Ray Peter O.

Vivo
Versus
Philippine Amusement and Game Corporation (PAGCOR)

G.R. No. 187854

November 12, 2013

Facts:
The petitioner was employed by respondent Philippine Amusement and Gaming
Corporation (PAGCOR) on September 9, 1986, and was PAGCOR’s Managing Head of
its Gaming Department. On February 21, 2002, he received a letter from Teresita S. Ela,
the Senior Managing Head of PAGCOR’s Human Resources Department, advising that
he was being administratively charged with gross misconduct, rumor-mongering,
conduct prejudicial to the interest of the company, and loss of trust and confidence; that
he should submit a written explanation of the charges; and that he was at the same time
being placed under preventive suspension.

On February 26, 2002, the petitioner’s counsel, replying to Ela’s letter, assailed
the propriety of the show-cause memorandum as well as the basis for placing the
petitioner under preventive suspension. On March 14, 2002, the petitioner received the
summons for him to attend an administrative inquiry, instructing him to appear before
PAGCOR’s Corporate Investigation Unit (CIU) on March 15, 2002. At the petitioner’s
request, however, the inquiry was conducted at his residence on said date. His
statement was taken in a question-and-answer format. He was also furnished the
memorandum of charges that recited the accusations against him and indicated the acts
and omissions constituting his alleged offenses. Thereafter, the CIU tendered its
investigation report to PAGCOR’s Adjudication Committee. The Adjudication Committee
summoned the petitioner to appear before it on May 8, 2002 in order to address
questions regarding his case. His counsel moved for the re-scheduling of the meeting
because he would not be available on said date, but the Adjudication Committee denied
the request upon the reason that the presence of counsel was not necessary in the
proceedings. His counsel moved for the reconsideration of the denial of the request.

The petitioner received the letter dated May 15, 2002 from Ela informing him of
the resolution of the PAGCOR Board of Directors in its May 14, 2002 meeting to the
effect that he was being dismissed from the service. In its resolution dated April 11,
2007, the CSC ruled that PAGCOR had violated the petitioner’s right to due process,
and accordingly set aside his dismissal from the service. On February 27, 2009, the CA
promulgated its decision reversing and setting aside the decision of the CSC upon its
finding that the petitioner had been accorded procedural due process.
Issues:

1. The conclusion of the Court of Appeals that Petitioner’s right for due process was not
violated transgressed the fundamental rules in administrative due process.
2. The Court of Appeals decision in setting aside CSC Resolutions Nos. 070732, dated
01 April 2007, and 071485, dated 01 August 2007, is contrary to the Uniform Rules on
Administrative Cases in the Civil Service and settled jurisprudence.

Ruling:

The petition for review lacks merit.

The petitioner actively participated in the entire course of the investigation and
hearings conducted by PAGCOR. He received the letter from Ela apprising him of his
being administratively charged for several offenses, and directing him to submit an
explanation in writing. He was later on properly summoned to appear before the CIU,
which conducted its proceedings in his own residence upon his request. During the
administrative inquiry, the CIU served him a copy of the memorandum of charges, which
detailed the accusations against him and specified the acts and omissions constituting
his alleged offenses. He was also given the opportunity to appear before the
Adjudication Committee to answer clarificatory questions. Lastly, he was informed
through a memorandum of the decision of the Board of Directors dismissing him from
the service.
In contrast, the petitioner could not dispute the observance of his right to due
process by PAGCOR as set forth herein. He made no credible showing of the supposed
violation of his right to due process. He was heard through the written statement he
submitted in response to the memorandum of the charges against him. He actively
participated in the administrative inquiry conducted by the CIU at his own residence. He
was afforded the opportunity to clarify his position in the proceedings before the
Adjudication Committee. He was also able to appeal the adverse decision to dismiss
him from the service to the CSC. There is also no question that PAGCOR complied with
the twin-notice requirement prior to the termination of his employment, the first notice
being made through Ela’s letter dated February 21, 2002 informing him on his being
administratively charged for the offenses mentioned, and the second being through the
letter dated May 15, 2002 advising him that PAGCOR’s Board of Directors had resolved
to dismiss him from the service. It is settled that there is no denial of procedural due
process where the opportunity to be heard either through oral arguments or through
pleadings is accorded. The right to counsel is not imperative because administrative
investigations are themselves inquiries conducted only to determine whether there are
facts that merit disciplinary measures against erring public officers and employees, with
the purpose of maintaining the dignity of government service. It is noteworthy, however,
that the petitioner was actually assisted by his counsel from the outset of the
administrative case against him.
RAY PETER O. VIVO v. PHILIPPINE AMUSEMENT AND GAMING CORP., G.R. No.
187854, November 12, 2013

Administrative law; Right to counsel. A right to counsel is not indispensable in an administrative

proceeding “because administrative investigations are themselves inquiries conducted only to
determine whether there are facts that merit disciplinary measures against erring public officers
and employees, with the purpose of maintaining the dignity of government service.” In any
case, it was held in Gonzales v. Civil Service Commission (G.R. No. 156253) that “any defect in
the observance of due process is cured by the filing of a motion for reconsideration, and that
denial of due process cannot be successfully invoked by a party who was afforded opportunity
to be heard.”

Petitioner cannot claim that he was denied due process and deprived of his right to counsel
when he was assisted by a counsel during the initial stage of the administrative proceedings.
Petitioner’s counsel filed in behalf of petitioner the letter-requests to be furnished documents,
answer to memorandum of charges, the letter-request for re-setting of the conference, and
even the motion to reconsider the decision of the Board of Directors to dismiss him from the
service. The Court finds nothing legally objectionable to PAGCOR’s denial of petitioner’s request
to re-schedule the conference because his counsel would not be able to attend.

