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G.R. No.

116418 March 7, 1995

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


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

FELICIANO, J.:

The principal issues raised in this Petition are the following:

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

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

I.

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

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

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

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

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

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

II.

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

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

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

Sec. 26. Personnel Actions. — . . .

xxx xxx xxx

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

xxx xxx xxx

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

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

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

G.R. No. 158540 July 8, 2004

SOUTHERN CROSS CEMENT CORPORATION, petitioner,


vs.
THE PHILIPPINE CEMENT MANUFACTURERS CORP., THE SECRETARY OF THE DEPARTMENT OF TRADE &
INDUSTRY, THE SECRETARY OF THE DEPARTMENT OF FINANCE, and THE COMMISSIONER OF THE
BUREAU OF CUSTOMS, respondents.

TINGA, J.:

"Good fences make good neighbors," so observed Robert Frost, the archetype of traditional New England detachment.
The Frost ethos has been heeded by nations adjusting to the effects of the liberalized global market.1The Philippines, for one,
enacted Republic Act (Rep. Act) No. 8751 (on the imposition of countervailing duties), Rep. Act No. 8752 (on the imposition of anti-
dumping duties) and, finally, Rep. Act No. 8800, also known as the Safeguard Measures Act ("SMA") 2 soon after it joined the
General Agreement on Tariff and Trade (GATT) and the World Trade Organization (WTO) Agreement.3

The SMA provides the structure and mechanics for the imposition of emergency measures, including tariffs, to protect domestic
industries and producers from increased imports which inflict or could inflict serious injury on them. 4 The wisdom of the policies
behind the SMA, however, is not put into question by the petition at bar. The questions submitted to the Court relate to the means
and the procedures ordained in the law to ensure that the determination of the imposition or non-imposition of a safeguard
measure is proper.

Antecedent Facts

Petitioner Southern Cross Cement Corporation ("Southern Cross") is a domestic corporation engaged in the business of cement
manufacturing, production, importation and exportation. Its principal stockholders are Taiheiyo Cement Corporation and
Tokuyama Corporation, purportedly the largest cement manufacturers in Japan.5

Private respondent Philippine Cement Manufacturers Corporation6 ("Philcemcor") is an association of domestic cement
manufacturers. It has eighteen (18) members,7 per Record. While Philcemcor heralds itself to be an association of domestic cement
manufacturers, it appears that considerable equity holdings, if not controlling interests in at least twelve (12) of its member-
corporations, were acquired by the three largest cement manufacturers in the world, namely Financiere Lafarge S.A. of France,
Cemex S.A. de C.V. of Mexico, and Holcim Ltd. of Switzerland (formerly Holderbank Financiere Glaris, Ltd., then Holderfin B.V.).8

On 22 May 2001, respondent Department of Trade and Industry ("DTI") accepted an application from Philcemcor, alleging that the
importation of gray Portland cement9 in increased quantities has caused declines in domestic production, capacity utilization,
market share, sales and employment; as well as caused depressed local prices. Accordingly, Philcemcor sought the imposition at
first of provisional, then later, definitive safeguard measures on the import of cement pursuant to the SMA. Philcemcor filed the
application in behalf of twelve (12) of its member-companies.10

After preliminary investigation, the Bureau of Import Services of the DTI, determined that critical circumstances existed justifying
the imposition of provisional measures.11 On 7 November 2001, the DTI issued an Order, imposing a provisional measure
equivalent to Twenty Pesos and Sixty Centavos (P20.60) per forty (40) kilogram bag on all importations of gray Portland cement for
a period not exceeding two hundred (200) days from the date of issuance by the Bureau of Customs (BOC) of the
implementing Customs Memorandum Order.12 The corresponding Customs Memorandum Order was issued on 10 December
2001, to take effect that same day and to remain in force for two hundred (200) days.13

In the meantime, the Tariff Commission, on 19 November 2001, received a request from the DTI for a formal investigation to
determine whether or not to impose a definitive safeguard measure on imports of gray Portland cement, pursuant to Section 9 of
the SMA and its Implementing Rules and Regulations. A notice of commencement of formal investigation was published in the
newspapers on 21 November 2001. Individual notices were likewise sent to concerned parties, such as Philcemcor, various
importers and exporters, the Embassies of Indonesia, Japan and Taiwan, contractors/builders associations, industry associations,
cement workers' groups, consumer groups, non-government organizations and concerned government agencies.14 A preliminary
conference was held on 27 November 2001, attended by several concerned parties, including Southern Cross.15 Subsequently, the
Tariff Commission received several position papers both in support and against Philcemcor's application. 16 The Tariff Commission
also visited the corporate offices and manufacturing facilities of each of the applicant companies, as well as that of Southern Cross
and two other cement importers.17

On 13 March 2002, the Tariff Commission issued its Formal Investigation Report ("Report"). Among the factors studied by the
Tariff Commission in its Report were the market share of the domestic industry,18 production and sales,19 capacity
utilization,20 financial performance and profitability,21 and return on sales.22 The Tariff Commission arrived at the following
conclusions:

1. The circumstances provided in Article XIX of GATT 1994 need not be demonstrated since the product under
consideration (gray Portland cement) is not the subject of any Philippine obligation or tariff concession under the WTO
Agreement. Nonetheless, such inquiry is governed by the national legislation (R.A. 8800) and the terms and conditions of
the Agreement on Safeguards.

2. The collective output of the twelve (12) applicant companies constitutes a major proportion of the total domestic
production of gray Portland cement and blended Portland cement.
3. Locally produced gray Portland cement and blended Portland cement (Pozzolan) are "like" to imported gray Portland
cement.

4. Gray Portland cement is being imported into the Philippines in increased quantities, both in absolute terms and relative
to domestic production, starting in 2000. The increase in volume of imports is recent, sudden, sharp and significant.

5. The industry has not suffered and is not suffering significant overall impairment in its condition, i.e., serious injury.

6. There is no threat of serious injury that is imminent from imports of gray Portland cement.

7. Causation has become moot and academic in view of the negative determination of the elements of serious injury and
imminent threat of serious injury.23

Accordingly, the Tariff Commission made the following recommendation, to wit:

The elements of serious injury and imminent threat of serious injury not having been established, it is hereby
recommended that no definitive general safeguard measure be imposed on the importation of gray Portland cement.24

The DTI received the Report on 14 March 2002. After reviewing the report, then DTI Secretary Manuel Roxas II ("DTI Secretary")
disagreed with the conclusion of the Tariff Commission that there was no serious injury to the local cement industry caused by the
surge of imports.25 In view of this disagreement, the DTI requested an opinion from the Department of Justice ("DOJ") on the DTI
Secretary's scope of options in acting on the Commission's recommendations. Subsequently, then DOJ Secretary Hernando Perez
rendered an opinion stating that Section 13 of the SMA precluded a review by the DTI Secretary of the Tariff Commission's negative
finding, or finding that a definitive safeguard measure should not be imposed.26

On 5 April 2002, the DTI Secretary promulgated a Decision. After quoting the conclusions of the Tariff Commission, the DTI
Secretary noted the DTI's disagreement with the conclusions. However, he also cited the DOJ Opinion advising the DTI that it was
bound by the negative finding of the Tariff Commission. Thus, he ruled as follows:

The DTI has no alternative but to abide by the [Tariff] Commission's recommendations.

IN VIEW OF THE FOREGOING, and in accordance with Section 13 of RA 8800 which states:

"In the event of a negative final determination; or if the cash bond is in excess of the definitive
safeguard duty assessed, the Secretary shall immediately issue, through the Secretary of
Finance, a written instruction to the Commissioner of Customs, authorizing the return of the
cash bond or the remainder thereof, as the case may be, previously collected as provisional
general safeguard measure within ten (10) days from the date a final decision has been made;
Provided, that the government shall not be liable for any interest on the amount to be returned.
The Secretary shall not accept for consideration another petition from the same industry, with
respect to the same imports of the product under consideration within one (1) year after the
date of rendering such a decision."

The DTI hereby issues the following:

The application for safeguard measures against the importation of gray Portland cement filed by PHILCEMCOR (Case No.
02-2001) is hereby denied.27 (Emphasis in the original)

Philcemcor received a copy of the DTI Decision on 12 April 2002. Ten days later, it filed with the Court of Appeals a Petition for
Certiorari, Prohibition and Mandamus28 seeking to set aside the DTI Decision, as well as the Tariff Commission's Report.
Philcemcor likewise applied for a Temporary Restraining Order/Injunction to enjoin the DTI and the BOC from implementing the
questioned Decision and Report. It prayed that the Court of Appeals direct the DTI Secretary to disregard the Report and to render
judgment independently of the Report. Philcemcor argued that the DTI Secretary, vested as he is under the law with the power of
review, is not bound to adopt the recommendations of the Tariff Commission; and, that the Report is void, as it is predicated on a
flawed framework, inconsistent inferences and erroneous methodology.29

On 10 June 2002, Southern Cross filed its Comment.30 It argued that the Court of Appeals had no jurisdiction over
Philcemcor's Petition, for it is on the Court of Tax Appeals ("CTA") that the SMA conferred jurisdiction to review rulings of the
Secretary in connection with the imposition of a safeguard measure. It likewise argued that Philcemcor's resort to the special civil
action of certiorari is improper, considering that what Philcemcor sought to rectify is an error of judgment and not an error of
jurisdiction or grave abuse of discretion, and that a petition for review with the CTA was available as a plain, speedy and adequate
remedy. Finally, Southern Cross echoed the DOJ Opinion that Section 13 of the SMA precludes a review by the DTI Secretary of a
negative finding of the Tariff Commission.

After conducting a hearing on 19 June 2002 on Philcemcor's application for preliminary injunction, the Court of Appeals' Twelfth
Division31 granted the writ sought in its Resolution dated 21 June 2002.32 Seven days later, on 28 June 2002, the two-hundred
(200)-day period for the imposition of the provisional measure expired. Despite the lapse of the period, the BOC continued to
impose the provisional measure on all importations of Portland cement made by Southern Cross. The uninterrupted assessment of
the tariff, according to Southern Cross, worked to its detriment to the point that the continued imposition would eventually lead to
its closure.33

Southern Cross timely filed a Motion for Reconsideration of the Resolution on 9 September 2002. Alleging that Philcemcor was not
entitled to provisional relief, Southern Cross likewise sought a clarificatory order as to whether the grant of the writ of preliminary
injunction could extend the earlier imposition of the provisional measure beyond the two hundred (200)-day limit imposed by law.
The appeals' court failed to take immediate action on Southern Cross's motion despite the four (4) motions for early resolution the
latter filed between September of 2002 and February of 2003. After six (6) months, on 19 February 2003, the Court of Appeals
directed Philcemcor to comment on Southern Cross's Motion for Reconsideration.34 After Philcemcor filed its Opposition35 on 13
March 2003, Southern Cross filed another set of four (4) motions for early resolution.

Despite the efforts of Southern Cross, the Court of Appeals failed to directly resolve the Motion for Reconsideration. Instead, on 5
June 2003, it rendered a Decision,36 granting in part Philcemcor's petition. The appellate court ruled that it had jurisdiction over
the petition for certiorari since it alleged grave abuse of discretion. It refused to annul the findings of the Tariff Commission, citing
the rule that factual findings of administrative agencies are binding upon the courts and its corollary, that courts should not
interfere in matters addressed to the sound discretion and coming under the special technical knowledge and training of such
agencies.37 Nevertheless, it held that the DTI Secretary is not bound by the factual findings of the Tariff Commission since such
findings are merely recommendatory and they fall within the ambit of the Secretary's discretionary review. It determined that the
legislative intent is to grant the DTI Secretary the power to make a final decision on the Tariff Commission's
recommendation.38 The dispositive portion of the Decision reads:

WHEREFORE, based on the foregoing premises, petitioner's prayer to set aside the findings of the Tariff Commission in
its assailed Report dated March 13, 2002 is DENIED. On the other hand, the assailed April 5, 2002 Decision of the
Secretary of the Department of Trade and Industry is hereby SET ASIDE. Consequently, the case is REMANDED to the
public respondent Secretary of Department of Trade and Industry for a final decision in accordance with RA 8800 and its
Implementing Rules and Regulations.

SO ORDERED.39

On 23 June 2003, Southern Cross filed the present petition, assailing the appellate court's Decision for departing from the accepted
and usual course of judicial proceedings, and not deciding the substantial questions in accordance with law and jurisprudence. The
petition argues in the main that the Court of Appeals has no jurisdiction over Philcemcor's petition, the proper remedy being a
petition for review with the CTA conformably with the SMA, and; that the factual findings of the Tariff Commission on the existence
or non-existence conditions warranting the imposition of general safeguard measures are binding upon the DTI Secretary.

The timely filing of Southern Cross's petition before this Court necessarily prevented the Court of Appeals Decisionfrom becoming
final.40 Yet on 25 June 2003, the DTI Secretary issued a new Decision, ruling this time that that in light of the appellate
court's Decision there was no longer any legal impediment to his deciding Philcemcor's application for definitive safeguard
measures.41 He made a determination that, contrary to the findings of the Tariff Commission, the local cement industry had suffered
serious injury as a result of the import surges.42 Accordingly, he imposed a definitive safeguard measure on the importation of gray
Portland cement, in the form of a definitive safeguard duty in the amount of P20.60/40 kg. bag for three years on imported gray
Portland Cement.43

On 7 July 2003, Southern Cross filed with the Court a "Very Urgent Application for a Temporary Restraining Order and/or A
Writ of Preliminary Injunction" ("TRO Application"), seeking to enjoin the DTI Secretary from enforcing his Decision of 25 June
2003 in view of the pending petition before this Court. Philcemcor filed an opposition, claiming, among others, that it is not this
Court but the CTA that has jurisdiction over the application under the law.

On 1 August 2003, Southern Cross filed with the CTA a Petition for Review, assailing the DTI Secretary's 25 June
2003 Decision which imposed the definite safeguard measure. Prescinding from this action, Philcemcor filed with this Court
a Manifestation and Motion to Dismiss in regard to Southern Cross's petition, alleging that it deliberately and willfully resorted to
forum-shopping. It points out that Southern Cross's TRO Application seeks to enjoin the DTI Secretary's second decision, while
its Petition before the CTA prays for the annulment of the same decision.44

Reiterating its Comment on Southern Cross's Petition for Review, Philcemcor also argues that the CTA, being a special court of
limited jurisdiction, could only review the ruling of the DTI Secretary when a safeguard measure is imposed, and that the factual
findings of the Tariff Commission are not binding on the DTI Secretary.45

After giving due course to Southern Cross's Petition, the Court called the case for oral argument on 18 February 2004.46 At the oral
argument, attended by the counsel for Philcemcor and Southern Cross and the Office of the Solicitor General, the Court simplified
the issues in this wise: (i) whether the Decision of the DTI Secretary is appealable to the CTA or the Court of Appeals; (ii) assuming
that the Court of Appeals has jurisdiction, whether its Decision is in accordance with law; and, (iii) whether a Temporary
Restraining Order is warranted.47

During the oral arguments, counsel for Southern Cross manifested that due to the imposition of the general safeguard measures,
Southern Cross was forced to cease operations in the Philippines in November of 2003.48

Propriety of the Temporary Restraining Order


Before the merits of the Petition, a brief comment on Southern Cross's application for provisional relief. It sought to enjoin the DTI
Secretary from enforcing the definitive safeguard measure he imposed in his 25 June 2003 Decision. The Court did not grant the
provisional relief for it would be tantamount to enjoining the collection of taxes, a peremptory judicial act which is traditionally
frowned upon,49 unless there is a clear statutory basis for it.50 In that regard, Section 218 of the Tax Reform Act of 1997 prohibits
any court from granting an injunction to restrain the collection of any national internal revenue tax, fee or charge imposed by the
internal revenue code.51 A similar philosophy is expressed by Section 29 of the SMA, which states that the filing of a petition for
review before the CTA does not stop, suspend, or otherwise toll the imposition or collection of the appropriate tariff duties or the
adoption of other appropriate safeguard measures. 52 This evinces a clear legislative intent that the imposition of safeguard
measures, despite the availability of judicial review, should not be enjoined notwithstanding any timely appeal of the imposition.

The Forum-Shopping Issue

In the same breath, we are not convinced that the allegation of forum-shopping has been duly proven, or that sanction should befall
upon Southern Cross and its counsel. The standard by Section 5, Rule 7 of the 1997 Rules of Civil Procedure in order that sanction
may be had is that "the acts of the party or his counsel clearly constitute willful and deliberate forum shopping." 53 The standard
implies a malicious intent to subvert procedural rules, and such state of mind is not evident in this case.

The Jurisdictional Issue

On to the merits of the present petition.

In its assailed Decision, the Court of Appeals, after asserting only in brief that it had jurisdiction over Philcemcor's Petition,
discussed the issue of whether or not the DTI Secretary is bound to adopt the negative recommendation of the Tariff Commission
on the application for safeguard measure. The Court of Appeals maintained that it had jurisdiction over the petition, as it alleged
grave abuse of discretion on the part of the DTI Secretary, thus:

A perusal of the instant petition reveals allegations of grave abuse of discretion on the part of the DTI Secretary in
rendering the assailed April 5, 2002 Decision wherein it was ruled that he had no alternative but to abide by the findings of
the Commission on the matter of safeguard measures for the local cement industry. Abuse of discretion is admittedly
within the ambit of certiorari.

Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction. It is alleged that, in the assailed Decision, the DTI Secretary gravely abused his discretion in wantonly evading
to discharge his duty to render an independent determination or decision in imposing a definitive safeguard measure. 54

We do not doubt that the Court of Appeals' certiorari powers extend to correcting grave abuse of discretion on the part of an officer
exercising judicial or quasi-judicial functions.55 However, the special civil action of certiorari is available only when there is no plain,
speedy and adequate remedy in the ordinary course of law. 56 Southern Cross relies on this limitation, stressing that Section 29 of
the SMA is a plain, speedy and adequate remedy in the ordinary course of law which Philcemcor did not avail of. The Section reads:

Section 29. Judicial Review. – Any interested party who is adversely affected by the ruling of the Secretary in
connection with the imposition of a safeguard measure may file with the CTA, a petition for review of such ruling
within thirty (30) days from receipt thereof. Provided, however, that the filing of such petition for review shall not in any
way stop, suspend or otherwise toll the imposition or collection of the appropriate tariff duties or the adoption of other
appropriate safeguard measures, as the case may be.

The petition for review shall comply with the same requirements and shall follow the same rules of procedure and shall be
subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of
Appeals.57 (Emphasis supplied)

It is not difficult to divine why the legislature singled out the CTA as the court with jurisdiction to review the ruling of the DTI
Secretary in connection with the imposition of a safeguard measure. The Court has long recognized the legislative determination to
vest sole and exclusive jurisdiction on matters involving internal revenue and customs duties to such a specialized court. 58 By the
very nature of its function, the CTA is dedicated exclusively to the study and consideration of tax problems and has necessarily
developed an expertise on the subject.59

At the same time, since the CTA is a court of limited jurisdiction, its jurisdiction to take cognizance of a case should be clearly
conferred and should not be deemed to exist on mere implication.60 Concededly, Rep. Act No. 1125, the statute creating the CTA,
does not extend to it the power to review decisions of the DTI Secretary in connection with the imposition of safeguard
measures.61 Of course, at that time which was before the advent of trade liberalization the notion of safeguard measures or safety
nets was not yet in vogue.

Undeniably, however, the SMA expanded the jurisdiction of the CTA by including review of the rulings of the DTI Secretary in
connection with the imposition of safeguard measures. However, Philcemcor and the public respondents agree that the CTA has
appellate jurisdiction over a decision of the DTI Secretary imposing a safeguard measure, but not when his ruling is not to impose
such measure.

In a related development, Rep. Act No. 9282, enacted on 30 March 2004, expressly vests unto the CTA jurisdiction over
"[d]ecisions of the Secretary of Trade and Industry, in case of nonagricultural product, commodity or article xxx involving
xxx safeguard measures under Republic Act No. 8800, where either party may appeal the decision to impose or
not to impose said duties."62 Had Rep. Act No. 9282 already been in force at the beginning of the incidents subject of this case,
there would have been no need to make any deeper inquiry as to the extent of the CTA's jurisdiction. But as Rep. Act No. 9282
cannot be applied retroactively to the present case, the question of whether such jurisdiction extends to a decision not to impose a
safeguard measure will have to be settled principally on the basis of the SMA.

Under Section 29 of the SMA, there are three requisites to enable the CTA to acquire jurisdiction over the petition for review
contemplated therein: (i) there must be a ruling by the DTI Secretary; (ii) the petition must be filed by an interested party adversely
affected by the ruling; and (iii) such ruling must be in connection with the imposition of a safeguard measure. The first two
requisites are clearly present. The third requisite deserves closer scrutiny.

Contrary to the stance of the public respondents and Philcemcor, in this case where the DTI Secretary decides not to impose a
safeguard measure, it is the CTA which has jurisdiction to review his decision. The reasons are as follows:

First. Split jurisdiction is abhorred.

Essentially, respondents' position is that judicial review of the DTI Secretary's ruling is exercised by two different courts, depending
on whether or not it imposes a safeguard measure, and in either case the court exercising jurisdiction does so to the exclusion of the
other. Thus, if the DTI decision involves the imposition of a safeguard measure it is the CTA which has appellate jurisdiction;
otherwise, it is the Court of Appeals. Such setup is as novel and unusual as it is cumbersome and unwise. Essentially, respondents
advocate that Section 29 of the SMA has established split appellate jurisdiction over rulings of the DTI Secretary on the imposition
of safeguard measure.

This interpretation cannot be favored, as the Court has consistently refused to sanction split jurisdiction.63 The power of the DTI
Secretary to adopt or withhold a safeguard measure emanates from the same statutory source, and it boggles the mind why the
appeal modality would be such that one appellate court is qualified if what is to be reviewed is a positive determination, and it is not
if what is appealed is a negative determination. In deciding whether or not to impose a safeguard measure, provisional or general,
the DTI Secretary would be evaluating only one body of facts and applying them to one set of laws. The reviewing tribunal will be
called upon to examine the same facts and the same laws, whether or not the determination is positive or negative.

In short, if we were to rule for respondents we would be confirming the exercise by two judicial bodies of jurisdiction over basically
the same subject matter¾precisely the split-jurisdiction situation which is anathema to the orderly administration of justice.64 The
Court cannot accept that such was the legislative motive especially considering that the law expressly confers on the CTA, the
tribunal with the specialized competence over tax and tariff matters, the role of judicial review without mention of any other court
that may exercise corollary or ancillary jurisdiction in relation to the SMA. The provision refers to the Court of Appeals but only in
regard to procedural rules and dispositions of appeals from the CTA to the Court of Appeals. 65

The principle enunciated in Tejada v. Homestead Property Corporation66 is applicable to the case at bar:

The Court agrees with the observation of the [that] when an administrative agency or body is conferred quasi-judicial
functions, all controversies relating to the subject matter pertaining to its specialization are deemed to be
included within the jurisdiction of said administrative agency or body. Split jurisdiction is not favored.67

Second. The interpretation of the provisions of the SMA favors vesting untrammeled appellate jurisdiction on the CTA.

A plain reading of Section 29 of the SMA reveals that Congress did not expressly bar the CTA from reviewing a negative
determination by the DTI Secretary nor conferred on the Court of Appeals such review authority. Respondents note, on the other
hand, that neither did the law expressly grant to the CTA the power to review a negative determination. However, under the clear
text of the law, the CTA is vested with jurisdiction to review the ruling of the DTI Secretary "in connection with the imposition of
a safeguard measure." Had the law been couched instead to incorporate the phrase "the ruling imposing a safeguard measure," then
respondent's claim would have indisputable merit. Undoubtedly, the phrase "in connection with" not only qualifies but clarifies the
succeeding phrase "imposition of a safeguard measure." As expounded later, the phrase also encompasses the opposite or converse
ruling which is the non-imposition of a safeguard measure.

In the American case of Shaw v. Delta Air Lines, Inc.,68 the United States Supreme Court, in interpreting a key provision of the
Employee Retirement Security Act of 1974, construed the phrase "relates to" in its normal sense which is the same as "if it has
connection with or reference to."69 There is no serious dispute that the phrase "in connection with" is synonymous to "relates to" or
"reference to," and that all three phrases are broadly expansive. This is affirmed not just by jurisprudential fiat, but also the
acquired connotative meaning of "in connection with" in common parlance. Consequently, with the use of the phrase "in connection
with," Section 29 allows the CTA to review not only the ruling imposing a safeguard measure, but all other rulings related or
have reference to the application for such measure.

Now, let us determine the maximum scope and reach of the phrase "in connection with" as used in Section 29 of the SMA. A
literalist reading or linguistic survey may not satisfy. Even the US Supreme Court in New York State Blue Cross Plans v. Travelers
Ins.70 conceded that the phrases "relate to" or "in connection with" may be extended to the farthest stretch of indeterminacy for,
universally, relations or connections are infinite and stop nowhere.71 Thus, in the case the US High Court, examining the same
phrase of the same provision of law involved in Shaw, resorted to looking at the statute and its objectives as the alternative to an
"uncritical literalism."72 A similar inquiry into the other provisions of the SMA is in order to determine the scope of review accorded
therein to the CTA.73
The authority to decide on the safeguard measure is vested in the DTI Secretary in the case of non-agricultural products, and in the
Secretary of the Department of Agriculture in the case of agricultural products. 74 Section 29 is likewise explicit that only the rulings
of the DTI Secretary or the Agriculture Secretary may be reviewed by the CTA. 75 Thus, the acts of other bodies that were granted
some powers by the SMA, such as the Tariff Commission, are not subject to direct review by the CTA.

Under the SMA, the Department Secretary concerned is authorized to decide on several matters. Within thirty (30) days from
receipt of a petition seeking the imposition of a safeguard measure, or from the date he made motu proprio initiation, the Secretary
shall make a preliminary determination on whether the increased imports of the product under consideration substantially cause or
threaten to cause serious injury to the domestic industry.76 Such ruling is crucial since only upon the Secretary's positive
preliminary determination that a threat to the domestic industry exists shall the matter be referred to the Tariff Commission for
formal investigation, this time, to determine whether the general safeguard measure should be imposed or not.77 Pursuant to a
positive preliminary determination, the Secretary may also decide that the imposition of a provisional safeguard measure would be
warranted under Section 8 of the SMA.78 The Secretary is also authorized to decide, after receipt of the report of the Tariff
Commission, whether or not to impose the general safeguard measure, and if in the affirmative, what general safeguard measures
should be applied.79 Even after the general safeguard measure is imposed, the Secretary is empowered to extend the safeguard
measure,80 or terminate, reduce or modify his previous rulings on the general safeguard measure.81

With the explicit grant of certain powers involving safeguard measures by the SMA on the DTI Secretary, it follows that he is
empowered to rule on several issues. These are the issues which arise in connection with, or in relation to, the imposition of a
safeguard measure. They may arise at different stages – the preliminary investigation stage, the post-formal investigation stage, or
the post-safeguard measure stage – yet all these issues do become ripe for resolution because an initiatory action has been taken
seeking the imposition of a safeguard measure. It is the initiatory action for the imposition of a safeguard measure that sets the
wheels in motion, allowing the Secretary to make successive rulings, beginning with the preliminary determination.

Clearly, therefore, the scope and reach of the phrase "in connection with," as intended by Congress, pertain to all rulings of the DTI
Secretary or Agriculture Secretary which arise from the time an application or motu proprioinitiation for the imposition of a
safeguard measure is taken. Indeed, the incidents which require resolution come to the fore only because there is an initial
application or action seeking the imposition of a safeguard measure. From the legislative standpoint, it was a matter of sense and
practicality to lump up the questions related to the initiatory application or action for safeguard measure and to assign only one
court and; that is the CTA to initially review all the rulings related to such initiatory application or action. Both directions Congress
put in place by employing the phrase "in connection with" in the law.

Given the relative expanse of decisions subject to judicial review by the CTA under Section 29, we do not doubt that a negative
ruling refusing to impose a safeguard measure falls within the scope of its jurisdiction. On a literal level, such negative ruling is "a
ruling of the Secretary in connection with the imposition of a safeguard measure," as it is one of the possible outcomes that may
result from the initial application or action for a safeguard measure. On a more critical level, the rulings of the DTI Secretary in
connection with a safeguard measure, however diverse the outcome may be, arise from the same grant of jurisdiction on the DTI
Secretary by the SMA.82 The refusal by the DTI Secretary to grant a safeguard measure involves the same grant of authority, the
same statutory prescriptions, and the same degree of discretion as the imposition by the DTI Secretary of a safeguard measure.

The position of the respondents is one of "uncritical literalism"83 incongruent with the animus of the law. Moreover, a
fundamentalist approach to Section 29 is not warranted, considering the absurdity of the consequences.

Third. Interpretatio Talis In Ambiguis Semper Fienda Est, Ut Evitur Inconveniens Et Absurdum.84

Even assuming arguendo that Section 29 has not expressly granted the CTA jurisdiction to review a negative ruling of the DTI
Secretary, the Court is precluded from favoring an interpretation that would cause inconvenience and absurdity. 85 Adopting the
respondents' position favoring the CTA's minimal jurisdiction would unnecessarily lead to illogical and onerous results.

Indeed, it is illiberal to assume that Congress had intended to provide appellate relief to rulings imposing a safeguard measure but
not to those declining to impose the measure. Respondents might argue that the right to relief from a negative ruling is not lost
since the applicant could, as Philcemcor did, question such ruling through a special civil action for certiorari under Rule 65 of the
1997 Rules of Civil Procedure, in lieu of an appeal to the CTA. Yet these two reliefs are of differing natures and gravamen. While an
appeal may be predicated on errors of fact or errors of law, a special civil action for certiorari is grounded on grave abuse of
discretion or lack of or excess of jurisdiction on the part of the decider. For a special civil action for certiorari to succeed, it is not
enough that the questioned act of the respondent is wrong. As the Court clarified in Sempio v. Court of Appeals:

A tribunal, board or officer acts without jurisdiction if it/he does not have the legal power to determine the case. There is
excess of jurisdiction where, being clothed with the power to determine the case, the tribunal, board or officer oversteps
its/his authority as determined by law. And there is grave abuse of discretion where the tribunal, board or officer acts in a
capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment as to be said to be equivalent to lack of
jurisdiction. Certiorari is often resorted to in order to correct errors of jurisdiction. Where the error is one of law or of fact,
which is a mistake of judgment, appeal is the remedy.86

It is very conceivable that the DTI Secretary, after deliberate thought and careful evaluation of the evidence, may either make a
negative preliminary determination as he is so empowered under Section 7 of the SMA, or refuse to adopt the definitive safeguard
measure under Section 13 of the same law. Adopting the respondents' theory, this negative ruling is susceptible to reversal only
through a special civil action for certiorari, thus depriving the affected party the chance to elevate the ruling on appeal on the
rudimentary grounds of errors in fact or in law. Instead, and despite whatever indications that the DTI Secretary acted with
measure and within the bounds of his jurisdiction are, the aggrieved party will be forced to resort to a gymnastic exercise,
contorting the straight and narrow in an effort to discombobulate the courts into believing that what was within was actually
beyond and what was studied and deliberate actually whimsical and capricious. What then would be the remedy of the party
aggrieved by a negative ruling that simply erred in interpreting the facts or the law? It certainly cannot be the special civil action for
certiorari, for as the Court held in Silverio v. Court of Appeals: "Certiorari is a remedy narrow in its scope and inflexible in its
character. It is not a general utility tool in the legal workshop."87

Fortunately, this theoretical quandary need not come to pass. Section 29 of the SMA is worded in such a way that it places under the
CTA's judicial review all rulings of the DTI Secretary, which are connected with the imposition of a safeguard measure. This is
sound and proper in light of the specialized jurisdiction of the CTA over tax matters. In the same way that a question of whether to
tax or not to tax is properly a tax matter, so is the question of whether to impose or not to impose a definitive safeguard measure.

On another note, the second paragraph of Section 29 similarly reveals the legislative intent that rulings of the DTI Secretary over
safeguard measures should first be reviewed by the CTA and not the Court of Appeals. It reads:

The petition for review shall comply with the same requirements and shall follow the same rules of procedure and shall be
subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of Appeals.

This is the only passage in the SMA in which the Court of Appeals is mentioned. The express wish of Congress is that the petition
conform to the requirements and procedure under Rule 43 of the Rules of Civil Procedure. Since Congress mandated that the form
and procedure adopted be analogous to a review of a CTA ruling by the Court of Appeals, the legislative contemplation could not
have been that the appeal be directly taken to the Court of Appeals.

Issue of Binding Effect of Tariff


Commission's Factual Determination
on DTI Secretary.

The next issue for resolution is whether the factual determination made by the Tariff Commission under the SMA is binding on the
DTI Secretary. Otherwise stated, the question is whether the DTI Secretary may impose general safeguard measures in the absence
of a positive final determination by the Tariff Commission.

The Court of Appeals relied upon Section 13 of the SMA in ruling that the findings of the Tariff Commission do not necessarily
constitute a final decision. Section 13 details the procedure for the adoption of a safeguard measure, as well as the steps to be taken
in case there is a negative final determination. The implication of the Court of Appeals' holding is that the DTI Secretary may adopt
a definitive safeguard measure, notwithstanding a negative determination made by the Tariff Commission.

Undoubtedly, Section 13 prescribes certain limitations and restrictions before general safeguard measures may be imposed.
However, the most fundamental restriction on the DTI Secretary's power in that respect is contained in Section 5
of the SMA¾that there should first be a positive final determination of the Tariff Commission¾which the Court of
Appeals curiously all but ignored. Section 5 reads:

Sec. 5. Conditions for the Application of General Safeguard Measures. – The Secretary shall apply a general
safeguard measure upon a positive final determination of the [Tariff] Commission that a product is being
imported into the country in increased quantities, whether absolute or relative to the domestic production, as to be a
substantial cause of serious injury or threat thereof to the domestic industry; however, in the case of non-agricultural
products, the Secretary shall first establish that the application of such safeguard measures will be in the public interest.
(emphasis supplied)

The plain meaning of Section 5 shows that it is the Tariff Commission that has the power to make a "positive final determination."
This power lodged in the Tariff Commission, must be distinguished from the power to impose the general safeguard measure which
is properly vested on the DTI Secretary.88

All in all, there are two condition precedents that must be satisfied before the DTI Secretary may impose a general safeguard
measure on grey Portland cement. First, there must be a positive final determination by the Tariff Commission that a product is
being imported into the country in increased quantities (whether absolute or relative to domestic production), as to be a substantial
cause of serious injury or threat to the domestic industry. Second, in the case of non-agricultural products the Secretary must
establish that the application of such safeguard measures is in the public interest. 89 As Southern Cross argues, Section 5 is quite
clear-cut, and it is impossible to finagle a different conclusion even through overarching methods of statutory construction. There is
no safer nor better settled canon of interpretation that when language is clear and unambiguous it must be held to mean what it
plainly expresses:90 In the quotable words of an illustrious member of this Court, thus:

[I]f a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation. The verba legis or plain meaning rule rests on the valid presumption that the words employed by the
legislature in a statute correctly express its intent or will and preclude the court from construing it differently. The
legislature is presumed to know the meaning of the words, to have used words advisedly, and to have expressed its intent
by the use of such words as are found in the statute.91

Moreover, Rule 5 of the Implementing Rules and Regulations of the SMA,92 which interprets Section 5 of the law, likewise requires a
positive final determination on the part of the Tariff Commission before the application of the general safeguard measure.

The SMA establishes a distinct allocation of functions between the Tariff Commission and the DTI Secretary. The plain meaning of
Section 5 shows that it is the Tariff Commission that has the power to make a "positive final determination." This power, which
belongs to the Tariff Commission, must be distinguished from the power to impose general safeguard measure properly vested on
the DTI Secretary. The distinction is vital, as a "positive final determination" clearly antecedes, as a condition precedent, the
imposition of a general safeguard measure. At the same time, a positive final determination does not necessarily result in the
imposition of a general safeguard measure. Under Section 5, notwithstanding the positive final determination of the Tariff
Commission, the DTI Secretary is tasked to decide whether or not that the application of the safeguard measures is in the public
interest.

It is also clear from Section 5 of the SMA that the positive final determination to be undertaken by the Tariff Commission does not
entail a mere gathering of statistical data. In order to arrive at such determination, it has to establish causal linkages from the
statistics that it compiles and evaluates: after finding there is an importation in increased quantities of the product in question, that
such importation is a substantial cause of serious threat or injury to the domestic industry.

The Court of Appeals relies heavily on the legislative record of a congressional debate during deliberations on the SMA to assert a
purported legislative intent that the findings of the Tariff Commission do not bind the DTI Secretary.93 Yet as explained earlier, the
plain meaning of Section 5 emphasizes that only if the Tariff Commission renders a positive determination could the DTI Secretary
impose a safeguard measure. Resort to the congressional records to ascertain legislative intent is not warranted if a statute is clear,
plain and free from ambiguity. The legislature is presumed to know the meaning of the words, to have used words advisedly, and to
have expressed its intent by the use of such words as are found in the statute.94

Indeed, the legislative record, if at all to be availed of, should be approached with extreme caution, as legislative debates and
proceedings are powerless to vary the terms of the statute when the meaning is clear. 95 Our holding in Civil Liberties Union v.
Executive Secretary96 on the resort to deliberations of the constitutional convention to interpret the Constitution is likewise
appropriate in ascertaining statutory intent:

While it is permissible in this jurisdiction to consult the debates and proceedings of the constitutional convention in order
to arrive at the reason and purpose of the resulting Constitution, resort thereto may be had only when other guides fail as
said proceedings are powerless to vary the terms of the Constitution when the meaning is clear. Debates in the
constitutional convention "are of value as showing the views of the individual members, and as indicating the reasons for
their votes, but they give us no light as to the views of the large majority who did not talk xxx. We think it safer to construe
the constitution from what appears upon its face."97

Moreover, it is easy to selectively cite passages, sometimes out of their proper context, in order to assert a misleading interpretation.
The effect can be dangerous. Minority or solitary views, anecdotal ruminations, or even the occasional crude witticisms, may
improperly acquire the mantle of legislative intent by the sole virtue of their publication in the authoritative congressional record.
Hence, resort to legislative deliberations is allowable when the statute is crafted in such a manner as to leave room for doubt on the
real intent of the legislature.

Section 5 plainly evinces legislative intent to restrict the DTI Secretary's power to impose a general safeguard measure by
preconditioning such imposition on a positive determination by the Tariff Commission. Such legislative intent should be given full
force and effect, as the executive power to impose definitive safeguard measures is but a delegated power¾the power of taxation, by
nature and by command of the fundamental law, being a preserve of the legislature.98 Section 28(2), Article VI of the 1987
Constitution confirms the delegation of legislative power, yet ensures that the prerogative of Congress to impose limitations and
restrictions on the executive exercise of this power:

The Congress may, by law, authorize the President to fix within specified limits, and subject to such limitations and
restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or
imposts within the framework of the national development program of the Government. 99

The safeguard measures which the DTI Secretary may impose under the SMA may take the following variations, to wit: (a) an
increase in, or imposition of any duty on the imported product; (b) a decrease in or the imposition of a tariff-rate quota on the
product; (c) a modification or imposition of any quantitative restriction on the importation of the product into the Philippines; (d)
one or more appropriate adjustment measures, including the provision of trade adjustment assistance; and (e) any combination of
the above-described actions. Except for the provision of trade adjustment assistance, the measures enumerated by the SMA are
essentially imposts, which precisely are the subject of delegation under Section 28(2), Article VI of the 1987 Constitution. 100

This delegation of the taxation power by the legislative to the executive is authorized by the Constitution itself. 101 At the same time,
the Constitution also grants the delegating authority (Congress) the right to impose restrictions and limitations on the taxation
power delegated to the President.102 The restrictions and limitations imposed by Congress take on the mantle of a constitutional
command, which the executive branch is obliged to observe.

The SMA empowered the DTI Secretary, as alter ego of the President,103 to impose definitive general safeguard measures, which
basically are tariff imposts of the type spoken of in the Constitution. However, the law did not grant him full, uninhibited discretion
to impose such measures. The DTI Secretary authority is derived from the SMA; it does not flow from any inherent executive power.
Thus, the limitations imposed by Section 5 are absolute, warranted as they are by a constitutional fiat.104

Philcemcor cites our 1912 ruling in Lamb v. Phipps105 to assert that the DTI Secretary, having the final decision on the safeguard
measure, has the power to evaluate the findings of the Tariff Commission and make an independent judgment thereon. Given the
constitutional and statutory limitations governing the present case, the citation is misplaced. Lamb pertained to the discretion of
the Insular Auditor of the Philippine Islands, whom, as the Court recognized, "[t]he statutes of the United States require[d] xxx to
exercise his judgment upon the legality xxx [of] provisions of law and resolutions of Congress providing for the payment of money,
the means of procuring testimony upon which he may act."106
Thus in Lamb, while the Court recognized the wide latitude of discretion that may have been vested on the Insular Auditor, it also
recognized that such latitude flowed from, and is consequently limited by, statutory grant. However, in this case, the provision of
the Constitution in point expressly recognizes the authority of Congress to prescribe limitations in the case of tariffs, export/import
quotas and other such safeguard measures. Thus, the broad discretion granted to the Insular Auditor of the Philippine Islands
cannot be analogous to the discretion of the DTI Secretary which is circumscribed by Section 5 of the SMA.

For that matter, Cariño v. Commissioner on Human Rights,107 likewise cited by Philcemcor, is also inapplicable owing to the
different statutory regimes prevailing over that case and the present petition. In Cariño, the Court ruled that the constitutional
power of the Commission on Human Rights (CHR) to investigate human rights' violations did not extend to adjudicating claims on
the merits.108 Philcemcor claims that the functions of the Tariff Commission being "only investigatory," it could neither decide nor
adjudicate.109

The applicable law governing the issue in Cariño is Section 18, Article XIII of the Constitution, which delineates the powers and
functions of the CHR. The provision does not vest on the CHR the power to adjudicate cases, but only to investigate all forms of
human rights violations.110 Yet, without modifying the thorough disquisition of the Court in Cariño on the general limitations on the
investigatory power, the precedent is inapplicable because of the difference in the involved statutory frameworks. The Constitution
does not repose binding effect on the results of the CHR's investigation.111 On the other hand, through Section 5 of the SMA and
under the authority of Section 28(2), Article VI of the Constitution, Congress did intend to bind the DTI Secretary to the
determination made by the Tariff Commission.112 It is of no consequence that such determination results from the exercise of
investigatory powers by the Tariff Commission since Congress is well within its constitutional mandate to limit the authority of the
DTI Secretary to impose safeguard measures in the manner that it sees fit.

