A.

Corporation
This is a petition to declare Senator Richard J. Gordon
1. Liban v. Gordon (respondent) as having forfeited his seat in the Senate.

EN BANC The Facts

DANTE V. LIBAN,
REYNALDO M. BERNARDO, and SALVADOR M. VIARI,
Petitioners, Petitioners Dante V. Liban, Reynaldo M. Bernardo, and Salvador
M. Viari (petitioners) filed with this Court a Petition to Declare
- versus - Richard J. Gordon as Having Forfeited His Seat in the Senate.
Petitioners are officers of the Board of Directors of the Quezon
RICHARD J. GORDON, City Red Cross Chapter while respondent is Chairman of the
Respondent. Philippine National Red Cross (PNRC) Board of Governors.

G.R. No. 175352

During respondents incumbency as a member of the Senate of
Present: the Philippines,[1] he was elected Chairman of the PNRC during
the 23 February 2006 meeting of the PNRC Board of Governors.
PUNO, C.J., Petitioners allege that by accepting the chairmanship of the PNRC
QUISUMBING, Board of Governors, respondent has ceased to be a member of
YNARES-SANTIAGO, the Senate as provided in Section 13, Article VI of the Constitution,
CARPIO, which reads:
CORONA,
CARPIO MORALES,
CHICO-NAZARIO, SEC. 13. No Senator or Member of the House of Representatives
VELASCO, JR., may hold any other office or employment in the Government, or
NACHURA, any subdivision, agency, or instrumentality thereof, including
LEONARDO-DE CASTRO, government-owned or controlled corporations or their
BRION, subsidiaries, during his term without forfeiting his seat. Neither
PERALTA, and shall he be appointed to any office which may have been created
BERSAMIN, JJ. or the emoluments thereof increased during the term for which he
was elected.

Promulgated: Petitioners cite Camporedondo v. NLRC,[2] which held that the

July 15, 2009 PNRC is a government-owned or controlled corporation.
Petitioners claim that in accepting and holding the position of
x---------------------------------------------- Chairman of the PNRC Board of Governors, respondent has
----x automatically forfeited his seat in the Senate, pursuant to Flores
v. Drilon,[3] which held that incumbent national legislators lose
DECISION their elective posts upon their appointment to another government
office.
CARPIO, J.:

The Case
In his Comment, respondent asserts that petitioners have no
standing to file this petition which appears to be an action for quo
warranto, since the petition alleges that respondent committed an
act which, by provision of law, constitutes a ground for forfeiture
of his public office. Petitioners do not claim to be entitled to the
Senate office of respondent. Under Section 5, Rule 66 of the Rules
of Civil Procedure, only a person claiming to be entitled to a public
office usurped or unlawfully held by another may bring an action
for quo warranto in his own name. If the petition is one for quo
warranto, it is already barred by prescription since under Section
11, Rule 66 of the Rules of Civil Procedure, the action should be
commenced within one year after the cause of the public officers
forfeiture of office. In this case, respondent has been working as
a Red Cross volunteer for the past 40 years. Respondent was
already Chairman of the PNRC Board of Governors when he was
elected Senator in May 2004, having been elected Chairman in
2003 and re-elected in 2005.
Respondent contends that even if the present petition is treated
as a taxpayers suit, petitioners cannot be allowed to raise a
constitutional question in the absence of any claim that they
suffered some actual damage or threatened injury as a result of
the allegedly illegal act of respondent. Furthermore, taxpayers are
allowed to sue only when there is a claim of illegal disbursement
of public funds, or that public money is being diverted to any
improper purpose, or where petitioners seek to restrain
respondent from enforcing an invalid law that results in wastage
of public funds.
Respondent also maintains that if the petition is treated as one for
declaratory relief, this Court would have no jurisdiction since
original jurisdiction for declaratory relief lies with the Regional Trial
Court.
Respondent further insists that the PNRC is not a government-
owned or controlled corporation and that the prohibition under
Section 13, Article VI of the Constitution does not apply in the
present case since volunteer service to the PNRC is neither an
office nor an employment.
In their Reply, petitioners claim that their petition is neither an
action for quo warranto nor an action for declaratory relief.
Petitioners maintain that the present petition is a taxpayers suit
questioning the unlawful disbursement of funds, considering that
respondent has been drawing his salaries and other
compensation as a Senator even if he is no longer entitled to his
office. Petitioners point out that this Court has jurisdiction over this
petition since it involves a legal or constitutional issue which is of
transcendental importance.
The Issues
Petitioners raise the following issues:
1. Whether the Philippine National Red Cross (PNRC) is a
government- owned or controlled corporation;
2. Whether Section 13, Article VI of the Philippine Constitution
applies to the case of respondent who is Chairman of the PNRC
and at the same time a Member of the Senate;
3. Whether respondent should be automatically removed as a
Senator pursuant to Section 13, Article VI of the Philippine
Constitution; and
4. Whether petitioners may legally institute this petition against
respondent.[4]
The substantial issue boils down to whether the office of the PNRC
Chairman is a government office or an office in a government-
owned or controlled corporation for purposes of the prohibition in
Section 13, Article VI of the Constitution.
The Courts Ruling
We find the petition without merit.
Petitioners Have No Standing to File this Petition
A careful reading of the petition reveals that it is an action for quo
warranto. Section 1, Rule 66 of the Rules of Court provides:
Section 1. Action by Government against individuals. An action for
the usurpation of a public office, position or franchise may be
commenced by a verified petition brought in the name of the
Republic of the Philippines against:
(a) A person who usurps, intrudes into, or unlawfully holds or
exercises a public office, position or franchise;
(b) A public officer who does or suffers an act which by provision
of law, constitutes a ground for the forfeiture of his office; or
(c) An association which acts as a corporation within the
Philippines without being legally incorporated or without lawful
authority so to act. (Emphasis supplied)
Petitioners allege in their petition that:
4. Respondent became the Chairman of the PNRC when he was
elected as such during the First Regular Luncheon-Meeting of the
Board of Governors of the PNRC held on February 23, 2006, the
minutes of which is hereto attached and made integral part hereof
as Annex A.
5. Respondent was elected as Chairman of the PNRC Board of
Governors, during his incumbency as a Member of the House of
Senate of the Congress of the Philippines, having been elected as
such during the national elections last May 2004.
6. Since his election as Chairman of the PNRC Board of
Governors, which position he duly accepted, respondent has been
exercising the powers and discharging the functions and duties of
said office, despite the fact that he is still a senator.
7. It is the respectful submission of the petitioner[s] that by
accepting the chairmanship of the Board of Governors of the
PNRC, respondent has ceased to be a Member of the House of
Senate as provided in Section 13, Article VI of the Philippine
Constitution, x x x
xxxx
10. It is respectfully submitted that in accepting the position of
Chairman of the Board of Governors of the PNRC on February 23,
2006, respondent has automatically forfeited his seat in the House
of Senate and, therefore, has long ceased to be a Senator,
pursuant to the ruling of this Honorable Court in the case of
FLORES, ET AL. VS. DRILON AND GORDON, G.R. No. 104732,
xxx
11. Despite the fact that he is no longer a senator, respondent
continues to act as such and still performs the powers, functions
and duties of a senator, contrary to the constitution, law and
jurisprudence.
12. Unless restrained, therefore, respondent will continue to
falsely act and represent himself as a senator or member of the
House of Senate, collecting the salaries, emoluments and other
compensations, benefits and privileges appertaining and due only
to the legitimate senators, to the damage, great and irreparable
injury of the Government and the Filipino people.[5] (Emphasis
supplied)
Thus, petitioners are alleging that by accepting the position of
Chairman of the PNRC Board of Governors, respondent has
automatically forfeited his seat in the Senate. In short, petitioners
filed an action for usurpation of public office against respondent,
a public officer who allegedly committed an act which constitutes
a ground for the forfeiture of his public office. Clearly, such an
action is for quo warranto, specifically under Section 1(b), Rule 66
of the Rules of Court.
Quo warranto is generally commenced by the Government as the
proper party plaintiff. However, under Section 5, Rule 66 of the
Rules of Court, an individual may commence such an action if he
claims to be entitled to the public office allegedly usurped by
another, in which case he can bring the action in his own name.
The person instituting quo warranto proceedings in his own behalf
must claim and be able to show that he is entitled to the office in
dispute, otherwise the action may be dismissed at any stage.[6] In
the present case, petitioners do not claim to be entitled to the
Senate office of respondent. Clearly, petitioners have no standing
to file the present petition.
Even if the Court disregards the infirmities of the petition and treats
it as a taxpayers suit, the petition would still fail on the merits.
PNRC is a Private Organization Performing Public Functions
On 22 March 1947, President Manuel A. Roxas signed Republic
Act No. 95,[7] otherwise known as the PNRC Charter. The PNRC
is a non-profit, donor-funded, voluntary, humanitarian
organization, whose mission is to bring timely, effective, and
compassionate humanitarian assistance for the most vulnerable
without consideration of nationality, race, religion, gender, social
status, or political affiliation.[8] The PNRC provides six major
services: Blood Services, Disaster Management, Safety Services,
Community Health and Nursing, Social Services and Voluntary
Service.[9]
The Republic of the Philippines, adhering to the Geneva
Conventions, established the PNRC as a voluntary organization
for the purpose contemplated in the Geneva Convention of 27 July
1929.[10] The Whereas clauses of the PNRC Charter read:

WHEREAS, there was developed at Geneva, Switzerland, on
August 22, 1864, a convention by which the nations of the world
were invited to join together in diminishing, so far lies within their
power, the evils inherent in war;
WHEREAS, more than sixty nations of the world have ratified or
adhered to the subsequent revision of said convention, namely the
Convention of Geneva of July 29 [sic], 1929 for the Amelioration
of the Condition of the Wounded and Sick of Armies in the Field
(referred to in this Charter as the Geneva Red Cross Convention);
WHEREAS, the Geneva Red Cross Convention envisages the
establishment in each country of a voluntary organization to assist
in caring for the wounded and sick of the armed forces and to
furnish supplies for that purpose;
WHEREAS, the Republic of the Philippines became an
independent nation on July 4, 1946 and proclaimed its adherence
to the Geneva Red Cross Convention on February 14, 1947, and
by that action indicated its desire to participate with the nations of
the world in mitigating the suffering caused by war and to establish
in the Philippines a voluntary organization for that purpose as
contemplated by the Geneva Red Cross Convention;
WHEREAS, there existed in the Philippines since 1917 a Charter
of the American National Red Cross which must be terminated in
view of the independence of the Philippines; and
WHEREAS, the volunteer organizations established in the other
countries which have ratified or adhered to the Geneva Red Cross
Convention assist in promoting the health and welfare of their
people in peace and in war, and through their mutual assistance
and cooperation directly and through their international
organizations promote better understanding and sympathy among
the peoples of the world. (Emphasis supplied)
The PNRC is a member National Society of the International Red
Cross and Red Crescent Movement (Movement), which is
composed of the International Committee of the Red Cross
(ICRC), the International Federation of Red Cross and Red
Crescent Societies (International Federation), and the National
Red Cross and Red Crescent Societies (National Societies). The
Movement is united and guided by its seven Fundamental
Principles:
1. HUMANITY The International Red Cross and Red Crescent
Movement, born of a desire to bring assistance without
discrimination to the wounded on the battlefield, endeavors, in its
international and national capacity, to prevent and alleviate human
suffering wherever it may be found. Its purpose is to protect life
and health and to ensure respect for the human being. It promotes
mutual understanding, friendship, cooperation and lasting peace
amongst all peoples.
2. IMPARTIALITY It makes no discrimination as to nationality,
race, religious beliefs, class or political opinions. It endeavors to
relieve the suffering of individuals, being guided solely by their
needs, and to give priority to the most urgent cases of distress.
3. NEUTRALITY In order to continue to enjoy the confidence of
all, the Movement may not take sides in hostilities or engage at
any time in controversies of a political, racial, religious or
ideological nature.
4. INDEPENDENCE The Movement is independent. The National
Societies, while auxiliaries in the humanitarian services of their
governments and subject to the laws of their respective countries,
must always maintain their autonomy so that they may be able at
all times to act in accordance with the principles of the Movement.
5. VOLUNTARY SERVICE It is a voluntary relief movement not
prompted in any manner by desire for gain.
6. UNITY There can be only one Red Cross or one Red Crescent
Society in any one country. It must be open to all. It must carry on
its humanitarian work throughout its territory.
7. UNIVERSALITY The International Red Cross and Red
Crescent Movement, in which all Societies have equal status and
share equal responsibilities and duties in helping each other, is
worldwide. (Emphasis supplied)
The Fundamental Principles provide a universal standard of
reference for all members of the Movement. The PNRC, as a
member National Society of the Movement, has the duty to uphold
the Fundamental Principles and ideals of the Movement. In order
to be recognized as a National Society, the PNRC has to be
autonomous and must operate in conformity with the Fundamental
Principles of the Movement.[11]
The reason for this autonomy is fundamental. To be accepted by
warring belligerents as neutral workers during international or
internal armed conflicts, the PNRC volunteers must not be seen
as belonging to any side of the armed conflict. In the Philippines
where there is a communist insurgency and a Muslim separatist
rebellion, the PNRC cannot be seen as government-owned or
controlled, and neither can the PNRC volunteers be identified as
government personnel or as instruments of government policy.
Otherwise, the insurgents or separatists will treat PNRC
volunteers as enemies when the volunteers tend to the wounded
in the battlefield or the displaced civilians in conflict areas.
Thus, the PNRC must not only be, but must also be seen to be,
autonomous, neutral and independent in order to conduct its
activities in accordance with the Fundamental Principles. The
PNRC must not appear to be an instrument or agency that
implements government policy; otherwise, it cannot merit the trust
of all and cannot effectively carry out its mission as a National Red
Cross Society.[12] It is imperative that the PNRC must be
autonomous, neutral, and independent in relation to the State.
To ensure and maintain its autonomy, neutrality, and
independence, the PNRC cannot be owned or controlled by the
government. Indeed, the Philippine government does not own the
PNRC. The PNRC does not have government assets and does
not receive any appropriation from the Philippine Congress.[13]
The PNRC is financed primarily by contributions from private
individuals and private entities obtained through solicitation
campaigns organized by its Board of Governors, as provided
under Section 11 of the PNRC Charter:
SECTION 11. As a national voluntary organization, the Philippine
National Red Cross shall be financed primarily by contributions
obtained through solicitation campaigns throughout the year
which shall be organized by the Board of Governors and
conducted by the Chapters in their respective jurisdictions. These
fund raising campaigns shall be conducted independently of other
fund drives by other organizations. (Emphasis supplied)
The government does not control the PNRC. Under the PNRC
Charter, as amended, only six of the thirty members of the PNRC
Board of Governors are appointed by the President of the
Philippines. Thus, twenty-four members, or four-fifths (4/5), of the
PNRC Board of Governors are not appointed by the President.
Section 6 of the PNRC Charter, as amended, provides:
SECTION 6. The governing powers and authority shall be vested
in a Board of Governors composed of thirty members, six of whom
shall be appointed by the President of the Philippines, eighteen
shall be elected by chapter delegates in biennial conventions and
the remaining six shall be selected by the twenty-four members of
the Board already chosen. x x x.
Thus, of the twenty-four members of the PNRC Board, eighteen
are elected by the chapter delegates of the PNRC, and six are
elected by the twenty-four members already chosen a select
group where the private sector members have three-fourths
majority. Clearly, an overwhelming majority of four-fifths of the
PNRC Board are elected or chosen by the private sector members
of the PNRC.
The PNRC Board of Governors, which exercises all corporate
powers of the PNRC, elects the PNRC Chairman and all other
officers of the PNRC. The incumbent Chairman of PNRC,
respondent Senator Gordon, was elected, as all PNRC Chairmen
are elected, by a private sector-controlled PNRC Board four-fifths
of whom are private sector members of the PNRC. The PNRC
Chairman is not appointed by the President or by any subordinate
government official.
Under Section 16, Article VII of the Constitution,[14] the President
appoints all officials and employees in the Executive branch
whose appointments are vested in the President by the
Constitution or by law. The President also appoints those whose
appointments are not otherwise provided by law. Under this
Section 16, the law may also authorize the heads of departments,
agencies, commissions, or boards to appoint officers lower in rank
than such heads of departments, agencies, commissions or
boards.[15] In Rufino v. Endriga,[16] the Court explained
appointments under Section 16 in this wise:
Under Section 16, Article VII of the 1987 Constitution, the
President appoints three groups of officers. The first group refers
to the heads of the Executive departments, ambassadors, other
public ministers and consuls, officers of the armed forces from the
rank of colonel or naval captain, and other officers whose
appointments are vested in the President by the Constitution. The
second group refers to those whom the President may be
authorized by law to appoint. The third group refers to all other
officers of the Government whose appointments are not otherwise
provided by law.
Under the same Section 16, there is a fourth group of lower-
ranked officers whose appointments Congress may by law vest in
the heads of departments, agencies, commissions, or boards. x x
x
xxx
In a department in the Executive branch, the head is the
Secretary. The law may not authorize the Undersecretary, acting
as such Undersecretary, to appoint lower-ranked officers in the
Executive department. In an agency, the power is vested in the
head of the agency for it would be preposterous to vest it in the
agency itself. In a commission, the head is the chairperson of the
commission. In a board, the head is also the chairperson of the
board. In the last three situations, the law may not also authorize
officers other than the heads of the agency, commission, or board
to appoint lower-ranked officers.
xxx
The Constitution authorizes Congress to vest the power to appoint
lower-ranked officers specifically in the heads of the specified
offices, and in no other person. The word heads refers to the
chairpersons of the commissions or boards and not to their
members, for several reasons.
The President does not appoint the Chairman of the PNRC.
Neither does the head of any department, agency, commission or
board appoint the PNRC Chairman. Thus, the PNRC Chairman is
not an official or employee of the Executive branch since his
appointment does not fall under Section 16, Article VII of the
Constitution. Certainly, the PNRC Chairman is not an official or
employee of the Judiciary or Legislature. This leads us to the
obvious conclusion that the PNRC Chairman is not an official or
employee of the Philippine Government. Not being a government
official or employee, the PNRC Chairman, as such, does not hold
a government office or employment.
Under Section 17, Article VII of the Constitution,[17] the President
exercises control over all government offices in the Executive
branch. If an office is legally not under the control of the President,
then such office is not part of the Executive branch. In Rufino v.
Endriga,[18] the Court explained the Presidents power of control
over all government offices as follows:
Every government office, entity, or agency must fall under the
Executive, Legislative, or Judicial branches, or must belong to one
of the independent constitutional bodies, or must be a quasi-
judicial body or local government unit. Otherwise, such
government office, entity, or agency has no legal and
constitutional basis for its existence.
The CCP does not fall under the Legislative or Judicial branches
of government. The CCP is also not one of the independent
constitutional bodies. Neither is the CCP a quasi-judicial body nor
a local government unit. Thus, the CCP must fall under the
Executive branch. Under the Revised Administrative Code of
1987, any agency not placed by law or order creating them under
any specific department falls under the Office of the President.
Since the President exercises control over all the executive
departments, bureaus, and offices, the President necessarily
exercises control over the CCP which is an office in the Executive
branch. In mandating that the President shall have control of all
executive . . . offices, Section 17, Article VII of the 1987
Constitution does not exempt any executive office one performing
executive functions outside of the independent constitutional
bodies from the Presidents power of control. There is no dispute
that the CCP performs executive, and not legislative, judicial, or
quasi-judicial functions.
The Presidents power of control applies to the acts or decisions of
all officers in the Executive branch. This is true whether such
officers are appointed by the President or by heads of
departments, agencies, commissions, or boards. The power of
control means the power to revise or reverse the acts or decisions
of a subordinate officer involving the exercise of discretion.
In short, the President sits at the apex of the Executive branch,
and exercises control of all the executive departments, bureaus,
and offices. There can be no instance under the Constitution
where an officer of the Executive branch is outside the control of
the President. The Executive branch is unitary since there is only
one President vested with executive power exercising control over
the entire Executive branch. Any office in the Executive branch
that is not under the control of the President is a lost command
whose existence is without any legal or constitutional basis.
(Emphasis supplied)
An overwhelming four-fifths majority of the PNRC Board are
private sector individuals elected to the PNRC Board by the
private sector members of the PNRC. The PNRC Board exercises
all corporate powers of the PNRC. The PNRC is controlled by
private sector individuals. Decisions or actions of the PNRC Board
are not reviewable by the President. The President cannot reverse
or modify the decisions or actions of the PNRC Board. Neither can
the President reverse or modify the decisions or actions of the
PNRC Chairman. It is the PNRC Board that can review, reverse
or modify the decisions or actions of the PNRC Chairman. This
proves again that the office of the PNRC Chairman is a private
office, not a government office.
Although the State is often represented in the governing bodies of
a National Society, this can be justified by the need for proper
coordination with the public authorities, and the government
representatives may take part in decision-making within a National
Society. However, the freely-elected representatives of a National
Societys active members must remain in a large majority in a
National Societys governing bodies.[19]
The PNRC is not government-owned but privately owned. The
vast majority of the thousands of PNRC members are private
individuals, including students. Under the PNRC Charter, those
who contribute to the annual fund campaign of the PNRC are
entitled to membership in the PNRC for one year. Thus, any one
between 6 and 65 years of age can be a PNRC member for one
year upon contributing P35, P100, P300, P500 or P1,000 for the
year.[20] Even foreigners, whether residents or not, can be
members of the PNRC. Section 5 of the PNRC Charter, as
amended by Presidential Decree No. 1264,[21] reads:
SEC. 5. Membership in the Philippine National Red Cross shall be
open to the entire population in the Philippines regardless of
citizenship. Any contribution to the Philippine National Red Cross
Annual Fund Campaign shall entitle the contributor to membership
for one year and said contribution shall be deductible in full for
taxation purposes.
Thus, the PNRC is a privately owned, privately funded, and
privately run charitable organization. The PNRC is not a
government-owned or controlled corporation.
Petitioners anchor their petition on the 1999 case of
Camporedondo v. NLRC,[22] which ruled that the PNRC is a
government-owned or controlled corporation. In ruling that the
PNRC is a government-owned or controlled corporation, the
simple test used was whether the corporation was created by its
own special charter for the exercise of a public function or by
incorporation under the general corporation law. Since the PNRC
was created under a special charter, the Court then ruled that it is
a government corporation. However, the Camporedondo ruling
failed to consider the definition of a government-owned or
controlled corporation as provided under Section 2(13) of the
Introductory Provisions of the Administrative Code of 1987:
SEC. 2. General Terms Defined. x x x
(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) percent 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.(Boldfacing and
underscoring supplied)
A government-owned or controlled corporation must be owned by
the government, and in the case of a stock corporation, at least a
majority of its capital stock must be owned by the government. In
the case of a non-stock corporation, by analogy at least a majority
of the members must be government officials holding such
membership by appointment or designation by the government.
Under this criterion, and as discussed earlier, the government
does not own or control PNRC.
The PNRC Charter is Violative of the Constitutional Proscription
against the Creation of Private Corporations by Special Law
The 1935 Constitution, as amended, was in force when the PNRC
was created by special charter on 22 March 1947. Section 7,
Article XIV of the 1935 Constitution, as amended, reads:
SEC. 7. The Congress shall not, except by general law, provide
for the formation, organization, or regulation of private
corporations, unless such corporations are owned or controlled by
the Government or any subdivision or instrumentality thereof.
The subsequent 1973 and 1987 Constitutions contain similar
provisions prohibiting Congress from creating private corporations
except by general law. Section 1 of the PNRC Charter, as
amended, creates the PNRC as a body corporate and politic, thus:
SECTION 1. There is hereby created in the Republic of the
Philippines a body corporate and politic to be the voluntary
organization officially designated to assist the Republic of the
Philippines in discharging the obligations set forth in the Geneva
Conventions and to perform such other duties as are inherent
upon a National Red Cross Society. The national headquarters of
this Corporation shall be located in Metropolitan Manila.
(Emphasis supplied)
In Feliciano v. Commission on Audit,[23] the Court explained the
constitutional provision prohibiting Congress from creating private
corporations in this wise:
We begin by explaining the general framework under the
fundamental law. The Constitution recognizes two classes of
corporations. The first refers to private corporations created under
a general law. The second refers to government-owned or
controlled corporations created by special charters. Section 16,
Article XII of the Constitution provides:
Sec. 16. The Congress shall not, except by general law, provide
for the formation, organization, or regulation of private
corporations. Government-owned or controlled corporations may
be created or established by special charters in the interest of the
common good and subject to the test of economic viability.
The Constitution emphatically prohibits the creation of private
corporations except by general law applicable to all citizens. The
purpose of this constitutional provision is to ban private
corporations created by special charters, which historically gave
certain individuals, families or groups special privileges denied to
other citizens.
In short, Congress cannot enact a law creating a private
corporation with a special charter. Such legislation would be
unconstitutional. Private corporations may exist only under a
general law. If the corporation is private, it must necessarily exist
under a general law. Stated differently, only corporations created
under a general law can qualify as private corporations. Under
existing laws, the general law is the Corporation Code, except that
the Cooperative Code governs the incorporation of cooperatives.
The Constitution authorizes Congress to create government-
owned or controlled corporations through special charters. Since
private corporations cannot have special charters, it follows that
Congress can create corporations with special charters only if
such corporations are government-owned or controlled.[24]
(Emphasis supplied)
In Feliciano, the Court held that the Local Water Districts are
government-owned or controlled corporations since they exist by
virtue of Presidential Decree No. 198, which constitutes their
special charter. The seed capital assets of the Local Water
Districts, such as waterworks and sewerage facilities, were public
property which were managed, operated by or under the control
of the city, municipality or province before the assets were
transferred to the Local Water Districts. The Local Water Districts
also receive subsidies and loans from the Local Water Utilities
Administration (LWUA). In fact, under the 2009 General
Appropriations Act,[25] the LWUA has a budget amounting to
P400,000,000 for its subsidy requirements.[26] There is no private
capital invested in the Local Water Districts. The capital assets
and operating funds of the Local Water Districts all come from the
government, either through transfer of assets, loans, subsidies or
the income from such assets or funds.
The government also controls the Local Water Districts because
the municipal or city mayor, or the provincial governor, appoints
all the board directors of the Local Water Districts. Furthermore,
the board directors and other personnel of the Local Water
Districts are government employees subject to civil service laws
and anti-graft laws. Clearly, the Local Water Districts are
considered government-owned or controlled corporations not only
because of their creation by special charter but also because the
government in fact owns and controls the Local Water Districts.
Just like the Local Water Districts, the PNRC was created through
a special charter. However, unlike the Local Water Districts, the
elements of government ownership and control are clearly lacking
in the PNRC. Thus, although the PNRC is created by a special
charter, it cannot be considered a government-owned or
controlled corporation in the absence of the essential elements of
ownership and control by the government. In creating the PNRC
as a corporate entity, Congress was in fact creating a private
corporation. However, the constitutional prohibition against the
creation of private corporations by special charters provides no
exception even for non-profit or charitable corporations.
Consequently, the PNRC Charter, insofar as it creates the PNRC
as a private corporation and grants it corporate powers,[27] is void
for being unconstitutional. Thus, Sections 1,[28] 2,[29] 3,[30]
4(a),[31] 5,[32] 6,[33] 7,[34] 8,[35] 9,[36] 10,[37] 11,[38] 12,[39]
and 13[40] of the PNRC Charter, as amended, are void.
 The other provisions[41] of the PNRC Charter remain valid as they
can be considered as a recognition by the State that the
unincorporated PNRC is the local National Society of the
International Red Cross and Red Crescent Movement, and thus - versus -
entitled to the benefits, exemptions and privileges set forth in the
PNRC Charter. The other provisions of the PNRC Charter
implement the Philippine Governments treaty obligations under
Article 4(5) of the Statutes of the International Red Cross and Red
Crescent Movement, which provides that to be recognized as a
National Society, the Society must be duly recognized by the legal
government of its country on the basis of the Geneva Conventions
and of the national legislation as a voluntary aid society, auxiliary
to the public authorities in the humanitarian field.
COMMISSION ON AUDIT,
In sum, we hold that the office of the PNRC Chairman is not a Respondent.
government office or an office in a government-owned or
controlled corporation for purposes of the prohibition in Section G.R. No. 177131
13, Article VI of the 1987 Constitution. However, since the PNRC
Charter is void insofar as it creates the PNRC as a private Present:
corporation, the PNRC should incorporate under the Corporation
Code and register with the Securities and Exchange Commission CORONA, C.J.,
if it wants to be a private corporation. CARPIO,
CARPIO MORALES,
WHEREFORE, we declare that the office of the Chairman of the VELASCO, JR.,
Philippine National Red Cross is not a government office or an NACHURA,
office in a government-owned or controlled corporation for LEONARDO-DE CASTRO,
purposes of the prohibition in Section 13, Article VI of the 1987 BRION,
Constitution. We also declare that Sections 1, 2, 3, 4(a), 5, 6, 7, 8, PERALTA,
9, 10, 11, 12, and 13 of the Charter of the Philippine National Red BERSAMIN,
Cross, or Republic Act No. 95, as amended by Presidential DEL CASTILLO,
Decree Nos. 1264 and 1643, are VOID because they create the ABAD,
PNRC as a private corporation or grant it corporate powers. VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SO ORDERED. SERENO, JJ.

2. Boy Scout v. COA

Promulgated:
BOY SCOUTS OF THE PHILIPPINES,
Petitioner, June 7, 2011
x--------------------------------------------------x
DECISION
LEONARDO-DE CASTRO, J.:
The jurisdiction of the Commission on Audit (COA) over the Boy Scouts of the
Philippines (BSP) is the subject matter of this controversy that reached us via
petition for prohibition[1] filed by the BSP under Rule 65 of the 1997 Rules of
Court. In this petition, the BSP seeks that the COA be prohibited from
implementing its June 18, 2002 Decision,[2] its February 21, 2007
Resolution,[3] as well as all other issuances arising therefrom, and that all of
the foregoing be rendered null and void. [4]
Antecedent Facts and Background of the Case
This case arose when the COA issued Resolution No. 99-011[5] on August 19,
1999 (the COA Resolution), with the subject Defining the Commissions policy
with respect to the audit of the Boy Scouts of the Philippines. In its whereas
clauses, the COA Resolution stated that the BSP was created as a public
corporation under Commonwealth Act No. 111, as amended by Presidential
Decree No. 460 and Republic Act No. 7278; that in Boy Scouts of the
Philippines v. National Labor Relations Commission,[6] the Supreme Court
ruled that the BSP, as constituted under its charter, was a government-
controlled corporation within the meaning of Article IX(B)(2)(1) of the
Constitution; and that the BSP is appropriately regarded as a government
instrumentality under the 1987 Administrative Code.[7] The COA Resolution
also cited its constitutional mandate under Section 2(1), Article IX (D). Finally,
the COA Resolution reads:
NOW THEREFORE, in consideration of the foregoing premises, the
COMMISSION PROPER HAS RESOLVED, AS IT DOES HEREBY
RESOLVE, to conduct an annual financial audit of the Boy Scouts of the
Philippines in accordance with generally accepted auditing standards, and
express an opinion on whether the financial statements which include the
Balance Sheet, the Income Statement and the Statement of Cash Flows
present fairly its financial position and results of operations.
xxxx
BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision,
the Boy Scouts of the Philippines shall be classified among the government
corporations belonging to the Educational, Social, Scientific, Civic and
Research Sector under the Corporate Audit Office I, to be audited, similar to
the subsidiary corporations, by employing the 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.
xxxx
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 entity subject to audit by the COA. [19]
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 scope and coverage of Section 16, Article XII of the Constitution can be
seen from the aforementioned declaration of state policies and goals which
pertains to national economy and patrimony and the interests of the people in
economic development.
Section 16, Article XII deals with the formation, organization, or regulation of
private corporations,[52] which should be done through a general law enacted
by Congress, provides for an exception, that is: if the corporation is
government owned or controlled; its creation is in the interest of the common
good; and it meets the test of economic viability. The rationale behind Article
XII, Section 16 of the 1987 Constitution was explained in Feliciano v.
Commission on Audit,[53] in the following manner:
The Constitution emphatically prohibits the creation of private corporations
except by a general law applicable to all citizens. The purpose of this
constitutional provision is to ban private corporations created by special
charters, which historically gave certain individuals, families or groups special
privileges denied to other citizens.[54] (Emphasis added.)
It may be gleaned from the above discussion that Article XII, Section 16 bans
the creation of private corporations by special law. The said constitutional
provision should not be construed so as to prohibit the creation of public
corporations or a corporate agency or instrumentality of the government
intended to serve a public interest or purpose, which should not be measured
on the basis of economic viability, but according to the public interest or
purpose it serves as envisioned by paragraph (2), of Article 44 of the Civil Code
and the pertinent provisions of the Administrative Code of 1987.
The BSP is a Public Corporation Not Subject to the Test of Government
Ownership or Control and Economic Viability
The BSP is a public corporation or a government agency or instrumentality
with juridical personality, which does not fall within the constitutional prohibition
in Article XII, Section 16, notwithstanding the amendments to its charter. Not
all corporations, which are not government owned or controlled, are ipso facto
to be considered private corporations as there exists another distinct class of
corporations or chartered institutions which are otherwise known as public
corporations. These corporations are treated by law as agencies or
instrumentalities of the government which are not subject to the tests of
ownership or control and economic viability but to different criteria relating to
their public purposes/interests or constitutional policies and objectives and
their administrative relationship to the government or any of its Departments
or Offices.
Classification of Corporations Under Section 16, Article XII of the Constitution
on National Economy and Patrimony
The dissenting opinion of Associate Justice Antonio T. Carpio, citing a line of
cases, insists that the Constitution recognizes only two classes of
corporations: private corporations under a general law, and government-
owned or controlled corporations created by special charters.
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.
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 Ownership and Control Tests 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 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 CARPIO-MORALES,
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. AZCUNA,

WHEREFORE, premises considered, the instant petition for prohibition is

DISMISSED. TINGA,

SO ORDERED.
CHICO-NAZARIO,
3. PSPCA v. Commission on Audit

PHILIPPINE SOCIETY FOR GARCIA,

THE PREVENTION OF VELASCO, JR.,
CRUELTY TO ANIMALS, NACHURA, and
REYES, JJ.
G.R. No. 169752 COMMISSION ON AUDIT,
Petitioners, DIR. RODULFO J. ARIESGA
(in his official capacity as Director
Members: of the Commission on Audit), MS.
MERLE M. VALENTIN and MS.
SUSAN GUARDIAN (in their official
capacities as Team Leader and Team
Member, respectively, of the audit
Team of the Commission on Audit),
PUNO, C.J.

QUISUMBING,

YNARES-SANTIAGO,

SANDOVAL-GUTIERREZ, Promulgated:
Respondents.

CARPIO, September 25, 2007

x-------------------------------------------------------
----x
AUSTRIA-MARTINEZ, DECISION

AUSTRIA-MARTINEZ, J.:
CORONA,
- versus - Before the Court is a special civil action for Certiorari and Prohibition under
Rule 65 of the Rules of Court, in relation to Section 2 of Rule 64, filed by the
petitioner assailing Office Order No. 2005-021[1] dated September 14, 2005
issued by the respondents which constituted the audit team, as well as its
September 23, 2005 Letter[2] informing the petitioner that respondents audit
team shall conduct an audit survey on the petitioner for a detailed audit of its
accounts, operations, and financial transactions. No temporary restraining
order was issued.
The petitioner was incorporated as a juridical entity over one hundred years
ago by virtue of Act No. 1285, enacted on January 19, 1905, by the Philippine
Commission. The petitioner, at the time it was created, was composed of
animal aficionados and animal propagandists. The objects of the petitioner, as
stated in Section 2 of its charter, shall be to enforce laws relating to cruelty
inflicted upon animals or the protection of animals in the Philippine Islands,
and generally, to do and perform all things which may tend in any way to
alleviate the suffering of animals and promote their welfare.[3]
At the time of the enactment of Act No. 1285, the original Corporation Law, Act
No. 1459, was not yet in existence. Act No. 1285 antedated both the
Corporation Law and the constitution of the Securities and Exchange
Commission. Important to note is that the nature of the petitioner as a
corporate entity is distinguished from the sociedad anonimas under the
Spanish Code of Commerce.
For the purpose of enhancing its powers in promoting animal welfare and
enforcing laws for the protection of animals, the petitioner was initially imbued
under its charter with the power to apprehend violators of animal welfare laws.
In addition, the petitioner was to share one-half (1/2) of the fines imposed and
collected through its efforts for violations of the laws related thereto. As
originally worded, Sections 4 and 5 of Act No. 1285 provide:
SEC. 4. The said society is authorized to appoint not to exceed five agents in
the City of Manila, and not to exceed two in each of the provinces of the
Philippine Islands who shall have all the power and authority of a police officer
to make arrests for violation of the laws enacted for the prevention of cruelty
to animals and the protection of animals, and to serve any process in
connection with the execution of such laws; and in addition thereto, all the
police force of the Philippine Islands, wherever organized, shall, as occasion
requires, assist said society, its members or agents, in the enforcement of all
such laws.
SEC. 5. One-half of all the fines imposed and collected through the efforts of
said society, its members or its agents, for violations of the laws enacted for
the prevention of cruelty to animals and for their protection, shall belong to said
society and shall be used to promote its objects.
(emphasis supplied)
Subsequently, however, the power to make arrests as well as the privilege to
retain a portion of the fines collected for violation of animal-related laws were
recalled by virtue of Commonwealth Act (C.A.) No. 148,[4] which reads, in its
entirety, thus:
Be it enacted by the National Assembly of the Philippines:
Section 1. Section four of Act Numbered Twelve hundred and eighty-five as
amended by Act Numbered Thirty five hundred and forty-eight, is hereby
further amended so as to read as follows:
Sec. 4. The said society is authorized to appoint not to exceed ten agents in
the City of Manila, and not to exceed one in each municipality of the Philippines
who shall have the authority to denounce to regular peace officers any violation
of the laws enacted for the prevention of cruelty to animals and the protection
of animals and to cooperate with said peace officers in the prosecution of
transgressors of such laws.
Sec. 2. The full amount of the fines collected for violation of the laws against
cruelty to animals and for the protection of animals, shall accrue to the general
fund of the Municipality where the offense was committed.
Sec. 3. This Act shall take effect upon its approval.
Approved, November 8, 1936. (Emphasis supplied)
Immediately thereafter, then President Manuel L. Quezon issued Executive
Order (E.O.) No. 63 dated November 12, 1936, portions of which provide:
Whereas, during the first regular session of the National Assembly,
Commonwealth Act Numbered One Hundred Forty Eight was enacted
depriving the agents of the Society for the Prevention of Cruelty to Animals of
their power to arrest persons who have violated the laws prohibiting cruelty to
animals thereby correcting a serious defect in one of the laws existing in our
statute books.
xxxx
Whereas, the cruel treatment of animals is an offense against the State,
penalized under our statutes, which the Government is duty bound to enforce;
Now, therefore, I, Manuel L. Quezon, President of the Philippines, pursuant to
the authority conferred upon me by the Constitution, hereby decree, order, and
direct the Commissioner of Public Safety, the Provost Marshal General as
head of the Constabulary Division of the Philippine Army, every Mayor of a
chartered city, and every municipal president to detail and organize special
members of the police force, local, national, and the Constabulary to watch,
capture, and prosecute offenders against the laws enacted to prevent cruelty
to animals. (Emphasis supplied)
On December 1, 2003, an audit team from respondent Commission on Audit
(COA) visited the office of the petitioner to conduct an audit survey pursuant
to COA Office Order No. 2003-051 dated November 18, 2003[5] addressed to
the petitioner. The petitioner demurred on the ground that it was a private entity
not under the jurisdiction of COA, citing Section 2(1) of Article IX of the
Constitution which specifies the general jurisdiction of the COA, viz:
Section 1. General Jurisdiction. 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 officers that have been granted fiscal
autonomy under the Constitution; (b) autonomous state colleges and
universities; (c) other government-owned or controlled corporations 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 or the granting institution to submit to such audit as a condition
of subsidy or equity. However, where the internal control system of the audited
agencies is inadequate, the Commission may adopt such measures, including
temporary or special pre-audit, as are necessary and appropriate to correct
the deficiencies. It shall keep the general accounts of the Government, and for
such period as may be provided by law, preserve the vouchers and other
supporting papers pertaining thereto. (Emphasis supplied)
Petitioner explained thus:
a. Although the petitioner was created by special legislation, this necessarily
came about because in January 1905 there was as yet neither a Corporation
Law or any other general law under which it may be organized and
incorporated, nor a Securities and Exchange Commission which would have
passed upon its organization and incorporation.
b. That Executive Order No. 63, issued during the Commonwealth period,
effectively deprived the petitioner of its power to make arrests, and that the
petitioner lost its operational funding, underscore the fact that it exercises no
governmental function. In fine, the government itself, by its overt acts,
confirmed petitioners status as a private juridical entity.
The COA General Counsel issued a Memorandum[6] dated May 6, 2004,
asserting that the petitioner was subject to its audit authority. In a letter dated
May 17, 2004,[7] respondent COA informed the petitioner of the result of the
evaluation, furnishing it with a copy of said Memorandum dated May 6, 2004
of the General Counsel.
Petitioner thereafter filed with the respondent COA a Request for Re-
evaluation dated May 19, 2004,[8] insisting that it was a private domestic
corporation.
Acting on the said request, the General Counsel of respondent COA, in a
Memorandum dated July 13, 2004,[9] affirmed her earlier opinion that the
petitioner was a government entity that was subject to the audit jurisdiction of
respondent COA. In a letter dated September 14, 2004, the respondent COA
informed the petitioner of the result of the re-evaluation, maintaining its position
that the petitioner was subject to its audit jurisdiction, and requested an initial
conference with the respondents.
In a Memorandum dated September 16, 2004, Director Delfin Aguilar reported
to COA Assistant Commissioner Juanito Espino, Corporate Government
Sector, that the audit survey was not conducted due to the refusal of the
petitioner because the latter maintained that it was a private corporation.
Petitioner received on September 27, 2005 the subject COA Office Order
2005-021 dated September 14, 2005 and the COA Letter dated September
23, 2005.
Hence, herein Petition on the following grounds:
A.
RESPONDENT COMMISSION ON AUDIT COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT RULED THAT PETITIONER IS SUBJECT TO ITS AUDIT
AUTHORITY.
B.
PETITIONER IS ENTITLED TO THE RELIEF SOUGHT, THERE BEING NO
APPEAL, NOR ANY PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE
ORDINARY COURSE OF LAW AVAILABLE TO IT.[10]
The essential question before this Court is whether the petitioner qualifies as
a government agency that may be subject to audit by respondent COA.
Petitioner argues: first, even though it was created by special legislation in
1905 as there was no general law then existing under which it may be
organized or incorporated, it exercises no governmental functions because
these have been revoked by C.A. No. 148 and E.O. No. 63; second, nowhere
in its charter is it indicated that it is a public corporation, unlike, for instance,
C.A. No. 111 which created the Boy Scouts of the Philippines, defined its
powers and purposes, and specifically stated that it was An Act to Create a
Public Corporation in which, even as amended by Presidential Decree No.
460, the law still adverted to the Boy Scouts of the Philippines as a public
corporation, all of which are not obtaining in the charter of the petitioner; third,
if it were a government body, there would have been no need for the State to
grant it tax exemptions under Republic Act No. 1178, and the fact that it was
so exempted strengthens its position that it is a private institution; fourth, the
employees of the petitioner are registered and covered by the Social Security
System at the latters initiative and not through the Government Service
Insurance System, which should have been the case had the employees been
considered government employees; fifth, the petitioner does not receive any
form of financial assistance from the government, since C.A. No. 148,
amending Section 5 of Act No. 1285, states that the full amount of the fines,
collected for violation of the laws against cruelty to animals and for the
protection of animals, shall accrue to the general fund of the Municipality where
the offense was committed; sixth, C.A. No. 148 effectively deprived the
petitioner of its powers to make arrests and serve processes as these functions
were placed in the hands of the police force; seventh, no government
appointee or representative sits on the board of trustees of the petitioner;
eighth, a reading of the provisions of its charter (Act No. 1285) fails to show
that any act or decision of the petitioner is subject to the approval of or control
by any government agency, except to the extent that it is governed by the law
on private corporations in general; and finally, ninth, the Committee on Animal
Welfare, under the Animal Welfare Act of 1998, includes members from both
the private and the public sectors.
The respondents contend that since the petitioner is a body politic created by
virtue of a special legislation and endowed with a governmental purpose, then,
indubitably, the COA may audit the financial activities of the latter.
Respondents in effect divide their contentions into six strains: first, the test to
determine whether an entity is a government corporation lies in the manner of
its creation, and, since the petitioner was created by virtue of a special charter,
it is thus a government corporation subject to respondents auditing power;
second, the petitioner exercises sovereign powers, that is, it is tasked to
enforce the laws for the protection and welfare of animals which ultimately
redound to the public good and welfare, and, therefore, it is deemed to be a
government instrumentality as defined under the Administrative Code of 1987,
the purpose of which is connected with the administration of government, as
purportedly affirmed by American jurisprudence; third, by virtue of Section
23,[11] Title II, Book III of the same Code, the Office of the President exercises
supervision or control over the petitioner; fourth, under the same Code, the
requirement under its special charter for the petitioner to render a report to the
Civil Governor, whose functions have been inherited by the Office of the
President, clearly reflects the nature of the petitioner as a government
instrumentality; fifth, despite the passage of the Corporation Code, the law
creating the petitioner had not been abolished, nor had it been re-incorporated
under any general corporation law; and finally, sixth, Republic Act No. 8485,
otherwise known as the Animal Welfare Act of 1998, designates the petitioner
as a member of its Committee on Animal Welfare which is attached to the
Department of Agriculture.
In view of the phrase One-half of all the fines imposed and collected through
the efforts of said society, the Court, in a Resolution dated January 30, 2007,
required the Office of the Solicitor General (OSG) and the parties to comment
on: a) petitioner's authority to impose fines and the validity of the provisions of
Act No. 1285 and Commonwealth Act No. 148 considering that there are no
standard measures provided for in the aforecited laws as to the manner of
implementation, the specific violations of the law, the person/s authorized to
impose fine and in what amount; and, b) the effect of the 1935 and 1987
Constitutions on whether petitioner continues to exist or should organize as a
private corporation under the Corporation Code, B.P. Blg. 68 as amended.
Petitioner and the OSG filed their respective Comments. Respondents filed a
Manifestation stating that since they were being represented by the OSG
which filed its Comment, they opted to dispense with the filing of a separate
one and adopt for the purpose that of the OSG.
The petitioner avers that it does not have the authority to impose fines for
violation of animal welfare laws; it only enjoyed the privilege of sharing in the
fines imposed and collected from its efforts in the enforcement of animal
welfare laws; such privilege, however, was subsequently abolished by C.A.
No. 148; that it continues to exist as a private corporation since it was created
by the Philippine Commission before the effectivity of the Corporation law, Act
No. 1459; and the 1935 and 1987 Constitutions.
The OSG submits that Act No. 1285 and its amendatory laws did not give
petitioner the authority to impose fines for violation of laws[12] relating to the
prevention of cruelty to animals and the protection of animals; that even prior
to the amendment of Act No. 1285, petitioner was only entitled to share in the
fines imposed; C.A. No. 148 abolished that privilege to share in the fines
collected; that petitioner is a public corporation and has continued to exist
since Act No. 1285; petitioner was not repealed by the 1935 and 1987
Constitutions which contain transitory provisions maintaining all laws issued
not inconsistent therewith until amended, modified or repealed.
The petition is impressed with merit.
The arguments of the parties, interlaced as they are, can be disposed of in five
points.
First, the Court agrees with the petitioner that the charter test cannot be
applied.
Essentially, the charter test as it stands today provides:
[T]he test to determine whether a corporation is government owned or
controlled, or private in nature is simple. Is it created by its own charter for the
exercise of a public function, or by incorporation under the general corporation
law? Those with special charters are government corporations subject to its
provisions, and its employees are under the jurisdiction of the Civil Service
Commission, and are compulsory members of the Government Service
Insurance System. xxx (Emphasis supplied)[13]
The petitioner is correct in stating that the charter test is predicated, at best,
on the legal regime established by the 1935 Constitution, Section 7, Article
XIII, which states:
Sec. 7. The National Assembly shall not, except by general law, provide for
the formation, organization, or regulation of private corporations, unless such
corporations are owned or controlled by the Government or any subdivision or
instrumentality thereof.[14]
The foregoing proscription has been carried over to the 1973 and the 1987
Constitutions. Section 16 of Article XII of the present Constitution provides:
Sec. 16. The Congress shall not, except by general law, provide for the
formation, organization, or regulation of private corporations. Government-
owned or controlled corporations may be created or established by special
charters in the interest of the common good and subject to the test of economic
viability.
Section 16 is essentially a re-enactment of Section 7 of Article XVI of the 1935
Constitution and Section 4 of Article XIV of the 1973 Constitution.
During the formulation of the 1935 Constitution, the Committee on Franchises
recommended the foregoing proscription to prevent the pressure of special
interests upon the lawmaking body in the creation of corporations or in the
regulation of the same. To permit the lawmaking body by special law to provide
for the organization, formation, or regulation of private corporations would be
in effect to offer to it the temptation in many cases to favor certain groups, to
the prejudice of others or to the prejudice of the interests of the country.[15]
And since the underpinnings of the charter test had been introduced by the
1935 Constitution and not earlier, it follows that the test cannot apply to the
petitioner, which was incorporated by virtue of Act No. 1285, enacted on
January 19, 1905. Settled is the rule that laws in general have no retroactive
effect, unless the contrary is provided.[16] All statutes are to be construed as
having only a prospective operation, unless the purpose and intention of the
legislature to give them a retrospective effect is expressly declared or is
necessarily implied from the language used. In case of doubt, the doubt must
be resolved against the retrospective effect.[17]
There are a few exceptions. Statutes can be given retroactive effect in the
following cases: (1) when the law itself so expressly provides; (2) in case of
remedial statutes; (3) in case of curative statutes; (4) in case of laws
interpreting others; and (5) in case of laws creating new rights.[18] None of the
exceptions is present in the instant case.
The general principle of prospectivity of the law likewise applies to Act No.
1459, otherwise known as the Corporation Law, which had been enacted by
virtue of the plenary powers of the Philippine Commission on March 1, 1906,
a little over a year after January 19, 1905, the time the petitioner emerged as
a juridical entity. Even the Corporation Law respects the rights and powers of
juridical entities organized beforehand, viz:
SEC. 75. Any corporation or sociedad anonima formed, organized, and
existing under the laws of the Philippine Islands and lawfully transacting
business in the Philippine Islands on the date of the passage of this Act, shall
be subject to the provisions hereof so far as such provisions may be applicable
and shall be entitled at its option either to continue business as such
corporation or to reform and organize under and by virtue of the provisions of
this Act, transferring all corporate interests to the new corporation which, if a
stock corporation, is authorized to issue its shares of stock at par to the
stockholders or members of the old corporation according to their interests.
(Emphasis supplied).
As pointed out by the OSG, both the 1935 and 1987 Constitutions contain
transitory provisions maintaining all laws issued not inconsistent therewith until
amended, modified or repealed.[19]
In a legal regime where the charter test doctrine cannot be applied, the mere
fact that a corporation has been created by virtue of a special law does not
necessarily qualify it as a public corporation.
What then is the nature of the petitioner as a corporate entity? What legal
regime governs its rights, powers, and duties?
As stated, at the time the petitioner was formed, the applicable law was the
Philippine Bill of 1902, and, emphatically, as also stated above, no proscription
similar to the charter test can be found therein.
The textual foundation of the charter test, which placed a limitation on the
power of the legislature, first appeared in the 1935 Constitution. However, the
petitioner was incorporated in 1905 by virtue of Act No. 1258, a law antedating
the Corporation Law (Act No. 1459) by a year, and the 1935 Constitution, by
thirty years. There being neither a general law on the formation and
organization of private corporations nor a restriction on the legislature to create
private corporations by direct legislation, the Philippine Commission at that
moment in history was well within its powers in 1905 to constitute the petitioner
as a private juridical entity.
Time and again the Court must caution even the most brilliant scholars of the
law and all constitutional historians on the danger of imposing legal concepts
of a later date on facts of an earlier date.[20]
The amendments introduced by C.A. No. 148 made it clear that the petitioner
was a private corporation and not an agency of the government. This was
evident in Executive Order No. 63, issued by then President of the Philippines
Manuel L. Quezon, declaring that the revocation of the powers of the petitioner
to appoint agents with powers of arrest corrected a serious defect in one of the
laws existing in the statute books.
As a curative statute, and based on the doctrines so far discussed, C.A. No.
148 has to be given retroactive effect, thereby freeing all doubt as to which
class of corporations the petitioner belongs, that is, it is a quasi-public
corporation, a kind of private domestic corporation, which the Court will further
elaborate on under the fourth point.
Second, a reading of petitioners charter shows that it is not subject to control
or supervision by any agency of the State, unlike government-owned and -
controlled corporations. No government representative sits on the board of
trustees of the petitioner. Like all private corporations, the successors of its
members are determined voluntarily and solely by the petitioner in accordance
with its by-laws, and may exercise those powers generally accorded to private
corporations, such as the powers to hold property, to sue and be sued, to use
a common seal, and so forth. It may adopt by-laws for its internal operations:
the petitioner shall be managed or operated by its officers in accordance with
its by-laws in force. The pertinent provisions of the charter provide:
Section 1. Anna L. Ide, Kate S. Wright, John L. Chamberlain, William F.
Tucker, Mary S. Fergusson, Amasa S. Crossfield, Spencer Cosby, Sealy B.
Rossiter, Richard P. Strong, Jose Robles Lahesa, Josefina R. de Luzuriaga,
and such other persons as may be associated with them in conformity with this
act, and their successors, are hereby constituted and created a body politic
and corporate at law, under the name and style of The Philippines Society for
the Prevention of Cruelty to Animals.
As incorporated by this Act, said society shall have the power to add to its
organization such and as many members as it desires, to provide for and
choose such officers as it may deem advisable, and in such manner as it may
wish, and to remove members as it shall provide.
It shall have the right to sue and be sued, to use a common seal, to receive
legacies and donations, to conduct social enterprises for the purpose of
obtaining funds, to levy dues upon its members and provide for their collection
to hold real and personal estate such as may be necessary for the
accomplishment of the purposes of the society, and to adopt such by-laws for
its government as may not be inconsistent with law or this charter.
xxxx
Sec. 3. The said society shall be operated under the direction of its officers, in
accordance with its by-laws in force, and this charter.
xxxx
Sec. 6. The principal office of the society shall be kept in the city of Manila,
and the society shall have full power to locate and establish branch offices of
the society wherever it may deem advisable in the Philippine Islands, such
branch offices to be under the supervision and control of the principal office.
Third. The employees of the petitioner are registered and covered by the
Social Security System at the latters initiative, and not through the Government
Service Insurance System, which should be the case if the employees are
considered government employees. This is another indication of petitioners
nature as a private entity. Section 1 of Republic Act No. 1161, as amended by
Republic Act No. 8282, otherwise known as the Social Security Act of 1997,
defines the employer:
Employer Any person, natural or juridical, domestic or foreign, who carries on
in the Philippines any trade, business, industry, undertaking or activity of any
kind and uses the services of another person who is under his orders as
regards the employment, except the Government and any of its political
subdivisions, branches or instrumentalities, including corporations owned or
controlled by the Government: Provided, That a self-employed person shall be
both employee and employer at the same time. (Emphasis supplied)
Fourth. The respondents contend that the petitioner is a body politic because
its primary purpose is to secure the protection and welfare of animals which,
in turn, redounds to the public good.
This argument, is, at best, specious. The fact that a certain juridical entity is
impressed with public interest does not, by that circumstance alone, make the
entity a public corporation, inasmuch as a corporation may be private although
its charter contains provisions of a public character, incorporated solely for the
public good. This class of corporations may be considered quasi-public
corporations, which are private corporations that render public service, supply
public wants,[21] or pursue other eleemosynary objectives. While purposely
organized for the gain or benefit of its members, they are required by law to
discharge functions for the public benefit. Examples of these corporations are
utility,[22] railroad, warehouse, telegraph, telephone, water supply
corporations and transportation companies.[23] It must be stressed that a
quasi-public corporation is a species of private corporations, but the qualifying
factor is the type of service the former renders to the public: if it performs a
public service, then it becomes a quasi-public corporation.[24]
Authorities are of the view that the purpose alone of the corporation cannot be
taken as a safe guide, for the fact is that almost all corporations are nowadays
created to promote the interest, good, or convenience of the public. A bank,
for example, is a private corporation; yet, it is created for a public benefit.
Private schools and universities are likewise private corporations; and yet, they
are rendering public service. Private hospitals and wards are charged with
heavy social responsibilities. More so with all common carriers. On the other
hand, there may exist a public corporation even if it is endowed with gifts or
donations from private individuals.
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. Applying the above
test, provinces, chartered cities, and barangays can best exemplify public
corporations. They are created by the State as its own device and agency for
the accomplishment of parts of its own public works.[25]
It is clear that the amendments introduced by C.A. No. 148 revoked the powers
of the petitioner to arrest offenders of animal welfare laws and the power to
serve processes in connection therewith.
Fifth. The respondents argue that since the charter of the petitioner requires
the latter to render periodic reports to the Civil Governor, whose functions have
been inherited by the President, the petitioner is, therefore, a government
instrumentality.
This contention is inconclusive. By virtue of the fiction that all corporations owe
their very existence and powers to the State, the reportorial requirement is
applicable to all corporations of whatever nature, whether they are public,
quasi-public, or private corporationsas creatures of the State, there is a
reserved right in the legislature to investigate the activities of a corporation to
determine whether it acted within its powers. In other words, the reportorial
requirement is the principal means by which the State may see to it that its
creature acted according to the powers and functions conferred upon it. These
principles were extensively discussed in Bataan Shipyard & Engineering Co.,
Inc. v. Presidential Commission on Good Government.[26] Here, the Court, in
holding that the subject corporation could not invoke the right against self-
incrimination whenever the State demanded the production of its corporate
books and papers, extensively discussed the purpose of reportorial
requirements, viz:
x x x The corporation is a creature of the state. It is presumed to be
incorporated for the benefit of the public. It received certain special privileges
and franchises, and holds them subject to the laws of the state and the
limitations of its charter. Its powers are limited by law. It can make no contract
not authorized by its charter. Its rights to act as a corporation are only
preserved to it so long as it obeys the laws of its creation. There is a reserve[d]
right in the legislature to investigate its contracts and find out whether it has
exceeded its powers. It would be a strange anomaly to hold that a state, having
chartered a corporation to make use of certain franchises, could not, in the
exercise of sovereignty, inquire how these franchises had been employed, and
whether they had been abused, and demand the production of the corporate
books and papers for that purpose. The defense amounts to this, that an officer
of the corporation which is charged with a criminal violation of the statute may
plead the criminality of such corporation as a refusal to produce its books. To
state this proposition is to answer it. While an individual may lawfully refuse to
answer incriminating questions unless protected by an immunity statute, it
does not follow that a corporation vested with special privileges and franchises
may refuse to show its hand when charged with an abuse of such privileges.
(Wilson v. United States, 55 Law Ed., 771, 780.)[27]
WHEREFORE, the petition is GRANTED. Petitioner is DECLARED a private
domestic corporation subject to the jurisdiction of the Securities and Exchange
Commission. The respondents are ENJOINED from investigating, examining
and auditing the petitioner's fiscal and financial affairs.
SO ORDERED.
 4. North Cotabato v. Govt of the PH Peace Panel
G.R. No. 183591 October 14, 2008
THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR
JESUS SACDALAN and/or VICE-GOVERNOR EMMANUEL PIOL, for and
in his own behalf, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO
GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA,
MARK RYAN SULLIVAN and/or GEN. HERMOGENES ESPERON, JR., the
latter in his capacity as the present and duly-appointed Presidential Adviser on
the Peace Process (OPAPP) or the so-called Office of the Presidential Adviser
on the Peace Process, respondents.
x--------------------------------------------x
G.R. No. 183752 October 14, 2008
CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. CELSO L.
LOBREGAT, City Mayor of Zamboanga, and in his personal capacity as
resident of the City of Zamboanga, Rep. MA. ISABELLE G. CLIMACO, District
1, and Rep. ERICO BASILIO A. FABIAN, District 2, City of Zamboanga,
petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
NEGOTIATING PANEL (GRP), as represented by RODOLFO C. GARCIA,
LEAH ARMAMENTO, SEDFREY CANDELARIA, MARK RYAN SULLIVAN
and HERMOGENES ESPERON, in his capacity as the Presidential Adviser on
Peace Process, respondents.
x--------------------------------------------x
G.R. No. 183893 October 14, 2008
THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE
LLUCH CRUZ, petitioner,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO
GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA,
MARK RYAN SULLIVAN; GEN. HERMOGENES ESPERON, JR., in his
capacity as the present and duly appointed Presidential Adviser on the Peace
Process; and/or SEC. EDUARDO ERMITA, in his capacity as Executive
Secretary. respondents.
x--------------------------------------------x
G.R. No. 183951 October 14, 2008
THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as
represented by HON. ROLANDO E. YEBES, in his capacity as Provincial
Governor, HON. FRANCIS H. OLVIS, in his capacity as Vice-Governor and
Presiding Officer of the Sangguniang Panlalawigan, HON. CECILIA
JALOSJOS CARREON, Congresswoman, 1st Congressional District, HON.
CESAR G. JALOSJOS, Congressman, 3rd Congressional District, and
Members of the Sangguniang Panlalawigan of the Province of Zamboanga del
Norte, namely, HON. SETH FREDERICK P. JALOSJOS, HON. FERNANDO
R. CABIGON, JR., HON. ULDARICO M. MEJORADA II, HON. EDIONAR M.
ZAMORAS, HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON.
FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON.
NORBIDEIRI B. EDDING, HON. ANECITO S. DARUNDAY, HON. ANGELICA
J. CARREON and HON. LUZVIMINDA E. TORRINO, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
NEGOTIATING PANEL [GRP], as represented by HON. RODOLFO C.
GARCIA and HON. HERMOGENES ESPERON, in his capacity as the
Presidential Adviser of Peace Process, respondents.
x--------------------------------------------x
G.R. No. 183962 October 14, 2008
ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L. PIMENTEL
III, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
NEGOTIATING PANEL, represented by its Chairman RODOLFO C. GARCIA,
and the MORO ISLAMIC LIBERATION FRONT PEACE NEGOTIATING
PANEL, represented by its Chairman MOHAGHER IQBAL, respondents.
x--------------------------------------------x
FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-in-
intervention.
x--------------------------------------------x
SEN. MANUEL A. ROXAS, petitioners-in-intervention.
x--------------------------------------------x

MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL
N. DEANO, petitioners-in-intervention,
x--------------------------------------------x
THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR
CHERRYLYN P. SANTOS-AKBAR, petitioners-in-intervention.
x--------------------------------------------x
THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T.
MANGUDADATU, in his capacity as Provincial Governor and a resident of the
Province of Sultan Kudarat, petitioner-in-intervention.
x-------------------------------------------x
RUY ELIAS LOPEZ, for and in his own behalf and on behalf of Indigenous
Peoples in Mindanao Not Belonging to the MILF, petitioner-in-intervention.
x--------------------------------------------x
CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO C.
ALISUAG and RICHALEX G. JAGMIS, as citizens and residents of Palawan,
petitioners-in-intervention.
x--------------------------------------------x
MARINO RIDAO and KISIN BUXANI, petitioners-in-intervention.
x--------------------------------------------x
MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF), respondent-
in-intervention.
x--------------------------------------------x
MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT
(MMMPD), respondent-in-intervention.
x--------------------------------------------x
DECISION
CARPIO MORALES, J.:
Subject of these consolidated cases is the extent of the powers of the
President in pursuing the peace process. While the facts surrounding this
controversy center on the armed conflict in Mindanao between the government
and the Moro Islamic Liberation Front (MILF), the legal issue involved has a
bearing on all areas in the country where there has been a long-standing
armed conflict. Yet again, the Court is tasked to perform a delicate balancing
act. It must uncompromisingly delineate the bounds within which the President
may lawfully exercise her discretion, but it must do so in strict adherence to
the Constitution, lest its ruling unduly restricts the freedom of action vested by
that same Constitution in the Chief Executive precisely to enable her to pursue
the peace process effectively.
I. FACTUAL ANTECEDENTS OF THE PETITIONS
On August 5, 2008, the Government of the Republic of the Philippines (GRP)
and the MILF, through the Chairpersons of their respective peace negotiating
panels, were scheduled to sign a Memorandum of Agreement on the Ancestral
Domain (MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of
2001 in Kuala Lumpur, Malaysia.
The MILF is a rebel group which was established in March 1984 when, under
the leadership of the late Salamat Hashim, it splintered from the Moro National
Liberation Front (MNLF) then headed by Nur Misuari, on the ground, among
others, of what Salamat perceived to be the manipulation of the MNLF away
from an Islamic basis towards Marxist-Maoist orientations.1
The signing of the MOA-AD between the GRP and the MILF was not to
materialize, however, for upon motion of petitioners, specifically those who
filed their cases before the scheduled signing of the MOA-AD, this Court
issued a Temporary Restraining Order enjoining the GRP from signing the
same.
The MOA-AD was preceded by a long process of negotiation and the
concluding of several prior agreements between the two parties beginning in
1996, when the GRP-MILF peace negotiations began. On July 18, 1997, the
GRP and MILF Peace Panels signed the Agreement on General Cessation of
Hostilities. The following year, they signed the General Framework of
Agreement of Intent on August 27, 1998.
The Solicitor General, who represents respondents, summarizes the MOA-AD
by stating that the same contained, among others, the commitment of the
parties to pursue peace negotiations, protect and respect human rights,
negotiate with sincerity in the resolution and pacific settlement of the conflict,
and refrain from the use of threat or force to attain undue advantage while the
peace negotiations on the substantive agenda are on-going.2
Early on, however, it was evident that there was not going to be any smooth
sailing in the GRP-MILF peace process. Towards the end of 1999 up to early
2000, the MILF attacked a number of municipalities in Central Mindanao and,
in March 2000, it took control of the town hall of Kauswagan, Lanao del Norte.3
In response, then President Joseph Estrada declared and carried out an "all-
out-war" against the MILF.
When President Gloria Macapagal-Arroyo assumed office, the military
offensive against the MILF was suspended and the government sought a
resumption of the peace talks. The MILF, according to a leading MILF member,
initially responded with deep reservation, but when President Arroyo asked the
Government of Malaysia through Prime Minister Mahathir Mohammad to help
convince the MILF to return to the negotiating table, the MILF convened its
Central Committee to seriously discuss the matter and, eventually, decided to
meet with the GRP.4
The parties met in Kuala Lumpur on March 24, 2001, with the talks being
facilitated by the Malaysian government, the parties signing on the same date
the Agreement on the General Framework for the Resumption of Peace Talks
Between the GRP and the MILF. The MILF thereafter suspended all its military
actions.5
Formal peace talks between the parties were held in Tripoli, Libya from June
20-22, 2001, the outcome of which was the GRP-MILF Tripoli Agreement on
Peace (Tripoli Agreement 2001) containing the basic principles and agenda
on the following aspects of the negotiation: Security Aspect, Rehabilitation
Aspect, and Ancestral Domain Aspect. With regard to the Ancestral Domain
Aspect, the parties in Tripoli Agreement 2001 simply agreed "that the same be
discussed further by the Parties in their next meeting."
A second round of peace talks was held in Cyberjaya, Malaysia on August 5-
7, 2001 which ended with the signing of the Implementing Guidelines on the
Security Aspect of the Tripoli Agreement 2001 leading to a ceasefire status
between the parties. This was followed by the Implementing Guidelines on the
Humanitarian Rehabilitation and Development Aspects of the Tripoli
Agreement 2001, which was signed on May 7, 2002 at Putrajaya, Malaysia.
Nonetheless, there were many incidence of violence between government
forces and the MILF from 2002 to 2003.
Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13,
2003 and he was replaced by Al Haj Murad, who was then the chief peace
negotiator of the MILF. Murad's position as chief peace negotiator was taken
over by Mohagher Iqbal.6
In 2005, several exploratory talks were held between the parties in Kuala
Lumpur, eventually leading to the crafting of the draft MOA-AD in its final form,
which, as mentioned, was set to be signed last August 5, 2008.
II. STATEMENT OF THE PROCEEDINGS
Before the Court is what is perhaps the most contentious "consensus" ever
embodied in an instrument - the MOA-AD which is assailed principally by the
present petitions bearing docket numbers 183591, 183752, 183893, 183951
and 183962.
Commonly impleaded as respondents are the GRP Peace Panel on Ancestral
Domain7 and the Presidential Adviser on the Peace Process (PAPP)
Hermogenes Esperon, Jr.
On July 23, 2008, the Province of North Cotabato8 and Vice-Governor
Emmanuel Piol filed a petition, docketed as G.R. No. 183591, for Mandamus
and Prohibition with Prayer for the Issuance of Writ of Preliminary Injunction
and Temporary Restraining Order.9 Invoking the right to information on
matters of public concern, petitioners seek to compel respondents to disclose
and furnish them the complete and official copies of the MOA-AD including its
attachments, and to prohibit the slated signing of the MOA-AD, pending the
disclosure of the contents of the MOA-AD and the holding of a public
consultation thereon. Supplementarily, petitioners pray that the MOA-AD be
declared unconstitutional.10
This initial petition was followed by another one, docketed as G.R. No. 183752,
also for Mandamus and Prohibition11 filed by the City of Zamboanga,12 Mayor
Celso Lobregat, Rep. Ma. Isabelle Climaco and Rep. Erico Basilio Fabian who
likewise pray for similar injunctive reliefs. Petitioners herein moreover pray that
the City of Zamboanga be excluded from the Bangsamoro Homeland and/or
Bangsamoro Juridical Entity and, in the alternative, that the MOA-AD be
declared null and void.
By Resolution of August 4, 2008, the Court issued a Temporary Restraining
Order commanding and directing public respondents and their agents to cease
and desist from formally signing the MOA-AD.13 The Court also required the
Solicitor General to submit to the Court and petitioners the official copy of the
final draft of the MOA-AD,14 to which she complied.15
Meanwhile, the City of Iligan16 filed a petition for Injunction and/or Declaratory
Relief, docketed as G.R. No. 183893, praying that respondents be enjoined
from signing the MOA-AD or, if the same had already been signed, from
implementing the same, and that the MOA-AD be declared unconstitutional.
Petitioners herein additionally implead Executive Secretary Eduardo Ermita as
respondent.

