[G.R. No. 106296.
July 5, 1996] On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment acquitting petitioner of the
ISABELO T. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS and the PEOPLE OF THE
PHILIPPINES, respondents.*
DECISION
MENDOZA, J.:
This is a petition to review the decision of the Court of Appeals dated July 15, 1992, the dispositive
portion of which reads:
WHEREFORE, the present petition is partially granted. The questioned Orders and writs directing (1)
reinstatement of respondent Isabelo T. Crisostomo to the position of President of the Polytechnic University of
the Philippines, and (2) payment of salaries and benefits which said respondent failed to receive during his
suspension insofar as such payment includes those accruing after the abolition of the PCC and its transfer to
the PUP, are hereby set aside. Accordingly, further proceedings consistent with this decision may be taken by
the court a quo to determine the correct amounts due and payable to said respondent by the said university.
The background of this case is as follows:
Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce (PCC), having
been appointed to that position by the President of the Philippines on July 17, 1974.
During his incumbency as president of the PCC, two administrative cases were filed against petitioner
for illegal use of government vehicles, misappropriation of construction materials belonging to the college,
oppression and harassment, grave misconduct, nepotism and dishonesty. The administrative cases, which
were filed with the Office of the President, were subsequently referred to the Office of the Solicitor General for
investigation.
Charges of violations of R.A. No. 3019, 3 (e) and R.A. No. 992, 20-21 and R.A. No. 733, 14 were
likewise filed against him with the Office of Tanodbayan.
On June 14, 1976, three (3) informations for violation of Sec. 3 (e) of the Anti-Graft and Corrupt
Practices Act (R.A. No. 3019, as amended) were filed against him. The informations alleged that he
appropriated for himself a bahay kubo, which was intended for the College, and construction materials worth
P250,000.00, more or less. Petitioner was also accused of using a driver of the College as his personal and
family driver.[1]
On October 22, 1976, petitioner was preventively suspended from office pursuant to R.A. No. 3019, 13,
as amended. In his place Dr. Pablo T. Mateo, Jr. was designated as officer-in-charge on November 10, 1976,
and then as Acting President on May 13, 1977.
On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos, CONVERTING
THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS
OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR
OFFERINGS.
Mateo continued as the head of the new University. On April 3, 1979, he was appointed Acting
President and on March 28, 1980, as President for a term of six (6) years.
charges against him. The dispositive portion of the decision reads:
WHEREFORE, the Court finds the accused, Isabelo T. Crisostomo, not guilty of the violations charged in all
these three cases and hereby acquits him therefrom, with costs de oficio. The bail bonds filed by said accused
for his provisional liberty are hereby cancelled and released.
Pursuant to the provisions of Section 13, R.A. No. 3019, as amended, otherwise known as The Anti-Graft and
Corrupt Practices Act, and under which the accused has been suspended by this Court in an Order dated
October 22, 1976, said accused is hereby ordered reinstated to the position of President of the Philippine
College of Commerce, now known as the Polytechnic University of the Philippines, from which he has been
suspended. By virtue of said reinstatement, he is entitled to receive the salaries and other benefits which he
failed to receive during suspension, unless in the meantime administrative proceedings have been filed
against him.
The bail bonds filed by the accused for his provisional liberty in these cases are hereby cancelled and
released.
SO ORDERED.
The cases filed before the Tanodbayan (now the Ombudsman) were likewise dismissed on August 8,
1991 on the ground that they had become moot and academic. On the other hand, the administrative cases
were dismissed for failure of the complainants to prosecute them.
On February 12, 1992, petitioner filed with the Regional Trial Court a motion for execution of the
judgment, particularly the part ordering his reinstatement to the position of president of the PUP and the
payment of his salaries and other benefits during the period of suspension.
The motion was granted and a partial writ of execution was issued by the trial court on March 6,
1992. On March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor as acting
president of the PUP, following the expiration of the term of office of Dr. Nemesio Prudente, who had
succeeded Dr. Mateo.Petitioner was one of the five nominees considered by the President of the Philippines
for the position.
On April 24, 1992, the Regional Trial Court, through respondent Judge Teresita Dy-Liaco Flores, issued
another order, reiterating her earlier order for the reinstatement of petitioner to the position of PUP president. A
writ of execution, ordering the sheriff to implement the order of reinstatement, was issued.
In his return dated April 28, 1992, the sheriff stated that he had executed the writ by installing petitioner
as President of the PUP, although Dr. Gellor did not vacate the office as he wanted to consult with the
President of the Philippines first. This led to a contempt citation against Dr. Gellor. A hearing was set on May
7, 1992. On May 5, 1992, petitioner also moved to cite Department of Education, Culture and Sports Secretary
Isidro Cario in contempt of court. Petitioner assumed the office of president of the PUP.
On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and prohibition
(CA G.R. No. 27931), assailing the two orders and the writs of execution issued by the trial court. It also asked
for a temporary restraining order.
On June 25, 1992, the Court of Appeals issued a temporary restraining order, enjoining petitioner to
cease and desist from acting as president of the PUP pursuant to the reinstatement orders of the trial court,
and enjoining further proceedings in Criminal Cases Nos. VI-2329-2331.
 On July 15, 1992, the Seventh Division of the Court of Appeals rendered a decision, [2] the dispositive
portion of which is set forth at the beginning of this opinion. Said decision set aside the orders and writ of
reinstatement issued by the trial court. The payment of salaries and benefits to petitioner accruing after the
conversion of the PCC to the PUP was disallowed. Recovery of salaries and benefits was limited to those
accruing from the time of petitioners suspension until the conversion of the PCC to the PUP. The case was
remanded to the trial court for a determination of the amounts due and payable to petitioner.
Hence this petition. Petitioner argues that P.D. No. 1341, which converted the PCC into the PUP, did
not abolish the PCC. He contends that if the law had intended the PCC to lose its existence, it would have
specified that the PCC was being abolished rather than converted and that if the PUP was intended to be a
new institution, the law would have said it was being created. Petitioner claims that the PUP is merely a
continuation of the existence of the PCC, and, hence, he could be reinstated to his former position as
president.
In part the contention is well taken, but, as will presently be explained, reinstatement is no longer
possible because of the promulgation of P.D. No. 1437 by the President of the Philippines on June 10, 1978.
P.D. No. 1341 did not abolish, but only changed, the former Philippine College of Commerce into what
is now the Polytechnic University of the Philippines, in the same way that earlier in 1952, R.A. No. 778 had
converted what was then the Philippine School of Commerce into the Philippine College of Commerce. What
took place was a change in academic status of the educational institution, not in its corporate life. Hence the
change in its name, the expansion of its curricular offerings, and the changes in its structure and organization.
As petitioner correctly points out, when the purpose is to abolish a department or an office or an
organization and to replace it with another one, the lawmaking authority says so. He cites the following
examples:
E.O. No. 709:
1. There is hereby created a Ministry of Trade and Industry, hereinafter referred to as the Ministry. The existing
Ministry of Trade established pursuant to Presidential Decree No. 721 as amended, and the existing Ministry
established pursuant to Presidential Decree No. 488 as amended, are abolished together with their services,
bureaus and similar agencies, regional offices, and all other entities under their supervision and control. . . .
E.O. No. 710:
1. There is hereby created a Ministry of Public Works and Highways, hereinafter referred to as the
Ministry. The existing Ministry of Public Works established pursuant to Executive Order No. 546 as amended,
and the existing Ministry of Public Highways established pursuant to Presidential Decree No. 458 as
amended, are abolished together with their services, bureaus and similar agencies, regional offices, and all
other entities within their supervision and control. . . .
R.A. No. 6975:
13. Creation and Composition. - A National Police Commission, hereinafter referred to as the Commission, is
hereby created for the purpose of effectively discharging the functions prescribed in the Constitution and
provided in this Act. The Commission shall be a collegial body within the Department. It shall be composed of
a Chairman and four (4) regular commissioners, one (1) of whom shall be designated as Vice-Chairman by the
President. The Secretary of the Department shall be the ex-officio Chairman of the Commission, while the
Vice-Chairman shall act as the executive officer of the Commission.
xxx xxx xxx
90. Status of Present NAPOLCOM, PC-INP. - Upon the effectivity of this Act, the present National Police
Commission, and the Philippine Constabulary-Integrated National Police shall cease to exist. The Philippine
Constabulary, which is the nucleus of the integrated Philippine Constabulary-Integrated National Police, shall
cease to be a major service of the Armed Forces of the Philippines. The Integrated National Police, which is
the civilian component of the Philippine Constabulary-Integrated National Police, shall cease to be the national
police force and in lieu thereof, a new police force shall be established and constituted pursuant to this Act.
In contrast, P.D. No. 1341, provides:
1. The present Philippine College of Commerce is hereby converted into a university to be known as the
Polytechnic University of the Philippines, hereinafter referred to in this Decree as the University.
As already noted, R.A. No. 778 earlier provided:
1. The present Philippine School of Commerce, located in the City of Manila, Philippines, is hereby granted full
college status and converted into the Philippine College of Commerce, which will offer not only its present one-
year and two-year vocational commercial curricula, the latter leading to the titles of Associate in Business
Education and/or Associate in Commerce, but also four-year courses leading to the degrees of Bachelor of
Science in Business in Education and Bachelor of Science in Commerce, and five-year courses leading to the
degrees of Master of Arts in Business Education and Master of Arts in Commerce, respectively.
The appellate court ruled, however, that the PUP and the PCC are not one and the same institution but
two different entities and that since petitioner Crisostomos term was coterminous with the legal existence of
the PCC, petitioners term expired upon the abolition of the PCC. In reaching this conclusion, the Court of
Appeals took into account the following:
a) After respondent Crisostomos suspension, P.D. No. 1341 (entitled CONVERTING THE PHILIPPINE
COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES,
ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS)
was issued on April 1, 1978.This decree explicitly provides that PUPs objectives and purposes cover not only
PCCs offering of programs in the field of commerce and business administration but also programs in other
polytechnic areas and in other fields such as agriculture, arts and trades and fisheries . . . (section 2). Being a
university, PUP was conceived as a bigger institution absorbing, merging and integrating the entire PCC and
other national schools as may be transferred to this new state university.
b) The manner of selection and appointment of the university head is substantially different from that provided
by the PCC Charter. The PUP President shall be appointed by the President of the Philippines upon
recommendation of the Secretary of Education and Culture after consultation with the University Board of
Regents (section 4, P.D. 1341). The President of PCC, on the other hand, was appointed by the President of
the Philippines upon recommendation of the Board of Trustees (Section 4, R.A. 778).
c) The composition of the new universitys Board of Regents is likewise different from that of the PCC Board of
Trustees (which included the chairman of the Senate Committee on Education and the chairman of the House
Committee on Education, the President of the PCC Alumni Association as well as the President of the
Chamber of Commerce of the Philippines). Whereas, among others, the NEDA Director-General, the
Secretary of Industry and the Secretary of Labor are members of the PUP Board of Regents. (Section 6, P.D.
1341).
d) The decree moreover transferred to the new university all the properties including equipment and facilities:
. . . owned by the Philippine College of Commerce and such other National Schools as may be integrated . . .
including theirobligations and appropriations . . . (Sec. 12; Italics supplied).[3]
 But these are hardly indicia of an intent to abolish an existing institution and to create a new one. New accruing after March 28, 1980 when petitioner Crisostomos term was terminated. Further proceedings in
course offerings can be added to the curriculum of a school without affecting its legal existence. Nor will accordance with this decision may be taken by the trial court to determine the amount due and payable to
changes in its existing structure and organization bring about its abolition and the creation of a new one. Only petitioner by the university up to March 28, 1980.
an express declaration to that effect by the lawmaking authority will.

SO ORDERED.
The Court of Appeals also cites the provision of P.D. No. 1341 as allegedly implying the abolition of the
PCC and the creation of a new one the PUP in its stead:
G.R. No. L-57883 March 12, 1982

12. All parcels of land, buildings, equipment and facilities owned by the Philippine College of Commerce and
GUALBERTO J. DE LA LLANA Presiding Judge, Branch II of the City Court of Olongapo, ESTANISLAO
such other national schools as may be integrated by virtue of this decree, including their obligations and
L. CESA, JR., FIDELA Y. VARGAS, BENJAMIN C. ESCOLANGO, JUANITO C. ATIENZA, MANUEL REYES
appropriations thereof, shall stand transferred to the Polytechnic University of the Philippines, provided,
ROSAPAPAN, JR., VIRGILIO E. ACIERTO, and PORFIRIO AGUILLON AGUILA, petitioners,
however, that said national schools shall continue to receive their corresponding shares from the special
vs.
education fund of the municipal/provincial/city government concerned as are now enjoyed by them in
MANUEL ALBA, Minister of Budget, FRANCISCO TANTUICO, Chairman, Commission on Audit, and
accordance with existing laws and/or decrees.
RICARDO PUNO, Minister of Justice, Respondents.

The law does not state that the lands, buildings and equipment owned by the PCC were being
transferred to the PUP but only that they stand transferred to it. Stand transferred simply means, for example,
that lands transferred to the PCC were to be understood as transferred to the PUP as the new name of the
institution. FERNANDO, C.J.:

But the reinstatement of petitioner to the position of president of the PUP could not be ordered by the
trial court because on June 10, 1978, P.D. No. 1437 had been promulgated fixing the term of office of
presidents of state universities and colleges at six (6) years, renewable for another term of six (6) years, and
authorizing the President of the Philippines to terminate the terms of incumbents who were not
reappointed. P.D. No. 1437 provides:
6. The head of the university or college shall be known as the President of the university or college. He shall
be qualified for the position and appointed for a term of six (6) years by the President of the Philippines upon
recommendation of the Secretary of Education and Culture after consulting with the Board which may be
renewed for another term upon recommendation of the Secretary of Education and Culture after consulting the
Board. In case of vacancy by reason of death, absence or resignation, the Secretary of Education and Culture
shall have the authority to designate an officer in charge of the college or university pending the appointment
of the President.
This Court, pursuant to its grave responsibility of passing upon the validity of any executive or legislative act in
an appropriate cases, has to resolve the crucial issue of the constitutionality of Batas Pambansa Blg. 129,
entitled "An act reorganizing the Judiciary, Appropriating Funds Therefor and for Other Purposes." The task of
judicial review, aptly characterized as exacting and delicate, is never more so than when a conceded
legislative power, that of judicial reorganization, 1 may possibly collide with the time-honored principle of the
independence of the judiciary 2as protected and safeguarded by this constitutional provision: "The Members of
the Supreme Court and judges of inferior courts shall hold office during good behavior until they reach the age
of seventy years or become incapacitated to discharge the duties of their office. The Supreme Court shall have
the power to discipline judges of inferior courts and, by a vote of at least eight Members, order their
dismissal." 3 For the assailed legislation mandates that Justices and judges of inferior courts from the Court of
Appeals to municipal circuit courts, except the occupants of the Sandiganbayan and the Court of Tax Appeals,
unless appointed to the inferior courts established by such Act, would be considered separated from the
judiciary. It is the termination of their incumbency that for petitioners justifies a suit of this character, it being
alleged that thereby the security of tenure provision of the Constitution has been ignored and disregarded,

