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Conditions for the Exercise of Judicial Power

Legal Standing

Rosales vs ERC

Energy Regulatory Commission allowed the Members ' Contribution for Capital Expenditures (MCC), later
renamed as Reinvestment Fund for Sustainable Capital Expenditures (RFSC), which is being imposed by
on-grid Electric Cooperatives (ECs ) to Electric Cooperative members.

Payuyo and Pingay among others claim that as Board members/officers of the National Alliance for
Consumer Empowerment of Electric Cooperatives (NACEELCO) they have the required legal standing to
assail the validity of MCC/RFSC imposed by the ECs under the RSEC-WR and Resolution No. 14 issued
by the ERC. They also stand to be benefited or injured by the judgment in this suit because they are
member-consumers of the ECs who were required to and did pay the MCC/RFSC, as shown by the
electric bills appended to the petition. Further, over and above their personal capacity as member-
consumers, petitioners, like party-list representatives Briones of AGAP, Payuyo of Association of
Philippine Electric Cooperatives (APEC), and Ping-ay of Cooperative-National Confederation of
Cooperatives (Coop-NATCO), represent their constituents who are paying EC member-consumers in
good standing.

Even assuming that no direct injury is or will continue to be suffered, petitioners contend that the liberal
policy consistently adopted by the Court on locus standi must apply. They view that the issues raised in
this petition are of paramount public importance as it does not merely involve the constitutionality of
MCC/RFSC but also the plight of the member-consumers of ECs nationwide. For them, the
transcendental importance of this case cannot simply be ignored as it also involves the economic
wellbeing of more than half of the Philippine population. Two contesting parties are said to be laying claim
on the ownership of the ECs, to wit: (1) the persons running the ECs being directly controlled by the NEA,
which has not contributed any funds to fund debt-servicing except loan accommodations with high
interest rates, and (2) the member-consumers of ECs who have continuously contributed their hard-
earned money to fund the operations, cost, and debt-servicing of the ECs.

Issue: Whether or not the petitioners have locus standi

Held:Only petitioners Ping-ay and Ramirez satisfy the requirement of locus standi.

Petitioners have no legal standing to file this petition in their capacity as NACEELCO Board members. It
was not shown that respondent ECs are members of NACEELCO. Further, while petitioners claim that
they represent nine million member-consumers of the ECs, they have not attached to the petition any
documentary proof as regards their purported authority to file the case on their behalf.

Also, petitioners Payuyo and Rosales have no legal standing to file the case as member-consumers of
the Palawan Electric Cooperative, Inc. (PALECO) and Agusan Del Norte Electric Cooperative, Inc.
(ANECO), respectively.8 Even if ANECO is within the coverage of RSEC-WR, it is not impleaded as
respondent in the petition. As for PALECO, it is neither a part of any group enumerated in RSEC-WR nor
is it impleaded as respondent herein.

While the Court held that legislators have the standing to maintain inviolate the prerogatives, powers and
privileges vested by the Constitution in their office and are allowed to sue to question the validity of any
official action which they claim infringes their prerogatives as legislators, 9 there was no specific allegation
of usurpation of legislative function in this case. Moreover, We do not view that the procedural rules on
standing should be waived on the ground that the issues raised in this petition are of transcendental
importance. To consider a matter as one of transcendental importance, all of the following must concur:
(1) the public character of the funds or other assets involved in the case; (2) the presence of a clear case
of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality
of the government; and (3) the lack of any other party with a more direct and specific interest in the
questions being raised.10 As will be shown in the discussion below, elements (2) and (3) are obviously
lacking in this case.

The above notwithstanding, petitioners Ping-ay and Ramirez have the legal standing to sue. Ping-ay is a
member-consumer of respondent Ilocos Sur Electric Cooperative, Inc. (ISECO). 11 On the other hand,
Ramirez is undisputedly the spouse of Mary Ramirez,12 who is the registered member-consumer of
respondent Eastern Samar Electric Cooperative, Inc. (ESAMELCO). Mary, who is not one of the
petitioners, only needs to be impleaded as a pro-forma party to the suit based on Section 4, Rule 4 of
theRules.13 The determination of whether Mary is a party who is indispensable or necessary or neither
indispensable nor necessary would no longer matter since, as We said, Ping-ay possesses the
required locus standi for the Court to already take cognizance of the case.