Administrative law; Right to due process. In administrative due process, “[t]he essence of due
process is to be heard, and, as applied to administrative proceedings this means a fair and
reasonable opportunity to explain one’s side, or an opportunity to seek a reconsideration of the
action or ruling complained of. Administrative due process cannot be fully equated with due
process in its strict legal sense, for in the former a formal or trial-type hearing is not always
necessary, and technical rules of procedure are not strictly applied.” CA correctly found that
petitioner’s pleadings explicitly admitted his dismissal was effected through board resolutions.
Assuming arguendo that there was no board resolution approving his dismissal, such absence
did not render the dismissal illegal but rather unauthorized that can be subject of ratification.

Civil Service Commission vs. Lucas

Facts:
Raquel Linatok filed with the office of filed with the Office of the Secretary of the
Department of Agriculture an affidavit-complaint against respondent Jose Lucas, a
photographer of the same agency for misconduct. The complaint stemmed from the
alleged act of Jose Lucas of touching and caressing complainant's thigh running down
to her ankle. After a formal investigation by the Board of Personnel Inquiry, it issued a
resolution finding respondent guilty of simple misconduct and recommending a penalty
of suspension for one month and one day. The CSC, however, found him guilty of grave
misconduct and imposed on him the penalty of dismissal from the service. The Court of
Appeals set aside the CSC resolution and reinstated that of the board and ruled that
respondent was denied due process as he came to know of the modification of the
charge against him only when aAhe received notice of the CSC resolution dismissing
him from the service. In its petition to the Supreme Court, petitioner contended that a
formal charges in an administrative case need not be drafted with the precision of an
information in a criminal prosecution.

Issue:
WON respondent Lucas was denied due process when the CSC found him guilty of
grave misconduct on the charge of simple misconduct

Held:

Yes. As Lucas was merely charged with simple misconduct but was convicted of grave
misconduct, he was deprived of his right to due process. In which the Court held that
“We sustain the ruling of the Court of Appeals that: (a) a basic requirement of due
process is that a person must be duly informed of the charges against him and that (b) a
person can not be convicted of a crime with which he was not charged. Administrative
proceedings are not exempt from basic and fundamental procedural principles, such as
the right to due process in investigations and proceedings.”

MAGCAMIT VS PDEA (G.R. NO. 198140 JANUARY 25, 2016)

IA1 Magcamit vs. Internal Affairs Service – Philippine Drug Enforcement Agency (IAS-PDEA)

G.R. No. 198140 January 25, 2016

Facts: In a letter dated April 13, 2008, addressed to Director General Dionisio R. Santiago, a
person named Delfin gave information about an alleged extortion done to his mother by
Magcamit and other PDEA agents. The PDEA agents denied the irregularities imputed to them
and maintained that the letter-complaint was made only to destroy their reputation.

On May 5, 2008, Magcamit and his co-agents, namely, IO3 Carlo Aldeon, IO2 Renato Infante, IO2
Ryan Alfaro, and IO2 Apolinario Mationg, Jr., were formally charged with Grave Misconduct for
demanding and/or obtaining P200,000.00 from Luciana M. Jaen (Jaen) in exchange for her
release after she was apprehended in a buy-bust operation in Lipa City. After they had
submitted their Answer, their case was submitted for recommendation and action.

In a memorandum dated May 20, 2008, Special Investigator V Romeo M. Enriquez (SI V
Enriquez) found Magcamit and his co-agents liable for grave misconduct and recommended that
they be dismissed from the civil service. Accordingly, they were dismissed on June 5, 2008.

Issue: Whether or not the letter is sufficient to initiate the administrative complaint against
petitioner.
Held: Yes. Although Magcamit assails that the lettercomplaint should not have been entertained
to begin with as it was not in accord with the Revised Rules on Administrative Cases in the Civil
Service (RACCS), we do not find any need to dwell on this point. The administrative complaint
was initiated when Jaen and Delfin executed sworn statements and filed them with the IAS-
PDEA. As the CA correctly pointed out, the letter-complaint did not, by itself, commence the
administrative proceedings against Magcamit; it merely triggered a fact-finding investigation by
the IAS-PDEA. Accordingly, these sworn statements – together with the letter-complaint – were
used as pieces of evidence to build a prima facie case for extortion warranting a formal charge
for grave misconduct.

Administrative determinations of contested cases are by their nature quasi-judicial; there is no

requirement for strict adherence to technical rules that are observed in truly judicial
proceedings. As a rule, technical rules of procedure and evidence are relaxed in administrative
proceedings in order “to assist the parties in obtaining just, speedy and inexpensive
determination of their respective claims and defenses.” By relaxing technical rules,
administrative agencies are, thus, given leeway in coming up with a decision.

Nonetheless, in deciding disciplinary cases pursuant to their quasi-judicial powers,

administrative agencies must still comply with the fundamental principle of due process.
Administrative tribunals exercising quasi judicial powers are unfettered by the rigidity of certain
procedural requirements, subject to the observance of fundamental and essential requirements
of due process in justiciable cases presented before them.

Due process in administrative cases, in essence, is simply an opportunity to explain one’s side or
to seek a reconsideration of the action or ruling. For as long as the parties were given fair and
reasonable opportunity to be heard before judgment was rendered, the demands of due
process were sufficiently met.

