comprehensive. The legislative body possesses plenary power for all purposes of civil government. Any
power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it elsewhere. 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.
While Congress is vested with the power to enact laws, the President executes the laws. The executive power is vested in the President. It is generally defined as the
power to enforce and administer the laws. It is the power of carrying the laws into practical operation and enforcing their due observance.
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. 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. Corollary to the power of control, the President also has the
duty of supervising and 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.25 (Italics omitted, underscoring supplied)
The Constitutions express grant of the power of control in the President justifies an executive action to carry out reorganization measures under a broad authority of
law.26
In enacting a statute, the legislature is presumed to have deliberated with full knowledge of all existing laws and jurisprudence on the subject. 27 It is thus reasonable to
conclude that in passing a statute which places an agency under the Office of the President, it was in accordance with existing laws and jurisprudence on the Presidents
power to reorganize.
In establishing an executive department, bureau or office, the legislature necessarily ordains an executive agencys position in the scheme of administrative structure.
Such determination is primary,28 but subject to the Presidents continuing authority to reorganize the administrative structure. As far as bureaus, agencies or offices in
the executive department are concerned, the power of control may justify the President to deactivate the functions of a particular office. Or a law may expressly grant
the President the broad authority to carry out reorganization measures.29 The Administrative Code of 1987 is one such law:30
SEC. 30. Functions of Agencies under the Office of the President. Agencies under the Office of the President shall continue to operate and function in accordance with
their respective charters or laws creating them, except as otherwise provided in this Code or by law.
SEC. 31. Continuing Authority of the President to Reorganize his Office. The President, subject to the policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may
take any of the following actions:
(1) Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers
System and the Common Staff Support System, by abolishing, consolidating, or merging units thereof or transferring functions from one unit to another;
(2) Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions to the Office of the President
from other Departments and Agencies; and
(3) Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from
other departments or agencies.31 (Italics in the original; emphasis and underscoring supplied)
In carrying out the laws into practical operation, the President is best equipped to assess whether an executive agency ought to continue operating in accordance with its
charter or the law creating it. This is not to say that the legislature is incapable of making a similar assessment and appropriate action within its plenary power. The
Administrative Code of 1987 merely underscores the need to provide the President with suitable solutions to situations on hand to meet the exigencies of the service that
may call for the exercise of the power of control.
x x x The law grants the President this power in recognition of the recurring need of every President to reorganize his office "to achieve simplicity, economy and
efficiency." The Office of the President is the nerve center of the Executive Branch. To remain effective and efficient, the Office of the President must be capable of

2
being shaped and reshaped by the President in the manner he deems fit to carry out his directives and policies. After all, the Office of the President is the command post
of the President. This is the rationale behind the Presidents continuing authority to reorganize the administrative structure of the Office of the President. 32
The Office of the President consists of the Office of the President proper and the agencies under it. 33 It is not disputed that PCUP and NCIP were formed as agencies
under the Office of the President.34 The "Agencies under the Office of the President" refer to those offices placed under the chairmanship of the President, those under
the supervision and control of the President, those under the administrative supervision of the Office of the President, those attached to the Office for policy and
program coordination, and those that are not placed by law or order creating them under any special department. 35
As thus provided by law, the President may transfer any agency under the Office of the President to any other department or agency, subject to the policy in the
Executive Office and in order to achieve simplicity, economy and efficiency. Gauged against these guidelines, 36 the challenged executive orders may not be said to have
been issued with grave abuse of discretion or in violation of the rule of law.
The references in E.O. 364 to asset reform as an anti-poverty measure for social justice and to rationalization of the bureaucracy in furtherance of good government 37
encapsulate a portion of the existing "policy in the Executive Office." As averred by the OSG, the President saw it fit to streamline the agencies so as not to hinder the
delivery of crucial social reforms.38
The consolidation of functions in E.O. 364 aims to attain the objectives of "simplicity, economy and efficiency" as gathered from the provision granting PCUP and
NCIP access to the range of services provided by the DARs technical offices and support systems. 39
The characterization of the NCIP as an independent agency under the Office of the President does not remove said body from the Presidents control and supervision
with respect to its performance of administrative functions. So it has been opined:
That Congress did not intend to place the NCIP under the control of the President in all instances is evident in the IPRA itself, which provides that the decisions of the
NCIP in the exercise of its quasi-judicial functions shall be appealable to the Court of Appeals, like those of the National Labor Relations Commission (NLRC) and the
Securities and Exchange Commission (SEC). Nevertheless, the NCIP, although independent to a certain degree, was placed by Congress "under the office of the
President" and, as such, is still subject to the Presidents power of control and supervision granted under Section 17, Article VII of the Constitution with respect to its
performance of administrative functions[.]40 (Underscoring supplied)
In transferring the NCIP to the DAR as an attached agency, the President effectively tempered the exercise of presidential authority and considerably recognized that
degree of independence.
The Administrative Code of 1987 categorizes administrative relationships into (1) supervision and control, (2) administrative supervision, and (3) attachment. 41 With
respect to the third category, it has been held that an attached agency has a larger measure of independence from the Department to which it is attached than one which
is under departmental supervision and control or administrative supervision. This is borne out by the "lateral relationship" between the Department and the attached
agency. The attachment is merely for "policy and program coordination." 42 Indeed, the essential autonomous character of a board is not negated by its attachment to a
commission.43
AMIN argues, however, that there is an anachronism of sorts because there can be no policy and program coordination between conceptually different areas of reform.
It claims that the new framework subsuming agrarian reform, urban land reform and ancestral domain reform is fundamentally incoherent in view of the widely
different contexts.44 And it posits that it is a substantive transformation or reorientation that runs contrary to the constitutional scheme and policies.
AMIN goes on to proffer the concept of "ordering the law" 45 which, so it alleges, can be said of the Constitutions distinct treatment of these three areas, as reflected in
separate provisions in different parts of the Constitution. 46 It argues that the Constitution did not intend an over-arching concept of agrarian reform to encompass the two
other areas, and that how the law is ordered in a certain way should not be undermined by mere executive orders in the guise of administrative efficiency.
The Court is not persuaded.
The interplay of various areas of reform in the promotion of social justice is not something implausible or unlikely. 47 Their interlocking nature cuts across labels and
works against a rigid pigeonholing of executive tasks among the members of the Presidents official family. Notably, the Constitution inhibited from identifying and
compartmentalizing the composition of the Cabinet. In vesting executive power in one person rather than in a plural executive, the evident intention was to invest the
power holder with energy.48
AMIN takes premium on the severed treatment of these reform areas in marked provisions of the Constitution. It is a precept, however, that inferences drawn from title,
chapter or section headings are entitled to very little weight. 49 And so must reliance on sub-headings, 50 or the lack thereof, to support a strained deduction be given the
weight of helium.
Secondary aids may be consulted to remove, not to create doubt. 51 AMINs thesis unsettles, more than settles the order of things in construing the Constitution. Its
interpretation fails to clearly establish that the so-called "ordering" or arrangement of provisions in the Constitution was consciously adopted to imply a signification in
terms of government hierarchy from where a constitutional mandate can per se be derived or asserted. It fails to demonstrate that the "ordering" or layout was not
simply a matter of style in constitutional drafting but one of intention in government structuring. With its inherent ambiguity, the proposed interpretation cannot be
made a basis for declaring a law or governmental act unconstitutional.
A law has in its favor the presumption of constitutionality. For it to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution. The
ground for nullity must be clear and beyond reasonable doubt. 52 Any reasonable doubt should, following the universal rule of legal hermeneutics, be resolved in favor of
the constitutionality of a law.53
Ople v. Torres54 on which AMIN relies is unavailing. In that case, an administrative order involved a system of identification that required a "delicate adjustment of
various contending state policies" properly lodged in the legislative arena. It was declared unconstitutional for dealing with a subject that should be covered by law and
for violating the right to privacy.
In the present case, AMIN glaringly failed to show how the reorganization by executive fiat would hamper the exercise of citizens rights and privileges. It rested on the
ambiguous conclusion that the reorganization jeopardizes economic, social and cultural rights. It intimated, without expounding, that the agendum behind the issuances
is to weaken the indigenous peoples rights in favor of the mining industry. And it raised concerns about the possible retrogression in DARs performance as the added
workload may impede the implementation of the comprehensive agrarian reform program.lavvphil
AMIN has not shown, however, that by placing the NCIP as an attached agency of the DAR, the President altered the nature and dynamics of the jurisdiction and
adjudicatory functions of the NCIP concerning all claims and disputes involving rights of indigenous cultural communities and
indigenous peoples. Nor has it been shown, nay alleged, that the reorganization was made in bad faith. 55
As for the other arguments raised by AMIN which pertain to the wisdom or soundness of the executive decision, the Court finds it unnecessary to pass upon them. The
raging debate on the most fitting framework in the delivery of social services is endless in the political arena. It is not the business of this Court to join in the fray.
Courts have no judicial power to review cases involving political questions and, as a rule, will desist from taking cognizance of speculative or hypothetical cases,
advisory opinions and cases that have become moot. 56
Finally, a word on the last ground proffered for declaring the unconstitutionality of the assailed issuances that they violate Section 16, Article XIII of the
Constitution57 on the peoples right to participate in decision-making through adequate consultation mechanisms.
The framers of the Constitution recognized that the consultation mechanisms were already operating without the States action by law, such that the role of the State
would be mere facilitation, not necessarily creation of these consultation mechanisms. The State provides the support, but eventually it is the people, properly organized
in their associations, who can assert the right and pursue the objective. Penalty for failure on the part of the government to consult could only be reflected in the ballot
box and would not nullify government action.58
WHEREFORE, the petition is DISMISSED. Executive Order Nos. 364 and 379 issued on September 27, 2004 and October 26, 2004, respectively, are declared not
unconstitutional.
SO ORDERED.