The Court of Appeals and Philcemcor also rely on Section 13 of the SMA and Rule 13 of the SMA's Implementing Rules in support of
the view that the DTI Secretary may decide independently of the determination made by the Tariff Commission. Admittedly, there
are certain infelicities in the language of Section 13 and Rule 13. But reliance should not be placed on the textual imprecisions.
Rather, Section 13 and Rule 13 must be viewed in light of the fundamental prescription imposed by Section 5. 113

Section 13 of the SMA lays down the procedure to be followed after the Tariff Commission renders its report. The provision reads in
full:

SEC. 13. Adoption of Definitive Measures. — Upon its positive determination, the Commission shall recommend to the
Secretary an appropriate definitive measure, in the form of:

(a) An increase in, or imposition of, any duty on the imported product;

(b) A decrease in or the imposition of a tariff-rate quota (MAV) on the product;

(c) A modification or imposition of any quantitative restriction on the importation of the product into the Philippines;

(d) One or more appropriate adjustment measures, including the provision of trade adjustment assistance;

(e) Any combination of actions described in subparagraphs (a) to (d).

The Commission may also recommend other actions, including the initiation of international negotiations to address the
underlying cause of the increase of imports of the product, to alleviate the injury or threat thereof to the domestic industry,
and to facilitate positive adjustment to import competition.

The general safeguard measure shall be limited to the extent of redressing or preventing the injury and to facilitate
adjustment by the domestic industry from the adverse effects directly attributed to the increased imports: Provided,
however, That when quantitative import restrictions are used, such measures shall not reduce the quantity of imports
below the average imports for the three (3) preceding representative years, unless clear justification is given that a
different level is necessary to prevent or remedy a serious injury.

A general safeguard measure shall not be applied to a product originating from a developing country if its share of total
imports of the product is less than three percent (3%): Provided, however, That developing countries with less than three
percent (3%) share collectively account for not more than nine percent (9%) of the total imports.

The decision imposing a general safeguard measure, the duration of which is more than one (1) year, shall be reviewed at
regular intervals for purposes of liberalizing or reducing its intensity. The industry benefiting from the application of a
general safeguard measure shall be required to show positive adjustment within the allowable period. A general safeguard
measure shall be terminated where the benefiting industry fails to show any improvement, as may be determined by the
Secretary.

The Secretary shall issue a written instruction to the heads of the concerned government agencies to implement the
appropriate general safeguard measure as determined by the Secretary within fifteen (15) days from receipt of the report.

In the event of a negative final determination, or if the cash bond is in excess of the definitive safeguard duty assessed, the
Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs,
authorizing the return of the cash bond or the remainder thereof, as the case may be, previously collected as provisional
general safeguard measure within ten (10) days from the date a final decision has been made: Provided, That the
government shall not be liable for any interest on the amount to be returned. The Secretary shall not accept for
consideration another petition from the same industry, with respect to the same imports of the product under
consideration within one (1) year after the date of rendering such a decision.

When the definitive safeguard measure is in the form of a tariff increase, such increase shall not be subject or limited to the
maximum levels of tariff as set forth in Section 401(a) of the Tariff and Customs Code of the Philippines.

To better comprehend Section 13, note must be taken of the distinction between the investigatory and recommendatory functions of
the Tariff Commission under the SMA.

The word "determination," as used in the SMA, pertains to the factual findings on whether there are increased imports into the
country of the product under consideration, and on whether such increased imports are a substantial cause of serious injury or
threaten to substantially cause serious injury to the domestic industry. 114 The SMA explicitly authorizes the DTI Secretary to make a
preliminary determination,115 and the Tariff Commission to make the final determination.116 The distinction is fundamental, as these
functions are not interchangeable. The Tariff Commission makes its determination only after a formal investigation process, with
such investigation initiated only if there is a positive preliminary determination by the DTI Secretary under Section 7 of the
SMA.117 On the other hand, the DTI Secretary may impose definitive safeguard measure only if there is a positive final
determination made by the Tariff Commission.118

In contrast, a "recommendation" is a suggested remedial measure submitted by the Tariff Commission under Section 13 after
making a positive final determination in accordance with Section 5. The Tariff Commission is not empowered to make a
recommendation absent a positive final determination on its part.119 Under Section 13, the Tariff Commission is required to
recommend to the [DTI] Secretary an "appropriate definitive measure." 120 The Tariff Commission "may also recommend other
actions, including the initiation of international negotiations to address the underlying cause of the increase of imports of the
products, to alleviate the injury or threat thereof to the domestic industry and to facilitate positive adjustment to import
competition."121

The recommendations of the Tariff Commission, as rendered under Section 13, are not obligatory on the DTI Secretary. Nothing in
the SMA mandates the DTI Secretary to adopt the recommendations made by the Tariff Commission. In fact, the SMA requires that
the DTI Secretary establish that the application of such safeguard measures is in the public interest, notwithstanding the Tariff
Commission's recommendation on the appropriate safeguard measure based on its positive final determination. 122 The non-binding
force of the Tariff Commission's recommendations is congruent with the command of Section 28(2), Article VI of the 1987
Constitution that only the President may be empowered by the Congress to impose appropriate tariff rates, import/export quotas
and other similar measures.123 It is the DTI Secretary, as alter ego of the President, who under the SMA may impose such safeguard
measures subject to the limitations imposed therein. A contrary conclusion would in essence unduly arrogate to the Tariff
Commission the executive power to impose the appropriate tariff measures. That is why the SMA empowers the DTI Secretary to
adopt safeguard measures other than those recommended by the Tariff Commission.

Unlike the recommendations of the Tariff Commission, its determination has a different effect on the DTI Secretary. Only on the
basis of a positive final determination made by the Tariff Commission under Section 5 can the DTI Secretary impose a general
safeguard measure. Clearly, then the DTI Secretary is bound by the determinationmade by the Tariff Commission.

Some confusion may arise because the sixth paragraph of Section 13124 uses the variant word "determined" in a different context, as
it contemplates "the appropriate general safeguard measure as determined by the Secretary within fifteen (15) days from receipt of
the report." Quite plainly, the word "determined" in this context pertains to the DTI Secretary's power of choice of the appropriate
safeguard measure, as opposed to the Tariff Commission's power to determine the existence of conditions necessary for the
imposition of any safeguard measure. In relation to Section 5, such choice also relates to the mandate of the DTI Secretary to
establish that the application of safeguard measures is in the public interest, also within the fifteen (15) day period. Nothing in
Section 13 contradicts the instruction in Section 5 that the DTI Secretary is allowed to impose the general safeguard measures only
if there is a positive determination made by the Tariff Commission.

Unfortunately, Rule 13.2 of the Implementing Rules of the SMA is captioned "Final Determination by the Secretary." The
assailed Decision and Philcemcor latch on this phraseology to imply that the factual determination rendered by the Tariff
Commission under Section 5 may be amended or reversed by the DTI Secretary. Of course, implementing rules should conform, not
clash, with the law that they seek to implement, for a regulation which operates to create a rule out of harmony with the statute is a
nullity.125 Yet imperfect draftsmanship aside, nothing in Rule 13.2 implies that the DTI Secretary can set aside the determination
made by the Tariff Commission under the aegis of Section 5. This can be seen by examining the specific provisions of Rule 13.2,
thus:

RULE 13.2. Final Determination by the Secretary

RULE 13.2.a. Within fifteen (15) calendar days from receipt of the Report of the Commission, the Secretary shall
make a decision, taking into consideration the measures recommended by the Commission.

RULE 13.2.b. If the determination is affirmative, the Secretary shall issue, within two (2) calendar days after
making his decision, a written instruction to the heads of the concerned government agencies to immediately
implement the appropriate general safeguard measure as determined by him. Provided, however, that in the case
of non-agricultural products, the Secretary shall first establish that the imposition of the safeguard measure will
be in the public interest.
RULE 13.2.c. Within two (2) calendar days after making his decision, the Secretary shall also order its publication
in two (2) newspapers of general circulation. He shall also furnish a copy of his Order to the petitioner and other
interested parties, whether affirmative or negative. (Emphasis supplied.)

Moreover, the DTI Secretary does not have the power to review the findings of the Tariff Commission for it is not subordinate to the
Department of Trade and Industry ("DTI"). It falls under the supervision, not of the DTI nor of the Department of Finance (as
mistakenly asserted by Southern Cross),126 but of the National Economic Development Authority, an independent
planning agency of the government of co-equal rank as the DTI.127 As the supervision and control of a Department
Secretary is limited to the bureaus, offices, and agencies under him,128 the DTI Secretary generally cannot exercise review authority
over actions of the Tariff Commission. Neither does the SMA specifically authorize the DTI Secretary to alter, amend or modify in
any way the determination made by the Tariff Commission. The most that the DTI Secretary could do to express displeasure over
the Tariff Commission's actions is to ignore its recommendation, but not its determination.

The word "determination" as used in Rule 13.2 of the Implementing Rules is dissonant with the same word as employed in the SMA,
which in the latter case is undeviatingly in reference to the determination made by the Tariff Commission. Beyond the resulting
confusion, however, the divergent use in Rule 13.2 is explicable as the Rule textually pertains to the power of the DTI Secretary to
review the recommendations of the Tariff Commission, not the latter's determination. Indeed, an examination of the specific
provisions show that there is no real conflict to reconcile. Rule 13.2 respects the logical order imposed by the SMA. The Rule does
not remove the essential requirement under Section 5 that a positive final determination be made by the Tariff Commission before a
definitive safeguard measure may be imposed by the DTI Secretary.

The assailed Decision characterizes the findings of the Tariff Commission as merely recommendatory and points to the DTI
Secretary as the authority who renders the final decision. 129 At the same time, Philcemcor asserts that the Tariff Commission's
functions are merely investigatory, and as such do not include the power to decide or adjudicate. These contentions, viewed in the
context of the fundamental requisite set forth by Section 5, are untenable. They run counter to the statutory prescription that a
positive final determination made by the Tariff Commission should first be obtained before the definitive safeguard measures may
be laid down.

Was it anomalous for Congress to have provided for a system whereby the Tariff Commission may preclude the DTI, an office of
higher rank, from imposing a safeguard measure? Of course, this Court does not inquire into the wisdom of the legislature but only
charts the boundaries of powers and functions set in its enactments. But then, it is not difficult to see the internal logic of this
statutory framework.

For one, as earlier stated, the DTI cannot exercise review powers over the Tariff Commission which is not its subordinate office.

Moreover, the mechanism established by Congress establishes a measure of check and balance involving two different
governmental agencies with disparate specializations. The matter of safeguard measures is of such national importance that a
decision either to impose or not to impose then could have ruinous effects on companies doing business in the Philippines. Thus, it
is ideal to put in place a system which affords all due deliberation and calls to fore various governmental agencies exercising their
particular specializations.

Finally, if this arrangement drawn up by Congress makes it difficult to obtain a general safeguard measure, it is because such
safeguard measure is the exception, rather than the rule. The Philippines is obliged to observe its obligations under the GATT,
under whose framework trade liberalization, not protectionism, is laid down. Verily, the GATT actually prescribes conditions before
a member-country may impose a safeguard measure. The pertinent portion of the GATT Agreement on Safeguards reads:

2. A Member may only apply a safeguard measure to a product only if that member has determined, pursuant to the
provisions set out below, that such product is being imported into its territory in such increased quantities, absolute or
relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the domestic
industry that produces like or directly competitive products.130

3. (a) A Member may apply a safeguard measure only following an investigation by the competent authorities of that
Member pursuant to procedures previously established and made public in consonance with Article X of the GATT 1994.
This investigation shall include reasonable public notice to all interested parties and public hearings or other appropriate
means in which importers, exporters and other interested parties could present evidence and their views, including the
opportunity to respond to the presentations of other parties and to submit their views, inter alia, as to whether or not the
application of a safeguard measure would be in the public interest. The competent authorities shall publish a report setting
forth their findings and reasoned conclusions reached on all pertinent issues of fact and law.131

The SMA was designed not to contradict the GATT, but to complement it. The two requisites laid down in Section 5 for a positive
final determination are the same conditions provided under the GATT Agreement on Safeguards for the application of safeguard
measures by a member country. Moreover, the investigatory procedure laid down by the SMA conforms to the procedure required
by the GATT Agreement on Safeguards. Congress has chosen the Tariff Commission as the competent authority to conduct such
investigation. Southern Cross stresses that applying the provision of the GATT Agreement on Safeguards, the Tariff Commission is
clearly empowered to arrive at binding conclusions.132 We agree: binding on the DTI Secretary is the Tariff Commission's
determinations on whether a product is imported in increased quantities, absolute or relative to domestic production and whether
any such increase is a substantial cause of serious injury or threat thereof to the domestic industry.133

Satisfied as we are with the proper statutory paradigm within which the SMA should be analyzed, the flaws in the reasoning of the
Court of Appeals and in the arguments of the respondents become apparent. To better understand the dynamics of the procedure
set up by the law leading to the imposition of definitive safeguard measures, a brief step-by-step recount thereof is in order.
1. After the initiation of an action involving a general safeguard measure,134 the DTI Secretary makes a preliminary determination
whether the increased imports of the product under consideration substantially cause or threaten to substantially cause serious
injury to the domestic industry,135 and whether the imposition of a provisional measure is warranted under Section 8 of the
SMA.136 If the preliminary determination is negative, it is implied that no further action will be taken on the application.

2. When his preliminary determination is positive, the Secretary immediately transmits the records covering the application to the
Tariff Commission for immediate formal investigation.137

3. The Tariff Commission conducts its formal investigation, keyed towards making a final determination. In the process, it holds
public hearings, providing interested parties the opportunity to present evidence or otherwise be heard.138 To repeat, Section 5
enumerates what the Tariff Commission is tasked to determine: (a) whether a product is being imported into the country in
increased quantities, irrespective of whether the product is absolute or relative to the domestic production; and (b) whether the
importation in increased quantities is such that it causes serious injury or threat to the domestic industry.139 The findings of the
Tariff Commission as to these matters constitute the final determination, which may be either positive or negative.

4. Under Section 13 of the SMA, if the Tariff Commission makes a positive determination, the Tariff Commission "recommends to
the [DTI] Secretary an appropriate definitive measure." The Tariff Commission "may also recommend other actions, including the
initiation of international negotiations to address the underlying cause of the increase of imports of the products, to alleviate the
injury or threat thereof to the domestic industry, and to facilitate positive adjustment to import competition."140

5. If the Tariff Commission makes a positive final determination, the DTI Secretary is then to decide, within fifteen (15) days from
receipt of the report, as to what appropriate safeguard measures should he impose.

6. However, if the Tariff Commission makes a negative final determination, the DTI Secretary cannot impose any definitive
safeguard measure. Under Section 13, he is instructed instead to return whatever cash bond was paid by the applicant upon the
initiation of the action for safeguard measure.

The Effect of the Court's Decision

The Court of Appeals erred in remanding the case back to the DTI Secretary, with the instruction that the DTI Secretary may
impose a general safeguard measure even if there is no positive final determination from the Tariff Commission. More crucially, the
Court of Appeals could not have acquired jurisdiction over Philcemcor's petition for certiorari in the first place, as Section 29 of the
SMA properly vests jurisdiction on the CTA. Consequently, the assailed Decision is an absolute nullity, and we declare it as such.

What is the effect of the nullity of the assailed Decision on the 5 June 2003 Decision of the DTI Secretary imposing the general
safeguard measure? We have recognized that any initial judicial review of a DTI ruling in connection with the imposition of a
safeguard measure belongs to the CTA. At the same time, the Court also recognizes the fundamental principle that a null and void
judgment cannot produce any legal effect. There is sufficient cause to establish that the 5 June 2003 Decision of the DTI Secretary
resulted from the assailed Court of Appeals Decision, even if the latter had not yet become final. Conversely, it can be concluded
that it was because of the putative imprimatur of the Court of Appeals' Decision that the DTI Secretary issued his ruling imposing
the safeguard measure. Since the 5 June 2003 Decision derives its legal effect from the void Decision of the Court of Appeals, this
ruling of the DTI Secretary is consequently void. The spring cannot rise higher than the source.

The DTI Secretary himself acknowledged that he drew stimulating force from the appellate court's Decision for in his own 5 June
2003 Decision, he declared:

From the aforementioned ruling, the CA has remanded the case to the DTI Secretary for a final decision. Thus, there is no
legal impediment for the Secretary to decide on the application.141

The inescapable conclusion is that the DTI Secretary needed the assailed Decision of the Court of Appeals to justify his rendering a
second Decision. He explicitly invoked the Court of Appeals' Decision as basis for rendering his 5 June 2003 ruling, and implicitly
recognized that without such Decision he would not have the authority to revoke his previous ruling and render a new, obverse
ruling.

It is clear then that the 25 June 2003 Decision of the DTI Secretary is a product of the void Decision, it being an attempt to carry out
such null judgment. There is therefore no choice but to declare it void as well, lest we sanction the perverse existence of a fruit from
a non-existent tree. It does not even matter what the disposition of the 25 June 2003 Decision was, its nullity would be warranted
even if the DTI Secretary chose to uphold his earlier ruling denying the application for safeguard measures.

It is also an unfortunate spectacle to behold the DTI Secretary, seeking to enforce a judicial decision which is not yet final and
actually pending review on appeal. Had it been a judge who attempted to enforce a decision that is not yet final and executory, he or
she would have readily been subjected to sanction by this Court. The DTI Secretary may be beyond the ambit of administrative
review by this Court, but we are capacitated to allocate the boundaries set by the law of the land and to exact fealty to the legal
order, especially from the instrumentalities and officials of government.

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals is DECLARED NULL AND VOID and
SET ASIDE. The Decision of the DTI Secretary dated 25 June 2003 is also DECLARED NULL AND VOID and SET ASIDE. No
Costs.
SO ORDERED.

G.R. No. 76633 October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner,


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

Jimenea, Dala & Zaragoza Law Office for petitioner.

The Solicitor General for public respondent.

Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.:

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

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

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

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

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

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

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

Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as "employment of a worker
outside the Philippines, including employment on board vessels plying international waters, covered by a valid contract. 3 A
contract worker is described as "any person working or who has worked overseas under a valid employment contract and shall
include seamen" 4 or "any person working overseas or who has been employed by another which may be a local employer, foreign
employer, principal or partner under a valid employment contract and shall include seamen." 5 These definitions clearly apply to
Vitaliano Saco for it is not disputed that he died while under a contract of employment with the petitioner and alongside the
petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign country. 6

It is worth observing that the petitioner performed at least two acts which constitute implied or tacit recognition of the nature of
Saco's employment at the time of his death in 1985. The first is its submission of its shipping articles to the POEA for processing,
formalization and approval in the exercise of its regulatory power over overseas employment under Executive Order NO. 797. 7 The
second is its payment 8 of the contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was
created by P.D. No. 1694 "for the purpose of providing social and welfare services to Filipino overseas workers."

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

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

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

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

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

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

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

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

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

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

Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to step into the
shoes of the legislature and exercise a power essentially legislative.

The principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important
in the case of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when
executive or judicial powers have to be delegated by the authorities to which they legally certain. In the case of the legislative power,
however, such occasions have become more and more frequent, if not necessary. This had led to the observation that the delegation
of legislative power has become the rule and its non-delegation the exception.
The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope directly with
the myriad problems demanding its attention. The growth of society has ramified its activities and created peculiar and
sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has
become necessary. To many of the problems attendant upon present-day undertakings, the legislature may not have the
competence to provide the required direct and efficacious, not to say, specific solutions. These solutions may, however, be expected
from its delegates, who are supposed to be experts in the particular fields assigned to them.

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

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

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

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

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

Section C. Compensation and Benefits.—

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

a. P220,000.00 for master and chief engineers

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

c. P 130,000.00 for ratings.

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

3. ...

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

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

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

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

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

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

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

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

G.R. No. 77707 August 8, 1988

PEDRO W. GUERZON, petitioner,


vs.
COURT OF APPEALS, BUREAU OF ENERGY UTILIZATION, F. C. CAASI JR., and PILIPINAS SHELL
PETROLEUM CORPORATION, respondents.

Llego, Llego & Collera for petitioner.

Florentino G. Dumlao, Jr. for respondent Pilipinas Shell Petroleum Corporation.

CORTES, J.:

Raised by petitioner to this Court is the issue of whether or not the Bureau of Energy Utilization, the agency charged with regulating
the operations and trade practices of the petroleum industry, has the power to order a service station operator-lessee to vacate the
service station and to turn over its possession to the oil company-lessor upon the expiration of the dealership and lease agreements.

The facts, as found by the Court of Appeals, are as follows:

Basic antecedent facts show that on January 9, 1981 petitioner Pedro Guerzon executed with Basic Landoil
Energy Corporation, which was later acquired by respondent Pilipinas Shell Petroleum Corporation, a contract
denominated as "Service Station Lease" for the use and operation of respondent SHELL's properties, facilities
and equipment, which included four (4) pieces of fuel dispensing Pumps and one (1) piece air compressor, for a
period of five (5) years from January 15, 1981 and ending on January 14, 1986. On January 7, 1981 petitioner
likewise executed with the same Corporation a "Dealer's Sales Contract" for the sale by petitioner of respondent
SHELL's petroleum and other products in the leased service station which contract expired April 12,1986. On
April 13,1981, respondent Bureau of Energy Utilization (BEU) approved the Dealer's Sales Contract pursuant to
which petitioner was appointed dealer of SHELL's gasoline and other petroleum products which he was to sell at
the gasoline station located at Cagayan de Oro City. On the same day, respondent BEU issued a certificate of
authority in petitioner's favor, which had a 5-year period of validity, in line with the terms of the contract.

Paragraph 9 of the Service Station Lease Contract provides:

The cancellation or termination of the Dealer's Sales Contract executed between the COMPANY
and the LESSEE on January 7,1981 shall automatically cancel this Lease.

As early as January 2, 1986 respondent SHELL through its District Manager—Reseller Mindanao wrote to
petitioner informing him that the Company was not renewing the Dealer's Sales Contract which was to expire on
April 12, 1986 together with the service station lease and reminding him to take appropriate steps to wind up his
business activities at the station and, on the appropriate date to hand over the station with all its facilities and
equipment to the representative of respondent. A copy of this letter was furnished respondent BEU, through the
latter's Mindanao Division Office. On April 12, 1986, respondent SHELL wrote petitioner reiterating the decision
not to extend the Dealer's Sales Contract, demanding the surrender of the station premises and all company
owned equipment to the respondent's representative.
On April 15, 1986 respondent BEU, through respondent Caasi, Jr., officer- in-charge of its Mindanao Division
Office, issued the assailed order directing the petitioner as follows:

(1) immediately vacate the service station abovementioned and turn it over to Pilipinas Shell
Petroleum Corporation; and

(2) show cause in writing, under oath within ten (10) days from receipt hereof why no
administrative and/or criminal proceedings shall be instituted against you for the aforesaid
violation.

The order directed that a copy of the same be furnished the PCINP Commander of Cagayan de Oro City,
requesting prompt and effective enforcement of the directive and submitting to the BEU of the result of the action
taken thereon.

On April 22, 1986, pursuant to the order of April 15, 1986, respondent SHELL, accompanied by law enforcement
officers, was able to secure possession of the gasoline station in question together with the requisite equipments
and accessories, and turned them over to the control of the personnel of respondent SHELL who accompanied
them.

On May 9, 1986, petitioner filed with the Regional Trial Court of Misamis Oriental a complaint for certiorari,
injunction and damages with preliminary mandatory injunction (Civil Case No. 10619) to annul the disputed
order dated April 15, 1986 of respondent F.C. Caasi, Jr., but on September 18,1986 this complaint was dismissed
for lack of jurisdiction to annul the order of a quasi-judicial body of equivalent category as the Regional Trial
Court. [Rollo, pp. 37-39.]

Thus, petitioner filed in the Court of Appeals a petition for certiorari with a prayer for preliminary mandatory injunction against
Pilipinas Shell Petroleum Corporation, F.C. Caasi, Jr. and the Bureau of Energy Utilization seeking the annulment of respondent
Caasi, Jr.'s order dated April 15, 1986 and the restoration to petitioner of possession of the service station and the equipment
removed therefrom.

In a decision promulgated on February 10, 1987, the Court of Appeals denied due course and dismissed the petition after holding
the disputed order valid and the proceedings undertaken to implement the same sanctioned by Presidential Decree No. 1206, as
amended.

Hence, petitioner's recourse to this Court.

In his petition for review, petitioner ascribed the following errors to the Court of Appeals:

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT BUREAU OF ENERGY UTILIZATION
HAS JURISDICTION TO EJECT THE PETITIONER FROM THE GASOLINE SERVICE STATION LEASED.

II

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THERE IS NO NECESSITY OF ANY NOTICE AND
HEARING PRIOR TO THE ISSUANCE OF THE DISPUTED ORDER ISSUED BY RESPONDENT BUREAU OF ENERGY
UTILIZATION ORDERING THE PETITIONER TO VACATE THE LEASED PREMISES. [Rollo, p. 13]

The controversy revolves around the assailed order issued by respondent F.C. Caasi, Jr., Officer-in-Charge of the Mindanao
Division Office of the Bureau of Energy Utilization, which reads:

15 April 1986

Mr. Pedro W. Guerzon

Corner Velez-Recto Streets

Cagayan de Oro City

Sir:

We were officially informed by Pilipinas Shell Petroleum Corporation that you refused to vacate its company-
owned service station at the above address despite the fact that you were advised by Shell in its letter of
January 02, 1986 that it will not renew the Dealer's Sales Contract between yourself and the company upon its
expiration on April 12,1986.
Your continued occupancy of the service station is not only considered a violation of BEU laws, rules and
regulations but is also detrimental to the interests of the parties concerned and the public.

In view thereof, you are hereby directed to:

(1) immediately vacate the service station abovementioned and turn it over to Pilipinas Shell Petroleum
Corporation; and

(2) show cause in writing, under oath within ten (1O) days from receipt hereof why no administrative and/or
criminal proceedings shall be instituted against you for the aforesaid violation.

Let a copy of this directive be furnished the PC-INP Commander of Cagayan de Oro City, who is hereby requested
to cause the prompt and effective enforcement hereof and to submit to this Bureau the result/s of the action/s
taken thereon.

Very truly yours,

(Sgd.) F.C. CAASI JR.

Officer-in-Charge

cc: PC/INP Commander

Cagayan de Oro City Pilipinas Shell Petroleum Corporation

Sasa, Davao City/Cagayan de Oro City

BEU-Manila

[Rollo, p. 122; Emphasis supplied.]

As stated at the outset, whether or not it is within the jurisdiction of the Bureau of Energy Utilization to issue the above order is the
primary issue to be resolved.

The Solicitor General contends that since petitioner's license to sell petroleum products expired on April 12,1986, when his
dealership and lease contracts expired, as of the following day, April 13, 1986 he was engaged in illegal trading in petroleum
products in violation of Batas Pambansa Blg. 33 [Rollo, pp. 100-101.] The pertinent provisions of B.P. No. 33 state:

Sec. 2. Prohibited Acts.—The following acts are prohibited and penalized:

(a) Illegal trading in petroleum and/or petroleum products;

xxx xxx xxx

Sec. 3. Definition of terms.—For the purposes of this Act, the si following terms shall be understood to mean:

Illegal trading in petroleum and/or petroleum products-the sale or distribution of petroleum products for profit
without license or authority from the Government; non-issuance of receipts by licensed traders;
misrepresentation as to quality and/or quantity; an sa oil companies, distributors and/or dealers violative of
government rules and regulations.

xxx xxx xxx

Thus, concludes the Solicitor General, the Bureau of Energy nation had the power to issue, and was justified in issuing, the order to
vacate pursuant to Presidential Decree No. 1206, as amended, the pertinent portion of which provides:

Sec. 7. Bureau of Energy Utilization.—There is created in the Department a Bureau of Energy Utilization,
hereafter referred to in this Section as the Bureau, which shall have the following powers and functions, among
others:

xxx xxx xxx

e. After due notice and hearing, impose and collect a fine not exceeding One Thousand Pesos, for every violation
or non-compliance with any term or condition of any certificate, license, or permit issued by the Bureau or of any
of its orders, decisions, rules and regulations.
The fine so imposed shall be paid to the Bureau, and failure to pay the fine within the time specified in the order
or decision of the Bureau or failure to cease and discontinue the violation or noncompliance shall be deemed good
and sufficient reason for the suspension, closure or stoppage of operations of the establishment of the person
guilty of the violation or non-compliance. In case the violation or default is committed by a corporation or
association, the manager or person who has charge of the management of the corporation or association and the
officers or directors thereof who have ordered or authorized the violation or default shall be solidarily liable for
the payment of the fine.

The Bureau shall have the power and authority to issue corresponding writs of execution directing the City Sheriff
or provincial Sheriff or other peace officers whom it may appoint to enforce the fine or the order of closure,
suspension or stoppage of operations. Payment may also be enforced by appropriate action brought in a court of
competent jurisdiction. The remedy provided herein shall not be a bar to or affect any other remedy under
existing laws, but shall be cumulative and additional to such remedies;

xxx xxx xxx

However, the Solicitor General's line of reasoning is fatally flawed by the failure of the facts to support it. From a cursory reading of
the assailed order, it is readily apparent that the order is premised on petitioner's refusal to vacate the service station in spite of the
expiration and non-renewal of his dealership and lease agreements with respondent Shell. Nowhere in the order is it stated that
petitioner had engaged in illegal trading in petroleum products or had committed any other violation of B.P. Blg. 33. The order
merely makes a vague reference to a "violation of BEU laws, rules and regulations," without stating the specific provision violated.
That petitioner had engaged in illegal trading in petroleum products cannot even be implied from the wording of the assailed order.

But then, even if petitioner was indeed engaged in illegal trading in petroleum products, there was no basis under B.P. Blg. 33 to
order him to vacate the service station and to turn it over to respondent Shell. Illegal trading in petroleum products is a criminal act
wherein the injured party is the State. Respondent Shell is not even alleged by the Solicitor General as a private party prejudiced
and, therefore, it can claim no relief if a criminal case is instituted. *

Even on the assumption that petitioner's continued occupancy and operation of the service station constituted a violation of a law or
regulation, still the Court has no recourse but to rule against the legality of the order, the Bureau of Energy Utilization not being
empowered to issue it. Section 7 of P.D. No. 1206, as amended, is very clear as to the courses of action that the Bureau of Energy
Utilization may take in case of a violation or non- compliance with any term or condition of any certificate, license or permit issued
by the Bureau or any of its orders, decisions, rules or regulations. The Bureau may: (1) impose a fine not exceeding P1,000.00; and
(2) in case of failure to pay the fine imposed or to cease and discontinue the violation or non-compliance, order the suspension,
closure or stoppage of operations of the establishment of the guilty party. Its authority is limited to these two (2) options. It can do
no more, as there is nothing in P.D. No. 1206, as amended, which empowers the Bureau to issue an order to vacate in case of a
violation.

As it is, jurisdiction to order a lessee to vacate the leased premises is vested in the civil courts in an appropriate case for unlawful
detainer or accion publiciana [Secs. 19(2) and 33(2), B.P. Blg. 129, as amended.] There is nothing in P.D. No. 1206, as amended,
that would suggest that the same or similar jurisdiction has been granted to the Bureau of Energy Utilization. It is a fundamental
rule that an administrative agency has only such powers as are expressly granted to it by law and those that are necessarily implied
in the exercise thereof [Makati Stock Exchange, Inc. v. Securities and Exchange Commission, G.R. No. L-23004, June 30,1965,14
SCRA 620; Sy v. Central Bank, G.R. No. L-41480, April 30, 1976, 70 SCRA 570.] That issuing the order to vacate was the most
effective way of stopping any illegal trading in petroleum products is no excuse for a deviation from this rule. Otherwise, adherence
to the rule of law would be rendered meaningless.

Moreover, contrary to the Solicitor General's theory, the text of the assailed order leaves no room for doubt that it was issued in
connection with an adjudication of the contractual dispute between respondent Shell and petitioner. But then the Bureau of Energy
Utilization, like its predecessor, the defunct Oil Industry Commission, has no power to decide contractual disputes between gasoline
dealers and oil companies, in the absence of an express provision of law granting to it such power [see Pilipinas Shell Petroleum
Corp. v. Oil Industry Commission, G.R. No. L-41315, November 13, 1986,145 SCRA 433.] As explicitly stated in the law, in
connection with the exercise of quasi-judicial powers, the Bureau's jurisdiction is limited to cases involving violation or non-
compliance with any term or condition of any certificate, license or permit issued by it or of any of its orders, decisions, rules or
regulations.

Viewed from any angle, respondent F.C. Caasi, Jr., in issuing the assailed order, acted beyond his authority and overstepped the
powers granted by P.D. No. 1206, as amended. The assailed order was, therefore, null and void.

Even if the issuance of the order to vacate was within the authority of respondent Caasi, Jr., still its nullity is apparent because of
the failure to comply with the requirement of notice and hearing. That P.D. No. 1206, as amended, requires notice and hearing
before any administrative penalty provided in Sec. (7)e may be imposed is patent. Sec. (7)e provides for a gradation of penalties of
which the imposition of a fine in an amount not exceeding P1,000.00 is the least severe, and requires that even before a fine is
imposed notice and an opportunity to be heard be given to the offender.

While the order dated April 15, 1986 is null and void, the Court, however, finds itself unable to issue the writ of mandatory
injunction prayed for ordering respondent Shell to restore possession of the service station and the equipment and facilities therein
to petitioner. Petitioner himself had admitted in his petition that his dealership and lease agreements with respondent Shell had
already expired. Recognized the validity of the termination of the agreements, he requested for their renewal. However, this request
was denied. [Rollo, p. 9] Undeniably, after April 12, 1986, any right petitioner had to possess the service station and the equipment
and facilities therein had been extinguished. No basis for an affirmative relief therefore exist.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals dated February 10, 1987 is REVERSED and the Order
dated April 15,1986 issued by respondent Caasi, Jr. of the Bureau of Energy Utilization is ANNULLED and SET ASIDE.

However, the right of petitioner to the possession of the service station and the equipment and facilities having been extinguished,
the prayer for the issuance of a writ of mandatory injunction is DENIED.

SO ORDERED.

G.R. No. 163980 August 3, 2006

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

DECISION

TINGA, J.:

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

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

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

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

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

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

In view of the rapid increase in population density in the portion excluded by Proclamation No. 137 from the coverage of
Proclamation No. 1826, former President Fidel Ramos issued Proclamation No. 248 on September 7, 1993, authorizing the vertical
development of the excluded portion to maximize the number of families who can effectively become beneficiaries of the
government’s socialized housing program. 3

On May 14, 2003, President Gloria Macapagal-Arroyo signed into law R.A. No. 9207. Among the salient provisions of the law are
the following:

Sec. 2. Declaration of Policy. – It is hereby declared the policy of the State to secure the land tenure of the urban poor. Toward this
end, lands located in the NGC, Quezon City shall be utilized for housing, socioeconomic, civic, educational, religious and other
purposes.
Sec. 3. Disposition of Certain Portions of the National Government Center Site to Bona Fide Residents. – Proclamation No. 1826,
Series of 1979, is hereby amended by excluding from the coverage thereof, 184 hectares on the west side and 238 hectares on the
east side of Commonwealth Avenue, and declaring the same open for disposition to bona fide residents therein: Provided, That the
determination of the bona fide residents on the west side shall be based on the census survey conducted in 1994 and the
determination of the bona fide residents on the east side shall be based on the census survey conducted in 1994 and occupancy
verification survey conducted in 2000: Provided, further, That all existing legal agreements, programs and plans signed, drawn up
or implemented and actions taken, consistent with the provisions of this Act are hereby adopted.

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

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

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

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

First, the procedural matters.

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

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

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

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

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

The cited breaches are mortal. The petition deserves to be spurned as a consequence.
Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers.
Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated legislation that is
within the confines of the granting statute and the doctrine of non-delegability and separability of powers. 12

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

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

Since the regular courts have jurisdiction to pass upon the validity of the assailed IRR issued by the Committee in the exercise of its
quasi-legislative power, the judicial course to assail its validity must follow the doctrine of hierarchy of courts. Although the
Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted
freedom of choice of court forum. 15

True, this Court has the full discretionary power to take cognizance of the petition filed directly with it if compelling reasons, or the
nature and importance of the issues raised, so warrant. 16 A direct invocation of the Court’s original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. 17

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

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

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

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

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

Petitioners assail the following provisions of the IRR:

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

3.1. Period for Qualification of Beneficiaries

xxxx

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

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

xxxx

3.2. Execution of the Contract to Sell

(a) Westside

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

xxxx

(c) for both eastside and westside

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In subordinate legislation, as long as the passage of the rule or regulation had the benefit of a hearing, the procedural due process
requirement is deemed complied with. That there is observance of more than the minimum requirements of due process in the
adoption of the questioned IRR is not a ground to invalidate the same.

In sum, the petition lacks merit and suffers from procedural deficiencies.

WHEREFORE, the instant petition for prohibition is DISMISSED. Costs against petitioners.

SO ORDERED.

[G.R. No. 114711. February 13, 1997]

GARMENTS and TEXTILE EXPORT BOARD (GTEB), petitioner, vs. COURT OF APPEALS and AMERICAN INTER-
FASHION CORPORATION, respondents.

[G.R. No. 115889. February 13, 1997]

AMERICAN INTER-FASHION CORPORATION, petitioner, vs. GLORIOUS SUN FASHION GARMENTS


MANUFACTURING (PHILS.), INC. and GARMENTS and TEXTILE EXPORT BOARD
(GTEB), respondents.

DECISION
HERMOSISIMA, JR., J.:

The doctrine of "primary jurisdiction" of Government administrative agencies has herein come into play. Should courts of
justice interfere with their purely administrative and discretionary functions and have supervisory powers over their proceedings
and actions involving the exercise of judgment and findings of fact? Verily, over matters falling under their jurisdiction, we have
repeatedly held that administrative agencies are in a better position to pass judgment thereon and their findings of fact in that
regard are generally accorded respect, if not finality, by the courts.[1]
In this connection, the Garments and Textile Export Board (GTEB) filed the herein petition for Certiorari from the January
21, 1994 Decision and the March 22, 1994 Resolution of the Court of Appeals in CA-G.R. SP No. 31596 (G.R. No. 114711). Up for our
resolution likewise is the petition for Certiorari filed by the American Inter-Fashion Corporation (AIFC) against the GTEB
Resolution of June 21, 1994 (G.R. No. 115889). These petitions, being interrelated, were ordered consolidated.
Antecedent facts to set us on a proper perspective are those lucidly set out by the Court of Appeals:

"Petitioner American Inter-Fashion Corporation (AIFC) was a corporation organized under Philippine Laws engaged in the
business of manufacturing and exporting garments. Prior to its incorporation, the original incorporators of AIFC were awarded the
initial export quota (EQ) allocation by virtue of the resolution of the Garments & Export Textile Board (GTEB) dated July 30, 1984.

Before AIFC's incorporation, Glorious Sun, a corporation organized under Philippine Laws sometime in 1977, was a recipient of a
substantial number of EQ allocations from the GTEB. On April 27, 1984, Glorious Sun was charged before the GTEB in OSC No. 84-
B-1 with, and was found guilty of, misdeclaration of values of its imported raw materials resulting in dollar salting, and other related
frauds, in connection with its importations in 1983. As a result, the EQs of Glorious Sun as well as its license to operate a bonded
manufacturing warehouse were cancelled and its stockholders and officers were disqualified from engaging in garment exports. Its
export quotas were thereafter given to two newly-formed corporations the De Soleil Apparel Manufacturing Corporation (De Soleil)
and the herein petitioner American Inter-Fashion Corporation (AIFC). These corporations were joint ventures of Hongkong
investors and majority stockholders of Glorious Sun on one hand and, allegedly, one member of the family and one crony of
President Marcos on the other (American Inter-Fashion Corp. vs. Office of the President, 197 SCRA 409, 413 & 414 [1991]). The
cancelled EQs of Glorious Sun which were given to AIFC pertains to those under Cat 347/8 equivalent to 113,341-3 dozens which
are the subject of dispute between GTEB and petitioner. Glorious Sun continues to claim its rights over the aforementioned EQ.

In the meantime, AIFC was able to maintain its EQ from 1984 up to the time of the filing of this petition (except for a brief period
between 1986 and 1989 when AIFC was placed under sequestration) by continuously exporting or shipping out at least 95% of its
current allocation as required by the rules and regulations of the GTEB. This fact was not denied by the respondents.

With the establishment of a new government in 1986, Glorious Sun, on September 7, 1989, filed an appeal with the Office of the
President, which, in turn, set aside the GTEB decision adverse to Glorious Sun and remanded the case for genuine hearings where
due process would be accorded both parties (supra). This decision was upheld by the Supreme Court in a petition docketed as G.R.
No. 92422 and entitled American Inter-Fashion Corporation vs. Office of the President, GTEB and Glorious Sun. On May 23, 1991
and July 2, 1991, the Supreme Court, after finding that 'x x x American Inter-Fashion x x x. was created obviously to be the recipient
of export quotas arbitrarily removed from the rightful owner [Glorious Sun]', affirmed the decision of the Office of the President
remanding the case for further proceedings to the GTEB (supra, p. 426).

Pending its appeal to the Office of the President, Glorious Sun filed before the Securities and Exchange Commission (SEC) a
Petition to Declare the Forfeiture of the Registration of AIFC on June 16, 1987. This was docketed as SEC-AC No. 319. On May 24,
1990, the PED ordered the revocation of AIFC's registration on the ground of 'fraud'. AIFC thereafter appealed to the SEC en banc,
but the latter upheld the revocation on May 22, 1992. The subsequent Motion for Reconsideration of AIFC was also denied by the
SEC on September 16, 1992.

On September 30, 1992, the Petition for Review filed by AIFC before this Court docketed as CA-G.R. No. 29017 was denied for
having been filed beyond the reglementary period. This denial was upheld by the Supreme Court (3rd Division) in a Petition for
Review docketed as G.R. No. 107742. AIFC's subsequent Motion for Reconsideration was likewise denied on February 17, 1993 and
on July 1, 1993, the Supreme Court, en banc, upheld the cancellation of petitioner's certificate of registration with finality.