The cardinal primary rights and principles in administrative proceedings that must be respected
are those outlined in the landmark case of Ang Tibay v. Court of Industrial Relations, quoted
below:

1) The first of these rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in support thereof.

(2) Not only must the party be given an opportunity to present his case and to adduce evidence
tending to establish the rights which he asserts but the tribunal must consider the evidence
presented.

(3) While the duty to deliberate does not impose the obligation to decide right, it does imply a
necessity which cannot be disregarded, namely, that of having something to support its
decision. A decision with absolutely nothing to support it is a nullity, a place when directly
attached.
(4) Not only must there be some evidence to support a finding or conclusion, but the evidence
must be substantial. “Substantial evidence is more than a mere scintilla. It means such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.”

(5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected.

(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision.

(7) The Court of Industrial Relations should, in all controversial questions, render its decision in
such a manner that the parties to the proceeding can know the various issues involved, and the
reasons for the decisions rendered. The performance of this duty is inseparable from the
authority conferred upon it.

GLOBE V. NTC
GLOBE V. NTC G.R. No. 143964. July 26, 2004

FACTS:

On 4 June 1999, Smart filed a Complaint with public respondent NTC,praying that NTC order the
immediate interconnection of Smarts and Globes GSM networks. Smart alleged that Globe, with
evident bad faith and malice, refused to grant Smarts request for the interconnection of SMS.

Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing grounds that the
Complaint was premature, Smarts failure to comply with the conditions precedent required in
Section 6 of NTC Memorandum Circular 9-7-93,19 and its omission of the mandatory
Certification of Non-Forum Shopping.

On 19 July 1999, NTC issued the Order now subject of the present petition.

According to NTC Both Smart and Globe were equally blameworthy for their lack of cooperation
in the submission of the documentation required for interconnection and for having unduly
maneuvered the situation into the present impasse.

NTC held that since SMS falls squarely within the definition of value-added (VAS) service or
enhanced-service given in NTC Memorandum Circular No. 8-9-95 (MC No. 8-9-95) their
implementation of SMS interconnection is mandatory.The NTC also declared that both Smart
and Globe have been providing SMS without authority from it.

Globe filed with the CA a Petition for Certiorari and Prohibition to nullify and set aside the Order
and to prohibit NTC from taking any further action in the case.
Globe reiterated its previous arguments that the complaint should have been dismissed for
failure to comply with conditions precedent and the non-forum shopping rule.They claimed that
NTC acted without jurisdiction in declaring that it had no authority to render SMS, pointing out
that the matter was not raised as an issue before it at all.

They alleged that the Order is a patent nullity as it imposed an administrative penalty for an
offense for which neither it nor Smart was sufficiently charged nor heard on in violation of their
right to due process.

The CA issued a Temporary Restraining Order (TRO) on 31 Aug 1999. In its Memorandum, Globe
called the attention of the CA in an earlier NTC decision regarding Islacom, holding that SMS is a
deregulated special feature and does not require the prior approval of the NTC.

ISSUE:

Whether NTC may legally require Globe to secure NTC approval before it continues providing
SMS.
WON SMS is a Value Added Service (VAS) under Public telecommunications Act (PTA) of 1995;

HELD:

1. NO. The NTC may not legally require Globe to secure its approval for Globe to continue
providing SMS. This does not imply though that NTC lacks authority to regulate SMS or to
classify it as VAS. However, the move should be implemented properly, through unequivocal
regulations applicable to all entities that are similarly situated, and in an even-handed manner.
This should not be interpreted, however, as removing SMS from the ambit of jurisdiction and
review by the NTC. The NTC will continue to exercise, by way of its broad grant, jurisdiction over
Globe and Smart’s SMS offerings, including questions of rates and customer complaints. Yet
caution must be had. Much complication could have been avoided had the NTC adopted a
proactive position, promulgating the necessary rules and regulations to cope up with the advent
of the technologies it superintends. With the persistent advent of new offerings in the
telecommunications industry, the NTC’s role will become more crucial than at any time before.

2. NO. There is no legal basis under the PTA or the memorandum circulars promulgated by the
NTC to denominate SMS as VAS, and any subsequent determination by the NTC on whether
SMS is VAS should be made with proper regard for due process and in conformity with the PTA.

Is SMS a VAS, enhanced service, or a special feature? Apparently, even the NTC is unsure. It had
told Islacom that SMS was a special feature, then subsequently held that it was a VAS. However,
the pertinent laws and regulations had not changed from the time of the Islacom letter up to
the day the Order was issued. Only the thinking of NTC did.
More significantly, NTC never required ISLACOM to apply for prior approval in order to provide
SMS, even after the Order to that effect was promulgated against Globe and Smart. This fact
was admitted by NTC during oral arguments. NTCs treatment of Islacom, apart from being
obviously discriminatory, puts into question whether or not NTC truly believes that SMS is VAS.
NTC is unable to point out any subsequent rule or regulation, enacted after it promulgated the
adverse order against Globe and Smart, affirming the newly-arrived determination that SMS is
VAS.

In fact, as Smart admitted during the oral arguments, while it did comply with the NTC Order
requiring it to secure prior approval, it was never informed by the NTC of any action on its
request. While NTC counters that it did issue a Certificate of Registration to Smart, authorizing
the latter as a provider of SMS, such Certificate of Registration was issued only on 13 March
2003, or nearly four (4) years after Smart had made its request.This inaction indicates a lack of
seriousness on the part of the NTC to implement its own rulings. Also, it tends to indicate the
lack of belief or confusion on NTCs part as to how SMS should be treated. Given the abstract set
of rules the NTC has chosen to implement, this should come as no surprise. Yet no matter how
content the NTC may be with its attitude of sloth towards regulation, the effect may prove
ruinous to the sector it regulates.