3
Locus Standi
Locus standi or legal standing has been defined as a personal and substantial interest in a 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.

[A] party who assails the constitutionality of a statute must have a direct and personal interest. It must show
not only that the law or any governmental act is invalid, but also that it sustained or is in immediate danger of
sustaining some direct injury as a result of its enforcement, and not merely that it suffers thereby in some
indefinite way. It must show that it has been or is about to be denied some right or privilege to which it is
lawfully entitled or that it is about to be subjected to some burdens or penalties by reason of the statute or act
complained of. For a concerned party to be allowed to raise a constitutional question, it must show that (1) it
has personally suffered some actual or threatened injury as a result of the allegedly illegal conduct of the
government, (2) the injury is fairly traceable to the challenged action, and (3) the injury is likely to be
redressed by a favorable action.

be accorded standing on the ground of transcendental importance, Senate of the Philippines v. Ermita [G.R.
No. 169777, April 20, 2006, 488 SCRA 1] requires that the following elements must be established: (1) the
public character of the funds or other assets involved in the case, (2) the presence of a clear case of disregard
of a constitutional or statutory prohibition by the public respondent agency or instrumentality of government,
and (3) the lack of any other party with a more direct and specific interest in raising the questions being
raised. [Moreover,] Francisco, Jr. v. Fernando [G.R. No. 166501, November 16, 2006, 507 SCRA 173] more
specifically declares that the transcendental importance of the issues raised must relate to the merits of the
petition.

Under the principle of separation of powers, Congress, the President, and the Judiciary may not encroach on
fields allocated to each of them. The legislature is generally limited to the enactment of laws, the executive to
the enforcement of laws, and the judiciary to their interpretation and application to cases and controversies.
The principle presupposes mutual respect by and between the executive, legislative and judicial departments
of the government and calls for them to be left alone to discharge their duties as they see fit.

Reorganization
The Constitution confers, by express provision, the power of control over executive departments, bureaus and
offices in the President alone. And it lays down a limitation on the legislative power. The Constitutions
express grant of the power of control in the President justifies an executive action to carry out reorganization
measures under a broad authority of law.

In enacting a statute, the legislature is presumed to have deliberated with full knowledge of all existing laws
and jurisprudence on the subject. It is thus reasonable to conclude that in passing a statute which places an
agency under the Office of the President, it was in accordance with existing laws and jurisprudence on the
Presidents power to reorganize
In establishing an executive department, bureau or office, the legislature necessarily ordains an executive
agencys position in the scheme of administrative structure. Such determination is primary, but subject to the
Presidents continuing authority to reorganize the administrative structure. As far as bureaus, agencies or
offices in the executive department are concerned, the power of control may justify the President to deactivate
the functions of a particular office. Or a law may expressly grant the President the broad authority to carry out
reorganization measures. The Administrative Code of 1987 is one such law.
As provided by law, the President may transfer any agency under the Office of the President to any other
department or agency, subject to the policy in the Executive Office and in order to achieve simplicity,
economy and efficiency.

G.R. No. 152845 August 5, 2003

DRIANITA BAGAOISAN, FELY MADRIAGA, SHIRLY TAGABAN, RICARDO SARANDI, SUSAN IMPERIAL, BENJAMIN DEMDEM, RODOLFO
DAGA, EDGARDO BACLIG, GREGORIO LABAYAN, HILARIO JEREZ, and MARIA CORAZON CUANANG, Petitioners,
vs.
NATIONAL TOBACCO ADMINISTRATION, represented by ANTONIO DE GUZMAN and PERLITA BAULA, Respondents.
DECISION
VITUG, J.:
President Joseph Estrada issued on 30 September 1998 Executive Order No. 29, entitled "Mandating the Streamlining of the National Tobacco Administration (NTA),"
a government agency under the Department of Agriculture. The order was followed by another issuance, on 27 October 1998, by President Estrada of Executive Order
No. 36, amending Executive Order No. 29, insofar as the new staffing pattern was concerned, by increasing from four hundred (400) to not exceeding seven hundred
fifty (750) the positions affected thereby. In compliance therewith, the NTA prepared and adopted a new Organization Structure and Staffing Pattern (OSSP) which, on
29 October 1998, was submitted to the Office of the President.
On 11 November 1998, the rank and file employees of NTA Batac, among whom included herein petitioners, filed a letter-appeal with the Civil Service Commission
and sought its assistance in recalling the OSSP. On 04 December 1998, the OSSP was approved by the Department of Budget and Management (DBM) subject to
certain revisions. On even date, the NTA created a placement committee to assist the appointing authority in the selection and placement of permanent personnel in the

4
revised OSSP. The results of the evaluation by the committee on the individual qualifications of applicants to the positions in the new OSSP were then disseminated and
posted at the central and provincial offices of the NTA.
On 10 June 1996, petitioners, all occupying different positions at the NTA office in Batac, Ilocos Norte, received individual notices of termination of their employment
with the NTA effective thirty (30) days from receipt thereof. Finding themselves without any immediate relief from their dismissal from the service, petitioners filed a
petition for certiorari, prohibition and mandamus, with prayer for preliminary mandatory injunction and/or temporary restraining order, with the Regional Trial Court
(RTC) of Batac, Ilocos Norte, and prayed -
"1) that a restraining order be immediately issued enjoining the respondents from enforcing the notice of termination addressed individually to the petitioners
and/or from committing further acts of dispossession and/or ousting the petitioners from their respective offices;
"2) that a writ of preliminary injunction be issued against the respondents, commanding them to maintain the status quo to protect the rights of the petitioners
pending the determination of the validity of the implementation of their dismissal from the service; and
"3) that, after trial on the merits, judgment be rendered declaring the notice of termination of the petitioners illegal and the reorganization null and void and
ordering their reinstatement with backwages, if applicable, commanding the respondents to desist from further terminating their services, and making the
injunction permanent."1
The RTC, on 09 September 2000, ordered the NTA to appoint petitioners in the new OSSP to positions similar or comparable to their respective former assignments. A
motion for reconsideration filed by the NTA was denied by the trial court in its order of 28 February 2001. Thereupon, the NTA filed an appeal with the Court of
Appeals, raising the following issues:
"I. Whether or not respondents submitted evidence as proof that petitioners, individually, were not the best qualified and most deserving among the
incumbent applicant-employees.
"II. Whether or not incumbent permanent employees, including herein petitioners, automatically enjoy a preferential right and the right of first refusal to
appointments/reappointments in the new Organization Structure And Staffing Pattern (OSSP) of respondent NTA.
"III. Whether or not respondent NTA in implementing the mandated reorganization pursuant to E.O. No. 29, as amended by E.O. No. 36, strictly adhere to
the implementing rules on reorganization, particularly RA 6656 and of the Civil Service Commission Rules on Government Reorganization.
"IV. Whether or not the validity of E.O. Nos. 29 and 36 can be put in issue in the instant case/appeal." 2
On 20 February 2002, the appellate court rendered a decision reversing and setting aside the assailed orders of the trial court.
Petitioners went to this Court to assail the decision of the Court of Appeals, contending that -
"I. The Court of Appeals erred in making a finding that went beyond the issues of the case and which are contrary to those of the trial court and that it
overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion;
"II. The Court of Appeals erred in upholding Executive Order Nos. 29 and 36 of the Office of the President which are mere administrative issuances which
do not have the force and effect of a law to warrant abolition of positions and/or effecting total reorganization;
"III. The Court of Appeals erred in holding that petitioners removal from the service is in accordance with law;
"IV. The Court of Appeals erred in holding that respondent NTA was not guilty of bad faith in the termination of the services of petitioners; (and)
"V. The Court of Appeals erred in ignoring case law/jurisprudence in the abolition of an office." 3
In its resolution of 10 July 2002, the Court required the NTA to file its comment on the petition. On 18 November 2002, after the NTA had filed its comment of 23
September 2002, the Court issued its resolution denying the petition for failure of petitioners to sufficiently show any reversible error on the part of the appellate court
in its challenged decision so as to warrant the exercise by this Court of its discretionary appellate jurisdiction. A motion for reconsideration filed by petitioners was
denied in the Courts resolution of 20 January 2002.
On 21 February 2003, petitioners submitted a "Motion to Admit Petition For En Banc Resolution" of the case allegedly to address a basic question, i.e., "the legal and
constitutional issue on whether the NTA may be reorganized by an executive fiat, not by legislative action." 4 In their "Petition for an En Banc Resolution" petitioners
would have it that -
"1. The Court of Appeals decision upholding the reorganization of the National Tobacco Administration sets a dangerous precedent in that:
"a) A mere Executive Order issued by the Office of the President and procured by a government functionary would have the effect of a blanket
authority to reorganize a bureau, office or agency attached to the various executive departments;
b) The President of the Philippines would have the plenary power to reorganize the entire government Bureaucracy through the issuance of an
Executive Order, an administrative issuance without the benefit of due deliberation, debate and discussion of members of both chambers of the
Congress of the Philippines;
c) The right to security of tenure to a career position created by law or statute would be defeated by the mere adoption of an Organizational
Structure and Staffing Pattern issued pursuant to an Executive Order which is not a law and could thus not abolish an office created by law;
"2. The case law on abolition of an office would be disregarded, ignored and abandoned if the Court of Appeals decision subject matter of this Petition would
remain undisturbed and untouched. In other words, previous doctrines and precedents of this Highest Court would in effect be reversed and/or modified with
the Court of Appeals judgment, should it remain unchallenged.
"3. Section 4 of Executive Order No. 245 dated July 24, 1987 (Annex D, Petition), issued by the Revolutionary government of former President Corazon
Aquino, and the law creating NTA, which provides that the governing body of NTA is the Board of Directors, would be rendered meaningless, ineffective
and a dead letter law because the challenged NTA reorganization which was erroneously upheld by the Court of Appeals was adopted and implemented by
then NTA Administrator Antonio de Guzman without the corresponding authority from the Board of Directors as mandated therein. In brief, the
reorganization is an ultra vires act of the NTA Administrator.
"4. The challenged Executive Order No. 29 issued by former President Joseph Estrada but unsigned by then Executive Secretary Ronaldo Zamora would in
effect be erroneously upheld and given legal effect as to supersede, amend and/or modify Executive Order No. 245, a law issued during the Freedom
Constitution of President Corazon Aquino. In brief, a mere executive order would amend, supersede and/or render ineffective a law or statute." 5
In order to allow the parties a full opportunity to ventilate their views on the matter, the Court ultimately resolved to hear the parties in oral argument. Essentially, the
core question raised by them is whether or not the President, through the issuance of an executive order, can validly carry out the reorganization of the NTA.
Notwithstanding the apparent procedural lapse on the part of petitioner to implead the Office of the President as party respondent pursuant to Section 7, Rule 3, of the
1997 Revised Rules of Civil Procedure, 6 this Court resolved to rule on the merits of the petition.
Buklod ng Kawaning EIIB vs. Zamora 7 ruled that the President, based on existing laws, had the authority to carry out a reorganization in any branch or agency of the
executive department. In said case, Buklod ng Kawaning EIIB challenged the issuance, and sought the nullification, of Executive Order No. 191 (Deactivation of the
Economic Intelligence and Investigation Bureau) and Executive Order No. 223 (Supplementary Executive Order No. 191 on the Deactivation of the Economic
Intelligence and Investigation Bureau and for Other Matters) on the ground that they were issued by the President with grave abuse of discretion and in violation of their
constitutional right to security of tenure. The Court explained:
"The general rule has always been that the power to abolish a public office is lodged with the legislature. This proceeds from the legal precept that the power to create
includes the power to destroy. A public office is either created by the Constitution, by statute, or by authority of law. Thus, except where the office was created by the
Constitution itself, it may be abolished by the same legislature that brought it into existence.
"The exception, however, is that as far as bureaus, agencies or offices in the executive department are concerned, the Presidents power of control may justify him to
inactivate the functions of a particular office, or certain laws may grant him the broad authority to carry out reorganization measures. The case in point is Larin v.
Executive Secretary [280 SCRA 713]. In this case, it was argued that there is no law which empowers the President to reorganize the BIR. In decreeing otherwise, this
Court sustained the following legal basis, thus:
"`Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR.

