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Administrative Agency
An administrative body/agency is any government authority, other than a court and a legislature, that affects
the state and its citizens through rule-making, adjudication, and implementation. Its functions are primarily
executive but it exercises some form of legislative and judicial powers.
In the Administrative Code, an agency is defined to include:
 any government unit authorized by law to make rules, issue licenses, grant rights or privileges, and
adjudicate cases.[1]
 research institutions with respect to licensing functions.[1]
 government corporations with respect to functions regulating private right, privileges, occupation or
business.[1]
 officials in the exercise of disciplinary power as provided by law.[1]

Nature of Administrative Agency

An administrative agency is a general term that covers any government authority that can act as:

 an executive body that serves public interests, which is the reason (rationale) for its existence; it shall
not represent any private interests.
 a quasi-legislative body that establishes and prescribes rules and regulations to implement the law; it
shall not have absolute discretion to determine or change the law.
 a quasi-judicial body that conducts hearings and decides on cases; it shall not have inherent powers of
a pure judicial court, and its proceedings shall not be bound by all the rules applicable to proceedings in
court.

The administrative agencies act as a mechanism that provides expertise and organizational capability for the
three branches of government.

An administrative agency may be created by

 executive order; as in EO 100, s. 1986 that created PIA.

 legislation; as in RA 10844 that created DICT.
 constitutional provision; as in Art. 9 that created CSC, COMELEC and COA.

An agency is wholly within the power of the law that created it, that prescribes its powers and functions. It
may also be abolished in the same manner it is created if such abolition is justified by the law.
Types of Administrative Agency
The administrative agencies are classified into:

 Agencies set up to function in situations wherein the government is offering some gratuity, grant, or
special priviledge; such as PVAO, NARRA, etc.
 Agencies set up to function in situations wherein the government is seeking to carry on certain
government functions; such as BIR, BI, CSC, COMELEC, BSP, etc.
 Agencies set up to function in situations wherein the government is performing some business service
for the public; such as PHILPOST, PNR, MWSS, CAAP, CAB, etc.
 Agencies set up to function in situations wherein the government is seeking to regulate industry,
business, or private individuals; such as FDA, PhilFIDA, SEC, MTRCB, PRC, IPOPHL, etc.
 Agencies set up to function in situations wherein the government is seeking to adjust individual
controversies because of some strong social policy involved; such as BALA, BLR, BWSC, ECC, PCW,
etc.

Powers and Functions of Administrative Agency

The powers and functions of administrative agency are defined in the Constitution, the laws or both.

The powers of an administrative agency are:

 Executive power - the authority to implement or carry out the policy set out in the law or statute.
 Quasi-legislative power - the authority to adopt rules and regulations intended to better carry out the
policy; the function of rule-making.
 Quasi-judicial power - the authority to hear and decide on cases in the performance of duty and to
enforce its decisions according to the law; the function of adjudication.
 Incidental power - the authority necessary to effectively carry out the above express powers; the use of
enabling, directing, dispensing, examining and prosecuting functions. It is often referred to as the
determinative power.

The scope of such powers are:

 expressly granted by the legislation and those necessarily implied in the exercise thereof.[2]
 deprived of quasi-judicial powers unless it is expressly granted.[3]
 liberally interpreted by legislation to enable the accomplishment of assigned duties in accordance with
the legislative purpose.[4]
It is considered unconstitutional for an administrative agency to act outside of its scope.

Administrative Rule-Making
main article: Administrative Rule-Making
Rule-making is the function of administrative agencies to promulgate rules and regulations to carry out the
general provisions of a law into effect. It may also be referred to as subordinate legislation.
An administrative agency must promulgate administrative/implementing rules and regulations in harmony
with the law and not in violation of the authority conferred on the agency.[5]
An administrative agency shall publish or circulate notices of proposed rules and regulations as well as provide
an opportunity to interested parties to submit their views regarding the adoption of any rule.[6]
The promulgation of implementing rules and regulations may be interrupted 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.[7]

The implementing rules and regulations are also subject to amendment or repeal by the agencies that
promulgated them, or by the legislature.

