BOY SCOUTS OF THE G.R. No. 177131 This case arose when the COA issued Resolution No.

PHILIPPINES,
Petitioner, Present: 99-011[5] on August 19, 1999 (the COA Resolution), with the
subject Defining the Commissions policy with respect to the audit of the
CORONA, C.J., Boy Scouts of the Philippines. In its whereas clauses, the COA
CARPIO,
CARPIO MORALES, Resolution stated that the BSP was created as a public corporation
VELASCO, JR., under Commonwealth Act No. 111, as amended by Presidential Decree
NACHURA, No. 460 and Republic Act No. 7278; that in Boy Scouts of the
LEONARDO-DE CASTRO,
BRION, Philippines v. National Labor Relations Commission,[6] the Supreme
PERALTA, Court ruled that the BSP, as constituted under its charter, was a
- versus - BERSAMIN, government-controlled corporation within the meaning of Article
DEL CASTILLO,
IX(B)(2)(1) of the Constitution; and that the BSP is appropriately
ABAD,
VILLARAMA, JR., regarded as a government instrumentality under the 1987
PEREZ, [7]
Administrative Code. The COA Resolution also cited its constitutional
MENDOZA, and
mandate under Section 2(1), Article IX (D). Finally, the COA Resolution
SERENO, JJ.
reads:
NOW THEREFORE, in consideration of the
Promulgated: foregoing premises, the COMMISSION PROPER HAS
COMMISSION ON AUDIT, RESOLVED, AS IT DOES HEREBY RESOLVE, to
Respondent. June 7, 2011 conduct an annual financial audit of the Boy Scouts
DECISION of the Philippines in accordance with generally
LEONARDO-DE CASTRO, J.: accepted auditing standards, and express an opinion
on whether the financial statements which include the
The jurisdiction of the Commission on Audit (COA) over the Boy Scouts Balance Sheet, the Income Statement and the Statement
of the Philippines (BSP) is the subject matter of this controversy that of Cash Flows present fairly its financial position and
reached us via petition for prohibition[1] filed by the BSP under Rule 65 results of operations.
xxxx
of the 1997 Rules of Court. In this petition, the BSP seeks that the COA
BE IT RESOLVED FURTHERMORE, that for
be prohibited from implementing its June 18, 2002 Decision,[2] its purposes of audit supervision, the Boy Scouts of the
February 21, 2007 Resolution,[3] as well as all other issuances arising Philippines shall be classified among the
government corporations belonging to the
therefrom, and that all of the foregoing be rendered null and void. [4]
Educational, Social, Scientific, Civic and Research
Sector under the Corporate Audit Office I, to be audited,
Antecedent Facts and similar to the subsidiary corporations, by employing the
Background of the Case team audit approach.[8] (Emphases supplied.)
 The BSP sought reconsideration of the COA Resolution in
a letter[9] dated November 26, 1999 signed by the BSP National
President Jejomar C. Binay, who is now the Vice President of the
Republic, wherein he wrote:
It is the position of the BSP, with all due respect, that it is
not subject to the Commissions jurisdiction on the
following grounds:
1. We reckon that the ruling in the case of Boy Scouts of
the Philippines vs. National Labor Relations
Commission, et al. (G.R. No. 80767) classifying the
BSP as a government-controlled corporation is
anchored on the substantial Government participation in
the National Executive Board of the BSP. It is to be
noted that the case was decided when the BSP Charter
is defined by Commonwealth Act No. 111 as amended
by Presidential Decree 460.
However, may we humbly refer you to Republic Act No.
7278 which amended the BSPs charter after the cited
case was decided. The most salient of all amendments
in RA No. 7278 is the alteration of the composition of
the National Executive Board of the BSP.
The said RA virtually eliminated the substantial
government participation in the National Executive
Board by removing: (i) the President of the Philippines
and executive secretaries, with the exception of the
Secretary of Education, as members thereof; and (ii) the
appointment and confirmation power of the President of
the Philippines, as Chief Scout, over the members of
the said Board.
The BSP believes that the cited case has been
superseded by RA 7278. Thereby weakening the cases
conclusion that the BSP is a government-controlled
corporation (sic). The 1987 Administrative Code itself,
of which the BSP vs. NLRC relied on for some terms,
defines government-owned and controlled corporations
as agencies organized as stock or non-stock
corporations which the BSP, under its present charter,
is not.
Also, the Government, like in other GOCCs, does not
have funds invested in the BSP. What RA 7278 only
provides is that the Government or any of its
subdivisions, branches, offices, agencies and
instrumentalities can from time to time donate and
contribute funds to the BSP.
Also the BSP respectfully believes that the BSP is not
appropriately regarded as a government instrumentality
under the 1987 Administrative Code as stated in the
COA resolution. As defined by Section 2(10) of the said
code, instrumentality refers to any agency of the
National Government, not integrated within the
department framework, vested with special functions or
jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and
enjoying operational autonomy, usually through a
charter.
The BSP is not an entity administering special funds. It
is not even included in the DECS National Budget. x x x
It may be argued also that the BSP is not an agency of
the Government. The 1987 Administrative Code, merely
referred the BSP as an attached agency of the DECS
as distinguished from an actual line agency of
departments that are included in the National Budget.
The BSP believes that an attached agency is different
from an agency. Agency, as defined in Section 2(4) of
the Administrative Code, is defined as any of the
various units of the Government including a department,
bureau, office, instrumentality, government-owned or
controlled corporation or local government or distinct
unit therein.

Under the above definition, the BSP is neither a unit of
the Government; a department which refers to an
executive department as created by law (Section 2[7] of
the Administrative Code); nor a bureau which refers to
any principal subdivision or unit of any department
(Section 2[8], Administrative Code).[10]
Subsequently, requests for reconsideration of the COA
Resolution were also made separately by Robert P. Valdellon, Regional
Scout Director, Western Visayas Region, Iloilo City and Eugenio F.
Capreso, Council Scout Executive of Calbayog City.[11]
In a letter[12] dated July 3, 2000, Director Crescencio S. Sunico,
Corporate Audit Officer (CAO) I of the COA, furnished the BSP with a
copy of the Memorandum[13] dated June 20, 2000 of Atty. Santos M.
Alquizalas, the COA General Counsel. In said Memorandum, the COA
General Counsel opined that Republic Act No. 7278 did not supersede
the Courts ruling in Boy Scouts of the Philippines v. National Labor
Relations Commission, even though said law eliminated the substantial
government participation in the selection of members of the National
Executive Board of the BSP. The Memorandum further provides:
Analysis of the said case disclosed that the substantial
government participation is only one (1) of the three (3)
grounds relied upon by the Court in the resolution of the
case. Other considerations include the character of the
BSPs purposes and functions which has a public aspect
and the statutory designation of the BSP as a public
corporation. These grounds have not been deleted by
R.A. No. 7278. On the contrary, these were strengthened
as evidenced by the amendment made relative to BSPs
purposes stated in Section 3 of R.A. No. 7278.
On the argument that BSP is not appropriately
regarded as a government instrumentality and agency of
the government, such has already been answered and
clarified. The Supreme Court has elucidated this matter
in the BSP case when it declared that BSP is regarded
as, both a government-controlled corporation with an
original charter and as an instrumentality of the
Government. Likewise, it is not disputed that the
Administrative Code of 1987 designated the BSP as one
of the attached agencies of DECS. Being an attached
agency, however, it does not change its nature as a
government-controlled corporation with original charter
and, necessarily, subject to COA audit jurisdiction.
Besides, Section 2(1), Article IX-D of the Constitution
provides that COA shall have the power, authority, and
duty to examine, audit and settle all accounts pertaining
to the revenue and receipts of, and expenditures or uses
of funds and property, owned or held in trust by, or
pertaining to, the Government, or any of its subdivisions,
agencies or instrumentalities, including
government-owned or controlled corporations with
original charters.[14]
Based on the Memorandum of the COA General Counsel,
Director Sunico wrote:
In view of the points clarified by said
Memorandum upholding COA Resolution No. 99-011, we
have to comply with the provisions of the latter, among
which is to conduct an annual financial audit of the Boy
Scouts of the Philippines.[15]
In a letter dated November 20, 2000 signed by Director
Amorsonia B. Escarda, CAO I, the COA informed the BSP that a
preliminary survey of its organizational structure, operations and
accounting system/records shall be conducted on November 21 to 22,
2000.[16]
Upon the BSPs request, the audit was deferred for thirty (30)
days. The BSP then filed a Petition for Review with Prayer for
Preliminary Injunction and/or Temporary Restraining Order before the
COA. This was denied by the COA in its questioned Decision, which
held that the BSP is under its audit jurisdiction. The BSP moved for
reconsideration but this was likewise denied under its questioned
Resolution.[17]
This led to the filing by the BSP of this petition for prohibition with
preliminary injunction and temporary restraining order against the COA.
The Issue
As stated earlier, the sole issue to be resolved in this case is
whether the BSP falls under the COAs audit jurisdiction.
The Parties Respective
Arguments
The BSP contends that Boy Scouts of the Philippines v. National
Labor Relations Commission is inapplicable for purposes of determining
the audit jurisdiction of the COA as the issue therein was the jurisdiction
of the National Labor Relations Commission over a case for illegal
dismissal and unfair labor practice filed by certain BSP employees.[18]
While the BSP concedes that its functions do relate to those that
the government might otherwise completely assume on its own, it avers
that this alone was not determinative of the COAs audit jurisdiction over
it. The BSP further avers that the Court in Boy Scouts of the Philippines
v. National Labor Relations Commission simply stated x x x that in
respect of functions, the BSP is akin to a public corporation but this was
not synonymous to holding that the BSP is a government corporation or
[19]
entity subject to audit by the COA.
The BSP contends that Republic Act No. 7278 introduced crucial
amendments to its charter; hence, the findings of the Court in Boy
Scouts of the Philippines v. National Labor Relations Commission are
no longer valid as the government has ceased to play a controlling
influence in it. The BSP claims that the pronouncements of the Court
therein must be taken only within the context of that case; that the Court
had categorically found that its assets were acquired from the Boy
Scouts of America and not from the Philippine government, and that its
operations are financed chiefly from membership dues of the Boy
Scouts themselves as well as from property rentals; and that the BSP
may correctly be characterized as non-governmental, and hence,
beyond the audit jurisdiction of the COA. It further claims that the
designation by the Court of the BSP as a government agency or
instrumentality is mere obiter dictum.[20]
The BSP maintains that the provisions of Republic Act No. 7278
suggest that governance of BSP has come to be overwhelmingly a
private affair or nature, with government participation restricted to the
seat of the Secretary of Education, Culture and Sports.[21] It
cites Philippine Airlines Inc. v. Commission on Audit[22] wherein the
Court declared that, PAL, having ceased to be a government-owned or
controlled corporation is no longer under the audit jurisdiction of the
COA.[23] Claiming that the amendments introduced by Republic Act No.
7278 constituted a supervening event that changed the BSPs corporate
identity in the same way that the governments privatization program
changed PALs, the BSP makes the case that the government no longer
has control over it; thus, the COA cannot use the Boy Scouts of the
Philippines v. National Labor Relations Commission as its basis for the
exercise of its jurisdiction and the issuance of COA Resolution No.
99-011.[24] The BSP further claims as follows:
It is not far-fetched, in fact, to concede that BSPs
funds and assets are private in character. Unlike ordinary
public corporations, such as provinces, cities, and
municipalities, or government-owned and controlled
corporations, such as Land Bank of the Philippines and the
Development Bank of the Philippines, the assets and funds
of BSP are not derived from any government grant. For its
operations, BSP is not dependent in any way on any
government appropriation; as a matter of fact, it has not
 even been included in any appropriations for the
government. To be sure, COA has not alleged, in its
Resolution No. 99-011 or in the Memorandum of its General
Counsel, that BSP received, receives or continues to
receive assets and funds from any agency of the
government. The foregoing simply point to the private nature
of the funds and assets of petitioner BSP.
xxxx
As stated in petitioners third argument, BSPs assets
and funds were never acquired from the government. Its
operations are not in any way financed by the government,
as BSP has never been included in any appropriations act
for the government. Neither has the government invested
funds with BSP. BSP, has not been, at any time, a user of
government property or funds; nor have properties of the
government been held in trust by BSP. This is precisely the
reason why, until this time, the COA has not attempted to
subject BSP to its audit jurisdiction. x x x.[25]
To summarize its other arguments, the BSP contends that it is
not a government-owned or controlled corporation; neither is it an
instrumentality, agency, or subdivision of the government.
In its Comment,[26] the COA argues as follows:
1. The BSP is a public corporation created under
Commonwealth Act No. 111 dated October 31, 1936,
and whose functions relate to the fostering of public
virtues of citizenship and patriotism and the general
improvement of the moral spirit and fiber of the youth.
The manner of creation and the purpose for which the
BSP was created indubitably prove that it is a
government agency.
2. Being a government agency, the funds and
property owned or held in trust by the BSP are subject
to the audit authority of respondent Commission on
Audit pursuant to Section 2 (1), Article IX-D of the
1987 Constitution.
3. Republic Act No. 7278 did not change the
character of the BSP as a government-owned or
controlled corporation and government
instrumentality.[27]
The COA maintains that the functions of the BSP that include,
among others, the teaching to the youth of patriotism, courage,
self-reliance, and kindred virtues, are undeniably sovereign functions
enshrined under the Constitution and discussed by the Court in Boy
Scouts of the Philippines v. National Labor Relations Commission. The
COA contends that any attempt to classify the BSP as a private
corporation would be incomprehensible since no less than the law which
created it had designated it as a public corporation and its statutory
mandate embraces performance of sovereign functions.[28]
The COA claims that the only reason why the BSP employees
fell within the scope of the Civil Service Commission even before the
1987 Constitution was the fact that it was a government-owned or
controlled corporation; that as an attached agency of the Department of
Education, Culture and Sports (DECS), the BSP is an agency of the
government; and that the BSP is a chartered institution under Section
1(12) of the Revised Administrative Code of 1987, embraced under the
term government instrumentality.[29]
The COA concludes that being a government agency, the funds
and property owned or held by the BSP are subject to the audit authority
of the COA pursuant to Section 2(1), Article IX (D) of the 1987
Constitution.
In support of its arguments, the COA cites The Veterans
Federation of the Philippines (VFP) v. Reyes,[30] wherein the Court held
that among the reasons why the VFP is a public corporation is that its
charter, Republic Act No. 2640, designates it as one. Furthermore, the
COA quotes the Court as saying in that case:
 In several cases, we have dealt with the issue of
whether certain specific activities can be classified as
sovereign functions. These cases, which deal with activities
not immediately apparent to be sovereign functions, upheld
the public sovereign nature of operations needed either to
promote social justice or to stimulate patriotic sentiments
and love of country.
xxxx
Petitioner claims that its funds are not public funds
because no budgetary appropriations or government funds
have been released to the VFP directly or indirectly from the
DBM, and because VFP funds come from membership dues
and lease rentals earned from administering government
lands reserved for the VFP.
The fact that no budgetary appropriations have been
released to the VFP does not prove that it is a private
corporation. The DBM indeed did not see it fit to propose
budgetary appropriations to the VFP, having itself believed
that the VFP is a private corporation. If the DBM, however, is
mistaken as to its conclusion regarding the nature of VFP's
incorporation, its previous assertions will not prevent future
budgetary appropriations to the VFP. The erroneous
application of the law by public officers does not bar a
subsequent correct application of the law.[31] (Citations
omitted.)
The COA points out that the government is not precluded by law
from extending financial support to the BSP and adding to its funds, and
that as a government instrumentality which continues to perform a vital
function imbued with public interest and reflective of the governments
policy to stimulate patriotic sentiments and love of country, the BSPs
funds from whatever source are public funds, and can be used solely for
public purpose in pursuance of the provisions of Republic Act No.
[7278].[32]
The COA claims that the fact that it has not yet audited the BSPs
funds may not bar the subsequent exercise of its audit jurisdiction.
The BSP filed its Reply[33] on August 29, 2007 maintaining that
its statutory designation as a public corporation and the public character
of its purpose and functions are not determinative of the COAs audit
jurisdiction; reiterating its stand that Boy Scouts of the Philippines v.
National Labor Relations Commission is not applicable anymore
because the aspect of government ownership and control has been
removed by Republic Act No. 7278; and concluding that the funds and
property that it either owned or held in trust are not public funds and are
not subject to the COAs audit jurisdiction.
Thereafter, considering the BSPs claim that it is a private
corporation, this Court, in a Resolution[34] dated July 20, 2010, required
the parties to file, within a period of twenty (20) days from receipt of said
Resolution, their respective comments on the issue of whether
Commonwealth Act No. 111, as amended by Republic Act No. 7278, is
constitutional.
In compliance with the Courts resolution, the parties filed their
respective Comments.
In its Comment[35] dated October 22, 2010, the COA argues that
the constitutionality of Commonwealth Act No. 111, as amended, is not
determinative of the resolution of the present controversy on the COAs
audit jurisdiction over petitioner, and in fact, the controversy may be
resolved on other grounds; thus, the requisites before a judicial inquiry
may be made, as set forth in Commissioner of Internal Revenue v.
Court of Tax Appeals,[36] have not been fully met.[37] Moreover, the COA
maintains that behind every law lies the presumption of
constitutionality.[38] The COA likewise argues that contrary to the BSPs
position, repeal of a law by implication is not favored.[39] Lastly, the COA
claims that there was no violation of Section 16, Article XII of the 1987
Constitution with the creation or declaration of the BSP as a government
corporation. Citing Philippine Society for the Prevention of Cruelty to
Animals v. Commission on Audit,[40] the COA further alleges:
The true criterion, therefore, to determine whether a
corporation is public or private is found in the totality of the
relation of the corporation to the State. If the corporation is
created by the State as the latters own agency or
instrumentality to help it in carrying out its governmental
functions, then that corporation is considered public;
otherwise, it is private. x x x.[41]
For its part, in its Comment[42] filed on December 3, 2010, the
BSP submits that its charter, Commonwealth Act No. 111, as amended
by Republic Act No. 7278, is constitutional as it does not violate Section
16, Article XII of the Constitution. The BSP alleges that while [it] is not a
public corporation within the purview of COAs audit jurisdiction, neither
is it a private corporation created by special law falling within the ambit
of the constitutional prohibition x x x.[43] The BSP further alleges:
Petitioners purpose is embodied in Section 3 of C.A.
No. 111, as amended by Section 1 of R.A. No. 7278, thus:
xxxx
A reading of the foregoing provision shows that
petitioner was created to advance the interest of the youth,
specifically of young boys, and to mold them into becoming
good citizens. Ultimately, the creation of petitioner redounds
to the benefit, not only of those boys, but of the public good
or welfare. Hence, it can be said that petitioners purpose
and functions are more of a public rather than a private
character. Petitioner caters to all boys who wish to join the
organization without any distinction. It does not limit its
membership to a particular class of boys. Petitioners
members are trained in scoutcraft and taught patriotism,
civic consciousness and responsibility, courage,
self-reliance, discipline and kindred virtues, and moral
values, preparing them to become model citizens and
outstanding leaders of the country.[44]
The BSP reiterates its stand that the public character of its
purpose and functions do not place it within the ambit of the audit
jurisdiction of the COA as it lacks the government ownership or control
that the Constitution requires before an entity may be subject of said
jurisdiction.[45] It avers that it merely stated in its Reply that the
withdrawal of government control is akin to privatization, but it does not
necessarily mean that petitioner is a private corporation.[46] The BSP
claims that it has a unique characteristic which neither classifies it as a
purely public nor a purely private corporation;[47] that it is not a
quasi-public corporation; and that it may belong to a different class
altogether.[48]
The BSP claims that assuming arguendo that it is a private
corporation, its creation is not contrary to the purpose of Section 16,
Article XII of the Constitution; and that the evil sought to be avoided by
said provision is inexistent in the enactment of the BSPs charter,[49] as,
(i) it was not created for any pecuniary purpose; (ii) those who will
primarily benefit from its creation are not its officers but its entire
membership consisting of boys being trained in scoutcraft all over the
country; (iii) it caters to all boys who wish to join the organization without
any distinction; and (iv) it does not limit its membership to a particular
class or group of boys. Thus, the enactment of its charter confers no
special privilege to particular individuals, families, or groups; nor does it
bring about the danger of granting undue favors to certain groups to the
prejudice of others or of the interest of the country, which are the evils
sought to be prevented by the constitutional provision involved.[50]
Finally, the BSP states that the presumption of constitutionality
of a legislative enactment prevails absent any clear showing of its
repugnancy to the Constitution.[51]
The Ruling of the Court
After looking at the legislative history of its amended charter and
carefully studying the applicable laws and the arguments of both parties,
we find that the BSP is a public corporation and its funds are subject to
the COAs audit jurisdiction.
The BSP Charter (Commonwealth Act No. 111, approved on
October 31, 1936), entitled An Act to Create a Public Corporation to be
Known as the Boy Scouts of the Philippines, and to Define its Powers
and Purposes created the BSP as a public corporation to serve the
following public interest or purpose:
Sec. 3. The purpose of this corporation shall be to
promote through organization and cooperation with other
agencies, the ability of boys to do useful things for
themselves and others, to train them in scoutcraft, and to
inculcate in them patriotism, civic consciousness and
responsibility, courage, self-reliance, discipline and
kindred virtues, and moral values, using the method
which are in common use by boy scouts.
Presidential Decree No. 460, approved on May 17, 1974,
amended Commonwealth Act No. 111 and provided substantial
changes in the BSP organizational structure. Pertinent provisions are
quoted below:
Section II. Section 5 of the said Act is also
amended to read as follows:
The governing body of the said corporation shall
consist of a National Executive Board composed of (a)
the President of the Philippines or his representative; (b)
the charter and life members of the Boy Scouts of the
Philippines; (c) the Chairman of the Board of Trustees of
the Philippine Scouting Foundation; (d) the Regional
Chairman of the Scout Regions of the Philippines; (e) the
Secretary of Education and Culture, the Secretary of
Social Welfare, the Secretary of National Defense, the
Secretary of Labor, the Secretary of Finance, the
Secretary of Youth and Sports, and the Secretary of
Local Government and Community Development; (f) an
equal number of individuals from the private sector; (g)
the National President of the Girl Scouts of the
Philippines; (h) one Scout of Senior age from each Scout
Region to represent the boy membership; and (i) three
representatives of the cultural minorities. Except for the
Regional Chairman who shall be elected by the Regional
Scout Councils during their annual meetings, and the
Scouts of their respective regions, all members of the
National Executive Board shall be either by appointment
or cooption, subject to ratification and confirmation by the
Chief Scout, who shall be the Head of State. Vacancies
in the Executive Board shall be filled by a majority vote of
the remaining members, subject to ratification and
confirmation by the Chief Scout. The by-laws may
prescribe the number of members of the National
Executive Board necessary to constitute a quorum of the
board, which number may be less than a majority of the
whole number of the board. The National Executive
Board shall have power to make and to amend the
by-laws, and, by a two-thirds vote of the whole board at a
meeting called for this purpose, may authorize and cause
to be executed mortgages and liens upon the property of
the corporation.
Subsequently, on March 24, 1992, Republic Act No. 7278 further
amended Commonwealth Act No. 111 by strengthening the volunteer
and democratic character of the BSP and reducing government
representation in its governing body, as follows:
Section 1. Sections 2 and 3 of Commonwealth
Act. No. 111, as amended, is hereby amended to read as
follows:
"Sec. 2. The said corporation shall have the
powers of perpetual succession, to sue and be sued; to
enter into contracts; to acquire, own, lease, convey and
dispose of such real and personal estate, land grants,
rights and choses in action as shall be necessary for
corporate purposes, and to accept and receive funds,
real and personal property by gift, devise, bequest or
other means, to conduct fund-raising activities; to adopt
and use a seal, and the same to alter and destroy; to
have offices and conduct its business and affairs in
Metropolitan Manila and in the regions, provinces, cities,
municipalities, and barangays of the Philippines, to make
and adopt by-laws, rules and regulations not inconsistent
with this Act and the laws of the Philippines, and
generally to do all such acts and things, including the
establishment of regulations for the election of
associates and successors, as may be necessary to
carry into effect the provisions of this Act and promote
the purposes of said corporation: Provided, That said
corporation shall have no power to issue certificates of
stock or to declare or pay dividends, its objectives and
purposes being solely of benevolent character and not
for pecuniary profit of its members.
"Sec. 3. The purpose of this corporation shall
be to promote through organization and cooperation
with other agencies, the ability of boys to do useful
things for themselves and others, to train them in
scoutcraft, and to inculcate in them patriotism, civic
consciousness and responsibility, courage,
self-reliance, discipline and kindred virtues, and
moral values, using the method which are in
common use by boy scouts."
Sec. 2. Section 4 of Commonwealth Act No. 111,
as amended, is hereby repealed and in lieu thereof,
Section 4 shall read as follows:
"Sec. 4. The President of the Philippines shall
be the Chief Scout of the Boy Scouts of the
Philippines."
Sec. 3. Sections 5, 6, 7 and 8 of Commonwealth
Act No. 111, as amended, are hereby amended to read
as follows:
"Sec. 5. The governing body of the said
corporation shall consist of a National Executive
Board, the members of which shall be Filipino citizens of
good moral character. The Board shall be composed
of the following:
"(a) One (1) charter member of the Boy Scouts of
the Philippines who shall be elected by the members of
the National Council at its meeting called for this
purpose;
"(b) The regional chairmen of the scout regions
who shall be elected by the representatives of all the
local scout councils of the region during its meeting
called for this purpose: Provided, That a candidate for
regional chairman need not be the chairman of a local
scout council;
"(c) The Secretary of Education, Culture and
Sports;
"(d) The National President of the Girl Scouts of
the Philippines;
"(e) One (1) senior scout, each from Luzon,
Visayas and Mindanao areas, to be elected by the senior
scout delegates of the local scout councils to the scout
youth forums in their respective areas, in its meeting
called for this purpose, to represent the boy scout
membership;
"(f) Twelve (12) regular members to be elected by
the members of the National Council in its meeting called
for this purpose;
"(g) At least ten (10) but not more than fifteen (15)
additional members from the private sector who shall be
elected by the members of the National Executive Board
referred to in the immediately preceding paragraphs (a),
(b), (c), (d), (e) and (f) at the organizational meeting of
the newly reconstituted National Executive Board which
shall be held immediately after the meeting of the
National Council wherein the twelve (12) regular
members and the one (1) charter member were elected.
xxxx
"Sec. 8. Any donation or contribution which from
time to time may be made to the Boy Scouts of the
Philippines by the Government or any of its subdivisions,
branches, offices, agencies or instrumentalities or by a
 foreign government or by private, entities and individuals
shall be expended by the National Executive Board in
pursuance of this Act.
The BSP as a Public
Corporation under Par. 2, Art. 2
of the Civil Code
There are three classes of juridical persons under Article 44 of
the Civil Code and the BSP, as presently constituted under Republic Act
No. 7278, falls under the second classification. Article 44 reads:
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and
entities for public interest or purpose created by law;
their personality begins as soon as they have been
constituted according to law;
(3) Corporations, partnerships and associations
for private interest or purpose to which the law grants
a juridical personality, separate and distinct from that of
each shareholder, partner or member. (Emphases
supplied.)
The BSP, which is a corporation created for a public interest or
purpose, is subject to the law creating it under Article 45 of the Civil
Code, which provides:
Art. 45. Juridical persons mentioned in Nos. 1
and 2 of the preceding article are governed by the
laws creating or recognizing them.
Private corporations are regulated by laws of
general application on the subject.
Partnerships and associations for private interest
or purpose are governed by the provisions of this Code
concerning partnerships. (Emphasis and underscoring
supplied.)
The purpose of the BSP as stated in its amended charter shows
that it was created in order to implement a State policy declared in
Article II, Section 13 of the Constitution, which reads:
ARTICLE II - DECLARATION OF PRINCIPLES AND
STATE POLICIES
Section 13. The State recognizes the vital role of
the youth in nation-building and shall promote and
protect their physical, moral, spiritual, intellectual, and
social well-being. It shall inculcate in the youth patriotism
and nationalism, and encourage their involvement in
public and civic affairs.
Evidently, the BSP, which was created by a special law to serve
a public purpose in pursuit of a constitutional mandate, comes within the
class of public corporations defined by paragraph 2, Article 44 of the
Civil Code and governed by the law which creates it, pursuant to Article
45 of the same Code.
The BSPs Classification
Under the Administrative
Code of 1987
The public, rather than private, character of the BSP is
recognized by the fact that, along with the Girl Scouts of the Philippines,
it is classified as an attached agency of the DECS under Executive
Order No. 292, or the Administrative Code of 1987, which states:
TITLE VI EDUCATION, CULTURE AND
SPORTS
Chapter 8 Attached Agencies
SEC. 20. Attached Agencies. The following
agencies are hereby attached to the Department:
xxxx
(12) Boy Scouts of the Philippines;
(13) Girl Scouts of the Philippines.
 The administrative relationship of an attached agency to the
department is defined in the Administrative Code of 1987 as follows:
BOOK IV
THE EXECUTIVE BRANCH
Chapter 7 ADMINISTRATIVE RELATIONSHIP
SEC. 38. Definition of Administrative Relationship.
Unless otherwise expressly stated in the Code or in other
laws defining the special relationships of particular
agencies, administrative relationships shall be
categorized and defined as follows:
xxxx
(3) Attachment. (a) This refers to the lateral
relationship between the department or its equivalent
and the attached agency or corporation for purposes of
policy and program coordination. The coordination
may be accomplished by having the department
represented in the governing board of the attached
agency or corporation, either as chairman or as a
member, with or without voting rights, if this is
permitted by the charter; having the attached
corporation or agency comply with a system of periodic
reporting which shall reflect the progress of programs
and projects; and having the department or its equivalent
provide general policies through its representative in the
board, which shall serve as the framework for the internal
policies of the attached corporation or agency.
(Emphasis ours.)
As an attached agency, the BSP enjoys operational autonomy, as long
as policy and program coordination is achieved by having at least one
representative of government in its governing board, which in the
case of the BSP is the DECS Secretary. In this sense, the BSP is not
under government control or supervision and control. Still this
characteristic does not make the attached chartered agency a private
corporation covered by the constitutional proscription in question.
Art. XII, Sec. 16 of the
Constitution refers to private
corporations created by
government for proprietary or
economic/business purposes
At the outset, it should be noted that the provision of Section 16
in issue is found in Article XII of the Constitution, entitled National
Economy and Patrimony. Section 1 of Article XII is quoted as follows:
SECTION 1. The goals of the national economy
are a more equitable distribution of opportunities, income,
and wealth; a sustained increase in the amount of goods
and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to
raising the quality of life for all, especially the
underprivileged.
The State shall promote industrialization and full
employment based on sound agricultural development
and agrarian reform, through industries that make full
and efficient use of human and natural resources, and
which are competitive in both domestic and foreign
markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade
practices.
In the pursuit of these goals, all sectors of the
economy and all regions of the country shall be given
optimum opportunity to develop. Private enterprises,
including corporations, cooperatives, and similar
collective organizations, shall be encouraged to broaden
the base of their ownership.
 The BSP is a Public Corporation
The scope and coverage of Section 16, Article XII of the Not Subject to the Test of
Government Ownership or
Constitution can be seen from the aforementioned declaration of state Control and Economic Viability
policies and goals which pertains to national
economy and patrimony and the interests of the people in The BSP is a public corporation or a government agency or
economic development. instrumentality with juridical personality, which does not fall within the
Section 16, Article XII deals with the formation, organization, constitutional prohibition in Article XII, Section 16, notwithstanding the
or regulation of private corporations,[52] which should be done amendments to its charter. Not all corporations, which
through a general law enacted by Congress, provides for an exception, are notgovernment owned or controlled, are ipso facto to be considered
that is: if the corporation is government owned or controlled; its creation private corporations as there exists another distinct class of
is in the interest of the common good; and it meets the test of economic corporations or chartered institutions which are otherwise known as
viability. The rationale behind Article XII, Section 16 of the 1987 public corporations. These corporations are treated by law as agencies
Constitution was explained in Feliciano v. Commission on Audit,[53] in or instrumentalities of the government which are not subject to the tests
the following manner: of ownership or control and economic viability but to different criteria
The Constitution emphatically prohibits the
creation of private corporations except by a general law relating to their public purposes/interests or constitutional policies and
applicable to all citizens. The purpose of this objectives and their administrative relationship to the government or any
constitutional provision is to ban private
of its Departments or Offices.
corporations created by special charters, which
historically gave certain individuals, families or
groups special privileges denied to other Classification of Corporations
citizens.[54] (Emphasis added.) Under Section 16, Article XII of
the Constitution on National
It may be gleaned from the above discussion that Article XII, Economy and Patrimony
Section 16 bans the creation of private corporations by
special law. The said constitutional provision should not be construed The dissenting opinion of Associate Justice Antonio T. Carpio, citing a
so as to prohibit the creation of public corporations or a corporate line of cases, insists that the Constitution recognizes only two classes of
agency or instrumentality of the government intended to serve a public corporations: private corporations under a general law,
interest or purpose, which should not be measured on the basis of and government-owned or controlled corporations created
economic viability, but according to the public interest or purpose it by special charters.
serves as envisioned by paragraph (2), of Article 44 of the Civil
Code and the pertinent provisions of the Administrative Code of 1987. We strongly disagree. Section 16, Article XII should not be
construed so as to prohibit Congress from creating public
corporations. In fact, Congress has enacted numerous laws creating
public corporations or government agencies or instrumentalities vested
with corporate powers. Moreover, Section 16, Article XII, which relates
to National Economy and Patrimony, could not have tied the hands of
Congress in creating public corporations to serve any of the
constitutional policies or objectives.
In his dissent, Justice Carpio contends that
this ponente introduces a totally different species of corporation, which
is neither a private corporation nor a government owned or controlled
corporation and, in so doing, is missing the fact that the BSP, which was
created as a non-stock, non-profit corporation, can only be either a
private corporation or a government owned or controlled corporation.
Note that in Boy Scouts of the Philippines v. National Labor
Relations Commission, the BSP, under its former charter, was regarded
as both a government owned or controlled corporation with original
charter and a public corporation. The said case pertinently stated:
While the BSP may be seen to be a mixed type
of entity, combining aspects of both public and
private entities, we believe that considering the
character of its purposes and its functions, the statutory
designation of the BSP as "a public
corporation" and the substantial participation of the
Government in the selection of members of the National
Executive Board of the BSP, the BSP, as presently
constituted under its charter, is a
government-controlled corporation within the
meaning of Article IX (B) (2) (1) of the Constitution.
We are fortified in this conclusion when we note
that the Administrative Code of 1987 designates the BSP
as one of the attached agencies of the Department of
Education, Culture and Sports ("DECS"). An "agency of
the Government" is defined as referring to any of the
various units of the Government including a department,
bureau, office, instrumentality, government-owned or
-controlled corporation, or local government or distinct
unit therein. "Government instrumentality" is in turn
defined in the 1987 Administrative Code in the following
manner:
Instrumentality - refers to any
agency of the National Government, not
integrated within the department
framework, vested with special functions
or jurisdiction by law, endowed with
some if not all corporate powers,
administering special funds, and enjoying
operational autonomy usually through a
charter. This term includes regulatory
agencies, chartered institutions and
government-owned or controlled
corporations.
The same Code describes a "chartered
institution" in the following terms:
Chartered institution - refers to
any agency organized or operating
under a special charter, and vested by
law with functions relating to specific
constitutional policies or objectives. This
term includes the state universities and
colleges, and the monetary authority of
the State.
We believe that the BSP is appropriately
regarded as "a government instrumentality" under the
1987 Administrative Code.
It thus appears that the BSP may be regarded
as both a "government controlled corporation with
an original charter" and as an "instrumentality" of
the Government within the meaning of Article IX (B)
 (2) (1) of the Constitution. x x x.[55] (Emphases
supplied.)
The existence of public or government corporate or juridical
entities or chartered institutions by legislative fiat distinct from private
corporations and government owned or controlled corporation is best
exemplified by the 1987 Administrative Code cited above, which we
quote in part:
Sec. 2. General Terms Defined. Unless the
specific words of the text, or the context as a whole, or a
particular statute, shall require a different meaning:
xxxx
(10) "Instrumentality" refers to any agency of the
National Government, not integrated within the
department framework, vested with special functions or
jurisdiction by law, endowed with some if not all
corporate powers, administering special funds,
and enjoying operational autonomy, usually through
a charter. This term includes regulatory agencies,
chartered institutions and government-owned or
controlled corporations. 
 Ownership and Control Tests
xxxx
(12) "Chartered institution" refers to any agency
organized or operating under a special charter, and
vested by law with functions relating to specific
constitutional policies or objectives. This term
includes the state universities and colleges and the
monetary authority of the State.
(13) "Government-owned or controlled
corporation" refers to any agency organized as a stock
or non-stock corporation, vested with functions relating to
public needs whether governmental or proprietary in
nature, and owned by the Government directly or
through its instrumentalities either wholly, or, where
applicable as in the case of stock corporations, to the
extent of at least fifty-one (51) per cent of its capital stock:
Provided, That government-owned or controlled
corporations may be further categorized by the
Department of the Budget, the Civil Service
Commission, and the Commission on Audit for
purposes of the exercise and discharge of their
respective powers, functions and responsibilities
with respect to such corporations.
Assuming for the sake of argument that the BSP ceases to be
owned or controlled by the government because of reduction of the
number of representatives of the government in the BSP Board, it does
not follow that it also ceases to be a government instrumentality as it still
retains all the characteristics of the latter as an attached agency of the
DECS under the Administrative Code. Vesting corporate powers to an
attached agency or instrumentality of the government is not
constitutionally prohibited and is allowed by the above-mentioned
provisions of the Civil Code and the 1987 Administrative Code.
Economic Viability and
Inapplicable to Public
Corporations
As presently constituted, the BSP still remains
an instrumentality of the national government. It is a public corporation
created by law for a public purpose, attached to the DECS pursuant to
its Charter and the Administrative Code of 1987. It is not a private
corporation which is required to be owned or controlled by the
government and be economically viable to justify its existence under a
special law.
 The dissent of Justice Carpio also submits that by recognizing a
new class of public corporation(s) created by special charter that will not
be subject to the test of economic viability, the constitutional provision
will be circumvented.
However, a review of the Record of the 1986 Constitutional
Convention reveals the intent of the framers of the highest law of our
land to distinguish between government corporations performing
governmental functions and corporations involved in business or
proprietary functions:
THE PRESIDENT. Commissioner Foz is recognized.
MR. FOZ. Madam President, I support the
proposal to insert ECONOMIC VIABILITY as one of the
grounds for organizing government corporations. x x x.
MR. OPLE. Madam President, the reason for this
concern is really that when the government creates a
corporation, there is a sense in which this corporation
becomes exempt from the test of economic performance.
We know what happened in the past. If a government
corporation loses, then it makes its claim upon the
taxpayers money through new equity infusions from the
government and what is always invoked is the common
good. x x
Therefore, when we insert the phrase
ECONOMIC VIABILITY together with the common good,
this becomes a restraint on future enthusiasts for state
capitalism to excuse themselves from the responsibility
of meeting the market test so that they become viable. x
x x.
xxxx
THE PRESIDENT. Commissioner Quesada is
recognized.
MS. QUESADA. Madam President, may we be
clarified by the committee on what is meant by economic
viability?
THE PRESIDENT. Please proceed.
MR. MONSOD. Economic viability normally is
determined by cost-benefit ratio that takes into
consideration all benefits, including economic external as
well as internal benefits. These are what they call
externalities in economics, so that these are not strictly
financial criteria. Economic viability involves what we call
economic returns or benefits of the country that are not
quantifiable in financial terms. x x x.
xxxx
MS. QUESADA. So, would this particular
formulation now really limit the entry of government
corporations into activities engaged in by corporations?
MR. MONSOD. Yes, because it is also
consistent with the economic philosophy that this
Commission approved that there should be
minimum government participation and intervention
in the economy.
MS. QUESDA. Sometimes this Commission
would just refer to Congress to provide the particular
requirements when the government would get into
corporations. But this time around, we specifically
mentioned economic viability. x x x.
MR. VILLEGAS. Commissioner Ople will restate
the reason for his introducing that amendment.
MR. OPLE. I am obliged to repeat what I said
earlier in moving for this particular amendment jointly
with Commissioner Foz. During the past three decades,
there had been a proliferation of government
corporations, very few of which have succeeded, and
many of which are now earmarked by the Presidential
Reorganization Commission for liquidation because they
failed the economic test. x x x.