The Province of Zamboanga del Norte,17 Governor Rolando Yebes, Vice-
Governor Francis Olvis, Rep. Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos,
and the members18 of the Sangguniang Panlalawigan of Zamboanga del
Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and
Prohibition,19 docketed as G.R. No. 183951. They pray, inter alia, that the
MOA-AD be declared null and void and without operative effect, and that
respondents be enjoined from executing the MOA-AD.
On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel
III filed a petition for Prohibition,20 docketed as G.R. No. 183962, praying for
a judgment prohibiting and permanently enjoining respondents from formally
signing and executing the MOA-AD and or any other agreement derived
therefrom or similar thereto, and nullifying the MOA-AD for being
unconstitutional and illegal. Petitioners herein additionally implead as
respondent the MILF Peace Negotiating Panel represented by its Chairman
Mohagher Iqbal.
Various parties moved to intervene and were granted leave of court to file their
petitions-/comments-in-intervention. Petitioners-in-Intervention include
Senator Manuel A. Roxas, former Senate President Franklin Drilon and Atty.
Adel Tamano, the City of Isabela21 and Mayor Cherrylyn Santos-Akbar, the
Province of Sultan Kudarat22 and Gov. Suharto Mangudadatu, the
Municipality of Linamon in Lanao del Norte,23 Ruy Elias Lopez of Davao City
and of the Bagobo tribe, Sangguniang Panlungsod member Marino Ridao and
businessman Kisin Buxani, both of Cotabato City; and lawyers Carlo Gomez,
Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of Palawan
City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim
Multi-Sectoral Movement for Peace and Development (MMMPD) filed their
respective Comments-in-Intervention.
By subsequent Resolutions, the Court ordered the consolidation of the
petitions. Respondents filed Comments on the petitions, while some of
petitioners submitted their respective Replies.
Respondents, by Manifestation and Motion of August 19, 2008, stated that the
Executive Department shall thoroughly review the MOA-AD and pursue further
negotiations to address the issues hurled against it, and thus moved to dismiss
the cases. In the succeeding exchange of pleadings, respondents' motion was
met with vigorous opposition from petitioners.
The cases were heard on oral argument on August 15, 22 and 29, 2008 that
tackled the following principal issues:
1. Whether the petitions have become moot and academic
(i) insofar as the mandamus aspect is concerned, in view of the disclosure of
official copies of the final draft of the Memorandum of Agreement (MOA); and
(ii) insofar as the prohibition aspect involving the Local Government Units is
concerned, if it is considered that consultation has become fait accompli with
the finalization of the draft;
2. Whether the constitutionality and the legality of the MOA is ripe for
adjudication;
3. Whether respondent Government of the Republic of the Philippines Peace
Panel committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it negotiated and initiated the MOA vis--vis ISSUES Nos. 4
and 5;
4. Whether there is a violation of the people's right to information on matters
of public concern (1987 Constitution, Article III, Sec. 7) under a state policy of
full disclosure of all its transactions involving public interest (1987 Constitution,
Article II, Sec. 28) including public consultation under Republic Act No. 7160
(LOCAL GOVERNMENT CODE OF 1991)[;]
If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules
of Civil Procedure is an appropriate remedy;
5. Whether by signing the MOA, the Government of the Republic of the
Philippines would be BINDING itself
a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a
separate state, or a juridical, territorial or political subdivision not recognized
by law;
b) to revise or amend the Constitution and existing laws to conform to the MOA;
c) to concede to or recognize the claim of the Moro Islamic Liberation Front for
ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS
PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII
(DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;]
If in the affirmative, whether the Executive Branch has the authority to so bind
the Government of the Republic of the Philippines;
6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of
Zamboanga, Iligan and Isabela, and the Municipality of Linamon, Lanao del
Norte in/from the areas covered by the projected Bangsamoro Homeland is a
justiciable question; and
7. Whether desistance from signing the MOA derogates any prior valid
commitments of the Government of the Republic of the Philippines.24
The Court, thereafter, ordered the parties to submit their respective
Memoranda. Most of the parties submitted their memoranda on time.
III. OVERVIEW OF THE MOA-AD
As a necessary backdrop to the consideration of the objections raised in the
subject five petitions and six petitions-in-intervention against the MOA-AD, as
well as the two comments-in-intervention in favor of the MOA-AD, the Court
takes an overview of the MOA.
The MOA-AD identifies the Parties to it as the GRP and the MILF.
Under the heading "Terms of Reference" (TOR), the MOA-AD includes not
only four earlier agreements between the GRP and MILF, but also two
agreements between the GRP and the MNLF: the 1976 Tripoli Agreement, and
the Final Peace Agreement on the Implementation of the 1976 Tripoli
Agreement, signed on September 2, 1996 during the administration of
President Fidel Ramos.
The MOA-AD also identifies as TOR two local statutes - the organic act for the
Autonomous Region in Muslim Mindanao (ARMM)25 and the Indigenous
Peoples Rights Act (IPRA),26 and several international law instruments - the
ILO Convention No. 169 Concerning Indigenous and Tribal Peoples in
Independent Countries in relation to the UN Declaration on the Rights of the
Indigenous Peoples, and the UN Charter, among others.
The MOA-AD includes as a final TOR the generic category of "compact rights
entrenchment emanating from the regime of dar-ul-mua'hada (or territory
under compact) and dar-ul-sulh (or territory under peace agreement) that
partakes the nature of a treaty device."
During the height of the Muslim Empire, early Muslim jurists tended to see the
world through a simple dichotomy: there was the dar-ul-Islam (the Abode of
Islam) and dar-ul-harb (the Abode of War). The first referred to those lands
where Islamic laws held sway, while the second denoted those lands where
Muslims were persecuted or where Muslim laws were outlawed or
ineffective.27 This way of viewing the world, however, became more complex
through the centuries as the Islamic world became part of the international
community of nations.
As Muslim States entered into treaties with their neighbors, even with distant
States and inter-governmental organizations, the classical division of the world
into dar-ul-Islam and dar-ul-harb eventually lost its meaning. New terms were
drawn up to describe novel ways of perceiving non-Muslim territories. For
instance, areas like dar-ul-mua'hada (land of compact) and dar-ul-sulh (land
of treaty) referred to countries which, though under a secular regime,
maintained peaceful and cooperative relations with Muslim States, having
been bound to each other by treaty or agreement. Dar-ul-aman (land of order),
on the other hand, referred to countries which, though not bound by treaty with
Muslim States, maintained freedom of religion for Muslims.28
It thus appears that the "compact rights entrenchment" emanating from the
regime of dar-ul-mua'hada and dar-ul-sulh simply refers to all other
agreements between the MILF and the Philippine government - the Philippines
being the land of compact and peace agreement - that partake of the nature
of a treaty device, "treaty" being broadly defined as "any solemn agreement in
writing that sets out understandings, obligations, and benefits for both parties
which provides for a framework that elaborates the principles declared in the
[MOA-AD]."29
The MOA-AD states that the Parties "HAVE AGREED AND
ACKNOWLEDGED AS FOLLOWS," and starts with its main body.
The main body of the MOA-AD is divided into four strands, namely, Concepts
and Principles, Territory, Resources, and Governance.
A. CONCEPTS AND PRINCIPLES
This strand begins with the statement that it is "the birthright of all Moros and
all Indigenous peoples of Mindanao to identify themselves and be accepted as
Bangsamoros.'" It defines "Bangsamoro people" as the natives or original
inhabitants of Mindanao and its adjacent islands including Palawan and the
Sulu archipelago at the time of conquest or colonization, and their descendants
whether mixed or of full blood, including their spouses.30
Thus, the concept of "Bangsamoro," as defined in this strand of the MOA-AD,
includes not only "Moros" as traditionally understood even by Muslims,31 but
all indigenous peoples of Mindanao and its adjacent islands. The MOA-AD
adds that the freedom of choice of indigenous peoples shall be respected.
What this freedom of choice consists in has not been specifically defined.
The MOA-AD proceeds to refer to the "Bangsamoro homeland," the ownership
of which is vested exclusively in the Bangsamoro people by virtue of their prior
rights of occupation.32 Both parties to the MOA-AD acknowledge that
ancestral domain does not form part of the public domain.33
The Bangsamoro people are acknowledged as having the right to self-
governance, which right is said to be rooted on ancestral territoriality exercised
originally under the suzerain authority of their sultanates and the Pat a
Pangampong ku Ranaw. The sultanates were described as states or
"karajaan/kadatuan" resembling a body politic endowed with all the elements
of a nation-state in the modern sense.34
The MOA-AD thus grounds the right to self-governance of the Bangsamoro
people on the past suzerain authority of the sultanates. As gathered, the
territory defined as the Bangsamoro homeland was ruled by several sultanates
and, specifically in the case of the Maranao, by the Pat a Pangampong ku
Ranaw, a confederation of independent principalities (pangampong) each
ruled by datus and sultans, none of whom was supreme over the others.35
The MOA-AD goes on to describe the Bangsamoro people as "the First Nation'
with defined territory and with a system of government having entered into
treaties of amity and commerce with foreign nations."
The term "First Nation" is of Canadian origin referring to the indigenous
peoples of that territory, particularly those known as Indians. In Canada, each
of these indigenous peoples is equally entitled to be called "First Nation,"
hence, all of them are usually described collectively by the plural "First
Nations."36 To that extent, the MOA-AD, by identifying the Bangsamoro
people as "the First Nation" - suggesting its exclusive entitlement to that
designation - departs from the Canadian usage of the term.
The MOA-AD then mentions for the first time the "Bangsamoro Juridical Entity"
(BJE) to which it grants the authority and jurisdiction over the Ancestral
Domain and Ancestral Lands of the Bangsamoro.37
B. TERRITORY
The territory of the Bangsamoro homeland is described as the land mass as
well as the maritime, terrestrial, fluvial and alluvial domains, including the aerial
domain and the atmospheric space above it, embracing the Mindanao-Sulu-
Palawan geographic region.38
More specifically, the core of the BJE is defined as the present geographic
area of the ARMM - thus constituting the following areas: Lanao del Sur,
Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi City. Significantly, this
core also includes certain municipalities of Lanao del Norte that voted for
inclusion in the ARMM in the 2001 plebiscite.39
Outside of this core, the BJE is to cover other provinces, cities, municipalities
and barangays, which are grouped into two categories, Category A and
Category B. Each of these areas is to be subjected to a plebiscite to be held
on different dates, years apart from each other. Thus, Category A areas are to
be subjected to a plebiscite not later than twelve (12) months following the
signing of the MOA-AD.40 Category B areas, also called "Special Intervention
Areas," on the other hand, are to be subjected to a plebiscite twenty-five (25)
years from the signing of a separate agreement - the Comprehensive
Compact.41
The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over
all natural resources within its "internal waters," defined as extending fifteen
(15) kilometers from the coastline of the BJE area;42 that the BJE shall also
have "territorial waters," which shall stretch beyond the BJE internal waters up
to the baselines of the Republic of the Philippines (RP) south east and south
west of mainland Mindanao; and that within these territorial waters, the BJE
and the "Central Government" (used interchangeably with RP) shall exercise
joint jurisdiction, authority and management over all natural resources.43
Notably, the jurisdiction over the internal waters is not similarly described as
"joint."
The MOA-AD further provides for the sharing of minerals on the territorial
waters between the Central Government and the BJE, in favor of the latter,
through production sharing and economic cooperation agreement.44 The
activities which the Parties are allowed to conduct on the territorial waters are
enumerated, among which are the exploration and utilization of natural
resources, regulation of shipping and fishing activities, and the enforcement of
police and safety measures.45 There is no similar provision on the sharing of
minerals and allowed activities with respect to the internal waters of the BJE.
C. RESOURCES
The MOA-AD states that the BJE is free to enter into any economic
cooperation and trade relations with foreign countries and shall have the option
to establish trade missions in those countries. Such relationships and
understandings, however, are not to include aggression against the GRP. The
BJE may also enter into environmental cooperation agreements.46
The external defense of the BJE is to remain the duty and obligation of the
Central Government. The Central Government is also bound to "take
necessary steps to ensure the BJE's participation in international meetings and
events" like those of the ASEAN and the specialized agencies of the UN. The
BJE is to be entitled to participate in Philippine official missions and
delegations for the negotiation of border agreements or protocols for
environmental protection and equitable sharing of incomes and revenues
involving the bodies of water adjacent to or between the islands forming part
of the ancestral domain.47
With regard to the right of exploring for, producing, and obtaining all potential
sources of energy, petroleum, fossil fuel, mineral oil and natural gas, the
jurisdiction and control thereon is to be vested in the BJE "as the party having
control within its territorial jurisdiction." This right carries the proviso that, "in
times of national emergency, when public interest so requires," the Central
Government may, for a fixed period and under reasonable terms as may be
agreed upon by both Parties, assume or direct the operation of such
resources.48
The sharing between the Central Government and the BJE of total production
pertaining to natural resources is to be 75:25 in favor of the BJE.49
The MOA-AD provides that legitimate grievances of the Bangsamoro people
arising from any unjust dispossession of their territorial and proprietary rights,
customary land tenures, or their marginalization shall be acknowledged.
Whenever restoration is no longer possible, reparation is to be in such form as
mutually determined by the Parties.50
The BJE may modify or cancel the forest concessions, timber licenses,
contracts or agreements, mining concessions, Mineral Production and Sharing
Agreements (MPSA), Industrial Forest Management Agreements (IFMA), and
other land tenure instruments granted by the Philippine Government, including
those issued by the present ARMM.51
D. GOVERNANCE
The MOA-AD binds the Parties to invite a multinational third-party to observe
and monitor the implementation of the Comprehensive Compact. This compact
is to embody the "details for the effective enforcement" and "the mechanisms
and modalities for the actual implementation" of the MOA-AD. The MOA-AD
explicitly provides that the participation of the third party shall not in any way
affect the status of the relationship between the Central Government and the
BJE.52
The "associative" relationship
between the Central Government
and the BJE
The MOA-AD describes the relationship of the Central Government and the
BJE as "associative," characterized by shared authority and responsibility. And
it states that the structure of governance is to be based on executive,
legislative, judicial, and administrative institutions with defined powers and
functions in the Comprehensive Compact.
The MOA-AD provides that its provisions requiring "amendments to the
existing legal framework" shall take effect upon signing of the Comprehensive
Compact and upon effecting the aforesaid amendments, with due regard to
the non-derogation of prior agreements and within the stipulated timeframe to
be contained in the Comprehensive Compact. As will be discussed later, much
of the present controversy hangs on the legality of this provision.
The BJE is granted the power to build, develop and maintain its own institutions
inclusive of civil service, electoral, financial and banking, education, legislation,
legal, economic, police and internal security force, judicial system and
correctional institutions, the details of which shall be discussed in the
negotiation of the comprehensive compact.
As stated early on, the MOA-AD was set to be signed on August 5, 2008 by
Rodolfo Garcia and Mohagher Iqbal, Chairpersons of the Peace Negotiating
Panels of the GRP and the MILF, respectively. Notably, the penultimate
paragraph of the MOA-AD identifies the signatories as "the representatives of
the Parties," meaning the GRP and MILF themselves, and not merely of the
negotiating panels.53 In addition, the signature page of the MOA-AD states
that it is "WITNESSED BY" Datuk Othman Bin Abd Razak, Special Adviser to
the Prime Minister of Malaysia, "ENDORSED BY" Ambassador Sayed
Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary
General and Special Envoy for Peace Process in Southern Philippines, and
SIGNED "IN THE PRESENCE OF" Dr. Albert G. Romulo, Secretary of Foreign
Affairs of RP and Dato' Seri Utama Dr. Rais Bin Yatim, Minister of Foreign
Affairs, Malaysia, all of whom were scheduled to sign the Agreement last
August 5, 2008.
Annexed to the MOA-AD are two documents containing the respective lists
cum maps of the provinces, municipalities, and barangays under Categories
A and B earlier mentioned in the discussion on the strand on TERRITORY.
IV. PROCEDURAL ISSUES
A. RIPENESS
The power of judicial review is limited to actual cases or controversies.54
Courts decline to issue advisory opinions or to resolve hypothetical or feigned
problems, or mere academic questions.55 The limitation of the power of
judicial review to actual cases and controversies defines the role assigned to
the judiciary in a tripartite allocation of power, to assure that the courts will not
intrude into areas committed to the other branches of government.56
An actual case or controversy involves a conflict of legal rights, an assertion
of opposite legal claims, susceptible of judicial resolution as distinguished from
a hypothetical or abstract difference or dispute. There must be a contrariety of
legal rights that can be interpreted and enforced on the basis of existing law
and jurisprudence.57 The Court can decide the constitutionality of an act or
treaty only when a proper case between opposing parties is submitted for
judicial determination.58
Related to the requirement of an actual case or controversy is the requirement
of ripeness. A question is ripe for adjudication when the act being challenged
has had a direct adverse effect on the individual challenging it.59 For a case
to be considered ripe for adjudication, it is a prerequisite that something had
then been accomplished or performed by either branch before a court may
come into the picture,60 and the petitioner must allege the existence of an
immediate or threatened injury to itself as a result of the challenged action.61
He must show that he has sustained or is immediately in danger of sustaining
some direct injury as a result of the act complained of.62
The Solicitor General argues that there is no justiciable controversy that is ripe
for judicial review in the present petitions, reasoning that
The unsigned MOA-AD is simply a list of consensus points subject to further
negotiations and legislative enactments as well as constitutional processes
aimed at attaining a final peaceful agreement. Simply put, the MOA-AD
remains to be a proposal that does not automatically create legally
demandable rights and obligations until the list of operative acts required have
been duly complied with. x x x
xxxx
In the cases at bar, it is respectfully submitted that this Honorable Court has
no authority to pass upon issues based on hypothetical or feigned
constitutional problems or interests with no concrete bases. Considering the
preliminary character of the MOA-AD, there are no concrete acts that could
possibly violate petitioners' and intervenors' rights since the acts complained
of are mere contemplated steps toward the formulation of a final peace
agreement. Plainly, petitioners and intervenors' perceived injury, if at all, is
merely imaginary and illusory apart from being unfounded and based on mere
conjectures. (Underscoring supplied)
The Solicitor General cites63 the following provisions of the MOA-AD:
TERRITORY
xxxx
2. Toward this end, the Parties enter into the following stipulations:
xxxx
d. Without derogating from the requirements of prior agreements, the
Government stipulates to conduct and deliver, using all possible legal
measures, within twelve (12) months following the signing of the MOA-AD, a
plebiscite covering the areas as enumerated in the list and depicted in the map
as Category A attached herein (the "Annex"). The Annex constitutes an
integral part of this framework agreement. Toward this end, the Parties shall
endeavor to complete the negotiations and resolve all outstanding issues on
the Comprehensive Compact within fifteen (15) months from the signing of the
MOA-AD.
xxxx
GOVERNANCE
xxxx
7. The Parties agree that mechanisms and modalities for the actual
implementation of this MOA-AD shall be spelt out in the Comprehensive
Compact to mutually take such steps to enable it to occur effectively.
Any provisions of the MOA-AD requiring amendments to the existing legal
framework shall come into force upon the signing of a Comprehensive
Compact and upon effecting the necessary changes to the legal framework
with due regard to non-derogation of prior agreements and within the stipulated
timeframe to be contained in the Comprehensive Compact.64 (Underscoring
supplied)
The Solicitor General's arguments fail to persuade.
Concrete acts under the MOA-AD are not necessary to render the present
controversy ripe. In Pimentel, Jr. v. Aguirre,65 this Court held:
x x x [B]y the mere enactment of the questioned law or the approval of the
challenged action, the dispute is said to have ripened into a judicial controversy
even without any other overt act. Indeed, even a singular violation of the
Constitution and/or the law is enough to awaken judicial duty.
xxxx
By the same token, when an act of the President, who in our constitutional
scheme is a coequal of Congress, is seriously alleged to have infringed the
Constitution and the laws x x x settling the dispute becomes the duty and the
responsibility of the courts.66
In Santa Fe Independent School District v. Doe,67 the United States Supreme
Court held that the challenge to the constitutionality of the school's policy
allowing student-led prayers and speeches before games was ripe for
adjudication, even if no public prayer had yet been led under the policy,
because the policy was being challenged as unconstitutional on its face.68
That the law or act in question is not yet effective does not negate ripeness.
For example, in New York v. United States,69 decided in 1992, the United
States Supreme Court held that the action by the State of New York
challenging the provisions of the Low-Level Radioactive Waste Policy Act was
ripe for adjudication even if the questioned provision was not to take effect until
January 1, 1996, because the parties agreed that New York had to take
immediate action to avoid the provision's consequences.70
The present petitions pray for Certiorari,71 Prohibition, and Mandamus.
Certiorari and Prohibition are remedies granted by law when any tribunal,
board or officer has acted, in the case of certiorari, or is proceeding, in the
case of prohibition, without or in excess of its jurisdiction or with grave abuse
of discretion amounting to lack or excess of jurisdiction.72 Mandamus is a
remedy granted by law when any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins
as a duty resulting from an office, trust, or station, or unlawfully excludes
another from the use or enjoyment of a right or office to which such other is
entitled.73 Certiorari, Mandamus and Prohibition are appropriate remedies to
raise constitutional issues and to review and/or prohibit/nullify, when proper,
acts of legislative and executive officials.74
The authority of the GRP Negotiating Panel is defined by Executive Order No.
3 (E.O. No. 3), issued on February 28, 2001.75 The said executive order
requires that "[t]he government's policy framework for peace, including the
systematic approach and the administrative structure for carrying out the
comprehensive peace process x x x be governed by this Executive Order."76
The present petitions allege that respondents GRP Panel and PAPP Esperon
drafted the terms of the MOA-AD without consulting the local government units
or communities affected, nor informing them of the proceedings. As will be
discussed in greater detail later, such omission, by itself, constitutes a
departure by respondents from their mandate under E.O. No. 3.
Furthermore, the petitions allege that the provisions of the MOA-AD violate the
Constitution. The MOA-AD provides that "any provisions of the MOA-AD
requiring amendments to the existing legal framework shall come into force
upon the signing of a Comprehensive Compact and upon effecting the
necessary changes to the legal framework," implying an amendment of the
Constitution to accommodate the MOA-AD. This stipulation, in effect,
guaranteed to the MILF the amendment of the Constitution. Such act
constitutes another violation of its authority. Again, these points will be
discussed in more detail later.
As the petitions allege acts or omissions on the part of respondent that exceed
their authority, by violating their duties under E.O. No. 3 and the provisions of
the Constitution and statutes, the petitions make a prima facie case for
Certiorari, Prohibition, and Mandamus, and an actual case or controversy ripe
for adjudication exists. When an act of a branch of government is seriously
alleged to have infringed the Constitution, it becomes not only the right but in
fact the duty of the judiciary to settle the dispute.77
B. LOCUS STANDI
For a party to have locus standi, one must allege "such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court so largely depends
for illumination of difficult constitutional questions."78
Because constitutional cases are often public actions in which the relief sought
is likely to affect other persons, a preliminary question frequently arises as to
this interest in the constitutional question raised.79
When suing as a citizen, the person complaining must allege that he has been
or is about to be denied some right or privilege to which he is lawfully entitled
or that he is about to be subjected to some burdens or penalties by reason of
the statute or act complained of.80 When the issue concerns a public right, it
is sufficient that the petitioner is a citizen and has an interest in the execution
of the laws.81
For a taxpayer, one is allowed to sue where there is an assertion that public
funds are illegally disbursed or deflected to an illegal purpose, or that there is
a wastage of public funds through the enforcement of an invalid or
unconstitutional law.82 The Court retains discretion whether or not to allow a
taxpayer's suit.83
In the case of a legislator or member of Congress, an act of the Executive that
injures the institution of Congress causes a derivative but nonetheless
substantial injury that can be questioned by legislators. A member of the
House of Representatives has standing to maintain inviolate the prerogatives,
powers and privileges vested by the Constitution in his office.84
An organization may be granted standing to assert the rights of its members,85
but the mere invocation by the Integrated Bar of the Philippines or any member
of the legal profession of the duty to preserve the rule of law does not suffice
to clothe it with standing.86
As regards a local government unit (LGU), it can seek relief in order to protect
or vindicate an interest of its own, and of the other LGUs.87
Intervenors, meanwhile, may be given legal standing upon showing of facts
that satisfy the requirements of the law authorizing intervention,88 such as a
legal interest in the matter in litigation, or in the success of either of the parties.

In any case, the Court has discretion to relax the procedural technicality on
locus standi, given the liberal attitude it has exercised, highlighted in the case
of David v. Macapagal-Arroyo,89 where technicalities of procedure were
brushed aside, the constitutional issues raised being of paramount public
interest or of transcendental importance deserving the attention of the Court in
view of their seriousness, novelty and weight as precedents.90 The Court's
forbearing stance on locus standi on issues involving constitutional issues has
for its purpose the protection of fundamental rights.
In not a few cases, the Court, in keeping with its duty under the Constitution to
determine whether the other branches of government have kept themselves
within the limits of the Constitution and the laws and have not abused the
discretion given them, has brushed aside technical rules of procedure.91
In the petitions at bar, petitioners Province of North Cotabato (G.R. No.
183591) Province of Zamboanga del Norte (G.R. No. 183951), City of Iligan
(G.R. No. 183893) and City of Zamboanga (G.R. No. 183752) and petitioners-
in-intervention Province of Sultan Kudarat, City of Isabela and Municipality of
Linamon have locus standi in view of the direct and substantial injury that they,
as LGUs, would suffer as their territories, whether in whole or in part, are to be
included in the intended domain of the BJE. These petitioners allege that they
did not vote for their inclusion in the ARMM which would be expanded to form
the BJE territory. Petitioners' legal standing is thus beyond doubt.
In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino
Pimentel III would have no standing as citizens and taxpayers for their failure
to specify that they would be denied some right or privilege or there would be
wastage of public funds. The fact that they are a former Senator, an incumbent
mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of no
consequence. Considering their invocation of the transcendental importance
of the issues at hand, however, the Court grants them standing.
Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as
taxpayers, assert that government funds would be expended for the conduct
of an illegal and unconstitutional plebiscite to delineate the BJE territory. On
that score alone, they can be given legal standing. Their allegation that the
issues involved in these petitions are of "undeniable transcendental
importance" clothes them with added basis for their personality to intervene in
these petitions.
With regard to Senator Manuel Roxas, his standing is premised on his being a
member of the Senate and a citizen to enforce compliance by respondents of
the public's constitutional right to be informed of the MOA-AD, as well as on a
genuine legal interest in the matter in litigation, or in the success or failure of
either of the parties. He thus possesses the requisite standing as an
intervenor.
With respect to Intervenors Ruy Elias Lopez, as a former congressman of the
3rd district of Davao City, a taxpayer and a member of the Bagobo tribe; Carlo
B. Gomez, et al., as members of the IBP Palawan chapter, citizens and
taxpayers; Marino Ridao, as taxpayer, resident and member of the
Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer,
they failed to allege any proper legal interest in the present petitions. Just the
same, the Court exercises its discretion to relax the procedural technicality on
locus standi given the paramount public interest in the issues at hand.
Intervening respondents Muslim Multi-Sectoral Movement for Peace and
Development, an advocacy group for justice and the attainment of peace and
prosperity in Muslim Mindanao; and Muslim Legal Assistance Foundation Inc.,
a non-government organization of Muslim lawyers, allege that they stand to be
benefited or prejudiced, as the case may be, in the resolution of the petitions
concerning the MOA-AD, and prays for the denial of the petitions on the
grounds therein stated. Such legal interest suffices to clothe them with
standing.
B. MOOTNESS
Respondents insist that the present petitions have been rendered moot with
the satisfaction of all the reliefs prayed for by petitioners and the subsequent
pronouncement of the Executive Secretary that "[n]o matter what the Supreme
Court ultimately decides[,] the government will not sign the MOA."92
In lending credence to this policy decision, the Solicitor General points out that
the President had already disbanded the GRP Peace Panel.93
In David v. Macapagal-Arroyo,94 this Court held that the "moot and academic"
principle not being a magical formula that automatically dissuades courts in
resolving a case, it will decide cases, otherwise moot and academic, if it finds
that (a) there is a grave violation of the Constitution;95 (b) the situation is of
exceptional character and paramount public interest is involved;96 (c) the
constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public;97 and (d) the case is capable of repetition
yet evading review.98
Another exclusionary circumstance that may be considered is where there is
a voluntary cessation of the activity complained of by the defendant or doer.
Thus, once a suit is filed and the doer voluntarily ceases the challenged
conduct, it does not automatically deprive the tribunal of power to hear and
determine the case and does not render the case moot especially when the
plaintiff seeks damages or prays for injunctive relief against the possible
recurrence of the violation.99
The present petitions fall squarely into these exceptions to thus thrust them
into the domain of judicial review. The grounds cited above in David are just
as applicable in the present cases as they were, not only in David, but also in
Province of Batangas v. Romulo100 and Manalo v. Calderon101 where the
Court similarly decided them on the merits, supervening events that would
ordinarily have rendered the same moot notwithstanding.
Petitions not mooted
Contrary then to the asseverations of respondents, the non-signing of the
MOA-AD and the eventual dissolution of the GRP Peace Panel did not moot
the present petitions. It bears emphasis that the signing of the MOA-AD did
not push through due to the Court's issuance of a Temporary Restraining
Order.
Contrary too to respondents' position, the MOA-AD cannot be considered a
mere "list of consensus points," especially given its nomenclature, the need to
have it signed or initialed by all the parties concerned on August 5, 2008, and
the far-reaching Constitutional implications of these "consensus points,"
foremost of which is the creation of the BJE.
In fact, as what will, in the main, be discussed, there is a commitment on the
part of respondents to amend and effect necessary changes to the existing
legal framework for certain provisions of the MOA-AD to take effect.
Consequently, the present petitions are not confined to the terms and
provisions of the MOA-AD, but to other on-going and future negotiations and
agreements necessary for its realization. The petitions have not, therefore,
been rendered moot and academic simply by the public disclosure of the MOA-
AD,102 the manifestation that it will not be signed as well as the disbanding of
the GRP Panel not withstanding.
Petitions are imbued with paramount public interest
There is no gainsaying that the petitions are imbued with paramount public
interest, involving a significant part of the country's territory and the wide-
ranging political modifications of affected LGUs. The assertion that the MOA-
AD is subject to further legal enactments including possible Constitutional
amendments more than ever provides impetus for the Court to formulate
controlling principles to guide the bench, the bar, the public and, in this case,
the government and its negotiating entity.
Respondents cite Suplico v. NEDA, et al.103 where the Court did not
"pontificat[e] on issues which no longer legitimately constitute an actual case
or controversy [as this] will do more harm than good to the nation as a whole."
The present petitions must be differentiated from Suplico. Primarily, in Suplico,
what was assailed and eventually cancelled was a stand-alone government
procurement contract for a national broadband network involving a one-time
contractual relation between two parties-the government and a private foreign
corporation. As the issues therein involved specific government procurement
policies and standard principles on contracts, the majority opinion in Suplico
found nothing exceptional therein, the factual circumstances being peculiar
only to the transactions and parties involved in the controversy.
The MOA-AD is part of a series of agreements
In the present controversy, the MOA-AD is a significant part of a series of
agreements necessary to carry out the Tripoli Agreement 2001. The MOA-AD
which dwells on the Ancestral Domain Aspect of said Tripoli Agreement is the
third such component to be undertaken following the implementation of the
Security Aspect in August 2001 and the Humanitarian, Rehabilitation and
Development Aspect in May 2002.
Accordingly, even if the Executive Secretary, in his Memorandum of August
28, 2008 to the Solicitor General, has stated that "no matter what the Supreme
Court ultimately decides[,] the government will not sign the MOA[-AD],"
mootness will not set in in light of the terms of the Tripoli Agreement 2001.
Need to formulate principles-guidelines
Surely, the present MOA-AD can be renegotiated or another one will be drawn
up to carry out the Ancestral Domain Aspect of the Tripoli Agreement 2001, in
another or in any form, which could contain similar or significantly drastic
provisions. While the Court notes the word of the Executive Secretary that the
government "is committed to securing an agreement that is both constitutional
and equitable because that is the only way that long-lasting peace can be
assured," it is minded to render a decision on the merits in the present petitions
to formulate controlling principles to guide the bench, the bar, the public and,
most especially, the government in negotiating with the MILF regarding
Ancestral Domain.
Respondents invite the Court's attention to the separate opinion of then Chief
Justice Artemio Panganiban in Sanlakas v. Reyes104 in which he stated that
the doctrine of "capable of repetition yet evading review" can override
mootness, "provided the party raising it in a proper case has been and/or
continue to be prejudiced or damaged as a direct result of their issuance." They
contend that the Court must have jurisdiction over the subject matter for the
doctrine to be invoked.
The present petitions all contain prayers for Prohibition over which this Court
exercises original jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is
a petition for Injunction and Declaratory Relief, the Court will treat it as one for
Prohibition as it has far reaching implications and raises questions that need
to be resolved.105 At all events, the Court has jurisdiction over most if not the
rest of the petitions.
Indeed, the present petitions afford a proper venue for the Court to again apply
the doctrine immediately referred to as what it had done in a number of
landmark cases.106 There is a reasonable expectation that petitioners,
particularly the Provinces of North Cotabato, Zamboanga del Norte and Sultan
Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the Municipality of
Linamon, will again be subjected to the same problem in the future as
respondents' actions are capable of repetition, in another or any form.
It is with respect to the prayers for Mandamus that the petitions have become
moot, respondents having, by Compliance of August 7, 2008, provided this
Court and petitioners with official copies of the final draft of the MOA-AD and
its annexes. Too, intervenors have been furnished, or have procured for
themselves, copies of the MOA-AD.
V. SUBSTANTIVE ISSUES
As culled from the Petitions and Petitions-in-Intervention, there are basically
two SUBSTANTIVE issues to be resolved, one relating to the manner in which
the MOA-AD was negotiated and finalized, the other relating to its provisions,
viz:
1. Did respondents violate constitutional and statutory provisions on public
consultation and the right to information when they negotiated and later
initialed the MOA-AD?
2. Do the contents of the MOA-AD violate the Constitution and the laws?
ON THE FIRST SUBSTANTIVE ISSUE
Petitioners invoke their constitutional right to information on matters of public
concern, as provided in Section 7, Article III on the Bill of Rights:
Sec. 7. The right of the people to information on matters of public concern shall
be recognized. Access to official records, and to documents, and papers
pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the
citizen, subject to such limitations as may be provided by law.107
As early as 1948, in Subido v. Ozaeta,108 the Court has recognized the
statutory right to examine and inspect public records, a right which was
eventually accorded constitutional status.
The right of access to public documents, as enshrined in both the 1973
Constitution and the 1987 Constitution, has been recognized as a self-
executory constitutional right.109
In the 1976 case of Baldoza v. Hon. Judge Dimaano,110 the Court ruled that
access to public records is predicated on the right of the people to acquire
information on matters of public concern since, undoubtedly, in a democracy,
the pubic has a legitimate interest in matters of social and political significance.
x x x The incorporation of this right in the Constitution is a recognition of the
fundamental role of free exchange of information in a democracy. There can
be no realistic perception by the public of the nation's problems, nor a
meaningful democratic decision-making if they are denied access to
information of general interest. Information is needed to enable the members
of society to cope with the exigencies of the times. As has been aptly observed:
"Maintaining the flow of such information depends on protection for both its
acquisition and its dissemination since, if either process is interrupted, the flow
inevitably ceases." x x x111
In the same way that free discussion enables members of society to cope with
the exigencies of their time, access to information of general interest aids the
people in democratic decision-making by giving them a better perspective of
the vital issues confronting the nation112 so that they may be able to criticize
and participate in the affairs of the government in a responsible, reasonable
and effective manner. It is by ensuring an unfettered and uninhibited exchange
of ideas among a well-informed public that a government remains responsive
to the changes desired by the people.113
The MOA-AD is a matter of public concern
That the subject of the information sought in the present cases is a matter of
public concern114 faces no serious challenge. In fact, respondents admit that
the MOA-AD is indeed of public concern.115 In previous cases, the Court
found that the regularity of real estate transactions entered in the Register of
Deeds,116 the need for adequate notice to the public of the various laws,117
the civil service eligibility of a public employee,118 the proper management of
GSIS funds allegedly used to grant loans to public officials,119 the recovery of
the Marcoses' alleged ill-gotten wealth,120 and the identity of party-list
nominees,121 among others, are matters of public concern. Undoubtedly, the
MOA-AD subject of the present cases is of public concern, involving as it does
the sovereignty and territorial integrity of the State, which directly affects the
lives of the public at large.
Matters of public concern covered by the right to information include steps and
negotiations leading to the consummation of the contract. In not distinguishing
as to the executory nature or commercial character of agreements, the Court
has categorically ruled:
x x x [T]he right to information "contemplates inclusion of negotiations leading
to the consummation of the transaction." Certainly, a consummated contract
is not a requirement for the exercise of the right to information. Otherwise, the
people can never exercise the right if no contract is consummated, and if one
is consummated, it may be too late for the public to expose its defects.
Requiring a consummated contract will keep the public in the dark until the
contract, which may be grossly disadvantageous to the government or even
illegal, becomes fait accompli. This negates the State policy of full
transparency on matters of public concern, a situation which the framers of the
Constitution could not have intended. Such a requirement will prevent the
citizenry from participating in the public discussion of any proposed contract,
effectively truncating a basic right enshrined in the Bill of Rights. We can allow
neither an emasculation of a constitutional right, nor a retreat by the State of
its avowed "policy of full disclosure of all its transactions involving public
interest."122 (Emphasis and italics in the original)
Intended as a "splendid symmetry"123 to the right to information under the Bill
of Rights is the policy of public disclosure under Section 28, Article II of the
Constitution reading:
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts
and implements a policy of full public disclosure of all its transactions involving
public interest.124
The policy of full public disclosure enunciated in above-quoted Section 28
complements the right of access to information on matters of public concern
found in the Bill of Rights. The right to information guarantees the right of the
people to demand information, while Section 28 recognizes the duty of
officialdom to give information even if nobody demands.125
The policy of public disclosure establishes a concrete ethical principle for the
conduct of public affairs in a genuinely open democracy, with the people's right
to know as the centerpiece. It is a mandate of the State to be accountable by
following such policy.126 These provisions are vital to the exercise of the
freedom of expression and essential to hold public officials at all times
accountable to the people.127
Whether Section 28 is self-executory, the records of the deliberations of the
Constitutional Commission so disclose:
MR. SUAREZ. And since this is not self-executory, this policy will not be
enunciated or will not be in force and effect until after Congress shall have
provided it.
MR. OPLE. I expect it to influence the climate of public ethics immediately but,
of course, the implementing law will have to be enacted by Congress, Mr.
Presiding Officer.128
The following discourse, after Commissioner Hilario Davide, Jr., sought
clarification on the issue, is enlightening.
MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding
Officer, did I get the Gentleman correctly as having said that this is not a self-
executing provision? It would require a legislation by Congress to implement?
MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted
an amendment from Commissioner Regalado, so that the safeguards on
national interest are modified by the clause "as may be provided by law"
MR. DAVIDE. But as worded, does it not mean that this will immediately take
effect and Congress may provide for reasonable safeguards on the sole
ground national interest?
MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should
immediately influence the climate of the conduct of public affairs but, of course,
Congress here may no longer pass a law revoking it, or if this is approved,
revoking this principle, which is inconsistent with this policy.129 (Emphasis
supplied)
Indubitably, the effectivity of the policy of public disclosure need not await the
passing of a statute. As Congress cannot revoke this principle, it is merely
directed to provide for "reasonable safeguards." The complete and effective
exercise of the right to information necessitates that its complementary
provision on public disclosure derive the same self-executory nature. Since
both provisions go hand-in-hand, it is absurd to say that the broader130 right
to information on matters of public concern is already enforceable while the
correlative duty of the State to disclose its transactions involving public interest
is not enforceable until there is an enabling law. Respondents cannot thus
point to the absence of an implementing legislation as an excuse in not
effecting such policy.
An essential element of these freedoms is to keep open a continuing dialogue
or process of communication between the government and the people. It is in
the interest of the State that the channels for free political discussion be
maintained to the end that the government may perceive and be responsive to
the people's will.131 Envisioned to be corollary to the twin rights to information
and disclosure is the design for feedback mechanisms.
MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people
be able to participate? Will the government provide feedback mechanisms so
that the people can participate and can react where the existing media facilities
are not able to provide full feedback mechanisms to the government? I
suppose this will be part of the government implementing operational
mechanisms.
MR. OPLE. Yes. I think through their elected representatives and that is how
these courses take place. There is a message and a feedback, both ways.
xxxx
MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last
sentence?
I think when we talk about the feedback network, we are not talking about
public officials but also network of private business o[r] community-based
organizations that will be reacting. As a matter of fact, we will put more
credence or credibility on the private network of volunteers and voluntary
community-based organizations. So I do not think we are afraid that there will
be another OMA in the making.132 (Emphasis supplied)
The imperative of a public consultation, as a species of the right to information,
is evident in the "marching orders" to respondents. The mechanics for the duty
to disclose information and to conduct public consultation regarding the peace
agenda and process is manifestly provided by E.O. No. 3.133 The
preambulatory clause of E.O. No. 3 declares that there is a need to further
enhance the contribution of civil society to the comprehensive peace process
by institutionalizing the people's participation.
One of the three underlying principles of the comprehensive peace process is
that it "should be community-based, reflecting the sentiments, values and
principles important to all Filipinos" and "shall be defined not by the
government alone, nor by the different contending groups only, but by all
Filipinos as one community."134 Included as a component of the
comprehensive peace process is consensus-building and empowerment for
peace, which includes "continuing consultations on both national and local
levels to build consensus for a peace agenda and process, and the
mobilization and facilitation of people's participation in the peace process."135
Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to
effectuate "continuing" consultations, contrary to respondents' position that
plebiscite is "more than sufficient consultation."136
Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP,
one of which is to "[c]onduct regular dialogues with the National Peace Forum
(NPF) and other peace partners to seek relevant information, comments,
recommendations as well as to render appropriate and timely reports on the
progress of the comprehensive peace process."137 E.O. No. 3 mandates the
establishment of the NPF to be "the principal forum for the PAPP to consult
with and seek advi[c]e from the peace advocates, peace partners and
concerned sectors of society on both national and local levels, on the
implementation of the comprehensive peace process, as well as for
government[-]civil society dialogue and consensus-building on peace agenda
and initiatives."138
In fine, E.O. No. 3 establishes petitioners' right to be consulted on the peace
agenda, as a corollary to the constitutional right to information and disclosure.
PAPP Esperon committed grave abuse of discretion
The PAPP committed grave abuse of discretion when he failed to carry out the
pertinent consultation. The furtive process by which the MOA-AD was
designed and crafted runs contrary to and in excess of the legal authority, and
amounts to a whimsical, capricious, oppressive, arbitrary and despotic
exercise thereof.
The Court may not, of course, require the PAPP to conduct the consultation in
a particular way or manner. It may, however, require him to comply with the
law and discharge the functions within the authority granted by the
President.139
Petitioners are not claiming a seat at the negotiating table, contrary to
respondents' retort in justifying the denial of petitioners' right to be consulted.
Respondents' stance manifests the manner by which they treat the salient
provisions of E.O. No. 3 on people's participation. Such disregard of the
express mandate of the President is not much different from superficial
conduct toward token provisos that border on classic lip service.140 It
illustrates a gross evasion of positive duty and a virtual refusal to perform the
duty enjoined.
As for respondents' invocation of the doctrine of executive privilege, it is not
tenable under the premises. The argument defies sound reason when
contrasted with E.O. No. 3's explicit provisions on continuing consultation and
dialogue on both national and local levels. The executive order even
recognizes the exercise of the public's right even before the GRP makes its
official recommendations or before the government proffers its definite
propositions.141 It bear emphasis that E.O. No. 3 seeks to elicit relevant
advice, information, comments and recommendations from the people through
dialogue.
AT ALL EVENTS, respondents effectively waived the defense of executive
privilege in view of their unqualified disclosure of the official copies of the final
draft of the MOA-AD. By unconditionally complying with the Court's August 4,
2008 Resolution, without a prayer for the document's disclosure in camera, or
without a manifestation that it was complying therewith ex abundante ad
cautelam.
Petitioners' assertion that the Local Government Code (LGC) of 1991 declares
it a State policy to "require all national agencies and offices to conduct periodic
consultations with appropriate local government units, non-governmental and
people's organizations, and other concerned sectors of the community before
any project or program is implemented in their respective jurisdictions"142 is
well-taken. The LGC chapter on intergovernmental relations puts flesh into this
avowed policy:
Prior Consultations Required. - No project or program shall be implemented
by government authorities unless the consultations mentioned in Sections 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.143
(Italics and underscoring supplied)
In Lina, Jr. v. Hon. Pao,144 the Court held that the above-stated policy and
above-quoted provision of the LGU apply only to national programs or projects
which are to be implemented in a particular local community. Among the
programs and projects covered are those that are critical to the environment
and human ecology including those that may call for the eviction of a particular
group of people residing in the locality where these will be implemented.145
The MOA-AD is one peculiar program that unequivocally and unilaterally vests
ownership of a vast territory to the Bangsamoro people,146 which could
pervasively and drastically result to the diaspora or displacement of a great
number of inhabitants from their total environment.
With respect to the indigenous cultural communities/indigenous peoples
(ICCs/IPs), whose interests are represented herein by petitioner Lopez and
are adversely affected by the MOA-AD, the ICCs/IPs have, under the IPRA,
the right to participate fully at all levels of decision-making in matters which
may affect their rights, lives and destinies.147 The MOA-AD, an instrument
recognizing ancestral domain, failed to justify its non-compliance with the
clear-cut mechanisms ordained in said Act,148 which entails, among other
things, the observance of the free and prior informed consent of the ICCs/IPs.
Notably, the IPRA does not grant the Executive Department or any
government agency the power to delineate and recognize an ancestral domain
claim by mere agreement or compromise. The recognition of the ancestral
domain is the raison d'etre of the MOA-AD, without which all other stipulations
or "consensus points" necessarily must fail. In proceeding to make a sweeping
declaration on ancestral domain, without complying with the IPRA, which is
cited as one of the TOR of the MOA-AD, respondents clearly transcended the
boundaries of their authority. As it seems, even the heart of the MOA-AD is
still subject to necessary changes to the legal framework. While paragraph 7
on Governance suspends the effectivity of all provisions requiring changes to
the legal framework, such clause is itself invalid, as will be discussed in the
following section.
Indeed, ours is an open society, with all the acts of the government subject to
public scrutiny and available always to public cognizance. This has to be so if
the country is to remain democratic, with sovereignty residing in the people
and all government authority emanating from them.149
ON THE SECOND SUBSTANTIVE ISSUE
With regard to the provisions of the MOA-AD, there can be no question that
they cannot all be accommodated under the present Constitution and laws.
Respondents have admitted as much in the oral arguments before this Court,
and the MOA-AD itself recognizes the need to amend the existing legal
framework to render effective at least some of its provisions. Respondents,
nonetheless, counter that the MOA-AD is free of any legal infirmity because
any provisions therein which are inconsistent with the present legal framework
will not be effective until the necessary changes to that framework are made.
The validity of this argument will be considered later. For now, the Court shall
pass upon how
The MOA-AD is inconsistent with the Constitution and laws as presently
worded.
In general, the objections against the MOA-AD center on the extent of the
powers conceded therein to the BJE. Petitioners assert that the powers
granted to the BJE exceed those granted to any local government under
present laws, and even go beyond those of the present ARMM. Before
assessing some of the specific powers that would have been vested in the
BJE, however, it would be useful to turn first to a general idea that serves as a
unifying link to the different provisions of the MOA-AD, namely, the
international law concept of association. Significantly, the MOA-AD explicitly
alludes to this concept, indicating that the Parties actually framed its provisions
with it in mind.
Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on
RESOURCES, and paragraph 4 on GOVERNANCE. It is in the last mentioned
provision, however, that the MOA-AD most clearly uses it to describe the
envisioned relationship between the BJE and the Central Government.
4. The relationship between the Central Government and the Bangsamoro
juridical entity shall be associative characterized by shared authority and
responsibility with a structure of governance based on executive, legislative,
judicial and administrative institutions with defined powers and functions in the
comprehensive compact. A period of transition shall be established in a
comprehensive peace compact specifying the relationship between the
Central Government and the BJE. (Emphasis and underscoring supplied)
The nature of the "associative" relationship may have been intended to be
defined more precisely in the still to be forged Comprehensive Compact.
Nonetheless, given that there is a concept of "association" in international law,
and the MOA-AD - by its inclusion of international law instruments in its TOR-
placed itself in an international legal context, that concept of association may
be brought to bear in understanding the use of the term "associative" in the
MOA-AD.
Keitner and Reisman state that
[a]n association is formed when two states of unequal power voluntarily
establish durable links. In the basic model, one state, the associate, delegates
certain responsibilities to the other, the principal, while maintaining its
international status as a state. Free associations represent a middle ground
between integration and independence. x x x150 (Emphasis and underscoring
supplied)
For purposes of illustration, the Republic of the Marshall Islands and the
Federated States of Micronesia (FSM), formerly part of the U.S.-administered
Trust Territory of the Pacific Islands,151 are associated states of the U.S.
pursuant to a Compact of Free Association. The currency in these countries is
the U.S. dollar, indicating their very close ties with the U.S., yet they issue their
own travel documents, which is a mark of their statehood. Their international
legal status as states was confirmed by the UN Security Council and by their
admission to UN membership.
According to their compacts of free association, the Marshall Islands and the
FSM generally have the capacity to conduct foreign affairs in their own name
and right, such capacity extending to matters such as the law of the sea,
marine resources, trade, banking, postal, civil aviation, and cultural relations.
The U.S. government, when conducting its foreign affairs, is obligated to
consult with the governments of the Marshall Islands or the FSM on matters
which it (U.S. government) regards as relating to or affecting either
government.
In the event of attacks or threats against the Marshall Islands or the FSM, the
U.S. government has the authority and obligation to defend them as if they
were part of U.S. territory. The U.S. government, moreover, has the option of
establishing and using military areas and facilities within these associated
states and has the right to bar the military personnel of any third country from
having access to these territories for military purposes.
It bears noting that in U.S. constitutional and international practice, free
association is understood as an international association between sovereigns.
The Compact of Free Association is a treaty which is subordinate to the
associated nation's national constitution, and each party may terminate the
association consistent with the right of independence. It has been said that,
with the admission of the U.S.-associated states to the UN in 1990, the UN
recognized that the American model of free association is actually based on
an underlying status of independence.152
In international practice, the "associated state" arrangement has usually been
used as a transitional device of former colonies on their way to full
independence. Examples of states that have passed through the status of
associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla,
Dominica, St. Lucia, St. Vincent and Grenada. All have since become
independent states.153
Back to the MOA-AD, it contains many provisions which are consistent with
the international legal concept of association, specifically the following: the
BJE's capacity to enter into economic and trade relations with foreign
countries, the commitment of the Central Government to ensure the BJE's
participation in meetings and events in the ASEAN and the specialized UN
agencies, and the continuing responsibility of the Central Government over
external defense. Moreover, the BJE's right to participate in Philippine official
missions bearing on negotiation of border agreements, environmental
protection, and sharing of revenues pertaining to the bodies of water adjacent
to or between the islands forming part of the ancestral domain, resembles the
right of the governments of FSM and the Marshall Islands to be consulted by
the U.S. government on any foreign affairs matter affecting them.
These provisions of the MOA indicate, among other things, that the Parties
aimed to vest in the BJE the status of an associated state or, at any rate, a
status closely approximating it.
The concept of association is not recognized under the present Constitution

No province, city, or municipality, not even the ARMM, is recognized under our
laws as having an "associative" relationship with the national government.
Indeed, the concept implies powers that go beyond anything ever granted by
the Constitution to any local or regional government. It also implies the
recognition of the associated entity as a state. The Constitution, however, does
not contemplate any state in this jurisdiction other than the Philippine State,
much less does it provide for a transitory status that aims to prepare any part
of Philippine territory for independence.
Even the mere concept animating many of the MOA-AD's provisions,
therefore, already requires for its validity the amendment of constitutional
provisions, specifically the following provisions of 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.
SECTION 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.
The BJE is a far more powerful
entity than the autonomous region
recognized in the Constitution
It is not merely an expanded version of the ARMM, the status of its relationship
with the national government being fundamentally different from that of the
ARMM. Indeed, BJE is a state in all but name as it meets the criteria of a state
laid down in the Montevideo Convention,154 namely, a permanent population,
a defined territory, a government, and a capacity to enter into relations with
other states.
Even assuming arguendo that the MOA-AD would not necessarily sever any
portion of Philippine territory, the spirit animating it - which has betrayed itself
by its use of the concept of association - runs counter to the national
sovereignty and territorial integrity of the Republic.
The defining concept underlying the relationship between the national
government and the BJE being itself contrary to the present Constitution, it is
not surprising that many of the specific provisions of the MOA-AD on the
formation and powers of the BJE are in conflict with the Constitution and the
laws.
Article X, Section 18 of the Constitution provides that "[t]he creation of the
autonomous region shall be effective when approved by a 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." (Emphasis supplied)
As reflected above, the BJE is more of a state than an autonomous region. But
even assuming that it is covered by the term "autonomous region" in the
constitutional provision just quoted, the MOA-AD would still be in conflict with
it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the
present geographic area of the ARMM and, in addition, the municipalities of
Lanao del Norte which voted for inclusion in the ARMM during the 2001
plebiscite - Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal - are
automatically part of the BJE without need of another plebiscite, in contrast to
the areas under Categories A and B mentioned earlier in the overview. That
the present components of the ARMM and the above-mentioned municipalities
voted for inclusion therein in 2001, however, does not render another plebiscite
unnecessary under the Constitution, precisely because what these areas
voted for then was their inclusion in the ARMM, not the BJE.
The MOA-AD, moreover, would not
comply with Article X, Section 20 of
the Constitution
since that provision defines the powers of autonomous regions as follows:
SECTION 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. (Underscoring supplied)
Again on the premise that the BJE may be regarded as an autonomous region,
the MOA-AD would require an amendment that would expand the above-
quoted provision. The mere passage of new legislation pursuant to sub-
paragraph No. 9 of said constitutional provision would not suffice, since any
new law that might vest in the BJE the powers found in the MOA-AD must,
itself, comply with other provisions of the Constitution. It would not do, for
instance, to merely pass legislation vesting the BJE with treaty-making power
in order to accommodate paragraph 4 of the strand on RESOURCES which
states: "The BJE is free to enter into any economic cooperation and trade
relations with foreign countries: provided, however, that such relationships and
understandings do not include aggression against the Government of the
Republic of the Philippines x x x." Under our constitutional system, it is only
the President who has that power. Pimentel v. Executive Secretary155
instructs:
In our system of government, the President, being the head of state, is
regarded as the sole organ and authority in external relations and is the
country's sole representative with foreign nations. As the chief architect of
foreign policy, the President acts as the country's mouthpiece with respect to
international affairs. Hence, the President is vested with the authority to deal
with foreign states and governments, extend or withhold recognition, maintain
diplomatic relations, enter into treaties, and otherwise transact the business of
foreign relations. In the realm of treaty-making, the President has the sole
authority to negotiate with other states. (Emphasis and underscoring supplied)
Article II, Section 22 of the Constitution must also be amended if the scheme
envisioned in the MOA-AD is to be effected. That constitutional provision
states: "The State recognizes and promotes the rights of indigenous cultural
communities within the framework of national unity and development."
(Underscoring supplied) An associative arrangement does not uphold national
unity. While there may be a semblance of unity because of the associative ties
between the BJE and the national government, the act of placing a portion of
Philippine territory in a status which, in international practice, has generally
been a preparation for independence, is certainly not conducive to national
unity.
Besides being irreconcilable with the Constitution, the MOA-AD is also
inconsistent with prevailing statutory law, among which are R.A. No. 9054156
or the Organic Act of the ARMM, and the IPRA.157
Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of
the definition of "Bangsamoro people" used in the MOA-AD. Paragraph 1 on
Concepts and Principles states:
1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to
identify themselves and be accepted as "Bangsamoros". The Bangsamoro
people refers to those who are natives or original inhabitants of Mindanao and
its adjacent islands including Palawan and the Sulu archipelago at the time of
conquest or colonization of its descendants whether mixed or of full blood.
Spouses and their descendants are classified as Bangsamoro. The freedom
of choice of the Indigenous people shall be respected. (Emphasis and
underscoring supplied)
This use of the term Bangsamoro sharply contrasts with that found in the
Article X, Section 3 of the Organic Act, which, rather than lumping together the
identities of the Bangsamoro and other indigenous peoples living in Mindanao,
clearly distinguishes between Bangsamoro people and Tribal peoples, as
follows:
"As used in this Organic Act, the phrase "indigenous cultural community" refers
to Filipino citizens residing in the autonomous region who are:
(a) Tribal peoples. These are citizens whose social, cultural and economic
conditions distinguish them from other sectors of the national community; and
(b) Bangsa Moro people. These are citizens who are believers in Islam and
who have retained some or all of their own social, economic, cultural, and
political institutions."
Respecting the IPRA, it lays down the prevailing procedure for the delineation
and recognition of ancestral domains. The MOA-AD's manner of delineating
the ancestral domain of the Bangsamoro people is a clear departure from that
procedure. By paragraph 1 of Territory, the Parties simply agree that, subject
to the delimitations in the agreed Schedules, "[t]he Bangsamoro homeland and
historic territory refer to the land mass as well as the maritime, terrestrial, fluvial
and alluvial domains, and the aerial domain, the atmospheric space above it,
embracing the Mindanao-Sulu-Palawan geographic region."
Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure,
as illustrated in the following provisions thereof:
SECTION 52. Delineation Process. - The identification and delineation of
ancestral domains shall be done in accordance with the following procedures:
xxxx
b) Petition for Delineation. - The process of delineating a specific perimeter
may be initiated by the NCIP with the consent of the ICC/IP concerned, or
through a Petition for Delineation filed with the NCIP, by a majority of the
members of the ICCs/IPs;
c) Delineation Proper. - The official delineation of ancestral domain boundaries
including census of all community members therein, shall be immediately
undertaken by the Ancestral Domains Office upon filing of the application by
the ICCs/IPs concerned. Delineation will be done in coordination with the
community concerned and shall at all times include genuine involvement and
participation by the members of the communities concerned;
d) Proof Required. - Proof of Ancestral Domain Claims shall include the
testimony of elders or community under oath, and other documents directly or
indirectly attesting to the possession or occupation of the area since time
immemorial by such ICCs/IPs in the concept of owners which shall be any one
(1) of the following authentic documents:
1) Written accounts of the ICCs/IPs customs and traditions;
2) Written accounts of the ICCs/IPs political structure and institution;
3) Pictures showing long term occupation such as those of old improvements,
burial grounds, sacred places and old villages;
4) Historical accounts, including pacts and agreements concerning boundaries
entered into by the ICCs/IPs concerned with other ICCs/IPs;
5) Survey plans and sketch maps;
6) Anthropological data;
7) Genealogical surveys;
8) Pictures and descriptive histories of traditional communal forests and
hunting grounds;
9) Pictures and descriptive histories of traditional landmarks such as
mountains, rivers, creeks, ridges, hills, terraces and the like; and
10) Write-ups of names and places derived from the native dialect of the
community.
e) Preparation of Maps. - On the basis of such investigation and the findings
of fact based thereon, the Ancestral Domains Office of the NCIP shall prepare
a perimeter map, complete with technical descriptions, and a description of the
natural features and landmarks embraced therein;
f) Report of Investigation and Other Documents. - A complete copy of the
preliminary census and a report of investigation, shall be prepared by the
Ancestral Domains Office of the NCIP;
g) Notice and Publication. - A copy of each document, including a translation
in the native language of the ICCs/IPs concerned shall be posted in a
prominent place therein for at least fifteen (15) days. A copy of the document
shall also be posted at the local, provincial and regional offices of the NCIP,
and shall be published in a newspaper of general circulation once a week for
two (2) consecutive weeks to allow other claimants to file opposition thereto
within fifteen (15) days from date of such publication: Provided, That in areas
where no such newspaper exists, broadcasting in a radio station will be a valid
substitute: Provided, further, That mere posting shall be deemed sufficient if
both newspaper and radio station are not available;
h) Endorsement to NCIP. - Within fifteen (15) days from publication, and of the
inspection process, the Ancestral Domains Office shall prepare a report to the
NCIP endorsing a favorable action upon a claim that is deemed to have
sufficient proof. However, if the proof is deemed insufficient, the Ancestral
Domains Office shall require the submission of additional evidence: Provided,
That the Ancestral Domains Office shall reject any claim that is deemed
patently false or fraudulent after inspection and verification: Provided, further,
That in case of rejection, the Ancestral Domains Office shall give the applicant
due notice, copy furnished all concerned, containing the grounds for denial.
The denial shall be appealable to the NCIP: Provided, furthermore, That in
cases where there are conflicting claims among ICCs/IPs on the boundaries
of ancestral domain claims, the Ancestral Domains Office shall cause the
contending parties to meet and assist them in coming up with a preliminary
resolution of the conflict, without prejudice to its full adjudication according to
the section below.
xxxx
To remove all doubts about the irreconcilability of the MOA-AD with the present
legal system, a discussion of not only the Constitution and domestic statutes,
but also of international law is in order, for
Article II, Section 2 of the Constitution states that the Philippines "adopts the
generally accepted principles of international law as part of the law of the land."
Applying this provision of the Constitution, the Court, in Mejoff v. Director of
Prisons,158 held that the Universal Declaration of Human Rights is part of the
law of the land on account of which it ordered the release on bail of a detained
alien of Russian descent whose deportation order had not been executed even
after two years. Similarly, the Court in Agustin v. Edu159 applied the aforesaid
constitutional provision to the 1968 Vienna Convention on Road Signs and
Signals.
International law has long recognized the right to self-determination of
"peoples," understood not merely as the entire population of a State but also
a portion thereof. In considering the question of whether the people of Quebec
had a right to unilaterally secede from Canada, the Canadian Supreme Court
in REFERENCE RE SECESSION OF QUEBEC160 had occasion to
acknowledge that "the right of a people to self-determination is now so widely
recognized in international conventions that the principle has acquired a status
beyond convention' and is considered a general principle of international law."
Among the conventions referred to are the International Covenant on Civil and
Political Rights161 and the International Covenant on Economic, Social and
Cultural Rights162 which state, in Article 1 of both covenants, that all peoples,
by virtue of the right of self-determination, "freely determine their political status
and freely pursue their economic, social, and cultural development."
The people's right to self-determination should not, however, be understood
as extending to a unilateral right of secession. A distinction should be made
between the right of internal and external self-determination. REFERENCE RE
SECESSION OF QUEBEC is again instructive:
"(ii) Scope of the Right to Self-determination
126. The recognized sources of international law establish that the right to self-
determination of a people is normally fulfilled through internal self-
determination - a people's pursuit of its political, economic, social and cultural
development within the framework of an existing state. A right to external self-
determination (which in this case potentially takes the form of the assertion of
a right to unilateral secession) arises in only the most extreme of cases and,
even then, under carefully defined circumstances. x x x
External self-determination can be defined as in the following statement from
the Declaration on Friendly Relations, supra, as
The establishment of a sovereign and independent State, the free association
or integration with an independent State or the emergence into any other
political status freely determined by a people constitute modes of implementing
the right of self-determination by that people. (Emphasis added)
127. The international law principle of self-determination has evolved within a
framework of respect for the territorial integrity of existing states. The various
international documents that support the existence of a people's right to self-
determination also contain parallel statements supportive of the conclusion
that the exercise of such a right must be sufficiently limited to prevent threats
to an existing state's territorial integrity or the stability of relations between
sovereign states.
x x x x (Emphasis, italics and underscoring supplied)
The Canadian Court went on to discuss the exceptional cases in which the
right to external self-determination can arise, namely, where a people is under
colonial rule, is subject to foreign domination or exploitation outside a colonial
context, and - less definitely but asserted by a number of commentators - is
blocked from the meaningful exercise of its right to internal self-determination.
The Court ultimately held that the population of Quebec had no right to
secession, as the same is not under colonial rule or foreign domination, nor is
it being deprived of the freedom to make political choices and pursue
economic, social and cultural development, citing that Quebec is equitably
represented in legislative, executive and judicial institutions within Canada,
even occupying prominent positions therein.
The exceptional nature of the right of secession is further exemplified in the
REPORT OF THE INTERNATIONAL COMMITTEE OF JURISTS ON THE
LEGAL ASPECTS OF THE AALAND ISLANDS QUESTION.163 There,
Sweden presented to the Council of the League of Nations the question of
whether the inhabitants of the Aaland Islands should be authorized to
determine by plebiscite if the archipelago should remain under Finnish
sovereignty or be incorporated in the kingdom of Sweden. The Council, before
resolving the question, appointed an International Committee composed of
three jurists to submit an opinion on the preliminary issue of whether the
dispute should, based on international law, be entirely left to the domestic
jurisdiction of Finland. The Committee stated the rule as follows:
x x x [I]n the absence of express provisions in international treaties, the right
of disposing of national territory is essentially an attribute of the sovereignty of
every State. Positive International Law does not recognize the right of national
groups, as such, to separate themselves from the State of which they form part
by the simple expression of a wish, any more than it recognizes the right of
other States to claim such a separation. Generally speaking, the grant or
refusal of the right to a portion of its population of determining its own political
fate by plebiscite or by some other method, is, exclusively, an attribute of the
sovereignty of every State which is definitively constituted. A dispute between
two States concerning such a question, under normal conditions therefore,
bears upon a question which International Law leaves entirely to the domestic
jurisdiction of one of the States concerned. Any other solution would amount
to an infringement of sovereign rights of a State and would involve the risk of
creating difficulties and a lack of stability which would not only be contrary to
the very idea embodied in term "State," but would also endanger the interests
of the international community. If this right is not possessed by a large or small
section of a nation, neither can it be held by the State to which the national
group wishes to be attached, nor by any other State. (Emphasis and
underscoring supplied)
The Committee held that the dispute concerning the Aaland Islands did not
refer to a question which is left by international law to the domestic jurisdiction
of Finland, thereby applying the exception rather than the rule elucidated
above. Its ground for departing from the general rule, however, was a very
narrow one, namely, the Aaland Islands agitation originated at a time when
Finland was undergoing drastic political transformation. The internal situation
of Finland was, according to the Committee, so abnormal that, for a
considerable time, the conditions required for the formation of a sovereign
State did not exist. In the midst of revolution, anarchy, and civil war, the
legitimacy of the Finnish national government was disputed by a large section
of the people, and it had, in fact, been chased from the capital and forcibly
prevented from carrying out its duties. The armed camps and the police were
divided into two opposing forces. In light of these circumstances, Finland was
not, during the relevant time period, a "definitively constituted" sovereign state.
The Committee, therefore, found that Finland did not possess the right to
withhold from a portion of its population the option to separate itself - a right
which sovereign nations generally have with respect to their own populations.
Turning now to the more specific category of indigenous peoples, this term has
been used, in scholarship as well as international, regional, and state
practices, to refer to groups with distinct cultures, histories, and connections
to land (spiritual and otherwise) that have been forcibly incorporated into a
larger governing society. These groups are regarded as "indigenous" since
they are the living descendants of pre-invasion inhabitants of lands now
dominated by others. Otherwise stated, indigenous peoples, nations, or
communities are culturally distinctive groups that find themselves engulfed by
settler societies born of the forces of empire and conquest.164 Examples of
groups who have been regarded as indigenous peoples are the Maori of New
Zealand and the aboriginal peoples of Canada.
As with the broader category of "peoples," indigenous peoples situated within
states do not have a general right to independence or secession from those
states under international law,165 but they do have rights amounting to what
was discussed above as the right to internal self-determination.
In a historic development last September 13, 2007, the UN General Assembly
adopted the United Nations Declaration on the Rights of Indigenous Peoples
(UN DRIP) through General Assembly Resolution 61/295. The vote was 143
to 4, the Philippines being included among those in favor, and the four voting
against being Australia, Canada, New Zealand, and the U.S. The Declaration
clearly recognized the right of indigenous peoples to self-determination,
encompassing the right to autonomy or self-government, to wit:
Article 3
Indigenous peoples have the right to self-determination. By virtue of that right
they freely determine their political status and freely pursue their economic,
social and cultural development.
Article 4
Indigenous peoples, in exercising their right to self-determination, have the
right to autonomy or self-government in matters relating to their internal and
local affairs, as well as ways and means for financing their autonomous
functions.
Article 5
Indigenous peoples have the right to maintain and strengthen their distinct
political, legal, economic, social and cultural institutions, while retaining their
right to participate fully, if they so choose, in the political, economic, social and
cultural life of the State.
Self-government, as used in international legal discourse pertaining to
indigenous peoples, has been understood as equivalent to "internal self-
determination."166 The extent of self-determination provided for in the UN
DRIP is more particularly defined in its subsequent articles, some of which are
quoted hereunder:
Article 8
1. Indigenous peoples and individuals have the right not to be subjected to
forced assimilation or destruction of their culture.
2. States shall provide effective mechanisms for prevention of, and redress for:
(a) Any action which has the aim or effect of depriving them of their integrity
as distinct peoples, or of their cultural values or ethnic identities;
(b) Any action which has the aim or effect of dispossessing them of their lands,
territories or resources;
(c) Any form of forced population transfer which has the aim or effect of
violating or undermining any of their rights;
(d) Any form of forced assimilation or integration;