5
`We do not agree.
`x x x x x x
`Section 48 of R.A. 7645 provides that:
``Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch. The heads of departments, bureaus and offices and agencies are hereby
directed to identify their respective activities which are no longer essential in the delivery of public services and which may be scaled down, phased out or abolished,
subject to civil service rules and regulations. x x x. Actual scaling down, phasing out or abolition of the activities shall be effected pursuant to Circulars or Orders
issued for the purpose by the Office of the President.
`Said provision clearly mentions the acts of `scaling down, phasing out and abolition of offices only and does not cover the creation of offices or transfer of functions.
Nevertheless, the act of creating and decentralizing is included in the subsequent provision of Section 62 which provides that:
``Sec. 62. Unauthorized organizational changes. Unless otherwise created by law or directed by the President of the Philippines, no organizational unit or changes in
key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act.
`The foregoing provision evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency
concerned.
`x x x x x x
`Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states:
``Sec. 20. Residual Powers. Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are
provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law.
`This provision speaks of such other powers vested in the President under the law. What law then gives him the power to reorganize? It is Presidential Decree No. 1772
which amended Presidential Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national
government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services
and activities and to standardize salaries and materials. The validity of these two decrees are unquestionable. The 1987 Constitution clearly provides that `all laws,
decrees, executive orders, proclamations, letter of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until
amended, repealed or revoked. So far, there is yet no law amending or repealing said decrees.
"Now, let us take a look at the assailed executive order.
"In the whereas clause of E.O. No. 191, former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General
Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted in Larin, thus:
"`Sec. 77. Organized Changes. Unless otherwise provided by law or directed by the President of the Philippines, no changes in key positions or organizational units in
any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act.
"We adhere to the x x x ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency under
the executive structure. Such a ruling further finds support in Section 78 of Republic Act No. 8760. Under this law, the heads of departments, bureaus, offices and
agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of this respective mandates, missions, objectives, functions,
programs, projects, activities and systems and procedures; (b) identify activities which are no longer essential in the delivery of public services and which may be scaled
down, phased-out or abolished; and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies.
Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to
Circulars or Orders issued for the purpose by the Office of the President. The law has spoken clearly. We are left only with the duty to sustain.
"But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. We must not
lose sight of the very source of the power that which constitutes an express grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known
as the Administrative Code of 1987), the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have
the continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may transfer the functions of other Departments or
Agencies to the Office of the President. In Canonizado vs. Aguirre [323 SCRA 312], we ruled that reorganization involves the reduction of personnel, consolidation of
offices, or abolition thereof by reason of economy or redundancy of functions. It takes place when there is an alteration of the existing structure of government offices
or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the Department of Finance. It falls under the
Office of the President. Hence, it is subject to the Presidents continuing authority to reorganize.
"It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department, what is then left for
us to resolve is whether or not the reorganization is valid. In this jurisdiction, reorganizations have been regarded as valid provided they are pursued in good faith.
Reorganization is carried out in `good faith if it is for the purpose of economy or to make bureaucracy more efficient. Pertinently, Republic Act No. 6656 provides for
the circumstances which may be considered as evidence of bad faith in the removal of civil service employees made as a result of reorganization, to wit: (a) where there
is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) where an office is abolished and another
performing substantially the same functions is created; (c) where incumbents are replaced by those less qualified in terms of status of appointment, performance and
merit; (d) where there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the
original offices, and (e) where the removal violates the order of separation." 8
The Court of Appeals, in its now assailed decision, has found no evidence of bad faith on the part of the NTA; thus -
"In the case at bar, we find no evidence that the respondents committed bad faith in issuing the notices of non-appointment to the petitioners.
"Firstly, the number of positions in the new staffing pattern did not increase. Rather, it decreased from 1,125 positions to 750. It is thus natural that ones
position may be lost through the removal or abolition of an office.
"Secondly, the petitioners failed to specifically show which offices were abolished and the new ones that were created performing substantially the same
functions.
"Thirdly, the petitioners likewise failed to prove that less qualified employees were appointed to the positions to which they applied.
"x x x xxx xxx
"Fourthly, the preference stated in Section 4 of R.A. 6656, only means that old employees should be considered first, but it does not necessarily follow that
they should then automatically be appointed. This is because the law does not preclude the infusion of new blood, younger dynamism, or necessary talents
into the government service, provided that the acts of the appointing power are bonafide for the best interest of the public service and the person chosen has
the needed qualifications."9
These findings of the appellate court are basically factual which this Court must respect and be held bound.
It is important to emphasize that the questioned Executive Orders No. 29 and No. 36 have not abolished the National Tobacco Administration but merely
mandated its reorganization through the streamlining or reduction of its personnel. Article VII, Section 17,10 of the Constitution, expressly grants the President
control of all executive departments, bureaus, agencies and offices which may justify an executive action to inactivate the functions of a particular office or to carry out
reorganization measures under a broad authority of law.11 Section 78 of the General Provisions of Republic Act No. 8522 (General Appropriations Act of FY 1998) has
decreed that the President may direct changes in the organization and key positions in any department, bureau or agency pursuant to Article VI, Section 25, 12 of the
Constitution, which grants to the Executive Department the authority to recommend the budget necessary for its operation. Evidently, this grant of power includes the
authority to evaluate each and every government agency, including the determination of the most economical and efficient staffing pattern, under the Executive
Department.
In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo D. Zamora, in his capacity as the Executive Secretary, et al.,13 this Court has had occasion to also
delve on the Presidents power to reorganize the Office of the President under Section 31(2) and (3) of Executive Order No. 292 and the power to reorganize the Office
of the President Proper. The Court has there observed:

6
"x x x. Under Section 31(1) of EO 292, the President can reorganize the Office of the President Proper by abolishing, consolidating or merging units, or by transferring
functions from one unit to another. In contrast, under Section 31(2) and (3) of EO 292, the Presidents power to reorganize offices outside the Office of the President
Proper but still within the Office of the President is limited to merely transferring functions or agencies from the Office of the President to Departments or Agencies,
and vice versa."
The provisions of Section 31, Book III, Chapter 10, of Executive Order No. 292 (Administrative Code of 1987), above-referred to, reads thusly:
"SEC. 31. Continuing Authority of the President to Reorganize his Office. The President, subject to the policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may
take any of the following actions:
"(1) Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers
System and the Common Staff Support System, by abolishing, consolidating or merging units thereof or transferring functions from one unit to another;
"(2) Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions to the Office of the President
from other Departments and Agencies; and
"(3) Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from
other departments and agencies."
The first sentence of the law is an express grant to the President of a continuing authority to reorganize the administrative structure of the Office of the President. The
succeeding numbered paragraphs are not in the nature of provisos that unduly limit the aim and scope of the grant to the President of the power to reorganize but are to
be viewed in consonance therewith. Section 31(1) of Executive Order No. 292 specifically refers to the Presidents power to restructure the internal organization of the
Office of the President Proper, by abolishing, consolidating or merging units hereof or transferring functions from one unit to another, while Section 31(2) and (3)
concern executive offices outside the Office of the President Proper allowing the President to transfer any function under the Office of the President to any other
Department or Agency and vice-versa, and the transfer of any agency under the Office of the President to any other department or agency and vice-versa. 14
In the present instance, involving neither an abolition nor transfer of offices, the assailed action is a mere reorganization under the general provisions of the law
consisting mainly of streamlining the NTA in the interest of simplicity, economy and efficiency. It is an act well within the authority of President motivated and carried
out, according to the findings of the appellate court, in good faith, a factual assessment that this Court could only but accept. 15
In passing, relative to petitioners "Motion for an En Banc Resolution of the Case," it may be well to remind counsel, that the Court En Banc is not an appellate tribunal
to which appeals from a Division of the Court may be taken. A Division of the Court is the Supreme Court as fully and veritably as the Court En Banc itself and a
decision of its Division is as authoritative and final as a decision of the Court En Banc. Referrals of cases from a Division to the Court En Banc do not take place as just
a matter of routine but only on such specified grounds as the Court in its discretion may allow.16
WHEREFORE, the Motion to Admit Petition for En Banc resolution and the Petition for an En Banc Resolution are DENIED for lack of merit. Let entry of judgment
be made in due course. No costs.
SO ORDERED.