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

A party challenging the constitutionality of a law, act, or statute must show "not only that the law is invalid,
but also that he has sustained or is in immediate, or imminent danger of sustaining some direct injury as a
result of its enforcement, and not merely that he suffers thereby in some indefinite way." It must shown
that he has been, or is about to be, denied some right or privilege to which he is lawfully entitled, or that
he is about to be subjected to some burdens or penalties by reason of the statute complained of. 14

Tested by the foregoing standards, petitioners Ping-ay and Ramirez clearly have legal standing to file the
petition. They are real parties-ininterest to assail the constitutionality and legality of RSEC-WR and
Resolution No. 14. Their cause of action to declare invalid the subject Rule and Resolution is related to
their right to seek a refund of the payments made and to stop future imposition of the MCC/RFSC.


Layug vs Comelec
667 SCRA 135

Petitioner Rolando D. Layug (Layug), filed pro se a Petition to Disqualify Buhay Party-List from
participating in the May 10, 2010 elections, and Brother Mike from being its nominee. He argued that
Buhay Party-List is a mere "extension of the El Shaddai," which is a religious sect. As such, it is
disqualified from being a party-list under Section 5, Paragraph 2, Article VI of the 1987 Constitution , as
well as Section 6, Paragraph 1 of Republic Act (R.A.) No. 7941, otherwise known as the "Party-List
System Act. Neither does Brother Mike, who is allegedly a billionaire real estate businessman and the
spiritual leader of El Shaddai, qualify as "one who belongs to the marginalized and underrepresented
sector xxx", as required of party-list nominees under Section 6 (7) of COMELEC Resolution No. 8807 7 ,
the "Rules on Disqualification Cases Against Nominees of Party-List Groups/Organizations Participating
in the May 10, 2010 Automated National and Local Elections."

COMELEC Second Division issued a Resolution denying the petition for lack of substantial evidence.
There being no motion for reconsideration filed within the reglementary period, said Resolution was
declared final and executory. The COMELEC En Banc, sitting as the National Board of Canvassers for
Party-List, promulgated on July 30, 2010 NBC Resolution No. 10-03413 proclaiming Buhay Party-List as a
winner entitled to two (2) seats in the House of Representatives. Being the fifth nominee, however,
Brother Mike was not proclaimed as the representative of Buhay Party-List.
Layug moved for reconsideration of the Resolution dated June 15, 2010 before the COMELEC En
Banc claiming denial of due process for failure of the COMELEC to serve him, his representatives or
counsels a copy of said Resolution. His motion for reconsideration, however, was denied by the
COMELEC Second Division in its Order. Aggrieved, Layug filed this petition imputing grave abuse of
discretion on the part of the COMELEC.

In their respective Commentsto the petition, respondents assail the jurisdiction of the Court arguing that,
with the proclamation of Buhay Party-List on July 30, 2010 and the assumption into office of its
representatives, Mariano Michael DM. Velarde, Jr. and William Irwin C. Tieng, it is now the House of
Representatives Electoral Tribunal that has the sole and exclusive jurisdiction over questions relating to
their qualifications.

Issue: Whether or not the Court has the jurisdiction over the present petition

Held:. The Court not the HRET has jurisdiction over the present petition.

Section 17, Article VI of the 1987 Constitution provides that the House of Representatives Electoral
Tribunal (HRET) shall be the sole judge of all contests relating to the election, returns, and qualifications
of its Members. Section 5 (1) of the same Article identifies who the "members" of the House are:

Sec. 5. (1). The House of Representatives shall be composed of not more than two hundred and
fifty members, unless otherwise fixed by law, who shall be elected from legislative districts apportioned
among the provinces, cities, and the Metropolitan Manila area in accordance with the number of their
respective inhabitants, and on the basis of a uniform and progressive ratio, and those who, as provided
by law, shall be elected through a party list system of registered national, regional, and sectoral parties or
organizations. (Underscoring added).

Clearly, the members of the House of Representatives are of two kinds: (1) members who shall be
elected from legislative districts; and (2) those who shall be elected through a party-list system of
registered national, regional, and sectoral parties or organizations. 18 In this case, Buhay Party-List was
entitled to two seats in the House that went to its first two nominees, Mariano Michael DM. Velarde, Jr.
and William Irwin C. Tieng. On the other hand, Brother Mike, being the fifth nominee, did not get a seat
and thus had not become a member of the House of Representatives. Indubitably, the HRET has no
jurisdiction over the issue of Brother Mike's qualifications.