(e) Any form of propaganda designed to promote or incite racial or ethnic
discrimination directed against them.
Article 21
1. Indigenous peoples have the right, without discrimination, to the
improvement of their economic and social conditions, including, inter alia, in
the areas of education, employment, vocational training and retraining,
housing, sanitation, health and social security.
2. States shall take effective measures and, where appropriate, special
measures to ensure continuing improvement of their economic and social
conditions. Particular attention shall be paid to the rights and special needs of
indigenous elders, women, youth, children and persons with disabilities.
Article 26
1. Indigenous peoples have the right to the lands, territories and resources
which they have traditionally owned, occupied or otherwise used or acquired.
2. Indigenous peoples have the right to own, use, develop and control the
lands, territories and resources that they possess by reason of traditional
ownership or other traditional occupation or use, as well as those which they
have otherwise acquired.
3. States shall give legal recognition and protection to these lands, territories
and resources. Such recognition shall be conducted with due respect to the
customs, traditions and land tenure systems of the indigenous peoples
concerned.
Article 30
1. Military activities shall not take place in the lands or territories of indigenous
peoples, unless justified by a relevant public interest or otherwise freely agreed
with or requested by the indigenous peoples concerned.
2. States shall undertake effective consultations with the indigenous peoples
concerned, through appropriate procedures and in particular through their
representative institutions, prior to using their lands or territories for military
activities.
Article 32
1. Indigenous peoples have the right to determine and develop priorities and
strategies for the development or use of their lands or territories and other
resources.
2. States shall consult and cooperate in good faith with the indigenous peoples
concerned through their own representative institutions in order to obtain their
free and informed consent prior to the approval of any project affecting their
lands or territories and other resources, particularly in connection with the
development, utilization or exploitation of mineral, water or other resources.
3. States shall provide effective mechanisms for just and fair redress for any
such activities, and appropriate measures shall be taken to mitigate adverse
environmental, economic, social, cultural or spiritual impact.
Article 37
1. Indigenous peoples have the right to the recognition, observance and
enforcement of treaties, agreements and other constructive arrangements
concluded with States or their successors and to have States honour and
respect such treaties, agreements and other constructive arrangements.
2. Nothing in this Declaration may be interpreted as diminishing or eliminating
the rights of indigenous peoples contained in treaties, agreements and other
constructive arrangements.
Article 38
States in consultation and cooperation with indigenous peoples, shall take the
appropriate measures, including legislative measures, to achieve the ends of
this Declaration.
Assuming that the UN DRIP, like the Universal Declaration on Human Rights,
must now be regarded as embodying customary international law - a question
which the Court need not definitively resolve here - the obligations enumerated
therein do not strictly require the Republic to grant the Bangsamoro people,
through the instrumentality of the BJE, the particular rights and powers
provided for in the MOA-AD. Even the more specific provisions of the UN DRIP
are general in scope, allowing for flexibility in its application by the different
States.
There is, for instance, no requirement in the UN DRIP that States now
guarantee indigenous peoples their own police and internal security force.
Indeed, Article 8 presupposes that it is the State which will provide protection
for indigenous peoples against acts like the forced dispossession of their lands
- a function that is normally performed by police officers. If the protection of a
right so essential to indigenous people's identity is acknowledged to be the
responsibility of the State, then surely the protection of rights less significant
to them as such peoples would also be the duty of States. Nor is there in the
UN DRIP an acknowledgement of the right of indigenous peoples to the aerial
domain and atmospheric space. What it upholds, in Article 26 thereof, is the
right of indigenous peoples to the lands, territories and resources which they
have traditionally owned, occupied or otherwise used or acquired.
Moreover, the UN DRIP, while upholding the right of indigenous peoples to
autonomy, does not obligate States to grant indigenous peoples the near-
independent status of an associated state. All the rights recognized in that
document are qualified in Article 46 as follows:
1. Nothing in this Declaration may be interpreted as implying for any State,
people, group or person any right to engage in any activity or to perform any
act contrary to the Charter of the United Nations or construed as authorizing
or encouraging any action which would dismember or impair, totally or in part,
the territorial integrity or political unity of sovereign and independent States.
Even if the UN DRIP were considered as part of the law of the land pursuant
to Article II, Section 2 of the Constitution, it would not suffice to uphold the
validity of the MOA-AD so as to render its compliance with other laws
unnecessary.
It is, therefore, clear that the MOA-AD contains numerous provisions that
cannot be reconciled with the Constitution and the laws as presently worded.
Respondents proffer, however, that the signing of the MOA-AD alone would
not have entailed any violation of law or grave abuse of discretion on their part,
precisely because it stipulates that the provisions thereof inconsistent with the
laws shall not take effect until these laws are amended. They cite paragraph 7
of the MOA-AD strand on GOVERNANCE quoted earlier, but which is
reproduced below for convenience:
7. The Parties agree that the mechanisms and modalities for the actual
implementation of this MOA-AD shall be spelt out in the Comprehensive
Compact to mutually take such steps to enable it to occur effectively.
Any provisions of the MOA-AD requiring amendments to the existing legal
framework shall come into force upon signing of a Comprehensive Compact
and upon effecting the necessary changes to the legal framework with due
regard to non derogation of prior agreements and within the stipulated
timeframe to be contained in the Comprehensive Compact.
Indeed, the foregoing stipulation keeps many controversial provisions of the
MOA-AD from coming into force until the necessary changes to the legal
framework are effected. While the word "Constitution" is not mentioned in the
provision now under consideration or anywhere else in the MOA-AD, the term
"legal framework" is certainly broad enough to include the Constitution.
Notwithstanding the suspensive clause, however, respondents, by their mere
act of incorporating in the MOA-AD the provisions thereof regarding the
associative relationship between the BJE and the Central Government, have
already violated the Memorandum of Instructions From The President dated
March 1, 2001, which states that the "negotiations shall be conducted in
accordance with x x x the principles of the sovereignty and territorial integrity
of the Republic of the Philippines." (Emphasis supplied) Establishing an
associative relationship between the BJE and the Central Government is, for
the reasons already discussed, a preparation for independence, or worse, an
implicit acknowledgment of an independent status already prevailing.
Even apart from the above-mentioned Memorandum, however, the MOA-AD
is defective because the suspensive clause is invalid, as discussed below.
The authority of the GRP Peace Negotiating Panel to negotiate with the MILF
is founded on E.O. No. 3, Section 5(c), which states that there shall be
established Government Peace Negotiating Panels for negotiations with
different rebel groups to be "appointed by the President as her official
emissaries to conduct negotiations, dialogues, and face-to-face discussions
with rebel groups." These negotiating panels are to report to the President,
through the PAPP on the conduct and progress of the negotiations.
It bears noting that the GRP Peace Panel, in exploring lasting solutions to the
Moro Problem through its negotiations with the MILF, was not restricted by
E.O. No. 3 only to those options available under the laws as they presently
stand. One of the components of a comprehensive peace process, which E.O.
No. 3 collectively refers to as the "Paths to Peace," is the pursuit of social,
economic, and political reforms which may require new legislation or even
constitutional amendments. Sec. 4(a) of E.O. No. 3, which reiterates Section
3(a), of E.O. No. 125,167 states:
SECTION 4. The Six Paths to Peace. - The components of the comprehensive
peace process comprise the processes known as the "Paths to Peace". These
component processes are interrelated and not mutually exclusive, and must
therefore be pursued simultaneously in a coordinated and integrated fashion.
They shall include, but may not be limited to, the following:
a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This
component involves the vigorous implementation of various policies, reforms,
programs and projects aimed at addressing the root causes of internal armed
conflicts and social unrest. This may require administrative action, new
legislation or even constitutional amendments.
x x x x (Emphasis supplied)
The MOA-AD, therefore, may reasonably be perceived as an attempt of
respondents to address, pursuant to this provision of E.O. No. 3, the root
causes of the armed conflict in Mindanao. The E.O. authorized them to "think
outside the box," so to speak. Hence, they negotiated and were set on signing
the MOA-AD that included various social, economic, and political reforms
which cannot, however, all be accommodated within the present legal
framework, and which thus would require new legislation and constitutional
amendments.
The inquiry on the legality of the "suspensive clause," however, cannot stop
here, because it must be asked whether the President herself may exercise
the power delegated to the GRP Peace Panel under E.O. No. 3, Sec. 4(a).
The President cannot delegate a power that she herself does not possess.
May the President, in the course of peace negotiations, agree to pursue
reforms that would require new legislation and constitutional amendments, or
should the reforms be restricted only to those solutions which the present laws
allow? The answer to this question requires a discussion of the extent of the
President's power to conduct peace negotiations.
That the authority of the President to conduct peace negotiations with rebel
groups is not explicitly mentioned in the Constitution does not mean that she
has no such authority. In Sanlakas v. Executive Secretary,168 in issue was
the authority of the President to declare a state of rebellion - an authority which
is not expressly provided for in the Constitution. The Court held thus:
"In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into
jurisprudence. There, the Court, by a slim 8-7 margin, upheld the President's
power to forbid the return of her exiled predecessor. The rationale for the
majority's ruling rested on the President's
. . . unstated residual powers which are implied from the grant of executive
power and which are necessary for her to comply with her duties under the
Constitution. The powers of the President are not limited to what are expressly
enumerated in the article on the Executive Department and in scattered
provisions of the Constitution. This is so, notwithstanding the avowed intent of
the members of the Constitutional Commission of 1986 to limit the powers of
the President as a reaction to the abuses under the regime of Mr. Marcos, for
the result was a limitation of specific powers of the President, particularly those
relating to the commander-in-chief clause, but not a diminution of the general
grant of executive power.
Thus, the President's authority to declare a state of rebellion springs in the
main from her powers as chief executive and, at the same time, draws strength
from her Commander-in-Chief powers. x x x (Emphasis and underscoring
supplied)
Similarly, the President's power to conduct peace negotiations is implicitly
included in her powers as Chief Executive and Commander-in-Chief. As Chief
Executive, the President has the general responsibility to promote public
peace, and as Commander-in-Chief, she has the more specific duty to prevent
and suppress rebellion and lawless violence.169
As the experience of nations which have similarly gone through internal armed
conflict will show, however, peace is rarely attained by simply pursuing a
military solution. Oftentimes, changes as far-reaching as a fundamental
reconfiguration of the nation's constitutional structure is required. The
observations of Dr. Kirsti Samuels are enlightening, to wit:
x x x [T]he fact remains that a successful political and governance transition
must form the core of any post-conflict peace-building mission. As we have
observed in Liberia and Haiti over the last ten years, conflict cessation without
modification of the political environment, even where state-building is
undertaken through technical electoral assistance and institution- or capacity-
building, is unlikely to succeed. On average, more than 50 percent of states
emerging from conflict return to conflict. Moreover, a substantial proportion of
transitions have resulted in weak or limited democracies.
The design of a constitution and its constitution-making process can play an
important role in the political and governance transition. Constitution-making
after conflict is an opportunity to create a common vision of the future of a state
and a road map on how to get there. The constitution can be partly a peace
agreement and partly a framework setting up the rules by which the new
democracy will operate.170
In the same vein, Professor Christine Bell, in her article on the nature and legal
status of peace agreements, observed that the typical way that peace
agreements establish or confirm mechanisms for demilitarization and
demobilization is by linking them to new constitutional structures addressing
governance, elections, and legal and human rights institutions.171
In the Philippine experience, the link between peace agreements and
constitution-making has been recognized by no less than the framers of the
Constitution. Behind the provisions of the Constitution on autonomous
regions172 is the framers' intention to implement a particular peace
agreement, namely, the Tripoli Agreement of 1976 between the GRP and the
MNLF, signed by then Undersecretary of National Defense Carmelo Z.
Barbero and then MNLF Chairman Nur Misuari.
MR. ROMULO. There are other speakers; so, although I have some more
questions, I will reserve my right to ask them if they are not covered by the
other speakers. I have only two questions.
I heard one of the Commissioners say that local autonomy already exists in
the Muslim region; it is working very well; it has, in fact, diminished a great deal
of the problems. So, my question is: since that already exists, why do we have
to go into something new?
MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner
Yusup Abubakar is right that certain definite steps have been taken to
implement the provisions of the Tripoli Agreement with respect to an
autonomous region in Mindanao. This is a good first step, but there is no
question that this is merely a partial response to the Tripoli Agreement itself
and to the fuller standard of regional autonomy contemplated in that
agreement, and now by state policy.173(Emphasis supplied)
The constitutional provisions on autonomy and the statutes enacted pursuant
to them have, to the credit of their drafters, been partly successful.
Nonetheless, the Filipino people are still faced with the reality of an on-going
conflict between the Government and the MILF. If the President is to be
expected to find means for bringing this conflict to an end and to achieve
lasting peace in Mindanao, then she must be given the leeway to explore, in
the course of peace negotiations, solutions that may require changes to the
Constitution for their implementation. Being uniquely vested with the power to
conduct peace negotiations with rebel groups, the President is in a singular
position to know the precise nature of their grievances which, if resolved, may
bring an end to hostilities.
The President may not, of course, unilaterally implement the solutions that she
considers viable, but she may not be prevented from submitting them as
recommendations to Congress, which could then, if it is minded, act upon them
pursuant to the legal procedures for constitutional amendment and revision. In
particular, Congress would have the option, pursuant to Article XVII, Sections
1 and 3 of the Constitution, to propose the recommended amendments or
revision to the people, call a constitutional convention, or submit to the
electorate the question of calling such a convention.
While the President does not possess constituent powers - as those powers
may be exercised only by Congress, a Constitutional Convention, or the
people through initiative and referendum - she may submit proposals for
constitutional change to Congress in a manner that does not involve the
arrogation of constituent powers.
In Sanidad v. COMELEC,174 in issue was the legality of then President
Marcos' act of directly submitting proposals for constitutional amendments to
a referendum, bypassing the interim National Assembly which was the body
vested by the 1973 Constitution with the power to propose such amendments.
President Marcos, it will be recalled, never convened the interim National
Assembly. The majority upheld the President's act, holding that "the urges of
absolute necessity" compelled the President as the agent of the people to act
as he did, there being no interim National Assembly to propose constitutional
amendments. Against this ruling, Justices Teehankee and Muoz Palma
vigorously dissented. The Court's concern at present, however, is not with
regard to the point on which it was then divided in that controversial case, but
on that which was not disputed by either side.
Justice Teehankee's dissent,175 in particular, bears noting. While he
disagreed that the President may directly submit proposed constitutional
amendments to a referendum, implicit in his opinion is a recognition that he
would have upheld the President's action along with the majority had the
President convened the interim National Assembly and coursed his proposals
through it. Thus Justice Teehankee opined:
"Since the Constitution provides for the organization of the essential
departments of government, defines and delimits the powers of each and
prescribes the manner of the exercise of such powers, and the constituent
power has not been granted to but has been withheld from the President or
Prime Minister, it follows that the President's questioned decrees proposing
and submitting constitutional amendments directly to the people (without the
intervention of the interim National Assembly in whom the power is expressly
vested) are devoid of constitutional and legal basis."176 (Emphasis supplied)
From the foregoing discussion, the principle may be inferred that the President
- in the course of conducting peace negotiations - may validly consider
implementing even those policies that require changes to the Constitution, but
she may not unilaterally implement them without the intervention of Congress,
or act in any way as if the assent of that body were assumed as a certainty.
Since, under the present Constitution, the people also have the power to
directly propose amendments through initiative and referendum, the President
may also submit her recommendations to the people, not as a formal proposal
to be voted on in a plebiscite similar to what President Marcos did in Sanidad,
but for their independent consideration of whether these recommendations
merit being formally proposed through initiative.
These recommendations, however, may amount to nothing more than the
President's suggestions to the people, for any further involvement in the
process of initiative by the Chief Executive may vitiate its character as a
genuine "people's initiative." The only initiative recognized by the Constitution
is that which truly proceeds from the people. As the Court stated in Lambino
v. COMELEC:177

"The Lambino Group claims that their initiative is the people's voice.' However,
the Lambino Group unabashedly states in ULAP Resolution No. 2006-02, in
the verification of their petition with the COMELEC, that ULAP maintains its
unqualified support to the agenda of Her Excellency President Gloria
Macapagal-Arroyo for constitutional reforms.' The Lambino Group thus admits
that their people's' initiative is an unqualified support to the agenda' of the
incumbent President to change the Constitution. This forewarns the Court to
be wary of incantations of people's voice' or sovereign will' in the present
initiative."
It will be observed that the President has authority, as stated in her oath of
office,178 only to preserve and defend the Constitution. Such presidential
power does not, however, extend to allowing her to change the Constitution,
but simply to recommend proposed amendments or revision. As long as she
limits herself to recommending these changes and submits to the proper
procedure for constitutional amendments and revision, her mere
recommendation need not be construed as an unconstitutional act.
The foregoing discussion focused on the President's authority to propose
constitutional amendments, since her authority to propose new legislation is
not in controversy. It has been an accepted practice for Presidents in this
jurisdiction to propose new legislation. One of the more prominent instances
the practice is usually done is in the yearly State of the Nation Address of the
President to Congress. Moreover, the annual general appropriations bill has
always been based on the budget prepared by the President, which - for all
intents and purposes - is a proposal for new legislation coming from the
President.179
The "suspensive clause" in the MOA-AD viewed in light of the above-
discussed standards
Given the limited nature of the President's authority to propose constitutional
amendments, she cannot guarantee to any third party that the required
amendments will eventually be put in place, nor even be submitted to a
plebiscite. The most she could do is submit these proposals as
recommendations either to Congress or the people, in whom constituent
powers are vested.
Paragraph 7 on Governance of the MOA-AD states, however, that all
provisions thereof which cannot be reconciled with the present Constitution
and laws "shall come into force upon signing of a Comprehensive Compact
and upon effecting the necessary changes to the legal framework." This
stipulation does not bear the marks of a suspensive condition - defined in civil
law as a future and uncertain event - but of a term. It is not a question of
whether the necessary changes to the legal framework will be effected, but
when. That there is no uncertainty being contemplated is plain from what
follows, for the paragraph goes on to state that the contemplated changes shall
be "with due regard to non derogation of prior agreements and within the
stipulated timeframe to be contained in the Comprehensive Compact."
Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the
changes to the legal framework contemplated in the MOA-AD - which changes
would include constitutional amendments, as discussed earlier. It bears noting
that,
By the time these changes are put in place, the MOA-AD itself would be
counted among the "prior agreements" from which there could be no
derogation.
What remains for discussion in the Comprehensive Compact would merely be
the implementing details for these "consensus points" and, notably, the
deadline for effecting the contemplated changes to the legal framework.
Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the
limits of the President's authority to propose constitutional amendments, it
being a virtual guarantee that the Constitution and the laws of the Republic of
the Philippines will certainly be adjusted to conform to all the "consensus
points" found in the MOA-AD. Hence, it must be struck down as
unconstitutional.
A comparison between the "suspensive clause" of the MOA-AD with a similar
provision appearing in the 1996 final peace agreement between the MNLF and
the GRP is most instructive.
As a backdrop, the parties to the 1996 Agreement stipulated that it would be
implemented in two phases. Phase I covered a three-year transitional period
involving the putting up of new administrative structures through Executive
Order, such as the Special Zone of Peace and Development (SZOPAD) and
the Southern Philippines Council for Peace and Development (SPCPD), while
Phase II covered the establishment of the new regional autonomous
government through amendment or repeal of R.A. No. 6734, which was then
the Organic Act of the ARMM.
The stipulations on Phase II consisted of specific agreements on the structure
of the expanded autonomous region envisioned by the parties. To that extent,
they are similar to the provisions of the MOA-AD. There is, however, a crucial
difference between the two agreements. While the MOA-AD virtually
guarantees that the "necessary changes to the legal framework" will be put in
place, the GRP-MNLF final peace agreement states thus: "Accordingly, these
provisions [on Phase II] shall be recommended by the GRP to Congress for
incorporation in the amendatory or repealing law."

Concerns have been raised that the MOA-AD would have given rise to a
binding international law obligation on the part of the Philippines to change its
Constitution in conformity thereto, on the ground that it may be considered
either as a binding agreement under international law, or a unilateral
declaration of the Philippine government to the international community that it
would grant to the Bangsamoro people all the concessions therein stated.
Neither ground finds sufficient support in international law, however.
The MOA-AD, as earlier mentioned in the overview thereof, would have
included foreign dignitaries as signatories. In addition, representatives of other
nations were invited to witness its signing in Kuala Lumpur. These
circumstances readily lead one to surmise that the MOA-AD would have had
the status of a binding international agreement had it been signed. An
examination of the prevailing principles in international law, however, leads to
the contrary conclusion.
The Decision on Challenge to Jurisdiction: Lom Accord Amnesty180 (the
Lom Accord case) of the Special Court of Sierra Leone is enlightening. The
Lom Accord was a peace agreement signed on July 7, 1999 between the
Government of Sierra Leone and the Revolutionary United Front (RUF), a
rebel group with which the Sierra Leone Government had been in armed
conflict for around eight years at the time of signing. There were non-
contracting signatories to the agreement, among which were the Government
of the Togolese Republic, the Economic Community of West African States,
and the UN.
On January 16, 2002, after a successful negotiation between the UN
Secretary-General and the Sierra Leone Government, another agreement was
entered into by the UN and that Government whereby the Special Court of
Sierra Leone was established. The sole purpose of the Special Court, an
international court, was to try persons who bore the greatest responsibility for
serious violations of international humanitarian law and Sierra Leonean law
committed in the territory of Sierra Leone since November 30, 1996.
Among the stipulations of the Lom Accord was a provision for the full pardon
of the members of the RUF with respect to anything done by them in pursuit
of their objectives as members of that organization since the conflict began.
In the Lom Accord case, the Defence argued that the Accord created an
internationally binding obligation not to prosecute the beneficiaries of the
amnesty provided therein, citing, among other things, the participation of
foreign dignitaries and international organizations in the finalization of that
agreement. The Special Court, however, rejected this argument, ruling that the
Lome Accord is not a treaty and that it can only create binding obligations and
rights between the parties in municipal law, not in international law. Hence, the
Special Court held, it is ineffective in depriving an international court like it of
jurisdiction.
"37. In regard to the nature of a negotiated settlement of an internal armed
conflict it is easy to assume and to argue with some degree of plausibility, as
Defence counsel for the defendants seem to have done, that the mere fact that
in addition to the parties to the conflict, the document formalizing the
settlement is signed by foreign heads of state or their representatives and
representatives of international organizations, means the agreement of the
parties is internationalized so as to create obligations in international law.
xxxx
40. Almost every conflict resolution will involve the parties to the conflict and
the mediator or facilitator of the settlement, or persons or bodies under whose
auspices the settlement took place but who are not at all parties to the conflict,
are not contracting parties and who do not claim any obligation from the
contracting parties or incur any obligation from the settlement.
41. In this case, the parties to the conflict are the lawful authority of the State
and the RUF which has no status of statehood and is to all intents and
purposes a faction within the state. The non-contracting signatories of the
Lom Agreement were moral guarantors of the principle that, in the terms of
Article XXXIV of the Agreement, "this peace agreement is implemented with
integrity and in good faith by both parties". The moral guarantors assumed no
legal obligation. It is recalled that the UN by its representative appended,
presumably for avoidance of doubt, an understanding of the extent of the
agreement to be implemented as not including certain international crimes.
42. An international agreement in the nature of a treaty must create rights and
obligations regulated by international law so that a breach of its terms will be
a breach determined under international law which will also provide principle
means of enforcement. The Lom Agreement created neither rights nor
obligations capable of being regulated by international law. An agreement such
as the Lom Agreement which brings to an end an internal armed conflict no
doubt creates a factual situation of restoration of peace that the international
community acting through the Security Council may take note of. That,
however, will not convert it to an international agreement which creates an
obligation enforceable in international, as distinguished from municipal, law. A
breach of the terms of such a peace agreement resulting in resumption of
internal armed conflict or creating a threat to peace in the determination of the
Security Council may indicate a reversal of the factual situation of peace to be
visited with possible legal consequences arising from the new situation of
conflict created. Such consequences such as action by the Security Council
pursuant to Chapter VII arise from the situation and not from the agreement,
nor from the obligation imposed by it. Such action cannot be regarded as a
remedy for the breach. A peace agreement which settles an internal armed
conflict cannot be ascribed the same status as one which settles an
international armed conflict which, essentially, must be between two or more
warring States. The Lom Agreement cannot be characterised as an
international instrument. x x x" (Emphasis, italics and underscoring supplied)
Similarly, that the MOA-AD would have been signed by representatives of
States and international organizations not parties to the Agreement would not
have sufficed to vest in it a binding character under international law.
In another vein, concern has been raised that the MOA-AD would amount to a
unilateral declaration of the Philippine State, binding under international law,
that it would comply with all the stipulations stated therein, with the result that
it would have to amend its Constitution accordingly regardless of the true will
of the people. Cited as authority for this view is Australia v. France,181 also
known as the Nuclear Tests Case, decided by the International Court of Justice
(ICJ).
In the Nuclear Tests Case, Australia challenged before the ICJ the legality of
France's nuclear tests in the South Pacific. France refused to appear in the
case, but public statements from its President, and similar statements from
other French officials including its Minister of Defence, that its 1974 series of
atmospheric tests would be its last, persuaded the ICJ to dismiss the case.182
Those statements, the ICJ held, amounted to a legal undertaking addressed
to the international community, which required no acceptance from other
States for it to become effective.
Essential to the ICJ ruling is its finding that the French government intended
to be bound to the international community in issuing its public statements, viz:
43. It is well recognized that declarations made by way of unilateral acts,
concerning legal or factual situations, may have the effect of creating legal
obligations. Declarations of this kind may be, and often are, very specific.
When it is the intention of the State making the declaration that it should
become bound according to its terms, that intention confers on the declaration
the character of a legal undertaking, the State being thenceforth legally
required to follow a course of conduct consistent with the declaration. An
undertaking of this kind, if given publicly, and with an intent to be bound, even
though not made within the context of international negotiations, is binding. In
these circumstances, nothing in the nature of a quid pro quo nor any
subsequent acceptance of the declaration, nor even any reply or reaction from
other States, is required for the declaration to take effect, since such a
requirement would be inconsistent with the strictly unilateral nature of the
juridical act by which the pronouncement by the State was made.
44. Of course, not all unilateral acts imply obligation; but a State may choose
to take up a certain position in relation to a particular matter with the intention
of being bound-the intention is to be ascertained by interpretation of the act.
When States make statements by which their freedom of action is to be limited,
a restrictive interpretation is called for.
xxxx
51. In announcing that the 1974 series of atmospheric tests would be the last,
the French Government conveyed to the world at large, including the
Applicant, its intention effectively to terminate these tests. It was bound to
assume that other States might take note of these statements and rely on their
being effective. The validity of these statements and their legal consequences
must be considered within the general framework of the security of
international intercourse, and the confidence and trust which are so essential
in the relations among States. It is from the actual substance of these
statements, and from the circumstances attending their making, that the legal
implications of the unilateral act must be deduced. The objects of these
statements are clear and they were addressed to the international community
as a whole, and the Court holds that they constitute an undertaking possessing
legal effect. The Court considers *270 that the President of the Republic, in
deciding upon the effective cessation of atmospheric tests, gave an
undertaking to the international community to which his words were
addressed. x x x (Emphasis and underscoring supplied)
As gathered from the above-quoted ruling of the ICJ, public statements of a
state representative may be construed as a unilateral declaration only when
the following conditions are present: the statements were clearly addressed to
the international community, the state intended to be bound to that community
by its statements, and that not to give legal effect to those statements would
be detrimental to the security of international intercourse. Plainly, unilateral
declarations arise only in peculiar circumstances.
The limited applicability of the Nuclear Tests Case ruling was recognized in a
later case decided by the ICJ entitled Burkina Faso v. Mali,183 also known as
the Case Concerning the Frontier Dispute. The public declaration subject of
that case was a statement made by the President of Mali, in an interview by a
foreign press agency, that Mali would abide by the decision to be issued by a
commission of the Organization of African Unity on a frontier dispute then
pending between Mali and Burkina Faso.
Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's
President was not a unilateral act with legal implications. It clarified that its
ruling in the Nuclear Tests case rested on the peculiar circumstances
surrounding the French declaration subject thereof, to wit:
40. In order to assess the intentions of the author of a unilateral act, account
must be taken of all the factual circumstances in which the act occurred. For
example, in the Nuclear Tests cases, the Court took the view that since the
applicant States were not the only ones concerned at the possible continuance
of atmospheric testing by the French Government, that Government's
unilateral declarations had conveyed to the world at large, including the
Applicant, its intention effectively to terminate these tests (I.C.J. Reports 1974,
p. 269, para. 51; p. 474, para. 53). In the particular circumstances of those
cases, the French Government could not express an intention to be bound
otherwise than by unilateral declarations. It is difficult to see how it could have
accepted the terms of a negotiated solution with each of the applicants without
thereby jeopardizing its contention that its conduct was lawful. The
circumstances of the present case are radically different. Here, there was
nothing to hinder the Parties from manifesting an intention to accept the
binding character of the conclusions of the Organization of African Unity
Mediation Commission by the normal method: a formal agreement on the basis
of reciprocity. Since no agreement of this kind was concluded between the
Parties, the Chamber finds that there are no grounds to interpret the
declaration made by Mali's head of State on 11 April 1975 as a unilateral act
with legal implications in regard to the present case. (Emphasis and
underscoring supplied)
Assessing the MOA-AD in light of the above criteria, it would not have
amounted to a unilateral declaration on the part of the Philippine State to the
international community. The Philippine panel did not draft the same with the
clear intention of being bound thereby to the international community as a
whole or to any State, but only to the MILF. While there were States and
international organizations involved, one way or another, in the negotiation and
projected signing of the MOA-AD, they participated merely as witnesses or, in
the case of Malaysia, as facilitator. As held in the Lom Accord case, the mere
fact that in addition to the parties to the conflict, the peace settlement is signed
by representatives of states and international organizations does not mean
that the agreement is internationalized so as to create obligations in
international law.
Since the commitments in the MOA-AD were not addressed to States, not to
give legal effect to such commitments would not be detrimental to the security
of international intercourse - to the trust and confidence essential in the
relations among States.
In one important respect, the circumstances surrounding the MOA-AD are
closer to that of Burkina Faso wherein, as already discussed, the Mali
President's statement was not held to be a binding unilateral declaration by
the ICJ. As in that case, there was also nothing to hinder the Philippine panel,
had it really been its intention to be bound to other States, to manifest that
intention by formal agreement. Here, that formal agreement would have come
about by the inclusion in the MOA-AD of a clear commitment to be legally
bound to the international community, not just the MILF, and by an equally
clear indication that the signatures of the participating states-representatives
would constitute an acceptance of that commitment. Entering into such a
formal agreement would not have resulted in a loss of face for the Philippine
government before the international community, which was one of the
difficulties that prevented the French Government from entering into a formal
agreement with other countries. That the Philippine panel did not enter into
such a formal agreement suggests that it had no intention to be bound to the
international community. On that ground, the MOA-AD may not be considered
a unilateral declaration under international law.
The MOA-AD not being a document that can bind the Philippines under
international law notwithstanding, respondents' almost consummated act of
guaranteeing amendments to the legal framework is, by itself, sufficient to
constitute grave abuse of discretion. The grave abuse lies not in the fact that
they considered, as a solution to the Moro Problem, the creation of a state
within a state, but in their brazen willingness to guarantee that Congress and
the sovereign Filipino people would give their imprimatur to their solution.
Upholding such an act would amount to authorizing a usurpation of the
constituent powers vested only in Congress, a Constitutional Convention, or
the people themselves through the process of initiative, for the only way that
the Executive can ensure the outcome of the amendment process is through
an undue influence or interference with that process.
The sovereign people may, if it so desired, go to the extent of giving up a
portion of its own territory to the Moros for the sake of peace, for it can change
the Constitution in any it wants, so long as the change is not inconsistent with
what, in international law, is known as Jus Cogens.184 Respondents,
however, may not preempt it in that decision.
SUMMARY
The petitions are ripe for adjudication. The failure of respondents to consult
the local government units or communities affected constitutes a departure by
respondents from their mandate under E.O. No. 3. Moreover, respondents
exceeded their authority by the mere act of guaranteeing amendments to the
Constitution. Any alleged violation of the Constitution by any branch of
government is a proper matter for judicial review.
As the petitions involve constitutional issues which are of paramount public
interest or of transcendental importance, the Court grants the petitioners,
petitioners-in-intervention and intervening respondents the requisite locus
standi in keeping with the liberal stance adopted in David v. Macapagal-Arroyo.
Contrary to the assertion of respondents that the non-signing of the MOA-AD
and the eventual dissolution of the GRP Peace Panel mooted the present
petitions, the Court finds that the present petitions provide an exception to the
"moot and academic" principle in view of (a) the grave violation of the
Constitution involved; (b) the exceptional character of the situation and
paramount public interest; (c) the need to formulate controlling principles to
guide the bench, the bar, and the public; and (d) the fact that the case is
capable of repetition yet evading review.
The MOA-AD is a significant part of a series of agreements necessary to carry
out the GRP-MILF Tripoli Agreement on Peace signed by the government and
the MILF back in June 2001. Hence, the present MOA-AD can be renegotiated
or another one drawn up that could contain similar or significantly dissimilar
provisions compared to the original.
The Court, however, finds that the prayers for mandamus have been rendered
moot in view of the respondents' action in providing the Court and the
petitioners with the official copy of the final draft of the MOA-AD and its
annexes.
The people's right to information on matters of public concern under Sec. 7,
Article III of the Constitution is in splendid symmetry with the state policy of full
public disclosure of all its transactions involving public interest under Sec. 28,
Article II of the Constitution. The right to information guarantees the right of the
people to demand information, while Section 28 recognizes the duty of
officialdom to give information even if nobody demands. The complete and
effective exercise of the right to information necessitates that its
complementary provision on public disclosure derive the same self-executory
nature, subject only to reasonable safeguards or limitations as may be
provided by law.
The contents of the MOA-AD is a matter of paramount public concern involving
public interest in the highest order. In declaring that the right to information
contemplates steps and negotiations leading to the consummation of the
contract, jurisprudence finds no distinction as to the executory nature or
commercial character of the agreement.
An essential element of these twin freedoms is to keep a continuing dialogue
or process of communication between the government and the people.
Corollary to these twin rights is the design for feedback mechanisms. The right
to public consultation was envisioned to be a species of these public rights.
At least three pertinent laws animate these constitutional imperatives and
justify the exercise of the people's right to be consulted on relevant matters
relating to the peace agenda.
One, E.O. No. 3 itself is replete with mechanics for continuing consultations on
both national and local levels and for a principal forum for consensus-building.
In fact, it is the duty of the Presidential Adviser on the Peace Process to
conduct regular dialogues to seek relevant information, comments, advice, and
recommendations from peace partners and concerned sectors of society.
Two, Republic Act No. 7160 or the Local Government Code of 1991 requires
all national offices to conduct consultations before any project or program
critical to the environment and human ecology including those that may call for
the eviction of a particular group of people residing in such locality, is
implemented therein. The MOA-AD is one peculiar program that unequivocally
and unilaterally vests ownership of a vast territory to the Bangsamoro people,
which could pervasively and drastically result to the diaspora or displacement
of a great number of inhabitants from their total environment.
Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997
provides for clear-cut procedure for the recognition and delineation of ancestral
domain, which entails, among other things, the observance of the free and
prior informed consent of the Indigenous Cultural Communities/Indigenous
Peoples. Notably, the statute does not grant the Executive Department or any
government agency the power to delineate and recognize an ancestral domain
claim by mere agreement or compromise.
The invocation of the doctrine of executive privilege as a defense to the
general right to information or the specific right to consultation is untenable.
The various explicit legal provisions fly in the face of executive secrecy. In any
event, respondents effectively waived such defense after it unconditionally
disclosed the official copies of the final draft of the MOA-AD, for judicial
compliance and public scrutiny.
In sum, the Presidential Adviser on the Peace Process committed grave abuse
of discretion when he failed to carry out the pertinent consultation process, as
mandated by E.O. No. 3, Republic Act No. 7160, and Republic Act No. 8371.
The furtive process by which the MOA-AD was designed and crafted runs
contrary to and in excess of the legal authority, and amounts to a whimsical,
capricious, oppressive, arbitrary and despotic exercise thereof. It illustrates a
gross evasion of positive duty and a virtual refusal to perform the duty enjoined.
The MOA-AD cannot be reconciled with the present Constitution and laws. Not
only its specific provisions but the very concept underlying them, namely, the
associative relationship envisioned between the GRP and the BJE, are
unconstitutional, for the concept presupposes that the associated entity is a
state and implies that the same is on its way to independence.
While there is a clause in the MOA-AD stating that the provisions thereof
inconsistent with the present legal framework will not be effective until that
framework is amended, the same does not cure its defect. The inclusion of
provisions in the MOA-AD establishing an associative relationship between the
BJE and the Central Government is, itself, a violation of the Memorandum of
Instructions From The President dated March 1, 2001, addressed to the
government peace panel. Moreover, as the clause is worded, it virtually
guarantees that the necessary amendments to the Constitution and the laws
will eventually be put in place. Neither the GRP Peace Panel nor the President
herself is authorized to make such a guarantee. Upholding such an act would
amount to authorizing a usurpation of the constituent powers vested only in
Congress, a Constitutional Convention, or the people themselves through the
process of initiative, for the only way that the Executive can ensure the
outcome of the amendment process is through an undue influence or
interference with that process.
While the MOA-AD would not amount to an international agreement or
unilateral declaration binding on the Philippines under international law,
respondents' act of guaranteeing amendments is, by itself, already a
constitutional violation that renders the MOA-AD fatally defective.
WHEREFORE, respondents' motion to dismiss is DENIED. The main and
intervening petitions are GIVEN DUE COURSE and hereby GRANTED.
The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-
MILF Tripoli Agreement on Peace of 2001 is declared contrary to law and the
Constitution.
SO ORDERED.
B. Principles of Local Autonomy
I. Principle of Local Authority
1. Basco v. PAGCOR
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. 2nd 534, 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.1wphi1 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.
2. Lina v. Pano
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.
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 mayor's 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
SAPAGKA'T, ang sugal dito sa lalawigan ng Laguna ay talamak na;
SAPAGKA'T, ang sugal ay nagdudulot ng masasamang impluwensiya lalo't
higit sa mga kabataan;
KUNG KAYA'T 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 lalo't 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 plaintiff's 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 government's 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 respondent's 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 province's 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
mayor's 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
mayor's 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 government's objection to the lotto,
such resolution is valid. This is part of the local government's autonomy to air
its views which may be contrary to that of the national government's. 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 Board's
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. . . .
(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 people's 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 mayor's 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.
3. Limbona v. Mangelin
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 3. Dagalangit, Rakil
which reads:
4. Dela Fuente, Antonio
The Committee on Muslim Affairs well undertake consultations and dialogues
with local government officials, civic, religious organizations and traditional 5. Mangelen, Conte
leaders on the recent and present political developments and other issues
affecting Regions IX and XII. 6. Ortiz, Jesus

The result of the conference, consultations and dialogues would hopefully 7. Palomares, Diego
chart the autonomous governments of the two regions as envisioned and may
prod the President to constitute immediately the Regional Consultative 8. Sinsuat, Bimbo
Commission as mandated by the Commission.
9. Tomawis, Acmad
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 10. Tomawis, Jerry
of the Philippines. Your presence, unstinted support and cooperation is (sic)
indispensable. After declaring the presence of a quorum, the Speaker Pro-Tempore was
authorized to preside in the session. On Motion to declare the seat of the
5. Consistent with the said invitation, petitioner sent a telegram to Acting Speaker vacant, all Assemblymen in attendance voted in the affirmative,
Secretary Johnny Alimbuyao of the Assembly to wire all Assemblymen that hence, the chair declared said seat of the Speaker vacant. 8. On November 5,
there shall be no session in November as "our presence in the house 1987, the session of the Assembly resumed with the following Assemblymen
committee hearing of Congress take (sic) precedence over any pending present:
business in batasang pampook ... ."
1. Mangelen Conte-Presiding Officer
6. In compliance with the aforesaid instruction of the petitioner, Acting
Secretary Alimbuyao sent to the members of the Assembly the following 2. Ali Salic
telegram:
3. Ali Salindatu
TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM
RECEIVED FROM SPEAKER LIMBONA QUOTE CONGRESSMAN JIMMY 4. Aratuc, Malik
MATALAM CHAIRMAN OF THE HOUSE COMMITTEE ON MUSLIM
AFFAIRS REQUESTED ME TO ASSIST SAID COMMITTEE IN THE 5. Cajelo, Rene
DISCUSSION OF THE PROPOSED AUTONOMY ORGANIC NOV. 1ST TO
15. HENCE WERE ALL ASSEMBLYMEN THAT THERE SHALL BE NO 6. Conding, Pilipinas (sic)
SESSION IN NOVEMBER AS OUR PRESENCE IN THE HOUSE
COMMITTEE HEARING OF CONGRESS TAKE PRECEDENCE OVER ANY 7. Dagalangit, Rakil
PENDING BUSINESS IN BATASANG PAMPOOK OF MATALAM FOLLOWS
UNQUOTE REGARDS. 8. Dela Fuente, Antonio

7. On November 2, 1987, the Assembly held session in defiance of petitioner's 9. Ortiz, Jesus
advice, with the following assemblymen present:
10 Palomares, Diego
1. Sali, Salic
11. Quijano, Jesus
2. Conding, Pilipinas (sic)
12. Sinsuat, Bimbo