xxxx
MS. QUESADA. But would not the Commissioner
say that the reason why many of the government-owned
or controlled corporations failed to come up with the
economic test is due to the management of these
corporations, and not the idea itself of government
corporations? It is a problem of efficiency and
effectiveness of management of these corporations
which could be remedied, not by eliminating government
corporations or the idea of getting into state-owned
corporations, but improving management which our
technocrats should be able to do, given the training and
the experience.
MR. OPLE. That is part of the economic viability,
Madam President.
MS. QUESADA. So, is the Commissioner saying
then that the Filipinos will benefit more if these
government-controlled corporations were given to private
hands, and that there will be more goods and services
that will be affordable and within the reach of the ordinary
citizens?
MR. OPLE. Yes. There is nothing here, Madam
President, that will prevent the formation of a
government corporation in accordance with a
special charter given by Congress. However, we are
raising the standard a little bit so that, in the future,
corporations established by the government will
meet the test of the common good but within that
framework we should also build a certain standard of
economic viability.
xxxx
THE PRESIDENT. Commissioner Padilla is
recognized.
MR. PADILLA. This is an inquiry to the committee.
With regard to corporations created by a special charter
for government-owned or controlled corporations, will
these be in the pioneer fields or in places where the
private enterprise does not or cannot enter? Or is this so
general that these government corporations can
compete with private corporations organized under a
general law?
MR. MONSOD. Madam President, x x x. There
are two types of government corporations those that
are involved in performing governmental functions,
like garbage disposal, Manila waterworks, and so on;
and those government corporations that are involved in
business functions. As we said earlier, there are two
criteria that should be followed for corporations that
want to go into business. First is for government
corporations to first prove that they can be efficient in the
areas of their proper functions. This is one of the
problems now because they go into all kinds of activities
but are not even efficient in their proper
functions. Secondly, they should not go into activities
that the private sector can do better.
MR. PADILLA. There is no question about
corporations performing governmental functions or
functions that are impressed with public interest. But
the question is with regard to matters that are
covered, perhaps not exhaustively, by private
enterprise. It seems that under this provision the only
qualification is economic viability and common good, but
shall government, through government-controlled
corporations, compete with private enterprise?
MR. MONSOD. No, Madam President. As we
said, the government should not engage in activities that
 private enterprise is engaged in and can do better. x x
x.[56] (Emphases supplied.)
Thus, the test of economic viability clearly does not apply to public
corporations dealing with governmental functions, to which category the
BSP belongs. The discussion above conveys the constitutional intent
not to apply this constitutional ban on the creation of public corporations
where the economic viability test would be irrelevant. The said test
would only apply if the corporation is engaged in some economic activity
or business function for the government.
It is undisputed that the BSP performs functions that are impressed with
public interest. In fact, during the consideration of the Senate Bill that
eventually became Republic Act No. 7278, which amended the BSP
Charter, one of the bills sponsors, Senator Joey Lina, described the
BSP as follows:
Senator Lina. Yes, I can only think of two
organizations involving the masses of our youth, Mr.
President, that should be given this kind of a privilege the
Boy Scouts of the Philippines and the Girl Scouts of the
Philippines. Outside of these two groups, I do not think
there are other groups similarly situated.
The Boy Scouts of the Philippines has a long
history of providing value formation to our young,
and considering how huge the population of the
young people is, at this point in time, and also
considering the importance of having an
organization such as this that will inculcate moral
uprightness among the young people, and further
considering that the development of these young
people at that tender age of seven to sixteen is vital
in the development of the country producing good
citizens, I believe that we can make an exception of the
Boy Scouting movement of the Philippines from this
general prohibition against providing tax exemption and
privileges.[57]
Furthermore, this Court cannot agree with the dissenting opinion which
equates the changes introduced by Republic Act No. 7278 to the BSP
Charter as clear manifestation of the intent of Congress to return the
BSP to the private sector. It was not the intent of Congress in enacting
Republic Act No. 7278 to give up all interests in this basic youth
organization, which has been its partner in forming responsible citizens
for decades.
In fact, as may be seen in the deliberation of the House Bills that
eventually resulted to Republic Act No. 7278, Congress worked closely
with the BSP to rejuvenate the organization, to bring it back to its former
glory reached under its original charter, Commonwealth Act No. 111,
and to correct the perceived ills introduced by the amendments to its
Charter under Presidential Decree No. 460. The BSP suffered from low
morale and decrease in number because the Secretaries of the different
departments in government who were too busy to attend the meetings
of the BSPs National Executive Board (the Board) sent representatives
who, as it turned out, changed from meeting to meeting. Thus, the
Scouting Councils established in the provinces and cities were not in
touch with what was happening on the national level, but they were left
to implement what was decided by the Board.[58]
A portion of the legislators discussion is quoted below to clearly show
their intent:
 HON. DEL MAR. x x x I need not mention to
you the value and the tremendous good that the Boy
Scout Movement has done not only for the youth in
particular but for the country in general. And that is
why, if we look around, our past and present national
leaders, prominent men in the various fields of
endeavor, public servants in government offices,
and civic leaders in the communities all over the land,
and not only in our country but all over the world
many if not most of them have at one time or another
been beneficiaries of the Scouting Movement. And so,
it is along this line, Mr. Chairman, that we would like to
have the early approval of this measure if only to pay
back what we owe much to the Scouting Movement. Now,
going to the meat of the matter, Mr. Chairman, if I may
just the Scouting Movement was enacted into law in
October 31, 1936 under Commonwealth Act No. 111. x x
x [W]e were acknowledged as the third biggest scouting
organization in the world x x x. And to our mind, Mr.
Chairman, this erratic growth and this decrease in
membership [number] is because of the bad policy
measures that were enunciated with the enactment or
promulgation by the President before of Presidential
Decree No. 460 which we feel is the culprit of the ills that
is flagging the Boy Scout Movement today. And so, this
is specifically what we are attacking, Mr. Chairman, the
disenfranchisement of the National Council in the
election of the national board. x x x. And so, this is what
we would like to be appraised of by the officers of the
Boy [Scouts] of the Philippines whom we are also
confident, have the best interest of the Boy Scout
Movement at heart and it is in this spirit, Mr. Chairman,
that we see no impediment towards working together, the
Boy Scout of the Philippines officers working together
with the House of Representatives in coming out with a
measure that will put back the vigor and enthusiasm of
the Boy Scout Movement. x x x.[59] (Emphasis ours.)
The following is another excerpt from the discussion on the
House version of the bill, in the Committee on Government Enterprises:
HON. AQUINO: x x x Well, obviously, the two bills
as well as the previous laws that have created the Boy
Scouts of the Philippines did not provide for any direct
government support by way of appropriation from the
national budget to support the activities of this
organization. The point here is, and at the same time
they have been subjected to a governmental intervention,
which to their mind has been inimical to the objectives
and to the institution per se, that is why they are seeking
legislative fiat to restore back the original mandate that
they had under Commonwealth Act 111.Such having
been the experience in the hands of government,
meaning, there has been negative interference on
their part and inasmuch as their mandate is coming
from a legislative fiat, then shouldnt it be, this
rhetorical question, shouldnt it be better for this
organization to seek a mandate from, lets say, the
government the Corporation Code of the Philippines
and register with the SEC as non-profit non-stock
corporation so that government intervention could
be very very minimal. Maybe thats a rhetorical question,
they may or they may not answer, ano. I dont know what
would be the benefit of a charter or a mandate being
provided for by way of legislation versus a registration
with the SEC under the Corporation Code of the
Philippines inasmuch as they dont get anything from the
government anyway insofar as direct funding. In fact, the
only thing that they got from government was
intervention in their affairs. Maybe we can solicit some
commentary comments from the resource
persons.Incidentally, dont take that as an objection, Im
not objecting. Im all for the objectives of these two bills. It
just occurred to me that since you have had very bad
experience in the hands of government and you will
always be open to such possible intervention even in the
future as long as you have a legislative mandate or your
mandate or your charter coming from legislative action.
xxxx
MR. ESCUDERO: Mr. Chairman, there may be
a disadvantage if the Boy Scouts of the Philippines
will be required to register with the SEC. If we are
registered with the SEC, there could be a danger of
proliferation of scout organization. Anybody can organize
and then register with the SEC. If there will be a
proliferation of this, then the organization will lose control
of the entire organization. Another disadvantage, Mr.
Chairman, anybody can file a complaint in the SEC
against the Boy Scouts of the Philippines and the SEC
may suspend the operation or freeze the assets of the
organization and hamper the operation of the
organization. I dont know, Mr. Chairman, how you look at
it but there could be a danger for anybody filing a
complaint against the organization in the SEC and the
SEC might suspend the registration permit of the
organization and we will not be able to operate.
HON. AQUINO: Well, that I think would be a
problem that will not be exclusive to corporations
registered with the SEC because even if you are
government corporation, court action may be taken
against you in other judicial bodies because the SEC is
simply another quasi-judicial body. But, I think, the first
point would be very interesting, the first point that
you raised. In effect, what you are saying is that with
the legislative mandate creating your charter, in
effect, you have been given some sort of a franchise
with this movement.
MR. ESCUDERO: Yes.
HON. AQUINO: Exclusive franchise of that
movement?
MR. ESCUDERO: Yes.
HON. AQUINO: Well, thats very well taken so I will
proceed with other issues, Mr. Chairman. x x
x.[60] (Emphases added.)
Therefore, even though the amended BSP charter did away with
most of the governmental presence in the BSP Board, this was done to
more strongly promote the BSPs objectives, which were not supported
under Presidential Decree No. 460. The BSP objectives, as pointed out
earlier, are consistent with the public purpose of the promotion of the
well-being of the youth, the future leaders of the country. The
amendments were not done with the view of changing the character of
the BSP into a privatized corporation. The BSP remains an agency
attached to a department of the government, the DECS, and it was not
at all stripped of its public character.
The ownership and control test is likewise irrelevant for a public
corporation like the BSP. To reiterate, the relationship of the BSP, an
attached agency, to the government, through the DECS, is defined in
the Revised Administrative Code of 1987. The BSP meets the minimum
statutory requirement of an attached government agency as the DECS
Secretary sits at the BSP Board ex officio, thus facilitating the policy and
program coordination between the BSP and the DECS.
Requisites for Declaration of
Unconstitutionality Not Met in
this Case
The dissenting opinion of Justice Carpio improperly raised the issue of
unconstitutionality of certain provisions of the BSP Charter. Even if the
parties were asked to Comment on the validity of the BSP charter by
the Court, this alone does not comply with the requisites for judicial
review, which were clearly set forth in a recent case:
When questions of constitutional significance are
raised, the Court can exercise its power of judicial review
only if the following requisites are present: (1) the
existence of an actual and appropriate case; (2) the
existence of personal and substantial interest on the
part of the party raising the constitutional question;
(3) recourse to judicial review is made at the earliest
opportunity; and (4) the constitutional question is
the lis mota of the case.[61] (Emphasis added.)
Thus, when it comes to the exercise of the power of judicial review, the
constitutional issue should be the very lis mota, or threshold issue, of
the case, and that it should be raised by either of the parties. These
requirements would be ignored under the dissents rather overreaching
view of how this case should have been decided. True, it was the Court
that asked the parties to comment, but the Court cannot be the one to
raise a constitutional issue. Thus, the Court chooses to once more
exhibit restraint in the exercise of its power to pass upon the validity of a
law.
Re: the COAs Jurisdiction
Regarding the COAs jurisdiction over the BSP, Section 8 of its
amended charter allows the BSP to receive contributions or donations
from the government. Section 8 reads:
Section 8. Any donation or contribution which
from time to time may be made to the Boy Scouts of
the Philippines by the Government or any of its
subdivisions, branches, offices, agencies or
instrumentalities shall be expended by the Executive
Board in pursuance of this Act.
The sources of funds to maintain the BSP were identified before
the House Committee on Government Enterprises while the bill was
being deliberated, and the pertinent portion of the discussion is quoted
below:
MR. ESCUDERO. Yes, Mr. Chairman. The
question is the sources of funds of the organization. First,
Mr. Chairman, the Boy Scouts of the Philippines do not
receive annual allotment from the government. The
organization has to raise its own funds through fund
drives and fund campaigns or fund raising activities.
Aside from this, we have some revenue producing
projects in the organization that gives us funds to support
the operation. x x x From time to time, Mr. Chairman,
when we have special activities we request for
assistance or financial assistance from government
agencies, from private business and corporations, but
this is only during special activities that the Boy Scouts of
the Philippines would conduct during the year. Otherwise,
we have to raise our own funds to support the
organization.[62]
The nature of the funds of the BSP and the COAs audit
jurisdiction were likewise brought up in said congressional deliberations,
to wit:
HON. AQUINO: x x x Insofar as this organization being a
government created organization, in fact, a government
corporation classified as such, are your funds or your
finances subjected to the COA audit?
MR. ESCUDERO: Mr. Chairman, we are not. Our funds
is not subjected. We dont fall under the jurisdiction of the
COA.
HON. AQUINO: All right, but before were you?
MR. ESCUDERO: No, Mr. Chairman.
MR. JESUS: May I? As historical backgrounder,
Commonwealth Act 111 was written by then Secretary
Jorge Vargas and before and up to the middle of the
Martial Law years, the BSP was receiving a subsidy in
the form of an annual a one draw from the Sweepstakes.
And, this was the case also with the Girl Scouts at the
Anti-TB, but then this was and the Boy Scouts then
because of this funding partly from government was
being subjected to audit in the contributions being
made in the part of the Sweepstakes. But this was
removed later during the Martial Law years with the
creation of the Human Settlements Commission. So the
situation right now is that the Boy Scouts does not
receive any funding from government, but then in the
case of the local councils and this legislative charter, so
to speak, enables the local councils even the national
headquarters in view of the provisions in the existing law
to receive donations from the government or any of its
instrumentalities, which would be difficult if the Boy
Scouts is registered as a private corporation with the
Securities and Exchange Commission. Government
bodies would be estopped from making donations to the
Boy Scouts, which at present is not the case because
there is the Boy Scouts charter, this Commonwealth Act
111 as amended by PD 463.
xxxx
HON. AMATONG: Mr. Chairman, in connection with
that.
THE CHAIRMAN: Yeah, Gentleman from
Zamboanga.
HON. AMATONG: There is no auditing being made
because theres no money put in the organization, but
how about donated funds to this organization? What are
the remedies of the donors of how will they know how
their money are being spent?
MR. ESCUDERO: May I answer, Mr. Chairman?
THE CHAIRMAN: Yes, gentleman.
MR. ESCUDERO: The Boy Scouts of the Philippines
has an external auditor and by the charter we are
required to submit a financial report at the end of each
year to the National Executive Board. So all the funds
donated or otherwise is accounted for at the end of the
year by our external auditor. In this case the SGV.[63]
Historically, therefore, the BSP had been subjected to
government audit in so far as public funds had been infused
thereto. However, this practice should not preclude the exercise of the
audit jurisdiction of COA, clearly set forth under the Constitution, which
pertinently provides:
Section 2. (1) The Commission on Audit shall
have the power, authority, and duty to examine, audit,
and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to,
the Government, or any of its subdivisions, agencies,
or instrumentalities, including government-owned
and controlled corporations with original
charters, and on a post-audit basis: (a) constitutional
bodies, commissions and offices that have been granted
fiscal autonomy under this Constitution; (b) autonomous
state colleges and universities; (c) other
 government-owned or controlled corporations with
original charters and their subsidiaries; and (d) such
non-governmental entities receiving subsidy or equity,
directly or indirectly, from or through the Government,
which are required by law of the granting institution to
submit to such audit as a condition of subsidy or equity. x
x x. [64]
Since the BSP, under its amended charter, continues to be a
public corporation or a government instrumentality, we come to the
inevitable conclusion that it is subject to the exercise by the COA of its
audit jurisdiction in the manner consistent with the provisions of the BSP
Charter.
WHEREFORE, premises considered, the instant petition for
prohibition is DISMISSED.
SO ORDERED.
G.R. No. 80391 February 28, 1989
SULTAN ALIMBUSAR P. LIMBONA, petitioner,
vs.
CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS
CONDING, ACMAD TOMAWIS, GERRY TOMAWIS, JESUS ORTIZ,
ANTONIO DELA FUENTE, DIEGO PALOMARES, JR., RAUL
DAGALANGIT, and BIMBO SINSUAT, respondents.
Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner.
Makabangkit B. Lanto for respondents.
SARMIENTO, J.:
The acts of the Sangguniang Pampook of Region XII are assailed in this
petition. The antecedent facts are as follows:
1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was
appointed as a member of the Sangguniang Pampook, Regional
Autonomous Government, Region XII, representing Lanao del Sur.
2. On March 12, 1987 petitioner was elected Speaker of the Regional
Legislative Assembly or Batasang Pampook of Central Mindanao
(Assembly for brevity).
3. Said Assembly is composed of eighteen (18) members. Two of said
members, respondents Acmad Tomawis and Pakil Dagalangit, filed on
March 23, 1987 with the Commission on Elections their respective
certificates of candidacy in the May 11, 1987 congressional elections for
the district of Lanao del Sur but they later withdrew from the aforesaid
election and thereafter resumed again their positions as members of the
Assembly.
4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman
of the Committee on Muslim Affairs of the House of Representatives,
invited Mr. Xavier Razul, Pampook Speaker of Region XI, Zamboanga
City and the petitioner in his capacity as Speaker of the Assembly,
Region XII, in a letter which reads:
The Committee on Muslim Affairs well undertake consultations and
dialogues with local government officials, civic, religious organizations
and traditional leaders on the recent and present political developments
and other issues affecting Regions IX and XII.
The result of the conference, consultations and dialogues would
hopefully chart the autonomous governments of the two regions as
envisioned and may prod the President to constitute immediately the
Regional Consultative Commission as mandated by the Commission.
You are requested to invite some members of the Pampook Assembly
of your respective assembly on November 1 to 15, 1987, with venue at
the Congress of the Philippines. Your presence, unstinted support and
cooperation is (sic) indispensable.
5. Consistent with the said invitation, petitioner sent a telegram to Acting 8. Sinsuat, Bimbo
Secretary Johnny Alimbuyao of the Assembly to wire all Assemblymen
that there shall be no session in November as "our presence in the 9. Tomawis, Acmad
house committee hearing of Congress take (sic) precedence over any
pending business in batasang pampook ... ." 10. Tomawis, Jerry