Meanwhile, on August 20, 1992, after further proceedings were conducted in OSC No. 84-B-1 concerning Glorious Sun's alleged
violations and frauds, the GTEB adopted a resolution which reads as follows:

'NOW THEREFORE, BE IT RESOLVED, as it is hereby resolved:

1. The instant case is hereby terminated with prejudice;

2. The disqualification of Glorious Sun and its principal stockholders and officers from engaging in the garments export business is
hereby lifted;

3. The bonded manufacturing warehouse license of Glorious Sun shall be restored subject to the condition that it shall within a
reasonable period of time, comply with the requirements for the operation of a BMW, and

4. The Board hereby awards to Glorious Sun the cancelled EQs of De Soleil Apparel Manufacturing Corporation as follows:

1.1 US Cat 347/348 = 63,839 dozens

1.2 Cat 2 Canada = 123,587 pieces

5. The Board, under existing rules, regulations and policies, is not in a position to restore the balance of the cancelled quotas.
(NOTE): Because:

1.1 Subject quota is currently being performed by AIF;

1.2 AIF vigorously contests Glorious Sun's claim for restoration, on the ground that AIF has already acquired vested rights over the
quota;

1.3 The pending case with SEC (SEC-AC319) filed by Glorious Sun for cancellation of AIFC's corporate registration;

1.4 May 22, 1992-SEC, en banc Resolution cancelling AIFC's registration;

1.5 Pendency of AIFC's appeal with the Court of Appeals filed on September 25, 1992.' (Comments, Rollo, p. 78).

Incidentally, Glorious Sun also filed on September 21, 1992, GTEB Case No. 92-50 for the cancellation of the subject quotas allotted
to AIFC and for restoration of the same to Glorious Sun. This case has not yet been resolved by GTEB.

AIFC, on the other hand, prior to the Supreme Court denial of its petition for review of the cancellation of its registration, requested
the GTEB to release its EQ allocation for 1993. This request was, however, refused by the GTEB in a resolution dated January 11,
1993, for the following reasons:

'x x relative to the request of American Inter-Fashion Corp. for the release of its 1993 Initial EQ/CEA entitlements under Cat.
347/8:

After a thorough discussion on the matter and, upon motion duly made and seconded, it was

RESOLVED, That pending final decision/resolution of the Supreme Court in the case of American Inter-Fashion Corp. (AIFC) vs.
SEC, the request of AIFC for release of its 1993 Initial EQ/CEA entitlements under Cat. 347/8, be, as it is hereby DEFERRED,
pending study by the Committee created under GTEB Office Order No. 92-1, dated September 11, 1992, and superseded by Office
Order No. 92-2, dated November 7, 1992, to study and attend to the request of AIFC pertaining to the release of its export quotas
which shall submit its findings/comments and recommendation on the matter to the Board in its next meeting. However, with
regard to subject firm's goods ready for shipment, it can participate in the EQ allocation (flexibility) when the same is offered to
enable them to fulfill their commitments.'

The above-quoted resolution was the subject of the petition filed by AIFC before the respondent Judge after GTEB refused to lift
said order. This case which was docketed as Special Civil Action Case No. 93-1173 for Certiorari, prayed for the annulment of
GTEB's aforementioned order, for the issuance of a temporary injunction restraining the implementation of said order, and for the
immediate release of the regular EQ of AIFC for 1993. A temporary restraining order (Annex D) was thereafter issued by respondent
Judge on April 13, 1993, enjoining GTEB from implementing its questioned order and from otherwise delaying the release of AIFC's
EQ entitlement for 1993.

On April 20, 1993, GTEB filed a Motion to Dismiss and also moved to quash the above-mentioned temporary restraining order.
Thereafter, on May 3, 1993, the respondent Judge issued one of the Orders herein questioned which reads as follows:

'For resolution is the petitioner's prayer for the issuance of a writ of a preliminary prohibitory injunction x x x enjoining the GTEB
and all persons acting under them from implementing the resolution of the respondent GTEB, suspending the petitioner's export
quota entitlement for 1993 and, a writ of preliminary mandatory injunction commanding the GTEB to release the petitioner's 1993
initial export quotas.

xxx xxx xxx

It is clear from the express terms of the questioned Resolution of the respondent Garments & Textile Export Board that the
petitioner's export quota has not been 'suspended' as claimed by the petitioner but was merely 'deferred' pending a study of certain
matters by the committee created by GTEB. Said resolution further made provisions for the petitioner's goods which are ready for
shipment by stating in the questioned resolution that 'with regard to subject firm's goods ready for shipment, it can participate in
the REA flexibility when the same is offered to enable them to fulfill their commitments.

Thus it is clear that the respondent GTEB has not as of this time, suspended or cancelled the petitioner's Export Quota but merely
deferred its release to the petitioner pending the resolution of certain matters. As a further indication that the GTEB has not
suspended the petitioner's export quota, is the fact that it has provided for temporary measures which allows the petitioner to ship
its products which are ready for shipment i-n order not to unduly cause damage to the petitioner.

WHEREFORE, in view of all the foregoing, the petitioner's prayer for writs of preliminary prohibitory and mandatory injunctions
are hereby DENIED.' (Annex A; Rollo, pp. 23-24)

AIFC's subsequent motion for reconsideration was likewise denied (Annex D). Hence, the instant petition.

Despite the Supreme Court's final decision upholding the cancellation of AIFC's certificate of registration, the latter, on July 13,
1993, filed another Petition for Certiorari before the Supreme Court docketed as SC-G.R. No. 110771, against SEC and Glorious Sun,
assailing the SEC decision dated May 22, 1992 which ordered the revocation of AIFC's certificate of registration, and seeking to stop
the cancellation of its certificate of registration. This petition (G.R. No. 110771) was denied by the Supreme Court on August 11, 1992
on the ground that the questioned decision of the SEC 'is the same decision assailed in a petition for review on certiorari filed with
[the Supreme Court] on 23 November 1992 under Rule 45 of the Rules of Court, docketed as G.R. No. 107742. Records show that
the petition (in G.R. No. 107742) was denied and a motion for reconsideration of said denial was denied with finality in the
resolution of the Court en banc, dated 01 July 1993' (Annex A to Respondent's Memorandum; Rollo, p. 326). Petitioner's Motion for
Reconsideration in G.R. No. 110771 is still pending resolution by the Supreme Court.

In the meantime, AIFC was awarded by the GTEB a REA-Flexibility quota of exactly the same category and amount as that which is
the subject of this petition the release of which was deferred by the GTEB. This was done by the GTEB allegedly so as not to
prejudice AIFC's export commitments pending any action on its request for the release of its 1993 EQs. AIFC had allegedly
performed on the REA-Flex quota since January 1993 up to the present (Annex B to Respondent's Memorandum). The GTEB also
allowed AIFC to continue importing raw materials 'to service the balance of its REA-Flex quota' (Annex C; Respondents'
Memorandum, p. 17). Incidentally, the difference between the REA-Flex quota and the regular quota entitlement, is that the latter
may be subject to restoration for the next quota year depending on performance of and compliance while the former is only good for
one-time use and may not be carried over to the next quota year (Respondent's Memorandum, p. 16; Rollo, p. 326).

On September 10, 1993, this Court in the instant petition and through the former Seventeenth Division, required petitioner to
amend its petition to include AIFC-International Fashion Corporation (hereinafter, AIFC-International) as co-petitioner
considering AIFC's manifestation that it underwent a business reorganization which resulted in the establishment of AIFC-
International as its wholly-owned subsidiary and the transfer to the latter of AIFC's regular export allocation with the GTEB (p. 167,
Rollo).

Respondent GTEB objected to AIFC's motion to join AIFC-International as co-petitioner because the latter allegedly does not have
any interest in the case at bar. Furthermore, the SEC had issued a restraining order on August 31, 1993 enjoining AIFC or any of its
agents from transferring and conveying its assets to AIFC-International or any other subsidiary of AIFC (Annex A; p. 220, Rollo).
The restraining order was issued in connection with SEC Case No. 08-93-4546 filed by Yeung Chun Kam, Yeung Chun Ho, and
Archie Chan vs. American Inter-Fashion Crop. (Annex B, p. 221, Rollo).

It seems that Yeung Chun Kam, Yeung Chun Ho and Archie Chan are among the stockholders of petitioner AIFC known as the
'Hongkong Investors' who allegedly own an aggregate thirty-three percent (33%) of the total subscription of AIFC's capital stock
of P2.5 Million. They alleged in their petition that they voted against the resolution adopted by AIFC which increased the
corporation's capital stock from P2 Million to P60 Million, which resolved that the authorized capital stock be paid-up with the
advances of the Campa Group representing 63% of the subscription of the capital stock of AIFC, and which also resolved that the
corporation's creditors-stockholders would be given the right to subscribe to the authorized capital stocks by converting their
advances to the Corporation into equity.

The Hongkong group allegedly disagreed with and voted against the resolution since they wanted the additional paid-up capital to
be entirely in cash with all the stockholders infusing new money. The resolution was allegedly not implemented, instead, the
Hongkong group claims to have discovered that without their knowledge the Campa group organized and registered a partnership
called American Inter-fashion Ltd., Co., as well as another subsidiary, the AIFC-International. Claiming that these acts of
establishing the two business entities violated their rights as minority stockholders of AIFC, Yeung Chun Ho, Yeung Chun Kam and
Archie Chan filed SEC Case No. 08-93-4546 seeking to restrain the transfer and conveyance of AIFC's assets to AIFC-International
and American Inter-Fashion Ltd., Co.; to cause the appointment of trustees for the purpose of the liquidation of AIFC under Sec.
122 of the Corporation Code; and to order AIFC to provide Yeung Chun Kam and company copies of its financial statements from
1989 to 1993 and to render an accounting of its operations during the said years (Rollo, pp. 222 to 235). This case is still pending
before the SEC."[2]

As can be seen, there were triggered by the controversy of the parties herein innumerable pleadings and interminable
complaints:
On April 7, 1993, AIFC filed a petition for certiorari, prohibition and mandamus under Rule 65 against the GTEB with the
Regional Trial Court of Makati, Branch 138, entitled "American Inter-Fashion Corporation, Petitioner, v. Garments and Textile
Export Board, Respondent" docketed as Civil Case No. 93-1173 (Annex "D" of GTEB's petition).
In the said petition AIFC sought to annul, on the alleged ground of lack of jurisdiction or grave abuse of discretion, the GTEB's
Resolution dated January 11, 1993 deferring AIFC's request for the release of its 1993 EQs (Initial EQ/CEA entitlements under Cat.
347/8) for the reasons therein stated. Said Resolution provided in part:

"RESOLVED, that pending final decision/resolution of the Supreme Court on the case of American Inter-Fashion Corp. (AIFC) vs.
SEC, the request of AIFC for release of its 1993 Initial EQ/CEA entitlements under Cat. 347/8, be, as it is hereby DEFERRED
pending study by the Committee created under GTEB Office Order No. 92-1, dated September 11, 1992, and superseded by Office
Order No. 92-2, dated November 17, 1992, to study and attend to the request of AIFC pertaining to the release of its export quotas
which shall submit its findings/comments and recommendation on the matter to the Board in its next meeting. However, with
regard to subject firm's goods ready for shipment, it can participate in the REA flexibility when the same is offered to enable them
to fulfill their commitments."

On April 13, 1993, the trial court issued a temporary restraining order against GTEB pending hearing on AIFC's application for
the issuance of a writ of preliminary prohibitory injunction.
On April 24, 1993, GTEB filed its "1. Motion to Dismiss the Instant Petition and 2. Motion to Quash or Recall the Temporary
Restraining Order."[3]
On April 29, 1993, GTEB filed its "Motion to Resolve Motion to Dismiss Prior to Hearing of the Petition for Injunction."[4]
On or about 19 April 1993, Glorious Sun Fashion Garments Manufacturing (Phils.), Inc. (Glorious Sun) filed an "Urgent 1)
Motion for Leave to Intervene and File Answer as Respondent-Intervenor and 2) Motion to Quash or Recall Temporary Restraining
Order." This motion was opposed by AIFC.
In its Order dated May 3, 1993, the trial court denied AIFC's application for the issuance of the writs of preliminary
prohibitory and mandatory injunction. The pertinent portions of the May 3, 1993 Order [5]state:

"It is clear from the express terms of the questioned Resolution of the respondent Garments and Textile Export Board that the
petitioner's export quota has not been 'suspended' as claimed by the petitioner but was only 'Deferred' pending a study of certain
matters by the committee created by GTEB. Said resolution further made provisions for the petitioner's goods which are ready for
shipment by stating in the questioned resolution that 'with regard to subject firm's goods ready for shipment, it can participate in
the REA flexibility when the same is offered to enable them to fulfill their commitments.'

Thus, it is clear that the respondent GTEB has not as of this time, suspended or cancelled the petitioner's Export Quota but merely
deferred its release to the petitioner pending the resolution of certain matters. As a further indication that the GTEB has not
suspended the petitioner's export quota, is the fact that it has provided for temporary measures which allows the petitioner to ship
its products which are ready for shipment in order not to unduly cause damage to the petitioner.

WHEREFORE, in view of all the foregoing, the petitioner's prayer for writs of preliminary prohibitory and mandatory injunctions
are hereby DENIED."

Through its Order dated May 25, 1993,[6] the trial court denied AIFC's motion for reconsideration of the May 3, 1993 Order. As
a result thereof, AIFC filed with the Court of Appeals a petition for certiorari and mandamus from the aforementioned Orders of
the trial court in Civil Case No. 93-1173 (docketed as CA-G.R. SP No. 31596) where it prayed that the May 3, 1993 and May 25, 1993
Orders be set aside and a writ of mandamus be issued directing the GTEB to release AIFC's EQs for 1993.
Thereafter, AIFC filed a "Manifestation" where it alleged that in July 1993, it underwent a business reorganization which
resulted in the establishment of a wholly-owned subsidiary, the AIFC International Fashion Corporation. AIFC further alleged that
its regular export quota allocation with the GTEB was transferred to the aforesaid subsidiary, for which reason, the said subsidiary
may be joined as a co-petitioner in CA-G.R. SP No. 31596.
After the GTEB filed its "Comments" on the petition in CA-G.R. SP No. 31596 on August 19, 1993,[7] AIFC filed a
"Motion"[8] where it prayed that AIFC International Fashion Corporation be joined as a co-petitioner. Thereafter, on or about
August 26, 1993, AIFC (and AIFC International) filed a "Reply" to the Comments of GTEB.[9]
Subsequent to the above, on September 14, 1993, upon being directed by the Court of Appeals to amend its petition to include
"AIFC International Fashion Corporation" as co-petitioner, AIFC filed an amended petition.[10]
After hearing the oral arguments of the GTEB and AIFC, and after receiving their respective memoranda,[11] as well as other
additional pleadings (including an "Addendum To Respondent's Memorandum"[12]filed by the GTEB for purposes of informing the
Court of Appeals of this Court's September 22, 1993 Resolution issued in G.R. No. 110771 denying with finality AIFC's motion for
reconsideration of the August 11, 1993 Resolution dismissing the said petition, and affirmed the revocation of AIFC's certificate of
corporate registration), or on January 21, 1994, the Court of Appeals rendered the Decision subject of GTEB's petition in G.R. No.
114711 in favor of AIFC and AIFC International,[13] annulling the trial court's Orders of May 3, 1993 and May 25, 1993 in this wise:

"WHEREFORE, the instant petition is GRANTED and the Orders of the respondent Judge dated May 3, 1993 and May 25, 1993 are
hereby annuled and set aside with no pronouncement as to costs."

On February 11, 1994, the GTEB filed a "Motion For Reconsideration"[14] of the 21 January 1994 Decision.
Shortly thereafter, motions to intervene as well as motions for reconsideration of the said Decision were filed by Glorious Sun
Fashion Garments Manufacturing Co., (Phils.) Inc. and by the minority stockholders of AIFC (Yeung Chun Kam, Yeung Chun Ho
and Archie Chan).
On or about January 31, 1994, on the ground that the Court of Appeals in its January 21, 1994 Decision had granted the
petition, AIFC and AIFC International filed a "Motion For Issuance Of Writ Of Mandamus"[15] asking that a writ of mandamus be
issued to compel the GTEB to release EQs for 1993 to AIFC.
On February 15, 1994, the GTEB filed its "Opposition To Petitioners' Motion for Issuance of Writ of Mandamus.[16]
On March 22, 1994, the Court of Appeals issued its Resolution[17] denying (1) AIFC and AIFC International's motion for the
issuance of a writ of mandamus, (2) the motions for intervention filed by Glorious Sun, and Yeung Chun Kam, et al., and (3)
GTEB's motion for reconsideration. The more pertinent portions of said Resolution read:

"It bears stressing that the subject matter of the petition as well as of the decision sought to be reconsidered was only the 1993
allocation. Our decision herein did not concern itself with, nor was it called upon to rule upon, any future allocations the grant or
release of which is the prerogative of the GTEB in accordance with law.

We never ordered the GTEB to release the 1993 allocation to AIFC, since the lapse of the year 1993 had rendered this issue moot
and academic.
We wish to make it clear that this Court is not intruding in, nor are we adjudicating upon ourselves, the powers and functions of the
GTEB. The decision to annul the orders in question was called for in view of the grave abuse of discretion exercised both by GTEB
and the lower court in refusing to release petitioner's 1993 allocations despite the fact that it was clearly entitled to such release.
This is well within the jurisdiction of this Court which has the authority to check the abuses which may have been committed by any
officer, board or tribunal exercising judicial functions (Sec. 1, Rule 65, Rules of Court).

Neither are we ordering the GTEB to release or grant export quota allocations to the transferee of AIFC's 1993 EQ allocations. The
decision never granted such right to the transferee since we know that this issue is solely within the jurisdiction of the GTEB. What
the decision discussed was petitioner's act of transferring the interest and assets of the former AIFC to its transferee. We do not
consider this as an adjudication of GTEB functions.

As regards the Motions to Intervene filed by Glorious Sun and Yeung Chun Kam and company, we find said motions improper.
Intervention is not an independent action but is auxiliary and supplemental to existing litigation (Clareza vs. Rosales, 2 SCRA 455).
The office of a petition for certiorari is only to check abuses or excesses in the exercise by a tribunal, board or officer, of its judicial
functions and not to determine the respective rights and interests of the parties in the subject matter of the litigation. This petition
is therefore not the proper forum for the discussion of the respective rights either or Glorious Sun or Yeung Chun Kam, and
company. Whether or not Glorious Sun is entitled to quota allocations is an issue which could be properly raised before the GTEB.
And regarding the interests of Yeung Chun Kam and company vis-a-vis those of AIFC's, the same should be properly ventilated in
another appropriate proceeding.

Moreover, intervention is generally allowed only before or during trial (Sec. 2, Rule 12, Rules of Court) unless there are strong
considerations to allow such intervention. None exists in this case.

In view of the denial of the Motions to Intervene filed by Glorious Sun, Yeung Chun Kam and company, there is no reason for us to
discuss their motions for reconsideration.

WHEREFORE, premises considered, petitioner's Motion for the issuance of a Writ of Mandamus is DENIED. GTEB's motion for
reconsideration is also DENIED as well as the Motions for Intervention filed by Glorious Sun, Yeung Chun Kam, Yeung Chun Ho,
and Archie Chan."

GTEB thus filed its petition in G.R. No. 114711, where it prayed:

"WHEREFORE, premises considered, it is respectfully prayed that the 21 January 1994 Decision and 22 March 1994 Resolution of
the Court of Appeals (except insofar as the latter correctly denied AIFC and AIFC International Fashion Corporation's 'Motion For
Issuance Of Writ Of Mandamus') BE ANNULLED AND SET ASIDE; and that instead a Resolution be issued DISMISSING the
petition in CA-G.R. SP No. 31596 in its entirety for being moot and academic and/or for lack of merit."

AIFC's petition in G.R. No. 115889, on the other hand, is an offshoot of the petition filed by Glorious Sun with the GTEB on 21
September 1992.[18] In said GTEB petition,[19] Glorious Sun prayed that the export quotas which the GTEB had earlier awarded to
AIFC on August 1, 1984 pursuant to its April 27, 1984 Decision in Adm. Case No. OSC 84-B-1, be cancelled and returned to Glorious
Sun, on the alleged ground that AIFC was not qualified to the said awards under the policies, rules and regulations of the GTEB, and
more specifically because:

"a. AIFC, at the time of the award on August 1, 1984, did not have its own in-house production capacity; in this connection,
AIFC, to this date, still has no in-house production capacity as it has continued not owning any factory, plant, or even a
single sewing machine, nor can it show any lease agreement for the use of any manufacturing facilities;

b. AIFC had no personality at the time of the award on August 1, 1984 as it was not yet a corporation, its incorporation having
been effected only on September 6, 1984; in this connection, on May 22, 1992, the certificate of registration of AIFC was
revoked by order of the Securities and Exchange Commission on the ground that the same was secured through fraud; and

c. AIFC, upon its incorporation, included as stockholders persons who were at the time disqualified from engaging in the
garments export business."

The events leading to the filing of GTEB Case No. 92-50 are in turn summed up in the succeeding paragraphs of Glorious
Sun's "Comment on Petition with Memorandum" dated August 1, 1995:[20]

"8. On 27 April 1984, the GTEB, on the basis of trumped-up charges of misdeclaration of importations, issued a Decision in Adm.
Case No. OSC 84-B-1, cancelling the export quotas and export authorizations of Glorious Sun, and on 01 August 1984 illegally
awarded part thereof to AIFC. The dispositive portion of said Decision reads thus:

'WHEREFORE, the Board finds that the Respondent firm violated its rules and regulations on importations and hereby imposes the
following administrative penalties:

1. Cancellation of Export Quotas and Export Authorizations of the firm and disqualification of the firm and the major stockholders
and officers from engaging in garment exports;

2. Cancellation of the firm's license to operate a bonded manufacturing warehouse.


The Board will likewise endorse the case to the Presidential Anti-Dollar Salting Task Force for further investigation and prosecution
and will request the Bureau of Customs to seal the firm's bonded manufacturing warehouse and to conduct an inventory of the
contents thereof.'

9. Subsequently, Glorious Sun appealed the said Decision to the Office of the President. On September 7, 1989, the Office of the
President, in O.P. Case No. 3781, nullified the Decision of the GTEB in the succeeding manner:

'WHEREFORE, the case is hereby remanded to the Garments and Textile Export Board for further proceedings, affording the
Appellant an opportunity (a) of full disclosure of all the evidence and/or GTEB records relative to the charges in the Show Cause
Order dated February 14, 1984, which evidence/records must be properly identified and their due execution and existence duly
established by appropriate competent witnesses, and (b) of rebutting the same evidence/records through the presentation of
additional evidence, after which the Board may, on the basis of said evidence and records, maintain or revise its decision in this
case.'

10. Thereafter, acting on Motions for Reconsideration of its September 7, 1989 decision, the Office of the President, on February 20,
1990, expanded its previous decision. The pertinent portion of the Resolution denying said motions are hereunder quoted, to wit:

'It is, however, insisted by the movants that the GTEB decision of April 27, 1984 had already become final and that Glorious Sun
abandoned its right when it elevated the case to the Supreme Court by way of certiorari, docketed as G.R. No. 67180, "Glorious Sun
Fashion Garments and Textile Manufacturing Company (Philippines), Inc. vs. Garments and Textile Export Board, etc. et al." We
disagree. For, as explicitly shown by the resolution promulgated on June 4, 1984 by the Supreme Court in the said case and as
found by this Office in the decision presently sought to be reconsidered, the said April 27, 1984 decision was rendered by the GTEB
in flagrant violation of Glorious Sun's right to due process. Hence, the GTEB may be said to have 'acted without or in excess of
jurisdiction and with grave abuse of discretion' (Barranza vs. Campos, Jr. 120 SCRA 881, 888-889) and, therefore, the said decision
is null and void (Bacus vs. Ople, 132 SCRA 690, 710; Free Employees and Workers Assn. [FEWA] vs. Court of Industrial Relations,
14 SCRA 781, 784-787) as if it was not rendered at all. As succinctly held by the Supreme Court:

'In this jurisdiction, a void judgment or order is in legal effect no Judgment or order. By it no rights are divested. From it no rights
can be obtained. Being worthless, it neither binds nor bars anyone. All acts performed under it and all claims flowing out of it are
void (Paredes vs. Moya, 61 SCRA 525, 533, citing Chavez vs. Court of Appeals, 24 SCRA 663, 685; Comia vs. Nicolas, 29 SCRA 492,
503-504, quoting Chavez vs. CA, supra, and Gomez vs. Concepcion, 47 Phil. 717, 722).

Thus, being null and void, rendered as it was in violation of the due process clause (Bacus vs. Ople, supra) and consequently for
want of jurisdiction (Barranza vs. Campos, Jr., supra), the GTEB decision of April 27, 1984 'is not a decision in contemplation of
law' (Planas vs. Collector of Internal Revenue, 3 SCRA 395, 399) and is, therefore, 'inexistent' (Free Telephone Workers Union vs.
PLDT, 160 SCRA 43, 46). Consequently, the same decision can 'never become final' (Manila Railroad Company vs. Moya, 14 SCRA
358, 363-364), much less executory (Planas vs. Collector of Internal Revenue, supra). Indeed, the parties attempting to enforce
(such void judgment) may be responsible as 'trespassers' (Comia vs. Nicolas, supra, at p. 504).

What right then could Glorious Sun have abandoned when, as illustrated by the aforecited authorities, the void and inexistent GTEB
decision of April 27, 1984 neither vests nor divests any rights, neither binds nor bars anyone?'

11. The Decision of the Office of the President was in turn upheld by the Supreme Court in a Resolution dated May 23, 1991 and
another Resolution dated July 2, 1991 in American Inter-Fashion Corporation v. Office of the President (197 SCRA 409 [1991]). In
said case, the Supreme Court, citing Mabuhay Textile Mills Corporation v. Ongpin (141 SCRA 437 [1986]), ruled that the export
quota allocations of Glorious Sun had evolved into some form of property right, which should not be removed from it arbitrarily and
without due process. Thus:

'Contrary to the petitioner's posture, the record clearly manifests that in cancelling the export quotas of the private respondent
GTEB violated the private respondent's constitutional right to due process. Before the cancellation in 1984, the private respondent
had been enjoying export quotas granted to it since 1977. In effect the private respondent's export quota allocation which initially
was a privilege evolved into some form of property right which should not be removed from it arbitrarily and without due process
only to hurriedly confer it on another. Thus, in the case of Mabuhay Textile Mills Corporation v. Ongpin (Ibid), we stated:

'In the case at bar, the petitioner was never given the chance to present its side before its export quota allocations were revoked and
its officers suspended. While it is true that such allocations as alleged by the Board are mere privileges which it can revoke and
cancel as it may deem fit, these privileges have been accorded to petitioner for so long that they have become impressed with
property rights especially since not only do these privileges determine the continued existence of the petitioner with assets of
over P80,000,000.00 but also the livelihood of some 700,000 workers who are employed by the petitioner and their families. x x x
(Emphasis supplied).

The decision penned by Deputy Executive Secretary Magdangal B. Elma and the resolution penned by Acting Deputy Executive
Secretary Mariano Sarmiento II are not tainted in the slightest by any grave abuse of discretion. They outline in detail why the
private respondent was denied due process when its export quotas were cancelled by GTEB. The findings are supported by the
records.

Finally, American Inter-Fashion is hardly the proper party to question the Malacaang decision. It was incorporated after the
incidents in this case happened. It was created obviously to be the recipient of export quotas arbitrarily removed from the rightful
owner. It was sequestered precisely because of the allegation that it is a crony corporation which profited from an act of injustice
inflicted on another private corporation.
xxx xxx xxx

PREMISES CONSIDERED, the motion for reconsideration is GRANTED. The instant petition is DISMISSED. The questioned
decision and resolution of the Office of the President are hereby AFFIRMED (American Inter-Fashion Corporation v. Office of the
President, 197 SCRA 409 [1991])'.

12. After the aforementioned Decision of the Office of the President was affirmed by the Supreme Court, and pursuant to the
directive embodied in the said O.P. Decision, the case was remanded to the GTEB for further proceedings. However, while Glorious
Sun presented additional evidence in support of its position, the GTEB did not, as it could not, present any evidence relative to the
charges in the show Cause Order dated 14 February 1984. Instead, and in view of this dearth of evidence against Glorious Sun, the
GTEB encouraged the latter to enter into a compromise agreement.

13. Glorious Sun assented to the execution of a compromise agreement primarily on the basis of an understanding with the GTEB
that insofar as the balance of the export quotas due to Glorious Sun was concerned (which quotas AIFC was illegally and obstinately
holding on to), Glorious Sun would be allowed to initiate separate proceedings for the recovery thereof against AIFC. Incidentally,
this arrangement was rendered necessary by the fact that AIFC was never a proper party to, and had no personality to participate in
Adm. Case No. OSC 84-B-1.

14.On August 20, 1992, the GTEB finally dismissed the complaint against Glorious Sun which formed the basis for the April 27,
1984 decision, restoring part of the export quota allocations of Glorious Sun. The dispositive portion of the said Resolution reads:

'NOW THEREFORE, BE IT RESOLVED, as it is hereby resolved that:

a) The instant case is hereby terminated with prejudice;

b) The disqualification of Glorious Sun and its principal stockholders and officers from engaging in the garments export business is
hereby lifted;

c) The bonded manufacturing warehouse license of Glorious Sun shall be restored subject to the condition that it shall within a
reasonable period of time, comply with the requirements for the operations of a BMW, and

d) The Board hereby awards to Glorious Sun the canceled EQs of De Soleil Apparel Manufacturing Corporation as follows:

1. US Cat. 347/348-63,839 dzs.

2. Cat. 2 Canada-123,587 pcs.

e) The Board, under existing rules, regulations and policies, is not in a position to restore the balance of the cancelled quotas' (p. 4,
GTEB Resolution dated August 20, 1992).

15. It will be noted that the Board restored to Glorious Sun the portion of the export quotas illegally taken away from Glorious Sun
and given to DE Soleil Apparel Manufacturing Corporation (DSA), the same having been already taken back by the Board by
cancellation. But, as stated above, with respect to the balance of the export quotas illegally taken away from Glorious Sun still being
stubbornly illegally held on to by AIFC, additional steps became necessary for the recovery thereof.

16. Accordingly, on September 21, 1992, Glorious Sun filed GTEB Case No. 92-50 for the cancellation of the quotas illegally awarded
to AIFC and for the restoration of the said quotas to Glorious Sun.

17. On August 3, 1993, the Hearing Officer submitted his Report with the recommendation that AIFC's export quotas be
revoked/cancelled and the same be returned or awarded to Glorious Sun subject to GTEB rules and regulations on performance and
forfeiture. However, instead of approving the Report of the Hearing Officer assigned to hear the case and who conducted the
proceedings, the GTEB appointed a committee to prepare a Report.

18. The Committee submitted its Report and Recommendation under date of May 10, 1994. On June 21, 1994, the GTEB issued a
Resolution adopting and approving in toto the Report and Recommendation. The pertinent portion of the Resolution reads:

'THE FOREGOING PREMISES CONSIDERED, the Board hereby RESOLVES:

1. That the export quotas and export authorizations awarded to AIFC be cancelled;

2. That the petition of Glorious Sun to be restored the export quota allocations which were awarded to AIFC be denied;

3. That said export quotas and export authorizations of AIFC be reverted to the allocable balance (open basket) which shall be made
available to other garment manufacturers, including Glorious Sun, for application therefor; and

4. That AIFC's motion to dismiss be denied for lack of any merit.'


19. AIFC filed the instant petition to annul the above-quoted June 21, 1994 Resolution of the GTEB, as well as to compel the latter to
restore the cancelled export authorizations which AIFC claims it is entitled to."

After Glorious Sun presented evidence in support of its petition in GTEB Case No. 92-50, AIFC filed a motion to dismiss the
same for lack of jurisdiction.[21] On June 21, 1994, the GTEB issued its resolution subject of AIFC's petition in G.R. No.
115889,[22] the entirety whereof reads as follows:

"RESOLVED, that the findings and recommendation of the Committee on Administrative Case No. 92-50, as contained in Annex
'C', be, as they are hereby ADOPTED and APPROVED, in toto, wit:

1. That the export quotas and export authorizations awarded to AIFC be cancelled;

2. That the petition of Glorious Sun to be restored the export allocations which were awarded to AIFC be denied;

3. That the said export quotas and export authorizations of AIFC be reverted to the allocable balance which shall be made available
to other garment manufacturers, including Glorious Sun, for application therefor;

4. That AIFC's motion to dismiss be denied for lack of merit."

Consequently, on 6 July 1994, AIFC filed its petition in G.R. No. 115889, where it sought to:

"(a) annul and set aside the respondent Garments and Textile Export Board's (GTEB's) resolution dated 21 June 1994 in GTEB Case
No. 92-0, entitled Glorious Sun vs. AIFC, for having been issued without or in excess of jurisdiction, or in grave abuse of discretion;
and

(b) have respondent GTEB commanded to restore or release petitioner AIFC's regular export quota entitlement for 1994." [23]

Simultaneous with the filing of its petition, AIFC filed a motion to consolidate the said petition with GTEB's petition in G.R.
No. 114711. On July 20, 1994, after praying for time for the filing thereof, Glorious Sun filed, in G.R. No. 115889, a "Motion for
Outright Dismissal of the Petition (with Opposition to Motion to Consolidate), where it sought the dismissal of said petition on the
grounds that (1) AIFC has no personality to file the petition; (2) AIFC failed to exhaust administrative remedies; and (3) AIFC is
guilty of forum-shopping.
In view of Our July 20, 1994 Resolution: (1) requiring the respondents in G.R. No. 115889 to comment on the petition, and not
to file a motion to dismiss, and (2) granting AIFC's motion to consolidate, Glorious Sun filed a "Manifestation" on August 15, 1994
whereby it withdrew the aforesaid "Motion for Outright Dismissal of the Petition (with Opposition to Motion to Consolidate)." At
the same time it made manifest its intention to file a motion for reconsideration of the same July 20, 1994 Resolution insofar as it
ordered AIF's petition in G.R. No. 115889 consolidated with the GTEB's petition in G.R. No. 114711.
Accordingly, on September 7, 1994, Glorious Sun filed a "Motion for Reconsideration [24] with Motion to Suspend Period to File
Comment."
However, prior to the filing of Glorious Sun's aforesaid "Motion for Reconsideration, etc.," or on September 5, 1994, we issued
our Resolution in the above-numbered cases, where we resolved to:

"(a) NOTE WITHOUT ACTION the motions filed by: (1) Glorious Sun Fashion Garments Manufacturing in G.R. No. 115889 for first
and second extensions totalling fifteen (15) days from July 13, 1994 within which to file motion to dismiss petition and opposition to
the motion to consolidate; and (2) American Inter-Fashion Corporation [N.B. this should have read 'Glorious Sun Fashion
Garments Manufacturing'] in G.R. No. 114711 for the outright dismissal of the case with opposition to the motion to consolidate, it
appearing that the: (1) motion for outright dismissal with opposition to the motion to consolidate was withdrawn by private
respondent Glorious Sun Fashion Garments Manufacturing in G.R. No. 115889 through its manifestation dated August 11, 1994;
and (2) motion to consolidate these cases was granted by the Second Division on July 20, 1994;

(b) GRANT the motions of: (1) private respondent American Inter-Fashion corporation: (aa) for a fourth (final) extension of five (5)
days from July 23, 1994 within which to file comment on the petition for review on certiorari; and (bb) to admit comment on the
petition in G.R. No. 114711;

(c) NOTE the: (1) urgent motion of petitioner in G.R. No. 115889 to resolve application for temporary restraining order or
injunction; and (2) comment on the petition with motion for the issuance of a show cause order filed by private respondent
American Inter-Fashion Corporation in G.R. No. 114711;

(d) require the petitioners [N.B. this should have read petitioner] to file a REPLY within ten (10) days from notice hereof to the
comment on the petition filed by American Inter-Fashion Corporation; and

(e) NOTE the manifestation dated August 12, 1994 by Atty. Benjamin D. de Asis, manifesting his withdrawal as counsel for
petitioner Garments and Textile Export Board in G.R. No. 114711 but require aforesaid counsel to SUBMIT the conformity of his
client within five (5) days from notice hereof." [25]

Thereafter, Glorious Sun filed on September 22, 1994 with the First Division of this Court, its "Manifestation and Motion to
Suspend Further Proceedings Until After Resolution by Second Division of Motion for Reconsideration of Order of July 20, 1994 on
Consolidation."[26] On the other hand, the GTEB, pursuant to Our above directive, filed its Reply to AIFC's Comment in G.R. No.
115889.
AIFC, as petitioner in G.R. No. 114711, filed with the Second Division of this Court an "Urgent Motion to Resolve Application
for Injunction,"[27] which it followed up with an "Urgent Motion to Restore Status Quo Ante."[28] The latter motion was filed with the
Third Division of this Court, to whom the above-numbered petitions had, in the meantime, been assigned. In response to these
urgent motions, Glorious Sun filed, also with the Third Division of this Court, its "Comment (Re: Petitioner's Urgent Motions: [1] to
Resolve Application for Injunction; and [2] to Restore Status Quo Ante)" where it argued that:

"I. The First Division of this Honorable Court, as far back as 05 September 1994, had already acted upon petitioner's urgent motion
for the issuance of a temporary restraining order or injunction, by merely noting the same.

II. In any event, the instant motions should nevertheless be denied, there being absolutely no showing that petitioner is clearly
entitled to injunctive relief."[29]

Subsequent to the filing of the above pleadings, AIFC filed yet another "Urgent Motion to Resolve," to which Glorious Sun
replied through a pleading denominated as "Manifestation (Re: Petitioner's March 30, 1995 Urgent Motion to Resolve) with Motion
for Summary Dismissal and Motion to Cite Petitioner for Direct Contempt (For Violation of SC Revised Circular 28-91)."[30]
On April 3, 1995, we issued a resolution, the pertinent portions whereof reads:

"Considering the allegations contained, the issues raised and the arguments adduced in the petitions for review on certiorari, as
well as the respective comments of the private respondents thereon and the replies of petitioner to said comments, the Court
Resolved to give DUE COURSE to the petition, and to require the parties to FILE their respective MEMORANDA in both cases,
within twenty (20) days from notice.

The Court further Resolved:

xxx xxx xxx

(b) to NOTE:

(1) the urgent motion to resolve application for injunction, dated March 2, 1995, filed by counsel for petitioner American
Inter-Fashion Corporation; and

(2) the urgent motion to restore status quo ante, dated March 14, 1995, filed by counsel for petitioner."

Thereafter, both American Inter-Fashion Corporation and the GTEB filed their respective Memoranda. On the other hand, on
August 4, 1995, Glorious Sun filed its "Comment on Petition with Memorandum,"[31] which pleading included the succeeding
explanatory remarks:

"1. At the outset, it should be mentioned that contrary to the 05 April 1995 Resolution of the Honorable Court, Glorious Sun has not
yet filed its comment to American Inter-Fashion Corporation's (AIFC's) petition in the above-numbered case.

2. On 07 September 1994, Glorious Sun filed a motion for reconsideration of the order of this Honorable Court which consolidated
the instant petition with the petition of the Garments and Textile Export Board (GTEB) in G.R. No. 114711. Glorious Sun included in
said motion for reconsideration a 'Motion to Suspend Period to File Comment,' pending resolution by the Honorable Court of the
consolidation incident.

3. Subsequent thereto, or on 22 September 1994, Glorious Sun filed a 'Manifestation and Motion to Suspend Further Proceedings
Until After Resolution by Second Division of Motion for Reconsideration of Order of July 20, 1994 on Consolidation.

4. In view of the filing of the aforementioned motions, Glorious Sun held off the filing of its comment to the petition until said
motions were resolved by the Honorable Court. To this day, however, no resolution has as yet been rendered by the Honorable
Court relative to the above-stated motions.

5. We surmise that the comment being referred to by the Honorable Court as having been filed by Glorious Sun is that which the
latter filed in connection with AIFC's Urgent Motions (1) to Resolve Application for Injunction; and (2) to Restore Status Quo Ante.

6. Be that as it may, Glorious Sun is filing the instant pleading which it prays be treated as its comment and memorandum." [32]

A "Motion for Leave to Intervene and Submit Manifestation"[33] in the above-entitled cases was subsequently filed by Messrs.
Yeung Chun Kam and Yeung Chun Ho, who purport to be the Hongkong investors referred to by American Inter-Fashion
Corporation in its 23 June 1995 Memorandum.
On July 19, 1996, Glorious Sun filed a "Manifestation," whereby it informed this Court of the May 20, 1996 Order of the
Securities and Exchange Commission (SEC), the entirety whereof reads thus:
"The articles of incorporation of American Inter-Fashion Corporation (the new AIFC, for short) with SEC Reg. No. AS093-008101-
A reveal that said corporation was formed for the purpose of re-registering American Inter-Fashion Corporation (the old AIFC) with
SEC Reg. No. 12236 registered with the SEC on July 16, 1985 and that the same appear to have been approved by the Commission
en banc in its Commission meeting held on October 14, 1993. What was actually approved in said meeting was the 'registration of a
new corporation' and that it was not the intention of this Commission to approve the re-registration of the old AIFC.

American Inter-Fashion Corporation (SEC Reg. 12236), whose corporate registration had been ordered revoked, cannot avoid
liquidation by reason of the revocation of its franchise and it cannot also be allowed to continue its business by virtue of its so-called
're-registration.'

Viewed in this light, this Commission en banc hereby RECALLS the certificate of registration issued to American Inter-Fashion
Corporation on October 14, 1993 under SEC Reg. No. AS093-008101-A without prejudice to the registration of a new
corporation."[34]

In the same "Manifestation," Glorious Sun prayed, among others, for the dismissal of the above-entitled petitions, citing as
ground therefor the above-quoted SEC. Order recalling American Inter-Fashion Corporation's certificate of registration. Thereafter,
American Inter-Fashion Corporation filed its "Counter Manifestation (To Glorious Sun's Manifestation dated July 15, 1996)," [35] to
which Glorious Sun responded by way of its "Reply (Re: Counter-Manifestation)."[36]
In G.R. No. 114711, the GTEB made the following assignment of errors:

"I. The respondent Court of Appeals erred gravely in failing to rule that it had no jurisdiction over the petition in CA-G.R. SP
No. 31596.

II. The respondent Court of Appeals erred gravely in failing to rule that the petition in CA-G.R. SP No. 31596 did not state a
cause of action against GTEB.

III. The respondent Court of Appeals erred gravely in failing to hold that the 11 January 1993 Resolution issued by GTEB was
valid and in the proper exercise of its administrative discretion and jurisdiction.

IV. The respondent Court of Appeals erred gravely in failing to hold that the petition in CA-G.R. SP No. 31596 was rendered
moot and academic in its entirety by the mere passage of the year 1993.