Moreover, the Court realizes that the PTA of 1995 is not intended to constrain the industry
within a cumbersome regulatory regime. The policy as pre-ordained by legislative fiat renders
the traditionally regimented business in an elementary free state to make business decisions,
avowing that it is under this atmosphere that the industry would prosper.

It is disappointing at least if the deregulation thrust of the law is skirted deliberately. But it is
ignominious if the spirit is defeated through a crazy quilt of vague, overlapping rules that are
implemented haphazardly.

G.R. No. 143964 July 26, 2004

GLOBE TELECOM, INC., petitioner,

vs.
THE NATIONAL TELECOMMUNICATIONS COMMISSION, COMMISSIONER JOSEPH A. SANTIAGO,
DEPUTY COMMISSIONERS AURELIO M. UMALI and NESTOR DACANAY, and SMART
COMMUNICATIONS, INC. respondents.

Telecommunications services are affected by a high degree of public interest. Telephone

companies have historically been regulated as common carriers, and indeed, the 1936 Public
Service Act has classified wire or wireless communications systems as a "public service," along
with other common carriers. The present petition dramatizes to a degree the clash of
philosophies between traditional notions of regulation and the au corant trend to deregulation.
Appropriately, it involves the most ubiquitous feature of the mobile phone, Short Messaging
Service ("SMS") or "text messaging," which has been transformed from a mere technological fad
into a vital means of communication.

Facts:
Globe and private respondent Smart Communications, Inc. are both grantees of valid and
subsisting legislative franchises, authorizing them, among others, to operate a Cellular Mobile
Telephone System ("CMTS"), utilizing the Global System for Mobile Communication ("GSM")
technology. Among the inherent services supported by the GSM network is the Short Message
Services (SMS),also known colloquially as "texting," which has attained immense popularity in
the Philippines as a mode of electronic communication.

On 4 June 1999, Smart filed a Complaint with NTC to interconnect Smart's and Globe's GSM
networks, particularly their respective SMS or texting services. The Complaint arose from the
inability of the two leading CMTS providers to effect interconnection. Smart alleged that Globe,
with evident bad faith and malice, refused to grant Smart's request for the interconnection of
SMS. But NTC also declared that both Smart and Globe have been providing SMS without
authority from it, in violation of Section 420 (f) of MC No. 8-9-95 which requires PTEs intending
to provide value-added services (VAS) to secure prior approval from NTC through an
administrative process.

Globe filed with the Court of Appeals a Petition for Certiorari and Prohibition to nullify and set
aside the Order and to prohibit NTC from taking any further action in the case. It reiterated its
previous arguments that the complaint should have been dismissed for failure to comply with
conditions precedent and the non-forum shopping rule. It also claimed that NTC acted without
jurisdiction in declaring that it had no authority to render SMS, pointing out that the matter was
not raised as an issue before it at all. Finally, Globe alleged that the Order is a patent nullity as it
imposed an administrative penalty for an offense for which neither it nor Smart was sufficiently
charged nor heard on in violation of their right to due process.

After the Court of Appeals denied the Motion for Partial Reconsideration, Globe elevated the
controversy to the Supreme Court.

Issues
1. Whether NTC may legally require Globe to secure NTC approval before it continues providing
SMS;

2. Whether SMS is a VAS under the PTA, or special feature under NTC MC No. 14-11-97;

3. Whether NTC acted with due process in levying the fine against Globe; and

4. Whether Globe should have first filed a motion for reconsideration before the NTC, but this
relatively minor question can be resolved in brief.

Held:
Necessity of Filing Motion for Reconsideration

Globe deliberately did not file a motion for reconsideration with the NTC before elevating the
matter to the Court of Appeals via a petition for certiorari. Generally, a motion for
reconsideration is a prerequisite for the filing of a petition for certiorari.

In opting not to file the motion for reconsideration, Globe asserted before the Court of Appeals
that the case fell within the exceptions to the general rule. The appellate court in the
questioned Decision cited the purported procedural defect, yet chose anyway to rule on the
merits as well.

Globe's election to elevate the case directly to the Court of Appeals, skipping the standard
motion for reconsideration, is not a mortal mistake. According to Globe, the Order is a patent
nullity, it being violative of due process; the motion for reconsideration was a useless or idle
ceremony; and, the issue raised purely one of law. Indeed, the circumstances adverted to are
among the recognized exceptions to the general rule.

The Merits

Globe hinges its claim of exemption from obtaining prior approval from the NTC on NTC
Memorandum Circular No. 14-11-97 ("MC No. 14-11-97"). Globe notes that in a 7 October 1998
ruling on the application of Islacom for the operation of SMS, NTC declared that the applicable
circular for SMS is MC No. 14-11-97. Under this ruling, it is alleged, NTC effectively denominated
SMS as a "special feature" which under MC No. 14-11-97 is a deregulated service that needs no
prior authorization from NTC. Globe further contends that NTC's requiring it to secure prior
authorization violates the due process and equal protection clauses, since earlier it had
exempted the similarly situated Islacom from securing NTC approval prior to its operation of
SMS.