6. In compliance with the aforesaid instruction of the petitioner, Acting After declaring the presence of a quorum, the Speaker Pro-Tempore
Secretary Alimbuyao sent to the members of the Assembly the following was authorized to preside in the session. On Motion to declare the seat
telegram: of the Speaker vacant, all Assemblymen in attendance voted in the
affirmative, hence, the chair declared said seat of the Speaker vacant. 8.
TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE On November 5, 1987, the session of the Assembly resumed with the
TELEGRAM RECEIVED FROM SPEAKER LIMBONA QUOTE following Assemblymen present:
CONGRESSMAN JIMMY MATALAM CHAIRMAN OF THE HOUSE
COMMITTEE ON MUSLIM AFFAIRS REQUESTED ME TO ASSIST 1. Mangelen Conte-Presiding Officer
SAID COMMITTEE IN THE DISCUSSION OF THE PROPOSED
AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WERE ALL 2. Ali Salic
ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN
NOVEMBER AS OUR PRESENCE IN THE HOUSE COMMITTEE 3. Ali Salindatu
HEARING OF CONGRESS TAKE PRECEDENCE OVER ANY
PENDING BUSINESS IN BATASANG PAMPOOK OF MATALAM 4. Aratuc, Malik
FOLLOWS UNQUOTE REGARDS.
5. Cajelo, Rene
7. On November 2, 1987, the Assembly held session in defiance of
petitioner's advice, with the following assemblymen present: 6. Conding, Pilipinas (sic)