The powers and duties of the President of the university or college, in addition to those specifically provided
That is the fundamental issue raised in this proceeding, erroneously entitled Petition for Declaratory Relief
for in this Decree shall be those usually pertaining to the office of the president of a university or college.
and/or for Prohibition 4 considered by this Court as an action for prohibited petition, seeking to enjoin
respondent Minister of the Budget, respondent Chairman of the Commission on Audit, and respondent
7. The incumbent president of a chartered state college or university whose term may be terminated according Minister of Justice from taking any action implementing Batas Pambansa Blg. 129. Petitioners 5 sought to
to this Decree, shall be entitled to full retirement benefits: provided that he has served the government for at bolster their claim by imputing lack of good faith in its enactment and characterizing as an undue delegation of
least twenty (20) years; and provided, further that in case the number of years served is less than 20 years, he legislative power to the President his authority to fix the compensation and allowances of the Justices and
shall be entitled to one month pay for every year of service. judges thereafter appointed and the determination of the date when the reorganization shall be deemed
completed. In the very comprehensive and scholarly Answer of Solicitor General Estelito P. Mendoza, 6 it was
pointed out that there is no valid justification for the attack on the constitutionality of this statute, it being a
In this case, Dr. Pablo T. Mateo Jr., who had been acting president of the university since April 3, 1979,
legitimate exercise of the power vested in the Batasang Pambansa to reorganize the judiciary, the allegations
was appointed president of PUP for a term of six (6) years on March 28, 1980, with the result that petitioners
of absence of good faith as well as the attack on the independence of the judiciary being unwarranted and
term was cut short. In accordance with 7 of the law, therefore, petitioner became entitled only to retirement
devoid of any support in law. A Supplemental Answer was likewise filed on October 8, 1981, followed by a
benefits or the payment of separation pay. Petitioner must have recognized this fact, that is why in 1992 he
Reply of petitioners on October 13. After the hearing in the morning and afternoon of October 15, in which not
asked then President Aquino to consider him for appointment to the same position after it had become vacant
only petitioners and respondents were heard through counsel but also the amici curiae, 7 and thereafter
in consequence of the retirement of Dr. Prudente.
submission of the minutes of the proceeding on the debate on Batas Pambansa Blg. 129, this petition was
deemed submitted for decision.
WHEREFORE, the decision of the Court of Appeals is MODIFIED by SETTING ASIDE the questioned
orders of the Regional Trial Court directing the reinstatement of the petitioner Isabelo T. Crisostomo to the
position of president of the Polytechnic University of the Philippines and the payment to him of salaries and
benefits which he failed to receive during his suspension in so far as such payment would include salaries
The importance of the crucial question raised called for intensive and rigorous study of all the legal aspects of underprivileged, have found legal spokesmen and are asserting grievances previously ignored. Fortunately,
the case. After such exhaustive deliberation in several sessions, the exchange of views being supplemented the judicially has not proved inattentive. Its task has thus become even more formidable. For so much grist is
by memoranda from the members of the Court, it is our opinion and so hold that Batas Pambansa Blg. 129 is added to the mills of justice. Moreover, they are likewise to be quite novel. The need for an innovative
not unconstitutional. approach is thus apparent. The national leadership, as is well-known, has been constantly on the search for
solutions that will prove to be both acceptable and satisfactory. Only thus may there be continued national
progress." 15 After which comes: "To be less abstract, the thrust is on development. That has been repeatedly
1. The argument as to the lack of standing of petitioners is easily resolved. As far as Judge de la Llana is
stressed and rightly so. All efforts are geared to its realization. Nor, unlike in the past, was it to b
concerned, he certainly falls within the principle set forth in Justice Laurel's opinion in People v. Vera. 8 Thus:
"considered as simply the movement towards economic progress and growth measured in terms of sustained
"The unchallenged rule is that the person who impugns the validity of a statute must have a personal and
increases in per capita income and Gross National Product (GNP). 16 For the New Society, its implication goes
substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its
further than economic advance, extending to "the sharing, or more appropriately, the democratization of social
enforcement." 9 The other petitioners as members of the bar and officers of the court cannot be considered as
and economic opportunities, the substantiation of the true meaning of social justice." 17 This process of
devoid of "any personal and substantial interest" on the matter. There is relevance to this excerpt from a
modernization and change compels the government to extend its field of activity and its scope of operations.
separate opinion in Aquino, Jr. v. Commission on Elections: 10 "Then there is the attack on the standing of
The efforts towards reducing the gap between the wealthy and the poor elements in the nation call for more
petitioners, as vindicating at most what they consider a public right and not protecting their rights as
regulatory legislation. That way the social justice and protection to labor mandates of the Constitution could be
individuals. This is to conjure the specter of the public right dogma as an inhibition to parties intent on keeping
effectively implemented." 18 There is likelihood then "that some measures deemed inimical by interests
public officials staying on the path of constitutionalism. As was so well put by Jaffe: 'The protection of private
adversely affected would be challenged in court on grounds of validity. Even if the question does not go that
rights is an essential constituent of public interest and, conversely, without a well-ordered state there could be
far, suits may be filed concerning their interpretation and application. ... There could be pleas for injunction or
no enforcement of private rights. Private and public interests are, both in substantive and procedural sense,
restraining orders. Lack of success of such moves would not, even so, result in their prompt final disposition.
aspects of the totality of the legal order.' Moreover, petitioners have convincingly shown that in their capacity
Thus delay in the execution of the policies embodied in law could thus be reasonably expected. That is not
as taxpayers, their standing to sue has been amply demonstrated. There would be a retreat from the liberal
conducive to progress in development." 19 For, as mentioned in such Report, equally of vital concern is the
approach followed in Pascual v. Secretary of Public Works,foreshadowed by the very decision of People v.
problem of clogged dockets, which "as is well known, is one of the utmost gravity. Notwithstanding the most
Vera where the doctrine was first fully discussed, if we act differently now. I do not think we are prepared to
determined efforts exerted by the Supreme Court, through the leadership of both retired Chief Justice Querube
take that step. Respondents, however, would hark back to the American Supreme Court doctrine in Mellon v.
Makalintal and the late Chief Justice Fred Ruiz Castro, from the time supervision of the courts was vested in it
Frothingham with their claim that what petitioners possess 'is an interest which is shared in common by other
under the 1973 Constitution, the trend towards more and more cases has continued." 20 It is understandable
people and is comparatively so minute and indeterminate as to afford any basis and assurance that the judicial
why. With the accelerated economic development, the growth of population, the increasing urbanization, and
process can act on it.' That is to speak in the language of a bygone era even in the United States. For as Chief
other similar factors, the judiciary is called upon much oftener to resolve controversies. Thus confronted with
Justice Warren clearly pointed out in the later case of Flast v. Cohen, the barrier thus set up if not breached
what appears to be a crisis situation that calls for a remedy, the Batasang Pambansa had no choice. It had to
has definitely been lowered." 11
act, before the ailment became even worse. Time was of the essence, and yet it did not hesitate to be duly
mindful, as it ought to be, of the extent of its coverage before enacting Batas Pambansa Blg. 129.
2. The imputation of arbitrariness to the legislative body in the enactment of Batas Pambansa Blg. 129 to
demonstrate lack of good faith does manifest violence to the facts. Petitioners should have exercised greater
3. There is no denying, therefore, the need for "institutional reforms," characterized in the Report as "both
care in informing themselves as to its antecedents. They had laid themselves open to the accusation of
pressing and urgent." 21 It is worth noting, likewise, as therein pointed out, that a major reorganization of such
reckless disregard for the truth, On August 7, 1980, a Presidential Committee on Judicial Reorganization was
scope, if it were to take place, would be the most thorough after four generations. 22 The reference was to the
organized.12 This Executive Order was later amended by Executive Order No. 619-A., dated September 5 of
basic Judiciary Act generations . enacted in June of 1901, 23 amended in a significant way, only twice previous
that year. It clearly specified the task assigned to it: "1. The Committee shall formulate plans on the
to the Commonwealth. There was, of course, the creation of the Court of Appeals in 1935, originally composed
reorganization of the Judiciary which shall be submitted within seventy (70) days from August 7, 1980 to
"of a Presiding Judge and ten appellate Judges, who shall be appointed by the President of the Philippines,
provide the President sufficient options for the reorganization of the entire Judiciary which shall embrace all
with the consent of the Commission on Appointments of the National Assembly, 24 It could "sit en banc, but it
lower courts, including the Court of Appeals, the Courts of First Instance, the City and Municipal Courts, and all
may sit in two divisions, one of six and another of five Judges, to transact business, and the two divisions may
Special Courts, but excluding the Sandigan Bayan." 13 On October 17, 1980, a Report was submitted by such
sit at the same time." 25 Two years after the establishment of independence of the Republic of the Philippines,
Committee on Judicial Reorganization. It began with this paragraph: "The Committee on Judicial
the Judiciary Act of 1948 26 was passed. It continued the existing system of regular inferior courts, namely, the
Reorganization has the honor to submit the following Report. It expresses at the outset its appreciation for the
Court of Appeals, Courts of First Instance, 27 the Municipal Courts, at present the City Courts, and the Justice
opportunity accorded it to study ways and means for what today is a basic and urgent need, nothing less than
of the Peace Courts, now the Municipal Circuit Courts and Municipal Courts. The membership of the Court of
the restructuring of the judicial system. There are problems, both grave and pressing, that call for remedial
Appeals has been continuously increased. 28 Under a 1978 Presidential Decree, there would be forty-five
measures. The felt necessities of the time, to borrow a phrase from Holmes, admit of no delay, for if no step be
members, a Presiding Justice and forty-four Associate Justices, with fifteen divisions. 29 Special courts were
taken and at the earliest opportunity, it is not too much to say that the people's faith in the administration of
likewise created. The first was the Court of Tax Appeals in 1954, 30 next came the Court of Agrarian Relations
justice could be shaken. It is imperative that there be a greater efficiency in the disposition of cases and that
in 1955, 31 and then in the same year a Court of the Juvenile and Domestic Relations for Manila in
litigants, especially those of modest means much more so, the poorest and the humblest can vindicate
1955, 32 subsequently followed by the creation of two other such courts for Iloilo and Quezon City in 1966. 33 In
their rights in an expeditious and inexpensive manner. The rectitude and the fairness in the way the courts
1967, Circuit Criminal Courts were established, with the Judges having the same qualifications, rank,
operate must be manifest to all members of the community and particularly to those whose interests are
compensation, and privileges as judges of Courts of First Instance. 34
affected by the exercise of their functions. It is to that task that the Committee addresses itself and hopes that
the plans submitted could be a starting point for an institutional reform in the Philippine judiciary. The
experience of the Supreme Court, which since 1973 has been empowered to supervise inferior courts, from 4. After the submission of such Report, Cabinet Bill No. 42, which later became the basis of Batas Pambansa
the Court of Appeals to the municipal courts, has proven that reliance on improved court management as well Blg. 129, was introduced. After setting forth the background as above narrated, its Explanatory Note continues:
as training of judges for more efficient administration does not suffice. I hence, to repeat, there is need for a "Pursuant to the President's instructions, this proposed legislation has been drafted in accordance with the
major reform in the judicial so stem it is worth noting that it will be the first of its kind since the Judiciary Act guidelines of that report with particular attention to certain objectives of the reorganization, to wit, the
became effective on June 16, 1901." 14 I t went to say: "I t does not admit of doubt that the last two decades of attainment of more efficiency in disposal of cases, a reallocation of jurisdiction, and a revision of procedures
this century are likely to be attended with problems of even greater complexity and delicacy. New social which do not tend to the proper meeting out of justice. In consultation with, and upon a consensus of, the
interests are pressing for recognition in the courts. Groups long inarticulate, primarily those economically governmental and parliamentary leadership, however, it was felt that some options set forth in the Report be
not availed of. Instead of the proposal to confine the jurisdiction of the intermediate appellate court merely to
appellate adjudication, the preference has been opted to increase rather than diminish its jurisdiction in order
to enable it to effectively assist the Supreme Court. This preference has been translated into one of the
innovations in the proposed Bill." 35 In accordance with the parliamentary procedure, the Bill was sponsored by
the Chairman of the Committee on Justice, Human Rights and Good Government to which it was referred.
Thereafter, Committee Report No. 225 was submitted by such Committee to the Batasang Pambansa
recommending the approval with some amendments. In the sponsorship speech of Minister Ricardo C. Puno,
there was reference to the Presidential Committee on Judicial Reorganization. Thus: "On October 17, 1980,
the Presidential Committee on Judicial Reorganization submitted its report to the President which contained
the 'Proposed Guidelines for Judicial Reorganization.' Cabinet Bill No. 42 was drafted substantially in
accordance with the options presented by these guidelines. Some options set forth in the aforesaid report
were not availed of upon consultation with and upon consensus of the government and parliamentary
leadership. Moreover, some amendments to the bill were adopted by the Committee on Justice, Human Rights
and Good Government, to which The bill was referred, following the public hearings on the bill held in
December of 1980. The hearings consisted of dialogues with the distinguished members of the bench and the
bar who had submitted written proposals, suggestions, and position papers on the bill upon the invitation of the
Committee on Justice, Human Rights and Good Government." 36 Stress was laid by the sponsor that the
enactment of such Cabinet Bill would, firstly, result in the attainment of more efficiency in the disposal of
cases. Secondly, the improvement in the quality of justice dispensed by the courts is expected as a necessary
consequence of the easing of the court's dockets. Thirdly, the structural changes introduced in the bill, together
with the reallocation of jurisdiction and the revision of the rules of procedure, are designated to suit the court
system to the exigencies of the present day Philippine society, and hopefully, of the foreseeable future." 37 it
may be observed that the volume containing the minutes of the proceedings of the Batasang Pambansa show
that 590 pages were devoted to its discussion. It is quite obvious that it took considerable time and effort as
well as exhaustive study before the act was signed by the President on August 14, 1981. With such a
background, it becomes quite manifest how lacking in factual basis is the allegation that its enactment is
tainted by the vice of arbitrariness. What appears undoubted and undeniable is the good faith that
characterized its enactment from its inception to the affixing of the Presidential signature.
5. Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate
body if done in good faith suffers from no infirmity. The ponencia of Justice J.B.L. Reyes in Cruz v. Primicias,
Jr. 38reiterated such a doctrine: "We find this point urged by respondents, to be without merit. No removal or
separation of petitioners from the service is here involved, but the validity of the abolition of their offices. This
is a legal issue that is for the Courts to decide. It is well-known rule also that valid abolition of offices is neither
removal nor separation of the incumbents. ... And, of course, if the abolition is void, the incumbent is deemed
never to have ceased to hold office. The preliminary question laid at rest, we pass to the merits of the case. As
well-settled as the rule that the abolition of an office does not amount to an illegal removal of its incumbent is
the principle that, in order to be valid, the abolition must be made in good faith." 39 The above excerpt was
quoted with approval in Bendanillo, Sr. v. Provincial Governor, 40 two earlier cases enunciating a similar
doctrine having preceded it. 41 As with the offices in the other branches of the government, so it is with the
judiciary. The test remains whether the abolition is in good faith. As that element is conspicuously present in
the enactment of Batas Pambansa Blg. 129, then the lack of merit of this petition becomes even more
apparent. The concurring opinion of Justice Laurel in Zandueta v. De la Costa 42 cannot be any clearer. This is
a quo warranto proceeding filed by petitioner, claiming that he, and not respondent, was entitled to he office of
judge of the Fifth Branch of the Court of First Instance of Manila. There was a Judicial Reorganization Act in
1936, 43 a year after the inauguration of the Commonwealth, amending the Administrative Code to organize
courts of original jurisdiction known as the Courts of First Instance Prior to such statute, petitioner was the
incumbent of such branch. Thereafter, he received an ad interim appointment, this time to the Fourth Judicial
District, under the new legislation. Unfortunately for him, the Commission on Appointments of then National
Assembly disapproved the same, with respondent being appointed in his place. He contested the validity of
the Act insofar as it resulted in his being forced to vacate his position This Court did not rule squarely on the
matter. His petition was dismissed on the ground of estoppel. Nonetheless, the separate concurrence of
Justice Laurel in the result reached, to repeat, reaffirms in no uncertain terms the standard of good faith to
preclude any doubt as to the abolition of an inferior court, with due recognition of the security of tenure
guarantee. Thus: " I am of the opinion that Commonwealth Act No. 145 in so far as it reorganizes, among
other judicial districts, the Ninth Judicial District, and establishes an entirely new district comprising Manila and
the provinces of Rizal and Palawan, is valid and constitutional. This conclusion flows from the fundamental
proposition that the legislature may abolish courts inferior to the Supreme Court and therefore may reorganize
them territorially or otherwise thereby necessitating new appointments and commissions. Section 2, Article VIII
of the Constitution vests in the National Assembly the power to define, prescribe and apportion the jurisdiction
of the various courts, subject to certain limitations in the case of the Supreme Court. It is admitted that section
9 of the same article of the Constitution provides for the security of tenure of all the judges. The principles
embodied in these two sections of the same article of the Constitution must be coordinated and harmonized. A
mere enunciation of a principle will not decide actual cases and controversies of every sort. (Justice Holmes in
Lochner vs. New York, 198 U.S., 45; 49 Law. ed; 937)" 44 justice Laurel continued: "I am not insensible to the
argument that the National Assembly may abuse its power and move deliberately to defeat the constitutional
provision guaranteeing security of tenure to all judges, But, is this the case? One need not share the view of
Story, Miller and Tucker on the one hand, or the opinion of Cooley, Watson and Baldwin on the other, to realize
that the application of a legal or constitutional principle is necessarily factual and circumstantial and that fixity
of principle is the rigidity of the dead and the unprogressive. I do say, and emphatically, however, that cases
may arise where the violation of the constitutional provision regarding security of tenure is palpable and plain,
and that legislative power of reorganization may be sought to cloak an unconstitutional and evil purpose.
When a case of that kind arises, it will be the time to make the hammer fall and heavily. But not until then. I am
satisfied that, as to the particular point here discussed, the purpose was the fulfillment of what was considered
a great public need by the legislative department and that Commonwealth Act No. 145 was not enacted
purposely to affect adversely the tenure of judges or of any particular judge. Under these circumstances, I am
for sustaining the power of the legislative department under the Constitution. To be sure, there was greater
necessity for reorganization consequent upon the establishment of the new government than at the time Acts
Nos. 2347 and 4007 were approved by the defunct Philippine Legislature, and although in the case of these
two Acts there was an express provision providing for the vacation by the judges of their offices whereas in the
case of Commonwealth Act No. 145 doubt is engendered by its silence, this doubt should be resolved in favor
of the valid exercise of the legislative power." 45
6. A few more words on the question of abolition. In the above-cited opinion of Justice Laurel in Zandueta,
reference was made to Act No. 2347 46 on the reorganization of the Courts of First Instance and to Act No.
4007 47 on the reorganization of all branches of the government, including the courts of first instance. In both of
them, the then Courts of First Instance were replaced by new courts with the same appellation. As Justice
Laurel pointed out, there was no question as to the fact of abolition. He was equally categorical as to
Commonwealth Act No. 145, where also the system of the courts of first instance was provided for expressly. It
was pointed out by Justice Laurel that the mere creation of an entirely new district of the same court is valid
and constitutional. such conclusion flowing "from the fundamental proposition that the legislature may abolish
courts inferior to the Supreme Court and therefore may reorganize them territorially or otherwise thereby
necessitating new appointments and commissions." 48 The challenged statute creates an intermediate
appellate court, 49 regional trial courts, 50 metropolitan trial courts of the national capital region, 51 and other
metropolitan trial courts, 52 municipal trial courts in cities, 53 as well as in municipalities, 54 and municipal circuit
trial courts. 55 There is even less reason then to doubt the fact that existing inferior courts were abolished. For
the Batasang Pambansa, the establishment of such new inferior courts was the appropriate response to the
grave and urgent problems that pressed for solution. Certainly, there could be differences of opinion as to the
appropriate remedy. The choice, however, was for the Batasan to make, not for this Court, which deals only
with the question of power. It bears mentioning that in Brillo v. Eage56 this Court, in an unanimous opinion
penned by the late Justice Diokno, citing Zandueta v. De la Costa, ruled: "La segunda question que el
recurrrido plantea es que la Carta de Tacloban ha abolido el puesto. Si efectivamente ha sido abolido el cargo,
entonces ha quedado extinguido el derecho de recurente a ocuparlo y a cobrar el salario correspodiente.Mc
Culley vs. State, 46 LRA, 567. El derecho de un juez de desempenarlo hasta los 70 aos de edad o se
incapacite no priva al Congreso de su facultad de abolir, fusionar o reorganizar juzgados no
constitucionales." 57 Nonetheless, such well-established principle was not held applicable to the situation there
obtaining, the Charter of Tacloban City creating a city court in place of the former justice of the peace court.
Thus: "Pero en el caso de autos el Juzgado de Tacloban no ha sido abolido. Solo se le ha cambiado el
nombre con el cambio de forma del gobierno local." 58 The present case is anything but that. Petitioners did
not and could not prove that the challenged statute was not within the bounds of legislative authority.
7. This opinion then could very well stop at this point. The implementation of Batas Pambansa Blg. 129,
concededly a task incumbent on the Executive, may give rise, however, to questions affecting a judiciary that
should be kept independent. The all-embracing scope of the assailed legislation as far as all inferior courts
from the Courts of Appeals to municipal courts are concerned, with the exception solely of the Sandiganbayan
and the Court of Tax Appeals 59 gave rise, and understandably so, to misgivings as to its effect on such
cherished Ideal. The first paragraph of the section on the transitory provision reads: "The provisions of this Act
shall be immediately carried out in accordance with an Executive Order to be issued by the President. The
Court of Appeals, the Courts of First Instance, the Circuit Criminal Courts, the Juvenile and Domestic
Relations Courts, the Courts of Agrarian Relations, the City Courts, the Municipal Courts, and the Municipal
Circuit Courts shall continue to function as presently constituted and organized, until the completion of the
reorganization provided in this Act as declared by the President. Upon such declaration, the said courts shall
be deemed automatically abolished and the incumbents thereof shall cease to hold the office." 60 There is all
the more reason then why this Court has no choice but to inquire further into the allegation by petitioners that
the security of tenure provision, an assurance of a judiciary free from extraneous influences, is thereby
reduced to a barren form of words. The amended Constitution adheres even more clearly to the long-
established tradition of a strong executive that antedated the 1935 Charter. As noted in the work of former
Vice-Governor Hayden, a noted political scientist, President Claro M. Recto of the 1934 Convention, in his
closing address, in stressing such a concept, categorically spoke of providing "an executive power which,
subject to the fiscalization of the Assembly, and of public opinion, will not only know how to govern, but will
actually govern, with a firm and steady hand, unembarrassed by vexatious interferences by other
departments, or by unholy alliances with this and that social group." 61 The above excerpt was cited with
approval by Justice Laurel in Planas v. Gil.62 Moreover, under the 1981 Amendments, it may be affirmed that
once again the principle of separation of powers, to quote from the same jurist as ponente in Angara v.
Electoral Commission, 63 "obtains not through express provision but by actual division." 64 The president, under
Article VII, shall be the head of state and chief executive of the Republic of the Philippines." 65 Moreover, it is
equally therein expressly provided that all the powers he possessed under the 1935 Constitution are once
again vested in him unless the Batasang Pambansa provides otherwise." 66 Article VII of the 1935 Constitution
speaks categorically: "The Executive power shall be vested in a President of the Philippines." 67 As originally
framed, the 1973 Constitution created the position of President as the "symbolic head of state." 68 In addition,
there was a provision for a Prime Minister as the head of government exercising the executive power with the
assistance of the Cabinet69 Clearly, a modified parliamentary system was established. In the light of the 1981
amendments though, this Court in Free Telephone Workers Union v. Minister of Labor 70 could state: "The
adoption of certain aspects of a parliamentary system in the amended Constitution does not alter its
essentially presidential character." 71 The retention, however, of the position of the Prime Minister with the
Cabinet, a majority of the members of which shall come from the regional representatives of the Batasang
Pambansa and the creation of an Executive Committee composed of the Prime Minister as Chairman and not
more than fourteen other members at least half of whom shall be members of the Batasang Pambansa, clearly
indicate the evolving nature of the system of government that is now operative. 72 What is equally apparent is
that the strongest ties bind the executive and legislative departments. It is likewise undeniable that the
Batasang Pambansa retains its full authority to enact whatever legislation may be necessary to carry out
national policy as usually formulated in a caucus of the majority party. It is understandable then why in Fortun
v. Labang 73 it was stressed that with the provision transferring to the Supreme Court administrative
supervision over the Judiciary, there is a greater need "to preserve unimpaired the independence of the
judiciary, especially so at present, where to all intents and purposes, there is a fusion between the executive
and the legislative branches." 74
8. To be more specific, petitioners contend that the abolition of the existing inferior courts collides with the
security of tenure enjoyed by incumbent Justices and judges under Article X, Section 7 of the Constitution.
There was a similar provision in the 1935 Constitution. It did not, however, go as far as conferring on this
Tribunal the power to supervise administratively inferior courts. 75 Moreover, this Court is em powered "to
discipline judges of inferior courts and, by a vote of at least eight members, order their dismissal." 76 Thus it
possesses the competence to remove judges. Under the Judiciary Act, it was the President who was vested
with such power. 77 Removal is, of course, to be distinguished from termination by virtue of the abolition of the
office. There can be no tenure to a non-existent office. After the abolition, there is in law no occupant. In case
of removal, there is an office with an occupant who would thereby lose his position. It is in that sense that from
the standpoint of strict law, the question of any impairment of security of tenure does not arise. Nonetheless,
for the incumbents of inferior courts abolished, the effect is one of separation. As to its effect, no distinction
exists between removal and the abolition of the office. Realistically, it is devoid of significance. He ceases to
be a member of the judiciary. In the implementation of the assailed legislation, therefore, it would be in
accordance with accepted principles of constitutional construction that as far as incumbent justices and judges
are concerned, this Court be consulted and that its view be accorded the fullest consideration. No fear need
be entertained that there is a failure to accord respect to the basic principle that this Court does not render
advisory opinions. No question of law is involved. If such were the case, certainly this Court could not have its
say prior to the action taken by either of the two departments. Even then, it could do so but only by way of
deciding a case where the matter has been put in issue. Neither is there any intrusion into who shall be
appointed to the vacant positions created by the reorganization. That remains in the hands of the Executive to
whom it properly belongs. There is no departure therefore from the tried and tested ways of judicial power,
Rather what is sought to be achieved by this liberal interpretation is to preclude any plausibility to the charge
that in the exercise of the conceded power of reorganizing tulle inferior courts, the power of removal of the
present incumbents vested in this Tribunal is ignored or disregarded. The challenged Act would thus be free
from any unconstitutional taint, even one not readily discernidble except to those predisposed to view it with
distrust. Moreover, such a construction would be in accordance with the basic principle that in the choice of
alternatives between one which would save and another which would invalidate a statute, the former is to be
preferred. 78 There is an obvious way to do so. The principle that the Constitution enters into and forms part of
every act to avoid any constitutional taint must be applied Nuez v. Sandiganbayan, 79 promulgated last
January, has this relevant excerpt: "It is true that other Sections of the Decree could have been so worded as
to avoid any constitutional objection. As of now, however, no ruling is called for. The view is given expression
in the concurring and dissenting opinion of Justice Makasiar that in such a case to save the Decree from the
direct fate of invalidity, they must be construed in such a way as to preclude any possible erosion on the
powers vested in this Court by the Constitution. That is a proposition too plain to be committed. It commends
itself for approval." 80 Nor would such a step be unprecedented. The Presidential Decree constituting Municipal
Courts into Municipal Circuit Courts, specifically provides: "The Supreme Court shall carry out the provisions of
this Decree through implementing orders, on a province-to-province basis." 81 It is true there is no such
provision in this Act, but the spirit that informs it should not be ignored in the Executive Order contemplated
under its Section 44. 82 Thus Batas Pambansa Blg. 129 could stand the most rigorous test of constitutionality. 83
9. Nor is there anything novel in the concept that this Court is called upon to reconcile or harmonize
constitutional provisions. To be specific, the Batasang Pambansa is expressly vested with the authority to
reorganize inferior courts and in the process to abolish existing ones. As noted in the preceding paragraph, the
termination of office of their occupants, as a necessary consequence of such abolition, is hardly
distinguishable from the practical standpoint from removal, a power that is now vested in this Tribunal. It is of
the essence of constitutionalism to assure that neither agency is precluded from acting within the boundaries
of its conceded competence. That is why it has long been well-settled under the constitutional system we have
adopted that this Court cannot, whenever appropriate, avoid the task of reconciliation. As Justice Laurel put it
so well in the previously cited Angara decision, while in the main, "the Constitution has blocked out with deft
strokes and in bold lines, allotment of power to the executive, the legislative and the judicial departments of
the government, the overlapping and interlacing of functions and duties between the several departments,
however, sometimes makes it hard to say just where the one leaves off and the other begins." 84 It is well to
recall another classic utterance from the same jurist, even more emphatic in its affirmation of such a view,
moreover buttressed by one of those insights for which Holmes was so famous "The classical separation of
government powers, whether viewed in the light of the political philosophy of Aristotle, Locke, or Motesquieu or
of the postulations of Mabini, Madison, or Jefferson, is a relative theory of government. There is more truism
and actuality in interdependence than in independence and separation of powers, for as observed by Justice
Holmes in a case of Philippine origin, we cannot lay down 'with mathematical precision and divide the
branches into water-tight compartments' not only because 'the great ordinances of the Constitution do not
establish and divide fields of black and white but also because 'even the more specific of them are found to
terminate in a penumbra shading gradually from one extreme to the other.'" 85 This too from Justice Tuazon,
likewise expressing with force and clarity why the need for reconciliation or balancing is well-nigh unavodiable
under the fundamental principle of separation of powers: "The constitutional structure is a complicated system,
and overlappings of governmental functions are recognized, unavoidable, and inherent necessities of
governmental coordination." 86 In the same way that the academe has noted the existence in constitutional
litigation of right versus right, there are instances, and this is one of them, where, without this attempt at
harmonizing the provisions in question, there could be a case of power against power. That we should avoid.
10. There are other objections raised but they pose no difficulty. Petitioners would characterize as an undue
delegation of legislative power to the President the grant of authority to fix the compensation and the
allowances of the Justices and judges thereafter appointed. A more careful reading of the challenged Batas
Pambansa Blg. 129 ought to have cautioned them against raising such an issue. The language of the statute reorganization. That is more in the nature of scholarly studies. That the undertook. There could be no possible
is quite clear. The questioned provisions reads as follows: "Intermediate Appellate Justices, Regional Trial objection to such activity. Ever since 1973, this Tribunal has had administrative supervision over interior courts.
Judges, Metropolitan Trial Judges, municipal Trial Judges, and Municipal Circuit Trial Judges shall receive It has had the opportunity to inform itself as to the way judicial business is conducted and how it may be
such receive such compensation and allowances as may be authorized by the President along the guidelines improved. Even prior to the 1973 Constitution, it is the recollection of the writer of this opinion that either the
set forth in Letter of Implementation No. 93 pursuant to Presidential Decree No. 985, as amended by then Chairman or members of the Committee on Justice of the then Senate of the Philippines 101consulted
Presidential Decree No. 1597." 87 The existence of a standard is thus clear. The basic postulate that underlies members of the Court in drafting proposed legislation affecting the judiciary. It is not inappropriate to cite this
the doctrine of non-delegation is that it is the legislative body which is entrusted with the competence to make excerpt from an article in the 1975 Supreme Court Review: "In the twentieth century the Chief Justice of the
laws and to alter and repeal them, the test being the completeness of the statue in all its terms and provisions United States has played a leading part in judicial reform. A variety of conditions have been responsible for the
when enacted. As pointed out in Edu v. Ericta: 88 "To avoid the taint of unlawful delegation, there must be a development of this role, and foremost among them has been the creation of explicit institutional structures
standard, which implies at the very least that the legislature itself determines matters of principle and lays designed to facilitate reform." 102 Also: "Thus the Chief Justice cannot avoid exposure to and direct
down fundamental policy. Otherwise, the charge of complete abdication may be hard to repel. A standard thus involvement in judicial reform at the federal level and, to the extent issues of judicial federalism arise, at the
defines legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It state level as well." 103
indicates the circumstances under which the legislative command is to be effected. It is the criterion by which
legislative purpose may be carried out. Thereafter, the executive or administrative office designated may in
12. It is a cardinal article of faith of our constitutional regime that it is the people who are endowed with rights,
pursuance of the above guidelines promulgate supplemental rules and regulations. The standard may be
to secure which a government is instituted. Acting as it does through public officials, it has to grant them either
either express or implied. If the former, the non-delegation objection is easily met. The standard though does
expressly or impliedly certain powers. Those they exercise not for their own benefit but for the body politic. The
not have to be spelled out specifically. It could be implied from the policy and purpose of the act considered as
Constitution does not speak in the language of ambiguity: "A public office is a public trust." 104 That is more
a whole." 89 The undeniably strong links that bind the executive and legislative departments under the
than a moral adjuration It is a legal imperative. The law may vest in a public official certain rights. It does so to
amended Constitution assure that the framing of policies as well as their implementation can be accomplished
enable them to perform his functions and fulfill his responsibilities more efficiently. It is from that standpoint that
with unity, promptitude, and efficiency. There is accuracy, therefore, to this observation in the Free Telephone
the security of tenure provision to assure judicial independence is to be viewed. It is an added guarantee that
Workers Union decision: "There is accordingly more receptivity to laws leaving to administrative and executive
justices and judges can administer justice undeterred by any fear of reprisal or untoward consequence. Their
agencies the adoption of such means as may be necessary to effectuate a valid legislative purpose. It is worth
judgments then are even more likely to be inspired solely by their knowledge of the law and the dictates of
noting that a highly-respected legal scholar, Professor Jaffe, as early as 1947, could speak of delegation as
their conscience, free from the corrupting influence of base or unworthy motives. The independence of which
the 'dynamo of modern government.'" 90 He warned against a "restrictive approach" which could be "a
they are assured is impressed with a significance transcending that of a purely personal right. As thus viewed,
deterrent factor to much-needed legislation." 91 Further on this point from the same opinion" "The spectre of the
it is not solely for their welfare. The challenged legislation Thus subject d to the most rigorous scrutiny by this
non-delegation concept need not haunt, therefore, party caucuses, cabinet sessions or legislative
Tribunal, lest by lack of due care and circumspection, it allow the erosion of that Ideal so firmly embedded in
chambers." 92 Another objection based on the absence in the statue of what petitioners refer to as a "definite
the national consciousness There is this farther thought to consider. independence in thought and action
time frame limitation" is equally bereft of merit. They ignore the categorical language of this provision: "The
necessarily is rooted in one's mind and heart. As emphasized by former Chief Justice Paras in Ocampo v.
Supreme Court shall submit to the President, within thirty (30) days from the date of the effectivity of this act, a
Secretary of Justice, 105 there is no surer guarantee of judicial independence than the God-given character and
staffing pattern for all courts constituted pursuant to this Act which shall be the basis of the implementing order
fitness of those appointed to the Bench. The judges may be guaranteed a fixed tenure of office during good
to be issued by the President in accordance with the immediately succeeding section." 93 The first sentence of
behavior, but if they are of such stuff as allows them to be subservient to one administration after another, or to
the next section is even more categorical: "The provisions of this Act shall be immediately carried out in
cater to the wishes of one litigant after another, the independence of the judiciary will be nothing more than a
accordance with an Executive Order to be issued by the President." 94 Certainly petitioners cannot be heard to
myth or an empty Ideal. Our judges, we are confident, can be of the type of Lord Coke, regardless or in spite
argue that the President is insensible to his constitutional duty to take care that the laws be faithfully
of the power of Congress we do not say unlimited but as herein exercised to reorganize inferior
executed. 95 In the meanwhile, the existing inferior courts affected continue functioning as before, "until the
courts." 106 That is to recall one of the greatest Common Law jurists, who at the cost of his office made clear
completion of the reorganization provided in this Act as declared by the President. Upon such declaration, the
that he would not just blindly obey the King's order but "will do what becomes [him] as a judge." So it was
said courts shall be deemed automatically abolished and the incumbents thereof shall cease to hold
pointed out in the first leading case stressing the independence of the judiciary, Borromeo v.
office." 96 There is no ambiguity. The incumbents of the courts thus automatically abolished "shall cease to hold
Mariano, 107 Theponencia of Justice Malcolm Identified good judges with "men who have a mastery of the
office." No fear need be entertained by incumbents whose length of service, quality of performance, and clean
principles of law, who discharge their duties in accordance with law, who are permitted to perform the duties of
record justify their being named anew, 97 in legal contemplation without any interruption in the continuity of their
the office undeterred by outside influence, and who are independent and self-respecting human units in a
service. 98 It is equally reasonable to assume that from the ranks of lawyers, either in the government service,
judicial system equal and coordinate to the other two departments of government." 108 There is no reason to
private practice, or law professors will come the new appointees. In the event that in certain cases a little more
assume that the failure of this suit to annul Batas Pambansa Blg. 129 would be attended with deleterious
time is necessary in the appraisal of whether or not certain incumbents deserve reappointment, it is not from
consequences to the administration of justice. It does not follow that the abolition in good faith of the existing
their standpoint undesirable. Rather, it would be a reaffirmation of the good faith that will characterize its
inferior courts except the Sandiganbayan and the Court of Tax Appeals and the creation of new ones will result
implementation by the Executive. There is pertinence to this observation of Justice Holmes that even
in a judiciary unable or unwilling to discharge with independence its solemn duty or one recreant to the trust
acceptance of the generalization that courts ordinarily should not supply omissions in a law, a generalization
reposed in it. Nor should there be any fear that less than good faith will attend the exercise be of the
qualified as earlier shown by the principle that to save a statute that could be done, "there is no canon against
appointing power vested in the Executive. It cannot be denied that an independent and efficient judiciary is
using common sense in construing laws as saying what they obviously mean." 99 Where then is the
something to the credit of any administration. Well and truly has it been said that the fundamental principle of
unconstitutional flaw
separation of powers assumes, and justifiably so, that the three departments are as one in their determination
to pursue the Ideals and aspirations and to fulfilling the hopes of the sovereign people as expressed in the
11. On the morning of the hearing of this petition on September 8, 1981, petitioners sought to have the writer Constitution. There is wisdom as well as validity to this pronouncement of Justice Malcolm in Manila Electric
of this opinion and Justices Ramon C. Aquino and Ameurfina Melencio-Herrera disqualified because the first- Co. v. Pasay Transportation Company, 109 a decision promulgated almost half a century ago: "Just as the
named was the chairman and the other two, members of the Committee on Judicial Reorganization. At the Supreme Court, as the guardian of constitutional rights, should not sanction usurpations by any other
hearing, the motion was denied. It was made clear then and there that not one of the three members of the department or the government, so should it as strictly confine its own sphere of influence to the powers
Court had any hand in the framing or in the discussion of Batas Pambansa Blg. 129. They were not consulted. expressly or by implication conferred on it by the Organic Act." 110 To that basic postulate underlying our
They did not testify. The challenged legislation is entirely the product of the efforts of the legislative constitutional system, this Court remains committed.
body. 100 Their work was limited, as set forth in the Executive Order, to submitting alternative plan for
WHEREFORE, the unconstitutionality of Batas Pambansa Blg. 129 not having been shown, this petition is 2.6 Secretary General
dismissed. No costs.