Neither does the HRET have jurisdiction over the qualifications of Buhay Party-List, as it is vested by law,
specifically, the Party-List System Act, upon the COMELEC. Section 6 of said Act states that "the
COMELEC may motu proprio or upon verified complaint of any interested party, remove or cancel, after
due notice and hearing, the registration of any national, regional or sectoral party, organization or
coalition xxx." Accordingly, in the case of Abayon vs. HRET,19 We ruled that the HRET did not gravely
abuse its discretion when it dismissed the petitions for quo warranto against Aangat Tayo party-list
and Bantay party-list insofar as they sought the disqualifications of said party-lists.

Thus, it is the Court, under its power to review decisions, orders, or resolutions of the COMELEC
provided under Section 7, Article IX-A of the 1987 Constitution20 and Section 1, Rule 37 of the COMELEC
Rules of Procedure21 that has jurisdiction to hear the instant petition.

Prohibition against delegation of legislative power

Ferrer vs Bautista
760 SCRA 652

A petition for certiorari under Rule 65 of the Rules of Court with prayer for the issuance of a temporary
restraining order (TRO) seeking to declare unconstitutional and illegal Ordinance Nos. SP-2095, S-2011
and SP-2235, S-2013 on the Socialized Housing Tax and Garbage Fee, respectively, which are being
imposed by the Respondent.

Petitioner asserts that the protection of real properties from informal settlers and the collection of garbage
are basic and essential duties and functions of the Quezon City Government. By imposing the SHT and
the garbage fee, the latter has shown a penchant and pattern to collect taxes to pay for public services
that could be covered by its revenues from taxes imposed on property, idle land, business, transfer,
amusement, etc., as well as the Internal Revenue Allotment (IRA ) from the National Government..

Issue: Whether or not the statute enacted by Quezon City are valid?

Ruling: Socialized Housing Tax: Validity Sustained

LGUs are able to legislate only by virtue of a valid delegation of legislative power from the national
legislature; they are mere agents vested with what is called the power of subordinate
legislation. "Congress enacted the LGC as the implementing law for the delegation to the various LGUs of
the States great powers, namely: the police power, the power of eminent domain, and the power of
taxation. The LGC was fashioned to delineate the specific parameters and limitations to be complied with
by each LGU in the exercise of these delegated powers with the view of making each LGU a fully
functioning subdivision of the State subject to the constitutional and statutory limitations." 81

Indeed, LGUs have no inherent power to tax except to the extent that such power might be delegated to
them either by the basic law or by the statute. "Under the now prevailing Constitution , where there is
neither a grant nor a prohibition by statute , the tax power must be deemed to exist although Congress
may provide statutory limitations and guidelines. The basic rationale for the current rule is to safeguard
the viability and self-sufficiency of local government units by directly granting them general and broad tax
powers. Nevertheless, the fundamental law did not intend the delegation to be absolute and
unconditional; the constitutional objective obviously is to ensure that, while the local government units are
being strengthened and made more autonomous , the legislature must still see to it that (a) the taxpayer
will not be over-burdened or saddled with multiple and unreasonable impositions; (b) each local
government unit will have its fair share of available resources; (c) the resources of the national
government will not be unduly disturbed; and (d) local taxation will be fair, uniform, and just."88

Subject to the provisions of the LGC and consistent with the basic policy of local autonomy, every LGU is
now empowered and authorized to create its own sources of revenue and to levy taxes, fees, and
charges which shall accrue exclusively to the local government unit as well as to apply its resources and
assets for productive, developmental, or welfare purposes, in the exercise or furtherance of their
governmental or proprietary powers and functions.

Clearly, the SHT charged by the Quezon City Government is a tax which is within its power to impose.
Aside from the specific authority vested by Section 43 of the UDHA, cities are allowed to exercise such
other powers and discharge such other functions and responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the basic services and facilities which include, among
others, programs and projects for low-cost housing and other mass dwellings. 108 The collections made
accrue to its socialized housing programs and projects.

On the Garbage Fee: Unconstitutional

In this jurisdiction, pursuant to Section 16 of the LGC and in the proper exercise of its corporate powers
under Section 22 of the same, the Sangguniang Panlungsod of Quezon City, like other local legislative
bodies, is empowered to enact ordinances, approve resolutions, and appropriate funds for the genera l
welfare of the city and its inhabitants.