1. Sali, Salic 7. Dagalangit, Rakil

2. Conding, Pilipinas (sic) 8. Dela Fuente, Antonio

3. Dagalangit, Rakil 9. Ortiz, Jesus

4. Dela Fuente, Antonio 10 Palomares, Diego

5. Mangelen, Conte 11. Quijano, Jesus

6. Ortiz, Jesus 12. Sinsuat, Bimbo

7. Palomares, Diego 13. Tomawis, Acmad

14. Tomawis, Jerry
An excerpt from the debates and proceeding of said session reads:
HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House,
with the presence of our colleagues who have come to attend the
session today, I move to call the names of the new comers in order for
them to cast their votes on the previous motion to declare the position of
the Speaker vacant. But before doing so, I move also that the
designation of the Speaker Pro Tempore as the Presiding Officer and
Mr. Johnny Evangelists as Acting Secretary in the session last
November 2, 1987 be reconfirmed in today's session.
HON. SALIC ALI: I second the motions.
PRESIDING OFFICER: Any comment or objections on the two motions
presented? Me chair hears none and the said motions are approved. ...
Twelve (12) members voted in favor of the motion to declare the seat of
the Speaker vacant; one abstained and none voted against. 1
Accordingly, the petitioner prays for judgment as follows:
WHEREFORE, petitioner respectfully prays that-
(a) This Petition be given due course;
(b) Pending hearing, a restraining order or writ of preliminary injunction
be issued enjoining respondents from proceeding with their session to
be held on November 5, 1987, and on any day thereafter;
(c) After hearing, judgment be rendered declaring the proceedings held
by respondents of their session on November 2, 1987 as null and void;
(d) Holding the election of petitioner as Speaker of said Legislative
Assembly or Batasan Pampook, Region XII held on March 12, 1987
valid and subsisting, and
(e) Making the injunction permanent.
Petitioner likewise prays for such other relief as may be just and
equitable. 2
Pending further proceedings, this Court, on January 19, 1988, received
a resolution filed by the Sangguniang Pampook, "EXPECTING
ALIMBUSAR P. LIMBONA FROM MEMBERSHIP OF THE
SANGGUNIANG PAMPOOK AUTONOMOUS REGION XII," 3 on the
grounds, among other things, that the petitioner "had caused to be
prepared and signed by him paying [sic] the salaries and emoluments of
Odin Abdula, who was considered resigned after filing his Certificate of
Candidacy for Congressmen for the First District of Maguindanao in the
last May 11, elections. . . and nothing in the record of the Assembly will
show that any request for reinstatement by Abdula was ever
made . . ." 4 and that "such action of Mr. Lim bona in paying Abdula his
salaries and emoluments without authority from the Assembly . . .
constituted a usurpation of the power of the Assembly," 5 that the
petitioner "had recently caused withdrawal of so much amount of cash
from the Assembly resulting to the non-payment of the salaries and
emoluments of some Assembly [sic]," 6 and that he had "filed a case
before the Supreme Court against some members of the Assembly on
question which should have been resolved within the confines of the
Assembly," 7 for which the respondents now submit that the petition had
become "moot and academic". 8
The first question, evidently, is whether or not the expulsion of the
petitioner (pending litigation) has made the case moot and academic.
We do not agree that the case has been rendered moot and academic
by reason simply of the expulsion resolution so issued. For, if the
petitioner's expulsion was done purposely to make this petition moot
and academic, and to preempt the Court, it will not make it academic.
On the ground of the immutable principle of due process alone, we hold
that the expulsion in question is of no force and effect. In the first place,
there is no showing that the Sanggunian had conducted an investigation,
and whether or not the petitioner had been heard in his defense,
assuming that there was an investigation, or otherwise given the
opportunity to do so. On the other hand, what appears in the records is
an admission by the Assembly (at least, the respondents) that "since
November, 1987 up to this writing, the petitioner has not set foot at the
Sangguniang Pampook." 9 "To be sure, the private respondents aver
that "[t]he Assemblymen, in a conciliatory gesture, wanted him to come
to Cotabato City," 10 but that was "so that their differences could be
threshed out and settled." 11Certainly, that avowed wanting or desire to
thresh out and settle, no matter how conciliatory it may be cannot be a
substitute for the notice and hearing contemplated by law.
While we have held that due process, as the term is known in
administrative law, does not absolutely require notice and that a party
need only be given the opportunity to be heard, 12 it does not appear
herein that the petitioner had, to begin with, been made aware that he
had in fact stood charged of graft and corruption before his collegues. It
cannot be said therefore that he was accorded any opportunity to rebut
their accusations. As it stands, then, the charges now levelled amount to
mere accusations that cannot warrant expulsion.
In the second place, (the resolution) appears strongly to be a bare act of
vendetta by the other Assemblymen against the petitioner arising from
what the former perceive to be abduracy on the part of the latter. Indeed,
it (the resolution) speaks of "a case [having been filed] [by the petitioner]
before the Supreme Court . . . on question which should have been
resolved within the confines of the Assemblyman act which some
members claimed unnecessarily and unduly assails their integrity and
character as representative of the people" 13 an act that cannot possibly
justify expulsion. Access to judicial remedies is guaranteed by the
Constitution, 14 and, unless the recourse amounts to malicious
prosecution, no one may be punished for seeking redress in the courts.
We therefore order reinstatement, with the caution that should the past
acts of the petitioner indeed warrant his removal, the Assembly is
enjoined, should it still be so minded, to commence proper proceedings
therefor in line with the most elementary requirements of due process.
And while it is within the discretion of the members of the Sanggunian to
punish their erring colleagues, their acts are nonetheless subject to the
moderating band of this Court in the event that such discretion is
exercised with grave abuse.
It is, to be sure, said that precisely because the Sangguniang
Pampook(s) are "autonomous," the courts may not rightfully intervene in
their affairs, much less strike down their acts. We come, therefore, to
the second issue: Are the so-called autonomous governments of
Mindanao, as they are now constituted, subject to the jurisdiction of the
national courts? In other words, what is the extent of self-government
given to the two autonomous governments of Region IX and XII?
The autonomous governments of Mindanao were organized in Regions
IX and XII by Presidential Decree No. 1618 15 promulgated on July 25,
1979. Among other things, the Decree established "internal
autonomy" 16 in the two regions "[w]ithin the framework of the national
sovereignty and territorial integrity of the Republic of the Philippines and
its Constitution," 17 with legislative and executive machinery to exercise
the powers and responsibilities 18specified therein.
It requires the autonomous regional governments to "undertake all
internal administrative matters for the respective regions," 19 except to
"act on matters which are within the jurisdiction and competence of the
National Government," 20 "which include, but are not limited to, the
following:
(1) National defense and security;
(2) Foreign relations;
(3) Foreign trade;
(4) Currency, monetary affairs, foreign exchange, banking and
quasi-banking, and external borrowing,
(5) Disposition, exploration, development, exploitation or utilization of all
natural resources;
(6) Air and sea transport
(7) Postal matters and telecommunications;
(8) Customs and quarantine;
(9) Immigration and deportation;
(10) Citizenship and naturalization;
(11) National economic, social and educational planning; and
(12) General auditing. 21
In relation to the central government, it provides that "[t]he President
shall have the power of general supervision and control over the
Autonomous Regions ..." 22
Now, autonomy is either decentralization of administration or
decentralization of power. There is decentralization of administration
when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power
and in the process to make local governments "more responsive and
accountable," 23 "and ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of
national development and social progress." 24 At the same time, it
relieves the central government of the burden of managing local affairs
and enables it to concentrate on national concerns. The President
exercises "general supervision" 25 over them, but only to "ensure that
local affairs are administered according to law." 26 He has no control
over their acts in the sense that he can substitute their judgments with
his own. 27
Decentralization of power, on the other hand, involves an abdication of
political power in the favor of local governments units declare to be
autonomous . In that case, the autonomous government is free to chart
its own destiny and shape its future with minimum intervention from
central authorities. According to a constitutional author, decentralization
of power amounts to "self-immolation," since in that event, the
autonomous government becomes accountable not to the central
authorities but to its constituency. 28
But the question of whether or not the grant of autonomy Muslim
Mindanao under the 1987 Constitution involves, truly, an effort to
decentralize power rather than mere administration is a question foreign
to this petition, since what is involved herein is a local government unit
constituted prior to the ratification of the present Constitution. Hence,
the Court will not resolve that controversy now, in this case, since no
controversy in fact exists. We will resolve it at the proper time and in the
proper case.
Under the 1987 Constitution, local government units enjoy autonomy in
these two senses, thus:
Section 1. The territorial and political subdivisions of the Republic of the
Philippines are the provinces, cities, municipalities, and barangays.
Here shall be autonomous regions in Muslim Mindanao ,and the
Cordilleras as hereinafter provided. 29
Sec. 2. The territorial and political subdivisions shall enjoy local
autonomy. 30
xxx xxx xxx
See. 15. Mere shall be created autonomous regions in Muslim
Mindanao and in the Cordilleras consisting of provinces, cities,
municipalities, and geographical areas sharing common and distinctive
historical and cultural heritage, economic and social structures, and
other relevant characteristics within the framework of this Constitution
and the national sovereignty as well as territorial integrity of the
Republic of the Philippines. 31
An autonomous government that enjoys autonomy of the latter category
[CONST. (1987), art. X, sec. 15.] is subject alone to the decree of the
organic act creating it and accepted principles on the effects and limits
of "autonomy." On the other hand, an autonomous government of the
former class is, as we noted, under the supervision of the national
government acting through the President (and the Department of Local
Government). 32 If the Sangguniang Pampook (of Region XII), then, is
autonomous in the latter sense, its acts are, debatably beyond the
domain of this Court in perhaps the same way that the internal acts, say,
of the Congress of the Philippines are beyond our jurisdiction. But if it is
autonomous in the former category only, it comes unarguably under our
jurisdiction. An examination of the very Presidential Decree creating the
autonomous governments of Mindanao persuades us that they were
never meant to exercise autonomy in the second sense, that is, in which
the central government commits an act of self-immolation. Presidential
Decree No. 1618, in the first place, mandates that "[t]he President shall
have the power of general supervision and control over Autonomous
Regions."33 In the second place, the Sangguniang Pampook, their
legislative arm, is made to discharge chiefly administrative services,
thus:
SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang
Pampook shall exercise local legislative powers over regional affairs
within the framework of national development plans, policies and goals,
in the following areas:
(1) Organization of regional administrative system;
(2) Economic, social and cultural development of the Autonomous
Region;
(3) Agricultural, commercial and industrial programs for the Autonomous
Region;
(4) Infrastructure development for the Autonomous Region;
(5) Urban and rural planning for the Autonomous Region;
(6) Taxation and other revenue-raising measures as provided for in this
Decree;
(7) Maintenance, operation and administration of schools established by
the Autonomous Region;
(8) Establishment, operation and maintenance of health, welfare and
other social services, programs and facilities;
(9) Preservation and development of customs, traditions, languages and
culture indigenous to the Autonomous Region; and
(10) Such other matters as may be authorized by law,including the
enactment of such measures as may be necessary for the promotion of
the general welfare of the people in the Autonomous Region.
The President shall exercise such powers as may be necessary to
assure that enactment and acts of the Sangguniang Pampook and the
Lupong Tagapagpaganap ng Pook are in compliance with this Decree,
national legislation, policies, plans and programs.
The Sangguniang Pampook shall maintain liaison with the Batasang
Pambansa. 34
Hence, we assume jurisdiction. And if we can make an inquiry in the
validity of the expulsion in question, with more reason can we review the
petitioner's removal as Speaker.
Briefly, the petitioner assails the legality of his ouster as Speaker on the
grounds that: (1) the Sanggunian, in convening on November 2 and 5,
1987 (for the sole purpose of declaring the office of the Speaker vacant),
did so in violation of the Rules of the Sangguniang Pampook since the
Assembly was then on recess; and (2) assuming that it was valid, his
ouster was ineffective nevertheless for lack of quorum.
Upon the facts presented, we hold that the November 2 and 5, 1987
sessions were invalid. It is true that under Section 31 of the Region XII
Sanggunian Rules, "[s]essions shall not be suspended or adjourned
except by direction of the Sangguniang Pampook," 35 but it provides
likewise that "the Speaker may, on [sic] his discretion, declare a recess
of "short intervals." 36 Of course, there is disagreement between the
protagonists as to whether or not the recess called by the petitioner
effective November 1 through 15, 1987 is the "recess of short intervals"
referred to; the petitioner says that it is while the respondents insist that,
to all intents and purposes, it was an adjournment and that "recess" as
used by their Rules only refers to "a recess when arguments get heated
up so that protagonists in a debate can talk things out informally and
obviate dissenssion [sic] and disunity. 37 The Court agrees with the
respondents on this regard, since clearly, the Rules speak of "short
intervals." Secondly, the Court likewise agrees that the Speaker could
not have validly called a recess since the Assembly had yet to convene
on November 1, the date session opens under the same
Rules. 38 Hence, there can be no recess to speak of that could possibly
interrupt any session. But while this opinion is in accord with the
respondents' own, we still invalidate the twin sessions in question, since
at the time the petitioner called the "recess," it was not a settled matter
whether or not he could. do so. In the second place, the invitation
tendered by the Committee on Muslim Affairs of the House of
Representatives provided a plausible reason for the intermission sought.
Thirdly, assuming that a valid recess could not be called, it does not
appear that the respondents called his attention to this mistake. What
appears is that instead, they opened the sessions themselves behind
his back in an apparent act of mutiny. Under the circumstances, we find
equity on his side. For this reason, we uphold the "recess" called on the
ground of good faith.
It does not appear to us, moreover, that the petitioner had resorted to
the aforesaid "recess" in order to forestall the Assembly from bringing
about his ouster. This is not apparent from the pleadings before us. We
are convinced that the invitation was what precipitated it.
In holding that the "recess" in question is valid, we are not to be taken as
establishing a precedent, since, as we said, a recess can not be validly
declared without a session having been first opened. In upholding the
petitioner herein, we are not giving him a carte blanche to order
recesses in the future in violation of the Rules, or otherwise to prevent
the lawful meetings thereof.
Neither are we, by this disposition, discouraging the Sanggunian from
reorganizing itself pursuant to its lawful prerogatives. Certainly, it can do
so at the proper time. In the event that be petitioner should initiate
obstructive moves, the Court is certain that it is armed with enough
coercive remedies to thwart them. 39
In view hereof, we find no need in dwelling on the issue of quorum.
WHEREFORE, premises considered, the petition is GRANTED. The
Sangguniang Pampook, Region XII, is ENJOINED to (1) REINSTATE
the petitioner as Member, Sangguniang Pampook, Region XII; and (2)
REINSTATE him as Speaker thereof. No costs.
SO ORDERED.
G.R. No. 91649 May 14, 1991
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE,
SOCRATES MARANAN AND LORENZO SANCHEZ,petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION
(PAGCOR), respondent.
H.B. Basco & Associates for petitioners.
Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.
PARAS, J.:
A TV ad proudly announces:
"The new PAGCOR — responding through responsible gaming."
But the petitioners think otherwise, that is why, they filed the instant
petition seeking to annul the Philippine Amusement and Gaming
Corporation (PAGCOR) Charter — PD 1869, because it is allegedly
contrary to morals, public policy and order, and because —
A. It constitutes a waiver of a right prejudicial to a third person with a
right recognized by law. It waived the Manila City government's right to
impose taxes and license fees, which is recognized by law;
B. For the same reason stated in the immediately preceding paragraph,
the law has intruded into the local government's right to impose local
taxes and license fees. This, in contravention of the constitutionally
enshrined principle of local autonomy;
C. It violates the equal protection clause of the constitution in that it
legalizes PAGCOR — conducted gambling, while most other forms of
gambling are outlawed, together with prostitution, drug trafficking and
other vices;
D. It violates the avowed trend of the Cory government away from
monopolistic and crony economy, and toward free enterprise and
privatization. (p. 2, Amended Petition; p. 7, Rollo)
In their Second Amended Petition, petitioners also claim that PD 1869 is
contrary to the declared national policy of the "new restored democracy"
and the people's will as expressed in the 1987 Constitution. The decree
is said to have a "gambling objective" and therefore is contrary to
Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2)
of Article XIV, of the present Constitution (p. 3, Second Amended
Petition; p. 21, Rollo).
The procedural issue is whether petitioners, as taxpayers and practicing
lawyers (petitioner Basco being also the Chairman of the Committee on
Laws of the City Council of Manila), can question and seek the
annulment of PD 1869 on the alleged grounds mentioned above.
The Philippine Amusements and Gaming Corporation (PAGCOR) was
created by virtue of P.D. 1067-A dated January 1, 1977 and was
granted a franchise under P.D. 1067-B also dated January 1, 1977 "to
establish, operate and maintain gambling casinos on land or water
within the territorial jurisdiction of the Philippines." Its operation was
originally conducted in the well known floating casino "Philippine
Tourist." The operation was considered a success for it proved to be a
potential source of revenue to fund infrastructure and socio-economic
projects, thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to
fully attain this objective.
Subsequently, on July 11, 1983, PAGCOR was created under P.D.
1869 to enable the Government to regulate and centralize all games of
chance authorized by existing franchise or permitted by law, under the
following declared policy —
Sec. 1. Declaration of Policy. — It is hereby declared to be the policy of
the State to centralize and integrate all games of chance not heretofore
authorized by existing franchises or permitted by law in order to attain
the following objectives:
(a) To centralize and integrate the right and authority to operate and
conduct games of chance into one corporate entity to be controlled,
administered and supervised by the Government.
(b) To establish and operate clubs and casinos, for amusement and
recreation, including sports gaming pools, (basketball, football, lotteries,
etc.) and such other forms of amusement and recreation including
games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will: (1) generate sources of
additional revenue to fund infrastructure and socio-civic projects, such
as flood control programs, beautification, sewerage and sewage
projects, Tulungan ng Bayan Centers, Nutritional Programs, Population
Control and such other essential public services; (2) create recreation
and integrated facilities which will expand and improve the country's
existing tourist attractions; and (3) minimize, if not totally eradicate, all
the evils, malpractices and corruptions that are normally prevalent on
the conduct and operation of gambling clubs and casinos without direct
government involvement. (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all
over the Philippines. Under its Charter's repealing clause, all laws,
decrees, executive orders, rules and regulations, inconsistent therewith,
are accordingly repealed, amended or modified.
It is reported that PAGCOR is the third largest source of government
revenue, next to the Bureau of Internal Revenue and the Bureau of
Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and directly
remitted to the National Government a total of P2.5 Billion in form of
franchise tax, government's income share, the President's Social Fund
and Host Cities' share. In addition, PAGCOR sponsored other
socio-cultural and charitable projects on its own or in cooperation with
various governmental agencies, and other private associations and
organizations. In its 3 1/2 years of operation under the present
administration, PAGCOR remitted to the government a total of P6.2
Billion. As of December 31, 1989, PAGCOR was employing 4,494
employees in its nine (9) casinos nationwide, directly supporting the
livelihood of Four Thousand Four Hundred Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They
allege that the same is "null and void" for being "contrary to morals,
public policy and public order," monopolistic and tends toward "crony
economy", and is violative of the equal protection clause and local
autonomy as well as for running counter to the state policies enunciated
in Sections 11 (Personal Dignity and Human Rights), 12 (Family) and 13
(Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough
scrutiny and the most deliberate consideration by the Court, involving as
it does the exercise of what has been described as "the highest and
most delicate function which belongs to the judicial department of the
government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146
SCRA 323).
As We enter upon the task of passing on the validity of an act of a
co-equal and coordinate branch of the government We need not be
reminded of the time-honored principle, deeply ingrained in our
jurisprudence, that a statute is presumed to be valid. Every presumption
must be indulged in favor of its constitutionality. This is not to say that
We approach Our task with diffidence or timidity. Where it is clear that
the legislature or the executive for that matter, has over-stepped the
limits of its authority under the constitution, We should not hesitate to
wield the axe and let it fall heavily, as fall it must, on the offending
statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the
Court thru Mr. Justice Zaldivar underscored the —
. . . thoroughly established principle which must be followed in all cases
where questions of constitutionality as obtain in the instant cases are
involved. All presumptions are indulged in favor of constitutionality; one
who attacks a statute alleging unconstitutionality must prove its invalidity
beyond a reasonable doubt; that a law may work hardship does not
render it unconstitutional; that if any reasonable basis may be conceived
which supports the statute, it will be upheld and the challenger must
negate all possible basis; that the courts are not concerned with the
wisdom, justice, policy or expediency of a statute and that a liberal
interpretation of the constitution in favor of the constitutionality of
legislation should be adopted. (Danner v. Hass, 194 N.W. 2nd534, 539;
Spurbeck v. Statton, 106 N.W. 2nd 660, 663; 59 SCRA 66; see also e.g.
Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v. Commission on
Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes, 125
SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer
Protection v. Energy Regulatory Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are
questioning the legal personality of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar,
and in keeping with the Court's duty, under the 1987 Constitution, to
determine whether or not the other branches of government have kept
themselves within the limits of the Constitution and the laws and that
they have not abused the discretion given to them, the Court has
brushed aside technicalities of procedure and has taken cognizance of
this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng
Pilipinas Inc. v. Tan, 163 SCRA 371)
With particular regard to the requirement of proper party as applied in
the cases before us, We hold that the same is satisfied by the
petitioners and intervenors because each of them has sustained or is in
danger of sustaining an immediate injury as a result of the acts or
measures complained of. And even if, strictly speaking they are not
covered by the definition, it is still within the wide discretion of the Court
to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers
were allowed to question the constitutionality of several executive
orders issued by President Quirino although they were involving only an
indirect and general interest shared in common with the public. The
Court dismissed the objection that they were not proper parties and
ruled that "the transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if
we must technicalities of procedure." We have since then applied the
exception in many other cases. (Association of Small Landowners in the
Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the
substantive issues raised.
Gambling in all its forms, unless allowed by law, is generally prohibited.
But the prohibition of gambling does not mean that the Government
cannot regulate it in the exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has
been defined as the "state authority to enact legislation that may
interfere with personal liberty or property in order to promote the general
welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1)
an imposition or restraint upon liberty or property, (2) in order to foster
the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive
embrace. (Philippine Association of Service Exporters, Inc. v. Drilon,
163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to
anticipate the future where it could be done, provides enough room for
an efficient and flexible response to conditions and circumstances thus
assuming the greatest benefits. (Edu v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does
not owe its origin to the charter. Along with the taxing power and
eminent domain, it is inborn in the very fact of statehood and
sovereignty. It is a fundamental attribute of government that has
enabled it to perform the most vital functions of governance. Marshall, to
whom the expression has been credited, refers to it succinctly as the
plenary power of the state "to govern its citizens". (Tribe, American
Constitutional Law, 323, 1978). The police power of the State is a power
co-extensive with self-protection and is most aptly termed the "law of
overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil.
660, 708) It is "the most essential, insistent, and illimitable of powers."
(Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that
enables the state to meet the agencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to
"regulate and centralize thru an appropriate institution all games of
chance authorized by existing franchise or permitted by law" (1st
whereas clause, PD 1869). As was subsequently proved, regulating and
centralizing gambling operations in one corporate entity — the
PAGCOR, was beneficial not just to the Government but to society in
general. It is a reliable source of much needed revenue for the cash
strapped Government. It provided funds for social impact projects and
subjected gambling to "close scrutiny, regulation, supervision and
control of the Government" (4th Whereas Clause, PD 1869). With the
creation of PAGCOR and the direct intervention of the Government, the
evil practices and corruptions that go with gambling will be minimized if
not totally eradicated. Public welfare, then, lies at the bottom of the
enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of
the City of Manila to impose taxes and legal fees; that the exemption
clause in P.D. 1869 is violative of the principle of local autonomy. They
must be referring to Section 13 par. (2) of P.D. 1869 which exempts
PAGCOR, as the franchise holder from paying any "tax of any kind or
form, income or otherwise, as well as fees, charges or levies of
whatever nature, whether National or Local."
(2) Income and other taxes. — a) Franchise Holder: No tax of any kind
or form, income or otherwise as well as fees, charges or levies of
whatever nature, whether National or Local, shall be assessed and
collected under this franchise from the Corporation; nor shall any form
or tax or charge attach in any way to the earnings of the Corporation,
except a franchise tax of five (5%) percent of the gross revenues or
earnings derived by the Corporation from its operations under this
franchise. Such tax shall be due and payable quarterly to the National
Government and shall be in lieu of all kinds of taxes, levies, fees or
assessments of any kind, nature or description, levied, established or
collected by any municipal, provincial or national government authority
(Section 13 [2]).
Their contention stated hereinabove is without merit for the following
reasons:
(a) The City of Manila, being a mere Municipal corporation has no
inherent right to impose taxes (Icard v. City of Baguio, 83 Phil. 870; City
of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality of Caloocan,
7 SCRA 643). Thus, "the Charter or statute must plainly show an intent
to confer that power or the municipality cannot assume it" (Medina v.
City of Baguio, 12 SCRA 62). Its "power to tax" therefore must always
yield to a legislative act which is superior having been passed upon by
the state itself which has the "inherent power to tax" (Bernas, the
Revised [1973] Philippine Constitution, Vol. 1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It
should be stressed that "municipal corporations are mere creatures of
Congress" (Unson v. Lacson, G.R. No. 7909, January 18, 1957) which
has the power to "create and abolish municipal corporations" due to its
"general legislative powers" (Asuncion v. Yriantes, 28 Phil. 67;
Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has the
power of control over Local governments (Hebron v. Reyes, G.R. No.
9124, July 2, 1950). And if Congress can grant the City of Manila the
power to tax certain matters, it can also provide for exemptions or even
take back the power.
(c) The City of Manila's power to impose license fees on gambling, has
long been revoked. As early as 1975, the power of local governments to
regulate gambling thru the grant of "franchise, licenses or permits" was
withdrawn by P.D. No. 771 and was vested exclusively on the National
Government, thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the
authority of chartered cities and other local governments to issue
license, permit or other form of franchise to operate, maintain and
establish horse and dog race tracks, jai-alai and other forms of gambling
is hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and
establish, horse and dog race tracks, jai-alai and other forms of
gambling shall be issued by the national government upon proper
application and verification of the qualification of the applicant . . .
Therefore, only the National Government has the power to issue
"licenses or permits" for the operation of gambling. Necessarily, the
power to demand or collect license fees which is a consequence of the
issuance of "licenses or permits" is no longer vested in the City of
Manila.
(d) Local governments have no power to tax instrumentalities of the
National Government. PAGCOR is a government owned or controlled
corporation with an original charter, PD 1869. All of its shares of stocks
are owned by the National Government. In addition to its corporate
powers (Sec. 3, Title II, PD 1869) it also exercises regulatory powers
thus:
Sec. 9. Regulatory Power. — The Corporation shall maintain a Registry
of the affiliated entities, and shall exercise all the powers, authority and
the responsibilities vested in the Securities and Exchange Commission
over such affiliating entities mentioned under the preceding section,
including, but not limited to amendments of Articles of Incorporation and
By-Laws, changes in corporate term, structure, capitalization and other
matters concerning the operation of the affiliated entities, the provisions
of the Corporation Code of the Philippines to the contrary
notwithstanding, except only with respect to original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos.
The latter role is governmental, which places it in the category of an
agency or instrumentality of the Government. Being an instrumentality
of the Government, PAGCOR should be and actually is exempt from
local taxes. Otherwise, its operation might be burdened, impeded or
subjected to control by a mere Local government.
The states have no power by taxation or otherwise, to retard, impede,
burden or in any manner control the operation of constitutional laws
enacted by Congress to carry into execution the powers vested in the
federal government. (MC Culloch v. Marland, 4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National
Government over local governments.
Justice Holmes, speaking for the Supreme Court, made reference to the
entire absence of power on the part of the States to touch, in that way
(taxation) at least, the instrumentalities of the United States (Johnson v.
Maryland, 254 US 51) and it can be agreed that no state or political
subdivision can regulate a federal instrumentality in such a way as to
prevent it from consummating its federal responsibilities, or even to
seriously burden it in the accomplishment of them. (Antieau, Modern
Constitutional Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru
extermination of what local authorities may perceive to be undesirable
activities or enterprise using the power to tax as "a tool for regulation"
(U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to
destroy" (Mc Culloch v. Maryland, supra) cannot be allowed to defeat an
instrumentality or creation of the very entity which has the inherent
power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the
Constitution will be violated by P.D. 1869. This is a pointless argument.
Article X of the 1987 Constitution (on Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its
own source of revenue and to levy taxes, fees, and other
charges subject to such guidelines and limitation as the congress may
provide, consistent with the basic policy on local autonomy. Such taxes,
fees and charges shall accrue exclusively to the local government.
(emphasis supplied)
The power of local government to "impose taxes and fees" is always
subject to "limitations" which Congress may provide by law. Since PD
1869 remains an "operative" law until "amended, repealed or revoked"
(Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as
an exception to the exercise of the power of local governments to
impose taxes and fees. It cannot therefore be violative but rather is
consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution
simply means "decentralization" (III Records of the 1987 Constitutional
Commission, pp. 435-436, as cited in Bernas, The Constitution of the
Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does not
make local governments sovereign within the state or an "imperium in
imperio."
Local Government has been described as a political subdivision of a
nation or state which is constituted by law and has substantial control of
local affairs. In a unitary system of government, such as the government
under the Philippine Constitution, local governments can only be
an intra sovereign subdivision of one sovereign nation, it cannot be
an imperium in imperio. Local government in such a system can only
mean a measure of decentralization of the function of government.
(emphasis supplied)
As to what state powers should be "decentralized" and what may be
delegated to local government units remains a matter of policy, which
concerns wisdom. It is therefore a political question. (Citizens Alliance
for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise
dealing with gambling is a State concern and hence, it is the sole
prerogative of the State to retain it or delegate it to local governments.
As gambling is usually an offense against the State, legislative grant or
express charter power is generally necessary to empower the local
corporation to deal with the subject. . . . In the absence of express grant
of power to enact, ordinance provisions on this subject which are
inconsistent with the state laws are void. (Ligan v. Gadsden, Ala App.
107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757 following in re
Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as
cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis supplied)
Petitioners next contend that P.D. 1869 violates the equal protection
clause of the Constitution, because "it legalized PAGCOR — conducted
gambling, while most gambling are outlawed together with prostitution,
drug trafficking and other vices" (p. 82, Rollo).
We, likewise, find no valid ground to sustain this contention. The
petitioners' posture ignores the well-accepted meaning of the clause
"equal protection of the laws." The clause does not preclude
classification of individuals who may be accorded different treatment
under the law as long as the classification is not unreasonable or
arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not have to
operate in equal force on all persons or things to be conformable to
Article III, Section 1 of the Constitution (DECS v. San Diego, G.R. No.
89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from
establishing classes of individuals or objects upon which different rules
shall operate (Laurel v. Misa, 43 O.G. 2847). The Constitution does not
require situations which are different in fact or opinion to be treated in
law as though they were the same (Gomez v. Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is
violative of the equal protection is not clearly explained in the petition.
The mere fact that some gambling activities like cockfighting (P.D 449)
horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries
and races (RA 1169 as amended by B.P. 42) are legalized under certain
conditions, while others are prohibited, does not render the applicable
laws, P.D. 1869 for one, unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be
overthrown because there are other instances to which it might have
been applied. (Gomez v. Palomar, 25 SCRA 827)
The equal protection clause of the 14th Amendment does not mean that
all occupations called by the same name must be treated the same way;
the state may do what it can to prevent which is deemed as evil and stop
short of those cases in which harm to the few concerned is not less than
the harm to the public that would insure if the rule laid down were made
mathematically exact. (Dominican Hotel v. Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of
the Cory Government away from monopolies and crony economy and
toward free enterprise and privatization" suffice it to state that this is not
a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs
counter to the government's policies then it is for the Executive
Department to recommend to Congress its repeal or amendment.
The judiciary does not settle policy issues. The Court can only declare
what the law is and not what the law should be.1âwphi1 Under our
system of government, policy issues are within the domain of the
political branches of government and of the people themselves as the
repository of all state power. (Valmonte v. Belmonte, Jr., 170 SCRA
256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public
interest so requires. No combinations in restraint of trade or unfair
competition shall be allowed. (Art. XII, National Economy and
Patrimony)
It should be noted that, as the provision is worded, monopolies are not
necessarily prohibited by the Constitution. The state must still decide
whether public interest demands that monopolies be regulated or
prohibited. Again, this is a matter of policy for the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11
(Personality Dignity) 12 (Family) and 13 (Role of Youth) of Article II;
Section 13 (Social Justice) of Article XIII and Section 2 (Educational
Values) of Article XIV of the 1987 Constitution, suffice it to state also
that these are merely statements of principles and, policies. As such,
they are basically not self-executing, meaning a law should be passed
by Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be
self-executing principles ready for enforcement through the courts. They
were rather directives addressed to the executive and the legislature. If
the executive and the legislature failed to heed the directives of the
articles the available remedy was not judicial or political. The electorate
could express their displeasure with the failure of the executive and the
legislature through the language of the ballot. (Bernas, Vol. II, p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong
Eng v. Trinidad, 47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v.
Comelec, 82 SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore,
for PD 1869 to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution, not merely a doubtful and
equivocal one. In other words, the grounds for nullity must be clear and
beyond reasonable doubt. (Peralta v. Comelec, supra) Those who
petition this Court to declare a law, or parts thereof, unconstitutional
must clearly establish the basis for such a declaration. Otherwise, their
petition must fail. Based on the grounds raised by petitioners to
challenge the constitutionality of P.D. 1869, the Court finds that
petitioners have failed to overcome the presumption. The dismissal of
this petition is therefore, inevitable. But as to whether P.D. 1869 remains
a wise legislation considering the issues of "morality, monopoly, trend to
free enterprise, privatization as well as the state principles on social
justice, role of youth and educational values" being raised, is up for
Congress to determine.
As this Court held in Citizens' Alliance for Consumer Protection v.
Energy Regulatory Board, 162 SCRA 521 —
Presidential Decree No. 1956, as amended by Executive Order No. 137
has, in any case, in its favor the presumption of validity and
constitutionality which petitioners Valmonte and the KMU have not
overturned. Petitioners have not undertaken to identify the provisions in
the Constitution which they claim to have been violated by that statute.
This Court, however, is not compelled to speculate and to imagine how
the assailed legislation may possibly offend some provision of the
Constitution. The Court notes, further, in this respect that petitioners
have in the main put in question the wisdom, justice and expediency of
the establishment of the OPSF, issues which are not properly
addressed to this Court and which this Court may not constitutionally
pass upon. Those issues should be addressed rather to the political
departments of government: the President and the Congress.
Parenthetically, We wish to state that gambling is generally immoral,
and this is precisely so when the gambling resorted to is excessive. This
excessiveness necessarily depends not only on the financial resources
of the gambler and his family but also on his mental, social, and spiritual
outlook on life. However, the mere fact that some persons may have lost
their material fortunes, mental control, physical health, or even their
lives does not necessarily mean that the same are directly attributable to
gambling. Gambling may have been the antecedent, but certainly not
necessarily the cause. For the same consequences could have been