2.7 Auditor
[G.R. No. 115844. August 15, 1997]

2.8 Five (5) Directors

CESAR G. VIOLA, Chairman, Bgy. 167, Zone 15, District II, Manila, petitioner, vs. HON. RAFAEL M.
ALUNAN III, Secretary, DILG, ALEX L. DAVID, President/Secretary General, National Liga ng
Petitioner Cesar G. Viola brought this action as barangay chairman of Bgy. 167, Zone 15, District II,
mga Barangay, LEONARDO L. ANGAT, President, City of Manila, Liga ng mga
Manila against then Secretary of Interior and Local Government Rafael M. Alunan III, Alex L. David,
Barangay, respondents.
president/secretary general of the National Liga ng mga Barangay, and Leonardo L. Angat, president of the
City of Manila Liga ng mga Barangay, to restrain them from carrying out the elections for the questioned
DECISION positions on July 3, 1994.

MENDOZA, J.:
This is a petition for prohibition challenging the validity of Art. III, 1-2 of the Revised Implementing Rules
and Guidelines for the General Elections of the Liga ng mga Barangay Officers so far as they provide for the
election of first, second and third vice presidents and for auditors for the National Liga ng mga Barangay and
its chapters.The provisions in question read:
1. Local Liga Chapters. The Municipal, City, Metropolitan and Provincial Chapters shall directly elect the
following officers and directors to constitute their respective Board of Directors, namely:
1.1 President
Petitioners contention is that the positions in question are in excess of those provided in the Local
Government Code (R.A. No. 7160), 493 of which mentions as elective positions only those of president, vice
president, and five members of the board of directors in each chapter at the municipal, city, provincial,
metropolitan political subdivision, and national levels. Petitioner argues that, in providing for the positions of
first, second and third vice presidents and auditor for each chapter, 1-2 of the Implementing Rules expand the
number of positions authorized in 493 of the Local Government Code in violation of the principle that
implementing rules and regulations cannot add or detract from the provisions of the law they are designed to
implement.
Although the elections are now over, the issues raised in this case are likely to arise again in future
elections of officers of the Liga ng mga Barangay. For one thing, doubt may be cast on the validity of the acts
of those elected. For another, this comes within the rule that courts will decide a question which is otherwise
moot and academic if it is capable of repetition, yet evading review.[1]

1.2 Executive Vice-President

We will therefore proceed to the merits of this case.

1.3 First Vice-President

Petitioners contention that the additional positions in question have been created without authority of
law is untenable. To begin with, the creation of these positions was actually made in the Constitution and By-
1.4 Second Vice-President
laws of the Liga ng Mga Barangay, which was adopted by the First Barangay National Assembly on January
11, 1994.This Constitution and By-laws provide in pertinent parts:
1.5 Third Vice-President
ARTICLE VI
1.6 Auditor
OFFICERS AND DIRECTORS
1.7 Five (5) Directors
Section 1. Organization of Board of Directors of Local Chapters. - The chapters shall directly elect their
2. National Liga. The National Liga shall directly elect the following officers and directors to constitute the respective officers, namely, a president; executive vice president; first, second, and third vice presidents;
National Liga Board of Directors namely: auditor; and five (5) members to constitute the Board of Directors of their respective chapter. Thereafter, the
Board shall appoint a secretary, treasurer, and public relations officer from among the five (5) members, with
the rest serving as Directors of Board. The Board may create such other positions as it may deem necessary
2.1 President
for the management of the chapter. Pending elections of the president of the municipal, city, provincial and
metropolitan chapters of the Liga, the incumbent presidents of the ABCs of the municipality, city province and
2.2 Executive Vice-President Metropolitan Manila shall continue to act as presidents of the corresponding Liga chapters, subject to the
provisions of the Local Government Code of 1991.

2.3 First Vice-President

Section 2. Organization of Board of Directors of the National Liga. - The National Liga shall be composed of
the presidents of the provincial Liga chapters, highly urbanized and independent component city chapters, and
2.4 Second Vice-President
the metropolitan chapter who shall directly elect their respective officers, namely, a president, executive vice
president; first, second, and third vice president, auditor, secretary general; and five (5) members to constitute
2.5 Third Vice-President the Board of Directors of the National Liga.Thereafter, the Board shall appoint a treasurer, secretary and public
relations officers from among the five (5) members with the rest serving as directors of the Board. The Board (3) The board of directors shall coordinate the activities of the various chapters of the liga.
may create such other positions as it may deem necessary for the management of the National Liga. Pending
election of Secretary-General, the incumbent president of the Pambansang Katipunan ng mga Barangay
(Emphasis added)
(PKB) shall act as the Secretary-General. The incumbent members of the Board of the PKB, headed by the
Secretary-General who continue to be presidents of the respective chapters of the Liga to which they belong,
shall constitute a committee to exercise the powers and duties of the National Liga and with the primordial Pursuant to these provisions, pending the organization of the Liga ng mga Barangay, the board of
responsibility of drafting a Constitution and By-Laws needed for the organization of the Liga as a whole directors of the PKB was constituted into a committee, headed by the PKB president, who acted as secretary
pursuant to the provisions of the Local Government Code of 1991. general, with a two-fold mandate: [1] exercise the powers and duties of the national liga and [2] draft or amend
the constitution and by-laws of the national liga to conform to the provisions of this Rule. The board of directors
of the PKB, functioning in place of the board of directors of the National Liga ng mga Barangay, exercised one
The post of executive vice president is in reality that of the vice president in 493 of the LGC, so that the
of these powers of the National Liga board, namely, to create additional positions which it deemed necessary
only additional positions created for each chapter in the Constitution and By-laws are those of first, second
for the management of a chapter. There is therefore no basis for the claim that because the power to create
and third vice presidents and auditor. Contrary to petitioners contention, the creation of the additional positions
additional positions in the Liga or its chapters is vested only in the board of directors the exercise of this power
is authorized by the LGC which provides as follows:
by the Barangay National Assembly is unauthorized and illegal and the positions created are void. The
Barangay National Assembly was actually the Pambansang Katipunan ng mga Barangay or PKB. Pending the
493. Organization. The liga at the municipal, city, provincial, metropolitan political subdivision, and national organization of the Liga ng mga Barangay, it served as the Liga.
levels directly elect a president, a vice-president, and five (5) members of the board of directors. The board
shall appoint its secretary and treasurer and create such other positions as it may deem necessary for the
But it is contended in the dissent that Section 493 of the LGC . . . vests the power to create additional
management of the chapter. A secretary-general shall be elected from among the members of the national liga
positions in the Board of Directors of the chapter. The implication seems to be that the board of the directors at
and shall be charged with the overall operation of the liga on the national level. The board shall coordinate the
the national level did not have that power. It is necessary to consider the organizational structure of the Liga
activities of the chapters of the liga. (emphasis added)
ng mga Barangay as provided in the LGC, as follows:

This provision in fact requires and not merely authorizes the board of directors to create such other
492. Representation, Chapters, National Liga. - Every barangay shall be represented in said liga by the
positions as it may deem necessary for the management of the chapter and belies petitioners claim that said
punong barangay, or in his absence or incapacity, by a sanggunian member duly elected for the purpose
provision (493) limits the officers of a chapter to the president, vice president, five members of the board of
among its members, who shall attend all meetings or deliberations called by the different chapters of the liga.
directors, secretary, and treasurer. That Congress can delegate the power to create positions such as these
has been settled by our decisions upholding the validity of reorganization statutes authorizing the President of
the Philippines to create, abolish or merge offices in the executive department. [2] The question is whether, in The liga shall have chapters at the municipal, city, provincial and metropolitan political subdivision levels.
making a delegation of this power to the board of directors of each chapter of the Liga ng Mga Barangay,
Congress provided a sufficient standard so that, in the phrase of Justice Cardozo, administrative discretion
The municipal and city chapters of the liga shall be composed of the barangay representatives of municipal
may be canalized within proper banks that keep it from overflowing. [3]
and city barangays, respectively. The duly elected presidents of component municipal and city chapters shall
constitute the provincial chapter or the metropolitan political subdivision chapter. The duly elected presidents
Statutory provisions authorizing the President of the Philippines to make reforms and changes in of highly-urbanized cities, provincial chapters, the Metropolitan Manila chapter and metropolitan political
government owned or controlled corporations for the purpose of promoting simplicity, economy and subdivision chapters shall constitute the National Liga ng mga Barangay.
efficiency[4]in their operations and empowering the Secretary of Education to prescribe minimum standards of
adequate and efficient instruction[5] in private schools and colleges have been found to be sufficient for the
493. Organization. The liga at the municipal, city, provincial, metropolitan political subdivision, and national
purpose of valid delegation. Judged by these cases, we hold that 493 of the Local Government Code, in
levels directly elect a president, a vice-president, and five (5) members of the board of directors. The board
directing the board of directors of the liga to create such other positions as may be deemed necessary for the
shall appoint its secretary and treasurer and create such other positions as it may deem necessary for the
management of the chapter[s], embodies a fairly intelligible standard. There is no undue delegation of power
management of the chapter. A secretary-general shall be elected from among the members of the national liga
by Congress.
and shall be charged with the overall operation of the liga on the national level. The board shall coordinate the
activities of the chapters of the liga.
Justice Davide contends in dissent, however, that only the Board of Directors and not any other body is
vested with the power to create other positions as may be necessary for the management of the chapter and
(Emphasis added)
that, in any case, there is no showing that the Barangay National Assembly was authorized to draft the
Constitution and By-laws because he is unable to find any law creating it. The Barangay National Assembly is
actually the Pambansang Katipunan ng mga Barangay (PKB) referred to in Art. 210(f)(2)(3) of the Rules and While the board of directors of a local chapter can create additional positions to provide for the needs of
Regulations Implementing the Local Government Code of 1991, which Justice Davides dissent cites. It will be the chapter, the board of directors of the National Liga must be deemed to have the power to create additional
helpful to quote these provisions: positions not only for its management but also for that of all the chapters at the municipal, city, provincial and
metropolitan political subdivision levels. Otherwise the National Liga would be no different from the local
chapters. There would then be only so many local chapters without a national one, when what is contemplated
(2) A secretary-general shall be elected from among the members of the national liga who shall be responsible
in the above-quoted provisions of the LGC is that there should be one Liga ng mga Barangay with local
for the overall operation of the liga. Pending election of a secretary-general under this rule, the incumbent
chapters at all levels of local government units. The dissent, by denying to the board of directors at the
president of the pambansang katipunan ng mga barangay shall act as the secretary-general. The incumbent
National Liga the power to create additional positions in the local chapters, would reduce such board to a
members of the board of the pambansang katipunan ng mga barangay, headed by the secretary-general, who
board of a local chapter.The fact is that 493 grants the power to create positions not only to the boards of the
continue to be presidents of the respective chapters of the liga to which they belong, shall constitute a
local chapters but to the board of the Liga at the national level as well.
committee to exercise the powers and duties of the national liga and draft or amend the constitution and by-
laws of the national liga to conform to the provisions of this Rule.
 Indeed what was done in the Constitution and By-laws of their liga was to create additional positions in
each chapter, whether national or local, without however precluding the boards of directors of the chapters as
well as that of the national liga from creating other positions for their peculiar needs. The creation by the board
of the National Liga of the positions of first, second and third vice presidents, auditors and public relations
officers was intended to provide uniform officers for the various chapters in line with the mandate in Art. 210(g)
(2) of the Rules and Regulations Implementing the Local Government Code of 1991 to the Barangay National
Assembly to formulate uniform constitution and by-laws applicable to the national liga and all local
chapters. The various chapters could have different minor officers depending on their local needs, but they
must have the same major elective officers, meaning to say, the additional vice presidents and auditors.
The dissent further argues that, following the rule of ejusdem generis, what may be created as
additional positions can only be appointive ones because the positions of secretary and treasurer are
appointive positions.The rule might apply if what is involved is the appointment of other officers. But what we
are dealing with in this case is the creation of additional positions. Section 493 actually gives the board the
power to [1] appoint its secretary and treasurer and [2] create such other positions as it may deem necessary
for the management of the chapter. The additional positions to be created need not therefore be appointive
positions.
Nor is it correct to say that 493, in providing that additional positions to be created must be those which
are deemed necessary for the management of the chapter, contemplates only appointive
positions. Management positions are not necessarily limited to appointive positions. Elective officers, such as
the president and vice president, can be expected to be involved in the general administration or management
of the chapter. Hence, the creation of other elective positions which may be deemed necessary for the
management of the chapter is within the purview of 493.
WHEREFORE, the petition for prohibition is
G.R. No. 83578 March 16, 1989
THE PRESIDENTIAL ANTI-DOLLAR SALTING TASK FORCE, petitioner,
vs.
HONORABLE COURT OF APPEALS, HONORABLE TEOFILO L, GUADIZ, JR.,Presiding Judge,
REGIONAL TRIAL COURT, Branch 147: NCR (MAKATI), and KARAMFIL IMPORT-EXPORT CO.,
INC., respondents.
K. V. Faylona & Associates for respondents.
SARMIENTO, J.:
The petitioner, the Presidential Anti-Dollar Salting Task Force, the President's arm assigned to investigate and
prosecute so-called "dollar salting" activities in the country (per Presidential Decree No. 1936 as amended by
Presidential Decree No. 2002), asks the Court to hold as null and void two Resolutions of the Court of
Appeals, dated September 24, 1987 1 and May 20, 1988, 2 reversing its Decision, dated October 24,
1986. 3 The Decision set aside an Order, dated April 16, 1985, of the Regional Trial Court, 4 as well as its
Order, dated August 21, 1985. The Resolution, dated September 24, 1987 disposed of, and granted, the
private respondent Karamfil Import-Export Co., Inc.'s motion for reconsideration of the October 24, 1986
Decision; the Resolution dated May 20, 1988, in turn, denied the petitioner's own motion for reconsideration.
The facts are not in controversy. We quote:
On March 12, 1985, State Prosecutor Jose B. Rosales, who is assigned with the
Presidential Anti-Dollar Salting Task Force hereinafter referred to as PADS Task Force
for purposes of convenience, issued search warrants Nos. 156, 157, 158, 159, 160 and
161 against the petitioners Karamfil Import-Export Co., Inc., P & B Enterprises Co.,
Inc., Philippine Veterans Corporation, Philippine Veterans Development Corporation,
Philippine Construction Development Corporation, Philippine Lauan Industries
Corporation, Inter-trade Development (Alvin Aquino), Amelili U. Malaquiok Enterprises
and Jaime P. Lucman Enterprises.
The application for the issuance of said search warrants was filed by Atty. Napoleon Gatmaytan of the Bureau
of Customs who is a deputized member of the PADS Task Force. Attached to the said application is the
affidavit of Josefin M. Castro who is an operative and investigator of the PADS Task Force. Said Josefin M.
Castro is likewise the sole deponent in the purported deposition to support the application for the issuance of
the six (6) search warrants involved in this case. The application filed by Atty. Gatmaytan, the affidavit and
deposition of Josefin M. Castro are all dated March 12, 1985. 5
Shortly thereafter, the private respondent (the petitioner below) went to the Regional Trial Court on a petition to
enjoin the implementation of the search warrants in question. 6 On March 13, 1985, the trial court issued a
temporary restraining order [effective "for a period of five (5) days notice " 7 ] and set the case for hearing on
March 18, 1985.
In disposing of the petition, the said court found the material issues to be:
1) Competency of this Court to act on petition filed by the petitioners;
2) Validity of the search warrants issued by respondent State Prosecutor;
3) Whether or not the petition has become moot and academic because all the search
warrants sought to be quashed had already been implemented and executed. 8
On April 16, 1985, the lower court issued the first of its challenged Orders, and held:
WHEREFORE, in view of all the foregoing, the Court hereby declares Search Warrant
Nos. 156, 157, 158, 159, 160, and 161 to be null and void. Accordingly, the
respondents are hereby ordered to return and surrender immediately all the personal
properties and documents seized by them from the petitioners by virtue of the
aforementioned search warrants.
SO ORDERED. 9
On August 21, 1985, the trial court denied reconsideration.
On April 4, 1986, the Presidential Anti-Dollar Salting Task Force went to the respondent Court of Appeals to
contest, on certiorari, the twin Order(s) of the lower court.
In ruling initially for the Task Force, the Appellate Court held:
Herein petitioner is a special quasi-judicial body with express powers enumerated
under PD 1936 to prosecute foreign exchange violations defined and punished under
P.D. No. 1883.
 The petitioner, in exercising its quasi-judicial powers, ranks with the Regional Trial
Courts, and the latter in the case at bar had no jurisdiction to declare the search
warrants in question null and void.
Besides as correctly pointed out by the Assistant Solicitor General the decision of the
Presidential Anti-Dollar Salting Task Force is appealable to the Office of the
President.10
In submitting that it is a quasi-judicial entity, the petitioner states that it is endowed with "express powers and
functions under PD No. 1936, to prosecute foreign exchange violations as defined and punished under PD No.
1883." 13 "By the very nature of its express powers as conferred by the laws," so it is contended, "which are
decidedly quasi-judicial or discretionary function, such as to conduct preliminary investigation on the charges
of foreign exchange violations, issue search warrants or warrants of arrest, hold departure orders, among
others, and depending upon the evidence presented, to dismiss the charges or to file the corresponding
information in court of Executive Order No. 934, PD No. 1936 and its Implementing Rules and Regulations
effective August 26, 1984), petitioner exercises quasi-judicial power or the power of adjudication ." 14

On November 12, 1986, Karamfil Import-Export Co., Inc. sought a reconsideration, on the question primarily of
whether or not the Presidential Anti-Dollar Salting Task Force is "such other responsible officer' countenanced
by the 1973 Constitution to issue warrants of search and seizure.
As we have indicated, the Court of Appeals, on Karamfil's motion, reversed itself and issued its Resolution,
dated September 1987, and subsequently, its Resolution, dated May 20, 1988, denying the petitioner's motion
for reconsideration.
In its petition to this Court, the petitioner alleges that in so issuing the Resolution(s) above-mentioned, the
respondent Court of Appeals "committed grave abuse of discretion and/or acted in excess of its appellate
jurisdiction," 11 specifically:
a) In deviating from the settled policy and rulings of the Supreme Court that no
Regional Trial Courts may countermand or restrain the enforcement of lawful writs or
decrees issued by a quasi-judicial body of equal and coordinate rank, like the PADS
Task Force;
The Court of Appeals, in its Resolution now assailed, 15 was of the opinion that "[t]he grant of quasi-judicial
powers to petitioner did not diminish the regular courts' judicial power of interpretation. The right to interpret a
law and, if necessary to declare one unconstitutional, exclusively pertains to the judiciary. In assuming this
function, courts do not proceed on the theory that the judiciary is superior to the two other coordinate branches
of the government, but solely on the theory that they are required to declare the law in every case which come
before them." 16
This Court finds the Appellate Court to be in error, since what the petitioner puts to question is the Regional
Trial Court's act of assuming jurisdiction over the private respondent's petition below and its subsequent
countermand of the Presidential Anti-Dollar Salting Task Force's orders of search and seizure, for the reason
that the presidential body, as an entity (allegedly) coordinate and co-equal with the Regional Trial Court, was
(is) not vested with such a jurisdiction. An examination of the Presidential Anti-Dollar Salting Task Force's
petition shows indeed its recognition of judicial review (of the acts of Government) as a basic privilege of the
courts. Its objection, precisely, is whether it is the Regional Trial Court, or the superior courts, that may
undertake such a review.
Under the Judiciary Reorganization Act of 1980, 17 the Court of Appeals exercises:

b) For resorting to judicial legislation to arrive at its erroneous basis for reconsidering
its previous Decision dated October 24, 1986 (see Annex "I") and thus promulgated the (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
questioned Resolutions (Annexes "A" and "B"), which violated the constitutional orders or awards of Regional Trial Court and quasi-judicial agencies, instrumentalities,
doctrine on separation of powers; 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
c) In not resolving directly the other important issues raised by the petitioner in its
of Section 17 of the Judiciary Act of 1948. 18
Petition in CA-G.R. No. 08622-SP despite the fact that petitioner has demonstrated
sufficiently and convincingly that respondent RTC, in issuing the questioned Orders in
Special Proceeding No. M-624 (see Annexes "C" and 'D"), committed grave abuse of xxx xxx xxx
discretion and/or acted in excess of jurisdiction:
Under the present Constitution, with respect to its provisions on Constitutional Commissions, it is provided, in
1. In ruling that (a) the description of the things to be seized as stated in the contested part that:
search warrant were too general which allegedly render the search warrants null and
void; (b) the applications for the contested search warrants actually charged two
... Unless otherwise provided by this Constitution or by law, any decision, order, or
offenses in contravention of the 2nd paragraph, Section 3, Rule 126 of the Rules of
ruling of each Commission may be brought to the Supreme Court on certiorari by the
Court; and (c) this case has not become moot and academic, even if the contested
aggrieved party within thirty days from receipt of a copy thereof. 19
search warrants had already been fully implemented with positive results; and

On the other hand, Regional Trial Courts have exclusive original jurisdiction:
2. In ruling that the petitioner PADS Task Force has not been granted under PD 1936
'judicial or quasi-judicial jurisdiction. 12
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or
body exercising judicial or quasi-judicial functions. 20
We find, upon the foregoing facts, that the essential questions that confront us are- (i) is the Presidential Anti-
Dollar Salting Task Force a quasi-judicial body, and one co-equal in rank and standing with the Regional Trial
Court, and accordingly, beyond the latter's jurisdiction; and (ii) may the said presidential body be said to be xxx xxx xxx
"such other responsible officer as may be authorized by law" to issue search warrants under the 1973
Constitution questions we take up seriatim.**
Likewise:
 ... The Supreme Court may designate certain branches of the Regional Trial Court to
handle exclusively criminal cases, juvenile and domestic relations cases, agrarian
case, urban land reform cases which do not fall under the jurisdiction of quasi- judicial
bodies and agencies and/or such other special cases as the Supreme Court may
determine in the interest of a speedy and efficient administration of justice. 21
xxx xxx xxx
Under our Resolution dated January 11, 1983: 22
... The appeals to the Intermediate Appellate Court [now, Court of Appeals] from quasi-
judicial bodies shall continue to be governed by the provisions of Republic Act No.
5434 insofar as the same is not inconsistent with the provisions of B.P. Blg. 129. 23
The pertinent provisions of Republic Act No. 5434 are as follows:
SECTION 1. Appeals from specified agencies. Any provision of existing law or Rule
of Court to the contrary notwithstanding, parties aggrieved by a final ruling, award,
order, decision, or judgment of the Court of Agrarian Relations; the Secretary of Labor
under Section 7 of Republic Act Numbered Six hundred and two, also known as the
"Minimum Wage Law"; the Department of Labor under Section 23 of Republic Act
Numbered Eight hundred seventy-five, also known as the "Industrial Peace Act"; the
Land Registration Commission; the Securities and Exchange Commission; the Social
Security Commission; the Civil Aeronautics Board; the Patent Office and the
Agricultural Inventions Board, may appeal therefrom to the Court of Appeals, within the
period and in the manner herein provided, whether the appeal involves questions of
fact, mixed questions of fact and law, or questions of law, or all three kinds of
questions. From final judgments or decisions of the Court of Appeals, the aggrieved
party may appeal by certiorari to the Supreme Court as provided in Rule 45 of the
Rules of Court. 24
Because of subsequent amendments, including the abolition of various special courts, 25 jurisdiction over
quasi-judicial bodies has to be, consequently, determined by the corresponding amendatory statutes. Under
the Labor Code, decisions and awards of the National Labor Relations Commission are final and executory,
but, nevertheless, 'reviewable by this Court through a petition for certiorari and not by way of appeal." 26
Under the Property Registration Decree, decisions of the Commission of Land Registration, en consults, are
appealable to the Court of Appeals. 27
The decisions of the Securities and Exchange Commission are likewise appealable to the Appellate
Court, 28 and so are decisions of the Social Security Commission.29
As a rule, where legislation provides for an appeal from decisions of certain administrative bodies to the Court
of Appeals, it means that such bodies are co-equal with the Regional Trial Courts, in terms of rank and stature,
and logically, beyond the control of the latter.
As we have observed, the question is whether or not the Presidential Anti-Dollar Salting Task Force is, in the
first place, a quasi-judicial body, and one whose decisions may not be challenged before the regular courts,
other than the higher tribunals the Court of Appeals and this Court.
A quasi-judicial body has been defined as "an organ of government other than a court and other than a
legislature, which affects the rights of private parties through either adjudication or rule making." 30 The most
common types of such bodies have been listed as follows:
(1) Agencies created to function in situations wherein the government is offering some
gratuity, grant, or special privilege, like the defunct Philippine Veterans Board, Board on
Pensions for Veterans, and NARRA, and Philippine Veterans Administration.
(2) Agencies set up to function in situations wherein the government is seeking to carry
on certain government functions, like the Bureau of Immigration, the Bureau of Internal
Revenue, the Board of Special Inquiry and Board of Commissioners, the Civil Service
Commission, the Central Bank of the Philippines.
(3) Agencies set up to function in situations wherein the government is performing
some business service for the public, like the Bureau of Posts, the Postal Savings
Bank, Metropolitan Waterworks & Sewerage Authority, Philippine National Railways,
the Civil Aeronautics Administration.
(4) Agencies set up to function in situations wherein the government is seeking to
regulate business affected with public interest, like the Fiber Inspections Board, the
Philippine Patent Office, Office of the Insurance Commissioner.
(5) Agencies set up to function in situations wherein the government is seeking under
the police power to regulate private business and individuals, like the Securities &
Exchange Commission, Board of Food Inspectors, the Board of Review for Moving
Pictures, and the Professional Regulation Commission.
(6) 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
the National Labor Relations Commission, the Court of Agrarian Relations, the
Regional Offices of the Ministry of Labor, the Social Security Commission, Bureau of
Labor Standards, Women and Minors Bureau. 31
As may be seen, it is the basic function of these bodies to adjudicate claims and/or to determine rights, and
unless its decision are seasonably appealed to the proper reviewing authorities, the same attain finality and
become executory. A perusal of the Presidential Anti-Dollar Salting Task Force's organic act, Presidential
Decree No. 1936, as amended by Presidential Decree No. 2002, convinces the Court that the Task Force was
not meant to exercise quasi-judicial functions, that is, to try and decide claims and execute its judgments. As
the President's arm called upon to combat the vice of "dollar salting" or the blackmarketing and salting of
foreign exchange, 32 it is tasked alone by the Decree to handle the prosecution of such activities, but nothing
more. We quote:
SECTION 1. Powers of the Presidential Anti-Dollar Salting Task Force.-The
Presidential Anti-Dollar Salting Task Force, hereinafter referred to as Task Force, shall
have the following powers and authority:
a) Motu proprio or upon complaint, to investigate and prosecute all dollar salting
activities, including the overvaluation of imports and the undervaluation of exports;
b) To administer oaths, summon persons or issue subpoenas requiring the attendance
and testimony of witnesses or the production of such books, papers, contracts,
records, statements of accounts, agreements, and other as may be necessary in the
conduct of investigation;
 c) To appoint or designate experts, consultants, state prosecutors or fiscals,
investigators and hearing officers to assist the Task Force in the discharge of its duties
and responsibilities; gather data, information or documents; conduct hearings, receive
evidence, both oral and documentary, in all cases involving violation of foreign
exchange laws or regulations; and submit reports containing findings and
recommendations for consideration of appropriate authorities;
d) To punish direct and indirect contempts with the appropriate penalties therefor under
Rule 71 of the Rules of Court; and to adopt such measures and take such actions as
may be necessary to implement this Decree.
xxx xxx xxx
f. After due investigation but prior to the filing of the appropriate criminal charges with
the fiscal's office or the courts as the case may be, to impose a fine and/or
administrative sanctions as the circumstances warrant, upon any person found
committing or to have committed acts constituting blackmarketing or salting abroad of
foreign exchange, provided said person voluntarily admits the facts and circumstances
constituting the offense and presents proof that the foreign exchange retained abroad
has already been brought into the country.
Thereafter, no further civil or criminal action may be instituted against said person
before any other judicial regulatory or administrative body for violation of Presidential
Decree No. 1883.
The amount of the fine shall be determined by the Chairman of the Presidential Anti-
Dollar Salting Task Force and paid in Pesos taking into consideration the amount of
foreign exchange retained abroad, the exchange rate differentials, uncollected taxes
and duties thereon, undeclared profits, interest rates and such other relevant factors.
The fine shall be paid to the Task Force which shall retain Twenty percent (20 %)
thereof. The informer, if any, shall be entitled to Twenty percent (20 %) of the fine.
Should there be no informer, the Task Force shall be entitle to retain Forty percent (40
%) of the fine and the balance shall accrue to the general funds of the National
government. The amount of the fine to be retained by the Task Force shall form part of
its Confidential Fund and be utilized for the operations of the Task Force . 33
The Court sees nothing in the aforequoted provisions (except with respect to the Task Force's powers to issue
search warrants) that will reveal a legislative intendment to confer it with quasi-judicial responsibilities relative
to offenses punished by Presidential Decree No. 1883. Its undertaking, as we said, is simply, to determine
whether or not probable cause exists to warrant the filing of charges with the proper court, meaning to say, to
conduct an inquiry preliminary to a judicial recourse, and to recommend action "of appropriate authorities". It is
not unlike a fiscal's office that conducts a preliminary investigation to determine whether or not prima facie
evidence exists to justify haling the respondent to court, and yet, while it makes that determination, it cannot
be said to be acting as a quasi-court. For it is the courts, ultimately, that pass judgment on the accused, not
the fiscal.
It is not unlike the Presidential Commission on Good Government either, the executive body appointed to
investigate and prosecute cases involving "ill-gotten wealth". It had been vested with enormous powers, like
the issuance of writs of sequestration, freeze orders, and similar processes, but that did not, on account
thereof alone, make it a quasi-judicial entity as defined by recognized authorities. It cannot pronounce
judgement of the accused's culpability, the jurisdiction to do which is exclusive upon the Sandiganbayan. 34
If the Presidential Anti-Dollar Salting Task Force is not, hence, a quasi-judicial body, it cannot be said to be co-
equal or coordinate with the Regional Trial Court. There is nothing in its enabling statutes that would
demonstrate its standing at par with the said court.
In that respect, we do not find error in the respondent Court of Appeal's resolution sustaining the assumption
of jurisdiction by the court a quo.
It will not do to say that the fact that the Presidential Task Force has been empowered to issue warrants of
arrest, search, and seizure, makes it, ergo, a "semi-court". Precisely, it is the objection interposed by the
private respondent, whether or not it can under the 1973 Charter, issue such kinds of processes.
It must be observed that under the present Constitution, the powers of arrest and search are exclusive upon
judges. 35 To that extent, the case has become moot and academic. Nevertheless, since the question has
been specifically put to the Court, we find it unavoidable to resolve it as the final arbiter of legal controversies,
pursuant to the provisions of the 1973 Constitution during whose regime the case was commenced.
Since the 1973 Constitution took force and effect and until it was so unceremoniously discarded in 1986, its
provisions conferring the power to issue arrest and search warrants upon an officer, other than a judge, by fiat
of legislation have been at best controversial. In Lim v. Ponce de Leon, 36 a 1975 decision, this Court ruled
that a fiscal has no authority to issue search warrants, but held in the same vein that, by virtue of the
responsible officer" clause of the 1973 Bill of Rights, "any lawful officer authorized by law can issue a search
warrant or warrant of arrest.37 Authorities, however, have continued to express reservations whether or not
fiscals may, by statute, be given such a power. 38
Less than a year later, we promulgated Collector of Customs v. Villaluz, 39 in which we categorically averred:
Until now only the judge can issue the warrant of arrest." 40 "No law or presidential decree has been enacted
or promulgated vesting the same authority in a particular responsible officer ." 41
Apparently, Villaluz had settled the debate, but the same question persisted following this Courts subsequent
rulings upholding the President's alleged emergency arrest powers .42 [Mr. Justice Hugo Gutierrez would hold,
however, that a Presidential Commitment Order (PCO) is (was) not a species of "arrest" in its technical sense,
and that the (deposed) Chief Executive, in issuing one, does not do so in his capacity as a "responsible officer"
under the 1973 Charter, but rather, as Commander-in-Chief of the Armed Forces in times of emergency, or in
order to carry out the deportation of undesirable aliens.43 In the distinguished Justice's opinion then, these are
acts that can be done without need of judicial intervention because they are not, precisely, judicial but
Presidential actions.]
In Ponsica v. Ignalaga,44 however, we held that the mayor has been made a "responsible officer' by the Local
Government Code, 45 but had ceased to be one with the approval of the 1987 Constitution according judges
sole authority to issue arrest and search warrants. But in the same breath, we did not rule the grant under the
Code unconstitutional based on the provisions of the former Constitution. We were agreed, though, that the
"responsible officer" referred to by the fundamental law should be one capable of approximating "the cold
neutrality of an impartial judge." 46
In striking down Presidential Decree No. 1936 the respondent Court relied on American jurisprudence,
notably,Katz v. United States, 47 Johnson v. United States, 48 and Coolidge v. New Hampshire 49 in which the
American Supreme Court ruled that prosecutors (like the petitioner) cannot be given such powers because of
their incapacity for a "detached scrutiny" 50 of the cases before them. We affirm the Appellate Court.
We agree that the Presidential Anti-Dollar Salting Task Force exercises, or was meant to exercise,
prosecutorial powers, and on that ground, it cannot be said to be a neutral and detached "judge" to determine
the existence of probable cause for purposes of arrest or search. Unlike a magistrate, a prosecutor is naturally
interested in the success of his case. Although his office "is to see that justice is done and not necessarily to
secure the conviction of the person accused," 51 he stands, invariably, as the accused's adversary and his KAPISANAN NG MGA KAWANI NG ENERGY REGULATORY BOARD, G.R. No. 150974
accuser. To permit him to issue search warrants and indeed, warrants of arrest, is to make him both judge and Petitioner,
jury in his own right, when he is neither. That makes, to our mind and to that extent, Presidential Decree No. Present:
1936 as amended by Presidential Decree No. 2002, unconstitutional.
QUISUMBING,* J.,
Chairperson,
It is our ruling, thus, that when the 1973 Constitution spoke of "responsible officer" to whom the authority to - versus - CARPIO,**
CARPIO MORALES,
issue arrest and search warrants may be delegated by legislation, it did not furnish the legislator with the
TINGA, and
license to give that authority to whomsoever it pleased. It is to be noted that the Charter itself makes the VELASCO, JR., JJ.
qualification that the officer himself must be "responsible". We are not saying, of course, that the Presidential
Anti-Dollar Salting Task Force (or any similar prosecutor) is or has been irresponsible in discharging its duty.COMMISSIONER FE B. BARIN, DEPUTY COMMISSIONERS CARLOS R.
Rather, we take "responsibility", as used by the Constitution, to mean not only skill and competence but more ALINDADA, LETICIA V. IBAY, OLIVER B. BUTALID, and MARY ANNE B.
significantly, neutrality and independence comparable to the impartiality presumed of a judicial officer. A COLAYCO, of the ENERGY REGULATORY COMMISSION,
prosecutor can in no manner be said to be possessed of the latter qualities. Respondents.