The statutory basis for the NTC's determination must be thoroughly examined. Our first level of
inquiry should be into the PTA. It is the authority behind MC No. 8-9-95. It is also the law that
governs all public telecommunications entities ("PTEs") in the Philippines.
Public Telecommunications Act

The PTA has not strictly adopted laissez-faire as its underlying philosophy to promote the
telecommunications industry. In fact, the law imposes strictures that restrain within reason how
PTEs conduct their business. For example, it requires that any access charge/revenue sharing
arrangements between all interconnecting carriers that are entered into have to be submitted
for approval to NTC. At the same time, the general thrust of the PTA is towards modernizing the
legal framework for the telecommunications services sector. The transmutation has become
necessary due to the rapid changes as well within the telecommunications industry.

One of the novel introductions of the PTA is the concept of a "value-added service" ("VAS").
Section 11 of the PTA governs the operations of a "value-added service provider," which the law
defines as "an entity which relying on the transmission, switching and local distribution facilities
of the local exchange and inter-exchange operators, and overseas carriers, offers enhanced
services beyond those ordinarily provided for by such carriers." Section 11 recognizes that VAS
providers need not secure a franchise, provided that they do not put up their own network.
However, a different rule is laid down for telecommunications entities such as Globe and PLDT.

The Pertinent NTC Memorandum Circulars

The NTC relied on Section 420(f) of the Implementing Rules of the PTA ("Implementing Rules")
as basis for its claim that prior approval must be secured from it before Globe can operate SMS.
Section 420 of the Implementing Rules, contained in MC No. 8-9-95.

In short, the legal basis invoked by NTC in claiming that SMS is VAS has not been duly
established. The fault falls squarely on NTC. With the dual classification of SMS as a special
feature and a VAS and the varying rules pertinent to each classification, NTC has unnecessarily
complicated the regulatory framework to the detriment of the industry and the consumers. But
does that translate to a finding that the NTC Order subjecting Globe to prior approval is void?
There is a fine line between professional mediocrity and illegality. NTC's byzantine approach to
SMS regulation is certainly inefficient. Unfortunately for NTC, its actions have also transgressed
due process in many ways, as shown in the ensuing elucidation.

In opting not to file the motion for reconsideration, Globe asserted before the Court of Appeals
that the case fell within the exceptions to the general rule. The appellate court in the
questioned Decision cited the purported procedural defect, yet chose anyway to rule on the
merits as well.

Globe's election to elevate the case directly to the Court of Appeals, skipping the standard
motion for reconsideration, is not a mortal mistake. According to Globe, the Order is a patent
nullity, it being violative of due process; the motion for reconsideration was a useless or idle
ceremony; and, the issue raised purely one of law. Indeed, the circumstances adverted to are
among the recognized exceptions to the general rule.

The Merits

Globe hinges its claim of exemption from obtaining prior approval from the NTC on NTC
Memorandum Circular No. 14-11-97 ("MC No. 14-11-97"). Globe notes that in a 7 October 1998
ruling on the application of Islacom for the operation of SMS, NTC declared that the applicable
circular for SMS is MC No. 14-11-97. Under this ruling, it is alleged, NTC effectively denominated
SMS as a "special feature" which under MC No. 14-11-97 is a deregulated service that needs no
prior authorization from NTC. Globe further contends that NTC's requiring it to secure prior
authorization violates the due process and equal protection clauses, since earlier it had
exempted the similarly situated Islacom from securing NTC approval prior to its operation of
SMS.

The statutory basis for the NTC's determination must be thoroughly examined. Our first level of
inquiry should be into the PTA. It is the authority behind MC No. 8-9-95. It is also the law that
governs all public telecommunications entities ("PTEs") in the Philippines.

Public Telecommunications Act

The PTA has not strictly adopted laissez-faire as its underlying philosophy to promote the
telecommunications industry. In fact, the law imposes strictures that restrain within reason how
PTEs conduct their business. For example, it requires that any access charge/revenue sharing
arrangements between all interconnecting carriers that are entered into have to be submitted
for approval to NTC. At the same time, the general thrust of the PTA is towards modernizing the
legal framework for the telecommunications services sector. The transmutation has become
necessary due to the rapid changes as well within the telecommunications industry.

One of the novel introductions of the PTA is the concept of a "value-added service" ("VAS").
Section 11 of the PTA governs the operations of a "value-added service provider," which the law
defines as "an entity which relying on the transmission, switching and local distribution facilities
of the local exchange and inter-exchange operators, and overseas carriers, offers enhanced
services beyond those ordinarily provided for by such carriers." Section 11 recognizes that VAS
providers need not secure a franchise, provided that they do not put up their own network.
However, a different rule is laid down for telecommunications entities such as Globe and PLDT.
VICTORIAS MILLING CO., INC., petitioner, vs OFFICE OF THE PRESIDENTIAL ASSISTANT FOR LEGAL
AFFAIRS and PHILIPPINE PORTS AUTHORITY, respondents.
August 27, 1987

FACTS:

Victoria’s Milling doesn’t want to pay what the PPA is charging it as fees and charges. VMC says
that since it operates a private wharf on its own land and since the government has never spent
anything for its maintenance, it shouldn’t pay. PPA still tells it to pay. It appeals to the CTA, is
denied; to the SC, is denied; and t the Office of the President, and is denied for being filed out of
the reglementary period.

HELD: VMC’s Appeal is filed out of reglementary period and the prior filing of it in other forums
does not toll the period. Such is stated in properly published rules of the PPA, authorized to
make its own rules by a PD. Even if the appeal were to be heard, VMC still has to pay because
the fees and charges PPA collects are not for the use of the wharf that petitioner owns but for
the privilege of navigating in public waters, of entering and leaving public harbors and berthing
on public streams or waters regardless of whether the wharf is private or not.