preceded by an overdose of food, drink, exercise, work, and even sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
[G.R. No. 129093. August 30, 2001]
HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF
LAGUNA, and HON. CALIXTO CATAQUIZ, petitioners, vs.
HON. FRANCISCO DIZON PAO and TONY
CALVENTO, respondents.
DECISION
QUISUMBING, J.:
For our resolution is a petition for review on certiorari seeking the
reversal of the decision[1] dated February 10, 1997 of the Regional Trial
Court of San Pedro, Laguna, Branch 93, enjoining petitioners from
implementing or enforcing Kapasiyahan Bilang 508, Taon 1995, of
the Sangguniang Panlalawigan of Laguna and its subsequent
Order[2] dated April 21, 1997 denying petitioners motion for
reconsideration.
On December 29, 1995, respondent Tony Calvento was appointed
agent by the Philippine Charity Sweepstakes Office (PCSO) to install
Terminal OM 20 for the operation of lotto. He asked Mayor Calixto
Cataquiz, Mayor of San Pedro, Laguna, for a mayors permit to open the
lotto outlet. This was denied by Mayor Cataquiz in a letter dated
February 19, 1996. The ground for said denial was an ordinance passed
by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg.
508, T. 1995 which was issued on September 18, 1995. The ordinance
reads:
ISANG KAPASIYAHAN TINUTUTULAN ANG MGA ILLEGAL
GAMBLING LALO NA ANG LOTTO SA LALAWIGAN NG LAGUNA
SAPAGKAT, ang sugal dito sa lalawigan ng Laguna ay talamak na;
SAPAGKAT, ang sugal ay nagdudulot ng masasamang impluwensiya
lalot higit sa mga kabataan;
KUNG KAYAT DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M.
Unico at Kgg. Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd.
Meliton C. Larano at buong pagkakaisang sinangayunan ng lahat ng
dumalo sa pulong;
IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang
ano mang uri ng sugal dito sa lalawigan ng Laguna lalot higit ang Lotto;
IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa
Panlalawigang pinuno ng Philippine National Police (PNP) Col. [illegible]
na mahigpit na pag-ibayuhin ang pagsugpo sa lahat ng uri ng illegal na
sugal sa buong lalawigan ng Laguna lalo na ang Jueteng.[3]
As a result of this resolution of denial, respondent Calvento filed a
complaint for declaratory relief with prayer for preliminary injunction and
temporary restraining order. In the said complaint, respondent Calvento
asked the Regional Trial Court of San Pedro Laguna, Branch 93, for the
following reliefs: (1) a preliminary injunction or temporary restraining
order, ordering the defendants to refrain from implementing or
enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon.
Municipal Mayor Calixto R. Cataquiz to issue a business permit for the
operation of a lotto outlet; and (3) an order annulling or declaring as
invalid Kapasiyahan Blg. 508, T. 1995.
On February 10, 1997, the respondent judge, Francisco Dizon Pao,
promulgated his decision enjoining the petitioners from implementing or
enforcing resolution or Kapasiyahan Blg. 508, T. 1995. The dispositive
portion of said decision reads:
WHEREFORE, premises considered, defendants, their agents and
representatives are hereby enjoined from implementing or enforcing
resolution or kapasiyahan blg. 508, T. 1995 of the Sangguniang
Panlalawigan ng Laguna prohibiting the operation of the lotto in the
province of Laguna.
SO ORDERED.[4]
Petitioners filed a motion for reconsideration which was
subsequently denied in an Order dated April 21, 1997, which reads:
Acting on the Motion for Reconsideration filed by defendants Jose D.
Lina, Jr. and the Sangguniang Panlalawigan of Laguna, thru counsel,
with the opposition filed by plaintiffs counsel and the comment thereto
filed by counsel for the defendants which were duly noted, the Court
hereby denies the motion for lack of merit.
SO ORDERED.[5]
On May 23, 1997, petitioners filed this petition alleging that the
following errors were committed by the respondent trial court:
I
THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS
FROM IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE
SANGGUNIANG PANLALAWIGAN OF LAGUNA PROHIBITING THE
OPERATION OF THE LOTTO IN THE PROVINCE OF LAGUNA.
II
THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT
POSITED BY THE PETITIONERS THAT BEFORE ANY
GOVERNMENT PROJECT OR PROGRAM MAY BE IMPLEMENTED
BY THE NATIONAL AGENCIES OR OFFICES, PRIOR
CONSULTATION AND APPROVAL BY THE LOCAL GOVERNMENT
UNITS CONCERNED AND OTHER CONCERNED SECTORS IS
REQUIRED.
Petitioners contend that the assailed resolution is a valid policy
declaration of the Provincial Government of Laguna of its vehement
objection to the operation of lotto and all forms of gambling. It is likewise
a valid exercise of the provincial governments police power under the
General Welfare Clause of Republic Act 7160, otherwise known as the
Local Government Code of 1991.[6] They also maintain that respondents
lotto operation is illegal because no prior consultations and approval by
the local government were sought before it was implemented contrary to
the express provisions of Sections 2 (c) and 27 of R.A. 7160.[7]
For his part, respondent Calvento argues that the questioned
resolution is, in effect, a curtailment of the power of the state since in
this case the national legislature itself had already declared lotto as
legal and permitted its operations around the country.[8] As for the
allegation that no prior consultations and approval were sought from
the sangguniang panlalawigan of Laguna, respondent Calvento
contends this is not mandatory since such a requirement is merely
stated as a declaration of policy and not a self-executing provision of the
Local Government Code of 1991.[9] He also states that his operation of
the lotto system is legal because of the authority given to him by the
PCSO, which in turn had been granted a franchise to operate the lotto
by Congress.[10]
The Office of the Solicitor General (OSG), for the State, contends
that the Provincial Government of Laguna has no power to prohibit a
form of gambling which has been authorized by the national
government.[11] He argues that this is based on the principle that
ordinances should not contravene statutes as municipal governments
are merely agents of the national government. The local councils
exercise only delegated legislative powers which have been conferred
on them by Congress. This being the case, these councils, as delegates,
cannot be superior to the principal or exercise powers higher than those
of the latter. The OSG also adds that the question of whether gambling
should be permitted is for Congress to determine, taking into account
national and local interests. Since Congress has allowed the PCSO to
operate lotteries which PCSO seeks to conduct in Laguna, pursuant to
its legislative grant of authority, the provinces Sangguniang
Panlalawigan cannot nullify the exercise of said authority by preventing
something already allowed by Congress.
The issues to be resolved now are the following: (1)
whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang
Panlalawigan of Laguna and the denial of a mayors permit based
thereon are valid; and (2) whether prior consultations and approval by
the concerned Sanggunian are needed before a lotto system can be
operated in a given local government unit.
The entire controversy stemmed from the refusal of Mayor Cataquiz
to issue a mayors permit for the operation of a lotto outlet in favor of
private respondent.According to the mayor, he based his decision on an
existing ordinance prohibiting the operation of lotto in the province of
Laguna. The ordinance, however, merely states the objection of the
council to the said game. It is but a mere policy statement on the part of
the local council, which is not self-executing. Nor could it serve as a
valid ground to prohibit the operation of the lotto system in the province
of Laguna. Even petitioners admit as much when they stated in their
petition that:
5.7. The terms of the Resolution and the validity thereof are express and
clear. The Resolution is a policy declaration of the Provincial
Government of Laguna of its vehement opposition and/or objection to
the operation of and/or all forms of gambling including the Lotto
operation in the Province of Laguna.[12]
As a policy statement expressing the local governments objection
to the lotto, such resolution is valid. This is part of the local governments
autonomy to air its views which may be contrary to that of the national
governments. However, this freedom to exercise contrary views does
not mean that local governments may actually enact ordinances that go
against laws duly enacted by Congress. Given this premise, the
assailed resolution in this case could not and should not be interpreted
as a measure or ordinance prohibiting the operation of lotto.
The game of lotto is a game of chance duly authorized by the
national government through an Act of Congress. Republic Act 1169, as
amended by Batas Pambansa Blg. 42, is the law which grants a
franchise to the PCSO and allows it to operate the lotteries. The
pertinent provision reads:
Section 1. The Philippine Charity Sweepstakes Office.- The Philippine
Charity Sweepstakes Office, hereinafter designated the Office, shall be
the principal government agency for raising and providing for funds for
health programs, medical assistance and services and charities of
national character, and as such shall have the general powers conferred
in section thirteen of Act Numbered One thousand four hundred
fifty-nine, as amended, and shall have the authority:
A. To hold and conduct charity sweepstakes races, lotteries, and other
similar activities, in such frequency and manner, as shall be determined,
and subject to such rules and regulations as shall be promulgated by
the Board of Directors.
This statute remains valid today. While lotto is clearly a game of
chance, the national government deems it wise and proper to permit
it. Hence, the Sangguniang Panlalawigan of Laguna, a local
government unit, cannot issue a resolution or an ordinance that would
seek to prohibit permits. Stated otherwise, what the national legislature
expressly allows by law, such as lotto, a provincial board may not
disallow by ordinance or resolution.
In our system of government, the power of local government units
to legislate and enact ordinances and resolutions is merely a delegated
power coming from Congress. As held in Tatel vs. Virac,[13] ordinances
should not contravene an existing statute enacted by Congress. The
reasons for this is obvious, as elucidated in Magtajas v.
Pryce Properties Corp.[14]
Municipal governments are only agents of the national
government. Local councils exercise only delegated legislative powers
conferred upon them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local
government units can undo the acts of Congress, from which they have
derived their power in the first place, and negate by mere ordinance the
mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and
rights wholly from the legislature. It breathes into them the breath of life,
without which they cannot exist. As it creates, so it may destroy. As it
may destroy, it may abridge and control. Unless there is some
constitutional limitation on the right, the legislature might, by a single act,
and if we can suppose it capable of so great a folly and so great a wrong,
sweep from existence all of the municipal corporations in the state, and
the corporation could not prevent it. We know of no limitation on the
right so far as the corporation themselves are concerned. They are, so
to phrase it, the mere tenants at will of the legislature (citing Clinton vs.
Ceder Rapids, etc. Railroad Co., 24 Iowa 455).
Nothing in the present constitutional provision enhancing local
autonomy dictates a different conclusion.
The basic relationship between the national legislature and the local
government units has not been enfeebled by the new provisions in the
Constitution strengthening the policy of local autonomy. Without
meaning to detract from that policy, we here confirm that Congress
retains control of the local government units although in significantly
reduced degree now than under our previous Constitutions. The power
to create still includes the power to destroy. The power to grant still
includes the power to withhold or recall. True, there are certain notable
innovations in the Constitution, like the direct conferment on the local
government units of the power to tax (citing Art. X, Sec. 5, Constitution),
which cannot now be withdrawn by mere statute. By and large, however,
the national legislature is still the principal of the local government units,
which cannot defy its will or modify or violate it.[15]
Ours is still a unitary form of government, not a federal state. Being
so, any form of autonomy granted to local governments will necessarily
be limited and confined within the extent allowed by the central
authority. Besides, the principle of local autonomy under the 1987
Constitution simply means decentralization. It does not make local
governments sovereign within the state or an imperium in imperio.[16]
 To conclude our resolution of the first issue, respondent mayor of
San Pedro, cannot avail of Kapasiyahan Bilang 508, Taon 1995, of the
Provincial Board of Laguna as justification to prohibit lotto in his
municipality. For said resolution is nothing but an expression of the local
legislative unit concerned. The Boards enactment, like spring water,
could not rise above its source of power, the national legislature.
As for the second issue, we hold that petitioners erred in declaring
that Sections 2 (c) and 27 of Republic Act 7160, otherwise known as the
Local Government Code of 1991, apply mandatorily in the setting up of
lotto outlets around the country. These provisions state:
Section 2. Declaration of Policy. x x x
(c) It is likewise the policy of the State to require all national agencies
and offices to conduct periodic consultations with appropriate local
government units, non-governmental and peoples organizations, and
other concerned sectors of the community before any project or
program is implemented in their respective jurisdictions.
Section 27. Prior Consultations Required. No project or program shall
be implemented by government authorities unless the consultations
mentioned in Section 2 (c) and 26 hereof are complied with, and prior
approval of the sanggunian concerned is obtained; Provided, that
occupants in areas where such projects are to be implemented shall not
be evicted unless appropriate relocation sites have been provided, in
accordance with the provisions of the Constitution.
From a careful reading of said provisions, we find that these apply
only to national programs and/or projects which are to be implemented
in a particular local community. Lotto is neither a program nor a project
of the national government, but of a charitable institution, the
PCSO. Though sanctioned by the national government, it is far fetched
to say that lotto falls within the contemplation of Sections 2 (c) and 27 of
the Local Government Code.
Section 27 of the Code should be read in conjunction with Section
26 thereof.[17] Section 26 reads:
Section 26. Duty of National Government Agencies in the Maintenance
of Ecological Balance. It shall be the duty of every national agency or
government-owned or controlled corporation authorizing or involved in
the planning and implementation of any project or program that may
cause pollution, climatic change, depletion of non-renewable resources,
loss of crop land, range-land, or forest cover, and extinction of animal or
plant species, to consult with the local government units,
nongovernmental organizations, and other sectors concerned and
explain the goals and objectives of the project or program, its impact
upon the people and the community in terms of environmental or
ecological balance, and the measures that will be undertaken to prevent
or minimize the adverse effects thereof.
Thus, the projects and programs mentioned in Section 27 should be
interpreted to mean projects and programs whose effects are among
those enumerated in Section 26 and 27, to wit, those that: (1) may
cause pollution; (2) may bring about climatic change; (3) may cause the
depletion of non-renewable resources; (4) may result in loss of crop land,
range-land, or forest cover; (5) may eradicate certain animal or plant
species from the face of the planet; and (6) other projects or programs
that may call for the eviction of a particular group of people residing in
the locality where these will be implemented. Obviously, none of these
effects will be produced by the introduction of lotto in the province of
Laguna.
Moreover, the argument regarding lack of consultation raised by
petitioners is clearly an afterthought on their part. There is no indication
in the letter of Mayor Cataquiz that this was one of the reasons for his
refusal to issue a permit. That refusal was predicated solely but
erroneously on the provisions of Kapasiyahan Blg. 508, Taon 1995, of
the Sangguniang Panlalawigan of Laguna.
In sum, we find no reversible error in the RTC decision enjoining
Mayor Cataquiz from enforcing or implementing the Kapasiyahan Blg.
508, T. 1995, of the Sangguniang Panlalawigan of Laguna. That
resolution expresses merely a policy statement of the Laguna provincial
board. It possesses no binding legal force nor requires any act of
implementation. It provides no sufficient legal basis for respondent
mayors refusal to issue the permit sought by private respondent in
connection with a legitimate business activity authorized by a law
passed by Congress.
WHEREFORE, the petition is DENIED for lack of merit. The Order
of the Regional Trial Court of San Pedro, Laguna enjoining the
petitioners from implementing or enforcing Resolution or Kapasiyahan
Blg. 508, T. 1995, of the Provincial Board of Laguna is hereby
AFFIRMED. No costs.
SO ORDERED.
G.R. No. 79956 January 29, 1990
CORDILLERA BROAD COALITION, petitioner,
vs.
COMMISSION ON AUDIT, respondent.
G.R. No. 82217 January 29, 1990
LILIA YARANON and BONA BAUTISTA, assisted by their spouses,
BRAULIO D. YARANON and DEMETRIO D. BAUTISTA, JR.,
respectively; JAMES BRETT and SINAI C. HAMADA, petitioners,
vs.
THE COMMISSION ON AUDIT, HON. CATALINO MACARAIG,
Executive Secretary, HON. VICENTE JAYME, Secretary of Finance,
HON. GUILLERMO N. CARAGUE, Secretary of Budget and
Management, and HON. ROSALINA S. CAJUCOM, OIC National
Treasurer, respondents.
CORTES, J.:
In these consolidated petitions, the constitutionality of Executive Order
No. 220, dated July 15, 1987, which created the (Cordillera
Administrative Region, is assailed on the primary ground that it
pre-empts the enactment of an organic act by the Congress and the
creation of' the autonomous region in the Cordilleras conditional on the
approval of the act through a plebiscite.
Relative to the creation of autonomous regions, the constitution, in
Article X, provides:
AUTONOMOUS REGIONS
Sec. 15. There shall be created autonomous regions in Muslim
Mindanao and in the Cordilleras consisting of provinces, cities,
municipalities, and geographical areas sharing common and distinctive
historical and cultural heritage, economic and social structures, and
other relevant characteristics within the framework of this Constitution
and the national sovereignty as well as territorial integrity of the
Republic of the Philippines.
SEC. 16. The President shall exercise general supervision over
autonomous regions to ensure that laws are faithfully executed.
Sec. 17. All powers, functions, and responsibilities not granted
Constitution or by law to the autonomous regions shall be vested in the
National Government.
Sec. 18. The Congress shall enact an organic act for each autonomous
region with the assistance and participation of the regional consultative
commission composed of representatives appointed by the President
from a list of nominees from multi-sectoral bodies. The organic act shall
define the basic structure of government for the region consisting of the
executive department and legislative assembly, both of which shall be
elective and representative of the constituent political units. The organic
acts shall likewise provide for special courts with personal, family and
property law jurisdiction consistent with the provisions of this
Constitution and national laws.
The creation of the autonomous region shall be effective when
approved by majority of the votes cast by the constituent units in a
plebiscite called for the purpose, provided that only provinces, cities,
and geographic areas voting favorably in such plebiscite shall be
included in the autonomous region.
Sec. 19. The first Congress elected under this Constitution shall, within
eighteen months from the time of organization of both Houses, pass the
organic acts for the autonomous regions in Muslim Mindanao and the
Cordilleras.
Sec. 20. Within its territorial jurisdiction and subject to the provisions of
this Constitution and national laws, the organic act of autonomous
regions shall provide for legislative powers over:
(1) Administrative organization;
(2) Creation of sources of revenues;
(3) Ancestral domain and natural resources;
(4) Personal, family and property relations;
(5) Regional urban and rural planning development;
(6) Economic, social and tourism development ;
(7) Educational policies;
(8) Preservation and development of the cultural heritage; and
(9) Such other matters as may be authorized by law for the promotion of
the general welfare of the people of the region.
Sec. 21. The preservation of peace and order within the regions shall be
the responsibility of the local police agencies which shall be organized,
maintained, supervised, and utilized in accordance with applicable laws.
The defense and security of the regions shall be the responsibility of the
National Government.
A study of E.O. No. 220 would be incomplete Without reference to its
historical background.
In April 1986, just after the EDSA Revolution, Fr. Conrado M. Balweg,
S.V.D., broke off on ideological grounds from the Communist Party of
the Philippines (CPP) and its military arm the New People's Army.
(NPA).
After President Aquino was installed into office by People Power, she
advocated a policy of national reconciliation. She called on all
revolutionary forces to a peace dialogue. The CPLA heeded this call of
the President. After the preliminary negotiations, President Aquino and
some members of her Cabinet flew to Mt. Data in the Mountain Province
on September 13, 1986 and signed with Fr. Conrado M. Balweg (As
Commander of the CPLA and Ama Mario Yag-ao (as President of
Cordillera Bodong Administration, the civil government of the CPLA a
ceasefire agreement that signified the cessation of hostilities
(WHEREAS No. 7, E.O. 220).
The parties arrived at an agreement in principle: the Cordillera people
shall not undertake their demands through armed and violent struggle
but by peaceful means, such as political negotiations. The negotiations
shall be a continuing process until the demands of the Cordillera people
shall have been substantially granted.
On March 27, 1987, Ambassador Pelaez [Acting as Chief Negotiator of
the government], in pursuance of the September 13, 1986 agreement,
flew to the Mansion House, Baguio City, and signed with Fr. Balweg (as
Chairman of the Cordillera panel) a joint agreement, paragraphs 2 and 3
of which state:
Par. 2- Work together in drafting an Executive Order to create a
preparatory body that could perform policy-making and administrative
functions and undertake consultations and studies leading to a draft
organic act for the Cordilleras.
Par. 3- Have representatives from the Cordillera panel join the study
group of the R.P. Panel in drafting the Executive Order.
Pursuant to the above joint agreement, E.O. 220 was drafted by a panel
of the Philippine government and of the representatives of the Cordillera
people.
On July 15, 1987, President Corazon C. Aquino signed the joint draft
into law, known now as E.O. 220. [Rejoinder G.R. No. 82217, pp. 2-3].
Executive Order No. 220, issued by the President in the exercise of her
legislative powers under Art. XVIII, sec. 6 of the 1987 Constitution,
created the Cordillera Administrative Region (CAR) , which covers the
provinces of Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain
Province and the City of Baguio [secs. 1 and 2]. It was created to
accelerate economic and social growth in the region and to prepare for
the establishment of the autonomous region in the Cordilleras [sec. 3].
Its main function is to coordinate the planning and implementation of
programs and services in the region, particularly, to coordinate with the
local government units as well as with the executive departments of the
National Government in the supervision of field offices and in identifying,
planning, monitoring, and accepting projects and activities in the region
[sec. 5]. It shall also monitor the implementation of all ongoing national
and local government projects in the region [sec. 20]. The CAR shall
have a Cordillera Regional Assembly as a policy-formulating body and a
Cordillera Executive Board as an implementing arm [secs. 7, 8 and 10].
The CAR and the Assembly and Executive Board shall exist until such
time as the autonomous regional government is established and
organized [sec. 17].
Explaining the rationale for the issuance of E.O. No. 220, its last
"Whereas" clause provides:
WHEREAS, pending the convening of the first Congress and the
enactment of the organic act for a Cordillera autonomous region, there
is an urgent need, in the interest of national security and public order, for
the President to reorganize immediately the existing administrative
structure in the Cordilleras to suit it to the existing political realities
therein and the Government's legitimate concerns in the areas, without
attempting to pre-empt the constitutional duty of the first Congress to
undertake the creation of an autonomous region on a permanent basis.
During the pendency of this case, Republic Act No. 6766 entitled "An
Act Providing for an Organic Act for the Cordillera Autonomous Region,"
was enacted and signed into law. The Act recognizes the CAR and the
offices and agencies created under E.O. No. 220 and its transitory
nature is reinforced in Art. XXI of R.A. No. 6766, to wit:
SEC. 3. The Cordillera Executive Board, the Cordillera Region
Assembly as well as all offices and agencies created under Execute
Order No. 220 shall cease to exist immediately upon the ratification of
this Organic Act.
All funds, properties and assets of the Cordillera Executive Board and
the Cordillera Regional Assembly shall automatically be transferred to
the Cordillera Autonomous Government.
I
It is well-settled in our jurisprudence that respect for the inherent and
stated powers and prerogatives of the law-making body, as well as
faithful adherence to the principle of separation of powers, require that
its enactment be accorded the presumption of constitutionality. Thus, in
any challenge to the constitutionality of a statute, the burden of clearly
and unequivocally proving its unconstitutionality always rests upon the
challenger. Conversely, failure to so prove will necessarily defeat the
challenge.
We shall be guided by these principles in considering these
consolidated petitions.
In these cases, petitioners principally argue that by issuing E.O. No. 220
the President, in the exercise of her legislative powers prior to the
convening of the first Congress under the 1987 Constitution, has
virtually pre-empted Congress from its mandated task of enacting an
organic act and created an autonomous region in the Cordilleras. We
have carefully studied the Constitution and E.O. No. 220 and we have
come to the conclusion that petitioners' assertions are unfounded.
Events subsequent to the issuance of E.O. No. 220 also bear out this
conclusion.
1. A reading of E.O. No. 220 will easily reveal that what it actually
envisions is the consolidation and coordination of the delivery of
services of line departments and agencies of the National Government
in the areas covered by the administrative region as a step preparatory
to the grant of autonomy to the Cordilleras. It does not create the
autonomous region contemplated in the Constitution. It merely provides
for transitory measures in anticipation of the enactment of an organic act
and the creation of an autonomous region. In short, it prepares the
ground for autonomy. This does not necessarily conflict with the
provisions of the Constitution on autonomous regions, as we shall show
later.
The Constitution outlines a complex procedure for the creation of an
autonomous region in the Cordilleras. A regional consultative
commission shall first be created. The President shall then appoint the
members of a regional consultative commission from a list of nominees
from multi-sectoral bodies. The commission shall assist the Congress in
preparing the organic act for the autonomous region. The organic act
shall be passed by the first Congress under the 1987 Constitution within
eighteen months from the time of its organization and enacted into law.
Thereafter there shall be held a plebiscite for the approval of the organic
act [Art. X, sec. 18]. Only then, after its approval in the plebiscite, shall
the autonomous region be created.
Undoubtedly, all of these will take time. The President, in 1987 still
exercising legislative powers, as the first Congress had not yet
convened, saw it fit to provide for some measures to address the urgent
needs of the Cordilleras in the meantime that the organic act had not yet
been passed and the autonomous region created. These measures we
find in E.O. No. 220. The steps taken by the President are obviously
perceived by petitioners, particularly petitioner Yaranon who views E.O.
No. 220 as capitulation to the Cordillera People's Liberation Army
(CPLA) of Balweg, as unsound, but the Court cannot inquire into the
wisdom of the measures taken by the President, We can only inquire
into whether or not the measures violate the Constitution. But as we
have seen earlier, they do not.
2. Moreover, the transitory nature of the CAR does not necessarily
mean that it is, as petitioner Cordillera Broad Coalition asserts, "the
interim autonomous region in the Cordilleras" [Petition, G.R. No. 79956,
p. 25].
The Constitution provides for a basic structure of government in the
autonomous region composed of an elective executive and legislature
and special courts with personal, family and property law jurisdiction [Art.
X, sec. 18]. Using this as a guide, we find that E.O. No. 220 did not
establish an autonomous regional government. It created a region,
covering a specified area, for administrative purposes with the main
objective of coordinating the planning and implementation of programs
and services [secs. 2 and 5]. To determine policy, it created a
representative assembly, to convene yearly only for a five-day regular
session, tasked with, among others, identifying priority projects and
development programs [sec. 9]. To serve as an implementing body, it
created the Cordillera Executive Board composed of the Mayor of
Baguio City, provincial governors and representatives of the Cordillera
Bodong Administration, ethno-linguistic groups and non-governmental
organizations as regular members and all regional directors of the line
departments of the National Government as ex-officio members and
headed by an Executive Director [secs. 10 and 11]. The bodies created
by E.O. No. 220 do not supplant the existing local governmental
structure, nor are they autonomous government agencies. They merely
constitute the mechanism for an "umbrella" that brings together the
existing local governments, the agencies of the National Government,
the ethno-linguistic groups or tribes, and non-governmental
organizations in a concerted effort to spur development in the
Cordilleras.
The creation of the CAR for purposes of administrative coordination is
underscored by the mandate of E.O. No. 220 for the President and
appropriate national departments and agencies to make available
sources of funds for priority development programs and projects
recommended by the CAR [sec. 21] and the power given to the
President to call upon the appropriate executive departments and
agencies of the National Government to assist the CAR [sec. 24].
3. Subsequent to the issuance of E.O. No. 220, the Congress, after it
was convened, enacted Republic Act No. 6658 which created the
Cordillera Regional Consultative Commission. The President then
appointed its members. The commission prepared a draft organic act
which became the basis for the deliberations of the Senate and the
House of Representatives. The result was Republic Act No. 6766, the
organic act for the Cordillera autonomous region, which was signed into
law on October 23, 1989. A plebiscite for the approval of the organic act,
to be conducted shortly, shall complete the process outlined in the
Constitution.
In the meantime, E.O. No. 220 had been in force and effect for more
than two years and we find that, despite E.O. No. 220, the autonomous
region in the Cordilleras is still to be created, showing the lack of basis
of petitioners' assertion. Events have shown that petitioners' fear that
E.O. No. 220 was a "shortcut" for the creation of the autonomous region
in the Cordilleras was totally unfounded.
Clearly, petitioners' principal challenge has failed.
II
A collateral issue raised by petitioners is the nature of the CAR: whether
or not it is a territorial and political subdivision. The Constitution provides
in Article X:
Section 1. The territorial and political subdivisions of the Republic of the
Philippines are the provinces, cities, municipalities, and barangays.
There shall be autonomous regions in Muslim Mindanao and the
Cordilleras as hereinafter provided.
xxx xxx xxx
Sec. 10. No province, city, municipality, or barangay may be created,
divided, merged, abolished, or its boundary substantially altered, except
in accordance with the criteria established in the local government code
and subject to approval by a majority of the votes cast in a plebiscite in
the political units directly affected.
We have seen earlier that the CAR is not the autonomous region in the
Cordilleras contemplated by the Constitution, Thus, we now address
petitioners' assertion that E. 0. No. 220 contravenes the Constitution by
creating a new territorial and political subdivision.
After carefully considering the provisions of E.O. No. 220, we find that it
did not create a new territorial and political subdivision or merge existing
ones into a larger subdivision.
1. Firstly, the CAR is not a public corporation or a territorial and political
subdivision. It does not have a separate juridical personality, unlike
provinces, cities and municipalities. Neither is it vested with the powers
that are normally granted to public corporations, e.g. the power to sue
and be sued, the power to own and dispose of property, the power to
create its own sources of revenue, etc. As stated earlier, the CAR was
created primarily to coordinate the planning and implementation of
programs and services in the covered areas.
The creation of administrative regions for the purpose of expediting the
delivery of services is nothing new.1âwphi1 The Integrated
Reorganization Plan of 1972, which was made as part of the law of the
land by virtue of Presidential Decree No. 1, established eleven (11)
regions, later increased to twelve (12), with definite regional centers and
required departments and agencies of the Executive Branch of the
National Government to set up field offices therein. The functions of the
regional offices to be established pursuant to the Reorganization Plan
are: (1) to implement laws, policies, plans, programs, rules and
regulations of the department or agency in the regional areas; (2) to
provide economical, efficient and effective service to the people in the
area; (3) to coordinate with regional offices of other departments,
bureaus and agencies in the area; (4) to coordinate with local
government units in the area; and (5) to perform such other functions as
may be provided by law. [See Part II, chap. III, art. 1, of the
Reorganization Plan].
We can readily see that the CAR is in the same genre as the
administrative regions created under the Reorganization Plan, albeit
under E.O. No. 220 the operation of the CAR requires the participation
not only of the line departments and agencies of the National
Government but also the local governments, ethno-linguistic groups and
non-governmental organizations in bringing about the desired
objectives and the appropriation of funds solely for that purpose.
2. Then, considering the control and supervision exercised by the
President over the CAR and the offices created under E.O. No. 220, and
considering further the indispensable participation of the line
departments of the National Government, the CAR may be considered
more than anything else as a regional coordinating agency of the
National Government, similar to the regional development councils
which the President may create under the Constitution [Art. X, sec. 14].
These councils are "composed of local government officials, regional
heads of departments and other government offices, and
representatives from non-governmental organizations within the region
for purposes of administrative decentralization to strengthen the
autonomy of the units therein and to accelerate the economic and social
growth and development of the units in the region." [Ibid.] In this wise,
the CAR may be considered as a more sophisticated version of the
regional development council.
III
Finally, petitioners incidentally argue that the creation of the CAR
contravened the constitutional guarantee of the local autonomy for the
provinces (Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain
Province) and city (Baguio City) which compose the CAR.
We find first a need to clear up petitioners' apparent misconception of
the concept of local autonomy.
It must be clarified that the constitutional guarantee of local autonomy in
the Constitution [Art. X, sec. 2] refers to the administrative autonomy of
local government units or, cast in more technical language, the
decentralization of government authority [Villegas v. Subido, G.R. No.
L-31004, January 8, 1971, 37 SCRA 1]. Local autonomy is not unique to
the 1987 Constitution, it being guaranteed also under the 1973
Constitution [Art. II, sec. 10]. And while there was no express guarantee
under the 1935 Constitution, the Congress enacted the Local Autonomy
Act (R.A. No. 2264) and the Decentralization Act (R.A. No. 5185), which
ushered the irreversible march towards further enlargement of local
autonomy in the country [Villegas v. Subido, supra.]
On the other hand, the creation of autonomous regions in Muslim
Mindanao and the Cordilleras, which is peculiar to the 1987 Constitution
contemplates the grant of political autonomy and not just administrative
autonomy these regions. Thus, the provision in the Constitution for an
autonomous regional government with a basic structure consisting of an
executive department and a legislative assembly and special courts with
personal, family and property law jurisdiction in each of the autonomous
regions [Art. X, sec. 18].
As we have said earlier, the CAR is a mere transitory coordinating
agency that would prepare the stage for political autonomy for the
Cordilleras. It fills in the resulting gap in the process of transforming a
group of adjacent territorial and political subdivisions already enjoying
local or administrative autonomy into an autonomous region vested with
political autonomy.
Anent petitioners' objection, we note the obvious failure to show how the
creation of the CAR has actually diminished the local autonomy of the
covered provinces and city. It cannot be over-emphasized that pure
speculation and a resort to probabilities are insufficient to cause the
invalidation of E.O. No. 220.
WHEREFORE, the petitions are DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 195770 July 17, 2012
AQUILINO Q. PIMENTEL, JR., SERGIO TADEO and NELSON
ALCANTARA, Petitioners,
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA and SECRETARY
CORAZON JULIANO-SOLIMAN OF THE DEPARTMENT OF SOCIAL
WELFARE and DEVELOPMENT (DSWD), Respondents.
DECISION
PERLAS-BERNABE, J.:
The Case
For the Court’s consideration in this Petition for Certiorari and
Prohibition is the constitutionality of certain provisions of Republic Act
No. 10147 or the General Appropriations Act (GAA) of 20111 which
provides a P21 Billion budget allocation for the Conditional Cash
Transfer Program (CCTP) headed by the Department of Social Welfare
& Development (DSWD). Petitioners seek to enjoin respondents
Executive Secretary Paquito N. Ochoa and DSWD Secretary Corazon
Juliano-Soliman from implementing the said program on the ground that
it amounts to a "recentralization" of government functions that have
already been devolved from the national government to the local
government units.
The Facts
In 2007, the DSWD embarked on a poverty reduction strategy with the
poorest of the poor as target beneficiaries.2Dubbed "Ahon Pamilyang
Pilipino," it was pre-pilot tested in the municipalities of Sibagat and
Esperanza in Agusan del Sur; the municipalities of Lopez Jaena and
Bonifacio in Misamis Occidental, the Caraga Region; and the cities of
Pasay and Caloocan3 upon the release of the amount of P50 Million
Pesos under a Special Allotment Release Order (SARO) issued by the
Department of Budget and Management.4
On July 16, 2008, the DSWD issued Administrative Order No. 16, series
of 2008 (A.O. No. 16, s. 2008),5 setting the implementing guidelines for
the project renamed "Pantawid Pamilyang Pilipino Program" (4Ps),
upon the following stated objectives, to wit:
1. To improve preventive health care of pregnant women and young
children
2. To increase enrollment/attendance of children at elementary level
3. To reduce incidence of child labor
4. To raise consumption of poor households on nutrient dense foods
5. To encourage parents to invest in their children's (and their own)
future
6. To encourage parent's participation in the growth and development of
young children, as well as involvement in the community.6
This government intervention scheme, also conveniently referred to as
CCTP, "provides cash grant to extreme poor households to allow the
members of the families to meet certain human development goals."7
Eligible households that are selected from priority target areas
consisting of the poorest provinces classified by the National Statistical
Coordination Board (NCSB)8 are granted a health assistance of
P500.00/month, or P6,000.00/year, and an educational assistance of
P300.00/month for 10 months, or a total of P3,000.00/year, for each
child but up to a maximum of three children per family.9 Thus, after an
assessment on the appropriate assistance package, a household
beneficiary could receive from the government an annual subsidy for its
basic needs up to an amount of P15,000.00, under the following
conditionalities:
a) Pregnant women must get pre natal care starting from the 1st
trimester, child birth is attended by skilled/trained professional, get post
natal care thereafter
b) Parents/guardians must attend family planning sessions/mother's
class, Parent Effectiveness Service and others
c) Children 0-5 years of age get regular preventive health check-ups
and vaccines
d) Children 3-5 years old must attend day care program/pre-school
e) Children 6-14 years of age are enrolled in schools and attend at least
85% of the time10
Under A.O. No. 16, s. 2008, the DSWD also institutionalized a
coordinated inter-agency network among the Department of Education
(DepEd), Department of Health (DOH), Department of Interior and Local
Government (DILG), the National Anti-Poverty Commission (NAPC) and
the local government units (LGUs), identifying specific roles and
functions in order to ensure effective and efficient implementation of the
CCTP. As the DSWD takes on the role of lead implementing agency
that must "oversee and coordinate the implementation, monitoring and
evaluation of the program," the concerned LGU as partner agency is
particularly tasked to –
a. Ensure availability of the supply side on health and education in the
target areas.
b. Provide necessary technical assistance for Program implementation
c. Coordinate the implementation/operationalization of sectoral activities
at the City/Municipal level to better execute Program objectives and
functions
d. Coordinate with various concerned government agencies at the local
level, sectoral representatives and NGO to ensure effective Program
implementation
e. Prepare reports on issues and concerns regarding Program
implementation and submit to the Regional Advisory Committee, and
f. Hold monthly committee meetings11
A Memorandum of Agreement (MOA)12 executed by the DSWD with
each participating LGU outlines in detail the obligation of both parties
during the intended five-year implementation of the CCTP.
Congress, for its part, sought to ensure the success of the CCTP by
providing it with funding under the GAA of 2008 in the amount of Two
Hundred Ninety-Eight Million Five Hundred Fifty Thousand Pesos
(P298,550,000.00). This budget allocation increased tremendously to
P5 Billion Pesos in 2009, with the amount doubling to P10 Billion Pesos
in 2010. But the biggest allotment given to the CCTP was in the GAA of
2011 at Twenty One Billion One Hundred Ninety-Four Million One
Hundred Seventeen Thousand Pesos (P21,194,117,000.00).13 1âwphi1
Petitioner Aquilino Pimentel, Jr., a former Senator, joined by Sergio
Tadeo, incumbent President of the Association of Barangay Captains of
Cabanatuan City, Nueva Ecija, and Nelson Alcantara, incumbent
Barangay Captain of Barangay Sta. Monica, Quezon City, challenges
before the Court the disbursement of public funds and the
implementation of the CCTP which are alleged to have encroached into