According to the Court of Appeals, the implied exclusion of prosecutors under the 1973 Constitution was Promulgated:
founded on the requirements of due process, notably, the assurance to the respondent of an unbiased inquiry
of the charges against him prior to the arrest of his person or seizure of his property. We add that the exclusion June 29, 2007
is also demanded by the principle of separation of powers on which our republican structure rests. Prosecutors
exercise essentially an executive function (the petitioner itself is chaired by the Minister, now Secretary, of x--------------------------------------------------x
Trade and Industry), since under the Constitution, the President has pledged to execute the laws. 52 As such,
they cannot be made to issue judicial processes without unlawfully impinging the prerogative of the courts.
DECISION

At any rate, Ponsica v. Ignalaga should foreclose all questions on the matter, although the Court hopes that CARPIO, J.:
this disposition has clarified a controversy that had generated often bitter debates and bickerings.
The Case

The Court joins the Government in its campaign against the scourge of "dollar- salting", a pernicious practice
that has substantially drained the nation's coffers and has seriously threatened its economy. We recognize the
menace it has posed (and continues to pose) unto the very stability of the country, the urgency for tough
measures designed to contain if not eradicate it, and foremost, the need for cooperation from the citizenry in
an all-out campaign. But while we support the State's efforts, we do so not at the expense of fundamental
rights and liberties and constitutional safeguards against arbitrary and unreasonable acts of Government. If in
the event that as a result of this ruling, we prove to be an "obstacle" to the vital endeavour of stamping out the
blackmarketing of valuable foreign exchange, we do not relish it and certainly, do not mean it. The Constitution
simply does not leave us much choice.
WHEREFORE, the petition is DISMISSED. No costs. SO ORDERED.
This is a special civil action for certiorari and prohibition [1] of the selection and appointment of employees of the
Energy Regulatory Commission (ERC) by the ERC Board of Commissioners.
Petitioner Kapisanan ng mga Kawani ng Energy Regulatory Board (KERB) seeks to declare Section 38 of
Republic Act No. 9136 (RA 9136), which abolished the Energy Regulatory Board (ERB) and created the ERC,
as unconstitutional and to prohibit the ERC Commissioners from filling up the ERCs plantilla.
The Facts
RA 9136, popularly known as EPIRA (for Electric Power Industry Reform Act of 2001), was enacted on 8 June
2001 and took effect on 26 June 2001. Section 38 of RA 9136 provides for the abolition of the ERB and the
creation of the ERC. The pertinent portions of Section 38 read:

Creation of the Energy Regulatory Commission. There is hereby created an

independent, quasi-judicial regulatory board to be named the Energy Regulatory
SECOND DIVISION Commission (ERC). For this purpose, the existing Energy Regulatory Board (ERB)
created under Executive Order No. 172, as amended, is hereby abolished.

The Commission shall be composed of a Chairman and four (4) members to be

appointed by the President of the Philippines. x x x

Within three (3) months from the creation of the ERC, the Chairman shall submit for the
approval of the President of the Philippines the new organizational structure
and plantilla positions necessary to carry out the powers and functions of the ERC.

xxxx

The Chairman and members of the Commission shall assume office at the beginning of
their terms:Provided, That, if upon the effectivity of this Act, the Commission has not
been constituted and the new staffing pattern and plantilla positions have not been
approved and filled-up, the current Board and existing personnel of ERB shall continue
to hold office.

The existing personnel of the ERB, if qualified, shall be given preference in the filling
up of plantillapositions created in the ERC, subject to existing civil service rules and
regulations.
At the time of the filing of this petition, the ERC was composed of Commissioner Fe B. Barin and Deputy
Commissioners Carlos R. Alindada, Leticia V. Ibay, Oliver B. Butalid, and Mary Anne B. Colayco(collectively,
Commissioners). The Commissioners assumed office on 15 August 2001. Pursuant to Section 38 of RA 9136,
the Commissioners issued the proposed Table of Organization, Staffing Pattern, and Salary Structure on 25
September 2001 which the President of the Philippines approved on 13 November 2001. Meanwhile, KERB
submitted to the Commissioners its Resolution No. 2001-02 on 13 September 2001. Resolution No. 2001-02
requested the Commissioners for an opportunity to be informed on the proposed plantilla positions with their
equivalent qualification standards.
those who opted to retire or be separated constituted about ninety six (96%) percent of
the entire ERB employees. The list of the ERB employees appointed to new positions
in the ERC is attached hereto as Annex 1. Only eight (8) ERB employees could not be
appointed to new positions due to the reduction of the ERC plantilla and the absence of
positions appropriate to their respective qualifications and skills. The appropriate notice
was issued to each of them informing them of their separation from the service and
assuring them of their entitlement to separation pay and other benefits in accordance
with existing laws.[3]
The Issues
KERB raises the following issues before this Court:
1. Whether Section 38 of RA 9136 abolishing the ERB is constitutional; and

On 17 October 2001, the Commissioners issued the guidelines for the selection and hiring of ERC 2. Whether the Commissioners of the ERC were correct in disregarding and
employees. A portion of the guidelines reflects the Commissioners view on the selection and hiring of the ERC considering merelysuppletory in character the protective mantle of RA 6656
employees vis-a-vis Civil Service rules, thus: as to the ERB employees or petitioner in this case.[4]

Since R.A. 9136 has abolished the Energy Regulatory Board (ERB), it is the view of The Ruling of the Court
the Commission that the provisions of Republic Act No. 6656 (An Act to Protect the
Security of [Tenure of] Civil Service Officers and Employees in the Implementation of The petition has no merit.
Government Reorganization) will not directly apply to ERCscurrent efforts to establish a
new organization. Civil Service laws, rules and regulations, however, will We disregard the procedural defects in the petition, such as KERBs personality to file the petition on behalf of
havesuppletory application to the extent possible in regard to the selection and its alleged members and Elmar Agirs authority to institute the action, because of the demands of public
placement of employees in the ERC.[2] (Emphasis supplied) interest.[5]