FACTS:
 Apr. 1981—the Iloilo Port Manager of the PPA wrote Victorias Milling Co. (VMC) requiring
it to:
o have its tugboats and barges undergo harbor formalities
o pay entrance/clearance fees and berthing fees
o secure a permit for cargo handling operations at its Da-an Banua wharf; and
o remit 10% of its gross income for said operations as the government's share.
 VMC, through 2 letters dated June 1981, maintained that it was exempt from paying PPA any
fee or charge because:
o the wharf and an its facilities were built and installed in its land;
o repair and maintenance thereof were and solely paid by it;
o even the dredging and maintenance of the Malijao River Channel from Guimaras Strait
up to VMC’s private wharf are being done by their equipment and personnel;
o at no time has the government ever spent a single centavo for such activities.
 VMC also asserted that the wharf was being used mainly to handle sugar purchased from
district planters pursuant to existing milling agreements.
 Nov. 1981—PPA sent a Memorandum of its executive officer which justified the PPA’s
demands. It denied further request for reconsideration from VMC.
 March 1982—VMC notified PPA that they would be filing an appeal (through Petition for
Review) with the Court of Tax Appeals, which it eventually did.
 January 1984—CTA dismissed VMC’s petition saying that it did not have jursidiction. It
recommended that it file the appeal with the Office of the President.
 VMC filed the Petition for Review with the Supreme Court, but it was denied on Feb. 1984.
 April 1984—VMC filed an appeal with the Office of the President which issued a decision
denying it on the ground that it was filed beyond the reglementary period. An MR was filed
but also denied.
 VMC brought the Decision up to the SC which gave it due course.

ISSUE: WON the 30 day period for appeal under Section 331 of the A.O. No13-77 was tolled by
the pendency of the petitions first filed with the CTA and with the SC. (NO)
ISSUE ON TOPIC: WON it was exempt from payment of any fees and charges. (NO)

HELD: The petition is devoid of merit.

RATIO: VMC claims that in filing first with the CTA then the SC the petitions for appeal of the
PPA decision, it did so in good faith. It contends that when RA No. 1125 (creating the Court of
Tax Appeals) was passed in 1955, PPA was not yet in existence. The CTA had exclusive appellate
jurisdiction over appeals from decisions of the Commissioner of Customs regarding, among
others, customs duties, fees and other money charges imposed by the Bureau under the Tariff
and Customs Code.
PD 505 (creating the PPA) and 857 (revising its charter, merely transferring to the PPA the
powers of the Bureau of Customs to impose and collect customs duties, fees and other money
charges concerning the use of ports and facilities thereat) does not contain any provision
regarding appeals of its decisions.
These contentions are untenable for while it is true that neither Presidential Decree No. 505 nor
Presidential Decree No. 857 provides for the remedy of appeal to the Office of the President,
nevertheless, Presidential Decree No. 857 empowers the PPA to promulgate such rules as would
aid it in accomplishing its purpose. Section 6 of the said Decree provides —

Sec. 6. Corporate Powers and Duties —

a. The corporate duties of the Authority shall be:
xxx xxx xxx
(III) To prescribe rules and regulations, procedures, and guidelines governing the
establishment, construction, maintenance, and operation of all other ports, including
private ports in the country.
xxx xxx xxx

Pursuant to the aforequoted provision, PPA enacted Administrative Order No. 13-77 precisely to
govern, among others, appeals from PPA decisions.

As to petitioner's contention that Administrative Order No. 13-77, specifically its Section 131,
only provides for appeal when the decision is adverse to the government, worth mentioning is
the observation of the Solicitor General that petitioner misleads the Court. Said Section 131
provides —

Sec. 131. Supervisory Authority of General Manager and PPA Board. —

xxx
…that any party aggrieved by the decision of the General Manager as affirmed by the
PPA Board may appeal said decision to the Office of the President within thirty (30)
days from receipt of a copy thereof.

The facts of this case show that VMC's failure to appeal to the Office of the President on time
stems entirely from its own negligence and not from a purported ignorance of the proper
procedural steps to take. It had been aware of the rules governing PPA procedures. In fact, as
embodied in the December 16, 1985 Order of the Office of the President, it even assailed the
PPA's rule making powers at the hearing before the Court of Tax Appeals.

Lesson Topic Issue:

Even if the appeal were given due course, there is no merit to the case of VMC against PPA.

The fees and charges PPA collects are not for the use of the wharf that petitioner owns but for
the privilege of navigating in public waters, of entering and leaving public harbors and berthing
on public streams or waters. Berthing charges against a vessel are collectible regardless of the
fact that mooring or berthing is made from a private pier or wharf. This is because the
government maintains bodies of water in navigable condition and it is to support its operations
in this regard that dues and charges are imposed for the use of piers and wharves regardless of
their ownership.

As to the requirement to remit 10% of the handling charges, Section 6B-(ix) of the Presidential
Decree No. 857 authorized the PPA "To levy dues, rates, or charges for the use of the premises,
works, appliances, facilities, or for services provided by or belonging to the Authority, or any
organization concerned with port operations." This 10% government share of earnings of
arrastre and stevedoring operators is in the nature of contractual compensation to which a
person desiring to operate arrastre service must agree as a condition to the grant of the permit
to operate.

DISPOSITIVE: Petition is hereby DISMISSED.