The general welfare clause is the delegation in statutory form of the police power of the State to
LGUs.130 The provisions related thereto are liberally interpreted to give more powers to LGUs in
accelerating economic development and upgrading the quality of life for the people in the
community.131 Wide discretion is vested on the legislative authority to determine not only what the
interests of the public require but also what measures are necessary for the protection of such interests
since the Sanggunian is in the best position to determine the needs of its constituents. 132

One of the operative principles of decentralization is that, subject to the provisions of the LGC and
national policies, the LGUs shall share with the national government the responsibility in the management
and maintenance of ecological balance within their territorial jurisdiction.133 In this regard, cities are
allowed to exercise such other powers and discharge such other functions and responsibilities as are
necessary, appropriate, or incidental to efficient and effective provision of the basic services and facilities
which include, among others, solid waste disposal system or environmental management system and
services or facilities related to general hygiene and sanitation.134R.A. No. 9003, or the Ecological Solid
Waste Management Act of 2000,135 affirms this authority as it expresses that the LGUs shall be primarily
responsible for the implementation and enforcement of its provisions within their respective jurisdictions
while establishing a cooperative effort among the national government, other local government units, non-
government organizations, and the private sector.136

Necessarily, LGUs are statutorily sanctioned to impose and collect such reasonable fees and charges for
services rendered.137 "Charges" refer to pecuniary liability, as rents or fees against persons or property,
while "Fee" means a charge fixed by law or ordinance for the regulation or inspection of a business or

The fee imposed for garbage collections under Ordinance No. SP-2235 is a charge fixed for the
regulation of an activity.

In this case, the alleged bases of Ordinance No. S-2235 in imposing the garbage fee is the volume of
waste currently generated by each person in Quezon City, which purportedly stands at 0.66 kilogram per
day, and the increasing trend of waste generation for the past three years. 157 Respondents did not
elaborate any further. The figure presented does not reflect the specific types of wastes generated
whether residential, market, commercial, industrial, construction/demolition, street waste, agricultural,
agro-industrial, institutional, etc. It is reasonable, therefore, for the Court to presume that such amount
pertains to the totality of wastes, without any distinction, generated by Quezon City constituents. To
reiterate, however, the authority of a municipality or city to impose fees extends only to those related to
the collection and transport of non-recyclable and special wastes.

Granting, for the sake of argument, that the 0.66 kilogram of solid waste per day refers only to non-
recyclable and special wastes, still, We cannot sustain the validity of Ordinance No. S-2235. It violates
the equal protection clause of the Constitution and the provisions of the LGC that an ordinance must be
equitable and based as far as practicable on the taxpayers ability to pay, and not unjust, excessive,
oppressive, confiscatory.158



September 4, 2012

2 consolidated petitions
1 G.R. No. 196231
Assails on the Jurisdictional grounds on the decision rendered by the Office of the President in OP Case
No. 10-J-460 dismissing petitioner Emilio A. Gonzales III, Deputy Ombudsman for the Military and Other
Law Enforcement Offices (MOLEO), upon a finding of guilt on the administrative charges of Gross
Neglect of Duty and Grave Misconduct constituting a Betrayal of Public Trust. The petition primarily seeks
to declare as unconstitutional Section 8(2) of Republic Act (R.A.) No. 6770, otherwise known as the
Ombudsman Act of 1989, which gives the President the power to dismiss a Deputy Ombudsman of the
Office of the Ombudsman. This is in relation to Quirino Grandstand Hostage incident.
Acts of Gonzales
1. By allowing Mendoza's motion for reconsideration to languish for nine long (9)
months without any justification.
2. Ombudsman Gutierrez and Deputy Ombudsman Gonzales committed serious
disregard of due process, manifest injustice and oppression in failing to provisionally
suspend the further implementation of the judgment of dismissal against Mendoza
pending disposition of his unresolved motion for reconsideration.

2.G.R. No. 196232

The government, represented by petitioner, Special Prosecutor Wendell Barreras-Sulit and her
prosecutorial staff sought the Sandiganbayan's approval of a Plea Bargaining Agreement entered into
with the Major General Garcia, his wife and sons in relation to Plunder and Money Laundering cases
filed against them. Outraged by the backroom deal the House of Representatives' Committee on Justice
conducted public hearings on the PLEBARA. At the conclusion of these public hearings, the Committee
on Justice passed and adopted Committee Resolution No. 3,24recommending to the President the
dismissal of petitioner Barreras-Sulit from the service and the filing of appropriate charges against her
Deputies and Assistants before the appropriate government office for having committed acts and/or
omissions tantamount to culpable violations of the Constitution and betrayal of public trust, which are
violations under the Anti-Graft and Corrupt Practices Act and grounds for removal from office under the
Ombudsman Act.