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." 11 Certainly, 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 18 specified
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.
4. Disomangcop v. Datumanong
[G.R. No. 149848. November 25, 2004]
ARSADI M. DISOMANGCOP and RAMIR M. DIMALOTANG, petitioners, vs.
THE SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND
HIGHWAYS SIMEON A. DATUMANONG and THE SECRETARY OF
BUDGET and MANAGEMENT EMILIA T. BONCODIN, respondents.
DECISION
TINGA, J.:
At stake in the present case is the fate of regional autonomy for Muslim
Mindanao which is the epoch-making, Constitution-based project for achieving
national unity in diversity.
Challenged in the instant petition for certiorari, prohibition and mandamus with
prayer for a temporary restraining order and/or writ of preliminary injunction[1]
(Petition) are the constitutionality and validity of Republic Act No. 8999 (R.A.
8999),[2] entitled An Act Establishing An Engineering District in the First
District of the Province of Lanao del Sur and Appropriating Funds Therefor,
and Department of Public Works and Highways (DPWH) Department Order
No. 119 (D.O. 119)[3] on the subject, Creation of Marawi Sub-District
Engineering Office.
The Background
The uncontested legal and factual antecedents of the case follow.
For the first time in its history after three Constitutions, the Philippines ordained
the establishment of regional autonomy with the adoption of the 1987
Constitution. Sections 1[4] and 15, Article X mandate the creation of
autonomous regions in Muslim Mindanao and in the Cordilleras. Section 15
specifically provides that [t]here 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. To effectuate this mandate, the Charter devotes a number of
provisions under Article X.[5]
Pursuant to the constitutional mandate, Republic Act No. 6734 (R.A. 6734),
entitled An Act Providing for An Organic Act for the Autonomous Region in
Muslim Mindanao, was enacted and signed into law on 1 August 1989. The
law called for the holding of a plebiscite in the provinces of Basilan, Cotabato,
Davao del Sur, Lanao del Norte, Lanao del Sur, Maguindanao, Palawan, South
Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte, and
Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General
Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga.[6] In the
ensuing plebiscite held on 19 November 1989, only four (4) provinces voted
for the creation of an autonomous region, namely: Lanao del Sur,
Maguindanao, Sulu and Tawi-Tawi. These provinces became the Autonomous
Region in Muslim Mindanao (ARMM).[7] The law contains elaborate provisions
on the powers of the Regional Government and the areas of jurisdiction which
are reserved for the National Government.[8]
In accordance with R.A. 6734, then President Corazon C. Aquino issued on
12 October 1990, Executive Order No. 426 (E.O. 426), entitled Placing the
Control and Supervision of the Offices of the Department of Public Works and
Highways within the Autonomous Region in Muslim Mindanao under the
Autonomous Regional Government, and for other purposes. Sections 1 to 3[9]
of the Executive Order are its operative provisions.
ARMM was formally organized on 6 November 1990. President Corazon C.
Aquino flew to Cotabato, the seat of the Regional Government, for the
inauguration. At that point, she had already signed seven (7) Executive Orders
devolving to ARMM the powers of seven (7) cabinet departments, namely: (1)
local government; (2) labor and employment; (3) science and technology; (4)
public works and highways; (5) social welfare and development; (6) tourism;
and (7) environment and national resources.[10]
Nearly nine (9) years later, on 20 May 1999, then Department of Public Works
and Highways (DPWH) Secretary Gregorio R. Vigilar issued D.O. 119 which
reads, thus:
Subject: Creation of Marawi Sub-District Engineering Office
Pursuant to Sections 6 and 25 of Executive Order No. 124 dated 30 January
1987, there is hereby created a DPWH Marawi Sub-District Engineering Office
which shall have jurisdiction over all national infrastructure projects and
facilities under the DPWH within Marawi City and the province of Lanao del
Sur. The headquarters of the Marawi Sub-District Engineering Office shall be
at the former quarters of the Marawi City Engineering Office.
Personnel of the above-mentioned Sub-District Engineering Office shall be
made up of employees of the National Government Section of the former
Marawi City Engineering Office who are now assigned with the Iligan City Sub-
District Engineering Office as may be determined by the DPWH Region XII
Regional Director. (Emphasis supplied)
Almost two (2) years later, on 17 January 2001, then President Joseph E.
Estrada approved and signed into law R.A. 8999. The text of the law reads:
AN ACT ESTABLISHING AN ENGINEERING DISTRICT IN THE FIRST
DISTRICT OF THE PROVINCE OF LANAO DEL SUR AND
APPROPRIATING FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:
SECTION 1. The City of Marawi and the municipalities comprising the First
District of the Province of Lanao del Sur are hereby constituted into an
engineering district to be known as the First Engineering District of the
Province of Lanao del Sur.
SEC. 2. The office of the engineering district hereby created shall be
established in Marawi City, Province of Lanao del Sur.
SEC. 3. The amount necessary to carry out the provisions of this Act shall be
included in the General Appropriations Act of the year following its enactment
into law. Thereafter, such sums as may be necessary for the maintenance and
continued operation of the engineering district office shall be included in the
annual General Appropriations Act.
SEC. 4. This Act shall take effect upon its approval. (Emphasis supplied)
Congress later passed Republic Act No. 9054 (R.A. 9054), entitled An Act to
Strengthen and Expand the Organic Act for the Autonomous Region in Muslim
Mindanao, Amending for the Purpose Republic Act No. 6734, entitled An Act
Providing for the Autonomous Region in Muslim Mindanao, as Amended. Like
its forerunner, R.A. 9054 contains detailed provisions on the powers of the
Regional Government and the retained areas of governance of the National
Government.[11]
R.A. 9054 lapsed into law[12] on 31 March 2001. It was ratified in a plebiscite
held on 14 August 2001. The province of Basilan and the City of Marawi also
voted to join ARMM on the same date. R.A. 6734 and R.A. 9054 are
collectively referred to as the ARMM Organic Acts.
On 23 July 2001, petitioners Arsadi M. Disomangcop (Disomangcop) and
Ramir M. Dimalotang (Dimalotang) addressed a petition to then DPWH
Secretary Simeon A. Datumanong, seeking the revocation of D.O. 119 and the
non-implementation of R.A. 8999. No action, however, was taken on the
petition.[13]
Consequently, petitioners Disomangcop and Dimalotang filed the instant
petition, in their capacity as Officer-in-Charge and District Engineer/Engineer
II, respectively, of the First Engineering District of the Department of Public
Works and Highways, Autonomous Region in Muslim Mindanao (DPWH-
ARMM) in Lanao del Sur.
Petitioners seek the following principal reliefs: (1) to annul and set aside D.O.
119; (2) to prohibit respondent DPWH Secretary from implementing D.O. 119
and R.A. 8999 and releasing funds for public works projects intended for Lanao
del Sur and Marawi City to the Marawi Sub-District Engineering Office and
other administrative regions of DPWH; and (3) to compel the Secretary of the
Department of Budget and Management (DBM) to release all funds for public
works projects intended for Marawi City and the First District of Lanao del Sur
to the DPWH-ARMM First Engineering District in Lanao del Sur only; and to
compel respondent DPWH Secretary to let the DPWH-ARMM First
Engineering District in Lanao del Sur implement all public works projects within
its jurisdictional area.[14]
The petition includes an urgent application for the issuance of a temporary
restraining order (TRO) and, after hearing, a writ of preliminary injunction, to
enjoin respondent DBM Secretary from releasing funds for public works
projects in Lanao del Sur to entities other than the DPWH-ARMM First
Engineering District in Lanao del Sur, and also to restrain the DPWH Secretary
from allowing others besides the DPWH-ARMM First Engineering District in
Lanao del Sur to implement public works projects in Lanao del Sur.[15]
To support their petition, petitioners allege that D.O. 119 was issued with grave
abuse of discretion and that it violates the constitutional autonomy of the
ARMM. They point out that the challenged Department Order has tasked the
Marawi Sub-District Engineering Office with functions that have already been
devolved to the DPWH-ARMM First Engineering District in Lanao del Sur.[16]
Petitioners also contend that R.A. 8999 is a piece of legislation that was not
intelligently and thoroughly studied, and that the explanatory note to House Bill
No. 995 (H.B. 995) from which the law originated is questionable. Petitioners
assert as well that prior to the sponsorship of the law, no public hearing nor
consultation with the DPWH-ARMM was made. The House Committee on
Public Works and Highways (Committee) failed to invite a single official from
the affected agency. Finally, petitioners argue that the law was skillfully timed
for signature by former President Joseph E. Estrada during the pendency of
the impeachment proceedings.[17]
In its resolution of 8 October 2001, the Court required respondents to file their
comment.[18] In compliance, respondents DPWH Secretary and DBM
Secretary, through the Solicitor General, filed on 7 January 2002, their
Comment.
In their Comment,[19] respondents, through the Office of the Solicitor General,
maintain the validity of D.O. 119, arguing that it was issued in accordance with
Executive Order No. 124 (E.O. 124).[20] In defense of the constitutionality of
R.A. 8999, they submit that the powers of the autonomous regions did not
diminish the legislative power of Congress.[21] Respondents also contend that
the petitioners have no locus standi or legal standing to assail the
constitutionality of the law and the department order. They note that petitioners
have no personal stake in the outcome of the controversy.[22]
Asserting their locus standi, petitioners in their Memorandum[23] point out that
they will suffer actual injury as a result of the enactments complained of.[24]
Jurisdictional Considerations
First, the jurisdictional predicates.
The 1987 Constitution is explicit in defining the scope of judicial power. It
establishes the authority of the courts to determine in an appropriate action the
validity of acts of the political departments. It speaks of judicial prerogative in
terms of duty.[25]
Jurisprudence has laid down the following requisites for the exercise of judicial
power: First, there must be before the Court an actual case calling for the
exercise of judicial review. Second, the question before the Court must be ripe
for adjudication. Third, the person challenging the validity of the act must have
standing to challenge. Fourth, the question of constitutionality must have been
raised at the earliest opportunity. Fifth, the issue of constitutionality must be
the very lis mota of the case.[26]
In seeking to nullify acts of the legislature and the executive department on the
ground that they contravene the Constitution, the petition no doubt raises a
justiciable controversy. As held in Taada v. Angara,[27] where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it
becomes not only the right but in fact the duty of the judiciary to settle the
dispute. But in deciding to take jurisdiction over this petition questioning acts
of the political departments of government, the Court will not review the
wisdom, merits, or propriety thereof, but will strike them down only on either of
two grounds: (1) unconstitutionality or illegality and (2) grave abuse of
discretion.[28]
For an abuse to be grave, the power must be exercised in an arbitrary or
despotic manner by reason of passion or personal hostility. The abuse of
discretion must be patent and gross as to amount to an evasion of a positive
duty, or a virtual refusal to perform the duty enjoined or to act in contemplation
of law. There is grave abuse of discretion when respondent acts in a capricious
or whimsical manner in the exercise of its judgment as to be equivalent to lack
of jurisdiction.[29]
The challenge to the legal standing of petitioners cannot succeed. Legal
standing or locus standi is defined as a personal and substantial interest in the
case such that the party has sustained or will sustain direct injury as a result
of the governmental act that is being challenged. The term interest means a
material interest, an interest in issue affected by the decree, as distinguished
from a mere interest in the question involved, or a mere incidental interest.[30]
A party challenging the constitutionality of a law, act, or statute must show not
only that the law is invalid, but also that he has sustained or is in immediate,
or imminent danger of sustaining some direct injury as a result of its
enforcement, and not merely that he suffers thereby in some indefinite way.
He must show that he has been, or is about to be, denied some right or
privilege to which he is lawfully entitled, or that he is about to be subjected to
some burdens or penalties by reason of the statute complained of.[31]
But following the new trend, this Court is inclined to take cognizance of a suit
although it does not satisfy the requirement of legal standing when paramount
interests are involved. In several cases, the Court has adopted a liberal stance
on the locus standi of a petitioner where the petitioner is able to craft an issue
of transcendental significance to the people.[32]
In the instant case, petitioner Disomangcop holds the position of Engineer IV.
When he filed this petition, he was the Officer-in-Charge, Office of the District
Engineer of the First Engineering District of DPWH-ARMM, Lanao del Sur. On
the other hand, petitioner Dimalotang is an Engineer II and President of the
rank and file employees also of the First Engineering District of DPWH-ARMM
in Lanao del Sur. Both are charged with the duty and responsibility of
supervising and implementing all public works projects to be undertaken and
being undertaken in Lanao del Sur which is the area of their jurisdiction.[33]
It is thus not far-fetched that the creation of the Marawi Sub-District
Engineering Office under D.O. 119 and the creation of and appropriation of
funds to the First Engineering District of Lanao del Sur as directed under R.A.
8999 will affect the powers, functions and responsibilities of the petitioners and
the DPWH-ARMM. As the two offices have apparently been endowed with
functions almost identical to those of DPWH-ARMM First Engineering District
in Lanao del Sur, it is likely that petitioners are in imminent danger of being
eased out of their duties and, not remotely, even their jobs. Their material and
substantial interests will definitely be prejudiced by the enforcement of D.O.
119 and R.A. 8999. Such injury is direct and immediate. Thus, they can
legitimately challenge the validity of the enactments subject of the instant case.
Points of Contention
In the petition before us, petitioners contend that R.A. 8999 and D.O. 119 are
unconstitutional and were issued with grave abuse of discretion.
We agree in part.
Republic Act No. 8999
At the outset, let it be made clear that it is not necessary to declare R.A. No.
8999 unconstitutional for the adjudication of this case. The accepted rule is
that the Court will not resolve a constitutional question unless it is the lis mota
of the case, or if the case can be disposed of or settled on other grounds.[34]
The plain truth is the challenged law never became operative and was
superseded or repealed by a subsequent enactment.
The ARMM Organic Acts are deemed a part of the regional autonomy scheme.
While they are classified as statutes, the Organic Acts are more than ordinary
statutes because they enjoy affirmation by a plebiscite.[35] Hence, the
provisions thereof cannot be amended by an ordinary statute, such as R.A.
8999 in this case. The amendatory law has to be submitted to a plebiscite.
We quote excerpts of the deliberations of the Constitutional Commission:
FR. BERNAS. Yes, that is the reason I am bringing this up. This thing involves
some rather far-reaching consequences also in relation to the issue raised by
Commissioner Romulo with respect to federalism. Are we, in effect, creating
new categories of laws? Generally, we have statutes and constitutional
provisions. Is this organic act equivalent to a constitutional provision? If it is
going to be equivalent to a constitutional provision, it would seem to me that
the formulation of the provisions of the organic act will have to be done by the
legislature, acting as a constituent assembly, and therefore, subject to the
provisions of the Article on Amendments. That is the point that I am trying to
bring up. In effect, if we opt for federalism, it would really involve an act of the
National Assembly or Congress acting as a constituent assembly and present
amendments to this Constitution, and the end product itself would be a
constitutional provision which would only be amendable according to the
processes indicated in the Constitution.
MR. OPLE. Madam President, may I express my personal opinion in this
respect.
I think to require Congress to act as a constituent body before enacting an
organic act would be to raise an autonomous region to the same level as the
sovereign people of the whole country. And I think the powers of the Congress
should be quite sufficient in enacting a law, even if it is now exalted to the level
of an organic act for the purpose of providing a basic law for an autonomous
region without having to transform itself into a constituent assembly. We are
dealing still with one subordinate subdivision of the State even if it is now
vested with certain autonomous powers on which its own legislature can pass
laws.
FR. BERNAS. So the questions I have raised so far with respect to this organic
act are: What segment of the population will participate in the plebiscite? In
what capacity would the legislature be acting when it passes this? Will it be a
constituent assembly or merely a legislative body? What is the nature,
therefore, of this organic act in relation to ordinary statutes and the
Constitution? Finally, if we are going to amend this organic act, what process
will be followed?
MR. NOLLEDO. May I answer that, please, in the light of what is now
appearing in our report.
First, only the people who are residing in the units composing the regions
should be allowed to participate in the plebiscite. Second, the organic act has
the character of a charter passed by the Congress, not as a constituent
assembly, but as an ordinary legislature and, therefore, the organic act will still
be subject to amendments in the ordinary legislative process as now
constituted, unless the Gentlemen has another purpose.
FR. BERNAS. But with plebiscite again.
MR. NOLLEDO. Those who will participate in the plebiscite are those who are
directly affected, the inhabitants of the units constitutive of the region.
(Emphasis supplied)[36]
Although R.A. 9054 was enacted later, it reaffirmed the imperativeness of the
plebiscite requirement.[37] In fact, R.A. 9054 itself, being the second or later
ARMM Organic Act, was subjected to and ratified in a plebiscite.
The first ARMM Organic Act, R.A. 6074, as implemented by E.O. 426,
devolved the functions of the DPWH in the ARMM which includes Lanao del
Sur (minus Marawi City at the time)[38] to the Regional Government. By
creating an office with previously devolved functions, R.A. 8999, in essence,
sought to amend R.A. 6074. The amendatory law should therefore first obtain
the approval of the people of the ARMM before it could validly take effect.
Absent compliance with this requirement, R.A. 8999 has not even become
operative.
From another perspective, R.A. 8999 was repealed and superseded by R.A.
9054. Where a statute of later date clearly reveals an intention on the part of
the legislature to abrogate a prior act on the subject, that intention must be
given effect.
Of course, the intention to repeal must be clear and manifest.[39] Implied
repeal by irreconcilable inconsistency takes place when the two statutes cover
the same subject matter; they are clearly inconsistent and incompatible with
each other that they cannot be reconciled or harmonized; and both cannot be
given effect, that is, that one law cannot be enforced without nullifying the
other.[40]
The Court has also held that statutes should be construed in light of the
objective to be achieved and the evil or mischief to be suppressed, and they
should be given such construction as will advance the object, suppress the
mischief and secure the benefits intended.[41]
R.A. 9054 is anchored on the 1987 Constitution. It advances the constitutional
grant of autonomy by detailing the powers of the ARG covering, among others,
Lanao del Sur and Marawi City, one of which is its jurisdiction over regional
urban and rural planning. R.A. 8999, however, ventures to reestablish the
National Governments jurisdiction over infrastructure programs in Lanao del
Sur. R.A. 8999 is patently inconsistent with R.A. 9054, and it destroys the latter
laws objective.
Clearly, R.A. 8999 is antagonistic to and cannot be reconciled with both ARMM
Organic Acts, R.A. 6734 and R.A. 9054. The kernel of the antagonism and
disharmony lies in the regional autonomy which the ARMM Organic Acts
ordain pursuant to the Constitution. On the other hand, R.A. 8999 contravenes
true decentralization which is the essence of regional autonomy.
Regional Autonomy Under
R.A. 6734 and R.A. 9054
The 1987 Constitution mandates regional autonomy to give a bold and
unequivocal answer to the cry for a meaningful, effective and forceful
autonomy.[42] According to Commissioner Jose Nolledo, Chairman of the
Committee which drafted the provisions, it is an indictment against the status
quo of a unitary system that, to my mind, has ineluctably tied the hands of
progress in our country . . . our varying regional characteristics are factors to
capitalize on to attain national strength through decentralization.[43]
The idea behind the Constitutional provisions for autonomous regions is to
allow the separate development of peoples with distinctive cultures and
traditions.[44] These cultures, as a matter of right, must be allowed to
flourish.[45]
Autonomy, as a national policy, recognizes the wholeness of the Philippine
society in its ethnolinguistic, cultural, and even religious diversities. It strives
to free Philippine society of the strain and wastage caused by the
assimilationist approach.[46] Policies emanating from the legislature are
invariably assimilationist in character despite channels being open for minority
representation. As a result, democracy becomes an irony to the minority
group.[47]
Several commissioners echoed the pervasive sentiment in the plenary
sessions in their own inimitable way. Thus, Commissioner Blas Ople referred
to the recognition that the Muslim Mindanao and the Cordilleras do not belong
to the dominant national community as the justification for conferring on them
a measure of legal self-sufficiency, meaning self-government, so that they will
flourish politically, economically and culturally, with the hope that after
achieving parity with the rest of the country they would give up their own
autonomous region in favor of joining the national mainstream.[48] For his part,
the Muslim delegate, Commissioner Ahmad Alonto, spoke of the diversity of
cultures as the framework for nation-building.[49] Finally, excerpts of the
poignant plea of Commissioner Ponciano Bennagen deserve to be quoted
verbatim:
. . . They see regional autonomy as the answer to their centuries of struggle
against oppression and exploitation. For so long, their names and identities
have been debased. Their ancestral lands have been ransacked for their
treasures, for their wealth. Their cultures have been defiled, their very lives
threatened, and worse, extinguished, all in the name of national development;
all in the name of public interest; all in the name of common good; all in the
name of the right to property; all in the name of Regalian Doctrine; all in the
name of national security. These phrases have meant nothing to our
indigenous communities, except for the violation of their human rights.
...
Honorable Commissioners, we wish to impress upon you the gravity of the
decision to be made by every single one of us in this Commission. We have
the overwhelming support of the Bangsa Moro and the Cordillera Constitution.
By this we mean meaningful and authentic regional autonomy. We propose
that we have a separate Article on the autonomous regions for the Bangsa
Moro and Cordillera people clearly spelled out in this Constitution, instead of
prolonging the agony of their vigil and their struggle. This, too is a plea for
national peace. Let us not pass the buck to the Congress to decide on this. Let
us not wash our hands of our responsibility to attain national unity and peace
and to settle this problem and rectify past injustices, once and for all.[50]
The need for regional autonomy is more pressing in the case of the Filipino
Muslims and the Cordillera people who have been fighting for it. Their political
struggle highlights their unique cultures and the unresponsiveness of the
unitary system to their aspirations.[51] The Moros struggle for self-
determination dates as far back as the Spanish conquest in the Philippines.
Even at present, the struggle goes on.[52]
Perforce, regional autonomy is also a means towards solving existing serious
peace and order problems and secessionist movements. Parenthetically,
autonomy, decentralization and regionalization, in international law, have
become politically acceptable answers to intractable problems of nationalism,
separatism, ethnic conflict and threat of secession.[53]
However, the creation of autonomous regions does not signify the
establishment of a sovereignty distinct from that of the Republic, as it can be
installed only within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines.[54]
Regional autonomy is the degree of self-determination exercised by the local
government unit vis--vis the central government.
In international law, the right to self-determination need not be understood as
a right to political separation, but rather as a complex net of legal-political
relations between a certain people and the state authorities. It ensures the
right of peoples to the necessary level of autonomy that would guarantee the
support of their own cultural identity, the establishment of priorities by the
communitys internal decision-making processes and the management of
collective matters by themselves.[55]
If self-determination is viewed as an end in itself reflecting a preference for
homogeneous, independent nation-states, it is incapable of universal
application without massive disruption. However, if self-determination is
viewed as a means to an endthat end being a democratic, participatory political
and economic system in which the rights of individuals and the identity of
minority communities are protectedits continuing validity is more easily
perceived.[56]
Regional autonomy refers to the granting of basic internal government powers
to the people of a particular area or region with least control and supervision
from the central government.[57]
The objective of the autonomy system is to permit determined groups, with a
common tradition and shared social-cultural characteristics, to develop freely
their ways of life and heritage, exercise their rights, and be in charge of their
own business. This is achieved through the establishment of a special
governance regime for certain member communities who choose their own
authorities from within the community and exercise the jurisdictional authority
legally accorded to them to decide internal community affairs.[58]
In the Philippine setting, regional autonomy implies the cultivation of more
positive means for national integration. It would remove the wariness among
the Muslims, increase their trust in the government and pave the way for the
unhampered implementation of the development programs in the region.[59]
Again, even a glimpse of the deliberations of the Constitutional Commission
could lend a sense of the urgency and the inexorable appeal of true
decentralization:
MR. OPLE. . . . We are writing a Constitution, of course, for generations to
come, not only for the present but for our posterity. There is no harm in
recognizing certain vital pragmatic needs for national peace and solidarity, and
the writing of this Constitution just happens at a time when it is possible for this
Commission to help the cause of peace and reconciliation in Mindanao and
the Cordilleras, by taking advantage of a heaven-sent opportunity. . . . [60]
...
MR. ABUBAKAR. . . . So in order to foreclose and convince the rest of the of
the Philippines that Mindanao autonomy will be granted to them as soon as
possible, more or less, to dissuade these armed men from going outside while
Mindanao will be under the control of the national government, let us establish
an autonomous Mindanao within our effort and capacity to do so within the
shortest possible time. This will be an answer to the Misuari clamor, not only
for autonomy but for independence.[61]
...
MR. OPLE. . . . The reason for this abbreviation of the period for the
consideration of the Congress of the organic acts and their passage is that we
live in abnormal times. In the case of Muslim Mindanao and the Cordilleras,
we know that we deal with questions of war and peace. These are momentous
issues in which the territorial integrity and the solidarity of this country are being
put at stake, in a manner of speaking.
We are writing a peace Constitution. We hope that the Article on Social Justice
can contribute to a climate of peace so that any civil strife in the countryside
can be more quickly and more justly resolved. We are providing for
autonomous regions so that we give constitutional permanence to the just
demands and grievances of our own fellow countrymen in the Cordilleras and
in Mindanao. One hundred thousand lives were lost in that struggle in
Mindanao, and to this day, the Cordilleras is being shaken by an armed
struggle as well as a peaceful and militant struggle.
...
Rather than give opportunity to foreign bodies, no matter how sympathetic to
the Philippines, to contribute to the settlement of this issue, I think the
Constitutional Commission ought not to forego the opportunity to put the stamp
of this Commission through definitive action on the settlement of the problems
that have nagged us and our forefathers for so long.[62]
A necessary prerequisite of autonomy is decentralization.[63]
Decentralization is a decision by the central government authorizing its
subordinates, whether geographically or functionally defined, to exercise
authority in certain areas. It involves decision-making by subnational units. It
is typically a delegated power, wherein a larger government chooses to
delegate certain authority to more local governments. Federalism implies
some measure of decentralization, but unitary systems may also decentralize.
Decentralization differs intrinsically from federalism in that the sub-units that
have been authorized to act (by delegation) do not possess any claim of right
against the central government.[64]
Decentralization comes in two formsdeconcentration and devolution.
Deconcentration is administrative in nature; it involves the transfer of functions
or the delegation of authority and responsibility from the national office to the
regional and local offices. This mode of decentralization is also referred to as
administrative decentralization.[65]
Devolution, on the other hand, connotes political decentralization, or the
transfer of powers, responsibilities, and resources for the performance of
certain functions from the central government to local government units.[66]
This is a more liberal form of decentralization since there is an actual transfer
of powers and responsibilities.[67] It aims to grant greater autonomy to local
government units in cognizance of their right to self-government, to make them
self-reliant, and to improve their administrative and technical capabilities.[68]
This Court elucidated the concept of autonomy in Limbona v. Mangelin,[69]
thus:
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, 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 favor of local government 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.
In the case, the Court reviewed the expulsion of a member from the
Sangguniang Pampook, Autonomous Region. It held that the Court may
assume jurisdiction as the local government unit, organized before 1987,
enjoys autonomy of the former category. It refused, though, to resolve whether
the grant of autonomy to Muslim Mindanao under the 1987 Constitution
involves, truly, an effort to decentralize power rather than mere
administration.[70]
A year later, in Cordillera Broad Coalition v. Commission on Audit,[71] the
Court, with the same composition, ruled without any dissent that the creation
of autonomous regions contemplates the grant of political autonomyan
autonomy which is greater than the administrative autonomy granted to local
government units. It held that the constitutional guarantee of local autonomy
in the Constitution (Art. X, Sec. 2) refers to administrative autonomy of local
government units or, cast in more technical language, the decentralization of
government authority. 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 to these regions.[72]
And by regional autonomy, the framers intended it to mean meaningful and
authentic regional autonomy.[73] As articulated by a Muslim author,
substantial and meaningful autonomy is the kind of local self-government
which allows the people of the region or area the power to determine what is
best for their growth and development without undue interference or dictation
from the central government.[74]
To this end, Section 16, Article X[75] limits the power of the President over
autonomous regions.[76] In essence, the provision also curtails the power of
Congress over autonomous regions.[77] Consequently, Congress will have to
re-examine national laws and make sure that they reflect the Constitutions
adherence to local autonomy. And in case of conflicts, the underlying spirit
which should guide its resolution is the Constitutions desire for genuine local
autonomy.[78]
The diminution of Congress powers over autonomous regions was confirmed
in Ganzon v. Court of Appeals,[79] wherein this Court held that the omission
(of as may be provided by law) signifies nothing more than to underscore local
governments autonomy from Congress and to break Congress control over
local government affairs.
This is true to subjects over which autonomous regions have powers, as
specified in Sections 18 and 20, Article X of the 1987 Constitution. Expressly
not included therein are powers over certain areas. Worthy of note is that the
area of public works is not excluded and neither is it reserved for the National
Government. The key provisions read, thus:
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 multisectoral 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 the 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. 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
general welfare of the people of the region. (Emphasis supplied)
E.O. 426 officially devolved the powers and functions of the DPWH in ARMM
to the Autonomous Regional Government (ARG). Sections 1 and 2 of E.O. 426
provide:
SECTION 1. Transfer of Control and Supervision. The offices of the
Department of Public Works and Highways (DPWH) within the Autonomous
Region in Muslim Mindanao (ARMM) including their functions, powers and
responsibilities, personnel, equipment, properties, budgets and liabilities are
hereby placed under the control and supervision of the Autonomous Regional
Government.
In particular, these offices are identified as the four (4) District Engineering
Offices (DEO) in each of the four provinces respectively and the three (3) Area
Equipment Services (AES) located in Tawi-Tawi, Sulu and Maguindanao
(Municipality of Sultan Kudarat).
SEC. 2. Functions Transferred. The Autonomous Regional Government shall
be responsible for highways, flood control and water resource development
systems, and other public works within the ARMM and shall exercise the
following functions:
1. Undertake and evaluate the planning, design, construction and works
supervision for the infrastructure projects whose location and impact are
confined within the ARMM;
2. Undertake the maintenance of infrastructure facilities within the ARMM and
supervise the maintenance of such local roads and other infrastructure
facilities receiving financial assistance from the National Government;
3. Ensure the implementation of laws, policies, programs, rules and regulations
regarding infrastructure projects as well as all public and private physical
structures within the ARMM;
4. Provide technical assistance related to their functions to other agencies
within the ARMM, especially the local government units;
5. Coordinate with other national and regional government departments,
agencies, institutions and organizations, especially the local government units
within the ARMM in the planning and implementation of infrastructure projects;
6. Conduct continuing consultations with the local communities, take
appropriate measures to make the services of the Autonomous Regional
Government responsive to the needs of the general public and recommend
such appropriate actions as may be necessary; and
7. Perform such other related duties and responsibilities within the ARMM as
may be assigned or delegated by the Regional Governor or as may be
provided by law. (Emphasis supplied)
More importantly, Congress itself through R.A. 9054 transferred and devolved
the administrative and fiscal management of public works and funds for public
works to the ARG. Section 20, Article VI of R.A. 9054 provides:
ARTICLE VI
THE LEGISLATIVE DEPARTMENT
SEC. 20. Annual Budget and Infrastructure Funds. The annual budget of the
Regional Government shall be enacted by Regional Assembly. Funds for
infrastructure in the autonomous region allocated by the central government
or national government shall be appropriated through a Regional Assembly
Public Works Act.
Unless approved by the Regional Assembly, no public works funds allocated
by the central government or national government for the Regional
Government or allocated by the Regional Government from its own revenues
may be disbursed, distributed, realigned, or used in any manner.
The aim of the Constitution is to extend to the autonomous peoples, the people
of Muslim Mindanao in this case, the right to self-determinationa right to
choose their own path of development; the right to determine the political,
cultural and economic content of their development path within the framework
of the sovereignty and territorial integrity of the Philippine Republic.[80] Self-
determination refers to the need for a political structure that will respect the
autonomous peoples uniqueness and grant them sufficient room for self-
expression and self-construction.[81]
In treading their chosen path of development, the Muslims in Mindanao are to
be given freedom and independence with minimum interference from the
National Government. This necessarily includes the freedom to decide on,
build, supervise and maintain the public works and infrastructure projects
within the autonomous region. The devolution of the powers and functions of
the DPWH in the ARMM and transfer of the administrative and fiscal
management of public works and funds to the ARG are meant to be true,
meaningful and unfettered. This unassailable conclusion is grounded on a
clear consensus, reached at the Constitutional Commission and ratified by the
entire Filipino electorate, on the centrality of decentralization of power as the
appropriate vessel of deliverance for Muslim Filipinos and the ultimate unity of
Muslims and Christians in this country.
With R.A. 8999, however, this freedom is taken away, and the National
Government takes control again. The hands, once more, of the autonomous
peoples are reined in and tied up.
The challenged law creates an office with functions and powers which, by
virtue of E.O. 426, have been previously devolved to the DPWH-ARMM, First
Engineering District in Lanao del Sur.
E.O. 426 clearly ordains the transfer of the control and supervision of the
offices of the DPWH within the ARMM, including their functions, powers and
responsibilities, personnel, equipment, properties, and budgets to the ARG.
Among its other functions, the DPWH-ARMM, under the control of the
Regional Government shall be responsible for highways, flood control and
water resource development systems, and other public works within the
ARMM. Its scope of power includes the planning, design, construction and
supervision of public works. According to R.A. 9054, the reach of the Regional
Government enables it to appropriate, manage and disburse all public work
funds allocated for the region by the central government.
The use of the word powers in E.O. 426 manifests an unmistakable case of
devolution.
In this regard, it is not amiss to cite Opinion No. 120, S. 1991[82] of the
Secretary of Justice on whether the national departments or their counterpart
departments in the ARG are responsible for implementation of roads, rural
water supply, health, education, women in development, agricultural extension
and watershed management. Referring to Section 2, Article V of R.A. 6734
which enumerates the powers of the ARG, he states:
It is clear from the foregoing provision of law that except for the areas of
executive power mentioned therein, all other such areas shall be exercised by
the Autonomous Regional Government (ARG) of the Autonomous Region in
Muslim Mindanao. It is noted that programs relative to infrastructure facilities,
health, education, women in development, agricultural extension and
watershed management do not fall under any of the exempted areas listed in
the abovequoted provision of law. Thus, the inevitable conclusion is that all
these spheres of executive responsibility have been transferred to the ARG.
Reinforcing the aboveview (sic) are the various executive orders issued by the
President providing for the devolution of the powers and functions of specified
executive departments of the National Government to the ARG. These are
E.O. Nos. 425 (Department of Labor and Employment, Local Government,
Tourism, Environment and Natural Resources, Social Welfare and
Development and Science and Technology), 426 (Department of Public Works
and Highways), 459 (Department of Education, Culture and Sports) and 460
(Department of Agriculture). The execution of projects on infrastructure,
education, women, agricultural extension and watershed management within
the Autonomous Region of Muslim Mindanao normally fall within the
responsibility of one of the aforementioned executive departments of the
National Government, but by virtue of the aforestated EOs, such responsibility
has been transferred to the ARG.
E.O. 426 was issued to implement the provisions of the first ARMM Organic
Act, R.A. 6734the validity of which this Court upheld in the case of Abbas v.
Commission on Elections.[83] In Section 4, Article XVIII of said Act, central
government or national government offices and agencies in the autonomous
region which are not excluded under Section 3, Article IV[84] of this Organic
Act, shall be placed under the control and supervision of the Regional
Government pursuant to a schedule prescribed by the oversight committee.
Evidently, the intention is to cede some, if not most, of the powers of the
national government to the autonomous government in order to effectuate a
veritable autonomy. The continued enforcement of R.A. 8999, therefore, runs
afoul of the ARMM Organic Acts and results in the recall of powers which have
previously been handed over. This should not be sanctioned, elsewise the
Organic Acts desire for greater autonomy for the ARMM in accordance with
the Constitution would be quelled. It bears stressing that national laws are
subject to the Constitution one of whose state policies is to ensure the
autonomy of autonomous regions. Section 25, Article II of the 1987
Constitution states:
Sec. 25. The State shall ensure the autonomy of local governments.
R.A. 8999 has made the DPWH-ARMM effete and rendered regional
autonomy illusory with respect to infrastructure projects. The Congressional
Record shows, on the other hand, that the lack of an implementing and
monitoring body within the area has hindered the speedy implementation, of
infrastructure projects.[85] Apparently, in the legislatures estimation, the
existing DPWH-ARMM engineering districts failed to measure up to the task.
But if it was indeed the case, the problem could not be solved through the
simple legislative creation of an incongruous engineering district for the central
government in the ARMM. As it was, House Bill No. 995 which ultimately
became R.A. 8999 was passed in record time on second reading (not more
than 10 minutes), absolutely without the usual sponsorship speech and
debates.[86] The precipitate speed which characterized the passage of R.A.
8999 is difficult to comprehend since R.A. 8999 could have resulted in the
amendment of the first ARMM Organic Act and, therefore, could not take effect
without first being ratified in a plebiscite. What is more baffling is that in March
2001, or barely two (2) months after it enacted R.A. 8999 in January 2001,
Congress passed R.A. 9054, the second ARMM Organic Act, where it
reaffirmed the devolution of the DPWH in ARMM, including Lanao del Sur and
Marawi City, to the Regional Government and effectively repealed R.A. 8999.
DPWH Department Order No. 119
Now, the question directly related to D.O. 119.
D.O. 119 creating the Marawi Sub-District Engineering Office which has
jurisdiction over infrastructure projects within Marawi City and Lanao del Sur
is violative of the provisions of E.O. 426. The Executive Order was issued
pursuant to R.A. 6734which initiated the creation of the constitutionally-
mandated autonomous region[87] and which defined the basic structure of the
autonomous government.[88] E.O. 426 sought to implement the transfer of the
control and supervision of the DPWH within the ARMM to the Autonomous
Regional Government. In particular, it identified four (4) District Engineering
Offices in each of the four (4) provinces, namely: Lanao del Sur, Maguindanao,
Sulu and Tawi-Tawi.[89] Accordingly, the First Engineering District of the
DPWH-ARMM in Lanao del Sur has jurisdiction over the public works within
the province.
The office created under D.O. 119, having essentially the same powers, is a
duplication of the DPWH-ARMM First Engineering District in Lanao del Sur
formed under the aegis of E.O. 426. The department order, in effect, takes
back powers which have been previously devolved under the said executive
order. D.O. 119 runs counter to the provisions of E.O. 426. The DPWHs order,
like spring water, cannot rise higher than its source of powerthe Executive.
The fact that the department order was issued pursuant to E.O. 124signed and
approved by President Aquino in her residual legislative powersis of no
moment. It is a finely-imbedded principle in statutory construction that a special
provision or law prevails over a general one.[90] Lex specialis derogant
generali. As this Court expressed in the case of Leveriza v. Intermediate
Appellate Court,[91] another basic principle of statutory construction mandates
that general legislation must give way to special legislation on the same
subject, and generally be so interpreted as to embrace only cases in which the
special provisions are not applicable, that specific statute prevails over a
general statute and that where two statutes are of equal theoretical application
to a particular case, the one designed therefor specially should prevail.
E.O. No. 124, upon which D.O. 119 is based, is a general law reorganizing the
Ministry of Public Works and Highways while E.O. 426 is a special law
transferring the control and supervision of the DPWH offices within ARMM to
the Autonomous Regional Government. The latter statute specifically applies
to DPWH-ARMM offices. E.O. 124 should therefore give way to E.O. 426 in
the instant case.
In any event, the ARMM Organic Acts and their ratification in a plebiscite in
effect superseded E.O. 124. In case of an irreconcilable conflict between two
laws of different vintages, the later enactment prevails because it is the later
legislative will.[92]
Further, in its repealing clause, R.A. 9054 states that all laws, decrees, orders,
rules and regulations, and other issuances or parts thereof, which are
inconsistent with this Organic Act, are hereby repealed or modified
accordingly.[93] With the repeal of E.O. 124 which is the basis of D.O. 119, it
necessarily follows that D.O. 119 was also rendered functus officio by the
ARMM Organic Acts.
Grave abuse of discretion
Without doubt, respondents committed grave abuse of discretion. They
implemented R.A. 8999 despite its inoperativeness and repeal. They also put
in place and maintained the DPWH Marawi Sub-District Engineering Office in
accordance with D.O. 119 which has been rendered functus officio by the
ARMM Organic Acts.
Still, on the issue of grave abuse of discretion, this Court, however, cannot
uphold petitioners argument that R.A. 8999 was signed into law under
suspicious circumstances to support the assertion that there was a capricious
and whimsical exercise of legislative authority. Once more, this Court cannot
inquire into the wisdom, merits, propriety or expediency of the acts of the
legislative branch.
Likewise, the alleged lack of consultation or public hearing with the affected
agency during the inception of the law does not render the law infirm. This
Court holds that the Congress did not transgress the Constitution nor any
statute or House Rule in failing to invite a resource person from the DPWH-
ARMM during the Committee meeting. Section 27, Rule VII of the Rules of the
House[94] only requires that a written notice be given to all the members of a
Committee seven (7) calendar days before a regularly scheduled meeting,
specifying the subject matter of the meeting and the names of the invited
resource persons. And it must be emphasized that the questions of who to
invite and whether there is a need to invite resource persons during Committee
meetings should be addressed solely to Congress in its plenary legislative
powers.[95]
Conclusion
The repeal of R.A. 8999 and the functus officio state of D.O. 119 provide the
necessary basis for the grant of the writs of certiorari and prohibition sought by
the petitioners. However, there is no similar basis for the issuance of a writ of
mandamus to compel respondent DBM Secretary to release funds
appropriated for public works projects in Marawi City and Lanao del Sur to the
DPWH-ARMM First Engineering District in Lanao del Sur and to compel
respondent DPWH Secretary to allow the DPWH-ARMM, First Engineering
District in Lanao del Sur to implement all public works projects within its
jurisdictional area. Section 20, Article VI of R.A. 9054 clearly provides that
(f)unds for infrastructure in the autonomous region allocated by the central
government or national government shall only be appropriated through a
Regional Assembly Public Works Act passed by the Regional Assembly. There
is no showing that such Regional Assembly Public Works Act has been
enacted.
WHEREFORE, considering that Republic Act No. 9054 repealed Republic Act
No. 8999 and rendered DPWH Department Order No. 119 functus officio, the
petition insofar as it seeks the writs of certiorari and prohibition is GRANTED.
Accordingly, let a writ of prohibition ISSUE commanding respondents to desist
from implementing R.A. 8999 and D.O. 119, and maintaining the DPWH
Marawi Sub-District Engineering Office and the First Engineering District of the
Province of Lanao del Sur comprising the City of Marawi and the municipalities
within the First District of Lanao del Sur. However, the petition insofar as it
seeks a writ of mandamus against respondents is DENIED.
No costs.
SO ORDERED.
5. Batangas CATV v. CA
BATANGAS CATV, INC., petitioner, vs. THE COURT OF APPEALS, THE
BATANGAS CITY SANGGUNIANG PANLUNGSOD and BATANGAS CITY
MAYOR, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
In the late 1940s, John Walson, an appliance dealer in Pennsylvania, suffered
a decline in the sale of television (tv) sets because of poor reception of signals
in his community. Troubled, he built an antenna on top of a nearby mountain.
Using coaxial cable lines, he distributed the tv signals from the antenna to the
homes of his customers. Walsons innovative idea improved his sales and at
the same time gave birth to a new telecommunication system -- the Community
Antenna Television (CATV) or Cable Television.[1]
This technological breakthrough found its way in our shores and, like in its
country of origin, it spawned legal controversies, especially in the field of
regulation. The case at bar is just another occasion to clarify a shady area.
Here, we are tasked to resolve the inquiry -- may a local government unit (LGU)
regulate the subscriber rates charged by CATV operators within its territorial
jurisdiction?
This is a petition for review on certiorari filed by Batangas CATV, Inc.
(petitioner herein) against the Sangguniang Panlungsod and the Mayor of
Batangas City (respondents herein) assailing the Court of Appeals (1)
Decision[2] dated February 12, 1999 and (2) Resolution[3] dated May 26,
1999, in CA-G.R. CV No. 52361.[4] The Appellate Court reversed and set
aside the Judgment[5] dated October 29, 1995 of the Regional Trial Court
(RTC), Branch 7, Batangas City in Civil Case No. 4254,[6] holding that neither
of the respondents has the power to fix the subscriber rates of CATV operators,
such being outside the scope of the LGUs power.
The antecedent facts are as follows:
On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution
No. 210[7] granting petitioner a permit to construct, install, and operate a CATV
system in Batangas City. Section 8 of the Resolution provides that petitioner
is authorized to charge its subscribers the maximum rates specified therein,
provided, however, that any increase of rates shall be subject to the approval
of the Sangguniang Panlungsod.[8]
Sometime in November 1993, petitioner increased its subscriber rates from
P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner
a letter[9] threatening to cancel its permit unless it secures the approval of
respondent Sangguniang Panlungsod, pursuant to Resolution No. 210.
Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for
injunction docketed as Civil Case No. 4254. It alleged that respondent
Sangguniang Panlungsod has no authority to regulate the subscriber rates
charged by CATV operators because under Executive Order No. 205, the
National Telecommunications Commission (NTC) has the sole authority to
regulate the CATV operation in the Philippines.
On October 29, 1995, the trial court decided in favor of petitioner, thus:
WHEREFORE, as prayed for, the defendants, their representatives, agents,
deputies or other persons acting on their behalf or under their instructions, are
hereby enjoined from canceling plaintiffs permit to operate a Cable Antenna
Television (CATV) system in the City of Batangas or its environs or in any
manner, from interfering with the authority and power of the National
Telecommunications Commission to grant franchises to operate CATV
systems to qualified applicants, and the right of plaintiff in fixing its service
rates which needs no prior approval of the Sangguniang Panlungsod of
Batangas City.
The counterclaim of the plaintiff is hereby dismissed. No pronouncement as to
costs.
IT IS SO ORDERED.[10]
The trial court held that the enactment of Resolution No. 210 by respondent
violates the States deregulation policy as set forth by then NTC Commissioner
Jose Luis A. Alcuaz in his Memorandum dated August 25, 1989. Also, it
pointed out that the sole agency of the government which can regulate CATV
operation is the NTC, and that the LGUs cannot exercise regulatory power
over it without appropriate legislation.
Unsatisfied, respondents elevated the case to the Court of Appeals, docketed
as CA-G.R. CV No. 52361.
On February 12, 1999, the Appellate Court reversed and set aside the trial
courts Decision, ratiocinating as follows:
Although the Certificate of Authority to operate a Cable Antenna Television
(CATV) System is granted by the National Telecommunications Commission
pursuant to Executive Order No. 205, this does not preclude the Sangguniang
Panlungsod from regulating the operation of the CATV in their locality under
the powers vested upon it by Batas Pambansa Bilang 337, otherwise known
as the Local Government Code of 1983. Section 177 (now Section 457
paragraph 3 (ii) of Republic Act 7160) provides:
Section 177. Powers and Duties The Sangguniang Panlungsod shall:
a) Enact such ordinances as may be necessary to carry into effect and
discharge the responsibilities conferred upon it by law, and such as shall be
necessary and proper to provide for health and safety, comfort and
convenience, maintain peace and order, improve the morals, and promote the
prosperity and general welfare of the community and the inhabitants thereof,
and the protection of property therein;
xxx
d) Regulate, fix the license fee for, and tax any business or profession being
carried on and exercised within the territorial jurisdiction of the city, except
travel agencies, tourist guides, tourist transports, hotels, resorts, de luxe
restaurants, and tourist inns of international standards which shall remain
under the licensing and regulatory power of the Ministry of Tourism which shall
exercise such authority without infringement on the taxing and regulatory
powers of the city government;
Under cover of the General Welfare Clause as provided in this section, Local
Government Units can perform just about any power that will benefit their
constituencies. Thus, local government units can exercise powers that are: (1)
expressly granted; (2) necessarily implied from the power that is expressly
granted; (3) necessary, appropriate or incidental for its efficient and effective
governance; and (4) essential to the promotion of the general welfare of their
inhabitants. (Pimentel, The Local Government Code of 1991, p. 46)
Verily, the regulation of businesses in the locality is expressly provided in the
Local Government Code. The fixing of service rates is lawful under the General
Welfare Clause.
Resolution No. 210 granting appellee a permit to construct, install and operate
a community antenna television (CATV) system in Batangas City as quoted
earlier in this decision, authorized the grantee to impose charges which cannot
be increased except upon approval of the Sangguniang Bayan. It further
provided that in case of violation by the grantee of the terms and
conditions/requirements specifically provided therein, the City shall have the
right to withdraw the franchise.
Appellee increased the service rates from EIGHTY EIGHT PESOS (P88.00)
to ONE HUNDRED EIGHTY PESOS (P180.00) (Records, p. 25) without the
approval of appellant. Such act breached Resolution No. 210 which gives
appellant the right to withdraw the permit granted to appellee.[11]
Petitioner filed a motion for reconsideration but was denied.[12]
Hence, the instant petition for review on certiorari anchored on the following
assignments of error:
I
THE COURT OF APPEALS ERRED IN HOLDING THAT THE GENERAL
WELFARE CLAUSE OF THE LOCAL GOVERNMENT CODE AUTHORIZES
RESPONDENT SANGGUNIANG PANLUNGSOD TO EXERCISE THE
REGULATORY FUNCTION SOLELY LODGED WITH THE NATIONAL
TELECOMMUNICATIONS COMMISSION UNDER EXECUTIVE ORDER NO.
205, INCLUDING THE AUTHORITY TO FIX AND/OR APPROVE THE
SERVICE RATES OF CATV OPERATORS; AND
II
THE COURT OF APPEALS ERRED IN REVERSING THE DECISION
APPEALED FROM AND DISMISSING PETITIONERS COMPLAINT.[13]
Petitioner contends that while Republic Act No. 7160, the Local Government
Code of 1991, extends to the LGUs the general power to perform any act that
will benefit their constituents, nonetheless, it does not authorize them to
regulate the CATV operation. Pursuant to E.O. No. 205, only the NTC has the
authority to regulate the CATV operation, including the fixing of subscriber
rates.
Respondents counter that the Appellate Court did not commit any reversible
error in rendering the assailed Decision. First, Resolution No. 210 was enacted
pursuant to Section 177(c) and (d) of Batas Pambansa Bilang 337, the Local
Government Code of 1983, which authorizes LGUs to regulate businesses.
The term businesses necessarily includes the CATV industry. And second,
Resolution No. 210 is in the nature of a contract between petitioner and
respondents, it being a grant to the former of a franchise to operate a CATV
system. To hold that E.O. No. 205 amended its terms would violate the
constitutional prohibition against impairment of contracts.[14]
The petition is impressed with merit.
Earlier, we posed the question -- may a local government unit (LGU) regulate
the subscriber rates charged by CATV operators within its territorial
jurisdiction? A review of pertinent laws and jurisprudence yields a negative
answer.
President Ferdinand E. Marcos was the first one to place the CATV industry
under the regulatory power of the national government.[15] On June 11, 1978,
he issued Presidential Decree (P.D.) No. 1512[16] establishing a monopoly of
the industry by granting Sining Makulay, Inc., an exclusive franchise to operate
CATV system in any place within the Philippines. Accordingly, it terminated all
franchises, permits or certificates for the operation of CATV system previously
granted by local governments or by any instrumentality or agency of the
national government.[17] Likewise, it prescribed the subscriber rates to be
charged by Sining Makulay, Inc. to its customers.[18]
On July 21, 1979, President Marcos issued Letter of Instruction (LOI) No. 894
vesting upon the Chairman of the Board of Communications direct supervision
over the operations of Sining Makulay, Inc. Three days after, he issued E.O.
No. 546[19] integrating the Board of Communications[20] and the
Telecommunications Control Bureau[21] to form a single entity to be known as
the National Telecommunications Commission. Two of its assigned functions
are:
a. Issue Certificate of Public Convenience for the operation of communications
utilities and services, radio communications systems, wire or wireless
telephone or telegraph systems, radio and television broadcasting system and
other similar public utilities;
b. Establish, prescribe and regulate areas of operation of particular operators
of public service communications; and determine and prescribe charges or
rates pertinent to the operation of such public utility facilities and services
except in cases where charges or rates are established by international bodies
or associations of which the Philippines is a participating member or by bodies
recognized by the Philippine Government as the proper arbiter of such charges
or rates;
Although Sining Makulay Inc.s exclusive franchise had a life term of 25 years,
it was cut short by the advent of the 1986 Revolution. Upon President Corazon
C. Aquinos assumption of power, she issued E.O. No. 205[22] opening the
CATV industry to all citizens of the Philippines. It mandated the NTC to grant
Certificates of Authority to CATV operators and to issue the necessary
implementing rules and regulations.
On September 9, 1997, President Fidel V. Ramos issued E.O. No. 436[23]
prescribing policy guidelines to govern CATV operation in the Philippines. Cast
in more definitive terms, it restated the NTCs regulatory powers over CATV
operations, thus:
SECTION 2. The regulation and supervision of the cable television industry in
the Philippines shall remain vested solely with the National
Telecommunications Commission (NTC).
SECTION 3. Only persons, associations, partnerships, corporations or
cooperatives, granted a Provisional Authority or Certificate of Authority by the
Commission may install, operate and maintain a cable television system or
render cable television service within a service area.
Clearly, it has been more than two decades now since our national
government, through the NTC, assumed regulatory power over the CATV
industry. Changes in the political arena did not alter the trend. Instead,
subsequent presidential issuances further reinforced the NTCs power.
Significantly, President Marcos and President Aquino, in the exercise of their
legislative power, issued P.D. No. 1512, E.O. No. 546 and E.O. No. 205.
Hence, they have the force and effect of statutes or laws passed by
Congress.[24] That the regulatory power stays with the NTC is also clear from
President Ramos E.O. No. 436 mandating that the regulation and supervision
of the CATV industry shall remain vested solely in the NTC. Blacks Law
Dictionary defines sole as without another or others.[25] The logical
conclusion, therefore, is that in light of the above laws and E.O. No. 436, the
NTC exercises regulatory power over CATV operators to the exclusion of other
bodies.
But, lest we be misunderstood, nothing herein should be interpreted as to strip
LGUs of their general power to prescribe regulations under the general welfare
clause of the Local Government Code. It must be emphasized that when E.O.
No. 436 decrees that the regulatory power shall be vested solely in the NTC,
it pertains to the regulatory power over those matters which are peculiarly
within the NTCs competence, such as, the: (1) determination of rates, (2)
issuance of certificates of authority, (3) establishment of areas of operation,
(4) examination and assessment of the legal, technical and financial
qualifications of applicant operators, (5) granting of permits for the use of
frequencies, (6) regulation of ownership and operation, (7) adjudication of
issues arising from its functions, and (8) other similar matters.[26] Within these
areas, the NTC reigns supreme as it possesses the exclusive power to
regulate -- a power comprising varied acts, such as to fix, establish, or control;
to adjust by rule, method or established mode; to direct by rule or restriction;
or to subject to governing principles or laws.[27]
Coincidentally, respondents justify their exercise of regulatory power over
petitioners CATV operation under the general welfare clause of the Local
Government Code of 1983. The Court of Appeals sustained their stance.
There is no dispute that respondent Sangguniang Panlungsod, like other local
legislative bodies, has been empowered to enact ordinances and approve
resolutions under the general welfare clause of B.P. Blg. 337, the Local
Government Code of 1983. That it continues to posses such power is clear
under the new law, R.A. No. 7160 (the Local Government Code of 1991).
Section 16 thereof provides:
SECTION 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 others, 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.
In addition, Section 458 of the same Code specifically mandates:
SECTION 458. Powers, Duties, Functions and Compensation. (a) The
Sangguniang Panlungsod, as the legislative body of the city, shall enact
ordinances, approve resolutions and appropriate funds for the general welfare
of the city and its inhabitants pursuant to Section 16 of this Code and in the
proper exercise of the corporate powers of the city as provided for under
Section 22 of this Code, x x x:
The general welfare clause is the delegation in statutory form of the police
power of the State to LGUs.[28] Through this, LGUs may prescribe regulations
to protect the lives, health, and property of their constituents and maintain
peace and order within their respective territorial jurisdictions. Accordingly, we
have upheld enactments providing, for instance, the regulation of
gambling,[29] the occupation of rig drivers,[30] the installation and operation
of pinball machines,[31] the maintenance and operation of cockpits,[32] the
exhumation and transfer of corpses from public burial grounds,[33] and the
operation of hotels, motels, and lodging houses[34] as valid exercises by local
legislatures of the police power under the general welfare clause.
Like any other enterprise, CATV operation maybe regulated by LGUs under
the general welfare clause. This is primarily because the CATV system
commits the indiscretion of crossing public properties. (It uses public properties
in order to reach subscribers.) The physical realities of constructing CATV
system the use of public streets, rights of ways, the founding of structures, and
the parceling of large regions allow an LGU a certain degree of regulation over
CATV operators.[35] This is the same regulation that it exercises over all
private enterprises within its territory.
But, while we recognize the LGUs power under the general welfare clause, we
cannot sustain Resolution No. 210. We are convinced that respondents
strayed from the well recognized limits of its power. The flaws in Resolution
No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the
States deregulation policy over the CATV industry.
I.
Resolution No. 210 is an enactment of an LGU acting only as agent of the
national legislature. Necessarily, its act must reflect and conform to the will of
its principal. To test its validity, we must apply the particular requisites of a
valid ordinance as laid down by the accepted principles governing municipal
corporations. [36]
Speaking for the Court in the leading case of United States vs. Abendan,[37]
Justice Moreland said: An ordinance enacted by virtue of the general welfare
clause is valid, unless it contravenes the fundamental law of the Philippine
Islands, or an Act of the Philippine Legislature, or unless it is against public
policy, or is unreasonable, oppressive, partial, discriminating, or in derogation
of common right. In De la Cruz vs. Paraz,[38] we laid the general rule that
ordinances passed by virtue of the implied power found in the general welfare
clause must be reasonable, consonant with the general powers and purposes
of the corporation, and not inconsistent with the laws or policy of the State.
The apparent defect in Resolution No. 210 is that it contravenes E.O. No. 205
and E.O. No. 436 insofar as it permits respondent Sangguniang Panlungsod
to usurp a power exclusively vested in the NTC, i.e., the power to fix the
subscriber rates charged by CATV operators. As earlier discussed, the fixing
of subscriber rates is definitely one of the matters within the NTCs exclusive
domain.
In this regard, it is appropriate to stress that where the state legislature has
made provision for the regulation of conduct, it has manifested its intention that
the subject matter shall be fully covered by the statute, and that a municipality,
under its general powers, cannot regulate the same conduct.[39] In Keller vs.
State,[40] it was held that: Where there is no express power in the charter of a
municipality authorizing it to adopt ordinances regulating certain matters which
are specifically covered by a general statute, a municipal ordinance, insofar as
it attempts to regulate the subject which is completely covered by a general
statute of the legislature, may be rendered invalid. x x x Where the subject is
of statewide concern, and the legislature has appropriated the field and
declared the rule, its declaration is binding throughout the State. A reason
advanced for this view is that such ordinances are in excess of the powers
granted to the municipal corporation.[41]
Since E.O. No. 205, a general law, mandates that the regulation of CATV
operations shall be exercised by the NTC, an LGU cannot enact an ordinance
or approve a resolution in violation of the said law.
It is a fundamental principle that municipal ordinances are inferior in status and
subordinate to the laws of the state. An ordinance in conflict with a state law
of general character and statewide application is universally held to be
invalid.[42] The principle is frequently expressed in the declaration that
municipal authorities, under a general grant of power, cannot adopt ordinances
which infringe the spirit of a state law or repugnant to the general policy of the
state.[43] In every power to pass ordinances given to a municipality, there is
an implied restriction that the ordinances shall be consistent with the general
law.[44] In the language of Justice Isagani Cruz (ret.), this Court, in Magtajas
vs. Pryce Properties Corp., Inc.,[45] ruled that:
The rationale of the requirement that the ordinances should not contravene a
statute is obvious. Municipal governments are only agents of the national
government. Local councils exercise only delegated legislative powers
conferred on 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 to the corporation themselves are concerned.
They are, so to phrase it, the mere tenants at will of the legislature.
This 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, 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.
Respondents have an ingenious retort against the above disquisition. Their
theory is that the regulatory power of the LGUs is granted by R.A. No. 7160
(the Local Government Code of 1991), a handiwork of the national lawmaking
authority. They contend that R.A. No. 7160 repealed E.O. No. 205 (issued by
President Aquino). Respondents argument espouses a bad precedent. To say
that LGUs exercise the same regulatory power over matters which are
peculiarly within the NTCs competence is to promote a scenario of LGUs and
the NTC locked in constant clash over the appropriate regulatory measure on
the same subject matter. LGUs must recognize that technical matters
concerning CATV operation are within the exclusive regulatory power of the
NTC.

At any rate, we find no basis to conclude that R.A. No. 7160 repealed E.O. No.
205, either expressly or impliedly. It is noteworthy that R.A. No. 7160 repealing
clause, which painstakingly mentions the specific laws or the parts thereof
which are repealed, does not include E.O. No. 205, thus:
SECTION 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise
known as the Local Government Code." Executive Order No. 112 (1987), and
Executive Order No. 319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders,
instructions, memoranda and issuances related to or concerning the barangay
are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding
hospital fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding
the Special Education Fund; Presidential Decree No. 144 as amended by
Presidential Decree Nos. 559 and 1741; Presidential Decree No. 231 as
amended; Presidential Decree No. 436 as amended by Presidential Decree
No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and
1136 are hereby repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs
locally-funded projects.
(e) The following provisions are hereby repealed or amended insofar as they
are inconsistent with the provisions of this Code: Sections 2, 16, and 29 of
Presidential Decree No. 704; Section 12 of Presidential Decree No. 87, as
amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential
Decree No. 463, as amended; and Section 16 of Presidential Decree No. 972,
as amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which
are inconsistent with any of the provisions of this Code are hereby repealed or
modified accordingly.
Neither is there an indication that E.O. No. 205 was impliedly repealed by R.A.
No. 7160. It is a settled rule that implied repeals are not lightly presumed in the
absence of a clear and unmistakable showing of such intentions. In Mecano
vs. Commission on Audit,[46] we ruled:
Repeal by implication proceeds on the premise that where a statute of later
date clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject, that intention must be given effect. Hence, before there
can be a repeal, there must be a clear showing on the part of the lawmaker
that the intent in enacting the new law was to abrogate the old one. The
intention to repeal must be clear and manifest; otherwise, at least, as a general
rule, the later act is to be construed as a continuation of, and not a substitute
for, the first act and will continue so far as the two acts are the same from the
time of the first enactment.
As previously stated, E.O. No. 436 (issued by President Ramos) vests upon
the NTC the power to regulate the CATV operation in this country. So also
Memorandum Circular No. 8-9-95, the Implementing Rules and Regulations of
R.A. No. 7925 (the Public Telecommunications Policy Act of the Philippines).
This shows that the NTCs regulatory power over CATV operation is
continuously recognized.
It is a canon of legal hermeneutics that instead of pitting one statute against
another in an inevitably destructive confrontation, courts must exert every
effort to reconcile them, remembering that both laws deserve a becoming
respect as the handiwork of coordinate branches of the government.[47] On
the assumption of a conflict between E.O. No. 205 and R.A. No. 7160, the
proper action is not to uphold one and annul the other but to give effect to both
by harmonizing them if possible. This recourse finds application here. Thus,
we hold that the NTC, under E.O. No. 205, has exclusive jurisdiction over
matters affecting CATV operation, including specifically the fixing of subscriber
rates, but nothing herein precludes LGUs from exercising its general power,
under R.A. No. 7160, to prescribe regulations to promote the health, morals,
peace, education, good order or safety and general welfare of their
constituents. In effect, both laws become equally effective and mutually
complementary.
The grant of regulatory power to the NTC is easily understandable. CATV
system is not a mere local concern. The complexities that characterize this
new technology demand that it be regulated by a specialized agency. This is
particularly true in the area of rate-fixing. Rate fixing involves a series of
technical operations.[48] Consequently, on the hands of the regulatory body
lies the ample discretion in the choice of such rational processes as might be
appropriate to the solution of its highly complicated and technical problems.
Considering that the CATV industry is so technical a field, we believe that the
NTC, a specialized agency, is in a better position than the LGU, to regulate it.
Notably, in United States vs. Southwestern Cable Co.,[49] the US Supreme
Court affirmed the Federal Communications Commissions (FCCs) jurisdiction
over CATV operation. The Court held that the FCCs authority over cable
systems assures the preservation of the local broadcast service and an
equitable distribution of broadcast services among the various regions of the
country.
II.
Resolution No. 210 violated the States deregulation policy.
Deregulation is the reduction of government regulation of business to permit
freer markets and competition.[50] Oftentimes, the State, through its regulatory
agencies, carries out a policy of deregulation to attain certain objectives or to
address certain problems. In the field of telecommunications, it is recognized
that many areas in the Philippines are still unserved or underserved. Thus, to
encourage private sectors to venture in this field and be partners of the
government in stimulating the growth and development of
telecommunications, the State promoted the policy of deregulation.
In the United States, the country where CATV originated, the Congress
observed, when it adopted the Telecommunications Act of 1996, that there
was a need to provide a pro-competitive, deregulatory national policy
framework designed to accelerate rapidly private sector deployment of
advanced telecommunications and information technologies and services to
all Americans by opening all telecommunications markets to competition. The
FCC has adopted regulations to implement the requirements of the 1996 Act
and the intent of the Congress.
Our country follows the same policy. The fifth Whereas Clause of E.O. No. 436
states:
WHEREAS, professionalism and self-regulation among existing operators,
through a nationally recognized cable television operators association, have
enhanced the growth of the cable television industry and must therefore be
maintained along with minimal reasonable government regulations;
This policy reaffirms the NTCs mandate set forth in the Memorandum dated
August 25, 1989 of Commissioner Jose Luis A. Alcuaz, to wit:
In line with the purpose and objective of MC 4-08-88, Cable Television System
or Community Antenna Television (CATV) is made part of the broadcast media
to promote the orderly growth of the Cable Television Industry it being in its
developing stage. Being part of the Broadcast Media, the service rates of
CATV are likewise considered deregulated in accordance with MC 06-2-81
dated 25 February 1981, the implementing guidelines for the authorization and
operation of Radio and Television Broadcasting stations/systems.
Further, the Commission will issue Provisional Authority to existing CATV
operators to authorize their operations for a period of ninety (90) days until
such time that the Commission can issue the regular Certificate of Authority.
When the State declared a policy of deregulation, the LGUs are bound to
follow. To rule otherwise is to render the States policy ineffective. Being mere
creatures of the State, LGUs cannot defeat national policies through
enactments of contrary measures. Verily, in the case at bar, petitioner may
increase its subscriber rates without respondents approval.
At this juncture, it bears emphasizing that municipal corporations are bodies
politic and corporate, created not only as local units of local self-government,
but as governmental agencies of the state.[51] The legislature, by establishing
a municipal corporation, does not divest the State of any of its sovereignty;
absolve itself from its right and duty to administer the public affairs of the entire
state; or divest itself of any power over the inhabitants of the district which it
possesses before the charter was granted.[52]
Respondents likewise argue that E.O. No. 205 violates the constitutional
prohibition against impairment of contracts, Resolution No. 210 of Batangas
City Sangguniang Panlungsod being a grant of franchise to petitioner.
We are not convinced.
There is no law specifically authorizing the LGUs to grant franchises to operate
CATV system. Whatever authority the LGUs had before, the same had been
withdrawn when President Marcos issued P.D. No. 1512 terminating all
franchises, permits or certificates for the operation of CATV system previously
granted by local governments. Today, pursuant to Section 3 of E.O. No. 436,
only persons, associations, partnerships, corporations or cooperatives granted
a Provisional Authority or Certificate of Authority by the NTC may install,
operate and maintain a cable television system or render cable television
service within a service area. It is clear that in the absence of constitutional or
legislative authorization, municipalities have no power to grant franchises.[53]
Consequently, the protection of the constitutional provision as to impairment
of the obligation of a contract does not extend to privileges, franchises and
grants given by a municipality in excess of its powers, or ultra vires.[54]
One last word. The devolution of powers to the LGUs, pursuant to the
Constitutional mandate of ensuring their autonomy, has bred jurisdictional
tension between said LGUs and the State. LGUs must be reminded that they
merely form part of the whole. Thus, when the Drafters of the 1987 Constitution
enunciated the policy of ensuring the autonomy of local governments,[55] it
was never their intention to create an imperium in imperio and install an intra-
sovereign political subdivision independent of a single sovereign state.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court
of Appeals dated February 12, 1999 as well as its Resolution dated May 26,
1999 in CA-G.R. CV No. 52461, are hereby REVERSED. The RTC Decision
in Civil Case No. 4254 is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
II. Power of the President over LGU
6. Dadole v. Commission on Audit
[G.R. No. 125350. December 3, 2002]
HON. RTC JUDGES MERCEDES G. DADOLE (Executive Judge, Branch 28),
ULRIC R. CAETE (Presiding Judge, Branch 25), AGUSTINE R. VESTIL
(Presiding Judge, Branch 56), HON. MTC JUDGES TEMISTOCLES M.
BOHOLST (Presiding Judge, Branch 1), VICENTE C. FANILAG (Judge
Designate, Branch 2), and WILFREDO A. DAGATAN (Presiding Judge,
Branch 3), all of Mandaue City, petitioners, vs. COMMISSION ON AUDIT,
respondent.
DECISION
CORONA, J.:
Before us is a petition for certiorari under Rule 64 to annul the decision[1] and
resolution[2], dated September 21, 1995 and May 28, 1996, respectively, of
the respondent Commission on Audit (COA) affirming the notices of the
Mandaue City Auditor which diminished the monthly additional allowances
received by the petitioner judges of the Regional Trial Court (RTC) and
Municipal Trial Court (MTC) stationed in Mandaue City.
The undisputed facts are as follows:
In 1986, the RTC and MTC judges of Mandaue City started receiving monthly
allowances of P1,260 each through the yearly appropriation ordinance
enacted by the Sangguniang Panlungsod of the said city. In 1991, Mandaue
City increased the amount to P1,500 for each judge.
On March 15, 1994, the Department of Budget and Management (DBM) issued
the disputed Local Budget Circular No. 55 (LBC 55) which provided that:
xxx xxx xxx
2.3.2. In the light of the authority granted to the local government units under
the Local Government Code to provide for additional allowances and other
benefits to national government officials and employees assigned in their
locality, such additional allowances in the form of honorarium at rates not
exceeding P1,000.00 in provinces and cities and P700.00 in municipalities
may be granted subject to the following conditions:
a) That the grant is not mandatory on the part of the LGUs;
b) That all contractual and statutory obligations of the LGU including the
implementation of R.A. 6758 shall have been fully provided in the budget;
c) That the budgetary requirements/limitations under Section 324 and 325 of
R.A. 7160 should be satisfied and/or complied with; and
d) That the LGU has fully implemented the devolution of functions/personnel
in accordance with R.A. 7160.[3] (italics supplied)
xxx xxx xxx
The said circular likewise provided for its immediate effectivity without need of
publication:
5.0 EFFECTIVITY
This Circular shall take effect immediately.
Acting on the DBM directive, the Mandaue City Auditor issued notices of
disallowance to herein petitioners, namely, Honorable RTC Judges Mercedes
G. Dadole, Ulric R. Caete, Agustin R. Vestil, Honorable MTC Judges
Temistocles M. Boholst, Vicente C. Fanilag and Wilfredo A. Dagatan, in excess
of the amount authorized by LBC 55. Beginning October, 1994, the additional
monthly allowances of the petitioner judges were reduced to P1,000 each.
They were also asked to reimburse the amount they received in excess of
P1,000 from April to September, 1994.
The petitioner judges filed with the Office of the City Auditor a protest against
the notices of disallowance. But the City Auditor treated the protest as a motion
for reconsideration and indorsed the same to the COA Regional Office No. 7.
In turn, the COA Regional Office referred the motion to the head office with a
recommendation that the same be denied.
On September 21, 1995, respondent COA rendered a decision denying
petitioners motion for reconsideration. The COA held that:
The issue to be resolved in the instant appeal is whether or not the City
Ordinance of Mandaue which provides a higher rate of allowances to the
appellant judges may prevail over that fixed by the DBM under Local Budget
Circular No. 55 dated March 15, 1994.
xxx xxx xxx
Applying the foregoing doctrine, appropriation ordinance of local government
units is subject to the organizational, budgetary and compensation policies of
budgetary authorities (COA 5th Ind., dated March 17, 1994 re: Province of
Antique; COA letter dated May 17, 1994 re: Request of Hon. Renato Leviste,
Cong. 1st Dist. Oriental Mindoro). In this regard, attention is invited to
Administrative Order No. 42 issued on March 3, 1993 by the President of the
Philippines clarifying the role of DBM in the compensation and classification of
local government positions under RA No. 7160 vis-avis the provisions of RA
No. 6758 in view of the abolition of the JCLGPA. Section 1 of said
Administrative Order provides that:
Section 1. The Department of Budget and Management as the lead
administrator of RA No. 6758 shall, through its Compensation and Position
Classification Bureau, continue to have the following responsibilities in
connection with the implementation of the Local Government Code of 1991:
a) Provide guidelines on the classification of local government positions and
on the specific rates of pay therefore;
b) Provide criteria and guidelines for the grant of all allowances and additional
forms of compensation to local government employees; xxx. (underscoring
supplied)
To operationalize the aforecited presidential directive, DBM issued LBC No.
55, dated March 15, 1994, whose effectivity clause provides that:
xxx xxx xxx
5.0 EFFECTIVITY
This Circular shall take effect immediately.
It is a well-settled rule that implementing rules and regulations promulgated by
administrative or executive officer in accordance with, and as authorized by
law, has the force and effect of law or partake the nature of a statute (Victorias
Milling Co., Inc., vs. Social Security Commission, 114 Phil. 555, cited in
Agpalos Statutory Construction, 2nd Ed. P. 16; Justice Cruzs Phil. Political
Law, 1984 Ed., p. 103; Espanol vs. Phil Veterans Administration, 137 SCRA
314; Antique Sawmills Inc. vs. Tayco, 17 SCRA 316).
xxx xxx xxx
There being no statutory basis to grant additional allowance to judges in
excess of P1,000.00 chargeable against the local government units where they
are stationed, this Commission finds no substantial grounds or cogent reason
to disturb the decision of the City Auditor, Mandaue City, disallowing in audit
the allowances in question. Accordingly, the above-captioned appeal of the
MTC and RTC Judges of Mandaue City, insofar as the same is not covered by
Circular Letter No. 91-7, is hereby dismissed for lack of merit.
xxx xxx xxx[4]
On November 27, 1995, Executive Judge Mercedes Gozo-Dadole, for and in
behalf of the petitioner judges, filed a motion for reconsideration of the decision
of the COA. In a resolution dated May 28, 1996, the COA denied the motion.
Hence, this petition for certiorari by the petitioner judges, submitting the
following questions for resolution:
I
HAS THE CITY OF MANDAUE STATUTORY AND CONSTITUTIONAL BASIS
TO PROVIDE ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO
JUDGES STATIONED IN AND ASSIGNED TO THE CITY?
II
CAN AN ADMINISTRATIVE CIRCULAR OR GUIDELINE SUCH AS LOCAL
BUDGET CIRCULAR NO. 55 RENDER INOPERATIVE THE POWER OF THE
LEGISLATIVE BODY OF A CITY BY SETTING A LIMIT TO THE EXTENT OF
THE EXERCISE OF SUCH POWER?
III
HAS THE COMMISSION ON AUDIT CORRECTLY INTERPRETED LOCAL
BUDGET CIRCULAR NO. 55 TO INCLUDE MEMBERS OF THE JUDICIARY
IN FIXING THE CEILING OF ADDITIONAL ALLOWANCES AND BENEFITS
TO BE PROVIDED TO JUDGES STATIONED IN AND ASSIGNED TO
MANDAUE CITY BY THE CITY GOVERNMENT AT P1,000.00 PER MONTH
NOTWITHSTANDING THAT THEY HAVE BEEN RECEIVING
ALLOWANCES OF P1,500.00 MONTHLY FOR THE PAST FIVE YEARS?
IV
IS LOCAL BUDGET CIRCULAR NO. 55 DATED MARCH 15, 1994 ISSUED
BY THE DEPARTMENT OF BUDGET AND MANAGEMENT VALID AND
ENFORCEABLE CONSIDERING THAT IT WAS NOT DULY PUBLISHED IN
ACCODANCE WITH LAW?[5]
Petitioner judges argue that LBC 55 is void for infringing on the local autonomy
of Mandaue City by dictating a uniform amount that a local government unit
can disburse as additional allowances to judges stationed therein. They
maintain that said circular is not supported by any law and therefore goes
beyond the supervisory powers of the President. They further allege that said
circular is void for lack of publication.