FACTS:
1. The petitioner was terminated from there position in the national tobacco administration as a result of the executive order issued by president Estradawhic
mandates for the stream lining of the national tobacco administration, a government agency under the department of agriculture.
2. The petitioners filed a letter of appeal to the civil service commission to recall the ossp.
3. Petitioner all file a petition for certiorari with prohibition an mandamus with prayer for preliminary mandatory injunction and a temporary restraining
order with the regional trial court of Batak to prevent the respondent from enforcing the notice of termination and from austing the petitioners in there
respective offices.
4. The regional trial court issued an order ordering the national tobacco administration to appoint the petitioner to the osspto position similar to the
one that they hold before.
5. The national tobacco administration appealed to the court of appeals who reversed the decision of the RTC.
6. Petitioner appealed to the supreme court.
ISSUE:
Whether or not, the reorganization of the national tobacco administration is valid true issuance of executive orderby the president.
According to the supreme court,The president has the power to reorganized an office to achieve simplicity ,economy and efficiency as provided under executive
order 292 sec. 31 and section 48 of RA 7645 which provides that activities of executive agencies may be scaled down if it is no longer essential for the
delivery of public service.

WHEREFORE, the Motion to Admit Petition for En Banc resolution and the Petition for an En Banc Resolution are DENIED for lack of merit. Let entry of judgment
be made in due course. No costs.

G.R. No. 150974 June 29, 2007

KAPISANAN NG MGA KAWANI NG ENERGY REGULATORY BOARD, petitioner,
vs.
COMMISSIONER FE B. BARIN, DEPUTY COMMISSIONERS CARLOS R. ALINDADA, LETICIA V. IBAY, OLIVER B. BUTALID, and MARY ANNE B.
COLAYCO, of the ENERGY REGULATORY COMMISSION, respondent.
DECISION
CARPIO, J.:
The Case
This is a special civil action for certiorari and prohibition 1 of the selection and appointment of employees of the Energy Regulatory Commission (ERC) by the ERC
Board of Commissioners.
Petitioner Kapisanan ng mga Kawani ng Energy Regulatory Board (KERB) seeks to declare Section 38 of Republic Act No. 9136 (RA 9136), which abolished the
Energy Regulatory Board (ERB) and created the ERC, as unconstitutional and to prohibit the ERC Commissioners from filling up the ERCs plantilla.
The Facts
RA 9136, popularly known as EPIRA (for Electric Power Industry Reform Act of 2001), was enacted on 8 June 2001 and took effect on 26 June 2001. Section 38 of RA
9136 provides for the abolition of the ERB and the creation of the ERC. The pertinent portions of Section 38 read:
Creation of the Energy Regulatory Commission. There is hereby created an independent, quasi-judicial regulatory board to be named the Energy Regulatory
Commission (ERC). For this purpose, the existing Energy Regulatory Board (ERB) created under Executive Order No. 172, as amended, is hereby abolished.
The Commission shall be composed of a Chairman and four (4) members to be appointed by the President of the Philippines. x x x
Within three (3) months from the creation of the ERC, the Chairman shall submit for the approval of the President of the Philippines the new organizational structure
and plantilla positions necessary to carry out the powers and functions of the ERC.
xxxx

7
The Chairman and members of the Commission shall assume office at the beginning of their terms: Provided, That, if upon the effectivity of this Act, the Commission
has not been constituted and the new staffing pattern and plantilla positions have not been approved and filled-up, the current Board and existing personnel of ERB shall
continue to hold office.
The existing personnel of the ERB, if qualified, shall be given preference in the filling up of plantilla positions created in the ERC, subject to existing civil service rules
and regulations.
At the time of the filing of this petition, the ERC was composed of Commissioner Fe B. Barin and Deputy Commissioners Carlos R. Alindada, Leticia V. Ibay, Oliver B.
Butalid, and Mary Anne B. Colayco (collectively, Commissioners). The Commissioners assumed office on 15 August 2001. Pursuant to Section 38 of RA 9136, the
Commissioners issued the proposed Table of Organization, Staffing Pattern, and Salary Structure on 25 September 2001 which the President of the Philippines approved
on 13 November 2001. Meanwhile, KERB submitted to the Commissioners its Resolution No. 2001-02 on 13 September 2001. Resolution No. 2001-02 requested the
Commissioners for an opportunity to be informed on the proposed plantilla positions with their equivalent qualification standards.
On 17 October 2001, the Commissioners issued the guidelines for the selection and hiring of ERC employees. A portion of the guidelines reflects the Commissioners
view on the selection and hiring of the ERC employees vis-a-vis Civil Service rules, thus:
Since R.A. 9136 has abolished the Energy Regulatory Board (ERB), it is the view of the Commission that the provisions of Republic Act No. 6656 (An Act to Protect
the Security of [Tenure of] Civil Service Officers and Employees in the Implementation of Government Reorganization) will not directly apply to ERCs current efforts
to establish a new organization. Civil Service laws, rules and regulations, however, will have suppletory application to the extent possible in regard to the selection and
placement of employees in the ERC.2 (Emphasis supplied)
On 5 November 2005, KERB sent a letter to the Commissioners stating the KERB members objection to the Commissioners stand that Civil Service laws, rules and
regulations have suppletory application in the selection and placement of the ERC employees. KERB asserted that RA 9136 did not abolish the ERB or change the
ERBs character as an economic regulator of the electric power industry. KERB insisted that RA 9136 merely changed the ERBs name to the ERC and expanded the
ERBs functions and objectives. KERB sent the Commissioners yet another letter on 13 November 2001. KERB made a number of requests: (1) the issuance of a formal
letter related to the date of filing of job applications, including the use of Civil Service application form no. 212; (2) the creation of a placement/recruitment committee
and setting guidelines relative to its functions, without prejudice to existing Civil Service rules and regulations; and (3) copies of the plantilla positions and their
corresponding qualification standards duly approved by either the President of the Philippines or the Civil Service Commission (CSC).
Commissioner Barin replied to KERBs letter on 15 November 2001. She stated that Civil Service application form no. 212 and the ERC-prescribed application format
are substantially the same. Furthermore, the creation of a placement/recruitment committee is no longer necessary because there is already a prescribed set of guidelines
for the recruitment of personnel. The ERC hired an independent consultant to administer the necessary tests for the technical and managerial levels. Finally, the ERC
already posted the plantilla positions, which prescribe higher standards, as approved by the Department of Budget and Management. Commissioner Barin stated that
positions in the ERC do not need the prior approval of the CSC, as the ERC is only required to submit the qualification standards to the CSC.
On 5 December 2001, the ERC published a classified advertisement in the Philippine Star. Two days later, the CSC received a list of vacancies and qualification
standards from the ERC. The ERC formed a Selection Committee to process all applications.
KERB, fearful of the uncertainty of the employment status of its members, filed the present petition on 20 December 2001. KERB later filed an Urgent Ex Parte Motion
to Enjoin Termination of Petitioner ERB Employees on 2 January 2002. However, before the ERC received KERBs pleadings, the Selection Committee already
presented its list of proposed appointees to the Commissioners.
In their Comment, the Commissioners describe the status of the ERB employees appointment in the ERC as follows:
As of February 1, 2002, of the two hundred twelve (212) ERB employees, one hundred thirty eighty [sic] (138) were rehired and appointed to ERC plantilla positions
and sixty six (66) opted to retire or be separated from the service. Those who were rehired and those who opted to retire or be separated constituted about ninety six
(96%) percent of the entire ERB employees. The list of the ERB employees appointed to new positions in the ERC is attached hereto as Annex 1. Only eight (8) ERB
employees could not be appointed to new positions due to the reduction of the ERC plantilla and the absence of positions appropriate to their respective qualifications
and skills. The appropriate notice was issued to each of them informing them of their separation from the service and assuring them of their entitlement to "separation
pay and other benefits in accordance with existing laws." 3
The Issues
KERB raises the following issues before this Court:
1. Whether Section 38 of RA 9136 abolishing the ERB is constitutional; and
2. Whether the Commissioners of the ERC were correct in disregarding and considering merely suppletory in character the protective mantle of RA 6656 as to the ERB
employees or petitioner in this case.4
The Ruling of the Court
The petition has no merit.
We disregard the procedural defects in the petition, such as KERBs personality to file the petition on behalf of its alleged members and Elmar Agirs authority to
institute the action, because of the demands of public interest. 5
Constitutionality of the ERBs Abolition
and the ERCs Creation
All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there must be a clear and unequivocal breach of the Constitution. KERB failed
to show any breach of the Constitution.
A public office is created by the Constitution or by law or by an officer or tribunal to which the power to create the office has been delegated by the legislature. 6 The
power to create an office carries with it the power to abolish. President Corazon C. Aquino, then exercising her legislative powers, created the ERB by issuing
Executive Order No. 172 on 8 May 1987.
The question of whether a law abolishes an office is a question of legislative intent. There should not be any controversy if there is an explicit declaration of abolition in
the law itself.7 Section 38 of RA 9136 explicitly abolished the ERB. However, abolition of an office and its related positions is different from removal of an incumbent
from his office. Abolition and removal are mutually exclusive concepts. From a legal standpoint, there is no occupant in an abolished office. Where there is no
occupant, there is no tenure to speak of. Thus, impairment of the constitutional guarantee of security of tenure does not arise in the abolition of an office. On the other
hand, removal implies that the office and its related positions subsist and that the occupants are merely separated from their positions. 8
A valid order of abolition must not only come from a legitimate body, it must also be made in good faith. An abolition is made in good faith when it is not made for
political or personal reasons, or when it does not circumvent the constitutional security of tenure of civil service employees. 9 Abolition of an office may be brought
about by reasons of economy, or to remove redundancy of functions, or a clear and explicit constitutional mandate for such termination of employment. 10 Where one
office is abolished and replaced with another office vested with similar functions, the abolition is a legal nullity. 11 When there is a void abolition, the incumbent is
deemed to have never ceased holding office.
KERB asserts that there was no valid abolition of the ERB but there was merely a reorganization done in bad faith. Evidences of bad faith are enumerated in Section 2
of Republic Act No. 6656 (RA 6656),12 Section 2 of RA 6656 reads:
No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exists when, pursuant
to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the
exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as
evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party:
(a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned;
(b) Where an office is abolished and another performing substantially the same functions is created;
(c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit;