V. The respondent Court of Appeals erred gravely in failing to deny and/or to dismiss the petition in CA-G.R. SP No. 31596 for
lack of merit."[37]

On the other hand, AIFC makes the following assignment of errors in its petition:[38]

"The GTEB has no jurisdiction to take cognizance of Glorious Sun's action against AIFC for 'recovery' of property." [39]

"In any case, the GTEB's issuance of a resolution deciding the action on its 'merits' without hearing AIFC's evidence is a
violation of AIFC's right to due process."[40]

"The GTEB's cancellation of AIFC's EQs is a confiscation of property without due process of law." [41]

THE ISSUES

1. Considering that AIFC's Certificate of Registration had been effectively revoked by the Securities and Exchange
Commission on May 22, 1990, may AIFC still engage in business and claim entitlement to the export allocations subject of
these petitions?
2. Does the Garments and Textile Export Board (GTEB) have the power and authority to grant or cancel export quotas or
authorizations?
3. Did the GTEB, in issuing the assailed Resolutions, afford AIFC the right to due process?
I
This is not the first time that we have been asked to resolve an issue relative to AIFC's corporate personality. In G.R. No.
110711, entitled "American Inter-Fashion Corporation v. Securities and Exchange Commission, et al.," this Court en banc upheld the
resolutions of the Prosecution and Enforcement Department (PED) of the Securities and Exchange Commission (SEC) in PED Case
No. 87-0321 revoking AIFC's certificate of registration, on the basis of Glorious Sun's assertions that AIFC committed fraud and
misrepresentation in securing said certificate of registration, after we had likewise effectively upheld the very same resolutions in an
earlier petition filed by AIFC, entitled "American Inter-Fashion Corporation v. Court of Appeals, et al."[42]
In said G.R No. 110711, we recounted the factual circumstances pertinent to the revocation of AIFC's certificate of registration
in the succeeding manner:
"The complaint was assigned for investigation and hearing to SEC's Prosecution and Enforcement Department (PED). On 14 May
1990, PED issued a resolution recommending the revocation of petitioner's SEC certificate of registration; however, on 24 May
1990, PED issued an amended resolution this time revoking the said certificate on the basis of its ruling that 'there was in effect no
payment of at least P1,657,000.00 of the P2,500,000.00 supposed payment on subscription, contrary to the treasurer's affidavit
that the subscription of P2,500,000.00 was fully paid and the payment had been fully received.' In PED's resolution of 15 October
1990, petitioner's motion for reconsideration was denied.

Acting on petitioner's appeal (docketed as Sec-AC No. 319) from the said resolutions of PED, the SEC affirmed the same, in its
decisions of 22 May 1992. A copy of which was received by petitioner on 25 May 1992. Petitioner's motion for reconsideration was
denied by the SEC in the latter's order dated September 16, 1992, copy of which order was received by petitioner's counsel
on September 18, 1992 (three [3] SEC commissioners concurred; two [2] dissented). On September 25, 1992, petitioner then filed a
petition for review with the Court of Appeals docketed as CA-G.R. SP No. 29017. But on September 30, 1992, the Court of Appeals
dismissed the petition on the ground that it was filed late (last day to file petition was on September 19, 1992, but petition was filed
only on September 25, 1992, thus, petition was filed six [6] days late).

On November 23, 1992, petitioner filed a petition for review (under Rule 45 of the Rules of Court) with this Court, docketed as G.R.
No. 107742 assailing the resolution of the Court of Appeals in said CA-G.R. SP No. 29017, and questioning the SEC decision of 22
May 1992 in SEC-AC No. 319. On January 13, 1993, this Court (Third Division) denied AIFC's petition, thus affirming the Court of
Appeals' assailed resolution of September 30, 1992, on the ground that the appellate court committed no reversible error in
dismissing the petition in CA-G.R. SP No. 29017. Petitioner's motion for reconsideration was referred to the Court en banc. On July
1, 1993 the Court en banc denied with finality petitioner's motion for reconsideration and held that the reason given by petitioner's
counsel for late filing of its petition (i.e. petition was filed late with the Court of Appeals because petitioner's counsel Atty. Ceniza of
Sycip Law got seriously ill) was not a valid excuse and not a compelling reason to reconsider the Court's resolution of January 13,
1993.

Petitioner's counsel has filed the present petition (filed on 13 July 1993) under Rule 65 of the Rules of Court, assailing the same
PED resolutions and SEC decision assailed in G.R. No. 107742 (filed under Rule 45 of the Rules), this time on the ground that they
were issued or rendered without jurisdiction.

As earlier noted, substantially and even principally the same issues and subject matter are raised and involved in the present
petition (filed under Rule 65 of the Rules of Court) and those in the petition in G.R No. 107742 (filed under Rule 45 of the Rules).

In said G.R. No. 107742, petitioner had availed of the remedy of appeal by certiorari, i.e., appealing from the decision of the Court
of Appeals in CA-G.R. SP No. 29017. Settled is the rule that a special civil action of certiorari(under Rule 65) is not a substitute for a
lost appeal (Bank of America, et al., vs. CA, G.R No. 78917, June 8, 1990, 186 SCRA 417).

By the resolution of this Court en banc, dated July 1, 1993, rendered in G.R No. 107742, the petitioner's privilege (or opportunity) to
question the SEC decision dated May 22, 1993 rendered in SEC-AC No. 319 was lost when the Court sitting en banc denied with
finality the motion of petitioner to reconsider this Court's resolution of 13 January 1993, denying its petition for review (G.R. No.
107742).

Thus, since petitioner had already lost its privilege to question the SEC resolution dated May 22, 1992, petitioner can no longer
assail the same SEC resolution, not even by certiorari under Rule 65 of the Rules of Court. A contrary rule would swamp this Court
with petitions for certiorari under Rule 65 after an appeal is lost under Rule 45 of the Rules. This would subvert the long
established public policy that litigations must come to an end at one time or other.

But even granting ex gratia arguendo that petitioner can still avail itself of the remedy of a special civil action of certiorari (under
Rule 65) said remedy should be availed of within a reasonable period from the date of receipt of the assailed order/decision. In Reas
vs. Bonife, we held that 'a petition for certiorari under Rule 65 is required to be filed within a reasonable period, no time frame
being provided in the Rules within which such petition has to be filed.' In the subsequent case of Philsec Workers' Union vs. Hon.
Romeo A. Young (Resolution dated 22 January 1992, G.R No. 101734), it was held that ninety (90) days from notice of the
questioned order/decision is a reasonable period within which to file a petition for certiorari under Rule 65.

In the present petition, the assailed decision of the respondent SEC dated May 22, 1992, was received by petitioner's counsel
on May 25, 1992, and the SEC's resolution denying petitioner's motion for reconsideration was received by petitioner on September
18, 1992. The present petition was filed on July 13, 1993. From September 18, 1992 to July 13, 1993, almost ten (10) months had
lapsed. Undoubtedly, said period of ten (10) months is no longer a 'reasonable period' within which a petition for certiorari under
Rule 65 may be filed.

As earlier said the denial of the petition in G.R No. 107742 is final. We must all be reminded of the settled rule that once a judgment
has become final, the issues raised therein should be laid to rest. Hence, the issues raised anew regarding the again assailed decision
of SEC, dated May 22, 1992, in SEC-AC No. 319, are no longer open to debate and/or adjudication.

ACCORDINGLY, the present petition is DISMISSED."[43]

It appears that subsequent to the revocation of AIFC's certificate of registration, or on October 14, 1993, AIFC registered anew
with the SEC, this time under SEC Reg. No. AS093-008101-A under the name and style: AIFC International Fashion Corporation.
Evidently then, the AIFC which filed the petition in G.R No. 115889 is the AIFC which was "re-registered" on the above date, the
original AIFC's certificate of registration having been revoked with finality by virtue of our resolutions referred to in our above-
quoted 11 August 1993 Resolution.[44] In the same manner, the AIFC which the GTEB refers to in its petition in G.R No. 114711 could
not have been any one other than this same "re-registered" AIFC, said petition having been filed subsequent to the revocation of the
original AIFC's certificate of registration.
It is obvious that the "re-registered" AIFC does not possess the legal personality necessary for it to prosecute these petitions.
In view of the May 20, 1990 Order of the SEC, "the certificate of registration issued to American Inter-Fashion Corporation on
October 14, 1993 under SEC Reg. No. AS093-008101-A"[45] was revoked. For all legal intents and purposes, AIFC no longer exists,
and it may no longer claim to be entitled to the export allocations subject of these petitions. After all, it stands to reason that where
there is no claimant, there can be no claim. The AIFC International is a personality separate and distinct from AIFC. For this
reason, we cannot grant to AIFC International Fashion Corporation the personality to pursue the petition in G.R. No. 114711. It has
not applied for and is thus equally devoid of any personality to lay claim on the export allocations subject of said petition.
In fine, if only for AIFC's lack of legal personality to maintain its claim relative to the export allocations subject of these
petitions, its petition in G.R. No. 115889 is rendered dismissible. On the other hand, and in view likewise of this lack of legal
personality, we would be justified in annulling the January 26, 1994 and March 22, 1994 Resolutions of the Court of Appeals in CA-
G.R. SP No. 31596, and in dismissing the said petition, as prayed for by the GTEB in G.R. No. 114711.
II
In support of its assertion that it is "the sole entity possessed with the power, jurisdiction and discretion to grant and
disapprove export allocations such as export quotas," the GTEB makes reference to Executive Order No. 537, as amended, including
its implementing rules and regulations, and the fact that among the functions of the GTEB therein enumerated are "the approval of
export allocations, as well as the monitoring, administration and regulation thereof." [46] Citing the doctrine of primary jurisdiction,
the GTEB further argues that being "a highly specialized administrative agency endowed with regulatory and quasi-judicial powers
x x x it enjoys the fundamental presumption that it has the technical expertise and mastery over such specialized matters, so much
so that its findings as to the latter would ordinarily deserve the respect of the courts."[47]
AIFC, on the other hand, argues that inasmuch as none of the powers specified in Executive Order 537, specifically Section 3
thereof, gives the GTEB any judicial powers, nor any specific jurisdiction to hear and decide actions, as the term is understood
under Section 1, Rule 2 of the Rules of Court, and inasmuch as GTEB Case No. 92-50 is such an action between private litigants, the
GTEB has no jurisdiction over said case.[48] To reinforce its argument, AIFC cites our ruling in Globe Wireless Ltd. v. PSC.[49] In said
case, we held:

"Too basic in administrative law to need citation of jurisprudence is the rule that the jurisdiction and powers of administrative
agencies x x x are limited to those expressly granted or necessarily implied from those granted in the legislation creating such body;
and any order without or beyond such jurisdiction is void and ineffective x x x"[50]

For its part, Glorious Sun joins the GTEB in the latter's assertion that it is the GTEB which has the jurisdiction to act and rule
on Glorious Sun's petition for the cancellation and restoration to it of the quotas awarded to AIFC. Thus it argues:

"48. Contrary to AIFC's assertions, it is beyond dispute that the GTEB has the jurisdiction to act and rule on Glorious Sun's Petition
for the cancellation and restoration to it of the quotas illegally awarded to AIFC. A simple reference to the pertinent provisions of
the various Executive Orders (E.O.s) relative to the functions of the GTEB easily reveals as much.

49. Under E.O. No. 952, which amended E.O. Nos. 537 and 823 it is provided:

'SECTION 1. Section 3 subparagraphs (a), (h), and (i) of Executive Order No. 537 [on the powers and functions of the Board] is
hereby amended to read as follows:

xxx xxx xxx

(h) In case of violations of its rules and regulations, cancel or suspend quota allocations, export authorizations and licenses for the
operations of bonded garment manufacturing warehouses or disqualify the firm and/or its principal stockholders and officers from
engaging in garment exports and from doing business with the Board; x x x'

50. Thus, if only on the basis of the above-quoted provision, and even in the face of the criteria set forth in Globe, it is at once
evident that the power to adjudicate on the question of the AIFC's entitlement to the subject EQs is 'necessarily implied' from the
Board's power to 'cancel or suspend quota allocations, export authorizations and licenses.'

xxx xxx xxx

51. However, in addition to the above, E.O. No. 913, entitled 'Strengthening the Rule-Making and Adjudicatory Powers of the
Minister of Trade and Industry in Order to Further Protect Consumers,' was likewise issued, which E.O., we respectfully submit,
made the GTEB's power to adjudicate on the question of the AIFC's entitlement to the subject EQs more than just being merely
'necessarily implied.'

52. Thus, Section 5 of Article III of the above-numbered E.O. reads:

SEC. 5. Formal investigation. (a) Whenever the Minister has verified that violation/s of 'Trade and Industry Laws' has/have been
committed, he may motu proprio charge said violator/s, and thereafter proceed with a formal investigation, independent of the
corresponding criminal or civil action for the said violation/s. The imposition of administrative penalties in the formal investigation
is without prejudice to the imposition of penalties in the criminal action and/or judgment in the civil action, and vice
versa. Provided, however, that in deciding the case the Minister or the judge, as the case may be, shall consider the decision of the
other and impose further penalties, or consider the penalties imposed by the other as already sufficient, as his sense of justice
dictates.

(b) The Minister may proceed to hear and determine the violation in the absence of any party who has been served with notice to
appear in the hearing.

(c) The Minister shall use every and all reasonable means to ascertain the facts of the case speedily and objectively without regard
to technicalities of law or procedure and strict rules of evidence prevailing in courts of law and equity. The Minister shall decide the
case within thirty working days from the time the formal investigation was terminated.

(d) The minister shall have the same power to punish direct and indirect contempts granted to superior courts under Rule 71 of the
Rules of Court and the power to issue subpoena duces tecum.

(e) When the 'trade and industry law' violated provides for its own administrative procedure and penalties, including a procedure
where a Board Council, Authority, or Committee takes part as a body, the Minister shall have the option of selecting that procedure
and penalties or the procedure and penalties provided in this Executive Order. If he opts for the latter, the approval of such Board,
Council, Authority, or Committee of the Minister's decision shall not be necessary.'

53. The above-quoted provisions are very significant in light of the definition of the 'Ministry' as the Ministry of Trade and Industry
'and/or any of its bureaus, offices, or attached agencies, or any other office, unit or committee by whatever name which is placed
under or attached to the Ministry of Trade and Industry (Section 1, Article I, E.O. 913; Underscoring supplied).' The GTEB is one
such bureau, office or agency.

54. In this connection, AIFC's statement to the effect that GTEB Case No. 92-50 is an action by one party against another for the
enforcement or protection of a right, is not entirely accurate. It will be remembered that said GTEB case was initiated principally for
the purpose of securing the cancellation of EQs being illegally held onto by AIFC, a proceeding which is undoubtedly within the
ambit of the Board's powers; that Glorious Sun stood to benefit from such cancellation was merely incidental to said proceeding."[51]

After examining the arguments raised by all parties concerned, we find the arguments of the GTEB and Glorious Sun to be
impressed with merit, and accordingly hold that the power and jurisdiction to adjudicate on the question of AIFC's entitlement to
the export allocations subject of the above-entitled petitions (be they export quotas or export authorizations), which includes the
discretion to grant and disapprove said export allocations, belongs solely to the GTEB, and not to the regular courts.
Semantics notwithstanding, it cannot be denied that GTEB Case No. 92-50 was instituted by Glorious Sun for the purpose of
securing the cancellation of EQs then alleged by it as being illegally held by AIFC. This being the case, it likewise cannot be denied
that, as Glorious Sun correctly observes, such a proceeding is clearly within the ambit of the GTEB's powers, more specifically, the
power granted to it by Section 3 subparagraph (h) of Executive Order No. 537 (as amended by E.O. No. 952) to "cancel or suspend
quota allocations, export authorizations and licenses for the operations of bonded garment manufacturing warehouses or disqualify
the firm and/or its principal stockholders and officers from engaging in garment exports and from doing business with the Board,"
in case of violations of its rules and regulations.
In light of the above, AIFC's reliance on our ruling in Globe Wireless Ltd. v. PSC,[52] is clearly misplaced. On the basis of the
provisions of law cited by both the GTEB and Glorious Sun, that the power to adjudicate on the question of an entity's entitlement
to export allocations was expressly granted to the GTEB, or at the very least, was necessarily implied from the power to cancel or
suspend quota allocations, is beyond cavil.
In addition, we must take judicial notice of the fact that AIFC, in cases involving the same controversy as that in the above-
entitled petitions, has recognized the exclusive jurisdiction of the GTEB to award or cancel export allocations to deserving entities.
AIFC categorically declared in its "Motion to Dismiss," Civil Case No. 93-138[53] that "Executive Order No. 537, as amended by
Executive Order Nos. 823 and 952, vests upon defendant GTEB exclusive jurisdiction to grant export quota allocations," and that
"(u)nder the doctrine of primary jurisdiction, only defendant GTEB has the authority to award/cancel export quotas." In fact, it is
noteworthy that in said motion to dismiss, AIFC relied upon the very principles cited by both the GTEB and Glorious Sun in the
above-entitled petitions in support of their argument that it is the GTEB which has jurisdiction over the export allocations subject of
said petitions, to wit:

"Courts of justice should not generally interfere with purely administrative and discretionary functions; that courts have no
supervisory power over the proceedings and actions of the administrative departments of the government involving the exercise of
judgment and findings of fact, because by reason of their special knowledge and expertise over matters falling under their
jurisdiction, the latter are in a better position to pass judgment on such matters and their findings of facts in that regard are
generally accorded respect, if not finality, by the courts. (Ateneo de Manila v. CA, 145 SCRA 105)"[54]

AIFC reiterated this stance in its "Motion to Dismiss" in Civil Case No. 64010[55] in this wise:

"As stated above, this Court cannot grant the reliefs sought in the Complaint without first deciding that AIFC is not entitled to EQs,
and that, in effect, the EQs now in AIFC's name should be cancelled. This power, however, has been granted not to the courts but to
the GTEB, which is vested with jurisdiction

'[i]n case of violations of its rules and regulations, [to] cancel or suspend quota allocations, export authorizations and
licenses for the operations of bonded garment manufacturing warehouses and/or to disqualify the firm and/or its
principal stockholders and officers from engaging in garment exports and from doing business with the Board (Section
3[h], Exec. Order No. 537 [1979], as amended by Exec. Order No. 823 [1982] and Exec. Order No. 952 [1984]).'
And even assuming for argument that it is indeed vested with original jurisdiction to cancel EQs, under the doctrine of primary
jurisdiction, this Court cannot at this time take cognizance of the Complaint (Supra, at pp. 14-15)."

Having already invoked the jurisdiction of the GTEB in earlier actions involving the same controversy as that before us, AIFC
cannot now be heard to question that same jurisdiction simply because it was unable to obtain the reliefs prayed for by it from the
GTEB. We have warned against such a practice on more than one occasion in the past. Most recently, in St. Luke's Medical Center,
Inc. v. Torres,[56] we reiterated such warning:

"It is a settled rule that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and after
failing to obtain such relief, repudiate or question that same jurisdiction. A party cannot invoke jurisdiction at one time and reject it
at another in the same controversy to suit its interests and convenience. The Court frowns upon and does not tolerate the
undesirable practice of some litigants who submit voluntarily a cause and then accepting the judgment when favorable to them and
attacking it for lack of jurisdiction when adverse (Tajonera v. Lamaroza, 110 SCRA 447, citing Tijam v. Sibonghanoy, 23 SCRA
35)."[57]

III
As to the allegations of AIFC that it was deprived of due process, we find no merit to this contention. With respect to the June
21, 1994 Resolution of the GTEB which AIFC assails in its petition in G.R No. 115889, it is AIFC's contention that the GTEB issued
said resolution[58] without giving AIFC the opportunity to be heard and without receiving its evidence in any form.
We disagree.
Insofar as the supposed failure of the GTEB to issue a show cause order to AIFC is concerned, we hold that the GTEB
committed no grave abuse of discretion in instituting an action against AIFC on the basis of the allegations in Glorious Sun's
petition in GTEB Case No. 92-50. It is apparent from the rule cited by AIFC[59] that the same was aimed primarily at ensuring that if
any action is to be filed against a respondent, the same must have sufficient basis in fact. Consequently, for so long as this goal is
achieved, albeit through some other means, no undue prejudice can be caused by the non-issuance of a show-cause order. In fact, as
correctly pointed out by Glorious Sun, the GTEB, as a bureau, office or agency attached to the Ministry of Trade and Industry, may
even motu proprio charge violators of "Trade and Industry Laws," and thereafter proceed with a formal investigation.[60]
Anent AIFC's claim that it was not afforded the opportunity to present evidence in GTEB Case No. 92-50, we find such claim
unworthy of belief. The GTEB, as an administrative agency, has in its favor the presumption that it has regularly performed its
official duties, including those which are quasi-judicial in nature. In the absence of clear facts to rebut the same, said presumption
of regularity must be upheld. This is also but in keeping with the doctrine of primary jurisdiction.
We are inclined to give credence instead to Glorious Sun's assertions relative to AIFC's presentation of evidence in GTEB Case
No. 92-50, there being ample basis in the records therefor. Thus, after examining the "Motion to Dismiss" filed by AIFC in GTEB
Case No. 92-50,[61] we find nothing therein to indicate that AIFC reserved its right to present evidence in said GTEB case, contrary
to AIFC's claims. On the other hand, as correctly pointed out by Glorious Sun, if any reservation was made by AIFC in its "Sur
Rejoinder (Re: Motion to Dismiss)," attached to AIFC's petition as Annex "E," this was limited to the reservation "to raise the
question of jurisdiction."[62]
More importantly, it is apparent that not only was AIFC afforded the opportunity to present evidence, it actually took
advantage of this opportunity by presenting documentary evidence, as asserted by Glorious Sun, an assertion which AIFC most
notably failed to refute. As we have declared time and again, what is repugnant to due process is the denial of the opportunity to be
heard.[63] That AIFC was afforded this opportunity is beyond question.
From what has been discussed the following conclusions are made:

(1) AIFC no longer has the legal personality to prosecute the above-entitled petitions and may therefore no longer claim entitlement
to the export allocations subject of these petitions;

(2) It is the GTEB, and not the regular courts, nor the Court of Appeals, which has the jurisdiction to adjudicate on the question of
AIFC's entitlement to the export allocations subject to these petitions; and

(3) AIFC's right to due process was in no wise violated by the GTEB, the former not having taken advantage of the opportunity
afforded to it to present evidence in its behalf.

WHEREFORE, AIFC's petition in G.R. No. 115889 is hereby DENIED for lack of merit, as well as for being moot and
academic, AIFC having lost the legal personality to prosecute the same. GTEB's petition is GRANTED, and the assailed January 21,
1994 Decision and March 22, 1994 Resolution of the Court of Appeals in CA-G.R. SP No. 31596 is hereby ANNULLED AND SET
ASIDE (except insofar as it denied AIFC and AIFC International Fashion Corporation's "Motion for Issuance of Writ
of Mandamus"). Said CA-G.R SP No. 31596 is likewise ordered annulled and set aside.
SO ORDERED.

G.R. No. 101279 August 6, 1992

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,


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

De Guzman, Meneses & Associates for petitioner.

GRIÑO-AQUINO, J.:

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

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

On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids employed in Hong Kong,
DOLE Secretary Ruben D. Torres issued Department Order No. 16, Series of 1991, temporarily suspending the recruitment by
private employment agencies of "Filipino domestic helpers going to Hong Kong" (p. 30, Rollo). The DOLE itself, through the POEA
took over the business of deploying such Hong Kong-bound workers.

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

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

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

Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of 1991, dated July 10, 1991, providing
GUIDELINES on the Government processing and deployment of Filipino domestic helpers to Hong Kong and the accreditation of
Hong Kong recruitment agencies intending to hire Filipino domestic helpers.

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

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

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

An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the supervision of the POEA shall
take charge of the various operations involved in the Hong Kong-DH industry segment:

The HWPU shall have the following functions in coordination with appropriate units and other entities
concerned:

1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies

2. Manpower Pooling

3. Worker Training and Briefing

4. Processing and Deployment

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

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

xxx xxx xxx

X. Interim Arrangement

All contracts stamped in Hong Kong as of June 30 shall continue to be processed by POEA until 31 July 1991
under the name of the Philippine agencies concerned. Thereafter, all contracts shall be processed with the
HWPU.

Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General in Hong kong a list of their
accepted applicants in their pool within the last week of July. The last day of acceptance shall be July 31 which
shall then be the basis of HWPU in accepting contracts for processing. After the exhaustion of their respective
pools the only source of applicants will be the POEA manpower pool.

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

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

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

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

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

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

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

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

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

1. that the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in
issuing said circulars;

2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair and
oppressive; and

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

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

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

Art. 36. Regulatory Power. — The Secretary of Labor shall have the power to restrict and regulate the
recruitment and placement activities of all agencies within the coverage of this title [Regulation of Recruitment
and Placement Activities] and is hereby authorized to issue orders and promulgate rules and regulations to
carry out the objectives and implement the provisions of this title. (Emphasis ours.)
On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive Order No. 797 on May 1, 1982
to take over the functions of the Overseas Employment Development Board, the National Seamen Board, and the overseas
employment functions of the Bureau of Employment Services, is broad and far-ranging for:

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

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

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

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

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

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


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

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

It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of
Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the
same fall within the "administrative and policing powers expressly or by necessary implication conferred" upon the respondents
(People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant
of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and
whereas the power to "regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the
interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine Communications Satellite Corporation
vs. Alcuaz, 180 SCRA 218).

The Solicitor General, in his Comment, aptly observed:

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

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

xxx xxx xxx

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

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

xxx xxx xxx

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

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

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

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

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

Sec. 3. Filing. — (1) Every agency shall file with the University of the Philippines Law Center, three (3) certified
copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within
three (3) months shall not thereafter be the basis of any sanction against any party or persons. (Emphasis
supplied, Chapter 2, Book VII of the Administrative Code of 1987.)

Sec. 4. Effectivity. — In addition to other rule-making requirements provided by law not inconsistent with this
Book, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a
different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and
welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall take
appropriate measures to make emergency rules known to persons who may be affected by them. (Emphasis
supplied, Chapter 2, Book VII of the Administrative Code of 1987).

Once, more we advert to our ruling in Tañada vs. Tuvera, 146 SCRA 446 that:

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

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

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

For lack of proper publication, the administrative circulars in question may not be enforced and implemented.

WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order No. 16, Series of 1991, and
POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, by the public respondents is hereby SUSPENDED pending
compliance with the statutory requirements of publication and filing under the aforementioned laws of the land.

SO ORDERED.

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner,


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

G.R. No. 118745 October 6, 1995

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


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

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

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

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

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

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

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

a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar as it
provides for the opening of trust accounts in lieu of deposits in cash or bonds;

b) Respondent Landbank is ordered to immediately deposit — not merely "earmark", "reserve"


or "deposit in trust" — with an accessible bank designated by respondent DAR in the names of
the following petitioners the following amounts in cash and in government financial
instruments — within the parameters of Sec. 18 (1) of RA 6657:

P 1,455,207.31 Pedro L. Yap

P 135,482.12 Heirs of Emiliano Santiago

P 15,914,127.77 AMADCOR;

c) The DAR-designated bank is ordered to allow the petitioners to withdraw the above-
deposited amounts without prejudice to the final determination of just compensation by the
proper authorities; and

d) Respondent DAR is ordered to 1) immediately conduct summary administrative


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

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

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

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

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

As found by respondent court , the following are undisputed:


Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of petitioner Yap
were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the names of farmer
beneficiaries collectively, based on the request of the DAR together with a certification of the Landbank that the
sum of P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L. Yap for the parcels of lands
covered by TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in
the names of listed beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying
with the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds in an
accessible bank. (Rollo, p. 6).

The above allegations are not disputed by any of the respondents.

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

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

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

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

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse of
discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or bonds in an accessible
bank designated by the DAR, the compensation for the land before it is taken and the titles are cancelled as provided under Section
16(e) of RA 6657.9 Private respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust"
or "reserved" the compensation in their names as landowners despite the clear mandate that before taking possession of the
property, the compensation must be deposited in cash or in bonds. 10

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

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

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

Hence, the instant petitions.


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

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

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

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

Sec. 16. Procedure for Acquisition of Private Lands —

xxx xxx xxx

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

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

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

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

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

The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of RA 6657 and
payment of final compensation as provided under Section 1821 of the same law. According to petitioners, the right of the landowner
to withdraw the amount deposited in his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and
the LBP or that adjudged by the court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case
of rejection by the landowner because the latter amount is only provisional and intended merely to secure possession of the
property pending final valuation. To further bolster the contention petitioners cite the following pronouncements in the case of
"Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform".22

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

xxx xxx xxx

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

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

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

. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the Supreme
Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform (175
SCRA 343), to conclude that "payments of the just compensation is not always required to be made fully in
money" — even as the Supreme Court admits in the same case "that the traditional medium for the payment of
just compensation is money and no other" — the Supreme Court in said case did not abandon the "recognized
rule . . . that title to the property expropriated shall pass from the owner to the expropriator only upon full
payment of the just compensation." 23 (Emphasis supplied)

We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the extraordinary
nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment of
compensation and recognized payment other than in cash. It did not, however, dispense with the settled rule that there must be full
payment of just compensation before the title to the expropriated property is transferred.

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

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

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

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

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

SO ORDERED.

G.R. No. 112024 January 28, 1999

PHILIPPINE BANK OF COMMUNICATIONS, petitioner,


vs.
COMMISSIONER OF INTERNAL REVENUE, COURT OF TAX APPEALS and COURT OF APPEALS, respondent.

QUISUMBING, J.:

This petition for review assails the Resolution 1 of the Court of Appeals dated September 22, 1993 affirming the Decision2 and a
Resolution 3 of the Court Of Tax Appeals which denied the claims of the petitioner for tax refund and tax credits, and disposing as
follows:
IN VIEW OF ALL, THE FOREGOING, the instant petition for review, is DENIED due course. The Decision of the
Court of Tax Appeals dated May 20, 1993 and its resolution dated July 20, 1993, are hereby AFFIRMED in toto.

SO ORDERED.4

The Court of Tax Appeals earlier ruled as follows:

WHEREFORE, Petitioner's claim for refund/tax credits of overpaid income tax for 1985 in the amount of
P5,299,749.95 is hereby denied for having been filed beyond the reglementary period. The 1986 claim for refund
amounting to P234,077.69 is likewise denied since petitioner has opted and in all likelihood automatically
credited the same to the succeeding year. The petition for review is dismissed for lack of merit.

SO ORDERED.5

The facts on record show the antecedent circumstances pertinent to this case.

Petitioner, Philippine Bank of Communications (PBCom), a commercial banking corporation duly organized under Philippine laws,
filed its quarterly income tax returns for the first and second quarters of 1985, reported profits, and paid the total income tax of
P5,016,954.00. The taxes due were settled by applying PBCom's tax credit memos and accordingly, the Bureau of Internal Revenue
(BIR) issued Tax Debit Memo Nos. 0746-85 and 0747-85 for P3,401,701.00 and P1,615,253.00, respectively.

Subsequently, however, PBCom suffered losses so that when it filed its Annual Income Tax Returns for the year-ended December
31, 1986, the petitioner likewise reported a net loss of P14,129,602.00, and thus declared no tax payable for the year.

But during these two years, PBCom earned rental income from leased properties. The lessees withheld and remitted to the BIR
withholding creditable taxes of P282,795.50 in 1985 and P234,077.69 in 1986.

On August 7, 1987, petitioner requested the Commissioner of Internal Revenue, among others, for a tax credit of P5,016,954.00
representing the overpayment of taxes in the first and second quarters of 1985.

Thereafter, on July 25, 1988, petitioner filed a claim for refund of creditable taxes withheld by their lessees from property rentals in
1985 for P282,795.50 and in 1986 for P234,077.69.

Pending the investigation of the respondent Commissioner of Internal Revenue, petitioner instituted a Petition for Review on
November 18, 1988 before the Court of Tax Appeals (CTA). The petition was docketed as CTA Case No. 4309 entitled: "Philippine
Bank of Communications vs. Commissioner of Internal Revenue."

The losses petitioner incurred as per the summary of petitioner's claims for refund and tax credit for 1985 and 1986, filed before the
Court of Tax Appeals, are as follows:

1985 1986

——— ———

Net Income (Loss) (P25,317,288.00) (P14,129,602.00)

Tax Due NIL NIL

Quarterly tax.

Payments Made 5,016,954.00 —

Tax Withheld at Source 282,795.50 234,077.69

———————— ———————

Excess Tax Payments P5,299,749.50* P234,077.69

=============== =============

* CTA's decision reflects PBCom's 1985 tax claim as P5,299,749.95. A forty five centavo
difference was noted.

On May 20, 1993, the CTA rendered a decision which, as stated on the outset, denied the request of petitioner for a tax refund or
credit in the sum amount of P5,299,749.95, on the ground that it was filed beyond the two-year reglementary period provided for by
law. The petitioner's claim for refund in 1986 amounting to P234,077.69 was likewise denied on the assumption that it was
automatically credited by PBCom against its tax payment in the succeeding year.

On June 22, 1993, petitioner filed a Motion for Reconsideration of the CTA's decision but the same was denied due course for lack
of merit. 6

Thereafter, PBCom filed a petition for review of said decision and resolution of the CTA with the Court of Appeals. However on
September 22, 1993, the Court of Appeals affirmed in toto the CTA's resolution dated July 20, 1993. Hence this petition now before
us.

The issues raised by the petitioner are:

I. Whether taxpayer PBCom — which relied in good faith on the formal assurances of BIR in
RMC No. 7-85 and did not immediately file with the CTA a petition for review asking for the
refund/tax credit of its 1985-86 excess quarterly income tax payments — can be prejudiced by
the subsequent BIR rejection, applied retroactivity, of its assurances in RMC No. 7-85 that the
prescriptive period for the refund/tax credit of excess quarterly income tax payments is not two
years but ten (10).7

II. Whether the Court of Appeals seriously erred in affirming the CTA decision which denied
PBCom's claim for the refund of P234,077.69 income tax overpaid in 1986 on the mere
speculation, without proof, that there were taxes due in 1987 and that PBCom availed of tax-
crediting that year.8

Simply stated, the main question is: Whether or not the Court of Appeals erred in denying the plea for tax refund or tax credits on
the ground of prescription, despite petitioner's reliance on RMC No. 7-85, changing the prescriptive period of two years to ten
years?

Petitioner argues that its claims for refund and tax credits are not yet barred by prescription relying on the applicability of Revenue
Memorandum Circular No. 7-85 issued on April 1, 1985. The circular states that overpaid income taxes are not covered by the two-
year prescriptive period under the tax Code and that taxpayers may claim refund or tax credits for the excess quarterly income tax
with the BIR within ten (10) years under Article 1144 of the Civil Code. The pertinent portions of the circular reads:

REVENUE MEMORANDUM CIRCULAR NO. 7-85

SUBJECT: PROCESSING OF REFUND OR TAX CREDIT OF EXCESS


CORPORATE INCOME TAX RESULTING FROM THE FILING OF THE
FINAL ADJUSTMENT RETURN.

TO: All Internal Revenue Officers and Others Concerned.

Sec. 85 And 86 Of the National Internal Revenue Code provide:

xxx xxx xxx

The foregoing provisions are implemented by Section 7 of Revenue Regulations Nos. 10-77 which provide;

xxx xxx xxx

It has been observed, however, that because of the excess tax payments, corporations file claims for recovery of
overpaid income tax with the Court of Tax Appeals within the two-year period from the date of payment, in
accordance with sections 292 and 295 of the National Internal Revenue Code. It is obvious that the filing of the
case in court is to preserve the judicial right of the corporation to claim the refund or tax credit.

It should he noted, however, that this is not a case of erroneously or illegally paid tax under the provisions of
Sections 292 and 295 of the Tax Code.

In the above provision of the Regulations the corporation may request for the refund of the overpaid income tax
or claim for automatic tax credit. To insure prompt action on corporate annual income tax returns showing
refundable amounts arising from overpaid quarterly income taxes, this Office has promulgated Revenue
Memorandum Order No. 32-76 dated June 11, 1976, containing the procedure in processing said returns. Under
these procedures, the returns are merely pre-audited which consist mainly of checking mathematical accuracy of
the figures of the return. After which, the refund or tax credit is granted, and, this procedure was adopted to
facilitate immediate action on cases like this.

In this regard, therefore, there is no need to file petitions for review in the Court of Tax Appeals in order to
preserve the right to claim refund or tax credit the two year period. As already stated, actions hereon by the
Bureau are immediate after only a cursory pre-audit of the income tax returns. Moreover, a taxpayer may recover
from the Bureau of Internal Revenue excess income tax paid under the provisions of Section 86 of the Tax Code
within 10 years from the date of payment considering that it is an obligation created by law (Article 1144 of the
Civil Code).9 (Emphasis supplied.)

Petitioner argues that the government is barred from asserting a position contrary to its declared circular if it would result to
injustice to taxpayers. Citing ABS CBN Broadcasting Corporation vs. Court of Tax Appeals 10 petitioner claims that rulings or
circulars promulgated by the Commissioner of Internal Revenue have no retroactive effect if it would be prejudicial to taxpayers, In
ABS-CBN case, the Court held that the government is precluded from adopting a position inconsistent with one previously taken
where injustice would result therefrom or where there has been a misrepresentation to the taxpayer.

Petitioner contends that Sec. 246 of the National Internal Revenue Code explicitly provides for this rules as follows:

Sec. 246 Non-retroactivity of rulings— Any revocation, modification or reversal of any of the rules and
regulations promulgated in accordance with the preceding section or any of the rulings or circulars promulgated
by the Commissioner shall not be given retroactive application if the revocation, modification or reversal will be
prejudicial to the taxpayers except in the following cases:

a). where the taxpayer deliberately misstates or omits material facts from his
return or in any document required of him by the Bureau of Internal
Revenue;

b). where the facts subsequently gathered by the Bureau of Internal Revenue
are materially different from the facts on which the ruling is based;

c). where the taxpayer acted in bad faith.

Respondent Commissioner of Internal Revenue, through Solicitor General, argues that the two-year prescriptive period for filing
tax cases in court concerning income tax payments of Corporations is reckoned from the date of filing the Final Adjusted Income
Tax Return, which is generally done on April 15 following the close of the calendar year. As precedents, respondent Commissioner
cited cases which adhered to this principle, to wit ACCRA Investments Corp. vs. Court of Appeals, et al., 11 and Commissioner of
Internal Revenue vs. TMX Sales, Inc., et al.. 12 Respondent Commissioner also states that since the Final Adjusted Income Tax
Return of the petitioner for the taxable year 1985 was supposed to be filed on April 15, 1986, the latter had only until April 15, 1988
to seek relief from the court. Further, respondent Commissioner stresses that when the petitioner filed the case before the CTA on
November 18, 1988, the same was filed beyond the time fixed by law, and such failure is fatal to petitioner's cause of action.

After a careful study of the records and applicable jurisprudence on the matter, we find that, contrary to the petitioner's contention,
the relaxation of revenue regulations by RMC 7-85 is not warranted as it disregards the two-year prescriptive period set by law.

Basic is the principle that "taxes are the lifeblood of the nation." The primary purpose is to generate funds for the State to finance
the needs of the citizenry and to advance the common weal. 13 Due process of law under the Constitution does not require judicial
proceedings in tax cases. This must necessarily be so because it is upon taxation that the government chiefly relies to obtain the
means to carry on its operations and it is of utmost importance that the modes adopted to enforce the collection of taxes levied
should be summary and interfered with as little as possible. 14

From the same perspective, claims for refund or tax credit should be exercised within the time fixed by law because the BIR being
an administrative body enforced to collect taxes, its functions should not be unduly delayed or hampered by incidental matters.

Sec. 230 of the National Internal Revenue Code (NIRC) of 1977 (now Sec. 229, NIRC of 1997) provides for the prescriptive period
for filing a court proceeding for the recovery of tax erroneously or illegally collected, viz.:

Sec. 230. Recovery of tax erroneously or illegally collected. — No suit or proceeding shall be maintained in any
court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally
assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to
have been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed
with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum
has been paid under protest or duress.

In any case, no such suit or proceedings shall begun after the expiration of two years from the date of payment
of the tax or penalty regardless of any supervening cause that may arise after payment; Provided however,
That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of
the return upon which payment was made, such payment appears clearly to have been erroneously paid.
(Emphasis supplied)

The rule states that the taxpayer may file a claim for refund or credit with the Commissioner of Internal Revenue, within two (2)
years after payment of tax, before any suit in CTA is commenced. The two-year prescriptive period provided, should be computed
from the time of filing the Adjustment Return and final payment of the tax for the year.

In Commissioner of Internal Revenue vs. Philippine American Life Insurance Co., 15 this Court explained the application of Sec.
230 of 1977 NIRC, as follows:
Clearly, the prescriptive period of two years should commence to run only from the time that the refund is
ascertained, which can only be determined after a final adjustment return is accomplished. In the present case,
this date is April 16, 1984, and two years from this date would be April 16, 1986. . . . As we have earlier said in the
TMX Sales case, Sections 68. 16 69, 17 and 70 18 on Quarterly Corporate Income Tax Payment and Section 321
should be considered in conjunction with it 19

When the Acting Commissioner of Internal Revenue issued RMC 7-85, changing the prescriptive period of two years to ten years on
claims of excess quarterly income tax payments, such circular created a clear inconsistency with the provision of Sec. 230 of 1977
NIRC. In so doing, the BIR did not simply interpret the law; rather it legislated guidelines contrary to the statute passed by
Congress.

It bears repeating that Revenue memorandum-circulars are considered administrative rulings (in the sense of more specific and
less general interpretations of tax laws) which are issued from time to time by the Commissioner of Internal Revenue. It is widely
accepted that the interpretation placed upon a statute by the executive officers, whose duty is to enforce it, is entitled to great
respect by the courts. Nevertheless, such interpretation is not conclusive and will be ignored if judicially found to be
erroneous. 20 Thus, courts will not countenance administrative issuances that override, instead of remaining consistent and in
harmony with the law they seek to apply and implement. 21

In the case of People vs. Lim, 22 it was held that rules and regulations issued by administrative officials to implement a law cannot
go beyond the terms and provisions of the latter.