On the other hand, the yearly appropriation ordinance providing for additional
allowances to judges is allowed by Section 458, par. (a)(1)[xi], of RA 7160,
otherwise known as the Local Government Code of 1991, which provides that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The sangguniang
panlungsod, as the legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the proper exercise of
the corporate powers of the city as provided for under Section 22 of this Code,
and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and
effective city government, and in this connection, shall:
xxx xxx xxx
(xi) When the finances of the city government allow, provide for additional
allowances and other benefits to judges, prosecutors, public elementary and
high school teachers, and other national government officials stationed in or
assigned to the city; (italics supplied)
Instead of filing a comment on behalf of respondent COA, the Solicitor General
filed a manifestation supporting the position of the petitioner judges. The
Solicitor General argues that (1) DBM only enjoys the power to review and
determine whether the disbursements of funds were made in accordance with
the ordinance passed by a local government unit while (2) the COA has no
more than auditorial visitation powers over local government units pursuant to
Section 348 of RA 7160 which provides for the power to inspect at any time
the financial accounts of local government units.
Moreover, the Solicitor General opines that the DBM and the respondent are
only authorized under RA 7160 to promulgate a Budget Operations Manual for
local government units, to improve and systematize methods, techniques and
procedures employed in budget preparation, authorization, execution and
accountability pursuant to Section 354 of RA 7160. The Solicitor General
points out that LBC 55 was not exercised under any of the aforementioned
provisions.
Respondent COA, on the other hand, insists that the constitutional and
statutory authority of a city government to provide allowances to judges
stationed therein is not absolute. Congress may set limitations on the exercise
of autonomy. It is for the President, through the DBM, to check whether these
legislative limitations are being followed by the local government units.
One such law imposing a limitation on a local government units autonomy is
Section 458, par. (a) (1) [xi], of RA 7160, which authorizes the disbursement
of additional allowances and other benefits to judges subject to the condition
that the finances of the city government should allow the same. Thus, DBM is
merely enforcing the condition of the law when it sets a uniform maximum
amount for the additional allowances that a city government can release to
judges stationed therein.
Assuming arguendo that LBC 55 is void, respondent COA maintains that the
provisions of the yearly approved ordinance granting additional allowances to
judges are still prohibited by the appropriation laws passed by Congress every
year. COA argues that Mandaue City gets the funds for the said additional
allowances of judges from the Internal Revenue Allotment (IRA). But the
General Appropriations Acts of 1994 and 1995 do not mention the
disbursement of additional allowances to judges as one of the allowable uses
of the IRA. Hence, the provisions of said ordinance granting additional
allowances, taken from the IRA, to herein petitioner judges are void for being
contrary to law.
To resolve the instant petition, there are two issues that we must address: (1)
whether LBC 55 of the DBM is void for going beyond the supervisory powers
of the President and for not having been published and (2) whether the yearly
appropriation ordinance enacted by the City of Mandaue that provides for
additional allowances to judges contravenes the annual appropriation laws
enacted by Congress.
We rule in favor of the petitioner judges.
On the first issue, we declare LBC 55 to be null and void.
We recognize that, although our Constitution[6] guarantees autonomy to local
government units, the exercise of local autonomy remains subject to the power
of control by Congress and the power of supervision by the President. Section
4 of Article X of the 1987 Philippine Constitution provides that:
Sec. 4. The President of the Philippines shall exercise general supervision
over local governments. x x x
In Pimentel vs. Aguirre[7], we defined the supervisory power of the President
and distinguished it from the power of control exercised by Congress. Thus:
This provision (Section 4 of Article X of the 1987 Philippine Constitution) has
been interpreted to exclude the power of control. In Mondano v. Silvosa,[i][5]
the Court contrasted the President's power of supervision over local
government officials with that of his power of control over executive officials of
the national government. It was emphasized that the two terms -- supervision
and control -- differed in meaning and extent. The Court distinguished them as
follows:
"x x x In administrative law, supervision means overseeing or the power or
authority of an officer to see that subordinate officers perform their duties. If
the latter fail or neglect to fulfill them, the former may take such action or step
as prescribed by law to make them perform their duties. Control, on the other
hand, means the power of an officer to alter or modify or nullify or set aside
what a subordinate officer ha[s] done in the performance of his duties and to
substitute the judgment of the former for that of the latter."[ii][6]
In Taule v. Santos,[iii][7] we further stated that the Chief Executive wielded no
more authority than that of checking whether local governments or their
officials were performing their duties as provided by the fundamental law and
by statutes. He cannot interfere with local governments, so long as they act
within the scope of their authority. "Supervisory power, when contrasted with
control, is the power of mere oversight over an inferior body; it does not include
any restraining authority over such body,"[iv][8] we said.
In a more recent case, Drilon v. Lim,[v][9] the difference between control and
supervision was further delineated. Officers in control lay down the rules in the
performance or accomplishment of an act. If these rules are not followed, they
may, in their discretion, order the act undone or redone by their subordinates
or even decide to do it themselves. On the other hand, supervision does not
cover such authority. Supervising officials merely see to it that the rules are
followed, but they themselves do not lay down such rules, nor do they have
the discretion to modify or replace them. If the rules are not observed, they
may order the work done or redone, but only to conform to such rules. They
may not prescribe their own manner of execution of the act. They have no
discretion on this matter except to see to it that the rules are followed.
Under our present system of government, executive power is vested in the
President.[vi][10] The members of the Cabinet and other executive officials are
merely alter egos. As such, they are subject to the power of control of the
President, at whose will and behest they can be removed from office; or their
actions and decisions changed, suspended or reversed.[vii][11] In contrast, the
heads of political subdivisions are elected by the people. Their sovereign
powers emanate from the electorate, to whom they are directly accountable.
By constitutional fiat, they are subject to the Presidents supervision only, not
control, so long as their acts are exercised within the sphere of their legitimate
powers. By the same token, the President may not withhold or alter any
authority or power given them by the Constitution and the law.
Clearly then, the President can only interfere in the affairs and activities of a
local government unit if he or she finds that the latter has acted contrary to law.
This is the scope of the Presidents supervisory powers over local government
units. Hence, the President or any of his or her alter egos cannot interfere in
local affairs as long as the concerned local government unit acts within the
parameters of the law and the Constitution. Any directive therefore by the
President or any of his or her alter egos seeking to alter the wisdom of a law-
conforming judgment on local affairs of a local government unit is a patent
nullity because it violates the principle of local autonomy and separation of
powers of the executive and legislative departments in governing municipal
corporations.
Does LBC 55 go beyond the law it seeks to implement? Yes.
LBC 55 provides that the additional monthly allowances to be given by a local
government unit should not exceed P1,000 in provinces and cities and P700
in municipalities. Section 458, par. (a)(1)(xi), of RA 7160, the law that
supposedly serves as the legal basis of LBC 55, allows the grant of additional
allowances to judges when the finances of the city government allow. The said
provision does not authorize setting a definite maximum limit to the additional
allowances granted to judges. Thus, we need not belabor the point that the
finances of a city government may allow the grant of additional allowances
higher than P1,000 if the revenues of the said city government exceed its
annual expenditures. Thus, to illustrate, a city government with locally
generated annual revenues of P40 million and expenditures of P35 million can
afford to grant additional allowances of more than P1,000 each to, say, ten
judges inasmuch as the finances of the city can afford it.
Setting a uniform amount for the grant of additional allowances is an
inappropriate way of enforcing the criterion found in Section 458, par. (a)(1)(xi),
of RA 7160. The DBM over-stepped its power of supervision over local
government units by imposing a prohibition that did not correspond with the
law it sought to implement. In other words, the prohibitory nature of the circular
had no legal basis.
Furthermore, LBC 55 is void on account of its lack of publication, in violation
of our ruling in Taada vs. Tuvera[8] where we held that:
xxx. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating
only the personnel of an administrative agency and the public, need not be
published. Neither is publication required of the so-called letters of instruction
issued by administrative superiors concerning the rules or guidelines to be
followed by their subordinates in the performance of their duties.
Respondent COA claims that publication is not required for LBC 55 inasmuch
as it is merely an interpretative regulation applicable to the personnel of an
LGU. We disagree. In De Jesus vs. Commission on Audit[9] where we dealt
with the same issue, this Court declared void, for lack of publication, a DBM
circular that disallowed payment of allowances and other additional
compensation to government officials and employees. In refuting respondent
COAs argument that said circular was merely an internal regulation, we ruled
that:
On the need for publication of subject DBM-CCC No. 10, we rule in the
affirmative. Following the doctrine enunciated in Taada v. Tuvera, publication
in the Official Gazette or in a newspaper of general circulation in the Philippines
is required since DBM-CCC No. 10 is in the nature of an administrative circular
the purpose of which is to enforce or implement an existing law. Stated
differently, to be effective and enforceable, DBM-CCC No. 10 must go through
the requisite publication in the Official Gazette or in a newspaper of general
circulation in the Philippines.
In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10,
which completely disallows payment of allowances and other additional
compensation to government officials and employees, starting November 1,
1989, is not a mere interpretative or internal regulation. It is something more
than that. And why not, when it tends to deprive government workers of their
allowance and additional compensation sorely needed to keep body and soul
together. At the very least, before the said circular under attack may be
permitted to substantially reduce their income, the government officials and
employees concerned should be apprised and alerted by the publication of
subject circular in the Official Gazette or in a newspaper of general circulation
in the Philippines to the end that they be given amplest opportunity to voice
out whatever opposition they may have, and to ventilate their stance on the
matter. This approach is more in keeping with democratic precepts and
rudiments of fairness and transparency. (emphasis supplied)
In Philippine International Trading Corporation vs. Commission on Audit[10],
we again declared the same circular as void, for lack of publication, despite
the fact that it was re-issued and then submitted for publication. Emphasizing
the importance of publication to the effectivity of a regulation, we therein held
that:
It has come to our knowledge that DBM-CCC No. 10 has been re-issued in its
entirety and submitted for publication in the Official Gazette per letter to the
National Printing Office dated March 9, 1999. Would the subsequent
publication thereof cure the defect and retroact to the time that the above-
mentioned items were disallowed in audit?
The answer is in the negative, precisely for the reason that publication is
required as a condition precedent to the effectivity of a law to inform the public
of the contents of the law or rules and regulations before their rights and
interests are affected by the same. From the time the COA disallowed the
expenses in audit up to the filing of herein petition the subject circular remained
in legal limbo due to its non-publication. As was stated in Taada v. Tuvera,
prior publication of laws before they become effective cannot be dispensed
with, for the reason that it would deny the public knowledge of the laws that
are supposed to govern it.[11]
We now resolve the second issue of whether the yearly appropriation
ordinance enacted by Mandaue City providing for fixed allowances for judges
contravenes any law and should therefore be struck down as null and void.
According to respondent COA, even if LBC 55 were void, the ordinances
enacted by Mandaue City granting additional allowances to the petitioner
judges would still (be) bereft of legal basis for want of a lawful source of funds
considering that the IRA cannot be used for such purposes. Respondent COA
showed that Mandaue Citys funds consisted of locally generated revenues and
the IRA. From 1989 to 1995, Mandaue Citys yearly expenditures exceeded its
locally generated revenues, thus resulting in a deficit. During all those years,
it was the IRA that enabled Mandaue City to incur a surplus. Respondent avers
that Mandaue City used its IRA to pay for said additional allowances and this
violated paragraph 2 of the Special Provisions, page 1060, of RA 7845 (The
General Appropriations Act of 1995)[12] and paragraph 3 of the Special
Provision, page 1225, of RA 7663 (The General Appropriations Act of
1994)[13] which specifically identified the objects of expenditure of the IRA.
Nowhere in said provisions of the two budgetary laws does it say that the IRA
can be used for additional allowances of judges. Respondent COA thus argues
that the provisions in the ordinance providing for such disbursement are
against the law, considering that the grant of the subject allowances is not
within the specified use allowed by the aforesaid yearly appropriations acts.
We disagree.
Respondent COA failed to prove that Mandaue City used the IRA to spend for
the additional allowances of the judges. There was no evidence submitted by
COA showing the breakdown of the expenses of the city government and the
funds used for said expenses. All the COA presented were the amounts
expended, the locally generated revenues, the deficit, the surplus and the IRA
received each year. Aside from these items, no data or figures were presented
to show that Mandaue City deducted the subject allowances from the IRA. In
other words, just because Mandaue Citys locally generated revenues were not
enough to cover its expenditures, this did not mean that the additional
allowances of petitioner judges were taken from the IRA and not from the citys
own revenues.
Moreover, the DBM neither conducted a formal review nor ordered a
disapproval of Mandaue Citys appropriation ordinances, in accordance with
the procedure outlined by Sections 326 and 327 of RA 7160 which provide
that:
Section 326. Review of Appropriation Ordinances of Provinces, Highly
Urbanized Cities, Independent Component Cities, and Municipalities within the
Metropolitan Manila Area. The Department of Budget and Management shall
review ordinances authorizing the annual or supplemental appropriations of
provinces, highly-urbanized cities, independent component cities, and
municipalities within the Metropolitan Manila Area in accordance with the
immediately succeeding Section.
Section 327. Review of Appropriation Ordinances of Component Cities and
Municipalities.- The sangguninang panlalawigan shall review the ordinance
authorizing annual or supplemental appropriations of component cities and
municipalities in the same manner and within the same period prescribed for
the review of other ordinances.
If within ninety (90) days from receipt of copies of such ordinance, the
sangguniang panlalawigan takes no action thereon, the same shall be deemed
to have been reviewed in accordance with law and shall continue to be in full
force and effect. (emphasis supplied)
Within 90 days from receipt of the copies of the appropriation ordinance, the
DBM should have taken positive action. Otherwise, such ordinance was
deemed to have been properly reviewed and deemed to have taken effect.
Inasmuch as, in the instant case, the DBM did not follow the appropriate
procedure for reviewing the subject ordinance of Mandaue City and allowed
the 90-day period to lapse, it can no longer question the legality of the
provisions in the said ordinance granting additional allowances to judges
stationed in the said city.
WHEREFORE, the petition is hereby GRANTED, and the assailed decision
and resolution, dated September 21, 1995 and May 28, 1996, respectively, of
the Commission on Audit are hereby set aside.
No costs.
SO ORDERED.
7. Pimentel v. Aguirre et., al.
[G.R. No. 132988. July 19, 2000]
AQUILINO Q. PIMENTEL JR., petitioner, vs. Hon. ALEXANDER AGUIRRE in
his capacity as Executive Secretary, Hon. EMILIA BONCODIN in her capacity
as Secretary of the Department of Budget and Management, respondents.
ROBERTO PAGDANGANAN, intervenor.
DECISION
PANGANIBAN, J.:
The Constitution vests the President with the power of supervision, not control,
over local government units (LGUs). Such power enables him to see to it that
LGUs and their officials execute their tasks in accordance with law. While he
may issue advisories and seek their cooperation in solving economic
difficulties, he cannot prevent them from performing their tasks and using
available resources to achieve their goals. He may not withhold or alter any
authority or power given them by the law. Thus, the withholding of a portion of
internal revenue allotments legally due them cannot be directed by
administrative fiat.
The Case
Before us is an original Petition for Certiorari and Prohibition seeking (1) to
annul Section 1 of Administrative Order (AO) No. 372, insofar as it requires
local government units to reduce their expenditures by 25 percent of their
authorized regular appropriations for non-personal services; and (2) to enjoin
respondents from implementing Section 4 of the Order, which withholds a
portion of their internal revenue allotments.
On November 17, 1998, Roberto Pagdanganan, through Counsel Alberto C.
Agra, filed a Motion for Intervention/Motion to Admit Petition for Intervention,[1]
attaching thereto his Petition in Intervention[2] joining petitioner in the reliefs
sought. At the time, intervenor was the provincial governor of Bulacan, national
president of the League of Provinces of the Philippines and chairman of the
League of Leagues of Local Governments. In a Resolution dated December
15, 1998, the Court noted said Motion and Petition.
The Facts and the Arguments
On December 27, 1997, the President of the Philippines issued AO 372. Its full
text, with emphasis on the assailed provisions, is as follows:
"ADMINISTRATIVE ORDER NO. 372
ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998
WHEREAS, the current economic difficulties brought about by the peso
depreciation requires continued prudence in government fiscal management
to maintain economic stability and sustain the country's growth momentum;
WHEREAS, it is imperative that all government agencies adopt cash
management measures to match expenditures with available resources;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and direct:
SECTION 1. All government departments and agencies, including state
universities and colleges, government-owned and controlled corporations and
local governments units will identify and implement measures in FY 1998 that
will reduce total expenditures for the year by at least 25% of authorized regular
appropriations for non-personal services items, along the following suggested
areas:
1. Continued implementation of the streamlining policy on organization and
staffing by deferring action on the following:
a. Operationalization of new agencies;
b. Expansion of organizational units and/or creation of positions;
c. Filling of positions; and
d. Hiring of additional/new consultants, contractual and casual personnel,
regardless of funding source.
2. Suspension of the following activities:
a. Implementation of new capital/infrastructure projects, except those which
have already been contracted out;
b. Acquisition of new equipment and motor vehicles;
c. All foreign travels of government personnel, except those associated with
scholarships and trainings funded by grants;
d. Attendance in conferences abroad where the cost is charged to the
government except those clearly essential to Philippine commitments in the
international field as may be determined by the Cabinet;
e. Conduct of trainings/workshops/seminars, except those conducted by
government training institutions and agencies in the performance of their
regular functions and those that are funded by grants;
f. Conduct of cultural and social celebrations and sports activities, except those
associated with the Philippine Centennial celebration and those involving
regular competitions/events;
g. Grant of honoraria, except in cases where it constitutes the only source of
compensation from government received by the person concerned;
h. Publications, media advertisements and related items, except those
required by law or those already being undertaken on a regular basis;
i. Grant of new/additional benefits to employees, except those expressly and
specifically authorized by law; and
j. Donations, contributions, grants and gifts, except those given by institutions
to victims of calamities.
3. Suspension of all tax expenditure subsidies to all GOCCs and LGUs
4. Reduction in the volume of consumption of fuel, water, office supplies,
electricity and other utilities
5. Deferment of projects that are encountering significant implementation
problems
6. Suspension of all realignment of funds and the use of savings and reserves
SECTION 2. Agencies are given the flexibility to identify the specific sources
of cost-savings, provided the 25% minimum savings under Section 1 is
complied with.
SECTION 3. A report on the estimated savings generated from these
measures shall be submitted to the Office of the President, through the
Department of Budget and Management, on a quarterly basis using the
attached format.
SECTION 4. Pending the assessment and evaluation by the Development
Budget Coordinating Committee of the emerging fiscal situation, the amount
equivalent to 10% of the internal revenue allotment to local government units
shall be withheld.
SECTION 5. The Development Budget Coordination Committee shall conduct
a monthly review of the fiscal position of the National Government and if
necessary, shall recommend to the President the imposition of additional
reserves or the lifting of previously imposed reserves.
SECTION 6. This Administrative Order shall take effect January 1, 1998 and
shall remain valid for the entire year unless otherwise lifted.
DONE in the City of Manila, this 27th day of December, in the year of our Lord,
nineteen hundred and ninety-seven."

Subsequently, on December 10, 1998, President Joseph E. Estrada issued
AO 43, amending Section 4 of AO 372, by reducing to five percent (5%) the
amount of internal revenue allotment (IRA) to be withheld from the LGUs.
Petitioner contends that the President, in issuing AO 372, was in effect
exercising the power of control over LGUs. The Constitution vests in the
President, however, only the power of general supervision over LGUs,
consistent with the principle of local autonomy. Petitioner further argues that
the directive to withhold ten percent (10%) of their IRA is in contravention of
Section 286 of the Local Government Code and of Section 6, Article X of the
Constitution, providing for the automatic release to each of these units its share
in the national internal revenue.
The solicitor general, on behalf of the respondents, claims on the other hand
that AO 372 was issued to alleviate the "economic difficulties brought about by
the peso devaluation" and constituted merely an exercise of the President's
power of supervision over LGUs. It allegedly does not violate local fiscal
autonomy, because it merely directs local governments to identify measures
that will reduce their total expenditures for non-personal services by at least
25 percent. Likewise, the withholding of 10 percent of the LGUs IRA does not
violate the statutory prohibition on the imposition of any lien or holdback on
their revenue shares, because such withholding is "temporary in nature
pending the assessment and evaluation by the Development Coordination
Committee of the emerging fiscal situation."
The Issues
The Petition[3] submits the following issues for the Court's resolution:
"A. Whether or not the president committed grave abuse of discretion [in]
ordering all LGUS to adopt a 25% cost reduction program in violation of the
LGU[']S fiscal autonomy
"B. Whether or not the president committed grave abuse of discretion in
ordering the withholding of 10% of the LGU[']S IRA"
In sum, the main issue is whether (a) Section 1 of AO 372, insofar as it "directs"
LGUs to reduce their expenditures by 25 percent; and (b) Section 4 of the
same issuance, which withholds 10 percent of their internal revenue
allotments, are valid exercises of the President's power of general supervision
over local governments.
Additionally, the Court deliberated on the question whether petitioner had the
locus standi to bring this suit, despite respondents' failure to raise the issue.[4]
However, the intervention of Roberto Pagdanganan has rendered academic
any further discussion on this matter.
The Court's Ruling
The Petition is partly meritorious.
Main Issue:
Validity of AO 372
Insofar as LGUs Are Concerned
Before resolving the main issue, we deem it important and appropriate to
define certain crucial concepts: (1) the scope of the President's power of
general supervision over local governments and (2) the extent of the local
governments' autonomy.
Scope of President's Power of Supervision Over LGUs
Section 4 of Article X of the Constitution confines the President's power over
local governments to one of general supervision. It reads as follows:
"Sec. 4. The President of the Philippines shall exercise general supervision
over local governments. x x x"
This provision has been interpreted to exclude the power of control. In
Mondano v. Silvosa,[5] the Court contrasted the President's power of
supervision over local government officials with that of his power of control
over executive officials of the national government. It was emphasized that the
two terms -- supervision and control -- differed in meaning and extent. The
Court distinguished them as follows:
"x x x In administrative law, supervision means overseeing or the power or
authority of an officer to see that subordinate officers perform their duties. If
the latter fail or neglect to fulfill them, the former may take such action or step
as prescribed by law to make them perform their duties. Control, on the other
hand, means the power of an officer to alter or modify or nullify or set aside
what a subordinate officer ha[s] done in the performance of his duties and to
substitute the judgment of the former for that of the latter."[6]
In Taule v. Santos,[7] we further stated that the Chief Executive wielded no
more authority than that of checking whether local governments or their
officials were performing their duties as provided by the fundamental law and
by statutes. He cannot interfere with local governments, so long as they act
within the scope of their authority. "Supervisory power, when contrasted with
control, is the power of mere oversight over an inferior body; it does not include
any restraining authority over such body,"[8] we said.
In a more recent case, Drilon v. Lim,[9] the difference between control and
supervision was further delineated. Officers in control lay down the rules in the
performance or accomplishment of an act. If these rules are not followed, they
may, in their discretion, order the act undone or redone by their subordinates
or even decide to do it themselves. On the other hand, supervision does not
cover such authority. Supervising officials merely see to it that the rules are
followed, but they themselves do not lay down such rules, nor do they have
the discretion to modify or replace them. If the rules are not observed, they
may order the work done or redone, but only to conform to such rules. They
may not prescribe their own manner of execution of the act. They have no
discretion on this matter except to see to it that the rules are followed.
Under our present system of government, executive power is vested in the
President.[10] The members of the Cabinet and other executive officials are
merely alter egos. As such, they are subject to the power of control of the
President, at whose will and behest they can be removed from office; or their
actions and decisions changed, suspended or reversed.[11] In contrast, the
heads of political subdivisions are elected by the people. Their sovereign
powers emanate from the electorate, to whom they are directly accountable.
By constitutional fiat, they are subject to the Presidents supervision only, not
control, so long as their acts are exercised within the sphere of their legitimate
powers. By the same token, the President may not withhold or alter any
authority or power given them by the Constitution and the law.
Extent of Local Autonomy
Hand in hand with the constitutional restraint on the President's power over
local governments is the state policy of ensuring local autonomy.[12]
In Ganzon v. Court of Appeals,[13] we said that local autonomy signified "a
more responsive and accountable local government structure instituted
through a system of decentralization." The grant of autonomy is intended to
"break up the monopoly of the national government over the affairs of local
governments, x x x not x x x to end the relation of partnership and
interdependence between the central administration and local government
units x x x." Paradoxically, local governments are still subject to regulation,
however limited, for the purpose of enhancing self-government.[14]
Decentralization simply means the devolution of national administration, not
power, to local governments. Local officials remain accountable to the central
government as the law may provide.[15] The difference between
decentralization of administration and that of power was explained in detail in
Limbona v. Mangelin[16] as follows:
"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,'[17] and 'ensure their fullest
development as self-reliant communities and make them more effective
partners in the pursuit of national development and social progress.'[18] 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'[19] over them, but only to 'ensure that local
affairs are administered according to law.'[20] He has no control over their acts
in the sense that he can substitute their judgments with his own.[21]
Decentralization of power, on the other hand, involves an abdication of political
power in the favor of local government 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]
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. As we stated in Magtajas v. Pryce Properties Corp., Inc., municipal
governments are still agents of the national government.[23]
The Nature of AO 372
Consistent with the foregoing jurisprudential precepts, let us now look into the
nature of AO 372. As its preambular clauses declare, the Order was a "cash
management measure" adopted by the government "to match expenditures
with available resources," which were presumably depleted at the time due to
"economic difficulties brought about by the peso depreciation." Because of a
looming financial crisis, the President deemed it necessary to "direct all
government agencies, state universities and colleges, government-owned and
controlled corporations as well as local governments to reduce their total
expenditures by at least 25 percent along suggested areas mentioned in AO
372.
Under existing law, local government units, in addition to having administrative
autonomy in the exercise of their functions, enjoy fiscal autonomy as well.
Fiscal autonomy means that local governments have the power to create their
own sources of revenue in addition to their equitable share in the national taxes
released by the national government, as well as the power to allocate their
resources in accordance with their own priorities. It extends to the preparation
of their budgets, and local officials in turn have to work within the constraints
thereof. They are not formulated at the national level and imposed on local
governments, whether they are relevant to local needs and resources or not.
Hence, the necessity of a balancing of viewpoints and the harmonization of
proposals from both local and national officials,[24] who in any case are
partners in the attainment of national goals.
Local fiscal autonomy does not however rule out any manner of national
government intervention by way of supervision, in order to ensure that local
programs, fiscal and otherwise, are consistent with national goals.
Significantly, the President, by constitutional fiat, is the head of the economic
and planning agency of the government,[25] primarily responsible for
formulating and implementing continuing, coordinated and integrated social
and economic policies, plans and programs[26] for the entire country.
However, under the Constitution, the formulation and the implementation of
such policies and programs are subject to "consultations with the appropriate
public agencies, various private sectors, and local government units." The
President cannot do so unilaterally.
Consequently, the Local Government Code provides:[27]
"x x x [I]n the event the national government incurs an unmanaged public
sector deficit, the President of the Philippines is hereby authorized, upon the
recommendation of [the] Secretary of Finance, Secretary of the Interior and
Local Government and Secretary of Budget and Management, and subject to
consultation with the presiding officers of both Houses of Congress and the
presidents of the liga, to make the necessary adjustments in the internal
revenue allotment of local government units but in no case shall the allotment
be less than thirty percent (30%) of the collection of national internal revenue
taxes of the third fiscal year preceding the current fiscal year x x x."
There are therefore several requisites before the President may interfere in
local fiscal matters: (1) an unmanaged public sector deficit of the national
government; (2) consultations with the presiding officers of the Senate and the
House of Representatives and the presidents of the various local leagues; and
(3) the corresponding recommendation of the secretaries of the Department of
Finance, Interior and Local Government, and Budget and Management.
Furthermore, any adjustment in the allotment shall in no case be less than
thirty percent (30%) of the collection of national internal revenue taxes of the
third fiscal year preceding the current one.
Petitioner points out that respondents failed to comply with these requisites
before the issuance and the implementation of AO 372. At the very least, they
did not even try to show that the national government was suffering from an
unmanageable public sector deficit. Neither did they claim having conducted
consultations with the different leagues of local governments. Without these
requisites, the President has no authority to adjust, much less to reduce,
unilaterally the LGU's internal revenue allotment.
The solicitor general insists, however, that AO 372 is merely directory and has
been issued by the President consistent with his power of supervision over
local governments. It is intended only to advise all government agencies and
instrumentalities to undertake cost-reduction measures that will help maintain
economic stability in the country, which is facing economic difficulties. Besides,
it does not contain any sanction in case of noncompliance. Being merely an
advisory, therefore, Section 1 of AO 372 is well within the powers of the
President. Since it is not a mandatory imposition, the directive cannot be
characterized as an exercise of the power of control.
While the wordings of Section 1 of AO 372 have a rather commanding tone,
and while we agree with petitioner that the requirements of Section 284 of the
Local Government Code have not been satisfied, we are prepared to accept
the solicitor general's assurance that the directive to "identify and implement
measures x x x that will reduce total expenditures x x x by at least 25% of
authorized regular appropriation" is merely advisory in character, and does not
constitute a mandatory or binding order that interferes with local autonomy.
The language used, while authoritative, does not amount to a command that
emanates from a boss to a subaltern.
Rather, the provision is merely an advisory to prevail upon local executives to
recognize the need for fiscal restraint in a period of economic difficulty. Indeed,
all concerned would do well to heed the President's call to unity, solidarity and
teamwork to help alleviate the crisis. It is understood, however, that no legal
sanction may be imposed upon LGUs and their officials who do not follow such
advice. It is in this light that we sustain the solicitor general's contention in
regard to Section 1.
Withholding a Part of LGUs' IRA
Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal
autonomy is the automatic release of the shares of LGUs in the national
internal revenue. This is mandated by no less than the Constitution.[28] The
Local Government Code[29] specifies further that the release shall be made
directly to the LGU concerned within five (5) days after every quarter of the
year and "shall not be subject to any lien or holdback that may be imposed by
the national government for whatever purpose."[30] As a rule, the term "shall"
is a word of command that must be given a compulsory meaning.[31] The
provision is, therefore, imperative.
Section 4 of AO 372, however, orders the withholding, effective January 1,
1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation
by the Development Budget Coordinating Committee of the emerging fiscal
situation" in the country. Such withholding clearly contravenes the Constitution
and the law. Although temporary, it is equivalent to a holdback, which means
"something held back or withheld, often temporarily."[32] Hence, the
"temporary" nature of the retention by the national government does not
matter. Any retention is prohibited.
In sum, while Section 1 of AO 372 may be upheld as an advisory effected in
times of national crisis, Section 4 thereof has no color of validity at all. The
latter provision effectively encroaches on the fiscal autonomy of local
governments. Concededly, the President was well-intentioned in issuing his
Order to withhold the LGUs IRA, but the rule of law requires that even the best
intentions must be carried out within the parameters of the Constitution and
the law. Verily, laudable purposes must be carried out by legal methods.
Refutation of Justice Kapunan's Dissent
Mr. Justice Santiago M. Kapunan dissents from our Decision on the grounds
that, allegedly, (1) the Petition is premature; (2) AO 372 falls within the powers
of the President as chief fiscal officer; and (3) the withholding of the LGUs IRA
is implied in the President's authority to adjust it in case of an unmanageable
public sector deficit.
First, on prematurity. According to the Dissent, when "the conduct has not yet
occurred and the challenged construction has not yet been adopted by the
agency charged with administering the administrative order, the determination
of the scope and constitutionality of the executive action in advance of its
immediate adverse effect involves too remote and abstract an inquiry for the
proper exercise of judicial function."
This is a rather novel theory -- that people should await the implementing evil
to befall on them before they can question acts that are illegal or
unconstitutional. Be it remembered that the real issue here is whether the
Constitution and the law are contravened by Section 4 of AO 372, not whether
they are violated by the acts implementing it. In the unanimous en banc case
Taada v. Angara,[33] this Court held that when an act of the legislative
department is seriously alleged to have infringed the Constitution, settling the
controversy becomes the duty of this Court. By the mere enactment of the
questioned law or the approval of the challenged action, the dispute is said to
have ripened into a judicial controversy even without any other overt act.
Indeed, even a singular violation of the Constitution and/or the law is enough
to awaken judicial duty. Said the Court:
"In seeking to nullify an act of the Philippine Senate on the ground that it
contravenes the Constitution, the petition no doubt raises a justiciable
controversy. Where an action of the legislative branch is seriously alleged to
have infringed the Constitution, it becomes not only the right but in fact the
duty of the judiciary to settle the dispute. 'The question thus posed is judicial
rather than political. The duty (to adjudicate) remains to assure that the
supremacy of the Constitution is upheld.'[34] Once a 'controversy as to the
application or interpretation of a constitutional provision is raised before this
Court x x x , it becomes a legal issue which the Court is bound by constitutional
mandate to decide.'[35]
xxxxxxxxx
"As this Court has repeatedly and firmly emphasized in many cases,[36] it will
not shirk, digress from or abandon its sacred duty and authority to uphold the
Constitution in matters that involve grave abuse of discretion brought before it
in appropriate cases, committed by any officer, agency, instrumentality or
department of the government."
In the same vein, the Court also held in Tatad v. Secretary of the Department
of Energy:[37]
"x x x Judicial power includes not only the duty of the courts to settle actual
controversies involving rights which are legally demandable and enforceable,
but also the duty to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch
or instrumentality of government. The courts, as guardians of the Constitution,
have the inherent authority to determine whether a statute enacted by the
legislature transcends the limit imposed by the fundamental law. Where the
statute violates the Constitution, it is not only the right but the duty of the
judiciary to declare such act unconstitutional and void."
By the same token, when an act of the President, who in our constitutional
scheme is a coequal of Congress, is seriously alleged to have infringed the
Constitution and the laws, as in the present case, settling the dispute becomes
the duty and the responsibility of the courts.
Besides, the issue that the Petition is premature has not been raised by the
parties; hence it is deemed waived. Considerations of due process really
prevents its use against a party that has not been given sufficient notice of its
presentation, and thus has not been given the opportunity to refute it.[38]
Second, on the President's power as chief fiscal officer of the country. Justice
Kapunan posits that Section 4 of AO 372 conforms with the President's role as
chief fiscal officer, who allegedly "is clothed by law with certain powers to
ensure the observance of safeguards and auditing requirements, as well as
the legal prerequisites in the release and use of IRAs, taking into account the
constitutional and statutory mandates."[39] He cites instances when the
President may lawfully intervene in the fiscal affairs of LGUs.
Precisely, such powers referred to in the Dissent have specifically been
authorized by law and have not been challenged as violative of the
Constitution. On the other hand, Section 4 of AO 372, as explained earlier,
contravenes explicit provisions of the Local Government Code (LGC) and the
Constitution. In other words, the acts alluded to in the Dissent are indeed
authorized by law; but, quite the opposite, Section 4 of AO 372 is bereft of any
legal or constitutional basis.
Third, on the President's authority to adjust the IRA of LGUs in case of an
unmanageable public sector deficit. It must be emphasized that in striking
down Section 4 of AO 372, this Court is not ruling out any form of reduction in
the IRAs of LGUs. Indeed, as the President may make necessary adjustments
in case of an unmanageable public sector deficit, as stated in the main part of
this Decision, and in line with Section 284 of the LGC, which Justice Kapunan
cites. He, however, merely glances over a specific requirement in the same
provision -- that such reduction is subject to consultation with the presiding
officers of both Houses of Congress and, more importantly, with the presidents
of the leagues of local governments.
Notably, Justice Kapunan recognizes the need for "interaction between the
national government and the LGUs at the planning level," in order to ensure
that "local development plans x x x hew to national policies and standards."
The problem is that no such interaction or consultation was ever held prior to
the issuance of AO 372. This is why the petitioner and the intervenor (who was
a provincial governor and at the same time president of the League of
Provinces of the Philippines and chairman of the League of Leagues of Local
Governments) have protested and instituted this action. Significantly,
respondents do not deny the lack of consultation.
In addition, Justice Kapunan cites Section 287[40] of the LGC as impliedly
authorizing the President to withhold the IRA of an LGU, pending its
compliance with certain requirements. Even a cursory reading of the provision
reveals that it is totally inapplicable to the issue at bar. It directs LGUs to
appropriate in their annual budgets 20 percent of their respective IRAs for
development projects. It speaks of no positive power granted the President to
priorly withhold any amount. Not at all.
WHEREFORE, the Petition is GRANTED. Respondents and their successors
are hereby permanently PROHIBITED from implementing Administrative
Order Nos. 372 and 43, respectively dated December 27, 1997 and December
10, 1998, insofar as local government units are concerned.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Mendoza, Quisumbing, Pardo,
Buena, Gonzaga-Reyes, and De Leon, Jr., JJ., concur.
Kapunan, J., see dissenting opinion.
Purisima, and Ynares-Santiago, JJ., join J. Kapunan in his dissenting opinion.
DISSENTING OPINION
KAPUNAN, J.:
In striking down as unconstitutional and illegal Section 4 of Administrative
Order No. 372 ("AO No. 372"), the majority opinion posits that the President
exercised power of control over the local government units ("LGU), which he
does not have, and violated the provisions of Section 6, Article X of the
Constitution, which states:
SEC. 6. Local government units shall have a just share, as determined by law,
in the national taxes which shall be automatically released to them.
and Section 286(a) of the Local Government Code, which provides:
SEC. 286. Automatic Release of Shares. - (a) The share of each local
government unit shall be released, without need of any further action, directly
to the provincial, city, municipal or barangay treasurer, as the case may be, on
a quarterly basis within five (5) days after the end of each quarter, and which
shall not be subject to any lien or holdback that may be imposed by the national
government for whatever purpose.
The share of the LGUs in the national internal revenue taxes is defined in
Section 284 of the same Local Government Code, to wit:
SEC. 284. Allotment of Internal Revenue Taxes. - Local government units shall
have a share in the national internal revenue taxes based on the collection of
the third fiscal year preceding the current fiscal year as follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%);
(b) On the second year, thirty-five (35%) percent; and
(c) On the third year and thereafter, forty percent (40%).
Provided, That in the event that the national government incurs an
unmanageable public sector deficit, the President of the Philippines is hereby
authorized, upon the recommendation of Secretary of Finance, Secretary of
Interior and Local Government and Secretary of Budget and Management, and
subject to consultation with the presiding officers of both Houses of Congress
and the presidents of the liga, to make the necessary adjustments in the
internal revenue allotment of local government units but in no case shall the
allotment be less than thirty percent (30%) of the collection of national internal
revenue taxes of the third fiscal year preceding the current fiscal year:
Provided, further, That in the first year of the effectivity of this Code, the local
government units shall, in addition to the thirty percent (30%) internal revenue
allotment which shall include the cost of devolved functions for essential public
services, be entitled to receive the amount equivalent to the cost of devolved
personal services.
xxx
The majority opinion takes the view that the withholding of ten percent (10%)
of the internal revenue allotment ("IRA") to the LGUs pending the assessment
and evaluation by the Development Budget Coordinating Committee of the
emerging fiscal situation as called for in Section 4 of AO No. 372 transgresses
against the above-quoted provisions which mandate the "automatic" release
of the shares of the LGUs in the national internal revenue in consonance with
local fiscal autonomy. The pertinent portions of AO No. 372 are reproduced
hereunder:
ADMINISTRATIVE ORDER NO. 372
ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998
WHEREAS, the current economic difficulties brought about by the peso
depreciation requires continued prudence in government fiscal management
to maintain economic stability and sustain the countrys growth momentum;
WHEREAS, it is imperative that all government agencies adopt cash
management measures to match expenditures with available resources; NOW
THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and direct:
SECTION 1. All government departments and agencies, including x x x local
government units will identify and implement measures in FY 1998 that will
reduce total appropriations for non-personal services items, along the following
suggested areas:
xxx
SECTION 4. Pending the assessment and evaluation by the Development
Budget Coordinating Committee of the emerging fiscal situation the amount
equivalent to 10% of the internal revenue allotment to local government units
shall be withheld.
xxx
Subsequently, on December 10, 1998, President Joseph E. Estrada issued
Administrative Order No. 43 (AO No. 43), amending Section 4 of AO No. 372,
by reducing to five percent (5%) the IRA to be withheld from the LGUs, thus:
ADMINISTRATIVE ORDER NO. 43
AMENDING ADMINISTRATIVE ORDER NO. 372 DATED 27 DECEMBER
1997 ENTITLED "ADOPTION OF ECONOMY MEASURES IN
GOVERNMENT FOR FY 1998"
WHEREAS, Administrative Order No. 372 dated 27 December 1997 entitled
"Adoption of Economy Measures in Government for FY 1998" was issued to
address the economic difficulties brought about by the peso devaluation in
1997;
WHEREAS, Section 4 of Administrative Order No. 372 provided that the
amount equivalent to 10% of the internal revenue allotment to local
government units shall be withheld; and,
WHEREAS, there is a need to release additional funds to local government
units for vital projects and expenditures.
NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the
Republic of the Philippines, by virtue of the powers vested in me by law, do
hereby order the reduction of the withheld Internal Revenue Allotment (IRA) of
local government units from ten percent to five percent.
The five percent reduction in the IRA withheld for 1998 shall be released before
25 December 1998.
DONE in the City of Manila, this 10th day of December, in the year of our Lord,
nineteen hundred and ninety eight.
With all due respect, I beg to disagree with the majority opinion.
Section 4 of AO No. 372 does not present a case ripe for adjudication. The
language of Section 4 does not conclusively show that, on its face, the
constitutional provision on the automatic release of the IRA shares of the LGUs
has been violated. Section 4, as worded, expresses the idea that the
withholding is merely temporary which fact alone would not merit an outright
conclusion of its unconstitutionality, especially in light of the reasonable
presumption that administrative agencies act in conformity with the law and
the Constitution. Where the conduct has not yet occurred and the challenged
construction has not yet been adopted by the agency charged with
administering the administrative order, the determination of the scope and
constitutionality of the executive action in advance of its immediate adverse
effect involves too remote and abstract an inquiry for the proper exercise of
judicial function. Petitioners have not shown that the alleged 5% IRA share of
LGUs that was temporarily withheld has not yet been released, or that the
Department of Budget and Management (DBM) has refused and continues to
refuse its release. In view thereof, the Court should not decide as this case
suggests an abstract proposition on constitutional issues.
The President is the chief fiscal officer of the country. He is ultimately
responsible for the collection and distribution of public money:
SECTION 3. Powers and Functions. - The Department of Budget and
Management shall assist the President in the preparation of a national
resources and expenditures budget, preparation, execution and control of the
National Budget, preparation and maintenance of accounting systems
essential to the budgetary process, achievement of more economy and
efficiency in the management of government operations, administration of
compensation and position classification systems, assessment of
organizational effectiveness and review and evaluation of legislative proposals
having budgetary or organizational implications.1
In a larger context, his role as chief fiscal officer is directed towards "the
nation's efforts at economic and social upliftment"2 for which more specific
economic powers are delegated. Within statutory limits, the President can,
thus, fix "tariff rates, import and export quotas, tonnage and wharfage dues,
and other duties or imposts within the framework of the national development
program of the government,3 as he is also responsible for enlisting the country
in international economic agreements.4 More than this, to achieve "economy
and efficiency in the management of government operations," the President is
empowered to create appropriation reserves,5 suspend expenditure
appropriations,6 and institute cost reduction schemes.7
As chief fiscal officer of the country, the President supervises fiscal
development in the local government units and ensures that laws are faithfully
executed.8 For this reason, he can set aside tax ordinances if he finds them
contrary to the Local Government Code.9 Ordinances cannot contravene
statutes and public policy as declared by the national govemment.10 The goal
of local economy is not to "end the relation of partnership and inter-
dependence between the central administration and local government
units,"11 but to make local governments "more responsive and accountable"
[to] "ensure their fullest development as self-reliant communities and make
them more effective partners in the pursuit of national development and social
progress."12
The interaction between the national government and the local government
units is mandatory at the planning level. Local development plans must thus
hew to "national policies and standards13 as these are integrated into the
regional development plans for submission to the National Economic
Development Authority. "14 Local budget plans and goals must also be
harmonized, as far as practicable, with "national development goals and
strategies in order to optimize the utilization of resources and to avoid
duplication in the use of fiscal and physical resources."15
Section 4 of AO No. 372 was issued in the exercise by the President not only
of his power of general supervision, but also in conformity with his role as chief
fiscal officer of the country in the discharge of which he is clothed by law with
certain powers to ensure the observance of safeguards and auditing
requirements, as well as the legal prerequisites in the release and use of IRAs,
taking into account the constitutional16 and statutory17 mandates.
However, the phrase "automatic release" of the LGUs' shares does not mean
that the release of the funds is mechanical, spontaneous, self-operating or
reflex. IRAs must first be determined, and the money for their payment
collected.18 In this regard, administrative documentations are also undertaken
to ascertain their availability, limits and extent. The phrase, thus, should be
used in the context of the whole budgetary process and in relation to pertinent
laws relating to audit and accounting requirements. In the workings of the
budget for the fiscal year, appropriations for expenditures are supported by
existing funds in the national coffers and by proposals for revenue raising. The
money, therefore, available for IRA release may not be existing but merely
inchoate, or a mere expectation. It is not infrequent that the Executive
Department's proposals for raising revenue in the form of proposed legislation
may not be passed by the legislature. As such, the release of IRA should not
mean release of absolute amounts based merely on mathematical
computations. There must be a prior determination of what exact amount the
local government units are actually entitled in light of the economic factors
which affect the fiscal situation in the country. Foremost of these is where, due
to an unmanageable public sector deficit, the President may make the
necessary adjustments in the IRA of LGUs. Thus, as expressly provided in
Article 284 of the Local Government Code:
x x x (I)n the event that the national government incurs an unmanageable
public sector deficit, the President of the Philippines is hereby authorized, upon
the recommendation of Secretary of Finance, Secretary of Interior and Local
Government and Secretary of Budget and Management and subject to
consultation with the presiding officers of both Houses of Congress and the
presidents of the "liga," to make the necessary adjustments in the internal
revenue allotment of local government units but in no case shall the allotment
be less than thirty percent (30%) of the collection of national internal revenue
taxes of the third fiscal year preceding the current fiscal year. x x x.
Under the aforecited provision, if facts reveal that the economy has sustained
or will likely sustain such "unmanageable public sector deficit," then the LGUs
cannot assert absolute right of entitlement to the full amount of forty percent
(40%) share in the IRA, because the President is authorized to make an
adjustment and to reduce the amount to not less than thirty percent (30%). It
is, therefore, impractical to immediately release the full amount of the IRAs and
subsequently require the local government units to return at most ten percent
(10%) once the President has ascertained that there exists an unmanageable
public sector deficit.
By necessary implication, the power to make necessary adjustments (including
reduction) in the IRA in case of an unmanageable public sector deficit, includes
the discretion to withhold the IRAs temporarily until such time that the
determination of the actual fiscal situation is made. The test in determining
whether one power is necessarily included in a stated authority is: "The
exercise of a more absolute power necessarily includes the lesser power
especially where it is needed to make the first power effective."19 If the
discretion to suspend temporarily the release of the IRA pending such
examination is withheld from the President, his authority to make the
necessary IRA adjustments brought about by the unmanageable public sector
deficit would be emasculated in the midst of serious economic crisis. In the
situation conjured by the majority opinion, the money would already have been
gone even before it is determined that fiscal crisis is indeed happening.
The majority opinion overstates the requirement in Section 286 of the Local
Government Code that the IRAs "shall not be subject to any lien or holdback
that may be imposed by the national government for whatever purpose" as
proof that no withholding of the release of the IRAs is allowed albeit temporary
in nature.
It is worthy to note that this provision does not appear in the Constitution.
Section 6, Art X of the Constitution merely directs that LGUs "shall have a just
share" in the national taxes "as determined by law" and which share shall be
automatically released to them. This means that before the LGUs share is
released, there should be first a determination, which requires a process, of
what is the correct amount as dictated by existing laws. For one, the
Implementing Rules of the Local Government Code allows deductions from
the IRAs, to wit:
Article 384. Automatic Release of IRA Shares of LGUs:
xxx
(c) The IRA share of LGUs shall not be subject to any lien or hold back that
may be imposed by the National Government for whatever purpose unless
otherwise provided in the Code or other applicable laws and loan contract on
project agreements arising from foreign loans and international commitments,
such as premium contributions of LGUs to the Government Service Insurance
System and loans contracted by LGUs under foreign-assisted projects.
Apart from the above, other mandatory deductions are made from the IRAs
prior to their release, such as: (1) total actual cost of devolution and the cost
of city-funded hospitals;20 and (2) compulsory contributions21 and other
remittances.22 It follows, therefore, that the President can withhold portions of
IRAs in order to set-off or compensate legitimately incurred obligations and
remittances of LGUs.
Significantly, Section 286 of the Local Government Code does not make
mention of the exact amount that should be automatically released to the
LGUs. The provision does not mandate that the entire 40% share mentioned
in Section 284 shall be released. It merely provides that the "share" of each
LGU shall be released and which "shall not be subject to any lien or holdback
that may be imposed by the national government for whatever purpose." The
provision on automatic release of IRA share should, thus, be read together
with Section 284, including the proviso on adjustment or reduction of IRAs, as
well as other relevant laws. It may happen that the share of the LGUs may
amount to the full forty percent (40%) or the reduced amount of thirty percent
(30%) as adjusted without any law being violated. In other words, all that
Section 286 requires is the automatic release of the amount that the LGUs are
rightfully and legally entitled to, which, as the same section provides, should
not be less than thirty percent (30%) of the collection of the national revenue
taxes. So that even if five percent (5%) or ten percent (10%) is either
temporarily or permanently withheld, but the minimum of thirty percent (30%)
allotment for the LGUs is released pursuant to the President's authority to
make the necessary adjustment in the LGUS' share, there is still full
compliance with the requirements of the automatic release of the LGUs' share.
Finally, the majority insists that the withholding of ten percent (10%) or five
percent (5%) of the IRAs could not have been done pursuant to the power of
the President to adjust or reduce such shares under Section 284 of the Local
Government Code because there was no showing of an unmanageable public
sector deficit by the national government, nor was there evidence that
consultations with the presiding officers of both Houses of Congress and the
presidents of the various leagues had taken place and the corresponding
recommendations of the Secretary of Finance, Secretary of Interior and Local
Government and the Budget Secretary were made.
I beg to differ. The power to determine whether there is an unmanageable
public sector deficit is lodged in the President. The President's determination,
as fiscal manager of the country, of the existence of economic difficulties which
could amount to "unmanageable public sector deficit" should be accorded
respect. In fact, the withholding of the ten percent (10%) of the LGUs' share
was further justified by the current economic difficulties brought about by the
peso depreciation as shown by one of the "WHEREASES" of AO No. 372.23
In the absence of any showing to the contrary, it is presumed that the President
had made prior consultations with the officials thus mentioned and had acted
upon the recommendations of the Secretaries of Finance, Interior and Local
Government and Budget.24
Therefore, even assuming hypothetically that there was effectively a deduction
of five percent (5%) of the LGUs' share, which was in accordance with the
President's prerogative in view of the pronouncement of the existence of an
unmanageable public sector deficit, the deduction would still be valid in the
absence of any proof that the LGUs' allotment was less than the thirty percent
(30%) limit provided for in Section 284 of the Local Government Code.
In resume, the withholding of the amount equivalent to five percent (5%) of the
IRA to the LGUs was temporary pending determination by the Executive of the
actual share which the LGUs are rightfully entitled to on the basis of the
applicable laws, particularly Section 284 of the Local Government Code,
authorizing the President to make the necessary adjustments in the IRA of
LGUs in the event of an unmanageable public sector deficit. And assuming
that the said five percent (5%) of the IRA pertaining to the 1998 Fiscal Year
has been permanently withheld, there is no showing that the amount actually
released to the LGUs that same year was less than thirty percent (30%) of the
national internal revenue taxes collected, without even considering the proper
deductions allowed by law.
WHEREFORE, I vote to DISMISS the petition.
8. Batangas v. Romulo
G.R. No. 152774 May 27, 2004
THE PROVINCE OF BATANGAS, represented by its Governor,
HERMILANDO I. MANDANAS, petitioner,
vs.
HON. ALBERTO G. ROMULO, Executive Secretary and Chairman of the
Oversight Committee on Devolution; HON. EMILIA BONCODIN, Secretary,
Department of Budget and Management; HON. JOSE D. LINA, JR., Secretary,
Department of Interior and Local Government, respondents.
DECISION
CALLEJO, SR., J.:
The Province of Batangas, represented by its Governor, Hermilando I.
Mandanas, filed the present petition for certiorari, prohibition and mandamus
under Rule 65 of the Rules of Court, as amended, to declare as
unconstitutional and void certain provisos contained in the General
Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they uniformly
earmarked for each corresponding year the amount of five billion pesos
(5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local
Government Service Equalization Fund (LGSEF) and imposed conditions for
the release thereof.
Named as respondents are Executive Secretary Alberto G. Romulo, in his
capacity as Chairman of the Oversight Committee on Devolution, Secretary
Emilia Boncodin of the Department of Budget and Management (DBM) and
Secretary Jose Lina of the Department of Interior and Local Government
(DILG).
Background
On December 7, 1998, then President Joseph Ejercito Estrada issued
Executive Order (E.O.) No. 48 entitled "ESTABLISHING A PROGRAM FOR
DEVOLUTION ADJUSTMENT AND EQUALIZATION." The program was
established to "facilitate the process of enhancing the capacities of local
government units (LGUs) in the discharge of the functions and services
devolved to them by the National Government Agencies concerned pursuant
to the Local Government Code."1 The Oversight Committee (referred to as the
Devolution Committee in E.O. No. 48) constituted under Section 533(b) of
Republic Act No. 7160 (The Local Government Code of 1991) has been tasked
to formulate and issue the appropriate rules and regulations necessary for its
effective implementation.2 Further, to address the funding shortfalls of
functions and services devolved to the LGUs and other funding requirements
of the program, the "Devolution Adjustment and Equalization Fund" was
created.3 For 1998, the DBM was directed to set aside an amount to be
determined by the Oversight Committee based on the devolution status
appraisal surveys undertaken by the DILG.4 The initial fund was to be sourced
from the available savings of the national government for CY 1998.5 For 1999
and the succeeding years, the corresponding amount required to sustain the
program was to be incorporated in the annual GAA.6 The Oversight
Committee has been authorized to issue the implementing rules and
regulations governing the equitable allocation and distribution of said fund to
the LGUs.7
The LGSEF in the GAA of 1999
In Republic Act No. 8745, otherwise known as the GAA of 1999, the program
was renamed as the LOCAL GOVERNMENT SERVICE EQUALIZATION
FUND (LGSEF). Under said appropriations law, the amount of
96,780,000,000 was allotted as the share of the LGUs in the internal revenue
taxes. Item No. 1, Special Provisions, Title XXXVI A. Internal Revenue
Allotment of Rep. Act No. 8745 contained the following proviso:
... PROVIDED, That the amount of FIVE BILLION PESOS (5,000,000,000)
shall be earmarked for the Local Government Service Equalization Fund for
the funding requirements of projects and activities arising from the full and
efficient implementation of devolved functions and services of local
government units pursuant to R.A. No. 7160, otherwise known as the Local
Government Code of 1991: PROVIDED, FURTHER, That such amount shall
be released to the local government units subject to the implementing rules
and regulations, including such mechanisms and guidelines for the equitable
allocations and distribution of said fund among local government units subject
to the guidelines that may be prescribed by the Oversight Committee on
Devolution as constituted pursuant to Book IV, Title III, Section 533(b) of R.A.
No. 7160. The Internal Revenue Allotment shall be released directly by the
Department of Budget and Management to the Local Government Units
concerned.
On July 28, 1999, the Oversight Committee (with then Executive Secretary
Ronaldo B. Zamora as Chairman) passed Resolution Nos. OCD-99-003, OCD-
99-005 and OCD-99-006 entitled as follows:
OCD-99-005
RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP5
BILLION CY 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND
(LGSEF) AND REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH
EJERCITO ESTRADA TO APPROVE SAID ALLOCATION SCHEME.
OCD-99-006
RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP4.0
BILLION OF THE 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION
FUND AND ITS CONCOMITANT GENERAL FRAMEWORK,
IMPLEMENTING GUIDELINES AND MECHANICS FOR ITS
IMPLEMENTATION AND RELEASE, AS PROMULGATED BY THE
OVERSIGHT COMMITTEE ON DEVOLUTION.
OCD-99-003
RESOLUTION REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH
EJERCITO ESTRADA TO APPROVE THE REQUEST OF THE OVERSIGHT
COMMITTEE ON DEVOLUTION TO SET ASIDE TWENTY PERCENT (20%)
OF THE LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF)
FOR LOCAL AFFIRMATIVE ACTION PROJECTS AND OTHER PRIORITY
INITIATIVES FOR LGUs INSTITUTIONAL AND CAPABILITY BUILDING IN
ACCORDANCE WITH THE IMPLEMENTING GUIDELINES AND
MECHANICS AS PROMULGATED BY THE COMMITTEE.
These OCD resolutions were approved by then President Estrada on October
6, 1999.
Under the allocation scheme adopted pursuant to Resolution No. OCD-99-
005, the five billion pesos LGSEF was to be allocated as follows:
1. The PhP4 Billion of the LGSEF shall be allocated in accordance with the
allocation scheme and implementing guidelines and mechanics promulgated
and adopted by the OCD. To wit:
a. The first PhP2 Billion of the LGSEF shall be allocated in accordance with
the codal formula sharing scheme as prescribed under the 1991 Local
Government Code;
b. The second PhP2 Billion of the LGSEF shall be allocated in accordance with
a modified 1992 cost of devolution fund (CODEF) sharing scheme, as
recommended by the respective leagues of provinces, cities and municipalities
to the OCD. The modified CODEF sharing formula is as follows:
Province : 40%
Cities : 20%
Municipalities : 40%
This is applied to the P2 Billion after the approved amounts granted to
individual provinces, cities and municipalities as assistance to cover decrease
in 1999 IRA share due to reduction in land area have been taken out.
2. The remaining PhP1 Billion of the LGSEF shall be earmarked to support
local affirmative action projects and other priority initiatives submitted by LGUs
to the Oversight Committee on Devolution for approval in accordance with its
prescribed guidelines as promulgated and adopted by the OCD.
In Resolution No. OCD-99-003, the Oversight Committee set aside the one
billion pesos or 20% of the LGSEF to support Local Affirmative Action Projects
(LAAPs) of LGUs. This remaining amount was intended to "respond to the
urgent need for additional funds assistance, otherwise not available within the
parameters of other existing fund sources." For LGUs to be eligible for funding
under the one-billion-peso portion of the LGSEF, the OCD promulgated the
following:
III. CRITERIA FOR ELIGIBILITY:
1. LGUs (province, city, municipality, or barangay), individually or by group or
multi-LGUs or leagues of LGUs, especially those belonging to the 5th and 6th
class, may access the fund to support any projects or activities that satisfy any
of the aforecited purposes. A barangay may also access this fund directly or
through their respective municipality or city.
2. The proposed project/activity should be need-based, a local priority, with
high development impact and are congruent with the socio-cultural, economic
and development agenda of the Estrada Administration, such as food security,
poverty alleviation, electrification, and peace and order, among others.
3. Eligible for funding under this fund are projects arising from, but not limited
to, the following areas of concern:
a. delivery of local health and sanitation services, hospital services and other
tertiary services;
b. delivery of social welfare services;
c. provision of socio-cultural services and facilities for youth and community
development;
d. provision of agricultural and on-site related research;
e. improvement of community-based forestry projects and other local projects
on environment and natural resources protection and conservation;
f. improvement of tourism facilities and promotion of tourism;
g. peace and order and public safety;
h. construction, repair and maintenance of public works and infrastructure,
including public buildings and facilities for public use, especially those
destroyed or damaged by man-made or natural calamities and disaster as well
as facilities for water supply, flood control and river dikes;
i. provision of local electrification facilities;
j. livelihood and food production services, facilities and equipment;
k. other projects that may be authorized by the OCD consistent with the
aforementioned objectives and guidelines;
4. Except on extremely meritorious cases, as may be determined by the
Oversight Committee on Devolution, this portion of the LGSEF shall not be
used in expenditures for personal costs or benefits under existing laws
applicable to governments. Generally, this fund shall cover the following
objects of expenditures for programs, projects and activities arising from the
implementation of devolved and regular functions and services:
a. acquisition/procurement of supplies and materials critical to the full and
effective implementation of devolved programs, projects and activities;
b. repair and/or improvement of facilities;
c. repair and/or upgrading of equipment;
d. acquisition of basic equipment;
e. construction of additional or new facilities;
f. counterpart contribution to joint arrangements or collective projects among
groups of municipalities, cities and/or provinces related to devolution and
delivery of basic services.
5. To be eligible for funding, an LGU or group of LGU shall submit to the
Oversight Committee on Devolution through the Department of Interior and
Local Governments, within the prescribed schedule and timeframe, a Letter
Request for Funding Support from the Affirmative Action Program under the
LGSEF, duly signed by the concerned LGU(s) and endorsed by cooperators
and/or beneficiaries, as well as the duly signed Resolution of Endorsement by
the respective Sanggunian(s) of the LGUs concerned. The LGU-proponent
shall also be required to submit the Project Request (PR), using OCD Project
Request Form No. 99-02, that details the following:
(a) general description or brief of the project;
(b) objectives and justifications for undertaking the project, which should
highlight the benefits to the locality and the expected impact to the local
program/project arising from the full and efficient implementation of social
services and facilities, at the local levels;
(c) target outputs or key result areas;
(d) schedule of activities and details of requirements;

(e) total cost requirement of the project;
(f) proponent's counterpart funding share, if any, and identified source(s) of
counterpart funds for the full implementation of the project;
(g) requested amount of project cost to be covered by the LGSEF.
Further, under the guidelines formulated by the Oversight Committee as
contained in Attachment - Resolution No. OCD-99-003, the LGUs were
required to identify the projects eligible for funding under the one-billion-peso
portion of the LGSEF and submit the project proposals thereof and other
documentary requirements to the DILG for appraisal. The project proposals
that passed the DILG's appraisal would then be submitted to the Oversight
Committee for review, evaluation and approval. Upon its approval, the
Oversight Committee would then serve notice to the DBM for the preparation
of the Special Allotment Release Order (SARO) and Notice of Cash Allocation
(NCA) to effect the release of funds to the said LGUs.
The LGSEF in the GAA of 2000
Under Rep. Act No. 8760, otherwise known as the GAA of 2000, the amount
of 111,778,000,000 was allotted as the share of the LGUs in the internal
revenue taxes. As in the GAA of 1999, the GAA of 2000 contained a proviso
earmarking five billion pesos of the IRA for the LGSEF. This proviso, found in
Item No. 1, Special Provisions, Title XXXVII A. Internal Revenue Allotment,
was similarly worded as that contained in the GAA of 1999.
The Oversight Committee, in its Resolution No. OCD-2000-023 dated June 22,
2000, adopted the following allocation scheme governing the five billion pesos
LGSEF for 2000:
1. The PhP3.5 Billion of the CY 2000 LGSEF shall be allocated to and shared
by the four levels of LGUs, i.e., provinces, cities, municipalities, and
barangays, using the following percentage-sharing formula agreed upon and
jointly endorsed by the various Leagues of LGUs:
For Provinces 26% or 910,000,000
For Cities 23% or 805,000,000
For Municipalities 35% or 1,225,000,000
For Barangays 16% or 560,000,000
Provided that the respective Leagues representing the provinces, cities,
municipalities and barangays shall draw up and adopt the horizontal
distribution/sharing schemes among the member LGUs whereby the Leagues
concerned may opt to adopt direct financial assistance or project-based
arrangement, such that the LGSEF allocation for individual LGU shall be
released directly to the LGU concerned;
Provided further that the individual LGSEF shares to LGUs are used in
accordance with the general purposes and guidelines promulgated by the
OCD for the implementation of the LGSEF at the local levels pursuant to Res.
No. OCD-99-006 dated October 7, 1999 and pursuant to the Leagues'
guidelines and mechanism as approved by the OCD;
Provided further that each of the Leagues shall submit to the OCD for its
approval their respective allocation scheme, the list of LGUs with the
corresponding LGSEF shares and the corresponding project categories if
project-based;
Provided further that upon approval by the OCD, the lists of LGUs shall be
endorsed to the DBM as the basis for the preparation of the corresponding
NCAs, SAROs, and related budget/release documents.
2. The remaining 1,500,000,000 of the CY 2000 LGSEF shall be earmarked
to support the following initiatives and local affirmative action projects, to be
endorsed to and approved by the Oversight Committee on Devolution in
accordance with the OCD agreements, guidelines, procedures and
documentary requirements:
On July 5, 2000, then President Estrada issued a Memorandum authorizing
then Executive Secretary Zamora and the DBM to implement and release the
2.5 billion pesos LGSEF for 2000 in accordance with Resolution No. OCD-
2000-023.
Thereafter, the Oversight Committee, now under the administration of
President Gloria Macapagal-Arroyo, promulgated Resolution No. OCD-2001-
29 entitled "ADOPTING RESOLUTION NO. OCD-2000-023 IN THE
ALLOCATION, IMPLEMENTATION AND RELEASE OF THE REMAINING
2.5 BILLION LGSEF FOR CY 2000." Under this resolution, the amount of
one billion pesos of the LGSEF was to be released in accordance with
paragraph 1 of Resolution No. OCD-2000-23, to complete the 3.5 billion pesos
allocated to the LGUs, while the amount of 1.5 billion pesos was allocated for
the LAAP. However, out of the latter amount, 400,000,000 was to be
allocated and released as follows: 50,000,000 as financial assistance to the
LAAPs of LGUs; 275,360,227 as financial assistance to cover the decrease
in the IRA of LGUs concerned due to reduction in land area; and 74,639,773
for the LGSEF Capability-Building Fund.
 On January 25, 2002, Pres. Macapagal-Arroyo approved Resolution No. OCD-
The LGSEF in the GAA of 2001 2002-001.

In view of the failure of Congress to enact the general appropriations law for
2001, the GAA of 2000 was deemed re-enacted, together with the IRA of the
LGUs therein and the proviso earmarking five billion pesos thereof for the
LGSEF.
On January 9, 2002, the Oversight Committee adopted Resolution No. OCD-
2002-001 allocating the five billion pesos LGSEF for 2001 as follows:
Modified Codal Formula 3.000 billion
Priority Projects 1.900 billion
Capability Building Fund.100 billion
The Petitioner's Case
The petitioner now comes to this Court assailing as unconstitutional and void
the provisos in the GAAs of 1999, 2000 and 2001, relating to the LGSEF.
Similarly assailed are the Oversight Committee's Resolutions Nos. OCD-99-
003, OCD-99-005, OCD-99-006, OCD-2000-023, OCD-2001-029 and OCD-
2002-001 issued pursuant thereto. The petitioner submits that the assailed
provisos in the GAAs and the OCD resolutions, insofar as they earmarked the
amount of five billion pesos of the IRA of the LGUs for 1999, 2000 and 2001
for the LGSEF and imposed conditions for the release thereof, violate the
Constitution and the Local Government Code of 1991.

5.000 billion Section 6, Article X of the Constitution is invoked as it mandates that the "just
RESOLVED FURTHER, that the 3.0 B of the CY 2001 LGSEF which is to be share" of the LGUs shall be automatically released to them. Sections 18 and
allocated according to the modified codal formula shall be released to the four 286 of the Local Government Code of 1991, which enjoin that the "just share"
levels of LGUs, i.e., provinces, cities, municipalities and barangays, as follows: of the LGUs shall be "automatically and directly" released to them "without
need of further action" are, likewise, cited.
LGUs Percentage Amount
Provinces 25 0.750 billion The petitioner posits that to subject the distribution and release of the five-
Cities 25 0.750 billion-peso portion of the IRA, classified as the LGSEF, to compliance by the
Municipalities 35 1.050 LGUs with the implementing rules and regulations, including the mechanisms
Barangays 15 0.450 and guidelines prescribed by the Oversight Committee, contravenes the
explicit directive of the Constitution that the LGUs' share in the national taxes
100 3.000 billion "shall be automatically released to them." The petitioner maintains that the use
RESOLVED FURTHER, that the 1.9 B earmarked for priority projects shall of the word "shall" must be given a compulsory meaning.
be distributed according to the following criteria:
To further buttress this argument, the petitioner contends that to vest the
1.0 For projects of the 4th, 5th and 6th class LGUs; or Oversight Committee with the authority to determine the distribution and
release of the LGSEF, which is a part of the IRA of the LGUs, is an anathema
2.0 Projects in consonance with the President's State of the Nation Address to the principle of local autonomy as embodied in the Constitution and the
(SONA)/summit commitments. Local Government Code of 1991. The petitioner cites as an example the
experience in 2001 when the release of the LGSEF was long delayed because
RESOLVED FURTHER, that the remaining 100 million LGSEF capability the Oversight Committee was not able to convene that year and no guidelines
building fund shall be distributed in accordance with the recommendation of were issued therefor. Further, the possible disapproval by the Oversight
the Leagues of Provinces, Cities, Municipalities and Barangays, and approved Committee of the project proposals of the LGUs would result in the diminution
by the OCD. of the latter's share in the IRA.