The Office of the President initiated OP-DC-Case No. 11-B-003 against petitioner Barreras-Sulit. In her
written explanation, petitioner raised the defenses of prematurity and the lack of jurisdiction of the OP with
respect to the administrative disciplinary proceeding against her. The OP, however, still proceeded with
the case, setting it for preliminary investigation on April 15, 2011.

Issue: is whether the Office of the President has jurisdiction to exercise administrative disciplinary power
over a Deputy Ombudsman and a Special Prosecutor who belong to the constitutionally-created Office of
the Ombudsman.

Ruling: YES

The Power of the President to Remove a Deputy Ombudsman and a Special Prosecutor is
Implied from his Power to Appoint.

Under the doctrine of implication, the power to appoint carries with it the power to remove. 48 As a general
rule, therefore, all officers appointed by the President are also removable by him. 49 The exception to this
is when the law expressly provides otherwise - that is, when the power to remove is expressly vested in
an office or authority other than the appointing power. In some cases, the Constitution expressly
separates the power to remove from the President's power to appoint. Under Section 9, Article VIII of the
1987 Constitution, the Members of the Supreme Court and judges of lower courts shall be appointed by
the President. However, Members of the Supreme Court may be removed after impeachment
proceedings initiated by Congress (Section 2, Article XI), while judges of lower courts may be removed
only by the Supreme Court by virtue of its administrative supervision over all its personnel (Sections 6
and 11, Article VIII). The Chairpersons and Commissioners of the Civil Service Commission Section 1(2),
Article IX(B), the Commission on Elections Section 1(2), Article IX(C), and the Commission on Audit
Section 1(2), Article IX(D) shall likewise be appointed by the President, but they may be removed only by
impeachment (Section 2, Article XI). As priorly stated, the Ombudsman himself shall be appointed by the
President (Section 9, Article XI) but may also be removed only by impeachment (Section 2, Article XI).

In giving the President the power to remove a Deputy Ombudsman and Special Prosecutor, Congress
simply laid down in express terms an authority that is already implied from the President's constitutional
authority to appoint the aforesaid officials in the Office of the Ombudsman.

Section 5, Article XI which reads as follows:

Section 5. There is hereby created the independent Office of the Ombudsman, composed of the
Ombudsman to be known as Tanodbayan, one over-all Deputy and at least one Deputy each for Luzon,
Visayas and Mindanao. A separate deputy for the military establishment shall likewise be
appointed.(Emphasis supplied)

The integrity and effectiveness of the Deputy Ombudsman for the MOLEO as a military watchdog looking
into abuses and irregularities that affect the general morale and professionalism in the military is certainly
of primordial importance in relation to the President's own role asCommander-in-Chief of the Armed
Forces. It would not be incongruous for Congress, therefore, to grant the President concurrent disciplinary
authority over the Deputy Ombudsman for the military and other law enforcement offices.

Being aware of the constitutional imperative of shielding the Office of the Ombudsman from political
influences and the discretionary acts of the executive, Congress laid down two restrictions on the
President's exercise of such power of removal over a Deputy Ombudsman, namely: (1) that the removal
of the Deputy Ombudsman must be for any of the grounds provided for the removal of the Ombudsman
and (2) that there must be observance of due processThus, it cannot be rightly said that giving the
President the power to remove a Deputy Ombudsman, or a Special Prosecutor for that matter, would
diminish or compromise the constitutional independence of the Office of the Ombudsman. It is, precisely,
a measure of protection of the independence of the Ombudsman's Deputies and Special Prosecutor in
the discharge of their duties that their removal can only be had on grounds provided by law.