Appellant contends that Section 2 of FAO No. 37-1 is void because it is not only inconsistent with but is contrary
to the provisions and spirit of Act. No 4003 as amended, because whereas the prohibition prescribed in said
Fisheries Act was for any single period of time not exceeding five years duration, FAO No 37-1 fixed no period,
that is to say, it establishes an absolute ban for all time. This discrepancy between Act No. 4003 and FAO No. 37-1
was probably due to an oversight on the part of Secretary of Agriculture and Natural Resources. Of course, in case
of discrepancy, the basic Act prevails, for the reason that the regulation or rule issued to implement a law cannot
go beyond the terms and provisions of the
latter. . . . In this connection, the attention of the technical men in the offices of Department Heads who draft
rules and regulation is called to the importance and necessity of closely following the terms and provisions of the
law which they intended to implement, this to avoid any possible misunderstanding or confusion as in the present
case.23

Further, fundamental is the rule that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. 24 As
pointed out by the respondent courts, the nullification of RMC No. 7-85 issued by the Acting Commissioner of Internal Revenue is
an administrative interpretation which is not in harmony with Sec. 230 of 1977 NIRC. for being contrary to the express provision of
a statute. Hence, his interpretation could not be given weight for to do so would, in effect, amend the statute.

It is likewise argued that the Commissioner of Internal Revenue, after promulgating RMC No. 7-85, is estopped
by the principle of non-retroactively of BIR rulings. Again We do not agree. The Memorandum Circular, stating
that a taxpayer may recover the excess income tax paid within 10 years from date of payment because this is an
obligation created by law, was issued by the Acting Commissioner of Internal Revenue. On the other hand, the
decision, stating that the taxpayer should still file a claim for a refund or tax credit and corresponding petition fro
review within the
two-year prescription period, and that the lengthening of the period of limitation on refund from two to ten years
would be adverse to public policy and run counter to the positive mandate of Sec. 230, NIRC, - was the ruling and
judicial interpretation of the Court of Tax Appeals. Estoppel has no application in the case at bar because it was
not the Commissioner of Internal Revenue who denied petitioner's claim of refund or tax credit. Rather, it was
the Court of Tax Appeals who denied (albeit correctly) the claim and in effect, ruled that the RMC No. 7-85 issued
by the Commissioner of Internal Revenue is an administrative interpretation which is out of harmony with or
contrary to the express provision of a statute (specifically Sec. 230, NIRC), hence, cannot be given weight for to
do so would in effect amend the statute.25

Art. 8 of the Civil Code 26 recognizes judicial decisions, applying or interpreting statutes as part of the legal system of the country.
But administrative decisions do not enjoy that level of recognition. A memorandum-circular of a bureau head could not operate to
vest a taxpayer with shield against judicial action. For there are no vested rights to speak of respecting a wrong construction of the
law by the administrative officials and such wrong interpretation could not place the Government in estoppel to correct or overrule
the same. 27 Moreover, the non-retroactivity of rulings by the Commissioner of Internal Revenue is not applicable in this case
because the nullity of RMC No. 7-85 was declared by respondent courts and not by the Commissioner of Internal Revenue. Lastly, it
must be noted that, as repeatedly held by this Court, a claim for refund is in the nature of a claim for exemption and should be
construed in strictissimi juris against the taxpayer.28

On the second issue, the petitioner alleges that the Court of Appeals seriously erred in affirming CTA's decision denying its claim for
refund of P234,077.69 (tax overpaid in 1986), based on mere speculation, without proof, that PBCom availed of the automatic tax
credit in 1987.

Sec. 69 of the 1977 NIRC 29 (now Sec. 76 of the 1997 NIRC) provides that any excess of the total quarterly payments over the actual
income tax computed in the adjustment or final corporate income tax return, shall either(a) be refunded to the corporation, or (b)
may be credited against the estimated quarterly income tax liabilities for the quarters of the succeeding taxable year.
The corporation must signify in its annual corporate adjustment return (by marking the option box provided in the BIR form) its
intention, whether to request for a refund or claim for an automatic tax credit for the succeeding taxable year. To ease the
administration of tax collection, these remedies are in the alternative, and the choice of one precludes the other.

As stated by respondent Court of Appeals:

Finally, as to the claimed refund of income tax over-paid in 1986 — the Court of Tax Appeals, after examining the
adjusted final corporate annual income tax return for taxable year 1986, found out that petitioner opted to apply
for automatic tax credit. This was the basis used (vis-avis the fact that the 1987 annual corporate tax return was
not offered by the petitioner as evidence) by the CTA in concluding that petitioner had indeed availed of and
applied the automatic tax credit to the succeeding year, hence it can no longer ask for refund, as to [sic] the two
remedies of refund and tax credit are alternative. 30

That the petitioner opted for an automatic tax credit in accordance with Sec. 69 of the 1977 NIRC, as specified in its 1986 Final
Adjusted Income Tax Return, is a finding of fact which we must respect. Moreover, the 1987 annual corporate tax return of the
petitioner was not offered as evidence to contovert said fact. Thus, we are bound by the findings of fact by respondent courts, there
being no showing of gross error or abuse on their part to disturb our reliance thereon. 31

WHEREFORE, the, petition is hereby DENIED, The decision of the Court of Appeals appealed from is AFFIRMED, with COSTS
against the petitioner.1âwphi1.nêt

SO ORDERED.

[G.R. No. 127685. July 23, 1998]

BLAS F. OPLE, petitioner, vs. RUBEN D. TORRES, ALEXANDER AGUIRRE, HECTOR VILLANUEVA, CIELITO
HABITO, ROBERT BARBERS, CARMENCITA REODICA, CESAR SARINO, RENATO VALENCIA, TOMAS P.
AFRICA, HEAD OF THE NATIONAL COMPUTER CENTER and CHAIRMAN OF THE COMMISSION ON
AUDIT, respondents.

DECISION
PUNO, J.:

The petition at bar is a commendable effort on the part of Senator Blas F. Ople to prevent the shrinking of the right to privacy,
which the revered Mr. Justice Brandeis considered as "the most comprehensiveof rights and the right most valued by civilized
men."[1] Petitioner Ople prays that we invalidate Administrative Order No. 308 entitled "Adoption of a National Computerized
Identification Reference System" on two important constitutional grounds, viz: one, it is a usurpation of the power of Congress to
legislate, and two, it impermissibly intrudes on our citizenry's protected zone of privacy. We grant the petition for the rights sought
to be vindicated by the petitioner need stronger barriers against further erosion.
A.O. No. 308 was issued by President Fidel V. Ramos on December 12, 1996 and reads as follows:

"ADOPTION OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM

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

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

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

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by
law, do hereby direct the following:

SECTION 1. Establishment of a National Computerized Identification Reference System. A decentralized Identification Reference
System among the key basic services and social security providers is hereby established.

SEC. 2 Inter-Agency Coordinating Committee. An Inter-Agency Coordinating Committee (IACC) to draw-up the implementing
guidelines and oversee the implementation of the System is hereby created, chaired by the Executive Secretary, with the following
as members:
Head, Presidential Management Staff

Secretary, National Economic Development Authority


Secretary, Department of the Interior and
Local Government
Secretary, Department of Health
Administrator, Government Service Insurance
System,
Administrator, Social Security System, Administrator, National Statistics Office Managing Director,
National Computer Center.

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

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

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

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

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

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

DONE in the City of Manila, this 12th day of December in the year of Our Lord, Nineteen Hundred and Ninety-Six.

(SGD.) FIDEL V. RAMOS"

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

"A. THE ESTABLISHMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM REQUIRES A


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

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

C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE GROUNDWORK FOR A SYSTEM WHICH WILL
VIOLATE THE BILL OF RIGHTS ENSHRINED IN THE CONSTITUTION."[2]

Respondents counter-argue:

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

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

C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE IDENTIFICATION REFERENCE SYSTEM MAY BE
SOURCED FROM THE BUDGETS OF THE CONCERNED AGENCIES;

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

We now resolve.
I
As is usual in constitutional litigation, respondents raise the threshold issues relating to the standing to sue of the petitioner
and the justiciability of the case at bar. More specifically, respondents aver that petitioner has no legal interest to uphold and that
the implementing rules of A.O. No. 308 have yet to be promulgated.
These submissions do not deserve our sympathetic ear. Petitioner Ople is a distinguished member of our Senate. As a Senator,
petitioner is possessed of the requisite standing to bring suit raising the issue that the issuance of A.O. No. 308 is a usurpation of
legislative power.[4] As taxpayer and member of the Government Service Insurance System (GSIS), petitioner can also impugn the
legality of the misalignment of public funds and the misuse of GSIS funds to implement A.O. No. 308.[5]
The ripeness for adjudication of the petition at bar is not affected by the fact that the implementing rules of A.O. No. 308 have
yet to be promulgated. Petitioner Ople assails A.O. No. 308 as invalid per se and as infirmed on its face. His action is not premature
for the rules yet to be promulgated cannot cure its fatal defects. Moreover, the respondents themselves have started the
implementation of A.O. No. 308 without waiting for the rules. As early as January 19, 1997, respondent Social Security System
(SSS) caused the publication of a notice to bid for the manufacture of the National Identification (ID) card. [6]Respondent Executive
Secretary Torres has publicly announced that representatives from the GSIS and the SSS have completed the guidelines for the
national identification system.[7] All signals from the respondents show their unswerving will to implement A.O. No. 308 and we
need not wait for the formality of the rules to pass judgment on its constitutionality. In this light, the dissenters insistence that we
tighten the rule on standing is not a commendable stance as its result would be to throttle an important constitutional principle and
a fundamental right.
II
We now come to the core issues. Petitioner claims that A.O. No. 308 is not a mere administrative order but a
law and hence, beyond the power of the President to issue. He alleges that A.O. No. 308 establishes a system of
identification that is all-encompassing in scope, affects the life and liberty of every Filipino citizen and foreign resident, and more
particularly, violates their right to privacy.
Petitioner's sedulous concern for the Executive not to trespass on the lawmaking domain of Congress is understandable. The
blurring of the demarcation line between the power of the Legislature to make laws and the power of the Executive to execute laws
will disturb their delicate balance of power and cannot be allowed. Hence, the exercise by one branch of government of power
belonging to another will be given a stricter scrutiny by this Court.
The line that delineates Legislative and Executive power is not indistinct. Legislative power is "the authority, under the
Constitution, to make laws, and to alter and repeal them."[8] The Constitution, as the will of the people in their original, sovereign
and unlimited capacity, has vested this power in the Congress of the Philippines.[9] The grant of legislative power to Congress is
broad, general and comprehensive.[10] The legislative body possesses plenary power for all purposes of civil government. [11] Any
power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it
elsewhere.[12] In fine, except as limited by the Constitution, either expressly or impliedly, legislative power embraces all subjects and
extends to matters of general concern or common interest.[13]
While Congress is vested with the power to enact laws, the President executes the laws.[14] The executive power is vested
in the President.[15] It is generally defined as the power to enforce and administer the laws. [16] It is the power of carrying the laws
into practical operation and enforcing their due observance.[17]
As head of the Executive Department, the President is the Chief Executive. He represents the government as a whole and sees
to it that all laws are enforced by the officials and employees of his department. [18] He has control over the executive department,
bureaus and offices. This means that he has the authority to assume directly the functions of the executive department, bureau and
office, or interfere with the discretion of its officials.[19] Corollary to the power of control, the President also has the duty of
supervising the enforcement of laws for the maintenance of general peace and public order.Thus, he is granted administrative
power over bureaus and offices under his control to enable him to discharge his duties effectively.[20]
Administrative power is concerned with the work of applying policies and enforcing orders as determined
by proper governmental organs.[21] It enables the President to fix a uniform standard of administrative efficiency
and check the official conduct of his agents. [22] To this end, he can issue administrative orders, rules and
regulations.
Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not appropriate to be
covered by an administrative order. An administrative order is:

"Sec. 3. Administrative Orders.-- Acts of the President which relate to particular aspects of governmental operation in pursuance of
his duties as administrative head shall be promulgated in administrative orders."[23]

An administrative order is an ordinance issued by the President which relates to specific aspects in the administrative operation of
government. It must be in harmony with the law and should be for the sole purpose of implementing the law and
carrying out the legislative policy.[24] We reject the argument that A.O. No. 308 implements the legislative policy
of the Administrative Code of 1987. The Code is a general law and "incorporates in a unified document the major structural,
functional and procedural principles of governance"[25] and "embodies changes in administrative structures and procedures
designed to serve the people."[26] The Code is divided into seven (7) Books: Book I deals with Sovereignty and General
Administration, Book II with the Distribution of Powers of the three branches of Government, Book III on the Office of the
President, Book IV on the Executive Branch, Book V on the Constitutional Commissions, Book VI on National Government
Budgeting, and Book VII on Administrative Procedure. These Books contain provisions on the organization, powers and general
administration of the executive, legislative and judicial branches of government, the organization and administration of
departments, bureaus and offices under the executive branch, the organization and functions of the Constitutional Commissions
and other constitutional bodies, the rules on the national government budget, as well as guidelines for the exercise by
administrative agencies of quasi-legislative and quasi-judicial powers. The Code covers both the internal administration of
government, i.e, internal organization, personnel and recruitment, supervision and discipline, and the effects of the functions
performed by administrative officials on private individuals or parties outside government.[27]
It cannot be simplistically argued that A.O. No. 308 merely implements the Administrative Code of 1987. It establishes for the
first time a National Computerized Identification Reference System. Such a System requires a delicate adjustment of various
contending state policies-- the primacy of national security, the extent of privacy interest against dossier-gathering by government,
the choice of policies, etc.Indeed, the dissent of Mr. Justice Mendoza states that the A.O. No. 308 involves the all-important
freedom of thought. As said administrative order redefines the parameters of some basic rights of our citizenry vis-a-vis the State as
well as the line that separates the administrative power of the President to make rules and the legislative power of Congress, it
ought to be evident that it deals with a subject that should be covered by law.
Nor is it correct to argue as the dissenters do that A.O. No. 308 is not a law because it confers no right, imposes no duty,
affords no protection, and creates no office. Under A.O. No. 308, a citizen cannot transact business with government agencies
delivering basic services to the people without the contemplated identification card. No citizen will refuse to get this identification
card for no one can avoid dealing with government. It is thus clear as daylight that without the ID, a citizen will have difficulty
exercising his rights and enjoying his privileges. Given this reality, the contention that A.O. No. 308 gives no right and imposes no
duty cannot stand.
Again, with due respect, the dissenting opinions unduly expand the limits of administrative legislation and consequently
erodes the plenary power of Congress to make laws. This is contrary to the established approach defining the traditional limits of
administrative legislation. As well stated by Fisher: "x x x Many regulations however, bear directly on the public. It is
here that administrative legislation must be restricted in its scope and application. Regulations are not supposed
to be a substitute for the general policy-making that Congress enacts in the form of a public law.Although
administrative regulations are entitled to respect, the authority to prescribe rules and regulations is not an
independent source of power to make laws."[28]
III
Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it cannot pass constitutional
muster as an administrative legislation because facially it violates the right toprivacy. The essence of privacy is the
"right to be let alone."[29] In the 1965 case of Griswold v. Connecticut,[30] the United States Supreme Court gave more substance
to the right of privacy when it ruled that the right has a constitutional foundation. It held that there is a right of privacy which can
be found within the penumbras of the First, Third, Fourth, Fifth and Ninth Amendments,[31] viz:

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

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

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

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

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

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

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

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

x x x.

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

x x x.

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

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

Zones of privacy are likewise recognized and protected in our laws. The Civil Code provides that "[e]very person shall
respect the dignity, personality, privacy and peace of mind of his neighbors and other persons" and punishes as actionable torts
several acts by a person of meddling and prying into the privacy of another.[35] It also holds a public officer or employee or any
private individual liable for damages for any violation of the rights and liberties of another person,[36] and recognizes the privacy of
letters and other private communications.[37] The Revised Penal Code makes a crime the violation of secrets by an officer,[38] the
revelation of trade and industrial secrets,[39] and trespass to dwelling.[40] Invasion of privacy is an offense in special laws like the
Anti-Wiretapping Law,[41] the Secrecy of Bank Deposit Act[42] and the Intellectual Property Code.[43] The Rules of Court on
privileged communication likewise recognize the privacy of certain information.[44]
Unlike the dissenters, we prescind from the premise that the right to privacy is a fundamental right
guaranteed by the Constitution, hence, it is the burden of government to show that A.O. No. 308 is justified by
some compelling state interest and that it is narrowly drawn. A.O. No. 308 is predicated on two considerations: (1) the
need to provide our citizens and foreigners with the facility to conveniently transact business with basic service and social security
providers and other government instrumentalities and (2) the need to reduce, if not totally eradicate, fraudulent transactions and
misrepresentations by persons seeking basic services. It is debatable whether these interests are compelling enough to warrant the
issuance of A.O. No. 308. But what is not arguable is the broadness, the vagueness, the overbreadth of A.O. No. 308
which if implemented will put our people's right to privacy in clear and present danger.
The heart of A.O. No. 308 lies in its Section 4 which provides for a Population Reference Number (PRN) as a "common
reference number to establish a linkage among concerned agencies" through the use of "Biometrics Technology" and "computer
application designs."
Biometry or biometrics is "the science of the application of statistical methods to biological facts; a mathematical analysis
of biological data."[45] The term "biometrics" has now evolved into a broad category of technologies which provide
precise confirmation of an individual's identity through the use of the individual's own physiological and
behavioral characteristics.[46] A physiological characteristic is a relatively stable physical characteristic such as a
fingerprint, retinal scan, hand geometry or facial features. A behavioral characteristic is influenced by the individual's
personality and includes voice print, signature and keystroke.[47] Most biometric identification systems use a card or personal
identification number (PIN) for initial identification. The biometric measurement is used to verify that the individual holding the
card or entering the PIN is the legitimate owner of the card or PIN.[48]
A most common form of biological encoding is finger-scanning where technology scans a fingertip and turns the unique
pattern therein into an individual number which is called a biocrypt. The biocrypt is stored in computer data banks[49] and
becomes a means of identifying an individual using a service. This technology requires one's fingertip to be scanned every time
service or access is provided.[50] Another method is the retinal scan. Retinal scan technology employs optical technology to map
the capillary pattern of the retina of the eye. This technology produces a unique print similar to a finger print.[51] Another biometric
method is known as the "artificial nose." This device chemically analyzes the unique combination of substances excreted from
the skin of people.[52] The latest on the list of biometric achievements is the thermogram. Scientists have found that by taking
pictures of a face using infra-red cameras, a unique heat distribution pattern is seen. The different densities of bone, skin, fat and
blood vessels all contribute to the individual's personal "heat signature."[53]
In the last few decades, technology has progressed at a galloping rate. Some science fictions are now science
facts. Today, biometrics is no longer limited to the use of fingerprint to identify an individual. It is a new science that
uses various technologies in encoding any and all biological characteristics of an individual for identification. It is noteworthy
that A.O. No. 308 does not state what specific biological characteristics and what particular biometrics
technology shall be used to identify people who will seek its coverage. Considering the banquet of options
available to the implementors of A.O. No. 308, the fear that it threatens the right to privacy of our people is not
groundless.
A.O. No. 308 should also raise our antennas for a further look will show that it does not state whether
encoding of data is limited to biological information alone for identification purposes. In fact, the Solicitor General
claims that the adoption of the Identification Reference System will contribute to the "generation of population data for
development planning."[54] This is an admission that the PRN will not be used solely for identification but for the generation of
other data with remote relation to the avowed purposes of A.O. No. 308. Clearly, the indefiniteness of A.O. No. 308 can give
the government the roving authority to store and retrieve information for a purpose other than the identification
of the individual through his PRN.
The potential for misuse of the data to be gathered under A.O. No. 308 cannot be underplayed as the
dissenters do. Pursuant to said administrative order, an individual must present his PRN everytime he deals with a government
agency to avail of basic services and security. His transactions with the government agency will necessarily be recorded-- whether it
be in the computer or in the documentary file of the agency. The individual's file may include his transactions for loan availments,
income tax returns, statement of assets and liabilities, reimbursements for medication, hospitalization, etc.The more frequent
the use of the PRN, the better the chance of building a huge and formidable information base through the
electronic linkage of the files.[55] The data may be gathered for gainful and useful government purposes; but the
existence of this vast reservoir of personal information constitutes a covert invitation to misuse, a temptation
that may be too great for some of our authorities to resist.[56]
We can even grant, arguendo, that the computer data file will be limited to the name, address and other basic personal
information about the individual.[57] Even that hospitable assumption will not save A.O. No. 308 from constitutional infirmity for
again said order does not tell us in clear and categorical terms how these information gathered shall be handled.
It does not provide who shall control and access the data, under what circumstances and for what purpose. These
factors are essential to safeguard the privacy and guaranty the integrity of the information. [58] Well to note, the computer linkage
gives other government agencies access to the information. Yet, there are no controls to guard against leakage of
information. When the access code of the control programs of the particular computer system is broken, an intruder, without fear
of sanction or penalty, can make use of the data for whatever purpose, or worse, manipulate the data stored within the system.[59]
It is plain and we hold that A.O. No. 308 falls short of assuring that personal information which will be gathered about our
people will only be processed for unequivocally specified purposes.[60] The lack of proper safeguards in this regard of A.O. No.
308 may interfere with the individual's liberty of abode and travel by enabling authorities to track down his movement; it may also
enable unscrupulous persons to access confidential information and circumvent the right against self-incrimination; it may pave the
way for "fishing expeditions" by government authorities and evade the right against unreasonable searches and seizures. [61] The
possibilities of abuse and misuse of the PRN, biometrics and computer technology are accentuated when we
consider that the individual lacks control over what can be read or placed on his ID, much less verify the
correctness of the data encoded.[62] They threaten the very abuses that the Bill of Rights seeks to prevent.[63]
The ability of a sophisticated data center to generate a comprehensive cradle-to-grave dossier on an individual and
transmit it over a national network is one of the most graphic threats of the computer revolution.[64] The computer is capable of
producing a comprehensive dossier on individuals out of information given at different times and for varied purposes.[65] It can
continue adding to the stored data and keeping the information up to date. Retrieval of stored data is simple. When information of a
privileged character finds its way into the computer, it can be extracted together with other data on the subject. [66]Once extracted,
the information is putty in the hands of any person. The end of privacy begins.
Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions would dismiss its danger to the right to
privacy as speculative and hypothetical. Again, we cannot countenance such a laidback posture. The Court will not be true to its role
as the ultimate guardian of the people's liberty if it would not immediately smother the sparks that endanger their rights but would
rather wait for the fire that could consume them.
We reject the argument of the Solicitor General that an individual has a reasonable expectation of privacy
with regard to the National ID and the use of biometrics technology as it stands on quicksand. The reasonableness of
a person's expectation of privacy depends on a two-part test: (1) whether by his conduct, the individual has exhibited an expectation
of privacy; and (2) whether this expectation is one that society recognizes as reasonable. [67] The factual circumstances of the case
determines the reasonableness of the expectation.[68] However, other factors, such as customs, physical surroundings and practices
of a particular activity, may serve to create or diminish this expectation. [69] The use of biometrics and computer technology in A.O.
No. 308 does not assure the individual of a reasonable expectation of privacy. [70] As technology advances, the level of reasonably
expected privacy decreases.[71] The measure of protection granted by the reasonable expectation diminishes as relevant technology
becomes more widely accepted.[72] The security of the computer data file depends not only on the physical inaccessibility of the file
but also on the advances in hardware and software computer technology. A.O. No. 308 is so widely drawn that a minimum
standard for a reasonable expectation of privacy, regardless of technology used, cannot be inferred from its
provisions.
The rules and regulations to be drawn by the IACC cannot remedy this fatal defect. Rules and regulations merely
implement the policy of the law or order. On its face, A.O. No. 308 gives the IACC virtually unfettered discretion to determine the
metes and bounds of the ID System.
Nor do our present laws provide adequate safeguards for a reasonable expectation of privacy. Commonwealth
Act No. 591 penalizes the disclosure by any person of data furnished by the individual to the NSO with imprisonment and
fine.[73] Republic Act No. 1161 prohibits public disclosure of SSS employment records and reports. [74] These laws, however, apply to
records and data with the NSO and the SSS. It is not clear whether they may be applied to data with the other government agencies
forming part of the National ID System. The need to clarify the penal aspect of A.O. No. 308 is another reason why its enactment
should be given to Congress.
Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right of privacy by using the rational
relationship test.[75] He stressed that the purposes of A.O. No. 308 are: (1) to streamline and speed
up the implementation of basic government services, (2) eradicate fraud by avoiding duplication of services, and (3) generate
population data for development planning. He concludes that these purposes justify the incursions into the right to privacy for the
means are rationally related to the end.[76]
We are not impressed by the argument. In Morfe v. Mutuc,[77] we upheld the constitutionality of R.A. 3019, the Anti-Graft
and Corrupt Practices Act, as a valid police power measure. We declared that the law, in compelling a public officer to make an
annual report disclosing his assets and liabilities, his sources of income and expenses, did not infringe on the individual's right to
privacy. The law was enacted to promote morality in public administration by curtailing and minimizing the opportunities for
official corruption and maintaining a standard of honesty in the public service.[78]
The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a statute, not an administrative
order. Secondly, R.A. 3019 itself is sufficiently detailed. The law is clear on what practices were prohibited and penalized, and it was
narrowly drawn to avoid abuses. In the case at bar, A.O. No. 308 may have been impelled by a worthy purpose, but, it cannot pass
constitutional scrutiny for it is not narrowly drawn. And we now hold that when the integrity of a fundamental right is at
stake, this court will give the challenged law, administrative order, rule or regulation a stricter scrutiny. It will
not do for the authorities to invoke the presumption of regularity in the performance of official duties. Nor is
it enough for the authorities to prove that their act is not irrational for a basic right can be diminished, if not
defeated, even when the government does not act irrationally. They must satisfactorily show the presence of
compelling state interests and that the law, rule, or regulation is narrowly drawn to preclude abuses. This approach
is demanded by the 1987 Constitution whose entire matrix is designed to protect human rights and to prevent authoritarianism. In
case of doubt, the least we can do is to lean towards the stance that will not put in danger the rights protected by the Constitution.
The case of Whalen v. Roe[79] cited by the Solicitor General is also off-line. In Whalen, the United States Supreme Court
was presented with the question of whether the State of New York could keep a centralized computer record of the names and
addresses of all persons who obtained certain drugs pursuant to a doctor's prescription. The New York State Controlled Substances
Act of 1972 required physicians to identify patients obtaining prescription drugs enumerated in the statute, i.e., drugs with a
recognized medical use but with a potential for abuse, so that the names and addresses of the patients can be recorded in a
centralized computer file of the State Department of Health. The plaintiffs, who were patients and doctors, claimed that some
people might decline necessary medication because of their fear that the computerized data may be readily available and open to
public disclosure; and that once disclosed, it may stigmatize them as drug addicts.[80] The plaintiffs alleged that the statute invaded
a constitutionally protected zone of privacy, i.e, the individual interest in avoiding disclosure of personal matters, and the interest in
independence in making certain kinds of important decisions. The U.S. Supreme Court held that while an individual's interest in
avoiding disclosure of personal matters is an aspect of the right to privacy, the statute did not pose a grievous threat to establish a
constitutional violation. The Court found that the statute was necessary to aid in the enforcement of laws designed to minimize the
misuse of dangerous drugs. The patient-identification requirement was a product of an orderly and rational
legislative decision made upon recommendation by a specially appointed commission which held extensive
hearings on the matter. Moreover, the statute was narrowly drawn and contained numerous safeguards against
indiscriminate disclosure. The statute laid down the procedure and requirements for the gathering, storage and retrieval of the
information. It enumerated who were authorized to access the data. It also prohibited public disclosure of the data by imposing
penalties for its violation. In view of these safeguards, the infringement of the patients' right to privacy was justified by a valid
exercise of police power. As we discussed above, A.O. No. 308 lacks these vital safeguards.
Even while we strike down A.O. No. 308, we spell out in neon that the Court is not per se against the use of
computers to accumulate, store, process, retrieve and transmit data to improve our bureaucracy. Computers work
wonders to achieve the efficiency which both government and private industry seek. Many information systems in different
countries make use of the computer to facilitate important social objectives, such as better law enforcement, faster delivery of public
services, more efficient management of credit and insurance programs, improvement of telecommunications and streamlining of
financial activities.[81] Used wisely, data stored in the computer could help good administration by making accurate and
comprehensive information for those who have to frame policy and make key decisions. [82] The benefits of the computer
has revolutionized information technology. It developed the internet,[83] introduced the concept of cyberspace[84] and the
information superhighway where the individual, armed only with his personal computer, may surf and search all kinds and classes
of information from libraries and databases connected to the net.
In no uncertain terms, we also underscore that the right to privacy does not bar all incursions into
individual privacy. The right is not intended to stifle scientific and technological advancements that enhance
public service and the common good. It merely requires that the law be narrowly focused[85] and a compelling interest justify
such intrusions.[86] Intrusions into the right must be accompanied by proper safeguards and well-defined standards to prevent
unconstitutional invasions. We reiterate that any law or order that invades individual privacy will be subjected by this Court to strict
scrutiny. The reason for this stance was laid down in Morfe v. Mutuc, to wit:

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

IV
The right to privacy is one of the most threatened rights of man living in a mass society. The threats emanate
from various sources-- governments, journalists, employers, social scientists, etc.[88] In the case at bar, the threat comes from the
executive branch of government which by issuing A.O. No. 308 pressures the people to surrender their privacy by giving
information about themselves on the pretext that it will facilitate delivery of basic services. Given the record-keeping power of
the computer, only the indifferent will fail to perceive the danger that A.O. No. 308 gives the government the
power to compile a devastating dossier against unsuspecting citizens. It is timely to take note of the well-worded
warning of Kalvin, Jr., "the disturbing result could be that everyone will live burdened by an unerasable record of his past and his
limitations. In a way, the threat is that because of its record-keeping, the society will have lost its benign capacity to
forget."[89] Oblivious to this counsel, the dissents still say we should not be too quick in labelling the right to privacy as a
fundamental right. We close with the statement that the right to privacy was not engraved in our Constitution for flattery.
IN VIEW WHEREOF, the petition is granted and Administrative Order No. 308 entitled "Adoption of a National
Computerized Identification Reference System" declared null and void for being unconstitutional.
SO ORDERED.
G.R. No. 76759 March 22, 1990

RAMON A. GONZALES, petitioner,


vs.
LAND BANK OF THE PHILIPPINES and COURT OF APPEALS, respondents.

Ramon A. Gonzales for and in his own behalf.

Manuel P. Tiaoqui and Florencio S. Jimenez for respondent Land Bank of the Philippines.

FERNAN, C.J.:

This petition for review on certiorari seeks to reverse and set aside the December 2, 1986 decision of the Court of Appeals, reversing
the decision of the trial court and in effect denying the direct issuance of Land Bank bonds in the name of herein petitioner as
assignee thereof.

On the strength of a Deed of Assignment executed on August 8, 1981 by Ramos Plantation Company, Inc. (hereafter referred to as
the corporation) through its president, Antonio Vic Zulueta, assigning its rights under Land Transfer Claim No. 82-757 unto
petitioner Ramon A. Gonzales, the latter filed an action before the Regional Trial Court of Manila, Branch LI entitled "Ramon A.
Gonzales, plaintiff vs. Land Bank of the Philippines and Ramos Plantation Company, Inc., defendants" docketed as Civil Case No.
84-24461 to compel public respondent Land Bank of the Philippines to issue Land Bank Bonds for the amount of P400,000.00 in
the name of petitioner instead of in the name of the aforesaid corporation as the original and registered owner of the property
covered by Transfer Certificate of Title No. T-28750 situated in La Suerte, Malang, North Cotabato with a total area of 251.4300
hectares, which had been brought under the land transfer program of the government.

Defendant corporation was declared in default for failure to file its answer within the reglementary period while defendant Land
Bank filed an answer alleging that the complaint states no cause of action since there is no privity of contract between plaintiff and
itself and that it deals only with the landowner whose land was subjected to operation land transfer of the government under
Presidential Decree No. 27 in order to save time and effort in ascertaining the identities of additional claimants.

At the pre-trial, the parties submitted a Stipulation of Facts dated July 29, 1985 (subsequently supplemented on September 10,
1985) praying that judgment be rendered on the basis thereof. In the aforesaid stipulation dated July 29, 1985, the following
admissions and submissions were made: the execution of the Deed of Assignment; the fact that the corporation's president, Antonio
Vic Zulueta, wrote defendant bank requesting the latter to issue the payment for the real property covered by TCT No. T-28755
through Land Bank Bonds amounting to P400,000.00 in the name of petitioner by virtue of the Deed of Assignment with the Board
Resolution attached to said letter; that on June 30, 1982, defendant bank through its manager, Mr. Ceferino A. Pacio of the Land
Transfer Operation Department, wrote back informing the Ramos Plantation, Inc. that it has approved its Land Transfer Claim No.
82-757 in the aggregate amount of P565,717.50 payment of which is subject to the submission and/or accomplishment of the
requirements of defendant bank; that said corporation failed to comply with nine (9) of the requirements of defendant bank as
contained in Annexes "C-1" and "C-2". 1

On the other hand, the aforesaid Supplemental Stipulation of Facts dated September 10, 1985 provided that out of the 9
requirements for the first release in Annex "C-1" of the stipulation of facts dated July 29, 1984, only 6 requirements have not been
complied with. 2

In a decision dated October 15, 1985, 3 the lower court found the plaintiff entitled to the issuance of the Land Bank bonds, stating
thus:

WHEREFORE, defendant Land Bank of the Philippines is hereby ordered to issue in the name of Ramon A.
Gonzales P400,000.00 worth of land bank bonds deducted from the P509,000.00 Land Bank bonds payable to
Ramos Plantation Company, Inc. under claim No. 82-757 with the directive to the defendant landowner Ramos
Plantation Company, Inc. to comply with the six (6) requirements listed in paragraph 1 of the Supplemental
Stipulation of Facts dated September 10, 1985. No pronouncement as to costs. 4

Defendant-appellant Land Bank of the Philippines filed an appeal before respondent Court of Appeals resulting in the reversal of
the trial court's decision and the dismissal of the complaint filed therein on the ground that even if there was compliance with the
remaining six (6) requirements by defendant Ramos Plantation, Inc. still, the Land Bank bonds will have to be issued in the name of
the said corporation and not to plaintiff-appellee. It is only thereafter that Ramos Plantation Co., Inc. may indorse the same to
plaintiff. 5

Petitioner now comes to us on appeal by certiorari to set aside the decision of respondent appellate court with these arguments:
that respondent Court of Appeals acted without jurisdiction in resolving the appeal inspite of the motion to certify this case to the
Supreme Court; that respondent Court of Appeals palpably erred in finding that the Deed of Assignment is not effective to authorize
LBP to issue the Land Bank Bonds in the name of petitioner; that respondent Court of Appeals palpably erred in holding that
petitioner is not entitled to P400,000.00 worth of Land Bank Bonds upon compliance with the remaining six (6) requirements for
the first release thereof.

We reduce the issues to two: whether the appellate court had jurisdiction to entertain the appeal of respondent Land Bank; and
whether respondent Land Bank can be compelled to issue Land Bank bonds in the name of petitioner by virtue of the Deed of
Assignment executed by the landowner-assignor Ramos Plantation Company, Inc. in favor of petitioner.

On the issue of lack of jurisdiction, petitioner vigorously asserts that since the trial court rendered judgment on the basis of the
stipulation of facts submitted by the parties, the appeal from such a decision can only raise questions of law and therefore,
respondent Land Bank should have gone directly to the Supreme Court on a petition for certiorari.

We do not fully subscribe to petitioner's contention, for as correctly observed by the Solicitor General, the existence of a stipulation
of facts between the parties does not automatically mean that the parties agreed on all the facts considering that stipulations may be
total or partial. 6 In this instance, it was merely partial.

A perusal of the aforementioned Stipulation and Supplemental Stipulation of Facts dated July 29, 1985 and September 10, 1985,
respectively, readily reveals that the same do not contain a complete or sufficient picture of the circumstances among the parties
and that certain vital matters are left out in said stipulations, i.e., the significant policy of the Land Bank to issue its bonds directly
and only in the name of the landowners; and the fact that there are different stages in the release of payments under the operation
land transfer program with each stage having different requirements that have to be complied with by the landowner in order to be
entitled to payment under a land transfer claim. In view of these omissions in the Stipulations, the remedy of appeal before the
appellate court resorted to by respondent bank and assailed by petitioner is proper because it involved not only pure questions of
law but mixed questions of law and fact.

On the more substantive issue of whether public respondent Land Bank may be compelled to honor the subject deed of assignment,
it will be noted that respondent bank in denying the issuance of the bond in the name of the petitioner-assignee was guided by
Resolution No. 75-68 entitled "PROPER PARTIES TO RECEIVE LAND TRANSFER PAYMENT" promulgated purposely to govern,
among others, the issuance of Land Bank Bonds to assignees by virtue of Deeds of Assignment.

Thereunder the Land Bank can only issue bonds in the name of the assignor-landowner. It is only after the issuance of bonds in the
landowner's name that he shall be required to make the necessary indorsement of the bonds to his assignee. This is in consonance
with the Land Bank's policy to deal primarily with the landowners in order to save time and effort in ascertaining the identities of
claimants. 7

However, petitioner relying on the provisions of Article 1311 of the Civil Code, 8 maintains that by virtue of said deed, he stepped
into the shoes of his assignor and acquired all the rights of the latter and it was error on the part of the appellate court to find that
the aforesaid Deed of Assignment is not effective to authorize the Land Bank of the Philippines to issue the Land Bank Bonds in the
name of petitioner upon compliance with the remaining six (6) requirements for the first release thereof.

There is indeed no question that petitioner stepped into the shoes of his assignor, the defendant corporation. But petitioner
overlooked the fact that when the corporation assigned its rights to him under Land Transfer Claim No. 82-757, the same was
subject to the rules and restrictions imposed by respondent Land Bank on the matter of assignment of rights.

In the promulgation of said rules and regulations, the Land Bank relied on the provisions of Section 76, R.A. 3844 as amended by
P.D. 251, which specifically provides:

Sec. 76. Issuance of Bonds. . . . The Board of Directors shall have the power to prescribe rules and regulations for
the issuance, reissuance, servicing, placement and redemption of the bonds herein authorized to be issued as well
as the registration of such bonds at the request of the holders thereof.

The act of assignment could not operate to erase liens or restrictions burdening the right assigned. The assignee cannot, after all,
acquire a greater right than that pertaining to the assignor. 9

Thus, when Ramos Plantation Company, Inc. assigned its lights, title and interest in Land Transfer Claim No. 82-757 for the
amount of P400,000.00 in favor of petitioner Ramon A. Gonzales, the latter acquired the same subject to the restrictions on
assignment of rights embodied in Resolution No. 75-68 dated February 25, 1975 10 passed by the Board of respondent Land Bank of
the Philippines, the pertinent provision of which reads:

4. In Assignment of Rights entered into by landowners vesting upon the Assignee the right to receive full or
partial payment from the Land Bank pursuant to land transfer, the same, if found valid in form and substance,
shall be recognized by the Land Bank. Whenever practicable, Land Bank bonds issued therefor must be made
payable to the Assignor-Landowner who shall be required to make the necessary indorsement of said bonds to the
Assignee. In case the cash portion is the one assigned, the check in payment thereof shall be issued to the original
landowner who shall be required to make the indorsement to the Assignee. Thus, for record purposes, it will
appear that payment was directly to the landowner concerned and who, by reason of the Assignment, has caused
the necessary indorsement of the bonds and/or check, as the case may be, to the Assignee.

It is an elementary rule in administrative law that administrative regulations and policies enacted by administrative bodies to
interpret the law which they are entrusted to enforce have the force of law and entitled to great respect. They have in their favor a
presumption of legality. 11
This Court is in total agreement with respondent appellate court's finding that it must be the Ramos Plantation Company, Inc.
which should comply with all the requirements imposed by respondent bank to effect the release of payments under land transfer
claims because of the restriction that the bonds will only be released in the name of the landowner-assignor corporation which may
thereafter indorse the same to petitioner. In fact, in the decision of the trial court, Ramos Plantation Company, Inc. was directed to
comply with the six (6) requirements 12 listed in paragraph 1 of the Supplemental Stipulation of Facts dated September 10, 1985.
Since no appeal was taken by Ramos Plantation Company, Inc. from said decision, said directive has become final and executory.

However, the decision of the appellate court dismissing the complaint of petitioner had the effect of reversing said directive, thereby
leaving petitioner without legal authority to compel Ramos Plantation Company, Inc. to comply with the requirements of the Land
Bank for the release of the bonds and thereafter to endorse the same to petitioner as assignee thereof. The decision of the appellate
court should therefore be, as it is hereby, modified accordingly.

WHEREFORE, the decision of the appellate court is hereby MODIFIED. The directive to Ramos Plantation Company, Inc.
contained in the lower court's decision is reinstated. Ramos Plantation Company, Inc. is ordered to comply within thirty (30) days
from notice with the six (6) requirements listed in paragraph 1 of the Supplemental Stipulation of Facts dated September 10, 1985,
and as soon as the bonds are released in its name, to immediately endorse the same to petitioner as assignee thereof.

SO ORDERED.

[G.R. No. 103533. December 15, 1998]

MANILA JOCKEY CLUB, INC. AND PHILIPPINE RACING CLUB , INC., petitioners, vs. THE COURT OF APPEALS
AND PHILIPPINE RACING COMMISSION, respondents.

DECISION
QUISUMBING, J.:

This is a Petition for Review on Certiorari seeking the reversal of the decision[1] of the Court of Appeals in CA-G.R. SP No.
25251 dated September 17, 1991 and the resolution[2] dated January 8, 1992, which denied the motion for reconsideration. At issue
here is the control and disposition of breakages[3] in connection with the conduct of horse-racing.
The pertinent facts on record are as follows:
On June 18, 1948, Congress approved Republic Act No. 309, entitled An Act to Regulate Horse-Racing in the Philippines. This
Act consolidated all existing laws and amended inconsistent provisions relative to horse racing. It provided for the distribution of
gross receipts from the sale of betting tickets, but is silent on the allocation of so-called breakages. Thus the practice, according to
the petitioners, was to use the breakages for the anti-bookies drive and other sales promotions activities of the horse racing clubs.
On October 23, 1992, petitioners, Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club, Inc. (PRCI), were granted
franchises to operate and maintain race tracks for horse racing in the City of Manila and the Province of Rizal by virtue of Republic
Act Nos. 6631 and 6632, respectively, and allowed to hold horse races, with bets, on the following dates:

x x x Saturdays, Sundays and official holidays of the year, excluding Thursdays and Fridays of the Holy Week, June twelfth,
commonly known as Independence Day, Election Day and December thirtieth, commonly known as Rizal Day.

(Sec. 5 of R.A. 6631)

x x x Saturdays, Sundays, and official holidays of the year, except on those official holidays where the law expressly provides that no
horse races are to be held. The grantee may also conduct races on the eve of any public holiday to start not earlier than five-thirty
(5:30) oclock in the afternoon but not to exceed five days a year.

