CONSTITUTIONAL LAW II | ATTY.

EDWIN BELLEN

TOPIC:
CASE:

EQUALPROTECTION
CENTRALBANKEMPLOYEESASSOCIATION,INC.VSBANKO
SENTRALNGPILIPINAS446SCRA299(2004)
GRNo148208
Puno,J.

FACTS:
OnJuly3,1993,RA7653abolishedtheoldCentralBankofthe
Philippines(CB)andcreatedanewBangkoSentralngPilipinas(BSP).Almosteight
yearsafter,theCentralBank(nowBSP)EmployeesAssociation,Inc.filedapetitionfor
prohibitionagainsttheBSPandtheOfficeofthePresident,whichweresoughttobe
restrainedfromfurtherimplementingthelastprovisoinSection15(c),ArticleIIofRA
No.7653,onthegroundthatitwasunconstitutional.
Theprovisionallegedlydistinguishedbetweentwoclassesofemployeesinthe
BSP:(1)theofficerswhowereexemptedfromthecoverageoftheSalaryStandardization
Law(SSL);and(2)therankandfile(SalaryGrade[SG]19andbelow)whowerenot
exemptedfromthecoverageoftheSSL.Itwasarguedthattheclassificationwasnot
reasonable,butarbitraryandcapricious,andviolatedtheequalprotectionclauseofthe
Constitution.TheprovisowasallegedlynotgermanetothepurposesofSection15(c)of
ArticleIIofRA7653,themostimportantofwhichwastoestablishprofessionalismand
excellenceatalllevelsintheBSP.
Ontheotherhand,theBSPcontendedthattheprovisioncouldstandthe
constitutionaltest,provideditwasconstruedinharmonywithotherpartsofthesamelaw
thatprovidedfor,amongothers,thefiscalandadministrativeautonomyofBSP;and
withthemandateoftheMonetaryBoardtoestablishprofessionalismandexcellenceat
alllevelsinaccordancewithsoundprinciplesofmanagement.Onbehalfofthe
respondentexecutivesecretary,theOfficeoftheSolicitorGeneralarguedthatthe
classificationwasbasedonactualandrealdifferentiation.
ISSUE:ThesoleissuewaswhetherthelastparagraphofSection15(c)ofArticleIIof
RA7653violatedtheconstitutionalmandateofequalprotectionofthelaws.
RULING:TheCourtheldthatwhilethequestionedprovisowasnot,onitsfaceandby

itself,constitutionallyinfirmundertheequalprotectionclause,subsequentlaws
amendingthechartersofsevenothergovernmentalfinancialinstitutions(GFIs)had
workedadiscriminatoryeffectupontherankandfileemployeesoftheBSP.Hence,the
continuedoperationoftheprovisionviolatedtheequalprotectionguaranteeofthe
Constitution.
Theprovisoisunconstitutionalasitoperateonthesalarygradeortheofficer
employeestatus,itdistinguishesbetweeneconomicclassandstatuswiththehigher
salarygraderecipientsareofgreaterbenefitabovethelawthanthoseofmandatedbythe
SalaryStandardizationAct.OfficersoftheBSPreceivehigherwagesthatthoseofrank