Constitutionality of the ERBs Abolition

On 5 November 2005, KERB sent a letter to the Commissioners stating the KERB members objection to the
and the ERCs Creation
Commissioners stand that Civil Service laws, rules and regulations have suppletory application in the selection
and placement of the ERC employees. KERB asserted that RA 9136 did not abolish the ERB or change
All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there must be a clear and
the ERBs character as an economic regulator of the electric power industry. KERB insisted that RA 9136
unequivocal breach of the Constitution. KERB failed to show any breach of the Constitution.
merely changed the ERBs name to the ERC and expanded the ERBs functions and objectives.KERB sent the
Commissioners yet another letter on 13 November 2001. KERB made a number of requests: (1) the issuance
A public office is created by the Constitution or by law or by an officer or tribunal to which the power to create
of a formal letter related to the date of filing of job applications, including the use of Civil Service application
the office has been delegated by the legislature. [6] The power to create an office carries with it the power to
form no. 212; (2) the creation of a placement/recruitment committee and setting guidelines relative to its
abolish. President Corazon C. Aquino, then exercising her legislative powers, created the ERB by issuing
functions, without prejudice to existing Civil Service rules and regulations; and (3) copies of
Executive Order No. 172 on 8 May 1987.
the plantilla positions and their corresponding qualification standards duly approved by either the President of
the Philippines or the Civil Service Commission (CSC).
The question of whether a law abolishes an office is a question of legislative intent. There should not be any
controversy if there is an explicit declaration of abolition in the law itself. [7] Section 38 of RA 9136 explicitly
Commissioner Barin replied to KERBs letter on 15 November 2001. She stated that Civil Service application
abolished the ERB. However, abolition of an office and its related positions is different from removal of an
form no. 212 and the ERC-prescribed application format are substantially the same.Furthermore, the creation
incumbent from his office. Abolition and removal are mutually exclusive concepts. From a legal standpoint,
of a placement/recruitment committee is no longer necessary because there is already a prescribed set of
there is no occupant in an abolished office. Where there is no occupant, there is no tenure to speak of. Thus,
guidelines for the recruitment of personnel. The ERC hired an independent consultant to administer the
impairment of the constitutional guarantee of security of tenure does not arise in the abolition of an office. On
necessary tests for the technical and managerial levels. Finally, the ERC already posted the plantilla positions,
the other hand, removal implies that the office and its related positions subsist and that the occupants are
which prescribe higher standards, as approved by the Department of Budget and
merely separated from their positions.[8]
Management. Commissioner Barin stated that positions in the ERC do not need the prior approval of the CSC,
as the ERC is only required to submit the qualification standards to the CSC.
A valid order of abolition must not only come from a legitimate body, it must also be made in good faith.An
abolition is made in good faith when it is not made for political or personal reasons, or when it does not
On 5 December 2001, the ERC published a classified advertisement in the Philippine Star. Two days later, the
circumvent the constitutional security of tenure of civil service employees. [9] Abolition of an office may be
CSC received a list of vacancies and qualification standards from the ERC. The ERC formed a Selection
brought about by reasons of economy, or to remove redundancy of functions, or a clear and explicit
Committee to process all applications.
constitutional mandate for such termination of employment. [10] Where one office is abolished and replaced with
another office vested with similar functions, the abolition is a legal nullity. [11] When there is a void abolition, the
KERB, fearful of the uncertainty of the employment status of its members, filed the present petition on 20
incumbent is deemed to have never ceased holding office.
December 2001. KERB later filed an Urgent Ex Parte Motion to Enjoin Termination of Petitioner ERB
Employees on 2 January 2002. However, before the ERC received KERBs pleadings, the Selection
KERB asserts that there was no valid abolition of the ERB but there was merely a reorganization done in bad
Committee already presented its list of proposed appointees to the Commissioners.
faith. Evidences of bad faith are enumerated in Section 2 of Republic Act No. 6656 (RA 6656), [12]Section 2 of
RA 6656 reads:
In their Comment, the Commissioners describe the status of the ERB employees appointment in the ERC as
follows:
No officer or employee in the career service shall be removed except for a valid cause
and after due notice and hearing. A valid cause for removal exists when, pursuant to
As of February 1, 2002, of the two hundred twelve (212) ERB employees, one hundred
a bona fide reorganization, a position has been abolished or rendered redundant or
thirty eighty [sic] (138) were rehired and appointed to ERC plantilla positions and sixty
there is a need to merge, divide, or consolidate positions in order to meet the
six (66) opted to retire or be separated from the service. Those who were rehired and
exigencies of the service, or other lawful causes allowed by the Civil Service Law. The
 existence of any or some of the following circumstances may be considered as
evidence of bad faith in the removals made as a result of reorganization, giving rise to
a claim for reinstatement or reappointment by an aggrieved party:
(a) Where there is a significant increase in the number of positions in the new staffing
pattern of the department or agency concerned;
(b) Where an office is abolished and another performing substantially the same
functions is created;
(c) Where incumbents are replaced by those less qualified in terms of status of
appointment, performance and merit;
(d) Where there is a reclassification of offices in the department or agency concerned
and the reclassified offices perform substantially the same function as the original
offices;
(e) Where the removal violates the order of separation provided in Section 3 hereof.
KERB claims that the present case falls under the situation described in Section 2(b) of RA 6656. We thus
need to compare the provisions enumerating the powers and functions of the ERB and the ERC to see
whether they have substantially the same functions. Under Executive Order No. 172, the ERB has the
following powers and functions:
SEC. 3. Jurisdiction, Powers and Functions of the Board. When warranted and only
when public necessity requires, the Board may regulate the business of importing,
exporting, re-exporting, shipping, transporting, processing, refining, marketing and
distributing energy resources. Energy resource means any substance or phenomenon
which by itself or in combination with others, or after processing or refining or the
application to it of technology, emanates, generates or causes the emanation or
generation of energy, such as but not limited to, petroleum or petroleum products, coal,
marsh gas, methane gas, geothermal and hydroelectric sources of energy, uranium
and other similar radioactive minerals, solar energy, tidal power, as well as non-
conventional existing and potential sources.
The Board shall, upon proper notice and hearing, exercise the following, among other
powers and functions:
On the other hand, Section 43 of RA 9136 enumerates the basic functions of the ERC.
(a) Fix and regulate the prices of petroleum products;
(b) Fix and regulate the rate schedule or prices of piped gas to be charged by duly
franchised gas companies which distribute gas by means of underground pipe system;
(c) Fix and regulate the rates of pipeline concessionaires under the provisions of
Republic Act No. 387, as amended, otherwise known as the Petroleum Act of 1949, as
amended by Presidential Decree No. 1700;
(d) Regulate the capacities of new refineries or additional capacities of existing
refineries and license refineries that may be organized after the issuance of this
Executive Order, under such terms and conditions as are consistent with the national
interest;
(e) Whenever the Board has determined that there is a shortage of any petroleum
product, or when public interest so requires, it may take such steps as it may consider
necessary, including the temporary adjustment of the levels of prices of petroleum
products and the payment to the Oil Price Stabilization Fund created under
Presidential Decree No. 1956 by persons or entities engaged in the petroleum industry
of such amounts as may be determined by the Board, which will enable the importer to
recover its cost of importation.
SEC. 4. Reorganized or Abolished Agency. (a) The Board of Energy is hereby
reconstituted into the Energy Regulatory Board, and the formers powers and functions
under Republic Act No. 6173, as amended by Presidential Decree No. 1208, as
amended, are transferred to the latter.
(b) The regulatory and adjudicatory powers and functions exercised by the Bureau of
Energy Utilization under Presidential Decree No. 1206, as amended, are transferred to
the Board, the provisions of Executive Order No. 131 notwithstanding.
SEC. 5. Other Transferred Powers and Functions. The power of the Land
Transportation Commission to determine, fix and/or prescribe rates or charges
pertaining to the hauling of petroleum products are transferred to the Board. The power
to fix and regulate the rates or charges pertinent to shipping or transporting of
petroleum products shall also be exercised by the Board.
The foregoing transfer of powers and functions shall include applicable funds and
appropriations, records, equipment, property and such personnel as may be
necessary; Provided, That with reference to paragraph (b) of Section 4 hereof, only
such amount of funds and appropriations of the Bureau of Energy Utilization, as well as
only the personnel thereof who are completely or primarily involved in the exercise by
said Bureau of its regulatory and adjudicatory powers and functions, shall be affected
by such transfer: Provided, further, That the funds and appropriations as well as the
records, equipment, property and all personnel of the reorganized Board of Energy
shall be transferred to the Energy Regulatory Board.
SEC. 6. Power to Promulgate Rules and Perform Other Acts. The Board shall have
the power to promulgate rules and regulations relevant to procedures governing
hearings before it and enforce compliance with any rule, regulation, order or other
requirements: Provided, That said rules and regulations shall take effect fifteen (15)
days after publication in the Official Gazette. It shall also perform such other acts as
may be necessary or conducive to the exercise of its powers and functions, and the
attainment of the purposes of this Order.
SEC. 43. Functions of the ERC. The ERC shall promote competition, encourage
market development, ensure customer choice and discourage/penalize abuse of
market power in the restructured electricity industry. In appropriate cases, the ERC is
authorized to issue cease and desist order after due notice and hearing. Towards this
end, it shall be responsible for the following key functions in the restructured industry:
(a) Enforce the implementing rules and regulations of this Act;
(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in
accordance with law, a National Grid Code and a Distribution Code which shall include,
but not limited to, the following:
(i) Performance standards for TRANSCO O & M Concessionaire,
distribution utilities and suppliers:Provided, That in the establishment of the
performance standards, the nature and function of the entities shall be
considered; and
 (ii) Financial capability standards for the generating companies, the
TRANSCO, distribution utilities and suppliers: Provided, That in the
formulation of the financial capability standards, the nature and function of
the entity shall be considered: Provided, further, That such standards are
set to ensure that the electric power industry participants meet the minimum
financial standards to protect the public interest. Determine, fix, and
approve, after due notice and public hearings the universal charge, to be
imposed on all electricity end-users pursuant to Section 34 hereof;
(c) Enforce the rules and regulations governing the operations of the electricity spot
market and the activities of the spot market operator and other participants in the spot
market, for the purpose of ensuring a greater supply and rational pricing of electricity;
(d) Determine the level of cross subsidies in the existing retail rate until the same is
removed pursuant to Section 73 hereof;
(e) Amend or revoke, after due notice and hearing, the authority to operate of any
person or entity which fails to comply with the provisions hereof, the IRR or any order
or resolution of the ERC. In the event a divestment is required, the ERC shall allow the
affected party sufficient time to remedy the infraction or for an orderly disposal, but
shall in no case exceed twelve (12) months from the issuance of the order;
(f) In the public interest, establish and enforce a methodology for setting transmission
and distribution wheeling rates and retail rates for the captive market of a distribution
utility, taking into account all relevant considerations, including the efficiency or
inefficiency of the regulated entities. The rates must be such as to allow the recovery of
just and reasonable costs and a reasonable return on rate base (RORB) to enable the
entity to operate viably. The ERC may adopt alternative forms of internationally-
accepted rate setting methodology as it may deem appropriate. The rate-setting
methodology so adopted and applied must ensure a reasonable price of electricity. The
rates prescribed shall be non-discriminatory. To achieve this objective and to ensure
the complete removal of cross subsidies, the cap on the recoverable rate of system
losses prescribed in Section 10 of Republic Act No. 7832, is hereby amended and shall
be replaced by caps which shall be determined by the ERC based on load density,
sales mix, cost of service, delivery voltage and other technical considerations it may
promulgate. The ERC shall determine such form of rate-setting methodology, which
shall promote efficiency. In case the rate setting methodology used is RORB, it shall be
subject to the following guidelines:
(i) For purposes of determining the rate base, the TRANSCO or any
distribution utility may be allowed to revalue its eligible assets not more
than once every three (3) years by an independent appraisal
company: Provided, however, That ERC may give an exemption in case of
unusual devaluation: Provided, further, That the ERC shall exert efforts to
minimize price shocks in order to protect the consumers;
(ii) Interest expenses are not allowable deductions from permissible return
on rate base;
(iii) In determining eligible cost of services that will be passed on to the end-
users, the ERC shall establish minimum efficiency performance standards
for the TRANSCO and distribution utilities including systems losses,
interruption frequency rates, and collection efficiency;
(iv) Further, in determining rate base, the TRANSCO or any distribution
utility shall not be allowed to include management inefficiencies like cost of
project delays not excused by force majeure, penalties and related interest
during construction applicable to these unexcused delays; and
(v) Any significant operating costs or project investments of TRANSCO and
distribution utilities which shall become part of the rate base shall be subject
to the verification of the ERC to ensure that the contracting and
procurement of the equipment, assets and services have been subjected to
transparent and accepted industry procurement and purchasing practices to
protect the public interest.
(g) Three (3) years after the imposition of the universal charge, ensure that the charges
of the TRANSCO or any distribution utility shall bear no cross subsidies between grids,
within grids, or between classes of customers, except as provided herein;
(h) Review and approve any changes on the terms and conditions of service of the
TRANSCO or any distribution utility;
(i) Allow the TRANSCO to charge user fees for ancillary services to all electric power
industry participants or self-generating entities connected to the grid. Such fees shall
be fixed by the ERC after due notice and public hearing;
(j) Set a lifeline rate for the marginalized end-users;
(k) Monitor and take measures in accordance with this Act to penalize abuse of market
power, cartelization, and anti-competitive or discriminatory behavior by any electric
power industry participant;
(l) Impose fines or penalties for any non-compliance with or breach of this Act, the IRR
of this Act and the rules and regulations which it promulgates or administers;
(m) Take any other action delegated to it pursuant to this Act;
(n) Before the end of April of each year, submit to the Office of the President of the
Philippines and Congress, copy furnished the DOE, an annual report containing such
matters or cases which have been filed before or referred to it during the preceding
year, the actions and proceedings undertaken and its decision or resolution in each
case. The ERC shall make copies of such reports available to any interested party
upon payment of a charge which reflects the printing costs. The ERC shall publish all
its decisions involving rates and anticompetitive cases in at least one (1) newspaper of
general circulation, and/or post electronically and circulate to all interested electric
power industry participants copies of its resolutions to ensure fair and impartial
treatment;
(o) Monitor the activities of the generation and supply of the electric power industry with
the end in view of promoting free market competition and ensuring that the allocation or
pass through of bulk purchase cost by distributors is transparent, non-discriminatory
and that any existing subsidies shall be divided pro rata among all retail suppliers;
(p) Act on applications for or modifications of certificates of public convenience and/or
necessity, licenses or permits of franchised electric utilities in accordance with law and
revoke, review and modify such certificates, licenses or permits in appropriate cases,
such as in cases of violations of the Grid Code, Distribution Code and other rules and
regulations issued by the ERC in accordance with law;
(q) Act on applications for cost recovery and return on demand side management
projects;
 (r) In the exercise of its investigative and quasi-judicial powers, act against any
participant or player in the energy sector for violations of any law, rule and regulation
governing the same, including the rules on cross ownership, anticompetitive practices,
abuse of market positions and similar or related acts by any participant in the energy
sector, or by any person as may be provided by law, and require any person or entity to
submit any report or data relative to any investigation or hearing conducted pursuant to
this Act;
(s) Inspect, on its own or through duly authorized representatives, the premises, books
of accounts and records of any person or entity at any time, in the exercise of its quasi-
judicial power for purposes of determining the existence of any anticompetitive
behavior and/or market power abuse and any violation of rules and regulations issued
by the ERC;
(t) Perform such other regulatory functions as are appropriate and necessary in order
to ensure the successful restructuring and modernization of the electric power industry,
such as, but not limited to, the rules and guidelines under which generation companies,
distribution utilities which are not publicly listed shall offer and sell to the public a
portion not less than fifteen percent (15%) of their common shares of stocks:Provided,
however, That generation companies, distribution utilities or their respective holding
companies that are already listed in the PSE are deemed in compliance. For existing
companies, such public offering shall be implemented not later than five (5) years from
the effectivity of this Act. New companies shall implement their respective public
offerings not later than five (5) years from the issuance of their certificate of
compliance; and
(u) The ERC shall have the original and exclusive jurisdiction over all cases contesting
rates, fees, fines and penalties imposed by the ERC in the exercise of the
abovementioned powers, functions and responsibilities and over all cases involving
disputes between and among participants or players in the energy sector.
All notices of hearings to be conducted by the ERC for the purpose of fixing rates or
fees shall be published at least twice for two successive weeks in two (2) newspapers
of nationwide circulation.
Aside from Section 43, additional functions of the ERC are scattered throughout RA 9136:
1. SEC. 6. Generation Sector. Generation of electric power, a business
affected with public interest, shall be competitive and open.
Upon the effectivity of this Act, any new generation company shall, before it
operates, secure from the Energy Regulatory Commission (ERC) a
certificate of compliance pursuant to the standards set forth in this Act, as
well as health, safety and environmental clearances from the appropriate
government agencies under existing laws.
xxxx
2. SEC. 8. Creation of the National Transmission Company. x x x
That the subtransmission assets shall be operated and maintained by
TRANSCO until their disposal to qualified distribution utilities which are in a
position to take over the responsibility for operating, maintaining,
upgrading, and expanding said assets. x x x
In case of disagreement in valuation, procedures, ownership participation
and other issues, the ERC shall resolve such issues.
xxxx
3. SEC. 23. Functions of Distribution Utilities. x x x
Distribution utilities shall submit to the ERC a statement of their compliance
with the technical specifications prescribed in the Distribution Code and the
performance standards prescribed in the IRR of this Act. Distribution
utilities which do not comply with any of the prescribed technical
specifications and performance standards shall submit to the ERC a plan
to comply, within three (3) years, with said prescribed technical
specifications and performance standards. The ERC shall, within sixty (60)
days upon receipt of such plan, evaluate the same and notify the
distribution utility concerned of its action. Failure to submit a feasible and
credible plan and/or failure to implement the same shall serve as grounds
for the imposition of appropriate sanctions, fines or penalties.
xxxx
4. SEC. 28. De-monopolization and Shareholding Dispersal. In compliance
with the constitutional mandate for dispersal of ownership and de-
monopolization of public utilities, the holdings of persons, natural or
juridical, including directors, officers, stockholders and related interests, in a
distribution utility and their respective holding companies shall not exceed
twenty-five (25%) percent of the voting shares of stock unless the utility or
the company holding the shares or its controlling stockholders are already
listed in the Philippine Stock Exchange (PSE): Provided, That controlling
stockholders of small distribution utilities are hereby required to list in the
PSE within five (5) years from the enactment of this Act if they already own
the stocks. New controlling stockholders shall undertake such listing within
five (5) years from the time they acquire ownership and control. A small
distribution company is one whose peak demand is equal to Ten megawatts
(10MW).
The ERC shall, within sixty (60) days from the effectivity of this Act,
promulgate the rules and regulations to implement and effect this
provision.
xxxx
5. SEC. 29. Supply Sector. x x x all suppliers of electricity to the
contestable market shall require a license from the ERC.
For this purpose, the ERC shall promulgate rules and regulations
prescribing the qualifications of electricity suppliers which shall include,
among other requirements, a demonstration of their technical capability,
financial capability, and creditworthiness: Provided, That the ERC shall
have authority to require electricity suppliers to furnish a bond or other
evidence of the ability of a supplier to withstand market disturbances or
other events that may increase the cost of providing service.
xxxx
6. SEC. 30. Wholesale Electricity Spot Market. x x x
Subject to the compliance with the membership criteria, all generating
companies, distribution utilities, suppliers, bulk consumers/end-users and
other similar entities authorized by the ERC shall be eligible to become
members of the wholesale electricity spot market.
 The ERC may authorize other similar entities to become eligible as
members, either directly or indirectly, of the wholesale electricity spot
market.
xxxx
7. SEC. 31. Retail Competition and Open Access. x x x
Upon the initial implementation of open access, the ERC shall allow all
electricity end-users with a monthly average peak demand of at least one
megawatt (1MW) for the preceding twelve (12) months to be the
contestable market. xxx Subsequently and every year thereafter, the ERC
shall evaluate the performance of the market. x x x
8. SEC. 32. NPC Stranded Debt and Contract Cost Recovery. x x x
The ERC shall verify the reasonable amounts and determine the manner
and duration for the full recovery of stranded debt and stranded contract
costs as defined herein x x x x
9. SEC. 34. Universal Charge. Within one (1) year from the effectivity of
this Act, a universal charge to be determined, fixed and approved by the
ERC, shall be imposed on all electricity end-users x x x x
10. SEC. 35. Royalties, Returns and Tax Rates for Indigenous Energy
Resources. x x x
To ensure lower rates for end-users, the ERC shall forthwith reduce the
rates of power from all indigenous sources of energy.
11. SEC. 36. Unbundling of Rates and Functions. x x x
each distribution utility shall file its revised rates for the approval by the
ERC. x x x x
12. SEC. 40. Enhancement of Technical Competence. The ERC shall
establish rigorous training programs for its staff for the purpose of
enhancing the technical competence of the ERC in the following areas:
evaluation of technical performance and monitoring of compliance with
service and performance standards, performance-based rate-setting
reform, environmental standards and such other areas as will enable the
ERC to adequately perform its duties and functions.
13. SEC. 41. Promotion of Consumer Interests. The ERC shall handle
consumer complaints and ensure the adequate promotion of consumer
interests.
14. SEC. 45. Cross Ownership, Market Power Abuse and Anti-Competitive
Behavior. No participant in the electricity industry may engage in any
anti-competitive behavior including, but not limited to, cross-subsidization,
price or market manipulation, or other unfair trade practices detrimental to
the encouragement and protection of contestable markets.
xxxx
(c) x x x The ERC shall, within one (1) year from the effectivity of this Act,
promulgate rules and regulations to promote competition, encourage
market development and customer choice and discourage/penalize abuse
of market power, cartelization and any anticompetitive or discriminatory
behavior, in order to further the intent of this Act and protect the public
interest. Such rules and regulations shall define the following:
(a) the relevant markets for purposes of establishing abuse or misuse of
monopoly or market position;
(b) areas of isolated grids; and
(c) the periodic reportorial requirements of electric power industry
participants as may be necessary to enforce the provisions of this Section.
The ERC shall, motu proprio, monitor and penalize any market power
abuse or anticompetitive or discriminatory act or behavior by any participant
in the electric power industry.
15. SEC. 51. Powers. The PSALM Corp. shall, in the performance of its
functions and for the attainment of its objective, have the following powers:
xxx
(e) To liquidate the NPC stranded contract costs utilizing proceeds from
sales and other property contributed to it, including the proceeds from the
universal charge;
xxxx
16. SEC. 60. Debts of Electric Cooperatives. x x x The ERC shall ensure a
reduction in the rates of electric cooperatives commensurate with the
resulting savings due to the removal of the amortization payments of their
loans. x x x x
17. SEC. 62. Joint Congressional Power Commission. x x x
x x x the Power Commission is hereby empowered to require the DOE,
ERC, NEA, TRANSCO, generation companies, distribution utilities,
suppliers and other electric power industry participants to submit reports
and all pertinent data and information relating to the performance of their
respective functions in the industry. xxx
xxxx
18. SEC. 65. Environmental Protection. Participants in the generation,
distribution and transmission sub-sectors of the industry shall comply with
all environmental laws, rules, regulations and standards promulgated by the
Department of Environment and Natural Resources including, in
appropriate cases, the establishment of an environmental guarantee fund.
19. SEC. 67. NPC Offer of Transition Supply Contracts. Within six (6) months
from the effectivity of this Act, NPC shall file with the ERC for its approval a
transition supply contract duly negotiated with the distribution utilities
containing the terms and conditions of supply and a corresponding
 schedule of rates, consistent with the provisions hereof, including
adjustments and/or indexation formulas which shall apply to the term of
such contracts.
xxxx
20. SEC. 69. Renegotiation of Power Purchase and Energy Conversion
Agreements between Government Entities. Within three (3) months from
the effectivity of this Act, all power purchase and energy conversion
agreements between the PNOC-Energy Development Corporation (PNOC-
EDC) and NPC, including but not limited to the Palimpinon, Tongonan and
Mt. Apo Geothermal complexes, shall be reviewed by the ERC and the
terms thereof amended to remove any hidden costs or extraordinary mark-
ups in the cost of power or steam above their true costs. All amended
contracts shall be submitted to the Joint Congressional Power Commission
for approval. The ERC shall ensure that all savings realized from the
reduction of said mark-ups shall be passed on to all end-users.
After comparing the functions of the ERB and the ERC, we find that the ERC indeed assumed the functions of
the ERB. However, the overlap in the functions of the ERB and of the ERC does not mean that there is no
valid abolition of the ERB. The ERC has new and expanded functions which are intended to meet the
specific needs of a deregulated power industry. Indeed, National Land Titles and Deeds Registration
Administration v. Civil Service Commission stated that:
[I]f the newly created office has substantially new, different or additional functions,
duties or powers, so that it may be said in fact to create an office different from the one
abolished, even though it embraces all or some of the duties of the old office it will be
considered as an abolition of one office and the creation of a new or different one. The
same is true if one office is abolished and its duties, for reasons of economy are given
to an existing officer or office.[13]
KERB argues that RA 9136 did not abolish the ERB nor did it alter its essential character as an economic
regulator of the electric power industry. x x x RA 9136 rather changed merely ERBs name and title to that of
the ERC even as it expanded its functions and objectives to keep pace with the times. To
upholdKERBs argument regarding the invalidity of the ERBs abolition is to ignore the developments in the
history of energy regulation.
The regulation of public services started way back in 1902 with the enactment of Act
No. 520 which created the Coastwise Rate Commission. In 1906, Act No. 1507 was
passed creating the Supervising Railway Expert. The following year, Act No. 1779 was
enacted creating the Board of Rate Regulation. Then, Act No 2307, which was
patterned after the Public Service Law of the State of New Jersey, was approved by the
Philippine Commission in 1914, creating the Board of Public Utility Commissioners,
composed of three members, which absorbed all the functions of the Coastwise Rate
Commission, the Supervising Railway Expert, and the Board of Rate Regulation.
Throughout the years, the scope of the regulation has gradually narrowed from that of public services in 1902
Thereafter, several laws were enacted on public utility regulation. On November 7,
to the electricity industry and water resources in 1972 to the electric power industry and oil industry in 1977 to
1936, Commonwealth Act No. 146, otherwise known as the Public Service Law, was
the electric industry alone in 1998. The ERC retains the ERBs traditional rate and service regulation
enacted by the National Assembly. The Public Service Commission (PSC) had
functions. However, the ERC now also has to promote competitive operations in the electricity market. RA
jurisdiction, supervision, and control over all public services, including the electric
9136 expanded the ERCs concerns to encompass both the consumers and the utility investors.
power service.
After almost four decades, significant developments in the energy sector changed the
landscape of economic regulation in the country.
April 30, 1971 R.A. No. 6173 was passed creating the Oil Industry
Commission (OIC), which was tasked to regulate the oil industry and to
ensure the adequate supply of petroleum products at reasonable prices.
September 24, 1972 then President Ferdinand E. Marcos issued
Presidential Decree No. 1 which ordered the preparation of the Integrated
Reorganization Plan by the Commission on Reorganization. The Plan
abolished the PSC and transferred the regulatory and adjudicatory
functions pertaining to the electricity industry and water resources to then
Board of Power and Waterworks (BOPW).
October 6, 1977 the government created the Department of Energy
(DOE) and consequently abolished the OIC, which was replaced by the
creation of the Board of Energy (BOE) through Presidential Decree No.
1206. The BOE, in addition, assumed the powers and functions of the
BOPW over the electric power industry.
May 8, 1987 the BOE was reconstituted into the Energy Regulatory
Board (ERB), pursuant to Executive Order No. 172 issued by then
President Corazon C. Aquino as part of her governments reorganization
program. The rationale was to consolidate and entrust into a single body all
the regulatory and adjudicatory functions pertaining to the energy sector.
Thus, the power to regulate the power rates and services of private electric
utilities was transferred to the ERB.
December 28, 1992 Republic Act No. 7638 signed, where the power to
fix the rates of the National Power Corporation (NPC) and the rural electric
cooperatives (RECs) was passed on to the ERB. Non-pricing functions of
the ERB with respect to the petroleum industry were transferred to the
DOE, i.e., regulating the capacities of new refineries.
February 10, 1998 enactment of Republic Act 8479: Downstream Oil
Industry Deregulation Act of 1998, which prescribed a five-month transition
period, before full deregulation of the oil industry, during which ERB would
implement an automatic pricing mechanism (APM) for petroleum products
every month.
June 12, 1998 the Philippine oil industry was fully deregulated,
thus, ERBs focus of responsibility centered on the electric industry.
June 8, 2001 enactment of Republic Act No. 9136, otherwise known as
the Electric Power Industry Reform Act (EPIRA) of 2001. The Act abolished
the ERB and created in its place the Energy Regulatory Commission (ERC)
which is a purely independent regulatory body performing the combined
quasi-judicial, quasi-legislative and administrative functions in the electric
industry.[14]
Thus, the EPIRA provides a framework for the restructuring of the industry, including
the privatization of the assets of the National Power Corporation (NPC), the transition
to a competitive structure, and the delineation of the roles of various government
agencies and the private entities. The law ordains the division of the industry into four
(4) distinct sectors, namely: generation, transmission, distribution and
supply. Corollarily, the NPC generating plants have to privatized and its transmission
business spun off and privatized thereafter.
 In tandem with the restructuring of the industry is the establishment of a strong and Applicable to All Constitutional Offices Enjoying Fiscal Autonomy. The last portion of
purely independent regulatory body. Thus, the law created the ERC in place of the Article XXXIII covers the appropriations of the CHR. These special provisions state:
Energy Regulatory Board (ERB).
1. Organizational Structure. Any provision of law to the
contrary notwithstanding and within the limits of their
To achieve its aforestated goal, the law has reconfigured the organization of the respective appropriations as authorized in this Act, the
regulatory body. x x x[15] Constitutional Commissions and Offices enjoying fiscal
autonomy are authorized to formulate and implement the
organizational structures of their respective offices, to fix
and determine the salaries, allowances, and other
There is no question in our minds that, because of the expansion of the ERCs functions and concerns, there
benefits of their personnel, and whenever public interest
was a valid abolition of the ERB. Thus, there is no merit to KERBs allegation that there is an impairment of the
so requires, make adjustments in their personal services
security of tenure of the ERBs employees.
itemization including, but not limited to, the transfer of
item or creation of new positions in their respective
WHEREFORE, we DISMISS the petition. No costs.
offices:PROVIDED, That officers and employees whose
positions are affected by suchreorganization or
SO ORDERED.
adjustments shall be granted retirement gratuities and
separation pay in accordance with existing laws, which
shall be payable from any unexpended balance of,
SPECIAL SECOND DIVISION orsavings in the appropriations of their respective offices:
PROVIDED, FURTHER, That the implementation hereof
COMMISSION ON HUMAN RIGHTS EMPLOYEES G.R. No. 155336 shall be in accordance with salary rates, allowances and
ASSOCIATION (CHREA) Represented by its President, other benefits authorized under compensation
MARCIAL A. SANCHEZ, JR., Present: standardization laws.
Petitioner,
PUNO, 2. Use of Savings. The Constitutional Commissions and
Chairman, Offices enjoying fiscal autonomy are hereby authorized to
- versus - AUSTRIA-MARTINEZ, use savings in their respective appropriations for: (a)
CALLEJO, SR., printing and/or publication of decisions, resolutions, and
TINGA, and training information materials; (b) repair, maintenance and
COMMISSION ON HUMAN RIGHTS, CHICO-NAZARIO, JJ. improvement of central and regional offices, facilities and
Respondent. equipment; (c) purchase of books, journals, periodicals
Promulgated: and equipment; (d) necessary expenses for the
employment of temporary, contractual and casual
July 21, 2006 employees; (e) payment of extraordinary and
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x miscellaneous expenses, commutable representation and
transportation allowances, and fringe benefits for their
officials and employees as may be authorized by law;
R E S O L U T I ON and (f) other official purposes, subject to accounting and
auditing rules and regulations. (Emphasis supplied)