(Sec. 7 of R.A. 6632)

Said laws carried provisions on the allocation of breakages to beneficiaries as follows:

Franchise Laws

R. A. 6631[4] R. A. 6632[5]

(for MJCI) (for PRCI)

Provincial or city hospitals 25%


Rehabilitation of drug addicts 25% 50%

For the benefit of Philippine

Amateur Athletes Federation 50% 25%

Charitable institutions 25%

On March 20, 1974, Presidential Decree No. 420 was issued creating the Philippine Racing Commission (PHILRACOM),
giving it exclusive jurisdiction and control over every aspect of the conduct of horse racing, including the framing and scheduling of
races.[6] By virtue of this power, the PHILRACOM authorized the holding of races on Wednesdays starting on December 22, 1976.[7]
In connection with the new schedule of races, petitioners made a joint query regarding the ownership of breakages
accumulated during Wednesday races. In response to the query, PHILRACOM rendered its opinion in a letter dated September 20,
1978. It declared that the breakages belonged to the racing clubs concerned, to wit:

We find no further need to dissect the provisions of P.D. 420 to come to a legal conclusion. As can be clearly seen from the
foregoing discussion and based on the established precedents, there can be no doubt that the breakage of Wednesday races shall
belong to the racing club concerned.[8]

Consequently, the petitioners allocated the proceeds of breakages for their own business purpose.
Thereafter, PHILRACOM authorized the holding of races on Thursdays from November 15, 1984 to December 31, 1984, and
on Tuesdays since January 15, 1985 up to the present. These mid-week races are in addition to those days specifically mentioned in
R.A. 6631 and R.A. 6632. Likewise, petitioners allocated the breakages from these races for their own uses.
On December 16, 1986 President Corazon Aquino amended certain provisions Sec. 4 of R.A. 6631 and Sec. 6 of R.A. 6632
through Executive Orders No. 88 and 89. Under these Executive Orders, breakages were allocated to beneficiaries, as follows:

Franchise Laws

E. O. 89[9] E.O. 88[10]

(for MJCI) (for PRCI)

Provincial or city hospitals 25%

Rehabilitation of drug addicts 25% 50%

For the benefit of Philippine

Racing Commission 50% 25%

Charitable institutions 25%

On April 23, 1987, PHILRACOM itself addressed a query to the Office of the President asking which agency is entitled to
dispose of the proceeds of the breakages derived from the Tuesday and Wednesday races.
In a letter dated May 21, 1987, the Office of the President, through then Deputy Executive Secretary Catalino Macaraig, Jr.,
replied that the disposition of the breakages rightfully belongs to PHILRACOM, not only those derived from the Saturday, Sunday
and holiday races, but also from the Tuesday and Wednesday races in accordance with the distribution scheme prescribed in said
Executive Orders.[11]
Controversy arose when herein respondent PHILRACOM, sent a series of demand letters to petitioners MJCI and PRCI,
requesting its share in the breakages of mid-week-races and proof of remittances to other legal beneficiaries as provided under
the franchise laws. On June 8, 1987, PHILRACOM sent a letter of demand to petitioners MJCI and PRCI asking them to remit
PHILRACOMs share in the breakages derived from the Tuesday, Wednesday and Thursday races in this wise:
xxxxxxxxx

Pursuant to Board Resolution dated December 21, 1986, and Executive Order Nos. 88 and 89 series of 1986, and the authority given
by the Office of the President dated May 21, 1987, please remit to the Commission the following:

1) PHILRACOMs share in the breakages derived from Wednesday racing for the period starting December 22, 1976 up to the
December 31, 1986.

2) PHILRACOMs share in the breakages derived from Thursday racing for the period starting November 15, 1984 up to December
31, 1984; and
3) PHILRACOMS share in the breakages derived from Tuesday racing for the period starting January 15, 1985 up to December,
1986.

4) Kindly furnish the Commission with the breakdown of all breakages derived from Tuesdays, Thursdays and Wednesdays racing
that you have remitted to the legal beneficiaries.[12]

On June 16, 1987, petitioners MJCI and PRCI sought reconsideration[13] of the May 21, 1987 opinion of then Deputy Executive
Secretary Macaraig, but the same was denied by the Office of the President in its letter dated April 11, 1988.[14]
On April 25, 1988, PHILRACOM wrote another letter[15] to the petitioners MJCI and RCI seeking the remittance of its share in
the breakages. Again, on June 13, 1990, PHILRACOM reiterated its previous demand embodied in its letter of April 25, 1988.[16]
Petitioners ignored said demand. Instead, they filed a Petition for Declaratory Relief before the Regional Trial Court, Branch
150 of Makati, on the ground that there is a conflict between the previous opinion of PHILRACOM dated September 20, 1978 and
the present position of PHILRACOM, as declared and affirmed by the Office of the President in its letters dated May 21, 1987 and
April 11, 1988. Petitioners averred that there was an actual controversy between the parties, which should be resolved.
On March 11, 1991, the trial court rendered judgment, disposing as follows:

WHEREFORE, and in view of all the foregoing considerations, the Court hereby declares and decides as follows:

a) Executive Orders Nos. 88 and 89 do not and cannot cover the disposition and allocation of mid-week races, particularly those
authorized to be held during Tuesdays, Wednesdays and those which are not authorized under Republic Acts 6631 and 6632; and

b) The ownership by the Manila Jockey Club, Inc. and the Philippine Racing Club, Inc. of the breakages they derive from mid-week
races shall not be disturbed, with the reminder that the breakages should be strictly and wholly utilized for the purpose for which
ownership thereof has been vested upon said racing entities.

SO ORDERED.[17]

Dissatisfied, respondent PHILRACOM filed a Petition for Certiorari with prayer for the issuance of a writ of preliminary
injunction before this Court, raising the lone question of whether or not E. O. Nos. 88 and 89 cover breakages derived from the
mid-week races. However, we referred the case to the Court of Appeals, which eventually reversed the decision of the trial court,
and ruled as follows:
xxxxxxxxx

The decision on the part of PHILRACOM to authorize additional racing days had the effect of widening the scope of Section 5 of RA
6631 and Section 7 of RA 6632. Consequently, private respondents derive their privilege to hold races on the designated days not
only from their franchise acts but also from the order issued by the PHILRACOM. No provision of law became inconsistent with the
passage of the Order granting additional racing days. Neither was there a special provision set to govern those mid-week races. The
reason is simple. There was no need for any new provisions because there are enough general provisions to cover them. The
provisions on the disposition and allocation of breakages being general in character apply to breakages derived on any racing
day.[18]

xxxxxxxxx

WHEREFORE, based on the foregoing analysis and interpretation of the laws in question, the judgment of the trial court is hereby
SET ASIDE. Decision is hereby rendered:

1. declaring Section 4 of RA 6631 as amended by E.O. 89 and Section 6 of RA 6632 as amended by E.O. 88 to cover the disposition
and allocation of breakages derived on all races conducted by private respondents on any racing day, whether as provided for under
Section 4 of RA 6631 or Section 6 of RA 6632 or as ordered by PHILRACOM in the exercise of its powers under P.D. 420;

2. ordering private respondents to remit to PHILRACOM its share under E.O. 88 and E.O. 89 derived from races held on Tuesdays,
Wednesdays, Thursdays as authorized by PHILRACOM.

SO ORDERED.[19]

Petitioners filed a motion for reconsideration, but it was denied for lack of merit, with respondent Court of Appeals further
declaring that:

xxxxxxxxx

In so far as the prospective application of Executive Orders Nos. 88 and 89 is concerned, We have no disagreement with the
respondents. Since PHILRACOM became the beneficiary of the breakages only upon effectivity of Executive Order Nos. 88 and 89,
it is therefore entitled to such breakages from December 16, 1986 when said Executive Orders were issued. However, we do not
concede that respondents are entitled to breakages prior to December 16, 1986 because it is clear that the applicable laws from 1976
to December 16, 1986 were R.A. 6631 and R.A. 6632, which specifically apportion the breakages to specified beneficiaries among
which was the PAAF, a government agency. Since respondents admit that PHILRACOM (Petitioner) was merely placed in lieu of
PAAF as beneficiary/recipient of breakages, then whatever breakages was due to PAAF as one of the beneficiaries under R.A. Nos.
6631 and 6632 accrued to or should belong to PHILRACOM as successor to the defunct PAAF.

Finding the Motion for Reconsideration without merit, and for reasons indicated, the Motion is denied.

SO ORDERED.[20]

Consequent to the aforequoted adverse decision, petitioners MJCI and PRCI filed this petition for review under Rule 45.
The main issue brought by the parties for the Courts resolution is: Who are the rightful beneficiaries of the breakages derived
from mid-week races? This issue also carries an ancillary question: assuming PHILRACOM is entitled to the mid-week breakages
under the law, should the petitioners remit the money from the time the mid-week races started, or only upon the promulgation of
E.O. Nos. 88 and 89?
Petitioners assert that franchise laws should be construed to apply the distribution scheme specifically and exclusively to the
racing days enumerated in Sec. 5 of R.A. 6631, and Sec. 7 of R.A. 6632. They claim that disposition of breakages under these laws
should be limited to races conducted on all Saturdays, Sundays, and official holidays of the year, except, on those official holidays
where the law expressly provides that no horse races are to be held, hence, there is no doubt that the breakages of Wednesday races
shall belong to the racing clubs concerned.[21] They even advance the view that where a statute by its terms is expressly limited to
certain matters, it may not by interpretation or construction be extended to other matters.[22]
However, respondent PHILRACOM contends that R.A. Nos. 6631 and 6632 are laws intended primarily to grant petitioners
their respective franchises to construct, operate, and maintain a race track for horse racing.[23] When PHILRACOM added mid-week
races, the franchises given to the petitioners remained the same. Logically, what applies to races authorized under Republic Act
Nos. 6631 and 6632 should also apply to races additionally authorized by PHILRACOM, namely mid-week races, because these are
general provisions which apply general rules and procedures governing the operation of the races. Consequently, if the authorized
racing days are extended, these races must therefore be governed by the same rules and provisions generally provided therein.
We find petitioners position on the main issue lacking in merit and far from persuasive.
Franchise laws are privileges[24] conferred by the government on corporations to do that which does not belong to the citizens
of the country generally by common right.[25] As a rule, a franchise springs from contracts between the sovereign power and the
private corporation for purposes of individual advantage as well as public benefit. [26] Thus, a franchise partakes of a double nature
and character.[27] In so far as it affects or concerns the public, it is public juris and subject to governmental control.[28] The
legislature may prescribe the conditions and terms upon which it may be held, and the duty of grantee to the public exercising it.[29]
As grantees of a franchise, petitioners derive their existence from the same. Petitioners operations are governed by all existing
rules relative to horse racing provided they are not inconsistent with each other and could be reasonably harmonized. Therefore, the
applicable laws are R.A. 309, as amended, R.A. 6631 and 6632, as amended by E.O. 88 and 89, P.D. 420 and the orders issued by
PHILRACOM. Consequently, every statute should be construed in such a way that will harmonize it with existing laws. This
principle is expressed in the legal maxim interpretare et concordare leges legibus est optimus interpretandi, that is, to interpret
and to do it in such a way as to harmonize laws with laws is the best method of interpretation.[30]
A reasonable reading of the horse racing laws favors the determination that the entities enumerated in the distribution scheme
provided under R.A. Nos. 6631 and 6632, as amended by Executive Orders 88 and 89, are the rightful beneficiaries of breakages
from mid-week races. Petitioners should therefore remit the proceeds of breakages to those benefactors designated by the aforesaid
laws.
The holding of horse races on Wednesdays is in addition to the existing schedule of races authorized by law. Since this new
schedule became part of R.A. 6631 and 6632 the set of procedures in the franchise laws applicable to the conduct of horse racing
business must likewise be applicable to Wednesday or other mid-week races. A fortiori, the granting of the mid-week races does not
require another legislative act to reiterate the manner of allocating the proceeds of betting tickets. Neither does the allocation of
breakages under the same provision need to be isolated to construe another distribution scheme. No law can be viewed in a
condition of isolation or as the beginning of a new legal system. [31] A supplemental law becomes an addition to the existing statutes,
or a section thereof; and its effect is not to change in any way the provisions of the latter but merely to extend the operation thereof,
or give additional power to enforce its provisions, as the case may be. In enacting a particular statute, legislators are presumed to
have full knowledge and to have taken full cognizance of the existing laws on the same subject or those relating thereto.
Proceeding to the subsidiary issue, the period for the remittance of breakages to the beneficiaries should have commenced
from the time PHILRACOM authorized the holding of mid-week races because R.A. Nos. 6631 and 6632 were already in effect
then. The petitioners contend that they cannot be held retroactively liable to respondent PHILRACOM for breakages prior to the
effectivity of E.O. Nos. 88 and 89. They assert that the real intent behind E.O. Nos. 88 and 89 was to favor the respondent
PHILRACOM anew with the benefits which formerly had accrued in favor of Philippine Amateur Athletic Federation (PAAF). They
opine that since laws operate prospectively unless the legislator intends to give them retroactive effect, the accrual of these
breakages should start on December 16, 1986, the date of effectivity of E.O. Nos. 88 and 89. [32] Now, even if one of the benefactors
of breakages, the PAAF, as provided by R.A. 6631 and 6632 had ceased operation, it is still not proper for the petitioners to presume
that they were entitled to PAAFs share. When the petitioners mistakenly appropriated the breakages for themselves, they became
the implied trustees for those legally entitled to the proceeds. This is in consonance with Article 1456 of the Civil Code, which
provides that:

Art. 1456If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property comes.

The petitioners should have properly set aside the amount for the defunct PAAF, until an alternative beneficiary was designated,
which as subsequently provided for by Executive Order Nos. 88 and 89, is PHILRACOM:
xxxxxxxxx

Secs. 2 - All the cash balances and accumulated amounts corresponding to the share of the Philippine Amateur Athletic
Federation/Ministry of Youth and Sports Development, pursuant to Section 6 of Republic Act No. 6632, not remitted by the
Philippine Racing Club, Inc./Manila Jockey Club Inc., are hereby transferred to the Philippine Racing Commission to be constituted
into a TRUST FUND to be used exclusively for the payment of additional prizes for races sponsored by the Commission and for
necessary capital outlays and other expenses relative to horse-breeding activities of the National Stud Farm. x x x x x x [E.O. No. 88]

xxxxxxxxx

Sec. 2. Any provision of law to the contrary notwithstanding, all cash balances and accumulated amounts corresponding to the
share of the Philippine Amateur Athletic Federation/Ministry of Youth and Sports Development, pursuant to Republic Act No.
6631, not remitted by the Manila Jockey Club, Inc., are hereby constituted into a TRUST FUND to be used exclusively for the
payment of additional prizes for races sponsored by the Philippine Racing Commission and for the necessary capital outlays and
other expenses relative to horse-breeding activities of the National Stud Farm. x x x x x x. [E.O. No. 89]

While herein petitioners might have relied on a prior opinion issued by an administrative body, the well-entrenched principle
is that the State could not be estopped by a mistake committed by its officials or agents.[33] Well-settled also is the rule that the
erroneous application of the law by public officers does not prevent a subsequent correct application of the law. [34] Although there
was an initial interpretation of the law by PHILRACOM, a court of law could not be precluded from setting that interpretation aside
if later on it is shown to be inappropriate.
Moreover, the detrimental consequences of depriving the city hospitals and other institutions of the funds needed for
rehabilitation of drug dependents and other patients are all too obvious. It goes without saying that the allocation of breakages in
favor of said institutions is a policy decision in pursuance of social development goals worthy of judicial approbation.
Nor could we be oblivious to the reality that horse racing although authorized by law is still a form of gambling. Gambling is
essentially antagonistic to the aims of enhancing national productivity and self-reliance.[35] For this reason, legislative franchises
impose limitations on horse racing and betting. Petitioners contention that a gambling franchise is a public contract protected by
the Constitutional provision on non-impairment of contract could not be left unqualified. For as well said in Lim vs. Pacquing:[36]

x x x it should be remembered that a franchise is not in the strict sense a simple contract but rather it is, more importantly, a mere
privilege specially in matters which are within the governments power to regulate and even prohibit through the exercise of the
police power. Thus, a gambling franchise is always subject to the exercise of police power for the public welfare.[37]

That is why we need to stress anew that a statute which authorizes a gambling activity or business should be strictly construed,
and every reasonable doubt be resolved so as to limit rather than expand the powers and rights claimed by franchise holders under
its authority.[38]
WHEREFORE, there being no reversible error, the appealed decision and the resolution of the respondent Court of Appeals
in CA-G.R. SP No. 25251, are hereby AFFIRMED, and the instant petition is hereby DENIED for lack of merit.
Costs against petitioners.
SO ORDERED.

Public Schools
District Supervisors Association v. Hon. Edilberto de Jesus, G.R. No. 157299, June
19, 2006

DECISION

CALLEJO, SR., J.:

This is a Petition for Prohibition with prayer for temporary restraining order and/or preliminary injunction filed by the

Public Schools District Supervisor Association (PSDSA) seeking to declare as unconstitutional Rule IV, Section 4.3; Rule V, Sections

5.1 and the second paragraph of Section 5.2; and Rule VI, Section 6.2, paragraph 11 of Department of Education Order No. 1, Series

of 2003. The petition likewise seeks to compel, by way of a writ of mandamus, the Department of Education, Culture, and Sports

(DECS) and the Department of Budget and Management (DBM) to upgrade the salary grade level of the district supervisors from
Salary Grade (SG) 19 to SG 24.

The Antecedents
Ever since the Department of Education (DepEd)[1] was founded decades ago, its management had been so centralized in

the Manila office. Schools in the national, regional, and division levels merely followed and implemented the orders and

memoranda issued by the Education Secretary. Due to the evolution of the learning process and the onset of information

technology, there was a need for a radical change in the governance of the DepEd. Thus, a study on how to improve the

management of the Department was conducted, and one of the proposals was the abolition of the office of the district supervisor.

Then Senator Tessie Aquino-Oreta, the Chairman of the Committee on Education, authored Senate Bill No. 2191, the

thrust of which was to change the existing management style and focus on the schools where the teaching-learning process

occurs. The bill was intended to highlight shared governance in the different levels in the DECS hierarchy and establish authority,

accountability, and responsibility for achieving higher learning outcomes. While the governance of basic education would begin at

the national level, the field offices (regions, divisions, schools, and learning centers) would translate the policy into programs,

projects, and services to fit local needs.[2] The national level was likewise to be tasked to define the roles and responsibilities of, and

provide resources to the field offices which would implement educational programs, projects, and services in communities they

serve.[3] At the forefront would be the DepEd Secretary, vested with the overall authority and supervision over the operations of the

department on the national, regional, division, and schools district level.[4]

Republic Act No. 9155, otherwise known as the Governance of Basic Education Act 2001, became a law on August 11, 2001,

in accordance with Section 27(1), Article VI of the Constitution. Under the law, each regional office shall have a director, an

assistant director, and an office staff for program promotion and support, planning, administrative and fiscal services. [5] The

regional director was given the authority to hire, place and evaluate all employees in the regional office except for the position of

assistant director,[6] as well as the authority, accountability, and responsibility to determine the organization component of the

divisions and districts, and approve the staffing pattern of all employees therein;[7] evaluate all division superintendents and

assistant division superintendents in the region;[8] and other functions as may be assigned by the proper authorities.[9]

A division, on the other hand, is headed by a schools division superintendent with the following responsibilities, among

others: to supervise the operations of all public and private elementary, secondary, and integrated schools, and learning

centers;[10] to hire, place and evaluate all division supervisors and schools district supervisors as well as all employees in the

divisions, both teaching and non-teaching personnel, including school heads, except for the assistant division

superintendent;[11] and perform other functions as may be assigned by proper authorities.[12]

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

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

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

(8) Recommending the staffing complement of the school based on its needs;
(9) Encouraging staff development;

xxxx

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

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

Under Section 14 of the law, the DepEd Secretary is mandated to promulgate the implementing rules and regulations within ninety

(90) days after the approval of the Act, provided that the principle of shared governance shall be fully implemented within two (2)

years after such approval.

Before the DepEd could issue the appropriate implementing rules and regulations, petitioner sought the legal assistance of the

Integrated Bar of the Philippines (IBP) National Committee on Legal Aid to make representations for the resolution of the following

administrative issues:

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

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

In a Letter dated March 1, 2002 addressed to then DepEd Secretary Raul Roco, the IBP stated that, per its review of the documents

submitted by the PSDSA, it found the latters position valid and legal, to wit:

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

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

The PSDSA thus requested the DepEd Secretary to call an immediate consultation with the district supervisors nationwide through

a convention, and their valid inputs be considered in formulating the rules and regulations to be urged by the DepEd. However, the

Secretary failed to reply. Thus, the IBP reiterated the concerns raised by the PSDSA in a Letter[18] to the DepEd dated April 15,

2002.

On January 6, 2003, DepEd Secretary Edilberto C. De Jesus issued DECS Office Order No. 1, which constitutes the Implementing

Rules and Regulations (IRR) of R.A. No. 9155. Sections 4.1 to 4.3, Rule IV of the IRR provide:

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

SECTION 4.2. Authority, Accountability, and Responsibility of the Schools Division


Superintendent. Consistent with the national educational policies, plans, and standards, the schools division
superintendents shall have authority, accountability, and responsibility for the following:
1) Developing and implementing division education development plans;
2) Planning and managing the effective and efficient performance of all personnel, physical,
and fiscal resources of the division, including professional staff development;
3) Hiring, placing, and evaluating all division supervisors and schools district supervisors as
well as all employees in the division, both teaching and non-teaching personnel, including
school heads, except for the assistant division superintendents;
4) Monitoring the utilization of funds provided by the national government and the local
government units to the schools and learning centers;
5) Ensuring compliance of quality standards for basic education programs and for this purpose
strengthening the role of division supervisors as subject area specialists;
6) Promoting awareness of, and adherence by, all schools and learning centers to accreditation
standards prescribed by the Secretary of Education;
7) Supervising the operations of all public and private elementary, secondary, and integrated
schools, and learning centers; and
8) Performing such other functions as may be assigned by the Secretary and/or Regional
Director.

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

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

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

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

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

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

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

The schools district supervisor shall be specifically responsible for:

1) Providing professional and instructional advice and support to the school heads and
teachers/facilitators of schools and learning centers in the district or cluster thereof;
2) Curricula supervision; and
3) Performing such other functions as may be assigned by the Secretary, Regional Directors,
and Schools Division Superintendents where they belong.

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

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

On March 13, 2003, the PSDSA, the national organization of about 1,800 public school district supervisors of the DepEd, in behalf

of its officers and members, filed the instant petition for prohibition and mandamus, alleging that:

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


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

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

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

Petitioners maintain that the questioned provisions of the IRR are invalid because they extended or expanded and

modified the provisions of R.A. No. 9155. They argue that the said law should be read in harmony with other existing educational

laws which it did not specifically repeal, such as Batas Pambansa Blg. 232, otherwise known as The Education Act of 1982, as

amended by R.A. No. 7798; R.A. No. 4670, otherwise known as the Magna Charta for Public School Teachers; and R.A. No. 7784

captioned An Act to Strengthen Teacher Education in the Philippines by Establishing Centers of Excellence, Creating a Teacher

Education Council for the Purpose, Appropriating Funds Therefore, and for Other Purposes.

Petitioners assert that under Section 7(D) of R.A. No. 9155, the district offices of the DepEd are intended as field offices where the

district supervisors can assist the ESPs and teachers/learning facilitators within their district as experienced educational

managers. Thus, the district supervisors were not divested of the inherent administrative functions to manage and oversee the

schools within their respective districts, including their subordinates. They emphasize that the law provides an office staff for

program promotion in the school districts, which would be of no use if the office has no administrative supervision over schools

within its respective districts.

Petitioners assert that under the IRR, the schools district supervisors primarily perform staff functions and shall not exercise

administrative supervision over school principals, unless specifically authorized by the proper authorities. Thus, under the IRR,

the exercise of administrative supervision over school principals was made discretionary and subject to the whims and caprices of

the proper authorities. The logical inference of this provision, petitioners aver, is that the administrative supervisory powers can be

withdrawn from a district supervisor without any reason at all, a provision which has no basis in the enabling law.

Petitioners further contend that the DepEd has no authority to incorporate its plan of downgrading the position of district

supervisor, that is, from being an administrator of a particular district office to a position performing a staff function, to exercise
administrative supervision over the school principals only when specifically authorized by proper authorities. Petitioners insist that

respondent Education Secretary was focused on removing the level of management in the district office, such that the IRR empower

school heads (principals) to have administrative and instructional supervision of school or cluster of schools, while supervision of

all public and private elementary, secondary, and integrated schools and learning centers was given to the division office.

Petitioners further insist that respondent Education Secretary failed to consider the fact that R.A. No. 9155 strengthened the district

office as a mid-level administrative field office of the DepEd. The law even mandates to allow the district supervisor to have an

office staff for program promotion in the district office. Apart from the current administrative functions inherent in the district
office, DECS Service Manual 2000 vested additional specific functions to the district offices, to provide professional and

instructional advice and support to the school heads and teachers/facilitators of schools and learning centers in the district, as well
as curricula supervision.
Petitioners posit that R.A. No. 9155 did not, in anyway, allow or authorize the reorganization of the entire DepEd; it never reduced

the position, rank, classification, and salary grade level of district supervisors, nor abolished the district offices which are

responsible for the administration and management of elementary schools within its jurisdiction. It did not remove from the

district supervisors the function of administrative supervision over schools within their respective areas. In fact, petitioners insist,

what the law did was to give the district supervisor additional responsibility of providing professional and instructional advice and

support to the school heads and teachers/facilitators of schools and learning centers in the district or cluster thereof.

Petitioners point out that under Section 4.3, paragraph (b), Rule IV of the IRR, the schools division superintendent was given the

power to appoint the division supervisors and schools district supervisor and other employees subject to civil service laws, rules,

and regulations, and the policies and guidelines to be issued by the Secretary of Education for the purpose. On the other hand, the

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

exercise of disciplinary authority by the schools division superintendent over the non-teaching personnel shall be subject to civil

service laws, rules, and regulations, and procedures and guidelines to be issued by the Secretary of Education relative to this

matter. The regional director shall continue exercising disciplinary authority over the teaching personnel in so far as the latter are

covered by specific and exclusive disciplinary provisions under the Magna Carta for Public School Teachers (R.A. 4670).

Petitioners posit that this grant of disciplining authority to the regional director for teaching personnel who commit

violations of laws, rules, and regulations is definitely not provided for in R.A. No. 9155. The division superintendent was given the

power not only to hire and appoint the division supervisors, district supervisors, school heads, or principals as well as employees in

the division, both teaching and non-teaching positions. However, when it comes to disciplining officers and teaching personnel who

commit infractions or violations of law, rules, and regulations of the DepEd, the exercise of such disciplining authority is lodged in

the hands of the regional director. Petitioners point out that the power to hire teachers is in the hands of the division

superintendent; principles of administrative rules and procedure provide that the authority to hire and appoint carries with it the

authority to discipline and fire the hired and appointed personnel particularly if the law is silent thereon. Since the division

superintendent has the authority to hire teaching personnel within its division, he/she should also take the responsibility of

disciplining erring teachers and employees. If the set-up of placing the power of hiring and power to discipline or fire an errant

personnel is separated or divided between two offices of the DepEd, the proliferation of palakasan or bata-bata system will

flourish, to the detriment of the public education system and public service.

Petitioners also point out that under Section 7(E)(11) of R.A. No. 9155, school heads are authorized to accept gifts, donations,

bequests, and grants for the purpose of upgrading teachers/learning facilitators competencies, improving and expanding school

facilities and providing instructional materials and equipment, which, in turn, shall be reported to the appropriate district

supervisors and division superintendents. However, under Section 6.2(11), Rule VI of the IRR, on the authority, accountability, and

responsibility of school heads, district supervisors were deleted as one of the administrative officers to whom such reporting is to be

made. Petitioners conclude that to the extent that the division superintendents are not mandated to report donations and grants to

district supervisors, the IRR is void.

On their plea for mandamus, petitioners pray that the Court compel the DepEd and the DBM to upgrade their present

salary grade. They claim that the position of an ESP is already classified as SG 21, which is higher by two grades than that of district
supervisors, SG 19. Considering their higher position in the departments pecking order, vis--vis that of the ESPs, petitioners opine

that to rectify the present grade-level distortion, their salary grade should be upgraded to SG 24.[22]
For its part, the Office of the Solicitor General (OSG) avers that a perusal of Section 7(D) of R.A. No. 9155 shows that the

district supervisor has limited responsibilities, and that the power to exercise administrative supervision over the ESPs is not

covered by any of those responsibilities. The Education Secretary is the disciplining authority in the DepEd, with the regional

directors acting as the disciplining authority in their respective regions.

As to petitioners gripe that the IRR deleted district supervisors from among those school heads who should report when

[a]ccepting donations, gifts, bequests, and grants for the purpose of upgrading teachers/learning facilitators competencies,

improving and expanding school facilities, and providing instructional materials and equipment, the OSG avers that this reportorial

function is directory and merely for convenience.

Anent petitioners grievance on their alleged stagnant salary grade level, the OSG points out that the same is already provided for

under FY 2003 GAA, [thus], petitioners complaint against the non-increase of their

SG level is already moot and academic. The OSG also emphasizes that the upgrading of the ESPs salary grade over the petitioners is

not violative of petitioners right to equal protection of the law, since district supervisors and ESPs are not similarly situated.

In reply, petitioners contend that the upgrading of the salary grade level of district supervisors to SG 21 is an admission by the

DepEd and by the DBM of the validity of their demand to increase their salary grade to a respectable SG 24.

The petition is partially granted.

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

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

Administrative supervision means overseeing or the power or authority of an officer to see that their subordinate officers

perform their duties. If the latter fails or neglects to fulfill them, the former may take such action or steps as prescribed by law to
make them perform their duties.[31]
A plain reading of the law will show that the schools district supervisors have no administrative supervision over the

school heads; their responsibility is limited to those enumerated in Section 7(D) of R.A. No. 9155, to wit:

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

(2) Curricula supervision; and

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

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

The President:
Why do we not say AND SHALL NOT BE INCLUDED?

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

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

Senator Aquino-Oreta:
Yes, Mr. President.

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

Senator Cayetano:
Thank you, Mr. President.

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

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

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

The President:
What does the sponsor say?

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

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

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

Not too long ago, I was a speaker before the school supervisors all over the land. One of the points that they
complained about was, in most cases, their job to supervise school principals is now being removed or have
been removed simply because and I may be inaccurate here the Japanese government I know it is a foreign
government that funded a study of the organizational setup of the DECS has recommended the abolition of
school supervisors.
This is the reason this representation would like to ensure that the traditional function of the school supervisors,
among which is to supervise school principals, remain as such. What is good for the Japanese education is
not necessarily good for the Philippines. This representation knows that this is precisely one of the
complaints of the school supervisors.

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

The President:
What does the sponsor say?

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

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

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

The President:
What does the sponsor say?

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

Senator Aquino-Oreta:
Mr. President, what was the amendment?

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

The President:
May I suggest, THE SUPERVISION OF SCHOOL PRINCIPALS IN THE DISTRICT, because

Senator Cayetano:
Yes, Mr. President.

The President:
the antecedent for that is, The schools district supervisor shall be responsible for.

Senator Cayetano:
That is right, Mr. President. Supervision, yes.

The President:
What does the sponsor say?

Senator Aquino-Oreta:
Mr. President, may I have one minute?

SUSPENSION OF SESSION

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

The President:
Is there any objection? (Silence) There being none, the session is suspended for one minute.
It was 5:33 p.m.

RESUMPTION OF SESSION

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

The President:
The session is resumed.

SUSPENSION OF CONSIDERATION OF S. NO. 2191

Senator Tatad:
Mr. President, we are still trying to find a way out of these conflicting points of view on the role of the
supervisor. To allow the parties to have a little more time to work on this, I move that we suspend
consideration of Senate Bill No. 2191. (Underscoring supplied)[32]
When the session resumed, Senator Cayetano no longer pursued his proposed amendment, and moved instead that the
same be amended to read Curricula Supervision. The Senate approved the proposal of the Senator:

The President:
The session is resumed. Senator Cayetano is recognized.

CAYETANO AMENDMENT

Senator Cayetano:
Thank you, Mr. President.

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

The President:
That would be on what page?

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

The President:
And how will it read?

Senator Cayetano:
CURRICULA SUPERVISION.

The President:
Just that?

Senator Cayetano:
Just that, Mr. President.

Senator Tatad:
Put a semicolon (;).

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

The President:
What does the sponsor say?

Senator Aquino-Oreta:
The amendment is accepted, Mr. President. (Underscoring supplied)[33]

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

district supervisors.

It is a settled rule of statutory construction that the express mention of one person, thing, act, or consequence excludes all

others. This rule is expressed in the familiar maxim expressio unius est exclusio alterius. Where a statute, by its terms, is expressly
limited to certain matters, it may not, by interpretation or construction, be extended to others. The rule proceeds from the premise

that the legislature would not have made specified enumerations in a statute had the intention been not to restrict its meaning and

to confine its terms to those expressly mentioned.[34]

It is not surprising that Senator Aquino-Oreta maintained her position that district supervisors should not have administrative

control or even supervision over ESPs and SSPs. As early as 1990, the DECS had adopted the policy that, effective January 1, 1991,

the positions of district supervisors and division supervisors would be gradually phased out by not filling-up these positions as they

become vacant.[35] On September 17, 1991, then DECS Secretary Isidro Cario issued DECS Order No. 110, Series of 1991, declaring

that, to foster better considerations and articulation of progress in the elementary level, all elementary school principals shall report

directly to the school division superintendents. In his Order dated June 22, 1994, then DECS Secretary Armand V. Fabella declared

that DECS Order No. 110 shall remain in effect, with the recommendation that, in order to facilitate the phase-out of district

supervisor positions, incumbent district supervisors were encouraged to transfer to vacant division supervisor positions, provided

they meet the qualification standards for such positions.[36] For his part, in his DECS Order No. 22, Series of 1996, DECS Secretary

Ricardo T. Gloria restored the district supervisor positions but only on a selective basis and subject to the following guidelines:

a) Schools superintendents, with the concurrence/approval of their regional directors, may


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

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

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

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

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

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

Under DECS Order No. 36, Series of 1998 issued by DECS Secretary Erlinda C. Pefianco, the positions of district supervisors were

restored to their original status as a supervisory level in the DECS administrative hierarchy subject to the following guidelines:

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

1.1.1 The functions of a district supervisor as an instructional leader and resource


person for teachers should be emphasized.

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

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

However, as already stated, the Senate resolved to maintain the positions of district supervisors but limited their responsibilities

only to those enumerated in Section 7(D) of R.A. No. 9155 to conform to the basic thrust and objectives of the law. Far from

strengthening the office of the district supervisors as a mid-head field office of the DepEd, the law limited the authority and

responsibility attached to such position.

While it is true that the district supervisor is given a support staff for program promotion, it cannot thereby be implied that he/she

likewise has administrative supervision over ESPs and SSPs. Such a construction has no basis in law and in fact. Indeed, such a

construction of the statute defeats the very purpose of the law.

It is a basic precept that the intent of the legislature is the controlling factor in the interpretation of the statute. The

particular words, clauses, and phrases should not be studied as detached and isolated expression, but the whole and every part of

the statute must be considered in fixing the meaning of any of its parts and in order to produce a harmonious whole. [39]

Besides, Congress enumerated the duties and responsibilities of a district supervisor. Congress would not have made

specific enumerations in a statute if it had the intention not to restrict or limit its meaning and confine its terms only to those

expressly enumerated. Courts may not, in the guise of interpretation, enlarge the scope of a statute and include situations not

provided nor intended by Congress.[40]

The submission of the OSG, that the schools district supervisors have the administrative supervision over school heads, is

more in accord with the law, to wit:

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

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

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

The Court likewise declares that the last paragraph of Section 4.3 of the IRR, stating that the regional director shall continue

exercising disciplinary authority over the teaching personnel insofar as the latter are covered by specific and exclusive disciplinary
provisions under R.A. No. 4670 (Magna Carta for Public School Teachers) does not contravene R.A. No. 9155. Indeed, the IRR

merely reiterates the DECS Rules of Procedure, DECS Order No. 33, issued on March 30, 1999 by the DepEd Secretary, and R.A.
No. 4670 which was approved on June 18, 1966, and pursuant to Section 7, Chapter II, Book IV of the 1987 Administrative Code,

which provides that the DepEd Secretary is empowered to

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

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

Additionally, the IRR was issued by the DepEd Secretary pursuant to Section 7(A)(1) of R.A. No. 9155, which mandates that the

Secretary formulate national educational policies and enhance the employment status, professional competence, welfare, and

working conditions of all the DepEd personnel.[42]

We agree that R.A. No. 9155 does not provide who has disciplinary authority over the teaching personnel of the DepEd. However,

under Section 3, Chapter III of DECS Order No. 33, Series of 1999, otherwise known as the 1999 DECS Rules of Procedure, the

disciplining authority in the DECS is the DepEd Secretary, with the regional directors acting as such in their respective regions

except those appointed by the President.[43]

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

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

A division superintendent of schools is not a disciplining authority over teachers, whether under R.A. No. 4670 or under the DECS

Rules of Procedure. In fact, under Section 2, Chapter VII of such Rules of Procedure, a division superintendent is a chairperson of

the investigating committee over formal complaints filed against such teachers:

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

(1) The schools division superintendent or his or her duly authorized representative, as chairperson;
(2) The duly authorized representative of the school, district, or division teachers organization, as
member; and
(3) The division supervisor for elementary or secondary education where the respondent belongs, as
member.

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

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

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

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

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

(11) Accepting donations, gifts, bequests, and grants in accordance with existing laws and policy of the
Department for the purpose of upgrading teachers/learning facilitators competencies, improving and expanding
school facilities, and providing instructional materials and equipment. Such donations or grants must be
reported to the division superintendents. (emphasis supplied)

We agree with petitioners contention that, under the law, donations and grants must be reported to the appropriate district

supervisors and not

only to the division superintendents. The use in the law of the word must is an expression of the mandatory nature of the reporting

of donations and grants to district supervisors. The reason for the provision is that such grants and donations which are intended to

upgrade teachings/learning facilitators competencies, improve and expand school facilities, and provide instructional materials and

equipment will assist the school district supervisors in the performance of their duties and responsibilities under Section 7(D) of

R.A. No. 9155, and submit appropriate recommendations to the proper administrative officers.

On petitioners plaint of the failure of respondents to upgrade their salary grade level to at most SG 21, and for the issuance of the

writ of mandamus mandating respondents to increase their salary grade from SG 19 to 24, the same is premature.

There is no showing in the petition that, before filing their petition, petitioners sought an adjustment of level of their salary

grade from SG 19 to SG 21 before respondents or the Civil Service Commission. Section 17 of Presidential Decree No. 985, as

amended by Section 14 of R.A. No. 6758, otherwise known as the Salary Standardization Law, provides:

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

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

xxxx

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

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

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

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

SEC. 11. The Secretary of the Department of Education, subject to civil service laws and
regulations, shall issue appropriate personnel policy rules and regulations that will best meet
the requirements of the teaching profession taking into consideration the uniqueness of the
working conditions of the teaching service.
And insofar as the salary system for teaching positions is concerned, Section 14 provides:

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

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

xxxx

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

Moreover, the issue of whether or not respondents should be compelled to adjust upwards the salary grade of petitioners

to SG 21 has become moot and academic, because, on November 3, 2003, the DepEd and the DBM issued Joint Circular No. 1,

Series of 2003 containing the guidelines in the implementation of the Salary Upgrading for District and Education Supervisors, to

wit:

4.0 GUIDELINES

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

4.1.1 Upgrading of the PSDS and ES I positions from SG-19 to SG-20 in July 2003 and to SG-21
in July 2004;
4.1.2 Upgrading of the ES II positions by two (2) salary grades from SG-20 to SG-21 in July 2003
and to SG-22 in July 2004;
4.1.3 A one-step salary adjustment to incumbents of ES III positions starting July 2003 and
another one-step salary adjustment starting July 2004;
4.1.4 A one-step salary adjustment to incumbents of CES positions starting July 2003 and
another one-step salary adjustment starting July 2004.

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

5.0 SALARY RULES

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

5.1.1 Effective July 1, 2003 at the same salary step of his assigned salary grade as of June 30,
2003 (Illustrative Example A) adopting the Salary Schedule prescribed under National
Budget Circular (NBC) No. 474 (Annex B);
5.1.2 Effective July 1, 2004 at the same salary step of his assigned salary grade as of June 30,
2004 (Illustrative Example A) adopting the Salary Schedule prescribed under National
Budget Circular (NBC) No. 474 (Annex B).

5.2 The transition allowance as defined in 3.2 being received by the PSDS and ES, if any, shall be
considered as advance entitlement of the salary increase herein authorized. (Illustrative
Examples B and C)

5.3 No step adjustment shall be granted to incumbents of positions whose salary already falls at or
exceeds the maximum step (eighth step) of the salary grade allocation of their
positions. (Illustrative Example D)

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

6.0 FUNDING SOURCE

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

7.0 POST-AUDIT

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

8.0 CONTRIBUTIONS

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

9.0 SAVING CLAUSE

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

10.0 EFFECTIVITY

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

IN VIEW OF ALL THE FOREGOING, the petition for prohibition is PARTIALLY GRANTED. Joint Circular No. 1, Series of

2003 is declared valid, except Section 6.2(11), Rule VI thereof which provides that donations or grants shall be reported only to the

division superintendents. Such donations or grants must also be reported to the appropriate school district supervisors, as

mandated by Republic Act No. 9155. Petitioners prayer for the issuance of a writ of mandamus is DENIED for lack of merit. No

costs.

SO ORDERED.

EN BANC

G.R. No. 82849 August 2, 1989

CEBU OXYGEN & ACETYLENE CO., INC. (COACO) petitioner,


vs.
SECRETARY FRANKLIN M. DRILON OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, ASSISTANT
REGIONAL DIRECTOR CANDIDO CUMBA OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL
OFFICE NO. 7 AND CEBU OXYGEN-ACETYLENE & CENTRAL VISAYAS EMPLOYEES ASSOCIATION
(COACVEA) respondents.

Michael L. Rama for petitioner.

Armando M. Alforque for private respondent.

GANCAYCO, J.;

The principal issue raised in this petition is whether or not an Implementing Order of the Secretary of Labor and Employment
(DOLE) can provide for a prohibition not contemplated by the law it seeks to implement.