Administrative Adjudication
main article: Administrative Adjudication
Administrative adjudication is the function of administrative agencies to conduct hearings and decide on
cases in the duty of carrying out a law.

An administrative agency must have jurisdiction to give validity to its determinations/decisions as a quasi
judicial body or tribunal. Such jurisdiction is limited and dependent entirely on the source of its authority,
which is either from the statutes or the Constitution.

An administrative agency is normally granted the authority to promulgate its own proceeding (rules of
procedures), provided they do not violate fundamental rights and the Constitution. Such rules of procedures
shall remain effective unless disapproved by the Supreme Court.[8]
An administrative proceedings is not required to adapt formal court rules that govern purely judicial
proceedings. However, it is essential for any proceeding to observe due process.

The decision rendered by an administrative agency in a case shall be in writing and shall clearly state the facts
and legal basis. The agency shall decide each case within 30 days following its submission.
The decision of the agency is final and executory after the receipt of copy of such decision by the party who
lost the case. However, an administrative appeal or judicial review may be perfected before the finality of the
decision.[9]
An administrative agency shall publish and make available for public inspection all decisions or final orders in
the adjudication of contested cases.[10]

Rate-Fixing
main article: Rate-Fixing Power
Rate-fixing is the function of administrative agency to fix or control the charges (rates, wages and prices)
exalted to public utility services.
The rate-fixing by an administrative agency must be accompanied with notice and hearing, specially if its is
quasi-judicial in nature.[11] It must also be reasonable and just in the absence of an express requirement for
standard by law.
The proposed rates by the agency shall be valid after their publication in a newspaper of general circulation at
least 2 weeks before the first hearing thereon.[12]

Determinative Functions
The incidental or determinative functions of administrative agency are:

 Licensing - the function to permit or allow something which the law undertakes to regulate. It is simply
the issuance of license. It is also referred to as the enabling function.
 Directing - the function to determine, assess, valuate and classify for corrective purposes and
compliance with the law.
 Dispensing - the function to exempt one from or relax a general prohibition, or to relieve one from an
affirmative duty.
 Examining - the function to require the attendance of witnesses or the production of books, papers,
documents and other pertinent data, upon request of any party before or during a hearing.[13] It is
simply the issuance of subpoena. It is also referred to as the 'investigatory function'.
 Prosecuting - the power to apply compulsion or force against person or property to effectuate a legal
purpose without a judicial warrant to authorize such action. It is more often referred to as the 'summary
function'.
Citations
General References:
Citations:
1. ↑ 1.0 1.1 1.2 1.3 Book VII of Administrative Code, Sec. 1(1)
2. ↑ Makati Stock Exchange, Inc. v. SEC and Manila Stock Exchange, G.R. No. L-23004 (1965)
3. ↑ Philippine Shell Petroleum Corporation v. The Oil Industry Commission and Yap; G.R. No. L-41315
(1986)
4. ↑ Solid Homes, Inc. v. Payawal; G.R. 84811 (1989)
5. ↑ Bacolod-Murcia, Mining Co., Inc. v. Central Bank of the Philippines; G.R. No. L-12610 (1963)
6. ↑ Book VII of Administrative Code, Sec. 9 (1)
7. ↑ Bacolod-Murcia, Mining Co., Inc. v. Central Bank of the Philippines, G.R. No. L-12610 (1995)
8. ↑ Philippine Constitution, Article VIII Sec. 5 (5)
9. ↑ Book VII of Administrative Code, Sec. 15
10. ↑ Book VII of Administrative Code, Sec. 16
11. ↑ PHILCOMSAT v. Alcuaz; G.R. No. 84818 (1989)
12. ↑ Book VII of Administrative Code, Sec. 9(2)
13. ↑ Book VII of Administrative Code, Sec. 13