8
(d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same function as the original
offices;
(e) Where the removal violates the order of separation provided in Section 3 hereof.
KERB claims that the present case falls under the situation described in Section 2(b) of RA 6656. We thus need to compare the provisions enumerating the powers and
functions of the ERB and the ERC to see whether they have substantially the same functions. Under Executive Order No. 172, the ERB has the following powers and
functions:
SEC. 3. Jurisdiction, Powers and Functions of the Board. When warranted and only when public necessity requires, the Board may regulate the business of
importing, exporting, re-exporting, shipping, transporting, processing, refining, marketing and distributing energy resources. Energy resource means any substance or
phenomenon which by itself or in combination with others, or after processing or refining or the application to it of technology, emanates, generates or causes the
emanation or generation of energy, such as but not limited to, petroleum or petroleum products, coal, marsh gas, methane gas, geothermal and hydroelectric sources of
energy, uranium and other similar radioactive minerals, solar energy, tidal power, as well as non-conventional existing and potential sources.
The Board shall, upon proper notice and hearing, exercise the following, among other powers and functions:
(a) Fix and regulate the prices of petroleum products;
(b) Fix and regulate the rate schedule or prices of piped gas to be charged by duly franchised gas companies which distribute gas by means of underground pipe system;
(c) Fix and regulate the rates of pipeline concessionaires under the provisions of Republic Act No. 387, as amended, otherwise known as the "Petroleum Act of 1949,"
as amended by Presidential Decree No. 1700;
(d) Regulate the capacities of new refineries or additional capacities of existing refineries and license refineries that may be organized after the issuance of this
Executive Order, under such terms and conditions as are consistent with the national interest;
(e) Whenever the Board has determined that there is a shortage of any petroleum product, or when public interest so requires, it may take such steps as it may consider
necessary, including the temporary adjustment of the levels of prices of petroleum products and the payment to the Oil Price Stabilization Fund created under
Presidential Decree No. 1956 by persons or entities engaged in the petroleum industry of such amounts as may be determined by the Board, which will enable the
importer to recover its cost of importation.
SEC. 4. Reorganized or Abolished Agency. (a) The Board of Energy is hereby reconstituted into the Energy Regulatory Board, and the formers powers and functions
under Republic Act No. 6173, as amended by Presidential Decree No. 1208, as amended, are transferred to the latter.
(b) The regulatory and adjudicatory powers and functions exercised by the Bureau of Energy Utilization under Presidential Decree No. 1206, as amended, are
transferred to the Board, the provisions of Executive Order No. 131 notwithstanding.
SEC. 5. Other Transferred Powers and Functions. The power of the Land Transportation Commission to determine, fix and/or prescribe rates or charges pertaining
to the hauling of petroleum products are transferred to the Board. The power to fix and regulate the rates or charges pertinent to shipping or transporting of petroleum
products shall also be exercised by the Board.
The foregoing transfer of powers and functions shall include applicable funds and appropriations, records, equipment, property and such personnel as may be necessary;
Provided, That with reference to paragraph (b) of Section 4 hereof, only such amount of funds and appropriations of the Bureau of Energy Utilization, as well as only
the personnel thereof who are completely or primarily involved in the exercise by said Bureau of its regulatory and adjudicatory powers and functions, shall be affected
by such transfer: Provided, further, That the funds and appropriations as well as the records, equipment, property and all personnel of the reorganized Board of Energy
shall be transferred to the Energy Regulatory Board.
SEC. 6. Power to Promulgate Rules and Perform Other Acts. The Board shall have the power to promulgate rules and regulations relevant to procedures governing
hearings before it and enforce compliance with any rule, regulation, order or other requirements: Provided, That said rules and regulations shall take effect fifteen (15)
days after publication in the Official Gazette. It shall also perform such other acts as may be necessary or conducive to the exercise of its powers and functions, and the
attainment of the purposes of this Order.
On the other hand, Section 43 of RA 9136 enumerates the basic functions of the ERC.
SEC. 43. Functions of the ERC. The ERC shall promote competition, encourage market development, ensure customer choice and discourage/penalize abuse of
market power in the restructured electricity industry. In appropriate cases, the ERC is authorized to issue cease and desist order after due notice and hearing. Towards
this end, it shall be responsible for the following key functions in the restructured industry:
(a) Enforce the implementing rules and regulations of this Act;
(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in accordance with law, a National Grid Code and a Distribution Code which shall
include, but not limited to, the following:
(i) Performance standards for TRANSCO O & M Concessionaire, distribution utilities and suppliers: Provided, That in the establishment of the performance standards,
the nature and function of the entities shall be considered; and
(ii) Financial capability standards for the generating companies, the TRANSCO, distribution utilities and suppliers: Provided, That in the formulation of the financial
capability standards, the nature and function of the entity shall be considered: Provided, further, That such standards are set to ensure that the electric power industry
participants meet the minimum financial standards to protect the public interest. Determine, fix, and approve, after due notice and public hearings the universal charge,
to be imposed on all electricity end-users pursuant to Section 34 hereof;
(c) Enforce the rules and regulations governing the operations of the electricity spot market and the activities of the spot market operator and other participants in the
spot market, for the purpose of ensuring a greater supply and rational pricing of electricity;
(d) Determine the level of cross subsidies in the existing retail rate until the same is removed pursuant to Section 73 hereof;
(e) Amend or revoke, after due notice and hearing, the authority to operate of any person or entity which fails to comply with the provisions hereof, the IRR or any
order or resolution of the ERC. In the event a divestment is required, the ERC shall allow the affected party sufficient time to remedy the infraction or for an orderly
disposal, but shall in no case exceed twelve (12) months from the issuance of the order;
(f) In the public interest, establish and enforce a methodology for setting transmission and distribution wheeling rates and retail rates for the captive market of a
distribution utility, taking into account all relevant considerations, including the efficiency or inefficiency of the regulated entities. The rates must be such as to allow
the recovery of just and reasonable costs and a reasonable return on rate base (RORB) to enable the entity to operate viably. The ERC may adopt alternative forms of
internationally-accepted rate setting methodology as it may deem appropriate. The rate-setting methodology so adopted and applied must ensure a reasonable price of
electricity. The rates prescribed shall be non-discriminatory. To achieve this objective and to ensure the complete removal of cross subsidies, the cap on the recoverable
rate of system losses prescribed in Section 10 of Republic Act No. 7832, is hereby amended and shall be replaced by caps which shall be determined by the ERC based
on load density, sales mix, cost of service, delivery voltage and other technical considerations it may promulgate. The ERC shall determine such form of rate-setting
methodology, which shall promote efficiency. In case the rate setting methodology used is RORB, it shall be subject to the following guidelines:
(i) For purposes of determining the rate base, the TRANSCO or any distribution utility may be allowed to revalue its eligible assets not more than once every three (3)
years by an independent appraisal company: Provided, however, That ERC may give an exemption in case of unusual devaluation: Provided, further, That the ERC
shall exert efforts to minimize price shocks in order to protect the consumers;
(ii) Interest expenses are not allowable deductions from permissible return on rate base;
(iii) In determining eligible cost of services that will be passed on to the end-users, the ERC shall establish minimum efficiency performance standards for the
TRANSCO and distribution utilities including systems losses, interruption frequency rates, and collection efficiency;
(iv) Further, in determining rate base, the TRANSCO or any distribution utility shall not be allowed to include management inefficiencies like cost of project delays not
excused by force majeure, penalties and related interest during construction applicable to these unexcused delays; and