The undisputed facts are as follows:

Petitioner and the union of its rank and file employees, Cebu Oxygen, Acetylene and Central Visayas Employees Association
(COAVEA) entered into a collective bargaining agreement (CBA) covering the years 1986 to 1988. Pursuant thereto, the
management gave salary increases as follows:

ARTICLE IV — SALARIES/RICE RATION


Section 1. The COMPANY agrees that for and during the three (3) year effectivity of this AGREEMENT, it will
grant to all regular covered employees the following salary increases:

Salaries:

1) For the first year which will be paid on January 14, 1986 — P200 to each covered employee.

IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY INCREASE SHALL BE CREDITED
AS PAYMENT TO ANY MANDATED GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES
WHICH MAY BE ISSUED BY WAY OF LEGISLATION, DECREE OR PRESIDENT

2) For the second year which will be paid on January 16, 1987-P 200 to each covered employee.

IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY INCREASE SHALL BE CREDITED
AS PAYMENT TO ANY DATED GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES WHICH
MAY BE ISSUED BY WAY OF LEGISLATION, DECREE OR PRESIDENTIAL EDICT COUNTED FROM THE
ABOVE DATE TO THE NEXT INCREASE.

3) For the third year which will be paid on January 16, 1988 — P300 to each covered employee.

IT IS HEREBY EXPRESSLY AGREED AND UNDERSTOOD THAT THIS PAY INCREASE SHALL BE CREDITED
AS PAYMENT TO ANY MANDATED GOVERNMENT WAGE ADJUSTMENT OR ALLOWANCE INCREASES
WHICH MAY BE ISSUED BY WAY OF LEGISLATION, DECREE OR PRESIDENTIAL EDICT COUNTED FROM
THE ABOVE DATE TO THE NEXT INCREASE.

IF THE WAGE ADJUSTMENT OF ALLOWANCE INCREASES DECREED BY LAW, LEGISLATION OR


PRESIDENTIAL qqqEDICT IN ANY PARTICULAR YEAR SHALL BE HIGHER THAN THE FOREGOING
INCREASES IN THAT PARTICULAR YEAR, THEN THE COMPANY SHALL PAY THE DIFFERENCE.

On December 14, 1987, Republic Act No. 6640 was passed increasing the minimum wage, as follows:

Sec. 2. The statutory minimum wage rates of workers and employees in the private sector, whether agricultural or
non-agricultural, shall be increased by ten pesos (P10.00) per day, except non-agricultural workers and
employees outside Metro Manila who shall receive an increase of eleven pesos (P11.00) per day: Provided, that
those already receiving above the minimum wage up to one hundred pesos (Pl 00.00 shall receive an increase of
ten pesos (Pl 0.00) per day. Excepted from the provisions of this Act are domestic helpers and persons employed
in the personal service of another.

The Secretary of Labor issued the pertinent rules implementing the provisions of Republic Act No. 6640. Section 8 thereof
provides:

Section 8. Wage Increase Under Individual/Collective Agreements. — No wage increase shall be credited as
compliance with the increase prescribed herein unless expressly provided under valid individual
written/collective agreements; and, provided further, that such wage increase was granted in anticipation of the
legislated wage increase under the act. Such increases shall not include anniversary wage increases provided on
collective agreements.

In sum, Section 8 of the implementing rules prohibits the employer from crediting anniversary wage increases negotiated under a
collective bargaining agreement against such wage increases mandated by Republic Act No. 6640.

Accordingly, petitioner credited the first year increase of P200.00 under the CBA and added the difference of P61.66 (rounded to
P62.00) and P31.00 to the monthly salary and the 13th month pay, respectively, of its employees from the effectivity of Republic Act
No. 6640 on December 14,1987 to February 15, 1988.

On February 22, 1988, a Labor and Employment Development Officer, pursuant to Inspection Authority No. 058-88, commenced a
routine inspection of petitioner's establishment. Upon completion of the inspection on March 10, 1988, and based on payrolls and
other records, he found that petitioner committed violations of the law as follows:

1. Under payment of Basic Wage per R.A. No. 6640 covering the period of two (2) months representing 208
employees who are not receiving wages above P100/day prior to the effectivity of R.A. No. 6640 in the aggregate
amount of EIGHTY THREE THOUSAND AND TWO HUNDRED PESOS (P83,200.00); and

2. Under payment of 13th month pay for the year 1987, representing 208 employees who are not receiving wages
above P 100/day prior to the effectivity of R.A. No. 6640 in the aggregate amount of FORTY EIGHT THOUSAND
AND FORTY EIGHT PESOS (P48,048.00).

On April 7, 1988, respondent Assistant Regional Director, issued an Order instructing petitioner to pay its 208 employees the
aggregate amount of P 131,248.00, computed as follows:
Computation sheet of differentials due to COACO-Cebu Workers.

Salary Differentials:

a) From December 14/87 to February 15/88

= P200.00/mo x 2 months

= P400.00

= P400 x 208 employees (who are not receiving above P100/day as wages before the effectivity of R.A. No. 6640)

=P 83,200.00

b) 13th month pay differentials of the year 1987:

= P231.00 x 208 employees (who are not receiving above P100/day as wages before the effectivity of RA. No.
6640)

=P48,048.00

Total = P131,248.00

In sum, the Assistant Regional Director ordered petitioner to pay the deficiency of P200.00 in the monthly salary and P 231.00 in
the 13th month pay of its employees for the period stated. Petitioner protested the Order of the Regional Director on the ground
that the anniversary wage increases under the CBA can be credited against the wage increase mandated by Republic Act No. 6640.
Hence, petitioner contended that inasmuch as it had credited the first year increase negotiated under the CBA, it was liable only for
a salary differential of P 62.00 and a 13th month pay differential of P31.00. Petitioner argued that the payment of the differentials
constitutes full compliance with Republic Act No. 6640. Apparently, the protest was not entertained. Petitioner brought the case
immediately to this Court without appealing the matter to the Secretary of Labor and Employment. On May 9,1988, this Court
issued a temporary restraining order enjoining the Assistant Regional Director from enforcing his Order dated April 7, 1988. 1The
thrust of the argument of petitioner is that Section 8 of the rules implementing the provisions of Republic Act No. 6640 particularly
the provision excluding anniversary wage increases from being credited to the wage increase provided by said law is null and void
on the ground that the same unduly expands the provisions of the said law.

This petition is impressed with merit.

Public respondents aver that petitioner should have first appealed to the Secretary of Labor before going to court. It is fundamental
that in a case where only pure questions of law are raised, the doctrine of exhaustion of administrative remedies cannot apply
because issues of law cannot be resolved with finality by the administrative officer. Appeal to the administrative officer of orders
involving questions of law would be an exercise in futility since administrative officers cannot decide such issues with finality.2 The
questions raised in this petition are questions of law. Hence, the failure to exhaust administrative remedies cannot be considered
fatal to this petition.

As to the issue of the validity of Section 8 of the rules implementing Republic Act No. 6640, which prohibits the employer from
crediting the anniversary wage increases provided in collective bargaining agreements, it is a fundamental rule that implementing
rules cannot add or detract from the provisions of law it is designed to implement. The provisions of Republic Act No. 6640, do not
prohibit the crediting of CBA anniversary wage increases for purposes of compliance with Republic Act No. 6640. The
implementing rules cannot provide for such a prohibition not contemplated by the law. Administrative regulations adopted under
legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole
purpose of carrying into effect its general provisions. The law itself cannot be expanded by such regulations. An administrative
agency cannot amend an act of Congress. 3 Thus petitioner's contention that the salary increases granted by it pursuant to the
existing CBA including anniversary wage increases should be considered in determining compliance with the wage increase
mandated by Republic Act No. 6640, is correct. However, the amount that should only be credited to petitioner is the wage increase
for 1987 under the CBA when the law took effect. The wage increase for 1986 had already accrued in favor of the employees even
before the said law was enacted.

Petitioner therefor correctly credited its employees P62.00 for the differential of two (2) months increase and P31.00 each for the
differential in 13th month pay, after deducting the P200.00 anniversary wage increase for 1987 under the CBA. Indeed, it is
stipulated in the CBA that in case any wage adjustment or allowance increase decreed by law, legislation or presidential edict in any
particular year shall be higher than the foregoing increase in that particular year, then the company (petitioner) shall pay the
difference.

WHEREFORE, the petition is hereby GRANTED. The Order of the respondent Assistant Regional Director dated April 7, 1988 is
modified in that petitioner is directed to pay its 208 employees so entitled the amount of P62.00 each as salary differential for two
(2) months and P31.00 as 13th month pay differential in full compliance with the provisions of Republic Act No. 6640. Section 8 of
the rules implementing Republic 6640, is hereby declared null and void in so far as it excludes the anniversary wage increases
negotiated under collective bargaining agreements from being credited to the wage increase provided for under Republic Act No.
6440. This decision is immediately executory.
SO ORDERED.

[G.R. No. 131082. June 19, 2000]

ROMULO, MABANTA, BUENAVENTURA, SAYOC & DE LOS ANGELES, petitioner, vs. HOME DEVELOPMENT
MUTUAL FUND, respondent.

DECISION

DAVIDE, JR., C.J.: CODES

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

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

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

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

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

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

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

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

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

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

Since the Amendments to the Rules and Regulations Implementing Republic Act No. 7742 involve an imposition of an additional
burden, a public hearing should have first been conducted to give chance to the employers, like PETITIONER, to be heard before
the HDMF adopted the said Amendments. Absent such public hearing, the amendments should be voided.
Finally, PETITIONER contends that HDMF did not comply with Section 3, Chapter 2, Book VII of the Administrative Code of 1987,
which provides that "[e]very agency shall file with the University of the Philippines Law Center three (3) certified copies of every
rule adopted by it."

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

As to the public hearing, HDMF maintains that as can be clearly deduced from Section 9(1), Chapter 2, book VII of the Revised
Administrative Code of 1987, public hearing is required only when the law so provides, and if not, only if the same is practicable. It
follows that public hearing is only optional or discretionary on the part of the agency concerned, except when the same is required
by law. P.D. No. 1752 does not require that pubic hearing be first conducted before the rules and regulations implementing it would
become valid and effective. What it requires is the publication of said rules and regulations at least once in a newspaper of general
circulation. Having published said 1995 and 1996 Amendments through the Philippine Star on 21 October 1995 [13] and 15 November
1996,[14] respectively, HDMF has complied with the publication requirement.

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

We find for the PETITIONER. Calrky

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

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

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

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

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

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

It is without doubt that the HDMF Board has rule~making power as provided in Section 5 [17] of R.A. No. 7742 and Section 13[18] of
P.D. No. 1752. However, it is well~settled that rules and regulations, which are the product of a delegated power to create new and
additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the
legislature to the administrative agency.[19] It is required that the regulation be germane to the objects and purposes of the law, and
be not in contradiction to, but in conformity with, the standards prescribed by law.[20]

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

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

Considering the foregoing conclusions, it is unnecessary to dwell on the other issues raised.

WHEREFORE, the petition is GRANTED. The assailed decision of 31 July 1997 of the Court of Appeals in CA~G.R. No. SP~43668
and its Resolution of 15 October 1997 are hereby REVERSED and SET ASIDE. The disapproval by the Home Development Mutual
Fund of the application of the petitioner for waiver or suspension of Fund coverage is SET ASIDE, and the Home Development
Mutual Fund is hereby directed to refund to petitioner all sums of money it collected from the latter.

SO ORDERED. Slxsc

[Association of Philippine Coconut


Desiccators v. Philippine Coconut Authority, G.R. No. 110526, February 10, 1998].

G.R. No. 110526 February 10, 1998

ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner,


vs.
PHILIPPINE COCONUT AUTHORITY, respondent.

MENDOZA, J.:

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

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

As disclosed by the parties' pleadings, the facts are as follows:

On November 5, 1992, seven desiccated coconut processing companies belonging to the APCD brought suit in the Regional Trial
Court, National Capital Judicial Region in Makati, Metro Manila, to enjoin the PCA from issuing permits to certain applicants for
the establishment of new desiccated coconut processing plants. Petitioner alleged that the issuance of licenses to the applicants
would violate PCA's Administrative Order No. 02, series of 1991, as the applicants were seeking permits to operate in areas
considered "congested" under the administrative order.1

On November 6, 1992, the trial court issued a temporary restraining order and, on November 25, 1992, a writ of preliminary
injunction, enjoining the PCA from processing and issuing licenses to Primex Products, Inc., Coco Manila, Superstar (Candelaria)
and Superstar (Davao) upon the posting of a bond in the amount of P100,000.00.2

Subsequently and while the case was pending in the Regional Trial Court, the Governing Board of the PCA issued on March 24,
1993 Resolution No. 018-93, providing for the withdrawal of the Philippine Coconut Authority from all regulation of the coconut
product processing industry. While it continues the registration of coconut product processors, the registration would be limited to
the "monitoring" of their volumes of production and administration of quality standards. The full text of the resolution reads:

RESOLUTION NO. 018-93


POLICY DECLARATION DEREGULATING
THE ESTABLISHMENT OF NEW COCONUT
PROCESSING PLANTS

WHEREAS, it is the policy of the State to promote free enterprise unhampered by protective regulations and unnecessary
bureaucratic red tapes;
WHEREAS, the deregulation of certain sectors of the coconut industry, such as marketing of coconut oils pursuant to
Presidential Decree No. 1960, the lifting of export and commodity clearances under Executive Order No. 1016, and
relaxation of regulated capacity for the desiccated coconut sector pursuant to Presidential Memorandum of February 11,
1988, has become a centerpiece of the present dispensation;

WHEREAS, the issuance of permits or licenses prior to business operation is a form of regulation which is not provided in
the charter of nor included among the powers of the PCA;

WHEREAS, the Governing Board of PCA has determined to follow and further support the deregulation policy and effort
of the government to promote free enterprise;

NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no longer require any
coconut oil mill, coconut oil refinery, coconut desiccator, coconut product processor/factory, coconut fiber plant or any
similar coconut processing plant to apply with PCA and the latter shall no longer issue any form of license or permit as
condition prior to establishment or operation of such mills or plants;

RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned coconut product
processors for the purpose of monitoring their volumes of production, administration of quality standards with the
corresponding service fees/charges.

ADOPTED this 24th day of March 1993, at Quezon City.3

The PCA then proceeded to issue "certificates of registration" to those wishing to operate desiccated coconut processing plants,
prompting petitioner to appeal to the Office of the President of the Philippines on April 26, 1993 not to approve the resolution in
question. Despite follow-up letters sent on May 25 and June 2, 1993, petitioner received no reply from the Office of the President.
The "certificates of registration" issued in the meantime by the PCA has enabled a number of new coconut mills to operate. Hence
this petition.

Petitioner alleges:

RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR BEING AN UNDUE EXERCISE OF
LEGISLATIVE POWER BY AN ADMINISTRATIVE BODY.

II

ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS WITHOUT ANY BASIS, ARBITRARY,
UNREASONABLE AND THEREFORE IN VIOLATION OF SUBSTANTIVE DUE PROCESS OF LAW.

III

IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED THE PROCEDURAL DUE PROCESS
REQUIREMENT OF CONSULTATION PROVIDED IN PRESIDENTIAL DECREE NO. 1644, EXECUTIVE ORDER NO.
826 AND PCA ADMINISTRATIVE ORDER NO. 002, SERIES OF 1991.

On the other hand, in addition to answering petitioner's arguments, respondent PCA alleges that this petition should be denied on
the ground that petitioner has a pending appeal before the Office of the President. Respondent accuses petitioner of forum-
shopping in filing this petition and of failing to exhaust available administrative remedies before coming to this Court. Respondent
anchors its argument on the general rule that one who brings an action under Rule 65 must show that one has no appeal nor any
plain, speedy, and adequate remedy in the ordinary course of law.

I.

The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously urged by the
Solicitor General on behalf of respondent, has obviously no application here. The resolution in question was issued by the PCA in
the exercise of its rule-making or legislative power. However, only judicial review of decisions of administrative agencies made in
the exercise of their quasi-judicial function is subject to the exhaustion doctrine. The exhaustion doctrine stands as a bar to an
action which is not yet complete4 and it is clear, in the case at bar, that after its promulgation the resolution of the
PCA abandoning regulation of the desiccated coconut industry became effective. To be sure, the PCA is under the
direct supervision of the President of the Philippines but there is nothing in P.D. No. 232, P.D. No. 961, P.D. No.
1468 and P.D. No. 1644 defining the powers and functions of the PCA which requires rules and regulations issued
by it to be approved by the President before they become effective.

In any event, although the APCD has appealed the resolution in question to the Office of the President,
considering the fact that two months after they had sent their first letter on April 26, 1993 they still had to hear
from the President's office, meanwhile respondent PCA was issuing certificates of registration indiscriminately
to new coconut millers, we hold that petitioner was justified in filing this case on June 25, 1993. 5 Indeed, after
writing the Office of the President on April 26, 1993 6 petitioner sent inquiries to that office not once, but twice,
on May 26, 19937 and on June 2, 1993,8 but petitioner did not receive any reply.

II.

We now turn to the merit of the present petition. The Philippine Coconut Authority was originally created by P.D.
232 on June 30, 1973, to take over the powers and functions of the Coconut Coordinating Council, the Philippine
Coconut Administration and the Philippine Coconut Research Institute. On June 11, 1978, by P.D. No. 1468, it was
made "an independent public corporation . . . directly reporting to, and supervised by, the President of the
Philippines,"9 and charged with carrying out the State's policy "to promote the rapid integrated development and
growth of the coconut and other palm oil industry in all its aspects and to ensure that the coconut farmers
become direct participants in, and beneficiaries of, such development and growth." 10 through a regulatory
scheme set up by law.11

Through this scheme, the government, on August 28, 1982, temporarily prohibited the opening of new coconut
processing plants and, four months later, phased out some of the existing ones in view of overproduction in the
coconut industry which resulted in cut-throat competition, underselling and smuggling of poor quality products
and ultimately in the decline of the export performance of coconut-based commodities. The establishment of new
plants could be authorized only upon determination by the PCA of the existence of certain economic conditions
and the approval of the President of the Philippines. Thus, Executive Order No. 826, dated August 28, 1982,
provided:

Sec. 1. Prohibition. — Except as herein provided, no government agency or instrumentality shall


hereafter authorize, approve or grant any permit or license for the establishment or operation of new
desiccated coconut processing plants, including the importation of machinery or equipment for the
purpose. In the event of a need to establish a new plant, or expand the capacity, relocate or upgrade the
efficiencies of any existing desiccated plant, the Philippine Coconut Authority may, upon proper
determination of such need and evaluation of the condition relating to:

a. the existing market demand;

b. the production capacity prevailing in the country or locality;

c. the level and flow of raw materials; and

d. other circumstances which may affect the growth or viability of the industry concerned,

authorize or grant the application for, the establishment or expansion of capacity, relocation or
upgrading of efficiencies of such desiccated coconut processing plant, subject to the approval of the
President.

On December 6, 1982, a phase-out of some of the existing plants was ordered by the government after finding
that "a mere freeze in the present capacity of existing plants will not afford a viable solution to the problem
considering that the total available limited market is not adequate to support all the existing processing plants,
making it imperative to reduce the number of existing processing plants."12 Accordingly, it was ordered:13

Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action as may be necessary to
reduce the number of existing desiccated coconut processing plants to a level which will insure the
survival of the remaining plants. The Authority is hereby directed to determine which of the existing
processing plants should be phased out and to enter into appropriate contracts with such plants for the
above purpose.

It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87, authorizing the establishment and
operation of additional DCN plants, in view of the increased demand for desiccated coconut products in the
world's markets, particularly in Germany, the Netherlands and Australia. Even then, the opening of new plants
was made subject to "such implementing guidelines to be set forth by the Authority" and "subject to the final
approval of the President."

The guidelines promulgated by the PCA, as embodied in Administrative Order No. 002, series of 1991, inter
alia authorized the opening of new plants in "non-congested areas only as declared by the PCA" and subject to
compliance by applicants with "all procedures and requirements for registration under Administrative Order
No. 003, series of 1981 and this Order." In addition, as the opening of new plants was premised on the increased
global demand for desiccated coconut products, the new entrants were required to submit sworn statements of
the names and addresses of prospective foreign buyers.

This form of "deregulation" was approved by President Aquino in her memorandum, dated February 11, 1988, to
the PCA. Affirming the regulatory scheme, the President stated in her memorandum:
It appears that pursuant to Executive Order No. 826 providing measures for the protection of the
Desiccated Coconut Industry, the Philippine Coconut Authority evaluated the conditions relating to: (a)
the existing market demands; (b) the production capacity prevailing in the country or locality; (c) the
level and flow of raw materials; and (d) other circumstances which may affect the growth or viability of
the industry concerned and that the result of such evaluation favored the expansion of production and
market of desiccated coconut products.

In view hereof and the favorable recommendation of the Secretary of Agriculture, the deregulation of the
Desiccated Coconut Industry as recommended in Resolution No. 058-87 adopted by the PCA Governing
Board on October 28, 1987 (sic) is hereby approved.14

These measures — the restriction in 1982 on entry into the field, the reduction the same year of the number of the
existing coconut mills and then the lifting of the restrictions in 1987 — were adopted within the framework of
regulation as established by law "to promote the rapid integrated development and growth of the coconut and
other palm oil industry in all its aspects and to ensure that the coconut farmers become direct participants in,
and beneficiaries of, such development and growth." 15 Contrary to the assertion in the dissent, the power given
to the Philippine Coconut Authority — and before it to the Philippine Coconut Administration — "to formulate
and adopt a general program of development for the coconut and other palm oils industry" 16 is not a roving
commission to adopt any program deemed necessary to promote the development of the coconut and other palm
oils industry, but one to be exercised in the context of this regulatory structure.

In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the questioned resolution
which allows not only the indiscriminate opening of new coconut processing plants but the virtual dismantling of
the regulatory infrastructure whereby, forsaking controls theretofore placed in its keeping, the PCA limits its
function to the innocuous one of "monitoring" compliance by coconut millers with quality standards and
volumes of production. In effect, the PCA would simply be compiling statistical data on these matters, but in case
of violations of standards there would be nothing much it would do. The field would be left without an umpire
who would retire to the bleachers to become a mere spectator. As the PCA provided in its Resolution No. 018-93:

NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no


longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut product
processor/factory, coconut fiber plant or any similar coconut processing plant to apply with PCA and the
latter shall no longer issue any form of license or permit as condition prior to establishment or operation
of such mills or plants;

RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned
coconut product processors for the purpose of monitoring their volumes of production, administration
of quality standards with the corresponding service fees/charges.

The issue is not whether the PCA has the power to adopt this resolution to carry out its mandate under the law
"to promote the accelerated growth and development of the coconut and other palm oil industry." 17 The issue
rather is whether it can renounce the power to regulate implicit in the law creating it for that is what the
resolution in question actually is.

Under Art. II, § 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the PCA is "To formulate and adopt
a general program of development for the coconut and other palm oil industry in all its aspects." By limiting the
purpose of registration to merely "monitoring volumes of production [and] administration of quality standards"
of coconut processing plants, the PCA in effect abdicates its role and leaves it almost completely to market forces
how the coconut industry will develop.

Art. II, § 3 of P.D. No. 1468 further requires the PCA:

(h) To regulate the marketing and the exportation of copra and its by-products by establishing standards
for domestic trade and export and, thereafter, to conduct an inspection of all copra and its by-products
proposed for export to determine if they conform to the standards established;

Instead of determining the qualifications of market players and preventing the entry into the field of those who
are unfit, the PCA now relies entirely on competition — with all its wastefulness and inefficiency — to do the
weeding out, in its naive belief in survival of the fittest. The result can very well be a repeat of 1982 when free
enterprise degenerated into a "free-for-all," resulting in cut-throat competition, underselling, the production of
inferior products and the like, which badly affected the foreign trade performance of the coconut industry.

Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk other statutory provisions,
particularly those of P.D. No. 1644, to wit:

Sec. 1. The Philippine Coconut Authority shall have full power and authority to regulate the marketing
and export of copra, coconut oil and their by-products, in furtherance of the steps being taken to
rationalize the coconut oil milling industry.
Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine Coconut Authority may initiate
and implement such measures as may be necessary to attain the rationalization of the coconut oil milling
industry, including, but not limited to, the following measures:

(a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil and their by-products;

(b) Prescription of quality standards;

(c) Establishment of maximum quantities for particular periods and particular markets;

(d) Inspection and survey of export shipments through an independent international superintendent or
surveyor.

In the exercise of its powers hereunder, the Philippine Coconut Authority shall consult with, and be
guided by, the recommendation of the coconut farmers, through corporations owned or controlled by
them through the Coconut Industry Investment Fund and the private corporation authorized to be
organized under Letter of Instructions No. 926.

and the Revised Coconut Code (P.D. No. 1468), Art. II, § 3, to wit:

(m) Except in respect of entities owned or controlled by the Government or by the coconut farmers under
Sections 9 and 10, Article III hereof, the Authority shall have full power and authority to regulate the
production, distribution and utilization of all subsidized coconut-based products, and to require the
submission of such reports or documents as may be deemed necessary by the Authority to ascertain
whether the levy payments and/or subsidy claims are due and correct and whether the subsidized
products are distributed among, and utilized by, the consumers authorized by the Authority.

The dissent seems to be saying that in the same way that restrictions on entry into the field were imposed in 1982
and then relaxed in 1987, they can be totally lifted now without prejudice to reimposing them in the future should
it become necessary to do so. There is really no renunciation of the power to regulate, it is claimed. Trimming
down of PCA's function to registration is not an abdication of the power to regulate but is regulation itself. But
how can this be done when, under Resolution No. 018-93, the PCA no longer requires a license as condition for
the establishment or operation of a plant? If a number of processing firms go to areas which are already
congested, the PCA cannot stop them from doing so. If there is overproduction, the PCA cannot order a cut back
in their production. This is because the licensing system is the mechanism for regulation. Without it the PCA will
not be able to regulate coconut plants or mills.

In the first "whereas" clause of the questioned resolution as set out above, the PCA invokes a policy of free
enterprise that is "unhampered by protective regulations and unnecessary bureaucratic red tape" as justification
for abolishing the licensing system. There can be no quarrel with the elimination of "unnecessary red tape." That
is within the power of the PCA to do and indeed it should eliminate red tape. Its success in doing so will be
applauded. But free enterprise does not call for removal of "protective regulations."

Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic
principle.18 Although the present Constitution enshrines free enterprise as a policy, 19 it nonetheless reserves to
the government the power to intervene whenever necessary to promote the general welfare. This is clear from
the following provisions of Art. XII of the Constitution which, so far as pertinent, state:

Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and similar collective
organizations, shall have the right to own, establish, and operate economic enterprises, subject to the
duty of the State to promote distributive justice and to intervene when the common good so demands.

Sec. 19. The State shall regulate or prohibit monopolies when the public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed. (Emphasis added).

At all events, any change in policy must be made by the legislative department of the government. The regulatory
system has been set up by law. It is beyond the power of an administrative agency to dismantle it. Indeed,
petitioner charges the PCA of seeking to render moot a case filed by some of its members questioning the grant of
licenses to certain parties by adopting the resolution in question. It is alleged that members of petitioner
complained to the court that the PCA had authorized the establishment and operation of new plants in areas
which were already crowded, in violation of its Administrative Order No. 002, series of 1991. In response, the
Regional Trial Court issued a writ of preliminary injunction, enjoining the PCA from issuing licenses to the
private respondent in that case.

These allegations of petitioner have not been denied here. It would thus seem that instead of defending its
decision to allow new entrants into the field against petitioner's claim that the PCA decision violated the
guidelines in Administrative Order No. 002, series of 1991, the PCA adopted the resolution in question to render
the case moot. In so doing, the PCA abdicated its function of regulation and left the field to untrammeled
competition that is likely to resurrect the evils of cut-throat competition, underselling and overproduction which
in 1982 required the temporary closing of the field to new players in order to save the industry.
The PCA cannot rely on the memorandum of then President Aquino for authority to adopt the resolution in
question. As already stated, what President Aquino approved in 1988 was the establishment and operation of
new DCN plants subject to the guidelines to be drawn by the PCA.20 In the first place, she could not have
intended to amend the several laws already mentioned, which set up the regulatory system, by a mere
memoranda to the PCA. In the second place, even if that had been her intention, her act would be without effect
considering that, when she issued the memorandum in question on February 11, 1988, she was no longer vested
with legislative authority.21

WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all certificates of registration issued
under it are hereby declared NULL and VOID for having been issued in excess of the power of the Philippine
Coconut Authority to adopt or issue.

SO ORDERED.

Echegaray v. Secretary of Justice, G.R. No. 132601, October 12, 1998

G.R. No. 132601. October 12, 1998]

LEO ECHEGARAY y PILO, petitioner, vs. THE SECRETARY OF JUSTICE and THE DIRECTOR OF THE BUREAU
OF CORRECTIONS, THE EXECUTIVE JUDGE OF THE REGIONAL TRIAL COURT OF QUEZON CITY AND
THE PRESIDING JUDGE OF REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 104, respondents.

DECISION
PER CURIAM:

On June 25, 1996, this Court affirmed[1] the conviction of petitioner Leo Echegaray y Pilo for the crime of rape of the 10 year-
old daughter of his common-law spouse and the imposition upon him of the death penalty for the said crime.
Petitioner duly filed a Motion for Reconsideration raising mainly factual issues, and on its heels, a Supplemental Motion for
Reconsideration raising for the first time the issue of the constitutionality of Republic Act No. 7659[2](the death penalty law) and the
imposition of the death penalty for the crime of rape.
On February 7, 1998, this Court denied[3] petitioner's Motion for Reconsideration and Supplemental Motion for
Reconsideration with a finding that Congress duly complied with the requirements for the reimposition of the death penalty and
therefore the death penalty law is not unconstitutional.
In the meantime, Congress had seen it fit to change the mode of execution of the death penalty from electrocution to lethal
injection,[4] and passed Republic Act No. 8177, AN ACT DESIGNATING DEATH BY LETHAL INJECTION AS THE METHOD OF
CARRYING OUT CAPITAL PUNISHMENT, AMENDING FOR THE PURPOSE ARTICLE 81 OF THE REVISED PENAL CODE, AS
AMENDED BY SECTION 24 OF REPUBLIC ACT NO. 7659.[5] Pursuant to the provisions of said law, the Secretary of Justice
promulgated the Rules and Regulations to Implement Republic Act No. 8177 ("implementing rules")[6] and directed the Director of
the Bureau of Corrections to prepare the Lethal Injection Manual.[7]
On March 2, 1998, petitioner filed a Petition[8] for Prohibition, Injunction and/or Temporary Restraining Order to enjoin
respondents Secretary of Justice and Director of the Bureau of Prisons from carrying out the execution by lethal injection of
petitioner under R.A. No. 8177 and its implementing rules as these are unconstitutional and void for being: (a) cruel, degrading and
inhuman punishment per se as well as by reason of its being (b) arbitrary, unreasonable and a violation of due process, (c) a
violation of the Philippines' obligations under international covenants, (d) an undue delegation of legislative power by Congress, (e)
an unlawful exercise by respondent Secretary of the power to legislate, and (f) an unlawful delegation of delegated powers by the
Secretary of Justice to respondent Director.
On March 3, 1998, petitioner, through counsel, filed a Motion for Leave of Court [9] to Amend and Supplement Petition with
the Amended and Supplemental Petition[10] attached thereto, invoking the additional ground of violation of equal protection, and
impleading the Executive Judge of the Regional Trial Court of Quezon City and the Presiding Judge of the Regional Trial Court,
Branch 104, in order to enjoin said public respondents from acting under the questioned rules by setting a date for petitioner's
execution.
On March 3, 1998, the Court resolved, without giving due course to the petition, to require the respondents to COMMENT
thereon within a non-extendible period of ten (10) days from notice, and directed the parties "to MAINTAIN the status
quo prevailing at the time of the filing of this petition."
On March 10, 1998, the Court granted the Motion for Leave of Court to Amend and Supplement Petition, and required
respondents to COMMENT thereon within ten (10) days from notice.
On March 16, 1998, petitioner filed a Very Urgent Motion (1) To clarify Status Quo Order, and (2) For the Issuance of a
Temporary Restraining Order expressly enjoining public respondents from taking any action to carry out petitioner's execution
until the petition is resolved.
On March 16, 1998, the Office of the Solicitor General[11] filed a Comment (On the Petition and the Amended Supplemental
Petition)[12] stating that (1) this Court has already upheld the constitutionality of the Death Penalty Law, and has repeatedly
declared that the death penalty is not cruel, unjust, excessive or unusual punishment; (2) execution by lethal injection, as
authorized under R.A. No. 8177 and the questioned rules, is constitutional, lethal injection being the most modern, more humane,
more economical, safer and easier to apply (than electrocution or the gas chamber); (3) the International Covenant on Civil and
Political Rights does not expressly or impliedly prohibit the imposition of the death penalty; (4) R.A. No. 8177 properly delegated
legislative power to respondent Director; and that (5) R.A. No. 8177 confers the power to promulgate the implementing rules to the
Secretary of Justice, Secretary of Health and the Bureau of Corrections.
On March 17, 1998, the Court required the petitioner to file a REPLY thereto within a non-extendible period of ten days from
notice.
On March 25, 1998, the Commission on Human Rights[13] filed a Motion for Leave of Court to Intervene and/or Appear
as Amicus Curiae[14] with the attached Petition to Intervene and/or Appear as Amicus Curiae[15] alleging that the death penalty
imposed under R.A. No. 7659 which is to be implemented by R.A. No. 8177 is cruel, degrading and outside the limits of civil society
standards, and further invoking (a) Article II, Section 11 of the Constitution which provides: "The State values the dignity of every
human person and guarantees full respect for human rights."; (b) Article III of the Universal Declaration of Human Rights which
states that "Everyone has the right to life, liberty and security of person," and Article V thereof, which states that "No one shall be
subjected to torture or to cruel, inhuman or degrading treatment or punishment."; (c) The International Covenant on Civil and
Political Rights, in particular, Article 6 thereof, and the Second Optional Protocol to the International Covenant on Civil and
Political Rights Aiming At The Abolition of the Death Penalty; (d) Amnesty International statistics showing that as of October 1996,
58 countries have abolished the death penalty for all crimes, 15 countries have abolished the death penalty for ordinary crimes, and
26 countries are abolitionists de facto, which means that they have retained the death penalty for ordinary crimes but are
considered abolitionists in practice that they have not executed anyone during the past ten (10) years or more, or in that they have
made an international commitment not to carry out executions, for a total of 99 countries which are total abolitionists in law or
practice, and 95 countries as retentionists;[16] and (e) Pope John Paul II's encyclical, "Evangelium Vitae." In a Resolution dated
April 3, 1998, the Court duly noted the motion.
On March 27, 1998, petitioner filed a Reply[17] stating that (1) this Court is not barred from exercising judicial review over the
death penalty per se, the death penalty for rape and lethal injection as a mode of carrying out the death penalty; (2) capital
punishment is a cruel, degrading and inhuman punishment; (3) lethal injection is cruel, degrading and inhuman punishment, and
that being the "most modern" does not make it less cruel or more humane, and that the Solicitor General's "aesthetic" criteria is
short-sighted, and that the lethal injection is not risk free nor is it easier to implement; and (4) the death penalty violates
the International Covenant on Civil and Political Rightsconsidering that the Philippines participated in the deliberations of and
voted for the Second Optional Protocol.
After deliberating on the pleadings, the Court gave due course to the petition, which it now resolves on the merits.
In the Amended and Supplemental Petition, petitioner assails the constitutionality of the mode of carrying out his death
sentence by lethal injection on the following grounds:[18]
I.

DEATH BY LETHAL INJECTION IS UNCONSTITUTIONAL FOR BEING A CRUEL, DEGRADING AND


INHUMAN PUNISHMENT.

II.

THE DEATH PENALTY VIOLATES THE INTERNATIONAL COVENANT ON CIVIL AND POLITICAL RIGHTS,
WHICH IS PART OF THE LAW OF THE LAND.

III.

LETHAL INJECTION, AS AUTHORIZED UNDER REPUBLIC ACT NO. 8177 AND THE QUESTIONED RULES,
IS UNCONSTITUTIONAL BECAUSE IT IS AN UNNECESSARY AND WANTON INFLICTION OF PAIN ON A
PERSON AND IS, THUS, A CRUEL, DEGRADING, AND INHUMAN PUNISHMENT.

IV.

REPUBLIC ACT NO. 8177 UNDULY DELEGATES LEGISLATIVE POWER TO RESPONDENT DIRECTOR.

V.

RESPONDENT SECRETARY UNLAWFULLY DELEGATED THE LEGISLATIVE POWERS DELEGATED TO


HIM UNDER REPUBLIC ACT NO. 8177 TO RESPONDENT DIRECTOR.

VI.

RESPONDENT SECRETARY EXCEEDED THE AUTHORITY DELEGATED TO HIM UNDER REPUBLIC ACT
NO. 8177 AND UNLAWFULLY USURPED THE POWER TO LEGISLATE IN PROMULGATING THE
QUESTIONED RULES.
VII.

SECTION 17 OF THE QUESTIONED RULES IS UNCONSTITUTIONAL FOR BEING DISCRIMINATORY AS


WELL AS FOR BEING AN INVALID EXERCISE BY RESPONDENT SECRETARY OF THE POWER TO
LEGISLATE.

VIII.

INJUCTION MUST ISSUE TO PREVENT IRREPARABLE DAMAGE AND INJURY TO PETITIONER'S RIGHTS
BY REASON OF THE EXISTENCE, OPERATION AND IMPLEMENTATION OF AN UNCONSTITUTIONAL
STATUTE AND EQUALLY INVALID AND IMPLEMENTING RULES.

Concisely put, petitioner argues that R.A. No. 8177 and its implementing rules do not pass constitutional muster for: (a)
violation of the constitutional proscription against cruel, degrading or inhuman punishment, (b) violation of our international
treaty obligations, (c) being an undue delegation of legislative power, and (d) being discriminatory.
The Court shall now proceed to discuss these issues in seriatim.
I. LETHAL INJECTION, NOT CRUEL, DEGRADING OR INHUMAN PUNISHMENT UNDER SECTION 19, ARTICLE
III OF THE 1987 CONSTITUTION.
The main challenge to R.A. 8177 and its implementing rules is anchored on Article III, Section 19 (1) of the 1987 Constitution
which proscribes the imposition of "cruel, degrading or inhuman" punishment. "The prohibition in the Philippine Bill against cruel
and unusual punishments is an Anglo-Saxon safeguard against governmental oppression of the subject, which made its first
appearance in the reign of William and Mary of England in 'An Act declaring the rights and liberties of the subject, and settling the
succession of the crown,' passed in the year 1689. It has been incorporated into the Constitution of the United States (of America)
and into most constitutions of the various States in substantially the same language as that used in the original statute. The exact
language of the Constitution of the United States is used in the Philippine Bill." [19] "The counterpart of Section 19 (1) in the 1935
Constitution reads: 'Excessive fines shall not be imposed, nor cruel and inhuman punishment inflicted.' xxx In the 1973
Constitution the phrase became 'cruel or unusual punishment.' The Bill of Rights Committee of the 1986 Constitutional
Commission read the 1973 modification as prohibiting 'unusual' punishment even if not 'cruel.' It was thus seen as an obstacle to
experimentation in penology. Consequently, the Committee reported out the present text which prohibits 'cruel, degrading or
inhuman punishment' as more consonant with the meaning desired and with jurisprudence on the subject."[20]
Petitioner contends that death by lethal injection constitutes cruel, degrading and inhuman punishment considering that (1)
R.A. No. 8177 fails to provide for the drugs to be used in carrying out lethal injection, the dosage for each drug to be administered,
and the procedure in administering said drug/s into the accused; (2) R.A. No. 8177 and its implementing rules are uncertain as to
the date of the execution, time of notification, the court which will fix the date of execution, which uncertainties cause the greatest
pain and suffering for the convict; and (3) the possibility of "botched executions" or mistakes in administering the drugs renders
lethal injection inherently cruel.
Before the Court proceeds any further, a brief explanation of the process of administering lethal injection is in order.
In lethal injection, the condemned inmate is strapped on a hospital gurney and wheeled into the execution room. A trained
technician inserts a needle into a vein in the inmate's arm and begins an intravenous flow of saline solution. At the warden's signal,
a lethal combination of drugs is injected into the intravenous line. The deadly concoction typically includes three drugs: (1) a
nonlethal dose of sodium thiopenthotal, a sleep inducing barbiturate; (2) lethal doses of pancuronium bromide, a drug that
paralyzes the muscles; and (3) potassium chloride, which stops the heart within seconds. The first two drugs are commonly used
during surgery to put the patient to sleep and relax muscles; the third is used in heart bypass surgery.[21]
Now it is well-settled in jurisprudence that the death penalty per se is not a cruel, degrading or inhuman punishment.[22] In
the oft-cited case of Harden v. Director of Prisons,[23] this Court held that "[p]unishments are cruel when they involve torture or a
lingering death; but the punishment of death is not cruel, within the meaning of that word as used in the constitution. It implies
there something inhuman and barbarous, something more than the mere extinguishment of life." Would the lack in particularity
then as to the details involved in the execution by lethal injection render said law "cruel, degrading or inhuman"? The Court believes
not. For reasons hereafter discussed, the implementing details of R.A. No. 8177 are matters which are properly left to the
competence and expertise of administrative officials.[24]
Petitioner contends that Sec. 16[25] of R.A. No. 8177 is uncertain as to which "court" will fix the time and date of execution, and
the date of execution and time of notification of the death convict. As petitioner already knows, the "court" which designates the
date of execution is the trial court which convicted the accused, that is, after this Court has reviewed the entire records of the
case[26] and has affirmed the judgment of the lower court. Thereupon, the procedure is that the "judgment is entered fifteen (15)
days after its promulgation, and 10 days thereafter, the records are remanded to the court below including a certified copy of the
judgment for execution.[27] Neither is there any uncertainty as to the date of execution nor the time of notification. As to the date of
execution, Section 15 of the implementing rules must be read in conjunction with the last sentence of Section 1 of R.A. No. 8177
which provides that the death sentence shall be carried out "not earlier than one (1) year nor later then eighteen (18) months from
the time the judgment imposing the death penalty became final and executory, without prejudice to the exercise by the President of
his executive clemency powers at all times." Hence, the death convict is in effect assured of eighteen (18) months from the time the
judgment imposing the death penalty became final and executory[28]wherein he can seek executive clemency[29] and attend to all his
temporal and spiritual affairs.[30]
Petitioner further contends that the infliction of "wanton pain" in case of possible complications in the intravenous injection,
considering and as petitioner claims, that respondent Director is an untrained and untested person insofar as the choice and
administration of lethal injection is concerned, renders lethal injection a cruel, degrading and inhuman punishment. Such
supposition is highly speculative and unsubstantiated.
First. Petitioner has neither alleged nor presented evidence that lethal injection required the expertise only of phlebotomists
and not trained personnel and that the drugs to be administered are unsafe or ineffective. [31] Petitioner simply cites situations in the
United States wherein execution by lethal injection allegedly resulted in prolonged and agonizing death for the convict, [32] without
any other evidence whatsoever.
Second. Petitioner overlooked Section 1, third paragraph of R.A. No. 8177 which requires that all personnel involved in the
execution proceedings should be trained prior to the performance of such task. We must presume that the public officials entrusted
with the implementation of the death penalty (by lethal injection) will carefully avoid inflicting cruel punishment.[33]
Third. Any infliction of pain in lethal injection is merely incidental in carrying out the execution of death penalty and does not
fall within the constitutional proscription against cruel, degrading and inhuman punishment. "In a limited sense, anything is cruel
which is calculated to give pain or distress, and since punishment imports pain or suffering to the convict, it may be said that all
punishments are cruel. But of course the Constitution does not mean that crime, for this reason, is to go unpunished." [34] The
cruelty against which the Constitution protects a convicted man is cruelty inherent in the method of punishment, not the necessary
suffering involved in any method employed to extinguish life humanely.[35] Numerous federal and state courts of the United States
have been asked to review whether lethal injections constitute cruel and unusual punishment. No court has found lethal injections
to implicate prisoner's Eighth Amendment rights. In fact, most courts that have addressed the issue state in one or two sentences
that lethal injection clearly is a constitutional form of execution.[36] A few jurisdictions, however, have addressed the merits of the
Eighth Amendment claims. Without exception, these courts have found that lethal injection does not constitute cruel and unusual
punishment. After reviewing the medical evidence that indicates that improper doses or improper administration of the drugs
causes severe pain and that prison officials tend to have little training in the administration of the drugs, the courts have found that
the few minutes of pain does not rise to a constitutional violation.[37]
What is cruel and unusual "is not fastened to the obsolete but may acquire meaning as public opinion becomes enlightened by
a humane justice" and "must draw its meaning from the evolving standards of decency that mark the progress of a maturing
society."[38] Indeed, "[o]ther (U.S.) courts have focused on 'standards of decency' finding that the widespread use of lethal injections
indicates that it comports with contemporary norms."[39] the primary indicator of society's standard of decency with regard to
capital punishment is the response of the country's legislatures to the sanction. [40] Hence, for as long as the death penalty remains
in our statute books and meets the most stringent requirements provided by the Constitution, we must confine our inquiry to the
legality of R.A. No. 8177, whose constitutionality we duly sustain in the face of petitioner's challenge. We find that the legislature's
substitution of the mode of carrying out the death penalty from electrocution to lethal injection infringes no constitutional rights of
petitioner herein.
II. REIMPOSITION OF THE DEATH PENALTY LAW DOES NOT VIOLATE INTERNATIONAL TREATY OBLIGATIONS
Petitioner assiduously argues that the reimposition of the death penalty law violates our international obligations, in
particular, the International Covenant on Civil And Political Rights, which was adopted by the General Assembly of the United
Nations on December 16, 1996, signed and ratified by the Philippines on December 19, 1966 and October 23, 1986,[41] respectively.
Article 6 of the International Covenant on Civil and Political Rights provides:

"1. Every human being has the inherent right to life. This right shall be protected by law. No one shall be arbitrarily deprived of
his life.