Upon receipt of a copy of the above resolution, Gov. Mandanas wrote to the
individual members of the Oversight Committee seeking the reconsideration
of Resolution No. OCD-2002-001. He also wrote to Pres. Macapagal-Arroyo
urging her to disapprove said resolution as it violates the Constitution and the
Local Government Code of 1991.
Another infringement alleged to be occasioned by the assailed OCD
resolutions is the improper amendment to Section 285 of the Local
Government Code of 1991 on the percentage sharing of the IRA among the
LGUs. Said provision allocates the IRA as follows: Provinces 23%; Cities
23%; Municipalities 34%; and Barangays 20%.8 This formula has been
improperly amended or modified, with respect to the five-billion-peso portion
of the IRA allotted for the LGSEF, by the assailed OCD resolutions as they
invariably provided for a different sharing scheme.
The modifications allegedly constitute an illegal amendment by the executive
branch of a substantive law. Moreover, the petitioner mentions that in the
Letter dated December 5, 2001 of respondent Executive Secretary Romulo
addressed to respondent Secretary Boncodin, the former endorsed to the latter
the release of funds to certain LGUs from the LGSEF in accordance with the
handwritten instructions of President Arroyo. Thus, the LGUs are at a loss as
to how a portion of the LGSEF is actually allocated. Further, there are still
portions of the LGSEF that, to date, have not been received by the petitioner;
hence, resulting in damage and injury to the petitioner.
The petitioner prays that the Court declare as unconstitutional and void the
assailed provisos relating to the LGSEF in the GAAs of 1999, 2000 and 2001
and the assailed OCD resolutions (Resolutions Nos. OCD-99-003, OCD-99-
005, OCD-99-006, OCD-2000-023, OCD-2001-029 and OCD-2002-001)
issued by the Oversight Committee pursuant thereto. The petitioner, likewise,
prays that the Court direct the respondents to rectify the unlawful and illegal
distribution and releases of the LGSEF for the aforementioned years and
release the same in accordance with the sharing formula under Section 285 of
the Local Government Code of 1991. Finally, the petitioner urges the Court to
declare that the entire IRA should be released automatically without further
action by the LGUs as required by the Constitution and the Local Government
Code of 1991.
The Respondents' Arguments
The respondents, through the Office of the Solicitor General, urge the Court to
dismiss the petition on procedural and substantive grounds. On the latter, the
respondents contend that the assailed provisos in the GAAs of 1999, 2000 and
2001 and the assailed resolutions issued by the Oversight Committee are not
constitutionally infirm. The respondents advance the view that Section 6,
Article X of the Constitution does not specify that the "just share" of the LGUs
shall be determined solely by the Local Government Code of 1991. Moreover,
the phrase "as determined by law" in the same constitutional provision means
that there exists no limitation on the power of Congress to determine what is
the "just share" of the LGUs in the national taxes. In other words, Congress is
the arbiter of what should be the "just share" of the LGUs in the national taxes.
The respondents further theorize that Section 285 of the Local Government
Code of 1991, which provides for the percentage sharing of the IRA among
the LGUs, was not intended to be a fixed determination of their "just share" in
the national taxes. Congress may enact other laws, including appropriations
laws such as the GAAs of 1999, 2000 and 2001, providing for a different
sharing formula. Section 285 of the Local Government Code of 1991 was
merely intended to be the "default share" of the LGUs to do away with the need
to determine annually by law their "just share." However, the LGUs have no
vested right in a permanent or fixed percentage as Congress may increase or
decrease the "just share" of the LGUs in accordance with what it believes is
appropriate for their operation. There is nothing in the Constitution which
prohibits Congress from making such determination through the
appropriations laws. If the provisions of a particular statute, the GAA in this
case, are within the constitutional power of the legislature to enact, they should
be sustained whether the courts agree or not in the wisdom of their enactment.
On procedural grounds, the respondents urge the Court to dismiss the petition
outright as the same is defective. The petition allegedly raises factual issues
which should be properly threshed out in the lower courts, not this Court, not
being a trier of facts. Specifically, the petitioner's allegation that there are
portions of the LGSEF that it has not, to date, received, thereby causing it (the
petitioner) injury and damage, is subject to proof and must be substantiated in
the proper venue, i.e., the lower courts.
Further, according to the respondents, the petition has already been rendered
moot and academic as it no longer presents a justiciable controversy. The
IRAs for the years 1999, 2000 and 2001, have already been released and the
government is now operating under the 2003 budget. In support of this, the
respondents submitted certifications issued by officers of the DBM attesting to
the release of the allocation or shares of the petitioner in the LGSEF for 1999,
2000 and 2001. There is, therefore, nothing more to prohibit.
Finally, the petitioner allegedly has no legal standing to bring the suit because
it has not suffered any injury. In fact, the petitioner's "just share" has even
increased. Pursuant to Section 285 of the Local Government Code of 1991,
the share of the provinces is 23%. OCD Nos. 99-005, 99-006 and 99-003 gave
the provinces 40% of 2 billion of the LGSEF. OCD Nos. 2000-023 and 2001-
029 apportioned 26% of 3.5 billion to the provinces. On the other hand, OCD
No. 2001-001 allocated 25% of 3 billion to the provinces. Thus, the petitioner
has not suffered any injury in the implementation of the assailed provisos in
the GAAs of 1999, 2000 and 2001 and the OCD resolutions.
The Ruling of the Court Procedural Issues
Before resolving the petition on its merits, the Court shall first rule on the
following procedural issues raised by the respondents: (1) whether the
petitioner has legal standing or locus standi to file the present suit; (2) whether
the petition involves factual questions that are properly cognizable by the lower
courts; and (3) whether the issue had been rendered moot and academic.
The petitioner has locus standi to maintain the present suit
The gist of the question of standing is whether a party has "alleged such a
personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional questions."9
Accordingly, it has been held that the interest of a party assailing the
constitutionality of a statute must be direct and personal. Such party must be
able to show, not only that the law or any government act is invalid, but also
that he has sustained or is in imminent danger of sustaining some direct injury
as a result of its enforcement, and not merely that he suffers thereby in some
indefinite way. It must appear that the person complaining has been or is about
to be denied some right or privilege to which he is lawfully entitled or that he is
about to be subjected to some burdens or penalties by reason of the statute or
act complained of.10
The Court holds that the petitioner possesses the requisite standing to
maintain the present suit. The petitioner, a local government unit, seeks relief
in order to protect or vindicate an interest of its own, and of the other LGUs.
This interest pertains to the LGUs' share in the national taxes or the IRA. The
petitioner's constitutional claim is, in substance, that the assailed provisos in
the GAAs of 1999, 2000 and 2001, and the OCD resolutions contravene
Section 6, Article X of the Constitution, mandating the "automatic release" to
the LGUs of their share in the national taxes. Further, the injury that the
petitioner claims to suffer is the diminution of its share in the IRA, as provided
under Section 285 of the Local Government Code of 1991, occasioned by the
implementation of the assailed measures. These allegations are sufficient to
grant the petitioner standing to question the validity of the assailed provisos in
the GAAs of 1999, 2000 and 2001, and the OCD resolutions as the petitioner
clearly has "a plain, direct and adequate interest" in the manner and
distribution of the IRA among the LGUs.
The petition involves a significant legal issue
The crux of the instant controversy is whether the assailed provisos contained
in the GAAs of 1999, 2000 and 2001, and the OCD resolutions infringe the
Constitution and the Local Government Code of 1991. This is undoubtedly a
legal question. On the other hand, the following facts are not disputed:
1. The earmarking of five billion pesos of the IRA for the LGSEF in the assailed
provisos in the GAAs of 1999, 2000 and re-enacted budget for 2001;
2. The promulgation of the assailed OCD resolutions providing for the
allocation schemes covering the said five billion pesos and the implementing
rules and regulations therefor; and
3. The release of the LGSEF to the LGUs only upon their compliance with the
implementing rules and regulations, including the guidelines and mechanisms,
prescribed by the Oversight Committee.
Considering that these facts, which are necessary to resolve the legal question
now before this Court, are no longer in issue, the same need not be determined
by a trial court.11 In any case, the rule on hierarchy of courts will not prevent
this Court from assuming jurisdiction over the petition. The said rule may be
relaxed when the redress desired cannot be obtained in the appropriate courts
or where exceptional and compelling circumstances justify availment of a
remedy within and calling for the exercise of this Court's primary jurisdiction.12
The crucial legal issue submitted for resolution of this Court entails the proper
legal interpretation of constitutional and statutory provisions. Moreover, the
"transcendental importance" of the case, as it necessarily involves the
application of the constitutional principle on local autonomy, cannot be
gainsaid. The nature of the present controversy, therefore, warrants the
relaxation by this Court of procedural rules in order to resolve the case
forthwith.
The substantive issue needs to be resolved notwithstanding the supervening
events
Granting arguendo that, as contended by the respondents, the resolution of
the case had already been overtaken by supervening events as the IRA,
including the LGSEF, for 1999, 2000 and 2001, had already been released
and the government is now operating under a new appropriations law, still,
there is compelling reason for this Court to resolve the substantive issue raised
by the instant petition. Supervening events, whether intended or accidental,
cannot prevent the Court from rendering a decision if there is a grave violation
of the Constitution.13 Even in cases where supervening events had made the
cases moot, the Court did not hesitate to resolve the legal or constitutional
issues raised to formulate controlling principles to guide the bench, bar and
public.14
Another reason justifying the resolution by this Court of the substantive issue
now before it is the rule that courts will decide a question otherwise moot and
academic if it is "capable of repetition, yet evading review."15 For the GAAs in
the coming years may contain provisos similar to those now being sought to
be invalidated, and yet, the question may not be decided before another GAA
is enacted. It, thus, behooves this Court to make a categorical ruling on the
substantive issue now.
Substantive Issue
As earlier intimated, the resolution of the substantive legal issue in this case
calls for the application of a most important constitutional policy and principle,
that of local autonomy.16 In Article II of the Constitution, the State has
expressly adopted as a policy that:
Section 25. The State shall ensure the autonomy of local governments.
An entire article (Article X) of the Constitution has been devoted to
guaranteeing and promoting the autonomy of LGUs. Section 2 thereof
reiterates the State policy in this wise:
Section 2. The territorial and political subdivisions shall enjoy local autonomy.
Consistent with the principle of local autonomy, the Constitution confines the
President's power over the LGUs to one of general supervision.17 This
provision has been interpreted to exclude the power of control. The distinction
between the two powers was enunciated in Drilon v. Lim:18
An officer in control lays down the rules in the doing of an act. If they are not
followed, he may, in his discretion, order the act undone or re-done by his
subordinate or he may even decide to do it himself. Supervision does not cover
such authority. The supervisor or superintendent merely sees to it that the
rules are followed, but he himself does not lay down such rules, nor does he
have the discretion to modify or replace them. If the rules are not observed, he
may order the work done or re-done but only to conform to the prescribed
rules. He may not prescribe his own manner for doing the act. He has no
judgment on this matter except to see to it that the rules are followed.19
The Local Government Code of 199120 was enacted to flesh out the mandate
of the Constitution.21 The State policy on local autonomy is amplified in
Section 2 thereof:
Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State
that the territorial and political subdivisions of the State shall enjoy genuine
and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective
partners in the attainment of national goals. Toward this end, the State shall
provide for a more responsive and accountable local government structure
instituted through a system of decentralization whereby local government units
shall be given more powers, authority, responsibilities, and resources. The
process of decentralization shall proceed from the National Government to the
local government units.
Guided by these precepts, the Court shall now determine whether the assailed
provisos in the GAAs of 1999, 2000 and 2001, earmarking for each
corresponding year the amount of five billion pesos of the IRA for the LGSEF
and the OCD resolutions promulgated pursuant thereto, transgress the
Constitution and the Local Government Code of 1991.
The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD
resolutions violate the constitutional precept on local autonomy
Section 6, Article X of the Constitution reads:
Sec. 6. Local government units shall have a just share, as determined by law,
in the national taxes which shall be automatically released to them.
When parsed, it would be readily seen that this provision mandates that (1) the
LGUs shall have a "just share" in the national taxes; (2) the "just share" shall
be determined by law; and (3) the "just share" shall be automatically released
to the LGUs.
The Local Government Code of 1991, among its salient provisions,
underscores the automatic release of the LGUs' "just share" in this wise:
Sec. 18. Power to Generate and Apply Resources. Local government units
shall have the power and authority to establish an organization that shall be
responsible for the efficient and effective implementation of their development
plans, program objectives and priorities; to create their own sources of revenue
and to levy taxes, fees, and charges which shall accrue exclusively for their
use and disposition and which shall be retained by them; to have a just share
in national taxes which shall be automatically and directly released to them
without need of further action;
...
Sec. 286. Automatic Release of Shares. (a) The share of each local
government unit shall be released, without need of any further action, directly
to the provincial, city, municipal or barangay treasurer, as the case may be, on
a quarterly basis within five (5) days after the end of each quarter, and which
shall not be subject to any lien or holdback that may be imposed by the national
government for whatever purpose.
(b) Nothing in this Chapter shall be understood to diminish the share of local
government units under existing laws.
Webster's Third New International Dictionary defines "automatic" as
"involuntary either wholly or to a major extent so that any activity of the will is
largely negligible; of a reflex nature; without volition; mechanical; like or
suggestive of an automaton." Further, the word "automatically" is defined as
"in an automatic manner: without thought or conscious intention." Being
"automatic," thus, connotes something mechanical, spontaneous and
perfunctory. As such, the LGUs are not required to perform any act to receive
the "just share" accruing to them from the national coffers. As emphasized by
the Local Government Code of 1991, the "just share" of the LGUs shall be
released to them "without need of further action." Construing Section 286 of
the LGC, we held in Pimentel, Jr. v. Aguirre,22 viz:
Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal
autonomy is the automatic release of the shares of LGUs in the National
internal revenue. This is mandated by no less than the Constitution. The Local
Government Code specifies further that the release shall be made directly to
the LGU concerned within five (5) days after every quarter of the year and
"shall not be subject to any lien or holdback that may be imposed by the
national government for whatever purpose." As a rule, the term "SHALL" is a
word of command that must be given a compulsory meaning. The provision is,
therefore, IMPERATIVE.
Section 4 of AO 372, however, orders the withholding, effective January 1,
1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation
by the Development Budget Coordinating Committee of the emerging fiscal
situation" in the country. Such withholding clearly contravenes the Constitution
and the law. Although temporary, it is equivalent to a holdback, which means
"something held back or withheld, often temporarily." Hence, the "temporary"
nature of the retention by the national government does not matter. Any
retention is prohibited.
In sum, while Section 1 of AO 372 may be upheld as an advisory effected in
times of national crisis, Section 4 thereof has no color of validity at all. The
latter provision effectively encroaches on the fiscal autonomy of local
governments. Concededly, the President was well-intentioned in issuing his
Order to withhold the LGUs' IRA, but the rule of law requires that even the best
intentions must be carried out within the parameters of the Constitution and
the law. Verily, laudable purposes must be carried out by legal methods.23
The "just share" of the LGUs is incorporated as the IRA in the appropriations
law or GAA enacted by Congress annually. Under the assailed provisos in the
GAAs of 1999, 2000 and 2001, a portion of the IRA in the amount of five billion
pesos was earmarked for the LGSEF, and these provisos imposed the
condition that "such amount shall be released to the local government units
subject to the implementing rules and regulations, including such mechanisms
and guidelines for the equitable allocations and distribution of said fund among
local government units subject to the guidelines that may be prescribed by the
Oversight Committee on Devolution." Pursuant thereto, the Oversight
Committee, through the assailed OCD resolutions, apportioned the five billion
pesos LGSEF such that:
For 1999
2 billion - allocated according to Sec. 285 LGC
2 billion - Modified Sharing Formula (Provinces 40%;
Cities 20%; Municipalities 40%)
1 billion projects (LAAP) approved by OCD.24
For 2000
3.5 billion Modified Sharing Formula (Provinces 26%;
Cities 23%; Municipalities 35%; Barangays 16%);
1.5 billion projects (LAAP) approved by the OCD.25
For 2001
3 billion Modified Sharing Formula (Provinces 25%;
Cities 25%; Municipalities 35%; Barangays 15%)
1.9 billion priority projects
100 million capability building fund.26
Significantly, the LGSEF could not be released to the LGUs without the
Oversight Committee's prior approval. Further, with respect to the portion of
the LGSEF allocated for various projects of the LGUs (1 billion for 1999; 1.5
billion for 2000 and 2 billion for 2001), the Oversight Committee, through the
assailed OCD resolutions, laid down guidelines and mechanisms that the
LGUs had to comply with before they could avail of funds from this portion of
the LGSEF. The guidelines required (a) the LGUs to identify the projects
eligible for funding based on the criteria laid down by the Oversight Committee;
(b) the LGUs to submit their project proposals to the DILG for appraisal; (c) the
project proposals that passed the appraisal of the DILG to be submitted to the
Oversight Committee for review, evaluation and approval. It was only upon
approval thereof that the Oversight Committee would direct the DBM to release
the funds for the projects.
To the Court's mind, the entire process involving the distribution and release
of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA
or "just share" of the LGUs in the national taxes. To subject its distribution and
release to the vagaries of the implementing rules and regulations, including
the guidelines and mechanisms unilaterally prescribed by the Oversight
Committee from time to time, as sanctioned by the assailed provisos in the
GAAs of 1999, 2000 and 2001 and the OCD resolutions, makes the release
not automatic, a flagrant violation of the constitutional and statutory mandate
that the "just share" of the LGUs "shall be automatically released to them." The
LGUs are, thus, placed at the mercy of the Oversight Committee.
Where the law, the Constitution in this case, is clear and unambiguous, it must
be taken to mean exactly what it says, and courts have no choice but to see
to it that the mandate is obeyed.27 Moreover, as correctly posited by the
petitioner, the use of the word "shall" connotes a mandatory order. Its use in a
statute denotes an imperative obligation and is inconsistent with the idea of
discretion.28
Indeed, the Oversight Committee exercising discretion, even control, over the
distribution and release of a portion of the IRA, the LGSEF, is an anathema to
and subversive of the principle of local autonomy as embodied in the
Constitution. Moreover, it finds no statutory basis at all as the Oversight
Committee was created merely to formulate the rules and regulations for the
efficient and effective implementation of the Local Government Code of 1991
to ensure "compliance with the principles of local autonomy as defined under
the Constitution."29 In fact, its creation was placed under the title of "Transitory
Provisions," signifying its ad hoc character. According to Senator Aquilino Q.
Pimentel, the principal author and sponsor of the bill that eventually became
Rep. Act No. 7160, the Committee's work was supposed to be done a year
from the approval of the Code, or on October 10, 1992.30 The Oversight
Committee's authority is undoubtedly limited to the implementation of the Local
Government Code of 1991, not to supplant or subvert the same. Neither can it
exercise control over the IRA, or even a portion thereof, of the LGUs.
That the automatic release of the IRA was precisely intended to guarantee and
promote local autonomy can be gleaned from the discussion below between
Messrs. Jose N. Nolledo and Regalado M. Maambong, then members of the
1986 Constitutional Commission, to wit:
MR. MAAMBONG. Unfortunately, under Section 198 of the Local Government
Code, the existence of subprovinces is still acknowledged by the law, but the
statement of the Gentleman on this point will have to be taken up probably by
the Committee on Legislation. A second point, Mr. Presiding Officer, is that
under Article 2, Section 10 of the 1973 Constitution, we have a provision which
states:
The State shall guarantee and promote the autonomy of local government
units, especially the barrio, to insure their fullest development as self-reliant
communities.
This provision no longer appears in the present configuration; does this mean
that the concept of giving local autonomy to local governments is no longer
adopted as far as this Article is concerned?
MR. NOLLEDO. No. In the report of the Committee on Preamble, National
Territory, and Declaration of Principles, that concept is included and widened
upon the initiative of Commissioner Bennagen.
MR. MAAMBONG. Thank you for that.
With regard to Section 6, sources of revenue, the creation of sources as
provided by previous law was "subject to limitations as may be provided by
law," but now, we are using the term "subject to such guidelines as may be
fixed by law." In Section 7, mention is made about the "unique, distinct and
exclusive charges and contributions," and in Section 8, we talk about
"exclusivity of local taxes and the share in the national wealth." Incidentally, I
was one of the authors of this provision, and I am very thankful. Does this
indicate local autonomy, or was the wording of the law changed to give more
autonomy to the local government units?31
MR. NOLLEDO. Yes. In effect, those words indicate also "decentralization"
because local political units can collect taxes, fees and charges subject merely
to guidelines, as recommended by the league of governors and city mayors,
with whom I had a dialogue for almost two hours. They told me that limitations
may be questionable in the sense that Congress may limit and in effect deny
the right later on.
MR. MAAMBONG. Also, this provision on "automatic release of national tax
share" points to more local autonomy. Is this the intention?
MR. NOLLEDO. Yes, the Commissioner is perfectly right.32
The concept of local autonomy was explained in Ganzon v. Court of Appeals33
in this wise:
As the Constitution itself declares, local autonomy 'means a more responsive
and accountable local government structure instituted through a system of
decentralization.' The Constitution, as we observed, does nothing more than
to break up the monopoly of the national government over the affairs of local
governments and as put by political adherents, to "liberate the local
governments from the imperialism of Manila." Autonomy, however, is not
meant to end the relation of partnership and interdependence between the
central administration and local government units, or otherwise, to usher in a
regime of federalism. The Charter has not taken such a radical step. Local
governments, under the Constitution, are subject to regulation, however
limited, and for no other purpose than precisely, albeit paradoxically, to
enhance self-government.
As we observed in one case, decentralization means devolution of national
administration but not power to the local levels. Thus:
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' 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.34
Local autonomy includes both administrative and fiscal autonomy. The fairly
recent case of Pimentel v. Aguirre35 is particularly instructive. The Court
declared therein that local fiscal autonomy includes the power of the LGUs to,
inter alia, allocate their resources in accordance with their own priorities:
Under existing law, local government units, in addition to having administrative
autonomy in the exercise of their functions, enjoy fiscal autonomy as well.
Fiscal autonomy means that local governments have the power to create their
own sources of revenue in addition to their equitable share in the national taxes
released by the national government, as well as the power to allocate their
resources in accordance with their own priorities. It extends to the preparation
of their budgets, and local officials in turn have to work within the constraints
thereof. They are not formulated at the national level and imposed on local
governments, whether they are relevant to local needs and resources or not
...36
Further, a basic feature of local fiscal autonomy is the constitutionally
mandated automatic release of the shares of LGUs in the national internal
revenue.37
Following this ratiocination, the Court in Pimentel struck down as
unconstitutional Section 4 of Administrative Order (A.O.) No. 372 which
ordered the withholding, effective January 1, 1998, of ten percent of the LGUs'
IRA "pending the assessment and evaluation by the Development Budget
Coordinating Committee of the emerging fiscal situation."
In like manner, the assailed provisos in the GAAs of 1999, 2000 and 2001, and
the OCD resolutions constitute a "withholding" of a portion of the IRA. They
put on hold the distribution and release of the five billion pesos LGSEF and
subject the same to the implementing rules and regulations, including the
guidelines and mechanisms prescribed by the Oversight Committee from time
to time. Like Section 4 of A.O. 372, the assailed provisos in the GAAs of 1999,
2000 and 2001 and the OCD resolutions effectively encroach on the fiscal
autonomy enjoyed by the LGUs and must be struck down. They cannot,
therefore, be upheld.
The assailed provisos in the GAAs of 1999, 2000
and 2001 and the OCD resolutions cannot amend
Section 285 of the Local Government Code of 1991
Section 28438 of the Local Government Code provides that, beginning the
third year of its effectivity, the LGUs' share in the national internal revenue
taxes shall be 40%. This percentage is fixed and may not be reduced except
"in the event the national government incurs an unmanageable public sector
deficit" and only upon compliance with stringent requirements set forth in the
same section:
Sec. 284. ...
Provided, That in the event that the national government incurs an
unmanageable public sector deficit, the President of the Philippines is hereby
authorized, upon recommendation of Secretary of Finance, Secretary of
Interior and Local Government and Secretary of Budget and Management, and
subject to consultation with the presiding officers of both Houses of Congress
and the presidents of the liga, to make the necessary adjustments in the
internal revenue allotment of local government units but in no case shall the
allotment be less than thirty percent (30%) of the collection of the national
internal revenue taxes of the third fiscal year preceding the current fiscal year;
Provided, further That in the first year of the effectivity of this Code, the local
government units shall, in addition to the thirty percent (30%) internal revenue
allotment which shall include the cost of devolved functions for essential public
services, be entitled to receive the amount equivalent to the cost of devolved
personnel services.

Thus, from the above provision, the only possible exception to the mandatory
automatic release of the LGUs' IRA is if the national internal revenue
collections for the current fiscal year is less than 40 percent of the collections
of the preceding third fiscal year, in which case what should be automatically
released shall be a proportionate amount of the collections for the current fiscal
year. The adjustment may even be made on a quarterly basis depending on
the actual collections of national internal revenue taxes for the quarter of the
current fiscal year. In the instant case, however, there is no allegation that the
national internal revenue tax collections for the fiscal years 1999, 2000 and
2001 have fallen compared to the preceding three fiscal years.
Section 285 then specifies how the IRA shall be allocated among the LGUs:
Sec. 285. Allocation to Local Government Units. The share of local
government units in the internal revenue allotment shall be allocated in the
following manner:
(a) Provinces Twenty-three (23%)
(b) Cities Twenty-three percent (23%);
(c) Municipalities Thirty-four (34%); and
(d) Barangays Twenty percent (20%).
However, this percentage sharing is not followed with respect to the five billion
pesos LGSEF as the assailed OCD resolutions, implementing the assailed
provisos in the GAAs of 1999, 2000 and 2001, provided for a different sharing
scheme. For example, for 1999, 2 billion of the LGSEF was allocated as
follows: Provinces 40%; Cities 20%; Municipalities 40%.39 For 2000,
3.5 billion of the LGSEF was allocated in this manner: Provinces 26%;
Cities 23%; Municipalities 35%; Barangays 26%.40 For 2001, 3 billion concededly expounded in greater detail in the present Constitution, dates back
of the LGSEF was allocated, thus: Provinces 25%; Cities 25%;
Municipalities 35%; Barangays 15%.41
The respondents argue that this modification is allowed since the Constitution
does not specify that the "just share" of the LGUs shall only be determined by
the Local Government Code of 1991. That it is within the power of Congress
to enact other laws, including the GAAs, to increase or decrease the "just
share" of the LGUs. This contention is untenable. The Local Government Code
of 1991 is a substantive law. And while it is conceded that Congress may
amend any of the provisions therein, it may not do so through appropriations
laws or GAAs. Any amendment to the Local Government Code of 1991 should
be done in a separate law, not in the appropriations law, because Congress
cannot include in a general appropriation bill matters that should be more
properly enacted in a separate legislation.42
A general appropriations bill is a special type of legislation, whose content is
limited to specified sums of money dedicated to a specific purpose or a
separate fiscal unit.43 Any provision therein which is intended to amend
another law is considered an "inappropriate provision." The category of
"inappropriate provisions" includes unconstitutional provisions and provisions
which are intended to amend other laws, because clearly these kinds of laws
have no place in an appropriations bill.44
Increasing or decreasing the IRA of the LGUs or modifying their percentage
sharing therein, which are fixed in the Local Government Code of 1991, are
matters of general and substantive law. To permit Congress to undertake
these amendments through the GAAs, as the respondents contend, would be
to give Congress the unbridled authority to unduly infringe the fiscal autonomy
of the LGUs, and thus put the same in jeopardy every year. This, the Court
cannot sanction.
It is relevant to point out at this juncture that, unlike those of 1999, 2000 and
2001, the GAAs of 2002 and 2003 do not contain provisos similar to the herein
assailed provisos. In other words, the GAAs of 2002 and 2003 have not
earmarked any amount of the IRA for the LGSEF. Congress had perhaps seen
fit to discontinue the practice as it recognizes its infirmity. Nonetheless, as
earlier mentioned, this Court has deemed it necessary to make a definitive
ruling on the matter in order to prevent its recurrence in future appropriations
laws and that the principles enunciated herein would serve to guide the bench,
bar and public.
Conclusion
In closing, it is well to note that the principle of local autonomy, while
to the turn of the century when President William McKinley, in his Instructions
to the Second Philippine Commission dated April 7, 1900, ordered the new
Government "to devote their attention in the first instance to the establishment
of municipal governments in which the natives of the Islands, both in the cities
and in the rural communities, shall be afforded the opportunity to manage their
own affairs to the fullest extent of which they are capable, and subject to the
least degree of supervision and control in which a careful study of their
capacities and observation of the workings of native control show to be
consistent with the maintenance of law, order and loyalty."45 While the 1935
Constitution had no specific article on local autonomy, nonetheless, it limited
the executive power over local governments to "general supervision ... as may
be provided by law."46 Subsequently, the 1973 Constitution explicitly stated
that "[t]he State shall guarantee and promote the autonomy of local
government units, especially the barangay to ensure their fullest development
as self-reliant communities."47 An entire article on Local Government was
incorporated therein. The present Constitution, as earlier opined, has
broadened the principle of local autonomy. The 14 sections in Article X thereof
markedly increased the powers of the local governments in order to
accomplish the goal of a more meaningful local autonomy.
Indeed, the value of local governments as institutions of democracy is
measured by the degree of autonomy that they enjoy.48 As eloquently put by
M. De Tocqueville, a distinguished French political writer, "[l]ocal assemblies
of citizens constitute the strength of free nations. Township meetings are to
liberty what primary schools are to science; they bring it within the people's
reach; they teach men how to use and enjoy it. A nation may establish a
system of free governments but without the spirit of municipal institutions, it
cannot have the spirit of liberty."49
Our national officials should not only comply with the constitutional provisions
on local autonomy but should also appreciate the spirit and liberty upon which
these provisions are based.50
WHEREFORE, the petition is GRANTED. The assailed provisos in the General
Appropriations Acts of 1999, 2000 and 2001, and the assailed OCD
Resolutions, are declared UNCONSTITUTIONAL.
SO ORDERED.
9. ACORD v. Zamora
G.R. No. 144256 June 8, 2005
ALTERNATIVE CENTER FOR ORGANIZATIONAL REFORMS AND
DEVELOPMENT, INC. (ACORD), BALAY MINDANAW FOUNDATION, INC.
(BMFI); BARRIOS, INC.; CAMARINES SUR NGO-PO DEVELOPMENT
NETWORK, INC. (CADENET); CENTER FOR PARTICIPATORY
GOVERNANCE (CPAG); ENVIRONMENTAL LEGAL ASSISTANCE
CENTER, INC. (ELAC); FELLOWSHIP FOR ORGANIZING ENDEAVORS
(FORGE); FOUNDATION FOR LOCAL AUTONOMY AND GOOD
GOVERNNANCE, INC. (FLAGG); INSTITUTE OF POLITICS AND
GOVERNANCE (IPG); KAISAHAN PARA SA KAUNLARAN NG KANAYUNAN
AT REPORMANG PANSAKAHAN (KAISAHAN); MANGGAGAGAWANG
KABABAIHANG MITHI AY PAGLAYA (MAKALAYA); NAGA CITY PEOPLE'S
COUNCIL (NCPC); NGO-PO COUNCIL OF CAMARINES SUR FOR
COMMUNITY PARTICIPATION AND EMPOWERMENT, INC. (NPCCS);
PAILIG DEVELOPMENT FOUNDATION INC. (PDFI); PHILIPPINE
ECUMENICAL ACTION FOR COMMUNITY EMPOWERMENT
FOUNDATION, INC. (PEACE FOUNDATION, INC.); PHILIPPINE
PARTNERSHIP FOR THE DEVELOPMENT OF HUMAN RESOURCES IN
RURAL AREAS (PHILDHRRA); PILIPINA, INC. (ANG KILUSAN NG
KABABAIHANG PILIPINO); SENTRO NG ALTERNATIBONG LINGAP
PANLIGAL (SALIGAN); URBAN LAND REFORM TASK FORCE (ULR-TF);
ADELINO C. LAVADOR; PUNONG BARANGAY ISABEL MENDEZ;
PUNONG BARANGAY CAROLINA ROMANOS, petitioners,
vs.
HON. RONALDO ZAMORA, in his capacity as Executive Secretary, HON.
BENJAMIN DIOKNO, in his capacity as Secretary, Department of Budget and
Management, HON. LEONOR MAGTOLIS-BRIONES, in her capacity as
National Treasurer, and the COMMISSION ON AUDIT, respondents.
DECISION
CARPIO MORALES, J.:
Pursuant to Section 22, Article VII of the Constitution1 mandating the President
to submit to Congress a budget of expenditures within thirty days before the
opening of every regular session, then President Joseph Ejercito Estrada
submitted the National Expenditures Program for Fiscal Year 2000. In the said
Program, the President proposed an Internal Revenue Allotment (IRA) in the
amount of 121,778,000,000 following the formula provided for in Section 284
of the Local Government Code of 1992, viz:
SECTION 284. Allotment of Internal Revenue Taxes. - Local government units
shall have a share in the national internal revenue taxes based on the
collection of the third fiscal year preceding the current fiscal year as follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%);
(b) On the second year, thirty-five percent (35%); and
(c) On the third year and thereafter, forty percent (40%).
x x x (Emphasis supplied)
On February 16, 2000, the President approved House Bill No. 8374 - a bill
sponsored in the Senate by then Senator John H. Osmea who was the
Chairman of the Committee on Finance. This bill became Republic Act No.
8760, "AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE
GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM
JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND, AND
FOR OTHER PURPOSES".
The act, otherwise known as the General Appropriations Act (GAA) for the A. PURPOSE(S)
Year 2000, provides under the heading "ALLOCATIONS TO LOCAL
GOVERNMENT UNITS" that the IRA for local government units shall amount xxxx
to 111,778,000,000:1avvphi1.zw+
6. Additional
XXXVII. ALLOCATIONS TO LOCAL Operational
Requirements
GOVERNMENT UNITS and Projects of
A. INTERNAL REVENUE ALLOTMENT Agencies 14,788,764,000
xxxx
For apportionment of the shares of local government units in the internal
revenue taxes in accordance with the purpose indicated hereunder Special Provisions
... 111,778,000,000
1. Release of the Fund. The amounts herein appropriated shall be released
New Appropriations, by Purpose only when the revenue collections exceed the original revenue targets
submitted by the President of the Philippines to Congress pursuant to Section
Current Operating Expenditures 22, Article VII of the Constitution or when the corresponding funding or receipts
for the purpose have been realized except in the special cases covered by
specific procedures in Special Provision Nos. 2, 3, 4, 5, 7, 8, 9, 13 and 14
Maintenance herein: PROVIDED, That in cases of foreign-assisted projects, the existence
and Other Personal of a perfected loan agreement shall be sufficient compliance for the issuance
Services Operating of a Special Allotment Release Order covering the loan proceeds: PROVIDED,
Expenses Capital FURTHER, That no amount of the Unprogrammed Fund shall be funded out
Outlays Total of the savings generated from programmed items in this Act.

A. PURPOSE(S) xxxx
a. Internal Revenue
Allotment 111,778,000,000 111,778,000,000 4. Additional Operational Requirements and Projects of Agencies. The
xxx appropriations for Purpose 6 - Additional Operational Requirements and
TOTAL NEW Projects of Agencies herein indicated shall be released only when the original
APPROPRIATIONS 111,778,000,000 revenue targets submitted by the President of the Philippines to Congress
In another part of the GAA, under the heading "UNPROGRAMMED FUND," it pursuant to Section 22, Article VII of the Constitution can be realized based on
is provided that an amount of 10,000,000,000 (10 Billion), apart from the a quarterly assessment of the Development Budget Coordinating Committee,
111,778,000,000 mentioned above, shall be used to fund the IRA, which the Committee on Finance of the Senate and the Committee on Appropriations
amount shall be released only when the original revenue targets submitted by of the House of Representatives and shall be used to fund the following:
the President to Congress can be realized based on a quarterly assessment
to be conducted by certain committees which the GAA specifies, namely, the xxxx
Development Budget Coordinating Committee, the Committee on Finance of
the Senate, and the Committee on Appropriations of the House of Internal Revenue Allotments
Representatives.
Maintenance and
LIV. UNPROGRAMMED FUND Other Operating
Expenses 10,000,000,000
For fund requirements in accordance with the purposes indicated hereunder total IRA --------------------
48,681,831,000 10,000,000,000
xxxx

Total 14,788,764,000
x x x x (Emphasis supplied)
Thus, while the GAA appropriates 111,778,000,000 of IRA as Programmed
Fund, it appropriates a separate amount of 10 Billion of IRA under the
classification of Unprogrammed Fund, the latter amount to be released only
upon the occurrence of the condition stated in the GAA.
On August 22, 2000, a number of non-governmental organizations (NGOs)
and people's organizations, along with three barangay officials filed with this
Court the petition at bar, for Certiorari, Prohibition and Mandamus With
Application for Temporary Restraining Order, against respondents then
Executive Secretary Ronaldo Zamora, then Secretary of the Department of
Budget and Management Benjamin Diokno, then National Treasurer Leonor
Magtolis-Briones, and the Commission on Audit, challenging the
constitutionality of above-quoted provision of XXXVII (ALLOCATIONS TO
LOCAL GOVERNMENT UNITS) referred to by petitioners as Section 1,
XXXVII (A), and LIV (UNPROGRAMMED FUND) Special Provisions 1 and 4
of the GAA (the GAA provisions).
Petitioners contend that:
1. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF
THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THEY VIOLATE THE AUTONOMY OF LOCAL
GOVERNMENTS BY UNLAWFULLY REDUCING BY TEN BILLION PESOS
(10 BILLION) THE INTERNAL REVENUE ALLOTMENTS DUE TO THE
LOCAL GOVERNMENTS AND WITHHOLDING THE RELEASE OF SUCH
AMOUNT BY PLACING THE SAME UNDER "UNPROGRAMMED FUNDS."
THIS VIOLATES THE CONSTITUTIONAL MANDATE IN ART. X, SEC. 6,
THAT THE LOCAL GOVERNMENT UNITS' JUST SHARE IN THE NATIONAL
TAXES SHALL BE AUTOMATICALLY RELEASED TO THEM. IT ALSO
VIOLATES THE LOCAL GOVERNMENT CODE, SPECIFICALLY, SECS. 18,
284, AND 286.
2. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF
THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THEY VIOLATE THE AUTONOMY OF LOCAL
GOVERNMENTS BY PLACING TEN BILLION PESOS (10 BILLION) OF
THE INTERNAL REVENUE ALLOTMENTS DUE TO THE LOCAL
GOVERNMENTS, EFFECTIVELY AND PRACTICALLY, WITHIN THE
CONTROL OF THE CENTRAL AUTHORITIES.
3. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF
THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THE PLACING OF 10 BILLION PESOS OF THE
IRA UNDER "UNPROGRAMMED FUNDS" CONSTITUTES AN UNDUE
DELEGATION OF LEGISLATIVE POWER TO THE RESPONDENTS.
4. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF
THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THE PLACING OF 10 BILLION PESOS OF THE
IRA UNDER "UNPROGRAMMED FUNDS" CONSTITUTES AN
AMENDMENT OF THE LOCAL GOVERNMENT CODE OF 1991, WHICH
CANNOT BE DONE IN A GENERAL APPROPRIATIONS ACT AND WHICH
PURPOSE WAS NOT REFLECTED IN THE TITLE OF THE YEAR 2000 GAA.
5. THE YEAR 2000 GAA'S REDUCTION OF THE IRA UNDERMINES THE
FOUNDATION OF OUR LOCAL GOVERNANCE SYSTEM WHICH IS
ESSENTIAL TO THE EFFICIENT OPERATION OF THE GOVERNMENT
AND THE DEVELOPMENT OF THE NATION.
6. THE CONGRESS AND THE EXECUTIVE, IN PASSING AND
APPROVING, RESPECTIVELY, THE YEAR 2000 GAA, AND THE
RESPONDENTS, IN IMPLEMENTING THE SAID YEAR 2000 GAA,
INSOFAR AS SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1
AND 4, ARE CONCERNED, ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION AS THEY
TRANSGRESSED THE CONSTITUTION AND THE LOCAL GOVERNMENT
CODE'S PROHIBITION ON ANY INVALID REDUCTION AND
WITHHOLDING OF THE LOCAL GOVERNMENTS' IRA. (Underscoring
supplied)
After the parties had filed their respective memoranda, a "MOTION FOR
INTERVENTION/MOTION TO ADMIT ATTACHED PETITION FOR
INTERVENTION" was filed on October 22, 2001 by the Province of Batangas,
represented by then Governor Hermilando I. Mandanas.
On November 6, 2001, the Province of Nueva Ecija, represented by Governor
Tomas N. Joson III, likewise filed a "MOTION FOR LEAVE OF COURT TO
INTERVENE AND FILE PETITION-IN-INTERVENTION".
The motions for intervention, both of which adopted the arguments of the main
petition,2 were granted by this Court.3
Although the effectivity of the Year 2000 GAA has ceased, this Court shall
nonetheless proceed to resolve the issues raised in the present case, it being
impressed with public interest. The ruling of this Court in the case of The
Province of Batangas v. Romulo,4 wherein GAA provisions relating to the IRA
were likewise challenged, is in point, to wit:
Granting arguendo that, as contended by the respondents, the resolution of
the case had already been overtaken by supervening events as the IRA,
including the LGSEF, for 1999, 2000 and 2001, had already been released
and the government is now operating under a new appropriations law, still,
there is compelling reason for this Court to resolve the substantive issue raised
by the instant petition. Supervening events, whether intended or accidental,
cannot prevent the Court from rendering a decision if there is a grave violation
of the Constitution. Even in cases where supervening events had made the
cases moot, the Court did not hesitate to resolve the legal or constitutional
issues raised to formulate controlling principles to guide the bench, bar and
public.
Another reason justifying the resolution by this Court of the substantive issue
now before it is the rule that courts will decide a question otherwise moot and
academic if it is "capable of repetition, yet evading review." For the GAAs in
the coming years may contain provisos similar to those now being sought to
be invalidated, and yet, the question may not be decided before another GAA
is enacted. It, thus, behooves this Court to make a categorical ruling on the
substantive issue now.5
Passing on the arguments of all parties, bearing in mind the dictum that "the
court should not form a rule of constitutional law broader than is required by
the precise facts to which it is applied,"6 this Court finds that only the following
issues need to be resolved in the present petition: (1) whether the petition
contains proper verifications and certifications against forum-shopping, (2)
whether petitioners have the requisite standing to file this suit, and (3) whether
the questioned provisions violate the constitutional injunction that the just
share of local governments in the national taxes or the IRA shall be
automatically released.
Sufficiency of Verification and Certification Against Forum-Shopping
Respondents assail as improperly executed petitioners' verifications and
certifications against forum-shopping as they merely state that the allegations
of the Petition are "true of our knowledge and belief" instead of "true and
correct of our personal knowledge or based on authentic records" as required
under Rule 7, Section 4 of the Rules of Court.7
Jurisprudence is on petitioners' side. In Decano v. Edu,8 this Court held:
Respondents finally raise a technical point referring to the allegedly defective
verification of the petition filed in the trial court, contending that the clause in
the verification statement "that I have read the contents of the said petition;
and that [to] the best of my knowledge are true and correct" is insufficient since
under section 6 of Rule 7, it is required that the person verifying must have
read the pleading and that the allegations thereof are true of his own
knowledge. We do not see any reason for rendering the said verification void.
The statement "to the best of my knowledge are true and correct" referring to
the allegations in the petition does not mean mere "knowledge, information
and belief." It constitutes substantial compliance with the requirement of
section 6 of Rule 7, as held in Madrigal vs. Rodas (80 Phil. 252.). At any rate,
this petty technicality deserves scant consideration where the question at issue
is one purely of law and there is no need of delving into the veracity of the
allegations in the petition, which are not disputed at all by respondents. As we
have held time and again, imperfections of form and technicalities of procedure
are to be disregarded except where substantial rights would otherwise be
prejudiced. (Emphasis and underscoring supplied)
Respondents go on to claim that the same verifications were signed by
persons who were not authorized by the incorporated cause-oriented groups
which they claim to represent, hence, the Petition should be treated as an
unsigned pleading.
Indeed, only duly authorized natural persons may execute verifications in
behalf of juridical entities such as petitioners NGOs and people's
organizations. As this Court held in Santos v. CA, "In fact, physical actions,
e.g., signing and delivery of documents, may be performed on behalf of the
corporate entity only by specifically authorized individuals."9
Nonetheless, the present petition cannot be treated as an unsigned pleading.
For even if the rule that representatives of corporate entities must present the
requisite authorization were to be strictly applied, there would remain among
the multi-group-petitioners the individuals who validly executed verifications in
their own names, namely, petitioners Adelino C. Lavador, Punong Barangay
Isabel Mendez, and Punong Barangay Carolina Romanos.
At all events, in light of the following ruling of this Court in Shipside Inc. v.
CA:10
. . . in Loyola, Roadway, and Uy, the Court excused non-compliance with the
requirement as to the certificate of non-forum shopping. With more reason
should we allow the instant petition since petitioner herein did submit a
certification on non-forum shopping, failing only to show proof that the
signatory was authorized to do so. That petitioner subsequently submitted a
secretary's certificate attesting that Balbin was authorized to file an action on
behalf of petitioner likewise mitigates this oversight.
It must also be kept in mind that while the requirement of the certificate of non-
forum shopping is mandatory, nonetheless the requirements must not be
interpreted too literally and thus defeat the objective of preventing the
undesirable practice of forum-shopping (Bernardo v. NLRC, 255 SCRA 108
[1996]). Lastly, technical rules of procedure should be used to promote, not
frustrate justice. While the swift unclogging of court dockets is a laudable
objective, the granting of substantial justice is an even more urgent ideal.
(Underscoring supplied),
a too literal interpretation must be avoided if it defeats the objective of
preventing the practice of forum shopping.
Standing
Respondents assail petitioners' standing in this controversy, proffering that it
is the local government units - each having a separate juridical entity - which
stand to be injured.
The subsequent intervention of the provinces of Batangas and Nueva Ecija
which have adopted the arguments of petitioners has, however, made the
question of standing academic.11
Respondents, contending that petitioners have no cause of action against
them as they claim to have no responsibility with respect to the mandate of the
GAA provisions, proffer that the committees mentioned in the GAA provisions,
namely, the Development Budget Coordinating Committee, Committee on
Finance of the Senate, and Committee on Appropriations of the House of
Representatives, should instead have been impleaded.
Respondents' position does not lie.
The GAA provisions being challenged were not to be implemented solely by
the committees specifically mentioned therein, for they being in the nature of
appropriations provisions, they were also to be implemented by the executive
branch, particularly the Department of Budget and Management (DBM) and
the National Treasurer. The task of the committees related merely to the
conduct of the quarterly assessment required in the provisions, and not in the
actual release of the IRA which is the duty of the executive. Since the present
controversy centers on the proper manner of releasing the IRA, the impleaded
respondents are the proper parties to this suit.
In fact in earlier petitions likewise involving the constitutionality of provisions of
previous general appropriations acts which this Court granted, the therein
respondent officials were the same as those in the present case, e.g.,
Guingona v. Carague12 and PHILCONSA v. Enriquez.13
Constitutionality of the GAA Provisions
Article X, Section 6 of the Constitution provides:
SECTION 6. Local government units shall have a just share, as determined by
law, in the national taxes which shall be automatically released to them.
Petitioners argue that the GAA violated this constitutional mandate when it
made the release of IRA contingent on whether revenue collections could meet
the revenue targets originally submitted by the President, rather than making
the release automatic.
Respondents counterargue that the above constitutional provision is
addressed not to the legislature but to the executive, hence, the same does
not prevent the legislature from imposing conditions upon the release of the
IRA. They cite the exchange between Commissioner (now Chief Justice)
Davide and Commissioner Nolledo in the deliberations of the Constitutional
Commission on the above-quoted Sec. 6, Art. X of the Constitution, to wit:
THE PRESIDENT. How about the second sentence?
MR. DAVIDE. The second sentence would be a new section that would be
Section 13. As modified it will read as follows: "LOCAL GOVERNMENT UNITS
SHALL HAVE A JUST SHARE, AS DETERMINED BY LAW, in the national
taxes WHICH SHALL BE automatically PERIODICALLY released to them."
MR. NOLLEDO. That will be Section 12, subsection (1) in the amendment.
MR. DAVIDE. No, we will just delete that because the second would be another
section so Section 12 would only be this: "LOCAL GOVERNMENT UNITS
SHALL HAVE A JUST SHARE, AS DETERMINED BY LAW, in the national
taxes WHICH SHALL BE automatically PERIODICALLY released to them."
MR. NOLLEDO. But the word "PERIODICALLY" may mean possibly
withholding the automatic release to them by adopting certain periods of
automatic release. If we use the word "automatically" without
"PERIODICALLY," the latter may be already contemplated by "automatically."
So, the Committee objects to the word "PERIODICALLY."
MR. DAVIDE. If we do not say PERIODICALLY, it might be very, very difficult
to comply with it because these are taxes collected and actually released by
the national government every quarter. It is not that upon collection a portion
should immediately be released. It is quarterly. Otherwise, the national
government will have to remit everyday and that would be very expensive.
MR. NOLLEDO. That is not hindered by the word "automatically." But if we put
"automatically" and "PERIODICALLY" at the same time, that means certain
periods have to be observed as will be set forth by the Budget Officer thereby
negating the meaning of "automatically."
MR. DAVIDE. On the other hand, if we do not state PERIODICALLY, it may
be done every semester; it may be done at the end of the year. It is still
automatic release.
MR. NOLLEDO. As far as the Committee is concerned, we vigorously object
to the word "PERIODICALLY."
MR. DAVIDE. Only the word PERIODICALLY?
MR. NOLLEDO. If the Commissioner is amenable to deleting that, we will
accept the amendment.
MR. DAVIDE. I will agree to the deletion of the word PERIODICALLY.
MR. NOLLEDO. Thank you.
The Committee accepts the amendment. (Emphasis supplied)14
In the above exchange of statements, it is clear that although Commissioners
Davide and Nolledo held different views with regard to the proper wording of
the constitutional provision, they shared a common assumption that the entity
which would execute the automatic release of internal revenue was the
executive department.
Commissioner Davide referred to the national government as the entity that
collects and remits internal revenue. Similarly, Commissioner Nolledo alluded
to the Budget Officer, who is clearly under the executive branch.
Respondents thus infer that the subject constitutional provision merely
prevents the executive branch of the government from "unilaterally"
withholding the IRA, but not the legislature from authorizing the executive
branch to withhold the same. In the words of respondents, "This essentially
means that the President or any member of the Executive Department cannot
unilaterally, i.e., without the backing of statute, withhold the release of the
IRA."15
Respondents' position does not lie.
As the Constitution lays upon the executive the duty to automatically release
the just share of local governments in the national taxes, so it enjoins the
legislature not to pass laws that might prevent the executive from performing
this duty. To hold that the executive branch may disregard constitutional
provisions which define its duties, provided it has the backing of statute, is
virtually to make the Constitution amendable by statute - a proposition which
is patently absurd.
Moreover, there is merit in the argument of the intervenor Province of
Batangas that, if indeed the framers intended to allow the enactment of
statutes making the release of IRA conditional instead of automatic, then
Article X, Section 6 of the Constitution would have been worded differently.
Instead of reading "Local government units shall have a just share, as
determined by law, in the national taxes which shall be automatically released
to them" (italics supplied), it would have read as follows, so the Province of
Batangas posits:
"Local government units shall have a just share, as determined by law, in the
national taxes which shall be [automatically] released to them as provided by
law," or,
"Local government units shall have a just share in the national taxes which
shall be [automatically] released to them as provided by law," or
"Local government units shall have a just share, as determined by law, in the
national taxes which shall be automatically released to them subject to
exceptions Congress may provide."16 (Italics supplied)
Since, under Article X, Section 6 of the Constitution, only the just share of local
governments is qualified by the words "as determined by law," and not the
release thereof, the plain implication is that Congress is not authorized by the
Constitution to hinder or impede the automatic release of the IRA.
Indeed, that Article X, Section 6 of the Constitution did bind the legislative just
as much as the executive branch was presumed in the ruling of this Court in
the case of The Province of Batangas v. Romulo17 which is analogous in many
respects to the one at bar.
In Batangas, the petitioner therein challenged the constitutionality of certain
provisos of the GAAs for FY 1999, 2000, and 2001 which set up the Local
Government Service Equalization Fund (LGSEF). The LGSEF was a portion
of the IRA which was to be released only upon a finding of the Oversight
Committee on Devolution that the LGU concerned had complied with the
guidelines issued by said committee. This Court measured the challenged
legislative acts against Article X, Section 6 and declared them unconstitutional
- a ruling which presupposes that the legislature, like the executive, is
mandated by said constitutional provision to ensure that the just share of local
governments in the national taxes are automatically released.
Respondents, in further support of their claim that the automatic release
requirement in the Constitution constrains only the executive branch and not
the legislature, cite three statutory provisions whereby the legislature
authorized the executive branch to withhold the IRA in certain circumstances,
namely, Section 70 of the Philippine National Police Reform and
Reorganization Act of 1998,18 Section 531(e) of the Local Government
Code,19 and Section 10 of Republic Act 7924 (1995).20 Towards the same
end, respondents also cite Rule XXXII, Article 383(c) of the Rules and
Regulations Implementing the Local Government Code.21
While statutes and implementing rules are entitled to great weight in
constitutional construction as indicators of contemporaneous interpretation,
such interpretation is not necessarily binding or conclusive on the courts. In
Taada v. Cuenco, the Court held:
As a consequence, "where the meaning of a constitutional provision is clear,
a contemporaneous or practical . . . executive interpretation thereof is entitled
to no weight and will not be allowed to distort or in any way change its natural
meaning." The reason is that "the application of the doctrine of
contemporaneous construction is more restricted as applied to the
interpretation of constitutional provisions than when applied to statutory
provisions," and that "except as to matters committed by the constitution itself
to the discretion of some other department, contemporaneous or practical
construction is not necessarily binding upon the courts, even in a doubtful
case." Hence, "if in the judgment of the court, such construction is erroneous
and its further application is not made imperative by any paramount
considerations of public policy, it may be rejected." (Emphasis and
underscoring supplied, citations omitted)22
The validity of the legislative acts assailed in the present case should,
therefore, be assessed in light of Article X, Section 6 of the Constitution.
Again, in Batangas,23 this Court interpreted the subject constitutional
provision as follows:
When parsed, it would be readily seen that this provision mandates that (1) the
LGUs shall have a "just share" in the national taxes; (2) the "just share" shall
be determined by law; and (3) the "just share" shall be automatically released
to the LGUs.
xxx
Webster's Third New International Dictionary defines "automatic" as
"involuntary either wholly or to a major extent so that any activity of the will is
largely negligible; of a reflex nature; without volition; mechanical; like or
suggestive of an automaton." Further, the word "automatically" is defined as
"in an automatic manner: without thought or conscious intention." Being
"automatic," thus, connotes something mechanical, spontaneous and
perfunctory. x x x" (Emphasis and underscoring supplied)24
Further on, the Court held:
To the Court's mind, the entire process involving the distribution and release
of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA
or "just share" of the LGUs in the national taxes. To subject its distribution and
release to the vagaries of the implementing rules and regulations, including
the guidelines and mechanisms unilaterally prescribed by the Oversight
Committee from time to time, as sanctioned by the assailed provisos in the
GAAs of 1999, 2000 and 2001 and the OCD resolutions, makes the release
not automatic, a flagrant violation of the constitutional and statutory mandate
that the "just share" of the LGUs "shall be automatically released to them." The
LGUs are, thus, placed at the mercy of the Oversight Committee.
Where the law, the Constitution in this case, is clear and unambiguous, it must
be taken to mean exactly what it says, and courts have no choice but to see
to it that the mandate is obeyed. Moreover, as correctly posited by the
petitioner, the use of the word "shall" connotes a mandatory order. Its use in a
statute denotes an imperative obligation and is inconsistent with the idea of
discretion. x x x (Emphasis and underscoring supplied)25
While "automatic release" implies that the just share of the local governments
determined by law should be released to them as a matter of course, the GAA
provisions, on the other hand, withhold its release pending an event which is
not even certain of occurring. To rule that the term "automatic release"
contemplates such conditional release would be to strip the term "automatic"
of all meaning.
Additionally, to interpret the term automatic release in such a broad manner
would be inconsistent with the ruling in Pimentel v. Aguirre.26 In the said case,
the executive withheld the release of the IRA pending an assessment very
similar to the one provided in the GAA. This Court ruled that such withholding
contravened the constitutional mandate of an automatic release, viz:
Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal
autonomy is the automatic release of the shares of LGUs in the national
internal revenue. This is mandated by no less than the Constitution. The Local
Government Code specifies further that the release shall be made directly to
the LGU concerned within five (5) days after every quarter of the year and
"shall not be subject to any lien or holdback that may be imposed by the
national government for whatever purpose." As a rule, the term "shall" is a
word of command that must be given a compulsory meaning. The provision is,
therefore, imperative.
Section 4 of AO 372, however, orders the withholding, effective January 1,
1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation
by the Development Budget Coordinating Committee of the emerging fiscal
situation" in the country. Such withholding clearly contravenes the Constitution
and the law. x x x27 (Italics in the original; underscoring supplied)
There is no substantial difference between the withholding of IRA involved in
Pimentel and that in the present case, except that here it is the legislature, not
the executive, which has authorized the withholding of the IRA. The distinction
notwithstanding, the ruling in Pimentel remains applicable. As explained
above, Article X, Section 6 of the Constitution - the same provision relied upon
in Pimentel - enjoins both the legislative and executive branches of
government. Hence, as in Pimentel, under the same constitutional provision,
the legislative is barred from withholding the release of the IRA.
It bears stressing, however, that in light of the proviso in Section 284 of the
Local Government Code which reads:
Provided, That in the event that the national government incurs an
unmanageable public sector deficit, the President of the Philippines is hereby
authorized, upon the recommendation of Secretary of Finance, Secretary of
Interior and Local Government and Secretary of Budget and Management, and
subject to consultation with the presiding officers of both Houses of Congress
and the presidents of the "liga," to make the necessary adjustments in the
internal revenue allotment of local government units but in no case shall the
allotment be less than thirty percent (30%) of the collection of national internal
revenue taxes of the third fiscal year preceding the current fiscal year:
Provided, further, That in the first year of the effectivity of this Code, the local
government units shall, in addition to the thirty percent (30%) internal revenue
allotment which shall include the cost of devolved functions for essential public
services, be entitled to receive the amount equivalent to the cost of devolved
personal services. (Underscoring supplied),
the only possible exception to mandatory automatic release of the IRA is, as
held in Batangas:
if the national internal revenue collections for the current fiscal year is less
than 40 percent of the collections of the preceding third fiscal year, in which
case what should be automatically released shall be a proportionate amount
of the collections for the current fiscal year. The adjustment may even be made
on a quarterly basis depending on the actual collections of national internal
revenue taxes for the quarter of the current fiscal year. x x x28
A final word. This Court recognizes that the passage of the GAA provisions by
Congress was motivated by the laudable intent to "lower the budget deficit in
line with prudent fiscal management."29 The pronouncement in Pimentel,
however, must be echoed: "[T]he rule of law requires that even the best
intentions must be carried out within the parameters of the Constitution and
the law. Verily, laudable purposes must be carried out by legal methods."30
WHEREFORE, the petition is GRANTED. XXXVII and LIV Special Provisions
1 and 4 of the Year 2000 GAA are hereby declared unconstitutional insofar as
they set apart a portion of the IRA, in the amount of 10 Billion, as part of the
UNPROGRAMMED FUND.
SO ORDERED.
10. Kida v. Senate (28 Feb 2012 resolution)
DATU MICHAEL ABAS KIDA,
in his personal capacity, and in representation of MAGUINDANAO
FEDERATION OF AUTONOMOUS IRRIGATORS ASSOCIATION, INC.,
HADJI MUHMINA J. USMAN, JOHN ANTHONY L. LIM, JAMILON T. ODIN,
ASRIN TIMBOL JAIYARI, MUJIB M. KALANG, ALIH AL-SAIDI J. SAPI-E,
KESSAR DAMSIE ABDIL, and BASSAM ALUH SAUPI,
Petitioners,
- versus -
SENATE OF THE PHILIPPINES, represented by its President JUAN PONCE
ENRILE, HOUSE OF REPRESENTATIVES, thru SPEAKER FELICIANO
BELMONTE, COMMISSION ON ELECTIONS, thru its Chairman, SIXTO
BRILLANTES, JR., PAQUITO OCHOA, JR., Office of the President Executive
Secretary, FLORENCIO ABAD, JR., Secretary of Budget, and ROBERTO
TAN, Treasurer of the Philippines,
Respondents.
x----------------------------------------------x
BASARI D. MAPUPUNO,
Petitioner,
- versus -
SIXTO BRILLANTES, in his capacity as Chairman of the Commission on
Elections, FLORENCIO ABAD, JR. in his capacity as Secretary of the
Department of Budget and Management, PACQUITO OCHOA, JR., in his
capacity as Executive Secretary, JUAN PONCE ENRILE, in his capacity as
Senate President, and FELICIANO BELMONTE, in his capacity as Speaker of
the House of Representatives,
Respondents.
x----------------------------------------------x
- versus -
REP. EDCEL C. LAGMAN,
Petitioner,
THE COMMISSION ON ELECTIONS and EXECUTIVE SECRETARY
PAQUITO N. OCHOA, JR.,
- versus - Respondents.
x----------------------------------------------x

PAQUITO N. OCHOA, JR., in his capacity as the Executive Secretary, and the JACINTO V. PARAS,
COMMISSION ON ELECTIONS, Petitioner,
Respondents.
x----------------------------------------------x - versus -

ALMARIM CENTI TILLAH, DATU

CASAN CONDING CANA, and PARTIDO DEMOKRATIKO PILIPINO LAKAS EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., and the
NG BAYAN (PDP-LABAN), COMMISSION ON ELECTIONS,
Petitioners, Respondents.
x--------------------------------------------x

- versus - MINORITY RIGHTS FORUM, PHILIPPINES, INC.,

Respondents-Intervenor.

THE COMMISSION ON ELECTIONS, through its Chairman, SIXTO G.R. No. 196271
BRILLANTES, JR., HON. PAQUITO N. OCHOA, JR., in his capacity as
Executive Secretary, HON. FLORENCIO B. ABAD, JR., in his capacity as Present:
Secretary of the Department of Budget and Management, and HON.
ROBERTO B. TAN, in his capacity as Treasurer of the Philippines, CORONA, C.J.,
Respondents. CARPIO,
x----------------------------------------------x VELASCO, JR.,
LEONARDO-DE CASTRO,
ATTY. ROMULO B. MACALINTAL, BRION,
Petitioner, PERALTA,
BERSAMIN,
DEL CASTILLO,
- versus - ABAD,
VILLARAMA, JR.,
PEREZ,
COMMISSION ON ELECTIONS and THE OFFICE OF THE PRESIDENT, MENDOZA,
through EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., SERENO,
Respondents. REYES, and
x----------------------------------------------x PERLAS-BERNABE, JJ.