SUBIDO PAGENTE CERTEZA MENDOZA v. CA, GR No. 216914, 2016-12-06

Facts:
Issues:
whether or not the appellate court, through the Presiding Justice, gravely abused its discretion
when it effectively denied SPCMB's letter-request for confirmation that the AMLC had applied
(ex-parte) for, and was granted, a bank inquiry order to examine SPCMB's bank accounts relative
to the investigation conducted on Vice-President Binay's accounts.
Ruling:
As presently worded, Section 11 of the AMLA has three elements: (1) ex-parte application by the
AMLC; (2) determination of probable cause by the CA; and (3) exception of court order in cases
involving unlawful activities defined in Sections 3(i)(1), (2), and (12).
Succinctly, Section 11 of the AMLA providing for ex-parte application and inquiry by the AMLC
into certain bank deposits and investments does not violate substantive due process, there being
no physical seizure of property involved at that stage. It is the preliminary and actual seizure of
the bank deposits or investments in question which brings these within reach of the judicial
process, specifically a determination that the seizure violated due process.
a bank inquiry order under Section 11 does not necessitate any form of physical seizure of
property of the account holder.
authorizes is the examination of the particular deposits or investments in banking institutions or
non-bank financial institutions.
examined on particular details such as the account holder's record of deposits and transactions.
Said records are in the possession of the bank and therefore cannot be destroyed at the instance
of the account holder alone as that would require the extraordinary cooperation and devotion of
the bank.
the AMLA now specifically provides for an ex-parte application for an order authorizing inquiry
or examination into bank deposits or investments which continues to pass constitutional muster.
In this case, at the investigation stage by the AMLC into possible money laundering offenses,
SPCMB demands that it have notice and hearing of AMLC's investigation into its bank accounts.
the grant of jurisdiction over cases involving money laundering offences is bestowed on the
Regional Trial Courts and the Sandiganbayan as the case may be.
Textually, the AMLA is the first line of defense against money laundering in compliance with our
international obligation. There are three (3) stages of determination, two (2) levels of
investigation, falling under three (3) jurisdictions:

1. The AMLC investigates possible money laundering offences and initially determines
whether there is probable cause to charge any person with a money laundering offence
under Section 4 of the AMLA, resulting in the filing of a complaint with the Department
of Justice or the Office of the Ombudsman;[21] 2. The DOJ or the Ombudsman conducts
the preliminary investigation proceeding and if after due notice and hearing finds
probable cause for money laundering offences, shall file the necessary information
before the Regional Trial Courts or the Sandiganbayan;[22] 3. The RTCs or the
Sandiganbayan shall try all cases on money laundering, as may be applicable.
Nowhere from the text of the law nor its Implementing Rules and Regulations can we glean that
the AMLC exercises quasi-judicial functions
That the AMLC does not exercise quasi-judicial powers and is simply an investigatory body
finds support in our ruling in Shu v. Dee.
the AMLC functions solely as an investigative body in the instances mentioned in Rule 5.b.[26]
Thereafter, the next step is for the AMLC to file a Complaint with either the DOJ or the
Ombudsman pursuant to Rule 6.b.
Plainly, the AMLC's investigation of money laundering offenses and its determination of
possible money laundering offenses, specifically its inquiry into certain bank accounts allowed
by court order, does not transform it into an investigative body exercising quasi-judicial powers.
Hence, Section 11 of the AMLA, authorizing a bank inquiry court order, cannot be said to violate
SPCMB's constitutional right to procedural due process.
The warning in Eugenio that an ex-parte proceeding authorizing the government to inspect
certain bank accounts or investments without notice to the depositor would have significant
implications on the right to privacy still does not preclude such a bank inquiry order to be
allowed by specific legislation as an exception to the general rule of absolute confidentiality of
bank deposits.

Verse 2 -Subido Pagente Certeza Mendoza and Binay Law Offices vs.
Court of Appeals, et al. Case Digest

Facts
Challenged in this petition for certiorari and prohibition under Rule 65 of the Rules of
Court is the constitutionality of Section 11 of R.A No. 9160, the Anti-Money Laundering
Act, as amended, specifically the Anti-Money Laundering Council's authority to file with
the Court of Appeals (CA) in this case, an ex-parte application for inquiry into certain
bank deposits and investments, including related accounts based on probable cause.

In 2015, a year before the 2016 presidential elections, reports abounded on the
supposed disproportionate wealth of then Vice President Jejomar Binay and the rest of
his family, some of whom were likewise elected public officers. The Office of the
Ombudsman and the Senate conducted investigations and inquiries thereon.

From various news reports announcing the inquiry into then Vice President Binay's bank
accounts, including accounts of members of his family, petitioner Subido Pagente
Certeza Mendoza & Binay Law Firm (SPCMB) was most concerned with the article
published in the Manila Times on 25 February 2015 entitled "Inspect Binay Bank
Accounts" which read, in pertinent part:
xxx The Anti-Money Laundering Council (AMLC) asked the Court of Appeals (CA) to
allow the [C]ouncil to peek into the bank accounts of the Binays, their corporations, and
a law office where a family member was once a partner.

xx xx
Also the bank accounts of the law office linked to the family, the Subido Pagente
Certeza Mendoza & Binay Law Firm, where the Vice President's daughter Abigail was a
former partner.