CHICO-NAZARIO, J.: On the strength of this special provisions, the Commission on Human
Rights [or CHR], through its then Chairperson Aurora P. Navarette-Recia and
On 25 November 2004, the Court promulgated its Decision [1] in the above-entitled case, ruling in Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras, Vicente P. Sibulo,
favor of the petitioner. The dispositive portion reads as follows: and Jorge R. Coquia, promulgated Resolution No. A98-047 on 04 September 1998,
adopting an upgrading and reclassification scheme among selected positions in the
WHEREFORE, the petition is GRANTED, the Decision dated 29 November Commission, to wit:
2001 of the Court of Appeals in CA-G.R. SP No. 59678 and its Resolution dated 11
September 2002 are hereby REVERSED andSET ASIDE. The ruling dated 29 March WHEREAS, the General Appropriations Act, FY 1998, R.A. No.
1999 of the Civil Service Commission-National Capital Region is REINSTATED. The 8522 has provided special provisions applicable to all
Commission on Human Rights Resolution No. A98-047 dated 04 September 1998, Constitutional Offices enjoying Fiscal Autonomy, particularly on
Resolution No. A98-055 dated 19 October 1998 and Resolution No. A98-062 dated 17 organizational structures and authorizes the same to formulate
November 1998without the approval of the Department of Budget and Management and implement the organizational structures of their respective
are disallowed. No pronouncement as to costs.[2] offices to fix and determine the salaries, allowances and other
benefits of their respective personnel and whenever public
interest so requires, make adjustments in the personnel
A Motion for Reconsideration[3] was consequently filed by the respondent to which petitioner filed services itemization including, but not limited to, the transfer of
an Opposition.[4] item or creation of new positions in their respective
offices: PROVIDED, That officers and employees whose
In its Motion, respondent prays in the main that this Court reconsiders its ruling that respondent is positions are affected by such reorganization or adjustments
not among the constitutional bodies clothed with fiscal autonomy. shall be granted retirement gratuities and separation pay in
accordance with existing laws, which shall be payable from any
To recall, the facts[5] of the case are as follows: unexpanded balance of, or savings in the appropriations of their
respective offices;
On 14 February 1998, Congress passed Republic Act No. 8522, otherwise
known as the General Appropriations Act of 1998. It provided for Special Provisions WHEREAS, the Commission on Human Rights is a member of
the Constitutional Fiscal Autonomy Group (CFAG) and on July
 24, 1998, CFAG passed an approved Joint Resolution No. 49
adopting internal rules implementing the special provisions
heretoforth mentioned;
NOW THEREFORE, the Commission by virtue of its fiscal
autonomy hereby approves and authorizes the upgrading and
augmentation of the commensurate amount generated from
savings under Personal Services to support the implementation
of this resolution effective Calendar Year 1998;
Let the Human Resources Development Division (HRDD)
prepare the necessary Notice of Salary Adjustment and other
appropriate documents to implement this resolution; x x x
(Emphasis supplied).
Annexed to said resolution is the proposed creation of ten additional
plantilla positions, namely: one Director IV position, with Salary Grade 28 for the
Caraga Regional Office, four Security Officer II with Salary Grade 15, and five Process
Servers, with Salary Grade 5 under the Office of the Commissioners.
On 19 October 1998, CHR issued Resolution No. A98-055 providing for the
upgrading or raising of salary grade of the following positions in the Commission:
xxxx
To support the implementation of such scheme, the CHR, in the same
resolution, authorized the augmentation of a commensurate amount generated from
savings under Personnel Services.
By virtue of Resolution No. A98-062 dated 17 November 1998, the CHR
collapsed the vacant positions in the body to provide additional source of funding for
said staffing modification. Among the positions collapsed were: one Attorney III, four
Attorney IV, one Chemist III, three Special Investigator I, one Clerk III, and one
accounting Clerk II.
The CHR forwarded said staffing modification and upgrading scheme to the
Department of Budget and Management [DBM] with a request for its approval, but the
DBM secretary Benjamin Diokno denied the request on the following justification:
. . . Based on the evaluations made the request was not favorably
considered as it effectively involved the elevation of the field units from divisions to
services.
The present proposal seeks further to upgrade the twelve (12) positions of
Attorney VI, SG-26 to Director IV, SG-28. This would elevate the field units to a bureau
or regional office, a level even higher than the one previously denied.
The request to upgrade the three (3) positions of Director III, SG-27 to
Director IV, SG-28, in the Central Office in effect would elevate the services to Office
and change the context from support to substantive without actual change in functions.
In the absence of a specific provision of law which may be used as a legal
basis to elevate the level of divisions to a bureau or regional office, and the services to
offices, we reiterate our previous stand denying the upgrading of the twelve (12)
positions of Attorney VI, SG-26 to Director III, SG-27 or Director IV, SG-28, in the Field
Operations Office (FOO) and three (3) Director III, SG-27 to Director IV, SG-28 in the
Central Office.
As represented, President Ramos then issued a Memorandum to the DBM
Secretary dated 10 December 1997, directing the latter to increase the number of
Plantilla positions in the CHR both Central and Regional Offices to implement the
Philippine Decade Plan on Human Rights Education, the Philippine Human Rights Plan
and Barangay Rights Actions Center in accordance with existing laws. (Emphasis in
the original)
Pursuant to Section 78 of the General Provisions of the General
Appropriations Act (GAA) FY 1998, no organizational unit or changes in key positions
shall be authorized unless provided by law or directed by the President, thus, the
creation of a Finance Management Office and a Public Affairs Office cannot be given
favorable recommendation.
Moreover, as provided under Section 2 of RA No. 6758, otherwise known
as the Compensation Standardization Law, the Department of Budget and
Management is directed to establish and administer a unified compensation and
position classification system in the government. The Supreme Court ruled in the case
of Victorina Cruz vs. Court of Appeals, G.R. No. 119155, dated January 30, 1996, that
this Department has the sole power and discretion to administer the compensation and
position classification system of the National Government.
Being a member of the fiscal autonomy group does not vest the agency
with the authority to reclassify, upgrade, and create positions without approval of the
DBM. While the members of the Group are authorized to formulate and implement the
organizational structures of their respective offices and determine the compensation of
their personnel, such authority is not absolute and must be exercised within the
parameters of the Unified Position Classification and Compensation System
established under RA 6758 more popularly known as the Compensation
Standardization Law. We therefore reiterate our previous stand on the
matter. (Emphasis supplied)
In light of the DBMs disapproval of the proposed personnel modification
scheme, the CSC-National Capital Region Office, through a memorandum dated 29
March 1999 recommended to the CSC-Central Office that the subject appointments be
rejected owing to the DBMs disapproval of the plantilla reclassification.
Meanwhile, the officers of petitioner Commission on Human Rights Employees
Association [CHREA], in representation of the rank and file employees of the CHR,
requested the CSC-Central office to affirm the recommendation of the CSC-Regional
Office. CHREA stood its ground in saying that the DBM is the only agency with
appropriate authority mandated by law to evaluate and approve matters of
reclassification and upgrading, as well as creation of positions.
The CSC-Central Office denied CHREAs request in a Resolution dated 16
December 1999, and reversed the recommendation of the CSC-Regional Office that
the upgrading scheme be censured. The decretal portion of which reads:
WHEREFORE, the request of Ronnie N. Rosero, Hubert V.
Ruiz, Flordeliza A. Briones, George Q. Dumlao [and], Corazon
A. Santos-Tiu, is hereby denied.
CHREA filed a motion for reconsideration, but the CSC-Central Office denied the same
on 09 June 2000.
Given the cacophony of judgments between the DBM and the CSC, petitioner CHREA
elevated the matter to the Court of Appeals. The Court of Appeals affirmed the
pronouncement of the CSC-Central Office and upheld the validity of the upgrading,
retitling, and reclassification scheme in the CHR on the justification that such action is
within the ambit of CHRs fiscal autonomy. The fallo of the Court of Appeals decision
provides:
IN VIEW OF ALL THE FOREGOING, the instant
petition is ordered DISMISSED and the questioned Civil Service
Commission Resolution No. 99-2800 dated December 16,
1999 as well as No. 001354 dated June 9, 2000, are hereby
AFFIRMED. No cost.
Unfazed, the petitioner elevated its case to this Court and successfully obtained the favorable
action in its Decision dated 25 November 2004. In its Motion for Reconsideration of the said Decision, the
respondent defined the assignment of errors [6] for resolution, namely:
I. WITH ALL DUE RESPECT, THE SECOND DIVISION OF THE HONORABLE
SUPREME COURT GRAVELY AND SERIOUSLY ERRED WHEN IT RULED
THAT THERE IS NO LEGAL BASIS TO SUPPORT THE CONTENTION THAT
THE CHR ENJOYS FISCAL AUTONOMY.
 II. WITH ALL DUE RESPECT, THE SECOND DIVISION OF THE HONORABLE
SUPREME COURT ERRED IN STATING THAT THE SPECIAL PROVISION OF
THE REP. ACT. (SIC) NO. 8522 DID NOT SPECIFICALLY MENTION CHR AS
AMONG THOSE OFFICES TO WHICH THE SPECIAL PROVISION TO
FORMULATE AND IMPLEMENT ORGANIZATIONAL STRUCTURES APPLY,
BUT MERELY STATES ITS COVERAGE TO INCLUDE CONSTITUTIONAL
COMMISSIONS AND OFFICES ENJOYING FISCAL AUTONOMY;
III. WITH ALL DUE RESPECT, THE SECOND DIVISION OF THE HONORABLE
SUPREME COURT ERRED WHEN IT RULED THAT THE CHR ALTHOUGH
ADMITTEDLY A CONSTITUTIONAL CREATION IS NONETHELESS NOT
INCLUDED IN THE GENUS OF THE OFFICES ACCORDED FISCAL
AUTONOMY BY CONSTITUTIONAL OR LEGISLATIVE FIAT.
IV. WITH ALL DUE RESPECT, THE SECOND DIVISION OF THE HONORABLE
SUPREME COURT ERRED IN DECIDING TO REINSTATE THE RULING
DATED 29 MARCH 1999 OF THE CIVIL SERVICE COMMISSION NATIONAL
CAPITAL REGION;
V. WITH ALL DUE RESPECT, THE SECOND DIVISION OF THE HONORABLE
SUPREME COURT ERRED IN DECIDING TO DISALLOW THE COMMISSION
ON HUMAN RIGHTS RESOLUTION NO. A98-047 DATED SEPTEMBER 04,
1998, RESOLUTION NO. A98-055 DATED 19 OCTOBER 1998 AND
RESOLUTION NO. A98-062 DATED 17 NOVEMBER 1998 WITHOUT THE
APPROVAL OF THE DEPARTMENT OF BUDGET AND MANAGEMENT.
Although this Court may have been persuaded to take a second look at this case and partly modify
the assailed Decision, such modification shall not materially affect the dispositive portion thereof.
As already settled in the assailed Decision of this Court, the creation of respondent may be
constitutionally mandated, but it is not, in the strict sense, a constitutional commission. Article IX of the 1987
Constitution, plainly entitled Constitutional Commissions, identifies only the Civil Service Commission, the
Commission on Elections, and the Commission on Audit. The mandate for the creation of the respondent is
found in Section 17 of Article XIII of the 1987 Constitution on Human Rights, which reads that
Sec. 17. (1) There is hereby created an independent office called the
Commission on Human Rights.
Thus, the respondent cannot invoke provisions under Article IX of the 1987 Constitution on constitutional
commissions for its benefit. It must be able to present constitutional and/or statutory basis particularly
pertaining to it to support its claim of fiscal autonomy.
The 1987 Constitution expressly and unambiguously grants fiscal autonomy only to the Judiciary,
the constitutional commissions, and the Office of the Ombudsman.
The 1987 Constitution recognizes the fiscal autonomy of the Judiciary in Article VIII, Section 3,
reproduced below
Sec. 3. The Judiciary shall enjoy fiscal autonomy. Appropriations for the
Judiciary may not be reduced by the legislature below the amount appropriated for the
previous year and, after approval, shall be automatically and regularly released.
Constitutional commissions are granted fiscal autonomy by the 1987 Constitution in Article IX, Part
A, Section 5, a provision applied in common to all constitutional commissions, to wit
Sec. 5. The Commission shall enjoy fiscal autonomy. Their approved
annual appropriations shall be automatically and regularly released.
The Office of the Ombudsman enjoys fiscal autonomy by virtue of Article XI, Section 14, of the 1987
Constitution, which provides that
Sec. 14. The Office of the Ombudsman shall enjoy fiscal autonomy. Its
approved annual appropriations shall be automatically and regularly released.
Each of the afore-quoted provisions consists of two sentences stating that: (1) The government entity shall
enjoy fiscal autonomy; and (2) its approved annual appropriation shall be automatically and regularly
released. The respondent anchors its claim to fiscal autonomy on the fourth paragraph of Article XIII, Section
17, according to which
Sec. 17. x x x
xxxx
(4) The approved annual appropriations of the Commission shall be
automatically and regularly released.
As compared to the previously quoted Article VIII, Section 3; Article IX, Part A, Section 5; and Article XI,
Section 14 of the 1987 Constitution on the Judiciary, the constitutional commissions, and the Office of the
Ombudsman, respectively, Article XIII, Section 17(4) on the Commission of Human Rights (CHR) evidently
does not contain the first sentence on the express grant of fiscal autonomy, and reproduces only the second
sentence on the automatic and regular release of its approved annual appropriations. Question now arises as
to the significance of such a difference in the way the said provisions are worded.
To settle this ambiguity, a perusal of the records of the Constitutional Commission (ConCom) is enlightening.
During the drafting of Article XIII, Section 17(4), of the 1987 Constitution, the ConCom members
had the following discussion[7]
MR. BENGZON. I have another paragraph, Madam President. This could
be a separate section or another paragraph depending on what the committee desires
and what the Committee on Style would wish: THE COMMISSION SHALL ENJOY
FISCAL AUTONOMY. THE APPROVED ANNUAL APPROPRIATIONS OF THE
COMMISSION SHALL BE AUTOMATICALLY AND REGULARLY RELEASED. It will
align this Human Rights Commission with other commissions that we have created in
the Constitution in order to further insure the independence of the Human Rights
Commission.
MR. DAVIDE. Madam President.
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I introduced that particular amendment yesterday, but there
was a proposed modification presented by Commissioner Maambong to delete the first
sentence. I am in favor of the modification presented earlier. So, may I propose that the
particular amendment should not carry the first sentence, only the second sentence
which reads: THE APPROVED ANNUAL APPROPRIATIONS OF THE COMMISSION
SHALL BE AUTOMATICALLY AND REGULARLY RELEASED.
MR. BENGZON. Why do we want to delete the sentence which says THE
COMMISSION SHALL ENJOY FISCAL AUTONOMY?
MR. DAVIDE. That would be a surplusage because the autonomy
actually intended is the automatic release of these appropriations.
MR. BENGZON. If that is the case, then maybe we should also delete such
sentence in the other articles that we have approved. I will just leave it up to the
Committee on Style, as long as it is in the record that that is the sense of the
Commission, Madam President.
THE PRESIDENT. What does the committee say on this point?
MR. SARMIENTO. Accepted, Madam President. We leave it to the
Committee on Style, so long as the intent is there.
MR. BENGZON. In other words, what we are really saying is that if the
Committee on Style feels that it would be more elegant and it is a surplusage to include
the first sentence, then so be it as long as it is recorded in the Journal that it is the
sense of the Commission that the Human Rights Commission will enjoy fiscal
autonomy.
MR. GUINGONA. Madam President.
MR. MONSOD. Madam President.
THE PRESIDENT. Commissioner Guingona is recognized.
MR. GUINGONA. May I respectfully invite the attention of the honorable
Commissioners that there are two committees that are tasked with the same work and,
therefore, reference can be made not only to the Committee on Style but also to the
Sponsorship Committee.
Thank you, Madam President.
MR. MONSOD. Madam President.
THE PRESIDENT. Commissioner Monsod is recognized.
MR. MONSOD. Maybe we should just say that the minimum condition that
the committee agrees to is: THE APPROVED ANNUAL APPROPRIATIONS OF THE
COMMISSION SHALL BE AUTOMATICALLY AND REGULARLY RELEASED. That is a
minimum condition and we just allow the committees to add the first sentence if they
wish. But with the second sentence, the sense is already there.
MR. BENGZON. No problem, Madam President.
THE PRESIDENT. This was taken up yesterday.
MR. BENGZON. But it was deferred, I understand, Madam President. So if
we approve this now, then it will be firmly included.
THE PRESIDENT. So, will the Commissioner please read it now as it is?
MR. BENGZON. I will read the amendment as accepted. THE APPROVED
ANNUAL APPROPRIATIONS OF THE COMMISSION SHALL BE AUTOMATICALLY
AND REGULARLY RELEASED.
THE PRESIDENT. Is there any objection to this proposed amendment
which has been accepted by the committee?
MR. PADILLA. Madam President.
THE PRESIDENT. Commissioner Padilla is recognized.
MR. PADILLA. The wording reminds me of the provisions under the
judiciary and the constitutional commissions. Is the intention to elevate the position of
this proposed commission which is only investigative and recommendatory to the high
dignity of a constitutional commission, as well as the independence of the judiciary, by
making a positive statement in the Constitution that its appropriation shall be released
automatically and so forth? It seems that we are complicating and also reiterating
several provisions that would make our Constitution not only too long but too
complicated. I wonder if that is the purpose because even other bodies with semi-
judicial functions do not enjoy such kind of constitutional guarantee. It is just an inquiry.
MR. BENGZON. It is not so much the fact that we want to elevate this into
a constitutional commission as it is more of an insurance that the independence of the
Human Rights Commission, even though it is not considered as a constitutional
commission as contemplated and as compared to the Civil Service Commission, the
COMELEC and COA, is maintained. And this is as elegant as the other sentences.So,
we submit the same to the body.
MR. SARMIENTO. The proposed amendment has been accepted by the
committee, but we have this objection from Commissioner Padilla. So, may we throw
the issue to the body?
MR. GUINGONA. Madam President, just for clarification. Does the
amendment of the honorable Commissioner Bengzon refer only to the release? I was
thinking that although I am very, very strongly in favor of this commission and would
give it one of the top priorities, there are other top priorities that we may want to
address ourselves to. For example, in the Committee on Human Resources, we would
like to give top priority to education; therefore, if this does not refer only to an automatic
and regular release but would refer to the matter of priorities in the preparation of the
budget, then I am afraid that we might already be curtailing too much the discretion on
the part of both the legislature and the executive to determine the priorities that should
be given at a given time.
MR. BENGZON. Madam President, the sentence means what it says
and it is clear.
THE PRESIDENT. Will the Commissioner please read.
MR. BENGZON. It only refers to the release which should be
automatic and regular.
THE PRESIDENT. Please state it again so that we will be clarified before
we take a vote.
MR. GUINGONA. Thank you, Madam President.
MR. BENGZON. It will read: THE APPROVED ANNUAL
APPROPRIATIONS OF THE COMMISSION SHALL BE AUTOMATICALLY AND
REGULARLY RELEASED.
VOTING
THE PRESIDENT. As many as are in favor of this particular section, please raise their
hand. (Several Members raised their hand.)
As many as are against, please raise their hand. (Few Members raised their hand.)
As many as are abstaining, please raise their hand. (Two Members raised their hand.)
The results show 26 votes in favor, 4 against and 2 abstentions; the amendment is
approved. (Emphases supplied.)
The respondent relies on the statement of then Constitutional Commissioner Hilario G. Davide, Jr.
that the first sentence on the express grant of fiscal autonomy to the respondent was deleted from Article XIII,
Section 17(4) of the 1987 Constitution because it was a surplusage. Respondent posits that the second
sentence, directing the automatic and regular release of its approved annual appropriations, has the same
essence as the express grant of fiscal autonomy, thus rendering the first sentence redundant and
unnecessary.
This Court, however, believes otherwise. The statement of then Constitutional Commissioner
Davide should be read in full. Referring to the deletion of the first sentence on the express grant of fiscal
autonomy, he explained that the first sentence would be a surplusage because the autonomy actually
intended is the automatic release of these appropriations.[8] (Emphasis supplied.)
Even in the latter discussion between Constitutional Commissioners Jose F.S. Bengzon, Jr. and
Serafin V.C. Guingona, wherein Constitutional Commissioner Guingona asked for clarification whether
respondent shall also be extended priorities in the preparation of the national budget, Constitutional
Commissioner Bengzon replied that x x x the sentence means what it says and it is clear, [9] and that [i]t only
refers to the release which should be automatic and regular.[10]
Therefore, after reviewing the deliberations of the ConCom on Article XIII, Section 17(4), of the
1987 Constitution, in its entirety, not just bits and pieces thereof, this Court is convinced that the ConCom had
intended to grant to the respondent the privilege of having its approved annual appropriations automatically
and regularly released, but nothing more. While it may be conceded that the automatic and regular release of
approved annual appropriations is an aspect of fiscal autonomy, it is just one of many others.
This Court has already defined the scope and extent of fiscal autonomy in the case of Bengzon v.
Drilon,[11] as follows