O. Mandatory period for deciding cases

In re: Carbonell

A.M. No. 08-5-305-RTC July 9, 2013

According to the Audit Teams Report, Branch 27 had a total caseload of 231 cases, consisting of 147
criminal cases and 84 civil cases, and Judge Carbonell failed to decide 41 criminal cases (oneinherited)
and 22 civil cases (four inherited), Judge Carbonell was also reported to have failed to resolve pending
motions or incidents in four criminal cases and 12 civil cases

The OCA reiterated its recommendation to impose a fine of 50,000.00 on Judge Carbonell, noting that
he had failed to render any valid reason for his delay in deciding the cases submitted for decision and in
resolving the pending motions or incidents in other cases. The OCA noted that only five cases submitted
for decision had been inherited; and that the case records did not bear any requests for extension of time
or any directive for the transcription of stenographic notes. It stressed that heavy caseload would not
justify the failure to promptly decide and resolve cases because he could have simply asked the Court for
an extension of time.

Issue: whether or not the recommendation of OCA is proper.

Ruling: YES. The recommendation of the OCA is well-taken, subject to the modification of the penalty to
be imposed.

The Court cannot overstress its policy on prompt disposition or resolution of cases. 12 Delay in the
disposition of cases is a major culprit in the erosion of public faith and confidence in the judicial system,
as judges have the sworn duty to administer justice without undue delay. 13 Thus, judges have been
constantly reminded to strictly adhere to the rule on the speedy disposition of cases and observe the
periods prescribed by the Constitution for deciding cases, which is three months from the filing of the last
pleading, brief or memorandum for lower courts.14 To further impress upon judges such mandate, the
Court has issued guidelines (Administrative Circular No. 3-99 dated January 15, 1999) that would insure
the speedy disposition of cases and has therein reminded judges to scrupulously observe the periods
prescribed in the Constitution.

Nonetheless, the Court has been mindful of the plight of our judges and understanding of circumstances
that may hinder them from promptly disposing of their businesses. Hence, the Court has allowed
extensions of time to decide cases beyond the 90-day period. All that a judge needs to do is to request
and justify an extension of time to decide the cases, and the Court has almost invariably granted such

Judge Carbonell failed to decide a total of 63 cases and to resolve 16 pending motions or incidents within
the 90-day reglementary period. He intimated that his poor health affected his pace in deciding the cases.
Had such been the case, then he should have explained his predicament to the Court and asked for an
extension of time to decide the cases. Unfortunately, he failed to do so.

The Audit Teams Report shows that, in an apparent attempt to suspend the running of the 90-day period
to decide the cases, Judge Carbonell liberally gave the parties in most of the overdue cases several
extensions of time to file their respective memoranda. Some extensions were even for indefinite periods,
with the parties being simply given "ample time to file their memo," as the relevant court orders stated.

In view of the foregoing, Judge Carbonells excuses are futile in the light of the following provisions of
Administrative Circular No. 28, dated July 3, 1989, viz:

(3)A case is considered submitted for decision upon the admission of the evidence of the parties at the
termination of the trial. The ninety (90) days period for deciding the case shall commence to run from
submission of the case for decision without memoranda; in case the Court requires or allows its filing, the
case shall be considered submitted for decision upon the filing of the last memorandum or the expiration
of the period to do so, whichever is earlier. Lack of transcript of stenographic notes shall not be a valid
reason to interrupt or suspend the period for deciding the case unless the case was previously heard by
another judge not the deciding judge in which case the latter shall have the full period of ninety (90) days
from the completion of the transcripts within which to decide the same.

(4) The court may grant extension of time to file memoranda, but the ninety (90) day period for deciding
shall not be interrupted thereby.

Without a doubt, Judge Carbonells failure to decide several cases within the reglementary period, without
justifiable and credible reasons, constituted gross inefficiency, warranting the imposition of administrative
sanctions,15 like fines


DENNIS A.B. FUNA, Petitioner,


The people of Taiwan and of the Philippines maintained an unofficial relationship facilitated by the offices
of the Taipei Economic and Cultural Office, for the former, and the MECO, for the latter.11

The MECO was organized on 16 December 1997 as a non-stock, non-profit corporation under
BataPambansa Blg. 68 or the Corporation Code. From the moment it was incorporated, the MECO
became the corporate entity "entrusted" by the Philippine government with the responsibility of fostering
"friendly" and "unofficial" relations with the people of Taiwan, particularly in the areas of trade, economic
cooperation, investment, cultural, scientific and educational exchanges. 15To enable it to carry out such
responsibility, the MECO was "authorized" by the government to perform certain "consular and other
functions" that relates to the promotion, protection and facilitation of Philippine interests in Taiwan. 16

Petitioner sent a letter to the COA requesting for a "copy of the latest financial and audit report" of the
MECO invoking, for that purpose, his "constitutional right to information on matters of public concern."
The petitioner made the request on the belief that the MECO, being under the "operational supervision" of
the Department of Trade and Industry (DTI), is a government owned and controlled corporation (GOCC)
and thus subject to the audit jurisdiction of the COA.19

Assistant Commissioner Naranjo revealed that the MECO was "not among the agencies audited by any of
the three Clusters of the Corporate Government Sector."21

On 7 September 2010, petitioner learned about the 25 August 2010 memorandum and its contents.