LUIS BAROK BIRAOGO, Promulgated:

Petitioner,
October 18, 2011
G.R. No. 196305
G.R. No. 197221
G.R. No. 197280
G.R. No. 197282
G.R. No. 197392
G.R. No. 197454
x------------------------------------------------------------------------------------x
DECISION
BRION, J.:
On June 30, 2011, Republic Act (RA) No. 10153, entitled An Act Providing for
the Synchronization of the Elections in the Autonomous Region in Muslim
Mindanao (ARMM) with the National and Local Elections and for Other
Purposes was enacted. The law reset the ARMM elections from the 8th of
August 2011, to the second Monday of May 2013 and every three (3) years
thereafter, to coincide with the countrys regular national and local elections.
The law as well granted the President the power to appoint officers-in-charge
(OICs) for the Office of the Regional Governor, the Regional Vice-Governor,
and the Members of the Regional Legislative Assembly, who shall perform the
functions pertaining to the said offices until the officials duly elected in the May
2013 elections shall have qualified and assumed office.
Even before its formal passage, the bills that became RA No. 10153 already
spawned petitions against their validity; House Bill No. 4146 and Senate Bill
No. 2756 were challenged in petitions filed with this Court. These petitions
multiplied after RA No. 10153 was passed.
Factual Antecedents
The State, through Sections 15 to 22, Article X of the 1987 Constitution,
mandated the creation of autonomous regions in Muslim Mindanao and the
Cordilleras. Section 15 states:
Section 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.
Section 18 of the Article, on the other hand, directed Congress to enact an
organic act for these autonomous regions to concretely carry into effect the
granted autonomy.
Section 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 multisectoral 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 a
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.
On August 1, 1989 or two years after the effectivity of the 1987 Constitution,
Congress acted through Republic Act (RA) No. 6734 entitled An Act Providing
for an Organic Act for the Autonomous Region in Muslim Mindanao. A
plebiscite was held on November 6, 1990 as required by Section 18(2), Article
X of RA No. 6734, thus fully establishing the Autonomous Region of Muslim
Mindanao (ARMM). The initially assenting provinces were Lanao del Sur,
Maguindanao, Sulu and Tawi-tawi. RA No. 6734 scheduled the first regular
elections for the regional officials of the ARMM on a date not earlier than 60
days nor later than 90 days after its ratification.
RA No. 9054 (entitled An Act to Strengthen and Expand the Organic Act for
the Autonomous Region in Muslim Mindanao, Amending for the Purpose
Republic Act No. 6734, entitled An Act Providing for the Autonomous Region
in Muslim Mindanao, as Amended) was the next legislative act passed. This
law provided further refinement in the basic ARMM structure first defined in the
original organic act, and reset the regular elections for the ARMM regional
officials to the second Monday of September 2001.
Congress passed the next law affecting ARMM RA No. 9140[1] - on June 22,
2001. This law reset the first regular elections originally scheduled under RA
No. 9054, to November 26, 2001. It likewise set the plebiscite to ratify RA No.
9054 to not later than August 15, 2001.
RA No. 9054 was ratified in a plebiscite held on August 14, 2001. The province
of Basilan and Marawi City voted to join ARMM on the same date.
RA No. 9333[2] was subsequently passed by Congress to reset the ARMM
regional elections to the 2nd Monday of August 2005, and on the same date
every 3 years thereafter. Unlike RA No. 6734 and RA No. 9054, RA No. 9333
was not ratified in a plebiscite.
Pursuant to RA No. 9333, the next ARMM regional elections should have been
held on August 8, 2011. COMELEC had begun preparations for these
elections and had accepted certificates of candidacies for the various regional
offices to be elected. But on June 30, 2011, RA No. 10153 was enacted,
resetting the ARMM elections to May 2013, to coincide with the regular
national and local elections of the country.
RA No. 10153 originated in the House of Representatives as House Bill (HB)
No. 4146, seeking the postponement of the ARMM elections scheduled on
August 8, 2011. On March 22, 2011, the House of Representatives passed HB
No. 4146, with one hundred ninety one (191) Members voting in its favor.
After the Senate received HB No. 4146, it adopted its own version, Senate Bill
No. 2756 (SB No. 2756), on June 6, 2011. Thirteen (13) Senators voted
favorably for its passage. On June 7, 2011, the House of Representative
concurred with the Senate amendments, and on June 30, 2011, the President
signed RA No. 10153 into law.
As mentioned, the early challenge to RA No. 10153 came through a petition
filed with this Court G.R. No. 196271[3] - assailing the constitutionality of both
HB No. 4146 and SB No. 2756, and challenging the validity of RA No. 9333 as
well for non-compliance with the constitutional plebiscite requirement.
Thereafter, petitioner Basari Mapupuno in G.R. No. 196305 filed another
petition[4] also assailing the validity of RA No. 9333.
With the enactment into law of RA No. 10153, the COMELEC stopped its
preparations for the ARMM elections. The law gave rise as well to the filing of
the following petitions against its constitutionality:
a) Petition for Certiorari and Prohibition[5] filed by Rep. Edcel Lagman as a
member of the House of Representatives against Paquito Ochoa, Jr. (in his
capacity as the Executive Secretary) and the COMELEC, docketed as G.R.
No. 197221;
b) Petition for Mandamus and Prohibition[6] filed by Atty. Romulo Macalintal
as a taxpayer against the COMELEC, docketed as G.R. No. 197282;
c) Petition for Certiorari and Mandamus, Injunction and Preliminary
Injunction[7] filed by Louis Barok Biraogo against the COMELEC and
Executive Secretary Paquito N. Ochoa, Jr., docketed as G.R. No. 197392; and
d) Petition for Certiorari and Mandamus[8] filed by Jacinto Paras as a
member of the House of Representatives against Executive Secretary Paquito
Ochoa, Jr. and the COMELEC, docketed as G.R. No. 197454.
Petitioners Alamarim Centi Tillah and Datu Casan Conding Cana as registered
voters from the ARMM, with the Partido Demokratiko Pilipino Lakas ng Bayan
(a political party with candidates in the ARMM regional elections scheduled for
August 8, 2011), also filed a Petition for Prohibition and Mandamus[9] against
the COMELEC, docketed as G.R. No. 197280, to assail the constitutionality of
RA No. 9140, RA No. 9333 and RA No. 10153.
Subsequently, Anak Mindanao Party-List, Minority Rights Forum Philippines,
Inc. and Bangsamoro Solidarity Movement filed their own Motion for Leave to
Admit their Motion for Intervention and Comment-in-Intervention dated July 18,
2011. On July 26, 2011, the Court granted the motion. In the same Resolution,
the Court ordered the consolidation of all the petitions relating to the
constitutionality of HB No. 4146, SB No. 2756, RA No. 9333, and RA No.
10153.
Oral arguments were held on August 9, 2011 and August 16, 2011. Thereafter,
the parties were instructed to submit their respective memoranda within twenty
(20) days.
On September 13, 2011, the Court issued a temporary restraining order
enjoining the implementation of RA No. 10153 and ordering the incumbent
elective officials of ARMM to continue to perform their functions should these
cases not be decided by the end of their term on September 30, 2011.
The Arguments
The petitioners assailing RA No. 9140, RA No. 9333 and RA No. 10153 assert
that these laws amend RA No. 9054 and thus, have to comply with the
supermajority vote and plebiscite requirements prescribed under Sections 1
and 3, Article XVII of RA No. 9094 in order to become effective.
The petitions assailing RA No. 10153 further maintain that it is unconstitutional
for its failure to comply with the three-reading requirement of Section 26(2),
Article VI of the Constitution. Also cited as grounds are the alleged violations
of the right of suffrage of the people of ARMM, as well as the failure to adhere
to the elective and representative character of the executive and legislative
departments of the ARMM. Lastly, the petitioners challenged the grant to the
President of the power to appoint OICs to undertake the functions of the
elective ARMM officials until the officials elected under the May 2013 regular
elections shall have assumed office. Corrolarily, they also argue that the power
of appointment also gave the President the power of control over the ARMM,
in complete violation of Section 16, Article X of the Constitution.
The Issues
From the parties submissions, the following issues were recognized and
argued by the parties in the oral arguments of August 9 and 16, 2011:
I. Whether the 1987 Constitution mandates the synchronization of elections
II. Whether the passage of RA No. 10153 violates Section 26(2), Article VI
of the 1987 Constitution
III. Whether the passage of RA No. 10153 requires a supermajority vote and
plebiscite
A. Does the postponement of the ARMM regular elections constitute an
amendment to Section 7, Article XVIII of RA No. 9054?
B. Does the requirement of a supermajority vote for amendments or revisions
to RA No. 9054 violate Section 1 and Section 16(2), Article VI of the 1987
Constitution and the corollary doctrine on irrepealable laws?
C. Does the requirement of a plebiscite apply only in the creation of
autonomous regions under paragraph 2, Section 18, Article X of the 1987
Constitution?
IV. Whether RA No. 10153 violates the autonomy granted to the ARMM
V. Whether the grant of the power to appoint OICs violates:
A. Section 15, Article X of the 1987 Constitution
B. Section 16, Article X of the 1987 Constitution
C. Section 18, Article X of the 1987 Constitution
VI. Whether the proposal to hold special elections is constitutional and
legal.
We shall discuss these issues in the order they are presented above.
OUR RULING
We resolve to DISMISS the petitions and thereby UPHOLD the
constitutionality of RA No. 10153 in toto.
I. Synchronization as a recognized constitutional mandate
The respondent Office of the Solicitor General (OSG) argues that the
Constitution mandates synchronization, and in support of this position, cites
Sections 1, 2 and 5, Article XVIII (Transitory Provisions) of the 1987
Constitution, which provides:
Section 1. The first elections of Members of the Congress under this
Constitution shall be held on the second Monday of May, 1987.
The first local elections shall be held on a date to be determined by the
President, which may be simultaneous with the election of the Members of the
Congress. It shall include the election of all Members of the city or municipal
councils in the Metropolitan Manila area.
Section 2. The Senators, Members of the House of Representatives and the
local officials first elected under this Constitution shall serve until noon of June
30, 1992.
Of the Senators elected in the election in 1992, the first twelve obtaining the
highest number of votes shall serve for six year and the remaining twelve for
three years.
xxx
Section 5. The six-year term of the incumbent President and Vice President
elected in the February 7, 1986 election is, for purposes of synchronization of
elections, hereby extended to noon of June 30, 1992.
The first regular elections for President and Vice-President under this
Constitution shall be held on the second Monday of May, 1992.
We agree with this position.
While the Constitution does not expressly state that Congress has to
synchronize national and local elections, the clear intent towards this objective
can be gleaned from the Transitory Provisions (Article XVIII) of the
Constitution,[10] which show the extent to which the Constitutional
Commission, by deliberately making adjustments to the terms of the incumbent
officials, sought to attain synchronization of elections.[11]
The objective behind setting a common termination date for all elective
officials, done among others through the shortening the terms of the twelve
winning senators with the least number of votes, is to synchronize the holding
of all future elections whether national or local to once every three years.[12]
This intention finds full support in the discussions during the Constitutional
Commission deliberations.[13]
These Constitutional Commission exchanges, read with the provisions of the
Transitory Provisions of the Constitution, all serve as patent indicators of the
constitutional mandate to hold synchronized national and local elections,
starting the second Monday of May, 1992 and for all the following elections.
This Court was not left behind in recognizing the synchronization of the
national and local elections as a constitutional mandate. In Osmea v.
Commission on Elections,[14] we explained:
It is clear from the aforequoted provisions of the 1987 Constitution that the
terms of office of Senators, Members of the House of Representatives, the
local officials, the President and the Vice-President have been synchronized
to end on the same hour, date and year noon of June 30, 1992.
It is likewise evident from the wording of the above-mentioned Sections that
the term of synchronization is used synonymously as the phrase holding
simultaneously since this is the precise intent in terminating their Office Tenure
on the same day or occasion. This common termination date will synchronize
future elections to once every three years (Bernas, the Constitution of the
Republic of the Philippines, Vol. II, p. 605).
That the election for Senators, Members of the House of Representatives and
the local officials (under Sec. 2, Art. XVIII) will have to be synchronized with
the election for President and Vice President (under Sec. 5, Art. XVIII) is
likewise evident from the x x x records of the proceedings in the Constitutional
Commission. [Emphasis supplied.]
Although called regional elections, the ARMM elections should be included
among the elections to be synchronized as it is a local election based on the
wording and structure of the Constitution.
A basic rule in constitutional construction is that the words used should be
understood in the sense that they have in common use and given their ordinary
meaning, except when technical terms are employed, in which case the
significance thus attached to them prevails.[15] As this Court explained in
People v. Derilo,[16] [a]s the Constitution is not primarily a lawyers document,
its language should be understood in the sense that it may have in common.
Its words should be given their ordinary meaning except where technical terms
are employed.
Understood in its ordinary sense, the word local refers to something that
primarily serves the needs of a particular limited district, often a community or
minor political subdivision.[17] Regional elections in the ARMM for the
positions of governor, vice-governor and regional assembly representatives
obviously fall within this classification, since they pertain to the elected officials
who will serve within the limited region of ARMM.
From the perspective of the Constitution, autonomous regions are considered
one of the forms of local governments, as evident from Article X of the
Constitution entitled Local Government. Autonomous regions are established
and discussed under Sections 15 to 21 of this Article the article wholly devoted
to Local Government. That an autonomous region is considered a form of local
government is also reflected in Section 1, Article X of the Constitution, which
provides:
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.
Thus, we find the contention that the synchronization mandated by the
Constitution does not include the regional elections of the ARMM
unmeritorious. We shall refer to synchronization in the course of our
discussions below, as this concept permeates the consideration of the various
issues posed in this case and must be recalled time and again for its complete
resolution.
II. The Presidents Certification on the Urgency of RA No. 10153
The petitioners in G.R. No. 197280 also challenge the validity of RA No. 10153
for its alleged failure to comply with Section 26(2), Article VI of the
Constitution[18] which provides that before bills passed by either the House or
the Senate can become laws, they must pass through three readings on
separate days. The exception is when the President certifies to the necessity
of the bills immediate enactment.
The Court, in Tolentino v. Secretary of Finance,[19] explained the effect of the
Presidents certification of necessity in the following manner:
The presidential certification dispensed with the requirement not only of
printing but also that of reading the bill on separate days. The phrase "except
when the President certifies to the necessity of its immediate enactment, etc."
in Art. VI, Section 26[2] qualifies the two stated conditions before a bill can
become a law: [i] the bill has passed three readings on separate days and [ii]
it has been printed in its final form and distributed three days before it is finally
approved.
xxx
That upon the certification of a bill by the President, the requirement of three
readings on separate days and of printing and distribution can be dispensed
with is supported by the weight of legislative practice. For example, the bill
defining the certiorari jurisdiction of this Court which, in consolidation with the
Senate version, became Republic Act No. 5440, was passed on second and
third readings in the House of Representatives on the same day [May 14, 1968]
after the bill had been certified by the President as urgent.
In the present case, the records show that the President wrote to the Speaker
of the House of Representatives to certify the necessity of the immediate
enactment of a law synchronizing the ARMM elections with the national and
local elections.[20] Following our Tolentino ruling, the Presidents certification
exempted both the House and the Senate from having to comply with the three
separate readings requirement.
On the follow-up contention that no necessity existed for the immediate
enactment of these bills since there was no public calamity or emergency that
had to be met, again we hark back to our ruling in Tolentino:
The sufficiency of the factual basis of the suspension of the writ of habeas
corpus or declaration of martial law Art. VII, Section 18, or the existence of a
national emergency justifying the delegation of extraordinary powers to the
President under Art. VI, Section 23(2) is subject to judicial review because
basic rights of individuals may be of hazard. But the factual basis of
presidential certification of bills, which involves doing away with procedural
requirements designed to insure that bills are duly considered by members of
Congress, certainly should elicit a different standard of review. [Emphasis
supplied.]
The House of Representatives and the Senate in the exercise of their
legislative discretion gave full recognition to the Presidents certification and
promptly enacted RA No. 10153. Under the circumstances, nothing short of
grave abuse of discretion on the part of the two houses of Congress can justify
our intrusion under our power of judicial review.[21]
The petitioners, however, failed to provide us with any cause or justification for
this course of action. Hence, while the judicial department and this Court are
not bound by the acceptance of the President's certification by both the House
of Representatives and the Senate, prudent exercise of our powers and
respect due our co-equal branches of government in matters committed to
them by the Constitution, caution a stay of the judicial hand.[22]
In any case, despite the Presidents certification, the two-fold purpose that
underlies the requirement for three readings on separate days of every bill
must always be observed to enable our legislators and other parties interested
in pending bills to intelligently respond to them. Specifically, the purpose with
respect to Members of Congress is: (1) to inform the legislators of the matters
they shall vote on and (2) to give them notice that a measure is in progress
through the enactment process.[23]
We find, based on the records of the deliberations on the law, that both
advocates and the opponents of the proposed measure had sufficient
opportunities to present their views. In this light, no reason exists to nullify RA
No. 10153 on the cited ground.
III. A. RA No. 9333 and RA No. 10153 are not amendments to RA No. 9054
The effectivity of RA No. 9333 and RA No. 10153 has also been challenged
because they did not comply with Sections 1 and 3, Article XVII of RA No. 9054
in amending this law. These provisions require:
Section 1. Consistent with the provisions of the Constitution, this Organic Act
may be reamended or revised by the Congress of the Philippines upon a vote
of two-thirds (2/3) of the Members of the House of Representatives and of the
Senate voting separately.
Section 3. Any amendment to or revision of this Organic Act shall become
effective only when approved by a majority of the vote cast in a plebiscite called
for the purpose, which shall be held not earlier than sixty (60) days or later
than ninety (90) days after the approval of such amendment or revision.
We find no merit in this contention.
In the first place, neither RA No. 9333 nor RA No. 10153 amends RA No. 9054.
As an examination of these laws will show, RA No. 9054 only provides for the
schedule of the first ARMM elections and does not fix the date of the regular
elections. A need therefore existed for the Congress to fix the date of the
subsequent ARMM regular elections, which it did by enacting RA No. 9333
and thereafter, RA No. 10153. Obviously, these subsequent laws RA No. 9333
and RA No. 10153 cannot be considered amendments to RA No. 9054 as they
did not change or revise any provision in the latter law; they merely filled in a
gap in RA No. 9054 or supplemented the law by providing the date of the
subsequent regular elections.
This view that Congress thought it best to leave the determination of the date
of succeeding ARMM elections to legislative discretion finds support in
ARMMs recent history.
To recall, RA No. 10153 is not the first law passed that rescheduled the ARMM
elections. The First Organic Act RA No. 6734 not only did not fix the date of
the subsequent elections; it did not even fix the specific date of the first ARMM
elections,[24] leaving the date to be fixed in another legislative enactment.
Consequently, RA No. 7647,[25] RA No. 8176,[26] RA No. 8746,[27] RA No.
8753,[28] and RA No. 9012[29] were all enacted by Congress to fix the dates
of the ARMM elections. Since these laws did not change or modify any part or
provision of RA No. 6734, they were not amendments to this latter law.
Consequently, there was no need to submit them to any plebiscite for
ratification.
The Second Organic Act RA No. 9054 which lapsed into law on March 31,
2001, provided that the first elections would be held on the second Monday of
September 2001. Thereafter, Congress passed RA No. 9140[30] to reset the
date of the ARMM elections. Significantly, while RA No. 9140 also scheduled
the plebiscite for the ratification of the Second Organic Act (RA No. 9054), the
new date of the ARMM regional elections fixed in RA No. 9140 was not among
the provisions ratified in the plebiscite held to approve RA No. 9054.
Thereafter, Congress passed RA No. 9333,[31] which further reset the date of
the ARMM regional elections. Again, this law was not ratified through a
plebiscite.
From these legislative actions, we see the clear intention of Congress to treat
the laws which fix the date of the subsequent ARMM elections as separate and
distinct from the Organic Acts. Congress only acted consistently with this intent
when it passed RA No. 10153 without requiring compliance with the
amendment prerequisites embodied in Section 1 and Section 3, Article XVII of
RA No. 9054.
III. B. Supermajority voting requirement unconstitutional for giving RA No. 9054
the character of an irrepealable law
Even assuming that RA No. 9333 and RA No. 10153 did in fact amend RA No.
9054, the supermajority (2/3) voting requirement required under Section 1,
Article XVII of RA No. 9054[32] has to be struck down for giving RA No. 9054
the character of an irrepealable law by requiring more than what the
Constitution demands.
Section 16(2), Article VI of the Constitution provides that a majority of each
House shall constitute a quorum to do business. In other words, as long as
majority of the members of the House of Representatives or the Senate are
present, these bodies have the quorum needed to conduct business and hold
session. Within a quorum, a vote of majority is generally sufficient to enact
laws or approve acts.
In contrast, Section 1, Article XVII of RA No. 9054 requires a vote of no less
than two-thirds (2/3) of the Members of the House of Representatives and of
the Senate, voting separately, in order to effectively amend RA No. 9054.
Clearly, this 2/3 voting requirement is higher than what the Constitution
requires for the passage of bills, and served to restrain the plenary powers of
Congress to amend, revise or repeal the laws it had passed. The Courts
pronouncement in City of Davao v. GSIS[33] on this subject best explains the
basis and reason for the unconstitutionality:
Moreover, it would be noxious anathema to democratic principles for a
legislative body to have the ability to bind the actions of future legislative body,
considering that both assemblies are regarded with equal footing, exercising
as they do the same plenary powers. Perpetual infallibility is not one of the
attributes desired in a legislative body, and a legislature which attempts to
forestall future amendments or repeals of its enactments labors under
delusions of omniscience.
xxx
A state legislature has a plenary law-making power over all subjects, whether
pertaining to persons or things, within its territorial jurisdiction, either to
introduce new laws or repeal the old, unless prohibited expressly or by
implication by the federal constitution or limited or restrained by its own. It
cannot bind itself or its successors by enacting irrepealable laws except when
so restrained. Every legislative body may modify or abolish the acts passed by
itself or its predecessors. This power of repeal may be exercised at the same
session at which the original act was passed; and even while a bill is in its
progress and before it becomes a law. This legislature cannot bind a future
legislature to a particular mode of repeal. It cannot declare in advance the
intent of subsequent legislatures or the effect of subsequent legislation upon
existing statutes.[34] (Emphasis ours.)
Thus, while a supermajority is not a total ban against a repeal, it is a limitation
in excess of what the Constitution requires on the passage of bills and is
constitutionally obnoxious because it significantly constricts the future
legislators room for action and flexibility.
III. C. Section 3, Article XVII of RA No. 9054 excessively enlarged the plebiscite
requirement found in Section 18, Article X of the Constitution
The requirements of RA No. 9054 not only required an unwarranted
supermajority, but enlarged as well the plebiscite requirement, as embodied in
its Section 3, Article XVII of that Act. As we did on the supermajority
requirement, we find the enlargement of the plebiscite requirement required
under Section 18, Article X of the Constitution to be excessive to point of
absurdity and, hence, a violation of the Constitution.
Section 18, Article X of the Constitution states that the plebiscite is required
only for the creation of autonomous regions and for determining which
provinces, cities and geographic areas will be included in the autonomous
regions. While the settled rule is that amendments to the Organic Act have to
comply with the plebiscite requirement in order to become effective,[35]
questions on the extent of the matters requiring ratification may unavoidably
arise because of the seemingly general terms of the Constitution and the
obvious absurdity that would result if a plebiscite were to be required for every
statutory amendment.
Section 18, Article X of the Constitution plainly states that The creation of the
autonomous region shall be effective when approved by the majority of the
votes case by the constituent units in a plebiscite called for the purpose. With
these wordings as standard, we interpret the requirement to mean that only
amendments to, or revisions of, the Organic Act constitutionally-essential to
the creation of autonomous regions i.e., those aspects specifically mentioned
in the Constitution which Congress must provide for in the Organic Act require
ratification through a plebiscite. These amendments to the Organic Act are
those that relate to: (a) the basic structure of the regional government; (b) the
regions judicial system, i.e., the special courts with personal, family, and
property law jurisdiction; and, (c) the grant and extent of the legislative powers
constitutionally conceded to the regional government under Section 20, Article
X of the Constitution.[36]
The date of the ARMM elections does not fall under any of the matters that the
Constitution specifically mandated Congress to provide for in the Organic Act.
Therefore, even assuming that the supermajority votes and the plebiscite
requirements are valid, any change in the date of elections cannot be
construed as a substantial amendment of the Organic Act that would require
compliance with these requirements.
IV. The synchronization issue
As we discussed above, synchronization of national and local elections is a
constitutional mandate that Congress must provide for and this
synchronization must include the ARMM elections. On this point, an existing
law in fact already exists RA No. 7166 as the forerunner of the current RA No.
10153. RA No. 7166 already provides for the synchronization of local elections
with the national and congressional elections. Thus, what RA No. 10153
provides is an old matter for local governments (with the exception of barangay
and Sanggunian Kabataan elections where the terms are not constitutionally
provided) and is technically a reiteration of what is already reflected in the law,
given that regional elections are in reality local elections by express
constitutional recognition.[37]
To achieve synchronization, Congress necessarily has to reconcile the
schedule of the ARMMs regular elections (which should have been held in
August 2011 based on RA No. 9333) with the fixed schedule of the national
and local elections (fixed by RA No. 7166 to be held in May 2013).
During the oral arguments, the Court identified the three options open to
Congress in order to resolve this problem. These options are: (1) to allow the
elective officials in the ARMM to remain in office in a hold over capacity,
pursuant to Section 7(1), Article VII of RA No. 9054, until those elected in the
synchronized elections assume office;[38] (2) to hold special elections in the
ARMM, with the terms of those elected to expire when those elected in the
synchronized elections assume office; or (3) to authorize the President to
appoint OICs, pursuant to Section 3 of RA No. 10153, also until those elected
in the synchronized elections assume office.
As will be abundantly clear in the discussion below, Congress, in choosing to
grant the President the power to appoint OICs, chose the correct option and
passed RA No. 10153 as a completely valid law.
V. The Constitutionality of RA No. 10153
A. Basic Underlying Premises
To fully appreciate the available options, certain underlying material premises
must be fully understood. The first is the extent of the powers of Congress to
legislate; the second is the constitutional mandate for the synchronization of
elections; and the third is on the concept of autonomy as recognized and
established under the 1987 Constitution.
The grant of legislative power to Congress is broad, general and
comprehensive.[39] The legislative body possesses plenary power for all
purposes of civil government.[40] Any power, deemed to be legislative by
usage and tradition, is necessarily possessed by Congress, unless the
Constitution has lodged it elsewhere.[41] Except as limited by the Constitution,
either expressly or impliedly, legislative power embraces all subjects and
extends to all matters of general concern or common interest.[42]
The constitutional limitations on legislative power are either express or implied.
The express limitations are generally provided in some provisions of the
Declaration of Principles and State Policies (Article 2) and in the provisions Bill
of Rights (Article 3). Other constitutional provisions (such as the initiative and
referendum clause of Article 6, Sections 1 and 32, and the autonomy
provisions of Article X) provide their own express limitations. The implied
limitations are found in the evident purpose which was in view and the
circumstances and historical events which led to the enactment of the
particular provision as a part of organic law.[43]
The constitutional provisions on autonomy specifically, Sections 15 to 21 of
Article X of the Constitution constitute express limitations on legislative power
as they define autonomy, its requirements and its parameters, thus limiting
what is otherwise the unlimited power of Congress to legislate on the
governance of the autonomous region.
Of particular relevance to the issues of the present case are the limitations
posed by the prescribed basic structure of government i.e., that the
government must have an executive department and a legislative assembly,
both of which must be elective and representative of the constituent political
units; national government, too, must not encroach on the legislative powers
granted under Section 20, Article X. Conversely and as expressly reflected in
Section 17, Article X, all powers and functions not granted by this Constitution
or by law to the autonomous regions shall be vested in the National
Government.
The totality of Sections 15 to 21 of Article X should likewise serve as a standard
that Congress must observe in dealing with legislation touching on the affairs
of the autonomous regions. The terms of these sections leave no doubt on
what the Constitution intends the idea of self-rule or self-government, in
particular, the power to legislate on a wide array of social, economic and
administrative matters. But equally clear under these provisions are the
permeating principles of national sovereignty and the territorial integrity of the
Republic, as expressed in the above-quoted Section 17 and in Section 15.[44]
In other words, the Constitution and the supporting jurisprudence, as they now
stand, reject the notion of imperium et imperio[45] in the relationship between
the national and the regional governments.
In relation with synchronization, both autonomy and the synchronization of
national and local elections are recognized and established constitutional
mandates, with one being as compelling as the other. If their compelling force
differs at all, the difference is in their coverage; synchronization operates on
and affects the whole country, while regional autonomy as the term suggests
directly carries a narrower regional effect although its national effect cannot be
discounted.
These underlying basic concepts characterize the powers and limitations of
Congress when it acted on RA No. 10153. To succinctly describe the legal
situation that faced Congress then, its decision to synchronize the regional
elections with the national, congressional and all other local elections (save for
barangay and sangguniang kabataan elections) left it with the problem of how
to provide the ARMM with governance in the intervening period between the
expiration of the term of those elected in August 2008 and the assumption to
office twenty-one (21) months away of those who will win in the synchronized
elections on May 13, 2013.
The problem, in other words, was for interim measures for this period,
consistent with the terms of the Constitution and its established supporting
jurisprudence, and with the respect due to the concept of autonomy. Interim
measures, to be sure, is not a strange phenomenon in the Philippine legal
landscape. The Constitutions Transitory Provisions themselves collectively
provide measures for transition from the old constitution to the new[46] and for
the introduction of new concepts.[47] As previously mentioned, the adjustment
of elective terms and of elections towards the goal of synchronization first
transpired under the Transitory Provisions. The adjustments, however, failed
to look far enough or deeply enough, particularly into the problems that
synchronizing regional autonomous elections would entail; thus, the present
problem is with us today.
The creation of local government units also represents instances when interim
measures are required. In the creation of Quezon del Sur[48] and Dinagat
Islands,[49] the creating statutes authorized the President to appoint an interim
governor, vice-governor and members of the sangguniang panlalawigan
although these positions are essentially elective in character; the appointive
officials were to serve until a new set of provincial officials shall have been
elected and qualified.[50] A similar authority to appoint is provided in the
transition of a local government from a sub-province to a province.[51]
In all these, the need for interim measures is dictated by necessity; out-of-the-
way arrangements and approaches were adopted or used in order to adjust to
the goal or objective in sight in a manner that does not do violence to the
Constitution and to reasonably accepted norms. Under these limitations, the
choice of measures was a question of wisdom left to congressional discretion.
To return to the underlying basic concepts, these concepts shall serve as the
guideposts and markers in our discussion of the options available to Congress
to address the problems brought about by the synchronization of the ARMM
elections, properly understood as interim measures that Congress had to
provide. The proper understanding of the options as interim measures assume
prime materiality as it is under these terms that the passage of RA No. 10153
should be measured, i.e., given the constitutional objective of synchronization
that cannot legally be faulted, did Congress gravely abuse its discretion or
violate the Constitution when it addressed through RA No. 10153 the
concomitant problems that the adjustment of elections necessarily brought
with it?
B. Holdover Option is Unconstitutional
We rule out the first option holdover for those who were elected in executive
and legislative positions in the ARMM during the 2008-2011 term as an option
that Congress could have chosen because a holdover violates Section 8,
Article X of the Constitution. This provision states:
Section 8. The term of office of elective local officials, except barangay
officials, which shall be determined by law, shall be three years and no such
official shall serve for more than three consecutive terms. [emphases ours]
Since elective ARMM officials are local officials, they are covered and bound
by the three-year term limit prescribed by the Constitution; they cannot extend
their term through a holdover. As this Court put in Osmea v. COMELEC:[52]
It is not competent for the legislature to extend the term of officers by providing
that they shall hold over until their successors are elected and qualified where
the constitution has in effect or by clear implication prescribed the term and
when the Constitution fixes the day on which the official term shall begin, there
is no legislative authority to continue the office beyond that period, even though
the successors fail to qualify within the time.
In American Jurisprudence it has been stated as follows:
It has been broadly stated that the legislature cannot, by an act postponing the
election to fill an office the term of which is limited by the Constitution, extend
the term of the incumbent beyond the period as limited by the Constitution.
[Emphasis ours.]
Independently of the Osmea ruling, the primacy of the Constitution as the
supreme law of the land dictates that where the Constitution has itself made a
determination or given its mandate, then the matters so determined or
mandated should be respected until the Constitution itself is changed by
amendment or repeal through the applicable constitutional process. A
necessary corollary is that none of the three branches of government can
deviate from the constitutional mandate except only as the Constitution itself
may allow.[53] If at all, Congress may only pass legislation filing in details to
fully operationalize the constitutional command or to implement it by legislation
if it is non-self-executing; this Court, on the other hand, may only interpret the
mandate if an interpretation is appropriate and called for.[54]
In the case of the terms of local officials, their term has been fixed clearly and
unequivocally, allowing no room for any implementing legislation with respect
to the fixed term itself and no vagueness that would allow an interpretation
from this Court. Thus, the term of three years for local officials should stay at
three (3) years as fixed by the Constitution and cannot be extended by
holdover by Congress.
If it will be claimed that the holdover period is effectively another term
mandated by Congress, the net result is for Congress to create a new term
and to appoint the occupant for the new term. This view like the extension of
the elective term is constitutionally infirm because Congress cannot do
indirectly what it cannot do directly, i.e., to act in a way that would effectively
extend the term of the incumbents. Indeed, if acts that cannot be legally done
directly can be done indirectly, then all laws would be illusory.[55] Congress
cannot also create a new term and effectively appoint the occupant of the
position for the new term. This is effectively an act of appointment by Congress
and an unconstitutional intrusion into the constitutional appointment power of
the President.[56] Hence, holdover whichever way it is viewed is a
constitutionally infirm option that Congress could not have undertaken.
Jurisprudence, of course, is not without examples of cases where the question
of holdover was brought before, and given the imprimatur of approval by, this
Court. The present case though differs significantly from past cases with
contrary rulings, particularly from Sambarani v. COMELEC,[57] Adap v.
Comelec,[58] and Montesclaros v. Comelec,[59] where the Court ruled that the
elective officials could hold on to their positions in a hold over capacity.
All these past cases refer to elective barangay or sangguniang kabataan
officials whose terms of office are not explicitly provided for in the Constitution;
the present case, on the other hand, refers to local elective officials the ARMM
Governor, the ARMM Vice-Governor, and the members of the Regional
Legislative Assembly whose terms fall within the three-year term limit set by
Section 8, Article X of the Constitution. Because of their constitutionally limited
term, Congress cannot legislate an extension beyond the term for which they
were originally elected.
Even assuming that holdover is constitutionally permissible, and there had
been statutory basis for it (namely Section 7, Article VII of RA No. 9054) in the
past,[60] we have to remember that the rule of holdover can only apply as an
available option where no express or implied legislative intent to the contrary
exists; it cannot apply where such contrary intent is evident.[61]
Congress, in passing RA No. 10153, made it explicitly clear that it had the
intention of suppressing the holdover rule that prevailed under RA No. 9054
by completely removing this provision. The deletion is a policy decision that is
wholly within the discretion of Congress to make in the exercise of its plenary
legislative powers; this Court cannot pass upon questions of wisdom, justice
or expediency of legislation,[62] except where an attendant unconstitutionality
or grave abuse of discretion results.
C. The COMELEC has no authority to order special elections
Another option proposed by the petitioner in G.R. No. 197282 is for this Court
to compel COMELEC to immediately conduct special elections pursuant to
Section 5 and 6 of Batas Pambansa Bilang (BP) 881.
The power to fix the date of elections is essentially legislative in nature, as
evident from, and exemplified by, the following provisions of the Constitution:
Section 8, Article VI, applicable to the legislature, provides:
Section 8. Unless otherwise provided by law, the regular election of the
Senators and the Members of the House of Representatives shall be held on
the second Monday of May. [Emphasis ours]
Section 4(3), Article VII, with the same tenor but applicable solely to the
President and Vice-President, states:
xxxx
Section 4. xxx Unless otherwise provided by law, the regular election for
President and Vice-President shall be held on the second Monday of May.
[Emphasis ours]
while Section 3, Article X, on local government, provides:
Section 3. The Congress shall enact a local government code which shall
provide for xxx the qualifications, election, appointment and removal, term,
salaries, powers and functions and duties of local officials[.] [Emphases ours]
These provisions support the conclusion that no elections may be held on any
other date for the positions of President, Vice President, Members of Congress
and local officials, except when so provided by another Act of Congress, or
upon orders of a body or officer to whom Congress may have delegated either
the power or the authority to ascertain or fill in the details in the execution of
that power.[63]
Notably, Congress has acted on the ARMM elections by postponing the
scheduled August 2011 elections and setting another date May 13, 2011 for
regional elections synchronized with the presidential, congressional and other
local elections. By so doing, Congress itself has made a policy decision in the
exercise of its legislative wisdom that it shall not call special elections as an
adjustment measure in synchronizing the ARMM elections with the other
elections.
After Congress has so acted, neither the Executive nor the Judiciary can act
to the contrary by ordering special elections instead at the call of the
COMELEC. This Court, particularly, cannot make this call without thereby
supplanting the legislative decision and effectively legislating. To be sure, the
Court is not without the power to declare an act of Congress null and void for
being unconstitutional or for having been exercised in grave abuse of
discretion.[64] But our power rests on very narrow ground and is merely to
annul a contravening act of Congress; it is not to supplant the decision of
Congress nor to mandate what Congress itself should have done in the
exercise of its legislative powers. Thus, contrary to what the petition in G.R.
No. 197282 urges, we cannot compel COMELEC to call for special elections.
Furthermore, we have to bear in mind that the constitutional power of the
COMELEC, in contrast with the power of Congress to call for, and to set the
date of, elections, is limited to enforcing and administering all laws and
regulations relative to the conduct of an election.[65] Statutorily, COMELEC
has no power to call for the holding of special elections unless pursuant to a
specific statutory grant. True, Congress did grant, via Sections 5 and 6 of BP
881, COMELEC with the power to postpone elections to another date.
However, this power is limited to, and can only be exercised within, the specific
terms and circumstances provided for in the law. We quote:
Section 5. Postponement of election. - When for any serious cause such as
violence, terrorism, loss or destruction of election paraphernalia or records,
force majeure, and other analogous causes of such a nature that the holding
of a free, orderly and honest election should become impossible in any political
subdivision, the Commission, motu proprio or upon a verified petition by any
interested party, and after due notice and hearing, whereby all interested
parties are afforded equal opportunity to be heard, shall postpone the election
therein to a date which should be reasonably close to the date of the election
not held, suspended or which resulted in a failure to elect but not later than
thirty days after the cessation of the cause for such postponement or
suspension of the election or failure to elect.
Section 6. Failure of election. - If, on account of force majeure, violence,
terrorism, fraud, or other analogous causes the election in any polling place
has not been held on the date fixed, or had been suspended before the hour
fixed by law for the closing of the voting, or after the voting and during the
preparation and the transmission of the election returns or in the custody or
canvass thereof, such election results in a failure to elect, and in any of such
cases the failure or suspension of election would affect the result of the
election, the Commission shall, on the basis of a verified petition by any
interested party and after due notice and hearing, call for the holding or
continuation of the election not held, suspended or which resulted in a failure
to elect on a date reasonably close to the date of the election not held,
suspended or which resulted in a failure to elect but not later than thirty days
after the cessation of the cause of such postponement or suspension of the
election or failure to elect. [Emphasis ours]
A close reading of Section 5 of BP 881 reveals that it is meant to address
instances where elections have already been scheduled to take place but have
to be postponed because of (a) violence, (b) terrorism, (c) loss or destruction
of election paraphernalia or records, (d) force majeure, and (e) other
analogous causes of such a nature that the holding of a free, orderly and
honest election should become impossible in any political subdivision. Under
the principle of ejusdem generis, the term analogous causes will be restricted
to those unforeseen or unexpected events that prevent the holding of the
scheduled elections. These analogous causes are further defined by the
phrase of such nature that the holding of a free, orderly and honest election
should become impossible.
Similarly, Section 6 of BP 881 applies only to those situations where elections
have already been scheduled but do not take place because of (a) force
majeure, (b) violence, (c) terrorism, (d) fraud, or (e) other analogous causes
the election in any polling place has not been held on the date fixed, or had
been suspended before the hour fixed by law for the closing of the voting, or
after the voting and during the preparation and the transmission of the election
returns or in the custody or canvass thereof, such election results in a failure
to elect. As in Section 5 of BP 881, Section 6 addresses instances where the
elections do not occur or had to be suspended because of unexpected and
unforeseen circumstances.
In the present case, the postponement of the ARMM elections is by law i.e.,
by congressional policy and is pursuant to the constitutional mandate of
synchronization of national and local elections. By no stretch of the imagination
can these reasons be given the same character as the circumstances
contemplated by Section 5 or Section 6 of BP 881, which all pertain to
extralegal causes that obstruct the holding of elections. Courts, to be sure,
cannot enlarge the scope of a statute under the guise of interpretation, nor
include situations not provided nor intended by the lawmakers.[66] Clearly,
neither Section 5 nor Section 6 of BP 881 can apply to the present case and
this Court has absolutely no legal basis to compel the COMELEC to hold
special elections.
D. The Court has no power to shorten the terms of elective officials
Even assuming that it is legally permissible for the Court to compel the
COMELEC to hold special elections, no legal basis likewise exists to rule that
the newly elected ARMM officials shall hold office only until the ARMM officials
elected in the synchronized elections shall have assumed office.
In the first place, the Court is not empowered to adjust the terms of elective
officials. Based on the Constitution, the power to fix the term of office of elective
officials, which can be exercised only in the case of barangay officials,[67] is
specifically given to Congress. Even Congress itself may be denied such
power, as shown when the Constitution shortened the terms of twelve
Senators obtaining the least votes,[68] and extended the terms of the
President and the Vice-President[69] in order to synchronize elections;
Congress was not granted this same power. The settled rule is that terms fixed
by the Constitution cannot be changed by mere statute.[70] More particularly,
not even Congress and certainly not this Court, has the authority to fix the
terms of elective local officials in the ARMM for less, or more, than the
constitutionally mandated three years[71] as this tinkering would directly
contravene Section 8, Article X of the Constitution as we ruled in Osmena.
Thus, in the same way that the term of elective ARMM officials cannot be
extended through a holdover, the term cannot be shortened by putting an
expiration date earlier than the three (3) years that the Constitution itself
commands. This is what will happen a term of less than two years if a call for
special elections shall prevail. In sum, while synchronization is achieved, the
result is at the cost of a violation of an express provision of the Constitution.
Neither we nor Congress can opt to shorten the tenure of those officials to be
elected in the ARMM elections instead of acting on their term (where the term
means the time during which the officer may claim to hold office as of right and
fixes the interval after which the several incumbents shall succeed one
another, while the tenure represents the term during which the incumbent
actually holds the office).[72] As with the fixing of the elective term, neither
Congress nor the Court has any legal basis to shorten the tenure of elective
ARMM officials. They would commit an unconstitutional act and gravely abuse
their discretion if they do so.
E. The Presidents Power to Appoint OICs
The above considerations leave only Congress chosen interim measure RA
No. 10153 and the appointment by the President of OICs to govern the ARMM
during the pre-synchronization period pursuant to Sections 3, 4 and 5 of this
law as the only measure that Congress can make. This choice itself, however,
should be examined for any attendant constitutional infirmity.
At the outset, the power to appoint is essentially executive in nature, and the
limitations on or qualifications to the exercise of this power should be strictly
construed; these limitations or qualifications must be clearly stated in order to
be recognized.[73] The appointing power is embodied in Section 16, Article VII
of the Constitution, which states:
Section 16. The President shall nominate and, with the consent of the
Commission on Appointments, appoint the heads of the executive
departments, ambassadors, other public ministers and consuls or officers of
the armed forces from the rank of colonel or naval captain, and other officers
whose appointments are vested in him in this Constitution. He shall also
appoint all other officers of the Government whose appointments are not
otherwise provided for by law, and those whom he may be authorized by law
to appoint. The Congress may, by law, vest the appointment of other officers
lower in rank in the President alone, in the courts, or in the heads of
departments, agencies, commissions, or boards. [emphasis ours]
This provision classifies into four groups the officers that the President can
appoint. These are:
First, the heads of the executive departments; ambassadors; other public
ministers and consuls; officers of the Armed Forces of the Philippines, from
the rank of colonel or naval captain; and other officers whose appointments
are vested in the President in this Constitution;
Second, all other officers of the government whose appointments are not
otherwise provided for by law;
Third, those whom the President may be authorized by law to appoint; and
Fourth, officers lower in rank whose appointments the Congress may by law
vest in the President alone.[74]
Since the Presidents authority to appoint OICs emanates from RA No. 10153,
it falls under the third group of officials that the President can appoint pursuant
to Section 16, Article VII of the Constitution. Thus, the assailed law facially
rests on clear constitutional basis.
If at all, the gravest challenge posed by the petitions to the authority to appoint
OICs under Section 3 of RA No. 10153 is the assertion that the Constitution
requires that the ARMM executive and legislative officials to be elective and
representative of the constituent political units. This requirement indeed is an
express limitation whose non-observance in the assailed law leaves the
appointment of OICs constitutionally defective.
After fully examining the issue, we hold that this alleged constitutional problem
is more apparent than real and becomes very real only if RA No. 10153 were
to be mistakenly read as a law that changes the elective and representative
character of ARMM positions. RA No. 10153, however, does not in any way
amend what the organic law of the ARMM (RA No. 9054) sets outs in terms of
structure of governance. What RA No. 10153 in fact only does is to appoint
officers-in-charge for the Office of the Regional Governor, Regional Vice
Governor and Members of the Regional Legislative Assembly who shall
perform the functions pertaining to the said offices until the officials duly
elected in the May 2013 elections shall have qualified and assumed office.
This power is far different from appointing elective ARMM officials for the
abbreviated term ending on the assumption to office of the officials elected in
the May 2013 elections.
As we have already established in our discussion of the supermajority and
plebiscite requirements, the legal reality is that RA No. 10153 did not amend
RA No. 9054. RA No. 10153, in fact, provides only for synchronization of
elections and for the interim measures that must in the meanwhile prevail. And
this is how RA No. 10153 should be read in the manner it was written and
based on its unambiguous facial terms.[75] Aside from its order for
synchronization, it is purely and simply an interim measure responding to the
adjustments that the synchronization requires.
Thus, the appropriate question to ask is whether the interim measure is an
unreasonable move for Congress to adopt, given the legal situation that the
synchronization unavoidably brought with it. In more concrete terms and based
on the above considerations, given the plain unconstitutionality of providing for
a holdover and the unavailability of constitutional possibilities for lengthening
or shortening the term of the elected ARMM officials, is the choice of the
Presidents power to appoint for a fixed and specific period as an interim
measure, and as allowed under Section 16, Article VII of the Constitution an
unconstitutional or unreasonable choice for Congress to make?
Admittedly, the grant of the power to the President under other situations or
where the power of appointment would extend beyond the adjustment period
for synchronization would be to foster a government that is not democratic and
republican. For then, the peoples right to choose the leaders to govern them
may be said to be systemically withdrawn to the point of fostering an
undemocratic regime. This is the grant that would frontally breach the elective
and representative governance requirement of Section 18, Article X of the
Constitution.
But this conclusion would not be true under the very limited circumstances
contemplated in RA No. 10153 where the period is fixed and, more importantly,
the terms of governance both under Section 18, Article X of the Constitution
and RA No. 9054 will not systemically be touched nor affected at all. To repeat
what has previously been said, RA No. 9054 will govern unchanged and
continuously, with full effect in accordance with the Constitution, save only for
the interim and temporary measures that synchronization of elections requires.
Viewed from another perspective, synchronization will temporarily disrupt the
election process in a local community, the ARMM, as well as the communitys
choice of leaders, but this will take place under a situation of necessity and as
an interim measure in the manner that interim measures have been adopted
and used in the creation of local government units[76] and the adjustments of
sub-provinces to the status of provinces.[77] These measures, too, are used
in light of the wider national demand for the synchronization of elections
(considered vis--vis the regional interests involved). The adoption of these
measures, in other words, is no different from the exercise by Congress of the
inherent police power of the State, where one of the essential tests is the
reasonableness of the interim measure taken in light of the given
circumstances.
Furthermore, the representative character of the chosen leaders need not
necessarily be affected by the appointment of OICs as this requirement is
really a function of the appointment process; only the elective aspect shall be
supplanted by the appointment of OICs. In this regard, RA No. 10153
significantly seeks to address concerns arising from the appointments by
providing, under Sections 3, 4 and 5 of the assailed law, concrete terms in the
Appointment of OIC, the Manner and Procedure of Appointing OICs, and their
Qualifications.
Based on these considerations, we hold that RA No. 10153 viewed in its proper
context is a law that is not violative of the Constitution (specifically, its
autonomy provisions), and one that is reasonable as well under the
circumstances.
VI. Other Constitutional Concerns
Outside of the above concerns, it has been argued during the oral arguments
that upholding the constitutionality of RA No. 10153 would set a dangerous
precedent of giving the President the power to cancel elections anywhere in
the country, thus allowing him to replace elective officials with OICs.
This claim apparently misunderstands that an across-the-board cancellation of
elections is a matter for Congress, not for the President, to address. It is a
power that falls within the powers of Congress in the exercise of its legislative
powers. Even Congress, as discussed above, is limited in what it can
legislatively undertake with respect to elections.
If RA No. 10153 cancelled the regular August 2011 elections, it was for a very
specific and limited purpose the synchronization of elections. It was a
temporary means to a lasting end the synchronization of elections. Thus, RA
No. 10153 and the support that the Court gives this legislation are likewise
clear and specific, and cannot be transferred or applied to any other cause for
the cancellation of elections. Any other localized cancellation of elections and
call for special elections can occur only in accordance with the power already
delegated by Congress to the COMELEC, as above discussed.
Given that the incumbent ARMM elective officials cannot continue to act in a
holdover capacity upon the expiration of their terms, and this Court cannot
compel the COMELEC to conduct special elections, the Court now has to deal
with the dilemma of a vacuum in governance in the ARMM.
To emphasize the dire situation a vacuum brings, it should not be forgotten
that a period of 21 months or close to 2 years intervenes from the time that the
incumbent ARMM elective officials terms expired and the time the new ARMM
elective officials begin their terms in 2013. As the lessons of our Mindanao
history past and current teach us, many developments, some of them critical
and adverse, can transpire in the countrys Muslim areas in this span of time in
the way they transpired in the past.[78] Thus, it would be reckless to assume
that the presence of an acting ARMM Governor, an acting Vice-Governor and
a fully functioning Regional Legislative Assembly can be done away with even
temporarily. To our mind, the appointment of OICs under the present
circumstances is an absolute necessity.
Significantly, the grant to the President of the power to appoint OICs to
undertake the functions of the elective members of the Regional Legislative
Assembly is neither novel nor innovative. We hark back to our earlier
pronouncement in Menzon v. Petilla, etc., et al.:[79]
It may be noted that under Commonwealth Act No. 588 and the Revised
Administrative Code of 1987, the President is empowered to make temporary
appointments in certain public offices, in case of any vacancy that may occur.
Albeit both laws deal only with the filling of vacancies in appointive positions.
However, in the absence of any contrary provision in the Local Government
Code and in the best interest of public service, we see no cogent reason why
the procedure thus outlined by the two laws may not be similarly applied in the
present case. The respondents contend that the provincial board is the correct
appointing power. This argument has no merit. As between the President who
has supervision over local governments as provided by law and the members
of the board who are junior to the vice-governor, we have no problem ruling in
favor of the President, until the law provides otherwise.
A vacancy creates an anomalous situation and finds no approbation under the
law for it deprives the constituents of their right of representation and
governance in their own local government.
In a republican form of government, the majority rules through their chosen
few, and if one of them is incapacitated or absent, etc., the management of
governmental affairs is, to that extent, may be hampered. Necessarily, there
will be a consequent delay in the delivery of basic services to the people of
Leyte if the Governor or the Vice-Governor is missing.[80](Emphasis ours.)
As in Menzon, leaving the positions of ARMM Governor, Vice Governor, and
members of the Regional Legislative Assembly vacant for 21 months, or
almost 2 years, would clearly cause disruptions and delays in the delivery of
basic services to the people, in the proper management of the affairs of the
regional government, and in responding to critical developments that may
arise. When viewed in this context, allowing the President in the exercise of
his constitutionally-recognized appointment power to appoint OICs is, in our
judgment, a reasonable measure to take.
B. Autonomy in the ARMM
It is further argued that while synchronization may be constitutionally
mandated, it cannot be used to defeat or to impede the autonomy that the
Constitution granted to the ARMM. Phrased in this manner, one would
presume that there exists a conflict between two recognized Constitutional
mandates synchronization and regional autonomy such that it is necessary to
choose one over the other.
We find this to be an erroneous approach that violates a basic principle in
constitutional construction ut magis valeat quam pereat: that the Constitution
is to be interpreted as a whole,[81] and one mandate should not be given
importance over the other except where the primacy of one over the other is
clear.[82] We refer to the Courts declaration in Ang-Angco v. Castillo, et al.,[83]
thus:
A provision of the constitution should not be construed in isolation from the
rest. Rather, the constitution must be interpreted as a whole, and apparently,
conflicting provisions should be reconciled and harmonized in a manner that
may give to all of them full force and effect. [Emphasis supplied.]
Synchronization is an interest that is as constitutionally entrenched as regional
autonomy. They are interests that this Court should reconcile and give effect
to, in the way that Congress did in RA No. 10153 which provides the measure
to transit to synchronized regional elections with the least disturbance on the
interests that must be respected. Particularly, regional autonomy will be
respected instead of being sidelined, as the law does not in any way alter,
change or modify its governing features, except in a very temporary manner
and only as necessitated by the attendant circumstances.
Elsewhere, it has also been argued that the ARMM elections should not be
synchronized with the national and local elections in order to maintain the
autonomy of the ARMM and insulate its own electoral processes from the
rough and tumble of nationwide and local elections. This argument leaves us
far from convinced of its merits.
As heretofore mentioned and discussed, while autonomous regions are
granted political autonomy, the framers of the Constitution never equated
autonomy with independence. The ARMM as a regional entity thus continues
to operate within the larger framework of the State and is still subject to the
national policies set by the national government, save only for those specific
areas reserved by the Constitution for regional autonomous determination. As
reflected during the constitutional deliberations of the provisions on
autonomous regions:
Mr. Bennagen. xxx We do not see here a complete separation from the central
government, but rather an efficient working relationship between the
autonomous region and the central government. We see this as an effective
partnership, not a separation.
Mr. Romulo. Therefore, complete autonomy is not really thought of as
complete independence.
Mr. Ople. We define it as a measure of self-government within the larger
political framework of the nation.[84] [Emphasis supplied.]
This exchange of course is fully and expressly reflected in the above-quoted
Section 17, Article X of the Constitution, and by the express reservation under
Section 1 of the same Article that autonomy shall be within the framework of
this Constitution and the national sovereignty as well as the territorial integrity
of the Republic of the Philippines.
Interestingly, the framers of the Constitution initially proposed to remove
Section 17 of Article X, believing it to be unnecessary in light of the
enumeration of powers granted to autonomous regions in Section 20, Article
X of the Constitution. Upon further reflection, the framers decided to reinstate
the provision in order to make it clear, once and for all, that these are the limits
of the powers of the autonomous government. Those not enumerated are
actually to be exercised by the national government[.][85] Of note is the Courts
pronouncement in Pimentel, Jr. v. Hon. Aguirre[86] which we quote:
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. [Emphasis ours.]
In other words, the autonomy granted to the ARMM cannot be invoked to
defeat national policies and concerns. Since the synchronization of elections
is not just a regional concern but a national one, the ARMM is subject to it; the
regional autonomy granted to the ARMM cannot be used to exempt the region
from having to act in accordance with a national policy mandated by no less
than the Constitution.
Conclusion
Congress acted within its powers and pursuant to a constitutional mandate the
synchronization of national and local elections when it enacted RA No. 10153.
This Court cannot question the manner by which Congress undertook this task;
the Judiciary does not and cannot pass upon questions of wisdom, justice or
expediency of legislation.[87] As judges, we can only interpret and apply the
law and, despite our doubts about its wisdom, cannot repeal or amend it.[88]
Nor can the Court presume to dictate the means by which Congress should
address what is essentially a legislative problem. It is not within the Courts
power to enlarge or abridge laws; otherwise, the Court will be guilty of usurping
the exclusive prerogative of Congress.[89] The petitioners, in asking this Court
to compel COMELEC to hold special elections despite its lack of authority to SO ORDERED.
do so, are essentially asking us to venture into the realm of judicial legislation,
which is abhorrent to one of the most basic principles of a republican and 28 FEB 2012 Resolution
democratic government the separation of powers.
DATU MICHAEL ABAS KIDA,
The petitioners allege, too, that we should act because Congress acted with in his personal capacity, and in representation of MAGUINDANAO
grave abuse of discretion in enacting RA No. 10153. Grave abuse of discretion FEDERATION OF AUTONOMOUS IRRIGATORS ASSOCIATION, INC.,
is such capricious and whimsical exercise of judgment that is patent and gross HADJI MUHMINA J. USMAN, JOHN ANTHONY L. LIM, JAMILON T. ODIN,
as to amount to an evasion of a positive duty or to a virtual refusal to perform ASRIN TIMBOL JAIYARI, MUJIB M. KALANG, ALIH AL-SAIDI J. SAPI-E,
a duty enjoined by law or to act at all in contemplation of the law as where the KESSAR DAMSIE ABDIL, and BASSAM ALUH SAUPI,
power is exercised in an arbitrary and despotic manner by reason of passion Petitioners,
and hostility.[90] - versus -

We find that Congress, in passing RA No. 10153, acted strictly within its SENATE OF THE PHILIPPINES, represented by its President JUAN PONCE
constitutional mandate. Given an array of choices, it acted within due ENRILE, HOUSE OF REPRESENTATIVES, thru SPEAKER FELICIANO
constitutional bounds and with marked reasonableness in light of the BELMONTE, COMMISSION ON ELECTIONS, thru its Chairman, SIXTO
necessary adjustments that synchronization demands. Congress, therefore, BRILLANTES, JR., PAQUITO OCHOA, JR., Office of the President Executive
cannot be accused of any evasion of a positive duty or of a refusal to perform Secretary, FLORENCIO ABAD, JR., Secretary of Budget, and ROBERTO
its duty. We thus find no reason to accord merit to the petitioners claims of TAN, Treasurer of the Philippines,
grave abuse of discretion. Respondents.
X----------------------X
On the general claim that RA No. 10153 is unconstitutional, we can only BASARI D. MAPUPUNO,
reiterate the established rule that every statute is presumed valid.[91] Petitioner,
Congress, thus, has in its favor the presumption of constitutionality of its acts, - versus -
and the party challenging the validity of a statute has the onerous task of
rebutting this presumption.[92] Any reasonable doubt about the validity of the SIXTO BRILLANTES, in his capacity as Chairman of the Commission on
law should be resolved in favor of its constitutionality.[93] As this Court Elections, FLORENCIO ABAD, JR. in his capacity as Secretary of the
declared in Garcia v. Executive Secretary:[94] Department of Budget and Management, PAQUITO OCHOA, JR., in his
capacity as Executive Secretary, JUAN PONCE ENRILE, in his capacity as
The policy of the courts is to avoid ruling on constitutional questions and to Senate President, and FELICIANO BELMONTE, in his capacity as Speaker of
presume that the acts of the political departments are valid in the absence of the House of Representatives,
a clear and unmistakable showing to the contrary. To doubt is to sustain. This Respondents.
presumption is based on the doctrine of separation of powers which enjoins X - - - - - - - - - - - - - - - - - - - - - - X REP. EDCEL C. LAGMAN,
upon each department a becoming respect for the acts of the other Petitioner,
departments. The theory is that as the joint act of Congress and the President - versus -
of the Philippines, a law has been carefully studied and determined to be in
accordance with the fundamental law before it was finally enacted.[95] PAQUITO N. OCHOA, JR., in his capacity as the Executive Secretary, and the
[Emphasis ours.] COMMISSION ON ELECTIONS,
Respondents.
Given the failure of the petitioners to rebut the presumption of constitutionality X - - - - - - - - - - - - - - - - - - - - - - X ALMARIM CENTI TILLAH, DATU
in favor of RA No. 10153, we must support and confirm its validity. CASAN CONDING CANA, and PARTIDO DEMOKRATIKO PILIPINO LAKAS
WHEREFORE, premises considered, we DISMISS the consolidated petitions NG BAYAN (PDP-LABAN),
assailing the validity of RA No. 10153 for lack of merit, and UPHOLD the Petitioners,
constitutionality of this law. We likewise LIFT the temporary restraining order - versus -
we issued in our Resolution of September 13, 2011. No costs.
THE COMMISSION ON ELECTIONS, through its Chairman, SIXTO G.R. No. 196305
BRILLANTES, JR., HON. PAQUITO N. OCHOA, JR., in his capacity as G.R. No. 197221
Executive Secretary, HON. FLORENCIO B. ABAD, JR., in his capacity as G.R. No. 197280
Secretary of the Department of Budget and Management, and HON. G.R. No. 197282
ROBERTO B. TAN, in his capacity as Treasurer of the Philippines, G.R. No. 197392
Respondents. G.R. No. 197454
X - - - - - - - - - - - - - - - - - - - - - - X ATTY. ROMULO B. MACALINTAL,
Petitioner, Present:
- versus - CORONA, C.J.,
CARPIO,
COMMISSION ON ELECTIONS and THE OFFICE OF THE PRESIDENT, VELASCO, JR.,
through EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., LEONARDO-DE CASTRO,
Respondents. BRION,
X - - - - - - - - - - - - - - - - - - - - - - X LOUIS BAROK C. BIRAOGO, PERALTA,
Petitioner, BERSAMIN,
- versus - DEL CASTILLO,*
ABAD,
THE COMMISSION ON ELECTIONS and EXECUTIVE SECRETARY VILLARAMA, JR.,
PAQUITO N. OCHOA, JR., PEREZ,
Respondents. MENDOZA,
X - - - - - - - - - - - - - - - - - - - - - - X JACINTO V. PARAS, SERENO,**
Petitioner, REYES, and
PERLAS-BERNABE, JJ.

Promulgated:

- versus - February 28, 2012

x-----------------------------------------------------------------------------------------x

RESOLUTION

BRION, J.:
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., and the
COMMISSION ON ELECTIONS,
Respondents. We resolve: (a) the motion for reconsideration filed by petitioners Datu Michael
x-----------------------------------------x Abas Kida, et al. in G.R. No. 196271; (b) the motion for reconsideration filed
MINORITY RIGHTS FORUM, PHILIPPINES, INC., by petitioner Rep. Edcel Lagman in G.R. No. 197221; (c) the ex abundante ad
Respondents-Intervenor. cautelam motion for reconsideration filed by petitioner Basari Mapupuno in
G.R. No. 196305; (d) the motion for reconsideration filed by petitioner Atty.
Romulo Macalintal in G.R. No. 197282; (e) the motion for reconsideration filed
by petitioners Almarim Centi Tillah, Datu Casan Conding Cana and Partido
Demokratiko Pilipino Lakas ng Bayan in G.R. No. 197280; (f) the manifestation
G.R. No. 196271 and motion filed by petitioners Almarim Centi Tillah, et al. in G.R. No. 197280;
and (g) the very urgent motion to issue clarificatory resolution that the
temporary restraining order (TRO) is still existing and effective.