2. In countries which have not abolished the death penalty, sentence of death may be imposed only for the most serious
crimes in accordance with the law in force at the time of the commission of the crime and not contrary to the provisions of the
present Covenant and to the Convention on the Prevention and Punishment of the Crime of Genocide. This penalty can only be
carried out pursuant to a final judgment rendered by a competent court." (emphasis supplied)

3. When deprivation of life constitutes the crime of genocide, it is understood that nothing in this article shall authorize any State
Party to the present Covenant to derogate in any way from any obligation assumed under the provisions of the Convention on the
Prevention and Punishment of the Crime of Genocide.

4. Anyone sentenced to death shall have the right to seek pardon or commutation of the sentence. Amnesty, pardon or
commutation of the sentence of death may be granted in all-cases.

5. Sentence of death shall not be imposed for crimes committed by persons below eighteen years of age and shall not be carried
out on pregnant women.

6. Nothing in this article shall be invoked to delay or to prevent the abolition of capital punishment by any State. Party to the
present Covenant."

Indisputably, Article 6 of the Covenant enshrines the individual's right to life. Nevertheless, Article 6 (2) of
the Covenant explicitly recognizes that capital punishment is an allowable limitation on the right to life, subject to the limitation
that it be imposed for the "most serious crimes". Pursuant to Article 28 of the Covenant, a Human Rights Committee was
established and under Article 40 of the Covenant, State parties to the Covenant are required to submit an initial report to the
Committee on the measures they have adopted which give effect to the rights recognized within the Covenant and on the progress
made on the enjoyment of those rights one year of its entry into force for the State Party concerned and thereafter, after five
years. On July 27, 1982, the Human Rights Committee issued General Comment No. 6 interpreting Article 6 of
the Covenant stating that "(while) it follows from Article 6 (2) to (6) that State parties are not obliged to abolish the death penalty
totally, they are obliged to limit its use and, in particular, to abolish it for other than the 'most serious crimes.' Accordingly, they
ought to consider reviewing their criminal laws in this light and, in any event, are obliged to restrict the application of the death
penalty to the most serious crimes.' The article strongly suggests (pars. 2 (2) and (6) that abolition is desirable. xxx The Committee
is of the opinion that the expression 'most serious crimes' must be read restrictively to mean that the death penalty should be a
quite exceptional measure." Further, the Safeguards Guaranteeing Protection of Those Facing the Death Penalty[42] adopted by the
Economic and Social Council of the United Nations declare that the ambit of the term 'most serious crimes' should not go beyond
intentional crimes, with lethal or other extremely grave consequences.
The Optional Protocol to the International Covenant on Civil and Political Rights was adopted by the General Assembly of
the United Nations on December 16, 1966, and signed and ratified by the Philippines on December 19, 1966 and August 22,
1989,[43] respectively. The Optional Protocol provides that the Human Rights Committee shall receive and consider
communications from individuals claiming to be victims of violations of any of the rights set forth in the Covenant.
On the other hand, the Second Optional Protocol to the International Covenant on Civil and Political Rights, Aiming at the
Abolition of the Death Penalty was adopted by the General Assembly on December 15, 1989. The Philippines neither signed
nor ratified said document.[44] Evidently, petitioner's assertion of our obligation under the Second Optional Protocol is
misplaced.
III. THERE IS NO UNDUE DELEGATION OF LEGISLATIVE POWER IN R.A. NO. 8177 TO THE SECRETARY OF
JUSTICE AND THE DIRECTOR OF BUREAU OF CORRECTIONS, BUT SECTION 19 OF THE RULES AND
REGULATIONS TO IMPLEMENT R.A. NO. 8177 IS INVALID.
The separation of powers is a fundamental principle in our system of government. It obtains not through express provision but
by actual division in the framing of our Constitution. Each department of the government has exclusive cognizance of matters
placed within its jurisdiction, and is supreme within its own sphere.[45] Corollary to the doctrine of separation of powers is the
principle of non-delegation of powers. "The rule is that what has been delegated, cannot be delegated or as expressed in a Latin
maxim: potestas delegata non delegari potest."[46] The recognized exceptions to the rule are as follows:
(1) Delegation of tariff powers to the President under Section 28 (2) of Article VI of the Constitution;
(2) Delegation of emergency powers to the President under Section 23 (2) of Article VI of the Constitution;
(3) Delegation to the people at large;
(4) Delegation to local governments; and
(5) Delegation to administrative bodies.[47]
Empowering the Secretary of Justice in conjunction with the Secretary of Health and the Director of the Bureau of
Corrections, to promulgate rules and regulations on the subject of lethal injection is a form of delegation of legislative authority to
administrative bodies.
The reason for delegation of authority to administrative agencies is the increasing complexity of the task of government
requiring expertise as well as the growing inability of the legislature to cope directly with the myriad problems demanding its
attention. The growth of society has ramified its activities and created peculiar and sophisticated problems that the legislature
cannot be expected to attend to by itself. Specialization even in legislation has become necessary. On many problems involving day-
to-day undertakings, the legislature may not have the needed competence to provide the required direct and efficacious, not to say,
specific solutions. These solutions may, however, be expected from its delegates, who are supposed to be experts in the particular
fields assigned to them.[48]
Although Congress may delegate to another branch of the Government the power to fill in the details in the execution,
enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law:
(a) be complete in itself - it must set forth therein the policy to be executed, carried out or implemented by the delegate[49] - and (b)
fix a standard - the limits of which are sufficiently determinate or determinable - to which the delegate must conform in the
performance of his functions.[50]
Considering the scope and the definiteness of R.A. No. 8177, which changed the mode of carrying out the death penalty, the
Court finds that the law sufficiently describes what job must be done, who is to do it, and what is the scope of his authority.[51]
R.A. No. 8177 likewise provides the standards which define the legislative policy, mark its limits, map out its boundaries, and
specify the public agencies which will apply it. it indicates the circumstances under which the legislative purpose may be carried
out.[52] R.A. No. 8177 specifically requires that "[t]he death sentence shall be executed under the authority of the Director of the
Bureau of Corrections, endeavoring so far as possible to mitigate the sufferings of the person under the sentence
during the lethal injection as well as during the proceedings prior to the execution."[53] Further, "[t]he Director of the
Bureau of Corrections shall take steps to ensure that the lethal injection to be administered is sufficient to cause the
instantaneous death of the convict."[54] The legislature also mandated that "all personnel involved in the
administration of lethal injection shall be trained prior to the performance of such task."[55] The Court cannot see
that any useful purpose would be served by requiring greater detail.[56] The question raised is not the definition of what constitutes a
criminal offense,[57] but the mode of carrying out the penalty already imposed by the Courts. In this sense, R.A. No. 8177 is
sufficiently definite and the exercise of discretion by the administrative officials concerned is, to use the words of Justice Benjamin
Cardozo, canalized within banks that keep it from overflowing.
Thus, the Court finds that the existence of an area for exercise of discretion by the Secretary of Justice and the Director of the
Bureau of Corrections under delegated legislative power is proper where standards are formulated for the guidance and the exercise
of limited discretion, which though general, are capable of reasonable application.[58]
It is also noteworthy that Article 81 of the Revised Penal Code which originally provided for the death penalty by electrocution
was not subjected to attack on the ground that it failed to provide for details such as the kind of chair to be used, the amount of
voltage, volume of amperage or place of attachment of electrodes on the death convict. Hence, petitioner's analogous argument with
respect to lethal injection must fail.
A careful reading of R.A. No. 8177 would show that there is no undue delegation of legislative power from the Secretary of
Justice to the Director of the Bureau of Corrections for the simple reason that under the Administrative Code of 1987, the Bureau of
Corrections is a mere constituent unit of the Department of Justice.[59] Further, the Department of Justice is tasked, among others,
to take charge of the "administration of the correctional system."[60] Hence, the import of the phraseology of the law is that the
Secretary of Justice should supervise the Director of the Bureau of Corrections in promulgating the Lethal Injection Manual, in
consultation with the Department of Health.[61]
However, the Rules and Regulations to Implement Republic Act No. 8177 suffer serious flaws that could not be overlooked. To
begin with, something basic appears missing in Section 19 of the implementing rules which provides:

"SEC. 19. EXECUTION PROCEDURE. - Details of the procedure prior to, during and after administering the lethal
injection shall be set forth in a manual to be prepared by the Director. The manual shall contain details of, among others, the
sequence of events before and after execution; procedures in setting up the intravenous line; the administration of the lethal
drugs; the pronouncement of death; and the removal of the intravenous system.

Said manual shall be confidential and its distribution shall be limited to authorized prison personnel."

Thus, the Courts finds in the first paragraph of Section 19 of the implementing rules a veritable vacuum. The Secretary of
Justice has practically abdicated the power to promulgate the manual on the execution procedure to the Director of the Bureau of
Corrections, by not providing for a mode of review and approval thereof. Being a mere constituent unit of the Department of
Justice, the Bureau of Corrections could not promulgate a manual that would not bear the imprimatur of the administrative
superior, the Secretary of Justice as the rule-making authority under R.A. No. 8177. Such apparent abdication of departmental
responsibility renders the said paragraph invalid.
As to the second paragraph of section 19, the Court finds the requirement of confidentiality of the contents of the manual even
with respect to the convict unduly suppressive. It sees no legal impediment for the convict, should he so desire, to obtain a copy of
the manual. The contents of the manual are matters of public concern "which the public may want to know, either because these
directly affect their lives, or simply because such matters naturally arouse the interest of an ordinary citizen." [62] Section 7 of Article
III of the 1987 Constitution provides:

"SEC. 7. The right of the people to information on matters of public concern shall be recognized. Access to official
records, and to documents and papers pertaining to official acts, transaction, or decisions, as well as to government research
data used as a basis for policy development, shall be afforded the citizen, subject to such limitation as may be provided by
law."

The incorporation in the Constitution of a guarantee of access to information of public concern is a recognition of the
essentiality of the free flow of ideas and information in a democracy. [63] In the same way that free discussion enables members of
society to cope with the exigencies of their time,[64] access to information of general interest aids the people in democratic decision-
making[65] by giving them a better perspective of the vital issues confronting the nation.[66]
D. SECTION 17 OF THE RULES AND REGULATIONS TO IMPLEMENT R.A. NO. 8177 IS INVALID FOR BEING
DISCRIMINATORY AND CONTRARY TO LAW.
Even more seriously flawed than Section 19 is Section of the implementing rules which provides:

"SEC. 17. SUSPENSION OF THE EXECUTION OF THE DEATH SENTENCE. Execution by lethal injection shall not be
inflicted upon a woman within the three years next following the date of the sentence or while she is pregnant, nor upon any
person over seventy (70) years of age. In this latter case, the death penalty shall be commuted to the penalty of reclusion
perpetua with the accessory penalties provided in Article 40 of the Revised Penal Code."

Petitioner contends that Section 17 is unconstitutional for being discriminatory as well as for being an invalid exercise of the
power to legislate by respondent Secretary. Petitioner insists that Section 17 amends the instances when lethal injection may be
suspended, without an express amendment of Article 83 of the Revised Penal Code, as amended by section 25 of R.A. No. 7659.
Article 83 f the Revised Penal Code, as amended by section 25 of R.A. No. 7659 now reads as follows:

"ART. 83, Suspension of the execution of the death sentence.- The death sentence shall not be inflicted upon a woman
while she is pregnant or within one (1) year after delivery, nor upon any person over seventy years of age. In this last case, the
death sentence shall be commuted to the penalty of reclusion perpetua with the accessory penalty provided in Article 40. x x
x".

On this point, the Courts finds petitioner's contention impressed with merit. While Article 83 of the Revised Penal Code, as
amended by Section 25 of Republic Act No. 7659, suspends the implementation of the death penalty while a woman is pregnant
or within one (1) year after delivery, Section 17 of the implementing rules omits the one (1) year period following delivery as
an instance when the death sentence is suspended, and adds a ground for suspension of sentence no longer found under Article 83
of the Revised Penal Code as amended, which is the three-year reprieve after a woman is sentenced. This addition is, in
petitioner's view, tantamount to a gender-based discrimination sans statutory basis, while the omission is an impermissible
contravention of the applicable law.
Being merely an implementing rule, Section 17 aforecited must not override, but instead remain consistent and in harmony
with the law it seeks to apply and implement. Administrative rules and regulations are intended to carry out, neither to supplant
nor to modify, the law."[67] An administrative agency cannot amend an act of Congress.[68] In case of discrepancy between a
provision of statute and a rule or regulation issued to implement said statute, the statutory provision prevails. Since the cited clause
in Section 17 which suspends the execution of a woman within the three (3) years next following the date of sentence finds no
supports in Article 83 of the Revised Penal Code as amended, perforce Section 17 must be declared invalid.
One member of the Court voted to declare Republic Act. No. 8177 as unconstitutional insofar as it delegates the power to make
rules over the same subject matter to two persons (the Secretary of Justice and the Director of the Bureau of Corrections) and
constitutes a violation of the international norm towards the abolition of the death penalty. One member of the Court, consistent
with his view in People v. Echegaray, 267 SCRA 682, 734-758 (1997) that the death penalty law (Republic Act. No. 7659) is itself
unconstitutional, believes that Republic Act No. 8177 which provides for the means of carrying out the death sentence, is likewise
unconstitutional. Two other members of the court concurred in the aforesaid Separate Opinions in that the death penalty law
(Republic Act No. 7659) together with the assailed statute (Republic Act No. 8177) are unconstitutional. In sum, four members of
the Court voted to declare Republic Act. No. 8177 as unconstitutional. These Separate Opinions are hereto annexed, infra.
WHEREFORE, the petition is DENIED insofar as petitioner seeks to declare the assailed statute (Republic Act No. 8177) as
unconstitutional; but GRANTED insofar as Sections 17 and 19 of the Rules and Regulations to Implement Republic Act No. 8177
are concerned, which are hereby declared INVALID because (a) Section 17 contravenes Article 83 of the Revised Penal Code, as
amended by Section 25 of the Republic Act No. 7659; and (b) Section 19 fails to provide for review and approval of the Lethal
Injection Manual by the Secretary of Justice, and unjustifiably makes the manual confidential, hence unavailable to interested
parties including the accused/convict and counsel. Respondents are hereby enjoined from enforcing and implementing Republic
Act No. 8177 until the aforesaid Sections 17 and 19 of the Rules and Regulations to Implement Republic Act No. 8177 are
appropriately amended, revised and/or corrected in accordance with this Decision.
NO COSTS.
SO ORDERED.

Lupangco v. Court of Appeals, 160 SCRA

G.R. No. 77372 April 29, 1988

LUPO L. LUPANGCO, RAYMOND S. MANGKAL, NORMAN A. MESINA, ALEXANDER R. REGUYAL, JOCELYN P.


CATAPANG, ENRICO V. REGALADO, JEROME O. ARCEGA, ERNESTOC. BLAS, JR., ELPEDIO M. ALMAZAN,
KARL CAESAR R. RIMANDO, petitioner,
vs.
COURT OF APPEALS and PROFESSIONAL REGULATION COMMISSION, respondent.

Balgos & Perez Law Offices for petitioners.

The Solicitor General for respondents.

GANCAYCO, J.:

Is the Regional Trial Court of the same category as the Professional Regulation Commission so that it cannot pass upon the validity
of the administrative acts of the latter? Can this Commission lawfully prohibit the examiness from attending review classes,
receiving handout materials, tips, or the like three (3) days before the date of the examination? Theses are the issues presented to
the court by this petition for certiorari to review the decision of the Court of Appeals promulagated on January 13, 1987, in CA-G.R.
SP No. 10598, * declaring null and void the other dated Ocober 21, 1986 issued by the Regional Trial Court of Manila, Branch 32 in
Civil Case No. 86-37950 entitled " Lupo L. Lupangco, et al. vs. Professional Regulation Commission."

The records shows the following undisputed facts:

On or about October 6, 1986, herein respondent Professional Regulation Commission (PRC) issued Resolution No. 105 as parts of
its "Additional Instructions to Examiness," to all those applying for admission to take the licensure examinations in accountancy.
The resolution embodied the following pertinent provisions:

No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any
hand-out, review material, or any tip from any school, college or university, or any review center or the like or any
reviewer, lecturer, instructor official or employee of any of the aforementioned or similars institutions during the
three days immediately proceeding every examination day including examination day.

Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 8, Art. III of the Rules
and Regulations of the Commission. 1

On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure examinations in accountancy schedule on
October 25 and November 2 of the same year, filed on their own behalf of all others similarly situated like them, with the Regional
Trial Court of Manila, Branch XXXII, a complaint for injuction with a prayer with the issuance of a writ of a preliminary injunction
against respondent PRC to restrain the latter from enforcing the above-mentioned resolution and to declare the same
unconstitution.
Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the lower court had no jurisdiction to review and
to enjoin the enforcement of its resolution. In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try
the case and enjoined the respondent commission from enforcing and giving effect to Resolution No. 105 which it found to be
unconstitutional.

Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the Court of Appeals a petition for the nullification of
the above Order of the lower court. Said petiton was granted in the Decision of the Court of Appeals promulagated on January 13,
1987, to wit:

WHEREFORE, finding the petition meritorious the same is hereby GRANTED and the other dated October 21,
1986 issued by respondent court is declared null and void. The respondent court is further directed to dismiss
with prejudice Civil Case No. 86-37950 for want of jurisdiction over the subject matter thereof. No cost in this
instance.

SO ORDERED. 2

Hence, this petition.

The Court of Appeals, in deciding that the Regional Trial Court of Manila had no jurisdiction to entertain the case and to enjoin the
enforcement of the Resolution No. 105, stated as its basis its conclusion that the Professional Regulation Commission and the
Regional Trial Court are co-equal bodies. Thus it held —

That the petitioner Professional Regulatory Commission is at least a co-equal body with the Regional Trial Court
is beyond question, and co-equal bodies have no power to control each other or interfere with each other's acts. 3

To strenghten its position, the Court of Appeals relied heavily on National Electrification Administration vs. Mendoza, 4 which
cites Pineda vs. Lantin 5 and Philippine Pacific Fishing, Inc. vs. Luna, 6 where this Court held that a Court of First Instance cannot
interfere with the orders of the Securities and Exchange Commission, the two being co-equal bodies.

After a close scrutiny of the facts and the record of this case,

We rule in favor of the petitioner.

The cases cited by respondent court are not in point. It is glaringly apparent that the reason why this Court ruled that the Court of
First Instance could not interfere with the orders of the Securities and Exchange Commission was that this was so provided for by
the law. In Pineda vs. Lantin, We explained that whenever a party is aggrieved by or disagree with an order or ruling of the
Securities and Exchange Commission, he cannot seek relief from courts of general jurisdiction since under the Rules of Court and
Commonwealth Act No. 83, as amended by Republic Act No. 635, creating and setting forth the powers and functions of the old
Securities and Exchange Commission, his remedy is to go the Supreme Court on a petition for review. Likewise, in Philippine
Pacific Fishing Co., Inc. vs. Luna,it was stressed that if an order of the Securities and Exchange Commission is erroneous, the
appropriate remedy take is first, within the Commission itself, then, to the Supreme Court as mandated in Presidential Decree No.
902-A, the law creating the new Securities and Exchange Commission. Nowhere in the said cases was it held that a Court of First
Instance has no jurisdiction over all other government agencies. On the contrary, the ruling was specifically limited to the Securities
and Exchange Commission.

The respondent court erred when it place the Securities and Exchange Commission and the Professional Regulation Commsision in
the same category. As alraedy mentioned, with respect to the Securities and Exchange Commission, the laws cited explicitly provide
with the procedure that need be taken when one is aggrieved by its order or ruling. Upon the other hand, there is no law providing
for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission. Unlike
Commonwealth Act No. 83 and Presidential Decree No. 902-A, there is no provision in Presidential Decree No. 223, creating the
Professional Regulation Commission, that orders or resolutions of the Commission are appealable either to the Court of Appeals or
to theSupreme Court. Consequently, Civil Case No. 86-37950, which was filed in order to enjoin the enforcement of a resolution of
the respondent Professional Regulation Commission alleged to be unconstitutional, should fall within the general jurisdiction of the
Court of First Instance, now the Regional Trial Court. 7

What is clear from Presidential Decree No. 223 is that the Professional Regulation Commission is attached to the Office of the
President for general direction and coordination. 8 Well settled in our jurisprudence is the view that even acts of the Office of the
President may be reviewed by the Court of First Instance (now the Regional Trial Court). In Medalla vs. Sayo, 9 this rule was
thoroughly propounded on, to wit:

In so far as jurisdiction of the Court below to review by certiorari decisions and/or resolutions of the Civil Service
Commission and of the residential Executive Asssistant is concerned, there should be no question but that the
power of judicial review should be upheld. The following rulings buttress this conclusion:

The objection to a judicial review of a Presidential act arises from a failure to recognize the
most important principle in our system of government, i.e., the separation of powers into three
co-equal departments, the executives, the legislative and the judicial, each supreme within its
own assigned powers and duties. When a presidential act is challenged before the courts of
justice, it is not to be implied therefrom that the Executive is being made subject and
subordinate to the courts. The legality of his acts are under judicial review, not because the
Executive is inferior to the courts, but because the law is above the Chief Executive himself, and
the courts seek only to interpret, apply or implement it (the law). A judicial review of the
President's decision on a case of an employee decided by the Civil Service Board of Appeals
should be viewed in this light and the bringing of the case to the Courts should be governed by
the same principles as govern the jucucial review of all administrative acts of all administrative
officers. 10

Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. II, 11 is another case in point. Here, "the Executive Office"' of the
Department of Education and Culture issued Memorandum Order No. 93 under the authority of then Secretary of Education Juan
Manuel. As in this case, a complaint for injunction was filed with the Court of First Instance of Lanao del Norte because, allegedly,
the enforcement of the circular would impair some contracts already entered into by public school teachers. It was the contention of
petitioner therein that "the Court of First Instance is not empowered to amend, reverse and modify what is otherwise the clear and
explicit provision of the memorandum circular issued by the Executive Office which has the force and effect of law." In resolving the
issue, We held:

... We definitely state that respondent Court lawfully acquired jurisdiction in Civil Case No. II-240 (8) because the
plaintiff therein asked the lower court for relief, in the form of injunction, in defense of a legal right (freedom to
enter into contracts) . . . . .

Hence there is a clear infringement of private respondent's constitutional right to enter into agreements not
contrary to law, which might run the risk of being violated by the threatened implementation of Executive Office
Memorandum Circular No. 93, dated February 5, 1968, which prohibits, with certain exceptions, cashiers and
disbursing officers from honoring special powers of attorney executed by the payee employees. The respondent
Court is not only right but duty bound to take cognizance of cases of this nature wherein a constitutional and
statutory right is allegedly infringed by the administrative action of a government office. Courts of first
Instance have original jurisdiction over all civil actions in which the subject of the litigation is not capable of
pecuniary estimation (Sec. 44, Republic Act 296, as amended). 12 (Emphasis supplied.)

In San Miguel Corporation vs. Avelino, 13 We ruled that a judge of the Court of First Instance has the authority to decide on the
validity of a city tax ordinance even after its validity had been contested before the Secretary of Justice and an opinion thereon had
been rendered.

In view of the foregoing, We find no cogent reason why Resolution No. 105, issued by the respondent Professional Regulation
Commission, should be exempted from the general jurisdiction of the Regional Trial Court.

Respondent PRC, on the other hand, contends that under Section 9, paragraph 3 of B.P. Blg. 129, it is the Court of Appeals which
has jurisdiction over the case. The said law provides:

SEC. 9. Jurisdiction. — The Intermediate Appellate Court shall exercise:

xxx xxx xxx

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional
Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within
the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act,
and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.

The contention is devoid of merit.

In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as provided for in Section 9, paragraph 3 of B.P. Blg.
129, there has to be a final order or ruling which resulted from proceedings wherein the administrative body involved exercised
its quasi-judicial functions. In Black's Law Dictionary, quasi-judicial is defined as a term applied to the action, discretion, etc., of
public administrative officers or bodies required to investigate facts, or ascertain the existence of facts, hold hearings, and draw
conclusions from them, as a basis for their official action, and to exercise discretion of a judicial nature. To expound thereon, quasi-
judicial adjudication would mean a determination of rights, privileges and duties resulting in a decision or order which applies to a
specific situation . 14This does not cover rules and regulations of general applicability issued by the administrative body to
implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a
measure to preserve the integrity of licensure examinations.

The above rule was adhered to in Filipinas Engineering and Machine Shop vs. Ferrer. 15 In this case, the issue presented was
whether or not the Court of First Instance had jurisdiction over a case involving an order of the Commission on Elections awarding
a contract to a private party which originated from an invitation to bid. The said issue came about because under the laws then in
force, final awards, judgments, decisions or orders of the Commission on Elections fall within the exclusive jurisdiction of the
Supreme Court by way of certiorari. Hence, it has been consistently held that "it is the Supreme Court, not the Court of First
Instance, which has exclusive jurisdiction to review on certiorari final decisions, orders, or rulings of the Commission on Elections
relative to the conduct of elections and the enforcement of election laws." 16

As to whether or not the Court of First Instance had jurisdiction in saidcase, We said:
We are however, far from convinced that an order of the COMELEC awarding a contract to a private party, as a
result of its choice among various proposals submitted in response to its invitation to bid comes within the
purview of a "final order" which is exclusively and directly appealable to this court on certiorari. What is
contemplated by the term "final orders, rulings and decisions, of the COMELEC reviewable by certiorari by the
Supreme Court as provided by law are those rendered in actions or proceedings before the COMELEC and taken
cognizance of by the said body in the exercise of its adjudicatory or quasi-judicial powers. (Emphasis supplied.)

xxx xxx xxx

We agree with petitioner's contention that the order of the Commission granting the award to a bidder is not an
order rendered in a legal controversy before it wherein the parties filed their respective pleadings and presented
evidence after which the questioned order was issued; and that this order of the commission was issued pursuant
to its authority to enter into contracts in relation to election purposes. In short, the COMELEC resolution
awarding the contract in favor of Acme was not issued pursuant to its quasi-judicial functions but merely as an
incident of its inherent administrative functions over the conduct of elections, and hence, the said resolution
may not be deemed as a "final order reviewable by certiorari by the Supreme Court. Being non-judicial in
character, no contempt order may be imposed by the COMELEC from said order, and no direct and exclusive
appeal by certiorari to this Tribunal lie from such order. Any question arising from said order may be well taken
in an ordinary civil action before the trial courts. (Emphasis supplied.) 17

One other case that should be mentioned in this regard is Salud vs. Central Bank of the Philippines. 18 Here, petitioner Central
Bank, like respondent in this case, argued that under Section 9, paragraph 3 of B.P. Blg. 129, orders of the Monetary Board are
appealable only to the Intermediate Appellate Court. Thus:

The Central Bank and its Liquidator also postulate, for the very first time, that the Monetary Board is among the
"quasi-judicial ... boards" whose judgments are within the exclusive appellate jurisdiction of the IAC; hence, it is
only said Court, "to the exclusion of the Regional Trial Courts," that may review the Monetary Board's
resolutions. 19

Anent the posture of the Central Bank, We made the following pronouncement:

The contention is utterly devoid of merit. The IAC has no appellate jurisdiction over resolution or orders of the
Monetary Board. No law prescribes any mode of appeal from the Monetary Board to the IAC. 20

In view of the foregoing, We hold that the Regional Trial Court has jurisdiction to entertain Civil Case No. 86-37950 and enjoin the
respondent PRC from enforcing its resolution.

Although We have finally settled the issue of jurisdiction, We find it imperative to decide once and for all the validity of Resolution
No. 105 so as to provide the much awaited relief to those who are and will be affected by it.

Of course, We realize that the questioned resolution was adopted for a commendable purpose which is "to preserve the integrity and
purity of the licensure examinations." However, its good aim cannot be a cloak to conceal its constitutional infirmities. On its face, it
can be readily seen that it is unreasonable in that an examinee cannot even attend any review class, briefing, conference or the like,
or receive any hand-out, review material, or any tip from any school, collge or university, or any review center or the like or any
reviewer, lecturer, instructor, official or employee of any of the aforementioned or similar institutions . ... 21

The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be
barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how the Commission
can manage to have a watchful eye on each and every examinee during the three days before the examination period.

It is an aixiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of
rules and regulations. To be valid, such rules and regulations must be reasonable and fairly adapted to the end in view. If shown to
bear no reasonable relation to the purposes for which they are authorized to be issued, then they must be held to be invalid. 22

Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty guaranteed by the
Constitution. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the
licensure examinations. They cannot be restrained from taking all the lawful steps needed to assure the fulfillment of their ambition
to become public accountants. They have every right to make use of their faculties in attaining success in their endeavors. They
should be allowed to enjoy their freedom to acquire useful knowledge that will promote their personal growth. As defined in a
decision of the United States Supreme Court:

The term "liberty" means more than mere freedom from physical restraint or the bounds of a prison. It means
freedom to go where one may choose and to act in such a manner not inconsistent with the equal rights of others,
as his judgment may dictate for the promotion of his happiness, to pursue such callings and vocations as may be
most suitable to develop his capacities, and giv to them their highest enjoyment. 23

Another evident objection to Resolution No. 105 is that it violates the academic freedom of the schools concerned. Respondent PRC
cannot interfere with the conduct of review that review schools and centers believe would best enable their enrolees to meet the
standards required before becoming a full fledged public accountant. Unless the means or methods of instruction are clearly found
to be inefficient, impractical, or riddled with corruption, review schools and centers may not be stopped from helping out their
students. At this juncture, We call attention to Our pronouncement in Garcia vs. The Faculty Admission Committee, Loyola School
of Theology, 24 regarding academic freedom to wit:

... It would follow then that the school or college itself is possessed of such a right. It decides for itself its aims and
objectives and how best to attain them. It is free from outside coercion or interference save possibly when the
overriding public welfare calls for some restraint. It has a wide sphere of autonomy certainly extending to the
choice of students. This constitutional provision is not to be construed in a niggardly manner or in a grudging
fashion.

Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the licensure examinations
will be eradicated or at least minimized. Making the examinees suffer by depriving them of legitimate means of review or
preparation on those last three precious days-when they should be refreshing themselves with all that they have learned in the
review classes and preparing their mental and psychological make-up for the examination day itself-would be like uprooting the
tree to get ride of a rotten branch. What is needed to be done by the respondent is to find out the source of such leakages and stop it
right there. If corrupt officials or personnel should be terminated from their loss, then so be it. Fixers or swindlers should be flushed
out. Strict guidelines to be observed by examiners should be set up and if violations are committed, then licenses should be
suspended or revoked. These are all within the powers of the respondent commission as provided for in Presidential Decree No.
223. But by all means the right and freedom of the examinees to avail of all legitimate means to prepare for the examinations should
not be curtailed.

In the light of the above, We hereby REVERSE and SET ASIDE, the decision of the Court of Appeals in CA-G.R. SP No. 10591 and
another judgment is hereby rendered declaring Resolution No. 105 null and void and of no force and effect for being
unconstitutional. This decision is immediately executory. No costs.

SO ORDERED.

[G.R. No. 109023. August 12, 1998]

RODOLFO S. DE JESUS, EDELWINA DE PARUNGAO, VENUS M. POZON AND other similarly situated personnel
of the LOCAL WATER UTILITIES ADMINISTRATION (LWUA), petitioners, vs. COMMISSION ON AUDIT
AND LEONARDO L. JAMORALIN in his capacity as COA-LWUA Corporate Auditor respondents.

DECISION
PURISIMA, J.:

The pivotal issue raised in this petition is whether or not the petitioners are entitled to the payment of honoraria which they
were receiving prior to the effectivity of Rep. Act 6758.
Petitioners are employees of the Local Water Utilities Administration (LWUA). Prior to July 1, 1989, they were receiving
honoraria as designated members of the LWUA Board Secretariat and the Pre-Qualification, Bids and Awards Committee.
On July 1, 1989, Republic Act No. 6758 (Rep. Act 6758), entitled An Act Prescribing A Revised Compensation and Position
Classification System in the Government and For Other Purposes, took effect.Section 12 of said law provides for the consolidation of
allowances and additional compensation into standardized salary rates. Certain additional compensations, however, were exempted
from consolidation.
Section 12, Rep. Act 6758, reads -

Sec. 12. - Consolidation of Allowances and Compensation.- Allowances, except for representation and transportation allowances;
clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital
personnel; hazard pay; allowances of foreign services personnel stationed abroad; and such other additional compensation not
otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein
prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents as of July 1, 1989 not
integrated into the standardized salary rates shall continue to be authorized.[1] (Underscoring supplied)

To implement Rep. Act 6758, the Department of Budget and Management (DBM) issued Corporate Compensation Circular
No. 10 (DBM-CCC No. 10), discontinuing without qualification effective November 1, 1989, all allowances and fringe benefits
granted on top of basic salary.
Paragraph 5.6 of DBM-CCC No. 10 provides :

Payment of other allowances/fringe benefits and all other forms of compensation granted on top of basic salary, whether in cash
or in kind, xxx shall be discontinued effective November 1, 1989. Payment made for such allowances/fringe benefits after said
date shall be considered as illegal disbursement of public funds.[2]
Pursuant to the aforesaid Law and Circular, respondent Leonardo Jamoralin, as corporate auditor, disallowed on post audit,
the payment of honoraria to the herein petitioners.
Aggrieved, petitioners appealed to the COA, questioning the validity and enforceability of DBM-CCC No. 10. More specifically,
petitioners contend that DBM-CCC No. 10 is inconsistent with the provisions of Rep. Act 6758 (the law it is supposed to
implement) and, therefore, void. And it is without force and effect because it was not published in the Official Gazette; petitioners
stressed.
In its decision dated January 29, 1993, the COA upheld the validity and effectivity of DBM-CCC No. 10 and sanctioned the
disallowance of petitioners honoraria.[3]
Undaunted, petitioners found their way to this court via the present petition, posing the questions:

(1) Whether or not par. 5.6 of DBM-CCC No. 10 can supplant or negate the express provisions of Sec. 12 of Rep. Act 6758 which it
seeks to implement; and

(2) Whether or not DBM-CCC No. 10 is legally effective despite its lack of publication in the Official Gazette. Petitioners are of
the view that par. 5.6 of DBM-CCC No. 10 prohibiting fringe benefits and allowances effective November 1, 1989, is violative of Sec.
12 of Rep. Act 6758 which authorizes payment of additional compensation not integrated into the standardized salary which
incumbents were enjoying prior to July 1, 1989.
To buttress petitioners stance, the Solicitor General presented a Manifestation and Motion in Lieu of Comment, opining that
Sec. 5.6 of DBM-CCC No. 10 is a nullity for being inconsistent with and repugnant to the very law it is intended to implement. The
Solicitor General theorized, that:

xxx following the settled principle that implementing rules must necessarily adhere to and not depart from the provisions of the
statute it seeks to implement, it is crystal clear that Section 5.6 of DBM-CCC No. 10 is a patent nullity. An implementing rule can
only be declared valid if it is in harmony with the provisions of the legislative act and for the sole purpose of carrying into effect
its general provisions. When an implementing rule is inconsistent or repugnant to the provisions of the statute it seeks to
interpret, the mandate of the statute must prevail and must be followed.[4]

Respondent COA, on the other hand, pointed out that to allow honoraria without statutory, presidential or DBM authority, as
in this case, would run counter to Sec. 8, Article IX-B of the Constitution which proscribes payment of additional or double
compensation, unless specifically authorized by law. Therefore, the grant of honoraria or like allowances requires a specific legal or
statutory authority. And DBM-CCC No. 10 need not be published for it is merely an interpretative regulation of a law already
published[5]; COA concluded.
In his Motion for Leave to intervene, the DBM Secretary asserted that the honoraria in question are considered included in the
basic salary, for the reason that they are not listed as exceptions under Sec. 12 of Rep. Act 6758.
Before resolving the other issue - whether or not Paragraph 5.6 of DBM-CCC No. 10 can supplant or negate the pertinent
provisions of Rep. Act 6758 which it seeks to implement, we have to tackle first the other question whether or not DBM-CCC No. 10
has legal force and effect notwithstanding the absence of publication thereof in the Official Gazette. This should take precedence
because should we rule that publication in the Official Gazette or in a newspaper of general circulation in the Philippines[6] is sine
qua non to the effectiveness or enforceability of DBM-CCC No. 10, resolution of the first issue posited by petitioner would not be
necessary.
The applicable provision of law requiring publication in the Official Gazette is found in Article 2 of the New Civil Code of the
Philippines, which reads:

Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is
otherwise provided. This Code shall take effect one year after such publication.

In Tanada v. Tuvera, 146 SCRA 453, 454, this Court succinctly construed the aforecited provision of law in point, thus:

We hold therefore that all statutes, including those of local application and private laws, shall be published as a condition for
their effectivity, which shall begin fifteen days after publication unless a different effectivity, which shall begin fifteen days after
publication unless a different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative
powers whenever the same are validly delegated by the legislature or, at present, deirectly conferred by the Constitution.
Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant to a
valid delegation.

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

Accordingly, even the charter of a city must be published notwithstanding that it applies to only a portion of the national
territory and directly affects only the inhabitants of that place. All presidential decrees must be published, including even, say,
those naming a public place after a favored individual or exempting him from certain prohibitions or requirements. The circulars
issued by the Monetary Board must be published if they are meant not merely to interpret but to fill in the details of the Central
Bank Act which that body is supposed to enforce. (Italics ours)

The same ruling was reiterated in the case of Philippine Association of Service Exporters, Inc. vs. Torres, 212 SCRA 299 [1992].
On the need for publication of subject DBM-CCC No. 10, we rule in the affirmative. Following the doctrine enunciated in
Tanada, publication in the Official Gazette or in a newspaper of general circulation in the Philippines is required since DBM-CCC
No. 10 is in the nature of an administrative circular the purpose of which is to enforce or implement an existing law. Stated
differently, to be effective and enforceable, DBM-CCC No. 10 must go through the requisite publication in the Official Gazette or in
a newspaper of general circulation in the Philippines.
In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, which completely disallows payment of
allowances and other additional compensation to government officials and employees, starting November 1, 1989, is not a mere
interpretative or internal regulation. It is something more than that. And why not, when it tends to deprive government workers of
their allowances and additional compensation sorely needed to keep body and soul together. At the very least, before the said
circular under attack may be permitted to substantially reduce their income, the government officials and employees concerned
should be apprised and alerted by the publication of subject circular in the Official Gazette or in a newspaper of general circulation
in the Philippines - to the end that they be given amplest opportunity to voice out whatever opposition they may have, and to
ventilate their stance on the matter. This approach is more in keeping with democratic precepts and rudiments of fairness and
transparency.
In light of the foregoing disquisition on the ineffectiveness of DBM-CCC No. 10 due to its non-publication in the Official
Gazette or in a newspaper of general circulation in the country, as required by law, resolution of the other issue at bar is
unnecessary.
WHEREFORE, the Petition is hereby GRANTED, the assailed Decision of respondent Commission on Audit is SET ASIDE,
and respondents are ordered to pass on audit the honoraria of petitioners. No pronouncement as to costs.
SO ORDERED.

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