CONSTITUTIONAL LAW II | ATTY. EDWIN BELLEN

andfileemployeesbecausetheformerarenotcoveredbythesalarystandardizationact
asprovidedbytheproviso.
RelativeConstitutionality
JusticeReynatoS.Puno,explainedthatastatutethatwasvalidatonetimecouldbecome
voidatanothertimebecauseofalteredcircumstancesorchangedconditions.Theproviso
inquestionwassubjectedtoatwotieredscrutinytodetermineitsconstitutionality:the
rationalbasistestandthestrictscrutinytest.
ThemajorityconcededthatRA7653hadstartedasavalidmeasure.Itsclassification
betweentherankandfileandtheofficersoftheBSPwasfoundreasonabledueto
substantialdistinctionsorrealdifferencesbetweenthetwoclasses.Particularly,the
exemptionofofficers(SG20andabove)fromtheSSLwasintendedtoaddressthe
BSPslackofcompetitivenessintermsofattractingcompetentofficersandexecutives,
nottodiscriminateagainsttherankandfile.Thus,theprovisionpassedtherational
basistest.
Itwasstressedthat,undermostcircumstances,theCourtwouldexercisejudicialrestraint
indecidingquestionsofconstitutionalityandwouldbasejudicialscrutinyontherational
basistest.Itwasequallystressed,though,thatsuchscrutinyoughttobestricterifand
whenthechallengetothestatuteispremisedonthedenialofafundamentalright,orthe
perpetuationofprejudiceagainstpersonsfavoredbytheConstitutionwithspecial
protectionxxx.Aweakandwatereddownviewwouldcallfortheabdicationofthis
CourtssolemndutytostrikedownanylawrepugnanttotheConstitutionandtherightsit
enshrines.
JusticeConchitaCarpioMoralesDissent
Shesaid,theponenciasconclusion:thatbeinganemployeeofagovernmentownedand
controlledcorporation(GOCC)orofagovernmentfinancialinstitution(GFI)wasa
reasonableandsufficientbasisforexemptionfromtheSalaryStandardizationLaw.The
Courtsconclusionalsoinvolvedanevaluationofthewisdomofthelawanda
preemptionofthecongressionalpowerofappropriation.Moreover,therulingwould
resultinanincrease,ratherthanareduction,intheinequalitywithinthegovernment
service.
Proceedingfromthebasicframeworkforequalprotectionanalysisandthe
presumptionofconstitutionalityaccordedastatute,JusticeMoralesinquiredintothe
standardsusedtomeasurethevalidityofRA7653.Theapproachesshefoundtohave
evolvedfromAmericancaselawwere(1)thetraditionaldeferentialrationalbasistest,

(2)theintermediatescrutinytest, and(3)themoredemandingstrictscrutinytest,
whichwasemployedintheponencia.Thethirdtestgenerallyappliedtoclassifications

consideredtobesuspectbecauseofpossibleviolationsofcivilrights andstatutes
infringingfundamental,constitutionallyprotectedrights.

CONSTITUTIONAL LAW II | ATTY. EDWIN BELLEN

Theponenciasimultaneouslymadeuseofboththerationalbasisandthestrictscrutiny
tests.Inassessingthevalidityoftheclassificationbetweenofficersandrankandfile
employeesinSection15(c)ofTheNewCentralBankAct,therationalbasistestwas
applied.Thestrictscrutinytestwasusedinevaluatingthedistinctionbetweentherank
andfileemployeesoftheBSP;andthoseoftheLBP,DBP,SSSandGSIS.
Thefirsttierortherationalrelationshiporrationalbasistestmandatescourtstouphold
aclassificationifitbearsarationalrelationshiptoanacceptedgovernmentalend.In
otherwords,itmustberationallyrelatedtoalegitimatestateinterest.Tobe
reasonable,suchclassificationmustbe(1)basedonsubstantialdistinctionsbasedonreal
differences;(2)germanetothepurposesofthelaw;(3)notlimitedtoexistingconditions
only;and(4)equallyapplicabletoallmembersofthesameclass.
ThesecondtierorthestrictscrutinytestrequirestheCourttoaskthegovernmentto
showacompellingoroverridingendtojustify(1)thelimitationonfundamentalrightsor
(2)theimplicationofsuspectclasses.Whereastatutoryclassificationimpingesupona
fundamentalrightorburdensasuspectclass,suchclassificationissubjectedtostrict
scrutiny.Itwillbeupheldonlyifitisshowntobesuitablytailoredtoservea
compellingstateinterest.
Underthethirdtierortheintensifiedmeanstest,theCourtshouldacceptthelegislative
end,butcloselyscrutinizeitsrelationshiptotheclassificationmade.Inotherwords,such
classificationsmustbesubstantiallyrelatedtoasufficientlyimportantgovernmental
interest.