the local autonomy of the LGUs.
The Issue
THE P21 BILLION CCTP BUDGET ALLOCATION UNDER THE DSWD
IN THE GAA FY 2011 VIOLATES ART. II, SEC. 25 & ART. X, SEC. 3
OF THE 1987 CONSTITUTION IN RELATION TO SEC. 17 OF THE
LOCAL GOVERNMENT CODE OF 1991 BY PROVIDING FOR THE
RECENTRALIZATION OF THE NATIONAL GOVERNMENT IN THE
DELIVERY OF BASIC SERVICES ALREADY DEVOLVED TO THE
LGUS.
Petitioners admit that the wisdom of adopting the CCTP as a poverty
reduction strategy for the Philippines is with the legislature. They take
exception, however, to the manner by which it is being implemented,
that is, primarily through a national agency like DSWD instead of the
LGUs to which the responsibility and functions of delivering social
welfare, agriculture and health care services have been devolved
pursuant to Section 17 of Republic Act No. 7160, also known as the
Local Government Code of 1991, in relation to Section 25, Article II &
Section 3, Article X of the 1987 Constitution.
Petitioners assert that giving the DSWD full control over the
identification of beneficiaries and the manner by which services are to
be delivered or conditionalities are to be complied with, instead of
allocating the P21 Billion CCTP Budget directly to the LGUs that would
have enhanced its delivery of basic services, results in the
"recentralization" of basic government functions, which is contrary to the
precepts of local autonomy and the avowed policy of decentralization.
Our Ruling
The Constitution declares it a policy of the State to ensure the autonomy
of local governments14 and even devotes a full article on the subject of
local governance15 which includes the following pertinent provisions:
Section 3. The Congress shall enact a local government code which
shall provide for a more responsive and accountable local government
structure instituted through a system of decentralization with effective
mechanisms of recall, initiative, and referendum, allocate among the
different local government units their powers, responsibilities, and
resources, and provide for the qualifications, election, appointment and
removal, term, salaries, powers and functions and duties of local
officials, and all other matters relating to the organization and operation
of the local units.
xxx
Section 14. The President shall provide for regional development
councils or other similar bodies composed of local government officials,
regional heads of departments and other government offices, and
representatives from non-governmental organizations within the regions
for purposes of administrative decentralization to strengthen the
autonomy of the units therein and to accelerate the economic and social
growth and development of the units in the region. (Underscoring
supplied)
In order to fully secure to the LGUs the genuine and meaningful
autonomy that would develop them into self-reliant communities and
effective partners in the attainment of national goals,16 Section 17 of the
Local Government Code vested upon the LGUs the duties and functions
pertaining to the delivery of basic services and facilities, as follows:
SECTION 17. Basic Services and Facilities. –
(a) Local government units shall endeavor to be self-reliant and shall
continue exercising the powers and discharging the duties and functions
currently vested upon them. They shall also discharge the functions and
responsibilities of national agencies and offices devolved to them
pursuant to this Code. Local government units shall likewise 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 enumerated
herein.
(b) Such basic services and facilities include, but are not limited to, x x x.
While the aforementioned provision charges the LGUs to take on the
functions and responsibilities that have already been devolved upon
them from the national agencies on the aspect of providing for basic
services and facilities in their respective jurisdictions, paragraph (c) of
the same provision provides a categorical exception of cases involving
nationally-funded projects, facilities, programs and services, thus:
(c) Notwithstanding the provisions of subsection (b) hereof, public works
and infrastructure projects and other facilities, programs and services
funded by the National Government under the annual General
Appropriations Act, other special laws, pertinent executive orders, and
those wholly or partially funded from foreign sources, are not covered
under this Section, except in those cases where the local government
unit concerned is duly designated as the implementing agency for such
projects, facilities, programs and services. (Underscoring supplied)
The essence of this express reservation of power by the national
government is that, unless an LGU is particularly designated as the
implementing agency, it has no power over a program for which funding
has been provided by the national government under the annual general
appropriations act, even if the program involves the delivery of basic
services within the jurisdiction of the LGU.
The Court held in Ganzon v. Court of Appeals17 that while it is through a
system of decentralization that the State shall promote a more
responsive and accountable local government structure, the concept of
local autonomy does not imply the conversion of local government units
into "mini-states."18 We explained that, with local autonomy, the
Constitution did nothing more than "to break up the monopoly of the
national government over the affairs of the local government" and, thus,
did not intend to sever "the relation of partnership and interdependence
between the central administration and local government units."19 In
Pimentel v. Aguirre,20 the Court defined the extent of the local
government's autonomy in terms of its partnership with the national
government in the pursuit of common national goals, referring to such
key concepts as integration and coordination. Thus:
Under the Philippine concept of local autonomy, the national
government has not completely relinquished all its powers over local
governments, including autonomous regions. Only administrative
powers over local affairs are delegated to political subdivisions. The
purpose of the delegation is to make governance more directly
responsive and effective at the local levels. In turn, economic, political
and social development at the smaller political units are expected to
propel social and economic growth and development. But to enable the
country to develop as a whole, the programs and policies effected
locally must be integrated and coordinated towards a common national
goal. Thus, policy-setting for the entire country still lies in the President
and Congress.
Certainly, to yield unreserved power of governance to the local
government unit as to preclude any and all involvement by the national
government in programs implemented in the local level would be to shift
the tide of monopolistic power to the other extreme, which would
amount to a decentralization of power explicated in Limbona v.
Mangelin21 as beyond our constitutional concept of autonomy, thus:
Now, autonomy is either decentralization of administration or
decentralization of power.1âwphi1 There is decentralization of
administration when the central government delegates administrative
powers to political subdivisions in order to broaden the base of
government power and in the process to make local governments ‘more
responsive and accountable’ and ‘ensure their fullest development as
self-reliant communities and make them more effective partners in the
pursuit of national development and social progress.’ At the same time,
it relieves the central government of the burden of managing local affairs
and enables it to concentrate on national concerns. The President
exercises ‘general supervision’ over them, but only to ‘ensure that local
affairs are administered according to law.’ He has no control over their
acts in the sense that he can substitute their judgments with his own.
Decentralization of power, on the other hand, involves an abdication of
political power in the [sic] favor of local governments [sic] units declared
to be autonomous. In that case, the autonomous government is free to
chart its own destiny and shape its future with minimum intervention
from central authorities. According to a constitutional author,
decentralization of power amounts to ‘self-immolation,’ since in that
event, the autonomous government becomes accountable not to the
central authorities but to its constituency.22
Indeed, a complete relinquishment of central government powers on the
matter of providing basic facilities and services cannot be implied as the
Local Government Code itself weighs against it. The national
government is, thus, not precluded from taking a direct hand in the
formulation and implementation of national development programs
especially where it is implemented locally in coordination with the LGUs
concerned.
Every law has in its favor the presumption of constitutionality, and to
justify its nullification, there must be a clear and unequivocal breach of
the Constitution, not a doubtful and argumentative one.23 Petitioners
have failed to discharge the burden of proving the invalidity of the
provisions under the GAA of 2011. The allocation of a P21 billion budget
for an intervention program formulated by the national government itself
but implemented in partnership with the local government units to
achieve the common national goal development and social progress
can by no means be an encroachment upon the autonomy of local
governments.
WHEREFORE, premises considered, the petition is hereby
DISMISSED.
SO ORDERED.
G.R. Nos. 120865-71 December 7, 1995
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH,
PRESIDING JUDGE, BRANCH 70, REGIONAL TRIAL COURT OF
BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and CARLITO
ARROYO; THE MUNICIPALITY OF BINANGONAN and/or MAYOR
ISIDRO B. PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE,
PRESIDING JUDGE, BRANCH 163, REGIONAL TRIAL COURT OF
PASIG; MANILA MARINE LIFE BUSINESS RESOURCES, INC.
represented by, MR. TOBIAS REYNALD M. TIANGCO;
MUNICIPALITY OF TAGUIG, METRO MANILA and/or MAYOR
RICARDO D. PAPA, JR., respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ,
PRESIDING JUDGE, BRANCH 79, REGIONAL TRIAL COURT OF
MORONG, RIZAL; GREENFIELD VENTURES INDUSTRIAL
DEVELOPMENT CORPORATION and R. J. ORION DEVELOPMENT
CORPORATION; MUNICIPALITY OF JALA-JALA and/or MAYOR
WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA,
PRESIDING JUDGE, BRANCH 162, REGIONAL TRIAL COURT OF
PASIG, METRO MANILA; IRMA FISHING & TRADING CORP.; ARTM
FISHING CORP.; BDR CORPORATION, MIRT CORPORATION and
TRIM CORPORATION; MUNICIPALITY OF BINANGONAN and/or
MAYOR ISIDRO B. PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE,
PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF
MORONG, RIZAL; BLUE LAGOON FISHING CORP. and ALCRIS
CHICKEN GROWERS, INC.; MUNICIPALITY OF JALA-JALA and/or
MAYOR WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE,
PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF
MORONG, RIZAL; AGP FISH VENTURES, INC., represented by its
PRESIDENT ALFONSO PUYAT; MUNICIPALITY OF JALA-JALA
and/or MAYOR WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA,
PRESIDING JUDGE, BRANCH 161, REGIONAL TRIAL COURT OF
PASIG, METRO MANILA; SEA MAR TRADING CO. INC.; EASTERN
LAGOON FISHING CORP.; MINAMAR FISHING CORP.;
MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.
HERMOSISIMA, JR., J.:
It is difficult for a man, scavenging on the garbage dump created by
affluence and profligate consumption and extravagance of the rich or
fishing in the murky waters of the Pasig River and the Laguna Lake or
making a clearing in the forest so that he can produce food for his family,
to understand why protecting birds, fish, and trees is more important
than protecting him and keeping his family alive.
How do we strike a balance between environmental protection, on the
one hand, and the individual personal interests of people, on the other?
Towards environmental protection and ecology, navigational safety, and
sustainable development, Republic Act No. 4850 created the "Laguna
Lake Development Authority." This Government Agency is supposed to
carry out and effectuate the aforesaid declared policy, so as to
accelerate the development and balanced growth of the Laguna Lake
area and the surrounding provinces, cities and towns, in the act clearly
named, within the context of the national and regional plans and policies
for social and economic development.
Presidential Decree No. 813 of former President Ferdinand E. Marcos
amended certain sections of Republic Act No. 4850 because of the
concern for the rapid expansion of Metropolitan Manila, the suburbs and
the lakeshore towns of Laguna de Bay, combined with current and
prospective uses of the lake for municipal-industrial water supply,
irrigation, fisheries, and the like. Concern on the part of the Government
and the general public over: — the environment impact of development
on the water quality and ecology of the lake and its related river systems;
the inflow of polluted water from the Pasig River, industrial, domestic
and agricultural wastes from developed areas around the lake; the
increasing urbanization which induced the deterioration of the lake,
since water quality studies have shown that the lake will deteriorate
further if steps are not taken to check the same; and the floods in
Metropolitan Manila area and the lakeshore towns which will influence
the hydraulic system of Laguna de Bay, since any scheme of controlling
the floods will necessarily involve the lake and its river systems, —
likewise gave impetus to the creation of the Authority.
Section 1 of Republic Act No. 4850 was amended to read as follows:
Sec. 1. Declaration of Policy. It is hereby declared to be the national
policy to promote, and accelerate the development and balanced
growth of the Laguna Lake area and the surrounding provinces, cities
and towns hereinafter referred to as the region, within the context of the
national and regional plans and policies for social and economic
development and to carry out the development of the Laguna Lake
region with due regard and adequate provisions for environmental
management and control, preservation of the quality of human life and
ecological systems, and the prevention of undue ecological
disturbances, deterioration and pollution.1
Special powers of the Authority, pertinent to the issues in this case,
include:
Sec. 3. Section 4 of the same Act is hereby further amended by adding
thereto seven new paragraphs to be known as paragraphs (j), (k), (l),
(m), (n), (o), and (p) which shall read as follows:
xxx xxx xxx
(j) The provisions of existing laws to the contrary notwithstanding, to
engage in fish production and other aqua-culture projects in Laguna de
Bay and other bodies of water within its jurisdiction and in pursuance
thereof to conduct studies and make experiments, whenever necessary,
with the collaboration and assistance of the Bureau of Fisheries and
Aquatic Resources, with the end in view of improving present
techniques and practices. Provided, that until modified, altered or
amended by the procedure provided in the following sub-paragraph, the
present laws, rules and permits or authorizations remain in force;
(k) For the purpose of effectively regulating and monitoring activities in
Laguna de Bay, the Authority shall have exclusive jurisdiction to issue
new permit for the use of the lake waters for any projects or activities in
or affecting the said lake including navigation, construction, and
operation of fishpens, fish enclosures, fish corrals and the like, and to
impose necessary safeguards for lake quality control and management
and to collect necessary fees for said activities and projects: Provided,
That the fees collected for fisheries may be shared between the
Authority and other government agencies and political sub-divisions in
such proportion as may be determined by the President of the
Philippines upon recommendation of the Authority's Board: Provided,
further, That the Authority's Board may determine new areas of fishery
development or activities which it may place under the supervision of
the Bureau of Fisheries and Aquatic Resources taking into account the
overall development plans and programs for Laguna de Bay and related
bodies of water: Provided, finally, That the Authority shall subject to the
approval of the President of the Philippines promulgate such rules and
regulations which shall govern fisheries development activities in
Laguna de Bay which shall take into consideration among others the
following: socio-economic amelioration of bonafide resident fishermen
whether individually or collectively in the form of cooperatives, lakeshore
town development, a master plan for fishpen construction and operation,
communal fishing ground for lake shore town residents, and preference
to lake shore town residents in hiring laborer for fishery projects;
(l) To require the cities and municipalities embraced within the region to
pass appropriate zoning ordinances and other regulatory measures
necessary to carry out the objectives of the Authority and enforce the
same with the assistance of the Authority;
(m) The provisions of existing laws to the contrary notwithstanding, to
exercise water rights over public waters within the Laguna de Bay
region whenever necessary to carry out the Authority's projects;
(n) To act in coordination with existing governmental agencies in
establishing water quality standards for industrial, agricultural and
municipal waste discharges into the lake and to cooperate with said
existing agencies of the government of the Philippines in enforcing such
standards, or to separately pursue enforcement and penalty actions as
provided for in Section 4 (d) and Section 39-A of this Act: Provided, That
in case of conflict on the appropriate water quality standard to be
enforced such conflict shall be resolved thru the NEDA Board.2
To more effectively perform the role of the Authority under Republic Act
No. 4850, as though Presidential Decree No. 813 were not thought to be
completely effective, the Chief Executive, feeling that the land and
waters of the Laguna Lake Region are limited natural resources
requiring judicious management to their optimal utilization to insure
renewability and to preserve the ecological balance, the competing
options for the use of such resources and conflicting jurisdictions over
such uses having created undue constraints on the institutional
capabilities of the Authority in the light of the limited powers vested in it
by its charter, Executive Order No. 927 further defined and enlarged the
functions and powers of the Authority and named and enumerated the
towns, cities and provinces encompassed by the term "Laguna de Bay
Region".
Also, pertinent to the issues in this case are the following provisions of
Executive Order No. 927 which include in particular the sharing of fees:
Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water
within the Lake Region: To effectively regulate and monitor activities in
the Laguna de Bay region, the Authority shall have exclusive jurisdiction
to issue permit for the use of all surface water for any projects or
activities in or affecting the said region including navigation, construction,
and operation of fishpens, fish enclosures, fish corrals and the like.
For the purpose of this Executive Order, the term "Laguna de Bay
Region" shall refer to the Provinces of Rizal and Laguna; the Cities of
San Pablo, Pasay, Caloocan, Quezon, Manila and Tagaytay; the towns
of Tanauan, Sto. Tomas and Malvar in Batangas Province; the towns of
Silang and Carmona in Cavite Province; the town of Lucban in Quezon
Province; and the towns of Marikina, Pasig, Taguig, Muntinlupa, and
Pateros in Metro Manila.
Sec 3. Collection of Fees. The Authority is hereby empowered to collect
fees for the use of the lake water and its tributaries for all beneficial
purposes including but not limited to fisheries, recreation, municipal,
industrial, agricultural, navigation, irrigation, and waste disposal
purpose; Provided, that the rates of the fees to be collected, and
the sharing with other government agencies and political subdivisions, if
necessary, shall be subject to the approval of the President of the
Philippines upon recommendation of the Authority's Board, except
fishpen fee, which will be shared in the following manner; 20 percent of
the fee shall go to the lakeshore local governments, 5 percent shall go
to the Project Development Fund which shall be administered by a
Council and the remaining 75 percent shall constitute the share of LLDA.
However, after the implementation within the three-year period of the
Laguna Lake Fishery Zoning and Management Plan, the sharing will be
modified as follows: 35 percent of the fishpen fee goes to the lakeshore
local governments, 5 percent goes to the Project Development Fund
and the remaining 60 percent shall be retained by LLDA; Provided,
however, that the share of LLDA shall form part of its corporate funds
and shall not be remitted to the National Treasury as an exception to the
provisions of Presidential Decree No. 1234. (Emphasis supplied)
It is important to note that Section 29 of Presidential Decree No. 813
defined the term "Laguna Lake" in this manner:
Sec 41. Definition of Terms.
(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in
this Act, the same shall refer to Laguna de Bay which is that area
covered by the lake water when it is at the average annual maximum
lake level of elevation 12.50 meters, as referred to a datum 10.00
meters below mean lower low water (M.L.L.W). Lands located at and
below such elevation are public lands which form part of the bed of said
lake.
Then came Republic Act No. 7160, the Local Government Code of 1991.
The municipalities in the Laguna Lake Region interpreted the provisions
of this law to mean that the newly passed law gave municipal
governments the exclusive jurisdiction to issue fishing privileges within
their municipal waters because R.A. 7160 provides:
Sec. 149. Fishery Rentals, Fees and Charges.
(a) Municipalities shall have the exclusive authority to grant fishery
privileges in the municipal waters and impose rental fees or charges
therefor in accordance with the provisions of this Section.
(b) The Sangguniang Bayan may:
(1) Grant fishing privileges to erect fish corrals, oyster, mussel or other
aquatic beds or bangus fry areas, within a definite zone of the municipal
waters, as determined by it; . . . .
(2) Grant privilege to gather, take or catch bangus fry, prawn fry
or kawag-kawag or fry of other species and fish from the municipal
waters by nets, traps or other fishing gears to marginal fishermen free
from any rental fee, charges or any other imposition whatsoever.
xxx xxx xxx
Sec. 447. Power, Duties, Functions and Compensation. . . . .
xxx xxx xxx
(XI) Subject to the provisions of Book II of this Code, grant exclusive
privileges of constructing fish corrals or fishpens, or the taking or
catching of bangus fry, prawn fry or kawag-kawag or fry of any species
or fish within the municipal waters.
xxx xxx xxx
Municipal governments thereupon assumed the authority to issue
fishing privileges and fishpen permits. Big fishpen operators took
advantage of the occasion to establish fishpens and fishcages to the
consternation of the Authority. Unregulated fishpens and fishcages, as
of July, 1995, occupied almost one-third of the entire lake water surface
area, increasing the occupation drastically from 7,000 hectares in 1990
to almost 21,000 hectares in 1995. The Mayor's permit to construct
fishpens and fishcages were all undertaken in violation of the policies
adopted by the Authority on fishpen zoning and the Laguna Lake
carrying capacity.
To be sure, the implementation by the lakeshore municipalities of
separate independent policies in the operation of fishpens and
fishcages within their claimed territorial municipal waters in the lake and
their indiscriminate grant of fishpen permits have already saturated the
lake area with fishpens, thereby aggravating the current environmental
problems and ecological stress of Laguna Lake.
In view of the foregoing circumstances, the Authority served notice to
the general public that:
In compliance with the instructions of His Excellency PRESIDENT
FIDEL V. RAMOS given on June 23, 1993 at Pila, Laguna pursuant to
Republic Act 4850 as amended by Presidential Decree 813 and
Executive Order 927 series of 1983 and in line with the policies and
programs of the Presidential Task Force on Illegal Fishpens and Illegal
Fishing, the general public is hereby notified that:
1. All fishpens, fishcages and other aqua-culture structures in the
Laguna de Bay Region, which were not registered or to which no
application for registration and/or permit has been filed with Laguna
Lake Development Authority as of March 31, 1993 are hereby declared
outrightly as illegal.
2. All fishpens, fishcages and other aqua-culture structures so declared
as illegal shall be subject to demolition which shall be undertaken by the
Presidential Task Force for Illegal Fishpen and Illegal Fishing.
3. Owners of fishpens, fishcages and other aqua-culture structures
declared as illegal shall, without prejudice to demolition of their
structures be criminally charged in accordance with Section 39-A of
Republic Act 4850 as amended by P.D. 813 for violation of the same
laws. Violations of these laws carries a penalty of imprisonment of not
exceeding 3 years or a fine not exceeding Five Thousand Pesos or both
at the discretion of the court.
All operators of fishpens, fishcages and other aqua-culture structures
declared as illegal in accordance with the foregoing Notice shall have
one (1) month on or before 27 October 1993 to show cause before the
LLDA why their said fishpens, fishcages and other aqua-culture
structures should not be demolished/dismantled.
One month, thereafter, the Authority sent notices to the concerned
owners of the illegally constructed fishpens, fishcages and other
aqua-culture structures advising them to dismantle their respective
structures within 10 days from receipt thereof, otherwise, demolition
shall be effected.
Reacting thereto, the affected fishpen owners filed injunction cases
against the Authority before various regional trial courts, to wit: (a) Civil
Case No. 759-B, for Prohibition, Injunction and Damages, Regional Trial
Court, Branch 70, Binangonan, Rizal, filed by Fleet Development, Inc.
and Carlito Arroyo; (b) Civil Case No. 64049, for Injunction, Regional
Trial Court, Branch 162, Pasig, filed by IRMA Fishing and Trading Corp.,
ARTM Fishing Corp., BDR Corp., MIRT Corp. and TRIM Corp.; (c) Civil
Case No. 566, for Declaratory Relief and Injunction, Regional Trial
Court, Branch 163, Pasig, filed by Manila Marine Life Business
Resources, Inc. and Tobias Reynaldo M. Tianco; (d) Civil Case No.
556-M, for Prohibition, Injunction and Damages, Regional Trial Court,
Branch 78, Morong, Rizal, filed by AGP Fishing Ventures, Inc.; (e) Civil
Case No. 522-M, for Prohibition, Injunction and Damages, Regional
Trial Court, Branch 78, Morong, Rizal, filed by Blue Lagoon and Alcris
Chicken Growers, Inc.; (f) Civil Case No. 554-, for Certiorari and
Prohibition, Regional Trial Court, Branch 79, Morong, Rizal, filed by
Greenfields Ventures Industrial Corp. and R.J. Orion Development
Corp.; and (g) Civil Case No. 64124, for Injunction, Regional Trial Court,
Branch 15, Pasig, filed by SEA-MAR Trading Co., Inc. and Eastern
Lagoon Fishing Corp. and Minamar Fishing Corporation.
The Authority filed motions to dismiss the cases against it on
jurisdictional grounds. The motions to dismiss were invariably denied.
Meanwhile, temporary restraining order/writs of preliminary mandatory
injunction were issued in Civil Cases Nos. 64124, 759 and 566 enjoining
the Authority from demolishing the fishpens and similar structures in
question.
Hence, the herein petition for certiorari, prohibition and injunction, G.R.
Nos. 120865-71, were filed by the Authority with this court. Impleaded
as parties-respondents are concerned regional trial courts and
respective private parties, and the municipalities and/or respective
Mayors of Binangonan, Taguig and Jala-jala, who issued permits for the
construction and operation of fishpens in Laguna de Bay. The Authority
sought the following reliefs, viz.:
(A) Nullification of the temporary restraining order/writs of preliminary
injunction issued in Civil Cases Nos. 64125, 759 and 566;
(B) Permanent prohibition against the regional trial courts from
exercising jurisdiction over cases involving the Authority which is a
co-equal body;
(C) Judicial pronouncement that R.A. 7610 (Local Government Code of
1991) did not repeal, alter or modify the provisions of R.A. 4850, as
amended, empowering the Authority to issue permits for fishpens,
fishcages and other aqua-culture structures in Laguna de Bay and that,
the Authority the government agency vested with exclusive authority to
issue said permits.
By this Court's resolution of May 2, 1994, the Authority's consolidated
petitions were referred to the Court of Appeals.
In a Decision, dated June 29, 1995, the Court of Appeals dismissed the
Authority's consolidated petitions, the Court of Appeals holding that: (A)
LLDA is not among those quasi-judicial agencies of government whose
decision or order are appealable only to the Court of Appeals; (B) the
LLDA charter does vest LLDA with quasi-judicial functions insofar as
fishpens are concerned; (C) the provisions of the LLDA charter insofar
as fishing privileges in Laguna de Bay are concerned had been
repealed by the Local Government Code of 1991; (D) in view of the
aforesaid repeal, the power to grant permits devolved to and is now
vested with their respective local government units concerned.
Not satisfied with the Court of Appeals decision, the Authority has
returned to this Court charging the following errors:
1. THE HONORABLE COURT OF APPEALS PROBABLY
COMMITTED AN ERROR WHEN IT RULED THAT THE LAGUNA
LAKE DEVELOPMENT AUTHORITY IS NOT A QUASI-JUDICIAL
AGENCY.
2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERROR WHEN IT RULED THAT R.A. 4850 AS AMENDED BY P.D.
813 AND E.O. 927 SERIES OF 1983 HAS BEEN REPEALED BY
REPUBLIC ACT 7160. THE SAID RULING IS CONTRARY TO
ESTABLISHED PRINCIPLES AND JURISPRUDENCE OF
STATUTORY CONSTRUCTION.
3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERROR WHEN IT RULED THAT THE POWER TO ISSUE FISHPEN
PERMITS IN LAGUNA DE BAY HAS BEEN DEVOLVED TO
CONCERNED (LAKESHORE) LOCAL GOVERNMENT UNITS.
We take a simplistic view of the controversy. Actually, the main and only
issue posed is: Which agency of the Government — the Laguna Lake
Development Authority or the towns and municipalities comprising the
region — should exercise jurisdiction over the Laguna Lake and its
environs insofar as the issuance of permits for fishery privileges is
concerned?
Section 4 (k) of the charter of the Laguna Lake Development Authority,
Republic Act No. 4850, the provisions of Presidential Decree No. 813,
and Section 2 of Executive Order No. 927, cited above, specifically
provide that the Laguna Lake Development Authority shall have
exclusive jurisdiction to issue permits for the use of all surface water for
any projects or activities in or affecting the said region, including
navigation, construction, and operation of fishpens, fish enclosures, fish
corrals and the like. On the other hand, Republic Act No. 7160, the
Local Government Code of 1991, has granted to the municipalities the
exclusive authority to grant fishery privileges in municipal waters. The
Sangguniang Bayan may grant fishery privileges to erect fish corrals,
oyster, mussels or other aquatic beds or bangus fry area within a
definite zone of the municipal waters.
We hold that the provisions of Republic Act No. 7160 do not necessarily
repeal the aforementioned laws creating the Laguna Lake Development
Authority and granting the latter water rights authority over Laguna de
Bay and the lake region.
The Local Government Code of 1991 does not contain any express
provision which categorically expressly repeal the charter of the
Authority. It has to be conceded that there was no intent on the part of
the legislature to repeal Republic Act No. 4850 and its amendments.
The repeal of laws should be made clear and expressed.
It has to be conceded that the charter of the Laguna Lake Development
Authority constitutes a special law. Republic Act No. 7160, the Local
Government Code of 1991, is a general law. It is basic in statutory
construction that the enactment of a later legislation which is a general
law cannot be construed to have repealed a special law. It is a
well-settled rule in this jurisdiction that "a special statute, provided for a
particular case or class of cases, is not repealed by a subsequent
statute, general in its terms, provisions and application, unless the intent
to repeal or alter is manifest, although the terms of the general law are
broad enough to include the cases embraced in the special law."3
Where there is a conflict between a general law and a special statute,
the special statute should prevail since it evinces the legislative intent
more clearly than the general statute. The special law is to be taken as
an exception to the general law in the absence of special circumstances
forcing a contrary conclusion. This is because implied repeals are not
favored and as much as possible, effect must be given to all enactments
of the legislature. A special law cannot be repealed, amended or altered
by a subsequent general law by mere implication.4
Thus, it has to be concluded that the charter of the Authority should
prevail over the Local Government Code of 1991.
Considering the reasons behind the establishment of the Authority,
which are environmental protection, navigational safety, and sustainable
development, there is every indication that the legislative intent is for the
Authority to proceed with its mission.
We are on all fours with the manifestation of petitioner Laguna Lake
Development Authority that "Laguna de Bay, like any other single body
of water has its own unique natural ecosystem. The 900 km² lake
surface water, the eight (8) major river tributaries and several other
smaller rivers that drain into the lake, the 2,920 km² basin or watershed
transcending the boundaries of Laguna and Rizal provinces, greater
portion of Metro Manila, parts of Cavite, Batangas, and Quezon
provinces, constitute one integrated delicate natural ecosystem that
needs to be protected with uniform set of policies; if we are to be serious
in our aims of attaining sustainable development. This is an exhaustible
natural resource — a very limited one — which requires judicious
management and optimal utilization to ensure renewability and preserve
its ecological integrity and balance."
"Managing the lake resources would mean the implementation of a
national policy geared towards the protection, conservation, balanced
growth and sustainable development of the region with due regard to
the inter-generational use of its resources by the inhabitants in this part
of the earth. The authors of Republic Act 4850 have foreseen this need
when they passed this LLDA law — the special law designed to govern
the management of our Laguna de Bay lake resources."
"Laguna de Bay therefore cannot be subjected to fragmented concepts
of management policies where lakeshore local government units
exercise exclusive dominion over specific portions of the lake water.
The garbage thrown or sewage discharged into the lake, abstraction of
water therefrom or construction of fishpens by enclosing its certain area,
affect not only that specific portion but the entire 900 km² of lake water.
The implementation of a cohesive and integrated lake water resource
management policy, therefore, is necessary to conserve, protect and
sustainably develop Laguna de Bay."5
The power of the local government units to issue fishing privileges was
clearly granted for revenue purposes. This is evident from the fact that
Section 149 of the New Local Government Code empowering local
governments to issue fishing permits is embodied in Chapter 2, Book II,
of Republic Act No. 7160 under the heading, "Specific Provisions On
The Taxing And Other Revenue Raising Power Of Local Government
Units."
On the other hand, the power of the Authority to grant permits for
fishpens, fishcages and other aqua-culture structures is for the purpose
of effectively regulating and monitoring activities in the Laguna de Bay
region (Section 2, Executive Order No. 927) and for lake quality control
and management.6 It does partake of the nature of police power which
is the most pervasive, the least limitable and the most demanding of all
State powers including the power of taxation. Accordingly, the charter of
the Authority which embodies a valid exercise of police power should
prevail over the Local Government Code of 1991 on matters affecting
Laguna de Bay.
There should be no quarrel over permit fees for fishpens, fishcages and
other aqua-culture structures in the Laguna de Bay area. Section 3 of
Executive Order No. 927 provides for the proper sharing of fees
collected.
In respect to the question as to whether the Authority is a quasi-judicial
agency or not, it is our holding that, considering the provisions of
Section 4 of Republic Act No. 4850 and Section 4 of Executive Order No.
927, series of 1983, and the ruling of this Court in Laguna Lake
Development Authority vs. Court of Appeals, 231 SCRA 304, 306, which
we quote:
xxx xxx xxx
As a general rule, the adjudication of pollution cases generally pertains
to the Pollution Adjudication Board (PAB), except in cases where the
special law provides for another forum. It must be recognized in this
regard that the LLDA, as a specialized administrative agency, is
specifically mandated under Republic Act No. 4850 and its amendatory
laws to carry out and make effective the declared national policy of
promoting and accelerating the development and balanced growth of
the Laguna Lake area and the surrounding provinces of Rizal and
Laguna and the cities of San Pablo, Manila, Pasay, Quezon and
Caloocan with due regard and adequate provisions for environmental
management and control, preservation of the quality of human life and
ecological systems, and the prevention of undue ecological
disturbances, deterioration and pollution. Under such a broad grant of
power and authority, the LLDA, by virtue of its special charter, obviously
has the responsibility to protect the inhabitants of the Laguna Lake
region from the deleterious effects of pollutants emanating from the
discharge of wastes from the surrounding areas. In carrying out the
aforementioned declared policy, the LLDA is mandated, among others,
to pass upon and approve or disapprove all plans, programs, and
projects proposed by local government offices/agencies within the
region, public corporations, and private persons or enterprises where
such plans, programs and/or projects are related to those of the LLDA
for the development of the region.
xxx xxx xxx
. . . . While it is a fundamental rule that an administrative agency has
only such powers as are expressly granted to it by law, it is likewise a
settled rule that an administrative agency has also such powers as are
necessarily implied in the exercise of its express powers. In the exercise,
therefore, of its express powers under its charter, as a regulatory and
quasi-judicial body with respect to pollution cases in the Laguna Lake
region, the authority of the LLDA to issue a "cease and desist order" is,
perforce, implied. Otherwise, it may well be reduced to a "toothless"
paper agency.
there is no question that the Authority has express powers as a
regulatory and quasi-judicial body in respect to pollution cases with
authority to issue a "cease and desist order" and on matters affecting
the construction of illegal fishpens, fishcages and other aqua-culture
structures in Laguna de Bay. The Authority's pretense, however, that it
is co-equal to the Regional Trial Courts such that all actions against it
may only be instituted before the Court of Appeals cannot be sustained.
On actions necessitating the resolution of legal questions affecting the
powers of the Authority as provided for in its charter, the Regional Trial
Courts have jurisdiction.
In view of the foregoing, this Court holds that Section 149 of Republic
Act No. 7160, otherwise known as the Local Government Code of 1991,
has not repealed the provisions of the charter of the Laguna Lake
Development Authority, Republic Act No. 4850, as amended. Thus, the
Authority has the exclusive jurisdiction to issue permits for the
enjoyment of fishery privileges in Laguna de Bay to the exclusion of
municipalities situated therein and the authority to exercise such powers
as are by its charter vested on it.
Removal from the Authority of the aforesaid licensing authority will
render nugatory its avowed purpose of protecting and developing the
Laguna Lake Region. Otherwise stated, the abrogation of this power
would render useless its reason for being and will in effect denigrate, if
not abolish, the Laguna Lake Development Authority. This, the Local
Government Code of 1991 had never intended to do.
WHEREFORE, the petitions for prohibition, certiorari and injunction are
hereby granted, insofar as they relate to the authority of the Laguna
Lake Development Authority to grant fishing privileges within the
Laguna Lake Region.
The restraining orders and/or writs of injunction issued by Judge Arturo
Marave, RTC, Branch 78, Morong, Rizal; Judge Herculano Tech, RTC,
Branch 70, Binangonan, Rizal; and Judge Aurelio Trampe, RTC, Branch
163, Pasig, Metro Manila, are hereby declared null and void and
ordered set aside for having been issued with grave abuse of discretion.
The Municipal Mayors of the Laguna Lake Region are hereby prohibited
from issuing permits to construct and operate fishpens, fishcages and
other aqua-culture structures within the Laguna Lake Region, their
previous issuances being declared null and void. Thus, the fishing
permits issued by Mayors Isidro B. Pacis, Municipality of Binangonan;
Ricardo D. Papa, Municipality of Taguig; and Walfredo M. de la Vega,
Municipality of Jala-jala, specifically, are likewise declared null and void
and ordered cancelled.
The fishpens, fishcages and other aqua-culture structures put up by
operators by virtue of permits issued by Municipal Mayors within the
Laguna Lake Region, specifically, permits issued to Fleet Development,
Inc. and Carlito Arroyo; Manila Marine Life Business Resources, Inc.,
represented by, Mr. Tobias Reynald M. Tiangco; Greenfield Ventures
Industrial Development Corporation and R.J. Orion Development
Corporation; IRMA Fishing And Trading Corporation, ARTM Fishing
Corporation, BDR Corporation, Mirt Corporation and Trim Corporation;
Blue Lagoon Fishing Corporation and ALCRIS Chicken Growers, Inc.;
AGP Fish Ventures, Inc., represented by its President Alfonso Puyat;
SEA MAR Trading Co., Inc., Eastern Lagoon Fishing Corporation, and
MINAMAR Fishing Corporation, are hereby declared illegal structures
subject to demolition by the Laguna Lake Development Authority.
SO ORDERED.
[G.R. No. 135962. March 27, 2000]
METROPOLITAN MANILA DEVELOPMENT
AUTHORITY, petitioner, vs. BEL-AIR VILLAGE ASSOCIATION,
INC., respondent.
DECISION
PUNO, J.:
Not infrequently, the government is tempted to take legal shortcuts to
solve urgent problems of the people. But even when government is
armed with the best of intention, we cannot allow it to run roughshod
over the rule of law. Again, we let the hammer fall and fall hard on the
illegal attempt of the MMDA to open for public use a private road in a
private subdivision. While we hold that the general welfare should be
promoted, we stress that it should not be achieved at the expense of the
rule of law. h Y
Petitioner MMDA is a government agency tasked with the delivery of
basic services in Metro Manila. Respondent Bel-Air Village Association,
Inc. (BAVA) is a non-stock, non-profit corporation whose members are
homeowners in Bel-Air Village, a private subdivision in Makati City.
Respondent BAVA is the registered owner of Neptune Street, a road
inside Bel-Air Village.
On December 30, 1995, respondent received from petitioner, through its
Chairman, a notice dated December 22, 1995 requesting respondent to
open Neptune Street to public vehicular traffic starting January 2, 1996.
The notice reads: Court
"SUBJECT: NOTICE of the Opening of Neptune Street to
Traffic
"Dear President Lindo,
"Please be informed that pursuant to the mandate of the
MMDA law or Republic Act No. 7924 which requires the
Authority to rationalize the use of roads and/or
thoroughfares for the safe and convenient movement of
persons, Neptune Street shall be opened to vehicular
traffic effective January 2, 1996.
"In view whereof, the undersigned requests you to
voluntarily open the points of entry and exit on said
street.
"Thank you for your cooperation and whatever
assistance that may be extended by your association to
the MMDA personnel who will be directing traffic in the
area.
"Finally, we are furnishing you with a copy of the
handwritten instruction of the President on the matter.
"Very truly yours,
PROSPERO I. ORETA
Chairman"[1]
On the same day, respondent was apprised that the perimeter wall
separating the subdivision from the adjacent Kalayaan Avenue would
be demolished. Sppedsc
On January 2, 1996, respondent instituted against petitioner before the
Regional Trial Court, Branch 136, Makati City, Civil Case No. 96-001 for
injunction. Respondent prayed for the issuance of a temporary
restraining order and preliminary injunction enjoining the opening of
Neptune Street and prohibiting the demolition of the perimeter wall. The NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT
trial court issued a temporary restraining order the following day. TO ITS REGULATORY AND POLICE POWERS?