These motions assail our Decision dated October 18, 2011, where we upheld
the constitutionality of Republic Act (RA) No. 10153. Pursuant to the
constitutional mandate of synchronization, RA No. 10153 postponed the
regional elections in the Autonomous Region in Muslim Mindanao (ARMM)
(which were scheduled to be held on the second Monday of August 2011) to
the second Monday of May 2013 and recognized the Presidents power to
appoint officers-in-charge (OICs) to temporarily assume these positions upon
the expiration of the terms of the elected officials.
The Motions for Reconsideration
The petitioners in G.R. No. 196271 raise the following grounds in support of
their motion:
I. THE HONORABLE COURT ERRED IN CONCLUDING THAT
THE ARMM ELECTIONS ARE LOCAL ELECTIONS, CONSIDERING THAT
THE CONSTITUTION GIVES THE ARMM A SPECIAL STATUS AND IS
SEPARATE AND DISTINCT FROM ORDINARY LOCAL GOVERNMENT
UNITS.
II. R.A. 10153 AND R.A. 9333 AMEND THE ORGANIC ACT.
III. THE SUPERMAJORITY PROVISIONS OF THE ORGANIC ACT
(R.A. 9054) ARE NOT IRREPEALABLE LAWS.
IV. SECTION 3, ARTICLE XVII OF R.A. 9054 DOES NOT VIOLATE
SECTION 18, ARTICLE X OF THE CONSTITUTION.
V. BALANCE OF INTERESTS TILT IN FAVOR OF THE DEMOCRATIC
PRINCIPLE[.][1]
The petitioner in G.R. No. 197221 raises similar grounds, arguing that:
I. THE ELECTIVE REGIONAL EXECUTIVE AND LEGISLATIVE
OFFICIALS OF ARMM CANNOT BE CONSIDERED AS OR EQUATED WITH
THE TRADITIONAL LOCAL GOVERNMENT OFFICIALS IN THE LOCAL
GOVERNMENT UNITS (LGUs) BECAUSE (A) THERE IS NO EXPLICIT
CONSTITUTIONAL PROVISION ON SUCH PARITY; AND (B) THE ARMM IS
MORE SUPERIOR THAN LGUs IN STRUCTURE, POWERS AND
AUTONOMY, AND CONSEQUENTLY IS A CLASS OF ITS OWN APART
FROM TRADITIONAL LGUs.
II. THE UNMISTAKABLE AND UNEQUIVOCAL CONSTITUTIONAL
MANDATE FOR AN ELECTIVE AND REPRESENTATIVE EXECUTIVE
DEPARTMENT AND LEGISLATIVE ASSEMBLY IN ARMM INDUBITABLY
PRECLUDES THE APPOINTMENT BY THE PRESIDENT OF OFFICERS-IN-
CHARGE (OICs), ALBEIT MOMENTARY OR TEMPORARY, FOR THE
POSITIONS OF ARMM GOVERNOR, VICE GOVERNOR AND MEMBERS
OF THE REGIONAL ASSEMBLY.
III. THE PRESIDENTS APPOINTING POWER IS LIMITED TO
APPOINTIVE OFFICIALS AND DOES NOT EXTEND TO ELECTIVE
OFFICIALS EVEN AS THE PRESIDENT IS ONLY VESTED WITH
SUPERVISORY POWERS OVER THE ARMM, THEREBY NEGATING THE
AWESOME POWER TO APPOINT AND REMOVE OICs OCCUPYING
ELECTIVE POSITIONS.
IV. THE CONSTITUTION DOES NOT PROSCRIBE THE HOLDOVER
OF ARMM ELECTED OFFICIALS PENDING THE ELECTION AND
QUALIFICATION OF THEIR SUCCESSORS.
V. THE RULING IN OSMENA DOES NOT APPLY TO ARMM
ELECTED OFFICIALS WHOSE TERMS OF OFFICE ARE NOT PROVIDED
FOR BY THE CONSTITUTION BUT PRESCRIBED BY THE ORGANIC
ACTS.
VI. THE REQUIREMENT OF A SUPERMAJORITY OF VOTES IN THE
HOUSE OF REPRESENTATIVES AND THE SENATE FOR THE VALIDITY
OF A SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC
ACTS DOES NOT IMPOSE AN IRREPEALABLE LAW.
VII. THE REQUIREMENT OF A PLEBISCITE FOR THE EFFECTIVITY
OF A SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC
ACTS DOES NOT UNDULY EXPAND THE PLEBISCITE REQUIREMENT OF
THE CONSTITUTION.
VIII. SYNCHRONIZATION OF THE ARMM ELECTION WITH THE
NATIONAL AND LOCAL ELECTIONS IS NOT MANDATED BY THE
CONSTITUTION.
IX. THE COMELEC HAS THE AUTHORITY TO HOLD AND CONDUCT
SPECIAL ELECTIONS IN ARMM, AND THE ENACTMENT OF AN
IMPROVIDENT AND UNCONSTITUTIONAL STATUTE IS AN ANALOGOUS
CAUSE WARRANTING COMELECS HOLDING OF SPECIAL
ELECTIONS.[2] (italics supplied)
The petitioner in G.R. No. 196305 further asserts that:
I. BEFORE THE COURT MAY CONSTRUE OR INTERPRET A
STATUTE, IT IS A CONDITION SINE QUA NON THAT THERE BE DOUBT
OR AMBIGUITY IN ITS LANGUAGE.
THE TRANSITORY PROVISIONS HOWEVER ARE CLEAR AND
UNAMBIGUOUS: THEY REFER TO THE 1992 ELECTIONS AND TURN-
OVER OF ELECTIVE OFFICIALS.
IN THUS RECOGNIZING A SUPPOSED INTENT OF THE FRAMERS, AND
APPLYING THE SAME TO ELECTIONS 20 YEARS AFTER, THE
HONORABLE SUPREME COURT MAY HAVE VIOLATED THE FOREMOST
RULE IN STATUTORY CONSTRUCTION.
xxxx
II. THE HONORABLE COURT SHOULD HAVE CONSIDERED THAT
RA 9054, AN ORGANIC ACT, WAS COMPLETE IN ITSELF. HENCE, RA
10153 SHOULD BE CONSIDERED TO HAVE BEEN ENACTED PRECISELY
TO AMEND RA 9054.
xxxx
III. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS
ERROR IN DECLARING THE 2/3 VOTING REQUIREMENT SET FORTH IN
RA 9054 AS UNCONSTITUTIONAL.
xxxx
IV. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS
ERROR IN HOLDING THAT A PLEBISCITE IS NOT NECESSARY IN
AMENDING THE ORGANIC ACT.
xxxx
V. THE HONORABLE COURT COMMITTED A SERIOUS ERROR
IN DECLARING THE HOLD-OVER OF ARMM ELECTIVE OFFICIALS
UNCONSTITUTIONAL.
xxxx
VI. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN
UPHOLDING THE APPOINTMENT OF OFFICERS-IN-CHARGE.[3] (italics
and underscoring supplied)
The petitioner in G.R. No. 197282 contends that:
A.
ASSUMING WITHOUT CONCEDING THAT THE APPOINTMENT OF OICs
FOR THE REGIONAL GOVERNMENT OF THE ARMM IS NOT
UNCONSTITUTIONAL TO BEGIN WITH, SUCH APPOINTMENT OF OIC
REGIONAL OFFICIALS WILL CREATE A FUNDAMENTAL CHANGE IN THE
BASIC STRUCTURE OF THE REGIONAL GOVERNMENT SUCH THAT R.A.
NO. 10153 SHOULD HAVE BEEN SUBMITTED TO A PLEBISCITE IN THE
ARMM FOR APPROVAL BY ITS PEOPLE, WHICH PLEBISCITE
REQUIREMENT CANNOT BE CIRCUMVENTED BY SIMPLY
CHARACTERIZING THE PROVISIONS OF R.A. NO. 10153 ON
APPOINTMENT OF OICs AS AN INTERIM MEASURE.
B.
THE HONORABLE COURT ERRED IN RULING THAT THE APPOINTMENT
BY THE PRESIDENT OF OICs FOR THE ARMM REGIONAL GOVERNMENT
IS NOT VIOLATIVE OF THE CONSTITUTION.
C.
THE HOLDOVER PRINCIPLE ADOPTED IN R.A. NO. 9054 DOES NOT
VIOLATE THE CONSTITUTION, AND BEFORE THEIR SUCCESSORS ARE
ELECTED IN EITHER AN ELECTION TO BE HELD AT THE SOONEST
POSSIBLE TIME OR IN MAY 2013, THE SAID INCUMBENT ARMM
REGIONAL OFFICIALS MAY VALIDLY CONTINUE FUNCTIONING AS
SUCH IN A HOLDOVER CAPACITY IN ACCORDANCE WITH SECTION 7,
ARTICLE VII OF R.A. NO. 9054.
D.
WITH THE CANCELLATION OF THE AUGUST 2011 ARMM ELECTIONS,
SPECIAL ELECTIONS MUST IMMEDIATELY BE HELD FOR THE ELECTIVE
REGIONAL OFFICIALS OF THE ARMM WHO SHALL SERVE UNTIL THEIR
SUCCESSORS ARE ELECTED IN THE MAY 2013 SYNCHRONIZED
ELECTIONS.[4]
Finally, the petitioners in G.R. No. 197280 argue that:
a) the Constitutional mandate of synchronization does not apply to
the ARMM elections;
b) RA No. 10153 negates the basic principle of republican democracy
which, by constitutional mandate, guides the governance of the Republic;
c) RA No. 10153 amends the Organic Act (RA No. 9054) and, thus,
has to comply with the 2/3 vote from the House of Representatives and the
Senate, voting separately, and be ratified in a plebiscite;
d) if the choice is between elective officials continuing to hold their
offices even after their terms are over and non-elective individuals getting into
the vacant elective positions by appointment as OICs, the holdover option is
the better choice;
e) the President only has the power of supervision over autonomous
regions, which does not include the power to appoint OICs to take the place of
ARMM elective officials; and
f) it would be better to hold the ARMM elections separately from the
national and local elections as this will make it easier for the authorities to
implement election laws.
In essence, the Court is asked to resolve the following questions:
(a) Does the Constitution mandate the synchronization of ARMM
regional elections with national and local elections?
(b) Does RA No. 10153 amend RA No. 9054? If so, does RA No. 10153
have to comply with the supermajority vote and plebiscite requirements?
(c) Is the holdover provision in RA No. 9054 constitutional?
(d) Does the COMELEC have the power to call for special elections in
ARMM?
(e) Does granting the President the power to appoint OICs violate the
elective and representative nature of ARMM regional legislative and executive
offices?
(f) Does the appointment power granted to the President exceed the
Presidents supervisory powers over autonomous regions?
The Courts Ruling
We deny the motions for lack of merit.
Synchronization mandate includes ARMM elections
The Court was unanimous in holding that the Constitution mandates the
synchronization of national and local elections. While the Constitution does not
expressly instruct Congress to synchronize the national and local elections,
the intention can be inferred from the following provisions of the Transitory
Provisions (Article XVIII) of the Constitution, which state:
Section 1. The first elections of Members of the Congress under this
Constitution shall be held on the second Monday of May, 1987.
The first local elections shall be held on a date to be determined by the
President, which may be simultaneous with the election of the Members of the
Congress. It shall include the election of all Members of the city or municipal
councils in the Metropolitan Manila area.
Section 2. The Senators, Members of the House of Representatives, and the
local officials first elected under this Constitution shall serve until noon of June
30, 1992.
Of the Senators elected in the elections in 1992, the first twelve obtaining the
highest number of votes shall serve for six years and the remaining twelve for
three years.
xxxx
Section 5. The six-year term of the incumbent President and Vice-President
elected in the February 7, 1986 election is, for purposes of synchronization of
elections, hereby extended to noon of June 30, 1992.
The first regular elections for the President and Vice-President under this
Constitution shall be held on the second Monday of May, 1992.
To fully appreciate the constitutional intent behind these provisions, we refer
to the discussions of the Constitutional Commission:
MR. MAAMBONG. For purposes of identification, I will now read a section
which we will temporarily indicate as Section 14. It reads: THE SENATORS,
MEMBERS OF THE HOUSE OF REPRESENTATIVES AND THE LOCAL
OFFICIALS ELECTED IN THE FIRST ELECTION SHALL SERVE FOR FIVE
YEARS, TO EXPIRE AT NOON OF JUNE 1992.
This was presented by Commissioner Davide, so may we ask that
Commissioner Davide be recognized.
THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner Davide is
recognized.
MR. DAVIDE. Before going to the proposed amendment, I would only state
that in view of the action taken by the Commission on Section 2 earlier, I am
formulating a new proposal. It will read as follows: THE SENATORS,
MEMBERS OF THE HOUSE OF REPRESENTATIVES AND THE LOCAL
OFFICIALS FIRST ELECTED UNDER THIS CONSTITUTION SHALL SERVE
UNTIL NOON OF JUNE 30, 1992.
I proposed this because of the proposed section of the Article on Transitory
Provisions giving a term to the incumbent President and Vice-President until
1992. Necessarily then, since the term provided by the Commission for
Members of the Lower House and for local officials is three years, if there will
be an election in 1987, the next election for said officers will be in 1990, and it
would be very close to 1992. We could never attain, subsequently, any
synchronization of election which is once every three years.
So under my proposal we will be able to begin actual synchronization in 1992,
and consequently, we should not have a local election or an election for
Members of the Lower House in 1990 for them to be able to complete their
term of three years each. And if we also stagger the Senate, upon the first
election it will result in an election in 1993 for the Senate alone, and there will
be an election for 12 Senators in 1990. But for the remaining 12 who will be
elected in 1987, if their term is for six years, their election will be in 1993. So,
consequently we will have elections in 1990, in 1992 and in 1993. The later
election will be limited to only 12 Senators and of course to the local officials
and the Members of the Lower House. But, definitely, thereafter we can never
have an election once every three years, therefore defeating the very purpose
of the Commission when we adopted the term of six years for the President
and another six years for the Senators with the possibility of staggering with
12 to serve for six years and 12 for three years insofar as the first Senators
are concerned. And so my proposal is the only way to effect the first
synchronized election which would mean, necessarily, a bonus of two years to
the Members of the Lower House and a bonus of two years to the local elective
officials.
THE PRESIDING OFFICER (Mr. Rodrigo). What does the committee say?
MR. DE CASTRO. Mr. Presiding Officer.
THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner de Castro is
recognized.
MR. DE CASTRO. Thank you.
During the discussion on the legislative and the synchronization of elections, I
was the one who proposed that in order to synchronize the elections every
three years, which the body approved the first national and local officials to be
elected in 1987 shall continue in office for five years, the same thing the
Honorable Davide is now proposing. That means they will all serve until 1992,
assuming that the term of the President will be for six years and continue
beginning in 1986. So from 1992, we will again have national, local and
presidential elections. This time, in 1992, the President shall have a term until
1998 and the first 12 Senators will serve until 1998, while the next 12 shall
serve until 1995, and then the local officials elected in 1992 will serve until
1995. From then on, we shall have an election every three years.
So, I will say that the proposition of Commissioner Davide is in order, if we
have to synchronize our elections every three years which was already
approved by the body.
Thank you, Mr. Presiding Officer.
xxxx
MR. GUINGONA. What will be synchronized, therefore, is the election of the
incumbent President and Vice-President in 1992.
MR. DAVIDE. Yes.
MR. GUINGONA. Not the reverse. Will the committee not synchronize the
election of the Senators and local officials with the election of the President?
MR. DAVIDE. It works both ways, Mr. Presiding Officer. The attempt here is
on the assumption that the provision of the Transitory Provisions on the term
of the incumbent President and Vice-President would really end in 1992.
MR. GUINGONA. Yes.
MR. DAVIDE. In other words, there will be a single election in 1992 for all, from
the President up to the municipal officials.[5] (emphases and underscoring
ours)
The framers of the Constitution could not have expressed their objective more
clearly there was to be a single election in 1992 for all elective officials from
the President down to the municipal officials. Significantly, the framers were
even willing to temporarily lengthen or shorten the terms of elective officials in
order to meet this objective, highlighting the importance of this constitutional
mandate.
We came to the same conclusion in Osmea v. Commission on Elections,[6]
where we unequivocally stated that the Constitution has mandated
synchronized national and local elections."[7] Despite the length and verbosity
of their motions, the petitioners have failed to convince us to deviate from this
established ruling.
Neither do we find any merit in the petitioners contention that the ARMM
elections are not covered by the constitutional mandate of synchronization
because the ARMM elections were not specifically mentioned in the above-
quoted Transitory Provisions of the Constitution.
That the ARMM elections were not expressly mentioned in the Transitory
Provisions of the Constitution on synchronization cannot be interpreted to
mean that the ARMM elections are not covered by the constitutional mandate
of synchronization. We have to consider that the ARMM, as we now know it,
had not yet been officially organized at the time the Constitution was enacted
and ratified by the people. Keeping in mind that a constitution is not intended
to provide merely for the exigencies of a few years but is to endure through
generations for as long as it remains unaltered by the people as ultimate
sovereign, a constitution should be construed in the light of what actually is a
continuing instrument to govern not only the present but also the unfolding
events of the indefinite future. Although the principles embodied in a
constitution remain fixed and unchanged from the time of its adoption, a
constitution must be construed as a dynamic process intended to stand for a
great length of time, to be progressive and not static.[8]
To reiterate, Article X of the Constitution, entitled Local Government, clearly
shows the intention of the Constitution to classify autonomous regions, such
as the ARMM, as local governments. We refer to Section 1 of this Article, which
provides:
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.
The inclusion of autonomous regions in the enumeration of political
subdivisions of the State under the heading Local Government indicates quite
clearly the constitutional intent to consider autonomous regions as one of the
forms of local governments.
That the Constitution mentions only the national government and the local
governments, and does not make a distinction between the local government
and the regional government, is particularly revealing, betraying as it does the
intention of the framers of the Constitution to consider the autonomous regions
not as separate forms of government, but as political units which, while having
more powers and attributes than other local government units, still remain
under the category of local governments. Since autonomous regions are
classified as local governments, it follows that elections held in autonomous
regions are also considered as local elections.
The petitioners further argue that even assuming that the Constitution
mandates the synchronization of elections, the ARMM elections are not
covered by this mandate since they are regional elections and not local
elections.
In construing provisions of the Constitution, the first rule is verba legis, that is,
wherever possible, the words used in the Constitution must be given their
ordinary meaning except where technical terms are employed.[9] Applying this
principle to determine the scope of local elections, we refer to the meaning of
the word local, as understood in its ordinary sense. As defined in Websters
Third New International Dictionary Unabridged, local refers to something that
primarily serves the needs of a particular limited district, often a community or
minor political subdivision. Obviously, the ARMM elections, which are held
within the confines of the autonomous region of Muslim Mindanao, fall within
this definition.
To be sure, the fact that the ARMM possesses more powers than other
provinces, cities, or municipalities is not enough reason to treat the ARMM
regional elections differently from the other local elections. Ubi lex non
distinguit nec nos distinguire debemus. When the law does not distinguish,
we must not distinguish.[10]
RA No. 10153 does not amend RA No. 9054
The petitioners are adamant that the provisions of RA No. 10153, in
postponing the ARMM elections, amend RA No. 9054.
We cannot agree with their position.
A thorough reading of RA No. 9054 reveals that it fixes the schedule for only
the first ARMM elections;[11] it does not provide the date for the succeeding
regular ARMM elections. In providing for the date of the regular ARMM
elections, RA No. 9333 and RA No. 10153 clearly do not amend RA No. 9054
since these laws do not change or revise any provision in RA No. 9054. In
fixing the date of the ARMM elections subsequent to the first election, RA No.
9333 and RA No. 10153 merely filled the gap left in RA No. 9054.
We reiterate our previous observations:
This view that Congress thought it best to leave the determination of the date
of succeeding ARMM elections to legislative discretion finds support in
ARMMs recent history.
To recall, RA No. 10153 is not the first law passed that rescheduled the ARMM
elections. The First Organic Act RA No. 6734 not only did not fix the date of
the subsequent elections; it did not even fix the specific date of the first ARMM
elections, leaving the date to be fixed in another legislative enactment.
Consequently, RA No. 7647, RA No. 8176, RA No. 8746, RA No. 8753, and
RA No. 9012 were all enacted by Congress to fix the dates of the ARMM
elections. Since these laws did not change or modify any part or provision of
RA No. 6734, they were not amendments to this latter law. Consequently,
there was no need to submit them to any plebiscite for ratification.
The Second Organic Act RA No. 9054 which lapsed into law on March 31,
2001, provided that the first elections would be held on the second Monday of
September 2001. Thereafter, Congress passed RA No. 9140 to reset the date
of the ARMM elections. Significantly, while RA No. 9140 also scheduled the
plebiscite for the ratification of the Second Organic Act (RA No. 9054), the new
date of the ARMM regional elections fixed in RA No. 9140 was not among the
provisions ratified in the plebiscite held to approve RA No. 9054. Thereafter,
Congress passed RA No. 9333, which further reset the date of the ARMM
regional elections. Again, this law was not ratified through a plebiscite.
From these legislative actions, we see the clear intention of Congress to treat
the laws which fix the date of the subsequent ARMM elections as separate and
distinct from the Organic Acts. Congress only acted consistently with this intent
when it passed RA No. 10153 without requiring compliance with the
amendment prerequisites embodied in Section 1 and Section 3, Article XVII of
RA No. 9054.[12] (emphases supplied)
The petitioner in G.R. No. 196305 contends, however, that there is no lacuna
in RA No. 9054 as regards the date of the subsequent ARMM elections. In his
estimation, it can be implied from the provisions of RA No. 9054 that the
succeeding elections are to be held three years after the date of the first ARMM
regional elections.
We find this an erroneous assertion. Well-settled is the rule that the court may
not, in the guise of interpretation, enlarge the scope of a statute and include
therein situations not provided nor intended by the lawmakers. An omission at
the time of enactment, whether careless or calculated, cannot be judicially
supplied however later wisdom may recommend the inclusion.[13] Courts are
not authorized to insert into the law what they think should be in it or to supply
what they think the legislature would have supplied if its attention had been
called to the omission.[14] Providing for lapses within the law falls within the
exclusive domain of the legislature, and courts, no matter how well-meaning,
have no authority to intrude into this clearly delineated space.
Since RA No. 10153 does not amend, but merely fills in the gap in RA No.
9054, there is no need for RA No. 10153 to comply with the amendment
requirements set forth in Article XVII of RA No. 9054.
Supermajority vote requirement makes RA No. 9054 an irrepealable law
Even assuming that RA No. 10153 amends RA No. 9054, however, we have
already established that the supermajority vote requirement set forth in Section
1, Article XVII of RA No. 9054[15] is unconstitutional for violating the principle
that Congress cannot pass irrepealable laws.
The power of the legislature to make laws includes the power to amend and
repeal these laws. Where the legislature, by its own act, attempts to limit its
power to amend or repeal laws, the Court has the duty to strike down such act
for interfering with the plenary powers of Congress. As we explained in Duarte
v. Dade:[16]
A state legislature has a plenary law-making power over all subjects, whether
pertaining to persons or things, within its territorial jurisdiction, either to
introduce new laws or repeal the old, unless prohibited expressly or by
implication by the federal constitution or limited or restrained by its own. It
cannot bind itself or its successors by enacting irrepealable laws except when
so restrained. Every legislative body may modify or abolish the acts passed by
itself or its predecessors. This power of repeal may be exercised at the same
session at which the original act was passed; and even while a bill is in its
progress and before it becomes a law. This legislature cannot bind a future
legislature to a particular mode of repeal. It cannot declare in advance the
intent of subsequent legislatures or the effect of subsequent legislation upon
existing statutes. [emphasis ours]
Under our Constitution, each House of Congress has the power to approve
bills by a mere majority vote, provided there is quorum.[17] In requiring all laws
which amend RA No. 9054 to comply with a higher voting requirement than
the Constitution provides (2/3 vote), Congress, which enacted RA No. 9054,
clearly violated the very principle which we sought to establish in Duarte. To
reiterate, the act of one legislature is not binding upon, and cannot tie the
hands of, future legislatures.[18]
We also highlight an important point raised by Justice Antonio T. Carpio in his
dissenting opinion, where he stated: Section 1, Article XVII of RA 9054 erects
a high vote threshold for each House of Congress to surmount, effectively and
unconstitutionally, taking RA 9054 beyond the reach of Congress amendatory
powers. One Congress cannot limit or reduce the plenary legislative power of
succeeding Congresses by requiring a higher vote threshold than what the
Constitution requires to enact, amend or repeal laws. No law can be passed
fixing such a higher vote threshold because Congress has no power, by
ordinary legislation, to amend the Constitution.[19]
Plebiscite requirement in RA No. 9054 overly broad
Similarly, we struck down the petitioners contention that the plebiscite
requirement[20] applies to all amendments of RA No. 9054 for being an
unreasonable enlargement of the plebiscite requirement set forth in the
Constitution.
Section 18, Article X of the Constitution provides that [t]he 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[.] We
interpreted this to mean that only amendments to, or revisions of, the Organic
Act constitutionally-essential to the creation of autonomous regions i.e., those
aspects specifically mentioned in the Constitution which Congress must
provide for in the Organic Act[21] require ratification through a plebiscite. We
stand by this interpretation.
The petitioners argue that to require all amendments to RA No. 9054 to comply
with the plebiscite requirement is to recognize that sovereignty resides
primarily in the people.
While we agree with the petitioners underlying premise that sovereignty
ultimately resides with the people, we disagree that this legal reality
necessitates compliance with the plebiscite requirement for all amendments to
RA No. 9054. For if we were to go by the petitioners interpretation of Section
18, Article X of the Constitution that all amendments to the Organic Act have
to undergo the plebiscite requirement before becoming effective, this would
lead to impractical and illogical results hampering the ARMMs progress by
impeding Congress from enacting laws that timely address problems as they
arise in the region, as well as weighing down the ARMM government with the
costs that unavoidably follow the holding of a plebiscite.
Interestingly, the petitioner in G.R. No. 197282 posits that RA No. 10153, in
giving the President the power to appoint OICs to take the place of the elective
officials of the ARMM, creates a fundamental change in the basic structure of
the government, and thus requires compliance with the plebiscite requirement
embodied in RA No. 9054.
Again, we disagree.
The pertinent provision in this regard is Section 3 of RA No. 10153, which
reads:
Section 3. Appointment of Officers-in-Charge. The President shall appoint
officers-in-charge for the Office of the Regional Governor, Regional Vice
Governor and Members of the Regional Legislative Assembly who shall
perform the functions pertaining to the said offices until the officials duly
elected in the May 2013 elections shall have qualified and assumed office.
We cannot see how the above-quoted provision has changed the basic
structure of the ARMM regional government. On the contrary, this provision
clearly preserves the basic structure of the ARMM regional government when
it recognizes the offices of the ARMM regional government and directs the
OICs who shall temporarily assume these offices to perform the functions
pertaining to the said offices.
Unconstitutionality of the holdover provision
The petitioners are one in defending the constitutionality of Section 7(1), Article
VII of RA No. 9054, which allows the regional officials to remain in their
positions in a holdover capacity. The petitioners essentially argue that the
ARMM regional officials should be allowed to remain in their respective
positions until the May 2013 elections since there is no specific provision in the
Constitution which prohibits regional elective officials from performing their
duties in a holdover capacity.
The pertinent provision of the Constitution is Section 8, Article X which
provides:
Section 8. The term of office of elective local officials, except barangay
officials, which shall be determined by law, shall be three years and no such
official shall serve for more than three consecutive terms. [emphases ours]
On the other hand, Section 7(1), Article VII of RA No. 9054 provides:
Section 7. Terms of Office of Elective Regional Officials. (1) Terms of Office.
The terms of office of the Regional Governor, Regional Vice Governor and
members of the Regional Assembly shall be for a period of three (3) years,
which shall begin at noon on the 30th day of September next following the day
of the election and shall end at noon of the same date three (3) years
thereafter. The incumbent elective officials of the autonomous region shall
continue in effect until their successors are elected and qualified.
The clear wording of Section 8, Article X of the Constitution expresses the
intent of the framers of the Constitution to categorically set a limitation on the
period within which all elective local officials can occupy their offices. We have
already established that elective ARMM officials are also local officials; they
are, thus, bound by the three-year term limit prescribed by the Constitution. It,
therefore, becomes irrelevant that the Constitution does not expressly prohibit
elective officials from acting in a holdover capacity. Short of amending the
Constitution, Congress has no authority to extend the three-year term limit by
inserting a holdover provision in RA No. 9054. Thus, the term of three years
for local officials should stay at three (3) years, as fixed by the Constitution,
and cannot be extended by holdover by Congress.
Admittedly, we have, in the past, recognized the validity of holdover provisions
in various laws. One significant difference between the present case and these
past cases[22] is that while these past cases all refer to elective barangay or
sangguniang kabataan officials whose terms of office are not explicitly
provided for in the Constitution, the present case refers to local elective
officials - the ARMM Governor, the ARMM Vice Governor, and the members
of the Regional Legislative Assembly - whose terms fall within the three-year
term limit set by Section 8, Article X of the Constitution.
Even assuming that a holdover is constitutionally permissible, and there had
been statutory basis for it (namely Section 7, Article VII of RA No. 9054), the
rule of holdover can only apply as an available option where no express or
implied legislative intent to the contrary exists; it cannot apply where such
contrary intent is evident.[23]
Congress, in passing RA No. 10153 and removing the holdover option, has
made it clear that it wants to suppress the holdover rule expressed in RA No.
9054. Congress, in the exercise of its plenary legislative powers, has clearly
acted within its discretion when it deleted the holdover option, and this Court
has no authority to question the wisdom of this decision, absent any evidence
of unconstitutionality or grave abuse of discretion. It is for the legislature and
the executive, and not this Court, to decide how to fill the vacancies in the
ARMM regional government which arise from the legislature complying with
the constitutional mandate of synchronization.
COMELEC has no authority to hold special elections
Neither do we find any merit in the contention that the Commission on
Elections (COMELEC) is sufficiently empowered to set the date of special
elections in the ARMM. To recall, the Constitution has merely empowered the
COMELEC to enforce and administer all laws and regulations relative to the
conduct of an election.[24] Although the legislature, under the Omnibus
Election Code (Batas Pambansa Bilang [BP] 881), has granted the COMELEC
the power to postpone elections to another date, this power is confined to the
specific terms and circumstances provided for in the law. Specifically, this
power falls within the narrow confines of the following provisions:
Section 5. Postponement of election. - When for any serious cause such as
violence, terrorism, loss or destruction of election paraphernalia or records,
force majeure, and other analogous causes of such a nature that the holding
of a free, orderly and honest election should become impossible in any political
subdivision, the Commission, motu proprio or upon a verified petition by any
interested party, and after due notice and hearing, whereby all interested
parties are afforded equal opportunity to be heard, shall postpone the election
therein to a date which should be reasonably close to the date of the election
not held, suspended or which resulted in a failure to elect but not later than
thirty days after the cessation of the cause for such postponement or
suspension of the election or failure to elect.
Section 6. Failure of election. - If, on account of force majeure, violence,
terrorism, fraud, or other analogous causes the election in any polling place
has not been held on the date fixed, or had been suspended before the hour
fixed by law for the closing of the voting, or after the voting and during the
preparation and the transmission of the election returns or in the custody or
canvass thereof, such election results in a failure to elect, and in any of such
cases the failure or suspension of election would affect the result of the
election, the Commission shall, on the basis of a verified petition by any
interested party and after due notice and hearing, call for the holding or
continuation of the election not held, suspended or which resulted in a failure
to elect on a date reasonably close to the date of the election not held,
suspended or which resulted in a failure to elect but not later than thirty days
after the cessation of the cause of such postponement or suspension of the
election or failure to elect. [emphases and underscoring ours]
As we have previously observed in our assailed decision, both Section 5 and
Section 6 of BP 881 address instances where elections have already been
scheduled to take place but do not occur or had to be suspended because of
unexpected and unforeseen circumstances, such as violence, fraud, terrorism,
and other analogous circumstances.
In contrast, the ARMM elections were postponed by law, in furtherance of the
constitutional mandate of synchronization of national and local elections.
Obviously, this does not fall under any of the circumstances contemplated by
Section 5 or Section 6 of BP 881.
More importantly, RA No. 10153 has already fixed the date for the next ARMM
elections and the COMELEC has no authority to set a different election date.

Even assuming that the COMELEC has the authority to hold special elections,
and this Court can compel the COMELEC to do so, there is still the problem of
having to shorten the terms of the newly elected officials in order to
synchronize the ARMM elections with the May 2013 national and local
elections. Obviously, neither the Court nor the COMELEC has the authority to
do this, amounting as it does to an amendment of Section 8, Article X of the
Constitution, which limits the term of local officials to three years.
Presidents authority to appoint OICs
The petitioner in G.R. No. 197221 argues that the Presidents power to appoint
pertains only to appointive positions and cannot extend to positions held by
elective officials.
The power to appoint has traditionally been recognized as executive in
nature.[25] Section 16, Article VII of the Constitution describes in broad strokes
the extent of this power, thus:
Section 16. The President shall nominate and, with the consent of the
Commission on Appointments, appoint the heads of the executive
departments, ambassadors, other public ministers and consuls, or officers of
the armed forces from the rank of colonel or naval captain, and other officers
whose appointments are vested in him in this Constitution. He shall also
appoint all other officers of the Government whose appointments are not
otherwise provided for by law, and those whom he may be authorized by law
to appoint. The Congress may, by law, vest the appointment of other officers
lower in rank in the President alone, in the courts, or in the heads of
departments, agencies, commissions, or boards. [emphasis ours]
The 1935 Constitution contained a provision similar to the one quoted above.
Section 10(3), Article VII of the 1935 Constitution provides:
(3) The President shall nominate and with the consent of the Commission on
Appointments, shall appoint the heads of the executive departments and
bureaus, officers of the Army from the rank of colonel, of the Navy and Air
Forces from the rank of captain or commander, and all other officers of the
Government whose appointments are not herein otherwise provided for, and
those whom he may be authorized by law to appoint; but the Congress may
by law vest the appointment of inferior officers, in the President alone, in the
courts, or in the heads of departments. [emphasis ours]
The main distinction between the provision in the 1987 Constitution and its
counterpart in the 1935 Constitution is the sentence construction; while in the
1935 Constitution, the various appointments the President can make are
enumerated in a single sentence, the 1987 Constitution enumerates the
various appointments the President is empowered to make and divides the
enumeration in two sentences. The change in style is significant; in providing
for this change, the framers of the 1987 Constitution clearly sought to make a
distinction between the first group of presidential appointments and the second
group of presidential appointments, as made evident in the following
exchange:
MR. FOZ. Madame President x x x I propose to put a period (.) after captain
and x x x delete and all and substitute it with HE SHALL ALSO APPOINT ANY.
MR. REGALADO. Madam President, the Committee accepts the proposed
amendment because it makes it clear that those other officers mentioned
therein do not have to be confirmed by the Commission on Appointments.[26]
The first group of presidential appointments, specified as the heads of the
executive departments, ambassadors, other public ministers and consuls, or
officers of the Armed Forces, and other officers whose appointments are
vested in the President by the Constitution, pertains to the appointive officials
who have to be confirmed by the Commission on Appointments.
The second group of officials the President can appoint are all other officers of
the Government whose appointments are not otherwise provided for by law,
and those whom he may be authorized by law to appoint.[27] The second
sentence acts as the catch-all provision for the Presidents appointment power,
in recognition of the fact that the power to appoint is essentially executive in
nature.[28] The wide latitude given to the President to appoint is further
demonstrated by the recognition of the Presidents power to appoint officials
whose appointments are not even provided for by law. In other words, where
there are offices which have to be filled, but the law does not provide the
process for filling them, the Constitution recognizes the power of the President
to fill the office by appointment.
Any limitation on or qualification to the exercise of the Presidents appointment
power should be strictly construed and must be clearly stated in order to be
recognized.[29] Given that the President derives his power to appoint OICs in
the ARMM regional government from law, it falls under the classification of
presidential appointments covered by the second sentence of Section 16,
Article VII of the Constitution; the Presidents appointment power thus rests on
clear constitutional basis.
The petitioners also jointly assert that RA No. 10153, in granting the President
the power to appoint OICs in elective positions, violates Section 16, Article X
of the Constitution,[30] which merely grants the President the power of
supervision over autonomous regions.
This is an overly restrictive interpretation of the Presidents appointment power.
There is no incompatibility between the Presidents power of supervision over
local governments and autonomous regions, and the power granted to the
President, within the specific confines of RA No. 10153, to appoint OICs.
The power of supervision is defined as the power of a superior officer to see
to it that lower officers perform their functions in accordance with law.[31] This
is distinguished from the power of control or the power of an officer to alter or
modify or set aside what a subordinate officer had done in the performance of
his duties and to substitute the judgment of the former for the latter.[32]
The petitioners apprehension regarding the Presidents alleged power of
control over the OICs is rooted in their belief that the Presidents appointment
power includes the power to remove these officials at will. In this way, the
petitioners foresee that the appointed OICs will be beholden to the President,
and act as representatives of the President and not of the people.
Section 3 of RA No. 10153 expressly contradicts the petitioners supposition.
The provision states:
Section 3. Appointment of Officers-in-Charge. The President shall appoint
officers-in-charge for the Office of the Regional Governor, Regional Vice
Governor and Members of the Regional Legislative Assembly who shall
perform the functions pertaining to the said offices until the officials duly
elected in the May 2013 elections shall have qualified and assumed office.
The wording of the law is clear. Once the President has appointed the OICs
for the offices of the Governor, Vice Governor and members of the Regional
Legislative Assembly, these same officials will remain in office until they are
replaced by the duly elected officials in the May 2013 elections. Nothing in this
provision even hints that the President has the power to recall the
appointments he already made. Clearly, the petitioners fears in this regard are
more apparent than real.
RA No. 10153 as an interim measure
We reiterate once more the importance of considering RA No. 10153 not in a
vacuum, but within the context it was enacted in. In the first place, Congress
enacted RA No. 10153 primarily to heed the constitutional mandate to
synchronize the ARMM regional elections with the national and local elections.
To do this, Congress had to postpone the scheduled ARMM elections for
another date, leaving it with the problem of how to provide the ARMM with
governance in the intervening period, between the expiration of the term of
those elected in August 2008 and the assumption to office twenty-one (21)
months away of those who will win in the synchronized elections on May 13,
2013.
In our assailed Decision, we already identified the three possible solutions
open to Congress to address the problem created by synchronization (a) allow
the incumbent officials to remain in office after the expiration of their terms in
a holdover capacity; (b) call for special elections to be held, and shorten the
terms of those to be elected so the next ARMM regional elections can be held
on May 13, 2013; or (c) recognize that the President, in the exercise of his
appointment powers and in line with his power of supervision over the ARMM,
can appoint interim OICs to hold the vacated positions in the ARMM regional
government upon the expiration of their terms. We have already established
the unconstitutionality of the first two options, leaving us to consider the last
available option.
In this way, RA No. 10153 is in reality an interim measure, enacted to respond
to the adjustment that synchronization requires. Given the context, we have to
judge RA No. 10153 by the standard of reasonableness in responding to the
challenges brought about by synchronizing the ARMM elections with the
national and local elections. In other words, given the plain unconstitutionality
of providing for a holdover and the unavailability of constitutional possibilities
for lengthening or shortening the term of the elected ARMM officials, is the
choice of the Presidents power to appoint for a fixed and specific period as an
interim measure, and as allowed under Section 16, Article VII of the
Constitution an unconstitutional or unreasonable choice for Congress to
make?[33]
We admit that synchronization will temporarily disrupt the election process in
a local community, the ARMM, as well as the communitys choice of leaders.
However, we have to keep in mind that the adoption of this measure is a matter
of necessity in order to comply with a mandate that the Constitution itself has
set out for us. Moreover, the implementation of the provisions of RA No. 10153
as an interim measure is comparable to the interim measures traditionally
practiced when, for instance, the President appoints officials holding elective
offices upon the creation of new local government units.
The grant to the President of the power to appoint OICs in place of the elective
members of the Regional Legislative Assembly is neither novel nor innovative.
The power granted to the President, via RA No. 10153, to appoint members of
the Regional Legislative Assembly is comparable to the power granted by BP
881 (the Omnibus Election Code) to the President to fill any vacancy for any
cause in the Regional Legislative Assembly (then called the Sangguniang
Pampook).[34]
Executive is not bound by the principle of judicial courtesy

The petitioners in G.R. No. 197280, in their Manifestation and Motion dated
December 21, 2011, question the propriety of the appointment by the
President of Mujiv Hataman as acting Governor and Bainon Karon as acting
Vice Governor of the ARMM. They argue that since our previous decision was
based on a close vote of 8-7, and given the numerous motions for
reconsideration filed by the parties, the President, in recognition of the principle
of judicial courtesy, should have refrained from implementing our decision until
we have ruled with finality on this case.
We find the petitioners reasoning specious.
Firstly, the principle of judicial courtesy is based on the hierarchy of courts and
applies only to lower courts in instances where, even if there is no writ of
preliminary injunction or TRO issued by a higher court, it would be proper for
a lower court to suspend its proceedings for practical and ethical
considerations.[35] In other words, the principle of judicial courtesy applies
where there is a strong probability that the issues before the higher court would
be rendered moot and moribund as a result of the continuation of the
proceedings in the lower court or court of origin.[36] Consequently, this
principle cannot be applied to the President, who represents a co-equal branch
of government. To suggest otherwise would be to disregard the principle of
separation of powers, on which our whole system of government is founded
upon.
Secondly, the fact that our previous decision was based on a slim vote of 8-7
does not, and cannot, have the effect of making our ruling any less effective or
binding. Regardless of how close the voting is, so long as there is concurrence
of the majority of the members of the en banc who actually took part in the
deliberations of the case,[37] a decision garnering only 8 votes out of 15
members is still a decision of the Supreme Court en banc and must be
respected as such. The petitioners are, therefore, not in any position to
speculate that, based on the voting, the probability exists that their motion for
reconsideration may be granted.[38]
Similarly, the petitioner in G.R. No. 197282, in his Very Urgent Motion to Issue
Clarificatory Resolution, argues that since motions for reconsideration were
filed by the aggrieved parties challenging our October 18, 2011 decision in the
present case, the TRO we initially issued on September 13, 2011 should
remain subsisting and effective. He further argues that any attempt by the
Executive to implement our October 18, 2011 decision pending resolution of
the motions for reconsideration borders on disrespect if not outright
insolence[39] to this Court.
In support of this theory, the petitioner cites Samad v. COMELEC,[40] where
the Court held that while it had already issued a decision lifting the TRO, the
lifting of the TRO is not yet final and executory, and can also be the subject of
a motion for reconsideration. The petitioner also cites the minute resolution
issued by the Court in Tolentino v. Secretary of Finance,[41] where the Court
reproached the Commissioner of the Bureau of Internal Revenue for
manifesting its intention to implement the decision of the Court, noting that the
Court had not yet lifted the TRO previously issued.[42]
We agree with the petitioner that the lifting of a TRO can be included as a
subject of a motion for reconsideration filed to assail our decision. It does not
follow, however, that the TRO remains effective until after we have issued a
final and executory decision, especially considering the clear wording of the
dispositive portion of our October 18, 2011 decision, which states:
WHEREFORE, premises considered, we DISMISS the consolidated petitions
assailing the validity of RA No. 10153 for lack of merit, and UPHOLD the
constitutionality of this law. We likewise LIFT the temporary restraining order
we issued in our Resolution of September 13, 2011. No costs.[43] (emphases
ours)
In this regard, we note an important distinction between Tolentino and the
present case. While it may be true that Tolentino and the present case are
similar in that, in both cases, the petitions assailing the challenged laws were
dismissed by the Court, an examination of the dispositive portion of the
decision in Tolentino reveals that the Court did not categorically lift the TRO.
In sharp contrast, in the present case, we expressly lifted the TRO issued on
September 13, 2011. There is, therefore, no legal impediment to prevent the
President from exercising his authority to appoint an acting ARMM Governor
and Vice Governor as specifically provided for in RA No. 10153.
Conclusion
As a final point, we wish to address the bleak picture that the petitioner in G.R.
No. 197282 presents in his motion, that our Decision has virtually given the
President the power and authority to appoint 672,416 OICs in the event that
the elections of barangay and Sangguniang Kabataan officials are postponed
or cancelled.
We find this speculation nothing short of fear-mongering.
This argument fails to take into consideration the unique factual and legal
circumstances which led to the enactment of RA No. 10153. RA No. 10153
was passed in order to synchronize the ARMM elections with the national and
local elections. In the course of synchronizing the ARMM elections with the
national and local elections, Congress had to grant the President the power to
appoint OICs in the ARMM, in light of the fact that: (a) holdover by the
incumbent ARMM elective officials is legally impermissible; and (b) Congress
cannot call for special elections and shorten the terms of elective local officials
for less than three years.
Unlike local officials, as the Constitution does not prescribe a term limit for
barangay and Sangguniang Kabataan officials, there is no legal proscription
which prevents these specific government officials from continuing in a
holdover capacity should some exigency require the postponement of
barangay or Sangguniang Kabataan elections. Clearly, these fears have
neither legal nor factual basis to stand on.
For the foregoing reasons, we deny the petitioners motions for reconsideration.
WHEREFORE, premises considered, we DENY with FINALITY the motions
for reconsideration for lack of merit and UPHOLD the constitutionality of RA
No. 10153.
SO ORDERED.
11. Villafuerte, Jr. and CAMSUR v. Robredo
G.R. No. 195390 December 10, 2014
GOV. LUIS RAYMUND F. VILLAFUERTE, JR., and the PROVINCE OF
CAMARINES SUR, Petitioners,
vs.
HON. JESSE M. ROBREDO, in his capacity as Secretary of the Department
of the Interior and Local Government, Respondent.
DECISION
REYES, J.:
This is a petition for certiorari and prohibition1 under Rule 65 of the 1997
Revised Rules of Court filed by former Governor Luis Raymund F. Villafuerte,
Jr. (Villafuerte) and the Province of Camarines Sur (petitioners), seeking to
annul and set aside the following issuances of the late Honorable Jesse M.
Robredo (respondent), in his capacity as then Secretary of the Department of
the Interior and Local Government (DILG), to wit:
(a) Memorandum Circular (MC) No. 2010-83dated August 31, 2010, pertaining
to the full disclosure of local budget and finances, and bids and public
offerings;2
(b) MC No. 2010-138 dated December 2, 2010, pertaining to the use of the
20% component of the annual internal revenue allotment shares;3 and
(c) MC No. 2011-08 dated January 13, 2011, pertaining to the strict adherence
to Section 90 of Republic Act (R.A.) No. 10147 or the General Appropriations
Act of 2011.4
The petitioners seek the nullification of the foregoing issuances on the ground
of unconstitutionality and for having been issued with grave abuse of discretion
amounting to lack orexcess of jurisdiction.
The Facts
In 1995, the Commission on Audit (COA) conducted an examination and audit
on the manner the local government units (LGUs) utilized their Internal
Revenue Allotment (IRA) for the calendar years 1993-1994. The examination
yielded an official report,showing that a substantial portion of the 20%
development fund of some LGUs was not actually utilized for development
projects but was diverted to expenses properly chargeable against the
Maintenance and Other Operating Expenses (MOOE), in stark violation of
Section 287 of R.A. No. 7160, otherwise known as the Local Government
Code of 1991 (LGC). Thus, on December 14, 1995, the DILG issued MC No.
95-216,5 enumerating the policies and guidelines on the utilization of the
development fund component of the IRA. It likewise carried a reminder to
LGUs of the strict mandate to ensure that public funds, like the 20%
development fund, "shall bespent judiciously and only for the very purpose or
purposes for which such funds are intended."6
On September 20, 2005, then DILG Secretary Angelo T. Reyes and
Department of Budget and Management Secretary Romulo L. Neri issued Joint
MC No. 1, series of 2005,7 pertaining to the guidelines on the appropriation
and utilization of the 20% of the IRA for development projects, which aims to
enhance accountability of the LGUs in undertaking development projects. The
said memorandum circular underscored that the 20% of the IRA intended for
development projects should be utilized for social development, economic
development and environmental management.8
On August 31, 2010, the respondent, in his capacity as DILG Secretary, issued
the assailed MC No. 2010-83,9 entitled "Full Disclosure of Local Budget and
Finances, and Bids and Public Offerings," which aims to promote good
governance through enhanced transparency and accountability of LGUs. The
pertinent portion of the issuance reads:
Legal and Administrative Authority
Section 352 of the Local Government Code of 1991 requires the posting within
30 days from the end of eachfiscal year in at least three (3) publicly accessible
and conspicuous places in the local government unit a summary of all
revenues collected and funds received including the appropriations and
disbursements of such funds during the preceding fiscal year.
On the other hand, Republic Act No. 9184, known as the Government
Procurement Reform Act, calls for the posting of the Invitation to Bid, Notice of
Award, Notice to Proceed and Approved Contract in the procuring entitys
premises, in newspapers of general circulation, the Philippine Government
Electronic Procurement System (PhilGEPS) and the website of the procuring
entity. The declared policy of the State to promote good local governance also
calls for the posting of budgets, expenditures, contracts and loans, and
procurement plans of local government units in conspicuous places within
public buildings in the locality, inthe web, and in print media of community or
general circulation.
Furthermore, the President, in his first State of the Nation Address, directed all
government agencies and entities to bring to an end luxurious spending and
misappropriation ofpublic funds and to expunge mendacious and erroneous
projects, and adhere to the zero-based approach budgetary principle.
Responsibility of the Local Chief Executive
All Provincial Governors, City Mayors and Municipal Mayors, are directed to
faithfully comply with the above cited [sic] provisions of laws, and existing
national policy, by posting in conspicuous places within public buildings in the
locality, or inprint media of community or general circulation, and in their
websites, the following:
1. CY 2010 Annual Budget, information detail to the level of particulars of
personal services, maintenance and other operating expenses and capital
outlay per individual offices (Source Document - Local Budget Preparation
Form No. 3, titled, Program Appropriation and Obligation by Object of
Expenditure, limited to PS, MOOE and CO. For sample form, please visit
www.naga.gov.ph);
2. Quarterly Statement of Cash Flows, information detail to the level of
particulars of cash flows from operating activities (e.g. cash inflows, total cash
inflows, total cash outflows), cash flows from investing activities (e.g. cash
outflows), net increase in cash and cash at the beginning of the period (Source
Document - Statement of Cash Flows Form);
3. CY 2009 Statement of Receipts and Expenditures, information detail to the
level of particulars of beginning cash balance, receipts or income on local
sources (e.g., tax revenue, non-tax revenue), external sources, and receipts
from loans and borrowings, surplus of prior years, expenditures on general
services, economic services, social services and debt services, and total
expenditures (Source Document - Local Budget Preparation Form No. 2, titled,
Statement of Receipts and Expenditures);
4. CY 2010 Trust Fund (PDAF) Utilization, information detail to the level of
particulars of object expenditures (Source Document - Local Budget
Preparation Form No. 3, titled, Program Appropriation and Obligation by
Object of Expenditure, limited to PDAF Utilization);
5. CY 2010 Special Education Fund Utilization, information detail to the level
of particulars of object expenditures (Source Document - Local Budget
Preparation Form No. 3, titled, Program Appropriation and Obligation by
Object of Expenditure, limited to Special Education Fund);
6. CY 2010 20% Component of the IRA Utilization, information detail to the
level of particulars of objects of expenditure on social development, economic
development and environmental management (Source Document - Local
Budget Preparation Form No. 3, titled, Program Appropriation and Obligation
by Object of Expenditure, limited to 20% Component of the Internal Revenue
Allotment);
7. CY 2010 Gender and Development Fund Utilization, information detail to
the level of particulars of object expenditures (Source Document - Local
Budget Preparation Form No. 3, titled, Program Appropriation and Obligation
by Object of Expenditure, limited to Gender and Development Fund);
8. CY 2010 Statement of Debt Service, information detail to the level of name
of creditor, purpose of loan, date contracted, term, principal amount, previous
payment made on the principal and interest, amount due for the budget year
and balance of the principal (Source Document - Local Budget Preparation
Form No. 6, titled, Statement of Debt Service);
9. CY 2010 Annual Procurement Plan or Procurement List, information detail
to the level ofname of project, individual item or article and specification or
description of goods and services, procurement method, procuring office or
fund source, unit price or estimated cost or approved budget for the contract
and procurement schedule (Source Document - LGU Form No. 02, Makati
City. For sample form, please visit www.makati.gov.ph.)[;]
10. Items to Bid, information detail to the level of individual Invitation to Bid,
containing information as prescribed in Section 21.1 of Republic Act No. 9184,
or The Government Procurement Reform Act, to be updated quarterly (Source
Document - Invitation to Apply for Eligibility and to Bid, as prescribed in Section
21.1 of R.A. No. 9184. For sample form, please visit www.naga.gov.ph);
11. Bid Results on Civil Works, and Goods and Services, information detail to
the level of project reference number, name and location of project, name
(company and proprietor) and address of winning bidder, bid amount,
approved budget for the contract, bidding date, and contract duration, to be
updated quarterly (Source Document Infrastructure Projects/Goods and
Services Bid-Out (2010), Naga City. For sample form, please visit
www.naga.gov.ph); and
12. Abstract of Bids as Calculated, information detail to the level of project
name, location, implementing office, approved budget for the contract, quantity
and items subject for bidding, and bids of competing bidders, to be updated
quarterly (Source Document - Standard Form No. SF-GOOD-40, Revised May
24, 2004, Naga City. For sample form, please visit www.naga.gov.ph).
The foregoing circular also statesthat non-compliance will be meted sanctions
in accordance with pertinent laws, rules and regulations.10
On December 2, 2010, the respondent issued MC No. 2010-138,11 reiterating
that 20% component of the IRA shall be utilized for desirable social, economic
and environmental outcomes essential to the attainment of the constitutional
objective of a quality oflife for all. It also listed the following enumeration of
expenses for which the fund must not be utilized, viz:
1. Administrative expenses such ascash gifts, bonuses, food allowance,
medical assistance, uniforms, supplies, meetings, communication, water and
light, petroleum products, and the like; 2. Salaries, wages or overtime pay;
3. Travelling expenses, whether domestic or foreign;
4. Registration or participation feesin training, seminars, conferences or
conventions;
5. Construction, repairor refinishing of administrative offices;
6. Purchase of administrative office furniture, fixtures, equipment or
appliances; and
7. Purchase, maintenance or repair of motor vehicles or motorcycles, except
ambulances.12 On January 13, 2011, the respondent issued MC No. 2011-
08,13 directing for the strict adherence toSection 90 of R.A. No. 10147 or the
General Appropriations Act of 2011. The pertinent portion of the issuance
reads as follows:
Legal and Administrative Authority
Section 90 of Republic Act No. 10147 (General Appropriations Act) FY 2011
re "Use and Disbursement of Internal Revenue Allotment of LGUs", [sic]
stipulates: The amount appropriated for the LGUs share in the Internal
Revenue Allotment shall be used in accordance with Sections 17 (g) and 287
of R.A. No 7160. The annual budgets of LGUs shall be prepared in accordance
with the forms, procedures, and schedules prescribed by the Department of
Budget and Management and those jointly issued with the Commission on
Audit. Strict compliance with Sections 288 and 354 of R.A. No. 7160 and DILG
Memorandum Circular No. 2010-83, entitled "Full Disclosure of Local Budget
and Finances, and Bids and Public offering" is hereby mandated; PROVIDED,
That in addition to the publication or posting requirement under Section 352 of
R.A. No. 7160 in three (3) publicly accessible and conspicuous places in the
local government unit, the LGUs shall also post the detailed information on the
use and disbursement, and status of programs and projects in the LGUS
websites. Failure to comply with these requirements shall subject the
responsible officials to disciplinary actions in accordance with existing laws. x
x x14
xxxx
Sanctions
Non-compliance with the foregoing shall be dealt with in accordance with
pertinent laws, rules and regulations. In particular, attention is invited to the
provision of the Local Government Code of 1991, quoted as follows:
Section 60. Grounds for Disciplinary Actions - An elective local official may be
disciplined, suspended, or removed from office on: (c) Dishonesty, oppression,
misconduct in office, gross negligence, or dereliction of duty. x x x15
(Emphasis and underscoring in the original)
On February 21, 2011, Villafuerte, then Governor of Camarines Sur, joined by
the Provincial Government of Camarines Sur, filed the instant petition for
certiorari, seeking to nullify the assailed issuances of the respondent for being
unconstitutional and having been issued with grave abuse of discretion.
On June 2, 2011, the respondent filed his Comment on the petition.16 Then,
on June 22, 2011, the petitioners filed their Reply (With Urgent Prayer for the
Issuance of a Writ of Preliminary Injunction and/or Temporary Restraining
Order).17 In the Resolution18 dated October 11, 2011, the Court gave due
course to the petition and directed the parties to file their respective
memorandum. In compliance therewith, the respondent and the petitioners
filed their Memorandum on January 19, 201219 and on February 8, 201220
respectively.
The petitioners raised the following issues:
Issues
I The respondent claims that there isyet any actual case or controversy that calls
THE HON. SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN HEISSUED THE ASSAILED
MEMORANDUM CIRCULARS IN VIOLATION OF THE PRINCIPLES OF
LOCAL AUTONOMY AND FISCAL AUTONOMY ENSHRINED IN THE 1987
CONSTITUTION AND THE LOCAL GOVERNMENT CODE OF 1991[.]
II
THE HON. SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN HEINVALIDLY ASSUMED
LEGISLATIVE POWERS IN PROMULGATING THE ASSAILED
MEMORANDUM CIRCULARS WHICH WENT BEYOND THE CLEAR AND
MANIFEST INTENT OF THE 1987 CONSTITUTION AND THE LOCAL
GOVERNMENT CODE OF 1991[.]21
Ruling of the Court
The present petition revolves around the main issue: Whether or not the
assailed memorandum circulars violate the principles of local and fiscal
autonomy enshrined in the Constitution and the LGC.
The present petition is ripe for judicial review.
At the outset, the respondent is questioning the propriety of the exercise of the
Courts power of judicial review over the instant case. He argues that the
petition is premature since there is yet any actual controversy that is ripe for
judicial determination. He points out the lack of allegation in the petition that
the assailed issuances had been fully implemented and that the petitioners
had already exhausted administrative remedies under Section 25 of the
Revised Administrative Code before filing the same in court.22
It is well-settled that the Courts exercise of the power of judicial review
requires the concurrence of the following elements: (1) there must be an actual
case or controversy calling for the exercise of judicial power; (2) the person
challenging the act must have the standing to question the validity of the
subject act or issuance; otherwise stated, he must have a personal and
substantial interest in the case such that he has sustained, or will sustain,
direct injury as a result of its enforcement; (3) the question of constitutionality
must be raised at the earliest opportunity; and (4) the issue of constitutionality
must be the very lis motaof the case.23
for the exercise of judicial review. He contends that the mere expectation of an
administrative sanction does not give rise to a justiciable controversy
especially, in this case, that the petitioners have yet to exhaust administrative
remedies available.24
The Court disagrees.
In La Bugal-Blaan Tribal Association, Inc. v. Ramos,25 the Court
characterized an actual case or controversy, viz:
An actual case or controversy means an existing case or controversy that is
appropriate or ripe for determination, not conjectural or anticipatory, lest the
decision of the court would amount to an advisory opinion. The power does
not extend to hypothetical questions since any attempt at abstraction could
only lead to dialectics and barren legal questions and to sterile conclusions
unrelated to actualities.26 (Citations omitted)
The existence of an actual controversy in the instant case cannot be
overemphasized. At the time of filing of the instant petition, the respondent had
already implemented the assailed memorandum circulars. In fact, on May 26,
2011, Villafuerte received Audit Observation Memorandum (AOM) No. 2011-
009 dated May 10, 201127 from the Office of the Provincial Auditor of
Camarines Sur, requiring him to comment on the observation of the audit team,
which states:
The Province failed to post the transactions and documents required under
Department of Interior and Local Government (DILG) Memorandum Circular
No. 2010-83, thereby violating the mandate of full disclosure of Local Budget
and Finances, and Bids and Public Offering.
xxxx
The local officials concerned are reminded of the sanctions mentioned in the
circular which is quoted hereunder, thus:
"Non compliance with the foregoing shall be dealt with in accordance with
pertinent laws, rules and regulations. In particular, attention is invited to the
provision of Local Government Code of 1991, quoted as follows:
Section 60. Grounds for Disciplinary Actions An elective local official may be
disciplined, suspended or removed from office on: (c) Dishonesty, oppression,
misconduct in office, gross negligence or dereliction of duty."28
The issuance of AOM No. 2011-009 to Villafuerte is a clear indication that the
assailed issuances of the respondent are already in the full course of
implementation. The audit memorandum specifically mentioned of Villafuertes
alleged non-compliance with MCNo. 2010-83 regarding the posting
requirements stated in the circular and reiterated the sanctions that may be
imposed for the omission. The fact that Villafuerte is being required to
comment on the contents of AOM No. 2011-009 signifies that the process of
investigation for his alleged violation has already begun. Ultimately, the
investigation is expected to end in a resolution on whether a violation has
indeed been committed, together with the appropriate sanctions that come with
it. Clearly, Villafuertes apprehension is real and well-founded as he stands to
be sanctioned for non-compliance with the issuances.
There is likewise no merit in the respondents claim that the petitioners failure
to exhaust administrative remedies warrants the dismissal of the petition. It
bears emphasizing that the assailed issuances were issued pursuant to the
rule-making or quasi-legislative power of the DILG. This pertains to "the power
to make rules and regulations which results in delegated legislation that is
within the confines of the granting statute."29 Not to be confused with the
quasi-legislative or rule-making power of an administrative agency is its quasi-
judicial or administrative adjudicatory power. This is the power to hear and
determine questions of fact to which the legislative policy is to apply and to
decide in accordance with the standards laid down by the law itself in enforcing
and administering the same law.30 In challenging the validity of
anadministrative issuance carried out pursuant to the agencys rule-making
power, the doctrine of exhaustion of administrative remedies does not stand
as a bar in promptly resorting to the filing of a case in court. This was made
clear by the Court in Smart Communications, Inc. (SMART) v. National
Telecommunications Commission (NTC),31 where it was ruled, thus:
In questioning the validity or constitutionality of a rule or regulation issued by
an administrative agency, a party need not exhaust administrative remedies
before going to court. This principle applies only where the act of the
administrative agency concerned was performed pursuant to its quasi-judicial
function, and not when the assailed act pertained to its rule-making orquasi-
legislative power. x x x.32
Considering the foregoing clarification, there is thus no bar for the Court to
resolve the substantive issues raised in the petition.
The assailed memorandum
circulars do not transgress the local
and fiscal autonomy granted to
LGUs.
The petitioners argue that the assailed issuances of the respondent interfere
with the local and fiscal autonomy of LGUs embodied in the Constitution and
the LGC. In particular, they claim that MC No. 2010-138 transgressed these
constitutionally-protected liberties when it restricted the meaning of
"development" and enumerated activities which the local government must
finance from the 20% development fund component of the IRA and provided
sanctions for local authorities who shall use the said component of the fund for
the excluded purposes stated therein.33 They argue that the respondent
cannot substitute his own discretion with that of the local legislative council in
enacting its annual budget and specifying the development projects that the
20% component of its IRA should fund.34
The argument fails to persuade.
The Constitution has expressly adopted the policy of ensuring the autonomy
of LGUs.35 To highlight its significance, the entire Article X of the Constitution
was devoted to laying down the bedrock upon which this policy is anchored.
It is also pursuant to the mandate of the Constitution of enhancing local
autonomy that the LGC was enacted. Section 2 thereof was a reiteration of the
state policy. It reads, thus:
Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State
that the territorial and political subdivisions of the State shall enjoy genuine
and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective
partners in the attainment ofnational goals. Toward this end, the State shall
provide for a more responsive and accountable local government structure
instituted through a system of decentralization whereby local government units
shall be given more powers, authority, responsibilities, and resources. The
process of decentralization shall proceed from the national government to the
local government units.
Verily, local autonomy means a more responsive and accountable local
government structure instituted through a system of decentralization.36 In
Limbona v. Mangelin,37 the Court elaborated on the concept of
decentralization, thus:
[A]utonomy is either decentralization of administration ordecentralization 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," 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. x x x.
Decentralization of power, on the other hand, involves an abdication of political
power in the favor of local governments [sic] units declared to be autonomous.
In thatcase, the autonomous government is free to chart its own destiny and
shape its future with minimum intervention from central authorities. x x x.38
(Citations omitted)
To safeguard the state policy on local autonomy, the Constitution confines the
power of the President over LGUs to mere supervision.39 "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."40 Thus, Section 4,
Article X of the Constitution, states:
Section 4. The President of the Philippines shall exercise general supervision
over local governments. Provinces with respect to component cities and
municipalities, and cities and municipalities with respect to component
barangays, shall ensure that the acts of their component units are within the
scope of their prescribed powers and functions.
In Province of Negros Occidental v. Commissioners, Commission on Audit,41
the Court distinguished general supervision from executive control in the
following manner:
The Presidents power of general supervision means the power of a superior
officer to see to it that subordinates perform their functions according to law.
This is distinguished from the Presidents power of control which is the power
to alter or modify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the President over
that of the subordinate officer. The power of control gives the President the
power to revise or reverse the acts or decisions of a subordinate officer
involving the exercise of discretion.42 (Citations omitted)
It is the petitioners contention that the respondent went beyond the confines
of his supervisory powers, asalter ego of the President, when he issued MC
No. 2010-138. They arguethat the mandatory nature of the circular, with the
threat of imposition of sanctions for non-compliance, evinces a clear desire to
exercise control over LGUs.43
The Court, however, perceives otherwise.
A reading of MC No. 2010-138 shows that it is a mere reiteration of an existing
provision in the LGC. It was plainly intended to remind LGUs to faithfully
observe the directive stated in Section 287 of the LGC to utilize the 20% portion
of the IRA for development projects. It was, at best, an advisory to LGUs to
examine themselves if they have been complying with the law. It must be
recalled that the assailed circular was issued in response to the report of the
COA that a substantial portion of the 20% development fund of some LGUs
was not actually utilized for development projects but was diverted to expenses
more properly categorized as MOOE, in violation of Section 287 of the LGC.
This intention was highlighted in the very first paragraph of MC No. 2010-138,
which reads:
Section 287 of the Local Government Code mandates every local government
to appropriate in its annual budget no less than 20% of its annual revenue
allotment for development projects. In common understanding, development
means the realization of desirable social, economic and environmental
outcomes essential in the attainment of the constitutional objective of a desired
quality of life for all.44 (Underscoring in the original)
That the term developmentwas characterized asthe "realization of desirable
social, economic and environmental outcome" does not operate as a
restriction of the term so as to exclude some other activities that may bring
about the same result. The definition was a plain characterization of the
concept of development as it is commonly understood. The statement of a
general definition was only necessary to illustrate among LGUs the nature of
expenses that are properly chargeable against the development fund
component of the IRA. It is expected to guide them and aid them in rethinking
their ways so that they may be able to rectify lapses in judgment, should there
be any, or it may simply stand as a reaffirmation of an already proper
administration of expenses.
The same clarification may be said of the enumeration of expenses in MC No.
2010-138. To begin with, it is erroneous to call them exclusions because such
a term signifies compulsory disallowance of a particular item or activity. This is
not the contemplation of the enumeration. Again, it is helpful to retrace the very
reason for the issuance of the assailed circular for a better understanding. The
petitioners should be reminded that the issuance of MC No. 2010-138 was
brought about by the report of the COA that the development fund was not
being utilized accordingly. To curb the alleged misuse of the development
fund, the respondent deemed it proper to remind LGUs of the nature and
purpose of the provision for the IRA through MC No. 2010-138. To illustrate
his point, heincluded the contested enumeration of the items for which the
development fund must generallynot be used. The enumerated items
comprised the expenses which the COA perceived to have been improperly
earmarked or charged against the development fund based on the audit it
conducted.
Contrary to the petitioners posturing, however, the enumeration was not
meant to restrict the discretion of the LGUs in the utilization of their funds. It
was meant to enlighten LGUs as to the nature of the development fund by
delineating it from other types of expenses. It was incorporated in the assailed
circular in order to guide them in the proper disposition of the IRA and avert
further misuse of the fund by citing current practices which seemed to be
incompatible with the purpose of the fund. Even then, LGUs remain at liberty
to map out their respective development plans solely on the basis of their own
judgment and utilize their IRAs accordingly, with the only restriction that 20%
thereof be expended for development projects. They may even spend their
IRAs for some of the enumerated items should they partake of indirect costs
of undertaking development projects. In such case, however, the concerned
LGU must ascertain that applicable rules and regulations on budgetary
allocation have been observed lest it be inviting an administrative probe.
The petitioners likewise misread the issuance by claiming that the provision of
sanctions therein is a clear indication of the Presidents interference in the
fiscalautonomy of LGUs. The relevant portion of the assailed issuance reads,
thus:
All local authorities are further reminded that utilizing the 20% component of
the Internal Revenue Allotment, whether willfully or through negligence, for any
purpose beyond those expressly prescribed by law or public policy shall be
subject to the sanctions provided under the Local Government Code and under
such other applicable laws.45
Significantly, the issuance itself did not provide for sanctions. It did not
particularly establish a new set ofacts or omissions which are deemed
violations and provide the corresponding penalties therefor. It simply stated a
reminder to LGUs that there are existing rules to consider in the disbursement
of the 20% development fund and that non-compliance therewith may render
them liable to sanctions which are provided in the LGC and other applicable
laws. Nonetheless, this warning for possible imposition of sanctions did not
alter the advisory nature of the issuance. At any rate, LGUs must be reminded
that the local autonomy granted to them does not completely severe them from
the national government or turn them into impenetrable states. Autonomy does
not make local governments sovereign within the state.46 InGanzon v. Court
of Appeals,47 the Court reiterated:
Autonomy, however, is not meant to end the relation of partnership and
interdependence between the central administration and local government
units, or otherwise, to usher in a regime of federalism. The Charter has not
taken such a radical step.1avvphi1 Local governments, under the Constitution,
are subject to regulation, however limited, and for no other purpose than
precisely, albeit paradoxically, to enhance self-government.48
Thus, notwithstanding the local fiscal autonomy being enjoyed by LGUs, they
are still under the supervision of the President and maybe held accountable
for malfeasance or violations of existing laws. "Supervision is not incompatible
with discipline. And the power to discipline and ensure that the laws be
faithfully executed must be construed to authorize the President to order an
investigation of the act or conduct of local officials when in his opinion the good
of the public service so requires."49
Clearly then, the Presidents power of supervision is not antithetical to
investigation and imposition of sanctions. In Hon. Joson v. Exec. Sec.
Torres,50 the Court pointed out, thus: "Independently of any statutory
provision authorizing the President to conduct an investigation of the nature
involved in this proceeding, and in view of the nature and character of the
executive authority with which the President of the Philippines is invested, the
constitutional grant to him of power to exercise general supervision over all
local governments and to take care that the laws be faithfully executed must
be construed to authorize him to order an investigation of the act or conduct of
the petitioner herein. Supervision is not a meaningless thing. It is an active
power. It is certainly not without limitation, but it at least implies authority to
inquire into facts and conditions in order to render the power real and effective.
x x x."51 (Emphasis ours and italics in the original)
As in MC No. 2010-138, the Court finds nothing in two other questioned
issuances of the respondent, i.e., MC Nos. 2010-83 and 2011-08, that can be
construed as infringing onthe fiscal autonomy of LGUs. The petitioners claim
that the requirement to post other documents in the mentioned issuances went
beyond the letter and spirit of Section 352 of the LGC and R.A. No. 9184,
otherwise known as the Government Procurement Reform Act, by requiring
that budgets, expenditures, contracts and loans, and procurement plans of
LGUs be publicly posted as well.52
Pertinently, Section 352 of the LGC reads:
Section 352. Posting of the Summary of Income and Expenditures. Local
treasurers, accountants, budget officers, and other accountable officers shall,
within thirty (30) days from the end of the fiscal year, post in at least three (3)
publicly accessible and conspicuous places in the local government unit a
summary of all revenues collected and funds received including the
appropriations and disbursements of such funds during the preceding fiscal
year.
R.A. No. 9184, on the other hand, requires the posting of the invitation to bid,
notice of award, notice to proceed, and approved contract in the procuring
entitys premises, in newspapers of general circulation, and the website of the
procuring entity.53
It is well to remember that fiscal autonomy does not leave LGUs with unbridled
discretion in the disbursement of public funds. They remain accountable to
their constituency. For, public office was created for the benefit of the people
and not the person who holds office.
The Court strongly enunciated in ABAKADA GURO Party List (formerly
AASJS), et al. v.Hon. Purisima, et al.,54 thus:
Public office is a public trust. It must be discharged by its holder not for his own
personal gain but for the benefit of the public for whom he holds it in trust. By
demanding accountability and service with responsibility, integrity, loyalty,
efficiency, patriotism and justice, all government officials and employees
havethe duty to be responsive to the needs of the people they are called upon
to serve.55
Thus, the Constitution strongly summoned the State to adopt and implement
a policy of full disclosure of all transactions involving public interest and provide
the people with the right to access public information.56 Section 352 of the
LGC is a response to this call for transparency. It is a mechanism of
transparency and accountability of local government officials and is in fact
incorporated under Chapter IV of the LGC which deals with "Expenditures,
Disbursements, Accounting and Accountability."
In the same manner, R.A. No. 9184 established a system of transparency in
the procurement process and in the implementation of procurement contracts
in government agencies.57 It is the public monitoring of the procurement
process and the implementation of awarded contracts with the end in view of
guaranteeing that these contracts are awarded pursuant to the provisions of
the law and its implementing rules and regulations, and that all these contracts
are performed strictly according to specifications.58
The assailed issuances of the respondent, MC Nos. 2010-83 and 2011-08, are
but implementation of this avowed policy of the State to make public officials
accountable to the people. They are amalgamations of existing laws, rules and
regulation designed to give teeth to the constitutional mandate of transparency
and accountability.
A scrutiny of the contents of the mentioned issuances shows that they do not,
in any manner, violate the fiscal autonomy of LGUs. To be clear, "[f]iscal
autonomy means that local governments have the power to create their own
sources of revenue in addition to their equitable share in the national taxes
released by the national government, as well as the power to allocate their
resources in accordance withtheir own priorities.It extends to the preparation
of their budgets, and local officials in turn have to work within the constraints
thereof."59
It is inconceivable, however, how the publication of budgets, expenditures,
contracts and loans and procurement plans of LGUs required in the assailed
issuances could have infringed on the local fiscal autonomy of LGUs. Firstly,
the issuances do not interfere with the discretion of the LGUs in the
specification of their priority projects and the allocation of their budgets. The
posting requirements are mere transparency measures which do not at all hurt
the manner by which LGUs decide the utilization and allocation of their funds.
Secondly, it appears that even Section 352 of the LGC that is being invoked
by the petitioners does not exclude the requirement for the posting of the
additional documents stated in MC Nos. 2010-83 and 2011-08. Apparently, the
mentioned provision requires the publication of "a summary of revenues
collected and funds received, including the appropriations and disbursements
of such funds." The additional requirement for the posting of budgets,
expenditures, contracts and loans, and procurement plans are well-within the
contemplation of Section 352 of the LGC considering they are documents
necessary for an accurate presentation of a summary of appropriations and
disbursements that an LGU is required to publish.
Finally, the Court believes that the supervisory powers of the President are
broad enough to embrace the power to require the publication of certain
documents as a mechanism of transparency. In Pimentel,Jr. v. Hon. Aguirre,60
the Court reminded that localfiscal autonomy does not rule out any manner of
national government intervention by way of supervision, in order to ensure that
local programs, fiscal and otherwise, are consistent with national goals. The
President, by constitutional fiat, is the head of the economic and planning
agency of the government, primarily responsible for formulating and
implementing continuing, coordinated and integrated social and economic
policies, plans and programs for the entire country.61 Moreover, the
Constitution, which was drafted after long years of dictatorship and abuse of
power, is now replete with numerous provisions directing the adoption of
measures to uphold transparency and accountability in government, with a
view of protecting the nation from repeating its atrocious past. In particular, the
Constitution commands the strict adherence to full disclosure of information
onall matters relating to official transactions and those involving public interest.
Pertinently, Section 28, Article II and Section 7, Article III of the Constitution,
provide: Article II
Declaration of Principles and State Policies Principles
Section 28. Subject to reasonable conditions prescribed by law, the State
adopts and implements a policy of full public disclosure of all its transactions
involving public interest.
Article III
Bill of Rights
Section 7. The right of the people to information on matters of public concern
shall be recognized. Access to official records, and to documents and papers
pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the
citizen, subject to such limitations as may be provided by law.
In the instant case, the assailed issuances were issued pursuant to the policy
of promoting good governance through transparency, accountability and
participation. The action of the respondent is certainly within the constitutional
bounds of his power as alter ego of the President.

It is needless to say that the power to govern is a delegated authority from the
people who hailed the public official to office through the democratic process
of election. His stay in office remains a privilege which may be withdrawn by
the people should he betray his oath of office. Thus, he must not frown upon
accountability checks which aim to show how well he is performing his
delegated power. For, it is through these mechanisms of transparency and
accountability that he is able to prove to his constituency that he is worthy of
the continued privilege.

WHEREFORE, in view of the foregoing considerations, the petition is

DISMISSED for lack of merit.

SO ORDERED.