9
(v) Any significant operating costs or project investments of TRANSCO and distribution utilities which shall become part of the rate base shall be subject to the
verification of the ERC to ensure that the contracting and procurement of the equipment, assets and services have been subjected to transparent and accepted industry
procurement and purchasing practices to protect the public interest.
(g) Three (3) years after the imposition of the universal charge, ensure that the charges of the TRANSCO or any distribution utility shall bear no cross subsidies between
grids, within grids, or between classes of customers, except as provided herein;
(h) Review and approve any changes on the terms and conditions of service of the TRANSCO or any distribution utility;
(i) Allow the TRANSCO to charge user fees for ancillary services to all electric power industry participants or self-generating entities connected to the grid. Such fees
shall be fixed by the ERC after due notice and public hearing;
(j) Set a lifeline rate for the marginalized end-users;
(k) Monitor and take measures in accordance with this Act to penalize abuse of market power, cartelization, and anti-competitive or discriminatory behavior by any
electric power industry participant;
(l) Impose fines or penalties for any non-compliance with or breach of this Act, the IRR of this Act and the rules and regulations which it promulgates or administers;
(m) Take any other action delegated to it pursuant to this Act;
(n) Before the end of April of each year, submit to the Office of the President of the Philippines and Congress, copy furnished the DOE, an annual report containing
such matters or cases which have been filed before or referred to it during the preceding year, the actions and proceedings undertaken and its decision or resolution in
each case. The ERC shall make copies of such reports available to any interested party upon payment of a charge which reflects the printing costs. The ERC shall
publish all its decisions involving rates and anticompetitive cases in at least one (1) newspaper of general circulation, and/or post electronically and circulate to all
interested electric power industry participants copies of its resolutions to ensure fair and impartial treatment;
(o) Monitor the activities of the generation and supply of the electric power industry with the end in view of promoting free market competition and ensuring that the
allocation or pass through of bulk purchase cost by distributors is transparent, non-discriminatory and that any existing subsidies shall be divided pro rata among all
retail suppliers;
(p) Act on applications for or modifications of certificates of public convenience and/or necessity, licenses or permits of franchised electric utilities in accordance with
law and revoke, review and modify such certificates, licenses or permits in appropriate cases, such as in cases of violations of the Grid Code, Distribution Code and
other rules and regulations issued by the ERC in accordance with law;
(q) Act on applications for cost recovery and return on demand side management projects;
(r) In the exercise of its investigative and quasi-judicial powers, act against any participant or player in the energy sector for violations of any law, rule and regulation
governing the same, including the rules on cross ownership, anticompetitive practices, abuse of market positions and similar or related acts by any participant in the
energy sector, or by any person as may be provided by law, and require any person or entity to submit any report or data relative to any investigation or hearing
conducted pursuant to this Act;
(s) Inspect, on its own or through duly authorized representatives, the premises, books of accounts and records of any person or entity at any time, in the exercise of its
quasi-judicial power for purposes of determining the existence of any anticompetitive behavior and/or market power abuse and any violation of rules and regulations
issued by the ERC;
(t) Perform such other regulatory functions as are appropriate and necessary in order to ensure the successful restructuring and modernization of the electric power
industry, such as, but not limited to, the rules and guidelines under which generation companies, distribution utilities which are not publicly listed shall offer and sell to
the public a portion not less than fifteen percent (15%) of their common shares of stocks: Provided, however, That generation companies, distribution utilities or their
respective holding companies that are already listed in the PSE are deemed in compliance. For existing companies, such public offering shall be implemented not later
than five (5) years from the effectivity of this Act. New companies shall implement their respective public offerings not later than five (5) years from the issuance of
their certificate of compliance; and
(u) The ERC shall have the original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties imposed by the ERC in the exercise of the
abovementioned powers, functions and responsibilities and over all cases involving disputes between and among participants or players in the energy sector.
All notices of hearings to be conducted by the ERC for the purpose of fixing rates or fees shall be published at least twice for two successive weeks in two (2)
newspapers of nationwide circulation.
Aside from Section 43, additional functions of the ERC are scattered throughout RA 9136:
1. SEC. 6. Generation Sector. Generation of electric power, a business affected with public interest, shall be competitive and open.
Upon the effectivity of this Act, any new generation company shall, before it operates, secure from the Energy Regulatory Commission (ERC) a certificate of
compliance pursuant to the standards set forth in this Act, as well as health, safety and environmental clearances from the appropriate government agencies under
existing laws.
xxxx
2. SEC. 8. Creation of the National Transmission Company. x x x
That the subtransmission assets shall be operated and maintained by TRANSCO until their disposal to qualified distribution utilities which are in a position to take over
the responsibility for operating, maintaining, upgrading, and expanding said assets. x x x
In case of disagreement in valuation, procedures, ownership participation and other issues, the ERC shall resolve such issues.
xxxx
3. SEC. 23. Functions of Distribution Utilities. x x x
Distribution utilities shall submit to the ERC a statement of their compliance with the technical specifications prescribed in the Distribution Code and the performance
standards prescribed in the IRR of this Act. Distribution utilities which do not comply with any of the prescribed technical specifications and performance standards
shall submit to the ERC a plan to comply, within three (3) years, with said prescribed technical specifications and performance standards. The ERC shall, within sixty
(60) days upon receipt of such plan, evaluate the same and notify the distribution utility concerned of its action. Failure to submit a feasible and credible plan and/or
failure to implement the same shall serve as grounds for the imposition of appropriate sanctions, fines or penalties.
xxxx
4. SEC. 28. De-monopolization and Shareholding Dispersal. In compliance with the constitutional mandate for dispersal of ownership and de-monopolization of
public utilities, the holdings of persons, natural or juridical, including directors, officers, stockholders and related interests, in a distribution utility and their respective
holding companies shall not exceed twenty-five (25%) percent of the voting shares of stock unless the utility or the company holding the shares or its controlling
stockholders are already listed in the Philippine Stock Exchange (PSE): Provided, That controlling stockholders of small distribution utilities are hereby required to list
in the PSE within five (5) years from the enactment of this Act if they already own the stocks. New controlling stockholders shall undertake such listing within five (5)
years from the time they acquire ownership and control. A small distribution company is one whose peak demand is equal to Ten megawatts (10MW).
The ERC shall, within sixty (60) days from the effectivity of this Act, promulgate the rules and regulations to implement and effect this provision.
xxxx
5. SEC. 29. Supply Sector. x x x all suppliers of electricity to the contestable market shall require a license from the ERC.
For this purpose, the ERC shall promulgate rules and regulations prescribing the qualifications of electricity suppliers which shall include, among other requirements, a
demonstration of their technical capability, financial capability, and creditworthiness: Provided, That the ERC shall have authority to require electricity suppliers to
furnish a bond or other evidence of the ability of a supplier to withstand market disturbances or other events that may increase the cost of providing service.
xxxx
6. SEC. 30. Wholesale Electricity Spot Market. x x x

10
Subject to the compliance with the membership criteria, all generating companies, distribution utilities, suppliers, bulk consumers/end-users and other similar entities
authorized by the ERC shall be eligible to become members of the wholesale electricity spot market.
The ERC may authorize other similar entities to become eligible as members, either directly or indirectly, of the wholesale electricity spot market.
xxxx
7. SEC. 31. Retail Competition and Open Access. x x x
Upon the initial implementation of open access, the ERC shall allow all electricity end-users with a monthly average peak demand of at least one megawatt (1MW) for
the preceding twelve (12) months to be the contestable market. xxx Subsequently and every year thereafter, the ERC shall evaluate the performance of the market. x x x
8. SEC. 32. NPC Stranded Debt and Contract Cost Recovery. x x x
The ERC shall verify the reasonable amounts and determine the manner and duration for the full recovery of stranded debt and stranded contract costs as defined herein
xxxx
9. SEC. 34. Universal Charge. Within one (1) year from the effectivity of this Act, a universal charge to be determined, fixed and approved by the ERC, shall be
imposed on all electricity end-users x x x x
10. SEC. 35. Royalties, Returns and Tax Rates for Indigenous Energy Resources. x x x
To ensure lower rates for end-users, the ERC shall forthwith reduce the rates of power from all indigenous sources of energy.
11. SEC. 36. Unbundling of Rates and Functions. x x x
each distribution utility shall file its revised rates for the approval by the ERC. x x x x
12. SEC. 40. Enhancement of Technical Competence. The ERC shall establish rigorous training programs for its staff for the purpose of enhancing the technical
competence of the ERC in the following areas: evaluation of technical performance and monitoring of compliance with service and performance standards,
performance-based rate-setting reform, environmental standards and such other areas as will enable the ERC to adequately perform its duties and functions.
13. SEC. 41. Promotion of Consumer Interests. The ERC shall handle consumer complaints and ensure the adequate promotion of consumer interests.
14. SEC. 45. Cross Ownership, Market Power Abuse and Anti-Competitive Behavior. No participant in the electricity industry may engage in any anti-competitive
behavior including, but not limited to, cross-subsidization, price or market manipulation, or other unfair trade practices detrimental to the encouragement and protection
of contestable markets.
xxxx
(c) x x x The ERC shall, within one (1) year from the effectivity of this Act, promulgate rules and regulations to promote competition, encourage market development
and customer choice and discourage/penalize abuse of market power, cartelization and any anticompetitive or discriminatory behavior, in order to further the intent of
this Act and protect the public interest. Such rules and regulations shall define the following:
(a) the relevant markets for purposes of establishing abuse or misuse of monopoly or market position;
(b) areas of isolated grids; and
(c) the periodic reportorial requirements of electric power industry participants as may be necessary to enforce the provisions of this Section.
The ERC shall, motu proprio, monitor and penalize any market power abuse or anticompetitive or discriminatory act or behavior by any participant in the electric power
industry.
15. SEC. 51. Powers. The PSALM Corp. shall, in the performance of its functions and for the attainment of its objective, have the following powers: x x x
(e) To liquidate the NPC stranded contract costs utilizing proceeds from sales and other property contributed to it, including the proceeds from the universal charge;
xxxx
16. SEC. 60. Debts of Electric Cooperatives. x x x The ERC shall ensure a reduction in the rates of electric cooperatives commensurate with the resulting savings
due to the removal of the amortization payments of their loans. x x x x
17. SEC. 62. Joint Congressional Power Commission. x x x
x x x the Power Commission is hereby empowered to require the DOE, ERC, NEA, TRANSCO, generation companies, distribution utilities, suppliers and other electric
power industry participants to submit reports and all pertinent data and information relating to the performance of their respective functions in the industry. xxx
xxxx
18. SEC. 65. Environmental Protection. Participants in the generation, distribution and transmission sub-sectors of the industry shall comply with all environmental
laws, rules, regulations and standards promulgated by the Department of Environment and Natural Resources including, in appropriate cases, the establishment of an
environmental guarantee fund.
19. SEC. 67. NPC Offer of Transition Supply Contracts. Within six (6) months from the effectivity of this Act, NPC shall file with the ERC for its approval a
transition supply contract duly negotiated with the distribution utilities containing the terms and conditions of supply and a corresponding schedule of rates, consistent
with the provisions hereof, including adjustments and/or indexation formulas which shall apply to the term of such contracts.
xxxx
20. SEC. 69. Renegotiation of Power Purchase and Energy Conversion Agreements between Government Entities. Within three (3) months from the effectivity of
this Act, all power purchase and energy conversion agreements between the PNOC-Energy Development Corporation (PNOC-EDC) and NPC, including but not limited
to the Palimpinon, Tongonan and Mt. Apo Geothermal complexes, shall be reviewed by the ERC and the terms thereof amended to remove any hidden costs or
extraordinary mark-ups in the cost of power or steam above their true costs. All amended contracts shall be submitted to the Joint Congressional Power Commission for
approval. The ERC shall ensure that all savings realized from the reduction of said mark-ups shall be passed on to all end-users.
After comparing the functions of the ERB and the ERC, we find that the ERC indeed assumed the functions of the ERB. However, the overlap in the functions of the
ERB and of the ERC does not mean that there is no valid abolition of the ERB. The ERC has new and expanded functions which are intended to meet the specific
needs of a deregulated power industry. Indeed, National Land Titles and Deeds Registration Administration v. Civil Service Commission stated that:
[I]f the newly created office has substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the
one abolished, even though it embraces all or some of the duties of the old office it will be considered as an abolition of one office and the creation of a new or different
one. The same is true if one office is abolished and its duties, for reasons of economy are given to an existing officer or office. 13
KERB argues that "RA 9136 did not abolish the ERB nor did it alter its essential character as an economic regulator of the electric power industry. x x x RA 9136 rather
changed merely ERBs name and title to that of the ERC even as it expanded its functions and objectives to keep pace with the times." To uphold KERBs argument
regarding the invalidity of the ERBs abolition is to ignore the developments in the history of energy regulation.
The regulation of public services started way back in 1902 with the enactment of Act No. 520 which created the Coastwise Rate Commission. In 1906, Act No. 1507
was passed creating the Supervising Railway Expert. The following year, Act No. 1779 was enacted creating the Board of Rate Regulation. Then, Act No 2307, which
was patterned after the Public Service Law of the State of New Jersey, was approved by the Philippine Commission in 1914, creating the Board of Public Utility
Commissioners, composed of three members, which absorbed all the functions of the Coastwise Rate Commission, the Supervising Railway Expert, and the Board of
Rate Regulation.
Thereafter, several laws were enacted on public utility regulation. On November 7, 1936, Commonwealth Act No. 146, otherwise known as the Public Service Law, was
enacted by the National Assembly. The Public Service Commission (PSC) had jurisdiction, supervision, and control over all public services, including the electric
power service.
After almost four decades, significant developments in the energy sector changed the landscape of economic regulation in the country.
April 30, 1971 R.A. No. 6173 was passed creating the Oil Industry Commission (OIC), which was tasked to regulate the oil industry and to ensure the adequate
supply of petroleum products at reasonable prices.