On January 23, 1996, after due hearing, the trial court denied issuance II
of a preliminary injunction.[2] Respondent questioned the denial before
the Court of Appeals in CA-G.R. SP No. 39549. The appellate court IS THE PASSAGE OF AN ORDINANCE A CONDITION
conducted an ocular inspection of Neptune Street[3] and on February 13, PRECEDENT BEFORE THE MMDA MAY ORDER THE
1996, it issued a writ of preliminary injunction enjoining the OPENING OF SUBDIVISION ROADS TO PUBLIC
implementation of the MMDAs proposed action.[4] TRAFFIC?

On January 28, 1997, the appellate court rendered a Decision on the III
merits of the case finding that the MMDA has no authority to order the
opening of Neptune Street, a private subdivision road and cause the IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION,
demolition of its perimeter walls. It held that the authority is lodged in the INC. ESTOPPED FROM DENYING OR ASSAILING
City Council of Makati by ordinance. The decision disposed of as THE AUTHORITY OF THE MMDA TO OPEN THE
follows: Jurissc SUBJECT STREET? Jlexj

"WHEREFORE, the Petition is GRANTED; the V

challenged Order dated January 23, 1995, in Civil Case
No. 96-001, is SET ASIDE and the Writ of Preliminary WAS RESPONDENT DEPRIVED OF DUE PROCESS
Injunction issued on February 13, 1996 is hereby made DESPITE THE SEVERAL MEETINGS HELD BETWEEN
permanent. MMDA AND THE AFFECTED BEL-AIR RESIDENTS
AND BAVA OFFICERS?
"For want of sustainable substantiation, the Motion to
Cite Roberto L. del Rosario in contempt is denied.[5] V