As envisioned in the Constitution, the fiscal autonomy enjoyed by the
Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on
Elections, and the Office of the Ombudsman contemplates a guarantee of full flexibility
to allocate and utilize their resources with the wisdom and dispatch that their needs
require. It recognizes the power and authority to levy, assess and collect fees, fix rates
of compensation not exceeding the highest rates authorized by law for compensation
and pay plans of the government and allocate and disburse such sums as may be
provided by law or prescribed by them in the course of the discharge of their functions.
Fiscal autonomy means freedom from outside control. x x x
The foregoing excerpt sufficiently elucidates that the grant of fiscal autonomy is more extensive than the mere
automatic and regular release of approved annual appropriations of the government entity. It is also worth
stressing herein that in Bengzon v. Drilon, this Court, ruling En Banc, only recognized the fiscal autonomy of
the Judiciary; the constitutional commissions, namely, the Civil Service Commission, the Commission on Audit,
and the Commission on Elections; and the Office of the Ombudsman. Respondent is conspicuously left out of
the enumeration.
Moreover, the ConCom had the following deliberations [12] on the meaning of the fiscal autonomy extended to
the constitutional commissions in what is to become later Article IX, Part A, Section 5, of the 1987 Constitution
THE PRESIDING OFFICER (Mr. Treas). Commissioner de Castro is
recognized.
MR. DE CASTRO: Thank you.
This morning, I asked the proponent of this resolution what is included in
the term fiscal autonomy.The answer I got is that it is for the automatic release of the
budget. I propose that the sentence The Commissions shall enjoy fiscal autonomy be
deleted but the second sentence shall remain. The reason is that it is already
redundant. Fiscal autonomy means the automatic release of appropriations.
MR. MONSOD. Mr. Presiding Officer, may we answer the honorable
Commissioner.
I think the answer of the Chairman of our Committee this morning
was that it would involve the automatic and regular release of the funds once
approved. In addition, we are suggesting that fiscal autonomy include the
nonimposition of any other procedures, for example, a preaudit system in the
commissions or bodies that enjoy fiscal autonomy. So, actually, the definition of
fiscal autonomy would be a bit broader than just the automatic release.
MR. DE CASTRO. Does the Commissioner mean that these commissions
will not be subjected to preaudit?
MR. MONSOD. Our proposal actually in the provisions on the Commission
on Audit is that they be subjected to comprehensive postaudit procedures and where
their internal control system is inadequate, in the opinion of the Commission on Audit,
then the commission may also take such measures as are necessary to correct the
inadequacies which might include special preaudit systems.
THE PRESIDING OFFICER (Mr. Treas). The Chair understands, therefore,
that the proposed amendment of Commissioner de Castro is not acceptable to the
Committee?
MR. DE CASTRO. Not yet, Mr. Presiding Officer, because we are still on
the answer to me this morning, which stated the record will bear me out that fiscal
autonomy means the automatic release of appropriations. It means the automatic
release and nothing more. We were in the same Committee and when we asked the
COA about this, they insisted that there must be preaudit. If fiscal autonomy means
that there will be no preaudit, I do not know what will happen to this.
THE PRESIDING OFFICER (Mr. Treas). So, what is the stand of the
Committee insofar as the proposed amendment of Commissioner de Castro is
concerned?
MR. DE CASTRO. May I just say one sentence, Mr. Presiding Officer? If
the Committees stand is that fiscal autonomy means the automatic release of the
appropriations, then I say that the first sentence The Commissions shall enjoy fiscal
autonomy -- should be deleted because it is a repetition of the second sentence.
Thank you.
MR. MONSOD. Mr. Presiding Officer, the position of the Committee is
that fiscal autonomy may include other things than just the automatic and
regular release of the funds.
THE PRESIDING OFFICER (Mr. Treas). With that explanation, what is the
pleasure of Commissioner de Castro? Does he insist on his amendment?
MR. DE CASTRO. Is the Chairman changing his answer from this mornings
question? If he does, I will ask some more questions about fiscal autonomy.
MR. MONSOD. Mr. Presiding Officer, I think at the beginning of this
exchange, we already told the honorable Commissioner that the Chairman of the
Committee had not meant to make it an all-inclusive definition. And if he was misled
into thinking of another meaning, we apologize for it. But our position is that fiscal
autonomy would include other rights than just merely automatic and regular
disbursement.
MR. DE CASTRO. Does it include exception from preaudit?
MR. MONSOD. Yes, it would include the imposition of certain preaudit
requirements for release, because if the preaudit requirements are inserted into the
process of release, it would defeat the objective of automatic and regular release.
Based on the preceding exchange, it can be derived that the first sentence of Article IX, Part A, Section 5, of
the 1987 Constitution, expressly granting fiscal autonomy to constitutional commissions, does not have the
same meaning as the second sentence, directing the automatic and regular release of their approved annual
appropriations, hence, the resistance of Constitutional Commissioner Christian S. Monsod to the suggested
amendment of Constitutional Commissioner Crispino M. De Castro to just delete the first sentence.
In addition, the Constitutional Fiscal Autonomy Group (CFAG), to which respondent avers membership,
defined the term fiscal autonomy in its Joint Resolution No. 49, dated 24 July 1998, as follows
IV. Definition of Terms:
1. Fiscal Autonomy shall mean independence or freedom regarding financial
matters from outside control and is characterized by self direction or self
determination. It does not mean mere automatic and regular release of
approved appropriations to agencies vested with such power in a very
real sense, the fiscal autonomy contemplated in the constitution is enjoyed
even before and, with more reasons, after the release of the
appropriations. Fiscal autonomy encompasses, among others, budget
preparation and implementation, flexibility in fund utilization of approved
appropriations, use of savings and disposition of receipts. x x x (Emphasis
supplied.)
While the assailed Decision and the present Resolution may render the status of respondents
membership in CFAG uncertain, the then Chairperson of respondent, Aurora P. Navarrete-Recina, duly signed
CFAG Joint Resolution No. 49, and respondent should be held bound by the definition of fiscal autonomy
therein. CFAG Joint Resolution No. 49 categorically declares that fiscal autonomy means more than just the
automatic and regular release of approved appropriation, and also encompasses, among other things: (1)
budget preparation and implementation; (2) flexibility in fund utilization of approved appropriations; and (3) use
of savings and disposition of receipts. Having agreed to such a definition of fiscal autonomy, respondent has
done a complete turn-about herein and is now contradicting itself by arguing that the automatic and regular
release of its approved annual appropriations is already tantamount to fiscal autonomy.
Consequently, this Court concludes that the 1987 Constitution extends to respondent a certain degree of fiscal
autonomy through the privilege of having its approved annual appropriations released automatically and
regularly. However, it withholds from respondent fiscal autonomy, in its broad or extensive sense, as granted to
the Judiciary, constitutional commissions, and the Office of the Ombudsman. Operative herein is the rule of
statutory construction, expressio unius est exclusio alterius, wherein the express mention of one person, thing,
or consequence implies the exclusion of all others. [13] The rule proceeds from the premise that the legislature
(or in this case, the ConCom) would not have made specific enumerations in a statute (or the Constitution)
had the intention not been to restrict its meaning and to confine its terms to those expressly mentioned. [14]
The provisions of Executive Order No. 292, otherwise known as the Administrative Code of 1987, on the fiscal
autonomy of constitutional commissions, the Office of the Ombudsman, and the respondent, merely follow the
phraseology used in the corresponding provisions of the 1987 Constitution, thus
Book II, Chapter 5, Section 26. Fiscal Autonomy. The Constitutional
Commissions shall enjoy fiscal autonomy. The approved annual appropriations shall be
automatically and regularly released.
Book V, Title II, Subtitle B, Section 4. Fiscal Autonomy. The Office of the
Ombudsman shall enjoy fiscal autonomy. Its approved annual appropriations shall be
automatically and regularly released.
Book V, Title II, Subtitle A, Section 6. Annual Appropriations. The approved
annual appropriations of the Commission on Human Rights shall be automatically and
regularly released.
While the Administrative Code of 1987 has no reference to the fiscal autonomy of the Judiciary, it does have
provisions on the fiscal autonomy of the constitutional commissions and the Office of the Ombudsman. It is
very interesting to note that while Book II, Chapter 5, Section 26 (on constitutional commissions) and Book V,
Title 2, Subtitle B, Section 4 (on the Office of the Ombudsman) of the Code are entitled Fiscal Autonomy, Book
V, Title 2, Subtitle A, Section 6 (on respondent) bears the title Annual Appropriations. Further, the provisions on
the constitutional commissions and the Office of the Ombudsman in the Administrative Code of 1987, just like
in the 1987 Constitution, are composed of two sentences: (1) The government entity shall enjoy fiscal
autonomy; and (2) Its approved annual appropriation shall be automatically and regularly released. The
provision on respondent in the same Code is limited only to the second sentence.
Respondent asserts that it is granted fiscal autonomy by Book VI, Chapter 1, Section 1, paragraph 9, of the
Administrative Code of 1987, which reads
SEC. 1. Constitutional Policies on the Budget.
xxxx
(9) Fiscal autonomy shall be enjoyed by the Judiciary, Constitutional
Commissions, Office of the Ombudsman, Local Government and Commission on
Human Rights.
As its title suggests, the afore-cited provision is supposed to merely re-state the policies on budget as
declared by the 1987 Constitution and, therefore, cannot grant or extend to the respondent a privilege not
found in the 1987 Constitution. Book VI of the Administrative Code of 1987, under which the said provision is
found, pertains to National Government Budgeting. Respondent may have been included in the enumeration
of fiscally autonomous government entities because it does enjoy an aspect of fiscal autonomy, that of the
automatic and regular release of its approved annual appropriations from the national budget. The general
declaration of fiscal autonomy of the respondent in Section 1, paragraph 9, of Book V of the Administrative
Code of 1987 on National Government Budgeting, must be qualified and limited by Section 6 of Book V, Title
II, Subtitle A of the same Code specifically pertaining to respondent.It should be borne in mind that the general
rule is that a word, phrase or provision should not be construed in isolation, but must be interpreted in relation
to other provisions of the law.[15]
To reiterate, under the Constitution, as well as the Administrative Code of 1987, respondent enjoys
fiscal autonomy only to the extent that its approved annual appropriations shall be automatically and regularly
released, but nothing more.
On the main issue of whether or not the approval by the Department of Budget and Management
(DBM) is a condition precedent to the enactment of an upgrading, reclassification, creation and collapsing of
plantilla positions in the CHR, this Court staunchly holds that as prescinding from the legal and jurisprudential
yardsticks discussed in length in the assailed Decision, the imprimatur of the DBM must first be sought prior to
implementation of any reclassification or upgrading of positions in government.
Regardless of whether or not respondent enjoys fiscal autonomy, this Court shares the stance of
the DBM that the grant of fiscal autonomy notwithstanding, all government offices must, all the same, kowtow
to the Salary Standardization Law. This Court is of the same mind with the DBM[16] on its standpoint, thus
Being a member of the fiscal autonomy group does not vest the agency
with the authority to reclassify, upgrade, and create positions without approval of the
DBM. While the members of the Group are authorized to formulate and implement the
organizational structures of their respective offices and determine the compensation of
their personnel, such authority is not absolute and must be exercised within the
parameters of the Unified Position Classification and Compensation System
established under RA 6758 more popularly known as the Compensation
Standardization Law. x x x (Emphasis supplied).
To drive home this point, in the special provision covering the Judiciary as quoted above,
theJudiciary was not vested with the power to formulate and implement organizational structures beyond the
salary rates, allowances and other benefits under the compensation standardization laws. Stated differently,
although the Judiciary is allowed to reorganize, any such reorganization must, nevertheless, be in strict
adherence to the Salary Standardization Law. Ergo, any reorganization therein must be with the conformity of
the DBM inasmuch as it is the government arm tasked by law to implement the Salary Standardization Law.
In Republic Act No. 9227, or An Act Granting Additional Compensation in the Form of Special
Allowances for Justices, Judges and All Other Positions in the Judiciary with the Equivalent Rank of Justices
of the Court of Appeals and Judges of the Regional Trial Court, and for Other Purposes, the grant of Special
Allowances to members of the Judiciary did not operate to exempt members thereof from the Salary
Standardization Law. In Section 7 of Republic Act No. 9227, the Supreme Court and the DBM were specifically
tasked to issue the necessary guidelines for the proper implementation of this Act in respect to funds coming
from the National Treasury.[17] Resultantly, the Supreme Court and the DBM issued Joint Circular No. 2004-1
on 13 January 2004 which provided guidelines on the funding source for the grant of this special
allowance. Thus, although Administrative Order No. 137, issued by President Gloria Macapagal-Arroyo on 27
December 2005, extended to the Chairman and Commissioners or Members of the CHR the same benefits
and privileges enjoyed by members of constitutional commissions and the Judiciary in the matter of
rationalized rate of allowances and liberalized computation of retirement benefits and accumulated leave
credits, it still does not exempt respondent from the Salary Standardization Law.
If the Judiciary, a co-equal branch of government, which was expressly granted by the Constitution
with fiscal autonomy, is required to conform to the Salary Standardization Law and is subject to the scrutiny of
the DBM, sagaciously, the respondent cannot be deemed to enjoy a better position than the Judiciary. The
respondent must, likewise, toe the line.
This Court shall no longer belabor the point it has already delved upon in length in its Decision that
Congress has delegated to the DBM the power to administer the Salary Standardization Law, which power is
part of the system of checks and balances or system of restraints in the Philippine government. This Court,
thus, reiterates the point that the DBMs exercise of such authority is not in itself an arrogation inasmuch as it is
pursuant to the 1987 Constitution, the paramount law of the land; the Salary Standardization Law; and the
Administrative Code of 1987.
In line with its role to breathe life into the policy behind the Salary Standardization Law of providing
equal pay for substantially equal work and to base differences in pay upon substantive differences in duties
and responsibilities, and qualification requirements of the positions, the DBM, in the case under review, made
a determination, after a thorough evaluation, that the reclassification and upgrading scheme proposed by the
respondent lacks legal rationalization.
The DBM expounded that Section 78 of the General Provisions of the General Appropriations Act
(GAA), FY 1998, which the respondent heavily relies upon to justify its reclassification scheme, explicitly
provides that no organizational unit or changes in key positions shall be authorized unless provided by law or
directed by the President. Here, the DBM discerned that there is no law authorizing the creation of a Finance
Management Office and a Public Affairs Office in the CHR. Anent respondents proposal to upgrade twelve (12)
positions of Attorney VI, SG-28 to Director IV, SG-28, and three (3) positions of Director III, SG-27 to Director
IV, SG-28, in its Central Office, the DBM denied the same as this would change the context from support to
substantive without actual change in functions.
This view of the DBM, as the laws designated body to implement and administer a unified
compensation system, is beyond cavil. The interpretation of an administrative government agency, which is
tasked to implement a statute, is accorded great respect and ordinarily controls the construction of the
courts. In Energy Regulatory Board v. Court of Appeals,[18] the Court echoed the basic rule that the courts will
not interfere in matters which are addressed to the sound discretion of government agencies entrusted with
the regulation of activities coming under the special technical knowledge and training of such agencies.
 To be sure, considering his expertise on matters affecting the nations coffers, the Secretary of the
DBM, as the Presidents alter ego, knows from where he speaks inasmuch as he has the front seat view of the
adverse effects of an unwarranted upgrading or creation of positions in the CHR in particular and in the entire
government in general.
As the final thrust, given this Courts previous pronouncement in the present Resolution that the
fiscal autonomy granted to the respondent by the 1987 Constitution and the Administrative Code of 1987 shall
be limited only to the automatic and regular release of its approved annual appropriations, respondent is
precluded from invoking the Special Provisions Applicable to All Constitutional Offices Enjoying Fiscal
Autonomy in the 1998 GAA. The said Special Provisions read
Special Provisions Applicable to All Constitutional Offices Enjoying Fiscal Autonomy
1. Organization Structure. Any provision of law to the contrary
notwithstanding and within the limits of their respective appropriations as authorized in
this Act, the Constitutional Commissions and Offices enjoying fiscal autonomy are
authorized to formulate and implement the organizational structures of their respective
offices, to fix and determine the salaries, allowances, and other benefits of their
personnel, and whenever public interest so requires, make adjustments in the personal
services itemization including, but not limited to, the transfer of item or creation of new
positions in their respective offices: PROVIDED, That the officers and employees
whose positions are affected by such reorganization or adjustments shall be granted
retirement gratuities and separation pay in accordance with existing laws, which shall
be payable from any unexpended balance of, or savings in the appropriations of their
respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in
accordance with salary rates, allowances and other benefits authorized under
compensation standardization laws.
2. Use of Savings. The Constitutional Commissions and Offices enjoying
fiscal autonomy are hereby authorized to use savings in their respective appropriations
for; (a) printing and/or publication of decisions, resolutions, and training information
materials; (b) repair, maintenance and improvement of central and regional offices,
facilities and equipment; (c) purchase of books, journals, periodicals and equipment;
(d) necessary expenses for the employment or temporary, contractual and casual
employees; (e) payment of extraordinary and miscellaneous expenses, commutable
representation and transportation allowances, and fringe benefits for their officials and
employees as may be authorized by law; and (f) other official purposes, subject to
accounting and auditing rules and regulations.
It is unequivocal that the afore-quoted Special Provisions of the 1998 GAA refer to the broad and extensive
concept of fiscal autonomy. They already go beyond ensuring the automatic and regular release of the
approved annual appropriations, but already enumerate the ways by which the named government entities
can use their appropriations to effect changes in their organizational structure and their savings for certain
official purposes. Even assuming arguendo that the said Special Provisions are applicable to respondent, it
should be noted that the last sentence in paragraph 1 qualifies the power of a fiscally autonomous government
entity to formulate and implement changes in its organizational structure so that, x x x the implementation
hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation
standardization laws. And, as exhaustively expounded in the assailed Decision and the herein Resolution, only
the DBM has the authority and the technical expertise to determine compliance by respondent to the
provisions of the Salary Standardization Law.
WHEREFORE, the Motion for Reconsideration is PARTIALLY GRANTED. The assailedDecision
of this Court dated 25 November 2004 is hereby MODIFIED, declaring the respondent CHR as a constitutional
body enjoying limited fiscal autonomy, in the sense that it is entitled to the automatic and regular release of its
approved annual appropriations; nonetheless, it is still required to conform to the Salary Standardization
Law. Accordingly, its entire reclassification scheme remains subject to the approval of the DBM. No
pronouncement as to costs.
SO ORDERED.