11
 September 24, 1972 then President Ferdinand E. Marcos issued Presidential Decree No. 1 which ordered the preparation of the Integrated Reorganization Plan by
the Commission on Reorganization. The Plan abolished the PSC and transferred the regulatory and adjudicatory functions pertaining to the electricity industry and
water resources to then Board of Power and Waterworks (BOPW).
October 6, 1977 the government created the Department of Energy (DOE) and consequently abolished the OIC, which was replaced by the creation of the Board of
Energy (BOE) through Presidential Decree No. 1206. The BOE, in addition, assumed the powers and functions of the BOPW over the electric power industry.
May 8, 1987 the BOE was reconstituted into the Energy Regulatory Board (ERB), pursuant to Executive Order No. 172 issued by then President Corazon C.
Aquino as part of her governments reorganization program. The rationale was to consolidate and entrust into a single body all the regulatory and adjudicatory functions
pertaining to the energy sector. Thus, the power to regulate the power rates and services of private electric utilities was transferred to the ERB.
December 28, 1992 Republic Act No. 7638 signed, where the power to fix the rates of the National Power Corporation (NPC) and the rural electric cooperatives
(RECs) was passed on to the ERB. Non-pricing functions of the ERB with respect to the petroleum industry were transferred to the DOE, i.e., regulating the capacities
of new refineries.
February 10, 1998 enactment of Republic Act 8479: Downstream Oil Industry Deregulation Act of 1998, which prescribed a five-month transition period, before
full deregulation of the oil industry, during which ERB would implement an automatic pricing mechanism (APM) for petroleum products every month.
June 12, 1998 the Philippine oil industry was fully deregulated, thus, ERBs focus of responsibility centered on the electric industry.
June 8, 2001 enactment of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001. The Act abolished the ERB and
created in its place the Energy Regulatory Commission (ERC) which is a purely independent regulatory body performing the combined quasi-judicial, quasi-legislative
and administrative functions in the electric industry.14
Throughout the years, the scope of the regulation has gradually narrowed from that of public services in 1902 to the electricity industry and water resources in 1972 to
the electric power industry and oil industry in 1977 to the electric industry alone in 1998. The ERC retains the ERBs traditional rate and service regulation functions.
However, the ERC now also has to promote competitive operations in the electricity market. RA 9136 expanded the ERCs concerns to encompass both the consumers
and the utility investors.
Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of the assets of the National Power Corporation (NPC), the
transition to a competitive structure, and the delineation of the roles of various government agencies and the private entities. The law ordains the division of the industry
into four (4) distinct sectors, namely: generation, transmission, distribution and supply. Corollarily, the NPC generating plants have to privatized and its transmission
business spun off and privatized thereafter.
In tandem with the restructuring of the industry is the establishment of "a strong and purely independent regulatory body." Thus, the law created the ERC in place of the
Energy Regulatory Board (ERB).
To achieve its aforestated goal, the law has reconfigured the organization of the regulatory body. x x x 15
There is no question in our minds that, because of the expansion of the ERCs functions and concerns, there was a valid abolition of the ERB. Thus, there is no merit to
KERBs allegation that there is an impairment of the security of tenure of the ERBs employees.
WHEREFORE, we DISMISS the petition. No costs.
SO ORDERED.

G.R. No. 84301. April 7, 1993.

NATIONAL LAND TITLES AND DEEDS REGISTRATION ADMINISTRATION, petitioner,
vs.
CIVIL SERVICE COMMISSION and VIOLETA L. GARCIA, respondents.
The Solicitor General for petitioner.
Raul R. Estrella for private respondent.
SYLLABUS
1. ADMINISTRATIVE LAW; EXECUTIVE ORDER NO. 649; REORGANIZED LAND REGISTRATION COMMISSION TO NALTDRA; EXPRESSLY
PROVIDED THE ABOLITION OF EXISTING POSITIONS. Executive Order No. 649 authorized the reorganization of the Land Registration Commission (LRC)
into the National Land Titles and Deeds Registration Administration (NALTDRA). It abolished all the positions in the now defunct LRC and required new appointments
to be issued to all employees of the NALTDRA. The question of whether or not a law abolishes an office is one of legislative intent about which there can be no
controversy whatsoever if there is an explicit declaration in the law itself. A closer examination of Executive Order No. 649 which authorized the reorganization of the
Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA), reveals that said law in express terms,
provided for the abolition of existing positions. Thus, without need of any interpretation, the law mandates that from the moment an implementing order is issued, all
positions in the Land Registration Commission are deemed non-existent. This, however, does not mean removal. Abolition of a position does not involve or mean
removal for the reason that removal implies that the post subsists and that one is merely separated therefrom. (Arao vs. Luspo, 20 SCRA 722 [1967]) After abolition,
there is in law no occupant. Thus, there can be no tenure to speak of. It is in this sense that from the standpoint of strict law, the question of any impairment of security
of tenure does not arise. (De la Llana vs. Alba, 112 SCRA 294 [1982])
2. ID.; ID.; ID.; REORGANIZATION, VALID WHEN PURSUED IN GOOD FAITH; CASE AT BAR. Nothing is better settled in our law than that the abolition of
an office within the competence of a legitimate body if done in good faith suffers from no infirmity. Two questions therefore arise: (1) was the abolition carried out by a
legitimate body?; and (2) was it done in good faith? There is no dispute over the authority to carry out a valid reorganization in any branch or agency of the
Government. Under Section 9, Article XVII of the 1973 Constitution. The power to reorganize is, however; not absolute. We have held in Dario vs. Mison that
reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. This court has pronounced that if the newly created office has
substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the one abolished, even though it
embraces all or some of the duties of the old office it will be considered as an abolition of one office and the creation of a new or different one. The same is true if one
office is abolished and its duties, for reasons of economy are given to an existing officer or office. Executive Order No. 649 was enacted to improve the services and
better systematize the operation of the Land Registration Commission. A reorganization is carried out in good faith if it is for the purpose of economy or to make
bureaucracy more efficient. To this end, the requirement of Bar membership to qualify for key positions in the NALTDRA was imposed to meet the changing
circumstances and new development of the times. Private respondent Garcia who formerly held the position of Deputy Register of Deeds II did not have such
qualification. It is thus clear that she cannot hold any key position in the NALTDRA, The additional qualification was not intended to remove her from office. Rather, it
was a criterion imposed concomitant with a valid reorganization measure.
3. ID.; ID.; ID.; THERE IS NO VESTED PROPERTY RIGHT TO BE RE-EMPLOYED IN A REORGANIZED OFFICE; CASE AT BAR. There is no such thing as
a vested interest or an estate in an office, or even an absolute right to hold it. Except constitutional offices which provide for special immunity as regards salary and
tenure, no one can be said to have any vested right in an office or its salary. None of the exceptions to this rule are obtaining in this case. To reiterate, the position which
private respondent Garcia would like to occupy anew was abolished pursuant to Executive Order No. 649, a valid reorganization measure. There is no vested property
right to be re employed in a reorganized office. Not being a member of the Bar, the minimum requirement to qualify under the reorganization law for permanent
appointment as Deputy Register of Deeds II, she cannot be reinstated to her former position without violating the express mandate of the law.
DECISION
CAMPOS, JR., J p:
The sole issue for our consideration in this case is whether or not membership in the bar, which is the qualification requirement prescribed for appointment to the
position of Deputy Register of Deeds under Section 4 of Executive Order No. 649 (Reorganizing the Land Registration Commission (LRC) into the National Land