Taking the 25 August 2010 memorandum as an admission that the COA had never audited and
examined the accounts of the MECO, the petitioner filed the instant petition for mandamus on 8
September 2010. Petitioner filed the suit in his capacities as "taxpayer, concerned citizen, a member of
the Philippine Bar and law book author."22 He impleaded both the COA and the MECO.

Petitioner posits that by failing to audit the accounts of the MECO, the COA is neglecting its duty under
Section 2(1), Article IX-D of the Constitution to audit the accounts of an otherwise bona fide GOCC or
government instrumentality. It is the adamant claim of the petitioner that the MECO is a GOCC without an
original charter or, at least, a government instrumentality, the funds of which partake the nature of public

MECO denies the petitioners claim that it is a GOCC or a government instrumentality.37While performing
public functions, the MECO maintains that it is not owned or controlled by the government, and its funds
are private funds.

Issue: whether the COA is, under prevailing law, mandated to audit the accounts of the MECO.
Conversely, are the accounts of the MECO subject to the audit jurisdiction of the COA?

Ruling: Law, of course, identifies which accounts of what entities are subject to the audit jurisdiction of
the COA.

Under Section 2(1) of Article IX-D of the Constitution,77 the COA was vested with the "power, authority
and duty" to "examine, audit and settle" the "accounts" of the following entities:
1. The government, or any of its subdivisions, agencies and instrumentalities;
2. GOCCs with original charters;
3. GOCCs without original charters;
4. Constitutional bodies, commissions and offices that have been granted fiscal autonomy under
the Constitution; and
5. Non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the
government, which are required by law or the granting institution to submit to the COA for audit as
a condition of subsidy or equity.78

The term "accounts" mentioned in the subject constitutional provision pertains to the "revenue," "receipts,"
"expenditures" and "uses of funds and property" of the foregoing entities. 79

Complementing the constitutional power of the COA to audit accounts of "non-governmental entities
receiving subsidy or equity xxx from or through the government" is Section 29(1) 80 of the Audit Code,
which grants the COA visitorial authority over the following non-governmental entities:

1. Non-governmental entities "subsidized by the government";

2. Non-governmental entities "required to pay levy or government share";
3. Non-governmental entities that have "received counterpart funds from the government"; and
4. Non-governmental entities "partly funded by donations through the government."
Section 29(1) of the Audit Code, however, limits the audit of the foregoing non-governmental entities only
to "funds xxx coming from or through the government."81 This section of the Audit Code is, in turn,
substantially reproduced in Section 14(1), Book V of the Administrative Code. 82

In addition to the foregoing, the Administrative Code also empowers the COA to examine and audit "the
books, records and accounts" of public utilities "in connection with the fixing of rates of every nature, or in
relation to the proceedings of the proper regulatory agencies, for purposes of determining franchise tax." 83

Both petitioner and the COA claim that the accounts of the MECO are within the audit jurisdiction of the
COA, but vary on the extent of the audit and on what type of auditable entity the MECO is. The petitioner
posits that all accounts of the MECO are auditable as the latter is a bona fide GOCC or government
instrumentality.84 On the other hand, the COA argues that only the accounts of the MECO that pertain to
the "verification fees" it collects on behalf of the DOLE are auditable because the former is merely a non-
governmental entity "required to pay xxx government share" per the Audit Code. 85


The MECO is not a GOCC or government instrumentality. It is a sui generis private entity especially
entrusted by the government with the facilitation of unofficial relations with the people in Taiwan without
jeopardizing the countrys faithful commitment to the One China policy of the PROC. However, despite its
non-governmental character, the MECO handles government funds in the form of the "verification fees" it
collects on behalf of the DOLE and the "consular fees" it collects under Section 2(6) of EO No. 15, s.
2001. Hence, under existing laws, the accounts of the MECO pertaining to its collection of such
"verification fees" and "consular fees" should be audited by the COA.