"No pronouncement as to costs. HAS RESPONDENT COME TO COURT WITH

"SO ORDERED."[6]
The Motion for Reconsideration of the decision was denied on
September 28, 1998. Hence, this recourse. Jksm
Petitioner MMDA raises the following questions:
"I
HAS THE METROPOLITAN MANILA DEVELOPMENT
AUTHORITY (MMDA) THE MANDATE TO OPEN
UNCLEAN HANDS?"[7]
Neptune Street is owned by respondent BAVA. It is a private road inside
Bel-Air Village, a private residential subdivision in the heart of the
financial and commercial district of Makati City. It runs parallel to
Kalayaan Avenue, a national road open to the general public. Dividing
the two (2) streets is a concrete perimeter wall approximately fifteen (15)
feet high. The western end of Neptune Street intersects Nicanor Garcia,
formerly Reposo Street, a subdivision road open to public vehicular
traffic, while its eastern end intersects Makati Avenue, a national road.
Both ends of Neptune Street are guarded by iron gates. Edp mis
Petitioner MMDA claims that it has the authority to open Neptune Street
to public traffic because it is an agent of the state endowed with police
power in the delivery of basic services in Metro Manila. One of these
basic services is traffic management which involves the regulation of the
use of thoroughfares to insure the safety, convenience and welfare of
the general public. It is alleged that the police power of MMDA was
affirmed by this Court in the consolidated cases of Sangalang v.
Intermediate Appellate Court.[8] From the premise that it has police
power, it is now urged that there is no need for the City of Makati to
enact an ordinance opening Neptune street to the public.[9]
Police power is an inherent attribute of sovereignty. It has been defined
as the power vested by the Constitution in the legislature to make,
ordain, and establish all manner of wholesome and reasonable laws,
statutes and ordinances, either with penalties or without, not repugnant
to the Constitution, as they shall judge to be for the good and welfare of
the commonwealth, and for the subjects of the same.[10] The power is
plenary and its scope is vast and pervasive, reaching and justifying
measures for public health, public safety, public morals, and the general
welfare.[11]
It bears stressing that police power is lodged primarily in the National
Legislature.[12] It cannot be exercised by any group or body of
individuals not possessing legislative power.[13] The National Legislature,
however, may delegate this power to the President and administrative
boards as well as the lawmaking bodies of municipal corporations or
local government units.[14] Once delegated, the agents can exercise only
such legislative powers as are conferred on them by the national
lawmaking body.[15]
A local government is a "political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs."[16] The
Local Government Code of 1991 defines a local government unit as a
"body politic and corporate"[17]-- one endowed with powers as a political
subdivision of the National Government and as a corporate entity
representing the inhabitants of its territory.[18] Local government units
are the provinces, cities, municipalities and barangays.[19] They are also
the territorial and political subdivisions of the state.[20]
Our Congress delegated police power to the local government
units in the Local Government Code of 1991. This delegation is found
in Section 16 of the same Code, known as the general welfare
clause, viz: Chief
"Sec. 16. General Welfare.Every local government unit
shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to
the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units
shall ensure and support, among other things, the
preservation and enrichment of culture, promote health
and safety, enhance the right of the people to a balanced
ecology, encourage and support the development of
appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment
among their residents, maintain peace and order, and
preserve the comfort and convenience of their
inhabitants."[21]
Local government units exercise police power through their
respective legislative bodies. The legislative body of the provincial
government is the sangguniang panlalawigan, that of the city
government is the sangguniang panlungsod, that of the municipal
government is the sangguniang bayan, and that of the barangay is
the sangguniang barangay. The Local Government Code of 1991
empowers the sangguniang panlalawigan, sangguniang
panlungsod and sangguniang bayan to "enact ordinances, approve
resolutions and appropriate funds for the general welfare of the
[province, city or municipality, as the case may be], and its inhabitants
pursuant to Section 16 of the Code and in the proper exercise of the
corporate powers of the [province, city municipality] provided under the
Code x x x."[22] The same Code gives the sangguniang barangay the
power to "enact ordinances as may be necessary to discharge the
responsibilities conferred upon it by law or ordinance and to promote the
general welfare of the inhabitants thereon."[23]
Metropolitan or Metro Manila is a body composed of several local
government units - i.e., twelve (12) cities and five (5) municipalities,
namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay,
Pasig, Quezon, Muntinlupa, Las Pinas, Marikina, Paranaque and
Valenzuela, and the municipalities of Malabon, , Navotas, , Pateros,
San Juan and Taguig. With the passage of Republic Act (R. A.) No.
7924[24] in 1995, Metropolitan Manila was declared as a "special
development and administrative region" and the Administration of
"metro-wide" basic services affecting the region placed under "a
development authority" referred to as the MMDA.[25]
"Metro-wide services" are those "services which have metro-wide
impact and transcend local political boundaries or entail huge
expenditures such that it would not be viable for said services to be
provided by the individual local government units comprising Metro
Manila."[26] There are seven (7) basic metro-wide services and the
scope of these services cover the following: (1) development planning;
(2) transport and traffic management; (3) solid waste disposal and
management; (4) flood control and sewerage management; (5) urban
renewal, zoning and land use planning, and shelter services; (6) health
and sanitation, urban protection and pollution control; and (7) public
safety. The basic service of transport and traffic management includes
the following: Lexjuris
"(b) Transport and traffic management which include
the formulation, coordination, and monitoring of
policies, standards, programs and projects to
rationalize the existing transport operations,
infrastructure requirements, the use of
thoroughfares, and promotion of safe and
convenient movement of persons and goods;
provision for the mass transport system and the
institution of a system to regulate road users;
administration and implementation of all traffic
enforcement operations, traffic engineering services
and traffic education programs, including the
institution of a single ticketing system in
Metropolitan Manila;"[27]
In the delivery of the seven (7) basic services, the MMDA has the
following powers and functions: Esm
"Sec. 5. Functions and powers of the Metro Manila
Development Authority.The MMDA shall:
(a) Formulate, coordinate and regulate the
implementation of medium and long-term plans and
programs for the delivery of metro-wide services, land
use and physical development within Metropolitan Manila,
consistent with national development objectives and
priorities;
(b) Prepare, coordinate and regulate the implementation
of medium-term investment programs for metro-wide
services which shall indicate sources and uses of funds
for priority programs and projects, and which shall
include the packaging of projects and presentation to
funding institutions; Esmsc
(c) Undertake and manage on its own metro-wide
programs and projects for the delivery of specific
services under its jurisdiction, subject to the approval of
the Council. For this purpose, MMDA can create
appropriate project management offices;
(d) Coordinate and monitor the implementation of such
plans, programs and projects in Metro Manila; identify
bottlenecks and adopt solutions to problems of
implementation;
(e) The MMDA shall set the policies concerning
traffic in Metro Manila, and shall coordinate and
regulate the implementation of all programs and
projects concerning traffic management, specifically
pertaining to enforcement, engineering and
education. Upon request, it shall be extended
assistance and cooperation, including but not
 limited to, assignment of personnel, by all other
government agencies and offices concerned;
(f) Install and administer a single ticketing system,
fix, impose and collect fines and penalties for all
kinds of violations of traffic rules and regulations,
whether moving or non-moving in nature, and
confiscate and suspend or revoke drivers licenses in
the enforcement of such traffic laws and regulations,
the provisions of RA 4136 and PD 1605 to the
contrary notwithstanding. For this purpose, the
Authority shall impose all traffic laws and
regulations in Metro Manila, through its traffic
operation center, and may deputize members of the
PNP, traffic enforcers of local government units, duly
licensed security guards, or members of
non-governmental organizations to whom may be
delegated certain authority, subject to such
conditions and requirements as the Authority may
impose; and
(g) Perform other related functions required to achieve
the objectives of the MMDA, including the undertaking of
delivery of basic services to the local government units,
when deemed necessary subject to prior coordination
with and consent of the local government unit
concerned." Jurismis
The implementation of the MMDAs plans, programs and projects is
undertaken by the local government units, national government
agencies, accredited peoples organizations, non-governmental
organizations, and the private sector as well as by the MMDA itself. For
this purpose, the MMDA has the power to enter into contracts,
memoranda of agreement and other cooperative arrangements with
these bodies for the delivery of the required services within Metro
Manila.[28]
The governing board of the MMDA is the Metro Manila Council. The
Council is composed of the mayors of the component 12 cities and 5
municipalities, the president of the Metro Manila Vice-Mayors League
and the president of the Metro Manila Councilors League.[29] The
Council is headed by a Chairman who is appointed by the President and
vested with the rank of cabinet member. As the policy-making body of
the MMDA, the Metro Manila Council approves metro-wide plans,
programs and projects, and issues the necessary rules and regulations
for the implementation of said plans; it approves the annual budget of
the MMDA and promulgates the rules and regulations for the delivery of
basic services, collection of service and regulatory fees, fines and
penalties. These functions are particularly enumerated as follows: LEX
"Sec. 6. Functions of the Metro Manila Council. -
(a) The Council shall be the policy-making body of the
MMDA;
(b) It shall approve metro-wide plans, programs and
projects and issue rules and regulations deemed
necessary by the MMDA to carry out the purposes of this
Act;
(c) It may increase the rate of allowances and per diems
of the members of the Council to be effective during the
term of the succeeding Council. It shall fix the
compensation of the officers and personnel of the MMDA,
and approve the annual budget thereof for submission to
the Department of Budget and Management (DBM);
(d) It shall promulgate rules and regulations and set
policies and standards for metro-wide application
governing the delivery of basic services, prescribe and
collect service and regulatory fees, and impose and
collect fines and penalties." Jj sc
Clearly, the scope of the MMDAs function is limited to the delivery of the
seven (7) basic services. One of these is transport and traffic
management which includes the formulation and monitoring of policies,
standards and projects to rationalize the existing transport operations,
infrastructure requirements, the use of thoroughfares and promotion of
the safe movement of persons and goods. It also covers the mass
transport system and the institution of a system of road regulation, the
administration of all traffic enforcement operations, traffic engineering
services and traffic education programs, including the institution of a
single ticketing system in Metro Manila for traffic violations. Under this
service, the MMDA is expressly authorized "to set the policies
concerning traffic" and "coordinate and regulate the implementation of
all traffic management programs." In addition, the MMDA may "install
and administer a single ticketing system," fix, impose and collect fines
and penalties for all traffic violations. Ca-lrsc
It will be noted that the powers of the MMDA are limited to the following
acts: formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installation of a system and
administration. There is no syllable in R. A. No. 7924 that grants the
MMDA police power, let alone legislative power. Even the Metro
Manila Council has not been delegated any legislative power. Unlike the
legislative bodies of the local government units, there is no provision in
R. A. No. 7924 that empowers the MMDA or its Council to "enact
ordinances, approve resolutions and appropriate funds for the general
welfare" of the inhabitants of Metro Manila. The MMDA is, as termed in
the charter itself, a "development authority."[30] It is an agency created
for the purpose of laying down policies and coordinating with the various
national government agencies, peoples organizations,
non-governmental organizations and the private sector for the efficient
and expeditious delivery of basic services in the vast metropolitan
area. All its functions are administrative in nature and these are
actually summed up in the charter itself, viz:
"Sec. 2. Creation of the Metropolitan Manila
Development Authority. -- x x x.
The MMDA shall perform planning, monitoring and
coordinative functions, and in the process
exercise regulatory and supervisory authority over
the delivery of metro-wide services within Metro Manila,
without diminution of the autonomy of the local
government units concerning purely local matters."[31]
Petitioner cannot seek refuge in the cases of Sangalang v.
Intermediate Appellate Court[32] where we upheld a zoning ordinance
issued by the Metro Manila Commission (MMC), the predecessor of the
MMDA, as an exercise of police power. The first Sangalang decision
was on the merits of the petition,[33] while the second decision denied
reconsideration of the first case and in addition discussed the case
of Yabut v. Court of Appeals.[34]
Sangalang v. IAC involved five (5) consolidated petitions filed by
respondent BAVA and three residents of Bel-Air Village against other
residents of the Village and the Ayala Corporation, formerly the Makati
Development Corporation, as the developer of the subdivision. The
petitioners sought to enforce certain restrictive easements in the deeds
of sale over their respective lots in the subdivision. These were the
prohibition on the setting up of commercial and advertising signs on the
lots, and the condition that the lots be used only for residential purposes.
Petitioners alleged that respondents, who were residents along Jupiter
Street of the subdivision, converted their residences into commercial
establishments in violation of the "deed restrictions," and that
respondent Ayala Corporation ushered in the full commercialization" of
Jupiter Street by tearing down the perimeter wall that separated the
commercial from the residential section of the village.[35]
The petitions were dismissed based on Ordinance No. 81 of the
Municipal Council of Makati and Ordinance No. 81-01 of the Metro
Manila Commission (MMC). Municipal Ordinance No. 81 classified
Bel-Air Village as a Class A Residential Zone, with its boundary in the
south extending to the center line of Jupiter Street. The Municipal
Ordinance was adopted by the MMC under the Comprehensive Zoning
Ordinance for the National Capital Region and promulgated as MMC
Ordinance No. 81-01. Bel-Air Village was indicated therein as bounded
by Jupiter Street and the block adjacent thereto was classified as a High
Intensity Commercial Zone.[36]
We ruled that since both Ordinances recognized Jupiter Street as the
boundary between Bel-Air Village and the commercial district, Jupiter
Street was not for the exclusive benefit of Bel-Air residents. We also
held that the perimeter wall on said street was constructed not to
separate the residential from the commercial blocks but simply for
security reasons, hence, in tearing down said wall, Ayala Corporation
did not violate the "deed restrictions" in the deeds of sale. Scc-alr
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a
legitimate exercise of police power.[37] The power of the MMC and the
Makati Municipal Council to enact zoning ordinances for the general
welfare prevailed over the "deed restrictions".
In the second Sangalang/Yabut decision, we held that the opening of
Jupiter Street was warranted by the demands of the common good in
terms of "traffic decongestion and public convenience." Jupiter was
opened by the Municipal Mayor to alleviate traffic congestion along the
public streets adjacent to the Village.[38] The same reason was given for
the opening to public vehicular traffic of Orbit Street, a road inside the
same village. The destruction of the gate in Orbit Street was also made
under the police power of the municipal government. The gate, like the
perimeter wall along Jupiter, was a public nuisance because it hindered
and impaired the use of property, hence, its summary abatement by the
mayor was proper and legal.[39]
Contrary to petitioners claim, the two Sangalang cases do not
apply to the case at bar. Firstly, both involved zoning ordinances
passed by the municipal council of Makati and the MMC. In the instant
case, the basis for the proposed opening of Neptune Street is contained
in the notice of December 22, 1995 sent by petitioner to respondent
BAVA, through its president. The notice does not cite any ordinance or
law, either by the Sangguniang Panlungsod of Makati City or by the
MMDA, as the legal basis for the proposed opening of Neptune Street.
Petitioner MMDA simply relied on its authority under its charter "to
rationalize the use of roads and/or thoroughfares for the safe and
convenient movement of persons." Rationalizing the use of roads and
thoroughfares is one of the acts that fall within the scope of transport
and traffic management. By no stretch of the imagination, however, can
this be interpreted as an express or implied grant of ordinance-making
power, much less police power. Misjuris
Secondly, the MMDA is not the same entity as the MMC
in Sangalang. Although the MMC is the forerunner of the present
MMDA, an examination of Presidential Decree (P. D.) No. 824, the
charter of the MMC, shows that the latter possessed greater
powers which were not bestowed on the present MMDA. Jjlex
Metropolitan Manila was first created in 1975 by Presidential Decree
(P.D.) No. 824. It comprised the Greater Manila Area composed of the
contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan, and
the thirteen (13) municipalities of Makati, Mandaluyong, San Juan, Las
Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque, Marikina,
Muntinlupa and Taguig in the province of Rizal, and Valenzuela in the
province of Bulacan.[40]Metropolitan Manila was created as a response
to the finding that the rapid growth of population and the increase of
social and economic requirements in these areas demand a call for
simultaneous and unified development; that the public services
rendered by the respective local governments could be administered
more efficiently and economically if integrated under a system of central
planning; and this coordination, "especially in the maintenance of peace
and order and the eradication of social and economic ills that fanned the
flames of rebellion and discontent [were] part of reform measures under
Martial Law essential to the safety and security of the State."[41]
Metropolitan Manila was established as a "public corporation" with
the following powers: Calrs-pped
"Section 1. Creation of the Metropolitan Manila.There is
hereby created a public corporation, to be known as
the Metropolitan Manila, vested with powers and
attributes of a corporation including the power to
make contracts, sue and be sued, acquire, purchase,
expropriate, hold, transfer and dispose of property
and such other powers as are necessary to carry out
its purposes. The Corporation shall be administered by
a Commission created under this Decree."[42]
The administration of Metropolitan Manila was placed under the Metro
Manila Commission (MMC) vested with the following powers:
"Sec. 4. Powers and Functions of the Commission. - The
Commission shall have the following powers and
functions:
1. To act as a central government to establish and
administer programs and provide services common
to the area;
2. To levy and collect taxes and special assessments,
borrow and expend money and issue bonds, revenue
certificates, and other obligations of indebtedness.
Existing tax measures should, however, continue to be
operative until otherwise modified or repealed by the
Commission;
3. To charge and collect fees for the use of public service
facilities;
4. To appropriate money for the operation of the
metropolitan government and review appropriations for
the city and municipal units within its jurisdiction with
authority to disapprove the same if found to be not in
accordance with the established policies of the
Commission, without prejudice to any contractual
obligation of the local government units involved existing
at the time of approval of this Decree;
5. To review, amend, revise or repeal all ordinances,
resolutions and acts of cities and municipalities
within Metropolitan Manila;
6. To enact or approve ordinances, resolutions and
to fix penalties for any violation thereof which shall
not exceed a fine of P10,000.00 or imprisonment of
six years or both such fine and imprisonment for a
single offense;
7. To perform general administrative, executive and
policy-making functions;
8. To establish a fire control operation center, which shall
direct the fire services of the city and municipal
governments in the metropolitan area;
9. To establish a garbage disposal operation center,
which shall direct garbage collection and disposal in the
metropolitan area;
10. To establish and operate a transport and traffic
center, which shall direct traffic activities; Jjjuris
11. To coordinate and monitor governmental and private
activities pertaining to essential services such as
transportation, flood control and drainage, water supply
and sewerage, social, health and environmental services,
housing, park development, and others;
12. To insure and monitor the undertaking of a
comprehensive social, economic and physical planning
and development of the area;
13. To study the feasibility of increasing barangay
participation in the affairs of their respective local
governments and to propose to the President of the
Philippines definite programs and policies for
implementation;
14. To submit within thirty (30) days after the close of
each fiscal year an annual report to the President of the
Philippines and to submit a periodic report whenever
deemed necessary; and
15. To perform such other tasks as may be assigned or
directed by the President of the Philippines." Sc jj
The MMC was the "central government" of Metro Manila for the
purpose of establishing and administering programs providing services
common to the area. As a "central government" it had the power to levy
and collect taxes and special assessments, the power to charge and
collect fees; the power to appropriate money for its operation, and at the
same time, review appropriations for the city and municipal units within
its jurisdiction. It was bestowed the power to enact or approve
ordinances, resolutions and fix penalties for violation of such ordinances
and resolutions. It also had the power to review, amend, revise or repeal
all ordinances, resolutions and acts of any of the four (4) cities and
thirteen (13) municipalities comprising Metro Manila.
P. D. No. 824 further provided:
"Sec. 9. Until otherwise provided, the governments of the
four cities and thirteen municipalities in the Metropolitan
Manila shall continue to exist in their present form except
as may be inconsistent with this Decree. The members
of the existing city and municipal councils in
Metropolitan Manila shall, upon promulgation of this
Decree, and until December 31, 1975, become
members of the Sangguniang Bayan which is hereby
created for every city and municipality of
Metropolitan Manila.
In addition, the Sangguniang Bayan shall be composed
of as many barangay captains as may be determined
and chosen by the Commission, and such number of
representatives from other sectors of the society as may
be appointed by the President upon recommendation of
the Commission.
x x x.
The Sangguniang Bayan may recommend to the
Commission ordinances, resolutions or such
measures as it may adopt; Provided, that no such
ordinance, resolution or measure shall become
effective, until after its approval by the Commission;
and Provided further, that the power to impose taxes
and other levies, the power to appropriate money
and the power to pass ordinances or resolutions
with penal sanctions shall be vested exclusively in
the Commission."
The creation of the MMC also carried with it the creation of the
Sangguniang Bayan. This was composed of the members of the
component city and municipal councils, barangay captains chosen by
the MMC and sectoral representatives appointed by the President.
The Sangguniang Bayanhad the power to recommend to the MMC the
adoption of ordinances, resolutions or measures. It was the MMC itself,
however, that possessed legislative powers. All ordinances,
resolutions and measures recommended by the Sangguniang
Bayan were subject to the MMCs approval. Moreover, the power to
impose taxes and other levies, the power to appropriate money, and the
power to pass ordinances or resolutions with penal sanctions were
vested exclusively in the MMC. Sce-dp
Thus, Metropolitan Manila had a "central government," i.e., the
MMC which fully possessed legislative and police powers.
Whatever legislative powers the component cities and
municipalities had were all subject to review and approval by the
MMC.
After President Corazon Aquino assumed power, there was a
clamor to restore the autonomy of the local government units in Metro
Manila. Hence, Sections 1 and 2 of Article X of the 1987 Constitution
provided: Sj cj
"Section 1. The territorial and political subdivisions of the
Republic of the Philippines are the provinces, cities,
municipalities and barangays. There shall be
autonomous regions in Muslim Mindanao and the
Cordilleras as herein provided.
Section 2. The territorial and political subdivisions shall
enjoy local autonomy."
The Constitution, however, recognized the necessity of creating
metropolitan regions not only in the existing National Capital Region but
also in potential equivalents in the Visayas and Mindanao.[43] Section 11
of the same Article X thus provided:
"Section 11. The Congress may, by law, create special
metropolitan political subdivisions, subject to a plebiscite
as set forth in Section 10 hereof. The component cities
 and municipalities shall retain their basic autonomy and
shall be entitled to their own local executives and
legislative assemblies. The jurisdiction of the
metropolitan authority that will thereby be created shall
be limited to basic services requiring coordination."
The Constitution itself expressly provides that Congress may, by law,
create "special metropolitan political subdivisions" which shall be
subject to approval by a majority of the votes cast in a plebiscite in the
political units directly affected; the jurisdiction of this subdivision shall be
limited to basic services requiring coordination; and the cities and
municipalities comprising this subdivision shall retain their basic
autonomy and their own local executive and legislative
assemblies.[44] Pending enactment of this law, the Transitory Provisions
of the Constitution gave the President of the Philippines the power to
constitute the Metropolitan Authority, viz:
"Section 8. Until otherwise provided by Congress, the
President may constitute the Metropolitan Authority to be
composed of the heads of all local government units
comprising the Metropolitan Manila area."[45]
In 1990, President Aquino issued Executive Order (E. O.) No. 392
and constituted the Metropolitan Manila Authority (MMA). The
powers and functions of the MMC were devolved to the MMA.[46] It
ought to be stressed, however, that not all powers and functions of
the MMC were passed to the MMA. The MMAs power was limited to
the "delivery of basic urban services requiring coordination in
Metropolitan Manila."[47]The MMAs governing body, the
Metropolitan Manila Council, although composed of the mayors of
the component cities and municipalities, was merely given the
power of: (1) formulation of policies on the delivery of basic
services requiring coordination and consolidation; and (2)
promulgation of resolutions and other issuances, approval of a
code of basic services and the exercise of its rule-making power.[48]
Under the 1987 Constitution, the local government units became
primarily responsible for the governance of their respective political
subdivisions. The MMAs jurisdiction was limited to addressing
common problems involving basic services that transcended local
boundaries. It did not have legislative power. Its power was merely to
provide the local government units technical assistance in the
preparation of local development plans. Any semblance of legislative
power it had was confined to a "review [of] legislation proposed by the
local legislative assemblies to ensure consistency among local
governments and with the comprehensive development plan of Metro
Manila," and to "advise the local governments accordingly."[49]
When R.A. No. 7924 took effect, Metropolitan Manila became a
"special development and administrative region" and the MMDA a
"special development authority" whose functions were "without
prejudice to the autonomy of the affected local government units."
The character of the MMDA was clearly defined in the legislative
debates enacting its charter.
R. A. No. 7924 originated as House Bill No. 14170/ 11116 and was
introduced by several legislators led by Dante Tinga, Roilo Golez and
Feliciano Belmonte. It was presented to the House of Representatives
by the Committee on Local Governments chaired by Congressman
Ciriaco R. Alfelor. The bill was a product of Committee consultations
with the local government units in the National Capital Region (NCR),
with former Chairmen of the MMC and MMA,[50] and career officials of
said agencies. When the bill was first taken up by the Committee on
Local Governments, the following debate took place:
"THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me
explain. This has been debated a long time ago, you
know. Its a special we can create a special metropolitan
political subdivision. Supreme
Actually, there are only six (6) political subdivisions
provided for in the Constitution: barangay, municipality,
city, province, and we have the Autonomous Region of
Mindanao and we have the Cordillera. So we have 6.
Now.
 HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In
the case of the Autonomous Region, that is also
specifically mandated by the Constitution.
THE CHAIRMAN: Thats correct. But it is considered to
be a political subdivision. What is the meaning of a
political subdivision? Meaning to say, that it has its
own government, it has its own political personality,
it has the power to tax, and all governmental powers:
police power and everything. All right. Authority is
different; because it does not have its own
government. It is only a council, it is an organization
of political subdivision, powers, no, which is not
imbued with any political power. Esmmis
If you go over Section 6, where the powers and
functions of the Metro Manila Development Authority,
it is purely coordinative. And it provides here that the
council is policy-making. All right.
Under the Constitution is a Metropolitan Authority with
coordinative power. Meaning to say, it coordinates all of
the different basic services which have to be delivered to
the constituency. All right.
There is now a problem. Each local government unit is given its
respective as a political subdivision. Kalookan has its powers, as
provided for and protected and guaranteed by the Constitution. All right,
the exercise. However, in the exercise of that power, it might be
deleterious and disadvantageous to other local government units. So,
we are forming an authority where all of these will be members and then
set up a policy in order that the basic services can be effectively
coordinated. All right. justice
Of course, we cannot deny that the MMDA has to
survive. We have to provide some funds, resources.
But it does not possess any political power. We do
not elect the Governor. We do not have the power to
tax. As a matter of fact, I was trying to intimate to the
author that it must have the power to sue and be sued
because it coordinates. All right. It coordinates practically
all these basic services so that the flow and the
distribution of the basic services will be continuous. Like
traffic, we cannot deny that. Its before our eyes.
Sewerage, flood control, water system, peace and order,
we cannot deny these. Its right on our face. We have to
look for a solution. What would be the right solution? All
right, we envision that there should be a coordinating
agency and it is called an authority. All right, if you do not
want to call it an authority, its alright. We may call it a
council or maybe a management agency.
x x x."[51]
Clearly, the MMDA is not a political unit of government. The power
delegated to the MMDA is that given to the Metro Manila Council to
promulgate administrative rules and regulations in the implementation of
the MMDAs functions. There is no grant of authority to enact
ordinances and regulations for the general welfare of the
inhabitants of the metropolis. This was explicitly stated in the last
Committee deliberations prior to the bills presentation to Congress.
Thus: Ed-p
"THE CHAIRMAN: Yeah, but we have to go over the
suggested revision. I think this was already approved
before, but it was reconsidered in view of the proposals,
set-up, to make the MMDA stronger. Okay, so if there is
no objection to paragraph "f" And then next is paragraph
"b," under Section 6. "It shall approve metro-wide
plans, programs and projects and issue ordinances
or resolutions deemed necessary by the MMDA to
carry out the purposes of this Act." Do you have the
powers? Does the MMDA because that takes the
form of a local government unit, a political
subdivision.
HON. [Feliciano] BELMONTE: Yes, I believe so, your
Honor. When we say that it has the policies, its very clear
that those policies must be followed. Otherwise, whats
the use of empowering it to come out with policies. Now,
the policies may be in the form of a resolution or it may
be in the form of a ordinance. The term "ordinance" in
this case really gives it more teeth, your honor.
Otherwise, we are going to see a situation where you
have the power to adopt the policy but you cannot really
make it stick as in the case now, and I think here is
Chairman Bunye. I think he will agree that that is the
case now. Youve got the power to set a policy, the body
wants to follow your policy, then we say lets call it an
ordinance and see if they will not follow it.
THE CHAIRMAN: Thats very nice. I like that. However,
there is a constitutional impediment. You are making
this MMDA a political subdivision. The creation of
the MMDA would be subject to a plebiscite. That is
what Im trying to avoid. Ive been trying to avoid this
kind of predicament. Under the Constitution it states:
if it is a political subdivision, once it is created it has
to be subject to a plebiscite. Im trying to make this as
administrative. Thats why we place the Chairman as
a cabinet rank.
HON. BELMONTE: All right, Mr. Chairman, okay, what
you are saying there is .
THE CHAIRMAN: In setting up ordinances, it is a
political exercise. Believe me.
HON. [Elias] LOPEZ: Mr. Chairman, it can be
changed into issuances of rules and regulations.
That would be it shall also be enforced. Jksm
HON. BELMONTE: Okay, I will .
HON. LOPEZ: And you can also say that violation of
such rule, you impose a sanction. But you know,
ordinance has a different legal connotation.
HON. BELMONTE: All right. I defer to that opinion,
your Honor. sc
THE CHAIRMAN: So instead of ordinances, say rules
and regulations.
HON. BELMONTE: Or resolutions. Actually, they are
actually considering resolutions now.
THE CHAIRMAN: Rules and resolutions.
HON. BELMONTE: Rules, regulations and
resolutions."[52]
The draft of H. B. No. 14170/ 11116 was presented by the Committee to
the House of Representatives. The explanatory note to the bill stated
that the proposed MMDA is a "development authority" which is a
"national agency, not a political government unit."[53] The explanatory
note was adopted as the sponsorship speech of the Committee on
Local Governments. No interpellations or debates were made on the
floor and no amendments introduced. The bill was approved on second
reading on the same day it was presented.[54]
When the bill was forwarded to the Senate, several amendments were
made. These amendments, however, did not affect the nature of the
MMDA as originally conceived in the House of Representatives.[55]
It is thus beyond doubt that the MMDA is not a local government
unit or a public corporation endowed with legislative power. It is
not even a "special metropolitan political subdivision" as contemplated
in Section 11, Article X of the Constitution. The creation of a "special
metropolitan political subdivision" requires the approval by a majority of
the votes cast in a plebiscite in the political units directly affected.[56] R.
A. No. 7924 was not submitted to the inhabitants of Metro Manila in a
plebiscite. The Chairman of the MMDA is not an official elected by the
people, but appointed by the President with the rank and privileges of a
cabinet member. In fact, part of his function is to perform such other
duties as may be assigned to him by the President,[57] whereas in local
government units, the President merely exercises supervisory authority.
This emphasizes the administrative character of the MMDA. Newmiso

Clearly then, the MMC under P. D. No. 824 is not the same entity as
the MMDA under R. A. No. 7924. Unlike the MMC, the MMDA has no
power to enact ordinances for the welfare of the community. It is
the local government units, acting through their respective legislative
councils, that possess legislative power and police power. In the case at
bar, the Sangguniang Panlungsod of Makati City did not pass any
ordinance or resolution ordering the opening of Neptune Street, hence,
its proposed opening by petitioner MMDA is illegal and the respondent
Court of Appeals did not err in so ruling. We desist from ruling on the
other issues as they are unnecessary. Esmso

We stress that this decision does not make light of the MMDAs noble
efforts to solve the chaotic traffic condition in Metro Manila. Everyday,
traffic jams and traffic bottlenecks plague the metropolis. Even our once
sprawling boulevards and avenues are now crammed with cars while
city streets are clogged with motorists and pedestrians. Traffic has
become a social malaise affecting our peoples productivity and the
efficient delivery of goods and services in the country. The MMDA was
created to put some order in the metropolitan transportation system but
unfortunately the powers granted by its charter are limited. Its good
intentions cannot justify the opening for public use of a private street in a
private subdivision without any legal warrant. The promotion of the
general welfare is not antithetical to the preservation of the rule of
law. Sdjad

IN VIEW WHEREOF, the petition is denied. The Decision and

Resolution of the Court of Appeals in CA-G.R. SP No. 39549 are
affirmed. Sppedsc

SO ORDERED.