12
Titles and Deeds Registration Administration or NALTDRA) should be required of and/or applied only to new applicants and not to those who were already in the
service of the LRC as deputy register of deeds at the time of the issuance and implementation of the abovesaid Executive Order.
The facts, as succinctly stated in the Resolution ** of the Civil Service Commission, are as follows:
"The records show that in 1977, petitioner Garcia, a Bachelor of Laws graduate and a first grade civil service eligible was appointed Deputy Register of Deeds VII
under permanent status. Said position was later reclassified to Deputy Register of Deeds III pursuant to PD 1529, to which position, petitioner was also appointed under
permanent status up to September 1984. She was for two years, more or less, designated as Acting Branch Register of Deeds of Meycauayan, Bulacan. By virtue of
Executive Order No. 649 (which took effect on February 9, 1981) which authorized the restructuring of the Land Registration Commission to National Land Titles and
Deeds Registration Administration and regionalizing the Offices of the Registers therein, petitioner Garcia was issued an appointment as Deputy Register of Deeds II on
October 1, 1984, under temporary status, for not being a member of the Philippine Bar. She appealed to the Secretary of Justice but her request was denied. Petitioner
Garcia moved for reconsideration but her motion remained unacted. On October 23, 1984, petitioner Garcia was administratively charged with Conduct Prejudicial to
the Best Interest of the Service. While said case was pending decision, her temporary appointment as such was renewed in 1985. In a Memorandum dated October 30,
1986, the then Minister, now Secretary, of Justice notified petitioner Garcia of the termination of her services as Deputy Register of Deeds II on the ground that she was
"receiving bribe money". Said Memorandum of Termination which took effect on February 9, 1987, was the subject of an appeal to the Inter-Agency Review
Committee which in turn referred the appeal to the Merit Systems Protection Board (MSPB).
In its Order dated July 6, 1987, the MSPB dropped the appeal of petitioner Garcia on the ground that since the termination of her services was due to the expiration of
her temporary appointment, her separation is in order. Her motion for reconsideration was denied on similar ground." 1
However, in its Resolution 2 dated June 30, 1988, the Civil Service Commission directed that private respondent Garcia be restored to her position as Deputy Register
of Deeds II or its equivalent in the NALTDRA. It held that "under the vested right theory the new requirement of BAR membership to qualify for permanent
appointment as Deputy Register of Deeds II or higher as mandated under said Executive Order, would not apply to her (private respondent Garcia) but only to the filling
up of vacant lawyer positions on or after February 9, 1981, the date said Executive Order took effect." 3 A fortiori, since private respondent Garcia had been holding the
position of Deputy Register of Deeds II from 1977 to September 1984, she should not be affected by the operation on February 1, 1981 of Executive Order No. 649.
Petitioner NALTDRA filed the present petition to assail the validity of the above Resolution of the Civil Service Commission. It contends that Sections 8 and 10 of
Executive Order No. 649 abolished all existing positions in the LRC and transferred their functions to the appropriate new offices created by said Executive Order,
which newly created offices required the issuance of new appointments to qualified office holders. Verily, Executive Order No. 649 applies to private respondent
Garcia, and not being a member of the Bar, she cannot be reinstated to her former position as Deputy Register of Deeds II.
We find merit in the petition.
Executive Order No. 649 authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration
Administration (NALTDRA). It abolished all the positions in the now defunct LRC and required new appointments to be issued to all employees of the NALTDRA.
The question of whether or not a law abolishes an office is one of legislative intent about which there can be no controversy whatsoever if there is an explicit declaration
in the law itself. 4 A closer examination of Executive Order No. 649 which authorized the reorganization of the Land Registration Commission (LRC) into the National
Land Titles and Deeds Registration Administration (NALTDRA), reveals that said law in express terms, provided for the abolition of existing positions, to wit:
Sec. 8. Abolition of Existing Positions in the Land Registration Commission . . .
All structural units in the Land Registration Commission and in the registries of deeds, and all Positions therein shall cease to exist from the date specified in the
implementing order to be issued by the President pursuant to the preceding paragraph. Their pertinent functions, applicable appropriations, records, equipment and
property shall be transferred to the appropriate staff or offices therein created. (Emphasis Supplied.)
Thus, without need of any interpretation, the law mandates that from the moment an implementing order is issued, all positions in the Land Registration Commission
are deemed non-existent. This, however, does not mean removal. Abolition of a position does not involve or mean removal for the reason that removal implies that the
post subsists and that one is merely separated therefrom. 5 After abolition, there is in law no occupant. Thus, there can be no tenure to speak of. It is in this sense that
from the standpoint of strict law, the question of any impairment of security of tenure does not arise. 6
Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. Two
questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2) was it done in good faith?
There is no dispute over the authority to carry out a valid reorganization in any branch or agency of the Government. Under Section 9, Article XVII of the 1973
Constitution, the applicable law at that time:
Sec. 9. All officials and employees in the existing Government of the Republic of the Philippines shall continue in office until otherwise provided by law or decreed by
the incumbent President of the Philippines, but all officials whose appointments are by this Constitution vested in the Prime Minister shall vacate their respective offices
upon the appointment and qualifications of their successors.
The power to reorganize is, however; not absolute. We have held in Dario vs. Mison 7 that reorganizations in this jurisdiction have been regarded as valid provided they
are pursued in good faith. This court has pronounced 8 that if the newly created office has substantially new, different or additional functions, duties or powers, so that it
may be said in fact to create an office different from the one abolished, even though it embraces all or some of the duties of the old office it will be considered as an
abolition of one office and the creation of a new or different one. The same is true if one office is abolished and its duties, for reasons of economy are given to an
existing officer or office.
Executive Order No. 649 was enacted to improve the services and better systematize the operation of the Land Registration Commission. 9 A reorganization is carried
out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. 10 To this end, the requirement of Bar membership to qualify for key
positions in the NALTDRA was imposed to meet the changing circumstances and new development of the times. 11 Private respondent Garcia who formerly held the
position of Deputy Register of Deeds II did not have such qualification. It is thus clear that she cannot hold any key position in the NALTDRA, The additional
qualification was not intended to remove her from office. Rather, it was a criterion imposed concomitant with a valid reorganization measure.
A final word, on the "vested right theory" advanced by respondent Civil Service Commission. There is no such thing as a vested interest or an estate in an office, or
even an absolute right to hold it. Except constitutional offices which provide for special immunity as regards salary and tenure, no one can be said to have any vested
right in an office or its salary. 12 None of the exceptions to this rule are obtaining in this case.
To reiterate, the position which private respondent Garcia would like to occupy anew was abolished pursuant to Executive Order No. 649, a valid reorganization
measure. There is no vested property right to be re employed in a reorganized office. Not being a member of the Bar, the minimum requirement to qualify under the
reorganization law for permanent appointment as Deputy Register of Deeds II, she cannot be reinstated to her former position without violating the express mandate of
the law.
WHEREFORE, premises considered, We hereby GRANT the petition and SET ASIDE the questioned Resolution of the Civil Service Commission reinstating private
respondent to her former position as Deputy Register of Deeds II or its equivalent in the National Land Titles and Deeds Registration Administration.
SO ORDERED.

digest here: http://www.scribd.com/doc/60221048/Digest-1

G.R. No. 115863 March 31, 1995

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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, 1974 4 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.

14
 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.

15
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.

FACTS:Eugenio, the Deputy Director of Philippine Nuclear Research Institute, applied for a Career Executive Service (CES) Eligibility and a CESO rank. But before
she got the rank, the CSC passed Resolution No. 93-459, reorganizing itself and changing the CES Board (CESB) to Office for Career Executive Service of the Civil
Service Commission (OCES).

ISSUE:W/N CSC usurped legislative function of Congress by abolishing the CESB and transferring its budget to OCES

HELD:CESB was created by PD 1. It cannot be disputed, therefore, that as CESB was created by law, it can only be abolished by the legislature. While CSC has the
power to reorganize under Sec. 17, Chap. 3, Subtitle A, Title I, Bk. V. of the Administrative Code of 1987, this must be read with sec. 16, which enumerates the offices
under the control of the CSC. CESB is not one of such offices.

CESB was intended to be an autonomous entity, albeit administratively attached to CSC. This 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.

In 1993, Aida Eugenio passed the Career Executive Service Eligibility (CES). She was then recommended to be
appointed as a Civil Service Officer Rank IV. But her appointment to said rank was impeded when in the same
year, the Civil Service Commission (CSC) abolished the Career Executive Service Board (CESB). CESB is the
office tasked with promulgating rules, standards, and procedures on the selection, classification and
compensation of the members of the Career Executive Service.

Eugenio then assailed the resolution which abolished CESB. She averred that the CSC does not have the power
to abolish CESB because the same was created by law (P.D. 1). CSC on the other hand argued that it has the
power to do so pursuant to the Administrative Code of 1987 which granted the CSC the right to reorganize the
CSC.

ISSUE: Whether or not the Civil Service Commission may validly abolish the Career Executive Service Board.

HELD: No. The CESB is created by law. It can only be abolished by the legislature. The creation and abolition
of public offices is primarily a legislative function, except for Constitutional offices. The power to restructure
granted to the CSC is limited to offices under it. The law that created the CESB intended said office to be an
autonomous entity although it is administratively attached to the CSC.

16