By 8 March 2015, the Manila Times published another article entitled, "CA orders probe
of Binay 's assets" reporting that the appellate court had issued a Resolution granting
the ex-parte application of the AMLC to examine the bank accounts of SPCMB.
Forestalled in the CA thus alleging that it had no ordinary, plain, speedy, and adequate
remedy to protect its rights and interests in the purported ongoing unconstitutional
examination of its bank accounts by public respondent Anti-Money Laundering Council
(AMLC), SPCMB undertook direct resort to this Court via this petition for certiorari and
prohibition on the following grounds that the he Anti-Money Laundering Act is
unconstitutional insofar as it allows the examination of a bank account without any
notice to the affected party: (1) It violates the person's right to due process; and (2) It
violates the person's right to privacy.

Issues:
1. Whether Section 11 of R.A No. 9160 violates substantial due process.
2. Whether Section 11 of R.A No. 9160 violates procedural due process.
3. Whether Section 11 of R.A No. 9160 is violative of the constitutional right to
privacy enshrined in Section 2, Article III of the Constitution.

Rulings
1. No. We do not subscribe to SPCMB' s position. Succinctly, Section 11 of the AMLA
providing for ex-parte application and inquiry by the AMLC into certain bank deposits
and investments does not violate substantive due process, there being no physical
seizure of property involved at that stage.
In fact, .Eugenio delineates a bank inquiry order under Section 11 from a freeze order
under Section 10 on both remedies' effect on the direct objects, i.e. the bank deposits
and investments:

On the other hand, a bank inquiry order under Section 11 does not necessitate any form
of physical seizure of property of the account holder. What the bank inquiry order
authorizes is the examination of the particular deposits or investments in banking
institutions or non-bank financial institutions. The monetary instruments or property
deposited with such banks or financial institutions are not seized in a physical sense,
but are examined on particular details such as the account holder's record of deposits
and transactions. Unlike the assets subject of the freeze order, the records to be
inspected under a bank inquiry order cannot be physically seized or hidden by the
account holder. Said records are in the possession of the bank and therefore cannot be
destroyed at the instance of the account holder alone as that would require the
extraordinary cooperation and devotion of the bank.

At the stage in which the petition was filed before us, the inquiry into certain bank
deposits and investments by the AMLC still does not contemplate any form of physical
seizure of the targeted corporeal property.

2. No. The AMLC functions solely as an investigative body in the instances mentioned
in Rule 5.b.26 Thereafter, the next step is for the AMLC to file a Complaint with either
the DOJ or the Ombudsman pursuant to Rule 6b. Even in the case of Estrada v. Office
of the Ombudsman, where the conflict arose at the preliminary investigation stage by
the Ombudsman, we ruled that the Ombudsman's denial of Senator Estrada's Request
to be furnished copies of the counter-affidavits of his co-respondents did not violate
Estrada's constitutional right to due process where the sole issue is the existence of
probable cause for the purpose of determining whether an information should be filed
and does not prevent Estrada from requesting a copy of the counter-affidavits of his co-
respondents during the pre-trial or even during trial.

Plainly, the AMLC's investigation of money laundering offenses and its determination of
possible money laundering offenses, specifically its inquiry into certain bank accounts
allowed by court order, does not transform it into an investigative body exercising quasi-
judicial powers. Hence, Section 11 of the AMLA, authorizing a bank inquiry court order,
cannot be said to violate SPCMB's constitutional right to due process.

3. No. We now come to a determination of whether Section 11 is violative of the

constitutional right to privacy enshrined in Section 2, Article III of the Constitution.
SPCMB is adamant that the CA's denial of its request to be furnished copies of AMLC's
ex-parte application for a bank inquiry order and all subsequent pleadings, documents
and orders filed and issued in relation thereto, constitutes grave abuse of discretion
where the purported blanket authority under Section 11: ( 1) partakes of a general
warrant intended to aid a mere fishing expedition; (2) violates the attorney-client
privilege; (3) is not preceded by predicate crime charging SPCMB of a money
laundering offense; and ( 4) is a form of political harassment [of SPCMB' s] clientele.

We thus subjected Section 11 of the AMLA to heightened scrutiny and found nothing
arbitrary in the allowance and authorization to AMLC to undertake an inquiry into certain
bank accounts or deposits. Instead, we found that it provides safeguards before a bank
inquiry order is issued, ensuring adherence to the general state policy of preserving the
absolutely confidential nature of Philippine bank accounts:
1. The AMLC is required to establish probable cause as basis for its ex-parte
application for bank inquiry order;
2. The CA, independent of the AMLC's demonstration of probable cause, itself
makes a finding of probable cause that the deposits or investments are related to an
unlawful activity under Section 3(i) or a money laundering offense under Section 4 of
the AMLA;
3. A bank inquiry court order ex-parte for related accounts is preceded by a bank
inquiry court order ex-parte for the principal account which court order ex-parte for
related accounts is separately based on probable cause that such related account is
materially linked to the principal account inquired into; and
4. The authority to inquire into or examine the main or principal account and the
related accounts shall comply with the requirements of Article III, Sections 2 and 3 of the
Constitution. The foregoing demonstrates that the inquiry and examination into the bank
account are not undertaken whimsically and solely based on the investigative discretion
of the AMLC. In particular, the requirement of demonstration by the AMLC, and
determination by the CA, of probable cause emphasizes the limits of such governmental
action. We will revert to these safeguards under Section 11 as we specifically discuss
the CA' s denial of SPCMB' s letter request for information concerning the purported
issuance of a bank inquiry order involving its accounts.

All told, we affirm the constitutionality of Section 11 of the AMLA allowing the ex-parte
application by the AMLC for authority to inquire into, and examine, certain bank deposits
and investments.

WHEREFORE, the petition is DENIED. Section 11 of Republic Act No. 9160, as

amended, is declared VALID and CONSTITUTIONAL.